September 6, 2024 • 27 mins
Are hidden fees draining your investment returns without you even realizing it? We promise, by the end of this episode, you’ll be armed with the knowledge to uncover and tackle these sneaky costs. Join us, your trusty knuckleheads, as we navigate the labyrinth of investment fees with a mix of serious analysis and our signature humor. From the transparency of buying fast food to the murky depths of 401k charges, we’ll highlight how understanding the total cost of investing can significantly impact your financial performance.
Ever wondered why your 401k statements seem like they’re written in a foreign language? We break down the Department of Labor’s fee disclosure mandates, helping you decode management, advisory, administrative, record-keeping, and trading costs. We’ll also dissect the various share classes of mutual funds—like A, B, and C shares—and their associated 12B-1 fees, ensuring you’re not caught off guard by hidden charges. With our fun analogies and real-life examples, you’ll grasp the crucial differences between loaded and no-load mutual funds, empowering you to make informed decisions for your financial future.
Thinking about switching to an integrated managed account but unsure about the costs? We’ve got you covered! We’ll compare the cost structures of integrated accounts versus individual retirement accounts held at discount brokerage houses. From commissions to expense ratios and wrap fees, we’ll guide you through the fee jungle, helping you understand what you’re really paying for. Plus, we’ll share some hilarious banter and behind-the-scenes tomfoolery to keep things light and entertaining. Tune in and become a savvy investor with a clearer picture of where your money is going!
We love to hear your thoughts, questions, and ideas. Send us a text!
Developing your financial bullshit sniffer one episode at a time.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Keli Alo (00:01):
Welcome to Bullshit on Stilts, a podcast hosted by two
guys with vast financialbackgrounds and great bullshit
sniffers who call out the clichecrap, spackle and flap doodle
spewed by so-called expertsacross the landscape of
financial advice, identifying asdoctors of bullshitology.
You can count on your esteemedhosts okay, maybe knuckleheads
(00:24):
to bring you a lively, if notdeadly, mix of bullshitology.
You can count on your esteemedhosts okay, maybe knuckleheads
to bring you a lively, if notdeadly, mix of serious analysis,
hijinks and tomfoolery, allwithin a 99.1% bullshit-free
safe space.
Let's get after it.
So welcome to Bullshit onStilts.
Today we're going to be talkingabout the final question within
(00:46):
the Fab Five for investing,which is know your total cost.
Mark Robinson (00:50):
Know your total cost State it otherwise know
what you're paying for and whatthat is.
So there's an itemizationfactor in there instead of just
a summation of total cost.
Keli Alo (01:01):
Yes, yeah, yeah, you're after you actually what
You're after you actually whatYou're after you actually what.
Peanut Gallery (01:06):
What the hell?
Keli Alo (01:06):
What he is trying to say is quote you have to
actually Sometimes hunt for thevarious fees and or costs in
order to actually truly knowwhat those total costs are.
Right, Because they're made upof a number of different
potential charges.
Mark Robinson (01:25):
Right, right.
During our discussion today, wehope to maybe put some light
onto not just what your totalexpenses are, but itemizing some
of those.
And is that a value to you orare you receiving value for that
?
So potential value andactualized value for that cost.
Keli Alo (01:42):
Yeah, I think most people that I've worked with in
the past.
They can't even begin to figureout what the costs are From an
analogy standpoint.
I can drive up to a McDonald'sBurger King and I can see all
the prices.
Peanut Gallery (01:57):
No, you do drive up to.
Keli Alo (01:58):
McDonald's.
Mark Robinson (01:59):
No, I can.
Keli Alo (01:59):
I've never done that in my life.
I don't know what you'retalking about.
I really don't eat fast foodever, except for almost every
day, but still that's nothing.
But the point is is that thereare so many places that you go
and you can look at a price andbefore you buy it you can
discern whether you find thatworth buying or not.
And yet in the financialservice world, both insurance
(02:23):
and investments it's not thateasy to actually look up all the
prices.
Do they disclose it, maybe, butare you going to read 70 pages
worth of legal written documentsto figure out?
Oh, that's what they'recharging me for.
X, y and Z, I think the vastmajority of people never even
open up a fund prospectus, butit qualifies as complying with
(02:45):
the mandate for transparency.
Kelly.
Yes, well, it qualifies forwell.
I told you that.
I didn't tell you that, but Isent you the prospectus and I
said you should read throughthis.
I've disclosed it.
Are you fucking kidding me?
Mark Robinson (03:00):
And we're not saying that many of these
expenses don't have value.
Many do have value.
But you, as a consumer or aninvestor, you have to determine
is there real value there foryou and, if not, do something
about it.
That's right.
Peanut Gallery (03:13):
Do it.
Keli Alo (03:15):
Just do it.
In fact, it kind of connectsback to the other Fab Five
questions, right, when it comesto how am I doing?
Compared to what?
If I don't know my fees andlet's say I'm underperforming or
maybe I'm outperforming, arethe fees appropriate for the
kind of performance I'machieving with an advisor?
(03:35):
Without an advisor, whateveryour circumstance are, and if
you don't know what you paid forsomething you can't really know
, is there a value there?
Is that fair to?
Mark Robinson (03:43):
say yeah.
Is there a qualitative orquantitative justification for
that fee?
Keli Alo (03:49):
Right.
In fact, if you take thisanother step and say look,
different consumers purchasethings differently and for
different reasons.
Even if they purchase the sameexact item, it's generally going
to be for a different reason.
So when I was growing up in the80s, as you were growing up.
As I'm was growing up in the 80s, as you are growing up as I'm
still growing up and I'm allowedto wear jeans once every while.
(04:09):
I mean, I'm in a jumper most ofthe time but still sometimes I
get to wear jeans.
Well, when I was growing up,levi's it was a jeans that you
bought and they were like Idon't know, 28 bucks a pair.
And then all of a sudden, inthe 80s, calvin Klein, gerbos
all these jeans are coming outand they're priced at $70, $80,
$100.
And this is in the 80s.
Were they a better jean than aLevi?
(04:31):
No, not really.
What are you buying?
Just a brand that you can showpeople that you have.
But from a value standpoint,was it more or less valuable?
As a consumer, you get todecide whether you're going to
buy the Calvin Klein jean or theLevi or the Lee jeans or the
Wrangler and, by the way, yousee all the prices there and you
get to try them on and you getto walk out of the store
(04:52):
purchasing what you really wantand you find value in.
