1 00:00:11,680 --> 00:00:14,560 Speaker 1: Hello, and welcome to the Odd Lots Podcast. I'm Joe 2 00:00:14,600 --> 00:00:19,120 Speaker 1: Wasn't and I'm Tracy Halloway. Tracy, do you know how 3 00:00:19,239 --> 00:00:23,079 Speaker 1: I got interested in markets and stuff? Um? I have 4 00:00:23,320 --> 00:00:26,920 Speaker 1: a sort of vague memory that you started trading I 5 00:00:26,960 --> 00:00:30,000 Speaker 1: want to say, tech stocks in the nine nineties. I'm 6 00:00:30,040 --> 00:00:32,360 Speaker 1: sure we've spoken about this before. You're right, I think 7 00:00:32,360 --> 00:00:34,680 Speaker 1: we have, and I think you basically have it right. 8 00:00:34,840 --> 00:00:37,800 Speaker 1: One summer, I think it was summer. I made two 9 00:00:37,800 --> 00:00:40,640 Speaker 1: thousand dollars over the course of a summer from my 10 00:00:40,680 --> 00:00:44,080 Speaker 1: summer job. And then I and then in what was 11 00:00:44,080 --> 00:00:46,479 Speaker 1: your summer job? I don't really remember what I did, 12 00:00:46,520 --> 00:00:49,720 Speaker 1: to be honest, I think I had all that. You 13 00:00:49,760 --> 00:00:53,920 Speaker 1: only remember. You don't remember the normal job, remember the 14 00:00:53,960 --> 00:00:57,920 Speaker 1: normal stuff. But I remember having two thousand dollars from 15 00:00:57,960 --> 00:01:02,280 Speaker 1: a summer job, you know, the late nineties, and everyone 16 00:01:02,400 --> 00:01:05,320 Speaker 1: was super interested in stocks and markets because there was 17 00:01:05,360 --> 00:01:08,440 Speaker 1: a bubble going on. And I invested that money and 18 00:01:08,480 --> 00:01:11,520 Speaker 1: tried to trade, and I grew a tenfold, so I 19 00:01:11,600 --> 00:01:14,679 Speaker 1: grew it to twenty dollars and I've been hooked on 20 00:01:14,720 --> 00:01:18,360 Speaker 1: markets ever since. Okay, so that's a total humble brag. 21 00:01:18,400 --> 00:01:20,560 Speaker 1: But let me just ask you before I start asking 22 00:01:20,600 --> 00:01:23,640 Speaker 1: about your training strategy. How did you even know to 23 00:01:24,440 --> 00:01:27,040 Speaker 1: start trading stocks? I don't remember. It was just what 24 00:01:27,080 --> 00:01:28,800 Speaker 1: people were doing, Like that was the thing. I think 25 00:01:28,800 --> 00:01:31,600 Speaker 1: that like people don't necessarily remember. They look back at 26 00:01:31,640 --> 00:01:34,440 Speaker 1: the bubble of the late nineties and they know that 27 00:01:34,480 --> 00:01:37,040 Speaker 1: the stocks went up, but I don't think they remember 28 00:01:37,080 --> 00:01:40,720 Speaker 1: like how pervasive it was as part of the culture. 29 00:01:41,440 --> 00:01:44,080 Speaker 1: And it was just like what people were doing was 30 00:01:44,120 --> 00:01:46,880 Speaker 1: what people were talking about, very similar to say, like 31 00:01:46,920 --> 00:01:52,360 Speaker 1: people talking about cryptocurrencies in anden. It just became like 32 00:01:52,400 --> 00:01:56,840 Speaker 1: this cultural phenomenon. So here's my other question, how did 33 00:01:56,880 --> 00:02:00,960 Speaker 1: you actually trade? And you know, full disclosure in I 34 00:02:01,000 --> 00:02:02,800 Speaker 1: would have been in middle school, but I would have 35 00:02:02,840 --> 00:02:06,360 Speaker 1: had no idea exactly how to get started. Well, I 36 00:02:06,400 --> 00:02:09,320 Speaker 1: had a good friend he worked for his father's investment company. 37 00:02:09,400 --> 00:02:12,639 Speaker 1: But I remember there were just ads on TV for 38 00:02:12,680 --> 00:02:15,560 Speaker 1: all these online brokerages and there was this one I 39 00:02:15,600 --> 00:02:19,000 Speaker 1: actually used, this website called short Trade. I'm not really 40 00:02:19,000 --> 00:02:21,240 Speaker 1: sure what happened to it, but I think they had 41 00:02:21,320 --> 00:02:23,440 Speaker 1: these ads on TV for seven dollars a trade, and 42 00:02:23,480 --> 00:02:26,040 Speaker 1: I just signed up and filled out some paperwork and 43 00:02:26,080 --> 00:02:28,920 Speaker 1: stuff like that, and next thing, you know, there you 44 00:02:29,040 --> 00:02:30,600 Speaker 1: there you went. You can just buy and sell stock. 45 00:02:31,200 --> 00:02:34,600 Speaker 1: Next thing you know, you have twenty exactly. That's pretty good. 46 00:02:35,320 --> 00:02:38,359 Speaker 1: I got really lucky because I studied abroad my sophomore 47 00:02:38,440 --> 00:02:41,080 Speaker 1: year in college, and so I didn't lose all my 48 00:02:41,120 --> 00:02:43,880 Speaker 1: money because I stopped trading. Otherwise I definitely would have 49 00:02:43,880 --> 00:02:45,480 Speaker 1: gone to zero because I would have just been like 50 00:02:45,520 --> 00:02:48,480 Speaker 1: everyone else. So I did. I did end up slightly 51 00:02:48,480 --> 00:02:51,720 Speaker 1: positive for the bubble. And you weren't tempted to start 52 00:02:51,800 --> 00:02:55,920 Speaker 1: currency trading while you were abroad. I didn't anyway. The 53 00:02:55,960 --> 00:02:58,919 Speaker 1: reason I bring this up is not just to brag, 54 00:02:59,280 --> 00:03:02,160 Speaker 1: but because day we are going to be talking about 55 00:03:02,200 --> 00:03:04,799 Speaker 1: the online brokerage business, which was a huge part of 56 00:03:05,160 --> 00:03:08,359 Speaker 1: what made that period so special. Was this idea, as 57 00:03:08,400 --> 00:03:11,160 Speaker 1: you put it, that you didn't really need to know anything. 58 00:03:11,200 --> 00:03:13,520 Speaker 1: You could just go to a website and start trading. 59 00:03:13,520 --> 00:03:16,200 Speaker 1: It was much simpler and cheaper than it had ever 60 00:03:16,280 --> 00:03:21,280 Speaker 1: been before. And that business obviously is still around and grown. 61 00:03:21,680 --> 00:03:25,480 Speaker 1: But that really is like when it's sort of got going. Yeah, 62 00:03:25,520 --> 00:03:28,040 Speaker 1: and this still crops up nowadays. You know, you see 63 00:03:28,080 --> 00:03:32,440 Speaker 1: people pointing to certain advertisements coming out of various of 64 00:03:32,480 --> 00:03:36,040 Speaker 1: the big internet brokerage his and people say, oh, well, 65 00:03:36,040 --> 00:03:38,640 Speaker 1: this is evidence that the stock market rally has gone 66 00:03:38,640 --> 00:03:40,760 Speaker 1: too far. You know, people are just coming in to 67 00:03:40,920 --> 00:03:44,000 Speaker 1: make some easy money now, So brokerage is still play 68 00:03:44,080 --> 00:03:47,920 Speaker 1: an important part when it comes to measuring sentiment around 69 00:03:47,920 --> 00:03:50,280 Speaker 1: the stock market. Yeah, and what's interesting to me and 70 00:03:50,320 --> 00:03:52,880 Speaker 1: what I want to get into on today's episode is 71 00:03:53,320 --> 00:03:55,240 Speaker 1: back then, in the late nineties, there was this sort 72 00:03:55,240 --> 00:03:59,360 Speaker 1: of like obsession with individual stocks and the internet stocks 73 00:03:59,400 --> 00:04:02,400 Speaker 1: and Yahoo and eBay and Amazon and all these stocks 74 00:04:02,400 --> 00:04:06,160 Speaker 1: that are making people of fortune. These days, there's such 75 00:04:06,160 --> 00:04:10,160 Speaker 1: a mantra around don't try to beat the market, just 76 00:04:10,240 --> 00:04:14,000 Speaker 1: focus on reducing fees. Passive is best. And so the 77 00:04:14,440 --> 00:04:17,400 Speaker 1: message that people at home are being sent in terms 78 00:04:17,480 --> 00:04:20,120 Speaker 1: of how they should think about investing UH is very, 79 00:04:20,240 --> 00:04:23,960 Speaker 1: very different than it was two decades ago. Nonetheless, people 80 00:04:24,000 --> 00:04:28,120 Speaker 1: do still trade, and they trade through these retail brokerages 81 00:04:28,279 --> 00:04:32,200 Speaker 1: and online at home. So I'm very interested in sort 82 00:04:32,240 --> 00:04:36,800 Speaker 1: of learning about how that world has changed since then. Yeah, 83 00:04:36,920 --> 00:04:38,680 Speaker 1: so am I. And as you put it, it is 84 00:04:38,680 --> 00:04:42,240 Speaker 1: a really interesting flip. Like if you go online nowadays 85 00:04:42,279 --> 00:04:45,720 Speaker 1: to personal finance message boards, no one's saying by this 86 00:04:45,760 --> 00:04:48,239 Speaker 1: particular stock because it's going to make you rich, they're saying, 87 00:04:48,440 --> 00:04:50,800 Speaker 1: put all your money in a passive index fund and 88 00:04:51,040 --> 00:04:53,600 Speaker 1: just right that all the way up. Yeah, exactly right. 