WEBVTT - Nasdaq CEO Adena Friedman Talks Heightened Volatility

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>The outlook for corporates gets harder, American Airlines and Pepsi

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<v Speaker 2>joining a growing list of companies trimming or pulling forecast

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<v Speaker 2>you to trade uncertainty, NASDAK hoping to provide stability in

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<v Speaker 2>this volatile environment, and the nast next Sea. Dana Friedman

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<v Speaker 2>joined us now for more. Diana, good morning, good to

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<v Speaker 2>see you.

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<v Speaker 3>It's great to see you, great to be here.

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<v Speaker 2>Can you describe the last month for us if you can,

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<v Speaker 2>just how busy have things been described to volume, the

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<v Speaker 2>activity going through your business?

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<v Speaker 3>Well, thanks, thanks for having me.

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<v Speaker 4>First of all, we just announced earnings yesterday, so I

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<v Speaker 4>think that shows a little bit of what.

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<v Speaker 3>We've been what we've been working with.

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<v Speaker 4>We had twelve and a half percent revenue growth. We

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<v Speaker 4>had double digit growth in each of our three divisions,

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<v Speaker 4>and a couple of highlights.

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<v Speaker 3>One is within.

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<v Speaker 4>Our Capital Axis Platforms division, our index business grew twenty

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<v Speaker 4>six percent in the first.

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<v Speaker 3>Quarter because of inflows.

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<v Speaker 4>We had twenty seven billion dollars of inflows in the quarter.

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<v Speaker 4>Very strong futures volumes as well in our NAS like

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<v Speaker 4>one hundred franchise. And then we look at our Fintech

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<v Speaker 4>division that grew ten percent, and one of the highlights

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<v Speaker 4>there is our anti financial crime business grew twenty one percent,

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<v Speaker 4>and that's an important key grower for US. And then

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<v Speaker 4>within our market services division, which is our trading business,

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<v Speaker 4>that grew nineteen percent in the first quarter because of

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<v Speaker 4>record volumes in the first quarter, and we continue to

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<v Speaker 4>see those volumes persist and actually grow into April. The

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<v Speaker 4>first ten days of April, we had five of the

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<v Speaker 4>top six trading days ever in US equities, four of

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<v Speaker 4>the top six trading days ever in options, and in

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<v Speaker 4>one of the days, like we also measured message traffic

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<v Speaker 4>because that's how how many messages our systems handling during

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<v Speaker 4>a given day. On the peak day, which was April seventh,

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<v Speaker 4>we had five hundred and fifty billion messages flow through

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<v Speaker 4>our systems on that single day. So it has been

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<v Speaker 4>an incredible period of time from a trading perspective.

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<v Speaker 3>And the one thing.

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<v Speaker 4>To note, because we talked about this earlier, you know,

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<v Speaker 4>you don't get necessarily credit for this, but the fact

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<v Speaker 4>is that the plumbing within the markets, all of the

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<v Speaker 4>markets has done really, really well, hyper resilient. I think

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<v Speaker 4>we've all been able to manage this volume extraordinarily. Well,

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<v Speaker 4>we're very proud of that at NASAC, and I can

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<v Speaker 4>tell you that our markets have done quite well in

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<v Speaker 4>this period of heightened volatility.

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<v Speaker 2>We don't thank you when it goes right, but we'd

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<v Speaker 2>be very quick to criticize you when it goes wrong.

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<v Speaker 2>That's for sure. You've handled a lot of volume volatility good.

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<v Speaker 2>When does volatility become bad?

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<v Speaker 4>Well, I think the one thing to recognize is volatility

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<v Speaker 4>in short term volatility.

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<v Speaker 3>That then can resolve itself.

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<v Speaker 4>I think that's something that we've seen, frankly multiple.

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<v Speaker 3>Times over the last five years.

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<v Speaker 4>I think the concern is, of course, is if we

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<v Speaker 4>cannot have some certainty in the markets. You know, investors

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<v Speaker 4>like certainty, and right now it's a very uncertain environment,

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<v Speaker 4>so they tend to take a risk off and attitude

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<v Speaker 4>about that. And as we know, we are hoping to

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<v Speaker 4>see more companies go public this year.

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<v Speaker 3>We did have forty five.

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<v Speaker 4>IPOs in the first quarter, raising five billion dollars. One

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<v Speaker 4>little side fact also, as we had seven companies switched

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<v Speaker 4>from New York to NASACK in the first quarter, and

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<v Speaker 4>we crossed three trillion dollar threshold of companies that have

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<v Speaker 4>switched to NASAK since we starter switch program twenty years ago.

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<v Speaker 4>But I also would say though we have a lot

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<v Speaker 4>of companies that are looking to go public this year,

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<v Speaker 4>and we and right now, of course, investors are not

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<v Speaker 4>really in a mode of underwriting a lot of risks,

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<v Speaker 4>so we're seeing them take a weight and see attitude

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<v Speaker 4>in terms of how to tap the public markets and

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<v Speaker 4>when to tap the public markets this year.

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<v Speaker 5>That was a very subtle but well placed a shot

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<v Speaker 5>over at the New York's Act Exchange.

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<v Speaker 3>I'm sure that they will be listening.

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<v Speaker 5>I am curious about what that pipeline looks like now

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<v Speaker 5>and how much smaller it is now in terms of

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<v Speaker 5>IPOs than it was earlier in the year. You know,

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<v Speaker 5>there's this big question how much of deal has been

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<v Speaker 5>sort of put on hold and how much have they

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<v Speaker 5>just been scrapped altogether.

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<v Speaker 3>Do you have a sense of that. I think there

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<v Speaker 3>are more being put on hold.

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<v Speaker 4>I mean, we have not seen companies something to decide

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<v Speaker 4>they're not going to go public.

