Politically expedient. I want to do what is right. Emily also announcing today, former hewlettpackard ceo carly for your arena, who confirmed her plans on Good Morning America this morning. Ms. Fiorina i think i am the best person to go to understand how the world works, and our government has become a giant, bloated, corrupted urography. Emily but check this out. Somebody other than Carly Fiorina posted 30,000 sad faces one for every person she laid off as ceo of hb. The Pimco Total Return Fund falling behind the Vanguard Total Index Fund after two years of client withdrawals. Meantime it is the beginning of the end for the bull market, an Investment Group predicting stocks and bonds will soon run out of steam. A phase that a monetary policies and they say creditbased oxygen is running out. Google is buying as software startup. Terms of the deal were not disclosed. It will help users organize items by understanding scheduling and habits, and it could be used to improve the google gmail, calendar, and other services. And interest pinterest is opening up their revenue model two companies. The main goal is to drive traffic to its site. The company was valued at 11 billion in a march fundraising route. Now to our lead. After leading cisco for two decades, John Chambers is stepping down as ceo, naming Chuck Robbins as his replacement. Robbins has been with the computer networking giant for 17 years most recently leading the global sales and Partners Team which they say generates 47 billion dollars in business. They shared information about the transition this morning. Take a listen to it robbins had to say about his plans going forward. Mr. Robbins we will have a level of rigor that may be even tougher than what you did, john. Emily cory west joins us, and a guest joins us, and i will start with you. What do you think about Chuck Robbins and how he will run this company . Guest as you said, he was running the global sales organization, so for investors he really was not front and center. My guess is he is a very good choice, and i say that because cisco right now is really trying to push, make a renewed push into enterprises, so i think having a salesman at the helm is probably the right person for the job, if that is your objective. Emily John Chambers leading the company for two decades, what does this translation mean transition mean . Cory shareholders do not celebrate that biggest stocks have not done well, though a lot of stocks have. With a company that John Chambers came to run 20 years and one quarter ago it was an emerging company in the emerging world of the internet. The internet has changed. Technology has changed dramatically since then, and all of the cisco competitors have fallen by the wayside at that time. If you think about who their competitors were, the four horsemen of the nasdaq at the dot com. We were talking about worldcom, 3com, and then throw in somebody else, like enron. Look at what has happened to all of these competitors. Look at what has happened to 3com. Look at wind. Look at ascend. There are so may companies that try to be great, Big Companies in the space of networking and the Cisco Technology evolved largely through acquisitions but they made sure they were not being left out of anything that was happening in the world of technology, and as a result, cisco is still a big, strong dominant company, one of the most Important Technology companies in the world. Cisco is a Relevant Company and a more Relevant Company today, and none of its competitors have been able to pull it off. Emily and yet, shares are lower than 10 years ago. John, why is that . Why are investors so hard on cisco right now . John they were a victim of their own success in many ways. The company did so well. You get so vague. It is kind of apples conundrum, and it gets tough to grow off an ever larger base, and i would add that the networks are undergoing a big big transition from this hardware intensive design to these new Software Design networks and i am sorry, Software Defined networks, so it is more of a Software Defined going forward, and they are in the midst of that transition. They are doing well so far, but in order to stay relevant, they need to stay all head ahead of that whole wave, and i begin will be his biggest challenge going forward. Emily what is the first thing on his agenda . Cory the way that Networks Work have changed a lot in the last couple of years. To virtualization of networks and the software. Virtualization at a different level, but with a software manner. And security. Networks are more Software Defined, if you will. The accounting of the company has used to stay on top of technology has hurt the stock. What they have done it essentially, and i am going to oversimplify it, but they have issued a lot of shares to companies that they acquire and then they have used their Free Cash Flow to buy back shows shares, and the result has been not a lot of cash flow finding its way to the investors ultimately, but it has kept the company in the central position in technology and the networks but really at the cost of shareholder return. Emily john, what are you going to be watching for over the next months, weeks, years, about how Chuck Robbins leaves this company . John lets talk months and years. That is what is important to investors. If you look at a horizon of, say, one year to two years, my feeling is that cisco needs to step up its acquisitions. Its early success was really based on being a great acquisition growth story. They remain so, but they are making smaller acquisitions recently, and i think they have to move on to bigger acquisitions, to really grow to dominate this market again. Particularly as we make that transition we touched on a moment ago over to software. Emily quant yes, to take a Strong Company and a strong situation to work. You will be back with us later in the show, cory johnson. Coming up, the world savvy investors gather to share strategy, and we sit down with