Hello, and welcomes to What Goes Up, a weekly markets podcast. My name is Mike Reagan. I'm a senior editor at Bloomberg and I'm Madonna Across Acid reporter with Bloomberg. And this week on the show, Well, Stocks and Bonds got off to a huge start in January, sharp reversal of the trends we saw in two What exactly has caused the change of heart? And will it last? We're gonna get into it with a portfolio manager and strategist at a quant firm that had, let's just say, a very successful year in two despite or we're accurately because of all the market turbulence last year. But the first I've got offer condolences to your Buffalo bills. Oh my gosh, my heart hurts your heart? Yes, you know. Sports depression is a real thing. So where is you know, cardiac arrest? You better get that checked out. I honestly, they make me so depressed and um, actual chest paint. Yeah, Like you just get so like so sad and you're like, why didn't why if only they had done X, if only they had done why? Um, it's really sad. But let me ask, do you ever bet On the games. Have you downloaded any of these apps now where you can bet? Yeah? I did, like friends referred me not this year, last year, like when it first became available in New York. I did. And I want like two or three hundred dollars or something. Yeah, of course you did. I never bet on the bills though, because I feel like it's bad. Yeah, I bet on like other random Yeah, I'm too chicken. I know if I download one, I'll win one bet and then I'll be like, that's it. I'm a betting genius. I'm going to do it forever and I lose it all. No, No, I want money, thank you very much. But that's pretty good. I have good intuition, which is what every gambler says. They lure in with that free money. But this is all just a tease. My craziest thing week, which is uh, a guy who bet five dollars of that free money they give you, and you'll never guess what happened next? He want a million dollars? Don't don't. Oh my gosh, guess what. I'm an Eagles fan now, heywagon fly, Eagles fly, don't embarrass us Eagles please please. I don't know about our guests. I think she's finished. She's a Pats fan, which we can't talk about. Yeah they're losers. No, I'm just kidding, Okay, I do want to bring her in. It's Katy Kaminski. She's the chief research strategist and portfolio manager at Alpha Simplex. Katie, thank you so much for joining us. Thanks for having me got more of a Celtics fan, myself a basketball person. Well, I was gonna ask to uh, to quants like yourself bet on football or there are a lot of a lot of you know, fandels going on and off a Simplex. We do tend to have some pooling sometimes about sports, but for me personally, I feel like the markets provide enough volatility and certainty, uh for for these days for I love to watch make your heart race anyway, Yeah exactly, I have too much heart racing going on. I need to like give up sports and everything. Seriously. But anyway, Katie, you've been on the show before. But for anybody who who might not know about your background, I was hoping you could just start out telling us about your background because it's very interesting and just you know, your your role at Alpha Simplex as a quant researcher. So I spent most of my career studying systematic training strategies. I got a pH d at m I T and Operations Research, and I was really fascinated with rules that investors used to make decisions. So it's quite natural that eventually my career ended up to becoming a systematic trend follower, where our job is really about designing systems to follow markets and find opportunities using quantitative techniques UM. This is exciting because we're using math, which I love UM to find new trends and new new opportunities. And it's especially exciting after a year like last year. I know, the Mantaged Features fund did what something like that and the uh the with the alternatives funded broke even I think, which one year like last year you've got to ac count as a w I guess, so last year was phenomenal. I mean for someone like myself who's been in the managed future space for years, this space is a place where it's definitely a clumpy returns but we do really well when there's massive trends, when there's dislocation, when things are uncomfortable, and last year was definitely uncomfortable, particularly fixed income. And I've been really fascinated by fixed income last year as well, but other things were exciting too. Okay, So so tell us about this because you have a note that sort of reviews two I believe, and you said it was a manner year for trend and specifically for the pigs fly trade. Oh yeah, that's great. I mean, so if you think about fixed income, most people think of it as a tried and true investment. They think if things go wrong, fixed incomes there. For me, so that classic sixty last year was the first year where we had to think about the concept of rising rates, where we had to think about present value of bonds actually being affected. And so you saw a very very negative year for fixed income and this was a tremendous short trend. But I just have to say that this hasn't worked for almost forty years, and most of us haven't been trading in the markets for forty years, so it's basically an artifice of history. So for us who trade systematically, seeing those trends and actually trading short and fixed income was sort of doing something that most people wouldn't dare to do. But we're quants. We follow where the opportunities are, and that was a very very profitable opportunity last year, being able to short bonds as central bankers raise rates to find inflation. So then, kitty, you know, then the calendar turned to three. Everyone's staring at a fresh P and L for the year. We've seen you know, very strong strength inequities, treasuries as well, yields coming down. But yet I feel like there's the danger of sort of a fault, you know, interpreting that with a false signal that you know, the soft landing is a done deal, that inflation, that beast is tamed. But January is a weird month, you know. Obviously you can see these reversals in trend at the start of a year that that don't last. So how are you thinking about this month and is it setting a signal about what we can expect for the rest of the year. Is this kind of a head fake that's just uh, perhaps a result of the new P and L everyone has for so there's been so many positive things at the beginning of this year, people are not expecting things to be as positive as it's been. But if you really look at it, there's a couple of key factors. First of all, any investors got beaten up last year, they took their money out of the markets. They're waiting for that signal that things are okay and I gotta get in, so they're under invested coming into the beginning of the year. Number two, we're seeing some moderation in inflation, which is a positive signal that we're going to eventually find a way to go on hold and potentially stabilize some of the inflation situation that people are dealing with. And number three, we're seeing positive news in Europe and also in Asia, particularly China, which is suggesting that things can get back to normal at some point. So there's this optimism that kind of is flooded by several good factors. I think the thing to be aware of is that there are a lot of positive signals, but at the same time, inflation is still very, very very far from the target, which means that central bankers who don't always think like the markets, who think a little more long term, are still going to have to fight that fight, and that fight may not be over as quick as people think. And I think that's what we're seeing in terms of why it's such a positive January. I feel like there's a split between, uh, what strategists and others are expecting for the year, where a lot had been saying before three started that we would see a choppy first half than a better second half. Now we're seeing just about everything rallying, including crypto etcetera, etcetera. So, um, like, where do you fall in that camp of of like the breakdown between when which part of the year could possibly be the stronger part? So I agree with you, And what's happened is people have been a little nervous, perhaps it was what happened last year and just kind of getting over that expecting a choppy's first half and a positive second half. I think we're probably more of the camp that you may see the opposite, So you're going to see a choppy second half of the year when we actually realized that inflation doesn't fall as quickly as we like. So if we actually see inflation bottom and come back up, and we've seen some early indications recently that central bankers are holding but inflation isn't moving low enough, that's where that could be a more challenging second half of the year. The reality that this takes a lot longer than we would like you know, Katie, I know at Alpha Simplex, one of