WEBVTT - The Jealousy List, ETF Edition 0:00:05.960 --> 0:00:12.840 Welcome to Trilliance. I'm Joel Weber, and I'm so Eric. 0:00:12.920 --> 0:00:15.680 I'm the editor of Business Week. As you know, every 0:00:15.760 --> 0:00:18.320 year we do this thing that we call the Jealousy List. 0:00:18.920 --> 0:00:22.279 The Jealousy List is an exercise in humility. Have you 0:00:22.320 --> 0:00:25.360 seen it? Yes? Yeah, no, I've seen him. You've done 0:00:25.360 --> 0:00:27.920 it for a few years, right, multiple years, yeah, And 0:00:28.160 --> 0:00:31.520 so the exercise is one that we invite not only 0:00:31.520 --> 0:00:33.320 the staff of Business Week, but a bunch of our 0:00:33.320 --> 0:00:37.599 contributors throughout the Bloomberg News universe to say, if there 0:00:37.680 --> 0:00:42.120 was one story that someone other than you and and 0:00:42.159 --> 0:00:45.479 Bloomberg did this year, what was it? What are you 0:00:45.680 --> 0:00:50.639 most jealous of in the pantheon of journalism. We get 0:00:50.640 --> 0:00:53.120 a ton of positive feedback about it every year, and 0:00:53.159 --> 0:00:55.240 it makes for a great end of your reading list 0:00:55.520 --> 0:00:57.920 that I encourage everyone to check out over the holidays 0:00:57.960 --> 0:01:02.800 at Bloomberg dot com. And this year was you know, 0:01:02.960 --> 0:01:08.120 everyone was doing good stuff during the pandemic. So it 0:01:08.240 --> 0:01:11.400 was a special treat to be able to look across 0:01:11.600 --> 0:01:14.679 everybody in journalism and say, here's some things that stood 0:01:14.680 --> 0:01:17.840 out to us. And we figured we would take that 0:01:17.880 --> 0:01:21.480 same exercise to trillions this episode and talk to some 0:01:21.560 --> 0:01:25.120 of our main et F contributors and figure out what 0:01:25.240 --> 0:01:28.679 they were jealous of. Yeah, and just curious, did you 0:01:28.800 --> 0:01:31.560 have one that you were jealous of? Yeah? Of course. 0:01:32.280 --> 0:01:37.080 And it was by New York Magazine and the story 0:01:37.200 --> 0:01:41.319 was the World's best Bureaucrat. Do you know who that is? Oh? Yeah, 0:01:41.360 --> 0:01:46.039 well you told yeah, So it was. It was a 0:01:46.080 --> 0:01:49.000 great story that they did. I was super jealous of 0:01:49.000 --> 0:01:52.680 it because, look like we talked about Jerome Pow a lot, 0:01:53.080 --> 0:01:55.520 and we talked about the FED a lot. But the 0:01:55.560 --> 0:01:58.520 way that they framed that, I just thought it was. 0:01:58.800 --> 0:02:01.200 I read the article, It wasn't like I even learned 0:02:01.200 --> 0:02:03.160 that much from it, but they just put it all 0:02:03.200 --> 0:02:06.600 together in this great What was the main framing? Because 0:02:06.600 --> 0:02:08.640 you know, Jerome call gets a lot of ink. Most 0:02:08.680 --> 0:02:11.639 people understand he has big influence on the markets. What 0:02:11.680 --> 0:02:16.560 was the framing here? So Josh Barrow, who you probably 0:02:16.600 --> 0:02:19.679 know he's now a business insider, but he was columns 0:02:19.760 --> 0:02:23.320 for for New York magazine, and and again I just 0:02:23.360 --> 0:02:26.040 thought that it was like the framing of thinking of 0:02:26.120 --> 0:02:29.560 Pale as a bureaucrat, which the trickle down effect and 0:02:29.680 --> 0:02:31.480 why I would still want to talk about it on 0:02:31.520 --> 0:02:35.200 trillions is that you know, he was Superman this year, right, 0:02:35.600 --> 0:02:40.600 and the sun that radiated from the FED basically kept 0:02:41.160 --> 0:02:44.960 the markets and the economy going right. And and so 0:02:45.040 --> 0:02:47.360 the fact that we could talk about that but do 0:02:47.480 --> 0:02:50.320 it through sort of a more of a novel framing, 0:02:50.360 --> 0:02:53.720 I thought was to reach that wider audience that they 0:02:53.760 --> 0:02:56.639 can reach. Yeah, that's really great, and yeah, Josh is 0:02:56.680 --> 0:02:59.520 real good at um he's in the he's in the 0:02:59.560 --> 