The Compound and Friends - The Investor Utopia is Here with Eric Balchunas

Episode Date: May 8, 2026

On episode 241 of The Compound and Friends, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Downtown Josh Brown⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ are joined by returning guest Eric Balchunas to discuss: Eric's Bitcoin book research, the latest in the ETF landscape, the "hot sauce" investors are turning to, the SpaceX IPO, and much more! This episode is sponsored by Invesco and Janus Henderson Investors. Visit https://www.invesco.com/ to learn more. To learn more, visit https://www.janushenderson.com/securitizedmarkets Sign up for The Compound Newsletter and never miss out: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠thecompoundnews.com/subscribe⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Instagram: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠instagram.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Twitter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠twitter.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ LinkedIn: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠linkedin.com/company/the-compound-media/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ TikTok: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠tiktok.com/@thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. 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/⁠⁠⁠⁠⁠⁠⁠⁠⁠ Janus Henderson Investors Disclosure: Past performance is no guarantee of future results. Investing involves risk, including the possible loss of principal and fluctuation of value. Janus Henderson® and any other trademarks used herein are trademarks of Janus Henderson Group plc or one of its subsidiaries. © Janus Henderson Group plc. Learn more about your ad choices. Visit megaphone.fm/adchoices

Dear, don't even get me started. You're a Sixers fan. Don't get me started. I saw what you posted the other day and deleted. Which one? I saw the tweet. What did you? About mixed fans, harassing Sixers fans as if...

Oh, no, I didn't delete that. Oh, you didn't? No, no. I left that one up. Hold on, as if you are not the most aggressive fan base in the entire United States. Well, that's why you shouldn't do that. Literally. Literally.

I know. But it's different sports. Basketball fans are not as psychotic. They're not as psychotic. They're not as psychotic. And they're not as sarcicic. And they're not as drunk. No.

Probably can get away with it. And Embedd asked for it. If he shut his fucking mouth and didn't say anything. Oh, man. I get it. Everybody, I went to a next game with my kid three months ago. And, like, everybody booze and Bede constantly.

He's hated. No, he loves it. Oh, he likes it. He loves it. He's a great villain. But I'm saying he's hated here, yeah. Oh, yeah. He loves it.

He loves being a lot. It's also the longstanding thing with Kat. That's like seven years old already. But he said New Yorkers don't come to Philly. It's like, dude, literally, you're at your whole thing. Hold you up a side. Say, please come. Yeah.

Anyway, Josh and I are going. Josh is taking nugget. Tickets are plummeting like a stone. Are they? Cracking hard. Yeah, I might go. Lower bowl is now below 400. Really?

And you can get in for below 200. This might be the worst. This might be the worst Sixers home loss in postseason history. What's about to happen? Well, I will say there is. I don't love you saying that. Yeah. I said might be.

Pride coming from fall. Be careful. Seriously. Might be. And you know, the next. What are they going to do? They can't run... It's not about us.

It's about you. I know, but at the end of the day... Dude, don't end of the day. Eric, they can't... It's about you. You have no bench. Listen. Eric, they can't play maxi, but 45 minutes to the point where by the third quarter, he's settling for pull-up threes because he can't even make it coast to coast another time. What was...

I don't know. I don't know. Because we only have seven guys. You gave him away. Eight with Embed. You gave him away. By the way, yesterday I said to my friends, I'm happy. I mean, I'm sorry.

I want Embed to play. I wasn't happy that he would miss a game. You're clearly better without him. The offense is not stagnant. He's a corpse on defense. You guys are better without him. I'm not kidding. Let me just say one thing.

Go ahead. I'm okay if we lose. You know why? Because we beat the Celtics. F-F-F-D. The Celtics have owned us for 10 years. This was like defeating the dragon. It was a great win.

This is like... At game seven in their backyard. We beat him three times in TD. And it was glorious. And it felt good. I was like, we're going to win this game. I don't have that feeling with the Nix. I'm like, I think they're going to play.

I am actually happy that you guys beat the Celtics. Me too. But if you were playing the Celtics, I would become a Nix fan. Like, you would, you have no idea. I hate the Celtics. Nick's are my second favorite team. Really? But F you for now.

He's been in New York long enough. Yeah, no, I was here in the late 90s for Larry Johnson's four-point play. I was on a rooftop in Brooklyn at a party. No kidding. In my early 20s. And Alan Houston hit in the dropper against Miami. You guys, you guys are. I was there for that.

Lettrell Spreewell run where they lost the sands. But that was so fun. It's a great run. The sixers are very likable except them being. Like, Edgecombe and Maxie are very likable. And Maxi's incredible. And you know what? You're going to have them for, like, that's your core now for years to, hopefully, for years to come.

And those are great players. I agree. Edgecombe, his energy, he's really good at guarding. Brunson's going to score anyway, but I thought Edgecom did a good job. He gets over screens and he gets back on Brunson. He did great. He's good. Go to the game.

One of your dumb ass. bench players messed with Edgecombe at the end of the game. Did you see that? Yeah. Avrato. I saw the chirping. This is, remember Pritchard said he wasn't worried about him? I saw him tributt.

I don't know who was worth. Sometimes this stuff can actually change the complexion of a series. Dude, you have five players, barely. And Ubre is not a player. And neither is Andre Drummond is not a player. I love it. Like, the more prideful you are. Like, I'm telling you, New York's.

You don't have the ponies, Eric. Oh, Ubre is annoying, too. You, uh, yeah. Oh, man, it's had an unlikable player. I know. I mean, he's good. You know who I don't like is Josh Hart. He's always, every play, he's got that.

It's like, I want to punch him so bad. Yeah. And I like Villanova. My dad went there. I grew up at Villanova fan. Josh Hart was on your team. I like McHale Britch's. If Josh Howard was on your team, you would wait outside the building for autographs.

Probably. Okay. Come on. Yeah, no. Isn't sports the best? It is. It is. And you still have the Eagles and we still have the Giants.

So, like, I feel like it's a lot. It's only fair. It all balances out. Yeah. In the end, except for Jets fans. All right. No Sixers,

no Sixers. Hate on today's podcast. No Sixers hate. Oh, no, plenty of Sixers hate. I'm okay with it. I don't hate this. I hate it.

I hate Miami. I don't hate. If you were our first round matchup, I'd be more touchy, but we beat the Celtics. Yeah, no, it's great. It's house money. We sent Jayland Brown home.

And then he went on the next day on the live stream and was just so, what's the word? That was fpped up. So petty. He said, my favorite season ever is the one, is the one where my teammate, best friend, not best friend,

tore is Achilles and didn't play. I know. He's... Unbelievable. I don't like him. He's gone. Yeah. Oh, so good.

Anyway. But this is, if we beat you... You're not beating us. What? If what happens? We were 7.5 and more underdogs against the Celtics every game. One game we were 12. How about this?

And they were up 3-1. I don't even think... I don't even think Ananovi's going to get back in the series and we're still going to win. Okay. The best player. One of the things is going to play. When's your book coming out? November 1st.

Okay. Your quotes are so good, by the way. Are they? He has, everybody who reads it is going to identify with you. Okay. And there's one section where I refer to you as a spite coiner. Yeah. Yeah.

I love that. Totally. Because there are other spike corners. And it's a fine place to be. That's a great way. I'm a spite coin. Yeah. He's more.

He's more. He's more. I hated it so much that I needed to own it. I know. Just in case. I know. And it worked. Thank you.

You're not alone. Yeah. Michael, but it was early. I'm very saddy. He said, if this thing goes to $100,000 and I'm not in it, I'm going to be pitch black. Well, no, the quote was, I'm going to go into Times Square, pour gasoline on myself and light a match. I said that. Okay.

Yes. That was a lot. That's in the book. I stand by it. Oh, you have another one that's in there, which is like the Goodfellas? It's so good. Because he's like, he's comparing Bitcoiners to like Henry Hill. He's like, look at all this people going to their nine to five.

Yeah, yeah. I want to get 60% a year. He's like, so he's like, I get it. Like, who doesn't, who wants to get 10% a year when you get 60 a year? Those jobs are for schmuckers. Yeah, those jobs are for suckers. And do you know how many of these people there are? Like, in Dubai alone, there could be thousands of people who just, they're in Bitcoin

big enough that they never have to work again. And they're filming themselves like sitting by the pool in Dubai for the rest of their lives until they die of drug overdose. But there are so many of those. Like a lot of people. Yeah, there's a, there's, I think the, I want to say, 50 million people worldwide own at least some Bitcoin. That's crazy.

And I think in the U.S., 30 million is in that number. It might be, actually, it might be 50, 150, maybe 50 million in the U.S., something like that. Don't quote me, but it's in the tens of millions. It's more individuals than I thought that own Bitcoin in some form in the U.S. And in globally, what was interesting to me in the research was the per capita ownership of Bitcoin is the highest in these countries where the dictators have like driven the currency to the ground. It's all censored.

And the human rights people I talk to love it. So there are some of these interesting counterpoints to the summit reputation that some people have for it that I try to expose a little bit in the book. But there's also the lack of cash flows. And I think you have to acknowledge that. And then the gold thing. Gold's been around for 5,000 years.

It's not going away. So we, the book is called both sides of the coin. Like we want to give people both sides because all the books are either written by hardcore evangelists or people who hate it or the journalists making fun of said evangelists. Do you own Bitcoin? Are you allowed to? We are allowed to buy it, yeah.

