January 2, 2026 • 28 mins
Katie and Matt answer listener questions about performative earnings calls, hedge funds as a calling, favorite quotes, proxy advisers, ETF mechanics, sports betting market structure, 10b5-1 plans and the thrill of horse dancing.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:08):
Here we are Friday, January second, twenty twenty, recording this, live,
recording this, live recording this on I don't know, December
seventeenth days. Wow, it's been it's been an eventful two weeks.
I know, between when we recorded this and when you're
listening to it.
Speaker 3 (00:26):
Ominous, very ominous.
Speaker 2 (00:28):
Yeah, I'm going to regret this so.
Speaker 3 (00:31):
Much, probably just given the pace of everything that's happening
all at once. But hopefully our answers to these questions
won't have changed too much in two weeks. Hopefully, unless
something amazing happens.
Speaker 2 (00:43):
Hello, and welcome to the Money Stuff Podcast here, weekly
podcasts where we talk about stuff related to money. I'm
Matt Levine, and I read the Moneys Doft column for
Bloomberg Opinion.
Speaker 3 (00:54):
And I'm Katie Greifeld, a reporter for Bloomberg News and
an anchor for Bloomberg Television.
Speaker 2 (01:00):
Not pretending to sing the mail bag thing, but today
is a mailbag episode.
Speaker 1 (01:04):
Yeah, mail bag, Thank you, Katie, mail bag nail bag.
Speaker 2 (01:23):
Yeah, let's get into it.
Speaker 3 (01:24):
We've got some good ones. We're starting off strong with
a question from Christopher, who asks why do analysts ask
questions on earnings calls? I get why they ask them.
In private meetings with the company, they then get exclusive
access to body language information, but on public earnings calls
they get their information only to have it simultaneously shared
(01:44):
with everyone else. What do they get out of that?
Speaker 2 (01:47):
It's a good question. So basically all of the questions
on earnings calls are asked by sales ad analysts whose
job is not to buy stocks that will then go
up vote, rather to publish research reports for their customers
saying what's thots will go up and so like, broadly speaking,
the research analysts are in a business of like providing
public ish goods, right, Like, they're not getting paid directly
(02:10):
for picking stocks. What they're doing is they're providing some
holistic set of services to investor clients that make the
investor clients think fondly about them and about their banks.
And then the investor clients, because of those fond feelings,
will either you know, in the US, they'll trade with
the banks and pay them commissions and in Europe they'll
pay directly for research. And so what that means is
(02:31):
that like anything that the research analyst does that like
makes investors like them is productive, and providing public goods
by asking good questions on the earnings call is reasonably productive. Also,
if you ask good questions on the earnings call, then
people will hear you and think, ooh, I like that analyst,
and that will lead to things like maybe them paying
(02:52):
for your research. It will also lead to maybe the
company thinking you're good and liking you, and therefore one
you know, having private meetings with you where they tell
you stuff or give you a body language that allows
you to be more informed and too.
Speaker 3 (03:06):
Like.
Speaker 2 (03:06):
Another job of research analysts is brokering meetings between companies
and investors, right, so they do corporate access where you know,
when a company is doing a non deal ROACHO or
a conference or whatever, they're meeting with investors and those
slots are kind of like arranged by the banks by
the research analysts, and if you are in good favor
with the company, then you get better access to those
things and you can do more for your clients. So
(03:29):
as part of like the broad set of services they provide,
asking good questions in a very public place on ear
news callus it's a useful thing to do.
Speaker 3 (03:38):
It sounds a bit performative. But I hear it.
Speaker 2 (03:40):
Yeah, it's like a market Like being a research analyst
is in some sense a marketing job, right, and so
like being good in public is good marketing, I should say,
also like it is an analytical job, and you are
building your own model, and like if you have differentiated
views or differentiated skills and you ask a good question
that informs your model, other people will get the answer
(04:01):
to the question, but they don't have the same model,
they don't have the same skills, right, So you could
still get differentiated information or analysis by asking a question
that everyone can hear. But a lot of what you're
doing is letting everyone here smar you are.
Speaker 3 (04:14):
Yeah, you're sort of speaking to something that I was
wondering when reading this question, is whether there's satisfaction in
asking like a really good question on the earnings call
that maybe gets something more candid from the executives on
the call.
Speaker 2 (04:31):
You're a television anchor, Sure you know the answer to
this question?
Speaker 3 (04:34):
Well, yeah, I guess. I mean, if someone asked a
really good question on an earnings call, I would probably
highlight it and also steal it from myself.
Speaker 2 (04:41):
Yeah, But also, just like, isn't there satisfaction.
Speaker 3 (04:44):
In asking a really good question. Yeah, that's true. Or
like the journalists at the FED press conference, right, yeah.
Speaker 2 (04:52):
Right, same thing. The journalists of the FED Press conference.
Any answer to their question. Every other journalists of that
conference can write down, right, yes, but you ask a
good question, then you're like, oh, you impress your colleagues,
you impress the FED. Yeah, you impress your readers.
Speaker 3 (05:08):
Yeah about or you tick off the FED something else.
Something else I also wonder about is like whether I
wonder this too about the journalists in the room at
the FED Press conference, is whether there's any sort of
sense that, like this is a team sport, that we're
trying to get something out of these people that we
might not have otherwise, or whether everyone is asking their
(05:31):
own individual questions and not necessarily building on the question
that was asked before you.
Speaker 2 (05:36):
I mean, surely it's some combination, right, Like, surely you
want to distinguish yourself, but also, like someone else draws
some blood, you move in for the killer. Right, Yeah,
probably somewhat similar.
Speaker 3 (05:48):
Good question, Christopher. This next question, Yeah, who wants to
read it?
Speaker 2 (05:59):
It?
Speaker 1 (05:59):
Gover?
Speaker 2 (06:00):
What idiotic book is coming from senior hedge fund leaders?
It's asset management? The entire point is to care about
making few money. The people that do get hired who
don't care about money are weirdos who create ten billion
dollars Ponzi schemes. Jane Street hiring Mathcamp weirdos rather than
the cross players is a literal criminal conspiracy. Anthropic is
(06:20):
a weird cult, and it's specifically because of how weird
and abnormal that the Open Ai board was that they
tried to destroy the company because it released the successful product.
We need more normal people in these companies and less
ethereal PhDs that don't care buying a house, a plane,
or a yacht, don't care about buying your household. Companies
should have corporate policies that require employees over the age
(06:40):
of twenty five to not have roommates. We get better
products and better corporate decisions if people aren't living in
cult houses but rather have to deal with the real
housing market and do things like buy groceries and pick furniture.
If hedge fund leadership wants to only hire socialists, then
they should go lead a university rather than managing financial assets.
