Weaver is here as well. Shes the cofounder and ceo of collets capital. She will tell you where she is putting new money. She is the former miami chairwoman. The search for yields will definitely come up in the conversation. And open and transparent earnings hot forms earnings platforms. We will preview earnings from netflix, ebay, and the other big ones out this week. First off we focus on hedge funds and a bullish call on u. S. Stocks. Two of last years best performing managers are predicting equities will rise again this year. She covers hedge funds hear a bloomberg, she is with me now. Two of the bestperforming managers last year say that stocks are going to continue to rally. Is a sixyear plus bull market possible . That is what a lot of managers we have been talking to happen saying. Is the sixth year of a bull market. It will be a continuation. The markets will really weather tapering very well. A lot of stocks wont move in step with each other as much. Not everything will move up. The shorting may be easier this year. It was a very difficult manager difficult market for managers last year. We will also be keeping an eye on the Macro Economic backdrop, centralbank policy, we will probably diverge this year much more so than it has in past years. That is something we will keep an eye on as well. Why do we think that stocks can rise more . A lot of the Central Banks policies that listed markets last year caused 2013 to be a huge rally. Markets this year will be reacting to the fed tapering. So far we have seen a pre positive reaction. In december we saw the first instance of the fed tapering and stocks actually rose that day. We will be seeing a lot more of stocks reacting to fed policy, probably pretty positively. Expecting that tapering to play out to the market. Which other managers agree, disagree, what kinds of different opinions are you hearing . To be on the shore side of the equation, we have john he said there will probably be a drop in the markets he four we see an eventual rise. Craig efron has also said there will probably be a. Time were a period of stocks wont do well. Ben stocks to rise he will betting on a lot of innovation plays, technology plays, a lot of internet companies. On the more positive side, people like Jeffrey Altman has said a significant amount last year with significant gains. He is betting on telecom, which helped drive him last year. Thank you as always. Kelly bit covers hedge funds here for us at bloomberg news. We are joined now by our power in their by our pioneer in the field. Allen, lovely to see you. Thank you for coming in. With the idea that not all Tech Companies need to go public. Market,s rising stock are you changing your ideas . Them a i would have to i would have to say certainly the gate has opened up a little bit. The filter is less fine. I wouldnt say what i said six years ago when i started great cost started great kroft started greycroft. In could go public certainly you could go public, certainly in the bubble period. It has been a very heavy filter. Most companies that have gone public have revenues over half 1 billion. Ou have to form a syndicate your public but you do not trade. Aem i basically if you are private company you have to have your books in order at least four or five quarters before you think about this possibility. Them i think you need to think ahead four or five quarters. I think you need to look ahead four or five corners. What kinds of companies are you most excited about . I know there is one news spread that may change the way that all of us consume 80 appeared that consume media. All of us consume media. Instead of having started in is a way ofs, it aggregating news sources from around the world. Not just making it available to publishers but brands are now brands as confident as a new concept. Native advertising, i am sure you have heard about that. You are taking news information and attaching it in a very legitimate fashion. Their branding and their image becomes more relevant to the consumer. Is its meant to compete with Something Like buzz feed . Nokia it is not a consumer site in itself. No, it is not a consumer site in itself. It is a means of providing news to advertisers or to other publishers that they would not have axis through themselves axis two through themselves. Themselves. Through thought because we will talk more about your portfolio. We are back in just two minutes with alan patricof. Welcome back to money moves on Bloomberg Television and streaming all day long on your tablet come your phone, and bloomberg. Com. It is a way of big ideas. Tech visionary and philanthropist bill gates released his annual letter for the bill and Melinda Gates foundation. Will be almost no poor nations left in the world by the year 2035. Aidstes and the former and the former new york city mayor michael bloomberg, also a major stakeholder of bloomberg lp, spoke this morning on in the loop with betty liu. I think it is dangerous people are focusing on the bad moves and not seeing the progress we have made. It means they do not look at the best practices, it makes them less generous. We are raising poor countries up. Done in more to be agriculture. The track record of success, if you do not see that you are not going to participate in what we need to do. You say there will be no poor nations by the time we reach 2035. Almost none. Africa,ed countries in north korea, if they dont change the government. It will be less than 10. When i was born all most all countries were poor and now we are down to about a quarter of them. If we focus