But it threw, we have to put it like a form in and stuff. Do you own it? A little bit. Okay. But not much. I'm like the kind of person who would be like using it as hot sauce. Most people, one to two percent. If you think about the ant, like the rabidly anti-Bitcoin,

which I think is very small. Yeah. Okay. It's like Elizabeth Warren and five other people. bigger with Trump. I think some people see the Trump family getting involved and they're like, okay, now I don't like it. But do you want to include

them or not? Are we talking haters before that? Yeah, just yeah, because that'll come and go. That'll come and go. Because if Democrats decide they're going to court the crypto vote, then that'll change. Go away. But just from a- Paul Krugman's of the world.

I would just say from like a professional investor standpoint, the hardcore haters, right? Yeah. All like the OC kid. The three reasons. Yeah, that guy. Yeah, he just hates it. So I...

Hold on. The three reasons, whether they admit it or not, working backwards from the least severe to the most. So number three would be, I missed it. Yes. Okay. So we all acknowledge it's like human nature. Number two would be it seems like it's a lottery ticket.

And it seems like a lot of people made a lot of money. And they didn't do any. It's a Ponzi lottery. Fine, but like they didn't do anything to deserve it. There's a lot of that, right? And then number one is like, I don't understand why do we need this? Yeah. Everything.

And that first category of people that I'm talking about, they've never lived overseas. They've never lived in a country where the currency went to zero. Yeah. They've never had to flee somewhere in the middle of the night. Yeah. So they really don't understand that aspect of it. But you got to give it to them on the other two. points. It is lottery-esque. Some people were just faster to buy lottery tickets. Yeah. Well,

well, the only thing I say to that is those people who hold it survived, you know, like multiple 70% drawdowns. So they earned what they did on returns. That's like getting tortured for like a year. Yeah. So that's why when the ETS came out, there's a thing called a silent IPO. A lot of individuals sold and ETS and corporations bought in the past year. That's sort of what caused a drawdown. And some people call that a silent IPO. So some of these OGs that had like a lot of money. probably they're like 35 now and maybe they have a partner maybe they're getting a mortgage like so they're like cashing out a little bit i have no problem with that that's just like getting early in facebook or something like you earned it because to survive those drawdowns they earned it when that's your

whole asset by the way a lot of them aren't anything else they earned it and they survived that yeah now one other aspect of this a lot of them are saying things like i was a visionary it's like well you risked a thousand dollars and turn them into 10 million dollars were you really a visionary or you just risk $1,000? It's a good question. Again, when something's going down like 70, and I think it went down 80% at one point, you immediately get, your psyche gets weird.

You think it's bad and it's awful and it's going away. So to not think that, it is a little bit visionary because you have to see through that darkness. That's not easy. I agree with that. I mean, even in 2008, stocks went down 37%. Most people thought it's over. But let me ask you this.

It sounds like 37%. If you turn 1,000 to 10 million, Yeah. But the thousand was four million and then down to $400,000. And then you voted up to $10 million. That's not easy. You deserve a lot of part credit, a lot of credit. But also, do you get credit for just being insane?

No offense? Because that's insane. Well, there was this guy. But respectfully insane. Insane to watch $4 million turn into $400,000 and not do anything on the whole way down. Yeah. Yeah. Yeah.

There was a podcast, this guy, I don't even know him, but it was a good podcast called the Bitcoin Matrix. This guy, American Hoddle, was on it. And he said he thought that surviving those drawdowns, only true psychopaths could actually do that. And it was like preparing them for something greater in the future when Bitcoin becomes like a huge currency. I know. There's some interesting takes on.

But hold on one second on this. Back to the book opens with, I didn't really care about Bitcoin. It was like off in the distance for other people like pickleball. But I did like like. like it pissed off the right people. I thought the high priest types were all like angry about it. Like they didn't just ignore it.

They were like angry. Who's quote was that? That's my quote. Your quote. I'm saying that. Jamie Diamond. I'm not going to say that. Charlie Munger.

You're anti-establishment. Oh, I'm anti-high priest. Yeah. I don't mind the establishment. I don't like these people who are like, I know everything. Yeah. I don't like holier than now.

And Bitcoin has a special ability to piss off holier than now people. On both sides. The other thing is, it survived, again, about eight, 50% drawdowns. And if you look at the things that have survived multiple 50% drawdowns, it's like Apple, Amazon, Berkshire, Florida real estate. I mean, all the best shit has come back

from multiple beatdowns. Tulip bulbs went down and never came back. Beanie babies down once. They can't even handle one punch, let alone five. So those two things made me respect it, and they still do. However, it would be tough for me to say, like I'm going to put all my money in Bitcoin.

That just doesn't make sense to me. I'm a big bobblehead. I'm into cash flows. I like stocks. I just don't know why both isn't an answer. A lot of people are one of the other. I'm a both guy. Yeah.

Not everything survived. Like, NFTs did not survive. NFTs went and a lot of cryptos didn't. I'm just talking about Bitcoin. Yeah. Right. But there were millions of NFTs and most of them are worth nothing.

Yes. I think Bitcoin, it's special compared to the other ones. I think the other ones are more like a little bit of businesses trying to solve like financial rails and become better tech for infrastructure. I think Bitcoin's more like a, you know, how rich people like to have hard assets to hedge against inflation like art and like real estate. Yeah. To me, Bitcoin is in a way a very convenient democratized version of that. It's something you can own easily that the government cannot debase.

So that that is sort of, I think, the value it has, but there is a lot of belief in it. You know, there is some faith involved in all this. But I will say when you dig into how the whole network was made up. And, I mean, there was a lot of people that came before that the influences were in it, just like the ETF. The ETF was built off a lot of influences. But the idea of making something that is like completely decentralized, like the computer, the nodes don't even know each other or like each other. Like, it doesn't matter. And it just goes on and on without a leader for 17 years.

That's not easy. So the incentive system in the actual decentralization is pretty incredible, let alone. So I think it's more interesting when you dig into it. So that part lands. Like, oh, Bitcoin has no purpose. Well, first of all, aside the debasement stuff, but it works. It just does what it does. It survives.

It's just kind of cool to have something that is worth value that is outside of the governments because one of the chapters we have is on inflation and monetary policy. And we don't go like full tinfoil hat, but we do say, look, if you're a politic, I don't think any of them are ever going to run on like taking back entitlements. You can't tax that much. Like it's hard to balance the budget. I don't think it'll ever happen. I mean, Doge couldn't do it, right?

So they're going to keep increasing the money supply in order to tax people in a way that they can't see, which is inflation. It's an easy way to tax people. This gives you some degree of a protection from that. not that it's also used as a currency around that. Some degree is doing a lot of work here. Well, this is also what gold's case is. So gold and Bitcoin have a similar case in terms of having something that is finite or scarce

that can't be debased. But I think the reason that the third group you mentioned, if you're a boomer and you've made a ton of money in stocks and they've done great for you, a little bit of inflation doesn't bother you. In fact, stocks are an inflation hedge. So you're like, I don't see the purpose in it. I think for younger people who do feel like there's something out there that's just like stealing from them, they can't quite put their finger on it.

This is, I think, part of why a socialist won in New York City. Prices go up. Let's start the show. There's a little cold open in the history of the show. All right. Well done. Yeah, sorry. All right.

What a cold open now. Very cold and very hot. Ladies and gentlemen. Did you have, yeah. Whoa, whoa, whoa. Stop the clock. Here's a word from our sponsor. Today's show is brought to you by Invesco.

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higher income diversified across various securitized sectors, or perhaps agency MBS exposure as part of their core, Janice Henderson seeks to offer a variety of securitized solutions. Janice Henderson investors. investing in a brighter future together. Learn more at jenneshedison.com slash securitized markets. Past performance is no guarantee of future results. Investing involves risk, including the possible loss of principle and fluctuation of value. Welcome to the compound and friends. All opinions expressed by Josh Brown, Michael Batnik, and their castmates are solely

their own opinions and do not reflect the opinion of Redholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. You want to do more Bitcoin? No, no, whatever you want. We have a lot of non-Bitcoin. You want any about the Nix?

A little more? The NICs? Don't you wish you rooted for the NICs? All right. Ladies and gentlemen, welcome to the compound and friends. Repeat guests, fan favorite, returning champion. Eric Balchunis in the house. Eric is senior ETA.

Give it up. Let's go. Give it up. All right. Guys, Eric is a senior ETF analyst at Bloomberg Intelligence covering the exchange traded fund industry. He is the author of the Bogle effect, a biography examining John Bogle's lasting influence on investing

and co-hosts the Trillions podcast, which explores the ETF landscape. Eric is back. So happy to have you. You excited? This is my favorite podcast. It's fired up. This is great.

Looks great. Keep getting more handsome. No, he's tan. He grew his hair out. It's combed. Were you just in Europe? Where were you? He looks European.

I couldn't have my finger on it. Yeah, it rubbed off on me, I guess. Well, I went from Madrid to, I went from a Vanguard event in Madrid to a Bitcoin event in Vegas, which is probably the biggest. I wouldn't recommend it. It's too much. Too much too soon. You need a middle ground there.

That's like almost you left. You are planet hopping, right? That's cold. A sauna cold plunge. That's light speed right there. Yeah. Yeah. Planned.

Where do you want to start? All right. We're going to do a lot of ETF stuff today. We have the expert in the house. But I want to talk markets for a second because we showed a chart earlier in the year. It was February. We said, this is like some weird shit. You don't see what's happening today very often.

