How To Allocate Capital In A Firestorm Of Uncertainty (w/ Raoul Pal & Dylan Grice)
RAOUL PAL: Dylan Grice, finally we get you back. You're one of the first people we ever had on Real Vision. Everyone's like, oh my God, he's the smartest man in the world. Then you went undercover, and nobody's ever seen you again. Tell us, give people a bit of background about you, where you've come from and what you're doing now. It's been a really interesting journey. DYLAN GRICE: Background from beginning when? I'm speaking to you hear from Switzerland. I've been over here for the last six or seven years. I left SocGen, where I've been a strategist on the sell side and banking. I've enjoyed that very much. It was great fun, but I think I needed to be doing, and not just talking. I had an opportunity to do that. I had an opportunity to come to Switzerland and really help out with a family office here, one of the largest family offices in Europe, a company called Calibrium based in Zurich, and they really wanted some help building what was initially an equity business, but eventually became the multi-asset and liquid allocation so I helped to build that, to establish that to really embed the investment philosophy that went into the investment decision making. RAOUL PAL: How was that journey? Because that's a big journey of discovery from the strategist side to now helping evolve a big family office and then evolve your skill set at the same time. DYLAN GRICE: I started out, very beginning of my career, I started out as an economist. I did economics undergrad, I did economics post grad. My ambition in life was to be an economist. That's very sad. Well, that's all I wanted to do. I know it's funny. It's funny and everything out of, but it's true. I love the idea of trying to figure out where, actually why some countries were poorer, and some countries are rich. Some people were poorer. Some people were rich. This was something that was very interesting to me as a young adult, and so economics is a way to try and better understand that. I just ended up, I was at the LSE, everyone at the LSE was applying for jobs in banking. I didn't know what an investment bank was. I honestly thought it was basically, when you go in a bank and you would cash a cheque and there would be someone behind the glass. I thought it was something like that, but they were all banks. Anyway, without really knowing what bank was, I thought I would apply for banks anyway, which I did. Got a job as an economist and ended up thinking, well, this is actually better than doing a PhD because I'll [indiscernible] economics, and I'll get paid much better. That was my thinking. What I rapidly figured out, it's not that I figured out how to do economics, I figured out that economics was practically useless. Theoretical economics, for all practical intents as useless, I really, really believe that. You go from trying to predict the economy to trying to predict unemployment to trying to predict markets and this is just much more difficult and frankly, much more interesting. I went from economics to property then. I was a property trader for some time, addressing and buying on the equity desk. That was a lot of fun too. I unfortunately shut that down, which is when Albert hired me, it's all jam. I went from my whole career had really been I started out as an economist then went to be a property trader, then went back to being a strategist, so there's oscillation between thinking and doing, thinking and doing. Then on equilibrium, it was lots of doing, but there wasn't much-- there was a lot of things but there wasn't so much writing or speaking. Actually, it wasn't such a big shift to go from a strategist to actually help them to bear with that framework for multi-asset allocation, it wasn't such a big difference. There's not as big a difference as it might sound. RAOUL PAL: Then you were running a portfolio there? DYLAN GRICE: Yeah. Well, certainly, the first few years, actually I built the equity business in [indiscernible]. We're a family office, so obviously, we weren't pitching for money, but I built the team, hired the team, hired a couple of analysts, manage the portfolio, but it wasn't so much-- the thing that I always said to the guys at Calibrium was-- one of the things that interests me is actually in building a process, building an architecture for thinking correctly about investing, is this a good investment hypothesis? What makes a good investment hypothesis? How do we know that the investment hypothesis is wrong? How do we size positions? This was the commitment that I made really was I'll build you a team and build you up a framework if you like. It doesn't really need me to run it. If I get hit by a bus, then you can still keep cranking the handle, you've still got the philosophy is very firmly embedded. That's what I went there to do. That was fundamentally just equities. We started out with an equity portfolio. That went quite well. We then designed another equity mandate, it's a little bit different but that also went quite well, with the same team. From there, there were a couple changes at the firm, but I ended up being asked to do what we've done for the equity team for the overall liquids team. Rather than being a stock picker, which is effectively what we're doing, we were now making allocation decisions. How much between equities versus credit, versus rates, versus precious metals, et cetera, et cetera, et cetera. This played into something that I'm very interested in, which is that, I think that even though domains are very different, so an equity guy might think that the skill set is very different from a credit guy who might think that the skill set is very different from a macro guy, or even from a quant guy. On one level, yes, the skill sets are very different but on a more fundamental level, the principle is the same. The principles are always the same. The principles are, do I understand what's going on? Given this radical uncertainty, do I actually understand what's going on? Do I understand well enough to know when the odds are in my favor? Do I understand well enough to know when I've made a mistake? These are the fundamentals of any investment and so applying those fundamentals to an equity team wasn't actually so different to applying it to a multi-asset class team. RAOUL PAL: Now, you also build the whole philosophy around how you think about investing. You've spent a lot of time thinking about stuff and how, because you've now built a new business, so talk a little bit about that. Then your philosophy about what you're trying to achieve now, because I think it's very interesting when you and I caught up recently. DYLAN GRICE: Of course, we started Calderwood Capital at the back end of last year. The idea is that it will really be there'll be two parts of the business. One part is the research side. The other part will be a fund management side. Fund management's a much more difficult business to get up and running than research and so we got research went live last year, and that we published in a monthly newsletter, a relaunch of The Popular Delusions, which is what I used to write at SocGen. Obviously, it's come on a little bit in those years because I've had this family office experience and this family office background, it's really had a very big effect on the way I see things really. The Popular Delusions is partly influenced maybe by the practicalities of actually, how do you actually invest? You may have a view on what's going to happen to the world, you might have a view on what's going to happen to central banks, or the next election or all of these things, but how do you actually build a portfolio? It's not just what's the trade, it's where do I put this in the portfolio? How do I put it in the portfolio? How do I size this in the portfolio? These are more practical questions that interests me and that's what the research business is really about. It's really about trying to tackle those questions. RAOUL PAL: You also come with a specific deep value framework as well? DYLAN GRICE: Well, yes. I think a valuation framework, yes. I think when you see deep value, then it has certain connotations. I think people think that it means that you won't buy anything that has a PE of more than five. I'm