1 00:00:00,080 --> 00:00:01,280 Speaker 1: Hello, Odd Lots listeners. 2 00:00:01,360 --> 00:00:04,520 Speaker 2: I'm Jill Wisenthal and I'm Tracy Alloway Tracy. We're doing 3 00:00:04,600 --> 00:00:06,880 Speaker 2: another live show and it's right here in New York City. 4 00:00:07,080 --> 00:00:10,080 Speaker 3: Yeah, this one should be our biggest yet, and we're 5 00:00:10,080 --> 00:00:12,480 Speaker 3: going to have a bunch of Odd Lots favorites and 6 00:00:13,160 --> 00:00:15,880 Speaker 3: do something maybe a little different to some of our 7 00:00:15,960 --> 00:00:18,200 Speaker 3: previous live podcast recordings. 8 00:00:18,280 --> 00:00:21,079 Speaker 2: When the guests are revealed, the show is going to 9 00:00:21,120 --> 00:00:22,840 Speaker 2: sell out right away, so you should really just go 10 00:00:22,840 --> 00:00:25,960 Speaker 2: get your ticket right now. It's June twenty sixth. It's 11 00:00:25,960 --> 00:00:28,560 Speaker 2: at Recket, NYC, and you can find a ticket link 12 00:00:28,600 --> 00:00:31,800 Speaker 2: at Bloomberg dot com slash odd Lots or Bloomberg Events 13 00:00:31,840 --> 00:00:34,040 Speaker 2: dot com slash odd Lots Live and. 14 00:00:33,960 --> 00:00:35,440 Speaker 3: Why we hope to see you there. 15 00:00:38,680 --> 00:00:52,520 Speaker 4: Bloomberg Audio Studios, Podcasts, Radio News. 16 00:00:54,000 --> 00:00:57,880 Speaker 2: Hello and welcome to another episode of the Odd Lots Podcast. 17 00:00:57,960 --> 00:01:00,960 Speaker 3: I'm Jill Wisenthal and I'm Tracy Tracy. 18 00:01:01,040 --> 00:01:03,960 Speaker 2: This has come up a few times on the podcast 19 00:01:04,000 --> 00:01:06,280 Speaker 2: over the years, but you know, you. 20 00:01:06,240 --> 00:01:08,720 Speaker 1: Really feel dumb there. You could really feel. 21 00:01:08,600 --> 00:01:10,760 Speaker 2: Dumb as an investor over the last i don't know, 22 00:01:10,840 --> 00:01:14,560 Speaker 2: fifteen twenty years if you literally bought anything else besides 23 00:01:14,560 --> 00:01:15,160 Speaker 2: big tech. 24 00:01:15,040 --> 00:01:18,080 Speaker 3: Stocks, big US text, Yeah, big US text docks. Yeah, 25 00:01:18,080 --> 00:01:21,080 Speaker 3: that's exactly right. And the funny thing is investors have 26 00:01:21,120 --> 00:01:24,920 Speaker 3: been encouraged to diversify, right, Like this is the mantra 27 00:01:25,440 --> 00:01:27,680 Speaker 3: of markets is that you shouldn't put all your eggs 28 00:01:27,760 --> 00:01:30,520 Speaker 3: in one basket, et cetera, et cetera. And so you've 29 00:01:30,560 --> 00:01:33,319 Speaker 3: heard for the past ten or fifteen years that you 30 00:01:33,319 --> 00:01:39,120 Speaker 3: should diversify into international stocks, you should diversify into small caps. Yeah, 31 00:01:39,200 --> 00:01:42,680 Speaker 3: sixty forty and a lot of those things have turned 32 00:01:42,680 --> 00:01:45,120 Speaker 3: out to be duds, or at least sixty forty was 33 00:01:45,120 --> 00:01:47,520 Speaker 3: a dud for like a couple of years, kind of 34 00:01:47,840 --> 00:01:48,120 Speaker 3: kind of. 35 00:01:48,200 --> 00:01:50,480 Speaker 2: I mean, it mostly did well, but like, yeah, then 36 00:01:50,520 --> 00:01:52,800 Speaker 2: it had some it had some rough years, particularly out 37 00:01:52,800 --> 00:01:53,360 Speaker 2: of the pandemic. 38 00:01:53,440 --> 00:01:55,960 Speaker 3: But certainly you would have been missing out on big 39 00:01:56,000 --> 00:01:59,600 Speaker 3: gains if you put money into small caps or international 40 00:01:59,680 --> 00:02:02,160 Speaker 3: stocks versus the big US techtoks. 41 00:02:02,440 --> 00:02:05,800 Speaker 2: Right, And you know, we've gotten a little bit. You know, 42 00:02:05,920 --> 00:02:08,480 Speaker 2: when deep Seat came out, that raised some questions about 43 00:02:08,520 --> 00:02:13,720 Speaker 2: big tech stocks. Obviously with the policy volatility in the US, 44 00:02:13,800 --> 00:02:15,359 Speaker 2: which is one way to put it, there have been 45 00:02:15,360 --> 00:02:19,480 Speaker 2: some questions about, Okay, is now the time to diversify abroad. Yeah, okay, 46 00:02:19,560 --> 00:02:23,240 Speaker 2: you could have bought money buying Ryan Mattal or one 47 00:02:23,320 --> 00:02:27,480 Speaker 2: of the beneficiaries of German defense spending. But so far, 48 00:02:28,280 --> 00:02:31,600 Speaker 2: you know, it's still not obvious that like there's some 49 00:02:31,760 --> 00:02:35,720 Speaker 2: other big moneymaker out there for investors besides big tech. 50 00:02:35,800 --> 00:02:38,040 Speaker 1: But this is but we may be at a juncture. 51 00:02:38,200 --> 00:02:38,399 Speaker 5: Well. 52 00:02:38,440 --> 00:02:41,760 Speaker 3: I think the other unappreciated aspect is the importance of 53 00:02:41,800 --> 00:02:45,120 Speaker 3: the benchmarks in all of this. And I think investors 54 00:02:45,120 --> 00:02:49,040 Speaker 3: tend to think of benchmark index providers as these very 55 00:02:49,120 --> 00:02:52,560 Speaker 3: neutral entities that are like holding out a mirror to 56 00:02:52,639 --> 00:02:57,000 Speaker 3: the market and just reflecting what's already there. But actually 57 00:02:57,120 --> 00:03:00,200 Speaker 3: a lot of their decisions are very active and have 58 00:03:00,400 --> 00:03:03,640 Speaker 3: very very big implications for investors. So you know, if 59 00:03:03,760 --> 00:03:07,400 Speaker 3: MSCI says that the all World index is going to 60 00:03:07,480 --> 00:03:10,880 Speaker 3: have small caps and big caps in it, then investors 61 00:03:10,919 --> 00:03:13,880 Speaker 3: are you know, they're forced to buy small cap exposure. 62 00:03:14,240 --> 00:03:17,240 Speaker 2: That's totally correct, and this is core finance theory that 63 00:03:17,240 --> 00:03:20,519 Speaker 2: the optical portfolio is more or less the global portfolio. 64 00:03:20,639 --> 00:03:23,280 Speaker 2: We've talked about that with the dimensional guys, you really 65 00:03:23,360 --> 00:03:27,600 Speaker 2: should have awaited allocation somehow, if possible, to every bond, 66 00:03:27,880 --> 00:03:30,000 Speaker 2: stock and piece of real estate out there and that's 67 00:03:30,000 --> 00:03:32,280 Speaker 2: the best you can do, and that clearly has not 68 00:03:32,360 --> 00:03:33,960 Speaker 2: been the best you can do for a long time. 69 00:03:34,360 --> 00:03:36,960 Speaker 2: And so we want to talk about the tortured pain 70 00:03:37,120 --> 00:03:39,400 Speaker 2: of the poor diverse byed allocator and. 71 00:03:39,320 --> 00:03:41,920 Speaker 3: The tyranny of the benchmark index providers. 72 00:03:42,000 --> 00:03:46,080 Speaker 2: Yeah, very shaped, very Shakespearean. Anyway, I'm really excited. I 73 00:03:46,080 --> 00:03:49,080 Speaker 2: think we do, in fact have the perfect guest, someone 74 00:03:49,120 --> 00:03:51,000 Speaker 2: who I've been a big fan of for a long time, 75 00:03:51,040 --> 00:03:52,760 Speaker 2: someone I've wanted to have on the show for a 76 00:03:52,800 --> 00:03:56,320 Speaker 2: long time. He's probably one of my top five favorite 77 00:03:56,320 --> 00:03:58,960 Speaker 2: posters on Twitter, although he's quite a down a little 78 00:03:59,000 --> 00:04:01,240 Speaker 2: bit lately, but I think he's addicted like the rest 79 00:04:01,280 --> 00:04:04,080 Speaker 2: of us. We're going to be speaking with Krishna Mamani. 80 00:04:04,080 --> 00:04:07,200 Speaker 2: He is currently the Chief Investment Officer of the Lafayette 81 00:04:07,200 --> 00:04:11,320 Speaker 2: College Endowments. Previously, he was the CIO at the Oppenheimer Funds, 82 00:04:11,320 --> 00:04:15,040 Speaker 2: which was bought by Invesco. So a long storied career, 83 00:04:15,080 --> 00:04:17,000 Speaker 2: someone who knows about all of this stuff. So, Krishna, 84 00:04:17,040 --> 00:04:19,600 Speaker 2: thank you so much for coming on the podcast. Thrilled 85 00:04:19,600 --> 00:04:20,760 Speaker 2: we can finally make it happen. 86 00:04:21,160 --> 00:04:22,360 Speaker 5: Thank you, thanks for having me. 87 00:04:22,680 --> 00:04:26,640 Speaker 2: Absolutely what do they teach you in school about diversification. 