Speaker 1: M. This is Mesters in Business with Very Results on
Speaker 1: Bluebird Radio. This week on the podcast, I have an
Speaker 1: extra special guest. His name is Dave Nodded. And if
Speaker 1: this sounds like to all friends just yammering about all
Speaker 1: sorts of market eso ica, well that's because it is.
Speaker 1: I know Dave for a long time, and we kinda
Speaker 1: fell in love with each other's books, music, film, and
Speaker 1: financial history when we first met a hundred years ago.
Speaker 1: And so if it sounds like just too idiots talking
Speaker 1: about really interesting stuff in great detail, and me probably
Speaker 1: speaking more than I usually do during the podcast, well
Speaker 1: that's probably because it is. Um. Dave is really a
Speaker 1: fascinating person with an incredible depth of knowledge about well.
Speaker 1: He's probably best known as the E T F guy,
Speaker 1: and we literally talk about during the show. I got
Speaker 1: tagged to present to the SEC about their new single
Speaker 1: stock product, and my answer was, well, I get all
Speaker 1: my information about this from nating. Why don't you speak
Speaker 1: to him? And they said, we already do. But he
Speaker 1: also has an incredible death of knowledge about market structures,
Speaker 1: about what people get wrong about thinking about systems, about
Speaker 1: what we get wrong about humans and capitalism and finance,
Speaker 1: and I find Dave to be really just an intriguing,
Speaker 1: fascinating guy, full of great humility and insights. And I
Speaker 1: think you'll find this conversation to be really fascinating. With
Speaker 1: no further ado, my interview with vertifies Dave noting, let's
Speaker 1: start in thees when you were at Barclays, which eventually
Speaker 1: becomes black Rock, I shares tell us about what you
Speaker 1: did at Barclays. Oh, I mean mostly I got coffee
Speaker 1: at the beginning, you know, and I joined, Uh, they
Speaker 1: gave me the hypho leading title of Managing Director of
Speaker 1: Corporate Strategy. What it really meant was I was picking
Speaker 1: up little businesses nobody else wanted to pay any attention
Speaker 1: to through all the acquisitions they were doing so. For
Speaker 1: a while I ran Wells Fargo's four O win K
Speaker 1: business because they had acquired that as part of Wells
Speaker 1: Fargo Nico Investment Advisors when we did the Barkley's acquisition.
Speaker 1: When Barkley's acquired Wells Fargo Nico, I then spent most
Speaker 1: of my time in Asia shutting down Barkley's Dessert Wed businesses,
Speaker 1: which were brokerage shops in Australia and Singapore Hong Kong, Japan. UM.
Speaker 1: So I went around and sort of did some rationalization.
Speaker 1: They basically sent the young kid out to get his
Speaker 1: you know, you know what, handed go go go fire
Speaker 1: a bunch of you know, Japanese salaryman that that had
Speaker 1: to be a crazy experience being in Australia and Japan
Speaker 1: in the nineties. It was. It was bonkers, and I
Speaker 1: was very To be clear, I was young and incredibly stupid.
Speaker 1: Now I'm just older and slightly less. Isn't that a
Speaker 1: little redundant I say this. I say this not to
Speaker 1: mock the young, but to reflect on my own youthful
Speaker 1: indiscretions and stupidity. The story of growing a career is
Speaker 1: recognizing how little you knew every previous five years, Yes exactly,
Speaker 1: that five year review was like, wow, I had no
Speaker 1: idea what the hell I was doing? Now I know,
Speaker 1: and then you find out you really don't. So I started.
Speaker 1: I started there. I was lucky enough to be on
Speaker 1: the edges of a product which became webs, which became
Speaker 1: I shares Um. I was absolutely not somebody driving the
Speaker 1: train on that. I was the one reviewing, marketing copy
Speaker 1: and you know, doing presentations to groups of institutions about
Speaker 1: how to use the darn things. Who was driving the
Speaker 1: train on that Oh my gosh, there were so many,
Speaker 1: I mean, you know, success as a thousand fall others
Speaker 1: at this point. And the folks that I mean, so
Speaker 1: the people I was working with on the Wells Fai
Speaker 1: Niko side because this was a joint project with Stanley
Speaker 1: and other folks like that. UM, I was working with
Speaker 1: Don Lusk and Patty Donne Fred Grower were sort of
Speaker 1: the main group. Blake Grossman was the chief investment. He
Speaker 1: stuck around at you know, post into b g I
Speaker 1: for the rest of his career. Um. And so that
Speaker 1: was that was the crew that was really doing the
Speaker 1: hard work there. And then you know the Morgan Stanley side.
Speaker 1: I was working with folks like Joe and Hill who
Speaker 1: you know, um, Marian Stanley one of the quants there.
Speaker 1: UM and then of course all the folks who were
Speaker 1: coming in from the Amex like Nate Most. I mean,
Speaker 1: it was it was a pretty big group of Jim
Speaker 1: was he there at State Street? Um? After that was
Speaker 1: that was Jim Ross was at State Street a little
Speaker 1: bit after that when that was but that was you know,
Speaker 1: when the Spiders build out this was very much counter
Speaker 1: to to spy having been launched. So we were the
Speaker 1: other side of the fence from that. Even though AMX
Speaker 1: was the key, you know, AMEX was the glue holding
Speaker 1: it together because they figured out a lot of the
Speaker 1: how to do creation, redemption, and how to handle book.
Speaker 1: So let me fast forward a couple of years. You
Speaker 1: end up at et F dot com, which clearly is
Speaker 1: a or at least at the time was a dominant
Speaker 1: force in the E t F space when a lot
Speaker 1: of the world of finance looked at ETFs a little scans,
Speaker 1: a little skeptical like yeah, And that was really Jim Wyant.
Speaker 1: He started something called the Index Universe with Stephen Showen
Speaker 1: Fell somebody else you know in the industry UM who's
Speaker 1: now working for I believe Market Beckers in Texas UM.
Speaker 1: And you know, they they had this vision of understanding
Speaker 1: that E T S which at that point we're still
Speaker 1: largely institutional vehicles early two thousand's right. I mean there
Speaker 1: were some advisor pick up, but you had to be
Speaker 1: kind of on the front edge of finance or a
Speaker 1: quant or running your own models, which in two thousand
Speaker 1: three was not that common. Um they had the vision
Speaker 1: there that oh no, this is where all the wealth
Speaker 1: management is going to head um and built a business
Speaker 1: which eventually, through you know, acquiring the right names in
Speaker 1: you or else, became et F dot com. And then we,
Speaker 1: you know, we myself, Matt Hogan, Jim Wyant, a bunch
Speaker 1: of other folks built that business up into a you know,
Speaker 1: pretty respectable, chunky business that had a big conference and
Speaker 1: a huge data but I was focused almost exclusively on
Speaker 1: the data side. Um. And then we broke that into
Speaker 1: pieces so that that was solved though, wasn't it broken?
Speaker 1: So when you say broke into pieces, acquires in a
Speaker 1: positive way. Yeah, Like the pieces ended up being worth
Speaker 1: more than the part, which is not uncom not uncommon
Speaker 1: at all, especially when you're bolting together businesses that do
Speaker 1: in fact have silos themselves. So the data business was
Speaker 1: a natural fit for facts that which needed usc t
Speaker 1: F data. So Elizabeth K Facts is a is a big,
Speaker 1: big operator on that. And now they're now there. I
Speaker 1: think that that we re license the data that I
Speaker 1: helped build over a verify right, I mean they are
Speaker 1: now I still think the go to source for primary
Speaker 1: et F data, So that business continues to run over
Speaker 1: there and and you know, and now here I am
Speaker 1: at Vertifi doing largely a lot of the same work,
Speaker 1: also pushing a big conference that we're excited about Exchange
Speaker 1: in Miami and Florida. We're gonna talk about Vertifi. We're
Speaker 1: gonna talk about Exchange, which is one of my favorite
Speaker 1: events every year. It's always a blast. Um when you
Speaker 1: were running the conference beforehand. The old conference, this was
Speaker 1: at the Diplomat Hotel in Hollywood, Florida, was always late
Speaker 1: January early February, which occasionally went interview with my vacation schedule.
Speaker 1: But you know, to get out of New York in
Speaker 1: February and spend time with three thousand people and just
Speaker 1: absolutely a list speakers. Um, you know, Derek Jeter and
Speaker 1: Go Go I remember, um Joe Montana. Like the sports
Speaker 1: figures were always fascinating, but so too were the finance figures.
Speaker 1: You would people that were very much rock stars in
Speaker 1: that space. Yeah, and that was that was an interesting time.
Speaker 1: I think that's sort of the ten years pre prandemics
Speaker 1: are between GFC and pandemic whatever we're gonna call that window.
Speaker 1: It's not a lost decade. It was a great decade,
Speaker 1: but in that window, like the I mean you were
Speaker 1: on it to the conference circuit was lit. There was
Speaker 1: there was a really interesting finance relevant event every other
Speaker 1: week at least all year long. Well, keep in mind
Speaker 1: what was going on back then. So first you had
Speaker 1: the rise of ETFs. You had a radical expansion of passive.
Speaker 1: My my theory is post Great Financial Crisis, mom and
Speaker 1: pop said, you know, we're done playing this game. We're
Speaker 1: just gonna put the money, let Mr Market do his thing,
Speaker 1: and we'll find out how we did when we get
Speaker 1: ready to retire. Um. But you had that, you had
Speaker 1: e t F you rise a passive, but you also
Speaker 1: had this incredible I'm reluctant to call it PTSD, but
Speaker 1: following the financial crisis, there was this pervasive negativity that
Speaker 1: lasted years and years and years. And to run around
Speaker 1: and say, hey, markets are positive here, you need to
Speaker 1: be more constructive because down fifty is a fantastic reset.
Speaker 1: That was kind of a lonely voice for a few years.
Speaker 1: I think that's a big part of why you had
Speaker 1: the hard metals people doing a lot of stuff. You
Speaker 1: had the rise of crypto. I mean, think about that crypto.
Speaker 1: Crypto is where that enthusiasm went everybody who was finance adjacent,
Speaker 1: tech positive, growth oriented, all of them went into crypto
Speaker 1: in that window, in that to GFC two pandemic window. Huh.
Speaker 1: That that makes a whole lot of sense. So there's
Speaker 1: a lot of other things I want to get to
Speaker 1: with you, but before we do, there's a quote of
Speaker 1: yours that I think is a great leaping off point
Speaker 1: for more discussion. Finance is a problem that has been solved. Yeah,
Speaker 1: so you know, when we think about finance, particularly when
Speaker 1: we think about investing, which is what we spend most
Speaker 1: of our time talking about, right, how to how to
Speaker 1: take your wealth and turn it into more wealth through
Speaker 1: all of these tools out there from you know, I,
Speaker 1: P O S two derivatives. Um, how those pieces fit
Speaker 1: together is no longer a mystery. I mean that's really
Speaker 1: the core of it. Um, the academic side of how
Speaker 1: to build a portfolio. We can argue about the details, right,
Speaker 1: and certainly we could have a whole conversation about you know, Okay, well,
Speaker 1: this combination of interest rates and inflation and expected returns
Speaker 1: on equities is different, and so maybe we need to adjust.
Speaker 1: But the tools to do that are largely baked Anybody
Speaker 1: who has the curiosity and the basic intellectual capacity to
Speaker 1: learn about the markets can become a fairly sophisticated investor. So,
Speaker 1: if you're an advisor, and I spend most of my
Speaker 1: time talking to the wealth management institutional business, if you're
Speaker 1: an advisor, you should not be spending a lot of
Speaker 1: your time trying to add alpha through understanding investing better
Speaker 1: than the rest of the market. That is a mug's game, right,
Speaker 1: So don't try to solve that problem. It's largely solved.
Speaker 1: You can go get some turnkey asset management program as
Speaker 1: an advisor, you could get somebody's model portfolio, or you
Speaker 1: could hire some you know, three c f a s
Speaker 1: and do it yourself. But it shouldn't be your primary focus.
Speaker 1: Your primary focus should be solving the much harder problem,
Speaker 1: which is actually working with human beings. Right. The advice
Speaker 1: part of being a financial advisor is the hard part.
Speaker 1: That's the part where you should earn the money. We're
Speaker 1: kind of upside down and how we compensate and how
Speaker 1: we think about markets. Right, some advisor that's out there
Speaker 1: and can say, oh, I've generated one percent alpha for
Speaker 1: the last three years in my model portfolio, everybody's going
Speaker 1: to talk about that. But when you talk to that
Speaker 1: same advisor and they say, yeah, you know, they are
Speaker 1: these five families I've worked with for ten years, and
Speaker 1: because I've worked with them, generations of wealth are going
Speaker 1: to be preserved and these feel philanthropical exercises are going
Speaker 1: to be put forth like that's the real success story.
