Animal Spirits Podcast - Talk Your Book: 2021 Outlook

Episode Date: January 8, 2021

On today's Talk Your Book, we speak with Matthew Bartolini about options for diversified investors going forward, how to think about volatility in fixed income investments, cyclical stocks in 2021, the different types of income investments and more.   Find complete shownotes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Like us on Facebook And feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation. Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. Michael Battenick and Ben Carlson work for Riddle's wealth management. All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions, are subject to change based on market and other conditions and factors, and do not reflect the opinion of Redhall's wealth management, state tree global advisors, or State Street corporations and its affiliates. This podcast is for informational purposes only and should not be relied upon for investment

decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. We are sitting here with Matthew Bartolini, head of Spider America Research at State Street Global Advisors to talk about his 2021 outlook, everything that's going on in the 6040 portfolio, and how to think about asset allocation going forward. This is something Michael and I have been thinking about for a long time, both on the podcast and in our daily life is people have this idea of a diversified portfolio, 6040 is

the benchmark everyone uses. And because interest rates are so low, there has to be an alternative. And everyone keeps trying to figure out what that is. And you go through some alternatives in your outlook piece. But talk about some of the pros and cons of finding alternative because as far as we're concerned, it's really difficult to do at this point. Yeah. I mean, in the piece, we talked about the idea of the 6040 portfolio that diversify, mix of assets of stocks and bonds, growth assets, and defensive assets. That works. It's the diversification between those two. But what we have now is an environment where return expectations are going to be lower, which is something we've heard for quite some time. And it has been trending

lower over time, those standard 6040 returns. The piece sort of talks about don't give up on that asset mix of 6040 growth assets and defensive assets. It's sort of what you do within there. that can maybe help alleviate some of the return challenges, particularly on the fixed income side, where core aggregate bonds are yielding to a degree of like 1.2%. And we've seen their returns move in a stepwise fashion down pretty much every decade since the 80s. And you could only expect it to even go further lower, given that, again, yields around 1.3%. Your subsequent returns are pretty much on par with the yield that you buy at today. So it's more about what you do within those pockets.

It's impossible to refute the fact that returns for bonds have to be lower. But when we're talking about returns, we're talking about longer-term returns. In any given year, pretty much anything can happen as we saw in 2020. The tenure started 2020 at what? Was it like one-five? Yeah, things about that. So you're saying, okay, long-term returns for bonds at this point going for the 10-year, they're going to be 1.5, plus or minus a little bit.

That's what you're going to get. But in 2020, we got 8% from bonds, which is remarkable. Yeah, I just don't think that's going to continue in perpetuity. It can't, but I guess the timing of these things is what makes it difficult. So you cannot expect these returns to continue. It just cannot. But let's just like get to one particular alternative. As a for instance, you want more return.

You're going to have to take more risk. Where's one place that people go search for more risk or junk bonds? So junk bonds have underperformed just a plain vanilla index with significantly more volatility. Your question to you is this on junk bonds. And I guess you could throw really any of the alternative bonds in the space. Are those asset allocation tools, or are they more tactical in nature? In our view, they are strategic assets. They should be within your portfolio from a long-term perspective.

That doesn't mean you can't trade around them. I mean, we have portfolios that are strategic rebalance once a year, make changes at the margins. Then they also have tactical portfolios that would trade high yield based on the credit environment. After March, we went pretty much overweight high yield because we realized that spread were widened. and we could harness some of that spread compression. But from a long-term perspective, high yield should have a role in a portfolio because you're able to earn a carry-over traditional bonds. And as we show in the paper and others have shown, what constitutes a lot of your return

when you extend your horizon, say, three, five, ten years is the coupon. High yield gets more than 100% of its return from its coupon. And if you historically have a yield on average around 460, 560 basis points, that's a fair return in an environment. I mean, right now, high-eal bonds are yielding just barely 4%. But that's only one of the markets that have a yield over 3%. So you're going to have to outlay some risk. Do you think the answer here is just that you have to be more diversified?

