Our guest in this episode is Mary Childs, The author of The Bond King, a look at the life and legacy of PIMCO founder, Bill Gross, the unusual organization that he built, and the fixed income market that he came to dominate. Our conversation starts by talking about why stocks are dumb, the elements of operational alpha that made PIMCO what it is, and what Bill Gross's success means for the neurodiverse community. It starts about 13 minutes into this podcast.

Hey everyone, Sloane here with sort of a crossover

episode, for those of you who track the world of money podcasts.

Our guest in this episode is Mary Childs, who some listeners may recognize

as one of the many voices be behind NPRs excellent planet money podcast.

She's also the author of the bond king, a look at the life and legacy of

PIMCO, founder, bill gross, the unusual organization that he built and the fixed

income market that came to dominate our conversation starts by talking about

why stocks are dumb and then really zeroes in on the elements of operational

alpha that made the firm what it is.

We also touch on what bill Gross's success means for the neurodiverse

community and what she's learned about being a legendary investor

in the process of writing her book.

That conversation starts about 13 minutes into this podcast,

but don't skip our banter.

That's lame.

Uh, maybe also transphobic, I don't know.

Um, ASHP and I talked about the work that sovereign development funds

are doing to build resilience in places like Egypt and Indonesia.

Then finished out the podcast by talking about the hard things in our life, taking

questions from listeners and as always giving you an honest to God gardening tip.

If you'd like to ask a question in an upcoming episode, please write to us.

The email is free money, pod, gmail.com.

And if you would like to ask a question and if you wouldn't

like to ask a question, but you would like to do me a favor.

I imagine that there are several of you out there like that.

Um, go ahead and leave us a review on your podcast platform of choice.

It helps other people find the show and is a really nice way

to manifest some positive vibes.

Before I kick things over to everyone's favorite disclosure pirate.

I'll just mention that this episode of the free money podcast has, is brought

to you by our friends at Cordis who are experienced doulas to investment offices,

navigating digital transformation cord ETS focuses on your data so you can focus on

alpha for more info visit Cordts llc.com.

Take it away.

Shark bait.

A Hawaii free money podcast, listeners, I'm shark

beat Buckley, the disclosure pirate.

And I'm here to set you straight about what's going on with this here show Sloan

Nortel works for invest vegan, LLC, a New York registered investment advisor.

Ashby monk works for Stanford university, a APAR future proof

long game and various startups.

All opinions expressed by either Sloan or Ashby are entirely their own.

And do they reflect the opinions of their crew or any company clients?

So invest vegan may maintain positions in securities and

strategies discussed in this podcast.

Advisory services are only offered to clients or prospective clients where

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a client agreement has been executed.

Ah, Here comes

the money.

Here we go.

Money talk, here comes the money, money, money.

I'm just probably gonna be welcome to the free money podcast.

What do we do?

Um, it's where we give you the Brooklyn barrier connection

that you about institutional investing, duh, that you could really create.

Cause you know more about

these institutions and how they

invest.

Yeah.

Like, like, wait a second.

You're telling me that there are a bunch of institutions,

old investors like control the

market.

No doubt.

And they are institutionalized, not in the sense that they're locked up

in prison, but that they are doing their jobs in a routine way that we

can learn about and explain to you.

Well, yeah.

And, and, and, you know, of course the, uh, the, the Pune

details of these processes are outrageously influential, right?

Because we're talking of course, about trillion.

We are 140 of them, um, which, you know, not, not much money

to me, not much money to you.

I know Ashby, but, you know, I think like, eh, trillion

here, trillion there, I'm still

trying to figure out what my Doja coin is worth.

Is it trillions?

Is it zero?

I don't know.

Um,

I really, you know, the thing about crypto that I think is

like, you know, really magical that we lost altogether was there was a

moment like in, you know, maybe 2017 where a whole bunch of people who

sold drugs in like five years ago were suddenly rich for no reason.

Uh because they had a whole bunch of residual crypto going on and, and like,

honestly, I missed the magic of that.

I.

I am willing to admit, especially now that it's exploding, uh,

that I never really bought any crypto.

Um, I was not a big crypto investor.

And, uh, and so it feels like we're moving back to the natural order of things.

As, as crypto kind of unravels, I saw that open C this is not my news, but

I'll share with you, um, open C, which is a crypto NFT trading platform that was

like valued at many billions of dollars.

It was the, the shit, it was the future of finance.

It was everything.

It was

trading trading.

It turns out on open sea is down a little bit.

Um, this quarter 99%

99.

I mean, like that's, you know, what's a little bit of a liquidity

evaporation among friends.

They're buying it for the art though.

You know, they're not gonna, they're not they're long term investors.

Yeah.

You know, cuz we all need a gorilla slash monkey

version of ourselves out there.

And that's where you go get that

speaking, speaking of gorilla versions of ourselves,

like this is another, I mean, you know, we didn't plan to go

into fun of crypto, but why not?

It's

here.

It's available of us.

I don't even know how we got it.

Oh, I made a joke about trillions of dollars of Doja coin anyway.

Uh, tell me,

oh yeah.

Yeah.

Well, but so like, so M and M and another performer whose name escaped me performed

as their 48, like avatars at the VMA.

And like the reaction from everyone was like, wow, this is the LA thing.

I did not see a single positive tweet about that.

And I saw lots of tweets.

It's like, it's like the mark Zuckerberg thing where he is like

this, you know, like neutered, like, you know, corporate stooge in the meta,

in the, in the metaverse it's like, do you really think this is like a cool

thing?

I know he needs to put more sunblock on and, uh, get back out there, get back out

there on that surfboard with the flag.

I mean, you know, like, uh, just a quick tip for mark Zuckerberg

for my pals in the trans community.

I mean, if you're gonna create an online avatar, you might as well be in animate.

Sure.

I mean, it's just like everyone does it.

It makes

perfect.

It seems like it would anyway.

so I do have some news, um, and I have three bits of news that I don't

know if I'm gonna be able to fit in before certain gift arrives for

our big famous crossover episode.

all the money podcast is coming together.

Woo.

Build net suspense.

Uh, I'll fold these into two news stories.

The first one let's talk about the sovereign development funds.

Sovereign development funds, a category of sovereign wealth fund as defined

by the international monetary fund.

This is around two.

2008.

Uh, the development fund has a dual objective mm-hmm , which is why I spend so

much time SI studying these organizations.

They wanna drive development and return.

And the way they drive development is by driving return because in driving

return, um, they attract capital into their geographies and these funds

are popping up all over the world.

Mm.

They there's one in Russia.

There's one in India.

That's been very successful.

There's one now in Indonesia.

And that's one of my little news items.

Indonesia has just announced that they're striking a deal,

um, to expand the bean port.

In Sumatra island, uh, which sounds like a nice port and a nice place.

I think I've actually been to Sumatra.

Um, Pang.

I have been to Pang, which is a place on the island of Summa.

I believe if I know my geography, but they are doing a 7.5 billion deal.

The Indonesian investment authority with Dubai ports.

And that's a big deal.

That's bigger than the fund size itself.

I believe equally interesting.

Egypt has recently set up one of these funds and there was news out

this week that they have already.

And I think this organization in Egypt has only been going for about eight months.

They've announced they've already attracted 3.3 billion from other sovereign

wealth funds into Egypt this year.

Since they've launched, coming from Saudis, coming from co and the UAE.

And so I just, it's just fascinating to me.

I feel like this is a brand new policy tool that all the countries

are now using to catalyze domestic markets and attract capital.

Well, yeah.

And like, you know, the, the things that, that come to mind for me with

when I think of those two countries is like, gosh, are those places

indeed as some foreign direction now?

Sure.

