38 Eric Balchunas – The Bogle Effect

[00:00:00] Pierre Daillie: Welcome to another episode of Raise Your Average. We’ve got an absolutely great guestand great show for you today. Mike Philbrick and Adam Butler from ReSolve Asset Management are here. Joining us today is Bloomberg’s Eric Balchunas to talk about all things ETFs and his latest book The Bogle Effect: How John Bogle and Vanguard Turned Wall Street Inside Out and Saved Investors Trillions. Eric is the senior ETF analyst at Bloomberg. He’s also the host of Trillions, one of the most popular podcasts, where he and Joel Weber, editor of Bloomberg Business Week, demystify and delight on the subject of how ETFs are transforming investing.

[00:00:41] Announcement/Disclaimer: The views and opinions expressed in this broadcast are those of the individual guest, and do not necessarily reflect the official policy or position of AdvisorAnalyst.com or of our guests. This broadcast is meant to be for informational purposes only. Nothing discussed in this broadcast is intended to be considered as advice.

[00:00:54] Pierre Daillie: Eric, welcome, and thank you so much for joining us on Raise Your Average. It’s great to see you again.

[00:01:05] Eric Balchunas: Yeah. Likewise. Thanks for having me. I’m excited.

[00:01:07] Pierre Daillie: Eric, by now, pretty much everyone in the investing world knows who you are. But just in case, tell us about your background the arc of your career, how you came to be the senior analyst on ETFs at Bloomberg.

Yeah.

[00:01:19] Eric Balchunas: It was not a straight path. I … I did, in college, write for the school paper at Rutgers. And so I got into journalism, majored in journalism. Didn’t really know what I want to do, but that’s when I was like, "Yeah, I like this enough." minored in economics. And naturally, getting … I actually applied to Bloomberg right out of college, but they didn’t take me. So I [laughs] got a job at an institutional investor.

And then after that I went to work on- in- on the PR side. I was getting fed all these … Like PR people like seem to be behind the keyhole. And I was just like curious, so I went to work at a PR firm. And then I did that for a couple years. And then I joined Bloomberg’s PR. And then right around 9/11, right after that, I moved to South Jersey. Ended up transferring to our data office in Princeton. And that’s all they did there.

So wasn’t really an ideal … So I mean I just stumbled into that, to be honest. And I spent 12 years in data. So I actually found myself adding value there as somebody who could talk and write around the data. And so I started talking and writing about ETFs. In 2008, I was assigned them. And I was like, "Wow, these things are pretty good. Like they’re … This is a really good vehicle. I should learn more about these." So I just owned that topic around here. And- and then I got recruited by our research group.

And so I like to say now I kinda do all three. I do their data. And then I do the writing. And then I have to … You have to do PR for yourself these days. So- so I do that. And so I use all three jobs in this one. But my job now is as a senior ETF analyst for our research department, which is like basically 350 people. And most of them do stocks and bonds. And so there’s a couple people who do other stuff, and I and my small team of five people do the other stuff. In our case, it’s ETFs. But we have some ESG people. We have some macro people. So there’s a lot of different ways to do research. And … So that’s it. That’s what I … That’s- that’s my story. [laughs]

[00:03:18] Adam Butler: Is it only ETFs, or is it sort of all ETPs? So you do, Yeah.

Exchange traded like credit oriented stuff and [crosstalk 00:03:28]-

[00:03:28] Eric Balchunas: Oh yeah.

Yeah. Yeah.

Exotic stuff? Yeah.

Yeah.

We like the exotic. There … It- it gets a lot of reads. People like to read about broken ETNs and stuff. So we definitely cover everything. Even in Europe, they got some crazy stuff over there. And yeah, there’s like-

Yeah.

… triple-leveraged nickel ETN. And Europe just closed it. [laughs] So we’ll cover anything. That’s one of the reasons I like covering ETFs is I have a short attention span. And this … they send you all over the place. ‘Cause you cover ETFs, you kinda have to cover everything. ‘Cause at- at this point, they track everything. Yeah, we’re- we actually enjoy the fact that it’s everything.

But we made this like traffic light system, which is like mov- movie ratings for ETFs so that people who are maybe more retail just steer towards the green light products. The yellow light’s maybe read a little more of the fine print. And then the red light’s unless you know what you’re doing, stay away from these.

So because of all the big tent has all these different products, we created a system specifically to address the wild and crazy sections of the ETF market. [laughs] ‘Cause they’re- they’re not all ETFs. And they’re not all normal. And they have a nasty surprise potential in cases. So yeah. We cover everything.

I’m actually

[00:04:43] Adam Butler: kinda fascinated with some of the drama that’s happening with one of the largest ETN issuers at the moment.

Sure.

I wonder if you could just bring us up to speed on this.

Yeah.

‘Cause it’s a really fascinating story.

[00:04:53] Eric Balchunas: So yeah, they … Barclays halted creations on VXX, which is the legendary VIX ETN. And this thing’s had a really just long life of … It’s … The whole VIX ETP category is- is just got a history of just weird stuff going on. Obviously, that would get a red light. But anyway, they halted creations, which basically breaks an ETF. It turns an ETF into a closed end fund ’cause you now cannot do arbitrage. So basically the time will just do what it does.

And the nav … just … The nav is calculated based on the futures. But the ETF doesn’t necessarily have … ‘Cause nobody can now sell that and buy this to close that because you cannot do new creations. So when you halt creations, you essentially rip the heart out of an ETF and why people love it. So I- I hate when they do that. They did this, apparently it was part of a structured note. They had to register for a certain amount of issuance of many structured notes, not just VXX, which is a note, by the way. And I guess they- they put in for five billion, but they sold 20. [laughs] So somebody- somebody done messed up. I’d [laughs] love to be a fly on the wall in that conversation. But that’s what happened.

And so there was almost like a clericer- clerical error. Somebody on Twitter has theorized that they do that on purpose just in case the market moves a certain direction. I don’t know. But apparently they had to pay everybody back to par, which was not good. So they lost $450 million in this situation. The guy was speculating that if you do this correctly you actually pay people back at par and you make money or something. [laughs] I don’t know. That’s a bit … that’s a bit next level conspiracy. But-

Wow.

I think it sounds like a clerical error and just somebody screwed up. And E … The ETF … And the- the VXX has another component; people love to short it. Because when you’re short VXX, you get to get the premium from selling VIX futures, which is … could be really good. Obviously, it suck … it’s like selling insurance. Sucks when the VIX goes up, but if it doesn’t, it can really be a nice like dollar bill in front of a steam roller type deal. And 50% of the shares were short. So when they halted creations, everybody’s like freaking out ’cause they’re like, "I gotta cover my short." So it made the price zoom up.