Because I think probably in the 80s, 90s, even 2000s, bonds were basically a one-decision asset class. You could put them in pretty much anything. Treasuries, anything very risk-free, and you're going to be fine because the yield was way higher. Do you think that investors just have to look to diversify more there to sort of deal with all the risks that come there with where rates are? Yeah, I mean, the fixed income side of the portfolio is a real challenge because in order for you to get income, you do have to take some sort of risk. Now, if we sort of steal a line from Corey Hofstein that you cannot destroy risk, you can only transform it, that's what you should be looking to do in your fixed income portfolio. know. So we talk about, okay, there's essentially three types of risk. If I want to get a yield over 2%, I can go buy some long-term corporate bonds. Long-term IG corporate bonds, a lot is going to

be predicated upon movements in the yield curve. Well, I'm taking on duration risk, and that is a risk. Duration is a plain and simple risk. Then you can say, okay, I would take some credit risk. You go buy high yield, or maybe you buy senior loans, or even stay in like the triple B spot of IG corporates. but also you can take currency risk with emerging market debt. A lot of the returns, we show that 93% of the historical returns, there's a correlation to returns on EM local currencies. So currency movements are going to be a big driver, and EM local debt yields over 3.5%.

So you can start to diversify your sources of risk, and that may be able to give you some yield, but you're not continuously stretching into the subjective credits because something like EM debt is 80% investment grade. Or you could take chocolate risk and buy Hershey stock and get a 2% dividend yield. Well, I mean, that's the other part, right? You can just buy high yield dividend equities. You can group a bunch of S&P 500 stock to the highest yielding, get a yield around 4.6%.

But now you're taking on massive equity risk. So it's an old saying, but there is no free lunch. And it's more important now just because yields are so, so low. You need to really think through how you're going to structure that bond side of your portfolio, even in the core space. This blew me away from one of your reports. The standard 6040 portfolio of S&P 500 stocks and aggregate core bonds provided 91% of the return on stocks, but with 64% less volatility and a 36% lesser max drawdown. Speak, damn it. Yeah, I mean, that's a great stat, if I must say.

Yeah, I mean, that just speaks to the level of diversification. At this point, we speak about bonds for income. That's over. Nobody's getting income from their bonds. And the question why I asked about junk bonds earlier being strategic or tactical, at 9% now we're talking, but at 4% that doesn't really do it for me, given the amount of risk that you're going to be taking there. The impact that has on our society is really important.

Like retirees that we're looking to get sort of that steady income by being in a retirement income portfolio that's 90% bonds and 10% in stocks, they're now all of a sudden only getting about a 1.5% coupon if they're just staying in traditional core metrics. And that's a problem. So you go in here about in one of your pieces too about just how. high valuations in the stock market are. Throughout the idea of trying to guess where interest rates are going to go in the next 10, 20 years, couldn't the fact that those retirees are going to need more equity risk because they're living longer and they have to, a lot of them just don't have

enough in savings, they need to take more risk. Is that something that could potentially prop up valuations and keep them higher than they've been? Yeah, probably. I wouldn't see why that would not be the case. If more people have to stay within stocks, if we go back to this notion of Tina, there is no alternative, then retirees are going to have to be in certain areas in the marketplace. I would argue that if you say, use to be 90-10 bond stocks for the retired portfolio, shifting it to something like 70-30, and having that 30% of stocks being something that is more bond proxy-ish, sort of like low-ball equities or high-quality equities, something where you're not taking on a significant amount of beta risk, and you're able to have some more of a defensive portfolio, that still gives you some growth,

both assets that could potentially provide a higher real return than we're expected to get from traditional core bonds. So all of this is just in play. And that goes back to the piece of like, the idea of diversification is not dead. That's the whole thing. Everyone's like 60, 40 portfolio is dead. They're viewing it from a return perspective, but it really should be viewed from a risk perspective. Because if you think it's dead, they think diversification's dead. And we clearly saw this year, it's not. When the market was falling apart, Treasury's rallied, as you would expect. We spent a lot of time focusing on fixed income with good reason, but it's funny because on top of like searching for yield, people tend to think that the risk lies with that part

of the portfolio if interest rates go from 1.5, you know, if there's another taper tantrum, if they go from 1.5 to 3 or whatever the case may be. But the risk is always on the stock ledger side of the portfolio. Yeah. I mean, it's one of the reasons why you see risk parity funds having to lever up the bond side to actually create some sort of normalized risk profile. But yeah, stocks are inherently way more riskier than bonds because bonds have the embedded maturity and traditional coupons. Also, the claimant on cash flows you can think of from a corporate side. What do you think of something like preferred stocks that are, I guess, neither bonds nor stocks discuss. One of the ways that I see it is that they have most of the downside

of stocks when things go really cabloy and not all of the upside. It's one of those hybrid vehicles that have stocklight characteristics because they do have some volatility when markets get volatile. And then particularly when markets get volatile or driven by bank stocks, because about 60% of preferreds are financial firms. So there's a lot of sector risk from that perspective. But what they do have this unique is yields on par with high yield. So I think as of today, about 4.3.4% yield, which is the same as high yield.

