The Pomp Podcast - #271: Cathie Wood Explains Why Innovation Thrives During A Financial Crisis

Episode Date: April 16, 2020

Cathie Wood is the Founder, CEO and CIO at ARK Invest. Prior to this, she spent twelve years at AllianceBernstein as Chief Investment Officer of Global Thematic Strategies where she managed over $5 billion. In this conversation, Anthony and Cathie discuss COVID-19, the economic implications of monetary policy decisions, how innovation gains market share during times of crisis, her thoughts on Square/Tesla, and her latest views on Bitcoin. ===============================  TaxBit is a refund-maximizing, cryptocurrency tax software you can depend on. Visit taxbit.com/invite/pomp and receive 10% off your tax plan today by signing up for a free trial. =============================== Blockset by BRD is your hosted blockchain infrastructure. Blockset enables enterprises and developers around the globe to deliver high-quality blockchain-based applications in a fraction of the time, at a fraction of the cost. Using the services provided by Blockset, businesses can build professional custody solutions, accurate and near real-time portfolio management solutions, auditing platforms, commercial block explorers, and much more: blockset.com ===============================

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Kathy Wood is the founder, CEO, and CIO at ARK Invest. Prior to this, she spent 12 years at Alliance Bernstein as Chief Investment Officer of Global Thematics Strategies, where she managed over $5 billion. In this conversation, we discuss coronavirus, the economic implications of monetary policy decisions, how innovation gains market share during times of crisis, how Kathy is thinking about Square and Tesla, and then she explains her latest views on Bitcoin. I really enjoyed this conversation, and Kathy is one of the best.

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All right, let's get into this episode with Kathy. but only as an expression of his opinion. This podcast is for informational purposes only. All right, guys, bang, bang. I have Kathy here with us. This is her second appearance on the podcast. I don't ever admit this usually, but her first conversation with me

was my favorite episode ever. And when I told people that she was coming back on, many people were tweeting at me saying that this was their favorite episode as well. So no pressure. We'll see if we can do it again. All right. awesome listen you've been doing this for a long time uh this is not your first rodeo

not your first economic crisis uh let's just start with given the historical context and all the experience you have like what is going on now and should people be worried or not right um well thank you pom very much for uh your kind words and for inviting me back Yes, I have been in the business for more than 40 years. I started when I was in college. And so I've been through 10 crises, if you include recessions. And this appears to me to be like two of them. And the two were shocks, shocks to the system, unexpected, sudden.

The first one was when portfolio insurance failed in October of 87 and created Black Monday. That's when the stock market dropped by almost 25% in one day. That didn't happen this time around. And quite simply, those who thought they could get out of the market because they were insured, that insurance failed. and so it caused all kinds of concerns about systemic effects and so forth. Instead, what happened was the people who had bought portfolio insurance were the losers. This was a shock. People were waiting around thinking, okay, is this going to have reverberations beyond this? And as it turned out, it didn't. So forces in motion before that shock continued in motion. The 80s was a

great bull market. And that continued. The second time, many people will think it's 08, 09. No, it's not. That was a true financial crisis meltdown. This is a shock. It's a healthcare crisis, which has financial ramifications, but it's a shock to the system. And so in 9-11, shock to the system then, we were in the middle of the tech and telecom bust. Everyone was waiting around to see, okay, is this systemic in terms of 9-11, more terrorist attacks and so forth? It wasn't. And forces in motion stayed in motion.

The tech and telecom bust continued for another 18 months. This time around, we were in a very strong economy. And in fact, it was much stronger than what people perceive it to have been now. And the reason for that is in both China and the U.S., the consumer was really strong. And in the U.S. in particular, the consumer also had a large buffer, an 8% saving rate, which has doubled over the last, I'm going to say 10 years. so an eight percent saving rate nice buffer consumer spending very strong but businesses were pulling back and they had been pulling back for 18 months because of the china u.s trade conflict and because of inverted yield curves which businesses were sure uh were going to trigger a recession um well that is not what triggered the recession and i'm not even sure

that this will, in hindsight, be considered a recession. We'll see. I'm seeing numbers. A recession, the official definition is back-to-back quarters of negative GDP. Looks like first quarter will be up. Looks like second quarter will be down big. And the question is, will we be down in the third? Not sure about that. Depends on how fast we get back to work. So I believe that forces in motion before this crisis will continue in motion, we will end up in more of a V-shaped recovery, I think, than most people believe because of the setup. The consumer was strong, had a nice buffer, savings buffer. Businesses had already pulled back. And if the consumer comes back, businesses are going to have to race to catch up to the consumer. Yeah. And so how do you

um take some of the data points that we're seeing so we've got uh i think about 16 17 million americans who have filed for unemployment in the last three weeks right on top of the 5.8 million or so at the end of february that uh were unemployed so call it you know 20 to 22 million um is kind of the official number obviously there's some uh undercounting that probably goes on there uh then you see things like i think there's a wall street journal article that said uh a third of renters didn't pay rent right and you know i'm probably with you and that you could question the accuracy of some of the surveys and things like that, but it's a bigger number than I think most of us expected. Is that kind of temporary type pain that the consumer or the

average citizen experiences, or is there something that potentially you could get economic gain in the third quarter and then you get the consumer that still suffers a little bit? How do you think do that? Yeah, well, in terms of the numbers, I heard today on CNBC, the CEO of Related, which has widespread real estate holdings. So he gave numbers through yesterday. And in his complex of the multi-dwelling homes, he said 90% of those people are paying their rent, which was higher than he expected. In commercial real estate, again, this is one company, but has very broad base, 100% are paying rent. And the biggest laggard is retail. The retailers are on paper-thin margins, so only a third of his retail tenants are paying rent, whereas I think for the

nation, it's more like down to 20%. So there's the weak link right there, right? And a lot of the people who are out of work are from bricks and mortar, more mom and pop small businesses. So yes, I've been surprised at how much work is taking place digitally. Our business has not skipped a beat, not a beat. And in fact, I think we're so much more productive now in some ways than we are on a day to day basis. Maybe I'm speaking for myself, I don't know. So I think we're going to see an accelerated shift into an online work situation, which ultimately could hurt commercial. But in terms of the next half year, I think everybody, I think the Trump administration, the task force in particular, every day reassuring the nation saying this is

