A Quant's Take on Inflation

unfortunately so. With traditional strategies like the sixty forty portfolio allocation under continued pressure, what are the options to investors really have? We'll talk to a quant at a major asset management firm who has some ideas about that. But first, vil Donna, it's been a while, UH, two weeks without you. We missed you terribly. You had quite an adventure, I did.

I went to Spain, as you know you did, and when you came back I was delighted to see you actually did bring me some of that famous Spanish Ham don't tell Bryan Duncan from the Illinois Farm Bureau, but I snuck some Hammond for you. You suck some of that that delicious Iberico Ham. And but when you brought it to me, I was thinking, Vildonna does not look herself.

I thought either she's jet lagged or she's just so disgusted by having to bring this ham to me from it was the last all the way across, but it was actually the third thing. You had covid and luckily covid you cannot catch covid from Ham. I've I've determined, thank God, thank God you're okay, even though your covid germs were all over. The Ham is delicious. That's what I get for around Europe. I was very worried about you, but now now that I know you're okay, I uh,

I feel like you can take a little ribbing. But how was the COVID adventure? You were pretty sick. Yeah, I was kind of sick. I've never had it before and I finally caught up with me. I guess it's literally what I get for going to Europe and having fun. So well, we're glad, so glad you're back feeling good. The Ham was absolutely delicious. I know you're disgusted to carry around some some swine for me, and it's very surprised. I did not actually expect you to actually bring that.

I got you the top quality version it was. There was like a two dollar version and there was like a seven dollar version. I got you the seven dollar one. In fact, I think you're probably not the only one sick over that hand, because I was so hungry going home, I actually opened the package and started eating it on the subway and I hate. Everyone hates so many eats on them, especially a big pile of ham, but I appreciate it. It It was delicious good. Well, I do want

to bring in our guests. Who who? I don't want to keep him waiting too long. It's George Patterson. He's a chief investment officer at pgim quantitative solutions. So, George, thanks so much for joining us this week. Great to be here. Thank you for having me and maybe, uh, I can start out with just a quick story, which is that I met you over the summer at a pigym event and we talked a little bit about you and about your background, and you have a very interesting background.

You actually used to work for NASA right. So I'm hoping you can just start out talking about your your yourself a bit and how you ended up with Pigym considering that background. Sure, yeah, well, I'm one of the few quantitative investors that can actually say they were a real rocket scientist. I studied physics both undergraduate and Graduate School and, uh, after graduating, my first opportunity was as a post doc at the Jet Propulsion Laboratory in Pasadena, California.

So I was there for two years. UH, great, very great experience. Learned quite a bit. There are no more rockets at the Jet Propulsion Laboratory. It was you know at this point, but there was a lot of space related uh, you know, science and and physics going on. My project was maybe a little bit more tangentially related

to space, but it was a great experience. However, you know, after some soul searching, I became interested in quantitative investments and Um found, you know, found an organization up in San Francisco. What was then wells Fargo Nico Investment Advisors. Became Barclay's global investors and was there for quite a

large portion of my career. I've been doing the same thing quantitative investments, you know, typically, you know, focused on serving large institutions, and they've been doing that since the mid nineties and a number of different organizations at church. It's fascinating to me how many people with physics backgrounds, m I t types like yourself, end up in quant investing. What what is? Is it just the math background or there or there's certain sort of principles of physics that

are just easily applied to markets? Why is it, uh, that connection that we see so often? Yeah, I think it's I think part of it is the math and Statistics and, Um, you know, not being I think the great thing about the physics background is is that they really teach you not to be afraid of of digging, going into a new field where you you know, you don't have anything, and really like taking it apart and

understanding what drives it. So I've had several people who, you know, are economists that have, you know, said to me like, you know, I remember them saying to me at one point like we're, you know, we're so surprised, you know, that you've done so well. And I said, well, that's because I don't listen to economists who tell me something is impossible, because, you know, I need to prove

to myself that something can't be done. And, Um, you know, a lot of times you you know, like you do, you don't want to get in the way of someone who's trying to solve something that's not that that everyone else says is impossible. So I think it's just that mentality you get that you need to you know, you