89 00:04:53,600 --> 00:04:56,880 Speaker 1: All right, Well, with us to discuss the evolution of 90 00:04:56,920 --> 00:05:00,159 Speaker 1: the online trading business is a a veteran of the 91 00:05:00,200 --> 00:05:03,119 Speaker 1: space we have with us today on aud Chris Larkin. 92 00:05:03,200 --> 00:05:06,360 Speaker 1: He's the senior vice president of trading at the Trade, 93 00:05:06,480 --> 00:05:09,640 Speaker 1: one of the long time stalwarts of the industry, and 94 00:05:09,680 --> 00:05:11,800 Speaker 1: he's been in the space for a long time, and 95 00:05:11,880 --> 00:05:14,919 Speaker 1: so we'll learn about all this stuff and get some 96 00:05:15,000 --> 00:05:17,839 Speaker 1: perspective about how things are the same and how things 97 00:05:17,920 --> 00:05:20,440 Speaker 1: have changed. Chris, thank you very much for joining us, 98 00:05:20,720 --> 00:05:22,480 Speaker 1: Thanks for having me, and thanks for making me feel 99 00:05:22,560 --> 00:05:25,039 Speaker 1: very old as you guys tell your stories and I 100 00:05:25,120 --> 00:05:27,760 Speaker 1: kind of go farther back and I'm thinking myself, Okay, 101 00:05:28,560 --> 00:05:30,640 Speaker 1: I try to feel young, but today I feel old 102 00:05:30,640 --> 00:05:33,120 Speaker 1: with the two you talking. When I said is like, oh, 103 00:05:33,240 --> 00:05:35,720 Speaker 1: that's been two decades since then. It hit me really 104 00:05:35,720 --> 00:05:38,240 Speaker 1: hard even when I said that. But why don't you 105 00:05:38,279 --> 00:05:41,120 Speaker 1: tell us how you got your start of the space 106 00:05:41,480 --> 00:05:44,920 Speaker 1: and what you you're sort of your career path in 107 00:05:45,000 --> 00:05:48,200 Speaker 1: the world of online trading. Yeah, my my first job 108 00:05:48,400 --> 00:05:51,960 Speaker 1: at a college was with a firm called Waterhouse Securities. 109 00:05:52,560 --> 00:05:55,840 Speaker 1: It was a small discount brokerage firm which offered you know, 110 00:05:55,920 --> 00:06:00,400 Speaker 1: self directed clients to call in and place trades for 111 00:06:00,600 --> 00:06:03,640 Speaker 1: individual stocks, mutual funds in those products. At the time, 112 00:06:03,680 --> 00:06:06,680 Speaker 1: ETFs weren't really around, so they were sort of new 113 00:06:06,680 --> 00:06:09,760 Speaker 1: and Charles Schwab and Waterhouse was sort of the bigger 114 00:06:09,839 --> 00:06:12,000 Speaker 1: firms that were out there at the time, and we 115 00:06:12,000 --> 00:06:14,200 Speaker 1: were just at the when you thought about the technology 116 00:06:14,240 --> 00:06:16,440 Speaker 1: at that given point in time, was the Internet was 117 00:06:16,600 --> 00:06:18,840 Speaker 1: just starting to come to light, so it was still 118 00:06:18,839 --> 00:06:20,520 Speaker 1: a little bit early. At that point in time. Everything 119 00:06:20,600 --> 00:06:23,400 Speaker 1: was very manual. So just think about how a client 120 00:06:23,480 --> 00:06:25,799 Speaker 1: had no information they had a calls for a quote 121 00:06:25,800 --> 00:06:27,599 Speaker 1: on I b M. There's no other way to get 122 00:06:27,600 --> 00:06:29,279 Speaker 1: one unless you just saw the paper the next day 123 00:06:29,760 --> 00:06:31,799 Speaker 1: they had called the place orders they had to get. 124 00:06:31,880 --> 00:06:36,320 Speaker 1: Everything was done manually and what year was this, So 125 00:06:36,520 --> 00:06:41,320 Speaker 1: you know, the period between nineties six it was very manual. 126 00:06:41,400 --> 00:06:43,960 Speaker 1: Then things really took off when technologies started to come together. 127 00:06:44,440 --> 00:06:48,840 Speaker 1: So how much did the sort of development of online 128 00:06:48,839 --> 00:06:52,360 Speaker 1: trading platforms and brokerage is how much does that owe 129 00:06:52,520 --> 00:06:55,600 Speaker 1: to the big tech bubble that we saw in the 130 00:06:55,680 --> 00:06:58,880 Speaker 1: late ninet nineties and the excitement around stock trading that 131 00:06:59,000 --> 00:07:02,039 Speaker 1: Joe was describing. Yeah, I think I think it's an accessibility. 132 00:07:02,080 --> 00:07:03,440 Speaker 1: I think, you know, in terms of the ability that 133 00:07:03,560 --> 00:07:05,960 Speaker 1: the information was now starting to come to light. So, 134 00:07:06,120 --> 00:07:08,200 Speaker 1: like I said before, if you wanted to get a 135 00:07:08,279 --> 00:07:10,680 Speaker 1: quote on a stock, you had to call someone up 136 00:07:10,680 --> 00:07:13,880 Speaker 1: to get that quote. In the sort of the nineties, 137 00:07:14,320 --> 00:07:16,640 Speaker 1: you started to get the ability, you know, via computer 138 00:07:16,720 --> 00:07:19,840 Speaker 1: that you could get real time quotes, whether you get 139 00:07:19,840 --> 00:07:21,680 Speaker 1: it through the website or they're starting to get some 140 00:07:21,680 --> 00:07:24,280 Speaker 1: more applications where you can get streaming quotes from as well. 141 00:07:24,320 --> 00:07:26,160 Speaker 1: These were things that would be unheard of and only 142 00:07:26,200 --> 00:07:29,080 Speaker 1: available to institutional investors that started coming too retail clients. 143 00:07:29,080 --> 00:07:32,080 Speaker 1: So there was just the ability to get the information 144 00:07:32,320 --> 00:07:35,440 Speaker 1: was much different than it ever was before. I remember, 145 00:07:35,680 --> 00:07:39,560 Speaker 1: like even the idea of real time quotes versus fifteen 146 00:07:39,600 --> 00:07:44,280 Speaker 1: minute delayed quotes was this huge thing back then. And 147 00:07:44,720 --> 00:07:48,440 Speaker 1: you know, having access to an online brokerage versus just 148 00:07:48,520 --> 00:07:51,080 Speaker 1: sort of like a normal like public facing website like 149 00:07:51,200 --> 00:07:54,040 Speaker 1: Yahoo Finance was pretty big at the time. It was 150 00:07:54,080 --> 00:07:56,840 Speaker 1: a really exciting thing about being at some sort of 151 00:07:56,960 --> 00:07:59,600 Speaker 1: paid service. Just the ability to not have something to 152 00:07:59,680 --> 00:08:01,920 Speaker 1: be to by twenty minutes. Yeah, I mean, I think 153 00:08:01,960 --> 00:08:03,400 Speaker 1: that's that was the big thing. I think the thing 154 00:08:03,440 --> 00:08:05,040 Speaker 1: that was missing at that point in time. So