1 00:00:13,920 --> 00:00:17,119 Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast. 2 00:00:17,320 --> 00:00:19,320 Speaker 1: My name is Mike Reagan. I'm a senior editor at 3 00:00:19,320 --> 00:00:22,480 Speaker 1: Bloomberg and I'm Aldana Higherk across Acid reporter with Bloomberg. 4 00:00:22,680 --> 00:00:25,160 Speaker 1: And this week on the show, Well, this year's bear 5 00:00:25,280 --> 00:00:27,520 Speaker 1: market in stocks has drawn a lot of attention to 6 00:00:27,560 --> 00:00:30,160 Speaker 1: hedge funds, many of whom have been doing a lot 7 00:00:30,200 --> 00:00:33,280 Speaker 1: better than the market as a whole. But what if 8 00:00:33,320 --> 00:00:35,640 Speaker 1: I could tell you you could package some popular hedge 9 00:00:35,640 --> 00:00:38,440 Speaker 1: funds strategies into et f s that charge a fraction 10 00:00:38,479 --> 00:00:40,720 Speaker 1: of the management fees and don't come with all the 11 00:00:40,840 --> 00:00:43,279 Speaker 1: strings attached about who can invest in them and when 12 00:00:43,320 --> 00:00:46,120 Speaker 1: they can cash out. Well, our guest this week has 13 00:00:46,120 --> 00:00:50,640 Speaker 1: been working on exactly that, and quite successfully. But first, Folbanna, 14 00:00:51,280 --> 00:00:53,199 Speaker 1: I've got to warn you, Mike, I've got a good 15 00:00:53,200 --> 00:00:56,120 Speaker 1: crazy thing this week. I know you're a big link 16 00:00:56,280 --> 00:00:59,920 Speaker 1: LinkedIn users, that right, Yeah, except to add you as 17 00:01:00,200 --> 00:01:03,400 Speaker 1: I would not know since you refused to allow me 18 00:01:03,400 --> 00:01:06,360 Speaker 1: to join your professional network on LinkedIn. Yeah? Is this 19 00:01:06,440 --> 00:01:10,600 Speaker 1: your favorite social media app? I hate all the social 20 00:01:10,640 --> 00:01:13,080 Speaker 1: media I do too, but I use LinkedIn like so 21 00:01:13,160 --> 00:01:16,319 Speaker 1: much to add all these new connections. And I know 22 00:01:16,360 --> 00:01:20,600 Speaker 1: you're adding on left and right all the that's just NonStop. Well, 23 00:01:21,080 --> 00:01:23,000 Speaker 1: my crazy thing is going to make you think twice 24 00:01:23,000 --> 00:01:27,640 Speaker 1: about doing that. I would really, but you know I 25 00:01:28,080 --> 00:01:30,679 Speaker 1: wouldn't know because I'm not a member of your professional 26 00:01:31,319 --> 00:01:33,680 Speaker 1: Maybe and it will say this way, maybe we can 27 00:01:33,760 --> 00:01:35,200 Speaker 1: use that as a new gimmick. If we get a 28 00:01:35,200 --> 00:01:40,080 Speaker 1: certain number of ratings on Apple podcast, Donna has to 29 00:01:40,120 --> 00:01:43,560 Speaker 1: add me. What's the number for ratings to add me 30 00:01:43,600 --> 00:01:48,400 Speaker 1: on LinkedIn? Throw something big out three one. I was 31 00:01:48,400 --> 00:01:53,240 Speaker 1: going to say a thousand, but okay, hundred one. Remember 32 00:01:53,400 --> 00:01:55,800 Speaker 1: once we had three hundred, we're revealing the Donna's high 33 00:01:55,800 --> 00:01:58,760 Speaker 1: school nickname. Which would you rather first the nickname or 34 00:01:58,800 --> 00:02:01,280 Speaker 1: me add you on LinkedIn? Well, of the we're at two, 35 00:02:02,040 --> 00:02:05,360 Speaker 1: I think, so three is the uh gets the nickname? 36 00:02:05,760 --> 00:02:07,480 Speaker 1: Three of one? You have to add me on and 37 00:02:07,600 --> 00:02:10,600 Speaker 1: so we'll see, we'll see, we'll see. Maybe no one 38 00:02:10,639 --> 00:02:12,280 Speaker 1: wants to take it to three one. They don't do 39 00:02:12,280 --> 00:02:15,160 Speaker 1: not want me. But but you know what I usually say, 40 00:02:15,440 --> 00:02:19,360 Speaker 1: guess who is in my LinkedIn network? Probably this week's guest, 41 00:02:19,440 --> 00:02:21,680 Speaker 1: this week's guest. Yeah, that's right, Well I'll add him 42 00:02:21,720 --> 00:02:26,080 Speaker 1: right after the show. Actually, I want to spite me. 43 00:02:26,280 --> 00:02:30,040 Speaker 1: By the way, don't get flattered. I want to introduce 44 00:02:30,160 --> 00:02:34,720 Speaker 1: Andrew Beer. He is managing member at Dynamic Beta. Welcome 45 00:02:34,880 --> 00:02:37,880 Speaker 1: to the show, Andrew, and to my LinkedIn network. Oh 46 00:02:37,919 --> 00:02:40,760 Speaker 1: thank you so much for having me. I wanted to 47 00:02:40,760 --> 00:02:42,519 Speaker 1: ask you to maybe just start out telling us a 48 00:02:42,520 --> 00:02:45,680 Speaker 1: little bit about yourself and about your background. And by background, 49 00:02:45,720 --> 00:02:47,560 Speaker 1: I mean professional background, but if you're up for it, 50 00:02:47,560 --> 00:02:49,480 Speaker 1: you can also sort of paint the picture for our 51 00:02:49,600 --> 00:02:52,919 Speaker 1: listeners of what your actual background is like, since we're 52 00:02:52,960 --> 00:02:54,480 Speaker 1: doing a zoom call with you and we can see 53 00:02:54,480 --> 00:02:59,160 Speaker 1: it and it's it's fantastic. Well, I'm sitting comfortably up 54 00:02:59,160 --> 00:03:02,800 Speaker 1: in the outeron ducks right now, trying to divide my 55 00:03:02,840 --> 00:03:06,760 Speaker 1: time between endless zoom calls and actually going out inside 56 00:03:06,760 --> 00:03:10,560 Speaker 1: and seeing nature. Um. But my my background has been 57 00:03:10,560 --> 00:03:12,920 Speaker 1: in the hedge fund industry for almost thirty years. I 58 00:03:13,040 --> 00:03:15,520 Speaker 1: was I was very fortunate to join the industry in 59 00:03:15,520 --> 00:03:19,080 Speaker 1: the early days and but you know, my my singular 60 00:03:19,080 --> 00:03:22,000 Speaker 1: obsession over the past fifteen years has been some of 61 00:03:22,000 --> 00:03:24,040 Speaker 1: the points that that you're alluding to, which is that 62 00:03:24,919 --> 00:03:27,480 Speaker 1: done right, hedge funds can have great benefits and they 63 00:03:27,520 --> 00:03:30,440 Speaker 1: can benefit more than just that big pension plan down 64 00:03:30,440 --> 00:03:34,240 Speaker 1: the street. But you know, there's actually been the success 65 00:03:34,320 --> 00:03:37,160 Speaker 1: rated products that have been then launched for a broader 66 00:03:37,160 --> 00:03:40,360 Speaker 1: audience has actually been very, very poor. And so what 67 00:03:40,480 --> 00:03:43,440 Speaker 1: we in our business have really focused on for more 68 00:03:43,480 --> 00:03:45,240 Speaker 1: than a decade at this point is is really how 69 00:03:45,280 --> 00:03:48,560 Speaker 1: do you get those diversification benefits but you know, and 70 00:03:48,720 --> 00:03:51,080 Speaker 1: shocking to people in the hedge fund industry, but actually 71 00:03:51,080 --> 00:03:54,119 Speaker 1: in a client friendly package. You know. That's that's it's 72 00:03:54,160 --> 00:03:56,200 Speaker 1: it's just been our singular focus. It's what we do, 73 00:03:56,320 --> 00:03:59,720 Speaker 1: and unfortunately we're seeing some success in it today. Yeah, 74 00:03:59,720 --> 00:04:04,560 Speaker 1: I'll say with the one et f's UH to share 75 00:04:04,600 --> 00:04:08,440 Speaker 1: or something like that dB m F, the h I 76 00:04:08,640 --> 00:04:11,720 Speaker 1: M dB I Managed Futures et F. I wanted to 77 00:04:11,800 --> 00:04:15,240 Speaker 1: and ask you about sort of the history of trying 78 00:04:15,280 --> 00:04:18,680 Speaker 1: to replicate hedge fund strategies in ets because I get 79 00:04:18,720 --> 00:04:21,200 Speaker 1: the impression it's not you know, hey, some traders quit 80 00:04:21,240 --> 00:04:24,120 Speaker 1: a hedge fund and are trying to you know, put 81 00:04:24,160 --> 00:04:26,839 Speaker 1: that strategy directly into an et F. There. It seems 82 00:04:26,880 --> 00:04:28,960 Speaker 1: like there's more of an academic background, you know, the 83 00:04:28,960 --> 00:04:31,800 Speaker 1: Andrew Lows of of m I T and and that 84 00:04:31,880 --> 00:04:34,200 Speaker 1: sort of thing. Is it talk to us about sort 85 00:04:34,200 --> 00:04:37,000 Speaker 1: of how this all came to be. Uh, the notion 86 00:04:37,080 --> 00:04:41,000 Speaker 1: of replicating hedge fund strategies in et s, I came 87 00:04:41,000 --> 00:04:44,720 Speaker 1: at it from completely the opposite direction, which was that, 88 00:04:45,040 --> 00:04:48,159 Speaker 1: you know what what hedge fund replication is all about 89 00:04:48,400 --> 00:04:52,040 Speaker 1: is basically the in hedge funds, it's always the big 90 00:04:52,040 --> 00:04:54,600 Speaker 1: trades to make a difference. You know, when when Stan 91 00:04:54,720 --> 00:04:57,760 Speaker 1: druck and Miller calls inflation, he doesn't talk about trying 92 00:04:57,760 --> 00:05:00,279 Speaker 1: to arbitrage between the twenty nine year treasury at thirty 93 00:05:00,360 --> 00:05:02,280 Speaker 1: year treasuries, like I'm betting rates are going up in 94 00:05:02,320 --> 00:05:04,840 Speaker 1: commodities are going up. Uh. You know when people talk 95 00:05:04,880 --> 00:05:08,159 Speaker 1: about John Paulson and subprime, they don't say, oh, but 96 00:05:08,240 --> 00:05:11,159 Speaker 1: his very very best trade was to buy a few 97 00:05:11,160 --> 00:05:14,320 Speaker 1: million dollars of this tronch and and and profit from it. Right. 98 00:05:14,400 --> 00:05:18,360 Speaker 1: So it's it's it's pretty obvious to anyone who's been 99 00:05:18,360 --> 00:05:21,640 Speaker 1: in the hedge fund industry that if you can figure 100 00:05:21,640 --> 00:05:24,040 Speaker 1: out the big trades of hedge funds, that you're gonna 101 00:05:24,040 --> 00:05:26,240 Speaker 1: be able to explain most of what they do. And 102 00:05:26,240 --> 00:05:28,880 Speaker 1: and what Andrew Low from M I T and a 103 00:05:28,880 --> 00:05:31,760 Speaker 1: bunch of other academics basically pointed out was, you know, 104 00:05:31,760 --> 00:05:34,400 Speaker 1: again in seventy page papers with a lot of statistics. 