WEBVTT - The Evolution Of The Online Brokerage Business 0:00:11.680 --> 0:00:14.560 Hello, and welcome to the Odd Lots Podcast. I'm Joe 0:00:14.600 --> 0:00:19.120 Wasn't and I'm Tracy Halloway. Tracy, do you know how 0:00:19.239 --> 0:00:23.079 I got interested in markets and stuff? Um? I have 0:00:23.320 --> 0:00:26.920 a sort of vague memory that you started trading I 0:00:26.960 --> 0:00:30.000 want to say, tech stocks in the nine nineties. I'm 0:00:30.040 --> 0:00:32.360 sure we've spoken about this before. You're right, I think 0:00:32.360 --> 0:00:34.680 we have, and I think you basically have it right. 0:00:34.840 --> 0:00:37.800 One summer, I think it was summer. I made two 0:00:37.800 --> 0:00:40.640 thousand dollars over the course of a summer from my 0:00:40.680 --> 0:00:44.080 summer job. And then I and then in what was 0:00:44.080 --> 0:00:46.479 your summer job? I don't really remember what I did, 0:00:46.520 --> 0:00:49.720 to be honest, I think I had all that. You 0:00:49.760 --> 0:00:53.920 only remember. You don't remember the normal job, remember the 0:00:53.960 --> 0:00:57.920 normal stuff. But I remember having two thousand dollars from 0:00:57.960 --> 0:01:02.280 a summer job, you know, the late nineties, and everyone 0:01:02.400 --> 0:01:05.320 was super interested in stocks and markets because there was 0:01:05.360 --> 0:01:08.440 a bubble going on. And I invested that money and 0:01:08.480 --> 0:01:11.520 tried to trade, and I grew a tenfold, so I 0:01:11.600 --> 0:01:14.679 grew it to twenty dollars and I've been hooked on 0:01:14.720 --> 0:01:18.360 markets ever since. Okay, so that's a total humble brag. 0:01:18.400 --> 0:01:20.560 But let me just ask you before I start asking 0:01:20.600 --> 0:01:23.640 about your training strategy. How did you even know to 0:01:24.440 --> 0:01:27.040 start trading stocks? I don't remember. It was just what 0:01:27.080 --> 0:01:28.800 people were doing, Like that was the thing. I think 0:01:28.800 --> 0:01:31.600 that like people don't necessarily remember. They look back at 0:01:31.640 --> 0:01:34.440 the bubble of the late nineties and they know that 0:01:34.480 --> 0:01:37.040 the stocks went up, but I don't think they remember 0:01:37.080 --> 0:01:40.720 like how pervasive it was as part of the culture. 0:01:41.440 --> 0:01:44.080 And it was just like what people were doing was 0:01:44.120 --> 0:01:46.880 what people were talking about, very similar to say, like 0:01:46.920 --> 0:01:52.360 people talking about cryptocurrencies in anden. It just became like 0:01:52.400 --> 0:01:56.840 this cultural phenomenon. So here's my other question, how did 0:01:56.880 --> 0:02:00.960 you actually trade? And you know, full disclosure in I 0:02:01.000 --> 0:02:02.800 would have been in middle school, but I would have 0:02:02.840 --> 0:02:06.360 had no idea exactly how to get started. Well, I 0:02:06.400 --> 0:02:09.320 had a good friend he worked for his father's investment company. 0:02:09.400 --> 0:02:12.639 But I remember there were just ads on TV for 0:02:12.680 --> 0:02:15.560 all these online brokerages and there was this one I 0:02:15.600 --> 0:02:19.000 actually used, this website called short Trade. I'm not really 0:02:19.000 --> 0:02:21.240 sure what happened to it, but I think they had 0:02:21.320 --> 0:02:23.440 these ads on TV for seven dollars a trade, and 0:02:23.480 --> 0:02:26.040 I just signed up and filled out some paperwork and 0:02:26.080 --> 0:02:28.920 stuff like that, and next thing, you know, there you 0:02:29.040 --> 0:02:30.600 there you went. You can just buy and sell stock. 