1 00:00:06,480 --> 00:00:07,200 Speaker 1: Wellco Natrolius. 2 00:00:07,200 --> 00:00:11,800 Speaker 2: I'm Joel Webber and I'm Eric belchernas Eric. 3 00:00:11,920 --> 00:00:15,640 Speaker 1: There is a company that I have been really fascinated 4 00:00:15,680 --> 00:00:18,000 Speaker 1: in because of the suite of products they have. This 5 00:00:18,079 --> 00:00:21,480 Speaker 1: is Granite Shares, and the thing that I've been looking 6 00:00:21,480 --> 00:00:24,600 Speaker 1: at this year is like Nvidia mostly just goes up, up, 7 00:00:24,720 --> 00:00:27,960 Speaker 1: up up, and Granite Shares as this ETF that is 8 00:00:28,000 --> 00:00:31,280 Speaker 1: a two x in Vidia, which basically is like, not 9 00:00:31,320 --> 00:00:34,159 Speaker 1: only is it a rocket ship, it's like a bigger 10 00:00:34,400 --> 00:00:38,519 Speaker 1: rocket ship. And I'm really curious about who's behind all this. 11 00:00:39,159 --> 00:00:43,440 Speaker 2: Yeah. I refer to this broader category as hot sauce 12 00:00:43,920 --> 00:00:46,159 Speaker 2: because a lot of portfolios in the middle of the 13 00:00:46,200 --> 00:00:49,160 Speaker 2: portfolio it's pretty dull. You buy and hold some low 14 00:00:49,200 --> 00:00:51,319 Speaker 2: cost beta vanilla index funds and you have to wait 15 00:00:51,360 --> 00:00:53,960 Speaker 2: thirty five years. So people like to have a little 16 00:00:54,000 --> 00:00:57,760 Speaker 2: fun on the outside speculate, and so single stock ETFs 17 00:00:57,800 --> 00:01:00,880 Speaker 2: are one of many varieties of hot sauce, and they're 18 00:01:00,920 --> 00:01:03,280 Speaker 2: taking off. The assets in these have doubled this year. 19 00:01:03,760 --> 00:01:06,280 Speaker 2: We're only halfway through and they've already doubled. Probably the 20 00:01:06,319 --> 00:01:09,120 Speaker 2: big hit is NVDL, which is the Granite SHARE's two 21 00:01:09,280 --> 00:01:12,920 Speaker 2: x long Navidia, which now has Joel four billion dollars 22 00:01:12,920 --> 00:01:17,880 Speaker 2: in assets. That is big time money right there. And 23 00:01:17,920 --> 00:01:21,039 Speaker 2: there's a you know, a lot of this is them 24 00:01:21,560 --> 00:01:24,680 Speaker 2: trial and error that they launch different stocks and some 25 00:01:24,760 --> 00:01:26,840 Speaker 2: take off, some don't. So not all these are a hit, 26 00:01:26,920 --> 00:01:29,319 Speaker 2: but there's been a couple of breakouts that I think 27 00:01:29,360 --> 00:01:32,399 Speaker 2: have shown people, hey, this is a category that is 28 00:01:32,400 --> 00:01:34,760 Speaker 2: here to stay, and it's an interesting one. I think 29 00:01:34,800 --> 00:01:36,679 Speaker 2: for people on the outsets somethings they scratch their heads 30 00:01:36,720 --> 00:01:41,399 Speaker 2: like who needs that? But the people have spoken. There's 31 00:01:41,440 --> 00:01:42,560 Speaker 2: definitely an audience for this. 32 00:01:42,840 --> 00:01:46,720 Speaker 1: Joining us on this episode, Will Rhynd, CEO and founder 33 00:01:46,800 --> 00:01:51,560 Speaker 1: of Granite Shares also worth mentioning. This episode was recorded 34 00:01:52,280 --> 00:01:55,880 Speaker 1: on June twenty fourth, as Nvidia had kind of a 35 00:01:55,920 --> 00:02:04,120 Speaker 1: down day, this time on trillions x single stock etf Well, 36 00:02:04,240 --> 00:02:07,600 Speaker 1: welcome with jillions, Thank you. How is going to start gambling? 37 00:02:09,320 --> 00:02:12,800 Speaker 3: Well, I think that, you know, with anything that's leveraged, 38 00:02:12,800 --> 00:02:16,919 Speaker 3: there's an element clearly of speculation depending on who's using it. 39 00:02:17,600 --> 00:02:22,160 Speaker 3: But underneath the leverage you're talking about real companies, and 40 00:02:22,280 --> 00:02:24,560 Speaker 3: in the case of Nvidia, you know, this has become 41 00:02:24,600 --> 00:02:27,160 Speaker 3: the most important stock in the market. You know, overtook 42 00:02:27,800 --> 00:02:30,800 Speaker 3: Apple and Microsoft very recently to become the world's most 43 00:02:30,880 --> 00:02:35,760 Speaker 3: valuable company. So, on the one hand, leverage is probably 44 00:02:35,840 --> 00:02:38,120 Speaker 3: the oldest concept that we have in finance, you know, 45 00:02:38,160 --> 00:02:42,680 Speaker 3: borrowing money to obtain more notional exposure. But this is 46 00:02:42,720 --> 00:02:45,800 Speaker 3: done in a very sort of modern way by putting 47 00:02:45,800 --> 00:02:51,080 Speaker 3: it in the ETF rapper, giving people institutionally priced you know, leverage. 48 00:02:51,600 --> 00:02:54,520 Speaker 3: But with the access, the ease of access, the efficiency 49 00:02:54,800 --> 00:02:55,800 Speaker 3: of the ETF rapper. 50 00:02:56,160 --> 00:02:58,120 Speaker 1: How do you think Jack Bogel would feel about what 51 00:02:58,160 --> 00:02:58,600 Speaker 1: you offer. 52 00:02:59,840 --> 00:03:03,880 Speaker 3: I'm not sure he would be the biggest fan. But 53 00:03:03,960 --> 00:03:06,440 Speaker 3: it's funny because well, I know if you're about to 54 00:03:06,440 --> 00:03:10,720 Speaker 3: say this, Eric, but one of his big things from 55 00:03:10,880 --> 00:03:14,239 Speaker 3: day one was he was bearish or he did not 56 00:03:14,440 --> 00:03:21,400 Speaker 3: like ETF's period because of people's ability to trade them. 57 00:03:21,600 --> 00:03:25,760 Speaker 3: And it's precisely that that this group of customers are 58 00:03:25,800 --> 00:03:29,240 Speaker 3: our group of customers. It's precisely that element that they love. 59 00:03:30,000 --> 00:03:35,280 Speaker 3: So it's you know, very perhaps contradictory or different to 60 00:03:35,320 --> 00:03:38,040 Speaker 3: the buy and hold crowd. It's not something that they 61 00:03:38,560 --> 00:03:42,840 Speaker 3: subscribe to. But there's a massive now amount of people 62 00:03:42,880 --> 00:03:46,320 Speaker 3: and increasingly so that want to be self directed, who 63 00:03:46,360 --> 00:03:50,160 Speaker 3: are self directed and you know, want to trade. 64 00:03:50,120 --> 00:03:53,680 Speaker 1: Is there anything that Will make that is not rated 65 00:03:53,800 --> 00:03:55,480 Speaker 1: R or red light. 66 00:03:55,760 --> 00:03:58,760 Speaker 2: Sure they have like a gold ETF for example, that 67 00:03:58,800 --> 00:04:02,160 Speaker 2: would be greenlight, okay to be honest. So I think 68 00:04:02,960 --> 00:04:05,040 Speaker 2: some of the more recent ETFs that Will has put 69 00:04:05,080 --> 00:04:07,600 Speaker 2: out have been these sort of more red light ETFs. 70 00:04:07,640 --> 00:04:11,440 Speaker 2: But back to Bogel, I mean he had problems with 71 00:04:11,520 --> 00:04:13,520 Speaker 2: like seventy percent of woo Vanguard offered. I mean, he 72 00:04:14,280 --> 00:04:18,480 Speaker 2: was pretty brutal to everybody. But I think one of 73 00:04:18,560 --> 00:04:21,600 Speaker 2: the things I try to explain to people about these 74 00:04:22,160 --> 00:04:23,800 Speaker 2: is when I show my pie chart of like a 75 00:04:23,960 --> 00:04:27,960 Speaker 2: modern portfolio eighty five percent cheap beta boring weight thirty 76 00:04:27,960 --> 00:04:30,920 Speaker 2: five years and then like ten to fifteen percent hot sauce, 77 00:04:31,040 --> 00:04:34,120 Speaker 2: is that the hot sauce can actually have a behavioral 78 00:04:34,560 --> 00:04:38,200 Speaker 2: purpose to it if it keeps you from touching the 79 00:04:38,320 --> 00:04:42,240 Speaker 2: eighty five percent, Right, So, because compounding returns or where 80 00:04:42,240 --> 00:04:44,960 Speaker 2: it's at, that is the magic that we're all here for, 81 00:04:45,520 --> 00:04:49,440 Speaker 2: but you can't touch it. So to give your idle 82 00:04:49,520 --> 00:04:53,039 Speaker 2: hands something to do and speculate, sometimes you win, sometimes 83 00:04:53,120 --> 00:04:56,159 Speaker 2: you lose. If that distracts you, that's a behavioral hack 84 00:04:56,240 --> 00:04:58,839 Speaker 2: to me in a way. So I do think you 85 00:04:58,839 --> 00:05:02,840 Speaker 2: could argue there's actually a bogulian purpose. He would say, well, 86 00:05:02,839 --> 00:05:05,680 Speaker 2: why do you need to do that? But people are human, 87 00:05:05,920 --> 00:05:08,720 Speaker 2: they like to speculate thematic ETFs I put in this category. 88 00:05:08,920 --> 00:05:12,880 Speaker 2: Arc is a great example, So I'm fine with it. 89 00:05:12,960 --> 00:05:15,160 Speaker 2: And I think you know, you can gamble on sports, 90 00:05:15,200 --> 00:05:18,000 Speaker 2: you can gamble. Stock investing is kind of gambling, So 91 00:05:18,480 --> 00:05:20,440 Speaker 2: I'm fine with it. I think it's you know, these 92 00:05:20,480 --> 00:05:23,200 Speaker 2: things have a small percentage of the assets too. If 93 00:05:23,200 --> 00:05:24,560 Speaker 2: they took over, it'd. 94 00:05:24,360 --> 00:05:24,920 Speaker 1: Be kind of weird. 95 00:05:25,000 --> 00:05:27,800 Speaker 2: But you have like your own little niche and you 96 00:05:27,880 --> 00:05:30,320 Speaker 2: are in what is very valuable these days, which is 97 00:05:30,320 --> 00:05:33,039 Speaker 2: a VFZ, a Vanguard free zone, so he never has 98 00:05:33,120 --> 00:05:35,880 Speaker 2: to worry about Vanguard coming in like ruining life in 99 00:05:35,880 --> 00:05:38,960 Speaker 2: that category. So that's got to be nice, right. 