88 00:04:26,760 --> 00:04:29,240 Speaker 2: What is when they you know, when you're training to 89 00:04:29,320 --> 00:04:32,400 Speaker 2: be an investor and asset allocator, what are they actually 90 00:04:32,480 --> 00:04:33,200 Speaker 2: What do they tell you? 91 00:04:34,360 --> 00:04:38,719 Speaker 5: Diversification is the biggest free lunch available in the investment world, 92 00:04:39,520 --> 00:04:42,760 Speaker 5: and I think from a longer term perspective that is 93 00:04:42,839 --> 00:04:48,359 Speaker 5: absolutely true and probably something that we are to think about. 94 00:04:48,400 --> 00:04:52,600 Speaker 5: But as you mentioned, the results over the it's not 95 00:04:52,680 --> 00:04:54,280 Speaker 5: just last fifteen twenty years. 96 00:04:54,320 --> 00:04:55,200 Speaker 1: The results over the. 97 00:04:55,240 --> 00:04:59,400 Speaker 5: Last thirty years forty years have been very very, very 98 00:04:59,480 --> 00:05:02,599 Speaker 5: very different than what you would have expected if you 99 00:05:02,640 --> 00:05:05,680 Speaker 5: had gone down this path. Doesn't mean that the basic 100 00:05:05,760 --> 00:05:09,720 Speaker 5: principle isn't invalidated. It just simply means that you have 101 00:05:09,760 --> 00:05:11,919 Speaker 5: to think about it and acknowledge the fact that it 102 00:05:11,960 --> 00:05:13,440 Speaker 5: hasn't worked out according to plan. 103 00:05:13,760 --> 00:05:17,080 Speaker 3: Where did the diversification thesis actually come from. 104 00:05:17,600 --> 00:05:22,080 Speaker 5: Well, diversification thesis basically says that if you have security 105 00:05:22,120 --> 00:05:26,640 Speaker 5: specific risks in individual securities, you should if you can 106 00:05:26,680 --> 00:05:30,159 Speaker 5: find a way of diversifying that away, then that is 107 00:05:30,200 --> 00:05:33,040 Speaker 5: something that you should do because it reduces your overall 108 00:05:33,160 --> 00:05:37,080 Speaker 5: risk profile without sacrificing too much in return terms. So 109 00:05:37,279 --> 00:05:39,000 Speaker 5: that's what that's where the theory comes from. 110 00:05:39,080 --> 00:05:42,719 Speaker 3: And the like who propagated it. It must have had, like, 111 00:05:42,920 --> 00:05:45,480 Speaker 3: you know, an endorser, or it must have made its 112 00:05:45,480 --> 00:05:47,719 Speaker 3: way into the market in one way or another. 113 00:05:48,040 --> 00:05:51,200 Speaker 5: I think it came from cap M and William Sharp 114 00:05:51,279 --> 00:05:55,400 Speaker 5: and you know that quarterie of academicians who basically did 115 00:05:55,400 --> 00:05:59,560 Speaker 5: the pioneering research in this field in the let's say 116 00:05:59,600 --> 00:06:01,400 Speaker 5: seventy and early nineties. 117 00:06:01,480 --> 00:06:03,920 Speaker 2: Yeah. In my four to one K, I have like 118 00:06:04,040 --> 00:06:09,359 Speaker 2: a very conservative I've diversified fund. It has not kept 119 00:06:09,440 --> 00:06:12,599 Speaker 2: up with the S and P five hundred, I don't think. 120 00:06:12,720 --> 00:06:16,200 Speaker 2: But every once in a while, such as the first 121 00:06:16,200 --> 00:06:19,960 Speaker 2: couple weeks of April twenty twenty five or the first 122 00:06:20,000 --> 00:06:22,960 Speaker 2: couple of weeks of March twenty twenty, I take a 123 00:06:23,000 --> 00:06:24,880 Speaker 2: look at it and I'm like, oh, I pat myself 124 00:06:24,880 --> 00:06:27,320 Speaker 2: on the back for those moments of diversification. 125 00:06:28,200 --> 00:06:30,040 Speaker 1: Is it worthwhile? Just for those reasons? 126 00:06:30,520 --> 00:06:33,000 Speaker 2: Every once in a while you're like, okay, you know what, 127 00:06:33,360 --> 00:06:35,720 Speaker 2: this makes me feel good. I'm not going to panic last, 128 00:06:35,800 --> 00:06:37,920 Speaker 2: I'm actually my port. You know that four one K 129 00:06:38,000 --> 00:06:41,080 Speaker 2: it actually stays close to all the time highs. I keep, 130 00:06:41,080 --> 00:06:43,560 Speaker 2: you know, allocating it a little bit. How much is 131 00:06:43,600 --> 00:06:46,440 Speaker 2: that worth in terms of that comfort that I get 132 00:06:46,480 --> 00:06:50,400 Speaker 2: for like five minutes every twenty years, and relative to 133 00:06:50,440 --> 00:06:53,640 Speaker 2: the cost of underperforming a simple S and P five hundred, 134 00:06:53,760 --> 00:06:54,240 Speaker 2: paying a. 135 00:06:54,200 --> 00:06:55,520 Speaker 3: Price for a peace of mind? 136 00:06:55,600 --> 00:07:01,840 Speaker 5: Yeah, well so I Again, my argument isn't that diversification 137 00:07:02,120 --> 00:07:05,360 Speaker 5: is a bad thing. I think from an economic principles, 138 00:07:05,360 --> 00:07:09,200 Speaker 5: from financial principles, diversification is a good thing. And if 139 00:07:09,200 --> 00:07:12,160 Speaker 5: you can find a way of dis or mitigating your 140 00:07:12,280 --> 00:07:16,000 Speaker 5: overall security specific risk, you are to do that. The 141 00:07:16,080 --> 00:07:19,040 Speaker 5: point I'm trying to I would like to make is 142 00:07:19,080 --> 00:07:23,840 Speaker 5: the fact that it hasn't worked, and therefore, kind of 143 00:07:23,920 --> 00:07:27,640 Speaker 5: relying on thirty years or forty years or one hundred 144 00:07:27,720 --> 00:07:31,000 Speaker 5: years of history to come to some sort of investment 145 00:07:31,080 --> 00:07:35,720 Speaker 5: principles that people follow very religiously, you know, hasn't worked. 146 00:07:36,040 --> 00:07:39,200 Speaker 5: So shouldn't we kind of think about that and try 147 00:07:39,240 --> 00:07:42,320 Speaker 5: to delve into what are the drivers? And it opens 148 00:07:42,400 --> 00:07:45,440 Speaker 5: up a new research field because I would argue that 149 00:07:45,520 --> 00:07:49,560 Speaker 5: the overall research in financial kind of investing is basically 150 00:07:49,680 --> 00:07:53,480 Speaker 5: hasn't evolved a lot since the nineties. It's basically redoing 151 00:07:53,480 --> 00:07:57,520 Speaker 5: the same papers with a little bit of changes here 152 00:07:57,560 --> 00:08:00,800 Speaker 5: and there, but the core thinking cap im core thinking 153 00:08:01,040 --> 00:08:04,120 Speaker 5: really has not changed. So I think the right way 154 00:08:04,160 --> 00:08:08,480 Speaker 5: to use this period of underperformance, whether it will sustain 155 00:08:08,520 --> 00:08:13,240 Speaker 5: itself or whether you know, twenty twenty five change the 156 00:08:13,280 --> 00:08:16,200 Speaker 5: paradigm altogether or not, is kind of kind of irrelevant. 157 00:08:16,560 --> 00:08:19,600 Speaker 5: The key point is, let's kind of look at this period. 158 00:08:20,120 --> 00:08:22,040 Speaker 5: Let's look at it a little in a little bit 159 00:08:22,080 --> 00:08:27,480 Speaker 5: more detail, rather than being extraordinarily Doctornaire about things, which is, 160 00:08:27,720 --> 00:08:31,960 Speaker 5: you know, anytime you post on Twitter that while my 161 00:08:32,040 --> 00:08:34,920 Speaker 5: international funds haven't really worked for me, I get schooled 162 00:08:34,960 --> 00:08:37,839 Speaker 5: by all sorts of people. But the fact is they 163 00:08:37,880 --> 00:08:41,480 Speaker 5: haven't worked for me, and I continue to do that. 164 00:08:41,520 --> 00:08:44,520 Speaker 5: I mean, I have a very diversified portfolio, and I 165 00:08:44,600 --> 00:08:47,760 Speaker 5: will probably stick with it. But I think it is 166 00:08:47,840 --> 00:08:50,840 Speaker 5: also fair to recognize that it hasn't worked, and therefore 167 00:08:51,040 --> 00:08:52,880 Speaker 5: we should look at it in a little bit more 168 00:08:52,920 --> 00:08:59,200 Speaker 5: detail and kind of not take the mantra of diversification 169 00:08:59,360 --> 00:09:01,960 Speaker 5: as religious, which is what it is right now. 170 00:09:02,600 --> 00:09:05,600 Speaker 3: So in your opinion, what are the drivers or the 171 00:09:05,640 --> 00:09:08,320 Speaker 3: reasons why it hasn't worked, because I imagine, you know, 172 00:09:08,360 --> 00:09:11,040 Speaker 3: you could tell a story that the big tech stocks 173 00:09:11,040 --> 00:09:14,680 Speaker 3: in the US have just been phenomenal companies that continue 174 00:09:14,720 --> 00:09:18,560 Speaker 3: to throw off cash. You could maybe tell a story 175 00:09:18,760 --> 00:09:22,280 Speaker 3: about the benchmark indices, which we spoke about in the intro. 