Hello, and welcome to What Goes Up, a weekly markets podcast. I'm Mike Reagan, senior editor at Bloomberg, and this week on the show, Well, you've heard it a million times. If you're an investor, you need to diversify. But what exactly does that mean? Can you just buy the entire SMP five hundred and maybe some treasuries and call it a day, or should you really put a little bit more work into within that. We'll get into that and other issues with the chief investment officer of a firm that oversees about one trillion dollars under management or administration? What first? Charlie Pellett tell us who this week's mystery co host is. This week's mystery co host is Christine Kino. Christine's the European team leader from Bloomberg's Bonds and Foreign exchange coverage. She also pleads guilty to being, in her words, a crazy cat lady. How much does she love cats, you ask? She once flew her kitty in business class from Singapore to Paris and then took the feeline on a six hour cab ride from Paris to London. Okay, Christine, you know this is a very serious buttoned up podcast here, and I wanted to get right to the market's chat, but I first I need to hear this cat story that Charlie just told us about. Listen. Um, my cat is basically my child, and there was no way that she was going to come or she wasn't gonna come with me when I was going to move from Singapore to London. And of course if I was traveling business classes, and she had to travel business class too obviously, so yeah, it was a bit of a journey. She she wrote in her fancy cat carrier. Uh in the business class, Um, cavin on my foot rest in the plane. She was actually a trooper because she only me owd once and that was when we were landing. Um. But the entire time she was quiet as a mouse. Um. We had no accidents and it was a fairly uneventful flight. But then, yeah, we had to take the six hour taxi right from Paris to London, so that was another leg of the journey. But she made it. We we all made it in one piece. No one was a too grumpy at the end of it. Charlie had some questions about how much a cab ride from Paris to London cost and why you didn't take the train. I suspect a corporate card was involved, So you complete the fifth if you want to on that issue, let me let me just say that it probably ate up half of my moving allowance that cab ride alone. That sounds about right. That sounds about right. Well, let's get to that markets chat and bring in our guest, Christie. I'm gonna warn you, UM like me, he's a Philly guy. So if we lapsed into some strange dialect that you don't understand and start talking about winter ice and Hogi's just just go with it, Okay. I'll try my best to a lifer. Yes, your best anyway. He is the chief investment officer for SEI Investments in the suburbs of Philadelphia. His name is Jim Smgell. Jim, Welcome to the show. Thanks, Mike, happy too, uh happy to be here, Jeff. I wanted to start talking first of all about UM. Yeah. I was looking up some of the funds that you're part of the management committee on UM and one really popped out at me, just because it's it's really been on a great streak the last few years. I'm talking about the SEI institutional managed trust dynamic asset allocation fund beaten something like ninety percent of its peers over the last one three five years. I think it is um So I want to just kind of start talking about that. What's the secret sauce for that fund? What are you doing right? That sort of other funds in that category aren't doing as well. Okay, give me a moment to get my thoughts together. I'm still reeling from the from the cat story out of that. It's a shocking tale. I don't I don't know who signs the expense reports at Bloomberg, but it was all above board. Let me share you, uh does it is a It's an interesting fund. It is a unique fund. I'm glad. I'm glad we're able to talk about it. If you know, we're trying to We were trying to solve, you know, pretty basic problem, which is we wanted to diversify. You talked about diversification in your opening. We wanted to diversify the active risks that our clients were we're getting in their portfolio, so not necessarily the portfolio that may have, you know, stocks and bonds, maybe some alts, maybe a little commodity exposure, but really how they're producing excess returns um. We we have a tactical ass allocation program, and the struggle with bringing UH T A A or into a client's portfolio is what do you funded with? What's the vehicle? How do you how do you get it in there? Uh And that's where the D A A fund was kind of born. So what makes it so unique is that it does have an underlying beta to It is essentially an SMP five index fund, but instead of adding value by picking Microsoft or this Apple, we had value by porting our macro themes and macro ideas on top of the SMP. So from client perspective, it makes it pretty easy. You don't think about your funding source, right you. Everybody has SMP exposure. Everybody tends to have it in size. So you can just take out part of your SMP funds, maybe it's an e t F, maybe it's an index fondent. You can replace it with the D A A fund and your underlying strategic asset allocation has not changed at all. The only thing that's changes you're now diversifying a bit of your active exposures and how you size it. Can you know you can adjust how much you want to change those active exposures. You can take on a lot, you can take on a little bit. So we found it to be a pretty useful implementation idea for the end client. And and you know, we've put on a good run. For sure, We've had a good couple of years. But clients seem to not just to be happy obviously with our performance, but also just with how the fund is set up. It gives them a little flexibility and kind of changing their portfolios around. So yeah, tell me, Jim. I mean, I know that you know, diversification, that's the main key word here, right, But I think these days UM investors are facing so many risks and variables UM in markets, and obviously one of them the hot topic these day seems to be inflation. And I know that you have some pretty recent views around it, and I believe you're actually in camp that UM things that inflation pressures are UM less transitory than maybe central banks would imply. Is that right? UM? But you know they keep insisting that it's it's transitory, it's not gonna last very long. You seem to think otherwise. Tell us what are we missing here? Is there someplace that we should be looking where these pressures are actually becoming a bit more entrenched than maybe central bankers would like to admit. I think, you know, I think you're you're right. I mean, broadly, our view is that we're entering into a really unique environment given the stimulus and the type of stimulus, notably the level of fiscal stimulus that we've had, which is not coordinated with the monetary which is which is relatively unusual. Uh, you know, we we think this is a different enough environment where the precision you know that the that the Fed seems to you know, have around this notion of how long these inflationary pressures are going to be. With us, we're just we're just taking the opposite side of the precision, right. We don't have any grandiose model where we're looking at this and saying, well, you know, the Fed thinks that you know, inflation is going to be a two quarter event. We think it's going to be a three quarter event. You know, I don't even know what transitory means. What what is is that a three year thing? Is that a four year thing? So you know, our view is we're just kind of looking at how the markets are pricing in inflation, which seems to be very very subdued, you know, a little pop here, but then kind of a recovery from there. And we're just gonna take the other side of that. We think there's enough stimulus in place, both on the monetary side and on the fiscal side. Uh, you know that we think this can kind of surprise a lot of people. And we're also look, i mean behaviorally, we're getting through a period of time where inflation, you know, was was hard and feathered. I mean, it was dead and it was never coming back. Um, you know, the client portfolios, the classic sixty. Interestingly enough, there is an inflation bed in a sixty portfolio. It just happens to be on deflation, right. So you know, our view is that adding some inflation exposure to a client's portfolio, even in general, is probably a good idea just to get you back to normal. But in this environment that we find ourselves in today, you know, we're happy, We're happy to take the side of an overshoot. We're happy to take the side that the Fed doesn't have, you know, kind of the precision and execution that maybe the market is giving them kind of credit for. So what does that means from sort of allocation standpoint, to take the other side of that, that bed on inflation, is it, you know, load up more on tips, Is it find the equities that are most you know, likely to benefit from inflation? A combo both. I imagine, how would we sort of wrap our heads around how to how to execute on what