Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.
Speaker 1: I'm Joe Wisenthal, and unfortunately is terrible news. My co
Speaker 1: host and colleague Tracy Alloway is traveling this week and
Speaker 1: couldn't join me for today's episode, so I'm already starting
Speaker 1: the episode in a bad mood. Nonetheless, I will persist
Speaker 1: because I'm very excited about today's topic. Probably one of
Speaker 1: the biggest stories, themes, whatever you want to call it
Speaker 1: in finance right now, and that is the rise, the
Speaker 1: seemingly inexorable rise of the E t F exchange traded funds,
Speaker 1: completely changing the way how people invest, being able to
Speaker 1: invest in an index, or a strategy, or all kinds
Speaker 1: of other stuff just simply as buying a stock, completely
Speaker 1: revolutionizing the industry, striking terror in the hearts of many managers.
Speaker 1: People say, E t F s arey this godsend that
Speaker 1: have made investing much cheaper and simpler for the average person,
Speaker 1: enabling more complex strategies. Other people say it's going to
Speaker 1: be the end of capitalism and that it's the road
Speaker 1: to Marxism. Nothing quite causes controversy like E t F.
Speaker 1: Some people think they're going to be the source of
Speaker 1: the next systemic risk. So there is literally an endless
Speaker 1: amount of stuff we could talk about with e t
Speaker 1: f s. And to do that, well, you have two
Speaker 1: great guests who are also my colleagues. Joe Weber, he's
Speaker 1: the editor in chief of Bloomberg Markets magazine, and Eric
Speaker 1: bel Tunis. He is a E t F analyst for
Speaker 1: Bloomberg Intelligence. He's literally written the book about e t
Speaker 1: f s, knows all about how they work. And so
Speaker 1: today we're going to talk to both of them, or
Speaker 1: I'm going to talk to both of them about how
Speaker 1: E t F I've eaten the finance world and where
Speaker 1: they're going next, how they're going to evolve, how they're
Speaker 1: changing the industry every single day. So without further Ado,
Speaker 1: let me welcome Joel and Eric. Thanks for having us,
Speaker 1: Thank you, thanks to both of you. So Eric, I
Speaker 1: want to start with you, but you know, both of
Speaker 1: you just jump in, let's have a conversation. I would
Speaker 1: like to make sure that I introduced things correctly because
Speaker 1: I think you know, I want to make sure that
Speaker 1: I set it up. But when you look at the
Speaker 1: E t F world, and this is what you do
Speaker 1: at Bloomberg from the minute you get on to the
Speaker 1: moment you log off, and even after that, and even
Speaker 1: after that, you're thinking about E T S all the time.
Speaker 1: This is your life's work understanding this behemoth. Is that
Speaker 1: a reasonable characterization of what's going on? Yeah? I mean,
Speaker 1: you know, I remember I was in Bloomberg Data back
Speaker 1: in the early two thousand's and the only reason I
Speaker 1: got E T S I was covering mutual funds. I
Speaker 1: had been been a fun reporter back in the day,
Speaker 1: and I got E T F assigned to me because
Speaker 1: a woman covering them. When on return he leave, it
Speaker 1: never came back. I remember it was two thousand and six.
Speaker 1: It was just right after g l D had launched,
Speaker 1: and it took me, you know, I can't remember exactly
Speaker 1: the timeline, but it just took me very quickly to
Speaker 1: realize that these things were going to be a big deal,
Speaker 1: and I just saw an opportunity. So it was already
Speaker 1: familiar with funds, and I think that when you're familiar
Speaker 1: with mutual funds and hedge funds and clothes and funds
Speaker 1: and you start to sniff around the E T F,
Speaker 1: you realize this thing isn't just like one little notch
Speaker 1: better than the rest, it's like six notches better. It's
Speaker 1: a game changer. So I definitely, um, I guess life's
Speaker 1: work is seems strong, but I guess it is. Uh.
