Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2: Hello and welcome to the Money Stuff Podcast. You're a
Speaker 2: weekly podcast where we talk about stuff related to money.
Speaker 2: I'm Matt Levine and I write the Money Stuff column
Speaker 2: for Bloomberg Opinion.
Speaker 1: And I'm Katie Greifeld, a reporter for Bloomberg News and
Speaker 1: an anchor for Bloomberg Television.
Speaker 2: Happy New Year, Katie, Happy.
Speaker 1: New Year, Matt Levine, twenty twenty five. It's going to
Speaker 1: be great when we're recording.
Speaker 2: Great already. Yeah, and can you believe the news and
Speaker 2: financial markets?
Speaker 1: Jeez, Louise, it's amazing to see what's already happens in
Speaker 1: these first few seconds. Honestly, of twenty twenty five.
Speaker 2: It's been it's been a while. I wouldn't miss it.
Speaker 2: We're recording this on my December ninetheen.
Speaker 1: It is December nineteenth. It is three oh two pm.
Speaker 2: So we have powerful skills of pronuncication. What are you
Speaker 2: talking about today or in the future, Katie.
Speaker 1: Mail bag, let's dive right in. This is a question
Speaker 1: from Mitch. Mitch wants to know how we were each
Speaker 1: introduced to the world of finance. And I appreciate Mitch
Speaker 1: because we both wanted questions about ourselves and we'll get
Speaker 1: to some like more substantive questions. But what a nice
Speaker 1: first question of twenty twenty five, Matt, how are you
Speaker 1: introduced to the world of finance?
Speaker 2: I don't know. I have like two answers. So I
Speaker 2: was a classics manager in college. I was like the
Speaker 2: most unworldly person, Like I did not do job interviewing
Speaker 2: my senior year of college and I graduated. I was like,
Speaker 2: oh my god, I need a job. I did. I
Speaker 2: interviewed her like one kind of job, which is McKenzie
Speaker 2: like sent me a letter being like you should interview
Speaker 2: at McKenzie And so I did you know, the like
Speaker 2: on campus first try and interview at mckensey. But of course,
Speaker 2: like I wasn't prepared and I was terrible. So I
Speaker 2: had like an incredibly unworldly college experience. And then I
Speaker 2: actually taught high school a lotin for a year after.
Speaker 1: I love that.
Speaker 2: It was great. It was really fun. But it turns
Speaker 2: out that a classics manager really suits you for one thing,
Speaker 2: which is going to law school. And so I went
Speaker 2: to law school. Law school. I was like, I'll be
Speaker 2: like a constitutional law professor, right, But then I went
Speaker 2: and like con social law is kind of dumb, and
Speaker 2: like contracts are really interesting, and so I was like
Speaker 2: I like contracts, and so then what do you do
Speaker 2: with that? Well, you go, like, you know, you have
Speaker 2: like a summer associate job as an M and A lawyer,
Speaker 2: because like they write contracts, why not you know, I
Speaker 2: was getting like very unworldly. I applied to all the
Speaker 2: law firms and I was like, I want to get
Speaker 2: a job at these law firms. I don't know anything
Speaker 2: about M and A. And then they all hired me
Speaker 2: because like they don't care. And then I went and
Speaker 2: worked in an M and A law firm. I was
Speaker 2: like I love this, it's great. And then I, like,
Speaker 2: you know, I went from there and I was an
Speaker 2: MNI layer for a brief period and an investment banker
Speaker 2: for a longer period.
Speaker 1: And so was that one answer too, because you said
Speaker 1: there was one answer.
Speaker 2: Okay, that's like the sort of real, sort of direct
Speaker 2: path answer. I will say, though, like the other answer
Speaker 2: is that when I was like in middle school high school,
Speaker 2: I did read Liar's Poker. I don't know why, but
Speaker 2: I liked it. And I read The Barbarians at the Gate,
Speaker 2: which is even more fun and wait, edit that out.
Speaker 1: Michael Lewis listens, Fine, you're saying nice things. Keep that in.
Speaker 2: I thought, this is really cool, and like there was
Speaker 2: probably like a period in like I don't know, high school,
Speaker 2: junior high school where I was like I want to
Speaker 2: do high finance M and A and that totally faded
Speaker 2: and it was not on my radar in college or whatever.