Speaker 1: I don't need to tell you that that's your business, right,
Speaker 1: that's the real success story. And that's much harder than investing,
Speaker 1: really really quite quite interesting. You have to explain to
Speaker 1: me the name of this firm. I've given you grief
Speaker 1: about this. What is edify? Alright? So well, the shortest
Speaker 1: answer about how to think about that, if I is
Speaker 1: where morning start without a ratings business? Right, So like
Speaker 1: a financial think tank. Yeah, we're in the business of
Speaker 1: sitting in between asset owners, financial advisors, institutions, retail and
Speaker 1: asset managers right the black Rocks, State Streets, Pimco's of
Speaker 1: the world, and helping them understand each other. What I
Speaker 1: spend most of my time doing is helping advisors understand
Speaker 1: the thousands of crazy ideas the asset management comes up
Speaker 1: with every year. And then I work with the asset
Speaker 1: management community to help them understand the hundreds of thousands
Speaker 1: of financial advisors and institutions who may or may not
Speaker 1: be interested in any of those products whatsoever. And so
Speaker 1: what that entails is a lot of good data understanding
Speaker 1: what both sides want of each other. It understands. It
Speaker 1: means having to understand markets, because if you're gonna understand
Speaker 1: the asset management industry, you need to understand well why
Speaker 1: you're managed. Future is part of the conversation here today
Speaker 1: but not six months ago, and it means spending a
Speaker 1: lot of time talking to individual advisors and investors who
Speaker 1: are out there trying to do the real work. So
Speaker 1: that's where vertify sits the company, like the meet and
Speaker 1: the bones underneath it brands folks know on et F
Speaker 1: trans et F database. We recently emerged with Advisor Perspectives,
Speaker 1: which is the largest advisor newsletter in the country. So
Speaker 1: we've sort of cornered a market on this dialogue between
Speaker 1: asset managers and financial advisors, and it goes both ways.
Speaker 1: We also do a lot of polling with financial advisors.
Speaker 1: We meet them at conferences, we do surveys of them,
Speaker 1: We track their behavior as they're doing research using our
Speaker 1: data and analytics tools, and that lets us really get
Speaker 1: an interesting picture of Hey, what are advisors thinking this week? Well,
Speaker 1: we can kind of tell you because we know what
Speaker 1: they're researching. We know you know how they answered pole
Speaker 1: questions last week, we know how they answered a survey
Speaker 1: two weeks ago, and then we write about that. We
Speaker 1: produce fifty odd pieces of content today. So here's the question.
Speaker 1: Are your clients the advisors or are your clients the
Speaker 1: institutional asset managers? Or both? Both? Is the real answer?
Speaker 1: I think the way to think about this is we're
Speaker 1: a business to business organization in terms of where you know,
Speaker 1: if you're gonna look at the revenue lines, but with
Speaker 1: b TWOC responsibilities, right, we take our relationship with the
Speaker 1: financial advisor very very seriously. In my position, that's really
Speaker 1: almost exclusively what I focus on, all right, And this
Speaker 1: leads me to a question that I never in a
Speaker 1: million years thought I would get to ask on this show.
Speaker 1: But what the hell is the financial futurist? Your title
Speaker 1: is a financial futurist? Yes, who came up with that? Who?
Speaker 1: What are the responsibilities? What does a financial futurist do?
Speaker 1: Like I expect you to be in one of little
Speaker 1: storefronts with the red light people to win financial and
Speaker 1: I hand you a card to the glass Madame Zolof
Speaker 1: with the turban on in the whole night Year, it's
Speaker 1: like big thank you here and I think it's actually
Speaker 1: a dude in the movie, but it is neither here
Speaker 1: nor there. Um. So look about a year ago. I
Speaker 1: had a conversation with the senior management of the company
Speaker 1: as we were putting Verified together, right, and we would
Speaker 1: you know, one of the things we use as a
Speaker 1: hook when we talk about the company is we're trying
Speaker 1: to turn it from an industry to a community. What
Speaker 1: we mean by that is that we focus on finance
Speaker 1: a lot on rules, regulations, process operations, none of which
Speaker 1: matter at all, and we've often just ignore the fact
Speaker 1: that they're human beings at the end of this equation.
Speaker 1: Now that's changed because of a lot of what's going
Speaker 1: in behavioral finance, and I think that's great. I don't
Speaker 1: think it goes nearly far enough. I think human centered
Speaker 1: organizations are always going to win, So we really tried
Speaker 1: to skew the organization towards that. So with that context,
Speaker 1: I said, here's a bunch of stuff I want to
Speaker 1: write about, which is the stuff we've been talking about,
Speaker 1: how the markets work, how people it into them. And
Speaker 1: I literally just started putting adjectives and nouns on piece
Speaker 1: of paper, trying to figure out, like, well, how do
Speaker 1: I describe the work that I think I should be
Speaker 1: doing and that hopefully people find at least entertaining, if
Speaker 1: not valuable. Uh and a little from column A little
Speaker 1: column B. You know, I've spent most of my career
Speaker 1: writing and thinking about finance. Most of what I've done
Speaker 1: has been taking an understanding of the status quo, which
Speaker 1: is very brief because next tomorrow it's gone, and trying
Speaker 1: to help people understand what that means for next week,
Speaker 1: in the next year, and the next decade, to position
Speaker 1: products underneath it, like a t S in two or
Speaker 1: model portfolios in two thousand, or direct indexing in two right,
Speaker 1: really trying to focus on that. Now it would be
Speaker 1: tokenized asset management. It's like, you can see these things
Speaker 1: if you're paying attention, but it's super easy to get
Speaker 1: really excited and spend lots of money chasing them. Having
Speaker 1: some context is important. So you mentioned direct indexing. Let's
Speaker 1: go there because I always disliked the broad context of
Speaker 1: direct indexing as how it was done previously. I couldn't
Speaker 1: stand the fifty pages of stockholdings every month or every quarter.
Speaker 1: But I give you credit for the person who kind
Speaker 1: of turned me around on that. I don't want to
Speaker 1: say it was ten years ago, but it was probably
Speaker 1: like five years ago, maybe a little longer that you
Speaker 1: pointed out there are a lot of things you can
Speaker 1: do with direct indexing in terms of and you were
Speaker 1: way ahead of the software. You had talked about things
Speaker 1: before it was available, that you could tilt towards a
Speaker 1: variety of e s g. Things, Hey show me companies
Speaker 1: where the board has at least two women on it,
Speaker 1: or you could tilt towards value where you could tilt
Speaker 1: towards small cap, or you could use it for tax
Speaker 1: lost harvesting or philanthropy. And you kind of opened my
Speaker 1: eyes up. Full disclosure. We work with O'shanna Sees Canvas,
Speaker 1: which was recently purchased by Franklin Templeton, and we're the
Speaker 1: largest client to that about a billion of three billions
Speaker 1: in at But I give you credit because if you
Speaker 1: hadn't opened my eyes to the advantages of what you
Speaker 1: can do with that. Um, we might not have stepped
Speaker 1: as aggressively into it as we did. I was primed
Speaker 1: two and receptive to see the things that were possible.
Speaker 1: So full credit to you. Now tell us about what
Speaker 1: is tokenized financial investments? Well, so you know, if you
Speaker 1: think about right now, I have a million dollars I
Speaker 1: want to put the work I wish I have a
Speaker 1: hundred thousand dollars I want to put to work. I
Speaker 1: have lots of different ways I can get that number
Speaker 1: to go up, and ultimately, let's be honest, that's what
Speaker 1: you care about. As an individual investor, I have a
Speaker 1: hundred thousand dollars, I would like to have a hundred
Speaker 1: and ten thousand dollars? How do I get there? And
Speaker 1: right now we throw it into the stock market, and
Speaker 1: we effectively use a tokenized system, right, I mean, nobody
Speaker 1: really carries shares around anymore. You want, you gotta led
Speaker 1: your entry at seeding company down on Water Street, right like,
Speaker 1: It's it's all just this fiction that we've created to
Speaker 1: keep track of notional ownership, and then we built this
Speaker 1: enormous infrastructure around it. So now we have payment for
Speaker 1: order flow and seventeen market centers and you know, reagaan
Speaker 1: MS judging who what has to get broadcast to who.
Speaker 1: When we made all this up, I think it's really
Speaker 1: important to remember this is fiction. We just created the
Speaker 1: system out of whole cloth. You can trace why, and
Speaker 1: there's lots of reasons, but you could invent another one.
Speaker 1: Inventing another one is what crypto has done. If you're
Speaker 1: in Europe right now, for instance, and you open up
Speaker 1: an account at ft X dot d E, which is
Speaker 1: you know f t X is European business in Germany,
Speaker 1: you can trade Tesla, but not as a stock. You
Speaker 1: can trade what is effectively a fungible token, right, a
Speaker 1: unit of Tesla. You and I can trade that in
Speaker 1: the ft X closed ecosystem all day long, with no
Speaker 1: trading costs, no settlement, no slippage, no nothing. It's a
Speaker 1: bearer instrument. It's like me handing you a pencil. You
Speaker 1: just now have the pencil and I don't, and the
Speaker 1: legal claim is the fact that you've got it and
Speaker 1: I don't. That's scary for all sorts of reasons, but
Speaker 1: it's also incredibly powerful because if you imagine that world
Speaker 1: where instead of it being this closed ecosystem in Germany.
Speaker 1: It's just sort of how global markets work, all of
Speaker 1: a sudden, almost any beta, any risk, any ownership stake
Speaker 1: that you want, as long as you can get two
Speaker 1: people to agree on what the tokens mean and how
Speaker 1: they unwind, to unlock some sort of underlying value, we
Speaker 1: can do all sorts of crazy stuff through the crypto
Speaker 1: rails that we could never have done before. You want
Speaker 1: to put together a portfolio, Great, here's a smart contract.
Speaker 1: It owns these fifteen other tokens that happened to be
Speaker 1: stocks that can be managed in real time by the
Speaker 1: contract itself. Creation redemption literally just becomes buying the thing
Speaker 1: redemption of right. You can create the TF on the blockchain.
Speaker 1: People have already done this. This is not news. Um.
Speaker 1: There's a thing called the set product all call. You
Speaker 1: can create a portfolio with a set of rules, and
Speaker 1: you can even put in a fee of how much
Speaker 1: you want to get paid because you came up with
Speaker 1: a smart contract. And there's hundreds of thousands of these
Speaker 1: things out there already, so the rails for doing it.
Speaker 1: The smart to the people talking about ethere and being
Speaker 1: the world computer, right, there's real truth to that. There's
Speaker 1: work being done by a computer there to keep track
Speaker 1: of ledger entries and to move those ledger entries around,
Speaker 1: which is the entire stock market. It's moving ledger entries around.
Speaker 1: So we're recording this on the same day that Matt
Speaker 1: Levine's Business Week Right dropped, like this is the second
Speaker 1: time in Business Week's history where one writer has written
Speaker 1: the entire book issue right. It's like fifty words, and
Speaker 1: it begins by saying, everything in the world these days
Speaker 1: that reflects ownership is a data database. You remind me
Speaker 1: of that in what you were talking about UM at FTX,
Speaker 1: which really raises the question if everything is a database
Speaker 1: and the blockchain is a public and verifiable, transparent database.
Speaker 1: The pushback to crypto continues to be, hey, it's been
Speaker 1: around for fifteen years, how come it isn't doing anything
Speaker 1: yet substantially? Why is it still so experimental and so small?
Speaker 1: And I honestly don't know how to answer that. It's regulatory,
Speaker 1: That's the literally the one word answer is it's regulators. Um.
Speaker 1: The thing that is keeping the entirety of normal markets
Speaker 1: from collapsing and being replaced by free crypto software is
Speaker 1: that their rules that won't let that happen um and
Speaker 1: their rules that are there for a very good reason, right.
Speaker 1: I mean, we have a lot of security laws in
Speaker 1: this country, not because we're obsessed with lawmaking, but because
Speaker 1: some bad stuff happened and we fixed it by breaking
Speaker 1: rules about it, right that, you know, going back to
Speaker 1: the twenties, actually going back to the fourteen hundreds, we
Speaker 1: have rules about how we engage in these transactions. And
Speaker 1: the rule of law is a big deal. How that
Speaker 1: interacts with this sort of bear bond instrument world where
Speaker 1: literally ownership is the entirety of the law is unknown territory. Right,
Speaker 1: we have to rewrite how we think about intellectual property,
Speaker 1: how we think about property rights themselves, how we think
Speaker 1: about ownership and scrow and security is a huge one.
