view transcript

Katherine: Newt Gingrich's here to talk politics, biotech and what it means for your portfolio. Newt this morning we got news that China's growth had slowed. What are your thoughts on the U.S.-China trade war?

Newt Gingrich: Well, I think the President Trump understands that, uh, if you're the biggest customer, you have an enormous advantage. I mean, no rational company picks a fight with his biggest customer because it's the customer who ultimately has the pocket book. And I think that Xi Jinping, didn't quite realize that so much of China's growth had been dependent on American generosity and American willingness to allow the Chinese to break the rules. And now he's discovering, I just saw an article this morning about how many different products are now moving to the Philippines or Vietnam or Thailand and you're seeing the supply chain shift out of China, in a way that the president has said openly. If they don't get a deal, pretty soon they're going to find that they are permanently a smaller part of the world supply chain.

Katherine: Do you think that we're going to get a deal in the next couple of months?

Newt Gingrich: Probably. I think the pressure on Xi Jinping to reach an agreement is pretty enormous. Uh, and I think on the other hand, the president has less and less incentive because he's beginning to realize how much real leverage he has over China. So I think the Americans are getting a little tougher in what they want in the agreement. And it's important to remember whatever the deal is publicly, whatever they sign. What really matters is enforcement. Uh, we've had lots of deals with the Chinese that they just cheerfully ignore. And so I think that, uh, you always have to look the part two, which is what's the enforcement mechanism? How serious are we about it? Uh, and uh, do the Chinese come to realize that they really have to change? It can't just be on the surface. It's gotta be real change.

Katherine: We've got the 2020 election coming up. What does it mean for the economy?

Newt Gingrich: Well, I mean, I look, I have a huge bias. I'm a conservative. I believe in markets. I think that limited government and unlimited opportunity is the best formula and has made us the richest country in the world and the most advanced country in the world. So I think that the, the Trump program of deregulation, lower taxes, uh, being very pro business, if you watch it when he goes around the world, he's constantly trying to sell American products and get countries to buy American goods and services. So I think that has had a huge effect. Uh, I saw that the consumer confidence recently is the second highest it's ever been. Uh, the can stock market of course keeps going up and I think there's a possibility, uh, that the president can sustain this for a long time. I think if you went back to what would be even worse than, than Obama, uh, or Jimmy Carter or Lyndon Johnson, you went to a new left wing Democrat who wanted to raise taxes radically increased regulation and who basically disliked business. I think you'd see the economy dramatically slow and become substantially higher unemployment.

Katherine: As you mentioned, you are conservative. Given what you know about Republican politics, where should investors put their money? Depending on what the president's priorities and what could actually become law.

Newt Gingrich: Well, I think it probably depends on what you're trying to do and how long your, your horizon is. Uh, there's a good standard rule. I think that if you can find a product that has a world market potential, it's just part of why I'm intrigued, uh, with breakthroughs in healthcare. Because you know, when you make a breakthrough in healthcare, if it's really a big difference, whether it's a medical technology or it's a drug, uh, or some other insight, it literally has a potential application to 9 billion people. And you have a worldwide market because people want to live longer. As they get wealthier, uh, they want to live healthier, they'll pay for it. So everywhere in the world you have a growing health market and that's what makes it so fascinating. On the other hand, I think, uh, there's a huge surplus of cars and cars may in fact, uh, be, uh, to some extent, uh, one of those industries that are now mature and are not likely to give you the return. Although the, the best single return I ever got was, I was part of it as a small venture capital group on the west coast who happened to invest in Tesla at the very beginning. That worked out really well, now whether Tesla is going to sustain that kind of multiples, I'm not sure, but for people who got in early, It's already been such a great ride. It's pretty hard to complain.

Katherine: What does the future of social media regulation look like when we have a president who doesn't necessarily follow his own rules?

Newt Gingrich: Oh, well I don't, I think it's very tricky. We have a very deep commitment to the idea that Congress shall make no law abridging freedom of speech. Uh, and I think that what you have to worry about is whether or not you need to apply that to places like Facebook or Twitter or what have you. I mean, my, my concern is not getting the government in there trying to sensor things. My concern is making sure that billionaires don't use the leverage of the companies the own. To censor things on their own. I think that'll be equally bad. Uh, and I think we have to think carefully about how we deal with that. I would be very opposed to the government itself, uh, becoming the ultimate censor and that's everything that's founding fathers opposed. So, uh, I, I do worry that when you have a very left wing, uh, center of activity in Silicon Valley and you have people who believe that they have the right to define what can and can't be said and then who are prepared to block you from access to, to the public, uh, that you have to think carefully about how you're going to deal with that.

Katherine: You've mentioned health care and I want to ask with all the debate around healthcare, where does gene therapy fall?

