Hello, and welcome to word book store. Were so pleased thank you join us for the confidence between die unanimous henriques and joe nocera. I am the vaccines coordinator and it miss flour introduce our authors tonight. Please bear with me through some housekeeping. Word book storesandindependent book store locate in brooklyn and jersey city, new jersey. We celebrated the ten year neaves of our location this past march andunder scene coming up four years in our jersey city location. Tonights revent will be taped by cspan so if you see cameras, thats why. Also, please turn your cell phones off or put them on silent. After author speaks there will be a short period of question and answer followed by signing. We have books at our register. Our book sellers will help with the signing and thank you in advance for your help. Tonight we are here to discuss first class catastrophe. Monday, october 19, 1987, was by far the worst day in wall street history. The market fell 22. 6 , almost twice as bad thats worst day of 1929. This incident was several years in the making and shook the foundations of our financial system. Yet 30 years we have not heeded the lessons even as the same patterns were found in 2008s crisis. Tonights author, Diana Henriques is uniquely suited to uncover this. A writer for the New York Times since 1989, she is a george polk award winner and a Pulitzer Prize finalist. Her work has also revved harvard goad dismiss prize for investigative reporting. And were honored to know she lives close by in hoboken, new jersey. She is in conversation with journalist joe nocera, a columnist for Bloomberg View whose career on business and sports has spained the New York Times to fortunes npr. Join me in welcoming Diana Henriques and joe nocera. Thank you, thank you. Thank you very much. Dianas book is called the first class catastrophes black monday, 1987, a day when the Dow Jones Industrial average dropped 508 points. 22 . More than any day in history, including during the crash of 29, 1929. Now, as it turns out, i was doing some writing at the same time when the crash took place, and i wound up riting a book that came out six years later, and i realized reading dianas book that there were two black mondays. There was the outsiders black monday and there was the insiders 0 black monday. And im just going to read you a paragraph from something i wrote about the outsiders black monday and then well read something from dianas insiders black monday and well compare and contrast and that will be how we start. In 1929, of course, the site of distraught investors drop thought death became an image of the crash. In 1987 there was no such thing, thank goodness. Rather the images one sat they day and the chaotic days that followed people staring disbelieve, jaws agrape as they watch every take of the dow jones average. In san francisco, one could walk into the Schwab Office looking at the dow. In boston, on the day after the crash, the day that was a scariest black monday as the dow luhr prepare to 200 points to 150 down and then back up again, people stood out a Fidelity Center the district, staring into the storefront window where a flashy sign transmitted the numbers. By lunchtime the crowd that grown so large and transfixed the police asked the company to turn off the sign so she traffic could get through. Fidelity complied. No one moved. The Truck Drivers honked their horns. Still no one moved. They were in a market enduesed trans. Inside, late in the afternoon, one could find more than 20 people huddled in the corner around two quote running machines. Theyd been there all day and looked tired and dazed the way people look when theyre in the middle of an allnight poker game but they couldnt go home until the market closed. They were in too deep. Thus did the middle class reaction to the crash of 1987. Thats the outsiders. All theyre doing is just watching the dow collapse. Heres the insiders. Sometime before 8 30 on monday, of course now im reading from a first class catastrophe john, fallen, the head of the new york symptom exchange, dad his secretary to track down lee york the head of the chicago merck. Fallen could see how the day was shaping up and it made even the worst fears of friday night look optimistic. Tokyo had fallen sharply overnight as traders react teed the epic decline on friday. The Hong Kong Market plunged so far and so fast that officials there decided to close the doors completely. London was down ten in part because of 90 million worth of sell orders from the trading desk at Fidelity Investment in boston. Fidelitys 9 billion magellan fun was the largest stock mutt to all fund the country. Chilling to see how much would try to sell when he big board opened. Traders predicted the dow could drop my 9 , stayingerring figure divide the recordsetting 108pointless on friday. He new york symptom exchange dot system was watched with orders. Many from index arbitragers. Specialists were struggle to find a place to open trading, task as difficult as dealing with a del luge of closing bell orders. They sell orders like never were, fallen said, saying looks like a very bad market. Then he said arch loves a free market but we need to slow volatility on the down side. If no action