20 Episode results for "TD AMERITRADE"
EBay sells off StubHub for $4B Uber gets cancelled from London Charles Schwabs Lannister-style acquisition of TD Ameritrade
"Nick this is Jack and this is snacks. Daily is Tuesday November twenty. Six happy day before Thanksgiving turns out. This is the best snacks daily. We've ever done before thanksgiving. I got my first turns in at sugarbush. Ski Resort in Vermont Neck is kicking in New York City. We're bringing new three great stories. Always Jack I jumped over six cobblestones to get to the studio. Can we start it off. Story Number One. What have you got ebay? Bought a company called Stub back in two thousand seven for three hundred million billion dollars and yesterday it's sold the company for four billion dollars. That's a nice flat bread. Their their company they sold the to Europe's Vigo Aka basically the same. Same thing is ticketmaster and step up. But it's in Europe and does the same kind of thing. Yeah they all charge annoying delivery fees for like forty percent when you buy tickets online. Yeah you're accessing the concert on my phone wise Taylor swift not getting this money. Where's that twelve bucks going away because I bought this tickets? second-story is Charles Schwab. It cut trading commissions two zero dollars last last month now it is dropping twenty six billion dollars to officially acquire its rival. Td Ameritrade interesting strategy here because it cut those commission fees as part of a a master plan to wound td Ameritrade before it acquired the company. This is like Jamie Lancaster stuff right. Their third and final story UBER got itself self a new. CEO It got new swagger. It went kind of global apology tour the last couple of years now. It's been banned in London Aka its fourth biggest market market in the world. That's the second like ban. We've heard of for Uber in London and it proves that public policy is the biggest threat for Uber. Before we jump into all that snappers we gotTa Talk Little Bit about driving etiquette that work. Jack Safe driving. I love talking about this drinking while driving. Of course not. That's banned never do that. Ever texting sting while driving. I tell my wife every day. Please don't text and drive like I love you. Just don't texture that check third and final one here shopping while driving. Shopping meanwhile driving we read a headline that this has become a thing. I didn't believe for a second and I want to dig deeper into this survey that Knicks about to tell you about I told Jack hold on one second I just got finish buying this microwave and then I'll put the car in park but before we could cover all this. We did a little more. Research turns out. Forty percent of Americans are shopping on their phones while they're drive arrive okay. This was a poll conducted by Harris Research. Funded by a car insurance company. Which immediately makes me question the results of this survey there they were asterix all over this thing but we did notice what there was? Apparently a rise in Americans doing this from last year to this year yes thirty. Seven percent to thirty nine percent of Americans had admitted that they have done some sort of online shopping from their phone while behind the wheel driving the car. That sounds terribly unsafe. Now now this can include like purchasing the product researching maybe even just checking the order status. Because you're really frustrated. Outdoor voices took five days to get something that was supposed to be two day delivery. It's knackers honestly honestly. There's one thing you should be doing while driving driving driving while driving is the best thing you can be doing while driving these second best thing you can be doing while driving arriving snacks daily snacking while driving. It's a wonderful thing rolls off the tongue. Let's hit our daily. We gotta it gives some rain. Food is candy. They don't reflect the views of robinhood family informational. Just so recommend commit any security is not a research report or investment advice. NATTA uproar sale of a security digestible business news video experiment financial. LLC member FINRA SLASH SIPC or first-week Ebay just sold off stub hub for cool four. A billion dollars not a bad day got acquired by via Gogo. Nick not to be confused. With Lavar Longo Gogo wireless or Tra vago. We actually dug into this deeper via Gogo via travel. Speak means layover. I'm going to New York via Cleveland and Joe Means no laver like direct Iraq. Now we tend to use ticketmaster stub up here in the US. If you're in Europe you're going to buy the tickets to the A C Milan match. Probably over via Gogo. The one thing that unites them all is you're paying gigantic ticket delivery fees that they only tell you about right at the end when you finish paying. So it's going to be twelve dollars extra because I downloaded this. That makes absolutely absolutely not no. Why only via Gogo the company? That's acquiring stubhub from Ebay. It's co-founder also co-founded stub Bob. While he was in business school. No Joke Let. Let's get the step-up co-founder was the CO founder via Gogo makes no sense it kind of messes with your mind. Here's the shocking stat of this story. Though Ebay Ebay got a thirteen x return. That means it paid three hundred and ten million dollars back in two thousand seven to acquire stubhub and now it selling selling it for four billion thirteen times as much the sexiest part of Ebay. That was probably step up because the company only made up eleven percent of revenues. But it was stub which you probably hung out with with more than Ebay now. Let's give this some context. Ebay has fallen way behind in ECOMMERCE from like twenty five years ago when my mom was listing instead of a garage judge Dale and Ebay Sale. Now Jack and I have a board we need to have up at our at our snacks dudes here. It's the nonstop ECOMMERCE rankings of. What's going on in the land of ECOMMERCE Amerson? Here's who he's got on top right now number one. You've probably heard of its Amazon. Who has forty seven percent of America's e-commerce market? Then if you go down a little further to see who number two is you're going to have to drop really far because the number two is really far behind six point. One percent is number two in that's Ebay but but it's almost getting passed by Walmart and apple which are like really really close behind in ECOMMERCE ranking. Maybe now that Ebay has got rid of stub hub. It can focus on its core business e commerce commerce. So Jack what's the takeaway for buddies who just got four billion dollars in cash over it Ebay. ebay is basically dropping off stub hub at college shedding tears and saying goodbye. uh-huh step up was like living at home. Not doing that. Much kind of like asking mom to make it cereal every morning. Sales barely rose last year as it kind of did nothing whether it's and that is unacceptable acceptable because stubhub has a duopoly. There's only two companies in the online tickets world it's ticketmaster stubhub and yes khloe. stubhub sales barely rose from last year. That's not stub hub needed to be free needed to live life and needed to be independent. needs to figure itself out. We've seen before before that leading a young growing company go free can result in boosting sales and more profitability. Even if you look at ebays old companies great case as example here two thousand and two Ebay buys a little company called Pai Pao and then ends up spinning it off. In two thousand fifteen pay pal is a separate publicly traded company he now has tripled in size since that. SPINOFF in two thousand fifteen. It's gone from forty billion dollars to now worth one hundred twenty billion dollars since Ebay dropped off a college and but pay pal do its own thing. That's exactly what could happen with stubhub. Once it gets independent it can focus on itself focus on growth invest and blossom us us like you blossom by taking that creative nonfiction writing class. Sophomore year. That totally. Change Your Life. This is Jack. I own stock of Amazon Four. Our Second Story Charles. Schwab just acquired not D. Ameritrade for twenty six billion dollars. One of the most rumored deals I've ever experienced as a host of snacks. Daily turned out the rooms. True jacket reacting to sit down because this was giving straight up Lancaster vibes. The strategy of Charles Schwab was brilliant. And it's akin to game of thrones house. Lancaster this is a game of thrones owns. Kill seeing if there were going to be like a season twelve or whatever we were on at that point I lost track. This would be episode. One ending. Finale freaking out spoiler no dragons begins in this story but quick historic context Charles Schwab. Yes created the discount brokerage concept in one thousand nine hundred ninety five when the typical stock trade caused forty forty nine dollars. That's just the fee to buy or sell a stock now. There's like all this competition you got E. Trade you got td Ameritrade you've also got robinhood which disclosure owns owns this podcast snacks daily. Yes Robin Hood brought the First Zero Commission trade. We saw now when it comes to Schwab Charles Schwab noticed. There was an Achilles heel. Jio that all his rivals tended to have Josh Schwab's rivals were more dependent on trading revenue than Charles. Schwab was so over this last year. Charles Schwab trading commissions nations. Like the money it makes when you place a trade on Charles Schwab and have to pay them a commission that was seven percent of their business. That's IT for E. Trade. It was sixteen percent of their business a bigger bigger than Charles Schwab and for. Td Ameritrade it was like thirty two percent of their business so commissions were a big thing for td Ameritrade so then Charles Schwab sees that its competitors are more reliance on trade commissions than it is so it makes a pretty epic move it weakened. Everybody's like showing up some castle and game of thrones poisoning. Everyone drinks including your own. And then everyone takes a sip trusting you because you're drinking the wine to everybody drank a little bit of the poison. That Charles Schwab poured into everybody's glasses including Charles Schwab and it's a brilliant strategy. That poisoned wine was actually when Charles Schwab eliminated trading commissions agents and drop them to zero dollars itself. Charles Schwab finally matched Robin Hood and gave customers the opportunity to buy and sell stocks without paying any fee as a result its core arrivals E. Trade and TD Ameritrade. They had to drop their commissions two zero dollars to just a month ago. Now here's what happened. All of these retail retail brokerages are just losing one of their revenue sources so Charles Schwab stock fell fifteen percent but td Ameritrade stock fell double that because the hit was twice. He says painful all right so now Charles Schwab has got td ameritrade on its knees. It's incredibly weak. But it's so weak that even a weakened Charles Schwab could finally ended end it. And that's what Charles Schwab did yesterday it bent. Td Ameritrade over the executioner's block. It brought out a massive sword. Acquired it for for twenty six billion dollars so Charles Schwab gets his twelve million. Td Ameritrade customer accounts which are worth five billion dollars in annual revenue. And here's the the best part those annual revenues from the TD ameritrade counts. It's more than enough to compensate for the loss. Trading Commissions Cinta cut trading commissions two zero era as a result. Charles Schwab stock is now up eighteen percent since it actually cut commissions just a month ago. So Wall Street freaked out when Charles Schwab cut one of its revenue sources but now the stock is even Higher Wall Street is. We're turning this. Brilliant Lancaster Situation Forget consulting insulting firms on the board this entire time. So Jack what's the takeaway for our buddies over Charles Schwab. There's only one word you need to know about this. Acquisition Acquisition Synergies Sanur. Geez it's a scary word was mentioned seven times in this press. Release about the whole deal in the press release. Charles Schwab bragged that they're going to eliminate nate overlapping in duplicate of roles at the two companies. That's what synergies basically due to some degree every acquisition has synergies and. This is why they're pretty important when you can do things better together and prophet more efficiently as one company instead of two synergies about making revenue or cutting costs like you don't need to accounting in departments you can have just one or you don't need to holiday parties you have just one either way you profit more together. It's a one. Plus one equals three situation situation for our third and final story. Uber just got punished for its misdeeds in London and now it's losing its license to operate in London again again. This is a big deal by the way because London is number four global market for Uber Three cities in front of London or New York. Yes Angela Angeles they area which not a city just an area well. That's why shares of Uber dropped six percent yesterday's because this is kind of a big deal. Here's the deal. Historically taxes have been regulated in the city of law. If you have taken around the London taxi first of all. They're huge. You could hang out with like six people in there. It's like like a Disney ride. I did downward dog and childs pose last time. It took a London taxi. Next time. Jack London and Agra were doing this pot from a London taxi so when Uber came along started disrupting the historically hilarious looking London. Taxicabs the city of London. Like sure Uber. You can operate but you have to follow the the rules now Jack. What was the claim that the city of London is now making against this? Said Uber has a pattern of failures and has put drivers and riders riders at risk of danger and the city of London was specific. Here's what they did nick. They knew they weren't authorized to drive uber and they were driving. There Uber Accounts. So they uploaded the profile pic. So that when you pick up your buddy at westminister yard or whatever. You wouldn't be surprised by the face of the driver you like. Hey Devon is that you the like no. It's not me it's toby I mean. Yeah it's Devon umbrella here that's may get in get in. We're GONNA have a great time so the result of this false identity scheme that's going on in London. For Uber Drivers it resulted in fourteen thousand rides happening with an unauthorized driver. And therefore no proper insurance for the ride God. Some of these even happened with band drivers so like London's acknowledged that Uber is trying but the mistakes continue to happen throughout London's announcement announcement. They kept on playing this safety first card. They said the decision is about safety of drivers and safety rights injures the Os word but uber's response on shocking talking. They said this was both extraordinary and wrong. which extraordinary is kind of a positive word but wrong definitely a network? Yeah so uber. Classic Uber is appealing this ruling thing and they will continue to operate in London while the appeal is going through the courts for all the history majors out there. Yes this is the same exact thing that happened. The last time buber got bandon which was about two years ago. The truth is it's very hard to actually ban something because I peels and lawyers delay the process for like two or three years. It's Sir also hard to ban something when it's got three point five million paying customers and forty five thousand a licensed drivers making the whole thing happen and all of those Uber's in London they're gonNA McKee. boob roaring. Law goes through the Appeals Court. So Jack what's the takeaway for our buddies over dubers- number one threat is public policy. And the best way to combat that threat threat is to have a good brand snappers. You've been following Uber Stack with us since it went public and you know that investors aren't quite sure about what the future of Oubre is now. That's a problem. The bigger problem politicians are unsure about Uber. They don't like it they just straight up. Don't like it. There's no question about that among politicians and that's why brand is so important because right now uber's brand it's kind of innovation situation it's gotta villain role and so new. Laws and Regulations Aka public policy policy are the biggest threat to Uber. Politicians love bashing newborn speeches and a more positive Branca change that Jack. Can you whip up the takeaways force over there. Ebay is selling stub hub for four billion dollars to a Swiss based competitor and stuff is probably worth more away from ebays network and grow and thrive and all those fun. Charles Schwab saw that its competitors needed trading commissions more than it needed trading commissions so portable poisoned for td Ameritrade and itself and then about the company for for twenty six billion brilliant. Maquiavelian game of thrones move third and final story. Uber is losing its license to operate in London again. And it's appealing feeling the deal but a better brand could have helped the situation now. snacker time for a snack today this once in a longtime snacker Amelia Garland from from the UK raised in Westport Connecticut Westport Connecticut home of Staples High School. I love this knack fact. If you're in eastport Connecticut it just back up. You've got a little too far west ports. A little further west tired snacker before Kale became like something you on a parody t shirt and we're obsessively passively eating bathing. It can use it as a sponge half the time right. It's Pizza Hut Pizza. Hut has been a Kale supporter through and through. It was the top buyer of Kale before became crazy in two thousand twelve. By the way in case you're wondering how they use it not on the pies was actually just like a garnish on the side to make the To make the salad bars. Rich and intense pizza hut hasn't verified that fact but I can say from personal experience. The Pizza Buffet was decked out in a bed of Kale they had no idea what interesting on snappers we loved. Having you with us tomorrow is our last snacks daily podcast before knickknacks. I'll take a little bit of time off. It's not that much we're taking like two days off. I'm going to be in New York City at home. Jack's going to be up north in Vermont. We hope you guys are going to have a fantastic thanksgiving but we got one more snacks for this week. Yes tomorrow part. Two of our live event at spotify. You're GONNA WANNA tune in snack. We're GONNA miss. You can't wait to catch tomorrow. Them talk to them. The Robin Hood. Snacks podcast you just heard reflects the the opinions of only the hosts who are associated persons of Robinhood Financial Llc and does not reflect the views of robinhood markets inc or any of its subsidiaries or affiliates. It's the podcast is for informational purposes. Only is not intended to serve as a recommendation to buy or sell any security and is not an offer or sale of a security. The podcast is also not a research report and is not intended to serve as the basis of any investment decision robinhood financial l._l._C.. Member Finra S._I._P._C..
#59 Data Science R&D at TD Ameritrade
"This week. I'll be speaking with Sean law about data science, research and development at TD Ameritrade. Shaun's work on the exploration team uses cutting edge theories in tools to build proofs of concept at TD Ameritrade. They think about a wide array of questions from conversational agents that can help customers quickly get information that they need and going beyond chat bots as well as using modern time series analysis and more advanced techniques like recurrent, your networks to predict the next time a customer coal, and what they might be calling for as well as helping investors leverage alternative data sets and make more informed decisions. And what does this proof of concept work on the edge of data signs? Look like at TD Ameritrade and how does it differ from building? Prototypes and products and also how does expiration differ from production? Stick around to find out. Welcome to data framed. The weekly data can't podcast exploring what data science looks like on the ground for working data. Scientists and what problems are consult. I'm your host, Hugo bound Anderson. You can follow data camp on Twitter that day. The camp and may add Hugo bound, you can find all our episodes and show notes a data camp dot com slash community slash podcast. This is data frame. Wanted to let you know that in the show notes, you can find a form to make guest suggestions for the podcast. We welcome all suggestions. And encourage you to have as panoramic view as possible with respect to the diversity and inclusively vow guests also if you enjoy the podcast, it will be great. If you could leave us a writing and a review on I tunes, but only if you enjoy it a raid out some of our favorite reviews on the podcast. So right one chance to be quartered. Now, it's time for the show. In other news, I've managed to train an artificial intelligence to automate some of my work such is hosting this podcast. This is the very first episode, which is hosted by an AI Hugo trained on all previous episodes. And you're listening to him right now. Hi, this Sean and welcome today to framed, thanks for having me you go. It's a real pleasure to have you on the show, and I'm really excited to have you hit it to talk about kind of the research and development sides of data science, particularly as a pretends to your work at TD, Ameritrade, a financial services and brokerage. We're gonna. Get into all of that. But before that I'd like to find out a bit about what you do. But in an old such is today Ameritrade. I'm sure there are a lot of different impressions of what data signs and are indeed do an a capable of. So I'd like to start off by them. Have you tell us a bit about what your colleagues thing that you do? Yeah. So I think the a lot of times we'll know that or aware with an organization that I have some sort of scientific background research background. And so they think that I spend the majority of my times or dreaming up crazy new ideas or exploring the deepest darkest areas of research in reality while I might do some of that kind of bullying down this one sentences. I tend to ask a lot of hard questions are interesting questions. And that's usually where I start. So you ask a lot of hard questions. Do you get to answer some of them along the way as well? Hopefully, so yeah, otherwise, it wouldn't be that fun of a job. But I think what is important is to ask a lot of high questions have a good amount of skepticism. Right. And or at least a healthy dose of that to understand where people are coming from. What problems we're actually trying to really address cause sometimes when you feel back certain layers, you start to realize that may be presi either the underlying question is not well posed or the underlying problem is either extremely hard or maybe perhaps even impossible to solve now. It doesn't mean mean that we need to give up on it immediately. I think sometimes having a good amount of empathy as well as listening skills goes a long way, especially when it comes to data signs, social, I, you know, this Trump kind of the crazy research, scientists still existing in a little ways. But one thing we hit it today is day mystified that so you've actually told us a bit about what you actually do. But maybe you couldn't go into more detail about. What your job entails? I work in a essentially a research and development group the name of IT, MS exploration lab here at TD Ameritrade. We used to be called events technology by more and more. We've been focused on thinking about how different areas of research that is sometimes are unrelated to finance could be applied in the finance sector. And then thinking through maybe what new experiences customers might have. I think one thing to clarify a lot of times when people hear that I'm in finance. They will immediately asked me to provide advice on financial markets or investment advice. I'm not a financial investor. It's funny that you mentioned that goes ATS went down into similar. I was wondering if you could tell me a bit about. I'm just kidding, so. Yeah, going probably the last person that you want to be asking for financial advice, probably not as qualified as as many others are, but at the same time, I think that also provides a unique perspective where I'm sort of a unencumbered by some of that history. And I might bring a fresh perspective to things and so being able to look out for again. Those new experiences for a customer is very important. And while that might come in the form of providing some advanced analytic methods to our active traders or maybe to provide a more personalized experience for retail customers or even just as simply improve the process efficiencies for institutional side of the business, which is our visors. There's really a lot of great opportunity, especially in terms of how we can leverage technologies with focus for us is leveraging technology, but nowadays loving technology. Sometimes isn't efficient, and that's where sort of the data's side of things come into play. And so what's the trade off there? Let's say the balanced between like doing research talking with relevant stakeholders about the business problems sitting down and just thinking the act of discovery and all of these things that's a great question. I think initially, you know, as I transitioned away from academia into industry, I thought to myself that you know, if I I'm a hard worker, right? If I put my head down and sort of turn out work ninety percent of the time. It's been ten percent of my time building relationships and attending meetings, and then I'll do great, but very very quickly having been an industry for me, three months. Six months time. I quickly realized that that's not sufficient really, it's a juggling act. Well, you have to spend the time effectively not only to your point of doing some of the research doing some experimentation. I'm managing the relationships and spending a lot of the time actually understanding what is being asked from our business stakeholders and being able to. Even read between the lines do your due-diligence before even writing a single line of code or even thinking about how to solve the problem you have to really truly identify. What problem is that? We're even trying to solve an is there a problem at all? Maybe some of it is sometimes when you ask somebody, what are your pain points? People will tell you what's top of mind in reality for our team. What we really wanted to do is think about problems or new opportunities that are that sort of span across the entire industry. If TD Ameritrade is the first one to to solve that problem or begin shaving off some parts of that sort of a huge win for us. And we're doing exploration my team. We're not doing production right way, really on the research side of things, and we might build out some initial poofs concepts to prove out a potential of either technology, or in the data science case, a certain methodology that might be applicable, but we're far away from production. Typically interesting and something you spoke to in there. I think. Is you know, when people have a problem will have a problem. It's actually a question whether data science and analytics is the correct way to answer it as well. Right. Absolutely. And that's where it touched by the beginning of having a healthy dose of skepticism. Right. Not necessarily negative way. But to make sure that people are bringing, you know, the right problems to the table again for our team the team that I work on right is actually composed of a very diverse set of people. So I am one of maybe two data scientists on the team where a team about maybe twelve twelve or so is as reflects over over time, but the rest of my team have a skill such as you X user experience design, we have somebody with cyber security in the past front end back end mobile, a RV VR AI, you kind of name it architecture. We've got somebody who has some level of expertise or considerable amount of experience in all those fields. And that makes it a very collaborative environment for our teams exploring. That's really cool. How big is the team? So about twelve or so people that's a really nice size with those types of skills since it does so own ask you about a challenge. Such teams can present part of my background is working in a cell biology lab in biophysics and thinking about silk roads, still division that these subsidies. We had physicists chemists biologists mathematicians such as myself or working together collaborating on so biological questions. Which means that you get a lot of different points of view, in essence, a lot of different types of creativity in a knowledge, everyone brings them up to the table. But a problem with that is that sometimes you not having the same conversation. Absolutely. That maybe that's the the benefit of having myself come from an academic setting where we had a, you know, I worked in large lab of twenty five plus post office in grad students and experimental researchers at the university of Michigan here and many of them to your point were either coming from physics engineering computer science mathematics about chemistries. That's my actually my background. Doing this computational chemistry type work and being able to understand the different viewpoints and understand what people bring to the table in itself is a very important thing. And having spent a good amount of time, they're realizing that there's no way even as a scientist or let alone a data scientists that you can know at all I think once you can set aside your eagle and realize that that the synergy that can be had with your collaborators can do amazing things. And I think that that's what, you know, having experienced that in the past when as we're building out our team here at TD Ameritrade. I think that's something that we very consciously keep at the top of mine and that we're not hiring the same people over and over again. In fact, my biggest thing is I'm not interested in hiring another Sean, right? What's important is that we have that diversity of experiences and thinking that really helps push the boundaries of what our team can look at for. Sure, I'm not sure I could handle another Hugo data champion. In all honesty. So you actually hiring at the moment right now, we're not, but we're always have openings up and coming in the future. But we also do have a data science team within the company here that also sits here in the office with us, and we're actively looking I'm also part of sort of enterprise wide initiative, which is an AI council. So I serve as a an advisory member of the internal council where we're looking at. How might we apply? It assigns an aspects of official diligence namely deep learning methods to help solve some real problems within the company and for those types of initiatives. I think that we're obviously going to be expanding into that realm. Even more over the next months. And so I'm sure that adding new team members will be a priority. So we'll put a linked to the you'll careers page in the show notes in any other resources that may help people who are interested in of the conversation. Like this great you smoke a bit to your background in scientific research in a lab. I'd love to know just a bit more about your background. And how. Got into data science originally. Yeah. Through maybe going a little bit further back when I was growing up I was actually coming from an Asian family. I thought that it would do me. Well, did venture down a path of becoming a physician and that never really panned out. I went to school for actually was a biology major with the with an emphasis on biochemistry, but I was actually doing that being very data driven. If you will in that, I chose that major because that was the major that had the highest probability of being accepted into a medical school in Canada. But that didn't pan out, but in school growing up, I was always very very good at math. So while doing biology, I actually did a minor in applied mathematics, and I spent a good amount of time doing research some research in computational field or in geometry field where I was exploring protein flexibility, and how that has fix on how proteins bind are different types of liggins and. And once my undergraduate career was coming to a close thinking about what was the next step in? It was recommended to me that I'm hey, maybe you should consider graduate school. And now it's up until that point something that had never considered and but looking into it. It was really a fantastic over opportunity. So I know that you had several I guess past data framed podcast guests such as Sebastian Rasha. Randy Olson who all I went to school at Michigan state. And that's right. That's actually why I went, and maybe a side note is that a Sebastian actually is sort of came after the my time there, I overlapped at the time that the that Randy was at Michigan state too. But it's the Bashan actually worked in a lab that I also rotated in as well. So we have a lot in common tool. And of course, you'll still and Sebastian and Randy roll like Strom members of the pie data community as well. Which is really cool. Yeah. Yeah. Maybe that's definitely that. That's important to us as well. So I I one of the coal. Organizers along with Ben Zayed Linden, Patricia. She choose to here in the community. And we run the high data and Arbor a monthly meet up. It's hosted here in the TD Ameritrade office. And we really spent a lot of time thinking about what the science means. And what value we can bring to the local data signs seen as well. As to some extent the startup scene. In fact, last month, our speaker is a senior legal counsel, and here TD Ameritrade who was invited to give a talk, and she talked about a topic that was titled privacy is isn't dead, which I thought was fascinating. And something that data. Scientists is important for all of us think about it's not so much of a, you know, necessarily putting your head down and crunching the numbers, right? There are people behind the data. Right. And it's important for us to all always consider the privacy aspect, but most Oliva talks are recorded in posted on YouTube. So I invite everybody to go check him out willing to them in the show notes as well. So grad school what happened after grad school during grad school. I did a lot of competition. Work. So I worked strictly in a dry lab. So did computer simulations of like protein DNA interactions some of the largest simulations of its time. Genomic stuff. Right. Right. Right. I think there's some overlap with some of your Michelle Lynn Gila as well. Who did some MDC simulations and? And. Let me if I'm wrong about molecular dynamics is simulating stuff on a really short timescale, but all the interactions, and you need a lot of computing power to do this right absolately. So I feel like a curmudgeon these days, right? Because when when when I was doing computer simulations, which is realistically not that long ago. We were using CPU's right in parallel computing on computers, and it probably took me about six months to year to produce several hundreds of nanoseconds or microseconds simulations, then we're talking about simulation time steps of PICO seconds here. And then now with the, you know, the growth of an usage of GP us people are basically reproducing simulations that Iran, right? But within weeks if not days, so people are maybe spoiled is it an exaggeration. But definitely not. I do have this vision of you being like back in my day. We never had GP us way. Did went got by with block. You know? Right. I love it. Right. So yeah. Grad school, molecular dynamics, then what happened. And so I. That's when I'm booth from Michigan state to the university of Michigan to become a post, doc. So as also in a very similar competition lab in this case of his doing simulations of protein protein, interactions protein are a and what sort of called core screen simulations where you can think about different scales of dynamics. So usually at the at Tom mystic level. You're looking at Adam to 'em at interactions. But would you are able to skill out using a more coarser grain type of model than you're looking at larger enlarge dynamics and being able to study that's always looking at so binding of proteins that might affect transcription? And so during that journey during essentially my entire PHD in post career, I think what people refer to as data science today. I was just referring to to doing science out of necessity arise. So things like applying. She analysis or k means clustering to look at what protein structures look very similar to each other. What are some of those dynamics people you call it machine learning these days? Around my colleagues. It was just a necessity again. Sure. Sure. And so then you transition from academia to industry, right? Yeah. I think a large part of that. I think may perhaps even some something that is not often talked about especially when moving from industry into from academia into industry, right or you in staying in. Academia is what happens when when you start growing up and becoming an adult and need to raise children nothing. It was precisely at the moment that I had a child that. I thought started thinking what is life mean? Right. Has it maybe perhaps existence you'll crisis? But in surpassing about whether or not I want to stay in academia, and also the what was a very competitive environment. In the academic Senate that that I was in start thinking about well, what would it mean to move into industry right into open also open up the options, especially with a funding scientific funding being very very challenging in also realizing too that maybe for the rest of my life. I'm not actually doing science and that probably end up either, you know, teach. Ching which I do enjoy. But also spending majoria my time reading papers and just writing grants and not actually doing fundamental research. I was a little bit depressing for me. And so I was very lucky a post that I had worked with who is now a faculty of the university of Michigan. Doctor Erin Frank who is a close collaborator. He worked with me. And he kind of asked me the question of did you ever consider data signs, and this was back in two thousand fourteen and up until that stage. I actually had never even heard of the phrase before. Right. Even with the digital sort of popularizing that term again data signs, and as I looked into some of the job postings that were out there. And I just kind of thought to myself like I feel like I have ninety percent of these skills that people are looking for in the other ten percent. I would be absolutely interested in learning more about and having so that curiosity, and so that's what I made the change and transition over to industry start looking for jobs out there. We'll jump right back into an interview with Sean law after a short segment. So I'm Becky with Emily Robinson data scientists on the growth team data camp to talk about her guidelines online experiments testing. Hey, Emily, we've done a bunch of segments on your super interesting guidelines for online experiments, and this is going to be a final one for the time. Being I thought maybe you could just give us a rundown again into what online experiments in AB testing actually is. So that goes an online experiment is to measure the impact that a change you make to your site has how you do. This is you randomly assigned visitors to your website into either the control, which is the old version of your website or to your new version, which called the treatment group. You know, you have this running or buckling visitors this way for maybe a week or two weeks. And then at the end, you compare the behavior of these two groups, for example, maybe you checked it. There was a registration rate greater in the treatment for the control. How about the conversion rate the subscription rate, etc. And. Then if you ply the appropriate statistical tests, a new find say, there's a significant difference. You can be pretty confident that difference is because of the change that you made sense by randomly assigning people and running the control in treatment over the same time period that should be the only difference between the two groups this before. There are many ways that AB testing can go wrong, but most of them won't be obvious. And you're writing out these guidelines was away of dealing with a lot of these issues. So hit a twin about your final guideline today, which is to focus on smaller incremental tests that change one thing at a time. Could you give us kind of an example of this? And why it's important. Sure. So one example is that is given by dammit can Lee who is a former principal engineer at sea. And he gave a presentation on continuous experimentation. So his team spent weeks working on a naval Ling, infinite scroll for the SE search paid. So if you just kept scrolling more items with keep popping up, but when they ran the tests they found actually performed worse in terms of conversion and the first reaction was it must be a bug. But they found some in the results still remain the same. And the problem here is that when you have this really big change, it's hard to figure out why it didn't work. So in this case actually went back and started testing some. Options behind their release that infinite scroll would be better one of these assumptions is are more items, actually better. But when they change just the number of items on the search page, they found that while there were more clips it had the same number of purchases. Another question is are faster results better? And it's hard to speed up appearance. But it's pretty easy to artificially slow it down. So they tried slowing down a little bit and found it didn't really hurt anything if they checked these assumptions, I they would not have invested these weeks of development effort into infinite scroll until they learn from these mistakes, and instead focused on making smaller cycles of design developed a measure with a test and having those add up to a big change. Do we? We just recently on the point Goss, which is to have, you know, a lot of stakeholders involved in all steps of the process like we talked about having a data. Scientists say analysts involved from the very start and the principles of design and needing all those inputs their data. Scientists also might have been able to say so this was a case of a really one really big change. Another tempting thing is to bundle a bunch of smaller changes so say, you know, doing Mahendra of your search page, but also the layout and how the filters work and saying like, oh, I just want to try this really beautifully new redesigned page. It's definitely gonna work. And then when it doesn't it's really hard to figure out why. Because was it just one part that failed was at the interaction of the changes. And you know, a data scientist, maybe give you some signal, but they're not really able to split that apart speaks to another maximum of us, which is keep it simple. Right. Simple. Cool. So that's what I said. This is the last segment for the time being on you'll guidelines AB testing listeners. If you find this stuff interesting and stimulating and something you could Inc. To your own practice. A definitely suggest you check out an episode from Las season of data friend, which is a conversation you'd Lucas for Mia who runs online experimentation booking dot com. And Emily, you actually initially introduced me to Lucas back in the day, which is great. Says great. Yeah. Booking is like one of the biggest companies running online experiments at scale, and they have just hundreds and thousands running at at all times if a huge experimentation tomb. So they're definitely experiment goals. And also, we've got some courses on on testing and online experiments data camp. So check those out as well. But Emily, I just wanted to say thank you so much for joining me once again for such a bunch of wonderful segments. I really enjoy doing them with you. After that interlude time to jump back into our chat with Sean. Great. So I want to pivot now to talk about your worker, TD Ameritrade. But before we do that I'd like to speak more generally about data signs in these types of organizations. I'm wondering what aspects of financial services and brokerage TD Ameritrade. You think data signs can have the largest impact on. I think the biggest area of opportunity for us. Right is personalization and also too in that same regard is looking at how do we take the large amounts of data that is out there? Right. And to help boil it down to essential information that is pertinent to individual investors. Whether it'd be for our long-term investors, or even for our active traders, obviously, these problems are these these types of problems are on different times skills. Right. Where our long-term investors might be looking at things that are over months. Maybe even years are active traders could be looking at things at at these minutes, two hours to today's time scale. And so when it comes without personalization, we get into the realm of things like. Condition systems so allies net flicks and other folks. And so we've been definitely exploring some of that. But even earlier when I started my tenure here we were thinking about things law along the lines of even looking at natural language generation and even natural language understandings a lot of NLP type work understanding when customers call us. What are they calling us about and being able to take even phone calls and trying to predict what people might be calling us about brunt? And so in that guys between conversation with William of some soon. Right. Yeah. And that's also interesting too. Right. So conversation can happen. Whether it'd be on on a phone call, but it can also occur on Souso chat platform. Whether so for customers, your TD Ameritrade, we have something called Ted, which is basically on online chat agent. But we've also built on here to the Ameritrade a Facebook chat Bod as well. As a Twitter bought as well that are. Customers can interact with and a lot of that. Initial work was started off on the exploration live team. That's really interesting and it reminded me two of my collaborators Jacqueline and hither Knowle's who a data scientist in machine learning engineer t mobile, respectively, I might get this flatly wrong. But the message is the same. They're working on conversation with software and machine learning, a T mobile among other things, and there was a simple problem that people would come and try to mug in and have a conversation with an agent, but answer a few questions beforehand, the person the customer would initially say, hey, there's a problem with my Bill and follow up. Question would be are you a customer because it's the first question sauce. And of course, from the initial statement. It's clear that they are a customer, so even solving small challenges like this are incredibly helpful right? Yeah. NLP is an extremely extremely hard problem. Right. And that's why we have tons and tons of academic researchers that have been looking at this for decades and. It definitely poses a problem for us to being able to understand the question that's being asked. But also being able to manage the context of that question as it relates to not only the current conversation. But also as it relates back to the customer's journey, you know, at TD Ameritrade, I think the holy grail for any sort of conversational agent is to be able to tie together all of the touch points that a customer has had with us and be able to know exactly what you want without even having to tell us, right? That would be a bright day for humanity in general. I I always joke. It's not a junk intellectually that NLP must be hot. If we still use regular expressions. Yeah. Now, you have two problems. Right. Exactly. So tell me a bit more about I suppose, the the brokerage aspects all the financial aspects, I presume, you're probably deeply interested in in thinking about time series analysis and prediction and his toughest though, it depends. I think on our team I personally have explored a a proof of concept looking at trying to spot patterns within a time series. And it's one might think that it might be for predicting the financial market. But in fact, it's internally for us has varying in general applications to look at finding patterns of let's say our server outages or our server resilient and being able to that. Hey prior to X Y prior to some strange event, we noticed that the memory usage was very very high being able to see that certain number of cores. Maybe we're down Ryan spotting those patterns ahead of time and finding early indicators that will allow us to become even more resilient. It's just so that at the end of the day, we're better able to serve customers. Other alternatives. There is about location would be to look at even for our customers themselves. Right. What is their pattern of usage of our of our platform and being able to identify more? Clearly that are there certain steps that people take before they reached the next milestone of their investment journey. But again what we built here in. Hopefully, we'll be able to talk more about this in the future. But we at some research that was actually conducted at UC riverside by professor out there that looked at taking a time series and being a fairly long time series in being able to spot from it patterns, and that itself is a very very tough problem because if you can imagine times years with ten thousand eight points, one hundred thousand data points, and without you telling you what patterned to look for ten you slide a window across at times and each window. Can you tell me what is the top k or top end closest matches to that? And if you think about it, that's sort of like a in itself an N squared calculation depending on. How many windows you have? And so becomes computational intractable very very quickly. But this research that was conducted there was able to show that using it sort of a smarter method smarter algorithm that you can actually get these exact matches and do something with it. And so we leverage some of that. And we currently have a patent. That's filed to apply some of that technology by this time. We're at TD Ameritrade. We're working to open source some of the underlying code allow the data science community to start applying some of this time two years work as well. As the examples. It speaks to I think a huge part of your work, which has been a through line here. But we haven't must wasn't necessarily explicitly stated in that. You know, you think about particular questions problems in Joneses? But you want to drool results from research and work from old types of different industries and different disciplines. Right. Yeah. And I think that's where again, my background comes into play in it and also having pretty stereotypical data signs characteristic, right? Which is curiosity. Everybody talks about. But in addition to that what I tend to do is try to find very niche methodologies that people are looking at. But also going back to what I was saying earlier about listening. I think time and time again, I when I listen to people's problems in the problems that they're trying to solve. I started realizing that there's an underlying theme across all of them. And in one case, it is or in this particular case, it is a trying to find patterns in the time series, right without expert, human, knowledge or domain expertise, necessarily, right? And it isn't necessarily to do all the work for you. But at least makes it easier for the human to direct their attention towards us certain patterns. And so I think that's one thing that on this team. We we try to do a lot of which is to hear what people are saying. And then trying to connect the dots. And then also keeping an eye out for new and emerging methodologies technologies that are coming out. But at the same breath, I would say that sometimes it's not even a lot of new things. Right. If you think about something like people are. Or neural networks. Those things I've been around for decades. And so they are now somebody has put it's a newly interesting. I think there's something that Hilary Mason has said in the past to some also recall when I speak to view work is thinking about providing customers with alternative data sets. Yeah. That says something that's very very interesting. Right. I think that as for investors. They're always looking for some sort of edge, or maybe some inside scoop. Right. But the end of the day, it's it's data that will help drive your decision. Making more information right information by proxy to really what you're getting his date out. Right. And so thinking about not only are we reading news, right? Are we reading opinion pieces or we're looking at how they prices are are doing for certain securities. But also thinking about are there alternative data sets that might be indicative, right? And again, this is to say that, you know, past performance can help you predict the future. But at the end of the day, it is how do we as a company help provide our customer with the? The best experience and that involves providing potentially alternative data sets. And as a research team, some of the things that we do is think about our consider what some of those alternative data sets might look like. So maybe you can't speak to real examples. Just I pay reasons by this hypothetical example. Yeah, definitely. And maybe this gives you a glimpse into house or my brain in my thought process works, please that's into the Brian of Sean. So maybe a couple of years ago. I was literally driving to work, and it was listening to NPR out of out of most things. I usually don't listen to music, but NPR was talking about how I think it was at NASA. They were releasing a brand new data set to the community. And this is satellite imagery that allowed you to look at a pollution levels across the globe. And then that got me thinking, hey, I wonder if we can leverage this open data set. So this was called at NASA aura satellite data set. And so it's mapping Hirose. Images of air quality because if you can think about it as an investor I might be invested in some sort of commodity, so whether it's it's either maybe soybeans or orange crop yield. And so if you're in a polluted area or have are in area of high pollution that could affect your potential yield in the future. And so we can marry a data such as this type of image data, and we can obviously leverage things like confrontational. Neural networks, which is enveloped these days along with some historical data about these commodities, and perhaps be able to provide a more holistic view of how the commodity might perform in the future. I really liked that explanation. Appreciate it. Because it goes all the way from, you know, starting the the question will problem challenge thinking about what type of technology and data that's been collected is appropriate there. And also, you know, the kind of state of the art techniques. So that would that's really cool, Sean. Trump brought back into the conversation. We've shown law after a short segment. Now, it's time for a segment cold died. Assigns best practices. I'm here. With Ben Scranton, an independent data science consultant high. They've been high Hugo thanks for having me back today. I am excited to wrap up our running discussion of unit testing in debugging practices at least for a little while. So I've been what's on today's agenda. Can you know, there is an art to debugging you may there's more than just unit testing and using a debugging? Yes. Those are the place to start hopefully unit testing helps to verify code and ensure that old bugs remain fixed. As an aside when you solve a, bud. You should always create a unit test which verifies that the bug has been solved today. I want to discuss how you should approach debugging. Having a good debugging strategy can help you catch bugs, which otherwise could be quite difficult. This is particularly important with distributed. Applications I really learned the importance of this when I was writing a large. Scale simulation for my dissertation? So what is the author of debugging to me? It is a collection of questions. I asked to get in the right mindset for hunting bugs, plus some techniques and tools to use if your unit tests fails, and it's simple pass through the bugger fails to solve the problem. Then you have a more complex bug. For example. You could have a situation where multiple threads access a shared resource incorrectly. And corrupted step one is remain calm. If you're anxious about finding the bug. It will be harder to think critically about causes often. You must think outside the box because something you think is true is not guy. So what comes off the remembering to brave next did the system used to work if so some change broke it, hopefully, your code is under version control. Then at least you can search through the various commits to find the one that broke it in general, you should modify your code in a scientific way. I e change one thing verify it works. Then changed the next and verify it works and so on so essentially, they would try to fund the exact change that created the bug right? Any other techniques? Another great tool is to explain how the code works to the rubber duck on your monitor. This is better than explaining it to a collie because often when you start explaining the code. You will have that Eureka moment and need to rush to the editor your rubber duck won't mind if you break off and do this mid sentence in a similar vein. It is helpful to diagram the system. What are the stages in your pipeline? What are the inputs outputs at each stage? Did you leave out a data cleaning step forget to handle outliers or Rescale your data to get the correct magnitude for out putting results? Those are all great tips been anything else. Spring to mind, another classic technique is divide and conquer take a big complex problem and keep breaking it into smaller components until you can understand it. This is especially helpful if the bog is in a library or vendor application. Keep hacking out coat until you have the simplest possible case to reproduce the Bob. This will make it much easier to identify the source problem and get help obviously do this in a branch. And what if none of this works if all of this failed? I like to list all possible causes of Abud. No matter how crazy then I check each case if none of them are the cause than at this point. I must think deeply unquestioned assumptions something I think is true clearly isn't any final tube spin a last tip. It is often helpful to add logging to assist them. Instead of printing diagnostics, logging is how you capture Runtime information like the black box on an aircraft a good logging module allows you to adjust the amount of information and control how and where it is log this is especially important in distributed systems where it is difficult to do bug across threads nodes here, logging the right information and keeping the system. Interfaces simple is crucial in python, the logging module is a great place to start. Thank. Spin for joining me once again and discussing the art of debugging, you'll code thanks again for the chance to share some hard won wisdom with the data framed community. In other news, we played in April Fool's day joke earlier as this episode came out on April first, I'm not really an eye on just plain old Hugo now back to our regularly scheduled programing. Time to get straight back into our chat with Sean. Would like to do. Now is we've talked about the types of questions an impact data sons can have in TD Ameritrade. I want to know more about our day. The fact that you don't necessarily build scalable infrastructure end of the line products. But you build proofs of concept rather than than actual products. Wondering what a proof of concept looks like. And what's the distinction between them and prototypes and products? Yeah. That's a great question. So the way that we view sort of this this pipeline, right? Is that product is something that tends to be put into the hands of some end customer. Now that customer could be anybody right there could be an external customer, but it can also be some unintentional associated TD Ameritrade. Maybe something that will help improve our internal process something that will help customers make better investment decisions. But for us, whereas sort of the opposite end of that spectrum right at a proof of concept, and at that level, we are literally trying to prove out whether or not there is potential, and that means that tends to mean that there's a lot of. Risk involved, or at least perceived risk because there were literally standing in front of a dark cave as the analogy that I have where we're standing in front of a dark cave. We have this chintzy flashlight that we can only see ten feet in front of us. We know that there might be light at the opposite end of that tunnel. I gave but we really don't know until we start venturing in versus if you're in production. You probably are pretty sure that not only is this what the customer wants. But that you have a scalable solution. Maybe in the case of machine learning models. You have something that has relatively precision and recall, let's zoom in on. Maybe this is what you'll getting getting to. Let's zoom in on what it means to have potential mean. What's the still the rule of thumb how how does something have potential enough to go to the next phase for us? It is being able to have a reasonable internal use case that were exploring along with the underlying technology or methodology, right? And realizing that you know, this is hopefully truly a hard problem that we're trying to solve and that if we're able to. Provide a minimum viable proof of concept. So MVP in this cases for minimum viable concept than that might have enough legs to transition into what we're calling a prototype. And the way that we do this is that a proof of concept again is showing the potential that. Okay. There's something there. So maybe to give your listeners example is if I'm building a machine learning model that doesn't maybe a binary classified or some sort. And what I don't know is even where the data is to answer this problem that's part of that risk that we're taking on. So we have to explore whether the data is internal with have to collect the data. Whether the data is in some third party vendor. API that we need to connect with. And then once we bring in that data how much effort it is is it to actually get whipped into shape to be used in some data processing pipeline. And then maybe afterwards we doing some analytics on it or building a machine learning model in the in the case of this binary positive are if we're building something out of the box. Are we getting better than a coin flip? Now, we're not looking to target ninety nine percent accuracy. Because this this isn't a keg competition. Right. But what we're looking for is at least something better than fifty fifty. And then that will give us some level of confidence that there's perhaps some signal amongst that noise. And that's when we start thinking about a moving towards a prototype where if the truly the the goal here is to optimize the modern performance in that's one thing. But perhaps fifty fifty or at least sixty percent. The accuracy is enough where previously we had no process and with no process in place. Your accuracy essentially zero right? That's one way that we look at the. But of course, the joke is if you have a binary classifying, and you accuracy is less than fifty. Then you just flip predictions multiplied negative one. Exactly. So you also have a nice example involving the zone Alexa, that maybe you could tell us about on our team actually a few years ago. We were explore. During the idea of even before things like Chaipas became very, very popular. Even had TD Ameritrade. We started thinking about communication, how might a customer want to interact with us and that might be through. Let's say Amazon echo Wednesday one of our teammates here breath, Pretoria built out a one of the earlier proof of concepts where not only can you interact with the Alexa, which is the assistant on the micro. But you can log into your account and be able to query, you know, how much what is my town balance. What is this particular stock trading for or this? What is the price of this company or even pull some relevant news articles that might be relevant to you? When we started doing that we start realizing that maybe this is one form factor. But is there opportunities for us to think about maybe a headless system that is device agnostic? Everybody carries around their personal mobile devices, but not everybody necessarily owns Amazon echo or maybe people own multiple different devices such as in. The Google home assistant. And so one of our other team members start to think about well. How might we make something that is headless? And so that opens up a whole realm of research discussions, right? Because if you think about it the first thing you do if you're gonna roll your own is the other thing about well. How do I capture the audio coming from the customer assuming that they want us to and then from that audio how do we transcribe it from audio in detects? And then how do we start parsing out that audio and thinking about what is the actual intent of the customer, and that gets the rim of natural language understanding once you understand what the customer wants you have to go and retrieve relevant answers in that answer can be pretty complicated you touch on earlier about the context of the conversation, right? If somebody has already a customer and their Ardy a authenticated into our systems than that experience is completely different from somebody who is unauthenticated does the minimum viable proof of concept. Need to kind of demonstrated proof h of? These components of the pipeline. You got it. That's where we it's important to have good scope, and that it's all actually okay for you to fall out of each of these sections if things don't work or we find that. It's actually extremely extremely challenging. And now that doesn't mean that where he completely abandoned it, it might be open to further discussion, or it's something that we might even consider rolling over to a more dedicated team. And so we've definitely had a proof of concept on her team that where members have followed that proof of concept into prototyping and then also out into production where they became the tech lead on those individual teens. What types of things can the proof of concept stage miss. That's then caught in the prototypes. Nigel even light top three things. Yeah. I'd say the things would be first thing skill ability one unless the proof of concept was looking at a technology that claims to be able to provide scale ability. We try not to be bogged down by scale ability because oftentimes I can squash projects go. The second thing is in the data. Science Rome is much. Accuracy where not out of the box necessarily interested in getting the best model. But at least, you know, from a data standpoint is there enough to provide a reasonable model or maybe from a methodology standpoint if there's new methods to come out such as some new deep learning architecture are maybe even chat booths or something like that. Right will test it out and relate the goal? There is to show that the method itself works right beyond what is being published in the last one is the last thing that we try not to focus too much on initially is real world application of cars. It's Evan flow. There times of what we definitely wanna have a real use case in mind while we go out and build something. But at the same time, we also, you know, to the point of finding a time series pattern matching methodology, right? We might not necessarily have a use case in mind. The get go great. So Scott ability model accuracy in ruined applications fantastic. So we're going to wrap up in a minute. But we've kind of dived into a load of different interesting questions that that you think about how you approach chances to them. Process and a variety of techniques, you're interested in, but I'm just wondering what one of your favorite data science, techniques and methodologies is. This is a long answer. But made from the interpreted abilities standpoint, right? I've always been a big fan of a linear regression, but with like an l one norm regularization I've studied that. And use it on on occasion found out that not only provides good interpret ability, but sort of constraining, you're the coefficients that come out of it can be very very powerful. And I've seen some fantastic applications in the realm of like predicting the potential energy of of some proteins dates as well as looking at extracting background noise from videos all using this type of approach, but I think I mentioned it earlier some of the work that I've done on the times here's pattern matching has really opened up my eyes a lot and because it's a nontraditional, and I recommend that people. Look look out for that that repo or reach out to us. If you're interested in the future willing to it in the show notes as well. So did you have a phone call to action for that listens issue? Yeah. What I would say is, you know, in working in sort of data science in science for a good number of years. I think. People tend to especially in the marketing world, they tend to over glamorize, especially nowadays, a an artificial intelligence in mission learning by think it's actually very important for many of us practitioners to share data failures. And so even at our pie data meet up. We always encourage people to not only point out where you succeeded, but also where things didn't work because that's equally as valuable, and I just wish that there was when I was in grad school that there was a journal of things that didn't work that would have been helpful. I couldn't agree more. And I'd love journal of negative results. I think there is actually a journal of negative for those. But we definitely need a lot more negative results. Published particularly in biology where I came from this such a reproducibility crisis. Absolutely. I love that. So remember everyone data science, and I but you can learn techniques by working on problems step by step in from an interest. You Sean, it's been an absolute pleasure. Having you on the show. Thank you so much for having me Hugo. Thank you for joining the conversation with Sean a deep dive into how the exploration lab at TD Ameritrade thinks about and implements building proofs of concept old in the name of research and development built on a team with a wide array of skills from mathematics in biochemistry to user experience design cybersecurity Fronton back in mobile, I Ave. And I the exploration lab moves swiftly from simple hypotheses with high risk of file to tame review. And then to research fights, one example involve customer interactions through an Amazon, Alexa, which involved a vocal interface, natural language, understanding or NFL you and text to speech among many other moving parts and such a proof of concept requires proof of concept for H stem in the proverbial pipeline white. That isn't a problem. It's a pipeline. Now, don't forget that proof of concept in such RND. Initiatives are not intended to catch Skyla ability modal, accuracy or real world performance. These court in the prototyping stage or even lighter now next week. Oh, be speaking with Angela late about spacial thinking indict assigns Angela is the off by shall advocate, the scent of a spatial data science at your Chicago. And also runs a ladies' Chicago, we'll be speaking about what spatial thinking Maine's particularly in an age when so much spatial data impacts us all from Google maps to Uber and lift the public policy involving inherently spice questions, so many questions can be frame specially from urban planning and transit policy and government the placement of ads spatial data is everywhere. But when should we be thinking spy schilling, and what types of choosing zits to deal with these westerns? Join us next week. Find out on your host, Hugo bound Anderson. You can follow data camp on Twitter at data camp. And may at Hugo down, you can find all our episodes and show. No data Cam dot com slash community slash bond. Gossip.