the foundations of the firm is this idea of the adaptive market hypotheses, which you know, to dump it down, the way I think of it is, you know, market rules aren't really written in stone. They're they're sort of written in pencil, and you have to erase them every now and then and rewrite them. And I think the one thing along those lines that a lot of people are wondering is the correlation between stocks and bonds. You know, typically we tend to think of them negatively correlated. If stocks are rallying, you know, history would suggest that bonds are falling and yields are rising. Uh, last year we saw bonds yields rise and stocks fall. I'm wondering what sort of condition you think need to be in place to sort of have that revert back to the historical trend of negative correlations between bond prices and stock prices. Is it as simple as just a normalization of inflation or is there more to it? Do you think? Well, I think the simple answer is inflation. The reason is if you look farther back in history, and a lot of investors don't think that way looking back and appeared where we had rising rates and we had higher inflation and changing inflation. You saw three key factors. First, you saw that bonds had higher volatility then typical and what were you're used to. You also saw that stock bond correlation was positive, and you saw that there was a lot more uncertainty in general about that relationship. And so if you look at what's happened recently, it's very, very similar to what you see in terms of asset price dynamics recently. And what that says to me is that inflation changes asset price dynamics. You now are focusing on fixed incomes relationship to inflation as opposed to fixed income as a safe haven asset, and that is how that negative correlation becomes the dominant factor. In a world where fixed income is no longer a safe haven, you lose that negative correlation, and that's exactly what we saw last year. Can you talk to us more about what you guys are projecting in terms of what we'll be seeing from the inflation front, because it sounds like you are saying it won't be falling as fast as a lot of people are expecting. And then at the same time, we have people coming out and saying the FED really should rethink it's two percent target. What do you make of all that? Well, the truth is, in general, markets like things to move quicker than especially uncomfortable things to be over faster than they are. And I think what happened throughout this entire last two or three years has been very clear trends and asset prices that were consistent with a very serious inflation problem. And then by the time we actually got into dealing with this problem this year, it's also going to take quite some time for things to moderate. I mean, I think a simple example would be wage inflation. We really don't know how much wage inflation is going to impact until we've really seen year end and we've seen what happens after companies are just what they're doing for this year. So I think those are very stale and slow moving estimates, and I think people tend to underestimate how long it takes for these type of very opaque forces to calm down um, which means that there's going to be a lot more trends with people underreacting to some and overreacting to other events. You know, Katie, if I look out for the rest of the year and try to you know, thick of what risks lie ahead. Politics springs to mind, and and the issue with the debt ceiling. And I imagine that's a hard thing for a quant to sort of put numbers attached numbers too, But how are you thinking about this potential conflict over the debt ceiling? You know, in uh, more than ten years ago, the last time we had a crisis like this, we did get the US credit rating downgraded and sort of have a counterintuitive reaction where Treasury is actually rallied after that, uh, you know for that safe haven haven u bid. Are you thinking much about that risk this year? And and so how do you how do you see it playing out? I mean, I have to be honest, we think more in terms of the pressure that's on the FED and what they'll do. And I think in general most investors out there looking at the fixed income markets are just wondering, you know, how far will the FED go and will these factors actually impact their choices? Um And I think we, just like everyone else, will be dissecting every commentary and trying to really understand how those different issues may impact FED policy. Because right now, FED policy has been at the center of many different asset class returns. I mean, let me give you a simple example, currencies as well. We've seen huge correlations between the US two year and the US dollar. We're seeing a lot of cross asset relationships that are very strong and all tied to the inflation rising rates narrative, which I feel like we're in the next phase of right now, what's next? What happens next? Now that we're seeing this inflation abates and we have these other issues, do they come front and center next? So it almost sounds like, you know, maybe the risk is that the FED reacts to the political chaos by easing up on its tightening campaign and quantitative tightening. Is that is that a real possibility you think, and my guests would be that the market won't care so much about the politics if the FED is easing precisely. And I think the challenge was if you look last year at a data point, I think what was the most surprising was when when the FED decided to hike amidst what was going on in Ukraine. There was an example of them not reacting to markets behavior and people's nervousness. So I think people have gotten a little used to the fact that the FED is going on its own path. If that were to change course and they were to react based on political or other reasons, I think that would create some new uncertainty in terms of this narrative of fighting inflation. So it's really a matter of hanging on every speech, I guess, and every Beige book and every every minute everything. Can you talk to us more about what else you're expecting for the rest of the year. I think in one of your recent notes you said energy prices have been subdued. I'm wondering how you're thinking about that and also how it relates to the stock market UM. But then also tell us maybe you can talk about some of the components that go into your models and what exactly you guys are tracking, and just how the secret sauce if I can say so, UM works behind UM predictions. So first I'll start with commodities. I mean, commodities were a major hot topic earlier last year. They have really been very mixed and back and forth since then. But we've seen more moves recently in industrial metals, and we've also seen in some sets of pause in energy markets because of some rather favorable weather conditions, So I think that has the potential to change over the next two to three months, so we should watch that that could That could also be a potential tailwind for decreasing inflation. Is if we start to see those assets increasing and value, that's something that will fight against this reducing inflation narrative. So that's very important and that's why it's something to watch in the next few weeks to months um and how those raw materials really do impact the entires of my process. But when it comes to our models, I think that's a fantastic question. I love that question. Tell us all the secret, the secret sauce. So the exciting part about being a systematic trader is that your job is to build the system that makes decisions based on data and as data driven. So as data and information come in, your adjusting your positions and your view on the markets as a function of what the market is doing. So more fundamental strategies focus on trying to understand what the market should do, and what we do is try and understand what the market is actually doing, because if you think about it, the market itself is made up of very very intelligent and why groups of people across the world, so really, oftentimes in a very distressful environment, aggregating the information there and following those prevailing trends can provide opportunities. And that's why you're like, last year provided a lot of great opportunities because it was very hard to understand how will the world react to a rising inflation, rising rate environment? Right, and that dollar is just such always a perennial, such an important component of of everything going on in markets. You know, part of this risk off action we saw last year was obviously at probably at least in part because of that strengthening dollar, or at least they you know, both occurred hand in hand. What are you expecting for the dollar this year? And it's part of this rally we've seen in equities because it's sort of come off the highs that we saw last year. So that's a good question because the dollar has been most highly correlated also with the two