YouSaid · the spoken record

Henry Blodget

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74
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2015-05-11
most recent
2015-05-11
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1
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  1. “No one is. They're just part of the free market and we should learn to live with them if not love them. But anyway, so I was writing a book about that. And then the Elliot Spitzer allegations hit and the lawyers kindly took me in a back room and wrapped duct tape around my head and said there will be no publishing of anything. So now that that old God.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “It's not the SEC. I was actually, when I left Wall Street, I left in 2001. This was before Elliot Spitzer filed his allegations. I left to write a book about the bubble. And to me, it was a fascinating story. I had grown up in the... Sort of family ethos of a far off relative of mine made a pile of money and the family story was he was on the Siberian railroad. He lost everything in 1929, became a pauper. So I was always just obsessed with this idea of bubbles. Is this what we're going through? And people in the 1990s said, oh no, now we have the SEC and we have accounting and we're much smarter and so forth.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Acts are not uncommon here. They're not uncommon. They're not impossible, and people have recovered from a lot worse and gone to do great things. And that was a very big motivating factor for me. But somebody did give me the advice just to take the long view. And I'm glad.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “Ride it out. There will be another side, even though it doesn't look like it now. And I certainly didn't believe that at the time. I thought my professional life certainly was over.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “The fact that there was a conflict undeniable, but there was industry, wasn't it? Exactly. And so anyway, so that's how it played out with Edith Spitzer. And to finish that story, life is very long. Elliot and I are now actually sort of friends. Elliot went through his own struggles. A little touch of.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “More or less right. You got it right. Now, let me preface it by saying that there are two different situations here. The SEC is actually the entity with whom I settled and got kicked out of the industry. Elliot Spitzer actually dropped me from the case, so I can talk about that. But the original allegation, yes, that was our position was these are taken out of context. We're talking about, sure, there's friction back and forth, but that doesn't mean that the research report is misleading, so forth. The implication was, right, that there was a conflict and therefore the reports were misleading. And let me say what I said then, which is that I never wrote a single word in a research report that I didn't believe.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Sure, you know from talking about securities, one of the biggest conflicts is everybody wants you to be positive. Nobody wants you to be negative about anything because everybody owns stocks. They want them to go up. They don't want to be bearish. So that's a big conflict with institutions. So Spitzer focused on that one conflict, found a lot of nice emails in which my team and I were venting back and forth.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “It's a little bit conflated. Elliot Spitzer, as you say, he was the one who launched the investigation. And the investigation was between the relationship between the research department and the banking department at investment banks. And in the 1990s, as you remember, analysts had been a part of the financing process. They were part of the IPO process, part of the pitch. Represented the company on the road show. And Elliot Spitzer came in and said, this is outrageous, this is a conflict of interest and so forth. And he was right that it was a conflict of interest. It's certainly not the only conflict on Wall Street, many others”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Are you either trust that that is smart or you think it is stupid and you complain about the profitability? In case of Amazon's worked out well.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Some people are saying that all the time. When are you going to throw off profit? Amazon isn't profitable. It's a running joke within a certain community. And that, as you point out, Amazon's core shareholders are okay with that. Now, let me disclose. I have owned Amazon for more than 10 years, so I've benefited from the run. Jeff Bezos is an investor in my company. I think Amazon is great, and I think he and his approach is wonderful for the economy. But what he would say about the shareholders is as long as you are very clear about what you are going to do and what your philosophy is, the shareholders who support that philosophy will find you and you don't have to worry about everybody else. And what I would say is, and it's very important, what they are doing is reinvesting cash flow. They're saying our opportunity is so massive that rather than build up a huge pile of cash that we don't know what to do with except buy back our stock, like so many companies are doing, we are going to keep investing in new projects. And as a share.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Amazon's extraordinary, and the big advantage that Amazon has had from the beginning because of who it is owned by Jeff Bezos is a very long-term focus. And Amazon from the beginning has been willing to make seven-year bets where they will lose a ton of money in the early years, knowing that a lot of those bets will fail. But if they make a couple that work, it pays off in spades. And that's exactly what's happened with cloud, is that they had this big infrastructure themselves. They realized, hey, wait a minute, if we've had to build this, everyone is going to have to build this. Let's rent it out effectively and see if we can turn it into a business. And they did this in secret for a long, long time before everyone figured out, hey, there's a business here. And by that time, they were miles ahead. And as you say, they just pulled that rabbit out of the hat. The market was quite impressed.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Well, a lot of those were hardware companies. We've needed a lot of hardware in the Internet boom. There has been a whole new hardware opportunity that's been created that Apple has taken incredible advantage of and Samsung's taken incredible advantage of. But even with pets.com, interestingly, there are plenty of now online pet supply companies that are doing fine. The question was, did they have enough capital to get there? Was there too much competition at that point? I remember in the pet wars, there were at least five pets.coms all coming out of the gate at the same time, all the same idea, all with huge pots of capital spending it to kill each other. None of them had time to get to escape velocity. And yet now we have online pet supply. The idea wasn't crazy. It was just that there was really too much competition and too much capital.