Affordability In Focus Ahead of Midterms; US National Wealth Tax Debate

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0:12 This is the Bloomberg Money Podcast. I'm Tom Keen with Scarlett Fu. Join us each week for a smart look at the forces shaping your financial life on personal finance, on retirement, and wealth management. We will explore how people are earning, investing, and building wealth. We are live Fridays at noon Eastern on Bloomberg Television. Subscribe to the podcast wherever you listen, and as always on the Bloomberg Terminal and the Bloomberg Business app.

0:55 Good afternoon, everyone.

0:55 Bloomberg Money on personal finance, retirement, and wealth management. I'm somehow getting through the week. Scarlett Fu and Tom Kane. I aged yesterday.

1:04 Yeah. What we saw in the market.

1:06 And once again, today, it seems like we're healing a little bit as we have for the last five years.

1:11 But it feels like we're in a new phase now where things are getting really messy, really volatile. We don't know if there's a bubble, if it's peaked already. It's all very unclear.

1:19 It's very, that's where I want to go. We're going to go there with Joe Weisenthal in a moment. Coming up today, well, what do we have? We have Whitney Tilson, editor of the Stansbury Research. Yes, we'll talk hedge fund talk, MAG7 talk, but also Scarlett, since we've talked to him about his public service, a mayoral candidate ago at the New York.

1:36 He also helped found Teach for America as well. So we'll get into that. Plus, we've got Stephanie Gill, the chief investment officer at Robin Hood on how the digital natives, that is Gen Z, are using AI to help manage their investments. Yes, the young people.

1:49 We'll have to see on that as well.

1:51 Stocks, it's been all over the place with a nice recovery this morning. At one point, I actually saw the Nasdaq with green on the screen. You still have that right now up a nice six-tenths of a percent. The VIX out over 20 earlier. 20 is like.

2:03 The new 30. It used to be nobody got rattled until 30.

2:07 We're not yet at 20. We're below 20 right now. All right, let's talk about what's going on in the other asset classes, because as stocks look to fall for the week, the 10-year yield is moving higher. But look at that. It is below 5%. And of course, we're days away from the next Fed decision. Yeah, the dollar moving up marginally. It peaked in early October, has kind of stalled in the last two weeks. And WTI, crude oil, now at 103 a barrel or just about We're looking at four straight weeks.

2:35 And Brent Cruder, that 116 print into the weekend. You know, from Istanbul down to Dubai, what our team is doing on Iran and the Persian Gulf will be critical this weekend as well. We need to drive a conversation for you on this Friday. We do that with Joe Weisenthal. He's co-host of Odd Lots Podcast with Tracy Alloway. Nikki Waller here, always driving forward our money coverage.

2:57 Worldwide.

2:58 And David Midterm-Gura is here. Blum, are you going to Kansas? Are you going to Minnesota?

3:04 I will be right here, anchoring late in the evening and providing updates on the house races.

3:09 And I've been advised, seriously, not a joke, late into the evening is really going to matter.

3:13 Yeah, midnight to two. Stay up late, Tom.

3:15 We'll have to see that. Joe Weisenthal is with us. This is his first time with us. We talked to his people, and they said, yeah, okay, we'll try it. Why is Joe Weisenthal here? Headlines used to be, stocks are up today. And then a kid down in Texas, a couple years out of Texas, said, stocks go green.

3:33 That's what Joe Weisenthal changed in business journalism. Tanking markets was an original Joe Weisenthal headline. My first question to you, I've never seen a fire hose. of distraction and news and emotion as we have right now, hour to hour, day to day. How do you adapt to the firehose of news that we didn't know when we were younger?

3:55 I built a AI bot that scans it all for me and tells me what actually matters. This is, can we talk about the phenomenon of the firehose for a section? Then maybe we can actually get into some of these headlines and what actually matters. The AI philosophers who have been talking for like, you know, they talk about this idea of the singularity. And what they mean by that is that time is speeding up.

4:18 Right.

4:19 And so millions of years ago, you know, humans like went for a million years.

4:24 They only came up with.

4:25 Oh, I thought you were going to say clean shaven in Texas. A million years.

4:29 There was a period of time in history on Earth where there was only one invention, and that was the hand axe.

4:35 It went through like a million years.

4:36 And then it's like, oh, maybe then a million years later they found a second invention, right? The space between novel developments keeps getting shorter and shorter. This even pre-AI, the space between important things.

4:51 That happened here on Earth keeps getting shorter.

4:54 And what we're seeing, again, AI aside, is that if you just count the number of things that maybe we would call red headlines here at Bloomberg, the things that catch your attention, that say we should talk about this, are happening so fast now that in a given day, Again, we went.

5:11 A million years. Absolutely overwhelming.

5:13 And now on a given day, we might get 100 headlines that if we had the mental capacity, we might like to.

5:20 Think about it.

5:20 I envy Nikki Waller, who gets to do a story and plan it for three weeks.

5:25 Going to Eddie's. Got to pick it up here on the news flow of the moment.

5:28 With all these developments that you're referring to, they all come back to a handful of companies. And they're the big tech companies that we're all, at this point, overexposed to. Nikki, I know you're thinking a lot and writing a lot about the concentration. or the overconcentration to tech that we all have.

