We All Evolve

Greetings and welcome to Inside Baseball with Old Chestnut. I'm Liam Allen with my friend Morsex. How you doing, MB? It's great to see you, pal. It's great to see you. Likewise. It's been a long time. Feels like it's been a month. It uh I suffered a bit from separation anxiety, to be honest with you. You were with your family, so like don't say that on the air. You know, we don't need the family here. Okay.

How was your week? It was great. It was great. It was great. Yeah, it was fun. It was exciting. It was exciting. Yeah. We went up to Canada, Cheryl and I. Um, we flew in on Ibwak one. And uh we're met by the RCMP honor guard. um playing the both Canadian and American national anthem as I was able to deplane without falling. Okay. Uh represented our country. And then we

Held a meet and greet where we gave Cheryl and I gave out free coffee and donuts at Tim Hortons. It was it was well attended. Good, good. Yeah. I I was a little bit disappointed on Sunday I woke up and it was thirty uh twenty-three degrees. And I was rubbing my hands together waiting to get my free de si de icing. She's not sure. Apparently uh it wasn't necessary. So But it's uh it's been good it's been good to been b to be back. So

I figured we could spend the first half of the show talking about the the sphere. Okay. And then For the back half for the other listeners, we could talk about the difference between East Coast and West Coast mountain biking. Perfect. Are you in? Yeah. I wanna talk about Handler's boat though. Oh Put that on the list for the end of the show, once we get through everything else.

Well, I you know, why not? I mean, he he brought it he bought it from And I'll never get the guy's name right, but Tillison, one of his friends, clients who made a lot of money in restaurants, which is an amazing feat. Um we have a grudge against him. I'm sorry. We we have a personal grudge. Yeah, that was uh we had a little altercation in one of his restaurants. Uh as long as we're just for the okay, you so we know who we're talking about. Okay. Yeah, same guy.

Same guy. Let's do that later. Let's do the boat later. We'll do the boat later. We have more more important get to. Uh you know, waiting for the invite, but but you never know. We've we've supported the Wolf Conservatory in in many ways. Likewise. And uh We'll see. We'll see. But uh you know, I I have no issue. Rich has never sold a share of stock and Um but it's a boat. But it's a boat. It's a boat. Okay. That to me indicates terrible decision making. You can there's there's three things

That you're supposed to rent, I think. Okay. If it flies. If it floats or if it fucks, you're supposed to rent it, right? I was told that. That was that was my understanding, okay? Yeah. Well, I I'm not a boat guy. All my boat guys, okay, do nothing but complain about their boat. Yeah.

Like the two happiest c days in a boatman's life is the day he buys the boat and the day he sells it. Right, exactly. What are we doing here? What are we doing? We had a uh Cheryl had a similar experience with the aircraft. I mean I I think The day we bought it was um the day before nine eleven. And uh are you Oh oh yeah. And this is one of these examples of just total shit legal advice. We bought the plane on I think September tenth, something, 2011.

And on September eleventh, you know what happened, right? Unbelievable. Your timing, man. Well, but I called the because the deal hadn't closed, and I called the lawyer. And I said, you know, this clearly is gonna drop the value of the plane. Should I walk away from the deal? And he goes, Well, he goes, you know, you'll lose your deposit, which was, you know, a hundred grand, which was material, but the price of the plane dropped by fifty percent.

And looking back on that, it was just total shit legal advice. Like, if that happened to me today, I I mean I I wouldn't even bother showing up for the closing. Right, right. But um Anyway, uh you know the you gotta find the right lawyer for the right job and and some of these guys is they try to play hard asses, aren't that um Good at it. I I do recall a Dickens play. Uh I think it was called Bleak House. And um in there there's a lawsuit.

Called Jarndice versus Jarndice, which goes on for so long that All of the money in question was depleted by the legal fee. Which is having started to see some of these in my own experience, I've but recently learned to to cut bait on some of these things, which is which is pretty Keeping in mind you have uh two young children, and uh um I suspect our average age.

is a bit older than most. Um, I I don't know how accretive this will be. But you and I both publicly and privately for long periods of time have discussed how we think the devices are screwing up people's Brain. And so I mentioned, I think, on the last podcast I was spending less time in front of the screens. Do you recall that? So I did two things. I was dogmatic about not sitting in front of the screens, number one. And number two,

I noticed how many text messages I was receiving. And I was getting something in the order of 30 text messages a day from 20 different people. Okay. The combination of the two things, so I've I maintained my uh reluctance to get in front of the computer. For the people who texted me that I care about. I wrote them a note. I hope it was nice. I don't know how it was received, but I said, please, going forward, don't text me, email me, because I'm going to uh eliminate my

It it's th these devices are designed to design to benefit the owner of the device, not everybody else. And in my case, uh I find them unsettling. Even when you mute them, they vibrate or whatever. And so what I noticed in the time that I've stopped. Looking at the computer so much. My reading has grown by leaps and bounds. In the last week,

I've read seven hundred pages. I've read two books. Now I didn't read seven hundred pages. I've got two degrees in accounting. I didn't read seven hundred pages between the two of them. And I I don't have the same underlying anxiety about what's next, what's next, what's next. And so to take it a step further, you know, I'm I'm doing away with the bulk of the texting. The the logic being texting, if I remember the history right, wasn't called texting. It was SMS, short message.

