Jack welcome to barrons round table where we get behind the headlines to prepare you for the week ahead. Im jack otter. Coming up, investing in innovation, how ark ceo think wood is helping investors take advantage of the a. I. Craze. Then investors think that sports business is a sure bet. The industrys undergoing massive change minting new millionaires as billionaires bid up franchise values. How you can informs too. And later, a look at the complicated bidding war for paramount but we begin with our expert possible and three things investors ought to be thinking about right now. My colleagues ben levisohn, andrew bary and elizabeth obrien. So, ben with, the market got really spooked this week by Interest Rates and inflation, but then even more serious concerns about geopolitics. Thats right. We got our flakes reading, and it was hot. Inflation reading, and it was hot. That that wasnt good. We had two hot readings to start off the year, but this third one for march really seemed to say, okay, the economys running hotter than it should be, the fed is not going to be able to cut rates the way the market had expected. By thursday the market seemed to be okay with that. It was only on friday that we actually had a very large loss. And that was really due to these geopolitical concerns. There were reports that iran is about to attack israel, and that sent the market kind of into a free paul with the dow jones falling 2. 4 , its worst week since march of 2023. Jack when people get worried about the middle east, oil goes up but commodities in general have been on fire. Even copper,s which is usually sending a positive economic signal, can you break that down for us . Sure. Part of this is that the economy when its running hotter, that means that there is demand for things. And with copper or theres also been a lot of talk that its going to be needed for a. I. , so its gone there if being kind of an ev play to an a. I. Play, and thats helped it too. But you throw in these joe yo political concerns, and thats really lifting oil, helping gold somewhat, and so the whole commodity complex has been rising. Youve been seeing a lot of the commodity making, the stocks of the commodity makers going up, but that kind of ended at the end of this past week because when people get scared, they sell everything. Jack explain one more dynamic for us though. We were told that when inflation goes up, it reduces the value, the future value of the cash flows of these big tech companies. So they were a bad bent and cyclical stocks were the place to be in a higher Interest Rate environment. But big tech actually did well last week. Yeah. And i think thats what is a misunderstanding of really how this works. The tech stocks that dont really have profits yet, they get hit hard by those higher rates. But for Companies Like apple, theyre super high quality. Theyre going to make money regardless of the environment. And they also have a lot of cash. They dont have debt. And with these higher rates, youre actually making something out of the cash, so they end up doing well. Jack all right. Another important thing for investors is whats known as earning, elizabeth, and the earnings week, unofficially kicked off friday with bank earnings. Tell us about that. Yeah, thats right. Bank earnings kicked off this past week with jpmorgan, citigroup and wells fargo reporting. Earlier in the week Ceo Jamie Dimon made headlines with his big, long letter the shareholders jack very long. Yeah. He said, you know, among other things that Market Apartments were a little too optimistic on prospects for a soft landing. He also said the bank was preparing for Interest Rates anywhere from 2 to 8 plus which is a heck of a range. Now, when jpmorgan reported, it lowered its forecast on Net Interest Income which is a key profit driver for banks and, of course, that didnt make the market happy. Shares fell. And wells fargo, on the other hand, maintained its guidance for Net Interest Income. Citi group beat earnings estimates, you know, the turnaround story connell continues. Its one of the best performing bank stocks of the year and ceo jane frazier has been reorganizing things, and it seems hike that might be having an impact. Jack real estate was a concern on banks commercial real estate not doing well, should we worry about that, or is that kind of a oneoff in new york . Yeah, well, commercial real estate is more of a factor for the regional banks, so investors will be certainly looking closely to them to see the health of their real estate portfolios. Jack andrew, as a frequent flyer on delta, every plane is packed. Its kind of annoying as a traveler, but its probably good for the companies. Yeah. Delta kicked off the Airline Earnings season this past week with a good report for the First Quarter and offered pretty strong guidance with a seasonally strong june quarter. Deltas probably the best of the bunch in the airline sector, strong management, a decent balance sheet, a lucrative credit card relationship with American Express and a segmentation strategy, getting people who can afford it to pay more for convenience