The Big Picture

Transcript: Jose Minaya, BNY Global Head of Investments and Wealth

 

 

The transcript from this week’s, MiB: Jose Minaya, BNY Global Head of Investments and Wealth, is below.

You can stream and download our full conversation, including any podcast extras, on Apple PodcastsSpotifyYouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.

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This is Masters in business with Barry Ritholtz on Bloomberg Radio

Barry Ritholtz: On the latest Masters in Business podcast. Wow. Jose Manaya runs wealth management services at BNY Bank of New York. Incredible Bank, incredible history. They’re literally the first bank. BNY is the first bank in America, the first publicly listed stock on the New York Stock Exchange. Not only do they have 2.2 trillion in assets, but they touch about one out of every $5 in assets globally. They touch, you know, 60, $70 trillion worth of assets, whether it’s through their clearing, their infrastructure, their custodianship. They’re just a massive bank. The oldest bank in America, the first bank in America, formed by Alexander Hamilton. Jose, has a fascinating background and a fascinating career. As both a chief investment officer and CEO few people are better positioned to talk about not only what’s happening in the state of wealth management in the US and globally, but what’s coming next, what, what digital technology and tokenization means for asset managers, as well as the impact of AI on how we’re all gonna deal with our, our dollars. I thought this co conversation was absolutely fascinating, and I think you will also, with no further ado, my Master’s in Business interview of B Y’s, Jose Manaya.

So let’s start out talking about your background. Bachelor’s in finance from Manhattan College, an MBA from Tuck Business School at Dartmouth. What was the career plan?

Jose Minaya: You know, I, I, my career plan was always a work in progress. I, I, I always say I almost had like, a little bit of a Forest Gump approach to, to starting my career. I first, I’m a first generation American, so, you know, I grew up in Washington Heights to a Dominican, in a Dominican family, Dominican parents. So baseball was big, my life. And for a while there I thought I was gonna be a pro baseball player up. What’d you play? I was, I was a pitcher. Did pretty well, did pretty well up until the point that I didn’t.

Barry Ritholtz: High School or college?

Jose Minaya: High school and college. Yeah.

Barry Ritholtz: I pitched in high school, no curve ball. That’s the end of your pitching career.

Jose Minaya: Yeah. I, my whole thing is if I threw strikes, I did pretty well. Right. If I didn’t, I was gonna get in trouble. So

Barry Ritholtz: You a little control issue, is that the problem? Yeah,

Jose Minaya: A little control issues. Yeah. It’s

Barry Ritholtz:  Hard to throw both hard and accurately.

Jose Minaya: Yes, it is. Yes, it is. It’s like, like everything else, it’s about trying to find the balance. Right.

Barry Ritholtz: So that’s right. So you mentioned you’re a first generation American. How did that affect you? What, what, what does that do to your worldview, your work ethic? How, how does it affect your outlook and, and career progress?

Jose Minaya: Look, I, I think being a first gen and, and just kind of my, you know, the neighborhood I grew up, which I often described to people, you know, if you’ve been to Chinatown, well, Washington Heights, when I grew up there was the Dominican version of, of Chinatown. But look, I mean, I grew up around strong family values. I had a great home life, very privileged that way. Strong work ethic coming in. But I, but I did, but I did grow up in a bubble, right? So one end, what I took with me when I exited or left that bubble was work, work, work ethic, was kind of really understanding relationships and, and, and that, but then when I left that bubble, it was more defined by, okay, I was in different audiences. I was in, in situations where then more acclimating was kind of more my, my focus and my goal for early part, early part of my career.

Barry Ritholtz: Really, really interesting. You come out of Tuck, you end up being an analyst. Tell us about the early days post, post grad school.

Jose Minaya: Yeah, I think post grad school, I, I was still trying to figure out what I, what I really wanted to do. Because, you know, if I even go pre, you know, coming outta undergrad, you know, I, I had a finance degree, I was good at math and, you know, I asked people, what are you supposed to do with this? And people mentioned Wall Street and firms like JP Morgan and Goldman Sachs. And I was fortunate enough to get a job at JP Morgan. I went, everyone was taking a gmat. I had no idea what a GMAT was, but I figured I’m supposed to take it as well. And I went to grad school and then coming outta grad school, I went back to Wall Street. I not, not necessarily thinking that’s what I wanted my career to be, but I didn’t really have a plan for anything else.

I think as I started really searching around what I wanted to do and, and, and instead of advising people kind of doing things that were gonna be there for the long term, build something, you know, I found my way into the buy side. Right? And then my first job kind of in investing, working at a IG Global in investment group. I think today it’s called PineBridge. But that was my first real, like, investing job. And, and even there, finding my way, I started out in equities and I was like, okay, I like this. But I felt like, you know, the other side, as I ran into people on the bond side and, and, and, and private credit, I, I felt that that was more kind of cashflow based versus I used to get anointed where my model, I felt like my models were right, but the market’s never cooperated with.

So it didn’t matter that I was right. I felt more at home in that environment where it was more around, okay, how, how do I judge the downside? How do I kind of really analyze cash flows? And, and then I found myself on the buy side and I found myself as a private credit manager. I think from there, interestingly enough, I said, Hey, this, I found my thing. I love doing this. And I always found myself in situations where I did what I did really well, and somebody always asked me to do a little more. And in that little more, it was always kind of like extending myself and say, okay, am I still the SME or am I now gathering and, and doing different things. And then ultimately, especially when I was at TIA, it was this idea of like, oh, you know, should we go into agriculture? Should we go into commodities? And I was like, well, here, I’m a kid from New York City. I don’t really know anything about agriculture and commodities. But you know what, I, I kind of dived in and said, this is interesting. This was the other thing that took me to another place in my career that, that I’d say I took another people viewed as a big risk. ’cause at that point, you know, I was managing about a $15 billion private credit portfolio back then. That was a, that was a pretty major thing.

Barry Ritholtz: It felt like a lot of money

Jose Minaya: And it was and is, and I, I kind of made a decision from doing these kind of nights and weekends on this project of going into farmland. I made a decision to say, you know what? I’m gonna leave all this behind. I wanna go try to build this. And even my chief, the CIO at the time said, are you sure you want to do this? Because, you know, maybe I’ll tell you what, what don’t you, why don’t you give this a run? But you know what, we, we will, we’ll keep your job warm for you here. I think he figured he’ll come running back in six months, give

Barry Ritholtz: This a run, meaning the CIO position?

Jose Minaya: Meaning running a farmland fund. Oh, okay. Yeah. And, and you know, I, I, so I, I went out and said, oh, I wanna do this. We ended up becoming the largest farmland fund institutional manager for farmland assets globally at, at the time. And, you know, one of the things that my philosophy in doing these things is, you know, taking the confidence to always kind of try things that get me excited and, and that I feel passionate about. But I think throughout my investing life, you know, one mantra I’ve always had is, you know, you gotta be really good at knowing what you don’t know. And that, that comes with being more humble. That comes with kind of asking a lot of questions, not being intimidated by bringing people around you that are smarter than you. ’cause I was like, Hey, I could understand people, I can understand math now.

How do I fill in these blanks? How do I get people around me? They’re gonna give me kind of the knowledge that I know I don’t have. And that, that career permission was from farmland. They said, Hey, wow, you did an amazing job. Can you take real estate? Can you take natural resources? Can you take all of private markets? And then ultimately, can you be the chief investment officer? And then growing that into a asset management firm. And what I realized was that what I thought my passion was, was in investing, but the real passion that I really found was, was in building, building things, you know, managing teams and bringing teams together.

Barry Ritholtz: So, so I wanna circle back to building what you did at Nuveen. How do you go from JP Morgan to a IG to Merrill? What ultimately leads you to Nuveen?

Jose Minaya: You know, what leads me to Nuveen is just, it, I always say like, picking up the breadcrumbs, right? I was, I was on a journey of really kind of, of searching again, what’s my passion? What do I want to do? I was very fortunate, you know, here I am, I’m sitting on at a job on Wall Street at JP Morgan. Very fortunate to have it, but I couldn’t see myself doing that job for 20 years. Then I’m like, oh, I’m fortunate to get a job. I’m the buy side. And I’m like, okay, this is great. I’m at a IG, you know, it’s a terrific opportunity, terrific firm. Yet there’s still that thing that I’m kind of still trying to find that feels like, Hey, what’s really getting my juices going? And, you know, it was always that search for, for that thing that kind of made me get up early in the morning. And when I ultimately landed at Nuveen, which is part of TIA, that was that role. And I ended up being there 20 years. And then, and I, and I will tell you the large, the the longest role I’ve ever had in my life, in my entire career was my five years or so. As, as my role as CEO there, 20,

Barry Ritholtz: Even 20 years is a long time in the modern world to be at any one firm. It seems people don’t do that anymore. What was it that kept you there? It sounds like they kept piling on new challenges and really keeping you engaged.

Jose Minaya: Yeah, that’s exactly right. Meaning I like the longest role I’ve had in my career is the five years I was the CEO part of that, every three, four years, someone was giving me something else to build. I always say I, I get itchy. I maybe I’m not the best steward in the world, but what does get me excited is, is building things, kind of building new teams, you know, the challenge of kind of like growing a capability. And I got to do that. Over the course of 20 years, I’ve been extremely blessed. And same thing in moving to my role now, it’s, it’s a tremendous opportunity. And, you know, I could still say that 20 plus years, I, I still get excited every morning to kind of go to work. When,

Barry Ritholtz: When you say building new teams, give us an example of some of the sort of teams you helped build that kept you occupied for 20 years.

Jose Minaya: Sure. I mean, one, I I, I mentioned the farmland example. That was a complete startup from, from scratch, from $0

To kind of go in and building a team, you know, I’m very proud of what we did in private credit. You know, we, we started the Churchill group with, you know, again, that was finding the right people, finding Ken Kinsel, who was a tremendous leader and had a team with ’em. And we started with Zero. Today, that broader platform at Nuveen is almost, you know, call it just short of a hundred billion in, in private credit. So there’s multiple examples like that where the, basically the blueprint was either we were doing an acquisition or we were finding a team, and we’re saying, okay, we’ve got the right makings here of a team. How do we give this team the right tools and go out and try to grow, grow a platform?

Barry Ritholtz: So you’re no stranger to alternatives. We, we’ve talked about farmland, real estate, private credit, private debt, natural resources. What is your view today on alts? What do you think about, what kind of feels a little bit like a land rush? What, what’s going on in the world of Alts today?