What happens is, you know, if a guy's running late for dinner, he'll send me a text and say I'm I'm ten minutes late for dinner, I'm sorry. But if I get an article, I you know it's it's not formatted right. I don't need to know about it right away, right? So I think I've mentioned to you, my phone is turned off. And someone said, um, well, how can you go around with your phone turned off? Like, easy. Great. If someone's got an emergency, okay. I'm not the guy to call.

Don't get me wrong, if something bad happens to a member of my family, I want to know. But That 30 minutes between that bad thing happening and me being made aware of it, I'm not gonna be the guy there to solve it. So what what's the point? And I can't tell you how liberating it is to sit down and read a book for 45 minutes and start to learn some stuff and let my mind uh

you know, kind of start to I actually think start to to heal itself a little bit. So we're gonna continue on that approach. And if you do text me, um and you receive a note, uh uh apologizing, asking to be emailed. Please don't take it personally. If you text me and you don't get a note, um, I'm blocking you. And so there's just so there's no misunderstanding.

It's all about me and that's what we're going with. So I saw a thing this week that was like something something like our brains get so much information in let's take a what like one day in 24 hours, your brain gets hit with so much information. Then compared to a hundred years ago, you got like You would get a week's worth of news in an hour on Monday morning.

compared to a hundred years ago, or it would take a week for those things to happen, develop, get written about in the newspaper, get the newspaper to you, and for the for the information to spread. They did d the immediacy and the fire hose of information and what you have to sift through and what matters is voluminous and and only getting more. To to augment or perhaps expound upon what you just said.

One of my technology buddies had said to me, you know, in the old days, if you wanted to communicate somebody, you wrote a letter, you put it an envelope, and you mailed it. And his view was Nowadays you nobody does that. The at most they write an email and they hit send. And I remember talking to my brother years ago.

We were going back and forth about how to deal with the situation. And one of us said, you know, you can always call a guy an asshole tomorrow. Meaning, you know, wait a day before you say something. But now, instead of going through the process of taking out a piece of stationary, thinking a note, handwriting it. And by the way, there's a difference between handwriting and typing. Oh, in terms of recollection, right?

So you handwrite a note, you have to address it, you have to put a stamp on it. So all of a sudden when you start thinking about blah blah blah blah blah You know, maybe let me rethink that. Now it happens. It's fuck you send. And you know, uh that's not that's not good. And and so I'm trying as best as I can. To get back on sides on these things. And um it it uh Thanks to Cheryl. There's another element of this.

It's it's shades of grey, but She was pointing out how people use the phrase, it's interesting, and then goes on to tell you something that they think is interesting. She said, That's not the way to say it. The way to say it is, I found this interesting. Perhaps you might. To say it's interesting all of a sudden presupposes. That you will without giving you the option of deciding for yourself.

So to that end, we were having a conversation with some friends who moved out of the area. And uh We were talking and um Uh everybody seems to assume that since I don't take I don't get a uh uh a W two every year, I have nothing to do. So the question is, well, what do you do with your time? Well You know, lately I you know, I look at the markets, I have friends in the markets, we discuss things, but I've sp been spending more time trying to really dig down deep into the the Middle East.

And one of the two people in the conversation says, Well, don't you think that's a gray area? And I said, No. Couldn't be more black and white. लगते में Confused and then went on to say, well, you know, it was pretty impressive how you know uh 300 missiles were launched. Over Israel, and they were all shot down. And I said, okay, explain to me how that's a gray area. And all of a sudden, the conversation got awkward. And I said, let's just let's just change the subject because

You know, it sort of gets to this next thing I wanted to talk about. Um there's a a book I came to and I don't know how I found this book. Yeah, I find books in peculiar ways. Either Cher recommends them, or I'll be reading about something else. And it'll reference a book and the book will sound interesting to me. And so generally older books you can get for three or four dollars or something like that. And one of these books that sound intriguing to me.

