Bloomberg Businessweek Weekend - January 10th, 2025

Published Jan 10, 2025, 10:30 PM

Featuring some of our favorite conversations of the week from our daily radio show "Bloomberg Businessweek."

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This is Bloomberg Business Week Insight from the reporters and editors that bring you America's most trusted business magazine plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Masser and Tim Stenovek on Bloomberg Radio.

Hi, everyone, Welcome to the Bloomberg Business Wee Weekend Podcast. Well it was a busy busy week as we got the FED minutes from the last meeting of twenty twenty four and the final jobs report of the year twenty twenty four. Again. Also is showing of the latest gadgets and tech and trends at CES in Las Vegas, of which Nvidia's CEO Jensen Wong was a highlight but did not impress investors. Plus a huge story the wildfires in southern California. We spent a lot of time this past week talking about it. A lot going on for the latest onm THEI fires, and all of the top business and economic stories. Of course, you can always head to the Bloomberg End to Bloomberg dot com.

Carol, you mentioned in Nvidia and yet another megacap tech name was on our mind this past week, and that was Apple, the world's largest company my market value. It's kind of like sometimes the world's largest company. Sometimes not one too to say it's like among the world's largest companies. It got a rare cell call from one prominent tech and media stock analyst, and yet set analyst still likes the company. More on that a little.

Bit later, all right.

Plus Carnival CEO Josh Weinstein on what the cruise line Giant can do for an encore on the heels of strong quarterly earnings to cap off twenty twenty four.

And details on how to discover flavor and savor life. It's all in a new book by professional taste tester. Yes, it's a thing, Mandy Naglige.

All right, all of this to come. We begin with that rare Apple downgrade. The call came from Mofatt Nathanson's Craig Moffat, a long time and known analyst in the media and content distribution space.

This is largely a evaluation call, so I want to be clear Apple, we wouldn't argue with anyone who says Apple is a great company. We think that their AI strategy is a very sound strategy. I love the appeal of the fact that Apple has a low capital intensity approach to AI, that they have the trust of customers.

And on and on.

They have a lot of advantages. No one would dispute that. But it's trading at thirty three and a half time's earnings. And one way to think about it is just think about the peg ratio, if you will, the ratio of growth rate of the multiple to growth rate.

It's trading at a PEG ratio north of three.

The rest of the MAG seven trades at a PEG ratio of around two. So you're talking about a fifty percent premium even to the peers of within the MAG seven.

That just doesn't make sense.

Given what are some very material risks, and you mentioned some of them.

China is a very real risk.

Not just because the Chinese government, for obvious reasons, is going to be disinclined to allow Western language models in China, so you're going to have to have a domestic partner and share economics with them, but also because the Chinese handset competitors have gotten much stronger. Another risk that is not discounted in the stock price at all is the anti trust risk. And here I'm not talking about the anti trust risk in the cases against Apple, although there are plenty of them. The real anti trust risk that's very proximate is the risk in the Google case, where.

Explain explain that risk to Apple? How is that? How is Apple at risk?

Because twenty five percent of Apple's operating income comes from payments from Google, and the judge in the Google case has specific said those payments are illegal. Now, you can imagine that there are outcomes where where they still pay some or all of that, but you can't pretend that there's no risk at all when the judge has already said that Google is guilty and the payments they make to Apple are illegal. I mean, that's twenty five percent of apples operating income. It's it's twenty five billion dollars a year. And again, I love Apple just as much as everybody else, but there are very real risks that are simply not appropriately discounted in the multiple that Apple is being awarded right now in the market.

I want to zero in on the China risk and what exactly is because this is a story we've been talking about for years. At this point, Craig like concern that you know, Chinese consumers are not going to buy as many Apple devices as they have previously. Switching costs are pretty switching barriers are pretty low in China because of these you know, over the top third party apps. People don't get locked into the iOS ecosystem like they do in other countries because if we chat, et cetera. So what's going on in China in your view?

Well, I think the biggest thing that's going on in China is that the other handset manufacturers, Huawei and Honor and so on, have gotten much better. If you went back to the last big iPhone cycle, which was the five G cycle in circa twenty twenty one, the Apple competitors at the time were significantly weaker than they are today. And interestingly, Huawei in particular, because the government of the US put sanctions.

On Huawei and limited Huawei's.

Access to chipsets and that sort of thing, Huawei has had to sort of reinvent itself with domestic technology, and they've done a really good job. The handsets that they make are now fully competitive. They are not a replacement for Apple. I'm not suggesting that they are, but they have a really co petitive offering, and so the market share opportunity for Apple is simply not what it was in the last big cycle. But you also have this time the government's thumb on the scales. And there's a couple of ways for that. One is, as I said, you're simply not going to have the Chinese Communist Party saying it is acceptable to have Western lms answering questions like what happened at Tanneman Square. So you're going to have to have domestic partners in order to be able to offer AI, and that means a different margin structure.

And what have you.

You also have a very real risk from tariffs. And it's not just in fact, not even primarily that Apple itself imports almost all of its components, and in fact today imports all of its handsets, mostly from China because they're assembled there. Even if you even if they are exempted as they were during the last Trump administration, you have the risk of retaliatory tariffs in response to American tariffs that could be related to the auto market or completely unrelated categories, but where foreign governments respond by putting tariffs on a company that is obviously quite highly identified.

With the US.

So again I don't want to suggest that any of these risks are base case risks.

It's not like there's a.

Sixty or seventy percent chance that any one of them will happen. But if you have all of these potential risks, all of which are not shouldn't be described as sort of a tail risks.

These are really.

Real possibilities in all of these cases that there are negative outcomes, and they ought to be reflected in the multiple of the stock with a more sober multiple, and they simply are.

Not craig A device is not seen as having the same allure to the Chinese consumer as they once did.

You know, I don't know that that's the case.

There is still Apple is still a brand with real cachet in.

China. But you know, remember you now have.

Huawei introduced a trifold phone, for example, where you have Samsung devices that have had foldable screens for a long time coming in from from Korea. So the gap between Apple and its competitors is not what it once was. There's just there's simply no way to argue that's that's.

Not the case.

You know your report, You know, pundents, you have watched Apple stockgrind higher of the last several months, have shrugged off the appreciation as a melt up on known news. But that's not quite right. And you know, there has been a lot of news, right, it's just.

All been bad. Why them melt up? Then?

Why does everybody I don't know, maybe it's a stupid question, but why does everybody continue to chase it and send it higher when there are some real threats in terms of, as you said, the DOJ case against Google that would really take out a big chunk of kind of the financial or the balance sheet right of that company of Apple specifically. So why does everybody kind of continue to support it? Why do they chase it? Why is there the melt up?

You know, it's a great question. Now, first I should be clear, you know.

Although the stock has climbed higher and higher over the last few months, it's only traded in line.

With the market.

So to some degree, this is an indictment of the way the market overall is pricing equities right now, particularly in the face of rising interest rates in therefore appropriately higher discount rates.

It's but I suspect Carol.

That the real issue here is is that there is this narrative that Apple is the quote unquote safe choice among the magsat and that it is such a strong consumer brand, has such an unassailable franchise that it's the safe place to be. And while that's absolutely true operationally, it's not a safe place to be if it's trading at thirty three times earnings. It's a safe place to be if it's appropriately valued, but it's if it's already being awarded an extraordinarily high multiple. Nothing safe about that, even if it is a very strong business model.

So if it gets down to one eighty eight that's your price target, do you change your rating and do you say, okay, now you can come in and buy, or do you kind of still wait and see.

Well, we would certainly say that what you want to get to is you want to get to a price where it's fairly valued, and if it gets below that, then there's actually an opportunity to buy it. And I certainly wouldn't argue that Apple doesn't deserve an attractive valuation.

It's a great company.

It's just that when you start to get to thirty three times earnings, and again a peg ratio of north of three, that implies is that the market has already priced in an enormous amount of potential good news, and so you'd have to see something quite extraordinary to be able to say that over the next call it, one, two, three years, that the stock can actually deliver attractive returns given this starting point.

Okay, Craig, while we have you, you don't just cover Apple, you also cover Comcast, Echo, Star, Charter, Altie, S, Verizon, and more. Charter Communications. It's your top pick for twenty twenty five, despite cord cutting accelerating, despite what's happening to PATV, Why is it your top pick?

You know, it's funny in some ways.

It is the exact antithesis of what we were just talking about with Apple. Charter and the cable stocks have been given up for dead, and so they are extraordinarily attractive valuations. And a company like Charter, remember Charter was one of the best performing stocks in the S and P for a decade. It was out twenty refold. I think over a decade when.

