Animal Spirits Podcast - Talk Your Book: The Commodity Supercycle

Episode Date: June 4, 2021

On today's Talk Your Book we spoke with Direxion's Ed Egilinsky about the potential for a commodities supercycle and why it makes sense to be tactical when it comes to commodities exposure.   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 Direction. Go to Direction.com and look for the Com ETF, C-O-M, Direction Ospice Broad Commodity Strategy ETF. We are going to be talking about that today and the potential for a commodity super cycle. So again, go to direction.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 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 Ritt Holt's wealth management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Ritthold's wealth management may maintain positions in the securities discussed in this podcast. All right, Ben.

Commodity Supercycle. How come commodities have their own cool names for everything? Like commodities have junior gold miners and junior silver miners, and then they have super cycles. Stocks don't have super cycles, right? Commodities are the only thing that can stake their claim to super cycles. Well, stocks have intraday super cycles. AMC comes to mind. We've written a lot about commodities in recent years, and they've had a really tough go at it. And my biggest conclusion from studying the history of commodities returns is that it's not a buy-and-hold type of strategy. You have to be tactical probably because the long run gains for commodities. I just did

a piece on this last week. Deutsche Bank did a 200 plus year history of markets, and they had commodities data going back like 100 years. And on a real basis, commodities lost over the past 2050, 75, 100 years or something to inflation, which I actually look at as a good thing because it shows we're making progress in technology is making these things more efficient and better. But that doesn't mean you can't make returns in commodities because there obviously are times when commodities have these huge booms. So I think it's just you have to be more tactical in that space or hit it at the right moment. Yeah, but what about the argument that that's one of the purposes of holding commodities within a portfolio is their lack of correlation with stocks, with bonds, with cash,

the permanent portfolio, for example. One of the reasons why it works is because they work at different times. Well, gold is they, that Deutsche Bank one, I'll link to it, they also broke out gold and gold had positive real returns over time. So I think gold is, it's a whole other animal because it's part commodity, part currency, part whatever money. I wish I'd like this before I'm asking this question. What have flow's been like into commodity funds? Well, we get into a little bit on this podcast, but I'm sure they've been with Ed, I'm sure they've been taking up a little bit in recent months because commodities have finally done well. But I do, every year I do my Acid allocation quilt and update it?

They've been near the bottom for the last very, you know. 10 years or so. So this run they've had. So now everyone is asking, is this the commodity super cycle? So we spoke with Ed Igolinsky of Direction, and he's making the case for it. I was trying to take the other side and say, what would cause you to make this not the case? But anyway, it's interesting because it's been so long that I think because they have these boom bus cycles, I think everyone thinks anytime there's a boom, it's going to be this super cycle.

If there is a commodity super cycle, I'm open to the idea. I don't know that I'm there yet. What stocks are going to benefit? Materials. It's going to be the boring stocks pretty much, right? The ones that haven't been doing as well. Energy. Take a look at Alcoa. Okay. I'll take your word for it. I don't know what I'm going with that. Just take a little. Materials, energy, all those type of stocks, obviously the miners and those types of things, those commodity products. So industrials, the company's selling the shovels. Yeah. But the reason I brought up the tactical thing is because this direction actually has a P.E. in their index that is tactical in nature, which I think makes, actually makes sense in this space. So we're going to get into that and more with Ed Igolensky of Direction. We're joined today by Ed Egelinski. Ed is a managing director. He's the head of sales and

distribution and alternative investments at Direction. Ed, thanks for joining us today. Yeah, thanks for having me. All right. We're going to talk all about commodities today. And I think a good place to start the discussion is with the I word inflation. We're do you think we are today? I mean, clearly there is inflation. I think few people are denying that at this point. But the real debate is, is this transitory, like the Fed says, or are we entering a new and dangerous regime? I think this is the great debate. The economic data suggests that inflation is probably going to have some legs to it. And of course, the Fed's going to try to talk down inflation as higher rates are negatively going to impact debt payments. But when you look at the recent