like no, it's not actually what is, but valuation is absolutely completely very, very value oriented. I don't know how else to think about investing, if you're not actually thinking about the expected returns. Yes, we absolutely bring that to add to the research, but as I said on the website, we are in the process of building an asset management business. The stuff that goes into the research is these are these are practical questions that we ourselves are trying to answer. These are questions that we ourselves are wrestling with, and because these are things that ultimately will end up in the portfolio or ultimately will influence the portfolio in the asset management business. RAOUL PAL: You're launching, you're in the process of launching an asset management business in basically a nuclear event. What I really want to do, pick your brains on how you are seeing this event, both from using your macro perspective of which you're very good with that but also, what are the opportunities that it's throwing up as well? Because there's two ways to look at this. There's a whole bunch of risk, as we know, but there's obviously a whole bunch of opportunity, and it's trying to sift through that, then I know that's really your strength. That's your skill set in all of this. DYLAN GRICE: Yeah, well, I think there are two parts of that question, where do we think this is going, and where the interesting opportunity is? I think that the first one is actually a much more difficult question to answer because we all have our views on where we think it's going, and I think maybe we're not so different. I don't know, I'm very concerned that we're about to see the mother of all credit events. RAOUL PAL: Yeah, that's exactly my view. DYLAN GRICE: It hasn't really showed up yet. I think that we've seen a huge rally, and really because of a relief, and maybe even optimism that the stimulus packages are just so enormous. RAOUL PAL: Also, the narrative has now caught up, because it was so far behind the reality. The narrative's caught up and even Donald Trump yesterday saying, well, 200,000 people might die. He's now potentially even overestimating so the narrative has now caught up, therefore you can rally essentially. DYLAN GRICE: That's right. We've fallen so far so fast. It's difficult really to see how many sellers were left, there could well be some technical aspect to it but yeah, it feels like the narrative has caught up. That's exactly it. I think that you've had this relief that the stimulus has arrived, that the stimulus is here, that the speed with which the policymakers have got their act together compared to in 2008 when they seemed to take an age and I think that the numbers are very big. People are, I think, relieved that the numbers are also back. For what it's worth, I just feel that there's-- Jim Deakins talking about these fiscal blockages, and it was just going to take a lot a long time for this money to actually hit the economy. In the meantime, we just fell off a cliff. Those weekly claims were absolutely staggering. Since you asked me, I think nobody really, nobody runs a business, you may stress test your business and think well, if things really, really go wrong, revenues may be down 50 or even 60, 70 but no one really stress tests a business for revenues to go down 100% overnight. RAOUL PAL: For three months. DYLAN GRICE: For three months. I have a suspicion that this pain is going to be substantial and severe, it's going to check [indiscernible] of this credit problem, these credit excesses we're already bigger than ever. RAOUL PAL: My fear within this is if you speak to any market participant, the basic assumption is it's a six weeks to three-month thing, and then we go back. The problem is A, human behavior has changed. The chances of people resuming their consumption patterns, their social patterns and other things quickly is low. The Prime Minister of Singapore made a really good point on this. He's like, look, we're going to keep our borders closed probably for a year and we're going to have to get used to that, and it will affect us. He said, I think this is probably a one or two-year issue. Now, that's all well and good, but if you have negative growth over an extended period of time, and you've got all of the debt to service, it's game over. That's all I think about. I can simplify it all down to if people have sold the tail above three months, they're probably making a big mistake. DYLAN GRICE: Yeah, I think related to that, as the US numbers look completely out of control and you look at the measures they've taken, and they just haven't did not enough. It seems to me when you look at the-- when you rebased the fatality count to once you've had more than 30 or 40, it's America today actually looks far more like Italy and Spain than it does China. I think that I know from my own personal experience, we watched this-- and by the way, I think we were, as a household, I think we were switched on to this I think before most, not because I was perfectly switched on to it but because my wife was, Mona. She got very weary very quickly about this and we actually started stockpiling and canceling trips. This was back in late January. RAOUL PAL: Yeah, we did the same. DYLAN GRICE: I have to confess I didn't really see this coming, but I did feel that this was one of those situations where it was probably rational to panic. Actually, it wasn't irrational to overreact. It was rational to, it was completely rational to overreact. The reason why we came to that conclusion is because that's exactly how your immune system works. There is a biological rationale to overreacting when you're faced with an enemy of uncertain strength. If you don't really know how strong the enemy is, there's no point in going in with that half-baked defense or half-baked attack, there's no point in allowing your enemy the chance to come back stronger. You have to completely obliterate the enemy, you have to completely overreact. That's exactly what your immune system does in the face of-- this is how vaccine works. I felt, okay, let's-- Mona wanted to stockpile, I wasn't so sure, but let's overreact, so we did all of this. Then we watched the numbers come in. We actually started getting a little bit nervous about it, a little bit scared about it, but it was all very abstract. What then happened was it started, it came to Europe, and then it was Italy and then Northern Italy was in lockdown and then suddenly, it was all Europe and then it was here in Switzerland. Then suddenly, we knew people that have it. Now, suddenly we know people who died from it. Suddenly, it's not gone from this abstract thing. It's gone from something very real. That even when we saw it coming, that has actually been quite traumatic. I just feel that that's what America is just about to go through. I struggled to see, really, I still want to see the market doing okay when that hits America. RAOUL PAL: I totally agree. The weird thing is I think my wife's had it. She's in Grand Cayman. I'm in Little Cayman. We couldn't get together. She's been quite ill, but she's over it now. We think a bunch of our staff got it, no tests. Now, the problem is she doesn't even know when she's safe to travel again to come over here. She doesn't know who she can meet, and what she can do. For me, do I have to reset the clock, do I have to go into quarantine again? Even me going to the store is a nightmare now because nobody trusts each other. I just look at the behavior already in how much has changed, and America is going to go through this enormously. It's a real mental scarring for people. I know people, for example, in Southeast Asia who went through SARS, have some mental scarring. This is clearly a lot bigger than SARS was. I just don't think people are factoring in some of the human behavior, because as you said, this has now gone from being abstract to a reality, and it's going to be a defining moment in your life that you will never forget, nor will any of the people around you. That's truly extraordinary. It's like war. DYLAN GRICE: Yeah, I think that's right. It feels as though roughly 25%, 30% peak to trough drawdown doesn't really seem to match that type of emotional scarring. That's why I feel that that's probably-- and I see