100 00:05:39,520 --> 00:05:41,799 Speaker 3: Well, I mean it's something, as you know, an independent 101 00:05:41,839 --> 00:05:45,440 Speaker 3: issuer that clearly you need to be able to provide 102 00:05:45,440 --> 00:05:49,039 Speaker 3: products that frankly the larger companies like Bangard don't because 103 00:05:49,640 --> 00:05:52,359 Speaker 3: when you're an independent it's the sort of boutique argument 104 00:05:52,480 --> 00:05:55,320 Speaker 3: versus the big box store. So if you're trying to 105 00:05:55,400 --> 00:05:57,560 Speaker 3: be a big box store but on a boutique budget, 106 00:05:57,839 --> 00:06:00,240 Speaker 3: it's not going to work. So you have to be 107 00:06:00,520 --> 00:06:04,719 Speaker 3: offering something different and you know, ideally something that you 108 00:06:04,839 --> 00:06:08,000 Speaker 3: just can't get from those big players. And that's where 109 00:06:08,040 --> 00:06:10,440 Speaker 3: companies like us come into play, that we offer things 110 00:06:10,440 --> 00:06:13,479 Speaker 3: that are unique and with something like leverage single stocks. 111 00:06:13,480 --> 00:06:16,200 Speaker 3: I mean, this is a new category that we pioneered, 112 00:06:16,839 --> 00:06:20,839 Speaker 3: and you know, leverage on single companies, in my opinion, 113 00:06:22,160 --> 00:06:25,440 Speaker 3: is more intuitive than some of the other applications. But 114 00:06:25,960 --> 00:06:28,599 Speaker 3: leveraged dtfs have been around for a long time. You know, 115 00:06:28,600 --> 00:06:32,560 Speaker 3: you've been able to trade leveraged ETFs on broad equity benchmarks, 116 00:06:32,560 --> 00:06:37,240 Speaker 3: fixed income benchmarks, commodity benchmarks, even individual commodities. So this 117 00:06:37,360 --> 00:06:39,200 Speaker 3: is really just an extension of that trend. 118 00:06:39,560 --> 00:06:43,120 Speaker 1: You've like thirteen now of these single stock leverage gtfs. 119 00:06:43,640 --> 00:06:45,240 Speaker 1: Where did it all start? What was the one that 120 00:06:45,279 --> 00:06:47,039 Speaker 1: you were like, oh my god, we have to do this. 121 00:06:47,760 --> 00:06:50,640 Speaker 3: So we got to rewind a little bit because we 122 00:06:50,640 --> 00:06:54,599 Speaker 3: actually started this in Europe in twenty nineteen. And the 123 00:06:54,720 --> 00:06:58,839 Speaker 3: reason we did that was that when I started Grantwitch 124 00:06:58,839 --> 00:07:02,440 Speaker 3: Shas seven years ago in the US, there were only 125 00:07:02,480 --> 00:07:05,800 Speaker 3: two companies that could do leverage dtfs period in the 126 00:07:05,880 --> 00:07:09,680 Speaker 3: United States. So we couldn't do leverage dtfs even if 127 00:07:09,680 --> 00:07:11,480 Speaker 3: we wanted to at that time. That was a weird 128 00:07:11,880 --> 00:07:15,960 Speaker 3: sort of government exemption that existed at that time. It 129 00:07:16,040 --> 00:07:16,800 Speaker 3: no longer does. 130 00:07:17,720 --> 00:07:20,200 Speaker 1: So there was an a sec thing, correct. 131 00:07:20,800 --> 00:07:23,840 Speaker 3: That was when the old sort of era was under 132 00:07:23,840 --> 00:07:26,600 Speaker 3: exemptive relief. That was a thing called exemptive relief and 133 00:07:26,680 --> 00:07:28,920 Speaker 3: exemption that was given to two companies and then not 134 00:07:28,960 --> 00:07:30,040 Speaker 3: given to anybody else. 135 00:07:30,600 --> 00:07:31,600 Speaker 2: Pro shows and direction. 136 00:07:31,840 --> 00:07:35,360 Speaker 3: Yeah, there you go. And then fast forward a few years. 137 00:07:35,840 --> 00:07:38,880 Speaker 3: We thought the idea was really good, but we couldn't 138 00:07:38,920 --> 00:07:41,280 Speaker 3: do it in the US, so we started in Europe. 139 00:07:41,360 --> 00:07:43,840 Speaker 3: And we have a platform in Europe where we offer 140 00:07:44,080 --> 00:07:49,000 Speaker 3: over one hundred products on different exchanges in every major country, 141 00:07:49,600 --> 00:07:53,360 Speaker 3: so we started doing it there. In that time, the 142 00:07:53,880 --> 00:07:58,640 Speaker 3: regulation here changed and this exemptive relief or this exemptive 143 00:07:58,680 --> 00:08:03,240 Speaker 3: regime went away and was replaced by a generic rule 144 00:08:03,320 --> 00:08:07,160 Speaker 3: update that everybody nicknames the ETF rule. And what that 145 00:08:07,240 --> 00:08:11,720 Speaker 3: effectively allowed is any company to do leverage dtfs. Obviously, 146 00:08:11,720 --> 00:08:16,600 Speaker 3: with some caveats, two x is the maximum amount of 147 00:08:16,680 --> 00:08:19,119 Speaker 3: leverage that you can do. But that opened the door 148 00:08:19,320 --> 00:08:22,640 Speaker 3: for US to then bring leverage single stocks, which had 149 00:08:22,680 --> 00:08:23,560 Speaker 3: been doing in Europe. 150 00:08:23,920 --> 00:08:27,240 Speaker 2: Here in the US and in Europe, Joel, they've got 151 00:08:27,320 --> 00:08:30,520 Speaker 2: three x Navidia, they really party over. 152 00:08:30,320 --> 00:08:32,240 Speaker 1: There, which we'll come back to. 153 00:08:33,000 --> 00:08:35,960 Speaker 2: But Eighthan on my team sometimes we joke about that 154 00:08:36,000 --> 00:08:39,320 Speaker 2: because they've got like five x the Queues two three 155 00:08:39,440 --> 00:08:43,440 Speaker 2: x Navidia, five x AI and we feel like it's 156 00:08:43,520 --> 00:08:46,600 Speaker 2: kind of wasted on that crowd, Like it's the American 157 00:08:47,040 --> 00:08:50,560 Speaker 2: gambling degenerate mindset that would really have fun with those products. 158 00:08:50,960 --> 00:08:53,160 Speaker 2: Maybe that's why the SEC limits it to two x, 159 00:08:53,200 --> 00:08:56,280 Speaker 2: because they know that these would probably fly off the shelves. 160 00:08:56,840 --> 00:09:00,920 Speaker 2: But still, you know, when you just design these products, 161 00:09:01,960 --> 00:09:04,400 Speaker 2: you put them out there, it looks to me like 162 00:09:04,440 --> 00:09:07,600 Speaker 2: the ones that sell are the ones connected to stocks 163 00:09:07,640 --> 00:09:11,160 Speaker 2: that are like see the most trading Navidia, Tesla. We 164 00:09:11,280 --> 00:09:13,600 Speaker 2: ran a study. It looked like they're like maybe eighty 165 00:09:13,640 --> 00:09:16,040 Speaker 2: percent of the market share of all single stock ETFs, 166 00:09:16,080 --> 00:09:19,520 Speaker 2: even though they probably cover for fifty stocks. But those 167 00:09:19,559 --> 00:09:22,200 Speaker 2: two companies are like the majority of them. Is that 168 00:09:22,320 --> 00:09:25,280 Speaker 2: just because people just love trading those two names, and 169 00:09:25,320 --> 00:09:27,199 Speaker 2: if you can make putting on a different trade around 170 00:09:27,200 --> 00:09:30,400 Speaker 2: them easier to me sort of like a parlay, I'm 171 00:09:30,440 --> 00:09:33,599 Speaker 2: going to trade that, whereas Microsoft, Eh, I'm not that 172 00:09:33,720 --> 00:09:35,559 Speaker 2: interested in that stock. It's not that volatile it's not 173 00:09:35,600 --> 00:09:38,600 Speaker 2: that hot. Is Is that why those sell? 174 00:09:39,200 --> 00:09:41,040 Speaker 3: In a way I think I would I would add 175 00:09:41,040 --> 00:09:44,000 Speaker 3: them one more thing to that, which is less quantitative, 176 00:09:44,200 --> 00:09:47,240 Speaker 3: more qualitative, I'd say, it's about the enthusiasm for the 177 00:09:47,240 --> 00:09:50,400 Speaker 3: stock at the given time. An enthusiasm is a concept 178 00:09:50,400 --> 00:09:54,200 Speaker 3: that you know, you can't really sort of measure as such. 179 00:09:54,400 --> 00:09:58,560 Speaker 3: But my example is NVIDIAs the stock today that has 180 00:09:58,679 --> 00:10:03,320 Speaker 3: all the enthusiasm, and Tesla, which you mentioned, is the 181 00:10:03,360 --> 00:10:06,280 Speaker 3: second most popular. However, if we are talking about, oh, 182 00:10:06,320 --> 00:10:08,720 Speaker 3: we're having this conversation three years ago, I would argue 183 00:10:08,720 --> 00:10:11,319 Speaker 3: that we'd be talking about Tesla being the most popular 184 00:10:11,400 --> 00:10:14,520 Speaker 3: because there was the most enthusiasm at that time for 185 00:10:14,559 --> 00:10:17,160 Speaker 3: that stock. In Europe, we've seen where we have a 186 00:10:17,160 --> 00:10:19,320 Speaker 3: lot more of these products, you know, We've seen huge 187 00:10:19,320 --> 00:10:22,880 Speaker 3: amount of enthusiasm for companies like Neo for example, which 188 00:10:22,920 --> 00:10:27,520 Speaker 3: is another EV car manufacturer from China. Less so these days, 189 00:10:27,600 --> 00:10:30,800 Speaker 3: of course, as that has moved on into AI and 190 00:10:30,840 --> 00:10:31,320 Speaker 3: so I think. 191 00:10:31,160 --> 00:10:35,040 Speaker 1: It's matured slightly and there's more competition for Neo etc. 192 00:10:35,640 --> 00:10:37,840 Speaker 3: Exactly. I think it reflects, you know, the two biggest 193 00:10:37,880 --> 00:10:40,520 Speaker 3: trends in my mind of this year have been AI 194 00:10:40,840 --> 00:10:45,320 Speaker 3: and cryptocurrency, So naturally in our product offering, the two 195 00:10:45,400 --> 00:10:49,040 Speaker 3: biggest products and the most of activity enthusiasm we've seen 196 00:10:49,520 --> 00:10:52,480 Speaker 3: are for Nvidia and we have coinbase two x Coinbase, 197 00:10:53,679 --> 00:10:57,120 Speaker 3: So that's kind of where we've seen that enthusiasm. And 198 00:10:57,160 --> 00:11:00,439 Speaker 3: to Eric's point, you know that it hasn't been necessarily 199 00:11:00,520 --> 00:11:04,640 Speaker 3: for companies like Microsoft because arguably that was you know, 200 00:11:04,760 --> 00:11:08,520 Speaker 3: maybe sort of twelve to eighteen months ago when that 201 00:11:08,559 --> 00:11:11,880 Speaker 3: stock's kind of made a big move. But you know, again, 202 00:11:11,920 --> 00:11:14,760 Speaker 3: I think it's it's really down to what investors care 203 00:11:14,800 --> 00:11:15,839 Speaker 3: about at that time. 204 00:11:17,280 --> 00:11:19,240 Speaker 1: I don't think we were rewound the clock all the 205 00:11:19,280 --> 00:11:20,960 Speaker 1: way there. What was the what was the one that 206 00:11:21,000 --> 00:11:21,960 Speaker 1: made you go we got to do this. 207 00:11:23,600 --> 00:11:26,800 Speaker 3: I don't know if it was one per se. I 208 00:11:26,840 --> 00:11:30,160 Speaker 3: think it was more the learnings from what we'd been 209 00:11:30,200 --> 00:11:32,920 Speaker 3: doing in Europe, where we have more of a platform 210 00:11:32,960 --> 00:11:35,720 Speaker 3: based approach, and I think kind of what we're all 211 00:11:35,920 --> 00:11:39,720 Speaker 3: dancing around as this concept of okay, tech works. That's 212 00:11:39,720 --> 00:11:41,960 Speaker 3: something that people like. There's a lot of enthusiasm for 213 00:11:42,040 --> 00:11:46,640 Speaker 3: certain tech companies, and so when we launched here, we 214 00:11:46,800 --> 00:11:49,320 Speaker 3: launched with a lot of the large tech names, but 215 00:11:49,400 --> 00:11:52,280 Speaker 3: we did try and do some things that were different. 