WEBVTT - The Rise of the Anti-Woke ETF 0:00:06.360 --> 0:00:12.639 Welkre trillions. I'm Joel Weber and I'm Ericastreness. So Eric, 0:00:12.720 --> 0:00:15.880 I have this amazing colleague named Josh Green who's the 0:00:15.960 --> 0:00:19.800 national correspondent for Bloomberg Business Week. UM. He wrote a 0:00:19.840 --> 0:00:22.160 book about Steve Bannon and Donald Trump a couple of 0:00:22.200 --> 0:00:24.799 years ago called Devil's Bargain. He does a lot of 0:00:24.800 --> 0:00:28.360 work for Bloomberg Business Week, the magazine that I'm editor of. 0:00:28.920 --> 0:00:31.360 UH and he came to me with an idea recently 0:00:31.640 --> 0:00:34.360 that made me want to bring him on the podcast. 0:00:34.440 --> 0:00:37.159 It's in the current issue of the magazine. UM, and 0:00:37.200 --> 0:00:42.640 it's about UH an et F company called Second Vote Advisors. 0:00:42.760 --> 0:00:45.760 Have you heard of them? Uh? Yeah, I mean they 0:00:45.840 --> 0:00:48.160 I think they have two funds out. I remember the filings. 0:00:48.760 --> 0:00:51.479 But there's been a couple type companies like this, and 0:00:51.520 --> 0:00:54.920 they sometimes blend together and largely they just sort of 0:00:54.960 --> 0:00:57.440 go right to oblivion. UM. So we're not on our 0:00:57.520 --> 0:01:00.520 radar a lot, but I do it does sort of 0:01:00.600 --> 0:01:03.080 ring a bell, if you will. UM. And I think 0:01:03.080 --> 0:01:05.240 one of them's what pro life and the other ones 0:01:05.280 --> 0:01:08.240 pro gun. And there's gonna be another one that comes 0:01:08.280 --> 0:01:10.880 out next month. UM. And it was interesting about this 0:01:10.920 --> 0:01:15.360 obviously the strategy here is to appeal to UH sort 0:01:15.360 --> 0:01:19.200 of more of a right wing UH style of politics 0:01:19.640 --> 0:01:23.760 then you would probably usually see in investing. And we've 0:01:23.800 --> 0:01:26.840 actually done a version of this story on trillions a 0:01:26.840 --> 0:01:29.080 couple of years ago around them MAGA E t F 0:01:29.480 --> 0:01:33.920 that ticker. Um, how is that one faired historically? Yeah? 0:01:33.920 --> 0:01:35.680 So I remember that was with Rachel Evans, she went 0:01:35.720 --> 0:01:38.039 to Dallas. That was one of our field reports that 0:01:38.400 --> 0:01:39.679 we need to do more up. By the way, those 0:01:39.720 --> 0:01:41.560 are really great. It was like from the from the 0:01:41.600 --> 0:01:45.080 before times. Yeah. So look, the MAGA E t F 0:01:45.400 --> 0:01:47.720 hasn't done much. I mean talk about everyone. That filing 0:01:47.760 --> 0:01:49.680 hit and I tweeted out the ticker. Everybody went crazy 0:01:49.760 --> 0:01:53.560 and it obviously broke through in a marketing sense, but 0:01:53.640 --> 0:01:56.320 it didn't really gather much assets. You know why because 0:01:56.840 --> 0:02:00.000 it tends to be light tech and heavy like industrial 0:02:00.080 --> 0:02:03.440 rills and energy. UM, so for the most part, it's underperformed. 0:02:03.440 --> 0:02:06.160 That said, there was a time in the first quarter 0:02:06.280 --> 0:02:09.359 and and this year in general, where tech, especially in 0:02:09.400 --> 0:02:13.359 the Q one, really lagged and energy and industrials were 0:02:13.360 --> 0:02:16.480 coming back and those value stocks. So I actually wrote 0:02:16.520 --> 0:02:20.720 a note saying that MAGA was actually an ironically backdoor 0:02:20.800 --> 0:02:23.440 way to play the Biden presidency because that there had 0:02:23.480 --> 0:02:25.960 been a shift in the sector. So I would say 0:02:26.000 --> 0:02:29.480 that if you wanted an industrial, oily kind of play 0:02:29.520 --> 0:02:32.760 that doesn't have tech, MAGA will work in that regard. 0:02:32.840 --> 0:02:34.360 I don't know if anybody would use it for that, 0:02:34.400 --> 0:02:36.360 but it actually has this sort of other purpose in 0:02:36.400 --> 0:02:39.520 my opinion. But um, it is beating the SMP this 0:02:39.600 --> 0:02:42.880 year by a little bit, but it's been destroyed lifetime 0:02:42.919 --> 0:02:45.960 by about thirty eight percentage points, largely because it doesn't 0:02:46.000 --> 0:02:50.920 have any tech this time. On trillion, the Rise of 0:02:50.960 --> 0:02:55.760 the anti woke et F. Okay, Josh, welcome to trillions. 