The Compound and Friends - Signs of a Top

Episode Date: September 3, 2021

On this week's episode of The Compound & Friends, Michael Batnick, Amelia Garland, Delano Saporu, and Downtown Josh Brown discuss: signs of a top, covid, deals in the RIA space, digital engagement practices, China's video game crackdown, Donda takes, White Lotus recap, and more! This episode is brought to you by Polymarket. For a limited time, sign up with referral code “Compound” to get your first trade reimbursed up to $100. Visit https://polymarket.co/CompoundShow to learn more.   Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

You were anti- Anti-Bitcoin. I was all like, guys, stay away. So Rick Edelman converted you. Rick Edelman may have converted me, not fully, but I see the future. Delano's like, whatever it takes. Dude, Rick Edelman's biggest achievement to me is how many times he sold the same company. He sold it like eight times.

It's so incredibly impressive. It's crazy. It's like Jay-Z with Tidal. Like Jay-Z sold Tidal three times. It's so incredibly impressive. It's crazy. It's like Jay-Z with title. Jay-Z sold title three times. That's what it seems like from the outside looking. Rick is a very nice guy. He is. I asked him that.

I was like, what was it like running a public company? He's made many deals over the years. Barry, you're on speaker Do not say anything incriminating Barry, I miss you That's Amelia Hey Barry Hi Amelia, how are you?

Good, it's been too long Yeah Where are you? I'm at home in my home office upstairs Did you figure it out? Yeah, no, you're correct. You're actually right. I reached out to Harsh.

You said you were right. That's a huge difference. All right, say no more. I'll talk to you later. You're welcome. He is a classic. He is an absolute classic. That's the applause from when, like,

Kelly Bundy used to come down the stairs on Married with Children. I'm pretty sure. There's, like, wolf whistles in there. Yeah. All right. I kind of like it. I kind of like it.

All right. So excited you guys can come and do this. Testing. One, two, three, testing. We took last week off. You did? Yeah. You were in Cal Testing. One, two, three, testing. We took last week off. You did? Yeah. You were in Cali.

Yeah, I was in California. And, you know, one of the things that we're really trying to do with the show is not do remote because we did that. Like, I did a Zoom every week for, I don't know, 14 months. So that was like the idea of like, let's just it live and then if we can't we just don't do a show so so we skipped last even though i could have like i could have totally done a zoom from the hotel room it's it's a lower production value so it's not the same forget it you need to see the faces i mean it was so funny doing zoom podcast during the pandemic because what i learned was

that it doesn't matter who you are how big of a deal you are a your tech is a mess but b you probably don't work that hard what up amelia like all these guys were at their lake house i love your like aren't you being paid millions of dollars to be a chief investment strategist? They're like, yeah. The Texan out there. It really was like a year-long vacation for a lot of people. Amelia, I can't get that song out of my head that you sang to us last time. Are you saying that you want a repeat?

Although that was really surprising. I think that's what he's saying. I think it's time for me to start warming up the vocals. Fred Morris over there. Where was the conference? Scottsdale. Yeah. A dry heat, as you said.

I did all my interviews outside. We did one there. We were in Scottsdale? Yeah. Yeah, it was hotter. Really? 97. Okay, I think we were hotter.

Not to brag. Are people walking around within the conference masked? 97. Okay, I think we were hotter. Not to brag. Are people walking around within the conference masked? No. Really? No. It's Arizona. Yeah. They don't mandate masks in indoor spaces. But people didn't take it upon themselves to

mask up, even though they're in a room with people from every corner of the country. Some did. Did you, did people have to show a vaccine card? Yeah. So that's it. In order to register, you have to show- Then I wouldn't have worn a mask either.

Yeah, that's why. You have to show proof of vaccination, COVID test. So, and they had wristbands that were green, yellow, red to indicate how comfortable you were with people approaching you. How much COVID do you have? Wait, wait, start over. Each wristband represented your comfort level in terms of. No, that makes sense.

It makes sense. No, it doesn't make sense. Red is stay away. I would carry each one and then depending on who walked up to me. Let's go to the bar. I should walk around with the red band all the time on my wrist. Just like, just stay away. Yeah. I had green. I was green all over, on my wrist. Just like, just stay away. Yeah.

I had green. I was green all over. But then you kind of have to switch to yellow. It gets a little, it gets a little too much. Were there red people? There was red people. Okay. And they like sat by themselves?

Made eye contact. Those were, those were back office people. They're the people putting on the conference. They're like, we know, we know what goes on here. Okay. And was there like a party? Yeah, I didn't go to the parties. Yeah, skip it.

Skip the parties. What were the parties? Well, the big one was last night, Journey was there. Like real Journey? Wow. Journey like cover band or Journey? Journey. The actual Journey.

Did you get to go on stage? Unreal. Wait, how many go on stage? Unreal. Wait, how many people were there? So they had 700 registered. I think it was around 500. That's a lot of people. A lot of people. Yeah.

Was Eric Clark rocking out the journey? I imagine so. Like in his own very Midwestern calm way? Yeah. He was raging. Yeah. In a very gentle way. The most gentlest of ways you could rage.

He did it. Rick Edelman. So you were saying Rick Edelman converted you to a Bitcoin person? He's been on that phone. We saw Rick Edelman talk about Bitcoin like four years ago. Yeah. So kudos to him. He's not a Johnny come lately with crypto.

He was very early. And he's been talking about it for advisors. He was super early. So credit where credit is due. Yes. We'll give it to him. And listen, last time I was on here, I was super early. So credit where credit is due. Yes. We'll give it to him. And listen, last time I was on here, I was very anti. So he swayed me.

Anti? Yeah. Traditionally, it's anti. Anti. That was only a few weeks ago. That must be the British in me. Tomato, tomato, I guess. On tea.

Delana, you have a voice for this. I mean, that was a smooth voice. Thank you. Yeah, I hear that every once in a while. this. I mean, that was a smooth voice. Thank you. Yeah, I hear that every once in a while. We might have you read some promos for us. Oh, interesting. Twitter will allow users to add Bitcoin and Ethereum addresses on their profile. Oh, that sounds insufferable.

How quickly can I get one up there? I have to find what my login is though first. That's exciting. Wait, so that people can gift you? Yeah. Okay. All right. This is how you know it's official, by the way. Nice. Yeah. My wallet is beep, beep, beep, Welcome to the Compound and Friends. All opinions expressed by me, Michael Batnick, and our castmates are solely our own opinions and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions.

Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast. Today's show is brought to you by Polymarket. Listen, two weeks ago, or seven years in the crypto universe, I made a little bet that Cardano would break $3 before January 1st, 2020-22. Did it happen, Duncan? I think so. It did. Not to brag. I'm a winner. But full disclosure, it's not all roses.

I bet that Tyron Woodley would beat Jake Paul. That's a smaller wager. I'm down 100% on that. I don't know if you, that, that fight's over. Um, so this is fun. I bet that Tim Tebow would score a touchdown. What do you think about that? I don't even know where he plays. He doesn't exactly Duncan. He's not even on a roster. He was on the Jaguars, but got cut preseason. He was on the Jaguars, but got cut preseason. I can't afford a CryptoPunk because the floor price is 95. A cool $360,000.

But I can bet on whether or not the floor price of CryptoPunks will be above 100 ETH on October 1st. I bet no. I'm a hater. I said no. So right now it's at 95. I took the under. We'll see. Anyway, all sorts of stuff. Polymarket.com to learn more. All right. Lucky 13. First of all, we weren't here last week, but I want to say thank you to the listeners who catapulted this show into the top 30 investing podcasts in the United States.

And I believe very highly ranked in New Zealand. I'm not saying that we need to be top 10, but how are there 29 ahead of us? No, they're not. So if I told you what they're considering investing podcasts, you would laugh. First of all, I think Dave Ramsey has five of them, which are, I think, more religion than investing. His audience is as big as Sean Hannity. He has a massive, massive, massive. And he puts up like three to five shows a week.

He cheats. He breaks up a three-hour show into one-hour podcasts. Got him. And so there's three. Calling you out. Calling you out, big Dave. Dave has done a lot of good for people that were in debt and didn't know where to turn to. That is good advice.

At a time when nobody was giving them that kind of guidance, Dave's done a lot for people. I don't agree with him on his mutual fund takes, but so what? He probably doesn't agree with me on my Knicks takes. So it's like we can all live together. But cheating on a podcast charts, that I will not abide. We don't support. So he does one show. duncan he does one show and makes it three hours uh yeah so he does like three hour shows that he then breaks up into individual one hour podcasts yeah so it's bullshit let me ask you a question why didn't you think of that all right it's never too late all right good for good

for dave there's a lot of stuff in there, though, Mike, to answer your question. That is not actually an investing podcast. Like, what's his name? Portnoy talking to, like, TikTok stars. It's considered an investing podcast. But it's interesting sometimes. Listen, if people are into that, that's fine. It's just miscategorized. All right.

We have a great show today. I'm so excited that you guys are here uh amelia's back amelia say hi to the folks all right so you are now experienced at the compound and friends like you know how this works i saw you in the dock last night like seven eight o'clock at night you like that yeah yeah all right just landed on the dock killing itilling it. Never stop. And new friend to the Compounded Friends, Delano, say hello to everybody. Hey, everyone.

