1 00:00:02,720 --> 00:00:10,000 Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. Hello and welcome to 2 00:00:10,039 --> 00:00:13,080 Speaker 1: The Money Stuff Podcast. You're a weekly podcast where we 3 00:00:13,119 --> 00:00:16,799 Speaker 1: talk about stuff related to money. I'm Matt Levian and 4 00:00:16,840 --> 00:00:18,919 Speaker 1: I write The Money Stuff Colm for Bloomberg Opinion. 5 00:00:19,079 --> 00:00:21,520 Speaker 2: And I'm Katie Greifeld, a reporter for Bloomberg News and 6 00:00:21,560 --> 00:00:23,000 Speaker 2: an anchor for Bloomberg Television. 7 00:00:24,960 --> 00:00:26,880 Speaker 1: Katie, you're you're off thanks week. 8 00:00:27,040 --> 00:00:30,600 Speaker 2: I'm so excited. It's my birthday on Sunday, which is huge. 9 00:00:30,800 --> 00:00:33,760 Speaker 2: It's my favorite day of the year. On Saturday, I'm 10 00:00:33,960 --> 00:00:36,519 Speaker 2: riding in a horse show. And then immediately, how is 11 00:00:36,560 --> 00:00:39,360 Speaker 2: that not your favorite day of You know, I'm not 12 00:00:39,400 --> 00:00:42,120 Speaker 2: going to the Olympics. It's a fact that I accepted 13 00:00:43,040 --> 00:00:45,960 Speaker 2: a couple of years ago. I'm doing this sour show 14 00:00:45,960 --> 00:00:49,760 Speaker 2: on Saturday, and then Saturday night we're leaving the country 15 00:00:49,920 --> 00:00:52,680 Speaker 2: for Ireland for my birthday. And I'm really excited. But 16 00:00:53,040 --> 00:00:58,320 Speaker 2: that means practically speaking that we just recorded next week's episode, 17 00:00:58,720 --> 00:01:01,760 Speaker 2: and now we're recording this week's episode, and we've already 18 00:01:01,760 --> 00:01:02,760 Speaker 2: spent too much time. 19 00:01:02,640 --> 00:01:05,240 Speaker 1: Together today, too much time together. But next week's episode 20 00:01:05,240 --> 00:01:08,440 Speaker 1: of a special episode of Guests, Yes, our second and 21 00:01:08,480 --> 00:01:12,759 Speaker 1: third guests huge talking about the subject deer to Katy's heart. 22 00:01:12,880 --> 00:01:15,840 Speaker 2: Good lord, it's about puzzle hunts. 23 00:01:15,880 --> 00:01:18,480 Speaker 1: It's about puzzles, which are cool, which are dear in 24 00:01:18,480 --> 00:01:21,720 Speaker 1: my heart, and somewhat less dear to Katy's hard than horses. 25 00:01:21,959 --> 00:01:25,479 Speaker 2: I was just happy for Matt listening to Matt having 26 00:01:25,520 --> 00:01:28,679 Speaker 2: fun as someone who's never done a puzzle hunt probably 27 00:01:28,720 --> 00:01:29,279 Speaker 2: never will. 28 00:01:29,480 --> 00:01:33,840 Speaker 1: It's for the large subset of money stuff fans who 29 00:01:34,000 --> 00:01:35,679 Speaker 1: are also a puzzle hunt fans, and. 30 00:01:36,120 --> 00:01:38,560 Speaker 2: For them you want to learn about puzzle value and 31 00:01:38,560 --> 00:01:40,480 Speaker 2: respect all those people that are like puzzle hunts. 32 00:01:40,600 --> 00:01:47,520 Speaker 1: It's amazing, Katy. I saw you this afternoon checking your furrow, 33 00:01:47,600 --> 00:01:47,800 Speaker 1: and k. 34 00:01:48,120 --> 00:01:52,040 Speaker 2: I actually was. I was inspired to after reading about 35 00:01:52,040 --> 00:01:53,920 Speaker 2: basic capital, which you wrote about in one of this 36 00:01:53,960 --> 00:01:59,360 Speaker 2: week's Money Stuff basically four dollars of leverage. Yeah, for 37 00:01:59,400 --> 00:02:02,160 Speaker 2: everyone dollar that you invest, what could go wrong? 38 00:02:03,640 --> 00:02:05,360 Speaker 1: I didn't actually know this when I wrote this, but like, 39 00:02:05,360 --> 00:02:07,880 Speaker 1: there's a fascinating history of this idea, right. So the 40 00:02:07,960 --> 00:02:11,880 Speaker 1: idea is that when you are a young person, you 41 00:02:11,919 --> 00:02:14,200 Speaker 1: invest a little bit of money in the stock market, 42 00:02:14,280 --> 00:02:16,440 Speaker 1: and then as you get older, you move up in 43 00:02:16,480 --> 00:02:18,520 Speaker 1: your career and you start investing more money, and so 44 00:02:18,560 --> 00:02:21,480 Speaker 1: by the end of your career, you are investing more 45 00:02:21,480 --> 00:02:23,440 Speaker 1: of your money is in stocks than at the beginning 46 00:02:23,560 --> 00:02:26,520 Speaker 1: of your career. And if you think about this from 47 00:02:26,560 --> 00:02:29,560 Speaker 1: a theoretical perspective, you will think you should have more 48 00:02:29,600 --> 00:02:31,919 Speaker 1: money in the stock market early on and relatively less 49 00:02:31,960 --> 00:02:35,040 Speaker 1: money later on, right that you should diversify your stock 50 00:02:35,040 --> 00:02:38,720 Speaker 1: market risk by taking more of that risk early instead 51 00:02:38,720 --> 00:02:40,520 Speaker 1: of taking like almost all of it at the end. 52 00:02:40,960 --> 00:02:43,080 Speaker 1: And so people think about this theoretically, and there's a 53 00:02:43,200 --> 00:02:45,079 Speaker 1: sort of well known two thousand and eight paper by 54 00:02:45,400 --> 00:02:48,440 Speaker 1: Ian Ayres and Barry Nelbuff that Ianire's taught at the 55 00:02:48,480 --> 00:02:50,639 Speaker 1: Lost cal I went to basically saying, like, what you 56 00:02:50,680 --> 00:02:54,480 Speaker 1: should do is you should lever up your investments early 57 00:02:54,520 --> 00:02:56,720 Speaker 1: on your retirement investments. Early on, you should take a 58 00:02:56,760 --> 00:02:59,359 Speaker 1: margin loan from your brokerage or like buy long dated 59 00:02:59,440 --> 00:03:02,840 Speaker 1: call options that kind of look like levered features. And 60 00:03:02,880 --> 00:03:05,160 Speaker 1: you should have more than one hundred percent of your 61 00:03:05,200 --> 00:03:06,840 Speaker 1: money in the stock market early on, and then have 62 00:03:06,960 --> 00:03:08,680 Speaker 1: less than hundred percent of your unning the stock market 63 00:03:08,720 --> 00:03:11,200 Speaker 1: later on. And that's going to like smoothier returns over 64 00:03:11,240 --> 00:03:16,080 Speaker 1: time and give you better returns than if you just 65 00:03:16,520 --> 00:03:18,760 Speaker 1: invested your cash as it came in over the course 66 00:03:18,800 --> 00:03:20,960 Speaker 1: of your career and they wrote this paper. If you 67 00:03:21,000 --> 00:03:23,519 Speaker 1: look at it on like SSRN, the date on the 68 00:03:23,560 --> 00:03:30,080 Speaker 1: paper is like May two thousand and eight, which, yeah, 69 00:03:30,240 --> 00:03:32,280 Speaker 1: after I wrote about like the basic capital idea, a 70 00:03:32,280 --> 00:03:34,400 Speaker 1: couple of people email me. There's a famous post on 71 00:03:34,440 --> 00:03:37,960 Speaker 1: the bogel Heads investing for him, where like this grad 72 00:03:38,040 --> 00:03:42,680 Speaker 1: student did this starting like two thousand and seven, and 73 00:03:42,680 --> 00:03:44,840 Speaker 1: he just ran into a buzz saw, like he lost 74 00:03:44,880 --> 00:03:46,680 Speaker 1: all of his money and then like a little bit 75 00:03:46,680 --> 00:03:48,560 Speaker 1: more than all of his money because he had borrowed 76 00:03:48,560 --> 00:03:50,760 Speaker 1: to do it. Yeah, I think he got better over 77 00:03:50,800 --> 00:03:52,400 Speaker 1: time because, like you know, the point of this is 78 00:03:52,440 --> 00:03:54,600 Speaker 1: like you're sort of spreading your risk, and so he 79 00:03:54,760 --> 00:03:58,640 Speaker 1: just unfortunately took a lot of risk going into a 80 00:03:58,760 --> 00:04:01,520 Speaker 1: great financial crisis. But then he got better. But anyway, 81 00:04:01,560 --> 00:04:05,040 Speaker 1: that's the idea. And for various reasons, including that this 82 00:04:05,160 --> 00:04:07,000 Speaker 1: idea had to brief a vogue in two thousand and 83 00:04:07,000 --> 00:04:09,760 Speaker 1: eight before beking a terrible idea. There's not like a 84 00:04:09,800 --> 00:04:13,240 Speaker 1: ton of implementations of it, but basic Capital, which Susanne 85 00:04:13,240 --> 00:04:16,799 Speaker 1: Willie at Plumberg wrote about this week, they are doing 86 00:04:16,839 --> 00:04:19,480 Speaker 1: a sort of implementation of it where they will let 87 00:04:19,520 --> 00:04:24,120 Speaker 1: you borrow money to lever up your furrow NK. And 88 00:04:24,880 --> 00:04:27,400 Speaker 1: the pitch is that you're borrowing the money in like 89 00:04:27,480 --> 00:04:31,400 Speaker 1: kind of a nicer way than broker margin loans, Like 90 00:04:31,440 --> 00:04:33,480 Speaker 1: they give you a term loan, there's no margin calls. 