Speaker 2: But at some point I like rediscovered it and like
Speaker 2: I was an M and A layer. I was like,
Speaker 2: oh yeah, I remember like liking this stuff as a kid,
Speaker 2: and so there was something latent in me like that
Speaker 2: was like I want to do finance stuff, and like
Speaker 2: it came out of me eventually, even though I tried
Speaker 2: to tamp it down by majoring in Greek poetry in college.
Speaker 1: You can't deny who you are seriously anyway.
Speaker 2: So what's your story?
Speaker 1: So I feel like it's not what people typically expect.
Speaker 1: My dad, who's listening right now, was the CEO of
Speaker 1: Nastac for a long time. He took over when I
Speaker 1: was in fourth grade, and he stopped being CEO of
Speaker 1: NASAK after I started Bloomberg, so it was a long time.
Speaker 1: We never talked about business or finance or the market
Speaker 1: or like stock exchanges. So I ended up at Bloomberg,
Speaker 1: and I think people, especially outside sources, expected me to
Speaker 1: know a lot more than I did, and I did not.
Speaker 2: I talked.
Speaker 1: No. I actually I went to the market side a lot.
Speaker 1: There's pictures of me, like in my goth phase, like
Speaker 1: at like a closing like at a closing bell ceremony
Speaker 1: and stuff, which is really sweet. Yeah, I'll show no
Speaker 1: one else can see it, because like it was a
Speaker 1: pain painful, awkward phase. I talked my dad about how
Speaker 1: I was going to answer this question, and he was like,
Speaker 1: make sure they know we talked, like we did talk,
Speaker 1: just not about anything else. My dad is one of
Speaker 1: my closest friends. I got into this world from a
Speaker 1: journalist first perspective, Like I was the editor of my
Speaker 1: college newspaper, and then I went to Columbia for journalism
Speaker 1: grad school, and then I applied for an internship at
Speaker 1: Bloomberg because I was thinking where might I make the
Speaker 1: most money as a journalist, and I was like, probably
Speaker 1: reporting on money. And then I ended up at Bloomberg
Speaker 1: and here I am, here you are, Yeah, but it
Speaker 1: definitely was through writing. I consider myself a writer first,
Speaker 1: and then a markets person, and here.
Speaker 2: I am a podcaster first, right.
Speaker 1: For sure, podcaster above all else, and then somewhere in there. Anyway,
Speaker 1: that was a fun first question mail bag mail Bag.
Speaker 1: Seth wants to know why doesn't the government insider trade?
Speaker 1: And then Seth goes through his logic. The government gathers
Speaker 1: and releases a lot of market moving information. This information
Speaker 1: is worth a lot of money in theory belongs to
Speaker 1: the American taxpayer, does it The government should establish a
Speaker 1: department of insider Trading which gets early access to all
Speaker 1: this information and is able to trade on it in
Speaker 1: order to raise revenue for the government. But why would
Speaker 1: anyone ever take the other side of the government.
Speaker 2: Then, Right, that's one good objection to this.
Speaker 1: Yeah, Like.
Speaker 2: One good objection to it is it wouldn't really work
Speaker 2: that well, yeah, no, it kind of would, right, Like
Speaker 2: if you had economic data you could buy or sell
Speaker 2: SMP in tax funds or whatever, right, and like there's
Speaker 2: enough of a market for that that like you could
Speaker 2: probably sneak in some trading. Yeah, I do think the
Speaker 2: main answer is that this is a tax, right, anything
Speaker 2: the government does to raise revenue from people who are
Speaker 2: not the government is a tax classically, like inflation is
Speaker 2: a tax, right, Like, one way for the government to
Speaker 2: raise revenue is to like never impose any taxes and
Speaker 2: just print currency to pay for all of its stuff.
Speaker 2: And the reason governments don't do that is because inflation
Speaker 2: is also a tax, and it is a worse constructed
Speaker 2: tax than like a progressive tax system. I think that's
Speaker 2: something similar here, where it's like if you raise money
Speaker 2: for the government by trading against counterparties, one, it's like
Speaker 2: an unfair tax, right, like you're taking them from people,
Speaker 2: you know, retirement savers rather than like the broad tax base.
