1 00:00:00,120 --> 00:00:03,199 Speaker 1: Brought to you by Bank of America Merrill Lynch, committed 2 00:00:03,240 --> 00:00:06,280 Speaker 1: to bringing higher finance to lower carbon named the most 3 00:00:06,320 --> 00:00:10,280 Speaker 1: innovative investment bank for climate change and sustainability by the Banker. 4 00:00:10,600 --> 00:00:13,920 Speaker 1: That's the power of Global Connections. Bank of America North 5 00:00:13,960 --> 00:00:19,560 Speaker 1: America member f D i C. This is Masters in 6 00:00:19,640 --> 00:00:23,680 Speaker 1: Business with Barry Ridholts on Bloomberg Radio this week on 7 00:00:23,720 --> 00:00:27,840 Speaker 1: the podcast, I have someone I've actually followed his work 8 00:00:27,920 --> 00:00:31,520 Speaker 1: for many many years. His name is John Roke, and 9 00:00:31,800 --> 00:00:36,600 Speaker 1: he is a technician extraordinaire. Uh. He is one of 10 00:00:36,640 --> 00:00:41,560 Speaker 1: those technical folks that other technicians talk about in hushed 11 00:00:41,560 --> 00:00:47,920 Speaker 1: and reverent tones. You will find him to be uh straightforward, humble, 12 00:00:48,400 --> 00:00:52,160 Speaker 1: uh blunt and how he describes what he what he does. 13 00:00:53,320 --> 00:00:57,160 Speaker 1: If you're looking for somebody who has worked for George 14 00:00:57,160 --> 00:01:01,160 Speaker 1: Soros and worked for other storage shops to be arrogant 15 00:01:01,360 --> 00:01:04,920 Speaker 1: and uh suffer from a big head, this is not 16 00:01:05,120 --> 00:01:09,000 Speaker 1: the guy uh uh that exhibits any of that. He 17 00:01:09,280 --> 00:01:13,680 Speaker 1: is uh someone who um not only has worked at 18 00:01:13,720 --> 00:01:18,280 Speaker 1: places like uh Lehman Brothers and and Sorrows Funds Management, 19 00:01:18,680 --> 00:01:23,920 Speaker 1: but has constantly improved his craft and constantly raised his 20 00:01:23,959 --> 00:01:28,000 Speaker 1: own skill level and reputation within the industry UM and 21 00:01:28,160 --> 00:01:32,399 Speaker 1: is really insightful and really knowledgeable about just about everything 22 00:01:32,440 --> 00:01:37,400 Speaker 1: related to technical analysis. So if you were all interested 23 00:01:37,400 --> 00:01:40,880 Speaker 1: in charts, in in investing, in trading, if you want 24 00:01:40,920 --> 00:01:43,720 Speaker 1: to know how some of the sausage is made on 25 00:01:43,760 --> 00:01:47,040 Speaker 1: the technical side, UH, you can't do much better than 26 00:01:47,760 --> 00:01:52,760 Speaker 1: John Rokee. So, with no further ado, my conversation with 27 00:01:52,880 --> 00:01:59,000 Speaker 1: John Roke. This is Masters in Business with Barry Ridholtz 28 00:01:59,040 --> 00:02:03,559 Speaker 1: on Boomberg Video. My special guest today is John Roke. 29 00:02:03,920 --> 00:02:08,440 Speaker 1: He is a technician extraordinaire and spent the first twenty 30 00:02:08,440 --> 00:02:11,760 Speaker 1: one years of his career as a south side analyst 31 00:02:12,240 --> 00:02:16,320 Speaker 1: before being recruited to the buy side by UH George 32 00:02:16,320 --> 00:02:20,000 Speaker 1: Soros UH and his hedge funds UH. He spent five 33 00:02:20,080 --> 00:02:23,399 Speaker 1: years at Lehman Brothers, about a decade at the Texas 34 00:02:23,440 --> 00:02:27,280 Speaker 1: BLI Schroeder, a few years at w JB Capital before 35 00:02:27,320 --> 00:02:32,480 Speaker 1: he ended up with Soros. He is now let's call it, 36 00:02:32,560 --> 00:02:37,160 Speaker 1: managing director and chief market strategist at a sorrow seated 37 00:02:37,200 --> 00:02:42,120 Speaker 1: hedge fund called Key Square Capital Management. John Roke, Welcome 38 00:02:42,160 --> 00:02:44,640 Speaker 1: to Bloomberg. Thanks Barry. Pleasure to be here. So you 39 00:02:44,680 --> 00:02:47,360 Speaker 1: and I know each other for for some time. I 40 00:02:47,400 --> 00:02:51,840 Speaker 1: was always a fan of getting your research. UM, let's 41 00:02:51,919 --> 00:02:54,239 Speaker 1: talk a little bit about what you do and how 42 00:02:54,320 --> 00:02:57,280 Speaker 1: you do it. H you were on the South Side 43 00:02:57,320 --> 00:03:01,720 Speaker 1: for over twenty years. Most of what I know about 44 00:03:01,720 --> 00:03:05,440 Speaker 1: your work is that you were U technician, a chart reader. 45 00:03:06,080 --> 00:03:08,360 Speaker 1: Was that always your career? Did you start out as 46 00:03:08,360 --> 00:03:11,959 Speaker 1: a technician or or how did you eventually evolved to that. 47 00:03:12,840 --> 00:03:16,920 Speaker 1: I finished my NBA fort them University and now called 48 00:03:17,000 --> 00:03:21,000 Speaker 1: the Gabelly School. Uh, And like anybody else who probably 49 00:03:21,000 --> 00:03:24,160 Speaker 1: graduated either with an undergraduate degree in the mid eighties 50 00:03:24,240 --> 00:03:26,240 Speaker 1: or an NBA in the early nineties, you probably wanted 51 00:03:26,240 --> 00:03:29,440 Speaker 1: to work on Wall Street. I found it difficult going. 52 00:03:29,600 --> 00:03:32,040 Speaker 1: I you know, walked around my resume back then, and 53 00:03:32,120 --> 00:03:34,040 Speaker 1: there was very little security in the buildings, so you 54 00:03:34,040 --> 00:03:37,600 Speaker 1: were able to go in and deliver just resume want 55 00:03:37,880 --> 00:03:39,600 Speaker 1: it was. It was a great time. I got to 56 00:03:39,600 --> 00:03:43,640 Speaker 1: meet the Sanford Bernstein just by doing that. Just happenstance. 57 00:03:43,920 --> 00:03:45,840 Speaker 1: And there was an ad in the paper. Like guys 58 00:03:45,880 --> 00:03:47,320 Speaker 1: of our age used to do. We used to look 59 00:03:47,320 --> 00:03:51,840 Speaker 1: at what's in the classified correct and UH, there was 60 00:03:51,880 --> 00:03:55,680 Speaker 1: a job for a an analyst position at Sappian Investment 61 00:03:55,680 --> 00:03:58,560 Speaker 1: Research and place, New York. That's way back when. Uh. 62 00:03:58,720 --> 00:04:01,840 Speaker 1: It certainly is Ken Sappian Uh and his former partner, 63 00:04:01,920 --> 00:04:04,440 Speaker 1: Ken Smiling where top analysts on the street in the seventies, 64 00:04:04,520 --> 00:04:07,680 Speaker 1: and uh he ran a boutique investment shop. I applied 65 00:04:07,720 --> 00:04:09,440 Speaker 1: to him. I sent the resume, a cover letter and 66 00:04:09,440 --> 00:04:12,800 Speaker 1: a copy of my thesis paper, and Ken was kind 67 00:04:12,920 --> 00:04:14,600 Speaker 1: enough to hire me. So you you come out of 68 00:04:14,640 --> 00:04:16,560 Speaker 1: school with an m b A, you start working for 69 00:04:16,600 --> 00:04:21,479 Speaker 1: a boutique research firm. How does that morph into a CMT? 70 00:04:21,600 --> 00:04:24,119 Speaker 1: How does that morph into technicals? Well, to be honest, 71 00:04:24,320 --> 00:04:25,880 Speaker 1: I'm not a CMT, but I'll tell you how it 72 00:04:25,920 --> 00:04:29,599 Speaker 1: morphed into technicals. So Ken saffian Um did a ton 73 00:04:29,640 --> 00:04:31,600 Speaker 1: of economic work, but he also did a ton of 74 00:04:31,640 --> 00:04:34,839 Speaker 1: technical work. In fact, he had a process in the 75 00:04:34,880 --> 00:04:38,560 Speaker 1: late sixties seventies called the dual market principle, where he 76 00:04:38,560 --> 00:04:41,560 Speaker 1: saw the market as being delineated between growth stocks and 77 00:04:41,600 --> 00:04:45,440 Speaker 1: cyclical stocks at different points in an economic cycle. So 78 00:04:45,480 --> 00:04:48,159 Speaker 1: he did a lot of cutting edge technical work, and 79 00:04:48,440 --> 00:04:52,680 Speaker 1: um he allowed me to join in to maintain and 80 00:04:52,680 --> 00:04:56,320 Speaker 1: and create and keep economic UH indicators as well as 81 00:04:56,360 --> 00:04:59,560 Speaker 1: technical indicators. And I think it was sort of Um, 82 00:04:59,600 --> 00:05:01,359 Speaker 1: you know he opened the kimono for lack of a 83 00:05:01,360 --> 00:05:02,960 Speaker 1: better phrase, and I got to see a lot of things. 84 00:05:03,000 --> 00:05:06,920 Speaker 1: I became very interested. So so how did that lead 85 00:05:06,960 --> 00:05:10,720 Speaker 1: to chart? Well, every single day, I know this will 86 00:05:10,760 --> 00:05:13,960 Speaker 1: sound really old school or or dinosaur like, at the 87 00:05:14,040 --> 00:05:15,800 Speaker 1: end of the day, I would print out nine D 88 00:05:16,000 --> 00:05:18,479 Speaker 1: prices from my bloomberg. There was one Bloomberg in the 89 00:05:18,480 --> 00:05:22,320 Speaker 1: whole shop, and I would graph using pencil and a 90 00:05:22,440 --> 00:05:26,280 Speaker 1: ruler and graph paper. Uh, the high low enclosing prices 91 00:05:26,279 --> 00:05:29,080 Speaker 1: for nineties stocks for every day for four years. You 92 00:05:29,120 --> 00:05:31,839 Speaker 1: are you are not the only technician who said that. 93 00:05:31,880 --> 00:05:36,080 Speaker 1: We We've had from Jeff to graft to to Luisia Matta, 94 00:05:36,240 --> 00:05:40,800 Speaker 1: to Paul Desmond to Ralph Akimpora. It seems that this 95 00:05:40,880 --> 00:05:45,120 Speaker 1: generation and the previous generation of people all graft by 96 00:05:45,240 --> 00:05:47,480 Speaker 1: hand in the early days. Well that was the only 97 00:05:47,480 --> 00:05:49,120 Speaker 1: way to do it when it really came down to it. 98 00:05:49,600 --> 00:05:51,840 Speaker 1: The Mansfield chart used to be delivered on a Saturday 99 00:05:51,880 --> 00:05:53,960 Speaker 1: morning to your house, but they were through Thursday prices. 100 00:05:54,120 --> 00:05:56,720 Speaker 1: Explain what that is? That's people so younguns aren't going 101 00:05:56,760 --> 00:05:59,600 Speaker 1: to know. Mansfield was was out of New Jersey. I 102 00:05:59,600 --> 00:06:01,599 Speaker 1: think it was Jersey City, and it was a subscription 103 00:06:01,680 --> 00:06:04,360 Speaker 1: pricing and you sent in your check and you would 104 00:06:04,360 --> 00:06:07,920 Speaker 1: get New York Stock Exchange or nasdac amex charts like 105 00:06:08,320 --> 00:06:11,039 Speaker 1: Giant book would show it was Actually it was almost 106 00:06:11,080 --> 00:06:13,679 Speaker 1: like loose leap paper that you could you could update stuff. 107 00:06:13,720 --> 00:06:16,039 Speaker 1: You would flip through it and they would deliver it on. 108 00:06:18,279 --> 00:06:19,960 Speaker 1: You could put it in a binder, but um, I 109 00:06:20,000 --> 00:06:21,680 Speaker 1: would end up flipping through it, throwing out the ones 110 00:06:21,720 --> 00:06:23,800 Speaker 1: I didn't want, keeping the ones I did, And it 111 00:06:23,880 --> 00:06:25,840 Speaker 1: came and sell a fane paper and some guy would 112 00:06:25,880 --> 00:06:27,840 Speaker 1: drop it off like your newspaper on a Saturday morning 113 00:06:27,839 --> 00:06:30,520 Speaker 1: on your front stoop. If I recall they were located 114 00:06:30,560 --> 00:06:33,240 Speaker 1: in Jersey City, so they could get to the New 115 00:06:33,320 --> 00:06:36,479 Speaker 1: York City people quickly as opposed to where, you know, 116 00:06:36,520 --> 00:06:38,000 Speaker 1: being on the other side of the country. They had 117 00:06:38,279 --> 00:06:40,600 Speaker 1: printed and then drop it off in. It was an 118 00:06:40,600 --> 00:06:43,040 Speaker 1: excellent service. The charts were easy to read. And uh, 119 00:06:43,200 --> 00:06:44,960 Speaker 1: nobody had this sort of stuff at your home, right 120 00:06:45,000 --> 00:06:47,760 Speaker 1: bloom By coming into your house was thin. But you 121 00:06:47,760 --> 00:06:49,600 Speaker 1: didn't have the Internet, you didn't have the computing patter, 122 00:06:49,640 --> 00:06:52,640 Speaker 1: you didn't have anything, right, So and then UH Investors 123 00:06:52,640 --> 00:06:55,400 Speaker 1: Business Daily. You could buy chart books from them. They 124 00:06:55,440 --> 00:06:57,839 Speaker 1: would also be delivered on a weekly basis. That sort 125 00:06:57,839 --> 00:07:00,520 Speaker 1: of took Mansfield and and upgraded a little bit. Uh huh. 126 00:07:00,560 --> 00:07:02,119 Speaker 1: But those were the only ways to do it, really, 127 00:07:02,320 --> 00:07:05,159 Speaker 1: that was it. So at what point did you say, gee, 128 00:07:05,240 --> 00:07:07,520 Speaker 1: I'm a pure technician. I'm not really looking at a 129 00:07:07,520 --> 00:07:12,640 Speaker 1: whole lot else besides technicals. Well, when at Saffian Investment Research, 130 00:07:12,960 --> 00:07:14,920 Speaker 1: I thought that doing it from a technical point of 131 00:07:15,000 --> 00:07:18,119 Speaker 1: view allowed me to see a lot of things pretty 132 00:07:18,200 --> 00:07:21,400 Speaker 1: dawn quickly, rather than focusing on one thing and being 133 00:07:21,480 --> 00:07:24,160 Speaker 1: in depth. And I like the overview aspect of it. 134 00:07:25,000 --> 00:07:28,480 Speaker 1: And at that point, although my thesis paper was on 135 00:07:28,560 --> 00:07:31,160 Speaker 1: kind of peripherals and it was using you know, financial 136 00:07:31,160 --> 00:07:34,040 Speaker 1: statement analysis, I was sort of wholly technical. And I've 137 00:07:34,040 --> 00:07:37,120 Speaker 1: been wholly technical since ever since. So so let's talk 138 00:07:37,160 --> 00:07:40,720 Speaker 1: about technicals a little bit. Um. What is it that 139 00:07:41,480 --> 00:07:46,400 Speaker 1: charts actually measure and why does that work? I think 140 00:07:46,480 --> 00:07:53,080 Speaker 1: charts measure the dynamic between buyers and sellers, supply and demand. 141 00:07:53,680 --> 00:07:57,000 Speaker 1: Now you know you're you're you're a long time market participant, 142 00:07:57,280 --> 00:07:59,080 Speaker 1: and you might say to me, well, John, for every 143 00:07:59,080 --> 00:08:01,280 Speaker 1: buyer there has to be a seller, and I'd say, 144 00:08:01,320 --> 00:08:05,480 Speaker 1: I agree, But technical analysis tells us who's more aggressive, 145 00:08:06,040 --> 00:08:08,480 Speaker 1: the buyer or the seller. And I think that's a 146 00:08:08,600 --> 00:08:11,840 Speaker 1: very important concept. So we might say, yeah, for every buyer, 147 00:08:11,880 --> 00:08:13,600 Speaker 1: there's a seller. Yeah. But if I'm the buyer and 148 00:08:13,640 --> 00:08:15,200 Speaker 1: I want to pay more for it because I really 149 00:08:15,200 --> 00:08:19,200 Speaker 1: think it's going up, that is information that is readily available. 150 00:08:19,560 --> 00:08:22,360 Speaker 1: There may not be a buyer seller at every price. 151 00:08:22,440 --> 00:08:25,520 Speaker 1: That's correct. So that's what determined. That's correct. I mean, 152 00:08:25,680 --> 00:08:27,680 Speaker 1: if you think about it this way, um, you know, 153 00:08:28,120 --> 00:08:30,320 Speaker 1: you might say to me that I'm buying this stock 154 00:08:30,360 --> 00:08:34,560 Speaker 1: because it's cheap, and and I'll say that's true, But 155 00:08:34,640 --> 00:08:37,480 Speaker 1: it doesn't win because it stays cheap, right, It wins 156 00:08:37,520 --> 00:08:40,720 Speaker 1: because by definition, it gets momentum and gets less cheap. 157 00:08:41,520 --> 00:08:43,800 Speaker 1: And and just just because something is cheap doesn't mean 158 00:08:43,840 --> 00:08:47,080 Speaker 1: it's not going to get cheaper. That's correct. I'm Barry Ridults. 159 00:08:47,360 --> 00:08:51,040 Speaker 1: You're listening to Master's in Business on Bloomberg Radio. My 160 00:08:51,120 --> 00:08:55,200 Speaker 1: special guest today is John Roke. He is the master 161 00:08:55,280 --> 00:08:59,080 Speaker 1: technician who previously was working with George Soros. Now he 162 00:08:59,120 --> 00:09:03,440 Speaker 1: works at a sorrow specked hedge fund called Key Square Capital. 