Is ARK the New Janus Twenty?

can it last? You know ago, so it's been a tough trade to bail early and so but it's a it's a question that won't go away and keeps getting greater. And you know, the poster child for this era and this sort of tech and growth moment that we're in is is definitely ARC. You know, we had Cathy wood on maybe a year ago. We interviewed her and ARC is now taking in money hand over fifth and the performance just won't quit. And so when you see something go up that much, people start to wonder how long

it could last. And when we when I tweet about ARC, one thing that people will say is this is reminds me the Janis twenty um. And the other thing that people will say about what's going on is that reminds them more of the Internet era of the late nineties then it does say two thousand eight, you know that that this is more of a techy growthy kind of

upswing rather than two thousand eights corrections. So we I thought, well, let's let's see if we can get the manager of the Janice twenty, who was managing money at the fund in the late nineties, to basically, you know, talk about whether that comparison is fair and see what he thinks of it all. And let me just give you some numbers on Janie twenty. This is a fund. If you don't know, it was really the big fund of its era. It went up five between nine that's about what that

five six years. That's exactly what Kathy is up right now. After six years it got to thirty five billion. That's exactly what Cathy Woods Fund has. Although jan Is stopped taking in cash, Kathy might have to might get bigger. But then it fell in two thousand, two thousand one with the bull burst, but then it went up another

pent up until two thousand seven. So with without further ado, we have the manager of that fund, Scott Chozel, who was the manager from seven to two thousand seven, and during that time he was Mutual Fund Magazines Manager of the Year and honorable mention for a Morning Star for the same award in two thousand seven. And there's a great headline. This just tells you how how big of a deal this guy was. There was a great headline from the Denver Post when he left Jan's twenty and

two thousand seven, like Elway, Shozel leaves on top. And so you know, that's a long it's a long time ago. It seems like a whole another lifetime, but it wasn't that long ago. And you know, history does have a good habit of rhyming. So um, I'm really excited to talk to him about how he sees what's going on today and some of his experiences back then. Me too, And he's going to join us from Denver, Colorado this time on Trillions is our the new Janet twenty Scott,

Welcome to Trillions. Thank you very much. I appreciate the the trip down memory lane. I like the part where Eric said, uh, you know that that you left, um, and you left on the high part right, So what are you doing now? Well, Um, I'm basically managing money for our family, running a family office and uh focused on our foundation. And I spent a lot of time with my kids as they navigated high school and into college and now out of graduate school. Um. But I'm

very active in the markets every day. Uh. I still have a cadre of former Janice analysts and portfolio managers I stay very close with. I just was on the phone for half an hour this morning with a friend of mine who used to work with Paul Tutor Jones. UM, so I stood pretty connected to the markets. I've I've never considered it a job, It's it's a lifelong hobby. And understand that you also have a farm in downtown Denver. Well, I have. I live on a lot of people call

it the farm. It's uh just outside of Denver. It's about ten minutes away from ten twelve minutes away from downtown Denver. It's it's kind of a rural area and we actually have a working barn and hate fields that we cut hay in and uh real live horses. Uh So it's uh. I've been known to muck stalls from time to time when I'm in the doghouse with my wife. Um, it's a little oasis in the city. Um, I am kind of jealous. I am in Philly and I keep

dreaming about a country life. Maybe I'm you're you're my model. I'm gonna get to where you are someday. But uh, anyway, until then, UM, let's talk a little bit about Arcum. You've you keep up at the market, you you follow this, how do you see this this fund in particular, Cathy would arc Let's just start with your views on that. You know, do you see her as really echoing what

you did at Janice twenty at the time. Well, I am supremely impressed with the way she has structured her firm, um, her willingness to invest with a point of view, the way that she's been able to successfully leverage social media to augment the research process. Um. Uh. She first had my radar screen probably eighteen that twenty four months ago, and I've been watching uh and I gotta say, I'm I'm very impressed. I think her analysts are doing a good job. Um. I think she's got a great view

