Mostly Voices [0:00]

A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines. If a man does not keep pace with his companions, perhaps it is because he hears a different drummer. A different drummer.

Mostly Mary [0:18]

And now, coming to you from dead center on your dial, welcome to Risk Parity Radio, where we explore alternatives and asset allocations for the do-it-yourself investor. Broadcasting to you now from the comfort of his easy chair, here is your host, Frank Vasquez.

Mostly Uncle Frank [0:37]

Thank you, Mary, and welcome to Risk Parity Radio. If you have just stumbled in here, you will find that this podcast is kind of like a dive bar of personal finance and do-it-yourself investing. Expect the unexpected. There are basically two kinds of people that like to hang out in this little dive bar. You see in this world there's two kinds of people my friend. The smaller group are those who actually think the host is funny regardless of the content of the podcast. Funny how? How am I funny? These include friends and family and a number of people named Abby. Abby someone. Abby who?

Mostly Voices [1:22]

Abby normal. Abby Normal. The larger group includes a number of highly successful

Mostly Uncle Frank [1:32]

do-it-yourself investors, many of whom have accumulated multimillion dollar portfolios over a period of years. The best Jerry, the best. And they are here to share information and to gather information to help them continue managing their portfolios as they go forward, particularly as they get to their distribution or decumulation phases of their financial life.

Mostly Voices [2:03]

What we do is if we need that extra push over the cliff, you know what we do? Put it up to 11. Exactly.

Mostly Uncle Frank [2:11]

But whomever you are, you are welcome here.

Mostly Voices [2:15]

I have a feeling we're not in Kansas anymore.

Mostly Uncle Frank [2:19]

But now onward, episode 309. Today on Risk Parity Radio we'd ordinarily be doing our weekly portfolio reviews of the seven sample portfolios you can find at www.riskparityradio.com on the portfolios page. But not much happened last week and I really want to do a annual review coming up which won't be possible until after I get all the Final data in on January 1 and so we will do that next week. Go away and come back tomorrow.

Mostly Voices [2:56]

Tomorrow? Oh, but I want to go home now. In the meantime, I'm intrigued by this, how you say, emails.

Mostly Uncle Frank [3:09]

And, first off, First off, we have an email from Slippery Steve.

Mostly Mary [3:17]

Hey, Steve. And Slippery Steve writes, Dear Frank, I was glad to make a donation today to the Father McKenna Center. Top drawer. Really top drawer. Thanks for all the great information on the podcast. I actually downloaded all 300 plus episodes onto a memory stick and they have become my preferred listening experience while driving, much to my wife's chagrin. You're insane, Gold Member.

Mostly Voices [3:48]

And that's the way, -huh, -huh, I like it.

Mostly Mary [3:52]

While I do plan to transition the majority of my resources to a risk parity style, i.e. golden ratio portfolio, I am still hanging on to a few investing ghosts from my past before finding your podcast. I have been a Phil Town student for some time now and want to continue to explore that option. But the strategy on which I want your take is from the short book, the 12% Solution by David Alan Carter. Basically, the strategy is to have a 60/40 type portfolio using a small list of index type ETFs but with a few twists. The idea is to reevaluate the equity ETFs every month using a three-month look back and choose the winning ETF for that portion of of the portfolio and thus moving all the equity money to the new winner. The same is done for the bond ETF portion. There are a few other caveats, but trying to capture the momentum of the best performing ETFs as their positions change on the rolling three-month reevaluation is the main part. Due to short-term capital gains, obviously this strategy would be more appealing for use with tax-protected money. As the name implies, a 12% annual return is the hoped-for result over time. The author does present a fair amount of back testing, although there doesn't seem to be data going way back, and makes a believable argument for the plan.

Mostly Voices [5:21]

What say you, Sincerely, Slippery Steve? I'll get you, hey Steve, if it's the last thing I'll do!

Mostly Uncle Frank [5:26]

Well, first off, Slippery Steve, thank you for your donation to the Father McKenna Center. The best, Jerry, the best!

Mostly Voices [5:34]

which is our charity that we support here.

Mostly Uncle Frank [5:39]

It serves hungry and homeless people in Washington, D.C. And if you make a donation to that, as Slippery Steve has done, you get to go to the front of the email line.

Mostly Voices [5:51]

Oh, I must be in the front row.

