Transcript
Why? I can't wake up live? Oh, we actually are live. Yeah. All here from board sabermetrics. HQ. Is that what you call this office? What is this office? Is it free flow? Yeah, we're free. Float, its headquarters. We're actually a headquarters. All of us. I drove down to hq2. It's a Thursday game show edition of business pants joined by Well really, we're all here. I see the money Whisperer. I see the data Queen I see you here. The the Lord. Yes. And today's reusable back of material materiality, I already used that joke. Wow, recycling. I like recycling cold, March 16th 2023. Oh, we only have one quiz, show a quiz show. Larry. I was excited. Now, I'm not excited and let's be fair. Yeah. Because Larry Fink was Joe, let's be fair. This quiz really was made for Ari because Matt Deciphers, all of my quizzes. So Ari. Yeah, you will answer first for every question. I like it, that way, okay, he doesn't poison my brain. We tried something different this weekend. Okay. First of all, Larry Fink's CEO. Founder of BlackRock put out his annual letter Yesterday. I painstakingly went through all of it and try to generate some interesting questions, but of course our pre-production assistant, Jesse has already told me that it sucks that it's boring. It does suck and no offense but Jesse's not exactly. Dave, Chappelle oh, That's rough. So that's so this is really wanted this hurts. She really slam me on this one. Is it usually this boring? No I think I do a better job. I'm tired. The letter is a very letters, born. Yeah, then we're fine and let's be real. We kind of knew the letter would be born because BlackRock has been the target of all the hate, and he's scared. He's Running Scared. Be on their best. They had to scrutinize every single word. He had to be so business, like, do not say anything, you'd be so business, like, are that in the picture? He's wearing four neckties. Those prove that he's a businessman. Yeah. Who's The CJ. Oh, that's DJ diesel. Yeah, David Solomon. Goldman Sachs. He doesn't have a. Well, I'm going to mention him. Subscribe that song. You know what we should do? We should like, there should be a subscription service for dumb CEO letters. I would listen, I read those every day. Actually, could we change our Friday theme music to one of DJ Diesel's songs and just hope that he listened? Yeah, it's no. But I'd like to be seen lawyers right? Listen, I hope I want that to happen. I want to be noticed. You just be excited that somebody's using his track? Yes. No. He was at like Lollapalooza or something. He's not, he's not excited. All right. So here's the twist. This week is that Jesse helped me write the answer to this multiple choice test because Matt has already figured me out so many times I'm hoping same question, I'm hoping That this will solve for something. Okay, you don't know what? Yeah. Yes. All right. Start and we're going out to lunch after. So should the loser pay for lunch? Jesse says, yes. All right, Jesse. So riveted by this that she's already on her phone. She's doing social ready? Yeah. CEO BlackRock annual letter. Here we go. First question. In the very first sentence of the letter. He says, blank. Plays a big role in my life. Blank plays. A big role in my life. What is it? Didn't. Just open the letter and read one sentence is it You got four choices, is it music? Philanthropy, his dog or patriotism? What plays a big role in Larry thinks life? I would have to think Neither of those things that's actually a good. That's why. Okay, can we go again music philanthropy, my his dog or patriotism. This is his letter after getting so much crap. Exactly. Yes. After getting so much crap. What is he gonna lean on his? What is he gonna make up plays a big role in his life? There's nobody Matt music. It's probably true. You probably do. Remember this part of the letter, right? I listened to his favorite band. Talk talk. So okay. He just ruined question number two, Haha. What is Larry's favorite 80s band? The Top can be. Honest about music. I don't Have heard the one of the songs Matthew have you for the rest really of the offset. Oh yeah. Can I can I guess properly that they suck or they actually good. That's kind of like them, really? Okay. I mean, look, they're heard of them are. No, I'm over two, I know the ones song, right? Okay. And the rest of the songs could suck royalty but their classic like Electro pop, early 80s music, the UK, like you okay? Yeah, I couldn't even like tell you what Madness. Yeah. It's like Depeche Mode. Okay. Not like gang of four, not quite okay. All right, that's what my favorite band. So I was worried that Larry is favorite band like one of my favorite know, it's not gonna be Bad Brains. He's not listening to that. So that was number two. All right, so I'm technically, I'm gonna say that. You would have gotten that wrong. I think you would have guessed. Talked the Talking Heads is my guess. You, what were the options, what were the Talking Heads? Guns, and Roses, talk talk. And