Speaker 1: Knowing your customers a big one. Anti money laundring. Those
Speaker 1: are real issues. So I don't want to I don't
Speaker 1: want to pretend that those aren't real issues, and they're
Speaker 1: going to take years to solve. This is not something
Speaker 1: we're not gonna flip a switch tomorrow. But what I
Speaker 1: fear is going to happen is because the block is
Speaker 1: now regulatory, we're gonna end up in the world's biggest
Speaker 1: regulatory arbitrage race where you're gonna and we've already seen this.
Speaker 1: Their jurisdictions where you can kind of get away with
Speaker 1: doing anything to do in crypto and hey, I'm sorry,
Speaker 1: if you lost a million dollars, call interpoll, maybe they'll
Speaker 1: figure it out for you. Right, And then there's jurisdictions
Speaker 1: like the United States, which are quite locked down. The
Speaker 1: problem is that if I'm right, if the world does
Speaker 1: move more quickly towards this and you start seeing capital
Speaker 1: follow it more than it even has already, you end
Speaker 1: up with this weird haves and have nots world where
Speaker 1: the United States actually ends up on the sort of
Speaker 1: butt end of innovation UM and plays catch up for
Speaker 1: the next twenty years, and another financial center will emerge
Speaker 1: where the I p O s are happening, where private
Speaker 1: equity is is really congealing um, where interesting M and
Speaker 1: A activity is happening, and it ain't gonna be New York.
Speaker 1: I'd like to push against that. I'm kind of a
Speaker 1: fan of the United States. I wouldn't mind us leading here.
Speaker 1: I think you live here rules I I believe I do, yes,
Speaker 1: So you would like to see leadership from the U
Speaker 1: S and it. It just there. There's seems to be
Speaker 1: no interest in a crypto et F. What's that about? Well,
Speaker 1: just Gary ginstlur, is that more institutional? Um? So the
Speaker 1: bitcoin ETF debate right, and gray scale is now suing
Speaker 1: the sec always a great move. Suing your regulators always work.
Speaker 1: They love it. They just say yes after you sue them.
Speaker 1: But here and there there. Yeah, So people have been
Speaker 1: trying to put bitcoin in e T F rapper frankly
Speaker 1: since bitcoin was invented um And the problem is it
Speaker 1: makes you have to define what bitcoin is because there's
Speaker 1: certain things you can put into a mutual fund or
Speaker 1: et F rapper and certain things you can't write. You
Speaker 1: can't put a stake dinner in an e T F rapper.
Speaker 1: Their rules about it, and uh, nobody has been able
Speaker 1: to agree yet whether or not bitcoin belongs in those rappers.
Speaker 1: So we've ended up with these weird edge cases where
Speaker 1: the futures based products get approved, but the species based product,
Speaker 1: I mean, the specie products can't be and it's it's
Speaker 1: an absolute mess. It's the front end of the problem
Speaker 1: we're talking about where crypt where cryptoregulation is actually the
Speaker 1: largest problem in the space. So let me push back
Speaker 1: a bit, because I became dramatically enamored of an idea
Speaker 1: of smart contracts and using them. Let me preface this
Speaker 1: by saying, I'm not a big fan of ticket Master
Speaker 1: and Live Nation, which is now monopoly. There are some
Speaker 1: just ridiculous fees and the whole thing is just an
Speaker 1: egregious affront to free market capitalism. Hold that aside, but
Speaker 1: the idea behind smart tickets that if Taylor Swift says,
Speaker 1: I'm gonna put all of my concert seats on a blockchain,
Speaker 1: and so therefore I'm going to offer the first round
Speaker 1: to my hardcore fans who have been newsletter subscribers for years,
Speaker 1: and the next going to give to my junior fans,
Speaker 1: and then the last one I'll open to the public.
Speaker 1: And by the way, built into this is if you
Speaker 1: decide to sell it at a markup, I get half
Speaker 1: of that markup, but in no cases canna be higher
Speaker 1: than X, and so you stop the you know, you
Speaker 1: basically demolish the entire um. Stub hub seek geek, absolutely egregious.
Speaker 1: How do we use bots? You know, if they were
Speaker 1: just reselling tickets, it's one thing, But they seem to
Speaker 1: have gained the citizens, they buy all the tickets, buy
Speaker 1: the tickets first, and you know, there's a reason why
Speaker 1: artists offer their tickets at affordable prices to their fans,
Speaker 1: and these um rentiers in the middle are abusive. So
Speaker 1: all this comes back to, if the technology exists for that,
Speaker 1: why haven't we seen a major artist who was it?
Speaker 1: Was it Pearl jam tried to buy Nobody seems to
Speaker 1: be able to come up with a way to do this.
Speaker 1: So the reason is because you know, when we look
Speaker 1: at how the corporate economy were works their investments that
Speaker 1: you have to make like the ticketmaster wins a great
Speaker 1: example because the technology to do that is trivial. We
Speaker 1: can stand them up on three of the computers here
Speaker 1: in this control room right now. That's the easy part.
Speaker 1: The hard part is it's Madison Square Garden Friday night
Speaker 1: at seven o'clock and you have twenty five thousand people
Speaker 1: you have to get through the gate in the next
Speaker 1: hour to get to the Taylor Swift concert that's about
Speaker 1: to go live. That infrastructure having forty five guys standing
Speaker 1: there with the scanners going to the network confirming your
Speaker 1: ownership that this is the tip it has already been
Speaker 1: used once, it hasn't been used twice. That and used
Speaker 1: that right now, every time I saw Hades Town and
Speaker 1: they don't even scan the ticket, you put your phone
Speaker 1: on it just it's not you're not even looking at that.
Speaker 1: If you are, find all of that is a whole
Speaker 1: bunch of trust. Infrastructure that says the digital signature coming
Speaker 1: off Barry Ridholt's wallet is the thing that says they
Speaker 1: can go see Haydes Town. Right. That infrastructure is actually
Speaker 1: the hard part because implied in that is a whole
Speaker 1: lot rule of loss stuff like wait a minute, Barry
Speaker 1: and I show up at the same time with the
Speaker 1: same ticket, how do we determine which one of us
Speaker 1: is the one that actually got to go in? How
Speaker 1: do we determine which one of us owns it? What's
Speaker 1: the recourse if you stole it from me? In other words,
Speaker 1: if someone took a scan of that QR. That's the
Speaker 1: problem with enforcement and and the last mile of all
Speaker 1: of these things. Right, This is the part that I
Speaker 1: always I sort of compare to blockchain solve that I've
Speaker 1: been told over and over again. Oh, bitcoin fixes bitcoin
Speaker 1: solves everything, Except it's not molecular, right, It's still digital.
Speaker 1: At the end of the day, most of the things
Speaker 1: we actually give a you know what about our molecular
Speaker 1: We want the coffee cup, we want to go to
Speaker 1: the space to see the event where sound waves propagate
Speaker 1: through the air from another human being on stage. At
Speaker 1: the end of the day, you've got to have that
Speaker 1: interface between the virtual and the real. Otherwise none of
Speaker 1: this matters at all. And it's precisely that boundary that
Speaker 1: is the problem right now. So let's talk a little
Speaker 1: bit about a conference. I have participated in the t
Speaker 1: F Exchange over the years. Vitified just purchased this from
Speaker 1: Advisor Circles. I'm an investor in Advisor Circle, so I
Speaker 1: don't know any of all that, right, So full disclosure.
Speaker 1: We're talking about something that I kind of have an
Speaker 1: interest in, or I used to have an interest in,
Speaker 1: but I'm still a participant in the event. Well, we'll
Speaker 1: see whether we get you an that's right, Listen. I
Speaker 1: always feel like more disclosure is better than less, So
Speaker 1: I'll let the lawyers sort that part, the part I
Speaker 1: pay attention to with the content. So let's talk a
Speaker 1: little bit about e t F Exchange. This has always
Speaker 1: been just a massive event you mentioned earlier in the
Speaker 1: heyday of financial conferences. This I think was one of
Speaker 1: the biggest events I went to each year. Yeah, we
Speaker 1: probably need to point out that like this is in
Speaker 1: some ways the spiritual successor to the old inside et
Speaker 1: S event. That event is still going on, and I
Speaker 1: don't want to pretend that it doesn't exist. It is
Speaker 1: now owned by a big conference company named Informa, and
Speaker 1: they still put on those events. Wealth Stack was an
Speaker 1: event that you all used to do with them. That's
Speaker 1: now part of that event. Again more disclosures. So Informa
Speaker 1: ran uh wealth Stack. We were partners with them for
Speaker 1: Wealth Stack, which ran one year and we were ready
Speaker 1: to do the next one when the pandemic hit. That's
Speaker 1: the only reason that everything got juggled. Everything got juggled,
Speaker 1: and then after everything reopened, their staff had left. It
Speaker 1: was a whole craziness. The whole world sort of reset
Speaker 1: and so um we worked with Advisor Circle on future Proof,
Speaker 1: not with Informer because they were kind of they're in
Speaker 1: Europe and they were a little skittish when the US
Speaker 1: was reopening. But hold all that nonsense aside. Tell us
Speaker 1: a little bit about why have UH an E t
Speaker 1: F conference. You know is an E t F to
Speaker 1: settled area. Tell us a little bit about this event. Well, no,
Speaker 1: because E t F are where everything interesting in the
Speaker 1: world is still happening. I think that's part of the
Speaker 1: part of the reason I'm still in the E t
Speaker 1: F business, although I don't have it in my title anymore,
Speaker 1: is that regardless of what you're trying to get done
Speaker 1: with that hundred thousand dollars you're trying to make go up,
Speaker 1: ETFs are probably the right answer under the hood in
Speaker 1: terms of the structure. So whether you're trying to get
Speaker 1: managed futures from an active manager or you know, two
Speaker 1: month treasuries T bills, like the whole spectrum is now
Speaker 1: available in the close to three thousand et F s
Speaker 1: we have trading here in the US. It's like the
Speaker 1: mutual pun business back in the eighties, and so we
Speaker 1: have more ETFs. There are stocks just about getting close
Speaker 1: getting close well in in the world. It's like thirty
Speaker 1: thousand actual tickers out there in the world. But the
Speaker 1: point is they're more E t F than you could
Speaker 1: ever possibly use in one portfolio. Most people probably only
Speaker 1: need a handful to accomplish whatever objectives they're going to do.
Speaker 1: But the reason why we have an event around it
Speaker 1: is because so much of the interesting innovation and finance
Speaker 1: happens through that structure. Because the et F structure lends
Speaker 1: itself naturally to this sort of movement of risk from
Speaker 1: bucket to bucket in a very retail friendly package. It's
Speaker 1: sort of like the best thing we've come up with.
Speaker 1: It's like people ask, like, well, why are trains a
Speaker 1: certain width? Well, because history just sort of got us
Speaker 1: to this configuration where now everything runs that way and
Speaker 1: nobody's going to invent a new gage of train track. Uh.
Speaker 1: This of the rails that we have at the moment
Speaker 1: and probably for the rest of my career, the e
Speaker 1: t F still looks like the most efficient set of
Speaker 1: rails anybody's figured out how to put down. So why
Speaker 1: have a conference about it? Well, Uh, largely because we
Speaker 1: want to get those interesting conversations going. My perspective on exchanges,
Speaker 1: I'm there to have interesting conversations, and when I'm talking
Speaker 1: to a bunch of financial advisors and a bunch of
Speaker 1: finance investment management types, that tends to be the most
Speaker 1: interesting conversation because you get the real human use in
Speaker 1: the room and you get the real human smarts in
Speaker 1: the room, and that's when the magic happens. So, whether
Speaker 1: it's getting a bunch of folks on stage to have
Speaker 1: a really interesting conversation about you know, geopolitical concerns in Ukraine,
Speaker 1: or whether it's just being able to have a small
Speaker 1: breakfast with four five advisors and some academic where we
Speaker 1: talk about behavioral finance, those are the interesting conversations. So
Speaker 1: exchange is really all about creating that sense of community
Speaker 1: between groups of folks, and some of that content that's
Speaker 1: on the stage and a lot of it isn't we
Speaker 1: learned that. I think at future Proof this is a
Speaker 1: community event. This is about people getting together and exchanging ideas,
Speaker 1: and I think that's a lesson we've learned from the pandemic,
Speaker 1: not just from that conference. People want to get together
Speaker 1: and talk. You know. It's funny because financial conferences and
Speaker 1: maybe conferences in general, everything is based on an academic model,
Speaker 1: and people took the big lecture halls out as their
Speaker 1: frame of reference. Hey, a bunch of people on stage
Speaker 1: talking to a bunch of people in the audience taking notes.