going to be temporary, this is going to be, and we're looking for, now most people don't believe Trump when he says, well, this is going to be the sharpest, most vigorous, but they have to take into consideration that that could happen. And that if they start doing stupid things like shutting down, they'll be deprived of a big whip. I think that's been very important. So I think it's going to come out faster, including for, including, you know, we had labor shortages before, labor shortages. So I think, I think we're going to come out of this faster than most people expect. Yeah. And one of the things you're kind of hinting at here is there's a couple of people who have started to say, look, the virus may actually be an accelerant

on the way into the economic shock, obviously, right? Hey, there were some issues. We're now seeing some of that accelerated, but it may also be an accelerant in terms of other trends. So things like remote work, a lot of technology enabled things. It sounds like you're pretty strong in that camp of believing that coming out of this, those trends just now are more likely to occur or happen faster than they already were on pace to do? Yeah. So I started ARC in 2014, and we probably had five significant risk-off, risk-on periods. And during each of those periods, I would lend perspective to our young analyst team and say, look, I've been through a lot of crises. Innovation gains market share at an accelerated rate in a crisis. Why? Better,

cheaper, faster, more productive, more creative, new products and services to solve problems. And I think that's true here. I think this is, you know, we're at what I often call the sweet spot of the S-curve, just entering the steepest part. Even for online retail, I think many people are surprised, given our own habits, to learn that online retail in the United States is still only 15% of total retail sales. Now, I think in all of our lives, it's gone up to the majority of sales, or maybe not majority of non-grocery sales. Even groceries are now coming online in a bigger way, thanks to Whole Foods, Amazon, and so forth. So I think some of the trends in motion that we thought we were just entering the sweet spot of the S-curve for retail, I think this has

accelerated it, as it has for online education, which is not at the sweet spot, but is definitely a trend. Telemedicine, when you get Medicare reimbursing telemedicine, you know you're onto something big. So Teladoc there, online education to you. And these stocks have been affected in different ways. Teladoc has held up beautifully. It went out to an all-time high. And we've tended to sell those stocks in favor of a company like 2U, which because of its low cash buffer and high cash burn, it's in a high investment phase of its life, algorithms out there, these are mindless algorithms. All they do in a crisis is say, okay, two things matter, low cash buffer, high cash burn. and they go out and they kill those stocks. So 2U went from $30 to 11 and a half in two weeks.

That's nuts. That's nuts when it's one of the solutions to the problem that we're facing out there. So we were looking around for those sorts of names, which we know are going to be able to access the capital markets if they need it, because it's so clear they're a solution to the problem. Yeah. Let's talk a little bit about kind of the health crisis first, and then we'll get into the economic and policies and things there. The virus has shut down entire societies, right? I mean, countries, et cetera. What's kind of your take on, is the health crisis warranted in the sense of the response we have on the health side? Are we doing enough, not enough? How do you think through that. Yeah. You know, there have been two other coronaviruses circulating through our

economy on a regular basis. They're annual now. They're part of now our annual foo season. So this coronavirus is different in that it's much more contagious, but much less deadly, right? But when you put those two together, the much more contagious, it could hit a lot more people, much less lethal. Well, maybe it would be typical flu-like numbers, which are anywhere from, in the United States, 30,000 to 70,000 a year. Now it looks like this one's going to kill maybe 60,000. And I guess that's the only number we can really count on because we don't know how many people really have been infected. Two people in my sphere, meaning my household and household health have been infected. So I think, you know, when books are written about this,

we'll say, okay, well, okay, that was an overreaction. And yes, there is a group of people that we must protect when something is that contagious, even if it is less lethal. And In this case, it was those with other lung-compromised diseases, as well as maybe people with high blood pressure. We're not sure about that one yet. And a couple of things are happening because of this virus. First of all, we could not have sequenced it in two days. China sequenced it in two days. It took us five months to sequence the SARS virus back in 2003. So that happened very quickly. Now, China probably knew the sequence, my guess is, well before they shared it with us. And if we had had it sooner, we would have understood it better. But now I think

the other thing that we're learning, the tests that Abbott and Cepheid, which is owned by Danaher, have put out, and I know Cepheid well because I owned it before Danaher bought it, and really, really good company. They're actually based on old-time PCR technology. It's old technology. But what got them to market as fast as they could get to market were two things. First of all, the sequencing of the virus. We understand exactly what it is and we understand how it's mutating too. That's thanks to companies like Illumina. And then the second is synthetic biology. So if sequencing is the ability to read the DNA of a virus, synthetic biology is the ability to write the DNA of a virus and that company is Twist. It's one of the most advanced out there. Not many

people know it, but it's an amazing company. If they had not done those two things, Abbott and Cepheid wouldn't have been able to develop the test as quickly as they have. So that's good. And I think the other thing that's coming out of this, there are two other things from a healthcare point of view. So the SARS epidemic in 03, it circled the world and then went poof, it disappeared. unlike the other coronaviruses I mentioned to you. And so what happened during SARS, that was a crisis. I mean, the lethality of SARS was at least 10%. Ebola was, gosh, it was well above 50%. And MERS was somewhere in between there. So again, this is much less deadly. We don't know how deadly it is because we don't know how many people have gotten it. We'll know

after the fact. So back then, SARS, vaccines, like there was so much money pushed into the development of vaccines. It went poof and the funding for vaccines dried up and then nobody wanted to be in vaccines. All these big pharma companies sold their vaccine companies because they were money pits, right? Now, again, now that we have new technologies like Moderna and Inovio and Arcturus, Moderna and Arcturus are based on RNA technology, Inovio on DNA technology. RNA, we've never seen it work. If it works, it's going to be amazing. And it'll be a very profitable, it's going to be a winner take most, you know, because these companies have developed libraries of data and are going to be able to at least get the licensing fees, royalties

on all of this. So I think vaccine is going to be a good place to be. And the other thing I think that this health care crisis has done is it's providing a lot of political cover. What politician is going to say, no, I don't want to pay for testing for this, that, or the other disease, or I don't want to pay for vaccines. You know, we're not going to put that in the budgets. No, testing, which has also been, it's considered historically a commoditized business. And you have two big companies dominating. You have Quest and LabCorp in the old world, and it's mostly commoditized. Even their esoteric tests become commoditized just because they're so big.