So that continues through when it's now May. So several months. months later. Back in February, before the war, the market was acting weird. You had stocks that were getting blown up all over the place. And yet, the index was at an all-time high. And part of this is a market cap-weighted story. But it wasn't just the S&P that was at an all-time high. You also had the equal-weight at an all-time high with stocks getting blown up all over the place. So we shared this chart in February. John Charterdam, please. We showed when 115 stocks fell at, you know, at least 7% in a single session across a rolling eight day period.

So basically a quarter of the index, full blower, blew up in a single day, and yet the market was at an all-time high. Okay, this was back in February. I said to chart kid yesterday, hey, I think something weird is happening again today. The market was up 1.4%. And yet, I'm scrolling down the screen. I see a lot of stocks down a lot, like a lot. There was a couple that were down 20, a bunch of stocks that were down 10.

So again, he shared a chart. He made a chart. We had 20 stocks yesterday that were down 5%. At the same time, the index gained 1.4%. And similar to the chart that we just showed, John, go back and go forward. So go back, please. Similar to the chart that we just showed, this type of price action normally happens in a bare market, chart forward.

And here, of course, obviously, we're not in a bare market. So when this happens on average, the market is in a 21% drawdown. So this is a combination. The cap waiting is throwing things off. AI is throwing things off. And of course, it is earning season. But some weird shit is happening again in the market and it's been happening all year.

Would you like to explain the market? Well, how could this be? Well, first of all, this is why indexing rules. You don't have to worry about any of this. It's just going to work out in the net result that the index is up. That's great. At the Vanguard event I was at, there was a reminder of that Besson Binder study

where 4% of the stocks create all the wealth. I mean, if half the stocks can't even keep up with treasuries, there's something similar here. A lot of stocks just aren't that good, you know, and you have a couple that just drive the market. This is why it is important, arguably, to market cap weight if you do index. Equal weight can be good at times, though. You know, if you think there's going to be, I feel like every fourth year, the little guys have to catch up, international has to catch up. Tactically equal weight, but strategically market cap weight. Yeah, I mean, I just did a note today looking at ARC.

and if ARC could just let their winners run Navidia, Bitcoin, Tesla. That was good stuff. It would have been the greatest active managing performance ever. But they have a discipline rebalancing, like equal weighting. And the equal weighted index... So they're cutting their winners. Boy, you compare it to Barron.

Barron didn't. Barron let Tesla take over the whole fund. So Tesla was a 50% waiting at one point. Yeah. But Barron is up 750% in 10 years. The only active manager that we found that has beaten the cues, that's how hard it is. And he did it just by letting, and Kathy had Navidia and Bitcoin, too, by the way.

Those were up 5X Tesla. So she had the good eye, and she was an ETF because Barron got no flows because they did it all in a mutual fund. So Kathy had the good eye to be in an ETF and have those picks, but the rebalancing, I think held her back from like just totally exploding. Interesting tale and rebalancing being absolutely critical, coupling, stock picking. I mean, you got to know, like, when. you have a real winner, don't mess with success.

You know what I mean? It's like when we traded Jimmy Butler. Why would you trade Jimmy Butler? It makes no sense. Tobias Harris over me? Hold on, but is Arc systematically rebalancing or it's their own kind of internal time to rebalance? So from what I know, they have a lot of, they have like 35 stocks, right? They may like that small biotech stock, you know, a lot too.

So if Tesla does well, you take your profits to keep it at 11%, 12%, then you can buy a little more of that other stock you like that went down. Yeah. But the problem is just like equal weighting, you end up funneling money to stuff that isn't doing that well and taking it away from the stuff that's just going to keep winning and winning. And that's why equal weighted, underperformed market cap weighted since 90 by about 1,000 percentage points, even though it has good runs.

And it's logical. If you told somebody this, you're like, makes a lot of sense. Let's take profits because you don't know what's going to happen in the future. But it's almost like it's counterintuitive to just like, let this thing just like take over. It's interrupting the compounding. Yes.

The thing is, though, we're in a fairly rare period where we have the same market leaders for like the 15th consecutive. Well, this is another point that we brought up with the Mag 7 being 35% of the index because like, oh, is it concentrated? I think that they don't really, it doesn't seem like they enforce antitrust laws anymore. No, they did try under Biden, but it didn't work. Well, because we looked inside, you know, the Mag 7 has acquired 850 companies. Wow.

And some of these are massive, right? Like MGM and Whole Foods. And like Google, we look, YouTube would be like the 20th biggest stock if they spun it out. And that's one of 270 acquisitions by Google. So if you look at the Mag 7 is 70 companies, you chill out a little more. Plus America isn't even that concentrated versus other markets. So a lot of what we do on our team is because there's so much like, hysteria and hyper, what's the word I'm looking for?

Hyperbolic. Hyperbole. Hyperbole out there. And histrionics that we're trying to like make everybody just calm down. Because you can midwit overthink this. You could just midwit yourself into the poor house. Whereas the Jedi and the dumb dumb are like, hey, US stocks are good. It's just not complicated.

Same thing with Bitcoin. These guys are like, oh, is it going? I was like, look, if you really believe in it, you like it. All right. Well, buy the book. Jeez. Well, no, but it's a really, it's a... But it might just own a couple good things. In fact, most of the people who go to, like, the business schools and the CFA, they really

should incorporate, like, patience trainings and, like, just time and how to, like, let time pass. Because I think half the battle here is just not messing with it. The art of doing nothing, which is the last chapter in the Bogle effect. There's another plug for you. But it's a really important point that you make. And back to the thing with, like, you know, Facebook board, Instagram. and Google bought YouTube. And people in the antitrust side will say,

well, if those companies had grown up to be their own thing, you know, X would be worth it. But then you have to remind yourself, oh, wait a minute. The reason why Instagram has billions of users is because it got sucked into the Facebook vortex and then all these people were pushed to it. Obviously, Google search rankings have helped YouTube

become the largest video platform. It wasn't a guarantee that they were going to, own that spot, I don't know, 20 some odd years after the thing was formed. So we don't enforce antitrust. We are forced to invest in companies that are themselves collections of companies, but we shouldn't pretend like they didn't create these monsters themselves. It wasn't like they were just allowed to buy things. They built them. These were built products. Absolutely. But I look back, I was the last market leader, GE, I'm pretty sure. Anyway, I look back at the last time the number one stock,

I think it was GE was like the number one stock in the S&P. Right? Is that right? Yeah. In like basically about 20 years ago. And GE, all told, acquired 70 companies. Yeah, also a conglomerate. Yeah, but not 270.

Right. Yeah. I see. So one of the reason why this is happening is because obviously AI is distorting everything. Yeah. Creating mega winners and mega losers. There is so much dispersion within the index right now,

especially within tech. John, throw this up. This is from Barclays derivative research sources Bloomberg. Average big tech dispersion. So they're showing that big tech earnings dispersion has surged around recent announcements with Q1, 2026 standing out as the highest on record. Data Dogg yesterday or today was up like 30-something percent. Today. Today?

Yeah. The software names are catching a monster bid. Fortinette, 21% today up after earnings. And then you can find one that's absolutely crunched. So it's all over the map. Lastly, in terms of the calming down, the hysteria, which I know you love to do, so do I. There is a lot of talk about a bubble. Is this a bubble?

Is this like the 90s? We're talking to this yesterday. To me, I know, like, listen, I throw it on the word bubble like casually. But if you're actually debating it, to me, the meaning of the word bubble is prices today for which you cannot possibly plausibly justify at any fundamental future state. And that's just not where we are today, in my opinion. I think that the prices for a lot of these companies, even though the price seems to make sense,

seems to be egregious, look what the earnings are doing. And maybe the earnings are temporary, but the price is responding to the earnings. So last thing, Eric, and then you can go. The somebody made this chart, Blue Curtic Market Insights. You could leave after this, he said. Blue Cardic Market Insights has a chart of the NASDAQ 100,

showing the annual count of a daily plus or minus 1% move. And there are 17 updates in the NASAC 100, so far year to date. And in 2000, there was 103. And in 1999, there was 69. And the year before that, there was 62. We are not seeing anywhere near the type of euphoric price action indiscriminate buying that we saw on the late 90s. I'd love to see U.E run this, but just with the socks.

Yeah, the socks are going mental. The socks would look like 1999. Sorry, it definitely would. Yeah. Right. Yeah. Yeah. Yeah.

Yeah. I mean, a guy in our team who he left, but he did a study and found that they weren't quite as stretched as the four horsemen in the late 90s. But they're stretched. So the problem is people were saying this 200% I go to. So like when do you pull the trigger? My thesis is if you are that nervous about equity valuations and you think like, instead of calling a top and like rooting for like chaos,

just buy more cash or buy hard assets or maybe you could even buy like put options. I think there's a way to be optimistic stocks and be ready for the fall versus being the Mr. Big Short guy. I think that's where I would go. It depends on what you do. If you're selling a newsletter, you need to. Seriously. If your job is my substack and I need to call the top and then when it goes against me, I need to get increasingly negative. Oh, no, I see it.

I see it. The problem with that is somebody should invent a service that keeps track of them like batting averages. I mean, and then when they go on TV, it says, oh, I'm batting, you know, 0.07 percent. It's just like, you know, the opportunity cost of listening to somebody who has had 20 top calls that are wrong is astronomical. But here's the thing. I don't think anybody's listening anymore. I even see the headlines and the columnists and the economists and the economists. It's especially heavy under Trump because a lot of stuff makes everyone like, oh, my God, everything's going to hell.

