https://www.youtube.com/watch?v=gd29fmPKENc
1.35萬 位訂閱者
Welcome to another episode of SALT Talks with hosts Lisa Diaz and Anthony Scaramucci and guest Cathie Wood, Founder, Chief Executive Officer & Chief Investment Officer of ARK Investment Management.
With over 40 years of experience identifying and investing in innovation, Cathie founded ARK to focus solely on disruptive innovation while adding new dimensions to research.
Through an open approach that cuts across sectors, market capitalizations, and geographies, Cathie believes that ARK can identify large-scale investment opportunities in the public markets resulting from technological innovations centered around DNA sequencing, robotics, artificial intelligence, energy storage, and blockchain technology.
SALT Talks provides a window into the minds of noteworthy business leaders, policy experts and innovators shaping the future. To learn more about this episode, including podcast transcripts and show notes, visit https://www.salt.org/talks
3:56
andy's comment an overnight sensation
03:59
i know you back from the 1980s um
04:02
and i know the path was not a straight
04:05
upward trajectory or a j
04:07
curve so can you talk to me or give us a
04:10
sense of what do you think was the
04:11
breakout phenomenon
04:12
what were the pieces of the equation
04:14
that came together
04:15
that made you a household name that
04:18
everyone knows about
04:19
especially let's be honest you're a
04:22
woman you're probably the most
04:24
famous woman investor i think in on the
04:27
street right now so
04:29
what were the convergence of events that
04:31
happened i love the word convergence
04:33
because uh
04:34
that's what we are really focused on the
04:36
convergence
04:38
among uh innovation platforms that are
04:41
growing
04:41
exponentially there are five platforms
04:43
14 technologies
04:45
uh and i think there are a couple of
04:46
things that happen first of all
04:48
we were filling uh we were fulfilling an
04:51
unmet need
04:52
what happened after the tech and telecom
04:54
bust and then the 0809 meltdown
04:57
is you had really quantitative research
05:00
take over
05:01
and benchmark sensitivity increasing
05:04
if not outright passive investing now
05:08
at the same time the seeds that were
05:11
planted during the tekken telecom bubble
05:14
and before that actually really over the
05:16
20 years starting
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uh in 1980 the seeds
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for the innovation platforms around
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which we have centered all of our
05:24
research
05:25
that were planted back then uh back then
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there was too much capital chasing too
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few opportunities too soon
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why the technologies weren't ready
05:34
oracle and cisco are not taking us into
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the new age
05:38
so the technologies weren't ready and
05:42
the costs of them were way too high
05:45
good example dna sequencing 2003 only 18
05:50
years ago
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it cost 2.7 billion dollars and took
05:54
13 years of computing power to sequence
05:56
the first
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whole human genome just one person
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uh today it's about five six hundred
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dollars
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and takes an hour or so of computing
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power
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think about that that's 18 years but it
06:09
took that
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long for the cost to drop low enough
06:13
which is
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the critical variable uh in order to
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scale the technology so that
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i think uh the fact that we saw an unmet
06:22
need
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that the market had gone passive
06:25
effectively even benchmark sensitivity
06:27
to me
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uh feels very passive and uh
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at the same time innovation in the
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private markets
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was being valued at multiples of what it
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was being valued in the public markets
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and we knew investors did not own enough
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innovation in the public markets
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and we also knew there wasn't enough
06:48
research and so we
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uh started an open research ecosystem we
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give our research away
06:54
we believe we're the first sharing
06:56
economy company in the asset management
06:58
space when it comes to research
07:00
and in the sharing economy if you don't
07:02
give you don't get
07:03
we are sharing our research because we
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want to become a part of the communities
07:09
that are doing the research and we get
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so much back from them
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they will uh tell us when we're making
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mistakes in our models because we share
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our models
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uh and they will tell us when we've made
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a mistake uh
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uh mistaken assumption that we don't
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even understand we've made
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uh that's really important because in
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the world of exponential growth if you
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make an incorrect assumption
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early on and you carry it on carry it
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along too long you'll make an
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exponential mistake potentially
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so so that's been really helpful and i
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think the the third thing
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was is the gratitude
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that we're getting from individual
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investors
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who are reading our research and taking
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it seriously
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and investing according accordingly we
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because we run active equity etfs we
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have to disclose our holdings at the end
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of every day
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we go one step further we publish our
08:07
trades every day
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uh and now we've got youtube sites out
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there which talk about our trading
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every day uh or they talk about the
08:16
latest controversy
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uh that that uh arc invest
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uh has um has attracted shall we say
08:23
from the traditional financial world
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and so i think we've gone a bit viral
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you know in a way that i never expected
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uh we've gone a bit viral
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and i think one of the reasons is our
08:35
research is not just about investing
08:38
our research is is educating
08:41
uh individuals and businesses
08:44
uh about how the world is going to
08:48
change and how to get
08:49
on the right side of change and stay
08:51
there so that they can not only do that
08:53
for themselves but guide their children
08:55
and their grandchildren
08:57
so i think this is much more than just
08:59
investing
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uh and and i guess the technologies
09:04
were right uh for uh to enable us to do
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this
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you know it couldn't have been done 20
09:09
years ago uh so i think everything came
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together
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wow it's an amazing phenomenon so so
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when you think about it do you think
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innovation is an asset class
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and if it's in fact an asset class how
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big can it be and how invested do you
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think
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the market is currently well we think
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uh that if you mean the market
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institutions in particular
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we think they are short innovation in a
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big way
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uh we think individuals have
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a much higher weight in innovation and
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are more correctly positioned actually
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yes uh so innovation um
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is it an asset class no uh i think the
09:55
the the before crypto
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this is the new asset class crypto the