Newt Gingrich: Well, I look, I belong to the a school that believes the long run solution to health care is wellness and, and that if you can get cures for these major diseases, uh, nothing will do more to, to solve the cost of healthcare. If you've got a cure for Alzheimer's for example, uh, you basically change the entire trajectory of health spending for the next 50 years. So I'm very much into it. I very much liked, uh, one Lamar Alexander and Fred Upton did with their 21st century wellness bill. And gene therapy is a key part of that. This is the whole DNA project from the time Crick and Watson discovered the double helix all the way up through the human genome project to today, has really began to get at that the very center of how we function as an organism. And so we're beginning to get breakthroughs. I did a podcast recently in which we talked about a very particular gene therapy that enables children

Newt Gingrich: who are going to go blind to see. I mean, it literally replaces the genetic defect and enables them to see for the entire rest of their life. We think that there are going to be breakthroughs in sickle cell anemia or we're very close to breakthroughs in hemophilia and you start looking at those kinds of things. Um, and you begin to realize that, uh, gene therapy could be one of the most powerful tools that we've ever had. Uh, and that it has an almost endless potential, uh, to deal with a very, very wide range of problems that uh, historically we sort of lumped together and didn't understand that the more details we understand, the more complex the human body is and the more we have to be in aw of all the different pieces that are moving. For example, what we used to call breast cancers a generalization is actually probably 200 different cancers. Uh, now that's a level of detailed knowledge and let's just start thinking about what do I need for this particular cancer? And it allows you to have a much narrower treatments with much less side effects, uh, and in the long run get people back to health much more rapidly.

Katherine: Now what you just said, gene therapy, it sounds like expands so much further than just sickle cell research, which is what I'm most familiar with. And if I'm an investor and I just listened to your answer there, I'm wondering if I have no experience in the biomedical space, how do I even start looking at gene therapy? How do I start investing in that space?

Newt Gingrich: Well, I would say, first of all, if you're going to get into a field that is as complex as gene therapy, you ought to go to some experts. You ought to look at things. I recently did a workshop that is going to be done I think is going to be done in the very near future. Let's, a, UShealthandwealth.com and our, what we were focusing on as we put this workshop together because we're focusing on how do you think about these things and how do you look at these companies. But I would say if you're, if you're just starting a, that you need to look to the experts who spent years of their lives, uh, dealing with this kind of thing. And I had the great privilege of working with Marc Lichtenfeld, so who just knows a lot and he spent 22 years studying it. Well, I'm never going to know as much about specific companies as he does. I can know a fair amount about gene therapy. And frankly, you can learn a lot about gene therapy either by listening to my podcast on that topic or by just going to a Wikipedia and other sources online and getting a general, general structure of what it is. But I think you have to have a lot more knowledge, uh, to then know which companies you might want to invest in.

Katherine: Now, Newt, you've been a leader before you were leader of the house, speaker of the house. Sorry, I got to ask, what's your best leadership advice?

Newt Gingrich: A cheerful persistence. I think you simply have to have a willingness to learn. My model is listen, learn, help and lead. It takes a lot of time. And I think if you have big goals, you have to, you have to be cheerfully persistent because you're not going to get anything done overnight. And so you've got to get back up every day and go back and do the best you can. Okay.

Katherine: And what about your worst investing mistake?

Speaker 2: Oh, I've had several small companies that I have invested in a, the turned out to go bankrupt. You know, I got zero back. But that's part of it. You've got to make a decision about what you want to do. I always tell people that you need to have a portfolio where part of your money is extremely safe, a, it could even be U.S. Treasuries for example, which are about as safe as you're gonna get a part of your money. You may want to keep in cash. Some of it you should invest in very stable, very solid companies that are likely to be around for a long time. And then you ought to take a little bit of it, maybe not more than 10%, and put it in a variety of things that have a very high level of the term. Uh, we have a good friend, for example, who very early on, uh, invested in this interesting idea called Home Depot. And, uh, she wrote that all the way up and you know, the amount of money she made from that initial investment was astonishing. Uh, but she did it because she liked the idea. She could see that it had a nationwide application and she liked the two guys who founded it. And, but you know, these guys have the, they have the gumption and the drive and the personality to make this thing work.

Katherine: All right. Thank you so much for joining us.

Newt Gingrich: Well, I'm delighted and I hope that the folks who are watching will remember that at ushealthandwealth.com we're going to have a summit on these ideas that they'll find very useful.

Katherine: Thank you.

Newt Gingrich: Thanks.

Curious about where we stand with the U.S.-China trade deal?

Newt Gingrich, a former Speaker of the House, weighed in on the U.S.-China trade deal, President Trump's social media presence, his focus on gene therapy and his advice for investors. 

U.S.-China Trade War

Gingrich weighed in on the U.S.-China trade war and what it means for the possibility of a trade deal. 

Here's what he thinks about the U.S.-China trade war:

"If you're the biggest customer, you have an enormous advantage. I mean, no rational company picks a fight with his biggest customer because it's the customer who ultimately has the pocketbook. And I think that Xi Jinping didn't quite realize that so much of China's growth had been dependent on American generosity and American willingness to allow the Chinese to break the rules. And now he's discovering, I just saw an article this morning about how many different products are now moving to the Philippines or Vietnam or Thailand and you're seeing the supply chain shift out of China, in a way that the president has said openly," he explained. 

Gene Therapy

Gingrich has been focusing heavily on gene therapy. 

"...Gene therapy could be one of the most powerful tools that we've ever had," explained Gingrich. 

But, for investors who are not familiar with gene therapy or the biotech space, it may be anxiety-inducing to dive into a sector that could later prove to be incredibly important. 

Gingrich has some advice for investors who want to explore the space, but don't have an idea of where to start. 

"First of all, if you're going to get into a field that is as complex as gene therapy, you ought to go to some experts," he explained. 

Need Some Advice?

Need some advice?

Gingrich gave investors some advice, and also laid out his top tip for anyone striving to be a better leader. 

Curious about how the former Speaker of the House acts as a leader and how you can be a better leader?

"Cheerful persistence," he answered. "I think you simply have to have a willingness to learn. My model is to listen, learn, help and lead. It takes a lot of time."

China-U.S. Trade War About To Get Uglier