Joins us to share how price conscious shoppers are navigating the store. Katie welcome to bloomberg markets. You take a look at these market and it is definitely a monday morning. The s p 500 up by about half of 1 building on last weeks losses. The same thing if you look at the nasdaq 100 and the big stocks. All the while you are seeing a little bit of a bump to volatility. The picture now higher by about one point or so, looking at a 16 handle. But lets get back to reddit because reddit and its investors looking to raise as much as 748 million, one of the biggest ipos so far this year. Ed ludlow joins us from San Francisco with the latest. 31 34 per share, where would that put us . The upper end of the range, it is a valuation of five point 4 billion. But if you take a look at the diluted valuation which would include restricted stock units, options awarded staff, it is nearer to 6. 4 billion. Either way, it is a significant ipo in the Technology Sector for this year and it has been a wild ride. They filed confidentially in 2021 which was a record year for u. S. Ipos and they have seen their valuation swing significantly since. They kind of missed the boat, so now everyone is having a sigh of relief, finally the reddit ipo is here. Is it a signal for more to, or are we kind of more focused on reddit, its issues, its growth and its outlook . That remains to be seen but like you say, a long and wild ride. Tell us a little bit about the plan to allocate several million shares to their users, actually, how is that being seen by wall street . Your show, you have a relationship with reddit. Reddit had a role in the meme stock frenzy of 2021, and 2020 before that. 8 of the shares will go to redditors, some of those including the sale of shares to family members, friends of the company, etc. But what is interesting if there is no lockup on those shares and if you follow the wall streetbets forum, you will notice a post that has been upvoted by reddick users proposing that when the shares start trading, everyone immediately shorts the stock, which might seem a surprise to you but actually this is kind of classic. There has been a fractious relationship between the reddit user base and management the cat they dont necessarily agree on some of the rules and formatting and things like that, but it is a complicated situation. And when they pitch her editors that they should buy into this, i read the memo that was sent to renters, the pitch was like, look, you can get in on this ipo at the same level that the wall street legacy name is getting in. So there is an interesting tension here. Interesting for sure. I unfortunately have been on reddit since 2011 and it is a very loyal but very combative fan base, we will just leave it there. Thank you so much. Lets dive deeper into the markets now with ellen hayes in, chief Market Strategist and Portfolio Manager over at fl Putnam Investment management. It is really interesting, you have jp morgan linking arms Goldman Sachs to really defend the valuations of the negatives and seven, jp morgan in particular writing that there is a concern over the very strong outperformance of this but they note that the group is currently trading less stretch than a few years ago given the earnings delivery from some of those names. When you take a look at what we earn, to the fundamentals justify the valuations . Thanks, that is a really good question. I cut my teeth during the tech bubble in the 1990s so that analogy is never far from my mind. And the key difference now is exactly what you suggested. In many cases, the cash flow, the earnings, the Revenue Growth is there. You look at a company like nvidia, yes, it has more than tripled in the last 12 months but earnings have gone up even more than that. Similarly you can say the same thing for alphabet, the same thing for amazon, for microsoft. Many of these Magnificent Seven Companies have very strong cash flow and very strong earnings and yes, valuations are a little bit stretched so instead of trading at a market multiple of 1520 times which is what the longterm average might suggest, they are trading at 25 or 30 or 35 times, but they are not trading 70 times or even more. We are not primarily focusing on market cap per eyeball or per click or sales multiples the way we were in the 90s. So i think jp morgan is right on. If you go back to fundamentals and look at the cash flow, a lot of these valuations really are supported. So valuations loan not necessarily saying that we should be scared by what we are seeing in terms of the leadership of this market. It has been fairly narrow even though you do have the s p 500 people waiting record highs as well. Its interesting. You look at not only the equal rate equal weight, but the russell 2000, and if the s p 500 didnt exist, or if you just look at those indexes in isolation, you would say this looks pretty good. Technically they look ok, some of them are making new, alltime highs so it is really just by comparison. You are correct, of course, that many of the names and the largecap index have gotten to be much