Speaker 1: I have been doing it for a decade. So you
Speaker 1: mentioned something there that's very interesting, which is the g
Speaker 1: l D e t F, which is the Spider Gold
Speaker 1: Shares e t F. It tracks the price of gold.
Speaker 1: It launched in late two thousand and four. More or less,
Speaker 1: buying it gives you exposure very directly to the price
Speaker 1: of gold, and that seems very simple you by this.
Speaker 1: It holds gold. But it is revolutionary, isn't it Because
Speaker 1: prior to the existence of this e t F, if
Speaker 1: you wanted to have exposure to gold, it was not easy.
Speaker 1: You had to go out and buy maybe by physical gold,
Speaker 1: and that was difficult, and it was this huge mark up.
Speaker 1: And then you have to figure out safe. How are
Speaker 1: you gonna you get a safe, You're gonna figure out
Speaker 1: how to still remember the password, remember the password, And
Speaker 1: suddenly this very complicated, costly, time consuming strategy is as
Speaker 1: simple as buying a share of Microsoft. I think what
Speaker 1: you're describing is two things that come to mind to
Speaker 1: me is convenience, I mean everything in this world, it's
Speaker 1: a business. Usually convenience is a big part of why
Speaker 1: people like it. And the second thing is the democratization
Speaker 1: of investing. So the idea that the you know, being
Speaker 1: able to buy anything under the sun like it was
Speaker 1: shares of Microsoft, and everybody likes the way stocks trade,
Speaker 1: so you're essentially making everything trade like stock. So you know,
Speaker 1: the Bloomberg terminal has the yellow keys. All those things
Speaker 1: now trade like equities. And the structure itself allows for
Speaker 1: some arbitrage which helps the nav stay close to the price,
Speaker 1: so you get a fair deal on what you're looking
Speaker 1: to get and you can and now it's level the
Speaker 1: playing field. And the other thing about it, it's democratized.
Speaker 1: That is, everyone pays the same price. In mutual funds,
Speaker 1: you have these share classes that are like a regressive
Speaker 1: tax system, and with the e t F, it basically
Speaker 1: everybody gets the institutional level feed. It's like the Sam's
Speaker 1: wholesale club. The thing that I wanted to kind of
Speaker 1: point out, Eric was I was looking at flows here
Speaker 1: and you know Spy which tracks s actually was the
Speaker 1: very first e t F, which which you've actually written
Speaker 1: about for me and Bloomberg markets, but there are obviously
Speaker 1: other e t F s since then which that came
Speaker 1: out in So even though spies the biggest E t
Speaker 1: F of all, there are other competitors, right. And one
Speaker 1: of the things that's happened this year when we look
Speaker 1: at flows is that even though the spy has is
Speaker 1: up for the year to date, flows are way down, right,
Speaker 1: and other SMP five products are up. What's going on there? Yeah?
Speaker 1: So the E t F industry, you know, I refer
Speaker 1: to it as a jungle as you know, droll because
Speaker 1: it's brutal. People are undercutting fees and there's similar products
Speaker 1: and there's hardly any money. I mean, eat F industry
Speaker 1: only produces about six billion dollars a year in revenue.
Speaker 1: To put that into perspective, hedge funds make about sixty
Speaker 1: five billion a year in revenue, so and they have
Speaker 1: less assets. So there's not much assets and people are
Speaker 1: calling and so spies outflows are a function of black Rock,
Speaker 1: who has i VV which is the other smp F
Speaker 1: t F Vanguard has one two came in at point
Speaker 1: oh four percent, so they lower their fee from point
Speaker 1: of seven to point oh four is five charges point
Speaker 1: o nine and just a couple of basis points was
Speaker 1: enough to completely change the flows. And SPY is not
Speaker 1: in any trouble. They don't, don't feel bad for it.
