WEBVTT - Rebecca Patterson on Global Macro Investing (Podcast) 0:00:00.080 --> 0:00:06.040 M. This is Mesters in Business with Very Results on 0:00:06.240 --> 0:00:10.319 Bloomberg Radio this weekend. On the podcast, I have an 0:00:10.320 --> 0:00:14.480 extra special guest Strap yourself in for this one, Rebecca Patterson. 0:00:15.120 --> 0:00:19.119 She has a fascinating career and a fascinating job. She's 0:00:19.200 --> 0:00:25.160 the director of investment Research at investment Giant Bridgewater Associates. 0:00:25.440 --> 0:00:29.040 She also sits on the investment committee with Ray Dalio 0:00:29.280 --> 0:00:31.560 as well as the two co c i O s. 0:00:32.159 --> 0:00:36.720 One of the more interesting and influential and powerful women 0:00:37.040 --> 0:00:41.320 in the world of finance, and really just an incredible 0:00:41.520 --> 0:00:46.599 breath and depth of knowledge. We talked about everything from 0:00:46.640 --> 0:00:51.280 inflation to federal reserve policy, to crypto, to fiscal stimulus, 0:00:51.280 --> 0:00:56.480 to China, to different sector rotations that take place at 0:00:56.600 --> 0:01:01.840 various points in different economic segments. Really just an absolute 0:01:01.880 --> 0:01:05.959 tutor force conversation about all of the things that are 0:01:06.040 --> 0:01:11.679 driving the market now and not just hindsight, but actual 0:01:11.880 --> 0:01:14.840 real time observations that turned out to be either right 0:01:14.920 --> 0:01:19.000 or wrong. And she describes how they integrate this into 0:01:19.040 --> 0:01:23.800 their investment process. Sometimes they look at the world and say, well, 0:01:23.840 --> 0:01:28.080 we see these two things as the highest probability outcomes, 0:01:28.080 --> 0:01:31.839 and so will position our portfolios to benefit if either 0:01:31.959 --> 0:01:37.760 of these two disparate and probably mutually exclusive outcomes turn out, 0:01:37.880 --> 0:01:42.119 it really is an intriguing and fascinating way to think 0:01:42.160 --> 0:01:44.720 about the world, to look at history, to look at data, 0:01:45.280 --> 0:01:49.480 and to come up with a defendable approach. I found 0:01:49.520 --> 0:01:52.800 it absolutely fascinating, and I think you will as well. So, 0:01:52.880 --> 0:01:57.240 with no further ado, my conversation with Bridgewater Associates Director 0:01:57.280 --> 0:02:03.960 of Investment Research, Rebecca Patterson. This is Mesters in Business 0:02:04.200 --> 0:02:10.040 with Very Renaults on Bloomberg Radio. My extra special guest 0:02:10.080 --> 0:02:13.520 this week is Rebecca Patterson. She is the director of 0:02:13.600 --> 0:02:18.400 investment Research at Hedge fund Giant Bridgewater Associates. Previously, she 0:02:18.560 --> 0:02:21.400 was the chief investment officer at Bessemer Trust. What she 0:02:21.440 --> 0:02:25.240 oversaw more than eighty five billion dollars in client assets. 0:02:25.280 --> 0:02:28.400 She is also on the Council of Farm Relations and 0:02:28.440 --> 0:02:32.120 a member of the Economic Club of New York. Rebecca Patterson, 0:02:32.280 --> 0:02:35.919 Welcome to Bloomberg. Thank you, Barry. It's great to be here. 0:02:36.400 --> 0:02:40.200 So you have a really interesting background that is not 0:02:40.480 --> 0:02:45.120 the typical Wall Street research director or c I oh, 0:02:45.280 --> 0:02:47.639 you you started as a local reporter in d C. 0:02:48.600 --> 0:02:50.600 You worked for Dow Jones in the Wall Street journal, 0:02:50.600 --> 0:02:53.720 Tell tell us a little bit about your journalism career 0:02:53.760 --> 0:02:58.079 and how that led you to finance. Sure, so I'm 0:02:58.120 --> 0:03:01.280 definitely an accidental banker. Didn't set out to have a 0:03:01.320 --> 0:03:05.600 career in finance. I loved researching, I loved writing, I 0:03:05.639 --> 0:03:08.800 loved connecting the dots. And so my first job at 0:03:08.840 --> 0:03:12.920 my hometown paper, the St. Petersburg Times in Washington was 0:03:12.960 --> 0:03:15.000 great because I got to do all those things, you know, 0:03:15.040 --> 0:03:17.639 I got to see how policy goes from idea to 0:03:17.720 --> 0:03:22.400 reality and maybe more importantly why uh. And then at 0:03:22.480 --> 0:03:25.240 Dow Jones, one of my first assignments was writing the 0:03:25.320 --> 0:03:28.400 daily foreign exchange column for The Wall Street Journal. And 0:03:28.440 --> 0:03:31.919 I had studied currencies and during grad school at Johns Hopkins. 