Financial Services and Voice AI with Prudential, Visa and TD Ameritrade from Voice Summit - Voicebot Podcast Ep 117
"Are Trade Mark Jamison A. Visa and Adam K of prudential financial welcome back voiced by nation. This episode won seventeen the voice by podcast. Today's episode is all about Voice Assistance in financial services our guests are who nayna potato of tedium stories about the way they thought about it what they've done what they've accomplished but also the pitfalls that they've had to overcome or maybe you're stuck in today Syra Echo Robert Dash B. I. XP Bravo India x-ray Bravo bixby you get it s d wallowing in those so that's what we wanted to go through and we've got a number of questions for them we'll try to take some questions from the audience to the extent that we have time for that fintech panel from the voice one thousand nine conference you'll hear me I followed by Adam Denmark Antonina let's get started and I want to start with Adam for Prudential and K could you introduce yourself and like you just say what you do think about it as a place to get really significant access there's also going to be demonstrations of the latest bixby capsules and devices developers even get access to help from evangelists and other is you get that first hand perspective of someone who's lived through it right and that's really what we want to do today is allow each of the panelists to tell the invoice my guests from Prudential Visa. Td Ameritrade they've been on the front lines of voice adoption and tackled some really difficult challenges they'll tell you what they learned their feces behind at the end of the month okay I guess this week are Adam K voice president architecture for global business technology solutions for Prudential Financial developers working on their capsules learning more about the Samsung developer premier program voiced by listeners actually have special access as well these types of events are typical committed here is is great we've really special group of people today one of the things I like about doing these types of panels we'll be there however I'll tell you right now if you wanna read it down so to learn more good a Samsung Developer Conference Dot Com that Samsung developer conference dot com pretty straightforward and when invite only but Samsung is making available to voice about listeners so you can check this all out in the show notes voice spot day I fought slash podcast you can go there and the Samsung developer conference is coming up at the end of October it will be in San Jose at the Convention Center on the twenty ninth and thirtieth of October that's twenty nineteen last year they rolled out the see nineteen dash are Dash B. I.. XP GO TO SAMSUNG DEVELOPER CONFERENCE DOT COM get fifty percent off the registration price I hope to see you and San Jose voiced initiatives how can help employees as well as customers and what platforms they're working on before we get started I need to do a quick shout out to this week sponsor will be there who's running the division now lots of other people who are helping bring bixby to marketing are working with developers and agencies in and big brands to bring them onto the platform okay so help everyone added Nice evening last night I saw a number of people walking the streets of Newark so seems like success part so S. D. C. Nineteen Samsung Developer Conference Nineteen Pretty Straightforward Sec Nineteen Dash S. E. R. at Sierra Echo Robert Register use this code and you'll get fifty percent off the registration price so that's a pretty good incentive all right it's a little bit long but I'm GonNa rolled out for here it's S. D. C. Nineteen is the Jameson Global Head of innovation designed for visa and Selena to head of strategic partnerships and emerging technologies at td Ameritrade it is our Mainstays XP development center and there were main stage breakout sessions by DOT keet Laos and Adam Charleville labs and Samsung you get to meet the folks who are doing this plus the evangelists Larry heckle occasions you all know of they come to a to our group we support them. We offer ops product and engineering for those applications and what we've learned over time is one business unit wants some functionality or change or you'll leverage reporting all the business units want the same functionality so being able to consolidate those we're one of those two thousand five hundred people we work in an organization called GTS stands for it's global business technology solutions within that team I run the engineering side of Oliver Saas applications all of our enterprise applications so when we have applications that are company leverage company-wide some of the larger also how you first got involved in voice and what part of your job what role it plays morning everyone so I've been for a long time services into one group is really proved beneficial for us as part of that we do support applications voice or text messaging for the company right the cool thing is were seen so much demand and interest in this space that allows us to apply exploration into it and so everything from the process Greg Mark Jameson from visa button to tell everybody about what you do and a little bit about your experience with voice globally we have a twelve new product and centers around the world and they're good locations like London Singapore Dubai Beijing's policy it's a pretty I spent a lot of time on planes to RTP to be able to offer those three services the product opposite engineering to deploy code it roll roll it out and an enterprise zone changed our behaviors and Willie modernized the way we live our lives when it comes to financial services it's still opaque there's a level of so as part of voice up those guys came to us one leverage SMS for the company we want to leverage voice for the company so it only made sense for them to come tap into the power of new technologies and partnerships you know ranging from a to machine learning to voice of course but really confluence of audio voice and now is something we believe actually works really well for us to deliver on that thesis about breaking Oh Good Morning my name is Selena as Greg mentioned I'm kind of doing two jobs right now the job I'm representing here today is the Komo about why was that important what were your objectives how is it turned out yeah absolutely so one of the things that we as tighter team very disciplined about is we've got the sure that the things that are done in the space are safe and secure and worked for for real people all right so Sanada today a S- focus on how do you break down barriers that still persist in financial services but especially in busting right as much as two new technologies have really fall when you became the first company to Enable Stock Trades by Royce yeah so I think it would be helpful for people in the audience to understand uniquely qualified to solve that problem and source the confluence of voice and the partnership with Amazon to be the first financial services company to add not just education being our strategic partnerships at emerging tech portfolio they call us the tiger team I'd started with a random reference from our CEO and now internally great so hybrid martines Louisa my jokes I've got the best job at the company actually run our product development and design as we define success one is obviously the end business results how are we driving business results as we measure based on new acquisition or increased engagement so much about I need boys what we heard from our clients was I need to be plugged into the markets or finish education on the go and stack but also just the human experiences and what will work what doesn't work as we played this unique role in the payments and commerce eco-system this the connective tissue so we have a real responsibility second is it's a very unique eua in the sense that it's natural the ability to converse one of our most primitive skills there's no additional down barriers and you know we can dig into it I'm glad bread said there's no glamour and sexiness behind leading some of these new product developments is I'm sure my colleagues will power to enter the capital markets with confidence and you know that's where we've been obsessed about voice our members of team are here and they can keep me honest the hoop the real or perceived complexity so what we really obsessive about is not just technology but how do you commercialize it in a way that Americans can feel from td Ameritrade you've been doing this a little while now why don't you give people a little bit of your background what you're working on and what you will be working I feel like Darnley because the tiger team I guess it's better than being the squirrel team so I'm going to own it really the thesis behind what what my team and I do is how right now but you know but this notion of untethered hands-free experiences very liberating right so what we heard from our clients was addresses but I'll focus on the first which is you know what is the problem we're solving why is this worth Solvay and why are we as td Ameritrade whether the trades or access to education right the second is what are we learning in terms of consumer adoption behavior because we recognize a lot that problem again you can always talk always time the market don't try to tell you this is not a recommendation information but the transaction layer to voice was really predicated on the fact that Ed just the ubiquity of you I mean he you know Kudos to pete aiming require and then the third is in an era where we're always glued to something in you know I just I'm having separation anxiety because my phone is on the table and not in my hands get specific check what defines success so you started out I'm going to roll this how what were you trying to achieve and did you make yes I would say cheese leans now within your vehicle experience powered by voice and we did that in partnership with apple carplay Google enjoy and enforce our friends at Amazon he for hosting a week long conference on voice I think that just underscores that this is an emerging technology that's Kinda has hyper growth and consumer adoption but students a lot of Grit and grind and we've got like the war wounds to show for it but I think the problem statement kind of makes it makes it worth doing it but we have to start here and we have to iterating the one key success measure has been thanks to our launch of trading on Amazon just a few months ago and the learning Arnor justice we we announced that we are one of the first initial services in the world to offer suite of offer metric probably fifty percent more so like we just played this unique role in two hundred countries around the world there three point four billion visa cards peanut credentials is such a big deal for them I mean look America the largest retail bank in America by retail deposits in there now in their quarterly uh-huh yeah but this is where we get the press release and we find out what you can really dance okay all right so mark you have innovation groups here in the United States you have capital one with you know which is one spelled backwards or Erica from Bank of America which is like a subset of America in case you didn't pick up on that entire transaction you can build entire experience around it and so what we've been seeing around the world all of our clients are tested lots of different ways and so we wanted to do was make sure that access to financial markets and financial education it's part of your lifestyle that it's not Chore Number Sixty Two on your to do list world you're working on all these different products how did voice wind in your portfolio is something to be a priority that you're gonNA start to work on yeah this case because of those five is the only one that is both a biometric that can uniquely authenticate you but then also this thing which can actually concentrate so just to set context of how we think about it so visas the world's largest payment network if you were to take our three closest competitors added them all up by almost station is making sure you are you that it's hotter fraudulent transaction and within that framework there five ways was we started explore biometrics say what better way to do it is to bring to the modalities that you use every day as part of your life and lifestyle so that really was the genesis of our partnership okay so let's Acko auto so to me that's also just of success is you're able to take it to the next level so on that so you can give arc information from all of those services but I think through Alexi these things are still in there and it's perpetual Beta right and I'm the first you know when we do these projects to say we're not going to bring in a million trades every month via voice how do we can we really know that your you well it's Fingerprint Palm print facial recognition Iris and voice now of those five voices a very special ways than here are the here's the customer journeys here are the use cases that really work here the things you need to embed into the experience to make sure that the customer knows one Arca as consumers adopt boys are you out in the front is it important for you to have that one on one relationship where they're talking directly to visas because it's this unique thing that humans interact with it in ways that you really have to think through the use cases and in some cases actually add thanks issued the cards but we're the platform on the back end so we have a whole set of API is an services that allow them to not only issue those cards but then earnings announcing how many Erica active users they have so there is a questions like are they serious about this there's your answer right there. CEO is talking about on the quarterly earning Shen or confirmation throughout the process so that humans feel comfortable actually using this channel got it so thinking about voice is the consumer installs so we've just been exploited a bunch of different ways and we get into a little more an hour later but what we found is that consumer touch points technology it's also something that you're partners might use and you might be on the back end of it so how do you think about that in terms of what your role is in the Eh you're going to use this technology than here's the way that if you're going to authenticate using voice here's the standard that you use and if you're going to interact in these the whole thing like how many are many cars Uber have zero how many hotel rooms does airbnb zero how many cars these issue zero every transaction make sure there's a whole set of risk security controls and different things that make it all work to make the ecosystem safe and so that's really the role we play is when we so we have a lot of representatives today and I want to start with the fact that you just started talking about td Ameritrade I first became familiar with your voice project last you can still you can trade while you're drives connected back to your Alexa App on your home device so trade stocks while your commute you know you never ooh Australia New Zealand there's a coal jamie that ANC the big bank there's been testing this it's really cool I'm brechin selling your host the voice by podcast and I have a treat for you today at the boys nineteen conference in Newark couple of months ago I had the privilege of hosting a panel discussion about Fintech work with heart sixteen thousand plus financial institutions around the world or the fifty four million different brands that accepted visa payment credential like we actually write the rules in the standards uh-huh and I really love that the heat and the team were able to get such a broad perspective here from the financial services industry because there's a lot of different fast floor but they're not actually doing transactions and so what we found was there when we asked people like well why don't you they would say things like well how does it knows me circulation so I suspect everyone in this room has a piece of plastic with these on it and so in that process the first thing we are laying off clear and several author airman's in their home and retail environments in their car and one of the things we did we say what's your favorite Song Oh my song is is this one by the red hot chili peppers some friction because it increases confidence and trust in the process it's a fair yeah I'll give you one quick example we did a bunch of primary research with different Sumers and different we found is what we're hearing from a lot of merchants was we really want to explore new technology we're fine people aren't using it as much as we thought like even the early adopters they might use when we work with all our partners around the world that's actually the things that they want to know from us and so we should highlight that point just in case anybody missed that we talk about take two seconds snippet of that song we would say every time we have authenticated you we're going to play this snippets you know it's uniquely you and we did it as for this is that okay so by adding friction in the process of confirmation we found that actually gives consumers the confidence to do the transactions and that's actually the thing that if you to be able to support your partners who are using another ways yeah so again visa on a common misperception in the market is we don't issue any cards transaction all of a sudden became this thing of joy and so you can actually embed a lot of really cool experiences if your thoughts were on how you do it great Okay Adam he'd been very patient is is removing friction and then absolutely does that however in certain types of use cases workflows it's actually useful you found in your research to add well we knew on the back authenticated using voice but we had to tell them Oh hi mark I know it's you which payment credential do you want it's now of course they probably already had payment credential on file with that merchant but we need to stop and say oh by the way we're going to use your J. P. Morgan Chase Sapphire Card Kim as try different things when we did it it was tested off the charts and we have these videos of people who the moment that happened they stand up and start dancing like this like a common live it's fine it's just up here and learn okay so you've been forward invoice you you have voice out there and you have all these other initiatives that have been going on so let's talk about your experience with I roll out and how that's working and how you think about it is it a launch and learn earn is is a core product what your perspective we have a big one out there for us we re released recently and that's basically our retirement process through Alexa food about this from prudential standpoint are you assuming that voice will have a bigger long term impact on your consumer relationship or internal we have definite plans in place and I think it's short term it's not long term kind of opportunities so I think we're going to both I think we have like I said before I think getting mation to employees and make sure people are safe they understand what the what the challenges might be commuting but I think you've also explored Lexin for business we're starting internally taking that feedback although we have external stuff out there already starting internally listening to our employees to the feedback and after the industry we're kind of taking that step internally first to see where are the roadblocks where the challenges where the opportunities and getting some of those first things out there in operations or you're not sure yet I think the answer is probably both I think we're really working on both I think we have to have it from a you know a Beata seats standpoint I think there's no option there out there that are going to be working with us on similar kind of processes what we've been focused on a little bit me to change it a little bit we've been focusing our attention to in and I'd love to have that conversation with you about some of the challenges you face that it it it's got a lot of benefit for you but but sometimes just one thing following the path out so for the internal enterprise applications invoice you export a few and you talked about the one in terms of just providing I do we notify the people when there's problems how do we tell people when they're servicers how do we tell people everything that goes on in the entire company is if we're going to kind of go testing when you look at something like voice and you put it in perspective other things you're looking at because there's a lot of technology obviously why do you think we're probably getting past that some recent changes and everything have I think made us all a lot more comfortable really opened the doors for the future but there are those initial challenges right is how do you connect yeah process and believe it or not there's a tremendous amount of need and want within the company to have those initial services and I think going back to mark's point is getting people Alexa business for meetings right how do you see rooms are male how do you see what people are available how do you schedule meetings and so forth all that can be done with Alexa for business so by the fault as you guys all know this many applications around the company many different teams many different processes and incorporating that and getting the API between all the applications I four item from prudential from a time perspective so that's out that we have a bunch of really cool. POC maybe not as cool as playing chili peppers but some really cool oh comfortable with the process I is a big step you know I still kicking my mother off of writing checks so there's a there's a lot of things out there that are getting people comfortable with voices a whole big one balances all the time right so we give them the ability to go out there and say Alexa what's balancing my retirement account I'm simplifying the process a little bit but we found that that really is what was the number one using our employees to sometimes guinea pigs testers out there to see what he you know I we had also missed expenses early where maybe the adult how do we bring voice into our employs we're here in Newark and a lot of construction on a newark there's a lot of snow storms a lot of problems by the fault is sometimes a challenge so we've definitely had some roadblocks it's not an easy task I wish everything was one big system and we can connect it would be great but by the fall that in the future congresses will be powered by running on rich data sets distributed through tech platforms authenticated with biometrics so that's the financial services tends to be broadly an early adopter of new technologies and sometimes for pure production sometimes for testing but financial services is always perfect ambiguity because unlike every other technology that you had up today the way you win is by getting the data set and learnings other people doing is obviously a great opportunity to leverage some of those opportunities great so mark one of the things I want to ask you is does this perspective on action wasn't what we originally hoped out you know for retirement software it's picked up lately but obviously listening to other leaders in the industry and some of the suggestions is something where financial services fintech come together and it's important for companies like yours are all your competitors your colleagues in the industry that they need services you hell no it's highly regulated you're dealing with money you can't screw the stuff up so that paradigm works guess what in the thesis that I just laid am machine learning neural networks choose your sub version of a the winners have to be comfortable with not out the said it's a run in on rich data sets pause there there's a difference and it's a fundamental fundamentally different way of going to market which is and that is designed in a way to make sure that when you get to production that thing is like really solid enterprise classmates hardened and that is really critical and one of the things we very much believe in is at some point you got to take it and you got to put it in the wild and you know my product would be out there and thinking about this I think about this new transformative platform or do you think about this is I'm not sure yet but we have to test everything where do you come down think about this yeah so I'll I'll double click on my colleagues have said I think the whole notion of maintaining and approaching this with a perpetual Beta mind the market the instantaneous I can always rely on td trade I can do whatever I want but then there's the strategic level that we were just talking about how does td Dr Clients here's the deal this not to be perfect out of the gate but if you believe this is the future as we do then you have to get out early and often to build the data set so you can be a leader really need boys maybe it's a nice to have but it's going to go to need to have like that and we need to be ready I mean the cheeky example I like to use is I'm space okay so there's a lot of good reasons for you to do a tactical program to connect with consumers because it's differentiation in tire plane of adults turn into a bunch of Brady toddlers but just think about it you are probably lying at forty thousand feed jetting around the sky he says that we have and we talk clients around the world we believe that's the future of our industry but an every tech shop you have your three environments right those deb there's test in this production why at five hundred miles an hour and just a few years ago Wi fi on a plane was this luxury thing and now it's a necessity you need to have it right so by cheeky point coastal and spend a lot of quality time united flight from Newark to SFO and it is fascinating when United Wi fi drops for just a few minutes and as the Delta between nascent and necessity shrinks very fast right today you're right it may still be yeah needs to be overcome in order for you can take advantage of the reality is you put the vice in a meeting room right and that device is in there could be probably all in the past we've had some concerns I think eight and iterating it rated trust me when you worked on something very hard having somebody tell you your babies ugly like I your soul but that's the right it's also the daunting part I think from a strategic perspective the power of voice we really look at it in two key from two key points of view one to play catch up and the other thing I fundamentally believe in is just as we had e commerce with the advent of the Web I don't know why east other piece that we think about a lot in terms of tapping into the power of voice in which is near and dear to me is around accessibility right we forget impairment and how awaiting it was for his
Schwabs Big Buy, PayPals Sweet Deal, and Googles Losing Game
"This episode is brought to you by. Td Ameritrade you haven't investing style TD AMERITRADE has a mobile APP to match it checkout td Ameritrade mobile cool and think or swim mobile to find the one that's right for you member IPC. It's Thursday November twenty first. Welcome to market flooring I'm matt grew and I am joined in studio by Motley for analysts. Aaron Bush and Emily Flipping how are we doing this Thursday arrays decent okay. Well I'm GonNa try to upgrade to like slightly above. It's been a good day. That's okay. Now that's okay. You're of your morning expectations. We have fools giving launched around the corner so we have kind of our annual Thanksgiving lunch. That were very very excited about and and we're also excited about some some some news of the day we've got pay pal buying honey. Four billion no not honey food. We're going to talk about it but yeah tape house biggest acquisition ever. We'll get to that and we're GONNA talk about macy's macy's not doing well. I'm selling off on earnings and we're GONNA talk speaking of not doing well. Aaron Gul's Gaming Service you as one of our resident gamers you're excited about Gul's gaming service right stadia. It's one of the a dumpster fires. We'll be talking about today. Okay okay so not as excited. Okay well we will get to that. We will get to that but let's begin with the big deal of the day Fox business. This news reporting that Charles Schwab is buying td Ameritrade for twenty six billion dollars td Ameritrade shares up around eighteen percent at the time of our taping Schwab up around eight percent so interesting that both companies are up. Emily Flippin. Let's talk about what the deal means for investors for consumers and for the competition well for investors. This is a big deal in the sense that both Schwab an td ameritrade are the largest publicly traded companies brokers and the business some of the biggest competitors earlier this year we saw Schwab slash their fees to nothing which sent td Ameritrade stock down. I think it's like twenty thirty percent in a single day it was really substantial So the idea that there's acquisition in the space isn't completely unsurprising. Because the fact that fees have gotten so low this now feels feels like it's a game about scale as it is as opposed to just monetize users better. You need more users because you're making a lot less money off of them. It's going to be interesting to see what this means. For their competitors some of the biggest ones being brokers fidelity obviously robinhood has kind of been on the out and out since earlier in October. But now this is just putting additional pressure awesome the the larger brokers that maybe won't have the scale that Swab and td Ameritrade will have and you just mentioned the competition and Robin Hood. Robin Hood Special Sauce was their free trade. All right and as you mentioned emily a month ago both Schwab and then. Td Ameritrade announced they were eliminating commissions for most online trade. So where does that leave Robin Hood. Where does this leave Robin Hood? Robin hoods as a special sauce was more than just it's free trade. That's how it got. Its Start for sure. And that's what made it such a compelling platform but I think they also have a a little bit of an advantage in their ease of access. Their interface is much sleeker than that that you get otherwise it's simplistic you're not getting. A lot of the research is other brokers but you do get a nice app you bitcoin trading and their recently spreading internationally as well so spreading to the UK. I think that this does have a material impact on their business. It's clearly it's it's as Aaron showed me maybe a month ago. It's way too easy to move your assets from Robin Hood So I have moved mine from Robin Hood into my Fidelity Account the little that I had there. You're so it's a it's a really low switching cost business and unfortunately that's going to hurt Robin Hood. Yeah it's clear. I think this is about more than just fees going to zero. So if if you look at Schwab's business When they announced that fees are going to zero that's only going to impact about three to four percent of their revenue because they make most of of their money from Net interest margins like interest on assets that are being held by lots of consumers they make money from their their registered investment investment advisor. Ria Business so in some ways this is really competing more with like a black rock than like a a Robin Hood But TD Ameritrade the they also make money in some other areas but maybe a quarter of their business or so comes from the transaction fees and so they got hit hard for a reason So I think what we're seeing is Schwab being smart in their timing announcing fees going zero which weakens competitors switch less than by you know still one of the strongest players for a lower price and even with you know what they're rumored to be paying right now that's still is about where the stock was not too long ago So I don't know it seems pretty smart on Schwab's part and they get lots of scale advantages beyond just trading but across tons of different investments. So it sounds like a complimentary deal right given what you're saying about Schwab's business and TD ameritrade business. I mean you have you have potentially I don't WanNa we use the word synergy but maybe you have some synergy. I think he gets scale advantages. I think and I think that this could just be the first move of many for the entire industry industry consolidating. We'll see and it's bigger than just trading bezos. It's fees across the entire financial industry. Going to nothing. So even there's there's registered investment advisory services. There's been a lot of Downer Downer pressure on everything from funds to individual access to trading so yes it is a game of scale now agree with Aaron. I I'll also say that when you look at this combination combination and the purchase price that is being paid by Schwab for TD Ameritrade. It is curious because what caused that value in the first place was competition. And so so when you have somebody that's eating up the competition. It begs the question of okay. Well if competitions what caused the fees to go down what happens we start seeing consolidation in this space and I don't think that these go back up but I do think that the government's probably GonNa take a hard look at this acquisition say. At what point do we see sending that's anticompetitive and let's move on to retail macy's down on earnings things earnings. That were better than expected. But well sales were not macy's cutting its full year. Sales and profit outlook macy's citing a warmer fall fall in weaker spending by international tourists. Aaron is there. Is there any good news here or what's going on with macy's no there unfortunately is not any good news is sorry to say and I feel like it's funny because we probably could say everything that we're saying right now five years ago and it would. It could be the exact same radio. Yeah we were saying before our taping was the last time you shopped at macy's in five years ago so you can blame me. You can blame everybody else like me but yeah I mean this quarter was bad sales. Were Down Comps for down guidance as being lowered and I mean as you mentioned according to management like it's being impacted by by international international tourist shopping there last which if I'm an investor that's not really what I wanNA see propping up. My retail store like macy's weaker than anticipated performance and lower tier malls like that. That sentence in and of itself should be self explanatory about like the entire past decade next decade and then cold weather which. I don't know every time people blame whether for a store like this. It just irks me so lots of lots of I rolling. You know kind of going through the a press release. So it's really more of the same. And I think like stills recognized that this is a business that generates cash the stocks cheap when you look at the cash that's being provided it's tough to have any confidence in the future of this business when it's real Russell relying on malls and international tourists and weather apparently and even if you look at like the major stock price decline of the past five years or so the price is still double what it was at the lowest point and like the two thousand two thousand nine recession. So if you can't think if you don't think this can get worse you're probably wrong. Wow okay that it sounds pretty ugly so I want I want. I want to have kind of do a little thought experiment here because this very same week target just yesterday just just blow out. Earnings target up big big hitting a new all-time high so emily if five years from now we're looking at macy's and saying what an incredible run this. This was the time to buy what happened. A comment came down from a destroyed. Walmart Target Burlington TJ. Max I know I I'm not sure at this point. What could save them? I'd say being smart with their merchandising is probably the best thing they can do to make use of the assets that they have right now. I think part of the reason why targets so well is because they've really had strengthened the way that they've marketed and merchandise their apparel. which if you looked at their last quarter or was it big growth driver for them? Okay I mean I would wanNA see. They do produce a lot of cash. But they're not really smart about how they use it in terms of investing for growth. And that's fine if you don't think that there is anywhere. Good to invest in growth make sense to give it all away in the form of dividends but if you want to see this business like return to growth and find find like a new type of catalyst you better find something to invest in Aaron. What gave you a comment comment? Aaron what what gets you back into. macy's I guess what would it take for. Aaron Bush. The year is twenty nine thousand nine. Aaron Bush goes to macy's this sounds bad but probably bankruptcy so that everything goes like ninety percent it really business strategy. Okay not helpful. Wow Okay let's move on to pay POW pay pal buying honey science corporation for four billion dollars. Honey is a discount and rewards awards platform. It's developed browser. Add on and mobile APP that helps consumers find discounts. Honey also offers up other moneysaving tools. Now Emily this is pay pals biggest acquisition yet. Is it a good by four billion dollars for chrome extension in an APP. Wow it's it's pap- house big as acquisition and I. When I saw that number I was sticker shocked? I was like. There's no way this is a good deal. And then I realized something honey's making a a lot of money off me honey user. That sounds like a weird thing to say. I'm not addicted to honey. I do use the APP honey user and apparently honey makes a good chunk of money off of I think it's seventy nine percent female millennial users. Oh I'm right there. No target demographic about seventeen million users. That's a small number verve users for a four billion dollar price one hundred and thirty five dollars per user. Thank you. I couldn't do math in my head a lot of money. I don't know if I'm worth worth two hundred thirty five dollars but apparently two hundred twenty five dollars pay pal. Apparently I'm worth it and it's interesting because you at the end of two thousand eighteen those those seventeen million users were really using it like you said just to get coupons but apparently pay things that honey is going to be accretive to their bottom line as soon as the acquisition goes through which that honey is being profitable off of their browser extensions so paper has been a little bit trigger-happy with acquisitions. In the past. It'll be interesting to see if this one has has panned out as well as some of their previous ones have. Yeah I mean I think the deal looks expensive if you look at the current state of of honey business so the the deal very much hinges on being able what's TAP into broader network and rapidly scale out across all of. Its other users in different ways and strategically I think it's interesting There's been so much focus and competing for the checkout experience and pay pal is very much a pioneer in that but as other things like apple pay now visa checkout and all these other things come on board even though pay pal is done well. It's very obviously lost market share. So it's almost shifting the strategic focus and saying like okay we'll still compete heat and the checkout experience but now we're also going to compete and the browsing and discovery and what leads up and see the checkout experience and I think honey probably is a good deal for for doing that. It's a IT'S A. It's a good strength and this is sort of a fun fact but I was. I was Kinda surprised I was like. Is this really pay pals largest acquisition especially since you know braintree is big then Mo is big and it turns out that it is a two thousand twelve. I didn't want to have to surprise in two thousand. Twelve braintree acquired Vinho for twenty six million dollars and and then the next year pay pal acquired braintree within Mo for eight hundred million dollars. which looking back this is probably one of the smartest acquisitions positions at least in the Fintech world that we've seen like period so that this isn't they're not buying honey for eight hundred million but if they if if they think that the network effect potentials they're the same way the upside could be pretty substantial and it's a great name like hearing you just say they're not buying honey? I mean come on. Don't we love the name honey. Don't we love honey. Do we love hunter. I think that's a terrible name. I hate honey. I hate the name. You hate honey. Honey is a little bit too strong word. But if I'm going to sweeten something I'm GonNa use something other than honey. It's not strong enough and it comes from bees not thinks about that right. Where does honey come from? It's not exactly an appealing thing to put on your food and put in your mouth. So why do you have against the fact that they're they're bees and I don't want them near me. I know they help the environment and they do lots of good stuff pollination they could just do that APP very far away from me and my singer emails to to to extend this unnecessarily. I learned that you know like the honey that it's like the bears. I I don't think I wanNA know like it's it's like mostly not honey. It's like all just like artificial stuff and like is that true early in the low plastic tares lost you there for stretches the definition of what honey then. Okay okay. I think it's fun to like. Squeeze it out of the bear. I don't know it's is just one of these things. I find satisfying. It's nice okay. Emily's a hater I love love. Love Love Nissan. Honey okay this this episode is brought to you by td Ameritrade so you've done a ton of research on a trade but you can't decide if you WANNA go through with it td Ameritrade trade desk might might be the secret to figuring it all out just go to td ameritrade dot com slash trade desk to see how they can help gut check your trades member whereas IPC and our final story a rough debut for Google's new video games service. Stadia launched this week. Now the idea here they would be able to stream video games like well you stream. TV shows but not working out too. Well Stadia taking heat for a lack of features a poor lineup of up games and a slow response time. That's just to name a few now. Erin that does not sound very good. I wanted to say fun and games but it sounds like the fun is lagging. Oh that was a good match. The the the the the original premise of stadia was an. It's still compelling able to play any game on any device because the game is streaming to you from a server somewhere you know in the cloud Interesting and one day inevitable but Google in its attempt to be the first mover instead of really like the best mover I'm just completely and utterly failed to execute well strong words and yeah now. It's the laughing stock of the industry. But it's early. This is the first week so do you. You see the ability like two weeks now. Could we say hey. They've they've got it all now out no not not in two weeks. So there's there's a ton of problems. The lag is horrible which is really just like a fundamental technology problem that will take time to solve. It doesn't support many devices which sure they can add more devices overtime. The Game Library is just comically comically. Bad like it's just like nothing there Pacman or well. I mean like there are some there like some games red dead redemption and stuff so games are still relevant but they only twenty two games originally they were only going to launch a twelve. And that's that's like that's nothing so the game plays bad and they're not many games. Yup Lots of broken promises about wireless about shipping times and it's in my mind is just like a classic case of over promising and under delivering and even if this is a Beta test. They never framed it up that way. the emily's weird faces. They didn't frame it up that way. They tried to get everybody excited. They tried to get as many like pre orders orders as possible and there's no way that they wanted to come out this terrible so even if you think there's a long term future here I think there are a ton of headwinds. There are like technology problems. Their business model problems their content problems there are perception problems. There is a world where stadia can succeed seed but I think it's fair to question whether they will get there and when they get there there will be more competition. Their investments in exclusives might not be good enough compared to other people And I think it's unclear whether they can target like a specific enough demographic to actually be able to pivot their business model towards something like subscription. That would work for something like this So yeah lots of problems so what I hear you saying is if you're macy's this week you may want to hang the stadium because you feel better about yourself this dumpster fire number two the episode. Okay Emily Look I. I might be honey hater. But I'm not a stadium hater and this succeeds in my world. It succeeds in my world. It's not sitting right now. All the points you mentioned are good points. And they're fair points but there are all fixable and I think that the gaming community in general general expected a lot from this. There's a lot of excitement about the concept of cloud gaming. It's a concept that's not new. It's been tried before and it has failed before but Google Google has the infrastructure needed to make cloud cloud gaming possible and it was a Beta test and it was advertised as a Beta test. Because of the fact that it's going to be a free service it's not a free service right now. It's a paid service right now. You need to buy their special chrome cast you to buy their special remote. You need to pay up for that getting that immediate Access to it and people have been angry because it's lagging a bit because they didn't immediately get their access codes and get it and it's not usable. Paid one hundred thirty dollars. It is usable actually at people who have access to it right now. No the concept. Is there the Gamer. Aaron is Aaron is grossly misleading fleeting listeners. Right now I genuinely usable usable product. In fact if you listen to the reviews from people have access to it. All the Games are playable transferable verbal across their devices their Google devices in the have the special whatever's to make them play. But that's how it is right now There is a little bit of lag however at the lag is really really noticeable. If you're trying to competitively play games online. And so for the average Gamer. It's fine and it does make the question of what's the average Gamer paying one hundred thirty dollars to get. There's not. What about the below average Gamer with that? That's the thing I mean like the lag is bad and it's really inconsistent so like depending on where you are and what replying on like it like. It's just not going to be the same experience which for like a lot of games is a problem and I think part of the problem is that right off the bat. They're trying to be everything thing to every body which like if you study just like textbook. disruptors innovation like those disruptive ideas when when they're able to I target a niche. That isn't being served. Well by what exists today that you know like the hardcore gamers of today like wouldn't be satisfied by but stadium isn't isn't doing that and so if I were them and I wanted to turn things around and succeed like I would focus very much. Unlike delaying expectations refocusing on finding that one audience that that that is being under served making it a great experience for them and then building out to other gamers ars that are more critical and have higher expectations. They could do that. I don't know if they well by the time they get there again. Like I mean Microsoft's can be doing this. Sony is going to be doing this They'll still probably be like the weakest link in the industry So yeah I mean. I don't think it's one hundred percent game over but it's a really bad headstart. That gives them headwinds. that are tougher to deal with. Going forward okay. So let's talk about that going forward five years from now if we're talking about a company company that has become the net flicks of streaming video games. Who are we talking about? I think Microsoft is the Best S. position Because they they have already like leading console. Lots of exclusive content. They're building up a library game. Pass of you've you know like hundreds of titles that you can play are very much shifting the model over towards like a subscription model but also for the device where it's more like a like an iphone model And they have all the pieces worked out like Microsoft owns Asher the they like. Have everything. I mean playstation will be relevant. Maybe maybe not. They're not probably going to be as successful on that front. As Microsoft and stadia is a question Mark Amazon is a question mark. I don't disagree disagree with Google doesn't own content and that's been part of the biggest challenge for them and drain cloud gaming is about that they don't really have any games right and I think I see a bigger bigger future for Google. Stadium is a platform a neutral platform as opposed to something like Microsoft or Amazon. If it were to ever enter that field and I think that's probably where the future as for them. I don't think they're trying to be a content generator. The way that that you know. xbox has really provided a great platform for content. I think that could be like a Roku And that analogy works but also like all the other platforms will veto. And then it's essentially like Roku different roku is competing based on exclusives. The question is do they want to right right. And I think Google's in the best but I think doesn't want to be a content generator I think it wants to be a platform and I think the other one should focus on what they do. Best which is generation and then leave the really really early annoyingly complicated process of cloud gaming to the company that has not huge numbers of of clouds in Connecticut. That space to it. Yeah we'll see Google. We'll traditionally is pretty bad at at facing problems. That aren't technology problems like the they really suffered for a while with Google cloud because they didn't have any like salesforce expertise they suffer. They suffered with Youtube. Red China like create like a premium youtube because of like not having exclusive content expertise for teas. And so you know Google very much like as like one of the best if not the best technology company in the world there hammer as technology and they've you every every nail is a technology problem and there's like a cultural change that needs to happen if they want to succeed and all these other areas also have content problems media problems. uh-huh just other salesforce problems that need to be solved in. Let's wrap up our desert island question. You're on a desert island. You have five years and you've got to buy one of these stocks knocks the combined Charles Schwab. Td Ameritrade assuming that deal happens. Pay Pal macy's or alphabet the parent company company of Google and on a good down with this ship. I'm GONNA go with Google just to be contrary and I think there's a good future for for td Ameritrade and Charles Schwab if that merger goes through. But that's a big if so I'm not going to count my eggs before they're hatched or count my chickens before I think you can count the experts so I'm gonna go with Google I'M GONNA go with with pay pal. They're a lot smaller than Google and have a lot going for them across a lot of different dimensions and are proving that they can reinvest in a choir into other areas and growth through that too. Excellent Emily Aaron. I hope we're now feeling more feel more than decent now. I'm feeling good and I'm really excited. It for launch excellent. Thanks for joining me. Thanks as always people on the show may have interest in the stocks they talk about and the Motley fool may have formal recommendations nations for against. So don't buy or sell stocks based solely on what you hear. That's it for this edition of market foolery. This show is mixed by Dan. Boyd thanks for listening. I'm career we will see you on Monday.