It was buying back a ton of stock and.

Had a really attractive levered equity return strategy. They suspended that strategy for a while in order to invest really aggressively in rural buildouts, and the market has seen the free cash flow yield go down during.

That capital investment cycle.

You could argue that those are actually pretty good investments, but the market hasn't found them as exciting as the old strategy of buying back stock. Well, they've already said they're largely getting to the end of that strategy, and so they will as CAPEC starts to come down, they're going to resume their stock buybacks in a very big way. And it's a company that we see growing in the load of mid single digits. Not sexy, but by the way, that's what Apple is growing as well, but growing in the load of call it low single digits. But it's priced for negative perpetual growth. And by our twenty twenty eight free cash flow estimate, we have this thing trading at a something like thirty three percent free cash flow yield on twenty twenty eight. That's an absurd, absurd valuation, and so I just think it's way too cheap and a really exciting opportunity at this price.

Hey Craig, just one last question. You know, it's funny coming off the Golden Globes, I was kind of like, oh my God, it's just content coming from just all these different places and streaming and regular teeth.

It's just kind of nuts.

But I am curious as we look at where content's coming in particular streaming other than Netflix. Do you think the legacy media companies can navigate the change towards streaming.

In a clear way?

And unfortunately just got about forty five seconds.

Well, it depends what you mean by can they navigate it? Will they survive? Of course? Will it ever be as good a business as the old legacy cable network business was and it's heyday. No, it's just not going to be as attractive a business because it's so much easier for customers to churn. That creates a less attractive revenue profile, a less attractive cost profile.

But you will still have.

Winners, and they may not be winners on the scale of Netflix. But Disney is still going to be all right in the streaming business. Again, it's just not going to be as good as the business that they are leaving behind.

Thank you, thank you so much. Really really enjoyed this, and happy New Year to you. I really appreciate it. Craig Moffatt, founding partner and senior Alist Debret Moffatt Nathanson joining us right here in New York City. If you missed any of it, be sure to check out our podcast feed a little bit later on. You can find it at Blomberg dot com.

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So we got a big read on the US economy this past week. We had that monthly jobs report on Friday. We also got fed Minutes on Wednesday. You can read all about it. Check out our full coverage on the Bloomberg terminals. Simply type ECoG or head over to Bloomberg dot com.

Another way that we gauge US economic activity is through what consumers are doing, including spending on leisure and hospitality. We recently got a reading on that when Carnival released earnings. The company expects record levels of cruise demand this year, with no signs of a slowdown in sight.

For more on the business of leisure and cruises in particular, we recently cut up with Josh Weinstein. He's the president, CEO, and chief Climate officer of Carnival. We talked to him just after the company reported earnings in late December. He kicked things off by sharing context on the business.

If you look at where we are today versus same time last year, we are higher in occupancy, higher in prices.

As a matter of fact, it's.

Historical levels for both for each of the four quarters for twenty twenty five. So, as I heard you saying before I came on, the demand for our cruises is pretty.

Phenomenal typically this time of year, Josh, how much of the following year is booked? How different is this than historical averages.

We don't give that out for various competitive reasons, but I'd say it's nicely it's nicely higher. To give you a sense of the momentum, you know, if you think about what was our booking activity, how much activity did we generate in the last quarter, So from the period of September through the end of November, that beat last year even though we had less to sell. So we sold more for twenty twenty five, and we sold it at higher prices versus same time last year. And at the same time we set a record for booking activity for the following year out so in this case twenty twenty six. So things are moving really positively across the board. And the great thing is this is broad based. So when we look back at twenty twenty four and we look at our portfolio of world class brands, we were actually higher mid single digit to mid teens percentage wise in our yields, in the revenue we generate for person per day across all of our major brands, all of our major trades.

So it's really gratifying the.

Team, our global team has done a phenomenal job and really a shout out to each and every one of them from doing what they do.

Okay, this maybe sounds a little bit stupid, but why do you think this is happening?

I mean, and I'm just curious what is it?

Tell us attle bit about it and remind us, because you do have a portfolio of brands and it reaches across different consumers if you will, of your brand. So give us an idea of why you think you are still seeing kind of record bookings.

Will need an hour, right, I mean, there's so many reasons. You know the principle and I remember I remember being on with you a year ago and talking about what we'll call the price to experience ratio, and the price to experience ratio of a cruise versus the price and what you pay for a land.

Based alternative is nuts, right.

I mean, the value that you get from a cruise for what we provide is night and day to what you can get on land. And people are recognizing that, and so we are catching a net much wider into the general population for people who will now consider cruising as a vacation alternative, people who have never cruised before. As a matter of fact, in twenty twenty four, we had over ten percent more new to cruise than we did the prior year, So becoming more mainstream, breaking down myths, and that value gap is real. So we can still increase our pricing as we've been doing the last few years and be an incredible value. And I tell you there's so many things that our teams are doing better and better every single day, from how we manage the revenue curve right, the yield curve between the time we launched two and a half years in advance the time we sail. Our marketing is amazing, Our brand is doing a better, better job of creative marketing, getting in the consideration set and then performance marketing and make sure we close the deal and get the booking, you name it. We could talk about it all day, but everything is moving in a positive direction.

You know.

I got to say, Josh, there's so much coming at us, and so many individuals and leaders CEOs that we talked to say, you know what, We're kind of holding off until we get an idea clear picture of what happens in twenty twenty five. You are obviously optimistic. You see numbers and data in real time in terms of bookings, But I am curious about the upcoming White House.

Is it good, bad, or neutral for your business?

You know, we had a great relationship with the Trump administration the first time around. We had great relationship with the Biden team, and I expected that great relationship. We'll pick up with President Trump again. So you know, our job is to deliver amazing vacation experiences to millions of guests a.

Year around the world.

That is what we do, and we do it very well, and every single year there is something right because we are global and the macroeconomy and the geopolitics are what they are. When I was with you a year ago today, we didn't have Red Sea on the radar screen. The Baltimore Bridge hadn't collapsed, you know, hurricanes hadn't hadn't done the damage that they did in the United States, government elections getting thrown for a loop in Europe like the UK and now Germany. None of that was on the radar screen and we outperformed our December guidance by seven hundred million dollars. Our job is to deliver no matter what the world might bring, and we'll continue to do that.

So I do wonder when you look at twenty twenty five, what macroeconomic factors, what geopolitical factors concern you the most? Josh, you know when you think about the company's twenty twenty five performance potential?

Oh man, you know, sorry'm asking you.

Yeah, that's all right. I'm not going to single anything out. I mean, like I said, at our job is to deliver. We deal with whatever the world might bring. We are nimble. Our team is amazing at reacting as they need to.

But more importantly, we are.

Proactively doing what we need to do to position our ships with our guests the right way and delivering on board, so the world of turn crises will come and go and people will keep cruising.

You've been President's CEO Chief Climate Officer since August of twenty twenty two, so you've been in this position for a.

Couple of years.

Relative to the last couple of years, how would you describe the health of the American consumer right now? Same, better, worse.

We're just seeing continued positive momentum.

So I think it's hard to say anything, but it's just as good now as it has been for the last few years for us, in particular, given the record yields that we're just coming off of and we're building on top of that.

And you've got to remember we're a global company.

So yes, the United States is the biggest cruise market by far, and we're doing incredibly well in the United States, but we are also the biggest in the United Kingdom, the biggest in Germany, second biggest thing in Italy, second biggest in Spain, Brazil.

So we have an incredible global presence.

And the fact is economic cycles come and go, prises come and go, macroeconomics will flow different times in different places around the world. So our portfolio approach of being in these phenomenal markets really serves as a great hedge for us because things will come in their cycles and leave their cycles at different times.

So, of those geographic markets that you mentioned, even those that you didn't mention, where you do operate, where you do play, where are you most bullish?

Where am I not?

You?

You know, if you think about cruising right and you think about our brands, we're about a third of the market. Let's just say, in broad terms, if you take the whole cruise market and you put it into a bucket with all of the vacation alternatives at the same time, we're about two to three percent of the overall vacation market. And so how can you not be bullish when we are so underpinnished traded as a global industry. I mean, it is remarkable what inroads we can make by just getting people who have never cruised before to consider cruising.

I'll tell you what.

I don't know a Disney strategy anymore than anybody else does from the outside. But I do know that they talked awful lot lately about reducing the investment in their land because they want to build more investment into cruise and double the size of their fleet. I think that is very, very telling, and I think it's a brilliant idea.

Okay, and you guys have invested in your fleet.