is taken the industry stands to lose something it wants. Same event two very, very different approaches, and so let me ask first, diana, what made you what drew you to the idea that the way to tell the story of the worst day in market history was from the side of the regulators, the side of the people who ran the new york stock change, and so on and so forth. Well, it was an important point of view choice because, as i did my research, discovered that not only was black monday far worse than we may remember today, it was far worse than we knew at the time. So, the outsiders view of black monday, scary as it was, was nowhere near as horrifying as the insiders view. Behind the scenes things were far more tenuous, far more dangerous. There were 11th hour rescues and cliff hanger moments and desperate chewing gum and bailing wire improvisation to try to hold the system together, that was not apparent to the outside world. Not in 1987 and certainly not in the rosy memories we have of the aftermath of of that crash. Want ited to be behind the scenes because thats where you could see how close to at the precipice we came. Lets back up. You start our book with an event that takes place earlier, the Hunt Brothers effort to corner the silver market. And then you take us through a series of innovations that dont really have to do with stocks per se, with individual stocks. Theyre new derivatives, new forms of stock. And you lead us to black monday through the story of these products. Right. And that gets us to thinking about today. Well get to that later. Tell me why you started with the silver market and how that leads to the creation of these innovations and what they and are how it factors into the way the market starts to change. Well, anytime you have to start you have to jump into a chronology at some point you have to make a decision about where you start the story, because its all one long continuum in history. But the silver crisis in 1980, where these two crazy Texas Oil Men decide to buy all the silver they can get their hands on, was a good starting point because it was really the first crisis i could find in modern market history where a crisis in one market, in this case the commodity market, the silver market, was rapidly leaping the firewalls and spreading to other marketplaces, to the stock market, to banking world, to the wall street world, and the regulators still were in their tiny little villages and could not see the whole crisis at once. As the book opens, you will see washington regulators desperately trying to come up with some kind of ad hoc cooperation that would get them through this multimarket crash. When theyre questioned by congressional leaders later, and asked, well, how well did you do . Did you cooperate enough . They had to answer, well, maybe not. Maybe we didnt do as well as we should have. But if this crazy thing ever happens again, of course well do better. And then the road from there, joe, shows you markets becoming increase ily interconnected by products and the players in the market, becoming increasingly fragile and volatile. What i was trying to achieve with that road to black monday, showing the forces that were gradually changing the marketplace, was to try to counter act the mismythology that macin was an aberration, moment of madness, after which the mark moved on. That was absolutely not true. There will fundamental changes in how the market worked, who the mashed section what the market did, and they occurred in those seven years leading up to black monday. So, on that one point that you just made about how people thought it was an aberration, they certainly did because one of my memories is that people who pulled out of the market after the crash of 87, wound up feeling foolish because two years later it gained everything back and then of course continued to gain and then we had the internet bubble and so people thought the left a lot of money on the table. From the inside, why dont you because you make such a big deal about the various regulatory the lack of communication among regulators and even the competitiveness among the regulators. Just spend a minute just to describe what each of them were and what they did. Okay. Sure. Well, as the book opens we have a whole village of regulators. Five major federal operations that regulate the banking industry. This is in addition to state banking regulators and all of the 50 states. There is an entity called the commodity futures trading commission, which regulated the old Agricultural Commodity markets which had almost overnight become hotbeds of innovation for Financial Derivatives that had never been part of the market ecology before. There was the securities and exchange commission, of course, which was the bedrock of the reforms after 1929, the sec regulated the Options Market and wall street. And then there were of course the stock changes. Thes which had regulatory responsibility. The Treasury Department had oversight over the treasury market where Government Bond trade, but banks also traited those so that was overlapping jurisdiction. Wait as fragmented, vulcanized leakinger to system whether it was like the blind man and the elephant. Everyone would see their piece of the market