1 00:00:13,800 --> 00:00:17,439 Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast. 2 00:00:17,520 --> 00:00:20,840 Speaker 1: I'm Mike Reagan, a senior editor at Bloomberg, and this 3 00:00:20,920 --> 00:00:22,720 Speaker 1: week on the show, it was sort of a week 4 00:00:22,720 --> 00:00:25,680 Speaker 1: of deja vu. Meme. Stocks are back in the headline, 5 00:00:25,720 --> 00:00:28,200 Speaker 1: as shares of the movie theater chain a MC got 6 00:00:28,240 --> 00:00:32,000 Speaker 1: pumped to the moon, and the markets oriented geopolitical tensions 7 00:00:32,040 --> 00:00:34,720 Speaker 1: are making news again as the Biden administration looks to 8 00:00:34,800 --> 00:00:38,240 Speaker 1: potentially expand the number of Chinese companies that are blacklisted 9 00:00:38,240 --> 00:00:41,640 Speaker 1: for US investors. What should we make of all these flashbacks. 10 00:00:41,960 --> 00:00:44,120 Speaker 1: We'll get into it with the chief investment officer for 11 00:00:44,159 --> 00:00:48,800 Speaker 1: a hedge fund firm that manages nine billion dollars. But first, 12 00:00:48,960 --> 00:00:53,440 Speaker 1: Charlie Pellett Tallusue. This week's mystery co host is. This 13 00:00:53,520 --> 00:00:57,960 Speaker 1: week's mystery co host is Claire Ballantine. Claire as a 14 00:00:58,040 --> 00:01:00,840 Speaker 1: reporter for Bloomberg in New York, but gused on e 15 00:01:01,040 --> 00:01:03,920 Speaker 1: t f s. She hails from the same town in 16 00:01:04,040 --> 00:01:08,440 Speaker 1: Tennessee as Dolly Parton. She's licensed to marry couples in 17 00:01:08,480 --> 00:01:15,600 Speaker 1: New York, and she has a collection of alpaca paraphernalia. Claire, 18 00:01:15,640 --> 00:01:19,560 Speaker 1: there's lots unpacked in that introduction that Charlie Pellet introduction 19 00:01:19,680 --> 00:01:22,080 Speaker 1: of you. Mainly I wanted to get Charlie Pellett to 20 00:01:22,120 --> 00:01:25,000 Speaker 1: say the words I'll pack up paraphernalia. I don't think 21 00:01:25,040 --> 00:01:27,080 Speaker 1: I could say that five times best. But you gotta 22 00:01:27,080 --> 00:01:30,600 Speaker 1: explain how does one collect Well, first of all, what 23 00:01:30,680 --> 00:01:33,720 Speaker 1: the heck is alpaca paraphernalia? And how does one become 24 00:01:33,720 --> 00:01:36,200 Speaker 1: a collector? And what's the market like? Is it? Is 25 00:01:36,240 --> 00:01:38,520 Speaker 1: it a hot market right now? What are prices going 26 00:01:38,560 --> 00:01:41,440 Speaker 1: for in the I'll pack a paraphernalia market? You know, 27 00:01:41,520 --> 00:01:43,520 Speaker 1: I've been doing it for so long that I can't 28 00:01:43,560 --> 00:01:47,880 Speaker 1: even remember the origin of it. Um. It just sort 29 00:01:47,880 --> 00:01:51,000 Speaker 1: of became a thing. And then what happens is when 30 00:01:51,000 --> 00:01:54,800 Speaker 1: you have a thing, people always get you stuff like 31 00:01:54,880 --> 00:01:58,520 Speaker 1: that for your birthday or for Christmas. So even long 32 00:01:58,640 --> 00:02:01,080 Speaker 1: past when this would have died down, eventually it just 33 00:02:01,160 --> 00:02:05,360 Speaker 1: kept going because people kept giving me towels and mugs 34 00:02:05,400 --> 00:02:09,799 Speaker 1: and rugs. And suddenly my apartment is overtaken by alpacas. 35 00:02:10,400 --> 00:02:13,440 Speaker 1: That's hilarious. That's hilarious. Is that? Have you ever owned 36 00:02:13,440 --> 00:02:16,800 Speaker 1: an actual alpaca? Or no? No, I want to. I 37 00:02:16,840 --> 00:02:21,240 Speaker 1: want to get a standard poodle, the dog because I 38 00:02:21,240 --> 00:02:23,200 Speaker 1: think it looks a bit like an alpaca, but you 39 00:02:23,200 --> 00:02:25,480 Speaker 1: can walk it on the street without getting weird looks. 40 00:02:27,800 --> 00:02:29,440 Speaker 1: All right. I don't know if you'd got a weird 41 00:02:29,480 --> 00:02:31,080 Speaker 1: luck with an alpaca. I don't know. There's only one 42 00:02:31,080 --> 00:02:33,320 Speaker 1: way to find out. We'll have to test that thesis 43 00:02:33,360 --> 00:02:36,200 Speaker 1: sometimes we should. I did one time see a guy 44 00:02:36,320 --> 00:02:40,680 Speaker 1: in the East village walking a pig. So anything in 45 00:02:40,680 --> 00:02:44,360 Speaker 1: New York goes, that's true, that's true. All right, Well 46 00:02:44,480 --> 00:02:46,079 Speaker 1: do you think goes? On this show? And we're very 47 00:02:46,120 --> 00:02:49,520 Speaker 1: lucky this week to have a really interesting guest someone 48 00:02:49,520 --> 00:02:51,880 Speaker 1: I've read a lot about over the years. Uh. He 49 00:02:52,120 --> 00:02:55,639 Speaker 1: is the chief investment officer at UBS O'Connor, which is 50 00:02:55,720 --> 00:02:59,399 Speaker 1: the hedge fund division at UBS Asset Management. His name 51 00:02:59,440 --> 00:03:02,640 Speaker 1: is Kevin, So Kevin, welcome to the show. Thank you, 52 00:03:03,040 --> 00:03:06,080 Speaker 1: great to be here. Kevin. Let's start with this whole 53 00:03:06,919 --> 00:03:08,960 Speaker 1: revenge of the meme stocks that we're seeing in the 54 00:03:09,000 --> 00:03:13,680 Speaker 1: market again, AMC, particularly just going doubling on one session 55 00:03:13,760 --> 00:03:16,519 Speaker 1: during the week. I mean, for for a hedge fun 56 00:03:16,600 --> 00:03:20,200 Speaker 1: guy like yourself with a lot of assets to sort 57 00:03:20,240 --> 00:03:23,079 Speaker 1: of puts work this see, these type of things seem 58 00:03:23,320 --> 00:03:26,040 Speaker 1: like kryptonite to me, especially obviously on the short side. 59 00:03:26,040 --> 00:03:27,800 Speaker 1: I mean, we've we've heard a lot of widow maker 60 00:03:27,840 --> 00:03:30,440 Speaker 1: trades on the short side. But I'm wondering for you, 61 00:03:30,440 --> 00:03:33,359 Speaker 1: you know, are there opportunities here for the I mean, obviously, 62 00:03:33,400 --> 00:03:36,760 Speaker 1: with the volatility and these eye popping moves we've seen, 63 00:03:37,080 --> 00:03:38,440 Speaker 1: it's hard to ignore it for a guy like you. 64 00:03:38,440 --> 00:03:40,920 Speaker 1: I'm just wondering if, if there are opportunities in the space, 65 00:03:41,000 --> 00:03:43,360 Speaker 1: is there anyway we're for you to put money to 66 00:03:43,400 --> 00:03:46,960 Speaker 1: work in this type of environment? Yeah? Uh yeah, So, 67 00:03:47,000 --> 00:03:50,280 Speaker 1: I mean I tried, We tried to be about as 68 00:03:50,400 --> 00:03:54,520 Speaker 1: far from these types of situations in the market as 69 00:03:54,560 --> 00:03:57,240 Speaker 1: we possibly can. I I talked to one of our 70 00:03:57,280 --> 00:03:59,120 Speaker 1: pms this morning and I said, I'd like to be 71 00:03:59,240 --> 00:04:01,800 Speaker 1: roughly a million and miles away from this, and he's like, well, 72 00:04:01,800 --> 00:04:07,000 Speaker 1: you realize we're probably like thousand miles away because there's 73 00:04:07,000 --> 00:04:09,880 Speaker 1: correlations with these stocks and other stocks that were evolved 74 00:04:09,880 --> 00:04:13,480 Speaker 1: in so so I kind of I kind of acknowledge that. 75 00:04:14,080 --> 00:04:18,200 Speaker 1: But you know, to me, anytime you have a stock 76 00:04:18,240 --> 00:04:24,000 Speaker 1: price moves that are divorced from economic reality or corporate 77 00:04:24,040 --> 00:04:29,520 Speaker 1: finance changes, that's like a flashing warning side warning signed 78 00:04:29,520 --> 00:04:33,040 Speaker 1: to us to really be cautious around it. And you know, 79 00:04:33,040 --> 00:04:35,360 Speaker 1: I don't know if you followed some of the stats 80 00:04:35,400 --> 00:04:39,599 Speaker 1: on AMC, I'm drawn to it not dissimilar to rubber 81 00:04:39,640 --> 00:04:44,120 Speaker 1: necking an accident on the freeway. Um, but the numbers 82 00:04:44,160 --> 00:04:47,320 Speaker 1: I saw, we're just amazing. You know, we had more 83 00:04:47,800 --> 00:04:53,160 Speaker 1: AMC volume on Wednesday than we had in Tesla, in Nvidia, 84 00:04:53,400 --> 00:04:58,320 Speaker 1: Apple and Amazon combined. On one day, we had more 85 00:04:59,200 --> 00:05:03,360 Speaker 1: AMC op trading. Then we had this little index called 86 00:05:03,360 --> 00:05:07,159 Speaker 1: the SP five hundred Index options trading. So you know, 87 00:05:07,200 --> 00:05:11,480 Speaker 1: the volume is is alarming. And listen, I think there's 88 00:05:11,480 --> 00:05:16,320 Speaker 1: this temptation to just completely dismiss this type of activity 89 00:05:16,640 --> 00:05:22,440 Speaker 1: as irrational and illogical and a casino or mm stock, 90 00:05:22,560 --> 00:05:25,760 Speaker 1: and I think that's true at all, you know, I uh, 91 00:05:25,800 --> 00:05:28,600 Speaker 1: you know, to me, you really have to pay close 92 00:05:28,640 --> 00:05:31,200 Speaker 1: attention to some of these phenomenons. And for for a 93 00:05:31,240 --> 00:05:35,320 Speaker 1: long time, you know, we analyze companies, we analyze fundamental 94 00:05:35,920 --> 00:05:39,359 Speaker 1: changes at companies, we analyze what's going on the economy. 