>> from the heart of where innovation, money, and power collide, in silicon valley and beyond, this is "bloomberg technology" with emily chang. ♪ emily: we will break down the

results. plus, trading in your pandemic. a designer who ran the runway revealed subscribers are rebounding as the company looks to head to the public markets on a $1.3 billion evaluation. live from l.a., we bring you latest from the milken institute global conference. carol massar later this hour. we will get to all of that in a moment, but first a look at the markets with kriti gupta. a rally in stocks today. kriti: green on the screen. tech the key outperform or, but not tech -- outperformer, but not tech alone. today, they were up over 3% in the session. you are seeing bitcoin slipping away from its highs today. during the session, very strong reactions to bitcoin despite the news about bitcoin futures.

a big concern was with that attract from some of the populism around crypto assets in particular? that is not the case. looks like it is up about 4% in today's session. i want to bring you back to those big tech stocks. they left the index lower over the last months. they have been leading higher in the last session. i am using apple as a proxy for the big tech names. apple having a pretty good day. widen that out to alphabet or microsoft, it becomes five or six pretty good sessions of gains. facebook or amazon, still some good sessions. very reflective of the broader index. i want to end with netflix. shares were up as high as 3% after hours after they beat their subscriber growth. bloomberg was estimating 4.4 million total subscribers. they came out with 3.7. now projecting 8.5 million. on top of that, you did see they

say they will be cash flow positive next year. that did move shares after hours, up by 3%. disney ticking higher once again. emily: i want to bring in the senior vice president for entertainment and media at trans union. good to have you back on the show. strongest subscriber growth of the year, even as the world continues to reopen. we are getting off our couches and going to work. are you surprised by this? >> no, i'm not at all. contrary, i thought the projected number was quite low. probably their worst quarter ever in the last four or five years. typically when they had a really poor quarter in terms of subscriber acquisition, the following quarter is really

substantial. i think this was less of an increase -- [indiscernible] emily: is that because netflix is doing something wrong? andre: i think it is because netflix is not doing anything different. netflix has been right so many times when people have doubted their strategy. a lot of people thought they were investing too much in international content years ago. although that was not reflected in its numbers, that holds true with the success of "squid game" and other things. the challenge is they are still to diversify their revenue stream. the concern i would have is when you look three or four years out, i don't think anybody doubts disney plus will have a larger subscriber base that netflix. there are others challenging for that previous subscriber base as well. the transition into gaming has

been very slow. the diversification of revenue some merchandising, but that does not compared to what abc universal does. that is the biggest challenge, it is pretty much more of the same. emily: interesting take. "squid game" has been the talk of the last few weeks. netflix says it has been viewed in 142 million households. the devils advocate case is a company like disney cannot put "squid game" on disney plus. it was a risk for netflix and clearly it paid off. what makes you think they won't be able to keep bringing hits like this and beating disney or hbo or others going forward? andre: they say the past was prologue. if you look up about the dollars invested into content over the last six years, they spent more than just about anybody. we still get riled up in the

media world whenever there is a huge blockbuster success, and contrary to that, it is big news when disney flops. when i look at netflix, if netflix's battle is to just out- produce content that is better or more global or more valuable than disney or nbc universal or hbo, i don't think that is necessarily the game they want to play. all of those companies have much more ways to monetize their audience than netflix does. even to stand pat over the next few years, they actually do have to have better content and bigger hits, which is challenging. emily: netflix has been embroiled in a public controversy about its dave

chapelle special and comments he made about trans rights. the co-ceo defended the decision to put this on their platform. netflix employees, some of them really not happy about this. what is your take on how much this impacts the broader netflix story? andre: i have not thought much about what the impact will be to netflix. i think there is a challenge when you look at freedom of speech and artists, a producer's right to be creative or address issues. sometimes you have to be respectful of the different constituencies that consume your content. that is up for netflix to make their own decision. i think people need to be able to face the consequent is for any decision they make. -- the consequences for any

decision they make. whatever the repercussions, whether that impacts their subscriber base or other things, they need to be prepared for that. emily: thanks for raising some interesting points. the senior vice president at trans union, always good to have you on the show. taking a look at what else we are watching, instacart is acquiring a startup that makes self-check out shopping carts. they use image recognition cameras to automatically detect items placed inside. the $350 cash and stock deal is part of instacart's effort to tap more areas of growth ahead of its anticipated public offering. coming up, a company announces plans to raise over $300 million in an ipo and chip maker global foundries looking for as much as $2.6 billion. we get a roundup of what is ahead for the rest of the year. that is next.