need to challenge assumptions. You know, you're always looking to disprove something and, Um the thing I like, and I've got a number of other physicists who worked for me, the thing I really like about hiring, you know, people with that background is many times in this in this industry, you know there's a particular project that's I need someone to work on, and I may say go off and, you know, look at look at this problem or or look at that problem and and a lot of times

what you find is that, you know, research is not easy, it's it's very challenging. You'll find that maybe whatever you set out to do is impossible. But when you hire someone with a bit of a science background, they'll always find something interesting. So they may they'll always come back to me and say, Hey, I didn't, we couldn't solve the problem, or we we solve the problem, but there's

no there's no Alpha in it. But we found several other interesting things that might be relevant, and sometimes that's an important part of the job. You just have to kind of follow your nose to see where you know, where the opportunities are. Research is not a linear process. You don't say, you know, I'm going to go out and, you know find uh, you know, a sharp ratio three investment idea. You know, you have to you know it

may be out there, it may not. Part of it is discovering it, Um, and it's you know, you have to be you have to be open to sometimes not necessarily going, you know, where the specific agenda is leading you. Yeah, and of course now anytime, uh, someone wants to make a stock go up on social media, they use that rocket ship Emoji. So some some more synergy there for

for the rocket scientists, and a lot of overlape. Yeah, but George, Um, I know one area you're interested in and I'm sort of fascinated with is, um, natural language processing, you know, in other words using computers to sort of read text uh and interpret it. Uh. And when we got a lot of words from Jerome Pal this week, a fed statement and a press conference, Um, I feel like the you know, his message was was pretty easy to understand. You know, we're we're gonna hike rates, WE'RE

gonna keep hiking rates aggressively until inflation is tamed. But I'm wondering, from UH quant perspective, from a natural language processing perspective, is there something more that a computer, uh program can, can glean from a press conference like that, uh, and the statement, or is it just a matter of of being able to react quickly to it, uh, with trading algorithms? You know, how does how does UH natural language processing fit into an event like that this week?

So so there's several things, Um, that that I would say are relevant. Uh. You know, I'm sure there's a lot of people out there that are running, you know, very short horizon strategies, looking at what words he chooses to use and and like specifically, like the questions and answers that come out of that, and are looking to kind of uh Um, you know, talk, you know, get in or out of the market very quickly to take

advantage of kind of a short term movement. I think the real advantage, however, of language processing is just that you can go into depth, you know, you can read a ten K and and analyze a lot of aspects of it and you could do that for two or three of them, but it might take you, you know, it could easily take you half a day or a

day each. The advantage of language processing is that you get the breath, so you can do three thousand of these, you know, in a matter of, you know, minutes or maybe half an hour, depending on what what type of models you're running. But it's a combination of the breath and the timeliness, I would say, that makes it relevant. And if you think about humans, like so much of our intelligence, so much of our knowledge, is really encoded

in writing. You know, we've been collecting numerical data for some time, but people have been generating written texts, you know, since the beginning of of you know, the beginning of kind of putting text down on paper. Um. So there's just a huge amount of information that comes out and there's a lot of value in there. Is What we have found. So it's been one of the most uh relevant areas for us, you know, over the past few

years to extract information. Well, one of the words that kept coming up quite a bit during the power press conference was the word pain, and I read a bunch of notes after after his press conference, pointing this out specifically because of the market reaction that we saw on Wednesday afternoon. So maybe can you just lay out what, in your view, actually transpired with the power press conference and what we got from from the F O M C and what you make of how the market reacted?

So my view is is that, you know, it over the summer with some earlier with some earlier statements from Powell, he he tried to portray a very, you know, serious view about taming inflation and he came away saying that

you know, we're gonna WE'RE gonna do it. But he was maybe just a little bit too dubbish and you know, we saw a very large rally and markets over the summer as the result of that, even though a number of other fed speakers came out and and really were Um, you know, kind of we're much more pessimistic about things. So I think really since then what we've seen is he has just had to be extremely clear that they are gonna get their job done and you know it's

gonna it is going to cause some disruption. I think. I think some of his earlier statements he was trying to be a bit more balanced. But I think now, given the market's reaction, he has just he has just realized that he has to be extremely clear about where things going, where he things are, things are going. I don't forget it is a challenging economic outlook, but it