of the future. Uh. And if I were gonna if I were gonna go back into the business and start a firm. She has created a fantastic template. There's many similarities between the Janis twenty fund and ARC. For sure, we were very research centric. We had a group of extraordinary analysts, many of which I'm still in contact with today, that we're really focused on trying to invest in the future,

and like everything, over time things get better. And I think she's done a very very good job of extending a lot of the things we were doing at Janis back in the late nineties and two thousand. So there's the idea of being concentrated. And you know, we Um on the show talk about these high active share funds being like hot sauce you put on top of a maybe a lower cost, cheap bay to portfolio, and she's certainly done that, Um, And that's what the Janis twenty

did and your ramps up. I mean, when you look at a chart of the Janis twenty versus the SMP, or Cathy versus the SMP, it looks like the Swiss Alps sort of towering above like flat farmland, and the thing is not unlike what's around Denver. Actually, yeah, it look looks like Denver versus Philly. There you go. Um so, but in the Janice case, what you also live for was a correction, and I think that's what keeps coming up more and more when we when I tweet about Cathy,

they're like, well this could be tough. You know, you go up that high, you come down quick? Can you walk us through the sort of that moment? I guess when the Internet bubble burst and looks like it was nine d nine um and then too late nine yeah, lasted about two years. How did that play out? Obviously if you have less stocks, it can hurt you more. Um. How did investors react? Well, there's a lot of there's

a lot of unpacking that needs to happen there. Um. So the we decided it was not lost on me that there was money literally coming in over the transom. And while ARC is receiving a lot of money today, to just put that in context, in the nine in the nine late nineties, late Janice was receiving seventy cents of every dollar that was going into the mutual fund business. Think about that, seventy cents of every dollar going into the entire industry going into Jans that's kind of what

like Van Guards doing that ish today. But yeah, that's that's a great static gives you an idea of how big exactly. So, um, it was not lost on me that valuations were getting rich. Um, it was not lost on us. Lost on me that, uh, there was just so much money coming in. And so I remember in April of which is kind of at the really at the height, I went to Tom Bailey, the founder of Janis, and said, you know, I think the best thing to

do for the investors is to close the fund. And he looked at me and he said, as we were walking down the hallway, he said, great, let's close. Let's close it, and he goes, let's close it on Friday. And this was a Tuesday. So that's one of the other things I loved about Janis, as we were able to make very decisive decisions, were very little bureaucracy. So we closed the fund in April. It wasn't until kind of September, October, November that things started to kind of

come on wound. And then actually two thousand and two thousand and one, I think and my style of investing and my commitment to investing is much like Cathy's today

is that it never wavered. Even in two thousand and two thousand and one, when when things were selling off, we were still trying to invest in companies that we thought could capture the future um And if you look at the returns the investors that had, and I think this is where if I were Cathy and the and the media broadly, I would try to educate her investors

to stay with it. I think she's really onto something, and but there will be a period of time, maybe through her own doing or through some macro events in the marketplace, where the markets are going to sell off

pretty dramatically. And if I were encouraging people to invest in in her fund, I would say, make sure that you have got the mindset to to when that fund is or which it could be, that's when you want to step back in and recommit to the fund, because if you went I went back and looked re architected.

You know, the investors that had the best performance in the in the Janis twenty fund, it's the guys that continue to invest, either through a dollar cost averaging mechanism or just an active decision to buy it when they were down, believing that hey we had a process that you know, we didn't immediately become less intelligent because the fund was down. That we stayed with it. We stuck

to our knitting. And I think that a lot of there needs to be a lot of education to her shareholder base that, hey, the future from A to B is not a straight line, and to be able to have the gumption to step in when this thing trades off from time to time. So one difference with UM, with Kathy and and Arc is that you know, she's unable to close because it's an e t F, whereas you had a mutual funds. So talk about that difference in what advice you'd have on on on that side