216 00:11:52,320 --> 00:11:54,280 Speaker 3: So at the time, the reason why we did a 217 00:11:54,320 --> 00:11:57,839 Speaker 3: two x coinbase was because there was no crypto. I mean, 218 00:11:58,080 --> 00:12:00,520 Speaker 3: I should be a specific no spot Bitcoin tea, which 219 00:12:00,559 --> 00:12:04,120 Speaker 3: was a huge, huge thing that you know Eric's covered 220 00:12:04,160 --> 00:12:10,439 Speaker 3: for he knows all too well exactly. But you know, 221 00:12:10,520 --> 00:12:13,240 Speaker 3: that was kind of a way to bring exposure to 222 00:12:13,240 --> 00:12:16,640 Speaker 3: to bitcoin slash cryptocurrency, but also with leverage because there 223 00:12:16,679 --> 00:12:20,480 Speaker 3: was no way to obtain leverage on that. So Ali 224 00:12:20,480 --> 00:12:23,520 Speaker 3: Baba is another one that we have where again it 225 00:12:23,600 --> 00:12:26,360 Speaker 3: wasn't necessarily that there was the most enthusiasm for Ali 226 00:12:26,360 --> 00:12:28,520 Speaker 3: Baba as a stock, but it was a way to 227 00:12:28,800 --> 00:12:31,120 Speaker 3: give people exposure to Chinese tech, you know, a very 228 00:12:31,160 --> 00:12:33,640 Speaker 3: concentrated way that didn't exist. 229 00:12:34,200 --> 00:12:36,679 Speaker 2: And so let's go over how this happens because you 230 00:12:36,800 --> 00:12:39,760 Speaker 2: use swap contracts, right, yes, And let me just for 231 00:12:39,800 --> 00:12:42,000 Speaker 2: anybody listening, do you remember the scene in The Big 232 00:12:42,040 --> 00:12:46,959 Speaker 2: Short when Michael Burry wants to bet against the housing market. Yes, 233 00:12:47,120 --> 00:12:47,480 Speaker 2: he can't. 234 00:12:47,559 --> 00:12:48,400 Speaker 1: He can't figure it out. 235 00:12:48,559 --> 00:12:51,600 Speaker 2: So you go to Goldman and they make you it's 236 00:12:51,600 --> 00:12:55,760 Speaker 2: like a bar bet, but more formal. This is all 237 00:12:55,800 --> 00:12:58,440 Speaker 2: you're doing, right, You're basically being Michael Burry. You're going 238 00:12:58,440 --> 00:13:01,480 Speaker 2: to these big banks and you're making these daily bar bets, 239 00:13:02,000 --> 00:13:04,160 Speaker 2: and that's the leg work you're doing that somebody at 240 00:13:04,200 --> 00:13:06,280 Speaker 2: home can hit by and all of a sudden they 241 00:13:06,360 --> 00:13:09,240 Speaker 2: now have this swap contract bet. Is that about right? 242 00:13:09,640 --> 00:13:09,880 Speaker 1: Yeah? 243 00:13:09,920 --> 00:13:13,520 Speaker 3: I mean that's the instrument itself, But it's actually a 244 00:13:13,559 --> 00:13:16,640 Speaker 3: kind of a much simpler concept, which is it's just financing. 245 00:13:17,200 --> 00:13:19,680 Speaker 3: So it's using the balance sheet of a big bank 246 00:13:19,760 --> 00:13:22,400 Speaker 3: to effectively lend the fund money to take an increased 247 00:13:22,400 --> 00:13:26,560 Speaker 3: exposure on a particular stock. And in order to do that, 248 00:13:26,600 --> 00:13:28,199 Speaker 3: you need to have a bank that has a balance 249 00:13:28,240 --> 00:13:30,520 Speaker 3: sheet and is in a position to be able to 250 00:13:30,840 --> 00:13:32,560 Speaker 3: make that financing or lend that money. 251 00:13:32,640 --> 00:13:35,240 Speaker 2: So to me, this is in a weird way. You know, 252 00:13:35,280 --> 00:13:39,080 Speaker 2: we talk about ETFs democratizing investing, in a way that's 253 00:13:39,080 --> 00:13:42,320 Speaker 2: democratizing that Michael Burry move. Most people do not get 254 00:13:42,360 --> 00:13:48,360 Speaker 2: access to JP Morgan's like swap desk. So exactly this 255 00:13:48,480 --> 00:13:50,920 Speaker 2: is all part of the same theme, which is you 256 00:13:51,000 --> 00:13:54,360 Speaker 2: click a button and things happen, and in this case 257 00:13:54,480 --> 00:13:55,800 Speaker 2: it's this swap contract. 258 00:13:56,120 --> 00:13:56,320 Speaker 1: Yeah. 259 00:13:56,320 --> 00:13:59,240 Speaker 3: And I think it's even perhaps even more fundamental than that, 260 00:13:59,559 --> 00:14:07,120 Speaker 3: which is it's democratizing access to margin and institutional price leverage. 261 00:14:07,200 --> 00:14:10,240 Speaker 3: So the same price of leverage that we are getting 262 00:14:10,360 --> 00:14:12,560 Speaker 3: via and delivering via the ETF is not the same 263 00:14:12,559 --> 00:14:15,240 Speaker 3: price that you're getting at your you know, in your 264 00:14:15,240 --> 00:14:18,880 Speaker 3: margin account at a Fidelity or Schwab, et cetera. And 265 00:14:18,920 --> 00:14:22,920 Speaker 3: so again it's a classic case of the ETF disrupting 266 00:14:23,640 --> 00:14:26,320 Speaker 3: and existing mechanism that's been used by the banks and 267 00:14:26,320 --> 00:14:29,920 Speaker 3: broco dealers you know, for many, many years, but making 268 00:14:29,920 --> 00:14:32,680 Speaker 3: the whole process a lot more efficient, a lot more cheaper. 269 00:14:37,600 --> 00:14:42,280 Speaker 1: Because you have a platform, I'm curious that allows you 270 00:14:42,440 --> 00:14:47,160 Speaker 1: to basically see who's using these perhaps more than other people. 271 00:14:47,520 --> 00:14:50,560 Speaker 1: Is this I mean like it clearly has an audience 272 00:14:51,240 --> 00:14:56,760 Speaker 1: for traders, professional ones, institutional ones, but obviously there's because 273 00:14:56,760 --> 00:15:00,480 Speaker 1: of the popularity and enthusiasm for these company like the 274 00:15:00,520 --> 00:15:03,880 Speaker 1: retail crowd and the editors of the world would feast 275 00:15:03,920 --> 00:15:05,920 Speaker 1: on this. Can you tell who's using it? 276 00:15:07,480 --> 00:15:11,480 Speaker 3: To certain extent? So I think, like any ETF manager, 277 00:15:11,960 --> 00:15:16,520 Speaker 3: we're disintermediated always by two entities, which is the stock 278 00:15:16,560 --> 00:15:22,080 Speaker 3: exchange one hand, and the brokerage that ultimately has the 279 00:15:22,120 --> 00:15:25,880 Speaker 3: transaction or handles the transaction for the customer. There's something 280 00:15:25,880 --> 00:15:29,720 Speaker 3: called the thirteen F report, which is a regulatory report 281 00:15:29,800 --> 00:15:33,040 Speaker 3: that we can look at that gives some analysis or 282 00:15:33,080 --> 00:15:36,400 Speaker 3: some look through into the shareholder base. It's not perfect, 283 00:15:36,840 --> 00:15:39,920 Speaker 3: and it's a once a quarter snapshot, but what I 284 00:15:39,960 --> 00:15:43,400 Speaker 3: can tell you is that I think, like any successful etf, 285 00:15:43,400 --> 00:15:47,040 Speaker 3: it's always a spectrum. So you have retail investors clearly 286 00:15:47,040 --> 00:15:49,280 Speaker 3: on one hand or the barbell, and then you have 287 00:15:49,480 --> 00:15:52,480 Speaker 3: some of the world's most sophisticated hedge funds and proprietary 288 00:15:52,520 --> 00:15:56,240 Speaker 3: trading firms on the other hand, and probably everybody in between. 289 00:15:57,160 --> 00:16:00,360 Speaker 3: So the other interesting aspect to this is that when 290 00:16:00,400 --> 00:16:03,440 Speaker 3: you have a company like in VideA, in Vidia has 291 00:16:03,880 --> 00:16:08,520 Speaker 3: not just appeal with Reddit retail investors, right, this is 292 00:16:08,560 --> 00:16:10,280 Speaker 3: a company and this is why I say so repe 293 00:16:10,400 --> 00:16:13,600 Speaker 3: this has become the world's most important company. This has 294 00:16:13,680 --> 00:16:18,920 Speaker 3: true global appeal. So if you're in Japan, or if 295 00:16:18,920 --> 00:16:21,800 Speaker 3: you're in career, or if you're in South America somewhere 296 00:16:22,320 --> 00:16:24,640 Speaker 3: and you want exposure to that company, you can only 297 00:16:24,680 --> 00:16:27,800 Speaker 3: get that in the US stock market. And therefore you 298 00:16:27,800 --> 00:16:32,400 Speaker 3: can only get the leveraged version of Nvidia through our 299 00:16:32,800 --> 00:16:36,560 Speaker 3: product NVDL here in the US. So providing a broker 300 00:16:36,600 --> 00:16:39,200 Speaker 3: has access, then you access to the market and increasingly. 301 00:16:39,280 --> 00:16:44,080 Speaker 3: We're also seeing this trend as well, whereby markets around 302 00:16:44,080 --> 00:16:47,600 Speaker 3: the world are becoming more connected. Individuals are becoming more 303 00:16:47,640 --> 00:16:52,240 Speaker 3: interconnected through technology. The first market they look to outside 304 00:16:52,240 --> 00:16:54,800 Speaker 3: of their home market, and typically the home market may 305 00:16:54,920 --> 00:16:57,680 Speaker 3: or may not be that developed, is the US market. 