Mostly Uncle Frank [5:54]

And you can do that from our support page, or you can do it directly on the Father McKenna's donation webpage. But however you do it, thank you for your generous support.

Mostly Voices [6:07]

Yes! Now getting to your email.

Mostly Uncle Frank [6:11]

All right, this looks like some kind of basic momentum allocation strategy. And there are a million of these out there if you look for them. Now what we generally use and recommend is a naive Allocation strategy where you come up with your overall strategy and then you do not vary those allocations to the various funds other than rebalancing them periodically in accordance with a preset rule that you have come up with. As you can imagine, there are infinitely many ways of overlaying also an allocation strategy on top of that. where you are taking some factor from the marketplace or the funds you're using in particular and making adjustments to the allocations in the portfolio based on changes in that factor. And here it appears that this 12% solution method employs a momentum-based strategy based on recent performance of whatever ETFs that are in this portfolio. I've seen all kinds of these kinds of strategies over the years and they start with two strikes against them. First, they can be overly complicated to implement. This one doesn't seem that complicated, but that kind of violates our simplicity principle. And then the second is the one you pointed out that if you have more transactions in a portfolio, it's generally bad tax wise. It just is the way our capital gains tax system is set up. So any strategy like this kind of starts with a couple strikes against it, and it needs to overcome those in addition to just generally outperforming a static allocation. This is why when you look at academic papers that study momentum strategies, you quickly realize that most of them are very impractical because they have many shifts or changes in the portfolio structure. One of the other problems you have with these things is they're very difficult to back test in any meaningful way. Usually you can only find short periods of data and you really need much longer periods of data. You need things like the decade of the 1970s and the decade of the 2000s to really be able to test something like this and say that it has any better outcomes than some other strategy. and unless you can do that, you're just kind of guessing at these things. All you can say is, well, it worked better in this period that we can test it for, and that's about it. But there are a couple of general statistical principles that you really need to be aware of whenever you are taking a past set of data and trying to construct something that will do well in the future or be predictive in the future. And that's regardless of whether it's marketing data or data about the weather or some kind of other phenomenon that you measure. And it relates to something that is called the bias variance dilemma that we've discussed. Basically, the more rules or parameters or variables you inject into a system, the more likely it is to conform very well to the past data and the less likely it is to have any predictive value in predicting the future. So the fewer variables that you are working with, the more robust your system is likely to be and the more likely it is to perform similarly in the future. That's with the fewer variables. The more variables or rules you impose on a past set of data, the less likely it is to perform well in the future. It is essentially a fragile construction, if you like that rubric that Nassim Taleb has come up with. So I would say looking at something like this, the chances are that it actually outperforms static portfolio constructions over long periods of time are pretty low. It's more likely to just simply be modeling its time period or time frame. One way to also test it would be to adjust the rolling three-month periods, that instead of doing it on the quarter, doing it a month off the quarter and things like that. Sometimes if you do things like that, you see that the performance is based on the random event of which months you picked. One person that has noticed a lot of these kinds of anomalies is Corey Hoffstein, who has done some research into systems that rebalanced at a particular time of year, comparing them and showing that if you rebalance something, a lucky period, it may outperform something else, but only because it was lucky and not because there was any predictive power to it. He is also a person that believes strongly in what we call naive diversification or naive allocation, that you're probably much better off sticking with a static allocation that you rebalance, because again, that has fewer variables and is more likely to perform similarly to it has in the past than something with a lot of bells, whistles and rules that probably only worked for whatever period it's being modeled in. I heard something recently, and I can't remember who it was, but they were talking about the fact that when they were working on models in the 1990s, you could come up with any model that avoided the'87 crash. and it would look a lot better than other models, but only because it happened to avoid the '87 crash with its particular mix of rules and variables. And so you would not expect something like that to actually have a better performance in the future. That is another example of what I'm talking about here. That's what I'm talking about. So the bottom line is I don't think I'd waste much time with a strategy like this unless there was some data showing that it had been tested in all kinds of different economic periods over decades, and not just one particular year or set of years. And I'd be particularly suspicious of anything that performed particularly well since about 2010, because the recent past has in fact been an outlier period in terms of how portfolios performed in this recent period compared to how they had done in many other decades. So if you're going to try something out like this, I would just do it with a small amount of money in a smaller account to see what it's like for you. But I wouldn't expect any miraculous performances.

Mostly Voices [12:59]

Forget about it.