GDP, PMI, and the PCE that just came out, very strong April numbers. And Comani price inflation is already here. Raw material prices are at all-time highs or right off of them in the case of lumber, steel, and copper. And now you have wage inflation, the unintended consequence of the greater unemployment benefits and the scarcity of employment now in terms of businesses trying to find employees. So you can have that as a wild card as well. But when you look at it now, the government continues with this mega stimulus and infrastructure spending initiatives. You have records spend in debt, money supply at highs. This creates pressure also on the U.S. dollar. And you're going to have a tailwind for commodities as a result because most commodities are priced in dollars. So what's

the conclusion here in that long-winded answer? Yeah, what do you try to say? Inflation is stickier than the Fed expects. Interesting. So this is like a philosophical question. but can commodities themselves cause inflation or are they just a symptom of people trying to get ahead of this thing? It's a good question. I think they mutually coexist. When you have a situation that COVID created where you had supply constraints as a result of that, and then as a result of the economy shutting down, that pent up demand that's starting now again, as a result of that, that is going to create some inflation. So really, when you have, have these type of supply constraints that we've seen. I think that's going to lead to some level

of inflation. I think it's going to be longer lasting than people think because I think that reopening of the economy is going to be robust. And as a result of some of the production cuts created by COVID, you definitely have some supply constraints that continue. And I think could be, like I said, longer lasting. So PCE, which is the Fed's preferred metric, rose 3.6% year-over-year, highest since 2008. We have to throw in the grain of salt here that year-of-year numbers are what they are. But still, we're saying this, it doesn't matter if you use year-over-year, month-per-month. Pretty much every metric is saying the same thing right now. But the Fed doesn't seem to be in any hurry to raise rates. In fact, one of the differences

of this regime is that they're going to allow it to remain elevated. They want to look at the average over time, not just pump the brakes too early. In what's in a sense, area could you see them doing an about face? Like, is there a line in the sand or would it just have to be a confluence of events? What's the line where they say, all right, it's time to raise rates. We're too far behind. I don't see it happening in the foreseeable future because they have the fluid COVID situation that they could fall back on. But if you do see the 10-year treasury starting to creep up to 2% and to possibly go as high as the pre-pandemic levels of 2.5%, it's going to be tough for the Fed to ignore.

I think the biggest surprise of all this is that demand was so strong throughout a recession in the economy stopping and supply obviously was the problem here. So let's say we put our crystal ball on the table and 12 or 15 months from now, we start having some more chips and they're able to make more cars and lumber is not a problem anymore and they're able to build some more houses or demand sort of meets with supply there. If we get some of these shortages figured out in the next 12 to 18 months, what needs to happen for inflation to actually keep going. Is it a psychological thing? Or is it just, like you said,

wages actually increasing. And that sort of is the next baton to take the handoff. Well, I think it's a combination of things. You still have the mega stimulus going on that's leading to inflated prices, whether it's monetary fiscal stimulus or infrastructure spending that continues to go on. So when you look at it right now, there's some short-term trading opportunities, direction partly is known for its leverage in inverse ETFs, which are designed for very active short-term trading. So some of our clients right now as a result of what's going on with infrastructure are trading some of our bull products like triple leverage industrials, DUSL, or transportation, TPOR, or home builders, like you just mentioned, which is

the symbol nail, N-A-I-L. Oh, man, that's a great ticker. Yeah. Exactly. Hammering in the nail sometimes. But that also is what we're seeing now. And also from a short-term trading perspective on the leverage and inverse side, if you want to play what's going on in the commodity markets indirectly through equity investments, there are a number of ways you could do that. Emerging markets tend to be a way to play the commodity space,

whether it's the broader EM space like EDC, which is the triple leverage bull. China, a lot of people associate. China with what I'll call Dr. Copper, so we have some ways to play the triple leverage space there. Natural resource equities. Everybody knows what's going on this year with the energy complex. We're seeing some 2x bull exposure to things like ERX and Gush along with home. Sorry to cut you off. You're seeing a lot of demand for these products because these probably are products that haven't had much demand in the last, I don't know, five to seven years just for something in this space. So this space is at a huge run, I guess, in the last, I don't

know, eight, nine to 12 months. Well, the key is we need volatility, directional volatility. In a lot of cases, whether that's upward or downward when you're talking about the leverage and inverse ETFs. So in this scenario, it's been mostly trending upward. So you've had a lot of individuals use our bull products in this case. But like the semiconductor shortage, for example, what's going on with chips, it's been a tremendous year for Soxel, which is our triple leverage semiconductors. People are playing the bull side, but they also play the bear side. and that's the beauty of our products. The key is, though, these are designed for short-term active traders. You've got to be monitoring these on an intraday and daily basis, otherwise