306 00:16:58,040 --> 00:17:00,280 Speaker 3: And the reason why the US market is because the 307 00:17:00,320 --> 00:17:03,760 Speaker 3: US market has performed very well. Why because of some 308 00:17:03,800 --> 00:17:05,080 Speaker 3: of these stocks like Nvideo. 309 00:17:05,960 --> 00:17:10,240 Speaker 2: I know they're hot stocks. Navidia is now trading four 310 00:17:10,280 --> 00:17:13,520 Speaker 2: times any other stock speaking of trading, listen to this statroll. 311 00:17:13,600 --> 00:17:19,200 Speaker 2: So even an NVDL is probably at four billion, maybe 312 00:17:19,640 --> 00:17:21,879 Speaker 2: right around the top in the top two hundred and 313 00:17:21,880 --> 00:17:25,680 Speaker 2: fifty ets by assets. It's in the top ten regularly 314 00:17:25,680 --> 00:17:29,440 Speaker 2: in trading. So today it's already traded one point five 315 00:17:29,480 --> 00:17:32,800 Speaker 2: billion as of whatever time it is two thirty pm today. 316 00:17:33,359 --> 00:17:39,880 Speaker 2: That's more than ready General Motors, Berkshire, Dell Computer. Right, 317 00:17:39,920 --> 00:17:41,399 Speaker 2: these are massive names. 318 00:17:41,480 --> 00:17:45,120 Speaker 1: How does it compair with Spy, which would be day 319 00:17:45,160 --> 00:17:46,160 Speaker 1: and day out number one. 320 00:17:46,440 --> 00:17:50,160 Speaker 2: Yeah, So as of right now, Spy has traded thirteen 321 00:17:50,240 --> 00:17:53,240 Speaker 2: billion and his is one point five billion. Now that 322 00:17:53,280 --> 00:17:55,160 Speaker 2: is a pretty big gap, but everything's a big gap 323 00:17:55,160 --> 00:17:57,840 Speaker 2: from Spy in the queues. But one point five billion 324 00:17:57,840 --> 00:18:03,160 Speaker 2: puts you ninth. That's above HyG, above XLF. These are 325 00:18:03,160 --> 00:18:05,000 Speaker 2: some big legendary names that. 326 00:18:05,040 --> 00:18:09,760 Speaker 3: But also Eric on Spy. Remember that NVDL is, like 327 00:18:09,760 --> 00:18:12,800 Speaker 3: I said, it's four billion dollars. Spy is over half 328 00:18:12,800 --> 00:18:17,000 Speaker 3: a trillion. Yeah, yeah, right, I mean the difference in size, yeah, 329 00:18:17,119 --> 00:18:18,040 Speaker 3: is monumental. 330 00:18:18,400 --> 00:18:21,480 Speaker 2: Just getting yourself like you know, Ibit is in the 331 00:18:21,480 --> 00:18:24,640 Speaker 2: top twenty two and that's obviously very impressive. It's hard 332 00:18:24,680 --> 00:18:27,199 Speaker 2: to get on this leaderboard. You know, ARC did it 333 00:18:27,240 --> 00:18:29,639 Speaker 2: for a couple couple of years there. So anytime an 334 00:18:29,680 --> 00:18:32,800 Speaker 2: outsider can come in on the volume list and be 335 00:18:32,960 --> 00:18:36,880 Speaker 2: like right there with those legendary spider sectors and it's 336 00:18:36,960 --> 00:18:39,800 Speaker 2: it's a major feat. And when you have volume, then 337 00:18:39,840 --> 00:18:42,760 Speaker 2: you get bigger fish volumes like chumming the water for 338 00:18:42,840 --> 00:18:43,520 Speaker 2: big fish. 339 00:18:44,320 --> 00:18:47,800 Speaker 1: So it's a very interesting business model. And it's like 340 00:18:47,960 --> 00:18:50,720 Speaker 1: feels like you found a corner of the ETF universe 341 00:18:50,760 --> 00:18:55,040 Speaker 1: that was more or less kind of open, open enough 342 00:18:55,040 --> 00:18:56,560 Speaker 1: that you could come in and make a name for yourself. 343 00:18:57,280 --> 00:18:59,359 Speaker 1: I'm curious, though, what are the limitations? Can you go 344 00:18:59,440 --> 00:19:01,520 Speaker 1: to black Rock and say I'm going to take ibit 345 00:19:01,760 --> 00:19:02,880 Speaker 1: and to exit. 346 00:19:03,960 --> 00:19:08,320 Speaker 3: Well, this is actually a really good question. So in theory, yes, 347 00:19:09,040 --> 00:19:11,800 Speaker 3: you can. Again, remember the concept of leverage is the 348 00:19:11,800 --> 00:19:15,000 Speaker 3: most basic concept in finance. It's just borrowing money to 349 00:19:15,119 --> 00:19:19,719 Speaker 3: get an increased exposure to a given security. So in 350 00:19:19,880 --> 00:19:24,240 Speaker 3: theory you can leverage anything. What we have to be 351 00:19:24,359 --> 00:19:27,320 Speaker 3: careful of or mindful of is that with an etfor 352 00:19:27,320 --> 00:19:30,760 Speaker 3: it's open ended and therefore there has to be a 353 00:19:30,800 --> 00:19:35,960 Speaker 3: scale aspect to it, and part of that means that counterparties, 354 00:19:36,160 --> 00:19:39,680 Speaker 3: spot counterparties, investment banks have to be able to continuously 355 00:19:39,720 --> 00:19:43,520 Speaker 3: finance and provide more exposure to it. So a better 356 00:19:43,600 --> 00:19:46,680 Speaker 3: example might be something like a game star or or 357 00:19:46,720 --> 00:19:51,120 Speaker 3: an AMC, where as you may or may not imagine, 358 00:19:51,240 --> 00:19:55,119 Speaker 3: we get a lot of requests for these on a daily, 359 00:19:55,160 --> 00:19:58,680 Speaker 3: if not intra day basis. Now the problem is in. 360 00:19:58,720 --> 00:20:00,680 Speaker 1: Theory from roaring kidding or other people. 361 00:20:02,040 --> 00:20:04,640 Speaker 3: That's from all sorts of people. That's from all sorts 362 00:20:04,680 --> 00:20:09,560 Speaker 3: of people. On the one hand, yes, it's it's easy 363 00:20:09,600 --> 00:20:14,359 Speaker 3: to provide some leverage against that. The harder aspect is 364 00:20:14,440 --> 00:20:18,760 Speaker 3: how much and for how long? And so that kind 365 00:20:18,800 --> 00:20:21,600 Speaker 3: of is really at the core of, you know, how 366 00:20:21,640 --> 00:20:24,119 Speaker 3: we think about building these products for the longer term 367 00:20:24,200 --> 00:20:26,440 Speaker 3: and not just you know, flash in the pan whereby 368 00:20:26,840 --> 00:20:28,960 Speaker 3: you know, we might be able to provide twenty million 369 00:20:28,960 --> 00:20:32,720 Speaker 3: dollars a capacity, but if somebody wants a hundred then 370 00:20:33,520 --> 00:20:35,040 Speaker 3: we have no way to deliver on that. 371 00:20:35,119 --> 00:20:37,000 Speaker 1: But that would be one that you know, back to 372 00:20:37,040 --> 00:20:39,800 Speaker 1: your enthusiasm, like there's enthusiasm. 373 00:20:39,200 --> 00:20:42,439 Speaker 3: For it, correct, and so providing that we could provide 374 00:20:42,520 --> 00:20:46,640 Speaker 3: or get leverage against that, then yes, you could provide it. 375 00:20:46,760 --> 00:20:48,479 Speaker 3: Just a question of how much we'd be able to 376 00:20:48,520 --> 00:20:50,919 Speaker 3: get would really be the key question. 377 00:20:51,760 --> 00:20:55,720 Speaker 2: Joel, Ready for some trivia. There's thirteen I found like you're. 378 00:20:55,560 --> 00:20:57,440 Speaker 1: Going to give it to me no matter what. But yes, okay, 379 00:20:57,720 --> 00:21:00,359 Speaker 1: now I'm ready. 380 00:21:00,720 --> 00:21:03,720 Speaker 2: I'm sorry. There's eleven thousand, seven hundred ETFs in the world. Okay, 381 00:21:04,160 --> 00:21:05,280 Speaker 2: the world, the world? 382 00:21:06,040 --> 00:21:08,640 Speaker 1: What is it? Does that include exchange traded products? 383 00:21:08,720 --> 00:21:12,920 Speaker 2: Yes? Okay, yes? What is the top performer year to date? 384 00:21:14,240 --> 00:21:15,440 Speaker 2: I'll give you a hint. It came up. 385 00:21:15,400 --> 00:21:18,639 Speaker 1: Already in video two x three x three x three x. 386 00:21:18,760 --> 00:21:20,040 Speaker 2: Guess how much it's up here to date? 387 00:21:20,880 --> 00:21:26,520 Speaker 1: Well, like five hundred percent, double double one thousand, You're 388 00:21:26,560 --> 00:21:27,480 Speaker 1: up one thousand percent. 389 00:21:27,520 --> 00:21:30,400 Speaker 2: It's not even June thirtieth. Yeah, that's pretty crazy. Now, 390 00:21:30,520 --> 00:21:34,000 Speaker 2: guess what the worst performing ETF is year to date. 391 00:21:35,560 --> 00:21:37,160 Speaker 1: Uh Tesla short? 392 00:21:37,359 --> 00:21:40,680 Speaker 2: Actually no, no video the video, so. 393 00:21:40,800 --> 00:21:42,919 Speaker 1: There is a negative, yes, which that was gonna mean. 394 00:21:42,920 --> 00:21:46,080 Speaker 1: My next question is when you bring one of these 395 00:21:46,080 --> 00:21:48,640 Speaker 1: into the world, do you have to think about let's 396 00:21:48,680 --> 00:21:50,320 Speaker 1: call that the yen. Do you have to think about 397 00:21:50,320 --> 00:21:53,280 Speaker 1: the yang simultaneously, because for every bowl there's going to 398 00:21:53,359 --> 00:21:55,280 Speaker 1: be somebody who's like, I'll take the other side of that. 399 00:21:55,280 --> 00:22:00,760 Speaker 3: Bet we do. Now, it doesn't exactly the US we 400 00:22:00,880 --> 00:22:04,680 Speaker 3: do for some now. Part of the reason is, first 401 00:22:04,680 --> 00:22:07,080 Speaker 3: of all, launching ETFs and maintaining them is very expensive, 402 00:22:07,760 --> 00:22:11,000 Speaker 3: so that's really the main reason. So you have to 403 00:22:11,040 --> 00:22:13,240 Speaker 3: be conscious of the fact that at the end of 404 00:22:13,240 --> 00:22:16,240 Speaker 3: the day, for us, it's an asset management vehicle, meaning 405 00:22:16,520 --> 00:22:19,439 Speaker 3: we don't get paid or compensated for the turnover, for 406 00:22:19,520 --> 00:22:22,880 Speaker 3: the volume, anything like that. It's purely on the management fee. 407 00:22:23,440 --> 00:22:25,600 Speaker 3: So it has to be something that we can generate 408 00:22:25,640 --> 00:22:29,000 Speaker 3: management fees from over time. The market is naturally long. 409 00:22:29,160 --> 00:22:33,040 Speaker 1: An example of that from what I'm seeing is you 410 00:22:33,080 --> 00:22:36,040 Speaker 1: can go long Amazon, long Microsoft, but you're not going 411 00:22:36,119 --> 00:22:36,720 Speaker 1: to short those. 