And I'm also curious about you know, when I did a deep dive on the company and I got off at Grand Turk, you guys have a port there, and I am curious about these offshore destinations for Carnival travelers. How significant is the July twenty twenty five opening of your Celebration Key private island destination to the companies full your revenue outlook, I am curious about how this moves the financial needle, these offshore ports that are yours.

You know that you guys highlight.

Yeah, absolutely, They're a critical piece of our strategy. So even today without Celebration Key, we've got six jewels in and around the Caribbean and we carry We took about six and a half million guests to one of our destinations in that geography. That's about equal to the rest of the industry combined with theirs. On top of this, we've got Celebration Key, which is going to be a phenomenal guest experience built from the ground up for Carnival Cruise Line and their idea of fun and just a wonderful guest experience on board, and there's a lot that we can go into, but it's going to be phenomenal.

Now.

With respect to twenty twenty five, there's really not that much of an impact because we don't open until July with a handful of cruises and then we build up. So for the corporation overall, it's only about five percent of our itineraries in twenty five we'll touch Celebration Key. That ratchets up to about fifteen percent when we get to twenty twenty six. On top of this, we've announced that we're doing some major investment in one of our other existing destinations, traditionally known as Half Moon Key and rebranded relax Away at half Moon Key, because it's a different vibe than Celebration Key. It is a beautiful tropical paradise, white sand beaches, and what we want you to do there is lean into the beauty and the pristiness of that location and the crystal blue waters and relax and enjoy yourself and unwind. And we're going to be able to marry these two types of experiences on the same itinerary, so you get the Idyllic and the Ultimate Beach Days across those portfolios.

Our thanks to Josh Weinstein, president and CEO and chief Climate officer over at Carnival and.

Tim, we had another development in the leisure and hospitality space, and this had to do with the largest US ski resort. What's been their time of year when everybody's out there skiing. We're talking about Veil Resorts. Shares did bounce around this past week because you did see a bunch of workers ski patrollers who were out on not working because they wanted a new contract, they wanted more money.

I've been trying to get you to talk about this story for close to two weeks. We're finally talking about it, which is great, and it's great that the I think for a lot of people that this strike has been put to an end because I don't know if you saw on social media, but back in late December, December twenty seventh is when this strike began. You saw this playing out. You saw videos of long lift lines, You saw big parts of Park City Resort closed as a result of them not having the ski patrollers to actually patrol and do avalanche control in these areas. And it comes at a time when it's one of the most crowded times because people are out for the new year, they're out for the holidays, they're traveling with their families. They're spending, in some cases, Carol, tens of thousands of dollars to take their families to this mountain resort, and they're not having a good experience.

Well, speaking of money, I mean the Park City Ski Professional Ski Patrol Association. They did claim victory in this battle, saying in a statement that Veil Resorts, which owns Parks Mountain Resort, acceded to its key demands, including a two dollars an hour base pay increase and raise for some ski patrollers. So when all right, you're listening to Bloomberg Business Week coming up, what the next generation of people can expect during their lifetimes, you might want to sit down when we hear this conversation.

Okay, you know gen z. Yeah, there's such thing. There's Gen Alpha, which I've learned about. Yeah, thanks to this interview.

And what about Generation beta?

Their next? That's next. This is Bloomberg.

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Okay, we know about the Greatest Generation. Check the Silent Generation.

Check.

Do you know there's someone there's a generation before the Greatest Generation? What is it they are called?

Are you serious?

Yeah? The Lost Generation?

Oh, I do know that.

I do know that.

And then I guess we forget about everyone before that, right, And.

Then there's right that's neither here, sorry everybody. And then there's the massive.

Boomers boomers, Gen X, Gen X.

Millennials yep, Gen Z yep. Thenwhere else?

Then it gets a little complicated.

Yeah.

Gen Alpha that's twenty thirteen to mid twenty twenties. Okay, those are my kids, I guess, Okay. And then now that we're in the mid twenty twenties, it's time for the next generation. We're talking Generation Beta, okay. And they're born from twenty twenty five to twenty thirty nine, so most of them aren't even alive yet.

All right, So we're waiting, but we're wait objecting a.

Few of them. What they're going to be like opy birthday to them.

Despite that, PGIM set out to figure out what this generation would look like. They interviewed doctors, scientists, parents, and more two thousand Americans to get predictions for the future of Generation Beta.

David Blanchett is managing Director, portfolio manager, and head of Retirement Research at PGIM. He joins us from Lexington, Kentucky. David, Happy New Year. Great to have you here with Tim and myself. So tell us about this project, because we really haven't talked about this next generation, Generation Beta. So tell us what you set out to do.

Well, you know, first you all kind of introduce this idea of generations, and you mentioned baby Boomers. They're actually the first generation to kind of have a name. It was essentially a group of individuals at a certain age and right, so we've kind of moved forward to the time you mentioned the Boomers, Gen X, Millennials, you know, the Alphas. Now we have the Beta. So everyone born on January first, twenty twenty five for the next fifteen years is going to be part of Generation Alpha. And obviously there's still a lot of those babies to come. But you know, we were curious, like, what what might the future hole, like what are we looking at in terms of this newest generation? So, as you all mentioned, a pretty exhaustive survey, you know, reviewing kind of expert opinions, surveying two thousand Americans, and lots of interesting perspectives people have about you know, things like life in general, retirement, longevity, just lots of interesting projections about the future.

I mean, don't you think if you went back in time I'm just trying to figure out a corollary here that makes sense. But if you went back in time, you know, to the to the nineteen seventies and said to folks, what do you think people born you know, in the nineteen eighties to the two thousands would experience in life Like they're not going to be talking about smartphones and you know, AI, they're going to be talking about flying cars because that's what we thought would happen. Right, There's this disconnect between predictions and what actually happens, right well.

And so I think that that's why like this is.

I think this is informative, it's useful, but it's really difficult to think about what's going to happen in the future.

Right.

So you know, for example, you know, one of the questions in the survey was like, what would you call this generation? And you just said it a second ago, but like the most common nickname was Generation AI, Like even even three or four years ago, that probably isn't the name that we'd used to describe this later, this latest cohort. So I do think there is a lot of things that are changing, But to me, like this idea of change was probably the biggest theme in the survey, where there is lots of expectations where you know, kind of every facet of raising children, of saving for retirement, of planning for healthcare people, partial change in the future, especially for this Generation Beta.

What about in terms of I'm really curious about how we work right here? We are four years off the pandemic. We thought it was going to be transformational, and I guess for some who are still working from home it is, but there's a lot more people who are being pressured to come back to the office. How do you think about this generation or what did you hear about how they think they will be working?

Sure, so eighty three percent of respondents thought that retirement willok completely different for Generation Beta, And well why is that? It's because there's idea of many retirements and this idea that as we kind of evolve through the workforce, we're going to be changing changing jobs. So, you know, other stats would be that seventy four percent of people thought that Generation BETA would work less than five days a week. Eighty percent of respondents thought that people would have three distinct career paths over time. So I think that there is this kind of emerging perspective that this idea of having kind of one job and one profession for you know, thirty or forty years, isn't the future of work based upon how things are changing, David?

Is that because we're going to be living to one hundred and fifty, So yeah, we're going to have these many retirements, We're going to have these many you know, transformations in our careers.

So I think that people will be living longer, you know, So I focus on retirement research, and I don't think we're going to have most people living to one hundred and fifty, but we are going to see improvements in longevity, right, And those improvements kind of radically create complexity around me on how we plan for retirement. And so to me, it isn't all that surprising that there's this perspective that you know, generation of Beta isn't going to retire right to the extent that we can. We can, you know, create jobs and create abilities to work longer. Lots of folks that want to retire. Actually, personally, I don't love the word retirement out the word financial independence. What we want to be able to do is is to save money and eventually stopped working. And I think that's where we're seeing this perspective around Generation Beta, where they're going to be this in theory, this group of individuals that that doesn't have the same retirement to everyone else. That being said, you know, it's thought that blows my mind is that they're not going to be you know, age seventy until you're twenty ninety five. So retirement in seventy years is going to be very different than it is today.

To be young born in twenty thirty nine, sure would be nice already, right already, I'm thinking about it. One thing that I was surprised and you're reminding me about this is in a history class in college I remember studying. I believe it was in like the nineteen twenties, maybe the rise of leisure and the fact that people had, they weren't stuck in the fields, you know, twelve hours a day, seven days a week, three hundred and sixty five days a year for the first time ever. So there are certain things started happening, and I could be getting the dates wrong, and I know I'm over generalizing here, but I think if they were to look at our lives now, they'd say that, oh wow, those people never work. But when are we going to have like a four day work week or a three day work week, because automation is going to be doing such.

