YouSaid · the spoken record

Dave Nadig

lines on the record: 126
first: 2022-11-11
most recent: 2022-11-11
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“One knowing your customer is a big one, anti money laundering, those are real issues. I don't want to pretend that those aren't real issues. And they're going to take years to solve. This is not something we're not going to flip a switch tomorrow. But what I fear is going to happen is because the block is now regulatory, we're going to end up in the world's biggest regulatory arbitrage where you're going to, and we've already seen this, there are jurisdictions where you can kind of get away with doing anything you want to do in crypto. And hey, I'm sorry if you lost a million dollars, call Interpol. Maybe they'll figure it out for you, right? And then there's jurisdictions like the United States, which are quite locked down. The problem is that if I'm right, if the world does move more quickly towards this and you start seeing capital follow it more than it even has already, you end up with this weird haves and have-nots world where the United States actually ends up on the sort of bud end of innovation and plays catch up for the next 20 years. And another financial center will emerge.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a database It's regulatory. That's literally the one word answer is it's regulators. That's it. The thing that is keeping the entirety of normal markets from collapsing and being replaced by free crypto software is that there are rules that won't let that happen. And there are rules that are there for a very good reason, right? I mean, we have a lot of securities laws in this country, not because we're obsessed with lawmaking, but because some bad stuff happened and we fixed it by making rules about it, right? You know, going back to the 20s, actually going back to the 1400s, we have rules about how we engage in these transactions and the rule of law is a big deal, how that interacts with this sort of bear bond instrument world where literally ownership is the entirety of the law is unknown territory, right? We have to rewrite how we think about intellectual property, how we think about property rights themselves, how we think about ownership and escrow. And security is a huge...”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“People have already done this. This is not news. There's a thing called the set protocol call. You can create a portfolio with a set of rules and you can even put in a fee of how much you want to get paid because you came up with a smart contract. And there's hundreds of thousands of these things out there already. So the rails for doing it, the smarts, people talk about Ethereum being the world computer, right? There's real truth to that. There's work being done by a computer there to keep track of ledger entries and to move those ledger entries around, which is the entire stock market. It's moving ledger entries around.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“People to agree on what the tokens mean and how they unwind to unlock some sort of underlying value, we can do all sorts of crazy stuff through the crypto rails that we could never have done before. You want to put together a portfolio? Great. Here's a smart contract. It owns these 15 other tokens that happen to be stocks. That can be managed in real time by the contract itself. Creation and redemption literally just becomes buying the thing.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Lots of reasons, but you could invent another one. Inventing another one is what crypto has done. If you're in Europe right now, for instance, and you open up an account at ftx.de, which is FTX is European business in Germany, you can trade Tesla, but not as a stock. You can trade what is effectively a fungible token, right, a unit of Tesla. You and I can trade that in the FTX closed ecosystem all day long with no trading costs, no settlement, no slippage, no nothing. It's a bearer instrument. It's like me handing you a pencil. You just now have the pencil and I don't. And the legal claim is the fact that you've got it and I don't. That's scary for all sorts of reasons, but it's also incredibly powerful because if you imagine that world where instead of it being this closed ecosystem in Germany, it's just sort of how global markets work, all of a sudden almost any beta, any risk, any ownership stake that you want, as long as you can get too.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, so if you think about right now, I have a million dollars I want to put to work. I wish. I have $100,000 I want to put to work. I have lots of different ways I can get that number to go up. And ultimately, let's be honest, that's what you care about as an individual investor. I have $100,000. I would like to have $110,000. How do I get there? And right now we throw it into the stock market and we effectively use a tokenized system, right? I mean, nobody really carries shares around anymore. You get a ledger entry at Sedon Company down on Water Street, right? Like it's all just this fiction that we've created to keep track of notional ownership. And then we built this enormous infrastructure around it. So now we have payment for order flow and 17 market centers and reg NMS judging what has to get broadcast to who when. We made all this up. I think it's really important to remember this is fiction. We just created the system out of whole cloth. You can trace why and there's”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“How do I describe the work that I think I should be doing and that hopefully people find at least entertaining, if not valuable? And a little from column A, a little column B, you know, I've spent most of my career writing and thinking about finance. Most of what I've done has been taking an understanding of the status quo, which is very brief because tomorrow it's gone and trying to help people understand what that means for next week and the next year and the next decade to position products underneath it like ETFs in 1992 or model portfolios in 2000 or direct indexing in 2010, right? Really trying to focus on that. Now it would be tokenized asset management. It's like you can see these things if you're paying attention, but it's super easy to get really excited and spend lots of money chasing them, having some context is important.