WEBVTT - Why UK Pensions Triple Lock Must Go and How ESG Threatens Democracy 0:00:00.720 --> 0:00:04.480 John Man gat that you've been getting yourself in a 0:00:04.519 --> 0:00:06.400 little trouble with retirees this week. 0:00:07.720 --> 0:00:11.440 It's surprising how defensive they can be of their state pension. 0:00:12.600 --> 0:00:15.160 Look, we can all be defensive of our stuff. No 0:00:15.200 --> 0:00:18.080 one wants stuff taking away. Everyone wants stuff, and then 0:00:18.120 --> 0:00:20.080 they want more stuff. They don't want less stuff. Why 0:00:20.160 --> 0:00:21.320 should pensioners be different? 0:00:22.040 --> 0:00:22.520 Oh? 0:00:22.560 --> 0:00:25.520 Absolutely, and weirdly enough, a pole have more sympathy for 0:00:25.560 --> 0:00:27.720 the pensioners than a lot of the other stuff. I 0:00:27.760 --> 0:00:29.440 things should be taken away from people. 0:00:30.000 --> 0:00:32.040 That's because you're quite close to pensionable age. 0:00:32.640 --> 0:00:34.800 Yeah, exactly, No, he's not, by the way. 0:00:34.680 --> 0:00:36.800 Everybody, I am joking, here's nowhere near it. 0:00:36.960 --> 0:00:40.440 They're talking about the UK pensions triple log, obviously, as 0:00:40.479 --> 0:00:43.800 everyone knows the way, and that the UK pensions UK 0:00:43.880 --> 0:00:45.880 state pens as are basically pegged to the highest number 0:00:45.920 --> 0:00:48.599 anyone can find anywhere. Something that used to work when 0:00:48.640 --> 0:00:50.839 the state pension was far too low. But now, of 0:00:50.880 --> 0:00:51.279 course the. 0:00:51.240 --> 0:00:54.360 State pension is actually pretty good, and it's beginning to 0:00:54.360 --> 0:00:57.600 look a bit weird for pensioners to get a higher 0:00:58.080 --> 0:01:00.480 rise in their realtim's income than pretty much anyone else 0:01:00.480 --> 0:01:02.840 in the UK is that basically what you're thinking, John. 0:01:03.600 --> 0:01:08.720 That's basically it. I suppose it's the main issue here 0:01:08.760 --> 0:01:11.399 is so the triple lock that was introduced in twenty ten, 0:01:12.160 --> 0:01:14.080 and that was at a time when the state pension 0:01:14.280 --> 0:01:17.600 was considered to be too low, and that was probably 0:01:17.600 --> 0:01:20.679 fair at the time. And so we've got in a 0:01:20.680 --> 0:01:24.320 situation where now pensioners and pension of households are less 0:01:24.360 --> 0:01:26.800 likely to be in poverty than other houses. And this 0:01:26.880 --> 0:01:28.920 is relative poverty, by the way, but let's not even 0:01:29.040 --> 0:01:29.960 start going into. 0:01:29.800 --> 0:01:30.640 That on that. 0:01:31.240 --> 0:01:35.920 Yeah, so at some point pension households were poorer or 0:01:36.000 --> 0:01:38.360 more likely be poorer, and now they're more likely be richer. 0:01:39.640 --> 0:01:41.240 And so it does seem odd that we have this 0:01:41.319 --> 0:01:43.800 triple lock, which makes sure that pension has either get 0:01:43.800 --> 0:01:49.560 two point five percent or CPI or average journings, whichever 0:01:49.720 --> 0:01:52.320 is highest, and not only whichever is highest, but whichever 0:01:52.440 --> 0:01:55.960 is highest in the specific month, because you know, just 0:01:56.000 --> 0:01:59.120 because they want to make the decision in September. And 0:01:59.160 --> 0:02:01.520 so what ends up happening as you get it's the 0:02:01.600 --> 0:02:05.640 July figure for wages, and it's the August figure I 0:02:05.680 --> 0:02:09.600 think for CPI, and so basically it's one off numbers, 0:02:09.600 --> 0:02:12.639 so you can also get completely derailed by some quite 0:02:12.760 --> 0:02:16.440 arbitrary thing, and to an extent, that's happened this time 0:02:16.520 --> 0:02:21.040 round because average wages came in at eight point five percent, 0:02:21.400 --> 0:02:26.000 that's like including bonuses, and that bonuses bit was actually 0:02:26.000 --> 0:02:28.960 including the pay settlements made to the NHS and other 0:02:29.000 --> 0:02:33.200 civil servants to kind of stop the strikes basically, So 0:02:33.760 --> 0:02:36.600 it's not just that's not even an annual bonus, is 0:02:36.639 --> 0:02:39.160 a kind of one off kind of payment that's distorted 0:02:39.200 --> 0:02:43.520 the figures higher. So it just seems nuts that the 0:02:43.560 --> 0:02:45.320 state pension is going to got by eight point five 0:02:45.320 --> 0:02:49.440 percent in April twenty twenty four because a we've got 0:02:49.440 --> 0:02:50.440 a distorted figure. 0:02:51.360 --> 0:02:52.040 But being more. 0:02:51.960 --> 0:02:56.000 Importantly, you know, is this what we're trying to affixt anymore? 0:02:56.040 --> 0:02:59.720 Given that we'll apparently have a finite amount of money 0:02:59.760 --> 0:03:02.040 which we do to spend on things, you. 0:03:01.960 --> 0:03:04.079 Can print as much money as you like. Everyone as 0:03:04.120 --> 0:03:05.720 that it doesn't close reflection. 0:03:05.440 --> 0:03:08.160 Either, is that the MMT people have they been, have 0:03:08.240 --> 0:03:10.840 they been? Have been handing you printed. 0:03:10.520 --> 0:03:17.040 Money unviriginally, No one pays me for my opinions. 0:03:18.440 --> 0:03:24.160 Moving on, but yeah, no, so yeah, is our priority 0:03:24.400 --> 0:03:27.520 as a nation at the moment to increase the state 0:03:27.560 --> 0:03:29.639 pension in real terms, being in mind that the state 0:03:29.680 --> 0:03:33.200 pension a universal benefit, so you know all of these people, 0:03:33.360 --> 0:03:36.080 you know, whenever people complain about it on Twitter, it's 0:03:36.120 --> 0:03:39.600 like they're talking about the group of pensioners who are poor. 0:03:40.000 --> 0:03:42.200 So I'll tell you what, if you're worried about poor pensioners, 0:03:42.200 --> 0:03:45.920 how about we focus on giving them, you know, benefits 0:03:46.000 --> 0:03:50.040 or whatever kind of section of the the welfare system 0:03:50.280 --> 0:03:53.600 should be targeted, rather than just increasing that kind of 0:03:53.720 --> 0:03:57.480 universal essentially universal basic income for the over sixty eight 0:03:57.560 --> 0:03:59.920 year old is what we're talking about here. And when 0:04:00.080 --> 0:04:03.880 we don't have the money to pay. 0:04:03.720 --> 0:04:08.800 For that, the system does already do that in that 0:04:09.440 --> 0:04:12.920 you know, it provides a raft of other benefits for 0:04:13.200 --> 0:04:15.840 people who are living in poverty or people who don't 0:04:15.840 --> 0:04:18.040 have the income to sustain themselves. And you may say 0:04:18.040 --> 0:04:21.360 that there's other benefits aren't good enough, but there is 0:04:21.440 --> 0:04:23.120 a case to be made for simply, as you say, 0:04:23.160 --> 0:04:27.240 increasing housing benefit for all the people, increasing the payouts 0:04:27.240 --> 0:04:29.920 for energy, et cetera, et cetera. There's lots of different 0:04:29.920 --> 0:04:33.360 things that can be done to help the increase not 0:04:33.880 --> 0:04:36.279 huge group of people who don't have any other income 0:04:36.320 --> 0:04:37.760 that would be more efficient. 0:04:38.960 --> 0:04:40.880 Well, yeah, well that is the other point, because it's 0:04:40.960 --> 0:04:44.560 not the majority, you know, it's it's definitely a minority 0:04:44.920 --> 0:04:49.600 that you know, completely dependent on the state pensions. So again, 0:04:49.680 --> 0:04:53.320 if you're qualm about reducing the triple lock to just 0:04:53.360 --> 0:04:57.799 an inflation index, and thing is that it may hit pensions, 0:04:58.160 --> 0:05:02.479 well the answers will focus on the pension. What I 0:05:02.520 --> 0:05:04.400 do think is an interesting question one I would like 0:05:04.480 --> 0:05:09.400 to ask you is the other response that comes back 0:05:09.400 --> 0:05:11.560 a lot. Does it mean you start means testing the 0:05:11.640 --> 0:05:14.720 state pension, you know, so that you know, whatever, I'll 0:05:14.800 --> 0:05:17.480 ensure young people like that aren't getting it anymore or 0:05:18.120 --> 0:05:25.440 entitled to anymore. And I mean, I'm it's the kind 0:05:25.480 --> 0:05:27.279 of ones I'd be a lot into the open. But 0:05:27.360 --> 0:05:29.280 I can definitely see the argument for it. 0:05:29.640 --> 0:05:31.520 Yeah, I can see the argument for it as well, 0:05:31.520 --> 0:05:34.279 but I also think it's politically impossible. 0:05:35.000 --> 0:05:37.239 Much better to do it we just discussed and hold 0:05:37.279 --> 0:05:40.040 it at its current level in real terms, or even 0:05:40.080 --> 0:05:42.080 you know, let it slide in real terms and provide 0:05:42.080 --> 0:05:44.600 a high level of benefits to those who need it. 0:05:44.640 --> 0:05:46.360 I mean, you know, we have to work within the 0:05:46.400 --> 0:05:48.159 realms of reality. Don't we. 0:05:48.520 --> 0:05:51.520 I mean another thing, another thing that people sometimes suggest 0:05:51.560 --> 0:05:54.720 and that I have some sympathy with, is to say, Okay, 0:05:54.960 --> 0:05:56.800 you think the state pension isn't high enough, well we 0:05:56.839 --> 0:06:00.520 can we can fix that by simply removing all relief 0:06:00.520 --> 0:06:06.960 on private pension savings outside outside the state pension, and 0:06:06.960 --> 0:06:10.000 then transfer the money saved from that tax really directly 0:06:10.040 --> 0:06:12.160 into the state pension. That will come for about five 0:06:12.200 --> 0:06:16.839 grand an old person, making the state pension more like 0:06:16.880 --> 0:06:18.920 fourteen to fifteen grand than it's current level of knocking 0:06:18.960 --> 0:06:22.719 around ten. So, you know, that's kind of an interesting idea, 0:06:22.839 --> 0:06:26.560 although of course again it would widen the pension divide 0:06:26.560 --> 0:06:28.320 between the public sector and the private sector. 