year and so what that means is that the US being stronger in terms of their monetary policy has actually led in terms of relative strength as a dollar for several reasons. One is, risk off behavior tends to be very favorable for the dollar. You also saw the US being tightening faster, which was also favorable for the dollar um and you saw the US looking economically somewhat ahead last year. That all sort of started to ravel in the last couple of months, and we've really steadily seen that trade unravel all the way the other directions. So it was a very strong trade that's unraveled since roughly September. Now we actually think that there's a possibility that you might see some resurgence of that narrative because you really did see a very very strong, coordinated move in the other direction for some substantial period of time, which means that if the US ends up being strong again in relative terms, or if tightening happens in the US in a faster pace, or they hold steady for longer, you might see some resurgence of that strong dollar at the bottom here, because it's really moved quite a long way. And what about textos, because I've heard conflicting views on what actually is behind the tech valley that we've seen at the start of the year, where I've even had some people say tex stalks used to act as defensive place almost during the pandemic, and maybe we can even start to think of them uh that way as well this year, just because people are expecting slower growth or even a recession. What are some of the factors behind the tech rally. So I think one of the key factors, especially for the first part of this year in terms of the rally of tech, has been the relative under performance as well. So it's definitely been a buying opportunity for a lot of investors that were sort of frightened by what happened last year. So you have buying at the bottom, You definitely have buying power. But there's also the issue that we have to think about with tech stops is interest rate sensitivity. They have been much more sensitive to rising rates, and the fact that rising rates might eventually be on hold is actually a positive signal for tech companies based on on sort of recent price movements. So I think you've got some technical factors that are sort of putting a tech companies already in the plus. Will those sustain, It's going to depend on what happens as earning season. It's going to depend on how we navigate the rising rates environment we continue or not, and also sort of how how those companies come out of this new sort of regime this year, Katie, you mentioned that to be getting uh sort of how important it is to be able to embrace uncomfortable situations. So I'm gonna give you a very uncomfortable hypothetical here. All right, you're ready. If I said, Katie, you've you get to make one trade for the rest of the year. It's either long US equities or short US equities, and you can unwind the trade on the first day of Which way are you going and why short? Yeah? I think it's going to hurt for the first part of the year being short. But I think that if we have a bottoming and inflation that people will be realizing the actual impacts of inflation um and I also think that will show up in earnings and that we have to have some sort of correction. I don't like it. It's not comfortable. I'm not sure i'd want to hold it. But I definitely have some some short views this year. And by bottoming in inflation, you mean bottoming somewhere significantly above that two percent targetized Yes, and we've seen some discussion of that. I mean, you just need a couple of tail winds. You need maybe commodity prices to start surging again, you need a couple of things to kind of go against that narrative because, like I said, it could take longer to dissipate some of the inflation pressure or some of the sort of many factors where inflation is moving. Is there any lesson from trend following in markets when it comes to trying to predict the trend and inflation, is there? You know? Is I feel like inflation is a lot trickier perhaps, or maybe I'm wrong, I don't know, but is is there you know, a lesson to be applied from from market trend following and trying to gauge the trend for inflation. So the one thing I would say is inflation is uncomfortable. Everyone hates it. It's it's painful, it's it's difficult in multiple aspects. It provides opportunity. But I think for trend falling, why it's such an interesting environment. Finally for us is that when you have inflation, by definition, things are moving, things are inflating, and then if it dissipates, you have you might even have deflation. And so I think for us it's a sign that sort of things are influx. And so I think looking at as surprise movements. There's a lot more opportunities for dynamic strategies and active management in a world where inflation is higher. So I think that's something that investors have to think about because for the last ten or fifteen years, sixty was all you needed to do. That's no longer the case, and that is definitely a frightening proposition for many investors. What, in your view do you think the FED does if we do have the downturn and inflation topping out at four or five percent, let's say, Well, the challenge for the FED then is do they say, hey, we can't get to our goal or do they say, well, let's just change the goal. And so either of those are not very positive. I think the more positive one, which everybody would like, is to go back to two and have things sort of be stable. But I think the challenges the likelihood is we're gonna end up it for or so, and then the question is the Feed either has to say well, we're no longer going to try, or we're gonna have to keep trying, and people are not gonna like that either. So I think that that's the that's the challenge I think that was facing us in the next few months. Yeah. And of course, the the other side of the Fed's mandate comes into play, the job market. You know, does does that bottoming of inflation? Will that go hand in hand with a rising unemployment? You think? And then then we're really getting into this sort of uncomfortable territory. No, I agree, I mean, especially if we're thinking stagflation or or some of those big long words, right, And I guess you can find cycles of that in history to look at, but they're so different from today, especially with technology and other things, that it's really hard to know. And I think that means that there's gonna be a lot of uncertainty about where things are going, especially if we could go into one of those type of scenarios. Katy, can I just if we can go back to the macro discussion, we were having another sort of point of contention. I hear from just talking to people on a daily basis is we always hear good news is bad news because the FED skulls aren't working. Now I'm hearing bad news. Actually it's just bad news. So is bad news? Bad news? Is good news? Bad news? Like? Where what do you make of it of this discussion? Yeah? You're exactly right. Last year, everything that was good was bad, and everything that bad was good. This year, from the beginning of the year, we're starting to see good is good for now, and so we'll have to see how that evolves. I mean, I think for us it's very counterintuitive because if you imagine trying to predict what to do from a fundamental perspective, if you have good news, usually think that's a positive signal. But for us, as trend followers, we don't really care. I hate to say that. What we care about is where are we going? And if bad news being good news creates a big trend, that's an opportunity. And maybe that's actually a great environment for us because nobody can figure out what is really going on um and there's a lot of things that are up in the air. What about bad news is bad news where we are getting economic data to the point where people are super worried about what's happening with the economy. So if it's bad news as bad news, as long as we see sort of a sustained negative trend, that would also be an interesting environment for us. So I think for us, it's more about how extreme things are and how much things move, and so in environments where there's a lot of good news or bad news either way, but things are actually happening across assets, that's a good environment for trend falling. A very calm, sort of smooth flow of information both good and bad is not really the environment where trend falling performs as well. I miss those times, I know. Well, you know, Katie, we tend to be fixated on the US markets here, um and for good reason. You know, the largest, most liquid markets UH often correlated with the rest of the world. But I'm wondering as you look out there opportunities elsewhere in the world that looked like more attractive to you, either on the long or the short side, compared to the US, you know, and especially because we have seen some really