163 00:09:03,880 --> 00:09:07,400 Speaker 1: Let's talk a little bit about technicals, and I'm assuming 164 00:09:07,480 --> 00:09:14,120 Speaker 1: the audience is fairly lay person. Explain exactly what technical 165 00:09:14,160 --> 00:09:18,079 Speaker 1: analysis is for the lay person. I think technical analysis 166 00:09:18,200 --> 00:09:23,040 Speaker 1: is about trend It is not about trading. There are 167 00:09:23,040 --> 00:09:25,439 Speaker 1: some people who are really good at trading, but I'm not. 168 00:09:26,160 --> 00:09:29,040 Speaker 1: And I think in the advent of machines at hyper 169 00:09:29,080 --> 00:09:33,560 Speaker 1: speed um, the less we talk about trading, the the 170 00:09:33,679 --> 00:09:36,280 Speaker 1: likely we're going to be more successful at our trend 171 00:09:36,400 --> 00:09:40,480 Speaker 1: following discipline. So I think technicals are about trend. Trend 172 00:09:40,559 --> 00:09:43,440 Speaker 1: is the most is the trend is the least in 173 00:09:43,480 --> 00:09:46,720 Speaker 1: my opinion, understood investment concept, however, because it's very hard 174 00:09:46,760 --> 00:09:49,839 Speaker 1: to identify. So let's let's let's go into trends a 175 00:09:49,920 --> 00:09:52,560 Speaker 1: little bit. I was always taught a trend is you 176 00:09:52,559 --> 00:09:54,320 Speaker 1: you can as if you can draw a straight line 177 00:09:54,360 --> 00:09:58,360 Speaker 1: across three points, you have a trend. Is Is that oversimplifying? No, 178 00:09:58,440 --> 00:10:00,240 Speaker 1: I don't think it's oversimplifying it at all. And how 179 00:10:00,240 --> 00:10:01,640 Speaker 1: many people do you know in a business are willing 180 00:10:01,640 --> 00:10:04,200 Speaker 1: to stick with that trend until it's finished, as long 181 00:10:04,240 --> 00:10:07,120 Speaker 1: as it's going in the same right direction. Richard Russell 182 00:10:07,200 --> 00:10:08,959 Speaker 1: said the most difficult thing in the business is to 183 00:10:09,000 --> 00:10:11,440 Speaker 1: stick with the bull market the entire way through, and 184 00:10:11,480 --> 00:10:13,760 Speaker 1: the second most difficult thing in the business is to 185 00:10:13,800 --> 00:10:16,240 Speaker 1: stay out of a bear market the entire way through. 186 00:10:16,520 --> 00:10:19,080 Speaker 1: So I'd say trend following is pretty darned difficult. Richard 187 00:10:19,160 --> 00:10:21,360 Speaker 1: Russell was pretty ahead of the game with that one. 188 00:10:21,679 --> 00:10:23,360 Speaker 1: So what do you think are some of the bigger 189 00:10:23,400 --> 00:10:29,200 Speaker 1: misconceptions about charts and technical analysis. I think the misconceptions 190 00:10:29,200 --> 00:10:33,760 Speaker 1: are that technical analysis sees all. It may be that 191 00:10:33,800 --> 00:10:37,400 Speaker 1: it does, but no technical analysts sees all that's intriguing. 192 00:10:37,480 --> 00:10:42,400 Speaker 1: So explain the difference between everything being there in price 193 00:10:42,600 --> 00:10:46,920 Speaker 1: and not being able to recognize that from from the charts. Well, 194 00:10:46,960 --> 00:10:48,480 Speaker 1: just to give you an example, when I was at 195 00:10:48,640 --> 00:10:52,760 Speaker 1: Sorrows Fund Management, I surveyed, uh, let's call it twelve 196 00:10:52,880 --> 00:10:58,120 Speaker 1: technical types every week and I asked them buy, sell, 197 00:10:58,400 --> 00:11:03,040 Speaker 1: or neutral on a roster item list, and you'd be 198 00:11:03,040 --> 00:11:05,360 Speaker 1: surprised how many people came back with items that were 199 00:11:05,360 --> 00:11:08,280 Speaker 1: different from the person who had just responded. So you 200 00:11:08,280 --> 00:11:10,400 Speaker 1: could have twelve people responding every week and there would 201 00:11:10,400 --> 00:11:13,400 Speaker 1: be no quorum as to what, let's say, item A 202 00:11:13,640 --> 00:11:16,800 Speaker 1: is doing. And so my former partner, Steve Schaubin at 203 00:11:16,880 --> 00:11:18,960 Speaker 1: Lehmann was fond of saying, it's the singer and not 204 00:11:19,080 --> 00:11:23,760 Speaker 1: the song. Hey, so uh. The naturally leads the next question, 205 00:11:24,200 --> 00:11:26,480 Speaker 1: how much of this is science and how much of 206 00:11:26,559 --> 00:11:29,840 Speaker 1: this is art and and somewhat subjective. I get the 207 00:11:29,880 --> 00:11:32,920 Speaker 1: sense you're implying it's a little of both. I think 208 00:11:32,960 --> 00:11:36,160 Speaker 1: it's a lot of both. So I'm I'm fond of 209 00:11:36,200 --> 00:11:38,400 Speaker 1: this book that was that I read earlier in my career. 210 00:11:38,400 --> 00:11:40,199 Speaker 1: It's it's not a it's not an investment book. It's 211 00:11:40,200 --> 00:11:42,680 Speaker 1: a poker book. It's called Shut Up and Deal. And 212 00:11:42,679 --> 00:11:45,520 Speaker 1: it's written by a guy named Jesse May. Okay, and 213 00:11:45,559 --> 00:11:48,240 Speaker 1: I'm gonna paraphrase it, and I'm going to cuff the comment. 214 00:11:48,320 --> 00:11:51,040 Speaker 1: But in the book he said, when you play poker, 215 00:11:51,480 --> 00:11:55,160 Speaker 1: everybody wants to master the rules, right, when you raise, 216 00:11:55,360 --> 00:11:59,440 Speaker 1: when you fold, right, that's important, he said. But but 217 00:11:59,520 --> 00:12:03,560 Speaker 1: winning it poker is about mastering the luck. And I 218 00:12:03,600 --> 00:12:06,600 Speaker 1: think that's appropriate for our business as well. So so 219 00:12:06,679 --> 00:12:09,280 Speaker 1: I would apply that to your question and say, it's 220 00:12:09,320 --> 00:12:11,760 Speaker 1: a little bit of science, it's a little bit of uh, 221 00:12:11,760 --> 00:12:15,439 Speaker 1: it's a little bit of um poetry, it's it's all 222 00:12:15,480 --> 00:12:19,000 Speaker 1: those things put together. So, so how do we master luck? 223 00:12:19,360 --> 00:12:23,160 Speaker 1: I always assume luck is to some degree random, although 224 00:12:23,200 --> 00:12:26,280 Speaker 1: we've all heard the expression luck is with preparation meets 225 00:12:26,320 --> 00:12:29,760 Speaker 1: opportunity or branch Rickey said, luck is the residue of design, right. 226 00:12:29,760 --> 00:12:32,080 Speaker 1: I mean, the harder I work, the luckier I get. 227 00:12:32,280 --> 00:12:36,760 Speaker 1: All those things are appropriate. I think it is listening 228 00:12:36,800 --> 00:12:42,000 Speaker 1: to the message in the charts and not putting your 229 00:12:42,040 --> 00:12:45,480 Speaker 1: biases into what you think it's telling you. How hard 230 00:12:45,559 --> 00:12:47,560 Speaker 1: is it to keep your biases? I think it's very hard, 231 00:12:47,559 --> 00:12:50,000 Speaker 1: which is why sometimes when I was on the cell side, 232 00:12:50,040 --> 00:12:52,760 Speaker 1: I would send out charts that I would reports entitled 233 00:12:52,800 --> 00:12:55,800 Speaker 1: mystery charts, and I would say, the first person who 234 00:12:55,800 --> 00:12:58,080 Speaker 1: gets this question right, I'll buy him lunch next time 235 00:12:58,120 --> 00:13:00,679 Speaker 1: I'm in there town. And you'd be prize. How many 236 00:13:00,679 --> 00:13:03,280 Speaker 1: people would be quick to respond, and I would put 237 00:13:03,320 --> 00:13:06,439 Speaker 1: the chart, I would put the technical characteristics of it, 238 00:13:06,480 --> 00:13:08,480 Speaker 1: but I would take the title off of it. Huh. 239 00:13:08,559 --> 00:13:11,079 Speaker 1: And I think when people saw it without the title, 240 00:13:11,440 --> 00:13:14,080 Speaker 1: they made a more objective decision than when they saw 241 00:13:14,080 --> 00:13:17,000 Speaker 1: it with the title. And I think that's a good 242 00:13:17,000 --> 00:13:19,560 Speaker 1: way to think about it. So I have a variation 243 00:13:19,640 --> 00:13:23,280 Speaker 1: of that, which I call the indicator. That when you 244 00:13:23,320 --> 00:13:26,800 Speaker 1: would talk about a name with somebody who is on 245 00:13:26,840 --> 00:13:29,160 Speaker 1: the bi side, when you're on the cell side. If 246 00:13:29,200 --> 00:13:31,160 Speaker 1: you would bring up the name and three out of 247 00:13:31,160 --> 00:13:33,679 Speaker 1: four people go, uh, I can't touch that. That's a 248 00:13:33,679 --> 00:13:36,840 Speaker 1: piece of junk. Hey, well guess what if everybody thinks 249 00:13:36,880 --> 00:13:39,679 Speaker 1: that it's probably already in the price and it was 250 00:13:39,720 --> 00:13:42,240 Speaker 1: a little bit of momentum and you have plenty upside there. 251 00:13:42,559 --> 00:13:44,720 Speaker 1: That's that's funny that you you did it by just 252 00:13:44,760 --> 00:13:47,960 Speaker 1: pulling the names off. So when you reveal the names, 253 00:13:48,559 --> 00:13:50,800 Speaker 1: what was generally the response to people who said, this 254 00:13:50,880 --> 00:13:53,800 Speaker 1: chart looks great, I'm excited about this. I think some 255 00:13:54,120 --> 00:13:58,200 Speaker 1: people who had the objectivity would say, oh, well, okay, 256 00:13:58,200 --> 00:13:59,640 Speaker 1: I don't care what the name is. The dawn chart 257 00:13:59,679 --> 00:14:01,720 Speaker 1: looks it must be that the story is pretty good, 258 00:14:02,400 --> 00:14:04,840 Speaker 1: and other people might have been a little bit dismissive 259 00:14:04,880 --> 00:14:07,839 Speaker 1: of it. Oh yeah, okay, but I'm not interested. But 260 00:14:07,960 --> 00:14:12,360 Speaker 1: I think the yeah, and I think the exercise sort 261 00:14:12,360 --> 00:14:15,120 Speaker 1: of was a good exercise to allow them to say, hey, 262 00:14:15,160 --> 00:14:17,920 Speaker 1: there's something there and if we remove our biases, we 263 00:14:17,960 --> 00:14:21,240 Speaker 1: can actually pick up some important information. So tell me 264 00:14:21,240 --> 00:14:23,320 Speaker 1: a little bit about your process. When you're on the 265 00:14:23,360 --> 00:14:27,800 Speaker 1: cell side. What did your daily research consist of and 266 00:14:27,840 --> 00:14:30,560 Speaker 1: how did that change once you moved to the buy side. 267 00:14:31,680 --> 00:14:35,360 Speaker 1: So My process includes trying, and I'm going to emphasize 268 00:14:35,360 --> 00:14:38,960 Speaker 1: the word of trying to monitor or pay attention to 269 00:14:39,600 --> 00:14:44,960 Speaker 1: all sorts of traded prices, bonds, they're corresponding, yields, commodities, 270 00:14:45,000 --> 00:14:49,880 Speaker 1: currency sectors, indexes, stocks across all sorts of time zones. 271 00:14:51,040 --> 00:14:54,520 Speaker 1: And I built some screening tools, some scoring mechanisms that 272 00:14:54,560 --> 00:14:57,720 Speaker 1: helped me do that. And like any other technical person 273 00:14:57,840 --> 00:15:00,200 Speaker 1: or any other chart person, I look at it ton 274 00:15:00,240 --> 00:15:02,920 Speaker 1: of charts, and I've taken that discipline from the cell 275 00:15:03,040 --> 00:15:05,440 Speaker 1: side and I've tried to apply it on the by side. 276 00:15:05,520 --> 00:15:07,800 Speaker 1: So now that you're on the by side, is your 277 00:15:07,800 --> 00:15:11,200 Speaker 1: process very much different? Other than having to travel for 278 00:15:11,280 --> 00:15:14,280 Speaker 1: work and and sell a product? Short of that, is 279 00:15:14,320 --> 00:15:16,920 Speaker 1: the research process still the same? I'd say it's pretty 280 00:15:16,960 --> 00:15:20,640 Speaker 1: much the same. That's that's really, um quite interesting. One 281 00:15:20,640 --> 00:15:23,600 Speaker 1: of the things I loved about when you were on 282 00:15:23,640 --> 00:15:27,720 Speaker 1: the seal side, you're written product, you would you would, 283 00:15:28,360 --> 00:15:31,600 Speaker 1: similar to Ed Hyman, who's an economist, take a chart 284 00:15:31,760 --> 00:15:35,360 Speaker 1: and mark it up by hands. Um. First, where did 285 00:15:35,400 --> 00:15:38,360 Speaker 1: that idea come from? Well, well, I mean you you 286 00:15:38,360 --> 00:15:40,440 Speaker 1: you prefaced it. I mean Ed Hyman taught us all 287 00:15:40,520 --> 00:15:45,080 Speaker 1: that annotating charts simply and clearly really goes a long 288 00:15:45,120 --> 00:15:47,840 Speaker 1: way to making your research more palatable to the people 289 00:15:47,880 --> 00:15:49,720 Speaker 1: who are paying for it. So he's the he's the 290 00:15:49,760 --> 00:15:52,080 Speaker 1: godfather of it. To tell him truth. And you answered 291 00:15:52,120 --> 00:15:55,000 Speaker 1: the second question, which is what's the purpose of right, 292 00:15:55,080 --> 00:15:57,680 Speaker 1: I think it's just so people become familiar with you 293 00:15:58,400 --> 00:16:00,760 Speaker 1: and your research. And I think when people become familiar 294 00:16:00,800 --> 00:16:04,880 Speaker 1: with you, there's a trust aspect that grows. And uh, 295 00:16:04,920 --> 00:16:07,320 Speaker 1: you know when for somebody who was formally selling research. 296 00:16:07,360 --> 00:16:10,560 Speaker 1: I think that's a really important concept to building a business. 297 00:16:10,600 --> 00:16:12,320 Speaker 1: You have to develop a trust aspect with the people 298 00:16:12,320 --> 00:16:14,960 Speaker 1: who are going to pay you commission dollars for your research. 299 00:16:15,400 --> 00:16:19,000 Speaker 1: I'm Barry Rihults. You're listening to Masters in Business on 300 00:16:19,080 --> 00:16:23,000 Speaker 1: Bloomberg Radio. My special guest today is John Roke. And 301 00:16:23,200 --> 00:16:27,040 Speaker 1: you have been working UM for the past couple of 302 00:16:27,120 --> 00:16:32,440 Speaker 1: years for Soros Fund Management, which is George Soros's hedge 303 00:16:32,440 --> 00:16:36,800 Speaker 1: funds UM. What is it like working at such a 304 00:16:36,920 --> 00:16:40,720 Speaker 1: storied firm like that. I'm going to try to create 305 00:16:40,760 --> 00:16:43,240 Speaker 1: a metaphor. I think it was to me it was 306 00:16:43,240 --> 00:16:45,520 Speaker 1: sort of like being able to play basketball for University 307 00:16:45,520 --> 00:16:47,520 Speaker 1: of North Carolina Tar Hills. When Dean Smith was a 308 00:16:47,560 --> 00:16:50,280 Speaker 1: coach or playing basketball for the u c l A 309 00:16:50,360 --> 00:16:52,800 Speaker 1: Bruins when John Wooden was a coach. It was sort 310 00:16:52,840 --> 00:16:58,800 Speaker 1: of PhD macro um across the board. Just a true 311 00:16:58,800 --> 00:17:01,640 Speaker 1: honor for me to have been there. So I we 312 00:17:01,720 --> 00:17:04,359 Speaker 1: all recall the story I think was told by a 313 00:17:04,440 --> 00:17:08,800 Speaker 1: Soros's son that when his back started aching started bothering him, 314 00:17:08,840 --> 00:17:11,560 Speaker 1: he basically had to sell something to make the pain 315 00:17:11,600 --> 00:17:14,119 Speaker 1: go away. Any truth to that, Well, I read the 316 00:17:14,160 --> 00:17:17,160 Speaker 1: same story, but I would probably say that was akin 317 00:17:17,240 --> 00:17:21,520 Speaker 1: to a very strong intuition. And um, I think after 318 00:17:21,600 --> 00:17:23,120 Speaker 1: being in the business for a long period of time, 319 00:17:23,160 --> 00:17:27,159 Speaker 1: we all developed intuitions that we uh listened to, you know, 320 00:17:27,320 --> 00:17:29,720 Speaker 1: with with with a very uh, you know, attentive ear. 321 00:17:30,119 --> 00:17:33,840 Speaker 1: So he's known as a big macro trader, famously bet 322 00:17:33,840 --> 00:17:37,159 Speaker 1: against the pound and a number of other really large 323 00:17:37,240 --> 00:17:41,080 Speaker 1: macro bets. How does a technician fit into a shop 324 00:17:41,160 --> 00:17:45,160 Speaker 1: like that that, at least publicly seems to be so 325 00:17:45,960 --> 00:17:50,119 Speaker 1: macro event driven. I actually think it's a natural that 326 00:17:50,240 --> 00:17:55,000 Speaker 1: macro and technical analysis are complimentary, uh. In my opinion. 