Speaker 2: But then too, your like undermining the capital markets to
Speaker 2: raise these taxes, and so like you're making the overall
Speaker 2: financial system worse to raise revenue for the government. Like
Speaker 2: you can raise revenue for the government in a more
Speaker 2: neutral way by like, you know, imposing taxes. So I
Speaker 2: think that's true of like a lot of stuff like this.
Speaker 2: Like there's like a well known trade in like fixed
Speaker 2: and come arbitrage, which is like you buy off the
Speaker 2: run treasuries which tend to trade at a slight discount
Speaker 2: to on the run treasures, and you sell the on
Speaker 2: the run and they eventually converge because they eventually both
Speaker 2: become off the run. And I've often wondered, like, why
Speaker 2: doesn't the government just buy all the off the runs
Speaker 2: and like issue new on the runs to fund it,
Speaker 2: because like they could clip that spread too. I think
Speaker 2: it's the same kind of answer, which is, like, why
Speaker 2: would they make that money at the expense of the
Speaker 2: financial markets instead of just imposing broad taxes.
Speaker 1: Well, great questions stuff comes from Max. Why is it
Speaker 1: so difficult for small retail investors to get diversified exposure
Speaker 1: for real estate despite the fact that real estate is
Speaker 1: such a large part of many people's assets. For example,
Speaker 1: even as a broke college student, I can very easily
Speaker 1: invest in a diversified collection of stocks in almost any industry.
Speaker 1: I like, why aren't there ETFs, thank you, Max, that are,
Speaker 1: for example, a bunch of residential properties in a particular city.
Speaker 1: I would expect these kinds of products to be very
Speaker 1: popular for homeowners to hedge their own homes and whatnot.
Speaker 1: There's definitely some intrepid etf issuers out there that agree
Speaker 1: with you and are working on it. Are there probably? Yeah,
Speaker 1: not on the record about author I mean just ah, yes,
Speaker 1: the sanctity of this small room with the micros, not
Speaker 1: like particular city ETFs. But people are trying to figure
Speaker 1: out how to fit private assets in general largely into ETFs.
Speaker 2: Like private assets, right, assets are one thing. Houses are differently.
Speaker 1: I know, there's like two.
Speaker 2: Answers to question. One is like, why can't I buy
Speaker 2: a diverst fied real estate portfolio? And the other is
Speaker 2: why can't I sell a share of my house?
Speaker 1: Right?
Speaker 2: The diverse wide real estate portfolio is a thing that
Speaker 2: people have been working on for decades, and there didn't
Speaker 2: used to be reats. A READ is a real estate
Speaker 2: investment trust.
Speaker 1: Right.
Speaker 2: It's like a pool of real estate assets that you
Speaker 2: can buy a share in. Right, And that's like a
Speaker 2: relatively new that's like like the seventies or eighties is
Speaker 2: relatively new technology that people developed in order to allow
Speaker 2: retail investors on the stock exchange to buy exposure to
Speaker 2: real estate. Now most roads are not single family homes, right.
Speaker 2: One thing that is happening is that like single family
Speaker 2: homes have become like a real investor asset class, right,
Speaker 2: Like you know, like big asset managers now own a
Speaker 2: lot of single family homes and rent them out to
Speaker 2: people to live in them. And I think that doesn't
Speaker 2: really exist in like read or ETF form yet, but
Speaker 2: then yeah, you could spin that out like sell stakes
Speaker 2: in your like single family home portfolio, and like, I
Speaker 2: don't know, I'd imagine in like five years if investor
Speaker 2: owned single family homes are a big deal, like someone
Speaker 2: will have a reate of them, so that you can
Speaker 2: buy diversified exposure to single family homes. What you can't
Speaker 2: buy is diversified exposure to owner occupied single family homes
Speaker 2: because the owners occupy them and so they're not selling
Speaker 2: a stake. And like that's a thing that people have
Speaker 2: thought about for a long time too. And like financial
Speaker 2: engineers love the idea of like, okay, you own house,
Speaker 2: you sell ten percent of your home equity to me,
Speaker 2: and I put it in a pot and I sell
Speaker 2: it to investors, right because like for you, you get
Speaker 2: some form of like hedging your house pass exposure and
Speaker 2: you get cash that is arguably not debt, has like
Speaker 2: somewhat more attractive properties than debt perhaps, And for me,
Speaker 2: I get exposure to your house and then if I
Speaker 2: pool that with a bunch of other houses, then I've
Speaker 2: created something like an investable fund of owner occupied homes
Speaker 2: and like, that's a cool product. A lot of people
Speaker 2: would like to swap where it's like, if you have
Speaker 2: one hundred thousand dollars of equity in your house, you
Speaker 2: would perhaps rather have fifty one thousand dollars of equity
Speaker 2: in your house and fifty thousand dollars of like diversified
Speaker 2: home equity like across the country or whatever, so that
Speaker 2: you're not as invested in your single house. People try
Speaker 2: that all the time. And I wrote about a company
Speaker 2: called Point in twenty sixteen. I was doing something like this.
