Animal Spirits Podcast - Talk Your Book: Investing in China

Episode Date: August 29, 2022

On today's show, we spoke with Brendan Ahern to give us an update on China, Chinese stock listing issues, investing in China's largest companies, and much 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

Today's Animal Spirits Talk Your Book is brought to you by Crane Shares. Go to craneshares.com to learn about KBA, the MSC-I-China-50 Index ETF we're going to be talking about today. And also go to their mailing list, China last night to enjoy either daily or weekly news all about China. 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 Batnik and Ben Carlson work for Ritt Holtz Wealth Management. All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions and do not reflect the opinion of Rit Holt's wealth management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Rithold's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben.

On today's show, we have Brendan Ahern on from Crane Sherrists to talk all about China. Now, I remember one of the first blog posts that I did on the stock market does not equal the economy was a post or a research piece from Vanguard that I copied and pasted into my own showing like a scatterplot of GDP and stock market performance. And if there's any sort of like economic linkage, I feel like China breaks the rule because the GDP has gone up like 6% a year. Or, well, I made up that number. Sorry, I don't know why I made that up.

I think it's like 8 to 9% a year. 8% of, okay. And what does the stock market done over the long haul? Since 1993, it's up 1% a year, 33% in total. Also, I think I did that same exact blog post early in my blog post days. It's still that same chart from Vanguard, so. It's a right of passage. Yeah, you have to do it.

Stock market is not the economy, especially in China. It's done a lot better in the last 10, 15, 20 years than it has over the last 30 years, but it's an emerging marketer. It was for a while still. It's the kind of country that if you think about what it is and how it works, it kind of boggles the mind, that they just kind of have these people who are pulling different strings and levers, and they can make stuff happen very quickly if they want. This gave us a stat on the shot talking about the scope or size, vastness, if you will,

of physical China. They have 128 cities with over a million residents. For reference, the United States has a bit of. I was impressed. When you asked him about that, the U.S., that he had that stat, too. He had the follow-up. Yeah, he's got stats. Isn't it funny, though? I can remember seeing the presentations in 2008, 2009, 2010 of the ghost city in China. That was a big, bearish thing back in the day for the double-dip recession. China's building the, and you'd see the pictures, and it's these huge skyscrapers. Yeah, whatever happened to those cities? Did they get filled up? I feel like Vice did

like a million specials on them. There was a lot of that, and I don't know. You don't get the follow-up. You get the initial bearish seed planted, and then what? Damn it, we should have asked Brandon. There was so much to talk about. We also didn't really talk about it. He mentioned it in our talk with him. He said, guess what? A lot of that gap has been filled. There are these ghost cities built, and then cities keep expanding and expanding and expanding, and eventually it happens where it becomes part of a suburb. So on today's show, we spoke about the Chinese market. That was so funny. I don't know that

Well, we're like struggling for No, you missed it when he said it And then you just skipped over what I said it And you just chose to ignore both of us It's okay All right So with no further ado Let's not step on too much of the material

Here is our conversation With Brendan Ahern from Cren We're joined today by Brendan Ahern Brendan is the CIO of Cranchairs Brendan, thank you for coming on today Thank you so much Michael, great to you as well as Ben. So we've spoken about crane shares over the week as like, I guess, a reference point for what's going on in China.

Specifically, we tend to talk a lot about Kweb, the internet fund. But today we're going to talk about a different one, another Chinese fund, which we'll get to in a second. But before we do, can you give us an update because you write a nightly newsletter called, what's it called? Something about in China, last night in China? Now, China Lastnight.com. China last night. All right, close enough. So there is a lot happening in that side of the world right now.

Can you give us the latest? Ultimately, you've got almost two different definitions of China. You've got onshore China, which is the Shanghai and Shenzhen market, which is 95% owned by investors in China. It is more reflective of what do the Chinese think about China. And we can kind of contrast that with the offshore market, the Hong Kong, U.S. listed ADRs, kind of like the K-Web names. I'm sorry. I'm a chronic interrupter, but I think this is important before we get too far

field. What is the Shanghai and the Shenzhen? So the Shanghai is mega cap and large caps, almost like the new, I'd call it like the New York Stock Exchange, more established companies, larger companies, and mainly state-owned enterprises. So companies that have some level of government affiliation versus the Shenzhen exchange is more the private companies. There are some large-cap companies there, but mainly mid and small-cap names, more private companies, companies with no affiliation with the government. Think about Shanghai had more value versus more Shenzhen, more growth names. And the New York Stock Exchange would hate to be considered value, but back in the day,

it was more value names where NASDAQ was more growth names. So it's kind of a similar comparison. All right, so go on. So ultimately, on the offshore market, I think what foreigners are worried about is a whole litany of issues. I don't know if we have, if an hour we can cover them all, but you've got the zero COVID policy, which, you know, we kind of say is the, in China, they call it the Lives First policy, which is very simply that only 20% of 80-year-olds in China have gotten three vaccines. For 70 to 80, it's just about 50%. And for over 60 to 69 demographic, it's about