For two and twenty or more. I love this question,
any of this question. I love this rant. I don't
(07:04):
even know what prompted it, but I have written about
this that I believe, and I think I am not
alone in this, that like a lot of the most
successful people in the financial industry are deep down motivated
by puzzle solving and intellectual curiosity rather than the pursuit
of money. And I just think that this is an
(07:26):
empirical fact that might not be true, but it seems
to be true, right, Like you could imagine that the
thing that would make you the best at managing hedge
fund was like really liking money a lot, But it
turns out that solving puzzles is really good for managing money.
But Graham is right that there are weirdnesses there, and
that like, if you get into this business because you
(07:46):
really like solving puzzles, like some number of those people
do end up committing huge frauds. And there is some
possibility that a world of nice, sociable, moderately intelligent lacrosse
players would commit less fraud and have fewer blow ups
and Ponzi schemes than one where where the weirds are
(08:10):
running the nuts funds. But what do you do about that? Right?
You can't. It's a fiercely competitive business, and if you
are just trying to trade stocks with like friendly sociability,
you'll get run over by the math kids. And so,
you know, the competition leads to this strange place where
the people who are less motivated by money make the
most money, and then some of them are weird. Also,
(08:31):
I should say, like I'm being sympathetic to his question,
but fundamentally my sympathies are with the puzzle people, right,
I mean, I love the puzzle people, and I think
it is on balance good for the world and also
very pleasing aesthetically that the puzzle people are in charge
of finance. But it's a real you know, this is
like it goes back to Liar's Poker. Right. This transition
(08:52):
from the sort of sociable, essentially marketing oriented people to
math puzzle people is one that has called attention on
Wall Street for decades.
Speaker 3 (09:01):
H Great Graham, really good stuff. Okay, here's Sean that
seems to love certain quotes because they're graded explaining a
moment mechanism, trend, et cetera. For example, quote, it would
be wise to view any investing in open Ai Global
LLC in the spirit of a donation. End quote hidden
poorly internally labeled Fiat at account eight million?
Speaker 2 (09:25):
Do you eight billion?
Speaker 3 (09:26):
Eight billion?
Speaker 2 (09:27):
She's a little till there.
Speaker 3 (09:28):
In front of it because it.
Speaker 2 (09:30):
Shan beckman Fried's famous spreadsheet famous.
Speaker 3 (09:33):
Do you have an all time favorite?
Speaker 2 (09:35):
Do I have an all time favorite quote? So I
almost said this in the last answer, Samuel Johnson says,
there are a few ways in which a man can
be more innocently employed than in getting money. I think
about that a lot. Yeah, people regularly get mad at
Wall Street and fanciers and people trying to make a buck,
(09:55):
and I often think it's better than almost all of
the alternatives. People who are motivated power or revenge or
even a sense of mission, we're often doing worse things
than the people are just out there trying to make
a buck or eight billion bucks. So that's a that's
a you know, an all time favorite quote of mine.
(10:16):
Another favorite quote of mine is, you know, Warren Buffett
has a lot of famous quotes and his famous shareholder letters.
Speaker 3 (10:23):
Yeah, probably quoted a.
Speaker 2 (10:24):
Lot of them. The one that I like them most
is at some point he's like talking trash about gold
as an investment, right, and he's like, you can invest
I think the number was like the market cap with
the SMP. He's like, you can put you know, thirty
two trillion dollars into the into the SMP. You put
it the money into the SMP, you get all the
productive capacity of America, all the companies, all the corporate profits,
all right, all the business. Or you can put that
(10:46):
amount of money into a cube of gold that is
like yay hi by yay long, by yay wide. And
he's like, and then it'll just sit there. You can
fundle the cube, but it will not respond.
Speaker 3 (10:57):
It will not spin off any any dividends anything like that,
no cash flow.
Speaker 2 (11:01):
I just think of Warren Buffett's saying, you can fundle
the cube, but it will not respond.
Speaker 3 (11:18):
Okay. From ends a question on ISS slash Glass Lewis
and the voting discussion. Isn't this the easiest way for
a billionaire to gain a huge influence on companies? Buy
Iss or Glass Lewis and steal the voting in one
in the direction you want? Would this work?
Speaker 2 (11:34):
I don't know, you know, and Glass Lewis people, people
are really mad at Iss, Glass List or the proxy advisory.
Speaker 3 (11:41):
Firms, as discussed on this pod ages ago.
Speaker 2 (11:45):
Now I speak only a few days before we recorded
this pod, Donald Trump put out an executive order basically
saying we don't like the proxy advisors. And there's this
notion that the proxy advisors are in charge of all
shareholder voting. Right, People like a conspira like this where
it's like two foreign owned companies control how all American
(12:06):
public companies are run. Right. The idea is that Iss
and Glass Lewis tell the shareholders how to vote, and
then the shareholders vote that way, and then the companies
have to do what they say. This is exaggerating in
a lot of ways, one of which is that like
Iss and Glass Lewis have their most influence in the
least important things like there are shareholder votes on you know,
there are hundreds a year on non binding proposals that
(12:29):
companies should write reports about ESG stuff or whatever, and there. Yeah,
a lot of shareholders do defer to Iss and Glass
Lewis because it just doesn't matter to them that much.
Iss and Glass Lewis have meaningful influence on things like
contested merger situations and proxy fights, where like there are
real economic stakes, but they're a lot of asset managers
(12:49):
are making their own decisions because they have more at stake,
whereas the stuff where the Iss and Glass Lewis have
the most impact is where people have the least at stake.
But also it's just like they have no authority. They're
just persuasive, right, They're just like useful, and if they
stop being useful, then people would stop paying attention to them.
So I think if you bought Iss and glass Lewis
and use them to advance an agenda, first of all,
(13:11):
you can only do so much to advance the agenda
because it's only like share all theer voting. And secondly,
if you did it too obviously, then people would get
sick of you, and it can't be that hard to
start another one.
Speaker 3 (13:21):
That's the thing like in practice, if a controversial billionaires,
which is Elon Musk, bought either Iss or Glass Lewis,
I feel like like whatever recommendation they make, people just
know it's biased.
Speaker 2 (13:33):
Yeah, well you know everyone's like, oh it's biased. Now
it is biased. They have some priors that happened to
more or less aligned with the views of a lot
of investment managers. Because the investment manager are the customers,
and they're trying to run a business where people pay
for their advice. But yeah, like you know, their bias
(13:55):
is kind of aligned with their customers, and if you
change that, then the customers would go somewhere else.
Speaker 3 (13:59):
Yeah, now we have a question from it's like the
ETF segment. I don't really know how to answer this,
but Leo asks, I feel like you could just have
every buy in ETF be a creation and every cell
be a redemption routed to the issuer and remove the
possibility of ETF's trading outside of NAV. Why bother being
(14:20):
able to trade them with other traders directly at.
Speaker 2 (14:22):
All, because they're exchange traded.
Speaker 3 (14:24):
Yeah, that's the thing. They trade throughout the day.
Speaker 2 (14:26):
Right. An instrument where you could only create and redeem
with the issuer is just.
Speaker 3 (14:31):
The mutual fund yeah right, Yeah.