How are you guys doing? All right. Listen. That voice. That voice. Can we hear that again? Hey, everyone. How are you guys doing?

We're going to hear it a lot. Goosebumps. I've got goosebumps. The contrast between that voice and this voice is terrible for me. Delano Sapporo is the founder of Newstreet. Newstreet is your own advisory firm. Yes. And you're killing it.

And if I misremember this, I apologize. Are you now a CNBC contributor? Yes, yes. Holy cow. Is this the best year ever for you? It is a really good year, yes. I would categorize it. This dude is on fire.

And what position did you play? In football. Yeah. Cornerback. Corner it. This dude is on fire. And what position did you play? In football. Yeah. Cornerback. Cornerback at the University of North Dakota. So you had speed and aggression. I was more of the Richard Sherman style. The intangibles, the guessing, and make sure you understand the coverages,

but not the quick, short corner. Okay. But you kind of knew where the guy would end up, and you got yourself there. Wait, was there a butt also? What else were you going to say? Oh, no. Yeah, that was it. Just coverage, zone coverage, corner.

And press man-to-man, use the rangy arms. I played corner and mad in 2006. Yeah, you were pretty good. I was going to say. All right. So first of all, it's feeling toppy. Amelia just got back from a conference and is now laser eyes. Did you do it to your profile yet? No. No. Your avatar? Okay. Not yet. The first thing I want to get into is

this Fidelity thing. They're going to hire 9,000 more people, which in a normal situation, like you'd be like, oh, that's great. But some people have a problem with that. But they want to hire technology people. They want to hire customer service people. They said 700,000 new accounts for investors age 35 and younger opened in just the second quarter. So that's the toppy signal? Well, they've probably been opening a million accounts a quarter for the last year

if they're anything like everybody else. And why wouldn't you hire to? But historically, Wall Street hiring binges have not been a good time to buy stocks. Yeah. So I don't know. Does this stuff bother you or not really? Macro level, I would say it doesn't bother me.

We know, as you mentioned, that they're going to act reactionary in those situations. But there's just so much areas where we're seeing younger investors. That's the big bull with younger investors under 35 coming into the market. I don't think it bothers me at this point. Younger investors might get hurt if the market crashes, but they're not going to stop investing. No. So it almost, from Fidelity's perspective, it doesn't matter if this is a market top because they're still going to need people to service these accounts. 100%.

Right? So for me, it's not really a great signal of anything. If you tell me, though, like Morgan Stanley or Goldman Sachs are hiring more people to churn our IPOs, for example, that would be different than we need more people to service accounts. Yeah. And they're hiring in tech. That's an interesting space. And I think a lot of asset managers are focused on their digital asset capabilities. It's a good area to focus on.

Yeah, the only area, frankly. Right. So that's, I think, a good thing. And if you look at Fidelity versus Robinhood, Robinhood really need the day traders, right, in order to survive. Fidelity, I mean, if we go into a bear market, they're in a much better position than Robinhood would be, right? Because they need the – Asset management. Yeah. They have so many business lines. Exactly.

Even if we go into a bear market, so I think, and I'm willing to change my mind if the evidence shows itself, because I am very open-minded or confident in my assertions, but open-minded, right, Josh? Very confident in my assertions. So if the market falls apart and goes the other way, like I think Robinhood is the most addictive social media app in the world. So I don't think

that these people are going to leave it, particularly because the average account size is $5,000, right? So let's say they get railroaded and they lose $1,700. I mean, you know,

that would be great, but I don't think they're going to leave. And then furthermore, they're just going to flip to leveraged bearish ETFs. And there's always something going up, even in a wide bear market, like not like March 2020. The activity will continue.

Yeah, like they're not leaving. So some of the people that like are just kind of dabbling, sure, they'll go away. But the people that are addicted, that are hooked, that have it in their pocket, that are swiping up four times a day, they're not leaving. I don't care what the market does. This is Jared Dillian, who we know him, right? I love Jared. I love Jared. I love Jared'sillian. We know him, right? I love Jared. I love Jared's spicy takes. He likes to kick the hornet's nest. He wrote a piece that the CFA

is a colossal waste of time last year. So this is very much on brand for him. Let me read what Jared said. Let me read what Jared said. Is he at... Daily Dirt Nap. At Daily Dirt Nap. So you know what flavor the commentary is coming in.

He's very who he is. Question. Quote, the question is whether this is a permanently high plateau of retail trading activity or will the bear market cause all these new investors to become frustrated and give up? He says, I think we know the answer. I don't think we do. I don't think we do. I think the jury's out. TD Ameritrade's Investor Movement Index, a measure that has tracked clients' positioning in the market since 2010,

rose to the highest level on record in June. I don't know what's in the movement index. Is that how many times they're trading or how long stocks they are? Do we know? I don't know what's in there. But so here's the thing. So what does science of a top mean?

Are we talking about a 15% pullback? Are we talking about like a top or a V top? No, generational top. Come on. I mean, that's really hard. That so here's the thing. So what does science of a top mean? Are we talking about a 15% pullback? Are we talking about like a top or the top? No, generational top. Come on. I mean, that's really hard. That's really hard to call. I don't think that this thing is going away. I mean, if you want to talk about like, is the stock market frothy? Sure. Have we been saying that for the last nine? Have we been saying that for the last nine years? Yes. Every day? Yes. The same people? Yes. What's his tweet? So Carter, Braxton, Worth. If we're looking for signs for the top, you don't have to look very hard.

You don't have to be Sherlock Holmes. He said, for the month of August, we've made 10 new intraday all-time highs in the S&P 500. This hasn't happened in the month of August since dot, dot, dot. That's my dot, dot, dot. 1987. We know what happened in October 1987. The record number of intraday all-time highs in the month of August is 11, which happened, oh shit, it happened in 1929. Alright, we're

doomed. Is this a masterpiece tweet? He got 1987 and 1929 into the same 280 character tweet. That's unbelievable. This is chef's kiss. It's very well done, Carter. The only thing missing here is like, I don't know, Black Plague

or... 15 whatever year it was. Right. Spanish Inquisition. Also had many market highs. I don't know, Black Plague. 15 whatever year it was. Right. Spanish Inquisition. Also had many market highs. I mean, listen, this weekend, for the first time, I had my stepmother ask me about Bitcoin. I had my stepdad ask me about Bitcoin.

You sell when they ask about NFTs. Bitcoin's like a blue chip at this point. Do you, do you get, you get a lot of your clients initially find you on social media? Yes. So they're seeing all this shit also. They're seeing it. So do you get questions about it or? 100%.

There's a lot of questions about crypto, NFTs, just the whole space in general. And really, I mean like the toppy stuff, like are they reading these people's tweets and like reacting or not really? No, not really. I just don't think a lot of younger investors really care about – they see the opportunity to buy more. I saw that a lot when we had the initial pullback. There was just an opportunity. That's what a lot of people said.

Just how it should be. Yes, they want to see the opportunity. So I don't think younger investors are looking at this as – even if they've not even seen the signs, they're not worried about it. Younger investors should be on their hands and knees praying for a market crash every day. Right? Like that. They should beg for the opportunity to dollar-cost average into stocks as they go forward. Right, because conversely, how does it help them if they have to put money into the market every two weeks in their paycheck?

Yeah. Like to maximize their 401K. They're buying less shares every time. So you have eight out of 10, eight out of 10 intraday all time highs in the SPX. If you're a buyer for the next four decades, how is that good? It's good for your parents,

your grandparents. It's not great for you. Market's been weird though, because it just goes up every day a little bit. And so it feels like, like a cumulatively we're up, I don't know, 18%, 20% year-to-date. But it's boring. Nothing's happening. We're not going to—

We need the excitement back. Right? Like, we're just—there's not, like, euphoria, euphoric buying. And a lot of the names that had euphoria, like the SPAC names, the non-profitable tech names, they got f***ing annihilated. They're down, yeah. Right? So even the S&P is at all-time highs, and it's hovering near there. But a lot of, like, the go-go stuff got crushed annihilated. So even the S&P is at all-time highs and it's hovering near there,

but a lot of the go-go stuff got crushed. What's funny about that is those aren't advisor areas of the market. Advisors don't own the SPAC ETF. Or the Moonshot ETF. Moonshots, electric vehicles. Advisors don't build those as big components in portfolios. So that is a purely retail phenomenon on the way up and on the way down. Yeah. Right. A hundred percent. I make a great point. I had clients asking, you know, during time, like, why aren't we doing more into that in that space? And I just said, you know, I just don't one due diligence and research.

There's no way you can cover all those names and really, unless you're buying broad market in those SPAC space and buying an ETF, but there's no way you can know everything about all those companies and fully be able to allocate enough cash where you feel comfortable conviction on that. And so there was just a space I stayed clear of. And you know, I feel vindicated in a lot of times right now, cause we're looking at year to date,

the SPAC ETFs on 20%. You know what's so great about that? This will happen again and again, and you'll be able to point to, remember I talked to you out of buying Chinese battery companies? Like, remember I talked to you out of a SPAC that's since been cut in half? 100%. Not that this will definitely be the same thing, but just remember that that's a very real possibility.