The Business of Hurricanes
"This episode of multiple money is brought to you by TD Ameritrade, whether you want to place a trade on Twitter or get market news from your smart speaker. TD Ameritrade has everything you need to invest on your favorite platforms and devices. See what's new TD Ameritrade dot com. Slash innovation also brought to you this week by casper asleep brand that continues to revolutionize. It's line of products to create an exceptionally comfortable sleep experience. One night at a time, get fifty dollars off. Select mattresses. Just go to casper dot com. Slash fool and use promo code fool at checkup. Everybody needs money. That's why they call it. Mine. Robe pool, global headquarters. This is motley fool money. It's the motley fool money radio show. I'm Chris Owen joining me in studio senior analyst, Jason Moser, Matt ARGUS singer, and Ron gross. Good see was always gentlemen, they, we've got the latest headlines from Wall Street. We will dip into the full mail bag. And as always we'll give you an inside look at the stocks on our radar. But we begin with mother nature. As we are recording. This hurricane Florence has made landfall in North Carolina, an estimated ten million people are in the storm's path. So first and foremost, hope everyone is going to be okay and is just hunkering down for to ride out this storm Jason. But this is also a story with business implications. It is. Yeah. I mean, my heart goes out, I went through and eighty nine in Charleston, and it was just a nightmare. So it's a tough thing to recover from, but recovery does happen in their companies out there that help that happen. Certainly they can present opportunities for investors. I think the first thing to remember we. Always talk about insurance companies. I think that's the main exposure here. These insurance companies are not taken by surprise when it comes to catastrophic losses like these man, that's the nature of their business in. So they plan for these kinds of things. With that said, it does seem like there have been a lot of natural disasters more recently that are costing these insurers a little bit more than they have been planning for a look at traveler's insurance. For example, the most recent quarter here they reported catastrophic losses, a four hundred eighty eight million versus four hundred million from a year ago, but they did note that they had not planned for this high of a loss, it it sort of out outpaced they are expectations. And so that's something to note. I mean, they said in the call, even that tornado hail, nor'easters, hurricanes, wildfires and mudslides. We haven't seen a string length that in the last decade it makes a difference. And so I think you're gonna see more and more insurance start to plan a little bit more conservatively are going forward because it does seem like there's a trend building and that frequency has. To impact premium prices and if you don't get it right than by the way, it's hard to get it right. Then you start to take hits in your combined ratio your profitability. And that's where can get a little dicey as more of a longer term trend where insurance companies do not have their pricing structures, correct. And then you could see hit the stock and really impact business. You mentioned the the combined ratio. I think that's an important point to note because with travelers, the combined ratio of ninety seven point, nine percent in two thousand seventeen was five point. Nine percent percentage points higher than in two thousand sixteen cloth in ninety two point zero in just for people out there too FRA context. You're you like that number the under one hundred percent. That means you are underwriting profit is occurring if it's over one hundred percent than you're, then you're losing. And we do see sometimes those insurance companies turn in those combined ratios over one hundred percent. I wonder how much of the story here is the fact that over the last fifty years. I mean, it's just been so much development, right? On the coastline. And so you know, marinas resorts condos, people like to live near the beach. Near the ocean. I understand that, but the so the amount of insured property in one, the dangerous parts of the country, which is the coast when if we have we're gonna have more hurricanes. I even read a story over the summer where a lot of these coastal towns have actually spent millions of dollars replacing their beaches, rebuilding the dunes, the sandbars just to hold onto the beach. And so even small hurricanes. And I think Florence, it's a big storm, but I think it hits shores a hurricane a category once yet. Got downgraded to category one. Right. So even that storm which you know you wouldn't think looking back, you know, how much damage could this really cause, but even storm like that then 'cause is probably causing tens of billions of dollars worth of damage given all the development we've seen in past decades. Yeah. The interesting thing is just sort of this, the cycle that's plays out because like Ron mentioned there. Eventually insurance premiums go up. These insurers are protected by other insurance companies known as reinsurers and their rates go up so it all it all sort of plays out his just higher costs of doing business in those costs eventually can be recouped. But then if you look on the other side of the Quin look at the. Those companies, those restaurants, retail operations that will never gain those sales back. I mean, those everyday that they're closed, those are sales are never going to get back. And you know as looking here bojangles and godspeed little Jiang. You've got forty percent of their stores or in North Carolina might my guess is we will see bojangles in particular. That's a good example of a company that is probably going to witness a good ding to their revenue here for at least a quarter. If not more this week. Apple held in van to unveil the latest versions of various gadgets, including its largest and highest priced iphone ever. The iphone ten s max, which starts at eleven hundred dollars and Ron. The new apple watch out, comes with the ability to take an electrocardiogram. That's FDA approved. That's a little scary. You know, when I first read the headline here, I was underwhelmed and I am an unabashed apple enthusiast. I on the stock, the phones, the ipads, the computers, like I'm all in. But this didn't excite me. I was wondering what the impact would be on the stock, but I dug a little deeper and I got a little more comfort here. I actually think the larger excess max, which you know is the most expensive is going to be attractive to a certain subset of folk. Who really love that the phone, getting bigger and bigger and bigger. But I think the bigger opportunities actually the lower priced x. are which is at seven hundred and forty nine dollars, and I expect that will do well, you give up a little little functionality. It's made of aluminum, for example, but it's actually a larger screen than the iphone ten was at a price point of seven hundred and forty nine dollars, and I think that will do well. Yeah, I agree. I think we've seen where there are people out there that will pay that really high price point for a phone. The majority of people though we're not looking to do that. We've seen units unit sales to stagnate a little bit, but I think that seven hundred forty nine dollar price point is pretty encouraging yet. I'm still sitting here on my iphone six and I'm trying to get everything I can out of that and and I did that twenty nine dollar battery replacement. It really extended the life of this phone. So I'm not in the market to upgrade, but I have to imagine when I am ready I would be focused more on that seven hundred forty, nine dollar phone. Not that thousand dollar plus phone. The apple watch and the FDA approved electro cardio. Program. I mean, if your Fitbit and you're watching this, are you just, you know how disconsolate are you if your fit bit? Because it really seems like even if they don't have the upper watch flying off the shelves, they've absolutely raised the bar in terms of what people can and possibly should expect out of that kind of device. Yeah. If your fit bit, you're saying they're coming for us and they're here, and I don't think this particular watches is a game changer, but it's the beginning of apple really a moving forward with with the health functionality of that watch in a pretty big way and probably get better and better and his once once doctors start to kind of rely approve it. I think it'll be even more of a game changer. We've talked plenty of times in the past about Intel, the two hundred billion dollar chipmaker. We rarely talk about its competitor, Advanced Micro Devices and maybe not should change. Mattie, because shares of AMD are up two hundred percent in just. The past five months, what is going on with AMD? I know I couldn't believe that number when you said it, but so get ready for me to talk about things. I know very little. Oh, no. This happens quite often. Actually. You know AMD I think this was for a lot of investors, a crypto currency play, kind of early on, go back six to nine months and Egypt's kind of powered the computers and servers that were doing all this heavy number crunching behind bitcoin, the currency mining, which I understand very little. But I think overarching all of this and I think this is why you've seen a lot of chip companies really hit all time highs and have great years. It's just the the whole rise of cloud computing. In general, if thing about the heavy duty cards, enable things like data center virtualization, all the graphics work, visualization that happens there in the cloud. It's a massive trend, and I think MD has ridden like a lot of companies. They've done a great job, and I think that we're, we're now at the point where AMD is out of the woods because you go back five or so years. And yes, it was a direct competitor to Intel, but it was so much smaller. There were really times where you just thought, gosh, if Intel wanted to could probably go through their sofa and find some pocket change and just buy them out. That's right. I think aimed is probably found. It's niche in a few areas and so it's it's, it's building kind of that consistent man. I would just point out though that it's not necessarily growth company. I mean, if you look at the revenue was up six percent this last year, it's risen about seven and a half percent over the last five years and gross margins have risen a little bit, but still well below historical highs. Compare that to in video, which is kind of a player in the same space where were revenue. There is growing forty percent. So just want to say, you know these, these, these stocks tend to be cyclical. I'd be a little careful Amdi second quarter revenue for Dave and Buster's came in eleven percent higher than a year ago. Not a perfect quarter rod, but it was good enough to send the stock to fifty two week high. Yep, definitely a mixed bag. Some good, some bad. The bad is that same store sales actually fell two point, four percent. One of the good things was that actually was better than expected. One of those expectations games as you mentioned revenue is up nicely. Earnings were up nicely eighteen percent earnings per share. Also better than expected company doing better as they open new store. That's kind of what what helped the revenue pop it would if all things being equal with same sales down, if they didn't open new stores, you would have seen a decrease in revenue. So they're continuing to put up new stores which which are adding to the bottom line. Earlier in the week, they instituted a dividend which they now have a one percent yield. They put in a Sherry purchase program of one hundred million dollars. They raised guidance, so all in all a mixed bag. But I think it kind of leans towards a nice report. Should they be buying back one hundred million dollars worth of stock while the other is Asian, doesn't mean they'll execute it. You know the stock is I wanna say twenty two times forward earnings based on the new guidance, not not incredibly expensive, but I bet they'll be opportunistic. Coming up one. I Kana brand. It's driving off into the sunset. Stare at here. You're listening to motley four months quick shoutout to TD Ameritrade you're always on the cutting edge of technology. And TD Ameritrade prides itself on being ahead of the curve to their latest innovations, put their resources and services on the popular platforms that you carry and use every day. I've been using TD Ameritrade for nearly two decades and now to stay on top of the markets. All you have to do. It's a naval, the TD Ameritrade skill for Amazon, Alexa or message them on Facebook. You can learn more about their commitment to innovation at TD, Ameritrade dot com. Slash innovation. Welcome back demonic woman who still here in studio with Jason Moser, Matt arguing Enron gross shares of Kroger down more than ten percent this week after second quarter sales came in just a little bit lower than Wall Street was expecting. Jason. This seems a little bit like an overreaction. This seems like a pretty solid quarter. For Kroger, it feels like an overreaction. I agree with you there. I think the one thing that always remember what the space it's really difficult space in which to operate because it's all about low prices and you can see that play out on their margin line Corwin and quarter out. But I do think that Kroger actually continues to do a very respectable job in the space. And if you remember a little bit over a year ago, when we got the news that Amazon was acquiring whole foods, and then we saw all of the grocers in lockstep just fall straight down and and we felt like that was an overreaction then. And over time it's proven to be Kroger is still up from around twenty two dollars per share, win that news came out. So I think that the. The positives. I mean they're doing a good job and driving digital sales, fifty percent growth in the quarter of sixty six percent last quarter. They continue to push their private label brands in what I think is really encouraging their opening up distribution to international markets via Alibaba team all platform. So I think all only groceries, a very difficult space. It's a thin margin space, but Kroger is a big presence in it. Remember they also and Harris teeter. Interesting. They tried to acquire boxed a little earlier this year in boxed said, thanks, but no, thanks. We're going to keep on trying to do this on our own. So I think they're doing well. I think you're right. It was a bit of an overreaction. Well, and you'll see. Rodney McMullen and he's got a three year plan to really build up in particular delivery the ecommerce, and he seems like he's got a steady hand on the the wheel there because they're not deviating from that three year plan. And they're just in the first six months of it right now a year, right? Extremely Ford looking and also very, very transparent and communicated on the calls, varying courage in less than two weeks after unveiling. A new ad campaign featuring Colin Kaepernick Nike shares have hit a new all-time high. Mattie, probably time to remind people that Mark Parker has been the CEO of Nike since two thousand six and maybe give him the benefit of the doubt. I think so. I think I, I would give Nike the benefit doubt. I mean, I know there's a lot of hubbub about this capture Nick ad. It's create a lot of controversy on Twitter and on the news, and then it's got like there's a record, Instagram likes thing going on out there, but let me take you guys back twenty five years ago, Steve. Can you roll the tape. I am not a role model. I'm not paid to be a role model. A drink havoc on the basketball court. Parents should be role models. Just because that Dunkel basketball. Doesn't mean I should raise your kids. All right. So that was the that premiered in the summer of nineteen Ninety-three obviously that at the time there was no social media. So I'm sure there've been uproar about it, but Charles Barkley Charles rebound exactly. I mean, and and you know, that's a long time ago. Nike got a lot of, you know, there's a lot of hope about that one as well. Here's a number for you though. Thirty-three Chris. When you see when you hear thirty three in sports, what do you think about? Well, I'm a Boston sports fan, so I think Larry bird's eye due to, but also is also the number of times that Nike's market cap has increased since the summer of nineteen Ninety-three it's a thirty three Bagger since then. So just to make that comparison, Nike has has taken risks like this before and it's paid off and just look at the growth in the company since that controversial add twenty hundreds of me. I'm thinking that's a good front. Nine. The second quarter loss reported by Sears came in at just over five hundred million dollars, Ron since two thousand ten years has lost close to twelve billion. How in the world do they still have more than eight hundred stores? I wrote here on my notes, pathetic and big in Vig Vig bold print. I this is a night. I just go away. Go away. I mean comp sales down three point, nine percent, which everyone is saying is great because it's less than the eleven point nine percent from the first quarter. You know everything. Everything is just bad, but I'm going to give him. I got. I got to be an analyst here. The there is one silver lining, and that is the recent most recent months comp sales have actually increased three percent in July two point, five percent in August. So if you're an optimist and you think this is a trend and they're finally getting their act together by closing hundreds of stores and cutting costs by all means go for it, but catch. Fiat door, I would stay away well and you have Eddie Lampert who's running Sears talking about and for context, Sears has a market cap of around one hundred forty million dollars. He's out there talking about not just well, yes, we're going to be smaller, but we're also going to be more profitable. He's talking about buying back the Kenmore brand, which would cost somewhere around four hundred million housi- gonna make in what universe does not make sense of. The boy has a special committee looking on, and then they'll be go shop. Provision where other people will be able to come in and make make bids against him. If he was successful according to the board, he's been selling assets, closing stores, giving cash injections, anything he could possibly think to do to keep us afloat. Don't forget though there's over a billion dollars in pension obligations on this company as well, which which we tend to forget because we're mostly focused on the fact that they don't sell stuff, but the balance sheets a mess. Also, this is remarkable because if you go back fifteen years ago, roughly win. Eddie Lampert you know, took KMart emerged with Sears and you could hear every value investor in the world say, hey, this is this is great. I mean, yes, years as a retail business isn't doing very well, but you got real estate. You've got Kenmore, craftsman. You've got all he's going to be able to create all kinds of value from these assets. But I think the lesson here is if the core business itself is crumbling apart, I don't care what kind of other asset plays that you might have with the business generally, unless there's some kind of private equity, you can take a private. It's it's not gonna work out. Volkswagen announced this week that it is ending production of the beetle in two thousand nineteen. Last year. Volkswagen sold just over fifteen thousand beetles in the United States, which is honestly, that's about fifteen thousand more than I would have guessed. What strikes me about this story, particularly Jason in relation to Sears is if five years ago you had said which one is going to be gone first Sears the Volkswagen beetle, even though I didn't have high expectations for the Beatles. I still would have been on that Sears is going to outlast the beetle. That does seem odd because I mean cars haven't really changed all that much. I mean, yeah, we're in the age of tesla now and we're moving over to the electric vehicle Brad's, but it hasn't changed like the face of retail is changed and tell you a Sears. They're on the way out for sure, but, but to see this bug is not going to be any more. It's just it's, it's the end of an era that sets takes me back to my child and from a business standpoint, I understand why Volkswagen is has made this decision, but I think there's a lot of emotion a lot of fun of for the beetle. And for this we turn to our man behind the glass Steve, Steve. When you have heard that the beetle was going to cease production, what was your reaction on a gut level? Kind of a bummer. I mean, I remember writing as a kid in an old one and then the new ones came out around, you know, two thousand ninety nine something like that, and it was exciting, the Beatles back and how it's calling the VW bus. The the hippy bus back in the day that's completely gone to. They make a lot of conic things that eventually. Go, they got to bring the bus back to bring that they are bringing the bus, oh night. Are we ready to tilt over Turner? Earner clever ending on a positive note. All right, guys. We'll see you later in the show up. Next. We're talking media and entertainment with analyst. Tim Byers stare at here. You're listening to motley fool money. The motley fool money. I'm Chris hill on the line is Tim Byers. He analyzes the media and entertainment industries for the motley fool. And he joins me from Colorado, Tim, thanks for being here. Great to be back, Chris, love being on. Let's start with Apple's big events. Bigger phones. More expensive phones? Yeah. What's your headline for the event? The phones don't matter. Why are we ignore airing Apple's next big thing. I mean, really this, the the, the phones we have entered the incremental era of apple Inc now that they're a trillion dollar company, we can expect that you know the the Microsoft of thirty years ago, which was the next point upgrade is now the new apple. That's not to say that that's a bad business. I mean, they are raising prices. They have great brand. These are great products. You know, the three big phones the the excess max, which is if you want a phone, that's almost as big as your computer. You can get that one at it's ten ninety nine. Then there's the apple, you know the the iphone excess. So the max is the bigger one than the excess, which is essentially the same phone loss of functionality just a little bit smaller and others the accents are, which is like the cheaper version of all of it. It's like, you know, the everyman's phone. If you want an upgrade and you don't wanna quite spend for the iphone x. that's the one that you get. They're all really good, and it's going. To be a good business for apple because prices are going up. But the new apple watch is grappling headed, and I am a little mystified as to why there's no coverage of that. Because when you think about the phases of apple, apple was computers that it was phones and it's going to be wearables and I'm not just making that up. That's already happening. They're selling watches. They have, you know, people have brought in from the fashion industry to design the next phase of apple products. So we're apple is moving, you know where they're skating to. The puck is going that way and where they're skating too, is whereupon devices much smaller, not iphones anymore. If there was a signal from this conference, it said iphones are going to be around forever just like max, but they don't quite matter as much as they used to, but in terms of the money, I'm yet I want to go back to your original comment of the phone still matter. I mean, this is a cash cow for them. And will. Yeah. And the iphone appears to be the one piece of consumer electronics that continues to be the exception to the rule. The rule being when it comes to consumer electronics costs go down over time, and that's true for televisions. That's true for so many things except for this one thing, Tim. I know it is amazing, and that's because apple has a Briton a premium brand, and it is it is still a relatively new product in some parts of the world. So it does have that going for it. So you know there is there is something to save for that, but you're right. It is a cash cow. It's just something like, you know, the MAC was for years after apple sort of found its footing and created an ecosystem around the ipod Maxine started spiking and for a time there, it was only apple that was growing share of desktop, laptop, computers, and. Everything else was falling, and that was the, you know, that was the cash cow that was funding the development of new iphones. Now I, what I see is that the iphone is the cash cow that is funding the next phase which is where bowls computing everywhere, and nobody has more dedicated engineers to making stuff small and beautiful that people would want to actually wear than apple. I don't think you'd get that in a in a windows device even in an Android device. But I think apple could pull out all of us apples role in the entertainment industry a minute. But tesla has been all over the news lately. And you've mentioned that an early warning sign of Tesla's problems may actually involve apple. Yeah, it's very interesting right that you have a few years ago. I think it's two thousand thirteen that when apple started messing around with who we gonna partner Rhys in the auto industry because you know, music was chain. Jing you're getting things on demand. The ipod was very, very popular. That was another cash cow product for a long time. And you think that the brand that apple would partner with would be tesla. It's just a natural fit and they chose Volkswagen, which was a little bit shot king and they're still working with Volkswagen. And you know, it's like apple smelled the stink at tesla of years ago and said, I'm not sure that we like what's going on here. I, I'm not sure that's true. I still think tesla sued in an interesting company. I think there's a lot of things broken there right now, but I would have thought that was a natural partnership when they had the best chance to partner. They didn't. And that was apple choice. And that tells me something. So I, I think we've been seeing this coming for a little while move onto the battle for the living room AT and t. his complete. Ended its acquisition of Time Warner an earlier this week AT and t. CEO Randal Stevenson was talking up his new portfolio of content and said that if Netflix is the WalMart of director consumer streaming than HBO is Tiffany and he, he took some heat for that because of course, if you're just looking at two standalone companies, WalMart is so much bigger than Tiffany. But I think directionally, he probably wasn't too far off in terms of the analogy. What did you think I is ludicrous. I think it's absolutely well, here's why it's, you know, in terms of like the technicalities of the analogy, yes. Okay. I get what he's trying to say. H o. is a bream premium brand. It is a brand leader. It's always showing up at it. You know the award ceremonies, it is brought out more critical programming and brought us more, you know, amazing original content than anybody else. HBO did set that standard. Okay, that's fair. There's a big problem with his argument, which is that HBO is a content creator and has no distribution power whatsoever zero except for the what they're doing online, which is starting to get a little bit of traction. Whereas net flicks has customized content for every country they're in and they're in one hundred ninety countries and they have a one to one relationship with every customer in those one hundred ninety countries that is extraordinarily. So I know he's getting at, but in terms of value. And if you're trying, if I'm an investor and trying to say like HBO is way more valuable in net flicks that is ludicrous though ways, right? So where is YouTube and all of this? And you can use a retail analogy if you want. But YouTube does seem to be. The x. factor when it comes to streaming services. Because I, if you put a gun to my head, Tim, I don't think I could name a YouTube show. Yeah, dough and either. But can you name the number of things that Amazon dot com you know cells. I mean, I could name some things only because I know that they're things and I know that Amazon probably hasn't because Amazon has everything. So I could name some things like music videos, TV shows at old shows and because YouTube has everything. I think it's probably on YouTube, you know? So I kind of compare Amazon and YouTube. I think YouTube is the catchall. It gets everything and it gets it for a pretty low cost, and it gets to you pretty fast, and you know how to use it. And so it's very familiar. YouTube has stickiness that I think other services don't have because it's been around. A while and people just know how to use it and not only that, but you have younger generations. They use it to consume stuff in like thirty second bits. And so it's just a permanent part of the infrastructure. Let's go back to apple because when you're on the show, if you months ago dapple was close to a deal for an animated feature film. They've completed that deal. They're acquiring television shows. Are we going to see a streaming service from apple in two thousand nineteen? Because Lord knows they've got the cash to make a big push on something like that. I think we will. I think we'll least at the very least we will see a much more aggressive at interesting effort in in consumer devices that sort of everything in your hall. Like I think apple the next thing. You know, like wearables wearables goes into home, like it's just, you know, apple is going to surround you with electron IX and be pervasive in your life. And so, yes, I think that's going to happen. I think it'll come through apple TV and apple will be an aggregate or of stuff. That's what they're really good at by the way. You know, apple and what Tim cook is really amazing at is bringing a lot of things together bringing processes together 'cause river. He was. He was Steve Jobs. Number two guy. He was the chief operating officer if anybody knows how to squeeze efficiency, Nick things that aren't supposed to work together work together. It's Tim cook, and I think he's doing the right thing in terms of, you know, putting resources where you can have the most impact. He can have a really big impact in Hollywood and he can do something that the rest of the players really can't. He can control distribution in a way that the Amazon and Netflix can't and create something that's unique because he got apple TV. So yeah, I think we're gonna see it. I think it will have space in adopt rate. It'll be a niche operation to start, but athletes so much cash. How could you bet again. Them and for you go, what's a stock that you're excited about these days? One that we have not talked about yet. Okay. Well, we talked about the company just couple minutes ago, but I really liked the stock. I'm going to bring it back around and say, Microsoft is cool. Again, Microsoft is arguably cooler and doing more innovative stuff than apple and watch. I, yeah, I never thought I'd ever say that. But I mean, Microsoft is the company of Dr evil style freaking underwater data centers that operate on salt water. I mean, this is intensely creative and really int- stuff, and it's the home of Git hub. Now it was a few months ago that Microsoft made the winning bid. They beat out Google to get. You know, the home of most software developers get hub is a place where software developers gather the share projects. They share workflows. If you have a problem that you. You need to solve chances are. If you're a developer, you'll go check it hub z. of somebody's posted something up there and Microsoft was able to convince the founders that they should go with them. Instead of with Google. I thought that was an extraordinary thing. And then I looked into it a little bit more. Microsoft happens to be the biggest contributor by far to get hub, they're doing a lot more in development stays yet. You know, some of our listeners might remember a sweaty, Steve bomber dancing around on stage, saying developers, developers, developers, developers, a really is all about developers again at Microsoft, and they're creating a lot of value. The stock is fairly priced citing and Adela has changed that company for the better and I love the stock. So just to be clear when you said Microsoft is cool again, did you mean to say Microsoft is cool again for software developers. Yes, I guess that that's fair. That is fair to say. I'm apple guys, so I'm not really made up much of a windows guy even though I buy us windows regularly for for the job. But I will say that sufficient talking Lee enough Microsoft is making cool stuff. And the people that are ignoring this company right now are ignoring one of the great stories of the next ten years. Can buyers covers media and entertainment for multiple rule breakers and supernova tempt always good to talk with you. Save here. Chris, take care coming up. We'll give you an inside. Look at the stocks on our radar, stay right here. This is multiple money. All right. Before we get to the stocks on our radar, I don't know the last time you bought a mattress, but if it's been a while you gotta check out casper their mattresses are designed by humans for humans. The original casper mattress combines multiple supportive memory foams for quality sleep service with just the right sink and just right bounce. And they make buying a mattress easy. You order online, it's delivered right to your door in a compact box, free shipping and free returns in the US and Canada, and it comes with a risk free one hundred day trial. Think about that. You can sleep on it for up to a hundred days. Considering we spend a third of our lives on a mattress. It's so important to actually sleep on it before you commit. And that's why casper gives you one hundred nights to try it out. We've got people here at the motley fool who have bought these mattresses and love them. It's available in the US Canada, and now the UK and you can get fifty dollars towards select mattresses just by visiting casper dot. Com slash fool and using the promo code fool at checkout terms and conditions apply. That's fifty dollars towards select mattresses by visiting casper dot com. Slash fool and just use the promo code fool at checkout. Wonderful. Nothing, beautiful mustache as always people on the program may have interest in the stocks. They talk about in the motley fool may have formal recommendations for against Saddam buy or sell stocks based solely on what you here. Welcome back to motley fool money, Chris hill here in studio. Once again with Jason Moser met ARGUS singer and run gross before we get to the stocks on our radar and Ron, even before we dip into the full mailbag. Yeah, I have to say that we're hiring here at the motley fool Yar. We've got many positions open and you can check them all out at careers dot, full dot com. Two words pizza day. Two more cake day. A lot of other benefits, careers dot, full dot com. If you're interested, our Email address is radio at full dot com. Question from Matt Reilly who writes, I think I may be overweight in one of my current stock positions, but I'm hesitant to sell and reinvest the funds somewhere else because the stock has been on such a chair and the future continues to look. Good. Have you ever been in this position? How do you wait the costs and benefits of moving money from one position to another love the show, keep up the good work. Thanks for listening, Matt, great question. Ronald just start with you. Have you been in that position before? We have not not as many times as I'd like it's a good. It's good to have a good problem to have. So a couple of things in his statement, the fact that the stock has been on terrorism relevant, but I like what he said about the future. Concentrate on the future. One hundred percent of the future returns of the company will be based on the future, not the past. So give give thought that relative to where you think the stock in the valley. Is now one other thing I hate for the tax tail to wag the investment dog, but if it's an anon- of retirement account and you have a huge capital gain bird in that would come from selling the stock, you do want to account for that too, in your analysis yet definitely account for the tax implications. But chances are if you feel like you're overweight, you very well may be one way I like to look at this is you know if the future still bright, I wanna hang on a shares of this company play the house money concept, right? Sif. You can't sell enough shares to recoup your original investment. You keep the remaining shares for free makes it a lot easier to sleep at night and you got a little extra capital to deploy elsewhere. But as Ron mentioned yet, definitely pay attention to the tax implications will Matt. When I hear the words, the stock has been on such tear in the future, continues to look up to mystic. That makes me think the stock you're looking at is probably a flower, and it's David garner always says, water, your flowers, trim your weeds. So if you see opportunities elsewhere, I would strongly strolling. Consider selling your losers. I also saves you on the taxes. All right. Let's get to the stocks on our radar and our man behind the glass debrief is going to hit with a question run, gross. What are you looking at this week? I'm going to go back to McCormick and company. K c, I know a favorite of Jason's a manufacturer of spices. Herbs seasonings stock has been on a tear this year up thirty percent, but I still like it at twenty five times forward earnings market leader by far with a twenty percent market share love their recent RB foods acquisition with broadened Franks hot sauce who doesn't love Frank's hot sauce. If you're a buffalo wings fan, paid a dividend for ninety four consecutive years. McCormack ninety four consecutive years St., broader question about McCormick. What is your favorite spice Ron. I make a lot of chilly, so it would be a Kumon. It's not pronounced human is now Jason Moser. What are you looking at? Well, this rarely happens of Ron, and I did not put our heads together on this one, but I too am going with a while. Hey, see, you know, I was a little disappointed in myself. A few weeks back because I realized that I talk about this company all the time yet I owned no shares, but Chris, that has changed. I opened up a position in this company dividend aristocrat. I love how the Rb foods deals working out. Earnings are coming up in a couple of weeks, and you know another side note heroes, making some ribs. The other night, seasoning them up with his dizzy. Pig dizzy does now dizzy. Pig is just based out of Manassas Virginia here I can't help, but wonder just small little owner operated place. I can't, but wonder if maybe McCormack wouldn't be interested in some point because they have one heck of a brand and they make a lot of really good products. Check it out, dizzy pig. I'm in favor of that acquisition as long as the keep the dizzy pay that would be that would be crossing the acquisition right? To really keep that brand and spread it Steve. Do you have a second question according to govern how take the favorite spice questions? Steve? I do have a question. It's not that one is, is there really room for two McCormick recommendations or spices that big of a deal that we care this much to recommend it? Hey, listen, ninety percent of the flavor, ten percent of. Cost, and I'm going to give you a freebie here. Steve. I just found the merits of putting old bay on your popcorn. Give it a shot, maybe a cold beer. You may be later quick follow. Are you Kumon or cumin? I have always said cumin, old habits die hard. I think we're going to get some emails to radio at full dot com. As I say Cuba to for radio, I changed. I watch a lot of diners drive ins and dash and they say human in Kumon. I think both are acceptable like data and data. There you go, Matt, Arkansas, or what are you looking at? Well, like McCormick. I know everyone's sitting at this table or behind this glass has used this company multiple times. Docu sign ticker, DO, see you. I feel earlier this year open for training and thirty eight dollars a share shot up quickly, almost seventy now back to around fifty five. I think this is one of those can't miss brands making easier for individuals and corporations to transact legal agreements, great subscription model, huge market opportunity. Docu sign. Steve question about Dr sign is the Fokker signature really necessary. I mean, clearly a dig dig. Digital signature. I'm not using a pen on my screen. Come on. We're better than actually like it because my, I don't like my signature very much. So I kind of like when d'aquin uses their signature to stocks, you've got to add to your radar. I think I'm going with spots way to play the Matt ARGUS singer, Jason Moser, Ron gross guys. Thanks for being here that's going to do it for this week's edition of motley fool money. Our engineer is Steve rhino, our producers macrey on Chris hill. Thanks for listening. We'll see you next week.
223: How To Invest When You Have Little Money
"Walk in the money for the rest of us. This is a personal finance show. It's on money, how it works, how to invest it and how to live without worrying about it. I mean, host David Stein. Today's episode to twenty three. It's titled how to invest when you have very little money. Recently got an Email from a listener who wrote my portfolio is very, very small and worth only a few hundred dollars. I plan on saving a higher percentage of my paycheck to put towards investments, but I can't help, but wonder if it will be enough to make much of a difference. I have an account with TD Ameritrade, but I don't have enough capital to really do very much with it. How can someone who is starting very small, either maximize the usefulness of what little resources they have or acquire more capital to make investing. Easier. Today is really, there's never been a better time to be an investor. There are so many very, very low fee options that take very, very little money to get started in this episode will explore some of those options and later in the upper sewed, I'll give some portfolio examples with specific ETF in funds that you can use based on where your account is. Now, what are the options when you have very little money. The wet end up being a relatively large fee when when in the scheme of things is commissions. So when I bought one of my first investments longtime ago, probably and then in the nineties, I guess. The, I probably paid a commission of upwards of forty dollars and as a percent of what I owned or in terms of the investment I made that that would be a very large percent. But now. Brokerage firms have commissioned free exchange traded funds. Exchange traded fund is a vehicle that you can invest in a segment of the market, convincing the entire market v. t it's the vanguard total stock market index fund. You invest in thousands of securities that make up the global market. And so van guard has eighteen hundred commission free ETF's exchange traded funds that you can buy and not pay a commission. This particular listeners with AD TD Ameritrade they have three hundred commission free ATS available. Fidelity has two hundred and forty commission free exchange traded funds. So if you have a small account with only a couple of hundred dollars, you can still invest in a broadly, diversified stock and bond portfolio. In addition to traditional brokerage, there's Robin Hood, which is an app that also all trades on Robin Hood. Our commission free. So you can buy any t.f or individual stock for that matter with the robinhood app. And then finally, fidelity recently announced that there are offering. Commission free purchase of some of their mutual funds, including. Their funds that have zero expense ratio that most most mutual funds index funds or exchange traded funds. They have. A small fee to manage the assets because there's professional money management. There can be very, very small, perhaps point zero, four percent. Appoint eight percent, but fidelity is the first one to offer completely no fee at all. In terms of managing asses, zero percent expense ratio. So that brings up the question. How is it. That brokerage firms such as Robin Hood or fidelity in this case can make money and survive. If they don't charge any commissions. And potentially no expense ratio. When the case of vanguard and fidelity TD Ameritrade they have other products and funds. And so some extent that commissioned free trading or zero expense ratio funds are are lost leaders, loss leaders in the sense that. The willing did not make any money at all on that particular aspect of their business because they have other products. Vanguard, infidelity have advisory services. And so the idea is that a small investors yet maybe they're not making much of anything, but as counts grow. Investors diversify into may be other heat Yasser funds that do charge an expense ratio or sign up for their visory service. Then they're able to make money that way. But even if their customers don't invest in anything else except for the commission free funds, they're still there's other ways that brokerage ges can make money. One is securities lending. When investor shorts. A particular stock or ETF shorting means you benefit from the value of the security falling in order to do that, you actually have to borrow the shares and sell them in the market. And then as if the security falls, then when you buy the security back and return it from the individual, you borrowed it from, then you make money, but those shares need to be available to borrow and that is what securities lending is the brokerages facilitate all that you don't have to go find on shares to borrow. But. The the brokerage firms. If you have shares in your account, they can be lent out, and there's a fee that the brokerage firm receives for lending out the securities and facilitating the borrowing shares. Brokerages, including robinhood, make money on margin accounts. This is not something I recommend, but this is where you borrow money to basically borrow and then invest the funds. And so you're paying interest on those borrowing in essentially you're leveraged up in terms of your investing, but brokerages can make money that way. Robinhood dump something quite unique. Typically with a brokerage firm, like I'm an account at Schwab. I, they have a sweep money market account. So my cash balances. Are invested in a money market mutual fund. I don't have to make the tray. We talked about this a couple episodes ago in terms of how do you invest your cash. But they invest it in their paying. I think a yellow one point, five percent. Robinhood doesn't invest cash balances. So if you have cash in your robinhood account, you're not earning any interest, but Robin Hood is they're, they're investing that cash somewhere and they're earning that interest in. So that's that's another way robinhood makes money. Another thing that brokerages is due to make money is they get if you place an order with Robin Hood, the -delity TD Ameritrade they're going to route that security to a another broker or what sometimes known as execution services that that execute the trade. A large one is citadel execution services. I was looking at all brokerages have to file a report with the security and Exchange Commission called a six, six report. They do a quarterly in it shows where who executed the traits for them and they receive compensation for that. So sit it out. Execution services is an example of as I went through the reports of fidelity vanguard, Robin, Hood, TD Ameritrade citadel was, was the leading execution services that they are used. What was interesting is van guard was only brokerage that didn't get payment for order flow for directing trades to one of these brokerages that would actually execute the trade. Most of the other ones they got paid vanguard does receive eighteen cents per order for options trades that the direct. But for plane up stocks, they're not receiving compensation. The other brokerages are fidelity is receiving compensation TD Ameritrade. Now they list. What's interesting is they listed as per order. It's about three one hundredths of a penny, and they break it down by orders, went to orders for securities on the new York Stock Exchange orders on NASDAQ. Was interesting as Robin Hood. Quoted their price differently. They get two hundred and sixty dollars per one million dollars worth of order flow. And so it was hard to compare one brokerage from the other, but you have to recognize that. With the exception of vanguard. These brokerages have very low commissions. So fidelity Schwab TD Ameritrade and they're charging four dollars and ninety five cents for commissions. But even for the commission free ETF's as they direct them to these various execution services, they're getting a little bit of payment back from. These these essentially other brokers. Now, the responsibility of the brokers such as fidelity Robin Hood is to make sure that the execution is done at fair prices and done quickly, but and they're very efficient. Firms like citadel. They run absolutely huge volumes of trades and they can do it very, very cheaply. And so we still get a good price. But the fact is the brokerages get a little bit of payment back. Now get another Email from a listener that was asking specifically about Robin Hood is is what happens if they go bankrupt. Joy, lose my money invested in Robin Hood or one of these other brokerages. And you don't one of the rules. It's it's that for the security Exchange Commission, it's called rule, fifteen, c, three, three. It's a customer protection rule. And brokerages have a requirement that keep client assets separate from corporate assets, things related to just running the overhead, running the brokerage. That's always segregated. So you're protected that way. You're protected in that brokerages have what's known as the net capital rule. It's rule, fifteen, c, three one. Were there mandated to keep a certain amount of capital that's unencumbered. In case they go bankrupt. Another thing that's available is insurance. It's it's from the securities. Investor protection corporation s. IPC it's a nonprofit industry membership organization that provides. Reimbursement to customers in case a brokerage firm defaults becomes insolvent and it protects up to five hundred thousand dollars for securities. And cash or two hundred fifty thousand. If only cash, there's there's several layers of protection. So you don't really have to worry about April bridge going bankrupt. If it does happen, there's a couple of things usually because the cancer segregated another brokerage will come in. Invite us assets. For example, e-trade recently bought or earlier this year in two thousand eighteen, but one million brokerage accounts from Capital One investing Capital. One investing was started back in way back in nineteen ninety six. It was called net stock drac. And that was purchased in two thousand seven by I n g direct and in two thousand twelve Capital One. But I n g so they capital and had this brokerage. Actually had an account there for a while. In because I I used as an example back when I did a course for money for the rest of us seven under the call investing in seven steps. And I talked about had a basically open up a brokerage account, and I just use that as example. And you just bought one share stock, but I closed the account now. It's been sold. E-trade paid one hundred seventy dollars per account. For the for these assets. And so you woke up, you had an account of Capital One, then it would be at e. trade. Now the other thing you can do now in this case, Capital One investing didn't go bankrupt. But if a brokerage went bankrupt counts, potentially would be sold to another count, but is e irrespective of that if it comes a time that you've, let's say you're using Robin Hood, which you not able to buy bonds and Robin Hood. You can buy Bondi TF's exchange fund be, can't buy straight up bonds, so it's not a you don't get as many services as you do. If it was a fan guard or fidelity TD Ameritrade or Schwab. So let's say you want to transfer while you can do that by essentially it's it's a service called a cat. And you. It's just a cat. So stands for automated customer account transfer service. And you just transfer the securities to your your new brokerage. You work with the two, but it's very summit standard. Typically, there's a fee seventy, five dollars. That's what Robin Hood charges. It's kind of a standard fee, but that's that's how it's done. So there's. If there's some bankruptcy there or for any other reason, you can always transfer your securities out. You don't have to sell them beforehand. You can transform. They keep the cost basis and it's done. As a new investor or an experience investor, I'm believing having investment mentors, individuals, we look up to a read about how they invest. We read their books, probably don't know them. Personally, one of mine is Howard marks. He's the co, founder of the investment firm oaktree capital used to invest with them when I was a professional investment advisor. His book is the most important thing, and I was recently reading a summary of the book on bleakest which is the sponsor of today's podcast. And he teaches some very important principles in that summary, it mentioned that investors put together actually make the market, and so it's investors and the emotion of investors that create sicko patterns. And there's times when investors panic and you can pick up assets at more attractive. Prices, and that's why one of the things he teaches to take the markets temperature understand the present situation. So I read this summary on Lincoln's. I've read the entire book, but sometimes it's just helpful to to look at the summary. So blinking is only app. It takes thousands of the best-selling nonfiction books and distills him down to the most impactful elements to read them or listen to them and under fifteen minutes all on your phone. So they're constantly curing its way to expand your knowledge. Five million people use blinkers to expand their minds fifteen minutes at a time, and you can get started today. The special offer just for you. Go to blankets dot com. Slash David get a free seven-day trial. That's blink b. l. i. n. k. I s. t. blinking dot com slash David to start your free seven-day trial. You can cancel anytime. That's blinking dot com. Slash David. Now I've mentioned a number of different brokerages, vanguard, fidelity TD Ameritrade the robinhood app. Mentioned that commission free commission free TI, perhaps some zero fee index funds, and I thought, well. Maybe I should just start from scratch and assume I have no money. I have one hundred dollars. How would I invest it? I just wanted to very simple portfolio money for the rest of us. Plus we have model portfolios, but they have multiple ETF's. They're not to ETF's portfolios. I do include some examples if you have an account of and guard only fidelity only at cetera. But what if we wanted to make it even simpler? Just a few ETF just to get market exposure. And so the way that I've done this, I looked at all day look, the Robin Hood, TD, Ameritrade in vanguard. I chose a global stock ETF. Or fund combination. And then for the bond side right now, there's always a risk of rising interest rates. Federal Reserve has been raising short term rates, so you can get some attractive yields with short term bonds and so I- selected short term bond option and selected inequity option to give you a cheat sheet that you can. If you're a member, my free insider's guide, you'll get this. You'll have already receive this PDF document that list out those four brokerages list out. The example ETF's are funds for the equity and fixed income show the expense ratio. You can get that if you're not a member, my free insider's guide you want that cheat sheet right away. You can just text the word if US based listener texts, word portfolios, that's plural portfolios. To the number four, four, two, two, two. You put in your Email, you'll get that right away or go to money for the rest of us dot com. Sign up for my free insider's guide and you'll get that. Then the first Email I send you that free insider's guide is where you get all the show notes sent you weekly and other valuable content that I produce on a weekly basis that only goes to insiders members, essays and other things such as this portfolio example spreadsheet. So as I went through the options, let's start with vanguard, vanguard has you can buy their ETF's with no fees and one of the the funds that they use. Or that I use, it's in our motto portfolio. It's the vanguard total stock market ETF that tickers VAT. That's a great option for vanguard. And then if you have the Robin Hood app, that same fund is a great way to get stock exposure for TD Ameritrade for stock exposure. The best option I could find was the is yours MCI all country world ETF the tickers act. We also gives you essentially global stock exposure expense ratios a little higher. Zero point three, two percent VAT from vanguard expense ratio. Right here. I have written down zero point, one percent. It might actually be zero point, eight percent. I'll double check that but very low. So that's the option here for TD. Ameritrade fidelity introduce two zero fee index funds that fidelity zero total market index fund tickers z. RO x. and that fidelity zero international index fund tickers f i. LX no fees. Now they don't have global wine. So if you want to mimic the global stock market. You would essentially since global stock market is fifty, six percent US. You'd put fifty six percent in the fidelity zero total market index fund and forty four percent and the fidelity zero international index fund. Then, I mean, you can start this because there's no fees. Or no commissions, no minimums. In terms of those funds on fidelity start with ten dollars and you can get equity exposure. So it didn't matter that you don't have much money. There's a way to get equity exposure. On the bond side. The best fund option. I could find for fidelity. For zero commission was the, I shares treasury floating rate bond fund tickers t. f. l. o. for the bonds, we're looking obviously the expense ratio. We want to look at what the yield is, and then it's interest rate sensitivity or duration. The longer, the duration the more the fund will potentially fall in price. If rates rise or appreciate and price if rates falls, we were looking for alter short-term bond options. And so this is yours treasury floating rate bond fund. It's floating rates. So the the, the, it adjust, the rates adjust as interest rate goes up. So there is no. The ration-. The duration has zero point a one. And it's yielding SEC yield. Which is essentially its yield to worst. What you'll get less fees is one point, nine, three percent. That's a forward-looking. Now, one of the I got some feedback from. The episode I did on cash, I gave some examples of exchange traded funds. And the listener said that's I gave the SEC, which is forward looking. If you look backwards in time that return, you won't see a one point, nine, three percent return. Because the Federal Reserve has been raising rates this year and last year and as as rates as they raised their policy rate yields on shorter term bonds are going up to the SEC is forward looking. It's not back back forward looking. And if the, if the federal have continues to raise rates with their anticipated, the do your return will be higher than one point nine, three percent. So that's the option for that. I saw as an example for fidelity Aisher treasury floating rate bond fund t.f fellow. For Robin Hood. It's the PF I mentioned a couple of episodes ago when we're talking about cash option's. The is shares alter, short-term bond. ETF I c s h now. I didn't see that option as one of the commission free options on fidelity. That's why we went with TI fellow ICS h expense ratio point. Oh eight percent has a high yield. That's the yield two point five percent. It's interest rate, sensitivity of duration. Zero point three, nine. For TD Ameritrade a different. Option from ishers because again, I didn't see the one the l. l. or ICS h listed as one of the commission free ETF now maybe I missed it. Maybe they've added. But in this case, the example would be the ice share short maturity bond ETF and a our expense ratios little higher zero point, two, five percent. SEC owes two point, five, six percent. And the duration zero point, four, eight. Finally, for vanguard. Unfortunately, there was no real good commission. Free ultra short term Bod ETF. The shortest I could find is the vanguard. Short-term treasury ETF ticker is v. g. s. h. expense ratios point zero, seven percent. The SEC is two point six, three percent. But here's the kicker. The duration is one point, nine, three. That means if rates go up one percent over the past year, this this fine potentially could fall. One point, nine percent, the price now you wouldn't lose money because you're gonna get that higher yield. But it would underperform a true alter, short term Bondi to you have to has a shorter duration. But again, I couldn't find maybe I overlooked at the constrain here. We are looking at a way to invest that you didn't have to pay a commission to get in. So you could invest ten dollars. So there wasn't a minimum. There was no commission that was kind of the constraint and so that those are the examples they came up with. And again, you can get those by being a member, my free insider skied or and you can text the word portfolios. The number four, four, two, two, two. The bottom line is I don't think a lack of money is an excuse not to be able to invest anymore. Ten to twenty years ago. It was you needed to have a thousand three thousand dollars to meet the minimum. For. An index mutual fund. You needed to. The Commission's for exchange traded fund were much higher. So if you're the only at twenty five dollars invest in, you paid twelve ninety five for commission and you wanted to sort of invest a little each paycheck, just didn't work, but now you can. And so there's options. There's options with Robin Hood app option with vanguard, fidelity TD Ameritrade, and the other broker in talking about all the other brokers brokerages out there, but Schwab same thing, they have some commission free t. s. so don't use a lack of money. Exodus cubes instead just get in the habit of saving and investing establish your individual retirement account, which is tax deferred or a taxable count and begin the process can start with a couple of funds or ATS. Then as you learn other asset classes, you can add to that. And that's how you learn to invest, get some investment mentors, but don't let a lack of funds stop you. You can invest with. Ten dollars to start out. It's just starting. So that's episode to twenty three show Notre money for the rest of us dot com. Everything I've shared with you in this episode for general education. I'm not considered your specific risk situation. I've not provided investment advice, simply general education, money, investing and economy ever. Great week.