some of the biggest names, this hour. Emily this is bloomberg west. I am emily chang. In brussels, drivers are at risk of having their cars confiscated. Uber. Uber has argued it is a tech platform rather than a transport company, and some have urged to shut dom shut down the site. They are taking it seriously. Goldman sachs is planning an expansion into the online lending business for individuals and small business, according to an internal memo. They have hired a man who ran the u. S. Parts division. The exact type of programs goldman plans to offer is still under development. The 20th annual Investment Conference is underway in new york, the event bringing together the worlds most savvy investors to share insights and strategy. My colleague Stephanie Ruhle is standing by with a guest. Stephanie, take it away. Stephanie just leaving the stage. Two ideas. Walgreens. Do you think they are doing better . Guess i think it is a transformed company. It is like night and day. Stephanie really . Guest yes. This company has a Shareholder Base that has really turned over. It has a former that is refreshed. Old Board Members are leaving. New Board Members are coming on with direct, relevant experience. The whole Management Team has turned over. One of the great entrepreneurs of all time is running the company today. Stephanie the sort of vertical improvements, is that the right strategy, or should they be looking to acquire a right aid . Like i think there are internal changes that should be made and are being made, a lot of cost coming out of the business. There is a lot of Capital Allocation decisions that are being made. They are more efficient, but then there are also Strategic Decisions that need to be made, and the company is looking at alternatives. Stephanie rv store makeovers are enough . Are the store makeovers are enough . Barry the costs are way out of control. This company, it stopped growing its store based in 2008, but it just continues to grow its expense days, space and there are excess costs to come out of here. But the company has never really looked at its strategic position and come up with a coherent strategy with how to address changes in health care. Stephanie but, for now, you feel they are addressing everything and are on the right half to mark barry are on the right track . Barry that is not coincidental. Stephanie qualcomm. We know they are doing a buyback. Is that enough for you . Barry no. That is the first step. They knew to do the buyback quickly before all of the other changes. That is the first thing. There are a lot of similarities between walgreens and qualcomm. I mean, i can basically take walgreens and just write qualcomm on top of it, and it would pretty much work. There are costs that need to come out. This company has a really bloated cost structure, and its r d has not been run into chile with return on Investment Capital discipline. The Company Needs to change. Management gets compensated. Stephanie it seems when you came out after qualcomm, world ready. I dont think that is what youre looking for. Barry no. We are looking for substantial change. It has been very constructive. I do not think there was much they could say when they first came out. I am confident that they will get it and that they will make the changes we think they need to make. Stephanie management is open to reducing how much they get paid . Barry changing the manner in which they get paid, i hope so. I certainly hope so. They need to. Right now, they get paid on return on operating income and whole numbers. They do not get paid on a pershare basis. They do not get paid on a pershare basis. Call share distribution. Stephanie one making an argument that that is how you need to pay top talent. That is a whole lot of dough. That is what people at that level expect to get paid. Barry if they perform. Stephanie so doesnt need to be separated . Barry i dont know yet. They need to do a transparent review and figure out if it should be kept together or if they will drive more value by being split up. Something is not right. Stephanie how have they responded when he basically said look at the board. Old white men. Barry i did not say that. Stephanie i am going to say it. Barry we will see. We have told them they need to reduce the size of the board. They need to turn over some of the long tenured Board Members and they need to bring over some fresh perspective with the board. Shareholder perspective. People who have direct industry experience. Stephanie you said walgreens and qualcomm similar, but change the name, but for you as an activist, it sure sounds like walgreens is a lot more positive to work with. Barry well, keep in mind, we are well over a year into the walgreens situation. It took time for a lot of those situations to take place. Stephanie for you, is it easier to work with her companies or Smaller Companies . Barry well, ironically, i think Larger Companies. They are more responsive. They dont want to be on the board of a company that is underperforming, and they do not want to be put in that light and so we find that they act pretty quickly when we show up. They do not fight us too much. Stephanie is berkshire too big . Barry i will eat berkshire to somebody else. Stephanie doing a lot more for companies than you ever did, what do you think . Barry i am not quite sure he said that. I think karl said buybacks are good if they management is good and is creating value and i think he agreed with larry that if a company is just buying back stock, and the management is not capable of generating value and investing capital in a more attractive manner, then there is no point in buying back stock. Stephanie but our traditional Money Managers just rubberstamping boards, and we are not seeing boards turn over . Barry i think boards have changed and are getting more receptive, and that is a good thing. Stephanie barry, thank you for joining us. Emily, we ran out of time, but i really feel like barry was going