Mostly Uncle Frank [13:03]

I am glad you're enjoying the podcast and have downloaded all 300 episodes. I hope your wife does not kill you on these drives, because there's probably only so much of that she's gonna be willing to take. You can't handle the dogs and cats living together. At least all at once. I want you to be nice. But I'm glad you're getting something out of it and thank you for your email.

Mostly Voices [13:30]

Do not arouse the wrath of the great and powerful Oz. I said come back tomorrow. Second off. Second off, we have an email from Keith. Do you realize people are actually stopping me on the street for my autograph? Face it, Keith, you're the biggest thing that's happened in this town since they dedicated the new gas station.

Mostly Mary [13:55]

And Keith writes, Dear Frank and Mary, I've been buying preferred shares and small cap value stocks recently. I could have used a little more cowbell. SCV stocks are simple enough. But preferred shares are a strange beast. Can you do a remedial class on how preferred shares work? I remember you told us that they behave like a hybrid between a corporate bond and a value stock. Here is the thing I don't get. The yield on PFFD is 7.11% and it is 6.83% JNK. Wouldn't you expect preferred shares to be less risky and lower yielding than junk bonds. Best wishes, Keith.

Mostly Uncle Frank [14:40]

All right, let's answer your last question first, which was why the yield on PFFD is 7.11% and it's only 6.83% on JNK? Wouldn't you expect the preferred shares to be less risky and lower yielding than junk bonds? And the answer is not necessarily, and I will give you a couple of links to the Morningstar analysis of both of these funds. What you'll see is that PFFD has a longer effective duration. And when you're talking about duration of debt instruments, you would expect the longer duration one to typically have a higher interest rate because there's more risk and more volatility involved in something like that. And I would suspect that is the real difference between these two things. Now, that's not always true for all things at all times because you do have inverted yield curves. But when you're talking about a basket of debt instruments of various qualities, I would think that that would be one of the main factors. The rest of it probably does have to do with the institutions that use these things and analyze them in terms of what they think the credit qualities are of both of them. In theory, preferred shares are always of a lower quality credit than bonds, even junk bonds, because in the bankruptcy pecking order, the debt would get paid first before the preferred shares would get paid. So in terms of the liabilities of a company, the highest quality debt would be secured debt that is tied to a particular asset that is not the company itself, like a piece of real estate. Below that, you have unsecured debt, which is tied to the company itself. Below that in quality, then you have your preferred shares or hybrid convertible things, which go before the common stock. And then the lowest or most risky financial instrument associated with the company is generally its common stock. Because in a bankruptcy, the common stockholders get wiped out first, then the preferred shareholders, then the unsecureds. And then finally, the secureds, but they usually get made whole simply by the collateral that they hold and can attach and execute upon. As to your general question, we did have an episode about preferred shares funds. It's episode nine, and you can go back and listen to that. But generally, preferred shares are set up to be a form of equity stock holding that performs like a bond and the general rules that go with them are that the preferred shares must be paid, their dividends must be paid before any dividends can be paid to the common stockholders. That's a general rule. The specific rule would be dictated by the issuance of the preferred shares themselves and There are infinitely many different varieties and variations on these things. Some of them are convertible to common shares. Some of them have variable rates. Some of them expire. Some of them have various other relationships to the other debt of the company. On the corporate side, they are most often used by financial institutions as a way of raising capital because it is more efficient in their kind of corporate structures to do it that way. And I'm very much oversimplifying that. But you will also find preferred shares listed by large companies like utilities and big telecommunications companies like AT&T. And for these companies, these are just an alternative way of raising capital without changing or diluting the holdings of the common shareholders, which is generally frowned upon because it reduces the value of a common share if you put more shares on the market. That's why people like share buybacks because it tends to increase the price of the remaining shares. So preferred shares typically pay a relatively high dividend payment, which makes them function more like a bond in some ways than a stock. The other thing about them is that they do not carry a voting right typically, which is another reason they're more like debt than they are like equity, because only the common shareholders get to vote on the board of directors. Now, from an investor's perspective, when you're talking about preferred shares or a preferred shares fund, the way that tends to look in a portfolio is kind of like a long-term bond or a stock with a very high rate of dividend. So they pay relatively high rates of return. One advantage to many of them is that they're paying qualified dividends, not ordinary income in most circumstances or in many circumstances, which means they're taxed at a more favorable rate. You will find that they are generally positively correlated with other stocks, but that their volatility is about half of the overall market. So in a recessionary environment like 2008 or 2020, you generally see a preferred shares fund fall about half of the amount that an index fund will fall in that same period and have similar recovery characteristics. It will, however, continue to pay out its dividends at the same rate in terms of how much money it's paying, at least if you're buying something that's diversified. Of course, any stock could have a problem if the company itself goes bankrupt. Now in general, these things probably do not have a place in most people's portfolios. They're most valuable to people with very large taxable accounts. who are in the highest tax brackets and are looking for ways to generate more qualified dividends and less ordinary income.