But relative to high yield, preferred, are about 80, 85% investment grade rated. They do not have the same volatility as high yield. So you get this sort of income producing asset that does not take on as much risk as subjective credits do. Now, you will take on more volatility than traditional core bonds or treasuries, but you're getting something that yields in the force rather than the ones. So, like, if you're actually somebody who's looking for income, you could do a lot worse. Yeah. You could close your eyes during a bare market.

You'll be fine. It's all about diversification, too. I mean, preferred to have, I think, the degree of 0.4 correlation to bonds historically. So if you're mixing in some traditional treasuries, and the one thing that I think people miss out, we see this in the ETF side is mortgages. The role mortgages can play as a defensive core asset. They yield more than treasuries. the ag, they have less volatility than the ag as well as treasuries. They're a very defensive

asset that still give the diversification properties because they have a negative correlation to stocks. So pay of mortgages with preferred, you get negative correlation of stocks, positive correlation to stocks, but roughly about 0.6. But then you get that blended asset income ratio that's going to be roughly around 3.2%. You have this great chart in one of your pieces here where you look at all these different fixed income proxies. And you look at the ag and treasuries, but also corporate bonds and mortgage-backed securities and senior loans and high yield, and you break them down by duration and yield and what their standard deviation is. And I think one of the things that it's going to be hard for fixed income investors, whatever

they're in, is the fact that duration has come up as yields have gone down. That's going to make bonds more volatile when interest rates move, which could be good if rates fall, but when they rise, it's going to make them just more volatile. Explain to me why something like senior loans has such a higher yield than some of these other places with a lower duration. That seems to not make sense from a risk return perspective to me. Why is that the case? Well, senior loans have a quarterly reset. They're usually floating rate in this environment. It makes that really change on the LIBOR. But as a result of that quarterly reset, they have a low duration, basically, you know, whatever the 90-day equates to some respect is

about 0.4 years. Now, loans are not really impacted by duration at all. Their risk profiles all driven by credit, similar to high yield. But the difference of senior loans is they, as the name would indicate, they're more senior in the capital structure. So they get paid first. They have higher recovery rates as a result, also have lower volatility and lower equity beta. So senior loans are this sort of defensive high income asset. Now, you're obviously you're taking credit risk because you're buying stuff that's below investment grade. There's also liquidity challenges within that market that we think active managers do quite a good job of managing well, to index managers.

But senior loans represent that sort of defensive, high-income asset that could potentially give you yield, but again, not just by high beta credit, which I think is the crux of where we are today in this market cycle. What does the industry composition look like of the senior loan portfolios? It's going to depend on how a manager is comprising it. But if we look at broad-based index, you have communications, a lot of communication stocks, so traditional telcos, energy, rheumato. materials, very similar to high yield. You see a decent amount of overlap in terms of high yield

issuers and senior loan issuers. You guys obviously get a look at fund flows. Where have investors gone in 2020 looking for yield? But is it mostly plain vanilla or have they reached? What was investor behavior like last year? Yeah. So what's interesting is from a flow's perspective, five different bond sectors have record flow totals in 2020. Thank you, Jerome. I mean, you're joking, but that's basically what happened. I mean, high G corporates, $59 billion. A lot of that came in after March. High yields, $20 billion. Again, a lot of that came after March. You had ejected the quitting in the capital system. You had the Fed put basically firmly in the marketplace, allowing for risk taking to go on. So those two sectors had a lot of inflows. Again,

yields widened out pretty significantly in March, and investors came in and took it down once that risk was backstopped, the implicit backing from the Federal Reserve. But what also was interesting is the vanilla aggregate bonds. They took in $76 billion. Is that target date funds? I mean, with ETF flows, you sort of never know. It's always a game of clue. You kind of know the flows. We don't know who was wielding the axe. Ben backed up the truck in March to his target fund. But some of it is, right? Some of it's just new adoption into the space. People ask that allocation, trying to manage their portfolios, buying broad ag because they need to diversify and play defense. But the ag has that asymmetrical risk return profile.