10:00
crypto asset
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uh world and before that equities
10:04
in the 1600s so
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those are asset classes uh this is a
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categorization
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and interes interestingly uh
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we can look at what happened with
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emerging markets msci
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how did what what's its claim to fame
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one of its biggest
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is creating the category of investing
10:26
called emerging markets because
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when i was a capital group and capital
10:30
was a global investment firm at the time
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way ahead of its time uh i i remember we
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were
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investing in brazil and malaysia we were
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doing country by country right
10:43
and msci basically said well wait a
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minute each of these countries has
10:49
idiosyncratic risks why don't we
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construct this category to lower that
10:55
risk
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and increase the return of investors
10:58
portfolios
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as they allocate to emerging markets
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a new a new category uh msci has just
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done that with
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innovation and they did it uh
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with keywords from us
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they approached us and asked
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would we be willing to share the
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keywords
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we associate with innovations so we
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considered that high praise we were
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trying to attract the institutional
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world to innovation
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but it was a no-go because there was no
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benchmark now i just told you how much i
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hate benchmarks but
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there was no benchmark so
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against everyone's expectations we
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agreed to do this
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with msci and they have created some
11:50
very thoughtful indices they've taken
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our
11:52
keywords and used artificial
11:55
intelligence to
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scrape the world and whatever they do
11:58
the convergences they
12:00
use are different from ours i've been
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surprised at
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uh how low the overlap is actually they
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have 400 to 500 stock portfolios
12:08
ours are 40 to 50 stocks so concentrated
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rifle shot they've got more of the
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scatter shot
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and and so i think they're doing a
12:18
service to the world and they're doing
12:20
for innovation
12:21
what they did for emerging markets
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because uh the
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five major platforms as anthony
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mentioned dna sequencing
12:29
robotics energy storage artificial
12:31
intelligence blockchain tech technology
12:35
those they do not all behave the same
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way
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uh i can tell you our autonomous
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robotics
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uh and um autonomous
12:45
technology and robotics fund we just
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renamed it uh it behaves
12:49
very differently from our genomics
12:51
revolution but
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the interesting thing is they are both
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uh they they're not sector funds they
12:59
might sound like
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it but they're not in fact even our
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genomics revolution fund
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cuts across healthcare of course that's
13:07
the largest category
13:08
but the the uh one of the most important
13:11
applications
13:12
of genomics is in agriculture crops
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livestock aquaculture you know that's
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that's probably in terms of percent
13:20
impact going to be where the biggest
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impact is
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uh in the uh ag space so uh
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what we've done at arc is um
13:30
this is to anticipate one of your
13:31
questions is
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we have turned our research
13:37
department upside down relative to
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traditional
13:40
asset management our analysts
13:44
are specialists in technologies
13:47
that are going to cut across sectors
13:50
they are not
13:51
specialists in sectors or sub-sectors
13:54
uh all of our analysts are very
13:56
comfortable with technology
13:58
technologies permeating every sector i
14:01
think analysts
14:02
focused on health care and industrials
14:05
and utilities
14:06
are all going to be surprised at how
14:08
profoundly
14:10
technology is going to impact their
14:11
sectors and they're not comfortable with
14:13
technology so we set it up where each of
14:16
our analysts
14:17
is very comfortable with technology so
14:20
traditional um research is siloed right
14:23
i mean that's what we're talking about
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so you're looking to weave themes
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across various um asset groups so
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so i suspect the graham and dodd
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investing team
14:33
would have said you're crazy um and
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they would have discounted very
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voraciously
14:40
the likes of names that we're talking
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about tesla teledog
14:44
zooms spa spotify and
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what what do you say back to them what
14:49
what what are their arguments and have
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they started to fold and is there a
14:53
pickup and some of that
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institutional um investor base that's
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under invested
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in innovation as defined by arc asset
15:01
management
15:02
we are seeing more interest uh it's
15:05
evolved much slowly than i
15:07
expected given how low the correlation
15:11
of returns are in our innovation
15:13
strategies
15:14
relative to traditional growth
15:16
strategies and
15:17
inverse correlation relative to to value
15:20
of course
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uh and so i've been surprised because i
15:24
thought institutional investors were
15:26
looking uh for those low correlations
15:29
in fact they have embraed they're
15:30
embracing bitcoin faster
15:32
than they're embracing our strategy
15:34
which is even more ironic
15:37
when you think about it so crazy yes and
15:41
many uh many commentators out there
15:44
actually call me crazy kathy
15:46
uh and and and they still do uh and they
15:50
will continue to do so and i love it and
15:53
the reason i love
15:54
it is there's a lot of disbelief in what
15:57
we're doing
15:58
the stocks we own if you are using
16:01
a valuation based on this year or next
16:04
year
16:05
and that's your primary screen uh
16:09
in terms of either introducing stocks to
16:12
a portfolio or sizing them
16:14
um you'd never ever buy our portfolios
16:18
or most of the stocks in our portfolios
16:22
and so most people don't understand
16:25
that we have a five-year time horizon
16:28
uh exponential growth in the early days
16:32
looks very much like linear growth
16:35
especially when you're
16:36
working from a very low base and so
16:39
most of the industry is uh
16:43
linear in its thinking linear growth
16:46
that is
16:47
we're focused only on exponential growth
16:49
if you give
16:50
us five years the difference between
16:53
linear
16:54
and exponential is shocking let me give
16:57
you an example
16:59
last year there were 2.2 million
17:02
electric vehicles sold
17:03
around the world including china the
17:05
largest market
17:07
we believe that number is going to 40
17:09
million in five years
17:11
now that's almost a 20-fold increase
17:13
most people do not believe that's
17:14
possible
17:15
and the primary reason they believe that
17:18
is they've never seen it happen
17:22
and when they thought it was happening
17:24
tech and telecom bubble
17:26
it ended in tears which is exactly what
17:28
they expect
17:29
our portfolios to do you have to go back
17:32
to the early 1900s to see
17:35
this kind of exponential growth and take
17:38
the auto sector
17:39
that's where we saw exponential growth
17:41
caused by technologically enabled
17:43
innovation
17:45
so no one is expecting 40 million
17:48
haircut that by half we are now seeing
17:51
some people saying uh it might get there
17:55
could get there but nothing like 40.