In investment land, it's notthat easy, because it's hard to
figure out what cost you'reactually paying for until you
start knowing the different feesthat might be nested inside
that investment portfolio,whether it's a 401k, a brokerage
account, an IRA or anythingelse In economics it's called
(05:14):
marginal value.
Correct.
Now everybody's really turningin because whenever you say
economics, people are like oh,let me listen.
Mark Robinson (05:22):
So X for me, service or product at this price
point, it's a value to me.
Add another 50 cents to it, orone half of 1%.
Nah, it's not a value, that'sright, and I believe that's
called the marginal orincremental increase in value.
And there's a point where,uh-uh, no more, yeah, same thing
(05:42):
with your investment accounts.
Keli Alo (05:43):
Same thing with your investment.
So to practically apply this,let's say that your cost to
invest you figured this out andwe're going to get to the cost.
Let's say it's two percentagepoints that you're paying in
total cost to invest and whenyou're looking at how you're
doing and you're comparing it toa benchmark for yourself, you
find that you're kind ofunderperforming.
(06:04):
Do you still want to continueto pay two percentage points for
investments if you'recontinuously underperforming?
Does that make sense?
It does make sense.
You're looking at me like I gota horn growing.
Mark Robinson (06:15):
No, no, no, okay, no, just lobsters coming out of
your ears.
No, and I think that's veryimportant for you to bring that
up, because once you recognizethat you are underperforming and
let's say it's by 1% a year andyou, through your own analysis,
you regard that you're payingtoo much in fees, and let's say
(06:36):
that's 50 basis points, or onehalf of 1%, and you have
$100,000 invested.
So now we're looking at $1,500a year.
What are you going to do aboutit?
You know that you'reunderperforming by your own
assessment, or paying a littlebit too much in expenses.
What are you going to do aboutit?
When does that just becomeacademic or an observation and
(07:01):
something that's actionable?
Keli Alo (07:02):
Yeah, yeah, in fact, there's a lot of people that
we've worked with through thebrainstorming process that we
work on and helping them figureout what they want to do.
Does it make sense, maybeexamine different options and
then they can go out andpurchase whatever they want with
whomever they want, right, butso many people because they
don't know what they own, whythey own it, how's it doing
(07:24):
compared to what, and what aremy total costs?
We actually do a report forpeople to just help walk them
through all the answers if theydon't have the chops to do it or
they're not inclined to do that, because it's still confusing.
But boy, when we get done withthat assessment with them and we
walk them through, what theyfind is the most frequent
(07:45):
response we get is I had no idea.
So let's kind of I think we'resetting this up right, but let's
get into.
How do you identify the cost toinvest?
And I think it's different ifit's a 401k plan versus an IRA
and a brokerage account or justa standalone taxable investment
account.
Mark Robinson (08:05):
Yeah, and why is that?
Because we have optionality ifit's an outside account Outside
being non-401k.
Keli Alo (08:11):
Non-401k Right, okay, correct, okay.
So let's talk about 401k first.
How do you go through as a 401kplan participant and you're
contributing your money monthlydutifully and so forth.
How do you go through andfigure out what you're paying
for your investments that youown and are investing in in your
401k?
Mark Robinson (08:30):
Well, DOL, and I forget the year mandated.
Shame on you.
All of the fees and expenseshave to be disclosed, right down
to the administrative fees andright down to what are the costs
for your account specifically.
Keli Alo (08:46):
So when you say the fees and we're talking there's a
number of different potentialcharges what would those fall
under in terms of how would you?
You know you have managementfees or advisory fees or record
keeping, but what are thosetypes of fees that get Well?
Mark Robinson (09:04):
generically you have management fees, management
fees for the individual orindividuals that are actually at
the portfolio level makingdecisions.
You have all the support thatgoes into the reporting, so that
would be administrative.
What kind of reporting You'vegot legal?
You have administrative costsIn a 401k.
You've got record keeping also,and then of course, you have
(09:27):
trading costs within theportfolio.
I believe certainly in mutualfunds.
That's a trading cost.
So those are generically, andthen we can go into some of the
others, for example the 12B1,kelly, which I'd like you to
just briefly explain what thatis 12B1 fees are associated with
mutual fund and different.
Keli Alo (09:48):
What I'm going to say is share classes of mutual funds
.
So you have, for instance, theA share mutual fund Once upon a
time you had B share mutualfunds you have C share mutual
funds and you have oodles ofother share classes
institutional advisor shares,you name it.
There's all sorts F1, 2, 3, 4,5, 6, in share classes.
(10:08):
Here's the little thing thatmost neophytes don't understand.
If we're looking at, we'll takeGrowth Fund of America from
American Funds, but there are alot of different share classes.
The portfolio and what it ownsdoesn't change Same thing.
Whether you buy the A share, cshare, f1, f6, doesn't matter.
The only difference is what thecharges are for the investor
(10:30):
that owns that share class.
So whenever you think of orhear of a 12B-1 fee, that's
typically associated with whatare called loaded mutual funds.
Peanut Gallery (10:42):
Loaded simply means that I'm a little bit
drunk.
I'm a little bit drunk becauseI'm drinking, drinking, drinking
.
Keli Alo (10:50):
If I sell you an A, b or C share mutual fund me, the
broker is going to receive acommission from the sale of
those mutual funds.
If it's an A share, the 12B1fee will charge a percentage and
that percent goes right to thesalesperson.
So let's say it's a 5%, 3%, 4%charge.
(11:10):
If you invest $1,000 into thatA-share mutual fund, the end of
the first month what you'll seeis that 3%, 4%, 5% charge has
been taken out of your money.
Peanut Gallery (11:23):
Yeah, this is the booth and, Mark, don't freak
out.
We're in your ear, please.
You know you're notexperiencing an out-of-body
experience, but all we'regetting from Kelly's mic is this
Listen.
So you need to get in there,man.
(11:43):
You need to shake it up or getcontrol of this thing.
Booze out.
Mark Robinson (11:49):
So $30 to $50, let's say yeah $1,000.
Keli Alo (11:53):
Yeah, so as a result that's gone, you start with an
A-share fund behind the powercurve, basically at a net
negative return because of thosecharges, and then charge up
front and then, once thosecharges are done, the second
year, there are 12B1 fees stillinside that fund, but it might
be 0.2% a year that's stillbeing sent to the person that
(12:16):
sold you the fund.
Eventually, the A shares kindof sunset, there are no loads
and they become what's called ano-load, a share mutual fund,
meaning that if you put moremoney into it there are no
charges for that new money.
It there are no charges forthat new money.
Usually it's around eight years.