Jose Minaya: Yeah, and you know, it feels like a land rush. But I, I will tell you that this has been building for some time. And, and, and the interesting thing is, you know, if I go back 10, 15 years ago, my pitch talking to clients around alternatives was one that was largely academic, right? It was this idea of diversification.

Hey, by the way, I know you haven’t seen inflation in 20 years, but it may show up. And if it does, are you protected for it by the way? You may be going to a market where there’s a lot more volatility. Have you thought about that? And then also, hey, have you thought about yield? You know, you know, there’s ways to kind of think about principle protection in your portfolio, and then yield and alternatives. I would say it’s just a way of bringing in the right correlations into your portfolio. And the, and, and some of the biggest alpha in alternatives is the lack of access,

Barry Ritholtz: Meaning the illiquidity, you can’t sell in a panic because the market’s off 8%. Yeah.

Jose Minaya: And in many ways, you know, you’re, you’re going to kind of structure and get a return. You’re looking for, because the, there, there, you need to have a specific skill or access point to get those assets so that maybe the markets are a little bit less efficient. You know, the interesting thing is today that academic conversation has turned into urgency, right? So now, while markets have obviously continued to be at all time highs, I think individual investors have felt what volatility feels like, whether that was coming out of the global financial crisis, whether that was at a COVID and the, in the, in the pandemic. We have felt and seen a lot of significant volatility.

Barry Ritholtz: 2022, first time in 40 years, stocks and bonds, both down double digits. Like people seem to think volatility gets conquered every few years. And whenever there’s any sort of complacency, the market says, now’s the time to teach people. Volatility never goes away.

Jose Minaya: And, and throughout that, throughout that time period, you’ve also have seen the growth of index funds, right? So also on top of that is this idea of like, you know, I always say the world’s become more commoditized. When I entered the industry, you differentiated yourself by picking better securities in the next person and driving returns. Then all of a sudden there was a focus on cost, believe it or not, once upon a time, you know, fees, nobody paid attention.  Nobody paid attention to fees. I think then it was, well, no, you’re gonna compete on fees as well. And then it became the race to zero. Today, you know, investment performance is obviously extremely important, but it’s table stakes costs, were all, we’re, we’re all kind of basically at the bottom end of that curve for cost. So now it’s, it’s more around what are the outcomes you’re gonna deliver to someone.

Technology is a, it’s a big component. It is the flexibility that you offer, you offer clients, but it is ultimately about what is the outcomes you’re gonna get to clients. And that 70 30 portfolio, that passive fund that said, Hey, you’re in a target date fund, you don’t have to do anything. Just sit back and it all adjusts and drives kind of the returns you need. Well, in those moments where correlations go to one, it didn’t feel so good. That’s right. It didn’t feel so good. And I think now it’s, there’s more sophistication in terms of how you package, you know, solutions. More sophistication now on the need to get alternatives to to, to clients. I think these things all now, I think again, what was an academic conversation today is, is an, is an urgency.

Barry Ritholtz: So the phrase I’ve heard from a number of people over the past year or so has been 70/30, 60/40. That’s the old way, the new way is 50/30/20. Are you in that camp?

Jose Minaya: Yeah. Look, I think 50, 30, 21. 30, 30. Look at the end of the day, I, I always say it’s not really about whether you should be in the 50, the 30. Ultimately it starts with a conversation around what are the outcomes you’re looking for? What are your needs, right? These, these markets that when you think about alternatives, by the way, these are not get rich quick right? Schemes. These are not like, oh my God, we need alternatives. ’cause there’s like this outsized return. In many cases I’ve mentioned to you farmland that was a four to 6% return market, but extremely consistent and

Barry Ritholtz:  longtime lockups, right? ?

Jose Minaya: Yeah. And, but it gave you a certain correlation. So yes, fit like all these different mechanisms. At the end of the day though, what it’s really all about is what are the outcomes you’re trying to drive for your clients? And, and, and what is the sophistication we have and the ability to construct those portfolios. And the most important thing in constructing those portfolios is do you have access to a broad array of capabilities? Because the more access you have to different types of assets, the better the outcome is Portfolio theory 1 0 1.

Barry Ritholtz: You led the company through a big expansion through the COVID Pandemic, and then you helped expand the entire digital engagement. Tell us a little bit about what you put together at Nuveen.

Jose Minaya: Well, I think I get at Nuveen if, if I, you know, was quite a 20 year journey. ’cause I joined when it was basically just the investment team for TIA.

Barry Ritholtz: That was right after the dotcom implosion ?

Jose Minaya: That was around oh four actually. Yeah, I really started in oh five. And really I was just an, it was just an investment team. Like I said, I joined as a, as a fixed income portfolio manager at the time. We’re managing money for about a $200 billion general account where everything was based in New York City.

Barry Ritholtz: When you say general account, you’re managing it on behalf of Nuveen, not specific clients.

Jose Minaya: I was managing on behalf of the, the balance sheet of tia, which is an insurance, right? Which is an insurance company. So it largely just, that was really the structure. We nuveen we had not acquired Nuveen yet at that, at that time. But from that 200 billion you fast forward to today and what I was there to help build and it became a trillion dollar wow. Asset manager one where it still managed approximately $200 billion balance sheet, but then it raised another 800 plus billion in just outside capital. And these are sovereign wealth funds, wealth platforms, retail. And it grew to, you know, about almost two, two and 250 billion in alternatives as well. So pretty diversified diversified shop, which now you’re seeing a lot of firms trying to kind of capture that same, not just scale, but diversity in, in their business. Let’s

Barry Ritholtz:  Talk a little bit about real assets that you’ve had a lot of background in. Tell us about real estate, agriculture, timber infrastructure. Tell us how you built those areas previously at Nuveen, now at BNY.

Jose Minaya: Sure. And I think, look, I think first, if you think about those different asset classes I go back to, these are not typically, you know, strategies that you’re trying to get outsized returns. If they, sometimes they come and they’re very much welcomed. They’re typically pretty, pretty structured transactions, right? Whether it’s buildings with rents, farmland with, with leases infrastructure with kind of 20, 30 year contracts. Often there is a hedge against inflation, whether that is contractual or just by the nature of the commodity. So

Barry Ritholtz: Right, prices go up, land goes up, that follows it…

Jose Minaya: Yeah. So the simple kind of math on these things are, I’m clipping a coupon. So there’s a yield component and it’s a pretty steady one. I I I, I have a gold like protection because if you think about what do I own, I own farmland in, in a particular case, well that produces a, a a need for society in perpetuity. So there’s a certain kind of protection in your principle in owning that. Or, you know, wind farms, just, again, there’s intrinsic value. I have a yield, but it’s usually tied to a commodity. And because of that, there’s also an inflation hedge component to it. And it brings down my volatility because it’s, again, it’s, it’s more of that consistent return profile. So it plays that part in portfolios that it gives a yield, it gives it in a way that should be pretty kind of high sharp ratio, low, lower volatility.

Now today, that market is start it, it’s, it is trying to get into more mainstream. Now if I fast forward to my opportunity going to B and y, now look, I, I had that journey in my previous life. What I saw in BNY is where the industry is going, right? BNY obviously is two times the size of where, where I came from, but it’s also part of BNY, the bank and BNY the bank touches about a fifth, a fifth of the world’s investible assets. So there’s almost 60. That’s amazing. Yeah. There’s almost $60 trillion, call it fifty five, fifty 6 trillion to be exact that the bank is touching. And it’s either managing these assets, it’s either custodying these assets or it’s helping move kind of the financial, the global financial markets around. That is tremendous kind of access points to someone like me sitting as an asset manager, because I’m working at, I’m working at a firm that is one of the largest asset servicers in the world.

It also is one of the largest servicers to wealth platforms. I registered investment advisors. Well, I have a wealth platform. I manage, I manage an investment platform. How do I get advantage of the fact that there’s tremendous technology being invested to, to help serve asset managers. And if I go back to a comment that we, that we talked about previously, which is if the world’s becoming more commoditized, we performance in cost, then what is the difference? The difference in what is the tip of the spear is technology. You hear about tokenized assets, which of which b and y is on the forefront, that’s just about helping clients move money quicker.

Barry Ritholtz: Do define what tokenized assets mean when we’re talking about stocks or bonds.

Jose Minaya: I think we, the, the simplest way that I think about tokenized assets is it’s an ability to, again, be more liquid. Meaning if you were in a t plus one scenario, do you have the ability to be in a T+5 minutes scenario?

Barry Ritholtz: So for, for the lay person, T+1 means you sell something today, it clears tomorrow the cash is in your account. One day later, t plus zero as some people call it, means you sell it and you instantly get the cash. Is that what tokenization does for, for people?

Jose Minaya: That’s, that’s a big component. So that’s creating that liquidity where if you had to wait 24 hours, now you can wait a lot less than 24 hours. The other thing that it helps do is also kind of Dr you’re able to earn a yield on,

Barry Ritholtz:  ’cause you’re getting the cash now for most people one day doesn’t matter. But scale that up to an institution, scale that up to a bank and insurer that day times thousands and thousands of accounts and transactions really adds up, doesn’t it?

Jose Minaya: I mean, scale that to, again, BNY is kind of touching and helping move $55 trillion.

Barry Ritholtz:  So T+0 or T+5 minutes, that’s much better than t plus one.

Jose Minaya: That, and it’s a big difference. And your ability, again, to potentially earn a yield in that process also, right? In that, in that whole t plus one, in that 24 hours, in many cases, you’re not able to earn a yield while that money is clearing. So

Barry Ritholtz: Back in the bad old days when it was T plus three, we were always told, Hey, it takes three days to just make sure there’s no fraud. The right stock is going to the right buyer, the money goes to the right account. And when they got shrunk down to one day, well, technology has allowed us to do this, but we still need a day just to verify everything. What is it that allows us to go to t plus zero? Is it just technology? Tell us how, how that works.

Jose Minaya: Yeah, look, I think techno obviously the blockchain technology is one component. The other component is the fact that, you know, one of the reasons BNY can lead in this area is that it, it, it custodies around 80 plus percent of the digital assets,

Barry Ritholtz: The world digital assets meaning in the world, Ethereum, Bitcoin, any other sort of things like that.