But like the Voo people, IVV, even Spider, like all of the cheap beta people are unfazed. ETFs took in a record amount of money last year and they're about to break that record again this year. What are those records? Okay. So there's three major records, flows, volume, and launches. Last year saw $1.5 trillion in flows, $1,100 launches. That's four a day. I know.

Job security. Oh, my God. 1,100 ETFs launched last year. Yeah. I remember once we were at a, we were at inside ETS. We were outside of one of those fire pits and smart beta was all the rage. And you leaned back, kind of took your sip, your drink, he's like, we need a new factor. Yeah.

I did say that. That's that 2015. Turns out I invented it. We'll talk about it a little while. So volume was 65 trillion last year. All those were 20% over the old record. This year, they're headed for $2 trillion. 90 trillion in volume, which is in about 1,200 launches.

So everybody's happy who's like retail advisors. They seem to be not, I wish there was a way to measure the sentiment from people who are buying holders, the vanguardians of the world, versus the headlines. The gap is so wide right now. It's weird. So I don't know what to say. Like, I think you're right. You get more clicks and more attention if you're like, oh, man, it's time to worry.

But we've, on our team, we keep throwing these headlines in the chat and like, oh, here we go again. And the market goes up 20% after that. So it's just difficult because nobody knows the future. I do. You want to know what's going to send people into a rage? I'll tell you the future right now. Go ahead. I'm not going to tell you what it's going to mean for prices.

But here's what's going to happen. This is really going to send people off the deep end. The people who have been naysaying the bull market, not even for 10 years, like for 10 months, this is going to really piss them off. When this Iranian thing fizzles out without some sort of catastrophe, price of oil probably doesn't hover back down to 60, but maybe just sticks around 70s, 80s.

Okay, no major conflagration, no real ceasefire, it just kind of is. Okay, that's an outcome that the bearers don't love. Then we don't get a private credit blow up. We don't get a private equity blow up. We don't get like one of these major funds like literally going to zero. So that doesn't happen.

So you get gas prices come down. No private equity blow up. Earnings continue to grow throughout the rest of the year. And then SpaceX comes public. Doesn't blow a hole in the side of the NASDAQ. Open AI comes public. Doesn't destroy everybody who invest in it. And if you're bearish throughout all of this,

and every one of these things represents the reason for the next bear market, right? And none of them plays out for you. That's it. Like, where are we going? going next. I want one of them. You'll see the next pandemic. Like, what are you even going to say?

I have to think there's a, they have to be having internal existential crisis. But I also have this other theory that the people saying that literally are long vo. Like, I think everybody's long voo, but because you have to get clicks and there's all this noise, I don't know. I wish you could see people's holdings when they, when they write. Like, I wish at the bottom it told you like exactly with their portfolio. He said, don't tell me what you think. Show me your portfolio. Yeah.

A, uh, a, a, a, a, a, a, a, a wholeseller, a wholesaler, for one of the big three index providers who shall remain nameless, um, a million years ago once told me about all the macro hedge fund masters who had index portfolios set up, like, very quietly. Now, they also owned a ton of their own hedge funds. So it's not like they weren't also eating their own cooking. Yeah. But I do agree with you. There is some element of like, it feels too good to be true.

I'm not selling, but just in case, let me tweet some negative shit out just to like make it look like I'm not like an insane wild-eyed bull. But wait. Was it Morgan Housel who was like being skeptical and negative looks like you care? Yeah. Whereas being optimistic looks reckless. Reckless. And naive. Especially in hindsight of something bad does happen.

But, and Tom Lee gets a lot of crap. for this because he's being right. Yeah. But directionally, you would have made a lot more money listening to him even if his price targets

weren't hit. The risk of embarrassing ourselves, we are at all time highs and we're being very positive and very negative to the bears, you know, understandably so. There is some weird shit happening

at the index level to make room for SpaceX. What's going on? Because I don't know that the market can survive a trillion dollar IPO at this point. Can it? It's not a trillion dollars, though.

Okay, fine. Fine. How much money does it need to raise? Between that and Anthropic. How much money will, like when it enters the market? What are they saying? Is it $100 billion? What are they looking at?

Well, I heard that it was going to IPO at $1 to $2 trillion. So how much are they selling? I don't know. Well, figure 10 to 15%. All right, so $100 to $200 billion? You think there's not a... Oh my God. The stock market, what is it, $80 trillion or something?

What's the size of $100? I think there's $100. I think there's a hundred billion for... I think there's a hundred trillion. Because they've raised so much money in the private market. Yeah. They have so many shareholders. They have a lot of people who think their shareholders

but aren't, which is a whole other interesting thing that's going to happen with all the SPVs and all the Russian doll, like how many versions of this SPV is investing on someone else's balance sheet. But like, I feel like it's so obvious that that should be the market top that it probably won't be. It should be. It's poetic. If you get a trillion and change dollar IPO from Elon Musk and that is the last day, then as

that goes up for the year. It would make perfect sense to me. Yeah. The other thing is a lot of people who are out there saying all these index fund investors, they don't know what's coming. And I'm like, yeah, we do. Honestly. Yeah, 2% sleeve in SpaceX.

Well, no, no, not even the SpaceX. Just in general. It's like, dude, we understand what corrections are. Like, we have a diversified portfolio. Like, things go down. It doesn't mean it's not good long term. Like, it can go down for a whole year. 2022 is awful.

and everything's up after that. Generally speaking, I think, again, I come back to Bogle and Buffett a lot, and both of them are like, you know, just buy U.S. stocks and just wait. Like, it's not complicated. And those are the two like masters, right? You can trust them.

They're like on like Yoda level of markets. They're not like slinging anything cheap. And they would say the same thing. And they know it's tough to time. But they would say, look, if you can't handle a 50% drawdown, don't be in stocks. But what's going on the committee level

with these names? What do you mean? with SpaceX. Yeah, so SpaceX is, well, so Dave Nadig, who you know well, he, we had a, not a debate, but we had a discussion on. I know him so well, I call him Dave Notting. Notic, yeah. That's how well.

That's how well I know. You say notting, I say Nadig, let's call the whole thing off. Yeah. Anyway, he'll love this. Okay. So anyway, he doesn't like that NASDAX is going to change the index to let it in. I'm a little more liberal on this front because as an investor, I kind of won exposure. Tesla went up, I think, 60% in the first year, even though it went down a couple days after the IPO.

Like, things can still go up after it IPOs. But so what if it goes down? The other thing is a lot of IPOs back in the day would have time to grow as small caps, mid-caps, large-caps. So the index rules made sense. If you're coming in, it's like LeBron going right to the Lakers or, I mean, the Cavs, skipping college. If you're coming in that big and good, you could argue that you skipped a lot of the growing that you would, the rules were made for.

So I don't know. It's complicated. I would just say, you know, investing, be careful. For the listener, just the controversy that you're describing, SpaceX got some sort of a guarantee by the index provided. How did this whole thing go down? They had a vote and it said like, yeah, after 15 days. This is NASDAQ?

Yeah. So NASDAQ said to SpaceX, if you go public on our exchange, will include you in NASDAQ 100? It was, again, it's something like this. they had a vote that they're going to change the rules to let NASDAQ in, I mean, the SpaceX in, I think it's 15 days after the IPO. Now, why is it so important to SpaceX to be included in the index that quickly? Well, again, there's some- They need the liquidity.

Because right around that time, BlackRock and State Street both filed for their own version of the Q's. So the thesis, this is a thesis. We can't prove it. But the idea is that a lot of the asset managers have a lot of demand for SpaceX, but they don't want to go like Ron Barron and like just shove it in one of their funds. That's not their style. But if it's in the Q's and they have Q's products, then they can have their wholesalers have SpaceX somewhere. Can I ask you a tangential question to that?

Michael and I noticed this and I, I didn't bother clotting it. So you'll be my clod. Why all of a sudden are there these competing NASDAQ, uh, 100 funds coming out? Was there some sort of moratorium on them being able to? There's a lot of theories here. We get into some real like, what are the theories? Okay. One theory is that when... Let's back up.

So Invesco owns the triple Q. Yeah. It used to be power shares. Yeah. Or Invesco swallow power shares. But then Invesco had a vote that turned it into an open-end fund. Okay. And by doing that, there's no more forced marketing dollars.

And there are some people think that might upset NASDAQ because it means the cues aren't going to be marketed as much. Because when you're an open-end fund, it's better for a marketing. Vesco, because they get more revenue, unit trust has earmarked money for marketing, like a 12B1 fee. Open-end ETFs don't. And a couple of the early ETFs, like the Q's and Spy, are earmarked as their unit trust, so they have an earmark for marketing. There's a guarantee amount of money that should be spent to promote the four.

Yes. So if they go to an open-end fund, that goes away. So there's, that happens. When do they make that change? That was six months ago, five months ago. Didn't Fescoe break even on the cues or something like that? I don't know. Like that, that's that guy.

Most of the economics. Yeah, yeah, yeah. Okay. Famously. Yeah. So then I did not know if there was some special exclusive contract, but all I know is I shares followed for a Q's product and then State Street did. This all happened around when NASDAQ also said we're going to let SpaceX in within 15 days.