0:06:29.760 --> 0:06:33.040 Yeah, and it kind of I'm always reluctant a bit 0:06:33.080 --> 0:06:36.200 the tax really argument for the same you know reason 0:06:36.200 --> 0:06:37.800 that you point to it before. What it is that 0:06:37.920 --> 0:06:41.520 thing if you're not, if you're not often taxually for 0:06:41.839 --> 0:06:45.960 the pension, then you're you can ordinary person if youel 0:06:46.000 --> 0:06:48.120 like through the work in life, who kind of has 0:06:48.200 --> 0:06:52.160 to get the pension at the time when they're earning 0:06:52.240 --> 0:06:55.600 lots of money. It's to or you know, the maximum outain. 0:06:55.720 --> 0:06:57.599 You know, so when there are forty percent taxpayer is 0:06:57.640 --> 0:07:00.359 when they should be you know, contributing the getting the 0:07:00.400 --> 0:07:05.240 tax relief. Then it sort of feels like, what's the 0:07:05.279 --> 0:07:10.040 point you're saving the pension there? And I mean, actually, yeah, 0:07:10.080 --> 0:07:12.200 you can see how actually is has probably become much 0:07:12.240 --> 0:07:15.760 more popular because they don't get taxed on the way out. 0:07:17.560 --> 0:07:19.400 So you know, you can put twenty grand a year 0:07:19.400 --> 0:07:21.880 into an ISA, so you can use that to build 0:07:21.960 --> 0:07:24.320 up a perfctly good retirement fund. Don't have to call 0:07:24.360 --> 0:07:27.400 it a pension, but it's the same thing, right, yeah, 0:07:27.440 --> 0:07:27.960 And I mean. 0:07:27.840 --> 0:07:30.280 Maybe maybe it all comes back. I mean, I remember 0:07:30.320 --> 0:07:34.440 you wrote something a while ago about basically they know, 0:07:35.160 --> 0:07:38.720 the light time allowance sort of being gradually placed at 0:07:38.720 --> 0:07:42.480 the point where the government thinks how much money you 0:07:42.560 --> 0:07:46.040 need to level in retirement without you know, having any 0:07:46.040 --> 0:07:48.360 state help. And that's the whole point of the private 0:07:48.480 --> 0:07:49.560 pension saving set. 0:07:49.600 --> 0:07:52.880 Absolutely, it's not designed to give you money beyond the 0:07:52.920 --> 0:07:55.200 money you need to not be dependent on the state. 0:07:55.320 --> 0:07:59.880 And as soon as any any tax reliefs or any 0:08:00.040 --> 0:08:03.200 thing like that get to a point where the system 0:08:03.840 --> 0:08:06.840 incentivizes you to sav into these products more than you 0:08:06.920 --> 0:08:08.840 required and not be dependent on the state, then it's 0:08:08.880 --> 0:08:09.800 pointlessly expensive. 0:08:09.880 --> 0:08:11.440 That was a very long sentence, But I know you 0:08:11.520 --> 0:08:12.280 understand what I meant. 0:08:15.400 --> 0:08:19.120 I mean, maybe maybe if we just what a little 0:08:19.160 --> 0:08:22.160 bit more up front and said, well, look, this is 0:08:22.200 --> 0:08:26.200 what we think a pension should be leving on as 0:08:26.240 --> 0:08:30.080 a minimum, and. 0:08:28.680 --> 0:08:30.920 What should be not what they should be living on, 0:08:31.040 --> 0:08:34.480 what what the state should be providing for them to 0:08:34.559 --> 0:08:37.240 live on. We're not going to be judgmental about what 0:08:37.240 --> 0:08:39.800 people have or don't have, are we not. 0:08:39.880 --> 0:08:42.520 I mean that means if you if that's the sort 0:08:42.600 --> 0:08:45.400 they go, look, here's the minimum have you owned by 0:08:45.480 --> 0:08:46.960 to this date? It's not going to need to worry 0:08:46.960 --> 0:08:49.160 about you anymore? Then maybe a rate. Maybe we should 0:08:49.200 --> 0:08:52.840 be just scrat tax and reason it to that minimum 0:08:53.040 --> 0:08:57.280 and then clawing back. You know that the minimum in 0:08:57.320 --> 0:09:03.640 the form attacks from the kind of wealthier pensions anyway, ye. 0:09:03.760 --> 0:09:04.559 Might ridiculum that. 0:09:04.840 --> 0:09:07.079 See how many people get angry about that? All the 0:09:07.520 --> 0:09:10.880 response that you've had to your column about how the 0:09:11.000 --> 0:09:13.560 UK pensions triple lot needs to go. Have there been 0:09:14.040 --> 0:09:17.800 any any responses that you've particularly compelling. 0:09:18.960 --> 0:09:22.680 Well, it's it's more the the split. It's kind of 0:09:22.760 --> 0:09:25.480 you've obviously you've got lots of young people who are 0:09:25.559 --> 0:09:27.800 kind of you know, pro it and kind of liking 0:09:27.840 --> 0:09:29.880 it on Twitter and all that sort of stuff. And 0:09:30.080 --> 0:09:37.000 the people who object are the lastly already pensionals, and 0:09:37.040 --> 0:09:39.679 it is one of those things where you know they feel, well, 0:09:39.720 --> 0:09:41.840 I've you know, paid in or you know, I've paid 0:09:41.840 --> 0:09:44.960 my staff my national insurance all my life, so you know, 0:09:45.000 --> 0:09:47.760 why am I not entitled to this? And most of 0:09:47.800 --> 0:09:51.920 the time it is kind of you know, I don't 0:09:52.240 --> 0:09:54.200 I hate to say, but it's kind of missing my 0:09:54.360 --> 0:09:56.599 point because you know, I'm not actually saying that we 0:09:56.640 --> 0:09:59.319 should scrap the state pension of even reducing real terms, 0:09:59.320 --> 0:10:02.120 I'm literally saying that actually the reason that we airmens 0:10:02.120 --> 0:10:08.520 every year seems a little bit excessive something real. 0:10:10.840 --> 0:10:14.360 For misunderstanding of how national insurance national insurance actually works, 0:10:14.400 --> 0:10:15.240 isn't it. 0:10:15.360 --> 0:10:19.640 Oh yeah, law, we're not going to get I can't 0:10:19.640 --> 0:10:23.319 blame them given that is, you know, they need me 0:10:23.400 --> 0:10:29.240 as national insurance and income tax which help perhaps with 0:10:29.320 --> 0:10:29.599 some of this. 0:10:30.440 --> 0:10:32.840 Well I'm on all this, John, and that you know, 0:10:32.840 --> 0:10:35.480 as you know, I'm I always worry about state spending 0:10:35.600 --> 0:10:37.400 or about the deficit, where about the debt, worry about 0:10:37.600 --> 0:10:39.240 getting all the money where the money comes from et cetera. 0:10:39.320 --> 0:10:41.199 But on the other hand that I would just love 0:10:41.600 --> 0:10:44.640 to get a really great state pension money sent to 0:10:44.679 --> 0:10:47.640 me every month by the government. I don't do anything 0:10:47.679 --> 0:10:49.520 for it. I don't have to worry about my ass 0:10:49.520 --> 0:10:52.360 of allocation or think about my you know, my shares, 0:10:52.400 --> 0:10:53.360 my bonds, etcetera. 0:10:53.400 --> 0:10:55.400 And the money just comes. Oh, that's like being a 0:10:55.400 --> 0:10:56.880 public sector employee, right. 0:10:57.960 --> 0:11:01.439 Yeah, I mean I would love I would love that. 0:11:01.520 --> 0:11:04.679 So I'm torn between my my feelings that it's not 0:11:04.720 --> 0:11:09.360 appropriate in this environment and my desperation to have a 0:11:09.440 --> 0:11:12.240 high rail income at myself on retirement. So you know, 0:11:12.320 --> 0:11:15.160 there you go swings and roundabouts. 0:11:14.600 --> 0:11:16.839 At the one thing that I did spot which I 0:11:16.880 --> 0:11:20.360 thought was interesting, it was it was a separate There 0:11:20.400 --> 0:11:22.760 wasn't some respect some responding directly to what I was said, 0:11:23.000 --> 0:11:26.160 But there was a calculation that you'd need something like 0:11:26.240 --> 0:11:29.120 quarter a million and a DC pension port to actually 0:11:29.120 --> 0:11:33.680 buy the state pension now after it goes up. And 0:11:33.679 --> 0:11:38.040 I think that just that does give some perspective on 0:11:38.640 --> 0:11:42.360 a how you know, how valuable the state pension is, 0:11:43.679 --> 0:11:48.960 and b on just how valuable a dB pension, particularly 0:11:49.040 --> 0:11:50.679 in the public sector, which is the only place you'll 0:11:50.720 --> 0:11:55.120 get one now really is as well, and maybe and yeah, 0:11:55.120 --> 0:11:57.000 that probably is the kind of this party that we 0:11:57.120 --> 0:11:59.040 really need to be looking at. But again that's so 0:11:59.120 --> 0:12:01.640 politically talks. It can also all of the people who 0:12:01.720 --> 0:12:04.520 are in charge of that get dB pasions themselves. 0:12:04.679 --> 0:12:06.960 So I can see that you think you got hate 0:12:06.960 --> 0:12:08.720 mail for talking about the triple locked as. 0:12:08.720 --> 0:12:10.120 Wait what happens when you start. 0:12:09.880 --> 0:12:13.640 Writing about public executor defined benefit pensions? 0:12:13.880 --> 0:12:14.120 Right? 0:12:14.880 --> 0:12:17.200 Welcome to Marin Talks Money, the podcast in which people 0:12:17.200 --> 0:12:19.440 who know the markets explain the markets. 0:12:19.520 --> 0:12:20.760 I'm there in some set web. 0:12:21.120 --> 0:12:24.080 This week, our guest is Matt Cole, chief executive officer 0:12:24.120 --> 0:12:27.720 and chief investment officer of Strive Asset Management. 0:12:28.440 --> 0:12:29.560 Matt has a long. 0:12:29.360 --> 0:12:32.280 Career behind him, at one point overseeing more than seventy 0:12:32.360 --> 0:12:35.359 billion dollars in actively managed fixed income portfolio. 0:12:35.880 --> 0:12:37.400 Now Strive you might have heard of. 0:12:37.520 --> 0:12:41.439 It's an anti activism fund management company co founded by 0:12:41.480 --> 0:12:45.160 Republican presidential hopeful Vivek Ramaswami, who you may have heard 0:12:45.160 --> 0:12:49.400 from on this podcast before. Drivers recently crossed one billion 0:12:49.480 --> 0:12:51.880 dollars worth of the assets. That doesn't sound much in 0:12:51.920 --> 0:12:54.160 the context of the big asset managers in the US, 0:12:54.280 --> 0:12:57.320 But given that it only launched in twenty twenty two 0:12:57.520 --> 0:13:00.160 with backing, by the way from billionaire investors including to 0:13:00.200 --> 0:13:04.040 Feel and Bill Ackmann, it's not bad at all. Now 0:13:04.040 --> 0:13:07.280 the idea is to be the opposite of the investment giants. 