What the OnlyFans news says about power and control, Cathie Wood's transparent investment strategy, and a prediction on the federal reserve pulling away from the punch bowl

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Kara Swisher: Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher. Scott Galloway is still somewhere tweeting and missing me. So I'm joined by his favorite Canadian, Andrew Ross Sorkin of The Good Hair, also New York Times columnist and editor, co-anchor of Squawk Box and author of Too Big to Fail. Andrew, how are you?

Andrew Ross Sorkin: I'm great, but we still never got into the bottom of this whole Canadian thing. Do we even know?

Kara Swisher: I don't know. Do we know where that's from? It was probably some ayahuasca moment and he just decided. He has a massive crush on you, like kind of creepy, honestly.

Andrew Ross Sorkin: It's mutual, by the way. I'm a big fan.

Kara Swisher: Don't. Don't. Don't do that.

Andrew Ross Sorkin: Okay. He knows, you know, I'm a big fan. I'm just happy to sit in his seat and keep it warm.

Kara Swisher: Yes, but he's like deeply, he thinks I'm trying out hosts to replace him. And that is in fact true. I saw that commercial for Pivot. I also saw his other commercial, frankly. So I know. I know that. At any moment, Scott may cancel himself.

Andrew Ross Sorkin: That is correct and deservedly so. I would defend him on that. He could do whatever he wants.

Kara Swisher: So this is a tryout then?

Andrew Ross Sorkin: No, it is. Of course it is.

Kara Swisher: But I like to like bother him with people like Preet. I have George Han. I've got some others. So, you know, we'll see. We'll see what happens. We'll see how it goes. We'll see how he behaves. No, I really do miss him, but let's not tell him that. So let's get on to the stories because there's so much to talk to you about particularly. So a couple of things we're just going to talk about just briefly. TikTok is partnering with Shopify to strengthen its e-commerce ties. This is a thing that they had talked about when Trump was trying to do whatever he was trying to do with it, to link it with Walmart and stuff like that. So Shopify vendors with TikTok accounts can now add shopping tab to their profiles. What do you think about this? Because this has been discussed many times. Instagram is a platform that does this too. This is the only way that TikTok is ever going to get to the same place as Instagram slash Facebook, right? So to me, this is, I don't know if this is the Holy Grail for them or not, but given that they don't really have a backend platform like this, given that Facebook effectively does, to some degree, already provide these services, I think this is what you would do if you were them. Shopify is an interesting choice. And you didn't want to build it yourself.

Andrew Ross Sorkin: Right. So, and I think it also speaks volumes about Shopify. I mean, the growth of Shopify in the past 18 months is insane. Well, not being – Amazon's a big deal. Being an alternative to Amazon, right? They're not going to sign up with Amazon here. They didn't want to do it with Walmart. It's kind of interesting in that regard. But I'm going to make one point about this because I know that you and Scott talk about Amazon all the time and potentially Amazon is a monopoly all the time. I say to anybody who says Amazon's a monopoly, I say Shopify. Right. Tell me how Shopify could have a hundred billion dollar plus valuation at the same time that Amazon is somehow taking over the world.

Kara Swisher: Absolutely, but that's two. Okay, that's two. We're talking about sort of the decimation of other control over.

Andrew Ross Sorkin: No, I know. But everybody thinks that Amazon has somehow quashed all sorts of innovation. And I look at Shopify and I say that that is the opposite side of that argument.

Kara Swisher: Yeah, Andy Jassy should send a fruit basket to Shopify, to Toby at Shopify.

Andrew Ross Sorkin: Yeah, definitely. There has to be an alternative. And there's a good business in being the alternative, right? Like Microsoft with Apple and this, you know, Apple.

Kara Swisher: So the real question, though, is do you believe that Shopify is the alternative or you think that Walmart is the alternative?

Andrew Ross Sorkin: I think Walmart has struggled and struggled and struggled for many years. And I have a lot of regard for good example. Doug McMillan, you may have been there. Was it code a couple of years ago? And he talked about a 10,000 square foot store that you looked at things and then ordered them and they were delivered to your home instead of their 200,000, 180,000 square foot stores. And it was nobody paid attention, but I had covered retail for you. I was like, this is a big deal with this guy. I just said they didn't do it. And Amazon is now doing Amazon freshes all over my neighborhood in D.C. They're doing the small, the goes, the freshes, the possible department stores. This was an idea that it's not a fresh new idea necessarily. And if you're Doug on a day like this past week when this announcement got made, are you saying I lost it? I don't know where they were. They had it. Why didn't they do it? Like, that's the thing. Like, they had been, I'm doing a memoir as your wife is my agent, actually, on the stuff. And I look back old stories. My old story is about Walmart taking over everything, right? killing off Garfinkel. So I don't know.

Kara Swisher: Interesting. I don't know. I only say that because you thought that Microsoft and Walmart were going to come together and do that as part of the Trump thing, as you mentioned. And then they didn't happen. And here we are.

Kara Swisher: Yeah. So Airbnb says it's funding housing for 20,000 Afghan refugees around the world. Again, this is something Brian Chesky's done several times around Charlottesville. He's done it around all kinds of stuff. He goes out on a limb progressively in this area. It's also a good brand attribute. What do you think about that?