Speaker 2: I think it's hard in part because, like startup founders
Speaker 2: and money stuff podcast listeners love this idea, many normal
Speaker 2: people may not be that interested in it, and so like,
Speaker 2: you can't necessarily get a huge diversified pool of people
Speaker 2: who are like, oh yeah, I want to like go
Speaker 2: through the headwreich of like signing a contract to sell
Speaker 2: ten percent of my home equity. You also have like
Speaker 2: weird dynamics where you know, a mortgage you pay back
Speaker 2: every month until it's paid off, home equity whatever, you know,
Speaker 2: selling a portion of your home equity, how does the
Speaker 2: buyer monetize it? I think the answer is like they
Speaker 2: wait until you sell the house, like that could be
Speaker 2: a long time, or it's like not an obviously cash
Speaker 2: flowing outset if it's owner archiped real estate. And so
Speaker 2: it's like a weirder dynamic of like how the market
Speaker 2: would work, but people do keep trying it. And also
Speaker 2: the other thing I should say is people try to
Speaker 2: make derivative products. There's like a case sholl or derivative
Speaker 2: products at some point where it's like based on some
Speaker 2: like observed index and like you have futures contracts side
Speaker 2: to the index. Because people really like the idea of
Speaker 2: being able to buy diversify a single family home exposure.
Speaker 2: And I feel like no one has really corracked it yet,
Speaker 2: but people.
Speaker 1: Are gonna keep working on They're going to keep working on.
Speaker 2: The thing I always I also compare it to is
Speaker 2: the other like form of equity that people want to
Speaker 2: buy is like human equity, Like people want go on.
Speaker 2: So this is like you know, college students, MBA students,
Speaker 2: minor league baseball players, Like there are people who will
Speaker 2: come to them and say, sell me ten percent of
Speaker 2: your future earnings or like you know, your future earnings
Speaker 2: over the next ten years or whatever, and I'll give
Speaker 2: you a pile of cash today, and I will sell
Speaker 2: your future earnings to some investor class And like people
Speaker 2: do this like NBA students or like the NBA students
Speaker 2: pool and with minor league baseball players too. You get
Speaker 2: like ten players and you pool yourselves and then like
Speaker 2: one of you makes it big, then he writes a
Speaker 2: check to the other nine, and so you have like
Speaker 2: a sort of like diverseifaication benefit.
Speaker 1: That's crazy. I've never heard of this.
Speaker 2: Oh, people love it. It's not a huge business. It's
Speaker 2: like a thing that people are constantly per forming startups
Speaker 2: to do because like it's a great abstract idea and
Speaker 2: then like in practice it's like, oh it's a mass,
Speaker 2: but like there is more progress being made on those
Speaker 2: than on the house stuff. The house stuff seems really hard.
Speaker 1: Thank you for the thought provoking question, Max mail Bag
Speaker 1: mail Bag, let's move on to Kevin. All men so far,
Speaker 1: but we do have a woman coming up, so stay tuned.
Speaker 1: But Kevin asks you talk a lot about how analysts
Speaker 1: think it's worth talking to management, getting on calls, et cetera.
Speaker 1: Even though management can't share MNPI because they think they
Speaker 1: can glean something from body language that helps them evaluate
Speaker 1: the company. Do any short sellers do the same too, Like,
Speaker 1: what if you had a big short position and then
Speaker 1: gain some info from management to body language that made
Speaker 1: you rethink the short It would be good for the
Speaker 1: company too if they were able to convince a short
Speaker 1: seller to cover I just think it's funny to imagine
Speaker 1: that conversation, Hey, we sold three million of your shares
Speaker 1: in the market because we think you're bad at your jobs.