Speaker 1: It's still spy will always appeal to like really hardcore trader,
Speaker 1: some big institutions. It It trades more each here than
Speaker 1: Japan's GDP basically, and there's you know, options market is massive,
Speaker 1: and so ultimately i VV has been stealing not institutional money,
Speaker 1: but retail and advisor money. They care more about the
Speaker 1: feed because when you go in long term, the expense
Speaker 1: rat sue does matter way more than any little like
Speaker 1: extra basis point on the spread, which is I think
Speaker 1: an interesting thing to keep in mind here is that
Speaker 1: buying and holding e t f s is kind of
Speaker 1: a recent phenomenon, right because here to date it's been
Speaker 1: more of a trading strategy, which is always also the
Speaker 1: knock on e t f s because they're so easy
Speaker 1: to trade with, people just trade with them constantly. But
Speaker 1: buying and holding because they're so cheap, it's sort of
Speaker 1: really catching on now, right. I called this the investor
Speaker 1: enlightenment age, where investors are finally understanding the importance of cost.
Speaker 1: They're getting better at asset allocation. But the next phase
Speaker 1: of this is behavior, And I think there is some
Speaker 1: credence to John Bogel's criticism of heifs that the temptation
Speaker 1: to trade goes up a lot, unlike a mutual fund,
Speaker 1: where it's like just kind of it's just like too
Speaker 1: annoying to have to sell it and you get out
Speaker 1: the end of the day. But if you could trade
Speaker 1: intra day, the temptation goes up. And I think if
Speaker 1: you do too much trading, you basically completely kill all
Speaker 1: of the cost savings. So I think the next baton
Speaker 1: is like, how do you basically not trade yourself out
Speaker 1: of the cost savings from using the et F in
Speaker 1: the first place. But there is some buying and holding.
Speaker 1: So there's two things here that I think are really important.
Speaker 1: And one is you know, again it's similar to the
Speaker 1: gold ETF. You think, oh, it's really simple. You buy
Speaker 1: the ETF. It just tracks the gold. That's not a
Speaker 1: complex strategy. But when you think about how difficult it
Speaker 1: is to actually own golden story, it turns out that
Speaker 1: something very difficult has become very simple. It's the same
Speaker 1: for this, right, I mean, like, there wouldn't wuld be
Speaker 1: prior to the existence of this e t F. We
Speaker 1: think of an STP five index tracker as about as
Speaker 1: plain vanilla as it gets when it comes to investing.
Speaker 1: But imagine the impossibility for the average person of replicating
Speaker 1: that on their own buying five stocks, if they wanted
Speaker 1: to trade that in and out, it would be essentially
Speaker 1: impossible being able to, you know, always trade in and
Speaker 1: out of this perfectly balanced index of five stocks. That
Speaker 1: would actually qualify as an extremely complicated thing to do. Um.
Speaker 1: You know, before we even get into more complicated ETFs.
Speaker 1: That alone would be a you know, investment vehicle that
Speaker 1: the person you know, would be almost impossible. Now, we
Speaker 1: talked about this incredible fee compression that we're seeing and
Speaker 1: the idea of like people going crazy finding the e
Speaker 1: t F that offers the same thing for a slightly
Speaker 1: lower fee um, and this is a big part why
Speaker 1: these vehicles strike terror in the heart of of the
Speaker 1: financial industry, just because the extraordinary you know, this is
Speaker 1: where people make their money, the extraordinary feed deflation. We're saying, Well,
Speaker 1: I think the other thing to mention there too, is
Speaker 1: that this is a first and foremost sort of an
Speaker 1: improvement on the mutual fund, right, which was an index
Speaker 1: thing already you can always buy it was, and you
Speaker 1: couldn't trade it into day. But then the vehicle itself
Speaker 1: went from you know, just whatever index you want to track,
Speaker 1: to boy, we can make anything an index. And not
Speaker 1: only can we make anything an index, but we can
Speaker 1: look at oil, which you, as a retail investor, could
Speaker 1: never touch before, and all of a sudden, now you
Speaker 1: can dabble in things that are really crazy, I think
Speaker 1: from a retail's perspective, and as a consumer, I think
Speaker 1: that's the scary part, is that you can look at
Speaker 1: this and you can buy anything you want, even though
Speaker 1: you might not understand. Well, let's talk about that, Eric,
Speaker 1: because one of the most you know, biggest phenomenons of
Speaker 1: the last year, maybe a couple of years, but it's
Speaker 1: really sort of taken on life of its own is
Speaker 1: people trading volatility products, so exchange traded notes similar to
Speaker 1: e t f s that track not a specific basket
Speaker 1: of equities or any or even a commodity, but volatility itself.