larger than in times past. And that is different. The concentration is higher now than it was in prior bubbles, and so that is concerning because usually when companies become that big either individually or collectively, they dont stay that way forever. But you look at the cash flow and it is there, so it is hard to argue with that. That is what i wanted to talk about. The earnings might of the magnificent seven and how that really is justifying what we are seeing or in large part when it comes to the romans. But then you take a look at small caps, at some of these equal weight indexes and names within them. Does the earnings logic still applied to those companies, those sectors and names as well . Earnings have been much more mixed across the rest of the market than in the magnificent seven. They had stronger earnings than elsewhere so i do think that you need to be careful. But i would like to see earnings breadth broaden out a little bit more in the first and second quarters when they get reported before becoming too bullish on these other indexes. So i would say that the earnings have been strongest in the tech sector and in some of these thematic areas, ai and so forth. Of the earnings have been terrible, just not as good. We want to see earnings broaden that more into health care. We want to see earnings broaden that more in the Consumer Staples. That would the a healthier market. Still waiting for that broadening out. Lets talk about the other component here because in addition to the corporate fundamentals you also have the Macro Economic environment and of course we are awaiting cpi data tomorrow. What are you expecting in terms of that side of the equation, when we think about the data we are getting and how the fed might react . Clearly cpi and pce have been decelerating for the last year and a half since the summer of 2022 when they peaked. And also just as clearly, banta celebration is slowing down. It was a very steep skiing slope down and now it is leveling off or maybe still downhill but not quite as much. So we would like to see that go lower and of course the key question is what does it mean when chair powell says that we need to see evidence that we are well on our way to the 2 target . Does that mean we have to hit 2 , does that mean we have to go to 2. 5 and stay there . Does that mean that the slope needs to continue to be steep . What we are looking for is for inflation to settle in at higher rates than pregsc, and the reason for that is demographics and the labor shortage. We have very low employment now. Yes, it went up a couple notches last friday but it is still very low. And a lot of boomers have aged in the workforce and may not come back. The Labor Force Participation is not keeping up and that is going to keep inflation a little bit higher than it was the prior 15 years. We think inflation is going to settle out somewhere between 2. 5 and 3 rather than the 2 target and i think it is unclear. The jury is still out how the fed is going to respond to that reality. Stick with us, we will be back in a just a couple minutes. We are going to do that with bailey lipschultz. It feels like apple is having a rare good day. Apple trading higher, people circling news that they plan on opening slow to start the year, but keeping a bit of perspective on this move, apple, alphabet and tesla, the three names of the magnificent seven trading higher, the three worst performers of the group. Investors for today seem to selloff meta, amazon, nvidia, microsoft. Thats a good point. Apple still down about 10 yeartodate so maybe some traders saying enough is enough, but tell me about oracle. Earnings coming after the bell. The last two times the reported results, down double digits in the session after this results, so all eyes are on their ability to show expansion of their data set, ability to continue to revive at Artificial Intelligence wave. One of the things that analyst did callout out as they very much are mixed, but the view is that they can address some of the data center concerns, address the capacity that has constrained sales over the last two quarters, that could move the stock markedly higher, about an 8 move priced in. But a lot of uncertainty around a stock down 12 , down 14 the last two times he reported. A lot of focus on cloud growth. A good reminder that earnings season is not over yet. But it is monday, so theoretically we should have some m a news. We have mergers and mondays. Plans to buyback equitracs it, latest in a flurry of deals in the oil and energy space. Maybe a bit of that Merger Arbitrage playing out. This is going to give them control of the controversial Mountain Valley pipeline project. That is going to likely be completed in the second quarter, so this is making the more of a vertically integrated natural gas play. But when you look at the initial reaction, investors may be pushing back at 5. 