91 00:04:33,600 --> 00:04:35,680 Speaker 1: If like your stocks go down, they're like, that's fine, 92 00:04:35,839 --> 00:04:39,120 Speaker 1: just wait five years, they'll come back. So it's an 93 00:04:39,160 --> 00:04:40,880 Speaker 1: interesting idea in that respect. 94 00:04:41,080 --> 00:04:43,440 Speaker 2: It's interesting that friend of the show Bill Ackman is 95 00:04:43,480 --> 00:04:46,040 Speaker 2: an investor here only because it seems like we've been 96 00:04:46,040 --> 00:04:48,120 Speaker 2: talking about him for several weeks in a row and 97 00:04:48,200 --> 00:04:51,200 Speaker 2: I wanted to say his name again. The way this works, though, 98 00:04:51,320 --> 00:04:54,520 Speaker 2: is that most of your exposure is to credit. It's 99 00:04:54,560 --> 00:04:56,200 Speaker 2: not actually in stocks. 100 00:04:55,920 --> 00:04:58,080 Speaker 1: Right, This is what I wrote about. Like it's like 101 00:04:58,120 --> 00:04:59,680 Speaker 1: you sort of like you like wake up in the 102 00:04:59,680 --> 00:05:01,440 Speaker 1: middle of and you're like, oh, people should be able 103 00:05:01,440 --> 00:05:03,240 Speaker 1: to get photo one levers on their four own case 104 00:05:03,760 --> 00:05:05,400 Speaker 1: and you'll come into the office not okay, how do 105 00:05:05,440 --> 00:05:08,320 Speaker 1: we do that? And you're like, wow, we'll just lend 106 00:05:08,360 --> 00:05:10,560 Speaker 1: them eighty percent of the money of their portfolio, and 107 00:05:10,640 --> 00:05:13,080 Speaker 1: like that's probably fine, right, because like even if stocks 108 00:05:13,120 --> 00:05:15,000 Speaker 1: go down, like if you have a long term loan, 109 00:05:15,080 --> 00:05:17,000 Speaker 1: like the stocks will come back up. The idea of 110 00:05:17,080 --> 00:05:21,440 Speaker 1: like losing money on a five year loan against like 111 00:05:21,480 --> 00:05:24,200 Speaker 1: an eighty percent ltview loan against stocks is like, yeah, 112 00:05:24,240 --> 00:05:27,480 Speaker 1: it's not that big risk. But then you realize the 113 00:05:27,560 --> 00:05:31,039 Speaker 1: real problem is interest. Right, So you're making this loan 114 00:05:31,560 --> 00:05:33,800 Speaker 1: and it's going to charge interest, and the interest is 115 00:05:33,839 --> 00:05:36,520 Speaker 1: you know, like six seven percent a year. It's like 116 00:05:36,600 --> 00:05:38,400 Speaker 1: so pur plus two percent. So it's like, you know, 117 00:05:38,480 --> 00:05:41,920 Speaker 1: meaningful interest, and how are these people going to pay 118 00:05:41,960 --> 00:05:47,480 Speaker 1: that interest? And it's really just optically difficult to make 119 00:05:47,520 --> 00:05:49,040 Speaker 1: them pay the interest, right, Like you have to either 120 00:05:49,080 --> 00:05:52,039 Speaker 1: make them make contributions to the retirement fund every year 121 00:05:52,080 --> 00:05:54,400 Speaker 1: to pay the interest, or you have to like sell 122 00:05:54,440 --> 00:05:57,839 Speaker 1: some of their stocks to pay the interest, or or 123 00:05:58,240 --> 00:06:01,760 Speaker 1: or you can put enough of the money into fixed 124 00:06:01,800 --> 00:06:06,039 Speaker 1: income that pays a yield to pay the interest. And 125 00:06:06,080 --> 00:06:08,440 Speaker 1: if the fixed income stuff that you buy has a 126 00:06:08,480 --> 00:06:11,839 Speaker 1: higher yield than the like SOFA plus two percent that 127 00:06:11,880 --> 00:06:15,880 Speaker 1: you charge, then it's fine. But it's like if it 128 00:06:15,880 --> 00:06:17,720 Speaker 1: has like a twenty five percent higher you have to 129 00:06:17,720 --> 00:06:19,400 Speaker 1: put eighty percent of the stuff into fixed income, and 130 00:06:19,440 --> 00:06:22,800 Speaker 1: so like, in fact, basics proposal is like you put 131 00:06:22,800 --> 00:06:25,400 Speaker 1: something like eighty five percent of your portfolio into fixed income, 132 00:06:26,480 --> 00:06:30,440 Speaker 1: fixed income being maybe a bond fund, maybe maybe some 133 00:06:30,480 --> 00:06:31,479 Speaker 1: private credit. 134 00:06:31,279 --> 00:06:32,520 Speaker 2: Which I do want to talk about it. 135 00:06:32,560 --> 00:06:33,880 Speaker 1: Yeah, I want to try about it too. Yeah, put 136 00:06:33,880 --> 00:06:35,479 Speaker 1: some private credit your thro own k. But so the 137 00:06:35,480 --> 00:06:37,200 Speaker 1: point is that like you're levering up your frown K 138 00:06:37,400 --> 00:06:40,840 Speaker 1: and then kind of like walking most of that back 139 00:06:40,880 --> 00:06:43,080 Speaker 1: by putting it into bonds rather than stocks. So like, 140 00:06:43,120 --> 00:06:46,160 Speaker 1: instead of putting two hundred percent of your like retirement 141 00:06:46,160 --> 00:06:49,800 Speaker 1: account into stocks, you're putting like seventy five percent of 142 00:06:49,800 --> 00:06:52,400 Speaker 1: your retirement fund into stocks and another four hundred and 143 00:06:52,400 --> 00:06:55,200 Speaker 1: twenty five percent into credit. So it's like a nice 144 00:06:55,200 --> 00:06:58,440 Speaker 1: effort to achieve this interesting theoretical idea, but doesn't quite 145 00:06:58,480 --> 00:07:01,400 Speaker 1: accomplish exactly what you'd like ideal they wanted to accomplish. 146 00:07:01,480 --> 00:07:05,480 Speaker 2: Yeah, so you described this as cool in your school, which, by. 147 00:07:05,360 --> 00:07:07,760 Speaker 1: The way, you know as like I will say, like 148 00:07:07,800 --> 00:07:09,640 Speaker 1: I used to be a derivative structure, and like, so 149 00:07:09,760 --> 00:07:11,720 Speaker 1: often you're like, oh, this is a great idea we 150 00:07:11,720 --> 00:07:13,840 Speaker 1: should do, and then you're like it doesn't work practically, 151 00:07:14,000 --> 00:07:16,960 Speaker 1: and then you're like, what is the like awkward compromise 152 00:07:17,040 --> 00:07:19,120 Speaker 1: that kind of like captures the spirit of it? But 153 00:07:19,200 --> 00:07:22,240 Speaker 1: isn't quite what you wanted. This feels like that. They're like, yeah, okay, 154 00:07:22,280 --> 00:07:23,960 Speaker 1: I like this awkward compromise, well. 155 00:07:23,840 --> 00:07:27,360 Speaker 2: You calling it cool is already on the Basic Capital website. 156 00:07:27,360 --> 00:07:30,080 Speaker 2: It's attributed to Bloomberg. It's a great endorsement. 157 00:07:31,360 --> 00:07:35,280 Speaker 1: It's a reasonable compromise to achieve an abstract damn. 158 00:07:35,360 --> 00:07:38,960 Speaker 2: Yeah, so leverage to a lot of folks sound scary. 159 00:07:39,280 --> 00:07:42,040 Speaker 2: It kind of sounds scary to me. You're talking about I. 160 00:07:42,000 --> 00:07:44,000 Speaker 1: Feel like everyone's first instinct is like, oh my god, 161 00:07:44,040 --> 00:07:46,160 Speaker 1: you're borrowing money to your taking margin loans in your 162 00:07:46,160 --> 00:07:48,800 Speaker 1: free tim Again it's like yeah, fine, but like so okay, 163 00:07:48,800 --> 00:07:50,480 Speaker 1: this is like not margin leverage. So it's like you 164 00:07:50,520 --> 00:07:53,120 Speaker 1: have like a five year term loan, right, Like the 165 00:07:53,160 --> 00:07:55,480 Speaker 1: chance that your portfolio will end up twenty percent below 166 00:07:55,720 --> 00:07:59,520 Speaker 1: where you started and therefore your entire retirement savings will 167 00:07:59,520 --> 00:08:01,840 Speaker 1: be wiped out. They're not that big, but you know what, 168 00:08:01,920 --> 00:08:04,920 Speaker 1: they exist, right, there's a risk. The story suggests that 169 00:08:04,960 --> 00:08:06,560 Speaker 1: like most people who do this, like you know, they 170 00:08:06,640 --> 00:08:08,040 Speaker 1: dabble in it. They put a little bit into the 171 00:08:08,080 --> 00:08:09,720 Speaker 1: weird leverage thing, and then they put a lot into 172 00:08:09,760 --> 00:08:13,760 Speaker 1: like regular stuff. But yeah, like it amplifies your risk, 173 00:08:13,840 --> 00:08:16,680 Speaker 1: it amplifies your returns. I think the case is that 174 00:08:17,160 --> 00:08:22,840 Speaker 1: right now, virtually everybody it makes a huge concentrated that 175 00:08:23,240 --> 00:08:26,840 Speaker 1: with eighty percent leverage in their financial list. Not virtually everybody, 176 00:08:26,880 --> 00:08:28,720 Speaker 1: but like a lot of people in America buy a 177 00:08:28,720 --> 00:08:31,400 Speaker 1: house within eighty percent mortgage or sometimes more than eighty 178 00:08:31,400 --> 00:08:37,760 Speaker 1: percent mortgage, and they are taking a very concentrated leverage risk, 