Andrew Ross Sorkin: I think for the brand of Airbnb, it is another masterstroke for Brian. Having said that, I'm sure it does not ingratiate himself with Kevin McCarthy and Republicans who seem to be so insistent that these refugees either aren't refugees or somehow should never come to America or should not be given a home, which I think, as you probably can imagine, is ridiculous.

Kara Swisher: Yeah, but we left them behind, you know, just so you know.

Andrew Ross Sorkin: I heard that. All of it's just inexplicable. I don't know what news channel you're watching, but yes. So this is a good thing for them to do. If you're Brian, I think Brian has staked out a place in the United States and globally around being this progressive brand. And I think that attracts people to the brand. I think the complicated part for Brian is going to be over time, which landmine you try to avoid and which landmine you accidentally step on.

Kara Swisher: Yeah. They're involved, by the way, with the Olympics now. They're going to be a sponsor in China this winter.

Andrew Ross Sorkin: Yeah. I think that's actually going to be complicated.

Kara Swisher: It is. Right? Because here on one side, you're going to be working with Afghan refugees, which I think is a marvelous thing. But the same people who believe that are going to say, Brian, how can you therefore be involved with China?

Andrew Ross Sorkin: Yep, 100 percent. I mean, like all these businesses. But at the same time, like there's no negative to saying we're going to fund Afghan refugees for them. And by the way, Nazis aren't allowed to stay with us. It's kind of a good brand attribute. But you're right. I think it's a great brand attribute until you believe that there is some senator, congressperson or somebody else on the other side of this argument who says, we're going to tax these people. We're going to regulate Airbnb because we hate them. You remember what they did in Georgia to Delta Airlines over some of these issues in terms of –

Kara Swisher: They tried. They tried, but that cost them some real money. That was real money. That was real tax dollars. I think Delta looked good in that one.

Andrew Ross Sorkin: Yeah, but you're right. I thought Delta looked fabulous, but it's an impact. And so that's the part – right now, I think progressive politics or some semblance of progressive politics are popular and popular enough. The question is what happens over time and does it swing a different way?

Kara Swisher: Well, it's got to stick with your brand. Look, Patagonia just did it again and it does it again and again. And it's been nothing but net for them in terms of people wanting their most recent things. So I don't know. I feel like if you stick to it and he keeps doing it, I think it's probably a good thing.

Kara Swisher: So last thing, Disney, speaking of people fighting with politicians, Disney, last one was Delta. You mentioned that and Patagonia, obviously. Disney Cruise Line announced that it will require vaccination proof from all passengers above the age of 12 from Florida to the Bahamas. This goes against DeSantis' ban on vaccine passports. Disney is a big player in Florida. This is a shot across, whatever you call it. But how can you lose? Let's think about this. Who's got the leverage? DeSantis or Disney?

Andrew Ross Sorkin: Disney. Disney not only has the leverage because of their size, because of the number of people they employ in Florida. I mean, the whole, Disney should be the governor of Florida at this point.

Kara Swisher: Yeah, yeah.

Andrew Ross Sorkin: So they just were like, screw you, DeSantis. This is a big deal. Disney doing this. The other cruise lines did it in a little bits and got attacked by DeSantis. But now he's got to attack Disney, which is, I think, he can't attack Disney in the same way he couldn't attack those school districts that were saying you got to wear a mask.

Kara Swisher: Yeah. What does that put DeSantis at? What does it do? When all these businesses are going up against. I saw Kristi Noem's one last night, which I thought was rather clever, actually. She's sort of the smarter DeSantis. She's like, we're for business freedom and we may not agree, but they should do what they want. Like she was fascinating in her little.

Andrew Ross Sorkin: Well, look, can you be a Republican who believes in free markets and then tell a company that they can't require their employees to do certain things?

Kara Swisher: Yeah, yeah. She threaded that needle. He's an oaf. He looks like an oaf. And I think he's really hurt his. And then the other question is, is DeSantis playing to be the governor again in Florida? Or is DeSantis planning to be on the national stage in a different way? In which case the audience becomes quite different.

Andrew Ross Sorkin: I suppose. I just think he looks like an oaf. I think fighting with Disney and fighting with business is a real problem.

Kara Swisher: All right, let's go on to big stories. Only Fans, this is the big story. You're very interested in this. A reverse course. I love this story for so many reasons. I cannot wait. Let me just fill people in on it. Reverse course on its plan to ban sexually explicit content. This is your sex workers. The company created quite a stir with the creator economy last week when it said it would ban sexually explicit content because of restrictions from banking partners. I feel like it may have been a feint. Anyway, less than a week later, OnlyFans announced it was suspending the policy change that had, quote, secured assurances necessary to support our diverse creator community, which means from banks or whatever. So explain this. What's the game plan? Why did it reverse?

Andrew Ross Sorkin: Okay, so-

Kara Swisher: What's going on?

Andrew Ross Sorkin: Okay, I love this story, not because of the porn side. I want to be clear with you about that. Scott might have a different view about that, but I'm not Scott.

Kara Swisher: Yeah.

Andrew Ross Sorkin: I'm not Scott. I love this story because it speaks to freedom of speech. It speaks to monopolistic potentially practices or power among the financial universe in terms of the banks. Whether that was an excuse or not, we can get to. And it speaks to this idea of empowering the creator community, even if it means you're naked.

Kara Swisher: Yeah.

Andrew Ross Sorkin: Which to me is unto itself a fascinating sort of component part of all this.