this is bloomberg. ♪

[applause] [bell ringing] emily: 2021 has already been a banner year for public listings and there are still more to come. fashion rental company rent the runway is seeking to raise as much as $315 million in its upcoming ipo, which would rate the company at $1.3 billion. rent the runway obviously struggled in the pandemic. people were not leaving home or getting out of pajamas,

literally, so how have they recovered since the easing of lockdowns? how is that driving the decision to go public now? >> it looks like financially we have not seen as much recovery, but the number of subscribers has gone up. in the first half of the year, revenue was mostly flat. we have seen almost a double in active users compared to the beginning of their fiscal year in february of this year. it seems like even though people are not going back to the office just yet, some are coming back. that is giving them an excuse to dress up again. that could have driven their decision to go public now. the companies that warn that in their risk factor section, how long the pandemic would go on is a concern and what impact their business if it carries on for

longer. emily: they are cautioning in the filing that they may not be able to sustain profitability. how do you expect investors to respond to a deal like this? crystal: it is actually pretty simple language, like -- like most companies that have not achieved profitability tend to put that in. it seems like people online have their own thoughts, some saying the company has not really proven that they have any ability to be profitable and tha t the pandemic did not help. i am sure if they were given that chance, that would have gone public at a different time. it seems like they have showed some recovery, even though not in the financial terms just yet. emily: global foundries planning to raise $2.6 billion in their ipo. curious if they are taking advantage of the ongoing chip crunch and how that will play

into how investors look at this deal. crystal: i am sure the chip shortage is playing into their favor. the majority of this year, we have seen a bunch of consumer facing technology companies. at the tail end of this year, we are seeing global foundries, a lot of these tech hardware companies coming into the back end of the year. at the back end, investors tend to get more risk-on when you have a more substantial business that has risk proven revenue and proven profitability. that could do well at the end of the year. it is a good time for global foundries as well as their investors. they attract a lot of investors for a cornerstone that indicated upwards of $1 billion interest. the deal is $2.6 billion, but they have to sell a lot less than that. emily: we will be looking out

for the additional action later this year. our bloomberg news deals reporter, thanks for that update. thursday, catch a special edition of bloomberg markets focusing on supply chain pain. caroline hyde and romaine bostick will be live from the second busiest container port in the u.s. at long beach as supply chain issues across the globe persist. they will talk to some of the key voices impacted by the supply squeeze. the president and ceo of consumer brands association, and the exact of director of insight. to another story we are watching, the first u.s. bitcoin linked exchange traded fund debuted. a proshares global investment strategist shared his thoughts on brumberg -- on bloomberg. >> we think this will allow

those waiting for a robust way to do this to now have it in their portfolios. emily: weighing in on the new etf, the guggenheim global ceo says it is a very exciting development and a way for investors to bypass digital wallets. he spoke to bloomberg television at the milken conference earlier today. >> the coin in and of itself is difficult. we invested in bitcoin for our clients, but you have to be in a tradable vehicle like an etf, so i think that is an interesting development. emily: he does not recommend shorting bitcoin. he thinks the world's most popular cryptocurrency will rise in the coming months. >> you see bitcoin and what it has done over the last few weeks. i can't tell you it's a value, but i won't tell you that you should short it. it is likely to be higher in the coming months. emily: diplomatic as ever.

we will have more from the milken institute global conference. carol massar with speak with park invest. we bring that conversation to you live later this hour. coming up, the american dream, or almost. we talk about the challenges facing immigrants who want to start their own companies in the united states. after the break, we speak with partners of a vc fund aimed at leveling the playing field. this is bloomberg. ♪

emily: t u.s.he -- the u.s. prides itself on being a nation of immigrants, yet starting a company as an immigrant in this country is not easy, if not impossible for some. my next guests are determined to change that. they are with a fund dedicated to helping immigrant founded companies.

thank you so much for joining us. maria, i will start with you. what made a video you to start a fund -- what motivated you to start a fund focused on immigrant entrepreneurs? >> i myself am an immigrant. i am a refugee that came to the united states from colombia, ever since then have been trying to repay what this country has given me and looking up to the american dream, a high standard to beat for immigrant families like my own. it feels natural to me that the first check would be the first round into immigrant and family entrepreneurs. i want to help them succeed faster. emily: how do you plan to do things differently than traditional venture capital firms? like when it comes to decision time, where do you see yourself making a decision?