I think, if I recall right,that the A-share load sunsets
goes away and you can invest inthat fund and not be charged
(12:38):
those upfront commissions, so tospeak.
C-share we'll talk about next,which is what's called level
12B1 fee on a C-share.
Let's say the investmentportfolio charges 1.5% a year.
1% is being sent to the personthat sold you that C-share fund.
0.5% really makes up the costof the fund's portfolio
(13:00):
management, record keeping,custodial reporting, all of that
.
That's the 0.5.
The 1% above it that goes tothe person that sold you it and
it's on the fund year in andyear out.
I don't believe there's anysunset for Class C shares.
So you're going to be paying,in this example, instead of 0.5%
a year, you're paying threetimes the amount at 1.5.
(13:21):
Just so, the person that soldyou it gets a commission every
year in the form of what'scalled the 12b1 fee.
So that's the 12b1.
We can talk about B, but Idon't think it's out there
anymore.
Thank, you.
It's the reverse of the A, whichmeans that the person that
sells the B share fund back inthe day would get paid a
commission.
Nothing was taken out of youraccount.
(13:42):
But if you sold the investmentwithin a certain timeframe it
might be, I think, eight to 10years you would get a penalty
charge of in this example, let'ssay, 1.5% to get out of the
fund and invest in another fundand that's charged when you
remove your money.
Mark Robinson (14:01):
Okay.
So if I own an A-share fund andI pay the 5%, is my advisor
able to switch within that fundfamily?
They may have 30 differentfunds in it.
Are they able to make tacticalchanges?
Move me out of the large capgrowth fund to their flagship
large cap value fund or a smallcap or somewhere overseas?
Keli Alo (14:23):
Yeah, are they?
Mark Robinson (14:23):
able to do that for me.
Keli Alo (14:24):
Yeah, so they call it transfer.
So once your money's in theA-share fund, the money let's
say it was $50,000 that youbought the A-share fund and you
want to take 20 of the 50 andmove it to another fund within
the fund family.
So we're talking American funds, so you want to use another
American fund to add to yourcurrent holding maybe a little
(14:46):
bit of diversification.
You can actually transfer themoney to the other A-share and
you won't get charged anadditional commission.
It's just on new money that youget charged commissions on.
Part of the reason why A-sharesexist is to keep the money in
the investment house itself,because it's costly to sell an
A-share after you've beencharged in this example, 4% or
(15:08):
5% commissions on and go to anew family Because, guess what,
you may have additional chargesin that new fund family All
right.
Mark Robinson (15:16):
so that would be on your advisor to put you in a
good fund family.
Keli Alo (15:20):
Yeah, they've got to be looking out for you.
Mark Robinson (15:21):
It's not going to have a negative effect
long-term on your portfolioperformance and won't embarrass
them.
Correct, all right.
So if I'm in a C-share and I'mpaying 1% every year, does my
broker, he or she, able to movewithin that fund family?
Keli Alo (15:36):
They can, but a C-share is a C-share, so if you
move into another C-share, to myknowledge you're going to have
the full fees applied to youraccount, right?
Mark Robinson (15:45):
Within that fund, family.
Keli Alo (15:45):
Within that fund, family, still 1%, still 1, 1.5,
whatever it is.
Mark Robinson (15:48):
So I can do that with much lower costs in this
case one-third lower costs.
Presuming expenses of 50 basispoints or one-half of 1% in my A
share not working off thefront-end commission, I'm just
talking about the existing Onceyou're invested, yeah, the
existing expense ratio.
So I can do that at no cost.
Or I can pay someone thatmanagement fee, also on the fund
(16:12):
, 50 basis points, one half of1%, and I'm going to pay my
advisor twice that 1% for his orher acumen in moving me out of
my large cap growth in thisexample to that flagship large
cap value fund within that fundfamily.
Do some explaining as to wherethat might make some sense?
Kelly.
Keli Alo (16:31):
A-share funds were created as a long-term
investment Mutual funds weredeveloped.
Mark Robinson (16:38):
Mutual funds, A-share mutual funds yeah, yeah,
yeah.
Keli Alo (16:40):
So they're considered long-term, which means you buy
in and you don't get rid of it.
You just buy it, hold it, maybeadd money down the road to it,
but you're not getting in andout of it.
You just buy it, hold it, maybeadd money down the road to it,
but you're not getting in andout of it.
And to some degree I can tellyou that whenever we see and
have seen A-share funds, ourfirst answer is don't get rid of
it.
You've already paid the covercharge and they're good fund
(17:00):
family, so we'll just navigatewithin it so that you don't
create more charges.
The point on the C-share sidewould be this If you have an
advisor and really let's talkabout a broker, because brokers
are paid on commissions, they'renot allowed to charge fees for
their services unless theybecome an investment advisor
representative.
So the C-share side allows thebroker to be a little bit more
(17:24):
allocation.
A changing of allocationsperiodically versus the A-share
For instance, if I put C-sharesin, c-share isn't considered a
long, long-term investmentcompared to the A-share mutual
fund.
As a result, I can move you inand out of other funds.
I could even move you from a Cto an A-share and I got the
commission for a couple of yearson the C and then, hey, there's
(17:45):
a really good fund over here,let's go into the A share.
And then I bang you for anothertwo, three 4% commissions on
top of that, shocking All sortsof stuff.
And we're not saying everybodyout there in the financial
service world is trying to takeadvantage of you, but the best
way to know is to get your handsaround the Fab Five questions.
The one we're talking aboutright now is what are your total
costs to invest?
(18:06):
So when we've done analysis ofpeople's portfolio and typically
it's going to be kind of asecond opinion, an outside
objective view we walk throughand we're looking for advisor
fees.
We're looking for loaded fundsand we'll figure out the cost of
those loaded funds.
We're looking at any otheradditional charges that may be
(18:28):
in those accounts so that we cancobble together the annual
total costs of your investments.
Most of the time people are very, very surprised at the dollar
value of those charges andexpenses.
Oh, really, because they'realways thinking about well, it's
only 0.6%.
(18:48):
Well, it's only 1%.
Well, it's only 1.5%.
It sounds small, but translatethat into the US dollar If
you've got a half a milliondollars or you've got a million
dollars.
Boy, 1% starts getting to be alarge dollar amount, sneaky
turtle.
And so this is where this isabout right With regards to
figuring out your total costs.
Mark Robinson (19:11):
You know, Kelly, when we're talking about the Fab
Five.
And now we're on the lastcomponent of that, which is know
your total cost.
All this within a 401k is whatthe 401k provider and the vendor
have to comply with.