So it’s all kinds of messed up right now, so nobody really even knows what it’s worth, but it’s trading like 25% over the actual value of it. So this … You hate to see it. I don’t like it. I- I bashed Barclays in a note. And that’s why. But I did say that’s why it’s- it’s in the red light category, the red light district, if you will.

All right.

Anything that rolls futures-

Yeah.

… is red light. Let alone it’s an ETN. And it’s VIX. So it’s got like all kinds of stuff. But just rolling futures alone, to me, is … can be complicated to regular people. So we give all those reds.

Gotcha.

[00:07:39] Mike Philbrick: And- and you have precedent for the reds, whether it’s things that happen in the oil markets or VIX or whatever. It’s- it’s a challenging area to try and roll futures and tell everybody exactly how you’re gonna roll them all the time too. That’s a front running issue that happens.

[00:07:58] Eric Balchunas: Absolutely. Yeah. And I just learned they’re coming out with, Wednesday, they’ve got two new exactly like XIV and TVIX products coming out that are gonna be ETFs. But they’re gonna be front and second month futures. So this is … this is the juice. This is what people like. ‘Cause some of the products … I call it neut … They got neutered. UVXY is now only half exposed. But these are … these coming out are like really … they’re just like XIV and TVIX except they will be actively managed and have more flexibility around the rebalance. I won’t go into the details, but that should stop a total blowup or termination issue.

[affirmative].

But that- that won’t stop the fact that this … these things could be volatile and- and wild. And again, aut … this would automatically be red light. But they’re launching on Wednesday, for anybody who is into that kind of thing.

Are these

[00:08:45] Mike Philbrick: the volatility shares?

[00:08:47] Eric Balchunas: Yes.

Yeah.

You know them?

[00:08:49] Mike Philbrick: Yes.

You should have that guy on.

[crosstalk 00:08:51].

Stuart- Stuart Barton, right?

Yeah.

We have … we have him on Friday actually. He’s coming on Riffs.

Oh, perfect.

[00:08:55] Eric Balchunas: Yeah.

[crosstalk 00:08:57].

Look, if you go to Twitter and you put #XIV, people miss thing. There- there’s people who genuinely still tweet about it. They miss it. Even though it got a lot of flack for blowing up and whatever. It’s interesting. I looked at the total money XIV took in versus the assets it had at the end. It made more money for people than it lost. People were pulling money out as it went up, which you should do. So over its life-

[crosstalk 00:09:27].

… it actually generated more profits, even with the blowup at the end when it went down 90% in a day, which is epic. [laughs]

Yeah. We always say that

[00:09:35] Adam Butler: if you’re gonna use these types of products in the portfolio, they need to be used as a niche product. We always say if you’re gonna hold these short VIX, ETNs, or ETFs, in your portfolio, they should be held at a small or target exposure, and you should maintain that target exposure. So they’re gonna grow in size as they continue to generate returns on that roll yield, on rolling down the VIX. But you need to then actively manage that by- by selling units and redeploying them to the other parts of the portfolio so that you’re maintaining that target exposure, if you’re gonna … if you’re gonna toy with these at all, which, we probably shouldn’t recommend to just anybody.

But, … And none of this is advice. I guess I should probably say

[00:10:15] Eric Balchunas: that. But, There’s a product that- that they closed along with XIV that we actually thought was a better way to do this, which is ZIV, which was shorting the middle of the curve.

Yes.

Because even in the- the Volmageddon, it didn’t … it didn’t … it went down … I think it went down like 40%, 50%, which sounds horrible. But it survived it. It went back. It was almost like low volunteer inverse VIX, but nobody cared. People want the juice when it comes to this stuff. They want the as close to the flame as you can get it.

Same thing happened with USO. That was a front month oil future ETF that had to move to all parts of the curve. Nobody cares. The crowd that likes these likes juice. They want quick hits. They want … It’s like it’s pure gambling kinda crowd. And so I … But ultimately, for a portfolio, I- I thought ZIV wasn’t a bad allocation in a small chunk.

Yeah.

And you could almost set it and forget that one. But I might get email for that. But yeah, that- that was … Anyway people want the juice. That’s just the way it is.

[laughs]

I

[00:11:14] Mike Philbrick: love it. Let- let’s … We- we don’t have all day today-

Yeah.

… so let’s also jump into the topic of- of the day, … That was the topic of the day, but the longer term topic of the day, your new book and The Bogle Effect. And- and maybe just give everybody a sense of- of how you came to write it some of the people you talked to. Kinda wander through for us the culmination of the idea. You had some of this on the shelf, and you were like, "I gotta … I gotta … I gotta get this in print and- and, … and share this with the world." So take- take us through

[00:11:48] Eric Balchunas: that story.

Yeah. I had sat down with Bogle three times for over an hour each, and I recorded every interview. And it was in the five years before he passed away. … And in the last interview in particular was about six months before he passed away. And I remember leaving that interview say … thinking, "Man, he- he really just went far into the future." he was … is … And he also had some ki … He, … What was the word I’m looking for? He had more compromise than he had in the past.

Like and so I had some new data on his being softer on ETFs. He’s always been nasty about ETFs. And I had him talking about the future and where he thinks things are going. And so I took four hours of the Dictaphone interviews. And I was like, I had a chance to hang out with this guy. He had a huge impact." I see the data, track fund flows. I’m like, "Man, so much of the da … the flows are because of what this dude did back in the ’70s."

And so I wanted to trace the data and then pepper in the interview. And then I also realized that because Vanguard has started to get into the advisory world, that’s a whole interesting issue to me is the advisory world is beginning to feel the Vanguard effect. The funds world is feeling it now, or felt it. And now there’s the advisory world. There’s also the platform trading. Van- Vanguard went commission free before anybody else, and everybody followed.

And I really started to realize that this guy and the structure, the mutual ownership structure, to me, is the real change agent. Indexing was merely a byproduct. I think indexing needed Vanguard and its low fees more than Vanguard actually needed indexing. They were a perfect match once they matched up. But an 80 basis point index fund is just not gonna really sweep the nation. A five basis point index fund is.

And so it was this idea of why … how- how come nobody’s copied that structure? There’s no ec- economic incentive. Then why did he do it? And I just had … There was a lot of questions I had. And I thought I had an opportunity just to try to capture this moment, capture his personality, and just leave it out there for posterity.