they're not appropriate for you. And when you look at interest rates, too, we have a couple of products that you could short bonds as well that people are taking advantage of, which means you're looking for rates to go up. And I'm glad you mentioned that because I was going to say, we would be remiss if we didn't mention the intended use of these products. One of the reasons why there is such decay if you hold these periods over long periods of time is because volatility is a tax on returns. And I think most people probably understand this, but some new investors don't. So what I mean by that is if a stock or if an ETF or anything goes up 10% and the down percent, as we know, you're not even. And the longer that goes on, the worse off you

are. So do you have any insight into how investors are using these funds? I'm sure there are some people that mistakenly buy for the wrong reason, set it and forget it. But do you have a sense of the turnover inside of these products, how often are people actually getting in and out? It'll vary based on the path of the underlying index. That's the key. The trend is your friend. If you're in a choppy environment or where it's going against you consistently, your losses could be magnified. So that's why you need to look at this on a daily basis. Keep in mind the word daily is in our leverage products. Why? We reset the leverage back to that leverage point of whatever it is, 3x, 2x on a daily basis.

After that one day period, you're going to have compounding, and that compounding could be positive or against you, and that decay could take place as you hold these longer, and the narrative of what you're trying to achieve doesn't play out. So these are designed, like you said, very short-term trading vehicles for tactical traders, and if it's a set and forget mentality, these are not the right vehicles for you. These are really for people that are monitoring this on an intraday and daily basis. Let me just pull on that thread one more time. How exactly you're getting leverage inside of these wrappers?

Well, we're getting leverage through a derivative called swaps. And counterparties, major investment banks are providing us that exposure. So we feel this a cost-efficient way to get exposure to leverage and inverse. Of course, if you're shorting something, there may be a significant borrowing cost with our inverse products. It's the cost of the ETF and the underlying instruments. So I think it's cost-efficient, relative. to trying to borrow and short. And on the long side, of course, margin itself could be costly.

So this is a low cost way to get that leverage. And also it's an ETF. Your liability is limited to your initial investment. As somebody who likes to have fun or who liked to have fun, I should say, retired from the fun game. Man, these products are a lot of fun. Yes. They're a lot of fun, but they could be dangerous too. Of course. Yes. Yes. We have a great on our website education that I recommend everybody look at beforehand. It touches on a couple of things that you referred to, including compounding, decay, who these are appropriate for. So before anybody invest in our leverage and inverse products, I recommend to go on our site and check out the education and read that carefully and review it carefully before making any of those investments.

So one thing to understand about commodities, especially for those who are not familiar with them, or haven't really invested in the past. And now they're getting excited about them because is the prospect of inflation here. It's just that they're prone to these huge boom and bust cycles. And these bus cycles can last for a long time. We had this boom in the early to mid-2000s, when China was spending all this money and the emerging markets were doing great and commodities went crazy. And then we had the bust following 2008, where commodities had these massive drawdowns, even post-2008. How does that cycle of investing, which is even more volatile in most cases than the stock market, how does that dictate how you decided to create a commodities,

product here, and then we can get into your strategy that we're going to talk about today. Yeah, I think you alluded to the boom and bust with commodities at times, but I think we're in the early innings of a super cycle. Commodities tend to be cyclical in nature, and we're coming out of a 10-year malaise in the commodity markets. So even with the recent commodity strong performance that we're seeing, when you look at the price ratio, which a lot of people look at between commodities and the S&P 500, we're still at multi-decade lows right now. So what does that mean in layman's terms, commodities are cheap on a relative basis to the S&P 500. So when you're looking for a broad commodity investment, the drawdowns, or if you bought it a top, sold at a bottom,

something, of course, we've all never done on this panel. But let's say you did. The broad commodity benchmarks have had 50 to 70% declines. And really what differentiates our comm ETFCOM aptly named is that it is not long 100% all the time. It could be in cash with a commodity or get defensive if a commodity is showing a downward price trend. And not all commodities are created equal. They're going to be periods of time where certain commodities are showing strong performance and other commodities are in the decline. And it's very evident by 2020. Very difficult year for the energy complex in general. It was a strong year for golden silver, particularly the first half of the year. And you've had the reverse take place in 2021. Energy