So we are know what you own,why you own it, how you're doing
compared to what, and what aremy total costs.
(19:32):
Let's put that into thefiduciaries for the 401k plan.
What do they have to go through?
What funds are we offeringwithin the plan?
Why are we offering them, howare they doing compared to what?
And managing, control andaccount for all costs associated
with the plan.
Keli Alo (19:50):
That's the Fab Five.
That's right, the Fab Five.
Where does it come from?
Doesn't it come from DOL SEC?
It comes from mushrooms.
Mark Robinson (19:55):
No, no, no, it comes from mushrooms.
Remember you and I with themushrooms.
Keli Alo (19:58):
Yeah, that's where it came from.
Mark Robinson (19:59):
It was out in podcast land, we met a bowl of
mushroom soup with Frenchbaguette.
That's where it came from.
This guy was good Holy balls.
Keli Alo (20:10):
So let's talk a little bit about the different
structures of investments, ordifferent types of investments
right, that people may encounterwhen they're interacting with
financial service industry.
So what are some of those?
We'll take one at a time andkind of talk a little bit about
that Well itemize them.
Mark Robinson (20:29):
We can discuss these.
It would be, for example, anintegrated account stocks,
commissions, bonds, markupmarkdowns, wrapped fees.
That's all I got.
Peanut Gallery (20:40):
That's it.
Yeah, that's all Really.
Mark Robinson (20:42):
Yeah, wow.
Well, don't say wow, withoutcoming up with at least one
other thing.
Keli Alo (20:46):
Well, you got UITs, which are expense ratios on the
mutual funds.
Mark Robinson (20:50):
Oh, yeah, yeah, yeah.
Uits ETFs have the mutual funds.
Keli Alo (20:53):
Limited partnership, I mean, there's all sorts of, I
think, when it comes todelineating the fee structures,
right?
So you have funds, mutual funds, index funds, exchange traded
funds.
They all have some sort ofwhat's called an expense ratio,
which is nothing more thanexpense, right?
And is that fairly easy to findinformation of a mutual fund or
(21:15):
index fund you want to buy tofigure out how much they charge.
Mark Robinson (21:17):
Well, if you're in a 401k.
It indeed is Sure, Because theysummarize that down as a
separate document from theprospectus on the mutual fund
itself.
Keli Alo (21:24):
How wonderful so let's take a harder example, what if
you have an individualretirement account at Schwab or
Fidelity or Pershing LLC orwhatever as the custodian?
The best way to find it, theway that I always use personally
is I like Yahoo Finance andthere are other platforms out
there, but I'm very accustomedto using it.
I know where to go and so Itype in that ticker, I look for
(21:47):
the right fund.
That shows up as I'm typing andI click on it and the summary
page will show you all sorts ofthings to include.
What is the expense ratio ofthis fund?
I've never never, that's a newword, never Naver, that's a new
word, naver, awesome.
So I've never seen an expenseratio that didn't have a higher
(22:11):
authorized charge.
And yet they typically chargewhat's called the net expense
ratio and that's what's actuallybeing charged.
Mark Robinson (22:15):
Kelly, I'm amazed how you can just disturb the
natural atmosphere of thisstudio with some of the words
that you come up with.
It's almost speaking in yourown tongue.
Keli Alo (22:27):
It's a gift.
I'm pretty fabulous when myhair is in rollers.
Mark Robinson (22:32):
So, kelly, let's move over from the expense ratio
on the funds.
We've talked about individualstocks.
There's just the commission onan individual stock, when you
buy it, when you sell it,there's no internal expense
ratio.
Keli Alo (22:44):
And it's really trading costs anymore.
Yeah.
Mark Robinson (22:47):
And the same thing with bonds, except we call
it a markup or a markdown andmany online trading platforms.
It's just a flat fee, like $15or $20 just to buy the bond,
Just to buy the bond I know thatis the case with Fidelity Just
a flat rate for the most part.
So we have stocks and bonds,commissions, markup, markdowns.
(23:07):
We've talked about expenseratios.
Let's get a little more complexand talk about wrap fees and
integrated accounts.
Keli Alo (23:16):
So wrap fees are what are associated with typically
multiple different funds orinvestments being managed by one
house.
So rather than just stocks orjust bonds, they may be managing
stocks, bonds, they may befunds inside it.
There may be individual stocksor bonds inside this, and so a
(23:38):
wrap fee is a fee chargedagainst all those investments in
the account.
So maybe it's a 1% wrap feewhich, hint, hint, nudge, nudge,
is really an advisor fee, butthey call it a wrap fee and then
inside it they theoreticallymanage, buy, sell things on your
behalf.
If they're allowed to, that's awrap fee.
(24:00):
Right?
The integrated account orintegrated managed account is
one that they integratedifferent securities that
historically weren't able to beintegrated.
It was really difficult, maybe15 years ago, to manage direct
stocks and mutual funds in thesame account.
(24:20):
Well, the integrated managedaccounts and the technology and
the trust service platforms outthere have been able to
essentially mature to where Ican integrate stocks, bonds,
cash, mutual funds, exchangetraded funds, all sorts of
things into one account, and itmakes it easier for the consumer
.
And again, we have a wrap feeinside that account, again using
(24:44):
1% as the example.
So if you have funds in thatintegrated managed account,
remember those funds haveexpense ratios.
So, while your stocks may bepurchased at a trade execution
of $3 a trade or something, andyour bonds have their spreads or
their markups or downs, but youhave 60% of your money in these
funds, well, there's expenseratios on those funds.
(25:05):
The question is 1% plus what Isyour funds at 0.9?
Are your funds at 1.3?
Because it's more of anesoteric fund and it's more
expensive to manage.
But that's what the RAP feedoes, whether it's the managed
account or the integratedmanaged account.
Mark Robinson (25:21):
All right, so the integrated, as well as the WRAP
, is an additional advisory feeand there might be some
administrative within that 1%,correct, yeah?
Then we have the expense ratiowithin most pooled funds, mutual
funds, etfs, et cetera.
And then we have commissionswith stock purchases and sales,
as well as potential forfront-end commissions on A-share
(25:44):
mutual funds.
Yes, and mark-up or mark-downson bonds, is that?
Keli Alo (25:50):
pretty much what the expenses are.
Yeah, yeah, I mean, I think soit's certainly enough for what
we're talking about.
There may be some esotericother charges.
Peanut Gallery (25:59):
What.
Keli Alo (26:00):
Are you lost yet?
Oh, what Are you?
Mark Robinson (26:03):
lost yet, oh, do you have a searing commentary
that we can exit out of thefifth of the five of the?