A good job.

Are you asking for them or for you?

I'm asking for me.

One of the markets going to only be open four days a week, and then we only have to work four days a week.

That's what I want to know.

So, you know, seventy four percent of respondence in the survey thought that Generation BETA would work less than five days a week. And so I think, again, there is this idea of work becoming more fluid versus this kind of structured nine to five thing. Obviously, we saw, you know, during COVID, a rise of remote work people and not going to be in the office through their jobs, and a lot of companies going to pull people back into the office. I think that I think that there is this emerging perspective that this requirement to be you know, in a at a desk in an office five days a week. It's not gone, but it's kind of slowly evolving into something else that is a lot more flexible.

One thing I want to talk about is healthcare.

We talked about longevity, and I feel like there's a bunch of things here in terms of your findings. Half of adults believing that cancer will be cured by gen beta percent predicting that gen beas don't have individualized healthcare based on their DNA, And I feel like we continually are increasingly tim are having conversations about individualized medicine. Talk to us a little bit about more about that, because it's an incredible cost to society, it's an incredible cost to individuals that we still haven't figured out some of these major ailments. So pull that together for us.

Yeah, I mean, I think that that's kind of an optimistic perspective. You know, I too saw the fifty one percent stat of thinking that generation made would cure cancer. That I think that that to me what resonates looking across the response is just this idea again of kind of like the evolving state of healthcare. I think the idea of personalized medicine. You know, there's there's some questions about like AI things like that. I think that I think the way that the individuals can receive you know, treatment is going to change, and I think that that was a key theme among the responders in the survey. So healthcare, I think that people think it's going to evolve in the future and radically affect generation made in terms of how they enjoy your life and also when they eventually.

Retire, okay, get better, get to work. I was kind of hoping cancer would be cured before then.

Fingers crossed. I would love to see that. The other thing is just one more stat on all of this. Fifty nine percent think AI artificial intelligence will be able to predict and prevent health issues before symptoms appear. And you know, it's just as you know, we have spent yere in the investment world the last two years talking about nothing but AI, generative AI, large language models, and so on.

In the impact.

Although I think people are thinking it's going to take a while for all of this to pay off and be put to work.

Yeah, I mean, I think one of the questions was, like syncior centers wonted to think that AI.

Is going to raise their kids.

And so I think that that there's a lot of a lot of a lot of positive expectations in here around artificial intelligence and how its role in terms of education, in terms of the role of kind of helping individuals have better personalized experiences based upon their unique preferences.

I'm wondering about technology because and the folks you interviewed, uh, how did their how did their answers very based on who you talk to you because you talk to doctors, you talk to parents, you talk to technologists, you talk to scientists. How did they think differently about different generations?

Well, you know, it's funny, you know, one of the differences that I noticed with the responses was like the like the older generations, like boomers, we're just optimistic about like the the the possibilities the future of the generation beta. You know, beyond that, you know, if you look at just like maybe at a higher level, if you look at things like like like regrets and and the things that that that people would change based upon their lifestyles, you know, you have things like like saving for retirement and spending time with kids like that, like, you know, those those were very different for older Americans versus younger Americans. So a lot of the questions I didn't see big differences in in terms of you know, looking at like boomers, millennials, gen X, but you do see it in terms of things people say, well, like what do I wish I had done differently looking back on my life?

Hey, Having said that, I was kind of drawn to a statistics that you shared with our producer and our team. The people surveyed estimate that Generation BETA will need approximately one point eighty eight million dollars to sustain in retirement. That seems like a low number.

It's well, I think it's all it's all relative. It's it's a big number. But like I said, I mean, we're talking about people retiring, you know, seventy sixty five years from now. I think that I think there are some really important things here, Like there was one I think useful stat that like eighty percent, you know, think that Generation BETA should, like in a perfect world, start saving for retirement as soon as the child's worn And that's probably not realistic. I think most you know, I have four alphas myself, no betas, and that's that's like retirement's tough, right, And so I think that that one thing that will make retirement tough is we talked about early or is this increasing longevity. But I also don't love that word, Like I said, retirement. I think that I think that it's going to be more possible for us to do things that are economically additive at later ages, right, and and I mean along those lines, like you know, one of the important stats in the report was the number one regret of all respondents was they didn't save enough for retirement. Okay, what's really interesting is is that is never the highest regret of any of the generations. So like not saving for retirement is this kind of regret that kind of echoes across generations, but it's never the biggest thing.

Like if you look at like like.

Boomers for example, they wanted to you know, spend more time with their loved ones and take care of their health things like that. So that I think that, you know, we like, there is that big number, that one point eight eight million, But I think what's important is is that is you know, things like not saving for retirement, you know was actually a bigger focus among among younger respondents.

But they're worried about.

Like everything, like like they have just have like regret schalol or or as individuals get older, those regrets spade away. But to your question and point, retirement is very expensive. If we start living to age one hundred and ten hundred and twenty, it's even more expensive than today.

But is it also something that's more top of mind maybe for younger generation because it's not like when my dad retired and there was pension and VA benefits and social security and investments. I mean, there was all these different pools and it's a very different environment for a lot of workers nowadays.

What it is.

I mean, so we've got I think, you know, like personally, I don't love the fact that the trust fund for Social Security is projected to go bankrupt in about about ten years. It creates a lot of uncertainty around around like the bedrock of our retirement being there. But also like like we've we've entered a world of personal responsibility for retirement savings. You've got to save in your in your four oh and K and your I ory things like that, and I think that that's a really good way to help individuals accumulate money for retirement, but you need to make sure they have access to a plan. But you know, kind of a bigger problem to some extent is Okay, you get to retirement and you have I don't know, half a million dollars as it's like now what like you train these people to say for thirty or forty years, and all of a sudden you've got to figure out how you're going to spend down that money, and you don't know how long you're gonna live, what the markets are going to do, and associreatd bankrupt and so I think that we have we have a pretty good system, but it places a lot of responsibility on the shoulders of the average American. And that's where you know, having help, having an advisor, using certain tools resources. I think that's really becoming more valuable because you only have one shot at retirement. You can't screw it up, and so getting help to figure out what the best thing to do is is just becoming I think more important for all Americas.

Hey, are you concerned at all about a lack of Generation beta actually appearing? Because childcare has gotten so expensive and it's so expensive to have kids. I know, I don't need to tell you how much you have to say for college, considering you have four of them. But it's just gotten so expensive. And I know my generation fewer and fear people are having kids. Is that a concern?

It is?

And so it was really interesting.

Is one of the questions they asked was, you know, among those who aren't going to be having children, like, why is that? And so my wife is a veterinarian and and you know, one of the top reasons was people are viewing their pets as a child. And you know, if you follow this trend in other countries, you see this in other places where individuals are kind of substituting having kids or having pets. And the number one sided reason often is just the costs and the time it takes to actually raise children.

All right, So we've just got a couple of minutes left here, and I am curious with all that is said and done, all that we've talked about. You know what is kind of top of mind for you guys, pigim you guys invest like, I don't know, what are you thinking about this next generation, this beta generation?

So you know, to be perfectly honest, Like, I'm not incredibly worried about about one year one year old saving for retirement, right, I think that it's gonna be it's gonna be an issue. I think, I think what i I'm what I'm I'm more focused on as individuals who are investing for today. So I spent a ton of time thinking about, like, how do we create solutions for individuals who around retirement, and and to me, it does get to this earlier point just about where you know, everyone's retirement is their own right, and for better or for worse, we all have to worry about the markets misbehaving about living a long time, and it's just it's just really really complicated. So I think, you know, at a high level, the job of all of us needs to be when we're young to make good financial choices, to save in our four one K and invest well. But but but the decisions you've got to make when you get closer to retirement just are really really complex. And you know, I'd like to think that things are gonna get easier for Generation BETA.

But it's probably the opposite.

And so hopefully, you know, we can learn from a lot of the mistakes for better or for worse that individuals make today so that future generations as they retire have things a bit easy.

I did a college calculator while I was away.

On break and oh, for what it's going to cost you for your kids?

Not pretty?

What's the number you came up with?

More than six hundred thousand dollars for a private if you want to go to private, sco one or for both for one for one?

Good luck?

Honey, all right, David, we got to leave it there. Hey, listen, thanks so much. This was fun, interesting and enlightening. David Blanchett, Managing director, portfolio manager and head of Retirement Research at PGIM, joining us from Lexington, Kentucky. No, like, that's one of the things we talk about all the time, right, the cost of college.