>> one of the things maria hinted on is we try to be the first check. with that means is -- what that means is 60% of our commitments happened before the company was incorporated. what that reflects is an idea of being a friends and family type of investor. for us, it comes down to challenging some of the pattern recognition behaviors of silicon valley vc, specifically basing an investment decision entirely on their linkedin profile. rather, we try to understand the distance they traveled and underwrite the people, fully recognizing their ideas might shift, but the people who solve the problem won't. emily: maria, you are a former refugee yourself. you worked for the immigration lobbying group founded by mark zuckerberg. i'm curious what insight that

gave you into others' experiences that might be similar but different than your own? maria: the numbers can speak from themselves. in the u.s., we know that 20% of the self-employed population have to -- happen to be foreign-born. when you look at just unicorn companies, those over $1 billion, that gets closer to 50% of them being founded by these. when you look at our economy, whether small businesses, the mom-and-pop shops or the most sophisticated technology companies, google, apple, tesla, all founded by immigrant entrepreneurs. there is a journey and muscle to innovate. when you think about who has a competitive advantage and a

global viewpoint to build global companies with massive market caps, it will be immigrant entrepreneurs. emily: we are nearing a deadline where the green cards of 80,000 people currently working in the u.s. might expire. what are your thoughts on this? what do you think needs to happen? >> we think about the reason for this happening. it is fundamentally because of something no one expected to happen globally. a lot of this backlog and expirations is because of the global pandemic. just like we have done for other categories around the country, specifically around policy, i think we need to take the same approach and give people whose deadlines are coming up or just passed, give them at least six to 12 more months to stay in status and go through the process and get through that backlog. it would be an absolute travesty

for this many people who are predominantly tech workers to not be able to know they can still work here when they already pay so much in taxes and giving back to the country. emily: is your fund going to be helping immigrant founders secure visas? will you help them navigate this process? maria: yeah. a unique part of how we structured from day one is we know it takes a lot of time. time is something entrepreneurs do not have in the early days with all sorts of things they are juggling. we have an in-house immigration counsel which helps each founder figure out the best pathway forward. how do we get you working at your company full-time as soon as possible? when this company is successful, you have figured out a way to stay in this country and make new american jobs. we are one of the few, if not the only fund that has an immigration teams solely focused

on providing this support to immigrants day one. emily: manan, you backed a startup which filed for bankruptcy last week. i know everyone will not be a winner, but what is your take on that, what the company could have done differently? manan: this is one of those situations where, as california passed a.b. 5, some contract worker status is affected that company. certainly the company intends to stay in business. the ceo announced he helped somebody negotiate a record improvement salary of $200,000. think about that. $200,000 higher salary. we think business should be around ceo's. his story is not done. this is the bigger narrative we believe in.

foreign born under for numerous will continue to go big so they don't have to go home. that is what embodies that american dream in the story so well. emily: go big so you don't have to go home. that is something i can get behind. unshackled ventures, thank you both. we will keep following your story. coming up, we bring you live to the milken institute global conference in l.a. carol massar will be sitting down with cathie wood of arc invest -- ark invest. you don't want to miss it. this is bloomberg. ♪

this halloween,

xfinity rewards is offering up some spooky-good perks. like the chance to win a universal parks & resorts trip to hollywood or orlando to attend halloween horror nights. or xfinity rewards members, get the inside scoop on halloween kills. just say "watch with" into your voice remote for an exclusive live stream with jamie lee curtis. a q&a with me! join for free on the xfinity app. our thanks your rewards. it's moving day. and while her friends are doing the heavy lifting, jess is busy moving her xfinity internet and tv services. it only takes about a minute. wait, a minute? but what have you been doing for the last two hours? ...delegating? oh, good one. move your xfinity services without breaking a sweat. xfinity makes moving easy. go online to transfer your services in about a minute. get started today.