327 00:17:55,480 --> 00:17:57,359 Speaker 1: One of my favorite books in the business is a 328 00:17:57,359 --> 00:18:00,400 Speaker 1: book entitled More Money Than God, which is written by 329 00:18:00,400 --> 00:18:05,280 Speaker 1: Sebastian Mallaby, and in it you read about all of 330 00:18:05,280 --> 00:18:08,119 Speaker 1: the storied hedge funds and about guys in our business 331 00:18:08,160 --> 00:18:10,960 Speaker 1: whose faces are on the mount rushmore of investing, and 332 00:18:11,000 --> 00:18:15,399 Speaker 1: you realize just how important technical analysis is, was, or 333 00:18:15,520 --> 00:18:18,159 Speaker 1: is to their process. I think it's just a natural 334 00:18:18,400 --> 00:18:21,520 Speaker 1: and uh, it wasn't a shock to me, not a 335 00:18:21,560 --> 00:18:25,040 Speaker 1: shock at all. It wasn't a pretty consistent Um. It's 336 00:18:25,040 --> 00:18:28,480 Speaker 1: funny Malaby just put out the book on Greenspan, which 337 00:18:28,520 --> 00:18:31,240 Speaker 1: I haven't gotten to, but I have more money than 338 00:18:31,280 --> 00:18:33,200 Speaker 1: God at home, and it was it's one of those 339 00:18:33,240 --> 00:18:35,600 Speaker 1: things that's on my short list that I'm that I'm 340 00:18:35,600 --> 00:18:39,119 Speaker 1: going to get to. UM. So you move from the 341 00:18:39,119 --> 00:18:41,840 Speaker 1: cell side to the by side. When you were on 342 00:18:41,880 --> 00:18:44,720 Speaker 1: the cell side, you were very much a public figure, 343 00:18:44,840 --> 00:18:47,560 Speaker 1: used to do conferences, in television everything. You go to 344 00:18:47,600 --> 00:18:50,639 Speaker 1: the buy side and its radio silence. What was that 345 00:18:50,720 --> 00:18:54,280 Speaker 1: transition like? Was it was it relaxing to kind of 346 00:18:54,280 --> 00:18:56,480 Speaker 1: get out of the public eye or did you miss 347 00:18:56,480 --> 00:18:59,720 Speaker 1: a little of the back and forth give and take. UM. Well, 348 00:18:59,800 --> 00:19:02,040 Speaker 1: I I gotta tell you, for twenty years of of 349 00:19:02,240 --> 00:19:05,040 Speaker 1: doing shows like this with people like you, there are 350 00:19:05,119 --> 00:19:08,800 Speaker 1: no shows. It's very nice or or traveling to market 351 00:19:08,840 --> 00:19:10,840 Speaker 1: my product was a was a great thrill being on 352 00:19:10,880 --> 00:19:14,119 Speaker 1: Wall Street Week with Lewis Ruth Keiser was Uh, you know, 353 00:19:14,280 --> 00:19:16,040 Speaker 1: one of a bucket list kind of thing to do. 354 00:19:16,119 --> 00:19:18,920 Speaker 1: But I'm equally happy being on the buy side, and 355 00:19:19,240 --> 00:19:22,560 Speaker 1: I put all my energy and emphasis into putting out 356 00:19:22,600 --> 00:19:24,240 Speaker 1: product that I think is going to help Key Square 357 00:19:24,280 --> 00:19:27,520 Speaker 1: Capital Management. So when you say put out products, I'm 358 00:19:27,560 --> 00:19:31,359 Speaker 1: assuming there's an investment committee you're participating in that, or 359 00:19:31,640 --> 00:19:36,560 Speaker 1: there's some dialogue back and forth. How is advising on 360 00:19:36,680 --> 00:19:42,600 Speaker 1: deploying capital different then selling a commission transaction or or 361 00:19:42,720 --> 00:19:45,440 Speaker 1: is it not different? I think an idea is an 362 00:19:45,440 --> 00:19:48,359 Speaker 1: idea irrespective of which side of the business you're on. 363 00:19:48,960 --> 00:19:52,080 Speaker 1: And I think the person that you're speaking to uh, 364 00:19:52,119 --> 00:19:54,200 Speaker 1: and I happen to be speaking to a person who 365 00:19:54,280 --> 00:19:57,719 Speaker 1: is uh intellectually open. His name is Scott Bessant and 366 00:19:58,040 --> 00:20:01,520 Speaker 1: always willing to listen to an idea. And and because 367 00:20:01,560 --> 00:20:03,600 Speaker 1: he's like that, it gives me confidence to continue to 368 00:20:03,640 --> 00:20:06,560 Speaker 1: present those ideas. It's sort of like, uh, when you're 369 00:20:06,560 --> 00:20:08,040 Speaker 1: on the cell side and you have a client that 370 00:20:08,080 --> 00:20:11,359 Speaker 1: you get along with really well, you'll call that person 371 00:20:12,040 --> 00:20:14,720 Speaker 1: all the time and you'll show that person all of 372 00:20:14,760 --> 00:20:18,800 Speaker 1: your ideas because they're they're willing recipients of those ideas. 373 00:20:18,880 --> 00:20:21,440 Speaker 1: And some of your clients when you're on when on 374 00:20:21,600 --> 00:20:25,520 Speaker 1: being on the cell side, were probably less um receptive. 375 00:20:25,600 --> 00:20:27,960 Speaker 1: Receptive is a good word, and so I'm just I've 376 00:20:28,000 --> 00:20:30,440 Speaker 1: been lucky that the the gentleman I'm working with now 377 00:20:30,440 --> 00:20:33,639 Speaker 1: and have worked with over five years is receptive to 378 00:20:33,760 --> 00:20:36,920 Speaker 1: ideas and intellectually open and uh and willing to listen 379 00:20:36,920 --> 00:20:39,720 Speaker 1: to my my, my imagination. So, Scott Besson, if the 380 00:20:39,920 --> 00:20:43,199 Speaker 1: I recall the name correctly formally c I O of 381 00:20:43,240 --> 00:20:47,639 Speaker 1: Soros Fund Management, is that right? And I also recall 382 00:20:47,720 --> 00:20:50,840 Speaker 1: you saying he's the person who recruited you to work 383 00:20:50,840 --> 00:20:53,480 Speaker 1: it with Sorows. That's exactly right. So I have to 384 00:20:53,520 --> 00:20:58,080 Speaker 1: assume that he is a heavy hitter running Soros is money. 385 00:20:58,119 --> 00:21:02,600 Speaker 1: That's a fairly substantial. And is it the same sort 386 00:21:02,640 --> 00:21:05,640 Speaker 1: of investment process at Key Square that it was at 387 00:21:05,920 --> 00:21:08,680 Speaker 1: Sorrows or is it a little different? You know, soroces 388 00:21:08,760 --> 00:21:12,440 Speaker 1: now mostly running his own money, if I'm correct, mostly 389 00:21:13,040 --> 00:21:17,240 Speaker 1: um the family office family office, as opposed to Key Square, 390 00:21:17,240 --> 00:21:20,280 Speaker 1: whereas it's a lot of outside I think it is 391 00:21:20,280 --> 00:21:22,640 Speaker 1: a macro focus fund, and from that point of view, 392 00:21:23,000 --> 00:21:26,280 Speaker 1: UH it has a similar focus. My special guest today 393 00:21:26,480 --> 00:21:30,880 Speaker 1: is John Roke. He is a technician UH currently working 394 00:21:31,000 --> 00:21:34,360 Speaker 1: for key Square Capital, which is a hedge fund seated 395 00:21:34,400 --> 00:21:37,399 Speaker 1: by George Soros. He worked on the sealth side and 396 00:21:37,480 --> 00:21:41,159 Speaker 1: a number of storied shops, including Lehman Brothers UH for 397 00:21:41,240 --> 00:21:45,359 Speaker 1: many years before going to work at Soros Fund Management. 398 00:21:45,760 --> 00:21:49,600 Speaker 1: Let's let's talk a little bit about your approach. You 399 00:21:49,720 --> 00:21:52,399 Speaker 1: do some things that I find to be really interesting 400 00:21:52,800 --> 00:21:54,800 Speaker 1: that I don't see a lot of other people doing. 401 00:21:55,359 --> 00:22:00,200 Speaker 1: For example, I I've noticed how you calculate market up 402 00:22:00,240 --> 00:22:04,640 Speaker 1: of sector and then put it against the SMP. Tell 403 00:22:04,720 --> 00:22:08,920 Speaker 1: us what that actually accomplishes and how you began doing 404 00:22:08,960 --> 00:22:12,480 Speaker 1: that sort of analysis. Okay, so all credit goes to 405 00:22:12,520 --> 00:22:14,480 Speaker 1: a former client of mine by the name of Bob Rosette, 406 00:22:14,480 --> 00:22:16,920 Speaker 1: who was at Morgan Stanley as a management at the 407 00:22:16,960 --> 00:22:20,439 Speaker 1: time Organ Stanley Capital Management and UH. He was a 408 00:22:20,560 --> 00:22:25,000 Speaker 1: very technically focused guy, although a fundamental guy, but very 409 00:22:25,040 --> 00:22:27,399 Speaker 1: technically focused. And one day he said to me, you know, 410 00:22:27,440 --> 00:22:29,199 Speaker 1: I have some data that might be of interest to you, 411 00:22:29,480 --> 00:22:31,240 Speaker 1: and he shared the data with me, which was sort 412 00:22:31,280 --> 00:22:34,000 Speaker 1: of like giving me the keys to the Kingdom. How 413 00:22:34,040 --> 00:22:37,400 Speaker 1: long ago this? Gosh, this was in the nineties. Really, yeah, 414 00:22:37,440 --> 00:22:39,200 Speaker 1: this was in the mid nineties. So he says, here's 415 00:22:39,240 --> 00:22:41,760 Speaker 1: the data showing take take the cap of each sector 416 00:22:42,280 --> 00:22:45,240 Speaker 1: versus the total capitalization, and do it on a relative 417 00:22:45,240 --> 00:22:47,399 Speaker 1: market cap basis. That's right, as I present to the SMP, 418 00:22:48,080 --> 00:22:50,640 Speaker 1: and I thought that was I mean, he really opened 419 00:22:50,680 --> 00:22:53,280 Speaker 1: my eyes to a section of the market that I 420 00:22:53,320 --> 00:22:56,040 Speaker 1: was formerly not aware of or how to use it 421 00:22:56,080 --> 00:22:59,000 Speaker 1: in an in an analytical sense, and so I used 422 00:22:59,000 --> 00:23:03,200 Speaker 1: it to great success s i'll say polite, to some success. Um. 423 00:23:03,240 --> 00:23:06,919 Speaker 1: In two particular instances after that. One of them was 424 00:23:07,200 --> 00:23:11,920 Speaker 1: as Tech was making its apotheosis in late and early 425 00:23:11,960 --> 00:23:15,439 Speaker 1: two thousand and Tech had grown to be about a 426 00:23:15,560 --> 00:23:18,440 Speaker 1: third of the weight of the SMP five hundred. Really, 427 00:23:18,480 --> 00:23:21,840 Speaker 1: that's a market relative market cap basis. And when it 428 00:23:21,920 --> 00:23:24,400 Speaker 1: first cracked, I knew that Icarus had flown too close 429 00:23:24,440 --> 00:23:26,600 Speaker 1: to the sun, and I knew that we were going 430 00:23:26,640 --> 00:23:29,040 Speaker 1: to have a very painful bear market and it was 431 00:23:29,040 --> 00:23:31,040 Speaker 1: going to be more than a flesh wound, to paraphrase 432 00:23:31,080 --> 00:23:34,560 Speaker 1: the black knife from Monty python Um. And so I 433 00:23:34,600 --> 00:23:37,720 Speaker 1: thought Tech was going to get destroyed and what's down 434 00:23:38,440 --> 00:23:41,720 Speaker 1: amongst friends? And then in uh in two thousand and six, 435 00:23:42,320 --> 00:23:45,040 Speaker 1: the relative market cap of financials grew to be more 436 00:23:45,080 --> 00:23:48,359 Speaker 1: than of the spire cracked at twenty two and a 437 00:23:48,400 --> 00:23:51,040 Speaker 1: third at twenty two and a percent, and I thought 438 00:23:51,080 --> 00:23:52,800 Speaker 1: that that was going to be really bad because the 439 00:23:52,800 --> 00:23:56,240 Speaker 1: financials not only did they have a big market cap, 440 00:23:56,280 --> 00:23:58,119 Speaker 1: but even a technical guy would probably tell you how 441 00:23:58,119 --> 00:24:00,440 Speaker 1: important they are to the economy to say the least. 442 00:24:00,680 --> 00:24:04,639 Speaker 1: And uh so I used that analysis to tom some 443 00:24:04,760 --> 00:24:07,520 Speaker 1: success at both of those important So when you're looking 444 00:24:07,520 --> 00:24:11,280 Speaker 1: at the cap relative to to the broader index, what 445 00:24:11,480 --> 00:24:14,920 Speaker 1: is that actually informing you other than those instances where 446 00:24:14,920 --> 00:24:17,879 Speaker 1: you're at wild extremes or is that what you're looking for. 447 00:24:18,280 --> 00:24:20,600 Speaker 1: I'm looking for wild extremes, but I'm also looking for 448 00:24:20,760 --> 00:24:24,800 Speaker 1: trends within those relative market caps. Right, Relative market cap 449 00:24:24,800 --> 00:24:27,439 Speaker 1: is sort of a way of saying relative price. And 450 00:24:27,480 --> 00:24:30,320 Speaker 1: if relative market cap continues to steadily move higher, then 451 00:24:30,320 --> 00:24:33,320 Speaker 1: I'm going to figure that the trend for that sector 452 00:24:33,920 --> 00:24:37,560 Speaker 1: is intact, firm, strong, and advancing, and I should be 453 00:24:37,600 --> 00:24:40,640 Speaker 1: looking for stocks in that sector that I should be 454 00:24:41,000 --> 00:24:43,520 Speaker 1: biased towards the upside with. All Right, so let's say 455 00:24:43,560 --> 00:24:46,360 Speaker 1: you find a particular sector you like, how do you 456 00:24:46,440 --> 00:24:50,040 Speaker 1: keep drilling down from there? Do you look at subsectors? 457 00:24:50,080 --> 00:24:52,879 Speaker 1: Do you go right to companies? When you pick a 458 00:24:53,000 --> 00:24:57,440 Speaker 1: random sector that the trend is long, strong, firm, where 459 00:24:57,440 --> 00:24:59,119 Speaker 1: do you go from there? I want to find the 460 00:24:59,119 --> 00:25:01,640 Speaker 1: biggest cap comp and he's in that particular sector. Really, 461 00:25:01,680 --> 00:25:05,440 Speaker 1: why is that? Because for a fund of some size, 462 00:25:06,359 --> 00:25:09,639 Speaker 1: it doesn't make much sense to focus on stocks of 463 00:25:10,080 --> 00:25:13,320 Speaker 1: smaller market capitalizations because it's very difficult to move the needle. 464 00:25:13,960 --> 00:25:16,520 Speaker 1: So I want to focus on the largest market cap 465 00:25:16,560 --> 00:25:19,400 Speaker 1: stocks in a sector that is trending, because I think 466 00:25:19,440 --> 00:25:23,960 Speaker 1: I can get the better longer dated performance from those stocks. Right, 467 00:25:24,000 --> 00:25:26,159 Speaker 1: you can't get enough of a small cap for a 468 00:25:26,160 --> 00:25:28,879 Speaker 1: substantial fund to make any sort of difference, That's right. 469 00:25:29,040 --> 00:25:31,560 Speaker 1: And and the big stocks are always very liquid, and 470 00:25:31,600 --> 00:25:33,320 Speaker 1: I'm sure you could buy as much of that as 471 00:25:33,359 --> 00:25:36,240 Speaker 1: you want. And if you need it to take yourself 472 00:25:36,240 --> 00:25:38,280 Speaker 1: out of a position, you could do it with with 473 00:25:38,280 --> 00:25:42,280 Speaker 1: with little dislocation. That's very interesting. So of late you've 474 00:25:42,320 --> 00:25:46,719 Speaker 1: been somewhat barished on the financials um How important our 475 00:25:46,800 --> 00:25:50,520 Speaker 1: financials to the SMP into the economy. Can we really 476 00:25:50,560 --> 00:25:54,120 Speaker 1: have a bull market without the financials participating well. So 477 00:25:54,320 --> 00:25:57,720 Speaker 1: I'm always going through my process and and always going 478 00:25:57,720 --> 00:26:01,280 Speaker 1: through the Now eleven SMP econom ex sectors, financials are 479 00:26:01,320 --> 00:26:03,800 Speaker 1: one of the eleven. There were formerly ten SMP broke 480 00:26:03,840 --> 00:26:06,639 Speaker 1: out reads from the financials. Now they're eleven. And I 481 00:26:06,720 --> 00:26:09,040 Speaker 1: noticed that during a twenty two month period from December 482 00:26:09,920 --> 00:26:16,160 Speaker 1: through October, the financials had gone through four important setbacks fourteen, 483 00:26:16,240 --> 00:26:18,359 Speaker 1: twenty two, and ten and a half, and they had 484 00:26:18,480 --> 00:26:21,239 Speaker 1: underperformed the SMP during that twenty two month period. So 485 00:26:22,080 --> 00:26:24,960 Speaker 1: to have them as an underweight or to be cautious 486 00:26:25,000 --> 00:26:27,800 Speaker 1: on them probably wasn't such a bad idea. In addition, 487 00:26:27,840 --> 00:26:30,720 Speaker 1: at the same time, European banks and Japanese banks were 488 00:26:31,359 --> 00:26:34,399 Speaker 1: very poor, right, and the only bank group that was 489 00:26:34,480 --> 00:26:38,199 Speaker 1: doing pretty well of G seven markets was Canada. So 490 00:26:38,320 --> 00:26:41,600 Speaker 1: to have avoided financials for that period it wasn't such 491 00:26:41,640 --> 00:26:43,359 Speaker 1: a bad idea. It was only in the last week 492 00:26:43,359 --> 00:26:47,479 Speaker 1: where you really had a tremendous performance post election. That's correct, 493 00:26:47,600 --> 00:26:50,720 Speaker 1: But you know, when you have a geopolitical surprise like that, 494 00:26:50,720 --> 00:26:56,000 Speaker 1: that isn't necessarily going to be reflected in in analysis beforehand, 495 00:26:56,200 --> 00:26:58,719 Speaker 1: everybody's playing because it was just so darn sudden right 496 00:26:59,280 --> 00:27:01,320 Speaker 1: and then and so now how do you look at 497 00:27:01,400 --> 00:27:06,520 Speaker 1: financials today? Has has the recent move change your mind 498 00:27:06,600 --> 00:27:10,399 Speaker 1: or does it look like a temporary spasm. So quite 499 00:27:10,400 --> 00:27:16,320 Speaker 1: recently the uh SMP Diversified Bank Index was above it's 500 00:27:17,640 --> 00:27:20,160 Speaker 1: above it's two D day moving average. I'd say that's 501 00:27:20,160 --> 00:27:23,679 Speaker 1: like an athlete who sprinted a long way very quickly 502 00:27:23,760 --> 00:27:25,440 Speaker 1: in a short period of time. So it's a little 503 00:27:25,440 --> 00:27:27,520 Speaker 1: ahead of itself. This may need to rest, it couldn't 504 00:27:27,520 --> 00:27:29,400 Speaker 1: need to pause, but I would say that the pattern 505 00:27:29,480 --> 00:27:32,919 Speaker 1: that's in there is is a very good technical set up. 506 00:27:33,560 --> 00:27:36,159 Speaker 1: I'd also say, with respect of the financials during the 507 00:27:36,200 --> 00:27:40,119 Speaker 1: period when they were underperforming, UH, I would ask myself 508 00:27:40,240 --> 00:27:42,840 Speaker 1: and my counterparties on the cell side, are we in 509 00:27:42,880 --> 00:27:46,239 Speaker 1: a bull market? And more often than not you'd hear 510 00:27:46,280 --> 00:27:48,560 Speaker 1: people say yes. But during that entire time, the SMP 511 00:27:48,720 --> 00:27:53,000 Speaker 1: was up maybe two or three percent pretty much range. Uh, 512 00:27:53,040 --> 00:27:54,600 Speaker 1: if you were in the fang stocks, it was a 513 00:27:54,600 --> 00:27:57,080 Speaker 1: bull market. But I think if you were in the index, 514 00:27:57,359 --> 00:27:59,600 Speaker 1: you would probably say it wasn't a bull market, but 515 00:27:59,640 --> 00:28:03,560 Speaker 1: it wasn't a bear market either, So just arranged bound market. Look, 516 00:28:03,600 --> 00:28:07,720 Speaker 1: we can't from the lows and O nine to let's 517 00:28:07,720 --> 00:28:12,199 Speaker 1: call it thirteen um market was up two hundred plus percent. 