YouSaid · the spoken record

Tom Lydon

lines on the record: 103
first: 2018-06-11
most recent: 2018-06-11
sittings or episodes: 1
sources: podcast

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“There's also a EMQ, which is a online retailer, but is global. So we love, I mean, I use Uber all day long. I use Amazon all the time. I don't know who their counterparts are in India or in Brazil. This company goes in and picks those. And who are the biggest players in those types of spaces, puts them together in an index in emerging markets, and valuations collectively in that ETF are less than what the S&P 500 is. So what a bargain. With the growth rates that you're seeing, why wouldn't you think about something like that?”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“Awesome ETF where it's actually short big box retailers and long internet providers, right? What a great concept because I think you and I would probably think, yeah, that's something we need to do. Are we going to do it ourselves? No way. They go and do all the work for you and you can go and buy that ETF. I think those concepts and themes are going to become more and more popular.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“Been really tough to beat the SP in the last nine years, right? So we're not really yet in a period where active management can really show its worth, but I think we're going to be getting there. And that's really going to get us more back to full circle where active managers are going to come in. They can show that maybe they're not going to give back as much in market declines. They can find areas where they can add added alpha. And then also when you get into areas like technology, online, I mean, ProShares has this.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“Very good, very good question. I think the greatest thing here is we have competition. So even though it's kind of like the auto industry where you've got the big three, you know, you've got BlackRock, you've got Vanguard and State Street that really monopolize the ETF business. It's not as though we can't have competition. So now I think we've got this mid tier of ETF issuers that are coming in and they're saying, okay, I'm not going to battle in that pure beta space where you can charge five basis points. There's no money in that. Give it to the big guys. They can handle it all day long. I can come in and maybe through a factor strategy or a multi-factor strategy or maybe through self-indexing get a little bit alpha there and even charge 20 basis points and make some money off it but if I can get some alpha then those that are invested in ETFs are going to give me a shot.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“You mentioned a very concentrated industry structure, right, of two trillions in the hands of a hundred funds. Is that market efficient, meaning if you just looked at the size of the fund for a particular strategy, is that highly correlated with the person who's doing the best job tracking the index?”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“And maybe there's a little alpha there, or because I can shave off some of the expenses I can actually do better. So there's a lot of shifting that's going around just to save a couple basis points. Is that good? Does it make a difference in the long term? Some might argue yes. Some might argue no. But the way it's moved from our discussion from mutual funds and charging 200 basis points to now where it is today, pretty good deal for the end investor. They've really made out pretty well.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. And there's some that actually, okay, indexes are based on indexes that we have from the MSCIs and the S&Ps of the world, right? They will then license the index to different issuers. But it's the job of the ETF issuer to do the best job they can track in the index. So you think about all the S&P 500 indexes that are out there and ETFs that wrap around them. Not all of the issuers are as good at tracking that underline and that whole scenario will also play out in MSCI emerging markets and things like that. And now a lot of the self-indexing is happening. So they're trying to cut out the index providers where S&P might charge four or five basis points and they say I can really create my own index. It might be very similar in nature. I can't call it the S&P 500, but I'll call it this.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“So because we are in a situation where we're following indexes, the number one most important thing is making sure you're tracking your index.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“After following the mutual fund industry for a long time and mutual fund managers, and you now turn over and do both, but falling ETF managers, whether it's index or factor-based or active, what should somebody be looking at to determine if a manager is better than another one?”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it's a great question, Ted. I'll tell you right now, we've had such a good run on ETFs that the individual investors are thinking I'm not buying mutual funds. I'm going to buy ETFs. And they're not really looking under the hood. It's just ETFs are cool and mutual funds maybe aren't as cool right now. People talk about ETFs on the golf course. What type of ETF are you going to buy? This and that. It's almost like picking stocks at market highs. The key is it's a great wrapper for obviously indexing for sure for active it definitely can be. But the biggest thing is the transparency because there's a trust involved and there's a discipline involved. And especially for advisors and institutions, they don't want to be surprised. They've been at it before. They've seen it so many different times where you have a manager who may have high conviction, said he's got”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's where it does come in, but the cool thing is you actually have the ability because you know, oh, here we have a taxable event over here. We can balance it out with something on the sell side. And it really is simple for those that are added on a regular basis. And it's amazing to see, even with over 2,000 ETFs that are out there, how very, very few have year-end distributions.