Intriguing to me, maybe not to you, but I would recommend this to our IBOC uh book club. Just behind Oprah Book Club, by the way, in the rankings, it's called The True Believer by Eric Hoffer. And uh Cheryl described it to me as akin to Among the Thugs. Which w is a big fan favorite. I don't agree. I I I think it's in the same genre. But I think it's it's much deeper and really much more applicable to the situation now that's going on in the college campus.

And basically the and by the way, I'm not gonna tell you I get this right, but I'd encourage you to read the book, especially because it's only like 120 pages. And if you read the first 50, you get 98% of it. But he talks about how these mass movements start and generally the people involved who get sucked into the movement. have a a shallowness or a narrowness in their life. They're they're they're lacking direction. Um

They've had difficulty. They've had a different way of viewing the world than mainstream. And they find this. Symbol. Of something that they can get talked into, and all of a sudden they are a proponent of the narrative. And the most important part is you took a person who was lost. And now he's part of a group. Now that group may be benevolent, but more likely than not it's m malevolent, because that's just how these things seem to go throughout history.

I I mention it now because we've all seen what's going on in the college campuses. Um one of the most painful things to me is uh Two of my kids went to Northwestern where there's a huge uh anti-so-and-so uh protest going on. I did read Uh and of course do your own research. A large percentage of the people arrested. weren't students. They were outside agitators. And um I think while I'm not I kind of lost My uh enthusiasm for him, Scott Galloway, but he recently did a kind of a podcast.

That was recommended to me by one of our friends. And I think he does a pretty nice job of explaining, you know. what what's going on with stuff. And I would encourage people to to look at that and see what um what they can make of it. Um I mentioned this to you a number of years back. I was invited. To hear Leon Panetta speak Mm-hmm at the core club in Manhattan. Mm-hmm. Which I foolishly got sucked into joining.

paying up, getting in and now I'm no longer a member because I never use it. But nonetheless What was his title then? What was his title? Just bring me back. I don't he at one point was

Secretary of Defense. He was in Congress. Okay. I don't at that point I think he was sort of minister without portfolio kind of thing. But he talked about a time where, you know, he And I I'm embarrassed to tell you, I don't know whether he was Republican or Democrat, but he talked about how in the old days, You know, they would have discussions with people from the opposite party and they would try and come up with

uh moderate solutions. And with what's happened and and there's plenty of blame to go around, so I won't pick on anybody. But now it's either my way or the highway. And and you know, that's that's not helping with the polarization of the country. Um destroying it's destroying the fabric. It's become so polarizing, so blue versus red, so Yeah, it's it's it's completely impossible for any sort of bipartisan work to happen. Yeah, it's it's it's depressing.

Leon Panetta, head of the CIA. Okay. He ran the CIA. Yeah. Member of the House of Representatives, man, management and budget committee. White House chief of staff for Bill Clinton. Third director of the CIA and then the Secretary of Defense under Obama. Um, and he's still alive? Jiminy Crickets. Thirty yeah, born in thirty eight, he's still going. Yeah. Old school politician. Yeah.

Well, it was brought to my attention uh on a slightly different uh matter. We've taken the heat off of the sixty-nine year old Kathy Wood. um and her uh performance. Um just to put it in perspective, she's sixty-nine. I'm sixty-three. Okay. Now My days are full keeping track of my little family office here. You take on the uh public appearances.

She's done. Now I know that the stop at Tim Hortons was a bit distracting. Um, but you know, there's been a lot of pressure from management to increase the ratings. There's even talk of opening up an Asia office. I don't know who we're gonna get to fill that slot, but um we'll worry about that later. Um We uh we received a nice note from one of the listeners asking about the municipal ETFs. Yes, yes, yes. And I'm not gonna read the question because I think

There was a little bit of a misunderstanding why I don't like them. I think the question involved reinvestment of proceeds uh to earn the yield. That that's not Uh while that may or may not be true, the reason I don't like ETFs in general and municipal ETFs in particular is The municipal bond market is not terribly large.

I wouldn't say information is hard to come by. I mean, you anyone can get the prospectuses, but you have to be willing to read them. And not everyone is given the same set of gifts. uh uh to determine whether an individual municipal bond is good or not. The problem with the ETF structure, and um I guess I'll hurt some feelings when I say this, but I don't think Any of these bond fund ETFs get the sharpest tools in the shed.

uh just if i hurt your feelings admit that you wouldn't rather be trading at a hedge fund and if you decide i'm wrong then my sincerest apologies But I I don't think that's how it works. But the problem for me with the ETF is structural. And it's not that it's not that complicated. Okay. The way the process works is People put money in, and the investor of the fund, the manager of the fund.