56%. So why China has this zero-COVID policy is just you take a thing like, like Omicron, they would kill almost two million Chinese. The key is that post Shanghai, we've not seen a citywide lockdown. And I think that's very simply driven by the economic consequence of the Shanghai lockdown has led to them saying, we just can't go through that economically. So you're seeing individual buildings can get locked down, apartment complexes can get lockdown. We're not seeing anything like what we saw with Shanghai. If you look at the MSCI indexes, they have all the country ones. And I've seen China's used in a ton of examples of stocks versus the economy. So I think the China one goes back to like 1993. And if you look at that, the total return

is like 30% or something. It's like 1% a year. I think a lot of that was like the 90s were just really, really bad. And it's probably been better this century. But what are some of the reasons that those returns are just so awful over 30-year period versus like how are things are different going forward maybe? It's a great observation and it's not inaccurate. People will say China, similar to EM is out of favor. And I pull this up every day. So since the GFC low, March 9th of 2009, the S&P 500 is up 215%. And MSCI emerging markets is up 199 and MSCI China is up 163. So people would say, oh, it's out of favor. I would argue, Ben, that if we went back 13 years ago and looked at the two indices, they were basically value indices, that there was all

financials, energy, industrials, materials, and real estate. And we went into this growth-geared market. And that was true in the U.S., but it was true globally. And so part of what we've tried to do at crane shares is to say, If you want this growth part of China or EM, you got to go out and buy it because it's such a small part of these broader indices. So just to kind of prove that out, again, so S&P 715, EM199, MSCI, China, 163. What are those numbers? Those are percent returns from March 9,09, the GFC low up until Friday the 19. Okay. Because as I said, the numbers that you gave just a second ago didn't seem right. The 200% were up way more than that. So S&P 500 is up 715. Okay. But MSCI Emerging Markets is up 199, MSCI China up 163. So what's a gross sector? Okay, so tech. So MSCI EM Tech is up 816%. And MSCI China Tech is up 2,127%.

But what if you missed the law? If we did it over any time period, over the last decade, if you owned growth EM or growth China, you did very well up until about two years ago. It seems like that's a story everywhere outside of the U.S. European stocks, developed stocks, foreign developed anything. It was just more of a value tilt, right? Yeah, yeah. I mean, people will always talk about the KOSPI, the definition of South Korea,

but they have a thing called the CoSDAQ. And the CoSbee didn't do anything for 10 years while the CozDAC did nothing but go up. So this value versus growth is, it's not just a U.S. phenomenon. It really has been a global phenomenon. And you have these benchmarks that are all value. And then you have this growth outperformance.

And, of course, the market does what's least expected. Energy prices, commodity prices go up. and the benchmarks have little exposure to that. In some ways, it's just very typical or predictable in some ways. Brendan, I saw a tweet over the weekend. Sichuan province just announced to shut down all industrial production for five-fold days due to electricity shortage. You know about this?

Yeah, yeah, it's interesting. Shishwan province, I mean, they've got some good companies, industrial companies. What will shock people is 80% of that province's electricity is hydro. And so you have this crazy heat wave in China, and this province gets all of its, virtually all of its energy from hydroelectrical dams. Heat wave equals drought means no electricity. Michael, are you asking the China expert? He's heard of this? It's kind of like someone asking you if you saw a horrible horror movie last weekend.

Of course. Of course he's heard of it. No. Well, hopefully, hopefully that's some sort of job security. They've had a bad heat wave, very similar to what we've seen in Europe, actually in parts of the United States. And it's interesting. Some states like Vermont, very dependent upon hydro. And so if you get a heat wave, which leads to a drought, you've got a big problem.

Getting back to the growth value stuff real quick, does that mean that a lot of these EM indices are now way more growthy because these are stocks that have outperformed in the last decade? Yeah, yeah. I mean, that's exactly it been. Part of it was MSCI didn't add U.S. listed China ADRs. like Alibaba until the end of 2015 and 2016. So IEMG or EEM didn't hold Alibaba until December of 2015. And then again, I think it was June of 2016. It was a two-stage inclusion.