0:02:31.200 --> 0:02:34.600 Next thing you know, you have twenty exactly. That's pretty good. 0:02:35.320 --> 0:02:38.359 I got really lucky because I studied abroad my sophomore 0:02:38.440 --> 0:02:41.080 year in college, and so I didn't lose all my 0:02:41.120 --> 0:02:43.880 money because I stopped trading. Otherwise I definitely would have 0:02:43.880 --> 0:02:45.480 gone to zero because I would have just been like 0:02:45.520 --> 0:02:48.480 everyone else. So I did. I did end up slightly 0:02:48.480 --> 0:02:51.720 positive for the bubble. And you weren't tempted to start 0:02:51.800 --> 0:02:55.920 currency trading while you were abroad. I didn't anyway. The 0:02:55.960 --> 0:02:58.919 reason I bring this up is not just to brag, 0:02:59.280 --> 0:03:02.160 but because day we are going to be talking about 0:03:02.200 --> 0:03:04.799 the online brokerage business, which was a huge part of 0:03:05.160 --> 0:03:08.359 what made that period so special. Was this idea, as 0:03:08.400 --> 0:03:11.160 you put it, that you didn't really need to know anything. 0:03:11.200 --> 0:03:13.520 You could just go to a website and start trading. 0:03:13.520 --> 0:03:16.200 It was much simpler and cheaper than it had ever 0:03:16.280 --> 0:03:21.280 been before. And that business obviously is still around and grown. 0:03:21.680 --> 0:03:25.480 But that really is like when it's sort of got going. Yeah, 0:03:25.520 --> 0:03:28.040 and this still crops up nowadays. You know, you see 0:03:28.080 --> 0:03:32.440 people pointing to certain advertisements coming out of various of 0:03:32.480 --> 0:03:36.040 the big internet brokerage his and people say, oh, well, 0:03:36.040 --> 0:03:38.640 this is evidence that the stock market rally has gone 0:03:38.640 --> 0:03:40.760 too far. You know, people are just coming in to 0:03:40.920 --> 0:03:44.000 make some easy money now, So brokerage is still play 0:03:44.080 --> 0:03:47.920 an important part when it comes to measuring sentiment around 0:03:47.920 --> 0:03:50.280 the stock market. Yeah, and what's interesting to me and 0:03:50.320 --> 0:03:52.880 what I want to get into on today's episode is 0:03:53.320 --> 0:03:55.240 back then, in the late nineties, there was this sort 0:03:55.240 --> 0:03:59.360 of like obsession with individual stocks and the internet stocks 0:03:59.400 --> 0:04:02.400 and Yahoo and eBay and Amazon and all these stocks 0:04:02.400 --> 0:04:06.160 that are making people of fortune. These days, there's such 0:04:06.160 --> 0:04:10.160 a mantra around don't try to beat the market, just 0:04:10.240 --> 0:04:14.000 focus on reducing fees. Passive is best. And so the 0:04:14.440 --> 0:04:17.400 message that people at home are being sent in terms 0:04:17.480 --> 0:04:20.120 of how they should think about investing UH is very, 0:04:20.240 --> 0:04:23.960 very different than it was two decades ago. Nonetheless, people 0:04:24.000 --> 0:04:28.120 do still trade, and they trade through these retail brokerages 0:04:28.279 --> 0:04:32.200 and online at home. So I'm very interested in sort 0:04:32.240 --> 0:04:36.800 of learning about how that world has changed since then. Yeah, 0:04:36.920 --> 0:04:38.680 so am I. And as you put it, it is 0:04:38.680 --> 0:04:42.240 a really interesting flip. Like if you go online nowadays 0:04:42.279 --> 0:04:45.720 to personal finance message boards, no one's saying by this 0:04:45.760 --> 0:04:48.239 particular stock because it's going to make you rich, they're saying, 0:04:48.440 --> 0:04:50.800 put all your money in a passive index fund and 0:04:51.040 --> 0:04:53.600 just right that all the way up. Yeah, exactly right. 0:04:53.600 --> 0:04:56.880 All right, Well, with us to discuss the evolution of 0:04:56.920 --> 0:05:00.159 the online trading business is a a veteran of the 0:05:00.200 --> 0:05:03.119 space we have with us today on aud Chris Larkin. 0:05:03.200 --> 0:05:06.360 He's the senior vice president of trading at the Trade, 0:05:06.480 --> 0:05:09.640 one of the long time stalwarts of the industry, and 0:05:09.680 --> 0:05:11.800 he's been in the space for a long time, and 0:05:11.880 --> 0:05:14.919 so we'll learn about all this stuff and get some 0:05:15.000 --> 0:05:17.839 perspective about how things are the same and how things 0:05:17.920 --> 0:05:20.440 have changed. Chris, thank you very much for joining us, 0:05:20.720 --> 0:05:22.480 Thanks for having me, and thanks for making me feel 0:05:22.560 --> 0:05:25.039 very old as you guys tell your stories and I 