emily: welcome back to "bloomberg technology." i want to get back to the markets with our own kriti gupta. tech has outperformed the last couple sesssions, but is -- sessions, but is this still the go to haven trade? kriti: we did have this massive decades long expansion before the pandemic hit, but even since the massive crash in 2020, all that is that haven trade.

the top is kind of plateauing a little bit. while we have these inflations concerns, is that risk off trade rooted in this idea of the cash heavy balance sheet that a lot of apples and amazons have, or is this being more prepared to absorb the costs that come with those rising chip prices and commodity prices and potentially becoming an inflation head, something a lot of people don't price into the market, these are companies that are more equipped to pass on those costs to consumers. you can't say that about every sector in the s&p 500. that is something we want to watch when we talk about whether or not it is that haven trade we were so confident it was in 2020. emily: a lot could change over the next couple weeks. big tech earnings coming up. what are investors watching? kriti: it has everything to do with the supply current. talking about consumer companies, a lot of the concerns, a lot of the risks are

this idea that commodity prices are surging. but for tech in particular, it is all about those chips. this chart shows you the waiting time it is starting to take between creating the chip and the delivery. free the use of things like iphones -- for the use of things like iphones, cars, planes, and addition to freight costs. at what point does that start to hinder tech capacity? that is what we are watching to come. emily: going to be a lot of action on the show over the next couple weeks. meantime, facebook will pay more than $14 million to the u.s. government over claims it disconnected against domestic workers by reserving -- it discriminated against domestic workers by reserving jobs for foreigners. what happened? why would facebook want to reserve these jobs for foreign workers over domestic ones? >> the hits keep on coming

against facebook. they have been having a bad couple months. what the justice department alleged is that facebook was intentionally hiring foreigners to take positions that americans could have taken. they were denying the ability of u.s. workers to even apply for these positions. they were hiding the applications. they were making it more difficult for u.s. workers to find them. facebook admitted that they have some liability here and agree to a settlement. they will make payments to victims. this does not look good for facebook right now, especially as american workers are coming out of coronavirus and looking for jobs. these jobs pay an average of $160,00 a year. -- $160,000 a year. emily: $14 million is less than pennies for facebook in terms of a penalty. why would facebook do this? what is their defense or

explanation? chris: facebook is saying they followed legitimate practices. they don't admit that they were completely culpable here, but they say they need to go around the world to find the most qualified workers and that is why they did that. emily: our bloomberg news reporter. we will keep following that story. facebook fined $14 million in that particular case. the hits keep coming. now i want to take you to the milken institute global conference in l.a. carol massar is on stage with ark investment ceo cathie wood. carol: when you did come on, i don't think you had your funds launched yet. let's go back. how did you get here? my gut from just talking to you was there was no plan to be a celebrity fund manager, someone

that we print out a story every day about your comings and goings. what was your plan? cathie: well, my plan was -- yes, i have been in the financial industry. after the tech and telecom bust and even more so after 2008, 2009, i began to see just incredible risk aversion. career risk, business risk. everyone was worshiping the almighty index benchmarks. that was not consistent with what we were doing, so we were becoming -- i described it as an odder and odder duck. i felt this was very bad behavior. i felt like investing in tried and true is not wrong, but investing only in the past i do believe is wrong. there is so much in the way of

innovation evolving, and i did not feel like it could be funded appropriately in the public markets. the private markets were screaming, so valuations were crazy there. the same kind of stock was selling for a fraction of the valuation in the public market. i felt there was an arbitrage opportunity. many people in the public world said those public -- those private evaluations will crash. we did not think that was true. we thought the public market valuations would move up. i thought this focus on innovation had been lost, research lost, investing lost in the public markets. i said we could fulfill a huge unmet need and change this mis-allocation of capital, which is all about the past, especially because of the explosive growth opportunities there are in the future. carol: i know there has been a

