Animal Spirits Podcast - Talk Your Book: Options Are Eating the Stock Market

Episode Date: January 10, 2022

On today's show we had Paul Kim from Simplify ETFs back on to discuss how RIAs are dealing with a low interest rate environment, dipping your toe into crypto, using options and leverage responsibly in a portfolio 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

Today's Animal Spirits is brought to you by Simplify Ascent Management. To learn more, go to simplify.us.com.us, yes. That's right. Go to Simplify.com. 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 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 Ritthold'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. Paul Kim was back today. Last year, Ben, was a ridiculously successful year for thematic ETF issuers, which is what I would classify, I guess Simplify would certainly go in that bucket for sure. Last year, Tom Sarah Vegas had this killer chart showing rolling 12-month ETF flows. And it's Vanguard, it's State Street, its eye shares, the big three going vertical. But coming up the rear, the rest of the industry is on fire. You see this pink line, Ben? Which that's these thematics probably. That's the thematic. So the FT also did a piece recently about this talking about

thematic ETFs have almost quintupled. The assets of thematic ETFs have quintuple to $227 billion. The number of ETFs globally jumped by a record 710 last year. And there's a killer chart showing thematic, showing like the assets in ETFs with thematic and leverage and the inverse and an absolute explosion. So thematic is the new active. Yeah. Yeah, yeah. That makes sense. So we've talked to other places while they're doing this. But Paul from Simplify told us that their main strategy, basically their only strategy of getting a new asset is working directly with RIAs, which is smart. I think didn't you calculate the amount recently how much RAs control now?

15, 20? I can't remember. You had the number recently. It's a large number. It's very many trillions, we'll say. Once you guys pass 10 trillion, it doesn't really matter. It's somewhere over 10 trillion. That's in the ballpark.

But we're seeing these ETF providers saying we know RIAs are looking for solutions, especially we've talked about this before. You have bonds here. You have stocks here. What goes in the middle? I need something in the middle, whether it's yield or lower volatility, whatever it is. I need something there or my clients want something there. And a lot of these new ETF providers are saying we can help provide that with some of the new tools we can now infuse into ETFs. We spoke about on the show with Paul. This was interesting. So their SNP plus Bitcoin ETF gives you, bank, correct me from wrong, 100% exposure to the S&P. Correct. And it sprinkles on 10% exposure to Bitcoin via GBT, right? Yes, correct. That got to over $100 million in assets in, when did that launch? In a hurry. Yeah, it was very quick.

Anyway, they're doing tons of cool stuff. I think you're going to enjoy this conversation with Paul Kim from Simplify. Also, Paul has a webinar with our friend Corey Hofstein next week. I'm sure you could find it on the interwebs. Go to Simplify.com. Follow Corey Hofstein on Twitter. Thank you, Paul. Please enjoy this conversation with Paul Kim from Simplify.

management. We are rejoined today by Paul Kim. Paul is the CEO and co-founder of Simplify Ascent Management. Paul, thank you for coming back on today. Pleasure. It's always a pleasure to talk to you guys. And there always seems to be something we get to really, really go down deep into. So we'll see what that is today.

Let's start at a high level. First of all, congrats on all your success. The first time you were on the show, it had to be sometime in last year. Did you start last year? Our first ETFs launch right around Labor Day in September 2020. Okay. And so this is our first full year. We joined you guys pretty early.

I came on pretty early and you are actually very instrumental in getting our trajectory off the ground. Awesome. Love hearing that. So, all right, as of January 3rd, $1,75 million. That is impressive. How did you do it? A lot of luck.

It turns out launching a startup fintech company. during a pandemic is a good thing, particularly in reaching our core channel, which are the RAs. And instead of trying to fly out and have in-person meetings with a couple dozen every month or so, we got to literally speak to hundreds of advisors generally working from home. And everyone downloaded Zoom or something equivalent. And so that sort of allowed us to reach and find our client base very quickly. We also benefited a lot from just the macro environment. of low yields, a lot of concern about the downside, higher volatility. So offering the type of strategies we offer was very timely. And then a lot of it's just we are a bunch of veterans from

this industry. So we had existing relationships and all that came into play. How about on the firm side, have you grown that way too where you're hiring people remotely as well to grow the team? Yeah. We're native. I call it native slack. And so even though we're just about 20 people, we're spread out all across the country. We have an intern in Canada and we have a developer in Spain. And so there's no one office or one location. We're truly geographically agnostic. So Paul, you guys have a different sort of bent to you. Why don't you just start at a high level like the advisors that are coming to you. What are they typically worried about? Why do they find simplify as a home for a part of their asset management solution? I think we're addressing a pretty