even 155 00:08:05,080 --> 00:08:06,920 Speaker 1: when you were entering and place in your first trade, 156 00:08:07,440 --> 00:08:11,360 Speaker 1: that really all you had was real time quotes. Uh. 157 00:08:11,480 --> 00:08:14,920 Speaker 1: You didn't have research or news or access to a 158 00:08:14,960 --> 00:08:17,280 Speaker 1: lot of things that eventually came over time as more 159 00:08:17,280 --> 00:08:19,360 Speaker 1: and more people signed up and people started to enrich 160 00:08:19,400 --> 00:08:21,960 Speaker 1: their offerings. Uh, they started to add more of the 161 00:08:22,000 --> 00:08:24,120 Speaker 1: tools and services, which is you know again played a 162 00:08:24,200 --> 00:08:26,800 Speaker 1: very big part in the evolution of the particular you know, 163 00:08:26,920 --> 00:08:32,000 Speaker 1: online investing industry. Was there any resistance to the availability 164 00:08:32,040 --> 00:08:35,160 Speaker 1: of internet trading or people sort of distrustful of the 165 00:08:35,240 --> 00:08:37,920 Speaker 1: notion that they could buy and sell stocks online. Did 166 00:08:37,920 --> 00:08:40,080 Speaker 1: they think, oh I should be doing this through you know, 167 00:08:40,120 --> 00:08:43,960 Speaker 1: an actual person in the old fashioned traditional way. Yeah, 168 00:08:43,960 --> 00:08:45,720 Speaker 1: I think there's I think it really in two ways. 169 00:08:45,840 --> 00:08:48,000 Speaker 1: One is that I think, you know, technology is starting 170 00:08:48,040 --> 00:08:50,000 Speaker 1: to come together at that point in time, and people 171 00:08:50,040 --> 00:08:52,440 Speaker 1: weren't quite sure was it secure like I made my 172 00:08:52,480 --> 00:08:54,920 Speaker 1: money somewhere, Like was it secure if I go online 173 00:08:54,960 --> 00:08:57,080 Speaker 1: in place a trade? So there were some people that 174 00:08:57,120 --> 00:08:58,600 Speaker 1: were concerned, but again there was a lot of things 175 00:08:58,640 --> 00:09:00,120 Speaker 1: that we put in place to make sure that the 176 00:09:00,160 --> 00:09:03,200 Speaker 1: security was very solid at that point in time. The 177 00:09:03,240 --> 00:09:04,719 Speaker 1: other thing was that he also had the you know, 178 00:09:04,760 --> 00:09:07,280 Speaker 1: the full service industry at that point in time. I 179 00:09:07,280 --> 00:09:09,559 Speaker 1: think they spent a lot of They spend a lot 180 00:09:09,559 --> 00:09:11,880 Speaker 1: of effort in terms of saying that you can't do 181 00:09:11,920 --> 00:09:13,600 Speaker 1: it on your own. You need us, this is a 182 00:09:13,760 --> 00:09:16,520 Speaker 1: this is Wall Street. You need a professional to help 183 00:09:16,520 --> 00:09:18,000 Speaker 1: you with your money. Going out there and doing your 184 00:09:18,000 --> 00:09:20,120 Speaker 1: own you can never be successful. So I think, you know, 185 00:09:20,320 --> 00:09:21,880 Speaker 1: they saw the threat. There's a lot of you know, 186 00:09:21,920 --> 00:09:25,320 Speaker 1: the instues growing, there's a threat to their business. So 187 00:09:25,640 --> 00:09:27,240 Speaker 1: you saw a lot of people trying to say that 188 00:09:27,240 --> 00:09:28,880 Speaker 1: there's no way someone could do this on their own. 189 00:09:29,160 --> 00:09:31,000 Speaker 1: Tell us a little bit more about your career. You 190 00:09:31,000 --> 00:09:34,120 Speaker 1: mentioned you're at Waterhouse in the very early in nineties. 191 00:09:34,559 --> 00:09:38,440 Speaker 1: When did you get into what we now recognize as 192 00:09:38,440 --> 00:09:41,360 Speaker 1: the online trading business. Yeah, I think so at that 193 00:09:41,400 --> 00:09:43,480 Speaker 1: point time when I when I left Waterhouse, I went 194 00:09:43,520 --> 00:09:45,439 Speaker 1: to the institutional side of the business, and I was 195 00:09:45,480 --> 00:09:48,960 Speaker 1: working for IG Bearings, which was a full service firm 196 00:09:49,000 --> 00:09:50,680 Speaker 1: for on the institutional side of the business as a 197 00:09:50,679 --> 00:09:54,080 Speaker 1: sales trader. We went through some tough times during the 198 00:09:54,080 --> 00:09:57,280 Speaker 1: Asian crisis, and when I was trading, what I saw 199 00:09:57,440 --> 00:10:00,280 Speaker 1: was there was firms like Bloomberg and instant It were 200 00:10:00,280 --> 00:10:03,320 Speaker 1: stored the forefront of technology from an execution standpoint for 201 00:10:04,040 --> 00:10:07,319 Speaker 1: buying and selling stocks for institutional investors UH. At that 202 00:10:07,360 --> 00:10:08,800 Speaker 1: point in time, I thought, I need to get in 203 00:10:08,840 --> 00:10:10,760 Speaker 1: front of this, so I did join. I joined Bloomberg 204 00:10:10,760 --> 00:10:13,480 Speaker 1: at that point in time to be part of a 205 00:10:13,559 --> 00:10:17,800 Speaker 1: very successful UH firm. But then when things really started 206 00:10:17,800 --> 00:10:20,400 Speaker 1: heating up. You know, someone who was a the number 207 00:10:20,400 --> 00:10:24,000 Speaker 1: two over Waterhouse had become the CEO at Daytech Online, 208 00:10:24,520 --> 00:10:27,040 Speaker 1: which was a very small but very fast growing firm. 209 00:10:27,160 --> 00:10:30,080 Speaker 1: What happened to them? I remember day Tech and that 210 00:10:30,200 --> 00:10:31,840 Speaker 1: was like a big name at the time. Where did 211 00:10:31,880 --> 00:10:34,360 Speaker 1: they go? I don't They ended up getting acquired by 212 00:10:34,360 --> 00:10:37,080 Speaker 1: a merritor trade in two thousand and two three in 213 00:10:37,120 --> 00:10:40,040 Speaker 1: that area. But they were truly a disruptor and industry 214 00:10:40,080 --> 00:10:43,280 Speaker 1: at that point in time. You know, online trading was available, 215 00:10:43,440 --> 00:10:45,600 Speaker 1: but there was beyond just the idea of being able 216 00:10:45,640 --> 00:10:48,360 Speaker 1: to you know, buy and sell stocks online. There wasn't 217 00:10:48,360 --> 00:10:51,280 Speaker 1: a true disruption, but they took was a true innovator 218 00:10:51,400 --> 00:10:53,920 Speaker 1: and disruptor in the in the business and so, uh, 219 00:10:54,120 --> 00:10:56,560 Speaker 1: they were growing at a massive rate at that point 220 00:10:56,559 --> 00:10:59,319 Speaker 1: in time, like others as well. So how did execution 221 00:10:59,640 --> 00:11:03,480 Speaker 1: on those platforms work At the time, We're orders being 222 00:11:03,520 --> 00:11:07,560 Speaker 1: sent basically through you know, the traditional market makers. Well, 223 00:11:07,600 --> 00:11:09,440 Speaker 1: if you go, I'll just go back in time just 224 00:11:09,480 --> 00:11:11,080 Speaker 1: for just a quick thing to give you just you know, 225 00:11:11,120 --> 00:11:12,840 Speaker 1: an idea is that when someone called up and they 226 00:11:13,200 --> 00:11:15,120 Speaker 1: were at Waterhouse Securities and you wanted to go by 227 00:11:15,240 --> 00:11:18,040 Speaker 1: you know, hundred shares of IBM, you call up and 228 00:11:18,080 --> 00:11:20,600 Speaker 1: you put in a market order, you would hang up 229 00:11:20,600 --> 00:11:22,160 Speaker 1: the phone and we would call you back. At some 230 00:11:22,200 --> 00:11:23,920 Speaker 1: point in time we got an execution that could be 231 00:11:24,480 --> 00:11:26,640 Speaker 1: an hour or two later, so you would eventually get 232 00:11:26,640 --> 00:11:28,400 Speaker 1: it back. By the time it was execute got down, 233 00:11:28,440 --> 00:11:30,640 Speaker 1: their executed came back, we had to call you back. 234 00:11:30,679 --> 00:11:33,000 Speaker 1: It was pretty rare to get the execution on the phone. 