Interview With Keith Ross: Masters in Business (Audio)

it's novel. I don't know enough about dark pools because much of them are dark but his description of how they sort of put the auction process UH in an inverted form to obtain the best price and execution for their clients is quite fascinating. He has been in the front lines of high frequency trading for a long time. He used to be the CEO of get Go, sold for about a billion for to night Trading a couple of years ago, one of the biggest h f t

s by volume. If you are at all a student of market structure, if you're interested in institutional execution, dark pools, h f t S algorithms, if you're a critic of h f t s as well, you will find this to be an informative and fascinating conversation. So rather than have me babil incessantly without any further ado. Here is my conversation with Keith Ross. This is Masters in Business with Barry Ridholts on Bloomberg Radio. My special guest this week is Keith Ross. Here's the chairman and CEO of

pd Q Enterprises, a trading and finance firm. Previously he was CEO of get go Uh, one of the largest high frequency trading shops. Keith Ross, Welcome to Bloomberg. Thank you very much, Barry. Pleasure to be here. So so let's keep start out simple and will build in complexity as we go. First off, what is high frequency algorithmic trading and why should people care about it? Well, high frequency trading is just regular trading by computers instead of

humans clicking a mouse. Computers handle everything from identifying the trade to executing it precisely, and it turns out I believe it's a it's a wonderful efficiency for our markets. Trading costs and commissions have come down dramatically over the years. Um. I know there's a lot of concern about the robots taking over the world, but um, the vast majority of high frequency traders are passive liquidity providers. So they are in the market virtually all the time, and we can

talk about that in a little bit. But their goal is to capture spread the way market makers have done for centuries, and provide liquidity. So here's the here's the pushback on liquidity as always well, they like the banku who will lend you the umbrella when it's sonny out. They provide liquidly when it's not needed. But when things get very well, they just shut off the machines and step away from the market. So I want to respond

to that and say it's actually a myth. Because a couple of folks were out loud about backing away from the market. The guys who knew what they were doing did not, And my understanding is they had very good days. So there's actually an incentive for them to stay in the market. With all that volatility and chaos, there's a lot of opportunity um and you know, those that are not as concerned about that would argue. And at other times in market chaos, market makers specialists didn't pick up

the phone. That's the same problem. So you couldn't get to your broker. Maybe you wanted thought you wanted to do something, but you couldn't find anyone to take the other side. Again, I'll take the other side. Seven day was really a one off down. No one could get through to anybody. Let's talk about the flash crash, which is the modern version. So May ten, two thousand and ten, we saw a seven point practically instantaneous drop. What caused that?

A lot of people insisted on blaming five frequency traders for that. Well, they're going to be the scapegoat because like the specialist in the old days, they're the ones that everyone believes are the operators in the market um and have that opportunity to either make the market or not. Both cases. The macro environment was very, very bearish, and so the question becomes, you know, what is the responsibility of the participants? Uh, they took time off and withdrew dramatically.

The beautiful part about the flash crash to me is the following flash dash after a five second pause in the many futures, the whole market was able to recalibrate, reassess, and it was it was a hard event during the day, but it was over in an hour. It's funny because I was flying back from Dallas that day or somewhere in Texas, and I look at my screen when I landed, I'm like, that's got to be a mistake. And it was until I got in the cab and started speaking

to my office that I found out what happened. We were down a thousand points. We closed down three, explained to me. So so that that's the big criticism UM in general. There are other criticism will get to later, but I want to set the table a little bit with what you currently do in some quotes of yours. Let me let me just start asking what is p d Q Enterprises and PDQ Trading actually do. So. P d Q Enterprises is the parent of p d Q

A t S are broker dealer. We are a probably considered a dark pool, even though we believe we operate differently than all the others. We have a unique market structure. We can actually create liquidity on demand for orders, we can consolidate fragmented liquidity. And the beauty of our auction process, which is kind of the key aspect of why we are different, is that we can aggregate people with different

time latency sensitivity. So whether the people who are either very high speed or high speed or normal speed correct all right, and how is PDQ different than your previous employer. Get Go, who is not too long ago sold to Night Trading, and at the time I think they still are one of the biggest h f T shops in the world. I believe they're one of the biggest traders. They did merge with night Um. I went from the liquidity providing side, which we were doing it get Go

when I saw the PDQ opportunity. So the way PDQ works, an order comes to us and we pause it for up to twenty milliseconds. That sounds vaguely familiar, but in that time we do something very constructive for the order. What we do is we ping our liquidity providers with only the symbol and effectively bring back the question that used to be asked at the post of what is the market? So in other words, you don't say I'm

buying a hundred thousands of selling a hundred thousand. You say, here's the symbol, what's your price, what's your best market? We have a dozen providers that are all responding. We can also include institutional passive liquidity providers, and we build a book and once we have the book, we take the instructions from our client to execute the order against the book. So we create competition for every order, and in this pause we're in position to take speed out

of the equation. I'm Barry Ridults. You're listening to Masters in Business on Bloomberg Radio. My special guest today is Keith Ross. He is the CEO of PQ Enterprises, a rather interesting trading shop. Dark Pool goes by a number of different names. Keith, I want to start with a quote of yours and have you comment on it, and it goes something like this, there is nothing wrong with speed in any other industry. It's applauded. It's an efficiency

discuss well. UM. One of my favorite examples is your telephone. Back in the day, we had telephone operators pulling cables and plugging them into the wall to connect you to your call. And today we have cell phones that are many computers and you can do everything on your phone. Incredible technology advancement proficiency. I haven't heard in the early days of of UM cell phones there were connection issues,

but those have gotten so much better. You know, it's all about how many megabytes of upload and download and so forth. I believe the same things happened for trading, so spreads have gotten tighter, commissions have come down dramatically, the cost of execution and has never been lower. Um I think it was. Vanguard in two thousand and ten said our portfolios due to electronic trading have a one percent per annum increase in return. Given the fact that

they're pension problems across our whole country. Anyone that's involved with the retirement programmer has pension money working in the marketplace is a beneficiary of a more efficient market. Jack Brennan, who's now chairman emeritus of Vanguard, when we spoke with him, he said something along those lines. But let me give you the pushback from the other side. Hey, h f T firms are taking out billions of dollars a year

in profit. Trading is essentially a zero sum game. That profit has to be coming from somewhere, and it's coming from grandma's retirement account. Would actually vehemently disagree on almost all. I would hope you would disagree. Tell me why that description is an error, and I sort of have a foot in that camp that that makes some sense to me. Okay, first of all, let's start with the zero sum game problem.