Jose Minaya: And, and it’s one of the largest custodian in the world in general. So clearing something becomes a lot easier when it’s all sitting in inside. I mean, think about a warehouse. If I don’t have to move it from where one warehouse to the other, that makes life a lot easier. So that’s

Jose Minaya: Goes from one, you’re not even moving it from one road to another. You’re just changing the label. Here’s who owns this. Yeah.

Jose Minaya: Now, and again, I’ll tell you, for me it’s, I was having a conversation with our CEO about this the other day where I’m like, one of the other things I love about my career right now, look, it, it’s been a long time since I’ve walked into rooms and I’m learning something. ’cause typically, you know, you be, I was a subject matter or expert. And typically most rooms that I walked into, I, I felt like I I was the expert in that, in that category. I’m not an expert on tokenization. I’m not an expert on, on, on, on custody. I work at a firm that that is, that has experts and, you know, you’re quickly, quickly learning and what’s important there, I go back to, hey, but what I do understand, even though I know what I don’t know, is this matters to my clients. So all of a sudden, if I, if I am trying to think about, hey, how am I pitching my services to clients in Asia and, and around the globe, and I, and I have a differentiating factor, meaning I can help you go to t plus zero, that is a differentiator from a relationship perspective.

00:26:12 And this is what I mean by where today it’s, it’s, there’s so much more consolidation in the asset management industry because scale is important. And why is scale important? Because you then need to be able to service and invest in these technologies to service your client. AI is is a big topic today. And I would, I would, I would argue and say, well, if it’s no longer debatable that AI is here and it’s gonna be disruptive, it’s gonna make a difference. So if you believe that, you also have to believe that the firms who can invest in it are gonna be the winners for tomorrow. Now I, you know, being able to invest hundreds of millions of dollars in, in ai, that takes significant scale, that takes kind of diversified businesses, being able to hire engineers, right? So when I was sitting usually in the role of running an asset management shop, it’s very hard for me to even say, how am I even gonna attract engineers from Silicon Valley? How am I gonna be able to pay them? Well, BNY is a massive tech stack, right? Like they can attract a lot of engineers, they can attract a lot of investment in ai. I just happen to be in that realm, part of that universe, and I’m gonna be able to benefit from, from that technology.

00:27:23 [Speaker Changed] So let me step back a second, because we’re all guilty of using acronyms and even something like BNY, you and I understand it, but perhaps the listener needs to learn a little more. BNY is Bank of New York. It’s been around for how long?

00:27:40 [Speaker Changed] 240 plus years. I think I wear 2 41, 2 41 9.

00:27:44 [Speaker Changed] So, so more than almost two and a half centuries. More than two centuries.

00:27:48 [Speaker Changed] Well, I gotta add to the, ’cause I’m always fa I I will tell you, even as I joined BNY, there were things I did not know, you know, obviously it’s, it’s the first bank in the United States. It was the first bank to issue, the first loan or warrant

00:28:00 [Speaker Changed] Begun by

00:28:01 [Speaker Changed] Alexander Hamilton. It’s the first company traded on the New York Stock Exchange. Amazing. It was the first first public company, right. You know, our first clients of the, of the bank where George Washington and Eliza Hamilton and, you know, so it’s, it’s just got incredible, incredible history,

00:28:18 [Speaker Changed] Unbelievable history. In addition to all that history, BNY is also affiliated through ownership with a lot of really well-known names within finance. Tell us about some of the other divisions that maybe people will, will be more familiar with those names.

00:28:35 [Speaker Changed] Yeah, and I’ll tell you, I think this has a lot to do with kind of the recent performance you’re seeing about the firm because it’s unlocking what we would describe. As, you know, BNY is a platform operating PLA has a, has a platform operating model, meaning it has multiple platforms, you know, of course it has an asset manager and it has a wealth business, as we said. It’s got a two, $2 trillion asset manager. It’s got about a $350 billion private bank wealth platform, by the way. It also owns Pershing and

00:29:04 [Speaker Changed] Pershing Giant Clearing Shop. And,

00:29:06 [Speaker Changed] And that captures around almost 3 trillion in, in advisors, advisors capital that it’s servicing through a technology and a service and a service platform. It, it’s has an asset servicing arm. And that asset servicing is serving both asset managers and asset owners doing things like custody fund accounting. It, it, it, it has a treasury component as well. You know, the other interesting thing about BNY is it clears all the treasuries of the United States. So, you know, it’s a gsib it’s a, it’s a significant bank and plays an important part in our financial, in our financial system.

00:29:45 [Speaker Changed] Hmm. Really, really interesting. So tell me the story of how you move from Nuveen to your role as global head of BNY investments. You’re doubling the size of the assets, you’re responsible. Have you approached this change? What, what sort of challenges did you face?

00:30:03 [Speaker Changed] You know, I, I think every challenge that’s kind of a, that’s really attracted me, including what, you know, what kept me in my previous role and, and the different roles I was in, it was the opportunity for growth, right? And I think looking at, at BNY and, and seeing where I believe the industry is going, just saw a tremendous opportunity of what is a $2 trillion shop, you know, should, should easily be a $4 trillion shop, right? Wow. And you think about the ecosystem that, that we play in within BNY, right? As I mentioned, you, you know, we, we manage money for other people. As an asset manager, we manage money also as a wealth platform for, for families and individuals. Yet we also s have, we also service other wealth advisors through purging, but they’re also are the clients of the firm. I’m an asset manager.

00:30:56 A lot of my competitors are clients of BNY as well. So, and then you think about the technology that it takes to do all that and, and, and grow that technology stack. I I feel like a kid on a candy store for two reasons. One that’s sets a tremendous amount of infrastructure and capabilities that are there that I should have a home field advantage to. The other thing is that has become a lot easier in my job is, you know, when you touch a fifth of the world’s assets, most most people are your clients. So getting, getting, having a conversation with potential clients is very easy to do. A lot of what you’ve seen, the, the, the recent success of BNY, and I think you said this earlier, is a collection of a lot of different things that were either acquired or, or built is that, but it was also a very siloed organization for a while. The ability of having that cross connection. If I look at a world that AI is gonna be important, you know, being able to touch your clients in multiple ways and have broader technology, I am sitting in that, in, in a spot where in those, all those platform operating models, I’m two of those, but I’m, I’m fitting in pretty well. I’m trying to take the advantage of the other five or six that are around me. A great example of that, of what that I is Archer. Archer is, is

00:32:14 [Speaker Changed] That’s a digital platform.

00:32:16 [Speaker Changed] It’s a technology platform for SMAs, right? So IE your ability to clients want to be able to, we talked about solutions, your ability to go to an archer. And by the way, my previous job, Archer, I was, was a, I was a client of Archer

00:32:30 [Speaker Changed] And smma stand for separately managed accounts or

00:32:33 [Speaker Changed] Separately managed accounts. Again, now you go back to technology, meaning you may be able to manage bonds and equities and alternatives or even tax managed solutions. Believe it or not, bringing that together in a package for individuals takes technology. Of course, asset managers, traditionally they’re, they’re stock pickers or investors. They’re not technology people. So you go to that platform and do that. Now, when I joined BNY, I’m like, okay, this is great. They’ve acquired Archer. I know that they have a great capability for doing this and this is a growing market. And already our, our wealth platform is a client of Archer. Before it was even acquired, the asset management arm of BNY was already a client was acquired. Now Archer is also free to grow because it services a broader cap, broader capability. So if you’re

00:33:19 [Speaker Changed] BY it services BNY and BNY clients.

00:33:22 [Speaker Changed] Yeah. And that’s important because again, if you think about this, the model of tomorrow and what scale matters is one, you can, you it’s its own business and just kind of providing what Archer does to the broader, to the broader like community. We get an inside, we, we get an inside view and a home field advantage in getting it ourselves. Typically if I build my own SMA platform, I have to now worry about how do I feed it to grow it. Other people are feeding it to grow it. And I get the benefit of kind of being attached to it. And I think that connectivity around, hey, everything I do in my, in on the asset management side, you know, all those clients at purging, they buy that as well. Should we not be engaging with our clients to do more for them? It’s like, sure, we’re doing clearing for you in custody and offering you technology. We also have asset management, all of them obviously by asset management as well. So having those connective dots I think is, I think is a tremendous competitive advantage.

00:34:20 [Speaker Changed] So I wanna talk a little bit about your role. I wanna define it better. At Nuveen, you were CIO and then you were CE O2 distinct positions. Your title is Head global, head of BNY, investments and Wealth Sounds like a little bit of each. You, you are building, but you’re also helping to direct the investing. Tell us a little bit about your roles and responsibilities in this new position at BNY.

00:34:46 [Speaker Changed] Yeah, I think I look at one end of the spectrum is very similar to my previous role, which is BNY investments is an asset manager. You know, obviously it’s a much bigger one than, than, than than the firm I came from. But it’s an asset manager. And there, you know, I’m, I’m the chief executive for that particular platform. We also have a wealth platform and, and, and, and very different from asset management. It’s more dealing with individuals and advice, but there’s also synergies in the business, right? Meaning if you’re a wealth advisor, you’re talking about how do you create investment products, how do you source ’em? Well, we have investment products and how do we, how do we make sure those two groups are talking to each other? What’s the products that we are creating? If you’re an asset manager, a big part of who our clients are are wealth advisors.

00:35:32 So having a good understanding of kind of what wealth advisors need, it really helps to have a, a wealth advisor in house. Sure. So I’m managing a larger platform, but at the end of the day, my job is still very similar. It’s about picking the right teams and people you, you know, we talk about $2 trillion and I would tell you 2 trillion should go to 4 trillion. We don’t own any of that money. At the end of the day, our biggest value set of what we do and have is our people. And obviously the technology that we can, we can offer those folks, but people is kind of really our business. And I’ve kind of see my job today really as the chief Chief people officer for how we kind of build teams around this

00:36:10 [Speaker Changed] Coming up, we continue our conversation with Jose Manaya, global head of B Y’s Investment and Wealth, discussing his experiences at Nuveen, TIAA. I’m Barry Riol, you’re listening to Masters in Business on Bloomberg Radio.