Speaker 1: But the most interesting part of college wasn't necessarily the
Speaker 1: big lecture halls. It was the class let's out and
Speaker 1: you start to talk to people about, hey, could you
Speaker 1: explain this. I don't understand what's going on? And then
Speaker 1: the subsequent conversations that's the really exciting driver, not you know,
Speaker 1: the panel of people telling you here's why interest rate
Speaker 1: is going to go up or down and what's wrong
Speaker 1: with inflation today. So based on that, let's dive a
Speaker 1: little bit into some of the innovations in finance and
Speaker 1: ETFs you reference. Let's start with active ETFs. Uh. They
Speaker 1: were looked at kind of skeptically a few years ago. Hey,
Speaker 1: e t f s are all that low cost passive indexing.
Speaker 1: Why do I want an active ETF? Well, the short
Speaker 1: answer is because if you're an active manager, it's the
Speaker 1: only way you're gonna get any customers. Right. So right,
Speaker 1: there's a bit of a there's just a bit of
Speaker 1: reality in that. I mean, at this point we're still
Speaker 1: something like ten twelve percent of the flows the assets
Speaker 1: are are inactive. It's still a fairly small number. How
Speaker 1: much of that is just arc and Cathy Woods versus
Speaker 1: everybody a decent chunk. But remember a lot of the
Speaker 1: fixed income complex is actually managed right, most of the
Speaker 1: product I want to say most of the vast majority
Speaker 1: of this. Well, I mean there's like t LT you
Speaker 1: at the big treasury funds l q D and h
Speaker 1: y G, and those are sort of big betas and
Speaker 1: fixed income, and that's where the biggest funds are. But
Speaker 1: if you get below that tier, you know all the
Speaker 1: Pimco of funds, anything sort of interesting being done at
Speaker 1: the short end, even like a lot of the short
Speaker 1: treasury stuff is technically actively managed because it moves so
Speaker 1: fast you couldn't possibly want to try to trade down
Speaker 1: an index. And the academics have demonstrated that active actually
Speaker 1: creates worthwhile returns in bonds where it's certainly at least
Speaker 1: the evidence is a little stronger, a lot stronger than
Speaker 1: versus equities, where there's really no argument left. Yeah, So
Speaker 1: this is one of those things where my personal belief
Speaker 1: system tends to I have to check that at the door.
Speaker 1: The reality of the market right now is active management
Speaker 1: is a thing in the E t F space. While
Speaker 1: it is still a fairly small part of flows, call
Speaker 1: it between ten and and a given period um, it's
Speaker 1: an enormous part of revenue because most of these funds
Speaker 1: charge more not judging five judge, so you know, they
Speaker 1: may only be ten percent of the assets, but they're
Speaker 1: more like of the revenue. And active managers are a
Speaker 1: big deal in the E t F space now. And
Speaker 1: I would also point out a lot of the ones
Speaker 1: that have been successful um and are continuing to gain assets,
Speaker 1: whether not they're putting up alpha or not. I think
Speaker 1: it's always a tricky question. It seems like an easy one,
Speaker 1: but there's a lot of miss benchmarking that goes on this. Yeah,
Speaker 1: that's a great cheat, like we're gonna make a benchmark
Speaker 1: much easier, and and and fixed income. This is really
Speaker 1: an issue because a lot of people just default to
Speaker 1: benching against the agg when they have no And you know,
Speaker 1: most people who are an active bond manager, like they're
Speaker 1: focused on credit, right, They're focused on a niche they've got,
Speaker 1: I am working on securitized stuff whatever. They're not trying
Speaker 1: to eek out fifty basics right right, They're not even
Speaker 1: owning the long Treasury attorney of that stuff. So the
Speaker 1: Apple's Apples thing is a real issue. Putting that to
Speaker 1: the side. If you look at what Cathy Wood has
Speaker 1: done at the ARC team, right, they're they're interesting. Their
Speaker 1: performance has been awful, and their flows have been solid,
Speaker 1: meaning money is not leaving. Let me let me annotate
Speaker 1: that slightly, since their performance has been so I'm leading
Speaker 1: up to do went No one even came in second
Speaker 1: they I think she was plus one six when the
Speaker 1: market from the lows. From the lows, the market was
Speaker 1: up six and I think it was up eighteen percent
Speaker 1: for the year. That just astonishing pattern of sort of
Speaker 1: high innovation growth managers. We've seen this several times, not
Speaker 1: just in the dot com era, though we played plenty
Speaker 1: of it. Then look you look over a long cycle
Speaker 1: and it's like, well they kind of did with the
Speaker 1: spire over ten years, but eve and with crazy up
Speaker 1: and down lone. Right, But if you look at that,
Speaker 1: they've managed to hang onto investors. You look at things
Speaker 1: like um Andrew Beers DBMF, which is the pulling a
Speaker 1: billion dollars this year. Really, yeah, good for him. It's
Speaker 1: up three. I mean, that's why. But I also think
Speaker 1: it's a solid strategy. You know, it's effectively a quant
Speaker 1: model that's duplicating that sort of ct A style of
Speaker 1: management has done very well. There are a lot of
Speaker 1: little pockets like that where you can say, oh, here's
Speaker 1: an active manager who's providing interesting beta that other people
Speaker 1: aren't really getting access to, and they're doing it in
Speaker 1: a in a you know, more useful and interesting way
Speaker 1: that there's also some story behind. You understand why you're
Speaker 1: doing it. Now, you understand what it means when rates
Speaker 1: go up another seventy bps um. That I think has
Speaker 1: become pretty important. So as much as I'm personally still
Speaker 1: a pretty strong skeptic of active management, I mean, I
Speaker 1: understand the math and the odds are not in your
Speaker 1: favor as an active manager, but you have to be
Speaker 1: doing something both incredibly disciplined and incredibly well to have
Speaker 1: any success there. I think we're now in a market
Speaker 1: where we'll be able to pick those people out now.
Speaker 1: Whether they're coin flippers who just happened to get heads
Speaker 1: twenty times in a row or not, history will judge.
Speaker 1: But there's demand from advisors, there's demand from institutions, there's
Speaker 1: definitely demand from retail, and there's plenty of supply and
Speaker 1: the asset management business side. So I remember, first of all,
Speaker 1: Andrew Beau was a previous guest. I find him to
Speaker 1: be really fascinating guy. If I recall correctly, he started
Speaker 1: doing hedge fund replications in an at I don't know
Speaker 1: how well those have done, but it wouldn't surprise me
Speaker 1: that managed futures replication given how much commodities have run
Speaker 1: up and run down. If you're doing a trend following model,
Speaker 1: which a lot of the managed futures do, and I'm
Speaker 1: assuming he found a way to create that could be
Speaker 1: a giant winner. Yeah, and it has been right So
Speaker 1: that is, you know, a little bit of a lightning
Speaker 1: in a bottle of right place, right time. Maybe that
Speaker 1: fund was around for year or two before people paid
Speaker 1: any attention. How did the hedge fund replication work out?
Speaker 1: So most of the hedge fund replication products have not
Speaker 1: done particularly well. Index i Q launched a bunch of
Speaker 1: those about a decade. The price you to execute, I meant,
Speaker 1: but the price you to run. But they're also there's
Speaker 1: there's also a mismatch. And anytime somebody says I'm going
Speaker 1: to replicate this unobtainable pattern of returns with this obtainable
Speaker 1: pattern of returns, because I can watch in the mirror
Speaker 1: and see what they're doing, and then replicated over here,
Speaker 1: I read all those academic papers. I understand where the
Speaker 1: math comes from. I'm very skeptical about them. Not because
Speaker 1: I think people get the math wrong, because I think
Speaker 1: the world changes the leg the lag is deadly. You
Speaker 1: and I have talked about the world changes constantly. Right.
Speaker 1: In fact, you and I had a conversation that when
Speaker 1: you perceive the world, you're already perceiving it on a
Speaker 1: leg because of how long it takes for life. Yeah,
Speaker 1: I mean, this is there the foundation of how I view, like,
Speaker 1: my financial futurist model starts with the premise that our
Speaker 1: understanding of how humans work is wrong to start with, Like,
Speaker 1: so just the nature of human existence we've all got wrong.
Speaker 1: So therefore any certainty you apply to anything else in
Speaker 1: the universe you've got to put with a huge grandness.
Speaker 1: We're gonna talk more about that in the bit. I
Speaker 1: want to stick with each other. We no, no, I
Speaker 1: brought it up, but because it's so fascinating, So we
Speaker 1: haven't talked about thematic ets, biblical partisan. Our friend Perth
Speaker 1: Tolls Economic and then there's another one that does emerging markets.
Speaker 1: Dm c Y does emerging and developed market. I think
Speaker 1: that's the one, right, and that's got sort of a
Speaker 1: broader methodology. Per tolls, f R d M is just
Speaker 1: emerging markets ex. China, you know which is It's not
Speaker 1: just ex it's ex dictating you know which has worked out?
Speaker 1: Really another one phenomen another example of an idea that
Speaker 1: right time, right place. This year has been another big
Speaker 1: But we we both know she spent you know, five
Speaker 1: to ten years in the trenches getting to the point
Speaker 1: for the overnight success. That's how it always takes ten
Speaker 1: years to be overnight. So the thematic stuff definitely interesting.
Speaker 1: I think mostly driven by advisors need to have stories
Speaker 1: to talk to their clients about. That's not preservative. Well
Speaker 1: that's that's some of the stories though, and and my
Speaker 1: pushback on the thematics are all right, I can understand
Speaker 1: the concept behind what hims. If we invest in emerging
Speaker 1: markets but leave out the worst players like Russia and
Speaker 1: China that has worked out well this year, the ones
Speaker 1: where I only want to invest in republican or democratic companies,
Speaker 1: or I want to do these sort of biblical based investing.
Speaker 1: They seem to be more emotional, and history has told
Speaker 1: us emotions or the enemy of good investing. Yeah, I'm
Speaker 1: not a super fan of most of that stuff. I
Speaker 1: do think that there's a place for thinking about stewardship,
Speaker 1: and again, part of my longer thesis on how the
Speaker 1: world works um corporate ownership. Who controls what companies do
Speaker 1: is probably a lot more important than who's elected in office.
Speaker 1: We'll talk a bit about in the next But that's
Speaker 1: all that is, all that woke anti woke investing stuff
Speaker 1: that's applying these sort of emotional labels about the world
Speaker 1: to our investments. And I'm with you, I don't think
Speaker 1: that that makes a ton of sense. I think there's
Speaker 1: some threads there around voting that makes some sense, But
Speaker 1: most of that stuff I don't like how it's sold
Speaker 1: more than I don't like how it's built. Where I
Speaker 1: think things get a little tricky is when it's like
Speaker 1: what I call headline funds, you know, electric cars, future food,
Speaker 1: work from home, valid approaches, but they're really so targeted
Speaker 1: towards well, is there going to be a big headline
Speaker 1: like work from home pandemic go right. They're really just
Speaker 1: headline bait. And I think those are interesting speculative plays
Speaker 1: for folks that do that for a living, but I
Speaker 1: don't think they really belonging people's long term portfolio. I
Speaker 1: don't recall a whole lot of work from home ETFs.
Speaker 1: That's that's what is it now, it's already coming gone.
Speaker 1: So last e t F question, why on earth does
Speaker 1: anyone need a single stock e t F. So we've
Speaker 1: got a raft of these things that have come out.
Speaker 1: The SEC is I think going to clamp weight down
Speaker 1: on them. The short answer is they don't. The use
Speaker 1: case for a single stock et is you either it's
Speaker 1: an access to leverage that you couldn't get otherwise two
Speaker 1: to one plus two to one is four to one, right,
Speaker 1: works right? Well, well you could you can own a
Speaker 1: two to one or three to one single stock et F.
Speaker 1: You could buy it on margin, so you could go
Speaker 1: four or six to one, which is kind of against
Speaker 1: It's funny because I got invited to speak at the
Speaker 1: SEC thing and I'm like, you should speak today's nodding,
Speaker 1: and they said, yeah, yeah, we we already have him
Speaker 1: on his artist. I'm like, I swear I get my answers,
Speaker 1: so let cut out the middleman. Go talk to him. Yeah,
Speaker 1: I'll be talking to them about that. So like they
Speaker 1: have a use case if you want to be get
Speaker 1: leverage and you don't want to use your margin account
Speaker 1: or you ran out of margin your margin account. That yeah,
Speaker 1: that's a narrow use case. More importantly, if you want
Speaker 1: to short something, right, so Testla Tesla Q is the
Speaker 1: one that's I caught, the only one that has any
Speaker 1: of the assets right now, and it's the short Tesla fund.
