CNBC’s Bob Pisani talks with Opportunist’s Managing Editor Leslie Stone about his career, how the trading floor has changed through the years and his once-in-a-lifetime interview with Fidel Castro.
Bob Pisani grew up admiring literary journalists like Gay Talese, Hunter S. Thompson and Norman Mailer. “They were public intellectuals and great writers, and I wanted to be like them,” says the native New Yorker. His father, Ralph, was skeptical at first. “Dad looked baffled and said, ‘Robert, how much money does a writer make?’ and when I couldn’t answer, he looked even more baffled because he had grown up poor in the Bronx. All I knew was that I wanted to do what excited me.”
His father ultimately became friends with the head of the Real Estate Department at the Wharton School of Business and was hired to teach a course in real estate development. “When Dad called to tell me he was now a college professor I reminded him he was just an adjunct,” says Pisani, “but he needed me to help him create a curriculum, so I agreed and became an adjunct too.”
Coincidentally, the father and son co-wrote a book, Investing in Land: How to Be a Successful Developer, the same year CNBC debuted. When Pisani told an associate he had a book out on real estate—while eking out a living as a journalist—he was referred to CNBC and ultimately hired as the channel’s first real estate reporter. He covered the real estate market from 1990 to 1995, and then moved on to cover corporate management issues before moving to the New York Stock Exchange in 1997.
Fast-forward to the present, and Pisani is celebrating 25 years with the channel. As “On-Air Stocks” Editor, he covers the stock market live from the floor of the NYSE, writes the Trader Talk blog and creates documentaries. His documentary about the diamond business, “The Diamond Rush,” won third place in the National Headliner Awards in the Business and Consumer Reporting category.
Opportunist: What was it like in the early days at CNBC?
Bob Pisani: We were a startup in terms of the whole business—there was CNN before us, but we were one of the early pioneers. We spent years wondering, gee, are we ever going to get big? and didn’t have any real, measurable ratings until about 1995. During those years we did a lot of things such as the business of cooking or the business of travel or the business of—fill in the blank. I spent a week at the Village Vanguard [jazz club] hanging out with musicians I revered such as B.B. King and talking about how they made a living. As long as we had the business of around it, we could feature people we really admired. What happened later on is we discovered the real way to get ratings was to cover the horse race: the stock market. That’s when ‘need to know’ took over and ‘nice to know’ fell to the wayside.
Opportunist: How has reporting live from the NYSE changed since you started out, Bob?
Bob Pisani: When I first came to CNBC, they kept a library on Fortune 500 companies. There was no Internet. Now it’s not good enough to report data—you have to figure out how you can add value as a reporter. That dramatically put more pressure on people like me to provide interpretive data that a machine cannot provide.
Stock market coverage used to be U.S.-centered. It was hard to invest overseas, and you couldn’t invest directly in oil or gold without a futures contract. Covering oil as a commodity had a slight air of unreality. Today, ETFs allow you to invest in almost anything. The world is a lot more interconnected, which can be bad at times because the complexity level is so high that it can increase risk and uncertainty.
There were 5,000 people on the trading floor in 1990. Now there are only 500. Electronic trading changed that. But it’s still valuable to be on the floor, especially covering IPOs and ringing the bells—and the tourists are still outside.[Laughs] Some people might say, ‘Boohoo, the floor isn’t as big as it used to be,’ but every damned day somebody rings that bell that is kind of fun and interesting to talk to. In 20 years I have met every rock and pop star, CEOs, heads of state and almost anyone you’d ever want to meet, right down there at the NYSE. I spent 20 minutes with Walter Cronkite one time.
Opportunist: What did you two talk about?
Bob Pisani: He shook my hand and asked me to tell him how business was going. I asked him if he had any regrets and he said he had retired too early, that he had given it to Dan Rather when he should’ve stayed longer. I had something he wanted—to talk about the business today—and I wanted to bask in the excitement of meeting him and reminisce. He spent 20 to 25 minutes talking with me in a corner, and I have a beautiful picture with him.
Opportunist: What are some other highpoints of your career?