Speaker 2 (14:33):
And mutual funds have a couple of disadvantages. One is
that it's just an administrative cost to the issue always
having to trade with you, rather than you can trade
on the exchange with anyone who wants to two. The
issue wants to trade with you at NAV, but the
NAV changes throughout the day, and so there's a cost
in just updating that, whereas with an ETF you're trading
(14:55):
at the market price, and so it just kind of
takes care of itself. Nobody takes care of itself with
arbitreasure is making sure the price is close to the
nav but like the issuer doesn't have to worry about that, Like,
it's much more administratively simple. Also though, like a lot
of the point of the ETF thing is that if
you're doing trades with the issue, the way ETFs worked
(15:16):
is that I gave the issuer money and it gave
me back shares. That is a taxable trade that creates
tax liabilities for the other holders of the ETF of
the fund right, because when the issue is selling stock
for cash, it creates a tax realization event. The trick
(15:39):
of ETFs is that they never trade.
Speaker 3 (15:41):
For cash famously.
Speaker 2 (15:43):
Famously, and so when I trade with you on the
exchange and we're not trading with the issure, there's no
tax realization event for the ATF. When there are creations,
they're not like me going to the ETF with cash
and getting my shares or vice versa. They're otherwise participants
handing in shares and getting back of the ETF. So
there's an in kind transaction and no tax event. Yeah,
(16:04):
and so it is like, really important to the ETF
is that there are no cash trades with the ETF,
so there are no taxes, and they deffer taxes for
as long as you hold the fund.
Speaker 3 (16:13):
So doing this would remove all the things that make
an ets.
Speaker 2 (16:16):
This is just a mutual fund.
Speaker 3 (16:17):
Yeah.
Speaker 2 (16:18):
The question why would you why can't you just do
every trade with the issuer? Is like, why can't an
etfpm mutual fund? And the answer is, we've discovered a
better technology.
Speaker 3 (16:26):
Yeah, why can't a mule be a horse? A lot
of reasons. This is a really great question from Oscar.
Why are there no meme ETFs? We have meme stocks
and meme stock ETFs, but there is no meme ETF
in otherwise completely boring ETF holding boring assets that nevertheless
drums up huge retail excitement. It doesn't have to trade
(16:47):
at some dune premium, just build up a big NAV.
I read this a few times and then I understood
what Oscar was asking because my immediate reaction was, there
are ETFs that hold meme stocks, but he's talking about
why hasn't an ETF t taken off in the same
way that a meme stock has, like display meme like characteristics.
Is how I understood it.
Speaker 2 (17:07):
And the answer is because of the ARP. Right. The
answer is because if I buy an ETF on the
stock exchange, I'm buying it from a market maker who
is probably selling me shares of the ETF and buying
the underlying stock, right and vice versa. If I'm selling,
they'll buy the ETF, they can sell the underlying stock,
and so if the values get out of line, then
(17:29):
they'll just do that arbitrage. Right. If an ETF is
trading it well above its net acid value, then market
makers are going to sell the ETF and buy the
underlying shares and close the ARP and do creations and
redemptions to close the APP. So it can't really trade
it much of a premium. And then the question is
it's not trading at a premium, it would just pull
up a big nav meme stock can be fairly small, right,
(17:52):
people can buy the memestock and it'll go up. And
a meme ETF that held a lot of shares would
have to push the prices of all of the shares
in order to go to the moon, right, Like, you
can't have a premium, not sustainably, and so the only
way for it to like go to the moon is
to push out the prices of all the underlying shares.
(18:12):
So you can imagine like a small ETF with like
small Memei stocks doing that, But it's not the.
Speaker 3 (18:18):
Most obvious thing to do a giant ETF that holds
small stocks. I feel like that would kind of.
Speaker 2 (18:23):
You can't have a giant Meme. Yeah, like the audience
for Meme anything, the audience for like irrationally pushing out
the price of things. It's not you know, it's not
that big.
Speaker 3 (18:32):
Yeah.
Speaker 2 (18:33):
I will say, like, this is an interesting question because
I feel like I've written this and said this possible
on this podcast. One of the lessons of the Meme
stock episode is that fundamental value is a floor on
stock price, because if like a stock is trading well
below it's fundamental value, then some private equity firm can
come and buy the company and you know, extract its
(18:54):
cash flows. But fundamental value is not a cap on
stock price. Like, if a stock trades it ten times
its fundamental life, there's nothing you can do about that.
You can short it, but you can't make it go
down to its fundamental day. There's no offsetting equivalent to
like a private equity firm buying the company and cracking
up its cash flows. And so everyone sort of thought
that fundamental value in the long run was the driver
(19:17):
of thought prices, and the memestock episode threw that into question.
Is like, no, you don't. It doesn't have to be. No,
with ETFs, there is a symmetrical mechanism, right, there's the
arbitrage mechanism means that the ETF kind of has to
trade its fundamental value, and if it doesn't, you can
fix that yourself. You can like extract that premium directly
by you know, genie a creation or redemption. And so
(19:37):
that's why there's no MEITF because you can't sustainably trade
above fair value.
Speaker 3 (19:41):
I still feel like it could happen. Yeah, maybe it'll
happen in the next two weeks, and this will be
the thing that eurodically changes our answers. Chris asks thank
(20:07):
you for continuing to cover the amusing and somehow not
yet a legal state of prediction market quote sporting outcome commodities.
On the last podcast, it sounded like hal She could
arguably become a platform that connects betters with market makers,
which somehow seems like a bad thing for DraftKings and flutter.
But couldn't the sports books become the market makers?
Speaker 2 (20:28):
Yeah? Why not? I Mean, it's unclear what actual entities
end up doing this, but I do think that one
way to think about it is that right now, there
are sports books which are in the business of trading
sports pets with retail customers essentially, and there are prediction markets,
which are public registered exchanges that are in the business
(20:51):
of trading sports pets with anyone who wants to show up.
And like, that's kind of how the stock market works.
Right There are retail brokerages that send their retail custom
stock orders to you know, sit at all securities or
chains trade or power or whoever, and then there's a
public stock market. And one thing that happens is that
those electronic trading firms that get the retail orders, they're
(21:12):
also trading on the stock exchange, and so one thing
they are doing is interacting with retail orders and then
laying off risk in the public markets. And you could
imagine something like that happening with sports books, right maybe
not the current sports books, maybe that's more like a
market maker or function, but you have people who are
interacting with retail traders and they're getting flows and they're
(21:33):
you know, they're getting like two sided, uninformed flows and
they're trading against it and they're making a spread and
so forth. And when they have unbalanced risk, they go
lay it off in the public markets against whatever sharp
traders they find. They're like, I think that's a very
reasonable model, and like, the way it works in the
stock market is if you're a retail trader, you get
a better customer experience and often like better pricing by
trading with an electronic wal seller through your retail broker's platform,
(21:59):
And like that could happen here too, or we're like,
you know, the retail sports books can offer maybe a
better user experience and so you trade with them, but
then they are trading in the public markets to lay
out their risk. There are some problems with that theory,
including about like the legal structure of commodities markets, but
it does kind of feel like that could be a
place that this ends up, where the retail traders are
(22:20):
trading with someone who specializes in retail trading, and then
like there's some professional institutional market.