The capital markets are not zero sum the capital markets can create wealth and wealth can be destroyed in them. So I have a good friend, what's a thousand shares of apple for each of his kids? He sold it in two thousand and ten, he made times his money wealth creation. Anyone who's bought an apple product knows apple stock has gone to the moon. So that's not zero sum.

But what happens if he goes to sell it and instead of selling that at a hundred one dollars and fifty cents, he only gets a hundred one dollars and five cents because someone jumped in the middle of his execution. So there could be that could be an issue. I don't think that it is, because in the old days it would have been a twenty five or fifty cent bid, a nickel much bigger. So you're talking commission, not spread.

So in other words, the tradeoff is it used to be higher commissions and wider spreads, and now the spreads are tighter, the commissions are smaller, and if there's an execution charge that finds its way into this net net, it's still better for the UH traders that retail has never had it better. Bill McNabb, current chairman and CEO

Vanguard and also a former guest on Mester's business. He said something very similar, and I was more vehemently questioning when I keep reading and hearing about market structure, and when I get a guy like McNabb saying, hey, you know this has made our trading costs lower, it forced me to at least rethink, well, now I have to take this with a grain of salt because he's got zero incentive to say anything. But what what is true true for Vanguard? So let's move to the other issue

I always hear about, which is the front running. If somebody sniffs out what my order is and rather than executing that order, runs ahead of me, buys it and sells it back to me for whatever, and if we're petting higher cunitively, isn't that a huge drag on total returns for everybody? In the end, it's incredibly small relative to the markets to begin with. Second of all, the person doing that, the person the HFT that takes out the penny up offer, that's some price improvement for that guy,

so he's a happy guy. The seller is paying a penny, is getting a penny more than they might have. I'm just saying that's certainly a possibility that's never talked about, that it's price improvement for a contra party. Certainly, the sniffing ability is only an educated guess, just the way people used to do in the market back in the day. So they can't see the order. That's a that's a myth.

And the models understand supply and demand and they're trying to find that balance between supply and demand all the time. All of a sudden, if there's a big demand, the supply is gonna move their price higher. So, um, it's much ado about nothing in my opinion. And what I'll do is, I'll say this, most of the people that

talk about that don't understand that liquidity provision is a service. Okay, So there to me, there's this mythical idea that when a trade takes place, the buyer and seller have this come bay, let's hold hands moment and exchange our whatever security is at whatever the price is, which is fine at the moment of the trade, but one tick later

one of the parties has been disadvantaged. And when I was on the floor, used to trade with people and you'd confirm and you'd smile, and you'd say thank you, and then one second later you'd say, that's of a gun, he just picked me off, right, because the tick went agains well, But that's after the fact. You know, once the market moves either in your favor against you. Hey, that transaction is done, you can't blame the guy that you bought something you shouldn't or sold something too early.

That it's it's you know, after the transaction is done. It's pre transaction or during the transaction that I think some people are are complaining about. Certainly UM. The counter argument to that was explained extremely well in Uh, a book by Covic. I believe Peter Kovic uh Flashboys Not so Fast. It was the the antidote to Michael Lewis. I'm Barry Ridhults. You're listening to Masters in Business on

Bloomberg Radio. My special guest today is Keith Ross. He is the CEO of PDQ Enterprises, a trading dark pool as well as a broker dealer that Correct and Ats was formally CEO get Go, which is now part of Night Training and is one of the largest h f T s in the world. Let's talk about Michael Lewis's book Flashboys, which I read on vacation and found to be a couple of summers ago and found to be an entertaining romp that raised all sorts of questions about

market structure. But I have heard that you didn't think it was especially accurate. Well, I actually wrote a review of the book the day after it came out, so I got it on mike Kindle and read it electronically overnight. Fascinating story. I'm a Michael Lewis fan. He writes great novels.

But it's a novel. So the problem, the issue that I have is it's the story of Brad Katsiama, which is a fun story, terrific guy, really another guest on the show, absolutely and endlessly entertaining story is as told by Michael Lewis, and it helped me dramatically. There's a YouTube interview between Michael um glad Well. It's not Michael Gladwell. Malcolm Gladwell and Michael was a seventy minute love fest

between the two of them. And what helped me the most was when Michael Lewis explained what I do is I find a person I'm interested in and I write their story, which is exactly what he did in the book. My issue is as a treatise on market structure, he never talked to any of the exchanges, any of the other a t s s, any of the high frequency traders, any of the electronic algorithm people that are in the business. So it's one view from one person, and I don't

think it's a whole picture of the marketplace. So Lewis and Katsuyam were on sixty minutes, came out and said markets are rigged. Yes, the markets are rigged, and it it's a perfect headline. It's the perfect marketing way to get your book sold to hundreds of thousands of people. The issue is if you listen or read the book, what they really said was it's possible that the execution

of an order in the marketplace is rigged. Later on, when Michael Lewis was asked you invest in the stock market, he says, oh, yeah, I've on dtfs for years and years. My family has always been an investor. So when the market is rigged, that headline screams it's a three card Monty game, there's no way you can win. Absolutely untrue. By your apple twenty years ago, you're a happy guy today. So that nuance is totally lost. In a sixty minutes piece, the world was in a tizzy. It appeared that the

high frequency guys were making a lot of money. They had a two, but they're not making that much money anymore. Volumes have just completely dried up. And volumes have dried up. Let me share a quick story around efficiency that I like to tell. If you buy or sell a house, five percent commission. When you go to Starbucks and buy a latte with your credit card, you pay Master Carter visa three percent commission on a three dollar latte, So

that's nine cents. If you trade three shares of Starbucks and you're an electronic market maker, they make about three cents per hundred, so they're gonna make the same ninth sense that you're gladly play Visa for your latte. And yet they're going to trade dollars worth of stock and take risk while they're doing the trade. Their margins are so infinitesimally small. There's no other capital transaction anywhere that

comes close to that type of efficiency. So my colleague Josh Brown likes to say the people complain that high frequency trading uh and the markets are rigged. His responses the markets have always been rigged. There's always been a specialist. There's always been somebody taking the pound of flash. At least today we know who would is. Again, I'll go back to my comment earlier that liquidity provision is a service.

