Larry Fink: The $100 Trillion Shift Beyond Stocks

Well, it's great to be here at city. Thank you for our partnership. Your partnership has been vital for our growth since we started 37 years ago. I would say the history between BlackRock and City, BlackRock and Solomon Brothers was pretty pivotal and so you are a part of our roots and the strength of our organization is because of the relationship we've had with City all these years. Thank you. I had wonderful parents. They were socialists. They were very progressively minded. They focused on a couple key characteristics. Academics was important there. They were quite frustrated with me versus my siblings who were more academically inclined at the younger ages. But more importantly they really pushed personal responsibility. They were always about taking your own personal responsibility. Don't rely on other people. And importantly my mother kept on saying if your adult life is screwed up don't blame your parents. It's on you. You got to take that personal responsibility and my parents were helpful on that journey of personal responsibility. But they were worried about me unlike they were worried about my siblings and so I was asked to work at the shoe store from 10 years old on. And that actually created an incredible journey of how to connect and relate to your clients. So you learned really early on how to communicate, how to sell something. And today I think for young kids they don't work that young anymore. They don't work that and I think it was a very good journey and I was quite immature for my age. So I needed that type of stability and pathway. I would say if my parents were here, they would say I finally got my act in order probably when I was about 15. It took that long for me to really try to develop a more purposeful life.

Well, the first time I ever saw snowfall was at an interview in New York in January of 1976. I was a true west coast kid. Turquoise jewelry, long hair, mostly brown suits then. But I was attracted to First Boston among all the different firms that I interviewed with. They offered a more personalized training program for me. And I really felt connected to a couple of the leaders on the trading floor who I interviewed with. And they wanted me to go right into trading. I was one of the few people then that when I started the organization, I had a pathway already determined. It was not going through the true training program. And let's be clear now. The incoming class at First Boston in 1976 was 14 people. People really don't understand the context of what Wall Street was then. The sum of all the capital at Goldman Sachs, Salomon Brothers, Lehman Brothers, White Weld, Merrill Lynch, the sum of all the Wall Street firms was probably capital-wise $200 million. People just have no idea how cottage industry the investment banking side was because historically they really took no risk. Having a large balance sheet was not necessary until really starting in 76 and 80 where the balance sheets just blossomed and bloomed. But I felt connected to the people. So it wasn't a matter of whether it was white shoes stodgy, which it certainly was. But I felt connected to the people. It was very clear that they believed in a meritocracy and I was attracted to that. And I remember even the first month, first two months on the job on the trading floor, it was very clear to me that I could do this. It was something that I became very excited about. And then right after the training program was over, they asked me to go into the mortgage department, the mortgage security department, with three people. And being there at the genesis of what became one of the largest markets in the world was really...

Ranieri. Yeah.

Well, what really transformed Wall Street was having a personal computer on your desk. Before that, you had a Monroe calculator or an HP12C. That's all you had. But in 1983, the mortgage department was able to get a couple PCs on the desk. And having our own, very modest technology by any standards today, we were able then to think about how can you take these pools of different mortgages and then how can you recalculate the cash flow characteristics of those pools. And that began the whole securitization process by having the ability to take large data at that time and then reorient the cash flows.

As you remember, we were doing things by hand with a piece of paper.

So, let's just go the pathway. You mentioned that I became the youngest managing director in the firm. That was at 27 years old.

At 31, I was in the executive committee of the firm. And at 34, I became a partner. And that was the path. Probably the most important thing for me was they spoke about it's all about the team and you're part of the team when you make a lot of money, and we probably should have been fired for the amount of money we made.

