A Quant’s Take on Meme Stocks

Published Jun 25, 2021, 6:55 PM

Dimensional Fund Advisors, which manages $637 billion, was one of the first firms to take seminal academic financial research off of the campus and put it to work in the real-world art of managing money. How does a head-in-the-books firm like that respond now that retail day traders are in the driver’s seat and the market action often feels like a frat party rather than a lecture hall? Wes Crill, the head of strategists at Dimensional, talks about that as well as a variety of other market topics, such as the rotation back into growth from value and how to read the inflation tea leaves. 

Mentioned in this podcast:

Dimensional Converts $29 Billion of Mutual Funds Into ETFs

Fed Satisfies Inflation Hawks Without Lifting a Finger

Hello, and welcome to What Goes Up, a weekly markets podcast. My name is Mike Reagan and I'm a senior editor at Bloomberg. This week on the show, has all this rotation made you see sick? Yet? Earlier this year was the massive rotation out of big tech and other growth stocks and into more cyclical and value oriented stocks. But a whip of hawkishness from the Federal Reserve has caused everyone to sort of jumped back to the other side of the boat again and growth is outperforming once again, at least for now. Now some people are saying the market is falling for a head fake from the Fed. But we want to get into it with the head strategist at a major pioneering quantitative fund manager. But first I want to bring in our co host. And sorry to all the Charlie Pellet fans out there, but no Charlie Pellet intro this this week. And that's because as this co host is, there's no mystery about her. She's been on the show before and gotten to Charlie Pellet treatment. Her name is vill Donna hi Rich. She is a cross asset reporter at Bloomberg. Vill Donna, what do you have to say for yourself, well, I wouldn't be opposed if we had another Charlie Pellet treatment. Here you are. You're disappointed, aren't you? Everyone loves the Charlie Charlie. All right, I'm sorry. I apologize next time, but I will put out Vill Donna, as many of you know, is what I consider the chief crazy things correspondent for what goes up. Many of the crazy things I've brought to the show have been courtesy of Bill Donna. You're actually very sane and level headed for someone who is such an expert in crazy things. Though, I gotta say they're just really interesting to read. And I have what I think is a pretty good one you know today. Okay, good, I got a good one. So hopefully we don't have the same one that that would be awkward, and by all means, if you see something crazy, a reminder that we have a podcast hotline that's just sitting here waiting for you to leave us a voicemail. Vil Donna, our our old friends Sarah promised she would call the hotline and leave us some crazy things. But um alas so far, I'm like a kid on Christmas checking the voicemail and I'm nothing in my stocking. But I'm thinking maybe she's just forgotten the numbers, so I'll give the number. It's uh six four or six three two four three four nine. Oh so, please don't give us a call, leave us a voicemail and maybe we'll play it on the show. But let's get to that. Guest, as I said, he is the head of investment strategists at a big fund manager, uh that manages about six d and thirty seven billion dollars in assets. His name is West Krill, head strategist at Dimensional Fund Advisors. West, Welcome to the show, excited to be here, Thanks for having me today. Absolutely absolutely, West, I've got good news. I'm gonna start off with what we call in the industry, a softball question for you, uh so, so that's my gift to you today. But I'm just want to talk a little bit from your perspective about the approach Dimensional takes to investing. Now. Obviously, Dement sal as I said in the intro, considered a very pioneering firm that was sort of one of the first to be at the intersection of kind of the academic thinking about markets and actually managing money using those types of approaches. In the real world. For example, the founders studied under Eugene Fama and Kenneth's French Um. But I'm curious just for you to explain to us what is dimensionals approach to investing. Yeah, of course, So you know, we're founded in nineteen eighty one and we've always been built on implementing the great ideas in finance, and to your point, you know, a lot of that is cultivating these deep connections with some of the luminaries in the academic world Fama and French, like you mentioned, Robert Merton, Robert Novi, Mars. So that's been really instrumental in the way that we've built our firm. And then a central tenant to our investment philosophy is our deep seated belief in markets. So what that means is when we go to UH seek to outperform markets, we do so not by trying to outguess market prices and figure out where they've gone wrong, but by emphasizing certain groups of securities with higher expected returns based on research, very rigorous research from the academic community. And of course you know, we have a fanatical emphasis on the role of implementation. We feel that's a really critical level of expertise to have when you're trying to translate these ideas from the academic world into real world value add investments for our clients. I know you guys recently converted a bunch of your mutual funds into e t s and it was a really big deal in the world of ets, and I'd love to chat about that in a second, but maybe you can tell us a little bit about what types of things your clients and people who've been having conversations with recently have been asking you about them what's been on their minds? And I asked, because I'm thinking of all of the fund manager surveys and all these different