of the question. You know, yeah, that's a very good observation. And I don't know what the answer is. We closed Janice twenty and UH to existing investors in April. We had another side UH fund that was run alongside it, the Janice forty fund. But between the two, you know,

they had about forty billion dollars in assets. And I really felt that that at that time, given the depth of the markets and liquidity and then in the market capitalizations of the company, I really felt that you know that was kind of the top end, and I think the markets are deeper. Her portfolio, her group of portfolio offerings is wider. I think he had six or seven

funds as opposed to to so UM. I think that that is probably the one thing that she is going to have to figure out a way to navigate is size. And I don't know if it's fifty billion dollars is a number, or or a hundred or a hundred and fifty, but there will be a point where it becomes where size will become kind of her enemy. So I want to actually just step back and compare uh, the moment that you lived through back then with this moment. How

I mean, how do you feel about it now? You're you're an investor, you're still in the markets with your family office. How do you feel about where we are now versus then? Well, certainly, you know, history doesn't repeat itself, but it rhymes. I think it's very easy to point to some of these valuations that we're that are kind

of head scratching um using traditional yardsticks. But if you look at some of the total addressable markets that a lot of these high you companies are trying to address, UM, you know, there's still a lot of headroom in the opportunity. I think we're just scratching the surface in some of this DNA sequencing, uh, certainly cloud computing and big data. I think we're still early days there. Um So, I think that she's on to you know, five four or five broad trends, and I think she has thirteen or

fourteen technologies that sort of embody that. Um So, I think we're and this and then with COVID, this whole digitalization phenomenon has been pulled forward. So I've talked to a bunch of c e O s and they said, yeah, we're we're operating today where we thought we would be four or five years ago. And so then you've got this whole generation of computer literacy. Uh, my kids are much more a depth than I am at using some of these technologies. So you've got the convergence of lots

of very bullish long term mac row factors. Um but it won't be a straight line all of a sudden. You know, we've got a democratically controlled how government and uh, you know there's a regulatory or regime that's going to be thought about a lot differently than it was yesterday. Um, you've got financial markets. You know, got the ten years now robustly through one, which I don't think is in and of itself a problem. But what happens if it

goes to one and a half or two? And how does that math re engineer itself in terms of valuations. So there can be a lot of things that happen on a macro level that could compress these valuations. Um. Which is why I think that if I were giving advice to people broadly in the marketplace, it would be if you're and you're investing in in concentrated funds that are investing in the future that have had these huge runs, just be prepared, don't get shaken out. If the fund

is down, that's when you want to buy more. And if I look back at the Janis twenty fund, the people that had the best returns are the people that stepped in when the fund was down and I was being called, you know, an idiot, the village idiot, which I'm I'm good with. I've been called worse. Um, but that's when you really want to step up. So you want to size the position going in and give yourself some margin of safety so that when opportunities present themselves

to be able to step in and buy more. And you know when you talk to Kathy and see her online crowdsourcing research, she's got a young group of analysts. It really she's having a good time doing this too. And I want to maybe compare her stock picking process to yours. And obviously this is what none of the rest of the E t F industry can discuss because they're all rules based indexes that are once you design them,

it's over. UM talk about this stock picking process and maybe how much of the success is picking those stocks, being concentrated or just having a hot hand, and how that all kind of comes together. Right. One of the things I think that to be successful running a concentrated fund, you really have to invest with a point of view and and have strong convictions. UM. And I never had any interest in investing in my fifty seventh favorite idea.