5 billion implied valuation. Thank you so much. We will see if the deal actually gets through. But coming up on the program, it coin topping 72,000 per going to the very first time. A closer look at the crypto rally, next. This is bloomberg. The bitcoin rally is showing no signs of slowing. The cryptocurrency topping 70 72,000 for the first time ever. Investors have poured nearly 10 billion into a batch of new bitcoin etfs since they launched about two months ago. Isabel lee is here with the details. I was off for a few days at the end of last week. When i left, bitcoin was around 63,000. Now it is about 9,000 about that. What is going on . What is going on is that bitcoin enthusiasts are really powering it higher and higher. Almost every day i feel like it is a record high. Someone told me it will hit a record high and then come back down. If im not mistaken it is now trading around 71,500. But it is really kind of impressive and a little crazy how bitcoin has climbed 70 this year on the back of its 150 gain last year. And of course it bitcoin gains Thomas Muller coins also gain in cryptorelated stocks. It is green on the screen today. Bitcoin being a flirt, you got to keep it exciting. It does have a lot of buyers. Michael sailor out in the market again. Michael sailor bob again. Ive recently learned that it is never pleural, it is just bitcoin. It is the second largest purchase is made. Right now he has around 205 thousand tokens, rent 14 billion. The enthusiasm of the translate to others. They are just really putting more money into the space and as we know, flow drives the price. This is a spot bitcoin etf. If people buy, if you see inflows, these issuers have to buy the coin and bitcoin intelligence estimates that bitcoin etf now holds around 760,000 bitcoin, so then it is really a scarcity play. More and more people are really kind of like, i have to own bitcoin because after all, there are only 21 million coins out there. A great reminder of supply and demand and in this market it seems supply is shrinking and there is a lot of demand. Thank you so much for that breakdown. Lets welcome back ellen has en. I wont ask you about bitcoin specifically that the fact that we are seeing the riskier fringes of the market and other cryptocurrencies hit alltime highs, what does that tell you about Risk Appetite at this stage of the cycle . Thats a really interesting because is directly treated as a risk on asset. If you look at the correlations with other securities and other asset classes, if you look at the volatility, it trades as a risk on asset, so it is clear that the opening up of etfs investing in spot bitcoin has led to higher prices and has attracted money into those etfs, which is leading in part to the higher bitcoin price. So you would think that this would be positive for i this gasx and that it should all risk assets and that it should also be seen some smallcap outperformance and other riskier asset outperformance and you are seeing that broad now just a little bit. They might be birds and it better in this case. Historically there has been the case and if you look at smallcap over the last month or so, it has begun to outperform the doldrums it has been in for the last year or two. It does seem to indicate a risk on preference and that is reinforced by the possibility of that cuts later this year which again, causes investors to go risk on. A really good point. I think of crypto is basically the purest measure of Risk Appetite given that there is no real fundamentals there, but lets talk about the natural companies. Of course i want to talk about colgate because it is not just crypto. You have companies such as colgate absolutely ripping higher right now. What do make of that . We talk about big tech and the earnings half, but when you take a look at a name like colgate, what are you seeing . Colgate seems like it would be a really boring company. Toothpaste, pet food, how fast can that grow . But if you look at the Financial Model for the company, the return on invested capital is phenomenal. It is between 20 and 40 consistently which is very high, the top tier of s p 500 companies for return on invested capital and they generally benefit from inflation. Toothpaste and other Consumer Staples are one area where inflation helps them because they are able to pass along price increases to cover their increased cost much more so than a lot of other areas of the market. So you think of this as a slowgrowing company but in fact, the cash generation capability as well as the Pricing Power really help a company like this. We think it is a really interesting investment at a fair multiple for the groove. To that point, that has actually been a benefit given that people have to buy those products, they are really detailed in that sense on the flipside as inflation comes down for certain categories, when does that start to bite at colgate . I think it is quite some time because of course as inflation starts to come down, the first thing that happens is going to be the input cost come down, and yet the consumer pricing wont come down in tandem with that, so they are able to lag. They are able to lag and in fact they dont usually do cuts. It will actually help them. I think the key element as when it begins