5:42 Yeah, this is something that institutional investors are looking at, but it's also something that individuals should be thinking about as well. We all think that we are in index funds, we're doing the right thing, we're diversified, but actually those index funds are really making a big bet on a small number of U.S.

6:00 Tech companies.

6:01 And We are putting out a.

6:03 Podcast called The Portfolio Reset that has been looking at this. It's a little bit of a how-to with Maren Webb and is kind of diving in using the SpaceX moment and other things.

6:13 What do you reset to?

6:15 What does Maren suggest that we reset to from a given 54% of a portfolio?

6:21 In SpaceX.

6:22 Well, we absolutely do not give investment advice here at Bloomberg, but we are telling people to understand what they're holding and get under the hood. And what you think might be really diversified is less than you imagine.

6:34 So you know that I've been recommending the triple levers on cash fund.

6:38 I'm in.

6:38 I've been in from day one.

6:40 I'll see you by the bike racks after work, Tom.

6:43 So, Joe, I look at what's happening in the markets and the AI trade is kind of wobbly, certainly. And bonds kind of seem to be working again as a hedge for now.

6:52 Right.

6:52 The flight to safety is overwhelming the U.S. fiscal concerns. Feels like treasuries could be kind of be an anti-AI trade.

7:00 This is so important.

7:01 Think about like two months ago or a month ago when like rates were shooting up.

7:06 And what were people saying?

7:08 Oh, we're really worried about like fiscal dominance. We're really worried about the size of the national debt, etc. Did something change in the last two weeks that suddenly the national debt went down?

7:19 No, clearly not.

7:21 What does that tell us?

7:22 Therefore, in retrospect, that all those stories about how it had to do with the national debt or whatever were wrong.

7:27 What was correct, what.

7:29 I believe is obviously correct, is that we have this extremely intense investment intent cycle. There's a lot of money being spent. That creates an inflationary impulse. When you have an inflationary impulse, that all things equal means the Fed has to raise rates. When these structural drivers of spending and AI is just one of them, are expected to.

7:51 Go on for a long time. Rates are going to be high for a long time.

7:54 He thinks it's a 52-minute odd lot podcast, doesn't he?

7:57 Let me jump in. You mentioned flight to safety.

8:00 What's the GOP flight to safety given 11 days to the election?

8:04 I think things are looking pretty bleak. You had the president in Iowa last night. He won that state in 2016, 2020, and 2024. So wild to see him there delivering a stump speech for the Republican Senate candidate. Look, there's very little that he can do to change the narrative here 11 days out from the midterm elections. And I think a lot of Republicans are trying to plot a path forward here. But you look at the Cook political report, moving more Democrats into the likely category in the House.

8:27 We have seen the frustrations of this House speaker dealing with a very slim majority.

8:30 Where is the House speaker? Where is the House speaker?

8:33 He is meeting with his caucus, trying to plot a path for you. Again, Tom, it's not looking like there's much that they can do here less than two weeks out.

8:41 And, of course, some states are also going to be voting on one-time billionaire's taxes, like in California. The idea of a national wealth tax is kind of picking up steam, isn't it? Our Lisa Bromwitz talked with the CEO of United Airlines, who kind of gave his endorsement to the idea that maybe a national wealth tax wouldn't be a terrible idea. Fascinating.

8:58 Building on the work of our former colleague, Jordan Holman, who sat down with Scott Kirby, Lisa, asking about this, and he's floated the idea that he'd be fine with it.

9:05 He would be OK for him to have it.

9:06 And he suggested it be done at a national level. And I think that's the most fascinating facet of what he said. If you do it on a state by state basis, people are going to move. You're going to get the kind of threats that you saw from Mark Zuckerberg that maybe Kauai is more attractive than Palo Alto.

9:19 Maybe indeed he would move. That wouldn't happen if we were national. You read my script.

9:22 Joe Weisenthal, Mark Zuckerberg, I'm having a tantrum, I'm leaving California. What did we learn from this recapitalization of Facebook?

9:31 Well, yeah.

9:32 So the key thing here is that, well, two things.

9:35 They need more cash. Everyone needs more cash. We all knew that. And he doesn't want to dilute his voting power. That's really important for him. So those are the two things we learned. But on the subject of the wealth tax, I would say two things. There is no doubt in my mind that across the, quote, Western world, et cetera, that we're going to need to find some way to tax wealth.

9:58 Otherwise, the only.

9:59 People were trying to build an entire tax base on W-2 workers.

10:03 That's not working. That's not sustainable, obviously, because wealth.

10:07 Is such a driver of people's ability to consume and so forth.

10:11 We're going to do it.

10:12 We're going to have to find a way to do it. But capital, capital mobility is a real thing. We might complain and say, Mark, you're greedy. Why you would leave Florida or leave California, et cetera. Call him all you want. Doesn't change the reality.

10:24 Nobody cares.

10:25 What we care about is this. Your family's heritage at the University of Texas. Can you see Mark Zuckerberg in Texas?

10:32 Really hot. This is what people don't get about Texas. I love Texas.

10:36 But I think people moved there from California and they thought, oh, it really is hot here.