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“So if you're creating an ETF, the underlying baskets or the constituents of that index are put into a basket. You've got market makers or authorized participants that do the trading between the buyers and the sellers. Because the underlying have really remained in place, there's not a taxable event. It's really the baskets have been traded. And with that in mind, the only time there really is a taxable event is when you're selling a basket and then it's no longer in the marketplace. A lot of times too in these indexes there's not a lot of changing within the index too. The cool thing is with those active managers who have high concentration in individual stocks, they're really not doing that much trading either. So there's some added benefits.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“So part of it, and simply looking at it when you build a basket, the baskets are swapped, not the individual stock. So in most cases, when you look at high volume days on an exchange and people talk about it, ETFs account for one-third of the daily asset trading, right? Well, the baskets are trading, not the underlying. And that's where you get me through.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“on genome sequencing so they have their own ETF on that. Young analysts that are talking about it, hand selecting stocks in an active way. There's an ETF around it. In a short period of time they got $5 billion under management.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“They don't trade very much, no, and very high concentration in a few number of stocks. It was perfect for them. And you know what? Right out of the block in twenty seventeen, they launched some ETFs, were able to show some alpha versus their benchmark. All of a sudden they're getting some traction. Exactly what should be happening. Good managers. And they're not 80% of active managers in the fund space underperform their benchmark. We know that. They don't have the tax efficiency. The fees are greater. There's a big headwind running up against them. But if you've got something that's can differentiate yourself, the ETF space is fantastic. There's another group arc, which is down in the southern part of the island here. Kathy Wood, she was a Bernstein, very much in disruptive technology, robotics, automation, genome sequencing. We just did a webcast a couple days ago.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I feel it'll eventually come full circle. Absolutely. And there are already some that have entered the space. Now, remember, one of the biggest tenants about the ETF space is transparency. So a lot of active managers who Notice what's going on in the ETF space have held off entering because they don't want to disclose on a daily basis what they're buying and selling. Some mavericks have actually done so. Chris Davis right down the street. Davis advisors three generation company, great value managers, finally said, hey, we're kind of transparent anyway”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“So in this evolution from pure index fund factors, you mention it the next step is active management. Are you starting to see, let's just start on the traditional long only side, growth in long only ETSs?”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, what's happening is the wholesaler route is becoming less and less. Internals are becoming more important. So if you have internal group that can maybe feed phone calls that come in or they can answer emails, but also help with other social media is beginning so much bigger.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“Where we'll profile different ETFs that might do that. Advisors love it. They take it. They dig down deeper and then they find out the best thing for them. They're not calling the ETF issuer. They're not even going to the website because today with all the research available, they can dig down themselves independently and find out what's going on.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a great question because it's been very disruptive for the money management business. Much of the ETF industry came from the fund industry and from a distribution standpoint we all know it's all about wholesalers. It's all about relationships taking somebody to dinner or taking them golfing or something like that. It's all a relationship business. Today it's completely different. We do a study every year entitled How to Communicate With ETF Centric Advisors and we ask them not only how they want to be communicated with, but how do they get their research? Their number one research tool is Google. I want to look at an ETF that might do well in a rising rate environment. So I'm going to Google it. And a bunch of us, like us and other editors research this and we write about it. It pops up on Google or it might be on Yahoo or might be on Fox Business or something like that. All of a sudden we give three scenarios.