00:36:40 I am Barry Ritholtz. You are listening to Masters in Business on Bloomberg Radio. My special guest this week is Jose Manaya. He is the global head of BNY Investments and Wealth, helping to manage over $2.2 trillion in client assets. So, so let’s talk about who the clients are at BNY. You mentioned RIAs and advisors, my day job, but you also work with institutions, you work with high net worth and family offices as well as other players in the investing world who are also clients. Sounds like you guys are a little bit of everything to a lot of different people. How do you keep all that running smoothly? How do you keep all those balls in the

00:37:29 [Speaker Changed] Air? Yeah, well look, I think BNY is often described as the bank of banks, right? Because again, it’s kind of that broader provider and in goes the opportunity set, right? Like again, you look at the, the firm, I don’t know the last high look, the stock was about 1 0 6, you know, that’s in, in less than a three year span of thereabouts from $40. It makes it one of the best performing kind of financial stunts

00:37:52 [Speaker Changed] And financials have been kinda lagging the tech sector for a couple of years. They’re starting to play a little bit of catch up,

00:37:58 [Speaker Changed] They’re playing a little catch up, they’re doing better. But I think few are doing better, if any, are doing better than than b and y. Some of it goes back to that question you just asked me. Yeah. That there’s a lot of these, the, the way it would, the way typically these conglomerates or these platforms were typically managed, were very siloed. You know, the ability to bring in the, the technology and the leadership to say, how do we have better connectivity across all our platforms is where the value proposition is. And the market is seeing that, and the market is rewarding that.

00:38:32 [Speaker Changed] So it’s funny, earlier we talked about how commoditized so much of the world has become. You are basically saying we need to be an integrated solutions provider and not just have these commoditized silos, which is what exists outside of a mega bank of banks like VNY.

00:38:51 [Speaker Changed] Yeah, so much. We used to talk about the, you know, concept of selling watches. You know, I think that, you know, the, the, the world doesn’t really, it’s, it’s hard to sell watches now. People, people are looking for, they need, you know, our clients are getting more efficient. They need to scale their operations as well. And it’s the idea of like, do I wanna work with 150 managers or am I better off working with 20, 30 or 40? And if I’m going to go from 150 different types of managers, you know, to 20 or 30, how do I pick those 20 or 30? What’s gonna differentiate that? So I think a lot of that is, is what’s driving the need for scale. It’s what’s driving the need for consolidation and it’s also driving a lot of in innovation.

00:39:35 [Speaker Changed] So you, you’ve mentioned technology a couple of times. We’ve talked about tokenization and a little bit about ai. What are the big technological trends that we can look for over the next couple of years? Where are you thinking about how technology’s gonna have the biggest impact on asset managers and on investors?

00:39:57 [Speaker Changed] Yeah, it’s interesting and, and honestly, I often, I, my, my narrative has changed. I used to say, look, AI is gonna be very disruptive, but I have no idea if it’s five years from now or 20 years from now. And by the way, that makes it very difficult to invest in it, right? Because it’s, when are you gonna get the returns for it, you know, clearly. Now that’s come into a lot more clarity because where, you know, AI has begun to already yield returns for firms. And BNY is no different, is on the productivity side, right? You know, I think BNY is one of the first firms to have digital employees, so digital employees that can work on real problems. And that’s driving productivity increases. And that’s kind of been a large part of the narrative with, with ai. Now the new narrative is it can also provide value add.

00:40:47 So again, as an in, as a, as an investor, do you have the capability of, instead of the, the old way of, we’re gonna look at satellite pictures and see how many cars are in the, are in the, on the driveway. Well now AI can actually track devices, right? And kind of see where things are coming. AI is able to go through a lot more information and, and disseminate that information. So, you know, I I still say that human beings with AI will be better than human beings without ai, IE you’re still gonna need the component for, for human beings in, in the mix. But so much of the future is unknown. And, and, and by the way, I think that’s also the uneasy part that we are today in our markets. ’cause if you, if you speak to individuals on one end, I can kind of picture and say the economy is doing great earnings, earnings are strong consumer household balance sheets are strong, wages are still relatively, you know, strong as well.

00:41:49 And there’s a, there’s a strong kind of like very constructive view to putting your money in the markets today, even at these valuations. Hmm. The other side of that story is, okay, but then are we losing the independence of the Fed? Are there geopolitical issues and wars out there that can also, you know, cause massive disruptions in, in, in the global economy, policy issues, you know, and fiscal issues coming to the forefront. That could just be mistakes that happen. So at the same time, there’s so many things then that, that can go wrong, right? If I always say we’re probably at a all time high of things that can go wrong, yet where you sit today should feel pretty good in terms of, you know, the, the economics and, and the economy. And I think technology is the same thing. It’s like, wow, AI is gonna be disruptive. Where what we think AI can do is literally changing every week, every month. And again, that in many ways is exciting. In many ways. It’s also extremely unsettling,

00:42:53 [Speaker Changed] To say the very least since, since you brought up the current state of the world, profits are all time highs, but it seems like risks are all time highs. I wanna throw two of your own quotes back at you and, and get your thoughts on it. In the beginning of this year, you said risk assets are going higher. What led you to that conclusion? And has the year played out as you expected?

00:43:19 [Speaker Changed] Clearly? Look, I, I, I think, and I think there was a little bit, I, I think I was challenged a little bit on that comment. And remember I said it right after liberation day. So the markets were obviously falling off. There was a tremendous amount of concern with the tariffs and what would come, you know, I I had two thoughts there. One, understanding that I thought the current administration that we have was going to about the carrot and the stick, and we started out the year with the stick, but you know, what, the carrot was gonna show up at some point. And then two, this other view of, you know, most of us don’t have a choice to be risk off, right? The, the idea that like, you know, being risk off through these different cycles hasn’t really paid off. So the one thing we should do is like, go back and look at the fundamentals.

00:44:04 But yes, if you’re saying I’m gonna just take a correlation of one or just take broad market exposure, it’s more than, again, the academic conversation being more of an urgency. If you think about the, the actual conversation around I’m structured for solutions for outcomes in my portfolio, then why should you be risk off? You’ve, you already planned for this, right? I, I maybe plan to have part of my principle protected, maybe plan to have certain amounts of yield or uncorrelated assets in my portfolio. So my view put is again, one, the fundamentals are there to not say exit the market, but two, this should not always be around should I buy this stock or that stock or should I go bonds or equities

00:44:44 [Speaker Changed] Has to be broader. It has

00:44:45 [Speaker Changed] To be, it has to be broader because, you know, we’re not a hedge fund and a lot of what we do is not about that. It is about driving long-term outcomes.

00:44:55 [Speaker Changed] So another quote of yours that caught my attention was noise is at all time highs. I totally agree, but explain your point of view.

00:45:05 [Speaker Changed] Yeah. And I’ll explain it, I’ll explain it both in terms of kind of the, where we are in our markets and then also like, it’s also like a personal philosophy. One, this is what I mean by things look very calm, things look very constructive. Yet we can, I think my team at the time, and this was back in January, I think there were like 26 or 30 different like press releases or things that happened that kind of really jolted the markets in some way or caused concern. So the list of the things going on, whether it’s inflation, whether it’s political, you know, the fed policy changes, wars,

00:45:48 [Speaker Changed] The list.

00:45:49 [Speaker Changed] It’s endless. It’s endless. So there’s that I think is at an all time high of the things that, okay, what’s the list of what can go wrong? But then, you know, the other thing with noise, and I, I say this to my kids, I try to, I I’m still trying to master this, is that in most cases, 80% of what you hear is just noise, right?

00:46:06 [Speaker Changed] And already in stock prices

00:46:08 [Speaker Changed] Yeah, it’s there. It’s like 20% actually matters, right? You know, I, I said to be a good investor, you have to be good at knowing what you don’t know. But I also think you also have to be good at taking emotion off the table. You could see a lot, obviously we’re pretty divided country politically. I always say like, don’t bring that to your investing, right? So it’s more like, take the emotion out, don’t let the noise suck you in. Go back and it’s about the fundamentals. It’s about what’s in front of you. It’s about your outcomes.

00:46:36 [Speaker Changed] I love the concept of knowing what you don’t know. Let’s address that. What are investors not talking about? Not thinking about, but should what topics, assets, geography, policy, data points, whatever. What what is not at the forefront of many investors’ minds, but maybe is getting overlooked.

00:46:59 [Speaker Changed] You know, and again, I, this is gonna sound very simple and it’s been talked about since the beginning of our markets. You know, it’s true diversification. And again, it, it, it, it sounds simple, but it’s not because, you know, the old diversification is that 70, 30, 60 40 stocks, bonds, the, the markets are a lot more complex and sophisticated. That idea of having that conversation now around, let’s talk about what I’m trying to accomplish. Not, hey, I think large caps are hot now, so I’m gonna put you in them. Hey, you know, you see technology stocks, I think technology is gonna do really good. That to me is what’s really being overlooked is again, where I know a lot of people sit down with their advisors and they’re getting that academic, you know, dissertation on you should be diversified. This is why, this is how. But often the conversation falls right back to, is it large cap small caps, is it tech stocks, is it banks? Is it financials? Like that’s not the right conversation even is it alter Publix? It’s, it’s everything. It’s all of that. And it’s using technology and solutions and packages to create the right construct for individuals. Ma

00:48:13 [Speaker Changed] Makes a lot of sense to me. I only have you for a couple of more minutes, so let’s jump to our speed round. Our favorite questions we ask all our guests, starting with who were your mentors who helped shape your career?

00:48:26 [Speaker Changed] You know, I’ve, I’ve had so many, and I, and I’ll tell you, you know, they, they, they started with family members. I’ve had professors, I’ve had, you know, the dean of the business school at Manhattan College, I felt like was a mentor to me. I, I have my pre previous bosses I, that I still stay in touch with and try to have lunch and dinner with. So I have many people that I can, that I can kind of think,

00:48:51 [Speaker Changed] Huh, that’s very nice. Let’s talk about books. What are some of your favorites? What are you reading right now?

00:48:57 [Speaker Changed] You know, I, there’s a, I’m not a, I’m not a fiction guy, so most of what I read is nonfiction. I love all the,

00:49:02 [Speaker Changed] I’m, I’m the same way.

00:49:03 [Speaker Changed] I love all the, I love all the Michael Lewis’s books. Recently read The Boys in the Boat. So I, I just love the story about people and I love, I love reading about books that, you know, you see perseverance in human beings Right now. It’s, I I’ll tell you, I’m not reading anything right now. I’m getting ready to read something and I, and I’m wondering if it’s gonna stick, but I’ve been hearing a lot about the Meditations by Marcus Aurelius. Oh, sure. And I, I made the comment around 80% of the things you hear is noise. My understanding is that book has a lot about that in there of like, what you should really spend your time thinking about. So I was, I was, that’s synopsis and I’ve heard two people now mention it. So I say I’m, I’m getting ready to read that.