Um, you know, like Egypt, huge food, importer, you know, Indonesia, huge energy

importer, uh, like both of those places, like, you know, really having a balance

of payments issue right now and like, wow, how cool that you can sort of shore up.

The case for, for investing domestically attracts some institutional investors

and, you know, kind of plug that gap.

It's an, you know, that's a Nito and, and I, I think like when you said 7

billion in Indonesia, I'm, I'm I have a little bit of a one track line.

So I was like, okay, I'm, I'm, I'm thinking of the thing, what thing?

You know, the thing, the thing, the, the, the, the, uh, you know, that time that,

oh, it's was that, that was Malaysia, not

Indonesia.

what, just tell me

what I, I, I think, you know, that one MDB, like,

oh, that was Malaysia scandal.

It's nearby neighbors.

That was Malaysia, which is not Indonesia in, you know, don't,

don't, don't get it twisted

out there, folks.

Yeah.

So the, the one MDB, which is a nearby sovereign development

fund to the Indonesian one, um, there's a Netflix special about

it, and you never want to be.

In a Netflix special.

I think I've come to decide.

Yeah.

Yeah.

Like the free money, Netflix specials gonna be the story of

how we really effed up something.

Yeah.

Or how, like, you know, due to weird incentives in the media business,

like, you know, are what are our stupid podcast became much more

profitable than the investing.

And we just got like a, a CGL budget that

yeah, exactly.

um, oh my last news.

Okay.

This is fast CalPERS.

One of our favorite big American pension plans, we know that had many people

related to the CalPERS on the show.

CalPERS is out there telling managers to get diverse.

They're pushing the managers, they're collecting data, they see value.

And for those of you don't know, CalPERS.

Um, and this story taught me, this fact is being led by three women right now.

Now you knew about the two you knew about the two, huh?

Um, we've got Nicole muco is the chief investment officer.

We've got Marcy frost, former guest on the show alumnus.

She broke a lot of news alumnus of on here by the actually ended up in Reuters.

Yep.

Um, board president is a woman named Theresa Taylor.

And so the three leaders of this organization came together

on a panel recently, which was where the news came from.

And Nicole was really pushing, um, to say, look, if we can do it, you can do it.

And, uh, mm-hmm, , we'll see, they're gonna, they've launched a whole

bunch of data collection efforts around this, and then, you know,

maybe you'll manage what you measure.

That's my last news, which I think is

newsworthy.

I mean, like, I think that's quite newsworthy.

I mean, the, you know, it, it's funny.

I, I, I think like, As like an emerging manager, you know, like the answer to

addressing diversity and the investment business is often another form.

Um, so I'm always like, oh no.

Oh, another initiative.

Ugh.

You just,

how about just having a role model?

You know, that's why I do a lot of these consulting projects around the world.

It's like, rather than telling people what to do, show them what, what to

do, and then they can be a role model conference is a role model, three

women leading that organization.

Yeah, my gosh, go back seven years to the conferences.

You know, the conference circuit, as it were is all

dudes.

Yeah, that's true.

That's true.

And yeah, I mean, speaking of another, oh, hello.

Guess who we got in the show?

It's the one and only buried child.

Oh.

And she's got glitch, a giant cut out of the bond king here.

Hi, we were admiring your cardboard.

Cut out of your book.

Thank you for knowing that it's a cardboard cutout because a lot of

people are like, oh my God, your book.

And I'm like, do you

think it's that big?

Yeah, I was gonna say, I've got a very big version of my book here.

Yeah, exactly.

I just want you to, to admire the largeness of my, of my book.

Um, alright.

I've noticed, or this is a no video podcast.

It's no

video.

It's no, no one will ever see this video.

I'm just, cause I, I keep being in podcasts where I'm like looking

off to the side and I didn't know that makes you look very unhinged now I know.

And a little cross side, like I'm just like, okay, that's an important

you're supposed to be back here.

Just have your ring

light.

I don't

have it.

Yeah.

I

know mm-hmm, learned a lot.

We wanted to create a safe space for unhinged people.

Um,

you do not look unhinged or cross-eyed right now.

So that's the good news for the listeners.

That means so much to me thinking, yes, all of the

listeners will know that I look

not that unhinged today.

Well, and you also wrote a great book and I gotta say like, I, the, I, you know, I,

so I'm reading the bond king, you know, I don't have the giant cardboard cut out.

I have, you know, the Kindle version.

Um, not yet.

That's a good point.

Um, but I get to this sentence where you're, where, you know, it's like

people think stocks are more fun, but my, in my opinion, they are wrong.

stocks are dumb.

Um, so that seems a little mean.

I'm so sorry.

It's I have gotten some feedback from some stock investors on that one.

Interesting on that, on that point, um, here, lemme get closer

to

my, but like, but like why, but you have a

point though.

I do.

Thank you.

I completely agree with you and myself.

Um, yeah, I think, you know, it would be surprising if the structure

that is our financial institution allowed us to actually play, right.

Like that would run counter to some of the things that I think we know about our.

Beloved institutions.

And I think that, um, this is one of those cases where like we're

allowed in the stock market.

We're allowed to have like our teeny wean slippers of like equity

leadership . And like, we think that we're in the game, we're not in the game.

Like we're the kids' table.

This is ridiculous.

They're letting us play around and like watch CNBC for like Carly Conda

say something, which like, that's fun.

Like that's just entertainment, more akin to like, gladiator.

Exactly.

Like that's what that is.

And then meanwhile, there's like an actual room with powerful people.

Not always smoking cigars, but it's happened.

Mm-hmm , you know, like I do think that like the, okay.

Mo I think Pico did have a cigar tradition for a while and they closed a new

account, but, um, Belgrove hated smoke.

Oh.

So they, they did away with that.

Um, but it is, you know, the bond market is bigger.

it's more influential.

It's where, you know, you can go in and take someone's assets cuz

they said so in the documents.

Yeah.

It's you hand over the keys?

Like it's just a, it's a, you know, I don't know, call James

Carville for more details.

I feel like also.

Bond market feels like wild west, you know, like there's still,

there's still not quite as digitized.

Uh, I know this isn't the next question you were expecting,

but it is wild out there.

how, how UN technologized the bond market actually is compared to the stock market.

Yeah.

And, and that's why people can kind of swoop in and take your stuff.

Cuz they're sneaking terms in there.

I mean that's on

purpose, right?

Like they're they have long been resisting that change.

Like this is, I mean, what was it when I started covering corporate credit,

you know, I didn't cover loans as much, um, or really ever for, for a long time.

And I don't know, that've like focused on loans ever, but my loan colleagues, you

know, that, that at Bloomberg, we were very fine T tranched just to what asset

class and what type of thing we covered.

And my loan colleagues, they were like, oh yeah, no, this we need fax machines.

Like it's T plus 30.

Like it's literally like, and you're, I mean, that was like 2012.

I've go away with the fax machines.

It's like 10 minutes ago.

Right?

It's like

bond traders are like, they literally have two phones to

their face with cords attached to them.

Yeah.

Still, and they

love it.

I know that way.

It's a relationship.

So badass that way the bid a ask stays nice and wide.

Like yeah, you get a lot more, it's more fun.

It's more lucrative.

It's more, you know, you have a lot more job security.

And I think there are, those are a lot of reasons why they've managed

to keep it protected in that way.

It's a good point.

Um, that like that lack of technology is what drives the, the

like opportunity to outperform.

But also in your book, we, we kind of picked up some of these themes around

PIMCO, really getting efficient in the way they managed that inefficiency.

Um, we spend a lot of time here talking about operational alpha.

Can you talk about the operational excellence, um, in those places?

And I think you so right.

Yeah, operational alpha is so real.

And I'm so glad that that's like a drum that you beat because it's, I think

it's underappreciated and this does, um, present a really clear shot for

me where I can just get on my little soapbox about pat Fisher, who was one

of the, I would say, founders of PIMCO, um, who never even got made partner.