And I- I wasn’t sure I would be the right guy to write this book. But I went to a tribute event for him that Women in ETFs asked me to speak at. And I get … I had a PowerPoint of my favorite quotes from those interviews. And the audience was like … Gus Sauter was there. He’s a former CIO of Vanguard. And like his assistant Mike Nolan. People who knew him well. And the reaction was good. People were like, "You really captured his vibe," or whatever.

And I was like, "All right, may- maybe I could write this." ‘Cause I can’t say I’ve been covering Vanguard since the ’80s or ’90s like some people have. But I guess I- I had the confidence then to do it. And then to help, because I am not the smartest guy, [laughs] my move is to interview smart people. So I interviewed 50 people to help fill in gaps in his life and in the data and with speculation about where the industry is. And so I interviewed people. I, … Some pretty big names. Like Buffet he replied to my email, which I was surprised, pretty quickly too. Wow.

… Michael Lewis, Cliff Asness. Cathie Wood.

Yeah.

I- I wanted to get people who might not have known him and/or who are active. And then I got people like Gus Sauter and Jack Norris, who was the head of Vanguard’s international for a long time. I couldn’t get anybody currently at Vanguard. They were a little … I don’t know. They weren’t really forthcoming. They helped me with data, but not that. And then I interviewed people like Jason Zweig of the Wall Street Journal. He was really good. I interviewed Bogle’s son. But that’s it. I didn’t go … I didn’t interview his wife or anything. I- I did little chunks of Bogle at home. But mostly it’s … mostly it’s just basically like it’s a chapter on how Vanguard got started.

Then there’s a chapter on why selling the index fund wasn’t that easy. The sell average in the ’70s and ’80s, especially when you’re outside of the system and you’re not paying any brokers, it’s not easy. A, people think, "I don’t want to average." And B, you’re not paying a broker. So who could even hear about it? There’s no internet.

So I was interested-

Yeah.

I looked at all the ways he was able to try to sell indexing. He had to get really creative. And there’s a chapter on, … I try to break down the- the elements that went into him, like his Great Depression upbringing, his heart. He was supposed to die like, at age 30. He had a bad heart. And I try to just fill in like how this- this freak of … not freak, force of nature, guy, happened, and this sort of quirky situation where somebody launches a fund company where they turn over all the profits to the funds and the investors. That makes no sense.

And then I look at the- the … how … I call it the fall and rise of active. I look at how active closet indexing, high-cost active, is probably going to slowly, over time, go extinct. But th- there’s all new forms of acting rising up that are largely ways to compliment cheap data as opposed to compete with it. And I thought … That’s a chapter I read about all the time. That was easy.

Like and then, … And I looked at things like the advisory world. I looked at behavior. I think he had a impact on behavior and like all that, not taking the bait and, the media makes you want to trade, don’t lis … There was a lot of stuff to pull apart there. I went into the Robinhood thing and just tried to get his- his voice on- on behavior.

And then there’s actually a chapter on him versus Vanguard. Because what I found interesting about him was he was kicked out [laughs] of both of the companies he ran and loved. And that was interesting. This sort of Saint Jack figure was so hard to work with that he got booted from his two companies against his will.

And so in the Vanguard case, that meant that for the 25 years since he was CEO, he would sit in this office and constantly dump on some of the products they had and the people. He was very cantankerous. And I wanted to explore that. Because I think he was really rigid and really puritan. And Vanguard as a company is a little more chill. They- they will go into some areas that might not be Boglian. And that started to get a gap, especially when they went to ETFs. And so that gap I explore a little bit too.

So I … The reason I- I wanted to capture a lot of this because I feel like we’re at this moment of time where this … it’s almost like Amazon and retail. Like this company really has had a profound effect. And if you’re an investor, it’s interesting to read about it. I- I look at some of the funds. I don’t go too much into how-to investing. It’s not as much that story. And then if you’re in the industry, I think it’s a good way to … It’s a good … I think you’ll find some nuggets there that are interesting, and ways to plan around it and whatnot. So I tried to write it for both a regular retail investor and someone in the industry. Whether I succeed, I don’t know.

Yeah. I- I think,

[00:18:41] Mike Philbrick: … I think you have. And- and can you elaborate a little bit on that emergent phenomenon that’s so unique that really caused or forced the creation of this unique set of circumstances for Bogle, Vanguard, the structure of the funds, the chairmanship and ownership of the funds, and the relationship? ‘Cause I really find that a fascinating story of- of just this- this cavalcade of stuff that happened to set in- in motion this emergent phenomenon, without which none of this may have

happened.

[00:19:13] Eric Balchunas: Yeah. At the end, I didn’t realize some of the … I dove deep into this. And there were three major serendipitous situations where it was almost like a 100,000 to 1 shot thing happening three times. And I thought, "Man, it almost feels like fat,"-

Yeah.

… was … wanted this to happen. Because the first one was he’s looking for a thesis to write in … at Princeton. So he’s just going to the library, and he’s paging through magazines, and he finds Fortune, and there’s an article on mutual funds in Boston there. But like I looked at the Time Magazine that month, and it was Conrad Hilton. And I was like, "What if he picked that one up? Would he have written about the hotel business?"

[laughs]

[00:19:52] Eric Balchunas: So that’s lucky. Just that’s how he decided to get into mutual funds. Picked up a magazine. [laughs]

So then he goes … gets [inaudible 00:19:59] Wellington. Does great. But they have problems ’cause they’re selling a balance fund in the go-go ’60s, and everybody’s going to the growth funds. It reminds me of the arc. Everybody was going to like the arc type growth funds, and he was selling like balanced. And nobody cared. And he said, "I was selling bagels, and everybody wanted donuts."

So he teamed up with this-

[laughs]

[00:20:17] Eric Balchunas: … Company called Thorndike, and they had a growth fund, like an arc fund. For a year or two, it worked well. But they ultimately turned the Wellington fund into almost all equity. And then obviously the ’70s hit and things got bad. And the Wellington fund went down the same as the market. And, he … This was his baby. And his boss left the whole company in his care. He gave the Thorndike people voting control. They got into a fight. Everybody was upset. Bear market. And so the Wellington people kicked him out. They said, "You’re fired. You gotta get out of here." From his own … From Wellington.

And they didn’t realize though-

[laughs]

… ’cause they weren’t mutual fund people, that he was still the chairman of the 11 funds. And as a mutual fund-

[laughs]

… is like a shell company, and you can fire and hire administrator, the investment advisor. So he had some leverage all the sudden, and he gets into this bifurcation period, is how they put it. And there was a stalemate between the two. And so the board of the fund said, "We gotta have a solution." And so the, … they went, and he came up with some ideas. And the only way to get it through the fund board, because there was three- three Thorndike people on it and eight like sort of Wellington friends. But he still had the three people on there.

