Speaker 1Hi everyone, and welcome back to our Friday wrap-up. I'm still Marta Skar.
Speaker 2I'm Nikolaj Tangen from New York.
Speaker 1Great to see you, Nikolaj. This week you spoke to Mike Milken. Why did you want to have him on the podcast?
Speaker 2Well, that is just so interesting, because when I went to Wharton, he was on the wall of fame. And they basically had a wall where they had pictures of the alumni who had achieved great things. And he basically started up the high-yield market, which is also called, you know, the junk market. They don't particularly like that word, but it's a high-yield market where you basically get higher paid for lending to riskier companies. And it's just incredible what that whole industry opened up. It is. It enabled the consolidation of totally new industries in telecom, in media, and so on. And these industries wouldn't have been there. And some of these famous names, you know, the founders, the big founders of things like, you know, Murdoch, the big telco guys, the cable guys, they just wouldn't have been there. So really fascinating. And when I meet people who now work in different types of firms, many of them basically, in a way, went to school with Mike Milken and learned from him. But having worked with him, I think you can kind of draw the connection to some more than 80 firms, which are now, in a way, indebted to what they learned from him.
Speaker 1Yeah, so he for sure has been a great inspiration for many. Then he also runs an annual conference that he has been running for 30 years. What do you find most interesting in this episode?
Speaker 2I think it's interesting how the whole thing started. I mean, he just questioned really how things were working, you know, from a young age. He just said that, listen, the things which are. The things which are considered safe are actually not that safe. And the things which are considered risky are, if you just pool enough of these type of assets, it's actually not that risky and pays a lot more, even when you adjust for a higher level of losses. So it really intrigues me that people question the status quo and, you know, try out new things.
Speaker 1Yeah, and he for sure does that. I also find it interesting when he talks about how he's trying to change people's minds by kind of not raising your voice, but by asking. By asking simple multiple choice questions and then let people find answers themselves. What do you think of this method?
Speaker 2I mean, it's a very, very effective method. It's just incredible how difficult it is to get people to change their mind generally, you know. We are so set in our opinions. It goes for everything. Things just so quickly turn into religion, be it political views or other kind of really hard-held views. And so to question people in that way is a very good. It's a very good trick.
Speaker 1Do you think we're good enough at that as investors to question everything?
Speaker 2Absolutely not. We are. I mean, to work with. To pre-held biases as investors is one of the most difficult things we do. To really start every morning questioning, you know, why do we have this position? Would I have bought this from scratch today? You know, there are so many behavioral kind of biases that we need to work with as investors.
Speaker 1But you meet people all the time. Right? And interview them and ask questions. How often do you experience that there are questions that you regret that you haven't asked?
Speaker 2Pretty much all the time. I can wake up in the morning and think, why? Why did I not ask that question? Now, it's being helped a bit by the fact that many of these episodes I prepare for an extended period of time. So typically, I start to work on them a couple of weeks ahead of time during the weekend. So I start to read about it. I listen to things that I've done before. Right? And then, importantly, I ask a lot of the people I know to come up with different questions. And so combined, we, you know, get into a lot of different angles when it comes to the various people I interview. So, for instance, in preparation for the interview with Mike Milken, I spoke to people who were running different companies in this space. People who had worked with him before. I read the chapter in Robin Wigglesworth's new book on the debt market. Which is called The Fabulous Debt. And it's a super good book. But there is a whole chapter on Mike and Milken there. Which really was very helpful for me to help prepare. So I think the more different angles you have into something beforehand, the less you regret not having asked questions. And then, of course, when you do these podcasts, the key is to, on the one hand, is to move forward. Because you need to move the interview forward. At the same time, when there are interesting things coming up, you need to follow up. We follow. You follow up questions, right? To drill down a bit deeper. And so, in my mind, the art here is to move down, but at the same time, move forward. You know, up and down, up and down.