17:58
um and in the early days in 2014 the
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numbers that traditional
18:04
forecasters were using for evs in the
18:06
early 20s were like 250 000
18:09
we just did 2.2 million
18:13
so i think if you give us a five-year
18:15
time horizon
18:17
and the multiples we attach to uh
18:20
companies
18:21
at year five are actually uh
18:24
more mature multiples their valuations
18:27
are going to come down
18:28
dramatically but their growth uh
18:31
rates in terms of earnings are going to
18:33
be exponential
18:35
and i think it's that concept of
18:37
exponential if you think about
18:39
our world what if you think about
18:41
dividend discount models you talk about
18:43
raymond dodd what are you doing
18:44
okay if you have this exceptional growth
18:47
you have it for two or three years and
18:48
then you decay immediately to
18:50
uh to gdp growth which by the way we
18:53
think is going to be very low
18:55
two to three percent until some of these
18:57
innovations
18:58
are um get to a level where they
19:02
start moving the gdp needle
19:05
anyway uh so the multiples we use are
19:09
really more mature multiples than we
19:11
think
19:11
we we will actually see at that time but
19:14
we want to be conservative
19:16
uh and so people say with our tesla
19:18
tesla is now at a little bit below 700
19:22
our bear case for it in five years
19:25
meaning no autonomous
19:27
is fifteen hundred dollars so it
19:30
meets our minimum hurdle rate of return
19:33
which is fifteen percent at a compound
19:35
annual rate
19:36
and i know during this correction we've
19:38
been in a
19:39
serious correction for innovation for
19:42
the last six weeks to two months
19:44
um and i think our i think we're
19:48
down 30 some odd percent uh from peak to
19:51
we were
19:52
down 30 uh some odd percent uh peak to
19:54
trough
19:55
what happened because of that correction
19:57
if if we add up
19:59
all of our price targets and rates of
20:01
returns and all that
20:02
uh weighted by a position in the
20:05
portfolio
20:06
um at the peak our price target
20:09
suggested we would have a 15 percent
20:11
compound annual rate of return
20:13
we're really not comfortable that that
20:15
was our
20:16
where we are in other words we had had a
20:19
a streak of very good performance out
20:21
performance
20:23
after the correction now the compound
20:25
annual rate of return that we see is 25
20:28
so instead of delivering a double over
20:31
five years this is not a promise by the
20:32
way our compliance department uh
20:34
would want me to add that quickly uh
20:37
instead of
20:38
a double over uh five years we think we
20:41
have a triple
20:42
and our confidence in all of these
20:44
platforms and technologies
20:46
is only growing and and our confidence
20:48
in tesla's outlook
20:49
is only growing so it's safe to say you
20:52
think this is an excellent
20:55
buying opportunity particularly for
20:57
those institutions who have
20:59
been non-believers in the innovation
21:02
story
21:03
yeah we we think they're
21:06
very short innovation and the problem
21:10
with that
21:11
uh is that disruptive innovation
21:14
creates cr creative destruction
21:18
we think more than half of the s p 500
21:20
is in harm's way
21:22
of being thoroughly disrupted
21:25
disintermediated
21:26
uh and so as a if for no other reason
21:31
they need a hedge it's called innovation
21:35
i love it so arc asset method is
21:38
offering
21:38
innovation as a hedge well that's
21:40
something
21:41
oh well we you know we got the idea from
21:44
a value investor
21:45
who called us up and believe me we were
21:48
so happy to get calls at that time
21:50
called us up we had all the time in the
21:52
world for him
21:54
and he said look i'd never buy one stock
21:56
in your portfolio i
21:58
i don't even know how you can buy them
22:00
but i know my biggest risk is a value
22:03
trap
22:04
and meaning cheap for a reason including
22:07
potentially going out of business
22:09
so i'm going to hold my nose and i'm
22:11
going to put a little bit
22:12
of innovation in my portfolio this was a
22:15
value investor
22:16
wow that's a super interesting idea so
22:19
so just switching gears
22:21
and at the rest of talking my own book
22:24
so do you think innovation is a u.s
22:26
centric
22:27
or a developed market phenomenon or do
22:30
you think
22:30
innovation has gone global and there are
22:32
opportunities that are unappreciated in
22:35
the rest of the world
22:36
i'll talk your book i think
22:40
i think that their innovation
22:43
is global and in fact there is
22:46
a a race on and it's
22:49
importantly featuring china and the us
22:52
china influencing the rest of asia of
22:54
course
22:56
and i think it's great for innovation i
22:58
think it's going to happen
22:59
these platforms are going to happen
23:01
faster
23:02
than they otherwise would if if this
23:06
were just
23:06
a u.s uh phenomenon so i know you're
23:09
much more involved in asia emerging
23:11
markets
23:12
uh and we think they're ripe with
23:15
opportunities
23:16
uh as well fantastic
23:19
do you have any favorite names in the
23:22
emerging markets world that you can
23:23
share with us
23:25
uh well in terms of
23:28
uh let's see i know one stock we have
23:31
income
23:31
and that's uh ping ping on health care
23:34
yeah
23:35
so you know the reason china is growing
23:38
so quickly
23:39
and this was true with digital wallets
23:40
like wechat pay
23:42
and alipay is it
23:45
it didn't have the infrastructure to
23:47
begin with uh
23:49
in the u.s we were saying you know it
23:51
was good enough lots of inertia
23:53
we were very loyal to our banks i've
23:55
been with my bank for more than 20 years
23:57
so banks have paid up to acquire
24:00
customers
24:01
uh when you've got a viral
24:05
technology like wechat is
24:08
and you incorporate a payments ecosystem
24:10
in it it goes viral pretty quickly
24:13
and it is so much better than what they
24:15
have
24:16
that even those in their 70s and 80s
24:19
merchants in rural areas
24:21