235 00:11:33,960 --> 00:11:36,760 Speaker 1: At date Tech, we were the ability to to route 236 00:11:36,840 --> 00:11:40,040 Speaker 1: orders to other destinations beyond the exchange was starting to 237 00:11:40,080 --> 00:11:42,360 Speaker 1: become available. We owned an e c N called Island 238 00:11:42,400 --> 00:11:45,679 Speaker 1: d c N UH and that that was again an 239 00:11:45,679 --> 00:11:49,000 Speaker 1: innovation and you know a differentiator for us. What did 240 00:11:49,040 --> 00:11:51,880 Speaker 1: e c N stand for? It's electronic communications network, right, 241 00:11:52,559 --> 00:11:54,360 Speaker 1: and you know at that point time we're going to 242 00:11:54,440 --> 00:11:56,920 Speaker 1: utilize that in order to get very fast executions back. 243 00:11:57,080 --> 00:12:01,120 Speaker 1: But when I say fast executions, uh, we had to 244 00:12:01,160 --> 00:12:04,400 Speaker 1: guarantee a trading guarantee. So we guarantee your market or 245 00:12:04,559 --> 00:12:09,040 Speaker 1: would be executed in less than sixty seconds. So nobody 246 00:12:09,120 --> 00:12:11,760 Speaker 1: in the industry could match that. Nobody, so we had 247 00:12:11,800 --> 00:12:15,360 Speaker 1: a pure advantage over other people when it came down 248 00:12:15,360 --> 00:12:18,720 Speaker 1: to executions in the speed of our executions. We would 249 00:12:18,760 --> 00:12:21,839 Speaker 1: execute in the sixty seconds or your traders are free. Uh. 250 00:12:21,880 --> 00:12:25,920 Speaker 1: Today you get micro seconds before your order is executed, 251 00:12:25,960 --> 00:12:27,439 Speaker 1: so it's less than a second if you put in 252 00:12:27,520 --> 00:12:28,960 Speaker 1: a market order, it's less than a second if you 253 00:12:28,960 --> 00:12:31,360 Speaker 1: get executed. You can't even refresh your screen fast enough 254 00:12:31,400 --> 00:12:33,800 Speaker 1: by the time that order is executed. So you could 255 00:12:33,840 --> 00:12:39,320 Speaker 1: just see how technology has become, you know, a game changer, 256 00:12:39,400 --> 00:12:42,480 Speaker 1: I guess when it comes down to executing orders. So 257 00:12:42,760 --> 00:12:45,200 Speaker 1: just to be clear, what was it that day Tech 258 00:12:45,360 --> 00:12:50,160 Speaker 1: had structurally that allowed it to may be able to 259 00:12:50,200 --> 00:12:52,160 Speaker 1: make such a promise The c N, I think the 260 00:12:52,360 --> 00:12:54,840 Speaker 1: differentiate was easier and so we could route orders directly 261 00:12:54,880 --> 00:12:56,719 Speaker 1: to the c c N and match a buyer and 262 00:12:56,800 --> 00:12:59,600 Speaker 1: seller and get a report back immediately. And so when 263 00:12:59,600 --> 00:13:01,120 Speaker 1: you were going to the exchanges, we were you know, 264 00:13:01,200 --> 00:13:02,959 Speaker 1: we were pushing them. But if you take an idea 265 00:13:03,080 --> 00:13:04,680 Speaker 1: like say the et F. Let's say at that point 266 00:13:04,679 --> 00:13:07,320 Speaker 1: in time the q q q s were were available. 267 00:13:07,400 --> 00:13:09,439 Speaker 1: If you put a more market for q c s 268 00:13:09,480 --> 00:13:12,440 Speaker 1: and sent it down to the American Stock Exchange, you 269 00:13:12,520 --> 00:13:15,320 Speaker 1: might wait two minutes for an execution back three minutes, 270 00:13:15,360 --> 00:13:18,880 Speaker 1: four minutes. We started moving our orders onto the UH 271 00:13:18,960 --> 00:13:22,040 Speaker 1: the Island d c N and you'd have an instantaneous execution. 272 00:13:22,320 --> 00:13:24,040 Speaker 1: So people are very frustrated. They were not you know, 273 00:13:24,080 --> 00:13:27,840 Speaker 1: technology was starting to really accelerate and it was becoming 274 00:13:27,920 --> 00:13:30,760 Speaker 1: unacceptable to get an execution in you know, three or 275 00:13:30,800 --> 00:13:33,400 Speaker 1: four minutes. People wanted to get a very good execution, 276 00:13:33,400 --> 00:13:36,240 Speaker 1: and they wanted it quickly. Okay, So customers are now 277 00:13:36,280 --> 00:13:41,120 Speaker 1: executing trades at sixty seconds or less on the online platforms. 278 00:13:41,120 --> 00:13:42,920 Speaker 1: Other people are doing it in two or three minutes, 279 00:13:43,120 --> 00:13:46,480 Speaker 1: versus you know, in the early nineties or nine eighties, 280 00:13:46,559 --> 00:13:48,920 Speaker 1: when it might take a couple of hours even to 281 00:13:49,000 --> 00:13:53,720 Speaker 1: get your trade actually executed and confirmed. Did that change 282 00:13:53,960 --> 00:13:57,200 Speaker 1: trading behavior in your opinion? Did people start trading in 283 00:13:57,240 --> 00:14:01,040 Speaker 1: a different way now that they had virtually instant haineous execution. 284 00:14:01,640 --> 00:14:03,840 Speaker 1: I think that's part of it. I think the you know, 285 00:14:04,280 --> 00:14:06,600 Speaker 1: it's a culmination. I think of a few things. Obviously, 286 00:14:06,600 --> 00:14:09,160 Speaker 1: the executions were becoming better, so the access was much 287 00:14:09,200 --> 00:14:12,720 Speaker 1: better and the information was much better. Obviously, when you 288 00:14:12,720 --> 00:14:15,440 Speaker 1: think about as time were revolving, you've got the real 289 00:14:15,440 --> 00:14:18,160 Speaker 1: time quotes at this point in time. You know, Daytaud 290 00:14:18,200 --> 00:14:20,680 Speaker 1: been the first broken to offer free real time streaming quotes. 291 00:14:20,720 --> 00:14:23,800 Speaker 1: That you had a a quote terminal, you know, per 292 00:14:23,840 --> 00:14:25,760 Speaker 1: se where you could put a watch list together and 293 00:14:25,760 --> 00:14:28,160 Speaker 1: watch a whole bunch of stocks. And then I think 294 00:14:28,200 --> 00:14:29,880 Speaker 1: the when you think about sort of what was happening 295 00:14:29,880 --> 00:14:32,240 Speaker 1: at that point in time, you know, the market was 296 00:14:32,360 --> 00:14:36,160 Speaker 1: going up, and there's there is a flock mentality when 297 00:14:36,200 --> 00:14:39,280 Speaker 1: things go up. You talked about bitcoin before. I don't 298 00:14:39,280 --> 00:14:41,720 Speaker 1: think it. You know, people all of a sudden had 299 00:14:41,760 --> 00:14:45,960 Speaker 1: a passion for digital currency. It's that people were making money, 300 00:14:46,440 --> 00:14:48,160 Speaker 1: and there's this like I don't want to be left 301 00:14:48,200 --> 00:14:50,880 Speaker 1: out type of a thing. So people start getting involved 302 00:14:50,920 --> 00:14:52,880 Speaker 1: and saying I want to find a way to make money, 303 00:14:52,880 --> 00:14:54,680 Speaker 1: just like you know, my neighbors making a whole bunch 304 00:14:54,680 --> 00:14:57,000 Speaker 1: of money, so they don't never want to be left out. 305 00:14:57,080 --> 00:14:59,600 Speaker 1: So there was you know, the flock mentality was going 306 00:14:59,600 --> 00:15:01,640 Speaker 1: on that point time, and people were making, you know, 307 00:15:01,800 --> 00:15:04,520 Speaker 1: irrational decisions, was pushing companies that were not making money 308 00:15:04,520 --> 00:15:07,480 Speaker 1: to these lofty levels. But when you have a whole 309 00:15:07,520 --> 