Speaker 1Fun. So talking about moving forward, let's move forward to the fund and the markets. It for sure is an interesting time to live. Lots of turbulence and movements. It's the midterms. How do you see the market?
Speaker 2It's been volatile since the midterm. In particular, the tech sector has had a correction on the back of potential delays in data center build-outs. I think when I speak to investors here, and I've spoken to quite a few of them, the interesting thing, I think, generally with the U.S., it's just, OK, there's been a change of direction. Let's just move in this new direction. It goes much more for the U.S. than it does for Europe. And we saw it, for instance, after the financial market, after the financial crisis. They just, in a way, shrug it off, take the losses, move on. It's something we did not do in Europe. We were stuck with losses for much longer. It didn't clean up our financial institutions. And it means that we are just much slower and get going again. So this is, I think, one of the real positives with the U.S. is just the agility and the ability to change direction and to march on, you know?
Speaker 1And I think it's a good thing. Anything else you have learned in New York the last week?
Speaker 2I've been sitting in on company meetings with various top managements, both, well, lately just a European company and a U.S. company. I am surprised how little effort they put into AI adoption and AI integration. Increasingly, there is this big gulf opening up between companies in the kind of modern world, in the AI world, and old industries. And people still do things in such an old-fashioned way. And it really surprises me that there is not more focus from the top, you know, to get this going.
Speaker 1Mike Milken actually focuses on this in the episode when he talks about old versus new business and how you classically think of a new business as something more risky.
Speaker 2Absolutely. And I think probably a lot of the risk now in society and in the stock market is some of these old businesses, which I just mentioned. It's going to be replaced or totally obsolete. There is, as we are seeing the start of a trend here, which is also interesting, is that the private equity companies and some of the big players are basically taking over these old-fashioned companies, scooping them up in order to replace the labor force with new technology. We saw SoftBank moving in on a guarding company where you expect them to replace the guards with new AI solutions. So to be stuck in old technologies and old way of doing things is risky. And if you don't implement AI, somebody else is going to take your company over and do it for you.
Speaker 1Talking of implementing AI, because we have had Tech Day in New York this week.
Speaker 2Absolutely. Now, this is such a cool thing. So we have in the fund Tech Days in all our offices and not at the same time, but we have them on a rolling basis. So we kick off in Oslo. We have London, Singapore and New York, and we basically take the best presentations. And the best user cases, and we move them across the world, and they are being improved as we move them. We find new ones all the time, which we add on to the range we present. Everybody is a lot of very hands on sessions. And so this is a totally packed day. We have no external meetings. Everybody's in the office, no conference calls, just zoom in on technology. And it's just so much fun, so vibrant, and it's such a buzz.
Speaker 1And you sit down and build. Did you build an agent, Nicolai?
Speaker 2I didn't build so many agents yesterday, but we have a lot of agents going here in the background. And Grete and I, I think we got 16 agents here. And the next thing is to make a kind of a control center in a way to orchestrate these very helpful things. So it's very good. There will be an update. There will be an upcoming podcast with Grete as well. We will talk a bit about how she makes life more efficient by the use of technology. It's coming up in a couple of weeks. So stay tuned to that one.
Speaker 1Okay, great. So moving into the last segment here. So Mike says that his favorite book as a little boy was The Almanac because he loved looking into facts. What was your favorite book?
Speaker 2Well, I was more into, you know, the New Musketeers and a bit of, you know, bravery and fighting and that kind of stuff. And I also loved, you know, The Count of Monte Cristo. So a bit more, what should we say, predictable, my choice, I think. What about you?
Speaker 1Yeah, so my favorite book was The Brother's Lionheart, which is written by the Swedish author, Astrid Lindgren.
Speaker 2And did you not, I think you called up one of your kids after one of the characters, no?
Speaker 1Yeah, and I invited my sons after one of the characters. His name is Jonathan. So I think I read that book a hundred times. So it's something with those children's books that just stick with you for life. Okay, great, Nikolaj. Thank you. Happy weekend.
Speaker 2Happy weekend to you too.
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