Footsie, if you own VWO, they didn't own. They did 2016, 2017 inclusion of U.S. listed China ADR. So if you bought the blob, you didn't actually own one of the largest. companies in the EM universe because it wasn't part of the indices. All right. We're going to get into the A shares in a minute, but I can't let this go without Todd my cohab for a second because I'm looking at the return chart or the price chart since inception and this is a wild one.

I mean, this really is a wild one. If you zoom back to 2020 and the run up that it had with all of these giants, primarily driven by Tencent, Bydu, Baba, JD, those names, it almost seemed like last year. or the government, not almost, it was very explicit that the government was going after these companies. And it was just from the U.S.-centric point of view, kind of amazing to watch the government seemingly turned on these companies. Can you explain to us what exactly was the motivation for nuking these companies and where we are today? Are we on the other side? Like, what's going on? Part of the run-up and then part of the meltdown was Archiegos.

You've got this U.S. hedge fund is levered up 10x or whatever. Five of their 10 names were U.S.-China ADRs. And so they were in 10-cent music, which went from like 10 to 30. And you're just like, what? And people are like, well, how does that affect? But because of relative valuation, it affects the whole space. And then when they got liquidated, those names got sold out at 50% where they had closed previously. So some of this was Archiegos, but then, yeah, so then the China Internet regulation, I think it was part of where as an outsider, you'd be like, well, they're trying to kill the tech companies.

But I think what they were saying is that the multifaceted nature of it, where you had multiple regulators moving at different speeds. It was almost like they were like a whackamol. Like every week, it was one name. It was Alibaba one week and then 10 cent the next, then you had the companies, it was kind of an anti-monopoly type of, some of it was anti-monopolis, some of this was anti-competitive rules. Alibaba just started advertising on 10-cent social media platform for the first time because they weren't allowed.

Alibaba wouldn't accept 10 cents mobile payments. So these motes around the companies have come down. And I think it was how they did it. The lack of transparency and communication pushed a lot of investors out of these names. Just said, if I don't understand what's going on, I'll just kick it to the curb. I'll just get out of it. Is there any hope for investors in these companies that the government is going to reverse course? From what we've seen, we're not really concerned about China Internet regulation,

that we think it's been recognized how they went about it was poorly done. There's multiple data points to say that on the China Internet regulations, The worst is behind us. We're probably a little more concerned about U.S. regulations in terms of the potential delisting, where we've taken this law that did pass very seriously, the holding foreign companies accountable act. And we've converted a lot of K-Web into out of the U.S. ADRs because of the potential delisting risk, which we think we'll get avoided. You just don't know if it gets solved at 1159, and as a fiduciary, you're not going to take that risk. So maybe this is a good opportunity to segue to the crane shares, Borcerra, MSCI, China,

A-50 Connect Index, but that rolls right off the tongue. The ticker is KBA. So you mentioned the Holding Foreign Countries Accountable Act, which requires foreign-listed companies that makes them open up their books for audit approval by U.S. regularities, which seems kind of normal, but there's a lot. lot of resistance on, I don't know if it's a government or these companies or whatever. So part of the fear of investors, and I feel like this flares up in the headlines once every six weeks is that some of these ADRs are going to get delisted.

What are the chances of that happening? And in English, what does that actually mean for people that are investing in BAA? I don't know why I just said BABA. Yeah, Baba. Is that I spelled Michael? We've moved. I mean, we don't hold Alibaba U.S. anymore. We owe 9988HK, the Hong Kong.

So I think this does get resolved because I think it's a solvable issue. Yes, China should allow the companies. And it's really the company's auditors to allow an audit review. Is it China saying no, you will not? Okay, but why? Why not just be transparent? I mean, I think I know why, but you tell us. It's because amongst the 273 names, a U.S. listed China names,

you have a small number of state-owned enterprises. So if you think about what's an audit review, Well, it's like, what are the inputs and outputs to the balance sheet, to the net income statement? If you're a private company, what do you care? You got nothing to hide. If you're a state-owned enterprise, maybe that is problematic because maybe you're getting subsidies. So we actually think recently it was announced five ADRs will de-lists from the New York Stockians. They all are state-owned enterprises.