on it we can make it really really exceptional. You donate his last year about 100 million to the bill Gates Foundation despite eradicate portfolio. Du share the same optimism . I could not be in more agreement. The thing that activists seldom want to acknowledge success because they will always want to have more to do, raise more money, be more important. It was 100 right. Il, i have always want to know this from you. You have such a huge arsenal. Both of you have such a huge arsenal of resources. How do you pick the causes that you get behind . Them globally i think the greatest inequity is how globally i think the great inequity is how porch over and dont get to grow up and achieve their potential. How poor children dont grow achieve their potential. We decided that most of the money will go to that cause. Ortunately there fortunately there are things like new cassie things like new vaccines that will help them. Five percent of kids now die before the age of five. The prediction is we can get that down to one point six percent to match where the United States was in 1980. When you were mayor you have certain mr. X certain metrics by which you can measure your own projects and initiatives. How do you measure success . Not everything is going to work quickly so you have to have patience. Do somethingf you in the scientific world and it turns out to be a failure, that in some senses a success. Because you do not have to go down that path again. Knowing what you are doing, measuring it and there are a lot of people around trying to apply metrics. In some cases you can and in some cases you have to do it on faith. Gatesiscussion with bill and the founder and majority stakeholder of bloomberg lp, former new york city mayor michael bloomberg. Patricof,w is alan founder of Greycroft Partners and philanthropist. Michael bloomberg and bill gates weighed in on the most important elements to them in philanthropy. Ou are on the global board most important elements of giving for you . , he gave me great you gave me first of all, you gave me great positioning following those in protests. There with a p. Capital p. With a the world should be appreciative of people like that. They put their money where their mouth is and do something constructive. , with gatessk comment, the world will not have poor nations by 2035 . That sounds like a lot of optimism. Share that could much enthusiasm. He knows probably more than i do. I am on the president s counsel in global development. There are a lot of poor people. It depends on what the definition of poor is. Some people use a dollar per day, some people used to. It has now become a dollar . 25 per day. It is suggesting that there is not as many under a dollar per day as there used to be. You have food, you have education. There is no question that the number of poor people is going down. I was on the board of the millennium challenge organization. I think it is very encouraging. I am optimistic and i am glad they are optimistic. As long as they keep helping it it will be even more helpful. I know you are on the Global Advisory board of endeavor, which seems to match your and youropic efforts experience and knowledge in technology. And denver is basically exporting endeavor is basically exporting this idea of culture. It works with local on printers and tries to get some of this tech magic spread, local entrepreneurs and try to get some of this tech magic to spread. What ucf exciting from other parts of the world what do that is exciting from other parts of the world . I see some achievements out of Harvard Business school. She started this from scratch and it is now in 15 and 20 countries. She has started a movement that is really exporting the Silicon Valley concepts around the world. We are seeing people start up in brazil and peru. Countries, of the not all of them entrepreneurism is a worldwide phenomenon. What is going on is a groundswell of new business havetion, startups, we never seen anything like this before. It is a culture spreading around the world. We talked about one of your Portfolio Companies ring it back, local. Bringing it back, local. It is basically a global a mobile commerce company. It proves your point about the flexibility, about this idea of marrying an older business with a new business or a new way of doing business. It is a very early stage deal. Coscothe concept that bulk. By invoke buy in you can order in bulk online and have it livered. They had and have it the livered. They have been able to do it at an efficient and have it delivered. They have been able to do it in an efficient way. Thank you for being with us. Alan patricof. Him when we come back, the ceo and chairwoman of Collins Dorothy weaver will be joining us. Memo our next guest has 35 years our nextment guest has 35 years of investment experience. The firm was founded in 1990 five and recently launched about a year and a half ago a mutual strategyimic its alternative investment. Dorothy weaver is with me now. Glad to see you. What kinds of strategies are you allocating most to in the Fund Business . Demo we are doing exactly the same in the fund to fund limited side and mutual fund. The opportunities we see most attractive are event driven. Companies are really using their Balance Sheet and their new equity values to go out and make acquisitions, consolidations. Also in the activist area, where new managers are helping Companies Think about unlocking shareholder value. One thing people may or may not know about, youre the former fed chairman of miami. Aboutrtainly know investors who search