Speaker 1: Could you meet with us to help us figure out
Speaker 1: if that's still true? I love this question. I also
Speaker 1: love to imagine, like how dramatic your body language would
Speaker 1: have to be too?
Speaker 2: Sorry about that.
Speaker 1: I feel like we've talked about this before.
Speaker 2: The body language stuff in general.
Speaker 1: Yeah, and short sellers, well.
Speaker 2: The body language. I feel like body language is a euphemism. Yeah,
Speaker 2: Because the idea is like, right, you're going to meet
Speaker 2: with management of a company that you might invest in,
Speaker 2: and like, you have a meeting and you walk out
Speaker 2: of the meeting and you like learn something and you
Speaker 2: go buy the stock or sell the stock or whatever,
Speaker 2: and the law says that management is not allowed to
Speaker 2: give you a material non public information that isn't already public?
Speaker 1: Can they wink?
Speaker 2: And it's like what happened in that meeting? And like,
Speaker 2: oh if they read the body language, and it's like, no,
Speaker 2: they like said something that like doesn't quite rise to
Speaker 2: the level of disclosure, but like is useful to you,
Speaker 2: and like what you know about the company and how
Speaker 2: you like build your model and how you think about
Speaker 2: the management. So you've you've been given like information and
Speaker 2: like people say body language because then it's like, oh,
Speaker 2: they didn't disclose anything. It's just the body language, right,
Speaker 2: So I think it's a youth wasn't.
Speaker 1: But in any case, maybe they raised their eyebrows suggestively
Speaker 1: when they.
Speaker 2: Were you know, you were like, how do I think
Speaker 2: about this line item in the model? And they're like, oh, well,
Speaker 2: this is everything about that's not material enough to disclose.
Speaker 2: But it's like you've learned.
Speaker 1: Something, right, A smirk snuck onto nobody.
Speaker 2: Language is all fake, except I will say one of
Speaker 2: my favorite stories ever is because I've been writing about
Speaker 2: this for a long time, this idea that like management
Speaker 2: is giving you something useful, and I couldn't possibly not
Speaker 2: be giving you something useful. That's why they have these
Speaker 2: meanings and there's this great paper. These like academics got
Speaker 2: a lot of access to Aberdeen the like yeah UK
Speaker 2: long only asset measure.
Speaker 1: Didn't they take the bellels out of their name.
Speaker 2: I think this was before they took the vowels up
Speaker 2: and now it's Aberden. But so Aberdin or Aberdeen like
Speaker 2: had a bunch of meanings with management, and like these
Speaker 2: academics studied like how they learned, like what they learned,
Speaker 2: and like how they traded, and like basically they got
Speaker 2: useful information from these managintinings. But the academics also had
Speaker 2: access to like their notes from the meetings. There's one
Speaker 2: where they met with the chairman of this company and
Speaker 2: the analyst came back and wrote a note that included
Speaker 2: saying he was looking unfeasibly tanned for this time of year.
Speaker 2: It was like in January or whatever. Yeah, and so
Speaker 2: if you're like the chairman of this company is looking
Speaker 2: unfeasibly tanned, yeah, that's a short, right, Like you sell
Speaker 2: that stuck. And so they did, in fact on the
Speaker 2: stock and it did actually turn out to be a
Speaker 2: well time trade.
Speaker 1: That is so funny.
Speaker 2: It's the only case I know of like true body
Speaker 2: language or body coloring being useful financial information, but anyway,
Speaker 2: they're basically a long investor. Do short sellers meet with
Speaker 2: management to like get talked out of their shorts? Like,
Speaker 2: I think it probably happens. There are probably some companies,
Speaker 2: Like I think most like activist short sellers are interested
Speaker 2: in hearing the company's perspective before they put a lot
Speaker 2: of money into betting against the company. And I think
Speaker 2: it's a mixed bag. You know, how often they're going
Speaker 2: to contact them, and in general, my impression is that
Speaker 2: managements don't like short sellers and so I don't always
Speaker 2: meet with them, But I bet it happens. You know,
Speaker 2: It's funny, Like I feel like I'm aware of Tesla
Speaker 2: short sellers who have like turned around and become like
Speaker 2: huge dust the bulls, And I assume that is not
Speaker 2: from like a friendly meeting with Elon Musk where he
Speaker 2: like explains his thinking and they come away per suaded.