0:13:07.280 --> 0:13:10.400 It's black Rock, which you will emphasize the environmental, social 0:13:10.440 --> 0:13:13.480 and governance at ESG focus investing. 0:13:13.320 --> 0:13:15.640 Above all sorts of other things. 0:13:16.840 --> 0:13:18.839 Hi, Matt, thank you so much for joining us today. 0:13:19.080 --> 0:13:20.600 Hi Maren, it's a pleasure to be here. 0:13:20.880 --> 0:13:22.760 Okay, we're going to go straight in. Matt. I'm going 0:13:22.800 --> 0:13:25.320 to ask you a very simple question that I think 0:13:25.400 --> 0:13:27.600 has a simple answer, and lots of people think has 0:13:27.600 --> 0:13:29.840 a complicated answer. So let's see which way you go 0:13:29.960 --> 0:13:33.040 on it, Matt. What should a company do? 0:13:33.640 --> 0:13:38.760 A for profit company's primary purpose should be to maximize value? 0:13:39.200 --> 0:13:44.400 The idea that all stakeholders aren't traded equally. The shareholder 0:13:44.480 --> 0:13:47.920 is more important than other stakeholders. That too an our 0:13:48.000 --> 0:13:49.600 view is the purpose of a corporation? 0:13:50.120 --> 0:13:53.479 Are other stakeholders important at all? Or is the shareholder 0:13:53.559 --> 0:13:57.440 the only important group when it comes to how a 0:13:57.480 --> 0:13:59.880 company operates? 0:14:00.800 --> 0:14:04.600 All stakeholders do matter, But our view is that you 0:14:04.720 --> 0:14:07.600 can't serve two masters, and so you actually have to 0:14:07.679 --> 0:14:08.600 pick a priority. 0:14:08.640 --> 0:14:09.800 You have to pick a purpose. 0:14:10.320 --> 0:14:14.400 So amongst all stakeholders of which the shareholder is one, 0:14:15.400 --> 0:14:18.800 the shareholder is the most important stakeholder for a for 0:14:18.840 --> 0:14:23.320 profit company. Now, to maximize value over the long run, 0:14:24.000 --> 0:14:26.960 you have to as a company care about the stakeholders, 0:14:27.040 --> 0:14:30.880 the other stakeholders. You have to care about the customer. 0:14:31.480 --> 0:14:35.760 The customer needs good products, good services to keep coming 0:14:35.800 --> 0:14:39.320 back to your company. You have to have employees that 0:14:39.360 --> 0:14:42.760 are motivated, that are satisfied, that want to stay and 0:14:42.840 --> 0:14:44.480 want to work hard for your company. 0:14:44.880 --> 0:14:45.440 They matter. 0:14:45.560 --> 0:14:49.560 You obviously have to work friendly with the areas of 0:14:49.600 --> 0:14:52.320 whence you operate, the communities in which you operate. They 0:14:52.320 --> 0:14:56.240 all matter, but they matter to maximize value. And I 0:14:56.240 --> 0:14:59.480 think that's the thing that's missing in today's world, and 0:14:59.680 --> 0:15:03.640 it's typically in the asset management industry, the idea that 0:15:03.720 --> 0:15:07.920 you can both do good and make money at the 0:15:07.960 --> 0:15:08.520 same time. 0:15:09.080 --> 0:15:11.040 You might be able to do good, but you have 0:15:11.120 --> 0:15:12.440 to define your purpose. 0:15:12.560 --> 0:15:15.560 And I think that's what's missing in the current stakeholder 0:15:15.640 --> 0:15:20.320 capitalism movement that is growing across America at the moment. 0:15:21.440 --> 0:15:22.080 It's interesting and. 0:15:22.120 --> 0:15:23.840 One of the things that we have been told, haven't 0:15:23.840 --> 0:15:25.720 we the last fifteen years or so, with the huge 0:15:25.800 --> 0:15:29.480 rise of the ESG market, is that investing with a 0:15:29.600 --> 0:15:32.800 view to ESG principles, or putting ESG principles at the 0:15:32.800 --> 0:15:34.560 top of your list of things you look for when 0:15:34.600 --> 0:15:38.520 you invest, is something that will automatically give you better returns. 0:15:38.720 --> 0:15:42.800 We've been told that consistently, companies with good ESG make 0:15:43.040 --> 0:15:45.800 more money, and I've looked at that all the way through, 0:15:45.840 --> 0:15:47.880 and I maybe you have as well, and said, well, hang. 0:15:47.760 --> 0:15:50.000 On to take care. All that's happening here is that 0:15:50.080 --> 0:15:54.640 we're in a growth environment, and in a growth environment, 0:15:54.680 --> 0:15:57.720 growth companies tend to have better ESG metrics, and some 0:15:57.760 --> 0:16:01.040 older companies for obvious reasons. So if you have a 0:16:01.160 --> 0:16:05.760 growth bubble building, it will look like companies with better 0:16:06.040 --> 0:16:09.600 ESG scores outperform. But that's a short term thing related 0:16:09.600 --> 0:16:11.680 to very low interest rates and related to the way 0:16:11.840 --> 0:16:15.280 low interest rates encourage the asset the prices of growth 0:16:15.280 --> 0:16:16.000 acces to rise. 0:16:17.240 --> 0:16:21.400 Absolutely, and that is why I also personally haven't done 0:16:21.560 --> 0:16:25.680 a victory lap of saying it's now proven that ESG 0:16:25.800 --> 0:16:29.840 underperforms now that energy stocks are doing better. It's purely 0:16:29.920 --> 0:16:33.600 a sector view when it comes to ESG funds outperforming 0:16:33.640 --> 0:16:38.359 or underperformed because they're sector biases in many of those funds. 0:16:39.400 --> 0:16:41.240 And I think that another thing that you said that 0:16:41.400 --> 0:16:45.200 stuck out to me is the idea that companies that 0:16:45.800 --> 0:16:50.520 do better with ESG, and that gets to a problem 0:16:50.560 --> 0:16:53.960 that I have with the ESG movement. Since day one, 0:16:54.080 --> 0:16:57.520 we've said at Strive that we're not anti ESG, but 0:16:57.640 --> 0:17:01.120 I think it's also fair to say that we think 0:17:01.240 --> 0:17:05.479 the corporate ESG movement has been very value destructive. And 0:17:05.520 --> 0:17:08.960 I think that's important for a couple of reasons. Because one, 0:17:09.040 --> 0:17:11.800 as a portfolio manager, I've been someone that's been in 0:17:11.840 --> 0:17:15.320 the asset management industry now for over seventeen years. I 0:17:15.359 --> 0:17:18.720 believe strongly that any portfolio manager needs to look at 0:17:18.760 --> 0:17:21.520 every single risk factor that they can. I believe in 0:17:21.600 --> 0:17:24.199 the mosaic theory when it comes to portfolio management of 0:17:24.240 --> 0:17:27.879 looking at all risk factors. That would include environmental risk factors, 0:17:27.920 --> 0:17:30.920 it would include social risk factors, it would include governance 0:17:31.040 --> 0:17:35.120 risk factors. Heck, our companies Strive its core differentiators corporate governance. 0:17:35.400 --> 0:17:38.960 We're clearly not anti corporate governance, but what I think 0:17:39.000 --> 0:17:43.480 has happened in the corporate ESG movement is it's there's 0:17:43.520 --> 0:17:46.200 not an allowed wide range of views when it comes 0:17:46.240 --> 0:17:49.160 to E risk factors, S risk factors, or G risk factors. 0:17:49.160 --> 0:17:52.120 It's quote unquote the ESG risk factors. 0:17:52.359 --> 0:17:54.680 And I think that's a problem, and it's very different 0:17:54.800 --> 0:17:58.760 from other risk factors in portfolio management. If you were 0:17:58.800 --> 0:18:01.040 to ask a portfolio manage to give their view on 0:18:01.400 --> 0:18:04.480 recession risk or inflation risk, if you ask five different 0:18:04.480 --> 0:18:07.920 portfolio managers, you would get five different answers. But for 0:18:07.960 --> 0:18:11.640 some reason, when it comes to ESG, you're either pro 0:18:11.960 --> 0:18:15.040 ESG or your anti ESG. It's not just what are 0:18:15.119 --> 0:18:18.240 your views of those risk factors. And I think that's 0:18:18.240 --> 0:18:21.119 where it's gone wrong in the corporate ESG movement. But 0:18:21.160 --> 0:18:24.280 it's also where it's gone wrong in the pushback against 0:18:24.520 --> 0:18:27.280 ESG as a whole, where many states in the United 0:18:27.320 --> 0:18:31.600 States have tried to ban considering es or G risk 0:18:31.640 --> 0:18:34.480 factors and investment decision and I think that's also an 0:18:34.480 --> 0:18:35.399 incorrect solution. 0:18:35.840 --> 0:18:36.520 Okay, so we. 0:18:36.520 --> 0:18:41.120 Do need to consider ESG, but only in the context 0:18:41.440 --> 0:18:44.880 of having an eye to it enhancing the long term 0:18:44.880 --> 0:18:46.560 profit making potential of a company. 0:18:47.359 --> 0:18:52.679 I think the correct debate is actually shareholder capitalism versus 0:18:52.680 --> 0:18:57.000 stakeholder capitalism. How you started this conversation, what is the 0:18:57.040 --> 0:19:00.920 purpose of a for profit corporation? The debate that needs 0:19:00.920 --> 0:19:03.959 to be had, And what we see in the asset 0:19:03.960 --> 0:19:08.240 management industry today is every large asset manager or almost 0:19:08.280 --> 0:19:12.919 every large asset manager in America saying that they subscribe 0:19:13.000 --> 0:19:18.760 to the stakeholder capitalism mindset, that shareholder primacy is outdated. 0:19:19.840 --> 0:19:22.560 And so then when you go downstream of that, of 0:19:22.640 --> 0:19:25.600 course the ESG movement is not being viewed from a 0:19:25.600 --> 0:19:30.679 fiduciary lens of value maximization. If the top at the 0:19:30.680 --> 0:19:35.959 top level, there was a recommitment to corporations making money, 0:19:36.359 --> 0:19:39.080 then you go downstream of that, then you're looking at 0:19:39.119 --> 0:19:42.720 E factors, S factors, and G factors to the correct 0:19:42.760 --> 0:19:46.080 fiduciary lens. And I think if they were being looked 0:19:46.080 --> 0:19:49.280 at through those lens, they would be treated very differently, 0:19:49.359 --> 0:19:53.000 both in terms of the outcomes, what type of views 0:19:53.040 --> 0:19:56.840 are being talked about in those risk factors, but then 0:19:56.880 --> 0:19:58.879 also the materiality of those risk factors. 