Joe Ricketts on the Future of Ameritrade-Schwab
"Shop WOODHOUSE MAZDA I today experienced the woodhouse difference from shopping to submitting your credit application. You can do everything from your couch and with available pick up and deliver. You can get your perfect new car without ever having to leave your own home. So fine year next. Mazda at Woodhouse place Mazda Dot Com or what House Mazda Dot com today or visit one of our two convenient locations at sixty six or eight hundred, forty, four, thousand jobs to shop our showroom or take a test drive today. Taking your car buying experience easier. This is what else Mazda pleasure to have joe records with us for a few minutes this morning founder of Td Ameritrade, you know the news. Was announced last fall the acquisition by Schwab of TD AMERITRADE and. it's official. Now the closed just happened and we WANNA get a little more insight into what lies ahead Mr Records Good Morning. Good Morning. It's a pleasure to be on your show. It's great to have you with us and I I. Remember. We. Talked had a chance to chat a little bit off the record when this was announced late last year and you told me at that time. you believe not only would what a? Strong presence remain but it it it may grow. What can you tell us about the future for td ameritrade folks in Omaha. Well. Now that it's completed, certainly a pleasure to talk to you and for the next ten or fifteen months the big where the integration of the two companies to achieve the economies of scale. Is GonNa take place now the people most experienced that that type of work. Are The people that have worked for Ameritrade Ameritrade has done a number of mergers whereas it's really something that is quite new for Schwab. So I think the the big leaders, the big effect in having all that happened is going to come from the executives and the people that Ameritrade. But you know I I'd like to I'd like to go. Really, Kinda to the beginning the overall environment First of all the United States is the most powerful economic engine in the world, and that economy is fueled by securities industry. And at one time Ameritrade was the largest brokerage firm in the world relative to number of trades for I. Don't know what it is now, but certainly, it's still one of the largest. The important part of making all that work is Omaha Omaha. is very comfortable convenient place to work in live. It just really is one of the. The nicest places in the country. And the second thing is the people you know Maha and Nebraska have a good work ethic. You know they're hard workers, they're smart they're intelligent. Well. Educated and as a result ameritrade in that multi-storey building that Green Pink drink. Belly. Pale Green building. And what now close to the middle of Omaha is where the major part and the center of all that processing takes place. And processing securities traits is a sophisticated and complicated process. And we have one of the largest. Subjects, places of that right here in Omaha and it it. The people are, what made it work they're efficient and effective, and they keep the cost of operations very, very competitive, a big asset. This asset is not going to be overlooked by the management of Schwab. And the third thing is Schwab is moving our headquarters from San Francisco to the Dallas. Fort Worth area. Now most of the people that work in that office in San Francisco are not going to be moving. To the, Dallas Fort Worth. Area. Which means the processing takes place right here. is going to be important to the ongoing functioning and future of Schwab. So this Merger or more appropriately the purchase of Ameritrade by Schwab. It's good for shareholders. And I'm GonNa give you mile Pinon that it's GonNa be good for Omaha in the numbers of employed people that are gonNA end up working for Schwab? The efficiencies and the effectiveness going to allow this new combination to achieve the economies of scale puts this new company in a different position in the securities industry relative to competitors. If, it's managed correctly that should fuel growth. That growth is going to need people. One of the most important parts of all their processing is going to be right here in Omaha. So I, think. This is. As a tribute to the people that work for that company. Going to be a good thing for Omaha. So I think not only are there jobs still going to be around ten years from now I'm GonNa. Thank ten years from now there's going to be more Schwab jobs. You Know Maha that than there are right now. Now I'm not on the inside I haven't been part of Management for over twenty years and I've been off the board for about ten. So I'm on the outside looking in, but that's my vision of what's going to happen here. We'll still you you insisted. I recall Henry Corridas wrote a long article about at the time on language and and the agreement that would help at least to ensure that there would not be large layoffs here on all Maha and this is really about a relationship isn't it Mr Reagan's you and and Charles Schwab I had respect each other, but then became friends and so that this doesn't have exactly the force of law but you trust that this will be the case, right? I I do I do yeah. I do like Charles Schwab. a man of integrity and I have a lot of respect for ability I would have preferred. That AMERITRADE. But of course, that's not what happened I hate to see the AMERITRADE brand go away. But I know what benefits are gonNA come from this transaction and I know what? I can really kind of depend on as an attitude on part of Schwab. Well this should be good news for all Mohawk. employees from what you know. How many are here by the way? Do you know fan? The AMERITRADE has about twenty, three, twenty, four, hundred employees in Omaha. That's significant. That's significant. It is significant. And the work that they do is significant I mean when people drive by that multi-storey Pale drink, they can look at it with respect. And really kinda proud pride of what goes on here in town with regard to this is in the securities industry. I'm just curious before we run Mr Records about something else, and that is as Courtney Donohoe just. Reported on the money minute a Lotta people are nervous about what might happen in this election and they're running away from securities into into safer harbour is this a particularly challenging time? For the Securities Trade Industry. Yup Certainly, certainly certainly as I just said, we have one of the most powerful dynamic. Industries in the world by far. And that's because of the free enterprise system. And a big part of that is free. Big Part of that is what happens when people make decisions. Now, if we go to what people think is a more secure place like socialism. There has never been in the history of the world any country that thrived. And Grew under socialism they all die. So for us to think about changing the system that brought us the great amount of power wealth health convenience, and the security of our lives to something that's going to turn it around I find. Absolutely crazy. So if you you. People have to. Create. Benefits for themselves government can't get have it. So. I find this election incredibly important to the direction of our country. I could go on and on. But I don't think you want. To have a longer time, the chat Mr Reagan thank you so much. Good avalon appreciate the time.
CNN 5 Things for April 23, 2021 Morning Edition
"This briefing is brought to you by. Td ameritrade where smart investors get smarter. Good morning here. Are the five things you need to know for. Friday april twenty third. The mother of makhaya. Brian's says she doesn't want her daughter to be remembered by the incident that ended her life speaking to. Cnn's chris cuomo paul. O'brien said she wants the world to know that her daughter was eight loving sixteen year. Old girl who was talented smart and funny mikhail was shot and killed by columbus ohio police officer tuesday officials have released body camera video of the shooting during which lunges at another young woman with a knife outside the home where she was in foster. Care the officer who fired those shots is off street. Duty pending an investigation. Authorities in long island are hunting for a man who threw acid in a college students. Face twenty one year old nephew. It chrome was on the driveway of her home on march seventeenth when a man approached her from behind and threw. Acid in her face describing. The suspect is six foot two with skinny bill. Police said in a tweet that they believe the suspect drove away. in a red nissan. Altima russia has ordered its top military brass to return troops to their permanent basis. Starting friday saying it had concluded a snap inspection of its forces in the countries east and west near the ukrainian border a build up of russian troops along the border in recent weeks has reignited tensions in eastern ukraine where government forces have battled russian-backed separatists demanding independence from kiev since two thousand fourteen. Us stocks tumbled thursday over investors worries about higher taxes. All three major indexes closed deep in the red. The biden administration wants to raise taxes on the wealthy to pay for the pandemic recovery. It has proposed to hike capital gains taxes for those earning more than one million dollars annually to almost forty percent. The current top federal capital gains tax is twenty percents and zimbabwe will soon start selling rights to shoot as many as five hundred elephants this year. A spokesman for the zimbabwe parks and wildlife management authority told cnn that declining tourism revenue owing to the coronavirus pandemic was among the main reasons for the move. The announcement comes just weeks. After the african forest elephant was declared critically endangered and the african savanna elephants was declared endangered in december. Namibia put one hundred seventy high value. Wild elephants up for sale due to a drought and an increase in elephant numbers. That's all for your cnn. Five things morning edition for more on these stories and the latest news. You can always visit. Cnn dot com slash five things. This briefing was brought to you by. Td ameritrade get smart with your investing with customizable tools and education designed just for you at td ameritrade where smart investors get smarter.
Disney, Mercadolibre, Shopify
"This episode of market foolery is brought to you by TD Ameritrade. Everything's customizable these days. You're trading platform can be too with thinker swim. You can customize screeners charting and stock forecasts of the market is always tailored to you. You can get started a td. Ameritrade DOT com slash sink or swim. It's Wednesday may sixth. Welcome to market foolery. I'm Chris Sale with me from a safe social distance. It's bill man. See My friend. We're actually only six feet away. Chris took laptops. But we're in the same room directly behind you. Earning season rolls on. We've got a couple of different ECOMMERCE earnings. But we're going to start with Disney Chris. Oh my goodness dizzy. I mean the numbers for Disney were terrible and but we expected them to be terrible and I have to say shareholder. I pleasantly surprised that shares of Disney are up and I I said yesterday right when the numbers came out is the Disney reported after the closing bell yesterday and the stock was down a couple of percentage points immediately after hours. I said to our friend. Jim Gillies this is GonNa be about the conference. Call this what what happens to the stock on Wednesday. Yes it will be informed by this report. Also be informed by the conference call. And I'm guessing Bob Shaping did a good job. I'm guessing he did do a good job. But I as I've said all along because we're in such a weird period of time every single company I think most companies that haven't actually gone up during this period of time. People are only really paying attention to the two things one. What your balance sheet look like in to. What access do you to credit? You have in in Disney's case those things have been and will continue to be fine. I was playing a game this morning that I'd like to play with you regarding Disney. So let's let's pretend that the corona virus has never happened and we wake up this morning. Disney has come out saying that their revenues are down thirty. Four percent earnings are down ninety percent. How much is the stock down? The virus hasn't happened in Bizarro in bizarro world where we don't have a ready made excuse for every company. How much is the stock down? Thirty percent more more. It's good and it's getting yeah. It's down from where it was at the beginning of the year. But you're right. This is This is not nearly as bad as it could be. Yeah so Disney may have the and this really goes to the transformation of the company that happened under Bob Eiger but Disney is being hit in three different places really really hard. The cruise ships are shut tight. The parks shut tight. Espn is showing competitive knitting or whatever they can get their hands Korean baseball now by the way. I don't know if you've picked a team yet. But these are three huge drivers for Disney and keep in mind that the corner. They just reported their parks were opened through the through about the middle of March so most of the damage that happened to Disney has happened after that right after the quarter end. So yeah it's it's amazing but it really does speak to the value of this companies the assets that it has in terms of the Library of characters and it has it just rolled out trolls to in straight to Disney plus. It has crushed it which is probably not good news for the theater. Companies because of a sacred trust has been broken for for good reason people understand why but Disney plus carrying. Its way doing a good job. It was a fine quarter under the circumstances. The other interesting thing. I don't know if you saw this Chris but the Disney announced its Shanghai Parkas opening on the eleventh of May which is next week so I did see that and this is this is one more thing to watch in terms of businesses can open their doors and say come on an but then it's a question of how many people actually want to go inside. We've got and you know so so with Disney. This is absolutely going to be the thing to watch over the next month or so because hopefully it will provide some clues to the reopening of parks at some point in the United States. But I I'm I'm keeping my expectations. Pretty low in terms of foot traffic in the parks and Shanghai. The prudent thing to do because obviously obviously even in China there are not. You're going to see much greater barriers to people travelling from far outside of the Shanghai region to come to the parks. That people aren't you know aren't pitching airplanes. They're not they're not staying in hotels but as a model it's going to be really interesting to see what Disney does and how it handles being open and to me. I don't want to call it hopeful because China is far far far down the road in terms of the back end of the covert nineteen crisis compared to wear the US or even even Europe is but they are going to have a model in place for when inevitably. And I and I've said this all along inevitably we will beat this semi sentient Beastie. What it's GonNa look like last night I'll just add. Is One of the questions going into the conference. Call was the presence of Bob Eiger. How how much is he going to participate? Because he's the Executive Chairman. We've seen these reports that he's now sort of pulled. The CEO rains back. I mean I talk to the top of the call just made made some opening remarks. And then he just handed headed the microphone to Bob Jay pick and he never appeared again and as a shareholder. I feel like that absolutely the right move. This wasn't one of those Friday night lights when when Matt Saracen gets benched and has to try and figure out his way he obviously Bob. Eiger had no way of knowing when he left in early February that he was leaving and like. Hey here's a basket of snakes. Bob Good luck so it is a very very good thing. And I think Bob Bob Check would say the same thing. It is a very good thing that Bob Eiger came in. And it's at least a one of the reins for the time being and I and I don't I don't see that as emasculating to Bob. Pack at all it. There's a learning curve with you. Go into a specially accompanied that is as dynamic as complex as Disney is. And so yeah. You're exactly right notice. I notice the same thing he was he he he started and I immediately thought no no no but then handed over and that was the last you heard from him. You could feel as I mean I felt but nothing more from them so good. I can't believe I'm saying this. But kind of good stuff from Disney like. Okay yeah the market. I think is reacting appropriately. The stock of the day is Makoto. Lebron shares are up twenty percent hitting a new all-time high MOCATTA. As first quarter was kind of everything. You could dream off. If you're a shareholder. Active users of the total payment volumes through the MOCATTA PAGO was up transactions. Were I mean was was? Was there anything bad? Was there anything I mean? You're a shareholder was anything in Makoto. Lebron's quarter or their guidance to made you go well. That's not so good. Wow well that's not so good. While I mean they did they did miss earnings and they have pretty much pulled guidance back for the year but they also said that they are about to spend something on the order of seven hundred million dollars in in Brazil and Brazilian. It's an Argentine company but to be quite fair and I apologize to any Argentines who are here with us because you hate hearing this sort of thing. Brazil is it's most important market and Mercado Leib Ray laid out a plan where they are doubling down on their investments into Brazil. They want to win this country. They WANNA win. So what I saw. That was most impressive from Marco. Polo Lieber wasn't so much the results and the results were fine. They were good. They were what you might expect. But the fact that they were saying look of access to credit right now and they're playing a game that I have I've been playing this game of what what changes are going to be permanent back end of this in one that. I think that Mocatta libra is playing right. Now as there's going to be less competition there's GonNa be less competition so we should drop the hammer. Now you look at the rise in this stock obviously big today the market cap from Macau to Lebron's thirty seven billion dollars and when you look at the markets that the company operates does that. I mean you to me. Is that the right size. Do you look at the thirty seven billion dollar cap and say now that seems about right or do you think boy. They still have a lot of room to run a lot of room. They got a lot of room but I think their share prices going to visit lots of places because it is trading at it is trading at nearly absurd multiples kind of multiples that you would've almost never seen in a pre internet environment where you're talking about. Asset light companies that are pretty good at a generate generating capital returns. So a lot is expected of this company from the existing share price. And let's be on us through. Its own through its own missteps or through things executives things that have nothing to do with its own operations. It could fail to live up to current expectations. And that's that's true of any company that is that is valued at ten plus times sales but yet no this is the this is. This is a company that in Latin America. Which is a which is which is has a massively rapidly growing middle class. It is it has to do with Makoto. Pago which is which is virtual payments in a in in markets that are entirely under banked and it is just a massive opportunity for for for for the company. People tend to Macau Labor Chris as being the Ebay of Latin America. It's just not true at all. I mean it's Ebay plus it's pay pal. They have a huge number of opportunities in front of them. Do you think the people of Ebay because Ebay once owned nearly twenty percent of mccotter libra. You think they re how much are kicking themselves. I guess is my question. There out zillow's is it or is it every hour is it just. Is it just when the quarterly report comes out? It was right when you said that when when when we started talking about yes the answer is yes. I think the I think the capital allocators ebay maybe incompetent between selling out Mirko Libra and selling out pay pal and holding not holding really any kind of stake in either of them. Ebay is now at twenty eight billion dollar company pay PAL is in the hundreds of billions and it used to be. That used to be ebays. Baby Yeah one hundred and fifty billion that was a that was a wholly owned subsidiary of ebay. I don't think they're very good at capital allocation or lease. They historically have not been you know. They've had two golden tickets like A. I don't know what to do with these. Let's let's let's not. Let's not risk having all that money coming our way back to Pez dispensers exactly before we get to shop before quick shoutout to td Ameritrade in these unprecedented times. Having access to the right information can help. You make better informed investing decisions for today and tomorrow. Td AMERITRADE is committed to providing you with a range of relevant educational content like timely articles informative webcasts and even access to daily live market news. So you can stay on the path to becoming a smarter investor to learn more about their breadth of resources go to TD AMERITRADE dot com slash market hub td Ameritrade where smart investors get smarter. Shopping first quarter revenue came in nearly fifty percent higher than a year ago. Still not profitable but the stop about five percent today and it is more than doubled in the past six weeks. Yeah more than doubled. It was at three hundred thirteen dollars on the on the eighteenth of March and now it is closing in on seven hundred dollars. That's not usually how six week periods go Chris. I don't know if you know this but that's that's not that's not even for the growth growth companies. That's pretty good We've talked about shop by quite a bit is a beloved company here at the Molly. Full nearly every service that we that we have it seems has shop fi in in the portfolio shop. Affi- did an amazing amazing job supporting it. Small and medium business clients during the beginning the early days and up till today with With the the economic damage in fallout was falling upon them because of all of the closures from the from the corona virus. There's a really cool thing that came out in in in their report and I would. I know it's kind of terrible radio broadcasting just to read a big quotes. I'll try and be quick. But they had their their gross margins for their point of sales were seventy one percent between March thirteenth and April twenty fourth which is which is a sign of all of their know all of their small and medium vander closing up physical locations. The retail managers men merchants managed to replace ninety four percent of those revenues by going online. And that was that was shop. Affi- supporting them getting them up as quickly as possible and really averting disaster for a lot of these a lot of these merchants what they have done at shop. I is amazing and I think that they've hit a hit there. The point where they've had escape velocity. They're not going to be caught there. A two billion run rate for revenues. Now and this company Justice downstate but similar to mocatta libra expectations. When you just look at the Stock Price. Expectations are robust high. And this and let me just draw the comparison further. Let's go to the. This is an eighty four billion dollar company. How much bigger can shop. If I get it can get bigger. I really think it can. But you're you're entirely right. I mean it is on a price to sales basis. It is now fifty three times that means if you take the trailing trail twelve month revenues fifty three years worth of that. And that's before you take any expenses like pay somebody you know any any of those sorts of things so yes absolutely heroic expectations on top five. But at this point given what they've just under these circumstances getting back to what we talk about talk about before. I don't know who's going to be competing with them anymore. I don't know how they're going to be displaced Amazon do it? I really focuses on yeah. They're they're in an amazing in an amazing place and they are a company that you we should hold up is one that has managed this crisis. Exactly right I I don't want to gloss over what you said there because I think it's an important distinction because when we talk about ECOMMERCE companies broadly Amazon and shop. If I get named checked appropriately so but I think that can lead some people to think they are in the exact same business and they're really not they're not at all no not at all. Yeah they are absolutely not on the same in the same business last thing and then I'll let you go. Which baseball team in Korea have you picked as your own? I Have Not Korean. Baseball team. Didn't in Taiwan. I am a big unit presence. Seven eleven lions fan. So yes. That's right the seven eleven lions. It's fantastic. There's only four teams. They play with robots in the in the audience. All with masks on socially distanced. They live cheerleaders though. It seems odd even for baseball to start with so. I've not picture Korean team yet. So the next time on with you we will by that time you and I will have picked teams and we will be super fails. Sounds like a deal film man. Thanks for being here great. Thanks for having me Chris. Good to see you brother has always people on the program may have interest in the stocks they talk about on the Motley fool may have formal recommendations for against Saddam by herself stocks base. Still here. Let's going to do it for this edition. Market full read. This show is mixed by Dan. Boyd I'm Chris Sale. Thanks for listening to see you tomorrow.
NPR News: 05-14-2019 11AM ET
"Support for this podcast and the following message. Come from Google from Connecticut to California from Mississippi to Minnesota. Millions of businesses are using Google tools to grow online. Learn how Google is supporting businesses in your state at Google dot com slash economic impact. Live from NPR news in Washington, I'm korva Coleman. Secretary state Mike Pompeo is trying to stabilize U S Russian relations. He's in Sochi to meet Russian President, Vladimir Putin as NPR's. Michele Keleman reports. Secretary Pompeo has been outspoken about Russia in the past most recently accusing Moscow of propping up Venezuelan leader, nNcholas Maduro. But as he began a day of talks in so Chee, the secretary of state was sounding conciliatory I'm here because President Trump is committed to improving this relationship. Russia's foreign minister says it's time for Moscow in Washington to put aside years of mistrust and find a way to work together before the trip. Aides to Bombay oh said he would be raising concerns about a series of aggressive ND stabilizing moves by Russia on the world stage. Michelle Kellerman, NPR news. The State Department US stocks bounced back this morning after a sharp drop on Monday. Currently the Dow was up two hundred twelve points NPR. Scott Horsely reports investors remain wary about the prospect of a prolonged trade battle between the US and China US stocks opened higher regaining some of the ground. They lost on Monday. When the Dow Jones industrial average plunged nearly two point four percent, and the tech-heavy NASDAQ suffered an even steeper decline the sell off at the start of the week came as the US and China prepared to escalate their ongoing tariff battle the President Trump sounded cautiously optimistic late Monday that a trade agreement with Beijing might still be reached. Well, let you know about three or four weeks whether or not it was successful. You never really know. Right. But I have a feeling it's going to be very successful. No immediate talks are planned. Trump is expected to meet with Chinese president Xi Jinping at a g twenty summit late next month. Scott Horsely NPR news, Washington, another athletic coach is set to plead guilty in the college admissions cheating scandal. Laura Janki is a former soccer coach at the university of southern California from member station W G B. In boston. Kirk Keira Pezzo reports she would be the fourth coach to do. So prosecutors say Jenky accepted bribes funneled through a fake charity. It was too great phony athletic profiles for the children of rich. Parents and get them accepted as recruits for sports. They didn't even play under a plea agreement signed last month Jenky has been cooperating with prosecutors and could be called to testify against others charged in the case to see her sentence reduce Kirk Karen peasant reporting, Montana governor, Steve Bullock is going to seek the democratic presidential nomination in twenty twenty the two term governor says he won re election in two thousand sixteen even though President Trump carried Montana by twenty points. But look joins a crowded field. There are more than twenty Democrats seeking the presidential nomination. On Wall Street. The Dow Jones industrials are now up one hundred ninety two points at twenty five thousand five hundred seventeen you're listening to NPR. Flood warnings remained posted for much of the Mississippi and Missouri rivers and their tributaries. It may be weeks before the high water subsides in some areas. The national weather service is warning that new storms will pull into Texas by tomorrow. That means more rain for areas already experiencing flooding such as Houston. These storms are expected to move east into Louisiana Mississippi and Alabama by the end of the week. A new study finds that sales of sugary drinks dropped significantly in Philadelphia after the city imposed a tax of one and a half cents. NPR's Alison Aubrey has more one year after the implementation of the soda tax in Philadelphia sales of sweetened drinks declined by thirty eight percent. The study finds Christina. Roberto of the university of Pennsylvania is author of the study, this is probably the single most effective policy to reduce purchases of these drinks. We got a really big affect in Philadelphia. And that's great news for public health. The tax is part of a broad strategy to help combat obesity and type two diabetes. It also raises revenue for early childhood education. The findings are published in the journal of the American Medical Association. Allison, Aubrey NPR news instant messaging platform, what's up is urging all its users to upgrade to the latest version reports of emerged that the messaging platform can carry spyware that can eavesdrop on unsuspecting users. What's up advertises its high level of security and privacy? What's app is owned by online platform Facebook. Facebook is a financial supporter of NPR. This is NPR support for this NPR news briefing and the following message. Come from TD Ameritrade their Trade Desk team can help gut check your trades and answer your toughest questions around the clock. So you always feel confident before making a move. Learn more at TD Ameritrade dot com slash Trade Desk, member SIPC.
Ubers Report; Musks Trial; Activision Blizzard CEO
"Support for this. CNBC podcast and the following message is brought to you by TD Ameritrade. So you've done a ton of research on a trade but you can't decide if you want to go through with it. Td Eighty Ameritrade. Trade desk might be the secret to figuring it all out just go to. TD AMERITRADE DOT COM slash trade desk to see how they can help gut check your trades member SIPC SIPC bringing show musically squawk pod daily podcast brought to you by the team behind squawk box and Dr Seuss. CNBC CONTROL TO CNBC's essential morning show every day. Get the best stories. Debate and analysis from the biggest names in business and politics are coming your next today Eh. Pot Uber revealing disturbing new data on sexual assaults. This is unacceptable to be zero up low out jobs report the US economy creating greater in two hundred sixty thousand new jobs in November marketer higher. The bottom line is at Baikonur is strong and gaming's big future with the CEO of activision. Blizzard I look at our business and I see roughly three hundred and fifty million customers in the hundred ninety countries. There is not a good reason. Why that number shouldn't it'd be a billion in the next five years I'm CNBC producer? Katie Kramer it's Friday December. Sixth Two thousand nineteen squad begins right now ban by Joe in three she won good morning. Welcome back to Squawk box here on. CNBC I'm Joe. Kernan along with Becky Cook and off today in Studio for the remainder of the show. Oh Jason Tritter stratego research partners chairman. How are you? I'm doing fine. How you doing? It's the first Friday of the month again jobs Friday this morning warning the Labor Department released the number of American jobs created in November as well as the latest unemployment number. If you watch squawk box you know that our coverage of the report spans the better part of an hour and if you listen to this podcast you know that we still that our into a few minutes of key content. CNBC's along the way. We live at a very busy Labor Department abuzz with reporters. I I just hard for me to believe that there's other organizations don't let the world leader and businesses get the information out first and then start talking. She broke the numbers for us. non-farm payrolls payrolls rose by two hundred sixty six thousand jobs in November. There were strong hiring across the board strong hiring and an overall strong report. JP Morgan asset management of Sun are off. Is Optimistic. Great strong number the bottom line. Is that the economy is strong and so is former Congressional budget office director. Doug Doug Holtz Eakin the numbers and the report which are simply spectacular. This is really report. Everyone should be thrilled with Joe. Kernan and CNBC's economics reporter see Fleece mm-hmm and agreed that the president should also optimism. Here this is a good number for re election and a good number for reelection but Andy Green from the Center for American progress called for some perspective the humanity behind those numbers. People are working longer because they don't have the resources retired. I'm just not seeing the optimism. Obviously there's good numbers today but I ever make us earn when you actually talk to ordinary working families out in a lot of left behind communities. They're still hurting. report was strong on nearly every front. Which means as our guest just host? Jason Trainer pointed out president. Trump's posture in the trade talks between the US and China might shift accordingly. One thing. I would just wonder. Does this. Certainly good for trade negotiations is. I would argue and the big metric making headlines from today's report the unemployment rate and we're back to three point five percent that is the lowest level of joblessness in fifty fifty years and one more good sign before we move on. Markets are higher after the numbers crossed wires. The indicated open for the markets jumped higher. The Thursday night Uber released a report disclosing the number of sexual assaults murders and crash related fatalities involving its own rides between twenty seventeen in two thousand. Eighteen Uber revealed nearly six thousand reports of sexual abuse in that time over. Three thousand of those occurred last year. which alarmingly is down sixteen percent from the 2017 number the company outline steps? It's taken to counter the problems including making additional safety hires boosting the rigor of driver background checks adding emergency button on the APP APP and checking in with passengers if the ACTA Texan unexpected long. Stop during the trip in an interview with NBC News. Uber's chief legal officer. Tony West said the numbers are jarring and hard to digest best that they weren't surprising. I'm not surprised and I'm not surprised because sexual. Violence is just much more pervasive in society than I think most people realize we hope to see and hope to learn a number of things I think i. We want to raise awareness. The other thing we want to show is that we're developing Best Practices Uber. CEO Derek Hustler shot. He weighed in via twitter. Calling the safety report and important step forward. Here's our team digesting this news. This one I saw last night I was like do you think of those. I thought the numbers were global. It's not just. US Uber says it's received more than three thousand reports of sexual assault. Three thousand about. Let's point out. There are one point three billion rides in the US last year in its first biennial safety report company says it was down sixteen percent from a year earlier earlier and details efforts for further safety improvements. We have kids. Obviously daughter on Uber are the three thousand is a big number I we it does help them into the one point. Three billion yeah and if you dig into that two hundred and thirty five of them rapes there were nineteen physical assaults that ended in death. So that that's when you start looking at those things and realizing that's what's happening in the United States. You can control the background on loop drivers. I guess but some of this going the other way this is passengers. You're picking up some savory passenger and they They reported this themselves. Left has been an issue because there have been women who have been suing the company because they have been sexually assaulted and I think there were or something like thirty four thirty five women who just sued them so obviously it's problem. That happens their their question. Is I guess what happens if you were to compare that to existing taxi companies. What are the rates that would go with some of those? Are there better background checks. They are not and again. It's it's kind of mind boggling but you put it into context with one point. Three billion right. You're seeing is you gotTa have the guy say your name got to him and say oh absolutely ought to have him say your name so that you know he actually dry. It's just like I is seen as far it's like the worst thing in the world. It's like every scary thing you've ever thought of every which happened down in some groups say that those numbers are probably under reported because sexual assaults ten reported. The Uber itself said that by taking these steps and making it so public letting people know that they are going to be tracking closely. You will oh probably see an increase in the number of reports. That happened this year as the under reporting kind of is made up for. You can't stick to strangers together without one of them you know. Obviously obviously it's a small. It's a small number of relative to when you are using there are women who say they are on guard every time putting yourself into the and and the big question has been how how rigorous are the background checks now. I know that Uber has lots of drivers. They knock out every year. I think three quarters of the number of the drivers they knock out or because of not being able to driving steps it is criminal background checks. That may be part of the cost of doing business. We should we should not just write it off. You know what I mean. It's like this is unacceptable zero. Yes next on Squawk pod. The latest in Tesla chief. Elon Musk's defamation. Trial set to head to the jury today. A and later on in the pod Bobby Kotik video game. CEO Behind call of Duty World of warcraft candy crush and more on the two billion active gamers around the world and how that that number will grow support for this CNBC podcast and the following message is brought to you by td Ameritrade. So you've done a ton of research on trade but you can't decide if you WANNA go through with it. Td Ameritrade trade desk might be the secret to figuring it all out just go to TD ameritrade dot com slash trade desk to see how they can help gut check your trades member. SIPC this quad fun. Here's becky welcome back. Everybody Jersey expected to begin deliberating in the Elon. Musk defamation trial this morning. Jane Wells joins us. She's got more on that Front Jane. I have been following your twitter account on everything you've sent out on this. You got me. Tell me what's going on it. It's well final arguments begin at nine. Maybe we'll have a decision today. It's GonNa be interesting is how much the judge is going to be vigilant. About focusing on the tweets where Moscow's Unsworth pedal guy and how much he'll let in about these other tales to buzzfeed where must call him a child rapist. Those were only allowed in as to musk's state of mind and he really mean pedal guys insult or her as a pedophile. But the defamation claim is only on the tweets expect the judge to be very clear with the jurors about the difference between the tweets and everything else now pretty much all of yesterday was was taken up by testimony from Vernon UN's worth the cave expert was cross examined by Ilan must lawyers who tried to show that Unsworth didn't suffer at all from being called a pedal guy in fact quite the opposite. They showed the jury pictures of him being honored by the Prime Minister at ten Downing Street in the UK and the government of Thailand. Why would they honor anyone? They thought might be a pedophile L.. Elon Musk not in court. He's only been in court for his own testimony. Is he going to return for the decision. federal judge in the case. Steven Wilson has been pretty cranky with both lawyers trying to keep mantra. He seems especially perturbed by Unsworth. Attorney l Lin wood this sort of folksy a lawyer from Atlanta turns out out would has had quite a career most notably he represented Richard Jewel. who was wrongfully accused of the Olympics bombing in Atlanta in nineteen ninety six? In fact there's a movie coming out from Clint Eastwood about Richard Jewel and playing. Ellen would not Jon Hamm. There will be Oscar winner Sam Rockwell proving that everything in Hollywood ended up in a movie even somebody involved in the Elon. Musk trial Dole. Crossover that Clinton still directing Jane I mean did you see them. You'll I mean he's he's he's like I don't know Scott it's ninety years old minded in his mind is eighty nine still still eighty nine but I just you know all of our heroes someday will be with us any WHOA. That's GONNA be a tough one for Hackman. That's going to be the HAGMAN's the same age when Burt Reynolds passed I was I don't know why I don't WanNA remodeling. I'm sorry Jane but wow I just think it's funny you know how does how did this fall in your lap. This get Jane Wells on that it just. I just think it's Weird Bacon. I don't see I don't see the connection anything Bacon. Is You pot a lot of the OJ trial. Oh that's right. That's right must smoked a blunt. Yes he did that too. I was thinking about that too in this day and age. I mean president has called people will never peto but he throws a throws because the mini Mike Bloomberg. I mean in this day and age twitter or it calls somebody a pedophile. All of our standards are lower now. Aren't they ors twitter. Also there's a key difference. Everyone the president has insulted as a public. Public figure is much higher in that case of Vernon UNSWORTH has been ruled a private figure by the Jesuit. Well that's interesting because Elon Musk's take has been that. This guy took Kim on first and said nasty things told them where sticking submarine and he assumed he didn't take that literally but I've got about the standards between a private citizen and public one much higher bar in fact back A. Musk try to have him considered a public figure because he used now. A public figure many failed. But here's what's interesting to Unsworth from the stand Unsworth Unsworth. Yesterday refused to apologize for saying. Stick it where it hurts. He still calls. Pr Stunt. He doesn't think Elon Musk's coldhearted but he's still thinks the whole thing was a Pr Arstan the submarine and he would not apologize for what he said on CNN. I'm not complaining about the trump some of my truck sleepy. Yeah except for trying to explain to kids. I know I yeah. They don't get any of that at school. My eight year old doesn't want uh-huh an extended to prepare them for junior high and high school grades into Israel. Thanks Jane coming up on Squawk Pot Becky quicks candid conversation with the CEO Video Game Company activision blizzard on his unique. Start in business in the basement of a parking garage in a casino and this guy with a pinkie ring just gave us three hundred thousand dollars. Were his family now. We're GONNA die. That's next welcome back to Scott. I'm becky quick. Along with Joe Kernan Hijo. So good to see you Joe recently I got to sit down with body Kodak. He's the CO of the largest video game publisher activision blizzard. He's a really interesting guy right to He's been doing this for almost thirty years. And if you think about it That's a little crazy especially in such a fast moving industry to be able to do that. I kind of compared it to dog dog years right. And so if you've been in for almost thirty years you got more than two hundred years experience ever acquisitions that he orchestrated as well but just refresh my memory. I have the teenager. Which Games are we talking about? Lots of them it's Things like candy crush has been one of the more recent ones. But they've got big franchises. Like call of duty and world warcraft. Those are the ones that they've managed to really Make Tent Poles in the organization and they continue to roll out big new releases. And that's it's been a really powerful part of the organization. He has been is young still but he's been there for decades he started it. It's a really interesting story. He he goes into detail in this interview and talks a little bit about how he got started early on. It includes Steve Wynn who backed him very early on. I think when he was still a teenager ager maybe one thousand nine hundred eighty years old. He was still in college at the time. So I'm trying to figure out how sports I watch. Yeah I watch someone work a little controller people. Do they show up to be stadium. Big screens you might see what they're doing and working with Robert Kraft to build the east sports tire fire system kind of around the NFL. The same way it's done. I asked him all these things much more on stage at the recent. CNBC evolve event in Los Angeles. And here's that conversation Welcome becky quick and Bobby Kotik of activision blizzard. Thank you for coming guys. Okay if you don't know body you may not realize is a story. He bought activision back in nineteen ninety and has been CEO since one thousand nine hundred ninety one if you count that out. That's twenty eight years. Here's is the CEO of Technology Video Game Company and in my view being a CEO and technology video games as kind of like dog years because things are changing so so quickly so by my math. You've been the CEO for one hundred ninety six dog years. What have you done to evolve over? The last two centuries in dog years there was a moment in time where we had a very large shareholder that was a French company and it was event. Here is my first board meeting there and they asked the same question. What is it that you've done to sustain and grow the business for this long period of time that other video game companies have been unable able to do and The the chairman of the company is a terrific a charismatic guy. And he said you know be you can at least for me to tell the board member How you makes his successive? Is this a long time. So I said well You know it's not ah complicated. We are ruthless prioritize irs of opportunity. We don't get distracted. We know what our businesses we find the best talent and we make sure that we keep our talent focused and not distracted and we really do a great job of prioritization. And you know that sort of the secret to our success and couldn't say more than that. I left the room and I overheard him saying saying this. Booby Critique. He's he's Chris and I. This is my first Board board meeting and this is horrible and is my new partner so I took him aside and I said Renee I heard you and it's really disappointing that this is how you think of me at our first board meeting sued Bobby. I don't I don't say and that's why heard uses booby predict on due process and he started laughing he said noboby would though is telling them is. We admire your focus focus. So that's probably the best answer to how we've been successful over this twenty eight years is the the focus body by activision back in one thousand nine hundred for four hundred forty thousand dollars. The company now has a market capitalization of over forty. A billion dollars. Was that part of your plan when you started. I don't think I really spent a lot of time thinking about anything other than how are we gonNa make great games and figure out how how to get the biggest audiences to actually play them today. We have roughly three hundred and fifty million customers in one hundred ninety countries. There is not a good reason why that that number shouldn't be a billion in the next five years. When Games became available on phones the market exploded and the audience size went from a few hundred million to billions of potential consumers? And so we have these great franchises that have evolved over long periods of time and many of those franchises though are not on phones yet so we launched our game call of duty for the first time on a mobile phone in October in a month we signed up a hundred million consumers in a month and so you realize as these franchises go from consoles. PC's ABC's the phones. The growth in the audience is going to be staggering. Where is your growth potential? Both in terms of WHO's playing where they're playing in terms of geography so so surprising statistic but fifty percents of our customers are female and so if you think about the where the growth is going to come from. It's every region region graffiti getting those games onto mobile. The social connections that are happening between players are extraordinary and those social connections are deepening engagement. And it's unlike any other form of entertainment or even sport because if you look at sport most spectator spectator sports. You may have at one. Time played them but they're not sports that you're going to play for the rest of your life and what happened in East sports is the same Sense of purpose and belonging and meaning that you get from sport you get in video games but it's funny I was doing a panel like Like this and sitting next to Alex Rodriguez who's on the panel and I just thought I need a visual to explain what each sports awards actually is and I said Alex could you stand up and for those you know an Alex looks like he's like the greatest human specimen he stood up Tan and I said in professional baseball there are twelve hundred of him and then I went like this and I said yeah me there are a billion of me but I want that I want the sense of belonging and purpose and meaning. I want to be part of a team I wanNA feel. I actually have a sense of accomplishment and I want to be celebrated for that accomplishment and so there are way more people who can actually get get that same joy that same satisfaction from what we do than what you can see in traditional sport when you think about your content growth because you've gotta constantly feed feed the beast come up with new content. Do you think of it as being extensions of these franchises that you've had out there for a very long time. Where do you think the main pipeline's going to be? You can't even consider a game of franchise unless it's durable in perpetuity. So we think of our game franchise much much more like baseball football and basketball that the only difference is the rules can change slightly year on year and some of the dynamics of the game can change slightly. That's the component to it. But essentially it's the game construct so unleash your inner rockstar or unleashed soldier or unleash. Your your inner wizard and so those those are contracts that will last forever and then we have to create new content that keeps people engaged. So we we. He's perpetuator franchises then. We selectively introduced new ones and then if there are categories of business that we don't think we have the skills else to be able to create a game around we may do acquisition but those are rare. It seems to me like the demand for content to call for it from Wall Street and from your audiences only stepped up. Do I still feel like you have the luxury of saying we will sell no game before its time. It's not even a luxury. It's an absolute discipline. Our responsibility is to only deliver you. Great content. I've been doing this for twenty eight years. I will be doing it for many many more years. And so my view is you know. WE'RE NOT GONNA make a quarter or to make a year. We're not gonNA compromise the quality of the experience or the responsibility for the player. You have had business leaders. Who have helped you along the way and have really been role models who have helped you in gray and Steve Wind comes to mind? How'd you meet him? What happened Steve William met when I was nineteen. I didn't know who he was. I never been to Las Vegas or Atlantic City and I was sitting next to him at a charity fundraiser. RAZER pretty out of place at I kid from Roslyn Long Island and I felt the whole thing amazing. The amusing by sitting next is very charismatic. Guy And he asked me what I did and I told him the story and I was a student. I was a sophomore in college and I started a software company that made computers easier to use and the next morning. I saw him at breakfast and he asked me a little bit more about the business and then out of the blue said sorry going back to Arbor where I was in school and I said No. I'm going to New York and he said well why don't you come with me. I said how does that work and he said what are you coming when my plane and I'd never been on a private plane before and I thought well it's gotta be better than American Airlines and of course I'm focused on. Can I get a refund for from my ticket and so I said Okay and I get on this plane and we start talking and he tells me the story of how he got started and a mentor gave him the capital to buy golden and this is when he was in his twenties but that Mentor said that Steve to repay him by investing in another other young entrepreneur. So He's dying this story and I tell businesses so I'd like to invest and I said you know I have investors in fact that's why I'm going to New York. My my father introduced me to these. Professional Venture Capitalists and. They're investing my business and so I'm very grateful. Thank you I'm set and I I couldn't stop thinking about next because it's very compelling guy and I went to my father's office the next morning with these professional venture capitalists and I blew Lou the deal with my friends and my father of course thought I was an idiot and probably in that moment I was by called Steve and I said you know I really I would. I blew the deal with these investors. I'd love you to invest. And he said where are you and I told the Mini said okay. Car will be there in fifteen minutes. I go downstairs in this limo memo pulls up and these gorillas get out of the car two of them and said get in and I thought what is this and my business partner. Who is French was my college roommate? We get in this car and they drive us to the sixty first street heliport in Manhattan. There's a golden nugget helicopter waiting and the guerrillas. Say Get in. I thought I've never been in helicopter. It goes with my new private plane experience. I'm starting to like this and my business partner. Says what are we doing. We're going to meet this. Investors we go to city. We get driven to the basement of a parking garage at the casino. We go in and we wait three hours and he comes out in his fancy suit with his pinky ring and perfect hair air. And he's okay fellas. What do we do? We make software that makes computers easy to use and he said how much is it going to be a prototype and I said three hundred thousand dollars and he writes a checkout for three hundred thousand dollars he says all right we're partners a third a third. You guys do the work always the money who's hungry. And I said Mr when we have the contracts prepared for the investors so we can have them sent over and he says contracts contracts through my family now and he walks out right. Look at my college remain. I said we're in the basement of parking garage in a casino and this guy guy with Pinky ring just gave a strange thousand dollars and said we're his family. Now we'RE GONNA die. And he he was there every step of the way and I've been very fortunate to have great mentors. Warren Buffett has been a great mentor for a long time. And so I've been very very lucky. I think it's one of the things that has helped me most in building the business is having the access to extraordinary extraordinary people and great business people who can give you great advice about how to grow and build your business. What has been your experience as expectations for? CEO's news and for leadership. I think have really ratcheted up my responsibilities to make sure that our communities feel safe secure comfortable and satisfied entertained attend and so I don't I don't that doesn't convey to me the right to have a platform for a lot of political views. I don't think but I think there are some business people who are incredible examples of character and integrity and principle. They do have the right eight articulate views and visions and voices about government in policy and politics and I love I love engaging with those people what comes comes next pushing the envelope on innovation creating new ways that fulfill our mission of bringing people together through up against detainment and you know I can compete in and communicate with someone in any country in the world anytime of the day and you start to see like the tolerance and the understanding that comes from being being able to have these connections. Can I still think we're just scratching the surface of how you bring people together. We fifty million customers today. But I see that. The number growing to a billion in the distant future Bobbie. There has been a pleasure and thank you. Everybody thank you thank you very much. That's the show for today. Thanks for listening. squawk box is hosted by Joe. Kernan Becky Quick Andrew. Ross sorkin tune in weekday mornings on. CNBC at six am eastern to to get the smartest takes and analysis from our TV. Show right into your ears. Subscribe to Squawk Pot wherever you listen me back here on Monday clear thanks guys support for this. CNBC podcast and the following message is brought to you by td Ameritrade read. So you've done a ton of research on trade but you can't decide if you want to go through with it. Td Ameritrade trade desk might be the secret to figuring it all out just go to TD AMERITRADE TRADE DOT com slash trade desk to see how they can help. Gut Check your trades member S._i._P._C..