If you want to be able to trade and transfer risk whenever you want, someone needs to stand there and take the other side. The way money has always been made in the markets is to capture spread between the bid and the ask. That's done very quickly now and very scientifically. So it's not that the game has changed, just the players have changed. So in the last thirty seconds or so that we have what do you think of I e X that's the shop that Bradcotts Yam

opened up. What do you think of their proposal to actually becommon exchange as an A T S. I applaud them and appreciate their innovation as an exchange, their protected quote hidden behind the delay could be very problematic. And my concern is other exchanges imitate I e X if they start to get market share, and we would have the situation of quotes that are not valid because they're being canceled, but no one knows because the cancel is going through the speed bump. This is Masters in Business

on Bloomberg Radio. I'm Barry Ridhalts. My special guest today is Keith Ross. He is the CEO of PDQ Enterprises on a T S dark Pool, And there are all sorts of other technical terms we can discuss. So earlier we were talking about how market structure has changed. One of the claims about issues with high frequency trading is that it has introduced new systemic risk into the markets. True or false, it's got to be true. Systemic risk

is very hard to understand and know. UM. But there's always been systemic risk, So it's not as though it didn't exist before. Electronic trades just different today and it's just a different fashion. UM. I think the regulators actually actually after the flash crash with UH some of the things they put in place limit up, limit down, UM attempting to get the venues to synchronize with each other. UM are certainly going to go help us move forward

to create confidence in the market structure. UM, but systemic risk. Interestingly, to me, during the crash, none of the listed and cleared futures options or stock exchanges had any issues. It was only the over the counter trades where there wasn't a central counterparty. The central counterparty is the to me, the lynchpin of creating eliminating systemic risk, and Dodd Frank all seven hundred whatever pages of it should be one page.

Everyone has to centrally clear their trades, no matter what they are, through some exchange, through an exchange, or a third party, because then the third party manages the risk and and they know where all the risk is from all the participants. That's that's interesting. So let's talk a little bit about that structure in some um greater detail. At one point in our history, the exchanges, the New York Stock Exchanged, other exchanges were really almost public utilities.

They were not for profits. We eventually run into trouble with compensation and other issues under Dick Rasso. There was that whole digression. What should the proper role of the stock exchange be in modern trading? Well, let's it should be risk transfer among consenting parties. And so besides the risk transfer process, which is the matching of the trade, you also want to know that it's going to clear properly. If you're a buyer, you're going to get your securities.

If you're a seller, you're gonna get your money. So it's the first step in a chain of several events that worked lawlessly through the financial crisis. For the list that exchanges, the the issue was in the over the counter credit swaps and some of those issues where everyone became suspicious of their counterparties required more margin, and companies that had tens of billions of dollars two weeks later,

we're needing to be rescued. So when I was coming up, we had the AMMAX, the Nasdack, the New York Stock exchanged. Today there's twelve exchanges, almost fifty dark pools, maybe even more. I have you lose track of forty is probably a better Okay, so forty plus dark pools. What about this fragmentation? What does this mean for getting orders executed? I've spoken to traders who have complained they go out to buy

five or ten thousand shares. I don't need a hundred or five hundred, and they get forty seven here and a hundred twenty two there, and it takes a dozens of orders to get what used to be a simple transaction filled. What is this fragmentation and mean for for execution and structure? So too. Two parts to that answer. UM, One is it actually is redundancy if you look at it a different way. So a little while ago, this

New York socket exchange was down for four hours. No one even new right, So that's actually a good thing. So you know, we get a start for that. Um the difficulty with the fragmentation. So the generic answer would be innovation. Innovation has come through a t S S has forced the stock exchanges to compete with each other again, has driven costs down, taking a lot of people out of the equation. There used to be many more bodies on the floor and on trading. Really it's it's going traumatically.

It used to be like eight rooms. I think they're down to one room. It's a it's a that's right, it's a it's a television front. But here's how you solve that problem. If you have a structural pause, that can do good things for the order at PDQ, we can consolidate orders from other venues. So let's talk about that. So the complaint that some people have raised about I X CATSI Yamas Shop is that they introduced the speed bump.

It's eight miles of coiled fiber. Optiction is right right, So that that introduces I'm doing the soft top of my head about a three and fifty micro second delay, so that nobody is disadvantaged by faster speed. It's still crazy fast, but that prevents what we talked about earlier, the front running, the picking off orders. Your twenty micro second, it's actually millisecond. Okay, speed guys, right, So that's a

that's a longer delay. In other words, all right, so this is a twenty miller as opposed to three micro second delay that similarly forces is everybody uh with the speed advantage, or you're going to them on the lion making them compete for the order. We reverse the flow, so I e X. All they do is it's a speed bump for people to get in and out. It's it's like a turnstile at a door, right, everyone has to stop and go through the turnstyle. They've made an

effective business out of convincing people that that's helpful. I think it's more helpful if you take that pause, share the symbol only. This is an incredibly important part of the equation, not the volume, not the product, the side, the size, or the price, and ask that question, where is the market in apple the high frequency folks, the providers, the institution, anyone who wants to provide liquidity then has

to respond with a committed order. That committed orders aggregated into a book, and then that book is used to get to pick the best price and size exactly. That sounds like a really interesting innovation to deal with questions of of structure and fragmentation. You're actually taking advantage of

the fragmentation. Well, we're consolidating it in this process. And interesting to me, I mean, I think it's somewhat ironic that this process replicates the way the floor used to work for the way an active pit would work in Chicago. Let's say, so let's talk a bit about order flow. What do you think about the payment for order flow? That's been a somewhat controversial issue. I have no issue

with it. And let me explain why. Uh, just over a year ago conference in New York, five different by side, excuse me, five different retail brokers on the day as talking about their experience with their wholesalers to say it was a love fest as an understatement, every single person this is schwab and a merritory aid, and um, I'm trying to remember some of the other scott trade. Maybe it wasn't interactive brokers, but who's who of retail said,

here's what our wholesalers do. They help us build our infrastructure. They the metrics that we track with them in terms of present price improvement, quality inside the spread, uh, quickness of response, number of trades that they don't feel to get sent out to the marketplace, that met all those metrics have gotten better over time. This was in I believe January. They're thrilled. Payment for order flow is just a different way of giving that spread capture to the dealer.