0:19:58.920 --> 0:19:59.960 I don't think you would. 0:19:59.720 --> 0:20:05.600 See d ESG as a top headline in Bloomberg News 0:20:05.600 --> 0:20:09.680 every single day if it was actually thought about in 0:20:09.720 --> 0:20:13.119 the correct order of magnitude of risk factors and portfolio 0:20:13.320 --> 0:20:14.560 management decisions. 0:20:15.280 --> 0:20:19.199 There's legal risk for fund managers that are looking at 0:20:19.560 --> 0:20:24.360 ESG factors above returns to shareholders and they're not fulfilling 0:20:24.359 --> 0:20:27.520 their fiduciary duty to their clients. 0:20:28.359 --> 0:20:31.399 I do think that there is legal risk factors. It 0:20:31.520 --> 0:20:34.280 kind of gets back to the where has the pushback 0:20:34.320 --> 0:20:36.879 to ESG gone wrong? And I think some of the 0:20:36.920 --> 0:20:42.679 initial legal cases that I've seen push back at considering 0:20:42.720 --> 0:20:46.840 those risk factors versus I think what you said is 0:20:46.920 --> 0:20:52.399 not trying to maximize value, and when asset managers explicitly 0:20:52.480 --> 0:20:56.880 say that. As an example, in twenty nineteen, the Business 0:20:57.000 --> 0:21:02.359 Roundtable Statement that Redefine the Purpose of a Corporation to 0:21:02.520 --> 0:21:06.600 move American corporations away from shareholder primacy, that was signed 0:21:06.600 --> 0:21:10.280 by one hundred and eighty one CEOs, including the CEOs 0:21:10.680 --> 0:21:16.520 of Blackrock and Vanguard, that to me introduces legal risk 0:21:16.640 --> 0:21:18.520 as a fiduciary Yeah. 0:21:18.320 --> 0:21:21.200 And particularly because at that point the majority of clients 0:21:21.240 --> 0:21:25.000 wouldn't have understood how that was going to work. And 0:21:25.119 --> 0:21:28.680 even now, I imagine the scores of retail clients in the 0:21:28.800 --> 0:21:32.200 US and in the UK who don't quite understand that 0:21:32.560 --> 0:21:35.040 shareholder returns are not absolutely at the top. 0:21:34.920 --> 0:21:35.359 Of the list. 0:21:36.600 --> 0:21:41.719 Absolutely, and it's a very challenging subject to understand. And 0:21:41.800 --> 0:21:45.639 even this year, as we were wrapping up the twenty 0:21:45.680 --> 0:21:48.480 twenty three proxy voting season, you're starting to see articles 0:21:48.520 --> 0:21:53.960 come out that talk about how Blackrock supported only nine 0:21:54.080 --> 0:21:57.840 percent of ESG proposals. Vanguard was even lower than that, 0:21:58.400 --> 0:22:01.920 and on the headlines might make one think, oh, they're 0:22:01.960 --> 0:22:06.040 actually changing their views because of this pushback. They say 0:22:06.160 --> 0:22:09.600 the opposite, They say no, there's redundancy in them. But 0:22:09.800 --> 0:22:13.159 what's important to note. A couple of years ago you 0:22:13.200 --> 0:22:17.120 might remembered the Dealbook conference with Andrew Ross Sorkin where 0:22:17.160 --> 0:22:20.119 he was interviewing Larry Fink, and Larry Fink says, we 0:22:20.359 --> 0:22:24.560 are forcing behaviors and this clip goes viral right and 0:22:24.000 --> 0:22:28.280 to thirty minute conversation. But what was important was actually 0:22:28.359 --> 0:22:31.280 the context of why he said that, and that's never 0:22:31.320 --> 0:22:34.600 actually shown in the clips that go viral. What he 0:22:34.720 --> 0:22:36.960 was talking about was how do you force behaviors? What 0:22:37.000 --> 0:22:40.000 are we trying to force behaviors to do? And he 0:22:40.119 --> 0:22:44.520 talks about how you actually force behaviors is by changing 0:22:44.600 --> 0:22:49.680 the incentive compensation structure across corporate America. And so why 0:22:49.760 --> 0:22:53.280 is this important? Because if you were to compare in 0:22:53.440 --> 0:22:58.320 twenty eleven, almost no companies had incentive compensation at the 0:22:58.359 --> 0:23:03.080 C suite tied to EOG or D and I measures. Today, 0:23:04.119 --> 0:23:07.000 over seventy five percent of the companies and the SMP 0:23:07.119 --> 0:23:12.080 five hundred directly tied part of incentive compensation to these 0:23:12.160 --> 0:23:15.840 non pecuniary ESG and DEE and I factors. And so 0:23:15.920 --> 0:23:19.119 when you look at the proxy season today and you 0:23:19.200 --> 0:23:22.960 see that black Rock and Bank are largely voted for, 0:23:23.440 --> 0:23:25.320 I think it might be that they voted for one 0:23:25.359 --> 0:23:26.160 hundred percent of the time. 0:23:26.160 --> 0:23:27.639 We're still confirming. 0:23:28.720 --> 0:23:33.920 The resolutions on the proxy ballot that were suggested by 0:23:34.119 --> 0:23:36.800 management with regards to ESG and d, E and I, 0:23:36.920 --> 0:23:40.200 but they largely voted against the ones that were put 0:23:40.240 --> 0:23:45.520 forth by nonprofits. Well, they've already implemented the stakeholder capitalism 0:23:45.520 --> 0:23:49.639 and ESG agenda by changing the incentive compensation structure. That 0:23:49.800 --> 0:23:51.320 was how you force behaviors. 0:23:51.440 --> 0:23:53.879 Okay, so they make management, they make management do it 0:23:53.920 --> 0:23:55.679 for them. They don't need the nonprofits to come up 0:23:55.720 --> 0:23:57.879 and put down new resolutions because they've already put the 0:23:57.880 --> 0:24:00.760 incentives in place to make sure that manage do it first. 0:24:01.960 --> 0:24:02.440 Exactly. 0:24:02.480 --> 0:24:05.560 So when we think about how do you actually restore 0:24:06.480 --> 0:24:10.600 value maximization across corporate America, you have to undo that. 0:24:11.160 --> 0:24:14.680 You have to undo that compensation system that's already been 0:24:15.080 --> 0:24:18.800 put in place. And when it comes to that, we 0:24:18.840 --> 0:24:21.359 pretty much stand alone currently as one of the to 0:24:21.480 --> 0:24:25.520 our knowledge, the only asset manager that's standing for re 0:24:25.800 --> 0:24:29.720 implementing shareholder capitalism across America. And so that's why I 0:24:29.800 --> 0:24:33.720 think this debate, this fight has a long ways to go. 0:24:34.480 --> 0:24:36.480 I'm with you on the fight. I'm a great believer 0:24:36.560 --> 0:24:39.840 in shareholder capitalism. But let's look at it another way 0:24:39.880 --> 0:24:42.280 for a minute. Why does it matter. Why does it 0:24:42.400 --> 0:24:46.520 matter if shareholders get slightly lower returns, but along the 0:24:46.600 --> 0:24:48.359 way the world becomes a better place. 0:24:49.720 --> 0:24:53.840 That's a decision for the government to decide, the people 0:24:53.880 --> 0:24:57.360 to decide. The people in a democracy decide. As an 0:24:57.400 --> 0:25:01.280 asset manager, we have a fiduciary duty to maximize value. 0:25:01.400 --> 0:25:05.199 It gets into kind of the why for myself of 0:25:05.320 --> 0:25:07.560 why did I get into this Even in the first place, 0:25:07.600 --> 0:25:11.240 I was at CalPERS, the largest pension fund in California, 0:25:11.520 --> 0:25:15.400 I joined there during the middle of the Great Financial Crisis, 0:25:15.440 --> 0:25:18.120 which I know in your conversation with Vivik you talked 0:25:18.119 --> 0:25:21.479 a little bit about how that Great Financial Crisis is 0:25:21.560 --> 0:25:25.880 really what brought the uprise of stakeholder capitalism at ESG 0:25:26.280 --> 0:25:30.119 in America, which I completely agree with and for myself, 0:25:30.760 --> 0:25:34.200 I was going to school finance major. My parents were 0:25:34.280 --> 0:25:37.760 law enforcement officers who had their pensions tied to CalPERS, 0:25:38.160 --> 0:25:41.800 and great Financial crisis happens in the funded ratios of 0:25:41.880 --> 0:25:46.640 pensions across America, across the world plummet, and I went 0:25:46.680 --> 0:25:49.840 to CalPERS to try to help fix that problem, to 0:25:49.880 --> 0:25:54.679 maximize value, to provide a secure retirement pension to my parents. 0:25:54.920 --> 0:25:56.040 That was my why. 0:25:56.880 --> 0:26:01.520 And I got there and literally on day one there CalPERS, 0:26:01.560 --> 0:26:05.960 the board had forced the pension to divest from tobacco stocks, 0:26:06.359 --> 0:26:09.760 and it was a decision that even almost everybody in 0:26:09.800 --> 0:26:13.480 the investment staff did not want to do, pushed back against, 0:26:13.560 --> 0:26:16.680 but the board made it happen anyways, and I think 0:26:16.720 --> 0:26:20.200 that's a lot of what happens is I didn't feel 0:26:20.720 --> 0:26:22.960 some might say, you know, CalPERS is the tip of 0:26:23.000 --> 0:26:27.200 the ESG you know movement and Blackrock State Street vanguard. 0:26:27.200 --> 0:26:30.240 They're the they're the weight behind them. But but you 0:26:30.280 --> 0:26:32.120 know the a lot of these pensions are the tip 0:26:32.119 --> 0:26:32.679 of the movement. 0:26:33.080 --> 0:26:33.800 Well, I didn't. 0:26:33.840 --> 0:26:36.840 Actually, I do believe that's true, but I don't believe 0:26:36.840 --> 0:26:40.120 it's true at the investment staff level. I think there 0:26:40.280 --> 0:26:44.960 there is mostly a commitment to fiduciary duty, and that's 0:26:44.960 --> 0:26:47.320 part of what gives me hope that we actually can 0:26:47.560 --> 0:26:51.560 succeed if this is worded well, and it's not worded 0:26:51.600 --> 0:26:53.359 in a way of don't look at a risk factor 0:26:53.400 --> 0:26:55.800 but maximize value. 0:26:56.200 --> 0:26:58.160 That is your purpose period. 0:26:58.760 --> 0:27:01.280 Is there any sector that you would invest in that 0:27:01.400 --> 0:27:03.359 you find genuinely distasteful? 