95 00:05:39,680 --> 00:05:42,240 Speaker 1: But we're we're we're honest, and we're saying, you know, 96 00:05:42,320 --> 00:05:47,479 Speaker 1: sometimes price performance securious performances a function of investors psychology 97 00:05:47,480 --> 00:05:50,880 Speaker 1: and position and positioning, and you know when you have 98 00:05:50,920 --> 00:05:54,279 Speaker 1: a situation like this, you know, you really cannot take 99 00:05:54,320 --> 00:05:59,200 Speaker 1: an aggressive stand one way or another. You can't dismiss uh, 100 00:05:59,240 --> 00:06:01,359 Speaker 1: you know, the stock moves one way or another. You 101 00:06:01,400 --> 00:06:03,600 Speaker 1: just have to be cautious and realize this has become 102 00:06:03,800 --> 00:06:07,320 Speaker 1: a purely technical event. There's a whole bunch of investors 103 00:06:07,320 --> 00:06:10,680 Speaker 1: here with different perspectives and psychologies. There's investors who are 104 00:06:10,680 --> 00:06:15,479 Speaker 1: getting free popcorn at AMC theaters. By the way, Um, 105 00:06:15,520 --> 00:06:18,440 Speaker 1: that's a motivation. So I wondered if that's subject to 106 00:06:18,480 --> 00:06:21,200 Speaker 1: the dividend tax. I don't know. You gotta gotta give 107 00:06:21,200 --> 00:06:23,400 Speaker 1: a p for some of your popcorn back to the government. 108 00:06:23,680 --> 00:06:26,120 Speaker 1: Probably is probably a slight mark up at the at 109 00:06:26,120 --> 00:06:29,719 Speaker 1: the counter. I agree with you. Well, and then while 110 00:06:29,760 --> 00:06:32,640 Speaker 1: this is all happening, I mean, are there any opportunities 111 00:06:32,680 --> 00:06:35,960 Speaker 1: that you see for you all? Or are there opportunities 112 00:06:35,960 --> 00:06:40,080 Speaker 1: that maybe are getting overlooked because everyone is so focused on, 113 00:06:40,279 --> 00:06:44,080 Speaker 1: you know, watching the meme stocks go up and down. Yeah, 114 00:06:44,120 --> 00:06:49,040 Speaker 1: so that's one of the that's my nine thousand mile analogy, 115 00:06:49,160 --> 00:06:53,400 Speaker 1: because you know, when stocks, whether it's an AMC or 116 00:06:54,520 --> 00:06:57,880 Speaker 1: bed bass in beyond, go up. Um, we see things 117 00:06:57,920 --> 00:07:01,680 Speaker 1: that go up in sympathy with that UM philosopher. For example, 118 00:07:01,839 --> 00:07:04,680 Speaker 1: if people think that A m C and Bed Bath 119 00:07:04,720 --> 00:07:07,520 Speaker 1: and Beyond are doing well, they get excited about mall 120 00:07:07,600 --> 00:07:12,560 Speaker 1: owners or strip mall operators. And the reality is the 121 00:07:12,680 --> 00:07:16,120 Speaker 1: dynamics of people going to malls and going to you know, 122 00:07:16,120 --> 00:07:19,200 Speaker 1: strip centers is not changing. It's not changing based on 123 00:07:19,520 --> 00:07:23,280 Speaker 1: overnight price action in bed Bathroom Beyond or a MC. 124 00:07:24,040 --> 00:07:26,440 Speaker 1: So we do see some of the stocks that are 125 00:07:26,480 --> 00:07:30,240 Speaker 1: related UM react and that's where we tend to look 126 00:07:30,280 --> 00:07:33,840 Speaker 1: for opportunities to take advantage of the dislocation. So, you know, 127 00:07:34,000 --> 00:07:36,640 Speaker 1: one of our core disciplines and and and this has 128 00:07:36,680 --> 00:07:38,320 Speaker 1: been you know, for as long as I've been in 129 00:07:38,360 --> 00:07:41,800 Speaker 1: the business. You have to be very mindful of how 130 00:07:41,840 --> 00:07:45,240 Speaker 1: big the short base is in any stock. I always 131 00:07:45,280 --> 00:07:49,640 Speaker 1: tell people stocks are a log normally distributed, which is, 132 00:07:49,760 --> 00:07:52,520 Speaker 1: you invest a hundred dollars UH and you can lose 133 00:07:52,560 --> 00:07:55,680 Speaker 1: a hundred dollars, but you can make ten x or 134 00:07:55,800 --> 00:07:59,120 Speaker 1: twenty extra your money. And and subsequently, you have to 135 00:07:59,160 --> 00:08:02,120 Speaker 1: be very mind full of the size and nature of 136 00:08:02,160 --> 00:08:06,280 Speaker 1: your short positions. UM and and so we're we're always 137 00:08:06,280 --> 00:08:08,040 Speaker 1: on top of that, but we're looking for things that 138 00:08:08,080 --> 00:08:11,280 Speaker 1: are one or two steps removed from these stories take 139 00:08:11,320 --> 00:08:14,840 Speaker 1: advantage of those dislocations. It always amazes me to you know, 140 00:08:14,880 --> 00:08:20,400 Speaker 1: if some stocks short interest, who's the one going in 141 00:08:20,400 --> 00:08:22,640 Speaker 1: and turn it in a fifty one or fifty that 142 00:08:22,880 --> 00:08:25,720 Speaker 1: just seems like playing with fire. You know what I 143 00:08:25,960 --> 00:08:29,880 Speaker 1: gotta tell you, I I totally agree with that. And listen, 144 00:08:29,920 --> 00:08:33,040 Speaker 1: I think I I learned this literally about two weeks 145 00:08:33,040 --> 00:08:36,679 Speaker 1: into my job when I started twenty years ago, which is, 146 00:08:36,800 --> 00:08:39,920 Speaker 1: don't short too much of anything because it can be 147 00:08:40,080 --> 00:08:42,000 Speaker 1: very technical. And so I think it's just a matter 148 00:08:42,040 --> 00:08:44,959 Speaker 1: of um of of hubrists. In a lot of cases, 149 00:08:45,000 --> 00:08:48,400 Speaker 1: people like well, listen, um, you know, the evaluation these 150 00:08:48,400 --> 00:08:50,719 Speaker 1: companies doesn't make sense. So I can be comfortable at 151 00:08:50,720 --> 00:08:53,320 Speaker 1: carrying a heat short and you know, when you have 152 00:08:53,400 --> 00:08:56,920 Speaker 1: something that can be so technical, evaluation just doesn't matter. Um. 153 00:08:57,120 --> 00:08:59,360 Speaker 1: And so we're always cautious with that. We we we 154 00:08:59,480 --> 00:09:03,240 Speaker 1: watch short interest ratios call used old fashioned. We look 155 00:09:03,240 --> 00:09:05,719 Speaker 1: at the short based relative to daily volume. We look 156 00:09:05,760 --> 00:09:08,400 Speaker 1: at the short based relative to the free flowed, and 157 00:09:08,440 --> 00:09:11,080 Speaker 1: if he gets above these you know, sort of certain metrics, 158 00:09:11,120 --> 00:09:21,760 Speaker 1: we just try to avoid them. Kevin, to move on 159 00:09:22,080 --> 00:09:25,040 Speaker 1: to something, I know you guys were involved with at 160 00:09:25,080 --> 00:09:28,640 Speaker 1: least earlier in the year, you were very bullish on China. 161 00:09:28,800 --> 00:09:30,440 Speaker 1: I think one of the funds had was something like 162 00:09:30,480 --> 00:09:36,200 Speaker 1: exposure to China. I'm wondering, you know, do the sort 163 00:09:36,200 --> 00:09:41,080 Speaker 1: of the sort of geopolitical sword rattling, the Biden blacklist 164 00:09:41,720 --> 00:09:48,479 Speaker 1: um possibly being expanded to to not just military linked firms. Um, 165 00:09:48,520 --> 00:09:50,040 Speaker 1: what do you make of all that? Is it kind 166 00:09:50,080 --> 00:09:51,560 Speaker 1: of is it kind of just that? Is it a 167 00:09:51,600 --> 00:09:54,760 Speaker 1: bit of saber rattling? Do do you see any real 168 00:09:54,840 --> 00:09:58,280 Speaker 1: risk there of of sort of a worsening relationship with 169 00:09:58,360 --> 00:10:01,800 Speaker 1: China and an outright band of more stocks for US 170 00:10:01,840 --> 00:10:07,120 Speaker 1: investors in China. Yeah, so listen, I think big picture, Uh, 171 00:10:07,400 --> 00:10:10,920 Speaker 1: there's a more constructive dialogue between the US and China happening, 172 00:10:10,960 --> 00:10:14,800 Speaker 1: happening now than under the prior administration. And even though 173 00:10:14,880 --> 00:10:19,240 Speaker 1: there's potentially a broader list of stocks that are going 174 00:10:19,320 --> 00:10:23,120 Speaker 1: to be banned, there's potentially a tightening of existing bands 175 00:10:23,240 --> 00:10:26,280 Speaker 1: and limiting bands to some of the specific subsidiaries. So, 176 00:10:26,559 --> 00:10:30,800 Speaker 1: you know, big picture, I think relations between the two 177 00:10:30,840 --> 00:10:34,320 Speaker 1: countries from a trade and cooperation perspective are going to 178 00:10:34,400 --> 00:10:37,880 Speaker 1: be improving. Um. But you know, to the extent that 179 00:10:37,880 --> 00:10:40,839 Speaker 1: that there are these bands. You know, I think this, 180 00:10:41,200 --> 00:10:43,920 Speaker 1: I think they create opportunity more than risk. You know, 181 00:10:44,000 --> 00:10:47,120 Speaker 1: I think if you're sitting here, you're sitting in the US, 182 00:10:47,200 --> 00:10:50,559 Speaker 1: you're sitting in Western Europe. You unfortunately tend to think 183 00:10:50,600 --> 00:10:54,400 Speaker 1: about this from a European or US perspective, like, you know, 184 00:10:54,480 --> 00:10:58,040 Speaker 1: the US government is going to discipline you know, the Chinese. 185 00:10:58,559 --> 00:11:03,320 Speaker 1: But the reality is, uh, there's always a corollary a 186 00:11:03,520 --> 00:11:07,240 Speaker 1: Chinese perspective on these stories that creates, you know, an 187 00:11:07,240 --> 00:11:09,920 Speaker 1: equally investable seamen. And I'll just give you an example. 