for yield. To what extent is that search driving capital . We are looking to be the third leg of the stool. Easy for people to access. Therefore it reduces the volatility and the risk. I am curious, where do your emerging markets fit in the . Fit in . Anomalies,k for missed we look for anomalies, mispricing. You can make money on both sides. I know you said at the mutual fund mimics what youre doing with the funds to funds with the hedge fund. Funds,a is the Mutual Investors with less to put on have less liquidity. It takes a lot of structure and heavy lifting to make the same tools available. That has not been happening in the mutual fund. Because of our many years of experience with the hedge fund, we are able to give them the managers, the same tools. What was the hardest part about getting that structure together . It is negotiating multiple prime brokers. If the manager uses a different one, we have to make it easy on our managers to do exactly the same thing. This trades under an alternative Solutions Fund . Have you of demand seen does the public understand what is available yet . Huge education is necessary. People think hedge funds are risky. In actuality, the way deeper for leo the way of portfolio is supposed to work is to reduce risk, reduce volatility, reduce correlation. With 30 Years Experience in the market, what has been the most surprising thing to you in the past year . It has in the past year been the correlation of thoughts to each other and the good, the bad, and the ugly moving together. Movebe exciting as we forward is the fundamentals will begin to matter. Thank you very much. Thank you for lending your time and expertise. Or the weaver there. Shes the cofounder and ceo of collins capital. Dorothy weaver there, shes the cofounder and ceo of capital. Collins capital. Alix steel is on the market. What do you see . Demo the s p the s p trying to turn its way higher. Still down by 3 10 of a percent. You did have european stocks at a sixyear high. Central bank is also pumping more money into the system and the imf raising its forecast from global growth, primarily due to acceleration in the u. S. And the u. K. Economy. Take look to the treasury markets, the 10 year yield is at a sixweek low. Is the economy Strong Enough for the fed to taper even more . Treasury yields will climb to 3. 4 erie we are back in 30 minutes ash 2. 4 . Were back in 30 minutes. This is money moves, where we focus on innovative alternative investments. I am deirdre bolton. Getting earnings right in make investors a lot of money. We joke and is with me now. He is a form a reformed head a reformed hedge fund he is the founder and ceo. The time is more accurate than consensus. That is a pretty good batting record. What do you make of ibm . The company is selling off its lowend server business. It is in the middle of this big transformation into the cloud. They are transitioning. Ibm moves at its own pace historically. It does not Pay Attention to the fact the market once five percent Revenue Growth every quarter. Look for all the money to poland watson and pushes forward. For the time being the market is not paying that much attention to exactly what that growth is. Is hiring consensus for both earnings and revenue. Youre saying the market is missing just how strong or how quick this conversion is 2 00 company . , we are well above we are well above on the red and he ps on the red. This is almost one for one, which is unusual. We have been historically way above on netflix c. T. S. And revenue. They crushed estimates the last four quarters to six quarters. We are seeing a major margin deterioration from netflix predict the buy side is getting that happens much faster than the sell side, which happens when the both the bottom and top of that turn of the margins change. That is something to really watch for this quarter. He estimates are really bearish for our community. The estimates are really bearish. Personally i am an addict but i know one person does not make a whole earnings quarter. Ebay it looks like amazon crushed everyone this quarter. It looks like they ate their lunch as well. Ebay has gotten nowhere over the last few years. Is ready good malaise here. That is pretty good malaise here. We could see the stock really take off and the community has been extremely accurate the last six quarters. The sell side has been bringing those estimates down considerably over the last couple of weeks. Obviously there is a pretty big dispersion between what you think and what wall street thinks. What you think accounts for that . This is a cold stock and we ,ee this with new companies there is a huge delta. This is where the platform is really valuable, the sell side is still not that much still not paying that much attention. The type of company that goes into the wearables. 