and other factors. You want to fly to europe this summer on economy, it costs you ,000 1 1,000 the round trip. Business class might be s 35,000. Jack ouch. Deltas betting on a return to Corporate Travel the customers, and thats positive for them. The negative had been higher fuel costs as well as labor. Jack historically airlines have been a lousy investment. I mean, they would have nice periods where they do okay, or but over the long term, not so good. Do you like the stocks here . Yeah, the stocks are quite cheap right now, among the lowest priced stocks in the entire stock market. Take delta, for instance, its trading for around 46 right now just around 7 times this years estimated earning. And robbie shanker, the analyst at morgan stanley, this week said the stock the has actually doubled, he sees the potential for 9 a share of earnings in a couple years. United and american trade even cheaper, 45 times earnings, and something could happen in the coming years is these Companies Hit profits and pay down debt, you could see more return of capital to shareholders, and that would be a positive. Jack still feels like a trade, not a longterm investment. They actually might be a longterm investment even though Berkshire Hathaway got involved a couple years act and then got out. They may not be trading sr. Deans as much anymore, but its going to be hard to win over investors. Jack technology isnt just powering the market higher, Ark Investments cathie wood shares her insight on where the opportunities are and how shes helping individual investors get access to openai, next. There are. Were you worried the wedding would be too much . Nahhhh. inner monologue another Destination Wedding . . Why cant they use my backyard with empower, we get all of our financial questions answered. So we dont have to worry. Empower. Whats next. Business. Its not a ninetofive proposition. Its all day and into the night. Its all the things that keep this world turning. Its the gotos that keep us going. The places we cheer. Trust. Hang out. And check in. They all choose the advanced Network Solutions and round the clock partnership from comcast business. Powering more businesses than anyone. Powering possibilities. Bounce back fast from heartburn with new tums gummy bites, and love food back. Students. Students of any age, from anywhere. Using our technology to power different ways of learning. So when minds grow, opportunities follow. Jack ark informs is known for focusing on Innovative Companies and suffering the volatility that comes with that approach. The firm is out with its annual list of big ideas, quote, disrupting the norm, defining the future which includes themes such as around artificial as well as, electric vehicles and autonomous technology. Joining me now is ark invests ceo cathie wood. Thanks so much for coming on the show. Thank you, jack. Very happy to be here. Jack so id like to start where a lot of these tech conversations start, with a. I. But your firm Just Announced that youre giving individual investors the opportunity to get a piece of openai which is still a private company new the Ark Venture Fund through the Ark Venture Fund. Clearly, theyre doing fascinating things, but sketch out the future for us. How does that Company Actually make money . Oh, well, right now working with microsoft theyre getting a revenue split of, you know, the millions of people who are using it on a daytoday basis, and i think theyre partnered with the company, microsoft, which has a the best penetration of the enterprise sector in the world. So they definitely picked a good partner because i dont know about you, but im using, im using gpt all the time to help me write things faster and just become more productive generally. Jack could we get to the process through which youre giving investors access . Something called ark venture, and its a different structure than the mutual fund or the etf or even the closedin fund a lot of people are used to. Can you explain . Sure. This is an Interval Fund, and its owned both public and private companies. You are our aim is 80 private, 20 public. And we can have daily inflows but quarterly redemptions up to 5 of nav. Now, you made a very important point out the the outset. We have been looking for a way to democratize Venture Capital. How many of our clients say i dont make enough money or i dont have enough in the way of net worth to gain entry into Venture Capital funds. Those are accredited investors. Most people, the vast majority of people are not accredited. And so were saying, oh, theres got to be a way. The Interval Fund was created actually in the 90s for this reason, for exposure to private equity jack i gotta ask cathie wood about tesla. You are closely associated with that company. Youre one of the most bullish e on it. Your argument is you should value it as far more than an automobile company. Can you explain . Sure is. Sure. We know that most of the analysts who follow it are auto analysts, but this is not an auto company. Its a robotics company. An Energy Storage a company and an artificial if intelligence company. Its