But also, the stock market is so boring these days. Like, not just, even though it's going slowly up. Speak for yourself. I'm on fire right now. You are. But it's boring relative to the crypto markets and the NFT

and the metaverse and the DeFi. Like that's where all of the excitement is right now. And that's why I'm focused so much on COVID instead because COVID's exciting again. COVID's back.

COVID is like back in many ways, stronger than ever. I was in Texas. I was in Colorado. I was in Arizona. So you might be infecting us right now. So what you're saying is like talking directly at us.

I was sick, but guys don't worry. So Ben, no, Ben has COVID. You told me you had a green wristband, but okay. Ben is getting, Ben is like, no joke, getting wrecked by COVID. And I guess he, if you're vaccinated and you get COVID, is that, does that like, is that the Delta variant? Is that what it is? Yeah.

You, yes. Right. So. It's, it's a variant. It's, it's going to be a variant. It's kicking his ass right now. Ben is on day four. And he's in shape.

He's got pecs. He has veins in his arms. Yeah. So no, it's no joke. He's not doing very well right now. I mean, he's going to be okay, but he got really sick. No, it's scary. I think you have to still act safe and be cautionary right when you go into situations.

Wear masks, distance. Do what you got to do. No, I'm just kidding. There is no work. No, but when I say it's like stronger than ever, the breakthrough infections are f***ed up. Like that wasn't supposed to be as prevalent. I understand 95% effective means five out of 100 people will get a breakthrough infection.

I just don't like to hear it about people I know. And that's what's changed. But for the most part, like obviously Ben and many others aside, like for the most part, it's much less dramatic, the effect that it's having on you. If you're not vaccinated, you get Delta. Like, you know, good luck. It's really, really nasty.

And being in those states where people don't believe that they should, those are the ones that are going to get hit. But those are also the ones with the spikes in vaccination because people could say whatever shit they want on Facebook, but they're also not, they're not, they might be stupid, but they're not crazy or they might be crazy, but they're not stupid. Like, I think there are a lot of people who are just like quietly seeing family members get this and going and getting vaccinated, which might be a silver lining. So that's the thing.

Like there's cognitive dissonance. So you could think COVID is not a thing until it hits you or your family or somebody you live with. At that point, you've got to be like – You would be surprised though because not really. The president didn't change his rhetoric or his behavior that much pre and post getting COVID. So it's not definitely that it really hits home and makes you change, at least the way you speak about it outwardly.

I don't know. Well, now that Pfizer is FDA approved, hopefully that will sway some of the. Right. A lot. Right. A lot of these anti-vaxxers are very big on reading clinical reports from Pfizer and FDA approvals. It's true.

Consumer confidence took a hit six months low in August. And the worries cited were soaring COVID-19 infections and higher inflation was number two. But people are still traveling. They want to go on vacation. So I threw this article in the doc from the Wall Street Journal

because it reminded me of financial advisors. You just went on vacation. I did. I just got back from California. And we worked with a travel agent. So I use a travel agent. Like I'm not a Luddite. I understand Expedia exists, but I don't pay her. She's incredible.

She gets paid by the hotels. I don't care. So why wouldn't you use a travel agent to book a trip that's going to be expensive? You know why? I think most people don't know that that's an option. I agree with you. For example, when you told me that you used a car broker, I didn't know that was a thing.

I had no idea. I didn't know that was a thing either. So car brokers are a thing. Last year, I wanted to get a Jeep Wrangler. Did you call Richie? Oh, no. Michael, that was the car I drove in high school. Double door Jeep Wrangler. You can't... He bought yours. I drove a Buick Regal. Is it pink?

It's actually electric blue. It's very cool. I drove a Buick Regal is it pink it's actually electric blue it's very i drove a buick regal which is like the oldest mom mobile ever yeah um but you couldn't get a jeep wrangler because they were sold nobody was making them you could get them for like 30 more expensive so anyway i went to i was like you know i don't care i'm i'll just get a group jeep car in cherokee that's fine um and i was negotiating i, wait a minute. This is so annoying. Like the back and the forth. So a broker, I was on the phone with him for 20 minutes. He found me a car two days later, drove it to my house.

It was $150 or something less than I was quoted. No brainer. But most people just don't know that that's an option. Brokers are badasses. This guy used to own a dealership. Nothing. They negotiated with the dealership. He's getting a piece of the lease you don't even see it

so I exaggerate it wasn't that much of a big savings but it was a significant savings and the time and energy was just awful give it to somebody else so people still want to travel now it's a pain in the ass again now the rules are changing again things are getting cancelled

so people are rediscovering travel agents. And travel agents, like if they ever had a moment, now is that moment for all of the millions of people who want to get on with their lives. So it reminded me of financial advisors in a market panic. Like where all of a sudden it's like, all right, I do it myself. I do it myself. Wait a minute. I am about to do something really stupid because i'm terrified let me talk to somebody like that is the biggest source of people coming to us yeah they know we

exist they read ours but like when things get ugly in the markets is when they really just want to talk to people so um this is wall street journal quote with the pandemic our credibility and our necessity have gone off the charts. And I think we're now advocates, says Jennifer Wilson Buttigieg. No relation. Co-president of Valerie Wilson Travel. Travel is possible. It's just difficult.

Right. So it reminds me of like a market panic. Investing is possible. It's just difficult. And I highly recommend to anyone that's not using a travel agent, they don't charge you money. I never even knew that. They find you deals. How do you find a travel agent?

This was a recommendation from Sprinkles went to University of Michigan. Her best friend who also went there grew up with this woman. So you ask around. You ask for a recommendation. Ask friends. Friends of friends. And basically she's like, where do you you want to go she's not like telling us oh have you thought of bermuda my brother lives in california i had to go i'm supposed to go last year he has kids growing up that i'm seeing on instagram like i had to go so given that i had to go that's when

you say to somebody what's the right way to do? And she like gets taken care of by the resorts, the restaurants. And so is it more that they're figuring out, okay, you travel at this time. This is the best rate, everything. That's the value add. Or is it just more of the time? Yeah. Like, and, and then which plate, which hotel and who's running a deal and who's most likely to change their price hold off, like who will negotiate with you and who won't like that

kind of thing. I don't know. That's, I don't want to know. And if it doesn't cost you anything negotiate with you and who won't? Like that kind of thing. I don't know that. I don't want to know that stuff. And if it doesn't cost you anything, it saves you time and effort. That's amazing. Right. So I think there's this built-in assumption

that everything on the internet is cheaper, more efficient. Not really. Not really. So it's nice to have experts. And I just thought that was a nice analog to what a lot of people working in our space do. Speaking of our space. Amelia.

Amelia, your time to shine because you are like, no, but you're covering the deal-making every day, all day, every day. What's going on right now? We get an email every day from CityWire. Another M&A. Yeah. Ian Wennek is our rockstar reporter breaking these.

Shout out to Ian. Yeah, shout out to Ian. It's been crazy. By the way, I know how he breaks all his stories. He just doesn't leave breaking these. Shout out to Ian. Yeah, shout out to Ian. It's been crazy. By the way, I know how he breaks all his stories. He just doesn't leave you alone until you talk to him. Because I get my regular email from Ian every time we file our form ADV. I almost could set my watch by it. He's on this.

I think you're seeing a mini surge right now because people want to get stuff closed by end of quarter. But it's nuts. We reported yesterday four deals. Beacon Point acquired a $500 million Seattle hybrid RIA. Allworth bought a $367 million Maryland RIA. EP Wealth bought a $130 million Bay Area practice. And then Focus added another partner firm to its network. And I think in all of these deals, they're joining these firms for different reasons. The one I thought was the most interesting was Beacon Point because they acquired Rainier Financial Group in Seattle. They're a hybrid, so they use LPL as their broker-dealer. And they said they left because

LPL didn't have enough tech offerings available. So that's why they joined Beacon Point. And I think that you think in the broker-dealer world too, when you're using these big platforms, you're getting that access. But they said, no, they had a CRM, InvestNets, Tamarack, Planning Software, eMoney, and they just didn't have those available. So that's what BeaconPoint is bringing to the table. Salesforce, Tamarack, and eMoney. But how much, not to be so cynical, how much do you believe there are reasons for leaving? Like, is it really tech or are there other things that we might not know about? What do you think it was, like sexual harassment?

No, like, no, financial arrangements. Oh, it's always that. Yeah, no, I agree with you. It's payout. All the time. That's like the bigger reason, yes. But I do think tech is another reason. And the funny part is-

Yeah, we needed more tech. I'm using air quotes, podcast listeners. Yes, but I do think tech is another reason. And the funny part is – Yeah, we needed more tech. I'm using air quotes, podcast listeners. They needed higher payout. Come on. That's what I'm saying. But the funny thing is we wrote a story today about a Ray J group of advisors. I think they're around 600 million.

Joined LPL. Guess what the reason was? For the tech. So maybe it's not the tech. So maybe it's not the tech. amelia these sound like small deals like no offense uh 130 million dollar acquisition like we have advisors sold like a practice within our firm that like is that an is that really an acquisition or is that a hiring yeah they call it an acquisition yes but what i think it's interesting because that's the 16th they've done since 2017.

