The Bloomberg Businessweek – Day 3
May 19, 2021
By Bloomberg Live
In a first-of-its-kind event experience, we bring the magazine to life. Over the course of five days, the Bloomberg Businessweek will explore the HOW TO’s of technology, culture, creativity, entertainment, global affairs, health care and science.
We continued the event on Wednesday with a focus on Finance and Economics. Democratization of investing has transformed the markets, with Bitcoin, SPAC’s and the Robin Hood effect all emerging as new trends in investing. We discussed the leading indicators to watch with the top names in finance and economics.
Click here to view video of today’s event.
- Dr. Raphael W. Bostic, President & CEO, Federal Reserve Bank of Atlanta
- Brian Brooks, CEO, Binance.US
- Sam Heughan, Founder, The Sassenach
- Alex Rodriguez, Chairman & CEO, A-Rod Corp
- Cathie Wood, Founder, Chief Executive Officer & Chief Investment Officer, ARK Investment Management LLC
The Bloomberg team included:
- Romaine Bostick, Anchor, Bloomberg Television
- Kathy Burton, Hedge Fund Reporter, Bloomberg
- Peter Coy, Economics Reporter, Bloomberg News
- Becca Greenfeld, Co-Host, The Pay Check
- Jason Kelly, Chief Correspondent, QuickTake, Bloomberg
- Carol Massar, Anchor, Bloomberg Businessweek TV and Radio
- Michael McKee, International Economics & Policy Correspondent, Bloomberg TV & Radio
- Sridhar Natarajan, Senior Wall Street Reporter, Bloomberg
- Pat Regnier, Finance Editor, Bloomberg Businessweek
- Erik Schatzker, Editor-at-Large, Bloomberg Television
- Jacqueline Simmons, Senior Executive Editor, Americas, Bloomberg
Alex Rodriguez, Chairman & CEO, A-Rod Corp, and Jason Kelly, Chief Correspondent, QuickTake, Bloomberg, opened the day with a conversation on mentorship and venture capital. Rodriguez highlighted the importance of mentorship in business, picking out Magic Johnson as a particular influence in his own life. “Magic Johnson is one of my heroes. His advice and his experiences both good and bad have been a pivotal part in how I built out A-Rod Corp. If you’re a mentee, there are plenty of great mentors who are willing to share experiences and it’s priceless and invaluable. And now I’m doing it for dozens of athletes and entertainers who call for advice; it’s my opportunity to pay it forward to what Magic and others did for me.”
Former baseball star Rodriguez went on to discuss his new VC firm, VCP, which he has set up with Walmart’s former e-commerce chief, Mark Lore. “VCP stands for vision, capital, people. The idea is to take a big stake in companies, anything from 40-80%, and to take a company from good to great.” Rodriguez said that they are particularly excited about the social media and e-commerce sectors.
Next up was a How I Got That Story conversation among Kathy Burton, Hedge Fund Reporter, Bloomberg; Sridhar Natarajan, Senior Wall Street Reporter, Bloomberg; Pat Regnier, Finance Editor, Bloomberg Businessweek; and Erik Schatzker, Editor-at-Large, Bloomberg Television, about Bill Wang, the trader who lost $20 billion and shook the markets.
Regnier, who moderated the discussion, noted that this was a story that came so fast that the Bloomberg reporting team had to really scramble as nobody saw it coming.
Schatzker said that this was a story about hubris more than anything else as well as the perils of leverage. “Wang operated invisibly for years with a fortune that at its peak exceeded $20 billion – completely out of the sight of the rest of the financial services industry, known only to a handful of bankers and brokers. But what makes this story truly remarkable is that he lost $20 billion in the space of two days. One individual lost more money faster than anybody else ever had before.”
Burton provided some history of and perspective on Wang’s background and stock picking technique. “Previously Wang made a lot of money for Tiger Management before starting his own hedge fund and family office. He liked to make big bets – he bought a handful of stocks and he just kept buying them, he didn’t trade around them, he just picked companies he thought were good and held them.”