Keli Alo (26:09):
Fab Four Good questions uncover a lot of BS
Well that's good.
Mark Robinson (26:14):
So we end kind of on a high note in that you're
not disparaging your partner oranything of that nature.
Listen if I commented of allthe things that I thought of you
.
I just can't do that.
I know I have all theattributes of disease.
I do know that.
A strong smell, you knowRotting flesh, that's okay, and
that's okay to be almost asocial leper.
Keli Alo (26:34):
Oh, I get that.
So when you attack me, as youdo, as I do, I take my gun and I
go's why I let you do thatEvery time we get done recording
, I go inside and look in themirror and I'm just pleased as
punch with what I see as ajuxtaposition of what I'm
looking at.
(26:54):
For the last hour I'm lookingat you.
Welcome to Bullshit on Stilts, a podcast hosted by two
guys with vast financialbackgrounds and great bullshit
sniffers who call out the clichecrap, spackle and flap doodle
spewed by so-called expertsacross the landscape of
financial advice, identifying asdoctors of bullshitology.
You can count on your esteemedhosts okay, maybe knuckleheads
(00:24):
to bring you a lively, if notdeadly, mix of bullshitology.
You can count on your esteemedhosts okay, maybe knuckleheads
to bring you a lively, if notdeadly, mix of serious analysis,
hijinks and tomfoolery, allwithin a 99.1% bullshit-free
safe space.
Let's get after it.
So welcome to Bullshit onStilts.
Today we're going to be talkingabout the final question within
(00:46):
the Fab Five for investing,which is know your total cost.
Mark Robinson (00:50):
Know your total cost State it otherwise know
what you're paying for and whatthat is.
So there's an itemizationfactor in there instead of just
a summation of total cost.
Keli Alo (01:01):
Yes, yeah, yeah, you're after you actually what
You're after you actually whatYou're after you actually what.
Peanut Gallery (01:06):
What the hell?
Keli Alo (01:06):
What he is trying to say is quote you have to
actually Sometimes hunt for thevarious fees and or costs in
order to actually truly knowwhat those total costs are.
Right, Because they're made upof a number of different
potential charges.
Mark Robinson (01:25):
Right, right.
During our discussion today, wehope to maybe put some light
onto not just what your totalexpenses are, but itemizing some
of those.
And is that a value to you orare you receiving value for that
?
So potential value andactualized value for that cost.
Keli Alo (01:42):
Yeah, I think most people that I've worked with in
the past.
They can't even begin to figureout what the costs are From an
analogy standpoint.
I can drive up to a McDonald'sBurger King and I can see all
the prices.
Peanut Gallery (01:57):
No, you do drive up to.
Keli Alo (01:58):
McDonald's.
Mark Robinson (01:59):
No, I can.
Keli Alo (01:59):
I've never done that in my life.
I don't know what you'retalking about.
I really don't eat fast foodever, except for almost every
day, but still that's nothing.
But the point is is that thereare so many places that you go
and you can look at a price andbefore you buy it you can
discern whether you find thatworth buying or not.
And yet in the financialservice world, both insurance
(02:23):
and investments it's not thateasy to actually look up all the
prices.
Do they disclose it, maybe, butare you going to read 70 pages
worth of legal written documentsto figure out?
Oh, that's what they'recharging me for.
X, y and Z, I think the vastmajority of people never even
open up a fund prospectus, butit qualifies as complying with
(02:45):
the mandate for transparency.
Kelly.
Yes, well, it qualifies forwell.
I told you that.
I didn't tell you that, but Isent you the prospectus and I
said you should read throughthis.
I've disclosed it.
Are you fucking kidding me?
Mark Robinson (03:00):
And we're not saying that many of these
expenses don't have value.
Many do have value.
But you, as a consumer or aninvestor, you have to determine
is there real value there foryou and, if not, do something
about it.
That's right.
Peanut Gallery (03:13):
Do it.
Keli Alo (03:15):
Just do it.
In fact, it kind of connectsback to the other Fab Five
questions, right, when it comesto how am I doing?
Compared to what?
If I don't know my fees andlet's say I'm underperforming or
maybe I'm outperforming, arethe fees appropriate for the
kind of performance I'machieving with an advisor?
(03:35):
Without an advisor, whateveryour circumstance are, and if
you don't know what you paid forsomething you can't really know
, is there a value there?
Is that fair to?
Mark Robinson (03:43):
say yeah.
Is there a qualitative orquantitative justification for
that fee?
Keli Alo (03:49):
Right.
In fact, if you take thisanother step and say look,
different consumers purchasethings differently and for
different reasons.
Even if they purchase the sameexact item, it's generally going
to be for a different reason.
So when I was growing up in the80s, as you were growing up.
As I'm was growing up in the 80s, as you are growing up as I'm
still growing up and I'm allowedto wear jeans once every while.
(04:09):
I mean, I'm in a jumper most ofthe time but still sometimes I
get to wear jeans.
Well, when I was growing up,levi's it was a jeans that you
bought and they were like Idon't know, 28 bucks a pair.
And then all of a sudden, inthe 80s, calvin Klein, gerbos
all these jeans are coming outand they're priced at $70, $80,
$100.
And this is in the 80s.
Were they a better jean than aLevi?
(04:31):
No, not really.
What are you buying?
Just a brand that you can showpeople that you have.
But from a value standpoint,was it more or less valuable?
As a consumer, you get todecide whether you're going to
buy the Calvin Klein jean or theLevi or the Lee jeans or the
Wrangler and, by the way, yousee all the prices there and you
get to try them on and you getto walk out of the store
(04:52):
purchasing what you really wantand you find value in.
In investment land, it's notthat easy, because it's hard to
figure out what cost you'reactually paying for until you
start knowing the different feesthat might be nested inside
that investment portfolio,whether it's a 401k, a brokerage
account, an IRA or anythingelse In economics it's called
(05:14):
marginal value.
Correct.
Now everybody's really turningin because whenever you say
economics, people are like oh,let me listen.
Mark Robinson (05:22):
So X for me, service or product at this price
point, it's a value to me.
Add another 50 cents to it, orone half of 1%.
Nah, it's not a value, that'sright, and I believe that's
called the marginal orincremental increase in value.
And there's a point where,uh-uh, no more, yeah, same thing
(05:42):
with your investment accounts.
Keli Alo (05:43):
Same thing with your investment.
So to practically apply this,let's say that your cost to
invest you figured this out andwe're going to get to the cost.