518 00:28:12,680 --> 00:28:14,760 Speaker 1: That's a lot of motion in a real short period 519 00:28:14,800 --> 00:28:17,159 Speaker 1: of time. You have to eventually catch your breath and 520 00:28:17,200 --> 00:28:20,639 Speaker 1: market has to digest those games, I would think so um. So, 521 00:28:20,640 --> 00:28:23,159 Speaker 1: so let me ask you a broader question, which you 522 00:28:23,280 --> 00:28:26,440 Speaker 1: just made me think of. A lot of people say 523 00:28:26,480 --> 00:28:28,840 Speaker 1: this market is long in the tooth because you have 524 00:28:28,920 --> 00:28:33,280 Speaker 1: a nice run from O nine to sixteen. That's seven years. 525 00:28:33,359 --> 00:28:36,880 Speaker 1: But I always learned secular bull markets don't begin until 526 00:28:36,920 --> 00:28:40,720 Speaker 1: you make new highs above the previous highs, and we 527 00:28:40,800 --> 00:28:45,960 Speaker 1: didn't see that happen until So first, do you look 528 00:28:45,960 --> 00:28:49,160 Speaker 1: at the current situation as if we're in a secular 529 00:28:49,200 --> 00:28:52,000 Speaker 1: bull market? And if we are, where would you date 530 00:28:52,040 --> 00:28:55,880 Speaker 1: that too? So I think we've been. There was a 531 00:28:55,960 --> 00:29:00,080 Speaker 1: six sixty six low in two thousand and nine, and 532 00:29:00,320 --> 00:29:03,760 Speaker 1: uh up from oh nine to now. The cumulative return 533 00:29:03,800 --> 00:29:06,800 Speaker 1: would say time and price, you have been in a 534 00:29:06,880 --> 00:29:10,240 Speaker 1: bowl market. But you've got most of that through Let's 535 00:29:10,240 --> 00:29:13,800 Speaker 1: call it the midpoint of two thousand fourteen or the 536 00:29:13,840 --> 00:29:15,920 Speaker 1: autumn of two thousand fourteen, And from the autumn of 537 00:29:15,960 --> 00:29:19,240 Speaker 1: two thousand fourteen to now, you've really marked time by 538 00:29:19,240 --> 00:29:22,960 Speaker 1: going sideways, although it's been difficult and adjective filled. But 539 00:29:23,040 --> 00:29:27,400 Speaker 1: I tend not to think of things secularly or cyclically. 540 00:29:27,520 --> 00:29:29,760 Speaker 1: I tend to think of things, Can I make money 541 00:29:29,800 --> 00:29:31,480 Speaker 1: on the long side? Or can I make money on 542 00:29:31,480 --> 00:29:33,720 Speaker 1: the short side. That's the way I tend to approach things, 543 00:29:33,800 --> 00:29:36,280 Speaker 1: because I don't want to be locked into a viewpoint 544 00:29:36,760 --> 00:29:39,720 Speaker 1: that's really interesting. Over the past two years, has it 545 00:29:39,880 --> 00:29:41,880 Speaker 1: been easier to make money on the long side or 546 00:29:41,920 --> 00:29:45,600 Speaker 1: the short side or none of the above? I think 547 00:29:45,600 --> 00:29:48,440 Speaker 1: it's been. I think it's been equally difficult. I think 548 00:29:48,480 --> 00:29:52,040 Speaker 1: it's been a very difficult period. The market, in my mind, 549 00:29:53,160 --> 00:29:57,920 Speaker 1: has been Uh. The market is driven h E t 550 00:29:58,120 --> 00:30:01,440 Speaker 1: F drive stocks, stocks don't drive t F. And I 551 00:30:01,480 --> 00:30:04,200 Speaker 1: think the market on any given day can do just 552 00:30:04,280 --> 00:30:07,160 Speaker 1: about anything because your algal is an aggressive buyer, and 553 00:30:07,200 --> 00:30:09,520 Speaker 1: then my algal follows your algo, and my algal is 554 00:30:09,520 --> 00:30:12,920 Speaker 1: an aggressive buyer. Um. But it has been exceedingly difficult, 555 00:30:13,400 --> 00:30:16,800 Speaker 1: and UM, I think we're not for the FED pinning 556 00:30:17,080 --> 00:30:21,000 Speaker 1: the FED funds rate where it is. Uh, perhaps the 557 00:30:21,080 --> 00:30:23,160 Speaker 1: environment might be a little bit different. Can can you 558 00:30:23,360 --> 00:30:26,600 Speaker 1: find another period in time and history that's comparable to 559 00:30:26,840 --> 00:30:30,520 Speaker 1: the zero or is this drue unique. I think it's 560 00:30:30,520 --> 00:30:33,400 Speaker 1: truly unique because of the central bank backdrop. That's my 561 00:30:33,760 --> 00:30:37,560 Speaker 1: that's my opinion that that changes, that changes everything. Um, 562 00:30:37,640 --> 00:30:40,480 Speaker 1: we mentioned financials earlier. One of the things I know 563 00:30:40,520 --> 00:30:44,960 Speaker 1: about your prior work. You use JP Morgan as a 564 00:30:45,000 --> 00:30:49,640 Speaker 1: proxy for financials. I suspect that's because it goes back 565 00:30:49,680 --> 00:30:53,000 Speaker 1: in history so long. But why one stock as opposed 566 00:30:53,040 --> 00:30:55,880 Speaker 1: to a group of stocks. Uh So, My former partner 567 00:30:55,920 --> 00:30:58,640 Speaker 1: at Lehman Brother, Steve Showben, taught me about the importance 568 00:30:58,680 --> 00:31:02,240 Speaker 1: of bell Weathers So of time I've tried to find 569 00:31:02,320 --> 00:31:05,800 Speaker 1: and define sector or market bell weathers Now for a 570 00:31:05,800 --> 00:31:08,840 Speaker 1: long time. You'll recall this. Uh, people use General motors. 571 00:31:08,880 --> 00:31:11,480 Speaker 1: As General Motors went, so, so went the market. People 572 00:31:11,560 --> 00:31:14,320 Speaker 1: used IBM for a long time. We Steve Schouben and 573 00:31:14,360 --> 00:31:17,400 Speaker 1: I used General Electric. And then as you went into 574 00:31:17,440 --> 00:31:19,719 Speaker 1: the mid two thousand, City Group was the most important 575 00:31:19,720 --> 00:31:21,840 Speaker 1: stock in the entire world, not just the most pill 576 00:31:21,880 --> 00:31:24,040 Speaker 1: stock in the SMP five hundred. Well, that didn't work 577 00:31:24,080 --> 00:31:26,000 Speaker 1: out too well. Well, it did work out very well 578 00:31:26,040 --> 00:31:29,360 Speaker 1: because when it peaked then you knew that was correct. 579 00:31:29,480 --> 00:31:31,800 Speaker 1: So it didn't work out well for City Group shareholders. 580 00:31:31,800 --> 00:31:33,840 Speaker 1: But if you were paying attention to what City was doing. 581 00:31:33,960 --> 00:31:35,440 Speaker 1: Told you a lot about city, It told you a 582 00:31:35,480 --> 00:31:36,760 Speaker 1: lot about the banks, and it told you a lot 583 00:31:36,760 --> 00:31:38,720 Speaker 1: about the market. So it was an excellent bell weather. 584 00:31:38,880 --> 00:31:41,200 Speaker 1: When did city pink and the peak? And well, it 585 00:31:41,320 --> 00:31:43,920 Speaker 1: was peaking in two thousands six seven, right around the 586 00:31:43,960 --> 00:31:45,960 Speaker 1: time when the financials as a percent of the SMP 587 00:31:46,040 --> 00:31:49,520 Speaker 1: five hundred got to about on a realtive market cap basis. 588 00:31:49,520 --> 00:31:51,880 Speaker 1: So when City rolled over, that was short of all 589 00:31:51,920 --> 00:31:54,920 Speaker 1: she won't And so I use I think JP Morgan 590 00:31:55,000 --> 00:31:58,080 Speaker 1: is a good bell weather, not only for financials but 591 00:31:58,320 --> 00:32:01,360 Speaker 1: for the market as a whole. We've been speaking with 592 00:32:01,480 --> 00:32:05,680 Speaker 1: John Roque. He is the technical strategist at key Square 593 00:32:05,720 --> 00:32:09,560 Speaker 1: Capital Management, backed by George soros Uh. If you enjoy 594 00:32:09,680 --> 00:32:12,560 Speaker 1: this conversation, be sure and check out all our podcast 595 00:32:12,600 --> 00:32:15,720 Speaker 1: extras where we keep the tape rolling and continue chatting 596 00:32:15,760 --> 00:32:19,400 Speaker 1: about all things technical. Be sure and check out my 597 00:32:19,600 --> 00:32:23,200 Speaker 1: daily column at Bloomberg View dot com or follow me 598 00:32:23,480 --> 00:32:27,800 Speaker 1: on Twitter at rid Halts. We love your feedback and comments. 599 00:32:27,960 --> 00:32:31,800 Speaker 1: Be sure to write to us at m IB podcast 600 00:32:32,320 --> 00:32:36,160 Speaker 1: at Bloomberg dot net. I'm Barry rit Halts. You've been 601 00:32:36,200 --> 00:32:40,400 Speaker 1: listening to Masters in Business on Bloomberg Radio, brought to 602 00:32:40,440 --> 00:32:43,560 Speaker 1: you by Bank of America. Merrill Lynch Seeing what others 603 00:32:43,600 --> 00:32:47,360 Speaker 1: have seen, but uncovering what others may not. Global Research 604 00:32:47,440 --> 00:32:50,840 Speaker 1: that helps You Harness disruption voted top global research firm 605 00:32:50,880 --> 00:32:54,800 Speaker 1: five years running. Merrill Lynch, Pierce, Spinner and Smith Incorporated. 606 00:32:55,560 --> 00:32:58,000 Speaker 1: Welcome to the podcast, John, Thank you so much for 607 00:32:58,080 --> 00:33:00,440 Speaker 1: doing this. I'm right, you know. I been a fan 608 00:33:00,480 --> 00:33:02,400 Speaker 1: of you as for forever. I've been reading your stuff 609 00:33:02,400 --> 00:33:05,440 Speaker 1: for a long time, which is not easy to get. 610 00:33:05,680 --> 00:33:09,720 Speaker 1: Your stuff was always hard to track down. Well, thanks, 611 00:33:09,760 --> 00:33:13,680 Speaker 1: I was always horse trading with other people. Hey, you 612 00:33:13,720 --> 00:33:17,160 Speaker 1: get Rokee, get me that. What do you got, I'll 613 00:33:17,160 --> 00:33:18,800 Speaker 1: give you this, You give me that that. You know 614 00:33:18,840 --> 00:33:21,480 Speaker 1: what happens on the so that that went on all 615 00:33:21,480 --> 00:33:24,320 Speaker 1: the time, and it was we were never a client. 616 00:33:24,360 --> 00:33:27,080 Speaker 1: We were never big enough to play in the pond 617 00:33:27,160 --> 00:33:30,120 Speaker 1: where you played. Um, there were a couple of questions 618 00:33:30,160 --> 00:33:32,920 Speaker 1: I didn't get to that I really want to get 619 00:33:32,960 --> 00:33:37,440 Speaker 1: to before we start our usual podcast stuff. Um, why 620 00:33:37,440 --> 00:33:40,080 Speaker 1: don't we jump right into the sports analogy since we 621 00:33:40,080 --> 00:33:43,280 Speaker 1: were just talking about you. You we were off fair. 622 00:33:43,360 --> 00:33:48,640 Speaker 1: We were talking about um, uh, we're talking about listening 623 00:33:48,680 --> 00:33:52,640 Speaker 1: to baseball and joining the metaphor between baseball on the 624 00:33:52,720 --> 00:33:56,840 Speaker 1: radio versus financial television. You use a lot of sports 625 00:33:56,840 --> 00:34:01,120 Speaker 1: analogies in your research. Now, is that because you're sports junkie? 626 00:34:01,240 --> 00:34:05,880 Speaker 1: Or is that because there's a metaphorical parallel between sports 627 00:34:05,880 --> 00:34:10,040 Speaker 1: and investing? Why why all the baseball? In fact, just 628 00:34:10,080 --> 00:34:14,440 Speaker 1: earlier we were talking about um, you know, sorrows fund 629 00:34:14,520 --> 00:34:19,600 Speaker 1: like like the Ruins. So I am a sports junkie, 630 00:34:19,600 --> 00:34:24,480 Speaker 1: but I think that there are metaphorical examples that transfer seamlessly. 631 00:34:24,520 --> 00:34:27,960 Speaker 1: And I'll give you one. So baseball people will tell 632 00:34:27,960 --> 00:34:30,919 Speaker 1: you that Ted Williams is the greatest hitter of all time, 633 00:34:31,680 --> 00:34:34,760 Speaker 1: and uh. He wrote a book entitled The Science of Hitting, 634 00:34:35,680 --> 00:34:38,160 Speaker 1: and one of the chapters in the book is called 635 00:34:38,560 --> 00:34:43,320 Speaker 1: hit according to Your Style, And he relates a story 636 00:34:43,360 --> 00:34:45,360 Speaker 1: that was told to him or or an anecdote that 637 00:34:45,400 --> 00:34:48,719 Speaker 1: was told to him by Rogers Hornsby Rogers Roger with 638 00:34:48,760 --> 00:34:51,400 Speaker 1: an s right Rogers Hornsby, who was the greatest right 639 00:34:51,440 --> 00:34:53,439 Speaker 1: handed hitter of all time. He's the last right handed 640 00:34:53,520 --> 00:34:56,560 Speaker 1: hitter to hit four hundred, and he actually averaged four 641 00:34:56,680 --> 00:35:00,200 Speaker 1: hundred over five seasons. Really the only guy, a guy 642 00:35:00,280 --> 00:35:04,320 Speaker 1: major do that. He said that Williams that the single 643 00:35:04,360 --> 00:35:06,680 Speaker 1: most important thing for a hitter was to get a 644 00:35:06,760 --> 00:35:10,200 Speaker 1: good ball to hit, in other words, to swing it strikes. 645 00:35:10,920 --> 00:35:13,320 Speaker 1: And I think the same thing can be applied to stocks, 646 00:35:13,320 --> 00:35:16,440 Speaker 1: for a example, you have to hit according to your 647 00:35:16,480 --> 00:35:19,759 Speaker 1: style and not swing its stocks that are out of 648 00:35:19,800 --> 00:35:22,640 Speaker 1: your strike zone. And I think that increases your chance 649 00:35:22,640 --> 00:35:26,920 Speaker 1: of winning. Makes makes perfect sense. You've seen the Buffett 650 00:35:27,200 --> 00:35:31,400 Speaker 1: um book that he recommended. So Warren Buffett recommended the 651 00:35:31,440 --> 00:35:35,680 Speaker 1: Ted Williams book. And there's a graphic in the Ted 652 00:35:35,719 --> 00:35:40,360 Speaker 1: Williams famous of the strike zone, and he somehow figured 653 00:35:40,400 --> 00:35:43,440 Speaker 1: out so I think it was like seven balls across 654 00:35:43,840 --> 00:35:45,920 Speaker 1: the top of the strikes because the plate is seventeen 655 00:35:45,920 --> 00:35:49,840 Speaker 1: inches right, so it's seven withs and sixteen or he 656 00:35:49,880 --> 00:35:51,960 Speaker 1: was about six three right. So he figured out the 657 00:35:51,960 --> 00:35:57,480 Speaker 1: exact strike zone and then somehow calculated his hitting percentage 658 00:35:57,640 --> 00:36:02,160 Speaker 1: of each and every which he was a quant before 659 00:36:02,239 --> 00:36:06,319 Speaker 1: any money years before money ball was ever conceived. He 660 00:36:06,840 --> 00:36:13,440 Speaker 1: applied probabilities to hitting. Really, people don't understand how brilliant 661 00:36:13,520 --> 00:36:17,920 Speaker 1: he was as a mathematical hitter, not just as a 662 00:36:17,920 --> 00:36:23,040 Speaker 1: big He was cerebral and that's fascinating to me. Yeah, 663 00:36:23,200 --> 00:36:25,760 Speaker 1: I I read the book when I was a player. 664 00:36:25,880 --> 00:36:28,160 Speaker 1: I bought the book and tried to help my sons 665 00:36:28,239 --> 00:36:31,040 Speaker 1: with it when they were players, And um, I tried 666 00:36:31,080 --> 00:36:33,800 Speaker 1: to use some of his methods when I was coaching. 667 00:36:34,560 --> 00:36:37,919 Speaker 1: UM and I would just tell my kids, if it's good, 668 00:36:37,960 --> 00:36:41,040 Speaker 1: you've got to be swinging, and if you're in certain counts, 669 00:36:41,080 --> 00:36:44,080 Speaker 1: you need to be a hitter. You can't be taken pitches. 670 00:36:44,640 --> 00:36:48,320 Speaker 1: And I know it's inappropriate or not, it's not the 671 00:36:48,400 --> 00:36:51,600 Speaker 1: right way to say it, but uh to little league players. 672 00:36:51,600 --> 00:36:53,480 Speaker 1: But nobody ever went to the Hall of Fame being 673 00:36:53,480 --> 00:36:55,879 Speaker 1: a good walker. You got there by being a good hitter. 674 00:36:56,480 --> 00:36:58,520 Speaker 1: So you play where did you play ball? I played 675 00:36:58,520 --> 00:36:59,920 Speaker 1: in high school, I played a little while in colle 676 00:37:00,040 --> 00:37:02,200 Speaker 1: leg and I played some semi pro baseballs. Oh really, 677 00:37:02,480 --> 00:37:05,120 Speaker 1: I was a picturer and I now have the torn 678 00:37:05,280 --> 00:37:11,160 Speaker 1: rotator cuff. Um, no, not anymore. But um, I was accurate. 