412 00:22:37,920 --> 00:22:42,920 Speaker 3: We haven't bought a short version of that to market, 413 00:22:43,000 --> 00:22:45,800 Speaker 3: and there's not really a sort of a great reason 414 00:22:45,880 --> 00:22:49,800 Speaker 3: for that. But we have MVD, which is our two 415 00:22:49,920 --> 00:22:55,720 Speaker 3: x short in video, and you know that's traded fifty 416 00:22:55,720 --> 00:23:00,679 Speaker 3: three million shares today already, which is you know, a 417 00:23:00,760 --> 00:23:04,040 Speaker 3: huge amount of volume for a stock that again has 418 00:23:04,080 --> 00:23:07,320 Speaker 3: performed very poorly up until the last few days where 419 00:23:07,320 --> 00:23:08,959 Speaker 3: a video has gone through a bit of a correction. 420 00:23:09,080 --> 00:23:13,200 Speaker 3: So again typically we we try and bring a short 421 00:23:13,280 --> 00:23:15,359 Speaker 3: if we think it makes sense in the context of 422 00:23:15,920 --> 00:23:18,239 Speaker 3: these stocks. We have a Tesla short as well as 423 00:23:18,240 --> 00:23:20,720 Speaker 3: a Tesla long. That was not always the case. 424 00:23:20,760 --> 00:23:22,600 Speaker 1: That one makes sense to me because there's been so 425 00:23:22,640 --> 00:23:25,960 Speaker 1: many Tesla haters Elon Hayters through the years. It's like 426 00:23:26,359 --> 00:23:28,879 Speaker 1: you can give the people who are the fans something 427 00:23:28,920 --> 00:23:30,800 Speaker 1: to trade, but you can also give the haters. But 428 00:23:30,920 --> 00:23:34,880 Speaker 1: like there's just not that much palpable hatred for Microsoft 429 00:23:34,960 --> 00:23:35,840 Speaker 1: really in the same way. 430 00:23:35,920 --> 00:23:38,679 Speaker 3: That's right. Yeah, it was always as Eric knows, you know, 431 00:23:38,720 --> 00:23:40,919 Speaker 3: we have a goldietf and I've been involved in in 432 00:23:40,960 --> 00:23:43,800 Speaker 3: the gold market for many, many years, and it was 433 00:23:43,840 --> 00:23:45,880 Speaker 3: always a saying, you know, in the gold market that 434 00:23:46,119 --> 00:23:48,800 Speaker 3: you know, people would be bearish on gold, but they 435 00:23:48,800 --> 00:23:51,600 Speaker 3: were never prepared to short gold, and so it was 436 00:23:51,720 --> 00:23:54,879 Speaker 3: sort of this idea that you could be, you know, 437 00:23:55,160 --> 00:23:59,199 Speaker 3: very sort of openly skeptical, but you were never that 438 00:23:59,359 --> 00:24:01,760 Speaker 3: skeptical where you actually put your own money, you know, 439 00:24:01,840 --> 00:24:03,320 Speaker 3: to try and take the other side of it and 440 00:24:03,680 --> 00:24:05,159 Speaker 3: short and I think there's a little bit of that 441 00:24:05,200 --> 00:24:06,400 Speaker 3: in some of these stocks as well. 442 00:24:07,000 --> 00:24:09,199 Speaker 2: So you've got this line of single stock ets. Now 443 00:24:09,240 --> 00:24:11,000 Speaker 2: you filed, and you can't talk about filing. So I'll 444 00:24:11,040 --> 00:24:13,280 Speaker 2: explain as much as I can in the question. You 445 00:24:13,400 --> 00:24:17,119 Speaker 2: filed for what you call yield boost, and the boost 446 00:24:17,160 --> 00:24:21,720 Speaker 2: is all caps, by the way, that matters. Yield boost. 447 00:24:23,160 --> 00:24:26,160 Speaker 2: Now this is a new form of hot sauce about income. 448 00:24:26,480 --> 00:24:30,439 Speaker 2: Joel So, yield max is the current issuer. Will is 449 00:24:30,480 --> 00:24:33,920 Speaker 2: now yield boost up. In Canada they got yield Maximizer, which, 450 00:24:33,920 --> 00:24:35,880 Speaker 2: by the way, just recently changed their name from yield 451 00:24:35,880 --> 00:24:39,639 Speaker 2: Maximizer where there's lowercase to everything's uppercase. I've never seen that. 452 00:24:40,320 --> 00:24:42,240 Speaker 1: It reminds me of maximize. 453 00:24:42,280 --> 00:24:47,800 Speaker 2: Their punctuation, remember Idiocracy, Brondoye, the thirst Mutilator. It just 454 00:24:47,880 --> 00:24:49,400 Speaker 2: it has some similar vibes. 455 00:24:49,440 --> 00:24:52,840 Speaker 1: But so this is like you can capture their attention better. Yeah, 456 00:24:52,840 --> 00:24:54,320 Speaker 1: you're yelling when it's all caps. 457 00:24:54,760 --> 00:24:58,840 Speaker 2: So anyway, these are giving you massive annual yields, like 458 00:24:58,880 --> 00:25:02,200 Speaker 2: over one hundred percent. So a Treasury's five percent, this 459 00:25:02,280 --> 00:25:04,760 Speaker 2: would be one hundred percent. So what you're doing is 460 00:25:04,760 --> 00:25:11,600 Speaker 2: you're taking highly volatile ETFs like like Bitcoin, like volatility itself, 461 00:25:12,640 --> 00:25:16,159 Speaker 2: like the cues, and then you write call options just 462 00:25:16,240 --> 00:25:18,560 Speaker 2: out of the money, which people will pay a lot 463 00:25:18,600 --> 00:25:21,280 Speaker 2: more for premium for because it's more likely to come 464 00:25:21,320 --> 00:25:23,639 Speaker 2: do so as an investor, you give up almost all 465 00:25:23,680 --> 00:25:26,199 Speaker 2: your upside, but you get this massive influx of income. 466 00:25:26,800 --> 00:25:28,800 Speaker 2: Is that the idea? And who are these four? 467 00:25:29,320 --> 00:25:29,399 Speaker 1: So? 468 00:25:30,359 --> 00:25:34,280 Speaker 3: I think first of all, you know the reason why 469 00:25:33,520 --> 00:25:37,480 Speaker 3: this is this is something that we think is relevant 470 00:25:37,560 --> 00:25:39,760 Speaker 3: or or is it good? Idea is combining the two 471 00:25:39,800 --> 00:25:44,119 Speaker 3: hottest trends really of this year, which is leverage and income, 472 00:25:44,640 --> 00:25:50,480 Speaker 3: but income particularly through options, and you'll boost first and foremost. 473 00:25:50,680 --> 00:25:53,080 Speaker 3: These are not leveraged products. And that's important to say 474 00:25:53,119 --> 00:25:57,400 Speaker 3: because I think there'll be some confusion potentially around because 475 00:25:57,480 --> 00:26:01,159 Speaker 3: the security that the option is written on as leverage 476 00:26:01,160 --> 00:26:04,000 Speaker 3: that people say, oh, it's leveraged, it's not. So it's 477 00:26:04,040 --> 00:26:08,760 Speaker 3: not a leverage strategy. But the idea here is to 478 00:26:08,800 --> 00:26:13,600 Speaker 3: be able to generate higher levels of income options based 479 00:26:13,640 --> 00:26:16,959 Speaker 3: income that you can generate from clearly a non leveraged strategy, 480 00:26:18,119 --> 00:26:23,160 Speaker 3: again in a market that doesn't exist today. 481 00:26:23,240 --> 00:26:27,400 Speaker 2: So Yield Max every single one of their funds has inflows. 482 00:26:27,400 --> 00:26:29,040 Speaker 2: And this is a company that came from the outside, 483 00:26:29,040 --> 00:26:31,560 Speaker 2: and the fees are not cheap, So that tells you 484 00:26:31,600 --> 00:26:34,400 Speaker 2: there is definitely some demand for this. But some people 485 00:26:34,440 --> 00:26:37,679 Speaker 2: would push back and go, well, fine, I get like 486 00:26:37,720 --> 00:26:41,879 Speaker 2: a yield Max Tesla or yield Booze Tesla, and I 487 00:26:41,920 --> 00:26:45,720 Speaker 2: get all this income like eighty percent, but I'm still 488 00:26:45,760 --> 00:26:49,919 Speaker 2: down even with the yield factored in because Tesla's down. 489 00:26:50,280 --> 00:26:53,000 Speaker 2: I guess what's the point or how much do you 490 00:26:53,040 --> 00:26:55,280 Speaker 2: have to be sure or care that the stock goes 491 00:26:55,359 --> 00:27:00,159 Speaker 2: up or down because it does the yield matter if 492 00:27:00,160 --> 00:27:02,160 Speaker 2: you're still down on a total return basis. 493 00:27:03,119 --> 00:27:05,400 Speaker 3: I think it will depend on the investor. But again 494 00:27:05,440 --> 00:27:09,320 Speaker 3: you're you're basically skirting on a very interesting now concept, 495 00:27:09,520 --> 00:27:13,639 Speaker 3: which is how important are the different elements of a return? 496 00:27:14,400 --> 00:27:16,560 Speaker 3: And should we always or do we always need to 497 00:27:16,560 --> 00:27:21,439 Speaker 3: think about total return as a construct that is based 498 00:27:21,520 --> 00:27:25,600 Speaker 3: upon income and capital appreciation And in other words, if 499 00:27:25,600 --> 00:27:28,840 Speaker 3: we just rely on income alone, is that or can 500 00:27:28,920 --> 00:27:32,560 Speaker 3: that be even a better way to go. And so 501 00:27:32,600 --> 00:27:35,280 Speaker 3: an example would be take something like an annuity. Right, 502 00:27:36,240 --> 00:27:38,080 Speaker 3: if the whole concept of an annuity is you give 503 00:27:38,200 --> 00:27:41,280 Speaker 3: up one hundred percent of your principle day one, and 504 00:27:41,320 --> 00:27:45,600 Speaker 3: you receive a stream of cash flows for the rest 505 00:27:45,600 --> 00:27:49,480 Speaker 3: of your life, hopefully, now apply that to something like this, 506 00:27:49,960 --> 00:27:54,160 Speaker 3: where you may not give up or you're not giving 507 00:27:54,240 --> 00:27:57,160 Speaker 3: up your principal day one. You're investing in something. You're 508 00:27:57,200 --> 00:28:01,880 Speaker 3: getting income stream of monthly cash flows typically, and those 509 00:28:01,880 --> 00:28:05,840 Speaker 3: cash flows can be pretty significant. The price of the 510 00:28:05,920 --> 00:28:08,600 Speaker 3: underlying or the nav can go down, can go up, 511 00:28:09,000 --> 00:28:12,200 Speaker 3: but it's not necessarily the concept or it's not necessarily 512 00:28:12,200 --> 00:28:16,280 Speaker 3: the case that it's you know, designed to