Commissions have collapsed for retail folks. All you can eat on a trade, I mean it's virtually nothing. Go to a website called robin Hood and trade for free actually is zero cost. I assume it's built in somewhere in a moll. You know. Everybody will capture the spread on those trades, which is fine. But to the consumer it looks like a free trade, which is fine. So so

let's talk. I would be remiss if we did not discuss spoofing, which the concept of cranking out tens of thousands of what some people call phantom orts that are never intended to be executed and then immediately canceling those which appears to be intended to manipulate markets to some degree. Why in a normal market would we ever need something like spoofing? Why would you ever bluff in a poker hand? Well, you bluff once, but you don't bluff ten thousand times

in a micro second. Seems like a lot of bluffing going on. Yes, I'm being somewhat facetious. It's one person's bluff, maybe another person's brilliant move um or defensive move. But interesting to me that when the Commission decided to focus on these issues, and when you say commission you mean the SEC. The SEC and Finrie both creating rules around these types of events. They have yet to actually defined spoofing or layering, But what they did define over a

year ago was disruptive trading. And I think that's much easier to focus on because it doesn't necessarily imply intent. So spoofing implies intent. I wasn't really meaning to trade, But if you've put those orders in, and there's so many risk parameters in place for you to put those orders in, meaning you've got to have enough capital in case you get killed that you can do the trade. It's a matter of debate whether they're spoofing or not.

What's the actual intent. It's really really hard to define and certainly going to be very hard to prosecute someone. So if we people who are listening are intrigued as I am by h F T and algorithmic trading, if they wanted to find out more about p d Q, where's the best place for them to learn? P d Q A t S dot com p d Q A t s dot com. We have been speaking with Keith Ross.

He is the chairman and CEO of p d Q Enterprises. UH. If you would like to learn more about this, you can check out the website p d Q A t S dot com. Be sure and check out my daily column on Bloomberg View dot com or follow me on Twitter at Riolts. I'm Barry Ridholts. You've been listening to Masters in Business on Bloomberg Radio. All right, welcome back to the podcast. Keith Keith I want to call you Donald keith Um. Thank you so much for doing this.

This is really fascinating stuff. I know we are deep in the wonky weeds for the average listener, but trust me when I tell you there is an intense audience for this conversation. And I know I'm going to get all sorts of email, one half of which is gonna be saying, hey, the anti h f T guys, are you know vociferous? It was good you had a guy

like he threw us on. And then the other emails are going to be and by the way, the first group will say, but you were a little rough on him, And then the other group are gonna say, hey, man, you let Keith r Us just get away with murder. You should have asked him. So let me go over some of the questions that they're gonna they're gonna ask us about. I think at this point in time, most

people know what co location means. The servers at the various exchanges that people fight to be the closest one to the end of the run so that there's that little speed advantage of ten ft at the speed of light. How important are things like co location to h f T firms? Actually there, they probably created the whole idea

in terms of doing it electronically. Co location and position in the pit years ago was also incredibly important, and people would get up at four am to make sure they had their spot next to their favorite broker so they could deal with him and trade his flow. So it's not new, it's just got a different shape. And it fascinates me that now that orders are done and completed in milliseconds and micro seconds, essentially, the world seems

to be displaced by it. Where it used to take minutes, if not hours, to get a trade done, and it didn't seem to be an issue. So we went from hand gestures to software right to software. Operating at high speeds, many of the venues measure their cables so that everyone has the virtual same distance to the matching engine. So the CME does that, I know for sure, and it's an f it's in an effort to try to level

the playing field. If you're in the co location, well, if you're not, you're a disadvantage, which is why they could charge big rents for those wrecks. And so for the high speed guys, the reason they need to co locate is they have to compete with each other. They're sho works fighting over anything that might be there, and they're very worried that if they're too slow, they're going to be the victim. This is a giant arms race is what's what's actually happen. So let's let's go through

some of these other favorite terms. What is packet sniffing. It's an attempt to decipher what's in a message in a network, meaning in this context, to figure out what what might actually be the size and price of an order in order to get ahead of that line. It's not it's not clear to me that you can actually see what the order is, but you can see that

maybe an order is coming. So I was always in the impression that since since every once the order goes into the exchange and the exchange exchange pings out to see what the best prices, once that happens, the h f t s have full access to it, and if they could beat everybody else to go by the order and fill that at a lower rice, they're allowed to do that. They're not the broker, so they don't have front running rules that apply to them. They're just a

liquidity provider. And they're faster and getting if this is available for seven cents, and I'm going to turn around and flip it for eight cents. If they're faster than other guys doing that, they get to pocket that penny once it gets posted at the matching engine or at the venue. The matching engine would be actually executing a match once it's posted and everyone can see it. I

think you know it's fair gets declared in fair game. Absolutely. Um. I was aware that in the future's world, some folks, we're putting one lots into the marketplace, meaning one futures contract, so the equivalent of one share of stock of order or it's like twenty or thirty dollars principle amount for a one lot, because the futures are leveraged. And now then going on the other side with the order, well, know what they did was they'd leave it in the

marketplace until they got to fill. And at the time, the mechanics behind reporting the fill was quicker than changing the quote, so the phil would tell them that the quote was changing, so in other words, they would get filled before the quote would even show up and micro seconds nobody actually knows this report. I believe that's been sequenced so that it's everyone gets the information at the same time. But there was an opportunity. Oh, I see

exactly what you're saying. So if you're filled before the quote moves, you know, the quote's gonna move right, so you have an information, so you have a chance to just because you were executed, and that's considered public, so everyone should have access to that. This doesn't get complicated enough of it. So so we talked about spoofing. What about quote stuffing, which is a term that I just love.

What is quote stuffing? Well, it's an attempt to overwhelm the quote system so that people can't really understand where the market is. And is that considered manipulation or is there I would expect the SEC to use their disruptive Trading card and say you were trying to disrupt trading. This doesn't make sense. You know, you're fined or whatever. The results do we still see the sort of quote stuffing that was pretty common. I'm away from being on the front line the way I used to be at

get go Um. Everyone is so fast and so on top of their game, so to speak. I would think it would be extraordinarily difficult now. But I can't say

that it doesn't happen. I don't know for sure. You would think if someone is jamming a lot of quotes in order to cause confusion in the marketplace, that does make sense for the sec to want to stop that absolutely, and most venues, including PDQ, have limits on the number of orders on the same side and a given security that anyone client can send, so that if we see more than a couple of orders in one second, same side, same price, same um customers sending the order, that's problematic.