105 00:05:34,480 --> 00:05:36,440 Speaker 1: Is what was pretty obvious to people in the industry 106 00:05:36,480 --> 00:05:40,039 Speaker 1: all along. What hedge fund replication is as a strategy 107 00:05:40,279 --> 00:05:42,479 Speaker 1: is just trying to find the best way to identify 108 00:05:42,640 --> 00:05:46,120 Speaker 1: what those big trades are and then copy them cheaply 109 00:05:46,160 --> 00:05:48,880 Speaker 1: and efficiently today. And if you can do that, then 110 00:05:48,920 --> 00:05:50,320 Speaker 1: you can do it in an e t F, you 111 00:05:50,360 --> 00:05:51,719 Speaker 1: can do it in a mutual fund, you can do 112 00:05:51,720 --> 00:05:54,479 Speaker 1: it any use it's fund. And so look, I've looked 113 00:05:54,480 --> 00:05:57,200 Speaker 1: at I've looked at this question for fifteen years, and 114 00:05:57,279 --> 00:05:59,920 Speaker 1: there's only one thing we found. We found something better, 115 00:06:00,040 --> 00:06:01,719 Speaker 1: we would do it. This is the only thing that 116 00:06:01,720 --> 00:06:04,560 Speaker 1: we have found that works reliably well. So can you 117 00:06:04,600 --> 00:06:07,480 Speaker 1: talk more about your e t F? And Mike mentioned 118 00:06:07,520 --> 00:06:09,600 Speaker 1: it's up some twenty this year and we've had such 119 00:06:09,640 --> 00:06:12,520 Speaker 1: a brutal year so that our performance really stands out, 120 00:06:12,600 --> 00:06:15,280 Speaker 1: But what is it about the e t F that's 121 00:06:15,279 --> 00:06:19,400 Speaker 1: helped to get to that point? So so we in 122 00:06:19,720 --> 00:06:23,880 Speaker 1: that e t F we basically copy the big positions 123 00:06:24,120 --> 00:06:27,120 Speaker 1: of twenty large hedge funds that pursue a strategy called 124 00:06:27,160 --> 00:06:31,760 Speaker 1: managed futures MANATUTRES is one of those irritatingly vague and 125 00:06:31,800 --> 00:06:34,640 Speaker 1: complicated terms that people use and then really understand what 126 00:06:34,640 --> 00:06:37,919 Speaker 1: it means. But basically, what these hedge funds do is 127 00:06:37,920 --> 00:06:42,160 Speaker 1: they have quant based strategies that are playing off the 128 00:06:42,720 --> 00:06:45,000 Speaker 1: fact that the rest of us human investors are kind 129 00:06:45,000 --> 00:06:47,760 Speaker 1: of emotional. You know, we don't change our minds easily. 130 00:06:47,839 --> 00:06:50,000 Speaker 1: Sometimes we pile into things too late, et cetera. And 131 00:06:50,040 --> 00:06:52,080 Speaker 1: so what that does is it creates trends in the market. 132 00:06:52,520 --> 00:06:55,040 Speaker 1: An asset that that you know, starts rolling down a 133 00:06:55,120 --> 00:06:58,240 Speaker 1: hill kind of keeps rolling and sometimes it accelerates, and 134 00:06:58,279 --> 00:07:00,000 Speaker 1: they don't get it right all the time, but sometimes 135 00:07:00,000 --> 00:07:01,960 Speaker 1: they get it really right, and this year they've gotten 136 00:07:01,960 --> 00:07:05,000 Speaker 1: it really right. Um. And so what we do is 137 00:07:05,000 --> 00:07:07,760 Speaker 1: we basically look at these twenty large hedge funds and say, 138 00:07:07,920 --> 00:07:11,040 Speaker 1: all right, if they're buying crude oil, then we simply 139 00:07:11,480 --> 00:07:13,920 Speaker 1: go out and buy a futures contract on crude oil. 140 00:07:13,960 --> 00:07:16,480 Speaker 1: If they're shorting treasuries betting that rates are going to 141 00:07:16,560 --> 00:07:18,240 Speaker 1: go up, we'll go out in short treasuries. If they're 142 00:07:18,240 --> 00:07:20,080 Speaker 1: betting that the dollar is going to be strong against 143 00:07:20,120 --> 00:07:22,920 Speaker 1: the end, we'll we'll do the same trade. And so, 144 00:07:23,080 --> 00:07:24,520 Speaker 1: you know, so the whole idea of it is is 145 00:07:24,560 --> 00:07:27,200 Speaker 1: that you've got really smart guys who do this every 146 00:07:27,240 --> 00:07:30,000 Speaker 1: day with tons and tons of resources. We're just I mean, 147 00:07:30,040 --> 00:07:32,520 Speaker 1: we're almost like Ikea or something, you know, we're we're 148 00:07:32,560 --> 00:07:34,560 Speaker 1: just we're trying to copy what they do, but do 149 00:07:34,600 --> 00:07:37,880 Speaker 1: it cheaply and efficiently. And what specifically was it doing 150 00:07:38,240 --> 00:07:42,280 Speaker 1: this year? Was it short treasuries or what was the strategy? 151 00:07:42,400 --> 00:07:44,920 Speaker 1: So I mean so much to everyone's surprised. The biggest 152 00:07:44,960 --> 00:07:47,239 Speaker 1: gainer this year has actually been shorting the yen against 153 00:07:47,280 --> 00:07:49,760 Speaker 1: the dollar. And again for you know, when you talk 154 00:07:49,800 --> 00:07:51,960 Speaker 1: about the craziest things in the market, I think if 155 00:07:51,960 --> 00:07:54,720 Speaker 1: you'd ask FX strategists earlier this year, you know what, 156 00:07:55,360 --> 00:07:57,120 Speaker 1: where the end is at a hundred and fifteen, where 157 00:07:57,160 --> 00:07:59,240 Speaker 1: could it possibly go? You know, the guy who said 158 00:07:59,280 --> 00:08:01,120 Speaker 1: a hundred and twenty five would have been laughed out 159 00:08:01,120 --> 00:08:02,640 Speaker 1: of the room. And then low and behold, it almost 160 00:08:02,680 --> 00:08:05,000 Speaker 1: hit a hundred and forty. So the you know, the 161 00:08:05,000 --> 00:08:08,720 Speaker 1: funds got that position early and and wrote it. But 162 00:08:08,760 --> 00:08:11,440 Speaker 1: they also they were right and long in crude oil 163 00:08:11,480 --> 00:08:13,680 Speaker 1: at the right time. They were short treasuries when rad 164 00:08:13,760 --> 00:08:15,880 Speaker 1: started to go up. So it's really been it's been 165 00:08:16,040 --> 00:08:19,360 Speaker 1: three big principal trades that have delivered most of that performance. 166 00:08:20,200 --> 00:08:23,400 Speaker 1: That's fascinating. I was gonna ask you if trend following 167 00:08:23,560 --> 00:08:26,480 Speaker 1: is too simple, simplistic of a of an explanation for it, 168 00:08:26,520 --> 00:08:29,960 Speaker 1: but it sounds it sounds like not. But I'm I'm curious, 169 00:08:30,160 --> 00:08:32,840 Speaker 1: is it, you know, is it something that can be 170 00:08:32,880 --> 00:08:35,800 Speaker 1: systematic and sort of rules based or is there a 171 00:08:35,840 --> 00:08:38,880 Speaker 1: lot of uh, you know, just watching the tape and 172 00:08:38,880 --> 00:08:42,120 Speaker 1: and making sort of discretionary decisions about about what the 173 00:08:42,160 --> 00:08:45,800 Speaker 1: trends look like. So so I I irritate a lot 174 00:08:45,800 --> 00:08:48,400 Speaker 1: of people in the managerer space by basically saying, I 175 00:08:48,440 --> 00:08:50,760 Speaker 1: don't think it's that complicated, right to me, it's the 176 00:08:50,800 --> 00:08:53,440 Speaker 1: modern day version of that guy with that we all know, 177 00:08:53,520 --> 00:08:55,840 Speaker 1: with the candle chart who's telling you that something has 178 00:08:55,880 --> 00:08:58,320 Speaker 1: just broken through its moving average and it's gonna go keep, 179 00:08:58,400 --> 00:09:00,680 Speaker 1: you know, keep going up the you know what was 180 00:09:00,720 --> 00:09:04,160 Speaker 1: that guy saying? He was saying that that. You know, 181 00:09:04,240 --> 00:09:07,080 Speaker 1: people fall in love with stocks and they drive them higher, 182 00:09:07,160 --> 00:09:09,800 Speaker 1: They bail out of things, and you know, sort of 183 00:09:09,880 --> 00:09:12,200 Speaker 1: dump things at the same time. Sometimes the world changes 184 00:09:12,200 --> 00:09:16,080 Speaker 1: and they're very very slow to respond. What Manaiteucher's fund 185 00:09:16,120 --> 00:09:18,840 Speaker 1: does it's got a lot of human beings sitting around 186 00:09:19,280 --> 00:09:22,280 Speaker 1: with a lot of computers, and so it's not as 187 00:09:22,280 --> 00:09:25,160 Speaker 1: though somebody has created some computer and then you know, 188 00:09:25,160 --> 00:09:27,800 Speaker 1: like Tesla autopilot kind of set it to work. Rather, 189 00:09:27,960 --> 00:09:30,920 Speaker 1: it's guys trying to figure out and constantly tweaking and 190 00:09:31,160 --> 00:09:33,000 Speaker 1: changing the models and trying to figure out the right 191 00:09:33,000 --> 00:09:37,880 Speaker 1: parameters over time. So it's it's a systematic strategy in 192 00:09:37,920 --> 00:09:41,160 Speaker 1: that these guys are what they buy and sell every 193 00:09:41,240 --> 00:09:43,960 Speaker 1: day is riven by computers. But there's a very human 194 00:09:44,040 --> 00:09:46,800 Speaker 1: side of how people end up building the models, what 195 00:09:46,880 --> 00:09:49,040 Speaker 1: they like and what they don't like. And so I 196 00:09:49,080 --> 00:09:51,920 Speaker 1: think there's often this misunderstanding when people say it's quant based. 197 00:09:52,120 --> 00:09:55,040 Speaker 1: They think it's it's it's hell in in two thousand 198 00:09:55,120 --> 00:09:58,080 Speaker 1: and one with its own identity. It's not. They're just 199 00:09:58,120 --> 00:10:01,560 Speaker 1: expressions of human beings who happened to be quantity of nature. Yeah, 200 00:10:01,559 --> 00:10:03,800 Speaker 1: and is that true you think of the entire stay 201 00:10:03,920 --> 00:10:06,720 Speaker 1: ct A and Managed Futures universe, because I do. I 202 00:10:06,760 --> 00:10:09,120 Speaker 1: do think of it as more almost autopilot in a 203 00:10:09,160 --> 00:10:13,240 Speaker 1: lot of ways, But that's mistaken impression. It's it's autopilot 204 00:10:13,240 --> 00:10:15,120 Speaker 1: on a day to day basis. Right, So it's not 205 00:10:15,200 --> 00:10:17,640 Speaker 1: it's no one's looking at footnotes, no one's making big 206 00:10:17,679 --> 00:10:20,600 Speaker 1: macro calls that they think, you know, there's no macro 207 00:10:20,720 --> 00:10:24,560 Speaker 1: strategists involved. And really what they're doing is they're saying, Okay, 208 00:10:24,640 --> 00:10:27,560 Speaker 1: the you know, crude oil gold has been going down, 209 00:10:27,920 --> 00:10:30,240 Speaker 1: do we think it's going to keep going down? And 210 00:10:30,240 --> 00:10:32,640 Speaker 1: and every model will look at that question in a 211 00:10:32,679 --> 00:10:35,600 Speaker 1: slightly different way. And you know, I think I think 212 00:10:35,600 --> 00:10:39,240 Speaker 1: what people when when people use terms like trend following, 213 00:10:39,280 --> 00:10:41,559 Speaker 1: the problem is that that it almost sounds as simple 214 00:10:41,559 --> 00:10:44,320 Speaker 1: as