The Derivative - Using the Laws of Trading to find our edge with Agustin Lebron

Episode Date: August 11, 2022

We’re breaking the law...the laws of trading, that is! On this episode of the Derivative, we're joined by Agustin Lebron, who started his career as an engineer and turned prop trader (you'd be surprised how common of a story and skill set that is) before writing his book The Laws of Trading: A Trader's Guide to Better Decision-Making for Everyone Today, Agustin is the co-founder and manager of Esselin Research, where he helps growing tech companies make better decisions using his trading knowledge. Jeff and Agustin dive into his laws of trading, the book, and also chat on topics like; recognizing and nabbing players in small tech companies, applying the laws in a prop firm investing in crypto scenario, how and why trend following seems to break the law around having an edge, and so much more! Plus, tune in if you want to get Agustin's take on FinTwit’s stop order debate —SEND IT! Chapters: 00:00-01:19 = Intro 01:20-12:33 = Why are engineers drawn to trading and markets? 12:34-23:49 = What is Toxic flow? And what is the edge for all these big players 23:50-37:12 = Recognizing & nabbing A players in small tech companies & Applying the Laws in Crypto 37:13-46:56 = Crypto Prop firm scenario part II: Execution, cost, automation & adaptation 46:57-50:58 = Is there any edge in Trend following? 50:59-58:25 = Hottest take: Stop orders & Leveraged ETFs Follow along with Agustin on Twitter @AgustinLebron3 and for more information visit his website lawsoftrading.com and check out his book The Laws of Trading here. Don't forget to subscribe to The Derivative, and follow us on Twitter at @rcmAlts and our host Jeff at @AttainCap2, or LinkedIn , and Facebook, and sign-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, visit www.rcmalternatives.com/disclaimer

Welcome to The Derivative by RCM Alternatives, where we dive into what makes alternative investments go, analyze the strategies of unique hedge fund managers, and chat with interesting guests from across the investment world. Happy Maine Day, people. Yep, that's Maine with an E, which is where I am right now on vacation. But through the magic of technology, I'm still here with you today. And I'll be back the next week too with our growing list of vol episodes, which may end up being back to back to back.

So sorry about that. But these guys are good. We got to get them on. On to this episode where we have Augustin LeBron, a Jane Street prop trader turned tech company consultant after he authored The Laws of Trading, which blends his real world experience with a unique view on decision-making for everyday life. We get into a hypothetical experiment on whether you should green light a crypto investment at a prop firm and much more. It's fun. Send it.

This episode is brought to you by RCM's Managed Futures Group. Managed Futures are having a day, people. Go to rcmalts.com, sign up for all the great content there, and pick up the phone and call one of the specialists to hear what's going on under the hood. You won't want to miss it. Now, back to the show. Okay, we're here with Augustin Lebrun. Welcome.

Thanks for having me. Glad to be here. So I was going to say it's a very French nobility sounding name, but I guess gathered now you told me it's a Spanish nobility sounding name. So what's the background on the name? Yeah, so my parents are from Argentina, and so it's a Spanish name, at least my first name. My last name, it turns out that way, way back in the midst of time, my family was from France, but then they moved to Spain. And that's how the U turned into an O. At least that's the story I'm told. Who knows if it's true or not? You go back to Argentina ever? Yeah, definitely. Yeah. All my family's still there. I mean, my parents are outside of the country, but my whole extended family is still there.

Love it. We my sister got married in Colonia in Uruguay, right across Buenos Aires. So we spent a couple of weeks down there and did all the way down to the glacier, Mendoza. Oh, awesome. Had a good wine. Yeah, that was, it was a fantastic trip. Need to go back. Right. What's their economy doing these days? What's their currency? Well, I just, I talked to my mom a couple of days ago. It sounds like inflation and devaluation seems to be the order of the day in Argentina yet again. It seems like for the, whatever, the 10th or 11th cycle in the last hundred years.

So I always wonder who would buy those bonds. Yeah, I don't get it, right? Like, I mean, maybe people have wised up in the sense that now they're US dollar denominated bonds instead of peso denominated bonds, but I don't think it makes a functional difference, honestly. Yeah. And how do the people deal with it? So how does your mom deal with it? Just like, oh, here it goes again. Or do they have strategies for protecting their money? Yeah. So yeah, it's tough because again, Argentina is one of these countries that still has a fairly bright divide between the haves and the have-nots. And so the way it manifests for the haves is, oh, I can't travel outside the country

because I'm limited on the US dollars I can buy, which is like one of these rich people problems that the vast majority of people in Argentina don't have. It's just like the price of food is going up and I have less and less money to spend on necessities. So, yeah. Right. But it doesn't get to the point of like bread lines and that stuff it just look i mean eventually they're going to get rid of the government and somebody else is going to come in and they're going to do something like we've seen this this game played a lot of times um so i love it we didn't come to talk about argentina though

even though it's fascinating um So you started in life as an engineer from what I gathered from your bio. We've had a lot of former engineers turned hedge fund managers and investors here on the pod. A bunch of our customers are engineer type. So just take me through, what do you think is the link there between like people who get, or engineers and people who kind of get finance for lack of a better phrase. Yeah, no, I think, I think there's probably two big links. One of them is trading and engineering, both you're doing the same thing, which is trying to make good decisions with uncertain or incomplete information. Like in engineering, when you're doing a design, you have to use your good engineering judgment because you're not going to be able to get all the data

to really make a data informed decision. You have to sort of merge your beliefs and your prior information with data. And that's the exact same thing in trading, for sure. And the other thing I think is they both yield to a very analytical mindset, at least from my perspective. And so I think that's a natural connection as well. And how did you make the jump from engineer to prop trader? Yeah. So I made kind of made the jump via poker because I was playing a lot of online poker during, you know, while I was an engineer, like at night I was making money and I thought, well, maybe I could do this, but I had engineer friends who did turn into poker pro poker players. And it was,

it's a soul destroying existence. And so I wanted to find a job that was going to have poker and half engineering. And of course that's trading. And so that's kind of the genesis of my move. And did they recruit you out of poker? No. So I just, I started applying for jobs at prop trading firms and that sort of thing in early 2008, which is probably not the greatest time to be looking for a job in finance. If you'll remember that far back. but yeah it worked out okay uh i have friends and prop firms here in chicago and they'll actually recruit look at like online trading leaderboards and stuff and recruit those guys to be like hey you get game theory we can teach you the finance

