The Derivative - Beyond Buy and Hold: Q3 Asset Mgmt’'s Quantitative Approach to Tactical Investing with Bruce Greig & Brad Giaimo

Episode Date: October 2, 2025

Join Jeff Malec as he sits down with Brad Giamio and Bruce Greig from Q3 Asset Management, two investment pros who turned trading floor grit into a modern, rules-based quant shop helping RIAs build out tactical trading models for clients.  From Brad's formative days alongside Paul Tudor Jones to Bruce's mathematical approach to market analysis, you’ll hear how Q3 builds transparent, systematic models that aim to outperform while protecting downside risk.  If you’re an RIA, allocator, or markets geek, this episode is packed with tactical insights and practical knowledge delivered by practitioners who’ve moved from the trading pits to the trading platforms. SEND IT!Chapters:00:43-9:37= Cotton to Paul Tudor Jones: Brad Giamio's Trading Floor Origin Story09:38-19:39=From Bankruptcy Software to Quantitative Trading: Bruce Greig's Path to Q319:40-34:57=Q3's Organic Growth: From Family Funds to Advisor-Driven Strategies34:58-47:42=Systematic Investing Unveiled: Q3's Quantitative Model Philosophy47:43-01:03:16= Q3's Fund Evolution: From SMAs to Mutual Funds and ETFs01:03:17-01:09:47= Eddie Murphy & Trading Floor Memories: The Concentric Circles of Market InformationRCM Blog: The Definitive List of the Best Investing MoviesDon't forget to subscribe to⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Derivative⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, follow us on Twitter at⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠@rcmAlts⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and our host Jeff at⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠@AttainCap2⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, or⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠LinkedIn⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ , and⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Facebook⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, and⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠sign-up for our blog digest⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠.Disclaimer: This podcast is provided for informational purposes only and should not be relied upon as legal, business, or tax advice. All opinions expressed by podcast participants are solely their own opinions and do not necessarily reflect the opinions of RCM Alternatives, their affiliates, or companies featured. Due to industry regulations, participants on this podcast are instructed not to make specific trade recommendations, nor reference past or potential profits. And listeners are reminded that managed futures, commodity trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. For more information, visit⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠www.rcmalternatives.com/disclaimer⁠⁠⁠

You don't hear from anybody when things are going great, and the market's going up and all the strategies are doing well. But when it's not doing well, that's when they're calling, and it's really important for us to pick up the phone and make sure that we answer their questions. And that was one thing that early on, I think, definitely got us in traction. Welcome to the derivative by our SAM alternatives. Send it.

All right. We're here with Brad and Bruce. Hey, guys. How are you doing? Could you guys, for those watching on YouTube, who's Brad, who's Bruce? I'm Brad, and I'm Bruce. Love it. And we were talking a bit offline. You guys are in Detroit Motor City area, where, Auburn Hills, where is it exactly?

Birmingham. Birmingham, got it. Long time. Midwesterners, Detroiters. How'd that happen? Well, I'm an East Coast guy. Bruce is a misogander. Yeah, I was born and raised within 10 minutes of here and went to school in Ann Arbor.

So pretty much spent my whole life in career. career within 20 miles of Detroit. All right. What do we think of this new quarterback, Underwood? Well, so far so good, but I don't know. We've got some tough games coming up. So we'll see. The office is kind of mixed between Michigan and Michigan State.

So, you know, obviously with Bruce going in, Ann Arbor, he's a Michigan guy. But we've got some state guys here as well. So it's always fun when they play each other for sure. hasn't been much of a game lately no hopefully i don't stay that way but that's what i'm so brad's brad's an east coaster as as he mentioned when did you you came here in i came here in oh three yeah and actually uh that kind of feeds into what i usually talk about if i talk about how q3 actually started so i don't know if you yeah let us happen into that or not but jump away so yeah so i'm i'm i'm an east coast guy born and

raised in New Jersey. And I started on the trading floor and the Commodies Exchange, actually, coffee sugar, cocoa exchange back in 1982. And it wasn't something that I had planned on doing, but I had a good buddy of mine who was a broker for Merrill Lynch. And back in those days, actually a lot of the big wirehouses all had presence on the trading floor, which very few, if any, do now. Merrill Lynch, Pierce, Fenner, Smith. Pierce, Fenner, Smith, and Zieg. And so, yeah, so Matt was a broker for Merrill and coffee sugar, cocoa. And I was just always kind of interested in that stuff, but never thought it would be anything I would have the majority of my life doing.

But one day, you know, he asked me if I wanted to go down on the trading floor and check it out and see what it was like. And I thought that would be kind of a cool thing to do. And this was for World Trade, which was one of the smaller buildings next, right? next to the two towers. So I went down there with them and it was it was a really great experience and the thing that I think hit me the most first was either you really think it's cool and you want to do you want to be there you think it's absolutely nuts and you just got to get out of there. It's just too crazy and I liked it. So Matt got me a job be a runner. I was a runner for about a year on that with Merrill. And then I got some opportunities to move on to working phones in a

booth. And the interesting thing about being down on the trading floor is the more jobs that you have with different companies, the better off you're doing because they were always trying to coach people and take, you know, talented people. Maybe that's too conceited. I didn't mean it. I didn't mean to come off that way. But if they thought that somebody had, you know, was somebody they were looking for, they would just go after you. So the more jobs you had, the better off you were doing, which seemed to work out for me, because after working with them for about a year, I moved over to the gold pit, and I worked for a company called DLJ, which is also a defunct firm, but back then it was quite large. And it was there, really, where things started to take off from me,

because that was the beginning, 1983, end of 83, and then it was there that I obviously. And then it was there that I obviously got the opportunity to work for Tudor Jones when he started Tudor Investment Corp back in 1984. So that's what really big things really took off for me. And I got to work for Paul for three years. I even got to trade money for him for about a year back then too. And I'm going to drop of names of a bunch of old guys that many people probably never heard of back then. But Richard Dennis and Tom DeMarc and guys like that, Richard Dennis was doing the turtles back then. And Paul felt like he wanted to do something along those same lines. So he grabbed a bunch of guys who he thought were trainable. And there were 10 of us that he got together.