179 00:08:38,080 --> 00:08:40,360 Speaker 1: and if house prices declined by more than twenty percent, 180 00:08:40,440 --> 00:08:42,520 Speaker 1: they will lose all of the money they invested in 181 00:08:42,559 --> 00:08:45,160 Speaker 1: their house. Now, there are differences. One of them is 182 00:08:45,200 --> 00:08:46,760 Speaker 1: that you get to live in the house, whereas you 183 00:08:46,760 --> 00:08:49,160 Speaker 1: don't get to live in your stocks. But another difference is, 184 00:08:49,160 --> 00:08:52,360 Speaker 1: like traditionally it's hard to get like non callable leverage 185 00:08:52,600 --> 00:08:55,760 Speaker 1: on stocks and so your mortgage, if your house price 186 00:08:55,800 --> 00:08:58,679 Speaker 1: goes down, you don't really notice necessarily because like you're 187 00:08:58,720 --> 00:09:01,160 Speaker 1: just paying the mortgage for thirty years. If your side 188 00:09:01,200 --> 00:09:03,880 Speaker 1: prices go down, then you'll notice and you'll be like, oh, no, 189 00:09:04,240 --> 00:09:07,640 Speaker 1: the equity in my account is zero or whatever. But 190 00:09:08,320 --> 00:09:11,320 Speaker 1: this sort of trick here is to think about it 191 00:09:11,320 --> 00:09:14,320 Speaker 1: more like a mortgage and not worry that your stocks 192 00:09:14,320 --> 00:09:16,920 Speaker 1: have gone down, because like in thirty years they'll probably recover. 193 00:09:17,280 --> 00:09:19,480 Speaker 2: Yeah, I guess I have a hard time making my 194 00:09:19,520 --> 00:09:20,680 Speaker 2: brain work that way. 195 00:09:20,880 --> 00:09:23,280 Speaker 1: I think most people do. I think like everyone's natural 196 00:09:23,280 --> 00:09:26,440 Speaker 1: reaction is like, oh, this is so risky, But it 197 00:09:26,520 --> 00:09:28,719 Speaker 1: is in some ways riskier to have everyone have two 198 00:09:28,800 --> 00:09:31,880 Speaker 1: hundred percent of their networth concentrator in houses, and having 199 00:09:32,080 --> 00:09:34,439 Speaker 1: two hundred percent of your net worth in a diversified 200 00:09:34,520 --> 00:09:38,200 Speaker 1: portfolio of stock and credit investments is maybe safer than 201 00:09:38,280 --> 00:09:41,160 Speaker 1: having it all in house, but maybe not. I'm not 202 00:09:41,280 --> 00:09:44,240 Speaker 1: investment advice here, but I don't mind the leverage that much. 203 00:09:44,480 --> 00:09:47,079 Speaker 1: I mind the fact that it's not thocks, But you know, 204 00:09:47,080 --> 00:09:49,080 Speaker 1: I can't win them all, I will say. I will say. 205 00:09:49,360 --> 00:09:51,760 Speaker 1: The only thing is like, if you told me you 206 00:09:51,800 --> 00:09:54,800 Speaker 1: can get eighty percent LTV leverage against the SMP and 207 00:09:54,840 --> 00:09:57,400 Speaker 1: hold it for thirty years and then retire, I'd be like, Yeah, 208 00:09:57,400 --> 00:10:00,720 Speaker 1: that's a good product. If you told me me same 209 00:10:00,760 --> 00:10:03,240 Speaker 1: thing against the broad bond index, I'd be like, well, 210 00:10:03,280 --> 00:10:05,080 Speaker 1: that's a less good product. But it's like you're probably 211 00:10:05,120 --> 00:10:07,520 Speaker 1: not gonna lose all your money. Yeah, against the private 212 00:10:07,520 --> 00:10:10,360 Speaker 1: credit portfolio. Is there some chance that private credit is 213 00:10:10,440 --> 00:10:12,240 Speaker 1: like in a bubble that is going to burst? 214 00:10:12,400 --> 00:10:14,920 Speaker 2: Maybe you're definitely seeing more of those fears out there. 215 00:10:15,040 --> 00:10:17,200 Speaker 1: Yeah, I'm not like super worried about that, but like 216 00:10:17,200 --> 00:10:19,360 Speaker 1: you're right saying I will take eighty percent leverage on 217 00:10:19,400 --> 00:10:21,920 Speaker 1: a portfolio of private credit. There's not a lot of 218 00:10:22,200 --> 00:10:24,200 Speaker 1: history to kind of point to there. 219 00:10:24,480 --> 00:10:27,920 Speaker 2: It's interesting to read this article this week about basic 220 00:10:27,960 --> 00:10:30,800 Speaker 2: capital and you know how much exposures there's going to 221 00:10:30,800 --> 00:10:32,920 Speaker 2: be to private credit in this because you also had 222 00:10:32,960 --> 00:10:36,000 Speaker 2: Empower come out this week Bloomberg News reporting that Empower 223 00:10:36,040 --> 00:10:39,240 Speaker 2: is going to start offering private assets, working with firms 224 00:10:39,280 --> 00:10:41,080 Speaker 2: such as Apollo and Franklin Templeton. 225 00:10:41,520 --> 00:10:43,040 Speaker 1: We talk about it every week. It's like there's a 226 00:10:43,120 --> 00:10:48,839 Speaker 1: gold rush to put private assets into frohen K's because 227 00:10:48,880 --> 00:10:54,959 Speaker 1: like there's a long running tradition in democratic administrations of 228 00:10:55,400 --> 00:10:59,560 Speaker 1: regulators being very skeptical of high fee products in FROH 229 00:10:59,640 --> 00:11:02,480 Speaker 1: and K, to the point that people kind of worry 230 00:11:02,559 --> 00:11:05,000 Speaker 1: that they have a fiduciary responsibility to only put index 231 00:11:05,080 --> 00:11:08,280 Speaker 1: ones in fur own case. Yeah, and now there is 232 00:11:08,400 --> 00:11:12,520 Speaker 1: this complete reversal where it's like, oh no, but people 233 00:11:12,559 --> 00:11:15,400 Speaker 1: want private assets in frow in case and obviously those 234 00:11:15,520 --> 00:11:17,959 Speaker 1: have high fees, and so now everyone's like let's put 235 00:11:18,120 --> 00:11:20,079 Speaker 1: high fee products into fur own case it's a real 236 00:11:20,240 --> 00:11:24,240 Speaker 1: gold rush. And that's the cynical take. Yeah, the sensible 237 00:11:24,280 --> 00:11:28,160 Speaker 1: take is like retirement savers do have thirty year time horizons, 238 00:11:28,200 --> 00:11:30,640 Speaker 1: and it's like really discouraged to take money out of 239 00:11:30,679 --> 00:11:32,959 Speaker 1: a four O NK before retirement. So it's like, if 240 00:11:33,000 --> 00:11:35,360 Speaker 1: you have a long time horizon, you should be taking 241 00:11:35,880 --> 00:11:38,839 Speaker 1: I liquidity, you should be taking some risk. It's truly 242 00:11:38,960 --> 00:11:40,600 Speaker 1: the case that Furro and k's are a good place 243 00:11:40,640 --> 00:11:41,600 Speaker 1: to put private assets. 244 00:11:41,640 --> 00:11:44,240 Speaker 2: It's just like, if I have a thirty year time horizon, 245 00:11:44,840 --> 00:11:47,120 Speaker 2: why would you want to be anywhere but stocks? Like 246 00:11:47,240 --> 00:11:49,400 Speaker 2: sort of one of the pitches for private credit is 247 00:11:49,480 --> 00:11:52,079 Speaker 2: that it's diversified. It you know, is non correlated to 248 00:11:52,120 --> 00:11:54,440 Speaker 2: the S and P five hundred. But if I'm investing 249 00:11:54,520 --> 00:11:57,520 Speaker 2: over that time period and I'm going to get probably 250 00:11:57,960 --> 00:12:00,760 Speaker 2: low double digit returns in the sa P five hundred 251 00:12:01,080 --> 00:12:03,439 Speaker 2: on an annualized basis, and I'm investing for thirty years, 252 00:12:03,480 --> 00:12:05,840 Speaker 2: I'd probably still just want US stock exposure. 253 00:12:06,320 --> 00:12:08,840 Speaker 1: You can't guarantee that you're getting the double visit returns 254 00:12:08,880 --> 00:12:13,480 Speaker 1: on US stock exposure, and diversifying credit is also also 255 00:12:13,679 --> 00:12:16,320 Speaker 1: there's this line that I quote all the time someone says, 256 00:12:16,360 --> 00:12:18,640 Speaker 1: if you can get like twelve to fourteen percent returns 257 00:12:18,679 --> 00:12:20,319 Speaker 1: and private credit, what else would you want to do 258 00:12:20,360 --> 00:12:25,480 Speaker 1: with your life? And if you can get twelve percent 259 00:12:26,840 --> 00:12:31,960 Speaker 1: from like pretty solid private credit products, like why would 260 00:12:31,960 --> 00:12:33,120 Speaker 1: you want twelve percent from the. 261 00:12:33,200 --> 00:12:35,439 Speaker 2: SMP Because I feel like you're going to get it 262 00:12:36,040 --> 00:12:40,040 Speaker 2: for lower fees And that's that's a big reason why. 263 00:12:40,480 --> 00:12:43,200 Speaker 2: And I can see it every single day. I mean, 264 00:12:43,240 --> 00:12:44,600 Speaker 2: this was the first time I checked my four one 265 00:12:44,640 --> 00:12:46,400 Speaker 2: K in quite a long time. But I mean history 266 00:12:46,440 --> 00:12:47,839 Speaker 2: as a guide, you're probably going to get that in 267 00:12:47,960 --> 00:12:49,480 Speaker 2: public equities, so like why bother? 