podcast you have done. what was the "aha" moment where you said i will do this differently? cathie: -- cathie: carol: carol: i know your faith is important to you. the name of your company is ark. how did that play into it? cathie: i get these epiphanies on beautiful days when i am not thinking about anything. i walked into my home, a beautiful sunny day, silent. i have three children, two dogs and a nanny and it was complete silence because they would all be away for two weeks, first time ever in this house. i walked into the kitchen. i was not happy, but i was not sad. it was just like, whoa, this has not happened to me before. i was not even thinking about work. i got the message loud and clear, you have to take all of the technologies that have

disrupted other industries and start to disrupt your own and focus on the new creation. carol: i want to stay here for a moment. i have beliefs that are important to me. it seems like your faith guides you in a lot of ways. how does it, as you look at these companies, play into it? cathie: in terms of that "aha" moment, many would describe that as the force or the universe. i would describe it as the holy spirit. the holy spirit as a guide. as much as we in the financial world would like to think we are in control, we are not. there are much bigger forces in control. some would say the fed is in control right now. [laughter] no, not even the fed is in control. this idea of the new creation. it was after i described the

ecosystem i wanted to put in place involving social media and giving our research away. i wasn't even thinking about going viral in the way we have gone viral. i was just thinking, how can we get our message out? nobody believes in us. what are you going to do differently? all the way. i forgot your question. what was the last bit? carol: i forgot too. i was caught up with you. you are talking about how your faith guided you in terms of the specific investments you make, whether it is tesla, bitcoin, a biofarma company. cathie: we are seeking the truth as these new technologies evolve, all of them at the same time, and cause a lot of chaos,

a lot of confusion, a lot of fear, uncertainty and doubt in our market. we are trying to allocate capital to its highest and best use. carol: how hard was it in the early days? you had to bootstrap for three years. you had people working at home. cathie: no, we all worked in an office. actually, that was a very important part of coming together. the bonds we created during that time will never leave us. how was it in the early days? we were on a mission. i never thought we were going to fail. many other people thought we were going to fail. one person was very kind in the beginning. at bloomberg, he had us as your top etf list.

he thought we were destined for failure, told us so in a nice way, but i did not believe that. one of the reasons people thought we were going to fail is we chose a rapper that was dominated by passive portfolios -- wrapper that was dominated by passive portfolios. people thought that was crazy. after 2.5 years of no traction effectively, i began to say, wow, was that a bad move? we started doing separately managed accounts. it turns out that that was a great decision. so many people thought it was such an awful decision. we had so much visibility that when we started to gain traction, when the inflows started, it was like a head fake. it got us so much more attention than we would have gotten otherwise. carol: what were institutional

investors saying to you in the early days? cathie: too volatile. that was the response. we could not possibly do that. here we are. we are a volatile strategy. our response was, well, volatility on the upside is not a bad thing. last year was a good example of that. but the other thing we said at the time, and we took our cues from a value investor who said to us "i would never buy one stock in your portfolio, but i like your research and you might be right, so i will just put 5% as a hedge." as did our first institutional investor, which is value-oriented, and kind of thought we were behaving like a value manager. long-term time horizon and

looking for extreme values. well, value investors are using price-to-book and dividend yield and that sort of thing. we are using growth. we are using spectacular growth rates that no one is expecting. tesla was our first proof of concept, a very visible one, where people are saying, what are they talking about? all we had done was use the centerpiece of our research, to try and figure out how quickly costs would decline in battery pack systems. therefore, ho wmuch -- how much prices would fall for electric vehicles and how quick the uptake would be. we saw magnificent things happening. carol: it was not so easy to be invested in tesla early on. cathie: for us, it was easy. carol: because you believed the story? cathie: the most important call that we made initially was tesla