And I had already been working for him for about six months before he decided to do this. But he, you know, we worked with him every day and met with him in the morning, met with them in the afternoon and you guys have a clever nickname for yourselves like the turtles oh god he had some names but it wasn't anything like the turtles uh no paul was paul's a great guy and and i haven't spoken to him in quite some time but those three years were just probably the the greatest learning experience i could i could have uh certainly not being going to school for business or trading or anything like that. My school was being on the trading floor. I like to say that Paul was my mentor and the trading floor was my teacher. But it was during those three years and

I was really impacted by what he talked to us about and the things that he made us do and look at and learn and read. And then obviously getting the opportunity to actually trade money for him was was a great experience. So I left the floor. I got an opportunity to go out on my own in 87. So while I was down on the trading floor during the crash in 87, which was really when Paul made his name on the trading as far as a hedge fund manager is concerned, I had my own seat on the Cotton Exchange at that time. And I did that from 87 to 98, going back and forward. So I was a local most of that time, just traded back. That's why you got a little gravel in your voice.

Gravely in my voice. I don't have a New Jersey accent anymore, though. So I have to tell you because I've been out here since 2003, and so people tell me I don't have that Jersey accent. I bet you do when you go back, though. I probably do. It's easy to fall into. One quick, real quick story about the floor I think you'll enjoy is that I started in the fall of

1982. And in the summer of 82 is when they actually filmed trading places. So I'm sure you're familiar with that movie. How everybody is familiar with that movie. And they traded, they filmed the trading places scenes in the exchange at the end of the movie there in the commodity pit, especially in the cotton pit, to be exact, which frozen car orange juice was a smaller pit in that section there. And the funny thing is, is that while I wasn't there when they did that, I came in in the fall, a lot of the guys I became really good friendly with and good friends with over the years were actually in the movie because what they did on that weekend, when they shut down the exchange, they asked any of the guys if they wanted to come in and be a part of it. So they had

extras. Did they give them any money or no? Did, I'm sorry? Did they give them 20 bucks or something to come doing it. Oh, I don't think they gave them anything. I think they just wanted to be there. And a lot of them did show up, obviously, as you could see from the film. But what's cool now is I could watch the movie and I'll see John and I'll see, I know this guy and I know that guy. And I used to trade with this guy. And I did trade in that pit for a while after that. But had I not, had I been there when they were doing the movie, who knows? Maybe I'd be in Hollywood it would be totally, it would be totally different. But so people do remember that movie. actually more than some of the names that I drop when I talk about the people that I had the

opportunity to work with. But yeah, so that was kind of cool. And then unfortunately, all the other things that went on after that, you know, the crash in 87 I was there for. I was there for the bombing in 98. And I had left the floor in 2000. And I was trading commodities off the floor. But a lot of my good friends were still there in 2001. Thankfully, all of those guys were okay, but there were some acquaintances that I knew that, unfortunately, didn't make it during that awful time. We've had a lot of former floor traders on the pod, so I'll ask you, what I've asked a lot of these guys, right?

You cut your teeth. You learned what you knew down there on the floor. you learn the environment, where's that next wave going to come from now that everything's electronic, right? I have a big worry in Chicago, especially. That was a whole community, right? Oh, absolutely. It was. And now that's gone and like these next level of people, I don't know where they're going to come from. They're just going to be servers. They're going to be, right? It's a little worrisome to me of how people are just going to learn it in textbooks and learn it coding, but they're not going to have that real life experience of, and maybe it doesn't matter. Yeah. I don't know

how you're going to get that hands-on experience anymore. I mean, yeah, you could be a, you know, whiz with a computer and understand all of that from that end. But there's really no substitute, I think, for being down there. Because it was all about the energy. You know, you weren't trading constantly as a, as what I was called, a local on the trading floor, just trying to scalp points. But, you know, so if you walked off the floor, when things got quiet, you walked off the floor, because you knew there wasn't anything going on. But you'd be standing. over in the corner. Go play golf. Well, well, you went to play golf. Unfortunately, when I would leave to play golf is when all the shit would hit the fan. And I'm out there on, you know, like

the eighth hole with my buddy, because we, you know, did pretty good in the morning. And we made our quota. And then we left to go play golf. And then we're looking and we're, you know, well, back then you didn't have cell phones to look at. But yeah, and a lot of the big moves would happen when we were not on the trading floor. But just the energy is what I was talking about, because you could be off the trading floor, having lunch or something, and then you'd hear the volume pick up, the volume, the sound, and you knew something was going on, whether it was in your pit or in another pit, and you'd run out there, you know, you'd grab your pad and you'd run out there,

and you'd participate, and as long as that would last for, and then you would hopefully come out of it making some money, or you could come out of it losing money, which is what I experienced for about 15 years on my own, which made me really appreciate, you know, understanding risk and how risk works and how important it is to keep yourself in the game, which is something that Paul always talked about. You know, defense was the best offense. He'd have that quote up. I think Lombardi said that, if I'm proud of it.

Sounds like something he was saying. And, you know, so that was real big to him, is to keep yourself in the game at all times. Another guy who I had the opportunity to work under Mark Fisher, who was another real big player down there on the trading floor. I feel like young people, young investors these days don't, like I would put Paul Tudor Jones on my Mount Rushmore probably of traders. Absolutely. I'm sure you would, right? But how many under 30, under 40 investors know that name anymore?

Unfortunately, they don't. Although I do think that Paul out of that group of guys that were doing what he was doing at that time might actually be someone who they do know because he tends to stay a little bit more involved getting interviewed on, you know, the news channels. And lately he's been talking gold plus crypto. So he has. Maybe people are paying more attention. He was not a crypto guy for the longest time. And then he finally started to come around and has felt obviously comfortable in talking about that and how part that's part of his portfolios. But he's just, you know, an amazing guy. And he's evolved so much from the time I had to the fortune to be with him.