generate a 513 00:28:16,320 --> 00:28:19,879 Speaker 3: certain level of capital appreciation in the same way as 514 00:28:19,880 --> 00:28:22,119 Speaker 3: it's designed to manufacture income. And I think that's the 515 00:28:22,160 --> 00:28:25,720 Speaker 3: sort of the fundamental difference. And you know, again, we 516 00:28:26,000 --> 00:28:30,000 Speaker 3: have another ETF, nothing to do with leverage or options, 517 00:28:30,040 --> 00:28:33,520 Speaker 3: but it's a classical income one where it's called hips. 518 00:28:33,560 --> 00:28:37,639 Speaker 3: We pay a monthly the monthly yield, and in that 519 00:28:37,680 --> 00:28:42,360 Speaker 3: particular fund, we've paid the same monthly distribution cash distribution 520 00:28:43,000 --> 00:28:46,520 Speaker 3: for now over six years and it's a ten percent 521 00:28:46,600 --> 00:28:50,600 Speaker 3: plus you know, yielding product. The reason or the way 522 00:28:50,640 --> 00:28:53,040 Speaker 3: we get there is because the underlying are things like 523 00:28:53,200 --> 00:28:59,320 Speaker 3: MLPs so pipeline infrastructure. They're REITs business development companies. And 524 00:28:59,360 --> 00:29:04,000 Speaker 3: although the clearly has potential for capital appreciation, and MLP 525 00:29:04,120 --> 00:29:07,160 Speaker 3: is not a growth company, so it's just a fundamentally 526 00:29:07,160 --> 00:29:10,320 Speaker 3: different asset, the main reason is all tax related. Right, 527 00:29:10,360 --> 00:29:13,760 Speaker 3: you get a huge amount of income at favorable tax rates. 528 00:29:13,880 --> 00:29:17,920 Speaker 3: That's really the reason for buying an MLP. So for 529 00:29:18,000 --> 00:29:22,000 Speaker 3: somebody that can lock in a ten percent income, they 530 00:29:22,080 --> 00:29:24,320 Speaker 3: might think, well, that trade off is actually really good 531 00:29:24,360 --> 00:29:26,880 Speaker 3: for me because I can then get ten percent per 532 00:29:26,920 --> 00:29:31,560 Speaker 3: annum And although my underlying the value of my portfolio 533 00:29:31,560 --> 00:29:35,040 Speaker 3: can go down, value can go up. As long as 534 00:29:35,040 --> 00:29:37,720 Speaker 3: I have my ten percent income and that's locked in, 535 00:29:38,120 --> 00:29:40,480 Speaker 3: I know that I have something at the end. And 536 00:29:41,240 --> 00:29:43,239 Speaker 3: I think that again is sort of part of this 537 00:29:43,320 --> 00:29:45,760 Speaker 3: concept that is increasingly I think going to be more 538 00:29:45,800 --> 00:29:49,480 Speaker 3: popular with people where the income is prioritized more than 539 00:29:49,560 --> 00:29:50,600 Speaker 3: the capital appreciation. 540 00:29:51,240 --> 00:29:55,800 Speaker 1: It's interesting that's reflective about the high rate world that 541 00:29:55,800 --> 00:29:58,440 Speaker 1: we live in exactly, so as long as rates stay 542 00:29:58,480 --> 00:30:01,720 Speaker 1: where or elevated compared to where they've been like, that 543 00:30:01,760 --> 00:30:03,000 Speaker 1: strategy totally works. 544 00:30:03,200 --> 00:30:06,640 Speaker 3: Yeah, and I think again, part of the reason I 545 00:30:06,640 --> 00:30:09,000 Speaker 3: think that a lot of these strategies took off in 546 00:30:09,040 --> 00:30:12,479 Speaker 3: the first place was because on the converse, when you're 547 00:30:12,520 --> 00:30:16,840 Speaker 3: in a very low interest rate environment, your traditional fixed income, 548 00:30:17,320 --> 00:30:20,040 Speaker 3: you know, it doesn't work from an income perspective. And 549 00:30:20,120 --> 00:30:22,520 Speaker 3: the way that people were generating money from fixed income, 550 00:30:23,120 --> 00:30:25,240 Speaker 3: you know, since the rate rises, you know in early 551 00:30:25,840 --> 00:30:29,360 Speaker 3: twenty twenty two, was through capital gains, so it was 552 00:30:29,720 --> 00:30:31,920 Speaker 3: selling the underlying as opposed to income. 553 00:30:32,040 --> 00:30:41,760 Speaker 2: Yeah, it's interesting. We've also noticed like this is an 554 00:30:41,760 --> 00:30:43,960 Speaker 2: area where there's a lot of closures. It seems like 555 00:30:44,000 --> 00:30:46,479 Speaker 2: because you're not the only one. Leverage Shares has some 556 00:30:47,040 --> 00:30:50,680 Speaker 2: they're launching their first over their big in Europe. T 557 00:30:50,840 --> 00:30:55,360 Speaker 2: Rex is another one, Rex Shares. There's probably a direction 558 00:30:55,480 --> 00:30:58,200 Speaker 2: has their own line. Of these, I mean, there's probably 559 00:30:58,280 --> 00:31:02,160 Speaker 2: well over one hundred and fifty, but like ten percent 560 00:31:02,200 --> 00:31:05,320 Speaker 2: of them catch, you know, and then maybe forty percent 561 00:31:05,360 --> 00:31:08,000 Speaker 2: of them, like you want to they're doing enough that 562 00:31:08,040 --> 00:31:10,360 Speaker 2: you keep them alive. But this is gonna be a 563 00:31:10,440 --> 00:31:13,240 Speaker 2: high turnover area, probably because we have noticed that a 564 00:31:13,280 --> 00:31:16,480 Speaker 2: lot of the closed ETFs this year are ones that 565 00:31:16,520 --> 00:31:18,680 Speaker 2: are young, and it seems like we're getting into a 566 00:31:18,720 --> 00:31:22,280 Speaker 2: period where, especially in the hot sauce lane, people are like, look, 567 00:31:22,320 --> 00:31:24,680 Speaker 2: we'll just we'll try all this stuff if some of 568 00:31:24,720 --> 00:31:26,880 Speaker 2: the sticks will keep it and then the rest will 569 00:31:26,880 --> 00:31:30,720 Speaker 2: shut down. But that cycle might be getting shorter. I'm 570 00:31:30,720 --> 00:31:33,080 Speaker 2: not saying this is good or bad. It's just the 571 00:31:33,120 --> 00:31:35,760 Speaker 2: reality of the situation and the reality of how the 572 00:31:35,800 --> 00:31:38,040 Speaker 2: core of the portfolio is pretty much taken over by 573 00:31:38,400 --> 00:31:40,760 Speaker 2: Vanguard and black Rock, and so you're going to find 574 00:31:40,760 --> 00:31:43,760 Speaker 2: a lot of experimentation, and so that's going to mean 575 00:31:43,800 --> 00:31:46,680 Speaker 2: some some you know, some broken eggs where you just 576 00:31:47,040 --> 00:31:50,200 Speaker 2: throw in the towel, close it up, look for something else. 577 00:31:50,760 --> 00:31:52,600 Speaker 3: Yeah, I mean it goes back to on the one 578 00:31:52,640 --> 00:31:54,360 Speaker 3: howd it goes back to comment and made earlier, which 579 00:31:54,400 --> 00:31:58,880 Speaker 3: is launching ETFs and managing ETFs is really expensive. Now 580 00:31:59,000 --> 00:32:02,520 Speaker 3: leaving that aside, base economic sort of quest is that 581 00:32:02,600 --> 00:32:06,040 Speaker 3: I think we're at a position now where there's no 582 00:32:06,160 --> 00:32:10,000 Speaker 3: taboo about closing funds. And to your point that the 583 00:32:10,560 --> 00:32:14,280 Speaker 3: core of the portfolio is heavily dominated by you know, 584 00:32:14,360 --> 00:32:18,400 Speaker 3: let's call them traditional or core based ETFs. So therefore 585 00:32:18,440 --> 00:32:20,360 Speaker 3: the more innovation that you're going to see, people are 586 00:32:20,400 --> 00:32:24,280 Speaker 3: going to try new things. But if they don't work out. 587 00:32:24,480 --> 00:32:26,880 Speaker 3: I think there's just no no taboo now about closing 588 00:32:26,920 --> 00:32:30,760 Speaker 3: down products that don't work, and that's one that's healthy 589 00:32:30,800 --> 00:32:34,440 Speaker 3: for Everybody's healthy for the market, for the ecosystem, and 590 00:32:35,280 --> 00:32:39,160 Speaker 3: clearly it allows people to innovate more to be able 591 00:32:39,160 --> 00:32:40,440 Speaker 3: to bring things out that do work. 592 00:32:40,520 --> 00:32:43,080 Speaker 1: We've also talked to people on the podcast who have 593 00:32:43,320 --> 00:32:44,880 Speaker 1: had the right idea at the wrong time. 594 00:32:45,360 --> 00:32:49,440 Speaker 3: Yeah, that happens too, and you know that's yeah, it's 595 00:32:49,480 --> 00:32:52,719 Speaker 3: amazing when you look back in terms of some of 596 00:32:52,440 --> 00:32:56,520 Speaker 3: the most successful ETFs, how they've sort of either traded 597 00:32:56,600 --> 00:33:00,600 Speaker 3: hands a few times before really hitting or or the 598 00:33:00,760 --> 00:33:04,040 Speaker 3: concept is closed down. I mean, I mean a version 599 00:33:04,080 --> 00:33:07,120 Speaker 3: of what we're talking about today, which is options based income. 600 00:33:08,400 --> 00:33:11,840 Speaker 3: One of my portfolio managers was working on, you know, 601 00:33:11,880 --> 00:33:15,040 Speaker 3: going back sort of fifteen plus years, probably the first 602 00:33:15,800 --> 00:33:18,880 Speaker 3: it was actually the first strategy that was in registration 603 00:33:19,120 --> 00:33:22,160 Speaker 3: for doing this precise thing in the US market just 604 00:33:22,160 --> 00:33:23,800 Speaker 3: couldn't get I think it was six or seven years 605 00:33:23,840 --> 00:33:27,360 Speaker 3: with the SEC just couldn't get it done. And you know, 606 00:33:27,360 --> 00:33:30,800 Speaker 3: the regulator wasn't ready at that time for it. And 607 00:33:30,840 --> 00:33:34,600 Speaker 3: there was a classic example of where you're you're way early. 608 00:33:34,720 --> 00:33:36,040 Speaker 3: You know on a great idea. 609 00:33:36,120 --> 00:33:39,200 Speaker 1: Okay, as long as we're talking about regulators. When you 610 00:33:39,240 --> 00:33:41,600 Speaker 1: talked to the SEC about a three x or five 611 00:33:41,800 --> 00:33:44,560 Speaker 1: X ETF, which right now they capped it to, what 612 00:33:44,600 --> 00:33:44,960 Speaker 1: did they. 613 00:33:44,880 --> 00:33:46,720 Speaker 3: Say, Well, we don't. 614 00:33:47,680 --> 00:33:48,360 Speaker 1: I was trying. 