surveys that we tend to see from from week to week, where some of the topics recently, I feel like have been changing. Where the virus used to be at the top of of mind for a lot of people and it's sort of fallen off and now it's more fed and questions around inflation, yes, certainly, I mean those come up in conversations. I would say the foremost conversation topic for us, and this has been the case really for years, is the performance of small cat value versus large cap growth, And you know, it's been interesting as you've sort of seen a cee saw in terms of the sentiment behind those questions. For a while, it was, you know, small cap value underperforming large growth concerns around that, and then when you had small cat value coming roaring back and people would start to ask how much longer can this last? And then you know, now you see that at least in this past quarter as small value has been underperforming large growth again. So you know, I think it reinforces a couple of different billion points for investors investors to keep in mind. The first is just the uncertainty around these premiums. So you know, the premise behind the small cat value stocks having higher expectory turns in the market is a very simple one. It's the idea that you're paying less for a stream of future cash flows, and that's a very evergreen concept. But we also know that stock returns are volatile, and these premiums can be negative for sustained periods of time, but they can also show up in really large magnitudes really quickly. The return difference between small value and large growth in the US as of March thirty one over the trailing six month period was sixty two percentage points. That's one of the largest return deltas over such a short period of time ever. But it's not uncommon for these premiums to show up in a hurry, and this has obvious implications for investors. It means that you need to be disciplined in terms of your approach to capturing these and it also means from an investment management standpoint, we need to be continuously pursuing these groups of stocks and a very accurate way, so that our investors know what they can expect from our investment approach, you know. So I want to talk about that what Vildana mentioned, the conversion of of some of your funds into et apps. I mean, you're still cominently a mutual fund manager, but you've you know, began the process of converting some into e t f s, And to me, I wonder, you know, in the bigger scheme of things, that seems to me like perhaps part of the natural evolution of quant investing. You know, I think back to one when you were founded, but I can't imagine the man hours and the labor required to do just a simple regression study. Say, going back you know, a few decades. It must have been, you know, and an army of of people with visors and calculators. There's all Texas instrument calculators. However, it was done. But is that part of it? Just that you know, uh, the computing power and the brain power on Wall Street is kind of caught up with the quant uh sort of strategies, and you know, it's now a lot you're able to do it a lot cheaper, able to put it in an ETF rapper, and and do it at a much less cost basis than than you would say, years ago in the equal fund space. Is does that sound right? Is it? Is it kind of part of that evolution? Well, I think that, you know, the E t F conversion was was a very exciting thing for us because that conversion, that type of event had not happened at that scale before. And those particular strategies that were converted are managed with an eye towards minimizing the tax impact for investors, and the et F rapper gives you another tool in the toolkit, uh to mitigate or to increase the tax efficiency of those strategies. And so that was a very important thing for us. But we like to say we're wrapper agnostic. You know, we believe both the mutual fund and et f rappers those type of vehicles do have a place depending on an investor's objectives. But I think one of the things you're kind of hinting at with this what i'll call the rise and systematic investing. You know, that's something that we have noticed, even going back further again to your point. You know, you mentioned how the ability to identify factors within the investment data, uh is a lot easier now that it used to be. You know, We're used to have computers the size of entire rooms like the and I'm sitting in that you needed to run regressions to identify these kind of parameters. Uh. Yeah, Now it's much timplt. You could probably do it on a smartphone. At this point. There is actually an academic by the name of Campbell Harvey who keeps track of all of the factors that have been identified in the academic literature, and last time I checked, it was up over five hundred. Uh And in fact, another academic named John Cochrane refers to this as the factors zoo Um. Now, this is not to say that there's that many, maybe hundreds of different distinct sources of expected returns. A lot of these are probably variations of the same economic concept that are repackaged, but I think it does bring the conversation back to the importance of implementation. It's one thing to identify a group of securities that, based on historical data while outperform in a simulation. Bringing that to a real world investment solution where you deliver the outperformance net of implementation costs is a different story altogether. And I'll give you one really simple example. The Russell two thousand, a small cap index we know from the research as small cap secure. These have higher expected returns than large caps. Well, the small cap Russell two thousand index has historically underperformed the Russell one thousand index going back to seventy nine. So that's one example. We're