It pops up on our compliance and we can check them out and make sure that they're not going Now is that going to be an automated interrupt or is that get kicked out with an email to somebody in a week later or someone So we're not the broker dealer of record, so it's up to us to inform the broker dealer and then it's up to him to decide what to do with it. So this won't be stopped at the point of contact. This is Hey, this person is abusing the system, and eventually they get kicked out.

We have the capability to turn them off. I mean we've are compliance systems are in sync enough that we could if we needed to. UM we'd prefer to have the broker deal it do it because they know exactly where the client is and what the clients expectation, and they have the compliance over sure to do that. That that makes some sense. Um, walking away? What is walking away? Well, this is what we talked about earlier in terms of turning off your system. UM. I'd like to share an

urban legend. There was a person writing a book interviewed a prominent high frequency trader who said, off the record, I recall this, I promise, off the record, we turned our machines off during the flash crash. During the flash crash, Um the reporter decided to put it on the record.

The world assumed that everyone turned off their machines and walked away, and we're not making a market, when in fact, I know a lot of good firms took advantage, literally took advantage of the opportunity and made a lot of money. Anytimes volatility, if you so. I began my career as a trader, and one of the things I used to love to do. This is a hundred years ago and

I'm sucking manually. This is brightly algorithms. I would leave a bid out a quarter or half a point under the market, and every now and then you got something, you get filled and it was just quick, you know, with one handed flick you turn around and sell it at the bid, Hey I sold a thousand shares a quarter point higher, it was free money. Now eventually that sort of nonsense stopped in the lad Or nineties, but

I was astonished occasionally, Hey here's two for free. Um I had a friend who said, why don't we write a program to do that automatically? So they tried, and it made some money for about a month, and then

that stuff just kind of dried up. So I look at that as an early h f T sort of thing and an arms race where the other side eventually nobody likes getting picked off for a quarter point constantly at a certain certain point they basically say you can't do this, or they just figure out, let's look at all the quotes and make sure that we're in the market and not now, if it's a buck outside of the market, that trade gets broken, but a quarter point

in a fast moving market, but nobody's gonna care about that, so um or walk away from that. So so, given all these things, given everything that we have learns um is it's let me ask this in an open ended question. There was a lot of storm un drang and a lot of upset about h f T s a few years ago Certainly, as closer we get to the flash crash six years ago, the more people are upset. Is it that we've forgotten about the flash crash and these

fears have faded? Has the market structure and the oversight improved. Has everybody kind of figured out, Hey, this technology thing is going to be here for a while. What's changed in the past five or six years that have kind of made the general outrage over h f T sort of settled down? I don't know if I'm asking that question. I think I get it. I mean it has dampened down quite a bit. Um. I think several factors. One is the stock markets much higher than it was five

years ago. It's recovered dramatically, so so people look at their four oh one K and they don't have to jump out the window anymore. So that just in general, that helps a lot for people to feel better about the market. Um, the markets have put in some more rules and regulations, so we expected to behave better and I think it has. Um people are becoming more comfortable. So five, six, seven, eight years ago, people wouldn't even

go online to do banking because they were anxious about security. Sure, people afraid to buy from Amazon. If you go back far enough, I can't I can't buy some put a credit card over the internet. Now, if you don't do it, you know you're you're not part of the world in which we live exactly. So all those things have changed. Um, the proper structure gotten better. Do you think the market structure is less precarious, more stable, less likely to be

subject to another flash crash like event. I think it's more resilient. That's a good word. The difficulty with those kinds of things is they're not going to be where you expect them. They're gonna they're gonna be in its own fash crash type of thing. That's really the wrong phrase for it. But you had some really surprising movement

in bonds, not where people expected to see that. What I've always thought is that there'll be people like you used to trade in the nineties that will put some bids in below the market because they do want to own it and at a better price, they'll be happy even in the bond market. And so one of the issues at the moment is we have what some of

the academics called knife point liquidity. So everyone's around the market a tick or two away because they understand that's where the market is now, and that's where the supply and demand are. But if the market moves handle for a point, if it doesn't kind of gradually, that's okay because they can all adjust along the way. But if it happens quickly, they assume that there's some news out that they don't understand or the model doesn't understand, so

they back away, and that creates the vacuum. It is going to make sense to some people to say, you know what, I'm gonna bid down a half a dollar, down a dollar, down a dollar and a half, and down two dollars, the way the book used to be much more like, and stay out there until you know they get what they need. If I get filled on buying at a discount, what or if I sell it on the way up, I'm selling it at a premium. And there's all kinds of things you can do with that. So, yes,

we do have I still believe the structure. The structural issue is we have to chase the liquidity rather than making it come to the order. And that's where PDQ is dramatically different. And it's hard for me to emphasize the paradigm shift. So I've got the order. I'm holding it here. You can't see it on the radio, but I've got into my hand. I want of trade ten thousand Apple. I'll tell you the size. What's your market? You still don't know whether I'm a buyer or seller.

Give me your market. All the participants commit to the auction, so they can't run away, they can't front run, they can't spoof because they don't know what it is. They can't penny. They're competing with each other, so their price may be a penny better than somebody else. They want to give their best price, but they're giving you best bid and best gass simultaneously, and it's up to you to to to run the auction and find the best

price for our clients. So that is a big shift from what we typically see when someone goes to execute an order out in the normal. Back back when I was on a level three and you'd see all the market makers on each side, you saw a few cents up. You had no idea what the real size was, and if you were trading any sort of size, you would make a rough estimate. Hey, this is gonna cost me ten cents to here's two thousand, there's three thousand, there's

four thousand, there's five thousand. That's how I'll get ten or fifteen thousd and filled within a dime or so of the actual current bit aness price. You guys have turned that on its head. So we make that flow come to you. If you're a natural buyer or seller, the question is where is the market. We gather the responses and it's committed flow to you, and they have to commit first, so it's not like they get a chance to peak and then run around. So let me

phrase it as slightly different fascinating. That's a fascinating business model. Is there anybody who's a competitor to you for that? Not? At the moment um? How much of that is patented trademark? We have some IP protection and some patent protection some of the venues. So Chicago Stock Exchange has introduced the snap auction New York Stock Exchanges talking about a midday

auction for lightly traded stocks. The London Stock Exchange is also now I believe, executing a midday auction, meaning why mid day because they just had to pick a time. Are doing it once a day. It's not an on demand or continuously. You're on demands. Effectively, you send us in order, we will create the auction for you whenever

you want. So that stocks does that include futures. We're just stocks at this point, so there's technical reasons why, but yes, it's almost on the future that you're going to do bonds, futures or any other trade. So structurally, the other markets UM have some issues that they don't have the A T S functionality meaning to A T S for people who automated trading system created by the Commission SEC in I believe to promote innovative and alternative

ways of trading. So we act like a stock exchange in terms of matching buyers and sellers, but we're only a broker dealer and we're technically regulated by FINRA. The exchanges are directly related and regulated to the SEC. And this was reg I'm doing this from Emory reg NMS.