Speaker 3 (22:27):
So Chris maybe he identified the evolution.
Speaker 2 (22:30):
Yeah, I don't know that the current sports books are
going to be the best situated to to do that.
But yeah, they're all kind of they're all basically hiring
the same pool of high frequency traders.
Speaker 3 (22:39):
That's probably fine, all right, Dan Dan asks, I have
a question about how companies execute share repurchases and the
rules around it. I know that parenthetical back when the
SEC and Force rules insiders could use a one oh
five B one plan to try and five one ten
ten five be one plan ten.
Speaker 2 (22:57):
Be five to one.
Speaker 3 (22:59):
Wait did I say ten B five to one ten
five B one oh ten be five to one ten. No,
it says it.
Speaker 2 (23:04):
Doesn't matter what it says. I'm telling you about it
actually is?
Speaker 3 (23:06):
Okay? Sorry, sorry, down ten Wait you just said ten
B five one plan to try and protect themselves against
insigner trading allegations. Is there a similar plan for when
a company is repurchasing shares or are they allowed to
use insider information to time the repurchases? Also, how do
they do it? I assume Coca Cola doesn't open their
Robinhood account and submit a market order.
Speaker 2 (23:30):
No, here's what they do. They call me, and then
they used to call me when I was a banker.
One thing I did was share repurchases, and so I
can tell you all about this. I will try to
keep it short because although it is dear to my heart,
it's not that interesting. But yeah, So ten B five
to one is like the SEC rule that basically says,
when you don't have inside information, you can set up
(23:50):
a plan to buy stock or sell stock. So like
corporate executives will set up a ten B five to
one plan to sell stock to pay for college, and
then later when the plans sell stock, even if they
have inside information, it doesn't matter because that the plan
is just automated. This is the theory. There are various workarounds,
but it's the same rule for companies. Companies regularly do
stock buybacks using ten to five to one plans because
(24:13):
they have some open window after they announce earnings where
they can set up the plan and then like the
plan can kind of go and be automated throughout the
year and they can buy stock even when they're discussing
mergers or whatever because like they have a ten to
five one plan. Sometimes companies do that, they also do
other things. It used to be that the main way
companies bought backstock was through tender offers where they made
a public announcement anyone who wants to sell stock at
(24:35):
this price can do it, and then they would buy
stock at a price, and this would solve all those
problems because they'd make full disclosure of everything and like
everyone would have the same information and they'd tender all
their stock at the same time. It's pretty annoying process
and companies do much less of that than they used to,
basically because the SEC relaxed the rules. Like a few
decades ago, it used to be considered that like open
market stock purchases where market manipulation, and so companies didn't
(24:59):
do it, and they relax those rules. This is periodically controversial,
like people are like stock buybacks are market manipulation, so
they should change the rules back and then companies would
have to do tender offers. But now they mostly do
open market purchases. The other thing they do is delightful
derivative products with their friendly local investment banker. Basically, anything
(25:19):
you do, you're going to call an investment bank and
they're going to do it for you. And the simple
way is they're going to do it in the open market.
Not so dissimilar from what you would do with robinhood.
They usually they'll like handle the you know, the average
over the course of the day rather than you hitting
every bye you know order. But if you want something
more complicated, like a fancy derivative product, they'd be happy
to put you into that called accelerated stock buybacks really good.
(25:42):
I used to sell them.
Speaker 3 (25:43):
Sounds juicy.
Speaker 2 (25:44):
Yeah they're good. Yeah, call me for I don't want
to actually endorse accelerate. It's like, well, have complicated feelings
about this product I used to sell. But in any case,
here's a question from Ian. Katie is mentioned on more
than one occasion that she craves adrenaline and is an
adrenaline junkie. She has also discussed her participation in the
(26:05):
sport of horse dancing. Are the two related? Is trissage
in activity that adrenaline junkies flock too? I want to
hear the answer to this one.
Speaker 3 (26:14):
Probably no.
Speaker 2 (26:16):
I feel like horseback riding in itself is like a
little bit you have has an element of.
Speaker 3 (26:22):
Animal danger.
Speaker 2 (26:23):
Yeah, could go fast even if during horse dancing He's.
Speaker 3 (26:26):
Probably ideally they wouldn't. It's a twofold answer, because yes,
there is an element of adrenaline and riding horses. But
if you most adrenaline junkies are more into jumping, you know,
they want to go fast over jumps. Dressage often the
goal is to not go that fast. It's like horse ballet.
But I love drissage well. I love drisage just for
(26:51):
the training element of it. It's like horse pilates, honestly.
But when it comes to showing, I just love having
to be on. It probably takes five to ten minutes
for you to complete your test, and for those five
to ten minutes, you have to nail every part of it.
You just have to be on the entire time. So
I really enjoy that element. It's not dissimilar from television,
(27:12):
where the camera is on and you just have to perform,
right Like.
Speaker 2 (27:15):
Any performance or competitive activity has an adrenaline competit, even yes,
even if it's.
Speaker 3 (27:21):
Like, for example, obviously that's a high adrenaline sort of thing. Yes,
for yeah, if you're like in a high stakes match,
your heart is racing, but you're not obviously. In most cases,
I assume chess probably yoursage is the most similar. I
don't know, everyone go YouTube drissage in the alone?
Speaker 2 (27:44):
Are there YouTube videos of Kiddie raffle.
Speaker 3 (27:47):
Absolutely not, absolutely not.
Speaker 2 (27:50):
Well, don't look for those though.
Speaker 3 (27:51):
No, please don't. All right, Well, happy happy New Year.
I hope you all had a great time.
Speaker 2 (28:03):
And that was the Money Stuff Podcast.
Speaker 3 (28:05):
I'm Matt Levine and I'm Katie Greifeld.
Speaker 2 (28:08):
You can find my work by subscribing to the Money
stuffnewsletter on Bloomberg.
Speaker 3 (28:11):
Dot com, and you can find me on Bloomberg TV
every day on the close between three and five pm Eastern.
Speaker 2 (28:18):
We'd love to hear from you. You can send an
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question and we might answer it on the air.
Speaker 3 (28:26):
You can also subscribe to our show wherever you're listening
right now and leave us a review. It helps more
people find the show.
Speaker 2 (28:32):
The Money Stuff Podcast is produced by annam Aserakis and
Moses One.
Speaker 3 (28:36):
Our theme music was composed by Blake Maples.
Speaker 2 (28:39):
Amy Keen is our executive producer.
Speaker 3 (28:42):
And Sage Bauman is Bloomberg's head of Podcasts.