0:05:25.120 --> 0:05:27.760 kind of go farther back and I'm thinking myself, Okay, 0:05:28.560 --> 0:05:30.640 I try to feel young, but today I feel old 0:05:30.640 --> 0:05:33.120 with the two you talking. When I said is like, oh, 0:05:33.240 --> 0:05:35.720 that's been two decades since then. It hit me really 0:05:35.720 --> 0:05:38.240 hard even when I said that. But why don't you 0:05:38.279 --> 0:05:41.120 tell us how you got your start of the space 0:05:41.480 --> 0:05:44.920 and what you you're sort of your career path in 0:05:45.000 --> 0:05:48.200 the world of online trading. Yeah, my my first job 0:05:48.400 --> 0:05:51.960 at a college was with a firm called Waterhouse Securities. 0:05:52.560 --> 0:05:55.840 It was a small discount brokerage firm which offered you know, 0:05:55.920 --> 0:06:00.400 self directed clients to call in and place trades for 0:06:00.600 --> 0:06:03.640 individual stocks, mutual funds in those products. At the time, 0:06:03.680 --> 0:06:06.680 ETFs weren't really around, so they were sort of new 0:06:06.680 --> 0:06:09.760 and Charles Schwab and Waterhouse was sort of the bigger 0:06:09.839 --> 0:06:12.000 firms that were out there at the time, and we 0:06:12.000 --> 0:06:14.200 were just at the when you thought about the technology 0:06:14.240 --> 0:06:16.440 at that given point in time, was the Internet was 0:06:16.600 --> 0:06:18.840 just starting to come to light, so it was still 0:06:18.839 --> 0:06:20.520 a little bit early. At that point in time. Everything 0:06:20.600 --> 0:06:23.400 was very manual. So just think about how a client 0:06:23.480 --> 0:06:25.799 had no information they had a calls for a quote 0:06:25.800 --> 0:06:27.599 on I b M. There's no other way to get 0:06:27.600 --> 0:06:29.279 one unless you just saw the paper the next day 0:06:29.760 --> 0:06:31.799 they had called the place orders they had to get. 0:06:31.880 --> 0:06:36.320 Everything was done manually and what year was this, So 0:06:36.520 --> 0:06:41.320 you know, the period between nineties six it was very manual. 0:06:41.400 --> 0:06:43.960 Then things really took off when technologies started to come together. 0:06:44.440 --> 0:06:48.840 So how much did the sort of development of online 0:06:48.839 --> 0:06:52.360 trading platforms and brokerage is how much does that owe 0:06:52.520 --> 0:06:55.600 to the big tech bubble that we saw in the 0:06:55.680 --> 0:06:58.880 late ninet nineties and the excitement around stock trading that 0:06:59.000 --> 0:07:02.039 Joe was describing. Yeah, I think I think it's an accessibility. 0:07:02.080 --> 0:07:03.440 I think, you know, in terms of the ability that 0:07:03.560 --> 0:07:05.960 the information was now starting to come to light. So, 0:07:06.120 --> 0:07:08.200 like I said before, if you wanted to get a 0:07:08.279 --> 0:07:10.680 quote on a stock, you had to call someone up 0:07:10.680 --> 0:07:13.880 to get that quote. In the sort of the nineties, 0:07:14.320 --> 0:07:16.640 you started to get the ability, you know, via computer 0:07:16.720 --> 0:07:19.840 that you could get real time quotes, whether you get 0:07:19.840 --> 0:07:21.680 it through the website or they're starting to get some 0:07:21.680 --> 0:07:24.280 more applications where you can get streaming quotes from as well. 0:07:24.320 --> 0:07:26.160 These were things that would be unheard of and only 0:07:26.200 --> 0:07:29.080 available to institutional investors that started coming too retail clients. 