strong performance from the rest of the world equities this year, even though you know, the US markets doing great, but you know some markets are even doing better. Is there you know, do you dive into some of the foreign markets, you know, are there any sort of trends you're seeing there that that we should know about. Yeah. The two biggest trends we've seen that are more cross sectional have been a relative play on E M Asia versus US, and you've seen massive movements in Asia in relative sense more recently. But hey, again this comes to the fact that they had a much larger attraction than we did last year, so let's see if it continues. We've also seen in the currency markets a definite tilt towards long em currencies versus the dollars, so those have strengthened even more relative to the US dollar as well. So those are both some good indicators as well that sort of there's good potential in the m there's also potential um in Asia versus US. How long that last is going to depend, but it definitely is an interesting trade at the beginning of this year. Is that, you know, all related to the China reopening story. I guess do you think? I think it's both. I think some of it's a sort of an under investment and sort of a undervaluation relative valuation story, but it's also a question of reopening potential for economic activity and sort of recovery um that we have already seen in the US that you're now starting to see. I mean, I think it will take a while, but it is a positive there's some positive signs that that's moving in that direction. Well, Katie Kaminski, chief research strategist and portfolio manager at Alpha Simplex, it is always such a pleasure to pick your brain. We we really appreciate it. But we, as you know, we cannot let you go just yet. We've got our little traditional, exciting games to play. Well, why do you get us started? What's the craziest thing you saw this week? Okay, I'm going with something that is very dear isn't the right word, but something I've been covering for months now and I've devoted in my life to it basically, and then finally we saw it happened last week, which was the Genesis bankruptcy Genesis, the lending arm of it within the DCG Empire, the Digital Currency Group Empire in crypto, so minuscript are related. We saw the finally after months of anticipation where a lot of people have been expecting it to come through, we finally saw it come in last week. And what did bitcoin do? I think? Yes, I mean people were really anticipating this for such a long time, so that helps explain part of it. But we've seen this huge rally in bitcoin and crypto to start the year. It's huge so market spot them on bad news. I guess the old cliche. Maybe I don't know, I don't who knows what happens, but yeah, so far at least, Katie, how do you think of crypto? Is it just sort of a higher beta version of the riskiest parts of the equity market? A lot a lot of people seem to think that's the case. It was interesting, is crypto used to be something they thought as a sort of a safe haven asset or something that's uncorrelated equities. But the last two or three years, I think most of the people that I know in crypto see that it's very much a risk asset, just basically highly levered and such that. So it's you know, so high flying risk assets. And so I think we tend to as quant managers, it's all about measuring VALL and the VALL of bitcoin, and these assets are significantly higher than what you see in traditional assets. So I think for us, it's definitely not something that we're ventured in yet, but you know, we're evaluating it. Yeah, Well, it's hire violin. Is it also sort of a more hard to predict violatilty? Well, it's higher VALL, more hard to predict I'm not sure yet because I haven't tried to predict it, but it definitely in terms of volatility, is much much higher than things like oil or even some of the more knack ass makes knack Us look pretty calm. So that that to me is you know, not gas is one of the big movers, so so I think that that kind of puts Bitcoin in perspective. Alright, Katie, how about you, Have you seen anything crazy in the last week? I think, you know, one of the things that surprised me in the last couple of days is seeing a peak in Australian inflation. And the reason I say this is that Australia has a phenomenal equity market return, right and to see that initial sign that they're having a little bit of an uptick again in inflation, I think is something that investors need to pay attention to. And that goes back to the narrative that we were talking about earlier in this program, is that you know, I think that we can find some surprises um going forward, not just going to be a straight walk down. What is causing that Australia inflation pick up? Can you can you tell? It? Says mostly electricity prices and other costs, and so I think that's sort of the headline view. But I would say that that's where my question about looking at commodities is important. So if we start to see commodity prices or other prices increasing, that will sort of give some fuel to the narrative that inflation doesn't go away, that critique, And there's so many variables that could cause energy to you know, Vladimir Putin could wake up some morning and uh, you know I have some news along those lines. Who knows. Uh, definitely something to keep an eye out for. All right, my turn, As I said, I'm treating the gambling markets just like any other markets. That's okay. So this guy, this is a story courtesy of USA Today, This guy Cameron Craig Um. He got placed a five dollar bet, but again he got one of those bonuses. I have to read the full story, but I think free bet for this guy. And the reason I think I'm gonna eventually get lured into sports betting on one of these apps is the sheer insanity of the bet you can place. So he placed a bet on who the first person to score a touchdown would be, not just of one game, but of all four games this past weekend, So you had to identify the player in each game who would be the first to score a touchdown. And he now, how does it work if somebody doesn't score one at all? What if it's like a string of field Well, then you lose your five bucks? Okay, I think, yeah, Well it's still someone's bound to score that first touchdown, you right, even if there's a field goal. First person who scores the first touchdown of the game, that's who you got a name, right? So he now at five bucks? He placed on four games, got it right on all four. What do you suppose the winnings were, Donna? Are we playing prices precisely? Yes we are, Katie, You are now a contestant on the prices is precise? How much do you think this guy won? I'll explain it again. Four games? He named the player that scored the touchdown the first touchdown in each of the four games, five dollar free bet? What do you think you want one three million dollars with that? Pretty quick? I saw you. You're like doing some math over there when you carry the one and one point three million? Yeah, I guess a hundred No, wait, it's way more, way more. I gotta give it to Katie on the spot. How much was it sent? Thousand? I thought that was pretty good for a three dollar five bet. You're like, I wouldn't touch it for less than a million three one one point three? All right? Wow, I mean okay, that's especially for the five dollars being a giveaway. Yeah, it's pretty good. He said his life changing money, and people were arguing with him, saying, how's seventy three thou dollars life change the money? He's like, look, I paid off all my bills, I paid off my loans, my credit cards. My life's changed. Let's say the word bills that was entirely unintentional. Did not me to twist that it hurt because you got to see a cardiologist. I would have thought I would have thought way more. I'm sorry. I just hear of these like crazy, it's your fault, you you always Yeah, I don't know about seventy three grand for five bucks. How often can you find me a stock, Katie that I can place five bucks on and get us to seventy three? Maybe a meme stock? Yeah, crypto, crypto, sure that there's high ball there. I'm gonna go. I like the Sam coins, any coin linked to Sam, the surging. They're surgery. Of course they are, of course, of course. Anyway, Katie Kavinsky again, can't thank you enough. I hope we can have you back again sometime later in the year and see how it's all going. Thanks for having me. Thank you, Katie, What Goes Up. We'll be back next week. Until then, you can find us on the Bloomberg Terminal website and app, or wherever you get your podcasts. We love it if you took the time to rate and review the show on Apple Podcasts so more listeners can find us. And you can find us on Twitter, follow me at reag Anonymous, Bildonna hierarch Is at Bldanna Hirach. You can also follow Bloomberg Podcasts at podcasts. What Goes Up is produced by Stacy Wong. Thanks for listening, See you next time.