So I'm not sure which of these dots are connected or if they're just coincidental, but something's up. You know, so clearly I think the Q's is going to be how maybe some of the big ETF provides. are able to say, we have SpaceX too. Because, listen, the thing with private credit and private equity, private credit came out, nobody really cared. But private equity is sexy. SpaceX is sexy. People know this company, and they know OpenAI, they know NeuroLink. They want some of this. And these companies aren't going public anymore. So they can't get them in small caps, really. And so the private equity area is pretty sought after. And the venture-backed,

venture-backed private equity. And going to space and doing all this stuff is everybody sees it as a growth industry. So I don't blame people for wanting SpaceX exposure. Like it's pretty natural to me. But the thing is at some point, all the people in earlier looking to exit get their money and does that cause the price to go down and do retail get hurt? So I think that's why SpaceX cares what index they're in. Because if you're not in an index, you're not going to have the liquidity for 1,000 shareholders to exit. inside of the first year. And when I say a thousand shareholders, I don't mean retail. I mean

funds that have been investing in SpaceX for 10 years. And that's sort of the point of the IPO. They could raise money privately indefinitely, I assume. Yeah. Okay. So the actual point of the IPO is exit liquidity. Yeah. For people that have been in this thing forever, took a huge swing. Yes, they've made money. It wasn't guaranteed that they would make money. Yeah. And now they want to take a profit. They have their own investors and their own funds. That's the purpose of this going public now. The other thing that I think is that it's important to them what index they're in because they don't want to have something that drops in half because everybody's trying to sell that's been, you know, it's a long-lived asset. Most companies aren't private for this long and don't get this

big. It's totally unusual. So it should have an unusual index inclusion situation. I'm more okay with it. I understand. understand other people's pushback on it because indexes, there's all about rules. And if you change the rules, it's people get touchy. There's also people that just flat out don't like him or don't trust him. That's the thing. When it comes to Elon or the administration, you have to say, like, do you have to sort of do some math? Does this person just hate Elon?

Yes. And you have to do like calculus. It sucks. I hate to have to do that, but it's a good point. So, Eric, from 2014 to 2019, 20, whatever, Your coverage was sort of boring. Now that you were doing anything wrong, I just mean the industry was boring.

It was the race to zero. Yeah. There was no new launches. Smart beta. It was all about passive, passive. It was just, it was exhaustingly boring. And hot sauce entered the chat.

Exhaustively boring. It was. Well, weren't you bored in 2017? The reason I liked it is I always saw Vanguard and the sort of push for cheaper the fee wars as punk rock. It was something that came in and it was so brutal, and it kind of made everyone on Wall Street a little nervous. And I thought that was

interesting. It was a huge disruption. So there was conflict, a conflict and some punk rock in that whole movement. Duncan and I didn't think that your podcast was nearly as boring as Michael did. Not his podcast, not his podcast as coverage. So the other thing is that fee war created what is now investor utopia. We have just arrived at the greatest time to ever be investor. You can get everything for under five bips. It's done. That's why this tokenization stuff, I'm like, easy. Market exposure is solved.

It's free. Yeah, I'm like, easy. You're gonna, I can, I don't have to get out of bed. I used to say, you can just roll out of bed and grab your phone. You can grab your phone in bed. Type in this and own anything in the world for like under five bips in a second. Commission free. We're so jaded.

Nobody cares. I know, but that's, that's amazing. And I agree. I agree. People have to sometimes remember how, That took a long time to get to. Eric, people that never called a broker on the phone. How much did it cost to buy a mutual fund back in the day?

The transaction fee. So I don't think I've ever told this story here before, and it only takes 10 seconds to tell. The first time I ever bought a stock ever, ever. I was 18, and I called my dad's broker. And his name was Jerry. He was at Merrill Lynch in, like, Huntington, Long Island. And just mocking me the entire time.

like, oh yeah, you want to buy? What do you want to buy? Like, and I don't even blame him. Like, looking back in hindsight, I don't blame him. I totally get it. It's like, oh, I got to take this call, my fucking client son. Hang on a sec, guys. I could almost picture the golf putter in his hand as, as, you know, the cordless phone

in between his chin and his shoulder. So I, for whatever reason, I gave him some ticker symbol of some stupid oil stock. Somebody told me to buy. The whole experience was so humiliating. And I knew it at the time. I was old enough to know that I was being mocked, right? Most people even aren't. And then, of course, the stock goes down five points.

It was like 13. I went to eight. I was so humiliated by the purchase. I was afraid to call him and ask him why it was down. And like, that stuck with me. So I'm with you. Anytime I see somebody creating ways for people to not have to go through that and be able to invest, I do think it's punk rock.

I do think it's cool. And we probably take for granted how much easier it is today for an 18-year-old to put their first trade in and not feel like a total fucking asshole versus even 25 years ago or maybe even 15 years ago. How you like me now, Jerry? So, yeah. By the way, speaking of punk rock. Jerry's probably a fan of the show now. Speaking of punk rock, you make the best metaphors with music with ETFs. Have you not been to a concert at Future Proof?

No. Well, okay. I think we haven't seen you. First of all, the future proof, you tend to. to have it right after Labor Day. Yeah. It's like the first... Well, it's the first week of school.

I have two young kids. It's just, it's a weird time. I got to go out there. It looks great. And you have the one in Miami that competes with VETA5. I'm not sure that's gonna happen. We're two weeks after Labor Day this year.

But I went to the first one when it was called what? No, no, no. No, it wasn't called Future Proof. No, don't even try it. This was like when Pearl Jam was called on a Friday. No, radio head was called on a Friday. You're thinking of wealth style.

Different event. Yeah. That was not this. It was close. It wasn't. Close because I was on stage. Like, what were the similarities? It was the same core group.

We're outside now. Yeah, I don't think so. And the words of, what, Nikki Santer. We invented that one too, so whatever. And the words of Nikki Santoro. I'm over here now. Okay. All right, hot sauce.

So the... Yeah, the guy a lot more interesting, for sure. The fees have bottomed. Did he just squirm that? He didn't even confirm that he's going to come to a future. He's not coming. It's like the 15th this year. No, but the concerts, dude.

The music. Yeah, I know. Who'd you get last year? It was like somebody pretty good. We had Bush. Better Than Ezra? Okay. In Miami, we had Better Than Ezra.

What was the name of the band? We never had better than Ezra. Oh, we. Ezra Ray. So it's like a comedy. It's Mark McGrath from Sugar Ray. Oh, perfect. With the guys from Better Than Ezra and Tonic.

And they're called. I call that Gen X Yacht Rock. It's so much fun. You need to get Hootie next time and Toad O'D'Hark. We had Blues Traveler and Bush. Perfect. It was so good. We had third eye.

We've had some amazing... Listen, tell me, was Bush closed with Comedown? Or was it my brother in L.A. song? He was so good, dude. He opened with Everything's End. Okay. They have like five bangers. Come Down was probably the closer.

Yeah, it's a good song. And I think they did Glisser in like two songs before. It was a great closing. No, Machinehead was the opener. Oh, they opened with Machine Head, you're right. That's the first strum on the guitar with, oh my God. You gotta come. All right.

So Feats have bottomed. chart five please the active the asset weighted ETF expense ratio has made a in my opinion well permanent is tough because there's so much money coming into the free the free ETFs but whatever it's made a local bottom because there's new hot shit like things are things are thinging the average fee bottom that is now lifting off the bottom slowly yeah this was the scariest chart on wall street because it's like

it's sort of like the rising sea levels when's this going to stop are we in trouble 17 bips looks like it's where it's bottomed and the reason that's going up is you do have a good chunk of money going into the degen hot sauce. That all charges 1%. The buffers, they all charge 90 bibs. And then Legacy Active is charging 30 to 40. Wait, go into the, oh, the Dgen. Degent.

He said Dgen, like it's French. Degent. Do you say Degent? I say Degent. I never heard, I never heard Degent. It's degenerate, but everyone says Degenerate. Yeah, but I'm saying, okay. He said the Degeneres.

No, I said Degend. Yeah, they say Geng. That's literally part of the word degenerate. Yeah. No, you're right. Listen, do you say potato? You ever see on the Simpsons when Mo is making fun of Homer for saying, oh, you're a garage.

What do you call it? A car hole. Oh, that's good. That's good. So, the 1,100 ECFs that launched last year, a lot of them are nowhere near a five basis point. Like, they, these are 70 basis point. Yes.

active things. I call it the hot sauce arms race. Yes. Because a lot of them will not make it. In fact, Aethon on my team did a good study of like so many are launching. There's like 452X stock ETF style, but there's only like $40 billion. So it's like $100 million or something per ETF. On average, there's $3 billion per ETF.

So in other words, it's flooded with supply. But you only need one hit to make it. So like granite shares launched 2X Navidia, it's got like $5 billion. That makes that person 50 million. a year in revenue. So you just need one. So they're going to, as Ben Johnson put it, you know, fire up the spaghetti cannon and just go crazy.

What does it cost to keep these almost dead ETFs alive? Very little, right? Very little, but they, I would say around at 1%, maybe 30 million you need to have a break-even point. Which means they can all basically trade forever. Here's what's all so brilliant. Most of them are long. So a lot of these guys came with quantum computing 2X, and I was like, oh, these

going to sell? First of all, there was enough interest. because they go up a lot. The volatility on some of these is like 20x, the S&P. I mean, it's like the ghost pepper of like hot sauce. Anyway, they pick U.S. stocks that are in growthy areas. So you get a little bit of flows. Then the market appreciation gives you assets too.

So you're profitable. You only need a little bit of flows. And then the market appreciation, you're set. I was talking to the guys that launched. It makes sense. I was talking to the guys that launched. I guess the skill. is either A, being so efficient

that you could launch a ton of shit or B, be a really highly attuned almost like a tastemaker or not a tastemaker. I know what you're saying. Somebody that just like sees, oh, everyone's going to be into that. You got to skate to where the ETF is going.