So we sort of buying something that doesn't yield a lot, but they're taking on more risk. But I guess if they're selling equities, it's okay. But we saw massive inflows and equities. What I thought was interesting, though, is when we look at mutual funds on the active side, intermediate core active managers took in their most flows they've ever had in a year. So that's not the Fed. I mean, perhaps not, but a lot of active core managers did poorly in Q1 and then had phenomenal performance afterwards.

Now, I wouldn't say that performance chasing, but I think a lot of people recognize that active managers at least had the ability to navigate different segments of the fixed income market and add incremental yield over broad beta. The challenge is if they're charging 50 basis points and they can only eke out 40 basis points more of yield, you're out 10 basis point loss and then that's not great. So essentially, that's probably investors saying I'm willing to diversify my fixed income holdings, but I want someone else to do it for me because getting tactical in fixed income is difficult, obviously. It's not an easy proposition. We get that question all the time of how structure of bond portfolio. I think I've written four or five different papers about how you can

use it with different ETFs systematically, decomposing the broader ag and creating a better profile from a yield duration perspective or diversification across different sectors. But there's always this tugging push and pull of do I outsource the asset allocation to an active manager or do I try to insource it, do it myself by managing across these different macro sectors and tailoring my duration and trying to specifically target a yield. So we have a challenge, and asked us, how do I build a bond portfolio of targets of 3% yields? We walked through it and it was like, you have to take some risks. And we're like, yes, the math is really, really hard.

And we actually showed that you could rearrange the ag and get more yield and then balance out, because you're not going to take more durationers, but then balance it out with credit risk and try to be more barbell from that perspective. But it was a little challenging because they're like, you're telling me I've got to buy X amount of percent into long-term corporates. You just told me that the yield curve is likely going to steepen. aren't going to lose a lot of money with this? I sort of walk through, like, yeah, this is the tradeoffs in terms of asset allocation. I have a few thoughts. One is that maybe owning bonds,

like bonds, like bonds, like bonds, treasury bonds. I know they don't give you much, but maybe the simple answer is they allow you to take more equity risk. Maybe it's just as simple as that. Yeah, I mean, goes back to just the tenets of diversification. Buy treasuries, they're negatively correlated. I would argue if you're trying to buy some sort of perceived safe haven asset to be defensive and you want to stick with something that doesn't take any credit risk, really, is mortgages. They still have that negative profile. They get higher yield.

They're actually less volatile. I think that allows you then sort of expand your risk budget on the equity side or into some sort of illiquid alternative to potentially give you an uncorrelated return and have that sort of asymmetrical payoff, hopefully to the right side. One of the fears with bonds for the past few years has been rising rates. People think that they're going to get crushed on price. My one thing that I always say is that the only way we're going to make returns on bonds is if rates actually rise. You want income, then rates need to go up.

A bad year for bonds, like if rates went from one to three, a bad year would be about a bad afternoon for the stock market. So it's just funny that they're worrying about risk in the wrong places. Can you talk about what would happen to prices, maybe not down to the decimal point, but what roughly would happen to prices if rates go up? How big a risk is that actually in the short term? Well, so I think it's funny that people worry about bonds in terms of like these cataclysmic losses, too. I looked at this on a rolling 12-month basis, going back to 1976, bonds, core ag bonds, only lost 5% a handful of times and it happened all before 1982. It's a long time ago.

It just hasn't happened recently. There's really only been, I think, basically 46 periods analyzed in that over 40 plus years, where bonds actually had a loss. So it's about 8% of the period. So bonds, core ag bonds, having lost, is a sort of a rare occurrence. And again, because we have positive yields. Positive yields means you get some coupon and some income and it's going to be a big party of return. But your question around what happens if rates rise? First of all, if rates are rising, that's to me a good

thing because that means our recovery is taking shape. We have higher growth expectations, higher inflation expectations, and we're getting back to some form of normalcy. So I would be happy to see higher rates personally. But if we were going to say a hundred basis point parallel shift in the curve, which is unlikely to happen because I don't see the short end going up by 100 basis points because the Fed's not moving. You basically on the ag get about a 3% loss. 50 basis point moved just in the 10 year. You'd have a 3% loss. And that just speaks to the level of duration. You have 6 years of duration. You have 1.5 yield. So even if you have 50 basis points more in yield, that's not going to recoup the duration-induced price losses. And that's the trade-off.