Υπότιτλοι AUTHORWAVE Okay. Well, as you've seen through some C C's of the way it works, getting a one a rare glimpse behind the curtain. between me and the the uh experts in the municipal bond market. French coat guys. These uh these things take a while. And the municipal bond guy does he doesn't have the the latitude. You know, so he gets a hundred million in. He's got some number of days to put it to work.

But if in those number of days there's nothing but shit to buy, that's what's going in the book. Yeah, yeah, yeah, yeah. That's number one. Number two. Uh and I'm willing to be off on this, but I think I'm closer than not. There is overt leverage allowed in these things. And covert leveraged a lot of things. the the overt as it says we can borrow A third against the holdings. And the covert is I discovered in one of these other ETF type structures, guys were actually able to go do swap.

and increase their exposure, which is a form of leverage. And as uh my Paligi and I discovered must be twenty years ago. In a huge bull market where you have a bull, uh, a steepening rally. You wanna be all in on these things because they're levered, everyone's coming for them, all the bonds are going up. It's a great thing.

However, when these things turn south and people start Asking for redemptions, what happens is this: the manager looks and he's got 100 million worth of exempt uh redemption. Okay, well he's gonna go sell a hundred million dollars worth of munis and he is priced. Inelastic. That's why when we get into bear markets, that's where opportunities for guys like us have ability to, you know. Gather up very quickly.

study of the underlying security and put together a a bid for a block because these guys don't come out and sell five million or something though they'll sell 25s and 50s which in the treasury market is nothing. But in the Muni market, it's the whole shooting match, right? So um that's why I don't like the the ETF.

product because it's again asymmetrical. You know, I don't think the fees are necessarily absurd, but I think the dynamic is is really Um So I I had mentioned I wanted to go back to to talk to Kathy Wood, uh talk about Kathy Wood a little bit, because when um when I was a risk manager

at Greenwich Capitol. Uh we had a very uh Specific compensation plan. And for better or worse, I got paid last. And in years we made a lot of money. It was spectacular. And in years where it was marginal, it wasn't spectacular because everyone else got paid. Fully, and I may not have. I don't remember the year specific details, but everyone seemed to be pretty happy with it.

With one exception, nobody ever quit. And that's the litmus testament business. Right. Um So Early in the year, as a risk manager, I would be anxious because until traders got up money. They they were ostensibly trading my capital. Mm-hmm. And by mid year. they were up enough money, like all of a sudden the pressure's off. And now we can we can go after a little bit. But there was always the one or two people

Um, and I say people, but I don't think I ever had any women trading for me, but I'll say people cause that's how things roll now. Um they would be getting uh close to their stop or their their limit. And that to me Was a very dangerous situation because under pressure. People do irrational things. And so a guy that all of a sudden was up a bunch of money, now he's even on the year and it's August. He's starting to think, well, you know, if I can make ten million, I'm gonna get paid something.

If I lose 10 million, uh uh you know, but anywhere in between that it schnitz, which means there was much more incentive for them to fuck around in the market. Yep. And um I don't know what the number is. Uh I'm sure it'll be open for debate. But I suspect her trading back and forth of her position has cost billions of dollars. I I imagine talented people like Kevin Muir or Lynn Alden or you know, the blind squirrel. The the blind squirrel, right?

I don't wanna mention simply red'cause that's more marketing than sales, but um Uh uh I suspect when you look at the money she's lost trading the book. This is the point I'm trying to make, that that's panic. And I think anyone who has money with her is a fool. Um not uh not day one. I mean, look, you know, she was

The new thing and she had a good run. She had a good she had a good run for two years. Yeah. Well uh to this day she's had a good run. I I Googled her net worth about five what two hundred million dollars. That's pretty good for being an abject failure. Not bad. Pay me to it. Wrong. I mean, what what grade would you give her? Fund. I mean the fund is up like a hundred percent since inception, so I'm not going to l I have nothing to say. I I have notes on that. I I'm I cry bullshit. Okay.

Since inception, since zero. They started at zero and it's at like Yes. Yes, but it's all gone. But it went up and down. That's yeah, yes. Well, it went up and down. It doesn't account for the income taxes. That's not.

I can't believe that's an internal right you see what I'm getting at, right? Yeah, that's their but that's their answer. That's the answer. That's that was their line. We won't comment they when I called for a comment, that was the comment. It was the phone. Okay, so my comment is this. That's bullshit. I I that is the furthest thing from the truth we've talked about on this podcast. Yeah. So it's it's comical. I know. I know. Yeah.