00:15:10,640 Speaker 1: bunch of all coming in, it certainly contributed to sort of, um, 310 00:15:10,720 --> 00:15:12,520 Speaker 1: what was happening at that point in time. But we're 311 00:15:12,520 --> 00:15:14,960 Speaker 1: also that we're also starting to add in other things 312 00:15:14,960 --> 00:15:18,320 Speaker 1: like education news. These are things you could you when 313 00:15:18,360 --> 00:15:20,600 Speaker 1: you wanted to buy a stock back in the eighties 314 00:15:20,680 --> 00:15:23,200 Speaker 1: or early nineties, you called up your full service broker 315 00:15:23,520 --> 00:15:25,120 Speaker 1: and you'd be lucky if they soldion. And like an 316 00:15:25,200 --> 00:15:27,080 Speaker 1: end of report that was like eight months old, like 317 00:15:27,320 --> 00:15:29,880 Speaker 1: there was no information. You can literally you can now 318 00:15:30,000 --> 00:15:32,320 Speaker 1: find a whole bunch of you know, data, whether it 319 00:15:32,360 --> 00:15:35,080 Speaker 1: be fundamental analysis or technical analysis, right, you know, from 320 00:15:35,120 --> 00:15:41,560 Speaker 1: your computer terminal. In early two thousands, when the sort 321 00:15:41,600 --> 00:15:44,480 Speaker 1: of the number of new people entering the market daily, 322 00:15:44,960 --> 00:15:47,400 Speaker 1: I mean it got so big that it overwhelmed the systems, right. 323 00:15:47,400 --> 00:15:50,240 Speaker 1: There started to be outages at that part because it's 324 00:15:50,280 --> 00:15:53,520 Speaker 1: just the infrastructure still at the time had a hard time. 325 00:15:53,760 --> 00:15:56,840 Speaker 1: Um keeping up with it. Did you were people worried 326 00:15:56,840 --> 00:16:00,440 Speaker 1: about that? Were people inside the company or in company 327 00:16:00,560 --> 00:16:03,080 Speaker 1: is like worried about like, Okay, when this bubble bursts 328 00:16:03,160 --> 00:16:05,840 Speaker 1: or when this can't be sustainable, and then there's gonna 329 00:16:05,840 --> 00:16:08,320 Speaker 1: be a lot of people who their first introduction to 330 00:16:08,560 --> 00:16:11,000 Speaker 1: the stock market is going to be a pretty tough one. Yeah, 331 00:16:11,080 --> 00:16:12,880 Speaker 1: I think that's a word of everybody today. I mean, 332 00:16:13,000 --> 00:16:15,640 Speaker 1: we've we we've obviously gotten much better in the ability 333 00:16:15,680 --> 00:16:17,600 Speaker 1: to stabilize all the systems and be able to handle 334 00:16:17,640 --> 00:16:20,000 Speaker 1: the scale that's that's been going on. But back then 335 00:16:20,040 --> 00:16:21,760 Speaker 1: it was a big issue that you know, an outage 336 00:16:21,800 --> 00:16:24,160 Speaker 1: was not an abnormal thing to happen once a week, 337 00:16:24,240 --> 00:16:27,040 Speaker 1: especially during the very busy times, And it's all about 338 00:16:27,040 --> 00:16:28,640 Speaker 1: how quick you can recover and to make sure that 339 00:16:28,680 --> 00:16:30,600 Speaker 1: your clients were taken care of. And I think that's 340 00:16:30,600 --> 00:16:32,960 Speaker 1: the main thing when when things there there's an expectation 341 00:16:33,000 --> 00:16:35,000 Speaker 1: at some point in time that systems will go down, 342 00:16:35,800 --> 00:16:38,480 Speaker 1: but what what our clients want or us to stand 343 00:16:38,480 --> 00:16:40,560 Speaker 1: behind that and make sure that we make any adjustments 344 00:16:40,600 --> 00:16:55,120 Speaker 1: necessary if there was a problem. Alright, So Joe and 345 00:16:55,160 --> 00:16:57,480 Speaker 1: I alluded to this in our intro, but one thing 346 00:16:57,600 --> 00:17:03,800 Speaker 1: I'm really curious about is who is trading individual stocks nowadays, 347 00:17:03,880 --> 00:17:06,800 Speaker 1: because again and again, you know, the emphasis all seems 348 00:17:06,880 --> 00:17:10,479 Speaker 1: to be on passive investing on index funds. Is anyone 349 00:17:10,600 --> 00:17:14,680 Speaker 1: still trading actively in individual stocks? Well, I would say, 350 00:17:14,920 --> 00:17:16,640 Speaker 1: you know, one thing is that we've just come off 351 00:17:16,680 --> 00:17:18,919 Speaker 1: for record year last year, So I think that you know, 352 00:17:18,960 --> 00:17:20,800 Speaker 1: the idea that the last two years, two thousand seven 353 00:17:20,800 --> 00:17:22,159 Speaker 1: team was a record for US, I would say for 354 00:17:22,200 --> 00:17:23,600 Speaker 1: the industry, and I don't want to just speak just 355 00:17:23,720 --> 00:17:26,159 Speaker 1: on you know, each trade alone, but it was a 356 00:17:26,200 --> 00:17:28,280 Speaker 1: record for two thousand seventeen, two thousand and eighteen, we're 357 00:17:28,280 --> 00:17:31,760 Speaker 1: both tremendous years for the industry in general. So clients 358 00:17:31,800 --> 00:17:35,440 Speaker 1: are definitely still trading online. Um, I think the word 359 00:17:35,520 --> 00:17:39,200 Speaker 1: actively is you know, you can debate what actively actually 360 00:17:39,280 --> 00:17:43,399 Speaker 1: means when you talk about passive investing passive investing. I 361 00:17:43,400 --> 00:17:46,760 Speaker 1: would say, in general, the average customers a passive investor, 362 00:17:47,600 --> 00:17:51,240 Speaker 1: we you know, are our client, you know base, A 363 00:17:51,400 --> 00:17:53,080 Speaker 1: very small number of them are what you would define 364 00:17:53,119 --> 00:17:55,080 Speaker 1: as an active trader or a day trader that some 365 00:17:55,080 --> 00:17:56,760 Speaker 1: people might want to put in there. Most people are 366 00:17:56,840 --> 00:18:00,000 Speaker 1: actually actually just putting together a portfolio and buying an 367 00:18:00,040 --> 00:18:04,040 Speaker 1: holding and making slight adjustments throughout the year. Nonetheless, there 368 00:18:04,160 --> 00:18:07,560 Speaker 1: is still interest in individual stocks. So do you see 369 00:18:07,640 --> 00:18:10,919 Speaker 1: any are there any sort of demographics or anything that 370 00:18:10,960 --> 00:18:12,960 Speaker 1: you could say about the people that say, like, no, 371 00:18:13,040 --> 00:18:15,440 Speaker 1: I don't want to just put half my money and 372 00:18:15,760 --> 00:18:18,080 Speaker 1: spy and have my money and a bond fund and 373 00:18:18,160 --> 00:18:21,400 Speaker 1: let a ride. Like who are the people that sort 374 00:18:21,440 --> 00:18:24,600 Speaker 1: of don't accept this idea that they just have to 375 00:18:24,800 --> 00:18:27,280 Speaker 1: have a passive portfolio. Yeah. I think if you think 376 00:18:27,320 --> 00:18:29,600 Speaker 1: about you know, you take the different I would call 377 00:18:29,640 --> 00:18:32,120 Speaker 1: them like generations that are out there. So self directed 378 00:18:32,280 --> 00:18:35,119 Speaker 1: clients cover everyone from like eighteen years old only up 379 00:18:35,119 --> 00:18:36,680 Speaker 1: to you know, there are eighties and nineties that are 380 00:18:36,720 --> 00:18:39,879 Speaker 1: that are self directed trading, And I think what you 381 00:18:39,920 --> 00:18:43,239 Speaker 1: get is just there there's a different interest in the 382 00:18:43,280 --> 00:18:45,080 Speaker 1: stocks that they may or may not like. You know, 383 00:18:45,080 --> 00:18:46,720 Speaker 1: if you get the older generation, a lot of the 384 00:18:46,960 --> 00:18:48,600 Speaker 1: you think about sort of the staple stocks that they're 385 00:18:48,600 --> 00:18:50,520 Speaker 1: familiar with when they grew up, you know, the IBM 386 00:18:50,600 --> 00:18:52,560 Speaker 1: s and that those companies are very familiar with. And 387 00:18:52,600 --> 00:18:54,440 Speaker 1: then you kind of go into the the other side 388 00:18:54,480 --> 00:18:56,240 Speaker 1: and you think about like a twenty year old or 389 00:18:56,280 --> 00:18:59,640 Speaker 1: twenty four year old that's buying and selling stocks. Uh, 390 00:18:59,680 --> 00:19:02,480 Speaker 1: they're interested in other things. It could be you know, 391 00:19:03,040 --> 00:19:06,720 Speaker 1: water stocks or some type of you know, social type 392 00:19:06,720 --> 00:19:09,840 Speaker 1: of thing, or netflix, things that they're familiar with like Facebook. 