And I remember one time and so people you saw asked me all the time, how do I get a name into the Janis twenty fund? And I said, It's very simple. I said, during the course of the year, you'll be traveling around the country, meeting with management teams or seeing a product or there will be something that crystallizes in your mind that this is a fantastic investment. And I said, I don't care if it is Christmas Eve, I don't care if it's my birthday, I don't care

if it's Easter, Sunday, whatever. Pick up the phone, email me whatever, and get my attention. UM. And so I remember very specifically, a young analyst was walking with me down the hallway and he says, I've I've got it. I've seen a company that I think it fits the Janis twenty fund criteria that threshold. I said, great. So as we walked from the fifth floor to the sixth floor, he described the company what it was doing, um, and it reminded me of a company actually from about ten

or fifteen years earlier. And by the time we got to the sixth floor, which took us seconds, I said, we're gonna own ten percent of this company as fast as we can buy the shares. And one of the criteria I I said that they that I used to some of the younger analysts. I would say, Okay, how much of your bonus are we going to put into this fund? How convicted are you in this idea? And this kid gave me one of the great answers of all time, and he said, I think about think about that.

So we knew we were paying him X. So he basically so we and we ended up paying him. He gets more money, and he gets the stock in the Porto one of the great stocks, and when it's still one of the great stocks after fifteen years, and that's intuitive surgical. So this was intuitive surgical. If you reverse engineer the splits, etcetera, etcetera, the car cost basis and this would be low single low, low single digit. So that to me was that to me is the is

the threshold, is is having the conviction. You know, I if you look at the if you kind of reverse engineer the SMP five hundred over the years, it's about seven percent of the names that that provide most of the outperformance. So I always felt that if we could find those names and with our research capability and the judgment of the people at the shop and some luck, luck pays a plays a. Um. Luck, the more honest you are, the more real, the more you realize that

luck does play a part, play a key role. But UM, I would like to think that we had some pretty good judgment and being able to Eric. We talked the other day about really spending time trying to understand the fabric of the company, not just the exos and nose of the balance sheet and income statement, but really understand the real fabric. Is this a management team that can continue to grow and continue to capture the opportunity that's

in front of them. And so we really I think we did a good job, and I think Kathy is doing a job of making those judgments because at the end of the day, that's what it comes down to, his judgment. Now, you talked about not wanting to buy the fife best idea you had or you know, as you go down the list, it's nice to have just

your best ideas. A lot of funds I really can't do that, like, and there's a lot of active funds who I know, for a factor, sort of watching Cathy and all her success and they're probably getting a little jealous or wondering how they can fit into the new world, especially as five billion leaves around there leaves active mutual funds last year to steady drumbeat of outflows, especially on

the equity side. What are your thoughts on on the legacy active and that traditional more closet indexing active and how it can sort of evolve into the future as passive becomes bigger. And then on the other side, you've got this barbell where the high active share gets success. But the middle seems like a tough spot to be. The middle is always a tough spot to be. Um.

You know, I don't know, really, UM. I think that a lot of the mutual fund companies, if I were looking at them critically across the actively, I think they have too many funds. I think they have way too many funds. You know, I don't know how and this is not you know, if you look at key ro Price or Fidelity, you know, fifty seventy any funds. I mean, that's a lot of actively managed and I don't think

there's you know, talented managers. I think that there's seventy managers in the mutual funds actively traded mutual funds in the country. They're not good portfolio managers. There are I mean, to my way of thinking, there's a dozen, but there are there. You know, let's say it's a hundred. Okay, So if I were running some of the some of these big actively managed fund complexes, I would start combining funds and make it simpler for the consumer to understand.

And then in terms of concentration, I think it takes a special sort of DNA to run a concentrated fund. So one of the things that we were very good at it Janice is being able to match people with their natural investment style with the fund that they were responsible to run. So the people that we were had running our biotech funds, etcetera, where they were not only had extraordinary academic backgrounds, it said they were passionate about biotech.