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Zoltar, thank you. I know my bit. And I think it's actually a dude in the movie. But anyway. Yes, it is. Neither here nor there. So look, about a year ago, I had a conversation with the senior management of the company as we were putting Vetify together, right? And we would, you know, one of the things we use as a hook when we talk about the company is we're trying to turn it from an industry to a community. What we mean by that is that we focus and finance a lot on rules, regulations, process, operations, none of which matter at all. And we've often just ignored the fact that they're human beings at the end of this equation. Now that's changed because of a lot of what's gone in behavioral finance, and I think that's great. I don't think it goes nearly far enough. I think human-centered organizations are always going to win. So we really tried to skew the organization towards that. So with that context, I said, here's a bunch of stuff I want to write about, which is the stuff we've been talking about, how the markets work, how people fit into them. And I literally just started putting adjectives and nouns on piece of paper trying to figure out.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“People go in, tell me my financial, and hand you a card through the glass. Madam Zoloff with the curban on in the whole nine yards, like big.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Both is the real answer. I think the way to think about this is we're a business to business organization in terms of where, you know, if you're going to look at the revenue lines, but with B2C responsibilities, right? We take our relationship with the financial advisor very, very seriously. In my position, that's really almost exclusively what I focus on.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“So that's where Vetify sits the company, like the meat and the bones underneath it, brands folks know ETF trends, ETF database. We recently merged with Advisor Perspectives, which is the largest advisor newsletter in the country. So we've sort of cornered a market on this dialogue between asset managers and financial advisors. And it goes both ways. We also do a lot of polling with financial advisors. We meet them at conferences. We do surveys of them. We track their behavior as they're doing research using our data and analytics tools. And that lets us really get an interesting picture of, hey, what are advisors thinking this week? Well, we can kind of tell you because we know what they're researching. We know how they answered poll questions last week. We know how they answered a survey two weeks ago. And then we write about that. We produce 50 odd pieces of content a day.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, we're in the business of sitting in between asset owners, financial advisors, institutions, retail, and asset managers, the BlackRock State Streets, PimCos of the world, and helping them understand each other. What I spend most of my time doing is helping advisor to understand the thousands of crazy ideas the asset management comes up with every year. And then I work with the asset management community to help them understand the hundreds of thousands of financial advisors and institutions who may or may not be interested in any of those products whatsoever. And so what that entails is a lot of good data, understanding what both sides want of each other and understands, it means having to understand markets, because if you're going to understand the asset management industry, you need to understand, well, why are managed future is part of the conversation here today, but not six months ago. And it means spending a lot of time talking to individual advisors and investors who are out there trying to do the real work.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“All right, so well, the shortest answer about how to think about Vatify is we're Morningstar without a ratings business, right? Okay.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Generations of wealth are going to be preserved, and these philanthropical exercises are going to be put forth. Like that's the real success story. I don't need to tell you that. That's your business, right? That's the real success story. And that's much harder than investing.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Lot of your time trying to add alpha through understanding investing better than the rest of the market. That is a mugs game, right? So don't try to solve that problem. It's largely solved. You can go get some turnkey asset management program as an advisor. You could get somebody's model portfolio or you could hire some three CFAs and do it yourself, but it shouldn't be your primary focus. Your primary focus should be solving the much harder problem, which is actually working with human beings, right? The advice part of being a financial advisor is the hard part. That's the part where you should earn the money. We're kind of upside down in how we compensate and how we think about markets, right? Some advisor that's out there and can say, oh, I've generated 1% alpha for the last three years of my model portfolio. Everybody's going to talk about that. But when you talk to that same advisor and they say, yeah, you know, they're these five families I've worked with for 10 years. And because I've worked with them.