Let's say it's two percentagepoints that you're paying in
total cost to invest and whenyou're looking at how you're
doing and you're comparing it toa benchmark for yourself, you
find that you're kind ofunderperforming.
(06:04):
Do you still want to continueto pay two percentage points for
investments if you'recontinuously underperforming?
Does that make sense?
It does make sense.
You're looking at me like I gota horn growing.
Mark Robinson (06:15):
No, no, no, okay, no, just lobsters coming out of
your ears.
No, and I think that's veryimportant for you to bring that
up, because once you recognizethat you are underperforming and
let's say it's by 1% a year andyou, through your own analysis,
you regard that you're payingtoo much in fees, and let's say
(06:36):
that's 50 basis points, or onehalf of 1%, and you have
$100,000 invested.
So now we're looking at $1,500a year.
What are you going to do aboutit?
You know that you'reunderperforming by your own
assessment, or paying a littlebit too much in expenses.
What are you going to do aboutit?
When does that just becomeacademic or an observation and
(07:01):
something that's actionable?
Keli Alo (07:02):
Yeah, yeah, in fact, there's a lot of people that
we've worked with through thebrainstorming process that we
work on and helping them figureout what they want to do.
Does it make sense, maybeexamine different options and
then they can go out andpurchase whatever they want with
whomever they want, right, butso many people because they
don't know what they own, whythey own it, how's it doing
(07:24):
compared to what, and what aremy total costs?
We actually do a report forpeople to just help walk them
through all the answers if theydon't have the chops to do it or
they're not inclined to do that, because it's still confusing.
But boy, when we get done withthat assessment with them and we
walk them through, what theyfind is the most frequent
(07:45):
response we get is I had no idea.
So let's kind of I think we'resetting this up right, but let's
get into.
How do you identify the cost toinvest?
And I think it's different ifit's a 401k plan versus an IRA
and a brokerage account or justa standalone taxable investment
account.
Mark Robinson (08:05):
Yeah, and why is that?
Because we have optionality ifit's an outside account Outside
being non-401k.
Keli Alo (08:11):
Non-401k Right, okay, correct, okay.
So let's talk about 401k first.
How do you go through as a 401kplan participant and you're
contributing your money monthlydutifully and so forth.
How do you go through andfigure out what you're paying
for your investments that youown and are investing in in your
401k?
Mark Robinson (08:30):
Well, DOL, and I forget the year mandated.
Shame on you.
All of the fees and expenseshave to be disclosed, right down
to the administrative fees andright down to what are the costs
for your account specifically.
Keli Alo (08:46):
So when you say the fees and we're talking there's a
number of different potentialcharges what would those fall
under in terms of how would you?
You know you have managementfees or advisory fees or record
keeping, but what are thosetypes of fees that get Well?
Mark Robinson (09:04):
generically you have management fees, management
fees for the individual orindividuals that are actually at
the portfolio level makingdecisions.
You have all the support thatgoes into the reporting, so that
would be administrative.
What kind of reporting You'vegot legal?
You have administrative costsIn a 401k.
You've got record keeping also,and then of course, you have
(09:27):
trading costs within theportfolio.
I believe certainly in mutualfunds.
That's a trading cost.
So those are generically, andthen we can go into some of the
others, for example the 12B1,kelly, which I'd like you to
just briefly explain what thatis 12B1 fees are associated with
mutual fund and different.
Keli Alo (09:48):
What I'm going to say is share classes of mutual funds
.
So you have, for instance, theA share mutual fund Once upon a
time you had B share mutualfunds you have C share mutual
funds and you have oodles ofother share classes
institutional advisor shares,you name it.
There's all sorts F1, 2, 3, 4,5, 6, in share classes.
(10:08):
Here's the little thing thatmost neophytes don't understand.
If we're looking at, we'll takeGrowth Fund of America from
American Funds, but there are alot of different share classes.
The portfolio and what it ownsdoesn't change Same thing.
Whether you buy the A share, cshare, f1, f6, doesn't matter.
The only difference is what thecharges are for the investor
(10:30):
that owns that share class.
So whenever you think of orhear of a 12B-1 fee, that's
typically associated with whatare called loaded mutual funds.
Peanut Gallery (10:42):
Loaded simply means that I'm a little bit
drunk.
I'm a little bit drunk becauseI'm drinking, drinking, drinking
.
Keli Alo (10:50):
If I sell you an A, b or C share mutual fund me, the
broker is going to receive acommission from the sale of
those mutual funds.
If it's an A share, the 12B1fee will charge a percentage and
that percent goes right to thesalesperson.
So let's say it's a 5%, 3%, 4%charge.
(11:10):
If you invest $1,000 into thatA-share mutual fund, the end of
the first month what you'll seeis that 3%, 4%, 5% charge has
been taken out of your money.
Peanut Gallery (11:23):
Yeah, this is the booth and, Mark, don't freak
out.
We're in your ear, please.
You know you're notexperiencing an out-of-body
experience, but all we'regetting from Kelly's mic is this
Listen.
So you need to get in there,man.
(11:43):
You need to shake it up or getcontrol of this thing.
Booze out.
Mark Robinson (11:49):
So $30 to $50, let's say yeah $1,000.
Keli Alo (11:53):
Yeah, so as a result that's gone, you start with an
A-share fund behind the powercurve, basically at a net
negative return because of thosecharges, and then charge up
front and then, once thosecharges are done, the second
year, there are 12B1 fees stillinside that fund, but it might
be 0.2% a year that's stillbeing sent to the person that
(12:16):
sold you the fund.
Eventually, the A shares kindof sunset, there are no loads
and they become what's called ano-load, a share mutual fund,
meaning that if you put moremoney into it there are no
charges for that new money.
It there are no charges forthat new money.
Usually it's around eight years.
I think, if I recall right,that the A-share load sunsets
goes away and you can invest inthat fund and not be charged
(12:38):
those upfront commissions, so tospeak.
C-share we'll talk about next,which is what's called level
12B1 fee on a C-share.
Let's say the investmentportfolio charges 1.5% a year.
1% is being sent to the personthat sold you that C-share fund.
0.5% really makes up the costof the fund's portfolio
(13:00):
management, record keeping,custodial reporting, all of that
.
That's the 0.5.
The 1% above it that goes tothe person that sold you it and
it's on the fund year in andyear out.
I don't believe there's anysunset for Class C shares.
So you're going to be paying,in this example, instead of 0.5%
a year, you're paying threetimes the amount at 1.5.
(13:21):
Just so, the person that soldyou it gets a commission every
year in the form of what'scalled the 12b1 fee.