Speaker 1: Explained to us what those are and why they've become
Speaker 1: this subject of fascination. You know, the VIX in general,
Speaker 1: it's like betting on fear. And I think that's just
Speaker 1: here's the thing the VIX in general, um, I call
Speaker 1: it media proof. And the E t N that tracks
Speaker 1: is VXX. That's the main When that goes long, vixed
Speaker 1: futures on the short end of the curve, that thing,
Speaker 1: because you have to roll the future is it basically
Speaker 1: will lose about a year just on that rolling. Uh.
Speaker 1: Some call it decay, but people still trade the you
Speaker 1: know what out of it every day and it's never
Speaker 1: had one bit of good ink written about it. It's
Speaker 1: media proof because why when the market goes down like
Speaker 1: city SMP goes down two, the VIX would be up
Speaker 1: like say, I don't know, the xx would get up
Speaker 1: about half that nine So nine percent is more than
Speaker 1: is more than even a negative triple leverage inverse S
Speaker 1: and P five hundred. So I called it's the jackpot.
Speaker 1: When VIX works, it's like the payout from heaven. So
Speaker 1: that's one reason people go along the VIX E T
Speaker 1: S and the short one x I V which you
Speaker 1: and I've discussed a lot. I think he called the
Speaker 1: magic money machine, if I'm correct, which I think is
Speaker 1: a perfect name for it because it just spits out money. Um.
Speaker 1: I sometimes call it the greatest of all time because
Speaker 1: it's had the best performance of any product ever in
Speaker 1: the existence of e t s. Seriously, if you're listening
Speaker 1: to this, if you're at home and you've never checked
Speaker 1: out the ticker x I V, bring it up somewhere.
Speaker 1: Take a look at this chart. It just goes up.
Speaker 1: I mean, so the thing is is that I gotta
Speaker 1: be really careful. It's one day it's not gonna go up,
Speaker 1: So I don't want to be like representing that you're
Speaker 1: going to make money on this. However, here to four,
Speaker 1: since its existence in it goes up. Occasionally, it has
Speaker 1: these really sharp draw downs because when volatility does spike,
Speaker 1: it gets crushed, but it almost completely erases them very
Speaker 1: quick after. In uh, you know, since the beginning of
Speaker 1: it started around twenty, it's up fivefold. So betting against
Speaker 1: volatility has been like, just this incredibly good trade and
Speaker 1: this vehicle has just made people an extraordinary amount of money. Yeah,
Speaker 1: I mean, this x I V ultimately takes advantage of
Speaker 1: what that a year loss in VXX that I talked about,
Speaker 1: that's a gain for x I V. So somebody just
Speaker 1: and that that's sort of the innovation of ets. People
Speaker 1: complain about this one thing and then all of a
Speaker 1: sudden there's a new ETF to like take advantage of
Speaker 1: that complaint or correct it. And x I V. You know,
Speaker 1: it's controversial, but as long as vault stay is low,
Speaker 1: it doesn't make money on VIX going down. It makes
Speaker 1: money on basically the role, so it benefits from that.