follows several years of huge gains in the market. So you know, if you look over a longer period of time, you know we've we've had a lot of gains in a short period of time. So it's not unrealistic to expect a little bit of give back in the next you know, the next year or two. Judge, as I said in the Intro, uh, you know, brutal year for both stocks and bonds. That sort of traditional sixty forty portfolio is uh, has hit hard times. Uh, to say

the least. I imagine for a guy in your position there's uh, you know, a lot of clients out there saying get me a rocket, scientists on the phone. We gotta figure out something else that works. So so from a quand perspective. Um, I know there's some stuff that's working spectacularly. This year I did a story on trend

following and mauntaged futures. Commodity trading advisors who are are really doing really well this year just by uh, sort of, you know, following the chart down when when, uh, you know, stocks are going down, when yields are going up, just just following the trends. But what else is is um sort of a solution from a quant perspective for a

challenging environment like this? What are you telling those clients looking for something to either, you know, get some kind of return this year or at least protect the wealth they have? Yeah, so, you know, there are several different things. I mean, first of all, we do have several offerings that that focus on trend following or kind of global macro strategies or tail hedging, and you're right, those have

very successful. This is kind of the perfect economic environment where you do have big movements as well as some big inconsistencies across the globe. For example, looking at Japan and how you know they're, you know, everyone else's raising rates in Japan is really not and you know we're we hear a little bit now about trying to have to defend the end. However, Um, you know, there's a couple of other things. One is commodities and and other

and the other would be real assets in general. Maybe the last one I would talk about would be some downside protection. So commodities and real assets are, you know, we've seen kind of a big run up in commodities and a bit of a retracement, but over the long run, you know, there's a lot of research that shows that

commodities do very well in this type of environment. Um, you know, we you know, our view is that the fit is going to be successful and taming inflation, but it's also going to take a little bit of time. It's not going to come down very rapidly and you know, we think there's a lot of opportunities for commodities in

someone in in a portfolio. So that's that's one area. Um, commod these, I think, also of real assets, you know, Um, you know, whether it's real estate or or other, you know, direct real investments that are also typically do very well in inflationary times. I think the other thing that we see a lot of conversations about his downside protection. How do you build a strategy that can either hedge a hedge tail risk or just, you know, deliver most of

the upside while limiting the downside? And there again there's a number of different solutions we offer in that area. So those that say are the main the main subjects that we've been talking about. Two clients we've seen the most interest in George. Can you talk a little bit more about that, because I know you sent us some notes before the podcast. You said, Um, it's important for investors to consider defensive strategy. So what specifically? Maybe you

can just go a little bit more into detail. Yeah. So, so, you know, a lot of times if you look at a long term investor, a long term success and what you'll find is that it's it's it's important to participate in the upside, but it's probably more important to avoid a large draw down. So you know the draw downs are very difficult because if you have like a tem per cent draw down, you need more than ten percent

to recoup the return. Just mathematically, a temper cent draw down allowed by temper cent gain doesn't get you back to where you're started. So if you have some ability to either avoid or limit those draw downs over long periods of time, that can be very beneficial to uh, to to an investor. And if you think about it, there you know it's valuable to an institution, but for a person. It's even more important, you know, particularly if you get into the you know, kind of like five

to ten years before and after retirement. Um, you have to be very careful because that's kind of the period of time when, if you have a draw down, uh, it could be very detrimental to like retirement savings. So so there's a number of different, you know, number of different Um ways that you can get into. You developed drawing out your strategies that do well. I mean in

some occasions people look at low ball strategies. We have a different approach that kind of combines Um, you know, both market and fixed income exposure with with Um with some optionality to basically give you downside protection but at the same time participate in most of the upside. So it's something that, from our perspective, should have a should have a place in in many portfolios. You mentioned, uh, real assets. I would mind unpacking that a little bit.