No.

Interesting.

So weird.

So random how that happened, but, um, she basically helped to keep operations,

just, she was like in charge of the back office and HR and occasionally

the cash desk and many other things over her, her time at PIMCO and.

The, the importance of clean operations.

You know, obviously if you're you're bad at settling trades, your trading

partners, your counterparties are gonna be less excited to trade with you.

They're like that.

Person's a joker.

I'm just not gonna like go to them first.

Cuz I don't know if I can believe with certainty that that trade will actually

close and no one likes a failed trade.

So I mean, that's just like super baseline.

But then furthermore, she instituted a process where she basically

started giving the banks grades, huh?

As to whether they got back to her in time, whether they were clean on

their execution, whether they, you know, and, and just kind of keeping,

holding their feet to the fire.

And once the banks got wind of this, they were like, Oh, I wanna be, I wanna be

on the top of that spreadsheet and just became much more competitive and therefore

PIMCO's execution improved dramatically.

So, you know, that's one example.

She also, when they moved to a new building, she had, uh, pneumatic tubes

installed to reduce, uh, errors between the trade floor and the back office.

Huh.

Cause people would like come running up and be like, you know, like a,

like a ticket would get lost in a drawer, you know, just so tangible.

So literal like that.

And, and that obviously causes great snarls and then

the trader would be all mad.

And then the back office would be CR like it was just very dramatic.

And in order to reduce potential error in that way, and like, just keep

things moving along, she put pneumatic tubes, you know, you used to like run.

I was

gonna say, we might.

And like, we might need to explain to the youth what is

just.

Air technology.

What?

I can only describe as a vacuum.

Yeah,

no

YouTubes.

Is it, is it some, some element of space?

Um, no, you put you like, you used to put it in like a little VHS cover,

which again, like a plastic box.

The babes don't know

what that is.

Little yeah.

VH.

No, thank you for clarifying with VHS.

Yeah,

exactly.

Um, so little, little box, you put your little ticket in a actually I

think they would roll it up and, um, put that little tube in the larger

pneumatic tube and it would go zup.

Yeah.

And then the land on the other end of the office at, at pat Fisher's, you

know, in her domain and then they would get to, you know, enter the information

correctly would not end up crumpled in a drawer next to like an old banana.

So it would work out a lot better.

And I made up the banana part.

No one ever said that.

Yeah, just for clarity, but that is, you know, there were, there were

a bunch of different examples about this, where pat Fisher just like

cleaned things up and made things work.

And like, you know, there's this one trade in 1983 that would've been

truly impossible without that kind of operational efficiency and cleanliness.

The ability to be precise and be careful and be accurate.

I think enabled PIMCO to be early, to mortgages, to be early to financial

futures, to, to capitalize on those markets before everybody else got there,

which just means years and years of extra

alpha.

Yeah.

Which, I mean like our listeners at home are like, oh, okay.

Wow.

That sounds like pretty good.

Yeah.

Yeah.

Yeah.

You want, you want alpha, I guess

they do.

And they wanna use, if you're into that sort of the hyper loop

for mail, that's the way I would describe the pneumatic tube for the

use, the hyper loop for your mail.

Um, and just as like completely insane, you know, like, why the heck do you

need these tubes flying around anyway?

Uh, yeah.

Were you gonna say something Mary.

No, I'm just thinking like it's hard today to envision because things

are so much less tangible than they were back then, you know, like everything

is a digital pneumatic tube now.

So it's a little bit like it's harder to conceptualize, but what I like too

about this example is that it is so easy.

You're just like, oh, I see.

Like it went zup and then it went, th get it, that's easier than

the other way where everyone was crying and there were bananas.

And I think that like, it's.

It's less obvious, but there are obvious, there are still going to be

ways, you know, to find these kinds of increased efficiencies and, and just

make things cleaner across the board.

Yeah, it's interesting.

It, it kind of speaks to the, the investment banks and the

big fixed income managers.

Like there was always this investment in technology.

And so it doesn't surprise me that they went to the pneumatic tube to

get a little bit faster and a little bit more, um, you know, well defined.

Like if you go back to the history of technology and finance,

you'll find carrier pigeons and other things like that quite.

Um,

but it's weird.

How hard?

Sorry to know.

No problem.

It's weird how hard it is to move away from them.

Yeah.

Like you look at the Citibank mistake in payment in 2020, where

they accidentally sent $900 million to the exact wrong or right.

People.

And like.

That was preventable.

Had they arguably had they upgraded that technology and invested in a different

te because that was just so antiquated and people say that about Goldman and

they say that about, so there are, you know, we think of them as these

kind of cutting edge informational technology superstars, but there are

ways in which it's just like, not always necessarily immediately cost effective

to address that stuff long term.

It's true.

There's a big

tension.

Yeah.

As long as they stop turning in trading pro profits, right.

I'm sure that the perception of them is technological superstars will disappear.

Absolutely.

And it's like idea that like the technology worked and so

we're never gonna change it until it stops working while like we're

constantly trying to use crises in this industry to like drive change.

But the point here is to say they, there seems to be a willingness to

spend on technology, but there's very little willingness to improve culture.

And one of the things that was, I was in that was my attempt at a transitional.

That was a really good paper.

Uh, yeah.

Thanks.

Um, but, but you will note having read some books such as

your book, but also liars poker.

If you've read liars poker yes.

Of a kind, if you will, you will see some certain culture on a bond trading

floor that will seem outrageous mm-hmm and it comes through at PIMCO as well.

And so is there something about dominating the fixed income markets

that just makes people jerks?

I mean, it's a very good question.

It's one I've thought a lot about, and I think, yes, I think

there's something, well, first of all, it's no accident, right?

Like the culture at Solomon was one that bill gross, respected

bill gross loved the Solomon.

Energy and wanted that explicitly wanted that.

Like, it was one of the few cell side institutions that I think bill respected.

Mm.

And you'll see a lot of kind of carryover, you know, the, the CEO for a long time,

bill Thompson came from Solomon brothers.

There was just a lot of, kind of intentional adaptation of that.

And like bringing on of that, you know, that swagger and, and I think,

I think it does help in fixed income because somewhat contrary to popular

belief scale helps in fixed income.

There is sort of a, a bullying and aggression to the actual trading that

I think does result in, you know, more basis points and that actual

bullying.

Right.

Adding value.

Yeah.

Yeah, exactly.

That, that this, you know, there's this kind of longstanding debate as to whether

or not PIMCO being hard on the street and mean to their wall street counterparties,

if that was productive, people who have experienced it very often tell me that

it's not, you know, they're like, I hated it and I'm not gonna give them first look.

Cause they were so mean to me last time.

And like, it was just miserable.

I think, you know, PIMCO kind of behaved this way, the whole time

throughout their, um, their, their ascent sort of before it was.

Justifiable from an AUM perspective.

And I think it was to their benefit.

First of all, you established that reputation.

Like, we're just, this is we're PIMCO.

You need our information flow and that was that's effective.

And that, that consistency I think is useful.

Um, and then just being able to get, like, being that scale and having that like

brand as being aggressive and as being, um, and having like asserted that you

need my information flow, therefore you must trade with me even if it's not, you

know, profitable to you, that became true.

And that helped them to get, you know, anger deals on new issue

bonds, which is indeed still one of the places you can make more money.

And I think that that's really critical that like the, the swagger

and the bullying and the abuse, like yeah, in the short run, it is bad for

individual traders relationships with their wall street sales coverage.

Yeah.

But I think in the longer run, it does help PIMCO much, very

regrettably, you know, I don't, I don't really like that conclusion, but.

So there, there's sort of like a, um, you know, first day in prison

style lesson for upstart asset managers.