0:02:55.880 --> 0:03:00.160 Great to be with you. Dan Grant, what's his pitch? So? 0:03:00.240 --> 0:03:04.840 Dan Grant is uh former JP Morgan banker, conservative guy 0:03:04.960 --> 0:03:09.359 who I know through politics, who last year started up 0:03:09.480 --> 0:03:12.880 a company called Second Vote Advisors, and the idea basically 0:03:13.160 --> 0:03:18.320 is to pitch right leaning E t F products to 0:03:18.440 --> 0:03:23.040 balance out what he and his colleagues feel is a 0:03:23.160 --> 0:03:26.280 kind of galloping on Wall Street towards E S G 0:03:27.440 --> 0:03:31.799 woke liberalism. Dan thinks that this is a bad politics, 0:03:31.800 --> 0:03:35.240 but more important, bad investment, and so uh, he and 0:03:35.320 --> 0:03:38.760 his company, which has some conservative luminaries on the board 0:03:39.320 --> 0:03:41.840 are rolling out a series of e t F to 0:03:41.920 --> 0:03:47.560 try and appeal to that conservative MAGA audience. And how's 0:03:47.600 --> 0:03:52.440 it going so far? Well, it isn't an entirely new idea, 0:03:52.600 --> 0:03:54.840 you know, as you guys had said in the intro. Uh, 0:03:54.880 --> 0:03:57.680 you know there's a MAGA fund rolled out in seventeen. 0:03:58.200 --> 0:04:00.400 There was another e t F that came out I 0:04:00.400 --> 0:04:03.720 think last year, American Conservative Values Fund. So people have 0:04:03.880 --> 0:04:09.360 had the idea before of trying to sell financial products 0:04:09.480 --> 0:04:13.160 to you know, a Trump friendly MAGA crowd. And if 0:04:13.160 --> 0:04:15.760 you look at the huge inflows into et F over 0:04:15.760 --> 0:04:18.240 the last year or so, and especially you know E 0:04:18.480 --> 0:04:23.160 s G, that does seem to be an audience um 0:04:23.200 --> 0:04:25.240 of consumers who have at least a kind of a 0:04:25.279 --> 0:04:27.400 political awareness. I mean, so far it seems to be 0:04:27.480 --> 0:04:30.640 more geared toward environment and social justice and not so 0:04:30.720 --> 0:04:34.360 much right leaning stuff. But Dan's belief is that, you know, 0:04:34.360 --> 0:04:36.039 there are a lot of conservatives out there who are 0:04:36.080 --> 0:04:39.520 gonna want products that that both reflect their personal and 0:04:39.520 --> 0:04:42.240 political views and and can also turn a profit. That's 0:04:42.240 --> 0:04:44.600 the pitch. Now. Having said that, as I say in 0:04:44.640 --> 0:04:47.400 the piece, none of these funds has managed to amass 0:04:47.520 --> 0:04:50.880 more than thirty five million dollars, so they're still trying 0:04:50.880 --> 0:04:53.680 to get off the ground. And I think that that's 0:04:53.720 --> 0:04:56.560 actually like an interesting point because so much money, as 0:04:56.680 --> 0:04:59.080 Eric and I have talked about before, has gone into 0:04:59.080 --> 0:05:02.320 E S G and Eric, so when you when you 0:05:02.360 --> 0:05:04.320 think about that, because you're no fan of V S 0:05:04.360 --> 0:05:09.279 G T. By the way, I'm not generally speaking, I'm not. Um. Well, 0:05:10.080 --> 0:05:11.640 I don't care how people want to invest. I mean, 0:05:11.640 --> 0:05:13.680 if you want to invest with your values one way 0:05:13.760 --> 0:05:15.200 or the other, I don't. I mean, I don't mind. 0:05:15.240 --> 0:05:18.280 I I just think they're not practical. Um and it 0:05:18.520 --> 0:05:23.120 usually practical and and returns trump everything or cost no 0:05:23.200 --> 0:05:26.240 pun intended. Uh, not your values. I think people like 0:05:26.320 --> 0:05:29.480 to exercise their values at the polls or you know, 0:05:29.600 --> 0:05:31.760 writing or in other ways or you know, in their 0:05:31.800 --> 0:05:36.560 spare time. Um. The E S G funds. The problem 0:05:36.560 --> 0:05:38.599 I have with those is is they're they're sort of 0:05:38.600 --> 0:05:41.600 trying to dislodge Vanguard from the core of your portfolio. 