0:07:29.080 --> 0:07:32.080 So there was just the ability to get the information 0:07:32.320 --> 0:07:35.440 was much different than it ever was before. I remember, 0:07:35.680 --> 0:07:39.560 like even the idea of real time quotes versus fifteen 0:07:39.600 --> 0:07:44.280 minute delayed quotes was this huge thing back then. And 0:07:44.720 --> 0:07:48.440 you know, having access to an online brokerage versus just 0:07:48.520 --> 0:07:51.080 sort of like a normal like public facing website like 0:07:51.200 --> 0:07:54.040 Yahoo Finance was pretty big at the time. It was 0:07:54.080 --> 0:07:56.840 a really exciting thing about being at some sort of 0:07:56.960 --> 0:07:59.600 paid service. Just the ability to not have something to 0:07:59.680 --> 0:08:01.920 be to by twenty minutes. Yeah, I mean, I think 0:08:01.960 --> 0:08:03.400 that's that was the big thing. I think the thing 0:08:03.440 --> 0:08:05.040 that was missing at that point in time. So even 0:08:05.080 --> 0:08:06.920 when you were entering and place in your first trade, 0:08:07.440 --> 0:08:11.360 that really all you had was real time quotes. Uh. 0:08:11.480 --> 0:08:14.920 You didn't have research or news or access to a 0:08:14.960 --> 0:08:17.280 lot of things that eventually came over time as more 0:08:17.280 --> 0:08:19.360 and more people signed up and people started to enrich 0:08:19.400 --> 0:08:21.960 their offerings. Uh, they started to add more of the 0:08:22.000 --> 0:08:24.120 tools and services, which is you know again played a 0:08:24.200 --> 0:08:26.800 very big part in the evolution of the particular you know, 0:08:26.920 --> 0:08:32.000 online investing industry. Was there any resistance to the availability 0:08:32.040 --> 0:08:35.160 of internet trading or people sort of distrustful of the 0:08:35.240 --> 0:08:37.920 notion that they could buy and sell stocks online. Did 0:08:37.920 --> 0:08:40.080 they think, oh I should be doing this through you know, 0:08:40.120 --> 0:08:43.960 an actual person in the old fashioned traditional way. Yeah, 0:08:43.960 --> 0:08:45.720 I think there's I think it really in two ways. 0:08:45.840 --> 0:08:48.000 One is that I think, you know, technology is starting 0:08:48.040 --> 0:08:50.000 to come together at that point in time, and people 0:08:50.040 --> 0:08:52.440 weren't quite sure was it secure like I made my 0:08:52.480 --> 0:08:54.920 money somewhere, Like was it secure if I go online 0:08:54.960 --> 0:08:57.080 in place a trade? So there were some people that 0:08:57.120 --> 0:08:58.600 were concerned, but again there was a lot of things 0:08:58.640 --> 0:09:00.120 that we put in place to make sure that the 0:09:00.160 --> 0:09:03.200 security was very solid at that point in time. The 0:09:03.240 --> 0:09:04.719 other thing was that he also had the you know, 0:09:04.760 --> 0:09:07.280 the full service industry at that point in time. I 0:09:07.280 --> 0:09:09.559 think they spent a lot of They spend a lot 0:09:09.559 --> 0:09:11.880 of effort in terms of saying that you can't do 0:09:11.920 --> 0:09:13.600 it on your own. You need us, this is a 0:09:13.760 --> 0:09:16.520 this is Wall Street. You need a professional to help 0:09:16.520 --> 0:09:18.000 you with your money. Going out there and doing your 0:09:18.000 --> 0:09:20.120 own you can never be successful. So I think, you know, 0:09:20.320 --> 0:09:21.880 they saw the threat. There's a lot of you know, 0:09:21.920 --> 0:09:25.320 the instues growing, there's a threat to their business. So 0:09:25.640 --> 0:09:27.240 you saw a lot of people trying to say that 0:09:27.240 --> 0:09:28.880 there's no way someone could do this on their own. 0:09:29.160 --> 0:09:31.000 Tell us a little bit more about your career. You 0:09:31.000 --> 0:09:34.120 mentioned you're at Waterhouse in the very early in nineties. 0:09:34.559 --> 0:09:38.440 When did you get into what we now recognize as 0:09:38.440 --> 0:09:41.360 the online trading business. Yeah, I think so at that 0:09:41.400 --> 0:09:43.480 point time when I when I left Waterhouse, I went 0:09:43.520 --> 0:09:45.439 to the institutional side of the business, and I was 0:09:45.480 --> 0:09:48.960 working for IG Bearings, which was a full service firm 0:09:49.000 --> 0:09:50.680 for on the institutional side of the business as a 0:09:50.679 --> 0:09:54.080 sales trader. We went through some tough times during the 0:09:54.080 --> 0:09:57.280 Asian crisis, and when I was trading, what I saw 0:09:57.440 --> 0:10:00.280 was there was firms like Bloomberg and instant It were 0:10:00.280 --> 0:10:03.320 stored the forefront of technology from an execution standpoint for 