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, there's fee compression there too. You can get a smart beta strategy at Goldman for nine basis points. You have pure beta strategies now for four. A lot of folks in the industry think it's just going to go to zero because you can make a little bit on the spread and securities lending is now playing a bigger role. So securities lending in some areas can be two to three basis points. And are you going to keep that yourself? Are you going to share with the shareholders? There's a big debate about that. But during bear markets, there's even more demand for securities lending. So that's something to kind of think about which might come into play in the future.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“What's happening with fees that we know in the index side? It's a compression race to get to the lowest fee. You can Vanguard obviously has a big presence in the NTF space as well. What happens with the smart beta strategies?”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's growing, I would say, ballpark might be the 400 to 500 billion area. Investical power shares does a good job of surveying these folks on a regular basis, and a couple things that I can share with you is the percentage or allocation that's gone into pure beta, ETFs continues to increase. And really in the last couple of years, for the first time, they've started implementing smart beta strategies, a lot of institutions have. And my big question was, where did that money come from? Did it come from money they were taken away from hedge funds? Some, but they're actually shifting money from pure beta cap-weighted strategies as well. So that makes a heck of a lot of sense.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“You can't point to the indexes, you're going to have to take it on the chin yourself. And the question is, does the average advisor have a plan? Number one, how is the average client going to react to that? And as far as self-directed investors who have invested in ETFs, maybe through robo advisors and that type of thing, are they going to stick with it? They should, we know historically, they should over time. Are they going to? Probably not, right?”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“Who have done that over the last nine years since the last bear market, it's paid off tremendously for them. They're making better money. Their clients have less fees. They're more tax efficient. And if you bought just a group of ETFs for your clients and done asset allocation, worked out great. So now your question, where do we go from here? Because in the past during that bear market, if you had a bunch of managers that were sitting on the bench behind you and a couple of them under before, well, you could always point to them and say, well, we're going to fire this guy and fire this guy and hire somebody else in. Well, now you look behind you. You have a bunch of indexes on the bench. It's all about you. You're naked on top of the mountain. So during the next bear market, if you don't have a plan in place.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“Couple things I think with the amount of money that was in mutual funds and a big thing we compare to is mutual funds. Most advisors and most individual investors felt that if you have a money manager who has had a pretty good run, that they're also going to do a pretty good job for you in the downside. Inevitably we know that that's not the case. So did people lose a little bit of trust or a little bit of confidence in their managers? Maybe. Was cost involved? I think so as well. The whole transparency thing. So we've had a huge shift also in the advisory world from commission to just feel only RIAs as well. And with all the economics that are going there is everybody's fighting for every dollar, a huge amount of advisors in the world have broken away from the wirehouse farms and the independent firms to set up their own shop. It makes sense for them just to if they're going to do the whole thing charge a flat fee be completely transparent with their models.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's always this question, certainly with the index fund movement, of what's going to happen in a downturn? Or do the people who own these really understand? It sounds like the last big downturn we had really fostered the growth of these ETFs. Why do you think that happened?”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“That all follow a role. And smart beta is a huge net. We can get into single factor. We can get into multi-factor. And then some are a little bit more sophisticated. It's great to see all the ingenuity that comes out today, but for example, we're in a rising rate environment. There's some strategies that might have a short treasury component and a long corporate and high yield component wrapped within that index.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“Almost two trillion dollars is in the top one hundred ETFs, so right now they're about two thousand two hundred ETFs and we're adding more every day. But the top one hundred ETFs two trillion dollars, still pure beta strategies, very few within that one hundred happen to be outside or a little bit more sophisticated indexing. You know, you're going to have the major equity indexes, the major fixed income indexes in there that have tens and in some cases hundreds of billions of dollars like SPY, which is now $270 billion, right?”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, in the US, $3.7 trillion, which just at the end of the financial crisis in oh nine was about six hundred fifty bill So, pretty good run, right? However, comparatively to the fun side, fourteen, fifteen trillion dollars there. I mean, we're chipping away at it, but mutual funds aren't going away anytime soon.