to her a stock like that is not so much in its fundamentals because i think they get Margin Expansion would cost come down and they are able to keep pricing, but rather in the multiple the people are willing to pay. As inflation comes down you might see money migrate from the more stable areas of the market to other growth areas that do better in a lower inflation environment. I think maybe it hurts the multiple more than the fundamentals. A good point. When you think about some of these staple names, some of the consumer and retail names, you talk about pricing and pricing has been the conversation, but when does that shipped to volume and whether some of these companies are able to groove volume rather than pricing . Clearly pricing is not the only answer. If for a really healthy Consumer Staples environment you want both volume and pricing. You want to percent or 3 volume and pricing. The one downside inflation is that even though in the short term a company like colgate and push that through and many other Consumer Staples companies as well, and it expands their margin, they do suffer on the volume front. It is a very elastic market in that sense and so volume does suffer. You are pricing to be a little bit softer than it is now so that volume can come back, but ultimately if you expand out beyond just looking at Consumer Staples but you look at Consumer Discretionary as well as terms of volume and pricing, you really need the consumer to be healthy. You need to consumer to have a job which so far they do. You need their real average Hourly Earnings to be going up, which they are, you need some excess savings were certainly some savings in order to support demand, which we do have, although the lowest quintile or so of income has run out of excess savings. So in general, i think that Consumer Companies whether discretionary or staples will be able to keep pricing for a while while still getting good volume growth is of the health of the consumer. Got to leave it there, really enjoyed this conversation. Chief Market Strategist and Portfolio Manager with fl Putnam Investment management. Still ahead, the Companies Making the most social buzz today. That is our social climbers segment up next. This is bloomberg. J. P. Morgan Wealth Management knows its easy to get lost in investment research. Get help with j. P morgan personal advisors. Hey, david ready to get started . Work with advisors who create a plan with you, and help you find the right investments. So great getting to know you, lets take a look at your new investment plan. Ok, great this should have you moving in the right direction. Thanks jen. Get ongoing advice; and manage your investments in the chase mobile app. Time for social climbers, and look at the stocks making waves in social media. First up, Choice Hotels dropping its 8 billion takeover bid that launched last october. The hotel chain behind brands like comfort says able to focus on its standalone strategy instead. Next up, bowing with a turbulent weekend of negative headlines including a new doj criminal investigation into that midair blowout on the Alaska Airlines flight. And finally we had alibaba rolling out a new Employee Incentive plan next month that combines equity with cash. This move is designed to help the ecommerce giant attract and retain talent. Remember, the company once worth more than 800 billion has struggled to revitalize businesses after years of pregnant risk of course, you can follow all the latest buzz under bloomberg terminal. It is a down day on this monday. Were going to continue to track that and also a look ahead to what tomorrows inflation data might mean for your dinner plate we will discuss with the ceo of the grocery retailer spartan ash. This is bloomberg. How am i going to find a doctor when im hallucinating . What about zocdoc . So many options. Yeah, and dr. Xichun even takes your sketchy insurance. Xichun, xichun, xichun youve got more options than you know. Book now. Hi, im jason and ive lost 202 pounds on golo. So the first time i ever seen a golo advertisement, youve got more options than you know. I said, yeah, whatever. Theres no way this works like this. And threw it to the side. A couple weeks later, i seen it again after getting not so pleasant news from my physician. I was 424 pounds, and my doctor was recommending weight loss surgery. To avoid the surgery, i had to make a change. So i decided to go with golo and its changed my life. When i first started golo and taking release, my cravings, they went away. And i was so surprised. You feel that your body is working and functioning the way it should be and you feel energized. Golo has improved my life in so many ways. Im able to stand and actually make dinner. Im able to clean my house. Im able to do just simple tasks that a lot of people call simple, but when youre extremely heavy theyre not so simple. Golo is real and when you take release and follow the plan, it works. Investors are waiting fresh inflation data coming tomorrow morning, and that is the last major piece of Economic Data before the fed meeting on march 20, so lets get a preview of what to expect. Abigail doolittle joins us now. Certainly a key piece and Economic Data given the fact that last month when cpi for the month of january came in just a little harder than expected really set off some gyrations in market area overall lets take a look at the fight that was in the peak in the summer of 2022 above 9 . A number that was higher than anticipated with 3. 