want to use it they want to avoid uh
24:24
counterfeit cash right
24:26
um ping on health uh
24:29
same thing the the this is a digital
24:32
approach
24:33
to healthcare in china huge unmet need
24:37
again reaching into uh rural the rural
24:40
parts of the country
24:42
uh ping on itself i i don't know what
24:45
the number is now but the last time
24:47
i heard the number ping on the insurance
24:50
company
24:50
had a sales force of more than a million
24:54
people and that is the kind of scale you
24:56
need to think about as you're trying
24:59
uh and so there are a lot of evangelists
25:01
for ping on health care
25:03
out there as well uh so we love that
25:06
we think uh china in all of our
25:08
platforms
25:09
is a great competitor so if you look at
25:12
dna
25:14
dna sequencing um
25:18
bgi uh is a great competitor
25:22
uh if you if you look at robotics it's
25:24
probably going to commoditize
25:26
in china so we don't have any uh plays
25:29
there uh if you look at energy storage
25:32
well of course
25:33
you've got tesla in uh in china so
25:36
that's
25:37
that's good you've got um you've got an
25:39
ecosystem uh
25:41
building around china we know that
25:44
neo we don't own it but we think that
25:48
government decree they want a local
25:50
champion we don't know if it's going to
25:52
be neo
25:52
or expong which is patterning itself
25:55
after
25:56
tesla or if it will be tesla itself i
25:58
doubt that
25:59
i doubt that because china wants a local
26:01
winner
26:02
uh but we think uh they're all over
26:05
uh that market artificial intelligence
26:08
if you look at the league tables
26:10
uh in artif chip technology
26:13
a surprising number of chinese companies
26:17
uh sensetime and others and i think the
26:20
reason for this
26:21
is china's um
26:24
need for surveillance the government
26:27
wants
26:28
uh surveillance over over its population
26:31
even more so so i think ai information
26:34
data is um you know they've been doing
26:38
this for a long time
26:39
and then finally uh blockchain uh
26:42
technology we know there go that china
26:44
is going to have its own
26:45
digital currency the the digital yuan
26:48
and it's interesting to see how they're
26:50
evolving that you know it's programmable
26:52
so if they want to prevent uh
26:55
transactions they'll be able to do that
26:58
uh
26:58
so it's it's really really interesting
27:01
how quickly
27:02
china is embracing these technologies
27:04
and running with them
27:05
i think uh on that score they want the
27:07
digital yuan
27:09
to become the reserve currency of asia
27:11
so
27:12
lots going on lots going on so so we
27:15
would be remiss so
27:16
turning to other asset class bitcoin
27:19
so bitcoin do you think or what's your
27:21
sort of vision for bitcoin
27:23
is it going to become a reserve currency
27:27
is it scarcity value like real estate um
27:30
it started the purview of every college
27:32
student including my own
27:33
um knew about bitcoin before their
27:35
parents did
27:36
so what's your kind of vision going on
27:38
five years and 10 years
27:40
for bitcoin as an asset class and a
27:43
value
27:44
we don't have to go out five or ten
27:45
years it's here um
27:47
we believe uh we we wrote a a white
27:50
paper in 2016
27:52
called bitcoin ringing the bell for a
27:54
new asset class
27:56
uh and so yes we believe it's here we
27:58
believe that bitcoin
28:00
is the reserve currency of the crypto
28:02
asset ecosystem
28:04
we also believe that uh there will be
28:06
very few
28:08
huge winners in the crypto space we
28:10
think the crypto
28:12
currencies are going to be the huge
28:14
winners so
28:15
this is really flipping the internet on
28:18
its head in terms of how it evolved and
28:20
the internet evolved without a payments
28:23
infrastructure
28:24
and the reason for that is nobody
28:26
thought commerce would
28:27
evolve on it this was for intelligence
28:31
and academia and consumers in the united
28:34
states weren't even allowed to use
28:36
the internet legally until 1991 a
28:39
telecommunications act
28:41
um so uh we believe
28:45
that uh the uh bitcoin is
28:48
and crypto world the value accrual
28:52
where we will see most of the value
28:54
accrue
28:55
is to the cryptocurrencies themselves
28:58
this is not what happened in the
28:59
internet in the internet
29:01
the protocols so bitcoin's blockchain is
29:05
one protocol
29:06
ethereum another the protocols
29:10
uh basically just became standards
29:13
right technology standards upon which
29:16
these very valuable applications were
29:19
built
29:19
facebook amazon and so forth the value
29:22
accrued to the applications
29:24
this time we think the value will accrue
29:26
to the protocols themselves
29:28
and the currencies as measured by their
29:31
currencies
29:33
we believe that bitcoin is already the
29:35
reserve currency of the crypto asset
29:37
ecosystem
29:38
uh and and we can see that uh in that
29:42
many crypto assets most i would say are
29:45
are priced in terms of bitcoin so that's
29:48
the unit of account
29:49
the currencies uh are very important we
29:51
think there will be
29:52
maybe four or five that are that are
29:55
going to accrue the most value
29:56
now d5 watching it evolve i mean we're
29:59
in the wild west decentralized finance
30:02
it's very exciting uh and uh so that's
30:05
probably why ether is going to be
30:08
another one
30:09
um we do have a a fund
30:12
right now only with two currencies in it
30:14
this is a private fund
30:16
uh and that's bitcoin and ether but
30:18
we're scouring the scene some
30:20
of the custody arrangements uh
30:23
associated with
30:24
others like decred um aren't quite there
30:27
yet
30:28
uh so you know again we're we're picking
30:30
our spots carefully
30:32
um and so yes we think it's an asset
30:35
class we think bitcoin itself
30:37
uh will i was quoted in some paper i
30:40
never
30:40
said this but uh someone did some
30:42
homework and
30:43
added uh what i was saying up and said
30:46
uh you know arc thinks this is a 10
30:50
trillion
30:51