Mostly Voices [20:58]

Now, there's only one use for money, and that's to make more money. But, Mr. Howell, I want to spend it to make people happy. Well, that's a very noble sentiment, very warm and generous, but stupid.

Mostly Uncle Frank [21:09]

So there is no particular reason why most people would need to hold a preferred shares fund or preferred shares, but they can be a useful option for some people, and particularly if you are comparing them with corporate bonds. But that's probably enough on these, and you can go back and listen to episode nine, which I would commend you to do if you are more interested in this topic. Hopefully that helps, and thank you for your email.

Mostly Voices [21:37]

Do you presume to criticize the great odds? You ungrateful creatures? Think yourselves lucky that I'm giving you audience tomorrow instead of 20 years from now.

Mostly Uncle Frank [21:52]

Next off, we have an email from Brian.

Mostly Mary [21:57]

And Brian writes, Good day, Frank. I heard your interview with Bill Yount on Catching Up to Five last month. When you mentioned 5% withdrawal rates, the Golden Butterfly portfolio, my ears perked. Yeah, baby, yeah. Since then, I've hit your podcast pretty hard, listening to your Cornerstone episodes along with various other ones. Micro allocations make sense to me. Having uncorrelated assets makes sense on smoothing out the withdrawal periods in retirement, as well as being a good tool to fight against sequence of return risk. I've been reading a book by Rick Ferri called All About Asset Allocation. Now, to be fair, I'm only just halfway through the 300-page book, but Rick talks about something I wanted to get your feedback, expert opinion, or just straight facts on. Rick mentions correlations between asset classes are not consistent, page 46. He also says it's almost impossible to find asset classes that are negatively correlated over all periods of time, page 49. One example he used, page 47, Is the correlation between intermediate term Treasury notes and the S&P 500 having a correlation that has shifted unpredictably over the last 50 years? My question is, have we seen any risk parity portfolios correlations change over periods of time to being less diversified? If so, which ones? Or is there always volatility in the correlations but not enough to be too extreme that in the future we wouldn't be as diversified? thus not having to worry about changing withdrawal rates like 5%. This is all a very new concept to me, risk parity portfolios, and I'm very intrigued. I have a ways to go to decide my retirement portfolio. Currently, I'm 41 and 100% in equities. Ramming speed. Ramming speed. And don't plan on changing that until five to maybe ten years out before retirement, as I will also have a pension. Thank you, Frank, for considering this question. Brian.

Mostly Uncle Frank [24:11]

All right, interesting questions. Yes, let's talk about correlations and how they work and can change over time, and why they might change over time. Because that's the piece I think you're really missing here. Have you ever heard of Plato?

Mostly Voices [24:27]

Aristotle, Socrates.

Mostly Uncle Frank [24:30]

First, going to this book all about asset allocation by Rick Ferri. That is a good reference. The original version was written in 2005. There was a second edition written in 2010. And you need to be aware of that because that colors how much you can actually take out of that book in terms of its end or baseline conclusions about what to do. Essentially, the book is a bit obsolete. It does not incorporate all of the work done since then in the areas of factor investing, all of the new tools that we have now that we did not have before, like Portfolio Visualizer and lots of other papers and work that has been done. That book is really kind of a cornerstone of the Boglehead three fund philosophy, which is fine as far as it goes, but I'm afraid some people treat it kind of like this kind of dead sea scroll that was written and now should not be varied from. It's been used since ancient times. It's used for scrying, healing and meditation. And in a certain sense, Rick Ferri has kind of backed himself into a corner that he's become this kind of branded Mr. Bogle head. who has said these things in the past and therefore tries to steer or cling to what he has said in the past and not vary from it too much.