0:03:31.919 --> 0:03:35.720 But obviously reality is very different from academia, and I 0:03:36.080 --> 0:03:40.320 learned very quickly that to understand currencies you kind of 0:03:40.360 --> 0:03:44.080 have to understand everything else, you know, trade and capital flows, 0:03:44.200 --> 0:03:48.640 relative trends, and economies and markets psychology. Um so that 0:03:48.760 --> 0:03:51.560 was great. That was a great education. I moved from 0:03:51.640 --> 0:03:54.000 New York to London. With Dow Jones. It was still 0:03:54.040 --> 0:03:57.480 covering effects but also politics and policy. In the mid nineties, 0:03:57.520 --> 0:03:59.680 when JP Morgan reached out and said, hey, we read 0:03:59.720 --> 0:04:02.320 your up in the paper. We think you get it 0:04:02.440 --> 0:04:05.120 whatever it is, and we want to hire you. And 0:04:05.240 --> 0:04:07.400 I told them, hey, I don't know anything about banking, 0:04:07.480 --> 0:04:09.520 but they said I knew more than I realized, and 0:04:09.560 --> 0:04:12.240 I could learn the rest. So I thought, well, why not, right, 0:04:12.280 --> 0:04:15.200 why not try? And my first few years there were 0:04:15.280 --> 0:04:18.920 challenging beyond belief, not just because I had a vertical 0:04:19.000 --> 0:04:21.960 curve to get up, but the time I joined JP 0:04:22.080 --> 0:04:25.240 Morgan in September, and Barry, you and I are both 0:04:25.240 --> 0:04:30.440 old enough that you probably immediately know what I'm talking to. Bingo. 0:04:30.720 --> 0:04:34.240 So my my first two years doing currency research for 0:04:34.279 --> 0:04:41.280 the Investment Bank, I had the Asian currency crisis, yeah, 0:04:41.400 --> 0:04:44.440 Russian rouble, and then as soon as we were getting 0:04:44.440 --> 0:04:46.279 out of those, then we had the run up to 0:04:46.320 --> 0:04:49.479 the Euro. You know, it launched in Jane and I 0:04:49.600 --> 0:04:51.680 was one of those folks who were putting together these 0:04:51.720 --> 0:04:55.960 calculators to understand what would be the conversion rate between 0:04:55.960 --> 0:04:58.960 the Deutsch Mark and the Italian lira and the pasada 0:04:59.120 --> 0:05:02.040 and it was so it was. It was quite an 0:05:02.120 --> 0:05:04.520 education those first couple of years. But that's that's how 0:05:04.560 --> 0:05:06.479 I got in the banking. I would they read my 0:05:06.600 --> 0:05:10.640 stuff and thought I had it whatever it is. So 0:05:10.839 --> 0:05:13.640 that's kind of interesting. You spent a long time at 0:05:13.680 --> 0:05:17.760 JP Moore and you're there for about fifteen years global currency, 0:05:17.960 --> 0:05:23.000 commodity desk trading, and then asset management chief strategists. How 0:05:23.040 --> 0:05:27.880 do you work your way from currency to commodity to equity. Yeah, 0:05:27.960 --> 0:05:31.800 so JP Morgan definitely helped me see the world and 0:05:31.839 --> 0:05:33.919 get a better understanding of it. I feel like, you know, 0:05:34.000 --> 0:05:36.000 you joined the military into the world. I joined the 0:05:36.080 --> 0:05:39.400 bank and saw the world from from London. I moved 0:05:39.440 --> 0:05:43.920 to Singapore in early I was still doing currency, but 0:05:44.000 --> 0:05:47.200 now also fixed income research, and that was that was 0:05:47.240 --> 0:05:51.200 a great experience to understand that even if all economies 0:05:51.200 --> 0:05:54.080 and markets have the same drivers, how you think about 0:05:54.120 --> 0:05:56.360 them is going to change a lot depending on how 0:05:56.360 --> 0:05:58.880 the economy is made up. You know, I was just 0:05:58.920 --> 0:06:01.160 getting the hang of Europe and suddenly I'm dealing with 0:06:01.240 --> 0:06:06.640 remittance flows in the Philippines and reserve adequacy in South Korea. 