10:42 In October.

10:42 I will say, too, I think these are boom times for state investigators who are trying to figure out residency for everybody.

10:49 The teddy bear test.

10:50 Exactly. The what?

10:51 The teddy bear tax. Where is your teddy bear? And that determines what state you actually live in.

10:55 How did you know I had a teddy bear?

10:57 This assumes that there are laws. We were in Chicago last week. And the first question, we interviewed CME chief Terry Duffy.

11:04 The first question I asked him was like.

11:06 Are there laws anymore?

11:08 Do we live in a world.

11:09 That actually has financial regulation? Because it doesn't look like to me.

11:13 He sounds like it's a philosophy class.

11:15 Yeah.

11:17 And he was like, well, look, there's still laws, but the state of like any sort of enforcement or regulation, it's seen better.

11:24 Times for sure.

11:25 So, yeah, you can like what state do you really rely on? Maybe there's a law, but someone actually has to have the impulse to enforce it.

11:32 Thank you for wearing a green collar matching with the set.

11:35 Great style.

11:36 Joe Weisenthal going existential.

11:38 He's the host of the.

11:39 Odd Lots podcast. And of course, Nicky Waller, managing editor for Money Coverage at Bloomberg News. And David Gurra, co-host of Bloomberg This Weekend. Coming up, Whitney Tilson, editor at Stansbury Research. Who joins us next? Texas.

11:53 It's like a seminar.

11:54 Texas.

11:55 Who's going to win, Joe? Joe, please. Seminars.

12:00 You're listening to Bloomberg Money. Stay with us with more to come after this. Bloomberg Money, welcome to all of you on personal finance, on wealth management, on retirement as well. It is good to speak to someone, particularly as we come up close to these elections.

12:21 Who has chosen to run for office and all.

12:23 We'll talk to Whitney Tilson about that with his latest run for mayor here in New York City, but far more his work across investment.

12:31 And in hedge funds where he's editor of Stansberry Research.

12:34 Whitney, I want to really get to this with the regret and the emotion that's out there at this time on the 12 stocks that everybody either owns or doesn't own. Here is a statement from Whitney Tilson buried in a research note. Amazon, Alphabet, and Meta, three stocks as core holdings April 17th of 2019.

12:54 Since then, with Whitney Tilson, they're up 168, 449, and 297%.

13:00 An average of 305% on an arc of six years, call it. Double the 164 of the S & P 500.

13:07 That's not bad.

13:08 We've got three groups, Whitney, in the game right now. They owned them and they kept them like you. They never owned them. But I want you to talk about the regret that's out there in the industry of people that own those stocks. And then they got smart and they got rid of them.

13:23 Yeah, well, those have been fabulously performing stocks, as you note. And I think the key to successful long-term investing is find a handful of great companies and then own them for a long period of time. The market is so short-term oriented, I think the only way you can beat it as an active investor is to play an opposite game, long-term buy and hold of quality companies, like what Warren Buffett's been preaching.

13:48 Like Warren Buffett, I know that was really important to you within your value investing. Except now, as we talk to Joe Weisenthal, there's a fire hose of noise, distraction.

13:58 Yes.

13:58 My morning program, Scarlett's morning program. There's too much information. How do you process it and yet hold on to a given Amazon?

14:06 Yeah, well, it's interesting.

14:07 When I started my investing career more than a quarter century ago, one of the challenges was getting access to information, literally getting companies' annual reports. Took effort. Today, it's the opposite. As you point out, it's filtering. It's like drinking from a fire hose and filtering the signal from the noise.

14:25 So that's a real challenge. One of the ways I handle it is I invest with a long term perspective, try and give long term advice, ignore the short term noise of, you know, whatever Trump's tweeting today or, you know, what's happening to oil prices in the Gulf of Hormuz and just try and identify quality companies that I think their earnings will be double what they are today in five years. And those stocks are going up.

14:49 OK, so stay slow and steady when it comes to your investments. I want to go back to what Tom was saying and your political ambitions. You ran for New York City mayor back in 2025 as a Democrat. Affordability is the number one issue for voters this election cycle. The Democrats slammed President Trump's policy decisions, saying that it's led to much higher prices. What's your response to criticism that your Democrats have not offered up any kind of direct solution to the affordability crisis beyond piling on Donald Trump?

15:19 Yeah, well, I guess I would say that your point is well taken, that it's been more criticizing Trump's tariffs, the war in Iran, both of which have jacked prices up for consumers. Democrats have, I think, struggled to define a clear message. I think that's a fair critique of the Democratic Party. I don't think it's unreasonable to just say we're not going to do these crazy things Trump is doing. You know, being being less bad is, I think, sometimes in politics, that's how you vote. I do wish Democrats made a more positive case. And that's what I tried to do as a candidate, you know, talking about economic growth and, you know, You know, we Democrats, I think, have become the party of regulation and so forth, which has,

16:10 for example, constrained housing. Big issue. Housing affordability. And I do think there are elements of the Democratic Party that are, you know, trying to fix that and, you know, ease regulations in cities like New York, in states like California, where housing's become, you know, impossibly unaffordable.

16:30 Yeah.