Kara Swisher: Yeah, so pro sex workers here at pivot. But go ahead, keep going.

Andrew Ross Sorkin: Well, so no, but and this is what's so interesting. By the way, I will say there has been a shift at least online if you spend time on twitter enough in terms of support for sex workers in a way that they were not being supported only a week ago. So all of a sudden sex workers became creators. I thought that was just a little bit of a – This was a big part of this company's business, right?

Kara Swisher: So what do you think actually happened behind the scenes? Huge part of this.

Andrew Ross Sorkin: I actually do believe it was the banks. I don't think that that was a head fake at all. I think that banks over the past year, you saw it happen. Actually, Nick Kristoff, our colleague at the New York Times, deserves a lot of credit for putting pressure on the credit card companies to abandon sites like Pornhub and other sites like that. I think that some of the banks took a new look at it. I think some of the credit card companies took a different look at it. In this case, it wasn't the credit card company. So there's two pieces. There's the Rails, The MasterCards and Visa, they were not the ones that were having the problem. It's the underwriters. So the people, when you get a credit card, you don't just get a Visa card. You get a Visa card from Chase or wherever. And it was some of those banks that were saying, we don't want to process these types of purchases, partially from a reputational perspective. One of the other reasons, by the way, historically, banks have not wanted to process these types of transactions is how often they get a phone call later from somebody, including parents and other things, saying, this was not an authorized sale.

Kara Swisher: Oh, yes.

Andrew Ross Sorkin: You need to now send it back to us. So there's actually a higher risk for them.

Kara Swisher: That it's a teen or something like that.

Andrew Ross Sorkin: Yeah. That it's a stolen credit card, that there's a fake something, that there's a kid doing it, all sorts of things.

Kara Swisher: My mind immediately went to my teenage sons, but go ahead.

Andrew Ross Sorkin: But this is exactly why banks don't like processing these types of transactions. So that part, from just an economic perspective, makes sense.

Kara Swisher: I did an interview with Bango when he was leaving MasterCard, and he, I can't tell you, the sex workers came down on him and me for just even talking about it. And obviously, Nick Kristof on these things said we were trying to inhibit sex and this and that. And it was a really interesting experience doing that. But why did they reverse if they said they were going to do it? What was, did suddenly-

Andrew Ross Sorkin: Well, from my understanding of it, and there's probably more reporting to do. I think that there are some banks that will transact for you that make it a lot easier. I think they have probably found some of those. I also think there were some banks that didn't think about sex workers as part of the-

Kara Swisher: Content creators.

Andrew Ross Sorkin: Content creators or the creator community or the creator economy. And so I think that's a bit of a mind shift that's taking place in the finance industry. And I also think that there's another component part of this, which is that banks are increasingly nervous that regulators are going to look at them as having too much power. Now, I'm somebody who's been writing for years less about how banks could impact the sex work industry and more about how banks could impact the gun industry. So I've advocated in a bunch of columns over the past couple of years and sort of exposed the idea and opportunity that banks could have to control the gun industry, something that you talked to MasterCard about guns and other things as well, that they don't want to do. They don't want to do it for political reasons, because what they don't want to do, this goes back to where we were talking about DeSantis in Florida and all sorts of other things. They don't want, or Delta, they don't want politicians to say, OK, we're going to regulate you now. OK, you don't want to either loan money to that person or provide them with credit because you don't like that kind of thing. And so this is, to me, this is like a microcosm of all of these issues in one.

Kara Swisher: Well, here's what's interesting. Two things. One is this idea that content creators are of all kinds, shapes, and sizes, right? And so what do these sex workers deserve in terms of service and protections, like labor protections and things like that, like you're an Uber driver or anything else? And on the flip side, and I'd love you to talk about it because I interviewed Ashton Kutcher and Julie Cordova yesterday from Thorne about this Apple thing, which has attracted a lot of controversy. And it's reported that Facebook accounts were nearly 95% of online child exploitation reports. That's because they actually tracked them. Apple hadn't until recently. So, or not that much. So when you think about these banks also, because we talk about social networks being social arbiters of things, and we force them into it. We get angry with them if they have anti-vax or whatever happens to be the problem of the day. These banks are in a much more, you know, and you notice that with the January 6th thing when I did that parlor interview, they all threw him off suddenly because he said some things they didn't like. So where does that put these banks? They kind of have no choice, right?

Andrew Ross Sorkin: Well, so I think that the banks are like platforms. Right. And yes, you can de-platform somebody. A bank has every right to take a customer or not take a customer. The only thing you cannot do is do it in a discriminatory way. You cannot effectively discriminate against, quote unquote, protected classes. But you can decide. I'm not doing sex workers or whatever. I'm not doing sex workers or I'm not doing that. And by the way, there are a lot of folks who've decided they don't want to be in certain businesses. So Stripe, and I give them a lot of credit on guns or other things, where they say, we don't transact guns. That's not our business. Apple, we don't do that. That's not the way we're approaching this. By the way, Apple, and we can have lots of debates about their walled garden, right? They decide what, they're not doing sex work apps on their platform, right?

Kara Swisher: Yep.

Andrew Ross Sorkin: And do we think that's terrible? I mean, maybe we do. I mean, this goes back to the whole sort of power dynamic and whether you think that these sites should have the control that they do. I am a believer that customers buy products from companies based on what you think they stand for, what they mean. This goes now we're talking about, we go back to Brian and Airbnb or Patagonia. Or Disney. And I think that's totally fine.