I mean I think there's this this huge uh, curiosity and demand for sort of alternatives, liquid alternatives, you know, stuff outside of the traditional stocks and bond markets and wherever that takes you. But obviously liquidity can be an issue with alternative assets. What looks good to you from from that perspective, you know, Um, and is it? Is it tough for a quant to sort of apply your

methods to non traditional markets like that? I don't think it's tough to you know, they're different structures, but no, I think in many ways, you know, being being, having a quantitative approach allows us to put some sort of consistency across the you know, the different types of asset classes. And when we think about things, we think not about just risk and return, but we also think about draw down, we think about, you know, kind of skewness, we think

about liquidity. So I mean, from my perspective, from the you know, a quantitative approach, you know, definitely compliments Um, you know, more more traditional approaches. So I liquid assets. You know, private assets has been extremely hot. You know, I'd say the last few decades Um, we've seen a huge amount of money go into them and you know that those assets have done quite well. Your private assets definitely have a place in in an institutional investor's portfolio.

The challenge really, as you mentioned, is liquid it, because some of these investments, you know, not only require you to make an investional initial investment, but there's also ongoing

capital calls. So you know, what we have seen some clients experience is that you know, if you have a combination of liquid and a liquid investments and the liquids are requiring capital, you know if you have that, you know if you have that money invested in like equities, you might have you might be forced to sell equities at the worst possible time because you need to make

a capital call. So so they're the question is not so much about looking at what's the maximum return I can get, but how does this fit into my portfolio and what is this going to cause me to do in a in a period of extreme stress? I mean, that's really the case. I mean, liquids are great, it's just you need to make you need to kind of go in the as I say, Eyes Wide Open in terms of looking at the opportunity and understanding how it's

going to fit into your into your objectives. So we all know, Tina, there is no alternative and we've all been talking about it for such a long time. But the thing that I'm hearing out is Tia, which is there is an alternative. Two stocks. I don't know if you've also been thinking about this or hearing about this, but I'm one of you. What you make of this idea that there are alternatives now? And you know, somebody I spoke with earlier this week said you can hold

your nose, for instance, and go into high yields. So what do you make of some of these alternatives? Now? I think it's unfortunate that people are always comparing everything to the SMP, right so that the goal is to build a portfolio that gives you alternatives and outperforms the SMP, and I think that that's that's a little bit of a high bar. I think the goal of alternatives is more to provide diversification and stability and is and is less about can I specifically outperform the SMP or can

I specifically outperform a specific target? I mean, obviously you want your alternatives not to be, you know, to provide the diversification, you want them to be reasonably priced and obviously want you want solid performance. But sometimes people, I think, are a little myopic just saying okay, I want to alternative, but us to do better than then this investment or

that investment. So you know, I think of alternatives much more in terms of risk, risk control and um and really it's about figuring out what your investment bowl is and designing a program that that's going to get you there, as opposed to, you know, what's the what's the highest possible return I'm going to get over the next month or six months? I mean, the world today is amazing in terms of what you can get. I mean you you know, when I was growing up it was, you know,

stocks and bonds. Now you know, there's all kinds of uh, you know real estate, you know, publicly traded, privately traded. Um, you know fractional assets. You know where you can buy fractions of real estate or fractions of a painting. And I mean we, we've just like the access to these things has become, you know, a little scary in all honesty, and that like you can really get into many different things that, uh, look, some of this I think is probably good, but some of it is is maybe stretching

a little too far. Bildna got me a fract of a Spanish hug. That was that's the best asset I've had. That was that was a good, yeah, alternative asset. But, George Um, you mentioned something earlier on that. I want

to sort of rewinding. Get back to and that is that you said you do think the Fed is going to be successful in taming inflation, but it's gonna take a while and I don't want to put you on the spot, I know, I know no one wants to predict that inflation is gonna peak at at this percent on this date, but I wonder how you're thinking about how that taming of inflation is going to play out. Um, you know, are we bound to sort of retest the market lows from June and maybe even set new lows?

And equities, uh, you know, our our bond is going to continue to suffer. You know what what's what's sort of the near future look like? Uh, to you? As far as, uh, what the Fed is doing to fight inflation? These are unique times and and I don't have h you know, I try to not make specific or term predictions because, you know, my view is the way to be successful is to have a long term perspective and to be focusing on the fundamentals that are driving the market.