1 for the month of january. That is wasnt dissipated for february as well. Month over month and is expected to come in to grow zero point 3 against the expectation of the previous month of 0. 4 . That has to do with a potential decline in the inflation around food and energy which overall is asked they could to come in it 3. 7 , down from 3. 9 , so higher than this number here. Lets break it down just a little bit more. Gasoline does remain relatively high, some of the gasolinerelated stocks. You can see all wellhid this year despite some volatility for oil overall, but then we take a look at food and not all food is created equally. This year what we are looking at in white is inflation. A stunning 29. 6 . At home that is a little bit more reasonable but still somewhat high for my taste, 26. 6 . This is food and energy that people would really like to see coming in just a little bit. Absolutely, you think about the lived experience of inflation and it is exactly that chart behind you. Lets keep the conversation going out because for more on tomorrows inflation data we are joined by tony, spartannash ceo. Spartan nash is a retailer and distributor the Global Supply chain network. Great to see you in person. You said in early january that you would expect food inflation to continue to moderate this year. About two months later what are you seeing so far . Let me back up for a quick refresher. We are a Food Solutions company. We provide groceries and Consulting Services for about 23 hundred independent grocers including the Retail Stores we operate ourselves. We also proudly serve military around the globe and giving the servicemen and women a taste of where they may be stationed. The overall grocery for food at home has stabilized and now it is to the point where most months it is actually lower than other things that people would buy. A little bit lower than the restaurant as well. We still very serious and making sure we do our part to maintain accessible nutrition for people at home and focusing on the right price points and the right compelling offers they need to take care of their families. As we saw the stuff coming, we saw this coming really two years ago and we establish what be calling merchandise transformation program. It is a continuous program, we bring in our suppliers and make sure they also provide promotional opportunities so that shoppers can get access to good deals to help stretch their dollars at home as well. With all that in mind you think about moderation in inflation but than thinking about the chart that we just showed, the lines never go down to mark would you expect to see deflation at any point . Right now we dont have a crystal ball as always but we do see continued moderation and continued flattening of that line over time. This is something we were talking met with our earlier guest, that you think that your business, youre one of the categories and actually benefited from inflation, from those higher prices on essentials such as food. Now if prices to level off or maybe come down in the church to take a look at the crystal ball, how do you respond, how do you group volume on the back of those prices coming down . We never actually think about just being a taker on the macro environment. We focus on the overall longrange plan which involves operating excellent and supply chain transformation. Initially manage our cost, combined with our merchandising transformation. More stable pressing through the system that allows us to be efficient and effective and protectable to our suppliers and shoppers. When you bring your suppliers in and you ask them to justify their prices, what do you hear . What is the picture look like for some of the suppliers . They are experiencing spot issues with commodities, weather events, other types of events that make it more difficult for them. A couple years ago labor was a hot topic so we heard a lot about that. We want to make sure they can manage their business effectively. We also want to take care of our customers, make sure they have access to nutrition for their family table. We pushed back on that, and other times we say we need to invest more money in this so people can have access to those great deals as well. The other thing i will mention is this also offers opportunity for us to use our own brand which we call our family. The same taser products at a great, compelling price point. Shoppers are increasingly choosing that as it is an option to help mitigate the cost of the rising food prices. I do want to go back to the concept of growing volume because that is something i wonder about a lot. With a retailer if youre selling clothes, i get it. You put on a sale, you sent people a lot of emails. How does it work for the grocery business . How would you go about going volume . We have to figure out what is the shopper really looking for . Value, convenience and indulgence. Increasingly shoppers are telling if they want all three. The hottest one is value. About 50 of that use that as their primary tool for determining which store theyre going to shop at, the best pricing overall. There also looking for great brands. 