opportunity when it came to bitcoin and
30:53
i said i never said that
30:54
but i i did actually say it with the
30:57
building blocks
30:59
we think institutional could be um
31:02
could institutional going to say
31:05
five or six percent of institutional
31:08
portfolios again very low correlation
31:10
um and that's sort of where real estate
31:13
and emerging markets went
31:15
uh that would add five hundred thousand
31:17
dollars uh to bitcoin's price
31:19
so right there uh that's a nearly a
31:22
ten-fold increase
31:23
if you look at uh playing the role of
31:26
cash
31:27
on the balance sheet which is we did not
31:29
incorporate this
31:30
into our institutional white paper
31:33
because
31:34
we didn't expect it to be honest but now
31:37
we see square and tesla and
31:38
microstrategy
31:40
they have diversified some in the case
31:43
of square
31:44
and tesla it's five and eight percent
31:46
respectively
31:48
uh microstrategy it's a hundred percent
31:50
of their cash
31:51
in bitcoin um so if you if you
31:55
if you were to expect uh uh one percent
31:58
uh if corporations did that i think this
32:01
is just a u.s
32:02
calculation too that would be a forty
32:04
thousand increase
32:05
uh in bitcoin uh if it's ten percent
32:08
closer to where tesla is
32:10
uh that would be a four hundred thousand
32:12
dollar increase
32:13
in the price so again another eight-fold
32:16
increase so
32:17
and those are just two use cases i mean
32:19
the biggest use case is an insurance
32:21
policy for anyone in the world
32:23
uh you know to protect against
32:26
confiscation of wealth and part of that
32:28
it could be inflation with unhinged
32:31
monetary policies
32:32
i think that's a much more of a risk in
32:34
emerging markets and so
32:36
i think we'll see a lot of insurance
32:38
policies being taken out in the form of
32:40
uh bitcoin i
32:42
i often reflect that uh the saudi
32:44
princes uh
32:45
probably wished that they had uh uh
32:48
allocated some of their wealth to
32:51
bitcoin because
32:52
they certainly didn't expect their own
32:54
cousin to confiscate it
32:56
but that happens all over the world in
32:58
ways that
32:59
we don't even understand we have we have
33:01
uh and so i think that insurance policy
33:03
could be the biggest use case
33:06
so it would be replacing gold plus
33:07
there's no carrying and holding costs
33:09
exactly which is a huge win
33:13
so so to pivoting north
33:16
fiery foreigner you've uh recently
33:18
launched a space etf
33:20
so i'm a star wars um fan from way way
33:24
back
33:24
tell us more about space and the
33:26
opportunity and
33:27
how are you going to invest in it right
33:31
and it's a very exciting opportunity
33:34
the reason again i'll go back to the
33:36
technologies are ready
33:38
and the costs have come down low enough
33:40
uh spacex
33:41
has been uh a game changer here
33:45
reusable rockets uh
33:48
you know i think elon was doing it so
33:51
that he could get to mars
33:53
but from our point of view as uh
33:56
innovation investors
33:57
the the declining cost by
34:01
reusing a rocket i think uh the falcon 9
34:04
is up to nine times if i'm not mistaken
34:07
think about the dropping costs that that
34:09
represents
34:10
the costs of satellite technology are
34:12
coming down dramatically
34:14
as well uh the cost to launch a rocket
34:17
coming down
34:18
antenna probably the biggest gaining
34:20
factor those costs haven't come down as
34:22
much as we like but they are coming down
34:24
and and and will come down faster uh the
34:27
more
34:28
these satellites are launched so uh
34:30
these are all
34:31
volume driven cost lines right and
34:34
and something i'd like to explain here
34:36
is wright's law rights law
34:38
is a relative of moore's law moore's law
34:40
is a function of time
34:41
rights law a function of units and
34:44
law says theodore wright from the early
34:47
days of airplane manufacturing
34:49
uh observed that for every cumulative
34:52
doubling in the number of airplanes
34:54
produced
34:55
costs declined at back then a 10 percent
34:58
rate
35:00
the technologies that we're seeing today
35:02
though that
35:03
that number that for every cumulative
35:06
doubling what's the cost decline
35:07
in dna sequencing it's 40 percent
35:10
right think about that uh and we can
35:13
even
35:14
decipher between short read sequencing
35:16
that's 40
35:17
long read sequencing is 25 uh
35:20
industrial robots collaborative robots
35:24
that's
35:24
28 artificial intelligence costs are
35:28
dropping
35:28
37 the cost to train uh
35:31
in using artificial intelligence those
35:34
costs are dropping
35:35
37 per year that's not even a cumulative
35:38
dis
35:39
uh doubling uh calculation so
35:43
it helps you understand why these
35:45
technologies are going to take off so
35:47
quickly they're going to unleash waves
35:49
of demand the more and more costs
35:50
decline
35:52
space is the convergence of many of the
35:55
14
35:56
technologies involved in our uh five
35:59
platforms
36:00
so certainly robots uh
36:03
energy storage 3d printing
36:06
huge huge use case aerospace is the
36:08
killer app for three
36:10
3d printing artificial intelligence
36:14
in order to get those two rockets to
36:18
be reusable and to land at the same time
36:22
without blowing up that was an
36:25
artificial
36:26
intelligence exercise and if you have
36:29
watched what happened uh fail fail fail
36:32
fail
36:32
fail failed every time and then there
36:35
was a success
36:36
the machine had trained itself success
36:39
success i think they've
36:40
had only one failure recently uh so all
36:43
of these technologies are coming
36:45
together now i think when people look at
36:46
our portfolios
36:47
they're kind of disappointed actually
36:49
because they're not seeing space
36:51
exploration or mars or what have you
36:55
uh they're seeing more mundane companies
36:58
to some extent some very exciting ones
37:00
in another
37:01
sense but we think the two biggest use
37:04
cases
37:05
uh near term and within the next five
37:07
years are going to be mobile