but daytona see everybody elses piece of the market. A lot of turf consciousness. Oh, unbelievable turf war. It wasnt just among the regulators. It was among the congressmen who oversaw the regulators. So, farm bloc in congress who were deeply invested in commodities marks. That liked out for the commodity futures trading mission. Whereas the bankers and wall street looked out for the sec. So, the politicians were playing turf war, the regulators were playing turf wars and the legislation was a mess. The laws that credited the cftc was one of the most elastic, insane pieces of legislation ive ever seen, and it was constantly being interpreted by the courts in ways that threw the Market Regulation system upsidedown. Apropos of not much, die unanimous does have the great fact in her book that the only vegetable to be that you couldnt trade on the commodities market was onions. Yes. Because there had been an onion scandal. An onion trading scandal at the commodities mark and gerald forked before he became president , had at love 0 Onion Growers in his state and he wrote into the law you can have futures contracts on anything nell world but not onions. So, the second scandal that you talk about id never really thought about it in terms of 1987 bass the failure of pen square bank and its its effect on continental illinois, a bigger bank, night penn square loans and penn square is the bank that was funding an oil bubble in oklahoma and texas. What id like to penn square eventual he folded. Continental had problems. Idike to connect to to your larger thesis that leads up to 1987. A little oil patch bank, penn square, had been upstreaming loans to continental illinois and other banks across at the country, and major banks from new york to seattle endured enormous losses as a result of one little bank. And what that awakened regulators to was the notion that there were these hidden fault lines that they couldnt see, that had built up in the system. No one knew when penn square, down in oklahoma city, began to shake and rattle, no one knew that it would almost bring down continental illinois. Now, continental illinois is critical to the story because in the days immediately after black monday, continental illinois are going to make credit decisions tar are brave and help hold the system together. So if continental illinois had failed in the aftermath of this oil patch bank, black monday would have been very, very different. It was important issue thought, for people to understand how the how interconnected banks and brokerage firms, little banks and big banks, Commodity Markets and stock markets, were becoming by 1984, when continental illinois had to be rescued. Now, you the way you describe it, let me put it this way. A at certain point they begin to invent Financial Derivatives. Always before commodities were traded there was some physical reality to them. Right. So for the very first time theyre basically creating derivatives that allow people to bet on a basket of stocks. Critics would say at the time, this isnt really stock market buying or thought. This is just betting. This is just a gamble. So i guess one question i would have is, was it just a casino or did have some larger purpose . And then secondly, can you just describe how these vehicles work and then well get on to how they work in connection with other things in the market. Okay, i want to underscore you dont need to know how futures contracts work to understand this story. But im reminded as i was writing this part of the book about the great disney film this sorcerers apprentice where the wizard teach this apprentice magic spells and then goes off to town and the apprentice tried his little bit of magic and gets out of control and he doesnt know what to do. Thats where the markets were. A little magic, the creation of these Financial Derivatives. Initially stock Index Futures contracts. Followed by stock index options contracts. And these were lowcost ways to speculate on what was going to happen in the real stock market to the real s p 500 stocks. A hedging tool but also a speculative tool. And, yes, they did have some reason for being, as larger and larger portfolios began to grow up. Pension funds, endowment, igrandrick gigantic banks, investing in the song market. They needed to hedge those and this gave them a way added some liquidity to their positions, but like the tell people what hedging means. If you take a stake in a particular security, asset, but you youre a little concerned that maybe youre a little bit wrong or maybe youre a little bit late or maybe youre a little bit early, you want to take an offsetting position that will buffer some of your losses. A good example, for example say you own auto dealer stocks. You own gm and chrysler. Well, what could happen that would hurt auto sales . Lets see. Oil prices could go up. Gasoline prices could spike, and that will hurt auto sales. If you want to hedge that position, what will you going to do . Youll buy oil stocks because when your auto stocks go down because oil prices have gone up, oil prices are going to go up oil stocks are going up because oil prices have gone up. So those kind of seesaw positions where you have a stake in one market that will offset a