Right.

You know, where it's like, all right.

You know, just take out the, find the biggest primary dealer.

You can God just

get those basis points and then tell everybody you did it.

Yeah.

Yeah, exactly.

Make sure it's in the cafeteria

or yeah.

Get it pneumatic tubed.

Mm-hmm to everyone in your, in your various divisions.

I mean, that's so sad, but, and hopefully it's changing, you

know, I do think that in the pandemic, the, you know, so much more went,

electronic went digital and I think that that's like probably helpful.

Mm.

I dunno.

I hate that.

This is where I've arrived.

I do hate it.

I just wanna be clear

I

think it's so funny.

well, I mean, I, I think it's, you can't know

a, a lot about a thing and, and be a blind optimist about it.

I would love, um, you know, I you'd love to unknow.

I, you.

One thing that like an angle that I haven't seen that many people dig

into on your book is like, you know, you've written this, you know, I, I

actually can't think of another, I mean, outside of like Warren buffet

related, you know, biographies, um, I can't think of another like neurodiverse

business leader, um, that has the same kind of, uh, profile as bill gross.

Yeah.

Um, you know, and like, I, you know, I, I, I guess, like, I'm curious,

you know, you've spent all this time with this guy you've spent

all this time with his legacy.

Yeah.

Um, right.

And you know, like, so what, what do folks like, you know, in the

neurodiverse community take from, from his story, if anything?

Yeah.

It's interesting.

The, the.

There's an enormous cohort of people that just respect the bejesus out of

this guy and would follow him anywhere, read his investment, Alex, when they

come out, you know, I think his, um, his website, people just like write into

him all the time, like using that like contact form, um, just to tell him how

much they respect him and that like, he, you know, created this big thing,

he's this great trader or whatever.

So I think that's, that's alive and well, and that's both like extremely

retail investors, like a me, you know, I don't know what I'm doing, but I know

this guy explains things really loosely.

And I appreciate that about him.

And then it's also just like mutual fund managers, RIAs, like all like

people in the industry professionally, too, who, who have learned from

him and followed him for so long.

And he has this like very strong reputation in that way.

I think there's also a, um, a cohort of people who think that he was the

beneficiary of a bull market and he's like, you know, not that impressive.

And those people I'm like.

Hmm.

I mean, in both cases, you've gotta take it with a little salt.

I think he's neither a God, nor just lucky.

But, um, but his legacy is, you know, he did create largely this

market and then he publicized it.

Hmm.

And he's not in, in my view, he's really just not just lucky.

Yes.

He was lucky.

We were all lucky.

Um, there were a lot of other people who could have ridden that same wave

and, and some did, but I do think like he combined it with this kind

of larger than life personality.

He wanted to be famous.

He went on wall street week, all the time.

This PBS show every Friday night, that was like the benchmark show.

If you cared about wall street, you watched this show and being the face

of the bond market was very helpful for him and very, you know, I think helpful

in establishing PIMCO as a company.

And as that, you know, a four mentioned aggressive brand, but I,

and I think that's, that's all real to me now in his later years, I do

think his legacy has changed somewhat.

Um, Regretably, you know, I think the more public stats he's gotten in have

been, um, unhelpful, but they do kind of demonstrate fundamentally similar

personality traits that were effective in the bond market and are less

effective in bilateral social dealings.

um, yeah, like, so hypothetical, like, you know, blasting

loud music at all hours, uh, to ring some concessions out of your

neighbor, you know, all of that.

Exactly.

Squeeze, squeezing a basis point wherever you can get it.

I want exactly

like one thing that, that rewarded him for so

long and has to be hardwired at this point is he was constrain.

His universe was constrained intentionally.

It was, he competed against the benchmark, right.

And this universe appears who were also competing against the benchmark.

But if you make your benchmark, your neighbor.

Like, you're never gonna win.

There's no, like everyone, it just doesn't have the same outcome.

It doesn't ha you can't win in the same way.

And I think that that is, you know, if you've fashioned your life around

constantly having a competitor, having a benchmark that it's hard

to, it's hard to leave that mm-hmm

. Sloane Ortel: Yeah.

I mean, like, and speaking of leaving that, I mean, like, I, I think your

depictions of the PIMCO workspace were, um, kind of like, you know, I guess

I serve, they served, you know, to me as like affirmation of, you know,

not taking a road mm-hmm , you know, the taken made to a trading for, at

hunting beach, you know, California.

Right.

Um, but the, you know, more than that, like, you know, the picture

of the firm's culture that came out was very, I don't know is weird.

Does weird cover it.

uh, weird's one word I've heard that word used.

Yes.

By sources and otherwise I like intense.

I feel like that captures a lot.

um, mm-hmm yeah, petty.

I don't know the, I talked to so many people about this and, and one of the main

things, I mean, obviously I ever talked to bajillion people for this book, but

one of the things that came through was that it's just such a closed circuit.

Hmm.

Someone likened it to prison.

So your earlier analogy is not dissimilar where it's like, you know,

you can't, it's in Newport beach.

There's not that much else to do.

PIMCO's kind of the only game in town, in Newport beach.

So you're there, you're stuck and you're in this, like, you work so

many hours that you go home, you go to sleep, you wake up, you come

back, like that's your whole life.

You might have a family.

Congratulations.

But like, that's not like you're substantially the, the like interpersonal

dynamics that you're gonna care about.

The things that you're, that are occupying your mind are

gonna be your things at work.

And you can't escape.

There's no way to like go to get drinks with your friend at city group.

And they're like, well, you know, I heard that Breen Howard is

hiring and you're like, oh my God.

Like that just doesn't happen to the same extent in Newport beach.

And I think that that closed circuit makes the stakes so much higher

in all of these interactions and makes everyone act so much worse.

Like if you have.

If you're playing with more cards, if you have more diverse options, if you're

able to kind of move fluidly between firms or, you know, at least even

in different social interactions and social dynamics, you get kind of a brain

cleanse, you know, you get to reset.

And I don't think that is available in Newport

beach.

That's I mean, like, honestly, I wasn't even thinking about this, but probably

a great, a great, uh, you know, and pregnant takeaway for our listeners who

are at, you know, institutions that are, you know, located a little bit out in the

stick, you know, um, you know, but I was just shout to Alaska permanent, what up

and not to suggest increasing your carbon footprint, but in that, in

that vein, like, yeah, travel is good.

Like going to see your colleagues and like former coworkers who are now

at, you know, place that is not Juno.

Yeah.

Is helpful.

Is mentally helpful and keeps you kind of healthy and fresh at your place of

work and like sane keeps you able to like, see, see the stakes more clearly.

I think.

The, the one thing I wanna kind of leave, you know, end the

conversation with is kind of like a, you know, like, I guess one of my signature,

two deep questions, more trademark Tim.

Um, you know, but I'm, I'm curious, like the, you know, you've

studied this legendary, um, right.

You've gotten to the point where you have unpublished footnotes about

him and, you know, all kinds of, you know, ions and vibes and whatnot.

um, and a sense of how occupying that office affected his life.

Mm-hmm um, you know, like what have you learned about just that space that

he occupied, um, you know, through the course of, of, of writing this book, do

you think it's a healthy thing to exist?

No,

I mean, this is gonna sound a little trite,

but I think it's really lonely.

Mm.

I think it's, you know, he does have friends, which people.

don't think that he does, which is also itself quite sad.

Um, I met some of his friends and, and they are real.

And I think that, so I can confirm it , but it's lonely.

Like you become so powerful.

And so, you know, rich and so influential and so important and a

legend and da, da, and that's maybe what you wanted, maybe that's what you

fashioned your entire career after.

But once you get there or even on the path to getting there, you know, your

co like in this, in his case, I'll stop using the second person cuz okay.