equities, like if if we if we say, you know, 215 00:10:44,360 --> 00:10:48,400 Speaker 1: did equities do well tomorrow? No one in the corner says, well, 216 00:10:48,640 --> 00:10:50,040 Speaker 1: you know the type of I mean, you know, the 217 00:10:50,080 --> 00:10:53,000 Speaker 1: tie equity market went up, therefore equities went up. Well, right, 218 00:10:53,040 --> 00:10:57,600 Speaker 1: that's one small market out of many. Um. But in 219 00:10:57,600 --> 00:11:00,200 Speaker 1: in you know, in the trend following world, because the 220 00:11:00,240 --> 00:11:02,680 Speaker 1: models are so different, my model may be very different 221 00:11:02,679 --> 00:11:05,200 Speaker 1: than yours, and so we may end up with very 222 00:11:05,280 --> 00:11:07,240 Speaker 1: very different results. So it kind of it kind of 223 00:11:07,280 --> 00:11:10,720 Speaker 1: fools people into thinking that everybody does things the same way, 224 00:11:10,760 --> 00:11:13,959 Speaker 1: and they really don't. I was hoping you could also 225 00:11:14,000 --> 00:11:16,360 Speaker 1: talk about what trends you guys are looking at right now, 226 00:11:16,400 --> 00:11:20,040 Speaker 1: like what is the market showing your where potentially is 227 00:11:20,280 --> 00:11:23,160 Speaker 1: do you envision the e t F heading for the 228 00:11:23,160 --> 00:11:27,240 Speaker 1: remainder of the year. I mean, so I have no 229 00:11:27,280 --> 00:11:28,599 Speaker 1: idea where it's going to head for the remainder of 230 00:11:28,640 --> 00:11:31,200 Speaker 1: the year, right, because that's that's basically we'll see those 231 00:11:31,240 --> 00:11:33,960 Speaker 1: these hedge funds will change their positioning and then we 232 00:11:34,000 --> 00:11:36,719 Speaker 1: will follow along with what they're doing. Um. I think 233 00:11:36,760 --> 00:11:39,040 Speaker 1: you know the big change if you'd ask me at 234 00:11:39,040 --> 00:11:42,280 Speaker 1: the end of June and said if you could describe 235 00:11:42,320 --> 00:11:44,440 Speaker 1: the portfolio and one word, I would have said inflation. 236 00:11:45,360 --> 00:11:48,240 Speaker 1: You know it was it was a bet on rates 237 00:11:48,240 --> 00:11:51,719 Speaker 1: going up, for their equities going down, commodities going up, 238 00:11:52,080 --> 00:11:55,480 Speaker 1: and the dollar being strong versus other parts of the world. Um. 239 00:11:55,559 --> 00:11:58,400 Speaker 1: And and you know, underlying that was basically the view 240 00:11:58,480 --> 00:12:00,920 Speaker 1: that Powell and the Fed we're going to keep raising 241 00:12:00,960 --> 00:12:04,160 Speaker 1: raids aggressively and that was going to play out through 242 00:12:04,200 --> 00:12:06,640 Speaker 1: lots of different markets. If you if I had to 243 00:12:06,640 --> 00:12:09,320 Speaker 1: put a word on it today, I'd say recession. You know, 244 00:12:09,400 --> 00:12:14,320 Speaker 1: we've we've largely gotten out of those short treasury you know, 245 00:12:14,400 --> 00:12:17,320 Speaker 1: interest rates are going up forever bets we continue to 246 00:12:17,320 --> 00:12:19,319 Speaker 1: be short equities. We continue to believe the dollar is 247 00:12:19,360 --> 00:12:20,800 Speaker 1: going to be better because I think the view is 248 00:12:20,840 --> 00:12:23,440 Speaker 1: that if it gets bad in the US, my god, 249 00:12:23,480 --> 00:12:25,400 Speaker 1: how bad is it going to be in Europe or Japan? 250 00:12:25,720 --> 00:12:28,200 Speaker 1: And so you know that's we've we've seen a big 251 00:12:28,200 --> 00:12:30,840 Speaker 1: reduction in our exposure or long exposure to crude oil 252 00:12:30,920 --> 00:12:33,880 Speaker 1: for instance. Um So, so really what the models are 253 00:12:33,880 --> 00:12:36,760 Speaker 1: doing is almost interpreting what they're seeing in these private 254 00:12:36,920 --> 00:12:39,120 Speaker 1: price foods, and it gives us an interesting vantage point. 255 00:12:39,400 --> 00:12:42,000 Speaker 1: But I wouldn't say that it's predictive because we could 256 00:12:42,000 --> 00:12:44,520 Speaker 1: have a very different positioning and in three months, and 257 00:12:44,520 --> 00:12:46,520 Speaker 1: that's going to depend upon how people in the markets 258 00:12:46,679 --> 00:12:56,680 Speaker 1: change their views somethings. And if curious, what sort of 259 00:12:56,720 --> 00:12:59,760 Speaker 1: all the strategies are that can or or can't be 260 00:13:00,040 --> 00:13:04,640 Speaker 1: replicated in an ETF, especially because I'm fascinated with your background. 261 00:13:04,720 --> 00:13:08,319 Speaker 1: I know you worked at bow Past with Seth Klarman, 262 00:13:08,480 --> 00:13:13,040 Speaker 1: who's you know, traditionally considered one of, you know, sort 263 00:13:13,040 --> 00:13:15,240 Speaker 1: of the best bottoms up stock pickers, which to me 264 00:13:15,920 --> 00:13:18,880 Speaker 1: seems like it would be a very difficult thing, at 265 00:13:18,960 --> 00:13:21,280 Speaker 1: least at this point to replicate in an e t F. 266 00:13:21,520 --> 00:13:24,800 Speaker 1: And don't even get started on horse race picks because 267 00:13:24,840 --> 00:13:27,920 Speaker 1: he's killing it with those two with his thoroughbreds, won 268 00:13:28,559 --> 00:13:32,839 Speaker 1: the congratulationship. It's a lifelong dream. It's incredible for it. 269 00:13:33,320 --> 00:13:35,600 Speaker 1: So he picks stocks and he picks horse as well. 270 00:13:35,679 --> 00:13:38,160 Speaker 1: I I it's hard to replicate either, I think in 271 00:13:38,200 --> 00:13:41,640 Speaker 1: a in a in an ETF strategy. Yeah, so so 272 00:13:42,480 --> 00:13:44,360 Speaker 1: you're you're correct. Most things cannot be a lot of 273 00:13:44,360 --> 00:13:48,199 Speaker 1: things cannot be replicated. Um, the two strategies that are 274 00:13:48,280 --> 00:13:52,040 Speaker 1: easiest to replicate our managed futures and equity long short 275 00:13:52,920 --> 00:13:55,840 Speaker 1: And you know, in in homage to Seth, I think 276 00:13:55,840 --> 00:13:59,440 Speaker 1: one of the things that he drilled into me someone 277 00:13:59,520 --> 00:14:02,920 Speaker 1: years ago was, you know, don't do things just to 278 00:14:03,000 --> 00:14:07,600 Speaker 1: do things, And and the whole asset management business is 279 00:14:07,640 --> 00:14:12,800 Speaker 1: this manic just do stuff, you know, launch new products, 280 00:14:12,880 --> 00:14:16,680 Speaker 1: launch change what we're doing, etcetera, etcetera. And and you know, 281 00:14:16,720 --> 00:14:20,240 Speaker 1: we've only launched three strategies, three replication based strategies in 282 00:14:20,240 --> 00:14:23,480 Speaker 1: fifteen years because most don't work. And and and we we 283 00:14:23,520 --> 00:14:26,240 Speaker 1: won't launch them if they don't work, if we don't 284 00:14:26,240 --> 00:14:29,240 Speaker 1: think they're gonna work. So the you know, we would 285 00:14:29,240 --> 00:14:31,000 Speaker 1: never try to replicate bow Posts. We don't try to 286 00:14:31,000 --> 00:14:34,440 Speaker 1: replicate millennium. We don't try to replicate you know, small 287 00:14:34,520 --> 00:14:37,640 Speaker 1: pools of funds. But but you know, but what what 288 00:14:37,720 --> 00:14:41,360 Speaker 1: replication does? I think better than anybody else, and better 289 00:14:41,400 --> 00:14:45,320 Speaker 1: than anything else is the this category of hedge funds 290 00:14:45,320 --> 00:14:46,960 Speaker 1: is up five over the next three years, and we're 291 00:14:47,040 --> 00:14:50,480 Speaker 1: up seven, it's up nine, we're up eleven, it's up three, 292 00:14:50,520 --> 00:14:53,760 Speaker 1: we're up five. And it does it consistently. And and 293 00:14:53,880 --> 00:14:59,800 Speaker 1: that index plus ethos of it comes from replicating lots 294 00:14:59,840 --> 00:15:03,560 Speaker 1: of funds. So you get diversification, just like the SMP 295 00:15:03,680 --> 00:15:07,680 Speaker 1: five is more diversified than any of the stocks in it. 296 00:15:08,480 --> 00:15:10,800 Speaker 1: But then you outperform in the old fashioned way, which 297 00:15:10,840 --> 00:15:13,560 Speaker 1: is by by by charging less, by cutting out fees 298 00:15:13,600 --> 00:15:18,119 Speaker 1: and charging less. And and that is a unique solution 299 00:15:18,320 --> 00:15:23,600 Speaker 1: for the wealth management and are a world, because they 300 00:15:23,720 --> 00:15:27,080 Speaker 1: build model portfolios and when they decide that they want 301 00:15:27,120 --> 00:15:30,040 Speaker 1: to invest in managed futures, their measure of success is 302 00:15:30,200 --> 00:15:33,720 Speaker 1: I made an allocation in five years the space up 303 00:15:34,520 --> 00:15:37,360 Speaker 1: let's say eight percent a year, and mike pick is 304 00:15:37,480 --> 00:15:40,880 Speaker 1: up ten and it never materially underperformed. There are no 305 00:15:40,960 --> 00:15:43,040 Speaker 1: other products in the liquid alts world that do that well. 306 00:15:43,400 --> 00:15:44,800 Speaker 1: And so that's why we did it in the t 307 00:15:44,960 --> 00:15:49,200 Speaker 1: F because we're trying to change the the how a 308 00:15:49,320 --> 00:15:51,600 Speaker 1: large part of the E t F world looks at 309 00:15:51,640 --> 00:15:54,520 Speaker 1: these kinds of strategies. Well, how do you want people 310 00:15:54,560 --> 00:15:56,720 Speaker 1: to be looking at the strategies, Because that's a really 311 00:15:56,800 --> 00:16:00,240 Speaker 1: interesting point about just having three e t F because 312 00:16:00,240 --> 00:16:03,600 Speaker 1: I think you recently said you wanted to be the 313 00:16:03,720 --> 00:16:06,840 Speaker 1: vanguard of of hedge funds. So maybe you can talk 314 00:16:06,880 --> 00:16:08,640 Speaker 1: a little bit more about that and what you mean 315 00:16:08,680 --> 00:16:11,880 Speaker 1: by that. So, so we want people to look at 316 00:16:11,920 --> 00:16:16,280 Speaker 1: our strategies and say, I can make this an allocation 317 00:16:16,680 --> 00:16:19,640 Speaker 1: as part of as part of my model portfolio. Right, 318 00:16:19,680 --> 00:16:22,200 Speaker 1: so I can I can get exposure to manage futures 319 00:16:22,200 --> 00:16:23,960 Speaker 1: with a single et F. I can get exposure to 320 00:16:23,960 --> 00:16:27,240 Speaker 1: equity longshore with a single et F. And then there's 321 00:16:27,280 --> 00:16:30,840 Speaker 1: no noise over the next five years because because what 322 00:16:30,920 --> 00:16:33,720 Speaker 1: happens in the liquid all the worlds as they say, Um, 323 00:16:34,000 --> 00:16:35,760 Speaker 1: I just found some great guy. He just had his 324 00:16:35,840 --> 00:16:39,160 Speaker 1: killer year last year, and and you know we want 325 00:16:39,160 --> 00:16:40,840 Speaker 1: to be invested in Mannag Tuchers. We're going to give 326 00:16:40,880 --> 00:16:43,120 Speaker 1: it to him. And then the next year, the guy's 327 00:16:43,240 --> 00:16:47,000 Speaker 1: underperformed everybody else by fifteen and so if you're an 328 00:16:47,000 --> 00:16:49,880 Speaker 1: advisor or you're building a model portfolio, that's a nightmare 329 00:16:49,920 --> 00:16:52,760 Speaker 1: for you. You've got this five percent allocation and you're 330 00:16:52,760 --> 00:16:55,000 Speaker 1: sitting across from your clients and saying, I thought, you 331 00:16:55,480 --> 00:16:57,240 Speaker 1: guys told me this guy who was the best guy 332 00:16:57,280 --> 00:16:59,080 Speaker 1: in the space, and now he's the worst guy in 333 00:16:59,080 --> 00:17:04,560 Speaker 1: the space, and that that hamster wheel of picking a 334 00:17:04,600 --> 00:17:06,639 Speaker 1: fund and then replacing it, picking a new fund and 335 00:17:06,680 --> 00:17:12,119 Speaker 1: replacing it has been incredibly costly. So in the morning 336 00:17:12,119 --> 00:17:15,760 Speaker 1: started a great study that chasing hot dots in this 337 00:17:15,880 --> 00:17:20,680 Speaker 1: space cost allocators more than of the dollars they would 338 00:17:20,680 --> 00:17:24,000 Speaker 1: have made bye bye by doing nothing. And so what 339 00:17:24,040 --> 00:17:27,240 Speaker 1: we want is people to use our products as the 340 00:17:27,400 --> 00:17:30,600 Speaker 1: sleep at night solution. We we we make it as 341 00:17:30,640 --> 00:17:34,320 Speaker 1: a strategic allocation, and then it just does its job 342 00:17:34,480 --> 00:17:38,399 Speaker 1: with no fanfare, and five years later we're happy. It's funny, Andrew, 343 00:17:38,600 --> 00:17:41,199 Speaker 1: you were choking before we started taping that you've been 344 00:17:41,200 --> 00:17:43,920 Speaker 1: known and dropped some grenades. Some quote grenades. I think 345 00:17:44,080 --> 00:17:49,360 Speaker 1: it was your your comment, uh and from your notes here, 346 00:17:49,520 --> 00:17:51,280 Speaker 1: this one's kind of a quot grenade. I gotta say 347 00:17:51,280 --> 00:17:54,000 Speaker 1: the liquid alts world is an embarrassment. Is that? Is 348 00:17:54,040 --> 00:17:56,520 Speaker 1: that what you mean basically what you just explained by 349 00:17:56,560 --> 00:18:01,760 Speaker 1: that pull pulling yet another pin on yet another quote. Quind, Yeah, look, 350 00:18:01,800 --> 00:18:05,159 Speaker 1: I mean the liquid alts world. I mean it. To me, 351 00:18:05,480 --> 00:18:10,000 Speaker 1: it harkens to Einstein's alleged definition of insanity, which people 352 00:18:10,119 --> 00:18:11,919 Speaker 1: keep doing the same thing again and again and expecting 353 00:18:11,920 --> 00:18:15,800 Speaker 1: a different result. This is a space that, give or take, 354 00:18:15,880 --> 00:18:18,320 Speaker 1: let's say it's had four billion dollars in it for 355 00:18:18,359 --> 00:18:24,200 Speaker 1: the past decade, it's made one point six percent per annum. Okay, 356 00:18:24,640 --> 00:18:27,680 Speaker 1: the fees on it are more than that, right, So 357 00:18:27,680 --> 00:18:31,080 Speaker 1: so just just think about this, right, You've got You've 358 00:18:31,119 --> 00:18:33,600 Speaker 1: got tons and tons and tons of really smart people 359 00:18:33,720 --> 00:18:36,800 Speaker 1: who launched tons and tons of products that we're supposed 360 00:18:36,840 --> 00:18:40,520 Speaker 1: to do six seven eight percent per annum, and and 361 00:18:40,520 --> 00:18:44,320 Speaker 1: and and and weather the storm. I my guess is 362 00:18:44,520 --> 00:18:49,000 Speaker 1: that there's been seventy billion dollars of fees that's been 363 00:18:49,040 --> 00:18:52,360 Speaker 1: paid paid to people over the past decade to generate 364 00:18:52,400 --> 00:18:57,520 Speaker 1: that one point six percent perantum, and yet people keep 365 00:18:57,600 --> 00:19:01,320 Speaker 1: doing roughly the same thing set at the time. So 366 00:19:01,520 --> 00:19:03,200 Speaker 1: you know, when I first as a hedge fund guy, 367 00:19:03,280 --> 00:19:05,240 Speaker 1: when I first looked at the space about ten years ago, 368 00:19:05,280 --> 00:19:08,160 Speaker 1: I thought it was insane, and I really I thought 369 00:19:08,359 --> 00:19:12,320 Speaker 1: it was like the products have have no demonstrable diversification value. 370 00:19:12,840 --> 00:19:16,520 Speaker 1: But I've have developed a more nuanced view over time. 371 00:19:16,520 --> 00:19:18,560 Speaker 1: There are reasons people do it. There are all sorts 372 00:19:18,560 --> 00:19:20,720 Speaker 1: of structural issues in the industry. But but look, what 373 00:19:20,760 --> 00:19:23,240 Speaker 1: we're trying to do is is really talk to people 374 00:19:23,280 --> 00:19:27,119 Speaker 1: who are making the allocation decisions from from their perspective. 375 00:19:27,480 --> 00:19:29,240 Speaker 1: You know what, what do we think of their real issues? 376 00:19:29,240 --> 00:19:31,040 Speaker 1: What are they trying to solve, and how do we 377 00:19:31,119 --> 00:19:33,040 Speaker 1: help them to solve them? Because that's how we built 378 00:19:33,040 --> 00:19:36,240 Speaker 1: all of our products. Yeah, I imagine when it's a 379 00:19:36,240 --> 00:19:41,359 Speaker 1: lowly paid pension fund manager you're hit with, Well, the 380 00:19:41,400 --> 00:19:43,639 Speaker 1: manager of such and such a hedge fund took me 381 00:19:43,680 --> 00:19:45,560 Speaker 1: on his private jet to the to the Super Bowl 382 00:19:45,640 --> 00:19:49,800 Speaker 1: last year. Well, then that guy is probably in jail 383 00:19:49,840 --> 00:19:53,080 Speaker 1: today if you did that. Yeah. I mean it's it's 384 00:19:53,119 --> 00:19:56,239 Speaker 1: so our products really don't have not so far had 385 00:19:56,240 --> 00:19:59,080 Speaker 1: a great appeal in the institutional space because because there 386 00:19:59,200 --> 00:20:01,840 Speaker 1: there's always a I there. You know, there's somebody whose 387 00:20:01,920 --> 00:20:05,760 Speaker 1: job it is to pick hetch funds. And you know, 388 00:20:06,200 --> 00:20:08,960 Speaker 1: I thought this product fifteen years ago would be a 389 00:20:08,960 --> 00:20:11,879 Speaker 1: great answer for those pension plants, right, they want low fees, 390 00:20:11,880 --> 00:20:14,520 Speaker 1: they want liquidity. The problem is they have a consultant 391 00:20:14,560 --> 00:20:18,040 Speaker 1: who standing there, who buy and large Their job is 392 00:20:18,040 --> 00:20:20,520 Speaker 1: to pick hetge funds. And what they want to be 393 00:20:20,560 --> 00:20:22,280 Speaker 1: able to say is when when a client says, why 394 00:20:22,320 --> 00:20:24,199 Speaker 1: am I paying three or four hundred basis points a 395 00:20:24,280 --> 00:20:27,560 Speaker 1: year for something that's making less than that? And they 396 00:20:27,560 --> 00:20:29,840 Speaker 1: want to be able to say, well, if we if 397 00:20:29,880 --> 00:20:34,639 Speaker 1: there was a cheaper option, you know, a more liquid option, 398 00:20:34,720 --> 00:20:35,879 Speaker 1: you know, we would bring it to you. There just 399 00:20:36,000 --> 00:20:40,480 Speaker 1: isn't and and so so you take DPMF Right, it does. 400 00:20:40,840 --> 00:20:43,639 Speaker 1: In the first three years, it did five basis points 401 00:20:43,640 --> 00:20:47,720 Speaker 1: better than these twenty flagship edge funds with probably a 402 00:20:47,800 --> 00:20:53,080 Speaker 1: quarter of the fetes. Why would every pension plan fiduciary 403 00:20:53,200 --> 00:20:56,080 Speaker 1: not put that at the top of their list? And 404 00:20:56,200 --> 00:20:58,680 Speaker 1: I hope they do, But I've been I faced these 405 00:20:58,720 --> 00:21:02,400 Speaker 1: these biting headwinds for years from people where it's might 406 00:21:02,440 --> 00:21:05,880 Speaker 1: be great for their clients but not great for their 407 00:21:05,960 --> 00:21:09,359 Speaker 1: jobs and their careers. Well, and I imagine the answer, 408 00:21:09,520 --> 00:21:12,040 Speaker 1: you know, why am I paying this fee for this performance? 409 00:21:12,280 --> 00:21:15,960 Speaker 1: Is something about while you're like this, when you have 410 00:21:16,000 --> 00:21:20,080 Speaker 1: a bear market in equities, hedge funds are actually doing 411 00:21:20,119 --> 00:21:22,120 Speaker 1: a lot better than that. Your et F is doing 412 00:21:22,119 --> 00:21:25,080 Speaker 1: a lot better than that. And that's sort of you know, 413 00:21:25,200 --> 00:21:26,920 Speaker 1: the way I think of hedge funds is that they're 414 00:21:27,000 --> 00:21:29,560 Speaker 1: sort of almost like your insurance policy in a in 415 00:21:29,600 --> 00:21:31,800 Speaker 1: a big broad portfolio like that, when you know when 416 00:21:31,800 --> 00:21:36,280 Speaker 1: you're regular equity and even bond portfolios in the crapper 417 00:21:36,359 --> 00:21:39,280 Speaker 1: this year, while a good hedge fund will at least 418 00:21:39,320 --> 00:21:42,760 Speaker 1: get you know, break even and with any luck, performed better, 419 00:21:43,440 --> 00:21:45,800 Speaker 1: is there is that Is that the best you can 420 00:21:45,840 --> 00:21:49,080 Speaker 1: ask for with something like this? Or is there the 421 00:21:49,080 --> 00:21:52,680 Speaker 1: potential in your mind that even if you know smps 422 00:21:52,760 --> 00:21:57,840 Speaker 1: up next year, this thing could be up more. No, everything, 423 00:21:57,960 --> 00:21:59,920 Speaker 1: every problem we have is meant to be a diversifier 424 00:22:00,119 --> 00:22:03,520 Speaker 1: to sixty forty portfolios, um and and during the two 425 00:22:03,520 --> 00:22:06,159 Speaker 1: thousand tents that was kind of allowsy position to be 426 00:22:06,200 --> 00:22:11,600 Speaker 1: in because sixty portfolios, I mean, everybody who procrastinated about 427 00:22:11,640 --> 00:22:14,920 Speaker 1: diversification in sixty forty portfolios in the two thousand tens 428 00:22:14,920 --> 00:22:17,720 Speaker 1: and one, and then the next year they won again. 