176 00:09:22,640 --> 00:09:25,560 Speaker 3: You could tell a story about flows and investors crowding 177 00:09:25,600 --> 00:09:29,320 Speaker 3: into stocks. Why hasn't diversification worked well? 178 00:09:29,360 --> 00:09:31,319 Speaker 5: So again, let's just kind of narrow it down. When 179 00:09:31,360 --> 00:09:33,760 Speaker 5: we are talking about this level of diversification, what we 180 00:09:33,800 --> 00:09:37,400 Speaker 5: are talking about is US stocks not working or US 181 00:09:37,440 --> 00:09:40,400 Speaker 5: stocks doing better than international stocks. So that's what we 182 00:09:40,440 --> 00:09:43,679 Speaker 5: are talking about. I think there are several drivers. I 183 00:09:43,679 --> 00:09:46,720 Speaker 5: think the kind of the tech supremacy of s and 184 00:09:46,720 --> 00:09:49,960 Speaker 5: P five hundred is certainly one of them. The profitability 185 00:09:49,960 --> 00:09:53,600 Speaker 5: of the tech franchise is another one. Low interest rates 186 00:09:53,640 --> 00:09:56,600 Speaker 5: in the US, where growth was higher than interest rates, 187 00:09:56,840 --> 00:10:02,000 Speaker 5: certainly was a factor in driving returns. So and and 188 00:10:02,080 --> 00:10:05,880 Speaker 5: kind of the existence of private equity which got multiples high. 189 00:10:06,040 --> 00:10:10,000 Speaker 5: So there are a plethora of reasons as to why 190 00:10:10,080 --> 00:10:15,840 Speaker 5: things haven't performed, and therefore, you know, it is it 191 00:10:15,920 --> 00:10:19,079 Speaker 5: is worthwhile spending a little You know, these are speculations 192 00:10:19,160 --> 00:10:21,880 Speaker 5: on my part, but this is worthwhile spending a little 193 00:10:21,880 --> 00:10:24,000 Speaker 5: bit of time figuring this out in a little bit 194 00:10:24,000 --> 00:10:27,160 Speaker 5: more rigorous way than we have done so far, because 195 00:10:27,400 --> 00:10:31,200 Speaker 5: you know, right now, again, if anybody puts up a 196 00:10:31,320 --> 00:10:35,800 Speaker 5: notion that diversification is bad, they'll get schooled. But I 197 00:10:35,840 --> 00:10:39,360 Speaker 5: think given the length of time that it hasn't worked, 198 00:10:39,360 --> 00:10:42,320 Speaker 5: and given the length of the magnitude of how it 199 00:10:42,360 --> 00:10:45,040 Speaker 5: hasn't worked, I think it is worthwhile spending a little 200 00:10:45,040 --> 00:10:48,960 Speaker 5: bit of research focused to analyze what the drivers were, 201 00:10:49,000 --> 00:10:51,560 Speaker 5: as you say, and see if there are there are 202 00:10:51,600 --> 00:10:54,840 Speaker 5: some other things that we can divine out of this 203 00:10:55,160 --> 00:10:56,439 Speaker 5: thirty year episode. 204 00:10:56,679 --> 00:11:00,120 Speaker 3: So I totally appreciate the need for additional research and 205 00:11:00,120 --> 00:11:02,480 Speaker 3: I would agree with you on that. But is saying 206 00:11:02,480 --> 00:11:06,240 Speaker 3: that diversification hasn't worked the same as saying that investors 207 00:11:06,280 --> 00:11:09,080 Speaker 3: should only buy winners and avoid all the losers. 208 00:11:09,840 --> 00:11:12,880 Speaker 5: Well, so I think there's an element of that in 209 00:11:13,240 --> 00:11:17,120 Speaker 5: for sure. That is, international markets have done poorly relative 210 00:11:17,200 --> 00:11:21,640 Speaker 5: to US markets. One anecdote here, I used to be 211 00:11:21,760 --> 00:11:26,000 Speaker 5: the spokesperson for Oppenheimer Funds with respect to globalize your 212 00:11:26,040 --> 00:11:30,360 Speaker 5: thinking in twenty eleven when the campaign came out. 213 00:11:31,000 --> 00:11:32,280 Speaker 3: Oh so you were a messenger. 214 00:11:32,400 --> 00:11:35,120 Speaker 5: I was the messenger of this thing, and I kind 215 00:11:35,120 --> 00:11:38,800 Speaker 5: of diversified my portfolio based on that thinking. The idea 216 00:11:38,920 --> 00:11:44,200 Speaker 5: about portfolio construction with respect to diversification, isn't that diversification 217 00:11:44,400 --> 00:11:47,400 Speaker 5: is a bad thing. I think that's a right approach. 218 00:11:48,320 --> 00:11:53,040 Speaker 5: I think given the history over the last thirty forty years, 219 00:11:53,600 --> 00:11:56,280 Speaker 5: we are to think a bit more about are there 220 00:11:56,360 --> 00:11:59,960 Speaker 5: other drivers, rather than just simply believing in the historical 221 00:12:00,080 --> 00:12:03,800 Speaker 5: track record and the volatility context of that historical track record. 222 00:12:18,440 --> 00:12:20,920 Speaker 2: So I am very partial to the idea that a 223 00:12:20,920 --> 00:12:25,599 Speaker 2: big part of the story is the unique profitability of large. 224 00:12:25,360 --> 00:12:26,440 Speaker 1: Tech companies in the US. 225 00:12:26,679 --> 00:12:29,240 Speaker 2: But that is clearly not the only story, because it's 226 00:12:29,280 --> 00:12:34,000 Speaker 2: not just that global stocks have underperformed in many instances, 227 00:12:34,400 --> 00:12:37,720 Speaker 2: They've just performed badly against anything. I'm looking at a 228 00:12:37,920 --> 00:12:42,520 Speaker 2: chart of EWZ, a popular ETF to exposure to Brazil. 229 00:12:43,000 --> 00:12:47,319 Speaker 2: It's basically flat for twenty years. I assume the Brazilian 230 00:12:47,320 --> 00:12:50,120 Speaker 2: economy has grown quite a bit in the last twenty years, 231 00:12:50,360 --> 00:12:53,720 Speaker 2: but it has not redounded apparently to the benefit of 232 00:12:53,960 --> 00:12:57,120 Speaker 2: an American shareholder investing in Brazilian. 233 00:12:56,679 --> 00:12:57,439 Speaker 1: Stocks at all. 234 00:12:57,760 --> 00:13:00,440 Speaker 2: So obviously this can't be the entire st story that 235 00:13:00,520 --> 00:13:04,160 Speaker 2: it's just about US outperformance. It's actually that global stocks 236 00:13:04,160 --> 00:13:04,640 Speaker 2: have done bad. 237 00:13:04,679 --> 00:13:05,280 Speaker 1: What's going on? 238 00:13:05,320 --> 00:13:08,760 Speaker 2: Why in a world in which the economy is generally, 239 00:13:08,840 --> 00:13:12,480 Speaker 2: you know, more or less growing elsewhere, have international equities 240 00:13:12,480 --> 00:13:14,600 Speaker 2: actually just done bad on an objective basis. 241 00:13:14,840 --> 00:13:18,320 Speaker 5: The old adage is the economy is not the equity market. Yeah, yeah, 242 00:13:18,480 --> 00:13:21,839 Speaker 5: and that is that is absolutely true. I think the 243 00:13:22,720 --> 00:13:26,360 Speaker 5: period from let's say twenty ten onwards in the US 244 00:13:26,559 --> 00:13:29,400 Speaker 5: is especially galling. And I think if I had to 245 00:13:29,679 --> 00:13:32,040 Speaker 5: come up with a reason as to why that has 246 00:13:32,840 --> 00:13:34,680 Speaker 5: kind of worked out, the way it has worked out 247 00:13:35,160 --> 00:13:38,880 Speaker 5: is basically because of dollar related global flows. 248 00:13:39,080 --> 00:13:40,400 Speaker 1: Okay, that is I. 249 00:13:40,320 --> 00:13:44,800 Speaker 5: Think the profitability basically attracted a whole lot of things 250 00:13:44,800 --> 00:13:47,160 Speaker 5: that were going to come to a whole lot of 251 00:13:47,400 --> 00:13:49,720 Speaker 5: flows that were going to come to the US because 252 00:13:49,760 --> 00:13:52,600 Speaker 5: of the perceived strength of the dollar during that period. 253 00:13:52,640 --> 00:13:57,000 Speaker 5: Because as I said before, growth was higher than interest 254 00:13:57,040 --> 00:13:59,839 Speaker 5: rates in the US, so it was a natural kind 255 00:13:59,840 --> 00:14:02,560 Speaker 5: of place for those flows to kind of arrive at. 256 00:14:02,640 --> 00:14:05,280 Speaker 2: But like again another one, Mexico, it's just flat for 257 00:14:05,320 --> 00:14:08,560 Speaker 2: twenty years, so in your story, it's not quite flat 258 00:14:08,600 --> 00:14:10,280 Speaker 2: for two Yeah, it's where it was in two thousand 259 00:14:10,280 --> 00:14:12,840 Speaker 2: and seven, so it flat for like eighteen years. Like 260 00:14:12,920 --> 00:14:15,000 Speaker 2: there's a bit The flows are a big part of 261 00:14:15,000 --> 00:14:17,560 Speaker 2: the story. For the fact that these stocks can't deliver 262 00:14:17,640 --> 00:14:19,560 Speaker 2: anything over a decade time horizon. 263 00:14:19,920 --> 00:14:24,520 Speaker 5: Well, so I think domestic flows relative to international flows 264 00:14:25,120 --> 00:14:30,040 Speaker 5: are really very important in determining the state of the 265 00:14:30,160 --> 00:14:30,920 Speaker 5: equity market. 