188 00:11:09,960 --> 00:11:12,960 Speaker 1: So you know, under the Trump administration, there was this 189 00:11:13,280 --> 00:11:21,000 Speaker 1: real aggressive pressure on reducing higher end semiconductor equipment materials 190 00:11:21,240 --> 00:11:24,560 Speaker 1: and and telecom equipment in stocks to to to the Chinese. 191 00:11:25,160 --> 00:11:29,160 Speaker 1: UM So with the Chinese government did is react uber 192 00:11:29,240 --> 00:11:31,920 Speaker 1: rationally and said, Okay, I get this. If there's some 193 00:11:32,280 --> 00:11:34,800 Speaker 1: risk that I'm not going to be able to buy 194 00:11:35,120 --> 00:11:38,840 Speaker 1: high quality intellectual property from the US, I'm going to 195 00:11:39,000 --> 00:11:43,080 Speaker 1: build my own technology supply chain. And so while most 196 00:11:43,120 --> 00:11:46,480 Speaker 1: people sat there in and said, wow, this is this 197 00:11:46,640 --> 00:11:49,760 Speaker 1: uncertainty about US China trade and tech supply chain makes 198 00:11:49,800 --> 00:11:52,760 Speaker 1: me nervous, some of the best performing stocks in the 199 00:11:52,840 --> 00:11:58,000 Speaker 1: world were some of the domestically focused Chinese small and 200 00:11:58,080 --> 00:12:02,280 Speaker 1: MidCap technology and semiconductor stocks. So we always tell our 201 00:12:02,320 --> 00:12:05,360 Speaker 1: investors like, you know, don't use your don't look at 202 00:12:05,360 --> 00:12:08,360 Speaker 1: everything from your U S lens, uh, you know, put 203 00:12:08,360 --> 00:12:11,200 Speaker 1: on your you know, your China hat and interpret what 204 00:12:11,240 --> 00:12:13,600 Speaker 1: this local corollarya is going to be because it's going 205 00:12:13,679 --> 00:12:16,200 Speaker 1: to create an investable theme on the other side. And 206 00:12:16,240 --> 00:12:18,600 Speaker 1: how do you go about gauging that or trying to 207 00:12:18,600 --> 00:12:22,000 Speaker 1: make predictions on what international relations are going to be 208 00:12:22,080 --> 00:12:24,840 Speaker 1: like I mean, you know, talking about how this administration 209 00:12:25,360 --> 00:12:29,480 Speaker 1: seems like it will be UM have a more amenable 210 00:12:29,559 --> 00:12:32,360 Speaker 1: relationship with China, how how do you go about sort 211 00:12:32,360 --> 00:12:35,120 Speaker 1: of engauging that and then also the time horizon for 212 00:12:35,200 --> 00:12:39,880 Speaker 1: that well, and so there's a bunch of UM consultants, 213 00:12:40,240 --> 00:12:47,480 Speaker 1: there's UH political research firms, there's UH analysts, there's policy analysts. 214 00:12:48,040 --> 00:12:51,240 Speaker 1: You know, we talked to government officials as well. We 215 00:12:51,240 --> 00:12:53,120 Speaker 1: can get you know, I think a really good sense 216 00:12:53,240 --> 00:12:56,240 Speaker 1: for for the direction of travel and and and in 217 00:12:56,280 --> 00:13:01,839 Speaker 1: particular on on China where every our local presence. I mean, 218 00:13:01,880 --> 00:13:03,960 Speaker 1: you know, this is why I would I would never 219 00:13:04,040 --> 00:13:07,160 Speaker 1: think about investing, you know in Asia from sitting here 220 00:13:07,160 --> 00:13:10,160 Speaker 1: in the US. We have a team that's local that's 221 00:13:10,640 --> 00:13:13,480 Speaker 1: very plugged into what's going on in the regulatory landscape 222 00:13:13,480 --> 00:13:16,240 Speaker 1: and economic policy landscape in China, and the teams in 223 00:13:16,559 --> 00:13:20,080 Speaker 1: Hong Kong and Singapore. There's resources in Shanghai as well. 224 00:13:20,840 --> 00:13:23,319 Speaker 1: UM and you you you can get a really good 225 00:13:23,360 --> 00:13:26,600 Speaker 1: sense for what, um, what the policy agenda there is, 226 00:13:26,760 --> 00:13:29,240 Speaker 1: and and and likely that the changes that are coming. 227 00:13:29,280 --> 00:13:31,000 Speaker 1: So it's something you can you can get a pretty 228 00:13:31,000 --> 00:13:34,640 Speaker 1: good handle one, you know, Kevin. For years now, I 229 00:13:34,640 --> 00:13:37,679 Speaker 1: guess the one of the main bullish teams for China 230 00:13:37,720 --> 00:13:41,440 Speaker 1: has been sort of this transition from a manufacturing dominated 231 00:13:41,480 --> 00:13:46,640 Speaker 1: economy to potentially a more consumer dominated economy. UM. And 232 00:13:46,920 --> 00:13:50,120 Speaker 1: some of the interesting interesting developments in China this year 233 00:13:50,120 --> 00:13:54,359 Speaker 1: in late last year has been UM sort of an 234 00:13:54,400 --> 00:13:57,600 Speaker 1: attempt to tame the credit markets in China, you know, 235 00:13:57,679 --> 00:14:02,160 Speaker 1: corporate credits especially, and and prevent them from getting out 236 00:14:02,160 --> 00:14:05,080 Speaker 1: of hand, getting a little too frothy. So I'm just going, 237 00:14:05,200 --> 00:14:07,280 Speaker 1: you know, with those two things in mind and whatever 238 00:14:07,320 --> 00:14:09,200 Speaker 1: else you're looking at in China, just what are sort 239 00:14:09,200 --> 00:14:12,200 Speaker 1: of the main themes, the main kind of sectors and 240 00:14:12,320 --> 00:14:14,960 Speaker 1: is it is it equities and credit or a little both. 241 00:14:15,040 --> 00:14:18,800 Speaker 1: What kind of things are really drawing you into China. 242 00:14:19,240 --> 00:14:22,000 Speaker 1: And so one of the things that we're the makes 243 00:14:22,080 --> 00:14:25,520 Speaker 1: us the most excited about China, that that I'm you know, 244 00:14:25,680 --> 00:14:28,880 Speaker 1: puzzled because it feels like not enough people are talking 245 00:14:28,920 --> 00:14:34,400 Speaker 1: about is the aggressive market reform agenda passed by China 246 00:14:34,480 --> 00:14:36,640 Speaker 1: late last year. That's, you know, the q FE and 247 00:14:36,720 --> 00:14:39,800 Speaker 1: r q F reform. And you know, as you as 248 00:14:39,840 --> 00:14:42,760 Speaker 1: you well know, historically when we want to access the 249 00:14:42,800 --> 00:14:45,440 Speaker 1: onshore market in China, we have to trade via the 250 00:14:45,480 --> 00:14:49,480 Speaker 1: connect system in Hong Kong. But what the QF and 251 00:14:49,520 --> 00:14:51,560 Speaker 1: r q F reforms are going to allow us allow 252 00:14:51,640 --> 00:14:55,320 Speaker 1: us to do is to is to trade directly in 253 00:14:55,360 --> 00:14:59,359 Speaker 1: the onshore market with Chinese banks and broker dealers. Additionally, 254 00:15:00,120 --> 00:15:03,480 Speaker 1: is going to be a borrow market that develops in 255 00:15:03,520 --> 00:15:06,720 Speaker 1: the onshore market that's going to allow us to short 256 00:15:07,200 --> 00:15:10,920 Speaker 1: stocks in the onshore market. So, you know, against all 257 00:15:10,960 --> 00:15:16,960 Speaker 1: this anxiety about China about essentially planned economy, about trade friction, 258 00:15:17,600 --> 00:15:20,560 Speaker 1: people are missing what we see as a watershed event 259 00:15:20,960 --> 00:15:24,760 Speaker 1: of the market opening up and becoming more efficient and 260 00:15:24,800 --> 00:15:29,360 Speaker 1: more accessible to international investors and all of the same 261 00:15:29,440 --> 00:15:32,400 Speaker 1: principles that we use to invest on a long short 262 00:15:32,440 --> 00:15:37,040 Speaker 1: basis fundamentally uh in the US or in Europe, well, 263 00:15:37,120 --> 00:15:42,240 Speaker 1: they hold also in China, it's just a lot less competitive, 264 00:15:42,360 --> 00:15:46,200 Speaker 1: you know, Chinese. In the Chinese market, less than about 265 00:15:46,400 --> 00:15:48,960 Speaker 1: just about ten percent of the of the market cap 266 00:15:49,040 --> 00:15:53,400 Speaker 1: is is owned by hedge funds. The onshore market approximately 267 00:15:53,520 --> 00:15:56,480 Speaker 1: eighty percent of the volume, and the onshore market is 268 00:15:56,560 --> 00:16:00,000 Speaker 1: retail investors. Uh. And so we just have a market 269 00:16:00,000 --> 00:16:01,760 Speaker 1: it that's you know, we think going to become a 270 00:16:01,800 --> 00:16:06,000 Speaker 1: lot more efficient, a lot more conducive to relative value 271 00:16:06,040 --> 00:16:09,160 Speaker 1: investing in the market wheld. We don't think enough institutional 272 00:16:09,160 --> 00:16:12,960 Speaker 1: investors are paying close enough attention. So for us, we 273 00:16:13,040 --> 00:16:16,040 Speaker 1: we like to think of it as China transitioning from 274 00:16:16,040 --> 00:16:19,800 Speaker 1: a beta story to an alpha story, where it's gonna 275 00:16:19,840 --> 00:16:23,760 Speaker 1: matter the subsector as you pick, it's gonna matter the 276 00:16:23,920 --> 00:16:27,560 Speaker 1: management teams, the products, the sectors that you pick. It's 277 00:16:27,600 --> 00:16:30,280 Speaker 1: not just going to be China as a beta trade anymore. 278 00:16:30,360 --> 00:16:33,920 Speaker 1: And that just you know, for us, is superrational and 279 00:16:34,000 --> 00:16:38,720 Speaker 1: it's a really healthy growth in that market from you know, 280 00:16:38,760 --> 00:16:42,720 Speaker 1: from a subsector perspective, you know, where we um you know, 281 00:16:42,720 --> 00:16:47,560 Speaker 1: there's very clearly a tightening of the regulatory environment happening 282 00:16:47,560 --> 00:16:51,760 Speaker 1: in China. There's some tightening of regulation on fin techs. 