to say more women on those boards. I am not sure, but i feel maybe he wanted to say that. What do you think . Emily you tried. Do you want to give it a shot . Stephanie you know he has got all of the right answers. Emily Stephanie Ruhle, thank you for that interview with barry. We will be back after this break. Emily this is bloomberg west. I am emily chang. Disney is rescheduling a meeting so that people can attend this numeral of days goal or, just 47 years old. He was the husband of disney board member sheryl sandberg. It will be on tuesday instead of after the bell. Dave goldberg was one of silicon valleys favorite ceos. Crowd of five, sheryl sandberg, a doting father of two children and a dear friend of our show. His life was cut too short, but we wanted to take a moment to remember him. I went to welcome our special guest for the hour, dave gold were, ceo of survey monkey. Date thank you. It will be fun. Emily ceo Dave Goldberg joins us about surveymonkey. Dave i took my First Company public. 10 million. We were not profitable. They were using the Public Markets to raise capital. Now, all the bankers, they tell you if you do not have a billiondollar valuation, dont even waste your time. I have a long background in online music, and for a long time, we were the upstart, and now streaming, and particularly pandora for online music, is mainstream. You know, when i was a kid, i built model rockets. A drone is cooler than a model rocket. If i can just push a button and call a self driving car, i think that is the ultimate to the j etsons future we all want to say. To see you. Emily painting a picture of a talented leader and compassionate. A sharp as this man. Universally adored. A man who was kind and good and generous with his advice. Goldberg talked about how proud he was of his wife or beating the fight of gender equality at home and at work. She was a leader in that fight also. We will miss you, dave. This world was made better because you were in it. Emily this is bloomberg west, refocus on innovation, technology, and the future of business. A shooting outside dallas at a Community Center hosting a provocative contest for a prophet mohammed cartoon. One office was wounded. A video purportedly from al qaeda has named the indian Prime MinisterNarendra Modi as its latest so. The boys in the video said that he, along with entities like the french satire newspaper Charlie Hebdo are quote, waging a war against muslims. The Prime Minister has faced chrysostom faced criticism. And after abandoning a 45 billion plan to light Time Warner Cable just 10 years ago, a cable giant benefited from sending up more than 400,000 internet customers. It is a sign of how the comcast business is changing. For the first time they have more internet subscribers than cable tv subscribers, and staying with cable, cablevision says they are feeling the pain from cord cutters. The Customer Base is down over 2 from one year ago, and still they posted a quarterly revenue gain of 2. 5 today. They are targeting customers who drop their service. They will offer the hb a standalone service. And turning it over and out you Market Makers anchors Stephanie Ruhle in new york at the Investment Conference with a chief Investment Officer keith. Stephanie, take it away. Stephanie thanks, emily. You just left the stage great talking about yum brands. You are a top investor. Steve so for a starter, yum brands is a great brand. Taco bell, pizza hut. Stephanie do you have a favorite of the three . Steve keith i think i am a taco bell. It is twice the size of mcdonalds in china, and there have been three successive food Safety Scandals in china, which have caused earnings to be at trough levels so they were doing about one dollar per share of earnings today. When they get back to 2012 revenue, we would do better. So a great business in china. A way of investing in the growth, the organization of the middle class, and to grow to perhaps over three times that over a decade plus, so we invested in a great business with a first rate Management Team that is going to change and be discounted by the market today is the market is looking at today and not tomorrow. Stephanie what about the fact that all three brands are off trend in the way people should eat. That is something that is plaguing mcdonalds. Keith let me step back. Yum brands is positioned differently. It is appealing to millenials. It is hit. Kfc chicken. It travels better. And this is a phenomenal company that opens five stores a day three in china and two in the rest of the world. That is every single day. No days off, so there is massive growth globally. They are betting on this thing called fast food, but it works and yum brands has great brands, global scale, and they have moved quickly to embrace their success. It has caused them to evolve in a different business model, where they dont own and operate the models. So there is different volatility and different risks, but still a fantastic business. Stephanie you and dan loeb have something in common. Keith coleman when the most successful investors over the last 20 years also has a big position in yum brands. What i want and what most shareholders want is the same thing. Which is having a Great Company learning from the lessons of the past and having some corporate change to position the company to really, really drive over the next decade, so often companies are able to take one step back to make two step forward. Taco bell has a motto. It is live mas. Dont become to but with 20 when you can have dont be happy with 10 when you can have 20 . We have done two active investments. We invested in commonwealth, which became equity commonwealth, and realogy capital partners. Sam is the chairman of equity commonwealth. There is a great ceo and chairman for free. Now, why is it that this has occurred . Because there has not been the same level of governance and liquidity in the asset class as happened in corporate, and in order for real estate, it