common set of pain points. So a lot of concerns. Just generally think about all the roles that bonds have played in portfolios, i.e. diversification, capital preservation, income, just generally any sort of those type of pain points, given the sort of falling efficacy of bonds, we've been a natural sort of solution there because we focus a lot on option embedded strategy structured product like stuff. So I think that's been the main, but also just having a really strong sort of content led digital marketing platform where we have a lot of thought leadership. And it's felt a lot like even though we're small, we're a fairly loud voice in sort of the FinTwit world. We have some really big names like Mike Greene and Harley Bassman who definitely have their

fan base. So being able to help. Mike likes to kick the hornets nest. Yeah, every now and then. But hey, that's part of why you could sort of aggregate fans. You sort of have to have an opinion. And I think that's the point to not be sort of neutral on every aspect and tell two sides to everything, but truly stick your neck out on some topics and have some conviction. And I think without dictating what to do, but just really give sort of opinions and really well thought out use of the investment world. And I think that sort of missed. seeing opportunity for larger asset managers. We fill that. We fill that as a smaller shop by having the ability to take risk, having the ability to give opinions and convicted views on the

market. Let me say kudos to you guys, because I am probably on the other side of a lot of Mike's opinions about how markets function, a lot sort of stuff, even though he's much smarter than I am. But it's very rare to see asset managers actually employ somebody like that who's not taking both sides of everything, who does have conviction. So obviously, the proofs in the pudding. So good hire and kudos to you and him for doing that. It's a double-edged sort. So in the beginning, you want to raise awareness by having opinions, but then the business risks starts dominating as you get bigger and then people start thinking only the left tail. And so it's interesting. And that's the classic sort of cycle. People take risks and innovate

and launch new startups. And over time, you get fat and high margin and people will start worrying about defense. When advisors come to you, do you find you talk about replacing bonds, and some of the things that they've done in the past. This is maybe kind of semantics, but our advisors come to you and saying, we're taking some of our bond piece and putting into your funds, or are they saying we're having this new alternatives bucket? This is maybe just naming, but I think it's interesting to think how advisors think about this. So are they taking, hey, we're going to take 5% from stocks and 5% from bonds and try to find some middle ground here. Is that kind of how they view you? Yeah. So for those listening, I'm nodding my head.

It says, yes, yes, yes. It's sort of like you have the sort of 60-40 world dialing up to 70-30. You have sort of the 60-40 world saying, I'm going to fill my pick-a-bucket with something else. So you just have a mishmash. I think an alts generally are starting to become interesting again, both because there are more products out there, regulatory changes, including the stuff that's benefited in the ETF world. But generally, inflation perking up and sort of the one-sided tailwind for bonds going away, I think people are looking for alternatives literally. And so I think all of those things are good tailwind.

for us, Elise. I'm looking at your lineup. What's the risk parity treasury ETF? I don't get into that one, too. Okay. Paul, explain. It's both simple and very complicated. So depending on how you use it, if you think about it, ultimately it gives you roughly 20 years

of duration, which is roughly the duration of a product, the 20 plus year treasury ETF, TLT, something like a TL, exactly, perfect. So that duration, but instead of taking it into 20 plus year, part of the treasury market, you aggregate that same duration and stick it in the 10-year space. So you're effectively levering up treasury exposure, getting to the same duration equivalent, but you're going to a better part of the market in terms of carry. What tech is carry? Carry is yields plus roll down.

And so that sounds like it could get complicated if you think about it. But the basic idea is just like commodities have shapes of backwards. Cotango, the yield curve itself is a curve. And when you ride down that curve in a positively slope yield curve, you actually get incremental returns on top of the yield. So a 10-year might be yielding 1.7 percent, but the roll-down could add another 100 basis points on top. And all of a sudden, a treasury in the 10-year spot looks pretty darn good. And levering that up and getting both instead of getting the same sort of yield way down the yield curve and not getting any sort of rolled down yield pickup that's kind of an interesting play that's sort of the big picture

but how it's used well you can sort of say well if you're going to lever up the 10 year all of a sudden now if you had the same dollar of exposure in a 10 year bond through sort of a cash bond ETF like iEF you don't need the same dollar anymore if you're going to buy a levered treasury ETF, you could then put a third of your money into that and you freeze up some cash, do something else. So this is similar to like a 90-60 portfolio where you can get 100 cents for two-thirds of the exposure. Exactly.