Well wheels are off that bus, dude. She I like at this point I almost feel bad for her, but but how come she hasn't you can't feel bad for someone that has five hundred or two hundred million dollars. It You know, did they get hit by a bus? Then you can feel bad. I don't care. You know. She's just been she has just been dragged. I mean it is like

It is just bad for her. Um I wrote a note to one of our friends regaling her failure because he was always a big fan and he comes back to me and says, Well, you know, loss. You know, she got distracted. I'm like, no, she's a dope. Yeah, really. Yeah. Yeah.

So and meanwhile, according to the internet, which I've been avoiding, she has twenty-five percent of her money in Bitcoin. Um I I don't know what the funds position is, but going to a million. It's going to a million according to her. That's okay. So I don't know. I don't know. Um I had received an early morning missive from our friend across the pond, Anthony Peters.

uh wishing me to mention hello to you, so consider that ticked off. Uh and he did compliment us on our moving to Treasury bills ahead of the uh The uh not used accurately, but I'll call the denouement of the bond market. Um you're at five percent. Did we did we did we get five percent on Friday? Are we are we up did we hit the magic five yet?

On three month bills? On two, two years. Oh yeah, yeah, yeah, yeah, yeah, yeah, yeah. Five point zero zero zero bid offer at four point nine nine three. I'll get that. Look. What's your what's your three month at? The three month bill? Um, I'm gonna give it to you in bond equivalent yield and um It looks like a five point three nine three. Ah, okay. Yeah the tenure languishing, languishing at 4.6. Uh Uh, yeah. Yeah, you know, again... I'm very content to sit and wait.

Um, I will tell you this, that old schoolers like life coach Leslie Harris and I, uh, we talk about the feel of the market. And I think he and I oh I'll speak for myself, but I think he's in agreement. Just something just doesn't feel right. And um one of the ways you stay alive in this business.

is by getting out of the market when you're you're not comfortable. And um, you know, I uh I was thinking about history the other day and I sent you the biography of this lady named Ina Drew, who um I remember uh and I've I think I've told this story before. But for me, it was very important. to get out of the business before I embarrass myself. Uh

And by that I mean losing a lot of money. I'm sure I said plenty of stupid things and embarrassed myself, but uh, you know, in the end I don't care about that. Um, but I was in Borgolecki. Italy. with ingamba cycling tours with my good friend Joe. And um if you're ever looking to go bike ride riding in Italy, which I highly recommend, this is i it's like you're a pro, you know. Um they got fresh, clean bike every day, snacks, great food. But I'm sitting in Borgalecki where the internet is

Awful. And two people who were part of the adjunct crew. who were the you know people who always show up around your house for dinner time, you know, looking for a free meal. Well, they were quoted photographers, yada yada yada. But th I found them incredibly rude, but they would suck up the internet. Mm-hmm. Uh yeah, once in a while it's like, hey look, we're we're we're paying guests.

Yeah, yeah. Get the fuck off the internet. And that didn't go very well, as you can imagine. But so I I went old school and I I got a copy of the New York Times. And in there There was an article about how this Ina drew uh kind of blew up. Now it was a long and involved story and the details to this day are somewhat sketchy. But that was a name to me that I thought was sort of guilt edge. And sitting in that old medieval town, I realized, you know. At best you're as good as this woman.

Maybe not even as good as this woman. And if they got her, it's just a matter of time till they get you. And that's that's kind of the seminal moment where I decided I when I find a way to get out. I'm getting out and I'm glad I did. You know, I I think clearly uh well not clearly, but I assume had I stuck around. I would have made a lot more money.

Again, I think this is from life coach Leslie Harris. He told me a story, and this is this is spectacular, and and a lot of people are gonna scoff at this, so fuck you. But apparently Uh Kurt Vonnegut went with a friend to a party. Mm-hmm. And the Fred the friend said to Kurt, you know, this party costs more than you made. On your bestseller. And Kurt Vonnegut said, Well, I have something he'll never had. And Vonnegut said, What's that? And the guy said, enough.

And I fully get it when you're your 30s or 40s building a career trying to save an estate. That's not really great comfort to you. Mm-hmm. But I First of all, I know what it's like now when you start to understand what matters. And the bulk of what matters is not not a lot of money. Secondly, and you can look this name up if you like. The fellow who ran the government bond desk at Salmon Brothers. At the heyday, at the at the pinnacle of the government bond market. His name was E. Craig Coch.

And because of where I worked, I mentioned I was fortunate enough to work at a uh prestigious I I met him and uh As was my habit back when I was young, trying to meet people, I would go out to dinner. And there was a really good steak place on the Upper East Side. I'm sure it's closed. It was called the Manhattan Capitol.