I have a picture behind my desk, and there was literally 10 of us in Tudor Investment Corporation back in 1984 when it started. And what he has now is just doesn't surprise me because you just knew that the guy was a superstar. You know, like in sports, you could just tell. He was just going to be successful. And don't get me wrong. It's not that he didn't have a decent place to start from. His uncle was a big cotton trader in Tennessee who he had the opportunity. to work for, but still, there was just something really special about the guy. And it wasn't just

from being able to, you know, be successful trading markets. He's a very generous guy. Philanthropy is just as big and as important to him as the ability to do well trading and making money for his clients. So, yeah, that's something I'll never forget. But I'd like to now think about what I've done in the past as just the foundation to what Q's 3 is done. And then really, really, I'd say grade myself on what Q3's been doing as opposed to, you know, my history as far as being on the trading floor is concerned. But it's a great story and people love to. Yeah, right. There's a few people who were one of ten with Paul Tudor Jones. So congrats. That is true. And now a tough act to follow, Bruce. What? Yeah, geez. I don't, I don't have that kind of

background. I have a little more, I guess. Just start making up names and be fine. Yeah, a little more. A little more. academic kind of vanilla background in a way I started off my career actually in bankruptcy software of all places in the early 90s it made people go bankrupt paying for the software well no yeah we automated the software and and you know this was like early mid 90s you know back when when Windows was really still you know you had Windows 3.0 I think at that point and our original program was DOS-based. I mean, it was ugly, but we were the number one bankruptcy automated software program in the United States, and it did pretty well. I, you know, it was a

small company. I didn't really see much of a future there, quite frankly. So I went back to business school at Michigan, got my MBA. And at that time, I kind of got involved in automated trading, I had an older brother that kind of showed me a program called Trade Station in Metastock, which I think had pretty much just launched in the early 90s. It was, you know, they were pretty new back then, but I was just enamored of, you know, all the different cool charts you can make and all the colors and the indicators. And I was really drawn to it because I was, I was a math and statistics major as an undergrad at Michigan. So I always love numbers. You know, I love the idea of kind of problem solving, you know, trying to figure something

out and make something that works. And it's sort of tied into my software background because I was able to help my brother program some ideas he had in terms of trading commodities and stocks at that point. And, you know, probably the best thing about that was I didn't have a whole lot of money back then, but I lost most of it, which that's a good time to lose money is when you don't have much of it, you know. And when you're young like that, you know, you'd learn and you know, you bounce back and and I realized I didn't quite know what I was doing, but I knew what I wanted to do. So again, I got my MBA from Michigan and then shortly after graduation, I joined an RIA here in Metropolitan Detroit, stayed there for about a dozen years.

I joined a couple other RIAs doing. Before RAs were even a thing, but so congrats, yeah. Oh, yeah, yeah, no, there's actually a couple of good-sized ones here in the Detroit area that they're kind of do some of the same things we do in terms of very quantitative model development. And again, that was always my background. So I was drawn to the companies that really believed in quantitative strategies. And Q3 was among the leaders. And this was 10 years ago.

And at that time, we probably had 250 million under management. And now we're close to 800 million. So, you know, I picked a great place to land. And they believe in a lot of the same things I believe in. terms of managing money using a non-emotional, systematic, quantitative approach. You know, they can be back tested. It can be, you know, defined by a certain set of algorithms and rules, which again, always appealed to my background as a math and stats guy. So it's been a great fit. And like I said, I've been here 10 years now. They still have that major there?

or is it called like data analytics or something now? Yeah, actually my son just graduated from Michigan just this last year. And he was an econ major, but he was looking into a different major. They have a major called, it's like quantitative risk analysis. It's a little more, it's quite a bit different than when I went there 30 some years ago. it's a lot more kind of robust in terms of, you know, the risk and kind of different ways of measuring risk, whether or not you apply it to the financial markets. You know, there's a lot of, a lot of these companies that like to hire people with a background

in coding, statistics, mathematics, that kind of thing. It seems to be a real big, big area right now, at least at least a U of M. At least there used to be before AI, but that's for another podcast. Yeah, right. There used to be an appellate. That's changed, right. So let's get into the founding of Q3, right? So a lot of people, a lot of traders on the podcast are making a model, making a program,

and then trying to go get investors. Sounded more like you guys had the investors, so he's had the RA and have been building the model. this whole time? Do I have that backwards? What did that look like? No, it's not necessarily backwards, but when I moved out here in 03, having come from a commodities background, I started a commodities firm as what I was looking to do. So I had an online presence, and that's where my partner, Adam, actually saw me. He liked what he read about me. He was a student of the markets. He actually traded in Chicago for a couple of years on the CBOE. So

seeing my background, he thought I'd be somebody that he would like to get in touch with. So he just called me up out of the blue. And we had a short conversation on the phone. We decided to meet at a coffee place, caribou coffee. I don't think they had Starbucks back then. And, um, that long ago, 2003. I think they had Starbucks in Michigan, doesn't they? I don't know. Anyway, it wasn't a Starbucks because I don't like Starbucks. But anyway, so we met and we, we just really hit it off. And, uh, you know, our love for the. the markets and our backgrounds from the trading floor. And we felt, you know, and again, not that it was something totally new at that time. But, you know, the idea of kind of giving hedge fund type

of opportunities to the retail investor was, you know, it was something we thought we could do really well with. So we started our own first strategy. We called it an absolute return strategy. Can't remember the exact name of it. But we started that and we raised money from family and friends. So we didn't have anything in place other than a strategy that we thought had some potential and some very willing family and friends to give us some money to actually trade it, which we did. And Adam had another gig at that time. So it was kind of all going through. I was kind of handling all that stuff. And it did well. It did well enough that we felt comfortable that we could take it to the next level, which was then obviously introducing it to raising money

from people outside of our inner circle. But at the same time, it was still more direct business. We didn't really go to the wholesaler, advisor model until 2009. So between 2006, when Q3 was started, in 2009, it was really that just organic type of growth through having the fund, it doing very well. And then in 2009 is when we decided to broaden the universe and start working directly with advisors and not take direct money anymore. And that's when we brought on people. You've been here a while now, haven't you? Ten years. Ten years. Jeez. Okay. So, yeah. So we, and the whole thing, Jeff, has been organic. You know, as we needed things and people to come in and work with us, we brought them on. It wasn't okay, we're going to go out and raise some

money and hire 10 wholesalers and only have one strategy. The strategies grew as the advisors were interested in what it is that we were doing. So we were tactical right out of the gate. And it was more of a niche type of a situation. So we weren't looking to get entire portfolios at that time. We were just looking to get a percentage that would be interested in non-correlated absolute quantitative type strategies. And then as we started to grow with that, in speaking with the advisors, they'd say, well, you know, sometimes we like what you guys are doing. Can you apply it a little bit more to something that has more correlation to it?