Yeah, they used to have these people at big brands. They'd have like somebody who just knows what the cool things are. You have to have a good ear to the ground for what... And Tuttle is a good example. Yeah. He says he is kind of a degen trader. He'll admit it. And he makes products that he would like to trade.

So I don't know if someone who's like from the legacy asset management could do this well. You kind of have to be one of those people. The round hill guys are worried at this. They're great at the DRAM thing. They just broke $2 billion. That's it. By the way, this is an insane story. Brilliant, though.

Brilliant. Tell the story. So the memory trade, which is these three memory stocks, Micron SK-Hynix and Samsung. Sandisk. Oh, Samsung. They control 95% of the memory

and these AI data centers are desperate for high bandwidth memory. So obviously there's demand. But you couldn't get all three in an ETF. You could get two of them in the South Korea ETF. So people started buying that. Roundhill noticed and was like,

wait, why don't we do one and throw micron in there? And we'll jack up the weightings using swaps because the diversification rules make it tricky. So they give you like 67, 65% of the portfolio It was just those three companies And it's the only one that gives you all three at that waiting And it came out and I was a little like asleep at the wheel

I was shocked. It traded 250 million the first day. I'm like what? These are crazy numbers Now yesterday it traded like more than Chevron like it's trading like in the billions in a month And it's got three billion in assets This is insane for a theme ETF. It's the it's the best debut by a mile But these are the guys that did meta so, so early that Zuckerberg had to buy the ticker. Yeah, which by the way, that just happened to SpaceX. We've had Will Hershey on the show. Do you hear that Tuttle had the SPAC ETF that he never closed?

The ticker was SPCX. So they wanted for SpaceX. So he, well, the SPAC ETF was like living in oblivion. Yeah. But instead of closing it, he let it hang around just in case. And it just changed tickers to something else, which I can't prove it, but that would indicate that they did buy it for SpaceX. Oh, interesting.

So that's a whole, I think the issuers are out there now. Reserving tickers for private companies. I was going to say, if I buy that ETF right now, will I get SpaceX? No, no, not at all. You'll get a really, like, beat up spec. You'll get a not available message on your, on your brokerage account because you can't do it. But hot sauce, we have a thesis that, you know, a lot of the portfolios have gotten pretty, people have stopped dating five-star managers and they've gotten married to like Voo and BND.

and they're like, I love this portfolio. I am off the market and I'm going to be with this for 50 years. But they want to have a little speculative fun on the top. You still want to have a fling. They want to have their flings. Couldn't agree more. So people have the fun account.

They have trading and they want wild and crazy there. So I think the hot sauce. Who's the Ashley Madison of ETFS yours? Oh, my God. You can't tell you. These people are in his coverage universe. I agree with that. I agree with that.

People are, you know what? Because you asked the question, you asked this question earlier about Bitcoin. Why can't people just be both? I have always said this. Why can't someone say, with 80% of my money, I want a low-cost, tax-efficient index market-cap-weighted portfolio? And then with 20% I want a core and explore and I want to do other stuff that's not representative within the index. And why do I have to be part of a tribe? And most people, they don't even, they're not even, most people are not even,

burdened with that question. They just do whatever they want. Who's paying attention? The flows would tell you that's what people are doing. 80% goes to cheap something, active or passive, and 20% goes to the hot sauce. And this is- This is yours. So this illustrates this point, I think, pretty well.

What you're saying here is- Well, this is- This number, right? This is the fact that- The number of funds. There's more active ETFs than passive ones now. Okay. Look at that.

That is crazy. Isn't that crazy? This is not dollars. This is number of funds. But what's crazy about this is there was literally no market for active ETS as recently as 10, 11 years ago. Yeah, look at the gap.

I know. So, by the way, that white line is only 10% asset share. So there's obviously this huge flooding of active products. Because try competing with the other line. What are you going to do? Like fight Vanguard and BlackRock?

You can't make it. It's too brutal. Games over. So that's where you have to launch. But the one, do you have the chart that has the beta adjusted fee demarcation line? By the way, if, okay, listen to me. Listen, no, no. This is my E equals MC squared.

All right. Walk us through this. I need a catchy moniker for this. So if you have something better than beta. I got you covered. This is terrible. Okay. Why did active equity stock pickers finally make it in ETFs?

Because that was a big thing. They could never break through. The pandemic. No. Kathy. Yes. Well, Kathy's, Kathy was one example, but now you got DFA. You've got Capital Group.

J.P. Morgan. Why are they all? She proved that it could work. I'm telling you. It's her. Yeah, but there's another thesis here, which is this. Okay. If you look at active share and expense ratio and you draw a 45 degree angle, a line,

and you look at the most successful products, and you look at where products see outflows, if you're above that, you're in the mix. You can get money. If you're below that, it's very difficult. Why? Because Vanguard made beta free. So you cannot charge for beta. Stop.

This is saying the more active you are. The more you can charge. The more you can charge. Isn't that logic? Because people have no fee sensitivity in hot sauce. But once you get into the core, people are very fee sensitive. Wait, but isn't a better way to say this, though? Go ahead.

Cheap or shiny? No, I think it's retail. advisor. Yeah, but I think even an advisor, if they're going to... Stop. I gotta go off mic for a second. This is where the advisors live. Sorry, this is where the advisors live. Yeah, yeah.

Very inactive. Therefore, the advisors can explain to their clients. Yeah, yeah. Like what the fund is going to do, what it mimics. Yeah. Okay. The advisors don't live here. Yeah.

They don't want that level of active. You're right. Okay. You know who buys this shit? You know buys this shit? People that really do want something that deviates from the market because they're not baking it into a back test for a financial plan. Yeah, I mean...

Am I crazy? I agree with you. Okay. And DFA rules and capital groups very good at that too. I would call that like it has less career risk. Yes, that's what I'm trying to say. If you have to explain yourself, you're not doing that. But back in the day, all those tickers,

would be in the lower right-hand corner. Because they'd be mutual funds. Yes. And you wouldn't buy them. Right. So if DFC was over on the lower right-hand corner, you wouldn't buy it. Because you're like, why am I buying beta for 90-bibs? Too expensive and too close to the benchmark?

Yes. 100%. So here's my metaphor. It's like a bag of potato chips. Just charge me for the chips, not the air. Oh, that's good. That's very good. That if you do that, you can make it in this world as a non-beta person.

That's very good. So your message is, this is really important, your message is if you're going to launch an active ETF, be very active, and then you don't have to explain why it's priced where it's priced. That's why half the launches are wild and crazy. All right. So earlier I said what I think a bubble is. Yeah. But there is another part of a bubble, which is the behavior, right? The way that investors are behaving.

And right now, our boy, Todd Stone has a chart that shows here comes the two X. Heinzx funds. Let's do it. We're looking at the one-year percent change. I've been waiting on this for a minute. Of the Bloomberg of flows into some of these ETFs. And I thought it was kidding, by the way. Multiple ETSs literally have filed for the two weeks.

And most of our listeners don't even know who S.K. Heinex is. It's a South Korean memory stock. It's basically that in Samsung or 50% of that index. But the flows, the one-year flows are completely off the charts, completely insane. And this is, this is, this is, uh, euphoric behavior. Yeah. Well, that's the price. There haven't been any launched.

They're dying to get those launched. However, however. However. Those are just filed? Those are just filings. Okay. All of the stuff he has there is the percent performance. We don't have flows.

Believe me, it will be a hit. But I've got a great data point for you. We have a note coming out on this this week from Rebecca in Asia. The S.K. Hynix, there's a 2x version in Hong Kong. It's so popular, because especially in South Korea, where the Degener per capita is like through the roof, certain Asian countries love. gamble. This ETF is the fourth biggest in the country already. It's 8% of the whole ETAF market.

2X. S.K. Heinex is the biggest E. The fourth biggest. But it's just, it's not even a year old. Think about that. That would be the equivalent of launching 2X Tesla here. And all of a sudden it's as big as VTI. But can I ask you, but can I, can I ask? The percentage of the weighting of that market, of this one ticker is absurd. Can I ask you an obvious question?

Can't that dollar amount in that fund get cut in half in one day? Yeah, if there's a 50% drawdown. Okay. I own a stock code. Wait, if it gets cut in half, where does the money go? It goes somewhere else. But I'm just making the point.

I own a stock called Shake Shack. It fell 35% today. Wait a minute. Well, you mean in your index? I don't want to talk. I don't want it personally. I don't own it personally. I don't own, like, professionally.

Is it a hedge? Is it a hedge? Yeah, it's a, right. It's a hedge against me being dangerously malnourished. There's a New York City ETF that Aethon might buy to hedge's rent. So that stock fell 30, I don't think it closed down 35%, but my point is, that can happen, that can happen to any stock in any time. That ETS will lose half of the dollars in there.

And South Korea will be, in the country will go into a great depression. That's part of the fun. But I'm just thinking the point. Oh, you know what else I was thinking about? I wanted to ask you, there's a difference between an RIA getting to $10 billion versus an ETF getting to $10 billion. Oh, yeah. Because the RIA, even if they're giving horrible advice, it does not have the potential to go

to $5 billion. An ETF that can happen in a week. One allocator says, you know what, we're switching from this fund to that fund. Yeah. These things are not equivalent. Eric, I was talking to a friend of mine yesterday who runs a big giant-ass management company, and one of their popular ETFs has a ton of money in it. And he said to the CFO, just model it at 50% less, like for cashful purposes.