We're only so many of us are bill gross in, in his case.

Like his co-founders fell away, you know, they retired, they moved on his

peers, fell away to a large extent summer still, still around and still active.

But.

, it was harder and harder for him to trust people in part, because they were new to

him in part, because he is like, I don't, I just don't know you for that long.

Like he, I think it's trust is kind of a hard thing for him and maybe all

humans and after a while, everyone, like there, there, there comes this distance

between him and the rest of the world.

And, and I mean that within just the firm where he couldn't, you know,

everyone's like trying to get something from him, everyone's trying to make

eye contact and like, do like, you know, score a point in a, in a meeting.

It's just, I think the, the intensity of that he thinks of himself as shy and

introverted and insecure, and it should be noted also autistic, you know, he's gotten

a diagnosis and I think before, you know, all of this went down basically 2014 and

I think we had a far lesser appreciation for narrow divergence and what that

means, especially in the workplace.

And I, I don't know if that would play out differently today.

Um, but I think the, the chasm between him and the rest of the firm, Like,

they didn't see him as insecure.

They didn't see him as just shy and introverted.

They were like, this guy's a jerk.

Like he's not, you know, he's coming to work with all these

like barbs and he is being mean to me in a meeting and like why?

And so I think the difference in, in, you know, occupying that seat

for as long as he did and being that legend, I think is super isolating

and there's almost no way around it.

Like, what are you gonna call bill gates?

And like, try to bro down.

Like, I don't, I don't know.

I don't know what the answer is.

You know, you keep your high school friends or whatever, but yeah,

it's just a lonely existence.

It's hearing you talk about it.

Remind like there's, you can start to think about like what it is to be Ray

Dalio, a Bridgewater or, or pick, pick one of these like legendary managers

that almost invented an industry by the way, like ridiculous culture and like,

you know, always some like real weird stuff going on there in Connecticut.

Right.

Mm-hmm like, sounds very similar to, to PIMCO in that sense, but, um, Just

fascinating to hear you describe it and like lucky that you got to go in

and kind of diagnose it, you know, the culture and the organization.

Yeah.

I do feel lucky that I got such access and, and that people

were so willing to talk to me.

You know, of course, including bill, I will say, like, I was just reading his

most recent investment outlook, which, you know, he's still publishing them

and, and this one was talking about, um, It's better to have been a billionaire.

It is better to move through the second half of life as a billionaire, rather

than the alternative, more stressful, but many more chances to buy temporary

happiness as with a private planner, a nonchalant attitude toward medical bills.

Okay.

So I don't know that I would, I think more stressful is not what he meant.

generously.

Yeah.

Like I don't, I understand that there is stress that comes with being a

billionaire and indeed I would argue, that's a great reason to give away your

money and not be a billionaire anymore.

Congratulations.

Like we have a solution it's available to you, but at the same time, I, yeah.

A cure.

Exactly.

Like, let me know if you need help thinking this through.

I'm happy to think it through you.

Yeah.

But I think, um, yeah, the stress is, is different in kind and that matters a lot.

just have to say it.

That's

awesome.

Wow.

That's I mean, well, look, I, I, honestly, I can't recommend the book enough.

I was laughing out loud.

I, we were gonna do this as our beach reads episode and then

literally all of us got COVID.

Yeah.

every single one of us.

Good time.

Here

we are though.

We made it,

we made it through.

Did anyone lose taste and smell?

No.

Um, yeah, I mean like only the usual amount of tastelessness for me.

Yeah.

Um, I was like out for 10 days.

Me too.

Yeah.

I was pretty dysfunctional, but, um, but here we are and I'm

proud of us for getting through it.

Absolutely.

Yeah.

We made a podcast and everything who says that we're just a bunch

of useless, thankful on service.

Come on.

Uh, Mary Childs.

Thank you so much for joining us on the free money podcast.

Thank you.

This was really fun.

Was the bond king.

Uh, it was a blast.

Awesome boat.

Thanks.

I appreciate it.

Bye bye.

Bye.

Outstanding.

Yeah.

I mean, like, I, I can't recommend that book enough.

It like, you know, I it's just, you know, the, when you get to actually get inside a

story of the industry modernizing over 40 years, you know, that's so rare, you know,

and the, but also the cultural and the leadership

elements of these organizations are just astounding and repetitive.

They're astoundingly repetitive.

Yeah.

You know?

Um, and for me, it's like, gosh, do we have to deal with, uh, like

I see a lot of these types, both, both in like venture capital world,

but also on an entrepreneurship world, like something about these

superstars, that redefine industries, they see the world differently.

And whether that is, you know, comes with a, a label or it.

Is just something about their creativity, you know, I've, I've always

had that thought rattling in my head.

Like some of these people who are legends, like yeah.

They see the world differently in part, because that's how their brain is

wired.

Yeah.

I mean, like, I, I think that if you look at, you know, like the standard, like the

story that you're supposed to tell, if you are trying to go in and get a job as like,

you know, an equity analyst or something like that, um, you know, would be like, oh

yeah, I used to memorize baseball cards.

Um, you know, I'm really like fascinated with like price

and like haggling or whatever.

Like I, but like, you know, fixations and, uh, memorization and, you

know, deep, special interests that are hard to explain to people.

Are, you know, really kind of common denominators of a lot of

special inve or a lot of like distinctive investing strategies.

Um, you know, and like, I, I kind of feel like you have to be at least a

little bit weird to amass any kind of successful credit record in this

business.

That's like, you should be a weirdo, but I don't think we, I don't think we in

this industry, and I know, especially on the LP side, when, when they're doing

due diligence on new managers, it's, it's like, they're actually trying to

weird out, sorry, weed out weirdos.

it's like, yeah.

It's like the governance is like, I, no, no, I gotta avoid these weirdos.

We gotta make sure they take all these, but.

Actually it's these people who see the world differently.

Uh, and so I don't know, I don't know where I'm going with it.

I just find it really fascinating.

Read the

book.

I, yeah.

Read the book and, and, but yeah, it's, I mean, yet another case in point and reason

for us to think about, you know, kind of, are there ways that we're being blind

to people who think differently than us?

Um, you know, and like, particularly with neurodiversity, I think it's like

important to consider that we may not have operative mental models for the

way that people experience sensations.

Like, you know, loud sound.

Yeah.

You know, like there, like, like people in who share open plan offices

may literally have a colleague who experience a loud sound as physical pain.

Um, you know, and like, I, I just think we're really in the early stages of

just building empathy a around that.

Um, but beyond that, like, you know, realizing, you know, You know, little

kids who have cognitive differences can grow up to be captains of industry.

Yeah.

And if you go work at Bridgewater for a decade, you may end up with your

own label of neuro neurodiversity.

I I've heard it used that way.

Like, oh, they were at Bridgewater for a long time and, and that's why they're

so , that's why they're so direct.

And it's like, wow.

oh, it's yeah.

It's I mean like, cause the culture, just for people to

know, I I've that too is radical candor.

That's like, and they record every single meeting.

Yeah.

Yeah.

And so, yep.

And you've got like instant ratings of each other on an iPad app.

Like it's very intense over there.

It's literally a, a black mirror episode.

I mean, like, it, it, it just, you know, it wouldn't rate as a black mirror episode

because it's like too normal, but yeah.

Like, you know, the, you have, I mean, I, I love, um, Bloomberg columnist,

Matt Levine has this, like, you know, mental model of Bridgewater.

They trots out of a fair bit where he is like, um, you know, oh, okay, well,

you know, at Bridgewater, the computers.

You know, set everything up so that the humans don't get in their way and

engineer, all of these, like, you know, contentious meetings that's and

stuff like that's, that's hilarious.

You know, just so that the algorithm has its has its way.