Eventually, it will. Eventually, it will. Eventually, you start to eat and eat and eat more income as the years go on. And I think that's the whole thing that bonds is that sort of defensive income-oriented asset. So we can go back to the orange origins of the 60-40 portfolio. What are the origins? I kind of looked into this. And again, this is all internet research to some degree. Kind of started with a dedicated portfolio in 1938, where there's this idea of trying to fulfill your income needs by creating bond ladders, getting those income needs taken care of, and then going buying growth assets so you could replenish that income portfolio. Then, of course, it manifested itself into the modern portfolio theory, 1952.

I always think this is interesting. I remember this in the CFA books. One proxy for high-duty asset allocation was one minus your age. In your age, you'll be your bond side. I think perhaps maybe in the 90s that worked, not one with the demographic challenges we have now. I mean, my parents just retired and, you know, they're 70. I don't really see them having 70% in bonds.

I think that's too much for them. So that one I think you should throw out in this point. I was looking before we got on this at the stock side of things. So over the last 10 years call it, the S&P 500 is up 14% a year. MSCIAE, which is foreign stocks, is up like 5.5% per year. Are you noticing that there are flows, have they been slowly trickling out of international funds? How is that looking in terms of people like a home country bias and how people are allocating to equity funds?

People very much have that home country bias. USA. Yeah, they definitely were trying to make America great again within their portfolios. But to some degree, we do portfolio reviews for clients. We do a look-through analysis. We aggregate at the end of the year. And we look to see what their asset allocation was. And it's like overweight U.S. equities by a long shot.

When we look at fund flows, this year, record flows in the ETF industry. On the equity side, it was the second largest inflow year ever behind 2017. It was all driven by U.S. equities. EM equities had net outflows up until November 1st. It took in $32 billion in the next two months and end of the year basically positive, barely positive. So investors had not allocated the international all year until we had this regime shift where we got positive vaccine news, election uncertainty reduced itself and also sort of spurred some softening tensions overseas, if you will. dollar weakness yeah dollar weekends you start to see some movement on the brexit front we didn't really get resolution until 1231 so you can't claim victory on that one but investors were really

underweight international equities i think going back to our income discussion one way to actually get income from your equity portfolio is to own international stocks europe's got like four and a half percent dividend yield yeah i mean broad eFA out yields the u.s by almost 100 basis points now you're going to pay for that with the underperformance we've seen over the last 10 years. I mean, we've had, what, 400 different all-time highs in the S&P 500 recently? EFA and EM are still below their high watermark from 2007. Hey, I want to ask your opinion. I forgot to do this while we're talking about bonds. Back in March, there was a major meltdown in the treasury market and ETFs came unglued there for a second. Do you think that the ETFs were actually

providing liquidity and price discovery, whereas the mutual fund NAVs were incredibly stale, or do you think ETFs broke? The former. Like, ETFs were being used as price discovery mechanisms, not only within treasury markets, but also high yield, investment-grade corporates. That's where liquidity went. I mean, we saw a record high amount of trading volumes and fixed income ETFs as investors were trying to source out liquidity and trade their portfolio.

We saw investors trying large institutional investors that needed cash and to hedge their portfolio going short ETS. And then all of a sudden they were able to increase their cash flow for meat redemptions, not have to sell their bonds and stress the prices, decrease their credit beta. ETS proved to be a very valuable tool during the crisis in terms of finding that liquidity. In bond navs, you know, they were still. There's no other way to say it because the underlying markets were not really moving as quickly as the, we're seeing the prices in the ETFs. And you could say, well, how could the ETF prices be moving faster than the underlying market? And I would say, like, because you have a willing buyer and seller meeting in a fair market price, assessing the entire risk of that portfolio of bonds, looking at the historical movements, where it's oil, interest rates and saying, this is where I'll clear my risk. This is where I will trade my risk to you and transfer these shares at, say, 90-50 and get a high-yield basket done at that level. You had a pricing mechanism between a willing buyer, willing seller, which I think always gets lost. I think investors or the media sort of thinks that ETFs get just traded blindly by people.

