In this episode, we talk with Mike Green of Logica.
Mike formerly ran Thiel Macro, Peter Thiel’s family office macro fund. We talked with Mike about knowing when and how to monetize your options, what he means when he says a history of markets is a history of transactions, and what he would teach in a one day seminar about the Fed.
Also, be sure to check out The Grant Williams Podcast where Mike Green has been interviewed by Bill Fleckenstein and Grant Williams. They discuss the role passive investing may have to play in The End Game.
I hope you enjoyed this conversation as much as I did.
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Have comments about the show, or ideas for things you’d like Taylor and Jason to discuss in future episodes? We’d love to hear from you at info@mutinyfund.com.
Transcript for Episode 18:
Taylor Pearson:
Hello and welcome. I’m Taylor Pearson and this is the Mutiny Podcast. This podcast is an open-ended exploration of topics relating to growing and preserving your wealth, including investing markets, decision making under opacity, risk, volatility, and complexity. This podcast is provided for informational purposes only, and should not be relied upon as legal, business, investment or tax advice. All opinions expressed by podcast participants are solely their own opinions and do not necessarily reflect the opinions of RCM Alternatives, Mutiny Fund, their affiliates or companies featured.
Taylor Pearson:
Due to industry regulations, participants on this podcast are instructed to not make specific trade recommendations nor reference past or potential profits and listeners are reminded that managed futures, commodity trading, Forex trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they’re not suitable for all investors and you should not rely on any of the information as a substitute for the exercise of your own skill and judgment in making such a decision on the appropriateness of such investments. Visit www.rcmaam.com/disclaimer for more information.
Taylor Pearson:
In this episode, we talk with Mike Green of Logica Funds. Mike formerly ran Thiel Macro, Peter Thiel’s family office macro fund. We talk with Mike about knowing when and how to monetize your options, what he means when he says the history of markets is just a history of transactions and what he would teach in a one-day seminar about the federal reserve. I hope you enjoy this conversation as much as I did. So yeah, I guess my most important question. Why is the princess bride so good?
Mike Green:
Why is the princess bride so good?
Taylor Pearson:
Yeah.
Mike Green:
Well, I mean, it’s a practically perfect story to begin with HL Morgan Stan has just crushed it with his character development, et cetera. But at the end of the day, I think what’s so awesome about the princess part is that you know it’s fantasy and yet in so many… Beyond fantasy, it’s actually farce. Right? But in so many ways, it’s just such a great film to speak to elements of the human condition. Right? You’ve heard me talk about the dynamic of the poisoned chalice game between Vizzini on the Dread Pirate Roberts. There’s so many layers to that story. There’s so much insight in terms of the individual and the dynamics that you hear me talk about it in terms of understand the game that you’re playing, that what seems like a movie for children is actually a timeless classic. I just truly, truly love that aspect of it.
Jason Buck:
When I was in high school, Spanish class, I’m not sure if they do this anymore, but you had to choose your Spanish name and my Spanish through high school was [Anigo 00:03:00].
Mike Green:
Yeah. [crosstalk 00:03:01].
Jason Buck:
Yeah. Exactly. I’m not left-handed.
Taylor Pearson:
They have a drive-
Mike Green:
Five fingers by the way.
Jason Buck:
Five.
Mike Green:
Yeah.
Taylor Pearson:
[inaudible 00:03:11]. They have a drive-in movie theater in Austin. I went with my wife and we watched, we see it like once a year kind of thing.
Mike Green:
Yeah. It is one of the movies that I can sit down and watch at any point in time.
Taylor Pearson:
Yeah, likewise. We’re good. Now that we’ve got the most important stuff out of the way we can talk about the investing side of things. I guess I kind of wanted to have you start, I guess you’ve recently joined Logica. Prior to that you were working with Peter Thiel, running his macro fund. That seems like a pretty good gig. We’d love to hear just kind of why you chose to join Logica and kind of what you’re up to right now, and then we can dive into some details.
Mike Green:
Sure. So as you mentioned, from 2016 to 2019, I was involved with Peter Thiel working for his effectively family office, running macro strategies within that in the liquid components of his private family office. For me, there were a couple of different components to it. The single biggest one was I actually wanted to be able to step out from behind, kind of a shielded position where I was simply managing a single individual’s money and really wanted to put to work some of the theories that I had in terms of managing outside money. And so, Wayne and I met each other over Twitter, which sounds completely insane. But then again, I also met my wife in a nightclub, so I seem to be good at picking up longterm relationships in locations that you’re normally not supposed to.
Mike Green:
So Wayne and I met over Twitter. I was impressed with some of the commentary, particularly in the volatility space. The two of us sat down for a coffee in Los Angeles and what was supposed to be a 15 minute meeting, turned into a two hour meeting and ultimately, moved to me considering bringing Wayne in as an external manager for Peter’s funds and then recognizing as I dug deeper into his process, that what he was doing was functionally identical to what I was doing in the discretionary space. So my views around equities in the United States was that we had begun to exhibit extreme fragility in both directions, upside and downside. And that, that was being driven largely by the growth of passive vehicles. And so the markets were becoming increasingly correlated to the downside. They were becoming increasingly inelastic to the top side. So as money would come in, it would force prices to move in an aggressive fashion.
Mike Green:
If that’s your belief, if you think the market is fragile in both directions and you have to adopt a straddle as your payoff structure where your long calls and your simultaneously long puts, it leads to a long volatility exposure, that’s actually somewhat of an afterthought, right? You’re not actually trying to trade VIX instruments like somebody like some other long volatility managers are, you’re expressing a directional point of view, but the vehicle that you’re using, the options that you’re using gives you that long volatility exposure, as well as the directional component. As I looked at Wayne’s process, it was almost identical to what I was doing, except he had actually systematized and quantified it. And as a result, it was a much easier process to spend time thinking about and much less time actively managing.
Mike Green:
That was really important to me because ultimately, we’re in an environment where things I think are changing quite rapidly and some of the things, some of the features of the market that we have historically taken for granted may very well not characterize the market going forward. And so the luxury of being able to step into a situation where with very minor modifications, to Wayne’s underlying product, we were able to dramatically improve the outcome. And so just very quickly prior to my joining, the firm had been focused around and tail risk products. The emphasis had been on left tail protection. When I looked at what Wayne had built, my immediate reaction was wait, “This is incredible, except you needed to make this modification. You need to increase the op capture component to it.” And when we did that, we created the logical absolute return product moving from a negative 0.7 correlation to the S&P to a roughly zero correlation to the S&P returns, roughly doubled.