Speaker 2: But like, you know, somehow they like you know, get
Speaker 2: enough of a vibe from them that they change their minds.
Speaker 2: But no, I think it happens. I think I think
Speaker 2: there's like a range of things, and like you see
Speaker 2: a lot of the noisiest short sellers and a lot
Speaker 2: of the most anti short seller managers being very vocal
Speaker 2: about hating each other. But I think, you know, there's
Speaker 2: a wider range, and particularly like you know, a lot
Speaker 2: of people who are short companies are like multi strategy
Speaker 2: hedge funds who are just making relative value bets where
Speaker 2: they don't hate the company. They're just like have to
Speaker 2: be factor neutral or whatever. And I think a lot
Speaker 2: of those people do in fact meet with the companies
Speaker 2: and have kind of rational discussions and will sometimes be
Speaker 2: long and sometimes be short, and do not put a
Speaker 2: lot of like personal animals into it. On either side.
Speaker 1: Well, for my own amusement, I'm going to pretend that
Speaker 1: body language is real.
Speaker 2: No, it's real. There's the one guy with ten Yeah,
Speaker 2: that's true. But I think there's some amount of like
Speaker 2: to the extent you're evaluating managements like quality. Yeah, getting
Speaker 2: a sense of how they talk and how they look
Speaker 2: you in the eye and shake your hand or whatever
Speaker 2: is maybe like a little bit useful. But I think
Speaker 2: the body lineage is super oerrated, and that's mostly they
Speaker 2: have substance of discussions that they just all agree they
Speaker 2: don't have to disclose.
Speaker 1: Douglas has some questions. He has some questions. We're only
Speaker 1: going to answer one of them.
Speaker 2: Douglas asks, since there are more words than letters and
Speaker 2: more sentences than words, is there any logical limit to
Speaker 2: the number of ETFs.
Speaker 1: I love this question.
Speaker 2: Wait, I don't get it. I feel like ETFs are
Speaker 2: limited by the number of letters, right, I mean you've
Speaker 2: written about that.
Speaker 1: Tickers are, Yeah, so I don't think there's any limit
Speaker 1: to the number of utfs. But there are limits to
Speaker 1: tickers because a ticker, right, you need a ticker. US
Speaker 1: exchanges have a four character limit.
Speaker 2: I didn't realize that.
Speaker 1: No, it's four. I mean there are some like weird exceptions.
Speaker 1: The only one I can think of actually is Google,
Speaker 1: which is g O O g L. I don't quite
Speaker 1: know the lore behind that, so maybe, yeah, I know,
Speaker 1: But like, why is it five and no other stock
Speaker 1: is think about it?
Speaker 2: The other four character that have share classes that are five?
Speaker 2: I don't know.
Speaker 1: I don't think so anyway. Anyway, Generally speaking, generally speaking,
Speaker 1: four character limit and no numbers. And that's different than
Speaker 1: Europe and Asia, which can have more than four characters,
Speaker 1: and can also, at least in Asia allow numbers I
Speaker 1: think actually Europe too also allows numbers, and I've written
Speaker 1: about maybe there could be a ticker shortage when it comes,
Speaker 1: especially to the world of leverage single stock ETFs, because
Speaker 1: your ticker is already a derivative of an existing ticker,
Speaker 1: and then you only have, however, many letters to work
Speaker 1: with month three like MST. Yeah, MST something which is
Speaker 1: which is difficult.
Speaker 2: I have asked said the micro strategy mstrs.
Speaker 1: Monster MicroStrategy, Nazak and II. I've asked them about it.
Speaker 1: They've both told me they're not concerned. Currently in the
Speaker 1: US there's like thirty nine hundred listed ETFs, which is
Speaker 1: a lot. I am excited for the day when there's
Speaker 1: more US listed ETFs and there are US publicly listed stocks.
Speaker 1: We're not quite at that point, but we'll see. I
Speaker 1: just love this question, and I love Douglas's phrasing. It
Speaker 1: sounds like a riddle. Matt's textings, No, I'm.