just identifying a group of stocks you expect to have higher returns. Doesn't always pan out an investment vehicle. You really need this level of expertise and the research, design, management, and last but not least, trading of a strategy to capture these sources of higher expector returns for investors. I want to ask you and Mike and I were chatting about this right before our conversation. But when it comes to some of those factors, does it feel like all of the good ones have already been sort of discovered and exploited and repackages, you say, or is there something else out there that you you're finding really exciting? I think that's certainly a challenge, you know, especially let's say you're a finance student these days compared to one thirty years ago, to find something that hasn't already been discovered. There's certainly the incentive to try and look for something that's new. Um, But I think that, you know, just because some of these core kind of acid allocation determining building blocks like size, value or profitability, you know, even if you can't add on to those necessarily, there's a lot of other inputs into a strategy that need to be taken into account. And that's where you know, some of the really exciting research has been done, uh, you know, internally with our research team, where we look at things like this, where you find shorter term drivers of expected returns that are really tradeoffs that you have to balance against things like size, value or profitability. You know, if you think about a value strategy, how to stocks often become value stocks while it's following a period of relative underperformance versus their peers. What do we know from the phenomenon of momentum within the cross section of stocks. Well, stocks that have had relatively poor returns uh in previous periods tend to continue to have relatively poor returns in the short run. And so addition, all sources of information about expector returns like that are really crucial to Again, even for these well established factors like size, value, and profitability, making sure that we capture our fair share of those still a very important part of implementation. Uh, what's I'm great glad you brought up Cam Harvey. We've had him on the show a few times. Not in a while, though, But listeners, if you wanna hear more of the thoughts of Camp, scroll back on the on the phone a few a year or two and we had a couple of good episodes with Cam. I getting back on. But wes I wanna talk about what I What I mentioned at the top of the show is basically what appears to be kind of a reversal in the rotation back to growth and tech leadership. Now, Uh, maybe the thinking is the FED took a little bit of the wind out of the sales of the reflation trade that was boosting Uh, you know, the banks, the energy companies, the real cyclical and value sectors of the market. How are you thinking about that? Is uh, you know, and Bildad has written about this and some others that a lot of people think this is kind of a wrong react and from the market to rotate this aggressively back into growth, that there's still some jewice left to be squeezed out of the value and cyclical trade. How are you thinking about it? Well, we can start with first principles when it comes to why we would believe any value premium or size premium or profitability premium in the first place. And it's based on the fact that there are differences and discount rates across stocks. Right, Investors are going to require different rates of return to hold different stocks. Just like if you had a whole population of people went to the bank for alone, they're likely to get different interest rates from the bank, and so it's similar that we would expect something like that to be true for first stock discount rates, size, value, and profitability are just based on using price combined with fundamentals to identify these differences and expect to returns, which means that every single day, based on the information known to market participants, there's some stocks with higher expected returns than others. And that's what we're talking about with these expected premiums, such as the value premium. So we expect this premium every day, and I know from the data that these premiums can be volatile. If you just look on a rolling you know, one year basis about of twelve month periods going back to the nineteen twenties, and the US growth is outperformed value, and I think that really hints at this notion of the difference between realized returns and expector returns. So many people had attributed the strong performance of growth stocks versus value and you know, kind of that decade leading up to the big turnaround for value recently, and they kind of laid that at the feet of the FED. But when you look at the performance of those growth stocks over that period where they were churning out twenty per year in terms of returns, you have to ask yourself as an investor, do I believe the expected return for this asset classes that seems awfully high and I think we would look at that and say a good portion of that was an unexpected component of the return that might have been based on great success for some of these companies, that could have been unexpected to a certain extent. Certainly when you look at their valuation as they were creeping up, they were still are very very high. Um. So, when I think about is the question of is there any juice left exqueeze from this limon? My question would be, well, what's changed about your expectation for the value premium? As long as you believe that low prices associated with higher expector returns, there's plenty of juice left to squeeze because we still expect a value premium every single day, you know us. I'm curious how your approach fits in with