potential loss in another market, is what all this hedging was about. These funny new toys, the futures contracts the options contracts, were ways to allow giant instant investorrors to do that. What they did without anyone really reflecting on what that meant, was they tied all of these markets together because investors using the futures market to hedge their Stock Investments were tying those two markets together. Futures traders often hedge their position in the Options Market. Tying those two markets together. Similarly, some people would use options to hedge their cash stock positions, tying those so, markets that had previously been thought of and regulated as separate silos, where Different Things traded, without anyone realizing it, had become shackled at the ankle. All were going to move in lock step one way or the other. And it was that reality that nurse on us as 87 came close. At the same time the regulators remained in the same position, regulate this but not that. Exactly. That was nearly fatal. One example of that was on the day after black monday, john failen, the head of the new york stock change, decided decided tk the commuter orders delivery system, the fast track that would carry the orders to the floor. He decided if you were doing complicated computer driven Investment Strategies as big wall street firms weror, you couldnt use the system. He was going to reserve the system for the little investor get retail orders to the floor. When he did that, he barred from his market a group of investors, called indexer arbitragers who were critical to maintaining balance in the futures markets, because with all the miami wanted to sell in the futures markets, these were the guys guo were buying but they were buying their only if they could sell in new york and buy in new york only if they could sell in chicago, and when fallen said, no, you cant use our fast track to place your orders, those investors went away and the futures market and the stock market spiraled away from one another. Their prices diverged and it was nearly fatal for both markets. Now, theres another invention at the same time which got a lot of the blame, whether correctly or incorrectly, for black monday and that is portfolio insurance. Right. I remember at the time reading article after article about portfolio insurance and how could anybody have thought this could possibly worked and how portfolio insurance accelerate the problem, and how this was an innovation or device that needed to go away. I think it actually did good go away you. Found the people that more or less invented it, and who made a nice business for about five years until it was over. Selling it. Tell us about what it did and how it relates to these entice interconnection and then well just go into what happened at black monday and how all these events affected each other. Okay, well, portfolio insurance was basically a hedging strategy that relied on a computer formula to tell you how when to sell and how much to sell in order to reduce the risks in your portfolio, and it went viral in 198485, 86. Big pension funded a it up. This is great. We can have big portfolios of stocks which are riskier than we normally want to be, but were hedged with this new product. Which would do what . Automatically sell yes. Automatically sell down your stock portfolio in exactly the right proportions. Remember, you have a portfolio trying to track the s p. That means you own some representative process portion of the s p 500 and you have to sell them in exactly the right proportion to continue to track that index. These Computer Programs would direct when you would be selling, how much you would sell, and you would say in advance how much of a risk you were willing to take. If i have 100 million portfolio and tell you my insurance salesman, okay, i can swallow a 5 loss but after that, i dont want to lose anymore. Well, they would design a Computer Program that would manage the sales of your stock in your portfolio to an extent that by the time the market had fallen five percent youre install cash. All your stocks are sold. So it would manage the sales and on the up side the purchase of stocks for big institutions with so they would continue to track the market up and down. In some ways it was a pretty simplistic idea, but the big problem with it was, if everybody tried to do it, it meant that everybody was going to be trying to sell at the same time. Everyone using portfolio insurance, who was trying to adjust to a five percent drop in the market, theyre all going to be selling at the same time. You say to whom are you going to sell, the buyers . And this disconnect between the way the markets traditionally work and the way these new players wanted to use the market, is where we really started to get into trouble on black monday. All right. So, lets talk about that a little bit. In the runup to black monday, the market basically peaked in august of 1987. A fiveyear bull market. Now, again, from the outside perspective, you would say, well, of course were going to have a correction or a drop because especially for most of 1987, the market had bon gone bonkers. From january to august, absolutely a rocket. So, you would expect some kind of correction