stuff rather quickly and just go for it yeah although i i press them because he tells all these great stories of how they got the guy and then then I'm, I'll save that in the back of my head and like years later be like, how'd that guy end up? I'm like, eh, he, he didn't, he blew out or he didn't blow out, but he didn't make it. Yeah. It's, it's a useful indicator. It's not like, it's not like if you only hire poker players, you're going to do great. Like poker player is a good starting point and then we'll see what else we need. And do you think like the engineering, you think you're just a blank slate and you go and then you learn engineering and then that opens up your eyes and you're like, oh, now I want to get training. Or do you think it's like in there, it's in your brain, that mindset and just at school level, there's no, you can't,

you know, there's no avenue to express that except for maybe engineering. And then as you get older, like, oh, cool, there's, here's all these other avenues. Yeah, I think that's right. I think certainly from from looking back to kind of the way I thought about things in high school was I liked all the mathy techy sciencey things. That's I just naturally gravitated towards that. My dad is an engineer. It's like, OK, well, I guess I guess I'm going to do engineering. I didn't really think about physics or math or anything like that. It just seemed very natural to go into engineering. But as you say, as you sort of get out into the world, you start to discover, oh man, like there's a very wide array of places where this can be applied.

I'm worried we're wasting all that good trading talent on like web 3.0 projects and things that are building apps for people instead of getting in there and finding out edge and trading. So then eventually you made it to Jane Street. So tell us a little bit about Jane Street and what you did there. Yeah. So Jane Street is, I guess by now, certainly wasn't in 2008 when I started, but by now, one of the more well-known prop trading firms in the world. And I started off as a trader. I traded a bunch of different products over the years, ETFs, options, did a bunch of stat art stuff. Over time, my career, I kind of moved in the direction of doing more research and development. I think people's careers just sort of naturally

move in directions and that definitely happened to me. So, yeah, I got to see a lot of the business over time. And what was their model when you joined them? You put up some cash or they put up all the cash and you had to earn back? What did the model look like? You get paid a salary and at the end of the year, you get a bonus, right? Okay. I think now I'm fond of saying that there are basically two kinds of prop trading firms. The ones that have you put up cash are maybe there's some good ones out there, but by and

large, especially the ones you see, I'm sure you've seen them in Chicago. Like they're kind of scams, honestly. Well, there have been some good ones in Chicago, but it's definitely a, well, yeah, it's way better for the firm than the guy coming in as the trader. Yeah. And as an outsider, you can't tell. Right. And so that's, that's the challenge. But it's a great way for the firm to be like, Hey, I'm going to basically a free call option on all this young talent. They're going to have fun there, their early losses, and we're going to profit off their later successes. Yep. So I never knew.

And then Jane Street's kind of morphed more into like some market making and some different stuff, right? Yeah, exactly. Jane Street's like possibly famously one of the biggest market makers in ETFs around the world. Yeah. That's kind of one of the big things they do. And so tell us, you got any fun, juicy stories from back in the day there of someone

blowing up or them taking the other side of something big? Yeah. I don't know. So many random stories. Um, certainly like the things that I, I think back to the most in terms of like pure, pure trading was when I did, uh, trading in base metal options on the LME. There's a fairly close shop. And, uh, and so, yeah, it's very much about kind of knowing where the

toxic flow is coming from and knowing sort of how to position yourself so you're not going to get run over as a market maker when some huge metal trading company comes in and wants to do a bunch of size. Very, very much the opposite of what you would think of as, as we'll say, like the modern high frequency, low edge done a million times kind of trading, but I also did a bunch of, so it was like kind of one extreme for me. So what did, what'd you think about LME canceling all those trades? Like if you've been in that, I think it's ridiculous. I think it's, you know, all of the things you might see Cliff Asness say on Twitter, I basically agree with. Right. And then that comes into some of your philosophy on it. How do you work that into your model, right?

Of like talking about like, hey, if you don't think it's ever a possibility, it definitely is a possibility. Right, exactly. If your career in trading is long enough, you will discover a thousand things that you're like, I didn't even know that was a possible way I could lose money.

Oh yeah, it is actually a way you could lose money. And I think if it had been the other way, I don't know exactly how it would have been the other way, but the gains, because we had a bunch of managers and trend following stuff that were long, right? They were long one or two contracts of nickel and it was up enormous amounts of money, like hundreds of thousands of dollars per contract.

So it was just this out of the blue over two days, like outlier game, right. That they weren't necessarily counting on. It was fun to see on the, but you almost looked at it and you're like, is that a real print? So I can kind of see that side of it. Like it didn't even feel real to those involved. But as Cliff, as you point out, is noting on Twitter, like there were trades up there, there were people taking the other side. So by definition, those should have been legit. Yeah. And look, it even happened during the flash crash. As I'm sure you know, people like James Street, among many others, were down there at the bottom of the flash crash buying and

providing incredibly valuable liquidity during this event. And then those trades got canceled. And so if maybe you bought down there at the bottom, you sold maybe halfway back up to the recovery, your trades at the bottom got canceled. Your sales halfway back up didn't get canceled. In fact, you got penalized for being a legit liquidity provider. Right. And be like, hey, cancel my sales. Well, we can't do that.

That was because then I have to cancel that guy's buys. Then the whole. Exactly. Right. So like, where do you stop? So do you feel some of that is, I mean, in the flash crash, I don't even know who was in charge of doing that. Well, that was NYSE in one.

But yeah, I think it's partly the problem of these for profit exchanges. Right. Yeah. Partly. I think also I think that the exchanges are by and large always at least a few years behind of what market structure actually operates like day to day. And especially the NYSE, right? Like NYSE has always been kind of an old boys club. I don't think that's, and I'm not telling any secrets here. And so the idea that a bunch of guys are going to get together in a room and decide which trades get canceled and

which ones don't, and that that doesn't really reflect the reality of how electronic markets work. Like, yeah, that was kind of bound to happen. If they're one of the biggest market makers now, how do you view that whole space, right? There's a lot of, you're on FinTwit, so to speak, a lot of talk, right? Of like, oh, the massive market makers, they make GameStop do this. They make the S&P peg here because they have this gamma exposure. Having been in the throes of it, what's your view on the power of those large market makers? Yeah. So, I mean, somewhat predictably, the feeling that you have as a market maker, even a large market maker is you are 100% the person with the least power, right?