266 00:14:31,040 --> 00:14:31,280 Speaker 1: Okay. 267 00:14:31,400 --> 00:14:34,440 Speaker 5: And the best example counterpoint to what you're talking about 268 00:14:34,480 --> 00:14:35,440 Speaker 5: that I can give you. 269 00:14:35,720 --> 00:14:37,360 Speaker 1: Is really India. Okay. 270 00:14:37,960 --> 00:14:40,960 Speaker 5: So India used to be a market that was supported 271 00:14:41,200 --> 00:14:46,840 Speaker 5: entirely by foreign flows and foreign flows, and when there 272 00:14:46,920 --> 00:14:49,400 Speaker 5: was a panic in New York, all sorts of money 273 00:14:49,440 --> 00:14:51,480 Speaker 5: would leave India and come here and the stock market 274 00:14:51,480 --> 00:14:55,120 Speaker 5: would create. Over the last let's say ten years, as 275 00:14:55,200 --> 00:14:59,520 Speaker 5: the Indian economy took off, and financialization and the saving 276 00:14:59,640 --> 00:15:03,480 Speaker 5: vehicle in India change, and the equity market as opposed 277 00:15:03,480 --> 00:15:08,200 Speaker 5: to land and property became the primary source of savings 278 00:15:08,200 --> 00:15:12,480 Speaker 5: and deployment of those savings. I think the characteristic capital depth, yes, 279 00:15:12,560 --> 00:15:15,880 Speaker 5: capital get financialization of the economy, and right now, the 280 00:15:16,040 --> 00:15:18,200 Speaker 5: drivers in the Indian equity market, at least for the 281 00:15:18,280 --> 00:15:22,440 Speaker 5: last five years, really has been the domestic investors as 282 00:15:22,520 --> 00:15:25,640 Speaker 5: opposed to foreign investors. So I think that is really 283 00:15:25,680 --> 00:15:29,200 Speaker 5: the from a flow standpoint, that is the difference. 284 00:15:29,480 --> 00:15:31,760 Speaker 3: Yeah, And if you look at the MSCI India Index, 285 00:15:31,800 --> 00:15:32,240 Speaker 3: it's like. 286 00:15:32,360 --> 00:15:34,520 Speaker 1: The exact act looks like it's done well. 287 00:15:35,000 --> 00:15:37,600 Speaker 3: Mexico and Brazil Joe, you know what I always say 288 00:15:38,320 --> 00:15:40,280 Speaker 3: I do. Are you going to say it? 289 00:15:40,400 --> 00:15:43,440 Speaker 2: I want you to say it flows before pros. 290 00:15:43,560 --> 00:15:46,120 Speaker 3: Yeah, he did it, all right. That makes me happy. 291 00:15:46,120 --> 00:15:48,360 Speaker 2: By the way, I stole Tracy's joke in the intro, 292 00:15:48,720 --> 00:15:50,920 Speaker 2: She's not happy about that. I said that thing about 293 00:15:50,960 --> 00:15:55,200 Speaker 2: how Shakespeare. Tracy said that right before we went on air. 294 00:15:55,240 --> 00:15:56,120 Speaker 2: I want to give her credit. 295 00:15:56,200 --> 00:15:59,080 Speaker 3: Oh thank you, Joe. But now I feel petty. I 296 00:15:59,080 --> 00:16:02,600 Speaker 3: didn't expect you to, Okay, going back to the conversation. 297 00:16:02,840 --> 00:16:04,840 Speaker 2: I'm trying to make you feel petty. You made me 298 00:16:04,880 --> 00:16:06,880 Speaker 2: feel bad, so now I'm trying to make you feel petty. 299 00:16:07,240 --> 00:16:09,720 Speaker 3: All right, all right, fair, going back to the conversation. 300 00:16:10,200 --> 00:16:12,080 Speaker 3: Can you talk a little bit more about the role 301 00:16:12,120 --> 00:16:14,440 Speaker 3: of the benchmark index providers in all of this. 302 00:16:14,960 --> 00:16:19,240 Speaker 5: The thinking in this world is always benchmarks are terrible, 303 00:16:20,120 --> 00:16:23,360 Speaker 5: but they're terrible, but better than anything. 304 00:16:23,080 --> 00:16:23,720 Speaker 1: Else that we have. 305 00:16:24,320 --> 00:16:27,280 Speaker 5: So I think there is a role for benchmarks, and 306 00:16:27,320 --> 00:16:31,120 Speaker 5: benchmark providers are important participants in the market. And you know, 307 00:16:31,240 --> 00:16:35,640 Speaker 5: the market capitalization of companies like MSCI and SMT Global 308 00:16:36,040 --> 00:16:38,480 Speaker 5: kind of tell you as to how valuable that those 309 00:16:38,480 --> 00:16:42,600 Speaker 5: franchises are. The way, as an investor, you know, if 310 00:16:42,640 --> 00:16:45,760 Speaker 5: you are an asset manager or if you are kind 311 00:16:45,800 --> 00:16:49,360 Speaker 5: of an asset allocator, you know, how you are doing 312 00:16:49,640 --> 00:16:52,840 Speaker 5: has to be evaluated in some sort of a rigorous framework, 313 00:16:53,520 --> 00:16:56,240 Speaker 5: and that's where benchmarks come in. And that's why we 314 00:16:56,320 --> 00:16:58,760 Speaker 5: need benchmarks, because otherwise it'll be free for all. You know, 315 00:16:59,120 --> 00:17:01,680 Speaker 5: I can as a asset allocator, I can you know 316 00:17:01,920 --> 00:17:05,159 Speaker 5: my returns were ten percent. Let's say I can always 317 00:17:05,200 --> 00:17:07,639 Speaker 5: claim that I did a fabulous job when my benchmark 318 00:17:08,600 --> 00:17:12,480 Speaker 5: outperformed by you know, a thousand basis points. So it's 319 00:17:12,480 --> 00:17:16,000 Speaker 5: a you know, there is tyranny of benchmark, but this 320 00:17:16,080 --> 00:17:19,560 Speaker 5: is a necessary tool that we need. I think a 321 00:17:19,640 --> 00:17:24,440 Speaker 5: separate question is the extent of the kind of the 322 00:17:24,480 --> 00:17:29,280 Speaker 5: diversification of the of the benchmarks. So you talked about 323 00:17:29,440 --> 00:17:35,119 Speaker 5: MSCI AQUI and even things like Russell three thousand, things 324 00:17:35,200 --> 00:17:38,359 Speaker 5: like that, So there are issues with diversification. I think 325 00:17:38,920 --> 00:17:40,840 Speaker 5: S and P five hundred. On the other hand, for 326 00:17:40,880 --> 00:17:44,159 Speaker 5: the large gap US market is a very very solid benchmark. 327 00:17:44,240 --> 00:17:47,800 Speaker 5: I mean there are peculiarities with respect to additions and 328 00:17:47,960 --> 00:17:50,119 Speaker 5: taking out of the index, but I think that is 329 00:17:50,160 --> 00:17:52,840 Speaker 5: to be expected in a dynamic market, and I think 330 00:17:53,320 --> 00:17:56,520 Speaker 5: for most, for the most part, it has worked out 331 00:17:56,840 --> 00:17:57,640 Speaker 5: reasonably well. 332 00:17:57,880 --> 00:18:00,719 Speaker 2: You are an employed person. You have had a career 333 00:18:01,080 --> 00:18:05,479 Speaker 2: despite imbibing the gospel of diversification. You have had a 334 00:18:05,600 --> 00:18:07,200 Speaker 2: successful career. 335 00:18:07,000 --> 00:18:07,720 Speaker 1: In the markets. 336 00:18:07,960 --> 00:18:11,760 Speaker 2: Talk to us though about like your peers and career risk, 337 00:18:12,000 --> 00:18:15,280 Speaker 2: et cetera. Because you know, at some point, like you 338 00:18:15,480 --> 00:18:18,200 Speaker 2: keep making less money than you could have by buying 339 00:18:18,480 --> 00:18:21,080 Speaker 2: the US What does that do and what have you seen? 340 00:18:21,280 --> 00:18:24,359 Speaker 2: You know, when you look across the industry, do you 341 00:18:24,480 --> 00:18:28,080 Speaker 2: see an evolution whereby people who were taught the same 342 00:18:28,080 --> 00:18:32,720 Speaker 2: thing as you about diversification have increasingly felt pressure to 343 00:18:32,800 --> 00:18:36,359 Speaker 2: not be diversification or to disguise their diversification in some 344 00:18:36,359 --> 00:18:39,119 Speaker 2: way that they could tell their investment committee, we're diversified, 345 00:18:39,160 --> 00:18:41,159 Speaker 2: but actually, like we just found a way to like 346 00:18:41,240 --> 00:18:42,280 Speaker 2: go extra long Nvidia. 347 00:18:42,840 --> 00:18:46,960 Speaker 5: I think in the institutional world as opposed to retail war, yeah, 348 00:18:47,320 --> 00:18:50,520 Speaker 5: I think diversification is still the matter. And again to 349 00:18:50,680 --> 00:18:53,040 Speaker 5: emphasize that it is the right thing to do. 350 00:18:53,119 --> 00:18:54,159 Speaker 1: But why do you keep saying that. 351 00:18:54,320 --> 00:18:57,239 Speaker 5: If you think about it in statistical terms, you know 352 00:18:57,359 --> 00:19:01,439 Speaker 5: there is a way to diversify the tail risk. But 353 00:19:01,560 --> 00:19:04,520 Speaker 5: what I'm saying is we need to evaluate that and 354 00:19:04,600 --> 00:19:07,480 Speaker 5: see or re evaluate that and see if there are 355 00:19:07,560 --> 00:19:10,920 Speaker 5: some other techniques and methodologies that we can use where 356 00:19:11,240 --> 00:19:14,840 Speaker 5: this doesn't become the only way for you to mitigate 357 00:19:14,880 --> 00:19:16,520 Speaker 5: your overall risk in the portfolio. 