Into a frenzy. We want to show confidence. We want to show strength. We want to show strength as a nation and that is what i have done. And we have done very well. Mark the president also told woodward the virus is more deadly than the flu. In february and march, mr. Trump said publicly that the u. S. Had the virus under control. He repeatedly compared it to the flu and said it could they do way. Meantime, democratic president ial nominee joe biden says the president is responsible for the deaths of tens of thousands of americans from coronavirus. Campaigning in michigan, mr. Biden said the president failed to do his job on purpose. It is another sign of life returning to normal in new york city, Governor Andrew Cuomo says restaurants in manhattan can reopen for Indoor Dining september 30, capacity limited to 25 . Governor cuomo says the city will dispatch hundreds of inspectors to make sure guidelines are followed. He is calling on citizens to speak up about violations. Hurricane maria may have devastated puerto rico even more than originally thought. U. S. Researchers estimated nearly 3000 people died when maria struck the island in 2017. Now they are taking another look, saying some deaths may have been missed. At the time, puerto ricos government came under heavy criticism for severely undercounting the death toll. The government raised the official toll from 64 to nearly 3000 after an independent study by George Washington university researchers. Californians, many without power, awoke to a darkorange sky coated cars as hundreds of fires and costs from a powerful windstorm blanketed the state in dense smoke. Power outages are the latest blow for california, where Climate Change is making weather more extreme. Toperatures have soared records from napa to los angeles, formed forcing estate power grid to the brink. Thanires have torched more 2. 5 million acres this year, the most on record. Global news, 24 hours a day, on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Crumpton. This is bloomberg. Caroline from bloomberg World Headquarters in new york, on caroline hyde. Joe im joe weisenthal. Im romaine bostick. The s p 500 climbing 2. 5 percent. Joe the question is, whatd you miss . Caroline you can debate what lies ahead for 2020 but the real debate is how this year will alter trajectory of businesses. Inck stepford suffered todays tray, because of reliance on small and medium businesses during the pandemic. Thee trajectory that trajectory the trajectory of tech. Joe crazy action over the last five days, lets look, you look at nasdaq, got clobbered, down 7. 3 the last five days. Better rebound today. End, butstill at the still not back to where we closed monday. So still quite a bit of work to do. Romaine a lot of folks are talking about valuation levels. We saw some of the forward pe ratios come down, still the highest since 2004, but the comparison is to what we saw during the. Com bubble the. Com bubble. Mega stock names have doubled and tripled in some cases but Revenue Growth has grown as well. Median earnings and sales growth were 52 to 32 reportedly for the high flyers, so fundamental metrics act up some of those moves. Caroline maybe just five Companies Support the s p 500 index, because that is where most of the revenue comes from. I asked yesterday what the first thing would be that you looked at when you woke up, and tesla is what you should have been looking at yesterday. Today . Well lastnt sleep night and dont remember what i was doing at 4 00 a. M. This morning. Anyway, this is wcld, and etf for redhot an etf for redhot cloud stocks. It bounced today after falling below yesterday and is still at a pivotal point. It is almost like the future has not been determined, or which way it is going to end up on this line. We are joined now by leigh drozen, founder and ceo of estimize. After all the guests we have had over years, i feel like you know the cloud stocks and random sign, data doc, dock you smart spreadsheets and all this stuff. These have had an incredible run, these names. Romaine showed the chart of tech pes. Thesee fundamentals for types of companies so fantastic that they continue to power higher . Leigh they are fantastic. And here is the bottom line. We continue to suffer from significant cognitive dissonance regarding just how big the Addressable Markets for these companies are. We have had conversations on twitter about what happens when they get bought up, cant they be replaced, are their earnings margins safe . And the thing is, none of it matters if the Addressable Markets are so much bigger than what investors are betting on right now. And if you continue to grow at 50 revenue yearoveryear, good luck shorting that stock, i right . Multiples can go to the moon, but who is going to get in front of that . Maybee going to get days, a few weeks of rotation and profittaking in these names every couple quarters. That is natural. We have seen it before. But over a medium to longerterm time horizon, i dont see how you get off this train right now. Caroline trade is dictated by the buy side, and that is where estimize is different. You bring together estimates on than theide rather sell side. These bouts of volatility, are