Speaker 2 (28:46):
Thanks for listening to The Money Stuff Podcast. We'll be
back next week with more stuff
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:08):
Here we are Friday, January second, twenty twenty, recording this, live,
recording this, live recording this on I don't know, December
seventeenth days. Wow, it's been it's been an eventful two weeks.
I know, between when we recorded this and when you're
listening to it.
Speaker 3 (00:26):
Ominous, very ominous.
Speaker 2 (00:28):
Yeah, I'm going to regret this so.
Speaker 3 (00:31):
Much, probably just given the pace of everything that's happening
all at once. But hopefully our answers to these questions
won't have changed too much in two weeks. Hopefully, unless
something amazing happens.
Speaker 2 (00:43):
Hello, and welcome to the Money Stuff Podcast here, weekly
podcasts where we talk about stuff related to money. I'm
Matt Levine, and I read the Moneys Doft column for
Bloomberg Opinion.
Speaker 3 (00:54):
And I'm Katie Greifeld, a reporter for Bloomberg News and
an anchor for Bloomberg Television.
Speaker 2 (01:00):
Not pretending to sing the mail bag thing, but today
is a mailbag episode.
Speaker 1 (01:04):
Yeah, mail bag, Thank you, Katie, mail bag nail bag.
Speaker 2 (01:23):
Yeah, let's get into it.
Speaker 3 (01:24):
We've got some good ones. We're starting off strong with
a question from Christopher, who asks why do analysts ask
questions on earnings calls? I get why they ask them.
In private meetings with the company, they then get exclusive
access to body language information, but on public earnings calls
they get their information only to have it simultaneously shared
(01:44):
with everyone else. What do they get out of that?
Speaker 2 (01:47):
It's a good question. So basically all of the questions
on earnings calls are asked by sales ad analysts whose
job is not to buy stocks that will then go
up vote, rather to publish research reports for their customers
saying what's thots will go up and so like, broadly speaking,
the research analysts are in a business of like providing
public ish goods, right, Like, they're not getting paid directly
(02:10):
for picking stocks. What they're doing is they're providing some
holistic set of services to investor clients that make the
investor clients think fondly about them and about their banks.
And then the investor clients, because of those fond feelings,
will either you know, in the US, they'll trade with
the banks and pay them commissions and in Europe they'll
pay directly for research. And so what that means is
(02:31):
that like anything that the research analyst does that like
makes investors like them is productive, and providing public goods
by asking good questions on the earnings call is reasonably productive. Also,
if you ask good questions on the earnings call, then
people will hear you and think, ooh, I like that analyst,
and that will lead to things like maybe them paying
(02:52):
for your research. It will also lead to maybe the
company thinking you're good and liking you, and therefore one
you know, having private meetings with you where they tell
you stuff or give you a body language that allows
you to be more informed and too.
Speaker 3 (03:06):
Like.
Speaker 2 (03:06):
Another job of research analysts is brokering meetings between companies
and investors, right, so they do corporate access where you know,
when a company is doing a non deal ROACHO or
a conference or whatever, they're meeting with investors and those
slots are kind of like arranged by the banks by
the research analysts, and if you are in good favor
with the company, then you get better access to those
things and you can do more for your clients. So
(03:29):
as part of like the broad set of services they provide,
asking good questions in a very public place on ear
news callus it's a useful thing to do.
Speaker 3 (03:38):
It sounds a bit performative. But I hear it.
Speaker 2 (03:40):
Yeah, it's like a market Like being a research analyst
is in some sense a marketing job, right, and so
like being good in public is good marketing, I should say,
also like it is an analytical job, and you are
building your own model, and like if you have differentiated
views or differentiated skills and you ask a good question
that informs your model, other people will get the answer
(04:01):
to the question, but they don't have the same model,
they don't have the same skills, right, So you could
still get differentiated information or analysis by asking a question
that everyone can hear. But a lot of what you're
doing is letting everyone here smar you are.
Speaker 3 (04:14):
Yeah, you're sort of speaking to something that I was
wondering when reading this question, is whether there's satisfaction in
asking like a really good question on the earnings call
that maybe gets something more candid from the executives on
the call.
Speaker 2 (04:31):
You're a television anchor, Sure you know the answer to
this question?
Speaker 3 (04:34):
Well, yeah, I guess. I mean, if someone asked a
really good question on an earnings call, I would probably
highlight it and also steal it from myself.
Speaker 2 (04:41):
Yeah, But also, just like, isn't there satisfaction.
Speaker 3 (04:44):
In asking a really good question. Yeah, that's true. Or
like the journalists at the FED press conference, right, yeah.
Speaker 2 (04:52):
Right, same thing. The journalists of the FED Press conference.
Any answer to their question. Every other journalists of that
conference can write down, right, yes, but you ask a
good question, then you're like, oh, you impress your colleagues,
you impress the FED. Yeah, you impress your readers.
Speaker 3 (05:08):
Yeah about or you tick off the FED something else.
Something else I also wonder about is like whether I
wonder this too about the journalists in the room at
the FED Press conference, is whether there's any sort of
sense that, like this is a team sport, that we're
trying to get something out of these people that we
might not have otherwise, or whether everyone is asking their
(05:31):
own individual questions and not necessarily building on the question
that was asked before you.
Speaker 2 (05:36):
I mean, surely it's some combination, right, Like, surely you
want to distinguish yourself, but also, like someone else draws
some blood, you move in for the killer. Right, Yeah,
probably somewhat similar.
Speaker 3 (05:48):
Good question, Christopher. This next question, Yeah, who wants to
read it?
Speaker 2 (05:59):
It?
Speaker 1 (05:59):
Gover?
Speaker 2 (06:00):
What idiotic book is coming from senior hedge fund leaders?
It's asset management? The entire point is to care about
making few money. The people that do get hired who
don't care about money are weirdos who create ten billion
dollars Ponzi schemes. Jane Street hiring Mathcamp weirdos rather than
the cross players is a literal criminal conspiracy. Anthropic is
(06:20):
a weird cult, and it's specifically because of how weird
and abnormal that the Open Ai board was that they
tried to destroy the company because it released the successful product.
We need more normal people in these companies and less
ethereal PhDs that don't care buying a house, a plane,
or a yacht, don't care about buying your household. Companies
should have corporate policies that require employees over the age
(06:40):
of twenty five to not have roommates. We get better
products and better corporate decisions if people aren't living in
cult houses but rather have to deal with the real
housing market and do things like buy groceries and pick furniture.
If hedge fund leadership wants to only hire socialists, then
they should go lead a university rather than managing financial assets.
For two and twenty or more. I love this question,
any of this question. I love this rant. I don't
(07:04):
even know what prompted it, but I have written about
this that I believe, and I think I am not
alone in this, that like a lot of the most
successful people in the financial industry are deep down motivated
by puzzle solving and intellectual curiosity rather than the pursuit
of money. And I just think that this is an
(07:26):
empirical fact that might not be true, but it seems
to be true, right, Like you could imagine that the
thing that would make you the best at managing hedge
fund was like really liking money a lot, But it
turns out that solving puzzles is really good for managing money.