I think the one that most people would answer is Bon Jovi. I can see him liking Bon Jovi, no way. He philanthropist. No, no, no, no, no. How many hands nobody actually, says, people like John was the Creed of the 80s. You mean, the next? I love Nickelback, and no from the record. Please, let's move on to Larry. Fink's, 2023, annual letter, How many sentence is before? He says the word fiduciary, Did I say it wrong? If you wheeler is it the very first sentence? He says the word fiduciary. Establish. It's not very first sentence. No, I well why it could have been a semicolon. It could have been a semicolon that sentence. Okay, fine. Whatever. Imagine that mashup, when he's like music plays, a big part of my life semi colon. So does he Could have been an em dash three times in sentence two. Uh-huh, in the 10th sentence or he actually does not say the word for sure. It does not say the word match. And now he says it in, like the third sentence, what was it was the first sentence three times, a sentence to the 10th sentence. I'm going to three times and sentence too well. They both go. I'm surprised I thought Matt was gonna get that one, is the 10th sentence. I mean, that's just random sentence. I was surprised. I actually thought that would be a lot higher know, lean on that. Know, look, if you're opening with music plays, a big part of my life. If you're opening with bulshit you think narrative, right? You need to then talk about the music, you're a real person, then you need to talk about like how it plays a role in your life and then somehow you've got a transition, there's a whole transition sentence in there that gets you into a place where you can say the word fiduciary. So like you just have to think like a writer for that. Yes, for the shock Factor here he didn't. I like it, I like, well, don't forget. See wrote the she did the answer, so don't decipher me this time and Vivek. You can't take credit for this letter, because if you would, if you would actually take in credit for how we wrote this letter, it would have been the first sentence know. Well, that's that. I think that strive already wrote a letter to Blackrock like, saying that it should have been the first letter if he cared about shareholder value and all. So Dei is to blame, in fact, I think that Vivek and strive is putting out a personal use today, taking credit for Black Rock the company. I know well, they said black is racial bias again. What all the shareholder returns over the years? That's because stripe pushed them but he's since actually that he likes talk talk is because their white stripe said, you know, you should like only the number one hit of every year because that's when excellent. That's meritocracy. All right, so far are I think you have zero points? Okay. Number question. Number four. Here we go. He describes two types of BlackRock clients who are making the transition to a low carbon economy. Oh, those who want to invest in ways that seek to align with a particular transition path, or to accelerate that transition. Okay. And those who, Choose not to. Make far off pledges challenge, the severity of the climate change crisis. What wait, what's the question? Oh, they describes two type of. Okay. The ones who want to do that and the ones who choose not to. Okay. Matt. Okay people I'm confused with the quote, the poorly awarded question. I take the blame for this one, not Jesse is a poorly because I'm just trying to answer. I'm just trying to create a conversation here with the answer. Is it what is he say about those two client types? Know he just describes two types of clients. Those who are making this tradition to a question mark? What's the thing I answer the second time. Yeah that's the second look I deserve this point. I don't know. Okay, and this because Ari got it right and got the point I just thought it was funny that and all this after all the backlash against ESG that's just he just describes, you know, some people are interested in transition to a low carbon and colony in some aren't and we catered to both that's it that's his big reveal surprise. Actually if that's verbatim I'm surprised he said the word accelerate in there because that's suggests Forcing change. And that, that's well, that's one of the clients. One of the clients aggressive Larry for this. Remember, two years ago, he was basically begging the world to stop destroying the Earth. Yeah, he was. Well, that was different Larry. Okay. All right. Well, that was a failure. Jesse, we can talk about my failure later. Yeah, you failed horrible, but just drive. Are you on the board, right? That's a point for Ari. It's I deserve two points. That's a weak point. Number question. Number five, speaking of companies plans to navigate the energy transition, Larry says that as minority shareholders black rocks I can't I can't talk. Black rocks. Role is to educate other shareholders. To not tell companies what to do. To influence other shareholders or to send strong signals to companies