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“And you can't violate the internal disciplines that are set up or something would really pop to the surface because the job is to follow the underlying index and have a very high correlation. If you don't, it's pretty notable.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. So up until 2007, 2008, most of it was pure capweighted indexes. And the low costs, the major market indexes that you would know, and then there was a battle about fees and got lower and lower. as most of that cap weighted index space got eaten up you've got more players that came into the space and said hey factors are also important whether it be volatility or momentum or value so now there was a whole slew of those players that came in introduced those options and now multi factors are also so what we're doing is we're evolving kind of back to active management still now in an index form and the cool thing about it is it's transparent there's a discipline around it there's no money managers that are making decisions in a black box it's all over”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“And there's some decent money that's coming behind it. And as you point out, it's really index-based. Still, to this day, 95% of the ETF marketplace is index-based.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“So 1993, Jim Ross, a good friend of mine at State Street and a crew, put together the first ETF SPY, the S&P 500 ETF, merely as another way for liquidity for big clients that wanted instant exposure. That was the whole, they never believed it would really amount to anything, but as a big bank with large clients, it was something that through this new structure where they had a good legal team and early on, it was created. And it did exactly what it was supposed to do. It wasn't really marketed in any way, only to their clients. And then all of a sudden others heard about it. Other companies began copying that model. And others signed on for it as well. So it took three or four years to actually get some traction. But as we got into the early two thousands, all of a sudden, there's some major players.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“All right. So let's turn to ETFs. Everybody hears about ETFs. Some people think of them as synonymous with index funds, and there's certainly some index ETFs. Why don't you take me through just the evolution of where these things came from, how they were used, and we'll just go from there.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“ETF started ninety three. They had a pretty slow buildup, but many of those active managers that had used mutual funds on the past now realize that there was this new tool out there, ETFs where They are very liquid, and they traded in her day, and the spreads were getting tighter, and there's more volume there. So they were saying, fine, we're going to begin shifting over there by the end of the bear market in 2003 when these same fund managers and the salespeople were coming out and saying no, now they're knocking on the doors and saying we're love to have you back and people are just waving at us.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sometimes, but also they'd have to control assets. So sometimes a bunch of money would come in at one point and they'd get scared so they'd close them down. So there were little tricks that would happen in the industry, which would work in their advantage to a great degree. But what was funny is in the 90s we had kind of a slow steady upward movement in the marketplace. Those advisors that wanted to move in and out of funds actually would get handcuffed to some degree. If a fund company knew you were coming in and putting $20 million and then you were selling it six months later, they would actually work with the custodian. The custodian would say, they don't want that type of money, so you no longer can buy that fund, which worked very, very well for them through the 90s. But then what happened is in the early 2000s, we get a bear market. Well, they're not going to be as picky as that. At that point, they're going to take all the money, but that was the period because”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“So it was average to see one hundred and fifty basis points, but Quite often you'd see hot managers that would be above two percent.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it was really expensive. It was quite often that you'd see expenses be, you know, 100 to 200 basis points. And then the internal trading, and then on top of that, if you're at a platform and you're not on a no transaction fee list, then the trading costs of the client. Then the management fee as well. Disclosure wasn't as great as it is today. Boy, you know, over the past few decades, it's just continued to get better and better. Technology has improved tremendously. Being able to do batch trading and making sure that the efficiency of the trading is increased, that's been tremendous as well.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“Individual investor, you'd have to pay a certain amount of basis points to the fidelities of the Schwabs of the world. That was a huge explosion in business for those platforms and for advisors that were RIAs, Fi-only advisors because in the past they had to manage money directly with the fund companies.