We call those – don't they call those tuck-ins? Like tuck-ins. Like it's not a new office. It's like let's tuck this into our Seattle. Yeah. In some cases, yes. Like in Beacon Points, they're opening and they're presence in Seattle. They didn't have a presence before. So when they acquired that firm, they're opening in that market.

Do we ever know – obviously we can't know the specifics, but are these advisors getting a check to leave? Are they getting higher payouts? Do we know? Focus deals are. Focus deals are. Yeah. So focus it's, they sell all their assets and then around 50% of their cashflow goes to the company. So, right. So if you're, if you're a fo, if you're doing a deal with focus, it's probably for your retirement. Yeah, right. So if you're, if you're, if you're doing a deal with focus, it's probably for your retirement. Yeah, exactly. And it makes sense because it's instant liquidity and they're

probably better at running an RA than you are. Yeah. Cause if you're like a boomer advisor, you didn't keep up with the tech for the most part. Right. So I'm always curious, like what they tell their clients, like, oh, we were bought. It's essentially you were bought. Obviously, it's not said that way, but like, congratulations, you got bought. I got the check, but you were acquired. Well, I think that's what they say, right? They say we have more enhanced offerings by joining this bigger firm, and it's going to make it easier for me to manage your money.

And it's going to make. Yeah. me to manage your money and and it's going to make session yeah yeah right which is true yeah it is and i think when you join a bigger firm you do get that you get the succession planning you get better portfolio management risk all that no doubt are you guys seeing a difference in the level as that was brought up so there's the under 500 million dollar asset deal versus is there is there a difference in how those transactions are going are they growing more in the sub 500 market or the higher it really ranges these and these deals have been really going on a lot in the last few weeks and it's a cross but i think really ramped up definitely yeah years but i think in the last few weeks you've seen a lot i think in october november we're going to see even more but it really ranges i mean the big the ones we we really focus on,

I think around the 500 million, that's big. Um, but let me ask you, let me ask you all of you a question. Do we think this is a result of people seeking bond alternatives and, or is this part of it's cheap to borrow money? So they're going to do these deals. In other words, let's say the 10 year was at 3%. Would that slow down these deals? Yes. Because this is all being funded by private equity firms who have to put money to work. Nobody is paying out of pocket for these deals. Or not nobody.

They're not paying out of cash flow. They were given money from private... Yeah, every one of the firms that I listed, they're all PE-backed. So it's cheap borrowing money. They're borrowing for cheap. This is part of the cheap money phenomenon. But then I also do think it is demographic. It's older advisors.

There's not a lot of ways to get out of your practice and get value for it. There's not a lot of ways. There's one way. Well, there's two ways. What else? Well, if you actually did real succession planning and you can be bought out internally by your employees, which is what we're attempting, wish us luck.

But then there's like, uh-oh, I'm 59. I don't want to be doing this in 10 years. I should start engaging. I'm not big enough for private equity to be interested in me. So I probably have to sell to an aggregator. And it's fortunate. There are about 20 of them that can do billion dollar acquisitions,

billion dollars under management acquisitions, I should say. But like that, I think is being enabled by cheap money. It's just another manifestation of the same thing going on all over the economy. What happens in a bear market? Are acquirers even more aggressive because they're getting to buy a company on the cheap?

It's like, oh, we're paying you multiple revenue or EBITDA or whatever it is. Let's wait a quarter. Let's wait two quarters and then we'll scoop you a little bit cheaper. Yeah. The deals haven't slowed down, right? We just talked about this. They are going on when the crash in February last year. They have accelerated.

I think they take long enough to do that you don't stop it because of market volatility. It's not like an IPO where you're like, oh, this won't be well received. It takes a long time to figure these things out. So I don't think they would be at risk because of the market. I wonder, you mentioned succession planning and older advisors getting out of the business, but is there, on the acquirer side, what are they actually looking at as far as demographics, just the growth of AUM,

or what is actually pulling them to these certain companies? Because I just find it, especially these deals, just from looking at face value, it looks sort of random, but is there something that they were looking at that made all those deals attractive? I got to be honest. Just getting more assets. I feel like it's just a land grab and these people are kidding themselves because there are probably some high-quality firms being acquired.

But then there were probably a lot of situations where it's like, yeah, I was a broker at Merrill and then I hung my own shingle and I'm tired. My clients are old and many of them are passing away. And many of my accounts are in decumulation mode. They're not buying 85-year-old advisor books. If you're buying boomer advisors, their clients are like 70s and 80s. I think that there has been enough transactions that they have a really good sense of the industry, the churn rate, like what they're paying for. I would be curious, do we have any sense of the returns that these PE companies are

generating for their investors? That's really interesting. The hurdle is low. That's really interesting. If the risk-free return is in terms of real rates, zero, how high could the hurdle be? Yeah. That's an interesting question. But do you think investors are looking at these PE companies as bond alternatives?

I don't know. I don't think so. It's not the same sleeve. It's like trillions of dollars. So they have to put it to work. This is one of the easiest places to put to work. I don't know. What do you think is going on?

What are they looking at when they evaluate? Let's say there's five different firms they could buy. What would make the at when they evaluate? Let's say there's five different firms they could buy. What would make the final deal they do? What would be the reason for it versus the other firms? I think one part of it is just the national footprint. I do actually think some of these RIAs, they want to be everywhere, right? Yeah, like Hard Rock. Which is smart, by the way, because if we're all remote anyway,

if it doesn't matter where your advisors are Like Hard Rock. Which is smart, by the way, because if we're all remote anyway, if it doesn't matter where your advisors are and where your clients are geographically anymore, which I don't think it does, like Delano could open an account with somebody who lives in California or New Jersey, it would make almost no difference other than what time of day you call. Exactly. Right?

So that part makes sense. What else? Yeah, because I think they look for the size. I mean, that's a huge one, right? How many assets they can bring over. Everyone talks about culture. They have to be the right partner, the right fit and all that. I'll take the under on that. Um, but I, I do think it's like the firms itself. I mean, it varies from RA to RA. Some, I do have to be sophisticated. Some have to have their own plan in place when they're retiring and what they plan to do with the business. But it really varies.

I mean, some just want to pick up, pick up, pick up, and they'll acquire any old FAA that wants to break away. And others are more diligent about the process. Do any of these smaller RIAs selling themselves to a larger one, do any of them take stock or are they just really taking cash? It's a mix of like, it's either cash equity, right? It varies deal to deal. Okay. I don't think there's like a one.

If somebody took all cash for my, like I went to acquire someone and I said, you have a choice. You could have a mix. We could have all stock or you could have all cash. And they're like, just give me the cash. That would be a bad signal to me. Yeah. And the one with Allworth.

Just in case. Just in case. Just in case. Yeah. The one with Allworth and the Maryland RIA that was around $300 million, that deal was financed with a mixture of cash and equity. Okay. I guess it depends on your age whether or not you're willing to take equity in a larger RIA.

Yeah. Because it's almost like re-upping. Well, that's another part of it, right? What does the deal look like? I mean, some of these deals, we don't have the details on the actual transaction, so how it was structured. But I think with that one specifically, right, that was a mix. So if the firm is willing to take a stake, right, are they going to invest in the company? What is that structure going to look like?

And you have so many firms now working like Park Sutton Advisors. Their whole business is the deal, right? How to structure a deal. I mean, now you have firms that are just doing that. They're not providing any funding or anything like that. Exactly, right? Just consulting on the deal. So now you have a business on that, right?

That's another whole growth. Are you skeptical? Like, you started a firm. You're going to build a culture and you're going to – I feel like that's what we're trying to do. Like, are you skeptical that five founders can come together into one larger firm and like actually function and get along with each other if they didn't start off as partners? I don't believe that they can really do that. That's interesting. But you'd have to look at how much anonymity, how much autonomous the five partners are.

So if they're acquired, brought in, they're still able to kind of maneuver the way they've been maneuvering. Or, but does that, you know, the acquire will look at it as you have to ingrain into our culture and you have to start to, you know, kind of, you know, ingrain into how we do things. So I think-

Can people change? Can an advisor who's been doing this for 25 years all of a sudden become ingrained in somebody else's culture? It'd be hard. It'd be really hard. There had to be some level of ability to have agency to do what you've been doing.

That doesn't work. It fits in there. Picture Barry Ritholtz. We sell to Peter Malouk, and then Barry has to become a creative planning. Durant lasted three seasons in Golden State. It doesn't work. I thought you were saying Joe Durant

lasted three seasons at Goldman Sachs. That's what I thought you were about to say he's been there longer than a lot of people it doesn't i don't i'm skeptical all right let's let's talk about breakaways because if citywire writes a lot about um m&a this is probably your second biggest topic right would you say yeah it's followed by scandals, scandals, the fraudulent advisor. But no, I think the breakaways, we haven't seen a slowdown, but we're writing more about acquiring and buying. It has to slow down. If they were going to leave, they would have left four years ago.