268 00:12:50,120 --> 00:12:53,200 Speaker 1: But yeah, it was still shorts sentence. If you can 269 00:12:53,280 --> 00:12:56,680 Speaker 1: get twelve to fourteen percent returns in like senior secured 270 00:12:56,760 --> 00:12:58,439 Speaker 1: private credit, what else would you want to do with 271 00:12:58,480 --> 00:13:00,320 Speaker 1: your life? I explain a lot of things with fees. 272 00:13:00,559 --> 00:13:02,240 Speaker 1: I also feel like one of the main things that 273 00:13:02,400 --> 00:13:05,040 Speaker 1: is happening in the financial world right now is a 274 00:13:05,120 --> 00:13:06,839 Speaker 1: lot of people have that same thought of as you 275 00:13:06,880 --> 00:13:10,480 Speaker 1: can get twelve to fourteen percent in like first lean 276 00:13:10,559 --> 00:13:12,599 Speaker 1: private credit, what else would you want to do with 277 00:13:12,679 --> 00:13:15,559 Speaker 1: your life? That's why think it's hard to do private 278 00:13:15,600 --> 00:13:17,600 Speaker 1: equity because like if you're in private equity, you're paying 279 00:13:17,640 --> 00:13:20,360 Speaker 1: twelve to fourteen percent. If you're in private credit, you're 280 00:13:20,360 --> 00:13:21,360 Speaker 1: receiving it. It's a good deal. 281 00:13:21,720 --> 00:13:23,760 Speaker 2: But I hear you, Yeah, it doesn't quite swimmy. 282 00:13:23,960 --> 00:13:26,080 Speaker 1: I hear you. I think that, like if you ask 283 00:13:27,160 --> 00:13:32,000 Speaker 1: what should normal retirement savers be doing, I think there's 284 00:13:32,040 --> 00:13:35,520 Speaker 1: a decent case to be made that essentially zero costs 285 00:13:36,440 --> 00:13:41,160 Speaker 1: equity exposure to the US economy is a good product, 286 00:13:41,720 --> 00:13:46,240 Speaker 1: and very high cost exposure to leverage loans and other 287 00:13:46,559 --> 00:13:49,800 Speaker 1: weird structured stuff is a great product to sell to 288 00:13:49,880 --> 00:13:52,400 Speaker 1: you and possibly less good of a product for you 289 00:13:52,480 --> 00:13:55,120 Speaker 1: to buy. But that that's not obviously true. I do 290 00:13:55,200 --> 00:13:56,839 Speaker 1: want to say one other thing about private credit and 291 00:13:56,960 --> 00:14:00,839 Speaker 1: this basic capital structure. In basic capital, they lend you 292 00:14:01,120 --> 00:14:03,480 Speaker 1: eighty percent of the value of your portfolio. Where's that 293 00:14:03,559 --> 00:14:05,319 Speaker 1: many come from? I don't know. I think it might 294 00:14:05,360 --> 00:14:07,079 Speaker 1: come from their balance sheet, like early on, because they're 295 00:14:07,120 --> 00:14:10,120 Speaker 1: just ramping this up. But like in the long run, 296 00:14:10,760 --> 00:14:12,679 Speaker 1: they have to find a source of capital for that, 297 00:14:13,320 --> 00:14:14,800 Speaker 1: and I don't know who that source of capital is 298 00:14:14,840 --> 00:14:17,400 Speaker 1: going to be. I'd be surprised if it's like City Group. 299 00:14:18,240 --> 00:14:20,840 Speaker 1: I would not be surprised if it's private credit for 300 00:14:20,880 --> 00:14:23,000 Speaker 1: it or like you know, like private credit ish firms 301 00:14:23,040 --> 00:14:25,800 Speaker 1: like insurance companies or whatever. Like where I really want 302 00:14:25,840 --> 00:14:29,160 Speaker 1: this to go in the long run is like the robberos, 303 00:14:29,200 --> 00:14:32,920 Speaker 1: where private credit firms are lending it so for plus 304 00:14:32,960 --> 00:14:37,400 Speaker 1: two percent to retirement savers who then use those loans 305 00:14:37,680 --> 00:14:40,760 Speaker 1: to buy slightly spicier private credit stuff from the private 306 00:14:40,760 --> 00:14:43,400 Speaker 1: credit firms, like you know, the sover plus six percent. Yeah, 307 00:14:43,480 --> 00:14:45,640 Speaker 1: like that's a good financial product right there. 308 00:14:45,880 --> 00:14:48,920 Speaker 2: I also just wanted to talk about the founder really quickly, 309 00:14:49,000 --> 00:14:52,640 Speaker 2: Abdul all aside. He's thirty years old, which is also 310 00:14:52,720 --> 00:14:53,200 Speaker 2: pretty cool. 311 00:14:53,480 --> 00:14:55,560 Speaker 1: It's the right age to be thinking about these things. 312 00:14:55,920 --> 00:14:59,720 Speaker 2: Definitely lover my retirement service. He went to Harvard Business School, 313 00:14:59,800 --> 00:15:02,480 Speaker 2: that where he was when he pitched Bill Ackman. He 314 00:15:02,760 --> 00:15:06,640 Speaker 2: also previously worked in leverage finance at Goldman Sachs. So 315 00:15:06,800 --> 00:15:08,400 Speaker 2: of course you were going to think this is cool. 316 00:15:08,920 --> 00:15:12,680 Speaker 2: Oh yeah, this is like, this is like resume is 317 00:15:15,000 --> 00:15:33,400 Speaker 2: I Betty loves puzzle hunts. You know who else probably 318 00:15:33,560 --> 00:15:35,080 Speaker 2: loves puzzles. 319 00:15:35,920 --> 00:15:39,840 Speaker 1: The president of the private aquity club at every university. 320 00:15:39,960 --> 00:15:42,880 Speaker 2: I was going to say, these poor kids being hazed 321 00:15:42,960 --> 00:15:46,360 Speaker 2: at these student finance clubs. This really bumms me out. 322 00:15:46,760 --> 00:15:49,400 Speaker 1: It is not anything like what I experienced in college, 323 00:15:49,440 --> 00:15:50,920 Speaker 1: and it's like a sort of thing that I've been 324 00:15:51,120 --> 00:15:54,200 Speaker 1: noticing even for my time in banking. But yes, there's 325 00:15:54,240 --> 00:15:58,720 Speaker 1: a Business Insider article this week about college student finance clubs, 326 00:15:59,080 --> 00:16:03,680 Speaker 1: which are so insanely competitive. I think we've talked about 327 00:16:03,680 --> 00:16:05,560 Speaker 1: on this on the show. Like where it used to 328 00:16:05,600 --> 00:16:09,040 Speaker 1: be private equity firms would hire people after their two 329 00:16:09,120 --> 00:16:11,240 Speaker 1: year analyst program at a bank because they knew stuff, 330 00:16:11,240 --> 00:16:12,840 Speaker 1: and they'd like, you know, you'd work as an alis 331 00:16:12,880 --> 00:16:14,280 Speaker 1: at a bank, and then like you came to the 332 00:16:14,440 --> 00:16:16,640 Speaker 1: end of your two year program, you'd interview if your 333 00:16:16,680 --> 00:16:18,640 Speaker 1: new jobs, and private equity firms would interview and they'd 334 00:16:18,720 --> 00:16:20,840 Speaker 1: hire you. It was an advantage for a private equity 335 00:16:20,880 --> 00:16:23,480 Speaker 1: firm to interview two weeks earlier in the other firms. 336 00:16:23,520 --> 00:16:24,840 Speaker 1: And so I got pushed back to the point that 337 00:16:24,960 --> 00:16:28,120 Speaker 1: now people are interviewing before they start their banking jobs. 338 00:16:28,800 --> 00:16:31,160 Speaker 1: You graduate from college, you're about to start a banking job, 339 00:16:31,200 --> 00:16:33,320 Speaker 1: but first you interviewed a private equity firm where they 340 00:16:33,360 --> 00:16:35,680 Speaker 1: ask you like, so, how's your banking job, and you're like, wow, 341 00:16:35,720 --> 00:16:38,440 Speaker 1: I haven't been there yet. But so everything's getting pushed 342 00:16:38,440 --> 00:16:40,920 Speaker 1: back earlier. And like one symptom of that is that 343 00:16:41,480 --> 00:16:45,960 Speaker 1: being in these like exclusive elite finance clubs at universities 344 00:16:46,480 --> 00:16:49,680 Speaker 1: is like viewed as being important for your resume to 345 00:16:49,760 --> 00:16:52,600 Speaker 1: get the good finance jobs. And so you like interview 346 00:16:52,640 --> 00:16:56,080 Speaker 1: as a freshman and they like give you a bunch 347 00:16:56,120 --> 00:16:59,600 Speaker 1: of like difficult financial modeling questions, and like there's someone 348 00:16:59,600 --> 00:17:01,880 Speaker 1: in the story like cried during their interview in there. 349 00:17:02,040 --> 00:17:04,920 Speaker 1: If you make it through, then you're in the finance club. 350 00:17:05,240 --> 00:17:07,520 Speaker 1: And being in the finance club gives you the inside 351 00:17:07,560 --> 00:17:09,760 Speaker 1: track to getting the investment banging job that'll get you 352 00:17:09,800 --> 00:17:10,680 Speaker 1: the private equity job. 353 00:17:10,840 --> 00:17:13,880 Speaker 2: Yeah, it did read suspiciously like getting into greek life 354 00:17:14,160 --> 00:17:16,600 Speaker 2: at a college or university. Not that the college I 355 00:17:16,720 --> 00:17:20,080 Speaker 2: want to had greek life, but it did sound a 356 00:17:20,200 --> 00:17:22,760 Speaker 2: lot like rushing of fraternity. 