-- with tesla was tesla's battery technology is unlike any other auto manufacturer battery technology. tesla was riding down the cost curve of the consumer electronics industry. so, laptops, cell phones, huge volumes. when you get a scaling like that , costs come down, it is called a learning curve in the tech industry. elon, you had auto manufacturers and auto analysts laughing at him. elon is building his car on top of cell phone battery's, isn't -- batteries, isn't that funny? they did not believe the engineering was possible. they just did not think it was possible, and he did. even today, these cylindrical batteries he has been using

lower cost and will remain lower cost for at least three years we think, which means any other auto manufacturer which wants the same performance in the same range at the same price will have to lose money on every car sold. carol: so it keeps him in a really great position. cathie: that is one of only four barriers. that was the first call we had to make. carol: elon musk and tesla. there is a point you would get at. you put a mark on the stock price. cathie: 3000 at our base case. carol: there is a point where you could say i am moving on. you have gotten out of apple. these are technologies you don't think -- not necessarily? cathie: they are very well understood. their dynamics are well understood. they are well owned.

we just want our clients to be exposed to the next faang. tesla will end up in that grouping at some point. we would sell. our minimal rate of return for a stock is 15% at an annualized rate over five years, so a doubling over five years. tesla is about nearly a quadrupling about five years, so well within our range.. -- so well within our range. we have been taking profits. it has become obvious that electric vehicles are taking massive share from traditional gas powered vehicles. the stock finally is responding to that reality. whereas much of our portfolio

has still been in a bit of a weak spot. this is called portfolio management. that is all this is. carol: let's talk performance. it has been off the charts. this year has been a bit tight for -- bit tougher. five of seven ark's returned an average of 47%. you were the top stock picker in 2020. this year, if we look at ark innovation, down from its peak in february. it is up 7% for the year. what is tougher about this year for you guys? cathie: it's not tougher. we expected it and wanted it, not that we want our stocks to go down, but what we did not want was another bubble, which is when the market became more narrowly focused on just one group. instead, energy is up 50% this year, financials are up 30%.

we think those sectors will be the most disruptive of any. what has happened is there has been a rotation into value as fears of inflation and interest rates increasing picked up. therefore, there has been a broadening out of this bull market. we are in a very strong but it -- bull market. all of this tax talk, all of this strife. carol: no worries chasing too many options? cathie: am i worried about inflation? carol: and bubbles in the market . cathie: not bubbles. the way i know that is from the nature of the questioning we get when we go into any meeting, retail or institutional. it is much more about risk, very little about opportunity. that is not what happens during a bubble.

inflation, we have a differentiated point of view there. i have always had to, as part of my portfolio management perspective, have an understanding of the economic backdrop. carol: you debated henry coffin way back when. the original dr. doom. cathie: doctors doom and gloom. no, doctors doom and death. [laughter] that is when i learned about, wow, if everyone is going in that direction -- and back then it was inflation and interest rates are embedded in the system at a double-digit rate. and someone dares to go the opposite way after those who had gone the opposite way had been bludgeoned with higher interest

rates and higher inflation, this was timing. there is a lot of money to be made. that is how i still feel about innovation. so, inflation. we expected inflation. i do these youtube videos. we start talking about the base effect on supply chain issues last year. i did not expect a second round of supply chain issues where now we have people hoarding because of christmas. that i did not expect. we are getting another round of inventory building, but not in businesses, in homes. that car they bought last year is in their driveway or garage. auto sales -- many people don't realize this -- in the u.s., peaked in april at 18.5 million units and are now at 12. that is not just chip shortages. that is, i just bought my car last year, i am probably not

buying another gas cardigan, i will wait -- gas car again, i will wait for an electric vehicle. that is some of what is going on. there is a lot of double and triple ordering in the system right now. it happens in every cycle. especially when you run out of inventory, toilet paper, clorox. i do believe that after christmas we will see the other side of this. we have already seen it with lumber. carol: is there an easing? cathie: yes. carol: so inflation is transitory? cathie: i know that is a dirty word, but i think it is. there are two very powerful secular forces. what we discussed with cyclical. -- was cyclical. the good one is innovation. innovation is inherently deflationary. because we do the analysis, we

can tell you how deflationary. artificial intelligence training costs are dropping 60% per -- 68 % per year. we have never seen anything like that. and artificial intelligence is starting really a technology war. the companies with the biggest pools of data, the highest quality data, the best a.i. expertise with the best domain expertise, in the genomic space, curing disease, so the human being has to set the goal and reward system, but the machiens now -- the machine is now training itself. those costs are dropping 68% per year.