Because you're always there willing to buy and sell. Like you're not moving prices. You're not taking, you're always there providing. The flow is pushing you in directions. And the whole game is just trying to like not get run over by flow, right? So the idea that a large market maker is moving stocks is to me insane.

Like in my years of doing this and in my years of talking to people, I have never seen have literally never seen evidence or an instance of somebody in a market-making position saying, I'm just going to move the stock to a place that I think is not fair. That's crazy. Well, I think their argument would be, no, it's not them moving the stock. It's them delta hedging their options exposure. And in turn, that's what moves the stores. It's like a knock-on effect of them trying to remain delta neutral so they don't have that exposure,

creates knock-on effects where they push the price. Yeah. And look, I think we've seen certainly over the course of the years, many instances where the derivatives market pushes the underlying market because it's gotten too big for the liquidity that's available in the underlying market. But I think at that point, your model of the underlying being fair is broken, right? The fair price is somewhere between the underlying and where the derivatives are trading, right? And you see that all the time in crypto, right? Like the idea that the fair price is in the perpetual future and not in the cash coin is a pretty standard thing to think. And so, you know, I think that's more a mistake about your mental model of where fair is. My mental thing to think. And so, you know, I think that's more a mistake

about your mental model of where fare is. My mental model? No, not yours. I mean, just whoever disagrees with the notion. And you threw a throwaway word there. I want to dig into toxic flow. So tell me how the market makers think of toxic flow, how you used to think of that versus normal flow.

Yeah, so I would say there's definitely two canonical kinds of toxic flow. One is size where, you know, I'm just going to like take a very stereotypical example. Like your, your broker calls you up and the broker says, okay, I got a client that's got a thousand contracts to buy in this thing. And you're like, yeah, I can give, I can show you this price if that's all they want to do. Right. And then you show the price, you print the trade. And then the broker calls up, calls back, like three hours later, it's like, oh, he's got another thousand to do. And it turns out that he's actually called 10 other market makers and that you're just going to get run over. So that's like, you're going to get run over on price impact from their size. That's one kind of

toxic flow. And the other kind of toxic flow is just information. Usually it's more short, assuming it's not like illegal information, it's more kind of short lasting. Like if I'm a market maker and I've got a quote here and there's information on some other exchange and somebody gets that information before I do, they're just going to take my quote. And that's toxic flow because I'm trading against somebody who has some information about the future that I don't. Or already in high frequency already has the other side of the trade, essentially. Sure. Yeah. But and so how do you combat that toxic flow in the modeling in the of just step aside, right? Do they have limits of like, hey, we're only putting so much out there because you never know when this large player comes and wipes you off the books?

Yeah, it's definitely market by market dependent. Certainly. I mean, obviously, as a market maker, you fade away from your position so that you're always kind of trying to close, right. Cause inventory is just risk that you're not getting paid to take most of the time. And so, yeah, that's kind of the natural way to do things, but also just expect, especially in the stuff that's more human directed as opposed to automated, it's just kind of getting a good memory and a good feel for, Oh, this broker usually, you know, sends good orders. This broker does not, or, you know, this is the signature in the market that I see of like a TWAP order. That's probably pretty dumb, or, you know, this is something that looks pretty smart. Like you have to sort of have

that intuition or develop it over time. And how did you, how do you feel it's the, from when you were there to now, how much was automated back then versus how much is automated right now in terms of the market maker space? Yeah, look, it definitely gets more automated over time for a given strategy or a given set of products. It definitely gets more automated over time. Like when I started, um, well, let's say like my boss on the options desk, when he started, you know, being the market maker of like five stocks was a lot, right?

And when I was doing it, like being a market maker of a hundredth of stocks was kind of like reasonable or close to the limit. And now probably you can market make, you know, a thousand stocks with one person or a couple of people. So the level of automation for a given trade probably goes up over time. I think that's inevitable. But also there's always new trades and new things that require, at least initially, a lot of human intervention that kind of over time get automated. Some of the stuff in your books about having edge and edge is the need for a marginal player, right? Like you don't have an edge unless you know someone who doesn't have an edge. Yeah. So how do all these huge firms basically coexist?

How is there enough marginal players to feed the beasts that are Citadel, Jane Street, Susquehanna? Yeah. What are your thoughts on that? Yeah. So there's a couple of things I might say. One is that market makers

fundamentally provide a service to the world, which is kind of this idea of immediacy. Like if I want to buy IBM stock, if market makers didn't exist, I would have to sort of sit there waiting under the metaphorical button willow tree for somebody to show up who wants to sell IBM, right? So the service that market makers provide, you know, there's sort of a natural profit that they should take for that service, right? So that's kind of one side of it. It's kind of hard to avoid. The rest of the world, especially recently, it's like, no, that's a utility that should just always be there. Right, exactly. No, they're not.

And the other side of, I think, the edge is, look, one thing that we know is that markets are incredibly complex, heterogeneous. The world is incredibly complex and nobody has a monopoly on the information that goes into the value of a security, right? So you and I, like we can specialize in one kind of information. And then maybe Warren Buffett, you know, sits in his office drinking cherry Coke and specializes in a totally different kind of information.

And there's gains from trade for both of them trading with each other. Like maybe you and I make money on that trade sort of over the short term, and then Warren makes money over the next 30 years. We're both happy to have traded. Right, which is the kinds of non-economic players at certain timeframes. That's where I think people get confused. I can be a non-economic player at the two minute time frame, but an economic player over the 30 year time frame. Yeah. I want to own this regardless of price right now. Exactly. And if, for example, if I'm an equity market maker, I'm, I'm just a hedger in the spoo futures, right? Like I have no edge there. I would love to be able to advertise to the world. Hey, this, these are hedging trades that I'm doing right i have no information um and then you touched on that too of like so you're some of these groups are looking they're building models to analyze flow and types of flow and assign a player rating essentially to that right so they

kind of know that's dumb flow that's smart flow that's toxic flow yeah like like a very classic example it doesn't work anymore, but like odd lot orders used to be sort of very, very good trades to trade against. Cause that was almost indefinitely, almost invariably retail traders doing less than a hundred shares. Right. So, but obviously that's not the case anymore. Like round numbers used to be a thing. It's not a thing anymore. So like all these things sort of get competed away. And what's the thing today? Who knows?

