Bob Elliott: Uncensored, Unlimited & "Nonconsensus"
Summary
Investment Strategy: Bob Elliott, co-founder of Unlimited, discusses using machine learning to create low-cost index replications of hedge fund strategies, aiming to offer more accessible and efficient investment options.
Market Insights: Elliott highlights the current macroeconomic environment, focusing on the Federal Reserve's policy stance and the potential for stagflation, emphasizing the importance of understanding core economic indicators like unemployment and core PCE.
Global Economic Perspectives: The discussion covers global central banks, including the Bank of Japan's economic challenges, the Bank of England's stagflation issues, and China's reliance on export-led growth amid domestic economic constraints.
Commodity and Currency Analysis: Elliott provides insights into the oil market's range-bound dynamics and the strategic role of gold as a hedge against fiat currency devaluation, particularly in the context of China's economic policies.
Cryptocurrency Evaluation: Bitcoin is analyzed as a risky asset rather than a contracurrency, with Elliott cautioning against overestimating its diversification benefits in investment portfolios.
Private Credit and Investment Products: Elliott critiques the private credit market for its high fees and complexity, advocating for more transparent and cost-effective investment vehicles like ETFs that offer similar returns.
Unlimited's Approach: Elliott explains Unlimited's strategy of using proprietary technology to replicate hedge fund strategies, offering investors diversified, low-cost, and tax-efficient access to alternative investments.
Future Outlook: The conversation touches on potential future economic scenarios, including the implications of monetary easing and the strategic positioning of bonds and gold in anticipation of central bank actions.
Transcript
In this episode of On the Tape, I welcome Bob Elliot, co-founder, CEO, and CIO of Unlimited, which offers a suite of ETFs using machine learning to create lowcost index replications of 2 and 20 style alternative investments. Bob has decades of investment experience, and prior to launching Unlimited, he served as the head of Ray Dalio's investment research team at Bridgewwater. Between Bob's Substack newsletter called Non- Consensus, his appearances on CNBC and Bloomberg and his Finn Twit prowess on X, Bob is never shy to share his views on the markets. Well, we have him on the pod today and get his thoughts on the markets and much more. So, enjoy this episode of On the Tape. Bob, thanks for coming in. >> Thanks so much for having me. >> All right. So, you were on the OG on the tape back in June 2023, shortly after the Civ debacle. We're going to talk about that and some other macro stuff which we've talked about and you talk about a lot actually. Fed and Treasury once again came to the rescue on that obviously. But let's start with this because your background is fascinating obviously coming out of Harvard Bachelor of Science and you still kind of apply that. I see you tweet some things out um about advances in biotech and things like that. But just as importantly um you were on Ray Dalio's investment team. You actually led I think his investment team at Bridgewwater for years. So incredible place to be for a long period of time. So let's start with that. That's kind of, you know, planted the seed, I think, for where you are today. >> Yeah. I mean, my my time at Bridgewater, almost 15 years, was really it was a great place to start a career in investing and in particular in thinking about and developing a set of skills around both macro and systematic investing. And they're obviously related, but they don't necessarily have to be related. And so I I got a front row seat in some of the uh the most interesting uh dynamics of our of our careers. uh very close to the 2008 crisis and how policy makers uh handled that. Um along with uh the European debt crisis uh the Chinese uh challenges in the mid2010s and then you know all the way to a renewed tightening in 2018. So it was really a whole wide range of different macro environments. Um and uh so it was it was a great place to start and I you know proud of what I was able to build there in terms of uh the strategies for their uh for their pure alpha strategy. Um and uh you know was excited uh to then move on and start uh essentially challenging the industry with what I'm doing now. >> But coming out of Harvard did you think you were going to get into business? I mean how did you land was there any time between when you graduated Harvard and Bridgewwater and what did you do in between that? No, it was my first job out of school and and um kind of connects to what you were talking about before. I actually in college was very focused on public health related issues particularly around the international HIV and AIDS epidemic at the time uh and helping build a grassroots constituency uh to pass PEPFAR uh which was Bush's uh global AIDS program and um and you know that sort of over time increasingly recognized that you know macroeconomic dynamics and economic dynamics are important and critical drivers of public health. Uh, and so that got me interested in macro. Um, and uh, I thought I'd go to Bridgewater. Basically, they'd pay me to get a masters in macro. Yeah. Pay me pretty well to do it. And I thought I'd go on and do something else. Uh, but, you know, I really fell in love with macro in the markets. And, >> uh, I guess it's, you know, 20 plus years and I'm still doing it. >> We're going to get into what you're doing today, but I just want to go over some highlights that went on because I found it fascinating. I saw an interview with you where and I think I read this before where you met with Tim Gener who was running the New York Fed at the time in 2007 and told him what the bank's exposure now we were in total agreement with you but we were actually a financial services firm. Where did you learn that within Bridgewwater? Was that something you undertook yourself? Is that part of your team process that dug that up? Because you were early to the crisis I should say. >> Yeah. Yeah. I mean it it it started actually uh when Ry turned to me about 6 months before that meeting and said uh this housing situation a big deal or a small deal and I was a couple years out of school and had to very quickly uh develop an understanding of uh the banks, their exposure, the assets, the likely losses and the consequences of that. uh and uh you know with a it was a it was a real sprint. Um but it was uh it was it was a great time and fortunately my answer was it was a big deal. Uh and that kicked off a lot of very interesting conversations. I mean it was very interesting both seeing and managing through that dynam through the the financial crisis both as an asset manager and how you manage money through that but then also spending a fair amount of time working directly with the white house with the the Fed uh with the Treasury and others uh congress congressional folks as well on how to actually develop the policy to navigate through it. Um and uh and that Gitener meeting was a particularly interesting one cuz of course whenever you go and have lunch uh at at the Fed, they the the officers don't tell you anything, right? As they should, you know, they shouldn't tell you anything. Uh but you know, I had my my big sheet of paper out with all the financial institutions in the country going on across this side and all the losses, the assets and the losses that they would undertake. And I said, you know, um, uh, you know, President Gener, the, um, uh, basically every financial institution in America is broke. And he just turned white. >> Yeah. >> Uh, because he had lived through a lot of crises before. I mean, he was right front and center. If you read his biography, it's actually a good biography. Right in front and center in the Asian financial crisis. Seems to have found himself in every crisis possible. Um and uh you know he asked a lot of specific questions about how we knew but it became pretty clear that that was both a compelling description of what was going on and also a bit of a shocking description cuz very few people at that time would have an honest conversation about how bad it was going to be. I know you signed an NDA you can never talk about Bridgewwater's trades but was Bridgewwater directly involved in trading against those not against the banks per se because it was a large macro fund but do you have trades on that expressed that type of viewpoint? Well, Bridgewwater trade 120 plus markets and so the impact of that understanding got it influenced a wide range of different positions and Bridgewwater did very well in 2008 in contrast to >> um you know much of what the what happened to the rest of the industry and I think in part it was because we had spent the time really deeply understanding the financial system uh and who was going to be on the hook uh and it was it was um and then to be honest then seeing and understanding how this could get resolved. D and seeing the upswing that happened in in 2009, which was a bit of a surprise to a lot of folks who hadn't necessarily studied things like quantitative easing, uh things that today seem commonplace to understand and at the time were totally revolutionary. >> Yeah, very much. So, let's get into the macro. Um you're a serial tweeter Xer. Um you write non-consensus on Substack, right? So, you're out there. Um you're on Bloomberg, CNBC a lot, so your your your views are well known, but there's a lot going on right now in the macro. There's no shortage of stuff to talk about here. So, let's start with what's right in front of us, which is the Fed and Jackson Hole and what your thoughts are on how the Federal Reserve is doing, what they should be doing. And I think you and I have very similar views that were somewhat looking at stagflation here in the face. And what are we going to do about it? >> It's rare where the market is uh is as confident in a direction of policy where uh the underlying data doesn't necessarily align with that. And that's I I think what we're seeing today is that um while it's easy to get sort of hung up in any particular jobs report and things like that, you know, the Fed basically looks at two things in terms of its core decision-making criteria, the unemployment rate and core PCE. The unemployment rate has basically been flat at these rates at this level of interest rates uh for the last year. And if you look at core PCE, it is still above the Fed's mandate and is likely rising here uh as the various tariff effects start to flow through. And so uh that combination of things would typically lead to neutral policy meaning on hold at a time when essentially uh there's I mean two and a half cuts priced in through the end of the year. And so Jackson Hole I think represents an interesting moment because essentially never will the Fed, maybe I shouldn't say never, but it is not commonplace and has not been the case for a long time that the Fed would engage in policy that is a uh that is uh sharply inconsistent with the market pricing. And so, Chairman Powell really has an interesting moment here because he, you know, not very often does he have an opportunity to to uh foreshadow what the what policy is going to be in a coming meeting uh in a speech ahead of time and Jackson Hole is that opportunity. So, it'll be interesting to see does he signal, hey, cool cool it down market. We're not going to be cutting like that. Does he just stay data driven? You know, meaning he's like, we've got more data between now and the meeting. um or or does he confirm the cuts the way that he did uh a year ago? You know, confirming that cuts were coming. It'll be a particularly uh interesting meeting. I guess every Jackson Hole meeting feels like it's interesting, but this one seems uh seems more interesting than some of the other ones we've seen lately. >> Yeah. I mean, is this and only has six meetings left. So, every meeting that goes by, it's less and less relevant. What's more relevant is who Trump is gonna, you know, appoint obviously. And there's it's like the apprentice show going on. There's 10 names now that are out there. But my fear is that I'm sure yours also is that we know that the economic data can be inconsistent for periods of time. But we also know, you can listen to what individual companies are saying. You can put the mosaic together to kind of get it. And it's clear to your point. I mean that drives me crazy is this tariff argument. Somebody's going to pay for these tariffs. Period. End of story. Are the companies going to eat them on the margin which means that companies earnings are going to come down? Probably not because it's the job of companies to make as much money as they can. or it's going to hit the consumer. And we're now seeing we we saw all the stocking ahead of the tariffs that went in place, right? We're now getting kind of a better read of where