the also a manufacturer of factories. So its a very big idea. Autonomous taxi platforms combine those three technologies, autonomous taxis are robots. They will be electric, and theyll be powered by with a. I. Those are three big ideas which are feeding each other and we with think will cause explosive growth and sawslike mar saslike margins. So instead of Gross Margins in the teens where they are now, we could see them scaling to the 6090 range 6080 range. Once tesla launches its robo taxi platform, and we believe this is one of the biggest opportunities in the innovation world today. Jack we just saw the chart of tesla, very volatile companying obviously. Even though it does have huge potential. Right now we think a. I. Is the biggest opportunity. Teslas the biggest a. I. Project in the world. Most of the names in our portfolio are there because they meet the four criteria in a. I. That we think will make a difference. Heavy got deep domain expertise, they are taking a. I. Seriously with their own hiring, and theyre being aggressive, going for the opportunity. They have Global Distribution and most important they have proprietary data, data that no one else has. Jon cc we could go on and on, but we do have to leave it there. Your insights are always fascinating. Thank you so much for coming on. Thank you, jack, very much. Jack the sports business is booming. Well take a look at how investors can get their head in the game and score some big opportunities next. Salonpas lidocaine flex. A super thin, flexible patch with maximum otc strength lidocaine that contours to the body to relieve pain right where it hurts. And did we mention, it really, really sticks . Salonpas, its good medicine. Jack from gambling to a paying college athletes, to the explosion in womens sports, the sports business is undergoing a massive transformation. Leagues and teams are netting huge revenue from tv and streaming. Sports betting and apparel sales. And theres an opportunity here for investors to score big. Barrons editor at large joins the panel. If so, andy, i know all eyes are on a. I. These days, but at least in human business, i think the most interesting trend is whats going on in sports. Of you are just back from the biggest conference in sports, what happened and so was the soup . There was a lot of crab meat in that soup, jack. [laughter] im glad youre asking about that. It was amazing. A lot of big names in the world of sports. Its such a sprawling business, trillion dollar business. Youve got the teams, the leagues, broadcasting, apparel, merchandising and, yeah, its growing fast. You mentioned some of those facets of the business. Gambling, for instance, 30 states now have that. Americans wageredded 12billion last year. Dingty 120 billion. Digitization does things like an lit ec es, gaming as well as streaming. So thats driving the business as well. And thats helping to drive globalization. You know, a lot of businesses talking about how globalization is slowing down in this environment. Not true at all for sports if you think about it. The big teams in europe like Manchester United soccer team as well as teams like the new york yankees, the Denver Nuggets and, you know, all these big names increasingly have global footprints because social medias pushing out clips all around the world. Jack you mentioned nil, this name, image and likeness thing where if youre on instagram, youre a decent college athlete, you can make hundreds of thousands, in some cases millions of dollars. Tell us about what thats doing. Yeah. Thats unfolding right now. Its a little bit messy state by state. But if youre a Womens College basketball player, you know, out there or, for instance, you know, a football player, theres a guy at the university of houston i think we have a picture of him, damian dunn, you know, working for a local ford dealer getting a few thousand bucks in his pocket. But, you know, the big names out there, bronny james, arch manning and Caitlin Clark, the superstar Womens Basketball player at the university of iowa, they are getting they have the value of 34 million a year annually from if advertising which is, of course, a sea change for amateur athletes. Jack sure. So Caitlin Clark trove this enormous viewership for the Womens College basketball championships. But now that shes going pro, is that going to sustain itself, or is it going to go away . I mean, look, Caitlin Clark is a generational talent, but there are other players who are really exciting to watch. For example, south carolinas Tessa Johnson had a fantastic game. Is shes only a freshman. And Uconns Paige Bueckers is staying at the school. So i think the momentums going to continue. Its not just College Basketball for women. The wnbas been doing great. World cups been doing great. Coco golf is reviving golf tennis, excuse me. [laughter] and theres a professional hockey league. And then the you have the professional womens soccer leagues, teams, and those are doing great. The valuesed to be a few Million Dollars not long ago, now 100 million teams. Theres a transaction, ron burkle, a billionaire, sold i one for over 100 million. The l. A. Team is probably going to be worth 180 thats for sale. And you have got these boldfaced names who own these teams, alexis ohanian, chelsea clinton, jenna bush, sheryl sandberg, i mean, every famous person, the pritzkers are in there, you know, just all across the board, theyre in these teams. Jack so the boldfaced name, a andrew, even the rest of us can get a little piece of the action in a few cases. Tell us about that. Well, there are two major public sports plays, the first is Madison Square garden spoiforts, and it owns the New York Knicks and rangers, two of the best teams in the nba and nhl. Stock trades around 180 right now. They valued the company around 4. 