you're talking about or well, from a strategic perspective, let's just start there for a moment, and I think it all investors should take a look at their portfolio and see do they really have any inflation sensitive assets in their portfolio, and if they don't, a lot of the things that you mentioned we think are worth looking at. Add some tips to your portfolio, add some strategic commodity exposure up to you to your book. But from a tactical perspective, it really is a bit of an all of the above implementation. From from our perspective, so we are directionally overweight commodities relative to what we would consider to be a model portfolio right now. In the Dynamic Acid Allocation Fund, that's our largest exposure. It's directionally long broad commodities. We also have what we would call some value equity exposure that takes a few forms, right, so, uh, and very easy way to get value equity exposure is actually look outside the United States. So in disease in the UK, indicease, and Japan, even in the season Europe, the sectors that make up those stock markets tend to be more value oriented. You're not gonna see the dominating big tech names they'll see in the United States. In the United States. Outside of of outright investing in something like a value index or outright investing in a smart data value factor, you could even take strides like we're doing in in the d A A fund, which is an equal weight SMPAID. Right, So, once you get rid of the high concentration in the mega tech, all of a sudden, you're looking and feeling a lot more like value, which has these kind of reflationary characteristics to it, and we would expect to benefit from that. You know. Outside of that, uh, you know, short bonds is not something we necessarily recommend. We happen to be tactically short on the long end of the curve, right now, that's not something that we would recommend on a strategic basis. Fixed income still plays a role in your portfolio, but we think you know, the pressure is going to be there if if we're if we're of the of the view that inflation is going to surprise so much of the upside. Uh, you know despite the you know, the feeds proclamations. Um, we want to be a little bit sure here. As also as a tactical play, So, Jim, I wanna hone in on your point on commodity specifically because I just finished reading The World for Sale, which is a terrific book by our colleagues Heavier bloss In Jack Fargie's all about the history of how commodity trading houses came to be, from their inception to the modern day trading house. And I gotta tell you that is not a market for the faint hearted. It's not something that your regular mom and pop investor can just very easily dive into without suffering some growing pain. So would you have any sort of advice for the novice investor who may want to dip their toes into the commodity space? Ace, How would they? How would you advise they get started in that? It's it's it's a great point. It's a that sounds like a book I should probably pick up and put on the summer reading list. Um, but it's exactly right. I mean, commodities are this is a trading oriented asset class, right, I mean then that's you know, that's you know, everyone's you know the you know, if you're if you're as old as I am and maybe as old as Michael, remember trading trading spaces and you're in the commodity pits, and um, Christina's probably has no idea what we're talking about. I have no idea what you're talking about. But I'm thinking of a spitoff podcast that's just old man referenced movie references Jim for for people like Christine, so they know what we're talking about when we get together. You know, maybe maybe follow up with a link for Christine. You can catch up Eddie Murphy. You gotta you gotta watch on Christine. It's a classic and sett in Philadelphia by said in Philadelphia that's exactly right. Um, So, so you know you're right. Commodities are not you know they it is much much more difficult. The implementation from the portfolio perspective is not going to be obviously hard commodities you're gonna be doing this is all futures contract based, which also makes a little bit more difficult because we're talking about derivatives, and we have talked about things like you know, the roll down and whether we're in cantangula or backwardation. But there are, thankfully, just given how the market is evolved, very very easy ways to get broad based commodity exposure. Just look in the E t F space. There's commodity e t s that are broad based. They're based on the b Comm Index, which is the more diversified as opposed to the to the Goldman Index, um doesn't have as much asn't as heavy into energy crosses over all of the different sectors, and two base metals and precious and eggs and of course into the energy components as well. So really easy, they're relatively they're relatively cheap, you don't have to and and many of them are even K one free. So for those investors that hear futures and ETFs in the same sentence and immediately like, I don't want to deal with the K one for my account, Gonna charge me more for it. Plenty of ways around that in commodity space, so it has become a relatively easy addition to client portfolios just by looking at ETF space. Now, I want to go back to what you said earlier about sixty forty UM. It's interesting that you mentioned that because it's such a divisive sort of topic these days. We have a number of prominent people calling the death of this investment approach, right, but um, are you still a believer in that? And how do you think that kind of profile has changed when we're an environment where um, the ten year treasuries are yielding what one and a half percent? Uh, those in Europe are barely above zero UM and there's just not a lot of yield to go when when you're talking about your traditional UM bond destinations, you know, so how how what does that look like for you these days? You know, the sixty forty split, Like, where where could we be looking beyond the traditional UM fixed income markets for a bit more yield than you know what we're getting now. That's you know, it's it's a great question. It's when we get a lot um you know, we we've actually been of the mind that is, you know, quite frankly, never really been a great diversified portfolio. I mean you've you know, you've had many folks on on this podcast in the past that would probably tell you that the similar story. But a sixty forty portfolio is is essentially a deluded equity portfolio. Right. The vall differential between your equity investments and your fixing co investments are such that the bonds don't really matter all that much. Right, You're you're your sixty of your capital is invested in equities, but of your risk is an equity. So it's not a terribly diversified portfolio. So we've always been we always push our clients in the direction of thinking about diversification, even outside of where we are today, which is, you know, low yields and people actually, you know, catching this idea that inflation might might be a problem, and what might that do with yields. Let's answer your question directly. I mean it is, you know, from a strategic perspective, you do want to think about diversification through multiple lenses, right, So we've already talked about one of those lenses, which is risk. So a sixfolio from a risk perspective isn't gonna look terribly diversified. We already talked about another one of those lenses, which is why does it relate to the macro environment like growth and inflation. We know that, you know, rising above trend glow growth, which we think is probably the situation we're in in the near term here. That's gonna benefit equities, that's gonna benefit things like credit, which are highly correlated to equities. But a rising inflation and above trend inflation, you know that probably is not going to benefit your your fixed income assets, assuming that their nominal bonds and with equities they have a love hate relationship right when we're coming from a low base like so when you move from deflation to inflation, inflation is hugely positive for equities. But when you move from somewhat trend inflation to above trend or more importantly unexpected inflation, that's what that's what equities tend to roll over. So there's a lot of things that I think clients can do right away, you know, to make to sit there at sixty forty portfolio better and we've we've talked about them already. Tips replace some of your nominal bonds with tips. We do think that makes a lot of sense. There's the inherent adjustment to two c p I. It's regardless of what your view is transitory or not transitory. Uh, that's going to make your portfolio from a strategic strategic perspective more robust. We would also suggest things like gold or in a broader commodity complex, a broader commodity exposure. Again, it's going to make your portfolio more robust because the characteristics of broad based commodities will differ at certain times from equities and from nominal bonds. So you know, what we wouldn't suggest is to go from one