Sterns. Shares closed up more than after ancent 8 analyst at wells fargo boosted evaluation by 40 . They cite potential for m a and margin expansion. An outperform rating on sprint. Apple beat android in mobile shopping on christmas day. Apple operating devices were used to make 20 of all e monday, purchases on compared to five percent of Android Device sales. Fundraising plans were disclosed in an s. E. C. Filing today. Venture capitalists are flocking to companies tied to the virtual current see bitcoin. They raised 25 million. Very goods been a year for the mutual funds industry. U. S. Investors poured money into stock mutual funds more than they have in the last 13 years. Largestt taking the mutual fund. It beat out pimcos total return fund. Executive is chief and cofounder of adviser investments, helping to oversee nearly 3 billion in investments. Jim odonnell is the chief Investment Officer of forward management. They have 5. 5 million in assets. Explain peoples expectations. Oing into 2014 will they have to manage those expectations . Absolutely. Anytime time you get the rubber band this extended, when large andstocks are up over 30 smallcap stocks are up almost 40 , youome cases over really have to dampen expectations. I do not think you will see a repeat of that in 2014. That is a tough act to follow. Talk about some of the managers and the way you organize your investments. There is almost a buffer between the investor and the manager that takes a look at the fund. We build portfolios of managers. We buy mutual funds run by some of the best managers, we think, in the business. Prime cap. Tell us about it. These guys are growth managers. They are looking for companies that have they think there is a catalyst coming. The stock is not selling at super high multiples. A want to buy it now, wait for the catalyst to hit. The price will go up and they will sell. They are Holding Onto Things like roche, Texas Instruments. Who has talked about Texas Instruments lately . In companiesvalues like that, rather than twitter and facebook, things of that nature. In pharmaceuticals. Big in biotech. Big in technology. It is stockpicking. Rather than by an index in 2014 tom a you may have to select people who look at more specific companies. Absolutely. I think we have seen some outperformance i some of the indexes. There has been a bit of bandwagoning. As we move into the next stage, it will be more difficult, more stock tickers. A lot of people talk about the stock pickers market, alpha generation stuff. If you get good managers, they are always generating value. That is what this is all about. Ask you talked about a managed health care fund. How did you do that . And has beenelief for some time that demographics, technology all of that combines to say that if you want to overweight a particular industry in this country or in the world, really, you want to overweight health care. Most of them, over the course of time, do not beat the market. Health care does. With a good manager, you can not only outperform the market, you can do it with less risk. We looked at who is a good diversified manager who is playing with pharmaceuticals and biotech companies. Who is making artificial knees . And Service Companies like United Health care. The Vanguard Fund is now 30 million in size. The same teamhat runs a tiny fund for hartford, Hartford Health care. It is a 700 million fund versus a 30 billion fund. Having a smaller fund which is much more goanywhere is more nimble. They are up 40 some odd percent this year. I want to get your thoughts on real estate. What do you think real estate is going to do for investors next year . I think that real estate has been one of the asset classes, especially, where there have been a lot of Interest Rate concerns that have been somewhat overblown. You have an opportunity to buy a real strong asset class with valuations really cheap, and sentiment is pretty washed out on the negative side there. As we go into earnings season, early january, the most important thing to remember is the earnings visibility these companies have. Really, they have complete earnings visibility, because of the leases, through yearend. Very few Companies Know exactly how much revenue they are going to print in the december quarter on january 1. Excellent i hear of Real Estate Investment trust, i think of payouts. I think of dividends. You have been looking at dividends for largecap stocks. You would much rather earn your income from Capital Gains fromowth than you would monthly or quarterly payouts. There is a manager at Wellington Management who has a fund for bangor called dividend growth. He looks for companies with what i call battleship balance sheets, really strong battleship alan sheets that allowed them to continue raising their dividends. The dividends are not necessarily very high yield. They are probably just a little bit above the market. What you are really looking for is growth in the dividend, which will then accrue to the stock rise, because investors will pay more for that growth. The growth of emerging markets. Do you think this is going to be the year that investors in emerging markets are finally going to be rewarded . I think that over the past decade, investors in emerging markets have done to modestly well. Over the past 18 months, it has been a bit of a rough ride. There has been a flow of capital. You are seeing the end markets for many of these emerging countries are improving. As the u. S. Economy improves, as europe improves, and chinas outlook for 7. 