0:05:42.120 --> 0:05:44.719 And no one is really going to let go of 0:05:44.720 --> 0:05:46.960 a three basis point like total market fund. It's too 0:05:46.960 --> 0:05:49.760 good a deal even if you do believe in these things. 0:05:50.000 --> 0:05:51.680 The other thing with E s G. I feel like 0:05:51.720 --> 0:05:56.280 they're selling the feeling of doing something good, like oh, 0:05:56.480 --> 0:05:58.320 we're not gonna hold energy stocks, but then they fly 0:05:58.400 --> 0:06:01.960 off on vacation, they have an SUV. I mean, honestly, 0:06:02.080 --> 0:06:08.000 I feel like it's almost um like a uh insincere 0:06:08.320 --> 0:06:11.720 form of slacktivism. And there's no evidence that will actually 0:06:11.720 --> 0:06:14.080 return better, Like their academic studies have not been able 0:06:14.120 --> 0:06:16.120 to show that E s G investing does better. But 0:06:16.560 --> 0:06:18.560 the media eats it up. They love E s G. 0:06:18.680 --> 0:06:21.760 It gets it's the most press per assets that I've 0:06:21.760 --> 0:06:24.640 ever seen in the history of etf s. And about 0:06:25.080 --> 0:06:27.680 the s G t fssets are black Rock moving the 0:06:27.760 --> 0:06:30.840 funds into their own model portfolio. So there's actually not 0:06:30.920 --> 0:06:33.160 even a lot of grassroots interest. But there is more 0:06:33.200 --> 0:06:35.799 than the right leaning stuff, I will say. But that said, 0:06:35.839 --> 0:06:37.560 I could see why if you're on the right, because 0:06:37.560 --> 0:06:39.640 I have people who aren't even political on Twitter who 0:06:39.720 --> 0:06:42.080 are a little annoyed about the E s G sort 0:06:42.120 --> 0:06:45.280 of um high hat thing going on where it's like 0:06:45.600 --> 0:06:48.640 we're doing good, we're doing great, you know, we're changing 0:06:48.640 --> 0:06:50.800 the world, and I don't know, I think a lot 0:06:50.800 --> 0:06:53.320 of people smell bullshit in it, Yeah, and I think 0:06:53.320 --> 0:06:55.320 it's I think it's part of part of the second 0:06:55.400 --> 0:07:00.560 vote Advisor's pitch is that listen, everybody says politics and 0:07:01.400 --> 0:07:03.800 investing don't mix, but but look at what's happening with 0:07:03.839 --> 0:07:06.280 the s G. You know they're there, they become slaves 0:07:06.320 --> 0:07:09.360 to this idea of of being kind of woke and 0:07:10.640 --> 0:07:14.120 foregrounding social justice, that whole kind of thing. That's not 0:07:14.160 --> 0:07:15.960 the way to go. I mean, my sense in talking 0:07:15.960 --> 0:07:18.320 to Dan Grant and the people around him is that 0:07:18.800 --> 0:07:22.800 you know, they're offended by that politically um, but also 0:07:22.880 --> 0:07:25.240 that they think that it's it's bad business. I mean, 0:07:25.280 --> 0:07:27.080 one of the things that Grant talks about a lot 0:07:27.200 --> 0:07:30.000 is that he believes in, uh, you know, Milton Friedman's 0:07:30.040 --> 0:07:33.440 famous dictum about the only job of corporations to make 0:07:33.480 --> 0:07:36.440 money for shareholders. And if you're busy, as Dan says 0:07:36.480 --> 0:07:38.640 to me in the piece donating to Black Lives Matter, 0:07:38.760 --> 0:07:41.320 they're trying to save the planet, then you're not focused 0:07:41.360 --> 0:07:43.720 on your shareholders. So uh, you know, I think the 0:07:43.800 --> 0:07:46.000 interesting question with these funds that I mean, you point 0:07:46.000 --> 0:07:50.240 out that they haven't gotten a lot of traction, is 0:07:50.240 --> 0:07:53.200 is this an investment vehicle or is it really another 0:07:53.320 --> 0:07:56.240 means of political expression, because I think part of the 0:07:56.280 --> 0:07:59.000 inherent pitch in this and one of the reasons why 0:07:59.040 --> 0:08:02.640 we're seeing so much activity around Trump and investing. Right, 0:08:02.640 --> 0:08:07.480 he's got his back. You can buy non fungible Trump tokens. 0:08:07.840 --> 0:08:09.760 We've got a bitcoin eat here. They are all sorts 0:08:09.800 --> 0:08:11.880 of ways you can kind of begin to express things. 