What are they waiting for? Is it a breakaway when they go from Merrill to RBC? That's not a breakaway. We wouldn't classify that as a breakaway. Like the Ray J to LPL, that's not like a true, true breakaway. If we looked at, I met an advisor at. Like the Ray J to LPL, that's not like a true, true breakaway. If we looked at, I met an advisor at Orion, the conference I was at yesterday,

and he left Merrill in February of last year. Good timing. Right? He left the day before the market crash. The market was down 13% when he started his business. In Unreal. A breakaway is...

Hey, did you get your paperwork in? But he left, want to know, guess why he left? Technology. Michael, you're good. Yeah, did you get your paperwork in? But he left. Want to know? Guess why he left. Technology. Michael, you're good. Yeah, he left because he couldn't give his clients different tech offerings that he wanted. Yeah, sure, sure, sure.

Sure. His clients were dying for Riskalyze and Orion. They couldn't wait at Merrill another moment. What is the difference between Merrill tech, right? Wire tech versus RIA tech? No. What happened at Merrill is actually a Shonda Yiddish. It's a very bad thing.

It's a shame. What happened was they started basically calling these guys Bank of America. And people that work there, I don't mean like kids, but like old timers, they really do take a lot of pride in having been Merrill, legacy Merrill, whatever. When you tell them that they are now Bank of America securities, I'm not saying that makes them leave.

I'm saying if they're on the fence and they're already maybe leaving, that's just like, you know what? This is not what I wanted to spend my career doing, like working at the bank. Branding is important important i think if you lose the brand people think you lose the culture you lose what you what i don't know what marketing consultant told them to kill the merrill lynch name it's one of the all-time dumbest things i've ever seen and we know that yeah because they're actually there are people resurrecting defunct

brokerages like robertson stevens is an ria now like they they took the rockefeller name back and built a and built a not the jay-z damon dash but like family and they're building an ria based on that like these names have something to them so i think that's like a i think that's part of like what's going on at least out of merrill which is why i asked you what is sanctuary so that's part of what's going on, at least out of Merrill, which is why I asked you, what is Sanctuary? That's what I was going to follow up with. Sanctuary is really building their business around trying to recruit those Merrill advisors and other wire house advisors. Jim Dixon runs the shop. He's had a huge success at this.

We've been covering this at CityWire. Sanctuary is devoting resources to recruiting these brokers. And Ian Wennek, again, he reported on a recruiter that it actually has an equity stake in Sanctuary and he's been sending clients there and he didn't disclose that to his clients.

Is that frowned upon? Ian Wennek is like Woj for RIAs. He's like, he's breaking news all the time. He's like Schefter and Woj combined. Oh, so wait a minute. So he owes a responsibility to the broker that hires him to find them a place. Yeah. And Sanctuary is paying him too.

Yeah. And he just – the issue is he didn't disclose it to his clients. But I mean how that relates to the firm is just they're trying really hard to scoop up these wire house advisors. And they're taking it very seriously. But I think we're looking at this, right? We're keeping an eye on it. But that's really their model. They're really honing in on that wire house space.

And I read your article on the site about Sanctuary. So it sounds like they're ex Merrill guys who have very deep connections within Merrill all over the country. How did I Merrill's call with that? Are they getting sued like daily, weekly? Yeah. Let me read this. A thundering herd of advisors continues to stampede out of Merrill Lynch.

They're all – like half of these things are going to sanctuary. $600 million, $500 million, $3.2 billion. Meanwhile, Merrill's still $2 trillion, right? Yeah, they're massive. They're doing okay. They're massive. But I think that that's – 17,000 000 advisors that's how people attract right like ex-goldman guys and san friend that set up an ria they'll they attract the goldman guys to leave right it's i mean they

use that i met with an ria in houston he's ex merrill he uses that to get advisors over i think it's it's a good marketing strategy right like i Like I used to be, you come over, it's better on the other side. But I think it gets tricky. We're like Merrill brothers. Do they show each other the tattoo of the ball? So this is like an aside, but when I was looking at starting in the advising space, I went to Merrill and was speaking to them. They're recruiting me and added a weird – By the way, for the audience, you were a Credit Suisse out of college. Yes, I was a Credit Suisse investment. But doing banking, not doing like advisor trainee.

100%. Okay. All right, go on. They had a really archaic process of – I don't know if I should say it. But it was a really evaluation process of like some sort of virtual – they might have been the first in the metaverse. It was like a virtual play-by-play acting out how you do scenarios as an advisor. And it was really opaque, and I didn't really understand.

It was like you went to a meeting, and there was someone that, hey, I do this, and can I get your card? And it was a – yeah, 100%. And I actually failed this test, and I had no clue. Wait, you had to like act out a scene? Exactly. So it was, it was a virtual, it was virtual. You had to make decisions based on what happened in those areas.

Right. That's a good way to build culture. And so I, you know, I seen things, you know, as we're mentioning, seeing things leaving,

it just makes sense to me because I don't know if some of the bureaucratic old things are being done in certain areas or just make sense, especially for young people getting into the business. There's got to be a shift. There's got to be more flexibility. There's got to be a better way to ingratiate people. I just didn't. Yeah, that's an aside. Somebody explained to me there's two ways to get trained.

You go to Merrill Edge, which is the call center, which is similar to the training you would get at like Fidelity or Schwab. It's like people with small accounts calling in and you learn i like that i actually think that's smart and merrill edge is like one of the biggest robo advisors because that's basically what it is yeah i think it's like a lot of money i don't know how much but i think it's a lot um but then the other way is like my dad's rich and i get put on a team and because like it's like family friends and then i have to like hump the phones for however long you know like those are like still the two ways to to get the gig so all right so when they called you and they said you have failed our uh our simulation like it's like the kobayashi maru in star trek the only way to win is don't play. Exactly.

Right. You should have pulled the plug out of the machine. So you were like, all right, I guess I'll go to acting school. Or you're like, maybe I'll just set up my own firm and not deal with this bullshit ever again. No, no. I really credit what I saw from you guys. I knew about the RA space, but I didn't fully know how independent advisors worked in the sense of I read some different things and saw some articles. And it just really brightened how it actually go about it.

So that was really where it opened my eyes to like let's do something that I felt was more on my way. Okay. So then what? You call Schwab. Yeah. And you're like, I need a custodian. Yeah. And they're like, yes.

I don't know if they're still like that now. You might have gotten in right before the door closed closed i did some finagling yeah you know they do obviously the different custodians have different little things but i did some finagling to to get my area into and i feel like they're great you know schwab has been great as far as custodian so you know got got hooked up with that evaluation ship and really just started you know virtually you know hitting the phones and and really just talking you You have 300-something clients now? Yeah, yeah. Unbelievable. I mean, right?

Are you doing the cover story on him yet? Yes. Like when is that? That's editorial, but I'm about to pass your name on. You ever see how this guy dresses? He's dressed to kill. Follow Delano on Instagram. No, not today.

Not today. He looks like me. Today he looks like Batnik. Follow, follow Delano on Instagram if you want to know how to dress, basically. I like the branding.

Yeah, yeah. Dude, so, all right, so you're killing us. Congratulations. If,

if, if one of these aggregators calls and they're like, hey, not us. If one of these aggregators calls and they're like, hey, not us. If one of these aggregators calls and they're like, hey, listen, we want to buy you. And not only do we want to give you full autonomy to keep doing things exactly how you're doing it, but we want to make you like a big part of the firm's marketing because you obviously know how to do it and we don't like, would that be possibly tempting to you or are you like, just like steadfastly,

I'm doing this myself? It's funny in the early days, I actually got random calls for that, but you know, I'm still will, by the way, the more, the more TV you do, the more you're going to get that. So yeah, I think I really steadfastly working on, you know, building kind of what new street in the community does and obviously the financial planning and now we're looking at the private space. And, and so, yeah, I just want to make sure everything is well for, it sounds cliche. Everything makes sense for all of our clients and what we're doing. And that's the only,

so I think what you're saying is you'll only move for better tech for better tech. But he needs a lot, but like a lot of tech, right? All right. So what's going on with the SEC like a lot of tech, right? Exactly. So what's going on with the SEC overview of, what is this, Twitter, social media? No, this is like, all right, DEPs. This is a new, get used to this acronym. Have you guys written about this yet?

You will. Digital Engagement Practices, DEPs. Digital engagement practices, DEPs. So Gary Gensler gave a talk about just the way that apps are driving investor behavior and where that might actually be very conflicted. And to me, this is no different than – it's not a boiler room because people are voluntarily doing this themselves on apps. But if you arrange the app a certain way to push people into certain outcomes, arguably there are boiler room-esque aspects to this type of thing. Are you talking about like confetti when you make a trade? Yeah. Yeah, that's stopped, right? We'll give you free shares of this if you do an options trade or like –

Well, you opened a Robinhood account. We had sales contests when I started. Like literally if you could sell 15,000 shares of this closed-end fund, you and your wife are going to Hawaii. You can't do that shit anymore. You can't do that shit anymore. So now in an app, it's different than like guys in ties on the phones. But is it that different if you're building technology and engagement in such a way that you're pushing people into a certain type of behavior? So they're talking about Robinhood and other trading apps. Because if you open a Robinhood account, you get natural stock, right?