679 00:37:11,200 --> 00:37:13,279 Speaker 1: I was fast. I had no breaking pitch and that's 680 00:37:13,280 --> 00:37:16,200 Speaker 1: why nothing after high school. Wait, you're supposed to make 681 00:37:16,239 --> 00:37:18,360 Speaker 1: the bull dry. I don't throw that way. I just 682 00:37:18,400 --> 00:37:21,040 Speaker 1: throw it as hard as I can. So, um, that's 683 00:37:21,080 --> 00:37:24,759 Speaker 1: really and I was deadly accurate. That was the yeah, 684 00:37:24,880 --> 00:37:27,799 Speaker 1: well corner, A little little chin music. Whatever you had 685 00:37:27,840 --> 00:37:31,160 Speaker 1: to do. Um, So you played a semipro, That's that's great. 686 00:37:31,239 --> 00:37:35,560 Speaker 1: How How what's amazing at that level? And we'll talk 687 00:37:35,600 --> 00:37:38,520 Speaker 1: about a little math. Is you get one more hit 688 00:37:38,760 --> 00:37:42,600 Speaker 1: a week and statistically you're just so far ahead of 689 00:37:42,680 --> 00:37:47,000 Speaker 1: everybody else. That's correct. The level of competition is really amazing. 690 00:37:47,120 --> 00:37:49,400 Speaker 1: That's correct. If you strike out one less time a week, 691 00:37:49,440 --> 00:37:52,440 Speaker 1: it's a big deal, huge, just a huge. Um. Have 692 00:37:52,600 --> 00:37:59,120 Speaker 1: you read much of Michael Mobison's work on luck and skill? Um? So, 693 00:37:59,200 --> 00:38:02,279 Speaker 1: I have been. I have been able to sit in 694 00:38:02,360 --> 00:38:04,719 Speaker 1: on some of his presentations. So the answer to that 695 00:38:04,800 --> 00:38:06,399 Speaker 1: question is yes. I think he does some really good 696 00:38:06,400 --> 00:38:11,279 Speaker 1: work about that. The book um The Success Equations, Separating 697 00:38:11,360 --> 00:38:15,000 Speaker 1: Luck from Skill and Sports Investing in Business. The irony 698 00:38:15,160 --> 00:38:18,080 Speaker 1: is that the skill level is so high in professional 699 00:38:18,120 --> 00:38:21,520 Speaker 1: sports that it turns out that luck matters a whole 700 00:38:21,520 --> 00:38:25,320 Speaker 1: lot more than it does amongst amateurs. Yeah, without a doubt. 701 00:38:25,760 --> 00:38:27,719 Speaker 1: And and and they're playing a game in their head 702 00:38:27,800 --> 00:38:30,239 Speaker 1: all the time, right, which is why. And I've said 703 00:38:30,239 --> 00:38:32,359 Speaker 1: to my son, I said to my son's when during 704 00:38:32,360 --> 00:38:34,480 Speaker 1: the playoffs in the World Series, if you really watched 705 00:38:34,560 --> 00:38:39,120 Speaker 1: baseball closely, you'll watch that major League Baseball players swing 706 00:38:39,120 --> 00:38:42,600 Speaker 1: at pitches, not necessarily at strikes. And by that I 707 00:38:42,640 --> 00:38:44,960 Speaker 1: mean you'll you'll be watching a game and you'll see 708 00:38:44,960 --> 00:38:46,440 Speaker 1: a guy take a pitch right down the middle, and 709 00:38:46,480 --> 00:38:48,399 Speaker 1: you might say to yourself, how could he not swing 710 00:38:48,400 --> 00:38:50,400 Speaker 1: at that? And the reason he wasn't swinging at is 711 00:38:50,400 --> 00:38:53,480 Speaker 1: because he wasn't guessing that on that pitch. You know, 712 00:38:53,520 --> 00:38:55,040 Speaker 1: he got a fastball. He may have been looking for 713 00:38:55,040 --> 00:38:56,680 Speaker 1: a curveball. He got a curveball. He may have been 714 00:38:56,680 --> 00:38:59,640 Speaker 1: looking for a fastball. So they're they're guessing right, and 715 00:38:59,640 --> 00:39:02,799 Speaker 1: they're in a mental game, a calculation game, or a 716 00:39:02,840 --> 00:39:06,240 Speaker 1: game of probability versus the picture. And that's the reason 717 00:39:06,320 --> 00:39:09,439 Speaker 1: that you know at that level that sometimes you would say, 718 00:39:09,480 --> 00:39:11,360 Speaker 1: you're a younger guy, you'd say you have to be 719 00:39:11,400 --> 00:39:14,520 Speaker 1: swinging in that situation. And sometimes they're not swinging because 720 00:39:14,520 --> 00:39:17,880 Speaker 1: they're not guessing at that pitch. You know, Um the 721 00:39:17,920 --> 00:39:21,920 Speaker 1: coach of the Giants, Um who departed a couple of 722 00:39:21,960 --> 00:39:25,879 Speaker 1: years of right, Tom Coughlin. I'm not a sports book fan, 723 00:39:26,560 --> 00:39:29,239 Speaker 1: but he wrote a book called Earned the Right to Win, 724 00:39:30,120 --> 00:39:35,000 Speaker 1: and he talks about in the book the research they 725 00:39:35,000 --> 00:39:37,920 Speaker 1: were doing. All right, what is this opposition team. What 726 00:39:37,960 --> 00:39:41,160 Speaker 1: do they do on on you know, second and long? 727 00:39:41,239 --> 00:39:43,040 Speaker 1: What do they do on third and short? What are 728 00:39:43,040 --> 00:39:45,879 Speaker 1: they And then every player would have to learn that, 729 00:39:46,239 --> 00:39:49,560 Speaker 1: and some of the players really um pushed back on it. 730 00:39:49,560 --> 00:39:52,399 Speaker 1: And I'm trying to remember which was its straight hand 731 00:39:52,400 --> 00:39:56,200 Speaker 1: it was it was one of their um defensive backs 732 00:39:56,600 --> 00:39:59,319 Speaker 1: used to complain about it all the time. And then 733 00:39:59,480 --> 00:40:02,239 Speaker 1: years la he's playing for another team and it's a 734 00:40:02,360 --> 00:40:06,040 Speaker 1: bowl game situation and it's third and short and he says, 735 00:40:06,400 --> 00:40:08,480 Speaker 1: all right, what do these guys do on third and short? 736 00:40:08,800 --> 00:40:11,319 Speaker 1: And he realizes I don't have this information? Oh my god. 737 00:40:11,440 --> 00:40:14,640 Speaker 1: Cochlin was right. You need to have that prep as 738 00:40:14,640 --> 00:40:15,920 Speaker 1: big as a pain in the neck. It was as 739 00:40:15,960 --> 00:40:20,000 Speaker 1: it was. It was a decided advantage. And what you're 740 00:40:20,000 --> 00:40:23,839 Speaker 1: describing with the batters very similar there. If they know 741 00:40:23,920 --> 00:40:26,560 Speaker 1: the picture, if they've studied him, they know their tendency, 742 00:40:27,080 --> 00:40:30,360 Speaker 1: they're making a reasonable guess. All right, with three and 743 00:40:30,480 --> 00:40:32,640 Speaker 1: third and one. He tends to throw a breaking bowl 744 00:40:32,680 --> 00:40:36,120 Speaker 1: outside I'm looking for I like to hit those. It's 745 00:40:36,160 --> 00:40:38,279 Speaker 1: really fascinating the whole And I think the same thing 746 00:40:38,360 --> 00:40:40,279 Speaker 1: applies to stocks, right, You want to you want to 747 00:40:40,320 --> 00:40:42,880 Speaker 1: find a stock that fits your style. What's the tendency 748 00:40:43,520 --> 00:40:47,160 Speaker 1: of a stock to do something after it looks like 749 00:40:47,480 --> 00:40:51,480 Speaker 1: it looks now? And so over time you you recognize 750 00:40:52,000 --> 00:40:55,239 Speaker 1: that a pattern looks like it does now and that 751 00:40:55,400 --> 00:40:59,880 Speaker 1: usually is followed by some reaction. And that's because you 752 00:41:00,080 --> 00:41:02,120 Speaker 1: tend to understand and you tend to have seen so 753 00:41:02,160 --> 00:41:04,920 Speaker 1: many of them over time, you you tend to I 754 00:41:04,920 --> 00:41:07,320 Speaker 1: don't want to say foretell, but expect a certain result. 755 00:41:07,400 --> 00:41:09,520 Speaker 1: But that's why you look at hundreds of charts tonight. 756 00:41:09,600 --> 00:41:12,000 Speaker 1: You do that for twenty years, and eventually you really 757 00:41:12,040 --> 00:41:14,919 Speaker 1: get a feel for Right, I've seen this pattern before, 758 00:41:14,960 --> 00:41:18,279 Speaker 1: and I know what tends to happen here exactly. What 759 00:41:18,280 --> 00:41:21,719 Speaker 1: what other sports metaphors apply to markets and invest there. 760 00:41:22,120 --> 00:41:24,640 Speaker 1: I really think baseball is is about as good as 761 00:41:24,640 --> 00:41:27,480 Speaker 1: there is. Um we could you know, we could go 762 00:41:27,520 --> 00:41:30,000 Speaker 1: into uh into basketball too, and I think there are 763 00:41:30,000 --> 00:41:32,120 Speaker 1: a lot of a lot of basketball metaphors to where 764 00:41:32,440 --> 00:41:34,759 Speaker 1: and you could see now the teams really want to 765 00:41:34,760 --> 00:41:38,279 Speaker 1: shoot three pointers. They know that you're getting more per 766 00:41:38,280 --> 00:41:40,799 Speaker 1: basket made than you would be when you're shooting a 767 00:41:40,840 --> 00:41:42,840 Speaker 1: two pointer. Right, they want despite the fact that some 768 00:41:42,880 --> 00:41:45,280 Speaker 1: of them might be low percentage shots. But the reward 769 00:41:46,280 --> 00:41:48,719 Speaker 1: is so much greater. And but from the corner, it's 770 00:41:48,719 --> 00:41:51,640 Speaker 1: a really high percentage shots, not that much because it's 771 00:41:52,040 --> 00:41:54,960 Speaker 1: it's it's a it's a higher percentage shot because it's closer, 772 00:41:55,520 --> 00:41:58,120 Speaker 1: but conceivably you're seeing less of the basket. It might 773 00:41:58,120 --> 00:42:00,239 Speaker 1: be thought to be harder when my fall, there was 774 00:42:00,280 --> 00:42:02,680 Speaker 1: a player, you know, when they still had laces on 775 00:42:02,719 --> 00:42:05,160 Speaker 1: basketballs that I would have told you that's a poor 776 00:42:05,280 --> 00:42:08,600 Speaker 1: percentage shot because you're not seeing the entire basketball. You're 777 00:42:08,600 --> 00:42:11,200 Speaker 1: not getting the same deaths exactly just see the rim 778 00:42:11,239 --> 00:42:14,239 Speaker 1: floating exactly right. But if you have a touch and 779 00:42:14,280 --> 00:42:18,319 Speaker 1: if you know where that is, that's your closest three 780 00:42:18,320 --> 00:42:21,160 Speaker 1: point shot you're gonna make. And you see guys like Curry, 781 00:42:21,320 --> 00:42:23,239 Speaker 1: they live in those courts without a doubt. And I 782 00:42:23,280 --> 00:42:25,680 Speaker 1: think as did Michael Jordan when he was shooting and 783 00:42:25,680 --> 00:42:27,600 Speaker 1: and and I think, uh, you know, sort of an 784 00:42:27,600 --> 00:42:32,960 Speaker 1: appropriate football metaphor is that, uh Brady and the Patriots 785 00:42:33,000 --> 00:42:36,040 Speaker 1: is are so successful not because he throws over the 786 00:42:36,040 --> 00:42:38,600 Speaker 1: top to Gronkowski thirty yards down the field every time, 787 00:42:38,600 --> 00:42:41,640 Speaker 1: but because he hits Edelman or amend Ola or when 788 00:42:41,640 --> 00:42:43,360 Speaker 1: they had west Walker, he would hit them in the 789 00:42:43,360 --> 00:42:45,920 Speaker 1: flat for five or six yards, moved down the field, 790 00:42:45,920 --> 00:42:47,719 Speaker 1: moved down the field, and then go over the top 791 00:42:47,760 --> 00:42:50,200 Speaker 1: to Gronkowski, right. But but to set it up so 792 00:42:50,200 --> 00:42:52,480 Speaker 1: that you're you know, you're taking short gains, short gains 793 00:42:52,520 --> 00:42:56,799 Speaker 1: that then you have a lead, you know, the the 794 00:42:56,840 --> 00:42:58,640 Speaker 1: yard is in your favor, and then you could go 795 00:42:58,719 --> 00:43:00,239 Speaker 1: over the top to try to hit you know, a 796 00:43:00,320 --> 00:43:03,200 Speaker 1: mixed matter of home run. Right. Well, you know that 797 00:43:03,200 --> 00:43:07,600 Speaker 1: that's the the interesting thing about football is you're always 798 00:43:08,440 --> 00:43:12,719 Speaker 1: trying to not just use each play to move the 799 00:43:12,719 --> 00:43:16,359 Speaker 1: ball downfield, but each play subsequently sets up a lot 800 00:43:16,440 --> 00:43:18,880 Speaker 1: of play. Are you are Are you throwing long and 801 00:43:18,920 --> 00:43:22,640 Speaker 1: everybody's sitting back, then they're giving you the shorter over 802 00:43:22,680 --> 00:43:25,799 Speaker 1: the chess not check it's checkers, not apart me. It's chess, 803 00:43:25,800 --> 00:43:29,000 Speaker 1: not checkers. As Denzel Washington said to Ethan Hawk in 804 00:43:29,239 --> 00:43:33,840 Speaker 1: training day, it's multiple steps down the road checkers. You know, 805 00:43:33,880 --> 00:43:37,680 Speaker 1: there are some players that have the mental game, have 806 00:43:37,800 --> 00:43:40,399 Speaker 1: the pizzical game, and then have all the tools out 807 00:43:40,440 --> 00:43:42,400 Speaker 1: there to hit. When you look at New England, I 808 00:43:42,400 --> 00:43:46,080 Speaker 1: mean that's really just an embarrassment of riches for a 809 00:43:46,200 --> 00:43:49,399 Speaker 1: quarterback who's smart, who has good field vision and could 810 00:43:49,520 --> 00:43:54,799 Speaker 1: really right. So it's it's it's not a coincidence that 811 00:43:54,880 --> 00:43:57,799 Speaker 1: those guys have, um have been winning as much as 812 00:43:57,800 --> 00:44:01,440 Speaker 1: they have been over the past couple of years. Um, 813 00:44:01,480 --> 00:44:04,680 Speaker 1: So give me a basketball metaphor. So it's the three 814 00:44:04,760 --> 00:44:07,239 Speaker 1: pointer and and what else? What else is a good 815 00:44:07,239 --> 00:44:10,560 Speaker 1: basketball metaphor for investing? You know, I keep coming back. 816 00:44:10,760 --> 00:44:12,160 Speaker 1: I think a good one is. I think a good 817 00:44:12,160 --> 00:44:15,799 Speaker 1: one is is that? Uh So, I watch a lot 818 00:44:15,800 --> 00:44:17,600 Speaker 1: of basketball. I watch a lot of high school basketball. 819 00:44:17,680 --> 00:44:19,759 Speaker 1: My former c y OH coach is a is a 820 00:44:19,840 --> 00:44:22,040 Speaker 1: very school basketball. Watch a lot of high school basketball 821 00:44:22,040 --> 00:44:23,719 Speaker 1: because my former c y O coach is a friend 822 00:44:23,760 --> 00:44:27,600 Speaker 1: of mine is perhaps too. You know, he's a He's 823 00:44:27,640 --> 00:44:30,480 Speaker 1: a Westchester County Hall of Fame basketball coach, and he 824 00:44:30,520 --> 00:44:33,920 Speaker 1: wins about eight percent of his games. And I watched 825 00:44:33,920 --> 00:44:37,839 Speaker 1: the games a lot, and I sometimes I see how 826 00:44:37,880 --> 00:44:40,640 Speaker 1: they're playing or how they're winning, and I wonder, you know, 827 00:44:41,480 --> 00:44:43,920 Speaker 1: whereas sort of hit according to your style style in 828 00:44:43,920 --> 00:44:46,000 Speaker 1: baseball or swing at strikes would be a kin in 829 00:44:46,040 --> 00:44:49,440 Speaker 1: basketball to making your free throws right. Often in a 830 00:44:49,480 --> 00:44:52,040 Speaker 1: high school game, the team that loses is the team 831 00:44:52,040 --> 00:44:54,799 Speaker 1: that shot more poorly from the free throw line than 832 00:44:54,840 --> 00:44:58,640 Speaker 1: their opponents. Real, that's interesting. So we can practice, however 833 00:44:58,680 --> 00:45:03,359 Speaker 1: many offensive se it's our plays that are in my playbook. Um, 834 00:45:03,400 --> 00:45:06,960 Speaker 1: but if our team doesn't hit our free throws, regardless 835 00:45:07,000 --> 00:45:09,719 Speaker 1: of how many offensive plays we have, we're probably not 836 00:45:09,719 --> 00:45:11,840 Speaker 1: going to play that. Well, what do you think about 837 00:45:11,880 --> 00:45:14,000 Speaker 1: the I don't remember it was the high school the 838 00:45:14,040 --> 00:45:18,279 Speaker 1: college coach who every fourth down he doesn't care, he goes, 839 00:45:18,400 --> 00:45:21,399 Speaker 1: he goes. I love the statistics. Yeah, the statistics were great. 