357 00:17:23,920 --> 00:17:24,480 Speaker 1: Not a lot. 358 00:17:24,840 --> 00:17:28,320 Speaker 2: Well, it's hyper competitive, you pass out? Well, no, but 359 00:17:28,440 --> 00:17:30,440 Speaker 2: there's other forms of hazing. 360 00:17:30,359 --> 00:17:31,840 Speaker 1: Yeah, like DCF modeling. 361 00:17:32,040 --> 00:17:34,119 Speaker 2: Yeah, which would you rather do? 362 00:17:34,920 --> 00:17:37,800 Speaker 1: The story? It was like high school kids before they 363 00:17:37,880 --> 00:17:39,959 Speaker 1: arrive on campus are like, you know, you spend your 364 00:17:40,000 --> 00:17:43,480 Speaker 1: senior spring of high school studying up on finances that 365 00:17:43,560 --> 00:17:45,800 Speaker 1: you can get into the finance club your freshman year. 366 00:17:45,880 --> 00:17:46,720 Speaker 1: It seems insane. 367 00:17:46,960 --> 00:17:50,280 Speaker 2: Yeah, I did not do this. No, I was so 368 00:17:50,480 --> 00:17:53,160 Speaker 2: far from this. This just bummed me out. Like you said, 369 00:17:53,160 --> 00:17:55,760 Speaker 2: all of this is getting pushed forward, and I do wonder, 370 00:17:55,920 --> 00:17:57,600 Speaker 2: you know, what's the breaking point, Like when does it 371 00:17:57,640 --> 00:18:00,480 Speaker 2: turn in on itself? And I don't quite No, it 372 00:18:00,560 --> 00:18:02,880 Speaker 2: just feels like where does it go from here? There's 373 00:18:02,880 --> 00:18:05,399 Speaker 2: nowhere else to go if you have high school seniors 374 00:18:05,400 --> 00:18:07,200 Speaker 2: in their senior spring, you know, studying. 375 00:18:07,880 --> 00:18:08,800 Speaker 1: Of course there's somewhere else. 376 00:18:09,480 --> 00:18:10,320 Speaker 2: We're middle school. 377 00:18:10,440 --> 00:18:13,600 Speaker 1: Yes, It's like someone who was like, this is like 378 00:18:13,640 --> 00:18:16,040 Speaker 1: travel sports, right, Like, yeah, this is another thing that 379 00:18:16,080 --> 00:18:17,720 Speaker 1: big people talk about all the time. Like it used 380 00:18:17,720 --> 00:18:21,199 Speaker 1: to be that like kids played little league and they 381 00:18:21,320 --> 00:18:24,000 Speaker 1: played for their high school sports teams and it was 382 00:18:24,080 --> 00:18:27,760 Speaker 1: like sports and fun. And now it's like when you're seven, 383 00:18:27,840 --> 00:18:30,520 Speaker 1: you try out for like the travel team and you 384 00:18:30,640 --> 00:18:32,359 Speaker 1: have to spend all this money to be on the 385 00:18:32,440 --> 00:18:35,639 Speaker 1: travel team, and like it's pitched to parents as like 386 00:18:35,760 --> 00:18:38,359 Speaker 1: your kid will never get into college if they're not 387 00:18:38,520 --> 00:18:42,200 Speaker 1: on like the elite seven year old soccer team or whatever. 388 00:18:42,920 --> 00:18:45,399 Speaker 1: And I don't know, man, that's like everything, right, Like 389 00:18:45,560 --> 00:18:49,640 Speaker 1: all of these markers of status have become so competitive, 390 00:18:50,200 --> 00:18:52,760 Speaker 1: and the people witness that competition and are like, well, 391 00:18:52,800 --> 00:18:54,880 Speaker 1: if I start a year earlier then everyone else, I'll 392 00:18:54,880 --> 00:18:56,520 Speaker 1: have an advantage. And everyone does that, and so I 393 00:18:56,640 --> 00:18:59,320 Speaker 1: just moves further and further back until like the seven 394 00:18:59,359 --> 00:19:01,520 Speaker 1: year olds are trying out for like the Travel Financial 395 00:19:01,560 --> 00:19:02,160 Speaker 1: Modeling Team. 396 00:19:02,520 --> 00:19:04,120 Speaker 2: As a parent, does this stress you out? 397 00:19:04,640 --> 00:19:04,880 Speaker 1: Yeah? 398 00:19:05,320 --> 00:19:08,760 Speaker 2: Yeah, yeah I'm not a parent, but you know I'm thinking, well. 399 00:19:08,720 --> 00:19:10,399 Speaker 1: This is why I'm working with my daughter on her 400 00:19:10,480 --> 00:19:11,120 Speaker 1: DCF model. 401 00:19:12,160 --> 00:19:15,840 Speaker 2: Yeah. Yeah, I have a cat, so it doesn't quite 402 00:19:15,840 --> 00:19:17,800 Speaker 2: apply to me. But I think of little Xana do 403 00:19:18,160 --> 00:19:21,800 Speaker 2: in like I don't know, fifteen years and I worry. 404 00:19:21,560 --> 00:19:26,520 Speaker 1: About like great callback, I hope anything I should just 405 00:19:26,600 --> 00:19:30,600 Speaker 1: like little Xanada, You're you're. 406 00:19:30,520 --> 00:19:35,639 Speaker 2: Hypothetical named after the New Jersey American Dream Mall Medal. 407 00:19:36,480 --> 00:19:38,399 Speaker 2: That's kind of why I hope it turns in on itself, 408 00:19:38,440 --> 00:19:40,040 Speaker 2: because it just doesn't seem sustainable. 409 00:19:40,160 --> 00:19:41,600 Speaker 1: Yeah, people said that for a long time, had a 410 00:19:41,600 --> 00:19:43,680 Speaker 1: lot of things like college admissions and stuff, and the 411 00:19:43,840 --> 00:19:47,040 Speaker 1: ratchet keeps turning. I will say that, like there are 412 00:19:47,119 --> 00:19:49,520 Speaker 1: like counter trends to this, where like I always think 413 00:19:49,560 --> 00:19:55,040 Speaker 1: of like the very prestigious financial firms, you know, I 414 00:19:55,119 --> 00:19:58,320 Speaker 1: think of like Renaissance and Bridgewater and like to something 415 00:19:58,640 --> 00:20:01,479 Speaker 1: Chain Straight is like this. There's a notion that they 416 00:20:01,520 --> 00:20:05,200 Speaker 1: don't hire people from traditional Wall Street training. They don't 417 00:20:05,400 --> 00:20:07,600 Speaker 1: like MBAs or people from the street. They like to 418 00:20:07,680 --> 00:20:11,400 Speaker 1: hire people who are not tainted by Yeah, like traditional 419 00:20:11,480 --> 00:20:14,040 Speaker 1: Wall Street thinking. And it's weird for people to channel 420 00:20:14,080 --> 00:20:18,280 Speaker 1: themselves so intensely into traditional the traditional paths. But maybe 421 00:20:18,280 --> 00:20:20,480 Speaker 1: it's not that weird. Maybe those firms are outliers, you know, 422 00:20:21,240 --> 00:20:21,720 Speaker 1: pre med. 423 00:20:21,880 --> 00:20:24,320 Speaker 2: There's certain things you need to learn and know about 424 00:20:24,400 --> 00:20:26,960 Speaker 2: science to become a doctor. But I could see like 425 00:20:27,000 --> 00:20:29,440 Speaker 2: a Bridgewater thinking, you know, I want to make sure 426 00:20:29,720 --> 00:20:31,840 Speaker 2: I have an edge that I'm not I'm not just 427 00:20:32,000 --> 00:20:36,000 Speaker 2: hiring someone who has been programmed by someone other than myself. 428 00:20:36,160 --> 00:20:37,960 Speaker 2: Like I want the creative thinker. 429 00:20:38,280 --> 00:20:40,080 Speaker 1: You want the kids doing polon, it's not the kids 430 00:20:40,160 --> 00:20:41,280 Speaker 1: doing finance club on. 431 00:20:42,119 --> 00:20:44,960 Speaker 2: So maybe that will be a forcing action for turning 432 00:20:45,000 --> 00:20:45,600 Speaker 2: it on itself. 433 00:20:45,680 --> 00:20:47,320 Speaker 1: I don't know. I mean, like the other thing is that, 434 00:20:47,440 --> 00:20:49,080 Speaker 1: like you know, and I wrote about this, like when 435 00:20:49,119 --> 00:20:51,440 Speaker 1: I was in college, there are a lot of like 436 00:20:52,200 --> 00:20:57,280 Speaker 1: aimless smart people who graduated from college and they're like, well, 437 00:20:57,520 --> 00:21:00,159 Speaker 1: I guess I'll do investment in banking recruiting, because as 438 00:21:00,200 --> 00:21:03,520 Speaker 1: they're there, and in some ways that's not good for 439 00:21:03,600 --> 00:21:05,639 Speaker 1: a bank, or you know, some ways, if you're running 440 00:21:05,640 --> 00:21:07,920 Speaker 1: a desk at a bank, and like you can choose 441 00:21:08,000 --> 00:21:11,000 Speaker 1: between the president of the Financial Modeling Club and like 442 00:21:11,640 --> 00:21:13,920 Speaker 1: the classics major who's like, well, I guess I'll do 443 00:21:13,960 --> 00:21:16,760 Speaker 1: investment banking. You'd rather have the president of the financial 444 00:21:16,800 --> 00:21:18,800 Speaker 1: modeling Club because they can do financial models and they'll 445 00:21:18,800 --> 00:21:21,800 Speaker 1: be useful to you. But I think, like taking a 446 00:21:21,840 --> 00:21:23,840 Speaker 1: step back, if you're like the CEO of a bank, 447 00:21:24,520 --> 00:21:30,919 Speaker 1: there's a real value to having a broad selection of ambitious, 448 00:21:30,960 --> 00:21:34,960 Speaker 1: smart people who don't necessarily care about banking, because some 449 00:21:35,080 --> 00:21:38,120 Speaker 1: of those people will be really good bankers because they're 450 00:21:38,600 --> 00:21:41,480 Speaker 1: a little bit broader minded and like less rigid than 451 00:21:41,520 --> 00:21:44,320 Speaker 1: the people who are just the financial modelers. But some 452 00:21:44,400 --> 00:21:46,000 Speaker 1: of them will not be good bankers and will be 453 00:21:46,800 --> 00:21:53,359 Speaker 1: politicians or media people or you know other things podcasters, 454 00:21:53,480 --> 00:21:57,480 Speaker 1: and their two years at a bank will reflect well 455 00:21:57,560 --> 00:21:59,960 Speaker 1: on you and sort of lead you to continued to 456 00:22:00,119 --> 00:22:01,800 Speaker 1: do well in recruiting. Like I just think that, like, 457 00:22:02,400 --> 00:22:05,200 Speaker 1: if you're an investment bank and you're only hiring people 458 00:22:05,320 --> 00:22:09,080 Speaker 1: who have been interested in investment banking since they were eighteen, 459 00:22:09,800 --> 00:22:13,240 Speaker 1: Like you're sort of like undermining your own prestige. 