You know, Uh, I'm managing money today exactly the way I managed money in the Janis twenty fund. When I ran the twenty fund, I had of my assets and my investible assets in the fund. I ran it exactly

the way I would run my own money. So to me, I would if I were running an actively trade a mutual fund shop, I would try to narrow the number of offerings, make them simpler to understand, and I would try to to really do a good job of matching people into those funds that are that have a natural inclination to whatever the criteria of that fund is um and invest. And then from there they ended up, they'll end up investing naturally with a with a very convicted

point of view because you've got everything kind lined up. Um. I think that it's become more of a little bit of a marketing game when you when you have eighty three different funds or a hundred and six different funds, that to me doesn't make as much sense so as a as a former actively managing mutual fund guy. Like, when you look at the E t F do you think it's a better vehicle? Well, I think that depends. I mean yes and no. So I do think that

the E t F s are obviously much more tax efficient. Um, you know some number you guys know this better than I do. Of the active managers can't beat the index um, and the indexes are not static. I mean the SMP five hundred. Everybody thinks, okay, it's the SMP five hundred, but it's a lot different than the SMP five hundred two years ago, four years ago, ten years ago. So it's very subtly act we managed. So I think between

which is why it's tough to beat. But I think I do think the way to to beat the S and P five or your benchmark is to invest with the point of view, be able to size positions material above quote the benchmark, and um, if you're right, you know you can you can outperform the markets over a long arc of time. But I think that that's a very It's like I was saying that Eric the other day, it's kind of like professional golf. There's a lot of golfers out there, okay, but there's ten twelve that are

really the elite players. And I think the mutual fund business, the actively twe the mutual fund business, is very, very similar. So if you can buy par, the number of people who can dreat part in this country is what five three? So if you can buy par, okay, that's a good foundation. And then if I can go find the Dustin Johnson or the Rory McElroy or the Tiger Woods of the of the actively traded mutual fund business, that's probably not a bad way to complement par Scott when it comes

to picking active and analyzing active. How important is it that the manager invests in their own funds? Did you do that at Jane's twenty? I think it is absolutely critical that you invest in your own fund. The level of acuity that you have when you have ownership is a whole lot different. You know. One of the things, Um, Peter Lynch, she used to have a very large you know, his portfolios used to be very large stocks, etcetera, etcetera. But if you really drilled down, most of his performance

was our performance was in those top names. But he has said that the reason he owns such a broad love all of stocks is because once you own five thousand shares or ten thousand shares of a particular stock, your level of acuity goes up. Then if you're just kind of looking and following the price on paper and this and so, you amplify that. If you're running a fund and you have eight of your net worth in that fund, trust me, it is um it has your

undivided attention. Seven three. Now I get that there are some highly specialized actively traded funds that are very narrow and focus and it may not make sense prudently to have that level of ownership in the fund. But to me, the baseline is if you don't have, if your portfolio manager, whoever it is, doesn't have their assets and fund they're running,

move on. So I gotta ask about another sort of elephant in the room, or at least last year, and I expected to be true this year, which is the FED. The FED is was just you know, Jerome Powell was basically we've called them Superman on the show before um and what they were able to do last year was basically, you know, keep the markets on the table um and then actually probably helped put a fair amount of confidence

into the system. So I'm just wondering, Scott, is you kind of look back at what you witnessed in the green Span era and then what we're seeing from Powell right now? What are your thoughts? How are we supposed to kind of evaluate the FED and and and what do you think? What do you expect as an investor? Well, I think a great question. I think that Jerome Pale has done a brilliant job. He's been unwavering, he's been decisive,

and he's been consistent. The green Span era, you know, everybody used to you know, there's so much Greenspan speak at the time, you couldn't you know what is he really saying? And is he carrying a big brief gaze or a small briefcase. I mean there used to be twenty minutes dedicated to see on CNBC and Bloomberg as to you know, what, what does briefcase look like this? You know, what's what's he gonna say and what does

that really mean? Jerome Pal's taken that off the table and he's been very um decisive at a critical time, you know, back in March, in particular March in April. UM. So I think what the Fed is done. And the reason I'm still bullish on financial assets broadly is that, if I think Buffett is correct, there are three asset classes that most normal people can invest in. Stocks, bonds, real estate. Okay, let's think about that. The bond market