Mike Green:
We ultimately think that the profile fits very well with the dynamics that you’ve heard me and other people have been on many interviews discussing the dynamics of passive investing. So that really fit very, very well with very minor modifications to the process. Then the second thing that was so impressive to me was that usually people who come from a quantitative background tend to believe that they have discovered some type of a magic system, right and that their insights have so much alpha associated with them. One, they don’t want to share them. And two, they tend to take tremendous offense when somebody points out, “Hey, you’ve gotten everything right, except…” Right?
Mike Green:
Wayne’s reaction was just very, very different. I mean, immediately it was one of these collaborative environments and that’s largely characterized accents. That’s the last thing I would just say in terms of joining Logica for the first time, I really actually have somebody who was a direct peer of somebody who is intelligent. So, candidly says probably well in excess of mine. And you’re looking at a situation in which the two of us are able to work together to achieve an outcome that I think is going to be a much more powerful product in a year than it is even today.
Taylor Pearson:
Then yeah, I just had a lot of digging a little more about exactly sort of how you all execute that strategy. So I guess a straddle on for people that aren’t familiar as typically you’re buying a put and a call at the same strike price to level the market in that way you know what you’re betting. So it’s a long volatility profile, what you’re betting on is there’s going to be volatility in one direction or the other, and you’re kind of agnostic as to what that is. I know you all implement that in a significantly more kind of sophisticated way, but yeah, what does that look like and sort of talk us through how that’s implemented and how you all think about it?
Mike Green:
Well, so the really unique thing that I would argue that Wayne had done is that he had actually taken that straddle, which traditionally is thought of as same underlying instruments. So for example, S&P calls an S&P put together. With that type of straddle, you’re effectively making a bet that the market is going to move more aggressively in either direction that is priced into the probability distribution function represented by the pricing of those options. Right? So, Wayne had quite cleverly constructed the portfolio somewhat differently. He had actually built an up capture module that had a component of what’s called dispersion, where you’re buying call options on single stocks. To the downside, he had focused on the S&P in large part because it was a recognition that the underlying characteristics of the S&P were volatility would rise and correlation would rise, made it a more attractive trade to the downside than a basket of single stocks.
Mike Green:
Right now, there are some conditions under which that changed, and that’s an area of research for us that the two of us were working together on. But in large, what we’ve done is we’ve split that up capture and that down capture both in terms of the composition. So the up capture has about 50 to 60% of its exposure is typically encapsulated with single name stocks, giving us a dispersion characteristic, right? So that means that if one or two of the names in our portfolio in the up capture managed to perform, then we’re likely to defray the costs associated with holding that straddle, which is the single biggest risk that you hold.
Mike Green:
You pay a premium for that uncertainty. And so Wayne had introduced a value added up capture component in terms of the single stocks, and then those dispersion characteristics become important. The second thing that we do is that we split our time periods, right? So we have a fast moving and a slow moving component. In the slower moving components, what we’re really doing is we’re looking for non-recourse leverage effectively the ability to express a point of view that we think the market is going to continue to move in a direction, but if we’re wrong, the most we can lose is what we’ve expended in premium. Right?
Mike Green:
That becomes really important if you think that you’re trading something that’s fragile or is in bubble, right? Because what you’re ultimately saying is, I want to be able to gain exposure to this. You want to buy a bubble as you’re going up, but you also don’t want to have exposure that ultimately leads you to the risk of catastrophic loss. And so unlike most who think about options as providing kind of a speculative aspect to the portfolio where they will buy an out of the money option typically, and make sure 10 times or 20 times their money, on that type of lottery ticket investment, those trades have very low, what we refer to as expectancy or low probability, right? And so we’re actually focused on the exact opposite end.
Mike Green:
We’re more interested in positive expectancy trades, trades that you would expect to have happen more frequently than not, but still maintain that convexity effectively, that non-recourse leverage, which means when the event occurs, we didn’t have to put nearly as much up. Right? Easiest way to think about it, people have heard me refer to it in this term before, I’ve discussed this before. We recognize that the influence of passive among other features in the market has changed the market structure, caused it to deviate from the behavior that would have been historically built into the models that most people think about valuing options with. Effectively the casino now has an unbalanced roulette wheel, right?
Mike Green:
So you’re walking into the casino. You realize that the roulette wheel now comes up black 55% of the time, right? You can construct a trading strategy around that, right? You can just construct a betting strategy around that, but it requires you to recognize that your trading activity and your betting activity has to reflect the relatively modest advantage that you have. Right? So knowing that the market comes up black or the roulette wheel comes up black 55% of the time, you have to accept the fact that you’re going to lose 45% of the time. You have to respect the fact that stochastically, right? The random component of that means you could very easily lose multiple times in a row. Right? And so you have to be cognizant of that as you think about your betting characteristics. And so that’s effectively what we’re doing. We’re running a de-tuned version by going in the money, using higher positive expectancy to deliver a more stable return stream than you would get if you were speculating without the money. Right?
Taylor Pearson:
So, the positive expectancy for you, we’ve talked a lot about the passive investing thesis and world linked to some other interviews you’ve done [inaudible 00:13:49] people want to listen more to that, but you see that, the positive expectancy is being mis-priced effectively because people fail to understand this dynamic of passive-
Mike Green:
Yeah. And just in really, really simple terms, if you think about the underlying assumption, when you buy a call option or you buy a put option, right? You’re not actually buying the strike against today’s spot, you’re buying it against a forward. And that forward by virtue of the assumptions that are built into option pricing models and the need for what’s called a no arbitrage condition under a put-call parody, the only possible assumption for that forward can’t contain information in the classic sense, right? It can’t contain… His earning is going to be better or worse. Is the company going to have a favorable tax treatment or anything else, right? That fundamental information. The assumption is that has to be embedded in the current price. And so that forward price can only differ by cash dividends and the risk-free interest rate. Otherwise, “no arbitrage condition” would emerge, right? There would be a riskless arbitrage that would allow you to create the risk-free rate with a higher yield, right?
Mike Green:
That’s the assumption behind it. But, those assumptions are founded on some very simple assumptions themselves, right? Including the idea that the market is perfectly efficient in an EMS EMH type framework. So today’s price is always the best price, right? Likewise, those assumptions require the idea that markets are largely frictionless, so people coming in and out don’t influence the markets. When you look at the impact of passive strategies, it becomes very clear. You’ve seen the empirical evidence that we share to show this.