16:31 Yeah, housing is top of mind for a lot of people. There's also the wealth tax that people are talking about as well. United CEO Scott Kirby saying that he supports a national wealth tax. I believe you're a member of the Patriotic Millionaires Group. So you believe in restructuring the tax system so that the wealthy pay a greater share of their income in taxes. What do you think of a national wealth tax? Is that something you are on board with?

16:52 Yeah.

16:53 What I supported probably 15 years ago, I went down to the White House with Obama, was the so-called Buffett rule, which was not a wealth tax, but it was simply saying, we've got to make... It was a group of us. I stood next to my secretary and pointed out that as a millionaire hedge fund manager, I was paying a lower tax rate than my secretary. And So it was a call for a minimum tax on the uber wealthy.

17:23 And I still believe that's the case. I think California's wealth tax, for example, is a bad idea. If one state does it, you just drive out, drive people out. Right. And you already see that happening. A national wealth tax properly, properly constructed. The devil's in the details, I think, could work as well.

17:42 Oh, good luck with that.

17:43 I got to ask you this with the heritage of your family, the arc of your service to New York City and running for office really with a strong effort.

17:52 The Democratic Party experiment.

17:54 Maybe comes from 1972 and George McGovern, or it comes from a more conservative Democratic experiment that bounces off Obama and Clinton.

18:03 Back to JFK.

18:04 I mean, you live the JFK model with Teach America, with the Peace Corps, and all that. How does a Democratic Party extract itself from maybe 18% popularity in America, I think that from Dave Wasserman at Cook Political Report, and get back to the Democratic Party popularity that JFK and that crew.

18:25 LBJ, knew. Yeah.

18:27 Well, look, one of the reasons I ran for mayor is I saw a party that had swung too far to the left. And in fact, it was my worst fears were sort of manifested when a far left Democratic socialist was elected as mayor. I will give credit to Mamdani that he has sort of tacked to the center, actually now being the dog that caught the car. He's like, oh, maybe I better not fire Jessica Tisch and have crime spike in the city. And one area we agree is, is he's taken steps to construct more housing and ease the housing shortage in the city.

18:59 So, yeah.

19:01 I have decided basically as a lifelong Democrat that I'm going to focus on dragging my party back to the center and trying to stop Trump and Trumpism so that most of my efforts have been trying to flip the House and the Senate back to Democrats as a check on the last two years of Trump and mostly biting my tongue and hoping for the sake of my city that Mamdani is successful as mayor.

19:25 You think we'll flip it? Not will.

19:26 Democrats?

19:27 You're Democrats?

19:28 I think the odds on the betting sites right now of almost certain to flip the House and maybe two to one odds to flip the Senate are probably about correct.

19:36 Whitney, your role at this newsletter prevents you from buying the individual stocks that you recommend. But I know you like some of the big tech names. How do you invest in the names that you like, but you're not allowed to buy directly?

19:47 I buy index funds. So the default, you know, I everybody, the vast majority of people should do what my daughters and my sister and my parents do, which is have money held back from your paycheck into an IRA or 401k, something like that, and then just have it default automatically put in the S & P 500, SPY. I don't manage outside money, but I do tell my daughters and my sister and my parents, I advise them. on what they should do with their retirement accounts. And I've recently recommended that they shift from SPY, which is market cap weighted, which means 40% of what you're buying is the top 10 stocks, mostly tech stocks, which is an all-time high.

20:28 I worry that it's sort of getting top heavy. And so I've recommended that they shift part of that into RSP, which is an equal market cap weighted stock. S & P 500 index and a bit of an index fund called VXUS. It's a Vanguard XUS. So it's just an international index fund. So I've just diversified a little out of the SPY.

20:52 All right. Good stuff. Whitney, thank you so much for sharing that. Whitney Tilson is editor at Stansbury Research, former hedge funder as well. Coming up, a conversation with Stephanie Guild, CIO of Robinhood, with a focus on personal finance, retirement and wealth management. This is Bloomberg Money.

21:09 You're listening to Bloomberg Money. Stay with us with more to come after this. Bloomberg Money, thank you for being with us. It's on personal finances, and I'm never going to retire, and also wealth management as well. I thought Whitney Tilson was great there.

21:25 Yeah, he was really interesting.

21:26 Just the optimism about the system.

21:28 And the idea that he is not going to make any changes to the individual stocks, but he's going to kind of tweak things to go equal-weighted towards.

21:35 The S & P 500.

21:35 I mean, the world's coming to an end 12 hours ago, and we've had a pretty good week once again across the arc of this bull market.

21:42 OMG, a bid.

21:43 There is a bid. The Nasdaq is positive right now compared to what it was yesterday, certainly. The Dow, however, is still negative, and that's really because of Caterpillar and American Express. The S & P 500 looks like it's going to end the week on the downside, currently off by about a quarter of 1%. And there's your VIX almost at 20.

22:00 It was a 20 and it's come in a little bit, but it's not 30. It's just as simple as that.

22:04 20 is a new 30? That's what you said?

22:06 Cross-ass it. I've got to look.