0:03:03.079 wider world of news, but he knows the markets really well. 0:03:03.120 --> 0:03:05.440 And I can see why you'd pick that. But also, 0:03:05.480 --> 0:03:07.639 can I just go a little crazy with the Superman 0:03:07.680 --> 0:03:10.880 metaphor here? I literally had the thought that you remember 0:03:10.919 --> 0:03:13.080 at the end of Superman one, when he flies around 0:03:13.120 --> 0:03:16.200 the earth like, you know, so fast that he rewinds time. 0:03:17.040 --> 0:03:19.079 I swear as like the Fed kind of pulled the 0:03:19.120 --> 0:03:22.320 Superman one because they made that huge fall in March 0:03:22.440 --> 0:03:26.000 come kind of right back and they really rewound time 0:03:26.040 --> 0:03:28.680 a little bit. It was really unbelievable. I think Superman 0:03:28.800 --> 0:03:32.160 is a pretty apt metaphor. So joining us on this 0:03:32.200 --> 0:03:36.400 episode we have Jako Petershill, who's an editor on the 0:03:36.400 --> 0:03:41.080 Cross Asset team in London. First time on Trillions Clear Balentine, 0:03:41.200 --> 0:03:44.480 who's a cross asset reporter, and Katie Gridfield, the markets 0:03:44.520 --> 0:03:48.440 and et F reporter. And we'll also get Eric's jealousy 0:03:48.480 --> 0:04:03.400 pick too, this time on Trillions Jealousy List. Alright, Yakobe, Claire, Katie, 0:04:03.400 --> 0:04:05.520 great to have you on Trillions again, Thanks for joining us. 0:04:05.880 --> 0:04:09.480 Thank you. Okay, Eric, I gave you mine. What was 0:04:10.000 --> 0:04:13.320 the jealousy list item that you would put on your 0:04:13.360 --> 0:04:16.560 list this year? Well, there's a lot. You know, I'm 0:04:16.560 --> 0:04:18.560 in research, so I'm gonna kind of look to other 0:04:18.600 --> 0:04:21.960 analysts as opposed to reporters. But um, the people I 0:04:22.040 --> 0:04:25.680 tend to get jealous of our Dave Nadigg, Ben Johnson 0:04:25.720 --> 0:04:28.919 at morning Star, Todd rosen Bluth, they always write, you know, 0:04:29.040 --> 0:04:30.640 a couple of things a year that I am really 0:04:30.680 --> 0:04:34.120 impressed by. But Dave Nadie in particular, had two articles 0:04:34.120 --> 0:04:37.640 this year, won during the fixed income bond ETF sell 0:04:37.680 --> 0:04:40.720 off that really nobody goes as deep into trading as him, 0:04:40.720 --> 0:04:41.960 and I thought that was good. But the one that 0:04:42.120 --> 0:04:44.680 recently came out that I wish I wrote, and I 0:04:44.720 --> 0:04:47.799 was thinking of writing, and I'm probably going to quote 0:04:47.839 --> 0:04:51.040 in this book I'm working on, is an article called 0:04:51.080 --> 0:04:53.520 how big is too big? And it's an e t 0:04:53.640 --> 0:04:57.159 F trends And essentially there's been this steady drumbeat of 0:04:57.200 --> 0:05:00.480 like worrying that the et F fish it were passive 0:05:00.480 --> 0:05:03.599 issuers are getting too big. Vanguard and black Rock in particular, 0:05:04.000 --> 0:05:07.240 they own eight percent each of the average stock. That's 0:05:07.279 --> 0:05:11.599 a lot. It's the most uh. Ever, and this institutionalization 0:05:11.760 --> 0:05:15.000 of holdings where you have maybe I don't know two 0:05:15.040 --> 0:05:17.719 dozen firms that have really a huge amount of power 0:05:18.240 --> 0:05:21.800 over corporate America. And it's an interesting issue and it's legit, 0:05:21.960 --> 0:05:24.919 but a lot of the academics they just sort of 0:05:24.960 --> 0:05:30.160 worry about it without really providing any any major evidence. Uh. 0:05:30.279 --> 0:05:35.000 For example, like airline tickets would go up incredibly because 0:05:35.000 --> 0:05:38.839 there'd be no motive for the owners of the stocks 0:05:38.880 --> 0:05:41.400 to The motive would be for them to make more money, 0:05:41.400 --> 0:05:43.320 so they'd increase airline tickets. But there's a lot of 0:05:43.320 --> 0:05:46.960 counterpoints and then they really never provide any solutions for 0:05:47.000 --> 0:05:49.800 this uh in these in these papers, they really you know, 0:05:49.800 --> 0:05:52.080 what, what what do you want to break up the index funds? 