I would say, you know, when we look at inflation, we look at the components of inflation. You know, there are some components, like housing, that have been driving housing. That driving the recent numbers up, and we know that's a slow moving component, right. So even if they even if they jacked up rates focus style, you know, overnight, it's gonna take time for that to flow through. The other thing is that, uh, you know, a lot of research shows that these increases really take time to impact

the market. So, you know, we're still, you know, we're still raising right now while the first increase is really filtering its way through. Something might happen very quickly in the in the financial markets, but in terms of like how these impact of consumer it takes a long time. So, you know, that's part of the reason I think it's gonna I mean, I personally think inflation may have peaked. So, however, I don't think it's gonna we're not. WE'RE NOT gonna

Kinda go back down to two percent overnight. I think it's gonna be. I think it's gonna Mut be a multi year UM multi year trend. I think, you know, it is gonna be. As long as you are raising rates, you know, and tightening financial conditions, it is going to be challenging for Equity Markets and likely mixing about markets. Right. Uh, you know, George, you you said something there too that

I find fascinating. You say it's such a unique environment, and I wonder as a as a quant, you know, you're so used to dealing with historical data sets, Um Um, and when you think of this environment we're on like the closest comparison, obviously, like you said, is the eighties. That that really high inflation and the Paul vocal fed really trying to fight it with with both fists Um.

But when you go back, you know, when you're running regressions and stuff and looking at at your available data, when you get to the nineties even and the eighties, you know you're so limited in the amount of data you're able to sift through. Does that does that make it harder for a quant or is it, you know, just a matter of like you know, for example, with trend following? Well, you don't really care what the fundamental, fundamental data was so much back then. If if the

trends doing this, we're gonna follow it. But you know what's what's it like for a quant dealing with unprecedented times, or at least times that are unprecedented? Is as far as the robust sets of data go. So one of the most rewarding parts of my job is getting to mentor young people in the field that you know, young portfolio managers and researchers on the quant side, and the thing I always tell them is, you know, remember you are an investor first and a quant second. So you

know you cannot blindly follow the data. You cannot Um. I mean it cannot just because of the historical relationship. You can't say we're going to use that. You have to think and understand what drove that and is there relevance? You know, one of the interesting thing things is when you're in the world of academia you want to build

a model to predict something new. You know, you design find a model and say, well, it can I make a prediction about some part of the world that no one's ever seen and and test whether the models right or not. From an investment perspective, I don't want my model to have to be encountering new scenarios that have never been tested. I want to make sure I've got

some relevant data. And you're right, it is very challenging the further back we go to be able to to be able to Um, to use data and say hey, I've got I've covered every possible scenario and that's really where you have to rely on traditional fundamental investment insights and you have to pair those two. Now that's a lot less relevant if you're running a high frequency strategy that holds stocks like you know, or a fraction of a day or a nanosecond. You know, you can you there.

You could be purely model driven, but if you're thinking longer term, you do. You really need to make sure that your your model is calibrated but also has been exposed to different types of regimes that that you might be in. And I don't know if you and your team put together projections in terms of what to expect from the Fed, for instance, for the remainder of this year. Does it look like we're going to get another seventy five basis point hike in November and a fifty basis

point hike in December? What are what are you expecting? So so we do? We do monitor kind of how futures are pricing the scenario, the different UH projected rate hikes. You know, personally, I think you know, there's there's an element of this which is mathematical, which is what is the rate that they need to obtain. I think there's also a psychological aspect to let people know that they're

very serious. Um. So, you know, we were. We do think that they're going to continue the pace of hikes really until they see inflation start to materially roll over. It looks like some areas have begun to slow but it's still it's just it's to the risk for them is that they become viewed it as less credible and I think that they're going to do what need to do.

So yeah, I mean, you know, while this isn't particularly a how it spew are you know, my personal view is I wouldn't be surprised to see another material rate just to kind of cement in the fact that they're so serious about gaming inflation, which, look, I think is good for everyone in the long term. At George, what they're gonna and I'm wondering if you've thought about this or studied it at all, but one of the big themes this year, uh and really recent years, has been

the options market. Inequities seems to be sort of the tail that's wagging the dog sometimes. You know, you have options expirations in the middle of the month and all of a sudden there's volatility either to the upside or the downside. That seems to be uh, completely related to, you know, the options gammaging and that sort of thing. Have you looked into that at all? And and and is, you know, not selling Jerry Seinfeld, but what's the deal

with that? You know, it's it's amazing and it really seemed to kind of pick up after, you know, after the lockdown, Um, that all of a sudden there's just a huge amount of interest in options and meme stocks. And Yeah, we have seen that. There are situations where, you know, the tailor is wagging the dog and some and some names and that option activity has just exploded. Um, you know, personally, I use the best indicator I use is what my, you know, teenage kids friends are asking me.