Mike Green:
It’s become very clear that that surface has become distorted. That return stream has become distorted. We can point to that and identify effectively that those forwards no longer accurately priced, right? What’s called drift in the pricing of options, right? Or the performance of options to be more accurate. That’s what we’re largely exploiting. Right? That’s what we mean when we say the roulette wheel comes up 55% of the time as compared to 50%, which would be a “fair game.” Right? And so that’s what we’re ultimately trying to take advantage of.
Taylor Pearson:
And then, with options in general, one of the biggest dilemmas is monetization, right? If you take profits and you’re going start exposure. If you hold on, then you risk the meaner version, you kind to bleed to death. How do you all think about monetization of your options?
Mike Green:
Well, so that is actually the single biggest challenge that most people who are on the long volatility strategy suffer from, right? Because the cost of running an explicitly long vol strategy, I expressing it in UX futures or VIX futures, right? Those tend to be prohibitively expensive. The cost of that carry, the negative carry associated with it. People are very familiar with the positive outcome for the movie, The Big Short. But if you remember the phase up until things started to go in his favor, his investors were screaming at him, “You’re going to lose all your money. You don’t know what you’re doing.” Et cetera. Right? That’s the challenge of running a long volatility exposure, is that you basically have continuous losses, right? Until an outside event occurs and when that outside event occurs then everyone says, “Hey, you’re a genius.” Right? But if it doesn’t occur on schedule, if it doesn’t occur frequently enough, forever after you’re a goat and basically people don’t sit around waiting for those outcomes.
Mike Green:
Quite famously going into the events of February CalPERS here in California, ended their hedging program a month before the events of March, 2020. Right? I can’t really blame them for that. Right? Because they sat on that position and lost money and lost money and lost money for five, 10 years, all the while their manager is being paid and just constantly reassuring them, “Hey, you’re going to be really happy at some point.” Right? Yes. But it’s not realistic to expect people to hold those positions. And so part of what we’re trying to do is take that straddle, take that penalty associated with the straddle, lower the cost to it, close to zero, if not positive expectancy. We actually think that we can make money under most conditions and then be exposed to that negative correlation. Right?
Mike Green:
I don’t think it’s at all unreasonable that people react negatively to that type of behavior where people are saying, “Just trust me, you’re going to lose money until it really matters.” Right? That kind of sits at the core of what we’re trying to do. We recognize that’s just not reasonable to ask people to do it. It’s important to us that our portfolio be constructed with the expectation that you’ll breakeven to make money under most conditions.
Taylor Pearson:
I guess another thing we, this often comes up when we’re speaking about your strategies, but what is gamma scalping?
Mike Green:
Gamma scalping is an ancient Indian technique.
Taylor Pearson:
I’ve tried to explain it and done much worse than that. So you’ve already improved on my most recent explanations.
Mike Green:
So gamma scalping, we actually talked a lot about this in our monthly letter that just came out today. I’m sure you guys had a chance to read this. So in really simple terms, you should expect that the market is going to behave in something that people think of as a random walk, right? This is the way that we got these random walk down wall street sort of stuff, right? A random walk is ultimately somewhat mean reverting. It has the potential to go way off, but your base case scenario is that if there’s a 50-50 chance that you’re going to go right or left, first you’ll go right and then there’s roughly a 50% chance you’re going back the other direction. Right? And so we’re incorporating an element of that in terms of how we’re building our straddle or effectively saying, “If the market goes up, we’re going to take a little bit of profits on the calls that are held within our portfolio and we’ll add a little bit more to the ports effectively re-centering that portfolio at any given point in time.” Right? That’s what we’re referring to with gamma scalping.
Mike Green:
It actually mimics behavior that is done by the dealers themselves who issue options, right? They are involved in this process as they’re trying to hedge their exposures and think about these types of dynamics. And so we’re mimicking that to a certain extent. It just allows us to take a little bit of profits at any point in time, pocket those and prevent us from bearing just absurd costs associated with the random walk dynamics in normal market environments. You mentioned, I’m sorry, the point of how do we think about capturing the returns? This is one of the benefits that we have because most people that are being forced into a long volatility position, cause that high cost to carry, they are selling another type of volatility, right?
Mike Green:
So instead of trading a, buying a call and buying a put they’ll often buy a call spread or they’ll buy a put spread, right? Which means that they have purchased a near the money option and sold and out of the money option, where people will put back spreads or callback spreads, where they have purchased the out of the money, five of the out of the money and sold the near the money to defray those costs. Right? The challenge with those positions is that they become extremely path-dependent, right? So if you think about a really simple example of a put-spread, you’ve purchased one foot, you sold another foot.
Mike Green:
If the market falls through those prices, you don’t make 100% of that put-spread right? You haven’t fully captured it because the option that you’ve sold has risen in value relative to the option that you purchased, the put option that you’ve purchased. And so what you’re tempted to do under those conditions is either try to wait for the market to move even further in your favor, right? Which would allow now it’s become closer to a Delta one instrument you’d begin the dynamics of realizing 100% of those profits. Or you’re forced into a situation where you’re basically hoping that the market doesn’t move very much and you allow that deeper out of the money put option that you’ve sold to decay in value and help you retain, make more of the profits that you ultimately could have, right?
Mike Green:
For us, that becomes a challenge because it ultimately means it’s difficult to monetize, right? You find yourself in a situation where you’re hoping things are happening rather than being in control of it and saying you can act proactively. And so again, one of the unique features is that we don’t sell options in order to buy options. We don’t sell volatility in order to buy volatility. We’re doing something totally different. I mean, I explicitly think of it as we’re value investing in options. We think all options are mis-priced. We think the fragility that we’re talking about in both directions, means that the options themselves are too cheap, under most such circumstances. And as a result, we’re almost always going to want to be buying them, putting them into our inventory and finding an appropriate way to sell out of that inventory, almost like we’re an old time cotton dealer.
Mike Green:
I use that example, right? Buy when it’s cheap, we scalp a little bit in the form of gamma to effectively lower our cost of inventory. And then when a market event occurs, hopefully we’re sitting on a big pile of cotton that we can sell into a high demand environment and take those profits and honestly, be willing to let our inventory, our warehouse become empty under those conditions. Right? We saw a good example of that in March, as you guys know where things got so chaotic and so extreme, we wrote our March letter and basically said, “Look, there’s a component of which volatility gets to a level that it becomes almost the universal emoji for a shrug. Right?” I don’t know, I don’t have any clue what’s going on. Right? And so when volatility becomes that bid, I don’t know people are holding for. Right? I mean, I get it. I understand that there’s a role in a portfolio for that, but that’s just rank speculation, right?