0:08:12.400 --> 0:08:16.400 I think there's a feeling that everything in American life 0:08:16.400 --> 0:08:19.880 has become so hyper politicized. Dan Grant would say, you know, 0:08:20.000 --> 0:08:22.280 why shouldn't e tfs too, And I think it's a 0:08:22.280 --> 0:08:25.440 fair question to raise. Yeah, you know, and sports in 0:08:25.480 --> 0:08:29.320 particular and entertainment. It is unfortunate. Used to be these 0:08:29.360 --> 0:08:31.320 places you can hide out, and investing was one of 0:08:31.360 --> 0:08:34.440 those places where you can just escape the politics. Used 0:08:34.480 --> 0:08:36.800 to just be in politics. But just the way it is, 0:08:36.880 --> 0:08:41.280 I guess um, and I think to your point about E. 0:08:41.480 --> 0:08:45.720 S G. There's two ways to pitch both of these things. 0:08:45.800 --> 0:08:48.600 It's just like you can do better return wise, or 0:08:48.720 --> 0:08:52.240 you can express your values. So when I think of 0:08:52.280 --> 0:08:55.600 the expressing of the values, I think that when when 0:08:55.600 --> 0:08:58.040 people really think, deep down, do I really want to like, 0:08:58.600 --> 0:09:02.280 you know, potentially the SMP, because if you do charts. 0:09:02.840 --> 0:09:05.080 Let's say you get five pc of the SMP five 0:09:05.520 --> 0:09:09.600 seven percent every year, that's gonna end up being like 0:09:09.600 --> 0:09:14.600 like so much money difference over like ten years. You 0:09:14.640 --> 0:09:18.720 would probably hate yourself then. That said, the other side 0:09:18.720 --> 0:09:20.240 of the coin is if you go in thinking it 0:09:20.240 --> 0:09:23.240 will out perform and it doesn't, it's almost like but 0:09:23.400 --> 0:09:25.480 betting on an active manager back in the day, and 0:09:25.520 --> 0:09:28.319 it's just so difficult to outperform. And most of these 0:09:28.320 --> 0:09:31.360 funds have decent, you know, pretty high expense ratios. So 0:09:31.440 --> 0:09:33.520 to me, a lot of this is almost like just 0:09:33.640 --> 0:09:36.439 new active. Instead of hiring a tro price manager to 0:09:36.520 --> 0:09:39.480 pick stocks based on fundamentals and paying seventy five BIPs, 0:09:39.800 --> 0:09:43.000 you're hiring second vote to go and screen these companies 0:09:43.040 --> 0:09:46.800 for political vocalism, and you're paying them seventy fives. I mean, 0:09:46.960 --> 0:09:49.880 you might not perform, you might not and ultimately, though 0:09:50.160 --> 0:09:52.400 the odds are in the numbers show you will not. 0:09:53.280 --> 0:09:55.840 So Josh actually talk to us about how they decide 0:09:56.040 --> 0:09:58.880 what they put into their et s. Well, So this 0:09:58.960 --> 0:10:02.600 is this is surp risingly controversial. Um As I'm sure 0:10:02.640 --> 0:10:07.319 you guys know as as political observers, there's a lot 0:10:07.400 --> 0:10:12.040 of infighting among Republicans about who is a genuine Republican 0:10:12.120 --> 0:10:16.000 and who is a rhino a Republican a name only. Uh. 0:10:16.000 --> 0:10:19.240 And what's kind of funny about the different right leaning 0:10:19.360 --> 0:10:22.640 you know MAGA type ETFs is that each one of 0:10:22.679 --> 0:10:26.839 them has a different measuring uh stick for what constitutes 0:10:26.880 --> 0:10:30.280 an authentically conservative fund and they all differ, and they 0:10:30.360 --> 0:10:33.800 all kind of bicker with each other. So uh, Second 0:10:33.840 --> 0:10:37.400 Vote Advisors, I think probably has the most sophisticated one, 0:10:37.440 --> 0:10:40.760 although it's often difficult to understand um. The company grew 0:10:40.800 --> 0:10:43.040 out of a nonprofit that was started by a guy 0:10:43.120 --> 0:10:46.800 named David black Back in twelve, a conservative who became 0:10:46.920 --> 0:10:49.920 upset when he gave money at the supermarket's a March 0:10:49.920 --> 0:10:52.600 of dimes and then found out later on that March 0:10:52.600 --> 0:10:55.240 of Dimes, I guess gives grants to plan