0:10:04.040 --> 0:10:07.319 buying and selling stocks for institutional investors UH. At that 0:10:07.360 --> 0:10:08.800 point in time, I thought, I need to get in 0:10:08.840 --> 0:10:10.760 front of this, so I did join. I joined Bloomberg 0:10:10.760 --> 0:10:13.480 at that point in time to be part of a 0:10:13.559 --> 0:10:17.800 very successful UH firm. But then when things really started 0:10:17.800 --> 0:10:20.400 heating up. You know, someone who was a the number 0:10:20.400 --> 0:10:24.000 two over Waterhouse had become the CEO at Daytech Online, 0:10:24.520 --> 0:10:27.040 which was a very small but very fast growing firm. 0:10:27.160 --> 0:10:30.080 What happened to them? I remember day Tech and that 0:10:30.200 --> 0:10:31.840 was like a big name at the time. Where did 0:10:31.880 --> 0:10:34.360 they go? I don't They ended up getting acquired by 0:10:34.360 --> 0:10:37.080 a merritor trade in two thousand and two three in 0:10:37.120 --> 0:10:40.040 that area. But they were truly a disruptor and industry 0:10:40.080 --> 0:10:43.280 at that point in time. You know, online trading was available, 0:10:43.440 --> 0:10:45.600 but there was beyond just the idea of being able 0:10:45.640 --> 0:10:48.360 to you know, buy and sell stocks online. There wasn't 0:10:48.360 --> 0:10:51.280 a true disruption, but they took was a true innovator 0:10:51.400 --> 0:10:53.920 and disruptor in the in the business and so, uh, 0:10:54.120 --> 0:10:56.560 they were growing at a massive rate at that point 0:10:56.559 --> 0:10:59.319 in time, like others as well. So how did execution 0:10:59.640 --> 0:11:03.480 on those platforms work At the time, We're orders being 0:11:03.520 --> 0:11:07.560 sent basically through you know, the traditional market makers. Well, 0:11:07.600 --> 0:11:09.440 if you go, I'll just go back in time just 0:11:09.480 --> 0:11:11.080 for just a quick thing to give you just you know, 0:11:11.120 --> 0:11:12.840 an idea is that when someone called up and they 0:11:13.200 --> 0:11:15.120 were at Waterhouse Securities and you wanted to go by 0:11:15.240 --> 0:11:18.040 you know, hundred shares of IBM, you call up and 0:11:18.080 --> 0:11:20.600 you put in a market order, you would hang up 0:11:20.600 --> 0:11:22.160 the phone and we would call you back. At some 0:11:22.200 --> 0:11:23.920 point in time we got an execution that could be 0:11:24.480 --> 0:11:26.640 an hour or two later, so you would eventually get 0:11:26.640 --> 0:11:28.400 it back. By the time it was execute got down, 0:11:28.440 --> 0:11:30.640 their executed came back, we had to call you back. 0:11:30.679 --> 0:11:33.000 It was pretty rare to get the execution on the phone. 0:11:33.960 --> 0:11:36.760 At date Tech, we were the ability to to route 0:11:36.840 --> 0:11:40.040 orders to other destinations beyond the exchange was starting to 0:11:40.080 --> 0:11:42.360 become available. We owned an e c N called Island 0:11:42.400 --> 0:11:45.679 d c N UH and that that was again an 0:11:45.679 --> 0:11:49.000 innovation and you know a differentiator for us. What did 0:11:49.040 --> 0:11:51.880 e c N stand for? It's electronic communications network, right, 0:11:52.559 --> 0:11:54.360 and you know at that point time we're going to 0:11:54.440 --> 0:11:56.920 utilize that in order to get very fast executions back. 0:11:57.080 --> 0:12:01.120 But when I say fast executions, uh, we had to 0:12:01.160 --> 0:12:04.400 guarantee a trading guarantee. So we guarantee your market or 0:12:04.559 --> 0:12:09.040 would be executed in less than sixty seconds. So nobody 0:12:09.120 --> 0:12:11.760 in the industry could match that. Nobody, so we had 0:12:11.800 --> 0:12:15.360 a pure advantage over other people when it came down 0:12:15.360 --> 0:12:18.720 to executions in the speed of our executions. We would 0:12:18.760 --> 0:12:21.839 execute in the sixty seconds or your traders are free. Uh. 0:12:21.880 --> 0:12:25.920 Today you get micro seconds before your order is executed, 0:12:25.960 --> 0:12:27.439 so it's less than a second if you put