460 00:22:13,600 --> 00:22:13,800 Speaker 2: Yeah. 461 00:22:14,880 --> 00:22:18,679 Speaker 1: Wow, this is like my very selfish disclosure. I used 462 00:22:18,680 --> 00:22:20,200 Speaker 1: to work at Colban and do you see kind of 463 00:22:20,240 --> 00:22:21,720 Speaker 1: cool to be like, ah, I used to work at Colvin, 464 00:22:21,920 --> 00:22:23,840 Speaker 1: and like you'd like go around to like different places 465 00:22:23,880 --> 00:22:25,320 Speaker 1: in life and be like, oh, I also used to 466 00:22:25,320 --> 00:22:26,159 Speaker 1: work at Colvin. 467 00:22:25,960 --> 00:22:29,000 Speaker 2: Right, because yeah, and presonably Goldman is proud of you. 468 00:22:29,640 --> 00:22:31,840 Speaker 1: Oh I hope, so yeah, they'd better be. 469 00:22:32,480 --> 00:22:34,200 Speaker 2: I don't know. It's kind of similar in journalism, like 470 00:22:34,280 --> 00:22:36,720 Speaker 2: you want to hire people not always, but like you 471 00:22:36,760 --> 00:22:39,840 Speaker 2: want to have some journalists who, such as yourself, that 472 00:22:40,000 --> 00:22:42,639 Speaker 2: came from outside the industry, right, and like. 473 00:22:43,200 --> 00:22:46,440 Speaker 1: Both because like it is vaguely prestige enhancing, but also 474 00:22:46,520 --> 00:22:50,320 Speaker 1: because like having that diversity of experience probably does improve 475 00:22:50,480 --> 00:22:54,879 Speaker 1: the doing of the job. Whereas if everyone has the 476 00:22:54,960 --> 00:22:58,400 Speaker 1: same training since they were eighteen, like you're probably missing things. 477 00:23:00,200 --> 00:23:02,120 Speaker 1: Maybe the training is really good. Maybe these finance clubs 478 00:23:02,160 --> 00:23:05,879 Speaker 1: are like you know, they sound brutal, right, there's this 479 00:23:06,040 --> 00:23:09,840 Speaker 1: tension in the article where like these clubs are very selective. Yeah, 480 00:23:09,920 --> 00:23:12,879 Speaker 1: and it's like, well, you could just take more people 481 00:23:13,280 --> 00:23:15,600 Speaker 1: and you could probably teach them how to pick stocks, 482 00:23:15,960 --> 00:23:17,440 Speaker 1: and like maybe they wouldn't be great at it, but 483 00:23:17,520 --> 00:23:19,840 Speaker 1: like who cares, right, Like some of them are investing 484 00:23:19,920 --> 00:23:22,440 Speaker 1: like small portfolios of like the college's money. Some of 485 00:23:22,480 --> 00:23:25,920 Speaker 1: them are not, Okay, you didn't pick a good stock. 486 00:23:26,560 --> 00:23:29,680 Speaker 1: But I think like part of it is they want 487 00:23:29,840 --> 00:23:34,119 Speaker 1: to be selective, because the mean thing they're doing is 488 00:23:34,280 --> 00:23:37,439 Speaker 1: like saying we were selective, so that like they are 489 00:23:37,560 --> 00:23:39,480 Speaker 1: the place where the banks want to hire from. 490 00:23:39,680 --> 00:23:43,600 Speaker 2: Yeah. I did love this line from the Business Insider article. 491 00:23:44,000 --> 00:23:46,639 Speaker 2: Some clubs conduct three to five rounds of interviews, students 492 00:23:46,680 --> 00:23:49,360 Speaker 2: told p I, which can involve a resume review, yes, 493 00:23:49,440 --> 00:23:52,720 Speaker 2: your high school resume, a social assessment, and multiple technical 494 00:23:52,840 --> 00:23:55,640 Speaker 2: rounds in which you'll be grilled on real world finance questions. 495 00:23:56,080 --> 00:24:00,040 Speaker 2: My high school resume was written in crayon, so I 496 00:24:00,040 --> 00:24:01,120 Speaker 2: would love to see some of these. 497 00:24:01,680 --> 00:24:05,280 Speaker 1: I do love the phrase a social assessment, which does 498 00:24:05,400 --> 00:24:07,399 Speaker 1: that mean that you have to like drink until you 499 00:24:07,480 --> 00:24:09,600 Speaker 1: pass out once? Because like it's you know, it's still 500 00:24:09,640 --> 00:24:13,000 Speaker 1: a college club, like you still have parties, right, I hope, 501 00:24:13,080 --> 00:24:13,760 Speaker 1: So I hope. 502 00:24:14,320 --> 00:24:16,360 Speaker 2: Yeah, I don't know, maybe some of these students will 503 00:24:16,440 --> 00:24:19,520 Speaker 2: write in and tell us about their investment club. 504 00:24:19,800 --> 00:24:21,719 Speaker 1: You know, I wrote about it, and several people did 505 00:24:21,760 --> 00:24:23,800 Speaker 1: write it tell me about their investment club, including one 506 00:24:23,800 --> 00:24:27,080 Speaker 1: person who pointed out that, like the competition goes two ways, 507 00:24:27,320 --> 00:24:29,280 Speaker 1: and the banks like compete to get in front of 508 00:24:29,600 --> 00:24:32,399 Speaker 1: these clubs because like, you know, if you like have 509 00:24:32,560 --> 00:24:35,600 Speaker 1: the first meeting with like the club, then like that 510 00:24:35,720 --> 00:24:37,680 Speaker 1: club is more likely to send students to you, and 511 00:24:37,800 --> 00:24:40,200 Speaker 1: so you'll you'll be able to pick them off instead 512 00:24:40,200 --> 00:24:41,920 Speaker 1: of them going to other banks. And so there's like 513 00:24:42,040 --> 00:24:45,800 Speaker 1: a competition including like the banks like love to sponsor 514 00:24:45,880 --> 00:24:47,960 Speaker 1: stuff for the clubs or just like give them money 515 00:24:48,080 --> 00:24:51,040 Speaker 1: because like that helps with her recruiting, and so you know, 516 00:24:51,160 --> 00:24:55,280 Speaker 1: it goes both ways. But yeah, in general, I got 517 00:24:55,280 --> 00:24:56,960 Speaker 1: a number of emails from people who are in these clubs, 518 00:24:57,000 --> 00:24:58,359 Speaker 1: and none of them were like, no, it's great, that 519 00:24:58,520 --> 00:24:59,720 Speaker 1: article is all wrong there. 520 00:24:59,720 --> 00:25:00,800 Speaker 2: I think so much fun. 521 00:25:01,720 --> 00:25:04,200 Speaker 1: It's pretty bad. Yeah. I have a friend whose daughter 522 00:25:04,320 --> 00:25:06,280 Speaker 1: is in one of these competitive clubs, and they asked 523 00:25:06,320 --> 00:25:08,040 Speaker 1: me to speak and I talked at their club. But 524 00:25:08,080 --> 00:25:10,639 Speaker 1: I also found it. I was like, why are you 525 00:25:10,680 --> 00:25:12,160 Speaker 1: in this competitive fight club? 526 00:25:13,760 --> 00:25:16,400 Speaker 2: Did they seem happy? Were their smiles? Was there any 527 00:25:16,440 --> 00:25:17,840 Speaker 2: mercy I was speaking? 528 00:25:17,960 --> 00:25:18,639 Speaker 1: So it was great. 529 00:25:18,800 --> 00:25:21,359 Speaker 2: Yeah, it was full of mercy and class. 530 00:25:21,560 --> 00:25:24,639 Speaker 1: It was I mean, yeah, stamping cheering. 531 00:25:24,480 --> 00:25:26,480 Speaker 2: Probably the highlight of their college experience. 532 00:25:26,480 --> 00:25:44,080 Speaker 1: I definitely in fact in doing DF models, Well, this is. 533 00:25:44,080 --> 00:25:47,119 Speaker 2: Really fun to talk about, but I'm really just in 534 00:25:47,280 --> 00:25:50,280 Speaker 2: knots over how Elon Musk is going to get more money, 535 00:25:50,760 --> 00:25:52,800 Speaker 2: specifically Tesla options. 536 00:25:53,400 --> 00:25:55,840 Speaker 1: Yeah, this is not super easy, but like they have 537 00:25:55,960 --> 00:25:58,800 Speaker 1: to reported that Tesla is trying to figure out a 538 00:25:58,840 --> 00:26:01,239 Speaker 1: way to give him a giant bag of money. They 539 00:26:01,280 --> 00:26:03,400 Speaker 1: gave him some stock options in twenty eighteen. 