358 00:19:16,760 --> 00:19:19,560 Speaker 3: So what would be another technique methodology? 359 00:19:20,000 --> 00:19:23,920 Speaker 5: Evaluating from a track record standpoint, let's say, or from 360 00:19:23,920 --> 00:19:28,359 Speaker 5: a performance standpoint, let's say, does adding emerging markets to 361 00:19:29,240 --> 00:19:33,280 Speaker 5: a globally diversified portfolio? Does that really add a lot 362 00:19:33,320 --> 00:19:37,320 Speaker 5: of value to the process. Does just a let's say 363 00:19:37,720 --> 00:19:41,800 Speaker 5: development market index both the US and Europe and perhaps Japan? 364 00:19:42,200 --> 00:19:46,120 Speaker 5: Can that deliver some level of correlation to the overall 365 00:19:46,160 --> 00:19:49,960 Speaker 5: index without you being stuck in places like China for 366 00:19:50,000 --> 00:19:52,560 Speaker 5: a long period of time, or Brazil or Mexico for 367 00:19:53,560 --> 00:19:57,119 Speaker 5: that matter. So I haven't found the solution. If I 368 00:19:57,119 --> 00:20:00,320 Speaker 5: had found the solution, I would have implemented that in 369 00:20:00,320 --> 00:20:03,280 Speaker 5: my personal portfolio. My point is we ought to think 370 00:20:03,280 --> 00:20:06,200 Speaker 5: about that, and we don't really think about it because 371 00:20:06,400 --> 00:20:10,399 Speaker 5: diversification on a global basis has been the mantra and 372 00:20:10,600 --> 00:20:12,440 Speaker 5: the accepted doctrine forever. 373 00:20:13,280 --> 00:20:15,280 Speaker 1: But say more about the careerrisk. 374 00:20:15,320 --> 00:20:20,160 Speaker 2: Okay, at the institutional level, they're fine, It's like, oh yeah, diversification, 375 00:20:20,760 --> 00:20:23,600 Speaker 2: But you know, for example, I'm always a big fan 376 00:20:23,760 --> 00:20:26,760 Speaker 2: of reading the Bank of America Fund Manager survey every month, 377 00:20:26,880 --> 00:20:30,040 Speaker 2: and these are discretionary fund managers that could do everything 378 00:20:30,160 --> 00:20:33,320 Speaker 2: and for like ten years with a few exceptions, and 379 00:20:33,440 --> 00:20:36,879 Speaker 2: there they say long textocks is the most crowded trade, 380 00:20:37,440 --> 00:20:40,440 Speaker 2: but also it's the trade that continues to work. Talk 381 00:20:40,480 --> 00:20:44,440 Speaker 2: about this effect, this sort of the anti diversification success 382 00:20:45,040 --> 00:20:48,680 Speaker 2: on the sort of thinking of a fund manager who 383 00:20:48,680 --> 00:20:51,440 Speaker 2: probably doesn't love being in a crowded trade, but also 384 00:20:51,520 --> 00:20:53,040 Speaker 2: doesn't want to underperform well. 385 00:20:53,119 --> 00:20:59,000 Speaker 5: So I think an active manager is a kind of 386 00:20:59,280 --> 00:21:02,359 Speaker 5: caught in a way. Right On the one hand, you know, 387 00:21:02,400 --> 00:21:05,879 Speaker 5: you have to outperform your peers. On the other you 388 00:21:05,960 --> 00:21:10,360 Speaker 5: have to outperform the benchmark, and that is a challenge, 389 00:21:10,680 --> 00:21:13,600 Speaker 5: and that challenge leads to the sort of things that 390 00:21:13,680 --> 00:21:16,280 Speaker 5: you are talking about. That is, well, they may do 391 00:21:16,640 --> 00:21:20,520 Speaker 5: very well relative to the benchmark without crowding into the 392 00:21:20,520 --> 00:21:24,239 Speaker 5: most crowded trades, but if their competitors are crowded in 393 00:21:24,280 --> 00:21:27,119 Speaker 5: there and do much much better than them, that's an 394 00:21:27,240 --> 00:21:29,760 Speaker 5: issue for them. So you know, that's their way of 395 00:21:29,880 --> 00:21:36,000 Speaker 5: solving that particular challenge. I think the the the crowded 396 00:21:36,119 --> 00:21:39,760 Speaker 5: trades are have been there for a long period of time. 397 00:21:39,800 --> 00:21:42,639 Speaker 5: But I think the way I would evaluate that is 398 00:21:43,119 --> 00:21:47,680 Speaker 5: how much of a portfolio manager's performance is really driven by, 399 00:21:48,440 --> 00:21:52,879 Speaker 5: you know, the core views that they express as to 400 00:21:52,920 --> 00:21:56,920 Speaker 5: what their edge is, Right, I don't understand so what 401 00:21:56,960 --> 00:21:59,359 Speaker 5: that You know, every portfolio manager would tell you that 402 00:21:59,400 --> 00:22:04,640 Speaker 5: their stra is we look at roc and that's what 403 00:22:04,720 --> 00:22:07,960 Speaker 5: we focus on, and therefore that's how we kind of 404 00:22:08,000 --> 00:22:12,280 Speaker 5: structure our portfolio to pick companies individually. 405 00:22:12,400 --> 00:22:12,640 Speaker 2: Yeah. 406 00:22:13,160 --> 00:22:15,760 Speaker 5: Now if they say that thing and they are kind 407 00:22:15,800 --> 00:22:19,320 Speaker 5: of focused on and that's how I hired them, Yeah, 408 00:22:19,440 --> 00:22:23,800 Speaker 5: and instead they focus on getting into let's say crowded 409 00:22:23,880 --> 00:22:26,720 Speaker 5: trades because they are going up, then that's really a 410 00:22:26,800 --> 00:22:28,639 Speaker 5: red flag from analogat. 411 00:22:29,640 --> 00:22:32,719 Speaker 3: So Joe alluded to this in the intro. But you know, 412 00:22:32,800 --> 00:22:36,800 Speaker 3: if you were diversified into international stocks, there was well, 413 00:22:36,880 --> 00:22:39,320 Speaker 3: there were a couple moments this year where you actually 414 00:22:39,320 --> 00:22:42,880 Speaker 3: looked really smart and you did get a little bit 415 00:22:42,880 --> 00:22:44,400 Speaker 3: of peace of mind as the S and P five 416 00:22:44,480 --> 00:22:47,960 Speaker 3: hundred was selling off. You know, European equities were surging 417 00:22:48,000 --> 00:22:50,800 Speaker 3: earlier in the year. But what do you need to 418 00:22:50,880 --> 00:22:56,440 Speaker 3: see for a durable change in international versus US stocks 419 00:22:56,440 --> 00:22:58,159 Speaker 3: and specifically US tech stocks? 420 00:22:59,119 --> 00:23:04,080 Speaker 5: Well, so I think the underlying economic environment has to 421 00:23:04,280 --> 00:23:10,720 Speaker 5: change for that dynamic. Actually underlying economic and industrial environment 422 00:23:10,880 --> 00:23:14,000 Speaker 5: has to change dramatically for that to kind of play out. 423 00:23:14,480 --> 00:23:19,320 Speaker 5: So if you look at the world from a capitalization standpoint, 424 00:23:19,359 --> 00:23:22,359 Speaker 5: what we are talking about is US on one side, 425 00:23:22,400 --> 00:23:27,280 Speaker 5: and Europe, you know, Japan, India, and China, Brazil, those 426 00:23:27,359 --> 00:23:29,080 Speaker 5: are really the places that we. 427 00:23:29,040 --> 00:23:29,640 Speaker 1: Are talking about. 428 00:23:30,240 --> 00:23:35,800 Speaker 5: So structurally, you know, US economy has done better. The 429 00:23:36,359 --> 00:23:40,040 Speaker 5: dollar is the reserve currency, and the growth outlook over 430 00:23:40,280 --> 00:23:42,800 Speaker 5: the last ten years have been much better in the 431 00:23:42,920 --> 00:23:46,280 Speaker 5: US than it has been, so the flows coming into 432 00:23:46,320 --> 00:23:50,400 Speaker 5: the US ought not to be a surprise in that environment, okay, right, 433 00:23:50,680 --> 00:23:54,119 Speaker 5: And for flows to go the other way, you know, basically, 434 00:23:54,840 --> 00:23:58,159 Speaker 5: the fiscal expansion in Europe has to get going in 435 00:23:58,200 --> 00:24:02,640 Speaker 5: a massive way, and that fiscal expansion has to lead 436 00:24:02,720 --> 00:24:08,760 Speaker 5: to companies and the institutions that can take advantage of 437 00:24:08,800 --> 00:24:13,399 Speaker 5: that fiscal expansion and and therefore deliver superior returns to 438 00:24:13,520 --> 00:24:16,680 Speaker 5: their shareholders. And therefore I've been interested in buying those companies. 439 00:24:36,440 --> 00:24:40,199 Speaker 2: Tracy, do you know how much without looking the decks 440 00:24:40,280 --> 00:24:43,000 Speaker 2: Germany's benchmark index, do you know how much it's up 441 00:24:43,040 --> 00:24:43,760 Speaker 2: in dollar terms? 