Speaker 1: But it certainly is something that I think, like we're
Speaker 1: developing this rating system at b I where we're going
Speaker 1: to give every E t F a green, yellow or
Speaker 1: red light, and this would be a red light. Doesn't
Speaker 1: mean you can't use. It just means that if your
Speaker 1: retail you really need to read the fine print and
Speaker 1: understand what you're buying. Because x I V on a
Speaker 1: bad day could go down in a day, right and
Speaker 1: it wouldn't even take anything that extraordinary for that to
Speaker 1: happen right like around. But I think breggs that it
Speaker 1: went down. I can't know in the exactly, maybe August
Speaker 1: it was down like thirty or over two days, um,
Speaker 1: And if it goes down more, it will just shut down,
Speaker 1: it will close and redeem the money. Wow, I didn't
Speaker 1: realize that And Just to be clear, this is a
Speaker 1: strategy that the average person would never prior to this
Speaker 1: existence have any real way of playing like being I mean,
Speaker 1: there was just the ease with which one can now
Speaker 1: bet against volatility can't even be compared to the level
Speaker 1: of technical skill and knowledge that it would have required
Speaker 1: to make the same trade prior to the existence. I mean,
Speaker 1: it's completely uncomparable, totally. This is why again I think
Speaker 1: a rating system like movies is what e t F
Speaker 1: s need, because I don't think you want to ban
Speaker 1: an e t F like X I V because for
Speaker 1: a certain group of investors it's great. It's a convenient
Speaker 1: way to do what you have you have to go
Speaker 1: basically short fixed futures. In this case, it just does
Speaker 1: it for you. But yeah, for for certain investors this
Speaker 1: is definitely off the charts, potentially complicated. And the other
Speaker 1: one is like leverage gtfs, which use total return swaps,
Speaker 1: which ultimately you needed to have like a prime broker
Speaker 1: or Noah, you know, have connection with Golden Sacks to
Speaker 1: get a swap contract. Now any investor can basically access
Speaker 1: them through leverage e t f s. So the democratization
Speaker 1: has gone into some really complicated, potentially dangerous areas. There's
Speaker 1: no denying that, all right. So we've talked about these
Speaker 1: very early E t F that you know seem quite
Speaker 1: simple but are in fact incredibly uh you know, complicated.
Speaker 1: They make life a lot simpler. Now there's this obsession
Speaker 1: with you know, various products that we see today that
Speaker 1: would essentially be impossible for the average person to replicate
Speaker 1: on their own, but now the E t F to
Speaker 1: make it incredibly simple, even if the people maybe don't
Speaker 1: really understand what they're buying a lot of the time,
Speaker 1: necessitating a need for more clarity on some of the risks.
Speaker 1: Let's look forward. Where is this industry going next? I
Speaker 1: see two evolutionary lines. One is a race to zero.
Speaker 1: So we talked about i VV and sp Y in
Speaker 1: that whole battle that also includes Vanguard and Schwab, and
Speaker 1: they're going to be in this few war that now
Speaker 1: has them down to like selling the whole stock market
Speaker 1: for point oh three. That's probably gonna be zero in
Speaker 1: a year or two. So on the one evolutionary line,
Speaker 1: it's great for investors. You're able to get your whole
Speaker 1: portfolioll be free probably within five years. That that's a
Speaker 1: tough line to do business. And by the way, that's
Speaker 1: like taking on Vanguard and Swab is just almost like suicide.
Speaker 1: But hey, for investors, it's great. There's also that idea though,
Speaker 1: that you might get paid to own an e t F. Yeah,
Speaker 1: there's some talk about that. It's possible that they might
Speaker 1: do like a negative expense ratio where they actually give
Speaker 1: you four or five basis points just to buy the
Speaker 1: thing um just because they want your assets, because then
Speaker 1: they could lend some securities out, or in Schwab's case,
Speaker 1: they'll they invest some in treasuries, make the interest basically
Speaker 1: whoever considered the biggest pile of assets. They feel like
Speaker 1: they could give free exposure everybody and make money in
Speaker 1: other ways. That's why these companies would go that low.
Speaker 1: But the other evolutionary line, I think is the one
Speaker 1: where for me as an analyst, it's uh, it's exciting
Speaker 1: because that first one is very plain vanilla, but the
Speaker 1: other one is like everything that ever happened on Wall Street, ever,
Speaker 1: and every idea that anyone's head could be packaged into
Speaker 1: an index, and that's what's happening there. That's like the experimental,
Speaker 1: innovative side where you see like like T. Boon Pickens
Speaker 1: is going to pack at his oil strategy into an
Speaker 1: E t F. Soon Gunlock made an E t F.