Mostly Voices [26:02]

The other terror that scares us from self-trust is our consistency. A reverence for our past act or word because the eyes of others have no other data for computing our orbit than our past acts, and we are loath to disappoint them. But why should you keep your head over your shoulder? Why drag about this corpse of memory, lest you contradict something you have stated in this or that public place? Suppose you should contradict yourself. What then? A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines. With consistency, a great soul has simply nothing to do. He may as well concern himself with his shadow on the wall.

Mostly Uncle Frank [26:59]

So interestingly enough, while he still talks about this three fund portfolio a lot, he actually holds small cap value and real estate in his personal portfolio as diversifiers.

Mostly Voices [27:07]

I'm telling you, fellas, you're gonna want that cowbell.

Mostly Uncle Frank [27:11]

All right, let's look at these specifics you brought from the book. First one is, Rick mentions correlations between asset classes are not consistent. Yes, that's true. It depends on the time frame you're looking at. The shorter the time frame, the more volatility or noise you're going to see in correlations. And the smoother it looks over long periods of time. But this is also true for correlations within asset classes. So typically, for example, all equities would be positively correlated. Occasionally, though, you'll have periods like 2022, where you saw negative correlation within equities. And what I mean by that is while the stock market was down and down substantially overall, there were certain sectors like energy and property and casualty insurance companies that had positive performances in 2022. All right, next point. He also says it's almost impossible to find asset classes that are negatively correlated over all periods of time. Well, yes, that's true, unless you're talking about the US dollar itself. The unit of account is always negatively correlated to everything that is valued in that unit of account. In other words, when the stock market goes up, you could say that the value of the dollar is going down versus stocks. one of those things that is true but not very useful. But also saying that things that are negatively correlated over all periods of time are impossible to find is also something that's true but not very useful. Because you do not need to find things that are negatively correlated over all periods of time. What you need to find are things that have zero correlation or low correlations. most of the time. And if they're negative sometimes and positive at other times, that's okay. Next point. One example he used, page 47, is the correlation between intermediate term treasury notes and the S&P 500, having a correlation that has shifted unpredictably over the last 50 years. Okay, he's part correct here and part wrong. Wrong! Which gets to the main problem with a lot of what he says about correlations. Right? Wrong! It's true that this has varied over time, and I've cited to a paper, and I will cite to this paper again, that tracks the correlation between Treasury bonds and the S&P 500 going back to the 1950s. And you'll see that it varies over time. It goes up and down over time. There's a new version of that out in 2023. It's from somebody at Duke University, and I will link to that again in the show notes as I have in the past, because it's a very useful and informative paper. The graphs I'm talking about are in the first appendix. It is not true to say that these correlations have shifted unpredictably over the past 50 years. Surely you can't be serious.

Mostly Voices [30:20]

I am serious, and don't call me Shirley.

Mostly Uncle Frank [30:25]

Or randomly is what he generally often means when he says unpredictably. That's code sometimes for what he's talking about as randomly. These correlations are not random. That's not how it works. That's not how any of this works. They are dependent largely on the economic environment that you happen to be in. So if you go and look at this paper, you'll see that every time there is a recession, for example, you will see a negative correlation between treasury bonds and the stock market. Didn't you get that memo? And in those periods like we saw in 2022, where there was higher inflation and the Federal Reserve was raising interest rates, which occurs about every 40 years or so, you do get a strong positive correlation between equities and treasury bonds. Now, it's true, it's unpredictable exactly which environment you're going to get next, but if you knew what that environment was, you would be able to say, yeah, this is likely to have a negative correlation in this economic environment or a positive one in this other economic environment. And this goes to what we call the Holy Grail principle of trying to find assets with negative or low correlations and combine them in a portfolio. And the theory behind that is that different asset classes have different performances in different economic environments. If they're rising inflation and rising growth, falling inflation and falling growth, or some combination of the two of those things. And then also what the central bank or its equivalent is to doing with interest rates at the time. And this is the kind of research that we talk about in our foundational episodes, one, three, five, and seven in particular. That was first come up with by Ray Dalio at Bridgewater, but it's been adopted by many other people in many other forms since then. What you come out of this with is just the idea of probabilistic notions of correlations based on economic environments. that no, correlations are not stable, but neither is the returns of the stock market or any other asset with any kind of volatility. That doesn't mean it's not useful. That doesn't mean you can't work with it. That doesn't mean you need to throw up your hands and say, oh, correlations are random. We can't possibly do that. We have to do this three fund thing and nobody else can say anything about anything Or that we can use any other assets to do any other kind of thing because the Dead Sea Scrolls was written in 2010 and we're not allowed to say anything more. Sorry to go off in that rant, but that's what these folks sound like sometimes.