So if the SOEs go away, wouldn't that allow the private companies to adhere to disqualify? global standard. Like, I would say yes. I mean, out of 273 names, the five names that say they're going to delist all are SOEs, five for five out of 273, like statistically. What are the ramifications of a delisting, both for the investor and for the company? It's hard. I think that's the hard part is we don't know exactly how. I mean, we have a little time. The delisting wouldn't actually probably take place until 2024. There was a movement to try to shorten the window, which thanks hopefully wasn't included. Congress didn't take up on it. But ultimately, a delisting could mean that it's a zero. HFCAA was written that the companies can't trade over the counter. They can't go to

the pink sheets. So the companies, small companies would take themselves private. The big companies could push through that many of them have relisted in Hong Kong. So they could just do a forced conversion into the Hong Kong share classes. And I think that's something that, why, again, it goes through. It would be very kind of messy. And I think ultimately, this is a very solvable issue. This is not a hard one. So what's a solution? Well, ultimately, the SOE's listed in the U.S. go away. And then the private companies are allowed to hear to this global standard. There's no reason that they shouldn't be allowed to. Alibaba's old CFO, she used to always say, like, we have nothing to hide. Underboard, actually, they just hired the head of Ernst & Young.

I think it was Ernst & Young, China. He's actually on their board. If that happened, how many U.S. funds are we talking about here that would be impacted? Are there a ton of funds that have exposure to these stocks that would be hurt in a big way? Institutional asset managers, mutual funds, it's very, for us, when we converted, you simply tell your custodian you want to convert. They contact the ADR custodial bank, and it's literally a book entry. It's like, okay, instead of holding Baba U.S., you own Alibaba Hong Kong. Oh, so it wasn't that Harvard project for you? No.

Oh, I mean, it was very, very easy to do. It's a tax-free conversion. The ADR custody bank will charge you like four or five cents a share. The issue is more of not all U.S. investors want to or can hold a Hong Kong share class. So think about like the QQQQQ owns Bado, J.D, and Netties. the NASDAQ 100 isn't going to convert. They're going to be forced to sell those three stocks. It's not a huge position. But think about all different RIAs or family offices or individual investors who maybe can't convert. Not all U.S. broker-deal or not all custodians

allow a for ADR conversion. That's the problem. That's why we've advocated that the window shouldn't get shortened just because there's an operations element that hasn't been figured out. Brendan, does Crane shares have a voice at all? Like, are you guys talking to Chinese regulators about some sort of, like, voice for U.S. securities, for like a better word? We've done both sides, as well as we've spent a lot of time in Washington, D.C., trying to explain to Congress that this bill doesn't hurt China. The Chinese government doesn't hold these stocks.

U.S. investors do? Why would you put two trillion of U.S. investors' savings at risk? When you say $2 trillion, what do you mean by that? That's the aggregate market cap of the 273 names. So this bill was done to hurt China, or the Chinese government. But Chinese government doesn't hold these stocks. U.S. investors do. What do the regulators say when you say that to them?

They would say, well, A, this law was passed by Congress and signed by an outgoing president. So the SEC is simply the enforcement agency. It's not their opinion to opine on HFs. They're the enforcement agent. Gary Gensler has no choice but to enforce it. This was done simply by Congress. And the other argument is, well, these companies were allowed to list here. It's not like they snuck on the exchange.

Every one of these companies was approved to list here, knowing they couldn't adhere to Sarbanes-Oxley, which was passed back in 2003. So this was more of just law. was passed to basically force the Chinese government to do something. And I'm just like, man, my kids tell me all the time, they don't like to be told what to do. That's the risk. The thing about China to me that always kind of blows my mind is how big it is and how it seems like they can kind of pull these levers and make things happen very quickly. So you understanding the situation better than me, if China really said, you know, we want to make the stock market at the forefront of our economy, kind of like it is in USA, do they have the levers that

could pull that would say, like we want the stock market to go up a lot? They could do do that potentially? Well, sort of, sort of. I mean, it'd be like no different than like a J-PAL or trying to jawbone the market. There are government investment entities like they have a social security fund. So back in the summer of 2015 when the market, the mainland market performed very poorly, they increased the equity allocation of the social security fund. They lowered or increased the equity allocation for insurance companies general accounts. So they do have a few sovereign wealth funds that can buy equities. But these markets, Shanghai, Shenzhen, taken together is the second largest stock market in the world behind the U.S. So even though they've got a lot of money,