You've been out of the game. Yeah, certainly in traditional finance markets, I couldn't tell you what the thing is to do today. Although I will say the following, the thing that surprised me over time as I kind of got into it more is how cyclical some things are. So some trades that kind of are good

and then they go away because they get competed. They kind of come back and like, you know, it's like this whole history doesn't repeat itself, but it rhymes. Like I feel like trading strategies have a similar sort of lifestyle or lifespan where they're good, they're bad. And then like some weird variants of it is good again, many, many years later. And how do you view that as, okay, this model is broken or it's on pause or like, as you have that trader philosophy, that trader mindset and all back to some of your laws, like how do you view the model? Is the edge gone or just resting? That's one of the hardest questions I think to answer. I don't think there's, I'm not aware of a universal answer to that question. It's very, very case by case. But certainly if you have a strategy that's trading thousands of times a day and it

starts to do bad for, you know, like a couple of weeks, then probably something about the world has changed, right? Whereas if it's more episodic, you know, you're only doing a few trades a day, it's going to take you more time to figure out that maybe it's not doing well. So. Yeah. Which is the push to higher, higher frequency. Cause then I have more information to feed my mom. Um, we've seen a little bit of that in the, uh, volatility machine learning space over the past couple of years of like things are happening that these models have never seen. Sure.

Um, right. And if you're, and especially in volatility events, widely spread out, right? Like one every three years. So how do you model something on those events with any reliability? Yeah. And I think that's one of the most interesting questions as a trader, as a trading firm, is how to allocate the smartness between the human brain, the well-trained human brain that is good at one thing and the machine that is good at something else. Like sort of where does that balance lie for any given strategy? I think is a really interesting question. And there's a lot of alpha and just making good decisions about that, I think. And so where do you come down on that of like, right, there was this big rush to like, hey,

we've got the super duper AI hedge fund that we don't need the humans. It's going to find all these patterns to all these things. I'm broadly skeptical of that. I think one thing I probably believe is if you already have good features, features that have alpha that you sort of have developed because human brains are good at this stuff, combining them in AI machine learning ways is probably a good thing. Like there's probably good ways to do that.

But hey, AI, go find me some good features is very, very, very hard to do that. But hey, AI, go find me some good features is very, very, very hard to do. Kind of broadly skeptical of the people's ability, claimed ability to do that. And or it finds the thing that the junior trader just the first day on the desk is like, hey, why don't we do this? To me, it's going to find the simple stuff first, but maybe not. I think and the power of those who would argue it are like, no, it, right. It'll find these, the yen does this versus the Argentine peso. And that's a signal for the French bonds or whatever it's like, but then it's like, okay,

is that causation or just random? So there's a lot to unpack there. So you wrote the book and then you're doing consulting. So what does that look like? Who are you talking with? Who are you doing consulting for? Yeah. So it's interesting. This grew out of my consulting and technical consulting where I'm doing a lot of machine learning consulting and that sort of thing. The thing I'm fond of saying is that every technical consultant turns into a management consultant, whether they want to or not, because a lot of the same stuff would come up again and again around hiring, around management and that sort of thing.

So over time, I started to do more of that stuff. They're like, hey, I like what you're saying. Do you know anyone who can help us with the management side? Right. And my answer was always like, no, I don't necessarily know somebody, but let's talk about the process by which you're going to find that person. And that's like, a lot of the time, it's amazing how important, everybody says hiring is incredibly important, but if you look at their revealed preferences in terms of how they behave, a lot of companies are really behind the curve on

that. And so you're mostly working with tech companies. Yeah. Yeah, definitely. That's the, and so it's not nothing to do with the trading side, but you kind of take some of those lessons and apply it to their businesses. Yeah. It's amazing how, how having a, an experience and thinking about markets, like the market for talent is exactly the market, like the market for, for something else, right? There's, there's, you have to figure out how to, how to buy, how to sell, adverse selection, all this stuff, it all applies. So take us through like some examples there. How do you, how do you help those companies deal with that? Especially in today's world of like, oh, you want that developer and he costs

800 grand and he's got six other jobs he's working for, and they're going to offer him a pool day every Tuesday or something. Yeah. So, I mean, I think one of the biggest failure modes of especially small tech companies that I see a lot is the idea that, oh, we only hire A players. And so we're going to go off and hire some, we're going to look for some A players. But of course, these tech companies, A can't compete with big fang salaries. And so in fact, they never had a shot at the A players, the supposed A players, right? And so thinking very clearly in a very money ball sort of way about who is the person you need and how do you incentivize them and get them excited about your particular startup or your particular company is a thing that there's

a lot of alpha in that and being able to tell the story of your company to attract the right people so that they do say, okay, well, okay, I'm not going to go to Fang, but the reason I'm not going to go to Fang is because I'm going to take a lower salary here, but I believe in the upside of this company. Like that's how you sort of solve this, this kind of comp problem that a lot of small companies have. But does that just pure narrative and getting them to drink the Kool-Aid, so to speak, or is it giving them equity and giving them options? Yeah. I mean, obviously it's equity. I mean, one of the principles I always used to tell people is

it has to be the principle of no worse off, like conditional on them believing in the future of this company. They have to be no worse off taking your offer than somebody else because otherwise that's unstable. And some of it is obviously convincing people and convincing people that you're convinced, but also signaling the right things in the whole hiring process, right? How do you talk to people? How do you evaluate them? Is this a process that they want to go through, that they're excited, that they find compelling, that they can tell their friends, hey, look, I didn't get the offer of this company, but I really liked their process. Why don't you apply that's that's where the real good stuff comes from and you do you see any of that slowing down or like how does right fang microsoft's on a pause i think apple said

yeah so yeah right now certainly in the last six months it's been um yeah it's it's gonna be there's gonna be a reckoning i think for tech tech talent if this continues. I feel like there are a lot of people stuck in those FANG jobs just kind of doing good financially, but perhaps not in terms of the value they provide the companies. So I think there may be another shoe to drop here. And how did the stuff I've been reading, like all these employees that had stock-based compensation, even at the public a trader or even in the private markets of a down round of how do you handle all that stuff? If you're a small company with capital and want to hire people, there's probably no better time than now to pull out really, really good engineers from companies that they that, you know, they're looking for something else now. Yeah. But they've little jaded perhaps, but yeah. To, to your benefit. Yeah.