So that can drive that frenzy. You need to trade. You need to win the game. So it can lead to riskier behavior, which makes sense. Here's Gary Gensler. Quote, in the last few years, we've seen a proliferation of trading apps, wealth management apps, so it's not just Robinhood, and robo-advisors that use these practices to develop

and provide investment advice to retail investors. In many cases, these features may encourage investors to trade more often, invest in different products, or change their investment strategy. So this, to me, applies to Wealthfront, Betterment, Schwab Intelligent Portfolios, Vanguard Personal Advisor. For example, when you open your Robinhood app, as I do 97,000 times a day,

you see your daily performance. You get a snapshot of the most recent six hours or whatever it is. How'd you do in the last six hours? It follows the screen, so it could look like you're falling off the cliff, and it's like,

I'm down 75 basis points. I better trade harder. That's an example of behavior that could be. I better trade bigger. No, it would make you trade more if you see that. Of course it would. You know what it does? Actually, you ever been in a casino? I'm not a gambler, but you ever play blackjack and you're like down to your last four $25

chips, like down to your last hundred. Let it all ride. One coin. Just put it all in. I do the slot machines. Every time. Same principle. Like, yeah, I got a handful of coins left. Forget it all ride. Just put it all in. I do the slot machines. Every time. Same principle. Like, yeah, I got a handful of coins left.

Forget it. Let me put it in. Weekly options. You said something interesting to me, which obviously they are pulling that in for retail investors, but you also said something interesting about a clubhouse event with me.

Is it the discretion of, when you have discretionary income, are they really fueling it in the sense of there's giving, people are going to do this anyways. And whether it's gambling and sports or gambling in different areas, are these apps, whether it's Robinhood, fueling it or are they just kind of giving people the ball and they're just shooting where they're going to shoot anyways? The answer is probably both, right? Good question. It's not either or.

They're both. They're both. They're both – And also there are some apps that might attract somebody that's more likely to gamble than other apps so you are responsible for your own decision making we're all adults yes but there are certain nudges you can make um like when if you go to make a transaction on betterment if you go to sell on a down day they'll tell you okay you can do this but it's going to cost you X dollars in capital gains. Do you still want to transact? Other apps don't have those guardrails. And in fact, they go the other

way and try and encourage you to trade based on the way that they're presenting your data. Yeah. Yeah. Are you sure you want to hold? Right. Yeah. Yeah. Hello. You've been inactive for 17 days. Have you seen treasury rates lately? Are you sure you want to stay long these stocks? Have you seen treasury rates lately? Are you sure you want to stay long these stocks? All right. Speaking of gamification, what's this about? This is funny.

I just put this on here because on Monday, China announced that miners can only play video games for an hour on Fridays, weekend, and holidays. And it's banned during the week. Why it made me laugh was we had the same policy in our household growing up. What video game system were you classically trained on? I feel like you're a Nintendo 64. Yes, but also guys. Super Nintendo? Sega Genesis. Guess my favorite game. Duck Hunt. No.

This isn't on Nintendo. You guys just go Super Nintendo, Sega Genesis. This is on Nintendo. On Nintendo? I almost finished it. World of Warcraft. That was your jam? Yeah, I was a WoW girl. Did you play it on the computer? Let's just say I bought some gold on eBay Were you like a viking?

I was so terrible at it I would die I would always be in the graveyard trying to get out If you guys played remember I never got into You never got into WoW? I was into girls When I would have been into video games

I was very much like not not on the computer i don't know there wasn't there wasn't a computer yeah it wasn't a computer yeah we couldn't though i i truly i saw this and i showed it to my mom i was like mom you're ahead of china you you restricted us during the week only weekends and you turned out great so maybe china's onto something this is this is i mean something. This is what happens in the communist society. I don't think they're going to actually police it, and I'm judging that only based on Chinese video game stocks. I actually looked this up.

They're higher. They got killed, but Chinese tech stocks get killed every day anyway. They're actually higher now than when this came out a couple days ago. That's interesting. Either investors are looking past it and they're like, well, whatever, or they don't believe it'll actually be enforced, or I don't know.

But all right, let's say, so what do they want people to be doing if they're only playing 90 minutes on a weekday? Sadoca. Homework. Homework? Sure. Can you imagine us trying to do this in the United States?

It would never work. You would never work. You can't even do this in your house. No, no. I was a big gamer growing up. I played 64, GameCube, all the games. And my brother's still a gamer. And I'm actually going to get a PS5. My girlfriend wanted to implement a

one to two hour a week because she knew. But I don't think you can implement it here. We're actually going the other side. esports is just a bigger thing um and i think you know i think it's just a great way they actually have studies that show i didn't read them you know in detail but they have studies that show that playing video games is actually helpful cognitively and different things and you're supposed to burn calories a little bit when you're pressing it so i don't know i We just can't implement it here. My son was in OT when he was in kindergarten. Do you know what that is?

Occupational therapy. They thought, and maybe they were right, that his hands weren't working. They would give them tests. They would give them OT tests, like use a pair of scissors, fold this into a triangle, like shit like that.

He literally couldn't do some of these things that other kids his age could do. We were terrified. And then he got the Xbox. And I was like, what are these people talking about? This kid's beating me in every video game we buy him, like crushing me in NBA 2K, crushing me in Madden. I was like, he doesn't have OT.

He doesn't need. And so of course my wife who's smarter than me, she was like, yeah, he's probably so good at this because they took him out of class to do occupational therapy. Like they would pull him out of his class. So I don't hate video games. And I also think Fortnite might have saved him as a person during the pandemic. It was the only way he could see his friends for like weeks and weeks on end. They weren't in school. All their sports were canceled.

He lived on Fortnite like six, seven hours a day. And never did I even consider taking him off of it because what else was he going to talk to me? Like he needs to be talking to his friends. So him calling his friends like MF and fu and like i'll kill you and like i'll come to your house for real and kill you if you do that again and what's wrong with you and you suck like just listening to that coming from the basement yeah i was like smiling i was like okay this kid has a social life it's a thing so i'm pro i'm pro video game um all right

i think what it'll be tough to top that but we're going to sell box and i'll tell you another thing i'm gonna say this really quickly stop telling me you can't hire people literally there's still seven million people without jobs from before the uh the pandemic there are 75 million millennials in the workforce there's gonna be another 75 million gen z right behind them. Pay people and they'll come work for you. And if they're not trained to do what you need them to do, well then f***ing train them.

Like companies have been doing for 5,000 years. Like if you need somebody to perform a task, show them how to do it. And so here's my rant. If you're a Fortune 500 CEO saying you have thousands of unfilled jobs and then you're authorizing billion-dollar share buybacks and you're issuing yourself millions of dollars in stock options, where's the disconnect? Like that's the money that you could otherwise use to pay people or train them or both. What am I – am I missing anything? Cosigning this?

Yes. You want to remain silent for this? Sorry. You're worried that Cliff Asness is going to hear this and give you the other side? I was thinking about what I was going to say, to be honest. I forgot to put something in the doc. That's why I'm silent. Duncan, what do you think about that?

Yeah, I think it makes sense, especially if there's money for other things, like you're saying. Why not train people? Well, if you have 10,000 jobs you can't fill, but you have a billion- stock buyback authorized like what or like do you really want to fill those jobs you might not want to that might just be something you're saying to wall street well automation's coming right so well that's that's all that's the whole other thing all right that's that's my soapbox that's all i want to say on that who's going next amelia you want me to go michael you want me to go ahead of? Go ahead. You want me to go ahead of you?

Go ahead. I'll go. I'll go first. Well, I'll start with less attention. I think people should pay less attention to return to office discourse, and that's all everyone's talking about. Less? We should pay less?

Why? Interesting. Because it's taking up so much space. Every RIA is trying to figure out their plan and strategy to coming back. And if the business has been working successfully with your employees at home, don't put pressure on them to return. Like, let's keep it as is. And I think everyone's talking about it.

Everyone's trying to figure out what they're going to do, how they're going to run their practice back in the office. And I don't think it needs to be as much of a focus as it currently is. Because right now, I mean, that's the plan, September after Labor Day. Everyone's supposed to be going back. Well, here we are, September 2nd. Are you back in the office, guys? Are you listening to this on the way to work? Let us know. Yeah. Okay. We're back one day a week. So what do you think we should be paying more attention to? Because I think I agree with this. Guys, I hate that I'm bringing up tech again, but I'm going to. I think people should pay more attention to the integration of tech. So I was at a tech conference and the big theme

that kept coming up in all the interviews that we had with RIAs at the conference was they're basically trying to integrate all these different technologies across prospecting, planning, portfolio management. And it's, excuse my French, a shit show. And on top of that, you have consolidation in the TAMP and the tech industry. If you look at Orion, right. And Brinker that literally happened last year. So I it's causing a headache. And I think a lot of advisors don't know how to basically move all these softwares to work cohesively together. A lot. Chris, Chris Vann always has been on this for years that like the Holy grail is something that talks to everybody,

but there's too many pipes. Single sign-in is the advisor Holy Grail. It'll never happen. It's not going to happen. We spoke to too many companies and they're like, guys, we hear you. There's too many pipes. There's too many companies.

There's too many integrations and there's too many moving parts because all of these companies are continuously updating their software and or they're built on a legacy system and they literally can't. It's like, it's too late. Or they get acquired and the roadmap they told you.