0:05:52.080 --> 0:05:54.640 Ban index funds um The other thing is the index 0:05:54.680 --> 0:05:56.880 funds obviously do a lot of good, so most people 0:05:56.880 --> 0:05:59.400 who own them don't really care about this issue. So 0:05:59.440 --> 0:06:02.880 there's a lot of cross currents in this particular issue. 0:06:03.160 --> 0:06:06.119 But Dave just broke it down, really made a simple 0:06:06.200 --> 0:06:09.279 way to explain why they are worrying about it, but 0:06:09.360 --> 0:06:11.760 did kind of ding them for for this, you know, 0:06:11.880 --> 0:06:15.160 idea of here's what he has this quote. With this 0:06:15.240 --> 0:06:17.840 concentration and ownership, the knee jerk reaction from pundits and 0:06:17.880 --> 0:06:21.479 academics alike will be and is already let's prove this 0:06:21.560 --> 0:06:24.960 is a problem. And I do find that somewhat part 0:06:25.000 --> 0:06:27.800 of this. But he goes through the concerns, goes through 0:06:27.800 --> 0:06:31.520 some counterpoints, and then he also goes through what we 0:06:31.560 --> 0:06:34.920 shouldn't do and what we could do, and I like that. 0:06:35.000 --> 0:06:38.200 I like that uh adding of solutions in there. So 0:06:38.760 --> 0:06:41.200 it was just a really good, well rounded article. I 0:06:41.279 --> 0:06:44.320 highly recommend reading it, especially if you get a little 0:06:44.360 --> 0:06:47.000 alarmed by some article that has the headline of like 0:06:47.839 --> 0:06:51.440 is Vanguard too big or is uh passive going to 0:06:51.520 --> 0:06:54.440 raise your airline tickets? Um, just read this piece and 0:06:54.520 --> 0:06:56.359 it will give you a more well rounded picture of 0:06:56.360 --> 0:07:00.520 the situation. It's pretty nerdy, it is, but it's you know, 0:07:00.560 --> 0:07:04.000 when it's an ongoing issue, and it's one that um, 0:07:04.200 --> 0:07:06.599 you know, the academics would argue that it's not that 0:07:06.640 --> 0:07:11.120 wonky because this could could affect consumers. So anybody who 0:07:11.320 --> 0:07:15.560 buys goods, flies and airplanes, not this year, but regularly. Uh, 0:07:15.600 --> 0:07:18.640 this could affect you. That's what they would say. And 0:07:18.880 --> 0:07:22.040 a lot of people on the index side would you know, 0:07:22.080 --> 0:07:24.120 beg the differ. But that's why it's an issue that 0:07:24.520 --> 0:07:26.920 has a lot of depth in my opinion, because it 0:07:26.920 --> 0:07:30.200 really strikes at the heart of markets and capitalism. Okay, Claire, 0:07:30.240 --> 0:07:34.120 did Eric just steal your jealousy list item? No? Um, 0:07:34.320 --> 0:07:37.720 I had had a different one. I um, it was 0:07:37.800 --> 0:07:40.320 an article and it's technically e t N s and 0:07:40.360 --> 0:07:42.280 not E t f s, but I think it can 0:07:42.400 --> 0:07:45.760 can qualify. But what remind us what E t N is? 0:07:46.040 --> 0:07:50.520 So E t N s are unsecured debt obligations. They 0:07:50.560 --> 0:07:52.520 sound similar to e t F s, but they're actually 0:07:52.840 --> 0:07:56.040 pretty different, um in the in the sense that they're 0:07:56.080 --> 0:07:59.840 similar to bonds. Um they have a maturity date. One 0:07:59.880 --> 0:08:02.200 of the things people like about them is that they 0:08:02.200 --> 0:08:05.000 are leveraged a lot of the times and can deliver 0:08:05.640 --> 0:08:09.480 big returns, but they can also really amplify losses UM, 0:08:09.520 --> 0:08:13.120 and they really came into the spotlight this year during 0:08:13.160 --> 0:08:15.440 all the volatility in March and then you know the 0:08:15.520 --> 0:08:18.080 storage back to all time highs and just how that 0:08:18.160 --> 0:08:22.640 market activity really whipsawed these exchange traded notes that counts 0:08:22.800 --> 0:08:25.640 will go with it so UM. But it was one 0:08:25.720 --> 0:08:30.440 that Akani Otani and Sebastian pelle Haero did for the 0:08:30.520 --> 0:08:32.760 