22:07 That's American oil down at the bottom, $ 103. Six cents a barrel. That's up sprightly 3.6%. Brent is up 117. That speaks volumes into a fractious weekend for the Middle East and maybe with a tinge of Europe in there.

22:23 All right.

22:24 Let's take a look at what our money team here have been working on. And one article that caught my eye is on how different generations are approaching the upcoming midterm elections and how they're investing around it. 27 percent of Gen Z investors have consulted a financial advisor about election related risks. That is more than double that of baby boomers, which are at 12 percent. This is all according to a recent survey from the Nationwide Retirement Institute.

22:49 Bloomberg's Zijia Song wrote this story, and she joins us now. So, Zijia, they're concerned, Gen Z is, about this election. Affordability, obviously, top of mind for them. Are they making changes to their investments?

23:00 They are.

23:01 Actually, this recent survey shows that 72% of Gen Z investors are making changes or considering doing so. And that's more than four times the rate of baby boomers. And part of that reason is because Their anxiety is spilling into actions. And unlike baby boomers, they haven't gone through like the dot-com bubble or financial crisis.

23:20 So they don't really know how to deal with this anxiety.

23:23 And that's why they're making more actions. Like 24% are actually moving to lower risk conservative investments and some more are diversifying into other assets.

23:33 Interesting. So what are strategists that you talk to saying about how boomers versus Gen Z versus Gen X dealing with pre-election anxiety?

23:42 Yeah, I actually talked to a lot of financial advisors about how you can trade election or how to position yourself before the midterms. And a lot of boomers have worked with financial advisors a lot. So they are more inclined to stay the course, which is what majority of financial advisors advise to do. It's just to do nothing.

24:01 And historically, we've seen that S & P 500 actually had positive returns in the following 12 months following every midterm election since 1950.

24:11 This is great. I feel ancient sitting next to you. You're killing me here.

24:15 If we go down 35%, which does occur, how will the young troops respond?

24:21 Well, you have to keep in mind that the younger folks, they also have a longer investment horizon. Really?

24:27 Yeah.

24:28 So if you stay in the market, the long-term return of S & P, of the broader markets, is always positive. They'll bounce back. But that anxiety is real. And that's why a lot of Gen Zs are more inclined to even trade elections or... try to seize on the moment nowadays.

24:45 Sometimes taking action may not be the best course of action. All right, Bloomberg's Suja Song, thank you so much. You can, of course, read her work on Bloomberg.com.

24:53 Joining us now, highly anticipated, Stephanie Gould is with us.

24:57 With her years at J.P.

24:58 Morgan, she had the huge challenge of going home, going over to the youngsters. Robin Hood is their chief investment officer and has done all sorts of fabulous work there on a huge brokerage. experiment as well. I want to get to an MMR in a minute, but I've got to first, Stephanie, just say the last couple of days, what have you observed at this unique experiment, Robin Hood?

25:20 We've been seeing customers actually take advantage of the pullback in certain names in the AI space. They actually have been selling Tesla and buying SpaceX in place of that.

25:30 Interesting.

25:31 But also buying names like Micron, Intel, and then selling actually some of the more consumer-oriented names, Nikes and iPhones.

25:41 I featured General Mills this morning for the first time in 15 years. Let's get to the Bloomberg Money must read here because it's fabulous from Stephanie about the real world out there.

25:52 Robinhood, they launched AI. Is it agentic? Nailed it.

25:57 Agentic trading accounts, allowing retail customers to direct AI to build and manage a portfolio on their behalf with funds ring fenced from their main account.

26:08 I've never said that in my life. That is original. What's it actually mean?

26:13 I mean, it means that you can set up a separate account and you can plug in your agent using a variety of different agentic providers. And then we also are providing different MCPs. So what's an MCP? I'm bad with this like something protocol, but essentially it connects you to different data points that can get you data that you need. And we're providing that at a subscription model.

26:38 So you can sort of all in the app, you can connect to outside data and help your agent make decisions.

26:44 What's the take-up of that among young people and among Tom's cohort?

26:48 I mean, we just launched it, so it's still relatively new, and you're having a lot of people open accounts and play around with it, but it's still kind of a thing that people are getting used to.

26:56 What is your model portfolio turnover rate? To me, that would be the first place to go. The kids want 100%. 200% churn. What do you see?

27:04 You're going to have that no matter whether it's an agentic count or not. I mean, you're seeing like the active traders are staying very active in this market because there's a lot of moving parts underneath, despite the fact that VIX has been relatively calm. And you have, you know, I think a lot of people figuring out what agentic will mean for them. We still see from our surveys that people want to use agentic for when they need it, but they still care about getting long-term advice when the big decisions matter, and that's not necessarily what they're using, you know, AI for.

27:35 Okay, so you saw a lot of people buy the dip this week, which is encouraging for those who are along the market, which is basically everyone at this point. There's almost $ 8 trillion available sitting in money market funds, I believe the number $ 7. 94 trillion. Does that ever get deployed, Stephanie?

27:51 Or do the account holders consider that money stasher as already put to use? You know, it's kind of on standby mode.