5 gdp growth, rather than seven percent 7 that bodes well for other emerging countries. We have been looking to emerging markets and the growing middle Class Consumer to drive a lot of stock prices. I think what investors have to remember i prefer having an active manager buying my emergingmarket stocks, europe stocks, and japan stock. Everybody is excited about overseas right now. The nikkei is up. Do not forget the dollar is also up. When you translate it back for u. S. Investors, it is not as golden as it looks. For tokyo is not bad, but it is not 55 in u. S. Investors pocket. How does it resonate with investors who always want the next new thing . Our clients are very happy sticking with investments we have done all the work on. It means they are paying less in taxes at the end of the year. You can always buy the fund of the month club or the manager of the month club. We are not very interested in that. We want longterm returns, diversified portfolios. We got our clients through the 2008 debacle, through the bull market. We are all set up for 2014. Toas dan says, do you want chase a fund . I think the temptation always in january is to be a bit of a bandwagon, to read some of the popular magazines. Opt to do it yourself. Potentially, that can put you in the wrong fund at the wrong time. Ettore to buy a longerterm outperforming asset class. It may be a little bit out of favor. Point. At a good entry go toward making money over a three to five year period. My thanks to you. Thanks very much. Coming up, some details on a tax shelter for the ultrarich. It is right here in the usa company telltale has transformed blockbusters such as backed the future and Jurassic Park into profitmaking video games. They hope game of thrones is going to get fans hooked. Is a dinosaur bite. South dakota. When you think south dakota, what do you think of . Buffalo on the prairie . Mount rushmore . It is also a place where the super wealthy can shield their money from estate taxes. Mosttory is one of the popular on bloomberg. Com today. I am joined by zach mider. You are a popular guy today. Tell us about this idea that in south dakota there is a perfectly legal way in which very rich individuals, because it makes sense for them, would be able to shield some of their money from estate taxes. How does this work . You set up a special type of trust you can only set up in certain states like south dakota, called a Dynasty Trust. It allows you to set up a trust that lasts forever. Because it can last so long, rather than having to pass your wealth down to your kids, who have to pass it again and cant get taxed every time they pass it down, you can have this trust last forever and give each generation just what they need. How did this come about . Was it to attract money into south dakota . Exactly right. In 1983, they got rid of this ancient rule that has been in English Common law for centuries that says a trust can only last a certain amount of time. You have a trust that is supposed to last in perpetuity. And what, big money families post office boxes to avail themselves of this . Depending on whether you like south dakota. You do not have to move there to take advantage. Like the pritzker family of chicago . The carlsons, who own the Radisson Hotel chain. All kinds of people take advantage of this. Kinds of people responding to your inquiries when you did this story . Would they talk about the use of these Dynasty Trusts . Not many of them wanted to talk about their estate planning. We did talk to the wrigley family. They said they set up south dakota trusts, but not for tax purposes. For other reasons. Is it expensive to set up these trusts . Compared to the amount of wealthy can potentially shelter, not really. One estimate we saw said that you could set up a trust that within 90 years could be worth 1. 9 billion compared to less if the samellion trust were set up in new york state. The trust get set up. It is never what you would call pay money event or a transfer of assets into an entitled account. When you ever get your money out of the trust . With a Dynasty Trust that lasts forever, each generation would be able to ask the trustee for distributions. But they would only take what they need. They would not have anything to leave to their errors. Their heirs could cap the same trust. Be the does not seem to initial premise of the law, or maybe it is. When congress set up the modern tax law, they just assumed that no states would ever get rid of this rule against perpetuities. The tax laws are designed with the idea that trusts cannot last forever. The obama can, administration has recognized this loophole. I have proposed closing it, but it does not look like anything is going to happen. Money, youave enough can set up your own Trust Company in south dakota. You do not have to have somebody else manage the money for you. You can have them doing it anywhere in the world. You need an office in south dakota. You need an address, a desk and a phone. But for the most part you can have your people, wherever they are, managing the money, wherever it is. Has this benefited the state of south dakota, other than perhaps filing fees . It raises a little over a Million Dollars per year for the state of south dakota. They also figure it has created about 100 jobs at state trust companies. The doors off. Ng south dakota would say it is better than nothing. We might as well bring in this money that would otherwise go somewhere else. Trusts, buffalo, and mount rushmore. Thank you very much, Bloomberg News reporter zach mider. Read the whole story on bloomberg. Com. Holiday season means parties. The real hangover can be dealing with the mess everybody left behind. Coming up, meet a new company you can turn to. You do not even need a mop. It is the season of parties, and if you are hosting one, you may want to bring my next guest to the cleanup. Michael sharpe traded in his job at bank of america about three years ago to create a Company Called myclean. It is a service you can book online. It is finishing the year estimated to have about 4. 