Yeah, it's uh, it just keeps up.

And up and up. Intimidate.

Well, see if you can keep going up and up and up. I know twenty years ago you were probably saying.

That, yeah exactly.

I don't know.

I don't know that I ever thought it, but we've talked so many times, like over the years about how it's been outpacing inflation and just continues to do.

So you're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Apple CarPlay and the Android Auto with the Bloomberg Business app, or watch just Live on YouTube plenty.

In our second hour of the weekend edition of Bloomberg Business Week, including the Perfect Guest for Foodies, we speak to an award winning taste tester on fine tooting one's palate so we can really really learn how to savor that flavor.

Plus Mark Zuckerberg rocking a nine hundred one thousand dollars watch. Yeah, that's like not that much money for him. Two hundred and fifteen billion dollars.

Yeah, it's worth just a hundred million dollars.

Yeah.

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First up this hour, It's a big luxury item that many of us probably won't get to experience in our lifetimes, and that is owning a private jet.

Owning a private jet, it's costly, it requires regular maintenance, You got to hire, you got to pay that flight crew. You've got hangar fees. There's of course insurance and other costs.

Those cost Carol.

They can exceed a million dollars per jet.

Yeah, that's a lot. So what if you don't have to buy the whole plane to fly private. That's where fraction jet ownership comes in.

Michael Silvestro is CEO of the fractional private jet firm flex Jet. It's a division of the privately held Directional Aviation Capital. It provides fractional aircraft shares and leases as well as jet cards. Flexjet owns, operates and maintains over three hundred aircraft.

So, just like everyone else, that pandemic brought travel to a halt. But coming out of the pandemic, we've seen a couple macro trends. First of all, people who had the ability financial wherewithal to fly privately before the pandemic who chose not to are all in now convenience.

They started and they've stayed with it.

Absolutely. Our retention rates of those that have come in after COVID are running ninety seven ninety eight percent. So if you have a sensus, just to give your sets of metrics, we were on a very very strong run pre COVID coming out of the pandemic. If you look at our book of business today from where we were five years ago, it's up sixty percent.

Wow, what do we talk? Who is flying? I know, democrats. Demographics have shifted quite a bit for you guys in recent years. You're seeing more and more young people. Yeah, now become part of the program. People in their forties. What's the demographic looking.

Like, Yeah, timm so coming the last The macro trend is younger, bigger, and longer. So a generation ago, a man or a woman would wait till maybe late fifties sixties to start flying privately. Today young men and women in their forties are all in. Secondly, they're not starting with small airplanes, you know, they're not starting small and moving their way up the food chain. They're in on nd supermit and heavy jets, and they're going all over the world. So the number of transatlantic crossings we did this summer to Europe were unbelievable. So people are just going everywhere.

Remind us and our pursuits team off and taps into this, but remind us of kind of the financials in order to do to be a customer on one of your jets.

Sure, well, depends upon it really all depends upon your missions, which can be easily defined as where do you go off and with how many people, and that kind of helps us create a profile of you and what airplane and services would best serve your missions. So you know, if you take a mid sized airplane a preet five hundred for member air for instance, for US, the buy in on a whole aircraft basis is about twenty million dollars, So you end up saying, hey, I want to fly one hundred hours a year, So that's about a two and a half million dollar check, and then your management fee and then your hourly rates roll up to for one hundred hours, you're talking about not quite a million dollars a year an operating costs.

So when you say fractional jet, you're actually owning a piece of the jet. Yeah, you know, Timothy, that's different than other fronts.

It is. And the model for us is is that we own and operate over three hundred airplanes. But when you buy a share, you're actually purchasing an undivided interest of a serial numbered aircraft that is part of our fleet. So as an individual owner, you can depreciate it, you can finance it, but then you allow other flexjet owners to fly on your plane and vice versa. So the master interchange agreement allows the operating metrics to work.

So let's go with that.

With that embryer two and a half million dollars buy in, and then operating costs that are associated with it, what are those typically?

Usually well, for one hundred hours a year, it's you know, by the time you do a management fee in an hourly rate, it ends up to be about eight to nine thousand dollars an hour.

So to make this it's you know, it's some people would say it's it's hard to make it worth it. You know, no matter how much you fly, it's about convenience, it's about comfort, it's about time not spent at you know, Newark Airport or whatever. Who's the typical profile in terms of like net worth that that make this choice.

Yeah, so there's really two i'd say major constituents that fly ultra high net worth individuals that are using it for a combination of business and pleasures.

These are people thirty million dollars and above. Typically networks. We think about network that's a.

Good benchmark and then what we've seen recently is a lot of corporate flight departments are using fractional flexjet to supplement their own airplanes. So they're not going away. People are still going to have aircraft in their flight department, but rather than buying the fifth or sixth or seventh one, it's a smarter way to deploy capital where you just engage in a fractional share in addition to the airplanes that you fly yourselves.

All right, so who's using your jet card?

The jet card? So we have a very robust business that we own in the family of companies called Sentient Jet. So you buy a block of twenty five hours, it's like a big gift card in the sky, right and so, and you buy them in a category of an airplane, not necessarily a specific aircraft type. So that would just be for someone who's an occasional user. That would average only about twenty to twenty five hours a year.

Okay, so not too much.

And would you see but would you see a person person the profile of that person is not an ultra high net worth individual. Maybe they have many millions of dollars, but they're not actually buying a two and a half million dollars share right in an aircraft.

They would be I would give you two examples. The difference would be perhaps they don't have the financial wherewithal or the net worth that a fractional customer would, But they might and they would just only buy a jet card because of their frequency of use. So you could be very, very wealthy. But you just hey, I have two or three trips a year, so it's not worth me investing in a fractional share and make that commitment. You just do a jet guard.

What's the biggest business for you, guys? Where do you make the most money?

Oh, fractional so flexjets model, which is very you know, there's all these ways to get on board. But the beauty of the fractional model is our recurring revenue. So once you're in the family, once you've bought or leased your share, you're paying a management feed. Just like belonging to a country club. Whether you go for dinner or play golf, you still expect a level of service when you show up. You want the greens mode. You want a wonderful menu. Same thing for us to deploy and to have on the ready three hundred airplanes around the world that takes a significant infrastructure.

It also takes pilots.

And one of the things that we've talked about a lot, I feel like tim with people in the aviation industry is the shortage of pilots. How are you dealing with that? And tell us what color you can give us?

All, Well, that's a wonderful question. I would tell you that. One of the things I'm the most proud of is that the Flexjet pilots on their own voted they when we bought the business, they were unionized, and they voted to have an atwill relationship with senior management as opposed to being represented by a union. So we have from the get go. Well that was about six or seven years ago. Okay, so we have a wonderful relationship with our pilots. A couple things. Number one, we are committed to having the highest paidlots in the sky. We also have we're very we really try to operate on a familial culture and so we end up treating people with great respect and care and we just we just we just we just know how to treat people.

Where do your pilots come from? All over?

They a lot out of the military.

So those are on the younger side. Do you have folks who retired from the big airlines?

We do, not a lot, but you know, because.

There's mandatary sixty five.

So I just flew with a guy that had been with us less than a year. He was sixty six years old, incredibly fit and competent, and so we're happy to have him.

Is it hard to find them though? That's what I just kind of go.

Next to the defance apply, Well, here's something else we did. You know, we were noticing what our attrition rates were, and we noticed a couple of years ago. Because one of the things that speaks to our culture is we don't have a training contract, so we take you at your word. So if you apply and get accepted as a job as a pilot for Flexhut, we don't we train you. We invest the money in you, and you are not obligated at all. There's no there's no payback in case you leave us. So a lot of people were negatively profiling in us, coming, getting trained and then leaving after about two years or so. So one of the counter intuitive things we did was we raised our minimums. So while everybody was in the face of a pilot shortage, you would think, well, you'd lower your minimums more people. We were raised ours to three thousand hours as a minimum.

So that's what you need to have under your belt in order to become a flexjet pilot.

Only fifteen hundred hours, so twice as much as what the industry calls for. And what we have attracted in the last two or three years since we've done this is someone who's more career minded that they want to come to flexjet because they appreciate the culture, the compensation, the work rules, the environment, and our retention rates had plummeted since.

Where were they going when they were leaving to the airlines. What do you find when when somebody who owns a fraction of a jet wants to use that jet, but then somebody else is using it.

Well, that's the beauty.

Of the model. That's not their problem, that's my problem.

Does it happen a lot?