Now, what's happening is you get a company like Invitae or Gardent or Personalis, some of these you may have heard of. What they are doing, I think this is going to be a winner-take-most world, like so many in the artificial intelligence world. they are gathering all the data they have harnessed geneticists throughout the world you know these pools of geneticists and they are beginning to develop tests that are very precise and because they can they've collected the right kind of data so I think they're going to have so much more political cover than they have had historically it's always been an area starved of funding because everyone assumed it's commoditized. It's not. We have the convergence of DNA sequencing, artificial intelligence, and then CRISPR gene editing, which is going to not only will we be able to create these tests so that to understand in a very personal way how

your DNA is influenced and what is impacted, how your DNA is mutating. They'll be able to figure that out and then they'll be able to pull therapies off the shelf or they'll be able to design them with gene editing to actually cure or reprogram your DNA and cure the disease. That's where we're going. Yeah. It's super exciting to see kind of the healthcare side. And I think that the idea of a vaccine or cure is a health component, but it's also a psychological component. Once people know that's out there, I think that changes the mindset. What is your thoughts about the economic cure, right? So we kind of have a health crisis that's causing an economic crisis or kind of a shock as you described it. There's a lot of economic policies that have been implemented.

What's kind of your general view of what's already been done and maybe even what needs to be done in the future. Right. So, you know, my mentor is Art Laffer. I don't know if you're familiar with Laffer Curve Supply Side Economics, but he advises Trump, President Trump informally, regularly. And I know because I hear during the task force briefings, I hear some of the things that Art Laffer says coming out of President Trump's mouth. In the beginning, Art was very frustrated that they were just throwing money at this, just willy-nilly and effectively throwing money at the idea that we don't want people to work. And from one point of view, that was correct. We wanted people, if they could, to work from home, of course,

but we wanted them to be safe, first and foremost. So the programs that were being designed in the early days and were just throw the money at them have been modified so that you're seeing more in the form of loans to small businesses and others that will have to be repaid after a long grace period. So that is good just to keep the infrastructure in place to allow the employment to rebound afterwards. Instead of, unlike in a recession where you have capital destruction, it takes a long time to work through it and then to come back. So I think that's good. I think it's good that they are sending checks out to those who are living paycheck to paycheck. But I think a more important way to help those people

and would have the same effect would be to say, and I've heard President Trump mention it, it hasn't been put into any legislation yet, to basically go on a payroll tax holiday, both for the employers and the employees through the end of the year. What would that do? It would say would encourage businesses who are getting these holidays and employees to get back to work as quickly as possible to take advantage of the holiday and increase their returns by six to seven percent on either side. That's huge. That's the tax wedge that Art Laffer talks about all the time. If you get rid of that wedge, you'll bring a lot more activity back much sooner than otherwise would be the case. And I think the other, in terms of the way they're treating larger corporations,

I think they're creating inducements to rev back up faster. What they're doing is they're saying, okay, if you take these loans, then you cannot buy back shares or pay dividends for a year past when, and I don't know if the legislation has changed here a bit, but this is how it was being written, a year past the day you repay those loans. Well, what will that cause? Shareholders certainly will want their companies to get back on track much faster so they can pay back the loans to the government and then get back to paying dividends, which for many people are a large chunk of their income, especially retirees, and to repurchase shares, which favors all shareholders. So I think they're doing things. They're gradually getting it right

and very sensitive. You hear more and more about, you hear certainly the president and the vice president talking about getting people back to work safely. So you'll have Pence focused on the safety and you'll have Trump focused on getting back to work. And it's a good dynamic and an important dynamic, I think. Yeah. Are you worried at all? You know, we're in a deflationary environment it now. There's a lot of QE going on. Are you one worried that we could over-rotate on the inflationary side when we switch back? And are there any impacts that you foresee potentially on the U.S. dollar as kind of a global asset or reserve asset? Okay. So the first question, And we can take some of, we can inform the answer to that question partly by what happened

after 08, 09. So I remember when, you know, it was QE everything, you know, I remembered being concerned saying, wow, this is just such an inducement to take a lot of risk and just go out there and go for it. That's not what happened. What happened was people were so traumatized by the near breakdown of our financial and economic system that they were not sure we were going to be able to hold together. And, you know, there were all kinds of uncertainties, including what became the election year. You know, we had the European sovereign debt crisis.

this. We had in 16 oil prices crashing like they have recently and China seeming to implode. And so every step along the way, there was a reason for people to hold back and not throw everything that they have at risk taking. And in fact, the velocity of money, which is the critical answer here, has been falling. And my guess is falling at an accelerated rate now. And so all of that QE, most of it is still sitting on the balance sheets of central banks. Now, the way I think about that still is that is kindling for the fire, potential fire that you're talking about. But that kindling hasn't been lit for the past 10 years because every step along the

way, including the China-U.S. trade conflict and the inverted yield curves, every one of those steps along the way has been a reason to recoil and say, so the velocity of money has continued to come down. Now, we have M2 today growing at a 15% year over year rate, which is, I believe, the fastest. I mean, you have to go back a lot of years to see that. I think many people have gotten used to this idea that we can throw anything we want at the system and velocity will fall and offset it. There will become a day. And this could be the beginning, but I don't think we'll see the ramifications in terms of inflation for, I'm going to say, at least a year and a half, maybe two years. Because first, we still do have a little bit

of this seizing up and people saying, is my job going to be there? So that's one reason. and business is the same, is my business going to exist? So again, another reason. If you look, I just listened to the JP Morgan call this morning and so many businesses have taken down their revolvers completely. So they are just awash in cash. They're awash in cash. And they did the same thing in 08, 09. But again, nothing happened. Everybody being scared every step along the way. So the reason we won't have an inflation problem for the next 18 months, two years, there are two reasons. One, oil prices have crashed and oil is a big part of the input. And there's a good reason secularly for oil to crash. We talk about it all the time. I think

oil is going down longer term to $10 or less per barrel. And I've been saying that for a while. That's a personal point of view. And that's because of electric vehicles and autonomous electric vehicles. At the margin, gas-powered cars are going to start losing out, and commodity prices are determined at the margin. That's what a lot of people miss when they say, oh, well, electric vehicles are only 2% of all sales. No, they're a much higher percentage of the growth in the auto industry, right? So the first reason is that major input to so many industries. The second is, typically, if we're going to have a V-shaped recovery, what will happen is productivity will surge. Now, productivity was already starting to surge. So again, this idea of forces in motion

continue in motion. I think the accelerated shift into new technologies now is going to cause an acceleration in productivity growth. We're probably going to see productivity growth numbers in the next year that we haven't seen, I'm going to say since the 60s. So that's another reason. Productivity is a huge force against inflation. Why? Because a company which benefits from productivity can do three things with it. It can increase wages. So if companies have labor shortages, they will increase wages, but not now. Nobody has labor shortage because the unemployment rate is going to go to 15% or whatever or higher. It can go to lower prices to compete and bring consumers back and to compete against China because China is using innovation