429 00:22:18,440 --> 00:22:20,080 Speaker 1: Year after that they won again. I mean it was 430 00:22:20,680 --> 00:22:23,600 Speaker 1: the SMP was up from the from the lows. In 431 00:22:24,160 --> 00:22:27,160 Speaker 1: two thousand nine, the SMP was up sixtent a year 432 00:22:28,119 --> 00:22:30,800 Speaker 1: until even until the past month or so. I mean, 433 00:22:30,960 --> 00:22:33,320 Speaker 1: who in the world would have said the equity risk 434 00:22:33,359 --> 00:22:37,200 Speaker 1: premium would be fift basis points over twelve years UM. 435 00:22:37,400 --> 00:22:40,280 Speaker 1: So it's always they're always viewed in the context that 436 00:22:40,320 --> 00:22:43,080 Speaker 1: managed futures is. And I talk a lot about this. 437 00:22:43,119 --> 00:22:45,840 Speaker 1: Managed teachers as a strategy has more diversification bang for 438 00:22:45,880 --> 00:22:49,000 Speaker 1: the buck than any other hedge fund strategy. It's it 439 00:22:49,359 --> 00:22:51,480 Speaker 1: marches to the beat of its own drum. During normal times, 440 00:22:51,520 --> 00:22:55,119 Speaker 1: it might make mid single digit returns, nothing spectacular, But 441 00:22:55,160 --> 00:22:56,520 Speaker 1: then you get a year like this when it's up, 442 00:22:57,119 --> 00:22:59,879 Speaker 1: whateverything's down. Same thing happened in two thousand eight, same 443 00:23:00,040 --> 00:23:02,480 Speaker 1: happened during the dot com crisis. So you have this 444 00:23:02,680 --> 00:23:06,280 Speaker 1: very very unusual strategy where it's almost like an insurance 445 00:23:06,320 --> 00:23:10,080 Speaker 1: policy that pays you while you're waiting. The problem is 446 00:23:10,600 --> 00:23:12,720 Speaker 1: that that there are these two big land mines in 447 00:23:12,720 --> 00:23:15,400 Speaker 1: this space. One land mine is there is no way 448 00:23:15,440 --> 00:23:18,639 Speaker 1: to get exposure to the space. Instead, you have to 449 00:23:18,680 --> 00:23:21,239 Speaker 1: pick this guy or that guy or that guy. And 450 00:23:21,280 --> 00:23:23,879 Speaker 1: that's like saying I want to exposure to emerging market 451 00:23:23,880 --> 00:23:26,679 Speaker 1: stocks and then picking one stock. Right, it's going to 452 00:23:26,840 --> 00:23:28,920 Speaker 1: be a problem for you in the next few years. 453 00:23:29,200 --> 00:23:31,119 Speaker 1: And the other thing is that fees and expenses. So 454 00:23:31,320 --> 00:23:33,280 Speaker 1: you know, first we got into the space in two 455 00:23:33,320 --> 00:23:35,480 Speaker 1: thousand fifteen. Over the first four or five years, clients 456 00:23:35,480 --> 00:23:38,480 Speaker 1: made zero. And people would say it was a terrible 457 00:23:38,520 --> 00:23:40,800 Speaker 1: period of time for for the space, and I said, 458 00:23:41,240 --> 00:23:44,600 Speaker 1: actually no, everyone else was fine. But you like, I mean, 459 00:23:44,800 --> 00:23:46,879 Speaker 1: there are plenty of trading. Mean, the guys who were 460 00:23:46,920 --> 00:23:48,560 Speaker 1: counter party has made a lot of money, the hedge 461 00:23:48,560 --> 00:23:50,560 Speaker 1: ones made a lot of money. Everybody made money, but 462 00:23:50,600 --> 00:23:52,639 Speaker 1: a hundred percent of it went to everybody else. You 463 00:23:52,680 --> 00:23:54,360 Speaker 1: took all the risk and got none of the rewards. 464 00:23:55,080 --> 00:23:56,920 Speaker 1: And so you know, back to the point about about 465 00:23:56,920 --> 00:23:59,399 Speaker 1: I mean the philosophical similarities with van Guard and what 466 00:23:59,440 --> 00:24:01,679 Speaker 1: they tried to do was basically saying, look, there's this 467 00:24:02,320 --> 00:24:06,040 Speaker 1: there's this crazy industry structure problem, and and how do 468 00:24:06,119 --> 00:24:08,280 Speaker 1: we solve it in the most simple and straightforward an 469 00:24:08,280 --> 00:24:11,080 Speaker 1: elegant way. And that that that produced the index business, 470 00:24:11,600 --> 00:24:14,399 Speaker 1: and it took and it faced decades of resistance, and 471 00:24:14,400 --> 00:24:16,680 Speaker 1: and you know, when I've had people say, don't worry, 472 00:24:16,680 --> 00:24:18,640 Speaker 1: you know, your third decade doing this will be great, 473 00:24:18,680 --> 00:24:23,840 Speaker 1: I'm like, that's not really comforting we can we have 474 00:24:23,880 --> 00:24:26,840 Speaker 1: a few more wins in decade number two. Bocal is 475 00:24:26,840 --> 00:24:29,880 Speaker 1: a little younger when he started Van Guard. I guess catch, 476 00:24:29,920 --> 00:24:34,240 Speaker 1: I'm catching up backround. But Andrew, you were just talking 477 00:24:34,240 --> 00:24:38,120 Speaker 1: about how institutions haven't really warmed to your products yet. 478 00:24:38,160 --> 00:24:41,959 Speaker 1: So I'm just wondering who who your target audience is 479 00:24:42,000 --> 00:24:44,359 Speaker 1: and who actually has been buying the E T F 480 00:24:44,400 --> 00:24:46,680 Speaker 1: s where, whether it's the retail crowd or who has 481 00:24:46,720 --> 00:24:49,600 Speaker 1: been Yeah, so so our our audience so far has 482 00:24:49,600 --> 00:24:52,239 Speaker 1: been our right and so and I have it has 483 00:24:52,280 --> 00:24:56,639 Speaker 1: been a great um pleasure and opportunity to get to 484 00:24:56,640 --> 00:24:59,600 Speaker 1: know these guys well over the past several years. Um. 485 00:24:59,640 --> 00:25:02,560 Speaker 1: You know, there's this you talk to an institutional consulting pernment, 486 00:25:02,560 --> 00:25:04,639 Speaker 1: they feel like what they do is somehow superior and 487 00:25:04,720 --> 00:25:07,399 Speaker 1: more sophisticated than what you know, an r A A 488 00:25:07,520 --> 00:25:10,879 Speaker 1: who's managing four million dollars is doing. I look at 489 00:25:10,920 --> 00:25:13,040 Speaker 1: it completely the opposite way. The guy who's running the 490 00:25:13,160 --> 00:25:15,400 Speaker 1: r A he's got a business to run. He's an entrepreneur. 491 00:25:15,640 --> 00:25:18,320 Speaker 1: He is dealing with all of the I've been an 492 00:25:18,400 --> 00:25:21,200 Speaker 1: entrepreneur for closer twenty five years, and you're dealing with 493 00:25:21,240 --> 00:25:24,119 Speaker 1: all these different things every day, and and and you 494 00:25:24,200 --> 00:25:26,399 Speaker 1: have to make calls and and if you make the 495 00:25:26,440 --> 00:25:29,160 Speaker 1: wrong call, you you you end up with with all 496 00:25:29,200 --> 00:25:32,000 Speaker 1: sorts of of of issues and problems in your business 497 00:25:32,000 --> 00:25:34,040 Speaker 1: that you then have to deal with a lot of 498 00:25:34,119 --> 00:25:36,160 Speaker 1: you know, the consulting and other businesses tend to be 499 00:25:36,359 --> 00:25:40,119 Speaker 1: they're kind of insulated from from the ramifications of of 500 00:25:40,160 --> 00:25:42,679 Speaker 1: their decision making. So the people who bought it have 501 00:25:42,760 --> 00:25:46,600 Speaker 1: really said have really it's been conversations about about how 502 00:25:46,600 --> 00:25:49,919 Speaker 1: this solves problems for them. You know, they want to diversify, 503 00:25:50,000 --> 00:25:52,120 Speaker 1: they want to be able to to to have things 504 00:25:52,160 --> 00:25:56,200 Speaker 1: outside of sixty forty portfolios. But but it's it's working 505 00:25:56,240 --> 00:25:58,320 Speaker 1: with them to articulate what it is they're looking for. 506 00:25:58,480 --> 00:26:00,640 Speaker 1: And when you get through it all, what everybody's trying 507 00:26:00,640 --> 00:26:03,560 Speaker 1: to do is with an asset class bucket, it's index plus, 508 00:26:04,800 --> 00:26:08,439 Speaker 1: it's it's it's do as well as the category, do 509 00:26:08,480 --> 00:26:10,359 Speaker 1: a little bit better than the category over time, and 510 00:26:10,400 --> 00:26:13,800 Speaker 1: do it consistently. It's not as exciting as picking the 511 00:26:13,840 --> 00:26:19,880 Speaker 1: guy who just had a banner year, but you don't 512 00:26:19,880 --> 00:26:23,800 Speaker 1: get the hangover when the guy crashes. And and that 513 00:26:23,840 --> 00:26:27,080 Speaker 1: then means that as entrepreneurs as businessmen, they can spend 514 00:26:27,080 --> 00:26:30,000 Speaker 1: more time talking to their clients, they can get they 515 00:26:30,040 --> 00:26:32,920 Speaker 1: can bring in new clients, they can think more strategically 516 00:26:32,920 --> 00:26:36,000 Speaker 1: about their businesses. So it's been it's been very symbiotic 517 00:26:36,040 --> 00:26:37,440 Speaker 1: for us, and I think where it goes from here 518 00:26:37,440 --> 00:26:39,280 Speaker 1: as we continue to make a lot of traction of 519 00:26:39,320 --> 00:26:41,200 Speaker 1: that market. There are thousands and thousers of guys who 520 00:26:41,240 --> 00:26:43,000 Speaker 1: do this, you know, And I spent a lot of 521 00:26:43,000 --> 00:26:47,040 Speaker 1: time talking about this point and what about the typical 522 00:26:47,080 --> 00:26:51,560 Speaker 1: retail investor in the retail Investor cohort, because I know 523 00:26:51,640 --> 00:26:55,520 Speaker 1: we have this very vague category within the e t 524 00:26:55,640 --> 00:26:59,200 Speaker 1: F space called complex ETFs where we don't really know 525 00:26:59,280 --> 00:27:01,959 Speaker 1: how to define a define it. But but possibly your 526 00:27:02,000 --> 00:27:03,879 Speaker 1: e t F would fall under that category. And I 527 00:27:03,920 --> 00:27:07,720 Speaker 1: know regulators have been a bit outspoken in recent months 528 00:27:07,760 --> 00:27:12,080 Speaker 1: about you know, maybe retail investors having to be cautious 529 00:27:12,160 --> 00:27:14,760 Speaker 1: investing in their money in some of these products. So 530 00:27:14,800 --> 00:27:17,639 Speaker 1: how are you thinking about that? So I think so 531 00:27:18,720 --> 00:27:20,720 Speaker 1: I feel like our audience and really the only people 532 00:27:20,720 --> 00:27:24,200 Speaker 1: that I talked to professional investors who have may have 533 00:27:24,800 --> 00:27:29,480 Speaker 1: thousands of of retail clients. But but I'm dealing with 534 00:27:30,160 --> 00:27:32,520 Speaker 1: with with pros. So in terms of the like. I hope, 535 00:27:32,600 --> 00:27:34,720 Speaker 1: I hope the regulators get it right in terms of 536 00:27:34,960 --> 00:27:39,280 Speaker 1: the complex ets, because we trade futureist contracts, but we're 537 00:27:39,320 --> 00:27:43,720 Speaker 1: not you know, a three x leveraged fund that that 538 00:27:43,920 --> 00:27:46,879 Speaker 1: that that can blow overnight. Um, it's designed. These are 539 00:27:46,920 --> 00:27:50,000 Speaker 1: designed to be you know, stable, predictable, long term allocations, 540 00:27:50,640 --> 00:27:52,680 Speaker 1: you know. I think I think the architecture of the 541 00:27:52,760 --> 00:27:56,600 Speaker 1: e t F world is interesting in that most of 542 00:27:56,760 --> 00:27:59,639 Speaker 1: the capital in the e t F world is model portfolios, 543 00:28:00,320 --> 00:28:03,919 Speaker 1: anything from the blindingly simple sixty forty portfolio you can 544 00:28:03,960 --> 00:28:07,040 Speaker 1: get from for free from Vanguard to much more complicated things. 