540 00:26:03,560 --> 00:26:05,480 Speaker 2: Going all the way back to twenty eighteen. 541 00:26:05,280 --> 00:26:07,679 Speaker 1: When Tesla was a sixty billion dollar company. I mean, 542 00:26:07,720 --> 00:26:09,960 Speaker 1: it's not like a one point something trillion dollar company. 543 00:26:10,000 --> 00:26:13,960 Speaker 1: But like, the options all worked out and he did great. 544 00:26:14,440 --> 00:26:17,040 Speaker 1: They awarded him on the order of one hundred billion 545 00:26:17,040 --> 00:26:20,400 Speaker 1: dollars from these options, and then the shareholder sued in Delaware, 546 00:26:20,920 --> 00:26:24,680 Speaker 1: and the Delaware judge said, you know, this is a 547 00:26:24,760 --> 00:26:27,080 Speaker 1: conflicted transaction that was not fair to shareholders, and so 548 00:26:27,560 --> 00:26:32,720 Speaker 1: the options are gone and Elon Musk and Frankly Tesla's 549 00:26:32,760 --> 00:26:34,680 Speaker 1: board in Tesla's shareholders were all kind of mad about that. 550 00:26:34,880 --> 00:26:37,239 Speaker 1: We talked about it in the past. And one thing 551 00:26:37,280 --> 00:26:40,760 Speaker 1: they did was vote again to give him back the options, 552 00:26:40,960 --> 00:26:42,919 Speaker 1: and the judge said, no, that doesn't work. The options 553 00:26:42,920 --> 00:26:45,320 Speaker 1: are gone. Another thing they did was about to move 554 00:26:45,359 --> 00:26:47,800 Speaker 1: to Texas. So Tesla's now incorporated in Texas, so like, 555 00:26:48,000 --> 00:26:51,160 Speaker 1: the next time they give him stuff, you can only 556 00:26:51,200 --> 00:26:55,440 Speaker 1: sue in Texas. And this week the government Texas signed 557 00:26:55,440 --> 00:27:00,159 Speaker 1: a bill about limiting how much you can sue a 558 00:27:00,240 --> 00:27:02,719 Speaker 1: company in Texas. And the answer is, you really kind 559 00:27:02,760 --> 00:27:04,320 Speaker 1: of can't. Like it's it meant to be much more 560 00:27:04,400 --> 00:27:07,080 Speaker 1: protective of decisions like this than like, you know, the 561 00:27:07,160 --> 00:27:09,800 Speaker 1: equivalent law in Telware. So like, if they were to 562 00:27:09,800 --> 00:27:11,880 Speaker 1: give him another hundred million dollars today, like it would 563 00:27:11,880 --> 00:27:13,760 Speaker 1: be fine, like no one would no one would be 564 00:27:13,760 --> 00:27:17,040 Speaker 1: able to ject. But but if they were to give 565 00:27:17,080 --> 00:27:20,320 Speaker 1: him hundred million dollars today, they would have a huge 566 00:27:20,320 --> 00:27:23,080 Speaker 1: accounting hit and he would have a huge tax hit. Basically, 567 00:27:23,119 --> 00:27:26,240 Speaker 1: it would be a multi billion dollar expense to Tesla, 568 00:27:26,280 --> 00:27:29,639 Speaker 1: which would start its income, and it would be a 569 00:27:29,760 --> 00:27:31,840 Speaker 1: huge tax bill to him. He would pay like fifty 570 00:27:31,880 --> 00:27:34,440 Speaker 1: seven percent taxes on the value of the award, like 571 00:27:34,520 --> 00:27:36,399 Speaker 1: what's nice about what happened in twenty eighteen is that, 572 00:27:37,119 --> 00:27:39,400 Speaker 1: probably speaking, there were not a lot of tax consequences 573 00:27:40,200 --> 00:27:42,280 Speaker 1: or a lot of accounting consequences to giving him this 574 00:27:42,400 --> 00:27:46,800 Speaker 1: award because the options weren't worth very much in the theory, 575 00:27:46,880 --> 00:27:50,240 Speaker 1: because the stock was low and there were a lot 576 00:27:50,280 --> 00:27:53,680 Speaker 1: of ambitious targets that he had to hit in order 577 00:27:53,720 --> 00:27:56,560 Speaker 1: to get the options. And then like seven years later, 578 00:27:56,880 --> 00:27:58,240 Speaker 1: the options are worth a lot of money because he 579 00:27:58,320 --> 00:27:59,960 Speaker 1: hit the targets, Like that's how it's supposed to work. 580 00:28:00,480 --> 00:28:03,960 Speaker 1: Now they're gone, and like giving him new options would 581 00:28:03,960 --> 00:28:07,000 Speaker 1: be really bad for tax and accounting purpose. So Tesla's 582 00:28:07,000 --> 00:28:09,000 Speaker 1: trying to figure out what's the right way to solve 583 00:28:09,080 --> 00:28:11,960 Speaker 1: this in a way that gives him what he wants, 584 00:28:12,000 --> 00:28:14,320 Speaker 1: which is both like a giant pat on the head 585 00:28:14,440 --> 00:28:18,400 Speaker 1: for being so good and also like more control of Tesla. Yeah, 586 00:28:18,800 --> 00:28:20,240 Speaker 1: but in a way that doesn't like he created a 587 00:28:20,280 --> 00:28:23,000 Speaker 1: h tax bill or like an accounting this. Yeah. 588 00:28:23,040 --> 00:28:26,240 Speaker 2: Specifically, the FT reported that they formed a special committee 589 00:28:26,560 --> 00:28:30,399 Speaker 2: to explore Elon Musk's pay. The committee comprises of just 590 00:28:30,520 --> 00:28:34,640 Speaker 2: the chair of the board, Robin Denholm, and Kathleen Wilson Thompson. 591 00:28:35,160 --> 00:28:37,520 Speaker 2: It's going to explore alternative ways to compensate him for 592 00:28:37,600 --> 00:28:41,320 Speaker 2: passwork should Tesla fail to reinstate that twenty eighteen pay deal. 593 00:28:41,480 --> 00:28:43,800 Speaker 2: You had kind of a suggestion for them. 594 00:28:44,240 --> 00:28:46,200 Speaker 1: So I've had two suggestions this week. One is my 595 00:28:46,320 --> 00:28:49,040 Speaker 1: stupid suggestion and one is the readers. Both of them 596 00:28:49,040 --> 00:28:52,080 Speaker 1: are somewhat tongue in cheek suggestions. Okay, Essentially the problem 597 00:28:52,240 --> 00:28:53,960 Speaker 1: is that the stock price of Tesla is too high. 598 00:28:54,080 --> 00:28:56,160 Speaker 1: Right like in twenty eighteen, they're like, we'll give you 599 00:28:56,240 --> 00:28:59,560 Speaker 1: a huge pile of money if you tenax the stock price, 600 00:28:59,800 --> 00:29:02,440 Speaker 1: and then he did it, and then like now they 601 00:29:02,440 --> 00:29:03,920 Speaker 1: can't be like, well, we'll give you another huge pile 602 00:29:03,920 --> 00:29:06,320 Speaker 1: of money for tenexting the stock price previously because that 603 00:29:06,360 --> 00:29:12,000 Speaker 1: would have tax consequences. So the solution to the stock 604 00:29:12,040 --> 00:29:14,920 Speaker 1: price being too high is to make the stock price lower. 605 00:29:15,600 --> 00:29:17,280 Speaker 1: And so I don't think this is original for me. 606 00:29:17,360 --> 00:29:19,640 Speaker 1: I think, like you know, I've been writing about elin 607 00:29:19,680 --> 00:29:23,320 Speaker 1: Mus for years, and I've been getting somewhat conspiratorial emails 608 00:29:23,360 --> 00:29:25,800 Speaker 1: from readers for years, and I think somewhere a reader 609 00:29:25,880 --> 00:29:28,360 Speaker 1: email will be like if they want to give him 610 00:29:28,720 --> 00:29:31,200 Speaker 1: stock options again, And it's very important that the options 611 00:29:31,240 --> 00:29:33,920 Speaker 1: to be granted up the money, and he wants them 612 00:29:33,960 --> 00:29:36,960 Speaker 1: to be very valuable. The thing to do is to 613 00:29:37,040 --> 00:29:39,840 Speaker 1: make the stock very viatile. Tank the stock, give new 614 00:29:39,920 --> 00:29:42,280 Speaker 1: stock options at a low price, and then bring the 615 00:29:42,280 --> 00:29:44,760 Speaker 1: stock back up, and the stock options will not be 616 00:29:44,800 --> 00:29:45,240 Speaker 1: worth a lot. 617 00:29:46,040 --> 00:29:47,720 Speaker 2: Turns out, is that what he's been doing. 618 00:29:47,920 --> 00:29:52,240 Speaker 1: I mean, like, you know, the stock went down a lot. Yeah, 619 00:29:52,360 --> 00:29:54,520 Speaker 1: as he was doing doge antics, and he's like a 620 00:29:54,560 --> 00:29:56,760 Speaker 1: little bit retreated from the doge antics and said things 621 00:29:56,840 --> 00:29:59,600 Speaker 1: like I will spend more time at Tesla. And the 622 00:29:59,640 --> 00:30:01,360 Speaker 1: stock gone up, and it's like, well, you know, you 623 00:30:01,440 --> 00:30:04,000 Speaker 1: could like turn the dial all the way to doage. 624 00:30:04,280 --> 00:30:07,120 Speaker 1: Stock plummets, give him stock options, be like, oh, with 625 00:30:07,240 --> 00:30:09,280 Speaker 1: these options, I'm now motivated to spend more time in 626 00:30:09,320 --> 00:30:12,880 Speaker 1: the company. Turn the doll more to Tesla. Stock goes 627 00:30:13,000 --> 00:30:14,160 Speaker 1: up and everything's fine. 628 00:30:14,360 --> 00:30:15,080 Speaker 2: Yeah, there you go. 629 00:30:15,600 --> 00:30:17,520 Speaker 1: That's one solution. It's not a very good solution. 