And so do you, you never talk with like aspiring prop traders or do any consulting like that? You've moved totally. I do. I do. I do consult with, with trading firms as well. Yeah. Sometimes I get, I get DM'd and, you can move totally. I do consult with trading firms as well. Yeah. Sometimes I get DM'd and it turns into a good conversation. Yeah. And what does that look like? They're looking at hiring or they're looking at, hey, help these 10 traders. The whole shoot match sometimes. Yeah. Yeah. I think, look, a lot of the time prop trading is a lonely business because it's very competitive and there's not a lot of the time prop trading is a lonely business because it's very competitive and there's not a lot of information sharing out there. Unlike say software, right? Like you can

read a thousand blogs on medium about how to build software and you can kind of get a sense of what the industry believes about how to do this. In prop trading, it's everybody's in their own little island. And I think a lot of the time, just having somebody from the outside come in and say, Hey, we're doing this. Does this sound crazy or sensible to you is, is pretty valuable. I think, you know, I've done that a bunch and, and, um, yeah. So that was going to be my little game I wanted to play here. Let's kind of, instead of going through all the laws of trading and from the book, let's do a little, uh, little role play experiment you don't have to put on any costumes the um so let's say we're at lane street lane jane lane street prop firm and one of the traders says they want to allocate money to such

and such crypto product maybe a yield play maybe a trader who jumps in and out of shit coins. So either as that consultant or you're working at the firm and you want to apply these laws, how do you kind of start to construct an idea of like, okay, let's move ahead with that or not? Yeah. So I would say as a baseline, we need to make sure that the incentive structures for people at the firm are aligned in terms of like comp and that sort of thing. We could probably talk about that forever in terms of like, what is a good incentive aligned comp structure for a trader at a firm, but leaving that aside, assuming that's all settled, obviously question one is like, where's the edge? Like, why is this? I'm not going to let you off the hook. Give us that, give us two minutes on what that incentive

structure is. Well, like your traditional hedge fund manager that takes two and 20 obviously is incentivized to put more volatile positions on than the investor is. This is just like traditional hedge funds, right? Because they get paid on the upside and don't lose as much on the downside, unless you have high watermarks, in which case you have the risk that they're going to shut it down and open up a new one. Similar sorts of things apply in prop trading firms, right? Where you're like, if you give somebody a bonus today for a trade that's going to realize over the course of three years, they're going to be incentivized to just kind of do the trades that only blow up in three years. We saw that in investment banks. So there's a million ways of screwing up incentives is all I'm saying. Yeah. Their incentives are going to inform their trades. Exactly. Yeah. Like, well, I get paid quarterly. So no, I'm not putting on

this thing that sits there for six quarters before it pays out. Exactly. Right. But then overall, do you think that leads to more and more risk-taking? Yeah, look, I mean, it can lead to risk-taking or it can lead to the opposite. I do know of prop firms that don't pay out a huge percentage in bonuses. And so that trader is going to be incentivized to just do a good job, not do a great job. It's the office space, like I only work hard enough to not get fired kind of thing. I like it. And then just last bit on this topic, we run across a lot of hedge fund guys start up because they were at such and such firm and they didn't get their bonus because they got netted out against the rest right like hey i killed it in that gas trading and this idiot over here was trading lumber and lost a

bunch of money for the firm so i didn't get paid out i'm gonna go start up my own thing right exactly yeah which is great that fuels a lot of talent out there in the in the industry um so sorry i cut you off. So getting back to this sort of specific idea, like question one, where's the edge? Like, what is it that you figured out that the world does not know? Or what is it that you can do that the world cannot? And that's kind of the baseline, right? Like, tell me a story here. And sometimes that story is show me some data, of course, but usually it's a little more than that, right? Like, why is this available to us and not to somebody else? That's question one.

Crypto, if I come back and be like, well, because look at it, we can get on this exchange, so can everyone else, but look at the volatility and we can harvest that, right? To me, that's where I'm using that specific example. It seems weak there of like that you actually have an edge, it just looks shiny and there's a lot of potential profit right i mean look a lot of the times in in crypto the edge is like we're willing to do sketchier things than somebody else i don't know if that's an edge but yeah it's something right i guess that is like yeah we're willing to like literally take these things on our balance sheet and trade in and out of them when, yeah. Okay. So, yeah. So edge, first question, certainly.

Question two is, I would say, okay, given that this is your edge, this is the thing you believe, is this the most liquid instrument to be putting this trade on in? Like a lot of the times you think of yourself as having an edge in this one thing, where in fact, like your edge is more diffuse than that. And probably maybe there's a more liquid instrument to put that on it. Like for example, I, I like an equity analyst looks at this company and says, Oh, I really liked this company and good, blah, blah, blah. We should buy it. Right. And you dig into why they think the company's good. And it turns out

they think the whole sector is good and undervalued. Like, well, why are you buying this one company? Like probably you should buy like the sector ETF or something. So always finding the most liquid instrument to put on the risk, I think is a really big thing. Trey Lockerbiein, In this case, if I'm like, oh, I really love Solana, you're like, well, that's where it gets nuanced. Will Barron, Do you really love Solana or do you just think crypto is undervalued or do you think crypto is going to go up?

Why Solana and not something else? Trey Lockerbiein, Yeah. And that's interesting because that the illiquidity there might drive your supposed edge right oh i like solana because like look at all these axi infinity players it's like well why don't you just buy axi token then you know i mean like it goes both ways got it all right i like that one uh so there's that and what and but what's the why and the liquidity? I mean, just to reduce friction of your edge? Yeah. More liquid instruments are just going to be cheaper to trade, right?

Not in case you're totally wrong and we need to get out of a huge- Well, so this is going to be the next thing. The liquidity thing is also kind of the risk thing, right? They relate, right? If I have a position on how hard or easy is it for me to get out of it? A liquidity risk is, I think, systematically undervalued, even within trading, but certainly outside of trading. And so like, what is the risk of me having this position on when I want to get out of it? Are we all going to be rushing to the exits? Like all these sorts of questions relate to the next thing, which is the risk thing. What's the worst case scenario? How likely is it? How can we hedge it? Is it a thing we should hedge or not, or just take the risk? Are we getting paid to take that risk? These are sort of the risk questions that relate

to the liquidity question. And then I think in your book, the example of LTCM had an issue there, right? It was massively into that trade and then they didn't know there was others massively into that trade. Right, exactly. And the thing that's cool about LTCM is like, oh, well, the on the run, off the run trade

is totally uncorrelated to the Russian bond trade. Like clearly those are uncorrelated, except for the fact that LTCM had both of them on. That's the correlation, right? And so enormous size. So when they're going out of one, they got to blow out of the other to get out That's the correlation, right? Right. And so- Enormous size. So when they're blowing out of one,

they got to blow out of the other to get out of the, yeah. Exactly, right? So I created the correlation. Just like in the mortgage crisis, it's the exact same thing, right? Before 2008, house prices across the United States had never gone down sort of universally. Or the correlation between different cities, major metropolitan markets was very low. Okay, well, so now everybody puts on these bets where we're trading these structures that have mortgages across the country. It's like, okay, great. Now we've just manufactured the correlation that we're relying doesn't exist.