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Railroad's a great example, and the internet is a great example. If you look how the internet has gone on to change the economy, it's actually vindicated a lot of what the crazy pundits seem to be saying in the 1990s about how big it would be. It's changing everything now, and we're still in the relatively early phases of that as we roll out. So it was as profound as a lot of folks were saying, but ultimately there was a lot of money made and a lot of money lost relatively quickly because 90% of the companies got creamed.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “If you step back from the whole process, ultimately anytime there's a new opportunity like the internet, you have to do a lot of experimenting as an economy to figure out what works, what the models are, which companies come out of it. Usually there is mass carnage and a few companies come out of it. And ultimately, that is what happened in the 1990s, although I have to say the magnitude of the crash caught even me by surprise.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “And ultimately the lesson was valuation does matter. And with Amazon in particular, I like a lot of other people had a spreadsheet about what was possible. I ran a bunch of scenarios and there were certainly scenarios where the company would go bankrupt, but there were other scenarios where the company could be a lot bigger than folks were expecting in the late 1990s. And one of the things that Jeff Bezos and others at Amazon saw relatively early was in digital unlike the physical world, you could have a single company that could be both incredibly deep in a particular sector and incredibly broad. And that created the opportunity for the company to be massive if they got it right. And in Amazon's case, happily, that came to reality in many other cases where folks were effectively saying, look, we're going after this massive market opportunity. If we only get a tiny piece of it, we're worth 50x where we are now in many, many cases that didn't work out.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Remember some that came later on many stocks. There were a lot of stocks that were hot. They were out of my sector, so I wasn't following those.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “A huge surprise went through the roof, and then ultimately crashed to something like $30 a share, split adjusted, or six, I think possibly, even wrote it all the way down. And then obviously it's come back. And on a split-adjusted basis, that 400 is about $67. So doing well over the long haul.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “Pushback, the immediate pushback was this is ridiculous. Ultimately, it's just a bookstore. Everyone who thought Amazon's not making money, some of the same things you hear today with Amazon 15 years later, people were not sold on it. People didn't fully appreciate how big the internet could be. And ultimately, I had no expectation that the stock was going to go through the roof right away. So that was a huge.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “Price target on a $24 stock to $40, but that extra zero made a lot of difference. For whatever reason, it plucked the cords of the zeitgeist. And that day was quite an adventure. Let me tell you, I suddenly went from very much institutional obscurity to a name that was used, I don't know how to say it. Everyone had put it was a Rorschach test. Everyone had different reactions to the call. Fortunately, it worked out, but it was.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “The world went crazy. And I was at that point, I had been doing the job of a Wall Street sell side research analyst, a couple hundred institutional clients. It's a relatively closed community. You're talking to people who are experts. Ultimately, what happened there was when I had initiated coverage on Amazon, it was a very controversial company. People either thought it was going to zero or it was going to be monstrous. I ran a whole bunch of different scenarios and said, look, the stock could be worth anywhere between zero and 500. My sales force after watching me increase my price target to 10 to 15 percent above the stock price several times basically said, look, Henry, this is so frustrating. Will you just tell us what you think this can do? The stock keeps going up. We keep missing it because you're being too conservative in your price targets. What do you think? So I ran a bunch of scenarios again. They triangulated on $400. And I said, okay, here's my target, $400. And of course, that is no different than raising it.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “That's right. And that was the first lesson for me that bubbles and booms and busts are as much of the part of the free market as weather, basically, in the climate. We're never going to get away from them. There are reasons why the pattern keeps happening. Of course, now we find in ourselves in another big tech boom that is going to end in a bust. It's nothing like the 1990s, but it's shaping up to be a pretty impressive boom. Money is falling out of the sky for a lot of tech companies.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “Good introduction to a liberal arts specialist in accounting and finance and then a couple of years of working in different groups. I did private equity and then ultimately was in the technology group and that was when the internet was really getting started and so I did several transactions in that and then ultimately found my way to research. One of the advantages of a new industry coming along like that is it creates 30 empty chairs effectively in Wall Street research departments. And I got an internet browser before everybody else so I knew a little bit more about it. It was a great fit with the journalist background combined with a finance background. So it was ultimately a great place for me to be on Wall Street.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “I found my way to Wall Street after being a journalist, writing a book. As you say, I spent a year in Japan. I worked for about three years as a freelance journalist and wrote a book, ultimately ended up at CNN Business News. My father had been in finance. I'd grown up around it. I had this weird liberal arts education that basically taught me that capitalism was bad and one should go anywhere but to Wall Street and finance and so forth. By my late 20s, I could no longer deny that I actually found it fascinating, started to interview, went through lots of different interviews, and then ultimately joined an investment banking training program at Prudential Securities.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “It's great to be here. And before you get an army of fact checkers, the nationally ranked tennis player part, that's actually now, but it's only technically because I am a partner with my dad and the father and son ultra senior. System, he is great. I am the weak link on the team, but he has gotten us nationally ranked. But I was not nationally ranked as a single player.”

    2015-05-11 · Masters in Business · Business Insider CEO Henry Blodget: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source