545 00:28:07,320 --> 00:28:09,280 Speaker 1: And then there is also another part of the industry 546 00:28:09,320 --> 00:28:11,800 Speaker 1: that I would call the gun slingers. You know, these 547 00:28:11,840 --> 00:28:14,000 Speaker 1: are the people who are who talked about social media 548 00:28:14,040 --> 00:28:17,040 Speaker 1: in the beginning, you know, who are emphatic and loud 549 00:28:17,200 --> 00:28:19,800 Speaker 1: about arc in the same way that they're emphatic and 550 00:28:19,840 --> 00:28:22,240 Speaker 1: loud about crypto, and they're and they're going to buy 551 00:28:22,359 --> 00:28:24,880 Speaker 1: this trend and do that. I call them the gun slingers. 552 00:28:25,520 --> 00:28:27,400 Speaker 1: And I don't we don't have anything to do with them, 553 00:28:28,160 --> 00:28:30,760 Speaker 1: right if if you're look, I don't know whether our 554 00:28:30,840 --> 00:28:32,560 Speaker 1: fund is going to do well in the next month. 555 00:28:32,920 --> 00:28:36,240 Speaker 1: Or not right. Nobody knows that. I think we will 556 00:28:36,280 --> 00:28:38,200 Speaker 1: do well over the next five years or ten years, 557 00:28:39,000 --> 00:28:41,080 Speaker 1: and so I need people who think with that time 558 00:28:41,160 --> 00:28:43,320 Speaker 1: horizon and a gun slinger who's thinking about how do 559 00:28:43,440 --> 00:28:46,520 Speaker 1: I day trade this E t F or short arc 560 00:28:46,600 --> 00:28:49,320 Speaker 1: here to that that's let's let's those are like those 561 00:28:49,360 --> 00:28:52,000 Speaker 1: are like the you know, they're they're just not relevant 562 00:28:52,000 --> 00:28:54,800 Speaker 1: to us. We're we're talking about I mean, man, this 563 00:28:54,920 --> 00:28:57,120 Speaker 1: is my cisistic I just throughout the other day. Is 564 00:28:57,160 --> 00:28:59,400 Speaker 1: that managed futures et F s right, so many tuchers 565 00:28:59,400 --> 00:29:02,760 Speaker 1: is one of the most valuable hedgehune strategies for diversification 566 00:29:02,800 --> 00:29:07,200 Speaker 1: purposes out of the overall et F world. It's between 567 00:29:07,320 --> 00:29:13,840 Speaker 1: point oh one and point oh two of assets and 568 00:29:14,080 --> 00:29:15,720 Speaker 1: and and But a lot of that comes back down 569 00:29:15,760 --> 00:29:19,400 Speaker 1: to an education issue. Guys who build these kinds of products, 570 00:29:19,440 --> 00:29:21,960 Speaker 1: they talk in their own language. I've been in this 571 00:29:22,040 --> 00:29:24,160 Speaker 1: business for a long time. I'm not a quant by background. 572 00:29:24,320 --> 00:29:27,480 Speaker 1: I don't understand what they're talking about, right, And so, 573 00:29:27,840 --> 00:29:29,760 Speaker 1: so what we've got to do as a business, if 574 00:29:29,760 --> 00:29:31,840 Speaker 1: we're going to bring more people into the tent and 575 00:29:31,960 --> 00:29:34,160 Speaker 1: get that to one to two percent, we've got to 576 00:29:34,280 --> 00:29:36,960 Speaker 1: change the language and how we talk about it, and 577 00:29:37,120 --> 00:29:39,200 Speaker 1: and I am trying to you know, when I'm not 578 00:29:39,320 --> 00:29:42,320 Speaker 1: tossing quote grenades, I am trying to come up with 579 00:29:42,360 --> 00:29:44,840 Speaker 1: a language to talk about this that resonates and and 580 00:29:44,960 --> 00:29:47,120 Speaker 1: a lot of it is is feeding off my conversations 581 00:29:47,160 --> 00:29:49,480 Speaker 1: with guys who do buy into it and what we're doing. 582 00:29:50,240 --> 00:29:53,000 Speaker 1: But we've got to get a lot better at at 583 00:29:53,080 --> 00:29:56,320 Speaker 1: articulating the benefits and how and what people can't expect 584 00:29:56,360 --> 00:29:58,520 Speaker 1: and how they can then turn communicated to their clients. 585 00:29:59,400 --> 00:30:01,760 Speaker 1: And hopefully we'll have this conversation in two years and 586 00:30:01,840 --> 00:30:18,200 Speaker 1: we can talk about progress on that left. You know, 587 00:30:18,280 --> 00:30:22,480 Speaker 1: the universe of futures products is so large, right, you know, 588 00:30:22,800 --> 00:30:26,280 Speaker 1: I'm wondering if there's any uh that you just would 589 00:30:26,280 --> 00:30:29,960 Speaker 1: steer completely away from, you know, bitcoin futures or lean 590 00:30:30,040 --> 00:30:32,800 Speaker 1: hog futures, you know, is are you pretty much open 591 00:30:32,840 --> 00:30:37,320 Speaker 1: to anything? So it's it's it's a really interesting question. 592 00:30:37,360 --> 00:30:41,160 Speaker 1: So we actually only trade about ten core futures contracts 593 00:30:41,640 --> 00:30:45,280 Speaker 1: and so so we have a three word motto that 594 00:30:45,400 --> 00:30:48,840 Speaker 1: relates source strategies, which is simple as better Right, it's 595 00:30:48,920 --> 00:30:51,080 Speaker 1: it's and that is something that makes people in who 596 00:30:51,160 --> 00:30:54,280 Speaker 1: market hedge funds their heads explode, right because they they 597 00:30:54,720 --> 00:30:57,560 Speaker 1: their whole thing is this is incredibly complicated, You'll never 598 00:30:57,720 --> 00:30:59,800 Speaker 1: understand it. But therefore you should pay us at everybody 599 00:30:59,800 --> 00:31:02,560 Speaker 1: else lot of money to give you access to this magical, wonderful, 600 00:31:02,760 --> 00:31:05,800 Speaker 1: you know, opportunity. I think people who've been inside the 601 00:31:05,840 --> 00:31:08,160 Speaker 1: industry just don't find it all that mysterious and magical. 602 00:31:08,240 --> 00:31:10,320 Speaker 1: I look there there, and there are plenty of people 603 00:31:10,360 --> 00:31:12,000 Speaker 1: who do things in this industry that I think are 604 00:31:12,160 --> 00:31:15,560 Speaker 1: are magical. Like what what Ken Griffin has been able 605 00:31:15,600 --> 00:31:17,640 Speaker 1: to do? What is the anglinger has been able to do? Um? 606 00:31:17,840 --> 00:31:19,720 Speaker 1: You know, Stan Druck and Miller. I think anytime that 607 00:31:19,760 --> 00:31:23,120 Speaker 1: guy says anything, just never take the other side because 608 00:31:23,120 --> 00:31:26,760 Speaker 1: it's investment suicide. Right. The guys just unbelievably good. But 609 00:31:27,280 --> 00:31:31,440 Speaker 1: but but by and large, um, the the so those tenders, 610 00:31:31,520 --> 00:31:35,560 Speaker 1: So I'm guessing those ten or the major equity. I mean, 611 00:31:36,720 --> 00:31:38,480 Speaker 1: we we care if coude oil goes up and down, 612 00:31:38,560 --> 00:31:41,040 Speaker 1: not whether pork bellies goes up or down. You know, 613 00:31:41,320 --> 00:31:43,960 Speaker 1: is gold going up or down? Is is is the 614 00:31:44,040 --> 00:31:47,120 Speaker 1: tenure treasury going up or down? And and and the 615 00:31:47,200 --> 00:31:49,200 Speaker 1: reason is it's these are the deepest and most liquid 616 00:31:49,240 --> 00:31:51,840 Speaker 1: and efficient markets, and I promise you there will never 617 00:31:51,920 --> 00:31:54,400 Speaker 1: be a year in the next five years where somebody 618 00:31:54,400 --> 00:31:56,760 Speaker 1: at the Financial Times or Wall Street General says, uh, 619 00:31:56,920 --> 00:31:59,959 Speaker 1: you know, these twenty largest managed tutors hedge funds made 620 00:32:00,160 --> 00:32:02,400 Speaker 1: killing in pork bellies last year, and we're up twenty percent. 621 00:32:03,400 --> 00:32:05,760 Speaker 1: There's not tens of billions of dollars to be made 622 00:32:05,800 --> 00:32:10,280 Speaker 1: in the in those areas. And you alluded to this already, 623 00:32:10,320 --> 00:32:12,920 Speaker 1: But I'm wondering how difficult it has been to market 624 00:32:13,240 --> 00:32:15,520 Speaker 1: your products, because you know, we were just talking about 625 00:32:15,560 --> 00:32:19,960 Speaker 1: how difficult it is to describe some of these concepts 626 00:32:20,080 --> 00:32:23,760 Speaker 1: managed futures and liquid alts. So how difficult is it 627 00:32:23,800 --> 00:32:26,000 Speaker 1: to actually talk to people and have them sort of 628 00:32:26,160 --> 00:32:30,760 Speaker 1: get up, buy in, or even understand what the what 629 00:32:30,920 --> 00:32:35,200 Speaker 1: the e t f s are. Well, it's you know, 630 00:32:35,320 --> 00:32:38,760 Speaker 1: there's there's huge heterogeneity among the investor base. I would 631 00:32:38,760 --> 00:32:41,400 Speaker 1: say most of the conversations that we've had so far 632 00:32:42,120 --> 00:32:44,720 Speaker 1: have been from people who bought into the concept of 633 00:32:44,760 --> 00:32:49,120 Speaker 1: managed futures, you know, two, three, seven years ago. I mean, 634 00:32:49,200 --> 00:32:51,080 Speaker 1: there's there's a kind of a funny expression among guys 635 00:32:51,120 --> 00:32:53,440 Speaker 1: who allocate to managed futures that it's it's it's a 636 00:32:53,440 --> 00:32:56,640 Speaker 1: space that's sold destroying because the moment you fall in 637 00:32:56,720 --> 00:32:59,520 Speaker 1: love with the manager, he somehow craps out and you 638 00:32:59,560 --> 00:33:01,560 Speaker 1: have no idea why, and you can't explain it to 639 00:33:01,840 --> 00:33:04,960 Speaker 1: your investing committee or your clients. Um So I would 640 00:33:05,000 --> 00:33:07,360 Speaker 1: say most of the conversations have been relief. Like I 641 00:33:07,440 --> 00:33:09,560 Speaker 1: wish I'd known about this five years ago. This is 642 00:33:09,600 --> 00:33:11,760 Speaker 1: exactly what I wanted, but I couldn't quite articulate what 643 00:33:12,200 --> 00:33:14,360 Speaker 1: what it was that was wrong and what we were doing. 