36 of their revenue goes to samsung products. This is one of those things were you can see the stock performing really well. They can up that multiple but the market is paying for it. Always good to see you. We will check in with you after the numbers are posted. He drove in, founder and ceo lee drogan. We have the next wave of israeli ipos and what it means for the markets here. Welcome back to money moves on Bloomberg Television and streaming all day long on your tablet, your phone, and bloomberg. Com. We have some of your top bloomberg headlines to bring you this hour. There is snow everywhere. A major storm is hitting parts of the country from North Carolina to massachusetts. Government officials closed bureaus in d. C. New Jersey Governor Chris Christie is canceling his Inauguration Party tonight on ellis island. Thousands of flights have been canceled or delayed. Up of dow chemical. Is Hedge Fund Manager pushing for a spin off of the petrochemical business. Management and directors are looking for ways to increase shareholder value. Numerous world leaders, Business Leaders gathering in that close, davos,land in switzerland. Am i think if you stepped down and ask what the purpose of a Financial Institution is, it is to help our clients. We did everything we can for the business. I think youll not find those types of things repeat. Said the trade profitable every day of the last quarter. Nasdaq ceo bob griese sold was in israel bob griese felt was in israel. I think we have more israeli ipos come to nasdaq last year than we had chinese ipos. It is more important to look at one. The quality and consistency of companies that are generating the entrepreneurship of innovation out of this country is amazing. Is the consolidation going on among the intercontinentalexchange e there are 13 exchanges and 15 venues. Surely we are going to see more see moreion consolidation. I think with respect to equity markets, you will see less of that than you are probably predicting there. Nasdaq is obviously always optimistic always opportunistic. It is about leveraging the strengths we have. We are going to focus on continuing with that effort. The biggest tech ipo of the is it a sign of things to come that perhaps nasdaq is the natural name for the big Tech Companies . We are. Certainly we had a very good 2013. Twitter is a great company. We wish them well. We are proud of the success we have had. It is important to recognize that nasdaq has diversified influencing franchises and our leading sector was by Technology Sought break into what had been traditional strongholds of our competitors. We are very happy with our progress in diversifying our menu. What lesson has nasdaq drawn from as we move forward . For years we lived in a noncompetitive monolithic world. The u. S. Had this highly wherented world everything was in a state of maturation. We have come a lot of way since the flash crash. 16 venues coordinate among themselves and coordinated fashion. U. S. Companies complain about too much regulation. In israel be have the same, Country Companies also complain. I we going to see more and more regulation . People are facing the companies with so much regulation. Them a great question. I would say certainly with respect you saw most of the principles copied by the developed markets around the world. Jobs act wasthe the first bipartisan deregulatory action ever. That was a positive impact on the market. Hopefully now other jurisdictions will follow the lead of the. The lead of the jobs act. Nasdaq ceo rob griese felt with our middle east correspondent elliott gotkine. For more on how the nasdaq is trying to diversify its business model, we bring in bob rice with tangent capital partners. Last year nasdaq bought shares to compete with the second market. It is a private platform were some of these five at Tech Companies can try to unlock some value. Exactly. ,s you heard alan say earlier it is not so easy to go public. There is usually a very long runway between even a successful startup and when you catch a go public with. What do you do for all those years for your employees that are in the building stage . A need cash. More mercenary sense, a lot of these programmers and engineers, they are being sought after by numerous companies. There is the serious competitive aspect. You have to pay them somehow. There needs to be some sort of liquidity vehicle that goes before a true ipo. One of the things nasdaq was aiming for was to be able to provide these kinds of services to earlystage companies with the idea that you will get the next twitter so you lock them up for the next ipo. Like the vcost investors trying to lock them in earlier, younger, and smaller so they get the big payoff. Exactly right. A need a lot of services that nasdaq feels they are in a good position to deliver. Later on they will expect to go public. Ofnasdaq is obviously a head the New York Stock Exchange or other changes on this, im assuming. We dont know if the context of this private market is. We are expecting to hear a lot more soon about how this will operate. Stay with me. Well talk about tech and hedge funds, how they all fit together. Bob rice back with me in just a few minutes. Them up earlier we spoke with dorothy weaver from collins capital, and alt asset manager. Also we spoke with the former fed chair of miami. He talked about the search for yield. Bob rice is back with me now. There is this bet on denying Credit Conditions that is front and center for a lot of Hedge Fund Managers. This is one that is actually losing money right now. Positioningiously themselves a little bit against the crowd for what is coming. Obvious to us but it is not obvious to everyone. How can such a brilliant guy lose money like this . Everyone is making money. Contrarian with what we have seen over the last couple of years. We have seen very benign Credit Conditions. There has been an obvious trade for the relative value credit guys in credit guys. Money but be a lot of easysy money erie money. There are ways to mitigate what position youre taking. Right. One believes the fed is going to lack all tilting in the market. He says they have gotten as far as they can get. I bet theyre going to start to mortgage norms. Trend wouldlay that be struggling to credit default swaps. He is a Hedge Fund Manager so he is not taking