in 0:12:27.520 --> 0:12:28.960 a market order, it's less than a second if you 0:12:28.960 --> 0:12:31.360 get executed. You can't even refresh your screen fast enough 0:12:31.400 --> 0:12:33.800 by the time that order is executed. So you could 0:12:33.840 --> 0:12:39.320 just see how technology has become, you know, a game changer, 0:12:39.400 --> 0:12:42.480 I guess when it comes down to executing orders. So 0:12:42.760 --> 0:12:45.200 just to be clear, what was it that day Tech 0:12:45.360 --> 0:12:50.160 had structurally that allowed it to may be able to 0:12:50.200 --> 0:12:52.160 make such a promise The c N, I think the 0:12:52.360 --> 0:12:54.840 differentiate was easier and so we could route orders directly 0:12:54.880 --> 0:12:56.719 to the c c N and match a buyer and 0:12:56.800 --> 0:12:59.600 seller and get a report back immediately. And so when 0:12:59.600 --> 0:13:01.120 you were going to the exchanges, we were you know, 0:13:01.200 --> 0:13:02.959 we were pushing them. But if you take an idea 0:13:03.080 --> 0:13:04.680 like say the et F. Let's say at that point 0:13:04.679 --> 0:13:07.320 in time the q q q s were were available. 0:13:07.400 --> 0:13:09.439 If you put a more market for q c s 0:13:09.480 --> 0:13:12.440 and sent it down to the American Stock Exchange, you 0:13:12.520 --> 0:13:15.320 might wait two minutes for an execution back three minutes, 0:13:15.360 --> 0:13:18.880 four minutes. We started moving our orders onto the UH 0:13:18.960 --> 0:13:22.040 the Island d c N and you'd have an instantaneous execution. 0:13:22.320 --> 0:13:24.040 So people are very frustrated. They were not you know, 0:13:24.080 --> 0:13:27.840 technology was starting to really accelerate and it was becoming 0:13:27.920 --> 0:13:30.760 unacceptable to get an execution in you know, three or 0:13:30.800 --> 0:13:33.400 four minutes. People wanted to get a very good execution, 0:13:33.400 --> 0:13:36.240 and they wanted it quickly. Okay, So customers are now 0:13:36.280 --> 0:13:41.120 executing trades at sixty seconds or less on the online platforms. 0:13:41.120 --> 0:13:42.920 Other people are doing it in two or three minutes, 0:13:43.120 --> 0:13:46.480 versus you know, in the early nineties or nine eighties, 0:13:46.559 --> 0:13:48.920 when it might take a couple of hours even to 0:13:49.000 --> 0:13:53.720 get your trade actually executed and confirmed. Did that change 0:13:53.960 --> 0:13:57.200 trading behavior in your opinion? Did people start trading in 0:13:57.240 --> 0:14:01.040 a different way now that they had virtually instant haineous execution. 0:14:01.640 --> 0:14:03.840 I think that's part of it. I think the you know, 0:14:04.280 --> 0:14:06.600 it's a culmination. I think of a few things. Obviously, 0:14:06.600 --> 0:14:09.160 the executions were becoming better, so the access was much 0:14:09.200 --> 0:14:12.720 better and the information was much better. Obviously, when you 0:14:12.720 --> 0:14:15.440 think about as time were revolving, you've got the real 0:14:15.440 --> 0:14:18.160 time quotes at this point in time. You know, Daytaud 0:14:18.200 --> 0:14:20.680 been the first broken to offer free real time streaming quotes. 0:14:20.720 --> 0:14:23.800 That you had a a quote terminal, you know, per 0:14:23.840 --> 0:14:25.760 se where you could put a watch list together and 0:14:25.760 --> 0:14:28.160 watch a whole bunch of stocks. And then I think 0:14:28.200 --> 0:14:29.880 the when you think about sort of what was happening 0:14:29.880 --> 0:14:32.240 at that point in time, you know, the market was 0:14:32.360 --> 0:14:36.160 going up, and there's there is a flock mentality when 0:14:36.200 --> 0:14:39.280 things go up. You talked about bitcoin before. I don't 0:14:39.280 --> 0:14:41.720 think it. You know, people all of a sudden had 0:14:41.760 --> 0:14:45.960 a passion for digital currency. It's that people were making money, 0:14:46.440 --> 0:14:48.160 and there's this like I don't want to be left 0:14:48.200 --> 0:14:50.880 out type of a thing. So people start getting involved 