through their vote. What is black? Rocks role as a minority shareholder for, I'm gonna say to send signals. Matt for the two for with companies plans to navigate the energy transition. What does Larry say that blackrock's role is? Well, first of all, the influence is too aggressive, they would not influence, right? Because that that suggests like some sort of coercion and there's no way he's going to do that and they would not educate because that similarly suggests, something like something that women would do. Well, what are the other two options, not tell companies, what to do, send strong signals to companies through their vote. Definitely not tell companies, right? And that's no way that's for. I don't understand not to tell them what to do. This is Larry's way of saying, like I've ever heard. We had a video right now. I don't know how to capture this, but this is Larry's way of being like not my, you know, and it's like, oh yeah, we're just here. We don't know what's going on. No, this is this is It's he's now defining everything in the letter by a negative, right? Like BlackRock doesn't like stands not for this black rock also does not tell companies what to do, but he's just saying all negatives. We're he's got a black rock, doesn't help like any one client, it helps all of them. We have them vote for them. If you're not sending a signal or you're trying to Well, it what? I guess. What he's saying is that their role as a minority shower is to is nothing. He also, you know, it's a little bananas to call themselves minority shareholders because technically he's correct. They are 50%. Yeah. Um, but BlackRock owns the largest percentage of almost every company in the entire world. They are the opposite. Well, thank god Nordy. Thank God. We have drag show haters in Tennessee. Now telling BlackRock how to run their business because they don't know what they're doing, finally. Here we go. Number question. Number six is part of that and energy transition. To lower carbon emissions. What is Larry say that oil and gas? He says, it will a become obsolete by 2050. No, it will divert necessary action and attention from the transition to a low carbon economy. He says oil and gas will see significant impact, or he says oil and gas will play a vital role in meeting Global energy demands through that Journey, Oh, of course the last one. Ding, ding, ding. Ding ding. Yeah, so he's, there's no. So he's fooling on oil and gas. So for for at least 27 years, he's basically just like, thank God, we have oil and gas, right? Yeah, in fact, actually know that the 2050 I made up, he doesn't even use a year. So I so whenever this transition, the journey this journey could happen until the year 2020 2250. That's so far four of the questions on this quiz have dealt with the low carbon transition. My guess is that, that is too paragraphs out of a seven because the rest of it was page, document was the rest of it was just pure nonsense. It was just like a, we have a product that does this and we know we have our percentage point. That does that, that's what I want. I want to know, like, Which percentage I want. That's what I thought the quiz was gonna be how many percentage points does Larry Fink think. Number seven, speaking of the alternative democracy that is shareholder driven and what way does. Larry Fink think for you float and board, saber metrics, will benefit Humanity, okay. Hey, there will be a more informed shareholder voting pool Be shareholders will have the desire and data to vote, according to the values. See, the industry would benefit from more proxy advisors, who can add diversity, of views, on shareholder issues, or D shareholders will feel empowered to use their voices and vote, driving greater equity in business. Those are mouthfuls, but that's like, Full set. This is just basically a sales pitch for us so don't worry about. Yeah, what go ahead. There's only one answer. Go. Yeah, go ahead. I thought Ari's gonna first every time are you seems over by that question. Yeah, voting. He doesn't even believe in it, really? Yeah, just say that they don't do any of that, right? But something about shareholders their own values, okay? You're going with the values, man. I think, Matt knows the answer, C. It was the industry would benefit from more proxies who can add diversity of, but he's talking about us, he wants us to get in the game. The stripes all. This is a knock. So that college people start coming up, this is a knock on ISS and glass Lewis. It's it is the conservative talking point about the wobbly foxy advisory. So now, he's saying, like, they effectively need more which Damian has construed as well. We're more so by us. To break up the duopoly. The fact is that we will, we will, we're going to compete one day. The there is a takeaway about voting choice where they're going like to give everyone back their votes. So they never have to actually have an opinion about anything. They just make the money all the time. The there is a point