0:27:03.400 --> 0:27:03.719 I have one. 0:27:03.760 --> 0:27:07.119 It's the house building sector in the UK. The houses 0:27:07.160 --> 0:27:08.960 that they build us to such a pool and quality 0:27:09.000 --> 0:27:11.119 and so absolutely horrible. I always think to myself, I 0:27:11.160 --> 0:27:14.480 have a moral aversion to the housebuilding sector, which, given 0:27:14.480 --> 0:27:16.480 that I have a moral aversion to almost very little 0:27:16.480 --> 0:27:18.919 else and investing, everyone always thinks is slightly odd. But 0:27:19.119 --> 0:27:21.360 I just think there's such a distasteful group of companies. 0:27:21.400 --> 0:27:23.560 Is there any group of companies that do you feel 0:27:23.600 --> 0:27:24.320 similarly about. 0:27:25.040 --> 0:27:28.840 I grew up with the same I grew up as 0:27:28.880 --> 0:27:31.399 a fixed income manager and the fixed income there is 0:27:31.400 --> 0:27:34.119 a saying that there's no bad bonds, there's only bad pritices, 0:27:34.480 --> 0:27:38.320 and so absolutely, when it comes to prices or an 0:27:38.320 --> 0:27:41.919 outlook on a sector or companies, yes, but when it 0:27:41.960 --> 0:27:45.600 comes to if the price is right, I believe in 0:27:45.800 --> 0:27:49.920 asset management it's kind of like a sport. Our job 0:27:50.000 --> 0:27:53.720 is to maximize risk adjusted returns and to do that, 0:27:53.760 --> 0:27:56.560 you can't exclude a sector. 0:27:56.200 --> 0:27:58.399 And everything else is the government's responsibility. 0:27:58.880 --> 0:28:03.200 Yeah, and I think that you can have open conversations obviously, 0:28:03.280 --> 0:28:06.000 like there's no reason that we can't have open conversations 0:28:06.000 --> 0:28:10.159 about trade offs. Right if you implement some sort of 0:28:10.200 --> 0:28:13.639 regulation that might constrain returns and it might be better 0:28:13.640 --> 0:28:17.000 for society. That is, for the citizens to decide the 0:28:17.080 --> 0:28:20.679 rules of which asset management operates in, the rules of 0:28:20.720 --> 0:28:23.960 which corporations operate in. And there's no reason that we 0:28:24.000 --> 0:28:26.919 can't have an open conversation about some of those trade offs. 0:28:27.119 --> 0:28:30.080 But once the rules are set, our job is to 0:28:30.119 --> 0:28:31.000 maximize value. 0:28:34.320 --> 0:28:37.639 Okay, let's talk about how you are investing now. I 0:28:37.800 --> 0:28:41.360 am very interested in your most recent ETF launch because 0:28:41.360 --> 0:28:42.680 this is what you do, right, it is maybe an 0:28:42.680 --> 0:28:46.520 ETF business the launch of a new business called Fang 0:28:46.560 --> 0:28:49.600 two point zero ETF. Now, I've written about the new 0:28:49.680 --> 0:28:52.480 Fangs before, but tell us about differently your point of view, 0:28:52.480 --> 0:28:55.160 Who are what are the new Fangs and why have 0:28:55.200 --> 0:28:56.960 you created this ETFEA. 0:28:57.080 --> 0:29:01.600 Our first several ETFs were more about market equity beta 0:29:02.240 --> 0:29:06.120 with a corporate governance differentiator to get foot corporations focused 0:29:06.160 --> 0:29:11.280 on value maximization. But I'm an investor at heart and 0:29:11.360 --> 0:29:14.480 have have many views, and I think there's many secular 0:29:14.600 --> 0:29:18.040 changes that are happening right now are well underway, and 0:29:18.160 --> 0:29:22.960 one of them is persistently higher inflation over the next 0:29:23.040 --> 0:29:28.640 market cycle, and another one is a trend of deglobalization 0:29:29.360 --> 0:29:32.000 that I think is pretty well underway. And then I 0:29:32.040 --> 0:29:37.400 think both of those contribute to higher geopolitical tensions. And 0:29:37.480 --> 0:29:42.560 so those are the macro secular environment that we see 0:29:42.600 --> 0:29:46.160 happening over the next five to ten years. And I 0:29:46.160 --> 0:29:51.720 think that changes which sectors have telwinds that could lead 0:29:51.760 --> 0:29:54.400 to out performance. And so if we think about the 0:29:54.440 --> 0:29:59.600 prior fifteen years, you had low interest rates, quantitative easing 0:29:59.640 --> 0:30:04.040 program that were very supportive of the growth sector, and 0:30:04.840 --> 0:30:08.440 in the growth sector, the Fang tech stocks were among 0:30:08.520 --> 0:30:13.360 the best performing stocks. The current secular trends, I think 0:30:13.440 --> 0:30:18.520 support five different sectors, and those sectors are fossil fuels, 0:30:19.000 --> 0:30:25.880 aerospace and defense, agriculture, nuclear energy, and then gold and 0:30:25.960 --> 0:30:30.560 precious metals. So we created a new ETF. It's thematic 0:30:30.600 --> 0:30:35.640 ETF that holds those five sectors, the new FANG. We 0:30:35.720 --> 0:30:38.480 call it FANG two point zero. 0:30:38.640 --> 0:30:41.280 From any ESG point of view, almost all of these 0:30:41.320 --> 0:30:43.720 are things that would previously have been considered to be 0:30:44.000 --> 0:30:46.400 very anti ESG and people wouldn't have been keen on it. 0:30:46.480 --> 0:30:49.160 But you look at them again now fossil fuels people 0:30:49.200 --> 0:30:51.200 are coming around to the idea that perhaps we've tried 0:30:51.240 --> 0:30:53.520 to go net zero a little bit too fast, and 0:30:53.560 --> 0:30:55.440 that fossil fuels are going to be part of our 0:30:55.560 --> 0:30:58.600 energy makeup almost indefinitely, so we mustn't be too mean 0:30:58.600 --> 0:31:01.320 to them because we need them. Zerospace, you know, defense, 0:31:01.440 --> 0:31:04.880 until well not even eighteen months ago, was considered to 0:31:04.880 --> 0:31:08.160 be an absolute no no in any ESG portfolio. But now, 0:31:08.200 --> 0:31:11.840 of course defense is considered to be a genuine social good. 0:31:11.880 --> 0:31:14.840 Bit of a shift there. Agriculture is still working away around, 0:31:14.920 --> 0:31:18.040 aren't we, and nuclear as well, So you know, you 0:31:18.080 --> 0:31:20.720 could have advertised this not as Fang two point zero, 0:31:20.760 --> 0:31:23.600 but as the anti ESG portfolio. 0:31:24.400 --> 0:31:25.400 You might be able to. 0:31:25.520 --> 0:31:27.440 But it's pretty surprising to me, and it's one of 0:31:27.520 --> 0:31:29.800 the things we've talked about since day one of Strive, 0:31:29.880 --> 0:31:35.560 specifically around nuclear energy, that nuclear energy should not be 0:31:35.760 --> 0:31:39.760 something that's considered anti ESG. It actually should be considered 0:31:40.600 --> 0:31:45.280 very pro ESG as the most reliable, scalable source of 0:31:45.360 --> 0:31:49.320 clean energy that we know and obviously has been constrained 0:31:49.320 --> 0:31:55.000 from through regulation. We see some shifting winds there and 0:31:55.800 --> 0:32:00.680 a little bit more acceptance of nuclear in the es movement, 0:32:01.240 --> 0:32:04.920 But for ourselves, we also think that nuclear represents a 0:32:04.960 --> 0:32:10.040 great solution of reliable, sustainable energy. And obviously it's a 0:32:10.160 --> 0:32:15.520 very long cycle to get new nuclear plants live, but 0:32:15.920 --> 0:32:19.680 we see the winds moving in that direction, and so 0:32:19.800 --> 0:32:22.400 think that you know that sector can can benefit. So 0:32:22.840 --> 0:32:25.000 if you think about all the sectors combined, I think 0:32:25.040 --> 0:32:29.760 that's where it might be a little less anti EESG 0:32:29.960 --> 0:32:31.920 and on on on the gold side. 0:32:31.920 --> 0:32:33.720 It's sorry, can. 0:32:33.640 --> 0:32:36.120 I keep you with nuclear for a minute, because I'm 0:32:36.160 --> 0:32:38.520 absolutely with you that nuclear is a solution to the 0:32:38.520 --> 0:32:40.520 majority of our problems as long as we can get 0:32:40.600 --> 0:32:43.239 our electricity grids up to speed in order to you know, 0:32:43.280 --> 0:32:45.840 send the electricity that we create with our nuclear energy. 0:32:45.880 --> 0:32:48.960 So nuclear is the answer. So what what companies are 0:32:49.000 --> 0:32:51.040 held in the ETF that represent that theme. 0:32:52.240 --> 0:32:55.920 So it's it's based on a market cap weighting. And 0:32:56.480 --> 0:32:59.000 what it looks at right now is is it looks. 0:32:58.800 --> 0:33:01.440 At the bloom Berg Nuclear. 0:33:02.000 --> 0:33:08.719 Bi Index, and so it's it's primarily energy producers that 0:33:08.800 --> 0:33:11.840 have a majority of their energy from nuclear energy. 0:33:13.680 --> 0:33:15.080 Is mainly what it is right now. 0:33:15.080 --> 0:33:18.760 Okay, right, moving on to gold. Was it gold you're 0:33:18.760 --> 0:33:21.200 about talking about? I mean, I'm on a long term 0:33:21.240 --> 0:33:24.040 gold but long term gold bug and always ask questions 0:33:24.080 --> 0:33:26.800 about gold on this podcast, but it rarely comes up 0:33:26.880 --> 0:33:29.280 quite so early in the conversation. So this is exciting 0:33:29.320 --> 0:33:30.880 for my gold bug listeners. 0:33:32.480 --> 0:33:35.240 Well, historically I've been more of a over the last 0:33:35.240 --> 0:33:37.760 five years, more of a bitcoin bug than a gold bug. 0:33:37.800 --> 0:33:40.760 But when it comes to don't we don't like that on. 0:33:40.720 --> 0:33:42.600 This podcast, by the way, we don't really We don't 0:33:42.600 --> 0:33:43.360 really go for the biggin. 0:33:43.920 --> 0:33:45.880 It's it's okay, we don't. We don't have to agree 0:33:45.920 --> 0:33:46.440 on everything. 