840 00:45:21,440 --> 00:45:23,279 Speaker 1: I remember that. Was that the wall a Wall Street 841 00:45:23,360 --> 00:45:25,680 Speaker 1: Journal article or a Times article. I can't remember where 842 00:45:25,680 --> 00:45:27,480 Speaker 1: it was where it was printed, but I did read it, 843 00:45:27,560 --> 00:45:31,279 Speaker 1: and he said, you know, my odds of success, I 844 00:45:31,280 --> 00:45:34,040 Speaker 1: got a third more plays than everybody else. Stop and 845 00:45:34,080 --> 00:45:37,160 Speaker 1: thinking a third more offensive plays if I'm going for 846 00:45:37,239 --> 00:45:39,719 Speaker 1: an on fourth it's right. I remember that. So the 847 00:45:40,239 --> 00:45:44,040 Speaker 1: math behind that, the statistics are really quite fascinating. All right, 848 00:45:44,080 --> 00:45:50,279 Speaker 1: So let's bring this back to UH to technico analysis. UM. 849 00:45:50,320 --> 00:45:55,759 Speaker 1: I took the course, the the course UM with the 850 00:45:55,800 --> 00:45:59,239 Speaker 1: Great Ralph at Kumpora, and one of the things I 851 00:45:59,320 --> 00:46:04,520 Speaker 1: remember from that course was Ralph saying, fundamentals tell you 852 00:46:04,560 --> 00:46:08,920 Speaker 1: what to buy, Technicals tell you when to buy true false, 853 00:46:08,960 --> 00:46:10,239 Speaker 1: What do you think of that. I think it's a 854 00:46:10,239 --> 00:46:13,600 Speaker 1: pretty good tenant. Um. But I'm also very fond of um. 855 00:46:14,320 --> 00:46:17,080 Speaker 1: A tenant that is that was said by I believe 856 00:46:17,120 --> 00:46:20,800 Speaker 1: Paul Tutor Jones. Uh. He said something to the effect 857 00:46:20,800 --> 00:46:26,920 Speaker 1: of price moves first, fundamentals follow, meaning that price moves, 858 00:46:26,960 --> 00:46:30,600 Speaker 1: and then a narrative develops around the price move. So 859 00:46:30,680 --> 00:46:33,040 Speaker 1: I'm not dismissing what Ralph said. I think it's right, 860 00:46:33,080 --> 00:46:35,520 Speaker 1: but I think Paul Tutor Jones is is a little 861 00:46:35,520 --> 00:46:39,399 Speaker 1: bit has a little bit more um. It's a wry observation, uh, 862 00:46:39,440 --> 00:46:43,719 Speaker 1: and probably a little bit more cynical. Um. It's sort 863 00:46:43,719 --> 00:46:46,680 Speaker 1: of you know, stocks moved sharply, especially financials in the 864 00:46:46,760 --> 00:46:51,879 Speaker 1: last week on the Trump election, and now people are 865 00:46:51,920 --> 00:46:56,880 Speaker 1: trying to ascribe what will happen going forward. I'll leave 866 00:46:56,920 --> 00:46:59,359 Speaker 1: those frank, but but it's always an after that. I'll 867 00:46:59,400 --> 00:47:03,080 Speaker 1: leave those sentence to the fundamental guys. But price moved, 868 00:47:03,120 --> 00:47:06,680 Speaker 1: and then here's the reason price moved? Right? Well, what 869 00:47:06,680 --> 00:47:09,400 Speaker 1: good are you doing telling me? Right well? Why weren't 870 00:47:09,400 --> 00:47:12,120 Speaker 1: you giving me this analysis before? I think Palter to 871 00:47:12,200 --> 00:47:14,640 Speaker 1: Jones is uh, you know, line is is pretty appropriate. 872 00:47:14,920 --> 00:47:17,719 Speaker 1: I don't think it's cynical. I think it's human nature. 873 00:47:17,560 --> 00:47:22,320 Speaker 1: We were just discussing this the other day that before this, 874 00:47:22,560 --> 00:47:26,600 Speaker 1: so we can talk about the Clinton Trump election. Before 875 00:47:26,760 --> 00:47:31,120 Speaker 1: Trump won, the story was she has more money, she 876 00:47:31,280 --> 00:47:34,399 Speaker 1: is a better get out the vote ground game, they 877 00:47:34,400 --> 00:47:36,920 Speaker 1: have better analytics. The Trump team is kind of just 878 00:47:37,040 --> 00:47:40,560 Speaker 1: flinging darts and hail Mary's and what have you. And 879 00:47:40,600 --> 00:47:45,800 Speaker 1: then afterwards the narrative completely changed. Hey, their their narrative, 880 00:47:45,960 --> 00:47:50,480 Speaker 1: their analytics. Their analytics turned out to be much better. Um, 881 00:47:50,600 --> 00:47:53,759 Speaker 1: they understood what was going on on the ground in Wisconsin. 882 00:47:54,120 --> 00:47:58,120 Speaker 1: And all these after the fact rationalizations which to be blunts. 883 00:47:58,200 --> 00:48:00,799 Speaker 1: This election could have gone either way. They pretty easy. 884 00:48:01,120 --> 00:48:06,000 Speaker 1: If if the Access Hollywood tape doesn't come out, he 885 00:48:06,320 --> 00:48:10,160 Speaker 1: steam rolls her. If the Comy letter doesn't take place 886 00:48:10,200 --> 00:48:13,360 Speaker 1: in October, she probably beats it. Really, this could have 887 00:48:13,520 --> 00:48:17,160 Speaker 1: easily broken either way, and yet everybody wants to make 888 00:48:17,200 --> 00:48:23,319 Speaker 1: these broad pronouncements after the fact. It's that same exact process. Oh, 889 00:48:23,360 --> 00:48:25,840 Speaker 1: now that we know what happens, let's craft a narrative. 890 00:48:26,280 --> 00:48:28,880 Speaker 1: Let's craft a narrative around that. I find that to 891 00:48:28,960 --> 00:48:34,399 Speaker 1: be um, absolutely fascinating. Um. So, a couple of other 892 00:48:34,480 --> 00:48:40,120 Speaker 1: questions I didn't get to during the regular broadcast portion. Uh. 893 00:48:40,160 --> 00:48:42,960 Speaker 1: We we just touched on on this very lightly when 894 00:48:43,000 --> 00:48:45,680 Speaker 1: when I asked, you know, what attracted you to the 895 00:48:45,680 --> 00:48:50,239 Speaker 1: technical side. Was it the rigor of the discipline, was 896 00:48:50,320 --> 00:48:55,319 Speaker 1: it the did it make sense logically? Um? Was it 897 00:48:55,640 --> 00:48:59,279 Speaker 1: some evidence or data that supported it? What made you say, Oh, 898 00:48:59,360 --> 00:49:01,600 Speaker 1: this is really seems to be the way to go, 899 00:49:01,719 --> 00:49:04,279 Speaker 1: and what I learned as an NBA student may not 900 00:49:04,360 --> 00:49:07,640 Speaker 1: be the best way to buy and sell stocks. I'm 901 00:49:07,640 --> 00:49:09,239 Speaker 1: going to try to answer it like this. Let's say 902 00:49:09,239 --> 00:49:10,799 Speaker 1: that I'm a real estate broker and I call you 903 00:49:10,920 --> 00:49:13,319 Speaker 1: up and I said, hey, Barry, I got a place 904 00:49:13,360 --> 00:49:15,840 Speaker 1: i'd like you to see. What's the first thing you 905 00:49:15,880 --> 00:49:18,480 Speaker 1: say to me? You likely say to me, what does 906 00:49:18,520 --> 00:49:23,720 Speaker 1: it look like? Where is it? That's probably akin to saying, 907 00:49:23,800 --> 00:49:26,960 Speaker 1: what is the Can I look at the chart? If? Um? 908 00:49:27,040 --> 00:49:29,560 Speaker 1: Let's say I had a younger brother and you had 909 00:49:29,600 --> 00:49:32,759 Speaker 1: a younger sister, and we would like them to sort of, 910 00:49:32,800 --> 00:49:34,759 Speaker 1: you know, meet, perhaps they can go out at a date, 911 00:49:35,080 --> 00:49:38,000 Speaker 1: and we introduced the idea to each of them separately. 912 00:49:38,080 --> 00:49:39,759 Speaker 1: What's the first thing that they would say to us? 913 00:49:40,000 --> 00:49:43,080 Speaker 1: What does that person look like? I think it's appropriate 914 00:49:43,120 --> 00:49:44,960 Speaker 1: to think of it the same way with respect to charts. 915 00:49:45,000 --> 00:49:48,440 Speaker 1: I mean, you have to look at something to be 916 00:49:48,520 --> 00:49:51,160 Speaker 1: able to have an idea as to what you're talking about. 917 00:49:52,080 --> 00:49:56,560 Speaker 1: I mean, Billy Bean popularized moneyball, but guys in the 918 00:49:56,600 --> 00:49:58,920 Speaker 1: business will tell you that you still have to watch 919 00:49:59,000 --> 00:50:03,480 Speaker 1: baseball players play. That's the reason teams pay scouts to 920 00:50:03,520 --> 00:50:06,520 Speaker 1: go watch high school and college players. They have to 921 00:50:06,560 --> 00:50:09,520 Speaker 1: see if they can play. Uh, It's sort of like 922 00:50:09,520 --> 00:50:11,640 Speaker 1: getting a high school kid or a kid who played 923 00:50:12,320 --> 00:50:14,920 Speaker 1: in a league that wasn't a strong league and he 924 00:50:15,000 --> 00:50:17,600 Speaker 1: hits six hundred, Well, is that a legit six hundred 925 00:50:17,680 --> 00:50:19,279 Speaker 1: versus a kid who may have played in a league 926 00:50:19,320 --> 00:50:21,960 Speaker 1: that was really tough who hit four and a quarter. 927 00:50:22,719 --> 00:50:24,439 Speaker 1: I don't know. Maybe you need to see them play 928 00:50:24,520 --> 00:50:26,520 Speaker 1: to be able to determine who was really the better player. 929 00:50:26,600 --> 00:50:28,919 Speaker 1: So I think you have to look at what you're 930 00:50:28,920 --> 00:50:32,320 Speaker 1: thinking about with respect to stocks, index's yields, currencies, commodities 931 00:50:32,360 --> 00:50:35,160 Speaker 1: across the board. I've asked a number of people if 932 00:50:35,200 --> 00:50:38,120 Speaker 1: you were only able to look at one thing, would 933 00:50:38,160 --> 00:50:40,720 Speaker 1: you take a research report? Would you take the chart? 934 00:50:41,040 --> 00:50:44,600 Speaker 1: And invariably everybody says, even non technicians, I have to 935 00:50:44,640 --> 00:50:47,239 Speaker 1: see the chart well, I'm glad you said that, because 936 00:50:47,280 --> 00:50:50,239 Speaker 1: I think charts are the language of Wall Street. No 937 00:50:50,280 --> 00:50:53,360 Speaker 1: matter who comes in to make a presentation. Uh, it 938 00:50:53,440 --> 00:50:57,840 Speaker 1: could be uh, an overview analyst from Hong Kong, it 939 00:50:57,840 --> 00:51:01,120 Speaker 1: could be an overview analyst from Australia, wherever. It could 940 00:51:01,120 --> 00:51:03,120 Speaker 1: be somebody here in town. One of the I I 941 00:51:03,239 --> 00:51:07,000 Speaker 1: ranked overview people when they come in their presentation packages 942 00:51:07,080 --> 00:51:11,000 Speaker 1: are chalk full of charts, and so it may not 943 00:51:11,080 --> 00:51:14,240 Speaker 1: be that they're technically oriented, but they are chart oriented. 944 00:51:14,280 --> 00:51:16,440 Speaker 1: And I'm I really believe charts of the language of 945 00:51:16,440 --> 00:51:19,839 Speaker 1: Wall Street. So, given how much computing power is at 946 00:51:19,880 --> 00:51:23,400 Speaker 1: everybody's desk or even in your pocket on your phone, 947 00:51:24,000 --> 00:51:28,200 Speaker 1: how does that change the world of technical analysis when 948 00:51:28,280 --> 00:51:31,960 Speaker 1: everybody can access a chart anytime, anywhere, What what does 949 00:51:32,000 --> 00:51:35,279 Speaker 1: that do to the field? I think it's actually made 950 00:51:35,280 --> 00:51:37,680 Speaker 1: it stronger, right, I think it has made it more 951 00:51:37,800 --> 00:51:43,200 Speaker 1: rigorous because people can check really quickly by looking at 952 00:51:43,239 --> 00:51:45,760 Speaker 1: what you're looking at. Again, I'll go back to Steve 953 00:51:45,760 --> 00:51:48,480 Speaker 1: Schobin's line, it's the singer, not the song, right, It's 954 00:51:48,480 --> 00:51:51,400 Speaker 1: the interpretation that means more. But I think there's a 955 00:51:51,480 --> 00:51:54,279 Speaker 1: certain there's a greater degree of rigor with respect to 956 00:51:54,360 --> 00:51:56,440 Speaker 1: technicals that wasn't there in the past, when it was 957 00:51:56,520 --> 00:51:58,719 Speaker 1: only I don't want to say control, but but but 958 00:51:58,840 --> 00:52:02,799 Speaker 1: let's say dominated by a few, because it was so 959 00:52:02,880 --> 00:52:05,359 Speaker 1: hard to do these disciplines, right, everything was pretty much 960 00:52:05,360 --> 00:52:09,919 Speaker 1: done by hand. But now it's so widely dispersed that 961 00:52:10,120 --> 00:52:12,120 Speaker 1: I think everybody has a flavor for it, and I 962 00:52:12,120 --> 00:52:14,840 Speaker 1: think that's a very good thing for technical analysis. That 963 00:52:14,840 --> 00:52:18,319 Speaker 1: that's interesting. So you you reference the the impact of 964 00:52:18,320 --> 00:52:22,000 Speaker 1: the fed earlier um and the impact of al goes. 965 00:52:22,080 --> 00:52:25,799 Speaker 1: What what is high frequency trading done to the way 966 00:52:25,920 --> 00:52:29,080 Speaker 1: charts look and feel? Um? I actually think high when 967 00:52:29,120 --> 00:52:33,919 Speaker 1: when Michael Lewis wrote the book with about bread Fukayama, Um, yeah, 968 00:52:34,080 --> 00:52:36,319 Speaker 1: I thought that that was the smoke screen. Not that 969 00:52:36,400 --> 00:52:39,600 Speaker 1: I'm not dismissing the book. I'm not dismissing high frequency trading. 970 00:52:39,800 --> 00:52:41,880 Speaker 1: But I think high frequency trading was getting the blame 971 00:52:41,960 --> 00:52:44,000 Speaker 1: for something that it shouldn't be getting the blame from it. 972 00:52:44,160 --> 00:52:46,440 Speaker 1: I think the real risk to our business is in 973 00:52:46,480 --> 00:52:50,360 Speaker 1: the e t f uh side of the business. Really explain, 974 00:52:50,880 --> 00:52:54,000 Speaker 1: So I have a pet theory about bonds, but explain 975 00:52:54,080 --> 00:53:00,000 Speaker 1: why you think e t fs are are so problematic? Uh? 976 00:53:00,040 --> 00:53:02,160 Speaker 1: I don't. Well, they're not problematic when we go up, 977 00:53:02,600 --> 00:53:05,440 Speaker 1: then they may be problematic when we go down. I 978 00:53:05,440 --> 00:53:08,879 Speaker 1: think because people don't understand them. For example, if you 979 00:53:08,960 --> 00:53:11,640 Speaker 1: call your broker and say I'm gonna buy an order 980 00:53:11,719 --> 00:53:16,080 Speaker 1: of spiders, the s P Y you buy spiders, but 981 00:53:16,120 --> 00:53:18,600 Speaker 1: you've created an unnatural bid for every stock in the 982 00:53:18,719 --> 00:53:21,399 Speaker 1: SMP five d absolutely, and I think most people who 983 00:53:21,560 --> 00:53:24,960 Speaker 1: use those E t F don't understand that. And I 984 00:53:25,040 --> 00:53:27,920 Speaker 1: also think that if you have a portfolio of individual 985 00:53:28,000 --> 00:53:31,319 Speaker 1: stocks and you add in an e t F let's 986 00:53:31,320 --> 00:53:34,920 Speaker 1: say the spider, your risk profile has changed because some 987 00:53:35,000 --> 00:53:37,440 Speaker 1: of the stocks you already own are in the spider. 988 00:53:38,280 --> 00:53:40,840 Speaker 1: So your risk parameter is not what you thought it was. 989 00:53:40,920 --> 00:53:44,239 Speaker 1: You've actually created sort of a derivative product and a 990 00:53:44,320 --> 00:53:47,120 Speaker 1: leverage product by using a simple et S. So so 991 00:53:47,280 --> 00:53:51,240 Speaker 1: years ago we had the SMP, we had the down industrials, 992 00:53:51,560 --> 00:53:54,160 Speaker 1: but you couldn't very easily trade them. You could go 993 00:53:54,160 --> 00:53:57,239 Speaker 1: out and buy each of the components in them, but 994 00:53:57,320 --> 00:53:59,799 Speaker 1: you couldn't just push a button and say I want 995 00:54:00,040 --> 00:54:03,319 Speaker 1: us and it was done. So when you say E 996 00:54:03,480 --> 00:54:07,520 Speaker 1: t f s have have impacted this, it's not the 997 00:54:07,560 --> 00:54:11,640 Speaker 1: index itself, it's that there's a trading vehicle that's that's 998 00:54:11,680 --> 00:54:14,840 Speaker 1: really easily accessible. And I don't think a lot of 999 00:54:14,840 --> 00:54:18,680 Speaker 1: people understand how E t F s are made and unmade. 1000 00:54:18,719 --> 00:54:22,160 Speaker 1: I'm not certain I understand. Well, what little I know 1001 00:54:22,200 --> 00:54:25,920 Speaker 1: about it is normally something like, uh, maybe the SMP 1002 00:54:26,160 --> 00:54:29,280 Speaker 1: the spiders aren't a good example. But you take another 1003 00:54:29,440 --> 00:54:33,240 Speaker 1: E T F UM or g l D for that matter, 1004 00:54:33,840 --> 00:54:36,440 Speaker 1: UM and it has some components, and most of the 1005 00:54:36,480 --> 00:54:39,360 Speaker 1: time when you're buying and selling it, you're just buying 1006 00:54:39,360 --> 00:54:43,440 Speaker 1: and selling that component. There are there are ARBs who 1007 00:54:43,440 --> 00:54:47,759 Speaker 1: will basically identify when it gets out of whack with 1008 00:54:47,840 --> 00:54:50,880 Speaker 1: the underlying holdings and buy this and sell that in 1009 00:54:50,960 --> 00:54:56,160 Speaker 1: order to bring it into into um appropriate balance. But 1010 00:54:56,360 --> 00:54:59,920 Speaker 1: sometimes the underwriter is making more units when the demand 1011 00:55:00,200 --> 00:55:03,120 Speaker 1: is overwhelming. We saw that with g l D on 1012 00:55:03,160 --> 00:55:06,239 Speaker 1: the way up. It wasn't a finite matter of g 1013 00:55:06,440 --> 00:55:09,480 Speaker 1: l D shares. They were actually making more as the 1014 00:55:09,560 --> 00:55:12,640 Speaker 1: demand had blown up from let's call it oh five 1015 00:55:12,760 --> 00:55:17,360 Speaker 1: to and then as that unwinds on the way down, 1016 00:55:17,800 --> 00:55:21,720 Speaker 1: they start taking those units apart and selling the actual 1017 00:55:21,840 --> 00:55:27,160 Speaker 1: gold futures or whatever. Yeah, it's not just this is 1018 00:55:27,200 --> 00:55:30,479 Speaker 1: a closed and fund that's trading based on supplians men. 1019 00:55:30,920 --> 00:55:33,359 Speaker 1: There are components that go into it. Yeah, no doubt, 1020 00:55:33,360 --> 00:55:35,280 Speaker 1: which is why I think it's very hard to understand 1021 00:55:35,280 --> 00:55:37,880 Speaker 1: those things. So it's okay on the upside, it's a problem. 