have led the way while the precious metals have lagged behind. So you want something if you're going to invest in a commodity strategy that's going to be part of a total asset allocation to have the flexibility through a tactical approach to be defensive at times because, again, not all commodities are always going to go up together or down together. So when you say that you could be longer flat, what sort of signals are we talking about? And I should mention this is called a direct. option auspice broad commodity strategy. That's a mouthful. I had to Google what auspice means

because, to be honest, I don't know. And I'm looking right here. Google says auspice means a divine or prophetic token. Appley named. So, all right. So let's get into some of the signals. How do you know what determines whether you're going to be longer flat? Well, like my last name, I think it's easier. The comm ETF, COM is the symbol. Now, we do track the auspice broad commodity index. That's a rules-based index. That index has been in existence or live since 2010. And over that period of time, it's been the only broad commodity benchmark that I know of that's been slightly positive and at the same time has about half the drawdown that those other broad commodity benchmarks have. Now, what makes this auspice broad commodity index unique that

is using? It's the fact that based on price trends, it will look at each of the individual 12 that make up the portfolio and independently based on those price trends will either be longer commodity if it's showing a favorable price trend or in cash with a commodity if it's showing a downward price trend. So it's based on breakouts. It looks at it every day over a period of time. And if an intraday high is breached, if something was in cash, it would go long. If an intraday low is breached, if something was long, it would go to cash. And that's unique relative to these other static long only broad commodity benchmarks. I will talk a about one other thing. You guys probably have had this on the show before. Any ETF or mutual fund

that executes using futures, you hear these words contango, backwardation. What does that mean in layman's terms? If you're a longer commodity, you don't want to constantly roll into higher prices. And that's contango. And that could result in some level of negative performance. So you want to in a futures strategy minimize contango or be in backwardation. What does backwardation mean in English rolling into cheaper prices? And that's actually a tailwind. Most commodities because of storage and transportation tend to trade at some level of contango. So this strategy minimizes that contango or that potential decay and rolls into the most cost efficient futures contract. Right now, because demand is exceeding supply, most commodities are in backwardation.

That is a rarity right now. That actually is a tailwind within a commodity portfolio. So it's one of the features that you should look for for any commodity strategy, especially anything outside of gold and silver, where there's storage and transportation costs. I'm not going to lie. I still have to Google the difference between those two, contango backgroundation. My strategy is you just guess. You have a 50-50 chance to be in the right. So the ones that people are probably more familiar with are like the GSCI index or the Bloomberg Commodities. Those ones have a track record go back to like the 90s. So what are the biggest differences? What makes this index besides the fact that it can be tactical? What are the differences in terms of the rules or how things are

weighted between the different commodities? I think that's a big part of it is how these commodities are weighted in those indexes. Listen, I think the GSCI and the BCOM, the Bloomberg Commode index are great proxies for the space, but you're going to have to be tactical yourself because they're always static 100% long. They're not going to get defensive. You're going to have to do that yourself. The other thing is the concentration risk you have. Energy, right? Yep, particularly in the Goldman Sachs Commodity Index, it's heavily laden energy by default. Beacom is a little more diversified, but again, it's still always static 100% long. And that's where you get at times those drawdowns or maximum declines, that could be 50 to 70%.

The Ospice Broad Commodity Index and our Com ETF has been able to mitigate that downside risk. So the key with our strategy is you could use this more as a buy and hold approach to commodities within an overall portfolio because of its tactical nature and its ability to capture the majority of the commodity upside, but more importantly mitigating that downside risk that can occur in commodities at times because they tend to be volume. Hey, maybe we're veering off here, but last year when oil went negative, I mean, that was interesting. But I'm thinking about USO, the ETF, which through no fault of its own, just the underlying structure doesn't really do a terrific job of tracking energy prices that

closely, which brings me to the non-launch of Bitcoin ETFs. Any thoughts there? The non-launch of Bitcoin. Well, that was a good segue in there. I look at Bitcoin. Are you saying Bitcoin's going negative like oil, Michael? I don't get it. Well, let's take one at a time. With the ETF, she just described, like U.S.O, UNG, VX, X, X, pick your poison there. When you're using the front month futures, sometimes that could be very dangerous. Can you explain what that is and why?