Hello, and welcomes to What Goes Up, a weekly markets podcast. My name is Mike Reagan. I'm a senior editor at Bloomberg and I'm Madonna Across Acid reporter with Bloomberg. And this week on the show, Well, Stocks and Bonds got off to a huge start in January, sharp reversal of the trends we saw in two What exactly has caused the change of heart? And will it last? We're gonna get into it with a portfolio manager and strategist at a quant firm that had, let's just say, a very successful year in two despite or we're accurately because of all the market turbulence last year. But the first I've got offer condolences to your Buffalo bills. Oh my gosh, my heart hurts your heart? Yes, you know. Sports depression is a real thing. So where is you know, cardiac arrest? You better get that checked out. I honestly, they make me so depressed and um, actual chest paint. Yeah, Like you just get so like so sad and you're like, why didn't why if only they had done X, if only they had done why? Um, it's really sad. But let me ask, do you ever bet On the games. Have you downloaded any of these apps now where you can bet? Yeah? I did, like friends referred me not this year, last year, like when it first became available in New York. I did. And I want like two or three hundred dollars or something. Yeah, of course you did. I never bet on the bills though, because I feel like it's bad. Yeah, I bet on like other random Yeah, I'm too chicken. I know if I download one, I'll win one bet and then I'll be like, that's it. I'm a betting genius. I'm going to do it forever and I lose it all. No, No, I want money, thank you very much. But that's pretty good. I have good intuition, which is what every gambler says. They lure in with that free money. But this is all just a tease. My craziest thing week, which is uh, a guy who bet five dollars of that free money they give you, and you'll never guess what happened next? He want a million dollars? Don't don't. Oh my gosh, guess what. I'm an Eagles fan now, heywagon fly, Eagles fly, don't embarrass us Eagles please please. I don't know about our guests. I think she's finished. She's a Pats fan, which we can't talk about. Yeah they're losers. No, I'm just kidding, Okay, I do want to bring her in. It's Katy Kaminski. She's the chief research strategist and portfolio manager at Alpha Simplex. Katie, thank you so much for joining us. Thanks for having me got more of a Celtics fan, myself a basketball person. Well, I was gonna ask to uh, to quants like yourself bet on football or there are a lot of a lot of you know, fandels going on and off a Simplex. We do tend to have some pooling sometimes about sports, but for me personally, I feel like the markets provide enough volatility and certainty, uh for for these days for I love to watch make your heart race anyway, Yeah exactly, I have too much heart racing going on. I need to like give up sports and everything. Seriously. But anyway, Katie, you've been on the show before. But for anybody who who might not know about your background, I was hoping you could just start out telling us about your background because it's very interesting and just you know, your your role at Alpha Simplex as a quant researcher. So I spent most of my career studying systematic training strategies. I got a pH d at m I T and Operations Research, and I was really fascinated with rules that investors used to make decisions. So it's quite natural that eventually my career ended up to becoming a systematic trend follower, where our job is really about designing systems to follow markets and find opportunities using quantitative techniques UM. This is exciting because we're using math, which I love UM to find new trends and new new opportunities. And it's especially exciting after a year like last year. I know, the Mantaged Features fund did what something like that and the uh the with the alternatives funded broke even I think, which one year like last year you've got to ac count as a w I guess, so last year was phenomenal. I mean for someone like myself who's been in the managed future space for years, this space is a place where it's definitely a clumpy returns but we do really well when there's massive trends, when there's dislocation, when things are uncomfortable, and last year was definitely uncomfortable, particularly fixed income. And I've been really fascinated by fixed income last year as well, but other things were exciting too. Okay, So so tell us about this because you have a note that sort of reviews two I believe, and you said it was a manner year for trend and specifically for the pigs fly trade. Oh yeah, that's great. I mean, so if you think about fixed income, most people think of it as a tried and true investment. They think if things go wrong, fixed incomes there. For me, so that classic sixty last year was the first year where we had to think about the concept of rising rates, where we had to think about present value of bonds actually being affected. And so you saw a very very negative year for fixed income and this was a tremendous short trend. But I just have to say that this hasn't worked for almost forty years, and most of us haven't been trading in the markets for forty years, so it's basically an artifice of history. So for us who trade systematically, seeing those trends and actually trading short and fixed income was sort of doing something that most people wouldn't dare to do. But we're quants. We follow where the opportunities are, and that was a very very profitable opportunity last year, being able to short bonds as central bankers raise rates to find inflation. So then, kitty, you know, then the calendar turned to three. Everyone's staring at a fresh P and L for the year. We've seen you know, very strong strength inequities, treasuries as well, yields coming down. But yet I feel like there's the danger of sort of a fault, you know, interpreting that with a false signal that you know, the soft landing is a done deal, that inflation, that beast is tamed. But January is a weird month, you know. Obviously you can see these reversals in trend at the start of a year that that don't last. So how are you thinking about this month and is it setting a signal about what we can expect for the rest of the year. Is this kind of a head fake that's just uh, perhaps a result of the new P and L everyone has for so there's been so many positive things at the beginning of this year, people are not expecting things to be as positive as it's been. But if you really look at it, there's a couple of key factors. First of all, any investors got beaten up last year, they took their money out of the markets. They're waiting for that signal that things are okay and I gotta get in, so they're under invested coming into the beginning of the year. Number two, we're seeing some moderation in inflation, which is a positive signal that we're going to eventually find a way to go on hold and potentially stabilize some of the inflation situation that people are dealing with. And number three, we're seeing positive news in Europe and also in Asia, particularly China, which is suggesting that things can get back to normal at some point. So there's this optimism that kind of is flooded by several good factors. I think the thing to be aware of is that there are a lot of positive signals, but at the same time, inflation is still very, very very far from the target, which means that central bankers who don't always think like the markets, who think a little more long term, are still going to have to fight that fight, and that fight may not be over as quick as people think. And I think that's what we're seeing in terms of why it's such a positive January. I feel like there's a split between, uh, what strategists and others are expecting for the year, where a lot had been saying before three started that we would see a choppy first half than a better second half. Now we're seeing just about everything rallying, including crypto etcetera, etcetera. So, um, like, where do you fall in that camp of of like the breakdown between when which part of the year could possibly be the stronger part? So I agree with you, And what's happened is people have been a little nervous, perhaps it was what happened last year and just kind of getting over that expecting a choppy's first half and a positive second half. I think we're probably more of the camp that you may see the opposite, So you're going to see a choppy second half of the year when we actually realized that inflation doesn't fall as quickly as we like. So if we actually see inflation bottom and come back up, and we've seen some early indications recently that central bankers are holding but inflation isn't moving low enough, that's where that could be a more challenging second half of the year. The reality that this takes a lot longer than we would like you know, Katie, I know at Alpha Simplex, one of