0:06:07.480 --> 0:06:09.400 Uh and it and so it was humbling, but it 0:06:09.440 --> 0:06:12.279 was a great education. And I think I also learned 0:06:12.279 --> 0:06:16.000 from that that you can use data from completely other 0:06:16.040 --> 0:06:18.719 parts of the world to develop your view. So you know, 0:06:18.880 --> 0:06:22.159 even today I look at new export orders from Taiwan 0:06:22.200 --> 0:06:25.080 and Korea that gives me a leading indicator for US 0:06:25.160 --> 0:06:29.359 industrial production. So you know, having that holistic take on 0:06:29.440 --> 0:06:32.240 what's going on in the world can be really important. 0:06:32.240 --> 0:06:35.159 To have the right views in a in one specific country. 0:06:35.480 --> 0:06:40.359 Son inter market data can be effective if you're looking 0:06:40.360 --> 0:06:43.120 in the right place and you're able to figure out 0:06:43.160 --> 0:06:46.080 what the impact is going to be on an adjacent 0:06:46.400 --> 0:06:51.520 or even unrelated market completely. So you know, for many years, 0:06:52.160 --> 0:06:53.920 if you wanted to know what was going on with 0:06:53.960 --> 0:06:57.360 German industrial production, you would look at Belgium because they 0:06:57.360 --> 0:07:00.440 did a lot of the assembly of good that were 0:07:00.480 --> 0:07:03.400 eventually sold out of Germany. Today, I think that's changed 0:07:03.440 --> 0:07:05.200 a little bit and you look at some of the 0:07:05.240 --> 0:07:10.320 Eastern European countries. But understanding those global supply chains, understanding 0:07:10.360 --> 0:07:13.880 those linkages. Even back in the nineties when I was 0:07:13.920 --> 0:07:17.240 getting going in this business, um, we're really important to do, 0:07:18.240 --> 0:07:20.920 really really interesting, and then you end up getting scooped 0:07:20.960 --> 0:07:24.840 up by Bessemer Trust where eventually become chief investment officer 0:07:25.480 --> 0:07:29.680 running a lot of money. A lot of money. Yeah, 0:07:30.200 --> 0:07:32.240 it is a lot of money. My my mom still 0:07:32.240 --> 0:07:35.360 giggles a little bit when I when I mentioned that, um, 0:07:35.720 --> 0:07:38.840 you know, at JP Morgan, I had gone from research 0:07:38.880 --> 0:07:41.680 to running a trading desk. And I realized quickly I 0:07:41.840 --> 0:07:45.000 liked running risk. I like touching the money. I was 0:07:45.120 --> 0:07:48.480 doing that during O eight oh nine and and I 0:07:48.680 --> 0:07:51.640 also learned about myself that I can handle the pressure 0:07:52.120 --> 0:07:54.960 of of things not going up all the time. And 0:07:55.040 --> 0:07:56.840 so I knew that was a direction I wanted to 0:07:56.880 --> 0:08:00.000 go in and at JP Morgan. While I loved the firm, 0:08:00.000 --> 0:08:03.560 opportunity wasn't there when I was ready. And when Bessemer 0:08:03.760 --> 0:08:06.320 reached out and recruited me, I thought, all right, I 0:08:06.640 --> 0:08:08.680 you know, I still have friends at JP Morgan, but 0:08:08.720 --> 0:08:10.560 this is this is the moment to make the leap. 0:08:10.960 --> 0:08:14.280 And and it was great. I the firm gave me 0:08:14.320 --> 0:08:17.360 a ton of autonomy. I was able to develop new 0:08:17.400 --> 0:08:22.080 solutions for clients, build a fantastic team. The clients themselves 0:08:22.080 --> 0:08:25.320 are really interesting. I mean, you know about wealth today, 0:08:25.600 --> 0:08:28.320 uh in the United States. Some some of the people 0:08:28.360 --> 0:08:31.040 I was dealing with, you really thought about their portfolios 0:08:31.120 --> 0:08:36.079 like you wouldn't endowment or pension and it's perpetual capital. Yeah, 0:08:36.640 --> 0:08:40.040 the complexity is not insignificant. So that that was a 0:08:40.040 --> 0:08:42.800 lot of fun. So you you end up on the 0:08:43.000 --> 0:08:48.080 New York Federal Reserve Investor Advisor Committee. Tell us a 0:08:48.120 --> 0:08:51.280 little bit about that experience and and who were the 0:08:51.280 --> 0:08:55.640 people you met uh in that role. So I've always 0:08:55.679 --> 0:08:58.480 been close with the New York Fed during my career. 