Kara Swisher: Yeah.

Andrew Ross Sorkin: Now, if they're all colluding together to say, you know what, no bank or no platform wants to do sex workers and they're talking to each other and saying, we're all going to do this together, arguably that's a problem. So when you think about this, when you think about the banks going back and forth on OnlyFans, one of the things OnlyFans had said last week, I believe, is that they couldn't raise venture money. I can't believe venture capitalists have the lowest bar in the planet. I mean, it's lower than the lowest spot on this earth. I don't think that Andreessen Horowitz is getting into the sex worker business anytime soon. I mean, I think most of the-

Kara Swisher: Is that really true? They can't find money. There's money, like, there's not enough rat holes to shove down all the money available to a lot of these startups. And if it's especially lucrative, there's always someone who's going to pony up, do a SPAC. I think that there's some- I don't know. I mean, maybe, maybe, maybe, maybe there is.

Andrew Ross Sorkin: But by the way, there's less- So this is interesting. There's probably not a bank in town right now that would take your company public if you were-

Kara Swisher: Oh, my fans, yeah.

Andrew Ross Sorkin: Doing this kind of thing. So there's also the argument to say that from a business perspective, long-term value creation as a platform that actually being a, quote, straight platform, for lack of a better phrase, or let's call it sex worker free, might actually be a better business model long-term.

Kara Swisher: Let me just say, I'm going to make the opposite. Look at Tumblr. It was bought for a billion dollars by Marissa Mayer. And then it was sold for like $3. You and I could have bought Tumblr at the end, right? So look, that was a heavy duty. That was a lot going on there. And so they lost all their value. That was their, and the same thing with OnlyFans. I think people know this for what it is, especially during the pandemic, it got bigger. I think this is what they're married to and they have to figure out a way through it. But I would say, and maybe you can't pivot. Pivot, here we are on pivot. Could you pivot the business model? I don't know. And maybe you'd want to try to pivot the business model because, look, my kids are too young, though, and who knows, maybe they are on this stuff and I don't know, and I'm praying that I'm keeping an eye on all this stuff, but I wouldn't want them on OnlyFans, right? Because I know what's on there, even if they told me what they were really trying to go find was something else.

Andrew Ross Sorkin: Right, right, right. And so maybe there's a bigger tam, I hate tam, but there's a bigger tam if there's no sex workers on the platform. Presumably. But again, look, the minute they take them off, they run smack into TikTok. They run smack into other creator platforms. And there's like a new creator platform every five minutes. And so I think this differentiates them. And it's just, I'd love to understand what happened behind the scenes. Like here, they got a bank or someone to do it just the way Parler got someone to do their tech after they got dumped by a bunch of people. There's always someone lining up.

Kara Swisher: Anyway, this is a really interesting, we're going to keep watching this. It's a fascinating area. But you're right. People are really suddenly very pro-sex workers. Like, how dare they not let them do that, create that online? It's interesting. Hugh Hefner would love what's happening.

Andrew Ross Sorkin: Hugh Hefner, whatever. Hugh Hefner would love what's happening. Yep.

Kara Swisher: Andrew, let's go on a quick break. When we come back, we'll talk about the New York Times profile and investment mogul, Kathy Wood, and take a listener mail question.

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Kara Swisher: Andrew, we're back with our second big story. This is an area I'd really like to understand from you. This is a phenomenon, this particular investor is. The New York Times published a profile detailing the rise and success of Cathie Wood, the Wall Street vet and founder of ARK Invest. The profile titled God, Money, YOLO, How Cathie Wood Found Her Flock starts with her bullish stance on Tesla, explains how it helped build her strange alliance with a new generation of risky traders. She's really popular. I've been aware of this. She started ARK Investment in January 2014. The firm invests solely on disruptive innovation. I have to tell you, so many people have a target on her. She's a fascinating character. Tell us about her and what you think about this strategy to be as transparent as possible with her investments and her decisions.

Andrew Ross Sorkin: Okay. So I've known Kathy Wood for quite some time. We've interviewed her on Squawk Box, actually, more times than I can remember. And I will tell you, especially early on, I thought that she was a bit crazy. I did not, I didn't get the joke.

Kara Swisher: To find crazy, why is that? Tell me why that is.

Andrew Ross Sorkin: She would come on and tell us that Tesla was going to the moon. And she would set these price targets, which seemed completely unreasonable at the time.

Kara Swisher: Yeah, it seems very Henry Blodgett, Amazon, 1990s.

Andrew Ross Sorkin: And she had lots of math, which didn't, at least to me particularly, make a lot of sense. I know I get a lot of feedback on Twitter saying how is this person on TV saying these things. None of this makes any sense. And yet to a large degree, at least temporarily and we won't know whether it's temporary or forever, she's been right. Which is to say that Tesla's gone up. She was an early believer in Bitcoin. She was indeed. And so many other parts of this, as you described, YOLO economy. And so she clearly tapped into something and not just tapped into the right stocks to buy, but also how to communicate with this sort of new generation of social media driven Robinhood trader. And so she's attracted a ton of money into her funds. And as a result, literally when she puts out a statement saying we bought X at the end of the day, there are people who are literally – some people just own her fund, but there's a lot of other just straight up copycats.