Because the amount of risk we took to make that money. So in '84 and '85 we were the most profitable department in the firm. First quarter we made even a record amount of money and the second quarter 1986 we lost the hundred million bucks. So a bunch of lessons. I knew the way the firm treated me and the team, I knew right then I was going to leave. It took a year and a half later to decide what I was going to do, but it broke the connectivity between me and the firm. It wasn't about team, it was about you. I did not feel I had the support of 80% of the firm when we lost money. And this whole concept of partnership and team really broke down in my mind. But the greatest lesson learned was as much as I thought we knew what we were doing, as much as I believed we had the right group of investors, we did not evolve our thoughts with the markets. And assumptions that we made, as you said, the relationship we had with Salomon then and our competitive nature with Lou and Salomon Brothers, we got ahead of ourselves in ego on trying to build market share. One quarter First Boston was the leader in the securitization process. Next was Salomon Brothers and back and forth. Lou was fired a year before

over the same nonsense. And there was another good example. I didn't learn my lesson about what happened to Lou. But I never forgave myself. Taking personal responsibility, I never was comfortable with my actions and I blamed myself that we did not adapt and grow our risk management tools and I should have been pounding the table that we can't take on these positions. I can't take the firm's capital. The firm said, 'Here's more capital. You did so well. Take more capital.' And the firm had no idea the risk we were taking. Nor did we because we did not have the proper risk tools. And I would say the ashes of my failure at First Boston was the fertilizer of BlackRock.

Well, I lost a lot of self-confidence over that whole process. That being said, it took a year and a half for me to move my career forward. I had offers to become partners at various Wall Street firms and I just felt it did not feel like that was the right pathway for me. I did not want to repeat and do the same thing. And I started investigating the whole concept of going on the buy side. But quite frankly, I had two very important clients who were going to fund me to start the company. And I did not have the confidence in doing it myself. And I started talking to Steve Schwarzman then. First Boston was a firm that raised Blackstone.

Blackstone won 525 or 545 million.

Yep. But I helped raise it because of the relationship we had with all the savings and loans. A good part of the capital came from the savings and loans.

and he sent me over there to go clean up.

So we did that and I started talking to Steve and they were very intrigued and actually Steve had more confidence in me than I did and I became the fourth partner of the Blackstone group to start this idea. And as you said, I was able to bring the weekend after I resigned, I had an open house at my house and about 60 or 70 people came over. Most of them wanted to understand what was my next venture and I was able to pick and choose who should be part of it. And quite frankly, I told a few people I said you're the solution when I leave. You should stay on. Your career is going to get better without me here. And the firm actually fractured at the time. Some people going one place, some people staying behind.

Yep. In fact, I think we had to sell the one building to recoup part of the capital base, Tower 49.

No, I mean as I said, when we started the firm with eight people, two of the people were technologists. And another change in technology for $25,000, which was a lot of money back then, we were able to buy one Sun Spark workstation and it was just released in 1988. And that was infinitely more powerful than any PC at that time. But having that allowed us then to start developing our own risk tools at BlackRock. And so the whole foundation of the organization was building tools that help us navigate clients' portfolios and it became an integral part. I would say the culture of BlackRock is so embedded in this risk technology. And so the whole foundation of the firm from day one was to develop the risk tools because I said I will not live my life again like that.

Yeah. And you didn't have those tools, right? And so we through so and then in 1994, when a firm called Kidder Peabody was blowing up that was owned entirely by GE. And GE was a big relationship that we had. I had when I was at First Boston. I went to Jack Welch then who was the CEO and Dennis Dammerman who was a CFO and said we could help you navigate this and I think everybody assumed Goldman was going to get that assignment because they were so connected to GE. But the big validation for Aladdin was that GE assignment. So we were hired to liquidate the bad assets that were the remnants of KDP. The good part of KDP went to Paine Webber, and the bad part stayed on the balance sheet of GE. And really at that time Jack Welch was this legendary CEO but his career was being threatened by this loss. And over a nine period of time we were able to earn them, you know, they made money on that portfolio at the end. And I was so confident in our abilities at that time. I said to Jack and to Dennis, we're going to charge you no fees. And all I just want is the ability if we do a good job at the end of it, the completion of it, we could sit down and get a success fee. That was it. And it worked. And it was the highest fee ever paid to BlackRock. It was profound for GE at the time.