tariffs are going to sit. I don't know 15 17% whatever the numbers going to be. Now it's happening. So if Pal obviously wants to maintain Fed independence credibility obviously he's probably gonna be on my on my estimation on the side of hawkish or deemed to be hawkish because he's not going to say the September cut definite because a lot of data between the the next month it's going to come out. So what are your thoughts on that and just in general you know you want to rely on economic numbers apples to apples right and we get a lot of oranges sometimes and things change but we understand how that stuff works. I'd be concerned in the future that if the Fed loses its independence, BLS loses, you know, it's kind of its if you want to call it independence, whatever you want to call it. I don't know. That's a scary situation to me in terms of how economists and how investors are going to have to play the game. >> Yeah. Oh, I from my perspective, I like to go back to the dot plot because the dot plot's very valuable in not because of there the Fed's any good at predicting because the governors are uh as good at predicting as sure throwing darts at a dart board. >> But what that it is helpful in understanding is the reaction function. Meaning if we see a certain set of data, what is the likely set of policies that are like that are going to come? And so what you see see there in the in the um in the June dots is you know the median expectation is for the unemployment rate to go to four and a half and for inflation to be above their continue to be above their target. Um and the roughly half the committee says either zero cuts zero cuts or one cut. And that's a very interesting reaction function because it it suggests that the silent majority are much more hawkish than the vocal folks playing the apprentice uh game here to figure out who who can be even more dovish than the next guy in order uh to to try and get the chairmanship role. And so I I think we may well see I'm not sure what it'll be telegraphed in the Jackson Hole speech, but um it's very likely that we're the we're going to see a more hawkish Fed than people are expecting come September. >> All right, let's take a global central bank tour here. Let's go to the Bank of Japan here. Um obviously a lot going on. Bessence's offering now his opinion on what they should be doing. Mixed data coming kind of coming out of Bank of Japan and the country itself at this time. What are your thoughts there? Well, Bessant uh suggested that in that Japan has an inflation problem and that's nonsense. Um Japan has a rice pro rice price problem uh as a result of some bad harvests and some and and limited uh import allowance. Um but that has started to reverse those rice prices are down 30% in the last 8 weeks give or take. and um absent if you sort of extract that that one specific element. Rice is obviously very influential in Japan in terms of the consumption basket. But if you were to extract that, you'd see things like negative PPI and you'd see, you know, you see goods inflation as well as services inflation that remain very subdued. And the reason why that is is because the Japanese economy is in very is very weak, continues to be very weak. You know, it's only grown 0.7 real over the course of the last two years total. 0.7 reel. That is a uh that's very soft. That's not an economy that is in need of aggressive tightening. And so, um you know, I offered this weekend for Secretary Besson to get a free sub in my substack if he actually wanted to understand what was going on in Japan because he clearly has no idea. Um Japan will tighten aggressively. The the real question is what's going to happen first? Either I'm going to die or the BOJ is going to tighten aggressively. And my bets are that uh that I'm going to die before the DOJ. >> Let's hope that doesn't happen. >> Hopefully it doesn't happen soon. >> Yeah. Listen, I mean >> because it's so far it's been how long? Uh 20 almost 25 years in the markets and they still have yet to hike aggressively. So, uh I'm not I'm not holding my breath. >> Fair enough. All right, let's go to the Bank of England. Um where they do have stagflation over in the UK. Their hands are kind of tied as well. What are your thoughts there? Yeah, I mean they they are uh I I I like looking at the UK because um in many ways they're facing they're sort of a step ahead of the sort of pressures that the US is facing. They have both a worse employment situation as well as uh a worse inflation situation, meaning higher inflation. Um and the Bank of England at least so far has positioned itself to deliver at least a little bit easier monetary policy and a shift in that direction. Um they're going to be a good test case to see whether or not uh you know how far away how far you can get away with easy policy in the face of rising inflation. Most likely we're going to see a steepening yield curve start to uh constrain their ability to continue to deliver easy monetary policy. Um but it's it's um uh and it's not particularly that that is not particularly priced in this the steepening. Um and so you know I my guess is we're going to learn a lesson in the same way we learned you know back in the in the Liz trust moment. uh we'll probably learn a lesson again about uh what it's like to be over easy from a a central banker's uh perspective and you know the rest of the world and particularly chairman Powell and the Fed will probably look to that to see the the challenges of being too easy in the face of elevated inflation. >> That's fair. All right, let's go over to China. Um because obviously they're now re-implemented their weak FX policy. We've seen now it's an important piece and we talk about China a lot but your thoughts there? I know you you write about that often. >> Yeah, I mean it was interesting. I wrote something recently which is they're just back to their old playbook, right? They they had, you know, there's been all this talk in the west uh for years about how there was going to be a big bang policy change in China and you look at the macroeconomic reality and like nothing has changed in China for years. If anything, it the underlying macroeconomic dynamics there have gotten uh worse because the Chinese because Chinese policy makers first constrained credit to the housing sector and then now has constrained se uh credit to the um to the industrial sector for building increased or excess capacity. And so now you're basically relying on households whose demand remains anemic or the export sector. And given that set of circumstances, basically China's going all in on the export sector. I mean, we've got a surplus that is about as uh you know, it's the highest surplus that we've seen, you know, it's still pushing to all-time highs, 1.2 trillion. And um and the PBOC is intervening indirectly and directly, mostly indirectly, in order to depress the currency. You know, it it's not if it's the only you know, if rates are basically at zero and you're not getting any and you have no credit creation and you're not getting stimulation, which is, you know, what we call deleveraging or more uh challenging word to it is a depression type environment. There's basically only one path which is to devalue your currency. It's a big reason why we've seen so much flow into gold uh in over the course of the last 24 months a little bit in the in the west but a big part of it is in China because it's basically you know what are you supposed to do you don't invest in real estate you don't invest you can't invest you the stock market's been picking up a little bit but still there's uh long-term concerns about the returns there you can't get your money out of the country you know right now they're they even announced today they're taxing a bunch of foreign you know as much foreign money as you they and find a tax. And so what you're left with is like buy bars and put them under your mattress. And so that's why we've seen such a strong demand for gold in China. >> Yeah, gold is I was going to get to that. I want to get to gold, but I also want to talk about oil. Um oil obviously is always in the thick of it, geopolitics, whatever. And it's actually been a huge tailwind, I would say, for the US consumer, you know, in general. Oil being where it is, it's kind of been the one thing that I think surprisingly I think has stayed where it is. talk about your thoughts on oil um and the impact that that has. >> Well, uh retail gas prices have basically been flat for almost a year now and so that's certainly better than if they and and flat and low basically, you know, in the three buck a gallon range um for a while and that's certainly a lot better than where we were when it was $5 a gallon. Um but I don't think you've seen a big incremental stimulation to the US consumer from it. Um the the story on oil is we kind of got this this interesting dynamic where you're sort of stuck in a range where you get down into the 60s and there's pressure to bring supply offline in the US because the shell production and and other North American production starts to become unprofitable at that point. And then as as as soon as people think that they're going to bring some production offline and or a geopolitical event happens or something like that, you start to get an uptick at which point, you know, essentially the Saudis and nonopc uh and OPEC plus are happy to supply the market essentially as much as they can at 80. Um, and so you kind of are trading in this rangebound area where, you know, if you get down to the 60s, there's pro, you know, the the price action is kind of skewed to the upside. If you get into the, you know, into the high70s, the price action is skewed to the downside. And so we're just kind of treading water on oil, which makes it kind of a boring market to trade, to be honest, because you're just kind of stuck in this range. But if you can uh if you if you have the stomach to fade either side, it's it's been a pretty good pretty good um environment to trade. >> Yeah. I guess the US energy companies um obviously it's been a ton of M&A in the last few years. They're adjusting their rig counts as they see fit, you know. So I think the the price of oil has moved down to where these companies can benefit from. So I think there's a level, you know, we've seen the oil stocks kind of hold in here even with oil coming down into the low 60s. So it'll be interesting. But I totally agree with you that it's not a a boom for the US consumers, but it's also not a hindrance through all the other stuff that's gone on that, you know, it's obviously been positive at least from the from that that perspective. I want to go back to gold here because just with fiat currencies everywhere and printing money if the Fed does go into that easing mode again um which will happen at some point inevitably where gold kind of sits here because it feels like and we're going to get into Bitcoin obviously but it feels like you know gold is kind of getting the benefit of kind of the debacle global central banks that we just kind of went through here. Your thoughts on gold not just from the China perspective but in general? Well, you think about gold as a as essentially a contracurrency to developed world fiat currencies and you know it's been that way for 5,000 years. So it's got a little bit of a track record um and in that in that sense and so it's a world here you know the the sort of uh secular story is it's a world a developed world let's call it the developed world plus China that is overindebted um that really there is only one path forward over the course of the next couple decades which is that they're going to have to devalue money relative to stuff um relative to hard assets. ass in order to deal with their debt problems given the debt levels combined with the demographic issues that exist. And so in that sense, you know, gold from a strategic asset allocation perspective seems quite compelling. Tactically, I think it's a little less interesting in part because we had a bit of a a push related to I don't want to say hopes, but some concerns about the fact that the Fed or that both the combination of the Fed and the Treasury might go crazy on run it hot, uh, you know, not issue any duration bonds, the Fed would aggressively cut. I think those sort of um expectations have not been met and so we're in a bit of a consolidation mode here in gold um before uh you know before there's likely to be a more strategic uh up continued upswing in gold. In that sense, to the extent that you think of uh you know the the the Fed and the Treasury to some extent likely being easier ahead, the real place to make that bet is in bonds these days, which I know nobody wants to talk about bonds. You talk about bonds, it's like talking about serial killers at a at a cocktail party, you know? It's like like everyone quietly moves away from you. >> The long end we're going to refer to, >> right? The long end here. Yeah. Everyone quietly moves away from