I like that. Where does that in today's world? What's the hidden? Someone's creating the correlation that's going to screw us. Yeah, that's a good question. I think certainly, I mean, if one thing that COVID taught us is that there's a lot of correlation in the supply chain that we didn't really realize existed. That's definitely a learning, right? Like these sort of hyper-efficient supply chains with not very much slack, that makes everything very correlated in the sense that like a problem in one supply chain will destroy 10 other ones. Yeah. And back to crypto, I think there's some there too, right? Oh, this Celsius blew up and it's affecting all these other prices. Yeah, exactly. Because

everybody turns out owed money to everybody else. So next? Yeah. And then sort of model things. Like how are we going to execute this trade? Like what's the efficient way to execute it? Sort of implementation details are super important. That'd be kind of next, right? Kind of running down the list.

Yeah. And so in my crypto world that would include okay we got to go open accounts at all these different exchanges perhaps or what does that look like if we have to send money to offshore yep back to our and that's the cold bar they're all intertwined too so as i'm implementing margin how is that margin calculated yeah um how are we going to execute are we going to take there's a take fee are we going to execute? Are we going to take? There's a take fee. Are we going to provide? There's a provide rebate.

Are we going to make more money providing than we would taking? You know, these are pretty useful questions to ask. And that relates to the next thing, which is cost, right? Like what are the costs to putting this trade on? Anytime, I'm sure you've seen this, like anytime you're trying to put a new trade on, there's always a cost that you didn't quite appreciate. You didn't quite factor in. You do like you traded in small size and you're like, oh, wait a second, where am I losing the money? And you're like, oh, I'm getting like net grossed on this one random fee or something,

right? Like there's always a cost you didn't realize. I used to, so I was on the board of trade bond pit as a clerk way back in the day, and I would paper trade, right? So I'd have my card. Oh, I bought 10 here, sold them here, right. To kind of learn how to trade. And I would always do pretty well. Cause I'd be down a hundred ticks, do a hundred lot, make a tick, get it back right now. I'm back to even. So when I went to real world trading was like, Oh, not there's costs that I didn't consider. There's margin that I didn't consider. There's position limits. I didn't consider like, no, you can't just throw on this under that. Um, so yeah, that's very, very real world.

Yeah. I can't like, I can't St. Petersburg paradox my way to flat. Like if I keep doubling every time I lose. Right. Yeah. Uh, I, what's it called? I thought it was the anti, uh, Monte Carlo or the reverse. Uh, is it, maybe it has multiple names called i thought it was the anti uh monte carlo or the reverse uh is it maybe it has multiple names i thought it was the same paradox but you're probably right um and so in my i'm going back up to the wrist and trying to stay on our grip so if i wanted if i'm like oh i'm getting into this yield farming deal where i'm making 14 how would you think about those risks there and what those costs are that you're not quite considering? Yeah. For that one, it's pretty clear.

Why am I being paid 14% to give you my money? If my principal is supposedly protected, where is this 14% coming from? I think that's the number one question that anybody should ask themselves. And you will get a variety of incredibly complicated sounding answers and one thing and look like i'm happy with the complication like don't get me wrong but being really really like just think of like um think of like an old-timey farmer that's just really skeptical about everything and wants it explained like you know like i'm two years old yeah be that guy, be that person. I'm not getting it. Can you just dumb it down even more? Do not be afraid to get it dumbed

down to the point where you understand it. And if they can't do it... Yeah. And so at our hypothetical prop firm here, if we're saying, okay, we understand that it's a Ponzi, we understand that they're paying that yield by getting new investors. Is that automatically off the table? Or you say, okay, I understand that risk as long as I'm not the last one holding the bag. Maybe we're still fine getting into that trade. I mean, ignoring the moral issues there, but just on a pure trading point. Yeah. I don't know that I'm at least for myself again, aside from the moral issues, I don't know that I would be, I would think of myself as having an edge in figuring out when the Ponzi is going to blow up. That's not the kind of edge that I've historically

done well with. Yeah. And so I would be skeptical, skeptical about my own personal ability to figure that out. Whereas conversely, if I was some like hyper well-connected person who knew everybody and who knew everything before everybody else, like, okay, maybe that's a trade for me. Yeah. Once you hear a whisper, you say, I'm out. Yes. Okay. What was the next one?

Where were we at? Cause? the next one um where were you at cause on on specific trades i think it's um it's it's sort of it gets sort of a little bit more tenuous but certainly there's considerations about um kind of uh we've already talked about the alignment thing technology like how how are we getting sort of how are we executing this progressively more efficiently over time right it's kind of a big thing like i start a trade maybe it's very manual to begin with, but like we said before, how do we get to the point where this is pretty automated? Because the scarce resources is human being time. That's always the scarce resource. And so let's figure out how to use technology to

automate this thing so that we can put this on autopilot and go look at the new thing. Right. So that's, that's once it's sort of been going right. How do you, how do you view that? Like in the high frequency guys, just the race to zero there, right. There's, or you're spending a million dollars. I'm spending 10. You're spending 10. I'm spending a hundred. I'm getting a, you got a fiber optic line. I'm getting a radio tower. Yep. Like seemed like a race to zero in many ways. Yeah. Yeah. That's a,

that's definitely, I mean i mean again if you have a competitive advantage in that then maybe that's the thing for you to do i you know that's not a game like the hyper speed stuff is not a game that i ever played in um but yeah it's just an interesting one to think about like because cool i can do the technology and i understand the concept of like you need to always be improving your technology to have keep maintain your edge but at some point you have to bring the economics back into the picture and say like hey well yeah i might have an edge but if it costs 100 million dollars in technology and i only make 101 million dollars on the edge is it is it worth it anymore exactly what was next on