Because we think that's something we could sell along with the totally non-correlated types of stuff. So that's how things just really started growing. We brought Bruce on a couple other guys here. You know, the one thing that I learned from Paul is if you surround your, yourself with really, really good people. It's only going to make you that much better. So that's what we did. And right now we went from just Adam and myself to 14, 14 employees now, which five wholesalers, a couple internals. Greg, excuse me, Bruce is all over the research,

the R&D stuff. Another gentleman named Greg is real big on the 401k retirement side of things, which we've been doing for the last couple of years now. And, yeah, we're really happy with the way things have been going over the years. And Bruce, talk about the models a little bit. You can go one by one or overall concept, philosophy, what you're trying to do, however you want. Yeah, I won't go one by one only because we offer quite a few models here. But the one thing that they all have in common, as I mentioned,

is they're all systematic, they're all rules-based, they're all very carefully back-tested in research before we bring them to market. And we've got a number of different software programs that help us with that to kind of, you know, steer us away from cherry-picking and curve-fitting parameters and that kind of thing. We're really careful not to do that. What I always like to tell people is we put a lot of research in, upfront so that we don't have to tweak the models once they get launched to market.

Once we launch a model, it's very rare that we change it going forward unless there's some type of systemic change in the markets or there's certain mutual funds that no longer want to work with us and we might not be able to use those. But it's really all dependent on doing a lot of the legwork up front so that we feel that we've got a robust strategy that'll do well in any type of market. And most of our strategies are, as Brad said, tactical. Now, tactical is a tough term in the industry. Everyone kind of uses it in a different way. What do you mean by? Yeah, some people might say dynamic, strategic. What it all has in common is, to me, a couple things. One is the systematic quantitative approach, as I mentioned. And the other is that they're all

actively trading. We are not buy and hold investors, nor are we day traders. We trade mutual funds, ETFs, individual stocks. Most of our models trade on. And we're talking your SMA side of the business right? Yes, yes, the SMAs. Most of them trade on a weekly basis. We've got some to trade on a daily basis, kind of the true tactical models that go all in or all out of, you know, the equity markets, the S&P 500, NASDAQ 100, usually are our investment vehicles. We've got other models that are a little more longer term to trade on a 30-day or 45-day basis. But, you know, again, what ties them all together is the belief that we can create, you know, efficient and meaningful trading systems to deliver, you know, outsized, risk-adjusted returns

by, you know, a combination of believing in how they've done in the past with the fact that active trading enables us to always kind of jettison the losers in the portfolio and always buy what's doing well. Another thing I'd like to tell people is we often sell on strength, but we buy what's stronger. So, you know, we're momentum investors, we're trend followers. But we've also got mean reversion models that, in fact, one of our largest models right now, and it's the basis of our QASOX mutual fund is based on a very unique mean reversion model. but again it's quantitative it's systematic so that that's really kind of the driving

course of everything what would you say to like a josh brown or barry writ holds or something who's like what are you doing just buy and hold right this isn't that hard everyone's trying to own equities equities only go up yada yada you know that kind of traditional r a argument is like hey just buy and hold and we'll help pick some winners over time but basically you just want to be in the S&P and hold it for as long as possible. I mean, we've heard that argument since the beginning of time. I mean, like I said, I've worked in similar RIAs for 30 years, and that's always something that we come up against, especially in a bull market with not many pullbacks.

It's so easy just to say, well, look, the S&P has been up an average of 15% over the last five years. Why do I need you guys? Well, I mean, there's a lot of... There's opportunity in between. Well, that's a good point. Yeah, that's actually, I really like that answer. Most people just say, well, you know, there are going to be those times like, you know, 2000, 2001, 2008, even 2022, and the S&P is going to drop double digits. And wouldn't you like somebody that's actively reviewing your account to get you out and potentially, you know, preserve your capital? So, but you're not always going to be right. You're not always going to sell to top and buy to bottom. But, you know, that is a big part of the sales pitch. But I like Brad's answer.

What he's referring to is, and I think we saw it a lot in 2023 and even 2024, where, you know, you look at the market and you say, well, the S&P was up, whatever, 20%. But throughout the year, you've got other dynamics happening. You've got small caps that might go on a five or six or seven week rally. And then you might have mid-cap value. You might have international, you know, particular sectors. It's not just about buying, you know, the broad market indexes and timing those. Most of our models, you know, drill down to the sectors and even the sub-sectors. So we're not just necessarily trying to get in and out in the S&P and the Dow.

We're going to step further. We're trying to find, well, which. sectors are moving the most. Do we want to be in utilities and energy right now? Or do we want to really go forward and double up on technology and consumer discretionary? So equity is based or we hold bonds or gold or things for that nature too? No, no. It depends on the model. Most of our models, I would say, are equity based. But we've got we've got bond models. We've got international equity models. We've got models that use bonds and stocks.

It really covers the gamut of whatever an investor would need in their portfolio. The main thing is we like to be able to provide a menu of options. And then the advisor often will pick and choose what makes sense for their particular client. And when you say advisor, you mean in-house or other? RAs mostly, yeah. Yes. Yeah, no, other RIAs or other advisors that work for smaller independent BDs. Got it.

And they're using you like as a OCIO. Exactly. They're using us for our models. You know, we tell them you focus on gathering assets. You know, that's what you do best. You know, in some case, obviously there's advisors that like you at all. Some want to get a little bit more gradual of it than others for sure. there are a decent number of them that appreciate the fact that that's what we do and that's our

expertise, which frees them up, you know, to apply their value added. Go golf. Go get new clients. Yes, exactly. And hopefully bring them to Q3. And interestingly enough, if I could kind of jump in, you know, the strategies themselves are not overly complex. They're really more, I think the beauty in them is the simplicity of that, of the strategies themselves. And early on, and we still do it until this day, one of the things that we hoped would kind of get us some traction would be explaining to the advisor exactly how a strategy worked. Because a lot of the times, especially if you're coming from the hedge fund world, it's all black box stuff and well, we could tell you so much, but then we can't tell you how we do this or that. And we would tell

the guys if they wanted to know exactly how the strategy works. Some guys do and some don't. And that's, you know, that's really up to them. But if somebody really wanted to take a deep dive into the strategies themselves, we're more than happy to do that with them. We're not everybody running away with them. Holy grail. I think it gives them the confidence. It does. It gives them a confidence in us, too. And I think it gives them a level of trust. Yeah, quite honestly, that, you know, we want you to understand how it works because there will be times that it's not going to work, right? You know, like everything else. We might go through a couple weeks, where the market's choppy and it's just not the type of market that works well for trend following.