5 million in sale, going up to about 6 million. Explain once again what exactly is myclean. We allow the consumer to do everything online. You can go through the entire process of booking. Do on a you want to logistics bases, you can do online. And you can do it as a one off experience orton sign up and say, i live in this area and want someone to clean my house for the next 10 weeks. We are actually incentivizing people. A majority of the business is subscription based. Customers looking for a biweekly appointment up to every two weeks get a 10 discount. Once every four weeks, a five percent numeral five percent discount. We have current clients who hire the same cleaner on a regular basis, versus clients who use us on a oneoff basis. You are getting 500 new sign ups a month . Ask on average. Over 1300 visits a week. And we have subscription clients. We have Office Clients getting every night cleaning, down to residential clients who say, we want you to come every four weeks. Ande started about parties the holiday season. Are you getting any calls specific to that . This time of year, our Business Model is upside down. Business isf our subscription clients. Around the holidays, a lot of our subscription clients are going away. That leaves a lot of extra supply. Our cleaners want to make money around the holidays. We are happy to do postparty cleanings. I did a special promotion where you can get a helper Christmas Eve or christmas day. We are doing something similar for new years eve and new years day. We are getting lower demand on the recurring basis. And we have party claims and things you mentioned. In the next last six months, where would you like the company to be . We want to go to a mobile platform. We have not developed technology that lets customers booked directly on mobile. That is a big opportunity. Once that launches, we are ready to tackle our next city, which we plan to be chicago. Chicago is next. How did you select chicago . We wanted a city that had a similar demographic to new york city. Young, technologysavvy professionals. A relatively dense geographic area. We found there was great demand for a service in the city. It is a beautiful city. We want to come clean it up for you. Bank of america. You were there and decided it was not the career for you. You say that life takes many changes. How did this occur to you . I knew toward the end of my stay at bank of america i had a great experience. Still inmy friends are the financial world, and they are doing great, and i congratulate them. Have they signed up for myclean . They better. I felt i knew my clients. Not for me. Life was i wanted to do something entrepreneurial. I thought this was a huge market, very fragmented, ripe for a disruption with technology. At was what got me into the business. Michael scharf, chief executive of myclean. It is 26 past the hour. That means it is time for the markets. Dow jones industrial average unchanged. S p 500, also unchanged. The nasdaq, down 10 points. Coming up, a look at the world of online gaming. This is taking stock. Let us go to olivia sterns. This past year, apple ceo tim million, a 4. 24 slight raise from 2012, according to the Security Commission filing. Received 4. 25 million. U. S. Ernment reports shows crude supplies fell to the lowest level since september. The turkish manufacturer of Food Products and owner of godiva chocolates has taught a u. S. Million. Pany for 221 they hope to grow in the north america market, benefiting from the distribution network. Thanks very much, olivia sterns. Place, to our right right time segment on taking stock, the videoGame Industry, a 20 billion business a year ago, according to the Entertainment Software association. One of the pioneers, telltale games. They will release tales from the borderlands and game of withes, or a partnership hbo. I am joined by telltale games chief executive dan connors from san francisco. Good to have you with us. Let us start by talking about the basis for telltale. How did you get into the game business . I am an old gamer. Back ind in lucasarts the early 1990s. I founded telltale games with a cofounder, and we wanted to take advantage of the shift in the business toward digital distribution. We wanted to build a plan around episodic gaming as a way of getting people to play games that they could experience over time, and really get into the world very deeply. We built telltale from the ground up to do that very thing. Episodic gaming. Can you explain how that connects with brands such as the walking dead or game of thrones . Most people are familiar with them as serial entertainment on television, on amc or hb it is the way people are most used to experience the content. They get a segment of the story, and then it comes in weekly seasons segments until the season ends. He deliver games, one a month, each with a story that ends in a covering or. It develops characters over time and allows people to be part of the experience throughout the entire time the season runs. How did you determine which brands, which franchises to go and investigate that might turn into successful games . The history of telltale, we have looked at different places. We looked at the Game Industry, franchises that were doing well in the Game Industry, that fans of video games could recognize. We would start trying our episodic series and see what the experience is like. We have always been a big part of the graphic novel world. Our First Franchise is one called bone. There is a scholastic graphic novel. They made up dead the top 10 books on the best selling graphic novel list. We knew there was resonance there, something deep and something we could get into and really explore and bring to the world of videogames, and really take advantage of. Do you need resonance at the box office when it comes to movies in order to qualify to be a potential target for a game maker . The only movie franchises we back to theur uture and Jurassic Park. They are old. For our Business Model, franchises have