Is that portable alpha? What do they call that? Exactly. So it's literally the basis of risk parity. Someone levered up treasuries to get them to be a volatility equivalent of equities and you now have risk parity. So there's that approach. There's also just, if you're a believer in the.

duration, you want a sort of a hard duration hedge inside of a portfolio. You want to protect against disinflation or next severe recession. Again, the 10-year is a very attractive place because the rates there tend to be very sensitive to macro changes, more sensitive than the long end of the yield curve. And so from a strategic asset allocation perspective, it's really interesting as well. What are some of the misconceptions about using leverage with fixed income? Because Michael mentioned the 90-60 funds. So I think there's a lot of people, there who say, hey, I heard a quote by Warren Buffett once, and he said leverage is going to kill me or something. What are misconceptions about that? Like, what's the cost to fund something

like this? Obviously, it probably changes a little bit. And what are some of the people not understanding when you use leverage with fixed income, like, about stuff that can be positive and not just negative that people think have the connotations? Leverage is like to a chef, a really sharp knife. You could chop a finger off, but if done right, you're going to use it very well. And so part of that is sort of the appropriate amount of leverage. If you take a very volatile asset class and lever it up, you're basically asking for trouble. But if you take a very low-val, very sort of anti-correlated typically exposure, and you lever it up, all of a sudden it could actually lower the risk for your portfolio or could free up capital to something else. And so I think the appropriate use of leverage is important.

And the 10-year in our view is a very attractive part to lever up. And from my old PIMCO days, PIMCO used to do this all the time in the Eurodollar space, which is really short duration stuff. And they would use that to sort of make concentrated bets on Fed rates and things like that. And so levering up fixed income to hit certain portfolio objectives, to me, if done right, is a very, very attractive source of leverage, very cheap financing. You're getting T-bill rates in this leverage. So you're paying nothing to borrow effectively. Effectively. So if you're going to borrow and lever up a portfolio, you could go out and margin your stocks,

that's a little more expensive. You go to the Treasury or the S&P futures market and the embedded financing rate is a lot lower. So your source of financing in terms of using any leverage is important. And this is attractive from that perspective as well. Let's shift from Treasuries to crypto. I have to be honest, I was surprised at how quickly this product scaled up to $100 million. So this is your Simplify U.S. equity plus GBTC. The ticker is SPBC. So what you're doing here is you're taking the S&P 500, marrying it with crypto via GBT and a wrapper, and what exactly else? What are the mechanics inside the phone?

So it's basically 100% SPX. It's 100% SMP 500, some of which is coming through an SMP futures, which is, again, very cheap findings. financing, most of which is coming through dirt cheap S&P 500 index ETF. And so you get your 100% SMP, and then you layer on a 10% allocation to, in this case, gray scale. One, the SEC allows it. But two, I like personally the spot price, quote unquote spot price of gray scale versus the role considerations of Bitcoin futures ETF, but that's personal preference. And that combination effectively allows someone to get crypto exposure.

through gray scale while also not monkeying around with the current asset allocation. It allows an advisor to get their clients off zero, get them into some sort of crypto exposure within their portfolios, within an ETF, listed ETF that allows them to run through all their sort of regular settlement and allocation processes and work inside their current system. So it's sort of an on-ramp, if you will, using what's at least an approved exposure to spot Bitcoin prices and gray scale. It's got challenges, right? It's expensive. It's trading out a discount. But that could be a feature if you're buying something at a discount and ever sort of corrects or if it ever trades on a premium, something like this ETF could go out and actually

buy at NAV. And so you have an opportunity to arbitrage that. Michael and I have talked about this for a while. Someone who understands market structure way more than we do. Why has this not been arbed away? Because it's still, it's been at a 20% discount for a while now. And I would assume It keeps growing a little bit, slowly. I would assume if Grayscale is ever allowed to turn this into an ETF, that premium has to go away day one. And maybe this is just the fact that the market is saying, well, we think it's going to be a while until there's a spot Bitcoin ETF. But why have some hedge funds not coming in to ARB this thing away? So for a while, especially when it was out of premium hedge funds were the ones throwing money at it to take that arbitrage.