portfolio sixty forty, which we view is not not necessarily being to versified, to something like you know, eighty equity and even less fixed income, which is even less diversified. Don't abandon all semblance of an interest rate sensitivity because look, we're all in the prediction business, and that's a really difficult business to be in, and no one has a crystal wall. And can I come up with a few different scenarios where rates stay exactly where they are, or rates fall from here, or rates rise but in a very calm and measured way, which would actually benefit in some ways your nomenal boston, your portfolio. I can come up with those, and we just we just don't know, so diversification isn't about from your strategic portfolio. You know, It's not about making short term bets. It's it's looking over the long term and deciding, how can I make this the most robust portfolio for any outcome that may come down the pike. Yeah, Jim, when it comes to I think all our listeners are are six game stop smart such a Before you were named c I O of s c I, you were c I O of non traditional Strategies, and Uh, I was laughing about that concept earlier, thinking like, boy, we've seen some non traditional strategies this year. You've got Dave Portnoy picking letters out of a scrabble bag to figure out what stock trickers he wants to buy it, and the whole Reddit phenomenon. And don't worry, I know, I know that's not what you're talking about. But I wanted to sort of get your sense of the alternative asset classes now, especially as they fit into that notion of diversification, because I was watching some of the videos on the SEI website. Uh, You've had some really interesting chats with a colleague there, and you brought up some stuff that I think not a lot of people think about especially home country bias, and you know, there's a bias towards these mega caps that are dominating the market today. So if you buy an SP five fund these days, you know, as U S investor, you, hey, you're you've got that home country bias and you're really loading up on these mega cap you know, Amazons and Apples of the world. So how do the alts fit into that space? And what alts um sort of look attractive these days to you? You know, you mentioned commodities obviously being sort of a real asset type of way to diversify. What else is sort of you know, catching your interest as a way to get away from some of these uh inherent biases that h SMP five fund holder might have. Sure, and I think it's it's it's a great question because it's even a bit of a misnomer. You know when people talk about, well, I'm allocated to equities, fixed income, and alts. You know, I don't know what what does alts even mean? I mean, that's like saying I'm allocated to equities, fixed income and mutual funds. It doesn't it doesn't tell me anything. You've just described a rapper. You haven't described anything that I can actually you know, sink my teeth into as it relates to the exposures from a return perspective or a risk perspective that you're bringing to your portfolio. So obviously, like everything that we do, we're trying to our our alternative book of business is trying to be as diversifying as we can. So, yes, that's going to be more relative value trading, so long shorts which allow us to kind of lower the correlation profile. So even if we're utilizing you know, what are even just basic US equity exposure, we can change that correlation profile by making sure that it's very low net beta UH and long short so it's you're you're you're exploiting the differences between two sectors, or two names, or or two countries, whatever the case may be. UH, and that gives you that kind of diversifying profile. Right now, we really like global macro. Probably not surprising this has been a part of the alternative universe that is that has been very unloved because it's been somewhat challenged. Um, you know this is UH can be somewhat of a long volatility of strategy as well. Typically deals a lot in futures, which gives it commodities and rates and inflation as kind of its kind of its basis, A little bit a little bit of momentum attached to that as well, but we tended to emphasize that a little bit. But so this kind of notion of global macro we think fits very very nicely into a broader portfolio, which tends to be dominated as I mentioned with equity risk already, UH, and even credit on the fixed income side, which is of course highly correlated with with the equity side of the business. So you're seeing in our book of business, you're seeing a little bit more of an emphasis right now on the global macro side of things, uh, given where we are in the cycle, but also because of US diversification properties CHIP too quick questions, um, before we get to the crazy things. UM. First one is I know what se s c I. You guys were kind of early to the notion of low volatility stocks UM, and then last year we had one of these episodes where they kind of we're in the wrong place at the right time or or wrong place at the wrong time. I guess you could call it. You know, a lot of that cohort happened to be names that really got hurt by the COVID lockdowns. Now on the other side of it, UM, a lot of low vultility stocks tend to be high dividend players, high yielding stocks, which might not perform as well in a rising interest rate environment if you're right about the inflation being you know, hot for a couple of years now. So it was one of those strategies that you're kind of would would uh put on the bench for a while, on the sidelines, um in times like this. And the second question is I I asked us of all Philadelphia people, but it's it's uh, Genos, Genos or Pats. Well, the second question is the easier one, and that's Geno's. Okay, we'll start there, all right, Okay, you know, if you want to get tactically, it would be Jim's, but Jim's Okay, the binary choice, we'll go. This is one of those parts where Christine's lost here. But these are the famous cheese steak restaurant to yes, yeah, I was going to ask, is there a way to get that over here in London because we're desperate for any kind of Philly tee steak offering here. I'll see what I can do. I'll see it again. Personally, I'm a I'm a shorter line guy. Which who's ever got the shorter line? Bloomberg spares no expense to I mean, if you can get a cat, I'm sure you can get a Philly cheese steak. I mean, you can't tell me you can't get a cheese steak over there, and you don't have a point. Don't disappoint me. People cheese love all. Great, I mean, great question, and you're exactly right. I mean, well, what a aligning of stars in the wrong direction for low ball. So you know we have this, you know, we have this big market dip and what does well you know is stay at home stock. So yes, you know, Peloton not a low vall stock. So, uh, you know it is it has taken some time really to educate investors about Wait a minute, you know the appeal the biggest appeal of the strategy is is just that is that is that's going to rest you mean and blunt some I mean not all, but some of the draw down, uh and certainly in in COVID times that is that is not going to be the case. Just how unusual that draw down was and what benefited from it? Uh, I think you're you're you're also right, these do tend to be uh interest rate some more interest rate sensitive stocks. I mean sometimes when we'll model this exposure, it will be kind of an eight twenty you know, it's an eight percent equity exposure, kind kind of fixed income exposure. Um. But you know, so we we still think it plays a role in a in a client's portfolio because we still remain confident in its ability to dampen, to damp and draw down. So it may have a bit more of a head when and remember what the overarching purposes of kind of a low ball equity strategy, which is, you know, you are taking a lower risk position, but your lower risk position isn't going to translate into that exact same lower return position, So you're going to outperform the mark at beta that you're taking. And we still believe that to be the case. So in years past, you know, you've taken a point eight beta and you've you've basically outperformed the index, which is highly highly unusual. We don't expect that to be happening going forward, but we still think that the anomaly remains uh, and that a position in low all equities will outperform the beta that you're taking by investing in that sector. So it's not it's not something that you know unless you are an ultra conservative investor. We were not recommending a hundercent allocations to low ball equities, but in many cases, even even very aggressive investors, I mean, think about it from this perspective. We talked about a sixty its risk in equities, even a very aggressive investor having some low ball is actually a really good way of increasing your interest rate sensitivity and therefore diversifying your portfolio and reducing your alliance on equity beta. So we think it does have it's definitely a tool. It should be a tool in the investors uh, you know, tool shed, and it kind of it can really apply to