The front month futures, at times, you could have something that's heavily in contango, which means that you're rolling into very high future prices relative to what the current price is. And as a result of that, you could run into some significant trouble. In the case of commodities like energy, for example, all of a sudden you could have something that goes negative in a given month because it was in the front month futures. But when you go out on the curve, it wasn't negative, for example. So that's why technically it was negative for that moment in time. But if you're in the wrong futures contract, that could cause some difficulty there.

When you look at a futures type of trading approach, you want to make sure that it's not just in the front month and that they're looking at. a way to roll futures contracts that's cost efficient like the Com ETF. In regards to Bitcoin, they do have futures right now. At some point, will that maybe be liquid enough for that to be in an ETF, possibly? And would we be interested in that as a direction? Yeah, that would possibly be the case. Three times? Well, no, not three times in that. The beta is just insane, but maybe a light leverage or an inverse or half inverse, that remains to be seen. But it's got to be, the underlying's got to be liquid enough for any of us to trade. And that's the key. But I look at

Bitcoin as a perfect vehicle for what direction represents in the leverage and inverse side, which is it's a speculative trading vehicle based on momentum. So you could make the argument that it could be an inflation hedge. But somebody's going to have to explain that to me because the Bitcoin history hasn't been around long enough to even make that claim. And then secondly, when you look at Bitcoin, it's more of a risk on asset. And last March just really reinforced that. To say it's a replacement for gold, to me it's anything but a flight to safety where gold has shown the ability to have that. So I look at Bitcoin as a possible store of value and you can call it a commodity because maybe it's trading in the futures markets.

But to me, it is a speculative trading vehicle for momentum traders. You have these three different categories in your fund for the commodities when they're on with metals like copper, gold, silver, agriculture, and then energy. Are these just equally weighted? Will the weights change in there? How does that work when these positions actually are on? Is that a momentum signal as well in terms of what the weight will be? The weight is equally weighted based on risk.

So something when it's put on that has a higher risk level will receive a little bit of a lower weighting. Something with a lower risk level when it's put on. The position will receive a little bit of a higher weighting. On average, it's about 5 to 15 percent is the average weighting. And one of the things with any trend following approach and what makes this unique is most trend followers, and you've had people on the show, they build up their positions as the trends going with them. One of the unique things about this is once a position's put on, we will never increase the size of the position. We will just decrease it based on a volatility. of an underlying commodity gets too high.

It will scale back the position proportionately. The trend could still be going in your favor, but usually that increase in volatility at some point could represent a reversion to the mean and some downside. So it's all formulaic and rules-based, the strategy. You would have thought that last year, this year, would be the perfect environment for gold. You've got break-evens going at multi-year highs

actual inflation is here, every commodity in the world is rocketing. And for whatever reason, gold seems to have been left behind. It certainly looked much better in the recent days. But is gold broken? Was it temporarily impaired? Am I reading too much into the day to day? Or has Bitcoin taken some of its luster? First off, gold had a strong year last year, particularly the first half of the year. And overall, it was up about 20% last year. and it was a risk-off environment earlier in the year last year, and rates were low. So the preferred flight to safety was gold. But as the economy recovered and reopened, gold doesn't have that much of an everyday use.

So it lagged the latter part of this year into this year based on the reopening trade. I guess I think specifically that surprised me was it had a 20% drawdown from around 21 to 1700 while every other commodity on the planet was rocking. except for silver, I guess. Well, it was a risk-on environment, and I just think gold might lag there. Plus, you had the dollar strengthened. Keep in mind with the precious metals, gold and silver, they're most sensitive to a weaker U.S. dollar.