Speaker 2: There are proxtimately four hundred and fifty thousand logically possible.
Speaker 1: Tickers something like that. Actually, when I wrote this story,
Speaker 1: we talked through the math. Yeah, but if you knock
Speaker 1: out two of those characters, three of those characters in
Speaker 1: some cases, then obviously your universe shrinks dramatically because you're.
Speaker 2: Talking rightly, like, yeah, yeah, I feel like I've said
Speaker 2: this on the show before. Like you could imagine a
Speaker 2: world where like the ets become like a like universal
Speaker 2: format for products. Right, Anyone who's like, oh, I want
Speaker 2: to do like, you know, call options on micro strategy,
Speaker 2: be like, oh, do an need app for it? Right?
Speaker 2: In that world, you would need to kind of revise
Speaker 2: the ticker system, right, Like you need to have some
Speaker 2: sort of like mstr slash and then I have like
Speaker 2: a descriptive for new characters. You need to have a
Speaker 2: more organized system than just like pick four letters. Yeah,
Speaker 2: but we're probably not there yet.
Speaker 1: But I don't know.
Speaker 2: Maybe in five years will there be some sort of
Speaker 2: like more complex ticker system to accommodate those just absolute
Speaker 2: tour endo.
Speaker 1: Et aps Like maybe I can't wait, I don't know,
Speaker 1: you say four to five years, perhaps in the year
Speaker 1: of twenty twenty five. Anything could happen this year?
Speaker 2: Yeah, right, it's been it's been a wild year so far.
Speaker 1: Mail Bag mail Bag, Kristen has a question. I'm going
Speaker 1: to read it to you. Kristin says that my sister
Speaker 1: in law was recently talking about the Martha Stewart documentary
Speaker 1: out a few months ago. She was convinced that have
Speaker 1: you seen that round? No, and now I'm gonna watch it.
Speaker 1: Have you seen it?
Speaker 2: I've seen like ten minutes of it. I've not seen it.
Speaker 2: And then Kristen has not seen it as far as
Speaker 2: I can. So we're talking about we're like fourth hand
Speaker 2: as the documentary. This is Kristen's sister in law.
Speaker 1: Yeah, Kristen's sister in law watched the documentary about Martha Stewart,
Speaker 1: and Kristen's sister in law was convinced that everybody just
Speaker 1: ganged up on Martha and that Martha didn't do anything
Speaker 1: wrong because she didn't know it wasn't allowed the insider trading.
Speaker 1: I personally, this is Kristen talking. Kristen personally has not
Speaker 1: kept up with any of that news and has not
Speaker 1: watched the documentary. But Kristen's instinct was that punishment for
Speaker 1: insider trading doesn't require the defendant to be aware of
Speaker 1: the insider trading rules. Was kristin correct or incorrect? I
Speaker 1: know that's an interesting question. I mean does intent matter?
Speaker 2: No? I mean, like intent often matters in like market
Speaker 2: monipulation and stuff. But yeah, in insider trading, the rules are,
Speaker 2: first of all, you don't have to know that it's
Speaker 2: illegal to insider trade, right.
Speaker 1: Yeah.
Speaker 2: In general, ignorance of the law is no excuse, right,
Speaker 2: So if you didn't know it was illegal to insider trade,
Speaker 2: you can't be like, oh, I thought it was fine, right.
Speaker 2: People do that, by the way, Yeah, like you know,
Speaker 2: now you've found on the insider trading case that I
Speaker 2: write about, it's like they're like googling how not to
Speaker 2: get caught insider trading, and then ten persons they're like, what,
Speaker 2: I had no idea. But there's also like another mind
Speaker 2: side question, which is, let's say you were going to
Speaker 2: sell the stock anyway, okay, and then you got some
Speaker 2: bad news. Can you still sell the stock? No? I
Speaker 2: think the SEC's rule is that if you're in possession
Speaker 2: of material on public information, that counts as selling. On
Speaker 2: the basis of material in public information, it seemed pretty
Speaker 2: well established, so yeah, like even if you would have
Speaker 2: sold it anywhere, that doesn't help you. I will say
Speaker 2: that the Martha Stewart case is more complicated than that.