So to get it through, he said, "How ’bout this? I’ll run a back office company. I’ll do the administration, transfer agency, the boring stuff that you don’t want to do, ’cause you guys like investing. We’ll hire … we’ll hire you as the investor, so you’re still gonna do what you love. And by the way, it’ll be mutually owned, and that way it’s not like me looking for some pay day or some- some thing."

So it was a way to get it past the board, save his job. That said, he had said he thought about this mutual concept in college. I can’t tell whether that’s true. There’s a lot of … Bogle kinda rewrote history a little bit. But I think the saving his job was the ultimate priority here. And by being mutual, it showed them that he wasn’t doing anything for his own profit. And that allowed the people to all vote unanimously that you can do this. And that back office company was Vanguard.

And so you could see that’s unheard of. Rarely do you have an investment advisor fighting with the funds like this. It’s … And what’s interesting is when he went out to search for a partner to be the equity partner, Thorndike was like the fifth on his list. He went to Capital Group, Franklin Funds. He was friendly with those guys.

And I think that if he had gone with Capital, they probably would’ve worked together better or Franklin. Just happened to pick this one company where, they were just very aggressive, and they didn’t know him that well. And I also wonder, what if the bear market in the ’70 wasn’t that bad? You could see the amount of things that would have to go … And who would … How many … how many situations do you have where the … a board of a company can actually not get rid of you ’cause you own the funds? That’s also weird.

So all … It’s … And then, obviously, after the company formed, he gets the idea for indexing from a journal. Again, reading- reading, … reading journals and magazines is like half … that’s where half his ideas came from. And the … when he set up the arrangement with Vanguard, he said, "I won’t manage money," which is one reason they signed off on it. He said if I launch an index fund, it’s not actually running money." So they call the first PM, a portfolio administrator. And that also was a quirky serendipitous event because he- he wasn’t allowed to run money but he was somehow able to get the board to buy it that he wasn’t.

So if you see those three things are really weird in- in a row. And there’s a couple other things. But I think those are the three main ones where you read it and you’re like, it- it’s just so weird. It’s not like he like came out of college saying, "I’m gonna change the world with," … It all … Circumstance was huge in this situation.

[00:23:59] Pierre Daillie: Yeah. In all three cases, he was solving a problem. He was … he was solving a problem so that things went his way. But his way turned out to be, like you said, a convergence of- of these three sort of serendipitous decisions and moments-

I will say that-

[00:24:18] Eric Balchunas: … that are just-

The-

It’s wild.

Yeah. The idea of turning over the profits to the funds and the investors you could say, "Okay he did this to save his job for the time being." Maybe he converts back to a for-profit LP or something. Or maybe he just says, "Enough with this. I have six small kids. I’ve gotta … I gotta make more money. I’ll go to Goldman." there were several times I think he could’ve just abandoned this.

But he really … Once he locked in on this concept of "Wait, this structure is going to change things, and we can make low-cost investing a thing." And that’s where I think he deserves some credit for- for actually seeing it through. Because I did read all his speeches in the early years, from the ’80s and ’90s, and it’s fascinating how laser focused he is on costs. Even in the ’80s, nobody was really that concerned about cost. It was Wall Street … Like the movie Wall … I- I actually compare that movie Wall Street … The same month it came out, he gives a Christmas party speech. And you’re just like … They’re two … they were two far apart worlds.

The world eventually turned and costs are a big deal now. But for decades, he was just out of step. And I think that vision deserves some credit, and the follow through. And the idea that you can actually build a company, manage people. A lot of people who are idealists or have a, … maybe have a circumstance that’s good for them, maybe they can’t manage or hire well. So there’s a lot that had to go into this.

And that’s why it’s, I think, work studying. So I think there’s a good business story in there. And I think he was probably … If anything, I think one of the takeaways is, make sure to treat your- your clients and customers well. If you get a … Maybe share a little of the profits with them. Or not … Vanguard went really crazy with that. But I think there’s probably some lessons in there because they built up a lot of trust and goodwill, I think, over those decades when nobody cared. And now they’re like solid. You … They can’t … they can’t keep the money away. [crosstalk 00:26:14].

So I think he- he was onto something. But he could also be really rigid and- and annoying to people. [laughs] He … One time his assistants brought him a … bought him a priest collar at this annual former assistant party he used to have. And they said, "Look, if you’re gonna act like this, you might as well look the part."

[laughing] That is awesome.

That’s cheeky.

That is … that is a bit cheeky, isn’t

[00:26:36] Mike Philbrick: it? Is that … is that maybe why no one else duplicated him for so long? Is that why no one bothered to- to mimic this for so many decades in the initial sort of ramping

[00:26:51] Eric Balchunas: up?

You mean the structure? So I-

Just-

[00:26:55] Mike Philbrick: just this dogged determination on cost as a … as a- a medium of- of a better

[00:27:01] Eric Balchunas: outcome.

I just think mo … Like in the book, I- I have a chapter trying to explain how mutual funds were just so utterly disrupted by this guy. And one of my premises is that they didn’t share any of the dollar fees, which grew crazy, especially in the ’90s. They were … Charging 1%, when you have a small amount of assets, I think is understandable, ’cause dollar-wise, it’s not that much. But when you have 30, 50, 60, 200 billion, a trillion, your 90 basis points is just … You’re just … the gravy’s flowing all over. And I think these companies could’ve done themselves a favor by sharing just a little bit.

But I … That’s human nature. And in the book, I write I- I would’ve done the same thing. I probably would’ve used the money to sponsor for sports stadium, hire a bunch of people, do the better Christmas party. I think most … That’s just human nature, especially maybe people going to Wall Street want to make money. He’s just unusual. That’s why, he’s worth a study. But I just think that’s- that’s why nobody’s done it.

But the-

[00:27:56] Eric Balchunas: Yeah.

… structure itself, there’s just no economic incentive to do that. And if you’re looking to set up an asset manager, I don’t know, no … You wouldn’t get any … I don’t know. It- it just … it’s kinda hard to for … to give up all the future profits. He made … he did fine.

I think also there’s a lesson here of like you can have a company and have pretty good salaries. But if the … You could still … It’s- it’s the ownership where people get filthy rich. Like Abigail Johnson is worth, I think, 16 billion. [affirmative].

But [crosstalk 00:28:37] her salary’s probably, what a couple million or something? Same thing with Vanguard, they get paid well. But no … There’s no ownership-

Yeah.