0:08:58.760 --> 0:09:03.280 I started out UH doing foreign exchange lessons for junior 0:09:03.360 --> 0:09:06.280 central bankers and training, and then later on I was 0:09:06.320 --> 0:09:09.760 on their foreign Exchange committee, and then I got uh 0:09:10.040 --> 0:09:13.760 pushed into the Investor Advisory Committee, which you know, I 0:09:13.880 --> 0:09:16.760 felt initially like the kid at the Thanksgiving table with 0:09:16.800 --> 0:09:19.439 all the grown ups, because these were all the masters, 0:09:19.480 --> 0:09:22.040 truly the masters of the universe. And and then me 0:09:22.960 --> 0:09:26.439 and um, and I'm not trying to be self deprecating it, 0:09:26.520 --> 0:09:30.480 that's how I felt. But we took turns presenting in 0:09:30.600 --> 0:09:33.559 front of the New York Fed officials and then we 0:09:33.720 --> 0:09:38.880 debate different topics. And I met Ray Dalio there and 0:09:39.120 --> 0:09:42.320 after several meetings where you know, he saw me presenting 0:09:42.360 --> 0:09:44.600 on a variety of topics, he saw me holding my 0:09:44.679 --> 0:09:47.640 own against you know whoever. It was Jim Chano's Paul 0:09:47.679 --> 0:09:51.360 Tutor Jones, Bill Ackman, et cetera. And Ray himself. He 0:09:51.480 --> 0:09:53.840 came up and said, you know, maybe maybe we should 0:09:53.880 --> 0:09:57.800 have you come work with us. And um, and that 0:09:57.920 --> 0:09:59.920 was the beginning of a conversation that led me to 0:10:00.000 --> 0:10:04.959 where I am today. So you joined Bridgewater in before 0:10:05.040 --> 0:10:09.120 the pandemic. But I'm kind of intrigued by what the 0:10:09.200 --> 0:10:12.920 process was like to get hired at a place like Bridgewater. 0:10:13.120 --> 0:10:16.559 I gotta think it's more than just Ray saying, Hey, 0:10:16.600 --> 0:10:18.280 I met this woman over at the New York Fed, 0:10:18.280 --> 0:10:21.080 I like her, give her a job. Tell us what 0:10:21.160 --> 0:10:25.160 the process was like to to actually work your way 0:10:25.200 --> 0:10:30.120 to the offer from Bridgewater. Sure so, um, I joined 0:10:30.120 --> 0:10:34.400 in January, but I was interviewing in nineteen And you know, 0:10:34.720 --> 0:10:38.200 I think the process for a lot of folks is 0:10:38.360 --> 0:10:43.400 even more um detailed, let's say, than than mine was. 0:10:43.640 --> 0:10:46.160 My process was long. I met a lot of people. 0:10:46.960 --> 0:10:50.280 I had to come up with ideas on how I 0:10:50.320 --> 0:10:53.400 would allocate capital to this and that. I think the 0:10:53.400 --> 0:10:56.640 most interesting piece of my interview though, and and and 0:10:56.720 --> 0:10:59.720 kind of a good window into Bridgewater. Ray had asked 0:10:59.760 --> 0:11:02.920 me to come join weekly morning meeting they have where 0:11:02.920 --> 0:11:05.880 they talk about what's going on in the world. I thought, yeah, 0:11:05.920 --> 0:11:07.960 that sounds great. I can learn about the people, see 0:11:07.960 --> 0:11:10.000 what the discussions are like. And I showed up at 0:11:10.000 --> 0:11:13.320 their office in Connecticut, stepped down at the table, several 0:11:13.400 --> 0:11:16.559 dozen people in the room, and it's being videoed, and 0:11:16.679 --> 0:11:20.280 Ray introduces me and says, okay, Rebecca, let's kick off 0:11:20.280 --> 0:11:22.360 the meeting. You tell us for the next ten minutes 0:11:22.400 --> 0:11:24.240 what you think is the most important thing to think 0:11:24.240 --> 0:11:29.720 about in the world today. Okay, go right, go. And um, 0:11:29.760 --> 0:11:32.640 I did not know that was coming. Fortunately I live 0:11:32.679 --> 0:11:35.559 and breathe thinking about the markets, so I just launched 0:11:35.600 --> 0:11:39.040 and did my thing. And then afterwards he said, okay, 0:11:39.080 --> 0:11:42.679 everybody dot Rebecca. Now, for those of you who aren't 0:11:42.679 --> 0:11:46.240 familiar with Bridgewater, dotting is a form of real time grading, 0:11:46.360 --> 0:11:48.640 so we give feedback to each other all the time, 0:11:49.320 --> 0:11:52.720 and one dot or grade doesn't make or break your career. 