37:09
connectivity so the three billion people
37:12
who are effectively in the dark meaning
37:15
no broadband
37:17
they will get broadband and so that's
37:20
an important use case it's worth 40
37:23
billion dollars per year we believe in
37:25
revenues
37:26
uh and 10 billion of those uh are going
37:30
to be in the u.s believe it or not
37:31
because
37:32
40 million people in the united states
37:34
more than 10 of our population
37:37
have no broadband think about it that's
37:39
horrible
37:40
the bigger the bigger use case or the
37:43
bigger application we think within the
37:45
next five years is going to be
37:46
hypersonic flight
37:48
and um so that means we'll be able to
37:51
fly
37:51
from manhattan to japan
37:55
due to three hours not 12 to 14 hours
37:59
uh and we think that market is going to
38:02
scale
38:03
to 270 billion dollar revenue
38:06
opportunity
38:07
per year over the next five to 10 years
38:10
that's
38:10
a huge market and
38:14
and as these costs continue to go down
38:18
the odds of getting to mars go up
38:21
so yeah we're pretty excited you and i
38:24
both went to australia wouldn't it be
38:26
nice to get to australia in two hours
38:28
oh my gosh we could have lunch it would
38:30
be great it would be
38:32
great that would be great so so finally
38:34
you know this all sounds rosy and
38:36
fantastic but
38:37
what keeps you up at night like what do
38:39
you worry about what could derail the
38:42
market
38:42
innovation what what what what causes
38:46
you
38:47
concern or worry well i i will say
38:50
uh innovation is not the worry in fact
38:54
the coronavirus
38:55
unleashed waves of innovation because
38:58
again
38:59
uh innovation the cost declines are
39:02
dependent on
39:03
volume growth innovation solves problems
39:06
the coronavirus presented us with a lot
39:09
of problems
39:10
and so all of our platforms were
39:12
turbocharged uh
39:14
in terms of unit growth uh so we think
39:17
there's no going back sure you have your
39:20
stay-at-home stocks that were rewarded
39:22
but if you look at even them take soon
39:24
it's been cut in half
39:26
since last october i think uh so this uh
39:30
exodus from stay at home has already
39:32
happened for those of you who are
39:34
uh are playing it maybe there's a bit
39:36
more to go i have no idea
39:38
um what keeps me up is
39:43
our fiscal policies in the united states
39:46
uh remember what i mentioned before the
39:48
competition
39:50
in the innovation space china
39:54
is is uh basically
39:58
willing innovation into like they're
40:01
doing everything
40:02
yes they can policymakers to encourage
40:05
innovation there
40:07
and i fear that our policy makers are
40:10
going to discourage
40:11
innovation in the u.s so what this will
40:13
mean and i'm glad we're
40:15
re-run global portfolios that more
40:18
of the innovation sources of innovation
40:22
are going to come from the rest of the
40:24
world probably asia
40:25
we just hired an asian innovation
40:27
analyst uh
40:28
for this reason and we're going to hire
40:30
another one uh
40:31
because we think the u.s risks uh losing
40:34
the plot um and
40:38
personally i think the best way to grow
40:41
out to get out of our deficits is to
40:44
grow out of them
40:45
raising taxes is going to discourage
40:48
activity
40:49
and discourage growth so
40:52
i i would implore anthony i would imply
40:55
any anyone you have in washington
40:58
i would just implore them to think about
41:00
this
41:01
you we're going to hurt our competitive
41:03
positioning in the world
41:05
and innovation is going to accrue to the
41:08
countries that encourage it
41:11
uh raising taxes raising the capital
41:13
gains tax rate
41:14
raising the estate tax rate you know tax
41:17
rates of any kind
41:18
is going to discourage uh innovation so
41:21
that
41:21
that worries me it truly does i am not
41:24
worried about inflation
41:25
not in this country in fact i think the
41:28
opposite
41:29
is um is the risk uh
41:32
there are we think we're in a
41:34
deflationary
41:35
world for two reasons one's good one's
41:38
really bad
41:39
the good deflation is coming from
41:41
innovation remember i said cost coming
41:43
down
41:44
unit exploding that's very good
41:47
the bad deflation is uh
41:50
going to occur because companies
41:53
paid too much attention to short-term
41:57
oriented shareholders who after the tech
41:59
and telecom bust
42:01
809 wanted their profits and they wanted
42:04
them
42:04
now they wanted them you know on
42:08
on a regular schedule they wanted a
42:10
constant diet right
42:12
okay so what did companies do to satisfy
42:15
those
42:15
investors they leveraged up their
42:17
balance sheets
42:20
to buy back shares one way to get
42:22
earnings up
42:24
and pay dividends what they did not do
42:27
enough and ge and ibm are poster
42:30
children of this
42:31
they did not invest enough in innovation
42:35
that is going to disintermediate and
42:38
disrupt that
42:39
already is and so what will happen to
42:41
those companies
42:43
is that in order to service their debt
42:46
as they are going out of business anyway
42:49
uh
42:50
they will have to cut prices uh and
42:52
they'll probably
42:54
lose money bring cash in lose reported
42:58
earnings will go down
42:59
uh that's bad deflation so i'm really
43:02
not worried about
43:03
inflation and in fact in the world we
43:05
see
43:06
deflation has uh well it has the
43:10
opposite effect of inflation
43:12
in the 70s which is when i started in
43:14
the business so
43:15
i i remember these debates um what had
43:18
happened
43:19
that analysts didn't i mean economists
43:21
didn't expect
43:22
uh including milton friedman the
43:24
monetarist himself
43:26
was while money supply
43:29
seemed to be growing at a consistent the
43:31
velocity of money was picking up
43:34
and the velocity of money was picking up
43:36
which means the rate at which the money
43:38
turns over per year
43:39
it was picking up because uh people
43:42
investors
43:43
and individuals were buying
43:47
whether they were buying tangible assets