But from that moment on, we were then another pivotal point in 1997, we started offering Aladdin to third party clients. And our first client was Freddie Mac. My one of my former employees, one of Salomon's former employees, Greg Persigan became the CIO of Freddie Mac and he knew what Aladdin could do and he said, 'I need Aladdin at Freddie Mac.' And then in 2004, we made a pivotal decision that Aladdin could be used by anybody, all our clients but also all our competitors. And I made a statement there saying I want my investment team to be able to stand on their own success and their own abilities, but I want Aladdin to have the ability to compete with anybody. So these are just really important pivot points. And so we were able to really grow a lot and I'll get into it in a second how big it is, but we developed these risk tools that I still believe there is no other organization can do what Aladdin does today. And so then we had the financial crisis again. And just because we were, you know, our relationships with the US government with the Secretary of Treasury with the New York Fed presidents, we got hired in doing all this with the same idea. Actually on the Bear Stearns weekend, we were actually hired by JP Morgan to analyze the Bear Stearns portfolio. And so on that Friday and Saturday, we were engaged in helping JP to rapidly understand what would be their liability and cost. And I was constantly I had the buyer's approval that I could talk to the US government. So I'm going back and forth to Hank and Tim. And then Sunday morning at 6:00 in the morning, Tim calls me. He said, 'I need you now.' And I said, 'Well, I can't work for you. I'm working for Jamie.' And I said, 'Call up Jamie and release us.' And then, you know, to expedite the transaction, we'll get hired by the US government. And that's what happened. And then we went down to the Fed and probably the most pivotal moment was because a lot of the assets that Jamie did not want was going to be on the back of the US government and in the midst of this whole conversation. I mean we're just talking about minutes. So everything trying to happen, we were trying to get this done before the market opened in Asia on that Sunday night. And then I was formally asked by the Secretary of the Treasury, will the US taxpayers lose money on this portfolio? And that I had to ask a very simple question on a fairness opinion. Are you, can I include PNI because we marked down the assets so much. I mean you know even if there was a gap of a couple billion dollars of what we really think we knew with a you know because it was marked down so much the interest levels were so darn high that the US taxpayers probably will get their money back. And so we were able to do that. But through that moment then we were hired on the AIG moment and then we were hired by the UK government, the Dutch government, the German government, the Swiss government, the Canadian government.

No. No, I was never trying to make statements. Other than a couple general themes I guess. I mean what I would not have been writing these letters unless we did BGI in 2009. We became the largest index player in the world and importantly then we were responsible for a lot of equity ownership and the only power we had then was the vote. You can't sell. And I remember having conversation with Warren on this whole concept that and the real key that I was trying to promote if you look at the first few letters was really about the whole concept of long-termism and so it was really just finally thinking about long-term trends for long-term investors. So that was a and it became very very important as people looked at them every year to see what pearls of wisdom come down from you and it became certainly harder and harder and harder became harder to write.

I mean, there's two, but they're all interconnected. And that's going to be AI and tokenization of financial assets. So digital assets. Those are the two mega trends that are going to totally reshape financial services. I had a lunch today with a very prominent former finance minister, central bank, very prominent guy. And we were talking about and he wrote a big paper on tokenization, right? and stable coin and he would say he couldn't say it in his former role but he would say it today as a private citizen the banking system is being left behind in so many ways through technology and you see what like Nubank is doing in Brazil I mean an extraordinary company what they're doing and it now they're trying to do it in Mexico, Trade Republic in Germany. I mean I could go on all these digital platforms that are really reshaping but also you know if you intersect how AI is going to reshape how we think about big data analytics, BlackRock started an AI lab and that's what we called it in 2017 at Stanford University we have eight or nine professors spend one day a week at BlackRock helping us and coming up better algorithms and models to streamline. You know, getting back to the whole idea that we are responsible for 12 and a half trillion that means we do a lot of trading and so

I actually think in the early years scale operators are going to have a bigger edge. And this is what I'm worried about for society across the board. You see the scale operators who are able to afford AI, afford all this are going to be they're going to be the leading in the but as we democratize AI which is probably the second generation that's when you have to start worrying about your edge. But in the I would say BlackRock's edge today is bigger today than it was a year ago and much bigger than it was five years ago. The amount of money that we're spending related to technology obviously we need to do it for Aladdin and the scale of Aladdin now is so enormous that everything we have to do is based on technology. But just even the processing of the trades, the streamlining of everything we do. Doing all these mergers we've done over the years, having one technology platform, the scale of the technology at the firm is probably not appreciated by so many people on the outside.