00:49:47 [Speaker Changed] Let me bastardize that for you. Okay. And say to what I took from that was recognize the what’s in your control and that’s what you focus on. What the Fed’s gonna do. We can’t control. Yeah. Don’t lose sleep over it. Yeah. Accept it. It’s gonna be what it’s gonna be, but focus on the things you can control. You can change really. It, it has absolutely stood the test of time. Yeah. And if you’re a Michael Lewis fan, I’m gonna, I’m gonna self-promote his most recent book that just came out, who is government. Yeah. We did a live Masters in business in April. And I wanna say the ratio of me speaking to him was probably 3% to 97% for 90 minutes. He just regaled the audience with stories and had people in stitches, absolutely hilarious stories about Billy Bean and, and Brad Pitt tears down people’s face. I’m,

00:50:42 [Speaker Changed] I’m gonna go listen to that. I find that to, I’m listening that to I’m gonna listen. Yeah, absolutely. I

00:50:46 [Speaker Changed] I, he, if you’re a Michael Lewis fan, I, I think I’ve interviewed him 10, 12 times. That’s my favorite interview. I I heard stories I never heard before. He was

00:50:55 [Speaker Changed] Great. His books, his books ruined all the movies that have come out off the, off of his books. ’cause they, they, none of them come close, in my opinion, to the actual books.

00:51:03 [Speaker Changed] So I’m, I agree with you. The one that’s closest is Moneyball is at least listen The Big Short, I love the book. The movie wasn’t bad, the Blind Side, the movie wasn’t bad, but Moneyball really captured the moment of the,

00:51:20 [Speaker Changed] I agree that Moneyball was probably the closest you got to the book. Yeah,

00:51:24 [Speaker Changed] Yeah. No, no doubt about that. What about streaming? What are you watching on Netflix or Amazon Prime, or what podcasts are you listening to?

00:51:32 [Speaker Changed] Yeah, you know, it’s, it is very similar to kind of the whole nonfiction thing. I, I’m a big fan of documentaries on, on Netflix. There’s two things that I’ll kind of do on streaming. It’s like, it is watching the men who Built America really, which is a great documentary. It just, again, it has, you know, the JP Morgans of the world, the car, the the car, the, the, the Carnegies of the world, Rockefellers and Vanderbilts. But what it shows you is that tremendous amount of risk that these individuals took and, and what was a very different time in America. But I love, I love the documentaries and then, and then shows what’ll happen is I don’t watch a lot of tv. I I’ll, I will watch sports, but I’ll hear things like Breaking Bad. Everyone talked about it. I was like, all of a sudden, I, you know, I’m watching it 10, 15 years after the fact. And then that led me to say, Hey, there’s this show, better Call Saul. So I just went through the whole, not just went, but you know, I’ve, I’ve been going through the, I went through Breaking Bad and then like, better Call Saul. And so the only way I watch shows now is, well, they came out five, seven years ago and now I’ll go in and be like, okay, I’ll, I’ll dig in.

00:52:37 [Speaker Changed] We, so I have two things for you. We saw Mad Men during the Pandemic. I never saw a single episode when it was on tv. I’m like, wow, this is amazing TV And if you are a documentary fan, the Billy Joel documentary, HBO saw Yeah. We’re, we’re like three quarters of the way through. It’s, it’s just amazing.

00:52:55 [Speaker Changed] And I’m a, I’m a big Billy Joel fan, and yeah, I thought it was, and again, I, it’s, to me it’s just it history and people, right. You just kind of just lear love learning about people. And then especially for me, it’s, I’m in awe of folk of people who could do things I can’t. Right. Like I’m in awe of a Billy Joel. When you hear about his process and what he does and you’re like, it’s, it’s amazing. It’s hard not to get inspired by that.

00:53:16 [Speaker Changed] No, abso a hundred percent. Our final two questions. What sort of advice would you give to a recent college grad interested in a career in investing?

00:53:27 [Speaker Changed] You know, the, the advice I give everybody coming outta school and, you know, I, I think they’re waiting to hear for some kind of special nugget on how they’re gonna get ahead doing models or what deals. And I’m like, do do the easy things really well. Like I did this intuitively not knowing how important it was, which was, Hey, I came into Wall Street, you know, they’re not gonna give, I was fresh outta school. They weren’t gonna gimme a big client. They weren’t gonna gimme a big mile. But you know what, if someone said, I need copies, I ran and did copies because, you know, I could do that, that I can do, Hey, book, book a restaurant for a client dinner. Hey, don’t worry about it. I got it. So to me it’s like, early life is never gonna be that easy in your career than when you’re first outta school. Don’t come in day one thinking about, how do I get on, how do I start traveling and meet clients and work the big deals? It’s like, do the little things really, really well. That is how they’re gonna be able to judge you early on.

00:54:22 [Speaker Changed] Hmm. Good advice. And our final question, what do you know about the world of investing today? You wish you knew 35 or so years ago when you were first starting out?

00:54:33 [Speaker Changed] Yeah, I think it goes back to the, when I start, I first started learning those lessons of don’t pay attention to the noise. Pay attention to what really matters. So, you know, earlier on, it’s hard not to get emotional about investing. Sometimes it’s a hard, even not to get completely kind of, you know, you p and i, and I watch for this in rps, like PMs can fall in love sometimes even with companies stocks and even management teams. Sure. That ability to now say, Hey, in all these cases, be objective. Tell, remind yourself, be good at knowing what you don’t know. Take emotion off, focus on what really should matter. Not all the noise that’s surrounding it. Huh.

00:55:12 [Speaker Changed] So, so interesting. Jose, thank you for being so generous with your time. We have been speaking with Jose Manaya. He’s global head of BNY investments and Wealth managing $2.2 trillion. If you enjoy this conversation, well be sure, check out any of the 550 we’ve done over the past 11 years. You can find those at Bloomberg, iTunes, Spotify, YouTube, or wherever you get your podcast from. Be sure to check out my new book, how Not to invest the ideas, numbers, and behaviors that destroy wealth and how to avoid them. How not to invest at your favorite bookseller. I would be remiss if I did not thank the crack team that helps put these conversations together each week. And I really mean this. Alexis Noriega and Anna Luke are my producers. Sean Russo is my researcher. Sage Bauman is the head of podcasts at Bloomberg. I’m Barry Riol. You’ve been listening to Masters in Business on Bloomberg Radio.

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10 Monday AM Reads

My back-to-work morning train reads:

The War Between Silicon Valley and Hollywood is Officially Over… And the tech bros won Long before five years are up, Hollywood will have been acquired by Silicon Valley. The tech bros might maintain some of the old landmarks—the Hollywood sign will still stand, and those stars on the boulevard won’t go away—but this will all be as hollow as a movie set. (The Honest Broker)

How Do You Invest During a Bubble? You have four options when investing in a bubble:  (Wealth of Common Sense) see also This Is How the AI Bubble Will Pop: The AI infrastructure boom is the most important economic story in the world. But the numbers just don’t add up. (Derek Thompson)

How Useful Is AI in Institutional Investing Right Now? Artificial intelligence can make a major contribution by interpreting data, but it will not generate alpha on its own; human analysts remain better with ‘intangible’ information. (Chief Investment Officer)

Move Fast and Break Nothing: Waymo’s robotaxis are probably safer than ChatGPT. (The Atlantic)

A History of the New York Stock Exchange’s Ups and Downs: Periodic upheavals have been typically followed by stability and growth. (Wall Street Journal)

• The World’s Most Popular EVs Aren’t Cars, Trucks, or Motorcycles: The pandemic has helped transform the e-bike into a juggernaut (Spectrum IEEE)

Robots are learning to make human babies. Twenty have already been born. One in six adults experiences infertility. Can groundbreaking automation help answer their prayers? (Washington Post)

American Democracy Might Be Stronger Than Donald Trump: Yes, Donald Trump is a threat to democracy. But the country has a few attributes that make it more resilient than you might think. (Politico)

At Saudi Comedy Fest, American Free Speech Becomes the Punchline:  American comics used Saudi Arabia’s first global comedy festival to skewer a debate raging at home. Critics said the event was part of Saudi efforts to draw attention away from a political crackdown. (New York Times)

Be sure to check out our Masters in Business this week with Jose MinayaGlobal Head of BNY Investments and Wealth. He is also a member of BNY’s Executive Committee. Previously, he was CEO of Nuveen, the asset manager of TIAA; Jose previously served as Nuveen’s President and CIO

 

How Well Have Alts Perfornmed Relative to Equities?

Source: J.P. Morgan

 

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1938 Talbot Lago T150

This weekend, I am at the Audrain Newport Concours and Motorweek. I have some fun interviews teed up and have seen several amazing vehicles.

Events of this sort make me think about cars like this achingly beautiful Figoni & Falaschi-designed Talbot — perhaps the most beautiful car I have ever seen.

This was the first time I have seen it in person.

Originally purchased new by Antoine Schumann, a gentleman race driver and banker to replace his Bugatti Type 50 (1938 cost: 165,000 francs). It is the only Figoni Teardrop Coupé built on the T150 C Lago Spéciale chassis. It won its class at the 1948 Belgian Grand Prix, the 24 Hours of Spa, and other well-known races, and came in 3rd unmodified at LeMans.

It was auctioned this past summer for a mere 3.6 million Euros (about $4,237,400).