Raw Street Journal UM. It came out at the beginning 0:08:32.800 --> 0:08:36.160 of June UM and its title is bankrupt in just 0:08:36.280 --> 0:08:41.400 two weeks. Individual investors get burned by collapse of complex securities, 0:08:42.120 --> 0:08:46.920 and it was all about more retail, smaller investors that 0:08:47.200 --> 0:08:51.320 put all their money into UM E t N s UM. 0:08:51.480 --> 0:08:54.240 Some of them were talking about their retirement savings going 0:08:54.280 --> 0:08:58.240 in there trying to UM get returns on those and 0:08:58.360 --> 0:09:02.199 sort of learned in by that UM possibility of having 0:09:02.240 --> 0:09:05.400 really outsized gains from these leveraged E t N s 0:09:05.679 --> 0:09:09.280 and how UM some of them just got completely wiped 0:09:09.320 --> 0:09:12.560 out during the volatility in March. And what I really 0:09:12.559 --> 0:09:14.720 liked about it was that it it talked to these 0:09:14.760 --> 0:09:17.920 individual investors, which isn't something that's easy to do to 0:09:18.000 --> 0:09:20.319 find people willing to talk about how much money they 0:09:20.360 --> 0:09:23.640 lost um, and also to be able to sort of 0:09:23.640 --> 0:09:27.080 tell their stories, which is something that I wish we 0:09:27.240 --> 0:09:29.880 did more in our articles and one of the goals 0:09:29.920 --> 0:09:33.360 of mine moving into But I thought they did a 0:09:33.400 --> 0:09:36.880 great job of just really laying out, um, kind of 0:09:36.920 --> 0:09:40.480 why these investors would go into the products, some of 0:09:40.520 --> 0:09:44.000 them trying to boost their retirement savings, UM, just their 0:09:44.120 --> 0:09:47.360 idea that bond yields are so low, um, and just 0:09:47.400 --> 0:09:49.960 sort of searching for products. And there's been such a 0:09:50.000 --> 0:09:55.040 discussion over whether there's enough regulation around these e t 0:09:55.280 --> 0:09:59.120 n s and enough disclaimers to sort of prevent retail 0:09:59.160 --> 0:10:02.080 investors from going into them um. And there's a lot 0:10:02.120 --> 0:10:03.839 of back and forth on that debate. But it's sort 0:10:03.880 --> 0:10:06.559 of hard to read this article and not think, Wow, 0:10:06.679 --> 0:10:08.840 something is sort of messed up in the sense that 0:10:09.200 --> 0:10:13.560 these people can lose so much money from these products. Claire, 0:10:13.600 --> 0:10:15.719 that's a good one. I think e t n s 0:10:15.760 --> 0:10:18.439 are kind of like the wild cousin of the E 0:10:18.559 --> 0:10:21.559 t F. They arguably shouldn't even be under the same umbrella. 0:10:21.600 --> 0:10:24.360 They just they are though. But yeah, a lot of 0:10:24.360 --> 0:10:25.920 them closed. This was a year where a lot of 0:10:25.920 --> 0:10:28.559 exotics closed, so a lot of this worry probably took 0:10:28.559 --> 0:10:30.480 care of itself with all those closures like t vix 0:10:31.040 --> 0:10:33.960 u w T. In our rating system, we call these 0:10:33.960 --> 0:10:37.800 the the n C seventeen products. They're worse than rated 0:10:37.920 --> 0:10:41.560 r UM. But the E t F tent is so big, 0:10:42.160 --> 0:10:44.200 and picking a product that you don't understand is is 0:10:44.200 --> 0:10:47.120 definitely a possibility and something that is you know, should 0:10:47.160 --> 0:10:50.600 be looked at and you know, talked about more. But 0:10:50.760 --> 0:10:52.559 or Yako, you want to talk about Europe and how 0:10:52.600 --> 0:10:55.320 insane it is over there? Um, what in terms of 0:10:55.360 --> 0:10:58.240 E t n s. Yeah, they let anything go there. Yeah, 0:10:58.240 --> 0:11:01.640 there's a as a company called Leverage Shares out here 0:11:01.679 --> 0:11:05.319 that does basically their whole product is just it's an 0:11:05.320 --> 0:11:07.560 e t F that gives you leveraged exposure to a 0:11:07.600 --> 0:11:09.920 single stock. So you can buy this e t F 0:11:09.960 --> 0:11:11.640 as a way of like getting like I mean, I 0:11:11.679 --> 0:11:13.640 don't think it