Speaker 1: Then you're gonna have things like this new E t
Speaker 1: F powered by IBM S Watson, the robotics CTF, all
Speaker 1: kind of wild stuff that can charge a little more
Speaker 1: because the potential to outperform is higher. And that's where
Speaker 1: you see a lot of the bigger companies go eventually
Speaker 1: because they're just not going to fight vanguards, so they'll
Speaker 1: come out with some more like repackaged active and we've
Speaker 1: seen that, like you know, what is it Goldman SAX
Speaker 1: has launched ETFs based on what is it the recommendations
Speaker 1: of their what are the there's some Goldman et f
Speaker 1: s that are sort of based on their own internal research, right, yeah,
Speaker 1: so close. They had at Goldman sex v I p
Speaker 1: Hedge Fund Research TTF. Now here's the thing that is
Speaker 1: a is a research report, but it's based on hedge
Speaker 1: fund holdings, so it's not quite Goldman's picks. Now you
Speaker 1: bring up a good point though, because this week, literally
Speaker 1: this week, and by the way, you brought up Marxism earlier,
Speaker 1: the group, the research group behind that Marxism claim that
Speaker 1: passive was the road to Marxism is now launching e
Speaker 1: t F s. So irony aside or hypocrisy aside. Uh,
Speaker 1: they're now going to basically do what you just said.
Speaker 1: They're gonna put their top sixty or their sixty outperformed
Speaker 1: picks into an e t F. This is Bernstein, by
Speaker 1: the way, and you'll be able to buy it. Now.
Speaker 1: If this gets any traction, lookout for Goldman and JP
Speaker 1: Morgan to do that, which I think is great. That's uh,
Speaker 1: you know, Walt sell side, research is one of the
Speaker 1: last things to be democratized or broke, you know, turned
Speaker 1: into an e t F. On the flip side, that's
Speaker 1: pretty proprietary stuff. So giving it away like that, I'm
Speaker 1: you know, I'm not sure if that would irk current clients.
Speaker 1: Another thing is, once you put all your calls in
Speaker 1: an e t F, we now know how good you are. Yeah,
Speaker 1: you know. Eric. The other thing that that brings to
Speaker 1: mind when you're talking about research is sort of the
Speaker 1: implications of Method two in Europe, which is this you know,
Speaker 1: kind of hallmark piece of legislation that's gonna take effect
Speaker 1: January three, and there's a lot of speculation that e
Speaker 1: t F are going to be one of the biggest
Speaker 1: winners of that eventuality. Can you speak to that a
Speaker 1: little bit? What do you what do you what do
Speaker 1: you see happening when method goes into effect? So myfed two.
Speaker 1: I know that some people just probably went to sleep,
Speaker 1: but it basically this myth. This is a rule that's
Speaker 1: just basically like in Europe. You know how here the
Speaker 1: investors will like sell you out for one basis point
Speaker 1: for the cheaper e t F. It's the opposite. In Europe.
Speaker 1: People have no idea what they're paying. So people pay
Speaker 1: two to five percent in a mutual fund fee, and
Speaker 1: then they get broker commissions on top of that, so
Speaker 1: they could be paying up to seven or eight percent.