parenthood. That 0:10:55.320 --> 0:10:58.760 offended his values. So he started me on. I mean, 0:10:58.920 --> 0:11:01.280 we're talking like, there's the pennies that you put at 0:11:01.280 --> 0:11:04.320 the box at the ready. Yeah. Well you know, hey, 0:11:04.400 --> 0:11:06.720 you know I sent them off. We've all got our 0:11:06.720 --> 0:11:09.720 trigger points, right, And and so what he did was 0:11:09.760 --> 0:11:13.040 he took a bunch of money, independently wealthy guy and 0:11:13.080 --> 0:11:17.200 he started an outfit that rates every company in the 0:11:17.320 --> 0:11:22.000 S and P five hundred according to his proprietary scale 0:11:22.040 --> 0:11:24.600 of whether the company is liberal or conservative. And that's 0:11:24.640 --> 0:11:28.359 based on, uh, it can be you know, political donations, 0:11:28.440 --> 0:11:31.640 corporate policies, you know, whether the CEO say nice things 0:11:31.679 --> 0:11:34.440 about block Lives matter that kind of thing, Whether they 0:11:34.480 --> 0:11:37.680 give grants to outfits like Planned Parenthood to try and 0:11:37.800 --> 0:11:40.520 detect and rate like where they where they rank on 0:11:40.559 --> 0:11:43.840 a scale. And then what what what the the group 0:11:43.880 --> 0:11:46.719 does that they send by certified letter. They send their 0:11:46.720 --> 0:11:51.240 reports to the boards of all fire companies. There's no 0:11:51.240 --> 0:11:53.360 no idea if anybody ever opens these letters, but this 0:11:53.400 --> 0:11:55.480 is what they do. They go out there and you know, 0:11:55.520 --> 0:11:58.959 they've they've had these crusades against Nike for quoting here 0:11:59.040 --> 0:12:02.880 denigrating the American flag. They put out reports on Walt 0:12:02.960 --> 0:12:07.520 Disney um because the Muppet Baby's TV show they allege 0:12:07.679 --> 0:12:12.119 promotes gender confusion and youth. So these you know, hardcore 0:12:12.320 --> 0:12:15.040 kind of kind of conservatives here trying to influence conservatives, 0:12:15.080 --> 0:12:19.599 spending habits without any real evidence that it's working. But 0:12:19.800 --> 0:12:21.880 was interesting was last year they decided, hey, you know, 0:12:21.920 --> 0:12:24.880 we're going to start the second vote. Advisors we're going 0:12:24.920 --> 0:12:27.400 to try and make money doing this in the vehicle 0:12:27.480 --> 0:12:31.920 we're gonna use or these conservative ETFs. And then the 0:12:32.000 --> 0:12:34.480 way I first found them was the way they're trying 0:12:34.480 --> 0:12:37.800 to reach retail investors is, you know, they're not going 0:12:37.960 --> 0:12:40.880 so much to investment advisors who are gonna like put 0:12:40.920 --> 0:12:42.920 them in a fund that Eric would like three pip 0:12:43.120 --> 0:12:46.040 Vanguard five hundred. They're going on right wing talk radio. 0:12:46.160 --> 0:12:50.360 Dan Grant is railing against woke corporations like Nike and 0:12:50.440 --> 0:12:53.400 Coca Cola and trying to get those fired up talk 0:12:53.559 --> 0:12:56.760 radio listeners to invest some of their retirement money and 0:12:56.880 --> 0:12:59.120 a second vote E t F. And you know, last 0:12:59.200 --> 0:13:01.600 I think I checked for this piece went to press. Yeah, 0:13:01.640 --> 0:13:04.000 they were up somewhereround fifty million dollars. You know, in 0:13:04.040 --> 0:13:06.120 a year they were they were kind of gaining, not 0:13:06.240 --> 0:13:08.640 a huge fund, but not nothing. And I think the 0:13:08.760 --> 0:13:11.599 hope is, especially now that Democrats are in charge and 0:13:11.720 --> 0:13:14.320 Joe Biden as president, is that they can somehow find 0:13:14.400 --> 0:13:16.800 a way to kind of harness that Trump energy that's 0:13:16.840 --> 0:13:19.640 been so powerful and culture in other ways and get 0:13:19.720 --> 0:13:28.480 people to use it to buy their products. Josh, something 0:13:28.559 --> 0:13:32.359 interesting you said earlier is the Disney, like the Conservative 0:13:32.400 --> 0:13:35.520 ETF doesn't want Disney in there. Well, I remember we 0:13:35.600 --> 0:13:38.599 interview with the woman who's behind the Vegan e t F, 0:13:38.760 --> 0:13:41.240 which I would assume is sort of left leaning that 0:13:41.400 --> 0:13:44.160 doesn't hold Disney, and I think we asked her. I 0:13:44.200 --> 0:13:46.800 think it was something about the animals usage in the 0:13:46.880 --> 0:13:50.600 movies and maybe at the theme park. They didn't like that. Um. 0:13:50.960 --> 0:13:53.800 But it's interesting that there's probably a couple of companies 0:13:53.840 --> 0:13:55.920 that they both agree on that are good, and maybe 0:13:56.000 --> 0:13:58.120 some they both agree are bad for different reasons. And 0:13:58.200 --> 0:14:01.000 this is so very subjective, I think, but I gotta agree. 0:14:01.040 --> 0:14:03.679 I mean, you're right, it's entirely subjective. And one of 0:14:03.720 --> 0:14:06.080 the reasons these conservative funds are bickering is that they 0:14:06.160 --> 0:14:08.600 measure different ways. Right, so that how Lambert the guy 0:14:08.720 --> 0:14:11.400 runs the MAGA E t F, he measures it based 0:14:11.559 --> 0:14:14.319 very simple metric, do you give more money to Democrats 0:14:14.440 --> 0:14:17.720 or Republicans. Well, what's interesting is they disagree on specific 0:14:17.800 --> 0:14:20.880 companies and one I mentioned the piece as Goldman Sacks, 0:14:21.160 --> 0:14:26.080 And so these conservatives at Second Vote Advisors are happy 0:14:26.160 --> 0:14:29.000 to have Goldman Sachs, you know, in one of their 0:14:29.040 --> 0:14:31.400 funds because you know, it doesn't offend their right to 0:14:31.480 --> 0:14:34.400 life stuff or what have you. Whereas how Lambert calls 0:14:34.440 --> 0:14:38.280 me up, these guys are total rhinos, total fakes. Because 0:14:38.360 --> 0:14:41.400 Golden gave more money to Democrats and Republicans last cycle, 0:14:41.440 --> 0:14:44.520 how can they call themselves conservative? So you're right, it's 0:14:44.560 --> 0:14:48.000 completely arbitrary at the end of the day what gets 0:14:48.080 --> 0:14:50.800 called conservative and what goes into these funds. But but 0:14:51.000 --> 0:14:53.560 really what they're trying to do, and I think grants 0:14:53.640 --> 0:14:57.000 branding on this, is to try and capture a slice 0:14:57.040 --> 0:14:59.680 of that anti woke energy you see royal ing in 0:15:00.000 --> 0:15:04.240 servative politics and direct some of that energy toward their products. Man, 0:15:04.320 --> 0:15:06.240 it is such a yin and yang to the E. 0:15:06.400 --> 0:15:08.160 S G. Because E. S G. If you ask ten 0:15:08.200 --> 0:15:11.880 d SG analysts is tesla E s G five will 0:15:11.920 --> 0:15:14.080 say S five will say no. They'll have an argument 0:15:14.560 --> 0:15:17.640 and Amazon somethink. Amazon does great things, but then they 0:15:17.720 --> 0:15:22.119 treat their workers like crap. Uh. This subjectivity is exactly 0:15:22.440 --> 0:15:24.840 the whole thing is one big mirror, I think, and E. 0:15:25.040 --> 0:15:26.760 S G. I think, is also trying to tap into 0:15:26.760 --> 0:15:30.200 the reverse energy, which is corporations are bad, they only 0:15:30.280 --> 0:15:32.160 want to make money. These are trying to do good 0:15:32.280 --> 0:15:35.440 things and there's there's a very they're almost like the 0:15:35.560 --> 0:15:38.200 same ends. What we're trying to say that the same 0:15:38.280 --> 0:15:40.480 size of two sides of the same mirror images. Now 0:15:40.560 --> 0:15:43.280 that's that's that's exactly right. It's funny. My way of 0:15:43.360 --> 0:15:46.480 coming into this, I write mainly about politics, was the 0:15:46.680 --> 0:15:50.040 bickering among the different MAGA advisers sort of mirrors the 0:15:50.080 --> 0:15:53.400 bickering among Republican politicians about who is closer to Trump 0:15:53.480 --> 0:15:55.960 and who can show more fealty and a you know, 0:15:56.360 --> 0:15:59.440 like that's the currency in Republican politics these days. But 0:15:59.520 --> 0:16:01.680 it's funny because it really is a mirror of kind 0:16:01.680 --> 0:16:03.600 of