goes up to like seven times or anything, 0:11:13.640 --> 0:11:16.440 but they definitely have like triple leverage TESLA exposure and 0:11:16.440 --> 0:11:17.760 it's an e t F and you just buy it 0:11:17.760 --> 0:11:21.000 on an exchange. It's it's bizarre. Um. And of course Eric, 0:11:21.240 --> 0:11:23.840 you know from the past, we also have like seven 0:11:23.880 --> 0:11:27.839 times you know, negative docks index e t N s 0:11:27.880 --> 0:11:29.880 that are you know, issued by sock Gin and banks 0:11:29.920 --> 0:11:32.160 like that, and those are always fun, Joel. They know 0:11:32.200 --> 0:11:35.080 how to party in Europe. That's the bottom. Mean you 0:11:35.120 --> 0:11:37.640 could you imagine if all that stuff was on robin Hood. 0:11:38.160 --> 0:11:40.720 Oh my god. The three x tesla on robin Hood 0:11:40.800 --> 0:11:44.160 is quite is something to think about. Yeah, yeah, there's 0:11:44.160 --> 0:11:45.720 a bit more freedom out here in Europe. You know. 0:11:45.760 --> 0:11:47.760 It's like, you know, we have nude beaches, we have 0:11:47.960 --> 0:11:51.719 like underage drinking and yeah, it goes right, it goes 0:11:51.760 --> 0:12:03.560 fits right. In hatch bars we heard from Quare Now 0:12:03.720 --> 0:12:07.439 Wall Street Journal gave her pains? What gave you pains? 0:12:07.440 --> 0:12:09.640 What are you jealous of? Okay, so if you know, 0:12:09.720 --> 0:12:12.040 but you know, I dabble in volatility a lot too, 0:12:12.120 --> 0:12:14.920 And and this story is kind of it's mostly about volatility, 0:12:14.960 --> 0:12:18.280 but it's tangentially related to to the et P space because, 0:12:18.320 --> 0:12:21.480 as we know, back in ten, a lot of E 0:12:21.559 --> 0:12:24.240 t F and e t N investors got burned trading volatility. 0:12:24.840 --> 0:12:27.800 A similar thing happened this year UM, but in a 0:12:27.880 --> 0:12:31.840 sort of positive twist, it was less UM retail investors 0:12:31.880 --> 0:12:34.560 that got burned than the institutions. UM. This year, so 0:12:34.600 --> 0:12:38.040 that was kind of a heartwarming sort of development. UM. 0:12:38.120 --> 0:12:40.559 So my article that I'm jealous of this year is 0:12:40.600 --> 0:12:44.680 called how to Lose a Billion dollars Without Really Trying UM, 0:12:44.720 --> 0:12:46.800 which is an awesome title, and it was written by 0:12:46.880 --> 0:12:50.840 Leanna Or for Institutional Investor magazine UM, and basically it's 0:12:50.880 --> 0:12:53.280 a it's a long feature and a sort of postmortem 0:12:53.720 --> 0:12:56.760 UM that makes the argument that trading volatility was actually 0:12:56.800 --> 0:13:00.640 the the w or like the sub toxic subprime riggage 0:13:00.840 --> 0:13:04.520 of the Corona crash. Everyone knows what happened right in March, 0:13:04.800 --> 0:13:07.560 VIC spike to a record UM, and a lot of 0:13:07.600 --> 0:13:10.640 people were short volatility, a lot of sophisticated hedge funds, 0:13:10.960 --> 0:13:13.800 a lot of pension funds that invest you know, our 0:13:13.880 --> 0:13:17.960 grandparents money for them, UM, and so pretty much everyone 0:13:18.080 --> 0:13:21.680 was like uniformly burnt on this. Ironically, who came out 0:13:21.720 --> 0:13:25.120 sort of not so badly as the retail investor because 0:13:25.679 --> 0:13:27.960 if you guys remember Posten, there was a lot of 0:13:28.000 --> 0:13:32.000 sort of reform in the volatility etp space UM, and 0:13:32.000 --> 0:13:34.640 these things became kind of a lot less nuclear and 0:13:34.679 --> 0:13:38.080 a lot less popular, So there wasn't as much retail 0:13:38.120 --> 0:13:42.240 speculation on volatility. This time around UM and and in fact, 0:13:42.320 --> 0:13:44.400 a lot of the banks that did things like issue 0:13:44.440 --> 0:13:47.600 these crazy structured notes that were sort of leverage bets 0:13:47.600 --> 0:13:50.000 on volatility, they ended up getting burned a lot more 0:13:50.040 --> 0:13:53.360 than the retail investors who actually bought these things. So 0:13:53.640 --> 0:13:56.200 it was a kind of a bit of poetic justice. Yeah. 0:13:56.320 --> 0:13:58.840 I really loved this story. It was really nicely done 0:13:58.840 --> 0:14:02.199 with a lot of colors. So that mine. Leanna is awesome. 