And they just shut it off. Just changes. Yeah. And they're like, yeah, we were building this, but our new owner, another private equity firm thinks we should build that. A lot of fintech companies have made a lot of promises to us over the years that fell by the wayside. Well, so that, I mean, I posted this on Twitter, LinkedIn.

Every single person said, yes, this is an issue I'm facing. And then some tech platform said, come find us. We'll solve this issue, right? One thing I think we did that was very smart, it took us a while to make mistakes and figure it out. We now only contract with the biggest company in each vertical. So who do you guys use? Salesforce.

You know what I'm saying? Salesforce is not going to get acquired by a private equity firm and then lay off all the people that are helping us. We had different challenges with that. I mean, listen. Listen, it's tradeoffs. You trade some challenges for other ones. Nothing's perfect. Orion, which I've been hearing is for sale every day since we started working with them eight years ago.

So far, we're okay. And if it got sold, I feel like they would plan that well because everything they're big now. Who can afford them? The Fed? They're big. No, they're owned by a PE that might want to sell it to a bigger PE. InvestNet? That's what goes on these days.

No, private equity to a bigger private equity. I understand. Riskalyze, which just got sold. Hopefully they don't break all the APIs. Yeah. We broke that story. Right. But they're, but they're still going to run themselves.

I don't really even understand how it's a sale. Yeah. I'm a shareholder though. So I'm not going to complain at all. Uh, love you, Aaron. Uh, who else do we work with? I don't know. I feel like we work with like big companies though.

At this point we start, we did stuff with, we did stuff with like startup, uh, FinTech providers, like for robo asset management was a debacle we've done that too and i'd just rather pay up and work with the premium forgot about that remember that shit yes uh how do you make your tech decisions what do you look at so primarily you know efficiencies is a big thing for me it's just making sure that it's efficient and it works well for the clients. So obviously, custodian side Schwab, they do most of the big back office things

that I need. And I make decisions based on- Schwab provides a lot. Yes. As it is. Yes. And from there,

it's just really what kind of clients tell me. I'll bounce that off and see if it makes sense efficiently for the firm, for myself,

for the clients. But that's pretty simple. What do you think's harder for advisors these days? Picking an asset manager for an asset class or a category of investing or picking a tech provider? Tech.

It's going to have a bigger – I feel like the tech provider is going to have a bigger impact on the client satisfaction than whatever mutual fund manager you go with. Do you agree with that? Yeah, of course. Like huge, right? Tech's the future. Yeah. Okay. Delano, what do you got?

So I said people, we should all be paying a little bit more attention to what's happening in the private markets. I'm sure a lot of people are. But, you know, I'm seeing – I've just been obsessed with that in the last few months. And really, you know, just because it's from things that we're trying to – we're looking to do. But I just had the article in Crunchbase. There was $72.1 billion invested from seed to growth in Q1 of 2021. I think it's just an interesting area, especially for younger investors. We just talked all about trading and retail trading,

that short-term mind frame that especially is fixated on a lot of people. But everything that's done in the private markets in the early stage is a longer horizon. And I want myself, clients, all people who listen to this great podcast to really think about how they're aligning and allocating for longer horizons and to more growth of potential in the private markets. What are your solutions for getting clients access to this space? So one, we're just looking at creating a deal-by-deal syndication

for some of our clients that have accredited investor status. And that's going to be the big thing. And we're creating deal pipeline for that now and making sure that we have enough deal pipeline to go to clients and say, hey, there's an opportunity. Do you like it? We'll have the memo, everything. But that's one area.

Obviously, that's the biggest realm for us to do it. And that's the way I'm going to take an approach for it. I think a lot of people have been educating themselves, but the issue they find is one, analysis by paralysis. They're stuck because they don't know what to do, and it's very more complicated in most cases than other stuff. It's hard to know what to do because advisors are not trained to vet privately traded companies. Yeah. Let's just start with that. Let's say they think they're trained to do that vet privately traded companies. Yeah. Let's just start with that. Let's say they think they're trained to do that for a public stock.

Yeah. Okay. Sure. Right. No, I'm just saying. I watch Mad Money too. Sure. Sure.

Pick stocks. Okay. Now you're going to pick privately traded stocks where in addition to all the risks that you have buying a public company you have the risk that there's no liquidity whatsoever right and they're not reporting their financials to the new york stock exchange how do you not get eduardo'd like in social network and just be like oh uh you're gonna get that lid to zero and we're gonna maintain our which has actually happened to me in real life by the way uh in one instance that thing where they like sell it but they explain to you how you didn't actually own the shares that got sold. It was different shares.

Right. Like that literally has happened to me. Right. So actually, Delano, this is what I was going to say, the exact same thing that business is booming. I'm actually like writing a piece about this, that there are the business formation that we've seen, like literally in the, in the data is insane. And this is all a direct result of COVID.

People at home rethinking their lives. Do I really want to do this nine to five? It's engineers and software people leaving their fang jobs and going on their own. And Andreessen Horowitz just launched a $400 million seed fund to focus specifically on this. And people might think this is a bubble. And I think it's just started. Like the amount of money that's going into these companies is insane. And I am so, so, so, so bullish on the ramifications of this, just as a consumer of a lot of these services. I'm not talking about what this

is going to do with the economy, although I think it will transform it. I don't know what it's going to do with the stock market, but in terms of somebody that like uses services and we all do on a daily basis, I'm psyched. There's this one company that just raised a bunch of money where when your dashboard light comes on on your car, like, oh, what is this now? You have to go to Pep Boys. You have to wait an hour scrolling on Twitter while it gets diagnosed. They show you like whatever's wrong. You're like, yeah, sure.

Like, you don't know what you're, right? Yeah. It's a fan belt. Yeah. So it's just, it's a whole pain in the ass. And you got to, somebody's got to pick you up. You got to go. The whole thing sucks. The whole thing stinks. right? Yeah, it's a fan belt. Yeah, so it's just, it's a whole pain in the ass and you gotta, somebody's gotta pick you up, you gotta go, the whole thing sucks.

There's so many, yeah. The whole thing stinks. So there's a company that was just raised, I think $40 million. They come to your house, they come to your driveway, their technician comes in a Jeep

or whatever or a van and they fix your car and I'm sure you're gonna pay up for that, but like that's an example. Every time we think, oh, like all the food has been plopped,

like no, there is still so much innovation going on that people are building every day. So I'm pretty bullish about that. Right. The challenge advisors are going to have to answer more and more questions about how people can get access to venture backed startups, because these are like name brands now before they come public. Like you think about an Airbnb coming public, Robin Hood, Coinbase, the size that these things were, the mind share they already had in the minds of investors. Like you're going to have to have a better solution.

Then let's wait till an IPOs. And I agree with you. We should be paying a lot more attention to private markets for sure. Our client, our clients are so what do you want to or not? All right. Let's Mike, what do you got for or not all right let's uh mike what do you got for a soapbox anything i just did it i was literally going to say what delano said okay

let's do favorites and then we'll get out of here and i think like this was almost obligatory did we all spend the last three days trying to like donda uh new kanye west record i listened to it once that's it and? There's a couple songs. Being a Drake fan, I just have to go to the other side. I'm OVO, so I just listened to it once. Gave it a listen. 27 songs or whatnot. It was okay.

It was okay. That's my review. 27 songs? Yeah, 727. Scorpion was a double album. So Drake could do 27 songs and have it be cohesive? Yes. This was not that many how long is the album seven seven hours almost two hours it's ridiculous they're all right so i like the irishman i think you and i agree there are like some highlights

that are amazing like some high points but there's too much other stuff to wade through and maybe just too bad. Like if you want the good, you have to take all the other insanity. Yeah. That just might be what it means to be a Yeezy fan in 2021. Yeah. Amelia, you have a Donda take?

I know you do. Guys, I haven't listened. I feel like I should. That's a pretty strong take in and of itself. I know. I know. I need to. Okay. I've let you guys all itself. I know. I know. I need to. Okay.

I've let you guys all down. I can feel it. Have you listened, Michael? I listened to one eight-minute track, Jesus something. What was the name of that song? Jesus Walks? No, no. That's his old track.

Wait. I saw people. Jesus Lord Part 2 is the best track on the album. That was an eight-minute song. Actually, I like it. Amelia, come down. That has the locks on it. That's 2004.

There's two of those, though. I thought that was good. Jesus Lord Part 2 has the locks and Jay Electronica and maybe Kanye's best verse. Lyrical verse. And then it ends with Larry Hoover Jr. reading a statement

because Kanye is the one that went to the White House and got his father, what's it called? Pardoned. Yes. His father was like the head of the gangster disciples in Chicago. And he sat in jail for 30 years while this kid grew up. And then, so there's like a pretty powerful end to that track. Yeah. All right. If you're going to listen to

one Donda track, listen to Jesus Lord Part 2. That's the one I listen to. And then the rest is just not so great. Is it as good as Jesus Walks though? Be honest. Was that college dropout? That was in college. That was in like 2002, 2003? Kanye's workout plan?

It was like 2006. No. 2005 or 2006. 2004 or 2005. Through the wire was before Jesus Walks and that was 2003. That's what I'm thinking of. College dropout.