No, No, we end up having this the model. So we as a company, we own about twenty percent of our fleet ourselves. It's called core fleet, so we don't commit out about one out of every five planes, and that's what we need to avoid.

What you just asked me, can you use data AI or something to help you figure out kind of what.

We're just curious.

Yeah, you know, we're still We have a very sophisticated scheduling program that we created ourselves, but then we also add very experienced schedulers that look at the board and say how we move things around to make sure that we take care of our customers.

I can only imagine there must be like a room or I don't know.

How it is so Actually, no, it is a room. It's a beautiful, brand new, just year old Global Commands that we built in Cleveland, Ohio, which is our headquarters where we have visibility into our entire fleet around the world.

Pretty cool stuff. Mike, thank you so much.

Thank you for having me very much, very Christmas.

To both here.

Yeah, look forward to talking again in the new year.

Thank you.

Mike Selvestro, Chief executive Officer, a Flexjet joining us right here at our Bloomberg Interactive Brokers Studio.

We love talking.

Play.

This is the Bloomberg Business Week Podcast. Listen live each weekday starting at two pm Eastern on Apple Corflay, and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our Flagship New York station. Just say Alexa play Bloomberg eleven thirty, Carol.

I don't know about you, but when I'm giving gifts these days, I kind of like to give people things they.

Can eat or drink.

I love doing that too, our Bloomber appreciate you want to get something that you can drink or eat.

I do especially eat eat.

Like when you brought cookies last week. That's right to everybody in the office who was here.

That was kind of fun. She brought seven seven different types.

Of at least seven different kinds. Yeah, and I didn't even make them.

All like they were so good and you're still thinking about those.

Well, things you can taste. That is something that Mandy Naeglich is her specialty. She's a writer and consultant working in the beverage and travel space. She's also the author of How to Taste, a Guide to Discovering flavor and Savoring Life. Welcome to Grace, So great to have you here. Tell us about Wait, your certification that makes you kind of an expert when it comes to taste.

You've got a book, Yes, got a book, and I do have several certifications. I actually I am a certified taster, which means I can taste all different specialty compounds. But I'm also a ciserone, which is a certified beer taster and server.

First of all, how do you even get to do that? Like, what's the training involved to do that?

Lots of sniffing, lots of slurping, lots of memorizing things. I can literally smell different sulfur compounds and they put them in front of me in coffee and chocolate and beer wine. They'll spike something and I'll be like, cis three hex and all that really fresh.

You walk into a room like our studio and you're like, oh my gosh, like I'm smelling.

You know, I can smell everything, but you guys smell great, so you don't have to worry too much.

But do you I mean, is this something that anyone can do? Or do you have more sensitivity than other people.

So everyone can train it. There's actually really cool studies that you can grow your old factory bulel, which is how we understand smells within two weeks of training, just sniffing, really concentrating, like we're going to focus on these wines. What are you smelling? Trying to remember it and you'll change the way that you taste in two or three weeks.

Very cool.

Why should we do that?

What do you get out of learning how to kind of like think about smell when you're eating or drinking and so and so forth.

Why is that so important?

So think of watching a black and white movie, like that's what you're eating like right now, and then think of it in color. Think of all the depth the way that you can relate all of your memories as you're enjoying everything that you taste. It basically makes every sensory experience more deep and more memorable, which is what we want to live life for.

Is it hard work for you?

Though?

In the sense of, like when you go out to a dinner with a friend, you're not necessarily enjoying it as much as somebody typically would because you kind of feel like you're working.

So I've been doing it for so long that I believe there's a place for every taste. So even if something is a little, you know, not my favorite, I totally understand why it's there and I can appreciate what's going on. I think everything that we experience is just a memory we're making, and there's a place for everything.

Like somebody's like, this tastes so good. You're like, actually, here's why.

It's so subjective though, even our genes, our genes, certain genes.

But come on, Mandy, there's times like no, no, it could be less.

So that's legit.

There's some times when we get to this red wine, if you don't have the right gene, you might literally just not taste the floral notes. I love wine, and.

So tell me about like, all right, let's start with this first wine and kind of what we should do in terms of understanding the smell and why it's so important.

And what we do, what you do smell when you So this is.

The garzan Albarina from Uruguay, which is a pretty cool wine region. And what we're going to do is, first you just want to smell it a little bit further away, Okay, just see what you notice. First. This is going to be your top notes, the most powerful notes in the wine. And then we'll get closer and get a little swirl and smell again. Are you guys getting some fresh fruits on this? This is actually the new vintage that twenty twenty four gars on. I feel like it's so melon forward. It used to be a little bit more pair and all.

You're getting melon.

Oh I got melon?

Yeah, you get that candle up instead of the pear. I don't know, nice all right, so we can get a little taste.

Okay.

I love this wine because it's not too intense. It can pair with pretty much any food. So I feel like you can show up at a party and no matter what your host is serving, you're not gonna overpower their dinner. It pairs with everything. And it's you know, under twenty dollars, So you could bring two bottles, one to serve, one for them to keep later and still be a really good guys.

Are you finding as you do this that because we talk a lot about this that there are, yeah, some really expensive wines that are incredible, but more and more, there's some great offerings that don't cost that much money but have the smell like like all of that is there.

Right, We're getting all this lush fruit on this right, which is what people look for in like a savion blanc. The savvy b girlies out there. But for the price of a good Savion blanc, you're you're gonna be paying way more than this, you know, under twenty dollars price limit, and this has got all the complexity of the right intensity that you want to be paying for that white. So you're getting the flavor without the price tag, just because it's from a little bit of a different region. It's from your wine in South Americas.

Are you ever working with a customer and you're like, you do this for a winery or so and so forth, and you're like, this is terrible.

Never say it's terrible. I will say there's seven different ways to smell something, So you know, sometimes we have to get into six and seven before we're really enjoying it and praising the wine. Okay, this one, I feel like right on the front, it's lovely. It's so lush.

I'm not a white wine drinker, but this is lovely.

Yeah, and great for a party, you know, if you're a red wine drinker.

Though I am a red wine So tell me what you've got here.

So this is the rio Haa from Faustino and they are kind of the rio hog producers there. This is the twenty fourteen. It just hits shelves.

So we're just talking about it, but are we smelling?

Do you get that big plumb note?

Yeah?

The last vintage did not have all these like black dark fruits like that hurrd. And the nice thing is if you want to pick this up and taste all those dark notes, they come with these little like wine markers right now, so you can pop it on your glass. It's on the top of the bottle. It's like a little gift, so you know you're not gonna sip my brown Fastino marker. So you know, as you're going through the night enjoying your glass, you don't one thing you can worry about with tasting. You know, if someone else's bad breath was in your glass, you're not gonna have to worry about that.

One.

I have to say with my family large family, like we all have our little like charms that we put out our glasses to make sure like we don't mess up, Like that's my wine.

We have that too, right Yeah.

If we're somewhere where we don't have that, we use different colored rubber bands to you.

Really okay perfect, And it's such a small little gift. Like I think when you give people wine glasses, you don't know what's in their cabinet, and you can just be like forcing them to store something else, like a little extra wine charm isn't gonna take up your door space.

So tell us again, like what we're getting here.

Yeah, so we should be getting some like really dark fruits on the nose and then yeah, you guys just took your sip.

Sorry, gents a goin with this.

You get like a little a little spice at the end, right, like it kind of ends up almost a bit of black pepper. And what we'll sit on your tongue after is kind of that powerful spice note and that really stewed plum.

What is this good with?

So this, you'll need a little bit more of an intense food, so kind of like some red meat eat things like that. A really rich cheese would be so nice with that, because you get that nice tannin at the end, So something like exactly something like a gouda and then a sip of this after it's gonna kind of balance it out perfectly. You're not gonna have too much richness on your palate.

So it's a thirty seven dollars bottle of.

Wine, yeah, under forty bucks.

Yeah, that's great. Yeah, and I don't know if we said that the garzan was seventeen dollars.

Yeah, under twenty dollars.

We got some white wine, we got some red wine. We got a little bit of bubbly, Carol.

We have a little bit of bubbly. And listen, let's go there and tell us what we're so.

First I want to say, just look what the shape of your glass too? You say how it's a little different. Yeah, with bubbly, we're gonna have rims that tip in a little bit because the bubbles are actually forcing aroma out of the glass or out of the solution, and it's gonna all collect right there. So this is our special champagne glass. Don't let anyone serve you in a flute, okay, and really why because it doesn't collect that glass, right So all of your aroma's just shooting out and there's no way to get your in there.

So I was just going through glassware.