Kara Swisher: Yeah, because she's very transparent about her investments, which is usually not what these people do. They'll say even one thing and do another sort of like it's essentially an episode of billions. It's interesting about- Speaking of Andrew Ross Sorkin. No, no, but what's so interesting about the idea of the transparency is thus far the transparency has worked. Meaning every time she says she's buying something, people copy it because it's working, right? The flip side can also be true, which is to say that when someone makes a trade, makes it public, when it's public, sometimes there are people who then decide that they want to take the opposite side of the trade. That is not happening in this instance because so far in this, at least the past 18, 24, whatever months.

Andrew Ross Sorkin: Yeah, she's killing it.

Kara Swisher: You know, everything's working.

Andrew Ross Sorkin: Yeah.

Kara Swisher: So when you have potential risky, it's obviously riskier investing. How should they think about when they're following her investment strategy?

Andrew Ross Sorkin: Look, I don't want to offer investment advice. The only thing I'd say is diversifying matters. And so if you have all your eggs in the Cathie Woods basket and you're trying to make sure that you're diversifying your risk, that's not probably the best idea in the world. Having said that, if you want to gamble on this sort of YOLO economy.

Kara Swisher: Heavy word. YOLO, Andrew. What do you think of YOLO? What do you think of YOLO? I mean, it kind of shows the stock market is kind of a gamble. We are in a YOLO moment. The question is, is this a tulips moment? Have we always been in a YOLO moment? And just the very powerful people know that, and we didn't, all us chumps?

Andrew Ross Sorkin: I don't think so, actually. I think that we're in a YOLO moment because you can get money from, effectively, the government via the banks for next to nothing right now. The stimulus money was thrown around. There were a lot of people hanging around during COVID, stuck inside. So they had nothing to do but basically gamble and trade. And that's what they've wanted to do. And now that we've sort of lived through a pandemic, hopefully coming out on the other side, but who knows where we really are. I think there is a YOLO sense of, you know what, screw it. I'm just going to start spending money because who knows the next time I'm going to have the opportunity to. So all of that. Now, the question is, can you create a self-fulfilling prophecy, right? And that's to me the interesting part of it. If everyone just spends all their money all the time, that's great. Everyone's YOLOing, in other words. If everyone YOLO's, can you just keep building a persistent YOLO economy?

Kara Swisher: Right. So the New York Times profile found she manages nearly $85 billion, which is up from less than $10 billion at the end of 2019. First of all, where's her money coming from? And, you know, knowing her trails are trailing the overall market this year. I know you don't want to give investment advice, but what typically happens here? There have been popular. Who was the last popular person like her? There was another investor that then sort of hit the skids and this and that. I mean, obviously, every investor hits the skids at some point. But what is the—

Andrew Ross Sorkin: Well, look, I mean, Bill Miller. Who is going into these funds?

Andrew Ross Sorkin: For many years was— Yeah. Well, right now, it appears that it is a younger generation of trader, of Robinhood investor. But there's some institutional money in these things now. I mean, it's not all just straight retail, but the interest around her is mostly retail. Okay. And the question is, this time around, is retail somehow smarter than what used to be described as the smart money? It used to be that the retail was the dumb money.

Kara Swisher: Dumb money. The institutions were the smart money.

Andrew Ross Sorkin: Yeah. Has that, you know, is GameStop and AMC somehow changed that dynamic? I happen to think it probably hasn't long-term, but boy, has it short-term.

Kara Swisher: Yeah. Yeah, you can make some money. So who does she compare to? Can you think about? And then I have one more question on her. I mean, who does she compare to? Was there a character like her? Like, look, you work on *Billions*. Is there a Cathie Wood character on *Billions*? Is there a character in this day and age? I'm thinking, back in the late 90s, who do you think were those types of characters? Henry Blodget was. I mean, Henry didn't have his own fund.

Andrew Ross Sorkin: No, he didn't.

Kara Swisher: But Henry was a believer in this stuff. Mary Meeker. Henry's a little bit more circumspect today. Mary Meeker, though I would say that Mary's been— this was so interesting. She was a real cheerleader of this, yeah. But she was right. She was right. Turned wrong, turned right again.

Andrew Ross Sorkin: Yeah. Right?

Kara Swisher: Yeah, I think she had an overall thesis and much more conservative, but both of them had the overall thesis of the growth of the internet. I think nobody understood what the pandemic would do, especially this particular go round. But I think, yeah, I suppose Henry would do it.

Andrew Ross Sorkin: But I would also say that there's one different insight that Cathie Wood has had here that actually is interesting. And it relates to Tesla, but it relates to maybe some of these other meme stocks as well, which is that it's not just the business model that has to be scalable. It's the ability to get new capital that has to be scalable. And that if you can effectively continue to get new capital, you can almost create your own self-fulfilling prophecy of success.

Kara Swisher: Right.

Andrew Ross Sorkin: And that is actually an insight that most investors have thus far completely missed.

Kara Swisher: I see. That's a really smart one. Who's coming after her? That's my last question. I mean, because it looks like people are coming after her, but they don't see. You know, I was just doing this research for my book. And remember David Rocker was all after AOL 100 years ago? He was sort of correct, but he was not correct, if that makes sense. He was technically correct, but not strategically.