442 00:24:43,760 --> 00:24:44,160 Speaker 1: This year. 443 00:24:44,560 --> 00:24:46,960 Speaker 3: I do not, although I will confess I have a 444 00:24:47,760 --> 00:24:51,199 Speaker 3: chart of the MSCI all world versus the S and 445 00:24:51,200 --> 00:24:51,879 Speaker 3: P five hundred. 446 00:24:52,080 --> 00:24:54,080 Speaker 1: Yes, but take a guest. 447 00:24:54,040 --> 00:24:54,680 Speaker 3: I have no idea. 448 00:24:54,760 --> 00:24:59,639 Speaker 2: Tell me, Wow, the German stocks in dollar terms of 449 00:25:00,000 --> 00:25:04,359 Speaker 2: forty two percent this year, France up seventeen and a 450 00:25:04,400 --> 00:25:07,959 Speaker 2: half percent dollar terms, neurostocks fifty up twenty two percent. 451 00:25:08,359 --> 00:25:11,280 Speaker 2: I mean, this is serious, and this is like, these 452 00:25:11,280 --> 00:25:14,080 Speaker 2: are numbers that we're really not used to seeing in 453 00:25:14,119 --> 00:25:18,000 Speaker 2: me and Tracy's entire career, this kind of divergence because 454 00:25:18,040 --> 00:25:20,240 Speaker 2: as of the time we're talking about, the US benchmarks 455 00:25:20,240 --> 00:25:22,440 Speaker 2: are actually flat on the air, which is pretty impressive actually, 456 00:25:22,520 --> 00:25:25,760 Speaker 2: given where they were a month ago. Like, at what 457 00:25:25,880 --> 00:25:28,480 Speaker 2: point you're like, this is a seed change? 458 00:25:28,680 --> 00:25:29,520 Speaker 1: What would it take? 459 00:25:30,320 --> 00:25:33,800 Speaker 2: Not from an economic standpoint, but like, you know, what 460 00:25:33,840 --> 00:25:36,240 Speaker 2: does it take for the other fund managers around the 461 00:25:36,280 --> 00:25:39,119 Speaker 2: world to like, oh I believe in I mean, I 462 00:25:39,119 --> 00:25:41,600 Speaker 2: don't start with is this the seed change here or not? 463 00:25:41,680 --> 00:25:42,240 Speaker 1: In your view? 464 00:25:42,520 --> 00:25:46,359 Speaker 5: Well, so you know, again these are spectacular returns, yeah, 465 00:25:46,400 --> 00:25:49,120 Speaker 5: and definitely spectacular relative returns. 466 00:25:49,200 --> 00:25:53,000 Speaker 2: Yeah, it almost to give some spectacular objective returns. 467 00:25:53,040 --> 00:25:55,080 Speaker 1: It's only may. But anyway, keep going. 468 00:25:54,880 --> 00:25:58,040 Speaker 5: And you know, a lot of these returns are dollar 469 00:25:58,119 --> 00:26:02,400 Speaker 5: driven as well. Yeah, so significant portion is really the thing, 470 00:26:02,480 --> 00:26:05,040 Speaker 5: and a lot of it is because of the upcoming 471 00:26:05,080 --> 00:26:07,479 Speaker 5: fiscal expansion in Germany. 472 00:26:07,600 --> 00:26:09,920 Speaker 1: Yeah okay, So for this to. 473 00:26:09,920 --> 00:26:13,720 Speaker 5: Be sustainable in the long run, I think the economic 474 00:26:13,840 --> 00:26:17,399 Speaker 5: picture for the for the CONTINENTAH has to change. 475 00:26:17,480 --> 00:26:17,600 Speaker 4: Men. 476 00:26:18,119 --> 00:26:22,359 Speaker 2: You know, by the way, just the Bovespa, the Brazilian 477 00:26:22,400 --> 00:26:25,560 Speaker 2: stock market is up twenty five percent in dollar terms. 478 00:26:25,720 --> 00:26:28,640 Speaker 2: Chilean stocks, which have never looked at it, but it's 479 00:26:28,720 --> 00:26:30,760 Speaker 2: right here when I go to the WI page on 480 00:26:30,800 --> 00:26:33,520 Speaker 2: the terminal, that's thirty two percent. It's not even I 481 00:26:33,520 --> 00:26:35,840 Speaker 2: actually hadn't quite realized this. It's not even just a 482 00:26:35,880 --> 00:26:39,040 Speaker 2: Europe story. Later Am too is actually in dollar terms 483 00:26:39,119 --> 00:26:40,080 Speaker 2: having a phenomenal year. 484 00:26:40,320 --> 00:26:46,760 Speaker 5: The confluence of dollar weakness, tariffs, Yeah, you know, those 485 00:26:46,800 --> 00:26:49,840 Speaker 5: are really the things that have kind of had an 486 00:26:49,840 --> 00:26:53,000 Speaker 5: impact on dollarized returns. 487 00:26:53,080 --> 00:26:53,320 Speaker 1: Yeah. 488 00:26:53,760 --> 00:26:57,480 Speaker 5: If they remain sustainable, then it will be worthwhile looking 489 00:26:57,480 --> 00:26:59,119 Speaker 5: into those markets and the. 490 00:26:58,960 --> 00:27:00,720 Speaker 1: Thesis would be proven. 491 00:27:01,640 --> 00:27:04,600 Speaker 5: But we have also had episodes where we have had 492 00:27:05,000 --> 00:27:09,119 Speaker 5: these types of moves and pretty soon in six months, 493 00:27:09,119 --> 00:27:11,000 Speaker 5: a couple of years, you give back all of these 494 00:27:12,080 --> 00:27:14,080 Speaker 5: spectacular relative returns. 495 00:27:14,200 --> 00:27:18,240 Speaker 3: But if the argument is diversification is good for protecting 496 00:27:18,320 --> 00:27:22,400 Speaker 3: you from tail risks, then you know, what's been happening 497 00:27:22,600 --> 00:27:25,639 Speaker 3: this year, specifically in April, seems like a pretty big 498 00:27:25,680 --> 00:27:28,520 Speaker 3: tail risk, and diversification worked. 499 00:27:28,840 --> 00:27:32,679 Speaker 5: In this case. Absolutely diversification worked. The question is, is 500 00:27:32,720 --> 00:27:37,920 Speaker 5: the diversification or the relative performance of European markets and 501 00:27:37,960 --> 00:27:42,159 Speaker 5: the rest of the world. Is it all concentrated in, 502 00:27:42,880 --> 00:27:44,880 Speaker 5: you know, in a very short period of time? 503 00:27:45,680 --> 00:27:46,760 Speaker 1: What do I mean by that? 504 00:27:47,040 --> 00:27:50,840 Speaker 5: I think the if the expectation is that the US, 505 00:27:50,880 --> 00:27:54,119 Speaker 5: because of tariffs and all sorts of policy responses, the 506 00:27:54,720 --> 00:27:58,760 Speaker 5: things that drove the dollar and the flows into the 507 00:27:58,920 --> 00:28:04,080 Speaker 5: US go away on a sustained basis, the trend will 508 00:28:04,080 --> 00:28:10,760 Speaker 5: probably persist. I would posit that that probably isn't, or 509 00:28:10,760 --> 00:28:14,119 Speaker 5: at least that probably isn't a very realistic scenario at 510 00:28:14,119 --> 00:28:14,760 Speaker 5: this point. 511 00:28:14,920 --> 00:28:18,879 Speaker 3: What time frame should you be judging diversification success on? 512 00:28:20,640 --> 00:28:24,880 Speaker 5: Actually, that's a really good question. So successive diversification, from 513 00:28:24,920 --> 00:28:27,800 Speaker 5: my mind, has to be evaluated over a reasonably long 514 00:28:27,840 --> 00:28:33,000 Speaker 5: period of time, So five, ten years, even twenty thirty years, 515 00:28:33,040 --> 00:28:35,040 Speaker 5: I think those are the timeframes that you have to 516 00:28:35,359 --> 00:28:39,040 Speaker 5: evaluate it on, so that everything that has you know, 517 00:28:39,240 --> 00:28:42,640 Speaker 5: everything economically has had an opportunity to play itself out, 518 00:28:42,960 --> 00:28:45,560 Speaker 5: and all we are talking about is the security specific 519 00:28:45,640 --> 00:28:50,160 Speaker 5: volatility for individual securities that benefits from this diversification. So 520 00:28:50,440 --> 00:28:52,640 Speaker 5: I think it has to be evaluated over a long 521 00:28:52,640 --> 00:28:55,440 Speaker 5: period of time. And that's why when it hasn't really 522 00:28:55,520 --> 00:28:59,200 Speaker 5: performed for as long period as it has not, despite 523 00:28:59,240 --> 00:29:02,640 Speaker 5: their recent perform moments, the point I would make is, 524 00:29:02,680 --> 00:29:04,560 Speaker 5: let's kind of think about that a little bit and 525 00:29:04,880 --> 00:29:06,680 Speaker 5: look at why that has been the case. 526 00:29:07,000 --> 00:29:09,920 Speaker 2: Wait, I want to make a counter argument, why shouldn't 527 00:29:09,920 --> 00:29:13,920 Speaker 2: we evaluate a tail risk hedge, which implicitly is what 528 00:29:13,960 --> 00:29:18,800 Speaker 2: diversification seems to offer in just very short term, because 529 00:29:18,880 --> 00:29:23,200 Speaker 2: like in March twenty twenty, there was a possibility, you know, 530 00:29:23,280 --> 00:29:25,640 Speaker 2: the economy could have unraveled further, I could have lost 531 00:29:25,680 --> 00:29:27,440 Speaker 2: my job, I would have been on the