0:11:52.760 --> 0:11:57.480 It's really the you know, this wonderful picture of you 0:11:57.600 --> 0:12:00.720 that develops over time, sort of a George Sarah view 0:12:00.880 --> 0:12:04.360 of you that evolves over time. But I had never 0:12:04.400 --> 0:12:08.080 been dotted before, and suddenly all these people are whipping 0:12:08.080 --> 0:12:10.600 out their computers and iPads and putting the little dots 0:12:10.640 --> 0:12:14.760 next to my name, grading my insights. And and this 0:12:14.840 --> 0:12:18.679 is how Bridgewater is it's radically transparent. I thought, Okay, 0:12:19.000 --> 0:12:20.880 how do I feel about this? Because this will be 0:12:20.920 --> 0:12:23.600 my life, and I'm kind of grateful it happened because 0:12:23.640 --> 0:12:25.720 I realized that evening when I got home and I 0:12:25.720 --> 0:12:28.959 was reflecting on it, I'm okay with it. I might 0:12:29.000 --> 0:12:31.760 not always agree with every grade I get, but I 0:12:31.840 --> 0:12:35.640 certainly prefer to know where I stand and not know UM. 0:12:35.880 --> 0:12:37.719 I don't want people talking behind my back. I want 0:12:37.840 --> 0:12:41.160 talking to my face. So so that really helped me 0:12:41.240 --> 0:12:44.640 actually make the decision that I wanted to join the firm. 0:12:44.400 --> 0:12:48.240 So let's explore this financial point is UM a little more. 0:12:49.160 --> 0:12:51.680 How does this impact because I've never quite heard it 0:12:51.720 --> 0:12:56.120 described the way you just did. So now you're at 0:12:56.160 --> 0:12:59.360 Bridgewater and you go to these regular meetings or anybody 0:12:59.400 --> 0:13:05.400 who's there, how does it affect regular conversations? How does 0:13:05.400 --> 0:13:11.160 it affect presentations? Because I would imagine if every meeting, 0:13:11.520 --> 0:13:17.080 every discussion group, there's a potential of being graded. Does 0:13:17.160 --> 0:13:21.400 that affect how you present, how you behave, how you 0:13:21.559 --> 0:13:25.040 think about and prepare for each meeting? Or is it 0:13:25.160 --> 0:13:28.600 just an ongoing background sort of thing for me. I 0:13:28.600 --> 0:13:30.640 don't want to speak for everyone in the firm. For me, 0:13:30.720 --> 0:13:33.400 it becomes more of a this is in the background, 0:13:33.440 --> 0:13:36.400 and it's a way just to get a regular check 0:13:36.440 --> 0:13:38.800 in on how I'm doing and how people are perceiving 0:13:38.840 --> 0:13:41.720 I'm doing. Where are there areas that I can improve? 0:13:42.480 --> 0:13:45.120 But I would say, especially in the beginning and even now, 0:13:45.559 --> 0:13:47.720 it's in the back of my mind and and maybe 0:13:47.720 --> 0:13:51.120 it makes me that one extra degree more thoughtful about 0:13:51.280 --> 0:13:54.280 how I'm going to present something. Um. But it certainly 0:13:54.320 --> 0:13:57.319 doesn't slow you down. You can't let it right. You're 0:13:57.360 --> 0:13:59.719 therearing enough hours in the day to worry about how 0:13:59.760 --> 0:14:02.959 you get dotted. Um. So it's just it's a tool 0:14:03.040 --> 0:14:05.760 really to help you think about what am I doing 0:14:05.800 --> 0:14:08.840 well at Where areas that I might not see myself 0:14:09.000 --> 0:14:12.440 that I can do better. So let's talk a little 0:14:12.480 --> 0:14:16.840 bit about the research agenda at Bridgewater. How does that 0:14:16.880 --> 0:14:21.120 get shaped and how does the research agenda affect the 0:14:21.200 --> 0:14:24.760 investment strategy they That's a lot of questions, Verry, I'll 0:14:24.760 --> 0:14:27.800 wrapped into one. Um. There's a couple of things about 0:14:27.840 --> 0:14:30.480 Bridgewater and how we do research that I think are 0:14:30.760 --> 0:14:34.520 fairly unique in the industry. One is just the depth 0:14:34.600 --> 0:14:37.400 of research we do. I you know, I've been in 0:14:37.640 --> 0:14:40.440 research and investing most of my adult life, and I've 0:14:40.480 --> 0:14:43.240 never seen anything like it. And I think the reason 0:14:43.320 --> 0:14:45.960 we take so long and go so deep on everything 0:14:46.000 --> 0:14:48.920 