615 00:33:49,840 --> 00:33:51,640 Speaker 3: Because the rule is the rule is two x. 616 00:33:52,360 --> 00:33:54,040 Speaker 1: So is there any chance of challenging that? 617 00:33:54,680 --> 00:33:57,880 Speaker 2: Well, can't you do it in ETN because like Reckshares 618 00:33:57,920 --> 00:34:00,719 Speaker 2: has three X but no singles. I think they're all 619 00:34:00,720 --> 00:34:03,960 Speaker 2: three X like oil miners and stuff like. But there 620 00:34:04,000 --> 00:34:04,960 Speaker 2: are three X etns. 621 00:34:05,040 --> 00:34:07,959 Speaker 3: Yes, So so etn's obviously come under a totally different 622 00:34:07,960 --> 00:34:12,560 Speaker 3: setula because we can't issue etns. Only banks can issue 623 00:34:12,560 --> 00:34:16,680 Speaker 3: etns in the US, So the ETF is the fund world, 624 00:34:16,719 --> 00:34:19,920 Speaker 3: and under the fund world that's limited to two X. 625 00:34:20,880 --> 00:34:24,280 Speaker 3: Banks can issue etns because etns are not technically funds, 626 00:34:24,320 --> 00:34:26,600 Speaker 3: they're debt security is issued by a bank, and therefore 627 00:34:26,600 --> 00:34:31,080 Speaker 3: when investor buys, they bear the full credit risk, the 628 00:34:31,120 --> 00:34:33,920 Speaker 3: good faith and credit of whatever bank is issuing them. 629 00:34:33,960 --> 00:34:37,000 Speaker 3: And obviously if the bank goes bust, you're an unsecured 630 00:34:37,040 --> 00:34:39,680 Speaker 3: creditor of that bank, as opposed to when you're an ETF. 631 00:34:40,120 --> 00:34:42,960 Speaker 3: That pool of assets which is in the ETF is 632 00:34:43,080 --> 00:34:47,120 Speaker 3: actually a segregated, you know, bankruptcy remote pool of assets, 633 00:34:47,640 --> 00:34:50,680 Speaker 3: so etns we can't do unfortunately, right, But. 634 00:34:51,640 --> 00:34:54,160 Speaker 1: How would you go about challenging the two. 635 00:34:54,200 --> 00:34:58,680 Speaker 3: X we we certainly, honestly speaking, we haven't thought about it. 636 00:35:00,080 --> 00:35:03,520 Speaker 3: I think, you know, it's potentially something that evolves over time, 637 00:35:03,960 --> 00:35:06,800 Speaker 3: although again I don't know. I just it's not something 638 00:35:06,800 --> 00:35:11,879 Speaker 3: that we've specifically had a conversation about. Although, like all 639 00:35:11,960 --> 00:35:15,000 Speaker 3: these things, you know, potentially that evolves over time. 640 00:35:15,320 --> 00:35:17,799 Speaker 2: And speaking of an idea that didn't work back, but 641 00:35:17,960 --> 00:35:19,680 Speaker 2: I almost feel like I could maybe try it again. 642 00:35:19,800 --> 00:35:24,759 Speaker 2: Is the the two way trades like like two x 643 00:35:24,840 --> 00:35:29,520 Speaker 2: Navidia plus or like you know long Navidia short Tesla 644 00:35:29,880 --> 00:35:33,560 Speaker 2: or long gold short bitcoin and two x that, and 645 00:35:33,840 --> 00:35:37,160 Speaker 2: you could even two exit. I don't know any thought 646 00:35:37,200 --> 00:35:40,640 Speaker 2: of because we call these packaged trades where you hit 647 00:35:40,719 --> 00:35:43,239 Speaker 2: by and then you put this trade on. And just 648 00:35:43,239 --> 00:35:45,160 Speaker 2: seems like there's some things that go against each other 649 00:35:45,280 --> 00:35:47,680 Speaker 2: nicely that you could do. They try them back in 650 00:35:47,760 --> 00:35:50,760 Speaker 2: the day, maybe two different phases, but this was before 651 00:35:51,400 --> 00:35:53,200 Speaker 2: we had this sort of like hot sauce boom. 652 00:35:53,640 --> 00:35:56,320 Speaker 3: I think, look, I think that's example of exactly what 653 00:35:56,400 --> 00:35:59,160 Speaker 3: you were just talking about, which is this is where 654 00:35:59,480 --> 00:36:04,160 Speaker 3: you're gonna at innovation in the space, and people will 655 00:36:04,160 --> 00:36:08,839 Speaker 3: bring out strategies like that and if some which I think, look, 656 00:36:08,840 --> 00:36:10,720 Speaker 3: the key is a lot of these are performance based. 657 00:36:10,800 --> 00:36:13,160 Speaker 3: So if the performance is there, I think you'll be 658 00:36:13,200 --> 00:36:16,360 Speaker 3: able to attract assets, and if that performance stays consistent, 659 00:36:16,840 --> 00:36:19,400 Speaker 3: you'll attract even more assets. But it won't be the 660 00:36:19,400 --> 00:36:21,880 Speaker 3: case for every strategy, and so there'll be one or 661 00:36:21,920 --> 00:36:25,080 Speaker 3: two that will perform really well, they'll attract a lot 662 00:36:25,080 --> 00:36:27,520 Speaker 3: of assets, and then there'll be others that don't perform. 663 00:36:27,560 --> 00:36:32,880 Speaker 1: Well, what about something like QQQ Right, so we've been 664 00:36:32,920 --> 00:36:35,600 Speaker 1: talking all about single stocks, but like, could you look at, 665 00:36:35,719 --> 00:36:39,440 Speaker 1: you know, something that historically has performed just sensationally well 666 00:36:39,719 --> 00:36:42,560 Speaker 1: the cues and think about bringing leverage to that. 667 00:36:43,520 --> 00:36:47,880 Speaker 3: We definitely could. The challenge there is that you remember 668 00:36:47,920 --> 00:36:49,920 Speaker 3: I said that there were two companies that were allowed 669 00:36:49,920 --> 00:36:53,600 Speaker 3: to do leverage and so effectively had the market themselves 670 00:36:53,640 --> 00:36:56,720 Speaker 3: for a long long time. So think about a world 671 00:36:56,760 --> 00:36:59,080 Speaker 3: where they kind of covered most of the bases with 672 00:36:59,239 --> 00:37:03,439 Speaker 3: levered products u x three x ques by major bench 673 00:37:03,520 --> 00:37:04,000 Speaker 3: mod so. 674 00:37:03,920 --> 00:37:07,280 Speaker 1: They got to get their first exactly Yeah, agree, qq 675 00:37:08,040 --> 00:37:09,239 Speaker 1: guess so much as this has. 676 00:37:09,320 --> 00:37:12,319 Speaker 2: This is a triple leveraged ques. Guess the assets his 677 00:37:12,400 --> 00:37:17,520 Speaker 2: has four twenty Yeah, good job man, Look, yeah, I've 678 00:37:18,719 --> 00:37:22,120 Speaker 2: I hadn't looked your ETF sixth sense is getting better. 679 00:37:22,360 --> 00:37:25,840 Speaker 2: It's twenty three billion. That's that's an enormous amount and 680 00:37:25,880 --> 00:37:27,960 Speaker 2: they charge eighty eight basis points on that. That is 681 00:37:28,760 --> 00:37:31,359 Speaker 2: we always say that those two leverage companies got a 682 00:37:31,400 --> 00:37:33,960 Speaker 2: good little gig and they're protected from Vanguard. 683 00:37:34,400 --> 00:37:36,759 Speaker 1: But they're there, and you can look at them and 684 00:37:36,800 --> 00:37:38,520 Speaker 1: be like, is that something that I want to like? 685 00:37:39,480 --> 00:37:42,120 Speaker 1: Are they So? Yeah, they have that such a lockdown 686 00:37:42,200 --> 00:37:44,839 Speaker 1: that it's not worth your strategy. 687 00:37:45,040 --> 00:37:48,080 Speaker 3: So into the it again, you're you're you're kind of 688 00:37:49,360 --> 00:37:52,839 Speaker 3: entering into a really interesting area of the ETF world 689 00:37:52,920 --> 00:37:55,920 Speaker 3: because it's not just about product development, it's about index 690 00:37:56,040 --> 00:38:01,000 Speaker 3: licensing and access to intellectual property. So I think that 691 00:38:01,400 --> 00:38:06,279 Speaker 3: before even answered that question, we wouldn't even be able 692 00:38:06,280 --> 00:38:09,440 Speaker 3: to get the license for those indexes, let alone to 693 00:38:09,480 --> 00:38:11,840 Speaker 3: be able to launch the strategies. So again, that's a 694 00:38:12,000 --> 00:38:15,759 Speaker 3: very interesting area of the ETF world where a lot 695 00:38:15,760 --> 00:38:19,160 Speaker 3: of it comes down to who owns what properties and 696 00:38:19,200 --> 00:38:21,880 Speaker 3: what intellectual property and is able to sort of build 697 00:38:21,880 --> 00:38:26,239 Speaker 3: a moat through access to certain benchmarks. But leaving that aside, 698 00:38:26,560 --> 00:38:30,120 Speaker 3: I think it would be difficult for us to compete 699 00:38:30,239 --> 00:38:32,560 Speaker 3: on a like for like basis because we would be 700 00:38:32,640 --> 00:38:36,920 Speaker 3: adding no value effectively other than maybe doing it for 701 00:38:37,080 --> 00:38:40,400 Speaker 3: slightly less fees or something like that, which I don't 702 00:38:40,400 --> 00:38:42,879 Speaker 3: think would be enough of a draw to get people in. 703 00:38:43,520 --> 00:38:46,120 Speaker 3: I think that's why we're doing the approach we're doing, 704 00:38:46,200 --> 00:38:48,879 Speaker 3: which is we're innovating in new categories like every single 705 00:38:48,880 --> 00:38:52,640 Speaker 3: stocks or your boost, where we're able to bring completely 706 00:38:52,680 --> 00:38:55,279 Speaker 3: new concepts to market, and we would prefer to own 707 00:38:55,320 --> 00:38:59,800 Speaker 3: the new concepts then rather trying to compete with existing 708 00:38:59,800 --> 00:39:03,799 Speaker 3: one where it's you know, it's not it's not likely 709 00:39:03,880 --> 00:39:05,760 Speaker 3: that that we are going to have much success. 710 00:39:06,120 --> 00:39:06,840 Speaker 1: Totally makes sense. 711 00:39:07,360 --> 00:39:10,600 Speaker 2: So your second biggest ETF sort of sticks out now 712 00:39:10,719 --> 00:39:14,160 Speaker 2: in this two x world you've created as bar to 713 00:39:14,239 --> 00:39:17,759 Speaker 2: gold ETF. I remember interviewing you my first book, The 714 00:39:17,760 --> 00:39:22,480 Speaker 2: Institutional ETF Toolbox, available on Amazon at the World Gold Council. 