… explosion of tens of billions. That’s the difference I think with that. And somebody who’s gonna work 12 hours a day, six, seven days a week probably isn’t interested in turning all that over. I know I wouldn’t be.

Although, I will say, what I talk about in the book is now a lot of people have to, especially the mid and bigger companies. The small guys are probably in good shape. They have local relationships. They’re doing usually unique things. But the big, gigantic legacy mutual fund companies, they all now have to sell five basis point index funds or ETFs. Fidelity has free index funds. That’s almost … All their flows are there. So in a way, the mutual f- fund structure, it might not be something they use, but they’re almost governed by it at this point.

[00:29:29] Pierre Daillie: So what was the, … what was the reason he was so opposed to ETFs?

[00:29:35] Eric Balchunas: He- he thought ETFs just would tempt you to trade. They’re on an exchange. And the turnover numbers were really high. And he … He just … he looked at investing like planting a tree. You just … You- you have to wait. And the only way to enjoy compound interest is to keep your hands off the damn thing. And so he was real into that.

And it makes sense. If you show compound interest, it’s awesome what starts to happen. And an ETF would hurt that, he just thought that it was … There was no point in making funds trade. But I will say, even his closest admir- admirers and friends disagreed with him. They though the ETF did, … it made indexing more accessible. It- it distributed indexing more. And you can not trade if you want. I talk to a lot of advisors who are like, "I’m- I’m not tempted to trade."

That said, there are studies that if you look at a- a … say, at Fidelity or any account where they have ETFs and mutual funds, the ETFs tend to have shorter holding periods. So I think data backs him up a little.

But that doesn’t mean that some people aren’t holding a long-term. Some of the big institutional traders, I think, skew the- the trading numbers a little. So my metaphor for an ETF, it’s like a hotel bustling lobby. But there’s plenty of people like up in the rooms just quietly chilling out. And the two don’t bother … Th- they can all live there. It’s no problem. And I think he focused on the lobby a little too much. But that’s just my …

Like I said, at the beginning of the book, I’m like, "Look, this guy was pretty savage and pretty critical of everything in the financial world." So if you’re in that industry, you’re- you may feel judged. And I made sure to point out that I’m in ETFs. And he was … he was probably especially brutal towards my world. But I also can respect his view and then point out these other things.

The other thing he didn’t like about ETFs was the marketing. He thought they just got too crazy. And like when he came on our- our show, he thought, … HE brought up like the whiskey ETF. [laughs] That one in particular drove him crazy. And the, … He called it all like-

[laughs]

… nut cases and the lunatic fringe. And so he saw these different products. And- and in one of his last books, he said he felt like Dr. Frankenstein "What have I created," with the idea of the index fund being mutated and changed so much that he- he didn’t like the gimmickry and marketing of it. So trading and marketing were the two things he didn’t like. It’s hard to argue with him on those, but I think he might’ve cast … may have painted with too broad a brush on the whole industry. But I think he softened a little towards the end. I saw it. Each interview, as went on, the last one, he was the more … he was as conciliatory as I’ve ever seen him.

[00:32:20] Pierre Daillie: What do you think was behind the, becoming more

conciliatory?

[00:32:24] Eric Balchunas: Two things. One, I think, … I think … I don’t know if people sense it’s late in the day, life-wise, and they just start to melt a little more. Do you know what I mean? I don’t know. But in our last interview, he said, I probably would’ve done the same thing." And I know he didn’t totally mean it, but I could just see him getting more chill.

Other thing was when Gus Sauter pushed for ETFs at Vanguard in two … year 2000, and … ‘Cause Bogle had said no to Nate most in 1993 … The first ETF could’ve been launched by Vanguard in ’93. Imagine how big they’d be. Bogle said no. And then when Jack Brennan took over, he allowed Gus Sauter to look into this project. Gus said this is … the reason he’d want to do it was to protect the index mutual fund investors from short-term traders. So that way people weren’t diving in and out of the index fund and causing costs. They could just use the ETF share class or an ETF. And that was his … That’s what Gus Sauter told me his goal was, not distribution. Bogle seemed to think it was distribution for more.

And Gus said he caught up with Bogle in 2014-ish, and told him that. And he thought … He didn’t really know that. And I think maybe that helped was that … just knowing that the core of the need was to actually protect the fund investors, not to get another trillion dollars.

But I’m not … That’s just my sort of general speculation on that. But, … [laughs] And I think … I think sometimes people would, … like Rick Ferry and stuff, who hang out with him, they would try to explain to him like, "Hey, look, Vanguard ETFs don’t trade a lot. Schwab ETFs don’t," … Like it’s … Your … There are section … ETF’s a big tent. There are sections that are real calm. It’s like the zoo. There’s the calm animals, no biggie. And then there’s the crazy stuff. And I just think he … Like when I saw him, he would take out print-outs of … like the oil ETF. And he’d be like, "Look at this." And he’d show flow-weighted returns.

Arc would’ve driven him crazy, I think. I think he would’ve seen the a … fl … Asset weight of returns on that.

[laughs]

And he hated that.

Yeah.

He hated dollar-weighted returns. And- and … But I said to him like, "USO, like I don’t think anybody’s going in long-term." But he would show the data and say that this thing has lost like a billion dollars in the past four years. And I guess, based on that data, he’s right. But I- I think like the Vanguard ETF VTI, he’d have a whole different data. That thing would not have the same thing. So he would ply anti ETF by using really extreme examples, I think, sometimes. Maybe that’s one of my pushbacks.

But SPY, which is, I would say, a vanilla ETF, he would say, "That thing trades four … It turns over 4,000% a year." He’s … "And you’re … I think 3% is pushing the envelope." So he- he just … It was like … I don’t know. … I don’t know. He … And he also saw the New York Stock Exchange trading increase since the ’50s. And so it was all part of this like what’s happening.

So he wrote one book called Clash of the Cultures, which was about that. And so it wasn’t just ETFs. He just … You know how you get when you get old. Every … All the new stuff’s … I think there was a little of that "Get off my lawn," but I-

[laughs]

… put it all out there [crosstalk 00:35:43]. And I … and I have the other voices come in who push back. And I’m a little bit pushing back on the ETF. But I- I leave his stuff in there, and I try to let people just be their own jury on where they fall. But I try to be fair. I try to … It’s net positive on him, but I try to show, some of the places where people disagree with him. Like international, he wasn’t international. Most people disagree with him on that.

So there was definitely some- some areas where, you know, again, even his closest colleagues, like I just don’t agree with them. He was a man alone in some of those cases.

Yeah.