So I did my town hall today, the day after earnings with all our employees today and I talked about the need to evolve and change continuously and I cited even in yesterday in our earnings announcement that in 2009 when we acquired BGI and iShares the market threw up on the transaction. They hated it. I remember and I said the marriage between passive and active is going to be real. Focusing on a whole portfolio is going to be the key condition to really help navigate our clients business. And the naysayers were obviously clearly wrong. When we bought iShares, which was part of BGI, it had $340 billion in assets and we're pretty close to $5 trillion now. So I guess that worked. And in 2023, we were growing our private markets quite a bit. We went from 0 to 50 billion in infrastructure. Our private debt side, private credit side was growing rapidly. But what we saw from our clients was as fast as we're growing, we're falling further behind. It was very clear that we had to do something inorganic. And that was the conclusion. And what we are seeing, just like we saw this whole convergence of passive and

Active, we're seeing a convergence now because it's based on technology, which you'll get in a second, the convergence of private and public. And it's just, with better technology, investors are going to be able to pivot around the spectrum of public and privates. And that's going to be across a spectrum of just institutional, but it will, there's a lot of rumors there's going to be an executive order by the president to allow it in our 401ks. You're going to see that whole spectrum of public and privates across wealth, too. And so, it was very clear that as much as we thought we were growing, I felt that the opportunity in the markets was far greater and bigger and we needed to bulk up scale. We made a strategic study of who's out there. We only approached one firm in infrastructure and one firm in private credit. We did not, and if we could not do it, I don't know what we would have done. But we went to two firms where the first two months of our conversations had nothing to do with valuation. It was all about culture and can we connect and fit and what is the ambitions of both sides. To me that is the most important characteristic because we're really just buying a bunch of people. We're not buying a machine that does all this stuff. We're buying really highly qualified human beings who are going to be good at this. And in both cases, we mentioned our old friend Bio who worked with us at First Boston. And Bio went on to run investment banking at Credit Suisse. Scott Captic ran investment banking at Goldman Sachs and became a pivotal leader at JP Morgan. So, culturally, these organizations came from large firms just like we did, the founders at BlackRock, but also they had the same type of vision. Both firms were in the process of thinking about going public and HBS was further along, but neither firm really wanted to go public, but they wanted to have some transformational moment. In both cases, ultimately they did not talk, Bio never talked to another firm.

And a lot of people were knocking on Scott's door, but let's get back to the little thing called Pquin. So we believe that if we are going to make the seamless transition to blending both public and private market securities and assets into a portfolio, it's once again all based on analytics and data. It was very clear that we made this view, but we needed to really bulk up the analytics we have in making sure that the blending of public and privates are there in a risk analytical way. And so the frequent transaction, which was about a third of the cost of these other transactions in terms of how much we spent,

Probably is going to turn out to be the most pivotal of the transactions. We already bought something called efront, which was the analytical engine that most people use for private markets, but now controlling the data, which was frequent foundational success. And now with the success that Aladdin has with all public markets, having that capability of blending all that together in a comprehensive way and a whole portfolio way will allow us to have broader, deeper conversation with more clients.

So, let me just say one fact. Everybody in this room should know it because it's just compounding. But if you could add 50 basis points to a retirement portfolio over 30 years, 50 basis points.