you and you sit in the corner with your drink. Um, but I'll I'll I'll uh venture to talk about bonds, which is like look, if you think that we're going to run easy money uh in order to support the economy, and you look at uh or you think that the economy is slowing, you look at bond yields, you look at either real yields or nominal yields, we're at cyclical highs on the long end of the curve. Um meaning essentially prices of bonds are at cyclical lows, right? at a time when we might be seeing a combination of easing and economic slowing. That's typically a very good time for bonds. Um whereas some of the other assets that people are at least thinking about will benefit from the easing, whether it's stocks, Bitcoin, or gold, those are all at all-time highs. And so if you're thinking about a portfolio of like where is weaker economic conditions and easing not priced in, it's not really priced into bonds. >> Well, let me ask you a question on that. If you we artificially decide to ease, what I mean by that is we're going to ignore the inflation. Don't look at those numbers. They aren't real and we cut too soon and inflation's still running hot. I would argue that bonds potentially could go into a tail spin and yields could go considerably higher and that would be the biggest moment that gold would would have. I think that's the next big moonshot. So why is that not a possibility? Forget about gold. Why is that not possibility or perception in the bond market? Yeah, I mean it's certainly, you know, if you go back and look last fall when we had what I characterized at the time as overeasy monetary policy, we saw bond yields rise in response. Um the the the the basic story here is that the Fed is not going to allow a bond yield rise that is inconsistent with underlying economic conditions. And so that easing of monetary policy is likely, you know, if we're really running easy, we're actually going to have to run bond yields that are lower than they otherwise would be given underlying economic conditions. And so that's where you see bond yields, you know, bonds being attractive in that sense because the yield the whole yield curve is going to come down in order to establish that easing. The place as you note where that would really show up is in gold, right? where and the dollar and gold. If we really choose the the extreme run and hot policy, bonds relative to cash will actually be in good shape because monetary policy will be easier than people expect over an extended period of time. That's good for bonds relative to cash and it's bad for the dollar. And so I think it's much more likely that we see a constellation that looks like that either uh because growth is weaker than is expected and therefore we're going to have to have e you know more easing than uh than uh folks uh think over time or you have uh aggressive easing which brings the whole yield curve down um and and is beneficial to bonds relative to cash but supports gold prices. And so if you're thinking about that, I would be holding short dollar positions paired with your long bond trade. >> I would imagine that QE5 would come quickly in that in that type of scenario as well. All right, so let's talk about Bitcoin, the savior of everything, right? The one thing and then stable coins in general, which are going to be huge demand for US treasuries down the road. But give me your thoughts on Bitcoin here. Are you a believer or you think it's a place in portfolio for it? Well, it just the Bitcoin when you look at it, you have to you have to understand what the macroeconomic drivers of it are. And you know, we continue to have test after test to see what is Bitcoin a risky asset, a risky or risky asset, or is it a contracurrency? And there's very little evidence that we're seeing here that it's a contracurrency. I mean, just look how it trade it traded through the tariff kurfuffle, let's call it. um it traded like a risky asset, not like gold. Gold rallied, Bitcoin sold off, right? And so um and time and time again, we find the circumstance where Bitcoin trades as the risky as a risky asset rather than, you know, that's stock adjacent rather than a contracurrency. maybe a little certain periods of time if you squint maybe it's there but by and large you're seeing you know it's basically just a more risky asset and the reality is if you think about people's portfolios the challenge that most people have in their portfolios they got plenty of risky assets whether it's stocks or NASDAQ or whatever it is the thing that they don't have enough is diversifying assets relative to risky assets and so I mean can it be in your portfolio sure it can just be another risky asset in your portfolio but don't fool yourself into thinking that it's going to be something that is going to be diversifying to things like equity risk under the vast majority of circumstances because empirically it has shown itself not to be diversifying to equity risk. I mean, it's been a, you know, if you want to call it a store of value. I'm not going to be bullish or bearish on it at all, but obviously with the retail component that it's gotten because of the ETF and all the other things it's gone into, you are going to have a lot more volatility that is tied to the market near-term, but it does feel like it finds its footing. Normally, the area I'm having a big problem with right now are these Ethereum treasury companies. Okay. You and I saw this in Well, I saw it, you were probably still in college, but I saw it in 99200. These start things start to happen. you get a.com affiliation you you change from a gold company at the time you know ironically you would want to do the opposite now gold company becomes a do etc I'm reading and actually know some of these companies which have converted into these Ethereum treasuries you're not reinventing the wheel here I mean this is not so stuff like that I would imagine um how you've talked about the markets and your and your background must drive you nuts because why would you ever pay a premium for a lever potentially a levered vehicle that you can buy the underlying I don't I don't understand that dynamic. I'd love to get your thoughts on these companies. >> Yeah. Well, I think the original idea um actually uh made some sense, which is that if you were faced with two different options, which is essentially going out and managing your own wallet with questionable counterparties or uh investing in a in an equity security um that you know has a variety of different constraints on it. that the equity security has re you know there's a variety of reasons why that actually would be a better way to hold it or at least a more efficient way to hold it. I think we've you things changed over the course of the last 24 months as we introduced these ETFs um where uh where you can now hold these assets in a way that is liquid and low cost and very efficient you know in terms of execution >> and you're facing black rockck instead of worrying about digital >> and I think that and right and and probably one of the things we learned about the through the financial crisis was um >> ultimately the financial institutions are on the hook for let's say questionable assets. And so in this particular case, like if for whatever reason there's an issue with the Bitcoin ETFs or Bitcoin, the underlying uh assets of Bitcoin uh or those ETFs, you get you have Black Rockck on the other side and they will make you whole just in the same way UBS made people whole and sure >> you know other financial institutions made people whole. And so that is it's not an explicit insurance plan, but it's a much more compelling insurance plan than, you know, uh than holding it at more questionable uh companies. >> I have no problem with companies taking a portion of their cash and Alex say, "Oh, we're going to keep cash." No, let's throw a little bit into Bitcoin or Ethereum. I get it. But when you convert your entire company to Ethereum, you just go continuously raise capital and it's predicated on you keep raising capital. There's just front running going on in the Ethereum. It's like Nicholas Cage in National Treasure when he has the the Charlotte key and he goes, "Could it really be that simple?" You know, the secret lives of it can't nothing this good can happen like in terms of you can't make money that easily. You have to ask yourself a question. I just want to mention this one company which I have to this new company Ethzilla ETHZilla. Okay. It used to be this 180 life sciences which actually was a biotech company. I just want you to I want to read this this thing. Okay. I have to read it. So the manager of the Ethereum is this company um Electric Capital. Electric Capital is serving as the external asset manager of Ethzilla's I'm sorry. Electric Capital is serving as the external asset manager for Ezilla and plans to implement a differentiated onchain yield generation program designed with the goal of outperforming traditional Ethereum staking while maintaining robust risk management to leverage a combination of staking, lending, liquidity provisioning, and bespoke private agreements. Okay. I'd rather just own Ethereum if you want to own it than try to get figure out because the overhead of a company and all the stuff that's going on. That's this is the kind of stuff that scares me. Nothing against them. Not saying they're doing anything that's wrong, but I've seen this movie play out before and that's the stuff that kind of scares me. >> Yeah. I mean, I think that the the big risk for investors is not understanding what actually is going on. And I worry that there are uh there's a lot of incentives to overstate the ability for these companies to uh to achieve goals, financial returns. I mean, I look at a particular uh you know, the the leading Bitcoin treasury company whose founder goes out there and says Bitcoin will be millions of dollars. >> Um >> it was Ethereum. Ethereum will be 60,000. >> Ethereum will be 60,000. Bitcoin will be a certain price. The statements that are being said by a variety of people in this industry, if I said them about my ETFs, I would go to jail. Right? >> Just to be clear, >> you cannot say an asset that will drive the majority of your uh of your company's performance will do XYZ. No disclaimers, no hedging, no fair and balance, none of that. And so I mean look, we have a different SEC today than we did, you know, uh 12 months ago. Um but there will be a day, you know, the statute of limitations on this stuff is 10 years. Yeah. >> And there will be a day where people will go back and look at those marketing materials and those statements and they will be recognized as being, you know, improperly misleading. And that's and that's really invest in Ethereum, invest in Bitcoin, go for it. As long as people understand what they're doing and they get fair and balanced and appropriate marketing related to these activities, go for it. But, uh, the real problem is when, uh, you know, they're being misled. And I think that that is a significant part of what is going on. >> I talk about it all the time. You know, buyer beware, especially in this era, right? So, you got to look out for yourself. That leads me right into the next question, which is private credit. >> Guess what? you get to get it now if you're an individual and I already know how you feel about it. Um, obviously if it got to me on my desk, why am I the lucky one now that gets it? Your thoughts on that? Obviously, there's a place in people's portfolio for the type of product, but what are your thoughts on private credit in general? Kind of gotten a little bit full here, I would think, in this world. >> Yeah, I mean, private private credit is uh, you know, is kind of you can't transform something into what it's not. You know, it's it looks like bank lending in one form or another. um in some ways with higher fees. Uh so it's more profitable for the for the lenders. Um and so you know, you take traditional lending and you throw a little leverage in there and that leverage pays for much higher fees and the manager's happy and you also smooth the the mark to market of it and the investor's happy and everyone seems happy. But the underlying risk is the same underlying risk. you can't get away from it. And so the reality is most investors would be much better off just investing in things like BKLN or SL RLN or CLOS's or you know any of those sort of ETFs that are out there um where they'd pay a lot lower fees, get better credit quality and get similar returns if they chose to apply similar amount of leverage or actually probably better returns if they chose to apply a similar amount of leverage. And so I think that all of this and this sort of ties to the larger question which I suspect um is is behind the private credit one in general is like is there the everyday investor will struggle to understand will not necessarily be able to do the level of diligence necessary to really understand what they're seeing. And in particular when you're