Speaker 1: The biggest benefit of those and I can't believe I'm
Speaker 1: saying this out loud, is you can only lose all
Speaker 1: your money like that can only lose You can only
Speaker 1: lose all your money. That way do I sign up
Speaker 1: for that? That sounds fair as opposed to futures that
Speaker 1: theoretically you put up direct short and you can lose
Speaker 1: a direct shorting finding getting a locate and getting short
Speaker 1: theoretically you know, you have one really bad day and
Speaker 1: you can be out more than your account. Right, that's fair,
Speaker 1: But we are splitting hairs. The short answer, Berry is
Speaker 1: they don't really have much of a use case for
Speaker 1: most investors. The fake a d rs like Roundhill it
Speaker 1: filed for like you know, get am Sung which doesn't
Speaker 1: have an a d R and you can trade it
Speaker 1: like it's an a d R. That one actually that
Speaker 1: would have some utility and I can't buy Why why not?
Speaker 1: Because there are reasons we have a d R rules, right,
Speaker 1: That's part of the reason that you have to go
Speaker 1: through the process of getting a depository receipt listed is
Speaker 1: that the then rules about what that means in terms
Speaker 1: of voting and ownership and reporting and all that jazz.
Speaker 1: Why doesn't Samsung trade as an a d R on
Speaker 1: the New York Stock Exchange. I don't understand that because
Speaker 1: they don't want to go through the process because they
Speaker 1: just don't care. Well, yeah, I mean they'd have to
Speaker 1: do reporting that they don't mean. I'm guessing a little
Speaker 1: bit because I don't live in their boardroom, but you know,
Speaker 1: they have reporting that they'd have to do they don't
Speaker 1: want to do. They've got American investors they don't want
Speaker 1: to have to talk to. You know, they've got requirements
Speaker 1: that the Nisy would put on them. Why would you bother?
Speaker 1: And and also you end up in the situation we
Speaker 1: have right now with Baba, where you end up with
Speaker 1: the I mean, Bob is not an a d R,
Speaker 1: it's a it's a it's a direct list. But you
Speaker 1: end up with this issue where you've got multiple jurisdictions
Speaker 1: governing a country and comes right, especially anything out of
Speaker 1: China these days are really problematic. Alright, I said, no
Speaker 1: more E t F questions. I got to ask you
Speaker 1: the mutual fund question. And you and I again have
Speaker 1: talked about this in the past. If mutual funds were
Speaker 1: a brand new product, would they be approved in Absolutely
Speaker 1: they would not tell us because the E t F
Speaker 1: structure is inherently more tax fair, and that sounds like
Speaker 1: a weird no. The problem with mutual funds, if you
Speaker 1: want them today is that the pitch would be, Hey,
Speaker 1: we're gonna pool our investors, but for tax purposes. If
Speaker 1: you sell out, you can take care of your own stuff,
Speaker 1: but we're gonna book that gain over here with all
Speaker 1: of these other investors, send them all of a check,
Speaker 1: and make all of them restate your base at their basis.
Speaker 1: Because you decided you want out on a Tuesday and
Speaker 1: tax exactly. That's that would be a nonstarter today, end
Speaker 1: of day price, which by the way, works great in
Speaker 1: a four oh one K. Yeah. So it's like I
Speaker 1: I try not to spend a lot of time imagining
Speaker 1: how I think the world should be today and spend
Speaker 1: more of it trying to focus on the word the
Speaker 1: world is today and might end up. We have mutual
Speaker 1: funds now. They're not going to go anywhere because they're
Speaker 1: baked into our retirement system. They're a better fit for
Speaker 1: that specific purpose than E t f s because of
Speaker 1: fractional shares. There's no economic innsenter for anybody to change
Speaker 1: any of that. So I'm gonna die and my four
Speaker 1: ownk is going to be in mutual funds. That's probably
Speaker 1: what's going to happen right whenever, whether that's tomorrow or
Speaker 1: forty years from now. I don't think mutual funds are
Speaker 1: going away because there's no reason for anybody to usurp it.
Speaker 1: Unless we literally throw out the forty Act and rewrite
Speaker 1: the securities laws of this country, the mutual funds going
Speaker 1: to exist. Channeling Ray Dalio's quote, it's the role of
Speaker 1: the investor to deal with the world as it is.
Speaker 1: I'm a huge fan of that quote. Fascinating. So let's
Speaker 1: talk a little bit about a quote from you that
Speaker 1: I'm perplexed about, and that is the ants here to
Speaker 1: every question starts at the beginning and gets just as
Speaker 1: detailed as you need it to be until you've satisfied
Speaker 1: the need. What does that have to do with finance? Well, look,
Speaker 1: the world is infinitely complex, right that I think we
Speaker 1: can get down that it's not black and white. It's
Speaker 1: not black and there bumper stickers on the answers to
Speaker 1: our problem to get like, to get really like neurophil
Speaker 1: philosophical about it. As human beings, we walk around looking
Speaker 1: for affordances. And what that word means is like we
Speaker 1: look for the handle on the cup, and we said,
Speaker 1: when we see a cup and there's a handle on it,
Speaker 1: we can say, oh, I've seen this before. I understand
Speaker 1: that's a thing I can grasp, and I understand how
Speaker 1: my hand works, and so now I can get the
Speaker 1: cup of coffee. If all we're trying to do is
Speaker 1: drink the coffee, that's as far as we need to go, right,
Speaker 1: we get the affordance that allows us to work in
Speaker 1: the environment that we're in. Our model of the universe
Speaker 1: doesn't have to be perfect. It just needs to be
Speaker 1: good enough to get us through the day. And it's
Speaker 1: going to be imperfect. That's the other thing I think
Speaker 1: that is an important thing for anybody who's in the
Speaker 1: business of dealing with human beings for a living around
Speaker 1: emotional subjects, which is the job of financial advisor understanding that, Oh,
Speaker 1: everybody lives in their own little interpreted reality where some
Speaker 1: people understand the molecular structure of the cup and some
Speaker 1: people literally just having their head. Oh handle coffee, drink,
Speaker 1: and both of those are okay, depending on what your purposes.
Speaker 1: What does that have to do with finance. Well, in
Speaker 1: finance we approach that constantly. The markets. Just think about
Speaker 1: we talk about the markets. Okay, do you understand the
Speaker 1: markets well? Yes and no, right, yes, you understand the
Speaker 1: basics of like what's going across the ticker and what
Speaker 1: your clients need to do. Do you really understand at
Speaker 1: a really detailed level exactly how payment for order flow
Speaker 1: impacts capital requirements at the dtc C. No, you don't
Speaker 1: need to. It's not important to what your job is
Speaker 1: until something breaks right, and so part of my job
Speaker 1: as a financial futurist is to go down a lot
Speaker 1: of those rabbit holes so that when when the world
Speaker 1: blows up and everybody's like, payment for workflow is the
Speaker 1: worst thing in the world, I'm not starting from square
Speaker 1: one saying what does pfo F stand for? I've already understood. Okay,
Speaker 1: here's the mechanics of how this go. What am I missing?
Speaker 1: I haven't looked at it in eight weeks. Maybe the
Speaker 1: world change, so I can do the update to get current.
Speaker 1: But I'm not starting from scratch every day, and I
Speaker 1: hopefully that's some of the value. So funny you mentioned
Speaker 1: understanding what's going on when the world breaks. The book
Speaker 1: I love to give to younger people who are getting
Speaker 1: started in markets is tim Mets is Black Monday, because
Speaker 1: even today, most people have no idea what happened during
Speaker 1: the eighty seven crash. And it's exactly as you've described.
Speaker 1: It is the logistics, the plumbing, the day to day
Speaker 1: operations that you don't realize that every decision that's made
Speaker 1: has ramifications deep into the future for how markets operate.
Speaker 1: I'll give you one little weird side note on that.
Speaker 1: So seven, I was twenty one years old or something
Speaker 1: like that. I was living in Hollywood, California. I had
Speaker 1: a little tiny bit of money invested, maybe five grand
Speaker 1: that my grandfather had given me in a Smith Barney
Speaker 1: account or something like that. You know, seven happened, pretty
Speaker 1: much lost most of it whatever, But I became fascinated
Speaker 1: at that moment by what the hell just happened. Years later,
Speaker 1: literally four or five years later, I've gone and gotten
Speaker 1: an m b A. I'm studying investment finance in the
Speaker 1: back of my head constantly, I'm like, I want to
Speaker 1: understand what that, So I read everything about it. I
Speaker 1: end up working for Well's far Unico in the very
Speaker 1: early or something like that, Low and Behol. I started
Speaker 1: going through stacks of stuff on portfolio insurance because they
Speaker 1: were a huge writer that at the time and index provider.
Speaker 1: So it's like, and I had never at that point,
Speaker 1: I had not been down that rabbit hole. There was
Speaker 1: no Internet to go search on that. Now I had
Speaker 1: access to all of these internal documents about like what
Speaker 1: was actually going and the ne of it was hidden.
Speaker 1: It was all part of congression, the giant SEC report
Speaker 1: that came out afterwards, and and it was just anyway.
Speaker 1: My point is, it's fascinating to understand. To me, it's
Speaker 1: fascining to understand how the pieces actually work versus how
Speaker 1: we think they work, because they're never the same. One
Speaker 1: of the things in the book that was always so
Speaker 1: vivid to me, and I'm sure I'm gonna misquote this,
Speaker 1: But they used to run the prints from the Chicago
Speaker 1: futures pits into the floor of the New York Stocks Change,
Speaker 1: so you could see how the futures were trading, and
Speaker 1: marry that with portfolio insurance, and suddenly it's a vicious
Speaker 1: cycle downwards as it just be. There is no bottom
Speaker 1: and that, and that's how you end up with a
Speaker 1: down day on on the Dow when it should have
Speaker 1: been you know, a run of the mill correction. But
Speaker 1: part of the reason that's so interesting is that the
Speaker 1: mechanics of that are now gone. The world doesn't work
Speaker 1: that way anymore. But people are the same, right, They
Speaker 1: like Neanderthals are pretty much doing the exact same emotional
Speaker 1: by sell you know, green fear trade off in that cycle.
Speaker 1: And so what happened in eight seven was a cycle
Speaker 1: that was had you know, I don't know, had had
Speaker 1: a cycle time of twenty minutes. Now it has a
Speaker 1: cycle time of twenty milliseconds. But at the end of
Speaker 1: the day, you still have people making those decisions. So
Speaker 1: another quote of yours is history tells us mostly about
Speaker 1: what people did when faced with a specific set of
Speaker 1: constraints and inputs. How does that affect traders and investors
Speaker 1: in market. Well, so you know you do this on
Speaker 1: your podcast, right, you talked to a lot of very professional,
Speaker 1: very successful people. That's why it's called Masters in Business. Right.