Mike Green:
That like, okay, this is the end of the world. Right? Well, it hasn’t ended yet. It takes a remarkable level of hubris to think that you’re going to be there when it does. Right? Or that you’ve nailed it in that way. That’s again, to use The Big Short analogy, right? This is Steve Carell sitting there saying, “We have to sell. If we don’t take it now nobody’s ever going to pay us.” Right? At some point you got to sell these things and you got to exit and holding the naked option, the single put, or single call as compared to that spread facilitates that for us.
Jason Buck:
There’s several things I want to unpack there. One is you’re correct. I guess you started getting 80, 90 levels on the VIX. You’re starting to sell out of that inventory and taking your winnings and moving on, you guys also have proxies, with maybe more Delta one exposure items, but also as your student of history. I mean, obviously then if you’re 80, 90, some people go, “Well, this is how I’m going to start selling ball.” And you know better than that. Because you’re a student of history and you know that the Nazi stock market got up to a 1000 vol. So if you’re monetizing at 80 90 vol, as you, I guess would say, this is not what you guys have the directive to do, if it runs from 80, 90 vol to 300 vol you’ll maybe move to proxies, or how do you guys think about that? Or you’ve done your job at that point.
Mike Green:
I’d say that there’s a combination of factors. So I mean, one of the things that came out of the process in March for us was that we developed a new module that would allow us to hold a little bit longer, right? So basically better hedging characteristics. As you come back out of that if we’re to fall from that 80 plus level. We also have a macro overlay effectively components that facilitate some of those same dynamics. And this was actually more than anything else, but what caused our portfolio to move relatively rapidly into a de-leveraging as we went through the March events, for the very simple reason that those components are built on US rates, the US dollar and gold, which we think of as basically orthogonal assets that have risk-off characteristics, but don’t actually have a discrete vol component to their pricing. Right? And so you we’re buying them in Delta one as compared to option for. Right?
Mike Green:
If you looked at the events of March, what was fascinating about it was that it was actually precipitated, the worst parts of the March event were precipitated by the fed cutting interest rates. I believe it was on March 12th. That actually set off the blowup of an exchange participant in the US rates market, that meant that their positions faced an exchange liquidation would have to be sold these large positions that have to be sold off in size. It caused tenure interest rates to collapse, right? So they went to 30, I think it was 31 basis points, 32 basis points, right? That was an expectation of this large amount of supply coming to the market in the form of this exchange liquidation that basically every participant knew they couldn’t step in front of, right? The irony, what really blew people up is the people who had been using rates to hedge their portfolios. And so once that actually cleared on give or take March 12th, then rates rocketed back in the other direction.
Mike Green:
They went from 32 basis points to 120 basis points and people who had been using rates to protect their portfolio suddenly found their hedges going back against them, in an extraordinarily violent way, forcing them to unwind their portfolios, selling rates by helping drive it back to the 120 on the 10 year interest rate and also being forced to unwind their portfolios by selling equities, right? They had to take risk down in aggregate. We were fortunate in that we were largely able to sidestep that because we saw this extraordinary move in rates. We recognized what was actually happening, took advantage of that.
Mike Green:
Again, we’re not holding for the end of the world. We’re holding for something that looks like the end of the world. Right? And so we took profits on those positions. That meant that our portfolio had less protection than we normally would want it to have. And so we’re forced to start that process of de-leveraging fairly quickly and candidly. Somewhat luckily, we sold our last vol positions at the absolute peak in the vol markets. And so we consider it a combination of being prepared and also being lucky in that, in that dynamic.
Jason Buck:
Yeah. Well, I would always take lucky at the end of the day. Going back to the gamma scalping, is it fair to think about it a little bit more simplistically is if you’re holding straddles in your long straddles, you have that nice U shape PNL, where most people like you said get hurt as in that grind, that data grind down. But if you overlay a mean reversion strategy, which gamma scalping is, it’s implicitly short volatility. So you’re pairing a little bit, but it’s a linear, short volatility while you have comebacks on ongoing out the straddle.
Mike Green:
You nailed it. Absolutely. That’s 100% correct. And so another way of saying that is reversion by itself is short volatility, right? But it doesn’t have the convex characteristics that a actual short vol position would hold. Right? This is one of the things that I would just really highlight that people need to fully, fully appreciate and understand. We often look at the pattern of returns associated with short vol and say, “Oh, this looks a lot like equities.” Right? Or it looks a lot like high yield or it looks… There are a ton of similarities behind these things. And you’ve heard my discussions with… I mean, I’ve had these discussions with you, Jason in particular, but I’ve also had these discussions quite publicly when people are short volatility as an equity replacement or as a risk replacement, one of the really important things to recognize is that you’ve taken on unlimited liability, right?
Mike Green:
I mean, we talk about a VIX at 90 being high. You mentioned in the immediate aftermath of World War II, the formerly Nazi stock market had a single day down 90%. Right. Which annualizes to a volatility of not actually 1000%, it annualizes to something more, more like a 11000%. Right? You ended up in a situation where you look at that sort of vol and you’re like, “Okay, this is how crazy this could get.” Right? So if I shorted it at 90 and it went to 11,000, that’s a very, very bad day. Right? We just don’t do that and we don’t think that’s right, but it does lead to this kind of, because volatility tends to be inversely correlated with equity price performance, it does lead to this somewhat simplistic view that says, “Well, you can treat short and roll as a risk replacement. You can treat it as a way to generate yield. You can treat it as a way to generate income.”
Mike Green:
That’s true until lots and lots of people start doing that. And then all of a sudden that market becomes subject to its own liquidity constraints, its own transactional dynamics. And it can explode in a way that you’ve just never imagined. We saw a little bit of that in March, right? I mean, strategies that were not supposed to ever lose money literally blew up. Right?
Jason Buck:
Yeah. You’re bringing that absorbing barrier, the left tail closer and closer each time, especially when you’re using a derivative to sell valance or the equity replacement. And then to drill down a little bit more though, a few things you said that I think are important to highlight. You talked about, when your long options you have non-recourse leverage. I think it’s really important to think about that because we thought that it’s very similar to the way you did moving from maybe just tail risk to the absolute risk. Is, if you have non-recourse leverage on both the puts and calls, if the market rips down, like we see in February or March, you’re only out the premium on the calls.