 


Source: Classic Driver

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10 Sunday Reads

Avert your eyes! My Sunday morning look at incompetency, corruption and policy failures:

The Story of DOGE, as Told by Federal Workers: WIRED spoke with more than 200 federal workers in dozens of agencies to learn what happened as the Department of Government Efficiency tore through their offices. (Wired)

How a Top Secret SEAL Team 6 Mission Into North Korea Fell Apart: The 2019 operation, greenlit by President Trump, sought a strategic edge. It left unarmed North Koreans dead. (New York Times)

The ‘stupidity’ of 300 investment bankers tricked by a 20-something founder is a lesson in due diligence: Fintech wunderkind Charlie Javice must serve seven years in prison for conning JPMorgan Chase out of $175 million. Some 300 bankers vetted the 2021 purchase of her startup, but it took a year to learn its 4 million users were fraudulent.
The judge said he took that into consideration, but ultimately decided “fraud remains a fraud.” (Business Insider)

Spam and Scams Proliferate in Facebook’s Political Ads: A new analysis of political advertisers found that the platform profits from ads that include deepfakes and other content prohibited by its own policies. (New York Times)

They Want To Ruin Your Life: It’s Time To Accept That Big Tech Hates You. (What We Lost) see also AI can design toxic proteins. They’re escaping through biosecurity cracks. A research team patched one vulnerability. Safeguarding against the next ones will require constant vigilance. (Washington Post)

Billions in Taxpayer Dollars Have Become Virtually Untraceable: The Trump administration’s aggressive approach to overhauling the executive branch has obscured how federal dollars are actually being spent — even for the members of Congress. (Notus)

Inside the Crisis at the Anti-Defamation League: The group used to fight for justice for all. Its war against anti-Zionism has changed everything.  (New York Magazine)

The Man Behind Trump’s Push for an All-Powerful Presidency: Russell T. Vought spent years drawing up plans to expand presidential power and shrink federal bureaucracy. Now he is moving closer to making that vision a reality, threatening to erode checks and balances. (New York Times)

The MAGA Influencers Rehabilitating Hitler: A growing constituency on the right wants America to unlearn the lessons of World War II. (The Atlantic)

America’s Friends Will Never Trust the US Again: Trump keeps treating the nation’s allies with such contempt that the consequences will be lasting and ugly. (Bloomberg)

Be sure to check out our Masters in Business this week with Jose MinayaGlobal Head of BNY Investments and Wealth. He is also a member of BNY’s Executive Committee. Previously, he was CEO of Nuveen, the asset manager of TIAA; Jose previously served as Nuveen’s President and CIO


Electronic Arts set to go private in $55 billion deal — the latest in a long line of disappearing stocks


Source: Sherwood

 

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10 Weekend Reads

The weekend is here! Pour yourself a mug of Colombia Tolima Los Brasiles Peaberry Organic coffee, grab a seat outside, and get ready for our longer-form weekend reads:

The Mysterious Billionaire Boss at Jane Street Smashing Trading Records: The firm’s secrecy-loving co-founder is raking in money faster than he can spend it on Burning Man, his own casino and, unwittingly, an African coup. (Bloomberg)

The Cons (and Pros) of Vanguard’s Decision to Offer Private Equity: Of all possible Vanguard additions, private equity seemed to be about the least likely. Vanguard serves mostly retail clients, with publicly traded securities, in liquid funds that carry very low expense ratios. In contrast, private equity investments are largely institutional, aren’t traded, and are owned by illiquid funds that are notably expensive. The fit, to put the matter gently, is not obvious (Morningstar)

iRobot Founder: Don’t Believe The (AI & Robotics) Hype! We are in the middle of another massive technological wave, thanks to generative artificial intelligence and its offshoot, robotics. A tanker load of money is being poured into these two areas, and it has come with increasingly breathless promotional activity. It warrants a reality check. (Crazy Stupid Tech)

Tech Bro 2.0: The new Silicon Valley archetype dominating the AI age: He’s not what he used to be. He’s jacked, cracked, and thinks he might save America. (San Francisco Standard)

How Derren Brown Remade Mind Reading for Skeptics: The mentalist’s manipulation techniques give people too sophisticated to believe in the paranormal something quasi-scientific to hang on to. (New Yorker)

AI isn’t replacing radiologists: Radiology combines digital images, clear benchmarks, and repeatable tasks. But demand for human radiologists is at an all-time high. (The Works In Progress Newsletter)

How a Group of Students in the Pacific Islands Reshaped Global Climate Law: They watched climate change ravage their home countries as rich, polluting nations did nothing. Then they had an idea. (New York Times)

The mafia hitman who dreamt of being a pop star: The scarcely believable true story of convicted Israeli assassin Avner Harari. (Financial Times)

You Really Need to See Epstein’s Birthday Book for Yourself: This time, the conspiracy theorists were right. (The Atlantic)

What it’s like to watch tennis with Roger Federer: Anyone who imagines Federer — to his loyalists, the greatest player of the modern era, even if Novak Djokovic won more — cloistering himself with masters of the universe in some luxury suite high above the court would be sadly mistaken. (New York Times)

Be sure to check out our Masters in Business this week with Jose MinayaGlobal Head of BNY Investments and Wealth. He is also a member of BNY’s Executive Committee. Previously, he was CEO of Nuveen, the asset manager of TIAA; Jose previously served as Nuveen’s President and CIO

 

How does the rally compare to history?

Source: @WarrenPies

 

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MiB: Jose Minaya, BNY Global Head of Investments and Wealth



 

 

This week, I speak with Jose Minaya, global head of BNY Investments and Wealth, overseeing $2 trillion in client assets. Bank of New York, founded by Alexander Hamilton, is the oldest bank in the country and the first to go public on the NYSE

We discuss his career in buy-side trading and investing in the alternatives space. We also discuss the changes blockchain and AI are bringing to asset management.

A list of his favorite books is here; A transcript of our conversation is available here next week.

You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, SpotifyYouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.

Be sure to check out our Masters in Business next week with Jurrien Timmer, Director of Global Macro at Fidelity Investments, which manages $16 trillion in for 20 million clients. Timmer, a Chartered Market Technician (CMT), is part of Fidelity’s Global Asset Allocation (GAA) group, anf specializes in asset allocation and global macro strategy.

 

 

Favorite Books

 

 

 

Books Barry Mentioned

 

 

 

 

 

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10 Friday AM Reads

My end-of-week morning road trip reads:

In Defence of Luck: In the success equation, luck plays an important role. The origins of success are usually subtle and complex. Successful people, by being open to opportunity and exposing themselves to chance, take new directions that prove more fruitful than anyone could have predicted. (Four Seasons)

After the Pandemic ‘Reset Button,’ Downtowns Reinvent Themselves: A new exhibit at the National Building Museum showcases how downtowns are evolving from office corridors to centers of housing, nightlife and culture. (Bloomberg) see also Regional US casinos cash in as gamblers shun pricey Vegas trips: Casinos around the country enjoy an unexpected revival as the Nevada hotspot falls victim to the spending slowdown. (Financial Times)

9 Technologies That Transformed Investing—From the Telegraph to AI: In the early days of the country, each city conducted its own financial business. Here are the key innovations that changed everything: Electric telegraph; Railroad; Stock ticker; Telephone; Electronic ticker; Electronic and online trading, Online investing platforms, High-frequency trading, and Artificial intelligence.  (WSJ)

Is This L.A. Home the Solution to America’s Growing Energy Crisis? At night, energy goes to powering the home. During the day, energy produced by the solar panels goes largely to the grid, but also to the home, and to charging the battery. (New York Times)

Mercedes-Owned YASA Reveals a 737-HP Electric Motor That Weighs Just 29 Pounds: The electric drive system tech company owned by Mercedes-Benz is talking huge numbers. (Road & Track) see also YASA: U.K. Company Leading The Electrified Performance Car Revolution:  The YASA name may not be familiar, but its electric motors are the secret sauce behind hybrid supercars including the Ferrari SF90 Stradale and 296 GTB, Lamborghini Revuelto and Temerario, McLaren Artura, and Mercedes-AMG CONCEPT GT. (Forbes)

Hall vs. Oates? Some issues aren’t worth arguing. Everyone doesn’t have to have an opinion about everything. I’m getting on the fence. It’s muzzle time! (Washington Post)

Hundreds of Generals Try to Keep a Straight Face: Pete Hegseth gathered commanders from around the globe to unveil new physical-fitness standards. (The Atlantic)

She Turned the World On With Her Smile. But Where Will the Hat Land? Hidden out of sight for decades, Mary Tyler Moore’s piece of television history seeks a permanent home. (New York Times)

Astronomers Have Found 6,000 Planets Outside the Solar System: From lava worlds to gas giants, NASA says the variety of these worlds is staggering—and that signs of a further 8,000 distant planets are awaiting confirmation. (Wired)

What is CLA, the revolutionary coaching method used by Victor Wembanyama and other top athletes? The CLA, which stands for Constraints-Led Approach, is a learning method that has made its way from academia to the mainstream, drawing from innovative research in psychology and neuroscience. It replaces traditional block training, where an athlete learns a single movement pattern step-by-step, with game-like situations that feature special rules, forcing them to adapt their moves on the fly. It’s founded on the principle that training perfectly yields imperfect results. (The Athletic)

Be sure to check out our Masters in Business this week with Jose MinayaGlobal Head of BNY Investments and Wealth. He is also a member of BNY’s Executive Committee. Previously, he was CEO of Nuveen, the asset manager of TIAA; Jose previously served as Nuveen’s President and CIO

 

Sentiment: Wall Street is far from 1999 euphoria

Source: BofA Global Research Equity and Quant Strategy

 

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What’s the #1 Cognitive Bias That Derails Investors?

What’s the #1 Cognitive Bias That Derails Investors? (With Barry Ritholtz) by Ali Almossawi
Guest: Barry Ritholtz / Video + Transcript + Summary (28 mins)  Read on Substack

 

 

I had a great time chatting with Ali Almossawi about various cognitive biases that impact investors.

This was so much fun because I have been a fan of Almossawi’s work for a long time. His book “An Illustrated Book of Bad Arguments: Learn the Lost Art of Making Sense” is on my essential reading list.

Ali summarizes much of our conversation into eight broad biases that nearly all investors suffer from. It’s a short video and an even quicker  read; check it out here.

 

 

 

Source:
What’s the #1 Cognitive Bias That Derails Investors? (With Barry Ritholtz)
Guest: Barry Ritholtz / Video + Transcript + Summary (28 mins)
Ali Almossawi, Oct 02, 2025

 

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At The Money: The Flood of New ETFs

 

 

At The Money: The Flood of New ETFs (October 1, 2025)

There will be nearly 1,000 new ETFs issued this year. Most of these are NOT the usual low-cost passive indices, but tend to be complex, expensive active funds in an ETF wrapper. These include leveraged directional bets, options, derivatives, and a whole raft of exotic strategies.

Full transcript below.

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About this week’s guest:

Dave Nadig is President and Director of Research at ETF.com, and he shares with us how investors should navigate all of these new products. Dave helped design and market some of the first exchange-traded funds. He is the author of  “A Comprehensive Guide to Exchange-Traded Funds” for the CFA Institute.