43:49
right
43:50
and they were trying to get out of their
43:52
fiat currency which was depreciating
43:56
as fast as possible so they'd buy now
43:58
before prices and interest rates go up
44:01
or buy tangible assets to uh protect
44:04
against
44:04
inflation the opposite will happen with
44:07
uh with deflationary forces the two
44:09
deflationary forces i
44:11
i mentioned um if you think prices are
44:13
going down
44:15
then at the margin you'll wait to buy
44:17
until they do
44:19
now interest rates are already down low
44:21
enough but pricing going down
44:23
is is going to stall
44:27
some purchases over time we think the
44:30
early adopters are going to be there and
44:32
that these
44:34
cost declines are going to happen
44:35
because of them uh
44:37
but not everyone's an early adopter so
44:40
uh it's going to be a really interesting
44:42
environment it's going to be
44:44
it's going to be the flip side i think
44:45
of the 70s
44:48
interesting so so when you look back
44:51
you know so we'll go five five years
44:53
ahead what will have been
44:55
the the underappreciated innovation
44:59
that you think um that's gonna surprise
45:01
on the upside not to you
45:03
but the general marketplace what is the
45:05
most
45:07
unappreciated of your of your innovation
45:09
themes
45:10
uh the cures for disease that we're
45:13
going to see
45:14
yes and the prevention of
45:18
deaths we by our calc
45:21
calculations research if you take the 35
45:25
most common cancers
45:28
in the world today and you create
45:32
uh tests that are like blood tests
45:36
liquid biopsies they're called uh you'll
45:39
be able to identify
45:41
cancer in stage one now we do
45:44
think that the convergence between and
45:46
among
45:47
dna sequencing artificial intelligence
45:51
and gene editing and other gene
45:55
therapies and technologies the the
45:58
combination of those
46:00
at the convergence uh we think is
46:04
is is going to save 66 000
46:08
uh patients who develop
46:11
cancer um
46:14
from death because they'll catch it in
46:17
stage one
46:18
we think artificial intelligence is
46:21
going to teach us that there's a
46:23
setup that the body goes through
46:26
before cancer triggers and
46:30
probably find out about that those
46:33
precursors ahead of time
46:34
and head them off at the pass so that's
46:37
one thing
46:37
i think and and that's for sort of the
46:40
general population you know
46:42
and as we've been growing up i think all
46:44
of us have
46:45
watched friends and family members die
46:47
of cancer
46:48
and it is the scourge of our age and so
46:51
i think we will find
46:53
uh a cure for cancer or at um at the
46:56
minimum
46:56
uh that will have the ability to
46:58
identify cancer in stage one
47:00
the other that for the investors
47:03
surprise and
47:03
i think investors will be surprised at
47:06
how provocative that's going to be in
47:08
terms of the values created out there
47:11
but in terms of the average investor out
47:13
there
47:14
i think that there are companies in the
47:16
biotech space especially pharma biotech
47:19
not all of them careful you know there's
47:22
a minefield out there
47:23
who are embracing these technologies and
47:26
because they are
47:27
we think that clinical trials the the
47:31
time to um the time
47:34
a clinical trial takes is going to drop
47:37
by at least
47:38
25 percent and the failure rates are
47:41
going to drop
47:42
by 25 percent and so we're going back
47:45
into the golden age of healthcare
47:48
uh in the 80s the 80s we saw
47:51
the the golden age monoclonal antibodies
47:54
genentech
47:55
a new and the new biotech companies
47:58
uh this this wave and and we got returns
48:02
on r d
48:02
investing up to 20 to 30 percent
48:06
in that golden age today those returns
48:08
on average are seven percent because of
48:10
generics
48:11
and a paucity of innovation
48:14
you know kind of buying back shares and
48:17
satisfying short-term mariana
48:18
shareholders
48:20
that has changed and it's changed in the
48:23
last four years
48:24
so that we think there are going to be
48:26
some big surprises coming out of the
48:28
companies
48:29
that have embraced these technologies
48:31
and we think the returns will go
48:33
even higher than they were in the 80s
48:37
you know it's to say clinical trials
48:40
will take
48:40
uh 25 um
48:45
less time and result in 25
48:50
fewer failures those are huge numbers in
48:53
that world
48:54
huge huge huge so it's going to be
48:56
pretty exciting
48:57
yeah i mean following up on china you
48:59
probably know these statistics but
49:01
in the u.s seventy percent of cancer
49:03
patients
49:04
have a five-year survival rate in china
49:07
it's
49:08
40 percent so so there's about a million
49:11
and a half people
49:12
who are dying every year who with
49:15
preventive medicine
49:17
more um being able to catch it early
49:20
would be able to survive and that's been
49:22
one of the focus of
49:23
the chinese as you you mentioned
49:25
centralized government
49:27
to improve health and wellness in china
49:29
and this ability to
49:31
diagnose cancer early is a game changer
49:34
because as you know if you you diagnose
49:37
cancer
49:37
at stage one versus stage four
49:40
i mean there's two dramatic impacts you
49:42
know the survival rate
49:44
goes off you know is exponentially
49:46
positive but also the cost
49:48
of treating the patient is much lower so
49:50
it's a virtuous cycle
49:52
yes so um on that note i think um our
49:56
friend anthony
49:57
wanted to uh add in some other questions
49:59
and you know
50:00
anthony always has to have their last
50:02
word right
50:04
well not in this case there's no
50:06
question about that it would be foolish
50:07
for me to have the last word
50:09
with the two of you but no i i i don't i
50:12
don't have many questions kathy i just
50:14
have one
50:14
one big question and i hear you loud and
50:18
clear on taxation by the way
50:20
uh but they're not going to listen to me
50:21
or you i mean they
50:23
they they've decided long ago that they