Jason Buck:
So you still are able to dramatically take advantage of the left tail and vice versa. If we saw rip up, you’re only losing the premium on those puts or calls. So at the… That helps you garner returns during a risk on cycle. Meanwhile, you’re waiting for that risk off event to happen, but you have non-recourse leverage on each side where the actual losses are truncated solely by the premium and the gains are unlimited and we don’t know that they are a priority.
Mike Green:
Yeah. So, I think that’s absolutely correct. I would actually highlight that’s one of the key differences between what we’re doing and people who are choosing to express an absolute return profile, by shorting stocks, right? So we saw the downside of those types of strategies in the April, May time period, where many investors who had run portfolios that were “balanced” right? They had calculated the historic betas and they were long XYZ and short one, two, three. Those completely blew up in the opposite direction as people were forced to cover those very illiquid positions in a very thin market. Right? And so bankrupt companies like Hertz going out 500, 600% just killed people. I mean, it just absolutely killed people. Meanwhile, as you point out we lost our put premium, right. But that’s a finite amount, right? The most we can lose is what we paid for it. So it’s just a lower risk way of expressing the same underlying dynamics with some unique characteristics that we believe are facilitated by the dynamics around market structure.
Jason Buck:
We were talking about a little bit about monetization too, but I think what’s come up a lot lately is, especially on your work on passive is why would you want to be long the right tails? Why would you want to be long calls? Because people are like, if the market goes up, that’s great for everybody. You and I have talked about this before previously is that you have to still monetize it. And that’s what the calls maybe allow you to do is to monetize the rip up in the markets. Whereas if you’re just holding stock, you’re assuming that you’re going to be the last chair standing and that you’re going to get out right at the perfect timing. And the long calls allows you to monetize those positions as the market rips up without trying to get your timing perfectly down.
Mike Green:
Yeah. If I had perfect timing, I wouldn’t have to worry about taking money from anyone else and I’d just be managing my own trillions of dollars. Right? So this goes back to the kind of the underlying thesis of fragility, right? I don’t know which direction it’s going to go on any given day or in any given month and I need to express that humility. Right? So, that requires me to have the ability to participate both in the upside and the downside and have a structure and an insight effectively that allows me to stay in that position. Right? So a lot of people, again, in the long ball space will largely be positioning themselves to hedge people’s downside protection and can rationalize for themselves that, that’s fine because while they’re losing money, the rest of their client’s portfolio is making money. Right? I would suggest that that creates some real challenges, right?
Mike Green:
Among other things, people who tend to buy that type of protection tend to do so because they’re relatively concerned about the world. As a result, they tend to be overly conservative within their portfolio and then on top of that, choose to hedge via these strategies. Right? And so it leads to significant under-performance and that ultimately leads to capital instability, which is just another way of saying you get fired because the CIO or your plan decides to change strategies watching their neighbors get rich, watching the competitor down the street out perform and take their capital. It does nobody any good to kind of express that double, super safe expression. Right?
Jason Buck:
Total super safe. And then part of the… If we look at a textbook definition of buying a straddle, you’re going to buy right at the money puts in calls. But, one thing I love that you always harp on is, whenever somebody brings up a sacred cow that always makes your hair on the back of your crawl and you-
Mike Green:
I love thick hamburgers. Yeah.
Jason Buck:
Exactly. So, we’ve discussed, you look at buying the shoulders and most people will say, no, you sell the shoulders. So I’m just curious without getting away guys, the secret sauce is, how have you thought about as the markets have evolved, especially in the last three to five years and with overselling in the options market? How do you think about buying those shoulders where most people want to sell the shoulders?
Mike Green:
I mean, I think you answered the question. I want to buy those shoulders off, to sell the shoulders. Right? But the easiest way to think about it is that you always want to look at what other people take for granted, right? And so, following or leading into 2007 and coming out of 2007, what we heard is the narrative that, the tails are mis-priced, right? The tails are mis-priced. As a result, a number of changes occurred in the market, including the fact that most regulatory systems now require many of the market participants, especially banks and insurance companies to hedge those downside exposures. Right? And so there are tons of natural forced buyers of those deep out of the money calls or I’m sorry, deep out of the money he puts.
Mike Green:
To the top side, it’s more of a low expectancy trade. And so, we just kind of flipped that on its head. And we’re like, look, if the events occur that those tails pay off, one, they’re priced at a level, so that you’re going to have a very low expectancy in terms of it happens quite infrequently that they pay off. When they do pay off, they can pay off extremely well. But if they have been bid up by this regulatory framework, that’s actually creating conditions where you have overpaid for that bet. In the same way, let’s go back to the roulette wheel. This should come as no surprise to anyone, but when you go to a roulette wheel and you’re betting on black or red, there’s actually a spot that’s neither black nor red that works to the casino’s favor, changes it away from you, right? Likewise, when you go to buy one of the numbers on the wheel, right? There’s 36 numbers, but 39 spaces. And so the odds are against you and that sort of framework.
Mike Green:
Over time, unless the roulette wheel has an error in it, right? It is imbalanced. You’re going to lose money. And so that’s just the easiest way to think about what’s now happening in those tails is like, yes, every once in a while, people do win the lottery, but in aggregate people lose the lottery. Right? I would argue that, that’s the same underlying feature. Now it’s very different if there’s actually something that’s happening structurally that’s changing the shape of the market, changing the structure of the return, if the conditions that are required for pricing are not true, right? So things like the efficient market hypothesis.
Mike Green:
If that becomes increasingly untrue, then you can actually exploit those systems and where you want to exploit them, it turns out as effectively in the shoulders, right? You want to play for that one, two percent move, not for the 10, 20, 30% move. And you want to, if you have a positive expectancy trade, like again, going back to the roulette wheel, you want to bet as often as you can. Right? And so instead of doing the deep out of the money and basically saying, “Okay, I’m going to stand the bat and swing as aggressively as I possibly can with the hope of hitting a home run.” Man, just hit the singles over and over and over again and you’re going to be fine. Right?
Jason Buck:
Yeah. I think that, that’s really important to highlight because I think that’s what you spoke about, about you and Wayne coming together is that the long volatility, tail risk space, as we know all too well is you have people that are either structurally or dynamically are buying options or third VIX trading, but there’s nobody that’s quite getting as many singles or up to bats as you guys are with gamma scalping that position daily. That’s what brings in that law of large numbers a lot faster than anybody else, it’s waiting on maybe lottery ticket wins. But at the end of the day, no strategy is perfect. So everything has downside risk.