the year like this, Uh, you know, and I know, being anchored in sort of the academic approach of investing and very much anchored to the efficient market hypothesis at dimensional. Then boy, we enter a year like one, right, and we've got all of a sudden, all the discount brokerages just completely get rid of commissions. You've got all these people stuck at home. Uh, they can't go out. They can't bet on sports. You know, they've got a lot of spare cash, whether it be because of that or because of the stimulus from the government and whatnot. And we have this phenomenon like the at its stocks just going going absolutely nuts. And it's hard to for me to sort of wrap my head around how a student of sort of efficient market theory can can kind of operate in that environment. I mean, Um, does it change your approach at all to see this type of behavior? And half jokingly, I asque is there perhaps a Reddit factor that can be exploited? You know, is there a Wall Street bets factor that you could somehow quantify and and try to play with and and feel free to tell me I'm crazy for thinking that. I've I've heard it before, but I'm just curious how you think about a year like this, Um, with that academic background, that efficient markets theory background, Uh, with the market that's a lot of times just being driven by day traders, you know, place some trades based on what they read on Reddit and what they think the crowd, where they think the crowd is going to go next. Well, I think it reinforces the need for flexibility within your investment approach and having a daily process. So you know, when we look at the price change for a visual securities, I mean we know it can happen because of maybe a change in the expectation for the future for the cash flows of the firm. It could reflect a change in the discount rate that's assigned to those expected future cash flows. Very difficult, if not impossible, to disentangle those two effects. But what we do know is that when price is higher, expect to returns are lower. So where that's relevant is if you have a strategy, like say one that's focused on small cat value stocks. Well, if you have a company like one of the ones you're mentioning that started off a small cat value and all of a sudden it's prices now making it one of the largest two or three companies in the US, well, then at that point it's not really fitting the definition of higher expected returns in accordance with a small cat value portfolio. So if I have a daily process, then I can make the determination to sell that out of the portfolio at that time. It's funny when you look at, uh, you know, some of the index approaches. You can use the Rustle two thousand value as an example, where as of May thirty one, you've got game Stop and AMC still within the index, and at that time they were accounting for about one and a half percentage point of the index. Uh. And you know, you might even think of that is a almost a Yao Ming like outlier, like if you had Yamming visiting a kindergarten class in the size of screpancy. Kind of the picture you would get if you think about those two companies in a small value index. But they weren't alone. In fact, you had about fifteen percent of the Russell two thousand values holdings were actually in the top one thousand largest in the US, which is obviously the domain of the Russell and thousand indusicries. So you know, again that's kind of a function of the way that indusseries do their rebalancing in the case of the Russell in disease once per year. We believe in having a daily process that we can reflect changes in market prices throughout the year and rebalance our portfolios incrementally, and you need flexibility to do that. You have to flex flexibility across names through time and individual names, so you're not beholding the one individual trade. In that way, you can dynamically react to the way prices changed to continuously pursue higher expector returns and manage risk at the same time. I gotta say, I would to see Yao Ming visited kindergarten class. I'd I'd pay, I'd pay cover charts for that, Dott, I'm sure you would. Most of my sports jokes go over my head. Sorry about that. But but to go back to what Mike was saying about this year, Um, you know, returns have been really great. I think we were checking the numbers just this morning. It's been the second best first half of the year in about two decades or so. And then at the same time you have all these naysayer's warning about bubble and pockets, bubbles and pockets of the markets that are sort of bubblicious, if I can use that word. But is that thanks is that a prevalent sense right now or is it just uh something that you here all the time anyway, or is there sort of this sense of paranoia that's just a bit more prevalent just because the market has been doing so well for the last year. Well, the danger with using the expectation or the fear of a bubble to influential asset allocation decisions is the possibility that you might be wrong in the enormous opportunity costs for doing so. And again, you know, I keep on. I think twenty was a great example of all the case studies that you can use where if you look at the flows that we're going into money market funds in Q one of I mean, it was close to seven billion of dollars presumably going out of equities into money market funds, and then what happens subsequent to the end of Q one that year, Will you had any enormous tear We had equities globally, you know, delivering thirty some percentage points worth of return over the next two quarters. So that's what's potentially on the table if you let expectations of when maybe these premiums are gonna show up in the future influence what you're gonna do. We don't know when these premiums we're going to show