hook for 532 00:29:27,480 --> 00:29:30,360 Speaker 2: paying for my own health insurance and so forth. I 533 00:29:30,480 --> 00:29:33,560 Speaker 2: was very excited in that moment that RACH went to 534 00:29:33,640 --> 00:29:35,840 Speaker 2: zero and the bond portion of my poor one K 535 00:29:36,000 --> 00:29:38,760 Speaker 2: or whatever shot up, right, that actually helped me in 536 00:29:38,800 --> 00:29:42,760 Speaker 2: an acute moment. There's obviously, you know, we haven't hit 537 00:29:42,760 --> 00:29:46,600 Speaker 2: a recession yet in the US. In those acute moments 538 00:29:46,640 --> 00:29:48,880 Speaker 2: where there's suddenly a risk and your sort of your 539 00:29:48,920 --> 00:29:52,960 Speaker 2: career is correlated to your portfolio. Can't it be enough 540 00:29:53,000 --> 00:29:55,280 Speaker 2: for diversification just to pay off in the short term. 541 00:29:55,360 --> 00:29:57,600 Speaker 5: Okay, So let's kind of make sure that we are 542 00:29:57,640 --> 00:30:02,200 Speaker 5: talking about the same diversification. Okay, so you know, diversification 543 00:30:02,320 --> 00:30:06,600 Speaker 5: between equities and bonds. I think that from a risk 544 00:30:06,680 --> 00:30:12,080 Speaker 5: management perspective, because of different volatility characteristics of the two instruments, 545 00:30:12,480 --> 00:30:14,120 Speaker 5: that is still very much valid. 546 00:30:14,280 --> 00:30:14,560 Speaker 1: Okay. 547 00:30:14,840 --> 00:30:18,720 Speaker 5: You know, one has you know, double digit volatility, the 548 00:30:18,760 --> 00:30:21,880 Speaker 5: other has five six percent, and they react in the 549 00:30:22,160 --> 00:30:25,880 Speaker 5: you know, in different economic environments, you know, very very differently, 550 00:30:26,320 --> 00:30:29,200 Speaker 5: So that is that is valid. I think what we 551 00:30:29,240 --> 00:30:33,040 Speaker 5: are talking about is really international diversifity. Yes, And if 552 00:30:33,080 --> 00:30:36,360 Speaker 5: you look at the correlations of international equities relative to 553 00:30:37,680 --> 00:30:42,040 Speaker 5: US domestic equities, correlation is very very high. So it's 554 00:30:42,360 --> 00:30:46,280 Speaker 5: it's giving you, it's giving you some diversification benefit, but 555 00:30:46,360 --> 00:30:49,800 Speaker 5: it is not giving you the level of diversification benefit 556 00:30:49,880 --> 00:30:50,880 Speaker 5: that you think you are getting. 557 00:30:51,560 --> 00:30:54,840 Speaker 3: Have you done anything in your own portfolios to take 558 00:30:54,880 --> 00:30:57,840 Speaker 3: into account some of these thoughts over diversification. 559 00:30:58,520 --> 00:31:01,680 Speaker 5: So I've been a victim of this diversification because I 560 00:31:01,800 --> 00:31:06,800 Speaker 5: constructed my portfolio and I have posted this on Twitter 561 00:31:06,880 --> 00:31:10,480 Speaker 5: for everyone to see, which is you know, I have 562 00:31:10,680 --> 00:31:13,880 Speaker 5: bought you know, international small cap, and I bought US 563 00:31:13,960 --> 00:31:18,280 Speaker 5: small cap, and I bought developing markets, and so I 564 00:31:18,360 --> 00:31:22,400 Speaker 5: have constructed a portfolio in a very diversified way. It 565 00:31:22,480 --> 00:31:24,880 Speaker 5: has worked out fine, but it could have worked out 566 00:31:24,920 --> 00:31:28,080 Speaker 5: a lot better. For that, am I doing something relative 567 00:31:28,120 --> 00:31:32,400 Speaker 5: to you know that? I think the thinking with respect 568 00:31:32,480 --> 00:31:37,959 Speaker 5: to that has to be about some valuation context in 569 00:31:38,000 --> 00:31:40,760 Speaker 5: the environment. So if you were going after sticking with 570 00:31:40,840 --> 00:31:43,600 Speaker 5: it for thirty years, if you were going to flip 571 00:31:43,640 --> 00:31:47,520 Speaker 5: that switch, doing it when US markets are the most 572 00:31:47,560 --> 00:31:50,480 Speaker 5: expensive probably isn't the right thing to do, But that 573 00:31:50,560 --> 00:31:55,040 Speaker 5: doesn't take away us thinking about what the drivers of 574 00:31:55,080 --> 00:31:56,200 Speaker 5: that when that is. 575 00:31:56,120 --> 00:31:56,760 Speaker 1: Not the case. 576 00:31:56,840 --> 00:31:59,000 Speaker 3: I see, so that. 577 00:31:59,080 --> 00:32:02,640 Speaker 5: When the opportunity comes back, we are kind of thinking 578 00:32:02,640 --> 00:32:05,040 Speaker 5: about it the right way rather than just sticking to 579 00:32:05,120 --> 00:32:06,880 Speaker 5: the mantra that we have thought about for the last 580 00:32:06,880 --> 00:32:07,520 Speaker 5: thirty years. 581 00:32:08,040 --> 00:32:10,800 Speaker 2: If you flip and suddenly you're like, you know what, 582 00:32:10,880 --> 00:32:14,479 Speaker 2: everything I was taught I was wrong and I'm going 583 00:32:14,560 --> 00:32:17,360 Speaker 2: to lean more heavily into the US. Will you let 584 00:32:17,400 --> 00:32:21,440 Speaker 2: everyone know so that then we can then diversify exposure, Like, 585 00:32:21,720 --> 00:32:25,480 Speaker 2: will you put out that alert I've finally caved. I've 586 00:32:25,520 --> 00:32:29,080 Speaker 2: finally caved. I finally don't believe anything I learned in 587 00:32:29,080 --> 00:32:31,360 Speaker 2: school because maybe the rest of us can use that 588 00:32:31,400 --> 00:32:33,520 Speaker 2: as an opportunity to go heavy into EEM. 589 00:32:34,920 --> 00:32:38,880 Speaker 5: Sounds like a good idea. I'll be I'll be again, 590 00:32:38,960 --> 00:32:43,280 Speaker 5: as I said school on whichever platform I kind of 591 00:32:43,360 --> 00:32:47,480 Speaker 5: put that out, you know, as an investor who has 592 00:32:47,560 --> 00:32:51,760 Speaker 5: kind of stuck with this for almost forty years, Yeah, 593 00:32:51,880 --> 00:32:55,480 Speaker 5: it has been a challenge, and what I am doing 594 00:32:55,600 --> 00:32:59,320 Speaker 5: is acknowledging that challenge. That is, the lack of correlation 595 00:32:59,480 --> 00:33:03,680 Speaker 5: that we were expecting from international aquities hasn't worked out. 596 00:33:04,080 --> 00:33:04,520 Speaker 1: That's it. 597 00:33:05,240 --> 00:33:08,320 Speaker 2: But just on this point, and you've been in a 598 00:33:08,360 --> 00:33:12,400 Speaker 2: few different seats, how do you you know, what do 599 00:33:12,440 --> 00:33:16,640 Speaker 2: you have to do career wise to maintain that discipline 600 00:33:16,640 --> 00:33:18,600 Speaker 2: because this is a big thing, right, career risk in 601 00:33:18,640 --> 00:33:20,959 Speaker 2: any seat and they're different. You know, some people are 602 00:33:20,960 --> 00:33:24,120 Speaker 2: on a very short leache at a big institution that 603 00:33:24,240 --> 00:33:27,320 Speaker 2: has longevity of over a century, maybe of long leash, 604 00:33:27,440 --> 00:33:30,840 Speaker 2: et cetera. What is you know, how does career risk 605 00:33:30,960 --> 00:33:34,640 Speaker 2: and career longevity play into this type of thing? 606 00:33:35,200 --> 00:33:39,600 Speaker 5: Well, so you know, again you have to distinguish between 607 00:33:39,680 --> 00:33:42,560 Speaker 5: the type of investors you are. So if you are 608 00:33:42,600 --> 00:33:47,280 Speaker 5: an asset class investor and your mandate is international investing, 609 00:33:47,760 --> 00:33:51,680 Speaker 5: international may not have done well relative to domestic investing, 610 00:33:52,000 --> 00:33:54,800 Speaker 5: but somebody allocated money to you and they're looking for 611 00:33:54,880 --> 00:33:57,880 Speaker 5: you to do better than international benchmarks, and your peers 612 00:33:57,880 --> 00:34:00,920 Speaker 5: in doing the same thing, so they're career risk is 613 00:34:00,960 --> 00:34:04,040 Speaker 5: really not direct. The career risk is in terms of flows. 614 00:34:04,520 --> 00:34:07,000 Speaker 5: That is, if if you had a global mandate or 615 00:34:07,040 --> 00:34:08,880 Speaker 5: an international mandate. 616 00:34:08,880 --> 00:34:11,640 Speaker 2: You know the the So it's not like you're getting 617 00:34:11,680 --> 00:34:12,680 Speaker 2: fired from nder performance. 