Andrew Ross Sorkin: I just think the classic Wall Street banks, the classic hedge fund managers, anybody who believed in sort of Graham and Dodd or sort of Warren Buffett, anyone who believes in these classic models looks at Cathie Wood and they turn up their nose and they say, "This is ridiculous and I don't get it. What is she doing? She's some kind of Pied Piper." That's what they think. Now, they're thinking that while she's laughing all the way to the bank and they're not.

Kara Swisher: Yeah. I'm going to have her on *Sway*. At the moment. Having Cathie Wood on *Sway*. All right, Andrew, let's pivot to a listener question. Roll tape. You've got mail.

[Audio clip plays]

Listener: Hey, Kara and maybe Scott, if he's done gallivanting around the world. Steven Spiker here, pediatric oncologist by training, now working in health tech. With the recent and not surprising dismantling of Google Health, it has all of us working in health tech asking the question, if a company like Google can't cut it in health care, then who is actually capable of innovating in a space where there is such intense need for innovation? Appreciate any insights.

Kara Swisher: Well, this is an interesting story. You know, both Andrew and I have been covering this long enough to have watched Google at this several times. I literally started researching and I'd forgotten all the things they had done. And then Microsoft with HealthVault and it just has gone on and on and on. So what Stephen's referring to is Google Health Vice President David Feinberg's departure from the company. Feinberg will be joining Cerner, an electronic health records company in October. There's a lot of that going on, electronic health records. And there are several companies— Epic, I think, is one, and some others. So health tech is still something to be bullish on. Scott always says investors should be looking for every opportunity to get between the intersection of technology and health care. But Stephen's right, Andrew. According to a report by Deloitte, investors dumped around $22 billion into digital health companies in 2020. That's more than double the investments made in 2019. Everyone's hoping, like with climate change, everyone's hoping for the big moment. And Google, Microsoft, Apple have not been as successful. What do you think?

Andrew Ross Sorkin: Well, I'm going to push back and say, have they not been successful? I would argue Apple, for example, with the iWatch has actually changed the dynamic in a material way. Now, have they changed it in a monetary material way yet? I don't know. I wear an Oura Ring. I just used a QHealth testing device to test my daughter for COVID. She's negative, happily. That device, I think long-term, is not only going to be testing for COVID, but next time we think this—

Kara Swisher: This isn't a rapid test. I used an iHealth rapid test the other day because I was near a COVID person, so I took—

Andrew Ross Sorkin: No, this is effectively the equivalent of a PCR test that you would do in your home. We had this company actually on our program a while ago. Eventually, this test, which is a box, a cartridge, it links to your phone. The phone can therefore link to a doctor. You'll be able to put strep tests in there. You'll put influenza. Basically, there'll be a test for everything.

Kara Swisher: How much was this box? Just curious. Because the iHealth thing was $30. I thought that was a lot. It was great. It was well done.

Andrew Ross Sorkin: You know what? I don't know. To be honest with you, I don't know. I just got a test version of it. So I don't know. I think that the box is probably going to, I would imagine, cost a couple hundred dollars. And I would assume the tests would have to be a lot cheaper unless they—

Kara Swisher: So the way pregnancy tests have gone. It used to be you went to the doctor, killed the rabbit. Now you have pregnancy tests. But don't you think that that's where all this is going to go? I mean, I think telehealth, telemedicine has actually demonstrably changed even over the past 12 months. The next time that you are even remotely sick but not so sick that you're dying, you're going to get on your phone and you're going to talk to your doctor. The equivalent of FaceTime. Maybe you'll have one of these devices in your home. He or she will tell you, take some test and send me the results and then we'll decide what to do. I think there's going to be a lot of that. And I think we actually are on the cusp of it. Now, are we on some mind-blowing change in how medicine and healthcare is going to be paid for and the economics of it all?

Andrew Ross Sorkin: So you're talking about monitoring because you have the Oura Ring and I know you tweeted about it because they're mad that Fitbit's stealing some good bits from them. They have a way about readiness. They've been pushing themselves as you could recognize COVID because of sleep and this and that. But these are monitoring things, whether it's the Oura Ring or it's this box. And I agree. Going to get a strep test is a pain in the neck. So you just don't do it, right? This experience I just had with getting these PCR tests was easy because I used Curative. I went to like a booth that was in a high school, but it took days and days. It was ridiculous how long I waited. And in Europe, there was sort of instant. I took the rapid test and I wasn't sure it was— it just was one of those moments. I was like, "Well, this is a waste of my time." For sure, I could be making money doing other things instead of running around going to little booths in high schools or churches. But it was better than it was, for sure. But this is all monitoring. What you're talking about is monitoring and cutting out some of the really ridiculous stuff we do for healthcare. But I think they're talking about the idea of records being able to monitor data sharing, getting tested. Obviously the pandemic pushed us into this telehealth thing. It hasn't worked as well obviously with education. But where do you see the investment possibilities then beyond monitoring?

Andrew Ross Sorkin: Well, so I think there's going to be the monitoring, testing. But I think the whole experience of going to a doctor is going to fundamentally change. And therefore, by the way, the records issue, meaning the healthcare records issue, will have to change because they're going to have to be more accessible. You're going to— they probably will all of a sudden be mobile, meaning you're going to have them on your phone, go from one doctor to the next, or go from one doctor to the next sitting inside your own home. I think all of that is coming. It's just taking a long, long time, in part because so many of these healthcare systems already have either old technology that they're still trying to amortize, or the new technology is not completely baked yet. I mean, I've talked to doctors over the years about, "Why aren't you using the Google service or somebody else's service?" And they've customized these platforms to such a degree. It's like Oracle and databases. They're sort of in the database of Epic or whatever they're in, and they're just stuck in there. You're locked in. So I think there's going to have to be some transformational work done that effectively gets you to this next place. But I don't know.