up. That's kind of the nature of you know, not just the equity premium, but size, value and profitability, you know, the value premium. Again, we keep one back to this one because it's been in the news so much lately one out of twenty months in the US historically. So this is data going back to value stocks outperform growth stocks by seven and a half percent inch points. That's fifteen times what their unconditional average was. Uh So, I think that just this notion that things can turn very quickly unless you know what the news that's going to influence expectations in the future is going to be. Then the most tried and true method of capturing your fair share of the market return and of these premiums is that stay consistently invested so when they do show up, you're there to capture them. At the same time, we do have this wrong cohort that's been consistently buying, which is which has been the retail investor. I read a note earlier this week that said last Friday was a record day for retail traders buying equities. I'm wondering how you guys are thinking about the retail investor and their involvement in the market, and how much of your conversion from of your mutual funds into e t s is aimed at attracting retail money potentially. Yeah, one of the benefits for us having different investment solutions in different rappers, whether it's open and mutual funds, ETF, separately managed accounts. We want our clients to have lots of different ways to use dimensionals investment solutions within the way they're building an asset allegation for their clients and you know, so we want at the end of the day to have all those choices on the table for them. But we still very much believe in the idea of having these financial intermediaries. And again, some of the lessons we've been talking about of the opportunity costs from deviating at the market at the wrong time or not being consistently exposed to these premiums can be greatly mitigated by you know, for example, an an investor having an advisor who helps helps them stay consistent with their investment approach. And we feel like it's a very big benefit for investors. And then all of our investment solutions are really tailored so that they can make the best decisions of how to peace these things together consistent with the goals of their you know, West says, regular listeners will know, Um, I think I'm contractually obligated to discuss inflation on the on the show, perhaps legally obligated. I think they passed a law somewhere all podcast hosts must discuss inflation. But I mean, obviously the big wild card, the big variable everyone's top of mind this year. Will it be transitory or not? How long does transitory really mean? How are you thinking about inflation and and is it affecting the way you're thinking about portfolios? You know, break it down to us about you know, you're you're sort of thirty view of inflation and what to do about it? Yeah? Absolutely, I mean depending on you talk to, you get lots of differing viewpoints in terms of their expectations for inflation. So it's helpful for us to just look what is the market in aggregate telling us about inflation expectations, And you know, we can see that from some indicators. For example, you can need to break even inflation, or the difference in yields between nominal and inflation protected treasuries at the same maturity. You can use the you know, the forward inflation expectations, something like the five year five years. So if I look at the five year break even inflation rate right now, or at least as of a few weeks ago, it was hovering around right around two point four percent. The five year five year forward inflation, which is telling you something about inflation expectations for the five year period after the next five years, so basically covering ten four years here, that number was around two point one percent. Both of those numbers are pretty well on line with historical trends, So looking at those indicators, it doesn't seem that the market in aggregate is expecting particularly high inflation. And expecting inflation is incorporating into security prices, whether you're buying you know, stocks or bonds or anything that's in nominal terms, you're getting compensation for expect and inflation. Now, some investors might be particularly sensitive to inflation, and that means they might be concerned with unexpected inflation. So, for example, if consumer prices rise more than the broad market is expecting, then they might want to seek additional protection for that. And there are options, and it's sort of like the COVID vaccines, where you have different ways to reach the same level of inoculation. You can use treasury inflation protected securities which will hedge on expected inflation. There's a consideration there, which is that the yields on those are very very low. The real interest rates for US treasuries are negative across the board, across all maturities. Um. Then there's also the possibility of having a fixed income solution which combines inflation swap overlays, so you're getting you're gonna get paid real inflator, actual inflation, and then it's overlaid. On corporate bond strategies, we can expand your opportunities set two different levels of credit and different currencies as well, so there are options for investors who do have concerns about unexpected inflation. But I think getting to this notion that expected inflation, which is whatever the market believes is going to come to pass, is being compensated in current security prices. And let's face it, the market, when they're producing prices like this, they were very difficult to out guests. We might all have our opinions on what's gonna happen in the future, but looking at the data around active fund managers