what's going on with the s G. It all 0:16:03.680 --> 0:16:06.040 comes down to, you know, how do you how do 0:16:06.120 --> 0:16:07.840 you define what it is what you're gunning for? And 0:16:07.920 --> 0:16:10.680 everybody doesn't in the way that is you know, self serving, 0:16:11.120 --> 0:16:14.120 and everybody is going out there stabbing their rivals in 0:16:14.160 --> 0:16:16.200 the back, trying to convince you that they're the phonies, 0:16:16.320 --> 0:16:18.320 that they're the authentic ones. And it's the same thing 0:16:18.400 --> 0:16:20.960 playing out in finance that I see playing out in politics. 0:16:21.560 --> 0:16:24.720 I think that common denominator between everything we're talking about 0:16:24.760 --> 0:16:28.200 his purity. It's like there's a purity test. Remember on 0:16:28.280 --> 0:16:31.680 the Democratic primary, M Warren and Buddha Jes got into 0:16:31.760 --> 0:16:33.600 that over the purity. She was like, oh you had 0:16:34.160 --> 0:16:37.920 you had a one of those fundraisers and you all 0:16:37.960 --> 0:16:40.760 bought like forger bottles of wine with like millionaires in 0:16:40.840 --> 0:16:43.800 the cave right, Yeah, in the cave right. He's like, look, 0:16:44.320 --> 0:16:46.360 is this a purity test? Like are we gonna have 0:16:46.440 --> 0:16:47.880 to all live in the woods and like not, do 0:16:48.040 --> 0:16:49.800 you know? And so there is this sort of thing 0:16:49.880 --> 0:16:53.400 of like how pure are you in this sort of 0:16:53.520 --> 0:16:56.040 cause that you take up. And that's a problem with 0:16:56.160 --> 0:16:58.080 some of the E s G funds that are popular 0:16:58.280 --> 0:17:01.000 is they hold a lot of right cular stocks because 0:17:01.520 --> 0:17:03.520 people want to have something close to the SMP so 0:17:03.600 --> 0:17:05.280 they wanted to perform. But then you end up holding 0:17:05.280 --> 0:17:07.480 Facebook and JP Morgan and you're not pure, your fake 0:17:07.480 --> 0:17:10.119 get out of here. Yeah, okay, I gotta throw another 0:17:10.200 --> 0:17:13.080 company out here. XXN. How How did how does everybody 0:17:13.240 --> 0:17:16.600 in this uh, you know, this universe feel about Exxon Josh? 0:17:16.920 --> 0:17:19.119 I mean, look, if you're asking me, you know, uh 0:17:19.400 --> 0:17:22.400 fossil fuel hydrocarbon that that would rate as an old 0:17:22.480 --> 0:17:26.280 school conservative company and yet second vote on their on 0:17:26.359 --> 0:17:31.119 their ratings scale considers both Exxon and Chevron liberal companies. 0:17:31.359 --> 0:17:34.159 So going back again to the idea that all of 0:17:34.280 --> 0:17:37.119 this is entirely subjective. I mentioned that to a liberal 0:17:37.280 --> 0:17:40.120 friend who works on climate and like his head exploded. 0:17:40.200 --> 0:17:43.000 He's like, wait, what you know? You know the idea 0:17:43.080 --> 0:17:46.200 that Wall Street is this bastion of of out of 0:17:46.240 --> 0:17:51.199 control rampant liberalism driven by hippie companies like Exxon Mobile, 0:17:51.400 --> 0:17:53.239 Like just didn't didn't compute with him. I don't think 0:17:53.280 --> 0:17:55.880 we compete with a lot of people. By the way, Um, 0:17:56.240 --> 0:17:58.760 why does life hold black Rock? I mean Black Rocks 0:17:58.800 --> 0:18:01.760 like the biggest pusher of yes she funds there is. 0:18:02.359 --> 0:18:07.080 I think the answer is because, um, they apparently don't 0:18:07.359 --> 0:18:12.480 violate the social screen on abortion or or or right 0:18:12.560 --> 0:18:16.480 to life that second Vote Advisors is applying on that fund. 0:18:16.680 --> 0:18:20.200 I mean, Dan was was Dan Grant was a little 0:18:20.240 --> 0:18:21.920 defensive when I pointed set this out, but he said, 0:18:21.960 --> 0:18:24.879 I think, in fairness, look like for this fund, we 0:18:24.960 --> 0:18:28.600 apply this screen, and if companies make it through that screen, 0:18:28.680 --> 0:18:30.240 we're gonna pick the ones that we think are gonna 0:18:30.240 --> 0:18:32.159 perform best. And it may be that you know, or 