27:57 I mean, I do think it's different than we've seen over the last couple of decades, simply because cash is an asset class now, and that wasn't the case up until 2021. four or five when 2025, when rates started going up. So I do think it could end up being there for longer than you may have seen in the past. But, you know, savings rates aren't super high, historically speaking, because things are cost more. So I think if you have some cash on the side, it probably allows you to invest. And that's what we've been telling our customer bases that have cash on the side to invest.

28:30 You are more qualified than anyone I know on the Zeitgeist shift from a major bank over to all that Robinhood stands for.

28:39 The pressure is they all want to get rich fast. Well, how do you observe.

28:43 Within the Robinhood community I got to get rich fast. Like I'm thinking 2029.

28:48 Everyone's obsessed with how do.

28:50 You deal with that day to day?

28:52 I actually don't know if that's the case. I think you may start out wanting to make money quick. But I do think that we've witnessed a kind of. I don't know if it's maturity or if it's just knowledge, but we've seen our customer base kind of shift where they still keep their bucket, but maybe that's where you can hit it big. But they do have long-term assets.

29:12 We've got 10% of our asset base, like over $ 34 billion in retirement accounts that are more long-term oriented. We've got Robin Hood Strategies where we're managing the money for you and that's at two billion. It's been around for a year and a half. So we do actually have like buckets of money that people are kind of investing.

29:31 I think, Scarlett, the behavioral idea from my grandparents and my parents' depression babies over to this bull market boom and a generation that has never enjoyed down 35%, yet they've had COVID, they've had the great financial crisis.

29:47 The behavior day-to-day is within retirement and wealth management, the behavior's changed radically.

29:53 It has changed a lot. So how do they proceed moving forward? Do they assume the inflation that we see right now is always going to be at this rate and therefore they need to make double digit, see double digit returns to kind of stay afloat? Yeah, I mean, I think so.

30:05 I think like they they are very skeptical of the way things have kind of happened over the last.

30:10 They are aware of the history. And so I do think that they.

30:13 Want to not necessarily have to work a corporate job for the rest of their lives. I do think that we do know people who have learned how to invest, and that is they're one of a couple, and that's what they do. They invest long-term for their family, and maybe someone else in the family Right.

30:29 Does work a regular job.

30:30 Are Nikki Walters with us early in the show talking about this portfolio concentration, which I would suggest there's a lot of research on is almost normal within the boom and bust cycles of capitalism. Are you worried that there is too much of a concentration?

30:45 Within accounts?

30:46 I am.

30:47 Not necessarily maybe in accounts.

30:49 I mean, when you look at our Robinhood Investor Index, we're actually, a lot of the names haven't changed so much. It's a lot of the Mag7 and some of the smaller position sizes change a little bit more. But I think broadly, the market-wise, I am still worried about the concentration and actually the uptake of margin across the market that has mostly been invested in the AI trade that probably still has a little bit of unwinding to do.

31:13 Have you ever bought a meme stock?

31:17 I mean, yes, because, you know, sometimes a mean stock is real. You can call it a meme. But what does that mean? It just means that there's investor enthusiasm behind it. And it doesn't mean that the company itself is a bad investment.

31:28 She finessed that beautifully. That was compliance approved.

31:31 I'm sure it was. Have people started to take a bigger interest in treasuries given where yields are?

31:37 They do on the, and just not so much in long-term treasuries. I know that that has been a thing that, you know, and sure, if you bought at 525 and maybe you sell today, you've made a profit.

31:48 More in the short-term space.

31:49 I mean, we have, we offer. Yeah, exactly.

31:54 We have a decent APY for our sweep program and that, you know, we've seen a lot of people using that, which is equated to, you know, Fed funds rates.

32:03 I think we're getting a picture of what's happening here.

32:06 It's just fascinating. I am numb.

32:07 I mean, that silence, that's the Bloomberg money silence you just heard. And that silence is, it's Friday, and my brain is fried.

32:15 From the sequence of events of the week. It's just been absolutely nuts.

32:20 I know. Stephanie, thank you so much for joining us today. Stephanie Guild is CIO of Robinhood. Bloomberg Money is your new destination for our personal finance. This is a cross-platform effort that extends beyond your television screen. Check out our new digital hub at Bloomberg.com slash money. And Tom, this week, there's a story on how the annual cost of a U.S.

32:38 family's employer-provided health care plan has reached an average $ 28, 303 this year. I looked up three years in a row, roughly, Eight percent, eight percent, eight percent.

32:50 I think that's like a 25 percent.

32:52 Yeah, definitely versus previous years. And the numbers bear that out. Bloomberg's U.S. health deputy team leader, John Tazi, joins us now with more. So this is U.S. employers making employees contribute more to their health insurance through higher premiums and higher deductibles as well.

33:09 Yeah, I mean, this is a trend we've seen going on for a long time. The latest numbers out from KFF this week say the cost of a family premium tops $ 28, 000 a year.

33:20 What's interesting, too, is the share of that.

33:23 So that's split between what the employer contributes and what the workers contribute.

33:27 But the share of workers.

33:28 Contribution is going up even faster than the employers. I think that was about 9 percent this year.

33:34 Which is easily double the rate of inflation. And small businesses are doing this more than some of the big employers. And most of this country is made up of small businesses.

33:44 Yeah.