Kara Swisher: What about telehealth, though? You use a lot. I've tried a lot of these. I've just noticed, speaking of ads on Instagram, this thing called Fastic, which is another— there's like 20 apps for fasting to monitor it rather than doing it yourself on a piece of paper. You know, I tried the continuous glucose monitor thing.

Andrew Ross Sorkin: Yeah, Levels.

Kara Swisher: Which was interesting, those large levels. And there's several like that, SuperSapiens and others. Again, this is all sort of tech guys trying not to die.

Andrew Ross Sorkin: Yep. And me and Kara.

Kara Swisher: So what would be the biggest thing that would have to happen? Would it be Amazon getting in here? Honestly, I would trust them over a Walmart or a CVS. Now, CVS and Walmart just got two new CEOs, two women who are running these companies. Where is your health care going to come from?

Andrew Ross Sorkin: The truth is that the challenge at the moment for all of it, even the monitoring stuff we're talking about, is it's too pricey. I mean, let's be honest, Kara. You and I are like one percenters in this. This Oura Ring here, I think it costs $300.

Kara Swisher: I still was like, "Fuck this, $33."

Andrew Ross Sorkin: If you're wearing that Levels patch, that's not a cheap product. I mean, if you want to actually monitor your glucose.

Kara Swisher: No, it's a couple hundred dollars.

Andrew Ross Sorkin: It's a couple hundred dollars. All of these things still cost too much. So to me, the real question is, when you can get an Oura Ring for $30 or something like that. Or it gets subsidized by your insurance company because they actually believe that all of this stuff changes the dynamic. That's the thing I don't know. Meaning, we can wear all of this monitoring stuff, and then you have to say, is the monitoring stuff truly a nudge enough to change people's behavior to the point where you're seeing demonstrable outcomes?

Kara Swisher: Changes. People say to me, "Oh, you wear your Oura Ring. Does it really change your sleep?" Well, I always say to people, it doesn't really change your sleep. It changes whether you decide— you look at the data, and does the data tell you that you should go to sleep earlier? And is that any different than if you did?

Andrew Ross Sorkin: Do you? I actually do. I have found this thing to be a huge—

Kara Swisher: You're a good Canadian.

Andrew Ross Sorkin: I have found this monitoring the sleep thing to be a major game changer for me because without the data, I honestly would just be tired all the time. And I still am.

Kara Swisher: It's true. When I was wearing this, I stopped eating certain things. I did. And it made me feel better. Honestly, I do. It was interesting. And it was surprising things. It was never the thing I thought. It was like something weird. And I was like, "Oh, I see what's going on here."

Andrew Ross Sorkin: But can I throw one? Let me ask you a healthcare question.

Kara Swisher: Sure.

Andrew Ross Sorkin: I would say pre-pandemic, the pharmaceutical industry was hated. Hated, right? Do we love the pharmaceutical industry now? Do we love Pfizer now? Do we love Moderna? Or do we hate Pfizer and Moderna?

Kara Swisher: I was just going to ask you that. I think it's interesting to watch. If you notice certain VCs on Twitter, follow the money. They're moving into the conspiracy theory world. Right. This idea of them trying to benefit and the way we're doing testing helps them and the way we're doing vaccines helps them. The more we're sick or the more we feel we're sicker in fear. There's a lot of that online. I don't know if you've noticed that. At the same time, remarkable what's happened. And I credit the more innovative companies like BioNTech and others who have been working on a lot of this stuff for a decade. Right. It's not like it's new. One of the things I was arguing with one of my relatives was, "This is new. This is fresh." I'm like, "This has been worked on for a decade. Come on. They're just moving it out quicker for something else." So I think it's both. I think you're sort of appreciative of how quickly this rolled out. And at the same time, the resistance.

Andrew Ross Sorkin: That's the last question I was going to ask you. If you're talking about all this monitoring and everything else, people won't take a friggin vaccine. Honestly, there was a fireman from San Francisco who I literally want to go find and punch in the face, except he'd kill me. But it's just amazing to watch. They're not going to be willing to be vaccinated because they think they're being monitored. They're certainly not going to be willing to be monitored on other things.

Kara Swisher: Okay, so I go back to follow the money in the opposite way of what the venture capitalists, the skeptical venture capitalists online may be saying or conspiracy theorists. I think if there are incentives by either insurance companies, employers, or others to wear monitoring devices or other things because they believe that having those devices on actually changes people's behavior and makes them healthier, I think people are going to do it. So Delta Airlines just announced that their employees— they're not saying you have to be vaccinated. They're saying it'll cost you if you're not vaccinated. It's going to cost you $200 a month if you're not vaccinated. I think you're going to start to see nudges like that around all sorts of versions of health.