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, well, it got better because it went from you had to trade via sending a letter to the fund company to making a phone call to the evolution of the platforms. So then the Schwabs, the TDs, the fidelities of the world said, look, we can make this a lot better for you. We can offer you a whole platform where you go to one place to make all your trades. So the late 80s, early 90s was a huge growth area. And the fun companies didn't mind it because they would take all that work and then pay for it. Now, the costs involved in trading also declined at that point. I mean, trading early on in those days might have been 20 or 30 bucks. You know, it's down to less than nothing today. And then also the evolution of the no transaction fee platforms. So if you want to get on the platform and not charge the advisor or the”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so you're in the mutual fund area, covering mutual funds, trading mutual funds in the 80s, in the 90s. That's a huge period of growth and change in the mutual fund industry. What were the key trends that you saw evolve?”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, number one, and number two, hopefully have some alpha. So you're picking good managers. So back then the fund industry was full of rock stars, you know, the Peter Lynches, the John Naffs of the world, the John Templetons, right? And you'd read about him on the cover of Money Magazine, you'd see him on Wall Street Week. It wasn't just making money, but you're backing a horse. And that's something I think, you know, with the ETF industry, we're missing today.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, when you started, this is an investment advisor who's trading mutual funds based on a 200-day moving average. How much of what you did was just like operational in getting people to make those changes? Okay, here's the moving average. There's a database, you're collecting the performance.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“It through the roof so now you can say you've got this trade in place, you avoided the big decline, moving averages again, there are a bunch of firms that did a good job on that were out before Black Monday. And really, we hadn't seen anything like that since 73 and 74. And then since then, it really was up until 2000 to 2003, which was the next time we had something sizable, right?”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, this was a technical trading plan, a simple moving average. This advisor used something short of a 200-day average, which historically works pretty well. Obviously, you can get some whipsaws, but if you can avoid some bear markets, that really helps. And this advisor actually had a sell signal on the Thursday before Black Monday in 1987. So boy, that really put him on the map. But as a subscriber, you had to be paying attention. You had to make the call knowing that this trade was going to happen, number one, and then you had to execute. Not everybody did that.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“And my job there, in addition to the money management, was to communicate with the fund companies when there would be a general buy and sell. You can imagine having that many self-directed investors buying and selling at the same time, the phones would be pretty hot. And this was pre-platform, prefidelities and the Schwabs where you would go to one place to make all your trades. You'd actually have to make them with the fund companies themselves. So they would have tons of people on the phone, the CEOs of these companies would get on the phone to help. with the trading, and there would be a couple billion dollars that would be on a buy in a sell, which was revolutionary at the time”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“Couple years. Okay. So again, I'm still really green, learned a lot about the fund industry quick. It was actually right around the time 401ks were starting. So there was a lot going on. You know, the fund industry was in its heyday, kind of the way the ETF industry is right now. But it was fun. There was a heck of a lot going on.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“A to fund B. So that was a big revelation in the late 70s and the early 80s. And as you probably remember, newsletters were just through the roof, the magalogs in your mailbox and that type of thing. So heck of a lot of fun. But a bunch of people said I'm not going to do this myself. I need somebody to do it for me. So hence they started a management company. And I went out to talk to him about it and they said, geez, would you think about coming out and working with us? So it was one of those nasty Boston winners and I could go and live in Honey to Beach.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I grew up in the Boston area, went to Babson College and not a school. I started Fidelity on the institutional side. I was lucky because my dad had been a broker in the 60s. So I knew what a mutual fund was. So rather than being in the bullpen with most of the guys and girls, I got to be in sales support for the institutional side. I supported the West Coast vice president. And back then, the institutional side basically meant five regional managers. One of the benefits is we could actually take smaller accounts and there was an investment newsletter company in Huntington Beach, California that had 45,000 subscribers paying $275 a year to tell them when to buy and sell equity mutual funds based on basically a 200-day average. So this newsletter evolved out of moving your funds from a write in a note to the fund company to actually being able to call them on the phone and move from funds.”
2018-06-11 · Capital Allocators · Tom Lydon – ETF Trends (Capital Allocators, EP.56) · IDENTIFIED FROM THE TRANSCRIPT · source