I mean, private markets are, over a long horizon, you're going to earn more than that, or the liquidity risk is not worth it,

So, if you got to earn 50 basis points over a 30-year horizon, that adds 18% to the corpus. Imagine that. An average retirement plan, if they could do this over 30 years, has 18% larger pool of assets. More Americans can live their life in retirement with dignity and less fear. Retirement is something that no one wants to talk about because it's not a today problem. But we better start as a society and start focusing on how we are going to help young people starting in their careers, that the preparedness starts today. It starts when you're young to build this retirement, and we as a country refuse to have a conversation about it. BlackRock four months ago did a big retirement summit in Washington, and we had a dinner before that, and we quite frankly had 50 members of Congress come to the dinner, and we had the speaker of the house, we had many different people, and so we're trying to make this an issue. We are the manager of the federal thrift fund, which is the retirement plan for the federal government. So this is something important. 50% of the assets of the 12 and a half trillion dollars are in some form of retirement.

What you just, first of all you got to develop a personal relationship. So it has to be a relationship of trust, and I think this started with me even back in 2008. All the central bankers and finance ministers felt like they could have a deep conversation with me. It stayed in my office. It did not leave my office. So there was, technically we should have signed confidentiality agreements. I don't think I ever did. It was really no different than I have CEO conversation, CEO to CEO. The amount of conversations I have with different CEOs about their careers and all that stuff, and so many CEOs who I've been mentoring also. But it's the whole foundational relationship is based on trust and conversations that are not [__], they're conversations that are based on substantive issues. I'm not presenting that I'm always right, but you have to have an opinion. It has to be based on some semblance of history and facts.

Well, because we're not a bank, and I really do believe because of the role of the beauty of the asset management business, it's all outcome oriented. It's not about the trade, it's not the velocity of money. We don't make money on velocity of money, we make money on outcomes. And I think that sets us apart just because the business model is so dramatically different. I mean, they talk to a lot of people, but I do believe because of the business model of who and what we are, our reach, we're heavily involved in most countries' retirement. Whether it's in Mexico, we're the largest third non-Mexican, non-African retirement manager. We're the largest retirement manager non-Japanese in Japan. We're the largest retirement manager in the UK including the domestics. And so having that position, it's all about long-term issues, but it's things that you can't replicate because it's based on years of relationships and trust. And I do go out of my way when there's somebody who's new in their role, a new prime minister, I will spend time generally, what I try to do is spend time before they win and meet the candidate. So whether it was in Mexico, spending time with Claudia before she won,

Or spending time with Kristarma, it's just spending time with them and just saying, you have access to whatever information you need.

Yeah. So I was really blessed. We went public in 1999. And we were able to attract board members who were, in most cases you can't imagine. I mean, we went public at a $700 million market cap. And we were able to attract some very senior people who were like Dave Kamansky as the CEO of Merrill Lynch. Dennis Dammerman at GE who was

If we didn't have cancer, he would have probably been Jack's replacement instead of

Jeff Immelt. And so we had, I relied on my board extensively and I still do. But I've had an amazing set of board members who I relied on. I mean, when we bought Merrill Lynch Investment Management and we went from a fixed income US-based manager with a couple offices overseas to a firm that was global. It was in 40 different countries. I remember having conversations, I singularly went out with each board member and I do remember having conversations with Dennis how GE managed the matrix. So does a country manager leader have the 51% vote or the product manager? I mean, all the things we all will have to face. But so I relied on the board considerably in my early years of running the firm.

Yeah, I mean I need less advice today, but I mean we have Chuck Robbins who runs Cisco, so we get a lot of advice on technology through Chuck and a few other board members. We had Fabrizio, he's still on the board, but Fabrizio Freda who ran Estee Lauder. I mean, he knows more about marketing. I mean, you sell La Mer, which was like what 400 bucks, ladies? 400 bucks for something that probably cost 25 cents. I have no idea. That's good merchandising. But we have a really great blend of former CEOs, current CEOs who have expertise way beyond mine in other areas and it really allows us to have, so I still grow relying on my board a lot.