Jason Buck:
I think you guys talked about this in your monthly newsletter is maybe part of that is on part of the upside call package, a portion of that is in this dispersion trade with the individual inelastic stocks that you believe are going higher. But if the market grinds higher due to five tech names in the S&P 500, and you’re not getting that mean reversion on a daily basis, you can lose out on your gamma scalping, and then the markets grinding higher, but you’re not capturing any of that upside. There’s ways to limit that bleed, but these things can happen. And that’s just, I guess, part of the product that you’re dealing with.
Mike Green:
Yeah. I mean, every choice has a cost and a benefit to it, right? This one is actually a great illustration of that, where our systems, each of our system had a modest negative contribution, right? And so, our down performance was quite modest, but that was a combination of almost every aspect of our portfolio encountering a little bit of difficulty. Right? And one of the things that happened in the month of August was that you had one, a very narrow market advance. And so dispersion and even more so amongst very large cap names, right? So we draw our stocks from the S&P 500, but the month of August had very few stocks in the S&P 500 advance and it was driven largely by a very select group of tech stocks in which a variety of well-publicized buyers of calls got super aggressive. Right?
Mike Green:
The second thing that leads to is that we also try to fade a component of that through our gamma scalping. Right? And so if the market, if you think about, again, that dynamic of left to right left, right. The market going up, the market coming back down, and you’re trying to use those opportunities to effectively lower your trading costs, lower your exposure, when you have an environment like August, where we saw in a normal environment, we go through these statistics in our monthly letter, in a normal environment, you would expect your most frequent dynamic is the market goes up, then the market goes down, right? Roughly 25% of the time, you would expect to see four up moves in a row, right? About five percent of the time you would expect to see somewhere in the neighborhood of 17 up moves in a row.
Mike Green:
In August, you had 20 up moves in a row and it’s just an extraordinarily low probability event. It was actually driven by the fact that you had this very small number of very large market cap companies that were being pushed upwards through aggressive call buying. Right? You’re the very first person to accept exactly as you said, there is no perfect strategy. And so sometimes, we won’t capture those features. It was encouraging to me in a lot of ways though, because the primary feature that we’re trying to capture is this up drift that’s being caused by passive investing. That wasn’t the dominant feature of this month. And so the fact that we didn’t capture it in a weird way actually says to me, “Oh, we’re doing something right.” Right? It didn’t work out. Right? But the process itself, I wouldn’t actually anticipate that it would work out correctly in that dynamic.
Taylor Pearson:
You talked about non-recourse leverage, I was thinking, I borrowed that from you. It’s a good line to talk about sort of options, but it made me think, as you’re talking about the… Who’s the ex city CIO that had the quote about when the music is playing, you have to keep dancing. It would be nice to… Options are almost like you guarantee, you lose whatever that premium is, but you have three quarters of a chair when the music stops and everyone tries to jump back down.
Mike Green:
Yeah, no. I mean, that’s actually part of the reason I use… That experience is part of the reason I use the term non-recourse leverage. Right? Because if you think about what you wanted to do in the housing bubble, you wanted to participate. Right? I mean, like if you didn’t buy a house in that time period, between 2000 and 2007, what were you thinking? Right? I mean, it was free money in so many different ways. The problem is that that was non-recourse in a slightly different fashion, right? So one, in order to gain access to the full leverage effectively get that black 31 sort of exposure, people would take out 110% mortgage. Right? And they would do that by having a non-recourse portion in the first lien and then a recourse portion in the home equity loan that existed. Right? And so many people got trapped in that, by not understanding the difference between that recourse and nonrecourse component.
Mike Green:
The second is that there was actually recourse to your credit rating, right? So when you are personally liable for it and you stop paying on that mortgage, not only do you not gain exposure to the potential recovery in those prices, but you also restrict your access to future credit, right? For a period of roughly seven years. It shouldn’t have surprised to anyone that we saw things begin to accelerate roughly seven years after a huge portion of the economy got its credit ratings back. Right? And so, you look at those types of dynamics and then you recognize that options traded on exchange give you that same non-recourse leverage. But if it doesn’t work out, I just walk away from it. Nobody comes after me as like, “Hey, you got to pay this.” Right? I don’t have to do anything. It just expires, it expires worthless. That’s a super, super valuable feature. If you think that there’s actually curvature convexity to that return service, which is what we think is happening with the dynamics of passive.
Taylor Pearson:
I wanted to go back, you mentioned sort of March 12th, the event about sort of the market clearing transaction. In preparing for this conversation, I was listening to a Tyler Cowen podcast. It had one question where he basically reads their entire back work and he says, “I’m going to attempt to summarize your entire life’s work in a single thing.” And I was trying to figure out what I would do. But the phrase that came to mind for me was, you [inaudible 00:45:27] the history of markets is a history of transactions.
Mike Green:
Yeah.
Taylor Pearson:
And so, yeah. I was hoping you could… What do you mean when you say that and then maybe, I think how does that lead you to think about markets in a different way and maybe some ways you’ve seen that show up?
Mike Green:
Well, so what I mean when I say that, right? This is that the prices that we see on the screens only exist if transactions occurred there. Right? So that meant that somebody had to be motivated to buy and somebody had to be motivated to sell. What we don’t know is why, right? So we presume that somebody has information that says, “Oh, well, I think the stock is worth more.” Or, “I think this bond should be trading higher than it is today.” But that transaction can also occur because somebody was actually short that stock and being tapped on the shoulder by the risk manager or facing a redemption from a client that says, “Hey, you have to buy this back.” Right? And so they think it’s actually priced too high and they’re forced to buy prices at an even higher level. Right?
Mike Green:
So the same thing happened when you talk about the events of March 12th, with the rates market, where a firm went bankrupt and the exchange said, “Hey, we have to sell a whole bunch of this stuff.” And everybody on the exchange said, “Oh, I’m not getting involved.” Right. And not until prices got so low that someone’s like, “All right, I’ll take the whole thing down.” Right? Nobody in their right mind was going to step in front of that because potentially the losses that they would incur if they took a partial position in that trade, if they bought a little bit, but not enough of it to stop the prices from falling, then they’re potentially looking at losses that could cause them to go bankrupt. Right?