630 00:30:17,920 --> 00:30:20,360 Speaker 2: That was your solution, So I'm not going to insult you. 631 00:30:20,560 --> 00:30:21,440 Speaker 1: No, it's pretty stupid. 632 00:30:21,480 --> 00:30:22,880 Speaker 2: But what was the reader's suggestion? 633 00:30:23,560 --> 00:30:26,760 Speaker 1: The reader's suggestion is there are various ways for Tesla 634 00:30:26,840 --> 00:30:31,160 Speaker 1: to give elon musk stock. Let's say, the traditional way 635 00:30:31,600 --> 00:30:34,240 Speaker 1: to give a ceo stock is to do it as 636 00:30:34,480 --> 00:30:37,200 Speaker 1: incentive compensation, and that runs into the problems that we 637 00:30:37,280 --> 00:30:40,240 Speaker 1: have here, where like if you want to incentivize him 638 00:30:40,240 --> 00:30:41,920 Speaker 1: for work, he's already done, like you have a big 639 00:30:42,000 --> 00:30:45,480 Speaker 1: tax bill. Another thing that you could do is you 640 00:30:45,560 --> 00:30:48,080 Speaker 1: could acquire a company. 641 00:30:47,840 --> 00:30:52,600 Speaker 2: That he owns, right, and maybe one that begins with. 642 00:30:52,960 --> 00:30:58,200 Speaker 1: X not necessarily yes, So there's a business logic too, 643 00:30:58,840 --> 00:31:03,640 Speaker 1: I mean arguably business logic too. Tesla acquire xai because 644 00:31:04,000 --> 00:31:07,200 Speaker 1: Tesla's an AI company and as an AI company. But 645 00:31:08,120 --> 00:31:10,640 Speaker 1: you know, Tesla has in the past acquired solar City, 646 00:31:10,760 --> 00:31:13,440 Speaker 1: which was a company that was partially owned by Elon Musk, 647 00:31:14,000 --> 00:31:17,880 Speaker 1: and there were some allegations that Tesla was overpaying for 648 00:31:17,960 --> 00:31:21,640 Speaker 1: solar City because Elon Musk wanted it to and then 649 00:31:21,680 --> 00:31:24,080 Speaker 1: it was essentially a ballout of solar City to like 650 00:31:24,280 --> 00:31:28,560 Speaker 1: enrich the CEO and the shareholder sued and he lost, 651 00:31:28,800 --> 00:31:31,440 Speaker 1: and the Delaware Cord at the time said, nah, this 652 00:31:31,600 --> 00:31:35,280 Speaker 1: was good enough, but you know in Texas like you 653 00:31:35,360 --> 00:31:39,760 Speaker 1: could probably be even faster and loser. And so the 654 00:31:39,880 --> 00:31:42,880 Speaker 1: solution that my reader suggested was, like, look, you have 655 00:31:44,200 --> 00:31:48,760 Speaker 1: an Elon Musk company, you overpaid for it. In the 656 00:31:48,840 --> 00:31:52,400 Speaker 1: form of Tesla stock by ninety billion dollars, and you've 657 00:31:52,440 --> 00:31:56,400 Speaker 1: given Elon Musk ninety billion dollars of stock that is 658 00:31:56,480 --> 00:31:59,640 Speaker 1: not immediately taxable to him and does not reduced your earnings. 659 00:32:00,080 --> 00:32:02,400 Speaker 1: So it like kind of solves the problem of rewarding 660 00:32:02,480 --> 00:32:05,240 Speaker 1: him for his past work. And the objection to it 661 00:32:05,640 --> 00:32:09,960 Speaker 1: is that if a Delaware company was like, we're going 662 00:32:10,040 --> 00:32:14,320 Speaker 1: to just buy our CEO is like random small startup 663 00:32:14,400 --> 00:32:16,920 Speaker 1: for ninety billion dollars, they'd get sued and they'd go 664 00:32:17,000 --> 00:32:20,800 Speaker 1: to court, and a Delaware chancellor would review whether the 665 00:32:20,840 --> 00:32:26,120 Speaker 1: transaction was entirely fair to shareholders. And given both the 666 00:32:26,200 --> 00:32:29,080 Speaker 1: cynicism with which I'm describing this and Delaware's history with 667 00:32:29,160 --> 00:32:31,240 Speaker 1: Elon Musk, the chancellor would probably say, no, this is 668 00:32:31,280 --> 00:32:33,000 Speaker 1: not entirely fair to shaholders. You have to give back 669 00:32:33,000 --> 00:32:39,120 Speaker 1: the stock. But being in Texas, and I think the 670 00:32:39,160 --> 00:32:40,800 Speaker 1: thing about this is like I'm describing it in this 671 00:32:40,920 --> 00:32:43,680 Speaker 1: very cynical way, but like you could imagine Tesla's board 672 00:32:43,760 --> 00:32:46,800 Speaker 1: saying this CEO is very valuable to us. We owe 673 00:32:46,880 --> 00:32:50,240 Speaker 1: him for the good work he did increasing the stock 674 00:32:50,280 --> 00:32:52,360 Speaker 1: price in the past. That the Delaware chancellor took the 675 00:32:52,400 --> 00:32:55,680 Speaker 1: stock away from him, for shareholders are already voted to 676 00:32:55,720 --> 00:32:58,240 Speaker 1: give him that stock back, and the chancellor said, no, 677 00:32:58,320 --> 00:33:00,760 Speaker 1: that doesn't work. So what we're going to do is 678 00:33:00,800 --> 00:33:02,400 Speaker 1: we're going to give him the stock in this alternate 679 00:33:02,480 --> 00:33:04,720 Speaker 1: way where we're buying this company from him, you know, 680 00:33:05,040 --> 00:33:07,600 Speaker 1: and I know the company isn't worth ninety billion dollars, 681 00:33:07,800 --> 00:33:10,320 Speaker 1: but like he's our guy, we like him, Let's give 682 00:33:10,360 --> 00:33:13,040 Speaker 1: him the ninety billion dollars. You could imagine like disclosing 683 00:33:13,120 --> 00:33:17,040 Speaker 1: that clearly and the shelder saying sure, yeah, So we have. 684 00:33:17,080 --> 00:33:19,120 Speaker 2: Two potential solutions on the board right here. 685 00:33:20,240 --> 00:33:23,200 Speaker 1: No one would ever cite this podcast if they're implemented 686 00:33:23,280 --> 00:33:27,040 Speaker 1: either of these solutions, because you'd probably get in trouble 687 00:33:27,880 --> 00:33:31,840 Speaker 1: doing these things explicitly, like impleasantly. 688 00:33:32,880 --> 00:33:36,040 Speaker 2: Well, this is a watch this space sort of moment. 689 00:33:36,320 --> 00:33:39,480 Speaker 2: Tesla Hid say in a filing that it's proxy Samen 690 00:33:39,520 --> 00:33:42,479 Speaker 2: will be delayed. That indicates that perhaps you'll learn how 691 00:33:42,520 --> 00:33:44,760 Speaker 2: to do it. Yeah, their annual meeting will be delayed. 692 00:33:45,520 --> 00:33:47,680 Speaker 2: Usually the annual meeting is in May or June, so 693 00:33:48,120 --> 00:33:50,400 Speaker 2: maybe sometime in the summer we'll want to come. 694 00:33:50,320 --> 00:33:52,840 Speaker 1: To Shrelders with some thing that the Shelders can vote 695 00:33:52,840 --> 00:33:54,120 Speaker 1: on to giv Alan of his money. 696 00:33:54,280 --> 00:33:56,080 Speaker 2: We're going to talk about it on this podcast, but 697 00:33:56,200 --> 00:33:59,480 Speaker 2: not next week. No, No, next week we have something 698 00:34:00,360 --> 00:34:01,560 Speaker 2: far more sinister. 699 00:34:04,080 --> 00:34:05,480 Speaker 1: And that was The Money Stuff Podcast. 700 00:34:05,680 --> 00:34:07,600 Speaker 2: I'm Matt Livian and I'm Katie Greifeld. 701 00:34:08,040 --> 00:34:10,080 Speaker 1: You can find my work by subscribing to The Money 702 00:34:10,120 --> 00:34:12,000 Speaker 1: Stuff newsletter on Bloomberg. 703 00:34:11,560 --> 00:34:14,160 Speaker 2: Dot com, and you can find me on Bloomberg TV 704 00:34:14,400 --> 00:34:18,040 Speaker 2: every day on Open Interest between nine to eleven am Eastern. 705 00:34:18,160 --> 00:34:19,839 Speaker 1: We'd love to hear from you. You can send an 706 00:34:19,840 --> 00:34:23,080 Speaker 1: email to Moneypod at Bloomberg dot net, ask us a 707 00:34:23,160 --> 00:34:24,520 Speaker 1: question and we might answer it on air. 708 00:34:25,000 --> 00:34:27,160 Speaker 2: You can also subscribe to our show wherever you're listening 709 00:34:27,239 --> 00:34:29,239 Speaker 2: right now and leave us a review. It helps more 710 00:34:29,280 --> 00:34:30,120 Speaker 2: people find the show. 711 00:34:30,920 --> 00:34:33,560 Speaker 1: The Money Stuff Podcast. It is produced by Anna Maserakus 712 00:34:33,600 --> 00:34:34,480 Speaker 1: and Moses on On. 713 00:34:34,719 --> 00:34:37,080 Speaker 2: Our theme music was composed by Blake Naples. 714 00:34:37,120 --> 00:34:39,480 Speaker 1: Brandley, Francis nan Levens our executive. 715 00:34:39,000 --> 00:34:41,680 Speaker 2: Producer, and Stage Bauman is Bloomberg's head of Podcasts. 716 00:34:42,040 --> 00:34:44,320 Speaker 1: Thanks for listening to The Money Stuff Podcast. We'll be 717 00:34:44,440 --> 00:34:45,880 Speaker 1: back next week with more stuff