33:44 I mean, small employers always have a little bit kind of harder time providing health care for their workers. They don't have the scale and buying leverage and sophistication that a big company does.

33:58 So it's always affordability.

33:59 John, I remember the day Marlboro Cigarettes raised the price seven cents or whatever, and they reached a tip point where America said no. Are we anywhere near from 16,000 and Uwe Reinhart in Princeton years ago, out to, you know, from your Columbia, the great work at Columbia University and others, are we anywhere near like if we top 30,000 where America says enough and there's literally a revolt?

34:22 Yeah, I don't know.

34:23 I mean, I think when you look at this, this is sort of the employer space where, you know, 160 odd million Americans get their coverage from employers.

34:33 It's part of their compensation.

34:34 Right.

34:34 So, you know, relatively tight job market. You know, this is how this is part of how companies are paying their workers. What it means is that there's less less cash in people's paychecks because more and more of that money is going to the health benefit.

34:48 And a lot of employers are also opting not to even participate in a group health insurance plan. They're just giving money over to the employee and say, manage it yourself.

34:55 And I think it was last week, Tom Purcelli at Wells Fargo saying the benefit wages mix is in real time changing. John, I look at this and I go back to what I hear from people, which is fury over higher deductibles.

35:09 Where are we?

35:10 If it's $ 28, 000, what's the average deductible that people will see?

35:14 Yeah, so the average deductible right now for a family plan is around $ 4, 000.

35:18 Cash?

35:19 Yeah. After tax?

35:22 Yeah, I mean, that's what you would be paying out before your health plan starts kind of picking up the tab for the care. that you need. Now, some things are covered before the deductible, right? Preventive care should be covered.

35:33 But it is a lot of money.

35:35 And when you think about low-income households, you think about households that don't have a lot of savings.

35:40 That is a big.

35:40 Like, Scarlett, my math in my head is six grand pre-tax. Yeah, easily. This is like we've hit a tip point.

35:48 We've been heading towards this point for a while now. Well, in any case, this is something that we'll continue monitoring. And I know your team is on top of all that. John, thank you so much. John Tozzi, Bloomberg's U.S. Health Deputy Team Leader.

36:00 Books.

36:01 We had some interesting book discussions. We planned out weeks ahead of books here. And Scar got this going with your book. And it's one of my favorite people. He was my book of the year years ago. This is Galloway, right?

36:12 Scott Galloway, the famed NYU Stern School of Business professor, he's now in the UK, but he's talking about young men. And this book notes on being a man. It's part memoir, part compilation of his weekly newsletter where he shares practical lessons. It's almost like a self-improvement thing. They're all aimed at addressing the loneliness epidemic plaguing young men. That makes them vulnerable to online subcultures, isolation. And of course, this is relevant right now as we head towards the midterms because young men have kind of checked out. They were such a big role, such a big player, such a big influence in the 2024 election. But this time around, they feel like there have been a lot of unfulfilled promises

36:50 and they've taken the black pill and dropped out of the political system.

36:52 We had that story earlier this week on this black pill. But what's great about the arc of this is you can look at it seven different ways. I make, you know, six, seven... different ways here. To me, so much of it is the digital culture, which we use differently than they use.

37:07 Well, they grew up in it, a lot of the young people. If you're in your early 20s, right, all you know about is the internet from day one. You know, we're still old school about the way we do things.

37:16 My old school is I actually read the book cover to cover. I haven't talked much about it yet, but this is my book. And instead of being on boys, it's wonderfully on a magical girl of 1790. Gina Smiley wrote this up, The Invisible Hand of Maria Edgeworth. And it's shocking the way Gina takes you back to 1780, 1790, England, Ireland, and the loneliness of women and daughters. And I'll be honest, with all I've read, I've never felt the loneliness that daughters felt then.

37:50 And as you know, within the literature today, we're still talking about it.

37:52 Yeah, different world back then, but some themes do persist and carry over across time.

37:58 To me, this is a huge deal with the kids.

38:02 And hopefully one day Gina Smilak can talk to us a little bit more about that. We're looking forward to it.

38:06 Well, I'm talking to her people. I mean, she's in Brussels, and she's hard to get.

38:09 Gina Smilak, by the way, a friend of Bloomberg. She was a reporter here for many years.

38:14 French. She was my intern years ago, you know, I mean.

38:17 Now she's your mentor.

38:20 Gina, the book is selling. When's the movie?

38:23 Gina, you got to come on now after seeing this. All right. For the latest reviews and recommendations from Bloomberg, be sure to subscribe to the On Books newsletter. You can check it out there on Bloomberg.com as well. Coming up, the first foldable iPhone is out now. The most expensive iPhone ever that didn't really stop anyone from lining up to get it. That feels very, you.

38:42 Know, 2015. John Tosi, are you going to buy the Duo? Come on.

38:46 My iPhone is from the year 2020. There you go. So I'm probably not.

38:52 It still works. The technology of Bloomberg. That's impressive.

38:55 This is Bloomberg Money.

38:58 You're listening to Bloomberg Money. Stay with us with more to come after this.

39:03 Bloomberg Money.

39:10 Bloomberg Money. Personal finance, retirement, wealth management.