until today, UM has been giving you nothing. The ten year has been at point six six okay, point seven two. It's now climbed a little bit over one percent. Okay, So you can pack away money for ten years risk free at one you know. Yahoo. Okay, Let's look at the real estate market. The real estate market is really four different markets. There's commercial the space probably not in a hurry to invest a lot of money in commercial office space. There's retail. Okay, the retail will be around

a hundred years from now. But I think we're over retailed. We were over retailed before Jeff Bezos was born. Um. Then you've got industrial space okay, last mile Okay, that that looks pretty interesting to me. And you've got um, residential of all shapes and sizes. So of the four sectors in the real estate business, two are really not that interesting to me, and two are doing We're very robustly. So you've got bonds not too exciting half of the

real estate market. Then you've got the equity market okay, and you've got the FED pushing a ton of money into the system, so to me, um, I think you know the FED. And I've been saying this for a while. The FED has been forcing people into the stock market. Um, And I don't say and I don't spect that to um to change anytime soon now. And I've been telling people, watch the tenure. The tenure is where it all happens.

And if all of a sudden, the ten years starts to trade one and depending on how it gets there, if it's kind of a slow walk up, or if it's all of a sudden, oh my god, you know, stop the printing presses. You know, we've kind of hit saturation. Uh, people aren't going to take you know, one and one and a half percent or two or three percent from from corporate bonds. They want more and more and more.

Then that's a paradigm shift. But for the last number of years, and I still think today it's you know, there's a pretty good tail wind to go into financial assets.

I just want to fall up real quick, though. But I think some people wonder if if if that does happen and you see equities you really get a hit, that the and the and the FED would fix it again, and that maybe equities will will just never see the kind of correction you saw or when the market went down that during those two years, was there any thought the FED would just come in and just you know, bail you out as an equity investor that I feel like investors assumed that now, like you know, the FED

put it's like in a something like yeah, So I think, isn't is that a pretty big difference? Does that actually create a little difference? And and and and it worries me at the highest levels. That worries me that the that the markets are more and more dependent on fiscal and monetary stimulus. I mean, how much time did we all, you know, kind of hang on the edge of our seats the last six weeks or see me the last

six months waiting for that second stimulus package from Congress. Um. That that does worry me, that that that in order to sustain these markets. You it's an addiction. You think you're addicted to either fiscal or monetary still ways now with the Dems running three branches of government, you know, I think that the fiscal stimulus will certainly be there. Now does that start to crowd out the monetary you know, the stimulus you've friended so much money and the dollar

gets whacked um. So, but I agree with your your um. You know you were nervousness about the increased need for fiscal and monetary stimulus to stay these markets. That is a worry. Is there anything that we didn't ask you that that you wanna you want to make sure that we we discuss No, not really. I mean you guys are obviously very very very well versed in this, and

you know the E T F phenomenon. I was talking to Charles Chuck Schwab not long ago, and I asked him what he thought, you know, where are we in this? And you know he's even though it would be talking his own book to say, hey, we're in early days of moving to a t F etcetera, etcetera. I mean, he's really very you know, I know him well enough that he's not trying to sell me on anything, and he and he just feels as though that we're still early days. You know that we're still early days in

this move into different flavors of EPFs, etcetera. Because UM, like today today is a perfect example. A lot of the people that have been investing in a lot of these tech stocks and and biotech stocks that have been up into the right well, they're not gonna they haven't They don't have the time or don't have the expertise to be able to differentiate between JP Morgan, City Group, Well, Spargo, Goldman, Sachs,