probably, okay, because we're still on the first question. What do you think is going to happen? I think that that's actually the form of difficult question. RAOUL PAL: Let me just ask you that because there's outcome and then there's time horizon. What is your view in how-- and again, this is all probabilistic analysis, none of us have a clue, but best guess, how do you think this plays out in terms of what the market does? DYLAN GRICE: My best guess-- my very best guess, which again, probably isn't worth very much, but what it's worth I think that as the US loses control of this, or as seem to have lost control, I think it's already lost control, frankly. I think as over the next few days and weeks, these numbers, there will come a point where people see these fatalities and think holy shit, when does this end? When does this end? When does this stop? I think they will probably see new laws then. I think that at the same time, I think you see the consequences of these fiscal blockages, the concept, i.e. you're not getting the money to the economy fast enough. I think you'll also see the consequences of what-- I thought I could be wrong, but I don't quite see how you coordinate a mass forgiveness in the credit markets. You're going to see I think an awful lot of defaults. As I said, these credit excesses were just there for all to see before this even started back in January, with the investment grade and even the selling with investment grade, I think even the higher quality junk, so the BB stuff was trading at or insane at the tights of 2007-2008, so credit markets were ridiculously tight. This was when you've had excesses all over the place. You can see in the loan market the percentage of the leveraged loan market, there was just one grid above C. You could see in the private equity market at least add backs, where they were calculating their EBITDA for the leverage calculations and the prospectuses, there were loads to add back projected savings. Those EBITDA numbers were actually much lower than the ones that will be reported for credit policies, which everyone knew about, and no one seemed to really care. I could go on, the credit market was, I think, due quite a hard fall. It was given a sufficient enough knowledge, and what's actually happened is it's been too open and eat palms right in the back, and it's just been thrown off the cliff. I feel that we haven't really seen the credit problems yet. RAOUL PAL: Is that a-- usually when a credit cycle comes of this potential magnitude, it's an 18-month affair. It's not certain, it's not a three-month, six-month, even nine-month affair normally, it goes on for a while. What do you think? DYLAN GRICE: Yeah, because once you default, then you lay people off. Then your competitors come in and steal a march and then it's actually, then you've got all of a sudden, you're having to restructure your balance sheet and restructure your business and you don't just do that in a month or two. You probably-- and again, I think this idea that this is only going to last for a few months or a few weeks even, those people that have been let go of, you don't just get a job straight away. Again, I can see why we could maybe be wrong here. I certainly hope I'm wrong, but my feeling is we go lower here. I think that that's like my best guess and we're probably 18 months away from-- 18, 24 months away from making new highs, or go to those highs. RAOUL PAL: I think I'm even more conservative on this. I feel like we might be a bit of-- because of the demographics and stuff like that, there might be a secular cycle at play here as well, that concerns me. Because the baby boomers need to divest of a lot of this stuff and a lot of its credit and equity comes out of the time. It's just it's very spectacularly bad timing. I guess we'll see how that plays out. In that situation, where does the opportunity lie? Because it's difficult to short stuff right here. It's difficult to buy stuff. It's one of these weird places that tactically sure, we could punch around, to do anything meaningful-- DYLAN GRICE: This is where maybe I slightly dive out which is I don't have a problem thinking that the market is going to go lower, there's no buying. I find it easier to be a buyer of this market than a seller. The reason for that is, firstly, I think that the valuations actually are starting to look okay. They don't look completely crazy. Now, I know the data points, I know lots of people can say, how can you see it? How can you possibly see it, but what idiot would see that when the Shiller PE ratio is still in the top quintile, and we're still the most expensive equity markets just about over the past century? I understand those data points, and I don't really agree with them. I don't think that they're very useful. I think that there are some data points which are far more useful, and that they are actually flashing green at the moment. I can give you an example, I think on Friday afternoon, the high yield market implied the default rate was over 20%. You're looking at maximum default rates of about 12% in the tech boom for high yield, we're about 10% in 2008, you've got an implied default rate of about 20% high yield right now. It can go much higher, no doubt about that, but that's already there's some return there. There's some good return there. How does an expected default rate translate into an expected return? Well, again, it depends how you measure it, but if you think about the credit, the credit spread that you get is effectively your compensation for being hit with some defaults, obviously. Now, as that credit spread widens, you can absorb more defaults before you actually take a loss. Now, how much would default have to be for you actually to-- we've already seen 22%, let me ask the question a different way. Suppose defaults come in at the worst historical five-year average at rolling default rates which was I think it was actually early 2000s, the rolling average is something like what rolling average five years is about 10%. If we were about to go into that, now, you're still going to make about a 4% return. Now, I'm not saying 4% is spectacular, but with all the stressed scenarios, you make a 4% excess return over whatever you make in treasuries. Now, that's okay. I think that's okay. It's not completely jaw droppingly mouthwateringly failure boot stuff, but that's something you buy, that's not something you look to sell. RAOUL PAL: How do you size up the potential credit event because that has a risk of being maybe a larger credit event than we have lived in our lifetimes through, how do you get a grasp of that tail? Because that's the only way you can price this is, okay, this is what I think the tail is worth. This is where I think it's trading now. Am I compensated for that tail? DYLAN GRICE: I think two things, the first is I think it's very-- and it may be a little bit late, or maybe not. I think it's prudent to have some of those things in your portfolio that people see only ideas having a portfolio, for example, gold, or Bitcoin. Which I know you're a big fan of. We've actually spent most of that whole crypto bubble and we were actually living in Zurich at the time. RAOUL PAL: Mona's in that world, isn't she? DYLAN GRICE: She is, she did one of the first ICOs in Switzerland, I think it was the third ever ICO actually. I think it was late '16 or early '17. We did get front row seats to that whole madness. It was madness. It still is madness actually, but it's something we know a little bit about. I understand why people were squeamish about Bitcoin, but I'd say I don't think it's a dumb thing to have some. I think gold maybe is a bit easier for people to get their head around, and a lot of us see a lot people like that. I think that in the real extremes, I think those things should do very well. Assuming you avoid those tails and you can have quite a nasty environment, a very nasty market without society blowing up, which is the extreme that I think you go with, but I think it's, well, you want some cash. How else do you think about that? Well, I said at the beginning, I don't have a problem thinking that the marketing go law, but still buying. The question is how do you buy? Suppose if you think that this is the bottom to the day, then you should go