And you had the dollar firm and actually strengthened for a period of time. Now that narrative's starting to change, and lo and behold, silver's up for the year, and gold is close behind. The Bitcoin thing is also interesting. You did maybe have some hot money, a shift of assets for people, that thought Bitcoin could replace gold. I think that's starting to change now and you're starting to see more gold bugs come back into play. But if you look at gold, I think the opportunity is also there with electric vehicles because it's part of the circuit boards,

silver with solar panels. So you have this alternative energy initiatives now that are going on. I think especially the metals, copper, silver, gold have a place in those markets as well as 5G for silver and copper. Where do you think this fits inside of a portfolio? And as I'm thinking about this, why do you think that most, and I have no data, I'm just anecdotally, most target date funds don't include a sleeve for commodities. Is that because recent performance has sucked and they'll chase after a good run? or how do you think about those two things? I look at commodities as an alternative strategy and how do I

define an alternative strategy? Something has the ability to behave differently than stocks and bonds. So when you look at commodities, the last 10 years have been very difficult excluding the last six to 12 months. I look at this as a diversifier within the portfolio, depending on the client's objectives, anywhere from basically a three to 10% allocation. I say use a broad commodity index like us and then complement it with a single commodity like gold or silver or a commodity sector. But when you look at a lot of these target date funds, and I can't speak for them, they're not projecting any reflation, inflation, and they've been right. But the narrative is starting to change.

And now maybe some people start using tips or other methods like real estate investments. I just think commodities are the purest play. when you look historically, there is a tremendous correlation between the CPI going up and interest rates rising. And we all know what's going to happen to most bond funds when interest rates rise for any period of time. We've saw bits and pieces of it, including when Trump was elected in 2016, how hard the bond market got hit for that very short period of time. So I look at commodities as a way to diversify an equity portfolio because of the different behavioral characteristics. You can take it from that sleeve or the fixed income sleeve. If you're not

looking for an income stream with that portion of fixed income, you could look to take a sliver there because of the fact that if rates go up, commodities have the ability to perform at least. You mentioned you think we're setting up for this commodity super cycle. I think the bulk case for that is pretty easy to understand. The Fed is printing money. The government is spending more money than ever. The Fed has said they're going to let inflation run hot. We're having these shortages. So the case for that seems pretty obvious. What is the other side of that? What would have to happen for that not to transpire? Is it just technology is this deflationary thing? Is it demographics? Is it the Fed pulls by the punchball? What would cause that super cycle

to not get off the ground? Well, I think first off, any sort of reemergence of COVID, what we're seeing now in India, Malaysia, if that really starts spreading and we get any formal lockdowns again, I think that could curtail the narrative of the global economy, reopening, for any sort of sustainable time frame. Technology sure has some role in the efficiency of it, in certain commodity sectors that could put some pressure on it. But I think for the next couple of years, you're setting up for that commodity trade to continue.

And I do believe that interest rates are going to reflect that. And you're going to start seeing commodity prices even move higher. They may not all move in tandem. Energy might have some pressure on it. It's bumping up right now to levels we haven't seen in two years. But who knows, if OPEC turns on the spiket again and Iran comes back into the market, they're going to be certain commodities that will be less favorable than others. But I think the broader scope for commodities right now is positive in terms of that upward

trajectory. All right. Last question. Gold, it's $1900. Does it get to $3,000 in the next 24 months? Wow. We're not in the business of predicting. It's all price trends for us, rules based on price trend.

blink twice if you said it gets yes well i think i'll tell you this i think gold has a significant chance of moving much higher based on where the equity markets are today and where the vix is today you heard it here first gold's going to three thousand it's i just wanted to add one more thing i appreciate you guys having me on our com et f has done well it's a five star morning star rated within the broad commodity category i'd be remiss if i didn't mention that so it's It's four years the ETF's been out. The index has been live for over 10. So it's definitely performed very well relative to its peer group where it's been a five-star

within it. Well, one last thing to mention. So this launched when, 2018? 2017. Okay. So it didn't get much traction at UM-wise for obvious reasons, not that this didn't perform well, but the commodity complex performed terribly. And then it passed 100 million recently and jumped straight to 200.

So, ETFs are all about right place, right product, right time. Maybe now is it time for that. Yeah, I definitely think that a lot of advisors out there are concerned about the reflation trade and feel it's real and it's sustainable as a result of that they're looking for options that can diversify their stock and bond portfolio. And certainly a broad commodity basket is something that they're willing to allocate to now or more so. All right.

Thank you, Ed. Thank you to direction. Go to Animal Spiritspod at gmail.com. if you want to shoot us a note, have a good weekend, and we will see you next time. Thanks, guys. All right, thanks to Ed. Thanks to the direction. Animal Spiritspod at gmail.com.

Have a good weekend, everybody, and we'll see you next time.