Mike Green:
So literally just everyone stepped away and backed away. And we see this as part of the dynamic that I talk about in terms of fragility that has emerged particularly in the aftermath of the global financial crisis and really I would actually lay it at the feet of decimalization in terms of trading activity, we killed the specialist system. We killed the system that required corporations, specialists, right? Individuals or corporations, more accurately to commit to providing capital to facilitate an orderly market. The environment that we have today, where high frequency trading firms make markets, they have no commitment to the company to make an orderly market. They don’t have to post capital or guarantee to post capital to facilitate an orderly market. They have the opportunity, but not the obligation to do so. Right? That’s actually a really, really important distinction because it means more and more, you enter into a situation where the transactions occur or a function of someone desperately trying to find somebody to sell something to them, or desperately trying to find somebody to buy something from them. Right? It’s just a very different environment that has existed even 20 years ago. Right?
Mike Green:
I mean, just radically, radically different. Firms like Spear, Leeds & Kellogg and Le Branche are just gone, right? They just don’t exist. And that capital, most people don’t know this dynamic, they’re roughly familiar with the story of the crash of ’87. But what really happened in the crash of 87 was that the specialists, those who had control over the individual stock order books on the New York stock exchange, they incurred losses trying to facilitate an orderly market. As those losses magnified the banks that they had relationships with pulled their lines of working capital. And so we’re not going to expose ourselves to these potential losses. The minute that happened, they were no longer able to facilitate market liquidity and the market collapses.
Mike Green:
It’s not like somebody who was making a reasoned argument, that prices should be 20% lower or 30% lower. It was literally the capital didn’t exist to allow that transaction to occur. And so what we see in the history books is something that’s different than any other form of reasoned rationalized thought processes that people tend to associate with how markets actually work. So that’s what I mean when I say it’s a history of transactions, not actually a history of information.
Jason Buck:
Just thinking about ’87 again, the idea of portfolio insurance at that time was based on EMH and which if it doesn’t account for it, it slips and jumps and liquidity provisions and that’s exactly what-
Mike Green:
Absolutely. I mean, 1987 can be in the simplest form, thought of as a discontinuous market event. If you’re running large levered portfolios under the assumption that there are no discontinuous events, all hell can break loose.
Jason Buck:
If any of us were buying put options before put skew prior to ’87, we could have probably made a career since then off of it, if you know what I mean.
Mike Green:
I mean, yes. That’s correct. And so that was actually one of the features that emerged after ’87, right? It was prior to ’87, there was no skew in the markets, right? There was no premium that was charged for that deep out of the money put. People didn’t understand that Black Shoals was just a model, that was an approximation for how things should work, right? Until it was called into doubt and then suddenly every risk metric on the planet suddenly said, “You can’t sell those things.” Right? And so what happened if you can’t sell them, prices are going to rise for them because the demand is relatively unchanged, right? So you emerge a skew. And so that became a market feature that for somebody who retired in 1986, they would be like, “Hey, this makes no sense to me whatsoever.”
Mike Green:
As a matter of fact, in 2009, I was with a firm called Canyon Partners at the time, in the aftermath of the global financial crisis, extraordinary skew emerged, right? The probabilities that were being priced to downside events were just completely off the charts. I mean, you had situations in 2009 all the way until 2012 where tenure variants contracts or put options were pricing in roughly at its peak, in 2012, it was just interesting it actually hit its peak then. The market was pricing in roughly a 50% probability of a 50% decline over the course of two years. I mean, just if that’s actually what you believe, if you think those are roughly a coin flip to the market falling 50% over the next two years, you shouldn’t be investing. You know what I mean? That really is, just sit in cash. As that began to disappear, the markets were able to move upwards. And so most people will, again, point to the fed and say that their recovery in 2012 and 2013 was tied to Mario Draghi saying, “Whatever it takes.”
Mike Green:
It just doesn’t fit the data sets. What actually happened was a market structure event that began to systematically lower the costs of those longer data put contracts and as a result allowed… The price of insurance fell, people were able to buy more stuff, right? With greater confidence. You’re hearing now another one of my repeated themes, which is, I just think people tend to put way too much emphasis on the fed and way too little emphasis on market structure.
Taylor Pearson:
I was going to ask, if you could teach your one day seminar to everyone that kind of spends their time on Twitter, screaming about the fed, what would the abstract of that seminar be? How would you talk to them about the role of the Fed or lack thereof?
Mike Green:
Well, the single biggest thing that I encourage people to do is to think about the mechanism, right? So what is actually happening? So when the fed “intervenes and markets” right? So there are people who believe that magically, and by the way, I can’t disprove this. I mean, I don’t work for the Fed. I haven’t sat there, but there are people who sit there and are like, “Oh, the Fed is buying the market.” Right? It’s like, well, I mean, that would be an extraordinary event. If the Fed was actually buying the market or calling people up and saying, you should really buy the market, we’re going to guarantee that you’re not going to lose money. I mean, I’ve been doing this for close to 30 years. I’ve never gotten a phone call like that. I don’t know anyone who’s gotten that phone call.
Mike Green:
And so maybe there’s a secret cabal of people, they get to go to parties that I’m not invited to and that’s distinctly possible by the way. But, I’ve done this long enough that I’ve just never met anyone who’s ever received that phone call. Right? And as a result, I’m just skeptical that phone call actually happens. Right? The Fed absolutely calls around and says, “Hey, we’re worried.” And people could interpret that as, “Okay. The Fed is getting ready to step in and provide some support or lower the cost of financing or buy distress forms of debt through proxy or directly as they decided to do in March.” But I just don’t think that’s actually what’s happening. Right? And so I would just always encourage people, anytime you hear this sort of thing to say, what is the actual mechanism and what is the evidence that mechanism is playing out?
Taylor Pearson:
And then what… To ask the inverse of that question, if you were going to teach a one-day seminar at the Fed and everyone at the Fed agreed they were going to listen and think about how markets worked in a new way, what would you say to them?
Mike Green:
Well, the topic of that would be here’s my bank account number, please put billions into it. But, barring that-
Taylor Pearson:
Very profitable seminar. Yeah.