outguessing market prices is very difficult for most folks, you know, West. Before we get to the crazy things, I just want to get your your sort of current of the moment thoughts on on asset allocation. If I can, And let's start, you know, with the hypothetical sixty forty. Now, obviously there's been a lot of debate recently of whether sixty is dead or you know, what should go into that bucket? Um, you know, should he be seventy thirty or whatever, whatever the case may be. There's there's kind of a lot of diversity of opinion on the whole notion of a diverse what a diversified portfolio should should look like right now? So I'm just kinda cure swear you stand on that idea. Um, you know, are you a sixty forty type of guy? Uh? And if so, what you know, what exactly are you putting in your sixty? What are you putting in your forty? You know a lot of people saying you've got to take a little more risk in the forty, get some credit in there, some corporate credit, maybe some em debt, that sort of thing. How are you thinking about it all? And how much bigcoin is part of that? We're dose coin for that matter. Well, I'll start with what the theory tells us, and it tells us that your asset allocation, especially that split between equities and fixed income, is going to be a function of really the relative amount of actual invested capital you have versus your human capital. So when you first start out working, where most of your assets on your quote unquote balance sheet, if you want to call it, that is your human capital, your ability to continue to work to save more money and contribute to your savings in the future. And as you transition through your working life, when you get closer to retirement, obviously you've exhausted more of your human capital, probably don't want to work forever, but hopefully you've been able to accumulate more in terms of invested assets. So when you think about the riskiness of each one of those components, your human capital is a much more stable and lower risk component than your investment capital. So when you're when you're young, when you're starting off in your working career, that means that most of your balance sheet is in quote unquote lower risk assets. You might take more risk in terms of your invested assets, so that's why you might see a higher allocation equities when you're at a younger investment age. Obviously, as you proceed through your investment lifetime, you start to transition or de risk your financial assets and you start to transition into more fixed income heavy allocation. So you know, that's something that I think is probably a good starting point when you're thinking about how much you know you how much do you want to continue to work, how much, how on target you are in terms of what you've been able to say for your financial goals, and you can make your equity fixed determination from there. Now, within each one of those sleeves, I start with the notion that you want it to be as diversified as possible. So when within the equity sleeve, maybe have a global allocation and two equities, does that mean you're gonna hold just an exact fac simile of the global market portfolio? Maybe not. You might have reasons to deviate. US based investors tend to have a home bias towards US stocks, you might have an overweight there. But I think broad diverse vacation is a very important component within the fixed income Some of that depends on what your ultimate goals are, and let's say your goals are to support consumption within retirement. That kind of sets up almost like a liability, Like if you were to think of a same insurance company that has cash flow needs at certain periods of time, those are liabilities that they're going to try and hedge with their fixed income. And this is where maybe a liability driven investment approach might work. Where you have fixed income that has a duration that's taylor or connected to whatever the liabilities are. Uh, those cash flow needs you have in retirement, they have a duration associated with them and it changes through time. So by having a dynamic allocation, you're fixing. Um, that's one example of how you would taylor that fixed income sleeve to whatever your needs are. Well, don I'm just glad West when he started talking about people getting further along into the workforce and closer to the retirement age that he didn't point right at me. I'm glad about that. Well, Well, listeners can't see, but he did. Actually everybody knows he did point at Mike fair enough, fair enough as he should, as he should stand clearer of the craziest things we saw in markets this week? Well, West, great conversation. I think that is our segue to the crazy things that I know you brought a good one for us. I'm gonna save yours for last. But West, how about you? Have you seen anything crazy in markets in the last week? Yeah, there was one that kind of caught my attention, and it happened right when there was a press conference for the Portugal soccer team, during which Christian Ano Ronaldo came up to the stage and as part of their promotional period for Coca Cola, there were, of course, to Coca Cola bottles sitting right next to his microphone, and of course his reaction was to remove those from the table and hold up a bottle of water, I guess, encouraging people to drink water. What was notable about this was that that day Coca Cola stock went down about four billion dollars, so, uh, you know, whether it's caused and effect, whether it's just a coincidence. Kind of interesting because Coca Cola actually owns some water distribution companies, so you know, they should be able to benefit from a widespread surge and water consumption. But that was certainly one that was notable. That was that's a great one. That's a perfect crazy