is much more of a private market. In order for it to grow increased governance increased accountability, it will really enhance value. Today, they took some big steps to enhance accountability. They need to do more, and i think the ole miss the onus is on them. To act like good fiduciaries, and if you do, your real estate will be worth more. If you do not, it wont. If real estate does not have Good Governance it does not need to be a Public Market asset class. If they can trade at a premium to their nav, then it should become a living organism, so i think the real estate world, at one time, the whole market cap of the reits, it is become a great Public Market asset class, and one of the reasons is transparency disclosure, and alignment of interests. Stephanie dan loeb, and what about carl icahn . You are a carl icahn protege. He said he is majorly bearish in the highyield market. Keith i would defer to carl. His stomach is as tough as anyones when it comes to this. We have had a good period of time. Interest rates are low. Federal banks globally are accommodating, and if you put money in your wallet, and it gets taken out every week, every month, that is what negative Interest Rates are, so if money goes into your wallet and disappears, people will do something different, and people are doing something different. They are buying equities, so as long as it is accommodative, i think you will see it continue to appreciate. The challenge will be when we start to see some inflation, which we have not, or when we start to see asset bubbles build, which is the other risk of sort of free and loose money but for now, i think equities are attractively priced. I agree with carl. I do not think the risk return justifies the credit. The best way to do this is to borrow money with a company that invests in itself. Access to cheap capital. By plant and equipment. That is a great way to short credit. Stephanie ok, before we go last year you were talking about a short in the energy industry. Keith i think the challenge is having buyers and sellers meet. The majors have unlimited capital but not the right ones. A lot of the companies with the right assets, the shale assets for a 36 oil in parliament image, they dont have the right Balance Sheet area 48 36 oil environment, they do have the right Balance Sheet. There should be consolidation but i think it will take a little longer than people expect. Stephanie keith, thank you for being here. I will see you in just a few when i returned. I am going to be sitting down with the one, the only l ackerman, so stay with us. The 2015 conference here at lincoln center. Dont go anywhere. Emily we are continuing our coverage of the Investment Conference, and we are standing by with our own Stephanie Ruhle who has bill ackman. Stephanie bill, always great to have you here. I have to start with a friend or foe of yours, carl icahn, aching comment making comments. What do you think the value of activism is right now . Bill it is getting critically important. I think that is why it is getting so much press attention. It is shifting back to the owners of the business in a very dramatic way in the last 10 minutes as a result of that. Stephanie what about the idea that corporate ceos are not making responsible decisions because they are scared. They are under the desk saying, i hope bill ackman does not call. Bill they are not shortterm value changes. It is to fundamentally improve a business over many, many years. They are longterm changes. There are some shareholder activists that push for leveraged buybacks, but for the most part, you look at nelson kinds of changes proposing at dupont, these are fundamental longterm business changes. Howard hughes, and the other companies we invest in. These are changes for the benefit of the company over the longterm. I think management should be able to look at that. But the biggest fear that aco has is that he or she is underperforming. It is likely an activist will show up, not for shortterm reasons but for longterm reasons. Stephanie we know you had Great Success with burger king. We were talking to Keith Meister and yum brands. Bill the franchised business is one of the great businesses in the world, run correctly. The folks at Restaurant Brands previously burger king, have done a fabulous job and we like that team. I hope keith does really well with yum brands. I think it is a Great Company with great potential. Stephanie whether we are talking about allergan or others. Bill what is interesting about health care is Health Care Companies have never been run many of them are not run for the benefit of the owners. Many of them are very wasteful in the way they operate their businesses. You have a business with 80 to 90 gross margins, you might be much less disciplined about cost control, and you also have the pressures to Keep Health Care costs down, and those are creating a lot of opportunities for commendations and efficiency, and valley and has really been leading the charge in changing that whole sector. So youre seeing an industry and transformation in a very dramatic way. Stephanie you have got two board seats. Are you seeing the changes you want right now . Bill paul, an activist, he is very excited he has joined the board. The company is going to announce earnings in the next two days or so. Obvious the, i cannot comment, but i think it is a Great Company and will do very well over the longterm. Stephanie when you look at companies you take a big stake in, is there a Better Success with smaller or Larger Companies . Who is the most responsive . Bill if our ideas are good, the management and boards are generally responsive. Stephanie are there some that do not make sense for you . If you look at a berkshire hathaway, do you say too big . Bill i think he is one of the greatest. I think it is one of the cases where you can justify the conglomerate. I would rather be a passive investor in berkshire. The question is what happens after Warren Buffett