Sridhar contextualized Wang’s losses for the lenders who were some of the most reputable in the financial services industry. “This was one single person losing so much money so quickly but also dragging down well-known institutions with him. When his portfolio was going down, there were a dozen prime brokers in Europe, the U.S. and beyond who all had margin call demands. This was a burning house and everyone was trying to get out fast, dump their holdings, save their skin. Some managed to do just fine – like Goldman Sachs, Deutsche Bank, Wells Fargo – while the others were stuck in that house.”
In the next session, Cathie Wood, Founder, Chief Executive Officer & Chief Investment Officer, ARK Investment Management LLC, joined Carol Massar, Anchor, Bloomberg Businessweek TV and Radio. In response to the dramatic drop in crypto markets today, Wood explained, “I think we’re in a risk-off period for all assets. If you look at the stock market, the more risky or volatile parts of the market have come in dramatically since mid-February. A lot of concerns are around inflation, initially that was helping Bitcoin as it is a very important inflation hedge, but what’s happening right now is because the volatile, innovation part of the stock market has gone through such a correction, the correlations among volatile assets are going to one right now and that includes Bitcoin.”
Wood went on to reassert her confidence in Bitcoin. When asked if she still felt that Bitcoin would shoot up to the $500,000 level, a figure she previously predicted, Wood responded: “We do. We go through soul-searching times like this and scrape the models and our conviction is still high. I think we are in a capitulation phase, which is a really great time to buy no matter what the asset is. A capitulation phase is: buy – it’s on sale.”
Wood cautioned that the one thing that has changed in the crypto space is the environmental concerns around Bitcoin in particular; these have caused people like Elon Musk to pull away. “Right now the percentage of Bitcoin mined with renewables and HEP is quite substantial, I think in China it is over 50% in renewables,” she said. Wood concluded: “We believe that Bitcoin mining integrated into the distributed grid, solar roofs and powerwalls in homes, for example, could be the future.
In conversation with Romaine Bostick, Anchor, Bloomberg Television, Brian Brooks, CEO, Binance.US, said that it was important to put a finger on why the current fluctuation in crypto asset valuations is occurring. “There’s a fair amount of misinformation going on in the markets – from Elon Musk tweeting to misinterpretations of what China actually said yesterday. Those things get filtered in a very weird way,” he said.
Brooks posited that it was important for crypto to be treated and regulated as a traditional financial asset. “In this country we haven’t built a two-sided crypto market yet the way we have with every other traditional asset class – you can basically only be long crypto, you can buy or sell but you can’t engage in Bitcoin futures, derivatives, swaps. These are things that bring price discovery and stability over time; we need to get regulators comfortable that these kinds of things are a positive and not a negative in this asset class, which I think we’ll get to eventually.”
Dr. Raphael W. Bostic, President & CEO, Federal Reserve Bank of Atlanta, spoke with Michael McKee, International Economics & Policy Correspondent, Bloomberg TV & Radio, about the future of the economy. Bostic highlighted employment growth and rising worker pay as a particular focus of his.
“The labor market is such that a lot of firms are having trouble finding people to fill the slots they have available. Most businesses who are paying more for workers are passing that through into the final price of goods in the marketplace, though it is not clear if this will be the new normal so that the pace of that inflation continues once we get through the summer and those relief payments have been spent by families. This is one of the big unknowns as we move forward – whether employees and firms have a different relationship with consumers and their ability to pass on price increases.”
Bostic stated: “There’s a lot of reasons to be optimistic about how the economy is going to progress, and we will see if the bets investors are making get borne out as we go through the next few months.”
We wrapped up the day’s sessions with a conversation and master class on whisky from Sam Heughan, Founder, The Sassenach, who told Carol Massar, Anchor, Bloomberg Businessweek TV and Radio, about his blended Scotch business called The Sassenach. Heughan created his product after a road tour around Scotland’s distilleries to pinpoint his own recipe.
“Single malt whisky is synonymous with Scotland. But, for me, blended whisky has so many characteristics that are unexplored. People have looked down on blended whisky in the past, but then we looked at Asia right now and they are making some fantastic blends that are very smooth and easy to access. I wanted to create something that reflected my love of Scotland but yet still had that smooth and easy-drinking accessibility that the Asian blends have,” Heughan said.
Cheers to a fascinating day 3!
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