644 00:33:15,200 --> 00:33:19,200 Speaker 1: And um now my job is to go to the people, 645 00:33:19,240 --> 00:33:21,240 Speaker 1: as you say, who who who are not experienced with 646 00:33:21,280 --> 00:33:24,160 Speaker 1: the space, and and put it in very human terms, 647 00:33:24,240 --> 00:33:28,760 Speaker 1: like you know, the whole thesis of mannered treatures and 648 00:33:28,800 --> 00:33:31,360 Speaker 1: why someone's got to articulate why this space should make 649 00:33:31,400 --> 00:33:34,200 Speaker 1: money over time, right, why these guys with these computers 650 00:33:34,320 --> 00:33:37,240 Speaker 1: running in the background, why it would be valuable and 651 00:33:37,280 --> 00:33:39,200 Speaker 1: there has to be something tangible And so I've said anyway, 652 00:33:39,200 --> 00:33:41,000 Speaker 1: I started to write about that, but it's but but 653 00:33:42,400 --> 00:33:45,720 Speaker 1: that's what I've got to talk to the other I've 654 00:33:45,760 --> 00:33:47,280 Speaker 1: got to I've gotta, I've gotta. I've got to make 655 00:33:47,280 --> 00:33:49,680 Speaker 1: it clear to them how I, as somebody who's not 656 00:33:49,760 --> 00:33:53,000 Speaker 1: a quant I fell in love with the space and 657 00:33:53,360 --> 00:33:56,360 Speaker 1: and try to solve some of these issues for people. Well, 658 00:33:56,520 --> 00:34:00,719 Speaker 1: just quickly entered before we get to our craziest things. Um. 659 00:34:01,040 --> 00:34:03,960 Speaker 1: You know, it feels like the last couple of months 660 00:34:04,040 --> 00:34:07,120 Speaker 1: we've really had some major reversals of earlier trends from there. 661 00:34:07,160 --> 00:34:10,360 Speaker 1: You know, equities are now smps up, I don't know, 662 00:34:10,440 --> 00:34:14,239 Speaker 1: eighteen percent off the low. Uh oil is way off 663 00:34:14,320 --> 00:34:17,600 Speaker 1: the highs um. You know, yields are kind of still 664 00:34:17,600 --> 00:34:19,719 Speaker 1: anybody's guests. But what's how are you thinking about the 665 00:34:19,760 --> 00:34:23,000 Speaker 1: current state of the market, um, as you know from 666 00:34:23,080 --> 00:34:26,160 Speaker 1: the lens of a trend following expert, you know, are 667 00:34:26,200 --> 00:34:29,279 Speaker 1: these real reversals and trends yet or too soon as 668 00:34:29,400 --> 00:34:31,439 Speaker 1: to say, you know, what's what's kind of the whole 669 00:34:31,600 --> 00:34:34,480 Speaker 1: opportunity set look like to you right now? I think 670 00:34:34,480 --> 00:34:36,960 Speaker 1: it's incredibly confusing right now. I mean it's it's I mean, 671 00:34:37,000 --> 00:34:40,520 Speaker 1: if you told so. One thing I've written about is 672 00:34:40,600 --> 00:34:45,399 Speaker 1: the big problem with macro calls in the past two 673 00:34:45,480 --> 00:34:48,759 Speaker 1: years or so has been even if you nailed the call, 674 00:34:49,480 --> 00:34:54,800 Speaker 1: sometimes the markets do completely weird unexpected things. Right, So, 675 00:34:54,960 --> 00:34:57,399 Speaker 1: if you if you had nailed the inflation call last 676 00:34:57,480 --> 00:35:00,440 Speaker 1: year and said, you know, what's where the first place 677 00:35:00,480 --> 00:35:03,359 Speaker 1: you put money? Most people said gold, and then gold 678 00:35:03,400 --> 00:35:05,919 Speaker 1: does nothing like inflation goes to eight percent or whatever 679 00:35:05,960 --> 00:35:08,719 Speaker 1: it is in gold and gold doesn't move. Um. You know, 680 00:35:08,840 --> 00:35:11,920 Speaker 1: if you said, um, you know where where can your 681 00:35:11,920 --> 00:35:13,880 Speaker 1: treasury is going to be? You know, I mean, you 682 00:35:13,920 --> 00:35:16,120 Speaker 1: wouldn't expected them to struggle to break through two percent 683 00:35:16,360 --> 00:35:19,239 Speaker 1: with eight percent inflation. So I think I think when 684 00:35:19,280 --> 00:35:21,960 Speaker 1: you look at what's happened in July, I think if 685 00:35:22,000 --> 00:35:24,359 Speaker 1: you went to a lot of macro guys and said, hey, 686 00:35:24,480 --> 00:35:26,279 Speaker 1: by the way, the world's gonna get really worried about 687 00:35:26,280 --> 00:35:29,719 Speaker 1: a hard procession in three so the big rate hikes 688 00:35:29,719 --> 00:35:32,160 Speaker 1: are off, you wouldn't have had a lot of macro 689 00:35:32,239 --> 00:35:36,000 Speaker 1: guys said, god, let's go buy profitless tech companies. I 690 00:35:36,080 --> 00:35:37,480 Speaker 1: think it feels like we're in a bit of a 691 00:35:37,520 --> 00:35:39,320 Speaker 1: transition period. I think that I think that, you know, 692 00:35:39,400 --> 00:35:42,719 Speaker 1: the hard part right now is that every month consensus 693 00:35:42,840 --> 00:35:46,719 Speaker 1: changes and people are just unbelievably confident that they're right 694 00:35:46,800 --> 00:35:49,880 Speaker 1: this time. And and it's a little bit like watching 695 00:35:50,200 --> 00:35:51,840 Speaker 1: you know, a guy who's kind of whipped on the 696 00:35:51,920 --> 00:35:54,960 Speaker 1: past four pitches, and it's like, oh, but I'm gonna nail. 697 00:35:55,000 --> 00:35:56,320 Speaker 1: You know, I can't wait. I can't wait for the 698 00:35:56,400 --> 00:35:58,480 Speaker 1: next pitch. I'm definitely gonna hit hit a home run. 699 00:35:59,040 --> 00:36:00,880 Speaker 1: And so so it just it feels like we're in 700 00:36:00,920 --> 00:36:02,920 Speaker 1: the midst of this regime ship where things everything is 701 00:36:03,000 --> 00:36:06,680 Speaker 1: changing overnight and changing fast and and you know, I 702 00:36:06,719 --> 00:36:08,640 Speaker 1: think that's gonna great a lot of opportunities, but also 703 00:36:08,800 --> 00:36:12,640 Speaker 1: weird months like the best you know, five or six weeks. Yeah, 704 00:36:13,360 --> 00:36:17,200 Speaker 1: it's just such unprecedented circumstances. It seems like there's no 705 00:36:17,280 --> 00:36:20,840 Speaker 1: playbook to to kind of fall back on. Uh, but Andrew, 706 00:36:20,920 --> 00:36:24,480 Speaker 1: great stuff. Really appreciate your times. We're not gonna let 707 00:36:24,480 --> 00:36:26,840 Speaker 1: you go without a crazy thing though. You come on 708 00:36:26,880 --> 00:36:28,799 Speaker 1: the show, you gotta you gotta have a crazy thing 709 00:36:28,960 --> 00:36:32,920 Speaker 1: to share. Uh, Bildna, You're my favorite crazy thing. By 710 00:36:32,960 --> 00:36:36,279 Speaker 1: the way, I'm just saying, if you're paying attention, so 711 00:36:36,960 --> 00:36:38,520 Speaker 1: I definitely was you want me to go first, you 712 00:36:38,560 --> 00:36:41,239 Speaker 1: go first? Okay, mine is pretty good. There's a woman 713 00:36:41,280 --> 00:36:45,719 Speaker 1: in Nevada who accidentally purchased an entire town basically when 714 00:36:45,800 --> 00:36:48,120 Speaker 1: she was that I know me too, It's happened to 715 00:36:48,160 --> 00:36:50,440 Speaker 1: me so many times. But she was signing to buy 716 00:36:50,640 --> 00:36:54,040 Speaker 1: her new home. She's living near Reno, hoping to live 717 00:36:54,160 --> 00:36:57,200 Speaker 1: near Reno. Her house was worth or she was buying 718 00:36:57,239 --> 00:37:03,440 Speaker 1: it FO dollars, and some clause got accidentally copy pasted 719 00:37:03,480 --> 00:37:06,040 Speaker 1: into her contract, and she ended up with eighty four 720 00:37:06,120 --> 00:37:09,919 Speaker 1: lots and two common spaces in this town, all thanks 721 00:37:09,960 --> 00:37:14,280 Speaker 1: to this copy paste. For that's right, what that sounds 722 00:37:14,320 --> 00:37:15,719 Speaker 1: like she got the better end of the deal. I 723 00:37:15,760 --> 00:37:20,360 Speaker 1: think it was a legal description from another sale contract 724 00:37:20,520 --> 00:37:24,799 Speaker 1: was accidentally copy pasted into hers, and she got an 725 00:37:24,960 --> 00:37:28,799 Speaker 1: entire town. And it sounds like a win for her, 726 00:37:28,880 --> 00:37:32,560 Speaker 1: unless I are there, like nuclear waste buried under No, 727 00:37:32,719 --> 00:37:35,640 Speaker 1: it's houses. Okay, So the eighty four lots this is 728 00:37:35,680 --> 00:37:39,600 Speaker 1: from a UM, a business inside of story UM but 729 00:37:40,520 --> 00:37:42,480 Speaker 1: I never heard of them my first time getting on 730 00:37:42,520 --> 00:37:45,760 Speaker 1: that website. But the eighty four lots, they included homes 731 00:37:45,800 --> 00:37:48,839 Speaker 1: that had already been built and sold, and then at 732 00:37:48,920 --> 00:37:51,560 Speaker 1: least sixty four of them were put under her name 733 00:37:52,239 --> 00:37:55,120 Speaker 1: a couple of days ago when this happened. Well, so 734 00:37:55,239 --> 00:37:57,520 Speaker 1: I think good, right, Yeah, I think she wins. I 735 00:37:57,520 --> 00:37:59,680 Speaker 1: don't know who's the loser on that trade, but someone's 736 00:38:00,000 --> 00:38:02,279 Speaker 1: someone's getting fired. I mean, she wins or I win 737 00:38:02,360 --> 00:38:07,600 Speaker 1: the competition. I gotta see what Andrew has. How about you, Andrew, 738 00:38:07,600 --> 00:38:11,000 Speaker 1: you say anything crazy this week? Well, I think the 739 00:38:11,080 --> 00:38:13,279 Speaker 1: craziest thing is just where the dollar is. Yeah, I 740 00:38:13,320 --> 00:38:14,840 Speaker 1: mean I know, this is this is this is not 741 00:38:15,080 --> 00:38:18,080 Speaker 1: nearly as as exciting as what you just said to me. 742 00:38:18,320 --> 00:38:21,480 Speaker 1: The strength of the dollar is just like when you 743 00:38:21,560 --> 00:38:23,560 Speaker 1: see an explosion