And so I rolled in there looking for some broker to buy me dinner because of course I was broke. And he was at the bar and I went up and reintroduced myself because we'd only spoken on the phone. And they were talking about something and And they asked me how it was going. I go, Yeah, I'm working hard, but you know

Like houses are a lot of money and I kind of wondering how I'm gonna get a something built. And and he looked at me, he says, Morris, listen, you're a talented kid, keep at it. It's all gonna come right. And at the moment I'm thinking great, right? But it it it it it's it's true. And um

Uh you know, I'm not gonna say that's gonna happen for everyone. And I in fact I think that my generation, maybe plus or minus 10 years, has fucked things up pretty good so that the next generation doesn't have the same uh uh chance for advancement that we do. But I I I think the nature of things is they swing one way too far and to another.

Did you ever see? I'm sure I recommended it to you this movie Dumb Money. No, you asked me last week, I haven't watched. I can't I I can't I can't watch it with the kids. Unless I can watch it with the kids, it doesn't go on the TV. Okay. I had to watch fish shit night. I can't I I don't have I'm sorry. I'll watch Dumb Money. I'll watch it. Okay, okay. I I I I don't want to disrupt

The the shut up kids. I'm watching this movie. Go to bed. Like doing my homework. I'm gonna watch this for the show. What are you watching, sweetheart? Dumb money more. I've watched that movie three times. And it really resonated with me in so many ways. So instead of boring the audience, With talking about it twice. When you deign to get round

Yeah, yeah. Doing it. Are you waiting for the free copy? Is that oh no, no, no. Because we get all those before the Academy Awards. They like to know what we think. Um I don't know. I I thought that was a pretty good movie. The the the long and the short of it is They're making the point that the individual guy doesn't have a chance. And uh I think that's true. I I would give one example uh that I've seen twice now why I don't like

Other people managing money, why I don't like these ETFs. So uh in two separate occasions, one was an individual, an older gentleman, who's acted as a mentor to me over the And the other is a friend who's turned into a philanthropist. And is involved in helping philanthropies with their finances, both in portfolio review and audit. And since I have experience in both, they sought out my counsel.

In both cases, the individual and the um uh the charitable situation, I got a listing of uh their portfolio, which is g quite a quite a uh I took that quite as quite an honor because that's full open kimono, right? That's what you got and you're showing it to someone based on your belief that they're honest and and so I felt really good about it. But I noticed the same thing in two accounts. So they had wealth brokers. that had suggested if they had money sitting in cash.

Since they lived in uh well the guy lived in New York, the the philanthropy didn't, but it it the result is pretty much the same thing. Money that was cash got swept into municipal bond funds. municipal money market funds. Okay. But what these two people and probably the portfolio manager didn't understand was this. They were buying long term securities, but the coupon reset weekly. So to the untrained eye, you know, every week whatever the three month bill or whatever the

90 day or 30 day bill was, you got to spread to that. And that was tax exempt. And that's how some of these funds get their leverage. They they loan the security. But as I explained to these two individuals, even though the coupon resets, it doesn't mature for like 30 years. So you may not have thirty years of interest rate exposure, but you have thirty years of credit risk. Wow. And these people were just gobsmacked when I told them about it. And uh

That's just one of many examples I can give you. So i if you recall I referred earlier to one of the listeners had asked about the ETFs and why I didn't like them. And his concern about going and buying municipal bonds Um, because I guess you can go to Schwab or whatever and I haven't done this, but I I know a couple people have. They'll have odd lots of, you know, 25,000 or 50,000, whatever it is.

Or or smaller, I don't know. Um but uh the f couple things about municipal bonds are My understanding is they have a very, very low historical default rate. Meaning if you buy ten of them. The chance that they're all going to go bad is pretty low. Now, I'm not suggesting you do that, but I'm just using these examples. And certainly, if you can buy them on a Schwab-type platform. or whatever, they must make access to you the

uh perspectives for the securities. And so um as I've done with every municipal bond I've probably ever bought. I got the prospectus and I read it. And you know, i it's dull reading that that phrase Migo, my eyes glaze over. Okay. Well when you look and you see the uh i it's a bond backed by the Texas Education society. Well, you're going to realize after you look at a lot of these things that that's a very good credit.

If you find a bond that's backed by some, you know, solar powered, you know, thing with people who don't have much experience as probably not such a great play. And there's all shapes and sizes in between. And if you buy them and you hold them to maturity, you don't have the bid offer spread.

Well, you you have the coupon reinvestment risk, but uh everybody does. And until Anthony and I started talking about it a while ago, it didn't really show up on many people's radar. So um So I I urge caution with munis, but I I think they're they're a valuable tool, um, especially as I suspect taxes will be going up and uh

Yeah, I heard the guy on Bloomberg, the guy from Franklin Templeton was on Bloomberg on uh Monday morning, nine AM in the uh nine o'clock slot saying Muni bonds look real attractive right now. Yeah. He he said that and then we went looking and they didn't. It's attracted to sell. I think my quote on that was I'm a better seller. Right. Yeah, exactly. You say I first you said I don't see any. Like I'm not where I'm looking, you know.