and deflation to compete. So that's another thing that could happen here, which would reinforce this disinflationary cycle, or it can go to increased profit margins. And it's probably going to, depending on the industry, going to go to all three. So I don't think we'll see inflation in the near term. I do worry about it now that no one thinks it's possible anymore. I remember starting in the business, it was the late 70s, I was in college, and I remember looking at these CPI numbers that were coming out and economists didn't believe them because they thought inflation had been licked when really it had just started because we went off the gold exchange standard in 1971. But no one could believe the numbers we were seeing. And that's

because they had been lulled into complacency that the Fed could do anything it wanted. Well, I think that we're back in that situation, but we will not face, and I know where you're going with us, obviously, Bitcoin, we won't face the real ramifications for another couple of years. But, you know, I know we've increased our Bitcoin exposure in the discretionary portfolios at ARK. And I think it's the right thing to do from an insurance policy point of view. Yeah, we'll definitely get to Bitcoin for sure. One of the things I want to talk about before is let's just talk about innovation in a time of crisis first, and then we can kind of go through a number of either different investments or industries that I know you guys are interested

in. And we'll finish up with Bitcoin. But when it comes to innovation, you said a number of times now that innovation almost like steals market share during these times of crisis, right? And technology has a massive advantage. Maybe elaborate on that a little bit and explain kind of what you mean by that. And if you have any examples of where that's happened before. Sure. I'll start out by giving you two examples from the 08-09 period, since we have that data and we don't have all the data from this crisis yet. Although I can tell you from the way our stocks are behaving, the market is beginning to understand this. Whereas in 08-09, if you looked at salesforce.com, you would have thought I was going out of business. So what happened in 08-09? I remember

listening to researchers from GE saying, our tech budgets have been shut down effectively. I can't get any of my projects done. I'm using my personal credit card to buy, to pay as I go by salesforce.com software as a service. And I'll put that in as an expense. It's not a capital spending item anymore. And that was an aha moment for me, certainly. So if you look back then, most software stocks, companies, which had the enterprise license model, which most of them did at the time, their budgets were cut enormously. They were hit badly. If you look at, and Salesforce.com was just taken down with all of them, like it was, but because it was a newbie, like it was going out of business. It sold off worse than some of the enterprise license model players. So when you

look back on what happened there, while tech budgets were down 20 to 30 percent, Salesforce.com was an answer to a problem. I can't afford these big enterprise license fees, the upfront fees. I can't at the end of 08, I can't renew. I have to move over to salesforce.com, pay as you go and other software as a service models. Salesforce.com's worst quarter in that crisis

from a revenue growth point of view, remember people thought it was going out of business, was up 20%. percent in the worst crisis since the Great Depression. Retail sales for many, I looked at retail sales numbers going back to 08. The macro sales, they were down 10 to 12 percent at their worst. Amazon's worst quarter was up 14 percent. And I think their worst quarter this time around isn't, there's not going to be a worst quarter. Their sales aren't going to skip a beat. They're one of the biggest beneficiaries. If you look at Amazon sales growth over the last 20 years,

they've averaged almost 25%. And if you had told someone back then that was going to happen, well, first of all, no one would believe it. In our world, what people do even today, because they're so value oriented, they say, okay, this innovators sales, yeah, they can grow for 25% for the next two to three years, then they'll decay to the GDP growth rate. That's not what's happening now. The waves of innovation that we're seeing, and Amazon is the first proof of concept of this idea that we could actually see some of these companies grow at an exponential rate. And all that means is that they will sustain some kind of super growth number like 25% instead of decaying according to the law of large numbers, right? I think our portfolios are teeming

with that kind of stock. And what we tend to do during a period like this is we will consolidate towards either our highest conviction names or the stocks, like I mentioned to you, that are so misunderstood in terms of there being a solution to the problem. So I can rattle through if you'd like me to rattle through by sector or industry. Now, the obvious beneficiaries, which have done very well, Amazon just went out to a new high today, an all-time high. So Amazon and Netflix, I would put Teladoc and Zoom into this category. Zoom, despite its problems with privacy and exposure to China in terms of having its workers there, they've been obvious beneficiaries and people have flocked to investors have flocked to them so when when that is happening

in our portfolios particularly in our flagship portfolio we will be more opportunistic and use those as cash sources in order to deploy towards the much less well-recognized beneficiaries so while zoom is very well recognized you'll have companies like zscaler in the security space and pager duty in the uh instant management space you'll have i have some noted pure storage in solid state in in the storage space the new wave of storage though uh you'll uh have um well you'll have workday workday is well understood but i think it's at a point of accelerated shift as well because it's moving it's infiltrated through hr departments and now it's moving into financial and it's really getting at the oracles and the sap's of the world

so again what what this is saying is the the the old guard is going to lose share at an accelerated rate beware those are the companies that occupy the big that the highest positions in the index funds out there because they're the largest caps is these newbies that are nipping at their heels that have, you know, the opportunity to be 10 baggers, as we say, because they're not well recognized in the media. Kathy, part of this, sorry to interrupt, but I guess part of this too is it's not just the names, right? I think one of the things that you're highlighting here is it's also the strategy of, you know, take a Zoom. Everyone sees that it's working. Everyone's piling in. It's very easy for there to be a bubble like mania in a single name because it's the

obvious choice. What it sounds like you guys are doing is you actually start as that rides and people recognize it, you actually start trimming a little of the position, take that cash, and then you go look for what's the next wave that everyone's going to realize, oh, that's a beneficiary. But if you can find those before it, you're going to benefit obviously from the growth that it'll experience. Right. And the popularity of Zoom is going to feed these other infrastructure players because we need the infrastructure to support it right uh so we owned a zoom and um we owned it in a small size though because the the enterprise value to sales ratio is up at i think at the time 50 times i mean it's crazy but enterprise value to sales right that includes debt and everything

and uh we just said okay we'll put it in because it certainly is disruptive uh and is taking share from the webexes and the other more established but kluge players um it's not really taking share from teams which is microsoft but they're both growing very rapidly together um but we sold it out when it just took off as everything else was plummeting and uh so that is where we will make a valuation call like that saying okay this this now everyone recognizes it's gone even further north in terms of that valuation and look at these others that are there to support it but are being dumped right so that's important it's really interesting too because i think that um part of this uh of your strategy um it's not rocket science right it's basically find the value