all different kinds of investors, not just what you typically think about it when you think about low ball, this is oh, this is really conservative. These are folks that are focused on income. It can also play a nice role for very aggressive investors kind of dampen the overall up beta and their portfolio and further diversify um their exposures. Christine, I think that was code language for old old guys like me. They're those uh, those those conservative scared to death portfolio as opposed to Christine's portfolio. Two different, two different risk appetites, but the same cheese take appetite. I'll say, Christine, we will work on getting you one, uh, one of these days. I don't know how how well it will travel. It might not travel as well as your cat, but I'll do my best. If you fly in business class, it has a better chance of surviving. All right, all right, if I can get this on the expense account, I'll be a legend, I think, uh, an all time legend of of the of the game. But with that said, I think that's our perfect segue to Jim. We have a tradition here we call the craziest thing we saw in markets this week. Stand clear of the craziest things we saw in markets this week, and it's it's been a bowl market for crazy things the last couple of years, I think. So I'm excited to hear what you guys all have. Christine. Let's start with you, what's the craziest thing you saw this week? Well, the craziest thing that I saw this week was the sale in non fungible token form of the original world Wide Web source code for over five million dollars. And frankly, I'm surprised it took sir Tim berners Lee this long to capitalize on this, because of course he probably didn't realize just the astounding impact of his invention right thirty two years ago, um now and when he essentially created a worldwide Web, and I don't think he's really ever kind of profited much from that creation. And so I think over five million dollars that's probably a fair price. That's probably actually cheap. This. Yeah, I'm just gonna every other single n f T I've ever heard about seemed about over price. But the entire code of the web, maybe that's fair. I mean there's some n f T artists that were sold some things for sixty million dollars, I mean original source code of the Worldwide Yeah, that seems that's a that's that's cheap right there, that's a bargain. That's a downright steel. That's in the value cohort of of n f T s right there. I think for sure, what's the n f T. We're all rotates in the value that things canna, how about you Jim, what's the craziest thing you So, so here's here's my contribution. And so again not to pick on Christine too much, but this might not resonate with her. I don't know how. I don't know how your generation buys cars. You know, maybe you guys just fight online and get it delivered. Ah, Michael and myself when we buy a new car. Uh, you enjoy the process, right, and part of the process is the haggle. You go in, you sit down and talk to the sales guy. He goes and has to go talk to his manager and he just goes and you know, exactly gets the trade of water or something, goes to the bathroom, comes back. So JD Power comes out this week and uh, the here's the number. So the number of new cars that are selling at or above their uh M s r P prior to the crisis was a third and I was surprised. I thought that was even a bit high. So thirt of the cars prior to COVID actually would sell above their m s r P or at their m s r P today of new cars, so you can't even enjoy kind of going into a to a to a show room and haggling over new car. So the crazy thing that is going up apparently is all new car prices. You're you're you're bidding them like they're there their shorehouses for forgettness sake. What's what's what's going on out there? It's crazy. That is pretty. That's unbelievable. I hadn't seen that. That's a good one though. Wow. Wow, that's why I don't know. I'm happy to walk to the train until so that all works its way through. I got a daughter who's dying for a new car, just got her license to But now I'm gonna explain. Now I have more ammunition to explain to her why that's not gonna be happening in this Uh. All right, very both of these are very good. I I you guys brought it. I've got a lot of competition this week, but I'll give you mine. Finds a story this week from Bloomberg about investors who are looking a group of investors, a couple of guys from private equity you want had a VC background. Two They're looking to raise a hundred million dollars for a new fund, uh to buy antiques and apparently the antique market and I know, I don't really know anything about this, but it's really been in the dull drums ever since the two thousand and eight financial crisis that there's apparently some pieces that are selling for what they would sell for. So I guess in the in the dot com Heyday antiques, we're in a bull market too, So they're called the Tangible Assets Group. Guy named Gary Sargeant is the He's the antique dealer who's kind of in charge of it all. But then he's got some private equity guys who got named John French and a guy named Tom tom Berg Glund And this is uh, Jim, this is where I love it. The quote from the story UH fits in well with the inflation discussion we had. Uh tom Berg one said, as we move into a period of higher inflation and greater uncertainty, these alternative assets will be a great store of valley and an inflation heade. So they're going around by it a hundred million dollars worth of antiques. That's gonna take a while, I think. Um. And and one more thing fore, Jim, this is one of my favorite parts of the story. Apparently one there's a uh an old chest of drawers that's really tall, and it's got a real fancy ornament on the top. I've never heard about before, but it's it's hot and antique markets. It's called the Philadelphia High Boy. So I don't know. I don't know why I got. I Google did, I can't find any explanation of what the Philadelphia High Boy is. It sounds like a guy you'd run into it the parking lot of Veteran Stadium. But there's a few of them. There's a whole section of those guys the yellow seats. So Christine, Uh, that's the craziest thing I got. But I I one of these rare weeks where I think I come in third place. I think you guys both beat me. I'm I'm happy to take the bronze. It was stiff competition. Uh. And I appreciate you guys bringing your a game with your crazy things, and really for for all your time this week. Fascinating conversation. Jim, great to me. You're great to talk to you. I hope we can do it again. That would be great. I appreciate it. Thanks for all the time today. And Christine, I'll be talking to you soon, I'm sure. Uh. And Christine before we leave. What's the scene in London right now? I always like to catch up on London. I've been worried about London ever since I heard the pubs were closed. I was just worried about everyone's mental mental health. The pubs are back open and everyone's happy again in London. Well, it's what we call Thursty Thursday today. And so I had just come back from the h The Bloomberg office in London is surrounded by pubs in restaurants and uh, it's basically like lockdown never happened. Everyone. The streets are full of people enjoying their pints and some of them are probably going to be stumbling home tonight. But it's all good. And also England one their match against Germany earlier this week, so there's a lot to celebrate in the city of London. We're We're also enjoying a rare sunny day. So yeah, I think there's gonna be a lot of hungover people on Friday morning. Alright, alright, soccer in case it wasn't clear, Yes, that's a soccer game. Oh yeah, I believe me. I would never imagine England winning an actual football game, although it is getting popularity over there from I don't understand theo's NFL and London games are really spreading the Oh yeah, the Jacksonville Jaguars are the unofficial London team because they are the only NFL team that has had a London game ever since its inception many years ago. Now every year they're there, I think, right, I think there's some connection right the owners, uh British football guy or something. I don't know, you google that. I'm probably getting that wrong. Jacksonville, London. I mean it's really the same, right right, right, you're all Florida, Florida men, Christine, I'm not gonna keep you anymore. I'm sure you're thirsty. Get out there and enjoy the rest of that beautiful night. And Jim, thanks again. Uh, and that's all the time we have. Thanks those pleasure. 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'd love it if you took the time to rate and review the show on Apple podcast so more listeners can find us. And you can find us on Twitter, follow me at Reaganonymous. Christina Kino is at Chris a Q News. You can also follow Bloomberg Podcasts at podcast I Think. Get to Charlie Pealder, Bloomberg Radio in the voice of the New York City subway system. What Goes Up is produced by tofor for Has. The head of Bloomberg Podcasts is Francesco Levie. Thanks for listening. To see you next time.