is gone. What does the company look 20 30 years from now. It is rarely while the founder is alive that there is a shareholder activist. It is when there is no longer an order in the boardroom, so i am not worried about work sure needing an activist for a generation. Stephanie but are you worried about the berkshire future . He is not a young man. Bill even after he is gone. The subsidiaries run themselves on an autonomous basis. It is a really decentralized company, and they have got some important Guiding Principles and he has focused a lot on building a culture. Stephanie you talk about not doing in herbalife again. Bill i think it is very good for outing fraud but it is not a great and productive use of time. Stephanie because of all of the capital . Bill i would say it is just something that is no matter what the track record of the short seller is or identifying fraud or problematic companies, you come out with a company that is violating the law, people are a merely skeptical of your motives because you have an opportunity for profit if the business fails. I say that simply do your trying to make a profit. It is not worth the brain damage, i would say, so i would have to think very very hard before another public short. The question is if i get involved with another. That is the question. Stephanie you think shortselling makes sense come but what about the market . Bill i think shortselling is very good for the market and for outing fraud, that there is a problem. You do all the work you suffer all the spotlight and the criticism and some amount of reputational damage from in accurate articles in the press. Is it worth that investment to make a profit . There are easier ways to make money, i would think. Stephanie getting ceos to take suggestions, isnt that easier than a regulatory short, when youre in the pothole of the u. S. Government . Bill the fundamentals in the case of herbalife will likely take the company down before the regulators do. Expect a very bad quarter tomorrow. We expect continued deterioration in the business. I would love to see the regulators finish their work, but stephanie your position, that is not the regulator not responding, that is the government saying we just implead disagree, and we are the role makers, so where do you stand on that . Bill four frannie and freddie i do not think there is an alternative solution to preserving the Housing Finance system in the u. S. If you when a 30year repayable mortgage i do not think you can have it without fannie and freddie, though, therefore, the truth will prevail. The best outcome here for the taxpayer is that the company is preserved. The best outcome for kind of the credit market is that the company is preserved, the best outcome for shareholders so i do not know who is harmed by fannie mae staying in existence. The debate should be about how much capital fannie and freddie hold, not about whether they should continue to exist. Stephanie are people looking at what fannie and freddie are doing, or are they just too overwhelmed, saying they do not want to risk this to get richer . Bill with respect to the fannie mae common stock, i think most of that is held by investors. Many people own fannie mae and other stock. 80 of the company is actually owned by the taxpayer, so the only way the shareholders of danny and freddie get rich, if you will, is it the taxpayer does very, very well. Stephanie fannie and freddie are a longterm trend, and herbalife is a long time trade bill herbalife is a shortterm trade. Stephanie you are not in and out of anything. Bill we have been in Howard Hughes for six years. We are a longterm holder. We will hold these businesses for years, so it used to be you criticize an activist for being shortterm, and perhaps there are some shortterm activists, but the good ones are Business Builders people trying to create longer value. Stephanie carl icahn said he is mildly bearish on equities. And more bearish on the equity. Bill credit spreads are pretty tight, so the absolute yields you can earn own a below grade credit is very low, so it is hard to make a lot of money buying a bond with a 4 coupon unless the credit is going to improve, and i think that is still a tough bet. You can be right on the credit in proving, and Interest Rates move. I dont like income as a category, particularly at todays interest rate. Stephanie we have somebody walking by. Does the timing on the fed action mean anything to you . Bill not really. We focus on a few companies. We are not trading the market. Stephanie what is your most important thing . Bill integrity, doing the right thing. Making sure the right Management Team is in place, the company is making smart decisions about the way they run their business and allocate capital. Those are the things that matter to us, and finding the next idea. We will have something to talk about maybe in the next couple of months. Stephanie what are you going to do with that place . Bill it was an investment. I think it may be the best department in the world. Stephanie you think 100 million was a good price . Bill it was not 100 million. Maybe it was 90 million. They are selling at 10,000 per square food for square foot and i am already at 50 of the money. Stephanie do you ever plan to live there . Bill no, i have a nice family life. Stephanie called be broke richly on 100 million, you have to be able to negotiate that down. On the brokerage fee, on wondered million dollars, you have to be able to negotiate that down. Bill i am sure you can. Emily we will see you later. Charlie on saturday night Manny Pacquiao and Floyd Mayweather faceoff in what many are calling the right of the century. Each fight is poised to earn more than 100 million. Neither camp could agree on terms years ago such as testing on performanceenhancing drugs. Joining me now from las vegas is teddy atlas. He is a boxing commentator for espn and has trained some of the biggest names like mike tyson. I am pleased to have him back