The Tom Dupree Show 8-9 am 11-23-19
"Thing is a paid program on six thirty wwl. This is the Tom to show on. newsradio six thirty WWL AV and WWL DOT com the camp. I guess you know y they got a eh on your shades you know. Put the call Welcome to the second hour of the time the pre show you got euclid forgot to say it. He let me know by the way I thought I got to go. Yeah in. He's he's dressed. He's dressed up. He's Philip Sexton in for this hour. Good Morning Good morning as US telling guy you know I I tell him. If every time it's the cost of having as many friends you do have about ten gone. Oh God knows so. Many people don't know that such good work in the Guy You really do you. You're very I just want to tell you a little bit about Guy Hewlett Only minded as anybody. I've known and he has been his whole career He worked At first security bank under the late Willy Early Ralph's. Yes who pushed him or encouraged him to engage in the community On many levels through nonprofits board service Various ways and recently We've we've talked about this on the show but guys Big Effort in the nonprofit world is as a board member of the shepherd's house which is a recovery center for man where young men primarily young man Recover from the effects of drug and alcohol addiction and guys so instrumental mental in doing that and he's an ambassador from our firm to the community and we appreciate that guy. I just launch. Don't you know how much I appreciate it. Hey I appreciate it appreciate that very much you know. I was told a long long time ago by guy that I really really respect He says you know you can't keep what you got unless you give it away and I really love that and I don't know that a lot of people but there's you know in this time of Thanksgiving and in this is the gratitude month As special time of year but you know if he really for me. There's no better feeling that I get no drugs. No alcohol no power prestige. Money can bad the feeling of being of service to somebody to throw sex in their sacks genuinely that genuine sincere a you're feeling of of compassionate like you were talking so much about with the brother Bob and the previous hour of giving back and help in helping another's in in Mr Rouse played a big role in that Willie roused. Did I mean that was a big part of the culture that bank. which is Chase Bank for you guys out there listeners? That don't know that today was first security then but people who weren't around when I security was the big bank in the community wouldn't understand understand because chase bank today is just global. Yeah they're but they're not a community force right like I security security. The closest thing thing to that now is Luther Deaton and at Central Bank. In if you look at these two big local banks like that and there were central bank. I security I mean I would. I would bet seventy to eighty percent of the good nonprofit organizations in this community. They had a major role in agonise. Yeah they did and You know what that's why Lexington Central Kentucky such a great place to live and work period. One of the reasons it's one of the there's a lot of other there others but I mean a real community yeah yeah oriented and guy you've embodied that you you've you've you've done a lot in that area so let's just thank you accept the fact that we're blessed to have you around. Thank you very much attorney. Phillip what are we gonNA tell. Yeah we got some stories here to go over. Philip allergist talking about I security this is kind of a perfect perfect lead in in The first one on my list that so says Talks about the market loves the idea of SWAB. TD AMERITRADE merger But regulator related might not so let. Let's let me just give a little backdrop to that Td Ameritrade at depre- financial group. We use TD Ameritrade mayor trade as our Custodian to hold our clients assets. It's a big discount brokerage firm and They're not the biggest Charles. Schwab is the biggest and just this week Charles Schwab has announced that they're going to take over. Td Ameritrade so brother Bob Waving out the window window we We're not sure what to make of the talk of the merger You know they're all about it but to regulators may not be so go ahead. Yeah so for for people anybody anybody that's listening that has an account at td Ameritrade the first thing. I want to start out saying it really when you think about you know or you're going to have to go through this big slogger August paperwork or anything like that. No no it's basically the the only thing that you're going to see is your statement go from td Ameritrade Schwab walk up But the interesting thing about this is When you look at it there's about four big players in the industry industry? The three really major major players you've got Fidelity Schwab and TD ameritrade right So some of the ticks from this It says this deal would create one of the industry's largest brokerage firms with twenty four million client accounts and five point one trillion and in combined assets. Just thinking about that. Just mind boggling curve clive point one trillion dollars worth of assets. It's crazy now. I want to jump in with you Philip. Because I did a little research yesterday afternoon we were talking about this. The office so swab. Is You know three point some-something I'm something trillion. Td Ameritrade two point. Some some tree and combined they're going to have twenty four million twenty five million customers the -delity seven point four. Three kidding me now let me explain to you listeners. White Fidelity is so large they are very well known for managing aged 401k. In that so you see a lot of that. They're okay and so then the other major player out there is the the is E. Trade. Thought that we're not as big. They're not as big but they've got a Lotta customers. Yeah but they don't have the assets as about a half a billion the interesting thing retrea and I mean thank you all. The conversation stemmed said that you know everybody thought that each would be the first one to get a Clai. Ah Yeah but I think this is a very interesting play by Schwab because basically what they're doing T.. Ameritrade is very similar to an E. trade very very similar and by taking td Ameritrade and making such a huge competitor. Basically they're just going to try to steal eatright did beat it down even further. Yeah Oh there you go so that would be the competitive advantage here. Yeah they don't have to buy each problem. The regulator's aren't going to like this because it's going to. It's going to limit competition. It's an yeah there you go troubled. What's happening hilliard gone? You know they were a medium size brokerage firm the the medium sized brokerage firm out there is not long for this world. Well let let me put it in perspective on a local basis and we were just talking about it. Great lead in on this and I trust issue many years ago in Lexington Kentucky Lucky to major banks merged where they were really creating. A conglomerate was the trust business it was first National Bank and trust merged with security trust and the two became the largest trust company in the State of Kentucky in touch they had eighty percent of market share for all Kentucky. Trust Business in Kentucky. It's crazy it's crazy. The regulators regulators came in and said you cannot do any new trust business. I think it was twenty five years really. Yeah so anyhow. Hey how is saying the interesting in this is where the you know. A lot of people say this is good for the customer. What show a swab did was they? Actually Salihi announced they were not going to do any Trading fees anymore any any and then commissions and then the next day. Td went right after it. I think this is an and this article talks about one part of it is. This was kind of a long lead in plan because Schwab didn't WANNA have to pay a multiple on a revenue stream that they knew was going away right so that's when they started talks to buy was after they announced this. This no baby the smart. Here's the stocks gone up though. Hey well the stock had gone down here today but it's is pop back up to where it's about even on the stock went up ten points today with about a twenty five percent move in the news of the potential by came Yeah but the I don't think Schwab's getting any steel. No but here's the thing that I feel. Is You know a lot of people. Think it's good for the client and I think that ultimately it can be because of the total breadth of the company and the ability to do technology and zero commission. And things like that. Ah but where you get into A problem is the ability to kind of price fix. Yeah when you get to that you know it's true you can say here's what our sweep account rights going to be and you can't argue it because where else are you going to go exactly and for for those that. Don't I know a sweep account is where your cash deposits immediately go into your money market And they're paying zero point. Nothing yes yes. Planned March when when a bank has the ability to set their. If you give a bank just any bank the ability to set their deposit rights. Yeah in a non competitive way. They're going to kill it. That's exactly right. We need to take a break. Stay with us. It is the Tom. DEPRE- show newsradio six thirty wwl. AP Events Sir happening faster than ever. What's going on and testimony? Quid pro quo conspiracy theories library. What do you from Ukraine? I want nothing. Keep uh-huh your work with us. RADIO SIX THIRTY W la. This is Tom Debris Junior. What does a good financial advisor do? Perhaps it comes down to asking the right questions instead of having all the answers for instance should I take social so security now or later. Am I really ready to retire. Is My money invested properly. Pay Me an income during retirement. These these are a few of the questions that might come up in your discussion with a financial advisor. Good questions are what a financial advisor may be able to help you with you. You will come up with the answers on your own. If you're not sure about some of these things need a sounding board called pre financial group at eight five nine two three three zero zero four hundred for a complimentary point also. You can listen to the Tom to show on Saturdays at seven. AM newsradio six thirty. WWL A big. That's that's to pre financial group at eight five nine two three three zero four hundred six thirty wwl. AP Awesome Awesome back on the Tom Ratio John Short holding has been holding John. Welcome to the town debris show. How are you johnny? They're eighty are we playing we playing. Ut Martin today. We are talking about forty five forty-five begging there. You go so we're going to clean the house on them we are John did you. Like are a a fellow we had on in the first hour is immediate. Yeah he was a good. What are you got decide for yourself? This this it gets on your first is good and enjoyed it and and and then and then he for hearings for trump is over right now. The Patriots here is over for the truck for trump right now and now he's GonNa Happen to know nothing. Nothing bad so good. He'll be reluctant. Make sure win by over fifty five beings here. That's I'll take in indeedy. It's fifty five percent to forty five percent. Yeah maybe more than maybe more than was. We'll see what happens because he needs to win. This really everything counter weather. WHO's GonNa leave the District of Columbia? That's eight knees in every state and every kind of Wells Fargo Kentucky's not state it's a Commonwealth for that's correct Kentucky Regime Pennsylvania Massachusetts are Kinda. Well so I don't know how they say anyway. Yeah all right we gotTa Keep Rolling John With our thing thing here so I'm going to have to cut you off but thank you for calling. Hey welcome you're a great American. All right they all know how Schwab got started really kind of interesting story. He was working for Abankwa near Yeah and he he started in writing and an investment newsletter. Yeah and then. He started traveling around. I think to these banks and he was doing investment seminars. Will Bob Tilton in the last hour are said he had just read. Schwab's autobiography uh-huh. Yeah and it probably had that in it. Yeah so I thought that was kind of interesting. Yeah I don't know if we're going to be part of Schwab or Tedium looks like we're GonNa have our accounts with Schwab at some point. which a lot of other people have also It worries me a little bit. The lack of competition yeah. That's that that that concerns me. Sure sure her and that if they decide you can like I said you can kind of price fix on your your sweep accounts. I don't think you would ever see a reinstitution institution of commissions. Yeah but definitely you know around your fees and stuff there's a there would be price-fixing and you know a a less west friendly nature But ultimately when you're looking at custodian you're the the biggest biggest thing you're looking for the first thing you're looking for is their solvency yeah And their ability to to clear the trades on a good one of the reason I went with. Td Ameritrade for our firm was that they were not engaged in other businesses. That could get you in in trouble. One of the big people trying to get our business was bear stearns bear stearns had a huge clearing business like what. TD The AMERITRADE does but they also had a huge mortgage business which got him into huge trouble and cause them to have to be merged into WHO J. P. Morgan Morgan. So if you're custodian has other businesses that get in trouble you as RIA. Hey have headline risk you know. The Custodian is probably going to be okay. But you do your clients. Don't know that they they read Your Custodian is engaged in mortgage backed trading and his lost billions of dollars. They start worrying about the safety. The insecurity of their investments with custodian. Td does not engage in other types of business. Yeah so they're they're custodial businesses their main aimed thing and as far as I know swab doesn't do a whole lot of crazy stuff like that but td also. I think I've heard you say is to you know the bank that that they have is Toronto. Dominion Bank the bank they're in cahoots with And you know the that bank over the the financial crisis was solid as a rock solid. As a rock Canadian banks did not get hurt. Exactly and so. That's the first thing you're looking for because because like you said the money will be there the money will be fine. Your investments will be fine. You know the custodian all that would be okay the problem you you might have have to jump through some hoops. Prove that it was your security right which you never want to have to even get close to being in a situation that's like a that's like your bank ain't getting taken over of course when banks get taken over? They do it over the weekend and the next day. It's it's certain such bank but your account account is still the same there you know one of the things I've been sitting here thinking about all this is another real benefit though if you're a client line of debris financial or if you're a client that is with one of these one eight hundred global companies you know that's a benefit that we really we we have you know I I love it. We're Main Street Lexington Kentucky where God I love. Think about Philip coming down the rapids you know is the god of the of the boat vote and will guide you through the changes. You know we're going to be right by your side and hold your hand and and and lower the anxiety died here any worry or the you know. The fear of chain ended diligent. And I think that's a real benefit you know and I love saying that as we move into small business Saturday which is going to be next next Saturday where we celebrate small all business America. And that's what the pre-financial is yeah. I forgot all about that right back. Friday small business Saturday and try to get people to shop at local local low crime than the big-box. That's right we're Kentucky for Kentucky by Dash and you know doing business in Kentucky creating jobs in Kentucky creating revenue for Kentucky. Yeah prosperity hot little here. We go hour of power shopping The BLUEGRASS bluegrass. I love it. It's perfect all right. We got this a story here about value stocks back in vogue for now. What's going on with that? Yeah so over the past few months. We've actually started to see a shift shift in the markets So this is article from the Wall Street Journal. Ridden by Michael Thorne So it said the. There's there's wall. Street says the are buying cheap stocks is making a comeback for real this time money managers and individual investors stepped up their buying of shares of banks manufacturers factors and other value stocks often defined as companies who shares trade at a low multiple of their book value net worth so it says the renewed interest pushed the S. and P. Five hundred value index up twelve percent over the past three months more than double the increase of growth counterpart The Sparta gains has lifted the value index ahead of the S. and P. Five Hundred Growth Index for twenty nineteen and put it on pace for its strongest year in six years. Wow Is this because people just have bought all the gross stocks they wore by and they're looking for something something else that they've gone in there and cleared off the shelves and all the growth stuff went first. And then it's what's left you know. Oh well we got the you know. Got Them which we jumped into made nice. Little profit on here jar in the last two weeks is the jar pickles. Yeah it's been sitting back there that marked down from five dollars and fifty cents a Canada. You know two dollars and it hadn't expired SPA. They got better. Yeah all right. We'll talk a little more about that. We got back. This looks like to me either. Going in raiding the supermarket by anything that can pour the big financial group. It's it's time to pre show newsradio six three from iheartradio number one for podcasts. Next this question with Katie couric I'm Katie couric and I'm back with my new podcast Next question with Katie couric next question aims to make sense of our chaotic bionic complicated and ever changing world one question at a time. I look forward to figuring this all out together studies. Show if you sleep next to someone who snores. You could be losing an hour of sleep every night. I'm trina webster and I don't have that problem anymore. I'm Dan Webster were the founders of Z. Quiet we know how snoring can turn your sweet dreams into a nightmare of shoving poking and morning frustration. Gratien not to mention those dreaded trips to the couch in the middle of the night snoring was a real problem for us. I tried everything even surgery but nothing worked. That's when we developed an amazing solution. Called Z quiet. So you quite as easy to use and works immediately so you can sleep comfortably without making a sound just pop it in before you sleep in kick snoring outta bed forever forever. Millions of people are sleeping better every night. Thanks to Z.. Quiet so if better sleep is one of your goals go to Ghezzi quiet dot COM Z. Quiet works for both men and women with Z.. Quiet couples are sleeping together peacefully. Try It risk free for thirty days for just nine ninety five. Go to get Z.. QUIET DOT COM. That's get Z.. QUIET DOT COM to try it for only nine ninety five. The impeachment inquiry expected to move into the next phase after the Thanksgiving recess but there is a witness. Democrats may still want to question Christian former National Security Adviser John Bolton. ABC's David Rides at the White House. Olten came out with a bizarre claim that the White House locked him out of his twitter her account for the past two months his resignation. He says he's finally wrested back. Control the White House denies this but Bolton's suggested that his twitter ah for the past two months. Resignation may have been an effort to silence him because of stuff that he might say many people getting a head. Start on this big big Thanksgiving getaway mother. Nature may be a factor along the way with a wintry mix in the forecast. ABC's Rob Marciano Columbus Ohio inches of snow in parts of Kansas. Some of that falling in Illinois but the heavy rain through Birmingham Huntsville getting into Atlanta later on today. Is this kind of low. It's going coast to coast. Is Organizing. Thanksgiving travel expected to be one of the busiest since two thousand thousand five Michelle Franzen ABC News. It's unfortunately a damp and dreary star to the weekend here on this Saturday. We're dealing with browns and heavy rain coming through the area. Some dry spots will be out there as well but after point be full day round the forties then by tonight right see. Those temperatures brash quickly down into the thirty that could change some of that rain over to a mix of snow overnight our sound guaranteed enrollment data ernest left from the early broadcasting. Live twenty four seven from the Harto big blue nation. This is news radio six thirty wwl the eighteen an iheartradio station. If you're looking for more ways to save this holiday season you're GonNa love earning four times. The fuel points on gift cards now through December tenth. The Kroger just download your coupon from the APP or a Kroger Dot Com then head to kroger and choose from hundreds of gift cards like bass pro shops lows. Google play in more with you. Give them as gifts after using for your holiday shopping. Learn four times the fuel points more ways to save. It's easy limited. Time offer restrictions apply Croak fresh for everyone. I'm Nick Soboleski a selectquote agent with a true story. That could save you hundreds of dollars a year. A woman named Linda just called her husband. Ray has a three three hundred thousand dollars group life insurance policy but is changing jobs and can't take it with him well. I shopped the many highly rated term life insurance companies we represent like prudential and mutual of Omaha and found ray who is forty one and takes medication to control his cholesterol a ten year. Five hundred thousand dollar policy for under twenty seven dollars a month. God that's almost twice the coverage for less than half of what he had paid. If selectquote hasn't shopped for your life insurance you're probably paying too much for your free quote call eight eight hundred five eight nine fifty five ninety nine. That's eight hundred. Five eight nine fifty five ninety nine eight hundred five eight nine fifty five ninety ninety nine or go to selectquote dot com since one thousand nine hundred eighty five we shop you save get full details on the example policy at selectquote dot com slash commercials or price could vary depending on your health issuing chewing covering other factors not available in all states six thirty wwl Seen again did you see back on the Tom Decrease show sitting here with friends. Guide Phillip Let's talk a little bit about what would happen. Gosh I hate to. I don't even want to think about this. If Elizabeth Warren was elected president finally unleash poised. To rebound I mean so. Don't don't put me through this. All right I'll put me rip the band aid off all right so this kind of goes to what you just asked before the before the break we just took you know while our the value. Are you stocks moving up so to to answer that in my belief. Is that when you look at When you look at what the the profitability of companies is done over the past year A lot of growth companies. The growth really hasn't been there. Yeah so the money's just kinda shifted is what you started to see is a shift in shifting money in buying. Yes so money move from growth to value and the way I like to look at is is like somebody opened another another cover. You're talking about the grocery store or somebody opened up their cupboard saying well I got a lot oreos. I ain't got much ain't got much healthy food Scott a Lotta oreos and Jesus and everything else so I better go get some some apples bananas. That's what you survive on. Phil Switch I. I've been eating grilled tickin and he's got a lot going on. Let's let the listeners. Now okay so our our newest youngest member of the team Mr Brad Crane. I told him I said well. I'm going to start. I'm really honing on dot over next month or so and I said I'll probably lose about twenty pounds a month I really want to. I was just con- on joking around but I know I can do lose. Twenty pounds is a big deal so he looked at me said that's impossible. I bet you fifty bucks. You can't lose twenty pounds in a mall realize like you made your better all right. I'm GonNa let you line. I weighed last night. Six Days in. I'm down six pounds. Are you really yeah so I made sure I seem a little sweet a little text last night. Yeah but anyway I discussed latex and then I'll jump back into this I said a pound a day keeps the brad away so anyway what. I what I've used says is ship and what this article talks talks about. It talks about if Elizabeth Warren were to become a press were to become president what you have to see. The reason that growth is continued to grow for as long as it has because its profitability has continued to grow So you know if your profitability is continuing to grow within the stock. Can you know continue to grow what they're talking about. Is What happens if Elizabeth Warren starts to really crack down on an regulate and just stop growth. Yeah altogether and that's the well she. She hates wealth being created she. She doesn't like it she she says. We need to get rid of all the billionaires the billionaires drive the economy. Yeah she and that they know how to create wealth and create jobs. She hates seeing people do well. She said that she said that she wants. She wants free. Healthcare off care for everybody. She wants a fifteen dollars minimum wage. Yeah she wants to eliminate all student loan debt which what's what the numbers that now trillions and then in implement a wealth tax in. I've heard legion. I liked the whole thing out. And the wealth tax. Like seventy percent. Crazy isn't it but a lot. It's a lot. Yeah and that's the thing is when you when you really start to just when you when you pull the E.. Brake on growth. Well then the money is going to flee to things that are safe or safer. You're going to go from the the the sexy growth of Amazon to all right. We're GONNA WE'RE GONNA stay on base here and hit hit singles US over here in Utah and let me ask you this. I mean Tom. You've you've been around a long time and seen a lot of different elections desist. INSYS it. She's in the lead right now. It's the Democratic Front or just narrowly. Well right not in every state okay. The Guy Pete Buddha judge is the Mayor Pete is moving up and he's actually taken the lead in our I I don't know I'd much rather see him than her. I'll tell you that. Well I saw headlines this week. I didn't read the stories but saw headlines were some of these big hedge edge fund guys are starting to bet on the market dropping later next year. Yeah which I suspect has more to do with the presidential presidential election probably than it does you know trade or interest rates or anything like that. Yeah well kind of one of the reasons reasons that I wanted to bring this article up was to just really highlight and this is something that we really try to hone in on it to provide answers one. We're doing our research start. His capital markets have been through so many weird presidencies. I mean so many different kinds of presidents president. Yeah and that it's only one person you know all these claims that she she's promising you're going to be lucky if she if she got elected. First off you're going to be lucky that AH even gets ten percent of implemented. Because a lot of things she can do by executive order which we've seen with president trump trial but ultimately the the profitability of some of these companies will stay in in tact is what I was getting at. And that's where that's why you have to do your research. That's why you've got to really hone in and that's why you can't make a bet on politics because it it is what it is. It's a bit and now I talked about this and a little little thing. We did the senior seminar hours. The difference between gambling and handicapping. Yes so when when you're when you're doing research on stocks your handicapping we've got one of our well. Let's just say listener on the line. Here Duane gene. How are you sir? Good Morning I'm GONNA try multitasking. Here trying to get out the door to work on depot and I just heard a comment. I'm an which one are. You just said that rather sleep. Pete's food adjudge. I did okay. I'm listening you know. He's mayor south. Bend Right Yup. No I'm a notre dame graduate there. Okay I happen to know from having heard on the radio admittedly admittedly and can't close the source that I remember it was a very reliable source. His father is an avowed communist college professor. That I didn't know the Apple. We'll look it up. I wish I could be more precise in my citation here. But so and that problem I'd rather not see one one of them so there isn't a trustworthy any one of them in terms of of Any kind of moderation Asian. But he's no solution shoes. I agree with you that that that but I'm glad you shot me down on. That didn't mean to put. Ah No no. I'm a needed. It thank you. I have a good day at work anyway. Anyway okay good. I'm glad he said that. I stand corrected. You're getting a communist Socialists. Whatever fascist maybe depending the WHO right? Yeah any one of them but like I guess you know from from certain business regulations and certain things you know. Yeah you've got to watch out for certain things but ultimately if you good companies they you can weather the storm. That's that's what we try to do is pick good companies good companies that. Listen if you're an investor if you're somebody who needs to have retirement aren't Investment Management for your retirement account we pick good companies for you to invest in and good what what is good main means companies who have a business that's fairly stable To some degree has a moat around it in other words there's protections about against anybody getting in the business you know they. They have a niche in the business. That's hard to get them out of and their stock is trading at a price. That looks attractive. That's what we're looking for those kinds of things. We invest the old fashioned way. I don't know I I. I never knew that it changed. It has changed where you've got these S. and P. Five hundred ATF's where people just by the market. They don't look at what the valuation is of the now having clue that's right why and even then even the people that try to do quote unquote fundamental value investing investing a lot of them. They're just saying well. The the banking sector looks cheap so they just by bank. ETF right they don't want to actually hone in and try to find one. That looks very attractive. And just make that their bank pick their say. Oh we'll just ball fifty of 'em yeah heck I mean you know ten of them might actually go under. No Yup our. I'll tell you something I I listen to this week in our office our team the debris team on an investor Mr Call with a with a new company that the priests thinking about investing in and I wish we could publish the dialogue. Wow look the questions that were asked about talk about yesterday. Yes yeah I mean you guys were going in deep baby and I loved up to every minute of it. It was a bank stock. We won't say which one right but I mean you're asking great questions in by. Golly you know if we invest in that bank we're we're going to know who were invested in and that's important. Yeah I think we decided to pass for now but it goes to our philosophy. Different firms arms can develop different core competencies and we have an kind of an edge if you WANNA call it that in financial companies we understand Dan Bank and bank type companies and insurance companies. We we kind of get that world and You know it enables us to be selective about where we want to put our clients money not just just any old bank not just any oh finance company but somebody who's got a certain Leg Up on the market marcus. One of the things we did really well with was Aircraft Financing aircraft leasing companies and our recent Most the recent purchase there was just bought out by a Japanese company. Air Castle where we're out of the stock now because the price went way up. Yeah insurance companies. That's another another focused more than other one but I think I think another thing is is. We'll be the first to tell you we. We know what we don't know that's true. I think of another example just this week looking at the bonds of a pharmaceutical company. Yeah I can. I'M GONNA go over the numbers and I can say all right. I like the numbers but I have no clue about any of these drugs. Yes because I don't understand drugs. Yeah I don't really I don't take any medications to be honest with you and so it's to understand the drug pipeline. How it works you know? What the percentage to get out of ice three testing all this? That's where all right now. We've got to have a call with management to really figure out if this is even viable and that'll because we don't understand the cash flows here's why drugs expire now a generic drug company. The drug doesn't expire because they're not coming up with new patents. They're taking old ones off patent and making a cheaper version. But you gotta understand how sticky is is that revenue flow for years to come exactly how much. How much will it tend to stick around on even a generic drug you know? Oh if if a new drug comes out. That's better. Yeah that goes on to patent or the generic drug. Their sales will decline to there. You Go yeah Shaw question about that too. Because because in a generic drug does does it have drug company. Do they have the same liability. Is the actual company that patented the drug. Don't know you talking about in the OPIOID. Yeah toward just in any drug that you know there. But yeah because I got hit by big if thing on opioid if you're if your marketing and selling the still have the same liability. Okay probably do stay with us. It is the top depre- show newsradio six thirty. W really be startling. Ridiculous impeachment in Clemson quid pro. Quos answer is clear from starts from the begin to finish the impeachment dodge truck on newsradio six thirty W. L. A. P.. This is Tom Debris Junior. What does a good financial advisor do? Perhaps it comes down to asking the right questions instead of having all the answers for instance should I take social security now or later. Am I really ready to retire. Is My money invested properly to pay me an income during retirement want. These are a few of the questions that might come up in your discussion with a financial advisor. Good questions are what a financial advisor may be able to help hugh with you will come up with answers on your own. If you're not sure about some of these things need a sounding board called the Pre Financial Group at eight five nine in two three three zero four hundred or complementary appointment also. You can listen to the Tom to pre show on Saturdays at seven. AM At newsradio. Six thirty WWL L. A. B. That's depre- financial group at eight five nine two three three zero four hundred six thirty wwl. You're I'm saying he daddy. Don't live in deep Doo. Doo Doo Doo dude. Due to this group this is what we've been Damon last hour back on the Tom Debris showed all right. Now I will say that Clark and James This does not apply to because I've Seen Elizabeth dance and I've seen you rock and roll so it happens happens to the best of us. boomers are thriving on an unprecedented and nine trillion dollar inheritance tints. What's going on with that? Sit there what's up with mine so what you've seen and with with the market rally. We've seen over the last ten years you know. It's been extremely well for just anybody that's been invested in it. Yeah So it's it's the rich. The rich aren't just getting this article from Bloomberg says the rich aren't just getting richer. They're getting older and fortunately for their children. They're are set to leave plenty of money in the bank. About thirty. Six trillion dollars will flow from one generation to another over the next thirty years. According to a report Tuesday from wealth manager United Income. The pace of bequests has already started surging. Americans inherited four hundred twenty seven billion dollars dollars in two thousand sixteen. The most recent data available up one hundred and nineteen percent from nineteen eighty-nine even after adjusting for inflation. So what had saying is you know you've got all this money fallen And here's one thing I want it. Yeah so the good news is is at the quests. They're coming in handy. The median recipient gets about fifty five thousand dollars which is more than double their typical retirement savings. Most inheritances are going to older adults. Who have little in the way of retirement savings said fellows former brookings institution scholar? People receiving inheritance are pretty middle class breath. The average inheritance received twenty sixteen was about two hundred ninety. Five thousand one hundred sixty nine thousand in nineteen eighty nine after adjusting thing for inflation right. What what you're seeing is a lot of people that don't have retirement? Savings are getting retirement savings things from their parents from their parents when when the parents pass away exactly right and expecting it and the problem is yes. They're expecting expecting it but they have no education. They haven't built a retirement nest egg themselves a lot of times and so they get this money in there. Like what do I do and they go out and spend it exactly. They don't have any idea. They have no clue scary. And so one of the things. That I've been a big proponent proponent of talking to clients and just the whole farm has been a big proponent of is you know any time they're talking about their kids and giving it to their kids bring him in Dan. Yeah we we we WANNA talk to that second generation because education is. Oh the way you educate you know just like our former guest that was just I keep thinking about it. Bob Tilton who was just on. He had to be educated through. We're going through considerable difficulty and coming out the other side You know what that's sure. Sure I've been threw it right pain and suffering teaches you humility. Yes which you can use to manage your life better. That's right going forward And a A lot of people. They've never had any pain or not had that much. I mean everybody's had had some but some people have had it easy and it doesn't doesn't serve. Serve them well when tough times. Come sometimes they can be self inflicted tough time you can inflict upon yourself your own pain and I think wealth bill one of the things that he said earlier in the hour or was that wealth was not on the outside it was on the inside. It was and if somebody dumps a big big chunk of money in my lap right now way more than what I've got. Would I have the equipment on the inside. Add to manage what's been given to me on the outside or would it change my lifestyle. Would I be different person after inheriting that money. And that's something that we have to deal with when people come man to help them be realistic about what they've got you know inherited. Wealth can be a two edged sword can be a scary time for a lot of people and I. It's back to this education impeach that we're we talk about a lot and generational wealth needs education and it needs accountability. And I love what you are saying about how we encourage our clients to bring their children in. Let's start relationship now. And it's just like you know pastor brother Bob and your pastor church yeah they'll hold you accountable on your lifestyle. Yeah they'll hold you if you'll let them on you know being a person of integrity and practicing morals but we try to do the same thing as it deals with money and import. It is important. I I've I've heard I've heard you talk about you. Know being we need to be good stewards of the money entrusted to what we've been entrusted but also you know we need to be good stewards of the clients entrusted to write it. There's been plenty of towns where I've seen one of a sit across the table from a client it and say. Hey you're spending too much money. Yeah you know holding the having those hard conversations of maybe the other guy might have been like It's okay you know just to keep the client. Well you know we would much rather keep you by being honest and and that other guy is people pleasing them. Yeah Yeah because he doesn't want to lose the business trite and people pleasing. Always get you into trouble. If you're afraid to say the truth is somebody uh-huh remember my first month it pre-financial I heard a story about that guy that other guy that you know the client called and said I want to buy a new boat and he couldn't afford a new boat it really in his out of his retirement account but out of as a result of being people pleased he said no pick up as a boat owner. You can never. I don't care how much money you got. You can't afford the boat don't by I could say that as a boat owner. Oh Gosh Alexander Ford the boat. I don't care how much is money. You guys just GonNa keep it as expensive float. Yeah exactly all right. We're out of time. Gosh went by so fast. If you want ought to come talk to us. Abacha retirement investments. Call us at eight five nine. Two three three zero four hundred citizen email at INFO at depre- financial dot com look at our website. PRI FINANCIAL DOT COM. Check US out on facebook. Thanks for listening. You've been listening to the Tom to pre show with Guy Phillip Sexton. It's news radio six thirty WWL EP.
Netflix, HBO Bring Home The Gold
"A subset of Margaret fuller east brought to you by TD Ameritrade, whether you want to place a trade on Twitter or get market news from your smart speaker. TD Ameritrade has everything you need to invest on your favorite platforms and devices. See what's new at TD, Ameritrade dot com. Slash innovation. It's Tuesday, September eighteenth, walk on the market foolery. I'm Chris l. joining me in studio, Ron, gross and Emilie. Flippin. Thanks for being here. How are you, sir? I only had one Cup of coffee though. I see right here. Yeah. Well, let's just get through. Let's get through this so I can get some more coffee. We're going to dig into some earnings from general mills and autozone. And of course we're going to talk about the awards you have to. I mean, the law, we, it's not the law on this show. We talk about stuff like that. Let's start with FedEx though. First quarter profits came in lower than expected. What? What is the headline for you? Ron? Because because I've seen a couple of different headlines and one of them is their margins are getting hit a little bit just because they're coming out and they're paying their employees more. The headline for me is that this is a good report and ignore the rest of the noise. The fact that the stock is down four percent. Yeah, it's not a thing now is the thing of course. But here's the stock is down mostly, I think because tariffs are actually taking a bit of a wack at them. The tariffs implemented so far have hit about ten percent of their business in China where they get about two percent of their overall revenue. So it's a real thing, but I kind of view it the way I view currency, fluctuations where I ignore it because there's nothing I can do about it. I don't know how long it's gonna last. I don't know when it's going to reverse. I don't know what the Trump administration is going to do with respect to them. So I just wanted to look at the business and say, as are they selling stuff? Are they doing the services that they say they're going to do for for a good price? And now are they paying their people? Well, which they are. So it's a strong company that's executing on everything they're supposed to be doing revenue up, eleven percent. You know, earnings are thirty eight percent, which is actually below estimates but come on. That's that's a strong business stuck. Only trading fourteen times earnings doing quite well. It's interesting. When you think about the, how much play the employee raises is getting because it seems to me like one that's just a smart move in general to it also seems like a smart move at this point in time. And by that I'm referring to the calendar that we're in right now because. We've seen stories come out around seasonal hiring. I haven't seen any numbers coming out of FedEx or UPS yet, but I'm sure they're coming at some point. But like we've seen retailers like target. Macy's, etcetera. Did Fred Smith talk about seasonal hiring on this one? Yeah, they're going to they're going to boost seasonal, hiring about ten percent to fifty five thousand their adder. Adding year, round Saturday delivery. They're bringing back Sunday holiday deliveries to put a little bit more pressure on Amazon there as the kind of Amazon is ramping up the pressure on shippers. So they're kind of, you know, getting in the zone with them on that. So again, they're intimidating. I think it's strong holiday season putting the people in place to get that done. All right. Let's move onto general mills and shares of general mills down more than seven percent this morning after first quarter sales came in lower than expected. Emily general mills operates in a lot of markets, but the biggest market is North America and it. It seems weird to say this, but the bright spot in North America for general mills was actually cereal. Yeah, it's actually really interesting to see because you'll notice that one of the highlights from their earnings which was pretty mixed bag. But one of. Them was sales growth of almost nine percent. But when you look at North American sales growth, it was negative two percent. So virtually all their growth now is coming outside of North America and within the North American market. It's interesting to see the plays that's been going on in terms of their existing brands and their potential expansion into new brands because North America is their target market. So they need to perform well in the core areas like cereal in order to continue to be a good investment for people who are invested. So if you are invested, I hope you also had a big Cup of coffee today because it was probably a hard morning to swallow. It's also interesting to see how their acquisition strategy is playing out. So they bought the healthcare pet food brand, which was an interesting play blue buffalo, and that's one that's been proven to be not too well received by the market, but potentially expanding outside of slowing growth areas. There's a general consensus that they might have overpaid for this for this pet food brand. But in my opinion, I think future general males growth is going to be driven by strategic acquisitions. So we had some analysts on the team who were big fans of blue buffalo and they were. They were kind of bummed when they got bought out. Yeah, they really are going after this pet food business as their growth driver. And obviously they're doing it through acquisitions as Lee said, which I haven't looked at the balance he recently, but I think it's it's whacking around the balance sheet. A bit interest expense is higher if I'm not mistaken, and they've got to be careful to make sure that balance sheet is stable, especially if there's weakness in their North America business. So Emily, in terms of the international growth like how, how heavily can they lean on that? Because as you said, you look at what they North America cereal was, was the bright snacks were down in North America. Yogurt was down in north. America is is international still small enough that any meaningful growth they get internationally is going to be good, but it's not really going to move the needle or is it genuinely getting to be a bigger piece of the pie? I think it genuinely getting to be a bigger piece of the pie while they still are sticking with North America as their target market. And you can see that with a lot of these smaller niche brands are really pushing here. I didn't. They're realizing that in terms of their life cycle in America, I mean cereals, yogurts, these sort of products have kind of changed for the American tastes and they're looking at how can they play off of their core competencies and in new markets like Asia Europe. So it'll be interesting to see about their ability to kind of expand more into these areas moving forward because to me, that's going to be the most key aspect of their ability to continue to grow in the future Nelson on hugging does. And that seems like Haagen Dazs is international production to a really big part of that. And that's Russell. I mean, it's tasty too. That's what I meant. I wasn't talking so much about the business. That's just a good product. Autozone, fourth quarter. I mean the same store sales look pretty good, but overall sales up one percent, you know, close to zero as you can get without being zero or so. I would say a little bit anemic, but this is not that big of a growth business. As you said same-store says a little bit better at two point, two percent profit beat expectations. So nothing wrong with that. Margins came in pretty good as a result of them selling to business units, and they did have some higher merchandise margins, but they are supply chain costs, offset that a bit. But overall margins look fine. They bought back a ton of stock this year over one point. Five billion dollars worth of stock in an average price of six hundred sixty four dollars stock is currently at seven twenty eight. So as we sit here today, looks like a good capital allocation strategy could use a capital for them there. It's a good thing that they're good at bell buying back stock because they do that a lot. Yeah. And. And so far seems to be paying off anything stick out to you. What stays out to me is that this stock, you know, despite a relatively strong earnings. I mean, there's nothing glaringly red flags about the company. I mean, it's underperformed the market all year. So I think it's interesting. They're taking shareholder friendly actions, but at the the stocks only up about four percent so far your day, actually, after today's hit, we might be closer to flat or maybe one percenters. So putting aside what has happened over the past week in the Carolinas and in Virginia, isn't the environment of in North America. More favorable to companies that are in this business because. We just seem to be experiencing more extreme weather, whether it's winter weather, or you know. Cars are getting beaten up, I guess, is my point and it seems like we're in a better environment for businesses like autozone, yeah, it's kind of like a steady Eddie business. You know, they have pockets of weakness here and there the rust belt have been a little bit of a problem for them, but that seemed to affirmed up over the summer. They're continuing to expand seventy eight new stores in the quarter alone. Now at over fifty, six hundred. So you know, it's a solid business for sure. It's it's not gonna knock the cover off the ball, like like a high tech stock one quick shadow to TD Ameritrade you're always on the cutting edge of technology. You're listening to this podcast wherever you are. I mean, maybe you're in your car, maybe your in your home, maybe maybe your offer a run, walking the dog. Something like that. My point is you're always on the cutting edge of technology and TD Ameritrade prides itself on being ahead of the curve to and their latest innovations put their resources and services on the popular platforms that you carry and use every day. So now all you have to do. Is enabled the TD Ameritrade skill for Amazon, Alexa, or you can message them on Facebook. You can do either of those things to stay on top of the market, and you can learn more about their commitment to innovation at TD, Ameritrade dot com. Slash innovation. The awards were last night. If you're scoring at home, tie score between Netflixing HBO. Twenty-three statues a, although I'm sure the net flicks people would want me to point out that just in terms of the primetime Emmys which were the nontechnical the more glamour awards, Netflix, Tacoma, seven HBO took home six and if nothing else Emily, it really does seem like particularly for Netflix and Netflix shareholders. Paying for content appears to be paying off. Oh yeah. And it's not just tying HBO in terms of nominations, but Netflix also tied with cable for the number of wins. So I think there's something to be said for streaming services, kind of taking over here in the future. It's fascinating. I'm going to sound like an old man because I am, but you know, in the old days, I would know all the nominal the nominations and I would at least have Garrity with all the shows. Now there's so many shows and so many ways to get different content. I didn't recognize the names of half of the nominees or the shows that were nominated. So that happened a couple. I watched the entire event. So there were definitely shows that came up that I thought to myself. I've never heard of that. And in some cases, people were winning awards. It's like, Wow, I've, I've never heard of this actor actress and I've never heard of this show, but there were others where I either had heard of the show ride or a new, the the person winning the award, and I thought, okay, and it sort of spurred some ideas in terms of, okay, maybe I should try and hunt this showdown and watch. I thought about that when I saw Henry Winkler, I'm a huge happy days Fonzie fan from back in the day. So to see Henry Winkler win his first EMMY. I, it was. It was a nice way to start off the evening and it made me save them. Maybe I should check out that show history. Yeah, so so for the HBO show berry which producer, Dan boy, big fan of the show berry. Starring Bill hater and he was one of the creators of it, and I heard it interview with him earlier this year. Henry Winkler who's now gotta be Susana seventy. I was going to say he's got to be in his. It looks great. It's got to be in the seventies, but I heard an interview with Bill Hader where he was talking about younger people on the set younger people on the crew who had no idea. It wasn't point in time. Forty years ago. Forty plus years ago. We're Henry Winkler was he was the biggest. He was the biggest star on television, and he was the coolest character on television without a doubt. This was many, many years at Graham window. Wow, you aren't dating yourself. This is many years before Emily flip flippin was a gleam in her pants. Rocca we'll go around the table Emily. I'll start with you a show to recommend it can be something from Netflix, Hulu, Amazon, prime anything. What would you recommend for the listeners out there who are looking to maybe binge a little something? Well, if anyone's looking to Bengal something after last night, I doubt this will come as a shock, but this is a TV show. I actually just my mom over Christmas last year, won five awards. Marvelous MRs. Mazel wonderful shows on Amazon prime. Yep, won all those awards. Sweet. A lot of people thought it was undecided, but me not knowing the competition. Loved it. That's fantastic. Yeah, that's definitely on my list, Ron. What about you? I'm just catching up to Ozark which we just my wife and I just started binge-watching watching it and we're loving it. So Netflix show really digging season to just started early season. One still, let's go to producer Dan boy, Dan, you're given the thumbs up on Ozark now and. No, you're a big fan of berry. Any other show you might wanna throw out there for the dozens of listeners. This one might be a little surprising, but it's also a Netflix. It's called ultimate beast master, and it's one of those obstacle course shows, but they group the athletes by country, and it's sort of like the ninja warrior Olympics. It's great. It's hilarious. I love it. It's a team sport. No, it's the individual competitors, but they're on like teams divided by what country they're from. Ultimate beast master, ultimate name. I've never even heard of that. I'm just going to throw out there for anyone who is a fan of drama, and I think, well, it seems like Ozark we should probably trade show because I haven't watched Ozark. Yeah, I did, however, watch the first season and a half of Goliath on Amazon prime with Billy Bob Thornton. I'm halfway through season two, but that is really great drama, a little dark at times a little couple of curveball. Here and there, but wonderfully acted so wouldn't. It wouldn't surprise me if if he showed up in future. Nice. All right. Emily, flipping, Ron gross. Thanks for being here. Thank you as always people on the program may have interested in stocks. They talk about and the motley fool may have phone recommendations for against sin buyer stocks based solely on what you hear that's going to do it for this addition of market for the show is mixed by Dan boy. I'm Chris hill. Thanks for listening. We'll see you tomorrow.