Just pretend it's, pretend, we're at half. Because it's a mirage. Yeah. It's not like AUM, like, oh, we raise this money client by client. This happened with DXJ and Arc. These were flavor of the months for a while. Yeah. They went from nothing to, I don't know, listen.

say 20, 30 billion, but then down to like seven. Now, people are like, oh my God, it's a failure. I would say, no, just draw the line from nothingness to seven billion and you're fine. It is, it's sort of like, it's better to have love and lost and be at seven billion than to have never loved at all and be in oblivion. So some of these products come out and they're- But finish that thought, wait, finish that thought, though, an investment firm that goes from 30 billion to seven billion. Yeah. It's like the Titanic. Yeah. That's, that's, the difference between ETF, A-U-M? 100%.

You guys are in a different boat. Okay. And that's why I agree. I've always thought this. Like, the advisors understand psychology and emotions that, like, the asset managers really don't. They're just putting products out. You're supposed to use them as you see fit.

They're just fulfilling demand in the marketplace. Some of these are used by direct retail, though. They don't need to worry about you. Like, a lot of these are direct retail. They're bypassing you. But you guys have different needs, but you're very, well represented in the ETF flows. That's why VTI and Voo and SpyM and

GLD, like a lot of those are like, in fact, most of the flows goes to this stuff. I mean, it's just we've, what else can you say? Like, okay, you know, Voo is great. Like it took it, it takes in, VU grows at 1.25 billion a day. Isn't that crazy? Almost no matter what.

Where do you think that money's coming from? Is it coming from 401K rollovers? Like, is that part of it? Everything. Okay, it's coming from Target date funds. coming from just vanguardians who feel nothing. You know, they are just like, robo advisors. But it's 1.25 billion a day into just that one fund.

It's so much money. Well, it's about 800 million a day. The other part is asset growth because it went from like 600, I know, 560 billion to like 900 billion in a year. Like it's grown more than a billion a day in the past year. But the flows are, have never been seen. $750 million a day is crazy. That's just in flows.

even if it goes down. So it takes in, I don't know, $150 billion a year. This year could be a little higher. It's really remarkable. It's crazy. Yeah. But it's such a, if there's a perfect ETF, it might be that. You could say VTI, but then with VTI, you get small caps.

Bogle tended to lean a little. That's the same thing. Who cares? Well, the reason. Are they the same price? In Buffett's. Are they both three, what are they three basis points? Yeah, they're both three.

Okay. VTI get VTI is a little better for behavioral because if small caps have a good run or value, you don't have to worry about it, you own it. Right. But for people who can stand like a little small cap like regime change for a minute, Buff Buffett would probably recommend Voo because in his letter to Berkshire investors like 10 years ago, he said just by the S&P. This is three years.

Nobody cares. It's the exact same thing. Yeah, it doesn't matter really at the end of the day. I mean, you all, well, I want to ask you about the prediction market ATFs. Yeah. So I think that if there is enough liquidity, this is not my idea, but I think it's a good one. Let's say that there's enough liquidity on some of these exchanges where let's say there's contracts that have $10 million of liquidity, whatever the number is.

And there's an ETF that buys up every single yes for anything trading over $0.85. Because if something's over $0.85, it probably happens not 15% of the time, but let's say 12% of the time. All right, great. That's a 12% annual turn, even if there's some slip. 10%. And then you could get more aggressive, say, no, no, I only want to buy things that have a 70% outcome. And then you could slice it up and say, I want to do that, but only for sports. And then you could say, I only want to buy the guarantees. So I want to buy the 95 cents NFL favorites,

and I will make my 4.5% return or whatever it is. Like, I think all that's coming. The sports is an interesting one because there's some lawsuits and legislative issue with sports. but the political stuff is the first one they're trying to get past. So how is that going to work? Well, they're going to... Wait, wait, wait. An ETF that incorporates bets from the prediction market around politics? Yeah, so the ones that are slated, they actually had effective date of Monday, but we think

they'll probably be pushed back a little bit. Who's launching? Roundhill, bitwise, and granite shares. Okay. So the first ones that were slated, again, we don't know if they'll launch. Our Republican win in 28, 28, Republican, or Democrats. win in 2028. One's president, one's Senate, one's

House. Why can't I just do that on Cal She like a normal person? Because the ETF is in your brokerage account. Yeah. So, and it's a little more trust. The ability to do this in a brokerage account is the thing. The people said the same thing about crypto. You could have gotten crypto easily. People like ETFs because they're liquid. They're trustworthy. They do what they say they're going to do.

People like tickers. They like tickers. They're in the brokerage account. It's just, it's better in the plumbing. People that don't want to move money. That too. Like it's already, my money's at Schwab. I just want to do things. So if it goes, so whichever outcome does the ETF just get liquidated after that? Yeah, it'll either roll over to the next one or liquidate like a termination event.

We have things like that. We have things like that already, right? Both the bullet shares that are the bond maturity. Yeah. Okay. Good one. So we have, so we have that structure. The reason, and I want to get your take on this, it's interesting to me that say,

you know when there's a president. election or the Fed and all the analysts come out and say, oh, if Trump wins or Warren wins, this is going to happen. And then like half the time it doesn't happen, like the opposite happens. Every time. Basically. Yeah. These eliminate that.

I love that. You just get to bet on the macro event. There's no like guesswork. You on my take, that's what everyone wants. And I think it's, you're so right. You had people buying oil stocks for Trump's first. term because he was on the campaign trail saying things like drill baby drill. Yeah.

Didn't fucking mean anything. Oil was the worst performing sector in the market. And clean energy crushed under Trump. So even if you- It makes no sense. So if you are allocating like, oh, this is my Trump basket and then this is my Hillary basket. Yeah.

It's almost, it's astrology. It is. Whereas this is like, do you think Trump wins or do you think he loses? And if you think he wins, how much you're willing to risk? Yeah. Or how much do you want to make? here's what you'll have to risk. It does.

That's what everyone wants. Now imagine we could do economic releases like CPI, Fed. I think all the economic stuff will be prediction marketed. But then we're going to get into some weird stuff. You know, like some of these issues are going to launch some like, it's going to turn into silly season. Hold on. Before the silly season. Shalomey breaks up with Jenner.

Yeah. What's the name of Taylor Swift baby? I think that there could be global economic efficiencies created on these platforms. Yeah. And hear me out, the wisdom of the crowd, surveys are totally broken. Totally. Totally broken. They do not work.

If there are legitimate economic data points, things that can bring money to have some clarity there, and not that this is going to move the economy, but like, will Tesla deliver 500,000 car units or something like that? Yeah. But if you could do that of things that matter. Yeah. I think that we can have some better clarity to what's actually happening in the economy. Yeah.

I mean, honestly, this macro guesswork game, so much of it will be irrelevant. Show me the number. Show me the market. Yeah, you could just bet, like, will there be a recession in 12 months? And, like, if you are worried, instead of, like, hedging with something, so you could just use that. I mean, some people would argue, like, the options market allows some of this. You can just buy a put option. But now it's so clear. Who do you trust?

That are the economists? Yeah. I mean, and I think Polly Market really was born out of the fact that the political polls were really bad. and Polly Market had a better read on like what was happening. So I think people are more open to these being like a real market. But it is interesting. It's a whole new world. And the thing with Polly Market, though, and these prediction markets is it's endless possibilities.

Once the ETF and that marries, it's going to be, again, ETFs are never a dull moment, man. It's a wild loss. It's like, I don't know what's going to happen. But I do think some of these will be bigger hits than people think. will we be in a place in a couple years where people are literally using these in their portfolio and it's completely seen as legitimate, not sure? I don't think so. But I do think for people who are like hedging the market or speculating, these could come in handy

because you can eliminate guesswork. Yeah, the question of whether or not they'll come in handy is going to be a function of the amount of liquidity. Like if there's enough people that are willing to make these bets, which I'm not sure about, it seems like right now there might be for some things and not for all. It's a lot of sports. So we had the CEO. We had the CEO Schwab on stage. And we asked him, like, would you rule out ever having prediction markets?

He said no. But he said, like, it's 88% sports betting or whatever. And they don't want to be in sports betting. Yeah. But he did say, we think that there might be investor value to having economic prediction markets. That's the CEO of Schwab. So you know they're having meetings about it. They're not dismissing it out of hand.

Now, is Schwab going to be the first mover? No. Thomas Petterfay at Interactive is... They don't need to be. Petterfy is psychotically bullish on the prediction markets. Is he? Yeah. Psychotically bullish.

Yeah. I'm leaving a little room for, I don't know, but I would say that the other objection we already addressed. Why do you need an ETF? And I think we addressed that. So I think, again, ETFs are the great standardizer. They take everything that's frictiony or out there and they just bring it right to you in a format you're comfortable with.

It's a package that people, it's like, I don't have to do the, myself. Yeah. This is like, this expresses my view with one trade. Pricing transparency with the equity

market. So everything trades like it. They basically equitized everything. And that's what's happening here. So it's interesting.

I'm definitely taken more of my mind share lately thinking about how this will play out. Eric, could we do a little lightning round before we let you go?

Sure. Okay. What the death of the mall trade can tell us about the AI freak out. Yeah. I don't know if you have the chart, but remember the death?

It wasn't great. We threw it out. Okay. I'm just kidding. John? Remember the death of the mall? You were supposed to go long Amazon and short XRT. A lot of malls did die.

Yeah. But a lot of companies are not idiots. They figured out how to like sell stuff on the internet like Walmart. And so if you look 10 years later, XRT outperform clicks and empty, which were two ETSs that literally did the death of the ball trade. What's empty? Empty is shorting brick and mortar. I don't remember that. Get out of here.