50:25
want to detach themselves from the
50:27
business community
50:28
and from reality and so whether it's
50:30
mitch mcconnell saying
50:32
stay out of politics if you're an
50:33
executive i mean who is he to say that
50:36
or you're the bide administration
50:38
wanting to make
50:40
the tax system less competitive with the
50:42
world
50:43
but yet continue to spend money that we
50:45
don't have i mean you know look that's
50:47
that's the world that we live in but i
50:49
guess i guess what i wanted to ask you
50:52
is about the future because i know that
50:55
you see from your writings a world of
50:56
abundance
50:58
you see technological innovation and
51:00
technological transformation and
51:02
one of the worries that i have is the
51:05
distribution of it
51:07
i i'm worried that it's leaning too
51:09
close to the
51:10
haves versus the have-nots in society
51:13
and one of the fears that i have is that
51:15
if we don't use free market forces to
51:18
make it fairer
51:19
uh then you'll have some type of
51:20
imposition by the government as you and
51:22
i both know that will make things way
51:24
worse
51:25
because it'll be disruptive to market
51:27
forces so
51:28
obviously we're both great advocates for
51:31
capitalism and for the free market
51:33
what could you say to people about the
51:35
abundance ahead and how we can spread it
51:37
out
51:38
to make it more fair but to make it
51:40
market-based
51:41
well i i innovation is about abundance
51:45
right
51:45
and and getting costs down so i just
51:49
i think we learned from the smartphone
51:52
right how we've we were able to change
51:56
uh the world bringing more access to
52:00
more people
52:01
access to innovation i mean information
52:03
alone
52:04
and financial services now so
52:07
i think innovation in terms of getting
52:09
costs down uh
52:11
is the solution to that problem it is
52:14
because the lower
52:15
the cost i'll give you an example uh we
52:18
believe
52:19
that uh autonomous taxi networks
52:22
uh are going to evolve uh much sooner
52:24
than most people think
52:25
and according to our analysis uh the
52:29
cost to to uh of transportation
52:32
per mile uh for a person
52:36
will drop all in this is all in so in
52:39
our personal car
52:40
it costs roughly 70 cents per mile
52:43
and by the way if you inflation adjust
52:45
that it has it has cost 70 cents
52:48
per mile since the first cars rolled off
52:50
the assembly line right so 70 cents
52:53
we are going to have have a
52:55
discontinuous
52:57
uh shift down in that cost to 25 cents
53:01
or less think about all the people who
53:03
are taking
53:04
uh buses and they're going to be able to
53:07
hop into a robo taxi
53:09
so i think that's a really good example
53:11
think about that the
53:12
increase in purchasing power that that
53:14
is going purchasing power
53:16
uh associated with transportation which
53:18
is a huge
53:19
problem a huge source of friction uh in
53:23
in the lower income world so
53:25
innovation's
53:26
always about cutting costs uh
53:30
and and and um and and enabling more
53:33
access
53:34
to to to uh better cheaper faster more
53:37
productive more creative
53:39
so i think that's a solution to the
53:41
problem not a part of the problem
53:44
now in terms of what you may be saying
53:46
uh
53:47
uh historically the the big innovations
53:51
that um uh have uh
53:54
have generated outsized returns
53:58
those have taken place in the private
54:00
market uh we
54:01
founded arc to democratize to
54:04
democratize
54:05
access to these ideas and i'm so
54:08
gratified many people
54:10
i i know think there are a lot of
54:11
problems with specs and there are some
54:13
problems of course
54:14
but specs are enabling us to do that
54:18
enabling us to be able to share these
54:21
opportunities
54:22
with individual investors and you know
54:25
the gratitude we get as i i mentioned
54:27
before
54:28
is mind blowing you know the gratitude
54:31
you've changed my life or
54:33
what have you or i've now changed my
54:36
career so it's either investing or
54:38
education so we're trying to become a
54:40
part of the movement
54:42
to to uh you know include uh
54:45
access to opportunities for everyone
54:49
so i understand what you're saying um
54:52
we're trying to be a solution to that
54:53
problem
54:54
uh and i think our technologies are as
54:57
well
54:58
well listen i think it's very well said
55:01
i don't have anything much more to add
55:04
i don't i don't know if lisa does but
55:06
kathy i really appreciate you joining us
55:09
on salt talks i hope we can get you to
55:11
our
55:11
live events someday when we're all
55:13
vaccinated we have an event planned in
55:15
new york city at the javits center
55:17
in september uh which i think will be uh
55:19
a fun well-attended event
55:21
uh you may know this i've recently
55:23
signed on as a contributor to cnbc
55:27
yes indeed yeah so i'm you're stuck with
55:30
me kathy you're not gonna be able to get
55:31
rid of me i'm sort of like
55:33
sort of like toe fungus once i'm in your
55:35
ass lisa diaz
55:37
once i'm in your life it's like
55:39
impossible for me to get out of it so
55:41
but in all serious i want to i want to
55:42
congratulate you on your success
55:45
and your uh spirit of enterprise your
55:48
innovation the entrepreneurship the
55:50
breakthroughs that you've made
55:52
um and uh frankly i'm proud to know you
55:55
so i just want to say thank you for
55:56
joining us
55:57
thank you so much it's been my great
55:58
pleasure thank you again
56:00
okay so this concludes our saw talks i
56:03
am not
56:04
john darcy so i'm not going to use the
56:07
usual
56:07
exiting uh verbiage that john darcy uses
56:11
but i want to thank lisa diaz as our
56:13
guest interviewer and kathy
56:15
wood for a sensational saw talk
56:17
presentation
56:19
please log on to salt.org backslash
56:22
talks to catch this and many of the
56:26
other
56:26
uh talks in our sawtalk series guys
56:29
thank you very
56:30
much again thanks again
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