393 00:19:10,320 --> 00:19:12,720 Speaker 1: I think the older generations some just don't are not 394 00:19:12,880 --> 00:19:14,680 Speaker 1: using things like this. They don't really care about it. 395 00:19:14,760 --> 00:19:16,119 Speaker 1: It's not going to trade it. So it's about the 396 00:19:16,119 --> 00:19:17,800 Speaker 1: things that they use. Has always been the interest of 397 00:19:17,880 --> 00:19:20,199 Speaker 1: no matter how you know, how young or old you are. 398 00:19:20,280 --> 00:19:22,720 Speaker 1: Has that always been the case that you see this 399 00:19:22,880 --> 00:19:26,840 Speaker 1: sort of demographic segmentation of the family of stocks that 400 00:19:26,960 --> 00:19:29,199 Speaker 1: people buy or is that something kind of new in 401 00:19:29,240 --> 00:19:32,320 Speaker 1: which if you like break it down by age group, 402 00:19:32,320 --> 00:19:35,960 Speaker 1: whether it's millennials versus older people, you can actually just 403 00:19:36,000 --> 00:19:38,280 Speaker 1: see a very like just different pool of stocks that 404 00:19:38,280 --> 00:19:40,480 Speaker 1: they're Again, I think a lot depends and mostly because 405 00:19:40,520 --> 00:19:42,480 Speaker 1: we've got millions of customers. It's you know, it's hard 406 00:19:42,520 --> 00:19:44,719 Speaker 1: to kind of really hone in on one particular thing, 407 00:19:44,760 --> 00:19:47,119 Speaker 1: but if but if you think about the stocks that 408 00:19:47,160 --> 00:19:49,360 Speaker 1: they're trading, that's one element. There are things depending upon 409 00:19:49,359 --> 00:19:51,120 Speaker 1: the trader you are. Are you know, are you are 410 00:19:51,160 --> 00:19:53,760 Speaker 1: you an active trader? H and do you take advantage 411 00:19:53,760 --> 00:19:56,160 Speaker 1: of volatility? Now you're looking for stocks that are volatile, 412 00:19:56,240 --> 00:19:58,360 Speaker 1: so you don't really care about the name. You really 413 00:19:58,440 --> 00:20:00,240 Speaker 1: care about the volatility in the stock, and that's what 414 00:20:00,240 --> 00:20:02,400 Speaker 1: you're more concerned with. So I think a lot has 415 00:20:02,440 --> 00:20:05,399 Speaker 1: to do with the type of investor you are, or 416 00:20:05,400 --> 00:20:08,840 Speaker 1: a trader um whether using technical analysis or fundamental analysis, 417 00:20:08,880 --> 00:20:10,480 Speaker 1: or there's an industry that you want to be in 418 00:20:10,760 --> 00:20:13,240 Speaker 1: on and say, hey, I'm a little bit nervous about 419 00:20:13,280 --> 00:20:15,160 Speaker 1: the market today, I want to get more defensive. Let 420 00:20:15,160 --> 00:20:18,119 Speaker 1: me go try to find some really high quality defensive stocks, 421 00:20:18,119 --> 00:20:20,320 Speaker 1: and so you'll spend some time looking at them and saying, 422 00:20:20,320 --> 00:20:22,280 Speaker 1: all right, which which is the best stock at this 423 00:20:22,280 --> 00:20:25,320 Speaker 1: particular group that I actually want to buy from my portfolio. 424 00:20:25,400 --> 00:20:26,760 Speaker 1: So I think it really depends, you know, with the 425 00:20:26,800 --> 00:20:29,160 Speaker 1: number of customers that we have. So has the shift 426 00:20:29,200 --> 00:20:33,679 Speaker 1: towards passive investing spurred E Trade to to change anything 427 00:20:33,680 --> 00:20:36,320 Speaker 1: about its business model or to provide, you know, certain 428 00:20:36,359 --> 00:20:39,919 Speaker 1: services that are geared more towards passive investors. Yeah, I 429 00:20:39,920 --> 00:20:43,240 Speaker 1: mean our model has evolved every year, it evolves. I 430 00:20:43,240 --> 00:20:44,480 Speaker 1: mean I think that any think about sort of the 431 00:20:44,520 --> 00:20:48,840 Speaker 1: past investing topic is that, yes, if the growth of 432 00:20:48,880 --> 00:20:52,720 Speaker 1: the ETFs demonstrates that there is a you know, a 433 00:20:52,840 --> 00:20:58,080 Speaker 1: large interest in clients investing in low cost diversified products. 434 00:20:58,119 --> 00:21:00,480 Speaker 1: So that's the data supports the fact that that's the case. 435 00:21:00,880 --> 00:21:02,960 Speaker 1: Part of that has been taking money from mutual funds 436 00:21:02,960 --> 00:21:04,720 Speaker 1: in the e t f s, but the rest is 437 00:21:04,760 --> 00:21:06,720 Speaker 1: just having the ability the access to some of these 438 00:21:06,800 --> 00:21:10,200 Speaker 1: you know, great sub sectors that you can use in 439 00:21:10,240 --> 00:21:14,080 Speaker 1: your portfolios diversified in different ways. So I think that 440 00:21:14,240 --> 00:21:16,800 Speaker 1: you know, from from an et F standpoint that that's 441 00:21:16,800 --> 00:21:19,040 Speaker 1: a that's a big part of it. There are things 442 00:21:19,040 --> 00:21:20,960 Speaker 1: you think about other products like let's call it like 443 00:21:21,160 --> 00:21:24,439 Speaker 1: robo investing, So the ability to to put your money 444 00:21:24,640 --> 00:21:26,560 Speaker 1: where you don't have to have a whole like five 445 00:21:27,240 --> 00:21:29,280 Speaker 1: dollars to put it in a particular portfolio and will 446 00:21:29,800 --> 00:21:32,800 Speaker 1: actually go back and realocate the portfolio. If the stocks 447 00:21:32,840 --> 00:21:34,760 Speaker 1: become too heavily weight in the portfolio, it will be 448 00:21:34,760 --> 00:21:37,479 Speaker 1: a readjustment get you back to where your risk tolerance is. 449 00:21:38,040 --> 00:21:39,639 Speaker 1: So these are the ideas that these are. These are 450 00:21:39,640 --> 00:21:42,719 Speaker 1: products that are growing uh and there's definitely interest in it. 451 00:21:42,760 --> 00:21:44,639 Speaker 1: And I think that the a lot of it's come 452 00:21:44,720 --> 00:21:48,959 Speaker 1: from the movement of quite a few investors that are 453 00:21:49,000 --> 00:21:52,040 Speaker 1: coming from the full service firms into the online trading firms. 