before others recognize it have the courage and conviction to invest capital in those businesses and then as other people realize that that's an obvious winner or beneficiary, whether it's from the virus or some other sector, you benefit. One of where I think you really kind of went to bat and there was a lot of people saying there's no way you're right and all stuff was Tesla, right? And you guys were early and I believe even when the price continued to fall, you continued to buy, right? Like the ultimate sign of conviction and you've kind of been proven right to some degree uh as we sit today maybe talk a little bit about like that specific name and kind of what you guys have seen there well what's so interesting okay so um at the beginning

of this year it soared to almost a thousand dollars last may this time last year it had dropped to 100 and it got into the 170s uh and we were buying all the way down and you know i often say i'm the most trolled portfolio manager on twitter um uh i and i am in that and because that not because of me but because of elon and that stock and all the shorts that were who were supporting it. And we had built a very strong case. It's our highest conviction name still. So, but it soared to 900 plus. We were taking profits. If we hadn't taken profits, it would have been a 20 to 25% of our portfolios, which we absolutely cannot let happen. We can only buy up to 10%. So from a psychological point of view, what I like to do when it goes above 10%, I mean,

I like to let it ride, certainly, but at some point, like to take it down, back down to 10%, so that if it drops from there, remember, we can't buy if it's 10% plus. If it does drop from 10%, though, we can buy again. So I usually like to take it down to 10%, and then it drops, and it did. It dropped all the way down to $350 in this crisis. And why? Because the shorts were saying, aha even though they have eight billion dollars in cash now they're saying oil prices are crashing no reason to buy an electric vehicle crazy talk even though if we've done we've done the total cost of ownership with oil prices at this level it's still cheaper to own an electric vehicle today now on a sticker price basis maybe it'll take a year or so uh but so we were buying all

the way down to 350. I can't tell you what the mark was, the last mark. You never catch exactly the bottom. We kept taking it back up to 10%. So that's our style. And now again, I think it's up to 13 and a half percent of our portfolio today because it's had another nice move. Why is this move happening? It's happening because the bears who are typically auto analysts are seeing what their traditional auto companies are doing in this period. In order to preserve a six or seven percent dividend, GM is having to cut spending. And where is it cutting its spending? Electric vehicles. It's cutting everywhere, but electric vehicles. It's going to fall even further behind Tesla in terms of its EVG. And we think there's already two to three to maybe four years behind,

probably four years behind, and we'll be going five years behind. I think it's becoming obvious to these auto analysts, finally, how long a lead time Tesla has relative to the other auto manufacturers. And so, and you know, they are in harm's way financially. I don't, you know, Ford eliminated its dividend. GM's still keeping its dividend. My guess is it will go to, and that will continue to highlight, you know, Tesla doesn't have a dividend. 100% of its R&D is in electric. It doesn't have to share with internal combustion engine R&D, which they still have to spend that money. That's the 95% plus of their fleets, right? And so we think Tesla, because of this crisis, has gained even more lead time here.

Yeah. And I guess when the oil prices crash like this, the argument that, one, Tesla is still cheaper, right? It's kind of one component of it. But it's really interesting to think about Tesla actually gaining market share, even though oil prices are crashing, right? And it has more to do with what the incumbents are not going to do versus what Tesla is doing, right? Tesla sounds like it's just doing what they've been doing the whole time. It's everybody else starts cutting back and therefore Tesla ends up benefiting from a gain in market share. Yeah. If you, So using the first quarter numbers. So last year, Tesla had 17% of the global EV market, including China, which is the largest market. Now, I think these are just U.S. numbers. They could be global, though. By our estimates in the first quarter, Tesla had 30% market share.

yeah that's a big leap yeah now those are all crude and rough and you know we're backing into all kinds of numbers i know that's not the right number uh but they have gained enormous share uh in in this and and they're gaining enormous share of of total auto sales because total auto sales went from, let's see, 17 million a year ago to 11.4 in March. And Tesla's sales on a year over year basis. Now we only have the total first quarter, I think. But I think, again, I'm not exactly right. Their sales didn't drop by 40, 50%. I think they went up by 30, 40% year over year. Yeah, it's pretty incredible. And then I guess this leads to kind of longer term, right? One of the things that we talked about last time when we recorded was the idea of the autonomous

taxis, right? And you kind of, you know, much farther out. When I asked for people to questions to send in for you, one of them was around this idea of if that is the ultimate kind of end state here, and that's where a lot of value gets created as well. Does it make sense at any point over the short to medium term for Tesla to create an actual ride sharing app and start competing with the Ubers and Lyfts of the world? Or is it more continue to invest in R&D, continue to build out that actual technology, and then you back into the fleet at some point in the future? Well, it's a great question from a couple of angles. First, Tesla's ability to produce is limited by, the constraint is management. And so they need to build out management, and they are.

And so in the meantime, as they're revving up on getting their management infrastructure in place around the world, Europe, Asia, and so forth, here, Texas, another one, we do believe that they are going to start their own ride-hailing service. Elon has hinted as such. I think there was a question on, I think it was a recent conference call, but it could have been a podcast, where Elon said, yeah, it sounded like a good idea. Usually when he says that, done, you know? Now, the reason it's also a very good question is I think Uber and Lyft are in a world of

hurt here. And the reason for that is the way that business was beginning to evolve is you were getting these entrepreneurs who were saying, okay, I'm going to buy several cars here and I'll buy the cars, I'll own them and I'll populate them with riders. Well, guess what? They were on shoestring margins probably in the early days, anyone in the early days. So a lot of them are going to be out of business. They'll lose the cars and all of that, and that's sad. And so there is an opportunity here for Tesla to come in. And what that will do, it'll do two things that are very important strategically for Tesla. One, it will increase their free cash flow. It's a very, very profitable business relative to their base business today, which is just producing cars. That's that the gesture producing cars is, you know, a 25 to 30% growth gross margin business. And this is probably that this one, if it were their own ride hailing service would be north of 50%.