Hello, and welcome to What Goes Up, a weekly markets podcast. I'm Mike Reagan, senior editor at Bloomberg, and this week on the show, Well, you've heard it a million times. If you're an investor, you need to diversify. But what exactly does that mean? Can you just buy the entire SMP five hundred and maybe some treasuries and call it a day, or should you really put a little bit more work into within that. We'll get into that and other issues with the chief investment officer of a firm that oversees about one trillion dollars under management or administration? What first? Charlie Pellett tell us who this week's mystery co host is. This week's mystery co host is Christine Kino. Christine's the European team leader from Bloomberg's Bonds and Foreign exchange coverage. She also pleads guilty to being, in her words, a crazy cat lady. How much does she love cats, you ask? She once flew her kitty in business class from Singapore to Paris and then took the feeline on a six hour cab ride from Paris to London. Okay, Christine, you know this is a very serious buttoned up podcast here, and I wanted to get right to the market's chat, but I first I need to hear this cat story that Charlie just told us about. Listen. Um, my cat is basically my child, and there was no way that she was going to come or she wasn't gonna come with me when I was going to move from Singapore to London. And of course if I was traveling business classes, and she had to travel business class too obviously, so yeah, it was a bit of a journey. She she wrote in her fancy cat carrier. Uh in the business class, Um, cavin on my foot rest in the plane. She was actually a trooper because she only me owd once and that was when we were landing. Um. But the entire time she was quiet as a mouse. Um. We had no accidents and it was a fairly uneventful flight. But then, yeah, we had to take the six hour taxi right from Paris to London, so that was another leg of the journey. But she made it. We we all made it in one piece. No one was a too grumpy at the end of it. Charlie had some questions about how much a cab ride from Paris to London cost and why you didn't take the train. I suspect a corporate card was involved, So you complete the fifth if you want to on that issue, let me let me just say that it probably ate up half of my moving allowance that cab ride alone. That sounds about right. That sounds about right. Well, let's get to that markets chat and bring in our guest, Christie. I'm gonna warn you, UM like me, he's a Philly guy. So if we lapsed into some strange dialect that you don't understand and start talking about winter ice and Hogi's just just go with it, Okay. I'll try my best to a lifer. Yes, your best anyway. He is the chief investment officer for SEI Investments in the suburbs of Philadelphia. His name is Jim Smgell. Jim, Welcome to the show. Thanks, Mike, happy too, uh happy to be here, Jeff. I wanted to start talking first of all about UM. Yeah. I was looking up some of the funds that you're part of the management committee on UM and one really popped out at me, just because it's it's really been on a great streak the last few years. I'm talking about the SEI institutional managed trust dynamic asset allocation fund beaten something like ninety percent of its peers over the last one three five years. I think it is um So I want to just kind of start talking about that. What's the secret sauce for that fund? What are you doing right? That sort of other funds in that category aren't doing as well. Okay, give me a moment to get my thoughts together. I'm still reeling from the from the cat story out of that. It's a shocking tale. I don't I don't know who signs the expense reports at Bloomberg, but it was all above board. Let me share you, uh does it is a It's an interesting fund. It is a unique fund. I'm glad. I'm glad we're able to talk about it. If you know, we're trying to We were trying to solve, you know, pretty basic problem, which is we wanted to diversify. You talked about diversification in your opening. We wanted to diversify the active risks that our clients were we're getting in their portfolio, so not necessarily the portfolio that may have, you know, stocks and bonds, maybe some alts, maybe a little commodity exposure, but really how they're producing excess returns um. We we have a tactical ass allocation program, and the struggle with bringing UH T A A or into a client's portfolio is what do you funded with? What's the vehicle? How do you how do you get it in there? Uh And that's where the D A A fund was kind of born. So what makes it so unique is that it does have an underlying beta to It is essentially an SMP five index fund, but instead of adding value by picking Microsoft or this Apple, we had value by porting our macro themes and macro ideas on top of the SMP. So from client perspective, it makes it pretty easy. You don't think about your funding source, right you. Everybody has SMP exposure. Everybody tends to have it in size. So you can just take out part of your SMP funds, maybe it's an e t F, maybe it's an index fondent. You can replace it with the D A A fund and your underlying strategic asset allocation has not changed at all. The only thing that's changes you're now diversifying a bit of your active exposures and how you size it. Can you know you can adjust how much you want to change those active exposures. You can take on a lot, you can take on a little bit. So we found it to be a pretty useful implementation idea for the end client. And and you know, we've put on a good run. For sure, We've had a good couple of years. But clients seem to not just to be happy obviously with our performance, but also just with how the fund is set up. It gives them a little flexibility and kind of changing their portfolios around. So yeah, tell me, Jim. I mean, I know that you know, diversification, that's the main key word here, right, But I think these days UM investors are facing so many risks and variables UM in markets, and obviously one of them the hot topic these day seems to be inflation. And I know that you have some pretty recent views around it, and I believe you're actually in camp that UM things that inflation pressures are UM less transitory than maybe central banks would imply. Is that right? UM? But you know they keep insisting that it's it's transitory, it's not gonna last very long. You seem to think otherwise. Tell us what are we missing here? Is there someplace that we should be looking where these pressures are actually becoming a bit more entrenched than maybe central bankers would like to admit. I think, you know, I think you're you're right. I mean, broadly, our view is that we're entering into a really unique environment given the stimulus and the type of stimulus, notably the level of fiscal stimulus that we've had, which is not coordinated with the monetary which is which is relatively unusual. Uh, you know, we we think this is a different enough environment where the precision you know that the that the Fed seems to you know, have around this notion of how long these inflationary pressures are going to be. With us, we're just we're just taking the opposite side of the precision, right. We don't have any grandiose model where we're looking at this and saying, well, you know, the Fed thinks that you know, inflation is going to be a two quarter event. We think it's going to be a three quarter event. You know, I don't even know what transitory means. What what is is that a three year thing? Is that a four year thing? So you know, our view is we're just kind of looking at how the markets are pricing in inflation, which seems to be very very subdued, you know, a little pop here, but then kind of a recovery from there. And we're just gonna take the other side of that. We think there's enough stimulus in place, both on the monetary side and on the fiscal side. Uh, you know that we think this can kind of surprise a lot of people. And we're also look, i mean behaviorally, we're getting through a period of time where inflation, you know, was was hard and feathered. I mean, it was dead and it was never coming back. Um, you know, the client portfolios, the classic sixty. Interestingly enough, there is an inflation bed in a sixty portfolio. It just happens to be on deflation, right. So you know, our view is that adding some inflation exposure to a client's portfolio, even in general, is probably a good idea just to get you back to normal. But in this environment that we find ourselves in today, you know, we're happy, We're happy to take the side of an overshoot. We're happy to take the side that the Fed doesn't have, you know, kind of the precision and execution that maybe the market is giving them kind of credit for. So what does that means from sort of allocation standpoint, to take the other side of that, that bed on inflation, is it, you know, load up more on tips, Is it find the equities that are most you know, likely to benefit from inflation? A combo both. I imagine, how would we sort of wrap our heads around how to how to execute on what