283 00:16:51,760 --> 00:16:55,280 Speaker 1: There's a tightening of regulation on some of the internet 284 00:16:55,360 --> 00:17:00,360 Speaker 1: and larger media companies. Now that's having a pretty meaningful impact. 285 00:17:00,400 --> 00:17:05,080 Speaker 1: That's creating I think, big opportunities in the financial services sector. Uh. 286 00:17:05,119 --> 00:17:07,399 Speaker 1: You know, we see big opportunities and more of the 287 00:17:07,520 --> 00:17:13,639 Speaker 1: cyclical industrial and machinery and material spaces uh in China. 288 00:17:13,760 --> 00:17:16,520 Speaker 1: So it's it's kind of a rotation, not dissimilar to 289 00:17:16,520 --> 00:17:18,560 Speaker 1: the rotation we're seeing everywhere else in the world where 290 00:17:18,560 --> 00:17:21,800 Speaker 1: you're going from, you know, from tech and growth to 291 00:17:21,960 --> 00:17:25,480 Speaker 1: more value and cyclical sectors. But that's happening against a 292 00:17:25,520 --> 00:17:28,040 Speaker 1: backdrop of a market getting more efficient. You know, for us, 293 00:17:28,840 --> 00:17:31,199 Speaker 1: we see China as the biggest alpha opportunity in the 294 00:17:31,240 --> 00:17:34,159 Speaker 1: world over the next really five to seven years, and 295 00:17:34,200 --> 00:17:36,399 Speaker 1: it's mostly to do with the fact that the markets 296 00:17:36,440 --> 00:17:39,760 Speaker 1: are becoming more efficient. Is there anything that's um that's 297 00:17:39,760 --> 00:17:43,160 Speaker 1: surprised you in terms of your stance on China and 298 00:17:43,720 --> 00:17:47,479 Speaker 1: um sort of these these positions that either um this 299 00:17:47,560 --> 00:17:51,879 Speaker 1: year or even more recently that you maybe didn't expect. Yeah, well, 300 00:17:52,000 --> 00:17:54,160 Speaker 1: I mean it just uh, you know, so the feedback 301 00:17:54,200 --> 00:17:56,760 Speaker 1: that we that we get out talked to investors, UM 302 00:17:56,800 --> 00:18:00,520 Speaker 1: a lot, We talked to UM you know, obviously our 303 00:18:00,560 --> 00:18:04,560 Speaker 1: counterparties a lot. Yeah, I think people's eyes are just 304 00:18:04,600 --> 00:18:06,520 Speaker 1: off the ball here. I mean again, I think they 305 00:18:06,960 --> 00:18:10,399 Speaker 1: just have it in there head that you know, China 306 00:18:10,480 --> 00:18:13,879 Speaker 1: is highly you know, highly regulated, closed economy. There's a 307 00:18:14,000 --> 00:18:19,280 Speaker 1: very standoff dynamic between between the US and China from 308 00:18:19,280 --> 00:18:22,640 Speaker 1: a political or trade perspective. But again, it's it's not 309 00:18:22,720 --> 00:18:26,760 Speaker 1: what's happening in reality. The market is undergoing this massive 310 00:18:27,280 --> 00:18:30,840 Speaker 1: opening up, and it's to meet people are just kind 311 00:18:30,880 --> 00:18:33,520 Speaker 1: of ignoring it, and they're they're getting caught in these 312 00:18:33,560 --> 00:18:36,360 Speaker 1: headlines and they're not they're not paying close enough attention 313 00:18:36,400 --> 00:18:40,040 Speaker 1: to the reality of what's happening. And I'll, i'll, I'll 314 00:18:40,080 --> 00:18:41,760 Speaker 1: give you a stat that I think it's pretty interesting. 315 00:18:41,840 --> 00:18:47,560 Speaker 1: Right now, we estimate that you can short approximately fifty 316 00:18:47,600 --> 00:18:52,879 Speaker 1: billion dollars in aggregate of Chinese equities right now through 317 00:18:53,160 --> 00:18:58,919 Speaker 1: current inventory and the connect mechanism. If this onshore borrow 318 00:18:58,960 --> 00:19:02,000 Speaker 1: market develops as we expect, that number is going to 319 00:19:02,080 --> 00:19:04,400 Speaker 1: go up by a factor of you know, at least 320 00:19:04,520 --> 00:19:08,280 Speaker 1: five x, maybe ten x. And what that means is, 321 00:19:08,480 --> 00:19:11,359 Speaker 1: you know, China's already outstanding from a liquidity perspective. If 322 00:19:11,400 --> 00:19:13,919 Speaker 1: you get if you get that borrow market developing and 323 00:19:13,960 --> 00:19:16,080 Speaker 1: it gets more efficient, it is just going to be 324 00:19:16,119 --> 00:19:21,080 Speaker 1: a terrific place for dynamic relative value investers to deploy capital. 325 00:19:21,160 --> 00:19:23,640 Speaker 1: And and and we think we're there sooner than most, 326 00:19:23,720 --> 00:19:25,480 Speaker 1: but I think we're gonna see a lot of people 327 00:19:25,480 --> 00:19:28,840 Speaker 1: go in that direction. Yeah, it's interesting. You often read 328 00:19:28,880 --> 00:19:33,280 Speaker 1: about these sort of valuation discrepancies caused by the ontore connect. 329 00:19:33,359 --> 00:19:36,240 Speaker 1: You know, there's there's a lot of money flowing in 330 00:19:36,400 --> 00:19:39,119 Speaker 1: South and north, and you know, it causes you know, 331 00:19:39,200 --> 00:19:42,320 Speaker 1: stocks to be trading it wildly different valuations depending on 332 00:19:42,359 --> 00:19:45,760 Speaker 1: you know, where they're listed. I imagine that's a pretty 333 00:19:45,760 --> 00:19:49,240 Speaker 1: fleeting opportunity, but a big one when it happens for 334 00:19:49,240 --> 00:19:51,240 Speaker 1: for like you said, the people that are there, they're 335 00:19:51,280 --> 00:19:53,960 Speaker 1: in place ready to take advantage of it. Yeah, listen, 336 00:19:53,960 --> 00:19:56,680 Speaker 1: it's a it's a huge opportunity. Uh. You know, and 337 00:19:57,160 --> 00:20:00,960 Speaker 1: I think you have to again resist the temptation of 338 00:20:01,000 --> 00:20:05,040 Speaker 1: a lot of professional investors, you know, dismiss retail flows 339 00:20:05,080 --> 00:20:08,320 Speaker 1: at your own peril, you know. Um, we say, and 340 00:20:08,480 --> 00:20:10,440 Speaker 1: it's not just similar to the to the MEM's talks. 341 00:20:10,520 --> 00:20:15,280 Speaker 1: You know, the Chinese retail investors have a heavy momentum 342 00:20:15,359 --> 00:20:19,760 Speaker 1: quality um and you will see things overreact both directions. 343 00:20:20,320 --> 00:20:22,800 Speaker 1: You need to follow it, you need to respect it. 344 00:20:22,840 --> 00:20:25,840 Speaker 1: But it also creates a lot of dislocation and relative 345 00:20:25,920 --> 00:20:29,240 Speaker 1: value investment opportunities for for funds like US to to 346 00:20:29,280 --> 00:20:33,680 Speaker 1: capitalize on. Yeah, I have a colleague you she at Bloomberg, 347 00:20:33,720 --> 00:20:37,400 Speaker 1: who you know, follows the Chinese social media very carefully. 348 00:20:37,400 --> 00:20:40,840 Speaker 1: He said. One of the jokes going around when all 349 00:20:41,240 --> 00:20:43,479 Speaker 1: Game stop and now AMC, when all that was going on, 350 00:20:43,600 --> 00:20:47,160 Speaker 1: is that, well, here, America, you've turned into the Chinese 351 00:20:47,160 --> 00:20:51,440 Speaker 1: market now with this heavy dominance of retail participation. So 352 00:20:51,480 --> 00:20:53,639 Speaker 1: it's gonna be interesting. I think when all of a 353 00:20:53,640 --> 00:20:56,160 Speaker 1: sudden there is an opportunity to borrow a lot more 354 00:20:56,200 --> 00:20:58,680 Speaker 1: of these names. Um well, I don't know, I don't 355 00:20:58,680 --> 00:21:01,960 Speaker 1: know if Reddit is uh published in Mandarin yet or not, 356 00:21:02,040 --> 00:21:10,240 Speaker 1: but an interesting dynamic. There's undoubtedly a you know exactly, 357 00:21:10,240 --> 00:21:14,600 Speaker 1: there's undoubtedly that that sort of same chat room mentality. 358 00:21:27,840 --> 00:21:30,480 Speaker 1: I guess, just just sort of relating to that, I mean, 359 00:21:30,840 --> 00:21:33,080 Speaker 1: do you think that there are any any lessons from 360 00:21:33,200 --> 00:21:35,560 Speaker 1: that that you know can be applicable to the US 361 00:21:35,640 --> 00:21:38,720 Speaker 1: market just in terms of the of the retail presence, 362 00:21:38,720 --> 00:21:41,840 Speaker 1: what you're seeing either in the two markets or um 363 00:21:41,880 --> 00:21:45,639 Speaker 1: a need similarities or differences. You know. I mean, maybe 364 00:21:45,960 --> 00:21:48,480 Speaker 1: you can call me a little bit old fashioned, but 365 00:21:48,760 --> 00:21:51,040 Speaker 1: you know, we believe in being in being a little 366 00:21:51,040 --> 00:21:55,720 Speaker 1: bit paranoid, paranoid about you know, making sure we know 367 00:21:55,800 --> 00:21:59,200 Speaker 1: what we know, paranoid about what we don't know. UM. 368 00:21:59,280 --> 00:22:06,560 Speaker 1: And anytime you see stock prices or moves that look irrational, um, 369 00:22:06,600 --> 00:22:09,720 Speaker 1: you know, that's just something to draw your interest in. 370 00:22:09,880 --> 00:22:11,879 Speaker 1: You know, you've got to do a lot more work 371 00:22:12,080 --> 00:22:15,320 Speaker 1: again on the on the technicals, on the positioning, on 372 00:22:15,400 --> 00:22:19,320 Speaker 1: the expectation before you can become you be prepared to 373 00:22:19,359 --> 00:22:21,880 Speaker 1: come in and fade some of these moves and listen. 