to make sure we truly understand it and understand it 0:14:48.960 --> 0:14:51.760 not just at a moment in time, but over cycles 0:14:51.800 --> 0:14:55.520 and different economic environments. So we'll go back often fifty 0:14:56.080 --> 0:14:59.440 years in our analysis, will look across countries to see 0:14:59.440 --> 0:15:02.280 if something universally true. It doesn't just work here, but 0:15:02.360 --> 0:15:05.880 it works in different places. And once we get that 0:15:06.000 --> 0:15:10.040 level of confidence that we understand a cause effect linkage 0:15:10.040 --> 0:15:13.560 and economies or markets, then we're going to create rules 0:15:13.600 --> 0:15:16.880 if this happens, then that if if that happens, and 0:15:17.040 --> 0:15:20.000 this will codify those rules, and those are going to 0:15:20.080 --> 0:15:22.840 shape the investments we make. Once we understand the rules 0:15:22.880 --> 0:15:26.320 of how the economic machine works, to borrow Ray Dalio's term, 0:15:26.440 --> 0:15:29.120 then we put it into our systems and we can 0:15:29.240 --> 0:15:32.840 afford to miss something. You know, not that we can't 0:15:32.840 --> 0:15:34.760 pull it out of the systems and improve it, but 0:15:34.800 --> 0:15:36.760 we don't want to be doing that, so we want 0:15:36.800 --> 0:15:38.720 to make sure we get it right up front, and 0:15:38.800 --> 0:15:42.800 that means doing this unbelievably deep amount of research upfront 0:15:42.840 --> 0:15:46.000 to understand how the world works, So I say that's 0:15:46.040 --> 0:15:48.680 pretty different about us. And and the other thing is 0:15:48.720 --> 0:15:53.880 that because Ray has had this approach since he started Bridgewater, 0:15:54.120 --> 0:15:57.400 So he founded the firm fifty years ago, coming up, 0:15:58.080 --> 0:16:00.920 and he's always been doing the us figuring out is 0:16:01.120 --> 0:16:04.040 what he thinks, testing it, writing down the rules, and 0:16:04.120 --> 0:16:08.000 that lets him compound. So when inflation pops as it's 0:16:08.040 --> 0:16:11.000 doing this year, we don't have to say, oh my gosh, okay, 0:16:11.080 --> 0:16:13.240 it's been a while and go back to the seventies 0:16:13.280 --> 0:16:15.800 and review that what did it mean? We already know that, 0:16:16.000 --> 0:16:19.680 we've already studied that, we've tested it. So it frees 0:16:19.760 --> 0:16:23.360 us up to spend our time in research looking at 0:16:24.000 --> 0:16:27.800 what's different, Um, what's what's a new thing that maybe 0:16:27.880 --> 0:16:30.840 we haven't captured in the past, Or what are we 0:16:30.840 --> 0:16:33.920 getting wrong? I mean, unfortunately we don't get everything right, 0:16:33.960 --> 0:16:35.560 and so if we get something wrong, we want to 0:16:35.640 --> 0:16:39.000 understand why, what did we miss? Did we appreciate some 0:16:39.160 --> 0:16:43.480 variable incorrectly or underappreciated, etcetera. So we we really focus 0:16:43.520 --> 0:16:46.240 our research on those two things, what did we get 0:16:46.280 --> 0:16:49.320 wrong and why? And let's fix it? And then what 0:16:49.400 --> 0:16:52.160 are things evolving in the world today that are new 0:16:52.480 --> 0:16:54.600 and maybe Barry I can give you one super quick 0:16:54.600 --> 0:16:58.040 example of that. You know, when we think about equities, 0:16:58.880 --> 0:17:01.280 we're always looking at all the buyers and sellers of 0:17:01.400 --> 0:17:04.959 every athlet class, including equities, and we've seen in the 0:17:05.000 --> 0:17:09.480 pandemic a huge increase in the amount of retail investing 0:17:09.520 --> 0:17:13.560 we're seeing versus before the pandemic. Obviously, retail investors are 0:17:13.640 --> 0:17:17.119 something we've always tracked. What's a little different today is 0:17:17.160 --> 0:17:20.639 the amount of activity and options with retail investors, and 0:17:20.680 --> 0:17:24.199 I think that's the result of changes in technology, changes 0:17:24.240 --> 0:17:26.840 in cost, the ability of people to be able to 0:17:26.960 --> 0:17:30.280 use options at a retail level. And so that's something 0:17:30.400 --> 0:17:33.679 that we want to make sure we're capturing appropriately in 0:17:33.720 --> 0:17:36.919 our thinking, and that will feed through into investments we 0:17:36.960 --> 0:17:39.960 make if it becomes a material force driving the equity market. 