That's right.

Very, very powerful stuff.

Anyway, what's been hard for you lately.

My first.

Oh,

well, first of all, like sometimes I find

the, the drive time shows.

I gotta like slap my face a couple times cuz it's a little bit

early.

Oh yeah.

Whew.

Yeah.

You're you're really, you you're bearing the brunt of the drive time shows,

you know, cuz because out there on the California, uh, I mean this is like, you

know, a very breezy lunchtime hour for

out here.

Yeah.

It's all good.

I mean I'm loving it because you know, we, we come in we're fresh.

We got some good ideas, not burned out by the day mm-hmm but also, um, yep.

It's a little bit harder to just get myself like wrapped

around the free money vibe.

Uh, but that's not, what's hard.

I think what's hard is um, Actually what she, what Mary brought up

in there is about like how you maintain friendly relationships when

you're building all these things.

And I think I just had this like reflection coming out of vacation.

I had where we invited two, two friends and families to vacation.

And it was like this realization that like, I don't see

non-work people very much.

And it's awesome when I get the chance to hang out with non-work people,

you know, I think I suck at like maintaining friendships with people.

I don't have like actual work projects.

Um, I need to like learn to just dial phone numbers more or something I

blame myself, but I don't know

friends it's I, I, I think, I think that there's

a life cycle to friendships.

Um, you know, like, I, I, I've always been one of those people who's like hyper ADHD.

And so like, I, I kind of like, you know, have been.

I have developed some experience I should say at, at, you know,

giving myself a break for not texting people and stuff like that.

Um, you know, but like the, you know, it, it, there's like now in my old age

at, you know, 34, uh, there are a number of people I've lost touch with that.

I wish I didn't, you know, um, I assume, I assume that's only gonna get worse.

I think, um, you know, it start,

I mean, I'm 45 so cheaper.

It's 26.

Yeah.

But it is, it's like, I think I'm, it's just a little bit of a tragedy

that like, in order for me to be your friend, we gotta work together.

That's how it feels.

And maybe it's just that, like, I'm in a phase of life too right now where

I'm, I'm building a whole bunch of different stuff and I have kids and I'm

trying to take care of my own health.

And, and, and, and that means that like, when somebody

says, Hey, let's grab dinner.

Get, and I feel terrible, but I have a lot of friends that are like, Hey,

let's grab dinner in the city sometime.

Or let, let's go, you know, get a drink.

And it's in the back of my mind.

I'm just like, yeah, that's not gonna happen.

That's just not.

Yeah, yeah, yeah.

Yeah.

It's like, I don't even, I don't even go on dates with my wife practically because

the, the shit is too hard to organize.

It's like, I'm gonna organize this stuff and go out for dinner with people

that aren't my family or isn't a work.

Yeah.

It just feels like so hard to fathom and I just need to get better at it.

I, I mean, like, I think you also need to give yourself

some space, you know, um, to like, you know, cuz I like, I think that

like, you know though, it's like.

It's, you know, there's this like great thing that I, I remember from like a

group therapy session a million years ago called are, are you shoulding on yourself?

um,

I should where that's what you're

saying.

Yeah, the word should.

Yeah, exactly.

Yeah.

Like, like when you're, when you're saying like, I should X, I should, Y like you're

shoulding all over yourself should happen.

Um, you know what I mean?

Yeah, exactly.

um, you know, and like, I, I, I think like, you know, I used to have

this thing where I would like sleep in and then feel like the biggest

piece of crap in the entire world.

Um, you know, and like, and I would be like, well, I could have done so

many things in that day, you know?

Um, but here I am, I slept until 2:00 PM.

I'm such a piece of trash.

And like, one of my therapists was like, Sloan, you should really reframe the

way you're talking to yourself about.

um, instead of saying I'm such a piece of hot, garbage try saying I needed that.

Mm.

Um, you know, like when you wake up at two, 2:00 PM.

Wow.

I needed that.

You know?

I mean, like, yeah,

no, like literally say those words cause like

how you tell yourself matters.

Yeah.

It's, it's crazy.

It's stupid.

It's like we are these hairless apes, but these like, you know, saying stuff

like that allowed and, and like watching ourself talk is like such a, I mean,

I say this, you know, cuz I've been fighting my demons for a long time.

basically, that's why we do the podcast.

Right.

We're we'd like, yeah, just like cathartic.

Um, yeah, yeah.

Yeah.

And you, what's hard for you.

I admit all of the stuff we just talked about.

yeah.

I mean, aside from everything, um, I don't know, you know, I'll go

with, uh, Um, you know, sleep's been a little tough recently.

Um, you know, I, uh, I'm, I'm, I'm in a, like a very exciting phase.

I've got a lot of stuff to do.

Um, mm-hmm , you know, but the downside is that, that means I'm

working about 75 hours a week, which is a lot, uh, you know, and, uh,

you know, is it that when you lay

down in bed, you can't sleep or is that you're not sleeping?

Cuz you're working so much.

It's that when I like, I, I, you know, I can stop working,

but when I go to bed I can't sleep.

Right.

Yep.

Um, you know, and it's like, and, and the thing is like, the thing that

sucks is that a lot of my best ideas come at like one 30 in the morning.

Um, you know, and it's like, it's the shower thought or whatever.

And, and it's like, um, but yeah, I mean, you know, it's, it's funny,

like I think the basics just get more and more important every year.

Baby's flossing sleeping laundering yourself.

I've

been investing in sleeps right there.

Pretty, pretty hardcore.

I mean, I'm, this is gonna sound embarrassing because I, I invested in one

of these like eight sleep mattress covers, which changes eight sleep it's E I G H T.

And it comes with an app and I am outing myself as like one of these

tech tech nerds, but it has, it's cool.

The, it changes the temperature of your bed throughout the night to maximize the

likelihood that you attain deep sleep.

And, um, as somebody who likes a really cold bed and my wife likes to really

warm bed, you can actually change the temperature on each side of the bed.

Oh, wow.

Better living through, uh, pneumatic innovation right there, baby.

Oh yeah.

The, this

is the hyper loop of beds equally

as, oh my God.

It's just what we needed this whole

time.

anyway, I know it's you can get a cheap one.

That's just a cover, which is what we did.

I mean, cheap it's still like a thousand bucks or something, but

it's, um, you not, the mattress is like beyond reasonable, so, uh, check

it out.

I will.

Yep.

I mean, you know, and speaking of very sudden transitions wow.

Um, I really learned beloved listeners that our question and answer form

on the website has not been working for an unknown period of time.

oh, no.

Um, I learned this because our guest on the next show,

uh, so was like, I asked a question.

Did you get it?

Oh, no.

Uh . And I, you know, so, um, yeah, I, uh, I apologize to you, uh, if

you, if you have posted, posted

something on the website, our website doesn't work.

Yeah.

We're working on it.

I mean, you know, it, like, I, it's funny, I was, I was

under the hood on the website.

It does get better every year, uh, around this time, you know, uh,

like when we, when we get fus fussed up about can always email email us

or free money pod, I've gotten a question given to me in a

slack, which we've had if you remember.

So, so there's other ways,

what other ways?

Yeah.

I mean, like, it's, there's a, you know, you can do, uh, on

Twitter at free money for 2069.

Um, you know, but yeah.

I mean like email Twitter, I mean, you could do smoke signals, like

the, you know, they still have those, those planes at the beach

that fly little banners around.

Yeah.

Um,

you could be like sky writing, maybe not smoke.

I don't know how to interpret smoke signals, but I can read skywriting

smoke.

Fly by Ashby's house.

It's like, you know, with a banner that's like, is there a such a thing as

a liquidity pre anyway, this is the thing where we answer questions from guests.

The first question we have for Dr.