374 00:22:21,880 --> 00:22:26,040 Speaker 1: If I had one recommendation, you know for people, it's 375 00:22:26,320 --> 00:22:30,640 Speaker 1: to not dismiss these flows, uh, to understand what that's 376 00:22:30,680 --> 00:22:35,199 Speaker 1: telling you about MARKETR participants. What's that telling you about psychology? 377 00:22:35,400 --> 00:22:37,520 Speaker 1: And then just be humble about it and say like, Okay, 378 00:22:37,560 --> 00:22:39,520 Speaker 1: when I'm on the other side of these trades, where 379 00:22:39,560 --> 00:22:41,000 Speaker 1: I want to take the other side of these trades 380 00:22:41,040 --> 00:22:44,480 Speaker 1: because I don't think you know, a m C h 381 00:22:44,720 --> 00:22:47,000 Speaker 1: is worth its current market cap, Well, I guess what, 382 00:22:47,760 --> 00:22:50,639 Speaker 1: the people buying AMC have no opinion on its market cap. 383 00:22:50,800 --> 00:22:53,800 Speaker 1: So my assessment of coming in and looking at the 384 00:22:53,880 --> 00:22:58,040 Speaker 1: value of AMC on a market cap relative to earnings power, 385 00:22:58,160 --> 00:23:00,960 Speaker 1: which maybe is how we think it should be valued, 386 00:23:01,160 --> 00:23:03,080 Speaker 1: it's just not relevant. So you just have to have 387 00:23:03,200 --> 00:23:08,320 Speaker 1: this inherent paranoia or skepticism that there could be something 388 00:23:08,359 --> 00:23:11,439 Speaker 1: else driving stock rights performance, and then you should be 389 00:23:11,440 --> 00:23:15,720 Speaker 1: cautious about it. Kevin I was reading about I guess 390 00:23:15,720 --> 00:23:18,359 Speaker 1: it was the first half of last year. You guys 391 00:23:18,359 --> 00:23:21,760 Speaker 1: had a really strong run than during the pandemic. And 392 00:23:21,920 --> 00:23:23,719 Speaker 1: one of the things I thought was really interesting was 393 00:23:24,520 --> 00:23:27,440 Speaker 1: it sounds like he did some pear trades where you 394 00:23:27,480 --> 00:23:31,000 Speaker 1: would short the stocks of some of the companies getting 395 00:23:31,000 --> 00:23:33,520 Speaker 1: really hit hard by the pandemic, but then go along 396 00:23:33,560 --> 00:23:37,679 Speaker 1: the credit of the same companies UM. And it to me, 397 00:23:37,760 --> 00:23:40,720 Speaker 1: I mean, it makes total So I don't think I granted, 398 00:23:40,720 --> 00:23:41,920 Speaker 1: I don't think I ever would have thought of that 399 00:23:42,040 --> 00:23:44,680 Speaker 1: at the time, but it makes total sense given the 400 00:23:44,760 --> 00:23:47,560 Speaker 1: dynamics at play at the time, with the FED basically 401 00:23:47,760 --> 00:23:50,400 Speaker 1: saying it was going to backstop the credit markets. UM. 402 00:23:50,440 --> 00:23:52,960 Speaker 1: Another big story this week obviously, is is the FED 403 00:23:53,080 --> 00:23:57,640 Speaker 1: saying it's gonna sort of unwind? Uh, it's credit holdings. Um. 404 00:23:57,800 --> 00:23:59,960 Speaker 1: And it was really I think more of a psych 405 00:24:00,080 --> 00:24:03,399 Speaker 1: logical effect on the credit markets that a sort of 406 00:24:03,680 --> 00:24:06,760 Speaker 1: dollar for dollar impact from from what the FED did. 407 00:24:07,280 --> 00:24:09,439 Speaker 1: So I'm just curious, you know how you're thinking is 408 00:24:09,600 --> 00:24:13,560 Speaker 1: was that was that sort of a a a fleeting 409 00:24:13,760 --> 00:24:16,199 Speaker 1: once in a lifetime opportunity to do that type of 410 00:24:16,200 --> 00:24:20,320 Speaker 1: thing amid the pandemic we're you know, are credit markets 411 00:24:20,359 --> 00:24:22,520 Speaker 1: such that you would you would still think of doing 412 00:24:22,560 --> 00:24:26,960 Speaker 1: that type of trade? Uh in this environment a year later? Yeah, 413 00:24:27,000 --> 00:24:33,960 Speaker 1: So the opportunity in March and April of in the 414 00:24:34,040 --> 00:24:37,639 Speaker 1: U s CR credit markets was historic. Uh you know 415 00:24:37,720 --> 00:24:40,439 Speaker 1: really the only good analogy I think is the global 416 00:24:40,440 --> 00:24:45,240 Speaker 1: financial crisis. UM. And in particular, when the FED came 417 00:24:45,240 --> 00:24:48,520 Speaker 1: out and went the extra mile to say they were 418 00:24:48,520 --> 00:24:52,240 Speaker 1: going to support the high yield market, we were staring 419 00:24:52,280 --> 00:24:54,320 Speaker 1: at each other like, can you believe they just said that? 420 00:24:54,560 --> 00:24:56,679 Speaker 1: They really just say that the other world it does 421 00:24:58,240 --> 00:25:02,360 Speaker 1: exactly and and there was a time where the market 422 00:25:02,960 --> 00:25:05,840 Speaker 1: didn't react right away, and we were staring at each 423 00:25:05,880 --> 00:25:12,760 Speaker 1: other like this is a really unbelievable historic and special opportunity, 424 00:25:13,440 --> 00:25:16,800 Speaker 1: and the and the most unique thing about it is 425 00:25:16,840 --> 00:25:19,600 Speaker 1: that you know, normally you see that sort of news 426 00:25:20,240 --> 00:25:23,080 Speaker 1: and then the market squeezes squeezes up and you have 427 00:25:23,119 --> 00:25:25,280 Speaker 1: a hard time buying anything, and you're like, okay, well 428 00:25:25,320 --> 00:25:28,359 Speaker 1: I just missed it. But what happened for really the 429 00:25:28,560 --> 00:25:32,920 Speaker 1: entirety of the summer because of this economic conditions associated 430 00:25:32,960 --> 00:25:35,560 Speaker 1: with COVID were so severe. We actually had a bunch 431 00:25:35,560 --> 00:25:39,200 Speaker 1: of companies who had to come out an issue high 432 00:25:39,280 --> 00:25:42,320 Speaker 1: yield investment grade or convertible debts. So not only did 433 00:25:42,320 --> 00:25:45,480 Speaker 1: you have this dynamic where the FED was supporting the 434 00:25:45,480 --> 00:25:48,359 Speaker 1: credit markets, and listen, I was always hell people like 435 00:25:48,400 --> 00:25:52,159 Speaker 1: if you had a a wish list of things you 436 00:25:52,200 --> 00:25:54,760 Speaker 1: wanted for the holidays and you asked for their FED 437 00:25:55,080 --> 00:25:57,080 Speaker 1: they gave you all those things, and it's like, oh, 438 00:25:57,160 --> 00:25:58,720 Speaker 1: by the way, we got a new car for you 439 00:25:58,720 --> 00:26:03,119 Speaker 1: out in the driveways. So so you had everything you 440 00:26:03,119 --> 00:26:06,720 Speaker 1: could possibly have wanted. But then there was a ton 441 00:26:06,760 --> 00:26:08,800 Speaker 1: of issuance, so we could go out and buy a 442 00:26:08,840 --> 00:26:11,600 Speaker 1: lot of high yield investment grade in convertible bonds. So 443 00:26:11,680 --> 00:26:15,160 Speaker 1: not only were we able to benefit from the from 444 00:26:15,160 --> 00:26:17,400 Speaker 1: the FED, policy action, but we were able to benefit 445 00:26:17,560 --> 00:26:22,000 Speaker 1: from corporates issuing in what retrospect was incredibly cheap paper 446 00:26:22,520 --> 00:26:25,400 Speaker 1: to shore up their liquidity to operate over the COVID crisis. 447 00:26:25,440 --> 00:26:28,879 Speaker 1: So I mean, I'm trying to imagine how that particular 448 00:26:28,960 --> 00:26:36,800 Speaker 1: fact pattern repeats, and I really can't, let's hope. Yeah, 449 00:26:36,800 --> 00:26:38,280 Speaker 1: And I feel a little I feel a little bad 450 00:26:38,320 --> 00:26:40,520 Speaker 1: because it was it was, without a doubt, probably the 451 00:26:40,520 --> 00:26:44,720 Speaker 1: most compelling investing environment that I've seen in uh you know, 452 00:26:44,800 --> 00:26:47,680 Speaker 1: really it's it really only compares to the global financial 453 00:26:47,720 --> 00:26:50,600 Speaker 1: crisis in terms of the opportunity. So it's it's hard 454 00:26:50,640 --> 00:26:53,200 Speaker 1: to imagine, you know, it's it's ever like that again. 455 00:26:53,240 --> 00:26:56,040 Speaker 1: But but listen, there are and this is part of 456 00:26:56,040 --> 00:26:59,240 Speaker 1: the reason why investors like ourselves, who we invest in 457 00:26:59,280 --> 00:27:04,200 Speaker 1: equity market and credit credit markets globally all day, every day. 458 00:27:04,680 --> 00:27:07,000 Speaker 1: Uh not everybody does that, and so you can have 459 00:27:07,040 --> 00:27:12,720 Speaker 1: situations where people are looking laser focused on the equity 460 00:27:12,760 --> 00:27:16,040 Speaker 1: market or the credit market and they're missing the dynamic 461 00:27:16,720 --> 00:27:20,119 Speaker 1: um and you know, probably one of the you know, 462 00:27:20,320 --> 00:27:23,560 Speaker 1: we had some some credit positions that that really benefited 463 00:27:23,680 --> 00:27:28,160 Speaker 1: from from some of this retail participation because as these 464 00:27:28,160 --> 00:27:31,800 Speaker 1: company stocks rallied. They were able to issue equity there 465 00:27:31,960 --> 00:27:34,560 Speaker 1: to shore up their balance sheets improve their credit. So 466 00:27:34,600 --> 00:27:37,840 Speaker 1: it's just a really a perfect dynamic to be long 467 00:27:37,880 --> 00:27:41,200 Speaker 1: credit and short equity. Yeah, and I wonder you gotta 468 00:27:41,600 --> 00:27:43,520 Speaker 1: sort of be in the right position to take advantage 469 00:27:43,560 --> 00:27:45,440 Speaker 1: of it. You know, if you're if you're getting margin 470 00:27:45,520 --> 00:27:49,560 Speaker 1: calls and you're getting outflows and all that, it's some 471 00:27:49,640 --> 00:27:51,720 Speaker 1: opportunities for a lot of people. Just had to have 472 00:27:51,840 --> 00:27:54,120 Speaker 1: to skip on my imagine. Yeah, you just I mean, 473 00:27:54,480 --> 00:27:58,640 Speaker 1: our philosophy is we just, uh, we're never that confident. 