0:33:47.480 --> 0:33:50.720 But but when it comes to gold, it's it's precious 0:33:50.800 --> 0:33:55.480 metals miners more broadly than just gold. And so when 0:33:55.520 --> 0:33:58.640 I think about just bringing it back to the ESG 0:33:58.880 --> 0:34:04.000 anti es she, well, some of those miners are actually 0:34:04.160 --> 0:34:09.480 very important to support different industries that would be very 0:34:09.480 --> 0:34:12.759 friendly in the ESG movement that need batteries, right as 0:34:13.719 --> 0:34:18.600 an example, So it is primarily gold, but I think 0:34:18.719 --> 0:34:21.680 it kind of gets to some of the inconsistencies of 0:34:22.040 --> 0:34:25.880 the ESG movement is where does these batteries, Where do 0:34:25.960 --> 0:34:28.279 some of these solutions come from that are needed to 0:34:28.360 --> 0:34:34.759 support when solar, non reliable sources of energy, electric vehicles, 0:34:35.440 --> 0:34:40.319 those sorts of things, and that component of thing two 0:34:40.320 --> 0:34:42.480 point zero does have some of those stocks in it. 0:34:42.560 --> 0:34:45.040 And I think you're right that in one of the 0:34:45.040 --> 0:34:47.920 criticisms of some of these sources of energy, the reliable 0:34:47.920 --> 0:34:49.920 sources of energy, is that they're not as clean as 0:34:49.920 --> 0:34:54.120 they might appear. So that does support the anti ESG 0:34:54.280 --> 0:34:55.040 nature of it. 0:34:55.040 --> 0:34:56.800 It's interesting. There is a problem, you know, I was 0:34:56.840 --> 0:34:59.000 reading a art called the other day about how difficult 0:34:59.000 --> 0:35:01.319 it is for mining, the big mining companies to get 0:35:01.320 --> 0:35:04.719 employees these days. You know, nobody's studying mining engineering the 0:35:04.760 --> 0:35:06.960 young and not interested in the industry because they consider 0:35:07.000 --> 0:35:11.920 it to be a an unpleasant, dirty and environmentally unfriendly industry, whereas, 0:35:11.920 --> 0:35:14.600 of course they genuinely believe in the importance of the 0:35:14.719 --> 0:35:18.360 energy transition. Are young should be running towards these mines 0:35:18.920 --> 0:35:21.920 because we need the mining industry to get out the 0:35:21.960 --> 0:35:25.279 metals that are absolutely vital to make the batteries to 0:35:25.840 --> 0:35:28.160 make the transition work, if it's ever going to work. 0:35:28.239 --> 0:35:30.960 So the miners are one of the most important parts 0:35:31.080 --> 0:35:33.400 of the energy transition, but that's not how they're. 0:35:33.239 --> 0:35:37.719 Perceived, no, exactly, and I'm sure it's a lack of 0:35:37.800 --> 0:35:41.840 understanding there. And one of this last interesting things about 0:35:41.880 --> 0:35:46.560 the g the gold section sector within the thing two 0:35:46.560 --> 0:35:49.920 point zero is how do we think about just owning 0:35:49.960 --> 0:35:54.480 gold outright versus owning miners. Well, if you've been following 0:35:54.520 --> 0:35:56.560 gold and sounds like you have as a gold bug, 0:35:56.880 --> 0:35:59.719 you know that miners have not performed very well, have 0:35:59.800 --> 0:36:04.279 not kept up with gold itself in the gold rise, right, 0:36:04.360 --> 0:36:07.480 And and we've looked into that pretty deeply, and I 0:36:07.600 --> 0:36:10.680 think that there is an opportunity for a mean reversion 0:36:10.760 --> 0:36:15.120 trade to happen there and actually like owning the miners 0:36:15.120 --> 0:36:16.920 themselves over over gold. 0:36:16.960 --> 0:36:18.799 Okay, So holding gold for you is not about a 0:36:18.800 --> 0:36:21.400 hedge against a long term hedgi against inflation or anything 0:36:21.440 --> 0:36:24.279 like that. It's simply an investing equation. 0:36:25.080 --> 0:36:28.160 Holding holding the miners is, but holding but the g 0:36:28.560 --> 0:36:32.360 is will benefit I think both from the heightened inflation, 0:36:32.600 --> 0:36:36.200 but I think gold also benefits from heightened geo political 0:36:36.239 --> 0:36:37.120 tensions as well. 0:36:38.040 --> 0:36:40.520 Let's talk briefly about agriculture them, which is another one 0:36:40.560 --> 0:36:42.480 of them, another one of the things you hold on 0:36:42.560 --> 0:36:44.560 this fangs two point zero. How does that fit in? 0:36:45.520 --> 0:36:48.080 Well, if it's in in a couple of different areas. 0:36:48.280 --> 0:36:51.680 So we think that the ag sector will benefit from 0:36:51.880 --> 0:36:56.400 that outperform versus other sectors when it comes to sustained 0:36:56.520 --> 0:37:00.640 higher inflation. And the easy way to play that is 0:37:00.680 --> 0:37:04.759 pretty simple, and it's that the pricing power of the 0:37:04.840 --> 0:37:08.320 elasticity and price when it comes to our food supply 0:37:09.040 --> 0:37:11.120 is pretty simple to understand. It's going to be one 0:37:11.160 --> 0:37:15.680 of the last things that people will stop eating or 0:37:16.600 --> 0:37:19.040 and so we think that it's it's more of like 0:37:19.320 --> 0:37:22.759 a value we type sort of story and value We 0:37:22.840 --> 0:37:26.120 at the at the base layer of the actual food 0:37:26.120 --> 0:37:29.319 supply itself and think that you know, when you think 0:37:29.320 --> 0:37:33.880 about growth stocks versus value stocks, that that that's a 0:37:34.080 --> 0:37:37.520 that's a sector that just grows with the need for 0:37:37.600 --> 0:37:42.800 more food and it has ability to push higher prices 0:37:42.800 --> 0:37:47.399 directly to the consumer and and not get bogged down 0:37:47.480 --> 0:37:48.480 from higher inflation. 0:37:49.760 --> 0:37:52.319 Interesting does one of your other ETFs I wanted to 0:37:52.360 --> 0:37:54.800 ask you about, which is that your Emerging markets CTF 0:37:54.920 --> 0:37:59.120 is X China and you've written a bit about China risk. 0:37:59.800 --> 0:38:01.080 Can we talk about that a little bit? 0:38:01.840 --> 0:38:05.279 So when we think about X China hy x China, 0:38:05.600 --> 0:38:10.360 we make a statement that we see China risk as 0:38:10.680 --> 0:38:15.040 investment risk. And there's a lot of reasons why that 0:38:15.280 --> 0:38:19.200 is a big one is the geopolitical tension side and 0:38:19.640 --> 0:38:25.840 deglobalization in movements away from importing in to the US 0:38:26.120 --> 0:38:32.759 from China. But there's actually a deeper reason that I 0:38:32.800 --> 0:38:39.480 think makes China completely uninvestable in America, even if you 0:38:39.680 --> 0:38:42.319 discounted the China risk that I'd said and had a 0:38:42.640 --> 0:38:44.560 bowcase on China, bullview on China. 0:38:45.000 --> 0:38:48.120 And that gets into the securities. 0:38:47.760 --> 0:38:51.160 That an American investor can invest in when they investing 0:38:51.239 --> 0:38:57.480 in China, and the largest companies the most critical to 0:38:57.680 --> 0:39:03.080 China's natural national security interest like Ali Baba, like Tencent. 0:39:03.280 --> 0:39:07.360 As a US investor you cannot own true equity in 0:39:07.400 --> 0:39:11.720 those corporations. You can only own what's called a VIE, 0:39:12.040 --> 0:39:16.120 a variable interest entity. And what that is is it's 0:39:16.160 --> 0:39:20.200 a shell corporation, typically incorporated in the Cayman Islands. That's 0:39:20.200 --> 0:39:23.640 a pass through entity that where the profits would be 0:39:23.640 --> 0:39:26.759 passed through that entity and to the American investor. And 0:39:27.000 --> 0:39:30.080 the risk with that structure is because you are not 0:39:30.239 --> 0:39:35.640 a true owner of the actual equity, there's risk that 0:39:35.760 --> 0:39:39.719 even the SEC talks about that those entities could be 0:39:39.760 --> 0:39:43.280 written off for written to zero, while the actual true 0:39:43.440 --> 0:39:47.400 entity in China remains unharmed. The American investor can be 0:39:47.520 --> 0:39:52.200 wiped out. And we think that's that's classic G risk. 0:39:52.360 --> 0:39:54.840 And if we go to ESG terms governance risk, although 0:39:54.840 --> 0:39:58.080 I think in the ESG movement, G doesn't actually typically 0:39:58.080 --> 0:40:03.000 refer to true G risk, but that is unheedgeable governance risk. 0:40:03.480 --> 0:40:05.880 And we think that as an American it just makes 0:40:06.120 --> 0:40:10.799 China uninvestable. And and so we don't think that you 0:40:10.800 --> 0:40:15.040 should have China exposure as an American investor. 0:40:15.239 --> 0:40:18.840 At at any price. You said earlier, there's always a price, 0:40:19.239 --> 0:40:20.960 So no price for China. 0:40:21.360 --> 0:40:22.640 There's there's always a price. 0:40:22.680 --> 0:40:26.319 I mean, but this is really you know, zero to 0:40:26.400 --> 0:40:29.760 one risk, and I think I think that's that's really 0:40:29.880 --> 0:40:33.360 tough to head. If if they started trading at a 0:40:33.480 --> 0:40:36.840 ninety percent discount, maybe we could we could talk about it, 0:40:36.880 --> 0:40:39.160 but at that price, at that point, it's probably going 0:40:39.160 --> 0:40:39.600 to zero. 0:40:39.840 --> 0:40:43.040 Fair enough, Let's talk a little bit about the bond market, 0:40:43.080 --> 0:40:45.920 because you are really a bond investor, aren't you. I 0:40:45.960 --> 0:40:48.279 mean that's how you started, and you got You've got 0:40:48.280 --> 0:40:50.239 a couple of bond dtfs seven you yes, the Strive 0:40:50.360 --> 0:40:53.399 Total Return and the Strive Enhanced Income Short Maturity DF. 0:40:53.520 --> 0:40:55.399 So you're still involved in the bond market. You haven't 0:40:55.400 --> 0:40:57.080 gone completely out to the dark side. 0:40:59.040 --> 0:41:01.120 No. I I love the bond market. 0:41:01.520 --> 0:41:05.200 And so we just launched two bond ETFs in mid 0:41:05.320 --> 0:41:08.480 August of this year, like you said, a total return 0:41:09.000 --> 0:41:12.719 bond fund and then an Ultra short Enhanced Income bond fund. 0:41:13.239 --> 0:41:18.440 And both of those are actively managed products versus all 0:41:18.560 --> 0:41:21.600 of our equity products are passive. Although the FANG two 0:41:21.600 --> 0:41:24.960 point zero one is a passive thematic product, which is 0:41:25.000 --> 0:41:26.839 obviously a pretty pretty fun one. 0:41:26.800 --> 0:41:30.200 To talk about. On the bond side, it's completely active. 