There's actually people assessing, like, yes, this is a fair price with these value of underlying bonds. Yeah, maybe a lot of the underlyingings actually weren't trading, right? Or am I making that up? No, a lot of the underlines were not trading. There were some. And that's why sort of going into portfolio construction and product development, you do want to build your indices with an inherent liquidity bias and not always have sort of low, minimum amount, high-yield bonds or something like that. There is definitely stale pricing at the underlying level. So let's look forward to 2021. You've got this change. chart, I guess it's from FACSET, showing earnings per share growth projections for value, growth, S&P, cyclicals are through the roof, my gosh. So the question I have for you is, so the S&P, for example, we've got 25% or so for 2021, another 20 for 2022. Has all that been pulled forward? Did investors already see past the valley? I think so. I think we've started to pull forward

in those robust earnings expectations for our 2021, and they're starting to see that get priced to be into the marketplace. Wouldn't that be something if earnings do grow by like 22% to 21 and the index is flat? It's about expectations, though. We are expected to grow 22% because you have low base effects because 2020 was just so terrible and a recovery that is taking shape and we surprise to the upside, that'll add more to the marketplace. If we can't meet those expectations, it's going to be an extreme negative bias because you had such an easy starting point.

You have this low base effect and it's all going to come down to how the recovery takes shape, particularly for cyclical assets. I think about restaurants, retail shopping, other discretionary items like cruise ships, hotels. If we have a stallout in the recovery, which so far we've had, because I'm in lockdowns, you'll start to see those earnings expectations to be ratcheted back. And then as a result of that negative earnings momentum, fundamental momentum, you would start to see price momentum, mean revert as well as investors' expectations change. So I think the rally we've seen from, say, November to the end of the year through two,

today is a result of those expectations increasing starting in November. And I think if we don't see further increases or any sort of positive guidance, the return path and say Q1 is going to be a bit challenging because we're going to go back to trading based on COVID-19 case rates and the shape of the recovery. You have in here, Michael said. The cyclicals are showing like 70% earnings growth, which is obviously due to the fact that earnings got crushed in 2020. One of the charts that I find interesting is recently as 2007, the makeup of the S&P was basically 50-50 between cyclicals and more growth sector. So the cyclicals would be financials, industrial, materials, energy.

Those are now more like 20% of the market. So isn't this a case where if these expectations are beat by these companies and things open up and things are better than expected, a lot of investors, much like international and emerging markets, are going to be completely caught off guard. If it's these companies that are leading higher in 2021 or whenever, if and whenever, that happens. Isn't that a case too where a lot of people just aren't in these anymore because they're so much smaller? Yeah, I mean, their exposure is definitely changed as a lot of those tech conglomerates and behemoths in the discretionary. Communication services industry have

taken ownership pretty much in the S&P 500. You know, I think you'll still see the material benefit just because you do have financials, which are sick of assets. Those still do represent a fair amount in the S&P 500. In terms of while the weight is low for, say, energy, it's contribution can be somewhat outsized because returns have been so depressed. And if you see a material bounce back, I think the problem with energy, though, is it's less about what happens in the U.S. economic environment and more about from a global perspective. So while it's a cyclical asset, we're thinking about sectors. We prefer financials from that perspective because it's tied to the U.S. economy, while energy is more tied to from a global space. But I do think investors are now

underweight cyclical value than they have been in the past. Even after the bounce? Even after the bounce, just because to your point earlier, the sector composition has changed in the last 10 years where it is top-heavy in a few different sectors. And that's why I would always talk about sector rotation. To get serious now, what's your Dow price target for the end of the next year? My what? Your Dow price target.

My Dow price target? Bitcoin minus 20,000. Yeah, whatever Bitcoin is. It's going to be tied to that, I think. All right. You want to make any bold predictions, anything that you think investors might be missing or anything funky you want to throw out there? I mean, I think from a bold prediction perspective,

it's always hard because you don't want to end up so wrong. But I think one thing that's underappreciated is on the international side, is that international assets have been completely under our own for quite some time. Investors have basically built a portfolio for a decade, not wanting that in the portfolio. And I think if they don't make changes now, particularly what we see from a leadership perspective in the U.S. on the political side, think it's going to open up more cooperation internationally. I think investors who have

basically thrown international equities out are going to be somewhat impacted negatively by that. That doesn't really a bold prediction. It's just basically people should wisen up to better diversification with their equities and buy some international stocks. From your lips to God's ears, as they say, because we have avoided the home country bias. It sucked. So I hope they start to catch up. Yeah. All right, Matt. This is great. As always, thank you so much for coming on today. Yeah, thanks for having me, guys. I don't know.