and Um, you know, a few years ago it was crypto and then now they're all interested in options. You know, they don't want trade stocks, they want to trade bonds. They're going right to options right Um, and it's like, okay, there's limited downside. I lose the premium, but there's no question that like all of a sudden, you know, the retail interest has just, you know, sky rocketing. Options I

think it's. I think it's coming down a little bit now, but it's just, you know, there's this you know, it's the it's the greater fuel theory. Right, I'm I'm I'm buying something because I just expect to sell it in a few days at a higher price. But there's no particular you know, it's I'm just doing that because markets are going up and you know, you know that's great as long as it works, but as soon as it stops working, all the people that have been drawn into

that change their view. Yeah, is it's sort of a dead end street to try to try to uh, find patterns there and trade off of them. You know, to the fundamental sort of went out in the long run. Um Metal. Look, fundamentals went out in the long run, but there's no question that there's hurting right. There's no question that when you know, some of these trends become established in certain names, they're going to start. They're they're gonna get there. It's not gonna play out overnight. They

can it can go on from like weeks to months. Um. Our view is that we tend to focus on longer term trends and we try to stay away we don't want to be, you know, we don't want to be the you know, the snail in front of the steam roller.

So like if we see, you know, a huge wave of retail interest coming a lot of time, we just want to we want to be patient and avoid that and let that lay out a little bit, because then we think there's a better opportunity for the types of information that we process, which tends to be a little bit more longer horizon in terms of our holdings. And George, we talked about Tina and Tia, but I'm wondering what you would recommend to somebody who would like to be

sitting in cash right now. Uh, you know, in all honesty, cash is not a bad place right now. Um, you know, obviously, uh, it's costing you something in terms of inflation. Um, you know, there are some us uh I bonds that that give you some reasonable inflation protection, but there's a lot of there's limits on how much you can buy of those. Um, cash is not a bad place to be in the short term, I mean inflation. It hurts you over long periods of time. It's less relevant over short periods of time.

But Um, okay, I've got a decent allocation to cash because, Um, you know, it's it's part of the providing downside protection. Well, George's fascinating stuff there. It's great to get your perspective. Um, we won't let you leave, though, until we get to our little gimmick tradition here on the show, which is the craziest things we've seen in markets this week. UH, Bill Donna, you know you started off on this podcast before you were a co host. Remember, your title was

chief crazy things correspondent. Yeah, it was really good stuff. I think we're gonna have to replace you with this guy, twiggy Sunday, from twitter. I assume that's assumed. That's his real name, real name? Definitely? Yeah, that definitely his real name. He's hit me with a bunch of crazy things this week, so I'm gonna I'm relying solely on him for mine. But let's start with you. And what's The craziest thing you've seen in markets? This one probably a lot of

people already know about. So if you spend any time on twitter, you probably saw this story. But the beyond meat, the CEO, sorry, their chief operating office beyond, Do you know this story? Wait, that wasn't like beyond meat, him, Iberico, him that you brought me. Was it you got? You got real hamp but beyond meat suspended its chief operating officer after he bit a man's nose. Why you didn't hear of this? I did, but I thought I dreamed it.