474 00:27:59,440 --> 00:28:01,520 Speaker 1: So we're just ever going to go into a situation 475 00:28:01,680 --> 00:28:06,560 Speaker 1: over levered um. We're always going to keep dry powder um, 476 00:28:06,640 --> 00:28:09,560 Speaker 1: and we're always gonna we always manage our our betas 477 00:28:09,680 --> 00:28:13,679 Speaker 1: very tightly. Again, we're a relative value funds, so you know, 478 00:28:14,080 --> 00:28:16,199 Speaker 1: when there's a market draw down, we're going to be 479 00:28:16,920 --> 00:28:22,520 Speaker 1: massively outperforming you know, beta indices, and generally our investors 480 00:28:22,920 --> 00:28:25,359 Speaker 1: are going to focus on their their beta investments, so 481 00:28:25,400 --> 00:28:27,359 Speaker 1: they're they're confident that we're going to be able to 482 00:28:27,480 --> 00:28:30,679 Speaker 1: ride through those sort of events and capitalize on some 483 00:28:30,720 --> 00:28:32,800 Speaker 1: of those dislocations. So you know, when you have a 484 00:28:32,800 --> 00:28:37,160 Speaker 1: long term, stable capital base and you're prudent from maintaining 485 00:28:37,200 --> 00:28:39,360 Speaker 1: some excess margin, you can come in and take advantage 486 00:28:39,400 --> 00:28:42,960 Speaker 1: of these opportunities. So we were fortunate to do that well. 487 00:28:42,960 --> 00:28:45,560 Speaker 1: And then just seeing what happened last year, I mean, 488 00:28:45,600 --> 00:28:47,440 Speaker 1: you know, like we said, knock on wood, we're not 489 00:28:47,480 --> 00:28:50,040 Speaker 1: going to have a repeat of that. But were there 490 00:28:50,040 --> 00:28:52,880 Speaker 1: any sort of lessons from that trade or from kind 491 00:28:52,920 --> 00:28:56,280 Speaker 1: of being able to identify that early that you're going 492 00:28:56,320 --> 00:28:58,800 Speaker 1: to take into the future or even the next time 493 00:28:58,880 --> 00:29:02,840 Speaker 1: there is any market memorial or anything like that. Yeah, 494 00:29:02,880 --> 00:29:06,080 Speaker 1: So I think that one of the enduring lessons for 495 00:29:06,080 --> 00:29:10,080 Speaker 1: for us is that, um, you know, let's get our 496 00:29:10,240 --> 00:29:15,280 Speaker 1: capital to the spots that are the most attractive. You know, 497 00:29:15,320 --> 00:29:18,280 Speaker 1: I think there's one of the you know, i'll call 498 00:29:18,360 --> 00:29:21,080 Speaker 1: it a mistake, but may maybe that's an overstatement. You know, 499 00:29:21,120 --> 00:29:23,160 Speaker 1: people say, hey, I need to have some invested in 500 00:29:23,760 --> 00:29:26,040 Speaker 1: this area of the market, in that area of the market, 501 00:29:26,160 --> 00:29:28,720 Speaker 1: and and the reality is they were like, you know, yeah, 502 00:29:28,760 --> 00:29:32,400 Speaker 1: the the credit markets in the US were an enormous opportunity, 503 00:29:32,440 --> 00:29:35,200 Speaker 1: but that was just you know, frankly, one of three 504 00:29:35,480 --> 00:29:40,760 Speaker 1: enormous opportunities in um, you know, most people don't really 505 00:29:40,920 --> 00:29:44,600 Speaker 1: don't remember or or forgetting the fact that well, China 506 00:29:44,800 --> 00:29:49,120 Speaker 1: was approximately three to four months ahead of every other 507 00:29:49,320 --> 00:29:52,760 Speaker 1: economy in the world in terms of getting the covid 508 00:29:53,640 --> 00:29:57,440 Speaker 1: um you know, virus, but emerging from it. And so 509 00:29:57,680 --> 00:30:01,240 Speaker 1: in our view, one of the biggest opera tunities that 510 00:30:01,280 --> 00:30:03,840 Speaker 1: we were able to capitalize on was moving into equities 511 00:30:03,840 --> 00:30:07,280 Speaker 1: in China. In the summer of we were in remember 512 00:30:07,320 --> 00:30:11,160 Speaker 1: the summer here, we were in the throes of anxiety 513 00:30:11,200 --> 00:30:14,240 Speaker 1: in Western Europe and the US, but we were seeing 514 00:30:14,440 --> 00:30:18,560 Speaker 1: very clear indications based on travel and commerce that the 515 00:30:18,720 --> 00:30:21,640 Speaker 1: Chinese economy is starting to accelerate out of that. So 516 00:30:22,400 --> 00:30:24,600 Speaker 1: we were able to rotate and really gross up our 517 00:30:24,640 --> 00:30:28,520 Speaker 1: exposures in China and take care of that. And then 518 00:30:28,560 --> 00:30:32,240 Speaker 1: and then finally, you know, we had that election back 519 00:30:32,320 --> 00:30:37,520 Speaker 1: in November. Uh, and you know, maybe it seems obvious now, 520 00:30:37,720 --> 00:30:42,680 Speaker 1: but you know, the democratic agenda by administration democratic Congress 521 00:30:43,080 --> 00:30:47,040 Speaker 1: was going to lead to two things, uh, stimulus and 522 00:30:47,360 --> 00:30:53,200 Speaker 1: um environmentally oriented policy, right, and so that accelerated, in 523 00:30:53,200 --> 00:30:55,920 Speaker 1: our opinion, a massive opportunity to rotate and move our 524 00:30:56,000 --> 00:30:59,360 Speaker 1: capital into some of the cyclical sectors that had been 525 00:30:59,400 --> 00:31:01,680 Speaker 1: ignored a really you know a long time. I mean, 526 00:31:01,680 --> 00:31:05,760 Speaker 1: we we'd spent almost twenty years when we thought about, Hey, 527 00:31:05,800 --> 00:31:09,680 Speaker 1: interest rates are low, growth is low, We're supposed to 528 00:31:09,720 --> 00:31:12,920 Speaker 1: go buy you know, high quality growth stocks and quality stocks. 529 00:31:12,960 --> 00:31:15,720 Speaker 1: And now it's the opposite in a lot of ways. 530 00:31:15,760 --> 00:31:17,880 Speaker 1: We're starting a new economic cycle. We're supposed to own 531 00:31:17,880 --> 00:31:22,320 Speaker 1: cyclical stocks, you're supposed to own value stocks. And it 532 00:31:22,400 --> 00:31:25,840 Speaker 1: was a very clear and obvious rotation that people should 533 00:31:25,840 --> 00:31:28,600 Speaker 1: have been doing pretty much right into and after the election, 534 00:31:28,680 --> 00:31:33,040 Speaker 1: but people people lagged in that rotation. Frankly, Uh continues 535 00:31:33,080 --> 00:31:35,320 Speaker 1: to go on even even in the markets. Um, you 536 00:31:35,320 --> 00:31:39,120 Speaker 1: know here today on Thursday, Uh, Kevin. Before we get 537 00:31:39,160 --> 00:31:41,640 Speaker 1: into the crazy things, I think someone passed a law 538 00:31:41,760 --> 00:31:44,680 Speaker 1: somewhere where every interview like this has to include a 539 00:31:44,800 --> 00:31:49,720 Speaker 1: question about inflation. It's it's mandatory. I think I get 540 00:31:49,760 --> 00:31:51,320 Speaker 1: I get locked up if I don't, if I don't 541 00:31:51,320 --> 00:31:54,920 Speaker 1: touch about it. But one thing I noticed, Um, you know, 542 00:31:54,960 --> 00:31:56,800 Speaker 1: everyone and not everyone, but a lot of people keep 543 00:31:56,840 --> 00:31:59,680 Speaker 1: an eye on that city Economic Surprise Index or there's 544 00:31:59,680 --> 00:32:02,840 Speaker 1: there's other you know, firms that have ECO surprise index. 545 00:32:03,080 --> 00:32:06,440 Speaker 1: C He also has an inflation surprise index that unfortunately 546 00:32:06,440 --> 00:32:08,160 Speaker 1: it only prices once a month at the end of 547 00:32:08,200 --> 00:32:09,880 Speaker 1: the month, and I looked at it on the first 548 00:32:09,920 --> 00:32:12,640 Speaker 1: stay of June and noticed May. I mean, we all 549 00:32:12,720 --> 00:32:15,560 Speaker 1: knew inflation was hot in May, and we all knew 550 00:32:15,800 --> 00:32:20,240 Speaker 1: it was hotter than everyone expected, but that inflation Surprise 551 00:32:20,280 --> 00:32:23,160 Speaker 1: Index jumped it like doubled in May and it hit 552 00:32:23,200 --> 00:32:26,520 Speaker 1: the highest level ever, which to me I find interesting 553 00:32:26,560 --> 00:32:30,840 Speaker 1: because the ripple effects of all the CPI and pc 554 00:32:31,120 --> 00:32:34,280 Speaker 1: whatever reports we saw in May. Yeah, the market didn't 555 00:32:34,320 --> 00:32:37,160 Speaker 1: freak out too much about it, um, which to me 556 00:32:37,440 --> 00:32:40,320 Speaker 1: leads me to believe that kind of the consensus out 557 00:32:40,360 --> 00:32:42,360 Speaker 1: there is to agree with the fit that this is 558 00:32:42,360 --> 00:32:45,760 Speaker 1: all transitory, whether it be base effects or or the 559 00:32:45,800 --> 00:32:48,600 Speaker 1: supply bottlenecks we're seeing, and that we don't really have 560 00:32:48,640 --> 00:32:51,680 Speaker 1: to worry about inflation. Um. I'm just curious what your 561 00:32:51,720 --> 00:32:54,920 Speaker 1: take on it is. I mean, is there I don't 562 00:32:54,920 --> 00:32:57,600 Speaker 1: know what a single digit chance that they're wrong that 563 00:32:57,680 --> 00:33:00,360 Speaker 1: we are looking at sort of a structurally high higher 564 00:33:00,400 --> 00:33:03,360 Speaker 1: inflation rate going forward because of all the all the stimulus. 