0:18:32.240 --> 0:18:35.200 I guess it is that he thinks black Rock is 0:18:35.240 --> 0:18:37.800 gonna gonna do a good job and perform well, and 0:18:38.040 --> 0:18:40.560 is is kosher on the issue in this particular fund, 0:18:40.640 --> 0:18:44.000 whereas if it were like an anti climate fund ors 0:18:44.000 --> 0:18:46.400 something like that, you probably woudn't see them in there. Okay. 0:18:46.440 --> 0:18:51.119 So another interesting element here is that, especially with MAGA 0:18:51.200 --> 0:18:54.119 for instance, like the goal here was to appeal to 0:18:54.480 --> 0:18:57.240 a retail audience, and I so I suppose that sort 0:18:57.240 --> 0:19:01.840 of happened also with the Trump uh Digital World acquisition 0:19:01.920 --> 0:19:05.760 Corps back, you know, the Trump's back that happened. I mean, 0:19:05.800 --> 0:19:08.880 there's like a retail fervor for this in this kind 0:19:08.880 --> 0:19:11.359 of the age of meme stocks. But the other thing 0:19:11.440 --> 0:19:14.840 that your article goes into is that um Dan Granted 0:19:15.080 --> 0:19:17.760 and Second Vote seems to think that there might be 0:19:17.840 --> 0:19:21.520 an institutional dollar that they could attract, right, So so 0:19:21.680 --> 0:19:23.639 what's what do they see on that front? So this 0:19:23.680 --> 0:19:25.600 is a great point. I mean, as as as uh, 0:19:25.880 --> 0:19:28.959 you know, Eric has explained in the past, you need 0:19:29.040 --> 0:19:31.680 to reach a certain scale to be viable, and it's 0:19:31.760 --> 0:19:33.880 not clear you know you need you know, Grant says 0:19:33.920 --> 0:19:36.520 they're gonna need a hundred fifty dollars assets under management 0:19:36.560 --> 0:19:38.600 in order to remain of going concern. It's not at 0:19:38.600 --> 0:19:40.439 all clear that you're gonna get that through the retail 0:19:40.480 --> 0:19:43.480 investor right hasn't really worked yet with these funds, um 0:19:43.920 --> 0:19:46.960 But what what what he is eyeing at second Vote 0:19:46.960 --> 0:19:50.879 Advisors are a lot of these Republican led red state 0:19:51.160 --> 0:19:55.959 pension funds where you have politicians in these states who are, 0:19:56.119 --> 0:20:00.639 you know, adamantly anti liberal, anti woe Oak and so 0:20:00.840 --> 0:20:03.920 Grant has been traveling around the country. He met last 0:20:04.000 --> 0:20:09.280 week with Arizona's Republican treasure. He's met with pension funds, 0:20:09.280 --> 0:20:12.000 I think a state pension funds in Louisiana and Missouri, 0:20:12.840 --> 0:20:15.680 and last week he was down in Orlando talking to 0:20:15.720 --> 0:20:20.040 a gathering of state treasures, trying to basically appeal to 0:20:20.280 --> 0:20:24.440 their political beliefs and say, listen, you guys should be 0:20:24.520 --> 0:20:27.680 investing in my funds because I'm against all these anti 0:20:27.760 --> 0:20:30.399 woll companies and you're against them too. And if he 0:20:30.480 --> 0:20:33.399 were able to tap into those institutional dollars, well, that 0:20:33.480 --> 0:20:36.160 could be a real game change, I think for his company. 0:20:36.840 --> 0:20:39.879 One of the interesting things that I see in politics 0:20:40.160 --> 0:20:44.159 is I don't think that that's a crazy belief to have, 0:20:44.359 --> 0:20:47.080 right If you look at a state like Texas Governor 0:20:47.160 --> 0:20:50.399 Abbott there has gone after his past laws, you know, 0:20:50.640 --> 0:20:56.760 banning specific bank banks and bank practices because they've taken 0:20:56.840 --> 0:21:00.080 e s g stands against fossil fuels or guns. And 0:21:00.280 --> 0:21:03.560 just last week in Florida, Ron de sand As, the 0:21:03.600 --> 0:21:09.000 Republican governor, I think, uh possibly a Republican frontrunner for 0:21:09.040 --> 0:21:12.199 president or at least candidate for president, give a speech 0:21:12.240 --> 0:21:15.879 to the Florida Chamber of Commerce in which he blasted quote, 0:21:16.000 --> 0:21:19.159 the rise of woke capitalism. And he said, and I quote, 0:21:19.480 --> 0:21:22.800