the distance and you're waiting for the 744 00:38:23,600 --> 00:38:28,200 Speaker 1: shock wave to hit and and it's just it's the 745 00:38:28,280 --> 00:38:31,080 Speaker 1: world is not really well equipped to deal with it. 746 00:38:31,160 --> 00:38:32,920 Speaker 1: I mean, it's this is going to have implications to 747 00:38:32,960 --> 00:38:35,880 Speaker 1: emerging markets in other areas. And I think, what's to 748 00:38:35,960 --> 00:38:39,359 Speaker 1: me the crazy thing? And again, it's not as uh 749 00:38:39,960 --> 00:38:41,879 Speaker 1: as exciting. It's just it's just you know, we we've 750 00:38:41,960 --> 00:38:44,520 Speaker 1: we have such narrow attention spans, so we're all focusing 751 00:38:44,560 --> 00:38:48,040 Speaker 1: on whether text docs have bounced up today or yesterday. Meanwhile, 752 00:38:48,040 --> 00:38:51,640 Speaker 1: you've got this potential fire burning in the background. Um 753 00:38:52,520 --> 00:38:55,399 Speaker 1: so um. That's something that I kind of just staring 754 00:38:55,440 --> 00:38:58,680 Speaker 1: at a disbelief honestly, mainly because who would have thought 755 00:38:58,719 --> 00:39:02,160 Speaker 1: we'd have a strong dollar with nine percent inflation? Well, 756 00:39:02,239 --> 00:39:04,759 Speaker 1: I mean, the the it hasn't really big inflations for 757 00:39:05,160 --> 00:39:09,000 Speaker 1: emerging markets, right, so so every emergencing market. Most emerging 758 00:39:09,040 --> 00:39:11,960 Speaker 1: markets have some dollar denominated debt that just got fifteen 759 00:39:12,040 --> 00:39:14,640 Speaker 1: or twenty or thirty percent more expensive this year. The 760 00:39:14,920 --> 00:39:18,680 Speaker 1: end is you know, has gone down fifteen percent this year. 761 00:39:18,719 --> 00:39:21,239 Speaker 1: I mean those are those are moves like you know, 762 00:39:21,360 --> 00:39:24,239 Speaker 1: tech stocks going down and it's happened in six months, 763 00:39:24,480 --> 00:39:27,799 Speaker 1: and so these things tend to have ripple effects through 764 00:39:27,800 --> 00:39:29,560 Speaker 1: the markets. And I think that in a sense, the 765 00:39:29,640 --> 00:39:31,759 Speaker 1: craziest thing is that we haven't had another end run, 766 00:39:32,400 --> 00:39:36,800 Speaker 1: you know, we haven't had a a major collapse that 767 00:39:36,920 --> 00:39:40,680 Speaker 1: has had ripple effects through the markets. And maybe the 768 00:39:40,719 --> 00:39:42,760 Speaker 1: answer is that we've somehow figured out how to contain 769 00:39:42,840 --> 00:39:45,320 Speaker 1: those in advance, or risk management has gotten better. But 770 00:39:45,719 --> 00:39:48,440 Speaker 1: but it just it feels like something. It feels like 771 00:39:48,560 --> 00:39:51,279 Speaker 1: there's something that go. The other answer is wait for it, 772 00:39:51,680 --> 00:39:55,600 Speaker 1: you know, Yeah, it's coming a lot of times Everyone's phone, 773 00:39:55,719 --> 00:39:59,320 Speaker 1: so they'll be cursing Andrew's name for JINX. Yeah that 774 00:40:00,000 --> 00:40:05,040 Speaker 1: I agree though, um uh for sure. All right, two 775 00:40:05,080 --> 00:40:07,440 Speaker 1: good crazy things I'll give you mine. You guys are 776 00:40:07,480 --> 00:40:12,040 Speaker 1: probably familiar with the big crypto exchange finance uh And 777 00:40:12,120 --> 00:40:15,720 Speaker 1: this is the story courtesy of the Indian Express. Apparently, 778 00:40:15,760 --> 00:40:19,680 Speaker 1: the CEO of Finance has an issue with LinkedIn. Veldonna Um, 779 00:40:20,719 --> 00:40:23,120 Speaker 1: that's why that's true. Now you're my You're my only 780 00:40:23,160 --> 00:40:25,759 Speaker 1: issue on LinkedIn. Otherwise I got no problem. That's you 781 00:40:25,880 --> 00:40:29,399 Speaker 1: I have the issue with. He says, there's way too 782 00:40:29,440 --> 00:40:33,400 Speaker 1: many fake linked In profiles on there. There are seven 783 00:40:33,520 --> 00:40:37,640 Speaker 1: thousand people on LinkedIn who claim to work for Binance, 784 00:40:38,320 --> 00:40:40,560 Speaker 1: and this is a big issue because if you're a 785 00:40:40,680 --> 00:40:44,080 Speaker 1: fake Binance employee and you're on there saying those coins 786 00:40:44,120 --> 00:40:46,399 Speaker 1: going to the moon, or you know, we're gonna list 787 00:40:46,920 --> 00:40:50,799 Speaker 1: such and such a coin, just obvious pump and dump scams. Um. 788 00:40:50,920 --> 00:40:55,440 Speaker 1: So he's demanding LinkedIn sort of verify people on the 789 00:40:55,560 --> 00:40:58,520 Speaker 1: site who claimed to work for a company, which I think, Uh, 790 00:40:58,640 --> 00:41:01,040 Speaker 1: it's probably something they're gonna have to sounds very familiar 791 00:41:01,600 --> 00:41:04,600 Speaker 1: the Holy elon musk Twitter. That's right, that's right. But 792 00:41:04,760 --> 00:41:08,680 Speaker 1: here's where we get to our game show. The price 793 00:41:08,960 --> 00:41:14,160 Speaker 1: is precise, The prices PERI. I we got to inform you, Andrew, 794 00:41:14,200 --> 00:41:17,120 Speaker 1: you're now contestant on a game show called the Price. 795 00:41:17,280 --> 00:41:20,840 Speaker 1: Not the prices, right, the prices precise, not exactly a price, 796 00:41:20,920 --> 00:41:24,040 Speaker 1: but a number. So this guy says, there's seven thousand 797 00:41:24,120 --> 00:41:29,120 Speaker 1: people on LinkedIn claiming to work for Binance. The number, 798 00:41:29,239 --> 00:41:31,520 Speaker 1: he says, is a different number who actually worked there, 799 00:41:31,600 --> 00:41:33,719 Speaker 1: who were on LinkedIn? What do you think that number is? 800 00:41:34,120 --> 00:41:37,279 Speaker 1: Am I going first? You go first. Finance is a 801 00:41:37,840 --> 00:41:41,360 Speaker 1: big company, it's the biggest crypto exchange. So I'm going 802 00:41:41,440 --> 00:41:45,759 Speaker 1: to go with a thousand, thousand andrew, What do you 803 00:41:45,880 --> 00:41:49,000 Speaker 1: think according to the ceo? Mind you, the correct number 804 00:41:49,200 --> 00:41:55,080 Speaker 1: of Finance employees on LinkedIn is that's pretty good? He 805 00:41:55,239 --> 00:41:58,000 Speaker 1: says only fifty. He says only fifty of them are 806 00:41:58,080 --> 00:42:02,680 Speaker 1: legit and the other six thousand, nine d and fifty 807 00:42:02,920 --> 00:42:06,680 Speaker 1: are focus. I don't I think these crypto exchanges are 808 00:42:06,719 --> 00:42:09,040 Speaker 1: pretty lean. I don't. I don't you know. I don't 809 00:42:09,040 --> 00:42:11,520 Speaker 1: know if there'd be a thousand. Maybe maybe coin based 810 00:42:11,520 --> 00:42:13,480 Speaker 1: would have a thousand, I don't know, but uh not. 811 00:42:13,640 --> 00:42:16,359 Speaker 1: Note everyone has a LinkedIn profile whatever. Yeah and yeah, 812 00:42:16,680 --> 00:42:20,440 Speaker 1: I mean if you have yeah, so and even fewer 813 00:42:20,719 --> 00:42:25,000 Speaker 1: subset is allowed into Vildonna's professional network. No, almost everybody 814 00:42:25,040 --> 00:42:28,359 Speaker 1: has a lot of except for you. Yeah. Never gets old, 815 00:42:29,120 --> 00:42:31,040 Speaker 1: never gets old. I'm waiting, by the way, I'm waiting 816 00:42:31,080 --> 00:42:34,239 Speaker 1: for the bots to come out and and and accidentally 817 00:42:34,800 --> 00:42:38,759 Speaker 1: promote all of our products. Oh, yeah, it would. It 818 00:42:38,800 --> 00:42:40,960 Speaker 1: would be a social good. You need to get them 819 00:42:41,000 --> 00:42:44,200 Speaker 1: on Reddit somehow. The first meme TF Have there been 820 00:42:44,239 --> 00:42:46,919 Speaker 1: any meme? T? Yeah, of course there. Like I don't 821 00:42:46,920 --> 00:42:49,560 Speaker 1: know you'll be able to talking about about, you know, bots, 822 00:42:49,640 --> 00:42:51,399 Speaker 1: like soliciting them with all sorts of things. I feel 823 00:42:51,400 --> 00:42:54,080 Speaker 1: like I'm just not cool enough that or high profile 824 00:42:54,200 --> 00:42:56,759 Speaker 1: enough that, you know, like I'm sort of jealous. I 825 00:42:56,760 --> 00:43:00,319 Speaker 1: don't get any body attention. Maybe just not correct enough 826 00:43:00,400 --> 00:43:04,880 Speaker 1: to hire a Botto army. All of my LinkedIn connections 827 00:43:04,920 --> 00:43:07,719 Speaker 1: are real people? Are you sure about that? Yeah? Are 828 00:43:07,760 --> 00:43:11,440 Speaker 1: you sure? Check? How many are finance employees? If if 829 00:43:12,160 --> 00:43:16,839 Speaker 1: of your connections are Binance employees that, I'm gonna yeah, 830 00:43:17,160 --> 00:43:21,680 Speaker 1: we'll see. I still won't add you. What about a 831 00:43:21,719 --> 00:43:26,279 Speaker 1: bot Reagan? If there's a bot like Reagan there, maybe 832 00:43:26,320 --> 00:43:28,480 Speaker 1: I'm on there as a fake Binance employee. You don't 833 00:43:28,520 --> 00:43:33,200 Speaker 1: even know what you added. I think that's enough conspiracy 834 00:43:33,280 --> 00:43:36,600 Speaker 1: theories for the week. Andrew Bear, great pleasure to catch 835 00:43:36,680 --> 00:43:37,879 Speaker 1: up with you. I hope we can have you back 836 00:43:38,719 --> 00:43:40,399 Speaker 1: in the future and talk about how things are going 837 00:43:41,440 --> 00:43:43,960 Speaker 1: with your firm. Thank you so much, it's a pleasure 838 00:43:43,960 --> 00:43:54,080 Speaker 1: to be here. Thanks for coming on What Goes Up. 839 00:43:54,120 --> 00:43:55,960 Speaker 1: We'll be back next week and so then you can 840 00:43:56,000 --> 00:43:58,759 Speaker 1: find us on the Bloomberg Terminal website and app, or 841 00:43:58,960 --> 00:44:01,640 Speaker 1: wherever you get your pot casts. We love it if 842 00:44:01,640 --> 00:44:03,520 Speaker 1: you took the time to rate and review the show 843 00:44:03,680 --> 00:44:06,920 Speaker 1: on Apple Podcasts, so more listeners can find us. And 844 00:44:07,040 --> 00:44:09,880 Speaker 1: you can find us on Twitter, follow me at reag Anonymous, 845 00:44:10,560 --> 00:44:13,919 Speaker 1: Bill Donna hierarch Is at Bildonna Hirach. You can also 846 00:44:14,000 --> 00:44:18,720 Speaker 1: follow Bloomberg Podcasts at Podcasts. What Goes Up is produced 847 00:44:18,760 --> 00:44:21,520 Speaker 1: by Stacy Wong. Thanks for listening, See you next time.