At home, and yeah, so get rid of the flutes unless you're doing a big toast where no one wants to taste the champagne, like youve one hundred people, that's what a flut is good for. But if you're trying to taste this pole rogair.

Well, this is what you want.

You want to get your notes okay, so all right, I know, all right, we're gonna continue that it tells what we're smelling.

So this is pol rogair, And unlike a lot of champagnes that have those really bright apple notes, this is like a little buttered brioche. It's a little bit sweeter, and if you taste it, it has a lot more body than a lot of champagnes. It actually is three equal parts of three different grapes.

Oh my gosh, that's good.

So you get that structure that kind of weighs on your palette a little bit, and I think sometimes when we're sipping champagne at New Year's it kind of zips right off your pallette. It's apply and it's gone. I love that this kind of hangs around and stays on your palette for a little bit.

That's nice.

And as a gifting champagne, it comes in a beautiful gift box and it's under fifty five dollars, so a lot of those gifting champagnes will be over one hundred. This one, I think, has the flavor, has the complexity, and hits you at a really nice price point.

The first bottle of this or this brand sold in eighteen forty nine.

Yeah, one hundred and seventy five years ago. Sticks there, Yeah, exactly.

You do coffee, you do wine, you do beer, chocolate, chocolate tea.

What's your favorite?

Oh my favorite?

Oh good question.

I mean I do love bubbles, but probably my favorite is getting into like the dark spirit space, love at love, a little whiskey, tasting a little dark rum.

He explain how your business works, like who brings you in and who you do consulting for.

Yeah, I work across restaurants, bars, I do things like private jets. We were just had a private jest, So I'm working with those companies, And basically what I'm doing is making sure every palette that walks into the door is going to have something pleasing to them. So whether you like sweet sour, really intense, less intense, We're going to make sure the drink's menu or the dessert menu offer something for everyone. And what we don't notice is the way that we all taste is a little bit different, right, So just genetically, there's certain flavors you can't taste. There's people who think everything is super bitter. So I kind of know the lay of the land, what percentage of people are going to think things are really bitter, and I make sure the restaurants know what I know as well.

I was just having this conversation this week with my wife and her parents about cilantro because it's like this very polarizing thing to put on tacos, for example. Some people think it tastes like soap. There's a whole portion of the population. There's all portion of population. Things taste fine. Why does stuff happen like that?

So this is totally genetics, and the more scientists dig into our genes, same thing. A third of people can't taste violets at all. They don't know what they can't smell. It smells like nothing to them. Wow, you can live happily your whole life without smelling violets. But when we know that, you're not gonna put a violet cocktail on the menu, right, Same thing with these jeans in cilantro. There's also bitterness. Like I said, there's five types of bitterness, and there's twenty five percent of the population can't taste three of those types. So that is just not going to be bitter.

You know.

In the break, we were talking a little bit about and we're talking so much about smell and how it impacts us, but the color of a store, restaurant or something. And even in your book you talk about, you know, throwing your next dinner party where the.

Thermostat should be.

And I just like, what are the things that we need to think about, like when we're serving food or wine or just kind of that setting, especially something like a dining room or something where we're.

Going to be eating and drinking a lot.

Yeah, going back to the Fastino Rioja is actually a perfect example. See how it's like so opaque and you kind of can't see through it. Yeah, our brain just sees this rich color, and we immediately already think ooh expensive, ooh fancy. There's a lot of wines that are great that have a lighter color, but our brain just sees this rich red and things sweet. I want to taste that red is one of those colors that we reliably can trace to being that we crave it and that it's a little bit sweeter. So knowing all different things, you know about how you want to serve a wine, how you want to serve a cocktail. Certain cocktails if they're not so attractive, if they have that kind of pale color. We'll put it in an opaque glass so people can't see what it looks like and they're only getting the flavor. You don't want to let your eyes play tricks on you that like kind of play.

Yeah, I play the science around smell. You mentioned that scientists doctors are starting to associate loss.

Of smell with certain ailments.

What's the research there, Yeah, so the size of your old factory bowl was actually a really great indicator of overall brain health. And scientists at the Monell Center have been researching smell loss and they think it's the earliest sign of dementia and Parkinson's. But there's no good consistent test for smelling. You know, you don't go into your physical and smell of lemon every single time, so a lot of people don't self report, oh, things don't smell as strong to me. And really, what scientists are starting to push for is a physical at your physical when you're little, you start doing a smell test and they can trace your smell your whole life. So when that starts to drop off, you can start kind of combating or testing for any kind of brain deterioration. Also, people with large olfactory bulbs weren't as affected by COVID and they didn't tend to get long COVID. Those studies are still coming out, but really, just focusing on taste and keeping that little part of your brain healthy seems to affect your brain as a whole.

Yeah.

No, I feel like the more we learn kind of how it all works here is certainly our body. Mandy, what a treat. Thank you so much for Tim and I. We're getting ready to head out for the holidays. We won't be around next week, although there'll be a lot going on at Bloomberg here. But what a great way to wrap up our week Friday, So thank you so much. The little toast, A little toast of the holidays.

A little I'm trying to think, which should I like, pull out hands.

And yeah.

You can have one.

Yeah, exactly. You can toast while you're drinking.

This is something.

Yeah, I'm gonna do a little bit of both.

But first we got to wrap up our show.

Mandy Naeglich, as we said, check out our book. She is a consultant works in the beverage and travel space. Her book has How to Taste, a guide to discovering flavor and savoring Life.

This is the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern on Apple car Play and the Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa played Bloomberg eleven thirty.

Meta out with News this past week.

But what we noticed was Zuck's fancy and pricey.

Watched him more.

On that and in and what feels like a few pursuit stories that are like tailor made totally for you for me, the best coffee machines for the perfect pour over yep.

And it's five o'clock somewhere and in dry January, Well, you could have some coffee. But it also means it's time for a mockdal You know.

What that means.

It's time for Bloomberg Pursuits. Here with more the editor of Bloomberg Pursuits, Chris Rouser. Chris, I want to start with the watch scene around the world. Of course, as Carol mentioned Meta in the News for a host of reasons over the past week, but you and the team over at Pursuits around the World couldn't keep your eyes off that time piece that Mark Zuckerberg had.

Well, well, well, some international news happens and you need to call me to come talk about it.

That's how we roll.

Here and everything going on around the world. When we got to go to you, what's up with that?

So yeah, so Mark Zuckerberg made the announcement about the end of fact checking across Meta and Andy Hoffman are or in Geneva. You know he was in the video. He's just sitting in a small room. You can't see where he is. He has a little necklace on, you know, nondescript clothes and a big watch. And Andy Hoffman and Geneva emailed me and the news editors and said, I know that watch. That's a very expensive.

Watch, like right away, right, yes.

Early in the morning. And I was like, let's do it, Let's do the story.

Can I just tell you we talk about expensive watches all the time, but this is something special.

Yes, So this is a Grouble four Sea hand made one watch. I wrote about this watch in twenty nineteen when it first came out, and we put it in Business Week because it was so unusual. Ninety five percent of it has made my hand, including tiny, tiny, tiny wires that are the springs that make watches work. I don't. I mean, it's incomprehensibly to me how they do it. My hand, And so we shot it for Business Week and there was only one because they only make like two a year and it was very hard to get it. But this is like a total grail watch for people, and it has been since they started making it. There's only handful in the world and they cost almost nine hundred thousand dollars.

Okay, a pretty pen two or three. If you're worth more than two hundred billion dollars, like Mark Zuckerberg, you can totally do this.

You know.

One thing that we've noticed about Mark Zuckerberg over the last couple of years is his change in style. He's sort of embraced a different look than that.

Can we say he's getting fancy.

The vibe is not fancy.

Yeah, I don't know if that gold chain is fancy, but but he's kind of trying.

To do a watch guy.

Yes, he has so it's it's not just this that's part of his collection.

He is. He has this growing collection.

Yes, he has protect Phi Leaps, he has f P Jorns, which is another like sort of cult watch collector. Brand, although they make a lot more of those, but these Grooble four seas are really only available to a very small number of people. They make about the company as a whole only makes about two hundred and fifty watches a year. Robert Downey Junior one has one. Sam Altman from open Ai has won a different one, and these. We did a story about this company earlier in the year and the headline was these watches used to be the of the ultra rich, not anymore. And it's because these tech people are wearing them and you see them around and they're so big, like you can't miss them.

Does it assume that Mark Zuckerberg has a deeper appreciation for really finely made watches. I mean, there are lots of watches out there that you can spend money on, but this is something else. Or is it just that he can, you know, help me understand The response on it.

I don't know Mark personally, but.