63 of shoppers are telling us they are routinely choosing a privatelabel bank brand versus the national brand. The other trends we are looking at our around convenience. People are using convenience as a form of currency. Some of these items that are convenient are a higher cost per pound. People are lunging for those in our stores. If we are not growing in produce broadly, people will take that as a way for us to grow and solve a problem for them in their lives as well. Time is money, im sure you heard that. But you have a pretty unique perspective that a pretty broad level. What breakdown are you seeing between retail vs. Wholesale . You think about our customer overall, independent grocers are the primary customer that we serve and that is the wholesale customer. About 2100 of them, and theres about 21,000 in the united states. These are folks that operate typically as family businesses. They operate in the innercity weather otherwise might be desert. They operate in the suburban most commonly in small communities off the entire united dates. They rely on wholesalers and folks like us to help solve their problems and think about how they can run their business efficiently. They look to us for the tools come with her it tool or Category Management tools. And of course, a look to us for that overall supply that is consistent and protectable and the pricing makes sense. So all of that makes of how we actually manage through that. So to your question, retail to wholesale is sort of the same thing. We are serving them, we see the same types of trends, but because of our scale broadly, we can offer what a 10 billion company can offer to a two store family chain is really invaluable. I want to talk about one of your key wholesale customers, amazon. Amazon business has been slowing as they pursue their own efforts. How do you make up for that lost business . We are doing the same types of tools that i mentioned a moment ago, looking for ways to grow organically in our stores with our wholesale partners to make sure they have the right offers for their shoppers and also evaluating opportunities all the time. Looking for ways to continue to grow. We also are bullish on amazon, we believe they are going to come back and grow and when they are ready, we are going to be ready for them. Really appreciate your time. That is tony sarmsam, sue barton spartan nash ceo. A little bit bearish right now. We do have the s p 500 down about half of 1 , near session lows. This is down more than 5 on some comments from former President Trump around tiktok and the fact that yes, it could violate some ideas in the u. S. For that it should not be banned based on that. Investors seem to be going with that even though it doesnt make so much sense. You can see the nasdaq at about 2 right now, heading to the worst two days since the end of january. Relative to the s p 500, we will say it is a more muted loss on the day, down about half of 1 . Bitcoin still knew that 72,000 mark, up 3. 6 on the day. That rally simply continuing. Gold slightly higher, ive just fractionally. You can ceos internet cpi print tomorrow, the two year yield up about five basis point as some traitors perhaps position themselves for that and that could be another reason that tech is down. That could keep yields higher and back in Pressure Tech to the idea that valuations are lofty. Speaking of tech, the magnificent seven, all agility is certainly gaining over the s p 500. In orange for the s p 500 overall, and you can see not surprisingly, those big tech names are a little bit more volatile. Higher returns, higher risk as well. Thank you so much. Coming up, the difference between genius and growth and why it should matter to companies. Mary murphy joins us next on wall street week daily. This is bloomberg. Super excited to open up my diploma from Southern New Hampshire university. Im nervous, im excited. [man] okay, lets see it. Lets see it. Oh my gosh. Jesus suarez, i did it and its here. group cheers [narrator] next term starts soon. Visit snhu. Edu. Visit snhu. Edu. Thanks to avalara, we can calculate sales tax automatically. Avalarahhhhhh what if tax rates change . Ahhhhhh filing sales tax returns . Ahhhhhh business license guidance . Ahhhhhh crossborder sales . Ahhhhhh item classification . Ahhhhhh does it connect with acc. . Ahhhhhh ahhhhhh ahhhhhh abigail this is bloomberg markets, you are looking at a live shot of the principal room. Coming up, john rogers joins bloomberg at 3 00 p. M. Your time. New york time. This is bloomberg. Dark of time now for wall street week and we are taking a deep dive