even without computerized train, portfolio insurance. But what happened after august was the market started to make these gyrations that were very unusual, ups and downs, hundreds of pounds at a time 50, points, 60 points and then 100 points at a time. What was that signaling . What was actually happening when that was going on . Well, just to back up a little bit on that. That was not a new phenomenon. Markets had been gyrating inexplicably for more than a year, almost two years. There were dates on the calendar that people would look at and say, my good in this is a date when some derivative in chicago is entiring and those traders are all going to slam into this market witching hour, double witching hours, triple witching hours, and the stock market got used to. Those that had been going on for a couple of year. Stay on the sideline this friday of the month. The big institutions are going to be slamming the closing bell and will drive it occupy or down. This weirdness had been going on for a while. Then it started to get weirder and werer, and starting on january 23rd, one over craziest days of the stock market ever, for no reason at all no news no headlines no nothing, the stock market starts out with a nice climb, pivots, drops 115 points, perspective involves, climbeds 60 points, pivots, drops another 50 points in the course of one afternoon. The veterans are looking at this and saying, what the heck is going on . So, the movements of these giant investors using highspeed order delivery systems, to exercise their strategies in the stock market, had already started to leave their mark. Now, as you say, joe, and youre wright, the peak in august was followed by what looked for the first month like a normal correction. The market drifted down all three september, more down days than up days. Looked like a normal correction. This is how markets go down. And then in the first week in october, it really sank, and one week the mark was off six percent, a substantial amount. Everybody went home and said, well, okay, we had the correction. We had this crazy bull market and now its corrected and now things will get back to normal. The following week was a 10 drop. This worst week anybody had ever seen. And somewhere in that week, joe, the psychology of the market changed. Somewhere in that week actually 30 years ago tonight things started to change in how people thought about what the market was doing. I take the title of my become from a statement that john failen made to Congress Early in 1987 when he predict that all these new trading strategies giant invest vestors were using were some day going to turn a normal market downturn into a first class catastrophe. What made him say that . Think that . January 23rd. Because he was seeing these crazy movements in his market, wild schwins on the upside and down side, nosedive at the closing bell. This war not normal. He had been on the floor of the stock change his whole life as a trader elm knew the market machinery was lurching and jerking. He was attempting to wake up regulators and policymakers and lawmakers to this genuinely new thing that was affecting the way his Traditional Market worked. So, when black monday took place, after this, i guess the real question is do we know what actually happened . Or is it still something of a mystery . Terms of what was the effect of portfolio insurance, the effect of options new futures and options . How much did just plain oldfashioned selling of stock by Fidelity Investments, by everybody, by vanguard . Play into it . How much was the old world and how much was the new world and how much was interaction between the two. We know a lot of it was inter, a between the two and that was the genuinely new thing. We know there was some oldfashioned selling. Fidelity investments was one of the few mutual fund houses that had to sell heavily on black monday, most mutual funds didnt, but it was one of the few that had given investors the right to pull money out by telephone, and so because theyd made it easy for investors to panic, investors panicked. They were an oldfashioned seller, selling to raise cash to give people their money back. But the biggest impact on the market were the interactions between these sophisticated computer driven Investment Strategies and the marketplace itself. The market was simply not able to stand this torque of this selling. It was not built for that kind of selling after lang, and in the post d the avalanche. In the postmortem some disspite but there was no dispute about the fact the portfolio insurance was indeed a fact glory black monday, as were several other computer driven strategies. They had genuinely changed the way the market worked. Another thing that was significant in the postmortem of black monday is how few big traders had the bulk of the impact on the market. They identified ten, ten giant traders who did a substantial percentage of the selling on black monday and the days after. So, one of the thing we learn after black monday was the big guys are here, and when they all run over to one side of the boat, at the same time, its going to capsize, and these were genuinely new features of the market. They hadnt arisen overnight. Thats why i start my story when