So that's the 12b1.
We can talk about B, but Idon't think it's out there
anymore.
Thank, you.
It's the reverse of the A, whichmeans that the person that
sells the B share fund back inthe day would get paid a
commission.
Nothing was taken out of youraccount.
(13:42):
But if you sold the investmentwithin a certain timeframe it
might be, I think, eight to 10years you would get a penalty
charge of in this example, let'ssay, 1.5% to get out of the
fund and invest in another fundand that's charged when you
remove your money.
Mark Robinson (14:01):
Okay.
So if I own an A-share fund andI pay the 5%, is my advisor
able to switch within that fundfamily?
They may have 30 differentfunds in it.
Are they able to make tacticalchanges?
Move me out of the large capgrowth fund to their flagship
large cap value fund or a smallcap or somewhere overseas?
Keli Alo (14:23):
Yeah, are they?
Mark Robinson (14:23):
able to do that for me.
Keli Alo (14:24):
Yeah, so they call it transfer.
So once your money's in theA-share fund, the money let's
say it was $50,000 that youbought the A-share fund and you
want to take 20 of the 50 andmove it to another fund within
the fund family.
So we're talking American funds, so you want to use another
American fund to add to yourcurrent holding maybe a little
(14:46):
bit of diversification.
You can actually transfer themoney to the other A-share and
you won't get charged anadditional commission.
It's just on new money that youget charged commissions on.
Part of the reason why A-sharesexist is to keep the money in
the investment house itself,because it's costly to sell an
A-share after you've beencharged in this example, 4% or
(15:08):
5% commissions on and go to anew family Because, guess what,
you may have additional chargesin that new fund family All
right.
Mark Robinson (15:16):
so that would be on your advisor to put you in a
good fund family.
Keli Alo (15:20):
Yeah, they've got to be looking out for you.
Mark Robinson (15:21):
It's not going to have a negative effect
long-term on your portfolioperformance and won't embarrass
them.
Correct, all right.
So if I'm in a C-share and I'mpaying 1% every year, does my
broker, he or she, able to movewithin that fund family?
Keli Alo (15:36):
They can, but a C-share is a C-share, so if you
move into another C-share, to myknowledge you're going to have
the full fees applied to youraccount, right?
Mark Robinson (15:45):
Within that fund, family.
Keli Alo (15:45):
Within that fund, family, still 1%, still 1, 1.5,
whatever it is.
Mark Robinson (15:48):
So I can do that with much lower costs in this
case one-third lower costs.
Presuming expenses of 50 basispoints or one-half of 1% in my A
share not working off thefront-end commission, I'm just
talking about the existing Onceyou're invested, yeah, the
existing expense ratio.
So I can do that at no cost.
Or I can pay someone thatmanagement fee, also on the fund
(16:12):
, 50 basis points, one half of1%, and I'm going to pay my
advisor twice that 1% for his orher acumen in moving me out of
my large cap growth in thisexample to that flagship large
cap value fund within that fundfamily.
Do some explaining as to wherethat might make some sense?
Kelly.
Keli Alo (16:31):
A-share funds were created as a long-term
investment Mutual funds weredeveloped.
Mark Robinson (16:38):
Mutual funds, A-share mutual funds yeah, yeah,
yeah.
Keli Alo (16:40):
So they're considered long-term, which means you buy
in and you don't get rid of it.
You just buy it, hold it, maybeadd money down the road to it,
but you're not getting in andout of it.
You just buy it, hold it, maybeadd money down the road to it,
but you're not getting in andout of it.
And to some degree I can tellyou that whenever we see and
have seen A-share funds, ourfirst answer is don't get rid of
it.
You've already paid the covercharge and they're good fund
(17:00):
family, so we'll just navigatewithin it so that you don't
create more charges.
The point on the C-share sidewould be this If you have an
advisor and really let's talkabout a broker, because brokers
are paid on commissions, they'renot allowed to charge fees for
their services unless theybecome an investment advisor
representative.
So the C-share side allows thebroker to be a little bit more
(17:24):
allocation.
A changing of allocationsperiodically versus the A-share
For instance, if I put C-sharesin, c-share isn't considered a
long, long-term investmentcompared to the A-share mutual
fund.
As a result, I can move you inand out of other funds.
I could even move you from a Cto an A-share and I got the
commission for a couple of yearson the C and then, hey, there's
(17:45):
a really good fund over here,let's go into the A share.
And then I bang you for anothertwo, three 4% commissions on
top of that, shocking All sortsof stuff.
And we're not saying everybodyout there in the financial
service world is trying to takeadvantage of you, but the best
way to know is to get your handsaround the Fab Five questions.
The one we're talking aboutright now is what are your total
costs to invest?
(18:06):
So when we've done analysis ofpeople's portfolio and typically
it's going to be kind of asecond opinion, an outside
objective view we walk throughand we're looking for advisor
fees.
We're looking for loaded fundsand we'll figure out the cost of
those loaded funds.
We're looking at any otheradditional charges that may be
(18:28):
in those accounts so that we cancobble together the annual
total costs of your investments.
Most of the time people are very, very surprised at the dollar
value of those charges andexpenses.
Oh, really, because they'realways thinking about well, it's
only 0.6%.
(18:48):
Well, it's only 1%.
Well, it's only 1.5%.
It sounds small, but translatethat into the US dollar If
you've got a half a milliondollars or you've got a million
dollars.
Boy, 1% starts getting to be alarge dollar amount, sneaky
turtle.
And so this is where this isabout right With regards to
figuring out your total costs.
Mark Robinson (19:11):
You know, Kelly, when we're talking about the Fab
Five.
And now we're on the lastcomponent of that, which is know
your total cost.
All this within a 401k is whatthe 401k provider and the vendor
have to comply with.
So we are know what you own,why you own it, how you're doing
compared to what, and what aremy total costs.
(19:32):
Let's put that into thefiduciaries for the 401k plan.
What do they have to go through?
What funds are we offeringwithin the plan?
Why are we offering them, howare they doing compared to what?
And managing, control andaccount for all costs associated
with the plan.
Keli Alo (19:50):
That's the Fab Five.
That's right, the Fab Five.
Where does it come from?
Doesn't it come from DOL SEC?
It comes from mushrooms.
Mark Robinson (19:55):
No, no, no, it comes from mushrooms.
Remember you and I with themushrooms.
Keli Alo (19:58):
Yeah, that's where it came from.
Mark Robinson (19:59):
It was out in podcast land, we met a bowl of
mushroom soup with Frenchbaguette.
That's where it came from.