This was reg A t US. It was called um Reagan MS was two thousand and five, and that was a different market structure plan which actually was incredibly effective achieving the goals that had set out to achieve, which were well to make the exchanges and orders compete with each other. UH and automate the marketplace. I was going to say, some people have said Reagan MS is what we're high frequency trading really exploded out of the box.

It turns out it was very beneficial for high frequency trading. Little inside story. Back in the get Go days, I was there during that period, we were actually concerned that that Reagan MS was going to hurt our business because you were going to get more competition. There would be more competition, and the price protection and other issues would make it more difficult for us to function. We had no idea. It was going to be a softball all

down the middle of the right and everybody feasted. So it looks like because that was really the wild West for a while, and lots and lots. Look at Citadel, which started how does the hedge funds is now one of the larger, if not largest, liquidity providers. So how does a shop that starts out as Ken Griffith Citadel in Chicago starts out as essentially a hedge funds? How does an enterprise like that suddenly become this giant h

f T algorithmic trading shop. So one of the changes that we made at get Go was to understand that we were really a technology shop, not that happened to be in the trading space, So we shifted our emphasis dramatically to our technology people. Fortunately, all the traders that were running the models understood how important the technology was.

And what happened was that the brilliance of the technology folk was was able to make UM the systems better and faster, and every time you got better and faster, you made more money. So where do you this is? I just was up at M I T for the Sloan Annual Conference last month. The whole audience were I would say two thirds were students, and I very It was one of the more intense rooms I've been in. And my sense is that many of these kids are destined for careers at shops like yours. Where do you

go out and find the talent, the staff? Where do you guys recruit? How do you find the wizards to do? What what your stuff? Your technology actually does? So we started ten years ago and the team that we started with is principally still with us UM. So we found folks are Cto has done the recruiting. Were very small shop. We just grew from twenty to twenty eight people in the last year. So our technology staff is about a dozen. We're not actively recruiting because we're not in the what

I might term is suicidal high speed race. We're going to let other people do that. We have really good technology and we want it to be incredibly robust, but the last micro second isn't critical for our process. That's fascinating to me because you spent so you began your career on the floor, way back, run, eventually find your way into h f T and you're there for the fat part of that cycle. So you were really a

witness firsthands. What made you stop and say, you know, there might be more money if we step back and try and approach us from a different perspective. How did you get to that? So the founder of PDQ is a fellow named Christopher Keith. He's a brilliant, brilliant mind. Five years young. Now. He's the former CTO of the New York Stock Exchange. Okay, so he has some understanding of how the exchange works. Perhaps he has a bit of a clue about how markets function um understatement of

the year, understatement of the year. Even in two thousand and one he applied for a patent for the p d Q idea. Really he understood that at some point the race for speed cycle would end, that there would be, you know, a physical limit of how fast you could go speed alight, speed alight. And even when I was at get Go and we were doing better and better and going faster and faster, in the back of my mind, I was thinking, you know, there's gonna be some point

where speed doesn't win. It turns out that he we had a chance to meet him while I was at get Go and my partners made a small investment in PDQ. Well it's it's doing fine, UM, but we figured at the time we were thinking that it might be a source for us to get flow, for us to interact with UM. We ended up going in different directions once

I went to PDQ. But the market structure idea has actually been around for quite a while, and so some of the folks that think they've discovered new things recently, it's it's actually they're just discovering things. Everything sold is new again. You know, when you describe the time at get co where there's a sense that, hey, this has

to eventually hit a limit. I just had that vision of Robert de Val and apocalypse now where he turns to Martin Sheen and says, as if it's a bad thing, you know, son, someday this war is gonna end, and then walks off, and Sheen looks at him like he

has two heads. But really that's a that's a fascinating moment in the midst of the high frequency trading expansion, where well, this has to bump up against the natural limit and then what comes next that that's really an insightful thought to have when everybody's making a lot of money and hey, we figured out a new way of trading, and well, let's let's see what this ghost. That's the way Chris Keith thinks a step of two ahead of everybody, miles ahead of the rest of us. And it was

fun to get to understand, you know, his ideas. And of course the process of collecting the market aggregating the book, forcing the providers to go first was a novel idea. Um, but what happens I believe is that it benefits all participants and what it does it certainly sounds like it would.

So I got excited about it as a provider because I knew there was time to refresh the algorithm in give my best market under circumstances that were defined over a very short period of time, meaning milliseconds or sconds so than microseconds, but still faster than the human eye, right exactly. And I also knew that there would be opportunities where the model could provide substantial liquidity given the

circumstances at a particular moment. So if you're doing a pair's trade, if you're doing a trade of a stock or an et F against futures, and you have a chance to assess the market, run your model. Instead of doing five chairs, you might be able to do five at a given moment under prescribed circumstances. It's very interesting to understand how specific that is and how important it is to be able to respond with size. There may be times when you can't make any market where the

futures markets. It's just that it's there, right Or you think you're going to trade Microsoft against Oracle, and Microsoft arneys came out and the market's going a little cucko, Well we're gonna wait. But as you find the opportunity where you can make a better market, and if you have multiple participants who are all going to have a different flavor of their better market, and you can aggregate

them together. All of a sudden, you're gonna you're gonna start to find a market that will feel like it used to feel. So so you're a dark pool, which means you're trading pretty continuously. Do you guys trade before market hours and after twenty four hours? Four? How do you? How do you do that timeline? Our current trading clock is four. We also have a routing business for our clients, so if we don't fill them during the auction, we're happy to send it either through the darker to a

destination that they're interested in. We will route before and after the close, so we can take an order any time, but we don't actually execute it before and after the close at this point, and you mentioned the New York and London are going to do these by appointment on trades. We used to make fun of the illoquid stocks. It's it's by appointment only. So from nine thirty to four,

how actively executing are you? What sort of share counting are you guys doing massive shares or is it a handful of big clients and you're doing a hundred thousand year and half. So we have about a hundred broker dealers, subscribers, so they're sending us flow during the day substantial, which