Speaker 1: The challenge with that is, I think it's very easy
Speaker 1: to get hung up on the thing that they did,
Speaker 1: not why they did it, and what they needed to
Speaker 1: be able to do it. So we look back at assignments, right,
Speaker 1: people who were wizards of Wall Street, and we were so,
Speaker 1: you know, we Revere Warren Buffett, right, and we said, like,
Speaker 1: you know, and people write books about them and all
Speaker 1: these things, and often what they end up looking like
Speaker 1: is hero worship. The more interesting question is that, Okay,
Speaker 1: Buffet's been really successful. Instead of trying to figure out
Speaker 1: what is it about Buffett that was better, I think
Speaker 1: it's much more interesting to look at, well, okay, what
Speaker 1: was the pond that he was fishing in, who were
Speaker 1: his who were his colleagues, what were his information sources,
Speaker 1: What kind of capital constraints did he have or what
Speaker 1: lack of capital constraints did he have versus competitors. That's
Speaker 1: what makes him an interesting story. Now, of course he
Speaker 1: wouldn't be successful. He wasn't also sharp and brilliant and
Speaker 1: good at his job and good with people. But I
Speaker 1: think it's much more interesting to look at those decisions
Speaker 1: as sort of contextual reactions to their environment, as opposed
Speaker 1: to revering them as like what we should all invest
Speaker 1: like Warren Buffett. No, we should all have the perspicacity
Speaker 1: to invest like Warren Buffett when presented with that exact
Speaker 1: set of situation. It's about process. And one of the
Speaker 1: things I really go out of my way to avoid
Speaker 1: is the classic survivorship bias, because that's why one of
Speaker 1: my favorite questions is always what do you know today
Speaker 1: that you wish you knew to only five years or
Speaker 1: so ago when you started, Because I want to give
Speaker 1: people an opportunity to say, oh, I mess this up
Speaker 1: or I didn't know this otherwise. It's that's the criticism
Speaker 1: of you know good too great. Here are twelve companies
Speaker 1: that did fantastic in the eighties and nineties, and then
Speaker 1: you look forward a decade and half of them are
Speaker 1: either out of business or gone or wildly under performing
Speaker 1: the market. Yeah. I think that's exactly the point. Um,
Speaker 1: So I I get very skeptical of hero worship I'm
Speaker 1: much more interested in understanding decision making. So, like you know,
Speaker 1: in terms of like great business books, I'd rather focus
Speaker 1: on like Choices, values and frames by Ken min Tversky
Speaker 1: versus anything Mountain Gladwell has ever written. I thought you're
Speaker 1: gonna go with money Ball? Well no, but like, actually
Speaker 1: money Ball is a great counter example where that's a
Speaker 1: great narrative, it's a great story. But I think that
Speaker 1: the lesson some people get out of money Ball is, Oh,
Speaker 1: there was this one sharp kid in the right place
Speaker 1: at the right time, and he really did something amazing
Speaker 1: and got just enough people to pay attention and got
Speaker 1: really lucky. And isn't that a great story? Where they're
Speaker 1: real thing is okay, what is it about that environment
Speaker 1: that made a difference. This was somebody who focused on
Speaker 1: data when other people thought data was irrelevant. They got
Speaker 1: nerdy when people were thinking it was hunch. The same
Speaker 1: thing happens in markets all the time. Right when people
Speaker 1: get nerdy but other people are focused on the emotions,
Speaker 1: there's often a real opportunity there, right, because now you're
Speaker 1: dealing with the system, not with the people. You've mentioned
Speaker 1: another book that I think is fascinating as history the
Speaker 1: right stuff tell us about what the right stuff has
Speaker 1: to do with Yeah. So well again, So I'm glad
Speaker 1: you made that bridge because because I think Moneyball is
Speaker 1: an interesting example there. To me, Moneyball is interesting not
Speaker 1: for the like act like this dude, but as a
Speaker 1: character study to understand how human beings reacted there. So like,
Speaker 1: um in the right stuff, which was the example I
Speaker 1: was using in the email I sent you. I'm like
Speaker 1: a lot of people my age and gen X fascinated
Speaker 1: by the Apollo Program and read everything and seeing every
Speaker 1: documentary and built all the models when I was a kid, right,
Speaker 1: I mean it was the Wild West. You're too young
Speaker 1: to have been called down to the assembly when one
Speaker 1: of theo I think the first Apollo landed on the
Speaker 1: Moon or c. Yeah, but I remember watching on TV
Speaker 1: as a kid, sitting on the couch, right, So like
Speaker 1: very very real to me. Um, And so I felt
Speaker 1: like by the time I was sixteen, I felt like
Speaker 1: I had a pretty nerdy understanding of the Apollo Program.
Speaker 1: But then you start reading stuff like Tom Wolf and
Speaker 1: the Great Stuff. Did you read it or did you?
Speaker 1: Full disclosure, I watched the movie, I never know, I
Speaker 1: read the book. I read the book when it came out,
Speaker 1: and the reason I loved it again was not because
Speaker 1: it told me anything about how they made the landers.
Speaker 1: It was because it was like, holy crap, this was
Speaker 1: an ego farm, Like this was a whole like that.
Speaker 1: It felt like Wall Street. Okay, here a bunch of
Speaker 1: extremely high performance, almost exclusively dudes with enormous egos who
Speaker 1: are going to work collectively to do something nearly impossible.
Speaker 1: That's why that's an interesting story. It could be about,
Speaker 1: you know, the Dream Team hockey, right. The fact that
Speaker 1: it was about these like super high performance people interacting
Speaker 1: with each other for a common goal. That's what I
Speaker 1: think was interesting about it. And I think if you
Speaker 1: learned something from the Apollo program, it should be about that,
Speaker 1: not about like, well, government spending did this and we
Speaker 1: invested in No, no, no. This was about creating a
Speaker 1: community of people around a common goal. So you mentioned
Speaker 1: what we get wrong about markets. What else do we
Speaker 1: get wrong about the state of the world. Well, so
Speaker 1: much so. The most interesting thing I think that's markets
Speaker 1: related is probably what's going on in economics. I'm a
Speaker 1: big fan of Oli Peters has run something called ergodicity
Speaker 1: economics from the Fine good city, because every time I
Speaker 1: look it up, it seems Google gives me a different,
Speaker 1: you know, reductionist. And so look with the caveat that
Speaker 1: I'm neither a mathematician or an economist, and neither are
Speaker 1: you either of those things. By training, um, fundamentally, we
Speaker 1: assume certain things about how money and markets work. A
Speaker 1: big one is that when you average something over time,
Speaker 1: you end up with similar or answers to when you
Speaker 1: average things over populations. Right, So if you flip a
Speaker 1: coin a thousand times, we can come up with similar
Speaker 1: expected values too, if we have a thousand people flip
Speaker 1: a coin once. Right. The connection between those is the
Speaker 1: ergotic assumption, as I understand it, And if I'm wrong,
Speaker 1: I'm sure people will send me hate mail. A lot
Speaker 1: of what we do in economics is based on that
Speaker 1: sort of fundamental mathematical assumption that that you don't have
Speaker 1: to worry too much about those things. The problem with
Speaker 1: that is that it's frankly not true. Something as simple
Speaker 1: as starting conditions. You can do this with just the
Speaker 1: coin flip experiment. Right. If you and I flip coins,
Speaker 1: and you flip heads four times in a row top
Speaker 1: to bottom, and I just know I just randomly, you know,
Speaker 1: heads tales, heads tails, but we're betting a hundred dollars
Speaker 1: on each one. I will probably never catch up to
Speaker 1: you because you are your path dependency on those starting
Speaker 1: conditions of like you flip that coin heads five times
Speaker 1: in a row, you now have capital, you have opportunity,
Speaker 1: you can make smaller bets or lower Kelly number like
Speaker 1: you get sort of stuff going on. And because I
Speaker 1: flipped two tails off the beginning, I'm screwed. That is
Speaker 1: a non or gotic function, right, because that's not the
Speaker 1: same as saying, well, we're gonna have ten tho people
Speaker 1: go through that same experiment on average, everybody's gonna flip
Speaker 1: heads and tails about even so you're saying sequence of
Speaker 1: returns matters, and you're agreeing with Bill Sharp that that's
Speaker 1: one of the toughest problems in all of finances, absolutely,
Speaker 1: is how do you model draw downs and withdrawals in
Speaker 1: retirement if you get unlucky or lucky in the beginning
Speaker 1: of your retirement. The implications are actually much more profound
Speaker 1: than that, however, which is that because we've set up capitalism,
Speaker 1: not just your portfolio, but global capitalism bakes these assumptions
Speaker 1: in we end up with things like runaway problems, which
Speaker 1: we see all over the place right the rise of
Speaker 1: the billionaire class. It is no longer the case in
Speaker 1: modern democratic capitalism that the best idea, best executed is
Speaker 1: the one that will win. It's the best idea that's
Speaker 1: best executed, that also has very good starting conditions and
Speaker 1: access to capital, that's the one that wins. So another
Speaker 1: quote of yours, the here and now is never an accident.
Speaker 1: It's the result of myriad actions and influences, and understanding
Speaker 1: those influences provides important context for planning ahead. In other words,
Speaker 1: path dependency is enormous, and it's not just a function
Speaker 1: of a single roll of the dice. It's the whole series, absolutely,
Speaker 1: And also from the advice perspective, part of the reason
Speaker 1: I put it that way is because boy, I just
Speaker 1: get this emotional reaction myself, Like I look at the
Speaker 1: market it's down five per cent, or I look at
Speaker 1: my portfolio value and it's not what it was six
Speaker 1: months ago. It's so easy to get caught up in
Speaker 1: that regret of what happened and I could have done
Speaker 1: things differently, or if I had put this trade on
Speaker 1: on Tuesday, I would have made more money and have
Speaker 1: that dictate what you do today, and that is stupid.
Speaker 1: What you do today should be based on the markets today,
Speaker 1: and the markets today are not the markets that were
Speaker 1: there two weeks ago. When you didn't put on that
Speaker 1: options trade. That would have been brilliant. So the ability
Speaker 1: to let did we talk about that option was not
Speaker 1: going I should have gone bigger. It's killing me and
Speaker 1: I'm looking at but you're hung up on this and
Speaker 1: the reality is like, and it's a rounding. A constraint
Speaker 1: you should have when you're thinking about your money today
Speaker 1: is what are the transaction costs of not being in
Speaker 1: what I'm in right now? Because if the answer was zero,
Speaker 1: then every single morning you should start in cash and
Speaker 1: make a whole new set of decisions about what you're
Speaker 1: invested in today. If in a purely frictionless world, I
Speaker 1: said we were done with ETF, wasn't there a new
Speaker 1: ETF that wants to invest from the close to the
Speaker 1: open and spy night chairs. Yeah. See, I'm fascinated by
Speaker 1: people not understanding, Well, isn't that double or triple the
Speaker 1: amount of time? Isn't that just time compounded? If we're
Speaker 1: open from nine thirty to four six and a half hours.
Speaker 1: The you're closed a lot more. You would think you
Speaker 1: would be up more over time, right right, Well, they except,
Speaker 1: of course, liquidity and sorts of other issues like that.
Speaker 1: But that's kind of interesting, all right. So the biggest
Speaker 1: question I saved four towards the end here, which is
Speaker 1: what do we get wrong about human beings? Oh? Boy?
Speaker 1: I think there are a couple of big ones. And
Speaker 1: these are fairly recent revelations to me, Um, and some
Speaker 1: of them are slightly philosophical. I think recognizing the inherent
Speaker 1: unknowability of reality is an important first step. You know,
Speaker 1: you mentioned the two millisecond lag on on perception. Um
Speaker 1: annal Seth has a great book called Being Human or
Speaker 1: Being You. I always get it wrong. Um. He's the
Speaker 1: one who put forth the scientific proof that effectively we
Speaker 1: hallucinate reality. Like what goes on in our heads is
Speaker 1: a model of the molecular world around us. Do we
Speaker 1: want to call that a hallucination or is it just
Speaker 1: our model of the universe? Well, like, if you imagine
Speaker 1: this coffee cup is here, right, you're already perceiving it
Speaker 1: delayed from its existence here space etcetera. And that can
Speaker 1: all get very woo woo and who cares, And so
Speaker 1: that's fine. It can be woo when he cares, but
Speaker 1: you have to start from there and build up. And
Speaker 1: if you accept that fundamentally I cannot prove the table exists,
Speaker 1: then getting really worked up about Tesla earnings is even
Speaker 1: more ridiculous, right, because now, when you have an opinion
Speaker 1: about Tesla earnings, it's based on a set of information
Speaker 1: that is incredibly incomplete. I don't care whether you're the
Speaker 1: most storied Tesla analyst in the world. I don't care
Speaker 1: if you're Elon Musk. Elon Musk on the conference call
Speaker 1: talking about earnings has no idea what's going on on
Speaker 1: the floor right now. For all he knows, his factory
Speaker 1: is burning down while he's talking. Right, So, we're inherently
Speaker 1: always wrong about the state of anything that we are
Speaker 1: asserting truth on. So it's about being less wrong when
Speaker 1: we're trying to make these assessments about I like to
Speaker 1: say the future is inherently known and unknowable. You're saying
Speaker 1: the present is inherently inherent Yeah, absolutely unknowable. It's all probabilistic, right,
Speaker 1: And you know, fundamentally, you start thinking about quantum computing, right,
Speaker 1: Quantum computing largely ends up being about convincing yourself you're
Speaker 1: not sure right, because you can't actually measure this state
Speaker 1: of a cuban in real time because then the wave
Speaker 1: collapses and it's no longer a quantum computer. So managing
Speaker 1: uncertainty turns out not just to be a managerial tool
Speaker 1: for guys who sit around and talk about money. It's
Speaker 1: actually the fabric of the universe is based on managing probability,
Speaker 1: not understanding certainty. So if you approach everything from that
Speaker 1: perspective that, Okay, whether or not I'm going to go
Speaker 1: on the subway to get down to the hotel, that
Speaker 1: there's an inherent level of uncertainty in that journey, and
Speaker 1: that I have to be willing to accept. It's like, okay, well,
Speaker 1: sixty of the time subway is going to be faster,
Speaker 1: but here's all the things that could go wrong. Right
Speaker 1: time it's slower, and two percent of the time I'm
Speaker 1: going to get or whatever rights. So I think that
Speaker 1: that is, you know, there's a level of humility that
Speaker 1: comes from acknowledging the inherent unknowability of whatever is you
Speaker 1: think you're an expert on um. But at the same time,
Speaker 1: I think thinking probabilistically. I mean, I think Jim O'Shaughnessy
Speaker 1: talks about, you know, learning how to think probabilistically and
Speaker 1: a probabilistic world is opposed to determinalistically, and that I
Speaker 1: think is very true. So, you know, learning to understand
Speaker 1: to think in bets. I think it is really Importanti
Speaker 1: Duke's book on this. I think it's one of the
Speaker 1: key pieces of reading people should have because it makes
Speaker 1: it very human. Right, This idea of thinking and bets,
Speaker 1: thinking and probabilities probably the best thing online poker has
Speaker 1: ever done to the country. That's interesting, And now I
Speaker 1: know why you and I get along so well, because
Speaker 1: we both have the same belief system about how little
Speaker 1: is actually knowable and why probabilistic thinking is the only
Speaker 1: way to approach risk assets. Yeah, I mean, at the
Speaker 1: at the base, all beliefs are wrong right by definition.