And I used to have this PowerPoint slide I did about five or six years ago, where I’d show all the Vanguard categories like smart beta international, ETFS, and then I put Bogle’s quote trashing all that. And then I show the flows. And I’m like Vanguard is so in the zone. Their- their flows are Bogle proof. Like even this guy who founded the company can’t stop the flows with his negative comments.

But that also shows you that investors aren’t all as pure as he is. They- they have different needs. They- they want to try to do better. Maybe they- they like to have a little spice. It’s okay. He was pretty rigid though. He was just de- definitely … Like he had a little bit of a puritan kind of vibe.

I love that

[00:37:02] Pierre Daillie: it’s, … that it’s you that wrote this book. You’re from the ETF world, and you’ve [laughs] taken- taken upon yourself to write about John Bogle, that he was the anti ETF guy. Coming from you, it’s coming from somebody who’s actually objective about-

Yeah. I- I think so.

… not only ETFs and mu … but mutual funds as well.

[00:37:21] Eric Balchunas: I- I think the low cost thing is great. But I also am acknowledging that, there’s different ways to do it. In fact, even his son John Bogle Jr. is an active manager.

Yeah.

Which is pretty cool, right? [laughs]

Yeah. [crosstalk 00:37:41].

So I

[00:37:41] Adam Butler: was curious to hear how you computed that number about how Bogle saved investors

[00:37:48] Eric Balchunas: trillions.

Yeah. Look, I- I … It’s a pretty blunt take, but it basically looks at the average asset-weighted fee of an active mutual fund over the past 45 years, which by the way, went up and up until- until indexing got popular, frankly, in about 2000. Then it starts to come down. And then I look at Vanguard’s fees that have gone down like this. So there’s like that alligator mouth. And I just multiplied that difference by the assets in Vanguard each of those years.

And then I added a couple other things. I added the Vanguard effect. ‘Cause let’s … Is Fidelity and BlackRock really launching five basis point funds if Vanguard is in the picture? Probably not. So I think he deserves credit for the effect.

And then that’s … I wrote a opinion piece about that. That gets you to about 900 billion or something like that. And I wrote an opinion piece that was like that, five years ago, trying to trace that out. Oh, there’s also turnover. Basically, active mutual funds probably have turnover of 50%. Vanguard’s two, three. Something like that. So those … that’s about 40 bips a year in cost. And so I did the same thing with that multiplication.

And then he was on TV, and somebody asked him about the article, and he actually said there’s also the- the saved money gets reinvested." So I did that for him. Even though I said, that’s getting a little … Maybe- maybe … Whatever. I … The whole time I’m trying to be like, "Okay, if we add this, that gets you another like 300 billion."

And then I, … I believe that was it. But I did go forward, and I said, "Look, there’s … Advisors have $26 trillion in assets." Vanguard is really working on disrupting them. And if- if they go, if advisors as a whole go from 1% to 30 bips over the next … Depends how much assets Vanguard has. They have 260 billion in their advisory business at five to 30 bips. And if you extrapolate that, you start to get to some more billions. And then it’s they could even go into private equity. Not sure they’d be the best private equity fund, but they could at least Walmartize some of that. They have. They partnered up with somebody.

The thing is, once you’re an advisor, you have to deal with other parts of the market. You can’t just be index funds. So they have to have private equity solution. They’re probably gonna have to, think about alts at some point. I will say, I think they’re gonna partner more than launch their own. So I think there’s probably opportunity for people to partner with them as- as a solution off the shelf for their advisors. They now have 1,000 certified financial planners there.

I think they- they … Aaron from the Philadelphia Inquirer, who I interviewed, I think said something like they have … OF all the advisors in the Philadelphia area, they have half.

[laughing] Wow.

[crosstalk 00:40:38]. It’s a lot. That’s incredible. Yeah.

As- as that grows, because it’s not just getting new clients. They hardly even need to do that. If you have Vanguard funds, you might just move ov … You might just … Lot of people who went to Vanguard went there on their own. They skipped advisors. But now they got more going on, they’re like, "I need help." So that’s where they’re getting most of their clients from. But that is a massive pool. So even without outsiders, they’re gonna grow that business. And they’re gonna need stuff off the shelf.

The 65-year-old who has, I don’t know, let’s say, 35 million, maybe they want private equity or alts to offset some of the stuff going on. So I think once you go in to be an advisor, you’re gonna have to deal with other parts. And so that was also exciting for book, which was that this is bigger than indexing. This is the structure being applied to all these different places. And it’s … A company with no profit motive is- is dangerous and, arguably, probably good net positive. I think it can go too far. But that’s … It’s not just limited to like an index mutual fund, clearly.

How does Jack

[00:41:42] Adam Butler: feel about

[00:41:42] Eric Balchunas: the advisory business?

Yeah. I- wo … He … So when I … When his book, Little Book of Common Sense, which I think is probably his best one, he says, "Look if- if advisors are out there trying to pick the next hot manager it’s probably not gonna work out." If they’re … if they’re in there like trying to keep your costs low and planning, tax work, that’s probably worth the money. So he was mixed.

Although I did ask him about this … This Rick Ferri debate that’s happening on Twitter all the time, where he drops these advisor bombs. He like just hits the third rail about like their fees, hourly. And I asked him about that in our last interview. And he said th- the advisor business is gonna have to get more professional. The idea that you get paid, I don’t know, more than a heart surgeon … Because, again, they’re also getting percentage. And as the assets have creeped up because the 60/40’s blown up, they get paid a lot of money. And so the hourly model is like just pay us like you would a lawyer. And it’s- it’s a lot. It could be 300 or 400 bucks, which sounds like crazy. But as a percentage of assets, that could be 3,000 or 4,000. So the hourly is actually, … There’s a movement trying to get the hourly going. And I understand it.

So Bogle thought they- they’d ultimately move to hourly or a fixed rate, just a fixed fee, ultimately. But then I talk to people like Michael Kitces, and he says, [negative]. I don’t think so. I think people," … I think it’s also people like paying a percentage fee because it just doesn’t come out of their checkbook. It’s- it just d … don’t feel it. But i- if you add up, at the end of the year, it’s like double if you did hourly. People don’t … I don’t know. There’s something psychological about that. So a lot of advisors, I think, are like feeling pretty safe. But I don’t know. We’ll see if it becomes a thing. I try to just lay it all out there. And the hourly’s still less than 1% of the whole industry. But the fee-based … The commission-based is now down to about a quarter. I think the fee-based is up to 71%, 72%. And that- that was like 50%, 10 years ago.