The way they would probably do it, interestingly, would be to say to these former entrepreneurs, you know, if you give us $5,000 down on a car, we will let you become a part of our fleet, and you can pay down that car by giving us a percentage of your fees. um the the take rate it would be the take rate the take rate for uber and lyft is uh you know 25 to 30 percent and we think that's going down um we think uh we think tesla's take rate could be much higher because these owners would be paying down their cars over time and they'd be employed in this business so it's a win-win for uh for for both sides it's also a win-win in two ways for Tesla. One, the free cash flow. The second is having a ride hailing service out there means their collection of data will go into overdrive. They'll be pushing cars out that drive 50, 60% of the day instead of I drive my Tesla 5% of the day. So I don't collect very many miles

per day for Tesla to inform its AI deep learning neural net systems. Whereas these drivers would be contributing a lot to the data. Yeah, it's super interesting. Another name that you've been quite bullish on and actually agree with is somewhat underestimated is Square and what they're doing in the fintech and payment space. Maybe give us kind of your thoughts on just like why so bullish on that company and that we can talk through some of the intricacies or nuances of it. Yeah. And I'm going to give a shout out to Max Friedrich, who's our analyst. And we're just about to publish a white paper on comparing Venmo and Cash App to traditional banks and even to each other. You know, Venmo is a bit older than Cash App. And because of that, Cash App has

some advantages, certainly in terms of its agility and in terms of marketing strategies. And, you know, it's a younger team, I would have to say. And we got a lot of data, you know, from PayPal's API. You know, they basically publish this data. So it's a very rich white paper in terms of learning about these ecosystems and learning the competitive advantages that both PayPal, Venmo, and Cash App have relative to banks. So in the case of Square, You know, I just love it because it is really enabling, you know, the lower income strata of this economy, anywhere from the lower income to the highest income. But really, it's much more meaningful to the unbanked. And if you look at where cash up really took off first, if you look at a map and you compare it to an FDIC map of the unbanked,

and underbanked part of the United States, you'll see the overlay is almost an exact match. And so that's how it started. And it started with these mom and pop businesses, really using the Square point of sale device to put on top of their cell phone to actually do business. And so what can Square see? Unlike a bank, which maybe sees end of month or end of quarter income statements, Square sees every transaction that this merchant has and can see the cadence, can see when business is good, when it's bad. And what it's starting to do now is say, hey, we see that you're growing your business. We can offer you a working capital loan. And guess what? You can pay that loan off as your business. Daily, you can pay a bit off,

So it becomes a real time. Oh, we see you probably need more employees. Hey, we can help you with a payroll service. And then they will start infiltrating a consumer base too, which is part of the employee base of this. So its cash app gets added strength because it's becoming part of a bigger ecosystem that is proliferating first through the South. Now it's moving up. We're seeing it move and you'll see on the maps how it is. So, the competitive advantage that these companies have relative to banks, I think is going to destroy banks. It's going to turn them into commoditized utility. I mean, there will be a reason for banks, but it's not going to be the most profitable reason there are for banks now. The other reason banks are going to have so much trouble, if you look at the number of digital users and include banks in the United States, the banks were doing pretty well until Cash App and Venmo started gaining critical mass. Now, according to our estimates this year, uh well venmo's already above uh above jp morgan which is something like more than 40 million something like that uh and and and uh cash app is not far behind in fact we believe cash app will

pass jp morgan this year as well uh now how is this happening the banks have the installed base that's always the trap when you're talking about innovation oh the old guard says that's our market we're going to wipe these newbies off the face of the earth we can do that um not so because the cost of customer acquisition for cash app and paypal is a fraction of that of the banks banks have to pay to attract a new uh checking account or a new credit card uh or debit card somewhere between, they have to pay from a marketing and other costs, somewhere between $350 to $1,500 per. And the reason they've been willing to go as high as $1,500 is because these customers typically have been very sticky and their lifetime value has been very lucrative for the banks.

today cash app and paypal pay twenty dollars think about that fifteen hundred dollars versus twenty dollars and the reason for that is because of the viral nature of cash app and venmo you know if you're telling in the case of i mean it's kind of funny if you took a if you take a look at uh how quickly social networks evolve, so the Facebooks and Googles of the world, if you look at Cash App and Venmo, their uptake is twice as fast as social networking. They're much more viral. Why is that? Well, for the social networks, Facebook, Instagram today, you know, young people don't really want their parents to be following them, right? But when it comes to Venmo and Cash App, heck yeah, heck yeah. Come on, mom. Come on, dad. And so their parents are being forced into

this faster too. And if you look at the various cohorts, cohort by cohort, both the younger groups and the older groups are moving on to Cash App and Venmo twice as fast as they moved on to social media. So this is becoming a big business. And so I often say banks had these creatures, the Venmo and Cash App, nipping at their heels, right? And we can't even say creatures and nipping. They are overtaking them in the digital realm completely. But if you even think on the deposit side. I know this crisis will change this to some extent short term, but I don't think it will change it long term. You've got markets, Goldman Sachs' markets, which they are really trying to become, they're trying to move into the digital realm and take advantage of some of the low cost

of customer acquisition like Square and Cash App. They have been competing with the banks who were offering maybe 50 basis points for deposit accounts. For a while, they were over 3%. They're not now. But in order to make inroads, they're going to have to go for the jugular of the banks. And the jugular is that net interest margin, which is the difference between what a bank gets on a loan and what a bank has to pay on deposit accounts, which fund these loans. So it used to be huge before Marcus came around. And now Marcus and other newbies, I know SoFi and others are offering, even today, crazy rates relative to what's offered in the markets. And they're probably taking risks to do that, too.

Yeah, and I think in one of the recent reports you guys put out, I think it was the Big Ideas presentation for 2020. One of the things I saw that was really interesting was the market is valuing the users differently as well. Right. So the idea that the bank customers are getting valued at a premium to the Cash App or Venmo users, and ultimately you expect that it at least comes to on par, if not at some point, the Cash App users and Venmo users are more valued. So maybe talk a little bit about that. Absolutely. Very good. You really dug into big ideas. Not many people dig that deeply into it.

I read it every year. It's great. Thank you. Thank you. Yes. So if you look at what investors, I think it's a bit different now after the crisis, but when we did big ideas at the end of last year, investors were willing to pay $3,600 roughly, depended on the bank, $3,000 to $3,600 for each deposit holder or deposit account. If you look at each user of Cash App and Venmo, they're paying anywhere from $50 to $150. dollars we think uh so that would mean that that the the market the public equity markets are paying uh 20 times plus for banks when these guys are about to eat the bank's lunch right and so it makes no sense and uh they're much more valuable models also because of the virality they're much more, they should be valued more like social networks than banks. And yet they're completely

dismissed out there. And I think it's just because people haven't, they haven't done the homework. They don't really believe this yet. You can't say these companies are too small anymore. They're growing and they're growing very rapidly. So, but I think it'll only be time and we'll catch up. So that's why Square is in our top five in both our flagship and our fintech funds and actually our next generation internet fund. Yeah, it's really interesting.