you're talking about or well, from a strategic perspective, let's just start there for a moment, and I think it all investors should take a look at their portfolio and see do they really have any inflation sensitive assets in their portfolio, and if they don't, a lot of the things that you mentioned we think are worth looking at. Add some tips to your portfolio, add some strategic commodity exposure up to you to your book. But from a tactical perspective, it really is a bit of an all of the above implementation. From from our perspective, so we are directionally overweight commodities relative to what we would consider to be a model portfolio right now. In the Dynamic Acid Allocation Fund, that's our largest exposure. It's directionally long broad commodities. We also have what we would call some value equity exposure that takes a few forms, right, so, uh, and very easy way to get value equity exposure is actually look outside the United States. So in disease in the UK, indicease, and Japan, even in the season Europe, the sectors that make up those stock markets tend to be more value oriented. You're not gonna see the dominating big tech names they'll see in the United States. In the United States. Outside of of outright investing in something like a value index or outright investing in a smart data value factor, you could even take strides like we're doing in in the d A A fund, which is an equal weight SMPAID. Right, So, once you get rid of the high concentration in the mega tech, all of a sudden, you're looking and feeling a lot more like value, which has these kind of reflationary characteristics to it, and we would expect to benefit from that. You know. Outside of that, uh, you know, short bonds is not something we necessarily recommend. We happen to be tactically short on the long end of the curve, right now, that's not something that we would recommend on a strategic basis. Fixed income still plays a role in your portfolio, but we think you know, the pressure is going to be there if if we're if we're of the of the view that inflation is going to surprise so much of the upside. Uh, you know despite the you know, the feeds proclamations. Um, we want to be a little bit sure here. As also as a tactical play, So, Jim, I wanna hone in on your point on commodity specifically because I just finished reading The World for Sale, which is a terrific book by our colleagues Heavier bloss In Jack Fargie's all about the history of how commodity trading houses came to be, from their inception to the modern day trading house. And I gotta tell you that is not a market for the faint hearted. It's not something that your regular mom and pop investor can just very easily dive into without suffering some growing pain. So would you have any sort of advice for the novice investor who may want to dip their toes into the commodity space? Ace, How would they? How would you advise they get started in that? It's it's it's a great point. It's a that sounds like a book I should probably pick up and put on the summer reading list. Um, but it's exactly right. I mean, commodities are this is a trading oriented asset class, right, I mean then that's you know, that's you know, everyone's you know the you know, if you're if you're as old as I am and maybe as old as Michael, remember trading trading spaces and you're in the commodity pits, and um, Christina's probably has no idea what we're talking about. I have no idea what you're talking about. But I'm thinking of a spitoff podcast that's just old man referenced movie references Jim for for people like Christine, so they know what we're talking about when we get together. You know, maybe maybe follow up with a link for Christine. You can catch up Eddie Murphy. You gotta you gotta watch on Christine. It's a classic and sett in Philadelphia by said in Philadelphia that's exactly right. Um, So, so you know you're right. Commodities are not you know they it is much much more difficult. The implementation from the portfolio perspective is not going to be obviously hard commodities you're gonna be doing this is all futures contract based, which also makes a little bit more difficult because we're talking about derivatives, and we have talked about things like you know, the roll down and whether we're in cantangula or backwardation. But there are, thankfully, just given how the market is evolved, very very easy ways to get broad based commodity exposure. Just look in the E t F space. There's commodity e t s that are broad based. They're based on the b Comm Index, which is the more diversified as opposed to the to the Goldman Index, um doesn't have as much asn't as heavy into energy crosses over all of the different sectors, and two base metals and precious and eggs and of course into the energy components as well. So really easy, they're relatively they're relatively cheap, you don't have to and and many of them are even K one free. So for those investors that hear futures and ETFs in the same sentence and immediately like, I don't want to deal with the K one for my account, Gonna charge me more for it. Plenty of ways around that in commodity space, so it has become a relatively easy addition to client portfolios just by looking at ETF space. Now, I want to go back to what you said earlier about sixty forty UM. It's interesting that you mentioned that because it's such a divisive sort of topic these days. We have a number of prominent people calling the death of this investment approach, right, but um, are you still a believer in that? And how do you think that kind of profile has changed when we're an environment where um, the ten year treasuries are yielding what one and a half percent? Uh, those in Europe are barely above zero UM and there's just not a lot of yield to go when when you're talking about your traditional UM bond destinations, you know, so how how what does that look like for you these days? You know, the sixty forty split, Like, where where could we be looking beyond the traditional UM fixed income markets for a bit more yield than you know what we're getting now. That's you know, it's it's a great question. It's when we get a lot um you know, we we've actually been of the mind that is, you know, quite frankly, never really been a great diversified portfolio. I mean you've you know, you've had many folks on on this podcast in the past that would probably tell you that the similar story. But a sixty forty portfolio is is essentially a deluded equity portfolio. Right. The vall differential between your equity investments and your fixing co investments are such that the bonds don't really matter all that much. Right, You're you're your sixty of your capital is invested in equities, but of your risk is an equity. So it's not a terribly diversified portfolio. So we've always been we always push our clients in the direction of thinking about diversification, even outside of where we are today, which is, you know, low yields and people actually, you know, catching this idea that inflation might might be a problem, and what might that do with yields. Let's answer your question directly. I mean it is, you know, from a strategic perspective, you do want to think about diversification through multiple lenses, right, So we've already talked about one of those lenses, which is risk. So a sixfolio from a risk perspective isn't gonna look terribly diversified. We already talked about another one of those lenses, which is why does it relate to the macro environment like growth and inflation. We know that, you know, rising above trend glow growth, which we think is probably the situation we're in in the near term here. That's gonna benefit equities, that's gonna benefit things like credit, which are highly correlated to equities. But a rising inflation and above trend inflation, you know that probably is not going to benefit your your fixed income assets, assuming that their nominal bonds and with equities they have a love hate relationship right when we're coming from a low base like so when you move from deflation to inflation, inflation is hugely positive for equities. But when you move from somewhat trend inflation to above trend or more importantly unexpected inflation, that's what that's what equities tend to roll over. So there's a lot of things that I think clients can do right away, you know, to make to sit there at sixty forty portfolio better and we've we've talked about them already. Tips replace some of your nominal bonds with tips. We do think that makes a lot of sense. There's the inherent adjustment to two c p I. It's regardless of what your view is transitory or not transitory. Uh, that's going to make your portfolio from a strategic strategic perspective more robust. We would also suggest things like gold or in a broader commodity complex, a broader commodity exposure. Again, it's going to make your portfolio more robust because the characteristics of broad based commodities will differ at certain times from equities and from nominal bonds. So you know, what we wouldn't suggest is to go from one