it's small relative to the size. It's a $14, 15 trillion market cap in mainland China. Why is the GDP of China relative to the overall pie of the globe so much larger than the stock market presence? It's driven partially by China has a socialist element to the country, but their safety net in terms of social security is much smaller than here in the U.S. If you got fired and lose your job, unemployment insurance, it's small. But so the Chinese citizens are really responsible for their own retirement, and therefore they have been very conservative with how they invest. And because of the higher yields historically available in China, most of it goes into bank accounts in the bond market, a bigger piece goes into real estate, and then what's left over kind of goes into the stock market. Now, that percentage of stock

market savings is increasing, but part of it has been in real estate. I grew up with family in Denver. And like, if you've followed Denver for 20 years, it's like mind-blowing, where just the city, like, I mean, from Stapleton airports and now there's DIA and Denver International was out in the middle of nowhere. And now the city goes all the way out. I remember as a kid, we went to see a Colorado Buffalo football game. And between Denver and Boulder, it was farmland. And now, it's a suburb the whole way. But that's Chinese cities. Wait, hold on. I miss this. Which province is Denver in? Yeah. Well, just that these cities get bigger and bigger and bigger. So in China, in 1980, 20% of people lived in cities. Now it's closer to 70%. So if you think about

a city just get bigger and bigger, you're like, oh, like, I'm just going to buy, I'm going to build a building knowing the city's going to, that was kind of the misnomer of the ghost city was like these cities just get bigger and bigger. So it's been a, one-way trade, and... How many, like, Manhattan-sized cities are there in China? There's 130 cities that have more than a million people. What's that for a comparison to the United States? 28 kind of geographic areas.

Okay. Wow. The city of San Francisco is, like, 800,000 people. The Bay Area is 15 million or something. I kind of use the geographic area as opposed to as city. If we're looking at the difference between K-Web and KBA, My way of thinking about it is K-Web is to the NASDA 100 as KBA is to the S-P-500. Am I looking at this right or not? Do you mind repeating that, Ben?

I'm thinking K-Web is kind of like the Chinese version of the NASDAQ-100, and KBA is a version of more like the S&P-500. Is that the right way of thinking about it? I would say so, yeah, that within KBA you have a growth element. So one of the largest EV battery maker in the world, CATL, which will be reporting earnings very shortly. they make batteries for everybody. Tesla, Chinese EV makers is listed on the Shenzhen, but it's a large-cap company, so it's within KBA. Brother, make the case for A-share's. What's going on here? What do investors need to know?

I think it's part of what's really weighed on this disparity between what foreigners think about China and what do people in China think about China. And the Chinese historically are far less pessimistic. And it's not that they don't have access to Western media, which is this kind of constant negative media barrage, it's more they just don't buy into it, that they would say the things that really matter are government policy. And right now, you have China is in an easing cycle. They've cut the loan prime rate. They've cut the intra-bank lending rate. They're easing because they recognize that the economy needs support. And that's a great tailwind for investors.

It also for investors in China, as interest rates drop, the greatest bull market in government treasuries globally right now is in China. Like, I might be the only person in the planet that we have a KBND. We have China government bond things in Fuego that Chinese treasuries have rallied pretty significantly as they ease. Why are they so disconnected from the rest of the world? It feels like there's like a global central bank coordination with the world and then China's on its own island. It's just more than China, the economy rebound.

This is where China is almost like a year ahead of everybody else. They got COVID first. They came out of it first. And now they've got this little bit of a slump kind of post that economic rebound. And some of this is driven by what's happening in real estate. So the government is incrementally adding support. And I think if you think about yourself, with free stimulus money from central banks globally, like we went out and bought stuff.

And a lot of that stuff was made in China. I wonder if my tropical bro shirts are made in China. Most clothing, low-end clothing, not to point the finger at your. Sorry, low-end clothing has moved out. It's because China's gotten too expensive. All right. We might have glossed over the fact or taken for granted that people. people, have any idea what we're talking about when we say A shares. What are A shares and how

difficult or easy was it for you to access that market and tell us how you're doing it? Canedly, like part of why I quit my job to come to Crane shares to be part of making John Crane's vision investable was I had this kind of passive background. I've worked for I shares for many years. And so John had been in China and saw how new China economic sectors were coming about, and that was K-Web. But then he saw living in China, how they were opening up to foreign investors. And so when I met John in 2012, he simply said, you've got this Shanghai, Shenzhen market. It's not owned by any foreign investors. But these reforms are going to allow this market to be owned by foreign investors. So I thought about it just from a passive investors perspective,