5 billion. The teams though could be worth around 99 billion with the knicks alone worth 6 billion. Why does it trade at such a discount . Call it the dolan discount, the controlling family, jim dolan, the chair. Theyre viewed as being not willing to sell the teams or the company. So you have weve argued at barrons that the stock looks attractive at these levels because the company could sell an interest in one of the teams, and there could be some pressure if on them to do something in the coming years. The other one is the atlanta braves, the Baseball Team which is one with of the best franchises in baseball. Fortunately, for investors, its controlled by john malone, and hes 83 now. And its viewed that he may look to sell the braves in the next year. The stocks around 40, and he could get maybe 3 billion or more for the braves which would make a price of 50 or more for the team. Jack more billionaires than sports teams, so i suspect these values keep going up. Thanks, andy. Thanks, guys. Jack ben and elizabeth have a pair of actionable ideas, and andrew bary will break down the complicated bidding for paramount. Stay right there oh, yeah, man. Take it from your inner child. What you really need in life is some freakin torque. What . The dodge hornet r t. The totally torquedout crossover. Jack andrew, theres a messy and somewhat controversial situation happening over paramount. Can you break it down for us . Pararah a mounts been a tough media stock and a tough sector in the last few years, the stock is at 11 right now down from 50, and now the controlling shareholder, which is National Amusements, looks like it may want out of paramount. And its been reported that its negotiating a teal with a Company Called skydance which is a private company which is controlled by David Ellison whos the son of oracle founder larry ellison. And under this potential deal, National Amusements may be taken out, but the public shareholders will remain. And to make it even worse, the public paramount might actually buy this private Media Business from from ellison for a couple billion dollars or more and further dilute shareholders. So its a messy situation. Analyst rich greenfield has called it chaos and dysfunction at paramount. The directors seem to be controlled concerned about it. Four of the seven are not going to stand for reelection, so its a messy situation right now there. Jack i think we need a diagram. Green fed is often right but also negative on legacy yeah. And one thing that could be aping thats positive, if this deal falls apart, thats probably the best thing for paramount shareholders. Jack is there a bull case to be made for legacy media . The stock is very depressed, and you could have a takeover of the entire company. Apollo, the private equity firm, is reportedly interested in buying the whole thing which could be a nice bump relative to where the stock is right now, so investors are probably hoping for that or maybe a turnaround in the business or better trends. Jack by the way, apollo is yet another part of that sports business we were talking about, josh harris buying the washington commanders. Lets go to actionable ideas. Ben, youve got one for us. Im looking at bank of america, its kind of the antijpmorgan. With jpmorgan dropping after earnings, im looking for bank of america which fell 2 because of jm mayor bans number to get jpmorgans number to get a bounce. The Net Interest Income isnt going to be great, but i think theres just so Much Negative sentiment that anything that looks slightly positive could give the stock a bump. Jack and, elizabeth, youve got some advice. This upcoming monday, april 15th, is the deadline to file your income tax returns. Now, if youre not ready to do that, you can request an extension online. Thatll give you until october 15th. You just have to remember that that is only an extension to file, it is not an an extension to pay. So if you think you will owe the irs money, you still have to pay it by monday. Youll is to do your best to estimate and pad your estimate to be on the conservative side because you e dont want to end up owing some penalties. Jack its cheaper tan paying the penalty. Exactly. Jack thanks, andrew, elizabeth and ben. To read more, check out this weeks edition of baer rons. Comful youll also get a longer interview with cathywood, dont forget to forget to follow us on x, and thats all fors us. Well see you next