portfolio sixty forty, which we view is not not necessarily being to versified, to something like you know, eighty equity and even less fixed income, which is even less diversified. Don't abandon all semblance of an interest rate sensitivity because look, we're all in the prediction business, and that's a really difficult business to be in, and no one has a crystal wall. And can I come up with a few different scenarios where rates stay exactly where they are, or rates fall from here, or rates rise but in a very calm and measured way, which would actually benefit in some ways your nomenal boston, your portfolio. I can come up with those, and we just we just don't know, so diversification isn't about from your strategic portfolio. You know, It's not about making short term bets. It's it's looking over the long term and deciding, how can I make this the most robust portfolio for any outcome that may come down the pike. Yeah, Jim, when it comes to I think all our listeners are are six game stop smart such a Before you were named c I O of s c I, you were c I O of non traditional Strategies, and Uh, I was laughing about that concept earlier, thinking like, boy, we've seen some non traditional strategies this year. You've got Dave Portnoy picking letters out of a scrabble bag to figure out what stock trickers he wants to buy it, and the whole Reddit phenomenon. And don't worry, I know, I know that's not what you're talking about. But I wanted to sort of get your sense of the alternative asset classes now, especially as they fit into that notion of diversification, because I was watching some of the videos on the SEI website. Uh, You've had some really interesting chats with a colleague there, and you brought up some stuff that I think not a lot of people think about especially home country bias, and you know, there's a bias towards these mega caps that are dominating the market today. So if you buy an SP five fund these days, you know, as U S investor, you, hey, you're you've got that home country bias and you're really loading up on these mega cap you know, Amazons and Apples of the world. So how do the alts fit into that space? And what alts um sort of look attractive these days to you? You know, you mentioned commodities obviously being sort of a real asset type of way to diversify. What else is sort of you know, catching your interest as a way to get away from some of these uh inherent biases that h SMP five fund holder might have. Sure, and I think it's it's it's a great question because it's even a bit of a misnomer. You know when people talk about, well, I'm allocated to equities, fixed income, and alts. You know, I don't know what what does alts even mean? I mean, that's like saying I'm allocated to equities, fixed income and mutual funds. It doesn't it doesn't tell me anything. You've just described a rapper. You haven't described anything that I can actually you know, sink my teeth into as it relates to the exposures from a return perspective or a risk perspective that you're bringing to your portfolio. So obviously, like everything that we do, we're trying to our our alternative book of business is trying to be as diversifying as we can. So, yes, that's going to be more relative value trading, so long shorts which allow us to kind of lower the correlation profile. So even if we're utilizing you know, what are even just basic US equity exposure, we can change that correlation profile by making sure that it's very low net beta UH and long short so it's you're you're you're exploiting the differences between two sectors, or two names, or or two countries, whatever the case may be. UH, and that gives you that kind of diversifying profile. Right now, we really like global macro. Probably not surprising this has been a part of the alternative universe that is that has been very unloved because it's been somewhat challenged. Um, you know this is UH can be somewhat of a long volatility of strategy as well. Typically deals a lot in futures, which gives it commodities and rates and inflation as kind of its kind of its basis, A little bit a little bit of momentum attached to that as well, but we tended to emphasize that a little bit. But so this kind of notion of global macro we think fits very very nicely into a broader portfolio, which tends to be dominated as I mentioned with equity risk already, UH, and even credit on the fixed income side, which is of course highly correlated with with the equity side of the business. So you're seeing in our book of business, you're seeing a little bit more of an emphasis right now on the global macro side of things, uh, given where we are in the cycle, but also because of US diversification properties CHIP too quick questions, um, before we get to the crazy things. UM. First one is I know what se s c I. You guys were kind of early to the notion of low volatility stocks UM, and then last year we had one of these episodes where they kind of we're in the wrong place at the right time or or wrong place at the wrong time. I guess you could call it. You know, a lot of that cohort happened to be names that really got hurt by the COVID lockdowns. Now on the other side of it, UM, a lot of low vultility stocks tend to be high dividend players, high yielding stocks, which might not perform as well in a rising interest rate environment if you're right about the inflation being you know, hot for a couple of years now. So it was one of those strategies that you're kind of would would uh put on the bench for a while, on the sidelines, um in times like this. And the second question is I I asked us of all Philadelphia people, but it's it's uh, Genos, Genos or Pats. Well, the second question is the easier one, and that's Geno's. Okay, we'll start there, all right, Okay, you know, if you want to get tactically, it would be Jim's, but Jim's Okay, the binary choice, we'll go. This is one of those parts where Christine's lost here. But these are the famous cheese steak restaurant to yes, yeah, I was going to ask, is there a way to get that over here in London because we're desperate for any kind of Philly tee steak offering here. I'll see what I can do. I'll see it again. Personally, I'm a I'm a shorter line guy. Which who's ever got the shorter line? Bloomberg spares no expense to I mean, if you can get a cat, I'm sure you can get a Philly cheese steak. I mean, you can't tell me you can't get a cheese steak over there, and you don't have a point. Don't disappoint me. People cheese love all. Great, I mean, great question, and you're exactly right. I mean, well, what a aligning of stars in the wrong direction for low ball. So you know we have this, you know, we have this big market dip and what does well you know is stay at home stock. So yes, you know, Peloton not a low vall stock. So, uh, you know it is it has taken some time really to educate investors about Wait a minute, you know the appeal the biggest appeal of the strategy is is just that is that is that's going to rest you mean and blunt some I mean not all, but some of the draw down, uh and certainly in in COVID times that is that is not going to be the case. Just how unusual that draw down was and what benefited from it? Uh, I think you're you're you're also right, these do tend to be uh interest rate some more interest rate sensitive stocks. I mean sometimes when we'll model this exposure, it will be kind of an eight twenty you know, it's an eight percent equity exposure, kind kind of fixed income exposure. Um. But you know, so we we still think it plays a role in a in a client's portfolio because we still remain confident in its ability to dampen, to damp and draw down. So it may have a bit more of a head when and remember what the overarching purposes of kind of a low ball equity strategy, which is, you know, you are taking a lower risk position, but your lower risk position isn't going to translate into that exact same lower return position, So you're going to outperform the mark at beta that you're taking. And we still believe that to be the case. So in years past, you know, you've taken a point eight beta and you've you've basically outperformed the index, which is highly highly unusual. We don't expect that to be happening going forward, but we still think that the anomaly remains uh, and that a position in low all equities will outperform the beta that you're taking by investing in that sector. So it's not it's not something that you know unless you are an ultra conservative investor. We were not recommending a hundercent allocations to low ball equities, but in many cases, even even very aggressive investors, I mean, think about it from this perspective. We talked about a sixty its risk in equities, even a very aggressive investor having some low ball is actually a really good way of increasing your interest rate sensitivity and therefore diversifying your portfolio and reducing your alliance on equity beta. So we think it does have it's definitely a tool. It should be a tool in the investors uh, you know, tool shed, and it kind of it can really apply to