715 00:39:22,600 --> 00:39:25,520 Speaker 2: You were you were mister g LD. Then you launched 716 00:39:25,520 --> 00:39:30,360 Speaker 2: a lower fee version of gold called Bar and you 717 00:39:30,360 --> 00:39:32,360 Speaker 2: even call your company Great Inshore. So you're like a 718 00:39:32,400 --> 00:39:37,120 Speaker 2: gold guy, I think a core bitcoin comes along. What's 719 00:39:37,160 --> 00:39:39,520 Speaker 2: your take on that, Like, if you were talking to 720 00:39:39,719 --> 00:39:42,239 Speaker 2: I don't know, your uncle who was like, hey, what 721 00:39:42,320 --> 00:39:44,520 Speaker 2: should I do? I do want something that protects me 722 00:39:44,560 --> 00:39:47,759 Speaker 2: from the devaluation of currencies. Should I go into gold 723 00:39:47,800 --> 00:39:50,560 Speaker 2: or bitcoin? What would you tell them? 724 00:39:50,680 --> 00:39:54,640 Speaker 3: Well, I think that, you know. One thing to also 725 00:39:55,080 --> 00:39:57,319 Speaker 3: point out is that, you know, we were one of 726 00:39:57,320 --> 00:40:00,520 Speaker 3: the first people to register for a bitcoin ETF, and 727 00:40:01,280 --> 00:40:04,279 Speaker 3: it's an entrepreneurial story rather than a technical story. But 728 00:40:05,200 --> 00:40:07,640 Speaker 3: when we were in the first thing of twenty eighteen, 729 00:40:07,880 --> 00:40:10,600 Speaker 3: the SEC came round and said, Nope, sorry, not going 730 00:40:10,640 --> 00:40:15,120 Speaker 3: to happen. Because of, you know, the ETF experience that 731 00:40:15,160 --> 00:40:17,239 Speaker 3: I had by being in the market for a long 732 00:40:17,280 --> 00:40:19,200 Speaker 3: long time, I knew that, hey, this could go on 733 00:40:19,320 --> 00:40:22,160 Speaker 3: for a number of years, you know, almost certainly going 734 00:40:22,200 --> 00:40:24,239 Speaker 3: to cost a huge amount of money, and as a 735 00:40:24,280 --> 00:40:26,759 Speaker 3: startup company at the time, just didn't have the resources 736 00:40:26,760 --> 00:40:31,279 Speaker 3: to fight, you know, the battle on that. So I 737 00:40:31,280 --> 00:40:34,080 Speaker 3: think from my perspective, I've always kind of viewed our 738 00:40:34,160 --> 00:40:39,000 Speaker 3: job as we're somewhat agnostic to the underlying assets that 739 00:40:39,440 --> 00:40:42,840 Speaker 3: were invested in. It's our job is to give people 740 00:40:43,160 --> 00:40:46,200 Speaker 3: or provide products that people love, and you know, if 741 00:40:46,239 --> 00:40:49,040 Speaker 3: people want access to bitcoin, it's our job to do that. 742 00:40:49,080 --> 00:40:51,680 Speaker 3: If you want access to gold, it's our job to 743 00:40:51,719 --> 00:40:56,440 Speaker 3: do that. So I personally don't own any bitcoin. I 744 00:40:56,600 --> 00:40:59,520 Speaker 3: don't have anything against it. It's just I think for me, 745 00:41:00,120 --> 00:41:02,520 Speaker 3: I've always sort of struggled with the fact that you know, 746 00:41:02,560 --> 00:41:08,040 Speaker 3: inherently there's no intrinsic value, and it's different fundamentally from gold. 747 00:41:08,080 --> 00:41:11,400 Speaker 3: And so coming from the gold background, I you know, 748 00:41:11,560 --> 00:41:14,000 Speaker 3: feel like, Okay, there's there's a cost, you clearly of 749 00:41:14,040 --> 00:41:16,839 Speaker 3: owning gold. There is a cost of mining it, there's 750 00:41:16,840 --> 00:41:19,520 Speaker 3: a cost of storing it, there's a cost of ensuring it, 751 00:41:19,800 --> 00:41:23,719 Speaker 3: there's a cost of transporting it. And I think that 752 00:41:23,880 --> 00:41:27,200 Speaker 3: with bitcoin. The the thing that I always struggle with 753 00:41:27,400 --> 00:41:30,839 Speaker 3: is that once you've made up your mind you when 754 00:41:30,880 --> 00:41:33,400 Speaker 3: you take something, any asset that has zero intrinsic value, 755 00:41:34,160 --> 00:41:36,600 Speaker 3: once you make up your mind that the value is 756 00:41:36,680 --> 00:41:40,200 Speaker 3: not zero, then it can be anything. So when I 757 00:41:40,200 --> 00:41:42,840 Speaker 3: look at the price, it's like, Okay, it's sixty thousand dollars, 758 00:41:43,440 --> 00:41:47,279 Speaker 3: all right, it could be one dollar, sixty thousand, five 759 00:41:47,360 --> 00:41:48,680 Speaker 3: hundred thousand, It's whatever I can. 760 00:41:48,600 --> 00:41:49,799 Speaker 1: Sell it for exactly way. 761 00:41:49,840 --> 00:41:54,680 Speaker 2: And he saything about bar or gold Well, just because 762 00:41:54,680 --> 00:41:56,400 Speaker 2: some people were its jewelry, is that the argument? 763 00:41:57,040 --> 00:42:00,239 Speaker 3: No, I mean, it's a real thing that you know, 764 00:42:00,480 --> 00:42:04,719 Speaker 3: costs a lot of money to mine, to produce, to 765 00:42:04,800 --> 00:42:07,919 Speaker 3: get the permitting, you know, so you know that there's 766 00:42:07,960 --> 00:42:11,719 Speaker 3: a real kind of fundamental economic one oh one principle 767 00:42:11,920 --> 00:42:14,440 Speaker 3: around any kind of hard asset and has been, you know, 768 00:42:14,520 --> 00:42:19,440 Speaker 3: for thousands of years. And again people will of course 769 00:42:19,480 --> 00:42:21,919 Speaker 3: go on about the amount of electricity costs and things 770 00:42:21,920 --> 00:42:24,239 Speaker 3: to mind bitcoin and the cost of the technology to 771 00:42:24,280 --> 00:42:25,840 Speaker 3: do it, and I hear all of that. I think 772 00:42:26,280 --> 00:42:30,240 Speaker 3: it's just that basic concept of Okay, if the intrinsic 773 00:42:30,280 --> 00:42:33,400 Speaker 3: value of zero, once you've made up your mind that 774 00:42:33,480 --> 00:42:36,560 Speaker 3: it's something other than zero, it can be anything. 775 00:42:38,120 --> 00:42:42,640 Speaker 1: Final question, favorite ETF ticker other than any of your own? 776 00:42:47,080 --> 00:42:49,759 Speaker 3: That is a great question. I know this is this 777 00:42:49,800 --> 00:42:53,840 Speaker 3: is not necessarily the most in a you know, the 778 00:42:53,920 --> 00:42:56,839 Speaker 3: most sort of unique or give us something good here. 779 00:42:57,120 --> 00:42:58,319 Speaker 1: I can tell it's. 780 00:42:58,280 --> 00:43:02,279 Speaker 3: Kind of a tie, but I think it the Q, Q, 781 00:43:02,440 --> 00:43:06,680 Speaker 3: qu Q and spy one of the three letter three 782 00:43:06,719 --> 00:43:09,720 Speaker 3: letter tickers are now kind of very rare. They denote 783 00:43:09,760 --> 00:43:13,759 Speaker 3: something that's a lot older. But I think that while 784 00:43:13,760 --> 00:43:20,160 Speaker 3: there's not necessarily anything clever about the symbols themselves, what's 785 00:43:20,320 --> 00:43:24,000 Speaker 3: good about them is they've represented or become to be 786 00:43:24,160 --> 00:43:28,200 Speaker 3: like sort of like Coca Cola of BTFS for that 787 00:43:28,239 --> 00:43:31,399 Speaker 3: particular category, and that's cool, you know. I think when 788 00:43:31,880 --> 00:43:34,160 Speaker 3: that was the test of a great ETF is when 789 00:43:34,400 --> 00:43:37,919 Speaker 3: people know the ticker more than they know the actual strategy. 790 00:43:38,000 --> 00:43:40,759 Speaker 3: And so I've heard stories, just one one particular one 791 00:43:40,760 --> 00:43:43,400 Speaker 3: that made me laugh. And why I thought of the cues. 792 00:43:43,600 --> 00:43:46,600 Speaker 3: I was recently in Japan, just a few weeks ago, 793 00:43:47,239 --> 00:43:49,920 Speaker 3: and I was talking to do some investors there and 794 00:43:50,239 --> 00:43:54,960 Speaker 3: including somebody from Invesco. And Invesco, of course, is the 795 00:43:54,960 --> 00:43:58,799 Speaker 3: the issuer of the cues. And they said that, well, 796 00:43:58,840 --> 00:44:01,719 Speaker 3: we have a lot of you know, issues with brand 797 00:44:01,760 --> 00:44:05,560 Speaker 3: recognition in Asia because no one knows Invesco. 798 00:44:05,280 --> 00:44:05,880 Speaker 1: Any other cues. 799 00:44:07,000 --> 00:44:08,800 Speaker 3: And they said that, yeah, you go to a meeting 800 00:44:08,960 --> 00:44:11,960 Speaker 3: and you know, the client will say, oh, you know Invesco, 801 00:44:12,080 --> 00:44:13,960 Speaker 3: Yeah we don't, we don't know who you are. And 802 00:44:14,040 --> 00:44:16,600 Speaker 3: they said, oh, okay, well we've got the cues. Said oh, 803 00:44:16,680 --> 00:44:19,680 Speaker 3: I know the cues. And so they know the cues 804 00:44:19,719 --> 00:44:21,719 Speaker 3: but have no idea the company that represents it. I 805 00:44:21,760 --> 00:44:23,440 Speaker 3: think that's a sign of you know when you made 806 00:44:23,480 --> 00:44:25,480 Speaker 3: it as a ticker, if you're a ticket symbol that 807 00:44:25,600 --> 00:44:28,400 Speaker 3: is looking for when you've made it, and we just 808 00:44:28,480 --> 00:44:30,279 Speaker 3: know you're a product exactly all right. 809 00:44:30,440 --> 00:44:32,120 Speaker 1: Well, Ryan, thanks for joining us on Trillions. 810 00:44:32,400 --> 00:44:34,040 Speaker 3: Thank you so much, absolute pleasure. 811 00:44:39,960 --> 00:44:42,960 Speaker 4: Thanks for listening to Trillions until next time. You can 812 00:44:42,960 --> 00:44:48,400 Speaker 4: find us on the Bloomberg Terminal, Bloomberg dot com, Apple Podcasts, Spotify. 813 00:44:48,440 --> 00:44:49,880 Speaker 1: Or wherever else you'd like to listen. 814 00:44:50,440 --> 00:44:53,040 Speaker 4: We'd love to hear from you. We're on Twitter, I'm 815 00:44:53,200 --> 00:44:58,200 Speaker 4: at Joel Webbers Show. He's at Eric Balchuna's. This episode 816 00:44:58,239 --> 00:45:01,479 Speaker 4: of Trillions was produced by Magnus and it's bye. 817 00:45:02,080 --> 00:45:06,600 Speaker 1: Mm hmmm mmmmm mm hmmm