0:14:50.920 --> 0:14:52.880 and saying I want to find a way to make money, 0:14:52.880 --> 0:14:54.680 just like you know, my neighbors making a whole bunch 0:14:54.680 --> 0:14:57.000 of money, so they don't never want to be left out. 0:14:57.080 --> 0:14:59.600 So there was you know, the flock mentality was going 0:14:59.600 --> 0:15:01.640 on that point time, and people were making, you know, 0:15:01.800 --> 0:15:04.520 irrational decisions, was pushing companies that were not making money 0:15:04.520 --> 0:15:07.480 to these lofty levels. But when you have a whole 0:15:07.520 --> 0:15:10.640 bunch of all coming in, it certainly contributed to sort of, um, 0:15:10.720 --> 0:15:12.520 what was happening at that point in time. But we're 0:15:12.520 --> 0:15:14.960 also that we're also starting to add in other things 0:15:14.960 --> 0:15:18.320 like education news. These are things you could you when 0:15:18.360 --> 0:15:20.600 you wanted to buy a stock back in the eighties 0:15:20.680 --> 0:15:23.200 or early nineties, you called up your full service broker 0:15:23.520 --> 0:15:25.120 and you'd be lucky if they soldion. And like an 0:15:25.200 --> 0:15:27.080 end of report that was like eight months old, like 0:15:27.320 --> 0:15:29.880 there was no information. You can literally you can now 0:15:30.000 --> 0:15:32.320 find a whole bunch of you know, data, whether it 0:15:32.360 --> 0:15:35.080 be fundamental analysis or technical analysis, right, you know, from 0:15:35.120 --> 0:15:41.560 your computer terminal. In early two thousands, when the sort 0:15:41.600 --> 0:15:44.480 of the number of new people entering the market daily, 0:15:44.960 --> 0:15:47.400 I mean it got so big that it overwhelmed the systems, right. 0:15:47.400 --> 0:15:50.240 There started to be outages at that part because it's 0:15:50.280 --> 0:15:53.520 just the infrastructure still at the time had a hard time. 0:15:53.760 --> 0:15:56.840 Um keeping up with it. Did you were people worried 0:15:56.840 --> 0:16:00.440 about that? Were people inside the company or in company 0:16:00.560 --> 0:16:03.080 is like worried about like, Okay, when this bubble bursts 0:16:03.160 --> 0:16:05.840 or when this can't be sustainable, and then there's gonna 0:16:05.840 --> 0:16:08.320 be a lot of people who their first introduction to 0:16:08.560 --> 0:16:11.000 the stock market is going to be a pretty tough one. Yeah, 0:16:11.080 --> 0:16:12.880 I think that's a word of everybody today. I mean, 0:16:13.000 --> 0:16:15.640 we've we we've obviously gotten much better in the ability 0:16:15.680 --> 0:16:17.600 to stabilize all the systems and be able to handle 0:16:17.640 --> 0:16:20.000 the scale that's that's been going on. But back then 0:16:20.040 --> 0:16:21.760 it was a big issue that you know, an outage 0:16:21.800 --> 0:16:24.160 was not an abnormal thing to happen once a week, 0:16:24.240 --> 0:16:27.040 especially during the very busy times, And it's all about 0:16:27.040 --> 0:16:28.640 how quick you can recover and to make sure that 0:16:28.680 --> 0:16:30.600 your clients were taken care of. And I think that's 0:16:30.600 --> 0:16:32.960 the main thing when when things there there's an expectation 0:16:33.000 --> 0:16:35.000 at some point in time that systems will go down, 0:16:35.800 --> 0:16:38.480 but what what our clients want or us to stand 0:16:38.480 --> 0:16:40.560 behind that and make sure that we make any adjustments 0:16:40.600 --> 0:16:55.120 necessary if there was a problem. Alright, So Joe and 0:16:55.160 --> 0:16:57.480 I alluded to this in our intro, but one thing 0:16:57.600 --> 0:17:03.800 I'm really curious about is who is trading individual stocks nowadays, 0:17:03.880 --> 0:17:06.800 because again and again, you know, the emphasis all seems 0:17:06.880 --> 0:17:10.479 to be on passive investing on index funds. Is anyone 0:17:10.600 --> 0:17:14.680 still trading actively in individual stocks? Well, I would say, 0:17:14.920 --> 0:17:16.640 you know, one thing is that we've just come off 0:17:16.680 --> 0:17:18.919 for