i do. But they had fundamentally changed the way the market machinery worked, and thats what we learned. Why didnt we wind up with a total collapse of the market . In other words, why did it recover . Well, thats one of the most exciting chapters in the book, joe. Yes, thats why i asked you about it. It was luck, improvisation, personality. There were deals struck in the milled of the night on a handshake that prevented a firm in chicago from defaulting. There was a banker in chicago who defied his washington regulators to prop up his options Clearing Firm and keep it from breaking the options mark. There was a banker in new york, the head of the new york fed, leaning on the bank of england of all people to try to give wall street firms a break from a very bad deal theyd gotten stuck with. There will lastminute cliffhangers. Most people dont know that for more than a week after black monday, regulators did not know if charles swab, one of the most iconic him ins on mainstreet at the time, was going to be able to survive this crash. It was hit with a ruinous loss out of the hong kong office. Desperately trying recover the money from the crazy trader, if it lad not been dwight be forced to close the doors and regulators who kept all of this quiet, were terrified that if schwab failed, Mainstreet America would panic blindly, and everybody would flee the market at the same time. So, there were there was a moment on Tuesday Morning in chicago where the Chicago Mercantile Exchange what 500 minimum shall of the money it head to have to open the doors and if i hadnt opened the door this futures market would have been in n peril. The same parchers at continental illinois, over the phone, with three minutes to spare, loaned them the money so they could open their doors. So, how did we get through it . Personal relationships, improvisation, accidental leadership, a lot of luck, some armtwisting and subterfuge here and there. It was a near run thing and you could never write the rule book how to do it again. It was just too much serendipity. You cant count on those kinds of relationships and lastminute rescues getting us through the next time. So, speaking of the next time, lets talk about nat for a second. We have the same regulators. We have the same turf battles, as far as i can tell. We have vastly more sophisticated instruments. Vastly larger investors. Yes, as we found out in 2008. Yep. So, if they were putting aside leadership issues or if there were another event like 1987, which seems like there certainly could be, i guess there or two questions really. One is, is the market better at dealing with the trading with the back and forth, with the strategy, their interconnection of markets, than it was 30 years snag thats one and then second, is the government better at understanding the interconnectedness and the importance of understanding how one market affects the other . Well, certainly black monday wasnt totally wasted on the Regulatory Community but one of the most distressing thing about any research is seeing how little effect that knowledge has had. In the aftermath of black monday, one of the best blue ribbon panels recommended one of the premiere steps that needed to be taken to strengthen the market was we needed a unified regulatory system, regulator whoa who could have the 360degree view of the whole marketplace and we needed that right away. This vulcanized system was dangerous and cooperate work. That was in the Brady Commission report in 1987. Fast forward to 2008. The Congress Hearings after 2008, federal regulators, kris cox from the sec, former treasury secretary john snow, testified before congress that one of the big problem theyd had in 2008 was we had this fragmented regulatory system. No one could see 360 degrees and that needed to change. It was dangerous and we needed to fix it. Just a few weeks ago, in early october, the new Treasury Department in the trump administration, released a report on u. S. Capital markets, and right there on page nine and ten of the executive summary it says that among the significant challenges facing u. S. Capital markets today, overlapping mandates, jurisdictional friction, this fragmented regulatory system that we have. So, i dont know what has to happen for us to finally wipe the board clean and build a regulatory system for the market we actually have. Hasnt happened yet and i hope it doesnt have to be worse than black monday for it to happen but we have to recognize this as a critical issue. So, it is that steeps over into your politics question, is whether the leadership in washington that can get this done . And i wish i could be more optimistic. There just does not steam be the bandwidth in our political environment to undertake a stem to stern renovation of our regulatory system, however overdue it is, however desperately we need it. So im not optimistic that well sail into the next financial crisis in a sturdier ship. Were counting on the banks and traders to control themes . We are hoping they will be. Hold on one second. [inaudible discussion] the people that havent the most capital in the market, do you think maybe they have too much power in keeping it from being regulated . Because it seems that every crash that