1022 00:55:37,880 --> 00:55:40,680 Speaker 1: On the downside, I think it's that then the the 1023 00:55:40,840 --> 00:55:43,680 Speaker 1: is that the balance of risk. I don't think we 1024 00:55:43,880 --> 00:55:46,880 Speaker 1: I don't think anybody is understands and I'm at the 1025 00:55:46,920 --> 00:55:49,640 Speaker 1: forefront with not understanding what it could mean. On the downside. 1026 00:55:49,680 --> 00:55:52,640 Speaker 1: We haven't seen it, but I do recall, Uh, so 1027 00:55:52,680 --> 00:55:55,360 Speaker 1: it wasn't August fifteen. It would probably have been August 1028 00:55:55,760 --> 00:55:59,399 Speaker 1: where we were down really sharply over a few days. Uh, 1029 00:55:59,400 --> 00:56:01,520 Speaker 1: and there was some dislocation with respect to e t 1030 00:56:01,680 --> 00:56:03,520 Speaker 1: F s and e t F that were sort of 1031 00:56:04,040 --> 00:56:08,160 Speaker 1: supposed to be um more stable were marked down tremendously. 1032 00:56:08,960 --> 00:56:12,080 Speaker 1: Maybe that was you know, sort of uh a preview 1033 00:56:12,080 --> 00:56:16,919 Speaker 1: of what could happen. But again I'm not I don't 1034 00:56:16,920 --> 00:56:19,200 Speaker 1: think I can take a guess as to what it 1035 00:56:19,200 --> 00:56:21,439 Speaker 1: could look like. It might look it might be fine, 1036 00:56:21,440 --> 00:56:23,040 Speaker 1: it might be well contained, it might not be I 1037 00:56:23,040 --> 00:56:25,200 Speaker 1: don't know. I mean, there's still plenty of ETFs, not 1038 00:56:25,320 --> 00:56:28,000 Speaker 1: there was as nearly as much money in them, but oh, 1039 00:56:28,040 --> 00:56:31,120 Speaker 1: eight oh nine, they were, there were the spiders, the cues, 1040 00:56:31,239 --> 00:56:34,480 Speaker 1: the diamonds. Yeah, but but I I think the these 1041 00:56:34,560 --> 00:56:37,759 Speaker 1: trillions more to the active versus passive now is has 1042 00:56:37,840 --> 00:56:41,160 Speaker 1: really you know, the ratio has shifted and and the 1043 00:56:41,239 --> 00:56:44,720 Speaker 1: rate of change for assets going into passive versus assets 1044 00:56:44,719 --> 00:56:48,520 Speaker 1: going into active has really benefits the the the the 1045 00:56:48,560 --> 00:56:50,840 Speaker 1: passive side of the business, of which the e t 1046 00:56:50,960 --> 00:56:55,120 Speaker 1: f s are. Bill mcnap of Vanguard says, we look 1047 00:56:55,160 --> 00:56:58,600 Speaker 1: at this wrong, that it's not active versus passive. It's 1048 00:56:58,640 --> 00:57:02,839 Speaker 1: expensive versus It's fine. That's fine too, Yes, but that's 1049 00:57:02,920 --> 00:57:05,120 Speaker 1: we could characterize it like that too. Yeah, that he's 1050 00:57:05,239 --> 00:57:08,000 Speaker 1: he believes that's what's been driving. Well, sometimes you know, 1051 00:57:08,480 --> 00:57:13,160 Speaker 1: expensive versus cheap, and then cheap becomes expensive. Right that 1052 00:57:13,160 --> 00:57:17,360 Speaker 1: that certainly is a is a possibility assuming there's no 1053 00:57:17,440 --> 00:57:20,880 Speaker 1: risk management in a in a downside and downside move 1054 00:57:20,960 --> 00:57:24,120 Speaker 1: and et f s get she'll act. So there were 1055 00:57:24,120 --> 00:57:28,320 Speaker 1: one or two other questions I wanted to to go over, 1056 00:57:29,120 --> 00:57:32,440 Speaker 1: um and you you implied this, but I want to 1057 00:57:32,480 --> 00:57:37,600 Speaker 1: explore a little more, Um, the advancement of technology. What 1058 00:57:37,640 --> 00:57:40,840 Speaker 1: has this done for technicals? What does this mean? Uh 1059 00:57:40,880 --> 00:57:44,280 Speaker 1: to trading in the market. I think the effect on 1060 00:57:44,320 --> 00:57:50,560 Speaker 1: technical analysis is incalculable. Really, it's I mean, the Bloomberg terminals, 1061 00:57:50,640 --> 00:57:52,760 Speaker 1: what you can do on the Bloomberg terms insane, It's 1062 00:57:52,760 --> 00:57:55,960 Speaker 1: totally insane. We we are office laughs. It's like I 1063 00:57:55,960 --> 00:57:57,920 Speaker 1: feel like we barely scratched. I mean, just to give 1064 00:57:57,960 --> 00:57:59,680 Speaker 1: an idea. So the other day I I did a 1065 00:57:59,720 --> 00:58:03,160 Speaker 1: relic to ratio of the of a group of Macau 1066 00:58:03,320 --> 00:58:08,280 Speaker 1: gaming stocks to Patty Power, which is the Island base 1067 00:58:09,760 --> 00:58:14,720 Speaker 1: London traded online betting. I mean ten years ago. I 1068 00:58:14,720 --> 00:58:18,240 Speaker 1: couldn't have done that twenty years ago. It was inconceivable. 1069 00:58:18,280 --> 00:58:19,680 Speaker 1: And if you did it, you had to you do 1070 00:58:19,760 --> 00:58:22,920 Speaker 1: a calculator if you had one, or a spreadsheet if 1071 00:58:22,960 --> 00:58:26,360 Speaker 1: you had a lotus one to three. Uh, you know too. 1072 00:58:26,480 --> 00:58:28,000 Speaker 1: And then I can do it with with with a 1073 00:58:28,040 --> 00:58:33,160 Speaker 1: handful of keystrokes on Bloomberg. That's it's crazy. Yeah, that's amazing, amazing. 1074 00:58:33,280 --> 00:58:37,400 Speaker 1: So what does this do to the process of learning 1075 00:58:37,440 --> 00:58:39,320 Speaker 1: how to chart and what does it due to the 1076 00:58:39,360 --> 00:58:44,040 Speaker 1: market having all this technical horsepower. Well, it's another reason 1077 00:58:44,080 --> 00:58:46,400 Speaker 1: that I think it's more appropriate for me to try 1078 00:58:46,400 --> 00:58:49,240 Speaker 1: to stick with longer term trends rather than trying to 1079 00:58:49,280 --> 00:58:51,640 Speaker 1: be a trader because I can't figure that I'm going 1080 00:58:51,680 --> 00:58:55,800 Speaker 1: to be any better than any machine. And John Henry, Yeah, 1081 00:58:56,080 --> 00:58:58,200 Speaker 1: I can't figure that I'm going to be any better 1082 00:58:58,600 --> 00:59:01,880 Speaker 1: than somebody who is a trader. I'm not a trader. 1083 00:59:01,920 --> 00:59:04,280 Speaker 1: I'm an analyst, and so I think my strength is 1084 00:59:04,320 --> 00:59:07,240 Speaker 1: trying to stick with trend rather than trying to, uh, 1085 00:59:07,280 --> 00:59:09,720 Speaker 1: you know, be able to trade better than somebody who's 1086 00:59:09,760 --> 00:59:12,280 Speaker 1: doing it every single minute they're in their chair. So 1087 00:59:12,360 --> 00:59:16,040 Speaker 1: you reference trends earlier. Let's let's talk about trend as 1088 00:59:16,040 --> 00:59:21,200 Speaker 1: opposed to patterns and mean reversion. What makes trend so 1089 00:59:21,320 --> 00:59:24,240 Speaker 1: significant because I think when you have the trend right, 1090 00:59:24,240 --> 00:59:27,360 Speaker 1: you're bailed out of your mistakes. When you have the 1091 00:59:27,400 --> 00:59:29,920 Speaker 1: trend right, Well, what are the mistakes when you have 1092 00:59:29,960 --> 00:59:33,760 Speaker 1: the trend right? Sometimes you overthink your positions. I'll use 1093 00:59:33,800 --> 00:59:36,240 Speaker 1: you as my example. Let's say you bought something today. 1094 00:59:37,200 --> 00:59:40,360 Speaker 1: Invariably you come in on Monday morning, you're questioning yourself 1095 00:59:40,360 --> 00:59:42,400 Speaker 1: whether or not you should have bought that. Tuesday, you're 1096 00:59:42,400 --> 00:59:44,440 Speaker 1: doing the same thing, and you do that every single 1097 00:59:44,520 --> 00:59:47,120 Speaker 1: day that you own that item until you get rid 1098 00:59:47,160 --> 00:59:52,160 Speaker 1: of it. But sometimes our best decisions are made stepping 1099 00:59:52,200 --> 00:59:55,360 Speaker 1: away from the screen or the terminal, whatever you want 1100 00:59:55,360 --> 00:59:57,560 Speaker 1: to say, and trying to conceive of that item within 1101 00:59:57,600 --> 01:00:01,400 Speaker 1: its trend. And you might say, Okay, I get it. 1102 01:00:01,680 --> 01:00:04,560 Speaker 1: That stock might have some difficulties because I might have 1103 01:00:04,560 --> 01:00:08,360 Speaker 1: not had the best entry point, but overall, it is 1104 01:00:08,400 --> 01:00:10,640 Speaker 1: in an uptrend, and because it's in an up trend, 1105 01:00:10,720 --> 01:00:12,800 Speaker 1: I'm going to give that stock the benefit of the 1106 01:00:12,840 --> 01:00:16,920 Speaker 1: doubt on any pullback. Now, you might have to set 1107 01:00:17,040 --> 01:00:20,080 Speaker 1: up a risk parameter for yourself that says, Okay, I 1108 01:00:20,120 --> 01:00:23,680 Speaker 1: know it's an uptrend, but if it breaks some percentage 1109 01:00:24,160 --> 01:00:27,040 Speaker 1: retracement level, I don't care what that trend says, I 1110 01:00:27,120 --> 01:00:30,080 Speaker 1: have to reduce my position because it impacts the rest 1111 01:00:30,080 --> 01:00:34,000 Speaker 1: of my portfolio. But I think when an item is 1112 01:00:34,040 --> 01:00:36,160 Speaker 1: in an up trend and you are along that item, 1113 01:00:36,280 --> 01:00:39,320 Speaker 1: it deserves the benefit of the doubt, meaning that you 1114 01:00:39,360 --> 01:00:41,160 Speaker 1: know it can get knocked around a little bit, but 1115 01:00:41,200 --> 01:00:44,680 Speaker 1: the trend is not broken. And before I get to 1116 01:00:44,760 --> 01:00:47,400 Speaker 1: my favorite questions, I would be remiss if I did 1117 01:00:47,440 --> 01:00:50,360 Speaker 1: not ask you. You were Lehman Brothers in the middle 1118 01:00:50,360 --> 01:00:53,960 Speaker 1: of the nineties, that had to be a hopping place 1119 01:00:54,000 --> 01:00:56,120 Speaker 1: at that time. What what was that like? It was 1120 01:00:56,160 --> 01:00:58,400 Speaker 1: a great place. I worked with a guy named Steve Schoubin. 1121 01:00:58,440 --> 01:01:01,880 Speaker 1: I've mentioned his name a few times today. He's um. 1122 01:01:01,880 --> 01:01:06,160 Speaker 1: He was exceedingly patient and kind with me. He answered uh, 1123 01:01:06,400 --> 01:01:09,840 Speaker 1: millions of my questions. Uh, he's uh he was. He 1124 01:01:09,920 --> 01:01:13,240 Speaker 1: still is one of the quippiest guys in the business. Quippiest, tuippiest. 1125 01:01:13,320 --> 01:01:16,800 Speaker 1: I mean, he's never at a loss for a quippy comeback. Uh. 1126 01:01:16,840 --> 01:01:19,240 Speaker 1: And you just laughed because he was just so darn 1127 01:01:19,320 --> 01:01:21,800 Speaker 1: fast with him. Lehman was a great place. He was 1128 01:01:21,880 --> 01:01:24,360 Speaker 1: a great place. I just had a chance to be 1129 01:01:24,840 --> 01:01:27,600 Speaker 1: detectical guy at Arnholden splite shorter, and I thought it 1130 01:01:27,640 --> 01:01:29,720 Speaker 1: was a chance to you know, sort of be Uh 1131 01:01:29,800 --> 01:01:32,240 Speaker 1: that's why you jumped from one of men. It wasn't. 1132 01:01:32,280 --> 01:01:35,840 Speaker 1: It wasn't because of any you know, I was um displeased. 1133 01:01:35,880 --> 01:01:37,400 Speaker 1: On the other side. I just said, you know, here's 1134 01:01:37,400 --> 01:01:41,560 Speaker 1: an opportunity for myself. Um, I asked us Jeff DeGraf 1135 01:01:41,680 --> 01:01:45,320 Speaker 1: um reference, who was Lehman's chief techne. He replaced me 1136 01:01:45,400 --> 01:01:49,480 Speaker 1: at Lehman. Really, Oh, that's hilarious, he said, he goes, 1137 01:01:50,040 --> 01:01:53,600 Speaker 1: he goes. I assure you, it's dumb luck. But he 1138 01:01:53,760 --> 01:01:57,960 Speaker 1: handed his resignation in the day of the old time high. 1139 01:01:58,400 --> 01:02:03,240 Speaker 1: Pretty good timing. Yeah, so uh to set up ren macro. Um, 1140 01:02:03,440 --> 01:02:06,160 Speaker 1: so I go that. That's how you know, guys, a 1141 01:02:06,200 --> 01:02:09,360 Speaker 1: good technician is he quits a publicly traded company and 1142 01:02:09,680 --> 01:02:11,720 Speaker 1: that marks the high of the day. All right, So 1143 01:02:11,800 --> 01:02:16,000 Speaker 1: let's jump to my favorite questions. I asked all my guests. Um, 1144 01:02:16,200 --> 01:02:18,240 Speaker 1: you you told us about your background. You said you 1145 01:02:18,320 --> 01:02:21,280 Speaker 1: got an m b a from what is now Gibelly 1146 01:02:21,400 --> 01:02:24,680 Speaker 1: School of Management, but uh it's at Fordham. Did you 1147 01:02:24,720 --> 01:02:27,440 Speaker 1: do anything between school and Wall Street? Or you went 1148 01:02:27,880 --> 01:02:31,120 Speaker 1: right from right from college, right from grad school to 1149 01:02:31,120 --> 01:02:34,040 Speaker 1: to finance that's right, yeah, right right in Yeah, nothing 1150 01:02:34,040 --> 01:02:38,400 Speaker 1: in between. And um, obviously I'm gonna ask you who 1151 01:02:38,440 --> 01:02:40,680 Speaker 1: your early mentors are. Steve Schobin is going to be 1152 01:02:40,680 --> 01:02:42,960 Speaker 1: one of them. My very first boss was a guy 1153 01:02:43,040 --> 01:02:45,080 Speaker 1: named Tom McKee. He was a great boss. He taught 1154 01:02:45,080 --> 01:02:47,680 Speaker 1: me how to do my job responsibly. Uh. And then 1155 01:02:47,720 --> 01:02:50,280 Speaker 1: I worked for Ken Saffie and Saffie Investment Research, and 1156 01:02:50,280 --> 01:02:52,880 Speaker 1: he gave me a lot of freedom to do a 1157 01:02:52,880 --> 01:02:54,480 Speaker 1: lot of things for him and it was a great 1158 01:02:54,560 --> 01:02:58,320 Speaker 1: learning experience. Steve Schobin, I can't say enough about I 1159 01:02:58,360 --> 01:03:01,280 Speaker 1: worked for a guy named Jeff earlier and John arnhold 1160 01:03:01,960 --> 01:03:05,320 Speaker 1: Arnholden s Bleischroder and both both were gentlemen to me. 1161 01:03:05,520 --> 01:03:09,240 Speaker 1: And while Sorrows Fund Management, I worked for Robert Soros, 1162 01:03:09,240 --> 01:03:11,520 Speaker 1: who was a gentleman to me as well, a very 1163 01:03:12,280 --> 01:03:14,920 Speaker 1: a guy who was always open to technicals and um 1164 01:03:15,400 --> 01:03:18,400 Speaker 1: and looking at markets and charts. And I've been fortunate 1165 01:03:18,440 --> 01:03:19,880 Speaker 1: for the last five years to work for a guy 1166 01:03:19,920 --> 01:03:24,560 Speaker 1: named Scott Besson who encourages imaginative, imaginative thinking. He's always 1167 01:03:24,600 --> 01:03:28,480 Speaker 1: interested in listening to an idea. He's really pragmatic and 1168 01:03:28,560 --> 01:03:32,440 Speaker 1: he um. He's instilled confidence because he's allowed me the 1169 01:03:32,520 --> 01:03:34,640 Speaker 1: freedom to make a mistake. And I don't want to. 1170 01:03:35,280 --> 01:03:37,880 Speaker 1: I don't want to dismiss that point. You know, we 1171 01:03:37,960 --> 01:03:41,240 Speaker 1: don't want to make mistakes, but you make them. It's 1172 01:03:41,240 --> 01:03:43,240 Speaker 1: the nature of the business. If you're a four hundred 1173 01:03:43,320 --> 01:03:45,400 Speaker 1: hit or you're a rock star, right and you're still 1174 01:03:45,800 --> 01:03:48,600 Speaker 1: making out six out of ten times. Um so he 1175 01:03:48,920 --> 01:03:52,600 Speaker 1: uh he um. He understands the mistake part of the business, 1176 01:03:52,600 --> 01:03:54,720 Speaker 1: thankfully for me, and I'm lucky to be a part 1177 01:03:54,720 --> 01:03:58,680 Speaker 1: of Key Square and with him. So what other investors 1178 01:03:58,960 --> 01:04:03,880 Speaker 1: influenced how you approach uh markets and investing? So I've 1179 01:04:03,920 --> 01:04:07,720 Speaker 1: tried to listen to anything UH or read anything that 1180 01:04:07,760 --> 01:04:09,480 Speaker 1: these people have said. And some of them I worked 1181 01:04:09,520 --> 01:04:12,920 Speaker 1: with and for, so Steve Chabin, Scott Besson, Howard Marks, 1182 01:04:12,920 --> 01:04:16,080 Speaker 1: who was a value guy, and anything he's ever written. 1183 01:04:16,120 --> 01:04:18,680 Speaker 1: I've tried to read, you know, his memos when they 1184 01:04:18,720 --> 01:04:22,040 Speaker 1: are you know, every right, UH, Stan druck and Miller's, 1185 01:04:22,080 --> 01:04:24,840 Speaker 1: George Sorrows, Paul Jones, and I really, um, I really 1186 01:04:24,880 --> 01:04:27,160 Speaker 1: appreciate anything that seemed to Leb has to say. I 1187 01:04:27,440 --> 01:04:31,960 Speaker 1: really like his common sense, sort of contrary approach to UH, 1188 01:04:31,960 --> 01:04:34,200 Speaker 1: to the business and to the thinking in the business. 