0:14:02.320 --> 0:14:05.080 She just writes these deep dives that I wish I 0:14:05.120 --> 0:14:08.720 had the time or brain to do. Um. I hope 0:14:08.760 --> 0:14:12.800 she's listening because I think she's great. And by the way, Yakob, 0:14:12.880 --> 0:14:15.800 you bring up a good point with every two or 0:14:15.840 --> 0:14:18.080 three years to get a teachable moment in et s, 0:14:18.120 --> 0:14:20.320 I think and X I V was that one like 0:14:20.400 --> 0:14:22.800 three years ago, and it kind of did correct itself. 0:14:22.800 --> 0:14:25.400 They neutered all the leverage ones. People worried about t 0:14:25.520 --> 0:14:27.240 VIX now that did get up to about I think 0:14:27.240 --> 0:14:29.920 it was seven billion in March because it was just 0:14:30.080 --> 0:14:32.040 I think it returned two thousand percent in like three 0:14:32.040 --> 0:14:34.680 months or two months or something. But then that's also 0:14:34.800 --> 0:14:39.480 gone now and so the real Vixie, you know, uh, 0:14:40.360 --> 0:14:44.520 leveraged kind of potential problem. Child's children are pretty much 0:14:44.560 --> 0:14:47.640 gone at this point, although I think there's two, there's 0:14:47.680 --> 0:14:50.240 a couple in the hopper. But what was a problem 0:14:50.240 --> 0:14:52.360 in one of I thought Katie did a great job 0:14:52.400 --> 0:14:55.000 covering this one was USO. That was the teachable moment 0:14:55.080 --> 0:14:57.400 this year? Um, Katie, you want to talk about us 0:14:57.480 --> 0:15:00.560 so real quick and what happened that I'm STI scarred? 0:15:00.680 --> 0:15:04.480 I would say it definitely was a teachable moment. But basically, 0:15:04.760 --> 0:15:08.640 USO invested in the front month oil contract, which, as 0:15:08.680 --> 0:15:13.600 we know in April went negative negative thirty seven per barrel, 0:15:13.680 --> 0:15:16.360 which is just hard to wrap your mind around. So 0:15:16.520 --> 0:15:20.880 USL was scrambling to re shift its holdings, which contracts 0:15:21.120 --> 0:15:25.160 it uh it invested in, and it it did that. Um, 0:15:25.200 --> 0:15:28.760 but I believe it's now still under investigation by the SEC. 0:15:29.000 --> 0:15:31.160 Eric maybe jump in here because I might get it 0:15:31.160 --> 0:15:35.080 wrong over whether it properly disclosed to its investors what 0:15:35.200 --> 0:15:37.080 it was doing with its holdings and how it was 0:15:37.120 --> 0:15:43.120 shifting them around. Yeah, I believe that's still a open investigation. 0:15:43.120 --> 0:15:44.640 That might be a rough word for it. But I'm 0:15:44.640 --> 0:15:47.120 not sure they're going to be liable because if you 0:15:47.200 --> 0:15:50.720 read the prospectives they talk about this being possible, um, 0:15:50.760 --> 0:15:54.640 but it was. It was just oil mcgeddon. Nobody thought 0:15:54.640 --> 0:15:58.600 that futures could go negative, and the idea was, you know, 0:15:58.680 --> 0:16:00.480 do we let futures go negative and then we'll have 0:16:00.520 --> 0:16:03.480 to owe people money like the people, or do we 0:16:03.840 --> 0:16:07.040 completely newter the exposure and water it down. And they 0:16:07.120 --> 0:16:10.400 chose the safe route. And so the ultimately the problem 0:16:10.400 --> 0:16:12.280 with it then was that people who who wanted it 0:16:12.560 --> 0:16:15.640 for the hardcore front month exposure didn't get it. They 0:16:15.680 --> 0:16:18.200 weren't getting that oil rebound like they wanted to. So 0:16:18.480 --> 0:16:21.160 the whole thing was a big mess. USO ties into 0:16:21.200 --> 0:16:24.360 the retail story because it was a very popular stock 0:16:24.440 --> 0:16:26.880 on not a stock and et up on robin Hood 0:16:26.880 --> 0:16:29.280 when you could still track their day to day holdings. 