But now that it's at a discount, there's really no way to close it. It's think of it as really a closed end fund. closed on funds trade up persistent premiums or discounts all the time and there's really no way to close that nav it's just a theoretical value it is mark to market but there's a price wherever it trades and right now there's more obviously supply than buyers and there's no way to sort of arp that away because there's no way to take out shares or assets from grayscale for now which is their argument for making this into an etf because you would then close that discount and turn it into more of an open-ended structure. This seems complicated. How do you run a closed-end fund inside of an ETF? Like, the fact that you're able to do that sort of blows my mind. It's a listed security.

I mean, it's just a traded security. So it's got a price at any given time. Think of ETFs that buy closed-end funds or MLPs or any sort of other securities. GBTC is a security you could buy inside an ETF. So nothing to it? Not for us, no. Yeah, Michael, they got this. You mentioned that...

It's up and running. With like this 10% allocation as an offset, this is a way for advisors to kind of put their toe in the water with crypto. In your conversations with advisors, do you think that they're asking for more? Are they saying, like, we would love to have more of this and you go up to 30% or 50%? Are those conversations you're having? We've had conversations where people said, why don't you make this higher? But it's a regulatory block right now.

So the SEC has permitted up to a certain amount. We're within that boundary, and it's really not permitted yet. So what's the cap that they have on it? Last I heard, it's 15%. So it works well for this perfect strategy. So we rebalance whenever we come close to 15%. That rebalancing, by the way, of a high volatility asset class is actually a feature if you have rebalancing.

And I think one of the values here is sort of anything that's relatively uncorrelated or even modestly correlated, but has higher volatility. If there's a rebalancing mechanism, it could be helpful. So you don't really need to rebalance on a monthly base or something. You can do it enough because this thing moves around so much. Yeah. Interesting. Can we talk about like this weird sort of dynamics within the market that people are so worried about volatility and the next shoe to drop and the Fed raising rates and inflation and mostly all fair and valid concerns? and yet the market just doesn't seem to give a shit. What will change the dynamic of this relentless bid, if anything?

Is it just interest rates? Where do you think the rubber meets the road? Certainly interest rates are a big part. It's starting to wake up people. Interest rates tied to monetary policy, not just the rate itself, but the fact that the foot on the gas isn't necessarily going to the break, but it's starting to lift. And so slowing down, tapering, as well as,

ideas about what to do with the current Fed balance sheet, let it leak in terms of not rebuying securities on and on. There are all sorts of nuances here that go into roughly tightening. That certainly will have a massive impact in our view. But the other is just market structure. So the increasing role of the dominance of passive actually has changed the market structure. And my colleague, Mike Green, has spoke years on this topic. It's sort of like you have this essentially non-economic.

that whenever money comes in, you buy, and whenever outflows come out, you sell. And that has been a perpetual bid in the past couple of years as just everything from target date funds and whatever. You just have a bunch of investors buying. And that constant drip is driving the price up, and it's the marginal price. But we've seen it. We've seen March. We've seen certainly earlier sell-off. Eventually, something's going to trigger it. No one knows what, but the market is very fragile. It's got a persistent positive bias, but it's also got a fat left tail that we know is out there. We don't know when. What if the market's anti-fragile, though? What if this just persists for a lot longer than we think? Like, what's going to all of a sudden cause a reversal of

flows? Michael is ready to write his own Dow 36,000. It's going to like Dow 72,000. Well, the problem is this. Anytime you have sort of a persistent drip, you're going further and further away from any intrinsic value. It's just a feature of flow. And if something reverses, the price goes to wherever it is, and you don't mean revert back. There's no intrinsic value. There's nothing that says you have to go back to X dollars on our stock. Now you have to wait for time and persistent flows to sort of drive it back up. So prices have memory to them. And I think if there is a crash, there's no guarantee that you're immediately going to get back up there. You need another catalyst to then yank you back up, or you just got to wait the time.

Not to debate Mike through this podcast via you. But I would just say, like, the flows didn't reverse in March 2020, which shocked the hell out of me. They kept coming in. But it was really the Fed. I remember, you guys probably remember those days, too. It was really the Fed stepping in when the Treasury market blew out. That's when I think everyone freaked out. And the Fed coming in, and it wasn't even right away.

It was like the Fed coming in and saying, we're coming in. And like it felt like an eternity at the time, finally the market started reversing. Yeah, we were like, what are you waiting for? Yeah, yeah. And so I think that was it. It wasn't flows. It was truly parts of the market went essentially bidless. Well, that's a fact.