Mostly Voices [33:23]

Human sacrifice, dogs and cats living together, mass hysteria.

Mostly Uncle Frank [33:27]

That they're not actually looking at the principle and applying the principle to the available asset classes that we have today in the 2020s and maybe we didn't have in 2005. So in answer to, I guess, your basic question, have we seen any risk parity portfolio correlations change over periods of time to being less diversified? If so, which ones? Or is there always volatility in the correlations but not enough to be too extreme that in the future we wouldn't be as diversified? The answer is the latter point you made, that looking at these things over 100 years, you do see correlations between various different assets in the portfolio changing over time. But that's why you want to have more than just stocks and bonds in your portfolio. And you need to be selective about which stocks and bonds you are picking to put in your portfolio.

Mostly Voices [34:21]

I got to have more cowbell. at least in terms of their factors. I gotta have more cowbell.

Mostly Uncle Frank [34:29]

Or whether they're corporates or treasuries, things like that.

Mostly Voices [34:43]

Basically, by selecting these things appropriately, you are increasing the probability of lower correlations and a smoother performance over time that will yield a higher safe withdrawal rate. That's the fact, Jack. That's the fact, Jack.

Mostly Uncle Frank [34:49]

And that's why of our three principles, the Holy Grail principle about diversification, the macro allocation principle about basic macro allocations, and the simplicity principle about making this as simple as possible, it's that Holy Grail principle that is the most important one to be implementing in your portfolio. To actually be looking at the correlations of the potential assets you might put in a portfolio. The macro allocation principle is also important, but it's very easy to implement in the kinds of portfolios we're talking about because we know from all kinds of research that the best portfolios for decumulation or taking out of them that have the highest safe withdrawal rates have equity percentages between about 40% and about 70%. So it's easy just to start with that as a guideline. The simplicity principle is important, but you cannot let that be the tail that wags the dog. And I'm afraid what Rick Ferri often recommends is to overly simplify things and to let that simplicity principle be the tail that wags the dog. Release the hounds. what you're looking for with a simplicity principle is really efficiency. You want things that are low cost, you want things that are easy to manage, you want things that are liquid, and all of those things are good ideas. But the idea that a portfolio is better because it only has two or three funds than a portfolio with between five and ten funds, It's just misguided and it's wrong. Forget about it. Because honestly, if the simplicity principle was the only thing that was really important to you, what you should probably be doing is buying the Vanguard Wellington Fund or the Vanguard Wellesley Fund. That's one fund that reasonably covers the other principles in a way, is value tilted, so it's good for retirement purposes and does better than most of all these other two and three fund concoctions that you hear people talking about all the time. But if you are really talking about applying the macro allocation principle and the holy grail principle, you're not going to do that very well with just a US total market fund, an international total market fund, and some aggregate bond fund. that might have been good enough for 2005, it's not really good enough for 2023 if you're really trying to do this in a serious way. Because you would be ignoring all of the work that's gone on between 2010 and now, like Larry Swedroe's All About Factor Investing book. It's a very important book to understand some of these principles. Like all the work Paul Merriman has done with his foundation, and all of the papers written by Cliff Asness at AQR and many other people who have investigated these sorts of things. We can't and we should not go around with our heads in the ground pretending that these things do not exist and that they are not important and they are not valuable things to be implementing just because they do not conform to what may have been best practices and 2005 or 2010. But that's probably enough carrying on about all this on my part for one episode. Bow to your sensei. Bow to your sensei. I'm glad you're enjoying the podcast and thank you for your question. It was a very good question. And thank you for your email.

Mostly Voices [38:44]

Class is Dismissed.

Mostly Uncle Frank [38:51]

Last off, we have an email from Kyle.

Mostly Mary [38:55]

Kyle!

Mostly Uncle Frank [38:59]

And Kyle writes, Dear Frank, my all-time favorite financial sound

Mostly Mary [39:02]

bite until I found Risk Parity Radio, I just figured I would share it with you. It's Rodney Dangerfield from Caddy Shack. Best Kyle. You mean this?