We can just say that he hasn't made a great album in 11 years. What did you think about the rollout? Which was where they said the millions were printed for him just by having the listening parties and listening shows in different cities. And that was the bigger play than just releasing 27 songs. So the rollout was exhausting.

And I think complicated whether or not you could even like what you heard. And I thought he was doing that so he could gauge the crowd's reaction and edit things out. It seems like he added during that process. Let me, let me just say it, say it like this. This might be one of the biggest years for hip hop in history.

By the time we're done. Like we got J Cole in April or May. We got Tyler, the creator this summer. We're going to get new Drake. If you're listening to this probably today. And God knows how many, how many tracks are going to be on that. um we're gonna get new drake uh if you're listening to this probably today uh and god knows how many how many tracks are gonna be on that um but we got like a new dj collin this

summer like we got a lot migos came out this this summer we got a lot of big records of all of them this is the one i'm least likely to still be listening to by the end of the year agreed you agree with me on that what do you think about the Drake rollout? I love it. The billboards. I do like it. The billboards, the whole graphic, the cover. When does Foreigner drop their album? And Jay's verse on the new Drake is going to be way hotter than whatever's on the Kanye record.

Exactly. Which I thought was weak. Sounded like he wrote it in the elevator, like on his way to Pilates. All right, let's keep going. Michael, your favorite for this week? Matt Klein has a sub stack. I actually am a paying subscriber,

but this piece was free on why interest rates are so low. And it is a demographic spoiler slash inequality story. I thought this was- It's not even worth discussing. I feel everyone should read this. Yeah, it's great. Okay, so this is on, what is it called? The overshoot.co is Matt was not even worth discussing. I feel everyone should read this. Yeah. Okay. So this is on what is called the overshoot

over. Co is is Matt Klein's. All right. Delano favorite. So this week, my favorite thing. I think Amelia was going to talk about this too, but white Lotus. Did you, did you watch it up top? Yeah. You guys are mad late on this. We're so late. We're

obsessed with it. I finished. Can we talk about it? That was good music. Can we do sport with it on this show. I finished. Can we talk about it? That was good music. Seriously. Can we do spoilers, guys? What do you want to say about it? I want to hear your take. I'm pretty upset, guys. I need to really let some out.

You don't like how it ended? I didn't like it at all. I predicted that shit on the show. I did. Well, you did predict it. You did it on the show? I did it on the show. Wait, why didn't you like it? Okay. I predicted that shit on the show. I did. No, I think you told me well, you did predict it. You did it on the show? I did it on the show. Wait, why didn't you like it? Okay, I just, the ending. I thought it was the obvious one. I mean, he was taking all the drugs. I was like, I didn't

the way he died, that was unexpected. But I thought he was going to be the one that died. So that, I was hoping for Olivia or Paula. Okay, so you were with me. Okay. Really? You wanted one of the teenage kids to die? What's wrong with you? They were just nasty. That's some take.

Paula? Really? Paula? They were nasty. Did you know girls like that when you were growing up? That's why you wanted them to die. I grew up in Westport, Connecticut. Of course I did.

That's the whole town. I grew up with Olivia. How'd you turn out so nice? Because I wasn't friends with Olivia. You're like one of my favorite people. How did you come out of Westport, Connecticut? Because I'm from England, darling. Okay.

And also because Olivia wasn't friends with me. How do you hold that back? That accent is so much better than your fake one. I know I need to do it more, and I think I'm going to keep this up for you. Is CityWire asking you to not do that because it's CityWire USA? Do I have to talk to- My voicemail's in this accent. I say thank you for calling Amelia Garland of CityWire

USA. Yeah, I mean that sounds more like you. Alright, stop. Duncan, we're going to do the whole show over again. But Amelia's going to stop play acting. She's going to talk British. I want to be me and I've been held back. Josh, thanks for letting me be free.

Oh, thanks for coming on, Keira Knightley. We appreciate it. Alright, so White Lotus, let free. Oh, thanks for coming on, Keira Knightley. We appreciate it. All right. So White Lotus, let me say one thing. All the rich people win and all the poor people or disadvantaged people lose. That's the point. I didn't see it going that way because there's never been a show that most shows with rich people, the rich people end up at the end. Or in the case of Succession, they're every scene of every episode.

They were just miserable. This was the opposite. This was like they all kind of got what they wanted and everybody else that works for them or whatever comes out of this either dead. Yeah. Or in a war or in a war situation. Yeah. That was that's guts for HBO to like let Mike White Mike White end the series that way. Tanya killed me.

That scene where she's trying to throw her ashes off the boat. Oh, my God. That was the worst character I felt like. I agree. She did nothing for me. Although Uncle Rico, the guy from Napoleon Dynamite, her boyfriend, that was Uncle Rico. Oh, okay. That was Uncle Rico?

I love Napoleon Dynamite. We're old. Napoleon Dynamite is like 15 years ago at least. My lips are so chapped. But even still, he did not age well. I can't. Dude, he aged better than I will. Come on.

Yeah, well, true. Okay, fair. All right, Amelia, favorites. So I was on White Lotus too. Yeah. We're going to move past that. We're going to move past that. We don't need to go into it again.

I'm too devastated. On what I'm listening to, guys, I feel bad. I'm not on the hip-hop tracks. I don't listen to that. I've been listening to this. We're going to convert you. Keep coming back. Next one, I'll be listening.

Send me some tracks. Send me some tracks. I got you. I've been listening to that blend of rock, blues, reggae. Probably like most of our listeners, quite frankly. Really into Slightly Stupid. I know that they're old, but I just, I went to Red Rocks. My little brother lives in Boulder.

So I was visiting him. First time there. Insane venue. And Citizen Cope, which is also another oldie. They opened. I remember Citizen Cope. Right? Okay.

And it was unbelievable. I was like, this music. It gets, it got me. I mean, the crowd there. How sick is Red Rocks as a place to see shows? One of the best places maybe in the whole world. Unbelievable. Yeah.

It's, it's truly. You know how I know it's good? I saw Dave Matthews there and I hate them. And it was a great show. I really hate Dave Matthews too. That makes me love you more. But at Red, but at Red Rocks, like it was like an awesome show. Yeah.

They did covers of Red Hot Chili Peppers, Soul to Squeeze. You guys know that one? Wow. You know, my take, my take on Dave Matthewppers, Soul to Squeeze. You guys know that one? Wow. You know, my take on Dave Matthews, he's not as good as like everyone thought when they were 16, but he's not as bad as everyone thinks when they're like 35. You know who's brilliant? Dave Matthews, our friend Dave. There is one song.

Is it Crush? We're not going to play it. Yeah, no. I'm not going to play it. And we're not going to sing it either. Wait, that's the one song you like, Crash? Yeah. Only song I like.

Okay. Well, so we got to the Dave Matthews portion of the show, and I think that's a good place to end. You guys are awesome, and this was so much fun having you both here. You had not met before today. No. And now you're going to be on the cover of City Wire. You see how we make dreams come true?

I thought this was a lot of fun. I can't wait to do it again and thank you guys for coming. Thank you. I feel like we got to a lot of advisor stuff, which a lot of our listeners are either clients of advisors or advisors themselves or serving advisors in

some capacity. And I don't think we've ever done a show this heavily on that topic, so I'm really glad we did. And I thought it was awesome. It done a show this heavily on that topic. So I'm really glad we did. And I thought it was awesome. It was awesome. And if you guys were happy with your performances, we can end here or we can just start from the beginning. I think we have to start from the beginning so I can talk like this.

For the latest in financial blogger couture, am I saying that word right? Check out idontshop.com. We have some new stuff in the store coming this fall. Not yet. YouTube.com slash the compound RWM. If you want to watch Amelia and Delano and me and Michael and see some of the highlights, that's where you want to go. That video will be up very soon. And if you love investing podcasts, make sure you check out – you have a podcast too, right?

Yeah. Plug it. What is it? Your Money, Your Life podcast. Thank you for allowing me to plug sure you check out, you have a podcast too, right? Yeah. Plug it. What is it? Your Money, Your Life podcast. Thank you for allowing me to plug it. Your Money, Your Life podcast. Your Money, Your Life. Okay.

You haven't invited me as a guest. I didn't know. I would invite you. I appreciate you inviting me. I'm pretty good at this. Don't want to come. I don't know if you can tell. All right.

Check out Delano's podcast and check out his Instagram. Make sure you follow Amelia on Twitter is your thing. Okay. Amelia Garland on Twitter. She's awesome. Garland goes west. At Garland goes west is the handle.

We'll link to that. And if you love investing podcasts, never miss Animal Spirits with Michael and Ben. And by the way, Ben, get well soon. You know, we love you. Feel better. Feel better. Right. And we will see everybody very

soon all right that was pretty good right yeah smash that where are my where are my altoids getting high on our supply over there yeah Yeah, yeah, yeah. I've opened two now. Guys, that was amazing. All right, so we'll do another episode tomorrow. So you guys come back. I love this so much. New doc. It's so easy.

You guys are making so much fun. I literally just smiled the entire time. I mean this. I'm literally smiling the entire time. I think I'm just looking

at Michael smiling to be right across from me.