record year last year, So I think that you know, 0:17:18.960 --> 0:17:20.800 the idea that the last two years, two thousand seven 0:17:20.800 --> 0:17:22.159 team was a record for US, I would say for 0:17:22.200 --> 0:17:23.600 the industry, and I don't want to just speak just 0:17:23.720 --> 0:17:26.159 on you know, each trade alone, but it was a 0:17:26.200 --> 0:17:28.280 record for two thousand seventeen, two thousand and eighteen, we're 0:17:28.280 --> 0:17:31.760 both tremendous years for the industry in general. So clients 0:17:31.800 --> 0:17:35.440 are definitely still trading online. Um, I think the word 0:17:35.520 --> 0:17:39.200 actively is you know, you can debate what actively actually 0:17:39.280 --> 0:17:43.399 means when you talk about passive investing passive investing. I 0:17:43.400 --> 0:17:46.760 would say, in general, the average customers a passive investor, 0:17:47.600 --> 0:17:51.240 we you know, are our client, you know base, A 0:17:51.400 --> 0:17:53.080 very small number of them are what you would define 0:17:53.119 --> 0:17:55.080 as an active trader or a day trader that some 0:17:55.080 --> 0:17:56.760 people might want to put in there. Most people are 0:17:56.840 --> 0:18:00.000 actually actually just putting together a portfolio and buying an 0:18:00.040 --> 0:18:04.040 holding and making slight adjustments throughout the year. Nonetheless, there 0:18:04.160 --> 0:18:07.560 is still interest in individual stocks. So do you see 0:18:07.640 --> 0:18:10.919 any are there any sort of demographics or anything that 0:18:10.960 --> 0:18:12.960 you could say about the people that say, like, no, 0:18:13.040 --> 0:18:15.440 I don't want to just put half my money and 0:18:15.760 --> 0:18:18.080 spy and have my money and a bond fund and 0:18:18.160 --> 0:18:21.400 let a ride. Like who are the people that sort 0:18:21.440 --> 0:18:24.600 of don't accept this idea that they just have to 0:18:24.800 --> 0:18:27.280 have a passive portfolio. Yeah. I think if you think 0:18:27.320 --> 0:18:29.600 about you know, you take the different I would call 0:18:29.640 --> 0:18:32.120 them like generations that are out there. So self directed 0:18:32.280 --> 0:18:35.119 clients cover everyone from like eighteen years old only up 0:18:35.119 --> 0:18:36.680 to you know, there are eighties and nineties that are 0:18:36.720 --> 0:18:39.879 that are self directed trading, And I think what you 0:18:39.920 --> 0:18:43.239 get is just there there's a different interest in the 0:18:43.280 --> 0:18:45.080 stocks that they may or may not like. You know, 0:18:45.080 --> 0:18:46.720 if you get the older generation, a lot of the 0:18:46.960 --> 0:18:48.600 you think about sort of the staple stocks that they're 0:18:48.600 --> 0:18:50.520 familiar with when they grew up, you know, the IBM 0:18:50.600 --> 0:18:52.560 s and that those companies are very familiar with. And 0:18:52.600 --> 0:18:54.440 then you kind of go into the the other side 0:18:54.480 --> 0:18:56.240 and you think about like a twenty year old or 0:18:56.280 --> 0:18:59.640 twenty four year old that's buying and selling stocks. Uh, 0:18:59.680 --> 0:19:02.480 they're interested in other things. It could be you know, 0:19:03.040 --> 0:19:06.720 water stocks or some type of you know, social type 0:19:06.720 --> 0:19:09.840 of thing, or netflix, things that they're familiar with like Facebook. 0:19:10.320 --> 0:19:12.720 I think the older generations some just don't are not 0:19:12.880 --> 0:19:14.680 using things like this. They don't really care about it. 0:19:14.760 --> 0:19:16.119 It's not going to trade it. So it's about the 0:19:16.119 --> 0:19:17.800 things that they use. Has always been the interest of 0:19:17.880 --> 0:19:20.199 no matter how you know, how young or old you are. 0:19:20.280 --> 0:19:22.720 Has that always been the case that you see this 0:19:22.880 --> 0:19:26.840 sort of demographic segmentation of the family of stocks that 0:19:26.960 --> 0:19:29.199 people buy or is that something kind of new in 0:19:29.240 --> 0:19:32.320