Speaker 1: If I can't prove that I'm in this room, if
Speaker 1: I can't prove that fundamental reality is phenomenal logically true,
Speaker 1: I could prove the table is real by just accelerating
Speaker 1: your skull towards it. Rapidly. Does that disprove it? Or
Speaker 1: or am I being too literal and I'm not being sarcastic?
Speaker 1: You know, working with material objects is that where everybody
Speaker 1: falls down on this? The problem is like, what's actually
Speaker 1: going on when you're holding onto this table? Is just
Speaker 1: a set of somatic inputs and visual inputs. So the
Speaker 1: way we perceive it is sufficient for our purposes, but
Speaker 1: objectively isn't really as a species, right, we have learned
Speaker 1: these affordances ways to interact with the environment. I am
Speaker 1: fairly certain if I hit a table, it will always
Speaker 1: be there. That is, of course not true when you
Speaker 1: walk into a really well made illusion. It's not true
Speaker 1: when you put on a VR headset, right, So we're
Speaker 1: accepting this version of our perception as somehow phenomenal, logically real.
Speaker 1: But when we put on the VR headset, we have
Speaker 1: a brain space where we're like, well, I know the
Speaker 1: table is not really there. But then again, most people
Speaker 1: put on that VR headset and they fall down when
Speaker 1: they go to lean on the table that's not there.
Speaker 1: Oh is that true? I mean you've seen the video.
Speaker 1: You've watched millions of these videos of people doing hysterically
Speaker 1: stupid things with VR helmets on, Well, it's when you
Speaker 1: look at them when you're not in the same exact
Speaker 1: and what they're idiots, No, they're not. They're perceiving a
Speaker 1: different reality than you are. And their model got confused
Speaker 1: and thought that the table was real because they're so
Speaker 1: used to seeing a table and thinking the tables really
Speaker 1: And I still think of VR as kind of blocky
Speaker 1: and not you know, when the technology accelerates to the
Speaker 1: whole of deck from Star Trek where the differences and imperceptible,
Speaker 1: and it's like, then, how do you know what's real
Speaker 1: and what's not? And I'm not one of these guys
Speaker 1: who's like, we're all have been a simulation And I
Speaker 1: don't want to go in that argument. Whatever I think
Speaker 1: they're entertaining. But my point is from a very practical,
Speaker 1: real world perspective, let's bring it back to dollars and cents.
Speaker 1: You have to have the humility of your convictions. Like
Speaker 1: I look at my Schwab account right now and I say, oh,
Speaker 1: I get the snapshot of reality what it is. It's
Speaker 1: in these things right now. For reasons that I had
Speaker 1: good reasons to put him in the Emerging Markets Fund
Speaker 1: or whatever, But every day I should be asking myself
Speaker 1: whether that's still true, because the world changes rather quickly
Speaker 1: if you haven't noticed. You and I could do this
Speaker 1: for four hours, and in fact we have um on
Speaker 1: a canoe on a lake talking about this endlessly, but
Speaker 1: we only have the studio for another few minutes. So
Speaker 1: I'm gonna jump to my favorite questions, but I'm gonna
Speaker 1: mix a few of these up, and they're not going
Speaker 1: to be the same questions I think, Um, the what
Speaker 1: are you streaming these days is getting a little long
Speaker 1: in the tooth if I'm asking about video, So I
Speaker 1: want to mix it up and ask you what music.
Speaker 1: I've been on a big music tare lately. One of
Speaker 1: the it turned out on Twitter one of my most
Speaker 1: engaged threads I've ever done, is I just heard of
Speaker 1: post a new song, like every couple of days in there. Um,
Speaker 1: I'm a big believer that you have to be paying
Speaker 1: attention to the now if you want to have any
Speaker 1: of understanding the now. So I try to only listen
Speaker 1: to new music. Really doesn't mean that I don't occasionally
Speaker 1: toss on an old Bowie tune that I love or
Speaker 1: something like that. But four to six hours a day.
Speaker 1: I'm listening as much as I can to brand new music,
Speaker 1: and I tend to really listen to basically college radio.
Speaker 1: Listen to college radio since nine three and I sort
Speaker 1: of never stopped. Now most of that is intermediated either
Speaker 1: through sirius xmu on sirius x where find podcasts are
Speaker 1: held like this one sometimes or various like remember blogs,
Speaker 1: they're big, big music, big music blogs back in the day,
Speaker 1: like Gorilla versus Bear Brooklyn Vegan. These guys are all
Speaker 1: still around um and they're amazing and they're incredible source
Speaker 1: of new music. And I think that we're in a
Speaker 1: golden age of independent music. Like in the last two
Speaker 1: or three years there has been phenomenal There has been
Speaker 1: a number of articles about streaming has gone classic rock,
Speaker 1: thirty year old music, and new music has a really
Speaker 1: different called time being discoverable on all the streaming services.
Speaker 1: So if you want to discover new music, how do
Speaker 1: you do that? So Grilla versus Barron brooklyn Vegan dot com,
Speaker 1: both of them are are blogs where every day, like literally,
Speaker 1: I think one of them posts here's the twenties six
Speaker 1: songs that were released today every day, and you can
Speaker 1: work with new music in the background. It's not terribly distracted. No,
Speaker 1: I mean I skip stuff I don't like. I don't
Speaker 1: want to pretend that I just like universally love everything.
Speaker 1: But you know somebody who's putting up a playlist that's
Speaker 1: new music every week. You know, there's a top forty
Speaker 1: alternative charts that I listened to that's new every week
Speaker 1: based on college radio airplay. And so I'll just put
Speaker 1: down on repeats the same playlist to just keep it
Speaker 1: rolling repeat. But it's new stuff every single day. The
Speaker 1: stuff coming out of particularly like Philadelphia and Chicago in
Speaker 1: the new music scene, Um, all zoomers, like all kids
Speaker 1: in their twenties, just amazing stuff. Like a couple bands
Speaker 1: of note, Um, wet Leg is one that I'm a
Speaker 1: big fan of, very much a sonic youth kind of
Speaker 1: ye Horse Squirrel out of Chicago again, a very sonic
Speaker 1: youth kind of vibe. Philadelphia, there's so many bands down there.
Speaker 1: Alex G just dropped an incredible album down there. Um
Speaker 1: you know Dead d e h D and other incredible
Speaker 1: bands there. Chicago as well. But these little d i
Speaker 1: y music scenes in in a couple of major cities
Speaker 1: just unbelievable creative stuff, very a lot of it's very experimental,
Speaker 1: fourteen minute songs. I'm hearing a lot of alt rock
Speaker 1: and new synth, but not hip hop that list. I
Speaker 1: don't listen to a ton of what I would consider
Speaker 1: mainstream hip hop. Um, it's very distracting if you're trying
Speaker 1: to read or write exactly. That's that's the big issue.
Speaker 1: Is that the lyrics, the lyric, that's it's important. Um.
Speaker 1: I will listen to hip hop generally on headphones, like
Speaker 1: sitting down in a chair with headphones on to listen,
Speaker 1: which I don't think that many people do, and I
Speaker 1: wish more people did. Um. But you know in that
Speaker 1: space like Run the Jewels, I'm a huge Run the
Speaker 1: Jewels fan, and that that's more like an indie hip
Speaker 1: hop artist. UM, so that kind of stuff is a
Speaker 1: little bit more my jam. I was really into hip
Speaker 1: hop back in the eighties nineties era, but you know,
Speaker 1: not not at the level I know some of your
Speaker 1: boys are at a ridd um yeah, my my hip
Speaker 1: hop stop with Paul's boutique from the Beat. Yeah, I
Speaker 1: mean we're both which really which really is the ultimate
Speaker 1: for you? That's the peace I mean, but the law
Speaker 1: changed and you couldn't sample the way they I mean
Speaker 1: they sample beatles and Sergeant pet You couldn't do that
Speaker 1: today without being sued. Well, the interesting thing is now
Speaker 1: in the d I Y community, in the in the
Speaker 1: sort of true indie community, that stuff is really rampant.
Speaker 1: But it's happening outside of the boundaries of the big
Speaker 1: record companies. Right. It's literally, you know, one artist in
Speaker 1: Philadelphia calling up another artist in Chicago saying, Hey, I
Speaker 1: love the beat you put down on that half made
Speaker 1: track you dropped on band Camp. Can I sample that
Speaker 1: in my next thing? And that's happening like crazy, But
Speaker 1: they're not going back to the old blue note, you know,
Speaker 1: archives like the Beastie Boys got to not getting too
Speaker 1: sample a whole lot of love. So it's funny. If
Speaker 1: I'm writing and I want some music on in the background,
Speaker 1: I'll go to a weekly show by John Pizzarelli called
Speaker 1: Radio Deluxe, and it's the classic American songbook from the thirties, forties,
Speaker 1: fifties and jazz, and I can have that operating in
Speaker 1: the background and it doesn't interfere with my ability to
Speaker 1: read or write. The songs are familiar, and it's more music.
Speaker 1: It's more music than lyrics. So the jazz side of
Speaker 1: it allows me to function. I think what you're describing
Speaker 1: would be really hard to work with In terms of
Speaker 1: writ It totally depends on the kind of work that
Speaker 1: I'm doing in the moment. If I'm reading academic work,
Speaker 1: if I'm looking at red legislation, and and you know,
Speaker 1: reading news and catching up on Twitter, and I can
Speaker 1: listen to anything. If I'm actively taking the words out
Speaker 1: of my head and putting them on paper, generally I'm
Speaker 1: in complete silence. But I tend to compose in my
Speaker 1: head and then write all at once. So I'll write
Speaker 1: something in my head for three or four days and
Speaker 1: then I'll put five thousand words out in thirty minutes.
Speaker 1: Yeah you me. Morgan Housel says the same thing, that
Speaker 1: the most important part of writing is the couple of
Speaker 1: days before you sea. It's usually the most important part
Speaker 1: of writing to me is the two hour walk at
Speaker 1: six am. That's the most important part of writing. Then
Speaker 1: I sit down at eight start writing, and then that's
Speaker 1: the easy part. My wife makes fun of me. But
Speaker 1: if I'm giving a presentation that gets written in the
Speaker 1: shower and she's like, what are you saying in the shower.
Speaker 1: I'm like, I'm just rehearsing. I have to be moving.
Speaker 1: For me. It's there's there's a somatic company and that
Speaker 1: really helps the get the articular. So I normally ask
Speaker 1: about My second question is about mentors. So I want
Speaker 1: to ask this question because from Barclays to eat f
Speaker 1: dot com to vitify, who helped shape your career? Oh
Speaker 1: my gosh, a million people you know, probably you know,
Speaker 1: not necessarily people who will know, but like, there was
Speaker 1: a a guy who was sort of my uncle growing up,
Speaker 1: who was a Vietnam being on VET mortar surgeon and
Speaker 1: blown off his hand and he was just sort of
Speaker 1: growing up in Lenox. He was an uncle of a
Speaker 1: friend of mine, and he was probably the model that
Speaker 1: I put in my head when I'm sort of like,
Speaker 1: what would so and so do you know? It would
Speaker 1: definitely be Al robertson Um, who was a businessman of
Speaker 1: some note. But in terms of my direct career, you know,
Speaker 1: I look back at those early days at UM Wells Fargo, Nico,
Speaker 1: and for sure I needed to be taught stuff back then.
Speaker 1: UM and I give Patty Dunn and Fred grauer Um
Speaker 1: and Blake Grossman a lot of a lot of credit
Speaker 1: for that because I was very young, and they're all
Speaker 1: probably ten fifteen years my senior at the time, and
Speaker 1: they were they were incredibly important. But um, Honestly, if
Speaker 1: I picked one person, probably Matt Hogan, who's ten years
Speaker 1: my junior. I've been working with him since nineties six
Speaker 1: or seven. He was a biotech analyst when I was
Speaker 1: running money. He and I just have stayed incredibly close
Speaker 1: over the years. And if there's like one person who
Speaker 1: I was like, if I had a business decision, like
Speaker 1: career choice, ethical quandary, something like that is a question,
Speaker 1: would be the first person in call. He seems to
Speaker 1: be a very sensible, thoughtful person and not given to
Speaker 1: you know, he's a main guide. I mean, that's that's
Speaker 1: what that's how he started in life. He was literally
Speaker 1: in college, got his guiding certificate in Maine. And we
Speaker 1: know what those guys are, right, that's the most practical people.