For more info, see:

LinkedIn

Twitter

Substack

~~~

 

Find all of the previous At the Money episodes here, and in the MiB feed on Apple PodcastsYouTubeSpotify, and Bloomberg. And find the entire musical playlist of all the songs I have used on At the Money on Spotify

 

 

 

TRANSCRIPT:

Intro: “We’re waiting for the flood, We′re waiting for the flood,  We′re waiting for the flood, We’re waiting for the flood

Barry Ritholtz:  There were 600 new ETFs launched in the first eight months of 2025. And it’s gonna get worse because so many more ETFs are coming out next year. The growth has been explosive. What does this mean for investors?

I have the perfect person to discuss this with. Dave Nadig is president and head of research at ETF.com. He has been tracking the ETF industry pretty much since his its beginning and is well known as an expert in the space.

So Dave, let’s talk a little bit about what’s been going on. Most ETF assets are and will likely continue to be cheap, index based products. That’s the legacy for investors: Low cost beta. Is this the future of ETFs or are we going in a different direction?

Dave Nadig: I think most of the money is gonna continue to flow into low cost asset allocation targets, right? The S&P 500 broad bonds, broad commodities at very, very cheap institutional prices. It’s just hard to beat that. It’s one of the best deals going in asset management in the investing world.

And so whether you’re an individual mom and pop investor just trading your own account, or whether you’re the Harvard endowment, anything in between. Cheap beta is still probably gonna be important to your portfolio, and ETFs are gonna remain the best wrapper for that experience.

However, this industry is not gonna take that lying down and desperately wants to make money. Most of the new products, the new launches you talked about, the 600 will probably have 800, 900 by the end of the year. Almost all of those products are very expensive. Doesn’t mean some of them aren’t good, but they’re all very expensive.

Barry Ritholtz: Let’s talk about that. New products are coming out with what you described as quote, insanely high fees that the big revenue winners are likely not the firms you think of when someone says ETF at a cocktail party.

What does this mean for investors? What does this mean for the industry? Are there really massive profits to be had here?

Dave Nadig: There are pretty huge profits to be had here. And if you look at where I, I like to look at revenue based on flow. Meaning like last month, X amount of money came in, what was the revenue implied by that money and the implied revenue of the industry?

Now has, you know, probably about 25% of the implied revenue from Flow is going to products that cost over 1%. (Really?!)

So that means there are a lot of investors buying products that cost over 1%. And the reason that’s an issue for investors is not that nothing is worth that fee, but that what’s getting launched tends to be very speculative. We’re not talking about core investing, building blocks; we’re talking about ETFs that use leverage or ETFs that use the derivatives markets to shape your pattern of returns to get you more income than you might otherwise be able to, e.g., “Selling volatility” Those types of products are expensive and while they may be useful like, like a really sharp knife in the drawer can be really useful when you got that chicken bone you gotta get through. It’s not a one size fits all thing.

I have some concern that individual investors see the marketing from the industry, which is really exclusively focused on those expensive products and gets sort of suckered into ’em.

Barry Ritholtz: Let’s talk about what, what is transformative? What is innovative in ETFs over the past few years? What trends do you see shaping 2026 and beyond? What is the biggest new type of ETF that’s coming out?

Dave Nadig: There’s really three buckets of, of hot development from a, from a what could you as an investor target.

Crypto we have to talk about. Not only do we now have, um, hundreds of billions of dollars tracking crypto in various capacities, whether it’s spot Bitcoin, which is where most of those flows have gone, but now we’re talking about Ethereum and Solana. We’re talking about stake diversions where you’re taking your Solana and you’re putting it into a contract to earn fees off of or earn interest off of it. That ecosystem of crypto products is going to get very complex very quickly. The SEC has put out accelerated listing standards; default listing standards, which will allow probably the next 10 to 20 coins on the market cap list to be launched as spot ETFs. So those will all be launched within the next six to 12 months before you it gonna be a free for all

Barry Ritholtz: Before you move off crypto. I have to ask about BlackRock’s Ibit – it was 5 billion at launch. It’s something like 82 billion already. Is this the fastest ever asset accumulator of any ETF that’s been launched?

Dave Nadig: It’s pretty close if it’s not the winner. I, I certainly think on a, on a pure dollar basis, uh, I can’t think of anything that has had that kind of ramp. GLD when it first came out was one of the first to a billion and then the first to 5 billion, and that broke a lot of records. I think Ibit and Bitcoin as a class has really kind of blown all those things out of the water and it’s been, it’s been, I think, beneficial for the most part, and an orderly process.

I think having these Bitcoin ETFs has helped investors understand it. Um, I’m hearing from bigger as bigger institutions, bigger advisors, they love the ETF because it solves all of their custody issues, right?

Everything stays in the same account. They don’t have to worry about having on chain assets. So while crypto purists may not be into it, I think the average investor is way better suited to get their little bit of crypto exposure in that ETF wrapper. And, and you mentioned what the SEC is permitting, not just in crypto, but across the boards.

I, I read your regular writings and one of the things you had said is. We have a “Incredibly permissive launch environment.” What does this mean in terms of the sort of things we can see in ETFs, either with leverage two x three x in verse two x? What, what does this permissive environment mean for what ETFs are gonna get launched?

Dave Nadig: It means we’re gonna get a lot of ’em. We’re gonna launch “all the things,” as I like to say. (All the things!) Uh, the, the, the biggest thing we’ve had is this move towards single stock ETFs.

And, and for people who might be confused by that, it’s not that you’re buying an Apple ETF to invest in just Apple ’cause you can obviously just buy Apple to do that. You’re buying an Apple ETF that maybe gives you two x Apple exposure or minus. Two x apple exposure. So when it goes, you goes down, you go up, or you’re writing options on your Apple position so that you can get some extra income. Or you’re doing a combination of both so that you can only get, you know, you get 2X the upside and minus 1X the downside but with caps involved, ’cause you’re selling a lot of options along the way.

Anyway you can imagine mixing and matching these kinds of patterns of returns. The combination of leverage. Income and protection around a single stock is going to be launched. If you think about it, we’ve got 500 stocks in the S&P 500. There are about six different flavors you can think of for each individual stock. That’s a couple thousand ETFs we’re gonna have to keep track of, assuming there’s only one of each flavor, and this industry loves to compete against each other. Legitimately, I think by this time next year, we could have several thousand more ETFs than we do right now.

Barry Ritholtz: More ETFs than there are actually stocks.

Dave Nadig: Huge already. They’re absolutely, I mean, we’ve been under, we haven’t had 5,000 stocks in the Wilshire in a long time. I think 3,500. 500 or so.

We’re gonna see all those single stock products, which are, for the most part, trading vehicles, right? If you’re a day trader, there’s lots of value in there. If you are trying to, you know, monetize a long term position, there’s some value in those kinds of covered call strategies. They’re all very expensive. They’re very inappropriate for most long-term investor from an allocation perspective, but sharp, useful trading tools for a certain class of trader.

Barry Ritholtz: I keep reading some of the things you’re penning about share class relief. Explain what this means and why this is another flood of new ETFs that are coming out.

Dave Nadig: Let’s pick an example. Like DFA Dimensional was late to the ETF party, very well known sort of in the nineties for being one of those shops where you could only buy them through an advisor who’d gone through their coursework. They made the shift to convert some of their mutual funds to ETFs a couple years ago, and were very successful at it. Now, why didn’t they convert all of them? Because a lot of the DFA products end up in 401k plans. And if you’re in a 401k plan, that means you need to be able to get fractional shares, which is really easy in a mutual fund and impossible in an ETF.

The only way to get the efficiencies of the ETF structure into those mutual funds is a share class: an ETF share class pointing at the same pool of assets.

That’s how a lot of Vanguard ETFs are built. They had a patent, which is now expired. The SEC has 70 odd applications from other players in the industry to basically duplicate things the way Vanguard does. They’ve made it very clear that. Imminent, I would suggest by the end of the year, at the very latest, we’ll see this first one’s approved and that will then be a flood because that becomes a very, very simple boilerplate piece of paperwork to file a new share class and get it trading on  NYSE, Nasdaq, or CBOE.

We’ll just see a lot of those. I would suspect by the end of the year, we could have maybe a thousand of those individual share class ETFs turned on if all of the people who have filed. Converted all or share classed all of the things they could. It would be about five or 6,000 new ETFs.

Barry Ritholtz: That’s really intriguing. I have to ask a question, and you’re the one who’s really schooled me on this. If mutual funds were created today, they probably wouldn’t be approved. Explain the problem with mutual funds and why ETFs are arguably so much superior.

Dave Nadig: Well, the biggest problem with funds is their tax fairness. It’s the issue with a fund is that if you as a big investor, let’s say you own 20% of the Dave Mutual Fund and you decide I’m terrible and you want out, well, the mutual fund me has to now go sell a bunch of securities to give you back your 20% of my fund all that cash that you’re gonna want.

That engenders generally a bunch of capital gains. Those capital gains now have to be distributed to. All the people who were left, the people you abandoned buried, they end up paying taxes ’cause you left because you created a capital gain for everybody. Now it’s not that those are taxes that would never be paid, it’s just you’re paying them earlier than you would otherwise ’cause you get to reduce your basis.

So. Individual investors in a mutual fund can often get tax distributions through no fault of their own, through no action of their own, simply because other investors go in and out in an ETF. That simply doesn’t happen. So it is a simply a fairer mechanism. The ETF also brings other things that are helpful, like the ability to wash out some cap gains by doing so-called creation redemption or heartbeat trading. That’s a little feature of ETFs that makes them very tax efficient. And of course liquidity and transparency and all those other things.

But the big reason mutual funds would probably get the kibosh today is they’re inherently less fair in terms of how they treat individual investors.

Barry Ritholtz: Even if I don’t sell my mutual fund, but other people have, I incur capital gains.

Dave Nadig: A hundred percent. Now you get, again, you get to change your basis. So when you go to sell, you’ll pay less tax gains. But I don’t know about you. I prefer paying taxes later, hopefully never, or maybe after I’m dead. But not today.

Barry Ritholtz: Final question. It sounds like the future of ETFs are pretty much anything. Anything you wanna do, sometimes cheap. Always very liquid, but can be accomplished very well with an ETF. Is this the future of asset management?

Dave Nadig: I think so, I think the ETF structure is the most efficient vehicle we’ve come up with for taking exposures and getting them traded on exchanges.

It’s hard for me to see how we’re going to make it any more efficient tokenization crypto. Sometime down the line, we’ll replace some of what we’ve done with ETFs, but we’ll largely duplicate it and it will just do it in a different fashion. The, the ETF structure is where you’re going to probably get almost all of your exposures for the foreseeable future with some very strange edge cases. Things like some private credit or maybe some real estate that you can’t trade daily. There’ll be some edge cases. Everything else is gonna be an ETF.

Barry Ritholtz: If we’re talking about the future of ETFs, we’re really talking about the future of asset allocation and investing.

For the most part, the big money is in the low-cost passive indexes that charge 3, 4, 5 basis points. But the fastest growing space in ETF-world are active funds. Our alternative funds are all sorts of niche. Areas, some of which are pretty pricey, a hundred, 125 basis points.

Directional bets leverage two x three x inverse bets. Those are really special use cases. Tread carefully if you’re playing in those spaces.

Use ETFs for what they’re really good at: Getting you low-cost exposure to inexpensive indices. Tread lightly when you go into the pricier, wilder stuff, those are potential accidents waiting to happen.

I’m Barry Ritholtz. You are listening to Bloomberg’s at the Money.

 