Andrew Ross Sorkin: I like a stick. Other people— I was arguing with someone who was here— they like the carrot method. "Let's give them this." I'm like, "You know what? No, you don't get to come to the concert. You don't get to come. You don't get to— just like with everything else. You don't have your polio vaccine. You don't get to come." I'm one of those parents. "No, thank you. I don't know." I don't like incentives. I think the only thing— and I get that people get angry about it— but it reminds me a lot of, you don't get to drunk drive. You just don't. Unless we get autonomous cars, you don't get to drunk drive. And you pay the price for that. And other people do too. So I just worry about a lot of these things. I think this monitoring is all good for people, but they will resist it because they feel they're being monitored and they have good reason not to trust the Googles and even the Apples of the world.

Kara Swisher: Fair enough. Anyway, we'll see. You have to tell me this.

Andrew Ross Sorkin: What?

Kara Swisher: When are we going to have autonomous cars? I know it's on a tangent, but I just want to know.

Andrew Ross Sorkin: Not today.

Kara Swisher: I want to know.

Andrew Ross Sorkin: Not today. Not today?

Kara Swisher: What about 2030?

Andrew Ross Sorkin: Not tomorrow. I'll ask Elon. He's coming to Code. We'll ask. You should come out and ask him yourself. Soonish. Soonish, notish. Who knows? Not for a while.

Kara Swisher: All right, Andrew, one more quick break, and we'll be back for predictions.

[Ad break]

Kara Swisher: Okay, Andrew, as you know, every week, I demand a prediction from Scott and other guest hosts. So I would like your prediction, please.

Andrew Ross Sorkin: My prediction is that by, let's call it October, the Federal Reserve really is going to pull back on the punch bowl. And we are going to see the combination of the pulling back of the punch bowl by the Federal Reserve and the pulling of stimulus checks and unemployment checks and all of that actually start to show itself for the first time. And it's going to get a little dicey in October.

Kara Swisher: People think that. I've been reading a lot of these newsletters that are saying this October. It's not going to be a good time for stocks. You know, what newsletters are you reading these days?

Andrew Ross Sorkin: Hopefully there's— still, I'm reading a lot of the Puck ones. There's one, there's a good one called DealBook.

Kara Swisher: There's a good one. Yeah, DealBook, I read you. Of course I read you. But here's why, let me ask you a question. So the pulling of stimulus checks and the punch bowl— explain what this punch bowl is. They've been doing this thing and it has letters, what's it called? QE, whatever. QE infinity. Quantitative easing infinity. We are basically printing money like it's going out of style.

Andrew Ross Sorkin: Yeah, explain that for regular people. I can't, I always forget it. I mean, the best way to explain what's happening right now is that for many, many years now, we have continued to print money and lower interest rates to next to nothing so that basically money becomes free. If you go get a mortgage today, it's—

Kara Swisher: I know, I just got one. Tiny. I mean, it's so great.

Andrew Ross Sorkin: It's so great for you. I hope you captured a 30-year fixed mortgage because who knows what they're going to be then.

Kara Swisher: That's right.

Andrew Ross Sorkin: You know, at some point, they're going to pull the punch bowl away from the party and say, "No, no, no, we're going to increase interest rates."

Kara Swisher: So Jerome Powell's been a punch bowl spiker, in other words?

Andrew Ross Sorkin: Oh, absolutely.

Kara Swisher: Is he going to be replaced? Let me push you on this prediction.

Andrew Ross Sorkin: He will not be replaced. I will— I'm very confident he will not be replaced. You can call me on it when he does.

Kara Swisher: All right. Why? Why? Tell me why. Because lots of people think they're going to pick— they name some other people.

Andrew Ross Sorkin: Because ultimately, he's done a pretty great job. I think you have Janet Yellen, the Treasury Secretary, who likes him, thinks he's done a good job, thinks the market trusts him. The markets trust him. And there is this sort of strange dynamic between the markets and the economy. And if the markets don't trust you, I think that's a dangerous place to be, too. So I think there's the devil you know versus the devil you don't.

Kara Swisher: Even if they're going to pull the punch bowl.

Andrew Ross Sorkin: Even if he's pulling the punch bowl. And the stimulus checks, I agree with you. It's really interesting to see what will happen with people going back to work. Everywhere you go, "For hire, for hire, for hire." And by the way, throw in where we are in the pandemic. And there are lots of restaurants— I think they might struggle this winter because people are not going to want to eat indoors. Catering companies that were planning to do indoor weddings or conferences or events or all sorts of things that aren't going to get the business. So I think it's going to be a little bit more challenging than it has been.

Kara Swisher: All right. That's an excellent prediction. All right. You had two there. You have Powell is staying in. And get careful for October. I'm so glad I got my mortgage. Anyway, thank you so much, Andrew. As usual, you've been excellent. And you win the whole award. No, you don't. I got the job.

Andrew Ross Sorkin: I got the job.

Kara Swisher: Yeah, no, no, no. Maybe, maybe you will. Who knows? If Scott doesn't behave, that could be a possibility. Anyway, don't forget, if there is a story in the news and you're curious about and want to hear our opinion on, go to nymag.com slash pivot to submit a question for the show. Andrew, please read us out.

Andrew Ross Sorkin: Today's show is produced by Lara Naiman, Caroline Chagrin, and Taylor Griffin. Ernie Endrodot engineered this episode. Make sure you subscribe to the show on Apple Podcasts, or if you're an Android user, check us out on Spotify or, frankly, wherever you listen to podcasts. Thanks for listening to *Pivot* from Vox Media. We're back next week with another breakdown of all things tech and business.