a.i. will be part of every industry. dna sequencing is deflationary, robotics, blockchain is deflationary. it is taking the middlemen out of the equation, which will hurt companies who have not spent enough on innovation, but have leveraged up to satisfy short-term oriented shareholders who want their profits and dividends now. carol: this is what i remember from the first day in talking to you. you have become a celebrity fund manager. maybe an unlikely celebrity. how do you feel when someone says you are an unlikely celebrity? and they are tough on you, especially when the performance is not where it has been? cathie: i've dealt with this all my career, though it has usually been insight the firms. i mentioned odd duck. how does it feel when your own colleagues are looking at you like, what the heck are you

doing? i am used to it. i enjoy pushback. it tells me we are not in a bubble. as a portfolio manager, i much prefer to be climbing a wall of worry. those are the strongest markets. i believe that when we rotate out of value, we will come back into innovation. carol: what do you say when people say you are chasing a bubble? cathie: if you look at our trading, we are a liquidity provider. we don't chase anything. we are not a momentum player. i was just talking about a company that is public. it got slammed two weeks ago by scorpion, just investigating the background of this person. it's not the background that our

three genomic analysts have. the company was down over the short report. we were buying the heck out of it. i don't know if it ended up 15% or 20%. we are not a momentum chaser, we are a liquidity provider. carol: do you have investment hindsight? cathie: we always look at our mistakes. carol: is there something where you said you missed the cycle on that one? cathie: this is why i am paying attention to oil prices. in 2006, after the five financial regulators wrote a paper together. that was historic. they were usually fighting for power -- about these exotic home equity lines, we pulled all the risk out of our portfolios. commodity prices took off. it was extremely painful.

part of it was oil prices kept going up. between opec and our banks, wh ich fund fracking, there were a lot of dislocations and talk about jason on that. -- chasing on that. here we have oil doing the same thing. how long do we have to wait for the rotation back into our style? we had to wait a good six to nine months. as the price went crazy. carol: painful every day. cathie: not for us anymore. the beauty of what we are doing now, at a firm that looked at our performance every day and found when it was below the benchmark -- not just found, asked if we were out of our minds when it was 1000 basis points below the benchmark. that, psychologically, when you

have to walk into that kind of philosophy, you have to fight it. we have our own philosophy. five year investment time horizon. truth will win out. this is a bargain. i believe -- our compliance department will say i believe innovation stocks are on sale. the only thing that happened in the last few months is the price has come down. that means our rates have -- our rates of return have gone up. carol: tell me more about bitcoin. i have never seen something so debated. we are seeing more legitimization as we see regulators moving forward. today was a big day. what is the long-term play when it comes to cryptocurrency and bitcoin? cathie: bitcoin specifically -- we got involved when it was a $6 billion market cap.

it was a $6 billion cap then, now it is over $1 trillion. this was 2015. we were asking the question, could bitcoin serve the three roles of money? we came to the conclusion it was possible. art laffer tore our original paper up. as we were going through it, he said this is the first, the rules-based monetary system i have been waiting for since we left the gold exchange standards in 1971. i said to him, oh, how big could this be? he said, well, how big is the u.s. monetary base? this is a $6 billion cap. back then it was a $4.5 trillion monetary base. today we are at $8 trillion. that is just one of its roles.

the most fascinating thing is happening in el salvador. have you heard? the president, who tweets every day, deemed bitcoin legal tender. carol: a bloomberg quiz question. [laughter] cathie: and sent a wallet to everyone in the population eligible, so 4 million. 3 million have downloaded it. only 1.2 million in that country have a banking relationship. so this is the new bank, digital wallets. it will be true in this country and around the world. all-in. carol: china, you have been in and out. so how are we supposed to look at china right now? the clamp downs we have seen on certain sectors that have decimated them in terms of the value of them?

what do you expect to be your involvement? cathie: cathie: our first move away from china was when china had a very strong move. that was that kind of move. the second time we moved -- then we moved in, why? we saw the reaction to covid, and we got more interested. it was the most disciplined country in terms of monetary and fiscal policy during the crisis, and i thought, china has the possibility of becoming the germany and switzerland of the world in terms of discipline monetary systems. as soon jack ma was banished last november, we started pulling back, and especially during february through may, our