Wall Street Breakfast August 11: Russia Registers World's First Coronavirus Vaccine
"Welcome to ski health as Wall Street breakfast, your daily source of Market News Analysis. Subscribe to this podcast on apple podcast, Google, podcasts, certified, and stitcher. Good morning today is Tuesday August eleventh and I'm your host Steve Brown. Our top stories today. Russia registers world's first corona virus vaccine. S., and P. Five Hundred Years. Record territory and tax cuts. Leading today's news. As far as I know a vaccine against a new Karuna, virus infection has been registered this morning for the first time in the world. Russian President Vladimir Putin. Declared to Russian press. I know that it works quite effectively forms a stable immunity and I repeat has passed all the necessary checks. He added that one of his daughters was vaccinated against Corona virus despite phase three trials that normally last for months and involved thousands of people at the end of July. The WHO said that there were twenty six candidate vaccines in clinical evaluation stage including one registered in Russia that was developed by the Galilea Research Center. In other news stocks continue to shrug off the latest U. S. China tensions as president trump explores the variety of tax cuts while lawmakers attempt to restart talks over a corona stimulus package. Contracts tied to the S. and P. Five. Hundred suggests that twenty five point opening bell gain that would take the Rotor Bench Park to within sixteen points of its intraday high of three, thousand, three, hundred, ninety, three, point five, set on February, Nineteenth. Dow. Futures are recording even bigger gains up one point. One percent as investors extend a rotation in devalue stocks which tend to outperform growth coming out of a recession from heavyweight tech names. In addition to several weekend executive actions that included a payroll tax holiday president trump is very seriously considering a capital gains tax cut, which would create a lot more jobs while the president can't unilaterally slash twenty percent long term capital gains rate without Congress. Some advisor say he could issued executive order that would slash tax bills for investors when they sell assets. The move known as indexing capital gains to inflation would likely face legal challenges and comes as trump also explores an income tax for middle income families. The retail brothers appear to be at it again, as Robin robinhood joined the rest of the brokerage industry by publishing monthly trading data. Startup. saw four point three, million daily average revenue trades or darts in. June. Outperforming all of the publicly traded incumbent brokerage firms. Td Ameritrade was the next highest monthly total at three point, eighty, four, million, darts interactive brokers saw one point eight, million darts followed by Charles Schwab, and e-trade at one, point, eight, million, and one point one, million respectively. Robin. Hoods Darts, during Youtube more than doubled compared to the prior three months while all three of its top days based on trading billion happened in June. Leaders from twenty seven firms that represent many of, new. York's leading industries have banded together to create the New York jobs CEO Council, which aims to hire a hundred thousand people from low income, Black Latino, and Asian communities by twenty thirty. The CO chairs of the new organization include J., p., Morgan Chase CEO Jamie Diamond Ibm CEO Arben Krishna, and accenture CEO Julie Sweet, as well as initial numbers like Jeff bezos of Amazon. Today's economic crisis is exacerbating economic and racial divides and exposing systemic barriers to opportunity, diamond said in a press release. Young people in low income and minority communities feel this failure the most. Unless we actively work to close the gap. Kobe nineteen will make matters worse. San Francisco Superior Court judge. Ethan. Schulman has granted a preliminary injunction against Uber and lift, but will pause the order for ten days to give the company's time to appeal the decision. California. Attorney General Xavier Becerra, and a trio of city attorneys have filed for the preliminary injunction to force the ride hailing services to comply with the new State Law and immediately stopped classifying their drivers as contractors. The decision known as simply bill five or five would weigh heavily on their business models and other GIG economy. Companies. Lebanon stock market reopened yesterday and the Blohm stock index is down one point six percent amid further uncertainty following last week's explosion at Beirut's port prime minister. Hassan Diab. Confirmed the resignation of his administration after just seven months in office and blamed a corrupt political elite for sabotaging his tenure. Even before the fatal incident, which killed one, hundred, sixty, three people and wounded over six thousand. Lebanon. Was Struggling. It hasn't undertaken the reforms required to unlock international funding while the Lebanese pound has also lost eighty percent of its value since October. Companies from China and other countries that do not comply with accounting standards will be delisted from US stock exchanges at the end of twenty, twenty. One according to us. Treasury. Secretary Steven Mnuchin. The US will also soon require imports from Hong Kong to be labeled as made in China, following a notice that set to be published today in the Federal Register. China appears to be juggling a balancing act as it keeps a trade deal alive. The country is reportedly scrapping expensive resilient soybean purchases and replacing previously done deals with American supplies. While retaliatory sanctions imposed yesterday, it clued any members of the trump administration. As of six twenty am today US futures and crude oil are all set to open in the green with gold and bitcoin slightly down. On today's economic calendar redbook chain store sales are out at eight, fifty, five am eastern time. If you enjoyed today's podcast, please be sure to rate and review below your feedback is deeply appreciated. That concludes today's Wall Street breakfast. Thank you for listening for the best investment. Analysis. News on the web. Does he dot COM subscribe to this podcast on Apple podcast? Google podcasts spotify stitcher. Can sign up for our other podcast behind the idea essay referees. Let's hope es cannabis investing podcast and marketplace roundtable, almost five phones as well. A great. Day.
Uncle Sam vs. Alphabet
"This episode of Margaret fuller is brought to you by TD Ameritrade. Investing lesson. Number one, don't pay for lessons. TD Ameritrade education is free to some articles, videos, webcasts, and more. Everything you need to take your trading to the next level. Visit TD Ameritrade dot com slash education member. SIPC. It's Monday, June third. Welcome to Mark. I'm Chris L? Joining me in studio today, Emily flipping in the house. Thanks for being here. Thanks for having me. If you're brand new to this podcast, because you listen to the bonus episode with Greg Fitzsimmons, this is what we normally do on market flory. We normally talk about the business news day. So today, we're gonna talk about the latest in the food industry. We're going to give a sneak preview of fool fest, which is our big today. Investing event that's happening later this week. We're going to start though with shares of alphabet down six percent this morning. The US department of Justice is reportedly looking into launching an antitrust probe aimed at Google and. I'm I'm of two minds of this on the one hand. I look at this and sank. Yeah, this could be really bad because I remember how much time and energy and money Microsoft spent back in the late nineteen ninety s dealing with their own antitrust investigation by the DOJ on the other hand, I'm I to say, I'm a little surprised at the reaction to the stock because it's not exactly like it was a secret that this kind of thing was coming. Exactly. It's not entirely unexpected that they're launching an antitrust case or exploring, launching an antitrust case against Google, especially given all the controversies recently around Facebook. So Facebook's in issue, Google's kind of the mother of all antitrust issues. Right. But going back to your point about Microsoft. I mean, look, how well Microsoft has done post, I think goes that early and late nineteen ninety s early two thousand antitrust case against them. I mean, the company has excelled. So when you see a pullback happen like today's for. Google logic within tell you. Oh, this is a short term market reaction. President says that the DOJ's really not gonna do much to break up Google like some people may fear, but at the other hand, you can't help but consider the fact that this has been a long, standing issue and the question of technology in what it means to be a monopoly in the tech space is something that's a big question Mark in the American markets today. So whether or not Google ends up being broken up. I don't think it will go that far. But I do think it will have a strong impact on Google's ability to acquire in the future. Do you own shares? I don't not directly, I don't either and consider a grain of salt or two with what I'm about to say. But I look at this, and I again, having watched what happened with Microsoft. I look at this and I think to myself, I think if I were alphabet shareholder. I'm not saying alphabet should just do whatever the Justice department wants. But at some point, I like to think that the executives at alphabet are smart enough that they would consider proactively spinning off some part of the business. If it made this type of thing go away, and I in my mind is YouTube in part, because I think this is not particularly revolutionary thinking on my part, people much smarter than me have made this point that you could unlock potentially greater value with YouTube if you spun it off, and it was his own public company, but I don't know I sort of look at this, and thank sure. Alphabet can't afford the lawyers, they can have whatever conversations they want with the OJ. But at some point it might be worth just saying, okay, what do we need to do to make this go away? Well, it would be a big thing for markets, because as he mentioned, neither of us own shares Fuego outright, but I- index a majority of my retirement savings for instance and the reason why I don't own shares is because I actually own way too much Google on an index basis. Right. Because it's such a large company, virtually any index fund, you'll buy, we'll have some exposure to Google or other large tech giants. So a spinoff would mean really big things for the company, the reason why I don't think it's maybe as likely as you as you say, is because we saw last quarter slowdown and goes Corp business. And so, I think Google is realizing that they haven't really had organic growth for awhile, internally developed growth, it's kind of been hard to come by Google. They're lying on acquisitions, acquisitions like nest in ways, and even. In youtube. I mean these are the things that are really driving growth for them. So I do think there could be some value, unlocked by spinning off different subsidaries like YouTube, for instance, but the other flipside is if they did that I think it would mean bigger things for Google they'd have to reinvent. What their core business is. And if things like YouTube don't plan to that Corp business. How are they gonna make that core? Business grow again, definitely going to be something to watch and. The wheels of Justice tend to grind slowly. So this, this is something that will, I'm sure make headlines, again throughout twenty nineteen and beyond. So we'll keep our eyes on it. Let's move onto the food industry, which really I think, because of what we saw with the beyond meat IPO has become a much more interesting place to watch. And the news today is out of Nestle, which is gearing up to launch its own plant based burger in the United States dubbed. The awesome burger, which is a great name. I'm a little surprised. No one locked up already. Shares of Nestle are up. I, I had to go back and look and see how big is Nestle because it's one of those things where I thought to myself, I know this is a big company. I'm just not sure how big it is. That's Nestle's a three hundred billion dollar company. And the stocks hitting a new high. It's a very international company as well. And you'll notice that this launch in the United States comes after launching a soy based burger and Europe called the incredible burger. So for those keeping score at home. Now we have the beyond burger the impossible burger the incredible burger and the awesome burger. So how you will choose your meat alternative. Burgers is really going to be I guess based off the title there. But it's interesting because it depends on you'll notice that in Europe, they launched soy based in the US, they're focusing on P based burgers. So trying to figure out where the market's going in terms of meat alternatives is really going to be interesting that being said companies like beyond meat have really proven that at least an investing perspective. There's great market demand. And for this, the market demand in terms of actual consumption, whether or not it's a fad whether or not it's persisting long-term to be determined. But it's interesting because companies like Nestle we saw it with Tyson are big players suddenly making a concerted effort to get into the alternative meat markets. So when I think about the alternative meat market sure, we've had veggie burgers on the market for decades, but they haven't grown nearly as fast as they've grown over the past few years. And, and right now, the meat market in terms of alternative sales of meat. It's about thirteen billion dollars, the entire meat market in the United States, two hundred seventy billion dollars. So it's only about five percent of the meat market that might sound like a small amount, but electric vehicles for instance are only about one point two percent of the vehicle market, and people. See great opportunities there for expansion. So if you see a clear path to expansion, the way that many people see with electric vehicles and alternative meets than there could be an argument to a made that investing in alternative meets for companies like Nestle Tyson's beyond. Meet. It's actually a good investment, you think about the distribution network. The Nestle has built up as the company has grown and that was one of the things I was thinking about reading through these stories this morning because good for beyond meet their small startups. They had a splashy IPO left some money on the table with their IP L but, but they've got a little bit of a supply and demand challenge that I look at Nestle and say to myself, without really knowing all the details. My hunch is they've got distribution figured out better than beyond meat and probably worth reminding folks that we've seen this in the beverage market for a very long time, where startup beverage companies, sometimes they're end business goal is to get acquired, whether it's by Anheuser Busch or if it's a soft beverage than they're looking to get acquired by Coca Cola or Pepsi Seth Goldman, who we've had here at the motley fool, we've. Reviewed him. He started the honest tea company, which Coca-Cola took a stake in and then ultimately took it over. He's now the executive chairman of beyond meat. And so when I look at what Nestle is doing. And yes, they've been working on this for years as you point out rightly so veggie burgers have been on the market for years. But there's this renewed interest. And it makes me wonder if one more reason to buy shares of beyond meat and possibly impossible foods when they go public is. There likely. Well, they're a likelier takeout candidate than Nestle's Nestle's, not gonna go, how whatever success they have with the awesome burger. They're not going to spend that off on its own. They're gonna keep that in house whereas beyond meat. It's easy to imagine someone coming along. And then just saying. All right. Let's, let's take you over and really expand your distribution definitely Annesley made a point of stating when they announced the expansion of their new alternative meat lines that they seek to kind of remove some of the issues that we see any alternative meat market in terms of production and sales and meeting demand. So Nestle's acutely aware of the fact that they are going to fill a need that is still unmet and terms of supplying more supply to an alternative meat market that has soaring, demand. What I think is really interesting is that when you look at something like beyond meets Tyson, how to stick in Tyson could have potentially acquired that company, but instead, actually sold out there stake in started to produce their own burgers. So whether or not beyond meets gets acquired, I think depends a lot more on the quality of their product. They need to prove that there is value in having a beyond meat burger versus a Tyson's burger versus a Nestle's burger versus an. Possible burger. The need to prove that, hey, we have something of value that people seek out our burgers over other burgers, and therefore, you must acquire us to get that knowledge to get that got technology, and that food as opposed making your own. We haven't really seen that yet, and I think that's largely because the market is still developing for alternative meets give it a year or two. I think we're gonna start seeing whether or not people actually seek out a beyond meat burger, or if they'll take any alternative burger given to them, the sub soda market fuller is brought to you by TD Ameritrade. When it comes to investing each of us, does it our own unique way. Some of us wanna go to loan others might prefer some guidance, regardless of your style. TD Ameritrade is always creating new solutions to help you from their award winning technology to personalized guidance. They have everything you need to invest on your terms. Visit TD Ameritrade dot com slash y TDA to learn more and get started today. Member SIPC, as I mentioned at the top. Full fest, which is our to Dame vesting conference is happening later this week. So it's going to be the proverbial short week for us here on market fully will be here through Wednesday. We're taking Thursday off because it's going to be a really really busy day for yours truly, but it's also going to be a busy day for you. Emily a busy couple of days because in addition to. A main stage panel that I know you're going to be a part of your also doing a couple of different breakouts. And I'm curious if you could just share a little bit about the breakout sessions, that you're going to be leading and one or two stocks, maybe from each that, that you're going to be highlighting share thing, the first breakouts going to be over China, actually, which I know is of topic of interest for a live investors, given the tensions recently between the US and China and trade. So I'm teaming up with been raw. You're on the investing team. He's gives a quick overview of what it means to look at China from a historical context how playing in the history of China off of investing in it today. How we get a mindset for how we find ourselves investing in companies, and I'd take some of the lessons that we can learn by looking at the history of China and rolling it into, hey, here, here's some companies in China that we like even with all these issues. So I think it's no surprise to if you've been listening to me on this podcast or familiar with me on ROY. Breakers. One of those companies is my favorite bows, noon. They call it the shop affi- of China. What I really like about this play is that it's been completely hammered by the trade war, and actually, with good reason because they do have some direct exposure to trade tensions between the US and China, which makes a lob investors think. Wait. Why would I invest in this company and the reason is, is because they've been largely unaffected by it. The demand for their product has been so strong that they actually reported earnings last week in an expectations were very much that the trade war would prevent international companies from coming over and using housing services, but on the contrary, they had the fastest gross of customers that they've ever seen since being a public company, so that to me says a lot about the strength that their business model. So that's one company from that breakout. That I'll die further into in that session a really big fan of it. In addition, we're also doing teaming up with Shannon Jones and we're going to do at break over marijuana investing so that one's going to be really exciting. Because I think a lot of investors either are over exposed to marijuana in a bad way. Or completely avoid the industry. Also in a bad way. So we're going to address about what it means to invest in marijuana. How you can do. So ethically. Hiking do so safely keeping that exposure to a minimum while still giving yourself some growth, upside, one company that I'm a big fan of Shannon, a little bit less up. So that makes for interesting. Fodder is a company called Charlotte's web CW e is a ticker. It's originally, a company run by seven brothers so really interesting kind of structure there, but they essentially created a strand of CBD, which is the nontoxic part of the marijuana plants that cured a little girl named Charlotte's seizures or essentially made them a nominal amount of seizures. So they renamed the company Charlotte's web, now they sell CBD online to their store. So it's a really inspirational company managements obviously takes a really long term approach to what CBD means for Americans what it means for our health, and it's a good way to. To kind of get exposure to the marijuana market, while still feeling good about what you're investing in. So you're saying the estate of the late, great, novelist, e b white was totally okay with. Yeah. Charlotte's web, for, I'm not sure that's a buddy love. Book well for what it's worth the company, I think almost makes good on that name based off of its mission, which is really. I mean they saved a little girl's life. Right. So what kind of mashes with Charlotte's web better than better than that? But I agree that maybe the company just hasn't been big enough to run into any legal troubles with that name speaking of marijuana, we're going to be doing a YouTube live QNA today, Monday, three thirty PM eastern myself, Emily, Shannon Jones. We're going to be taking your questions. And in fact, by the time you're listening to this, we may have already completed, but, hey, check out the motley fools YouTube channel, which is just YouTube dot com slash the motley fool you can subscribe to our channel for free. You can check out the whole human a we're going to be going at least twenty maybe thirty minutes on this expect to get a lot of questions from the audience, and it's free. So check it out, Emily flip and always could talk to you. Thanks again, for having me as always people on the program have interest in the stocks, they talk about in the motley fool man formal recommendations for against so don't buy or sell base. Oh man. What you hear. I was going to do it for this edition of market, fully show is mixed, by the iron man. Austin morgan. I'm Chris L? Thanks for listening. And we'll see you tomorrow.
The Tom Dupree Show 8-9am 12-15-19
"Knowing is a paid program on six thirty wwl. This is the Tom Free. Show on newsradio. Six thirty WWL and WWL. AP INDEED DOT COM. Welcome the CAB. I guess you know Y it's not eh been putting you on your ass. She put the call uh and Donald regulators. Yeah the top debris show what we're listening to the sounds up to this. Is The New York Kerak Console Review Live at the beacon. I ninety four. I'm in Seoul Review Rock and silver view. I love how that sounds and it features Donald Fagan of steely Dan. Walter Becker curve steely Dan. Michael McDonald Vase Gags the Great Blues Singer Charles Brown. I didn't even know this existed. And the way I found out about it was I was at Joseph. You bet the other night and I just turned around and I saw this record that New York Rock and soul revue live at the beacon. Thought this might be something. I'm interested in and this. This is the first time I've ever listened to it. So what you're hearing is new to you and new to me never knew it existed great. How many just get you just up began movement move it? Let's go. I'm ready to go work out. You don't do that. That store four amazes me because it's fine. It's just a really cool story because I have. I'm not a big reader. I don't you know. I don't read for enjoyment a a whole lot but I love going Joseph. Yeah just a really cool story books. Another chapter in your life and it's much more than books now you've gotten into this whole pop culture phenomena and it's just you know records everywhere books on comic books and I'm not just comic books thick books on Comic Books Exit and they've expanded into toys and children's games and everything kind of amazing and it's kind of overwhelming when you walk in there that's great how long it bear GonNa win. The the heisman borrow boroughs boroughs. Got It I don't think the Bengals should picking though who's uh-huh he'd be coming back to Ohio. Yeah it could be really good. Increase set Brownie. I think the only if I'm the Bengals I if I was the GM and the the bengals. I'm picking to all day long because really good. They can block for anybody they need somebody mobile. He ain't mobile right now. Okay but burroughs. He's he's NFL yeah he is NFL tall too. But I'm telling you I thought couch would have a decent career until he. I spent half of it on his back were they give him a front. This name problem. That that that Cincinnati's got you don't they. Don't need a pocket passer Eh. I understand what a great story that is though. Yeah just love it. You got kicked out of Ohio State. Didn't he transferred because they WANNA play any. Yeah did you. Did you see that. The four heisman finalists. The U So you had. The only one was chased young. That had been at his school the entire time when you think Joe Borough was a transfer from Ohio state. This was a transfer from Alabama and Justin Fields transferred from Georgia. 'cause you wouldn't play into Georgia that's right it's insane. Yeah it is and it's good for Kentucky. Looks bad lost them. Oh Yeah 'cause you're 'cause none of those teams well except for how aid eight all right. Go get one of those quarterbacks. Go Get me one of those Federal Reserve Absence Keep your errors manageable as the Federal Reserve kept. This is a Wall Street Journal article by Greg. If as Federal Reserve kept interest rates low after the recession and bought bonds critics in Congress Wall Street and within its own ranks accused of cording inflation debasing the dollar enabling fiscal profligacy. It gets the. What's that word mean? Tom Irresponsibility irresponsibility today with the record expansion and unemployment at a fifty year low. Some critics are making the opposite case. The Fed has tightened too much. Growth is lower and unemployment higher than they should be. The president trump is the loudest but economic commentators from across the spectrum and even some current current and former Fed officials have made that case ace. Any neutral observer has to conclude that the last recession and recovery were significant failures for the Central Bank said Narayana coach coach. LAKOTA name coach Lakota. Half Jewish half in half Sioux Indian. Well speaking artificial intelligence the other day when Syria say when you asked to call that person. uh-huh Siri Police. Let me call Narayana coacher LAKOTA. Pretty well I was actually really well former president of the Minneapolis. Then man said this week you don't remember him he was head of the Fed and Yeah Narayana he used to have a blog. I believe you the coach Lakota Governor Law Lael Brainard said the central bank move too soon when it started raising rates in late. Two Thousand Fifteen Philip. Where are we on this going on with this? The thing that really just crack me up was that ultimately got cracked up over this so yes or areas because because they they basically say that ultimately the Fed's going to screw up. The Fed is at the end of the day. The Fed is going to screw it up Somehow some way and that's how the recession is going to get cost. Yeah and the goal of the Fed is to not screw it up too bad right. It's it's like they just put them in there and say all right Just don't you know that it's key as the title says keep your ears manageable. Yeah You know when you look at what happened last year and going into this year. The Fed you know incrementally kept raising rates Hand inflation inflation wasn't wasn't keeping pace Right and so then you know they had to kind of go back on what they were doing And and actually they. They've lowered rates. What three times this year? Now your hand. It's one of those. Yeah they they almost screwed up real bad because I think rates are so low. It doesn't matter. I don't think it matters. What the Fed does I think they could raise rates lower rates? Who who gives a rip to me? It's a very little amen. You know. They're so right it's it's it's almost zero grow into making a big deal out of current all this and to me it's all bullsh- really yeah. Okay so I can. I'll bite on that can can if I say BS. Well you don't know that is prob- that's fine really. Yeah Yeah you can do that. You could say bs but you just can't say bull where we talk Bulls and bears here on the pre show anyway so so at what point do rates get to where they matter like when they get around five or six percent you know I I I come from when rates were really high too you know and this is this is nothing right I can remember when it was eighteen percent. Yeah that'll serve rate came sent. This isn't anything I disagree. Well you could go ahead the see I think about you know. Let's say like prices at the pump. You know I started driving when prizes were four dollars a gallon. So that's what I grew up in the same principle you know. I remember when they were thirty. Nine cents so I remember going out with it was thirty nine cents a gallon but I thought it was too much. I can tell you if prices went back to four dollars a gallon it would definitely be economic shock them out to my checkbook definitely. So it's the same you know I think the the economy in the market adapts. APSOS quickly to what you know that this interest rates these these are kind of new normal and let me tell you what happened in my career. Everybody everybody went from not having any money and having fifteen percent interest rates to they've all got money and we got one and a half percent interest rates back back in the early eighties. The stock market was a thousand and interest rates. Were at fifteen percent. It didn't matter what you bought. It was all a screaming by every bit of it. A screaming Bala that but nobody had any money. Yeah nobody had any money. They hadn't been putting money into these. 401K plans for thirty five years and now today okay here we are in two thousand nineteen. I was started. Basically basically in one thousand nine hundred seventy eight and was you know my career rates were Kinda low and seventy eight. Then they shot up an eighty eighty one eighty two and the stock market was way down because when interest rates are high stocks are low. Everybody says says they WANNA get interest rates back to five percent. No you don't because you're gonNA take the Stock Market Down to twenty thousand that's right and so many people rely on. Yeah and in everything I would. I wish we could painlessly get interest rate back to five percent. I love babble by five percent municipal bond for people. That'd be great I'd bill the I'd fill them up with act. Chuck of you got it. But it's not there right now into get there would would cause a lot of pain. That's right Philip. You're just too young. But that's that's what it is. You think you've got all this stuff going on man. You're young well. That's what I was saying is I you do your job. The economy had gotten so used to that you know low low base that when the Fed came in and bumped it. You know a hundred basis points. They were like. Oh Wow I gotta pay four percent on my mortgage. Oh what it. Ain't that a bigger deal whether you pay four percent or five percent compared to what we were paying on mortgages yes come on. It's just nothing nothing. Everybody acts like. It's huge we're going from five percent on long term mortgages to four. It's going to be refinancing boom. Yeah so what who cares we gotta take a break. I'm sorry I talked too much. No the newsradio six thirty p today on wwl eighteen to prison trump chemicals. You'll lose majority status. Get the latest John Giant. Very good news phenomenal trekkie and offers Johnson Patriots get brexit done with each radio six thirty wwl. AP Hi this is Tom. depre- junior what does a good financial advisor do. Perhaps it comes down to asking the right questions. Instead of having having all the answers for instance should I take social security now or later. Am I really ready to retire. Is My money invested vested properly to pay me an income during retirement. These are a few of the questions that might come up in your discussion with financial advisor. Good questions agents are what a financial advisor may be able to help you with. You will come up with the answers on your own. If you're not sure about some of these things need a sounding board called the pre financial group at eight five nine. Two three three zero. Four hundred were complementary appointment. Also you can listen to the Tom to pre show on Saturdays Leeza seven. AM At newsradio six. Thirty WWL A big. That's depre- financial group at eight five nine. Two three three zero four hundred six thirty wwl the L. A. P. aw back on the pre show blackstone introduces uses dancing mascot Mr Stone in all this is great. What is this is so good? You talk talk about comedy blackstone. That's that's my copy. Yeah that is a pure company we all know and listeners. If you don't know anything about Blackstone Google go check this company out. Wow so the biggest reason why you invest in any company is is the management right. That's the one thing that really struck me about this. You know when you look at Blackstone You know they had an eventful. So the this is from Bloomberg written by Amanda Gordon Says Blackstone Had An eventful year from CEO. Steve Schwartzman's bestselling bestselling memoir two presidential candidate. Elizabeth Warren's attack on the farm and the rest of the private equity industry so what doesn't need to get it staff in the right mood and the firms holiday for the firm's holiday gatherings Thursday night mascot so it goes on and says you know a lot of people tried out for this this mascot gig That the the chief operating officer John Gray came up with But you know the the mascot actually came in and he was like doing dancing and Conga lines and everything in the office and then you end up taking his. I said nobody knew who the mascot was until he ends up taking his head it off. Was it Schwartzman it's source. Are you kidding me. And they were convinced it wasn't him. Everybody in the firm bought. Yeah the guy's got a sense of humor. Yeah he was going going in going in power meetings. I mean were. They were doing deals and buying companies. He would just shove as my costume on it. Start Art dates in a chair and then all the employees were getting up and going to nobody had any idea was was the chief executive -secutive billionaire Steven Schwartzman. By the way. If you read that book is now. I haven't that could set you on reading core. Okay you we need to get that book okay. Is it a good read. I hear it is. I've rented itsel it a lot of cons. Well that one in Swab Charles Schwab biographer. You're supposed to be real good. Yeah and you just did a really good analysis the Schwab and td Ameritrade by the way. We'll talk a little bit about that in a second okay. That's you know when you look at what he did did You know it. It didn't cost him anything but his time and he he knew that. Hey you know a rally the troops Kinda mentality you know. And he rallied his troops. And when you look at what blackstone stock has done over the last year and you know it just keeps just keeps moving up. Yeah now you know in a market. That's that's on all time housing Schwartzman's still finding deals out there. That make sense to. It's amazing the thing I loved about it is it's it's a absolute pure leadership play from the top down and it. It shows the company of Two Thousand Six Hundred Employees K with twenty eight offices. You know I don't know half a trillion dollar company and it's maybe just gigantic doc. Ganic private equity firm but You know it's about having fun. We spend it at your work. We spend a lot of time in the office. Okay yeah in your colleagues become part of your family try and you share your lives together and when you see your top brass coming in and coming down to the level of where you know we're all hanging out you know telling jokes and having a good time and playing ball with you like that it. It's so it's just so van. I love that in essence. Why this company's doing so well well it's it's it's the fruit of it? It's the fruit. Yeah it's a fruit but good leadership now listeners. If you if you want to know more go to youtube and Google Blackstone holiday video yeah about a six minute video. It's a takeoff from the office. Read the Sitcom Office series. That was so funny. It's it's priceless. Plus you'll enjoy it. It's worth it. We went to visit Blackstone Gosh three four years ago. Yeah yeah something like that. And they're pretty intense. Yes they're wired Titus Banjo you can see either investor relations people and But there's obvious obvious that they're doing something right yes. They built the company from four hundred thousand dollar company. Steve Schwartzman and Pete Peterson heaters. Peterson and they. They came up with blackstone. Because Schwartz means black and German and Peter Means Rock in Greek her something so blackstone is how they got that name from their two last names. And it's been it's been a remarkable a remarkable business endeavor. Yes that's all you can say about it. Everybody wants to work there. Yeah it's the place they much rather work there than Goldman Sachs which is where that used to be the destination you know and I'm sure sure Goldman still is much bigger and has a lot of cachet to it. Jamie diamond is PO. Because people don't I want to work at the bank anymore. Well after what happened in the financial crisis in the way the banks got so regulatory yes constrained rained. Sorbonne's can't do stuff we do stuff at banks anymore right and you used to could do anything. Yeah banking used to be fun back when you were in the eighties in the eighties. which is Chase Bank? I security we had a blast and you know we did deals based on and and the people we were working with regulations. Weren't that they weren't there. Feels good deal. You could do banking used to be what blackstone is today. I know basically basically true. That's all and it's migrated. And Gee was that kind of place. I'LL G imploded MRIs to work there missy Clifton friend of ours he had a great time working at g mortgage security production yes. This is the way these companies were back. Then but everything's changed is now so the fun migrates to another place. Guess where it is. Now do pre-financial. Hey listen we've got a mascot. We're we're going to. We've got one red thunder red sox. It's still tale football grant so stay with us. You're listening to the top depre- show Newsradio six thirty definitely annoyed me when your way to La for our sold out iheartradio alter ego twenty twenty presented by capital go. You'll go backstage to meet Billy Billy eyelash and blink one eighty to the U.. Alter Ego less get tickets for the show where you'll see coldplay the black keys the luminaires shade more. Listen to alternative radio on Iheartradio for a chance to win on IHEART radio stations. Nationwide tune into live x dot com on Saturday January eighteenth hall packages for a living a gas powered Mercedes Benz sprinter delivers transport. People a sprinter band with zero percent financing is a five five star idea if food deliveries your thing than a gas sprinter caters to you. And if you're a general contractor the sprinter with zero percent financing nails it with innovation safety safety and technology sprinter is built for you. And it's built for your bottom line. With zero percent financing the Mercedes Benz sprinter starting at just thirty three thousand seven ninety and for a limited limited time with irs section. One seven nine you could be eligible for up to a twenty five thousand dollar tax deduction gas engine zero percent financing and possible tax deduction now. That's that's a sprinter that delivers Reseda Benz vans born to run and is happy excludes options taxes title registration transportation charge dealer. Prep the options bioavailability Nashville dealer. Price May vary see dealer for details details about cost and terms only valid on two thousand eighteen or two thousand nineteen Mercedes Benz Sprinter vans excluding cab chassis qualified commercial customers only financing offer valid through January. Second Two Thousand Twenty Insults Your Tax Advisor for more information compliant visit MBA dot com new details following last week's deadly shooting at Naval Air Station Pensacola in Florida. Three people killed before authorities authorities killed the gunman a Saudi air force pilot in the states for training federal investigators now examining the suspects social media posts the investigation operating waiting on the presumption it was an act of terrorism law enforcement agencies including the FBI and DHS revealing in one report that on September eleventh of this year shooter shooter. Muhammed al-Shamrani posted on his social media accounts the phrase the countdown has started other posts included references to non Muslims as infidels and al-Shamrani defending Jihad. ABC Stephanie Ramos. Preparations are underway for a full house. Vote next week after the house. Judiciary Committee approved two articles. Nickles of impeachment against President Trump and the US supreme court agreed to hear three cases from President trump to keep his financial records private. I'm Michelle Franzen. ABC News here's an ugly start to the weekend across the area on this Saturday. Cloudy Skies Occasional rain giving way to scattered showers into the afternoon. Temperatures topping out into the upper thirties and low forty Sunday starts out with a partly cloudy Sky then late afternoon and evening clouds. You'RE GONNA thick and quickly with a wintry wintery mix rolling into town to be some cumulating snow especially north of sixty four. Then it's mainly rain to the south that'll take over as we go into Monday. Round the W K Y T first alert weather center. I'm meteorologist Chris Bailey. On your official weather station news radio six thirty wwl. Ap Broadcasting Live twenty four seven from the Harto the big blue nation. This is US radio six thirty wwl. AP An iheartradio station transaction equally. We're talk concert team from wearable technology to electron mix and computers. The best things in life are no longer out of reach thanks to own dot. US own let you rent. Great new electric's quickly after six months of renting it's yours to keep forever shop owners dot. US to get all the top brands today right now. You can even save ten dollars off a check out by entering Promo Code Code Radio. That's ten dollars at checkout with Promo Radio Own. -able rented for weeks own it forever. Let me ask. Do you have discomfort or problems with your knee back or shoulder. 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That's eight hundred. Four eight zero ninety three sixty two six thirty wwl. AP Yeah because this is one the back on the Tom to show why this Berkshire hathaway shareholder isn't frustrated. Warren Buffett often won't spend nearly one hundred thirty billion dollars in cash. Well first of all Warren Buffett does not spend money he invests money big difference. He doesn't spend on anything he he goes to McDonald's for breakfast every day launched. Where's the line I don't know? Yeah yeah he he probably goes to that place airy Queen he goes stairs coin for lunch. Yeah he owns. Dairy coins still lives in this little house. The scene is car just probably a border. It's just a basic doesn't spend any money so what. Warren Buffett will not spend any of that hundred thirty billion in cash. He might invest some of it. Yeah Oracle of Omaha Anyway. Warren Buffett may have one very good reason for continuing to hold onto large chunk. DOC OF CASH. Oh let me think I wonder what it would be. Oh He's worried he might run out of money. He wants wants to successors to be very well. CAPITALIZED AND INVESTORS REASSURED BY BIG CASH cushion. We aren't frustrated because we have owned it for decades and have made an awful lot of money. Bills meet of Smith capital management set on Yahoo Finance is the first trade. It is a little frustrating. Because he's holding so much cash but we believe he's holding so much cash because the statistical likelihood is that when you're too key employers eighty nine and ninety five years old old that when one of them goes in the hospital. Investors are going to worry need to reaction Berkshires stock. When Buffett revealed he had been diagnosed with stage one prostate cancer? Well Hell He. and every other male that at that age you have one hundred percent chance by the way getting pretty prostate cancer the longer you live guaranteed berkshires. A and B shares fell about two. What do you expect act? He's nine eighty nine years old. Of course he's going to give into mortality and Let's see Both those classes of stock rallied about twelve percent to the end of the year is buffet reassured investors. The cancer was not life-threatening. Probably eaten at McDonald's what's GonNa. I'll get him so it's going to be like something even crazier slipping on a paper clip. Yeah who who know Yes a slip that will be. What do you make of this? So he's got He's got a hundred and thirty billion cash and you know the market cap of Berkshire Tires only five hundred fifty one billion dollars and you know they are a big market maker and t-bills Yeah Berkshire so. They are the market in certain classes of t-bills because they own so much but the the interesting thing is that represents what over. Oh It's like twenty two percent of market cap of the company in just cash and cash equivalents right When you when when you factor that in you know well you can't be mad at at really boils down? That he's being prudent. He's being a prudent manager manager. He can't find the deals that he wants to invest in that fit his for his theme and so he's just he's stockpiling cash. Ask for one of two things either. He's GonNa find a deal that he likes he's GonNa find the investments that he likes and he's GonNa jump all over it because he's got got the cash or be the market is gonNa say you got too much cash and we're going to sell the stock and he's GonNa be a happy buyer dry. You know you want to sell the stock down to a four hundred billion market cap. He's going to buy every single share. He can get his hands on his own stock. Yeah so I think what he's doing and I'm going to give you my opinion. Whatever it's worth because I'm so it's worth a lot yet? Just you know so on board the media wants us to thank. He's he's hoarding cash. Because recession is coming right but the truth of the matter is he is a patient. Strategic thinker occur in. You just said it. Fill up the deals not there yet and he's waiting for the right deal that's all. This is nothing more more on agree and and that is exactly right. That's what it is. Yeah that's exactly what it is and ultimately ultimately buffet. He wants to see a stock. Go Up I get that but he he is not the type of person that is inclined to make the to make the short term juice of sort. Yeah you know. He's that type of person that yeah I'll watch it. Go Up you know in the next three years or something for years five years however long it takes when you look at what the stock is actually done year to date Through the third quarter order earnings. You know the the equity is retired and the return on equity is like thirteen percent But the stock has only gone up ten. Yeah Yeah So. They're actually the the underlying portfolio of of companies that he's invested in has actually outperformed stock is done right all right well Berkshire. We don't own that stock for our clients. It doesn't pay a dividend therefore we don't own on it but it's interesting study in business investment for this for this era that we're in it's it's been for a whole era and I think that the other thing too is that that ah cash adds flexibility for him. That's that's that's the ultimate thing. It adds flexibility and when you look at kind of what our investment thesis our investment in style is you know we put a substantial amount of of client a of our clients accounts in you know short term treasury bills els or money market funds that you know adds flexibility to the accounts. Yeah you know you're able to take advantage of markets. It's when when they provide opportunity. And that's all that is you. You have to have flexibility it. You know you never want. I want to be stuck in volatile period with no flexibility right because then you just have to hopefully ride it out at that point. Yep So so you do I wanna say something that just just came on my heart. I don't know why but I didn't. I didn't introduce you guys Philip Sexton. Hey I just jumped right in good to me. Hey we were all the first hour just magic but this just came on my heart talking about warm thinking about Warren Buffett and and you know he's the can a guy that he doesn't invest in anything he doesn't understand he he won't do it in a lot of investors. Are that way that you know like it's a tech company and I just don't understand technologies might be a great deal but I'm not going to invest it because understand it and it takes me back to the story that we've shared before but I think it's worship again and was in office. One of our clients was in the office this week and she told us how much she appreciated the fact that she had sat in an account review meeting with her husband with. Tom and Mike can fill up. I don't know who was in the meeting that day. But they were talking all about these investments in. Tom Spun around out in his chair and looked at her and said. Do you understand what I'm talking about here as it relates to your investment portfolio. And what. We're doing yeah and she said I have no idea. It's not important. You just talked to my husband. He understands it and she said the thing that changed her life as it relates to working with the pre-financial was that Tom said no. You are important. Yes us and I'm going to make sure you understand this because one day you're going to have to be Eli this and she was in this this past week and just happy and grateful appreciative in. That's what the praise all about we issue. Kate are clad in power and we can empower and it's very similar to you know kind of like you know we wanna make sure you understand what you're invested in. Okay no I yeah. That's that's that's the truth you know you. You can't make a decision. was something that you don't understand you know I I. Can I tell people you know. We're we're the first people will tell you we you know we know what we don't know. Yeah you know. That's that's the biggest thing we we know what we don't know we're not going to dive into something that doesn't make sense to us. there's been plenty of times that you know we've looked at ideas and can't really can't really make sense of it and you know you. Sometimes I go up sometimes they go down but ultimately ultimately you know you can't you can't play with people's money at that now Merrill Edge Wells Fargo Embrace Zero Commission so this zero commission thing is stretching out too big. Yeah here. We got people so the zero commission thing is It's really really Quirky When you look at at different custodians You know and this is what you talked about in the first half hour is that you know Soi bond. Td Ameritrade after they. They announce zero commissions. Yeah when you look at at Schwab's portion of revenue actually came from commissions before four. They announced that yeah. It was like eight percent annually came from commissions and proprietary trading You know td Ameritrade a on. The other hand was thirty three percent so so it seems like what happened was Schwab basically Cut Commission's not TD AMERITRADE PRO stock price down because they had to cut and then they bought them. Yeah Yeah Brilliant. Yeah what a play and swabs biggest thing was a in. The same thing here is when you look is the biggest guest. Grab that all of these custodians are after now. Is The cash sweep deposit. Yeah money because it is some of the cheaper deposits out there right now granted. They have a little more volatility in terms of you know going up and going up and down down in the fact that you know investors may use the cash to buy something buy you know buying another investment but ultimately they they've been continuing into grow as accounts grow dividends get paid this and that more people more people save more money. The sweep accounts. Continue to grow So that's that's really what you're seeing is that less and less was being made from actual commissions and more more was was that you had to defend your market share to have the the cheap deposits to go out and build out your banking part of your business the fitness house exactly. And that's that's really what you've seen and that's what you know in in going back to the swab and TD merger you're so td uses td bank as their their banking Lang. which has is kind of confusing to me that you you know basically? Td Bank gets all of the cash sweep and pays them just a small fee you on what it is so you know they they may pay 'em I can't even remember what it was. I think swab ultimately is going to end up with Zoo fifteen or thirty five basis points on the cash sweet money that they get nightly Knightley. Yeah Yeah and then accrued yearly accrued yearly right and you know the that's from the TD bank because they still have the agreement with with them and td bank on those deposits will then go out and you know loan out to mortgages and get. Yeah three and a half percent on it right. which is it's insane? And that's that's what really the the the Market around these custodians has moved to. Is You know who can who can get the most cash who can get the most you know cash deposits for their Bam. which is crazy? That's the only place where they make money though the business is just changing Meryl Lynch Wells. Fargo they're going to zero commission Schwab. Td now you've got J.. P. Morgan is changing their whole wealth. Wealth management thing. I don't know if you all saw that. That's an that's another story. I think we had in the queue. It was but you know what basically weekly there they've done is they've taken their chief marketing officer and made her president. CEO of their wealth management. A group what's that tell you. They're taking a whole new approach to how they start recruiting new business right and and you're gonNA start seeing a whole new world of creative advertising and promotion to bring investments clients back back in the in the end right here. Yeah we're getting ready to see a drastic change. I think really do so going on to that. Article J. P. Morgan takes aim at rivals. Wealth business revamp J. P. Morgan Chase is taking a bigger swing at wealth management. Revamping its business units in an effort to better compete with big bank rivals such as Morgan Stanley the bank is creating a unit that will combine the US wealth management operations for affluent clients in the chase. branks networks works financial advisory business according to memo reviewed by the Wall Street Journal. The restructure business will also include J P Morgan's new. Oh you invest online brokerage By the way the you invest is a no minimum. You know it's a it's a TD Schwab type program. I coughed right light knockoff. To see no that. So what's happening is the thing that's going on with Schwab and TD is trendsetting for the entire industry is including the Merrill. Lynch's the Morgan Stanley's everybody. It's it's a race to know commissions so if you're a transactional broker out there where you've always always just done commission business. Your model is getting less and less mainstream. Yeah it's like. IBM in the typewriter. At that point. You know you're gonNA obsolete yourself as is what will end up eventually happening at that point You know when you look. Get the the the the the bank says the whole though you know and that's gone brought it up you've got J. P. Morgan Chase. They realize hey. This is kind of one of the the biggest avenues cheap cheap in a cash. You know to build out our our balance sheet to write own against inst- so even they're getting into it The the thing of it is ever since I've I've been in this industry. It is fighting to delineate execution versus advice. What am I willing to pay for advice? And what am I willing to pay. For execution an execution is rapidly. Going to zero. Yeah what will I pay for. Getting a trade executed used to be that they would talk about people. Say Come to go with us. We can get your trade executed. Did better that sort of thing. There is no high ground on that anymore. It's all a level playing field so what you're GONNA do. And this is where if armlock depre- financial group which is our firm figures into the picture. We are all about advice. We're not being paid execute trades. We're being paid to give advice on where to where to put the money. Yeah I mean you know not just the not just the investments but also where to house the money. Yeah which one of these custodians is best for you right you you know. And that's that's the it looks like the TD Ameritrade Schwab thing in some ways is a marriage made in heaven because td Ameritrade had some issues with the loss of the commission stream. Yeah but Schwab's got some issues with technology exactly. Td can help can help with exact and and you know when when td lost the commission stream they were going to have a problem. We we now. Maybe a a potential problem long-term of of technology ability you know keeping up and being because td is the leader in technology. Aga The the industry you know into to to stay at that level. You've gotTa Invest Capital and it's more your capital capital up than anything. Yeah and so- Schwab was like. Hey you know we are our our system of producing income is extremely different than td's we can. We can bring them in house and make more money from you. Know what they've got going on But they they can also have the ability to to continue to produce superior technology by buying TD TD Ameritrade Schwab's getting ready made technology upgrade. Exactly they're they're getting technology upgrade by behind the company. That's really why they down isn't it. Well it's part of it. It's a big part. Yeah it's also the assets under management right but Yeah this this is. They're getting somebody that's invested it's why it's why. JC Bradford had seldom painewebber aim Weber. Back years ago. Couldn't keep up. Technology was so. I'M GONNA go back in time. Phil phone understand this that many many years ago back in the days when prime rate was eighteen percent we had what what what I think we used to refer to as the big ten accounting firms. Is that right. Was it the big eight big eight thank you. We had the big eight accounting firms. It was eight a large national accounting firms. And that's peat Marwick and Mitchell Ernst and Young I'm thinking it was Ernst and Whinney Back Winnie. I mean you've got road. CHAZ IC was one of them peat Marwick and Mitchell. I can't should should know these. I just I've I didn't do my research I couldn't tell you but but the reason I bring that up. That's what I really feel like. We're seeing here in the financial service business it's consolidating and it's GonNa. There's there's only three accounting firms now. Yeah I think that's left okay. And they just continue to buy these large regional firms. And I think you're seeing this in our industry and the reason I bring this up is because us. That's one of the great benefits to pre financial group. We're not going to be. We're not a target for them. No and we we never will be okay. Because we're a principled okay organization. Yeah that that integrity in relationship management with our clients is absolute foremost Yup. And you know we were talking about how we educate cad and power and all that other stuff but what we really do. You know you were talking about advice and how much advice we give but We provide a relationship plan. Yes that is as long term that is generational generational. You know all the things that when you're big big guy in the SCAP that's technologically driven. Don't have they don't have any habit they can't have it. They have a computer screen with a lot. A pretty graphics and a lot of click and punch in chat rinse. That's what they have you. Call us at eight five nine. Two three three zero four hundred set up an appointment to come in doesn't cost you anything we're not gonNA threaten you. WE'RE NOT GONNA core into into your account to us. You will course yourself when you hear what we're talking about but it's it's it's enlightening. It's helpful to you well and I I think the song I can't even remember who sings it but of course we're not Jesus or God or anything but it's the same principle and he walks With Me Philip. You've been listening to the Tom Depre- show if it passes quickly. That's still football ward. We're we're so proud of ordering award and our kicker Yep now Max. Duffy got about to add national award. Yes football it's about football Tom. DEPRE- show newsradio six thirty P.