But Graham is right that there are weirdnesses there, and
that like, if you get into this business because you
(07:46):
really like solving puzzles, like some number of those people
do end up committing huge frauds. And there is some
possibility that a world of nice, sociable, moderately intelligent lacrosse
players would commit less fraud and have fewer blow ups
and Ponzi schemes than one where where the weirds are
(08:10):
running the nuts funds. But what do you do about that? Right?
You can't. It's a fiercely competitive business, and if you
are just trying to trade stocks with like friendly sociability,
you'll get run over by the math kids. And so,
you know, the competition leads to this strange place where
the people who are less motivated by money make the
most money, and then some of them are weird. Also,
(08:31):
I should say, like I'm being sympathetic to his question,
but fundamentally my sympathies are with the puzzle people, right,
I mean, I love the puzzle people, and I think
it is on balance good for the world and also
very pleasing aesthetically that the puzzle people are in charge
of finance. But it's a real you know, this is
like it goes back to Liar's Poker. Right. This transition
(08:52):
from the sort of sociable, essentially marketing oriented people to
math puzzle people is one that has called attention on
Wall Street for decades.
Speaker 3 (09:01):
H Great Graham, really good stuff. Okay, here's Sean that
seems to love certain quotes because they're graded explaining a
moment mechanism, trend, et cetera. For example, quote, it would
be wise to view any investing in open Ai Global
LLC in the spirit of a donation. End quote hidden
poorly internally labeled Fiat at account eight million?
Speaker 2 (09:25):
Do you eight billion?
Speaker 3 (09:26):
Eight billion?
Speaker 2 (09:27):
She's a little till there.
Speaker 3 (09:28):
In front of it because it.
Speaker 2 (09:30):
Shan beckman Fried's famous spreadsheet famous.
Speaker 3 (09:33):
Do you have an all time favorite?
Speaker 2 (09:35):
Do I have an all time favorite quote? So I
almost said this in the last answer, Samuel Johnson says,
there are a few ways in which a man can
be more innocently employed than in getting money. I think
about that a lot. Yeah, people regularly get mad at
Wall Street and fanciers and people trying to make a buck,
(09:55):
and I often think it's better than almost all of
the alternatives. People who are motivated power or revenge or
even a sense of mission, we're often doing worse things
than the people are just out there trying to make
a buck or eight billion bucks. So that's a that's
a you know, an all time favorite quote of mine.
(10:16):
Another favorite quote of mine is, you know, Warren Buffett
has a lot of famous quotes and his famous shareholder letters.
Speaker 3 (10:23):
Yeah, probably quoted a.
Speaker 2 (10:24):
Lot of them. The one that I like them most
is at some point he's like talking trash about gold
as an investment, right, and he's like, you can invest
I think the number was like the market cap with
the SMP. He's like, you can put you know, thirty
two trillion dollars into the into the SMP. You put
it the money into the SMP, you get all the
productive capacity of America, all the companies, all the corporate profits,
all right, all the business. Or you can put that
(10:46):
amount of money into a cube of gold that is
like yay hi by yay long, by yay wide. And
he's like, and then it'll just sit there. You can
fundle the cube, but it will not respond.
Speaker 3 (10:57):
It will not spin off any any dividends anything like that,
no cash flow.
Speaker 2 (11:01):
I just think of Warren Buffett's saying, you can fundle
the cube, but it will not respond.
Speaker 3 (11:18):
Okay. From ends a question on ISS slash Glass Lewis
and the voting discussion. Isn't this the easiest way for
a billionaire to gain a huge influence on companies? Buy
Iss or Glass Lewis and steal the voting in one
in the direction you want? Would this work?
Speaker 2 (11:34):
I don't know, you know, and Glass Lewis people, people
are really mad at Iss, Glass List or the proxy advisory.
Speaker 3 (11:41):
Firms, as discussed on this pod ages ago.
Speaker 2 (11:45):
Now I speak only a few days before we recorded
this pod, Donald Trump put out an executive order basically
saying we don't like the proxy advisors. And there's this
notion that the proxy advisors are in charge of all
shareholder voting. Right, People like a conspira like this where
it's like two foreign owned companies control how all American
(12:06):
public companies are run. Right. The idea is that Iss
and Glass Lewis tell the shareholders how to vote, and
then the shareholders vote that way, and then the companies
have to do what they say. This is exaggerating in
a lot of ways, one of which is that like
Iss and Glass Lewis have their most influence in the
least important things like there are shareholder votes on you know,
there are hundreds a year on non binding proposals that
(12:29):
companies should write reports about ESG stuff or whatever, and there. Yeah,
a lot of shareholders do defer to Iss and Glass
Lewis because it just doesn't matter to them that much.
Iss and Glass Lewis have meaningful influence on things like
contested merger situations and proxy fights, where like there are
real economic stakes, but they're a lot of asset managers
(12:49):
are making their own decisions because they have more at stake,
whereas the stuff where the Iss and Glass Lewis have
the most impact is where people have the least at stake.
But also it's just like they have no authority. They're
just persuasive, right, They're just like useful, and if they
stop being useful, then people would stop paying attention to them.
So I think if you bought Iss and glass Lewis
and use them to advance an agenda, first of all,
(13:11):
you can only do so much to advance the agenda
because it's only like share all theer voting. And secondly,
if you did it too obviously, then people would get
sick of you, and it can't be that hard to
start another one.
Speaker 3 (13:21):
That's the thing like in practice, if a controversial billionaires,
which is Elon Musk, bought either Iss or Glass Lewis,
I feel like like whatever recommendation they make, people just
know it's biased.
Speaker 2 (13:33):
Yeah, well you know everyone's like, oh it's biased. Now
it is biased. They have some priors that happened to
more or less aligned with the views of a lot
of investment managers. Because the investment manager are the customers,
and they're trying to run a business where people pay
for their advice. But yeah, like you know, their bias
(13:55):
is kind of aligned with their customers, and if you
change that, then the customers would go somewhere else.
Speaker 3 (13:59):
Yeah, now we have a question from it's like the
ETF segment. I don't really know how to answer this,
but Leo asks, I feel like you could just have
every buy in ETF be a creation and every cell
be a redemption routed to the issuer and remove the
possibility of ETF's trading outside of NAV. Why bother being
(14:20):
able to trade them with other traders directly at.
Speaker 2 (14:22):
All, because they're exchange traded.
Speaker 3 (14:24):
Yeah, that's the thing. They trade throughout the day.
Speaker 2 (14:26):
Right. An instrument where you could only create and redeem
with the issuer is just.
Speaker 3 (14:31):
The mutual fund yeah right, Yeah.