that that the conservatives have you do need data for retail users, you need. If you do, apple is nonsense. If you're gonna vote on these things, it's overwhelming, you're talking about. Like if you have a 30 company portfolio and an average of 10 directors and four issues you plus votes, you have to cast you show up to the presidential election. We can't even get this country to go to the presidential elections. Much less figure out what the candidates even mean. What Matt's really trying to say is that if you don't understand the influence that these directors have on their boards and their performance, like, how they performed over the years, how are you supposed to vote on these, right? That's how are you supposed to without our data? How are you supposed to figure this out you into talk? Here we go. Next question number. So Matt, got, you know, you get, he's winning right question. Number eight, here. You make up some points because points. Question number eight, How many times is Larry Fink use the acronym ESG in the letter? Is it zero? Is it one time? Is it one and a half times? Interesting. Oh, or is it seven times? How many times do you use This? Acronym? ESG this one. I'm gonna say he used it all of one time. Matt is zero time. She does not make sure I'm sorry. That's right. Yeah, no way. I thought he would say it. If you say it now, it's like it's Voldemort and drag. Like you can't say surprised. I'm surprised. I thought he would have mentioned a few times. I like though answer one and a half because I can imagine him being like that was Jesse's. Best one at one point, just says s it really wanted a third Jesse. Yeah he's gonna happen. The money was for just he screwed up. You divide 3 divided by what do you divide by to get a half? You'd have to say Yes. And then sneeze gee, that meaning it. The question number nine how okay this is for you are how old was Larry? When he founded BlackRock, was he 35 25 50 or 45? How old would we think? Larry was me found in Black really? How I feel like it would help to know how old he is. Jessie, how old is he? Now go ahead. Tell us. Just get there. I have an option. Yes, yeah. Oh my God. That's terrible ages, 25. Wow. Okay. No use 45. He had already had a career and he left with BlackRock Jesse excited because they both got it wrong. Larry Fink was 35 years old. Is your first answer the door. So I don't know what that means. Stars the door. What you? Sure you playing. Let's Make a Deal. Is that it when they show you the three doors? Yeah, let's make a deal. Yeah, good for you. But you're supposed to switch after they show your door. Anyway, go you could have made up some points there already but you didn't. He failed again? But it is exciting when Matt gets it wrong and all those questions are kind of pointless. Yeah, they're just wild guesses. This is how boring the letter was, but he did mention his birthday. So that's why I did this letter. He talked about when he founded it. He know he said explicitly. When I was 35 years old, blah blah blah, talk to you know what this sounds like. Actually, if you're talking about the music, you liked growing up and influence your dog, it does, doesn't it sound like he's prepping for this to be the last of like he? These are Legacy letters. Now, talking about like, how BlackRock is Keen? How the ecosystem has changed? How important it's been how well his life has changed his part of it. The next letter? Is going to be all about his his kids. Now, they've grown up thinking their dad was like a pointless guy, just didn't come home for dinner and now, right? But but and had a yacht like he's gonna, these are like, are you suggesting that he's gonna pull a bob Iger, and he's gonna treat the anti-esg movement, like covid and kind of step away and maybe Boomerang back if things get, there's no way. Oh, Boomerang back. If it gets hit by a side that by the green train, he'll your 70 years old, you've done this thing for 35 years, you're the most, well, asset manager in the most successful anything, really? Yeah, it's like, you've made people tons of money. You've done tons of things that were probably not great to get there. You're looking back, probably have more than one bath room and now you have a 30 year old Harvard graduate like me who is complaining about there's too many black people at companies and they they need to stop talking about it and BlackRock and women do you really want to deal with that? Like, you know, nobody wants to deal with your art. No, of success to have like that. Be the The remember, remember what's the most important thing to ask your investment advisor? What's the most important number one? Number one number one thing, did the company do a racial? Yes, that's on number one thing. Know what they sucker? Not here we go. Question number 11, these last questions kind of suck. Oh, no question. Number 10, not that anyone at home is keeping track. How many personal names is he mentioned in the in the letter, how many people does he mention? Is it 4:15 6 or 0? 