Crude (Oil) Realities; Italian Lockdown; Hedge Fund Manager Kyle Bass
"Today's uncertainty may cause you to question your investment strategy but with the right perspective and investment solutions. We think it's possible to stay on track toward long-term goals with John. Henson abandon your dance. Not your financial goals bringing show musically squawk pod daily podcast brought to you by the team behind squawk box worst. Cnbc CONTROL TO CNBC's essential morning show every day. Get the best stories. Debate and analysis from the biggest names in business and politics are coming to a next today on squawk pod global market turmoil and maybe an oil price war due to continuing concerns on the corona virus matters. How much fear it's created in the marketplace investor. Jason Trento. We have a little bit like a bank. Run how to contain the spread former head of the FDA Dr Scott Lee barge quarantines and and lockdowns like. Didn't it Leeann? China won't work here. We're well past that point because we now have this seated in multiple cities and what's next for oil after its steepest. Plunge since the Gulf War Hedge Fund Manager Kyle Bass But one cure for twenty five dollars. Oil is twenty five dollar oil so it won't stay here for long because none of the producers make any money at these levels those stories and more. I don't know if I'm hoarding yet. I bought a lot of Docs. I'm CNBC producer. Katie Kramer it's Monday March ninth twenty twenty. Squawk pod begins right now becky by in three two one good morning everybody. Welcome to Squawk box here on. Cnbc live from the Nasdaq market site in Times Square. I'm becky quick along with Joe. Kernan and Andrew. Ross sorkin our guest. Today is Jason Trainer from Strategic Research. Partners I up today on the podcast crude reality in crude prices. And you don't see moves like this very often. The global price of oil plunged today falling after OPEC failed to strike a deal with Russia. Over production cuts that means the cuts? Currently in place will likely expire at the end of the month giving oil producing countries. Free rein over how much they pump on Saturday. Saudi Arabia slashed its selling price for April and the kingdom is preparing to raise its production as you'd imagine big oil companies like Exxon and Chevron here in the US started trading lower and this pressure caps off two weeks of volatility in the US markets. This is a situation where you had OPEC and Russia who had the OPEC plus as they call it. Who had been cooperating for a long time Finally Russia said forget it. We're not going along with this far. The Saudis are saying. Just stick it to us. Well stick it to everybody. We're GONNA punch off the money and show but but nobody's swing producer if anyone is it's not Saudi Arabia anymore. Nope that's what I'm saying. I think they just stick it to us. I think it's weird is it. This is supply but it was caused by by the the specter of demand. Right going down so but this is definitely supplying everything. We're talking about. China all of it is supply components and demand components though what you've been watching a WTI up to this point had been completely the demand and the concern about how demand is looked at thirty percent drop is purely so Saudi look at where we rushing firm amazing and someday we'll look at it and it's not a silver lining but man things are going to be cheap to pump pretty soon Quick though no it's not it's a reflection of demand globally which is gonNA fall but it's also that there is a supply people were saying it's tougher transition to all your stuff with thirty two dollar oil people guy tougher to transition to all the stuff with stocks down pressure on demand. Precedents apply pressure on everything. I mean you could argue all of our conversations were I don't want to say and market bubble conversation but when when things are going well you can you can change and things are not going to spend all of this money for carbon tax car and everything else that goes along with with Delta. When you're watching demand call eight hundred percent. I mean you know this is real in. It's bad and it's real bad but the end of the world only happens usually once. I think it can only happen but we are. You know. There's going to be some things on the shelves where you're like. Wow I can't have that anymore and so that that are like wait. I can't eat here. There's no Vegan stuff I mean that may become less important as we go all this stuff. That millennials have. Oh my God. I can't log into my APP. My my life is ending all these things. I mean. We've had pretty good for a while and I'm not saying we're not going to but I think the next couple reality. I bought a few things. I admit in you from hoarding yet. I pop Dongfan a lot of dogs through that really quickly not us were. We're GONNA talk about what's happening in Italy but I think I don't want to say that's coming here soon but I think they don't become here's your right. I saw a South Korea mortality rate where they have the best testing and the best mortality rate in. Its point six five. They're testing has been pretty phenomenal right. So it's somewhere between point one and one point zero. It's not three point two. Which would really Neil Ferguson? If you look at the numbers look you have to remember that? You're you're also looking at an area where people can get a lot of healthcare it. I think the higher incidents are in areas where they don't have the same sort of quality of some Germany how many how many out very few injuries early yesterday. Italy's government took the extraordinary step of locking down much of the northern part of the country restricting movement for about a quarter of the Italian population. It's the most sweeping effort outside of China to try and stop the spread of the virus and is seen as sacrificing Italy's economy in the short term to try and save it from the worst of the virus. Vanja joins US right now with more on that. And what can you tell us this morning cloudy? Good Morning Becky. The coronavirus epidemic saying Italy is really taking a toll on the economy here which was already lagging behind compared to the rest of Europe and he was still recovering from the recession for ten years ago. And now these taking him back to the point that Today we saw the stock market allowed the foot dropping by ten percents. Even now I just checked it as about minus nine point eight percent of course as Similar to other stock markets across certainly It is one of the worst performances out there For now well. The Prime Minister of Italy Giuseppe called the last night aware of course of this situation. And how bad the impact on the economy said that they are planning to introduce a shock therapy in order to counteract the effect by from November's Bill De Account Talion economy. The shock therapy includes right now. Something that was presented by the Economy Minister Couple of days ago. They said that they're going to inject at least seven point. Five billion euros. That's nine billion dollars into the economy in terms of investments and so forth and also they are planning to increase the budget deficit deficit goal to two point. Five percent from two point two percent with the help of course of a more relaxed European Commission restrictions becky Claudio. If you if you look around you does it. Feel different there. You're not in the lockdown. Play you're not in the lockdown areas. But how does it feel where you are even if you're not in lockdown area of the whole nationwide? They close down at museums. Closed down archaeological sites right. Now I'm at the Coliseum. Usually displays is battling with people especially in the beautiful Sunday. Like this and this is the start of the tourist season. There's really not many people around. Because the war spreads the colosseum is closed. The forum is closed and all the museums are closed and this is one of the sections of the economy that are being really batard living tourism. This being a massive drop in the number of people who are visiting Italy. And we don't know when this is gonNA end Peggy Klaudia. Thank you very much. We appreciate the update. Global Investment Strategist at pro shares advisers and our guest host says we have mentioned Jason Trent Strategic Research Partners So semi what. What your words of wisdom this morning and whenever we are in a period like this we hear you know. Just keep calm. Keep keep your wits look for opportunities. Is that what you would say this time or or is this time where you say if you get any bounce at all. Maybe you should lighten up. Where are you? There's what do you do in the midst of this is how you position yourself as we hopefully get out of it at some point which we always have as you said the world only ends once going forward the biggest Correction we've had an pandemic over the last X. number of years Zico which was twelve percent and markets have been up six and twelve months hence after just about every pandemic that we've had so the piece that was referencing with new Ferguson. Goes BACK TO H One n one in the swine flu and in looks at comparisons there but most people are saying. This is a fifty year viruses. Isn't maybe it's not a a hundred year but it's a fifty of us. So it's not like Zeke. It's not it's not like things but we don't. I don't know what it's not whether we know it or not. It matters how much fear it's created in the marketplace and therefore how much supply shock and how much demand shock there's going to be and to the extent there's credit in the system how systemic. That'll almost doesn't matter I don't want to. I don't want to debate the health issues in the people. This is a very polarizing issue. Scientists both sides lots of different views. But I'm just suggesting that there seems to be. I think there's a decent chance at this point that they're going to be some systemic real issues in our economy in the world shut down for a month completely but reopened unscathed. The impact of markets would be single digits correct but there is collateral damage. And that's why we're waiting to hear more fiscal policy stimulus. I mean Eric. Rosengren came out and said the Fed should be buying things perhaps other than other than treasury's and things like payroll tax holidays and things that we're seeing China obviously does it. But at least down South Korea's announced I mean you have to do something different. I think my own opinions. You should start talking about it now My own opinion is. You're also likely to have a slingshot in both economic growth and cyclical shares in the second half of the year. Hope that's that's a hope but there are some credit There are some credit knock on effects particularly I would say in the energy sector more than any other sector By the same token there has been already a fairly vigorous response on the part of the sad. You're going to see more. And I'm convinced that you're going to see more fiscal and regulatory stimulus plans coming out of the Administration knows you think the feds GonNa cut more or I think they have to be mainly because financial conditions have tightened or continuing to tighten. So where the biggest problems? Biggest problems are largely in the fact that financial repression and a and a pushing interest rates down globally by central banks. The irony is that it's creating a debt problem you've created a vacuum in which a lot of marginal companies can get access to credit. Those are probably it it just slows things down. As far as the financial markets are concerned. The financial markets. Don't make things worse for good companies. But they're saying they should let the tide stay. There's nobody sees Susan Y- I think for the time being there's no you're you're already here. There's no sense trying to tell you that I was going to announce that I was gonNA announced I was going to you. Know bolster the airline's somehow some kind of bail out. And I was GONNA do unemployment insurance for ninety nine weeks and I'm going to come up with your best pair. A payroll tax cut would make a holiday right. Yeah you do all of those things. I know what the market will do. I want to know what you think. The underlying economy does well it? I was in three weeks ago. I can say it was business where I was in Italy. I was been in last week's been. Okay what part of the I was. I was in the lawn. Llegado came on February. We were in Milan Milan. I was in Lugano which is about an hour away. I was in Australia a week and a half after that. Wait a second where I'm where else have you been? I've been to Zurich Milan and Lugano when you go in the past in the in the week and a half. I've been home a week and a half from gets enough. I've I've taken my temperature. It's fine I I I honestly I have to say there's a little bit obviously given what the markets are going through. It's understandable that people are are nervous by the same token. I think we have to keep things in some sort of perspective in terms and I can say three weeks ago. Italy in Italy. It was business as usual. There was no problems. Now you were peaking plant. It's not your problem. You're likely thinking I I would argue in terms of the what the with policymakers Italy have done particularly in lumber in liberty region. You're probably GONNA peak in the next week or two that would be my opinion is the question becomes. Do we see measures like that here? There ten million people under quarantine now or who have been that they can't go about business as usual in Italy. Sixteen so we were talking about this off camera but the political issues will be a little tricky. You know if you look back at the great recession you have people that say auto auto bailouts will great bank bailouts were evil and I think that coming. It'll be the lag from fiscal stimulus in terms of the politics. That will be the challenge here but I do think if we get something meaningful. That's the most important thing because most companies just need to be if they need help just needed temporarily. But it's a political a little bit like I I would agree. There's a little bit like it. You have to treat it in my opinion a little bit like a bank run which is to say the confidence competence visibility on. The part of policymakers is very very important. I'm not minimizing that. We have a bailouts because I'd spent all that time in two thousand eight thinking about all of this since then for ten years and the problem the conundrum that I face every time I think about this is I don't think I could give these companies enough money to necessarily depending on. What kind of company they are you. Talking ABOUT CRUISE LINES. Somehow ultimately solved the problem. I don't think I'm going to solve the problem in toy until there's a vaccine that people believe in I don't think it added people needed it to create the confidence. I'm not sure that you get the competence unless you have the medicine I would just say. There's there's a dramatically different Dramatic difference between a systemic problem with the banking so signed a systemic problem in airlines and cruise lines which are ex- extremely important. Actually could be a big hit. Once there's a vaccine though in my opinion you're not you're you have a deadweight loss. Make up only going to be ready for the next. The next season of this vaccine. It's well over a year. Eighteen months eighteen months so we're not going to list. Then you're I mean I doubt whether we'RE GOING TO BE ON PINS. Question is can you get the testing's just get your arms around? How big of an trying to do that. I still hoping that the trying to model is is. Maybe not replicate replicable exactly. But I'm hoping that there is a way to cap it so that it it peters out and it doesn't become a question because you're out one hundred and five thousand globally right now. You're not you're not at one hundred. Here's the question. What say you decide. You were gonNA affect shutdown all businesses United States for two weeks. Say WE'RE GONNA INCUBATION PERIOD. Or whatever it's going to be everyone's down for two weeks but at the end of those two weeks would've you solve the issue. Insofar as we have relatively open borders if other people then come in you could restart the whole thing I mean. That's that's the great conundrum about this particular issue. And it's what is it it's march. We don't see. Singapore people pointed out. That seems less. We'll see you know one of the other things as children seem like they don't even right. You know they barely notice if you don't catch or symptoms are so molly you don't even notice it just care and that's actually for most people under the age of your sixty that it's actually. Please go to sixty. That's well above. That problems are really seventy and above or and above conditioned underlying bigger issue the underlying condition of when? You're eighty eighty. No that's the guest that a lot more people have it but the mortality rate is much lower. All right. Thank you Jason Trait. Back from his world tour next to you okay. I feel fine. There's a fourteen days Beijing period. Cheese will be next nets unsquashed. Pa The former head of the FDA on the health measures that will stick after corona virus. Just like after nine eleven security was put in place but some of it never went away some of the steps that we take now will be in place for a long time. We'll be right back all right. Thank you Simeon Jason. Straight back from his world tour next to you Okay I feel fine. There's a fourteen day period. Cheese will be next next on squad. Pod The former head of the FDA on the health measures that will stick after corona virus. Just like after nine eleven security was put in place but some of it never went away some of the steps that we take now will be in place for a long time. Be Right back. Today's uncertainty may cause you to question your investment strategy but with the right perspective and investment solutions. We think it's possible to stay on track toward long-term goals with Jackson. Abandon your dance. Not your financial goals. This squad. There are now over. One thousand confirmed cases of Cova nineteen over one hundred countries and so far three thousand nine hundred deaths worldwide Italy Iran and South Korea are among the countries most affected by the outbreak. As you heard earlier. Italy has taken logistical action to keep its population healthy in the US case numbers have more than doubled over the weekend to greater than five hundred. Forty numbers are expected to increase as tests become more available. Andrew Becky Joe and the CNBC reporter heading up our corona virus coverage meg. Terrell spoke with Luciana Borio former director of medical biodefense preparedness at the National Security Council and Dr Scott Gottlieb Pfizer Board member and former FDA commissioner. Here's Andrew let me start with you Dr Galley. 'cause we've been talking to you now for the past several weeks but this weekend it feels like this whole situation both in the United States and also obviously in Italy has moved to a new place. This is a new chapter here. Yeah I think we've reached a predictable ticket. Tipping point where there's going to be a rapid acceleration in cases here in the United States. We still have a narrow window of opportunity to implement tough mitigation steps that could prevent a very large epidemic in the United States. But we're losing time and we need to start taking more aggressive steps right now to try to contain the large outbreaks. That are in probably multiple. Us cities right now To prevent broader epidemic. And try to get to a point where we don't exhaust the healthcare system. The goal is to try to make sure that the peak of this epidemic and we are headed for an epidemic. United States doesn't become so large that you get to a point where you've exhausted the healthcare system. And that's what happened in Wuhan China when they when they exhausted their healthcare system. That when you saw rapid acceleration and if Italianate in that region so what does that look like though just so we understand what it looks like is widespread school closures in areas of outbreak. closing businesses closing places where people gather indoors like movie theaters shutting down large events asking businesses to have workers tele- tele- work. But you also have to step in with assistance not only to assist the localities and states with money from from the federal government but also people who are going to face significant hardships from these measures. We should do this upfront as an inducement to get localities and states that take these tough actions. We're going to end up with a massive fiscal package. A bail out on the back end of this. We're better off using that money upfront. To help by some of the actions that we need to mitigate this epidemic Ravin Spain that money on the back end after. We've had a very large epidemic. We'd be better off spending that money now to induce the kind of actions. We need to say Scott. Where where are we talking about Areas that are affected. Obviously that would be Kirkland Washington but are you talking about Westchester New York at this point there's many outbreaks all over the place. Yeah it's broader than that. I mean we. There is the potential that if we don't take tough measures right now we could be looking at tens of thousands of cases in the United States. That's not unrealistic. If you look at the number of cases in Italy and Singapore and you apply that overall population you're looking at tens of thousands of cases in the United States. We have multiple areas that are dense population centers where you could see widespread transmission since it looks like going to school and work in places like New York City in Westchester. And just very broadly should these things have already taken place here. No well the good news is businesses are implementing mitigation steps. I mean the private sector really has been leading here trying to engage in social distancing and reduce the opportunity to raise a transmission. It looks like there's a large outbreak in Santa Clara. California Seattle New York might have a large outbreak. There's going to be outbreaks in multiple. Us cities simultaneously. That's why we're well past the point containment in the United States and large quarantines and lockdowns. Like what they did in. Italy in China won't work here. We're well past that point because we now have this seated in multiple. Us cities work year Ducks cargo hold on for a second. I WANNA get duct boreal in just a moment but I know that make. Terrell has a question that she wants to jump in with your thank you Dr Boy. It's a question for you. I'm just wondering how you would assess the testing capacity in the US right now. We are seeing commercial companies now coming online. How are we doing How would you assess the messaging from the government on that? And where do you expect to be by the end of this week? So the good news is that Today believe the the commercial developers the big ones are coming online and the capacity is going to increase significantly the bad news. The good news is that we're going to be able to find a lot more cases that we know have been circulating in America and We're GONNA see how steep this epidemic curve is going to get. We are just at the beginning of this epidemic here and the numbers are going to accelerate dramatically dodger borio terms though of how quickly we can get even the testing done properly. I'm looking into New York in New York numbers by the way not to make this Selfish about US right here but you know over the weekend. We went from forty nine cases to one hundred sixteen. What multiple do you think is actually really out there right now because it's very difficult to predict but I know that it's already too many for us to delay implementing measures to mitigate the supper dominic? It's very critical. Dot Lee has stated to be proactive and take measures to increase social distancing The this virus circulating broadly across the United States even states that have not reported yet are likely to have cases aren't so it's important to do everything we can to enhance shows social distancing now the degree with which replacement does measures may vary from locality to locality base number of cases. And the way I see this as a lot more like a shutdown partial shutdown but not a lockdown. We should not be talking about lockdowns in America. What happened in Italy? Was the right decision around decision again. The Way I see this here is that we need to. The goal is to have social distance stain. A lockdown so not do anything to to Enhance social distance thing for the relations under lockdown so the goal is to apply technologies. Apply the innovative systems. We have The business has been very proactive in that to to improve an individual's have a role to play too. It's very important. Everybody has a role to play It takes some responsibility to make sure that they do not go to work if they're sick and to stay out and avoid places travel cruises doctor. Guy. You're in Washington right. Now you live in the Tri State area. Are you planning to get back? I'm GONNA fly back? It looked but I'm taking precautions. We will get through this and we're going to look back on this one day and say that was bad but we will get really say. They're taking precautions. What does that mean? Well look I'm being very vigilant about touching services. I think I think a good portion of the spread here probably is through services and not just respiratory droplets. I'm not taking pass things on an airplane. I'm not taking things from the stewardess cups and glasses and food. I'm being conscious of my personal hygiene. I'm the blast aboard. So I'm doing things to try to avoid contact and engage in social distancing and these these behaviors practiced on a mass scale are going to have a significant impact on transmission. Here and help reduce the rate of transmission but it needs to be led by the public sector as well as the private sector where people share computers and desks. I think things should be cleaned. Well we'RE GONNA start. Implementing heightened requirements for hygiene and offices and workplaces and also deep cleaning. And some of this is going to last. Some of this won't go away just like the nine eleven security was put in place but some of it never went away some of the steps that we take now will be in place a long time and that's probably a good thing. We're GONNA maybe have reduced flu season's because people are going to be more vigilant about hygiene and workplaces and other gathering places. You know the one thing I will say. That's very interesting. I flew this weekend. The airlines have done nothing to step up practices on the airplane. Stewardess was not wearing gloves. Warren passing out personal hygiene products. Like parral you know if the airlines are worried about reduced volumes to inspire confidence and travels they should be stepping up measures guaranteeing that they're doing deep cleaning on airplanes and not requiring down cleaning. When when you turn around a fight that quickly I mean maybe they have to add more time so that they can wipe down seats better but if they would step forward and tell the public that they're doing that maybe the public would feel more confident about getting a airplanes right now after nine eleven they stepped up security and that helped inspire some confidence to get back on the airlines. They've done nothing absolutely nothing that I've seen that was visible to me. Broadly travel. I don't think we're at the point where people should shut down their travel right now and I don't think we should ever get to the point where we coordin- off parts of this country and prevent people from traveling. I do think people need to be more aware of being in crowded environments and on airplane is not the air quality that worries me. I don't think this spreads easily through the air on an airplane. I think it's more of the touching surfaces in the unclean services And passing things back and forth between passengers which starbucks did to stop refilling cups that people bring in for their own coffee the barrister. That's brilliant. Because what would happen if someone would bring in their dirty cup if they may be corona virus. Give it to the Barrister Barrister and touch the cup and in touch the next thirty cups if all businesses thought about steps like that simple things that they can do to reduce transmission. We could really have an impact on this but we need leadership. We need to be talking about these things in a systematic fashion. We also need a systematic approach to win localities. Close schools closed businesses. Cancel large events. We need to be all working off the same kind of playbook Dr Gotlib Ciano. Thank you both coming up on. Swapan hedge fund manager and notoriously outspoken investor Kyle Bass grasping for when the financial markets. Ep Virus I think it'll be about a month from now this. Cnbc podcast is brought to you by TD Ameritrade. Investing isn't one size fits all every investor has a unique style that's why. Td AMERITRADE offers two different mobile APPS. There's TD ameritrade mobile which lets you manage your portfolio with streamlined. Simplicity or thinker. Swim Mobile. Which gives you tools. You need for more. Advanced Trades and in-depth analysis visit td Ameritrade dot com slash APPs to find the one. That's right for you once again. That's TD AMERITRADE DOT com slash APPs. Welcome back to Squawk box. This next conversation. You'll hear with Kyle. Bass founder and Chief Investment Officer of dallas-based Hayman capital management. His firm focuses on global event driven opportunities in the marketplace bass is arguably one of wall. Street's biggest China critics making headlines recently for a twitter spat with the editor of China's state run newspaper Global Times is investments are closely watched in the business community in large part because he predicted the subprime mortgage crisis leading up to the great recession. Here's Joe on Squawk box this morning kicking off our conversation with Kyle Bass call you have a always have a global look at things and you have areas of the world that are already over leveraged in very sensitive to something that might happen. Is that where you WANNA start? What whatever you want to start you go ahead. We'll just just WANNA listen to what's on your radar this morning. Well Good Morning. I picked a hell of a morning to come on but I think that Going back to your questions about oil. You know being here in Texas and knowing a lot of these producers and and a lot of the people that move move oil around One thing that the that the trump administration has been doing and what Kushner's job has been Catting around the Middle East is to get oil prices. Lower I I don't I think they needed to be careful what they wish for. I think they don't realize that. Anything below forty doesn't work and he he definitely achieved this mission and getting oil prices lower. I as we all know A number of US unconventional shale production Is going to end up bankrupting itself. And The one cure for twenty five dollar oil twenty five dollar oil so it won't stay here for a long. Because none of the producers make any money at these levels and then what will the collateral damage be of of of oil curing? Its own problem at twenty five but in terms of corporate problems and sovereign problems around the around the world the sovereign players that that benefit from a loyal price Like Japan China in any of the others that have very very few natural resources and then there are those that that are going to be hurt. Pretty dramatically By royal being at thirty or twenty or wherever it ends up you know the regime in Iran is already dealing with the largest existential crisis. That it that it's had with it's With Krona virus running through the the ranks of both the the leadership and the rank and file and that population. We think that that the The the extent of what's happening in Iran is being dramatically under reported And so you have places that are. Let's say not so politically stable are going to go into a state of complete disarray. And I think that I think that's also a problem. Geopolitically are going forward he kind of broader question. What do you think is baked into the market right now? In terms of how bad things get here in the United States and elsewhere and as they relate to the virus as they relate to the virus. That's what I understand this morning. What what what. The market is actually expecting versus. What could happen both by the way on the downside and perhaps even on the upside hopefully as we all know this too shall pass. It's our view at our firm that that the summer months will end up burning the virus Burning it down to where we see a decline in new cases once we finally get the cases tested number one. I can't believe that we don't have testing stations in every major city in the country that that should be a open and close issue than like a can't approach any kind of pandemic and that's something. Our country should develop but as far as what what is factored into the market. Today you see European markets down anywhere from seven to nine percent. Our futures are locked down five. You know I think that our market has a lot of this virus factor in When you look at where airlines stocks trading when you look at cruise cruise stocks are cruise liners when you look at anything that has a large public presence like theme parks. You already have a pretty significant recession priced into the stock so anything that anything better any turn in the number of of infections once we get everyone tested is going to a very positive event. the different. I guess the question that we must have is how many of these companies have enough cash to make it through that That divide and You know some of them do some of them don't but there there will be some amazing things to purchase on the back end of this. We just we as a firm hope and we as a country hope that we don't see a resurgence of the virus in the in the fall because as we all know the thing that worries me the most about this is their only about nine hundred forty thousand hospital beds in the US at any moment in time there six hundred thousand of them being used three hundred forty million people in the US. We can't have any kind of significant infection with any any kind of acuity here without having real problems with the number of those. That need to be Hospitalized hey you said that there would be big bargains to be had at the end of this are you. Are you buying anything today? I do think it's too early. I think that We haven't gotten around to even the first round of testing in the US. You have a number of cities that immediately declared states of emergency That that That Ha- that really don't have any significant confirmed cases. I think you're going to see the ranks of the. Us started put up. You know a few thousand confirmed cases right away. And that's just because we're behind on testing so I I think peak virus if you're if you're asking for when the financial markets EP virus. I think it'll be about a month from now. So Kyle is that mean that you are selling into this. I'm definitely not selling into this but we are look. There are a few companies out. There that are that are going to do really well on the back of this. I'll give you one example six flags theme Park Company And these companies are heavy and real estate. They have great operations around the country. But it just like an airline. You can't have revenue disappear when you have such a large installed fixed cost base so those companies are going to be the most conduct's on the way down. They're also going to be the most interesting value plays once we see Peak virus infection rates. But there's a month to go what are you doing between now and then I mean watch one of the most interesting Financial Collapse that we've seen right in the last fifteen twenty years this. This isn't two thousand eight right. Our banks aren't going broke But there will be places around the world that never recapitalized in the last Crash she thinking about Europe the Never recapitalized the European Bank. So if you look at where European banks trading today and where they will be In the next six to twelve months to Europe's going to have a real problem Italy their banks are basically going to become insolvent very quickly. Italy's got north of one hundred and thirty percent debt to GDP and they know capital and their banks. And so what's happening in? Italy could be the knockout punch for Italy. Either we're going to see a default within the euro zone in Italy or we're going to have to see the Germans. Germany will have to change the capital key in Italy. Ecb's going to have to go in and really help Italy and let them expand and then the other the other economy at risk is Hong Kong. The most developed area. I wanted to ask you about so China. We've had many times talking about the trade war. What is this throw into the entire mix yet? Do you believe the numbers that you're hearing from China. Did they handle this and and cap it? Should they be reopening the factories and theme parks and everything else at this point? Do you believe numbers. Yeah what what you what you learn about the Chinese Communist Party is they. Don't care about their people as much as they care about Maintaining power and I think they know that if their economy Stays too low for too long? That had that crisis for leadership From a power perspective. So they're telling people to go back to work Entirely too early and no one believes any of the numbers coming out of China. And it's it's interesting right. The first thing the Chinese government did was they arrested the seven doctors in Wuhan that found this virus in the first place late last year. They're not only arrested him. They forced them To issue an apology and then they quote punish them. God only knows what they did to them when they punish them and somehow the W. H. O. is lauding China for doing the right thing and taking charge of this virus when all China did was do a major cover up for God knows how long so I don't believe any of the numbers out of China but what's most important is China's banking system is three and a half times. Gdp You know. Hong Kong's banking system almost nine hundred percent of GDP and their economy is off. So you've got what we're going to see us something worse than the Nineteen Ninety eight Asian crisis over there over in South East Asia and I think the epicenter. We'll be China and Hong Kong. Okay thank you kyle So much to talk to you about come on back Maybe even this week so we can keep walking through this. We use your sanity that squad pot for today. Thanks for listening squats hosted by Joe Kernan Becky quick and Andrew Ross Sorkin tune in weekday mornings on CNBC at six am eastern to get the smartest takes and analysis from our TV. Show right into your ears. Subscribe to Squawk Pod. We are available for free on Apple. Podcasts spotify stitcher wherever you listen and say hi Tweet US ask Squawk. Cnbc will meet evacuate tomorrow. Thanks guys this. Cnbc podcast is brought to you by TD. Ameritrade investing isn't one-size-fits-all every investor has a unique style. That's why TD AMERITRADE offers two different mobile APPs there's TD ameritrade mobile which lets you manage your portfolio with streamline simplicity or thinker swim mobile which gives you tools you need for more advanced trades and in-depth analysis visit td. Ameritrade DOT com slash APPs to find the one? That's right for you once again. That's TD AMERITRADE DOT com slash APPs.