0:17:40.280 --> 0:17:42.240 So so let's stay with that because that's a really 0:17:42.280 --> 0:17:48.480 interesting issue. I look at the surge of retail investors 0:17:48.520 --> 0:17:51.080 as a bunch of board people stuck at home in 0:17:51.119 --> 0:17:55.439 the first year of the pandemic, combined with all of 0:17:55.480 --> 0:18:00.520 their favorite bedding alternatives like professional sports a dream. When 0:18:00.520 --> 0:18:03.760 all that stuff was canceled, the one thing that wasn't 0:18:03.880 --> 0:18:07.200 canceled was the stock market, and thanks to robin Hood, 0:18:08.000 --> 0:18:11.560 they could trade for free and they could buy fractional shares, 0:18:11.840 --> 0:18:14.239 so it didn't take a lot of money. Am I 0:18:14.400 --> 0:18:19.120 grossly oversimplifying what you described? Or is that a key 0:18:19.119 --> 0:18:24.160 factor in you know why suddenly the retail investor UH 0:18:24.280 --> 0:18:29.159 seemed to surge in. I would agree with everything you 0:18:29.280 --> 0:18:32.679 just said, and I would add one very important factor 0:18:32.760 --> 0:18:35.080 that I'm sure you know of and you just didn't mention, 0:18:35.160 --> 0:18:37.840 but I think we need to, which is that they 0:18:37.880 --> 0:18:41.640 not only had the technological ability to do this, they 0:18:41.680 --> 0:18:45.520 also had the financial ability. You know, it's I think 0:18:45.560 --> 0:18:49.080 we'll probably talk about it later, but it is really 0:18:49.119 --> 0:18:53.760 incredible the level of wealth at different socioeconomic cohorts that's 0:18:53.760 --> 0:18:57.920 been created during the pandemic thanks to this massive, massive 0:18:58.680 --> 0:19:02.320 surgeon liquidity from the said and fiscal transfers from the government. 0:19:02.840 --> 0:19:05.800 So these folks, like you said, we're board locked at home, 0:19:06.480 --> 0:19:08.640 but they also had this money. What are you gonna 0:19:08.680 --> 0:19:10.800 do with it? And if I can't go see my 0:19:10.840 --> 0:19:13.200 friends at a restaurant, I can't go to a sports game, 0:19:14.240 --> 0:19:16.439 you know, here's here's something else I can do. And 0:19:16.480 --> 0:19:18.160 by the way, a lot of them, I think made 0:19:18.200 --> 0:19:19.880 some decent money over the last year and a half 0:19:19.960 --> 0:19:24.480 or so, especially the earlier you were into playing with that, 0:19:24.880 --> 0:19:29.480 the better you did post post lockdown. Um. But but 0:19:29.640 --> 0:19:32.920 that's like a kind of one off thing. What are 0:19:32.920 --> 0:19:36.560 the biggest drivers into your research? Is it fundamental economic data? 0:19:36.880 --> 0:19:40.479 Are you really looking at corporate balance sheets, revenue and earnings, 0:19:40.560 --> 0:19:43.640 or is it broader market data? Or is it all 0:19:43.680 --> 0:19:46.960 those and more? All those and more? Again, That's when 0:19:47.000 --> 0:19:49.560 I say the research we do is deeper than anything 0:19:49.600 --> 0:19:53.760 I've ever seen. Um. You know, every time when I 0:19:53.800 --> 0:19:56.240 get up in the morning and I read the financial press, 0:19:56.359 --> 0:19:58.399 and I read my aggregators, and I look at my 0:19:58.400 --> 0:20:01.160 Bloomberg screen and I see some snippets some little thing, 0:20:01.200 --> 0:20:04.080 and I think, oh, that's interesting. I send it off 0:20:04.119 --> 0:20:06.200 to a colleague on the equity team or the fixed 0:20:06.280 --> 0:20:10.520 income team. Point five percent of the time they're like, oh, yeah, 0:20:10.680 --> 0:20:14.240 we studied that X years ago. You know, it is 0:20:14.320 --> 0:20:17.440 amazing the breath and depth of what we look at 0:20:17.560 --> 0:20:20.960 to make sure we're capturing all the players, all the flows, 0:20:21.080 --> 0:20:24.440 all the inputs that can affect economies and flow through 0:20:24.440 --> 0:20:28.600 the markets. Um, it's really extraordinary. So you're also on 0:20:29.119 --> 0:20:35.080 Bridgewaters Investment Committee with Bob Prince, Greg Jensen, and Ray Dalio. 