all different kinds of investors, not just what you typically think about it when you think about low ball, this is oh, this is really conservative. These are folks that are focused on income. It can also play a nice role for very aggressive investors kind of dampen the overall up beta and their portfolio and further diversify um their exposures. Christine, I think that was code language for old old guys like me. They're those uh, those those conservative scared to death portfolio as opposed to Christine's portfolio. Two different, two different risk appetites, but the same cheese take appetite. I'll say, Christine, we will work on getting you one, uh, one of these days. I don't know how how well it will travel. It might not travel as well as your cat, but I'll do my best. If you fly in business class, it has a better chance of surviving. All right, all right, if I can get this on the expense account, I'll be a legend, I think, uh, an all time legend of of the of the game. But with that said, I think that's our perfect segue to Jim. We have a tradition here we call the craziest thing we saw in markets this week. Stand clear of the craziest things we saw in markets this week, and it's it's been a bowl market for crazy things the last couple of years, I think. So I'm excited to hear what you guys all have. Christine. Let's start with you, what's the craziest thing you saw this week? Well, the craziest thing that I saw this week was the sale in non fungible token form of the original world Wide Web source code for over five million dollars. And frankly, I'm surprised it took sir Tim berners Lee this long to capitalize on this, because of course he probably didn't realize just the astounding impact of his invention right thirty two years ago, um now and when he essentially created a worldwide Web, and I don't think he's really ever kind of profited much from that creation. And so I think over five million dollars that's probably a fair price. That's probably actually cheap. This. Yeah, I'm just gonna every other single n f T I've ever heard about seemed about over price. But the entire code of the web, maybe that's fair. I mean there's some n f T artists that were sold some things for sixty million dollars, I mean original source code of the Worldwide Yeah, that seems that's a that's that's cheap right there, that's a bargain. That's a downright steel. That's in the value cohort of of n f T s right there. I think for sure, what's the n f T. We're all rotates in the value that things canna, how about you Jim, what's the craziest thing you So, so here's here's my contribution. And so again not to pick on Christine too much, but this might not resonate with her. I don't know how. I don't know how your generation buys cars. You know, maybe you guys just fight online and get it delivered. Ah, Michael and myself when we buy a new car. Uh, you enjoy the process, right, and part of the process is the haggle. You go in, you sit down and talk to the sales guy. He goes and has to go talk to his manager and he just goes and you know, exactly gets the trade of water or something, goes to the bathroom, comes back. So JD Power comes out this week and uh, the here's the number. So the number of new cars that are selling at or above their uh M s r P prior to the crisis was a third and I was surprised. I thought that was even a bit high. So thirt of the cars prior to COVID actually would sell above their m s r P or at their m s r P today of new cars, so you can't even enjoy kind of going into a to a to a show room and haggling over new car. So the crazy thing that is going up apparently is all new car prices. You're you're you're bidding them like they're there their shorehouses for forgettness sake. What's what's what's going on out there? It's crazy. That is pretty. That's unbelievable. I hadn't seen that. That's a good one though. Wow. Wow, that's why I don't know. I'm happy to walk to the train until so that all works its way through. I got a daughter who's dying for a new car, just got her license to But now I'm gonna explain. Now I have more ammunition to explain to her why that's not gonna be happening in this Uh. All right, very both of these are very good. I I you guys brought it. I've got a lot of competition this week, but I'll give you mine. Finds a story this week from Bloomberg about investors who are looking a group of investors, a couple of guys from private equity you want had a VC background. Two They're looking to raise a hundred million dollars for a new fund, uh to buy antiques and apparently the antique market and I know, I don't really know anything about this, but it's really been in the dull drums ever since the two thousand and eight financial crisis that there's apparently some pieces that are selling for what they would sell for. So I guess in the in the dot com Heyday antiques, we're in a bull market too, So they're called the Tangible Assets Group. Guy named Gary Sargeant is the He's the antique dealer who's kind of in charge of it all. But then he's got some private equity guys who got named John French and a guy named Tom tom Berg Glund And this is uh, Jim, this is where I love it. The quote from the story UH fits in well with the inflation discussion we had. Uh tom Berg one said, as we move into a period of higher inflation and greater uncertainty, these alternative assets will be a great store of valley and an inflation heade. So they're going around by it a hundred million dollars worth of antiques. That's gonna take a while, I think. Um. And and one more thing fore, Jim, this is one of my favorite parts of the story. Apparently one there's a uh an old chest of drawers that's really tall, and it's got a real fancy ornament on the top. I've never heard about before, but it's it's hot and antique markets. It's called the Philadelphia High Boy. So I don't know. I don't know why I got. I Google did, I can't find any explanation of what the Philadelphia High Boy is. It sounds like a guy you'd run into it the parking lot of Veteran Stadium. But there's a few of them. There's a whole section of those guys the yellow seats. So Christine, Uh, that's the craziest thing I got. But I I one of these rare weeks where I think I come in third place. I think you guys both beat me. I'm I'm happy to take the bronze. It was stiff competition. Uh. And I appreciate you guys bringing your a game with your crazy things, and really for for all your time this week. Fascinating conversation. Jim, great to me. You're great to talk to you. I hope we can do it again. That would be great. I appreciate it. Thanks for all the time today. And Christine, I'll be talking to you soon, I'm sure. Uh. And Christine before we leave. What's the scene in London right now? I always like to catch up on London. I've been worried about London ever since I heard the pubs were closed. I was just worried about everyone's mental mental health. The pubs are back open and everyone's happy again in London. Well, it's what we call Thursty Thursday today. And so I had just come back from the h The Bloomberg office in London is surrounded by pubs in restaurants and uh, it's basically like lockdown never happened. Everyone. The streets are full of people enjoying their pints and some of them are probably going to be stumbling home tonight. But it's all good. And also England one their match against Germany earlier this week, so there's a lot to celebrate in the city of London. We're We're also enjoying a rare sunny day. So yeah, I think there's gonna be a lot of hungover people on Friday morning. Alright, alright, soccer in case it wasn't clear, Yes, that's a soccer game. Oh yeah, I believe me. I would never imagine England winning an actual football game, although it is getting popularity over there from I don't understand theo's NFL and London games are really spreading the Oh yeah, the Jacksonville Jaguars are the unofficial London team because they are the only NFL team that has had a London game ever since its inception many years ago. Now every year they're there, I think, right, I think there's some connection right the owners, uh British football guy or something. I don't know, you google that. I'm probably getting that wrong. Jacksonville, London. I mean it's really the same, right right, right, you're all Florida, Florida men, Christine, I'm not gonna keep you anymore. I'm sure you're thirsty. Get out there and enjoy the rest of that beautiful night. And Jim, thanks again. Uh, and that's all the time we have. Thanks those pleasure. 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'd love it if you took the time to rate and review the show on Apple podcast so more listeners can find us. And you can find us on Twitter, follow me at Reaganonymous. Christina Kino is at Chris a Q News. You can also follow Bloomberg Podcasts at podcast I Think. Get to Charlie Pealder, Bloomberg Radio in the voice of the New York City subway system. What Goes Up is produced by tofor for Has. The head of Bloomberg Podcasts is Francesco Levie. Thanks for listening. To see you next time.