looking at uh the first generation retail products that are out there uh there are a lot of incentives for these institutional asset managers to generate to create negative selection in their product offerings to retail in order to favor their institutional clients who are much higher paying and who hold a lot more of their assets. Um, and so whether it's something like PRIV, which is the the private credit ETF, which isn't really p, you know, which only has some private credit in it, >> or PE in your 401k, all of these things someone should look at with a very uh, judicious eye because if they're selling it to you, you probably don't want to buy it. >> That's right. I totally agree with you. We call that negative selection. Right. Beginning of 2022, you co-found unlimited, right, which you can go through and tell us what it is, but I could explain to people, you know, machine learning, you know, tracking hedge fund performance, taking the best ideas and putting it in a fund yourself. And you launched with HFND, who's the first, and there's three other ETFs now that you have. Talk about that, how that started, your co-founder, and how that came to be. Yeah, I mean my my later years at Bridgewwater and then also after I I left Bridgewwater during uh extended garden leave um actually ran a systematic $125 million systematic venture fund. Uh so you know using big data to find good opportunities sort of increasingly recognize that the sort of two and 20 businesses that are out there you know hedge funds venture private equity you know they're pretty good for the manager and they're pretty bad for the investor. And there's a couple reasons why that is. I mean, one is the fees are too high. Uh the hopefully you have no private equity or venture sponsors here, but uh >> you're I I I I tell like it is, so good. Don't worry about it. >> The fees are too high. Uh the products are illquid. Um and for the vast majority of investors, they're both tax inefficient. Uh and they're also, you know, many investors are locked out of those access to those strategies. And so our idea was to think about well how do you how could you bring the concepts of diversified lowcost indexing which obviously has totally changed stock and bond investing and bring it to the world of 2 and 20. Now doing that involved a whole we had to do something very different than typical sort of fund of funds type products because you know they pay the manager and then they pay themselves and now we got fees on top of fees on top of fees and so instead our idea was to build technology based upon our experience in the hedge fund business. uh and soon in in areas like venture as well um to basically replicate how these managers uh were positioned in real time, look over their shoulder, see how they're positioned in real time, infer that using our proprietary technology, and then we can take that understanding, translate into long and short positions and liquid securities, and that's what we use to back our ETF. So the idea very simply is access to hedge fund style strategies at much lower cost, much more tax efficient, much better liquidity. So you it's proprietary, but is it 13Fs and it's more than that? Is it how are you picking up in real time what these hedge funds are doing? Is it quarterly letters that you're scanning through or talk to me about that? >> Yeah, we we don't use uh 13F and position information because that has long been uh at best incomplete, at worst misleading uh about how managers are positioned because it only includes a subset of their positions. And so instead what we do is we look at the returns information and we infer basically how managers are positioned from that set of returns. And so you know going through a process that um is a little more computationally rigorous than you know what you do with a an active manager. You look at an active manager you say I understand their returns. I understand what happened in the markets that at that time I I know I know what they're doing. I can probably guess how they're positioned. You know they must be overweight bonds underweight tech stocks. whatever it is, we're just doing that in a more systematically rigorous way and we get very timely information about h how hedge funds for instance are performing uh you know daily information and we can use that to basically infer how they're positioned. So you're trying to take a low-risk approach to mimicking those type of returns. So if I look at HFND which I think is up near $30 million now NAV that you have there I noticed that you know 30 40% of it's kind of in fixed income market. I'm just curious how that correlates to generating or replicating a hedge fund. You can certainly have a great solid return off of that over a period of time if the other 60%'s meddling around. You know, financial services I see is large exposure on right now. Talking about how that process of constructing it versus mimicking it kind of comes. >> Yeah. So, what we're trying to do is we're trying to represent the positions that you know uh six different hedge fund strategies have on all combined into that one product. The thing that's important to always remember with hedge funds is kind of out of the box, most hedge fund managers are targeting bond-like risk. And the reason why that is is because their institutional mandates ask them to do that. So they're targeting something like 6 to 8% volatility, much lower volatility than what you'd typically see, say, with equity indices. And so the right benchmark to think about hedge funds is not the S&P 500 because it's not they're not nearly as risky. the right benchmark to think about is either cash or bonds, which are the primary diversifiers that hedge funds are in replace of. Um, and so what you see in that strategy, you know, HFND in a lot of ways is uh all all it's intended to do is is uh be a proof of concept that shows that we can track how hedge fund positions uh are evolving in real time. And so it's targeting that sort of bond-like risk. And you could see over time it's outperformed the bond markets over the course of the last couple of years. and tracked hedge fund returns. The thing from my perspective that's really exciting is we can now having sort of shown our ability to track these hedge fund returns, we don't have to take those returns out of the box the way that they come. We can start to think about how do you construct more uh compelling returns for investors. So for instance, we've taken our sort of six strategies that are in HFND and now we're breaking them out into the individual pieces. And then also what we're doing is we're improving we're raising the target return. So it's something more akin to equity like monthly volatility or risk with the diversifying properties that exist with hedge fund strategies. So things like our global macro strategy or managed futures. Those are strategies that um I think investors are finding and allocators are finding to be much more compelling complements to their existing portfolios. >> You're not using leverage though, correct? and as opposed to funds which do >> well leverage is a uh is an interesting topic to discuss. We're not using leverage in sort of the traditional sense in terms of like securities borrowing and leverage. Uh most of our uh products we express our positions using futures contracts and futures contracts the amount of capital that you have to put up relative to the notional exposure is uh is is very low. And so what we can do is we can basically we can uh take on essentially twice the notional exposure uh relative to what those funds are running at. They're running at bond risk. We can essentially run those strategies at equity risk by just taking on larger notional exposures in futures markets. And so that way we can you know from an investor's perspective they don't see any leverage. They see a single ticker with a single strategy generating those returns. So they don't have any of the challenges that many investors have when it comes to taking on more leverage. The leverage is effectively embedded in the security uh given the amount of essentially risk or notional positions that we're taking. And important to recognize just because you're using leverage effectively doesn't mean you're necessarily running something that is of extreme risk. These products are designed to be around equity index volatility, something that we're all comfortable with in a portfolio. >> Right. I understand that. And then your most recent launch, this HFQ, which is actually equity long short, which you do have the ability to take on single risk. Correct. >> Yeah. We mostly focus on sectors and factors and geographies because >> part of what we're doing is we're not uh we're not looking at any one particular manager. We're we're doing what I call alpha indexing. So we're taking the thousand equity long short managers and essentially netting out you know 600 or long tech stocks and 400 or short tech stocks or overweight or underweight. The reality is if you invest in any one manager you get a lot of randomness because they might be right they might be wrong but there's actually a lot more information value a lot more consistency of information in essentially the wisdom of that crowd. And so for instance in that case what we do is we sort of net out the positions and the views of all these different managers and we end up you know holding a either a long growth position or a long tech position in the portfolio. Well here's my question. You have you know 15 17 years of experience around brilliant people. Why do you need machine learning? Why isn't Bob Elliot running his own hedge fund? So I I know what you're trying to build and you know you're building a business off of this and you told the story one time I guess about the one time you did trade NAT gas. You're like, you know, you got only have to be right 55% of the time. We'll get into that, but why not just start your own fund and and why you relying on anybody else? You have tons of knowledge. >> Yeah. Well, I I think um it's any individual manager um will uh will have great periods of time and tough periods of time and and if you have lived through the life of being an individual manager, which I have, um you've been through those ups and downs. And what I what I recognized is that um is that no managers persistently outperform the index. And if you see over if you go back and you study the last 20,000 managers and you look at what's the probability that they persistently outperform their peers, what you see is it's no better, no higher of a chance than random. Well, if that's the case, if your ability to pick is effectively random in terms of picking, you know, which managers will outperform, you're actually a lot better off diversifying your managers, right? Because that wisdom of the crowd is actually a more consistent return than anyone manager because anyone manager like what's the what's the confidence interval of any one manager's return in a year? It's like positive 30 to negative 30. It's like what is that? That's like a coin flipping strategy. But when you start to essentially index the alpha, you start to create return streams that are understandable uh that are not nearly as random. Uh and you can start to think about how do those complement effectively to a portfolio. And so it is in many ways what what we're doing in unlimited with alpha indexing or hedge fund indexing is a recognition that um that I am no better my views are no better than the wisdom of the hedge fund community. So you're much better off instead of following any particular view of mine at any particular time following the overall index particularly when you can lower the fees and improve the taxes. >> All right, Bob. So where can people find you? I know on your exhandle as your exhandle is Bobby Unlimited, correct? Your Substack, they can find you as non-conensus. Y, right? >> Um unlimitedfunds.com is where unlimited is. What else am I missing here? >> Well, I'm on essentially all the socials. I know you're >> under Bobby Unlimited or my name, uh, you know, LinkedIn, Blue Sky, Twitter, uh, YouTube, have a YouTube channel of all my various clips, even a Tik Tok where I walk my dog in the morning and, uh, record short videos. >> I've seen some stuff. I've seen you a few of those, right? I got to start doing that myself, but I, you know, can never put put my act together to get that done. So, uh, and occasionally Patunia shows up, uh, as part of that experience, >> uh, and her morning activities. So, uh, so if you're into that sort of thing, uh, check me out on TikTok. And, uh, as you mentioned, my newly launched Substack, which you can find under my name and Substack or non-conensus. >> Well, Bob, there's a lot to write and talk about here that we're going to have over the next several months, several years, I should I should say. So, I hope you'll come back on and uh, thanks for coming back on the tape. >> For sure. Thanks so much for having me.