I've told a story before to others, but I've got a brother who is, I think 23, 24 years old. And one day I asked him, kind of joking, giving him a hard time. I said, do you know how to send a bank wire? Right? And as you would expect his response is,

what's a bank wire? And I said, well, how do you send money to your friends? And I expected a Venmo or a Cash App type. And he said, well, two ways. He said, Venmo's one. And then he said, Uber. And I remember thinking to myself, Uber? And he said, well, yeah, like when I get out of the car, you know, we split a ride, basically like Uber does it for me. And I was like, that really just highlights the difference of how, you know, his generation of kind of young twenties, they literally think of Uber as a way to pay their friends. And I think that most people over the age of, you know, 35, they've got no

clue that that's even a possibility, let alone that that's how a kid would think about it. Absolutely. If Uber's underlying business weren't so bad, you know, we'd probably be more interested in it for that reason, honestly. I'll just make one more, give you one more thought, very relevant to your world. You know, Cash App has been so creative in marketing. And I think, you know, the Cash App Fridays where they give away one Bitcoin, you know, and you can buy and sell Bitcoin in the Cash App. It's pretty seamless. You know, I believe, and I believe this is one reason Jack Dorsey was going to move to Africa for a while.

I believe that this is Square's way of infiltrating the emerging markets. Now, they have an extraordinary opportunity now because what we say about innovation when it comes to emerging markets is even more true. They have to usually run away from disaster in terms of the loss of purchasing power associated with their currencies. And Africa gets hit every time. And so to bring Bitcoin into that realm in a way that they're able to, I'm sure capital controls and regulation will present some obstacles, but to the extent they can help salvage the purchasing power and wealth of some of these individuals. Bitcoin, with all its volatility, was up big last year. It's up year over year still, I believe. And their currencies have been smashed, right? And so I think that Square's way of infiltrating the emerging markets has been very difficult. There are a lot of obstacles that developed the developed world puts up as Square tries to migrate into Japan and then to Australia. It takes a long time. I think it could happen a lot faster in the emerging markets. And the same is, of course, true with PayPal. Yeah. I can't let you go without talking a little bit of Bitcoin.

You are obviously one of one of the most bullish people, I think, on Wall Street. Maybe let's start with just what you guys have done with your Bitcoin allocation over the last month or two, and then we'll get into some of the other aspects of it. Okay, so I can talk about this in two ways. Only one of our ETFs is holding Bitcoin, GBTC, Grayscale Bitcoin Investment Trust. And, you know, there are new instruments. One's just launching in Canada. And so we're analyzing, we're doing the compare and contrast there. So we may change things up a little bit in terms of the exact instrument. But we have added to it in, it's our next generation internet, ARKW, we've added to it. We cannot go, and this is a limit we've imposed on ourselves, we cannot buy above 2%.

And we're closing in on that now. And the reason for that is, if we do, we risk subjecting our shareholders to something called unqualified income. And I think I mentioned it to you on our last podcast together. Unqualified income, it's not illegal, but if more than 10% of a fund's returns of the gross profits is in unqualified income, and in this case, just think of it would be like commodity-based income. It's not financial markets. It's more CFTC regulated. So if more than 10% of our gross profits is in unqualified income, then the IRS, and these are realized profits, the IRS would be able to confiscate everything above 10%. Now, what's the nightmare scenario here? Say we're in a black swan event and the fund drops by let's say it drops by 50 which was 0809 right that was some funds dropped 50 and let's say bitcoin went up and it hit 10 of our portfolio say it went up

100 hit 10 of our portfolio uh it would be generating all of the profits and we could only keep 10% of them. In other words, it's even worse because we'd be generating all these losses and of the gross profits, the gross, this is not net, this is gross profits that Bitcoin would deliver. Let's say it went up tenfold. We'd only get to keep 10% of that and we'd be realizing the loss on the rest of the portfolio. So it's a little bit crazy, the rules and regs, and hopefully they change over time. In our discretionary portfolios, which are not 40-act funds and where we can do what we want, Bitcoin is about 5% of the portfolio. We bought during the swoon. The swoon was very quickly from 8,000 into the threes. We're happy there, 5%. I think that's good, especially given

what's happened to the rest of the stock we had we had a big correction there as well so we've had to we've had we've been doing a lot of trading yeah and uh let's start with um the kind of black thursday if you want to call it or whatever somebody's going to come up with some cute name for it but there was a drop of 50 percent uh in the bitcoin price um you know a lot of people i think that even the the strong hand holders uh while they still held uh i definitely got some phone calls and people were like, you know, oh shit, this doesn't feel great. Maybe, you know, kind of what was your analysis and like what happened there and kind of how you guys thought about that? Yeah, I think the shock for a lot of people is that we've been able to say for so long

that Bitcoin is uncorrelated. And here we were in the middle of a difficult market for equities and we were facing difficulties with this one as well. And many people who are in both worlds were just probably a little shaken up by that. That was not supposed to happen. We didn't think it would happen. And so this notion that all assets correlate to one in terms of their performance, now we can say applies to Bitcoin in a crisis. It makes a lot of sense. A lot of the people involved in Bitcoin run hedge funds. We are primarily a long-only equity manager. So it makes sense when one market is hurting, the others will as well as there are margin calls.

Now, what I didn't know as that was happening, Yassin Almandra, who I believe you're, you know, you know, Yassin. I do. Yeah. He, at our brainstorm that week, went through the 100 times leverage on this, that, and the other exchange. And I remember saying to Yasin, I said, Yasin, I know a lot about Bitcoin. and and and i also am on the lookout especially during during difficult markets for leverage points who has the leverage who's going to be forced to sell where the margin call is going to be and i said but i didn't know there was 100 times leverage out there anywhere and i said is this common knowledge and he said uh it is in the bitcoin world but i think the disconnect if i had to be honest about it, is those in the Bitcoin world, that became normal because these guys were,

they were, they could do no wrong. They were, they could do no wrong, you know? So, and by the way, in the equities market over the years, I've always learned whenever I think I can do no wrong, watch out, watch out, start, start taking the risk off, right? Because it's too easy. that's what happened and there were too many out there who had net who were who were leveraged to that extent who had no idea what a bull a bear market would do to them like kill them they're dead uh now i think the good thing that's happened about that is everyone knows leverage is something you really have to watch. And even in terms of our future plans, in terms of using leverage in the crypto world, I know what to do. I've run hedge funds and so forth, but it's very clear