39:13 What it means is, well, it means you spend all your money on an iPhone.

39:16 I do the monthly plan.

39:17 I've got the new jewel here. I went out, I really like the chips. Like this has the new whiz-banging chip.

39:23 Yeah?

39:24 How fast is it?

39:25 It's wicked fast and the battery's great and I like it. And the monthly plan is not too painful so you did the lease yeah i do the lease thing oh interesting that was how many stop stop the show because mateo i know doesn't how many phones are you paying for right now uh four five five i'm at five Okay, we got a top tick six.

39:46 It's nuts. Why are we paying for our children's iPhones?

39:49 Oh, we'll be paying for those forever, Tom.

39:50 Yeah, I know that.

39:51 There's got to be an age cutoff. I'm paying for my mom's. There's no age cutoff.

39:57 Okay, why don't you bring in our esteemed guest here who wasn't lined up at Apple over.

40:01 In Fifth Avenue.

40:01 Lisa Mateo, co-host of Bloomberg this weekend. I know you're all about the Apple duo right now. They went on sale overnight in Asia. And there were lines. Lines overnight, even here in New York City.

40:12 If you're driving by at 5 a.m., the line was down the block.

40:16 It went forever and ever.

40:17 People who lined up, they're excited about it, even though it's expensive, right? Between $ 2, 000 and like $ 3, 000, the top grand.

40:22 Wait, up to $ 3, 000.

40:24 About $ 3, 100 for that top, top of the line, you know, if you want all the speed and all the things.

40:28 That's what you're going to pay. Tom's fancy chips.

40:29 Tom's fancy chips, exactly, to make the battery last a little bit longer.

40:34 But people want it.

40:35 It's something new you haven't seen, you know, from Apple before.

40:38 So it's a different look.

40:39 Some people want to buy it, resell it on the market because you can make a lot of money that way, too.

40:43 And then what?

40:44 The supply was not there.

40:46 That's the problem.

40:47 And then what?

40:47 After they resell it, after the supply, where is the due, say, June of next year?

40:54 Gosh, that's a good question for all these people who are waiting.

40:57 Do you not buy an iPad if you get the Duo? Like, does it take over the iPad?

41:01 It kind of does in a way. I mean, it's a little bit smaller than the iPad, but they said it's seamless. Like, you can't even tell because that's what they're saying. A lot of the kids, that's what they're watching now.

41:10 They're watching that. Put that, because see, that's like the big non-duo. It's light, but it's big. Like, Mrs. King can't use that. It's too big.

41:19 And Nicole Nguyen over at the Wall Street Journal says the duo is unusable.

41:23 Well, it's wider.

41:25 Like, you can't fit it in your pocket just right.

41:27 You need another case.

41:28 How do you get the case? Can you get it in your Kelly bag? I mean, the main question is, can you get the duo in the girls' little bags? You have to be able to.

41:36 But the problem is, can you get one even?

41:37 Because if you're on the website today and you're trying to order, you won't get it until like January.

41:41 So much for the holidays.

41:42 Yeah, so there's a limited supply. So yes, it won't be in the Christmas stocking then, I guess. But I know a lot of people are talking about it and they want it.

41:51 Can we point out that the stock refuses to go down?

41:54 Well, it's seen as kind of the anti-AI play now, right? Because it's not as up to speed on the other guys.

42:00 Bloomberg Money ProTip, personal finance, retirement wealth management. Go back and look at the Bloomberg News, New York Times, and FT articles in April of the trade upset and tariff. And everybody had decided Tim Cook was a failure. Apple was a failure in China. Apple wasn't going to come out with this toy or that toy or the others.

42:21 And then look at the stock. And the stock did the exact opposite.

42:25 Of all those articles.

42:26 Well, Tim Cook figured it out and he'll continue to kind of lead the way. He's the chief liaison between Apple and the government. He's a policy guy right now.

42:36 How many phones are you paying for?

42:37 I'm paying for four, but I was wondering about the age cutoff. I've got a 24-year-old. Can he start paying for his phone?

42:42 No, no, not yet, not yet. Why are we doing this? It is cheaper the family way.

42:47 It forces them to talk to you.

42:49 No, they only talk to me when they want me.

42:51 They need money.

42:52 When they need money.

42:52 That's true. I know.

42:55 It's like.

42:57 They call and you try to have a long conversation before the inevitable ask comes.

43:02 Oh, see, can I have some money?

43:03 Afterthought. I'd love a duo. Oh, great. That's good to know.

43:07 Afterthought is a child, by the way. Lisa McHale, thank you so much. Lisa, of course, you host Bloomberg this weekend, every Saturday and Sunday morning, starting at 7 a.m. Eastern time. That does it for Bloomberg Money from Tom and myself. Have a great weekend, everyone.

43:22 This is the Bloomberg Money Podcast, bringing you a smart look at the forces shaping your financial life. I'm Tom Keen with Scarlet Fu. You can watch the show live on Bloomberg TV every Friday at noon Wall Street time. Subscribe to the podcast on Apple, Spotify, or wherever you listen. And as always, on the Bloomberg Terminal and the Bloomberg Business app.

43:50 Thank you.