Bob Elliott: Uncensored, Unlimited & "Nonconsensus"
Summary
Transcript
In this episode of On the Tape, I welcome Bob Elliot, co-founder, CEO, and CIO of Unlimited, which offers a suite of ETFs using machine learning to create lowcost index replications of 2 and 20 style alternative investments. Bob has decades of investment experience, and prior to launching Unlimited, he served as the head of Ray Dalio's investment research team at Bridgewwater. Between Bob's Substack newsletter called Non- Consensus, his appearances on CNBC and Bloomberg and his Finn Twit prowess on X, Bob is never shy to share his views on the markets. Well, we have him on the pod today and get his thoughts on the markets and much more. So, enjoy this episode of On the Tape. Bob, thanks for coming in. >> Thanks so much for having me. >> All right. So, you were on the OG on the tape back in June 2023, shortly after the Civ debacle. We're going to talk about that and some other macro stuff which we've talked about and you talk about a lot actually. Fed and Treasury once again came to the rescue on that obviously. But let's start with this because your background is fascinating obviously coming out of Harvard Bachelor of Science and you still kind of apply that. I see you tweet some things out um about advances in biotech and things like that. But just as importantly um you were on Ray Dalio's investment team. You actually led I think his investment team at Bridgewwater for years. So incredible place to be for a long period of time. So let's start with that. That's kind of, you know, planted the seed, I think, for where you are today. >> Yeah. I mean, my my time at Bridgewater, almost 15 years, was really it was a great place to start a career in investing and in particular in thinking about and developing a set of skills around both macro and systematic investing. And they're obviously related, but they don't necessarily have to be related. And so I I got a front row seat in some of the uh the most interesting uh dynamics of our of our careers. uh very close to the 2008 crisis and how policy makers uh handled that. Um along with uh the European debt crisis uh the Chinese uh challenges in the mid2010s and then you know all the way to a renewed tightening in 2018. So it was really a whole wide range of different macro environments. Um and uh so it was it was a great place to start and I you know proud of what I was able to build there in terms of uh the strategies for their uh for their pure alpha strategy. Um and uh you know was excited uh to then move on and start uh essentially challenging the industry with what I'm doing now. >> But coming out of Harvard did you think you were going to get into business? I mean how did you land was there any time between when you graduated Harvard and Bridgewwater and what did you do in between that? No, it was my first job out of school and and um kind of connects to what you were talking about before. I actually in college was very focused on public health related issues particularly around the international HIV and AIDS epidemic at the time uh and helping build a grassroots constituency uh to pass PEPFAR uh which was Bush's uh global AIDS program and um and you know that sort of over time increasingly recognized that you know macroeconomic dynamics and economic dynamics are important and critical drivers of public health. Uh, and so that got me interested in macro. Um, and uh, I thought I'd go to Bridgewater. Basically, they'd pay me to get a masters in macro. Yeah. Pay me pretty well to do it. And I thought I'd go on and do something else. Uh, but, you know, I really fell in love with macro in the markets. And, >> uh, I guess it's, you know, 20 plus years and I'm still doing it. >> We're going to get into what you're doing today, but I just want to go over some highlights that went on because I found it fascinating. I saw an interview with you where and I think I read this before where you met with Tim Gener who was running the New York Fed at the time in 2007 and told him what the bank's exposure now we were in total agreement with you but we were actually a financial services firm. Where did you learn that within Bridgewwater? Was that something you undertook yourself? Is that part of your team process that dug that up? Because you were early to the crisis I should say. >> Yeah. Yeah. I mean it it it started actually uh when Ry turned to me about 6 months before that meeting and said uh this housing situation a big deal or a small deal and I was a couple years out of school and had to very quickly uh develop an understanding of uh the banks, their exposure, the assets, the likely losses and the consequences of that. uh and uh you know with a it was a it was a real sprint. Um but it was uh it was it was a great time and fortunately my answer was it was a big deal. Uh and that kicked off a lot of very interesting conversations. I mean it was very interesting both seeing and managing through that dynam through the the financial crisis both as an asset manager and how you manage money through that but then also spending a fair amount of time working directly with the white house with the the Fed uh with the Treasury and others uh congress congressional folks as well on how to actually develop the policy to navigate through it. Um and uh and that Gitener meeting was a particularly interesting one cuz of course whenever you go and have lunch uh at at the Fed, they the the officers don't tell you anything, right? As they should, you know, they shouldn't tell you anything. Uh but you know, I had my my big sheet of paper out with all the financial institutions in the country going on across this side and all the losses, the assets and the losses that they would undertake. And I said, you know, um, uh, you know, President Gener, the, um, uh, basically every financial institution in America is broke. And he just turned white. >> Yeah. >> Uh, because he had lived through a lot of crises before. I mean, he was right front and center. If you read his biography, it's actually a good biography. Right in front and center in the Asian financial crisis. Seems to have found himself in every crisis possible. Um and uh you know he asked a lot of specific questions about how we knew but it became pretty clear that that was both a compelling description of what was going on and also a bit of a shocking description cuz very few people at that time would have an honest conversation about how bad it was going to be. I know you signed an NDA you can never talk about Bridgewwater's trades but was Bridgewwater directly involved in trading against those not against the banks per se because it was a large macro fund but do you have trades on that expressed that type of viewpoint? Well, Bridgewwater trade 120 plus markets and so the impact of that understanding got it influenced a wide range of different positions and Bridgewwater did very well in 2008 in contrast to >> um you know much of what the what happened to the rest of the industry and I think in part it was because we had spent the time really deeply understanding the financial system uh and who was going to be on the hook uh and it was it was um and then to be honest then seeing and understanding how this could get resolved. D and seeing the upswing that happened in in 2009, which was a bit of a surprise to a lot of folks who hadn't necessarily studied things like quantitative easing, uh things that today seem commonplace to understand and at the time were totally revolutionary. >> Yeah, very much. So, let's get into the macro. Um you're a serial tweeter Xer. Um you write non-consensus on Substack, right? So, you're out there. Um you're on Bloomberg, CNBC a lot, so your your your views are well known, but there's a lot going on right now in the macro. There's no shortage of stuff to talk about here. So, let's start with what's right in front of us, which is the Fed and Jackson Hole and what your thoughts are on how the Federal Reserve is doing, what they should be doing. And I think you and I have very similar views that were somewhat looking at stagflation here in the face. And what are we going to do about it? >> It's rare where the market is uh is as confident in a direction of policy where uh the underlying data doesn't necessarily align with that. And that's I I think what we're seeing today is that um while it's easy to get sort of hung up in any particular jobs report and things like that, you know, the Fed basically looks at two things in terms of its core decision-making criteria, the unemployment rate and core PCE. The unemployment rate has basically been flat at these rates at this level of interest rates uh for the last year. And if you look at core PCE, it is still above the Fed's mandate and is likely rising here uh as the various tariff effects start to flow through. And so uh that combination of things would typically lead to neutral policy meaning on hold at a time when essentially uh there's I mean two and a half cuts priced in through the end of the year. And so Jackson Hole I think represents an interesting moment because essentially never will the Fed, maybe I shouldn't say never, but it is not commonplace and has not been the case for a long time that the Fed would engage in policy that is a uh that is uh sharply inconsistent with the market pricing. And so, Chairman Powell really has an interesting moment here because he, you know, not very often does he have an opportunity to to uh foreshadow what the what policy is going to be in a coming meeting uh in a speech ahead of time and Jackson Hole is that opportunity. So, it'll be interesting to see does he signal, hey, cool cool it down market. We're not going to be cutting like that. Does he just stay data driven? You know, meaning he's like, we've got more data between now and the meeting. um or or does he confirm the cuts the way that he did uh a year ago? You know, confirming that cuts were coming. It'll be a particularly uh interesting meeting. I guess every Jackson Hole meeting feels like it's interesting, but this one seems uh seems more interesting than some of the other ones we've seen lately. >> Yeah. I mean, is this and only has six meetings left. So, every meeting that goes by, it's less and less relevant. What's more relevant is who Trump is gonna, you know, appoint obviously. And there's it's like the apprentice show going on. There's 10 names now that are out there. But my fear is that I'm sure yours also is that we know that the economic data can be inconsistent for periods of time. But we also know, you can listen to what individual companies are saying. You can put the mosaic together to kind of get it. And it's clear to your point. I mean that drives me crazy is this tariff argument. Somebody's going to pay for these tariffs. Period. End of story. Are the companies going to eat them on the margin which means that companies earnings are going to come down? Probably not because it's the job of companies to make as much money as they can. or it's going to hit the consumer. And we're now seeing we we saw all the stocking ahead of the tariffs that went in place, right? We're now getting kind of a better read of where tariffs are going to sit. I don't know 15 17% whatever the numbers going to be. Now it's happening. So if Pal obviously wants to maintain Fed independence credibility obviously he's probably gonna be on my on my estimation on the side of hawkish or deemed to be hawkish because he's not going to say the September cut definite because a lot of data between the the next month it's going to come out. So what are your thoughts on that and just in general you know you want to rely on economic numbers apples to apples right and we get a lot of oranges sometimes and things change but we understand how that stuff works. I'd be concerned in the future that if the Fed loses its independence, BLS loses, you know, it's kind of its if you want to call it independence, whatever you want to call it. I don't know. That's a scary situation to me in terms of how economists and how investors are going to have to play the game. >> Yeah. Oh, I from my perspective, I like to go back to the dot plot because the dot plot's very valuable in not because of there the Fed's any good at predicting because the governors are uh as good at predicting as sure throwing darts at a dart board. >> But what that it is helpful in understanding is the reaction function. Meaning if we see a certain set of data, what is the likely set of policies that are like that are going to come? And so