We want them to know why, you know, because if they don't, they're just going to see. It'll be easier for them. They're just, they're just going to fire us. You know, they're going to, they're going to leave and we may never know why they leave. But if we arm them with the information and the knowledge of what to expect and, you know, kind of what are the potential pitfalls and downfalls of a particular model. Then when they live through it, I think it's better because they understand it. They've been briefed on it and it doesn't come as much of surprise. And we always pick up the phone because you're going to get the guys that call. You don't hear from anybody when things are going great and the market's going up and all the strategies are doing well. But when

it's not doing well, that's when they're calling and it's really important for us to pick up the phone and make sure that we answer their questions. And that was one thing that early on I think definitely got us some traction, especially the fact that they could speak to the two guys, Adam and myself, who own the company. A lot of the times you call any of these other firms, you're not going to speak to the head people by any means. So that's something that we said we were going to do right from the beginning and we've done it ever since and we'll continue to do it. I've got a lot of RAA buddies here in Chicago and they're half psychiatrist a lot of the times, especially in a down market, right? The clients are just calling. They just want someone to talk to. You sure everything's

going to be all right? Yep. So I'm sure they call, then they're calling you. Hey, you sure everything's going to be right? Okay, hang up, call the client. Yep, we got it. Here's how the model's working. How do you protect against the models just going, we're going to be all long, Navidia, all the time, right? So do you have sector level constraints and risk constraints, et cetera, et cetera. You know, not really, and it kind of goes back to what I was saying about, you know, when we bring new models to market, it really is all about, you know, all the work we do before we even introduce them.

And we, you know, we stress test them. We backtest them over, you know, decades and decades of markets. As much as we can get our hands on, you know, which these days is a whole lot more than in the old days. I mean, you really couldn't get the back data that you needed to kind of do some serious testing. Yeah, no, it is definitely easier now. And, you know, we do have some models that are riskier than others, but most of our models are fairly diversified in the sense that, number one, they either hold a decent number of positions. So one of our flagship, what we call active asset allocation models, holds about 12 to 14 ETFs. You know, and each of the ETS, of course, by being ETSs, have a certain level of diversification.

So we're kind of removing ourselves from that systemic risk of a blowup with any one company or even one ETF, not the ETS often blow up. And our tactical models that are a little more concentrated in the sense that they might only use the S&P 500 or their NASDAQ 100. again, those are, you know, huge indexes. They're, you know, they're diversified to a point. I mean, obviously the NASDAQ 100 is so tied to technology. But we- See last week's podcast, which was with the guys from NASDAQ. Sorry, quick plug.

Yeah, yeah. Yeah, so part of that, you know, is intentional on our behalf. We're not apt to have a model that's 100% Invidia. And for a couple of reasons. I don't know that there's a lot of demand for that from the advisors that we tend to interface with. That's not really what they're looking for. And again, we do have some strategies to employ leverage using leveraged ETFs and leverage mutual funds. But, you know, again, we feel that we're able to control the risk with those types of investments

because they are broad-based index funds as opposed to. individual stock risk. So that's the SMA portion. So there's hundreds of models, dozens of models across all these different clients. dozens. Well, but also to

each one has a risk profile associated with it. So one strategy actually could be looked at as three, but it's really only one. So I don't know. Yeah, I mean, we've got it seems like too much work for you guys. But maybe that's why now we have

depends on the platform we're trading. And how much work it is. We've been very, we've spent a lot of time coming up with very efficient ways of trading, you know, to, you know, obviously to reduce any kind of trading errors and to make it, you know, efficient to trade all these different models. And we, I think as Brad alluded to, we operate on a number of different TAMP platforms, you know, five or six, at least with our models on them. But, you know, we've really got it down to a kind of a well-oil machine. And, you know, we get their trades out every day. And then I'm guessing somewhere around the way someone said,

well, I don't know which of these models I want or need. Just what do you think is the best? What would you do? And that was somewhat the genesis of the mutual funds and ETFs and whatnot? Well, not necessarily the genesis of the funds. It's interesting, the dynamic is because we don't take direct business anymore. We work through advisors. So the advisor is kind of like the client is our client as far as the regulatory agencies are concerned, but the advisor is our client to us because they're the ones that are bringing their clients to us. So those questions, we don't get from the clients directly. We get them from the advisors.

And of course, we're here to help them, you know, with our ideas and thoughts as far as what a good portfolio might be constructed as. But they're the ones that make the ultimate decision as far as that's what they want their clients to be in when we get a new SMA account. We do have an offering now where we'll do that. We'll do everything. We'll from a the risk profile that we get will actually pick the models themselves for the clients and just manage it 100%. And the advisors kind of a little bit more out of the loop in that particular way that we can manage for them. But we wanted to be able to offer two different things because a lot of the advisors still want to be kind of more involved. It does. It does vary. We have

some advisors that really want to learn about the models and how they work and some of the advisors that are more sophisticated than others. And they have their own spreadsheets or whatever they use to kind of combine our models and find the most efficient mix based on beta or whatever else. And that's great. If that works for them, you know, that that's what they're looking for. That's what we offer. But as Brad said, we also have a number that aren't necessarily interested in learning all the ins and outs of, you know, 25 different investment models

and they feel comfortable having us make those selections. Got it. But let's talk about the mutual funds. So how many? Two mutual funds plus an ETF. Yes. Plus an ETF in the pipeline. And one more of each coming.