Oh, city BlackRock. I mean, we've been together a long time. Look, we want to do more. We need to do more. We were proud of our relationship on the trading side, but it has expanded way beyond that. Now, we're very excited about opportunities we have with wealth. But we were also very excited that city has become one of our largest custodial banks, right?

And I think we played a pivotal role in making sure, I remember having conversations with Mike Corbett and with Jane related to okay we need you, what can we do to make sure that you take over a trillion dollars of custodial assets. And so we need partners. And unlike some of the other buyside firms, we want you to make a lot of money off us.

And but in a proper partnerly way. We don't want to just do trading where you're doing loss-leading business. It is a partnership. We have a role, we got to be a fiduciary in making sure we get best execution. You have a role. But I think because we came from the sell side, we all, I ran a trading desk there, we understand how we could have a unique partnership. And very thankful. And the last thing I would say, getting back to the roots of Salomon Brothers, in the year 1990, a two-year-old firm, it was the president of Salomon Brothers who agreed to have BlackRock start and working with Fannie Mae and Freddie Mac to offer a mortgage-backed securities fund overseas. And we were the first manager ever to create a Fannie Mae fund and a Freddie Mac fund. And Salomon was the distribution shop for both of that.

It was a transformational moment that they gave us the trust as a two-year-old firm that we could do this.

Well, part of that heritage still sits inside this firm.

I can see everybody.

Oh, I would just say every investor needs to find something that is not in the ethos of the markets. That's old news. It's very hard to make money on old news. And so it is my view the role of AI is getting different sets of data and then using that different sets of data to come up with different insights. Our systematic equity team has had like 12 years of spectacular performance. Very different than fundamental. They use, as I said, we have this AI lab that we're using developing algorithms on and the synthesizing of big data blocks to make large-scale investments on different themes. And over the last, as I said, 10 years, it's proven to outperform almost any, you know, 95% of all fundamental stock pickers. And that being said, there are, it's just like baseball. It's very hard to be a 300 batting average from a hitter. It's even harder to do that five and 10 years in a row. But there are these rockstar investors who can anticipate and have views but they're far and few. I mean the reality is most fundamental equity investors have failed when you look at their returns after expenses.

It's been a disaster. And this is what's ripping apart the asset management industry. Everyone thinks it's ETFs that are ripping it apart. ETFs would have failed if active investing worked, but the reality is active investing other than a number of superstars. Unfortunately, BlackRock has one. Alistair Hibbert, who runs our about a 12 billion hedge fund. He doesn't want it any bigger. He's outperformed the S&P by 500 basis points for 12 years, but he barely takes any new money, but he's able to do that. But it is rare over a five-year cycle that traditional stock pickers are able to after fees outperform. And so this is the fundamental issue that's facing the investment management world and this is why so many traditional asset managers are so small in market cap. When I look at some of our competitors who were publicly traded in 2004, most of them were much larger than BlackRock and most of them are sitting with market caps from 20 billion to five billion and we're sitting at what 170 billion.

They're not investing in the technology. That's getting back to my role. I mean I think we're gapping even further ahead of most of the traditional managers.