complete thats. The only reason he has lost six percent is he is actually betting on relative spreads. He said as the equity markets , i dont think the credit spreads are going to narrow as much as they traditionally do. He has some investors that are not focusing on the hedge. He is facing some pretty big outflows pre outflows. Everyone is making money and you are not so you must be doing something wrong. He suffered a couple of billion dollars worth of outflows over the last several months. Several key investors are saying theyre sticking with him. From a generic point of view of how you pick a Hedge Fund Manager or how do you pick a mutual fund that is mimicking some strategy that you want to be them, where to the contrary and calls fit in . This is a really interesting point. A lot of Hedge Fund Manager said they are willing to pay the extra money because they want a. Also means youre not following the crowd, that is where you are generating the extra yield. It is a funny thing people would say that. As soon as the contrary in position does not pay off. Warren buffett would probably say great, here is a chance to buy more. A lot of people dont understand the same psychology is true of Hedge Fund Managers. You have to stick with them. It just shows to what extent they are actually under pressure as a group. If i am paying two and 20, probably i am just greedy. You want Great Results all the time and that is very difficult to achieve. Sometimes you have to be willing to ride the downturn so you can get a big upgrade. Youed qe does come off, have volatility spike in the bond market these bets will. Robably pay off very well without even talking about dodd frank and the lack of ability to move big trades come at least as investors used to be able to. Those limitations are coming in but there are a lot of ways for these relative value guys to play the game. This will limit their ability to find ways to place the bets they wish to place. What may prevent him from doing that is the pulling the money out. There is that big x factor lurking in the corner. Thank you as always. Bob reuss janik bob rice joining us from tengion from tangent capital partners. Tomorrow, the motor specialists will join us. He is part of the team putting pope francis is Harley Davidson on the auction block. You will not want to miss that conversation. It is almost 56 minutes past the hour. That means Bloomberg Television is on the market. Macatee reporter alix steel is with me now with everything you need to know on trade. S p is up by about three points. A close above 1842 could be a relatively constructive sign for the market. Two stocks we want to highlight for you, first is super tire and rubber. The companies being sued by investors who say they lost money during a failed sale to indias apollo tires. And analyst says cap was a holiday outperform her and has the ability to keep growing its bottom line despite the tough retail environment. Todays sector report. Most of the nations big banks reported fourthquarter earnings last week. It is a mixed bag with some reporting results beating out estimates. Others incurred huge legal fees that hurt their bottom line pre joining me with a look at the winners and losers is michael moore. What are the standouts and the positives . Morgan stanley did the. Est there shares rallied significantly. That is partly because of their Wealth Management business. It benefited from the rise in stocks we saw from last year and theyre putting off good markets and the increased their margin targets. That is seen as a steadier business. They did a whole spread before the earnings came out. They said Morgan Stanley did the health management, which one is going to win . Does that mean a trading bank was the one that got hit the hardest . , trading was down across the board the hardest . Trading was down across the board. Those with fixed income trading did not have a good quarter. Question is as tapering starts how will fix income trading do . It has been pretty benign over the last couple of years. Of they havent done tremendous. Hasnt come to the precrisis days. No one thinks it will. What level does it end up that . Right now theyre not taking they are not making a ton of money. The big question is, what are banks going to do to grow their earnings in 2014 the side cutting costs . 2013 was all about cutting costs, you did not see any Revenue Growth. Right now they are kind of stuck, they are dependent on the economy to pick up market activity. Everybody is waiting for this and and a boom for this m a boom. It is all about cost cutting. Morgan stanley said they met their costcutting goals and citigroup did not get quite to her investors wanted them to get in their stock fell during the week. It is all about cost cutting. Them on one hand they are winning for the economy to get better and on the other hand they have to keep their staffers happy. Banks are saying dont come in on weekends. Usually the big payer is looking at 30 of revenue for 2013, well below the average. Here does the talent go . Them at their is not a ton of places they are going. In 20 10 there is not a ton of places they are going. In 2010, you had no hiring. Start anas trying to investment bank. They have gone to a staple spot. Unless youre going to private equity and hedge funds, they all had a great year. Thank you so much. We appreciate you helping us break down the banks. We are on the markets again in 30 minutes. Street smart is up next. Baby its cold outside. Hello run new york. I am trish regan. I am mark crumpton. Welcome to street smart