your life alignment i think alignment technology and then the last one i think is adaptation which is this idea that, look, markets are always getting more efficient over time. That's just the nature of the beast. And so again, like this new trade that we're talking about, is it a stepping stone to a whole new world that we can expand into, right? Like, is this just kind of a one-off

or is this something that has the potential to be a beachhead for something new, right? I, is this, is this just kind of a one-off or is this something that has the potential to be a beachhead for something new? Right. I think that's an important consideration as you're growing where all other things being equal, you probably would rather do the one that, you know, it feels like a beachhead to something new. Cause you're, you know, that over time, those strategies that you're running now, they're still profitable are going to be unprofitable. And you're gonna have to find the next thing. That's the treadmill that we're on as traders. That's fine. You have to accept that. But how do you approach that problem? So, okay, I accept that I need to be adapting, but okay, how do I adapt? What if I'm in a losing streak?

What if I'm in a, right? What does that process look like of education or training or mentorship? Yeah. I mean, some of it is pretty Darwinian, right? Like there's a lot of companies out there that were awesome when all trading was done in person on the floors that couldn't adapt to the transition of electronic markets, right? Yeah. And I think similarly, you know, stuff that used to be very obvious before Reg NMS, like just like easy trades before Reg NMS happened, like, okay, well, those are gone now. New trades showed up because of Reg NMS. So again, like that's sort of this adaptation.

And remind us, the listeners and maybe me, what Reg NMS did. Yeah, so Reg NMS is, so it's a regulation, SEC regulation that says that essentially, if you are, I'm going to sort of butcher it for the sake of the conversation, but exchanges listed or lit exchanges, you cannot fill an order for a customer

at a price that is worse than they could find on some other exchange. Okay. Right. So that took away the whole level two, so spandic guys, that kind of stuff. Yeah. All that stuff stuff and other things too like used to be being a specialist on the nisey was just like a license to print money because you you would just like put the book kind of wherever you wanted to and that's

kind of disappearing or gone now too so yeah what's the next thing i don't know so basically you're saying like there's no who knows if you can adapt, you maybe can't adapt and you have to go find something else. So if you don't know how to adapt, maybe go look for another job. Yeah. That's, that's the harsh. We want the secret sauce of like, no, you start doing this exercise every day and then your brain will adapt to become a better trader.

Yeah. Not that i'm aware of if you find out you let me know yeah doesn't exist yeah and part of me on the adaption too it's like i'm always that's one of my crypto pans it's like okay well when once this becomes big enough doesn't apple just say cool here's our new protocol and our new thing that everyone's already connected to and boom that kills like these 10 protocols that we're trying to build something that competes with. Or Amazon or any of those big companies could just say, cool, thanks for taking this to the 40 yard line.

We're going to take it the rest of the way down the field. Yeah, there's two sides of that. One is they may not like, look, there's endless supply examples in history of large incumbent companies that just could not adapt to a change in technology, right? Like Kodak famously. Kodak invented the digital camera and they still lost, right? Which is insane. But I think you're seeing that now, like FTX is quite clearly consolidating in the crypto space, like buying small exchanges,

buying people that are distressed, et cetera. So that consolidation is going to happen. That might not necessarily be bad for you as a small player to kind of get somebody to cut a check and just buy you out. And it's like, okay, great. That was good. I did my part. Yeah. Thanks. On to the next thing. Right. Yeah. And then switching gears a little bit, I wanted to ask you about trend following, coming back to edge, right? Because we're like, hey, you got to have edge. The markets are going to adapt. Things are going to adapt. But then here we have this thing, trend following, that's been around for 40 plus years or longer than that, but people have been doing it professionally and

managing money with it for 40 plus years. How do you explain, right? There's no real edge there. I can write up the trend following model on Excel and, you know, an hour and be trading something like that. But so how do you explain like that? There's still edge long term in that, but not really any edge and that the markets don't adapt and kind of kill that as a factor. Right. So, I mean, you might be able to tell me more than I could tell you on this. A couple of thoughts that come to mind, certainly, is we use the label trend following for a thing. And I'm pretty sure that the thing that was called trend following that you did 20 years ago is not the thing you do today, right?

It's still kind of under this broad umbrella of trend following, but the implementation details are very different probably. And the thing that's clear is that details matter. Every little detail matters in order to create a profitable trading strategy. And so I can give you that Excel spreadsheet that says, oh, look, like there's positive serial correlation. Let's just do this. And I give that to 10 people and 10 people

implemented in 10 different ways. And 9.5 of them are going to lose money doing it. You know what I mean? Like there's a lot of baked in knowledge that about these things that, that the changes over time, but that also kind of gets competed away. I don't think the edge and trend following is what it was like 30 years ago. Maybe I'm wrong. You tell me, but, um, Well, yeah, there are a few things. One, there's definitely some managers that are still trading the same model they were trading 40 years ago. Um, maybe they've added some more markets, they've added other stuff. And then there have been right in order.

There was a down period from like Oh nine to 20. Um, essentially it was flat, had a few good years, but essentially it was flat during that whole period. And a lot of trend followers added, okay, I need to add more long equities. I'm going to add long bias. I'm going to add a couple of these pieces that in that period made it better. But then those have been the underperformers in this two-year period as commodities. So yeah, I feel like they've done it, but I think the core essentially is still there. Yeah. I guess the thing I would say is, is there selection bias, right? Like trend following

as an idea may be still there, but if you look at like of the hundred firms that did trend following 20 years ago, how many are still here today? Like I'm guessing it's not a huge number, right? And so there's sort of this cycling in and out that you know probably exists as well um yeah it just was interesting to me reading through like okay but if you have to have an edge but if the edge is it's also factor there's been some papers right of like as soon as the factor becomes published in an academic paper it ceases to be a reliable factor yeah right because basically you've publicized the edge everyone hammers it to the point where it's no longer an edge. Um, so I don't know if there was a question in there, but it's, it's of interest. Yeah. Like, like you said, I think these things can be very cyclical.