Come on, next three of us.

The response on the internet.

Has read it and say.

From watch people is that like, oh, okay, he really gets it, like he understands what, you know, what like a really cool, like a very interesting important watches rather than just some other watches that are just sort of expensive for being expensive, the watch nerds applaud this, this, this, this ownership.

Well done, well done, it's so funny. First of all, can I just tell you love my co host. I never think he drinks coffee.

I do.

Well, It's because I only have one cup a day.

At home, and I'm finding out that it is not just your ordinary cup of coffee. You are kind of a coffee guru. You care about like your devices in it, and like not only that.

I mean I spent about an hour cleaning the espresso machine last night.

I'm not joking at all.

Wow, exactly.

The machine that I have doesn't look like any of the machines inside the Pursuit section. Mine's very old school. There's like this tech enabled approach to coffee that has taken off over the last couple of years, in part thanks to some folks who've quit Apple and been like, I can make a better mouse.

Trap, Yes, make a better coffee filter. So we did a story for this coming New Year about pour over coffee machines. So you have an espresso machine, right, So, but pourover is for a lot of people. They like waking up in the morning. They like the ritual of making a single cup of coffee from a single filter, pouring it over slowly, and they also believe that, like for a normal drip coffee, this is the only way to get all of the apricots and essences of toast and whatever.

People say on the I remember what it was like before I had kids too, Okay, because that's how people who.

Don't have little kids enjoy.

Wait, it wasn't quiet where they are in the morning.

Yeah, am I just a peasant with my French press?

Yeah right, I am, you're kind of I mean, French press makes good coffee, and it's good. That's good for making multiple cups of coffee, So like when people come over, we'll do that anyway, sorry, Chris.

Ahead, Oh yeah, well no, I mean this is tim you know, I think you actually know more about this stuff than I do. But these pour over machines are basically doing what you would do if you did pour over on your own, which is like in a lot of cases, it's a single a single serving worth of beans that are ground like right there. You grind them and then you the hot water is poured over, and you know, you can choose the size of the beans, the size of the grind, the heat of the water. But basically it does kind of what you watch a lot of like Barista's constantly doing, which is taking the port of filter, filling it with beans, moving it over, putting it on the Esprecial machine. It's like that, but for a pour over coffee.

I mean, you need coffee to make a cup of coffee.

But just the movement of the filter from the ground beans to the where the hot water comes from is a big part of what these machines do for you.

It does take a long time for an individual to do this themselves. And Carol, you and I were traveling a couple of years ago somewhere I don't remember where it was, and on the way to the venue, I stopped to get my first cup of coffee for the morning, my only cup, and I ordered a pour over and they told me we don't do pourovers in the morning because they take so long. Yeah, we're only doing drip coffee right now. And I was really disappointed because did you walk away.

In a huff?

I can't remember.

No, no, no, I still ordered it.

He's pretty friendly, but it just it goes to show that Yes, it's a very manual and laborious thing to do. And machine they've been for years. They've been trying to get machines to make us good of a cup of coffee.

Have they pulled it off?

Yeah?

Me so.

Matt Cronsberg, our writer, who is a total coffee grew as well, much more than I am, says that these are legit very good. Two of them. One of them makes just like a single serving, and then some of them make batches. One of them you can actually set a timer. Like when I used to drinkffee in the morning, I just wanted it to be ready when I was awake, and one of these will do it. So the x Bloom Studio, which is a new device from this company, x Bloom. It's four hundred and ninety nine dollars, and this is from the Apple Alum that you mentioned a lot. There's actually a lot of Apple Alums that have gotten into this space. And then if you want more of a batch, you can use the Fellow aid in which is three hundred and sixty five dollars, and that comes with like small and larger brewing baskets, so you can do and you can do the preset timing for that one.

But they do a lot of stuff, these machines.

Well, they also do blooming, which is something that I hate that I know about.

But because you've got a coffee guy, No, I am a.

Coffee person, but I stop drinking coffee in the morning.

So what is blue?

But blooming is when you pour hot water on beans, on ground beans to release the carbon dioxide before you actually brew, before you actually pour it through to filter through to brew your cup of coffee. And so if you some machines do it, these do, but if you do it yourself, you'll watch you pour hot water on the ground beans and it sort of bubbles, and that's the carbon dioxide releasing before you can get like an even more pure expression.

Let's talk about dry January because we actually recently live on air, had someone bring in a couple of bottles of wine.

Yeah, Libby Wines came in a new company out of northern California. They have like a heritage and wine making and.

Okay, this is really terrible because Tim and I have tried some non alcoholic stuff and it wasn't so good.

No, it's mostly bad.

Yeah, this was good. We enjoyed this. Yeah, but it's happening, right.

It has been happening for a while. People have not figured it out until I would say the last year or two in terms of like they've been figuring it out for a while, but in terms of what you're going to get at a restaurant or a store, I've only tasted stuff that's decent in the like last year or two. But now their wine, particularly has gotten pretty good. And we kat Odell, who's like a very very cool food and drinks writer, wrote this story for us about how these companies are figuring it out. And in the year that ended in June twenty twenty four, zero proof drink sales rose twenty four percent to one hundred and ninety nine million in the US. So you know, this is a big growing thing, and people not drinking is affecting the like LVMH, like Mohett Hennessy like that. A lot of the big wine and spirits and champagne companies are softening because.

Of this, and are they starting to then like say, we need to embrace this, right, which is kind of cool.

Totally, you guys highlight a handful of cool stuff. I got to tell you, I haven't tried one thing that's on this list.

A lot of this is new.

Okay, yeah, so that makes sense. But what it?

What it?

What I've noticed is that you're actually getting uh, non alcohol versions of full cocktails. Like when I go in order a mocktail at a restaurant, it's like, it doesn't it. It's not trying to be a nonloo non alcoholic version of a real drink. It's something completely different, basically on a different part of the menu. That's true, Yes you can.

I do like those those are good ones that are made in Brooklyn.

It's pure sugar.

Yeah, it's something.

We looked at the one like that's the thing that we know, and.

It was it.

The Libby wines had no added sugar.

You know what I thought was really interesting. I have no idea of all the stuff that's going on. A couple of things that caught my attention. Elderflower, which I have done, kind of the alcoholic version. Yeah, it feels like it's having a moment. There's that, and then there's like Alice Cooper getting involved.

Who would have thought, Yeah, this is a great example of the kind of pre mixed thing that you were talking about. Tim, and I have to read this from the paper because there's so many words in this name. But it's the whistle Pig, whiskey, sex, drug, rock and roll, dry, old fashioned, And it's a collaboration between whistle whistle Pig, which is a whiskey maker, and Alice Cooper. And apparently it's great. It's a sort of a blend of alcohol free rye whiskey, Cordy steps, mushrooms, shassandra berry.

Interesting stuff. But it's Alice Cooper, so you'd expect like baby some interesting.

So the fact that whistle Pig is putting its name behind this, I think is a big deal because whistle Pig makes a whiskey that a lot.

Of people really like.

Yeah, correct, So they're not going to want their name associated with something that is, yeah, probably not up to par with what they're known for.

Yeah, there's a risk to it. Like you sure they want to get into this market. Sure they want to put their name on something that so that an na drinker can have it on their bar, but like they can't have it be bad. So you know, they took time. The brands like that have taken time and care with figuring this out. The other thing I really like from this list is French French Bloom, which is the champagne. Champagne was a little easy, faster to get to tasting decent in the non alcoholic space. I think because you got the bubbles. It's sort of Chris, But this French bloom, if you have it, it's really great. It tastes like champagne. It is champagne, and it does it has you feel just as celebratory when.

You're having it.

It's not cheap either, one hundred and nineteen dollars right, yeah for a bottle hundred and fifty militers. Okay, I'm just saying that's enough.

It seems good.

Got to say it's a great list, So Tim, it's a list you need to work on it. We have to get more of those guys in studio and gals and then also have christraps.

Okay, I'll buy the shoots Patagonia.

Yea collab.

You can get that, you know, one hundred dollars.

Chris and I are doing that Champagne.

I'll bring the nine hundred thousand dollars.

Watch all right, all right, Chris, thank you.

That's Chris Hrauser, editor of Bloomberg Pursuits.

And that wraps up our weekend edition of Bloomberg BusinessWeek Fromloomberg Radio. Thank you so much for joining us.

I'm Tim Steneberg and I'm Carol Mass.

Have a good and safe weekend. Bottom up, so everybody.

This is the Bloomberg Business Week podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from two to five pm Eastern on Bloomberg dot com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal

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