Speaker 1: God dang planet. How do you survive and not get
Speaker 1: trampled by an elk exactly or attacked by a bear
Speaker 1: when you're out hunting moose or bear. It's all about
Speaker 1: reality there talk about recognizing reality. The penalty there for
Speaker 1: being wrong is death, right, it's not. My account is
Speaker 1: down six percent. It's a bunch of bears disembedstment. That's
Speaker 1: why I'm such a fan of being outside in general, honestly,
Speaker 1: is because like, if you're three miles in on the
Speaker 1: Appalachian Trail in the middle of the woods and storm
Speaker 1: comes up, that's as real as the world guests. Right
Speaker 1: when you're at a cell phone coverage, standing in your
Speaker 1: sneakers in the middle of the woods, that's as real
Speaker 1: as the world gets. There's no bodies, there's no people,
Speaker 1: there's no stuff, there's no man made anything. That's base
Speaker 1: state reality. I've had this conversation with people who out
Speaker 1: on the water on boats. It's like, listen, you can't
Speaker 1: flip on channel two and get the weather forecast. You
Speaker 1: need the marine forecast because if it's six ft swells
Speaker 1: and forty mile on our winds coming up, you need
Speaker 1: to know that and basically stay in the marina, not
Speaker 1: go out. Not oh, it's gonna be sunny out today.
Speaker 1: That's sort of Donning Krueger. Hey, you need to really
Speaker 1: know what you don't know and not assume you're good
Speaker 1: at this outdoors. Mother nature is a cruel mistress. There
Speaker 1: is no fooling around well. And I've run into this
Speaker 1: all the time. I live in the woods up in
Speaker 1: the Berkshires in Massachusetts. I run into New Yorkers who
Speaker 1: come up to go hiking all the time, who were
Speaker 1: heading off cliffs, like I mean, it's just almost every
Speaker 1: hike that I go out, and particularly this time of year,
Speaker 1: it's so easy to get lost if you're not used
Speaker 1: to walking around in the leaves in the woods. And
Speaker 1: just just this last weekend, I was walking around just
Speaker 1: on a trail and I was just like, what the
Speaker 1: heck are these people doing going over that ridge line.
Speaker 1: I'm like, hello, don't go that, don't go there. One
Speaker 1: more step is that do Yeah, they'll figure it out.
Speaker 1: Let's talk about books. We've mentioned a lot. Give us
Speaker 1: some of your favorites and what you're reading currently. Oh boy,
Speaker 1: the most impressive book I've read in the last couple
Speaker 1: of years is The Matter with Things by Ian McGilchrist,
Speaker 1: which is fIF pages. It's fifteen under pages of neuroscience
Speaker 1: and psychology, I would say is probably the best way
Speaker 1: to describe. How do you attack a book? Like that.
Speaker 1: You don't sit down and start plowing through. Oh no, So,
Speaker 1: like we haven't talked about this, how to read a book?
Speaker 1: You know how to read a book? I think I
Speaker 1: do because I read a lot of books. No, no,
Speaker 1: there's a book called how do the book? Okay, so
Speaker 1: let's talk about So how to read a book is
Speaker 1: something that I was handed when I was You need
Speaker 1: a pamphlet years old or something like that, and it
Speaker 1: basically outlines it's written in the thirties or something like that.
Speaker 1: It's a very straightforward system for breaking down a book.
Speaker 1: And it starts with like, okay, you have been handed
Speaker 1: a book. Here's what you do in the first ten minutes.
Speaker 1: And it's not for fiction where you're worried about spoiling something.
Speaker 1: This is really for nonfiction. And there's a process they
Speaker 1: go through of like, okay, you read the first four
Speaker 1: paragraphs of the entry production. You go through and you
Speaker 1: read all of the chapter headings, and you know, usually
Speaker 1: through the table of contents to try to understand the flow.
Speaker 1: There's something you don't understand, go read the first paragraph
Speaker 1: of that chapter so that you now understand the flow.
Speaker 1: Then go read the introduction to the concluding chapter, and
Speaker 1: by that point you should understand does this book have
Speaker 1: anything in it for me? Right? And in the in
Speaker 1: that modality, you probably reject half the books you open, right,
Speaker 1: you can. You can do that in the in the
Speaker 1: bookstore literally, right that what you're just it's funny you
Speaker 1: said that, because what you're describing used to be my
Speaker 1: bookstore route exactly. So that's at that would be a
Speaker 1: level one read. A level to read is with whatever
Speaker 1: speed you want, you consume the available content of the
Speaker 1: book itself. So that's literally just reading the book. Now.
Speaker 1: I tend to do that very quickly. That kind of
Speaker 1: reading I can be very very quick with. And that's
Speaker 1: a level to read. I don't mean speed reading. I
Speaker 1: mean just turn pages, understand what, understand what's important. You're
Speaker 1: not going to read every single word on the page.
Speaker 1: We're gonna get the gist of every major point made
Speaker 1: in the book. Right, You're doing your own spot. Unless
Speaker 1: it's a Bill Bryson or an Ed Chancelor, somebody who's
Speaker 1: writing is dense and deep and you really need to
Speaker 1: think about each sentence in each Yeah. Well, so even
Speaker 1: in the modality of how to read a book, a
Speaker 1: level to read even that you would let skip through
Speaker 1: a little bit, because the objective of a level to
Speaker 1: read is to understand everything that the book has to
Speaker 1: offer you, right, so like, what are all its key points?
Speaker 1: Where it's you know, sailing, it's observations, where it's facts
Speaker 1: that you haven't gotten A level three read, which I
Speaker 1: can say I've probably done for ten books in my life.
Speaker 1: Is when you go through and every concept you don't understand,
Speaker 1: you go down the rabbit hole. They mentioned a book
Speaker 1: that you haven't read, you go read that book, and
Speaker 1: that's a very rare thing to do there. So on
Speaker 1: a book that's this big, the honest truth is you start.
Speaker 1: I start at level one. Now. My level one read
Speaker 1: on the matter of Matter with Things probably took me
Speaker 1: a week because it's so just to go through and
Speaker 1: read the opening paragraphs of each chapter and read the
Speaker 1: conclusions and be like, nope, I didn't get that. I
Speaker 1: have to go back without actually reading the book. It
Speaker 1: probably took me a week. Then Tom Morrigan from KCP
Speaker 1: and I spent I want to say, three months. Tom
Speaker 1: has by the way of fascinating Twitter feed. He's phenomenal. Yeah,
Speaker 1: and he's way out there on this stuff. He's my
Speaker 1: my sirpa on this sort of phenomenology and consciousness end
Speaker 1: of things. But then we we sort of we're going
Speaker 1: through it together, which helped a lot um and we
Speaker 1: would bounce ideas back and forth with each other and
Speaker 1: compare notes with where we were. And I did a
Speaker 1: full level to read that book over about a three
Speaker 1: month window, reading it every day. Give me one more book,
Speaker 1: because we've talked about so many already. Uh, how about this,
Speaker 1: I'll go with a comic book, trans Metropolitan by Warren
Speaker 1: ellis my one of my favorite comic books. Could not
Speaker 1: be more relevant for the modern world right now. About
Speaker 1: a journalist named Spider Jerusalem covering the apocalypse in a
Speaker 1: major city, and it feels like it was written about
Speaker 1: today today. Interesting. Our final two questions, what sort of
Speaker 1: advice would you give to a college grad who thinks
Speaker 1: they want to be a financial futurist? We'll probably inventive
Speaker 1: better title. But to do like the kind of work
Speaker 1: that I'm doing, the biggest advice I have is to
Speaker 1: be curious, right, never allow a good rabbit hole to
Speaker 1: go unexplored. We've had conversations about that phrase has come up.
Speaker 1: How much time do you spend down various rabbit holes.
Speaker 1: I mean, I mean pretty much any time that I'm
Speaker 1: not doing something else, I'm like if I if I
Speaker 1: have something in front of me and i'm reading the time,
Speaker 1: it's something that is way deeper than it needs to be,
Speaker 1: because I really want to understand it at a core level. Okay,
Speaker 1: so let me fast forward. I actually by the time
Speaker 1: this comes out, this will be old news. But I
Speaker 1: did a blog post about how the FED is causing inflation.
Speaker 1: The FED, by raising rates, is causing the CPI inflation
Speaker 1: prints to be higher because the crazy way BLS measures
Speaker 1: the cost of shelter. And the only way I was
Speaker 1: able to put that together, and I'm bringing this up
Speaker 1: because I know you'll appreciate it is because I lived
Speaker 1: in that rabbit hole during the two thousands. But I
Speaker 1: was arguing BLS is under reporting inflation because of we've
Speaker 1: had that conversation. But that was in the two thousands,
Speaker 1: so the FEED had taken rates down too quickly, too low,
Speaker 1: and that led to a spike in the cost of shelter,
Speaker 1: which the BLS reports the inverse of. Fast forward twenty
Speaker 1: years years now, the FT is raising rates and that
Speaker 1: leads the b L S c P I to over
Speaker 1: report inflation because the way they measure owners equivalent rent
Speaker 1: because for many people a home is an asset, but
Speaker 1: if you're a renter and it's going up, how do
Speaker 1: you measure that? And it's not this grand conspiracy, it's
Speaker 1: just a complex modeling problem, which, as you've described, we
Speaker 1: it wrong. Yeah, and I think that those are endemic.
Speaker 1: They're everywhere. I mean during the game stop run up,
Speaker 1: people were talking about, well we had to make cap
Speaker 1: you know, why did DTC have to have a capital
Speaker 1: call in Citadel? And this must be somebody buying Ken
Speaker 1: Griffin's damn. And it's like, again, they're so easy to
Speaker 1: disprove that, but only if you've already spent a year
Speaker 1: down the rabbit hole of understanding capital requirements at settlement Bureau.
Speaker 1: We all we all talk about our priors, but if
Speaker 1: your priors were down the rabbit hole, then you have
Speaker 1: a frame of reference to understand these complex endemically with
Speaker 1: the with the enormous caveat that everything you knew about
Speaker 1: financial markets now and so first in in the post,
Speaker 1: I cite something I had quoted from from I think
Speaker 1: it was a Cleveland Fed or Atlanta Fed. Look at
Speaker 1: o we are. And then fortunately my my buddy and
Speaker 1: Victus said, hey, you know that the Federal Reserve and
Speaker 1: the maybe it was the Cleveland FED just did a
Speaker 1: piece on this like three days ago. So I was
Speaker 1: able to site like, oh, and here's the latest change
Speaker 1: that they're changing the they're the FED. Everybody is aware
Speaker 1: that this is a problem, that they're changing the way
Speaker 1: they measure this. But this all goes back to we're wrong,
Speaker 1: the models are wrong. We have have to get it right,
Speaker 1: all right. Final question, what is it that you know
Speaker 1: about the world of investing today or the world today
Speaker 1: that you wish you knew twenty five years or so
Speaker 1: ago when you were first starting out. Oh well, I
Speaker 1: mean it's a beating a dead horse here, but that
Speaker 1: I was wrong and whatever the question is, the answer
Speaker 1: is I was wrong, right that that yeah, that that
Speaker 1: fundamental shift in my perception, which really only happened in
Speaker 1: the last three or four years. The pandemic helped a
Speaker 1: lot to recognize the inherent fallibility of human experience and
Speaker 1: approach every conversation with the humility that that implies. If
Speaker 1: I could go back and beat that into my year
Speaker 1: old self I would do in a heartbeat. Fantastic, Dave,
Speaker 1: Thank you being so generous with your time. We have
Speaker 1: been speaking with Dave Noddig, financial futurists for Vitify. If
Speaker 1: you enjoy this conversation, well, be sure and check out
Speaker 1: any of the previous four hundred and forty we've done
Speaker 1: over the past eight years. You can find those at iTunes,
Speaker 1: Spotify and now YouTube, or wherever you feed your podcast fix.
Speaker 1: We love your comments, feedback in suggestions right to us
Speaker 1: at m IB podcast at Bloomberg dot net. Follow me
Speaker 1: on Twitter at rid Halts. You can sign up from
Speaker 1: my daily reading list at dhults dot com. I would
Speaker 1: be remiss if I did not thank the crack team
Speaker 1: who helps put these conversations together each week. Sarah Livesey
Speaker 1: is my audio engineer. A Tick of val Bron is
Speaker 1: my project manager. Paris Wold is our producer. Sean Russo
Speaker 1: is my head of research. I'm Barry Rid Halts. You've
Speaker 1: been listening to Masters in Business on Bloomberg Radio.