what you see see there in the in the um in the June dots is you know the median expectation is for the unemployment rate to go to four and a half and for inflation to be above their continue to be above their target. Um and the roughly half the committee says either zero cuts zero cuts or one cut. And that's a very interesting reaction function because it it suggests that the silent majority are much more hawkish than the vocal folks playing the apprentice uh game here to figure out who who can be even more dovish than the next guy in order uh to to try and get the chairmanship role. And so I I think we may well see I'm not sure what it'll be telegraphed in the Jackson Hole speech, but um it's very likely that we're the we're going to see a more hawkish Fed than people are expecting come September. >> All right, let's take a global central bank tour here. Let's go to the Bank of Japan here. Um obviously a lot going on. Bessence's offering now his opinion on what they should be doing. Mixed data coming kind of coming out of Bank of Japan and the country itself at this time. What are your thoughts there? Well, Bessant uh suggested that in that Japan has an inflation problem and that's nonsense. Um Japan has a rice pro rice price problem uh as a result of some bad harvests and some and and limited uh import allowance. Um but that has started to reverse those rice prices are down 30% in the last 8 weeks give or take. and um absent if you sort of extract that that one specific element. Rice is obviously very influential in Japan in terms of the consumption basket. But if you were to extract that, you'd see things like negative PPI and you'd see, you know, you see goods inflation as well as services inflation that remain very subdued. And the reason why that is is because the Japanese economy is in very is very weak, continues to be very weak. You know, it's only grown 0.7 real over the course of the last two years total. 0.7 reel. That is a uh that's very soft. That's not an economy that is in need of aggressive tightening. And so, um you know, I offered this weekend for Secretary Besson to get a free sub in my substack if he actually wanted to understand what was going on in Japan because he clearly has no idea. Um Japan will tighten aggressively. The the real question is what's going to happen first? Either I'm going to die or the BOJ is going to tighten aggressively. And my bets are that uh that I'm going to die before the DOJ. >> Let's hope that doesn't happen. >> Hopefully it doesn't happen soon. >> Yeah. Listen, I mean >> because it's so far it's been how long? Uh 20 almost 25 years in the markets and they still have yet to hike aggressively. So, uh I'm not I'm not holding my breath. >> Fair enough. All right, let's go to the Bank of England. Um where they do have stagflation over in the UK. Their hands are kind of tied as well. What are your thoughts there? Yeah, I mean they they are uh I I I like looking at the UK because um in many ways they're facing they're sort of a step ahead of the sort of pressures that the US is facing. They have both a worse employment situation as well as uh a worse inflation situation, meaning higher inflation. Um and the Bank of England at least so far has positioned itself to deliver at least a little bit easier monetary policy and a shift in that direction. Um they're going to be a good test case to see whether or not uh you know how far away how far you can get away with easy policy in the face of rising inflation. Most likely we're going to see a steepening yield curve start to uh constrain their ability to continue to deliver easy monetary policy. Um but it's it's um uh and it's not particularly that that is not particularly priced in this the steepening. Um and so you know I my guess is we're going to learn a lesson in the same way we learned you know back in the in the Liz trust moment. uh we'll probably learn a lesson again about uh what it's like to be over easy from a a central banker's uh perspective and you know the rest of the world and particularly chairman Powell and the Fed will probably look to that to see the the challenges of being too easy in the face of elevated inflation. >> That's fair. All right, let's go over to China. Um because obviously they're now re-implemented their weak FX policy. We've seen now it's an important piece and we talk about China a lot but your thoughts there? I know you you write about that often. >> Yeah, I mean it was interesting. I wrote something recently which is they're just back to their old playbook, right? They they had, you know, there's been all this talk in the west uh for years about how there was going to be a big bang policy change in China and you look at the macroeconomic reality and like nothing has changed in China for years. If anything, it the underlying macroeconomic dynamics there have gotten uh worse because the Chinese because Chinese policy makers first constrained credit to the housing sector and then now has constrained se uh credit to the um to the industrial sector for building increased or excess capacity. And so now you're basically relying on households whose demand remains anemic or the export sector. And given that set of circumstances, basically China's going all in on the export sector. I mean, we've got a surplus that is about as uh you know, it's the highest surplus that we've seen, you know, it's still pushing to all-time highs, 1.2 trillion. And um and the PBOC is intervening indirectly and directly, mostly indirectly, in order to depress the currency. You know, it it's not if it's the only you know, if rates are basically at zero and you're not getting any and you have no credit creation and you're not getting stimulation, which is, you know, what we call deleveraging or more uh challenging word to it is a depression type environment. There's basically only one path which is to devalue your currency. It's a big reason why we've seen so much flow into gold uh in over the course of the last 24 months a little bit in the in the west but a big part of it is in China because it's basically you know what are you supposed to do you don't invest in real estate you don't invest you can't invest you the stock market's been picking up a little bit but still there's uh long-term concerns about the returns there you can't get your money out of the country you know right now they're they even announced today they're taxing a bunch of foreign you know as much foreign money as you they and find a tax. And so what you're left with is like buy bars and put them under your mattress. And so that's why we've seen such a strong demand for gold in China. >> Yeah, gold is I was going to get to that. I want to get to gold, but I also want to talk about oil. Um oil obviously is always in the thick of it, geopolitics, whatever. And it's actually been a huge tailwind, I would say, for the US consumer, you know, in general. Oil being where it is, it's kind of been the one thing that I think surprisingly I think has stayed where it is. talk about your thoughts on oil um and the impact that that has. >> Well, uh retail gas prices have basically been flat for almost a year now and so that's certainly better than if they and and flat and low basically, you know, in the three buck a gallon range um for a while and that's certainly a lot better than where we were when it was $5 a gallon. Um but I don't think you've seen a big incremental stimulation to the US consumer from it. Um the the story on oil is we kind of got this this interesting dynamic where you're sort of stuck in a range where you get down into the 60s and there's pressure to bring supply offline in the US because the shell production and and other North American production starts to become unprofitable at that point. And then as as as soon as people think that they're going to bring some production offline and or a geopolitical event happens or something like that, you start to get an uptick at which point, you know, essentially the Saudis and nonopc uh and OPEC plus are happy to supply the market essentially as much as they can at 80. Um, and so you kind of are trading in this rangebound area where, you know, if you get down to the 60s, there's pro, you know, the the price action is kind of skewed to the upside. If you get into the, you know, into the high70s, the price action is skewed to the downside. And so we're just kind of treading water on oil, which makes it kind of a boring market to trade, to be honest, because you're just kind of stuck in this range. But if you can uh if you if you have the stomach to fade either side, it's it's been a pretty good pretty good um environment to trade. >> Yeah. I guess the US energy companies um obviously it's been a ton of M&A in the last few years. They're adjusting their rig counts as they see fit, you know. So I think the the price of oil has moved down to where these companies can benefit from. So I think there's a level, you know, we've seen the oil stocks kind of hold in here even with oil coming down into the low 60s. So it'll be interesting. But I totally agree with you that it's not a a boom for the US consumers, but it's also not a hindrance through all the other stuff that's gone on that, you know, it's obviously been positive at least from the from that that perspective. I want to go back to gold here because just with fiat currencies everywhere and printing money if the Fed does go into that easing mode again um which will happen at some point inevitably where gold kind of sits here because it feels like and we're going to get into Bitcoin obviously but it feels like you know gold is kind of getting the benefit of kind of the debacle global central banks that we just kind of went through here. Your thoughts on gold not just from the China perspective but in general? Well, you think about gold as a as essentially a contracurrency to developed world fiat currencies and you know it's been that way for 5,000 years. So it's got a little bit of a track record um and in that in that sense and so it's a world here you know the the sort of uh secular story is it's a world a developed world let's call it the developed world plus China that is overindebted um that really there is only one path forward over the course of the next couple decades which is that they're going to have to devalue money relative to stuff um relative to hard assets. ass in order to deal with their debt problems given the debt levels combined with the demographic issues that exist. And so in that sense, you know, gold from a strategic asset allocation perspective seems quite compelling. Tactically, I think it's a little less interesting in part because we had a bit of a a push related to I don't want to say hopes, but some concerns about the fact that the Fed or that both the combination of the Fed and the Treasury might go crazy on run it hot, uh, you know, not issue any duration bonds, the Fed would aggressively cut. I think those sort of um expectations have not been met and so we're in a bit of a consolidation mode here in gold um before uh you know before there's likely to be a more strategic uh up continued upswing in gold. In that sense, to the extent that you think of uh you know the the the Fed and the Treasury to some extent likely being easier ahead, the real place to make that bet is in bonds these days, which I know nobody wants to talk about bonds. You talk about bonds, it's like talking about serial killers at a at a cocktail party, you know? It's like like everyone quietly moves away from you. >> The long end we're going to refer to, >> right? The long end here. Yeah. Everyone quietly moves away from you and you sit in the corner with your drink. Um, but I'll I'll I'll uh venture to talk about bonds, which is like look, if you think that we're going to run easy money uh in order to support the economy, and you look at uh or you think that the economy is slowing, you look at bond yields, you look at either real yields or nominal yields, we're at cyclical highs on the long end of the curve. Um meaning essentially prices of bonds are at cyclical lows, right? at a time when we might be seeing a combination of easing and economic slowing. That's typically a very good time for bonds. Um whereas some of the other assets that people are at least thinking about will benefit from the easing, whether it's stocks, Bitcoin, or gold, those are all at all-time highs. And so if you're thinking about a portfolio of like where is weaker economic conditions and easing not priced in, it's not really priced into