Mostly Voices [39:14]

Oh, it is my phone. Uh, gentlemen, oh, I told you never call me on a golf course. Then sell, sell, sell. They're all selling, then buy, buy, buy. I'll tell you what, let me have the start now. Any Coast, gentlemen, what do you want? Gentlemen, what can I use your phone? I just got a call coming in. Gentlemen, yeah, that's pretty good.

Mostly Uncle Frank [39:36]

It does remind me of Some of the clips from trading places in particular.

Mostly Voices [39:40]

Margin call, gentlemen. You can't expect us to know the rules of the exchange, Mr. Duke. All accounts to be settled at the end of the day's trading without exception. You know perfectly well we don't have $394 million in cash. I'm sorry, boys. Put the Duke Brothers' seats on the exchange up for sale at once. Seize all assets of Duke and Duke. commodities brokers, as well as all personal holdings of Randolph and Mortimer Duke. My God, we're ruined. This is an outrage. I demand an investigation. You can't sell our seats. A Duke has been sitting on this exchange since it was founded. We founded this exchange. It's ours. It belongs to us. Mortimer, your brother's not well. We better call an ambulance. Now you listen to me. I want trading reopened right now. Get those brokers back in here. Turn those machines back on. Turn those machines back on.

Mostly Uncle Frank [40:37]

It's funny how much the technology has changed that that kind of scene where somebody's yelling commands into a phone about buying or selling something is not really the way it works anymore. Is you're pressing buttons on a computer or your phone. And if you go back further in time, you'll find those memes of people looking at stock tickers or other kinds of wires. A good example of that I always remember is that movie the Sting from about 1973 with Robert Redford in it. Of course, then the little ticker tape they were reading was in a little gambling hall. They were getting the results from horse races across the country.

Mostly Voices [41:20]

Ladies and gentlemen, this is On the Road calling the third race at Riverside Park in Kansas City. This is a claiming race for $1,500 for three-year-olds and up. It's been raining and the track is muddy. The flag is up and they're off and running. Dr. Twink is going to the front, followed by Lucky Dan, I'm a Dreamer, Orkin, Josie G, Chi Chi and Little Star. Around the clubhouse turn, it's Lucky Dan ahead. Dr. Twink a length, Orkin a half, followed by I'm a Dreamer, Josie G, Chi Chi, and little star into the back stretch. It's lucky Dan and link. Got to twinkle half. Walking ahead. I'm a dreamer by one. Followed by. Sorry, but you couldn't wait. Everything going all right? You got nothing to worry about. I put it all on lucky Dan. Half a million dollars to win. And please. This place is unlocking. That horse is gonna run second. I'm a dreamer, I have. Dr. Twain, I have been walking by two. Followed my little star and Josie G. And it's a dry these finishes. There's been a mistake. Give me my money back. No, I'm sorry. I tell ya, there's been a mistake. Give me my money back. Give me my money back. Give me my money back. But I digress.

Mostly Uncle Frank [42:41]

That's not an improvement. Thank you for your contribution of that sound bite to my collection. And thank you for your email.

Mostly Voices [42:48]

I want to hold you every morning and love you every night, Cal. I promise you nothing but love and happiness.

Mostly Uncle Frank [42:52]

But now I see our signal is beginning to fade. As I mentioned, we'll be following up in the next few days with a annual portfolio review and comparing these portfolios with other common benchmarks out there. including commercially prepared risk parity style portfolios. And I need to update the website in several respects. So hopefully I'll be doing that too. In the meantime, if you have comments or questions for me, please send them to frank@riskparityradio.com that email is frank@riskparityradio.com Or you can go to the website www.riskparityradio.com, put your message into the contact form and I'll get it that way. If you haven't had a chance to do it, please go to your favorite podcast provider and like, subscribe, give me some stars or review. That would be great. M'kay? Thank you once again for tuning in. This is Frank Vasquez with Risk Parity Radio signing off.

Mostly Voices [44:04]

Pay no attention to that man behind the curtain. The Great Oz has spoken.

Mostly Mary [44:12]

The Risk Parity Radio Show is hosted by Frank Vasquez. The content provided is for entertainment and informational purposes only and does not constitute financial, investment, tax, or legal advice. Please consult with your own advisors before taking any actions based on any information you have heard here, making sure to take into account your own personal circumstances.