4. Damn. It is a four it's four. Yeah I told you if this is a legacy letter if I'm right. But wife or why'd you get four because you can't fit 15 in the letter. Ridiculous. Ridiculous number. And then six or four is 50. All right, flip. The next one is a I'm gonna give 50 bones points. So can you know, one of the people he mentioned, 50 bonus points. First name, last name. Sure. However, you want to play the game. Oh my god. Oh my god. Named one of the people, he mentioned. Okay, who's the lead singer of the talk. I'll tell you. That's not, that's not correct. I never never. Thought these were people. He knew Matt. You have a guess on this one. Yeah. It's gonna be someone who's had a long tenure with who's been with Jamie Diamond at the firm for a long time. It's going to be his Charlie Munger. So I'm gonna guess the CFO whose name? I don't know. wow, I mean I'm gonna give him Partial credit. He actually does mention the, the form the CFO, who's stepping down, who's going to become the vice chairman Gary Gary sheelan. Yeah. He mentions a new CFO Martin small. And he also mentioned someone who Matt could play in his game, who the f is this? The former director Beth Ford? Who had to step down. Oh, and then president zelinski, so you were close. Oh, he did. He gets a shout out. Once he gets a shot out. Oh, tough time did Larry talked to president zelinsky we're gonna assume. Yes. Right call. Does he call him up and wouldn't you say to him? Like I'm sorry, being bought being bombed. Yeah. What can I do? Can I send you another yacht? I understand your pinks. I'm being bombed by the anti who's accomplished very little as bombing me. And finally bonus question, fill in the blank ready? Are you? The anti ESG, this is the final question for today. March 16th 2023, a business Fill in the blank for all the Marvels. The, yeah, this is for everything. Oh my God. The anti-esg world, complains incessantly about black rocks, inability of focus on the bottom line, right? Instead wasting their time. Thinking about things like racial Equity audits. Okay, yes. So this, this is their number one, target is Blackrock. Since black rocks IPO in 1999, what has been black rocks? Total return for its shareholders. In percentage. What is their total shareholder? Return since 1999? You win the quiz, if you're closest to this. Okay. Okay. And this is my way of joking that how much they actually don't suck at their jobs. So, okay. I'm gonna say 12%. Matt, I I'm sorry, seems meager, I think to me all the years no that's terrible. That would be the worst return, the S&P 500 ever generated ever and you know change your answer to something bigger. Okay 32% It bigger like, like like a real human would be excited about the number. I don't, you know what, you know you probably would struggle with this one too because the number did seem large to me, I think Berkshire Hathaway was like 11,000 percent. Okay, see. Okay. Like I know, I think it's like he's sniffing in the right carbon. You're well, you're not even in a garden for like you're you're presented like average total 1999 since their IPO. If I had a dollar in 1999, how much I guess? Is that what it means? If you invested one dollar in Black Rock stock at the IPO, how much dollars is that dollar worth? Oh, That's a close to the actual percentage, it's mostly because oh, he's just cheating. Matt, what would have been your guess? Because 11,000 was in the ballpark I would have said probably yeah it's gonna be close to I think Berkshire, you don't get to be the Oracle of Omaha by having a lower percentage. That's true from New York city. So I'm just saying that's what the yes like the anti is G Crowds Are Gonna be looking at what are, you know, 8,000 percent. Wow, that's pretty damn close. Sorry, it's 7700 percent. Oh wow, yeah, that's how much of a failure. Larry felling, terrible. Good job, baby. Good Target. That's all we got for that. That was that actually, you said it was a terrible quiz. It wasn't terrible. But I I wish more of the terrible letter in it. That was the letter. It was really boring. What would you at what I wanted? What these were the boring part just so you looked at the letter, what if I added That I wanted the parts where he talks about interest rates. Are you talk about like, you know, like bank failures or and didn't like he did, but there's nothing, he didn't say anything, that's what I want. I want to, I want that he says nothing, that's the meat. And what's the question? What's the question is like Point by Point how little nobody needs that? Nobody needs the greatest, even even the great Doug Shaw would have turned that off that crushed. So I'm not happy. That was Damian, Ross. And the big loser are the data queen. I am at Scotty, we are free float, if you like this. Tune in tomorrow, we have a weekly Roundup where we're all in the same spot at the same time. I don't even know how we're gonna accomplish this, but we'll do that tomorrow until then goodbye.