Exactly. Exactly. So, yeah. In both cases, well, in all three cases of our current funds, two funds, one ETF, they were all launched with the idea that we were going to essentially transition the SMA assets, AUM, into the funds. Because as Brad mentioned, during the onset, the funds are part of, they still remain part of our SMA. So just to use an example. We have an SMA called Bull Seifer, which is the mean reversion approach I talked about. We've been running it since 2016 as an SMA. Great track record. In April of 2023, we transitioned

it into a 40-act mutual fund. And what's nice about that is we were able to seed that fund with, what, 30 or 40 million? Right out of the gate. Pretty much right out of the gate. And, you know, If you know anything about launching a fund or ETF, it's a lot of money and it's a lot of work. It's a lot of time. It's a very steep learning curve. But one of the best things you can do to kind of get off on the right foot is to be able to seat it, you know, with at least $10 or $20 million. That's a history too. Well, yeah.

Sure, sure. Because then we're able to kind of market the, you can't directly port the performance. which you could back in my old days like a few of those first ones that started ported and raised a gazillion dollars and you still kind of can and very limited morning stars got the dotted line now and yeah it's very tricky and and so there is that that is sort of one of the one of the drawbacks I so those were private funds that converted or there were a few SMA accounts that come in our case they were SMA accounts and and mostly we see the private fund converts but this is well right yeah we've seen We're getting way inside baseball now, but interesting to me.

Yeah, so it was a little easier the way we did it because we didn't have to kind of jump through those hoops. For us, it was just a matter of communicating with our advisors and telling them, hey, you know, we've got this better wrapper now. We've got this publicly traded 40 Act fund that is going to be part of the SMA, but the SMA now is just going to have one holding. it's just going to hold the fund. So it does a couple things. It makes our lives a little bit easier, quite frankly, because no longer do I have to trade that particular SMA of five or six different platforms,

you know, all by three o'clock Eastern time. I know that all the trading is done within the mutual fund, QASOX, which we obviously have to trade that fund, but it's just a once a day, you know, the fund doesn't necessarily trade every day. but it is an actively traded mutual fund. But it made that a lot easier because we could offer the SMA at some of these TAMP platforms that have been sprouting up across the marketplace.

And then, but there still are SMAs that run individual models, right? Oh, yeah. The one that converted only holds the mutual. Yeah, yeah. And we've converted three such SMAs, one-quartered. corresponding to each of our three funds. But yeah, the RSM business is still several hundred million dollars, and it's, you know, it's probably not going to go away anytime soon.

Well, but unfortunately, like I said, when we talked earlier, Jeff, about the trading floor going the way of the dinosaur as far as the technology concern. You know, the SMA business is also, I think, seeing a lot of different things, fee compression being obviously a big component of that. that it's just not like it used to be. And so it made sense for us to take a shot, jump off the cliff and get into the mutual fund and the ETF side of things.

Because quite honestly, it's not a sticky money because the advisors are in and out. When you're buying a fund or you're buying an ETF, when they feel like doing it, you don't have that same connection with an advisor that you do when you're running an SMA for them. Are you getting money that you never even talked that people but that's the other side too though you're getting you're getting money that you can work

both ways yeah it definitely works both ways uh but i just see the sma side of things becoming less and less and the the future being the the ETFs the ETFs not even the mutual funds anymore it's really the ETFs yeah that i'm starting to take over so it just made sense for us to be involved with that and again just like everything else it's been a learning curve for us organically doing all the legwork all the hard work. We've hooked up with some good partners, which has been great. But, yeah, we've been doing it all in-house. And we got pretty good at it.

It's a little dirty, right? The pay to play. And you want to be on this platform and that platform. Oh, yeah. Yeah, you find out other things along those lines as well. Yeah, and just the amount of compliance and regulatory. I mean, it's like several, every month I have to, you know, verify and attest. to five or six different documents for the SEC and then every quarter there's a different

slew and then every six months every year it's yeah it's a lot it's a lot when when you know you've made that leap to wanting to get into the 40-act fund you know environment but it's kind of like uh having rental places or something right you never you don't want to own just one like that way you have a couple own five or six and you can share your mainings you can Yeah, there are some economies of scale. I mean, having two funds is not twice the work as having one, but it's probably one and a half times to work. Well, that's true, but you also want to have the opportunity for more diversification and choices so people can use all five of us if we have five funds. I'm just looking at it from an operation standpoint.

Because a lot of that falls on me. Give me the rundown on what each fund's doing. So the QASOX is mainly mean reversion, or it's got too much stuff to talk about? Our flagship fund, we've got about $230 million in it just in about a little over two years. Yeah, we really like that one. It's really unique without getting too much into the weeds in terms of the algorithm. It's a short-term mean reversion fund that looks at the S&P. 500 and the NASAC 100 over short time periods, one day, three day, 10 day. And it basically

buys the dip. You know, so if, if the markets trade in the lower range of their respective range, we buy and we wait for that, you know, that bounce that normally comes. It doesn't always come, but, and then we get out on a bounce. So, you know, the average trade might only last one, three, four days. But, you know, it's just all about getting in, getting out when the opportunity presents itself. It seems that's been the flavor of the month for the past couple years at least, right? A lot of buying the dip, a lot of selling any volatility spikes, right? From my other world in options and volatility, like people are loading up on that trade as well when there's a day. I think you certainly hear that. But again, I don't know of any mutual

mutual fund or ETF that explicitly trades that way. Now, I'm sure there are some of these, you know, global macro funds or long short funds that don't necessarily disclose exactly how they do everything that might look at some mean reversion setups. I can't say we're literally the only one, but we, you know, that's all the fund is. It's 100% mean reversion. One of the other unique aspects of the fund that we just, started in November of last year is we got away from trading ETFs and it trades futures. So we're able to kind of offer that preferential tax treatment, you know,

the 6040 capital gain split. It frees up 85% of our AUM to put in short-term bonds. Portable alpha there that helps. Right, right. That's why you're on a podcast called the derivative. There you go. You're preaching to the choir. There you know, obviously, as you know and your listeners know, the S&P 500 and in NASDAQ 100, you know, are among the most liquid derivative markets. So, you know, with our 250-odd million in AEM, you know, we're not running into any capacity problems. Flipping on the radar. Yeah, and we could get up.

We could scale this fund into billions of dollars. And the bigger problem with using future. There's the roll cost and the total return, the dividends, everything. But if you're just one or three days, that's out the window too. Yeah, but there is some of that. And, you know, as we get bigger and we hope to have this problem, you know, maybe we would even start looking at swaps and some other ways to effectuate the trades. Yeah, love it.