618 00:34:12,680 --> 00:34:15,319 Speaker 1: It's just that no one allocates, no one allocated, got it. 619 00:34:16,520 --> 00:34:19,600 Speaker 5: If you are an allocator, then you know it's it's 620 00:34:19,680 --> 00:34:23,719 Speaker 5: kind of the performance is relative to your benchmark, and 621 00:34:23,760 --> 00:34:26,759 Speaker 5: your benchmark that's how you are evaluated, and your benchmark 622 00:34:26,840 --> 00:34:30,239 Speaker 5: is for the for most institutional portfolios, it's still very 623 00:34:30,320 --> 00:34:32,960 Speaker 5: much MSCI acued for the equity component. 624 00:34:34,719 --> 00:34:37,799 Speaker 2: Christian MoManI, that seems like a really key point. As 625 00:34:37,880 --> 00:34:42,720 Speaker 2: long as that the benchmark, some institutional allocation will survive. 626 00:34:43,160 --> 00:34:45,640 Speaker 2: Really appreciate you coming on odd lots. We're all going 627 00:34:45,719 --> 00:34:47,720 Speaker 2: to be looking out for that tweet when you decide 628 00:34:47,760 --> 00:34:49,560 Speaker 2: to go into meg seven. 629 00:34:49,920 --> 00:34:50,759 Speaker 1: Yeah sounds good. 630 00:35:05,239 --> 00:35:08,160 Speaker 2: You know what I really appreciate. Krishna is probably the 631 00:35:08,160 --> 00:35:10,560 Speaker 2: only person on social. 632 00:35:10,239 --> 00:35:11,719 Speaker 1: Media I knew you were going to say this. 633 00:35:11,719 --> 00:35:14,680 Speaker 2: We will admit that they didn't time the market perfectly, 634 00:35:14,840 --> 00:35:17,800 Speaker 2: and we're all in techtoks. Over the last ten years, 635 00:35:17,840 --> 00:35:20,680 Speaker 2: everybody else timed them. Oh I went to cash, you know, 636 00:35:21,080 --> 00:35:24,440 Speaker 2: blah blahlah. Oh, you know whatever. I'm glad someone admits 637 00:35:24,480 --> 00:35:28,359 Speaker 2: the truth, which is that most people have just been, 638 00:35:28,520 --> 00:35:30,879 Speaker 2: at least in recent years, overly diversified. 639 00:35:30,960 --> 00:35:34,040 Speaker 3: Well, it's also interesting to me to see a big 640 00:35:34,120 --> 00:35:35,879 Speaker 3: institutional investor tweet at all. 641 00:35:36,280 --> 00:35:37,640 Speaker 1: Oh yeah, well that's true. 642 00:35:37,880 --> 00:35:41,360 Speaker 3: All right, So that was really interesting. One thing I 643 00:35:41,400 --> 00:35:45,920 Speaker 3: am coming to really appreciate is that peace of mind 644 00:35:46,080 --> 00:35:48,759 Speaker 3: point and the idea that there is a price to 645 00:35:48,880 --> 00:35:52,920 Speaker 3: pay for peace of mind. It's not necessarily free, but 646 00:35:53,920 --> 00:35:57,560 Speaker 3: every once in a while maybe it does actually help 647 00:35:57,600 --> 00:35:59,320 Speaker 3: you in acute moments of stress. 648 00:35:59,440 --> 00:36:00,520 Speaker 1: Well totally. 649 00:36:00,560 --> 00:36:03,120 Speaker 2: And look, if the markets are going down, if you're 650 00:36:03,200 --> 00:36:06,040 Speaker 2: let's say you're employed in America and you have a 651 00:36:06,080 --> 00:36:07,759 Speaker 2: lot of this is something I think about a lot. 652 00:36:07,920 --> 00:36:10,279 Speaker 2: If you're employed at an American company and you have 653 00:36:10,320 --> 00:36:15,400 Speaker 2: a heavily exposed American Index. When markets are tanking, that 654 00:36:15,520 --> 00:36:18,920 Speaker 2: is often associated with recession, right, and that is associated 655 00:36:19,000 --> 00:36:21,920 Speaker 2: with an increased probability of losing your job. And an 656 00:36:21,960 --> 00:36:26,080 Speaker 2: increased probability of losing your job is associated with having 657 00:36:26,160 --> 00:36:29,600 Speaker 2: to sell your investments, maybe even take a tax hit 658 00:36:29,840 --> 00:36:31,600 Speaker 2: at a time when you can least afford to pay it, 659 00:36:31,880 --> 00:36:35,960 Speaker 2: sell your investments to literally continue your life, which is 660 00:36:36,000 --> 00:36:38,239 Speaker 2: sort of like the worst correlation you could, you know, 661 00:36:38,280 --> 00:36:41,800 Speaker 2: the worst confluence events. So the idea that like, okay, 662 00:36:41,960 --> 00:36:43,400 Speaker 2: like if you lose your job and you have to 663 00:36:43,400 --> 00:36:46,319 Speaker 2: dig into your savings, at least you're not selling at 664 00:36:46,360 --> 00:36:50,040 Speaker 2: a local bottom in the market. That seems like one 665 00:36:50,320 --> 00:36:52,680 Speaker 2: benefit to diversified allocation. 666 00:36:52,880 --> 00:36:56,160 Speaker 3: Yeah, so you're not so invested in basically America squared 667 00:36:56,560 --> 00:36:57,440 Speaker 3: and you won't panic. 668 00:36:57,520 --> 00:36:59,720 Speaker 2: I mean, this is the other thing, right, Like people, 669 00:37:00,280 --> 00:37:02,360 Speaker 2: we're all we're animals, and you see the line go 670 00:37:02,480 --> 00:37:06,160 Speaker 2: down and you sell and so forth. Perhaps if the 671 00:37:06,239 --> 00:37:09,319 Speaker 2: line is a little bit more stable, then you know 672 00:37:09,360 --> 00:37:12,520 Speaker 2: you're overall top line, then you don't you know, then 673 00:37:12,560 --> 00:37:15,960 Speaker 2: you don't make rash emotional decisions as quickly, which I 674 00:37:16,000 --> 00:37:18,000 Speaker 2: think there's a lot of benefit to not doing. 675 00:37:18,280 --> 00:37:21,720 Speaker 3: Do you think there's a difference between how much diversification 676 00:37:21,840 --> 00:37:25,040 Speaker 3: helps the retail investor versus big institutional investors. 677 00:37:28,400 --> 00:37:30,359 Speaker 2: That's a really good question. I mean, the nice thing 678 00:37:30,400 --> 00:37:34,239 Speaker 2: about the big institutions, right is they have longevity themselves. 679 00:37:34,719 --> 00:37:38,160 Speaker 2: And yeah, it's a good question. But I don't think 680 00:37:38,200 --> 00:37:41,319 Speaker 2: any American retail investors diversify anymore. I think that, you know, 681 00:37:41,480 --> 00:37:44,799 Speaker 2: most it seems like retail investors in America, like, you know, 682 00:37:45,160 --> 00:37:47,200 Speaker 2: it's not enough to go long mag seven. You have 683 00:37:47,239 --> 00:37:49,880 Speaker 2: to sell puts on mag seven, Right, that's right, like 684 00:37:49,960 --> 00:37:54,320 Speaker 2: and like hyper whatever. The opposite of diversification. 685 00:37:53,760 --> 00:37:55,800 Speaker 3: Is hyper concentration. 686 00:37:55,840 --> 00:37:56,719 Speaker 1: Hyper concentration. 687 00:37:56,920 --> 00:37:58,480 Speaker 3: Yeah, all right, shall we leave it there. 688 00:37:58,560 --> 00:37:59,279 Speaker 1: Let's leave it there. 689 00:37:59,440 --> 00:37:59,879 Speaker 5: This has been. 690 00:37:59,840 --> 00:38:03,160 Speaker 3: Another episode of the Audlots podcast. I'm Tracy Alloway. You 691 00:38:03,200 --> 00:38:04,839 Speaker 3: can follow me at Tracy. 692 00:38:04,600 --> 00:38:07,319 Speaker 2: Alloway and I'm Jill Wisenthal. You can follow me at 693 00:38:07,400 --> 00:38:11,640 Speaker 2: the Stalwart. Follow our guest Krishna Mamani. He's at Krishna Mamani. 694 00:38:11,840 --> 00:38:15,080 Speaker 2: Follow our producers Carmen Rodriguez at Kerman Arman, dash O 695 00:38:15,160 --> 00:38:18,839 Speaker 2: Bennett at Dashbot and kel Brooks at Kalebrooks. More odd 696 00:38:18,920 --> 00:38:21,799 Speaker 2: Lads content go to Bloomberg dot com slash odd Lots, 697 00:38:21,800 --> 00:38:24,759 Speaker 2: where we have a daily newsletter and all of our episodes, 698 00:38:25,000 --> 00:38:29,719 Speaker 2: and you can chat about all of these topics, including investing, diversification, 699 00:38:29,920 --> 00:38:33,240 Speaker 2: market and so forth in our discord Discord dot gg 700 00:38:33,320 --> 00:38:34,160 Speaker 2: slash odlogs. 701 00:38:34,280 --> 00:38:36,480 Speaker 3: And if you enjoy odd Lots, if you like it 702 00:38:36,520 --> 00:38:40,000 Speaker 3: when we talk about the downsides of diversification, then please 703 00:38:40,080 --> 00:38:43,160 Speaker 3: leave us a positive review on your favorite podcast platform. 704 00:38:43,440 --> 00:38:46,239 Speaker 3: And remember, if you are a Bloomberg subscriber, you can 705 00:38:46,280 --> 00:38:49,680 Speaker 3: listen to all of our episodes absolutely ad free. All 706 00:38:49,680 --> 00:38:51,600 Speaker 3: you need to do is find the Bloomberg channel on 707 00:38:51,680 --> 00:38:54,880 Speaker 3: Apple Podcasts and then follow the instructions there. Thanks for 708 00:38:54,920 --> 00:39:05,120 Speaker 3: listening in