Bob Pisani: Interviewing Fidel Castro. Very few people have gotten an interview with him. When the Pope was visiting Cuba in 1998 it was a big deal, much as it was when the Pope came here this fall. I was assigned to cover it and dutifully went to the Ministry of Interior and asked to interview Castro. They looked at me like sure, and then at 2 o’clock one morning I got a call from somebody in the ministry saying ‘President Castro has agreed’ and instructing me to be at an airstrip at 5 a.m. They flew us out to the mountains where they were dedicating a new hospital up on the hills. About 200 people were waiting for him when a roll of Jeeps pulled up, and then Fidel Castro pulled up. He looked exactly like Fidel. It was almost like being at a costume party or meeting Elvis. [Laughs] He had this broad smile, and he got out and spoke to the crowd for an hour. We were told he wasn’t in good health but it was one of the greatest speeches I’ve ever heard. At the end he was crescendoing with ‘viva la revolution’ and ‘socialism or death,’
I followed him inside with an Italian and a Spanish journalist. There were three of us there as well as a crowd of about 20 to 30 people, which I was told were Cuban journalists. I asked the first question. Then, while the Italian journalist was asking a question, I went to scratch my head with the microphone still in my hand and all of a sudden the room moved! I was suddenly 25 feet back against a wall surrounded by very menacing guys in sunglasses. They grabbed the microphone out of my hand and had me and my cameraman pinned against the wall. Apparently, as I scratched my head it must’ve looked like I was going to hit Castro and they freaked. All those people behind me—the supposed Cuban journalists—were actually his security detail. It was just the three of us journalists in the room. They quickly dismantled the microphone, thinking there might be a poison in there or that I might’ve attacked him, and then handed it back and said they were sorry. I made my apologies, but they never let me near him again. I have a picture of me that was taken the moment before I scratched my head. I was only able to get in one or two questions before the whole thing happened.
In the earliest days before REITs were famous, we had some guys on to talk about the business. We made stars of a lot of business people. I spend a lot of time now covering the IPO market and explaining how the process works and show people paths by which they can invest in them. I was the point man on the Alibaba IPO and I spent time with Jack Ma. I’m very proud of the educational process.
Opportunist: Do you have a favorite type of assignment?
Bob Pisani: I would have to say my TV specials. The most difficult was a special I did on gold when gold prices were topping out around 2011. I decided I wanted to visit the two-mile deep Mponeng Mine outside Johannesburg. It’s the deepest mine in the world, and they granted my request. As we were going into the elevator to go down into the mine, they handed me a one-page piece of paper saying ‘there is a reasonable probability you will die, we have told you this and you are going to hold us blameless.’ I remember my producer looking at me and saying, ‘Bob, this is pretty serious.’
Opportunist: But you obviously signed the paper?
Bob Pisani: Yes we signed it, but what was most astonishing to me was how easy it is to die down there. I wanted to go to the deepest part—two and a half miles down—and we were so far down they gave us a sign saying ‘at this time you are the deepest any human has gone.’ Then they went over the various ways we could die.
Opportunist: What were they?
Bob Pisani: One, you’re with rock crushing equipment in a small area—there were no 50-foot ceilings down there—and the machinery could crush you. So getting crushed was one way to die. Second, you could fall and impale yourself on giant rocks. Third, everything could collapse on you because there were no reinforcements. Fourth, there is poison gas down there. This guy has this little device that measures the air quality and he is constantly checking it. I asked him what happens if it goes off and he said, ‘We get out real fast.’ As reporters, we get to see stuff that nobody ever sees, and I was an idiot who wanted to go to the deepest part.
Opportunist: What was the inspiration for your award-winning documentary on the diamond business?
Bob Pisani: A reporter is curious about the world and is always yearning to know why does the world look the way it does? I’m good at explaining things, which is at the core of why I’m a journalist. The diamond business is very opaque and sexy. I went to the Jwaneng diamond mine in south-central Botswana, which is owned by DeBeers and the government. It’s an open-pit mine so vast that if you were standing at the loop looking into it, you would need binoculars to see the other end. It’s the richest diamond mine in the world and it produces 11 million carats a year. I stood next to machines four stories tall that pull these diamonds out, and I watched the rock crushing operations. I went to the diamond cutting operations and saw how they actually cut the diamonds and get all these facets.
I also wanted to know how do they get this stuff to market? so I went to the Diamond District in Manhattan and spent several days in the backrooms with the merchants and saw guys come in off the street with briefcases and pull out literally millions of dollars in diamonds. They only buy from trusted sources. When I saw that, I thought this is so cool … this is how it’s done.
Opportunist: What are some of the current stories you are covering?