Ashby monk is, do you have any thoughts about hashtag de growth?

And I had to hashtag Google that because I didn't know what

de growth was at first and now I do.

And, uh, for those of you that were in the same camp as me de growth is about saying,

well, capitalism seems to at times put wellbeing, um, behind the profit motive.

And should we instead put wellbeing ahead of the profit motive?

Is that your understanding of

what it means?

Yeah, basically it's like, you know, the, my understanding of it is that

like, it's basically the critique that economies around the world

are organized for perpetual growth.

Um, and you know, that that goal may not be aligned with human flourishing.

It, I, I have sympathy for it.

I just think that it's like all these things that the, um, solution doesn't

quite read on what the problem is that we're trying to solve for, if we're

trying to raise all boats, I'm okay.

With an ambitious humanity.

I think we just need to put constraints around that ambition and find a way

for profit and purpose to coexist.

Um, I don't know, like, I, I really do believe we, as a species are gonna

be interplanetary and that we're gonna get free energy outta the sun.

Uh, and I don't think that happens unless we continue to grow.

We need to grow better.

Um, but I don't think like shutting down our ambitions as a species

is necessarily like the path to flourishing and making everybody happy.

I think we need to continue, continue, like to shoot for the stars.

And, um, yeah.

Well, it seems like kind of a small idea with a big name in, in the sense that

it's like very like Mimi and trendy to think about, you know, where it's like,

well, what if we organized our economies

around de growth?

D yeah.

Yeah.

ASM stop growing.

Yeah.

Yeah.

The ASMR voice.

Well, well, like, I mean, you know, the idea would be like, okay, so,

you know, let's, I mean, if you think about, you know, the Chinese model

of growth, like where, you know, it's like, let's, you know, bulldoze

a highway and then put in another highway or whatever to meet a number.

Yeah.

Um, you know, I think that that caricature is what a lot of progressives

have of the economic model that we've been pursuing as a global society.

For a while mm-hmm , you know, and like the, you know, so I think it emerges as

a critique of waste, um, and inefficiency and misalignment, you know, with

like kind of the underlying society.

Um, you know, and like, it sort of fails to fully be practical

as a guy, as a, a guidepost for, for people who are doing stuff.

Um, you know, cause like the, I, I think about the organizations that I'm like

invested in or whatever and like, yeah, I'm, I'm not out here trying to, you

know, pick the 20 hottest growth stocks in the world or whatever, but I don't

think that their situation or their impact would be materially improved

by them scaling down the growth plans.

There's also an argument here.

Which I think isn't is about, like, I don't think we should stop at this point.

Like, unfortunately I don't, we, we decided through the industrial revolution

and, you know, through till now that we are gonna raise humanity up out of poverty

and, and build industry and healthcare and you know, all the stuff, right.

We've got a helicopter flying around on Mars right now.

So, so there's like interesting things going on, but if we stop now, I think

we would be stopping at a very dirty inefficient moment in human history.

Mm-hmm . And, and so you couldn't theory go back to the, the era where we weren't

emitting a lot, but to stop growth.

Now, I think puts us on a trajectory that is.

Risky.

Yeah.

And you know, in, in my own life, we joke around like, you know, my personal

net, zero commitment, 2050, but the reality is like my own living has gotten

much cleaner and more sustainable.

Even in the last five years I drive an electric car.

I have solar on the roof, you know, like I'm, I'm using the water that we

use in the bathtub to water the plants.

It's like all this sustainable resilient, um, efficient living is happening as

we kind of enter into this next phase.

And so I wouldn't wanna hinder capitalism from delivering all of

that sustainability and efficiency.

Um, mm we've come too far in

a way.

I do like the idea of like everyone sitting around at a negotiating table

at the UN or something like that.

And the progressives, having something they can really scare the

corporations with so that they , uh, you know, so that they can actually

enact some pretty toothy regulations.

Um, you know, like, I, I think that like, if you can, if you can go

out there and be like, Hey, Bernie Sanders is talking about de growth.

Uh, you know, all we're, all we're trying to do is like, you know, uh,

you know, give you a couple, you know, carbon taxes or whatever, or use taxes

or whatever, you know, I like, I, I feel like, um, in a way it moves the

Overton window towards more regulation.

Um, you know, which is probably a good-ish thing.

Um,

it's interesting.

The, the, the argument you just made, I feel like is why we still experience

climate deniers because they, they are.

They are, are aware that the climate crisis can be leveraged

for a left agenda around regulat.

Which I think is probably okay.

Cause I wanna actually make sure our families survive on

this planet for a long time.

I don't think we're interplanetary for a long time.

Big.

Even if we, even if we got to interplanetary levels, it won't be nice.

You're gonna be living yeah.

In a very uncomfortable life on Mars.

Um, you're not swimming in the beach, on my Balian island.

Yeah.

Luxury space, communism.

That's what, that's what the goal is here.

That's what, you know, that's what George Washington inscribed on a secret

napkin and, you know, put on the back of the declaration of independence,

the don't look up where those guys get on.

Literally they get on a spaceship, they get to that

planet and then they get eaten.

Right.

Sorry.

Did I just spoil it?

Sorry.

Yeah.

Anyway, people would forget if they want nobody.

Yeah.

Um, but the point is, so I'm, I'm all for using the climate crisis to make sure that

we're growing in a more sustainable way.

I think like the fact that we are.

Using the climate crisis.

That, that is why you still find people on the right saying things

like S E C comment letters this year.

Yeah.

Saying things like carbon dioxide is a, is a gas that we need to grow plants.

Like, what are you talking about?

This is a pollutant, like there's a whole thing written by this guy at

MIT that has been circulating, oh God.

And, and it's like wild, you know, that people are still making these

arguments, but I think they're making it for the same R reason that people on

the left are making the, Hey, we gotta use climate change to get regulation.

This is all a battle over how much regulation anyhow.

Uh, that's a great, yeah.

I mean like, you know, the, the, the never ending BA regulation battle.

Um, this is a really like, I, I, I do not know what to think about this question.

Okay.

Hit me this year.

Pensions are expected to be among the largest sellers of interests in private

equity funds on the secondary market.

What do you make of this?

Is it some kind of harbinger?

It's

not a, it's not a harbinger.

It is actually a reflection of, um, strategic asset allocation

and getting out of target.

And so what you're finding is what we all know and what, one of the

reasons why so many pension funds like private equity has nothing to

do with the risk return profile.

The private equity has to do with the fact that the marks are accounting marks.

And so they don't move as quickly.

And that is actually useful if you're a pension fund in a crisis

to maintain your net asset value.

Um, and so if you're a public pension plan, your public stocks

drop 30%, your private marks may only drop 5% or even be flat.

And that is a buffer.

Now that doesn't mean if those assets were actually meant to be

sold, that they wouldn't be sold at a discount, they would be.

But the marks in there are more resilient, not because the assets are resilient,

but because of the counting treatment.

So all that is to say, you're seeing a lot of pension funds

that had their other assets move.

Um, quickly in terms of prices.

So you went from having a 50% exposure to public equities and your 12% exposure

to private equities while all of a sudden your public equities dropped considerably.

And now that's at 38% and your private equity is now sitting at 17% of

your portfolio, something like that.

Mm gotcha.

Gotcha.

And you are obligated according to your rules to get yourself back to target

within a certain amount of period.

And that I think at least I think I read something in the Ft probably about

three weeks ago, where a lot of public pension plans were exploring secondaries

just as a way to get back into their waitings so that they could buy more

equity, public equities with their private equity, um, you know, buffer.

Makes sense.

I mean like, Hey, that's a, that's a story that you don't hear often,

you know, pension funds, you know, running to allocate to public equity.

Yeah.

Rebalancing is what we would call it.