All right. Next. So that's the flagship. What are the other guys doing? Our other mutual fund is QAITX. It's a all-season tactical, unconstrained growth. It's more of a, I guess, I would call a traditional trend following system. It primarily looks at the NASDAQ 100. So it's, whereas QASOX is kind of half between NASDAQ and S&P, depending on where the setups occur. is a little more focused on the NASDAQ 100. That fund, again, started off as an SMA that we've been running for, I think, a little over 10 years. I think it was 2015.

Great track record. You know, frankly, we had a little bit of a hiccup in 2022. That was a tough year for a lot of people doing a lot of different things. But it rebounded back nicely. had a nice 23, 24, it's up nicely this year. That one hasn't caught as much attention. And, you know, part of it is if you have a tough year, you know, some people kind of focus, we think, a little too much on one bad year.

You know, you could also argue that that fund doesn't have kind of as unique a story as the mean reversion. And it's got a hell of a benchmark, the NASDAX. going straight up. Well, there's that, too. Yeah. I mean, now being that it's a, it's a tactical fund, so we're not, we're not always exposed to the NASDAQ. You know, we could be, we could be out of the market for weeks at a time depending on, on the environment. And, and when this fund gets, gets a signal to tell us to get out of NASDAQ, it then looks to long-term government bonds, which it can go short. That was your problem in 22. There you go.

Yeah, you must have read our website or something. It's not my first rowing. I've been, I was in those as well. Yeah, and in 2022, and it wasn't just long the market. I mean, it was mostly long. That's why it lost some money. But if you remember, and I think it was kind of early to mid-2020, you had some fairly decent volatility in that market. And we got whipsawed a bit.

We were short when we shouldn't have been. when we were long when we shouldn't have been. And that contributed to probably half of our losses. Because if you look at just our timing of the NASDAQ 100, we would have, I mean, we would have still lost money in 2022, but the NASDAQ was down in the mid-20s or whatever it was. You know, we might have been down 15. And that sucks because the bonds are there to be the safe part, right?

Quick sidebar, Q3, what did the name? come from? You came up with it in October? Well, a Q3 is always my favorite time of the years because of that, but that wasn't the reason. The joke around the office, my partner's name, last name is Quiring, which starts with a Q and he has three daughters. But that's not how Q3 came about. It was really about Q standing for quantitative and then the three tenants, which we've kind of always evolved a little bit. know, price act, the things we look at as far as when we develop our algorithms as they pertain to individual strategies.

And is the Paul Tudor Jones never owned something below the 200A moving average? Is that some of the DNA? I don't know about that. Not in the mean reversion, yeah. Not in the mean reversion, no. Yeah, so that's really kind of where Q3 came from. But quantitative is really what it's all about. Yeah, it really does, a lot of this does boil down to the fact that we, we, we, we,

we lean into and we're all into the idea of being quantitative uh you know taking the motion out of the process and that's a hard thing to do when you're you're we're humans and you know you get that that signal that says the buy and all you've been seeing just from an empirical standpoint of watching the markets is that i don't want to be long here yeah but you get a buy signal and you got to do it because the minute you don't do that anymore then there's no sense all the all the back testing all you know all those hours that we spend creating robust models you just throw that out the window it goes up the one you know what's tough are you doing it's tough for sure uh the etf q v o why yeah so the ets yeah that that one is kind of our most

vanilla offering you might say it's what we call active asset allocation um it happens to be I guess I'd call it a growth profile because it's 5% bonds and 95% alternatives and equity. But what we like about it is it's sort of a, you know, a good compliment to kind of more traditional portfolios and approaches to asset allocation where, you know, an advisor might just say, well, I'm just going to put you in 80, 20, and maybe I'll look at it once a year and, you know, we might adjust the drift or rebounds. We're much more active and, I would say, proactive than that. The QV-O-Y-E-F kind of has a framework of four different investments leads. It's almost like four models than one. We've got a core equity component, which looks at just kind of your Typical Morning Star,

nine boxes of equities, large value, you know, small growth, so on and so forth. It's got a bond allocation, what we call an active equity allocation. And the ETFs in that sleeve tend to be things like smart beta ETFs, these factor-based ETFs, sub-sectors, and international. And then one of the very unique parts of the fund is a, 15% allocation to liquid alts.

So we've got commodities in their currencies and their managed futures, hedge fund replication, ETFs. I'm sorry for your managed futures experience the last 18 months. Well, what's nice about the model, it's one of our momentum-based models. So it doesn't buy everything. It's benched, managed futures. Yeah. So in the alternative sleeve, we've got about 20.

ETFs that we evaluate on a weekly basis. And we hold three of them. And lately, that sleeve is really driven performance. We've been in uranium, blockchain, gold miners, nuclear, the NLR, the nuclear ETF. So even though it's only 15%, that sleeve gives us kind of that potential alpha, but perhaps more importantly, it gives us the diversification. A lot of those ETFs, as you might imagine, have a low correlation to bonds and equities. So they help dampen the portfolio. So Cubei is sort of our, you know, it's sort of, it can be a core holding in somebody's portfolio. You know, Frank.

The B for vanilla? What's that? Is the B for vanilla? Remember that. I mean, it's not quite, it's vanilla for Q3. three. But in the industry, it's really not vanilla at all. I was going to argue that with you. Like, it doesn't sound too vanilla, but I was, yeah, no, you can make your argument along with me. But yeah, so it's a, you know, that that one, that one has done well this year

up about, I think about 14, 15 on that. Past performance. Yeah. And then because you guys don't have enough going on, you're launching two new ones coming up. Tell us why you need new ones and what they're doing. Yeah, so the one is technically in the SEC quiet period, so I can't get too much into the details. But I can't tell you it's a tactical ETF that's fairly actively traded. It's going to trade the NASDAQ 100. One of the things that's unique about this one is it'll use leverage up to 1.5 on the long side. and the inverse side, which is a little bit new for Q3.