Yeah. It's easy, you know, when you don't have skin in the game.

It's easy to say all sorts of things. So Um Can you talk to me about the uh the Japanese yen? Checking is does that say one what's the yen at? Holy crow, one sixty? Is that a problem? Do I have to pay attention to that? Well So to shamelessly plug Kevin Muir, who I think is a terrific kid, um And one of the uh very few newsletters I think is worthwhile, mostly because it's value for money. I don't remember it being very expensive.

He made some allusion to the yen affecting GDP through the fact of you know cash flows back and forth. I gotta be honest with you. I I leave the foreign exchange stuff to others. I I just, you know, as as I get older or as I've gotten old, I've really concluded Not only do I know what I know, more importantly I know what I don't know. Mm-hmm. And um

Uh which i is happening with great uh rapidity. I've had some real estate situations recently where I just you know, you think you think you know something. And it just doesn't turn out that way. But uh I I, you know, I I don't have a lot of value. I mean, I remember when it was like 300. to the dollar, right? Okay. All right. Um I know uh the guy who likes to listen uh to our podcast covertly put out a a note about what percentage of Americans have passports. And uh I think the

The long and the short of it is the dollar's gotten expensive enough it's starting to pay to to travel to places. I think his aspersion was you've got this mass migration, but I mean You know, I was having this discussion with uh Cheryl and as is common wisdom. uh at this time of Passover when we we talk about being slaves, which apparently now they say we weren't and we left Egypt and now they say we didn't leave Egypt. I I I I wasn't there. Um but uh the fact is over history.

you know, we've been the chosen people to get picked on. And uh so we've kind of wondered where would where would we go in the case of some bizarre uh turn of events and and the answer is we have nowhere to go. You know, I I mean we have two daughters in Manhattan. I suppose we could go up to Canada.

Uh I you know, I I don't like the healthcare system there. I I'm getting older, I'll I'll need that more and more. Um As much as I'd like to claim uh I'm a student of agriculture, having taken multiple ag econ classes, I don't want to make my living Run in the you know off grid homestead. Yeah, I don't see that working out for you. No, I I'm I'm not meant for Hard manual labor. In fact, if I can get my act together today.

I'm gonna walk upstairs and spin on the trainer for thirty minutes. I so you're gonna walk it upstairs and spinin', okay? Soon as as we're up against the the commercial break here. Um Up aga up the stairs and spinning. Okay. Yeah. Up the stairs and spinning in Vegas. Okay. I am thrilled that I did not attend the sphere. Okay. I would not have been able to handle that. Okay. Oh.

You know, I I we need to take a minute and discuss this. I'm sorry. If you're not a fish fan, have a nice week. Um later. So I uh downstreamed each of those. Okay. Now I tried to be open-minded. It's not my nature. No. But I I found separately. The lights showed me spectacular. I downloaded the high def files and have

been doing my homework and I think the acoustics on the download were spectacular. Okay. I think the combination of the music and the cavernous nature of the sound in the room, plus the light show being so dramatic. I don't I personally don't have enough bandwidth to take it all in at the same time. Yeah. And so maybe for the youngsters whose brain has been ruined by all this internet stuff, um

It was great. And I I I'm a little disappointed, but I've come to agree with a number of my uh colleagues in the fish sphere that Madison Square Garden remains the supreme place to see fish and that is now beyond reproach. Wow. What what's your take? I I haven't watched the whole show. Um

But it's incredible. It's just like it's to me, it's y what do you it's overstimulating. I don't know. Like I I'm I have enough problems focusing on the four band members and Corotas Light show. Now I've got to watch a moving tapestry and um It's it was an incredible video. Display. It's the closest you can c I've never taken acid, okay? But I assume that that's what taking acid is that visual.

Like having your mind blown. Like everyone that I talked to was like mind blowing, mind blowing, you know, and like the art the the art on the sphere inside a stamp. I haven't been first of all, it's I got screwed. It started show show started 11. All right, so that killed it. Me. I come I'm not watching a three-hour set starting at eleven PM, so I didn't watch it. I watched it the next morning and I would watch like clips of it, and it's hard to put it together.

Watching it in the daytime at home with two kids running around. Like, yeah, I couldn't grasp it. But I but when I the clips that I saw of it, dude, it was extravagant. Like I I felt like I would be sitting in the chair in the theater, like like hugging the chair to to try to process it all and not and it was it was wild. Wild. Yeah. I saw a picture of that room. Okay.