the foundations of the firm is this idea of the adaptive market hypotheses, which you know, to dump it down, the way I think of it is, you know, market rules aren't really written in stone. They're they're sort of written in pencil, and you have to erase them every now and then and rewrite them. And I think the one thing along those lines that a lot of people are wondering is the correlation between stocks and bonds. You know, typically we tend to think of them negatively correlated. If stocks are rallying, you know, history would suggest that bonds are falling and yields are rising. Uh, last year we saw bonds yields rise and stocks fall. I'm wondering what sort of condition you think need to be in place to sort of have that revert back to the historical trend of negative correlations between bond prices and stock prices. Is it as simple as just a normalization of inflation or is there more to it? Do you think? Well, I think the simple answer is inflation. The reason is if you look farther back in history, and a lot of investors don't think that way looking back and appeared where we had rising rates and we had higher inflation and changing inflation. You saw three key factors. First, you saw that bonds had higher volatility then typical and what were you're used to. You also saw that stock bond correlation was positive, and you saw that there was a lot more uncertainty in general about that relationship. And so if you look at what's happened recently, it's very, very similar to what you see in terms of asset price dynamics recently. And what that says to me is that inflation changes asset price dynamics. You now are focusing on fixed incomes relationship to inflation as opposed to fixed income as a safe haven asset, and that is how that negative correlation becomes the dominant factor. In a world where fixed income is no longer a safe haven, you lose that negative correlation, and that's exactly what we saw last year. Can you talk to us more about what you guys are projecting in terms of what we'll be seeing from the inflation front, because it sounds like you are saying it won't be falling as fast as a lot of people are expecting. And then at the same time, we have people coming out and saying the FED really should rethink it's two percent target. What do you make of all that? Well, the truth is, in general, markets like things to move quicker than especially uncomfortable things to be over faster than they are. And I think what happened throughout this entire last two or three years has been very clear trends and asset prices that were consistent with a very serious inflation problem. And then by the time we actually got into dealing with this problem this year, it's also going to take quite some time for things to moderate. I mean, I think a simple example would be wage inflation. We really don't know how much wage inflation is going to impact until we've really seen year end and we've seen what happens after companies are just what they're doing for this year. So I think those are very stale and slow moving estimates, and I think people tend to underestimate how long it takes for these type of very opaque forces to calm down um, which means that there's going to be a lot more trends with people underreacting to some and overreacting to other events. You know, Katie, if I look out for the rest of the year and try to you know, thick of what risks lie ahead. Politics springs to mind, and and the issue with the debt ceiling. And I imagine that's a hard thing for a quant to sort of put numbers attached numbers too, But how are you thinking about this potential conflict over the debt ceiling? You know, in uh, more than ten years ago, the last time we had a crisis like this, we did get the US credit rating downgraded and sort of have a counterintuitive reaction where Treasury is actually rallied after that, uh, you know for that safe haven haven u bid. Are you thinking much about that risk this year? And and so how do you how do you see it playing out? I mean, I have to be honest, we think more in terms of the pressure that's on the FED and what they'll do. And I think in general most investors out there looking at the fixed income markets are just wondering, you know, how far will the FED go and will these factors actually impact their choices? Um And I think we, just like everyone else, will be dissecting every commentary and trying to really understand how those different issues may impact FED policy. Because right now, FED policy has been at the center of many different asset class returns. I mean, let me give you a simple example, currencies as well. We've seen huge correlations between the US two year and the US dollar. We're seeing a lot of cross asset relationships that are very strong and all tied to the inflation rising rates narrative, which I feel like we're in the next phase of right now, what's next? What happens next? Now that we're seeing this inflation abates and we have these other issues, do they come front and center next? So it almost sounds like, you know, maybe the risk is that the FED reacts to the political chaos by easing up on its tightening campaign and quantitative tightening. Is that is that a real possibility you think, and my guests would be that the market won't care so much about the politics if the FED is easing precisely. And I think the challenge was if you look last year at a data point, I think what was the most surprising was when when the FED decided to hike amidst what was going on in Ukraine. There was an example of them not reacting to markets behavior and people's nervousness. So I think people have gotten a little used to the fact that the FED is going on its own path. If that were to change course and they were to react based on political or other reasons, I think that would create some new uncertainty in terms of this narrative of fighting inflation. So it's really a matter of hanging on every speech, I guess, and every Beige book and every every minute everything. Can you talk to us more about what else you're expecting for the rest of the year. I think in one of your recent notes you said energy prices have been subdued. I'm wondering how you're thinking about that and also how it relates to the stock market UM. But then also tell us maybe you can talk about some of the components that go into your models and what exactly you guys are tracking, and just how the secret sauce if I can say so, UM works behind UM predictions. So first I'll start with commodities. I mean, commodities were a major hot topic earlier last year. They have really been very mixed and back and forth since then. But we've seen more moves recently in industrial metals, and we've also seen in some sets of pause in energy markets because of some rather favorable weather conditions, So I think that has the potential to change over the next two to three months, so we should watch that that could That could also be a potential tailwind for decreasing inflation. Is if we start to see those assets increasing and value, that's something that will fight against this reducing inflation narrative. So that's very important and that's why it's something to watch in the next few weeks to months um and how those raw materials really do impact the entires of my process. But when it comes to our models, I think that's a fantastic question. I love that question. Tell us all the secret, the secret sauce. So the exciting part about being a systematic trader is that your job is to build the system that makes decisions based on data and as data driven. So as data and information come in, your adjusting your positions and your view on the markets as a function of what the market is doing. So more fundamental strategies focus on trying to understand what the market should do, and what we do is try and understand what the market is actually doing, because if you think about it, the market itself is made up of very very intelligent and why groups of people across the world, so really, oftentimes in a very distressful environment, aggregating the information there and following those prevailing trends can provide opportunities. And that's why you're like, last year provided a lot of great opportunities because it was very hard to understand how will the world react to a rising inflation, rising rate environment? Right, and that dollar is just such always a perennial, such an important component of of everything going on in markets. You know, part of this risk off action we saw last year was obviously at probably at least in part because of that strengthening dollar, or at least they you know, both occurred hand in hand. What are you expecting for the dollar this year? And it's part of this rally we've seen in equities because it's sort of come off the highs that we saw last year. So that's a good question because the dollar has been most highly correlated also with the two