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so when we think about finance, particularly when we think about investing, which is what we spend most of our time talking about, right, how to take your wealth and turn it into more wealth through all of these tools out there from IPOs to derivatives, how those pieces fit together is no longer a mystery. I mean, that's really the core of it. The academic side of how to build a portfolio, we can argue about the details, right? And certainly we could have a whole conversation about, you know, okay, well, this combination of interest rates and inflation and expected returns on equities is different. And so maybe we need to adjust, but the tools to do that are largely baked. Anybody who has the curiosity and the basic intellectual capacity to learn about the markets can become a fairly sophisticated investor. So if you're an advisor, and I spend most of my time talking to the wealth management institutional business, if you're an advisor, you should not be spending a lot of time.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Crypto is where that enthusiasm went. Everybody who was finance adjacent, tech positive, growth-oriented, all of them went into crypto in that window, in that sort of GFC to pandemic window.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Florid I'm so sorry to get Yeah, and that was an interesting time. I think the 10 years pre-pandemic, so between GFC and pandemic, whatever we're going to call that window, it's not a lost decade. It was a great decade. But in that window, I mean, you were on it too. The conference circuit was lit. There was a really interesting finance relevant event every other week at least all year long.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“And now they're, I think they're the, we relicense the data that I help build over Ebetify, right? I mean, they are now, I still think the go-to source for primary ETF data. So that business continues to run over there. And now here I am at Vetify doing largely a lot of the same work, also pushing a big conference that we're excited about exchange in Miami and Florida.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Not uncommon at all, especially when you're bolting together businesses that do, in fact, have silos themselves. So the data business was a natural fit for FactSet, which needed US ETF data. So Elizabeth Cassman. Facts is a...”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and that was really Jim Wyatt. He started something called Index Universe with Stephen Schoenfeld, somebody else you know in the industry, who's now working for, I believe, market veckers indexes. And they had this vision of understanding that ETFs, which at that point were still largely institutional vehicles, early 2000s, right? I mean, there were some advisor pickup, but you had to be kind of on the front edge of finance or a quant or running your own models, which in 2003 was not that common. They had the vision there that, oh no, this is where all the wealth management is going to head and built a business which eventually through acquiring the right names and URLs became etf.com. And then we myself, Matt Hogan, Jim Wyatt, a bunch of other folks, built that business up into a pretty respectable, chunky business that had a big conference and a huge...”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, that was, yeah, Jim Ross was at State Street a little bit after that when that was, but that was, you know, when the spiders built out, this was very much counter to Spy having been launched. Oh, really? We were the other side of the fence from that, even though Amex was the key. Amex was the glue holding it together because they'd figured out a lot of how to do creation, redemption, how to handle books.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh my gosh, there were so many, I mean, you know, success has a thousand followers of others at this point. The folks that I, I mean, so the people I was working with on the Wells Faro Unico side, because this was a joint project with Ryan Stanley and other folks like that, I was working with Don Lusk and Patty Dunn, Fred Grower. We're sort of the main group. Blake Grossman was the chief investment officer there. Interesting guy. He stuck around at post into BGI for the rest of his career. And so that was the crew that was really doing the hard work there. And then on the Morgan Stanley side, I was working with folks like Joanne Hill, who you know, Morgan Stanley, one of the quants there. And then, of course, all the folks who were coming in from the Amex, like Nate Most, I mean, it was a pretty big group of Jim.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“So I started there. I was lucky enough to be on the edges of a product which became webs, which became iShares. I was absolutely not somebody driving the train on that. I was the one reviewing marketing copy and doing presentations to groups of institutions about how to use the darn things.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“It was bonkers. And I was very, to be clear, I was young and incredibly stupid. Now I'm just older and slightly less stupid.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, I mean, mostly I got coffee at the beginning. You know, in 1992, when I joined, they gave me the highfalutin title of managing director of corporate strategy. What it really meant was I was picking up little businesses nobody else wanted to pay any attention to through all the acquisitions they were doing. So for a while, I ran Wells Fargo's 401k business because they had acquired that as part of Wells Fargo Nico investment advisors. When we did the Barclays acquisition, when Barclays acquired Wells Fargo Nico, I then spent most of my time in Asia shutting down Barclays Dessert Wed businesses, which were brokerage shops in Australia and Singapore, Hong Kong, Japan. So I went around and sort of did some rationalization. They basically sent the young kid out to get his, you know, you know what handed blood on you. Yeah, go fire a bunch of Japanese salary men.”
2022-11-11 · Masters in Business · Dave Nadig on Exchange-Traded Funds · IDENTIFIED FROM THE TRANSCRIPT · source