If we cannot grow our economy by 3%, now I'm talking the US base for a second. If we cannot grow our economy by 3%, which is really hard, and this is what I've been telling the president and the administration, if we cannot grow at 3%, the deficits are going to overwhelm this country. Now, both parties are guilty. In the year 2000, after our country had its 223rd anniversary, the US deficit was $8 trillion. 25 years later, our deficit is at $36 trillion. $25 trillion more, 27. And it's only getting worse. But if we grow at 3% for the next 5 to 10 years, the debt to GDP would be manageable and we'll be able to move forward. But the market does not appreciate that. The other thing is that 20% of our US treasuries are owned by foreigners and a lot of the ownership is because of the position the US has been and if we become more isolationist through tariffs, I truly believe the outcome will be less dollar ownership. If you also then juxtapose this whole concept that I said earlier that I think more and more countries are focusing on their own domestic capital markets which is great for BlackRock, we just raised $2 billion in India, we're starting that mortgage-backed securities business in Saudi Arabia, the opportunity to expand in the capital markets in every country means more domestic savings in these various countries are going to stay within country. And so the whole threat of having this 20% ownership of US treasuries by foreigners is going to be threatened. And the last thing I would say that is shocking to me as we move faster towards stablecoin and the digitization of currency, the role of the dollar is not going to be as important globally. All right. And these are the black swans. These are big macro things. And so the key is we got to unlock private capital. I wrote this in an editorial in the FT a few weeks back. We got to unlock private capital. We need to streamline permitting. And then I think we can grow because we're the expertise of the United States. I think we have the potential of growing at 3%. And this is what I've been pushing everybody. And I was in Japan last week. That was my message to the leadership of Japan. If you don't start growing at 2%, your deficits are going to be overwhelming you. And I could go to every country from Italy and on. This is a problem in so many countries. And we'll see how this all plays out. But these are the big black swans that it's going to be harder for us. But I actually believe related to our capital markets, I think there's less systemic risk in our capital markets today than they've been in years and years and years. We're matching more, I know there's some people who think private credit is a potential black swan, but in most cases, we're matching assets and liabilities. That doesn't mean we can't have a big credit event in private markets, which I'm sure we will. There will be losses, but as long as you match assets and liabilities, they're not leveraged, it means losses. We have losses, but it's not systemic.

I did say that in 2017.

And but during COVID when I had more free time to think about it, I actually went on a journey and I talked to a lot of people who were true believers. I met this woman from Afghanistan who uses Bitcoin to pay women workers in Afghanistan and the Taliban forbids women to work and the banking system is controlled by the Taliban, but she was using Bitcoin to reward women. And I was just learning all the different applications and I came to the view that there's a lot of legitimacy with Bitcoin. Certainly the technology around the blockchain around Bitcoin was pretty unrivaled and it still is. And I became a believer in, not like it's going to be a currency, but I believe that there's a role for it like digital gold. And since most of BlackRock's business is based on long-termism, and I always raise a question, why would anybody invest in a 20 or 30 year outcome unless you believe the 20 or 30-year outcome is going to be good? Because if you didn't believe that over a 20-30 year horizon those long-term investments would be better, you would keep all your money in a bank account or in a mattress. And so, all our business is based on hope. And I said, 'You know what? Bitcoin is a currency of fear. You own Bitcoin because you're frightened of your security in your country. You own Bitcoin because you're frightened of the debasement of your currency.' And what's interesting is despite that it's illegal for Chinese to own Bitcoin, 20% of all Bitcoin ownership is Chinese.

Yeah, I guess so. But it's an evolution and I'm proud of admitting that I was wrong and now yeah, to me this is the experience you grow and learn and you make mistakes.

You know, I said this in my town hall. You have to be a student every day. You have to grow every day. The day you pause for a moment, someone's passing you by. And that's what I tell everybody. I mean, if you're going to be in the game, you got to play the game every day. You got to be relentless. And if there's a moment where I'm saying, I'm tired, someone else should become the CEO of BlackRock. And it to me, to run a large-scale company or to have a fast thriving career, there's only a single button and it's called OFF. There's no modulator. You can't dial it up or down. And for those who really believe that you could work from home, dial it down, and still do your job, you're lying to yourself.

You're truly lying to yourself. And this is my message to all of BlackRock's employees, too.

It is. If you're going to be the top of your game, if that's what you choose, a lot of people don't care about that. I always wanted to be the top of my game. I always want to challenge myself. Next year I'll be working in financial services for 50 years and I still have this desire to be the top of my game every day. And it means I can't pause. I can't dial it down. And that's what I expect from everybody at BlackRock, especially the leadership under me.

Yeah. It's just but it's fun. Let me just end it. Learning something every day is a joy and having the conversations that I'm accorded and afforded to have is a joy and an honor. And you got to respect it and earn it every day. And if you don't earn it every day, they're going to find somebody else to talk to.