been around for a long time that have turned into a show, that have an audience that really loves the content and is really committed to the content. I think when you go and you take the blockbuster, it could be there for two weeks and then be out of memory. The product does not stand a chance. If it is Something Like game of thrones, you know there is a lot there. There is a lot of passion for the franchise. Rely on to build our interactive narratives. I wonder if you can expand on that. You need a firm story. You cannot just be graphically fabulous. All of that counts. But there has to be some depth, some story to tell. Telltale, obviously, you can tell from the name, we believe the Game Industry has ignored this part of the experience. Gotten theas gameplay and the story have been at such dissonant points. You could not introduce drama and character relationships on a real level. If you are running through a level, shooting everything you see, and you finish it and want to have a tender moment, it is not going to read. Figuring out ways we can allow people to get into a space and interact with characters, with a story, in a way they feel like they are part of the story, impacting the story, that has been a big drive for us, having source material like game of thrones that is telling a great story. It helps with that immensely. Did you get response from potential customers who want to interact not only with the story, but want to learn about the plans for the future, that demand the story go in a certain direction . , part of what we do is really, we focus on the way you experience the story. Like any good story, it is going to go a lot of directions. Major plot points happen. We allow players to experience the narrative in a way that people want to experience. They are investing in the characters they are meeting by choosing how they behave around them, what they say to them, what actions they take towards them. The characters in the remembering that. And they are coming back to the users. And now they have the relationship with that character. If i said something nasty to a character in the first episode, when they show up in episode two, they may not give me the rope when i fall off the cliff. The user is setting up a circumstance they have to exist in. I think that is part of what draws people in so deeply. I promise i will always throw you the rope. You have any recommendations for people who may not be experienced veteran gamers . What would you recommend as part of the telltale stable to get started . Landed inlking dead a place we have been working to get to for some time. It is in a place where it one game of the year in 2012 on the play, as well as on x simultaneously. Between casual, tabletbased, phonebased gameplay and telling dramatic gamer content at the same time. We have been trying to get their at the same time. We have people who sit on the couch and play the game and make decisions together, talk about what they are going to do next, and enjoy it as if it was the next episode in their favorite show. I think walking dead brings the experience of integration, story and interactivity, in a way that feels like you are playing a series and are part of it. Thank you for being art of taking stock turco telltale chief executive and cofounder, dan connors. Coming up, millennial is an imprecise word to describe around 80 million individuals in their 20s. How companies believe they can ofl to this collection consumers. Has the career of keanu reeves hit rock bottom . Matrix is af the distant memory after his latest box office bomb. Apple has released a statement urging its shareholders to vote against a proposal by investor carl icahn to increase the Company Share buyback and increase the company dividend. For what is ahead for wall street next week, i want to bring in olivia sterns. Onhappening next week tuesday, we will get u. S. Consumer confidence data. According to a bloomberg survey, Consumer Confidence rose to a threemonth high in december. Outgoing fed chairman ben bernanke will address the Economic Association annual meeting four weeks before he leaves the position. Data, weekly initial jobless claims, and home prices. As a reminder, wednesday is new years. U. S. Stock and bond markets will be closed. Thanks very much. On the surface, a millennial is any of the 80 Million People around the world who are in their 20s. However, there is a lot more to it than that. Only a handful of companies seem to have cracked the code for connecting with young consumers. Olive garden and linkedin got it right. To tell us more about what millennials are looking for, i am joined by zara kessler. You are in your 20s. I am not going to refer to you as a millennial, but you have to help us. What is a millennial . Is it really a badlyused term to describe what marketers are trying to get, which is profits . Millennials are generally described as someone born 2000, in theand range of 80 million young adults. We are kind of the next big group that is going to be buying a lot ofngs aning th wo is a l of talk about, what do we want or not want . Us . Do you reach we are all connected over social media and the internet. How do you get to us politically . How do you get to us from a business perspective . In a way, it is a misnomer. It is not necessarily a homogenous group. You get a lot of detail about millennials that does not have any basis. The difference between a 13 yearold and a 33yearold this is a huge range. Abouthard to generalize millennials loving one thing and paint another. And we all have five different personalities on the internet. A slippery slope to say millennials do one thing or another. Let us suspend our thoughts. Perhaps young people who have grown up with technology are able to embody a pushback against authority. Is this something you always tond because of access information . We are