thing. And I you know, interestingly, you would think the margins on water are probably a lot higher for Coke anyway, I guess maybe it wasn't the De Saunty brand or whatever Cokes brand is that, but that's that's a good one. That's a pretty good one. And then another guy pushed aside the Heineken I think too, they he didn't want to be associated with Heineken, so little uh, a little activism in the in the soccer world. And then they I think they were all told stop doing this, just leave the cokes and for the sponsor. That's right, that's right, all right, that's a good one. And I'm mine is very food oriented too. And you may argue with me that this is not exactly a market story, but I will push back on that because my crazy thing is about the avocado market uh Albana. And to prove it's a ballad topic, there is a ticker on the Bloomberg for avocado prices out of Mexico, so you know you can you can run a regression on it. The seasonality on it is interesting. I don't know if you want to get into the avocado trade West, but I encourage you check it out. But this is a really good story from the Wall Street Journal, one of their a head stories on page one, and it's about the fact that avocados have gotten so pricey that there are these organized gangs going in and trying to to basically rob avocado farms and what the farmers are doing to prevent it. They talk about one farmer in South Africa. He's got motion activated infrared cameras around the hundred seventy acre farm. Um, he's also got on stand by a rapid response team that's led by a next military guy, complete with tracker dogs, and they try to you know, immediately react to the avocado thiefs as they come in. Um. One of my favorite things in Mexico. The drug cartels are actually fighting over the avocado crop now because the prices prices have got so far. But they say, you know, these just aren't sort of smash and grab guys that they basically planned this to a t. And the general describes it as large career grapht raids on farms where they can basically steal about a ton of avocados in a very short time I think like a couple hours, and then they take it, they launder it onto the black avocado market and uh and make a fortunate it so fascinating stuff. I know. Our colleague Tracy Alloway loves to chart the correlation of avocado prices with bitcoin, so uh, another reason why this is I think a good candidate for our crazy things. Well, Dona, I don't know if you'll if you'll allow me this uh, this rare commodity trade to be a crazy thing. I'll allow it. And I'll even allow you to name it. You can name it the guacamole cartel. I'm open. I'm open to other names, other suggestions. Guack cartel. I like that, all right, not bad? All right? What do you have first, Fildanna. Mine is not food related, but I'm leaving the planet for for mine. Uh, and it's I read this story about Procter and Gamble saying that they've signed an agreement with NASA to test laundry solutions in the International Space Station, which I thought was really interesting because there are no washing machines in space, so basically what happens astronauts just wear the same clothes over and over until they're like totally disgusting. And so this is a way for them to try to make continuous space living actually a possibility, I suppose. So there. I guess they're not sure how Proctu and Gamble detergent behaves in space. Well, you can't, you can't. You can't wash clothes in space, and so they're trying to figure out a way to actually make that happen. Huh, that's a good one. I'm i gonna say, if they can make dry shampoo, maybe they can make dry detergent. That's right, right, right, Again, there's not a lot of dirt in space either, I imagine those uh International Space Station is a pretty sterile environment, so how much no, because astronauts have to exercise two hours a day. Oh gotcha, gotcha? So there you can get pretty gross. So they've got pit stains on their their space suits and stuff. I guess wow. All right, well that seems like I'm glad to hear that. I'm you know, if this whole space tourism thing kicks off further, that's that's gonna that's gonna come in handy. I don't know, West, I don't know how you trade that one is there. I don't know what the end market is for for detergent in space. Still wrapping my my head around the expectations there. All right, what the check back on that? We'll see how they did on that experiment. That's a good one, Bill Dona. I don't know if the share price moved or not, but no, but it was just a fun read. Yeah. Well, hopefully you know you won't see so match you're not in a press conference. Push the tide pods away from him anyway, that would be that would make the share person, that would make it share absolutely anyway, vel Data, Hirich uh West Krill. So happy to have you on the show. Really enjoyed the conversation and hopefully we can do it again sometime. Yeah, thanks for having me. It was great. What Goes Up. We'll be back next week. Until then, you can find us on the Bloomberg Terminal, website and app where wherever you get your podcasts. We'd love it if you took the time to rate and review the show on Apple Podcasts so more listeners can find us. And you can find us on Twitter, follow me at Reaganonymous, Bildonna is at Bildonna high Rich. You can also follow Bloomberg Podcasts at podcasts. I thank you to Charlie Pellet to Bloomberg Radio in the voice of the New York City Subway System. What Goes Up is produced by Topor forhez ahead of Bloomberg Podcasts is Francesco Levy. Thanks for listening. See you next time,

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What Goes Up

Hosts Mike Regan and Vildana Hajric are joined each week by expert guests to discuss the main themes 
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