0:16:29.600 --> 0:16:32.880 People just kept piling into US. So even as all 0:16:32.960 --> 0:16:36.760 this turmoil was unfolding, because I guess retail investors were 0:16:36.800 --> 0:16:39.480 like this invests in oil. I want to bet on 0:16:39.480 --> 0:16:42.120 the bottom and oil here we go. And Joel, you 0:16:42.160 --> 0:16:45.040 know what's interesting about oil. It's that's one of the 0:16:45.080 --> 0:16:48.120 things I'll get texts about from old college friends and stuff, 0:16:48.280 --> 0:16:50.240 when they see oil go down that much that it 0:16:50.280 --> 0:16:53.320 makes like the CBS Nightly News with Lester Holt or 0:16:53.400 --> 0:16:56.040 whatever they want in they feel like they're Warren Buffett. 0:16:56.080 --> 0:16:58.720 They're like, I'm I'm buying at the bottom and USO 0:16:58.840 --> 0:17:00.800 is kind of the only way to get that exposure. 0:17:01.360 --> 0:17:03.680 And again, a teachable moment. I doubt we're going to 0:17:03.720 --> 0:17:06.560 see that kind of frenzy next time. It sounds like 0:17:06.600 --> 0:17:09.880 something your dad would call you about. Oh yeah, he does. 0:17:10.000 --> 0:17:12.920 Yeah that. I don't know if that has enough for him, 0:17:12.920 --> 0:17:17.479 though he likes even Yeah, that's it's probably two for him. 0:17:18.800 --> 0:17:20.600 By the way, he keeps telling me about t vix 0:17:20.640 --> 0:17:22.840 and how low it's gotten in his account because he 0:17:22.920 --> 0:17:26.040 keeps reverse splitting, and uh, we have a lot of 0:17:26.040 --> 0:17:27.840 fun on that. Yeah, I'm like, hey, but it's up. 0:17:28.160 --> 0:17:31.119 I said t vix went up like two, and he 0:17:31.200 --> 0:17:34.199 basically looked at it at the percentage he went up 0:17:34.240 --> 0:17:37.080 was maybe like one percent, because that's how much he 0:17:37.080 --> 0:17:39.399 had lost over the five years he's held it. Anyway, 0:17:39.400 --> 0:17:41.760 the whole thing was it was funny. There's an episode 0:17:41.800 --> 0:17:45.160 where we interview my dad about his experience with t vix, 0:17:45.600 --> 0:17:49.080 and it's a classic case of you know what Claire 0:17:49.119 --> 0:17:51.360 was talking about, how you have real people who buy 0:17:51.359 --> 0:17:53.600 this stuff. He bought it because he thought Hillary was 0:17:53.600 --> 0:17:56.840 gonna win and the market would just plunge. And he said, 0:17:56.840 --> 0:17:58.760 what will go up to most if the market plunges? 0:17:58.800 --> 0:18:01.000 And I said, well, t vix, but you gotta sell 0:18:01.040 --> 0:18:03.800 it whether it works or not, in a week, and 0:18:03.840 --> 0:18:10.720 he just didn't sell. It's a long term investor in TVA. Okay, Katie, 0:18:11.000 --> 0:18:14.000 uh Uso? Was that? Was that your jealousy pick or 0:18:14.040 --> 0:18:16.920 did you have something else? I think we did a 0:18:16.920 --> 0:18:20.240 pretty good job covering Uso, so I'm actually my jealousy 0:18:20.280 --> 0:18:23.480 pick is pretty recent. It's from earlier this month. It's 0:18:23.560 --> 0:18:26.439 also from the Wall Street Journal, so Claire, we have 0:18:26.480 --> 0:18:31.240 our targets, but it's by Shanna Schoenberger and it's on 0:18:31.400 --> 0:18:34.760 a study that it's really fascinating. I wanted to write 0:18:34.800 --> 0:18:37.160 about it, I just didn't get time. It was released 0:18:37.160 --> 0:18:40.280 in October and it's about target date funds, which are 0:18:40.720 --> 0:18:44.159 it's a one point for trillion dollar industry. It's extremely 0:18:44.200 --> 0:18:48.159 important and uh it's it's exactly what it sounds like. 0:18:48.200 --> 0:18:52.600 You know, investors pick a target date fund with a 0:18:52.680 --> 0:18:57.040 specific date further retirement savings, and it glides them towards 0:18:57.080 --> 0:19:02.680 that date and gradually shifts them into bonds. Yes, exactly, 0:19:02.720 --> 0:19:05.400 you can just set it and forget it. You're on autopilot. 