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<v Speaker 3>It's really a matter of they've gotten themselves.

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<v Speaker 4>Ready, They've gotten approval, all the approvals they need. It's

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<v Speaker 4>really now a matter of just having a weight and

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<v Speaker 4>see attitude, and they should be, you know, in terms

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<v Speaker 4>of thinking about how can they maximize value for their shareholders,

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<v Speaker 4>how can they make sure that they're entering the markets

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<v Speaker 4>in an environment that's well welcoming, and that could be

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<v Speaker 4>you could find windows and pockets of time throughout the

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<v Speaker 4>year to be able to do that, and we did,

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<v Speaker 4>as I said, still have forty five IPOs in the

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<v Speaker 4>first quarter. So it wasn't like the markets are shut.

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<v Speaker 4>It's just a matter of finding those windows of opportunity

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<v Speaker 4>within a more volatile environment.

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<v Speaker 5>Do you see companies trying to decide are having a

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<v Speaker 5>harder time deciding whether to IPO in New York or

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<v Speaker 5>in the United States and the deepest markets of the

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<v Speaker 5>world versus somewhere else base the turmoil that we've seen.

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<v Speaker 4>Well, we are really the home to global companies as

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<v Speaker 4>well as American companies. The conversations continue to be very constructive, robust,

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<v Speaker 4>they're they're very they're very interested in coming and tapping

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<v Speaker 4>the American investor and frankly the global investor base.

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<v Speaker 3>I mean the United States.

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<v Speaker 4>We are the most liquid markets in the world, We

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<v Speaker 4>have the most the most variety of investors, we have

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<v Speaker 4>the deepest pools of liquidity. I think those things are,

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<v Speaker 4>you know, constant attractions. In terms of companies who want

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<v Speaker 4>to go public again.

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<v Speaker 3>It's really more a matter of time.

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<v Speaker 4>I mean that it's more a matter of when than

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<v Speaker 4>if they want to come and tap the public markets

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<v Speaker 4>in the United States.

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<v Speaker 1>I was here during Trump's inauguration while you were speaking

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<v Speaker 1>to John and Lisa over in Davos, and you are

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<v Speaker 1>very constructive on the incoming administration when it came to

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<v Speaker 1>the excitement around IPOs, also deregulation. You're pushing for this

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<v Speaker 1>regulation overhaul. Are you seeing what you were expecting back

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<v Speaker 1>in Davos from this administration now in their first one

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<v Speaker 1>hundred days.

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<v Speaker 4>From a regulatory perspective, we are very excited about the

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<v Speaker 4>fact that we can work constructively with the regulators that

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<v Speaker 4>are coming into with the positions. With Chair Atkins coming

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<v Speaker 4>into the SEC, he has deep understanding of the markets.

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<v Speaker 4>He has a deep understanding of US capital markets and

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<v Speaker 4>also the need for companies to have a good public

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<v Speaker 4>company experience and how important that is in terms of

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<v Speaker 4>giving citizens access to the growth of our economy. So

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<v Speaker 4>we are looking forward to engaging with him. We just

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<v Speaker 4>put out a white paper on the need for reform

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<v Speaker 4>in the regulatory landscape for public companies to have to

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<v Speaker 4>be able to have a life as a public company,

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<v Speaker 4>not have it be oh gosh moment, but more I

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<v Speaker 4>can't wait moment, And so I think that that's something that.

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<v Speaker 3>We're really looking forward to engaging.

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<v Speaker 1>Chair Atkins on how big is the tone shift from

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<v Speaker 1>the Biden administration and Gary Gensler to Chair Atkins.

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<v Speaker 4>Well, he just came into office, so we are going

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<v Speaker 4>to introduce ourselves to him. We actually do know him

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<v Speaker 4>from when he was a commissioner many years ago, but

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<v Speaker 4>reintroduce ourselves to him, and we'll look forward to engaging

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<v Speaker 4>with him as he gets going.

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<v Speaker 3>In his new seat.

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<v Speaker 2>You've been through a lot of different market right, James,

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<v Speaker 2>How would you describe this one? How unique is it?

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<v Speaker 3>Well, you know, it's funny.

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<v Speaker 4>I have actually been part of many, many market events.

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<v Speaker 3>I've been at NASSAC started a Nazek.

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<v Speaker 4>Thirty two years ago, so I've seen a lot and

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<v Speaker 4>this is every single one of them is different. I

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<v Speaker 4>have to say, there's no two situations where you see

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<v Speaker 4>a lot of volatility that are exactly the same in

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<v Speaker 4>terms of the causes of volatility. What we've seen in

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<v Speaker 4>terms of the reactions from investors is pretty consistent. You know,

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<v Speaker 4>when they know the thing, as I mentioned before, is

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<v Speaker 4>that they the thing that they like the least is uncertainty.

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<v Speaker 4>And in any period of time where you suddenly have

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<v Speaker 4>a big moment of uncertainty, they take the same attitude,

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<v Speaker 4>which is a risk off attitude. I'm going to take

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<v Speaker 4>take someone positions out of the market. I'm going to

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<v Speaker 4>sit and wait and understand what's happening, and then I'm

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<v Speaker 4>going to re engage in.

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<v Speaker 3>A smart way.

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<v Speaker 4>That's a very consistent reaction, but the causes of every

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<v Speaker 4>single period of market relativity have been different.

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<v Speaker 3>Actually over the last thirty two years.

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<v Speaker 2>Sunny fils unique this moment, that's for sure. Danta, thanks

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<v Speaker 2>for dropping by, Thanks you for the time, Thanks for.

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<v Speaker 3>Being with us.

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<v Speaker 2>A data freightman.

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<v Speaker 3>There.

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<v Speaker 2>The chair and CEO of Nasdaq