Um, and you know, when, when, when things are kind of good and or bad for years and years, you just don't have a huge sample size. And so like, there's probably some amount of like, you know, the people who are, who continue to do trend following and do it well, like probably they're good at it, but also probably they got lucky. Like there's probably a little bit of both. Yeah. And for me as an investor in it, I think the edge is your willingness to endure years of down. Sure. Right. Or your willingness to endure a 30% drawdown. Yeah. Um, which doesn't sound like an edge. You want, you want the edge to be like the program eliminates those, but part of it is like, yeah, this may, and other people could argue, well,

that means the model doesn't work. Right. If it has these 30% drawdowns, um, maybe it's not the edge you're looking for. Yeah. But I digress. Going to finish it up with your hottest take, unless you got any other thoughts on our theoretical crypto lane street. No, this is good. What we're missing. No, I mean, I think the one thing I do want to say is it's more of a conversation than I'm going to ask you questions. You're going to give me answers. Like it's much more interactive than that. I think that's where the good stuff comes from. Yeah. Of like, and that's an investment committee or even asking yourself as a personal trader, like putting it

down on paper and really thinking through those, those concepts. Yeah, for sure. And then it's funny, right? Cause you could do that whole exercise and never have come within a million miles of like GameStop. Right. And then you have some guy who's just like, whatever, this thing's going to the moon. That's what makes this thing wonderful. That's the crazy part of like, how do you reconcile those two? Yeah. So let's see. So hottest takes. I'm going to give you a very, very hot one because it's blowing up on finance Twitter as we speak, which is stop orders. My hot take, which is not hot for professionals, but is apparently hot for amateurs and retail

people is if you are frequently getting stopped out of positions, you're doing something wrong. Like if you're hitting your stop limits fairly frequently, whether it's through specific stop market orders or whatever, you're like, you're trading too big. Like this just kind of, it shouldn't be a hot take, but apparently it is. Well, I think because they'll take that as you to mean don't use stop orders. Right. And I would say like mean don't use stop orders. Right. And I would say like, don't use stop orders as a separate thing. Like stop market orders are like poor, are almost always a poor way of executing things in reasonable markets for a variety of reasons that probably don't have time to get into.

But like people kind of conflate the two. I don't know. There's a lot of, I think, confused thinking on the subject. So that's my immediate hot take. Yeah, because I would say from an allocator and investor standpoint, if I'm doing my due diligence on you and you're like, oh, we don't ever use any sort of stops. And we're like, well, it makes me a little nervous,

but then tell me more. It's like, because we only risk 10 bps of our overall portfolio on each position. And if that goes to zero, we only lose 10 bps of our overall portfolio on each position um and if that goes to zero we only lose 10 bps okay fine yeah right there's a big difference between using a stop market order and i'm going to gradually scale down my positions as things are going against me like those are two very very different things and people kind of confuse the two for some reason yeah and then i we had a manager once who used stops believe them past everyone's due diligence i got my stops in

place but he would he'd be like long gold he'd get stop out and then get back long the next day We had a manager once who used stops, believe it or not, past everyone's due diligence. I got my stops in place. But he'd be like long gold. He'd get stop out and then get back long the next day. Like, what are we doing? So you don't really have a stop. You just have a mechanism for locking in losses. Exactly. Right.

And that's the thing that's amazing. That's the number one question that you should ask is like, okay, you're going to get stopped out. Now, what are you going to do? And if the answer is like, back in yeah and then what we had a we had a guy at a prop firm once and he he analyzed all his data one of these traders he's like basically found out like when i start losing then i really start losing so he had the team like code into his machine he couldn't put any more trades in after he was down after he'd lost like 16 trades in a row i can't remember what the number was or something but then the i was talking with the programmer guy who's back on saying and he would call me up be like unlock it unlock it unlock the machine what is this yeah crazy but it worked for

him it's also like just hey whatever works for you make it happen um and then to me on the stop thing like as you if it's you're basically too tight right yeah if you're getting stopped out over the time the volatility is greater than your stop it needs to be volatility based or or something yeah um so that was the immediate hot take yeah my longer term hot take is that um i don't think the leverage etfs should be a thing that retails allowed to trade that's that's my other hot take there's a very unpopular take among professional traders but yeah they're just a disaster why so it's like because because of the the rebalancing that they do and the and the forced trading they do they just they basically

just lose money over time that's just all that they do just they basically just lose money over time. That's just all that they do. They're just a mechanism to lose money over time. And retail just loves to say, oh, I'm super leveraged, like VIX something, something. And it's like, yeah, you're going to zero. There's nowhere else you're going. Right. And I think a few sites started to do that. This levered ETF should be used for a a one or two day outlook. Yeah. Right? Like essentially that's what it's there for. Not for like, I'm double long net gas for the next six years. Yeah. Like intraday, fine, whatever. But you know, if you're trading intraday,

you probably have access to products that are better than those. Or even if you don't, that's fine. But retail should probably not be trading intraday anyway. So what are we doing here? And even a bigger question of like, but you're not going to allow someone to do a cash crypto ETF. Ben Felix Yeah. Ben Felix But I can triple lever Tesla. Ben Felix Don't get me started on that. Ben Felix Yeah, I can triple lever Tesla short ETF.

Ben Felix Exactly. Nuts. Ben Felix And we did a blog post once on levered nat gas ETF versus the 2X short nat gas ETF. Ben Felix Yep. etf yep over three years they both were down like 92 exactly they should be right it should be something looking like this exactly and they they both just do this and they both just went down because yeah absolutely and the uh the proponents will say well that's not what they're for. You don't buy and hold them. But yeah, does the retail space know that? No chance. No chance. So thanks for being here. Good luck. Tell everyone where they can find the book and where they can find you on Twitter and all that good stuff. Yeah. So yeah, you can find the book

on Amazon. It's called The Laws of Trading. And you can find me on Twitter at AugustineLeBron3. Three. Are there ones and twos out there? Apparently not, but that was all that was available. You got another book in you someday? I have no idea. If I do, it should probably stay in there. It's an ordeal for sure. Yeah, I bet. Yeah, yeah. All right. It's been fun. Thanks so much for your time. We'll talk to you soon. Enjoy. Bye. You've been listening to The Derivative. Links from this episode will be in the episode description of this channel.

Follow us on Twitter at rcmalts and visit our website to read our blog or subscribe to our newsletter at rcmalts.com. If you liked our show, introduce a friend and show them how to subscribe. And be sure to leave comments. We'd love to hear from you. This podcast is provided for informational purposes only and should not be relied upon as legal, business, investment, 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 Thank you.