interconnected. We can reach people around the world very easily. If we want to push back against something someone is telling us, it is easy to mobilize forces. That pushes back on the stereotype of millennials. You have people writing to say, we are not all the same people. Whether it is a tv show or a company trying to market to us, we are a lot of different people. We are not going to fit into one category. Having said that, there have to be Companies Looking for this pocketbook. Are there some brands that resonate more . Grew up with those people. With iphone, linkedin google. Take your parents to work day, google started a couple of years ago. You have a lot of kids living at home, partly because of economic circumstances. A lot of people make fun of this notion of helicopter parenting, having been given trophies for existing. But they are close to their parents and want to share what they are doing on a daytoday basis. Like role can someone Something Like netflix play . This is an ondemand demand service that has transformed the way people consume entertainment. You do not necessarily need patience anymore. I think netflix has had a very interesting year. Tois not only this ability binge watch shows and get anything we want to watch at the tip of her fingers. We also saw house of cards and orange is the new black hair go black. Do we need cable anymore, the things our parents had . Maybe the computer is our tv from now on. The idea your computer might be your tv or smartphone is there a general feeling that all of this is something that is a right, that is not necessarily a privilege, but is part and parcel of being a younger person in society . Our lives are kind of dictated by these devices. They give us freedoms and allow us to connect in a lot of ways. Also means we are always there is not as much of a divide between working and being we are always on call. For example, are you constantly checking in . I am always connected. There are stories about millennial sleeping with the phone next to the bed, and i am guilty of that. Thank you very much. It a Bloomberg View columnist. We look at keanu reeves. His movie has taken a beating at the box office. Has he lost his luster as a leading man . Are the studios paying too much for his appearance . Keanu reeves was one of the leading man who could anchor a major studio franchise. Maybe not nowadays. In the matrix trilogy, warner bros. Made nearly 2 billion worldwide, and keanu reeves earned a reported 200 60 million. His latest film, 47 ronin, cost nearly 200 million to make. So far, it it has grossed under 20 million worldwide. Can keanu reeves recover . Why is this a big deal . Because he was once a big draw and now has one bad movie . It is a big movie, big budget, big action, big release. It was delayed. It was expensive. Why do they call it 47 ronin . It does not tell you anything about the movie. It is based on an older japanese tale from the 18th century that has been retold many times. The biggest criticism is not keanu reeves. It is that it is too solemn, too long. It is not enough fun. It is not crazy enough. It is not actionpacked like the matrix. Break, withoint Patrick Swayze and a lot of guns. What is the keanu reeves curve . We charted his big movies over the years and adjusted them for inflation. Stock, he would be an eightyear cycle. He is a cyclical thing. Every eight years, he has big movies. Then, he has a couple flops and comes back. A walk in the clouds leads into what, a big blockbuster . The matrix was really, really huge. We expect the current movie to make about an eigth of the second movie, which was his best box office. This does not sound like he is dead at the box office, by any means. He is fine. He has a couple of big projects coming up, sciencefiction romance with a Science Fiction romance with rachel mcadams. Does this mean universal might not want to work with him . Maybe it is just this one project. They were plagued with problems from the start, a bunch of delays. He took a writedown on it before the movie even came out. A movie he specifically wanted made . Maybe this was the kind of thing where you let the star do what he wants. He picks his project carefully. The story was that the directing team he liked what he saw. To be part ofnce a big spectacle again in a cool movie with martial arts. Are there plans you know of for him to do another matrix movie . There is talk of another bill and ted. This would be the third. It is his breakout film and did really well. You talk about a third in a series. Is it all about trilogies . Is it all about sequels in hollywood . Hollywood loves sequels in general. It gets easier to be green lit. What about keanu reeves himself . Does he pick a movie every now and then to do, or is he not as prolific as other actors . Into directing. He did another martial arts film. He is a lowkey guy. I have never met him. He is not imagine going to be a great fan of yours after reading this story. A i think he needs to do hockey movie. Why do you say that . He was a standout hockey goalie. There has not been a good hockey movie in a long time. I think it would be a great play. Are you a hockey fan . I am. Maybe you can connect. Bloomberg businessweek associate editor. It is time for on the markets. Dow jones industrial average loses about a point. 1841 on thehanged, close. The nasdaq loses 10. 5 points. Coming up next, bloomberg west. Have a good night. Live from pier 3 in san francisco, welcome to the late edition of bloomberg west, where we cover the Global Technology and Media Companies that are reshaping our world. Im Jon Erlichman in for emily chang. Our focus is on innovation, technology, and the future of business. Lets get straight to the rundown. The news goes from bad to worse retail giant the says in cryptic pin numbers were also stolen during that massive data breach. Apple is on top when it c