all in. You shouldn't be hedging your [indiscernible] now, just put everything in because it is the very bottom. If you're not sure if today is a bottom, if you're maybe 50/50, then you should put half of your available capital in. If you actually think that this is almost certainly not the bottom, and it's going to fall, it's going to crater by another 20% or 30% from here, and then maybe you would only put 10% of your deployable capital in. RAOUL PAL: Yeah, I totally understand that, that makes total sense. Now, you've got a set of opportunities, how do you filter, which set of opportunities takes priority in the portfolio with the amount of capital that you want to deploy at any one time? Because this is where the dark after portfolio management comes in? It's never that easy. DYLAN GRICE: Well, I think you're so-- this relates back to what we were just discussing about predictions about where we think this is all going to go. It's all very interesting. We all have a view on the future. We all have predictions, we all like to compare predictions. I think that it's easier to react rather than to predict. I think reaction is almost an easier, like the market will as you questions, and you can answer yes or no. Whereas when you're actually trying to predict and you're trying to figure out where it goes, then I think it becomes much more complicated. Were you reacting? I think these are the markets where you know you're in reaction mode. Do I like these prices? Do I like the price of this security? Do I like the price of this asset class? Yes or no? You answer those questions reasonably easy, reasonably easily. I think that it's too late to be looking for new investments here. You shouldn't be dusting down your file on that company you meant to have a look at six months ago, because it now looks quiet, it's too late. It's too late. Either you know it, or you don't. You should have been doing the work six months ago. You should have been doing the work when you have plenty of time, when it wasn't a fast market, when it wasn't such a rapidly moving situation. That's when you should have been doing the work, whether it was for a company, whether it was for a security, whether it was some slightly complex trade, or a manager, and now is the time to be pulling the trigger on the work that you've already done. In terms of how do you decide which one's which, well, I think the filter is very easy to see. Have I done the work, or have I not done the work? If I've not done the work then I'll leave that for later because right now, I'm pretty sure it doesn't matter which market you're looking at. If you are a credit trader, you will see there will be some credits which you know you don't need someone tell you, you know that these offer great value. Why? Because you've been trading this stuff or watching this stuff for years. If you're an equity trader or an equity investor who's actually seen it, you've already got your watch list. If you're a CLO trader, or if you're an allocator to different managers, you know what your universe offers you. I think that a time like this is the time to pull the trigger. It's not the time to be doing new detailed analyses, I think that was for-- that stopped in January. RAOUL PAL: Going down to the next level now, across asset classes, where offers the better opportunity? Another question as an addendum to that, is how the fuck do you deal with a portfolio where bonds don't work any longer, as well if you're constructing a multi asset portfolios? Anyway, the two questions is what asset classes look particularly interesting as we're drilling down and how do you deal with bonds that don't really work in a portfolio or potentially then? DYLAN GRICE: I think the one that stands out on a risk adjusted basis I think would probably be CLOs. I think that across the CLO capital, when you get a little bit more senior into the CLO capital structure, you get to BBs, you're getting a double digit return, you're 10%, 11% for BB. Obviously, that's their selfinvestment grade but the credit performance of CLOs versus the underlying credits has historically been incredibly good, far too good. You can normally, if you're willing to basically do your homework and accept the complexity that comes with CLOs, of assets, vanilla credit, you're probably going up a notch, maybe even two notches in credit rating in terms of the expected defaults that you're likely to sell for. 10% or 11% for in vanilla credit prevalent towns, BBB, maybe even A, I just think that that's a phenomenal value. As an all peak market, you need to know how to access that market, you need to know who the managers are. RAOUL PAL: And you need to understand it's not a simple market. DYLAN GRICE: It's not simple market, but I think again, as I said at the beginning, one of the things that I think very interesting are just these very deep principles which are true across all-- doesn't matter what you're doing. The principle for Jim Simons and the scientists at Renaissance technologies, before they're actually deploying a model, the principle, the fundamental principle which they are deploying is exactly the same as the fundamental principle that Buffett and Munger will be deploying when they're allocating to a new business. Do we understand this? RAOUL PAL: A lot of people don't ask that question. DYLAN GRICE: But they should be. One of my heroes is Sir Richard Feynman, the physicist, the Nobel Prize winning physicist, and he was talking about doing science and science, in essence is not so different from investing. It's trying to understand reality. What Richard Feynman used to say was just when you're doing science, just remember two things. Rule number one, don't fool yourself. Rule number two, you are the easiest person to fool. Always bear those two things in mind, and when you're doing investment research and seen that, yes, I see it was complicated, yes, they're not that obvious, but how much time do you need to spend to roughly understand the basics of what these things are, and what the risks are? It's not rocket science, a little bit patience, and a little bit of willingness to ask some dumb questions to people who know and people who trade that stuff. I think you'd end up in the same place. If you're going to look at catastrophe bonds or if you're going to look at life settlements, or if you're going to look at booking.com, or if you're going to look at Google or Exxon, you're going to have to get down and dirty with really understanding what the hell is going on under the hood, or if you're building algorithms for Jim Simons. You're going to have to do some pretty serious work, go down a bunch of dead ends, throw your hands up on multiple occasions. I don't understand this at all, and then eventually persevere, and you'll get there. I think that subject to a willingness to walk away if it's genuinely too hard, or you generally don't understand it, then yeah, I think that spending time understanding how different investments work is just a very, very good use of your time. It's a very profitable use of your time at times like this, when you get this dislocations, I think in pretty much any market you look at, you can see dislocations. RAOUL PAL: Going back to that bond question, treasury bonds and how that works in portfolio construction. Have you got any thoughts on that? Because a lot of people are just starting to scratch their heads and think about it, and do I substitute it with something else? Can I just put gold in its place? How does that world work? DYLAN GRICE: I think it's interesting if you go-- where do you start? Okay, I'll give you the simple answer, I think, is this, and by the way, I haven't properly done the work. RAOUL PAL: Yeah, I know, I'm just picking your brains on it because it's just come up very quickly for everyone. It was like, oh, shit, okay. DYLAN GRICE: It suddenly has, yeah, it's funny. If you look at the-- they've got, I think it's Deutsche Bank indices, but they actually have long index hedges so pretty hedge the indices. On Bloomberg, you can look them up, the bottom for the DAX, the CAC, the FTSE, I think the S&P. RAOUL PAL: It applies a certain delta option you buy every month or something of that. DYLAN GRICE: I think it is, from memory, I think is 5% out of the money which they roll quarterly, it will make the out of the money, but I think it was 5% that they roll quarterly. This is not going to protect you, you could do far better than this if you just spoke to your bank and got them to rebalance it weekly or monthly. Because obviously, if you're buying a put option into December, and then the market was up 20% in January, February, then your put option has-- it doesn't actually afford you that much protection for a march drawdown. Nevertheless, that's what these indices show. If you look at the total return for this index and compare it to the total return of the DAX index, which has the total index in there, the difference over the last 20, again, it was a few weeks ago, I looked at this, but I think it's around about 20, 25 years' worth of data. The difference between a fully hedged index, and just a naked index is 90 basis points. In other words, it only cost you 90 basis points to hedge with a put option. Now, if that's the cost of hedging, I feel comfortable with it. I think that I would rather have a portfolio, put some of my portfolio then add to hedge my portfolio then the 60/40. 