which is if you've got the second largest stock market in the world, and they're giving this access, then it can get added to indices. And if you think about this happened with Tesla and the S&P 500, what happened before Tesla got added to S&P 500? You're like, oh, my gosh, SPI, IVV-V-O have to buy it. Like, why wouldn't I just buy it before them? And that's kind of what I thought about this, what became KBA, was if we can create MSCI's definition of this Shanghai, Shenzhen market, in advance of it being

added to indices, that's a no-brainer. So MSCI dictates 15 trillion of active and passive assets. About $1.5 trillion is an EM, and the stocks in KBA would be about 20% of MSCI emerging markets. So 20%, 1.5 trillion to about 300 billion of inflow. That was my thought, was that you had these stocks that weren't part of a major, major index could go into them. That's because the A shares were only available to Chinese investors? Correct. Correct.

So where are we on the timeline of that then? Is there any action happening then? In 2019, MSCI announced that they would add the Chinese, A shares to their indices, including EM, but they only were going to add 20% of their potential weight. So if you look at MSCI China's day, it's like 700 stocks. 500 of them are Chinese A shares that make up 8% of the fund. And so you would say you have 80% to go. And I think because of the trade war and tech war, there's some other reasons why. MSCII hasn't added them kind of technical stuff, but I think they've stopped this inclusion.

So we're only 20% there. Brendan, I know you don't have full transparency into who the holder of these products are, but any sense of the demographic makeup of your investors, is that family office? Is it RAs? It's all of the above. I mean, I would say getting access to these names or getting access to Alibaba in Hong Kong. That's why people are hiring us. So that could be RIAs.

It could be wealth management firms. It is institutional. It's pension plans. We've got a big pension plan that they own KBA because they don't want to go through the rigamarole of getting access into mainland China. They're just like, hey, with one, just type KBA, and you've got access to these stocks in Shanghai, Shenzhen versus trying to operationally get access. So it's...

Why futures? We need to hold the physical stocks. Oh. All right. So delete that question. What's interesting about it, Michael, is that MSCI historically said, when they did the 20% inclusion into MSCI emerging markets, MSCI China, these stocks we hold in KBA, they then said, well, there's three things we want before we'll get this inclusion going again. And one was to get an MSCI-ChinaA futures listed in Hong Kong. That actually just happened almost a year ago. It happened in the fall of 2021. And two, they said, well, Hong Kong has a different holiday schedule than mainland China. So that limits the number of days to be able to get your money into and out. And they just said that they changed those rules that happened a week ago. The third issue for MSCI on why they stopped this inclusion.

And again, two out of three are done is Chinese stocks, and the stocks in KBA trade T plus zero. So what does that mean T plus zero? Is that instant settlement? Instant settlement. It's one of the misnomer's that you actually can't really day trade in China because you owe the money at the end of the day for the stock you bought that day. Now, why that's a problem for MSCI is if I'm an asset manager and. I need to buy China and say sell Europe or sell U.S. I don't get that money until T plus 2.

So for index managers who have to buy and sell on the same day, China being T plus zero is actually a problem. Because you can't, I'm going to increase China, which means I have to raise the cash, but I don't get that cash for two days. But for China, I have to settle at the end of the day. So China is actually too fast relative to other markets. Brendan, where do we send people to get your daily insights?

We write China Lastnight.com, so it's just a free website. You can sign up for daily or weekly, for most people knowing daily is not necessary. That's a great innovation. I feel like more places should do that. The daily versus weekly option? I like that. Optionality. Credit to you.

All right. What else? And then on crane shares.com, you can sign up for, so the blog, the blog, we don't talk about the ETF tickers. It's just more of what's happening in the market. And then for very spun specific stuff, on crane shares.com, you can sign up. And we always lead with the research. So it's not like you sign up for crane shares research. You're getting like this hard sell. It's you got to earn that trust. And if you come on with a hard sell, that turns people's off. So like, they're not going to subscribe. All right, Brendan, did you have fun, most importantly?

I did. I did. I wish it was in person. I know Michael, I was feeling bad. I know the Red Hole 12th has a lot of affinity for Massapequa. Oh, I saw the news. I saw the news. Yeah, yeah. It was too bad. The Little League team. But they did great. They did great. They did great. All right. Well, listen, Brendan, we appreciate your time. Thank you so much for coming on, being a friend of the show, and we appreciate it. No, my pleasure. Thank you. Remember, check out crane shares.com for all their funds and sign up for Brendan's newsletter. Send us an email AnimalSpiritSpot at gmail.com.