they longterm committed or do they like the trade atmosphere . Leigh when we look at the data for these growth names, this is why our platform has been so good at these specific names, because the investors on the buy side are looking at rational, reasonable growth rates two or three or four quarters out, relative to the sell side where they may just be straight lining the growth. And if the Company Guides up, they catch up to it, right . Datawe are seeing in the that leads me to believe to say the party isnt over on these names is that we are still seeing upper revisions still come at two or three or four quarters out for those highflying names. In some of these names have gone 60 ,growth rates of 30 to june went to 300 something, and it is not going to be a onetime thing because of the pandemic. It took a trend that was already taking place and lit it on fire and itew gasoline on it, pulled the Addressable Market adoption forward. And we dont see that stopping for at least another year. And then, lets look at the comps a year from now. Then, it might get more difficult. Romaine fundamental changes that are going on here are remarkable. But wind would get to the point where we stop talking about tech as this broader thing and maybe dice it into things we are more able to understand. I think some of the valuations get you into this murky issue, because you look at tech as a broad basket when some segments do deserve the valuation they have. Leigh yeah, you have to bifurcate this thing into names with strong, underlying fundamentals. You talked about multiples relative to the actual tech bubble in the 90s, where the multiples for the Big Tech Companies really arent that crazy. Some Software Names are getting a little nosebleedy, but certainly not where they were in the tech bubble. And then you get tesla and nikola, these are just mania stocks that are obviously riding on the back of a ton of liquidity in the market, and a really strong fundamental group of tech stocks. But they are definitely a set of names were if you want to play longshort, this is a great time because there is a lot of dispersion in the quality of those multiples. Going to askst about that, because some have really bombed. Major duty, totally bombed over the last five days. Or slack. Slack is a company tons of people are into. Journalists really like it. The stock bombed yesterday even though earnings were, i guess, ok. So there are landmines in the sector, not to mention the ev trade, which is adjacent to all this, which tesla showed is very risky. Leigh yeah, this is where the idiosyncratic bets that are made by hedge funds and firms, where the analysts and the pms are going to make their money. And there is plenty to be made right now. Into opinion, to dice this what you want to be exposed to end what you dont on a longerterm basis exposed to and what you dont on a longerterm basis, you pick the stronger names. And that is because there is a wave of liquidity moving into this space by funds that didnt have too much exposure and now they have to get on it. So you dont want to be that fourth, fifth, sixth name down the bucket. Microsoft has a big teams business and slack is going to take the brunt of any kind of understanding from people regarding competitive and margin pressures. And it is the same thing across the board. What i want to be in pager duty . I would want to be in the best. Dont screw around with higher multiple names that are down the stack. Stay with the best in breed. Caroline and a wave currently behind you. Leigh drozen, founder and ceo of estimize giving us a picture. Its a beautiful one. Romaine i love his backdrops. Leigh drozen is great. Love having him on. Will fare in an everchanging economy,. Remember when tesla was the most tainted stock . If you dont like our culture, by the stock, said the ceo. We talk about it next. This is bloomberg. Abouto we are talking frothy public markets. And when you have this boom and you dont know if it is a mania or just a boom or a bull market, people on the outside want in on the liquidity, they want in on those levels. Romaine one of the companies that wants in on that is palantir, the investors do. We got where they want to do a direct listing. Caroline, this is a company that frequently, its name is preceded adjective of secretive, mysterious, but it is a company that has a lot of revenue. Caroline they have been focused on defense contracts, sometimes going far controversially, surveillance action, going for data. That has sometimes been controversial, but also controversial is the governance of the business. We are seeing a lot of Voting Rights being held by very few white guys. Joe all kinds of interesting aspects of the company that make it different than some of the other tech darlings out there. Thats ring in our bloomberg te bring in our bloomberg tech reporter lizette jackson. 