And that's my point. It's sort of like when there's no intrinsic value, there's no natural voting machine out there saying your traditional active manager saying this stock is worth $50. When that diminishes, it's the marginal price. Who sets the marginal price? It's just whatever transit. This idea that there's no active managers, there's still a shitload of active management. Yes, for sure.

But they're the actual source of funding for the flows going into passive. It's a mirror image. If you ever see the active equity mutual funds relative to ETFs, it's just a mirror image. Maybe the point is that it doesn't take as many active managers to crash the market anymore because they're the ones setting the price effectively. It's more like passive and one could even go a step further. options, to delta hedging and things, the market structure and the drivers of pricing are these sort of market structure parties now. And so... Well, yeah, did it surprise you how much these

people on Reddit were able to effectively push the price of these stocks up by buying so many call options? How was that able to happen? You have a very thin float. You have a dynamic all over the place. Part of the reason that stocks have been creeping up is the popularity and the prevalence of stock buybacks. So you basically have less supply of stock, either through companies buying back stock or stocks going inside of a vanguard or BlackRock ETF and being essentially locked up. And so the marginal float is shrinking. And in some stocks is very meaningful. Apple's bought like 30-something percent of their stock back and stuff. So at some point, you have less flow, literally, and you have fewer marginal players that do anything but

just go with literally the flow. And so when you have a very tight group of people who do very similar things, it actually magnifies their impact. And then when you do it on an option market where the market makers often have to buy eight to ten times the underlying to sort of hedge those options, like a dollar from a Reddit investor or a speculator probably is massively magnified. And that's what you have seen play out time and time again. Even though I think that the index flows argument maybe is overblown, it cannot be debated that market structure has changed radically in the last few years and guys like Mike and Corey and a lot of other like super smart nerds. And I mean that sense of engagement on Twitter,

like talking about the structure and gamma became a thing. The search terms for that spiked in the spring of last year. So there's no doubt that index funds, even though I don't think they're propping up the market, have like sort of flow dynamics. where they're shrinking the amount of shares that are actually being traded. There's no doubt. And so this options market, people have described that as sort of the tail wagging the dog, can you just explain that? I know it's a complicated topic, but in a way that the layperson might be able to understand.

Think about anything in life, politics or anything where a very concentrated and opinionated vocal group can dictate the direction of policy or it's basically that. So when you have a very concentrated and very sort of opinionated group voting on a relatively thinly traded stock with leverage. With leverage, you're going to massively impact its price in today's market because most market participants literally just say, I'm not looking at my portfolio. I bought the 2050 target date and my paycheck goes into it. And every month, I had a couple more shares of this mutual fund. That's literally how the market's bifurcated now into, and the active managers are often not playing in those names, and they're looking and buying the value names, and every month they come in, there's an outflow, and they have to sell which of our babies do we throw out today. And that dynamic is, to me, at least, very much driven by the fact that you have the dominance of passive and the growing popularity of options.

option traded volume recently I think last week surpassed underlying equity trading volumes for like crazy it's crazy so it's not so much the tail wagging the dog anymore it's sort of like the dog it's a junkyard dog now it feels like and that's the market because you have a entire like land of just kind of neutral beta in calm indices and then you have these concentrated sort of battles over individual stocks with hyper leverage through options and things and so that's kind of playing out in my view at least. Is there any way to take advantage though for professional investors? Will they strike back eventually? Melvin Capital got crushed last year. And that was like everyone said, oh, the little guy beat the hedge fund or whatever. Obviously, there was hedge funds involved on the other

side too. But knowledge builds in the market and effectively people adapt and move on. Like, that'll happen here too. How will people start taking advantage of this? So market makers, I would say, have loved it. Implied vols go up everywhere. And the price for that option is way too high for the actual volatility that you realize. In aggregate, it's been a boon. It's been great. For the option sellers? Yeah, for option sellers. I think that's part of it. And part of it is also just things like skew in the option market. So downside hedging costs a lot more than it does historically. People are fleeing towards different ways of protecting portfolios, but they're just increased domain and reliance on options to do stuff today than a couple years ago.

And so the pricing and the returns you could get and the premiums you could collect by being thoughtful about where to sell volatility and where to buy volatility, it just becomes a much more interesting opportunity set. I think I talked about one of our ETFs on our last spot, but like the volatility of premium, in my view, is one of the most attractive premium today. You could generate yields mid-teens or higher with very modest risk by taking advantage of that. And so there's all these things. and you've seen the growing popularity of ETFs that have like covered call strategies. And they're- Oh, this is ESVAL? Not just, yeah, that's for our ETF, but covering call strategies from competitors, throwing off 7 to 10 percent yields and delivering positive total returns.