Speaker 2 (14:33):
And mutual funds have a couple of disadvantages. One is
that it's just an administrative cost to the issue always
having to trade with you, rather than you can trade
on the exchange with anyone who wants to two. The
issue wants to trade with you at NAV, but the
NAV changes throughout the day, and so there's a cost
in just updating that, whereas with an ETF you're trading
(14:55):
at the market price, and so it just kind of
takes care of itself. Nobody takes care of itself with
arbitreasure is making sure the price is close to the
nav but like the issuer doesn't have to worry about that, Like,
it's much more administratively simple. Also though, like a lot
of the point of the ETF thing is that if
you're doing trades with the issue, the way ETFs worked
(15:16):
is that I gave the issuer money and it gave
me back shares. That is a taxable trade that creates
tax liabilities for the other holders of the ETF of
the fund right, because when the issue is selling stock
for cash, it creates a tax realization event. The trick
(15:39):
of ETFs is that they never trade.
Speaker 3 (15:41):
For cash famously.
Speaker 2 (15:43):
Famously, and so when I trade with you on the
exchange and we're not trading with the issure, there's no
tax realization event for the ATF. When there are creations,
they're not like me going to the ETF with cash
and getting my shares or vice versa. They're otherwise participants
handing in shares and getting back of the ETF. So
there's an in kind transaction and no tax event. Yeah,
(16:04):
and so it is like, really important to the ETF
is that there are no cash trades with the ETF,
so there are no taxes, and they deffer taxes for
as long as you hold the fund.
Speaker 3 (16:13):
So doing this would remove all the things that make
an ets.
Speaker 2 (16:16):
This is just a mutual fund.
Speaker 3 (16:17):
Yeah.
Speaker 2 (16:18):
The question why would you why can't you just do
every trade with the issuer? Is like, why can't an
etfpm mutual fund? And the answer is, we've discovered a
better technology.
Speaker 3 (16:26):
Yeah, why can't a mule be a horse? A lot
of reasons. This is a really great question from Oscar.
Why are there no meme ETFs? We have meme stocks
and meme stock ETFs, but there is no meme ETF
in otherwise completely boring ETF holding boring assets that nevertheless
drums up huge retail excitement. It doesn't have to trade
(16:47):
at some dune premium, just build up a big NAV.
I read this a few times and then I understood
what Oscar was asking because my immediate reaction was, there
are ETFs that hold meme stocks, but he's talking about
why hasn't an ETF t taken off in the same
way that a meme stock has, like display meme like characteristics.
Is how I understood it.
Speaker 2 (17:07):
And the answer is because of the ARP. Right. The
answer is because if I buy an ETF on the
stock exchange, I'm buying it from a market maker who
is probably selling me shares of the ETF and buying
the underlying stock, right and vice versa. If I'm selling,
they'll buy the ETF, they can sell the underlying stock,
and so if the values get out of line, then
(17:29):
they'll just do that arbitrage. Right. If an ETF is
trading it well above its net acid value, then market
makers are going to sell the ETF and buy the
underlying shares and close the ARP and do creations and
redemptions to close the APP. So it can't really trade
it much of a premium. And then the question is
it's not trading at a premium, it would just pull
up a big nav meme stock can be fairly small, right,
(17:52):
people can buy the memestock and it'll go up. And
a meme ETF that held a lot of shares would
have to push the prices of all of the shares
in order to go to the moon, right, Like, you
can't have a premium, not sustainably, and so the only
way for it to like go to the moon is
to push out the prices of all the underlying shares.
(18:12):
So you can imagine like a small ETF with like
small Memei stocks doing that, But it's not the.
Speaker 3 (18:18):
Most obvious thing to do a giant ETF that holds
small stocks. I feel like that would kind of.
Speaker 2 (18:23):
You can't have a giant Meme. Yeah, like the audience
for Meme anything, the audience for like irrationally pushing out
the price of things. It's not you know, it's not
that big.
Speaker 3 (18:32):
Yeah.
Speaker 2 (18:33):
I will say, like, this is an interesting question because
I feel like I've written this and said this possible
on this podcast. One of the lessons of the Meme
stock episode is that fundamental value is a floor on
stock price, because if like a stock is trading well
below it's fundamental value, then some private equity firm can
come and buy the company and you know, extract its
(18:54):
cash flows. But fundamental value is not a cap on
stock price. Like, if a stock trades it ten times
its fundamental life, there's nothing you can do about that.
You can short it, but you can't make it go
down to its fundamental day. There's no offsetting equivalent to
like a private equity firm buying the company and cracking
up its cash flows. And so everyone sort of thought
that fundamental value in the long run was the driver
(19:17):
of thought prices, and the memestock episode threw that into question.
Is like, no, you don't. It doesn't have to be. No,
with ETFs, there is a symmetrical mechanism, right, there's the
arbitrage mechanism means that the ETF kind of has to
trade its fundamental value, and if it doesn't, you can
fix that yourself. You can like extract that premium directly
by you know, genie a creation or redemption. And so
(19:37):
that's why there's no MEITF because you can't sustainably trade
above fair value.
Speaker 3 (19:41):
I still feel like it could happen. Yeah, maybe it'll
happen in the next two weeks, and this will be
the thing that eurodically changes our answers. Chris asks thank
(20:07):
you for continuing to cover the amusing and somehow not
yet a legal state of prediction market quote sporting outcome commodities.
On the last podcast, it sounded like hal She could
arguably become a platform that connects betters with market makers,
which somehow seems like a bad thing for DraftKings and flutter.
But couldn't the sports books become the market makers?
Speaker 2 (20:28):
Yeah? Why not? I Mean, it's unclear what actual entities
end up doing this, but I do think that one
way to think about it is that right now, there
are sports books which are in the business of trading
sports pets with retail customers essentially, and there are prediction markets,
which are public registered exchanges that are in the business
(20:51):
of trading sports pets with anyone who wants to show up.
And like, that's kind of how the stock market works.
Right There are retail brokerages that send their retail custom
stock orders to you know, sit at all securities or
chains trade or power or whoever, and then there's a
public stock market. And one thing that happens is that
those electronic trading firms that get the retail orders, they're
(21:12):
also trading on the stock exchange, and so one thing
they are doing is interacting with retail orders and then
laying off risk in the public markets. And you could
imagine something like that happening with sports books, right maybe
not the current sports books, maybe that's more like a
market maker or function, but you have people who are
interacting with retail traders and they're getting flows and they're
(21:33):
you know, they're getting like two sided, uninformed flows and
they're trading against it and they're making a spread and
so forth. And when they have unbalanced risk, they go
lay it off in the public markets against whatever sharp
traders they find. They're like, I think that's a very
reasonable model, and like, the way it works in the
stock market is if you're a retail trader, you get
a better customer experience and often like better pricing by
trading with an electronic wal seller through your retail broker's platform,
(21:59):
And like that could happen here too, or we're like,
you know, the retail sports books can offer maybe a
better user experience and so you trade with them, but
then they are trading in the public markets to lay
out their risk. There are some problems with that theory,
including about like the legal structure of commodities markets, but
it does kind of feel like that could be a
place that this ends up, where the retail traders are
(22:20):
trading with someone who specializes in retail trading, and then
like there's some professional institutional market.