60/40 basically just as dampened equity. I can download my equity-- RAOUL PAL: Because they're both correlated so you got the double kicker. It made everybody with an all-weather fund look like a hero for a while. DYLAN GRICE: Although historically, they haven't thought that correlation is not being stable. Now, it's really so that there is a potential disaster where actually you basically get this-- you don't get the hedge there when you need it from the bond market. If you've got the leveraged risk parity, then you're clearly in trouble and but if-- again, subjects do happen to actually broaden that type of analysis but that's quite promising. If it costs you-- it only cost me 90 basis points through the cycle to hedge 100% of equity portfolio, and with put options, with vanilla put options, I think that gives me the answer. That's what you do instead of bonds. RAOUL PAL: Yeah, it's super interesting. What's the variability of returns? Because it's very easy if you're in a family office to say, well, 90 basis points over that period of time is fine. If the variability of the 90 basis points is one year, you're lagging by 10%. In this stupid business, nobody will accept it. Do you know anything about that or not? DYLAN GRICE: I think the volatility with the last drawdown was lower. I think that the question you asked is such a good question and I think for any money manager, it's just if you had a-- answering that question is the holy grail, because it's not you're asking that question for that particular strategy, you could actually ask out for anyone who thinks they may outperform for a couple of years and I think that the answer is to the extent that there is one is two things. One, education, so be as crystal clear as possible with your investors about exactly what you're doing and exactly what they can expect so that when it does happen, you can tell them, and it's not a surprise. That doesn't guarantee you anything. I think it might buy you an extra year of underperformance, but that can keep you in business. The second thing is deliver what you promised. If you're trying to educate, you're trying to promise investors and say, look, here's what-- we really outperformed over the cycle, but there could well be two or three, if we follow this exact strategy, we will expect two or three years of underperformance every 10 years. I think if you can really get out, don't sell them something that's not attainable, don't sell them constant outperformance and without any period of drawdown, without any period of underperformance. This doesn't work and bizarrely, you do see people do it because I suppose it sells. This is the asset gathering strategy where you just you have like 20 bonds and you tell the investor that every single one, for every individual case, you say, oh, this one's going to outperform forever. This one-- and of course, most of them don't, but just statistically, one or two of them will do. They're the ones that get all the inflows. RAOUL PAL: And then they stop outperforming, yeah. DYLAN GRICE: Yeah, I don't have a bad answer, but education, delivering what you promised and grapple with it. RAOUL PAL: Let's get down to more specifics now, what are the areas that you're focusing on? CLOs, that's an area that takes, as we talked about more of the skill set, in equity terms, is there particular sectors that you're looking at, or very, very special situations, single name driven, how you're looking at this? DYLAN GRICE: What can interest me? I think that there's some of the emerging markets are interesting. I think that a lot of emerging markets were interesting before this happened, before we had this recent episode. I think Russia has been interesting to me for some time, I've been invested in some Russian equities. Sberbank in particular, I think is-- RAOUL PAL: What's interesting about Russia for you? Because it's a market that people fall in and out of love with. As far as I know, most people aren't involved any longer. DYLAN GRICE: Well, so that's already a part of the answer. RAOUL PAL: I figured that out. DYLAN GRICE: Russia to me, is not-- it's not a view on Russia as such. It's not a macro call on Russia. It's just that like any index, there are to be any degrees, but any equity index has got good companies and bad companies, and well run businesses and badly run businesses and Russia has some very well run businesses. Some, not [indiscernible], but it's got some well run businesses. One particularly I think they have one of the best run banks in the world, Sberbank, which is a fortress balance sheet, unassailable position in the Russian market. Without spending 20 minutes with that articulation of the investment thesis, I think this is about as bulletproof as you get as far as banks go. It's like the JP Morgan of Russia and you have a very rapid banking system. Every time there's a downtime, the banking system gets crushed. When people do pull the money out of banks, when there are runs on the banking system, they put their money into Sberbank, because it's the last man standing, it's the highest quality name. In terms of the structural problems that banks have, i.e. bank runs, Sberbank, if anything benefits in that environment get stronger in that environment. The other problem that banks have is this structural mismatch between their assets and liabilities, so they've got very short term liabilities in deposits, but they've got longer term assets in terms of mortgage loans. This often eats into equity when there's shifts in the relative interest rates. Most emerging markets and certainly Sberbank, they actually lend floating rates, so they don't have that mismatch either. They have a very, very robust business model, very, very robust brand in Russia. They have extraordinary margins, and emerging market bank margins are far wider than they are in developed markets, because you don't get the same competition from capital markets. Emerging market banks I think are different animals than their developed market counterparts. You've got a bank that's regularly handling an excess of 20% return on equity and it's trading at 20% discount to book value. I think that you're getting very, very good-- that's very, very easily, easily a double digit return in my view. RAOUL PAL: You come across the family office, I won't mention their name, that only does this. They only do emerging market banks. Amazing, I should introduce you. Amazing. It's a big family office, they've made a fortune. Basically, they only focus on emerging market banks. They were the Nigerian banks, the Indian banks, the Russian banks and all of this. When nobody else is looking at them and everybody's puking them, they're the guys who go in and figure out what-- because there's one trick that they know really well. DYLAN GRICE: Well, something that I discovered when I was at Calibrium, one of the analysts that I had, incredibly switched on brilliant analysts, brilliant investor. He was the one who recently educated me on emerging market banks. He'd come from an emerging market background. I think I had many of the prejudices that we all have about buying. The structurally