Now keep in mind I'm a claudicant 63-year-old, but I am a modestly accomplished rock climber and mountaineer, thanks to Alpine Endeavors, the official climbing. uh resource of Ibwok. Um, I I don't think I could have made it down the stairs. I know. I know. It was crazy. Yeah. Ah so Well. We'll see. There's the summer on. Dude, you know, they've gotten a lot they got a lot of publicity. Everyone knows about fish now, dude. They made CBS. It's been they've they've really entered the mainstream.

Did you see the Drew Carey? Did you see Drew Carey's review of the Oh, Drew Carey, who's like one of the legendary comedians of all time. A legendary comedian, Drew Carey. Um Price is right guy? Yeah, well he did whose line is it anyway? He's a comic genius.

Okay, Drew Carey. Is the stepping stone for great comedians. Exactly, exactly. Dude, he filled Bob well. Um, dude, he did he you should try to find the clip about him going to fish. I had no idea he was a fish guy. He comes out and does like a two minute He went to the sphere and talked about how it was like I'll I'll I'll I'll post the review, but it was incredible. Um yeah, his his review of the sphere was was historic. Um

And yeah, they've gone mainstream. They CBS, a lot of people picked up on it. A lot of people are like, oh Fish. Oh, there's this band Fish that's playing the sphere. And a lot of people like them. I was like, okay, well, our our audience knows exactly who this band is.

Yeah. Late to the party. Late to the party, folks. Um So, yeah, Dr. Schlock, Dr. Schlock. We need and I know it's the weekend and we didn't do a show for two weeks, but like 48% of Americans have passports. That's what we're going to come up with this week. All right. So how about this? Mortgage rates, all time new high, Docs Lock. Monday morning, I want a seven pro

7.3 mortgage rate assessment and tell me where that's gonna go. I need the Apollo, I need Apollo's take on that. Because this morning, many more private firms in Europe that like, come on, doc. What are we doing? That's what we came up with. Many more private firms in Europe. You're putting your name on that on the Apollo note. Come on. I I'm coming to market. Uh in the real estate business for two things. One is a commercial real estate loan, which we put out a bid packet on.

And uh I told you we're trying to sell an office building. Three sixty Bowery. Yeah. And uh so we have an offer. Um Yeah, well, you know, good product sells itself. Plug it on the show, just like your pepper spray. 360 Bowery. Liam and I will come entertain you. No, I would be delighted to to to sell it. It's uh I mean that's the point. Yeah. Yeah.

Um but anyway, long-winded to get around to saying I'll be able to report back in the next week with boots on the ground, which is a whole lot better than Doc Slock. stealing something from uh Ivy Zellman, who is the greatest real estate analyst in the world, or at least was when I used to look at those things. So um I don't know.

We're gonna ever have some good weather here? No, no, no, no. We're gonna go right to eighty five degrees tomorrow. It's gonna be it's gonna be summer tomorrow. You're you're done with forty five, um, and it's gonna go directly to summer and you're gonna be complaining it's too hot pretty soon. So

Perfect. Welcome home. Welcome to the suck. Okay? All right, bud. Well it's good to see ya. Well likewise. Um What do we got next week? Are we doing the show next week? We got uh not. All right guys. Well uh Yeah, maybe let's do let's go down to Columbia University and interview the uh you know they're working on a two campus solution. But I thought they closed I thought they I thought they sent them home.

I don't imagine you went to Columbia. Imagine you went to Columbia. Imagine you're a poor kid that got into Columbia poor kid. Imagine you got into Columbia, you would you just want to go get your Ivy League. you know, degree and go home and now they blew up your campus protest in Hamas or you know, protest in Israel? Who knew? Dude, college kids, college kids.

Dude. Good luck. Good luck out there. You guys are gonna pr you can you feel safe on your little Columbia campus protest. Go try that shit like out in the real world. Like it's not gonna it There was one of the things um Oh, the guy I was talking about with the podcast. But do you remember the pr NYU professor? Yeah, Scott Galloway. Yeah, yeah, yeah. He said, Imagine if the gays for Palestine dropped off in Gaza. How would that work? Clowns, dude. They're clowns.

Here's a little bit here's a here's a business. I'll take this to Shark Tank, see what they think. So we raise a million bucks. Okay. We get 20 of these gays for Palestine. We buy life insurance all on all of them, and then we give them a free one-way ticket to Gaza. Did the NCC to approve that one? Dude, they've approved other nonsense. Jesus. Oh Gary Gensler wouldn't get around to reading it.

Who? I think that's a good place to end. Why? Thank you. Oh, how do I do this? All right, folks. Inside baseball with old chestnut at Gmail.