565 00:33:03,600 --> 00:33:05,720 Speaker 1: How are you thinking about it? Yeah? So, so I 566 00:33:05,760 --> 00:33:08,200 Speaker 1: think when one of the things that a lot of people, uh, 567 00:33:08,280 --> 00:33:11,280 Speaker 1: you know, forget is you know, we're getting this rush 568 00:33:11,320 --> 00:33:18,000 Speaker 1: of economic activity after several years of really lower capex 569 00:33:18,240 --> 00:33:21,800 Speaker 1: and investment on expectations that you know, growth was going 570 00:33:21,800 --> 00:33:26,200 Speaker 1: to be low forever. And so you know, whether it's 571 00:33:26,200 --> 00:33:29,520 Speaker 1: it's UM, it's industrial metals, or oil and gas, there 572 00:33:29,560 --> 00:33:33,280 Speaker 1: has been a massive you know, under investment in capex 573 00:33:33,480 --> 00:33:36,680 Speaker 1: really the past several years. And so now is the 574 00:33:36,680 --> 00:33:40,640 Speaker 1: global economy starting to restore, starting to restart. The commodity 575 00:33:40,640 --> 00:33:44,040 Speaker 1: markets are just really tight, and you know, the the 576 00:33:44,080 --> 00:33:48,320 Speaker 1: amount of of of price inflation happening just on the 577 00:33:48,400 --> 00:33:53,880 Speaker 1: raw material side is massive. UM and now there's a 578 00:33:53,880 --> 00:33:58,080 Speaker 1: ton of there's no shortage of resources in the world. Uh, 579 00:33:58,080 --> 00:34:00,520 Speaker 1: there's just a shortage of resources I can get put 580 00:34:00,520 --> 00:34:03,880 Speaker 1: into production right away. And so you know, we're definitely 581 00:34:03,920 --> 00:34:07,880 Speaker 1: in the camp that we're going to see a supply reaction. 582 00:34:07,920 --> 00:34:10,200 Speaker 1: You're gonna get a reaction out of out of OPEC, 583 00:34:10,239 --> 00:34:11,919 Speaker 1: you're gonna get a reaction on some of the metal 584 00:34:11,960 --> 00:34:14,759 Speaker 1: and mining companies, and you're going to offset some of 585 00:34:14,800 --> 00:34:17,840 Speaker 1: those short term price squeezes. But it's unclear to me 586 00:34:17,960 --> 00:34:21,399 Speaker 1: whether that's happening in the in the end second quarter, 587 00:34:21,719 --> 00:34:24,480 Speaker 1: third quarter, or fourth quarter. And so I think there's 588 00:34:24,520 --> 00:34:29,600 Speaker 1: a pretty significant probability that there's an inflation surprise, and 589 00:34:29,600 --> 00:34:31,799 Speaker 1: that it's difficult for the market on a on a 590 00:34:31,840 --> 00:34:34,000 Speaker 1: short term basis that's over the sort of the three 591 00:34:34,000 --> 00:34:37,239 Speaker 1: month horizon. But I think longer term, I think there's 592 00:34:37,280 --> 00:34:40,160 Speaker 1: generally consensus that that there's going to be a supply 593 00:34:40,520 --> 00:34:44,759 Speaker 1: response and offset some of these transitory pressures. So you know, 594 00:34:45,040 --> 00:34:48,000 Speaker 1: what we're seeing though, is uh And I agree with you, 595 00:34:48,120 --> 00:34:50,960 Speaker 1: there's you know, you have to talk about inflation every 596 00:34:51,000 --> 00:34:55,000 Speaker 1: every discussion, otherwise it's a problem. You know, there's a 597 00:34:55,239 --> 00:34:59,880 Speaker 1: there's a really I think a rational transition, transition happening 598 00:34:59,880 --> 00:35:03,080 Speaker 1: in the market right now as investors are starting to 599 00:35:03,120 --> 00:35:08,080 Speaker 1: distinguish between who is more tightly managing their cost a 600 00:35:08,080 --> 00:35:13,359 Speaker 1: good sold their inventory requirements, and so we're seeing who 601 00:35:13,400 --> 00:35:17,720 Speaker 1: has pricing power, We're seeing, you know, who's managing their 602 00:35:17,800 --> 00:35:23,360 Speaker 1: cost infrastructure better, and the market is actually distinguishing companies 603 00:35:23,400 --> 00:35:27,439 Speaker 1: and subsectors based on how they're managing the cost side 604 00:35:27,440 --> 00:35:30,200 Speaker 1: of their equations. So I actually, to us, it looks 605 00:35:30,239 --> 00:35:33,520 Speaker 1: like we've transitioned from you know, if you were ten 606 00:35:33,560 --> 00:35:39,799 Speaker 1: out of ten frenetic anxiety about inflation in March, you're 607 00:35:39,840 --> 00:35:42,440 Speaker 1: probably down to like a seven out of ten now 608 00:35:42,880 --> 00:35:45,759 Speaker 1: because people you know, I could once once people are 609 00:35:45,800 --> 00:35:47,839 Speaker 1: talking about it for a good rule of them. If 610 00:35:47,840 --> 00:35:49,640 Speaker 1: you've been hearing people talk about it for two weeks, 611 00:35:50,080 --> 00:35:54,120 Speaker 1: it's discounted um. And so for all of the handwringing 612 00:35:54,160 --> 00:35:56,880 Speaker 1: that's happened. If you guys are watching the tenure right 613 00:35:56,920 --> 00:35:59,200 Speaker 1: ten years, been at one sixty for I don't know, 614 00:35:59,280 --> 00:36:03,920 Speaker 1: three weeks now four weeks. So I think increasingly the 615 00:36:04,680 --> 00:36:08,400 Speaker 1: markets are are are discounting these short term inflationary pressures 616 00:36:08,480 --> 00:36:11,239 Speaker 1: in and are more relaxed about it. There's still going 617 00:36:11,280 --> 00:36:15,240 Speaker 1: to be some rotations and volatility, but you know, clearly 618 00:36:15,480 --> 00:36:18,120 Speaker 1: it's it's the it's the negative event in the market. 619 00:36:18,120 --> 00:36:20,520 Speaker 1: It's it's the black spawn event. There's a there's an 620 00:36:20,520 --> 00:36:24,680 Speaker 1: inflation surprise, it's the FED is behind the curve, the 621 00:36:24,719 --> 00:36:28,560 Speaker 1: e c B is behind the curve, and you know 622 00:36:28,760 --> 00:36:31,600 Speaker 1: it ends up being counterproductive to economic activity in the 623 00:36:31,680 --> 00:36:34,120 Speaker 1: back half of the year. That's that's a probability. We 624 00:36:34,120 --> 00:36:36,560 Speaker 1: think it's pretty low, but that's clearly the thing to 625 00:36:36,600 --> 00:36:38,880 Speaker 1: worry about, you know. And I keep thinking, as you 626 00:36:38,960 --> 00:36:42,719 Speaker 1: mentioned that supply side response, I just can't help but 627 00:36:42,800 --> 00:36:45,720 Speaker 1: wonder if that's going to overreact and we're talking about 628 00:36:45,800 --> 00:36:49,239 Speaker 1: transitory deflation next year, and who's prepared for that? You know, 629 00:36:49,600 --> 00:36:51,799 Speaker 1: you know what I mean, hope hopefully I'll be able 630 00:36:51,840 --> 00:36:55,520 Speaker 1: to come back and uh and uh and uh and 631 00:36:55,560 --> 00:36:57,520 Speaker 1: talk about that. I mean, listen, I think that there's again, 632 00:36:57,520 --> 00:37:00,720 Speaker 1: there's no shortager resources out there. It's just a function 633 00:37:01,120 --> 00:37:04,160 Speaker 1: of you know, really structurally lower capex for the past 634 00:37:04,200 --> 00:37:08,000 Speaker 1: couple of years. Their corporate boardrooms around the world, they're 635 00:37:08,040 --> 00:37:10,879 Speaker 1: seeing this, they're seeing the opportunity. They're looking for new 636 00:37:10,920 --> 00:37:15,240 Speaker 1: supply projects, they're bringing supply online, and it's going to offset. 637 00:37:15,280 --> 00:37:17,439 Speaker 1: It's just a question of whether it gets here soon 638 00:37:17,560 --> 00:37:21,720 Speaker 1: enough for for some people in the market. Stand clear 639 00:37:21,800 --> 00:37:25,280 Speaker 1: of the craziest things we saw in markets this week. 640 00:37:26,000 --> 00:37:28,799 Speaker 1: You know, Claire, as Kevin said, there's no shortage of 641 00:37:28,880 --> 00:37:31,600 Speaker 1: supply of resources in the world. You know, there's also 642 00:37:31,680 --> 00:37:36,680 Speaker 1: not a shortage of crazy things. I believe. I totally agree, 643 00:37:36,800 --> 00:37:38,840 Speaker 1: well supplied in that arena. So I want you to 644 00:37:38,920 --> 00:37:41,279 Speaker 1: kick us off with the craziest thing you saw this week. 645 00:37:42,120 --> 00:37:44,799 Speaker 1: So the craziest thing that I saw. We actually had 646 00:37:44,800 --> 00:37:48,480 Speaker 1: a story out this morning. It was my colleague Katie 647 00:37:48,520 --> 00:37:52,239 Speaker 1: Greifeld wrote it um and she's fantastic, But it of 648 00:37:52,280 --> 00:38:00,000 Speaker 1: course is about AMC and UM. We saw that UM 649 00:38:00,080 --> 00:38:05,880 Speaker 1: with AMC UM. It recently had a regulatory filing UM 650 00:38:05,920 --> 00:38:08,640 Speaker 1: that landed this morning, and it talked about its intention 651 00:38:08,760 --> 00:38:13,600 Speaker 1: to UM sell more than eleven million shares UM. But 652 00:38:13,719 --> 00:38:18,239 Speaker 1: it had this acknowledgement in the language UM and it 653 00:38:18,520 --> 00:38:21,279 Speaker 1: said that the stock is at the mercy of the 654 00:38:21,320 --> 00:38:25,799 Speaker 1: retail mania UM with fundamentals playing little role in determining 655 00:38:25,880 --> 00:38:29,120 Speaker 1: its valuation. UM. So just the fact that that made 656 00:38:29,120 --> 00:38:33,640 Speaker 1: its way into an official regulatory filing I thought was 657 00:38:33,640 --> 00:38:38,080 Speaker 1: was pretty crazy. Proceeds from the sale will be deposited 658 00:38:38,080 --> 00:38:43,040 Speaker 1: with Libroll Reddenbacker to pay for all that presentably it is. 659 00:38:43,120 --> 00:38:46,319 Speaker 1: I I don't think we've had any of us have seen. 660 00:38:46,400 --> 00:38:48,399 Speaker 1: I mean, I don't know. The bar for crazy things 661 00:38:48,480 --> 00:38:50,719 Speaker 1: keeps getting raised higher and higher. This this one though, 662 00:38:50,840 --> 00:38:54,359 Speaker 1: was it's pretty good. I don't know. I don't want 663 00:38:54,360 --> 00:38:56,600 Speaker 1: to knock on wood people listening with headphones at home. 664 00:38:56,640 --> 00:38:58,720 Speaker 1: That might get a pop in here, but knock on wood. 665 00:38:58,480 --> 00:39:01,680 Speaker 1: We don't get any crazier than that. But Kevin, how 666 00:39:01,680 --> 00:39:04,319 Speaker 1: about you? You see anything crazy this week? Well? I mean, 667 00:39:04,360 --> 00:39:06,240 Speaker 1: am I going to get in trouble if I kind 668 00:39:06,239 --> 00:39:08,680 Speaker 1: of copy Claire on this one, not at all, not 669 00:39:08,800 --> 00:39:13,920 Speaker 1: at all, So so I, um, I saw something and 670 00:39:13,960 --> 00:39:16,360 Speaker 1: it was a MC, but it was an AMC nuance 671 00:39:16,600 --> 00:39:19,879 Speaker 1: that I think is interesting here. I I came in 672 00:39:19,960 --> 00:39:23,080 Speaker 1: after the long weekend stupor that we all were in 673 00:39:23,280 --> 00:39:28,000 Speaker 1: on Tuesday morning and saw that AMC had issued stock 674 00:39:28,360 --> 00:39:33,799 Speaker 1: to a single investor. Um. And call me old fashioned, 675 00:39:33,880 --> 00:39:38,240 Speaker 1: I'm used to company's issuing stock at a discount until 676 00:39:38,280 --> 00:39:43,399 Speaker 1: last sale, and I saw that they issued stock at 677 00:39:43,520 --> 00:39:46,920 Speaker 1: a premium to last sale to a single investor about 678 00:39:47,040 --> 00:39:49,279 Speaker 1: h I think it was about a four or five 679 00:39:49,320 --> 00:39:53,680 Speaker 1: percent premium um, which and then I saw the stock 680 00:39:53,760 --> 00:39:58,879 Speaker 1: promptly rally um massively past that. And then that same 681 00:39:58,960 --> 00:40:02,520 Speaker 1: investor came out in the afternoon and said he thought 682 00:40:02,520 --> 00:40:07,160 Speaker 1: the stock was wildly overvalued. So we had this weird 683 00:40:07,600 --> 00:40:10,759 Speaker 1: dynamic where a company issue stock at a premium to 684 00:40:10,840 --> 00:40:15,759 Speaker 1: a single investor, that investor obviously sells it in the 685 00:40:15,800 --> 00:40:19,319 Speaker 1: market that day, presumably, and then and then tells people 686 00:40:19,320 --> 00:40:24,080 Speaker 1: who thinks it's overvalued before it promptly doubles again the 687 00:40:24,120 --> 00:40:30,440 Speaker 1: next day. And you know, I think I've seen company's 688 00:40:30,560 --> 00:40:35,359 Speaker 1: issue stock at a premium. Uh, maybe once in my 689 00:40:36,360 --> 00:40:39,239 Speaker 1: in my career, and it's just again one of those 690 00:40:39,280 --> 00:40:43,640 Speaker 1: things where you know something's different is happening. If someone 691 00:40:43,680 --> 00:40:46,200 Speaker 1: can find the page and Graham and Dodd where this 692 00:40:46,200 --> 00:40:48,680 Speaker 1: this is all explained, I'd love to see it. But well, 693 00:40:48,680 --> 00:40:51,520 Speaker 1: and also I believe that investor was a distress debt investor, 694 00:40:51,640 --> 00:40:54,320 Speaker 1: so in a way of brilliant trade, kind of the 695 00:40:54,360 --> 00:40:56,319 Speaker 1: opposite of of your trade last year. You know, it's 696 00:40:56,360 --> 00:40:58,960 Speaker 1: go along the stock so that they can you know, 697 00:40:59,040 --> 00:41:02,400 Speaker 1: bolster the credit. I we I don't know, but I's 698 00:41:02,440 --> 00:41:04,920 Speaker 1: such a risky thing because you really didn't know. I mean, 699 00:41:05,239 --> 00:41:07,840 Speaker 1: who knows how the market would react to a secondary 700 00:41:07,920 --> 00:41:09,719 Speaker 1: like that, I guess. But they all worked out in 701 00:41:09,719 --> 00:41:12,280 Speaker 1: their favor. Yeah, well I think, I mean, he obviously 702 00:41:12,280 --> 00:41:15,000 Speaker 1: figured out. We worked out well for it. We worked 703 00:41:15,000 --> 00:41:19,279 Speaker 1: out well for him. Uh, pretty good, pretty good. The 704 00:41:19,280 --> 00:41:22,880 Speaker 1: tip of the hat to to that. Um, I'm copying 705 00:41:22,880 --> 00:41:24,440 Speaker 1: to him. I and I guess we're all in the 706 00:41:24,440 --> 00:41:26,759 Speaker 1: A m C. We're all in the theater together on this. 707 00:41:27,000 --> 00:41:28,600 Speaker 1: I gotta say I did. I did go back to 708 00:41:28,640 --> 00:41:31,840 Speaker 1: an AMC theater last weekend, Uh, and saw a movie. 709 00:41:32,400 --> 00:41:35,480 Speaker 1: We've got it. They have the big cushy leather recliners 710 00:41:35,520 --> 00:41:38,799 Speaker 1: and they bring you the food. It's it's I don't know. 711 00:41:38,840 --> 00:41:41,400 Speaker 1: Maybe there's there's a good bookcase to be made. But 712 00:41:42,719 --> 00:41:45,400 Speaker 1: to me, the the promotions that Claire, you and I 713 00:41:45,440 --> 00:41:47,640 Speaker 1: worked on this story a little bit together, the promotions 714 00:41:47,680 --> 00:41:51,960 Speaker 1: going on of AMC are our borderlining on the absurd. 715 00:41:52,080 --> 00:41:55,960 Speaker 1: You know, you're seeing people on the street corner holding 716 00:41:56,040 --> 00:41:59,799 Speaker 1: poster boards saying, you know by AMC stock. You're you're 717 00:41:59,800 --> 00:42:03,680 Speaker 1: seeing someone tweeted a video of some pool party looked 718 00:42:03,719 --> 00:42:09,880 Speaker 1: at some hotel that these these models and bikinis danced 719 00:42:09,920 --> 00:42:13,399 Speaker 1: around waiving signs that say a MC to the moon. 720 00:42:13,560 --> 00:42:16,719 Speaker 1: I can't wrap my head around this, Kevin, I don't know. 721 00:42:16,840 --> 00:42:19,560 Speaker 1: I I uh, it's all fun while last I guess 722 00:42:19,600 --> 00:42:22,320 Speaker 1: it seems like, uh, sort of a game of musical 723 00:42:22,360 --> 00:42:24,239 Speaker 1: chairs to some degree, to see who's gonna be left 724 00:42:24,239 --> 00:42:26,239 Speaker 1: holding that back. You know, by the end of this, 725 00:42:26,960 --> 00:42:31,520 Speaker 1: they'll they'll be, they'll be it'll end very badly for 726 00:42:31,520 --> 00:42:33,880 Speaker 1: people on the long and short side of there, like, 727 00:42:34,480 --> 00:42:36,360 Speaker 1: so the people are going to have issues with it, 728 00:42:36,440 --> 00:42:40,239 Speaker 1: for sure. I presumably those models got paid for their 729 00:42:40,280 --> 00:42:44,400 Speaker 1: day's work, though, so they're they're happy it's so some 730 00:42:44,400 --> 00:42:46,880 Speaker 1: some stimulats in to the economy from all this anyway, 731 00:42:47,120 --> 00:42:51,040 Speaker 1: But Claire Balantine, Kevin Russell really great to catch up 732 00:42:51,040 --> 00:42:52,879 Speaker 1: with both of you. I hope we can have you back, 733 00:42:53,280 --> 00:42:55,080 Speaker 1: both of you back on this show someday. But I 734 00:42:55,080 --> 00:42:58,720 Speaker 1: think that's all the time we have. Thanks for having me, guys, 735 00:42:58,719 --> 00:43:09,839 Speaker 1: I really enjoyed it. Thank you What Goes Up. We'll 736 00:43:09,880 --> 00:43:11,799 Speaker 1: be back next week. That's something. You can find us 737 00:43:11,840 --> 00:43:14,680 Speaker 1: on the Bloomberg Terminal website and app, or wherever you 738 00:43:14,680 --> 00:43:17,160 Speaker 1: get your podcasts. We'd love it if you took the 739 00:43:17,160 --> 00:43:19,680 Speaker 1: time to rate and review the show on Apple Podcasts 740 00:43:19,840 --> 00:43:22,600 Speaker 1: so more listeners can find us. And you can find 741 00:43:22,640 --> 00:43:26,880 Speaker 1: us on Twitter, follow me at Reaganonymous. Claire Valentine is 742 00:43:27,040 --> 00:43:32,279 Speaker 1: at CFP Underscore eighteen. You can also follow Bloomberg Podcasts 743 00:43:32,480 --> 00:43:36,120 Speaker 1: at Podcasts and Thank you to Charlie Pelletto, Bloomberg Radio 744 00:43:36,160 --> 00:43:38,600 Speaker 1: and the voice of the New York City Subway System. 745 00:43:38,600 --> 00:43:41,319 Speaker 1: What Goes Up is produced by tofur Forez. The head 746 00:43:41,320 --> 00:43:44,680 Speaker 1: of Bloomberg Podcast is Francesco Leviy. Thanks for listening. See 747 00:43:44,680 --> 00:43:45,200 Speaker 1: you next time.