Bob Pisani: The markets and what the U.S. economy looks like, but I would say the retirement issue is the biggest story. The first of the baby boomers are now reaching retirement and woefully unprepared. People mistakenly believed Social Security was a retirement fund, but it’s in trouble and pensions and
private savings are shrinking. Our generation took too many financial risks, did not save enough and waited too long to start saving. Also, 2008 scared a lot of people out of the stock market. The bulk is owned by the Top 20 percent of U.S. households, and past that ownership drops off. Stock ownership used to be much broader. We now have people expected to live to age 85 who are going to run out of money way before then. We are going to have parents moving in with 30-year-olds.
Opportunist: Is it ever difficult for you to keep your personal beliefs to yourself while reporting?
Bob Pisani: I am very old school in that regard. I have a very modest belief in the value of my own opinions. It’s more important to work your sources than to beat your chest and tell the world how important you are. As the markets reporter, I have to know an awful lot about a lot of subjects. So I spend time with traders and analysts and strategists, and I spend a lot of time putting a stable of people together. There are 500 people in my Rolodex—each one is a little piece of something—and I will prevail upon them to help me understand something and give me feedback. It’s almost collaboration.
I’m not doing editorial; I’m a traditional reporter asking people what they think. It’s not about me; it’s about my sources and what is going on out there. I seem to be a bit of a dying breed because it seems the only way to distinguish yourself now is to have an opinion. All I know is that I have had some success sticking with the methodology I described to you—not that I don’t have opinions, but I believe reporters have a certain function to explain what is going on in the world. In some circumstances we have the right to give our opinions; in others we do not.
Opportunist: We would like your opinion on a couple of issues. First, do you believe the October jobs report will encourage the Federal Reserve to raise rates?
Bob Pisani: That’s a tricky question. The real problem isn’t job growth, which is clearly strong. The Fed has a dual mandate: maximum employment and stable prices. That is what’s messing them up here. Deflation is the big problem in several areas such as commodities, and the question is how much longer can the Fed ignore the deflation? The longer the Fed waits, the harder it’s going to be because the country is addicted to low interest rates. Will they do QE4 or QE5 if they have to? They don’t want to be in that position, and I can tell you they really, really want to raise rates because they don’t want to be accused of being behind the eight ball.
Opportunist: Also, what do you believe will be the most pressing topics for the Fed to address during its upcoming mid-December meetings?
Bob Pisani: One is deflation, which they’ve dismissed as temporary. Global commodities are facing a slowing demand scenario. China, for example, consumes 40 percent of the world’s copper. But China finished with its giant infrastructure during the aughts and into the 2010s and is now slowing down. So the need for copper is slowing down. Alcoa is closing some of its smelting facilities, which cost a tremendous amount to build and operate.
Another topic is lack of growth in general. GDP is currently at 2 percent here in the states. It’s the new normal and it’s sluggish. We had been anticipating 3 percent to 4 percent after 2008, but we are not getting it. Will cutting rates spur the economy on and help get it back to a more normal situation regarding interest rates? A lot of people who are savers suffered badly because nobody gets a return on anything anymore. It’s the downside of the Fed’s easy money program. So I believe deflation and lack of growth will be the big issues.
Opportunist: Do you have any other documentaries in the works?
Bob Pisani: I wish I did. Thanks to CNBC’s very good fortune, we have done very well at night. Shows like Shark Tank and The Profit have done very well for us. We have the programming and it’s getting great ratings. As a CNBC loyalist, it makes me very happy. The downside, though, is that people like me don’t have a chance to do specials very often.
Bob Pisani: I’d like to write some short stories, novels and screenplays. Fiction is a great way to convey essential truths that capture the times. The problem is work is all consuming. You live the stock market and surrender to the job, which is not really a 9-to-5. That doesn’t leave a lot of time for other things because I find myself checking email at 10 p.m. and then again at 5 o’clock in the morning. I’ve had some opportunities to write more books and had to decline. My Trader Talk blog keeps me busy. Writing is content, and content is never going away. I have been a big fan of the Grateful Dead for the last 40 years, and I wrote a piece about them as they were doing the last of their shows. Frank Sinatra’s 100th birthday is coming up in December and I may write about the business of Sinatra and stuff that is tangentially related.
This is the new Golden Age of television. When was there ever more good content on the air than today? There are a dozen shows I want to follow and look at—it’s not like there are 500 channels with nothing on them. I’m proud that I’m a little part of that.
Leslie Stone is an award-winning writer, editor and journalist with more than two decades of experience covering business, finance, real estate and lifestyle issues for newspapers, magazines and online publications. Originally from Virginia, she currently resides between Florida and Michigan. Follow Leslie on Twitter: @lescstone.
Follow Bob Pisani on Twitter: @BobPisani