2020 siliconve the valley eat those, that you might expect among one of these players. Lizette absolutely not. They prided themselves on this. They ditched Silicon Valley and relocated headquarters to denver a couple weeks ago to drive that point home. In a weird twist, the ceo this morning said multiple times, dont invest in this company if you expect us to change our internal culture, dont invest usthis company if you expect to change our stance on supporting work the u. S. Government and its allies do. He wrote a very feisty letter, talking aboutf1, sometimes controversial work that is done providing technology, allowing groups to integrate their data and mine it. This companysaid separates itself from the normal Silicon Valley eat those, but to a certain extent it is almost more honest about itself. A lot of Silicon Valley companies are cut from the same cloth, peter thiel and a lot of the folks at this company i guess are not ashamed of the things they do. And it seems like we have seen other Corporate Governance issues with Companies Like facebook and elsewhere, it seems investors still embrace these companies as long as they produce Revenue Growth and profitability. They arein some ways, cut from the cloth in terms of providing cuttingedge technology the government does when theyccess to, build solutions that take 18 months to get going, where Silicon Valley is cranking out Software Updates every two or three months ended takes them 18 months just to figure out what they want to build. So they are similar, but quite different than google. Google employees staged a protest and got google to discontinue its agreement to do which youven, probably remember was a Computer Vision that allowed for drone targeting of u. S. Enemies, and palantir snapped up that project right away. It is different from that perspective on corporate governments from that perspective. On Corporate Governance, you are absolutely right. Not only do they have a longindependent board, they have a manager f1 that says they dont have an independent board of directors and they will get one, but voting power is concentrated in the hands of its three founders in perpetuity. And an Institutional Investor route called them on that this morning to change that. They did not address that in the investor meeting this morning, a with analysts after the call, even though the question was asked. Soe thanks to bloomberg lizette chapman. Coming up, as investors look at the morals of companies they invest in, we are seeing specific diversitydriven ipos. We have that conversation next. Caroline the pandemic has changed the way we work, live, and how we think. Today, a Long Term Stock Exchange started looking for companies that are committed to governance principles. Joe its a new experiment. We see new stock exchanges coming out that try to have different premises. But as you point out, the idea hopefully is that the platform ungerterm goals, longerterm visions longerterm goals, longerterm visions. We will see if it works out. It will be an interesting experiment. Romaine yeah, im curious to see how this plays out. We talked about the trend of investor willingness to embrace companies, but at the end of the day, it is still profitability. Caroline whether we still see to pressure for companies embolden and dominate these services is not yet known, is our guest. A moment ago we were speaking and howiving diversity, do you see companies becoming missionbased . Caroline, on the one hand we are hearing a lot of talk from companies and seeing small dollars go toward these initiatives, but finally we are seeing more companies vote with their feet and put more company toward these in exodus. Is seeking tog raise 200 million for a Blank Check Company for womenowned and womenled businesses. More than 40 billion of stax raised in the last, huge moneymaker, lots riding on these stocks and still only one ceo was a woman. So when we are looking at the dollar amounts going to women and minorityowned as this is, at least in one corner of finance that is redhot, you dont see a lot. A ceo on earlier from the longterm stock exchange, and he talked about the idea that this was day one and it was going to take 18 months before you start to see any significant amount of lifting. Aat is the advantage of company, to do Something Like that in a way that would bind responsibleng to be and maybe not have the same flexibility as competitors . Sonali colin wright, because listing i right, because listing is voluntary. Investors are saying enough is enough and we want to invest in companies that are more responsible in terms of the environment or social aspects are governance and those investors are driving the change. At the end of the day, it is how much money is going to these initiatives in terms of indexing for these changes, in terms of Holding Firms accountable. Was look at what companies were disclosing the terms of how many women they had at the top, how many black executives. It was hard to find and nowadays, more companies are i disclosing these networks. Disclosingtarily these facts. Goingt see Companies Public on the exchange on day one. This will take a long time. Analysis, sotastic nali basak. Whatd youfor miss . Bloomberg technology is up next. Have a great evening. Romaine this is bloomberg. Emily bloomberg technology. Bloomberg technology. Welcome to emily welcome to bloomberg technology. Bloomberg technology. Getting 4 , tesla climbing back after its worst day ever come of the only certainly only certainty as the market