unsound business models, structurally leveraged business models, you don't make a good business better with leverage that's just buying, always blew up during a crash. Of course, every single one of those things has now a truth to it, but it's not quite the same in emerging markets. RAOUL PAL: It's also what discount you got when you buy them and what the tailwind is? Many of these emerging markets have great demographic tailwinds, for example, and you think of the Middle East for example. DYLAN GRICE: Yeah, no, no, Russia. RAOUL PAL: Russia is the opposite, it's that demographic brick wall. DYLAN GRICE: Real problems, but yeah, they are not bad. Sberbank is something that we own personally in our own portfolio, but in terms of what I was saying earlier, I knew this business, I knew this company and I've been invested in this bank on and off for several years now, ever since the crash in late '14. When you said you should be buying what you know here, and you should be doing your work. Some of the other things that I've actually-- one of the things that I think we did quite as we pivoted for value investors, we actually got quite bullish on tech and stuff some time ago. We got comfortable to the idea that things which are optically expensive are not necessarily intrinsically expensive. We then get some good-- we did quite well with some tech names and some growing names effectively. Effectively, we're buying some good stuff. I think that some of those names just got absolutely smashed, and they are now penetrating it, but not necessarily the headline, Facebook, Amazon, and Google, but you could do the wrong-- I said booking.com, I think that's a very good example of a company with just absolutely bulletproof balance sheet, bulletproof as bulletproof as you get a business model, just rolls off cash, dominates its market and it's still getting double digit growth, and it's still would be around when this corona thing wears off. Again, I look at that, and I can see, on a proven case, I can see double digit returns on a 5- to 10-year view. I think more likely, you're pushing 20% returns. I think when you're looking at some of these names, some of the things that-- I say that's not CLO-- RAOUL PAL: Sorry, when you say 20% returns per annum, you're talking about that over a period of time? DYLAN GRICE: Expected annual return of about 20%. I think I've talked-- for select names, I know I'm looking at 10% to 20% I think, but that doesn't mean that in six months' time, there won't be an expected return of 30% or 40%. It makes sense to buy them now. It makes sense to see actually, that valuation works from me here, and therefore I'm actually, okay, yes, I'm scared about how far this goes. Yes, I'm scared of a credit event. Yes, I'm scared that actually when the shit really hits the fan in the US, there's going to be mass panic, I get all of that, but that's still enough for me to be doing the right thing. RAOUL PAL: But that works PA, and it works in a family office but in an asset management business, that doesn't work. Because most people can't afford to take pain for a period of time. Pain is, as we know, all of the greatest macro traders in the world can take extraordinary pain because what they're looking at is the risk versus-- they already understand that, but the average investor invested in an asset management firm who's taking bets like that, it's hard to do. How are you thinking of that? DYLAN GRICE: Well, we haven't got our asset management business set up yet so it's very easy for me to talk about it before you're actually doing it, but I think what we are in the process of building is a very diversified fund of funds. We will be looking at fundamentally, the best asset classes here. Equity will be a very small slugger there, probably less than 10%. My partner in this is at RannTech, so he will be doing a lot of the quant and helping with some of the credit, but we will also be spending a lot of time on I think more niche areas of credit, more niche areas of the loan market. Some of the different-- the insurance market is-- the insurance market is older than the equity market, phenomenal opportunities in the insurance market, whether it's catastrophe, whether it's longevity, and whether it's mortality or morbidity. There's all sorts of very, very unique return streams that you can pick up with varying degrees of liquidity. In a situation like this, I think the answer is you don't just want to hedge your return profile, you've certainly got genuine correlation. By the way, having like a portfolio of developed market equities and emerging market equities, that's not a diversified portfolio. That's just an equity portfolio. Then if you put 60/40 so you get 40% bonds and you still got basically an equity portfolio. That's no diversification. If you want real, real, real diversification, you have to just move completely away from equities. That's it. That's one of the things we're doing, but the other thing that you have to have diversification of is not just the return stream, it's the liquidity. You can't have-- it depends, if you've got, say, a very-- suppose you're investing in a bunch of different managers who do lots of different things. They're doing quite esoteric things. They need time, you can't just redeem on them and say, I need more money at the end of the month. They need 12 months to get your liquidity back. If all those managers are-- then you've got 12 months, effectively, your fund will be offering 12-month liquidity because the managers that you're invested also often want liquidity. The problem is in a situation like today, there's absolutely nothing you can do. You can't take advantage of any of these dislocations because you have no liquidity in your portfolio. What you want to do, you have to do is diversify your liquidity profile as well. If you've got some uncorrelated assets, can also be very illiquid. Two good examples would be systematic traders, quant traders, transports or mean reversion, wherever they do them, and catastrophe bonds. Catastrophe bonds obviously doesn't correlate with the broader equity market, but you can get rid of these things in a couple of weeks' time. Here are two sources of liquidity, that if they're doing the job properly, and actually catastrophe bonds absolutely have quant doing what they usually do, you would have firepower, you'd have liquidity to allocate to some of these dislocations, whether they were in CLOs or some of the madness gains in unit trusts markets, et cetera, et cetera. It's not just about diversifying your return stream, it's about diversifying your liquidity profile, too. RAOUL PAL: There was one area I still want to talk to you about because I know a lot of the people in Real Vision have looked at it, we've had various people on which is uranium, just love to get your updated thoughts of where we are with that. DYLAN GRICE: We've actually just invested a bit more in that idea. It's something that we came across a few months ago. I'd heard about it, I haven't probably looked at it. I spoke to the guys at Sagra, I spoke to Adam and Arthur and really spent a lot of time with them. They talked me through it, did some reading, and it's just such a no-brainer. Nuclear is a no-brainer to me. I thought that nuclear was, well, I still think that nuclear is a no-brainer. That's the first thing. What does that mean for uranium? I thought uranium was very, very attractive late last year. I think very, very clear deficit in the market. Since then, we've actually seen-- we were seeing already a lot of main shutdowns and mothballing capacity, and we've just seen chemical shots in [indiscernible]. I think we saw another big shutdown as well. I really feel uranium is-- I think this would be more event driven and I would view this more in terms of the optionality. I can look at uranium and see a five to 10 X over the next few years here. I think this is just a great time to be investing in some of these things, again, do you know how to do this? Do you actually know how to value a mining company? Do you know how to value a mining junior or explorer? Either you do it, which is great. You go and do it, or you don't? In which case, find someone who does. Someone somewhere should know what they're doing. RAOUL PAL: Yeah, sure. I was. Recently, I was short the HYG just because I wanted an easy way to-- and then it felt not bad, and I made a bunch of money in it. Then I asked myself, the question is, do I even know what's in it? I'm like, well, at this point, I'll have to leave it to somebody like Dylan who's going to do the homework. That was my macro view, is this is probably going to fall. Now, it starts to give it to somebody who actually going to do the work to know whether I'm stupid by doing this or not. You can take opportunity without being deep by having a view, like you're saying your clear view is nuclear is the answer. Therefore, is there an opportunity to take that bet that's cheap? Which probably is. Then after that becomes complicated is how do you structure a trade like that? DYLAN GRICE: Well, that's right. I think, again, I should say if you don't know how to do that, find someone who does. If you're going to find someone who does, you've also got to know how to spot someone who is legitimate when they say they know what they're doing, versus someone who is not legitimate because nobody-- if you sit in front of a fund manager, you're not going to find a fund manager that says I'm Mr. Average. I don't really know what I'm doing. We don't pay that much attention, frankly, give us your money and we'll put it to work and fingers crossed. You never hear that. Frankly, that would be the correct answer for a lot of them. You have to, yeah, there's no substitute ultimately for doing your homework. If you're going to get-- RAOUL PAL: I do think that it feels to me that the future of this industry is a rejection of asset gathering, and more about specialist expertise. DYLAN GRICE: Yeah, I hope so but I'm not so sure. I'm not so sure. Because I think people have very, very short memories. I really think people do case, people just chase returns ultimately. It's such a strange industry, finance is such a strange industry. If you're making mobile phones, then obviously you want you want customers or prospective customers to look at that mobile phone, and to hold it and to build connection to it and to enjoy the experience of touching it and really feel connected, really, really like this mobile phone. Statically, this is a beautiful thing. That's what mobile phone manufacturers do. That's what car manufacturers do. Fund managers, pretty much everything. If you're an investor, if you've got a portfolio that really looks great, and it's got all the stuff that everyone loves, it's going to be a disaster. The only portfolio that's really going to generate decent returns is going to be one that makes you want to puke. That doesn't sell, that never sells. No one wants to puke when you look at your portfolio. I just think this is a structural quirk of the industry. It's just like-- RAOUL PAL: I can't wait to see how you're going to market this fund. Well, I've got a portfolio. It's going to make you want to feel sick. You're going to call me an idiot but then you're going to give me some money. That's the pit, right? DYLAN GRICE: Yeah, you could be my hand. Thought this through. RAOUL PAL: It's right, you've got some charm. You'll get through. If you use your Scottish accent broad enough, they won't understand a word you're saying if you want it. Thanks for that. The next bit we're going to do is we're going to do a series of fixed questions. We've done this before on Real Vision, I think with you in the very early days. It's called the Intersection. Is there one person living or dead you'd want to interview more than anyone? If so, who and why? DYLAN GRICE: It would actually be Jim Simons. I was going to see Richard Feynman who is a hero of mine. In many ways, Feynman had a bigger impact on the way I think of investing than any investors. I said, I really think that science is-- I think that science and investing are actually cousins. I don't think that there is far removed-- in principle and in essence, they're not so different. Subject matters are radically different but in essence, they're not different. I wouldn't be able to have much of a conversation with Feynman about theoretical physics. I don't know if he'd be that interested in finance, whereas Jim Simons is both. He's a brilliant guy. He had a brilliant career as a mathematician. He won the, what was the-- the Veblen Prize for geometry, age under 40. He assembled a team of code breakers for I think the NSA, and then he's assembled this team of code breakers who have cracked the market. This is a guy who does understand finance. He doesn't understand markets, but fundamentally, he understands science and I just think that that would be a mind blowing conversation. RAOUL PAL: Yeah, that's right. Okay, next question. What is the book or books that have changed how you view the world, and how so? Also, what are you reading right now? DYLAN GRICE: The books that really change the world indeed, for me, these are always funny ones because something that had huge-- books that have a big impact on you are really very much a function of where they hit you. RAOUL PAL: Absolutely right. DYLAN GRICE: You can see well, for me, a book that had a huge impact on me was Taleb's Fooled by Randomness. I'm a huge-- I know he's not everyone's taste. I'm personally a huge fan of the guy. When I flipped through that book, and I find that there isn't really much in any of the chapters that surprises me or that I didn't know, or that I don't know, and not anymore. It was almost like when the first time I read it, a light went on. The fact that I can look at it-- I've been in this dark room and all of a sudden, somebody just switched the light on. That's the central foundational role of irreducible uncertainty. This is central to everything that I do as an investor and everything that I think of as an investor, and I can trace that back to Taleb really. The fact that when I look at the book, and I almost-- there is nothing left to absorb. I think I've absorbed this all so watch, I think that's testament to just what bigger impact to add on. RAOUL PAL: Yeah, and it could've been a better book for now. I suppose a Black Swan and a half. DYLAN GRICE: Yeah, completely. One month, what won't change in one month. It was just [indiscernible] now. RAOUL PAL: Okay, next question. As an individual and as a leader in your field, how do you stay engaged and relevant in a world that's moving so quickly? DYLAN GRICE: Well, engaged is easy. Relevant, geez, let's talk about-- you just hope I guess. How I stay engaged-- RAOUL PAL: Basically, how do you stay on top of where we are in the world? We have a lot of people who get left behind. DYLAN GRICE: I think from an investment perspective, this is again, I need to invest, I need to be investing. I can't just be reading about investing, reading about the newspapers. I have to be a participant in the market, so I know how to feel it. When the market's going down, I have to feel that pain. I have to feel that anguish and that anxiety. It's almost like I have to have that connection to what's going on. That's how I stay engaged. That's how I stay curious. That's why I just have a daily flood of questions that don't have answers to, I want answers to, and therefore, that's how I spend my day trying to answer as many of those questions as I possibly can. How do you stay engaged? Just by being embedded. That's it. I think more broadly, kids are great for making you realize how quickly the world is changing. I've got a couple of kids and they just do-- they do and see hilarious things, and I think that that keeps you engaged with the broader world. In terms of staying relevant, yeah. RAOUL PAL: Well, running a portfolio keeps you relevant. Because we are basically saying the skin in the game. DYLAN GRICE: Yeah. Oh, for sure. This is, again, this is central, and this is an obviously that's a big Taleb thing, but another one of my view is Warren Buffett, always, always getting his own ticker, always-- I may be wrong. I could be very, very wrong, but I'm not going to sell you something that I'm not going to do myself. I think that that's almost as-- that's a bit as good a safety valve is that you're going to get with any manager. Question number one, are you invested in this portfolio as much as you expect me to be? When you hear-- [indiscernible] has