454 00:21:52,440 --> 00:21:56,199 Speaker 1: What's next? You mentioned that the industry is always evolving 455 00:21:56,640 --> 00:21:59,320 Speaker 1: the rise of robo in the last few years, a 456 00:21:59,359 --> 00:22:02,919 Speaker 1: sort of auto matic portfolio allocation is big on the 457 00:22:03,000 --> 00:22:06,000 Speaker 1: roadmap as you look ahead, what are what do you 458 00:22:06,000 --> 00:22:08,119 Speaker 1: see around the corner for where the space is going 459 00:22:08,160 --> 00:22:10,840 Speaker 1: to go? Yeah, I think technology continues to play a 460 00:22:10,840 --> 00:22:13,080 Speaker 1: really large part in what's going on, you know, overall, 461 00:22:13,080 --> 00:22:14,600 Speaker 1: And I think, you know, just when you think this 462 00:22:14,640 --> 00:22:18,960 Speaker 1: industry gets commoditized, there's something that sort of helps accelerate 463 00:22:19,000 --> 00:22:22,159 Speaker 1: what's happening in a particular marketplace. I think that you know, 464 00:22:22,200 --> 00:22:24,359 Speaker 1: as we you know, we look at our customers and 465 00:22:24,560 --> 00:22:26,439 Speaker 1: I put them in three categories. One is do it 466 00:22:26,440 --> 00:22:29,080 Speaker 1: yourself that the ones do it with me. So I 467 00:22:29,119 --> 00:22:30,639 Speaker 1: need a little help, but I don't want to delegate 468 00:22:30,640 --> 00:22:32,119 Speaker 1: my portfolio. Then there's sort of like how do I 469 00:22:32,160 --> 00:22:33,720 Speaker 1: just delegate us? Want to give you my money and 470 00:22:33,760 --> 00:22:35,240 Speaker 1: just I want you to run out of no time. 471 00:22:35,920 --> 00:22:39,160 Speaker 1: It's the tools and the the tools and the ability 472 00:22:39,200 --> 00:22:41,720 Speaker 1: to educate these clients is to me is the game changers. 473 00:22:41,760 --> 00:22:44,720 Speaker 1: Like we we want to we have an invested stake 474 00:22:44,760 --> 00:22:47,919 Speaker 1: in making our clients successful. So everything that we do 475 00:22:48,000 --> 00:22:50,000 Speaker 1: is all about risk management. How do we actually take 476 00:22:50,040 --> 00:22:53,200 Speaker 1: and scale the educational offerings that we have two more 477 00:22:53,320 --> 00:22:56,080 Speaker 1: clients today is something that we're really pushing on. So 478 00:22:56,119 --> 00:22:58,240 Speaker 1: I think education is really a big thing for us 479 00:22:58,280 --> 00:23:01,240 Speaker 1: to make sure that we can make them very successful 480 00:23:01,400 --> 00:23:04,080 Speaker 1: and teach them about great products like options, where you know, 481 00:23:04,160 --> 00:23:07,400 Speaker 1: typically people are like, wow, those are very risky products, 482 00:23:07,440 --> 00:23:10,840 Speaker 1: but actually they're very conservatives. Well if you use them properly. 483 00:23:11,160 --> 00:23:13,200 Speaker 1: How do we educate them to help them generate income 484 00:23:13,200 --> 00:23:15,520 Speaker 1: in their portfolio or protect their portfolio. They're worried about 485 00:23:15,520 --> 00:23:18,320 Speaker 1: the market going down. So I mentioned this earlier in 486 00:23:18,359 --> 00:23:21,679 Speaker 1: the intro, but I'm really interested in what kind of 487 00:23:21,800 --> 00:23:25,600 Speaker 1: data the retail brokerages like each trade l T, dumrrigrade 488 00:23:25,640 --> 00:23:28,080 Speaker 1: get to see from their customers and how useful it 489 00:23:28,160 --> 00:23:31,920 Speaker 1: is in sort of predicting I guess, the durability or 490 00:23:31,960 --> 00:23:35,159 Speaker 1: the fragility of a stock market rally. What kind of 491 00:23:35,160 --> 00:23:38,000 Speaker 1: stuff do you get to see and at what point 492 00:23:38,240 --> 00:23:41,560 Speaker 1: do you start seeing behavior or what type of behavior 493 00:23:41,600 --> 00:23:45,320 Speaker 1: would suggest to you that investors are getting you know, 494 00:23:45,400 --> 00:23:47,440 Speaker 1: a little bit too excited or a little bit to 495 00:23:47,720 --> 00:23:50,960 Speaker 1: eu fork about equities. Yeah, we've had a good run. 496 00:23:50,960 --> 00:23:52,760 Speaker 1: I mean there's been this has been a ten year 497 00:23:52,840 --> 00:23:54,760 Speaker 1: plus run that we've had in the marketplace. So I 498 00:23:54,760 --> 00:23:57,600 Speaker 1: think that the enthusiasm still remains pretty high. And if 499 00:23:57,600 --> 00:23:59,360 Speaker 1: you went into last year, it's sort it's the first 500 00:23:59,440 --> 00:24:02,080 Speaker 1: year and ten years that we've had a downward market, 501 00:24:02,119 --> 00:24:05,439 Speaker 1: but we still saw netflows coming into the marketplace at 502 00:24:05,440 --> 00:24:07,200 Speaker 1: that point in time, so kind of clients were buying 503 00:24:07,240 --> 00:24:10,879 Speaker 1: on dips in general at at e trade. So I 504 00:24:10,880 --> 00:24:12,560 Speaker 1: think there's still a lot of confidence in the market 505 00:24:12,840 --> 00:24:15,800 Speaker 1: place for from as a long term investor, we try 506 00:24:15,840 --> 00:24:18,280 Speaker 1: to teach our clients that you know, from the short term, 507 00:24:18,320 --> 00:24:21,000 Speaker 1: make sure that your risk tolerance is properly. Your portfolio 508 00:24:21,040 --> 00:24:23,439 Speaker 1: matches your risk tolerance. Uh. And if you look at 509 00:24:23,480 --> 00:24:26,240 Speaker 1: them like let's say February five, when the market went 510 00:24:26,280 --> 00:24:29,080 Speaker 1: down tremendously that day, uh, it's it's not It's an 511 00:24:29,119 --> 00:24:30,800 Speaker 1: opportunity time for people to take a look saying were 512 00:24:30,800 --> 00:24:33,760 Speaker 1: you comfortable with how your portfolio performed on that given day. 513 00:24:33,840 --> 00:24:36,520 Speaker 1: If not, it's time to make some adjustments. Uh. You 514 00:24:36,560 --> 00:24:38,359 Speaker 1: don't want to make them when the market is going down. 515 00:24:38,440 --> 00:24:39,560 Speaker 1: You want to do it when things are a bit 516 00:24:39,600 --> 00:24:42,040 Speaker 1: more rational. So I think that's a that's a time 517 00:24:42,080 --> 00:24:44,679 Speaker 1: when people started to think about how they reallocate their portfolio. 518 00:24:45,160 --> 00:24:47,160 Speaker 1: So I think for right now, you know, people are 519 00:24:47,400 --> 00:24:50,560 Speaker 1: still very confident in the marketplace. That could change. But 520 00:24:50,600 --> 00:24:52,159 Speaker 1: the one thing that's really changed, I think in the 521 00:24:52,160 --> 00:24:55,800 Speaker 1: marketplaces the volatility, and the volatility has created, you know, 522 00:24:55,880 --> 00:24:57,960 Speaker 1: again a bit more anxiety for some investors. Are they 523 00:24:57,960 --> 00:24:59,960 Speaker 1: comfortable being in that environment? How do we teach people 524 00:25:00,040 --> 00:25:04,320 Speaker 1: bowl how to investor trade in a volatile market environment? 525 00:25:04,600 --> 00:25:06,280 Speaker 1: So if you think about it, the market went up 526 00:25:06,359 --> 00:25:09,480 Speaker 1: or down one percent sixty seven times last year. In 527 00:25:09,560 --> 00:25:13,080 Speaker 1: two thousand seventeen it happened less than ten times. So 528 00:25:13,119 --> 00:25:15,280 Speaker 1: you think about sort of the different market that we 529 00:25:15,359 --> 00:25:18,680 Speaker 1: have today, will it become less you know, volatile? I 530 00:25:18,720 --> 00:25:23,199 Speaker 1: would argue will not. But we have to reteach investors 531 00:25:23,200 --> 00:25:25,760 Speaker 1: how to stomach these types of movements in the in 532 00:25:25,800 --> 00:25:27,720 Speaker 1: the stock market on a given day and still remain 533 00:25:27,760 --> 00:25:32,240 Speaker 1: long term investors. From a business model standpoint, each trade 534 00:25:32,280 --> 00:25:34,560 Speaker 1: started off is just an online trading platform, but it 535 00:25:34,560 --> 00:25:36,360 Speaker 1: has everything now right, I mean, there's like you can 536 00:25:36,359 --> 00:25:39,800 Speaker 1: get a mortgage there right, not anymore? Oh not anymore. No, 537 00:25:40,040 --> 