But rebalancing from the e-liquid asset into the liquid asset, usually

the liquid asset is that kind of, um, valve, you know, the stress valve.

It's like, we use that to buffer, but if markets move too much, like they, they

did in the last half year, um, you're sort of obligated to then look to your

other asset classes, like private equity.

And so that's been happening.

I don't think this has to do with people finally giving up

on private equity as a return

driver.

Somehow.

I, you know, I, I think that that is going to be the thing that people are

forecasting for the entire rest of my.

Um, you know, the death of private equity, um, you know, um, alright, so this, this

one, this last question, uh, is for me, I tweeted this out yesterday and I'm

curious what your thoughts are on it.

Um, so I, I keep trying to be one of these considerate handwritten notes people.

Um, but my handwriting, I love that terrible, uh, like by, by terrible.

I mean, like I got extra time on the SATs because my handwriting was so bad.

Um, like I got to take it in a completely different room, uh,

in a proctored environment, you know, et cetera, you know, like the

whole special treatment, et cetera.

Yeah.

Um, you know, but you know, and of course that means that the notes

that I write wind up looking like they were written by a child.

Um, should I just, you know, let my freak flag fly.

What do you think.

I, I had an idea here, which, which I've done a lot of, which is to

type notes out, not on a typewriter, but print, print them out and then sign them

with blue ink and to write a friendly PS.

That's a good

idea.

That's a good idea because

it feels like, I mean, the, the writing can still be personal and

the fact that you've printed something out and put your mark on it with a

signature and then a PS with a smiley face and a, a little drawing or something.

I like that.

I get that a lot.

In fact, I feel like I got a note like that.

Um, who was the chairman of the Yale endowment?

Uh, Charlie Ellis.

Charlie Ellis.

Yeah, yeah, yeah.

One and only he wrote me this nice note.

He was like, dear Ashley.

I was like, wait, that's not my name.

I'm just joking.

he got it.

Right.

Actually, but that would've been like hilarious.

If, you know, I'm telling this story about the superstar and he got my name off.

Um, yes, he, he, but he typed it up and then he wrote a nice PS at the bottom.

And I, I found that quite nice.

And it's actually sitting in my office at, at Stanford.

I pinned it up.

I liked it so

much.

Wow.

Okay.

Well, that's, that's very encouraging.

I mean, it's, you know, it's better than my, you know, fallback strategy of like,

you know, basically doing one of those five year old portraits of like me and

the person I'm writing the letter to just like standing and smiling, you know, like,

hi, you know, by Sloan Martel, age 34.

Uh . Yeah.

um, you know, and just sort of like trying to make a side market for

myself as, as in art taste, I love it.

That you're handwriting notes.

It is, I mean, you know, not too many, not too many, you know?

Yeah.

You know, I was living in

Europe.

I was a big postcard writer and I would write postcards to people

that I, that I don't think even expected to get postcards from me.

It's

a really nice, that's a good way to keep up with old friends.

Um, that is you can, you know, like my, my grandmother is like the

queen of keeping up with people.

Um, and part of how she does it is she just has this insane Christmas card

collection that she, you know, like has been in touch with for, you know,

this group of people she's been in touch with forever and, and whatnot.

You know, I don't do that.

I don't do the holiday cards.

I get a lot of holiday cards and I'm always voraciously reading

them, but I'm, I don't do them.

This might be the year.

Yeah, I just don't know how to do it.

I guess it would take the family photo and

print them up.

It seems very stressful.

And like, you know, oh yeah, by the way, just go find all of your

friends, real world addresses.

That's not gonna be stressful totes.

Like what kind of psychopath is sitting around with like, you know, a hundred

friends mailing addresses anyway.

Uh, what do you

got from I anybody's.

Yeah, like, I mean, I, I, I thought I, I could, I would

probably wind up like Googling it and sending it to people's work addresses.

Um, what kind of garden tips you got for me this week?

You don't?

I think

that was a sound.

Yeah.

Maybe sound effect.

Maybe a sound effect.

Uh,

wait.

Wow.

This suspense just all right.

Well, I mean, Nope.

Okay.

I'm giving up on your side effect.

Let me, during my.

This is almost too good of a platform.

I just, uh, yeah.

well, my favorite is when you then finally just ha hit the, uh,

river stud FM or whatever, cause like you could, you could always do their

oh yeah.

Yeah.

Well, I was trying to play that actually and it wouldn't play.

Okay.

Shit.

Nevermind.

Uh, my garden tip is, um, part tip part app.

Uh, the tip is just very simple Manda Villa.

It's a point Manda Villa.

Yeah, it is so beautiful.

It is a vine and we've put it in pots in our backyard and it climbs up and around

and frames this area that looks out onto our grass and it's these it's um, they

call it, uh, Brazilian trumpets, I think.

It's some, but they're like red looking trumpets and they

flower for like four months.

It's insane.

And so I would say like the tip of the lifetime is to just like get Manda Villa

planted, cuz it does take a long time for them to grow up and get to that

point where you're framing something.

But to put one on each side of something that you can envision having, you

know, gorgeous vines climbing around.

The other thing that I was thinking the other day is, um, part of becoming

like a reasonably sophisticated gardener is understanding the plants

that are in your, in environ realms, your geography mm-hmm and I am

terrible at names and I'm terrible at remembering, but there is this app I've

been using for the like last three or four years called picture this, oh,

she's a Butte, she's a

Butte and I have a professional, uh, subscription.

Upwards of $25 a year.

Wow.

I'm on picture this pro and it is worth it because when I take a picture of a plant

out there, it's, it's almost always right.

It's so technologized.

It's nuts.

You can watch it scanning the picture and then it comes back and

tells you everything you wanna know about the plant and the pro license.

Lets you take pictures of your own plants and diagnose them for problems.

Oh wow.

Yeah.

I mean it it's, I under, I have a subscription to that app,

but I weigh underutilize it.

Although I will say like it makes walking around in the neighborhood just so

much more fun cuz I can like totally.

It's like playing Pokemon, you know, you're just like, it's like

Pokemon.

Yeah.

There's a map too.

And it, what, what you do is you're walking around.

It will show you the pictures you took on a map.

Oh wow.

There's a map functionality.

Well that's, I mean, that's pretty great.

And then you get the time lapse.

Woo.

I mean the garden tech they're building these days is so innovative.

I know.

Um, you know, I, I, I'm glad you brought up climbers cuz they are what a Butte,

um, you know, I, a lot of heartbreak with climbers and every single time

it's because I did a stupid thing.

Um, I, I didn't build my climbing structure before I planted my.

um, you know, I sort of figured I would fill it in later.

Um, and I, you know, everyone out there is like slow and you're such an idiot.

How could you do a thing like that you might

not be doing?

They might not be saying

that, but I, no, they're probably, they're probably like, I don't

even know why I listened to this podcast.

planning your plans without, for the guests, without building a trellis.

Like, is this woman insane?

Um, no, but like the, you know, like Ashby says, put your, put your plants somewhere

that you could see them growing in.

You know, I would underline, you know, see them growing in.

Uh, yeah.

I can see climbers behind you right now.

Oh yeah.

Those are my wall climbers.

Those are my, uh, yeah, it's amazing.

Yeah.

It's uh, know, I, I sort of, you know, actually what inspired, uh,

this is another, another podcast.

Alumnus Jay Litman is making these great YouTube video or, um,

LinkedIn videos, uh, for his company ethic about sustainable investing.

And I was like, How's he get to be so smart and brilliant.

I want to make good videos too, for real.

And I was like, what's his secret?

His secret obviously is that he has plants behind

him.

That is true.

There's a lot of plants in those videos.

Yeah.

It's a lot of grainery looks like a sustainable office space.

I can't match his accent, but, uh, and Jay

sounds quite smart.

It, yeah.