So my th … my theory is probably go fee-based fully, at some point, maybe a couple duals. And then maybe the next wave, maybe hourly will be a thing.

Wow.

I don’t know. Curious to get your guys’

thoughts.

[00:43:54] Mike Philbrick: Yeah. It’s- it’s a, … it’s a good question. I think that you’re- you’re right. I think that the- the other thing though is that these are the types of discussions that you have at the end of a decade-long period when 60/40 has massively outperformed and there is no differentiation within the advisor group, the dispersion’s been minimal. If you’re in that area, you’ve done well. If you’ve diversified, you’ve done poorly.

So here you have a- a space where if you’ve done the right thing for a portfolio over 30 to 40 years, i.e., being diversified in international markets, holding a consistent exposure to commodity markets for inflationary impulses, you’ve drastically underperformed, and probably don’t have as many clients or as big a book. But you have done or you have prescribed the right medicine. And so it’s- it’s a bit of a … it’s a bit of a dangerous scenario. And that ebb and flow will- will, I think …

The- the challenge is we’re in an area where skill is hard to suss out from luck. And then planning gets integrated with the investment decisions. And now you have this weird … Planning is largely a- a little bit more skillful, if you’re gonna think about those tax situations and put some thought in them and do some structuring and think ahead.

It’s more-

Yeah.

[00:45:19] Adam Butler: It’s- it’s easy to identify where the skill-

… where the skill

[00:45:22] Mike Philbrick: is. Yes.

Correct. And so then you have this conflation of, luck or good advice. These are hard things. You picked the best EM manager over the last 10 years, the best one. Not top fifth percentile, the best. They don’t outperform the bottom fifth percentile in the U.S. equity space. It’s not even close.

[00:45:43] Eric Balchunas: And so-

And so one … One thing on that, which is, I think … it just makes it tough for- for active, although I think there’s room for it I think a lot of advisors have just come to this resignation or conclusion that even if I bought that emerging markets manager, they- they can’t persist. There’s this idea that you kill it for 10 years, and then you’re likely to be at the bottom the next.

So the idea that persistence … ‘Cause that just … I think that everybody agrees when people outperform. I think where advisors run into resignation, if you will, which is why I think indexing is so popular, is they’re like, "Yeah, but they might not do it again." And … And I think they’re … It’s … I kinda get it, but it’s like what is a manager supposed to do? They just … they’re supposed to get excess return. They did it. Usually they will get some buyers. Usually there are people who will buy into a fund like that. But I think the … that 60/40 advisor is like over it in many ways.

Yeah.

And, yeah, maybe that 60/40 goes down for 10 years straight. [crosstalk

[00:46:42] Mike Philbrick: 00:46:43]-

Yeah. But let’s- let’s get into a 2000 to 2014-

Yeah. Yeah. Yeah.

Let’s get into the 1968-

You’re right.

… to 1982 environment where stocks and bonds coordinate and are correlated. The efficient frontier is a straight line, and you just eat shit all day for 12 years.

[laughs]

And let’s see how- how that goes on-

Yeah.

[00:47:01] Mike Philbrick: But I’m sure that the Bogle heads will buy through that whole thing. Th- there is, as you’ve stated, the flows came in ’08.

Yeah.

[00:47:10] Mike Philbrick: The flows just kept coming in on the Bogle side-

Yeah.

… on the Vanguard side. So listen, and that’s epic. If you can have that kind of faith and that kind of continuation of- of contribution to your- your policy portfolio, that’s awesome. You’re gonna do that [crosstalk 00:47:29]-

As long as you’re not building

[00:47:29] Adam Butler: on expectations that the … what we saw-

Yes.

… over the last 10 years is gonna

[00:47:33] Eric Balchunas: be the norm.

Correct.

[00:47:35] Mike Philbrick: Yeah.

Correct. So if you can have that discipline. And that’s probably one of the things that- that Bogle did best; he created a cult.

[affirmative].

And-

[00:47:42] Mike Philbrick: Yeah.

And- and they- they were die hard to that. And, from 2000 to 2012 was a little rough. And, from, ’08 to today it’s been pretty good.

[00:47:54] Eric Balchunas: [laughing]

Yeah. No, this is definitely, heightened because of the market. That said I think … I think one thing you will see, and we talked about this when we … on … where I was on your ReSolve podcast is that I think you will see things that can provide diversification, somewhat meet the Vanguard effect. And so people can try to have their cake and eat it too.

Agreed. [affirmative].

But as we said, a [crosstalk 00:48:20] is never lowering their fees, and that’s that. And there will always be room for those kind of companies. But I think a run of the mill alt maker or a commodity strategist, there’s probably room to lower cost or be the low-cost provider, or one of them, for something that is providing diversification.

Vanguard does have a market mutual fund, I believe, or a couple alts. But they’re … I don’t think their … I don’t think their heart’s in it. But, … Because, as we said, in 2000, small cap value was great. But there is a Vanguard small cap value ETF VBR.

Yep.

So some of these areas, you … the … you can find in ETF format, just not- not all of them. And nothing- nothing beyond just beta, what … [inaudible 00:49:12] market is.

[crosstalk 00:49:13].

You’re not gonna get like Vanguard … They do have active funds. But anyway, that’s … I- I … Yeah. I agree with you. I- I do think there’s … There is a cult-like aspect. The Bogle heads are [crosstalk 00:49:25] they’re almost like we call it missionaries.

Yeah.

[00:49:27] Mike Philbrick: But it’s what makes it hard the- the VR- VBR. VBR, yeah.

I would imagine has largely been excluded from most of the 60/40-ites. Oh yeah.

It- it’s- it’s largely been excluded. Now, if we’d gone back-

Yeah.

… to 2000, it hadn’t been largely excluded.

So there- there is still this- this performance chasing that can- can heighten fund flows across whatever. Whe- whether it’s-

Yeah.

… BlackRock or Vanguard. I- I think something that- that you’ve reiterated many times is, hey, listen, in the absence of value, price matters. And the lowest cost producer in the absence of value is the winner.

Yes. Yes. Yes.

And- and they … and they absolutely commoditized beta, or-

Yes.

[crosstalk 00:50:13]. And so now when-

Yes.

So now you have to think of what’s my beta mix, which is a whole-

Yeah.

… different … Not beta max. It’s my beta mix.

[laughs]

And there’s a whole different sort of mindset to think about as an advisor who’s advising on, portfolios because the- the commodity itself of betas is, for lack of a better word, free.

[00:50:33] Eric Balchunas: Yeah.

Yeah. And like we said before people who shop at Amazon, which is almost all of us, we don’t get everything from Amazon.