0:41:30.239 --> 0:41:31.240 So the total return. 0:41:31.120 --> 0:41:34.040 Bond fund, we're going toe to toe with the pimcos 0:41:34.080 --> 0:41:36.759 the double lines of the world, and kind of have 0:41:36.840 --> 0:41:39.759 a very similar setup for the structure of that fund. 0:41:39.800 --> 0:41:41.360 The top market out there there isn't it. I'm in 0:41:41.400 --> 0:41:43.799 the great bond ball market that we've will happily lived 0:41:43.800 --> 0:41:46.200 for over the last forty years is pretty much pretty 0:41:46.280 --> 0:41:47.799 much gone. Not coming back. 0:41:50.760 --> 0:41:51.960 It is, it is gone. 0:41:52.080 --> 0:41:57.080 And several friends and mentors spent their entire career and 0:41:57.239 --> 0:41:59.920 fixed income in a bond bull market and then retire 0:42:00.320 --> 0:42:03.200 when interest rates are at one percent. I applaud them 0:42:03.320 --> 0:42:05.560 for their their career timing. 0:42:06.880 --> 0:42:08.720 Would they just get so rich they sort of started, 0:42:08.800 --> 0:42:11.200 I'll go as just said, look, not career timing. 0:42:12.840 --> 0:42:14.839 Maybe maybe maybe a little bit of both. 0:42:15.440 --> 0:42:17.560 But but it is. It is a more difficult environment, 0:42:17.640 --> 0:42:21.400 right Like you're you're seeing correlations between equities and bonds 0:42:21.480 --> 0:42:23.480 become a little bit more mixed to where you know, 0:42:23.560 --> 0:42:26.879 for the last forty years you've had negative correlations that's 0:42:26.960 --> 0:42:31.880 been great for for returns of portfolios. It's a different environment. 0:42:32.040 --> 0:42:37.240 But my belief is that most portfolios, most individuals should 0:42:37.320 --> 0:42:40.080 have exposure to fixed income as part of a core 0:42:40.200 --> 0:42:43.360 portfolio holding. And so our our view is one of 0:42:44.239 --> 0:42:48.319 expecting for interest rates to remain elevated. Although right now 0:42:48.400 --> 0:42:52.480 we have a pretty neutral view on on duration over 0:42:52.520 --> 0:42:54.319 the rest of the year, and I think that short 0:42:54.400 --> 0:42:57.279 term there's there's some teil ones that could lead to 0:42:57.480 --> 0:43:00.000 a little bit of a bond rally, But we're actually 0:43:00.200 --> 0:43:02.919 positioned neutral when it comes to duration and or total 0:43:03.000 --> 0:43:07.360 return bond fund and positioning for an expectation eventually of 0:43:07.960 --> 0:43:09.760 yields to kind of continue to move higher. 0:43:10.239 --> 0:43:13.160 So when you say that people should still have exposure 0:43:13.239 --> 0:43:16.319 to bonds and some credit risk in their portfolios, you're 0:43:16.440 --> 0:43:19.719 not really talking about an old fashioned sixty to forty portfolio. 0:43:19.760 --> 0:43:21.440 It sounds like you wouldn't go anywhere near that at 0:43:21.480 --> 0:43:21.840 the moment. 0:43:23.160 --> 0:43:26.080 That really depends on that's not what we do. That 0:43:26.160 --> 0:43:27.400 depends on the individual. 0:43:28.000 --> 0:43:33.000 I think that generally, over the next market cycle, I 0:43:33.000 --> 0:43:38.120 would probably want to own less fixed income, but not none. 0:43:38.640 --> 0:43:41.919 I would want to own less growth stocks, but not none. 0:43:42.320 --> 0:43:45.520 I would want to own more value E stocks, and 0:43:45.960 --> 0:43:49.040 obviously we have a view of what within the VALUEEE 0:43:49.120 --> 0:43:53.960 around the thing two point zero stocks energy also just generally, 0:43:54.680 --> 0:43:58.279 but you still don't want obviously you're not going to 0:43:58.360 --> 0:44:00.400 want to go all in on those. It's more of 0:44:00.440 --> 0:44:03.239 an overweight versus the standard positions. 0:44:04.160 --> 0:44:06.840 If you had to pick one sector from all these fascinating, 0:44:06.960 --> 0:44:09.480 exciting sectors, and of course you would never have to 0:44:09.560 --> 0:44:11.880 do this and as not investment advice, but if you 0:44:12.000 --> 0:44:14.160 did have to pick one sector that you find the 0:44:14.280 --> 0:44:16.719 most interesting over the next decade or so from an 0:44:16.719 --> 0:44:18.040 investment point of view, what would it be? 0:44:18.960 --> 0:44:23.160 Definitely the energy sector, and that was why we launched 0:44:23.200 --> 0:44:26.239 our first fund as Drill. We are incredibly bullish, We 0:44:26.600 --> 0:44:30.040 remain incredibly bullish on the energy sector and think that 0:44:30.560 --> 0:44:34.880 the ESG movement is a contributing factor to why we 0:44:35.000 --> 0:44:37.560 are so bullish on the energy sector, as well as 0:44:37.600 --> 0:44:40.360 some of those secular trends that we talked about already. 0:44:41.000 --> 0:44:44.440 But deathitely had to choose one energy but when we 0:44:44.520 --> 0:44:47.120 think about the five of them in totality, they do 0:44:47.360 --> 0:44:50.640 have different tailwinds behind them, and when we think about 0:44:50.680 --> 0:44:55.640 portfolio diversification, that's why we like not just only owning 0:44:55.920 --> 0:44:59.040 one sector, but within them for sure, Energy O. 0:45:00.800 --> 0:45:03.160 I have questions, but they'll have to wait for another time. 0:45:04.000 --> 0:45:06.040 Let it never be said that we're not open minded 0:45:06.120 --> 0:45:09.080 on the Merin Talks Money podcast. Okay, final question. 0:45:09.840 --> 0:45:11.480 And I already know the answer to this, which is 0:45:11.560 --> 0:45:13.440 kind of irritating, but I'll ask it anyway. Because they 0:45:13.440 --> 0:45:15.440 ask everybody, You've got the whole one of them. As 0:45:15.480 --> 0:45:18.320 you know, we've changed the question slightly back to the beginning. 0:45:18.800 --> 0:45:21.359 We've started asking a new question, a slightly wider question. 0:45:21.440 --> 0:45:24.600 We used to ask everybody ten years bitcoin or gold, 0:45:25.120 --> 0:45:27.240 but now that rates are quite a lot, we've refined 0:45:27.239 --> 0:45:30.640 it and we asked ten years bitcoin, gold or cash. 0:45:33.120 --> 0:45:34.280 You can only choose one. 0:45:34.200 --> 0:45:37.520 You see, I will answer that question, but I'll say 0:45:37.560 --> 0:45:40.480 the timing of ten years makes it a little bit 0:45:40.480 --> 0:45:41.360 more challenging, as. 0:45:41.200 --> 0:45:45.040 It does, but it's not supposed to be easy, Matt. 0:45:45.239 --> 0:45:47.040 It's not supposed to be easy. 0:45:48.920 --> 0:45:52.640 But I would still go bitcoin. I know that you 0:45:52.680 --> 0:45:53.440 will disagree with that. 0:45:53.560 --> 0:45:55.680 No, it's not not be disagreeing. I think this is 0:45:55.960 --> 0:45:59.839 so exciting. You are the first person to ever take 0:46:00.040 --> 0:46:03.359 bitcoin over a ten year period. On this podcast, I'm 0:46:03.400 --> 0:46:06.480 going to extend this podcast by two minutes so you 0:46:06.600 --> 0:46:09.920 can explain to us why that is, Oh yours. 0:46:10.280 --> 0:46:14.000 Well, when it comes to the security of bitcoin, every 0:46:14.200 --> 0:46:18.759 single day, every single year that it exists without a 0:46:19.000 --> 0:46:22.080 hack in the actual code of bitcoin to me makes 0:46:22.360 --> 0:46:27.360 the riskiness of it over the next ten years decline. 0:46:27.719 --> 0:46:30.279 And so I think that's one reason that if you 0:46:30.360 --> 0:46:33.480 were to ask me the same question in twenty sixteen, 0:46:33.560 --> 0:46:37.080 when I first started getting into bitcoin after having followed 0:46:37.120 --> 0:46:39.200 it even for multiple years before that, just thinking it 0:46:39.320 --> 0:46:41.759 was a scam, I would have answered gold for sure, 0:46:41.920 --> 0:46:43.440 even though I was investing in it at the time 0:46:43.520 --> 0:46:46.480 more from a short term horizon. But when I think 0:46:46.520 --> 0:46:52.279 of acceptance of bitcoin as an asset to hold into 0:46:52.320 --> 0:46:54.319 the future, I think it's going nothing but up. When 0:46:54.320 --> 0:46:58.120 I think about the younger generation that are growing up 0:46:58.200 --> 0:47:01.960 that are much more digital native, I think that it's 0:47:02.000 --> 0:47:07.880 gonna change how the investors' millennials think about what they 0:47:07.920 --> 0:47:10.160 are investing in, and I think those are all going 0:47:10.239 --> 0:47:13.760 to be important tell whens to support long term investment 0:47:13.880 --> 0:47:16.480 in bitcoin. I mean, even if you look at you know, 0:47:16.520 --> 0:47:20.520 obviously we are rivals with Blackrock and talk about them 0:47:20.920 --> 0:47:24.719 in negative manners a lot. But on that same deal 0:47:24.760 --> 0:47:27.320 book conference that I talked about with you know, forcing 0:47:27.400 --> 0:47:30.440 behaviors and that I think he talked about bitcoin is 0:47:30.560 --> 0:47:34.160 only being a tool for money laundering, and now Blackrock 0:47:34.280 --> 0:47:37.040 is leading the charge to launch the first Bitcoin ETF. 0:47:37.520 --> 0:47:40.600 They have changed their views. Jamie Diamond has changed. 