Morgan Stanley, UM. And again, the financials are sort of on fire, so the easiest thing to do is just to go buy the xlf UM. So they serve a very very very real purpose UM. And I think that Eric, to your point earlier, I think that the good way to construct a portfolio is with a baseline of E t F s UM, maybe some some actively managed funds, but more E t F s and then augment that with people with the golfers that can really um, you know, exert a point of view and have the infrastructure at

the firm their look. That's that's actually one thing that we didn't talk about is that after two after certainly after oh eight, a lot of these big firms a mutual fund complexes of all sizes, actually it becomes so risk averse that in order and and concentrated funds are looked at as risky. I personally believe they're less risky,

but be that as it may. To be able to find a fun complex that has culturally the ability to let a talented manager invest with that point of view and take some repue ptational risk at the firm, you know, that's a rare more rare and rare breed. One of the things I like about Cathy's fund is that it's all one thing. You know, Uh, it's not. They don't have eighty five different funds trying to satisfy five different appetites. They have six or seven funds that are trying to

satisfy sort of one appetite. Um. So if I were looking at trying to find a concentrated, actively managed fund, I would also one of my things on the checklist would be able to find a fund family that is willing to risk some reputational capital to allow and create an environment for um uh, a portfolio manager who's willing to invest with a point of view the latitude because

there will be some volatility. But if you have the ability to stay with it over a long arc of time and they're good at it, you know you've found the Dustin Johnson, the Roy McElroy, the tire Woods. You know it can be very, very very rewarding. So last question for you here we are at the beginning of one. I'm just wondering, as a professional investor of sorts with your family office, how much risk are you willing to take right now? UM, I'm about ninety invested UM, which

the big portfolio has eight stocks in it. UM the most aggressive portfolio has two. UM. So I'm a believer. I like the I like the companies I own, I like the management teams that I own, I like the total addressable markets. I'm willing to live with a different level of volatility than maybe UH some investors. UM. But I'm an optimist. I think the future looks bright and UM there's there's more opportunity in front of us than

there is behind us. Boom. If you if you got a second with Cathy, would, what advice would you have for her? Um? Advice? Wow? Um, I would. I would. I would frame it a little bit differently. I would. I would just be encouraging. I don't think I don't. I don't. I'm in no position to give anybody in her position advice. UM. I would simply give her encouragement and um, you know, and I would, And I would just encourage her to educate her shareholder base, you know,

which she does a great job of. I mean she sends out all those materials about on their research, and the crowdsourcing of the research means she does a really good job at that. UM and and there hasn't been a big draw down there yet. UM. But I would be encouraging perfect and and and and size science is the only thing that and I don't have an answer for that, So I really I don't have advice to

give her. But I would just simply be encouraging. That's what Tom That's what Tom Bailey was to me when I ran the twenty fund, and you know he was at I we're getting way off in the weeds on stuff. But I believe that in order to have the successful mutual fund company you had, the person who runs the company has to come from portfolio management. Okay, look at Fidelity. Fidelity was run by portfolio managers for a period of time. There though, it was run by a lawyer, and they

really struggled. And then you know, now and Abby used to run funds, etcetera, etcetera, and so they're back on track. Look at Microsoft, the person at the top of the firm has to be from the DNA of that firm. You know, Bill Gates was a software engine near Steve Balmer was a marketing guy that Trust stock traded flat

for fourteen years. You bring in Sacha and all of a sudden the stocks up, you know, twelve x. It's so true in the mutual one business that the people that are at the top of that are running the business have to come from the DNA of the business because and that's the thing that one of why I loved working for Tom Bailey is because he was a portfolio manager. He knew that they were always gonna they were gonna be you know, bumps in the road and his advice. It was he never gave advice. He just

gave encouragement. And that was so reassuring because you start the second guest yourself, you know, you start to there's so many things. Your head just starts to explode when things start to move against you. But he was so encouraging, and so if I were my I think that Kathy would would not be advice, it would just be encouragement. Perfect. All right, Scott, I wish you a healthy and and happy Okay, thank you very much, really appreciate it. Thank

you for your time. You're fantastic. Thanks for listening to Trillions. Until next time. You can find us on the Bloomberg terminal, Bloomberg dot com, Apple Podcast, Spotify, and where brails you like to listen. We'd love to hear from you. We're on Twitter. I'm at Joel Webber Show. He's at Eric Baltunus. This episode of Trillions was produced by Magnus Hendrickson. Francesca Levy is the head of Bloomberg podcast by