year and so what that means is that the US being stronger in terms of their monetary policy has actually led in terms of relative strength as a dollar for several reasons. One is, risk off behavior tends to be very favorable for the dollar. You also saw the US being tightening faster, which was also favorable for the dollar um and you saw the US looking economically somewhat ahead last year. That all sort of started to ravel in the last couple of months, and we've really steadily seen that trade unravel all the way the other directions. So it was a very strong trade that's unraveled since roughly September. Now we actually think that there's a possibility that you might see some resurgence of that narrative because you really did see a very very strong, coordinated move in the other direction for some substantial period of time, which means that if the US ends up being strong again in relative terms, or if tightening happens in the US in a faster pace, or they hold steady for longer, you might see some resurgence of that strong dollar at the bottom here, because it's really moved quite a long way. And what about textos, because I've heard conflicting views on what actually is behind the tech valley that we've seen at the start of the year, where I've even had some people say tex stalks used to act as defensive place almost during the pandemic, and maybe we can even start to think of them uh that way as well this year, just because people are expecting slower growth or even a recession. What are some of the factors behind the tech rally. So I think one of the key factors, especially for the first part of this year in terms of the rally of tech, has been the relative under performance as well. So it's definitely been a buying opportunity for a lot of investors that were sort of frightened by what happened last year. So you have buying at the bottom, You definitely have buying power. But there's also the issue that we have to think about with tech stops is interest rate sensitivity. They have been much more sensitive to rising rates, and the fact that rising rates might eventually be on hold is actually a positive signal for tech companies based on on sort of recent price movements. So I think you've got some technical factors that are sort of putting a tech companies already in the plus. Will those sustain, It's going to depend on what happens as earning season. It's going to depend on how we navigate the rising rates environment we continue or not, and also sort of how how those companies come out of this new sort of regime this year, Katie, you mentioned that to be getting uh sort of how important it is to be able to embrace uncomfortable situations. So I'm gonna give you a very uncomfortable hypothetical here. All right, you're ready. If I said, Katie, you've you get to make one trade for the rest of the year. It's either long US equities or short US equities, and you can unwind the trade on the first day of Which way are you going and why short? Yeah? I think it's going to hurt for the first part of the year being short. But I think that if we have a bottoming and inflation that people will be realizing the actual impacts of inflation um and I also think that will show up in earnings and that we have to have some sort of correction. I don't like it. It's not comfortable. I'm not sure i'd want to hold it. But I definitely have some some short views this year. And by bottoming in inflation, you mean bottoming somewhere significantly above that two percent targetized Yes, and we've seen some discussion of that. I mean, you just need a couple of tail winds. You need maybe commodity prices to start surging again, you need a couple of things to kind of go against that narrative because, like I said, it could take longer to dissipate some of the inflation pressure or some of the sort of many factors where inflation is moving. Is there any lesson from trend following in markets when it comes to trying to predict the trend and inflation, is there? You know? Is I feel like inflation is a lot trickier perhaps, or maybe I'm wrong, I don't know, but is is there you know, a lesson to be applied from from market trend following and trying to gauge the trend for inflation. So the one thing I would say is inflation is uncomfortable. Everyone hates it. It's it's painful, it's it's difficult in multiple aspects. It provides opportunity. But I think for trend falling, why it's such an interesting environment. Finally for us is that when you have inflation, by definition, things are moving, things are inflating, and then if it dissipates, you have you might even have deflation. And so I think for us it's a sign that sort of things are influx. And so I think looking at as surprise movements. There's a lot more opportunities for dynamic strategies and active management in a world where inflation is higher. So I think that's something that investors have to think about because for the last ten or fifteen years, sixty was all you needed to do. That's no longer the case, and that is definitely a frightening proposition for many investors. What, in your view do you think the FED does if we do have the downturn and inflation topping out at four or five percent, let's say, Well, the challenge for the FED then is do they say, hey, we can't get to our goal or do they say, well, let's just change the goal. And so either of those are not very positive. I think the more positive one, which everybody would like, is to go back to two and have things sort of be stable. But I think the challenges the likelihood is we're gonna end up it for or so, and then the question is the Feed either has to say well, we're no longer going to try, or we're gonna have to keep trying, and people are not gonna like that either. So I think that that's the that's the challenge I think that was facing us in the next few months. Yeah. And of course, the the other side of the Fed's mandate comes into play, the job market. You know, does does that bottoming of inflation? Will that go hand in hand with a rising unemployment? You think? And then then we're really getting into this sort of uncomfortable territory. No, I agree, I mean, especially if we're thinking stagflation or or some of those big long words, right, And I guess you can find cycles of that in history to look at, but they're so different from today, especially with technology and other things, that it's really hard to know. And I think that means that there's gonna be a lot of uncertainty about where things are going, especially if we could go into one of those type of scenarios. Katy, can I just if we can go back to the macro discussion, we were having another sort of point of contention. I hear from just talking to people on a daily basis is we always hear good news is bad news because the FED skulls aren't working. Now I'm hearing bad news. Actually it's just bad news. So is bad news? Bad news? Is good news? Bad news? Like? Where what do you make of it of this discussion? Yeah? You're exactly right. Last year, everything that was good was bad, and everything that bad was good. This year, from the beginning of the year, we're starting to see good is good for now, and so we'll have to see how that evolves. I mean, I think for us it's very counterintuitive because if you imagine trying to predict what to do from a fundamental perspective, if you have good news, usually think that's a positive signal. But for us, as trend followers, we don't really care. I hate to say that. What we care about is where are we going? And if bad news being good news creates a big trend, that's an opportunity. And maybe that's actually a great environment for us because nobody can figure out what is really going on um and there's a lot of things that are up in the air. What about bad news is bad news where we are getting economic data to the point where people are super worried about what's happening with the economy. So if it's bad news as bad news, as long as we see sort of a sustained negative trend, that would also be an interesting environment for us. So I think for us, it's more about how extreme things are and how much things move, and so in environments where there's a lot of good news or bad news either way, but things are actually happening across assets, that's a good environment for trend falling. A very calm, sort of smooth flow of information both good and bad is not really the environment where trend falling performs as well. I miss those times, I know. Well, you know, Katie, we tend to be fixated on the US markets here, um and for good reason. You know, the largest, most liquid markets UH often correlated with the rest of the world. But I'm wondering as you look out there opportunities elsewhere in the world that looked like more attractive to you, either on the long or the short side, compared to the US, you know, and especially because we have seen some really