bonds. >> Well, let me ask you a question on that. If you we artificially decide to ease, what I mean by that is we're going to ignore the inflation. Don't look at those numbers. They aren't real and we cut too soon and inflation's still running hot. I would argue that bonds potentially could go into a tail spin and yields could go considerably higher and that would be the biggest moment that gold would would have. I think that's the next big moonshot. So why is that not a possibility? Forget about gold. Why is that not possibility or perception in the bond market? Yeah, I mean it's certainly, you know, if you go back and look last fall when we had what I characterized at the time as overeasy monetary policy, we saw bond yields rise in response. Um the the the the basic story here is that the Fed is not going to allow a bond yield rise that is inconsistent with underlying economic conditions. And so that easing of monetary policy is likely, you know, if we're really running easy, we're actually going to have to run bond yields that are lower than they otherwise would be given underlying economic conditions. And so that's where you see bond yields, you know, bonds being attractive in that sense because the yield the whole yield curve is going to come down in order to establish that easing. The place as you note where that would really show up is in gold, right? where and the dollar and gold. If we really choose the the extreme run and hot policy, bonds relative to cash will actually be in good shape because monetary policy will be easier than people expect over an extended period of time. That's good for bonds relative to cash and it's bad for the dollar. And so I think it's much more likely that we see a constellation that looks like that either uh because growth is weaker than is expected and therefore we're going to have to have e you know more easing than uh than uh folks uh think over time or you have uh aggressive easing which brings the whole yield curve down um and and is beneficial to bonds relative to cash but supports gold prices. And so if you're thinking about that, I would be holding short dollar positions paired with your long bond trade. >> I would imagine that QE5 would come quickly in that in that type of scenario as well. All right, so let's talk about Bitcoin, the savior of everything, right? The one thing and then stable coins in general, which are going to be huge demand for US treasuries down the road. But give me your thoughts on Bitcoin here. Are you a believer or you think it's a place in portfolio for it? Well, it just the Bitcoin when you look at it, you have to you have to understand what the macroeconomic drivers of it are. And you know, we continue to have test after test to see what is Bitcoin a risky asset, a risky or risky asset, or is it a contracurrency? And there's very little evidence that we're seeing here that it's a contracurrency. I mean, just look how it trade it traded through the tariff kurfuffle, let's call it. um it traded like a risky asset, not like gold. Gold rallied, Bitcoin sold off, right? And so um and time and time again, we find the circumstance where Bitcoin trades as the risky as a risky asset rather than, you know, that's stock adjacent rather than a contracurrency. maybe a little certain periods of time if you squint maybe it's there but by and large you're seeing you know it's basically just a more risky asset and the reality is if you think about people's portfolios the challenge that most people have in their portfolios they got plenty of risky assets whether it's stocks or NASDAQ or whatever it is the thing that they don't have enough is diversifying assets relative to risky assets and so I mean can it be in your portfolio sure it can just be another risky asset in your portfolio but don't fool yourself into thinking that it's going to be something that is going to be diversifying to things like equity risk under the vast majority of circumstances because empirically it has shown itself not to be diversifying to equity risk. I mean, it's been a, you know, if you want to call it a store of value. I'm not going to be bullish or bearish on it at all, but obviously with the retail component that it's gotten because of the ETF and all the other things it's gone into, you are going to have a lot more volatility that is tied to the market near-term, but it does feel like it finds its footing. Normally, the area I'm having a big problem with right now are these Ethereum treasury companies. Okay. You and I saw this in Well, I saw it, you were probably still in college, but I saw it in 99200. These start things start to happen. you get a.com affiliation you you change from a gold company at the time you know ironically you would want to do the opposite now gold company becomes a do etc I'm reading and actually know some of these companies which have converted into these Ethereum treasuries you're not reinventing the wheel here I mean this is not so stuff like that I would imagine um how you've talked about the markets and your and your background must drive you nuts because why would you ever pay a premium for a lever potentially a levered vehicle that you can buy the underlying I don't I don't understand that dynamic. I'd love to get your thoughts on these companies. >> Yeah. Well, I think the original idea um actually uh made some sense, which is that if you were faced with two different options, which is essentially going out and managing your own wallet with questionable counterparties or uh investing in a in an equity security um that you know has a variety of different constraints on it. that the equity security has re you know there's a variety of reasons why that actually would be a better way to hold it or at least a more efficient way to hold it. I think we've you things changed over the course of the last 24 months as we introduced these ETFs um where uh where you can now hold these assets in a way that is liquid and low cost and very efficient you know in terms of execution >> and you're facing black rockck instead of worrying about digital >> and I think that and right and and probably one of the things we learned about the through the financial crisis was um >> ultimately the financial institutions are on the hook for let's say questionable assets. And so in this particular case, like if for whatever reason there's an issue with the Bitcoin ETFs or Bitcoin, the underlying uh assets of Bitcoin uh or those ETFs, you get you have Black Rockck on the other side and they will make you whole just in the same way UBS made people whole and sure >> you know other financial institutions made people whole. And so that is it's not an explicit insurance plan, but it's a much more compelling insurance plan than, you know, uh than holding it at more questionable uh companies. >> I have no problem with companies taking a portion of their cash and Alex say, "Oh, we're going to keep cash." No, let's throw a little bit into Bitcoin or Ethereum. I get it. But when you convert your entire company to Ethereum, you just go continuously raise capital and it's predicated on you keep raising capital. There's just front running going on in the Ethereum. It's like Nicholas Cage in National Treasure when he has the the Charlotte key and he goes, "Could it really be that simple?" You know, the secret lives of it can't nothing this good can happen like in terms of you can't make money that easily. You have to ask yourself a question. I just want to mention this one company which I have to this new company Ethzilla ETHZilla. Okay. It used to be this 180 life sciences which actually was a biotech company. I just want you to I want to read this this thing. Okay. I have to read it. So the manager of the Ethereum is this company um Electric Capital. Electric Capital is serving as the external asset manager of Ethzilla's I'm sorry. Electric Capital is serving as the external asset manager for Ezilla and plans to implement a differentiated onchain yield generation program designed with the goal of outperforming traditional Ethereum staking while maintaining robust risk management to leverage a combination of staking, lending, liquidity provisioning, and bespoke private agreements. Okay. I'd rather just own Ethereum if you want to own it than try to get figure out because the overhead of a company and all the stuff that's going on. That's this is the kind of stuff that scares me. Nothing against them. Not saying they're doing anything that's wrong, but I've seen this movie play out before and that's the stuff that kind of scares me. >> Yeah. I mean, I think that the the big risk for investors is not understanding what actually is going on. And I worry that there are uh there's a lot of incentives to overstate the ability for these companies to uh to achieve goals, financial returns. I mean, I look at a particular uh you know, the the leading Bitcoin treasury company whose founder goes out there and says Bitcoin will be millions of dollars. >> Um >> it was Ethereum. Ethereum will be 60,000. >> Ethereum will be 60,000. Bitcoin will be a certain price. The statements that are being said by a variety of people in this industry, if I said them about my ETFs, I would go to jail. Right? >> Just to be clear, >> you cannot say an asset that will drive the majority of your uh of your company's performance will do XYZ. No disclaimers, no hedging, no fair and balance, none of that. And so I mean look, we have a different SEC today than we did, you know, uh 12 months ago. Um but there will be a day, you know, the statute of limitations on this stuff is 10 years. Yeah. >> And there will be a day where people will go back and look at those marketing materials and those statements and they will be recognized as being, you know, improperly misleading. And that's and that's really invest in Ethereum, invest in Bitcoin, go for it. As long as people understand what they're doing and they get fair and balanced and appropriate marketing related to these activities, go for it. But, uh, the real problem is when, uh, you know, they're being misled. And I think that that is a significant part of what is going on. >> I talk about it all the time. You know, buyer beware, especially in this era, right? So, you got to look out for yourself. That leads me right into the next question, which is private credit. >> Guess what? you get to get it now if you're an individual and I already know how you feel about it. Um, obviously if it got to me on my desk, why am I the lucky one now that gets it? Your thoughts on that? Obviously, there's a place in people's portfolio for the type of product, but what are your thoughts on private credit in general? Kind of gotten a little bit full here, I would think, in this world. >> Yeah, I mean, private private credit is uh, you know, is kind of you can't transform something into what it's not. You know, it's it looks like bank lending in one form or another. um in some ways with higher fees. Uh so it's more profitable for the for the lenders. Um and so you know, you take traditional lending and you throw a little leverage in there and that leverage pays for much higher fees and the manager's happy and you also smooth the the mark to market of it and the investor's happy and everyone seems happy. But the underlying risk is the same underlying risk. you can't get away from it. And so the reality is most investors would be much better off just investing in things like BKLN or SL RLN or CLOS's or you know any of those sort of ETFs that are out there um where they'd pay a lot lower fees, get better credit quality and get similar returns if they chose to apply similar amount of leverage or actually probably better returns if they chose to apply a similar amount of leverage. And so I think that all of this and this sort of ties to the larger question which I suspect um is is behind the private credit one in general is like is there the everyday investor will struggle to understand will not necessarily be able to do the level of diligence necessary to really understand what they're seeing. And in particular when you're looking at uh the first generation retail products that are out there uh there are a lot of incentives for these institutional asset managers to generate to create negative selection in their product offerings to retail in order to favor their institutional clients who are much higher paying and who hold a lot more of their assets. Um, and so whether it's something like PRIV, which is the the private credit ETF, which isn't really p, you know, which