We've had SMAs in the past that use leverage, but frankly, we've always tried to temper that a bit because we know the minute you start using leverage, you know, things can get away from you, quite frankly, on the downside and upside. But this ETF, we have launched it with partners that we've known for over a decade. And again, you know, we've got some real-time performance on the methodology that goes back up to 20 years.

So we feel very confident. We've already got a large network of advisors that have indicated to us that they would be willing to put money into it almost from day one. We've got an SMA with close to $30 million that we'll be able to cede it almost from day one. And so that one we're really excited about. And it'll be a good complement to QASOX, our other flag, our other tactical model. Because even though they're both tactical, they're both actively traded, they both trade the NASDAQ 100 for a variety of the trades. They use a different methodology. You've got one that's mean reversion and one that's, it's a number of different models.

but it's a little more trend following relative strength. So when you combine the two, and we're all about trying to combine models, we don't want our advisors to put all their money in one basket. We've seen how that can turn out, quite honestly. And so what's nice about this is it'll play really well with our existing offerings and really help create some additional diversification. Right. And then next year, tactical high yield we're looking at for next year to come out with the high yield, which we already are running as you. Yeah. And again, we've had in SMA for about five years. That's what do they call themselves unconstrained bond funds basically? Yeah, I think that's more go anywhere and buy different bonds. This will be more high in-sell.

You know, one of the things we've learned with working with the SEC is they have this new naming convention that I think came out. a couple years ago that says you know if you have something in the name of your fund like large cap you better have large yeah it's better be in large cap and and they've really kind of come down on that and and you know we had wanted to call this fund you know Q3 all season high yield or tap to high yield not all weather brand not all weather all season mr. diallo solved but we got to thinking well wait a second, you know, it's like so much of what we do. It's a tactical approach. There are times that we don't even want to be in high yields. So we thought, oh, geez, you know, we're going to run into

a problem with that because we can't call it high yield unless we are in high yields. And I think it's 80% of the time they require. Yeah. So that one, we'll see what we end up calling it. We may just call it Q3 O'S using an unconstrained bond or strategic income, kind of one of those those names that kind of cover anything. Hey, SEC, if you're listening,

like let these guys have some fun. Let them name something not so boring, right? Unconstrained systematic income, people fall asleep.

We've mentioned trading places. So give me your top three Detroit movies. Oh. Well, Terminator. No, Robocop. Yeah, it was to me, there's only two answers. Beverly Hill's cop.

And eight mile. Eight mile. Eight mile. Yeah, I forgot about eight miles. Sorry. I mean, I am. I forgot about him. But yeah.

And Beverly Hills Cop. You're absolutely right about that. There haven't been a whole lot. But Robocop was shot here in Detroit. And then what, you guys, Detroit sports fans now? Lyons. I think, yeah, I mean, you've converted pretty much to Detroit, I think. So you were like me cheering for the Packers to lose last night?

Yes, that was a bummer when they made that field goal. But a tie actually will hurt them as well. Yeah, yeah. Things stay as they are. So I was okay with that. But one thing that's interesting, and you see it in sports all the time, and I was going to bring it up, you know, being a contrarian, which is, you know, obviously an indicator that some people follow on the trading floors.

And last week, every single ESPN analyst said the lions were going to lose in Baltimore. Yeah, exactly. And they won. Yeah. And I can't tell you how many times that that has come to be true. In markets, for sure. In bonds, 100%. Like, all these rate cuts are happening and it never happens like they think.

Right. Exactly. Speaking of markets, so your background, gold and cocoa, were you trading cocoa at? ever oh no i was just running orders there and i actually didn't even trade gold i my when i was a local just scalping points it was in the uh cotton exchange but do you have thought those are two of the like biggest most in the commodity world those have been the the high flyers the past couple years so you you still dabble do you still watch and and see what's going on and those uh not really the whole commodities thing i kind of gave up after we started three and uh you know the excitement

of being a local on the floor. When you're scalping points, you're just trading off of emotion. That's all you're looking to do. The emotion of what's coming in the pit in the form of orders. And I'm just looking to get in and out in and out. But we've morphed into being quantitative now

where we've actually taken emotion out of it. So, you know, it's a little strange making that transformation. But when you're talking long term and you're talking about the trading the way that we do and in things like IRAs for people and qualified ones. I mean, it's totally different, and the emotional trading just doesn't work.

Plus, that's a young man's game. It is. It's a very young man's game. Yeah. I was on the bond pit, Board of Trade. Oh, wow. Okay. As a clerk between the option paid and the futures pit, so I was getting all the signals

and relaying to my broker. But I was the same guy. I'm like, wait, why are we rallying? What are we doing? He's like, because Billy's buying, just buy. Like, there was no logic to any of it. And I'm like, this is how the global financial system. works this is the scary as hell um and then so i'm like well why is billy were like because

goldman putting in orders well why are they doing that like i don't know someone upstairs put in them so i was like okay i need to go upstairs what are they doing up there different game upstairs different game but hey those guys were were great right if you were a good local and had that sense you were you were doing well and that's what you paid for the seat for either you rented a seat or you were fortunate to be able to buy one but you paid because you wanted to be down there on the trading floor. I mean, that's where that was ground zero. Peter Stoddemeier, I'm sure you know the name. He's a Chicago guy, big trainer. He talked about the concentric circles of knowledge, of information. And now again, this is back in the 80s, so you got to take

it for that. But being on the trading floor, being in a pit was number one. That's where you, the most information was coming in. And then as you got away from that, and the circle that big, it was a different kind of information that was coming in, that you had to process a totally different way. And then when you're off the trading floor, it's even totally different from that. So, you know, I wonder if he designed their data access, right? Because it's literally your, the servers are in concentric circles like the old pits. And you pay the most money to be in the, the middle near the core. And then the next level is like each circle out. So that's milliseconds, we're talking, or even nanoseconds.

Yes. But you have more information, the closer. For those high frequency traders, and that information can be millions of dollars, right? Yeah. It makes all the difference. Crazy. All right, guys, we'll leave it there. Thanks so much.

Oh, you're welcome. Check out. We'll put the website and all that in the notes. So you guys said you type up some research and some papers now and that. We'll put a link to all that good stuff in the show notes and let people find you. All right. awesome we'll talk to you soon guys thanks so much thank you very much Jeff you have a great day you've been listening to the derivative links from this episode will be in the episode

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