Davos Day 3: Jamie Dimon, J.P. Morgan Chase CEO & Chairman
"This CNBC podcast is brought to you by TD. Ameritrade dea wish you had a second opinion before placing a trade with strategy gut check from td Ameritrade trade desk. Ask you'll get a second set of eyes on your trade idea to help you make decisions with more confidence. Their team of experts is available to help you weigh the risks and potential rewards boards. So you understand the INS and outs of your trade to learn more contact the trade desk at td Ameritrade Dot com slash trade desk where smart investors get smarter members. SIPC bringing them show musically. This is squawk pod the daily podcast brought to she by the team behind squawk box. CNBC's essential morning chef were given out every day. Get the best stories debate and analysis from the the biggest names in business and politics today on Squawk pod another day at the World Economic Forum in Switzerland. Another set of big interviews for the pot. Today's highlight show becky and Andrea with the CEO of J. P. Morgan Chase Jamie Dimon James Great to see you today. Diamonds take on our government meant unique government policy government policy. Good comes only globally. It will solve this problem. Our Economy the markets right now are fine. I mean they're in the goldilocks locks place. It's kind of one of the great experiments of all time and we still don't know ultimate outcome is and much more class the best of our conversations with the CEO's comcast Goldman Sachs and Chevron and with Treasury Secretary Steven Mnuchin all in this episode our last day in Davos I'm CNBC producer. Pretty Soon Cameron. Kosta it's Thursday January twenty third. Squawk pod begins right now rock and roll good morning everybody. Welcome to Squawk box here on. CNBC we see. We are live from the World Economic Forum in Davos Switzerland. I'm becky quick along with Joe. Kernan Andrew Ross. Sorkin this week while Joe Becky and Andrew have have been hosting our TV show from Davos. I've been here in New Jersey listening through their interviews to pick the best most interesting bits for you. Our podcast listeners. There we're a lot of conversations to choose from we had a bounce forty five guests and those are just the ones they did for broadcast so we're not counting all of the panels dinners and breakfasts or the snowy travels in between but the hard work was worth it with each interview. They delivered news relevant way beyond beyond that Alpine ski town. Some of our favorite bites from today in Davos. US Treasury Secretary Steven Mnuchin in the president's asked us to start working on what we call tax likes to point out. They'll be tax cuts for the middle class and we'll be also looking at other incentives to stimulate economic growth of Severin. Michael Worth Oil. Markets really really changed over the last decade or so we've moved from a period of time where there was a belief we've approaching peak oil and now we're in an era of abundance and it's really the US and and it's the unconventional horizontal drilling. So you really have a market now. That is less prone to these volatile excursions. Does that mean we never say one hundred dollars again. We may not see it for a long time. Getting getting some of the most attention on Wall Street today comments from Goldman Sachs CEO. David Solomon on adding diversity to his board and all boards this year and beyond starting July first in the US and Europe. We're not going to take a company public unless there's at least one diverse board candidate on women and we're GONNA move toward 2021 and requesting to and we realize that this is a small step but it's a step in the direction of saying you know what we think this is right. That's a big move and that's a breaking the news that you were talking about last night when you said you would tell us one thing. We didn't actually you said to me. Will you tell us one thing we did. Not I said okay. I'll tell you something that you know at a forum sometimes criticized the lack of actionable items Solomon mapped out concrete steps for CEO's around the world also unrelated but fun fact did you know the Goldman Ceo uh-huh Moonlights as Dj Dee Seoul New York City. You can hear his beats on the electronic music scene or on soundcloud and finally the only segment of the week not not in Switzerland and interview with comcast CEO Brian Roberts. CNBC's parent company exceeded expectations in its fourth quarter report. Joe Becky and Andrew asked Roberts about that beat and the company's plans for peacock. I think we've given ourselves a long runway to scale up. Take back some of the content. That's on other platforms warms. Make some original content engage with consumers but as we talked about peacock will be very different coming up on Squawk pod the CEO of J. P. Morgan Chase Ace. The man that reportedly considered running for president has some thoughts on the way. Our government is run and on the candidates who are hoping for the presidency this November I LNG moderates. I'm not a socialist and then capitalism is the greatest thing that ever happened to mankind. We'll be right back this. CNBC podcast. It is brought to you by. Td Ameritrade Dea wish you had a second opinion before placing a trade with a strategy gut check from td Ameritrade trade desk. You'll get a second set of is on your trade idea to help you make decisions with more confidence. Their team of experts is available to help you weigh the risks and potential rewards. So you understand the INS and outs of your trade to learn more contact the trade desk at td Ameritrade Dot com slash trade desk where smart investors get smarter member SIPC. A P C. Welcome back to squawk. If you've been listening to through the pod this week you know that most of the world's business and political leaders attending Davos have been pretty positive about the American economy those celebrating include of of course the second sitting. US President to ever attend the conference. We are now by far the biggest economy in the world. India reflected on this and and on President Trump's reception at the forum as we wrapped up the week this group which often trump for his style loves trump. Uh another attendee. Feeling good about the economy for the most part J. P. Morgan Chase CEO and chairman Jamie Dimon who actually wrote a piece. He's on capitalism and this moment in American history for Time Magazine's Davos Twenty twenty issue next. You'll hear him elaborate on those thoughts and many others with Joe. Oh becky Andrew on our set in this literally in the Alps there outside on a rooftop in Switzerland. Here's Becky kicking off the conversation with a reference to tha that. US market rally. That has the president and many others feeling optimistic. One of the stock that has helped fuel that rally has been JP Morgan. I know you guys are just coming off your most profitable year ever ever You talked an awful lot about the strength of consumer what you're seeing in the United States. Wh what's happening in the beginning part of two thousand twenty after such a successful nineteen but welcome everybody. Welcome when you're doing fine. You know if you look at twenty twenty just began but the consumer remember is strong seventy percent of GDP that consumer the balance balance-sheets in great shape housing's in short supply. Their copses way up their wages your up jobs are up millions of come back to work the probably millions more still going to come back to work. Things are working the on the corporate side. You have a reduction in confidence and cataracts mostly in my view related to trade but that may have leveled off at this point because I have some positive tr trade news with US MC and the China Trade Deal Gel actually asked the president about expect to see a return of cataracts. It sounds like you do expect to see a rise in capital expenditures this year. I think it's very possible. I remember a lot of companies. They do cap ex when they need to receivables go up inventory goes up they build that a planned when the demand for their product so So you've already seen more CAC. In the consumer side you may very well see it more on. The manufacturing side at global growth is three point three percent. It's not terrible So yeah you can see. You can see continued growth part of the reason that you had such strong revenue last year in part was because of what happened with trading revenue gate rebounded pretty sharply in two thousand nineteen markets. Feeling to you right now. How do things look? They're the they're fine. The trains actually not that big a partner we up across the board and we look at more things like number customers satisfaction number of accounts market shares. which were we try to drive all the time but but the markets right now are fine? I mean they're in the goldilocks place. Fine sounds like it's almost underselling. It when you look at new records that are being set every day. Do you have any trepidation about anything you see here only trepidation about is is negative interest rates. QE and the diversion between stock prices and bond prices and yields and stuff like that. It's kind of one of the great experiments of all time and and we still don't know what the ultimate outcome is do you are you. Are you in favour. Though of of the way Powell has approached this. Yeah and you think that he's responsible in large part for this. Do you think it's fiscal policy. Also monetary policy. That's created this goldilocks period. I think it's a little bit of both. But but goldilocks has two sides to it. So but I also think that we have to have coordinated coordinated fiscal monetary policy and regulatory policy. You See China do that in the United States shown to see it so much. Industrial regulatory fiscal. If you want to kind of grow faster astor and not caused some of the problems that could be caused by rapidly rising rates or something like that you're GonNa need to blow and you're gonNA need globally. That sounds like you don't think the Federal Reserve should operate independently independently from the White House and the president they could be completely independent. That doesn't mean they can't be coordinated so that if they feel that if if government's do X. They will be very comfortable doing why okay that that's not lack of independence you both Independent said. That's a good course for the country. Let's go do it because it's supposed to go to China they we do it all the time now at obviously that'd be commander economy much better than you know we we fail. We failed to do that. We need to have more coordinated policy Who who kind of runs the ship in that situation though does is Congress supposed to listen to the Fed as in terms of what to do the Fed specialist Congress had is the White House play into all of that? Because it sounds like you're right. I can absolutely see how we could better manage our economy doing that. But it does sound a little counter to how we've operated to this. I'm not sure it's true. I think if you read history books about the Fed and the government and usually through the administration they've sat down and had coordinated positive to accomplish the goal of the country. They did it to get did it. Get Out of World War Two. They did it to multiple notable tells me in times of crisis also even after the crisis two thousand. They didn't do it. I mean yes they they. They had a stimulus plan but clearly I think. In retrospect people don't think it was is big enough. There were lots of things that Denki was screaming and hollering. And saying please you were scre. Everyone say go play and and and and Burnett he would say that he lowered interest rates in large part because because he couldn't get Congress to move. I think it's very hard for central banks to forever make up for bed policy elsewhere and that let me just trap trap today with great show low around the world. I think that's a bigger problem than the United States. Are you think you're bigger places where it's negative interest rates. That's where they've gotten themselves into that. Rogers I mean. Did you know anyone who's actually bought a negative misery pond. Now that's what president trump said was gonna be with them whereas the by the the buyers the central banks and surnames concerns comes at half two or index massive mutual funds pacifists. I would never buy negative bond. Why would you Melissa? It was forced. Hold my money with in history. Whenever you've seen something like that it doesn't necessarily end? WILL I. I know we've been talking about this for a long time. And what do you think the potential end looks like Wendy think it calms is there any way of knowing any of these things or is there are there any signs to say. We're getting closer to a point where this actually does play out. I don't know now. What would you watch for the biggest the biggest surprise of inflation? If you have any kind of inflation is dates and right now people think central banks around the world can do whatever they want they can't they will have to be reactors as opposed to just actors if you see adverse consequences going to certain ways so and there look there and tells you look at all. The facts failed go to do but that would be the big negative bubbles only in sovereign debt sovereign debts where you see the bubble. You don't see the bubble. I mean even we were talking about Uber on a lot of these private companies is that is that a bubble is that A. It's not a bubble because those are in total. They're not that big and yeah. Some are overpriced iced. We've we've always had overpriced companies in life and and stock prices are a high but those prices could be justified if you ever growing economy we've had eleven years of growth. You had twenty eight if I try to really be half full optimistic. It's that true here. We are at these these rates that seem like they're not normalized and they don't seem appropriate beeping is why I took it out. They don't seem appropriate for where unemployment is right now. The rates where are we are but if inflation really low because of technology and innovation why not in an expansion leave rates low let corporate earnings catch up with where stock prices are. You're maybe this isn't maybe these stock prices aren't just following a combination of fed and central banks up. Maybe it's more than that. Maybe it's justified. Maybe it's not just the cheap money. The other reason I think Rachel always grows has been so slow. AMAC pointed y'all before over the last eleven years like twenty three percent growth. It should have been forty plus. Gosh okay how'd you which would have been normal and people act like it's just because we'll just a slow no it wasn't. It was our own infrastructure policy were skills Pasi litigation regulation and taxation. So which got fixed. I can go on and on but we did tour selves a slow down growth. Slow growth means you have less need for capital lower rates slower growth lure wages. You know we we need growth strategy which is why you say fiscal's not it's not just spend more money do things create more growth and then acknowledged that we can help. What are you doing in a country? That is clearly politically. So polarized that virtually nothing gets done right now. I mean that's a good question. Well they got. They've gotten some things done recently. You know they did to a budget deal they got. USMC done they got the China trade deal done. They got tax reform done. They've got a lot of regulatory reform done but look up to me. I'd make Congress compromise. You can I think it's I think it's absurd a democracy that you starting points. You won't compromise. That is what a democracy is. We don't completely agree. Then we find a way okay. Well I'll do this for us for me now. We agree that you just listed a number of accomplishments by the administration. One thing we've been talking about for the passenger days just how The Dallas community enlarge part has been there. I say surprised two years later. Three years later now Because when he first came into office there was such trepidation research coach anxiety and worry that the economy wasn't wasn't gonNA go up. WHO's GONNA go down? They already read your piece take time unless we change capitalism we might lose it forever. That's the headline. The headline headline is always not accurate. Thin so What did we would? What did we get wrong? That good policy matters government matters. We don't build infrastructure. We would take ten years to get the permit to build a bridge. Half the kids in schools don't graduate litigation costs one percent more in our country all other countries healthcare's nineteen percent of GDP our competitors and nine mm percent I go on and on immigration. We had an immigration bill point two percent a year a year of more growth. And we haven't done these things that's why I don't. I think China trade technology I think is the bed policy. That's been in the United States. You've seen similar things in Europe by the way and you know fortunately mccrone change it you. You need labor flexibility you need innovation e positive capital. You need all these things to to have a vibrant economy which is good for everybody as and the politicians should focus focusing that in addition to folks whose left behind. Because you have more wealth to take care of everybody if you have a better going along said you're you were barely Democrat. I think you said that here many many years ago you look at this This election is there a democrat. You like yeah I I like. I like a lot in the moderate. I'm not a socialist. I mean capitalism is the greatest thing that ever happened to mankind. I think people who haven't read the history books about socialism. Really should educator younger kids freedom and free enterprise are inextricably probably linked. They are not different. I mean you can't tell people where you can work how you're going to work free. Enterprise was the pursuit of happiness. And once you have government taking control of businesses this is it ends up in corruption in Venezuela and and and it arose over time because companies get used for political purposes not to give great products and services. Does that mean Comey's a perfect now if it's trump trump or Bernie arches none Elizabeth. Warren that does not mean. We can't acknowledge that some people left behind very we mentioned inner city school. Kids I think wage need to grow up the lower end. I'd be in favor of a lot of the business. Roundtable in favor of increasing tax credit. Get more money into the hands of people who are who to give more of a living wage I favor universal healthcare is properly done. I'd be in favor of but this is properly done. That's every cab. You could design these things badly Ed Lee or well and we've just gotten really bad at designing. Well Jaime you just listed a laundry list of things that you think government should be doing. I think you've got a little initially waiting waiting for them to fix it into a better. You've gotten impatient as a CEO. You've come to take matters into your own. Had I think if haven the healthcare initiative that you at j.p Morgan along with Berkshire Hathaway Amazon been working on. Do you have any updates there anything else about what's on I really don't because it's still nascent and still it would just doing some tests experience and big data ETA but I think the Business Roundtable which I'm not the chair more is attacking these issues head on work skills like how you can get into cities and get kids more trained for jobs either out of highschool or out of Community College or certified training infrastructure. They've got program infrastructure immigration if you went to the Bart site these things need to get done and it'll be much better for America the the Bart support raising the minimum wage. The beer seized supports expanding the income tax credit both of which we get wages to the lower paid and then giving giving them opportunity like two schools schools education and those things worked known to work in any country ever done improperly. They work and they have more equitable society skills gotta match skills with whether gotTa match guilt goals and we have a whole bunch of more stuff coming out and things like that and then the three and a half percent unemployment master skills and then you get organic growth which were already starting to see. That's much higher. It was for the best. I think the bottom quintile or bottom ten percent. It's it's up eight percent for two years in a row or something you are seeing that we typically would see in recovery it. It just took a long time. She's very slow recovery. which you don't see with crappy policies that locked the fit and zero and it exacerbates well the income income inequality and that's what we saw prior to this? There's lots of reasons for that Becky mentioned this piece that you just wrote in Time magazine and we wanted to ask you about it. It refers specifically to what seems like you poll young people about the the the the word capitalism and they may be on the socialist side. The things I don't think they understand honestly I don't think socialism is social is when the government controls companies. There is no example where the government controls comes. They do well well. They don't start to use it for votes satisfying people. They don't even want competition. Because we're two government companies you know why have competition. They do it for jobs. Odds and votes they have bad allocation of capital. Most state owned enterprise. Don't do a particularly good jobs. You take a look around the world and they become corrupt. Overtime did not mean that capitalism. It's perfect do you use public companies. Perfect know their flaws. Do you think Ernie Sanders or Elizabeth. Warren are Socialis in the contract that you talked about it or in the contract there's idea of a democratic socialist which is something that makes me feel more European in some ways it. I don't want to talk about any particular people but if if you're talking became a government controlling corporations that socialism you can do in a small way or you can do in a big way. The small way is to put a commissar in your board remember the old Russian commissars. You know that's all just could sit in the room. You know the or do it through regulatory or stuff like that and the other ways that they actually own the company. And that's if you look at all of these other countries they start to take over the oil. Oh companies and steel companies and the utility companies and the banks and the bank start making loans not too good company not because they're probably allocating capital apple two ties and best use but to keep that factory. Open the bridge to nowhere to make sure the mayor doesn't move job in his town and once you do that you will have an eroding society having settled that that doesn't mean that listen society that things need to be fixed. They do need to be fixed. Inner City schools infrastructure education in healthcare. We could fix all of those. What would you make Apple Society? What'd you make? A life thinks letter last week. I read it and we've done a comparison. I buy side. I think it's fine. I mean the climate. Everybody go climb. Climb climb. Climate is a real issue. I think most people want to be part of the solution you know we are green. We're going to be a hundred percent green ourselves this year. We're doing two hundred billion dollars. Green financing probably going to be increased sometime this year. We only do responsible financially coming onto mountaintop removal. We don't do dirty coal mines. We're not doing new coal power plants but it does you need a transition and the day with the public has to know is you can yell Komo you WANNA in private enterprise unique government policy government policy. Good Gums you only thing that was a globally. It will solve this problem. And at the end of the day you need a carbon tax and the degrade thing called the carbon tax the carbon dividend where it doesn't get sent to Washington and get sent back to the people And then you just start buying things and doing things that make more sense. You'll get a small car. Uh No windows at blocking the blackouts. Then does it make sense for companies like Microsoft announced their own plans around trying to be carbon negative or trying to run internal well expensing around carbon. I think it makes sense for people to show their intense and to want to do a better job in the states. Import is that real is that virtuous signal marketing. It's it's it's it's not going to solve the global problem. Okay you've got to countries which are growing the pollution dramatically. I'm not against them. But India and China America's already coming down twenty percent of the last fifteen years or something you you will not solve the problem without real government policy so I appreciate what people say. Stop doing this and stop doing that. And all that happens if you know if you stop financing this dirty coal plant sewn all seem to come in and make a lot more money than you because the world needs. The energy we need is is policy. RND Government a carbon tax. The citizens of the world have to take a boat at that level. Understanding is going to have some sacrificing thing. So so you would advocate for carbon to absolutely one hundred absolutely with the carbon dividend with the dividend back. That means you over Knox coach. This means you'll pay based on some basically meaning the city black smoky. That's that's the seat an odorless colorless gas carbon dioxide trace alert. But it could be it could be what about clean water about particular pollution. What about chemical waste? What about what we've done with strip mining so all those things are okay to clean water? We're we look what most of us are cleaned up so not really. We're we're a little bit focused on will all this Gobbledygook you're telling me about I don't know carbon carbon a different way over. There is a risk that something's going terribly wrong. We can handle that risk today and rather painlessly we do it right. We need to read what the problem is. Whether it's it's causing slight warming eight tenths of a degree Celsius or whether it's causing every single go adverse weather event that's been occurring on. Its own four billion years used in that snow less snowboarder outlets throw more flooding less flooding. Earthquakes get all that well. That's what they equated connecting. That's that's so people get noise about it but if we have co two problem in the air which is hurting hurting the world and most of the scientists say that my view is is a risk mitigation. We say if there's a chance as bad we should do so thirty trillion dollars. Do it costs free. That's what I'm trying to carbon tax that you pay you know you opaque carbon goes through a bank you get back on. I understand but I mean there. There is a certain amount of carbon carbon dioxide. It's going to be released for years and with you balance it out and and do your carbon offsets and feel better about your you know your you six fifty whatever you came over and find but You know can i. I just tie it back to where we started this conversation. You you mentioned risk mitigation. That's what you do very well when you look out there. What are the big risk factor since we just had a phase one trade deal signed with the China and since we know where Brexit is headed at this point? What are the things you kind of watching? Well cyber is a big one guy I mean you look at our systems vulnerably honorably cyber and that could be banks or water grids or are you name it. I've put up there. I'm not gonNA talk about geopolitics. That's kind of always noise. That can always cost something that we don't fully understand stand today I put the Q.. Is One that just it. Just isn't the back of my mind. That's such an admiral situation. It's been going on for a long time. We don't completely understand why the causes the effects and we may not know for another ten years in this particular one could policy. I mean I. I get frustrated that we don't have better policy around the world and and I applaud the politicians and strong enough to get up and fight for good policy. which doesn't always selling is good for the citizens but it is you know and so and president mccrone own? I mean I think he's fighting the fight to get French growing better. Jamie WanNa thank you very much for your time. It's always a pleasure seeing you and we love this interview here Indaba so thank you very welcome. It will be next on Squawk pod. I've got a pack and get Outta here. I'm going to show Faqih Andrew and Creamer unpack that extended extended interview with Jamie diamond back in a moment. Welcome back to squad. It's the Swiss Alps. It's chilly mostly. It's Wendy. It's beautiful and it is very busy is always a marathon earlier this week. Joe had a sit down interview with President. Donald Trump which meant a twenty one hour workday for some of us but everyday they were there. Joe Becky Andrew Katie. Creamer creamer stayed onset outside after the TV broadcast to record some special content. Just for you our podcast listeners. Right now I'm on the roof of the Congress Center in Davos Switzerland with is the home of all the media tents and we are out in the elements so rain snow sunshiny blue skies. We're here for all of it. When the team sat down for the next conversation you'll hear it was actually sunny really sunny injury and becky whip out their shades for the occasion? We have documentation where you're all right guys. We talk to Jamey diamond for an extended interview the CEO and chairman of J. P. Morgan Chase Andrew. What did you think about his sort of take on the economy? I I thought he was bullshit. I didn't think he did you think he didn't. I thought he was. Hasn't he said we're doing fine. We're doing but we're hitting new records everyday on the market and that doesn't sound like just you see something you can always count on Jamie to very rationally and reasonably say that there are things that need to be fixed about the current economic system. And you know the headline writer is going to say Jamie. Jamie diamond thinks capitalism and then that causes him to go the other way and he can make the most spirited defense of capitalism of anyone. I've ever heard he didn't WanNa to answer the question. We asked him about Bernie Sanders and Elizabeth Warren. He would he would've answered. You talked about something else because he does get on a roll named names he said if you ran a company that says Jason where I don't think he wants to be killing people who you voted for by definitely alienate. I do think capitalism socialism thing. There is this sort of sense of what is socialism that he's trying to raise and you didn't listen to his answer because he they did at basically basically being a little bit pregnant. There's no such thing as a little. That's that's what I heard is if you have the government owning the media production and and that is water on socialism. He said eventually that is a corrupt because you have people. The government elected officials officials who are using that power by votes and maintain their power ten to one on Bernie versus trump. On who I bet on anything I have. I have a question for kings but I don't give ten to one odds so he writes this piece. I don't think he liked the headline of his own. Piece set it sometime about capitalism. Wait where's the much sure. Advert Jamie Dimon less change capitalism. We might lose it forever off camera when he sat down He. I said I don't like the headline but most of conversation is actually the opposite of that in many ways you can find. What do you mean meaning I i? Most of the conversation he was having with us wasn't really that he felt the capitalism west. Brian in fact he made the argument that it was the greatest thing to ever happen happened to mankind. You can go and so so then. So then what do you make of what he make peace where I think that editors put what they what magazine was. It was a four time. Duff said here's a here's the other thing you hear you gave that fact that game now. That was eh for everyone. Billionaire created. Yeah two hundred and fifty thousand people were lifted out of poverty. Fifteen twenty years. What's the source for that? Or how does he figure at this number. If you look at how many people in China that have come from a certain level of income fifteen hundred dollars up to where ten thousand you take the whatever you want to use. The the poverty level immediately agreed and said his own numbers. Kind of back that we can put up with a couple of greedy billionaires if we with two hundred fifty thousand people Radovanovic Poverty. That's the show for today on our rundown tomorrow. The anchors might be on their way home from Switzerland covers. It was but here on the podcast. There is so much more Davos content still to be half including some things. That didn't make if you listen to this podcast. You should listen to the end because you'll get to hear it. There's peaks squawk box is hosted by. Joe Kernan Becky quick and Andrew. Ross Sorkin tune-in Weekday Mornings on CNBC at six am eastern to get the smartest takes and analysis from our TV show. Right Interiors. Subscribe to slack pod. Wherever you get your podcast we'll meet you back here tomorrow Thanks guys this. CNBC podcast is brought to you by TD Ameritrade. Do you wish you had a second opinion before. Placing trade with a strategy gut check from td Ameritrade trade desk. 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Southwests Max Challenge
"This episode of market foolery is brought to you by TD Ameritrade investing lesson. Number one, don't pay for lessons. TD Ameritrade education is free. Choose from articles, videos, webcast and more everything you need to take your trading to the next level. Visit TD Ameritrade dot com slash education member s IPC. It's Wednesday March twenty seven I'm Matt grew. And joining me in studio, we have the one the only motley fool analyst Bill man Bill. How are you doing? It's just you and me it is. I'm doing great Mack. How are you? I'm good. I'm good. How are you feeling right now if you had to characterize your mood, would it be cautiously optimistic would it be very optimistic? Would it be filled with regret? Always always regretful and remorseful though, we're talking specifically about the markets. I am cautiously optimistic which I think ultimately is the only place where investors ought to be. Okay. Good. I like that. Well, that is a nice launching off point because we are going to be talking about the market. We're also going to be talking about why Facebook and Google paying their bills isn't always such a good thing. We'll get to that. And we'll talk some tesla tweets, but we begin with Southwest Airlines on Tuesday, a southwest seven thirty seven max made an emergency landing in Orlando due to an engine issue. Now, Bill only two crew members aboard no passengers. So that's the good news on Wednesday south west announcing that they're cutting their first quarter forecast due to. Yes. The grounding of their seven thirty seven max fleet south west the first airline to report an impact on earnings from the seven thirty seven max. Yeah. This is such a hard story and. I don't want to make the slightest amount of fun about it. Because three hundred and forty six people have died in two separate crashes at with with the seven thirty seven max. And we don't know what all of the answers, aren't we don't know why? But we it is important to note that companies like Boeing the airline companies operating what you would call a zero defect tolerance environment. You can't have things. Go wrong in the air. And have them say oh, sorry. You know, something happened. We'll get it right next time. So there are a lot of questions about how and the, you know in the process by which the seven thirty seven was approved for flying, you know, whether Boeing cut some corners in terms of making sure that it got up as quickly as possible to very very important program for Boeing because they were coming up against some real competition from Airbus for super for super fuel efficient planes. And you know, this is a this is a big deal for Boeing. It's obviously a big deal. Also for the. The scores of airlines that have bought the seven thirty seven the seven thirty seven is really essentially the main platform for for short and medium haul flights. So there are a lot of questions out there right now. And we're going to get some some answers from the European officials about the crash that happened two weeks ago in THEO peo- with a a Boeing seven thirty seven essentially every country on earth now, as you know with has been grounding, they're they're playing. So this is this is a rough developing story, but the, but it doesn't look that good for Boeing, the airlines will get some blowback and I've seen for the first, you know, for the first time people were using the words regulatory capture to to discuss how it is the Boeing got this plane up into the air with with the system that had not been checked. Yeah. That's one of the things right now. On in fact, congress I think as of today investigating we've got hearings on that relationship between FAA in Boeing pretty cozy relationship. Well, if you think about it at. Yeah. In and regularly regulatory capture is something that happens in in in a bunch of industries, but I can't think of one where you know, more than aircraft where in the United States. There really is only one massive player, and then a bunch of a bunch of smaller ones. So you could see exactly how Boeing and the FAA would have to for for for better cooperate very closely. But in this in this, case pilots got no additional training on this. You know on on this this warning control. They got no or what's called the stall prevention system. Airlines had to pay extra to get a sensor installed. In a lot of airlines. Didn't choose to do it. And you could blame the airlines maybe, but they didn't necessarily know that this was a huge or even a substantial change in protocol. Yeah. Because it seems to me Bill when when when you think about all that especially given the loss of life and all of the tension that the bad attention the negative attention that Boeing's getting it's not in their interest to cut corners. That's the thing that baffles me. I mean it, and and I think as analysts we want to say, hey, we have the answers all the time. And I think for companies they want to be seen to have all the answers all the time. But you're talking about a new piece of safety equipment. And the, you know, the best explanation that I can come up with is that they just didn't realize maybe that this was such a such a change in there. There, you know, in in the engineering, but the whole reason it's there is because the new seven thirty seven max such larger engines that they knew just from the aero-dynamics that in certain environments that it would be harder to fly. So I don't find the really benign explanations to be all that credible. And when you think about the airlines in bringing it back to south west, what do you think about investing in the airlines right now, you know, you've had a lot of consolidation in recent years yet, historically, not been a great investment. Yeah. I'm actually pretty positive on on certain airlines right now we've talked in the past about about my love for owning. But not necessarily flying spirit air. Yeah. I the the airlines it is a different environment than it than it used to be feared as a discount right spirit is a discount man does not fly discount is now I am six three. So I'm not exactly built for the twenty eight inch the twenty eight th in seeds and things of that nature. So let's sauce apple that's right for me for fr- fr- from a structural perspective. I'm not exactly their target customer. Okay. Well, speaking of structural perspectives time to talk inverted yield curve that is a terrible. That is no good at all. That's my signature. Okay. Bill last week the yield on the ten year treasury dipped below the yield on the three month treasury note. Now that was the first time that's happened since two thousand and seven. Yes. So wallah. We now have an inverted yield curve. Now Bill if people are hearing that phrase for the first time they've heard it. They don't really have a sense of what it's all about. Why all the fuss? Well, the invert the yield curve is basically, you know, as as both of those words suggest how much money the average investor demands to get in return for loaning. It's, you know, loaning its money to the US government for a certain period of time any anywhere from three months to ten years and the generally a regular yield curve the longer you're loaning, the more you want in return. So there are periods of time in which you will see the yield curve the yield four shorter. Ration- notes rise above the longer term. And usually speaking that doesn't it doesn't make any sense, right? You would just simply expect that the longer you land, the more you want back. So it generally happens when people are expecting a change in the short term now. Yeah. Over the last seven the last seven recessions in advance of each of them, including as you said this one from two thousand and seven and I hear that things weren't very great after that. There has been a the recessions have been preceded by an inverted you yield curve. Now, it's important to say that the reverse isn't true. There have been a bunch of false positives. And I think in this case the thing that people need to to pay attention to is the fact that overall rates the the absolute base of the rates is still extremely low. So it's a different environment. Okay. So it can point to a recession. But. It's one data point for investment. It's a data point for investment. Keep in mind. This isn't just a data point. This isn't some ratio. This is actual real life. How much money do you demand to to borrow to land? How much money do you have to pay to borrow? So there are some real world implications for it. But. I think the fact that there are as many interpretations for what the inverted yield curve means as there are people putting out opinions about them should suggest very strongly that that people don't really know. But it is because it is something that doesn't happen that often and does happen before recession people do pay attention to it, it is there a Bill man recession indicated you have any proprietary indicator or something that you look at what you know, what doesn't get enough. Attention is blank is how many boxes end up on my front doorstep because because my wife has been shopping. So you drive by notes. I'm sorry. Honey, we I should've gone there. Right now, we can edit that could. No, no. I. I tend to think of most of the indicators that people look at as being meaningful, but not necessarily being being all that predictive. You know, I pay attention for the markets. You know, we we we pay attention to the amount of money that's on the sideline versus the amount that you know, that's that's in the market at any given period of time. Yeah. I the the yield curve is important. I don't wanna sound like I'm saying, hey, people are just sort of making this up. But it, you know, so it is something to pay attention to and eventually there will be a recession, and I can nearly guarantee that that will be preceded by the old curve in very itself. We just don't know that it's necessarily this time. Okay. Well, before we get to our next door. I wanna mention that this episode of market fuller is brought to you by TD Ameritrade. I'm at TD Ameritrade user Bill man, you are as well. Correct. As a matter of fact, my kid's college money is in TD Ameritrade account while there you go. Well, when it comes to investing education one side. Is doesn't fit all because everyone is different. Like thumbprints fingerprints snowflakes. Everyone's different Bill man dog noses dog noses, and whether you're just starting out or an elite trader TD Ameritrade education gives you what you need to learn on your own terms. Choose from articles videos, webcast and in-person events. You'll even have access to education coaches that is awesome. Everything you need to take your knowledge to the next level. Start today at TD, Ameritrade dot com slash education, member S, I P C. Okay. Bill in an interview on Wednesday. Tesla's new chairman, Robin home says that Elon Musk you've heard of him. I have heard of him. There you go. She says that tesla founder CEO Elon Musk that he uses Twitter wisely and that he poses no corporate governance challenges. Let that just register now did home became chairman in November. And for those for those who may just be catching up this story in August Ilan musk tweeted that he had secured funding to take the company private now that tweet attention of SEC settlement was reached in September. But Bill, what do you think about her statement that mosque use this Twitter wisely? I am. So glad that Baghdad. Bob has found a new job as the as the chairman of the board of tesla. She also said I've been losing weight. Mac you're very attractive. I I find this simply amazing that I mean. I don't know. What else she would say? But the seems the quit using Twitter quit using Twitter. But in public, I think that probably her best her best course of action would be to not bring this up. Right. And not bring attention to the fact that he is supposed to have his tweets reviewed by someone who knows if he does or doesn't, but it matters because a month ago, he put out, you know, he put out one that was factually incorrect that he then corrected and I know having been irregular unregulated environment here at the motley fool, that's not the way that works everything that we do everything was very very closely considered. We just did not at all ever want to do what I describe as ringing a dinner bell at the SEC, but he doesn't seem to care. So I, you know, I guess you know, you can either enter in her role. I don't know what else she would. Say, but I think nothing may have been the best course of action. Yeah. Questionable questionable decision will Bill. We're going to close with what I know is one of your favorite stories because you came by yesterday. And you you you pointed this story out to me cackled, it's tremendous I'm going to read the headlines straight from Boyne bowling, and I'm gonna let you put some meat on the bone here. Here's the headline man stole one hundred and twenty two million from Facebook and Google by sending them random bills, which the company's dutifully. Can we start? Can we start with the fact that this is a hundred and twenty two million dollars? So so not insignificant not insignificant out of this scam, go down. Well, so he's he he's a Lithuanian man is name as evolve as Rimas Kaos, guess if Aldus Rimouski we're gonna go with that. They said it, right? The second time, and he basically figured out that there was a large Taiwanese commu- computer company that was one of their lar- was one of their largest vendors. So he founded accompanied by the same name, but in Lithuania and got all the documentation forged all of their corporate identities and just started sending invoices, so they got into which they legal. We should point out. We should point out that this is at least heavily frowned upon. We're not sanctioning this. No, not at all. But here's the amazing thing. So besides one hundred and twenty two million. So we got caught he's going to go to jail for about upwards of thirty years for wire fraud, and he has to repay fifty million dollars. Okay. So hold on. Hold on hold on. I thought you just said fifty million and in my read, I said he stole one hundred and twenty two million. This is exactly what I'm saying. So so some back on the back of the envelope. Seventy two million. How is this not getting focused on all my gosh? Seventy three million dollars. He doesn't have to pay back which I mean, you put you put the time in jail now. So I'm sure Michael avenue. Just is you know, who just got picked up for trying to defraud Nike for a couple million dollars was going. Gosh. I wish I thought of that. Yeah. That is great here. He may be involved in this. He's going to be involved in the next one. I think perhaps oh my gosh. Or there you go. So Facebook and Google just spend a little more time. I guess on the Bill Payne, but how do you know, if he's forging the letterhead and all of that? Yeah. I actually I mean, you know, obviously, there is a process by which bills get paid. And they he did go after that them in a fraudulent way. But I don't know when I when I pay my bills, I checked to you know, I checked to where they're being sent. Yeah. That's true. I mean, I just picture someone like writing a check. And then looking at the address letterhead and could be mafia her little in, you know, maybe they should switch to some sort of electronic Bill payment. That's what I'm thinking. I mean, their Facebook and Google come. Use like payback. The war on cash. All right. Okay. So you know, it's a little unfair. I always wrap up with the desert on in question, where I take all the stocks, we've mentioned, and I'd say if you were on a desert island, which of course, you're not. But if you were and you were going to buy one of these stocks for the next five years, which one would you buy, and it's not the way that anyone should invest, so, but you know, what we're gonna do it. I don't want to buy stock in this guy. There you go. Okay. Well, that's that's true. That can be an option you've got both got Boeing you've got southwest. You've got Google Facebook, tesla or this guy. I I actually going to stick with with with south west address companies. Wow. Yeah. So you're Google Google pays its bills on time. Apparently. So that's that's that's that's good news. You know, what I I will also which I will say Google slash alphabet is the is the desert island company, though, I do hope they are somewhat more careful with their accounts payable department in the future. Okay. We'll duly noted. You can always Email us with your opinions. Your questions your thoughts. Your feedback market foolery at full dot com is our Email market forward at full dot com. Bill, man. Thanks for joining me. Glad to be here. Mac as always people on the show may have interests in the stocks. They talk about and the motley fool may have formal recommendations for against. So no buyer sells stocks based solely on what you hear. That's it for this edition of market forward. It shows mixed by Austin Morgan Crear, thanks for listening. And we'll see you tomorrow.
The Problem With Polls
"From the New York Times. The daily. Two years news organizations, including the times, we're blamed for misleading the country about the projected outcome of a major election. What were doing differently? This time. It's Friday November second. Right now, we have the presidency about eighty nine percent for Hillary Clinton eleven percent for Donald Trump. Obviously a lot of people have no idea that Trump is headed for a historic defeat. If I can ask you to travel back to that night two years ago. Why were people so angry about the polls leading up to an on election night? 2016 we were both in the newsroom to get it. We were I think there are two reasons the first is that I think a lot of people entered the election very confident that Hillary Clinton was going to win predictions. But I think that she's going to have very good night. So the technical term for that it would be blow out. Give lance. The polls showed Hillary Clinton comfortably ahead in enough states to win two hundred seventy electoral votes, they showed her head and even more states get her well over three hundred lateral. Those need cone covers polling and elections for the times in some states. There were no polls showed Hillary Clinton trailing truck. Anderson. This night is turning out to be a real nail Florida been going back and forth back and forth. And she is in profound treble right now in the electoral college. The second reason was that. There was a communication problem of sorts in using pre election polls to forecast results between between the people who are most familiar with the data and basically everybody else Donald Trump will carry the state of Florida. We all remember than yet. Yeah. Started at about eighty five percent chance for Clinton to win. And then when the results came in came clear pretty quickly that the election was gonna be very close ABC NBC project here that North Carolina has gone to Donald Trump. Again, the map updating behind you ABC NBC, those two networks projecting here that Donald Trump has won the state of North Carolina. And by eleven o'clock had trumpet a greater than ninety five percent chance to win the waiting will aggravate you the calling early and making a mistake will bury. And here we go. Oh, this is a Fox News election alert, Pennsylvania goes to Donald Trump. And there's the big board the twenty electoral votes from the state of Pennsylvania. We just got new metrics. And Donald J Trump is the president of the United States elect, Donald J Trump the son of a queens millionaire defied all conventional wisdom and all expect. Nations. I think after the election it struck that many people were surprised the polls could be wrong. Someone like me. You're not surprising. The polls oh wrong, you expect polling can be wrong time. From my point of view. It's a miracle the pull it works their probabilities. They are meant to communicate uncertainty and the range of possibilities. I mean, you can focus on Clinton having eighty five percent chance to win which we certainly did. But you can also take I hope serious note of Trump having a fifteen percent chance to win which is very substantial. I mean, that's like if you're down by one touchdown at the beginning of the fourth quarter percent chance to win certainly wouldn't turn off the game and conclude. It was over something. There's a fifteen percent chance that there's a hurricane tomorrow. You're under hurricane warning. We didn't put up Trump warning. And for people like me, it's pretty obvious than almost all the elections that we cover the candidate trailing can go onto win. And I don't think people had that message. And look it's I actually feel pretty good about the numbers that we were reported. But I think that we're all willing to concede that from a communication standpoint that it wasn't very effective. So with the lessons of that in mind, how are you as somebody really steeped in polling here the times using pulling data in this election, the midterms traditionally the results of a poll reported at its conclusion after all of the interviews of Ben conducted, and then it's, you know, releasing a single news article that says Clinton's ahead by two we felt like we needed to demystify pulling a little bit for. So this time we are doing live. And what is alive poll look like so the top of the page. We have a stream of guts that represent each of the people who attempt to call and most of the time in some cases, more than ninety nine percent of the time those dots are empty because people didn't respond to our call and then on occasion, where lucky enough to get some blue red or gray dots which indicate whether they voted for a democrat Republican or they're undecided. And as each colored comes in our result changes the polls go up to five hundred respondents in general. So by the end, you have a perfectly reasonable final poll result. That's completely indistinguishable from a standard poll of a similar size that wouldn't have been reported in real time. But you got to see everything before rather than at the conclusion of the survey. Once all the interviews have been conducted. And what is the value of live polling versus the traditional polling in which you don't see that kind of process on fold call by call. You just get a result at the end. I think that the most important lesson that I would have people take out of it that can't be accomplished. Any other way is to experience the change in the result overtime, that's basically the margin of error playing. And you think that by showing how dynamic polling is live? Polling help solve that communication problem that we had in two thousand sixteen I think it's one of many different ways of penalty solving it. From the standpoint of the public Opole is a single final and fairly precise figure, and I think the way it gets reported often adds to that we're doing jobs the fat. And a lot of ways we are trying to be extremely transparent in a way that highlights the fuzziness of polling and show the extent that it's actually quite inexact. So that the public doesn't misunderstand that final figure, that's the hope. Child presents that chicken. Sisters, miss Broadwood? Ic- is that people are sort of treating it like a cooking show or something or being in the kitchen when a chef is cooking chicken today, the French chef, and you know, you sort of know not to eat the food that is raw that is raw because people can see that it's underway. They know done. There's something very intuitive about that idea. And you know, I think the hope is sort of impart that sort of in the same way that there are a bunch of people who may be appreciate cooking a little more after watching totally cooking show or being in the kitchen that maybe some of that same feeling rubs off on polling, which has a pretty bad rap. So people are looking at it as what it is. Which is a process with steps rather than the verdict. And that's a good thing. You get to watch it come in. And you can absolately eat it at the end. But I think that if you're really smart. The biggest lesson is actually that your food is never completely done. It's never as precise. As just looking at the final top line. Number would make it seem everything you said is a reminder that pulling is limited is inexact. It is kind of flawed and that we shouldn't put too much stock into it. So. Can you quickly? Remind us why we should care at all about the result of poll, even really good transparent live bowl. I think that we live in a really diverse country. And it is also one that is increasingly divided demographically and polarized along a variety of geographic lines, and what that means is that very few people. I think have a good understanding public opinion by talking to the people that are around them. In fact, often it's a very homogeneous view. I mean, if you were in you wanted to report on Ohio, I mean, imagine all the little enclaves of the state that he would have to go into before you even begun to piece together farm country in the north west and old coal towns in that Pelacia and majority black parts of Cleveland, white collar and blue collar suburbs around Cleveland piecing that extra together from the standpoint of an individual person is extraordinarily difficult and pulling one of the few actually I think pulling basically the only way. That we can broaden our perspective on what the public thinks beyond the very small group of people that we get to talk to individually. How did polling get this so wrong Eric show? How did the polls lead us astray, including our CBS news poll, which is considered to be one of the best in the industry. What went wrong with the numbers the predictions that polls that suggested a late surge for Clinton this is? I mean, we're all sitting you're sort of silence. In shock. We'll be right back. The daily is brought to you by TD Ameritrade when it comes to investing each of us. Does it our own unique way? Some of us want to go it alone. Others might prefer some guidance, regardless of your style. TD Ameritrade is always creating new solutions to help you from their ward winning technology to personalise guidance. They have everything you need to invest on your terms. Visit TD Ameritrade dot com slash the daily to learn more and get started today. All right. So with all that in mind and with four days to go until the midterm need. What's the story that this realtime polling that you're doing is telling I think it shows that there are a lot of really really close races. We have pulled dozens of house races over the last couple of weeks, including nearly all of the racist that are considered tossups, and we have a majority of those races right now within one point and how many of these races. Are you talking about that are basically taught? Ups there about thirty districts in this category in most elections, we go into election day, and we look at the districts or states that we believe will decide control, and we have a good picture of who he believes Heddon those states this time, we do not have a clear picture about which candidate leads in the district's decide control. So a couple of weeks ago, we talked to our colleague Alex burns about the state of things especially in the house. And he said that there were about sixty Republican held seats in the house that were competitive that we're in play either side could win them and the Democrats needed to win about twenty three of those to take back control of the house. How does this latest polling of having around thirty tossup seats fit into that? So of the sixty most vulnerable Republican held seats there about sixteen or seventeen where the Democrats appear to have a comfortable. And clearly that gets them a lot of the way twenty three right? But after those seventeen or sixteen there are these thirty tossup racist that look very very close. The Democrats don't need to win all them. They actually only need to win about a third of them in order to take the chamber, but they haven't put any of them away. It's not even evident that they have a clear lead in many of them. There's just way too close to call. And always. Yeah. I think that's right. I think that if you wanted to be an optimist for the Democrats, you could say, oh, just as a matter of probability. I mean, they have so many options. How can't they win enough them? But you can't go down the list and say that they have claimed a commanding advantage and six or seven of them. So tell us about these thirty up districts. They're an interesting mix. I mean, there are really two types. One are the well educated and diverse suburbs for Clinton did. Well, and we're the Republicans have a incumbent who run before in this kind of political environment. And then there's another group that overall is larger and that's predominantly white middle to working class areas. The president won narrowly or in some cases by comfortable margin, where the Democrats have a strong nominee where the Republican incumbent has never been particularly strong themselves and often where there's like a little bit of residual democratic heritage. Maybe Obama won the district or maybe Bill Clinton would have won the district, but they've trended towards the Republicans over the last decade and particularly in twenty sixteen so given that the Democrats are well positioned in many of these thirty districts just given the enthusiasm for the party. But they are districts that Trump won in two thousand sixteen so Republicans must in the back of their minds think these are ours to lose we can find a way to get our voters out. What are the Republicans doing to try to make sure that they win most if all of these races? Well, if you look at the president's conduct in the last few weeks. Right now as a large group of people that caught a caravan. Seems like trying to wrap up the base that is an assault on our country. He's been talking about this caravan of migrants from Latin America. You have some very bad people. You have some very bad people. And we can't let that happen to our country sending troops the border, try and defend against they're not particularly imminent arrival. We have about five thousand eight we'll go up to anywhere between ten and fifteen thousand military personnel on top of border patrol ice and everybody else at the border. Nobody's coming in. We're not allowing people to government. He has argued against citizenship. Do it with an act of congress. But now they're saying I can do just with an executive order e has predefined gender. So as not recognize transgendered people anymore. They have a lot of different things happening with respect to transgender right now. You know that as well as I do look at it very seriously then on Wednesday. The president tweeted a provocative new advertisement that alleges that Democrats undocumented immigrant into the country who killed police officers than cuts to images of the caravan implies that Democrats are gonna let him anymore. Murderers attempt of. So it seems that the Republicans are trying to read up the base in the final. So the theory, basically is that if you return to the issues that got you over the top and these places in twenty sixteen you know, maybe you can do it again. He's basically bringing back the band. I think from two thousand sixteen and got him elected. He's trying to reassemble those people in each one of these tossup districts. Yeah. So is this strategy working in these tossup districts from what you can tell from your Poland. We can't say that it's working district-by-district tossups are all still extremely close. What we can say is that the presence approval rating is up from a month ago districts in these districts as well as nationwide which seems to indicate that some number of Republicans who've had some reservations about his presidency to this point are returning to his side in the final stretch. And maybe that's because he's returning to the sort of issues that won them over in the first place. So the fact that the person's approval rating is going up in these tossup districts sugge-. Chests that the messaging that's so polarizing on issues like immigration is making Republican voters like him more, and therefore making people more likely to vote for a Republican congressional candidate in that district, which may give Republicans some much needed momentum in the final days of this race. The last parts the hope I should note though, that you know, these are all still tossups because that hasn't happened yet. So we should understand what has seemed like a kind of random assemblage of very polarizing campaign tactics in the past couple of days every day or every hour. It was like a new provocation by the president. We should understand that as a measure of the president's and the Republicans anxiety that so many of these toss up races remain tossups this close to the midterms, and they're basically trying to prime the pump and hope that the voters who came out in two thousand sixteen and made him president will come out as. A result of this for the congressional candidates in these strikes. I think that's a fair point. These are district's that shouldn't be there. Most vulnerable districts in the Republican dreamworld these districts would already be fairly comfortably ahead, and then they'd be focusing on these districts that voted for Hillary Clinton or this strategy wouldn't be effective. But what the strategy is focused on is sort of stemming the losses and keeping themselves even play it's not really a winning strategy necessarily. It's a bit of a desperation Shijie. It's a strategy to prevent the big Blue Wave basically, not a strategy to hold the house. That's not to say that they couldn't win to be clear. It is to say though that on the Republican path victory. There's two steps. Right. You gotta hold the seats that are really conservative. And then you gotta win these Clinton districts and they haven't done step one yet. So now, they're trying to do someone preventable. What the president's doing is not designed to get them in one swoop to house majority doesn't get them far enough describing is essentially a targeted intense recreation of the kind of campaign. President Trump brand twenty sixteen deployed in the final days of amid term election in order to try to stave off a democratic wave in the house, but I wonder based on your polling. How much has changed or not changed about voter attitudes since twenty sixteen when the president I deployed this divisive strategy. I see very little evidence of significant change in in many of our polls right now the presence approval rate and looks a lot like the final result of the twentieth. Sixteen election. So what's gonna happen on Tuesday? I think we have a lot of really close races. And it wouldn't surprise me. If they all went one way or the other. What do you mean things can break one way at the end undecided. Voters can although one way or turn up model could be sort of off across the board in one way. I just don't think people should be surprised if when you start out with thirty close races and suddenly someone wins twenty five. So despite the fact that there are thirty races that are excruciatingly close so close that there's no way to predict them. It's also very possible that the vast majority of them, we'll go Republican or the vast majority of them. We'll go democrat. Yep. And I think it's worth thinking about just how different that election. I would feel like even though it just turns on a couple of points, if the Democrats win twenty plus of these seats, suddenly we're talking with the Democrats winning forty seats house, if the Republicans narrowly squeak out these winds, even though in terms of what it would really say about the country's attitudes. It's basically the same thing talking about a couple of in a handful of districts. Why even do this work? Does it actually matter? If polling is as you as you say, it is a miracle if it actually works. Pulling inevitably going to be out there someone's going to do it. And so then the question is are those polls going to be transparent, nonpartisan high quality, and I think that it all matters because you know, this is democracy. And in the end our system of government is based in part on how our elected officials and our democratic institutions react to the will of the public and the decisions that are being made by our elected officials are all based on their assumptions about where the race is at. I mean, this whole conversation about the conduct of the president of the United States has been based on a trying to read into what they think is going on in the race. And they think they know what's going on on their polling, and we can go down a long list of things that have happened over the last decade, potentially including the election of the president's health that are really based on decisions that were made based off the interpretation of bowls and bad. Pulling is really dangerous. Like, I think that it's not a. Coincidence that a big chunk of Americans white voters without a college degree have been systematically underrepresented in polls probably for a decade. No one really noticed. And then you know in twenty sixteen that same group declared that they were a silent majority and backed an insurgent candidate who listens to them, even though most of the smart analysts based on their bad interpretation of mediocre. Pulling data had concluded that Democrats didn't need white working class Motors winter stuff like that those things are deeply related you might not wish that horse race. Pulling was the way that our democracy work. Do you might wish the politicians didn't make decisions based on whose upper who's down or how they might win. But they do. And so it is important for the democracy to have the most accurate information at how the public is behaving right because the people who are elected look at those polls too. And they use it to figure out all kinds of things. I mean, remember after twenty twelve when President Obama decided the top of his agenda needed to be immigration reform, and you right? Remember that like Sean Hannity briefly supported? Gracia form, and Jeb Bush supported immigration form. Marco Rubio wherever that all of that stuff was based on their conclusion that Hispanic voters won the election for President Obama, your remember that that conclusion was basically wrong, by the way, and based on polls. But based on polls that were did not do appropriate job of representing the country. And I think it's pretty easy to draw a straight line from bad betterment of the way the twenty twelve extra was one in loss to a lot of the events of unfolding in our politics. You're blowing my mind. In other words, misunderstanding polls bad polling literally can change the entire direction of the country. Yeah. There's no doubt in my mind that pulls profoundly affect the decision making of basically all parts of our democratic process. Whether that's the behavior of officials in Washington, the conduct of the campaigns on the campaign trail, and even the decision making of journalists and media organisations. So if the polls are not working, then the whole democratic process working. So the stakes of polling are higher than whether we get it right on Tuesday. What are we get it right on any Tuesday in November? Yeah. So we better do them. Well. Thank you. Thanks. Here's what else you need to the times reports that after weeks of deliberations. The Trump administration has decided to stand by Saudi Arabia's crown prince Mohammad bin Salman, despite the role that those close to him played in the murder of the Saudi journalist Jamal kashogi the president and his aides have concluded the bin Salman is almost certain to stay in power. And that the most practical path is to find ways to work with him and perhaps exploited. His weakened standing for the benefit of the US. On Thursday, thousands of Google employees staged a dramatic protest of how the company handled sexual harassment claims by walking out of their offices around the world. Anybody who have? Who is suffering or anyone who made her other results of any unacceptable treatment, the protest was a response to revelations made by the times last that Google paid millions of dollars to departing male executives accused of harassment, and then remained silent about the accusations and payments. That the available. At home. The daily is produced by feel about Lindsay garrison legal question any Andy mills, I Khan, Raja Claire tennis getter Michael Simon Johnson. Jessica chump Alexandra Leon and need a pot and edited by h Calot, LaRussa Anderson and Wendy door. Lisa Tobin is our executive producer. Samantha Hennig is already toil director or technical manager. Is Brad Fisher or engine near is Chris would and our theme music is by Jim Bromberg, and Ben Landsberg of Wunderle special. Thanks to Sam MacKay, Labou shar and still a ten. That's it for the. I'm michael. See woman. Rocket mortgage by Quicken Loans. Introducing they're all new rate shield approval. 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