0:47:40.680 --> 0:47:42.560 It's starting to change views take a little bit more 0:47:42.600 --> 0:47:45.359 of a friendly approach towards bitcoin. And I think you're 0:47:45.360 --> 0:47:50.160 starting to see institutional adoption of bitcoin. And I think that, 0:47:50.560 --> 0:47:53.719 you know, the the return potential of bitcoin as it 0:47:53.920 --> 0:47:57.800 obviously matures and is trading that much higher prices, is 0:47:57.880 --> 0:48:00.640 not what it once was. Where in the case for 0:48:00.840 --> 0:48:03.120 one hundred x and the price of bitcoin, that's not 0:48:03.239 --> 0:48:05.480 a scenario that we want because that would probably be 0:48:05.760 --> 0:48:07.759 the felling of the US dollar. And that's not that's 0:48:07.800 --> 0:48:12.000 not a belief that I believe. It's something that's going 0:48:12.080 --> 0:48:14.759 to happen in the next ten years, hopefully never. But 0:48:15.200 --> 0:48:18.600 I do think that bitcoin can still outperform gold over 0:48:18.640 --> 0:48:22.960 the next ten years, and and and and and cash. 0:48:23.920 --> 0:48:26.200 I would not want to be a cash investor over 0:48:26.239 --> 0:48:27.040 the next ten years. 0:48:34.120 --> 0:48:36.759 Well, John, I thought that was completely fascinating. 0:48:36.840 --> 0:48:39.920 What did you think, Yeah, that's a really interesting I 0:48:39.920 --> 0:48:42.200 suppose you. I think it's I like you because it's 0:48:42.200 --> 0:48:44.840 going back to that sense that we should be worrying about, 0:48:45.360 --> 0:48:48.480 you know, the Milton Friedman thing of the thing that 0:48:48.560 --> 0:48:53.680 basically keeps a company honest is focusing on shareholder of value, 0:48:54.960 --> 0:48:56.719 and that is the one thing that you should be 0:48:56.800 --> 0:48:58.359 focusing on and the one thing. 0:48:58.320 --> 0:49:00.560 We can properly measure, one thing we can probably know 0:49:00.680 --> 0:49:01.480 is happening, and. 0:49:01.560 --> 0:49:04.480 Everything else should be how companies should behave and what 0:49:04.560 --> 0:49:06.800 they should do should be the responsibility of government. 0:49:06.880 --> 0:49:10.360 I mean, it's a it's a pretty compelling argument, isn't it. 0:49:11.480 --> 0:49:14.440 I Mean, the I mean, this was really weird thing 0:49:14.560 --> 0:49:16.080 is that we have a lost state of it in 0:49:16.160 --> 0:49:20.480 the fast place. But then that's said, that's what happens 0:49:20.520 --> 0:49:22.960 whenever you've got zero interest rates for so long and 0:49:23.360 --> 0:49:25.880 everything becomes detached from reality. 0:49:26.480 --> 0:49:28.799 I think kind of a luxury product, isn't it. Share 0:49:28.840 --> 0:49:30.960 price is all going up anyway, so you can you 0:49:31.040 --> 0:49:32.719 can do this stuff. And one of the things you 0:49:32.800 --> 0:49:35.400 talked about that I found kind of interesting was about 0:49:35.520 --> 0:49:37.200 how CEO. 0:49:37.120 --> 0:49:40.360 Pay is increasingly linked to ESG. 0:49:40.360 --> 0:49:43.719 Targets, so you know, you get extra money if you 0:49:43.960 --> 0:49:46.080 if you achieve this, that or that in the ESG 0:49:46.239 --> 0:49:48.880 metrics world of metrics, which is kind of meaningless anyway. 0:49:49.080 --> 0:49:51.680 Is it just a way to pay CEOs more, because 0:49:51.680 --> 0:49:54.400 we're was looking for ways to pay cz CEOs. 0:49:54.040 --> 0:49:56.200 More and more and more aren't we And the data 0:49:56.320 --> 0:49:56.840 shows that. 0:49:58.320 --> 0:50:03.000 ESG pay doesn't have any impact on financial performance over 0:50:03.080 --> 0:50:04.600 that matter, but as it doesn't. 0:50:04.360 --> 0:50:06.760 Make Yeah, I think that's a good points. There's always 0:50:06.840 --> 0:50:12.480 been that thing with chief execs that there's always ways 0:50:12.600 --> 0:50:15.800 to look for fluffyer methods and measure in the performance 0:50:16.320 --> 0:50:18.880 so it gets easy and easier for them to keep 0:50:18.960 --> 0:50:22.279 getting paid what they're getting paid. And yes, she's been 0:50:22.360 --> 0:50:25.279 kind of classic in that, and I don't I think 0:50:25.360 --> 0:50:27.560 that will continue to be the case for ever and 0:50:27.719 --> 0:50:30.360 never because it's always an incentive to find ways around that, 0:50:30.680 --> 0:50:34.040 but you just have to keep raining it in. And 0:50:34.120 --> 0:50:35.440 that's I mean, I like this and I like that. 0:50:35.520 --> 0:50:38.719 I also like the ideas that are in the portfolio, 0:50:40.480 --> 0:50:44.839 you know, I mean obviously, I mean they've they've raised 0:50:44.880 --> 0:50:47.160 an awful lot of money off the back of this, 0:50:48.280 --> 0:50:50.320 and you can see that that's definitely got something to 0:50:50.400 --> 0:50:53.800 do with the you know, the political side of things, 0:50:55.320 --> 0:50:58.960 because it's the founder, isn't it. Vivik Ramaswami is. 0:51:00.320 --> 0:51:02.960 The Gramaswami who we had a recording with the other day. 0:51:03.239 --> 0:51:04.759 I mean, I do think there's there's a lot of 0:51:04.840 --> 0:51:05.920 value in this and Obviously a. 0:51:05.920 --> 0:51:09.160 Lot of PR comes from from the connection with Ramaswami, 0:51:09.160 --> 0:51:11.719 who founded this company, And obviously they're getting a lot 0:51:11.760 --> 0:51:16.279 more attention than another relatively small asset manager would, which 0:51:16.360 --> 0:51:18.560 which by the way, comes at a price, because there's 0:51:18.600 --> 0:51:21.239 much more attention paid to some former employers who have 0:51:21.280 --> 0:51:24.480 filed lawsuits against the company in the last few months, 0:51:24.560 --> 0:51:27.600 or mistreating staff and putting employees to violate securities law, 0:51:27.680 --> 0:51:28.200 that kind of thing. 0:51:28.239 --> 0:51:31.759 And I would imagine you'd find a fairly large number 0:51:31.800 --> 0:51:34.920 of lawsuits against most big management companies fund management companies. 0:51:34.640 --> 0:51:36.440 But that's not really mentioned elsewhere. 0:51:36.520 --> 0:51:39.760 The company, by the way, inten vigorously defend itself from 0:51:39.840 --> 0:51:44.960 these lawsuits. But it's interesting that the PR that they're 0:51:45.040 --> 0:51:48.200 getting is not just making people look at them, but 0:51:48.360 --> 0:51:50.359 making people put money with them. 0:51:50.640 --> 0:51:52.759 Well yeah, and because if they don't, I mean, there 0:51:52.800 --> 0:51:55.600 seems you talked about of interesting. I mean, like nuclear 0:51:55.920 --> 0:51:58.960 is a good example, that's a particularly hot theme just now. 0:52:00.320 --> 0:52:03.360 And you know, you know, weirdly, you know, given that 0:52:03.600 --> 0:52:06.520 just sort of we're talking about this in the context 0:52:06.640 --> 0:52:10.360 of not being in very eesg I mean, nuclear is 0:52:10.360 --> 0:52:13.319 actually one of the greenest things that you could get 0:52:13.560 --> 0:52:15.880 as long as you you know, will to kind of 0:52:16.520 --> 0:52:21.120 rethink the kind of was Greenham common sort of like 0:52:21.239 --> 0:52:28.840 approach to the nuclear nuclear industry. So, I mean, you know, 0:52:28.920 --> 0:52:31.879 I could say that the themes are appealing as well, 0:52:33.680 --> 0:52:41.040 I'm not necessary I've got I mean, on the downsideide, well, 0:52:41.120 --> 0:52:43.240 it's just as a part of me that generally finds 0:52:43.360 --> 0:52:50.440 thematic ETFs a little bit unconvincing because I think that, 0:52:50.800 --> 0:52:54.200 you know, it's always the temptation to sell the story 0:52:54.719 --> 0:53:00.360 over the kind of content. But that's more just so 0:53:00.520 --> 0:53:01.200 let me ask you. 0:53:01.320 --> 0:53:03.759 John, Yeah, let me ask you if there was a 0:53:03.840 --> 0:53:06.800 Strive in the UK, what would be a candidate for 0:53:06.880 --> 0:53:08.200 your for a moment pension. 0:53:09.239 --> 0:53:14.800 Uh, well, that's a good question. I mean probably I 0:53:14.840 --> 0:53:19.160 would approve from Afar, but I probably wouldn't invest at 0:53:19.200 --> 0:53:23.640 the moment because I think, well there's I think there's 0:53:23.719 --> 0:53:26.800 just too many other I'd be more interested investing we 0:53:26.880 --> 0:53:30.200 had decent UK VWUME manager at the moment than invest 0:53:30.320 --> 0:53:32.359 in these themes specifically. 0:53:33.040 --> 0:53:34.920 Almost by default value, isn't it. 0:53:35.440 --> 0:53:37.640 Yeah, But in that case, that's where going with someone 0:53:37.719 --> 0:53:43.080 that was explicitly if you see what I know, I 0:53:43.120 --> 0:53:44.880 feel I feel kind of bad because I agree with 0:53:45.040 --> 0:53:48.720 the the the points that they'll make that he's making. 0:53:49.800 --> 0:53:53.279 It's just I've struggled to get excited about a pure 0:53:53.480 --> 0:53:57.880 sort of you know, thematic ETF provider is. It's just 0:53:58.120 --> 0:54:01.600 it's more it's more a a stale thing than anything else. 0:54:02.800 --> 0:54:05.160 Although maybe I'm just taking against them because you've always 0:54:05.160 --> 0:54:07.440 felt about instead and cool have you? 0:54:08.120 --> 0:54:09.520 That was a fun that. 0:54:11.520 --> 0:54:12.839 Was very much. 0:54:13.840 --> 0:54:15.640 I know I should have kept him on longer to 0:54:15.719 --> 0:54:18.920 explain to us for a bit more about why right. 0:54:19.040 --> 0:54:22.239 So that's a know from you on the basis that 0:54:22.920 --> 0:54:29.040 Matt Cole believes in bitcoin. Thanks John, thanks for listening 0:54:29.080 --> 0:54:30.399 to this week's Marin Talks Money. 0:54:30.480 --> 0:54:32.600 We'll be back next week in the meantime. If you 0:54:32.840 --> 0:54:34.360 like our show, and I really hope you. 0:54:34.400 --> 0:54:38.080 Do, rate, review, and subscribe wherever you listen to podcasts. 0:54:38.400 --> 0:54:40.880 This episode was listed by me Marren Sunset Web. It 0:54:41.000 --> 0:54:44.200 was produced by Summer Sadi. Additional editing by Blake Maples. 0:54:44.320 --> 0:54:46.320 Special thanks to Matt Cole and John Stepp at the 0:54:46.360 --> 0:54:46.759 bed time. 0:54:47.080 --> 0:54:49.400 And finally, do be sure to sign up to John's 0:54:49.440 --> 0:54:51.040 daily newsletter, Money Distilled. 0:54:51.200 --> 0:54:53.759 It's very good and the link is in the show notes.