got a couple of million in it? The answer is no. RAOUL PAL: Okay, next question. Some of our guests can tie their success to one key breakthrough. Did you experience a tipping point in your career? DYLAN GRICE: Yeah, actually. I think the biggest and maybe it was thanks to Table, I don't know, but I was sitting on the prop desk at Dresdner. I'd come down from the economics department. I was the bookish academic, didn't really know much, which is all true. The other guys on the desk were seasoned traders, options traders, options market makers, they've cut the teeth in there in the open outcry system of life, cash equity market makers, risk ARB traders, investors I should say, so I really was the outlier. It was my job just, as I saw it, to shut up and listen and learn. We had this conversation one Friday morning about the article in payrolls and what we thought the payrolls were going to be. We haven't really long involved debate and it basically went on like this. I think we're going to be charging 50, I don't want to be charging 20, I don't want to be charging any, what do you think, Dylan? You're the economist. I've not got the faintest idea. I really, genuinely, truly don't know. Oh, you must have a view. Okay, well, what is this in the screen? What's the market expectation? Okay, that's my expectation. You don't have a view? You're in the wrong job, man. That's what the guy sat next-- who's really, really lovely guy, a good friend of mine. He said, you know what, you're in the wrong job, man. I thought, yeah, I'm in the wrong job. I honestly, I don't know. Then I had this second thing, which is, you don't know either. You don't know. Therefore, you're in the wrong job, find your own admission. The difference is I know, I know I don't know, you don't. I think I actually have an advantage. In that strange way, I think I'm on the wrong job. This realization had a very big effect on me, as an owner, I realized that not knowing something didn't necessarily make you fundamentally stupid, lots of other things make you stupid, but not knowing why the payrolls are going to be in the Friday when everyone else thought it did was actually okay. I think this was the a very big epiphany for me. RAOUL PAL: Who is a person you admire and why? Well, we probably talked about this with Richard Feynman. DYLAN GRICE: And Jim Simons. Who do I admire? Lots of people I admire for different reasons. I admire Alex Ferguson, the Manchester United manager, who I think was just a brilliant, brilliant guy and he wrote a book called Leading. There are so much lessons in that book about how to manage a team, like assemble a team, how to manage Eagles. How to manage a bunch of people who, frankly, are much better doing what they do than you ever were or that you even are. I think it's a really important principle. Certainly, in my career, when I started my career, it was all you wanted the best mentor you could possibly have. I was quite lucky, I had some very good mentor named Albert Edwards, who you know, a great soldier, but I've known him for years before then. He's always been a very good mentor for me. There comes a point where you don't have some-- the education doesn't necessarily come from the guys above you. It comes from the guys below you. It comes from the guys that you hire. Because they're much better than you are. They're much smarter than you are, and they can push you and you start to learn from them. I think that this is very much a theme in Ferguson's book, even though they're much better than you in lots of things, you discover there's some things they haven't quite gotten yet. This was a-- he built a club, he wasn't just a great manager, he built a club, and they did fine, but I think he's just an intriguing guy. I'm reading the book on the factual biography of Margaret Thatcher. I think she's also a very intriguing and passionate, very intriguing politician. In many ways, the politician I hate, which is a career politician. All she ever did was politics. I have a real suspicion of people who've never actually done a real job in our lives other than politics. There's always an exception to that, and one exception she was, so she's fascinating character as well. Yeah, I obviously gotten [indiscernible] there. RAOUL PAL: Okay. Final question. This is probably-- you probably hold a few of these. What view do you hold that is most controversial in your professional life? DYLAN GRICE: What view is most controversial in my professional life, God, that's a tricky one I don't know. At the time I felt the most embarrassed for thinking something wasn't necessarily, it was probably to do with the context. It was during Brexit. I voted for Brexit. Okay, I was in favor of Brexit. I was one of those idiots who didn't know what he was doing, who was probably xenophobic and just didn't understand, needed to have a rethink. Look at what the economists still say, it's 6%, that's much poorer, we're going to be working together, are you? I think I should see I am-- it was like a limbo call for me. I don't hate the European Union at all. I can certainly see lots of benefits to stay in the EU. It was probably 55, 45 in favor of Brexit for me. For reasons, really to just to-- we live in Switzerland, I can see how distributed power works. Decentralization works. Being used to the opposite of decentralization. The idea of taking some decision making power from Brussels to London, I think it should go from London to the regions, that should be the next step. That was basically all. That was it. I thought it was a reasonably-- I didn't realize it was such a controversial view. I happened to be at a conference, a medical conference with lots of people who you will know, and in Lake Como, and on the day of the vote, and I think the odds going to bed that evening, where the bookies odds were like at 13%, 1-3 in favor of Brexit. People were talking about it, but it's just an assumption there, of course we're going to vote to remain. Then obviously, that's not what happened. The next morning, the whole place was just in shellshock. I hadn't really realized just how remain-- because this was very establishment, there were some very establishment politicians, policymakers, and large hedge fund managers and asset managers and I just haven't fully realized that the strength appealing in favor of remain and literally, in about 100 people I was the only Brexit here, or the only one stupid enough to say so. My God, I just got an absolute, God, it was actually vitriolic at times. I was like shocked there. I was an idiot. I was total idiot. What the hell, it was all my fault. I was the one who came at all, I really feel like a dummy here. I really got this one watching the camera on the show. RAOUL PAL: Yeah, exactly. Dylan, look, fantastic to get you back. It's been a long time and far too long. I think people are going to love this. Lots of stuff to chew over. Now, where do they find you to-- because you launched a the research service, how do I find it? Find you, website, anything? DYLAN GRICE: Well, probably the easiest way to get me is on Twitter, which I sporadically, but I spend some days engaging and then the other things, but I met some great people actually on Twitter when we really started using-- RAOUL PAL: That's just amazing. That is, if you ask me the question of how do I stay relevant and engaged? It's Twitter. It changed my life. DYLAN GRICE: It's great. There's some just some really, really smart people and I think really some complete dummies as well but that isn't going to make it [indiscernible]. There's some incredibly smart people. Connecting and reconnecting with some great people on Twitter. I'm on Twitter @dylangrice, and also the company website called calderwoodcapital.com and then the people who are distributing my research is Eric so if people who know Eric or who have a relationship with Eric, then they can get me on that as well. RAOUL PAL: Perfect. Dylan, good to speak to you man. Best of luck. DYLAN GRICE: Thanks a lot. RAOUL PAL: Take care and I'll see you soon. DYLAN GRICE: Cheers, man. JUSTINE: If you're ready to go beyond the interview, be sure to visit realvision.com where you can try real vision plus for 30 days for just $1. We'll see you next time right here on real vision.