1189 01:04:34,320 --> 01:04:37,240 Speaker 1: Very interesting. Let's let you mentioned reading. Let's talk about 1190 01:04:37,280 --> 01:04:40,000 Speaker 1: some books. What are some of your favorite books, be 1191 01:04:40,160 --> 01:04:45,000 Speaker 1: they fiction, non fiction, investing, or otherwise. Okay, so I 1192 01:04:45,040 --> 01:04:48,840 Speaker 1: really liked UH a book about the commanches called the 1193 01:04:48,840 --> 01:04:52,560 Speaker 1: The Empire of the Summer Moon, which was really really 1194 01:04:52,560 --> 01:04:56,640 Speaker 1: a fantastic book. Really yeah, just great. I really liked 1195 01:04:56,640 --> 01:04:58,680 Speaker 1: that a lot. I really liked it a lot. With 1196 01:04:58,720 --> 01:05:01,680 Speaker 1: respect to to markets stuff Market Wizards by Jack Swagger, 1197 01:05:01,720 --> 01:05:05,840 Speaker 1: I think is is a required reading. More money than God. Um. 1198 01:05:05,880 --> 01:05:08,560 Speaker 1: I really liked The Creature from Jekyl Island, which by 1199 01:05:08,680 --> 01:05:12,200 Speaker 1: Edward Griffin that was about the start of the Federal Reserve. Uh. 1200 01:05:12,240 --> 01:05:14,200 Speaker 1: One of my favorites of all time is The Lords 1201 01:05:14,240 --> 01:05:19,120 Speaker 1: of Finance by Ahmed Ahammed, and the subtitle of the 1202 01:05:19,120 --> 01:05:21,680 Speaker 1: book is The Bankers Who Broke the World, which I 1203 01:05:21,680 --> 01:05:25,040 Speaker 1: think is as good as it gets. Manias, Panics and 1204 01:05:25,080 --> 01:05:28,280 Speaker 1: Crashes by Charles Kindleberger Shut Up a Deal by Jesse 1205 01:05:28,440 --> 01:05:31,840 Speaker 1: may Um. I'm a big sports sports book guy as well. 1206 01:05:31,880 --> 01:05:34,919 Speaker 1: I really I recently read a biography about Thai Cobb 1207 01:05:34,960 --> 01:05:40,200 Speaker 1: which sort of changed away people. Um originally thought about Cobb. Um, 1208 01:05:40,400 --> 01:05:42,919 Speaker 1: he was supposed to be really hard, charging spikes out, 1209 01:05:43,040 --> 01:05:46,320 Speaker 1: no fooling around that he was. He played really hard, 1210 01:05:46,720 --> 01:05:49,360 Speaker 1: and uh, I'd say back then it was sort of 1211 01:05:49,640 --> 01:05:51,880 Speaker 1: you know, killer be killed in baseball. I know I'm 1212 01:05:51,920 --> 01:05:54,880 Speaker 1: making too much of it, but um, there was no fraternizing. 1213 01:05:55,440 --> 01:05:58,360 Speaker 1: But he was thought to have been a bad guy. 1214 01:05:59,760 --> 01:06:01,800 Speaker 1: I'd necessarily think that he was a bad guy. In 1215 01:06:01,840 --> 01:06:05,280 Speaker 1: this new biography, would would would would say that he 1216 01:06:05,360 --> 01:06:10,080 Speaker 1: wasn't a newer and gentler ty coon or something like that. Um. 1217 01:06:10,120 --> 01:06:14,400 Speaker 1: So since you've joined finance all those years ago, what 1218 01:06:14,720 --> 01:06:18,000 Speaker 1: has changed? What do you think is the most significant 1219 01:06:18,120 --> 01:06:21,560 Speaker 1: changes in the industry over the past. When we got 1220 01:06:21,560 --> 01:06:25,360 Speaker 1: into the business, there was a tremendous broker client component 1221 01:06:25,440 --> 01:06:28,320 Speaker 1: of the business, which to a great degree doesn't exist. 1222 01:06:28,360 --> 01:06:31,520 Speaker 1: Now there's more of an asset gathering component, whereby then 1223 01:06:31,560 --> 01:06:35,120 Speaker 1: it was more transactional. Uh. And I can remember a 1224 01:06:35,120 --> 01:06:36,840 Speaker 1: lot of guys that I knew in the business they 1225 01:06:36,840 --> 01:06:39,360 Speaker 1: started their career making cold calls. I don't know, is 1226 01:06:39,400 --> 01:06:42,320 Speaker 1: it is it better or worse? This? This change is this? 1227 01:06:42,440 --> 01:06:45,960 Speaker 1: Is this now? Is that a better structure or do 1228 01:06:46,040 --> 01:06:50,840 Speaker 1: you lose something? I think what's changed is that it 1229 01:06:50,960 --> 01:06:54,520 Speaker 1: was easier than to come up with some sort of 1230 01:06:54,720 --> 01:06:58,560 Speaker 1: sentiment read for the market. I think it's harder now. Uh. 1231 01:06:58,600 --> 01:07:01,200 Speaker 1: And with the individual investor or in an asset gather, 1232 01:07:01,320 --> 01:07:05,160 Speaker 1: you know, having been asset gathered rather than via the 1233 01:07:05,200 --> 01:07:07,400 Speaker 1: old broker method, I think it's harder to figure things 1234 01:07:07,440 --> 01:07:10,400 Speaker 1: out in that regard. But it's a natural evolution. I 1235 01:07:10,400 --> 01:07:12,600 Speaker 1: think the advent and ubiquity of E t f s, 1236 01:07:13,160 --> 01:07:16,400 Speaker 1: the continued involvement of central bankers, the evolution of central 1237 01:07:16,440 --> 01:07:19,240 Speaker 1: bankers from behind the scenes, practitioners of the hippocratic oath, 1238 01:07:19,640 --> 01:07:23,200 Speaker 1: the virtual financial celebrities, those are all tremendous changes over 1239 01:07:23,240 --> 01:07:26,120 Speaker 1: the last twenty financial celebrities. Yeah, that's the way I 1240 01:07:26,120 --> 01:07:27,960 Speaker 1: tend to think of them. Is that a bad thing 1241 01:07:28,040 --> 01:07:30,960 Speaker 1: or a good thing? Um? Or does it depend on 1242 01:07:31,000 --> 01:07:37,520 Speaker 1: the celebrity? I I think UM. I think that there's 1243 01:07:37,520 --> 01:07:40,480 Speaker 1: a major shift occurring where investors are moving away from 1244 01:07:40,480 --> 01:07:44,160 Speaker 1: the belief of the omniscience of central bankers. In fact, 1245 01:07:44,160 --> 01:07:46,600 Speaker 1: in my mind, that has been a bubble in its 1246 01:07:46,640 --> 01:07:49,560 Speaker 1: own right, and I think that we are realizing that 1247 01:07:49,640 --> 01:07:55,160 Speaker 1: central bankers are far from omniscient. Well, everybody remembers Greenspan 1248 01:07:55,240 --> 01:08:00,680 Speaker 1: as the maestro, and he left as chairman, and then 1249 01:08:00,760 --> 01:08:03,640 Speaker 1: it didn't take all that long for that reputation to 1250 01:08:03,880 --> 01:08:08,680 Speaker 1: really unwind. The financial crisis certainly didn't didn't help his reputation. 1251 01:08:09,080 --> 01:08:11,480 Speaker 1: The guy who looked like he was never wrong suddenly, 1252 01:08:11,920 --> 01:08:14,080 Speaker 1: Oh maybe this guy was never right. He just got 1253 01:08:14,120 --> 01:08:18,000 Speaker 1: a little lucky. And I'm amazed that people put so 1254 01:08:18,080 --> 01:08:22,280 Speaker 1: much faith in central bankers after the guy was little. 1255 01:08:22,320 --> 01:08:26,479 Speaker 1: I mean, I remember the CNBC briefcase cam like, how 1256 01:08:26,520 --> 01:08:29,040 Speaker 1: thick or thin is his briefcase and that's whether he'll 1257 01:08:29,520 --> 01:08:33,559 Speaker 1: raise or tighten. That's that's how tightly people track that. 1258 01:08:34,560 --> 01:08:40,120 Speaker 1: I don't think anybody holds bankers at least with the 1259 01:08:40,200 --> 01:08:43,839 Speaker 1: same you know, belief that they know all the answers. 1260 01:08:43,880 --> 01:08:47,920 Speaker 1: They're certainly important, But did did Greenspan break the spell 1261 01:08:48,000 --> 01:08:54,360 Speaker 1: for that? I think we're in an environment where people 1262 01:08:54,439 --> 01:08:59,120 Speaker 1: are looking at um, for lack of a better phrase, 1263 01:08:59,760 --> 01:09:02,760 Speaker 1: the political financial elite in a different light than they 1264 01:09:02,800 --> 01:09:06,280 Speaker 1: had in prior cycles. I think so much. So many 1265 01:09:06,320 --> 01:09:12,679 Speaker 1: of their missteps are well categorized, uh or delineated, and 1266 01:09:12,760 --> 01:09:16,559 Speaker 1: that information is well dispersed, whereby perhaps it may have 1267 01:09:16,600 --> 01:09:18,920 Speaker 1: only been in prior cycles. People in our business who 1268 01:09:18,960 --> 01:09:21,840 Speaker 1: are aware of who the head of the central bank was, 1269 01:09:22,320 --> 01:09:25,280 Speaker 1: the public knows that. Not only does the public know 1270 01:09:25,360 --> 01:09:28,040 Speaker 1: who the the head of the central bank is, they 1271 01:09:28,120 --> 01:09:29,960 Speaker 1: know there's a central bank. You go back to twenty 1272 01:09:30,000 --> 01:09:32,519 Speaker 1: years they had no clue. I mean, every every day 1273 01:09:32,560 --> 01:09:38,120 Speaker 1: you turn around, there's another central banker speaking somewhere. Yeah. 1274 01:09:38,160 --> 01:09:41,240 Speaker 1: I think that they're ubiquitous, both of their presence and 1275 01:09:41,240 --> 01:09:45,559 Speaker 1: their comments. And uh, I think that they're going They'll 1276 01:09:45,600 --> 01:09:48,040 Speaker 1: run through their cycle, just like every other item runs 1277 01:09:48,040 --> 01:09:51,240 Speaker 1: through a cycle. You mentioned Malaby's more money than God. 1278 01:09:51,400 --> 01:09:54,599 Speaker 1: Have you gotten around to his new tone on green Space? 1279 01:09:54,600 --> 01:09:56,519 Speaker 1: I have not. I have the book. I haven't even 1280 01:09:56,520 --> 01:10:00,200 Speaker 1: cracked it open yet. I'm really curious because, um, my 1281 01:10:00,240 --> 01:10:03,960 Speaker 1: head of research, Mike Battnick, like you loved More Money 1282 01:10:04,040 --> 01:10:07,160 Speaker 1: than God, And that's another book I haven't gotten. I 1283 01:10:07,240 --> 01:10:11,120 Speaker 1: actually started reading it right after I finished reading something else, 1284 01:10:11,520 --> 01:10:14,120 Speaker 1: and they were so similar in who they looked at. 1285 01:10:14,200 --> 01:10:15,920 Speaker 1: And I said, you're I'm gonna put this aside a 1286 01:10:15,960 --> 01:10:17,600 Speaker 1: little bit and come back to it. But I know 1287 01:10:17,640 --> 01:10:20,040 Speaker 1: a number of people who just love that book, think 1288 01:10:20,040 --> 01:10:23,120 Speaker 1: it's great, really, So I'm gonna move that up in 1289 01:10:23,200 --> 01:10:27,200 Speaker 1: my uh up in my queue. So you mentioned you 1290 01:10:27,240 --> 01:10:30,000 Speaker 1: played ball in school. What do you do to relax 1291 01:10:30,040 --> 01:10:32,480 Speaker 1: outside of the office. What do you do to stay 1292 01:10:33,240 --> 01:10:37,080 Speaker 1: mentally and physically fit so you can do your job? Listen, 1293 01:10:37,120 --> 01:10:38,200 Speaker 1: Like a lot of guys, I like to go to 1294 01:10:38,200 --> 01:10:39,680 Speaker 1: the gym. I like to be active. I like to 1295 01:10:39,720 --> 01:10:42,240 Speaker 1: spend a little time walking down at the Bronx Riviera, 1296 01:10:42,760 --> 01:10:46,520 Speaker 1: which is otherwise known as Orchard Beach, Um the Bronx Riviera. 1297 01:10:46,600 --> 01:10:49,479 Speaker 1: So things like that, How do you are you in 1298 01:10:49,720 --> 01:10:53,639 Speaker 1: um Bronxville with you? I'm a Westchester guy, but listen, 1299 01:10:53,840 --> 01:10:56,559 Speaker 1: driving down to Orchard Beach from Lower Westchester is an 1300 01:10:56,560 --> 01:10:59,439 Speaker 1: easy thing to do, very easy. Thing to do that. 1301 01:10:59,439 --> 01:11:03,000 Speaker 1: That's pretty uh, that's pretty interesting. Um, so you've been 1302 01:11:03,000 --> 01:11:06,120 Speaker 1: mentored along in your career. What sort of advice would 1303 01:11:06,160 --> 01:11:10,599 Speaker 1: you give a recent college grad or a millennial who 1304 01:11:10,680 --> 01:11:13,240 Speaker 1: was just starting their career and said, Hey, John, I'm 1305 01:11:13,280 --> 01:11:16,360 Speaker 1: thinking about going into technicals. What what would you say 1306 01:11:16,360 --> 01:11:20,280 Speaker 1: to them? I'd offer no advice, but I'd offer some suggestions. Okay, 1307 01:11:20,400 --> 01:11:26,080 Speaker 1: I'd say, listen intensely, h ask a ton of questions, 1308 01:11:26,680 --> 01:11:31,920 Speaker 1: and read everything you can, everything and anything. Listen intensely, 1309 01:11:32,080 --> 01:11:36,439 Speaker 1: ask lots of questions, and read just about anything you can, 1310 01:11:36,600 --> 01:11:39,760 Speaker 1: not only finance, because I think sometimes your best thinking 1311 01:11:39,760 --> 01:11:43,200 Speaker 1: about finance is when you're not thinking about finance. It 1312 01:11:43,200 --> 01:11:46,439 Speaker 1: could because you're reading a biography about Billy Martin. It 1313 01:11:46,479 --> 01:11:49,280 Speaker 1: could be because you're reading about the Comanches, an empire, 1314 01:11:49,360 --> 01:11:52,080 Speaker 1: the Summer Moon. It could be because you're reading Lonesome 1315 01:11:52,160 --> 01:11:54,439 Speaker 1: Dub by Larry McMurtry. I don't know, but I think 1316 01:11:54,439 --> 01:11:56,720 Speaker 1: you should read as much as you can. That that 1317 01:11:56,920 --> 01:11:59,559 Speaker 1: is not an uncommon theme. A number of people who 1318 01:11:59,640 --> 01:12:05,840 Speaker 1: have paid through these doors, billionaires, fund managers, Nobel Prize winners, 1319 01:12:05,840 --> 01:12:08,759 Speaker 1: have all said the same thing that the two themes 1320 01:12:08,800 --> 01:12:11,800 Speaker 1: that come up over and over again reading and you 1321 01:12:11,920 --> 01:12:13,960 Speaker 1: gotta you gotta be in a position to get lucky, 1322 01:12:13,960 --> 01:12:16,720 Speaker 1: because a little luck goes a long way. And our 1323 01:12:16,800 --> 01:12:20,200 Speaker 1: last question, what is it that you know about investing 1324 01:12:20,200 --> 01:12:25,240 Speaker 1: in technicals today that you wish you knew years ago? Everything? 1325 01:12:25,280 --> 01:12:28,360 Speaker 1: I mean, I wish I knew everything then that I 1326 01:12:28,400 --> 01:12:30,760 Speaker 1: know now, and I haven't learned anything I think in 1327 01:12:30,760 --> 01:12:33,600 Speaker 1: the last ten years. Why say that again, because I 1328 01:12:33,600 --> 01:12:37,400 Speaker 1: think I wish I knew then what I know now. 1329 01:12:37,439 --> 01:12:39,519 Speaker 1: But I feel like, even though I've picked up a 1330 01:12:39,560 --> 01:12:41,519 Speaker 1: lot in the last ten years, there's still so much 1331 01:12:41,560 --> 01:12:44,360 Speaker 1: to learn. And I think every single day you go 1332 01:12:44,439 --> 01:12:47,400 Speaker 1: to work, you know, juiced, not only because you want 1333 01:12:47,439 --> 01:12:50,200 Speaker 1: to win, but because it's a learning environment. It's an 1334 01:12:50,200 --> 01:12:53,639 Speaker 1: active learning environment, and I think that's a lucky environment 1335 01:12:53,680 --> 01:12:57,160 Speaker 1: to be in. That that's a really interest answer, John, 1336 01:12:57,160 --> 01:12:59,760 Speaker 1: Thank you so much for being so generous with your 1337 01:13:00,000 --> 01:13:03,280 Speaker 1: I'm we have been speaking with John Roque. He is 1338 01:13:03,360 --> 01:13:08,400 Speaker 1: managing director and technical analyst at Key Square Capital Partners 1339 01:13:08,439 --> 01:13:12,080 Speaker 1: is Apple Management key Square Capital Management. If you enjoy 1340 01:13:12,160 --> 01:13:14,519 Speaker 1: this conversation, be sure and look up an inch or 1341 01:13:14,600 --> 01:13:17,320 Speaker 1: down an inch on Apple iTunes and you could see 1342 01:13:17,320 --> 01:13:20,920 Speaker 1: any of the other hundred and let's call it twelve 1343 01:13:21,720 --> 01:13:26,879 Speaker 1: previous podcasts we've done. We enjoy your comments and feedback. 1344 01:13:26,960 --> 01:13:30,400 Speaker 1: Be sure to write to us at m IB podcast 1345 01:13:30,439 --> 01:13:33,880 Speaker 1: at Bloomberg dot net. I would be remiss if I 1346 01:13:33,920 --> 01:13:38,240 Speaker 1: did not think Charlie Vollmer, my engineer, H Taylor Riggs, 1347 01:13:38,400 --> 01:13:41,479 Speaker 1: our booker, and Michael Batnick, who is the head of 1348 01:13:42,160 --> 01:13:46,040 Speaker 1: research for US. I'm Barry Ridults. You've been listening to 1349 01:13:46,200 --> 01:13:50,080 Speaker 1: Masters in Business on Bloomberg Radio, brought to you by 1350 01:13:50,120 --> 01:13:53,679 Speaker 1: Bank of America. Merrill Lynch, committed to bringing higher finance 1351 01:13:53,760 --> 01:13:56,800 Speaker 1: to lower carbon named the most innovative investment bank for 1352 01:13:56,880 --> 01:14:00,559 Speaker 1: climate change and sustainability by the Banker that the power 1353 01:14:00,560 --> 01:14:04,240 Speaker 1: of global connections. Bank of America North America member f 1354 01:14:04,360 --> 01:14:04,720 Speaker 1: D I C