00:25:41,800 Speaker 1: it was a thing at one point it was until 538 00:25:42,000 --> 00:25:44,960 Speaker 1: until it wasn't a good thing. Okay, I was gonna ask, like, 539 00:25:45,000 --> 00:25:49,240 Speaker 1: I mean, you see different um platforms sort of going 540 00:25:49,280 --> 00:25:51,440 Speaker 1: to different degrees in terms of how much they want 541 00:25:51,440 --> 00:25:54,040 Speaker 1: to be a full fledged bank. You have something like 542 00:25:54,280 --> 00:25:56,480 Speaker 1: so far coming at it from the lending side. Now 543 00:25:56,480 --> 00:26:01,240 Speaker 1: they're adding more online trading. Is there arranged for sort 544 00:26:01,240 --> 00:26:05,440 Speaker 1: of different size and scope of the full financial services 545 00:26:05,560 --> 00:26:08,640 Speaker 1: or is everyone just gonna sort of eventually offer everything. Yeah, 546 00:26:08,640 --> 00:26:11,240 Speaker 1: I think it depends on everyone and what they're trying 547 00:26:11,280 --> 00:26:13,480 Speaker 1: to achieve. You know, at each trade, we have a bank. 548 00:26:13,520 --> 00:26:15,480 Speaker 1: We had a bank since the nineties. It's and it's 549 00:26:15,480 --> 00:26:17,360 Speaker 1: been part of our fabric of how we're doing. It's 550 00:26:17,440 --> 00:26:20,800 Speaker 1: very integrated into our particular offering. Not everybody has a bank, 551 00:26:20,960 --> 00:26:22,639 Speaker 1: you know, someone like TV Merrior Trade does not have 552 00:26:22,680 --> 00:26:24,679 Speaker 1: a bank, even though they've got a large ownership in 553 00:26:24,680 --> 00:26:27,800 Speaker 1: that company in the Merry Trade. So everybody's got a 554 00:26:27,800 --> 00:26:29,720 Speaker 1: different model of how they want to go about doing things. 555 00:26:29,800 --> 00:26:31,960 Speaker 1: But I would agree that we're continuing offering. If the 556 00:26:32,000 --> 00:26:35,520 Speaker 1: clients have a have a need, you will see more 557 00:26:35,560 --> 00:26:37,560 Speaker 1: of the brokers find a way to offer it at 558 00:26:37,560 --> 00:26:39,040 Speaker 1: a lower price. So if there are some things that 559 00:26:39,080 --> 00:26:41,520 Speaker 1: the full service industry or another industry is doing that's 560 00:26:41,600 --> 00:26:43,840 Speaker 1: charging high fees for it, and we're able to break 561 00:26:43,840 --> 00:26:46,000 Speaker 1: down the barriers and give access, whether it be hopefully 562 00:26:46,000 --> 00:26:49,119 Speaker 1: online at a lower cost, and help the client style 563 00:26:49,160 --> 00:26:52,200 Speaker 1: will always be looking for opportunities in that that area. Well, 564 00:26:52,720 --> 00:26:55,399 Speaker 1: fascinating to have you here, Chris Larkin of Each Trade, 565 00:26:55,400 --> 00:26:57,920 Speaker 1: Thank you very much for joining us. Thanks for confining me. 566 00:26:58,000 --> 00:27:17,199 Speaker 1: Dr Bloomberg, Welcome back, Tracy. This topic fills me with 567 00:27:17,640 --> 00:27:22,000 Speaker 1: so much nostalgia and it really is fascinating thinking about 568 00:27:22,800 --> 00:27:25,440 Speaker 1: how much is new and has changed in the last 569 00:27:25,480 --> 00:27:27,359 Speaker 1: two decades. Like I know, I didn't know what an 570 00:27:27,480 --> 00:27:30,200 Speaker 1: e t F was, Like I guess they existed when 571 00:27:30,240 --> 00:27:32,359 Speaker 1: I first got interested in the market, but I certainly 572 00:27:32,440 --> 00:27:35,760 Speaker 1: wasn't aware of them. The idea of things like education 573 00:27:35,800 --> 00:27:41,720 Speaker 1: about portfolio risk or automated robo portfolios, like it really 574 00:27:41,760 --> 00:27:45,199 Speaker 1: is sort of like bewildering how different this landscape is 575 00:27:45,240 --> 00:27:48,680 Speaker 1: than it was in the late nineties. It makes me sad, joke, 576 00:27:48,680 --> 00:27:50,880 Speaker 1: because I feel like I missed out on the golden 577 00:27:50,920 --> 00:27:55,040 Speaker 1: age of active individual equities trading and now it's really 578 00:27:55,080 --> 00:27:57,760 Speaker 1: boring because it's just, oh, put your money in you 579 00:27:57,800 --> 00:28:01,160 Speaker 1: know this SMP five hundred index track her. Yeah. Well, 580 00:28:01,200 --> 00:28:04,760 Speaker 1: you know, as Chris said, are still like people of 581 00:28:04,760 --> 00:28:07,400 Speaker 1: our generation still buy stocks, Like I don't know how 582 00:28:07,440 --> 00:28:09,639 Speaker 1: old you are, but you know people are at GE 583 00:28:10,080 --> 00:28:13,360 Speaker 1: We could buy and IBM and Berkshire Hathaway, Like if 584 00:28:13,359 --> 00:28:16,040 Speaker 1: we wanted to buy the stocks from our generation, we 585 00:28:16,080 --> 00:28:19,639 Speaker 1: still could. Uh. I don't know if I want to 586 00:28:19,640 --> 00:28:25,320 Speaker 1: buy G at this point. Yeah. Um. But you know 587 00:28:25,400 --> 00:28:29,040 Speaker 1: also this question of well, the thing that I find 588 00:28:29,080 --> 00:28:32,560 Speaker 1: really interesting is whether or not the platform itself has 589 00:28:32,720 --> 00:28:36,960 Speaker 1: influenced investor behavior. You know, you hear this all the time, 590 00:28:37,000 --> 00:28:39,600 Speaker 1: like people talk about how E t F s you 591 00:28:39,600 --> 00:28:41,440 Speaker 1: can buy them with a click of a button. And 592 00:28:41,600 --> 00:28:46,080 Speaker 1: maybe that makes people, I guess, more accustomed to instantaneous gratification. 593 00:28:46,240 --> 00:28:50,240 Speaker 1: Maybe it makes people more unused to losses, because there 594 00:28:50,360 --> 00:28:52,440 Speaker 1: may be kind of getting used to the notion that 595 00:28:52,480 --> 00:28:54,680 Speaker 1: they can just get rid of their stuff very easily 596 00:28:54,720 --> 00:28:57,080 Speaker 1: as well. I don't know. It's a sort of open 597 00:28:57,160 --> 00:29:00,880 Speaker 1: ended question. No, absolutely, And I think that's a theme 598 00:29:00,960 --> 00:29:03,600 Speaker 1: that we've hit multiple times on this podcast, like the 599 00:29:03,680 --> 00:29:07,520 Speaker 1: sort of the connection between the vehicle through which one 600 00:29:07,560 --> 00:29:10,560 Speaker 1: can buy the asset and then the price behavior of 601 00:29:10,560 --> 00:29:13,880 Speaker 1: the asset again. You certainly saw it in a crypto 602 00:29:14,240 --> 00:29:18,360 Speaker 1: in seventeen. You see it in real estate. People are 603 00:29:18,400 --> 00:29:22,200 Speaker 1: always sort of inventing new ways of funneling one's money 604 00:29:22,280 --> 00:29:25,120 Speaker 1: into an asset class, and I think by definition that 605 00:29:25,240 --> 00:29:27,720 Speaker 1: ends up changing how it trades and prices at the 606 00:29:27,760 --> 00:29:33,280 Speaker 1: same time. Yeah. Absolutely, This has been another episode of 607 00:29:33,320 --> 00:29:36,360 Speaker 1: the Odd Thoughts podcast. I'm Tracy Alloway. You can follow 608 00:29:36,360 --> 00:29:39,560 Speaker 1: me on Twitter at Tracy Alloway, and I'm Joe Wasn't though. 609 00:29:39,640 --> 00:29:42,520 Speaker 1: You could follow me on Twitter at the Stalwart, and 610 00:29:42,600 --> 00:29:45,880 Speaker 1: you should follow our producer on Twitter Toe for Foreheads. 611 00:29:45,960 --> 00:29:49,080 Speaker 1: He's at Foreheads T, as well as the Bloomberg head 612 00:29:49,080 --> 00:30:12,680 Speaker 1: of podcast, Francesco Leafy at Francesco Today. Thanks for listening.