Mike Green:
Yeah. That would be a fantastic seminar, if any Fed governors are listening, I’m ready and prepared to do that seminar with you. But, if I were to talk to the Fed, it would almost be the exact same. Right? Which is what is the mechanism and how do you actually think that you’re influencing this? And more importantly, what’s the end game when you influence it in this way? What are the distortions that are caused when you behave in this fashion? Right? And so, one of the simplest that I would just draw people’s attention to is the idea that cutting interest rates is a form of stimulus, right? It is absolutely a form of stimulus, but does it meaningfully influence what they think it influences? Right? So the Fed by and large operates under the principle of what’s called the Euler coefficient, the relationship between consumption and interest rates, right? The simple idea of being if interest rates are very high, the cost of consuming today versus consuming in the future, right? Is very high. I could earn 10% interest if I were to wait one year. Right?
Mike Green:
If I lower interest rates to one percent, the cost of consumption today versus in one year has theoretically been lowered. Right? And so that kind of makes sense. If I lower interest rates that should make me more willing to consume today than in the future. Unfortunately the data suggests that, that’s the exact opposite, right? That when you cut interest rates, what you actually force people to do is say, “I have less income available to me in the future. I have less riskless forms of income available to me in the future. And therefore I have to save more today.” Right? That would suggest that a totally different mechanism is in play. And if I was trying to educate the Fed, I would encourage them to look at the system of collateral that they’ve established and the influence that they have in that framework. That would probably be the focus of that seminar.
Jason Buck:
It reminds me of, thinking about what you’ve brought up before, with coronavirus in supply and demand dynamics is that you’re not about to go back out and eat two steaks to re to make up for the one steak dinner you’d had prior. But thinking about the Fed is if we don’t eat two steak dinners now, and then one steak dinner a year from now, because we’re worried about interest rates. That’s just not how people function.
Mike Green:
People don’t function that way. The evidence of the transmission on interest rates is just very, very weak, right? And again, it depends, right? So if you’re 22 and somebody lowers interest rates, is that marginally going to increase your consumption? Probably. Right? If you’re 65 and interest rates get lowered, are you going to increase your consumption? Or you’re going to say, “Oh my God, what am I going to do? Because the bonds that I had held in my portfolio no longer offer the rate of interest that I had assumed for my future consumption level?” You’re going to increase your saving. Right? And so all these things matter, right? I mean, and we don’t… There’s so many moving pieces that it’s often very hard to draw the clear relationships that people think to get over in the world.
Jason Buck:
I was definitely trying to stay on track. So I just the record to stay that. Taylor brought up the Fed is, you and I have talked about many times, it’s like doing your own work and asking, is that true? Would people just repeat these things over and over again. And it reminds me the Fed, like you said, it’s not as maybe all seeing as all powerful. I was trying to actually think of a metaphor when we brought it up. The first thing that came to my mind was, the world is full of sound and fury in the end, signifying nothing, is really the Fed, right? These are more like balance sheet transactions moving the collateral around the system and nothing really happens. Part of the-
Mike Green:
Yeah.
Jason Buck:
Go head.
Mike Green:
I don’t want to dismiss it entirely. I do think that they do play a role, but I do think that people tend to focus on it in the same way that tribal villagers would focus on the medicine man’s dance to bring the rain, right? It was either a good dance or a bad dance. It had no impact on the rain, I’m sorry. Right? But, judging the quality of the medicine man’s dance is a useful distraction to the system where people really aren’t in control of it. Right?
Jason Buck:
Yeah. Part of that, so instead of going on a tangent, I’ll pull it back a little bit, is that thinking about… It just dawned on me the other day when somebody brought it up, that a lot of the underlying theme, I think of this conversation we’re having about the options markets is I didn’t realize that the other day, a lot of people think that people just use Black Scholes formula and that they bring buyers and sellers together. And that’s how options are traded. It didn’t dawn on me that people don’t realize that you have dealers, you have bid-ask spreads. This is what creates options skew. There’s so many dynamics to the market that can create mis-pricings, but it’s also a very dynamic market.
Mike Green:
Yeah. Actually, I mean, so the irony is that there are many firms that are known for “excessive risk-taking” in terms of, I mean, there’s a little bit of a running joke about French banks tend to sit at the center of most crises, for example. Right? Well, part of the reason for that is because they’re competing for market share. And so most of these models are by and large actually priced to facilitate a transaction. Again, going back to what the markets are actually a history of. If you are an option dealer, right? And you are trying to generate transaction income and you’re trying to, so that you get paid a bonus for the year and nobody shows up the body of your options. Well, you’re going to ask why. And if they say, “Well, I got it more cheaply from somebody else.” You’re going to say, “Okay, I’m going to lower my price to see if I can get some of your share of your business.” Right? They’re not following Black Scholes slavishly, right? Black Scholes is subject to any number of adjustments, including a discontinuous dynamic associated with the distribution assumptions, right?
Mike Green:
So people will build different models and all these models are effectively designed to facilitate transactions. Almost never, is there actually a thought process of, well, what’s the intrinsic value associated with this? Right? I mean, people will say, “I’m not going to do that transaction because I could sell it elsewhere at a higher price.” Or, “I could buy it more cheaply at another price.” But there’s just not a lot of… Options are literally one of these things where you’re talking about a theoretical distribution of what might happen and trying to build a model of that. Right? And so, the idea of being right or wrong is so stochastic, meaning path-dependent in terms of its outcome that we often have no idea what’s going on. Right?
Mike Green:
I mean, I could have exactly the wrong model. I could sell every option for wrong price and I could do it over and over and over again and have a fantastic career, simply because nothing really bad happened in my career. Right? Ironically, people would label me a genius. They’d be like, “Oh, he was a brilliant pricer of options.” Right? And I just got lucky, right? There is a component of that in markets. And again, it goes back to the point that you guys were making before, which is, if you want to separate luck from skill, you want to have as many transactions as you possibly can. Right? And so, I’m highly confident that what we’re trying to do by doing it over and over and over again, leads to a better outcome than if we were to just swing for the fence every once in a while.
Taylor Pearson:
Thanks for listening. If you enjoyed today’s show, we appreciate if you would share this show with friends and leave a review on iTunes, as it helps more listeners find the show and join our amazing community. To those of you who already shared or left a review, thank you very sincerely. It does mean a lot to us. If you’d like more information about Mutiny Fund, you can go to mutinyfund.com. For any thoughts on how we can improve the show or questions about anything we’ve talked about here on the podcast today, drop us a message via email. I’m Taylor@mutinyfund.com. And Jason is Jason@mutinyfund.com. Or you can reach us on Twitter. I’m @TaylorPearsonMe and Jason is @JasonMutiny. To hear about new episodes or get our monthly newsletter with reading recommendations, sign up at mutinyfund.com/newsletter.