That really happened. No, this really happened. It's just so ironic. It's a it's a non Meat Company. He bit somebody's nose, someone in the nose. Yep, he's been suspended and it's just I mean, I love thinking about like these meat alternatives, as you know, but shares of beyond meat, I checked before, the podcasts are down seventies this year and I think partly it's because those alternatives are much more expensive, like buying for fake meat patties is much more expensive than

buying buying for hamburger patties. So and having a guy go to I'm biting people in the nose, one would assume I'm no quad George, but I would assume that's not good for a stock person in general. That's pretty good. Well, how's the nose? How's The continently? So this was in the stories. Apparently he literally actually bit off a piece of the nose. Come on, there was some at least some damage. Oh my gosh, that is that is truly a crazy thing. How about you, George? You see anything

crazy in markets recently? You know they's been all of these Um, you know, depreciating assets, with cars and boats in particular, there's a period of time that you know there was such a short demand, short supply, that you know you could take an old bunker that you know it was probably worth nothing and sell it more than you paid for it, even adjusting for inflation. So you know there were we had a few old cars around and, Um, you know, during this time I sold one or two

of them in a matter of days. That amazing. Um. Yeah, so maybe it's probably not the situation now, but I've heard it's the same ingod boats. You know that there's such short supply of boats and demand has held up very well that people have been able to sell boats, which the ultimates appreciating asset, for for a profit. I know, I was gonna say what's what's the old joke that the happiest days of a voter's life is the day they buy the boat, that the day they sell it?

I guess. Well, here's twiggies tweets to me, which offer us a great opportunity to play our little game. Show the prices precise here. Okay, Vildana, the most followed influencer on Tiktok is a guy named Kabi Lane him me, neither I. Uh. My kids make fun of me because I watched the reels on instagram and they say those are all just Tiktok's that are like three, three weeks old. So that's where I'm at on the TIKTOK. Yeah, yeah, so I'll probably get to this guy in a few,

few weeks. He'll be a hundred and forty nine, almost a hundred and fifty million tiktok followers for this guy. So he gets some sponsored posts to put something on Tiktok. So try to think what the highest payment he's gotten for a single post. Okay, so that's on one side. On the other side, twiggy sent me the golf bag and that's sorry. By the way, it was courtesy of Fortune magazine. They have an interesting profile on this guy

from tiktok. The other ones from Golf Digest. It was the bag that tiger used, his golf bag in the two thousand and five season, which was a good season for him. I think he won the British open and he won the masters. He was aged nine. So the question is, and George, I hate to inform you, but you're now contestant on the prices precise as well. And I ask you both. which do you think it was more valuable? One Post from this guy on Tiktok were tiger woods, two thousand and five golf bag, and give

me a number that you associate with the higher one. Well, I think the Kardashians something like two hundred or two hundred fifty thousand pro post sometimes, I think. So I'M gonna go with one fifty for for the guy and that the bag is worth more. Now remember this is this is the most he's ever been paid for a post. So that the top tick of this guy's influence your career. You'RE gonna go with not. Not, not like his average. Yeah, we don't know his mean. Okay, I think that you're

telling me that it's more than that. I'll go. I'll go with you think the bag is worth so then the then that makes a bag worth less, I think. Do you think the bags worth less, George? What do you think what's what's more valuable? One Post from this guy or Tiger's two thousand and five golf bag? You know there there's a lot, there's a lot of people that are obsessed with golf. When you get you get that there's only one bag from tiger right from that year.

So I'm going with that. Is more expensive, more expensive items. I would have gone with the golf bag as well, especially you never know, maybe there's some some free teas and balls in there somewhere, little tiny pencils. But this guy. Top payment for this guy's Tiktok was seven D and fifty thousand dollars for one post, for one single post, so more than the Kardashians. Yeah, I don't get it. That's like a mansion. Um. Tiger's bag thousand, which seems s low to me. George, I don't know. I would

have thought real assets right. I would have thought the real asset would have won. But, George, such a treat to catch up with you and hear your insights. We we really appreciate it, uh and we hope somebody will come back and do it again. Look for George on Tiktok and we're on Youtube now, by the way, the podcast is now on Youtube, so look for us there if you uh can't find us on all the other places.

I've also the track of everywhere. There's a lot of places. Yeah, yeah, but if you tube's your thing, maybe some people prefer Youtube. I don't know already. Thanks George. Thank George. What goes up. We'll be back next week, and so then you can find us on the Bloomberg terminal website and APP or wherever you get your podcasts. We love it if you took the time to rate and review the show on apple podcasts so more listeners can find us. And you

can find us on twitter. Follow me at Reag anonymous bill. Donna Hirich is at Bildonna Hirich. You can also follow Bloomberg podcasts at podcasts. What goes up is produced by Stacy Wang. Thanks for listening. See you next time.