That existed? Yeah. And ironically went to zero? Yeah. Well, the daily rebalancing probably was part of that corrosion. Okay. Clicks was going long, online, short brick and mortar. And that didn't work either?

It under-so-X-R-T beat both of them by a lot. But then guess would beat XRT by a lot? Voo. So here's my point. This whole thing of like AI, everyone freaks out, who's the winners and losers? I'm like, these companies are run by- Probably the S&P 500 is the winner. Yeah, that's the winner.

Because you know why these companies are not dumb. They're run by smart people. They're going to incorporate AI. Some will. Yeah. There's a couple that, you know, might not make it. But over time that that online internet commerce ended up floating up into the Voo. Like it ultimately gets rewarded in that market cap weighted situation.

I know you listened to every episode of the show. We had a guest on last week who is structurally like going to be long for the next 30 years, some of these software companies. And that was his comment. He said of the top 20 e-commerce companies, in America, how many of them do you think were a new economy post-internet, and how many do you think were old economy? And I think 15 of the 20 largest e-commerce websites are run by companies like Target. Yeah.

Like 15 of 20. So that's what you're illustrating here. We arrive at the same point. Yeah. Okay. It's a great point. I'm curious what your thoughts are about gold, oil, ETFs. They sort of had a great, gold had a great year last year.

oil had a good start of the year leading up into the hostilities and now it seems like it's a no man land no man's land when you show us the trillion and a half dollars coming into ETFs a lot of it active are these ETFs still attract the commodities still attracting their fair share are they less popular than they used to be like where do those things stand these days gLD was a top 10 or last year it definitely sees flows people love gLD and iAU those are they're There's no weird stuff. Staples. Yeah, you're not rolling futures there.

So people do like those. Gold seemed to be a trading thing. I don't know if people were just all of a sudden allocating. It seemed like there was a lot of FOMO, same with silver. And then some came off. So I think gold is- We still don't have a great oil ETF. Don't mess with oil.

USO is a wolf and sheep's clothing. It's why we invented the traffic light system. Basically, it rolls futures. And so some years you can have roll costs of 30%. So you can get the call right, but like, lose a lot of money. be careful. So I would look at that as like a rate at our movie, USO. Investors use XLD will be more like PG.

Yeah, I would use XLE. We have Vince Piazza, who works in BI. He likes crack because crack is refiners. And if the straight of Hormuz was closed, you got to get oil from other places where it's not as needs more refining. So this is kind of like long equity plays around oil that I think makes sense

because there's no weird derivative action. But be very careful. If you're going to use USO, just trade it. Are U.S. investors allocating to international ETFs to the extent that you would expect them to be given how well those markets have finally started to do over the last 18 months? Not as well as they have done, but a little better than normal. Because I think a lot of investors have seen this movie before. You know, International comes back. It has like a good six months.

It's a short film, really. And then all of a sudden the cues is like that bus meme. And they got to see more. But there has been some movement to like EFA, IEFA, a little. bit, but not a ton. Most of the money, if I look at flows like year-to-date, I'll give you the top five is V-W-S-M, V-T-I, and then V-X-U-S-U-S-U-S-I-M. Oh, SpyM, by the way, you'll love this. Is the cheaper SPY? Yes, it's a, it's the offspring of spy that has basically been programmed to avenge IEMJ. No, it's, it's, because Voo knocked off Spy is the biggest E-T-F in the world.

And, you know, State Street was like, and I took that personal. So they basically lowered Spy M's fee to two bips. And they changed the index. How does it get the inflows? Oh my God, yeah. At one point in this year, it had more than Voo. I've never seen Vue be second. Not more money in it, more inflows.

Okay. But the asset chart is like this. It's parabolic. State streets like, oh yeah? Yeah. Well, you know, if you're allocating 500 million a billion, who cares? No, basis point matters, I guess.

Yeah, that's what I'm saying. Like a lot of people, if it's the same thing, they'll just sort by fee. Right. the power of one basis point when it comes to cheap beta. That's why you don't want any part of cheap beta. Like, imagine competing there, how brutal that is. Yeah, that's why that white line goes straight up because who wants to deal with that? All right, more in the lightning round.

Are you surprised, or maybe you're not surprised, by the almost complete non-effect of the popularity of custom and direct indexing on flows to ETFs? Because this was the thing people in the ETF land were worried about, like a couple of You were never worried. Not me. You were not worried at all. Thank you. Thank you for acknowledging that.

But like, I was skeptical before it was cool. You were. I was also skeptical of ESG before it was cool. How did you know that custom and direct indexing would not have an impact on the size of the ETF market? Simple. Everything seems to be going towards cheap and simple. These were going towards more. These are not cheap.

They're more expensive and they're more complicated. Right. Then they also, they're active in a way. So forget the active passive. I used to say cheap, simple passive. But active is more embraced, so I killed the passive. But the idea that you would want to go from like one light item to like 4,000, I get the tax advantage, but that does run out.

And I think just in general, people like simplicity. I do think there's a niche purpose for them for ultra high net worth. It's pretty big. The custom indexing is pretty big. Yeah, but what's pretty big to you? I think it's the money is not coming out of ETFs only into class. It's not a 13th. But how big is customer index in the world?

Do we know? I was never bearish, totally. I was bearish versus the hype. I'm going to guess it's, uh, I'm going to guess it's close to a trillion. Yeah, let's say it's a trillion, right? So that would be like 1.2% of all fund assets. Wow. Yeah.

So I said it would be lower than, you know, maybe two or three percent tops. Yeah. So I'm even saying it will grow a little. Yeah. I just find it to be like very specialty. To me, it's for advisors. To direct indexing, what the hell is a thing called? Were you right around?

Oh, Vespa? No, where you stand up on it. Oh. What all this is going to? Segway? Segway. So, direct indexing is the Segway. I was bullish on the segment.

I was wrong. Yeah. It was supposed to revolutionize transportation. It's used by mall cops. You were bullish on the segue? I was. Bill Gates was. I mean, didn't all these big people?

Everybody was. There were people that saw the prototype. Yeah. And they said, this is going to force entire cities to we design them. themselves and then it didn't. That's direct indexing. That's hilarious.

But it is used by mall cops and city tours. So it does have some use. Okay. Bet and I were segueing around DC the other day. It's great. I love it. Yeah. No, like I said, it exists,

but the hype was way too much. All right. Last but not least. Jalen Brunson, under or over 26. 5 points tonight. Tomorrow night. Tomorrow night?

Under. Well, this will be air tomorrow. We're going to grind you guys. Are you going? Come to the game. Paul Joe. We're going. Paul George, over under 16 and a half.

Over. He better, or else you're not even doing the game. He's going to shut the bed tomorrow. He was hot last night. At least in the first half. He's good because he knows he's the third, fourth option. He's like, really, I thought he was going to be bad. I underrated his ability to fit in.

He's got a smooth jump shot. Barry, very. Silky. Nick's minus 105, 76 was minus 115. You're a fans. You can't bet. It's a pick-um. Well, this is kind of a must-win.

We're at home. Kind of. If we don't win this, it's probably over. It'd be real tough. You hate that I say probably. You want me to just like die now, don't you? No, dude. I'm not a cocky Knicks fan.

You guys just don't have the guys. You don't have the bench. You know, you have this guy McBride. He's like your seventh guy. He'd play 25 minutes for you. I know, but that's what I'm saying. Not 40 minutes for you. This effing guy, at the worst time, he hits like a shot.

Yeah, Deuce's money. He could do that. And you have that guy. He could hit a corner three. Anytime he does that, the crowd gets so hyped. So you have that extra guy, that seventh man in him that is,

we don't have. And that could be the edge. But keep in mind, I think Tyrese maxi has underwhelmed. He's better than he's playing. Still so young. He's going to be great. He looks like he's going to be great.

He is great. They can't use him for that many minutes, though, and wonder why he can't play defense in the fourth quarter. Yeah. I don't know that the only NBA teams came out. yet, but he'll be 13, I think.

Like I said, we beat the hated Celtics. You did. For America. Yeah. And we exercised the big demon. We heard all that. And we feel...

I feel fine. It's okay if we lose. Did you have fun on the show today? I did. Always. All right. What's the name of your Bitcoin book? Both sides of the coin.

Yeah. Are we promoting that yet, or is too early? The pre-orders available? No, not yet. Okay. When is it coming out? Late October, early November. Do you want to come back and talk about it?

I would, yeah. Mike is in the book. I quoted about 40 people and Mike is... Mike's quotes are the best. Would you lose my phone number? I wouldn't want to be in it. Well, you were on the top of the Bogle book. I go around the horn when it comes to your shop.

I have nothing. I honestly have nothing. I know less about Bitcoin. I know absolutely nothing. Well, I know. I said I like Michael because of the spike pointer. Well, the audience appreciates. It's unbelievable.

Your encyclopedic knowledge about asset management, ETFs. I mean, it's really a pleasure to have you here. So I want to say thank you on behalf for your audience for coming by. We will have you back this fall when the book comes out. We want to thank all of you out there in compound land, all the pounders. Thank you guys so much for listening, for watching. If you want to leave a review on Spotify, Apple, YouTube, today would be a good day to do that. What do you guys think? John, Duncan, yeah? Perfect day. Go ahead and do that. Our special thanks to Eric Bouchunis. Guys, we'll talk you soon. Thanks again for watching. Thank you for listening. Good night.