Speaker 3 (22:27):
So Chris maybe he identified the evolution.
Speaker 2 (22:30):
Yeah, I don't know that the current sports books are
going to be the best situated to to do that.
But yeah, they're all kind of they're all basically hiring
the same pool of high frequency traders.
Speaker 3 (22:39):
That's probably fine, all right, Dan Dan asks, I have
a question about how companies execute share repurchases and the
rules around it. I know that parenthetical back when the
SEC and Force rules insiders could use a one oh
five B one plan to try and five one ten
ten five be one plan ten.
Speaker 2 (22:57):
Be five to one.
Speaker 3 (22:59):
Wait did I say ten B five to one ten
five B one oh ten be five to one ten. No,
it says it.
Speaker 2 (23:04):
Doesn't matter what it says. I'm telling you about it
actually is?
Speaker 3 (23:06):
Okay? Sorry, sorry, down ten Wait you just said ten
B five one plan to try and protect themselves against
insigner trading allegations. Is there a similar plan for when
a company is repurchasing shares or are they allowed to
use insider information to time the repurchases? Also, how do
they do it? I assume Coca Cola doesn't open their
Robinhood account and submit a market order.
Speaker 2 (23:30):
No, here's what they do. They call me, and then
they used to call me when I was a banker.
One thing I did was share repurchases, and so I
can tell you all about this. I will try to
keep it short because although it is dear to my heart,
it's not that interesting. But yeah, So ten B five
to one is like the SEC rule that basically says,
when you don't have inside information, you can set up
(23:50):
a plan to buy stock or sell stock. So like
corporate executives will set up a ten B five to
one plan to sell stock to pay for college, and
then later when the plans sell stock, even if they
have inside information, it doesn't matter because that the plan
is just automated. This is the theory. There are various workarounds,
but it's the same rule for companies. Companies regularly do
stock buybacks using ten to five to one plans because
(24:13):
they have some open window after they announce earnings where
they can set up the plan and then like the
plan can kind of go and be automated throughout the
year and they can buy stock even when they're discussing
mergers or whatever because like they have a ten to
five one plan. Sometimes companies do that, they also do
other things. It used to be that the main way
companies bought backstock was through tender offers where they made
a public announcement anyone who wants to sell stock at
(24:35):
this price can do it, and then they would buy
stock at a price, and this would solve all those
problems because they'd make full disclosure of everything and like
everyone would have the same information and they'd tender all
their stock at the same time. It's pretty annoying process
and companies do much less of that than they used to,
basically because the SEC relaxed the rules. Like a few
decades ago, it used to be considered that like open
market stock purchases where market manipulation, and so companies didn't
(24:59):
do it, and they relax those rules. This is periodically controversial,
like people are like stock buybacks are market manipulation, so
they should change the rules back and then companies would
have to do tender offers. But now they mostly do
open market purchases. The other thing they do is delightful
derivative products with their friendly local investment banker. Basically, anything
(25:19):
you do, you're going to call an investment bank and
they're going to do it for you. And the simple
way is they're going to do it in the open market.
Not so dissimilar from what you would do with robinhood.
They usually they'll like handle the you know, the average
over the course of the day rather than you hitting
every bye you know order. But if you want something
more complicated, like a fancy derivative product, they'd be happy
to put you into that called accelerated stock buybacks really good.
(25:42):
I used to sell them.
Speaker 3 (25:43):
Sounds juicy.
Speaker 2 (25:44):
Yeah they're good. Yeah, call me for I don't want
to actually endorse accelerate. It's like, well, have complicated feelings
about this product I used to sell. But in any case,
here's a question from Ian. Katie is mentioned on more
than one occasion that she craves adrenaline and is an
adrenaline junkie. She has also discussed her participation in the
(26:05):
sport of horse dancing. Are the two related? Is trissage
in activity that adrenaline junkies flock too? I want to
hear the answer to this one.
Speaker 3 (26:14):
Probably no.
Speaker 2 (26:16):
I feel like horseback riding in itself is like a
little bit you have has an element of.
Speaker 3 (26:22):
Animal danger.
Speaker 2 (26:23):
Yeah, could go fast even if during horse dancing He's.
Speaker 3 (26:26):
Probably ideally they wouldn't. It's a twofold answer, because yes,
there is an element of adrenaline and riding horses. But
if you most adrenaline junkies are more into jumping, you know,
they want to go fast over jumps. Dressage often the
goal is to not go that fast. It's like horse ballet.
But I love drissage well. I love drisage just for
(26:51):
the training element of it. It's like horse pilates, honestly.
But when it comes to showing, I just love having
to be on. It probably takes five to ten minutes
for you to complete your test, and for those five
to ten minutes, you have to nail every part of it.
You just have to be on the entire time. So
I really enjoy that element. It's not dissimilar from television,
(27:12):
where the camera is on and you just have to perform,
right Like.
Speaker 2 (27:15):
Any performance or competitive activity has an adrenaline competit, even yes,
even if it's.
Speaker 3 (27:21):
Like, for example, obviously that's a high adrenaline sort of thing. Yes,
for yeah, if you're like in a high stakes match,
your heart is racing, but you're not obviously. In most cases,
I assume chess probably yoursage is the most similar. I
don't know, everyone go YouTube drissage in the alone?
Speaker 2 (27:44):
Are there YouTube videos of Kiddie raffle.
Speaker 3 (27:47):
Absolutely not, absolutely not.
Speaker 2 (27:50):
Well, don't look for those though.
Speaker 3 (27:51):
No, please don't. All right, Well, happy happy New Year.
I hope you all had a great time.
Speaker 2 (28:03):
And that was the Money Stuff Podcast.
Speaker 3 (28:05):
I'm Matt Levine and I'm Katie Greifeld.
Speaker 2 (28:08):
You can find my work by subscribing to the Money
stuffnewsletter on Bloomberg.
Speaker 3 (28:11):
Dot com, and you can find me on Bloomberg TV
every day on the close between three and five pm Eastern.
Speaker 2 (28:18):
We'd love to hear from you. You can send an
email to Moneypod at Bloomberg dot net, ask us a
question and we might answer it on the air.
Speaker 3 (28:26):
You can also subscribe to our show wherever you're listening
right now and leave us a review. It helps more
people find the show.
Speaker 2 (28:32):
The Money Stuff Podcast is produced by annam Aserakis and
Moses One.
Speaker 3 (28:36):
Our theme music was composed by Blake Maples.
Speaker 2 (28:39):
Amy Keen is our executive producer.
Speaker 3 (28:42):
And Sage Bauman is Bloomberg's head of Podcasts.
Speaker 2 (28:46):
Thanks for listening to The Money Stuff Podcast. We'll be
back next week with more stuff
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