0:19:05.800 --> 0:19:09.159 But this study was from David Brown, a professor at 0:19:09.200 --> 0:19:12.760 the University of Arizona and Sean Davies, professor at the 0:19:12.840 --> 0:19:18.120 University of Colorado at Boulder, and they found basically that 0:19:18.560 --> 0:19:22.280 target date funds sponsors, because target date funds are funds 0:19:22.280 --> 0:19:25.840 of funds, they charged basically two fees, and because of 0:19:25.880 --> 0:19:29.439 those fees, they charged nearly two point five billion in 0:19:29.600 --> 0:19:33.160 XS fees in seen alone versus what you could save 0:19:33.200 --> 0:19:36.119 by just replicating those portfolios with a e t F. 0:19:36.680 --> 0:19:39.560 So it just goes to show that the retire the 0:19:39.560 --> 0:19:43.800 American retirement system could be improved if perhaps of e 0:19:43.920 --> 0:19:45.760 t f s were allowed in for oh one case, 0:19:46.520 --> 0:19:50.560 but just an incredibly important study and story, and she 0:19:50.640 --> 0:19:53.440 did a great job. Added additional reporting where she talked 0:19:53.480 --> 0:19:56.400 to some of the biggest target date fund sponsors, Vanguard 0:19:56.440 --> 0:20:00.159 Fidelity and basically got them to defend their fees. So 0:20:00.640 --> 0:20:03.560 great article. I wish I had written it, but she 0:20:03.920 --> 0:20:06.320 beat me to the punch. Yeah. I think that's a 0:20:06.680 --> 0:20:10.920 um a really good example as well of something that 0:20:11.040 --> 0:20:14.119 I wish we could have covered UM. We definitely have 0:20:14.280 --> 0:20:17.800 our our target set out for one about who we 0:20:17.840 --> 0:20:20.880 have to be. But I think it's a tremendously Like 0:20:20.920 --> 0:20:23.720 you said, it's UM one point four trillion, so it's 0:20:23.880 --> 0:20:27.199 tremendously important for us to cover that and to be 0:20:27.280 --> 0:20:30.960 talking about it. And one thing I will add about 0:20:30.960 --> 0:20:33.960 the study is UM. You know, they estimate from that 0:20:34.040 --> 0:20:37.440 two point five billion and XS fees, investors could save 0:20:37.480 --> 0:20:40.600 about one percent per year by just replicating with E 0:20:40.680 --> 0:20:43.320 t s. But that does kind of ignore the set 0:20:43.400 --> 0:20:46.200 it and forget it mentality. You know, investors probably don't 0:20:46.200 --> 0:20:50.160 want to be working to recreate these portfolios all the time, 0:20:50.240 --> 0:20:53.119 but I mean it's still hugely important if you're saving 0:20:53.160 --> 0:20:56.359 for retirement, that one percent matters a lot. And also 0:20:56.400 --> 0:20:59.840 say that it seems to me that there's the et 0:21:00.040 --> 0:21:03.160 has to become so popular. They trade, there's so much 0:21:03.160 --> 0:21:06.840 innovation that most of the media has really covered them 0:21:06.840 --> 0:21:09.080 to the point where ten years ago there was hardly 0:21:09.119 --> 0:21:13.760 any coverage. Now it's very much matured into full coverage. 0:21:14.080 --> 0:21:15.960 But I feel like they've left the mutual fund world 0:21:15.960 --> 0:21:19.080 too much. There's not enough eiveballs and lights being shined 0:21:19.119 --> 0:21:21.000 and what is still ten trillion dollars. There's a lot 0:21:21.040 --> 0:21:23.639 of things going on there, and that's interesting to me, 0:21:24.200 --> 0:21:28.080 given that mutual funds still have double uh if you 0:21:28.080 --> 0:21:30.119 have money market funds more than double what E t 0:21:30.280 --> 0:21:33.800 F s have uh, yet they are you know, get 0:21:33.880 --> 0:21:35.439 maybe I don't know a third of the coverage, and 0:21:35.480 --> 0:21:37.440 so it's good to see some of that, especially the 0:21:37.480 --> 0:21:39.760 fore when k plans that you know why, because that 0:21:39.760 --> 0:21:41.600 stuff isn't gonna get a lot of clicks. I'm sorry, 0:21:41.680 --> 0:21:44.600 it's just target date fund this that, or it's just 0:21:44.640 --> 0:21:46.760 not going to light it up. But it's good stuff. 0:21:47.280 --> 0:21:50.720 I'll comfort myself with that. I also find that weird, Eric, 0:21:50.760 --> 0:21:53.359