into what it means to be an effective leader. At issue, why the egocentric or genius mindset that is nourished leaders like elon musk and sam altman may work in the shortterm but is not a recipe for growth. Joining us now as mary murphy, the author cultures for growth along with david westin. Take away. David welcome, great to have you here. This book you have coming out tomorrow. But before we get into it, give us this mindset briefly because im not sure i was familiar with it before i read your book. The fixed mindset is the idea that you either have it or you dont. We have some traits, intelligence, talent, some people just have more of these things, other people have less, and cultures of genius, we really look to those star performers. The individuals on the team or expected to lead the way. All the resources and power are kind of concentrated in this genius model. On the other hand is the growth mindset, the mindset that anyone regardless of their talent, skills and ability has potential within them and they can grow that potential over time with a lot of resources, persistence, Good Strategies and helpful help from others. Can you give us some examples . Ive brought up elon musk and sam altman of examples of the genius culture but is that the way we should be thinking about it . But we find in over two decades of research now is that these cultures of genius actually make america a lot less competitive. We see problems alone collaboration, innovation. Youre unwilling to make mistakes in the culture of genius because if you make a mistake it is taken as a sign that maybe you dont have that innate intelligence, ability or talent that is so important to stay at the top of the heap. People are looking around their shoulder, looking around their back to be able to maintain their status and their reputation in these companies. And this makes this organizations quite fragile. To your point, it is not that you cant be successful as a culture of genius, but it is almost like you are flying a plane into headwind. What we see is that your expenditures are going to be greater, it will likely be delayed, and the trip is going to be a whole lot more stressful as we see in some of these organizations. David the growth mindset is that you can ro khanna change. But how much can you change . Certainly there may be some innate tendencies in some people or organizations to be more toward one end of the spectrum or the other. Can you really move all the way over . We do see in the research that high performers, the highest performers prefer the culture of growth. Why . They are not always having to watch their back. A new star is born every day in these cultures of genius and so it keeps people on this treadmill of having to prove and perform you are only as good as your last performance. Instead of figuring out how to learn, grow and develop to make the focus of my work actually better, i tend to start to look backwards and make sure that i am able to maintain my status in these organizations. Youre certainly not going to grow in those kinds of cultures. And to your point about the extent of growth, that really depends on the culture and the structures within those organizations to remit invest in learning growth and development, giving them those opportunities and really supporting them, making sure that any mistakes that are made, that that learning is really spread throughout the whole organization, and that is what makes these cultures are growth so resilient, especially in times of uncertainty in any acuity. When it comes to the genius culture, does that just breed heman risk . If you are so focused on one individual who is seen as this genius . Absolutely, is a real problem in the culture of genius. We can look at some of these companies. Farahand we work and ftx, you can see those geniuses are really at the helm. The extent to which organizations rely on those geniuses for figuring out risks they are going to take and how the business should be conducted, we do see a lot of ethical problems in these companies where it is just so much in this prove or perform environment that people are willing to take shortcuts. They are willing to award information. They might mislead regulators. So we see this real challenge in the culture of genius. David you mentioned performance because ultimately will be have a Forprofit Corporation you need performance. An individually. There must be some way of evaluating people. Not everybody is doing great all the time. How do you have an effective performance Evaluation System in a growth culture . It is a great question. What we see is that cultures of growth are actually more rigorous when it comes to their Evaluation Systems. We see that they are collecting data, giving people their own data and giving them a sense of what their strengths and weaknesses are in the current moment and then they are figuring out ways to create structure and strategy around individuals so they can have what it takes in order to grow, learn and develop. These cultures of growth know that it is important for people to