It's great. It's an opportunity. But opportunity comes with a lot of risk. So it helps to at least have a view of what's driving some of these returns and premium. Actually, can you talk about this because we get so many emails on like QYLD as example. I think that's the NASDA covered call strategy. People see the dividends. They see the income. It's a percent a month or whatever it is. Can you talk on why investors are so starved for that and maybe some alternatives that you guys would recommend? So when you have so many

users of options, again, the price of options go up. There's a significant demand. Now if you're the provider, the supplier, whether you're the market makers or you're writing these options, there's a significant premium to be had. But it's not in every exposure. I would argue that in the S&P space, for example, the covered call sort of trade has become so crowded that you're really not getting much upside. There's hedged equity strategies out there, and they're in the tens of billions now. And so they're writing so many calls that the premium has completely shrank. And what used to be profitable insurance selling has turned quickly into sort of negative expected value. again, market structure and the role of different pooled money. In this case, buying calls is actually

a very attractive trade. But in some other betas where you don't have these dominant sort of call writing players, there's a ton of implied vols, a ton of premium to be collected. And so depending on the strategy and depending on what you're selling, it's a really interesting source of income. I'm sure you've gotten plenty of questions from advisors on, I'm looking to hedge inflation. My clients are worried. Is there anything you can do there in the options market? Is there any way to make like a tips type of strategy more efficient or are options in fixed income just a totally different ballgame? I can't speak to it because we have some strategies filed, but we're working on ways to address not just inflation, but really the two

dominant risks in fixed income. It plays through inflation on the interest rate side, but it's duration risk. That's the dominant one. And there are ways to hedge that already. People are hedging in. We have a hedged interest rate strategy as well. The credit side is where I think people don't really have a lot of ways to mitigate. There's no defaults anymore. We're fine. The Fed's got back. Exactly. Exactly. So CDX relative to what they pay, like buying SMP puts, they're expensive and they don't really pay very well unless you, again, know what you're doing there. It's really hard to sort of generate any meaningful protection. So we have a bunch of stuff in the R&D bucket that we're trying to

address there. But I think that's sort of an opportunity set. Fixed income is a big So the idea there is that a lot of the credit stuff really does sell off when there's a sell, like they have more of a risk on, risk off. People quickly forget. I mean, if you remember back again in March, high yield sold off in the high 20s. Corporate bonds were down 20% in a month. Yeah, exactly. Investment grade bonds were down in the 20s. And so people forget that and or dismiss it as a one-off, but you go back to 2008 and high yield also sold off in a similar amount. So you truly get almost equity-like risk, and for what? Today you're getting 4 to 5% yields on high yield. That's a very asymmetric, and I would think unattractive trade, but it's an opportunity

for someone who's able to sort of navigate that. So, Paul, as we come to a close, a lot of the stuff that you're talking about is super interesting. I'm sure a lot of advisors are listening right now and are thinking like, all right, cool, but like, how the heck do I even like learn about what? Do you have educators, for lack of a better word? If somebody wants to call Simplify, how do they get in touch with you? Well, come to our website first, www.Simplify.us.

And we're starting an ETF model, I guess. We're providing models, yeah, to help people, at least from a paper perspective, see what these look like. We're working closely with Corey on some of his models. And so we'll work with Thought Leaders to sort of create models together. But a lot of it is that. It's sort of like, okay, you guys are R&D, mad scientist, and you're coming out with these innovative things.

but how the heck do I incorporate it into my practice? How do I teach my clients or at least educate them enough to sort of sit through volatile periods and things like that? So all of that, I think is part of the education. But the need and the pain points are high enough where I think we're seeing enough advisors start to at least look around and do the due diligence. And that's been fun. Well, Paul, thank you for coming on. It's a breath of fresh air. I love what you guys are doing on Twitter. There is enough people out there like us buying Vanguard, buying BlackRock. So it's nice to see people having some opinions and all that sort of stuff. So thank you for coming on today. Thanks so much, guys. Thanks to Paul for coming back on. Remember, simplify.us to check

out their ETFs. Send us an email, Animal SpiritsPod at gmail.com. And we'll talk to you next time. Thank you.