strong performance from the rest of the world equities this year, even though you know, the US markets doing great, but you know some markets are even doing better. Is there you know, do you dive into some of the foreign markets, you know, are there any sort of trends you're seeing there that that we should know about. Yeah. The two biggest trends we've seen that are more cross sectional have been a relative play on E M Asia versus US, and you've seen massive movements in Asia in relative sense more recently. But hey, again this comes to the fact that they had a much larger attraction than we did last year, so let's see if it continues. We've also seen in the currency markets a definite tilt towards long em currencies versus the dollars, so those have strengthened even more relative to the US dollar as well. So those are both some good indicators as well that sort of there's good potential in the m there's also potential um in Asia versus US. How long that last is going to depend, but it definitely is an interesting trade at the beginning of this year. Is that, you know, all related to the China reopening story. I guess do you think? I think it's both. I think some of it's a sort of an under investment and sort of a undervaluation relative valuation story, but it's also a question of reopening potential for economic activity and sort of recovery um that we have already seen in the US that you're now starting to see. I mean, I think it will take a while, but it is a positive there's some positive signs that that's moving in that direction. Well, Katie Kaminski, chief research strategist and portfolio manager at Alpha Simplex, it is always such a pleasure to pick your brain. We we really appreciate it. But we, as you know, we cannot let you go just yet. We've got our little traditional, exciting games to play. Well, why do you get us started? What's the craziest thing you saw this week? Okay, I'm going with something that is very dear isn't the right word, but something I've been covering for months now and I've devoted in my life to it basically, and then finally we saw it happened last week, which was the Genesis bankruptcy Genesis, the lending arm of it within the DCG Empire, the Digital Currency Group Empire in crypto, so minuscript are related. We saw the finally after months of anticipation where a lot of people have been expecting it to come through, we finally saw it come in last week. And what did bitcoin do? I think? Yes, I mean people were really anticipating this for such a long time, so that helps explain part of it. But we've seen this huge rally in bitcoin and crypto to start the year. It's huge so market spot them on bad news. I guess the old cliche. Maybe I don't know, I don't who knows what happens, but yeah, so far at least, Katie, how do you think of crypto? Is it just sort of a higher beta version of the riskiest parts of the equity market? A lot a lot of people seem to think that's the case. It was interesting, is crypto used to be something they thought as a sort of a safe haven asset or something that's uncorrelated equities. But the last two or three years, I think most of the people that I know in crypto see that it's very much a risk asset, just basically highly levered and such that. So it's you know, so high flying risk assets. And so I think we tend to as quant managers, it's all about measuring VALL and the VALL of bitcoin, and these assets are significantly higher than what you see in traditional assets. So I think for us, it's definitely not something that we're ventured in yet, but you know, we're evaluating it. Yeah, Well, it's hire violin. Is it also sort of a more hard to predict violatilty? Well, it's higher VALL, more hard to predict I'm not sure yet because I haven't tried to predict it, but it definitely in terms of volatility, is much much higher than things like oil or even some of the more knack ass makes knack Us look pretty calm. So that that to me is you know, not gas is one of the big movers, so so I think that that kind of puts Bitcoin in perspective. Alright, Katie, how about you, Have you seen anything crazy in the last week? I think, you know, one of the things that surprised me in the last couple of days is seeing a peak in Australian inflation. And the reason I say this is that Australia has a phenomenal equity market return, right and to see that initial sign that they're having a little bit of an uptick again in inflation, I think is something that investors need to pay attention to. And that goes back to the narrative that we were talking about earlier in this program, is that you know, I think that we can find some surprises um going forward, not just going to be a straight walk down. What is causing that Australia inflation pick up? Can you can you tell? It? Says mostly electricity prices and other costs, and so I think that's sort of the headline view. But I would say that that's where my question about looking at commodities is important. So if we start to see commodity prices or other prices increasing, that will sort of give some fuel to the narrative that inflation doesn't go away, that critique, And there's so many variables that could cause energy to you know, Vladimir Putin could wake up some morning and uh, you know I have some news along those lines. Who knows. Uh, definitely something to keep an eye out for. All right, my turn, As I said, I'm treating the gambling markets just like any other markets. That's okay. So this guy, this is a story courtesy of USA Today, This guy Cameron Craig Um. He got placed a five dollar bet, but again he got one of those bonuses. I have to read the full story, but I think free bet for this guy. And the reason I think I'm gonna eventually get lured into sports betting on one of these apps is the sheer insanity of the bet you can place. So he placed a bet on who the first person to score a touchdown would be, not just of one game, but of all four games this past weekend, So you had to identify the player in each game who would be the first to score a touchdown. And he now, how does it work if somebody doesn't score one at all? What if it's like a string of field Well, then you lose your five bucks? Okay, I think, yeah, Well it's still someone's bound to score that first touchdown, you right, even if there's a field goal. First person who scores the first touchdown of the game, that's who you got a name, right? So he now at five bucks? He placed on four games, got it right on all four. What do you suppose the winnings were, Donna? Are we playing prices precisely? Yes we are, Katie, You are now a contestant on the prices is precise? How much do you think this guy won? I'll explain it again. Four games? He named the player that scored the touchdown the first touchdown in each of the four games, five dollar free bet? What do you think you want one three million dollars with that? Pretty quick? I saw you. You're like doing some math over there when you carry the one and one point three million? Yeah, I guess a hundred No, wait, it's way more, way more. I gotta give it to Katie on the spot. How much was it sent? Thousand? I thought that was pretty good for a three dollar five bet. You're like, I wouldn't touch it for less than a million three one one point three? All right? Wow, I mean okay, that's especially for the five dollars being a giveaway. Yeah, it's pretty good. He said his life changing money, and people were arguing with him, saying, how's seventy three thou dollars life change the money? He's like, look, I paid off all my bills, I paid off my loans, my credit cards. My life's changed. Let's say the word bills that was entirely unintentional. Did not me to twist that it hurt because you got to see a cardiologist. I would have thought I would have thought way more. I'm sorry. I just hear of these like crazy, it's your fault, you you always Yeah, I don't know about seventy three grand for five bucks. How often can you find me a stock, Katie that I can place five bucks on and get us to seventy three? Maybe a meme stock? Yeah, crypto, crypto, sure that there's high ball there. I'm gonna go. I like the Sam coins, any coin linked to Sam, the surging. They're surgery. Of course they are, of course, of course. Anyway, Katie Kavinsky again, can't thank you enough. I hope we can have you back again sometime later in the year and see how it's all going. Thanks for having me. Thank you, Katie, What Goes Up. We'll be back next week. Until then, you can find us on the Bloomberg Terminal website and app, or wherever you get your podcasts. We love it if you took the time to rate and review the show on Apple Podcasts so more listeners can find us. And you can find us on Twitter, follow me at reag Anonymous, Bildonna hierarch Is at Bldanna Hirach. You can also follow Bloomberg Podcasts at podcasts. What Goes Up is produced by Stacy Wong. Thanks for listening, See you next time.