We definitely go, and certainly things we pay up for. I think that- that’ll be the same. My metaphor I used in the book is the airline industry, where you have three carriers with 75% market share, and then you have 25% which is doing unique things, Hawaiian Airlines or whatever, private jets. I just think a lot of industries move to that- that sort of model of a big three or four and then niche providers on the outside. I think that’s where we’re going.

[00:51:07] Mike Philbrick: Now, I- I know we’re a little bit time-constrained today, so I want to respect that. Is there anything that’s a hot topic on your list of things to cover on the book that we haven’t asked about, Eric? ‘Cause I want to make sure that we hit the high points in your mind.

[00:51:20] Eric Balchunas: No, not really. I think one of the things that I try to explore in the book is the fall and rise of active. And I think as we talked about if Vanguard is the core, people will be looking for things that are different. And this idea of complementing them and … will be a lot, I think, easier than competing. As you said, it’d be like trying to compete against Amazon and you’re this small startup. [laughs] it’s gonna be tough.

So that’s a really … I think part of the book where I- I think I try to progress this I … ‘Cause you think … Part of it is okay, Bogle, Vanguard, when I was writing the book, I’m like, "Okay, people know him. It’s low cost indexing. Wow, whatever." So I worked hard to … not only with those 50 voices, but with just how the ripple effects are in trading. And they’re in how active is changing and the portfolios are changing how index has been involved to become active. The index is now a vehicle which you can serve active. And I think that’s something I just want to stress too to people listening is that I tried my hardest.

I also tried to make it not boring. We’re talking mutual funds, which is like CSPAN to most people. So I- I went above and beyond to try to spice it up and to look at the impact going forward of this company. I look at the international markets and what’s going on over there, and just try to take you through all these little wor- worlds like a tour guide. And I’m explaining the world to you at the same time I’m explaining Vanguard’s effect in that world or low cost effect in that world. And that was really my goal.

Again, whether I pulled it off or not. But I- I left it all on the field. But I think that active thing is probably something not in other books on this. They’re probably just "Oh, active’s awful and Vanguard’s better," and they leave it at that. But what I’m noticing in the flows is people are looking for active. They’re just looking for it to be complementary. I think it’s … that … I think we’re gonna see more of that, which is why I think themes, and as silly as they are, or arc, I think they- they have … they’re in a … they’re in a lane that’s- that’s gonna surprise people. Because as long as you’re not in Vanguard’s domain and you provide something that’s complementary, even entertaining I- I just think that’s- that’s gonna have a bright future.

And it’s- it’s ironic that, Cathie Wood is benefiting from John Bogle’s work and thematic ETFs, which drove him crazy-

Yeah.

… are actually benefiting from the Bogle effect. So there’s a lot of ironies in the book, especially also that Bogle helped launch some of these ETFs, like the value ETF, the growth. He had a theme ETF. And then, later in life, he just shits on all of them.

[laughing]

So he would … he would constantly dump on stuff that he innovated on. So I … He was pretty equal opportunity. And he blames himself. He’s not … He’s "I did it, and I was an idiot for doing it." And, .. But I think … Again, I think, … That’s why like the effect of it isn’t just low cost. It’s once you take over a big chunk of the portfolio, things move. Active has to get more active. And anyway, I just wanted to share that just to sort of-

Yeah.

… say that there’s other things in the book besides like the index fund or whatever. I worked hard-

[crosstalk 00:54:39]-

… to not make it just

[00:54:39] Mike Philbrick: that.

Don’t be a closet indexer. Be significantly different. Offer something, a value proposition that is way outside the commoditization [crosstalk 00:54:47]-

[00:54:47] Eric Balchunas: Exactly. Just pretend there’s a Walmart in town, and you … What can-

Yeah.

Yeah.

… they not get at Walmart?

That’s-

[00:54:52] Mike Philbrick: that’s a pretty good place to wrap. What do you guys think?

[00:54:54] Pierre Daillie: I’m looking forward to reading it. When- when does it come out, and … for

sale?

[00:54:58] Eric Balchunas: It’s for sale now on Amazon. It comes out April 26th.

Oh, you can pre-order it. [crosstalk 00:55:03]-

So if you … if you order it now, you probably get it at the end of … yeah. But, yeah, it’s not out for a month. It’s ranking high in baseball biographies, which I have no idea how it got in there. My guess is … ‘Cause I- I thought about it. I think … I think the reason it made it into baseball biographies in terms of like top new releases is that I com … I compare his focus on cost to saver metrics. I also … I- I use Babe Ruth when I’m talking about arc. [inaudible 00:55:31] Babe Ruth [crosstalk 00:55:32] which is like swing for the fences. And then I have this metaphor on index investing, which is like locking in a double.

So I- I have a couple baseball met … Maybe the algo searched the book and there was enough [crosstalk 00:55:43]-

And you’ve got Michael Lewis, right? And you’ve got … You-

I don’t know. Anyway.

[crosstalk 00:55:48].

[00:55:47] Mike Philbrick: Once you do the … once you do the-

Yeah. [laughs]

… saver thing, it’s it’s over, man. That-

Yeah. It’s over.

… that group just descends on it. They’re- they’ll-

[00:55:53] Eric Balchunas: they’ll digest that in a minute.

But, yeah, no, I’m ahead of Paul O’Neal. So I got that going for me.

[laughs]

Remember that guy from the Yankees?

Epic.

Yeah. I think he wrote a biography. So I’m excited [crosstalk 00:56:04]. [laughing] At least for now. Maybe next week he’ll over take it. Anyway.

The best is

[00:56:08] Mike Philbrick: the- the I’m the CSPAN of, [laughing]

Mutual funds are the CSPAN

[00:56:12] Eric Balchunas: of, [crosstalk 00:56:14]-

They are. The word just makes people fall asleep. They get drowsy.

[laughing] True story. True story.

So-

[00:56:20] Mike Philbrick: Where else can they find you? They can find the-

… Bogle Effect on Amazon? And where else can they find,

Eric?

[00:56:27] Eric Balchunas: Twitter. I’m active on there, @EricBalchunas. Yep.

Trillions, which is on podcast. That’s free. We … Every … twice a month, I do that. And then on … if you Google ETF IQ, I do a TV show that’s once a week, and they have the clips there if you wanted to watch something. So those are free ways. If you have a terminal, obviously, you can go to bi, space, ETF go, to see our research. But those are the … are the basically no-cost ways to get me.

Awesome. Fantastic.

Okay.

[crosstalk 00:56:55].

Thank you for the invite.