0:20:35.200 --> 0:20:38.959 Tell us what it's like working with with that group. 0:20:39.400 --> 0:20:43.679 They sound like they can be an intimidating threesome right there. Well, 0:20:43.920 --> 0:20:47.000 I think having my first job in Washington and having 0:20:47.000 --> 0:20:51.240 to interview members of Congress and leaders, and then later 0:20:51.280 --> 0:20:55.440 in a private bank, you know, working with CEOs and 0:20:55.480 --> 0:20:58.959 people who owned hedge funds and former policymakers. You know, 0:20:59.080 --> 0:21:02.400 you realize people are people, so you shouldn't be intimidated. 0:21:02.440 --> 0:21:05.399 You should be respectful of everything they've achieved. So I 0:21:05.720 --> 0:21:09.200 don't get intimidated, but I am respectful. I mean, these 0:21:09.200 --> 0:21:14.000 people have created an amazingly successful company with with great 0:21:14.480 --> 0:21:18.119 since inception returns and and so you know I listened 0:21:18.160 --> 0:21:21.359 to them carefully, but you have to push back if 0:21:21.400 --> 0:21:24.840 you don't agree, and it's expected. Um, you know, at 0:21:24.840 --> 0:21:26.320 the end of the day, if if they get it 0:21:26.320 --> 0:21:28.399 wrong because I didn't push back and we don't make 0:21:28.440 --> 0:21:30.280 as much money as we could as that's my fault. 0:21:30.320 --> 0:21:33.920 That's on me. But the meeting itself, Um, the investment 0:21:33.920 --> 0:21:38.359 committee that we have, we started that about a year ago, 0:21:38.440 --> 0:21:41.000 maybe a bit before because Ray as as I think 0:21:41.040 --> 0:21:44.000 has been widely reported and the press has been transitioning 0:21:44.040 --> 0:21:47.360 for some time UM less than the day to day 0:21:47.359 --> 0:21:49.720 of the company and more into a mentor c I 0:21:49.800 --> 0:21:52.879 O role. And and with that move, we felt we 0:21:52.920 --> 0:21:55.719 needed to expand the group of key decision makers, and 0:21:55.800 --> 0:21:58.800 so the Investment Committee was formed and it's it's a 0:21:58.840 --> 0:22:01.400 place where we're going to review positions in the portfolio. 0:22:01.640 --> 0:22:04.800 We're going to pose questions to each other and about positions, 0:22:04.920 --> 0:22:08.520 new learnings, things that might be going against us. Do 0:22:08.560 --> 0:22:10.800 we feel like it's a short term blip, a wiggle 0:22:10.880 --> 0:22:13.320 in the market, or something that maybe we're missing and 0:22:13.359 --> 0:22:16.399 we need to go dig into more. UM Again, what 0:22:16.520 --> 0:22:19.080 makes it different from other investment committees I've been on 0:22:19.119 --> 0:22:22.760 at JP Morgan or Bestsemer is just the bar to 0:22:22.840 --> 0:22:26.600 get an idea into the portfolio is incredibly high. It 0:22:26.640 --> 0:22:30.400 can it can take you several months to get through 0:22:30.440 --> 0:22:33.840 the gauntlet to make sure you haven't missed anything before 0:22:33.960 --> 0:22:37.439 an idea gets in the portfolio. So so let me 0:22:38.200 --> 0:22:41.160 take a step back and ask you a broader question. 0:22:42.119 --> 0:22:45.680 You've lived all over the world, You've worked all over 0:22:45.720 --> 0:22:49.560 the world, You've traveled to I don't know fifty UM countries. 0:22:50.000 --> 0:22:53.240 How does an impact how you think about long term 0:22:53.280 --> 0:22:56.040 investing and the various strategies you want to bring to 0:22:56.160 --> 0:23:00.960 back well being? Going all over the world again, and 0:23:01.000 --> 0:23:03.919 we talked about this a little earlier. I try to 0:23:03.960 --> 0:23:07.680 connect the dots, and so if I'm seeing, for example, 0:23:08.080 --> 0:23:12.880 China's economy slowing down and policymakers are starting to react. 0:23:13.000 --> 0:23:17.200 We we saw just recently a small cut in interest rates, 0:23:17.200 --> 0:23:19.560 giving one more monetary stimulus. But if I'm seeing the 0:23:19.640 --> 0:23:23.199