This guy was good Holy balls.
Keli Alo (20:10):
So let's talk a little bit about the different
structures of investments, ordifferent types of investments
right, that people may encounterwhen they're interacting with
financial service industry.
So what are some of those?
We'll take one at a time andkind of talk a little bit about
that Well itemize them.
Mark Robinson (20:29):
We can discuss these.
It would be, for example, anintegrated account stocks,
commissions, bonds, markupmarkdowns, wrapped fees.
That's all I got.
Peanut Gallery (20:40):
That's it.
Yeah, that's all Really.
Mark Robinson (20:42):
Yeah, wow.
Well, don't say wow, withoutcoming up with at least one
other thing.
Keli Alo (20:46):
Well, you got UITs, which are expense ratios on the
mutual funds.
Mark Robinson (20:50):
Oh, yeah, yeah, yeah.
Uits ETFs have the mutual funds.
Keli Alo (20:53):
Limited partnership, I mean, there's all sorts of, I
think, when it comes todelineating the fee structures,
right?
So you have funds, mutual funds, index funds, exchange traded
funds.
They all have some sort ofwhat's called an expense ratio,
which is nothing more thanexpense, right?
And is that fairly easy to findinformation of a mutual fund or
(21:15):
index fund you want to buy tofigure out how much they charge.
Mark Robinson (21:17):
Well, if you're in a 401k.
It indeed is Sure, Because theysummarize that down as a
separate document from theprospectus on the mutual fund
itself.
Keli Alo (21:24):
How wonderful so let's take a harder example, what if
you have an individualretirement account at Schwab or
Fidelity or Pershing LLC orwhatever as the custodian?
The best way to find it, theway that I always use personally
is I like Yahoo Finance andthere are other platforms out
there, but I'm very accustomedto using it.
I know where to go and so Itype in that ticker, I look for
(21:47):
the right fund.
That shows up as I'm typing andI click on it and the summary
page will show you all sorts ofthings to include.
What is the expense ratio ofthis fund?
I've never never, that's a newword, never Naver, that's a new
word, naver, awesome.
So I've never seen an expenseratio that didn't have a higher
(22:11):
authorized charge.
And yet they typically chargewhat's called the net expense
ratio and that's what's actuallybeing charged.
Mark Robinson (22:15):
Kelly, I'm amazed how you can just disturb the
natural atmosphere of thisstudio with some of the words
that you come up with.
It's almost speaking in yourown tongue.
Keli Alo (22:27):
It's a gift.
I'm pretty fabulous when myhair is in rollers.
Mark Robinson (22:32):
So, kelly, let's move over from the expense ratio
on the funds.
We've talked about individualstocks.
There's just the commission onan individual stock, when you
buy it, when you sell it,there's no internal expense
ratio.
Keli Alo (22:44):
And it's really trading costs anymore.
Yeah.
Mark Robinson (22:47):
And the same thing with bonds, except we call
it a markup or a markdown andmany online trading platforms.
It's just a flat fee, like $15or $20 just to buy the bond,
Just to buy the bond I know thatis the case with Fidelity Just
a flat rate for the most part.
So we have stocks and bonds,commissions, markup, markdowns.
(23:07):
We've talked about expenseratios.
Let's get a little more complexand talk about wrap fees and
integrated accounts.
Keli Alo (23:16):
So wrap fees are what are associated with typically
multiple different funds orinvestments being managed by one
house.
So rather than just stocks orjust bonds, they may be managing
stocks, bonds, they may befunds inside it.
There may be individual stocksor bonds inside this, and so a
(23:38):
wrap fee is a fee chargedagainst all those investments in
the account.
So maybe it's a 1% wrap feewhich, hint, hint, nudge, nudge,
is really an advisor fee, butthey call it a wrap fee and then
inside it they theoreticallymanage, buy, sell things on your
behalf.
If they're allowed to, that's awrap fee.
(24:00):
Right?
The integrated account orintegrated managed account is
one that they integratedifferent securities that
historically weren't able to beintegrated.
It was really difficult, maybe15 years ago, to manage direct
stocks and mutual funds in thesame account.
(24:20):
Well, the integrated managedaccounts and the technology and
the trust service platforms outthere have been able to
essentially mature to where Ican integrate stocks, bonds,
cash, mutual funds, exchangetraded funds, all sorts of
things into one account, and itmakes it easier for the consumer
.
And again, we have a wrap feeinside that account, again using
(24:44):
1% as the example.
So if you have funds in thatintegrated managed account,
remember those funds haveexpense ratios.
So, while your stocks may bepurchased at a trade execution
of $3 a trade or something, andyour bonds have their spreads or
their markups or downs, but youhave 60% of your money in these
funds, well, there's expenseratios on those funds.
(25:05):
The question is 1% plus what Isyour funds at 0.9?
Are your funds at 1.3?
Because it's more of anesoteric fund and it's more
expensive to manage.
But that's what the RAP feedoes, whether it's the managed
account or the integratedmanaged account.
Mark Robinson (25:21):
All right, so the integrated, as well as the WRAP
, is an additional advisory feeand there might be some
administrative within that 1%,correct, yeah?
Then we have the expense ratiowithin most pooled funds, mutual
funds, etfs, et cetera.
And then we have commissionswith stock purchases and sales,
as well as potential forfront-end commissions on A-share
(25:44):
mutual funds.
Yes, and mark-up or mark-downson bonds, is that?
Keli Alo (25:50):
pretty much what the expenses are.
Yeah, yeah, I mean, I think soit's certainly enough for what
we're talking about.
There may be some esotericother charges.
Peanut Gallery (25:59):
What.
Keli Alo (26:00):
Are you lost yet?
Oh, what Are you?
Mark Robinson (26:03):
lost yet, oh, do you have a searing commentary
that we can exit out of thefifth of the five of the?
Keli Alo (26:09):
Fab Four Good questions uncover a lot of BS
Well that's good.
Mark Robinson (26:14):
So we end kind of on a high note in that you're
not disparaging your partner oranything of that nature.
Listen if I commented of allthe things that I thought of you
.
I just can't do that.
I know I have all theattributes of disease.
I do know that.
A strong smell, you knowRotting flesh, that's okay, and
that's okay to be almost asocial leper.
Keli Alo (26:34):
Oh, I get that.
So when you attack me, as youdo, as I do, I take my gun and I
go's why I let you do thatEvery time we get done recording
, I go inside and look in themirror and I'm just pleased as
punch with what I see as ajuxtaposition of what I'm
looking at.
(26:54):
For the last hour I'm lookingat you.
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