is pretty substantial. Yeah, I know, about anywhere from sixty to seventy five are active on a given day are routing and executing business combines for a little bit close to one and a half percent of the market, So we're doing like a hundred fifty million shares a day that's combined. The routing actually is the substantial part of the business. That's the lion share, although it may not be the lion share profitability wise, but it's gonna be

the lion share volume wise. Yes, So we're thrilled. I mean, when we got to one percent about a year ago, we thought that was a great milestone, um, but that's still relatively small for some of the dark pools out there are are huge, right, there's five and ten percent. The biggest ones is that is that Well, that might be a little high, maybe closer three to six. But a couple of other facets about our auction process after a trade has made our t c A reports show

that we have very little impact on the market. So you're not moving the price, so we're not moving right. Institutions love that I should say, they want to be able to get in or out without causing a disruption because you never know what they have behind that they might have another Hey, I got ten ten million more to go, try not to wreck the bid. So familiar of course days right, of course. UM. One thing that I'm very proud of is when our liquidity providers respond.

Their average size is shares way above the average trade size and in terms of larger trades. For the month of February, we received about thirty five thousand trades of over five thousand shares from our initiators from the subscribers looking for liquidity, and our providers responded, this is our daily average with over a hundred and thirty five thousand blocks of over five thousand shares. A lot of it may not have traded, but it was there and it

was available. Um. Sometimes the providers are on the same side of the market as the order. Sometimes they're appending your two away from the market, so they may not they may not cross, they may not match, UM, but that opportunity is there, and I think that's the important thing. So how do you guys get paid? Is it on a preshare basis? What do you guys judge for share is that is that public info? Um, I'd love to

make it public information. And the problem is it's custom So everybody, depending on what they're doing, the size frequency, you're gonna work out some arrangement on some sort of grid for them. Even more than that. So once we have a conversation with our client, they're not latency sensitive, they've agreed after PDQ we can route through the dark and end up going through bats. Let's say we can actually give them a sliding scale. Because we're in a t S we don't have to have one size fits

all pricing, which in exchange does. So if you if we feel you at p d Q, we can give you a free fill. If we go into the dark, we may have to charge you eight mills. It's costing relatively inexpensive. Relatively inexpensive, but it might be costing US four or five. We get a little mark up for the house because we've got to keep the lights on as we go through the dark. The price gradually goes up.

Eventually we send you to the lip market. Are active traders save about of the take fee from the lip market by coming to PDQ, And and that's why people like Vanguard and Dimensional are not really that critical of HFT because to them there's a cost saving. Absolutely that that makes a lot of sense. I could stay in the weeds all day. I find this stuff fascinating, But I know I only have you for another fifteen minutes, so let me get to some of my favorite questions

and uh, well, we'll see where this goes. So you mentioned in the early days you started, you were on the floor. Was it New York or Chicago? I started on the American Stock Exchange and then went to the CBO E flour And so what did you do before financial services? I jumped into it right out of college. When I was in college, I actually had a house painting business that I ran with ten other guys that were working for me. So that was less late and seem more LATEX and that sort of stuff. I got

it good. Um, So, who are some of your early mentors in this industry? Um Ken langn oh? Really, I was actually depot Ends It was both medical center and in the med Associates is the name of his broke in the med e D. I was partners with him um in the late seventies and early eighties as a floor trader, and he said, I have this idea for a home. I was never to offer the opportunity. It turns out, I don't know whether I what I would

have done, but I could dream. You want to sell plywood and giant warehouses, Ken, listen, stick to trade by the way, you become a multi billionaire, right that? It ends up? It's a It's a great American. We should have him on the air one of these days. I'd love to. He's still in touch with him. No, and he's a no nonsense, a little gruff. But was he always that way? Is that that's his persona, that's his persona. He never he calls a spade a spade, right that?

That's pretty pretty funny? Any other mentors worth? A trader named John Mulhern was legendary back in the day, all right, I've heard the name. He was at Merrill Lynch Bar Wagner actually partners with is the England Or at one point. Um a man who just had a beautiful different perspective on the world. Um was a extraordinary natural trader, if there is such a thing. Back in the day when um, some people just have a feel for what's going on

and what's about to happen? Um. I also did not know him personally, but followed the career Bob Ruben risk arb Trage from Goldman Saxon of course Secretary Treasury and other things like that. So um, I enjoyed reading about people in the business. And um, so let's talk about books. What are some of your favorite books? Fiction? Non fiction, finance nine finance. So I always get fascinating answers to this question. The one that I decided I want to

tout is called the Rational Optimist. Oh, of course, Matt Ridley, and for folks that are struggling with the world in which we live and think things are not good. Um. His argument is, we've never there's never been a better time to be alive. You could look at it many metries, lifespan, healthcare, amount of wars, amount of murders, amount of crime. Even though these things are on the headlines and we all have more access to it. By the numbers, it's actually

much better than it was even fifty or thirty years ago. Right, So um, Warren Buffett says, the normal average person today has a much better life than Rockefeller did a hundred years ago. I mean, I would agree with that completely relative to someone a hundred years ago. Sure, but at the time Rockefeller was he King of the health. It's always it's always uh hey, listen, Louis the sixteenth didn't have into a plumbing but four hundred servants to make

his dinner. Right, That's that's exactly right. Um, so the Rational Optimist, any other books you you feel like mentioning trying to think of others that. I mean, some of the market structure ideas and so forth. Those types of things tend to wander up and down. I mean, some of them are great, some of them are terrible. Um, so you kind of have to be a little selective there. I'm involved. My wife and I have created a little

foundation called the Raven Foundation. It's an education foundation that has a whole um anthropology behind it, if you will. Some of my reading is focused in that direction. Um. I remember reading the biography of Peter the Great, really fascinating. UM. Biography comes up all the time when the show people constantly. I can't tell you begin to tell you how many people have mentioned and um, the right Brothers body that

just came in, right, I haven't got that. I know a lot of people have have that on the kindle waiting waiting to go. Um. So we've discussed all the different things that's changed over the past thirty years. Rather than reiterate that, what do you see shifting over the next decade in terms of anything involving markets and execution? What is the next wave of change gonna Well, I believe PDQ was part of that in terms of our

process of aggregating the market and creating an auction right. Um, So, innovative trading structures are going to shift the way people get Excertainly that's our hope a PQ. Um. It certainly makes you should be you should be the CEO of the company. Becush, you are hounding the table on it. But not just your firm, I mean, but you guys have to anticipate where the market's going to go and how execution is going to change. What else do you see without revealing any of these So the where do

you see this shifting in the future? The markets are still even though we think we're global, we're always becoming more global and so you know, China sneezes and we catch a cold. Those types of intricacies are going to continue to evolve. Do you guys have plans to expand overseas. Yet certainly London is an option, and then Hong Kong.