happens, someone is benefiting greatly, and theres incentive to not fix it because we always seem to bounce back and then people forget about it. So, im wondering if theres if that is what is going on here . If its not just turf wars but like the turf wars are be design. Thats a very good point. Certainly wall street has been resistant to regulation since then 1930s. Theres a long history of that. Part of the reason they are resistant, im a little sympathetic to because they feel like lot of these regulations are drawn up for a world that doesnt exist, and theyre right. Lawmakers in washington are writing rules for a market they barely understand. And wall street is saying, that doesnt fit reality. Okay, i got that. But all street is not sitting down with washington ask trying to come up with a system that will fit reality. As to the scale and the size of the big guys, it is staggering how big the big guys today are. Two major money managers, firm called black rock and Vanguard Mutual Fund house two of those, together manage 10 trillion. So, that is a figure which would have blown the circuits in 1987, and i was its a figure that would have been outsized and frightening in 2008, and yet we have not found a way through regulation, we have not found a way to tamper the growth of these behemoths who Wander Around in our marketplace dish tell my husband, you realize that investors like us are just the mice on the elephants dance floor. The el fans starting into good, ing intoe, got out therefore way thaws theyre so big their impact on the market is hard to anticipate. Vanguard and black rock are interesting because theyre fundamentally indexing most everything. Right. And that gives me no comfort whatsoever. So. Which is to say, there all trying to track specific market indexes, which means they are all buying and holding the same stocks, and if they have to come up with cash to give you your money back, joe all be selling. All selling the same stock at the same time. So, indexing, while perhaps a low Risk Strategy for you or me, for the marketplace, if everybody is indexing, were in a lot of trouble because it means everyone is going to be buying and selling the same limited collection of stocks at the same time. But that is true of everything in the market. That is fundamentally what happens in the market, is that same thing with portfolio insurance and using stock Index Futures to hedge. You get a strategy, everybody starts to do mint and doesnt make sense because if everybody is doing it, once things turn,. Whose gone the other side. Who is on the other side of the trade. Youre absolutely right. This euphoria we see in the markets, time and time again, are the notion that its different this time. This time its different. This time everybody can do the same thing and it will turn out okay. Thats never going to be true. One of the guys one of the prefers prefers who invented portfolio insurance, a position night group of people, told me he thought very early on in this creative process, he said, well, how will this turn out if everybody does it . And he said, i didnt like the answer i got. But he truly didnt believe that everybody would do it. In fact, far more people did it than he ever dreamed, and it became far more destabilizing, i ask the same question about index funds. What happens if everybody is in index funds . What happens if everybody is in indexrelated et fs, Exchange Traded fund inside we get these fads in the marketplace that where we say, well, every little after them is good, more of them is bert. To a point thats true and after that point more of them is just more of them, and more and more people driving to try to get through the same doorway at the same time. So, we need to be alert as individual investors to when that is happening to when markets have overdone a good thing. Too much of a good thing is a market crisis. Another question. One more question. I guess this is just speculative, but in the 90s they had the internet bubble and everybody thought thank you future was really bright and then it crashed and were like, duh, this was a bubble. So im wondering as someone who has done a lot of research about this, what bubble are we possibly in now that were not paying enough attention to . Is there any im a little bit afraid, joe can argue with me but im a little afraid were in an indexing bubble. I think we have embraced one Market Strategy to the expense of a lot of others, and that needs to be examined and needs we need stress test our markets for how well theyre going to handle that. Im especially concerned about the index driven etfs becoming so popular as individual investments. So those are the two things that worry me. I dont disagree with that. Would also add, when you look at certain stocks like netflix, facebook, google. Alphabet. That have outsized stock prices, id be nervous about those, too. Yeah. Trees dont grow to the sky. When you have seen something grow that much, you have a problem. The idea of fads and main ya are always going to be dangerous in the stock market. If thats all the questions, thank you for coming down to word and having this very interesting conversation. Thank you for have us. It was pleasure. Was fun. Thank you. [applause]