have an accurate sense of where their skills and abilities are. They are not going to be sugarcoating it. Theyre not going to be falsely praising skills and abilities, and so the experience of people within these cultures of growth can actually be by challenging because you are always expected to be figuring out the next stage for your own learning and growth over time. You touch on this a little bit but it is easy to think of examples of genius culture. Just from the corporate side you think of theranos, wework, etc. Are there any companies or countries that actually have a genuine growth culture . Microsoft is a very good example. Everyone likes to give the example for everything. In this case it is a real fit because was inspired to talk about microsoft at the first growthminded company. He and Kathleen Hogan really worked to build that culture of growth through everything that they did. And from those resource allocations and strategy work that they did came cloud computing, which made microsoft put back on the map and has actually made them much more resilient in times where tech stocks have been in downward trends. Weve seen microsoft. Another example in the news today is nvidia. We see nvidia looking at the ecosystem of ai today and trying to figure out which startup should they invest in to really understand and learn how to improve these aienabled chips . Answer the question is do you want to invest in startups that have a culture of genius, or are you going to invest in startup that have a culture of road . Our research with over 200 companies is finding that these cultures of growth, they have more transparency, are open to data sharing, creating these rapid cycle experiments to be able to really mine all of their experience for learning and if i were nvidia i would be wanting to figure out how to learn the quickest and the most efficiently and that is in the culture of growth. Are there certain circumstances particularly in crisis were a culture of genius might benefit you . I just finished enter robert biography. Im not sure Winston Churchill of 1939 needed to have a growth culture. He needed to save his country. Are there times when you need genius culture at least for a short time . Especially in our society, western society, we tend to really worship this idea of genius and we feel in some ways more confident when someone can project that genius mindset. And i would say that it is the external part that makes people experience confidence in these organizations and individuals. But when it comes down to it, we actually see cultures of growth making more decisive decisions and i actually have more contingency plans. Those decisions tend to be less risky, because they are relying on data. They have these rapid cycle experiments that they can engage in to be able to learn whether the policy with the practice i am putting in place, the decision ive made, is it showing the outcome i expect it to show in the short term . That way they can pivot more quickly. So they tend to be more agile and make stronger decisions in the long term. Great conversation, really looking forward to the book. Mary murphy, the author of cultures of growth which is out tomorrow. David, who else to have coming up . We have dan with a new book called the genius of israel, so we will know if there is a genius culture to bring us up to speed on what is going on in the middle east. And friday, we will talk to henry mcvey with a report on the culture and economics of india. A lot to look forward to. David westin, thank you so much. This is bloomberg. Lets take a look at some of the stocks hitting high this morning. First up, kroger shares hitting 52 week highs after a positive profit outlook for the year. The ceo of the diversity chain said it was lowering prices and offering personalized promotions and rewards. Shares actually down a little bit, down about 1 . Thats worth about half of 1 higher on procter gamble. Investing over 6 billion in brazil to boost production of a hybrid car. The latest automaker to bid on the south american nation this year. Coming up, Ophelia Snyder joins Bloomberg Technology with Caroline Hyde and ed ludlow. That is up next, but that does it for us. This is bloomberg. Okay yall we got ten orders coming in. Big orders starting a business is never easy, but starting it eight months pregnant. Thats a different story. I couldnt slow down. We were starting a business from the ground up. People were showing up left and right. And so did our Business Needs the chase ink card made it easy. When you go for Something Big like this, your kids see that. And they believe they can do the same. Earn unlimited 1. 5 cash back on every purchase with the chase ink business unlimited card. Make more of whats yours. From the heart of where innovation, money, and power collide, in Silicon Valley and beyond, this is Bloomberg Technology with Caroline Hyde and ed ludlow. Caroline i am Caroline Hyde at bloombergs World Headquarters in new york. Ed imf ludlow intent for cisco. Caroline we will bring you the latest details on reddits ipo. Ed