to me that the people who were stuck, I don't think they were the sophisticated hedge funds. They were the individuals who got hooked and then, you know, began to believe they could do nothing wrong and then now are out of business. I think it's a good thing for the ecosystem that that understanding is look for the leverage. That's where your weak link is. And you can even say that in the various crypto asset ecosystems. They all learned a little bit more of the governance on some of these is excellent, but they are all learned a little bit more about, you know, how to adjust their governance to look out for that as a pain point, as a potential pain point and risk factor, which I think is good. I think it's good for the whole ecosystem. them. Yeah. It's one of those things where people got to learn the lesson, right? And I think that definitely happened. And the other piece too, is a lot of the people that were selling, getting

liquidated, et cetera, they're not the long-term holders, right? If you look at most of the Bitcoin that moved that day and kind of the weeks before and after, it's all things that have moved in the last year, right? Pretty much there's a bunch of people who hold onto it and they believe it's going to be a very binary outcome. There's no leverage. There's no anything. There's passive holders. And that number continues to grow. So I think generally headed in the right direction. It's great that there's data on that, because I know Yasin has presented us with that chart. Who sold all recent buyers? Pretty much, very little by the long-term holders. Absolutely. And I guess last question for you on Bitcoin before we wrap up is the halving is

coming up. And one of the concepts that I've spent a lot of time on recently, and I wish that I remember who came up with this terminology, but they said, look, if you anchor on in the legacy world, we're having quantitative ease, right? Kind of the expansion of the balance sheets and this liquidity injected, we're about to get quantitative hardening in the Bitcoin world. And so maybe some thoughts on how that having should play out given the macro backdrop and kind of how you guys are thinking through that yeah we had a big discussion about this at our brainstorm uh last friday and uh you would be very welcome actually your listeners are welcome in you can um we do have life size which is the system i'm not sure how many we can handle but

we are getting quite a few people tuning in now and uh the the concept was around and what i loved about Yassine's kind of presenting both sides, he said, I'm kind of, I don't know, I'm not sure which side I fall out on here. I have a very simple approach and Brett Winton, our director of research as well, weighed in and we went back and forth on it. And I think just in a very simple way from uh given the backdrop the economic backdrop that we have when this having and i don't know if you call it having or happening but uh uh when it takes place um and and uh the rate of inflation is cut in half uh there are two things that that will have happened one another very important software update in the ecosystem uh right uh without forks uh and and just uh

at least that i know about and um to um the you know no intervention despite what's going on in the rest of the world where everyone's intervening to throw everything they can at a problem no intervention that 21 million is um so that will be uh another uh um another proof of concept that this is going to happen no matter what is going on in the rest of the world i mean if there were developers so inclined they could have said look you know we can't we can't do this in the face of what's going on no no you must do it in the face of what's going on out there this is the proof of concept. So from my point of view, it'll be a very positive event. Now, I was in the camp for a while as people were talking about the halving and saying, okay, this is going to be

a very bullish case. And the price was lifting and we got into the 12,000 or wherever we got then. I was thinking, okay, it's taking place now. Typically, you discount these things ahead of time but with this uh um you know this eruption in in the market in the bitcoin space as well i i think i'm done this is going to be a positive event and you know it's what it's the end of may is it uh like uh may 11th to 13th somewhere in there okay mid-may i think it should be a positive event you know i don't know why it wouldn't be i i can't imagine a reason it wouldn't be unless unless the software, unless something goes wrong with the underlying technology, which I highly doubt. Yeah. Part of what I think I'm personally looking at is you get all the QE, not just here

in the US, but also Japan, trillion dollars, a bunch of liquidity just being injected in the global financial system. Over time, people, just like we saw in 2008, 2009, assets sold off in 08 and that kind of liquidity trap uh and then eventually people went for the inflation hedges right and through 09 10 and 11 gold obviously uh which had sold off 30 percent in 08 uh ended up doing very nicely hit a new all-time high uh and if that happens again right which uh structurally and kind of sequentially um is likely to happen i think to some degree uh if it does it's going to coincide right around the same time that you get that happy right so to some degree would be like everyone looking for gold and half the gold miners in the world shutting off at the same time

yeah right and and seems bullish but again we kind of have to watch this play out and see you know does the having actually occur does the code execute you know and kind of does the macro uh backdrop uh execute as well and we'll see you know having met some of the key or the core developers i had the privilege of meeting a number of them uh last year and i'm i i was so impressed so impressed i would be shocked if something went wrong with the software and the resolve to cue to the 21 minutes the cadence all of that there i i was as i said my confidence in bitcoin went up dramatically after I met them because you know before that I kind of thought you know these these are these are kids who have never seen any crisis and that's not true that's not

true there are some I was able to have a solid economic discussion with a number of them I mean deep economic theory in a way that I never imagined and that's because there are gray hairs among, there are young, but then there are gray hairs, people very committed to this. So I was struck by that. And my conviction in Bitcoin went up enormously after that. So, and I will say it's gone up. I was a little like this hundred times leverage, what the heck? And seeing Bitcoin disconnect from gold itself, I was saying, okay, there's something wrong here. and that's when we had the brainstorm session. I mean, Yacine had mentioned it,

but the brainstorm session was about leverage and then the having and what would the net-net be. So I think you know where we come out on this. Absolutely. Well, listen, Kathy, I really appreciate you taking the time to do this. People are really, really excited to kind of hear your thoughts

on a whole bunch of this stuff. You guys have done a fantastic job, I think. Not only one, kind of presenting all of the information and research, which people find valuable, But obviously, too, as I like to say, the scoreboard, you know, kind of proves it for itself because it's been a great job there as well. So just for everyone else, thank you for doing this stuff. Where can people go find either information or where would you like to send them if they want to learn more about ARC and kind of your process and reports?

Yeah. So ARC dash or hyphen invest dot com is our research site. Awesome. All right. Well, we will definitely have to do this again. I think that people love to hear from you whenever you want to do it. So thanks so much. Thank you. Thank you very much. It's a fantastic forum because you know what? You really like to dive deeply into what we're doing. And that's the only way you can understand how profound some of the

innovation platforms we're researching are. I mean, they're going to deliver exponential growth for years and you, you are really doing your viewer base an incredible service. Well, I'll leave you with one thought, which was I saw somebody tweeting saying, tell Kathy to go on CNBC more. She can't let Chamath have all the fun.

So if people will love the hot takes there as well, if you want to go do them. Okay, well, thank you. Thank you. I much prefer this form. Thank you. Take care. Hey everyone, Pop here.

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