~~~

Find our entire music playlist for At the Money on Spotify.

 

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10 Thursday AM Reads

The N.Y.P.D. Is Teaching America How to Track Everyone Every Day Forever:  Wherever you go in New York City, there’s a good chance the police are tracking you. Drive into the city and traffic cameras will automatically photograph your car, capturing your vehicle’s license plate, make, model, color, distinctive markings and even passengers. Post on Facebook, Instagram, Twitter or TikTok and the N.Y.P.D. can scrape and store your messages, capturing your thoughts, plans, political statements and friend groups. For years, Americans have lived with the knowledge that th eir personal data was slipping into the clouds of tech giants and government agencies, even as the European Union has protected its citizens against digital surveillance.  https://www.nytimes.com/interactive/2025/09/15/opinion/nypd-surveillance.html

Larry Ellison, a Media Mogul Like No Other: The database billionaire and his son, David, are Trump favorites. The family could soon control an empire that includes CBS, Paramount, Warner, CNN and a piece of TikTok. https://www.nytimes.com/2025/09/23/technology/larry-ellison-oracle-tiktok.html

How a complete stranger tried to steal my dead father’s home: In the midst of my grief, I learned I was also the victim of deed fraud. (Washington Post)

The human stain remover: What Britain’s greatest extreme cleaner learned from 25 years on the job From murder scenes to whale blubber, Ben Giles has seen it – and cleaned it – all. In their stickiest hours, people rely on him to restore order. https://www.theguardian.com/news/2025/sep/23/long-read-britain-extreme-cleaner-murder-ben-giles

Why Corporate America Is Caving to Trump: When broadcasters like CBS and ABC surrendered to the president, it looked as if they lacked backbone. The explanation runs much deeper. https://www.nytimes.com/2025/09/26/business/trump-disney-paramount-shareholder-capitalism.html

The Climate Change Paradox: Earth’s climate is chaotic and volatile. Climate change is simple and predictable. How can both be true? (Quanta Magazine)

Even without formal charges, Trump’s DOJ can punish critics: Prosecutors have struggled to find evidence Trump wants, but even an investigation can inflict high costs on foes. https://www.washingtonpost.com/national-security/2025/09/23/trump-investigations-retribution-schiff-cook-james/

China Has a Different Vision for AI. It Might Be Smarter. With growing fears of an AI bubble, Beijing is charting a pragmatic alternative to Silicon Valley’s pursuit of artificial superintelligence. (Wall Street Journal)

Is TV’s Golden Age (Officially) Over? A Statistical Analysis Has “Peak TV” come to an end? Who better to comment on the unsustainable pace of content production than an executive who is being told to produce content at an unsustainable pace? https://www.statsignificant.com/p/is-tvs-golden-age-officially-over

A Far-Right Faction Took Power in Odessa. Then It Had to Govern. After hard-liners purged the civil workforce, they found it difficult to provide standard city services. Eventually, voters revolted. https://www.texasmonthly.com/news-politics/odessa-texas-far-right/

Auto Industry Is Flashing a Warning Sign on U.S. Economy: CarMax’s sales and profit plunged in the latest quarter, sending stock down 20%. https://www.wsj.com/business/autos/carmax-profit-plunge-signals-more-pain-ahead-for-tariff-strained-auto-sector-374966c7?mod=hp_lead_pos8&inf_contact_key=a5c8648c488783814946c848a2147d2b

CEOs say quarterly earnings reports pressure them. But where is that coming from? Companies typically get a long leash from hopeful investors https://www.marketwatch.com/story/are-investors-really-suffering-because-companies-report-earnings-every-3-months-39a14e91?st=Ft4A9f

DeepMind unveils new robotics AI model that can sort laundry: New technology advances reasoning capabilities in general-purpose machines in push to make them more useful https://www.ft.com/content/7843dfdb-7c60-46e7-a90a-dd54b7703f4a?inf_contact_key=f0e044c8d993a0c42bdc773d01912ec9

How popular is Donald Trump? Silver Bulletin approval ratings for President Trump — and all presidents since Truman. (Nate Silver)

This overlooked workout is key to aging better: Scientists say power—your ability to move quickly—is one of the first fitness skills to fade with age. And it’s not as hard as you think to build it back. (National Geographic)

A lot of powerful people just don’t realize how unpopular Trump is: The backlash to ABC/Disney canceling Kimmel shows why it’s important for businesses and the public to understand that two-thirds of Americans are not Trump voters https://www.gelliottmorris.com/p/a-lot-of-powerful-people-just-dont.

Europe is at war with Russia, whether it likes it or not: The fighting in Ukraine is only part of Russia’s wider war against the continent as a whole. It’s high time to recognize this reality and act accordingly. https://www.politico.eu/article/europe-russia-war-in-ukraine-nato-poland-romania-estonia/

The DOJ Is Using Bad Lawyering to End Fed Independence: The administration is making an extraordinary power grab in Trump’s push to fire Lisa Cook before Tuesday’s Fed Board meeting. (Bloomberg)

America Cannot Lose the Robotics Race: The most crucial challenge of the AI race is coming into view. We need to get in the running. https://a16z.substack.com/p/america-cannot-lose-the-robotics

“Movement Conservatism” was anything but conservative. Its supporters embraced the radical goal of dismantling a practical system that stabilized the country after the Great Depression and a devastating world war, a system that was based in the Declaration of Independence and the Constitution. However, they are now embracing something altogether different. (Letters from an American) see also The Plutonomy Is Still Going Strong: For the last 20 years, analysts have known that this is an economy by and for the rich. https://prospect.org/economy/2025-09-18-plutonomy-still-going-strong/

US Taxpayers Will Pay Billions in New Fossil Fuel Subsidies Thanks to the Big Beautiful Bill: A report finds that President Trump’s flagship legislation will grant $40 billion in new subsidies to the oil and gas industry over the next decade. (Wired) see also Big Businesses Are Doing Carbon Dioxide Removal All Wrong: The technology is needed to limit global warming. But corporations are supporting it in lieu of reducing emissions. (Wired)

Hulu’s Futurama Gets the Insurer-Physician-PBM Scheme Right: Cartoon satire nails the vertical integration of health care giants like UnitedHealth Group, Cigna and CVS/Aetna. (Health Care Un-covered)

Casinos Aren’t The Holy Grail Developers Seem To Think They Are. Casino development frequently promises job creation and tax revenue, but research shows that proximity to casinos tends to depress local property values and rents The expansion of gambling, including online betting, has changed industry dynamics; failed luxury projects like Atlantic City’s Revel highlight competitive pressures Personal experience and market analysis suggest that casinos rarely deliver enduring community benefits, often leaving behind economic and social issues after developers exit. (Housing Notes

$3 Million Watches and Caviar for the Cat: How Becca Bloom Became the Queen of RichTok: The influencer unapologetically flaunts the trappings of her opulent life. Is she the Marie Antoinette of the digital age, or a new kind of relatable star? (Wall Street Journal)

American Democracy Might Be Stronger Than Donald Trump: Yes, Donald Trump is a threat to democracy. But the country has a few attributes that make it more resilient than you might think. https://www.politico.com/news/magazine/2025/09/19/american-democracy-resilience-00548910

The scam of all scams: The Trumps “debank” major customers from their “anti-debanking” cryptocurrency venture, and a CFTC nominee says the Winklevosses are blackballing him. (Citation Needed)

In Texas, Parents Fighting Vaccinations Say Their Movement Is Winning: Public health advocates hoped that the measles outbreak might persuade the reluctant to get shots. That has not turned out to be true. https://www.nytimes.com/2025/09/18/us/politics/vaccine-mandates-covid-measles.html

Scott Bessent, Sleazy Smearer: About the Treasury secretary’s vile, dishonest slander of the Fed. https://paulkrugman.substack.com/p/scott-bessent-sleazy-smearer

Are we living in a stupidogenic society? The cognitive muscles we no longer exercise https://substack.nomoremarking.com/p/are-we-living-in-a-stupidogenic-society?ref=thebrowser.com

 

My morning train WFH reads:

Why a 60/40 portfolio is likely to beat the S&P 500 through 2035: This stock and bond strategy is so disliked — and it’s probably your best investment move for the next 10 years.  https://www.marketwatch.com/story/this-stock-and-bond-strategy-is-so-disliked-and-its-probably-your-best-investment-move-for-the-next-10-years-3759fdf2?mod=genPF_twitter_new&link=sfmw_tw

America Cannot Lose the Robotics Race: The most crucial challenge of the AI race is coming into view. We need to get in the running. (The a16z Newsletter)

The death rays that guard life: We disinfect water before we drink it. Germicidal ultraviolet could make airborne disease as rare as those carried by water. (Works in Progress)

The rise and rise of Zohran Mamdani: In a UK exclusive, the New York mayoral candidate says there’s no limit to the possibilities of his politics (New Statesman)

• Appeals court judges publicly admonish Supreme Court justices: ‘We’re out here flailing’ “They’re leaving the circuit courts, the district courts out in limbo,” one judge said during appeals court oral arguments that turned into a venting session about the high court’s terse emergency rulings. (Politico) see also How Originalism Killed the Constitution: A radical legal philosophy has undermined the process of constitutional evolution. (The Atlantic)

A Vast ‘Cosmic Web’ Connects the Universe—Really. Now, We Can Emulate It. An emulator called Effort.jl can drastically reduce computational time without sacrificing accuracy, which could help solve longstanding mysteries about the cosmos. (404)

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