only has some private credit in it, >> or PE in your 401k, all of these things someone should look at with a very uh, judicious eye because if they're selling it to you, you probably don't want to buy it. >> That's right. I totally agree with you. We call that negative selection. Right. Beginning of 2022, you co-found unlimited, right, which you can go through and tell us what it is, but I could explain to people, you know, machine learning, you know, tracking hedge fund performance, taking the best ideas and putting it in a fund yourself. And you launched with HFND, who's the first, and there's three other ETFs now that you have. Talk about that, how that started, your co-founder, and how that came to be. Yeah, I mean my my later years at Bridgewwater and then also after I I left Bridgewwater during uh extended garden leave um actually ran a systematic $125 million systematic venture fund. Uh so you know using big data to find good opportunities sort of increasingly recognize that the sort of two and 20 businesses that are out there you know hedge funds venture private equity you know they're pretty good for the manager and they're pretty bad for the investor. And there's a couple reasons why that is. I mean, one is the fees are too high. Uh the hopefully you have no private equity or venture sponsors here, but uh >> you're I I I I tell like it is, so good. Don't worry about it. >> The fees are too high. Uh the products are illquid. Um and for the vast majority of investors, they're both tax inefficient. Uh and they're also, you know, many investors are locked out of those access to those strategies. And so our idea was to think about well how do you how could you bring the concepts of diversified lowcost indexing which obviously has totally changed stock and bond investing and bring it to the world of 2 and 20. Now doing that involved a whole we had to do something very different than typical sort of fund of funds type products because you know they pay the manager and then they pay themselves and now we got fees on top of fees on top of fees and so instead our idea was to build technology based upon our experience in the hedge fund business. uh and soon in in areas like venture as well um to basically replicate how these managers uh were positioned in real time, look over their shoulder, see how they're positioned in real time, infer that using our proprietary technology, and then we can take that understanding, translate into long and short positions and liquid securities, and that's what we use to back our ETF. So the idea very simply is access to hedge fund style strategies at much lower cost, much more tax efficient, much better liquidity. So you it's proprietary, but is it 13Fs and it's more than that? Is it how are you picking up in real time what these hedge funds are doing? Is it quarterly letters that you're scanning through or talk to me about that? >> Yeah, we we don't use uh 13F and position information because that has long been uh at best incomplete, at worst misleading uh about how managers are positioned because it only includes a subset of their positions. And so instead what we do is we look at the returns information and we infer basically how managers are positioned from that set of returns. And so you know going through a process that um is a little more computationally rigorous than you know what you do with a an active manager. You look at an active manager you say I understand their returns. I understand what happened in the markets that at that time I I know I know what they're doing. I can probably guess how they're positioned. You know they must be overweight bonds underweight tech stocks. whatever it is, we're just doing that in a more systematically rigorous way and we get very timely information about h how hedge funds for instance are performing uh you know daily information and we can use that to basically infer how they're positioned. So you're trying to take a low-risk approach to mimicking those type of returns. So if I look at HFND which I think is up near $30 million now NAV that you have there I noticed that you know 30 40% of it's kind of in fixed income market. I'm just curious how that correlates to generating or replicating a hedge fund. You can certainly have a great solid return off of that over a period of time if the other 60%'s meddling around. You know, financial services I see is large exposure on right now. Talking about how that process of constructing it versus mimicking it kind of comes. >> Yeah. So, what we're trying to do is we're trying to represent the positions that you know uh six different hedge fund strategies have on all combined into that one product. The thing that's important to always remember with hedge funds is kind of out of the box, most hedge fund managers are targeting bond-like risk. And the reason why that is is because their institutional mandates ask them to do that. So they're targeting something like 6 to 8% volatility, much lower volatility than what you'd typically see, say, with equity indices. And so the right benchmark to think about hedge funds is not the S&P 500 because it's not they're not nearly as risky. the right benchmark to think about is either cash or bonds, which are the primary diversifiers that hedge funds are in replace of. Um, and so what you see in that strategy, you know, HFND in a lot of ways is uh all all it's intended to do is is uh be a proof of concept that shows that we can track how hedge fund positions uh are evolving in real time. And so it's targeting that sort of bond-like risk. And you could see over time it's outperformed the bond markets over the course of the last couple of years. and tracked hedge fund returns. The thing from my perspective that's really exciting is we can now having sort of shown our ability to track these hedge fund returns, we don't have to take those returns out of the box the way that they come. We can start to think about how do you construct more uh compelling returns for investors. So for instance, we've taken our sort of six strategies that are in HFND and now we're breaking them out into the individual pieces. And then also what we're doing is we're improving we're raising the target return. So it's something more akin to equity like monthly volatility or risk with the diversifying properties that exist with hedge fund strategies. So things like our global macro strategy or managed futures. Those are strategies that um I think investors are finding and allocators are finding to be much more compelling complements to their existing portfolios. >> You're not using leverage though, correct? and as opposed to funds which do >> well leverage is a uh is an interesting topic to discuss. We're not using leverage in sort of the traditional sense in terms of like securities borrowing and leverage. Uh most of our uh products we express our positions using futures contracts and futures contracts the amount of capital that you have to put up relative to the notional exposure is uh is is very low. And so what we can do is we can basically we can uh take on essentially twice the notional exposure uh relative to what those funds are running at. They're running at bond risk. We can essentially run those strategies at equity risk by just taking on larger notional exposures in futures markets. And so that way we can you know from an investor's perspective they don't see any leverage. They see a single ticker with a single strategy generating those returns. So they don't have any of the challenges that many investors have when it comes to taking on more leverage. The leverage is effectively embedded in the security uh given the amount of essentially risk or notional positions that we're taking. And important to recognize just because you're using leverage effectively doesn't mean you're necessarily running something that is of extreme risk. These products are designed to be around equity index volatility, something that we're all comfortable with in a portfolio. >> Right. I understand that. And then your most recent launch, this HFQ, which is actually equity long short, which you do have the ability to take on single risk. Correct. >> Yeah. We mostly focus on sectors and factors and geographies because >> part of what we're doing is we're not uh we're not looking at any one particular manager. We're we're doing what I call alpha indexing. So we're taking the thousand equity long short managers and essentially netting out you know 600 or long tech stocks and 400 or short tech stocks or overweight or underweight. The reality is if you invest in any one manager you get a lot of randomness because they might be right they might be wrong but there's actually a lot more information value a lot more consistency of information in essentially the wisdom of that crowd. And so for instance in that case what we do is we sort of net out the positions and the views of all these different managers and we end up you know holding a either a long growth position or a long tech position in the portfolio. Well here's my question. You have you know 15 17 years of experience around brilliant people. Why do you need machine learning? Why isn't Bob Elliot running his own hedge fund? So I I know what you're trying to build and you know you're building a business off of this and you told the story one time I guess about the one time you did trade NAT gas. You're like, you know, you got only have to be right 55% of the time. We'll get into that, but why not just start your own fund and and why you relying on anybody else? You have tons of knowledge. >> Yeah. Well, I I think um it's any individual manager um will uh will have great periods of time and tough periods of time and and if you have lived through the life of being an individual manager, which I have, um you've been through those ups and downs. And what I what I recognized is that um is that no managers persistently outperform the index. And if you see over if you go back and you study the last 20,000 managers and you look at what's the probability that they persistently outperform their peers, what you see is it's no better, no higher of a chance than random. Well, if that's the case, if your ability to pick is effectively random in terms of picking, you know, which managers will outperform, you're actually a lot better off diversifying your managers, right? Because that wisdom of the crowd is actually a more consistent return than anyone manager because anyone manager like what's the what's the confidence interval of any one manager's return in a year? It's like positive 30 to negative 30. It's like what is that? That's like a coin flipping strategy. But when you start to essentially index the alpha, you start to create return streams that are understandable uh that are not nearly as random. Uh and you can start to think about how do those complement effectively to a portfolio. And so it is in many ways what what we're doing in unlimited with alpha indexing or hedge fund indexing is a recognition that um that I am no better my views are no better than the wisdom of the hedge fund community. So you're much better off instead of following any particular view of mine at any particular time following the overall index particularly when you can lower the fees and improve the taxes. >> All right, Bob. So where can people find you? I know on your exhandle as your exhandle is Bobby Unlimited, correct? Your Substack, they can find you as non-conensus. Y, right? >> Um unlimitedfunds.com is where unlimited is. What else am I missing here? >> Well, I'm on essentially all the socials. I know you're >> under Bobby Unlimited or my name, uh, you know, LinkedIn, Blue Sky, Twitter, uh, YouTube, have a YouTube channel of all my various clips, even a Tik Tok where I walk my dog in the morning and, uh, record short videos. >> I've seen some stuff. I've seen you a few of those, right? I got to start doing that myself, but I, you know, can never put put my act together to get that done. So, uh, and occasionally Patunia shows up, uh, as part of that experience, >> uh, and her morning activities. So, uh, so if you're into that sort of thing, uh, check me out on TikTok. And, uh, as you mentioned, my newly launched Substack, which you can find under my name and Substack or non-conensus. >> Well, Bob, there's a lot to write and talk about here that we're going to have over the next several months, several years, I should I should say. So, I hope you'll come back on and uh, thanks for coming back on the tape. >> For sure. Thanks so much for having me.