Speaker 1: And here we're arguing over seven basis points. So this
Speaker 1: is going to make all that transparent. People are gonna
Speaker 1: see line items of all the stuff they're paying for
Speaker 1: and their fund. One of those is research. That was
Speaker 1: the impetus. But the side effect of this is that
Speaker 1: once the cost or transparent, they think a lot of
Speaker 1: people will switch over to e t S because it's
Speaker 1: sort of like the d L rule here. Anytime regulations
Speaker 1: in any country step in and say, hey, we need
Speaker 1: to make things more transparent. E T S and passive
Speaker 1: are going to win that fight, like almost every single time. Um,
Speaker 1: they thrive in the light, whereas when there's layers of
Speaker 1: fees that's sort of more the way the mutual fund
Speaker 1: industry has thrived without that transparency. So myf the two
Speaker 1: is bad for mutual funds, probably good for E T
Speaker 1: f s. And this is I think to put all
Speaker 1: of this in context, is why these things are going
Speaker 1: to continue to eat the world, right Eric, Because we're
Speaker 1: talking there's a sizeable amount of money. How much money
Speaker 1: is wrapped up in ETFs right now? So three trillion
Speaker 1: US four point five globally and then and then you
Speaker 1: think about where this is going. And the most bullish
Speaker 1: projection is what Eric, but bullish or sober? Well, let's
Speaker 1: do both, Okay, So the most bullish is trillion in
Speaker 1: the in the next eight years, almost the size of
Speaker 1: the US stock market right now. Yeah, that's not the
Speaker 1: sober one case, that wasn't obvious. Most sober estimates are
Speaker 1: ten to twelve trillion in ten years alright, real quickly,
Speaker 1: because we have to go but someone is going to
Speaker 1: be really curious, can you just real quickly summarize the
Speaker 1: argument that E T F could lead to Marxism? Sure?
Speaker 1: The argument is that if passives passive, so E T
Speaker 1: s and index funds, which also have three trillions, so
Speaker 1: passive has six trillion collectively in the US. Is that
Speaker 1: number grows to ten twenty trillion, passive will own a
Speaker 1: lot of America's companies. So right now Vanguard and black
Speaker 1: Rock and their passive funds are the top two owners
Speaker 1: of about the S and P stocks, and that's going
Speaker 1: to grow, only grow. So the question is if an
Speaker 1: index fund is my big owner and I'm CEO, do
Speaker 1: I get a free pass? You know? Uh, what about
Speaker 1: the corporate governance here? And so that's sort of the
Speaker 1: and where's I guess if you had an active manager,
Speaker 1: they would be like keeping the CEO in the in
Speaker 1: the company's feet to the fire. So there's some argument
Speaker 1: that the rise of passive will like sort of like
Speaker 1: hurt capitalism in that regard. I usually confront that with
Speaker 1: you know, like, first of all, like Steve John did
Speaker 1: not invent the iPhone because of a tiro price manager. Um,
Speaker 1: so capitalism is going to happen Anyway, the question is
Speaker 1: how good is Active at making sure the prices are
Speaker 1: where they should be. And I do think there's some
Speaker 1: more interesting debate on that, but right now, Passive all
Speaker 1: told only owns of the stock market, so I think
Speaker 1: until we get to thirty forty, I just don't think
Speaker 1: it's that big yet. Well, we will be out watching
Speaker 1: out for if Marxism happens, and that will be very interesting.
Speaker 1: This is a great conversation because I feel like we
Speaker 1: eat f are. Obviously everyone's heard of them by now,
Speaker 1: probably a lot of people have exposure to them, but
Speaker 1: it's like we can't state it enough in a way.
Speaker 1: How really like there are revolutionary technology as I see it,
Speaker 1: and I think the you know, talking to you guys,
Speaker 1: sounds like the revolution isn't complete. So Joe Weber of
Speaker 1: Bloomberg Markets Magazine, Eric bel tunis e T F analyst
Speaker 1: at Bloomberg Intelligence, thank you so much. That'll be it.
Speaker 1: I you know, Tracy is not here this week, so
Speaker 1: you know, I have no one to no one to
Speaker 1: banter with like I normally would, but I really enjoyed
Speaker 1: that conversation, so uh no, it was really great talking
Speaker 1: to both of you and that has been another episode
Speaker 1: of the Odd Lots Podcast. You can follow me on
Speaker 1: Twitter at The Stalwart Joel I'm at Joel webbershow Eric
Speaker 1: I'm at Eric BELTONI. If you can spell that, you
Speaker 1: can follow me. And you can also follow Tracy on Twitter,
Speaker 1: which you should do even though she wasn't here at
Speaker 1: Tracy Elloway. And our producer Sarah Patterson at Sarah patt
Speaker 1: With Two Teas. Thanks for listening.