Speaker 2: Like Martha Stewart didn't like get an insider stock tip,
Speaker 2: like her broker got apparently insider stock tip, and then
Speaker 2: the broker's like, hey, I think we should sell that stock,
Speaker 2: and she's like, sure, go ahead, And so arguably, you know,
Speaker 2: it's a little more complicated than that. But I think,
Speaker 2: like my impression and a lot of people's impression of
Speaker 2: the Stewart probably wasn't really guilty of insider trading because
Speaker 2: she didn't know that she was getting a material, not
Speaker 2: public tip. She had no reason to think she was
Speaker 2: getting an illegal tip. And iif you're broker's in charger
Speaker 2: of account, you're not making decisions. That's a little hard
Speaker 2: to accuse you of insider trading. What is relevant is
Speaker 2: that she wasn't connected of insider trading. I don't think
Speaker 2: she was charged with inside of trading.
Speaker 1: I haven't watched the documentary, so this is all.
Speaker 2: I have been either, but I'm familiar with this.
Speaker 1: You took a browse of no.
Speaker 2: I mean I used to, like honestly, like when I
Speaker 2: started at a law firm, it was the law froom
Speaker 2: that like represented Martha Stewart, Like I had nothing to
Speaker 2: do with the case, and she wasn't think they weren't
Speaker 2: her lawyers on the trail. But like we all had
Speaker 2: a various what.
Speaker 1: What year did this happen? Because I was pretty young
Speaker 1: and I wasn't really paying attention. It happened before I
Speaker 1: got there two thousand and four.
Speaker 2: Oh well, so right before I got there. So she
Speaker 2: was in charge of inside of trading. What happened is
Speaker 2: that the insider and her broker got investigated by the SEC,
Speaker 2: and the SEC saw that she like got a call
Speaker 2: from the broker and then he sold her stock, and
Speaker 2: so they went to her and they said, did you
Speaker 2: get a hot insider tip to sell that stock? And
Speaker 2: she said, actually, what happened is that I put in
Speaker 2: a stop loss order saying that, like, if the stock
Speaker 2: goes below sixty dollars, you should sell it. And my
Speaker 2: broker called to say that it was below sixty dollars,
Speaker 2: so I sold it, and that wasn't true. Apparently she
Speaker 2: didn't have a stop loss order, and so she was
Speaker 2: convicted of lying to the investigators, which is its own
Speaker 2: separate crime. But like I think a lot of people
Speaker 2: think she was kind of ill treated because she was
Speaker 2: lying to know about something that wasn't actually a crime,
Speaker 2: and so they shouldn't have been investigating here.
Speaker 1: So I don't know, it is wild that she served time,
Speaker 1: like she went to prison.
Speaker 2: Yeah, I have not watched the documentary, but my wife
Speaker 2: was watched a documentary and we've talked about it. It's interesting,
Speaker 2: Like I think you think now of like Martha Stewart,
Speaker 2: the character she is now has awesome It was awesome
Speaker 2: and very famous. Yeah, like very beloved and like friends
Speaker 2: with Snoop Dogg. You think about that character and like
Speaker 2: going to prison for five months or whatever is like
Speaker 2: the big part of that character, right, Like you sort
Speaker 2: of think like her time in prison has like been
Speaker 2: good for her brand, but if you look back at
Speaker 2: like what actually happened, like it was a huge catastrophe
Speaker 2: for her, Like she had a big company that like
Speaker 2: basically like went away because she was convicted of not
Speaker 2: insider trading and sent to prisident. So it was actually
Speaker 2: like really a sort of quite harsh result for something that,
Speaker 2: first of all, in the scheme of things, was not
Speaker 2: that much money, Like she didn't make a huge profit
Speaker 2: and like she probably didn't insider trade. She probably didn't
Speaker 2: know that she was trading on inside information. Yeah, it's
Speaker 2: her workers, like saw this time. She like, fine, but
Speaker 2: she lied to the investigators.
Speaker 1: And you do a crime, question mark, you do the time.
Speaker 2: No. The actually cliche is the cover up is always
Speaker 2: worse than the crime.
Speaker 1: Oh my god, true true here I should have said
Speaker 1: that Martha Stewart, though, I mean an inspiring story of
Speaker 1: rebuilding oneself. Great energy to take into twenty twenty five.
Speaker 2: And that was The Money Stuff Podcast.
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