London and Hong Kong are obvious options. It turns out that our market structure for an independent, non government firm to get started in a foreign country challenging, is very challenging. And so the beauty of Reggaets was a couple of guys with an idea could try to spin up a better matching process and if it hunts, we can make a living, hopefully make the market a better place. It's very, very difficult. In other countries. Most of the exchanges are

run by the government. Is that true? So is it l and independent? And I believe the LSC is independent. So you you caught me on that one already. But I know China and Hong Kong are just totally different animals, although you would think Hong Kong would be the closest thing to a non government entity that China. I happened to be at a conference there a couple of summers ago and gave a little presentation on market structure, and

the big buzzword then was kill switches. And it was fascinating to me because they had a person from the Hong Kong Exchange talking about it, and he says, kill switch. Are you kidding me? Who knows what the person that I'm turning off? What resources they have, what are the trades they have, what position they have. We're in exchange, We're not the broker dealer. We don't have the understanding of their financial wherewithal we may be forcing them to

take incredible losses with a kill switch. They were terrified of kill switches. Over here we're talking about everyone should have a kill switch and be able to flip at any time. You've got to be really careful with these things, be because the unintended consequences can really be an issue. That that's that's quite fascinating. Um my favorite two questions in the last few minutes we have. So a recent college grad, a millennial comes to you and says, I'm

thinking about going into finance. I'm interested in trading. What sort of advice would you give them? So back to your question about why I got involved, I thought it was going to be an easy way to make a living, right, so fully understand that whatever you earn you're gonna have to work very hard for even though it appears that you can show up and be Mr Citadel and trade from your dorm and create billions of dollars. How many people get to be It's a very rare event, Kevin Griffin.

I mean, you're talking you. It's funny because people talk about Jim Simmons, or they'll talk about um uh Stevie Cohen. These are real outliers. These are one in a hundred million personalities. These aren't like, hey, let's all become traitors and become billionaires like Curry or Michael Jordan's. The odds are so overwhelmingly stacked against you that unless you are

unusually gifted. I did an analysis on this exact subject some years ago, looking at how many kids were high school athletes millions, and then how many of those high school athletes become college athletes, which is a single digit percentage, And then how many of those college athletes actually get to enter the draft again a tiny, tiny percentage. And those people who go on to be in the draft,

how many of them actually have a career. Forget Stephen Curry and Michael Jordan's earn a living as a professional athlete. So when you go back to that original pool of high school athletes. It's such an infinitessimal number, and it's turns out on the trading side, it's even smaller. The Jim Simons and Steve Cohens and Kevin Griffiths are like

rarer than the Stephen Carries and Michael Jordan's. It's it's amazing, agree and so so the advice to a millennial would be what, Well, hopefully you're smart, Hopefully you're willing to work hard. There will always be capital transactions, there will always be mergers and acquisitions and corporations that need advice around financing and currency exposure and interest rate exposure. Find an area that you really love, understand it as well

as you can. Probably spend some time with someone who's doing what you think you might want to do. So have an apprenticeship if you will, get into a training program, get a taste for it, and then decide if it's really for you, or if maybe you want to go back to business school and look at industry or something else, other other options. I tried to my son happens to be in the business, actually tried to talk him out

of it. He wouldn't listen. Um Anyway, it's worked out for him, but it uh, it is very captivating and seductive to see the opportunity. And when you had those days where you caught a trade and you make two d fifty dollars without a lot of effort, you know that was a week of painting houses when I was that's exactly right, right, that's exactly when I sit there

and go see which would I rather do. There's something about working with your hands that's satisfying, although I I prefer working in the garden once a week then painting house. My last question, and one of my favorites. What is it that you know about investing, about trading, about market structure that you wish you knew forty years ago when

you were setting out on this career. So when I was studying in the markets, um I actually had Burton Malkiel efficient market theory random Walk Down, Random Walk Down Wall Street that had been published just a year or two before I took his course. UM I was a big believer of that coming out of school. Looking at thirty or forty years of the markets, I think he's

right there. Efficient around the edges, they're efficient because you can't necessarily pick the ones that are going to win and lose, but well, the might the markets are also psychologically driven. Witness the Internet bubble, which I lived through, traded through. It was fascinating to me at one point and a ninety nine early two thousand. Some of the most brilliant minds, we're totally confused. So the biggest hedge fund guys. One was a chronic short, one was a

chronic long. Neither one of them knew what to do with their portfolio because prices were in this new dimension. Well, it turned out there wasn't a new dimension. It was just that we thought there might be. So there are dislocations in the market. There will be times when having a level head gives you an opportunity, and the only way to really participate well with that is to not be levered. So it's leverage that has killed us, both

in the recent crisis and in the past crises. Don't over extend yourself thinking that you've got the answer to where the market's gonna go or what's going to happen. Uh again, Warren Buffett tells a great story. If you had invested ten thousand dollars with him, and sixty seven would be worth whatever it is, tens of millions today if you had invested twenty dollars and borrowed ten, so if you did it on margin, you would have been out of business. Sometimes options and futures and all that

kind of stuff. I like to say it's for people who want to get there in a hurry, but they may not know where they're going right, so it could work out, but it also could build a lot of characters. The way I used to talk about my losing trades. The Buffett quote I remember, and I'm sure i'm mangling this about leverage was, you know, dumb people should never use leverage, and smart people don't need to use leverage, so that that works that well. Keith, this has been

absolutely fascinating. I appreciate you spending um so much time with us on this. We have been speaking with Keith Ross. He is the CEO and chairman of PDQ Enterprises. If you enjoy this conversation, be sure and look up an inch or down an inch on Apple iTunes. You can see the other ninety or so of these uh conversations we've had. I would be remiss if I did not thank Taylor Riggs, who was in charge of producing and booking our show. Charlie Vomer is our producer, Colin my engineer.

Michael Batnick is the head of our research who helps put these questions together. You've been listening to Masters in Business on Bloomberg, a radioh