Private Briefing with Charlie Morris from ByteTree.com

Bitcoin is for the Internet and gold is for the real world. Charlie Morries talks about why you should own both and how to rebalance regularly to reduce risk and harvest volatility.

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(Click on the image above to watch the video)

Sunday, April 28th, 2024

Lafayette, Colorado

Dear Reader,

Please enjoy our latest Private Briefing, transcribed below. I first met Charlie Morris in London in 2015. He and I collaborated on a Bill Bonner project: re-vitalizing The Fleet Street Letter. FSL, as we call it, has been around since 1938. To my knowledge, it was the first instance of what you might today call private investment intelligence.

Charlie brought an experienced and sensible approach to the Letter. He’s practical but also, as you’ll see below, extremely creative and insightful. You can find his work on gold in his Atlas Pulse newsletter. For more on alternative assets and exchange traded funds, check out his Multi Asset research.

And if the concept of ‘harvesting volatility’ interests you, be sure to read up on the construction of the BOLD index and why rebalancing between gold and Bitcoin could work over time. By the way, there is no financial relationship between Charlie and BPR. I’m just a big fan of his work and his thinking and thought you would enjoy our conversation.

Until next week,

Dan

PS Tom was busy last week talking to other colleagues. Look for his conversation with EB Tucker later this week. And for the down-low on the London gold market, Tom spoke with our old friend Adrian Ash from Bullion Vault. Stay tuned!

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TRANSCRIPT BEGINS

Dan Denning: All right everybody, welcome back to Bonner Private Research. This is our latest private briefing. I'm Dan Denning, in the high plains of Laramie, Wyoming, and today I'm joined by one of the most enjoyable guests I've ever had a chance to talk to, one of the smartest people I've ever worked with, Charlie Morris, in London. Charlie, how are you?

Charlie Morris: Dan, that's a really complimentary introduction. I thank you very much. I might owe you some money.

Dan Denning: Well, I'll tell people a little bit why I say that. For 17 years, from 1998 to 2015, Charlie was the head of multi-asset at HSBC Global Asset Management. Like us, he focuses on the big picture, trying to put together currencies, interest rates, macroeconomic cycles. Charlie also focuses on a multi-asset solution to these investment questions. 

His depth of knowledge about cryptocurrencies, and gold, and equities and bonds is extraordinary. We're going to try and talk about a lot of those things today. Before we do, I wanted to let you know that Charlie also publishes several research services, some of which are free and some of which you can subscribe to, all of them you can find out more about at ByteTree.com, that's B-Y-T-E-T-R-E-E.com. 

As I said, we'll go into some of those publications today because there's a lot to talk about. But I wanted to start with you just getting back from Uzbekistan. We were talking about recording, and you were on the road. Can you tell our readers what you were doing there? Did you find anything interesting they should know about Uzbekistan?

Charlie Morris: Uzbekistan, it's a fascinating place, and I went out for personal reasons. My sister lives there. She recently moved there with her husband, and that's for a job. It so happens there's another person from my village in England who's recently moved there for business reasons. It's a country that's on the up. 

In 2016 there's a new president, and he's opening up the economy big time, and it's one of these young, dynamic, fast-growing countries. But it's not the first time, because in the 14th century, Uzbekistan was at the heart of the Silk Road. And of course, the Silk Road, or the Silk Routes, as we should call them, linked up this side of the planet. Dan, you're on the other side, we hadn't discovered you at that time. There were two big oceans keeping the Americas at bay.

That's not to say the Americas weren't uncivilized in any way, but they weren't at the heart of the world economy. They were populated and so forth, as indeed my country, UK. We were wearing rabbit fur, charging around spearing people and that sort of thing. There was no sophisticated economy in UK or most of Northern Europe in the 14th century. 

But over there in Central Asia, it was thriving. Linking up the trade between the Eastern Mediterranean, India, China and these places. It was a pretty dynamic time, and it was a much more advanced society than we give it credit for. That's where Elon Musk should be thanking them for what he learned about space. I went to see the planetarium that they built back at that time, in 1420.

Quite extraordinary, they got all the tables right of where the planets were, and the stars, and that information went on to Gdansk in Poland, and also to Oxford University, and other places back in the 17th century. We've got to give this area much more credit and it's coming back, and I think it's really interesting to be aware of that. A, to be worldly, and B, to be a good investor, you need to know what's going on in the world.

Dan Denning: Well, I think that was a good place to start, because here at Bonner Private Research, we tend to be somewhat gloomy. And one thing I liked about working with you over in London from 2015 to 2017 on The Fleet Street Letter was that despite whatever was going on in the world, you're always able to sift out the emotional content and focus on what investors ought to do with their money and where there are exciting opportunities. 

So I wanted to start with that question and I hope it's not a sore spot for you. But I thought everyone should know that I think one of the first times you and I spoke back in 2015 on a podcast we were doing, we were talking about Bitcoin and you were an early adopter of both Bitcoin and digital assets in general. And you told a story of buying a glass of red wine, I believe it was while you were on a ski trip to the Alps in Chamonix.

So my question is, given that Bitcoin was at a much lower price back then, do you regret that purchase now and more importantly today, do you see Bitcoin as a digital asset or as money? And if it's a digital asset or there are digital assets that are now an asset class, how are you recommending investors participate in them?

Charlie Morris: Do I regret buying a glass of wine? I've never regretted buying a glass of wine, Dan. So I think what you're meaning is, I think what you were trying to say is, "Do you regret paying for the glass of wine in Bitcoin?" And I suppose I probably ought to say, "Yes, I do regret it," because I think that it's 100x now. 

That trip I think was in 2014 in the winter. So I think that the bear market had begun, let's call it $600, something like that. So it's 100X, so I could have bought a hundred glasses of wine today, is the implication. I was very bullish on digital assets in 2014 having come across them a year earlier. I was very bullish on the idea of where it was going to take us, but I didn't necessarily believe that Mark-I Bitcoin was going to be the winner.

Being brutally honest, Dan, I didn't know that Bitcoin was going to... I thought surely the tech guys will come along and do the next one bigger and better. But they didn't. And here we are all these years later and still the first one's the best one and completely the opposite to the internet last time round. 

And I think it's because they just kept the design simple and robust and it's basically a network effect. The code's got no value. But the network has huge value. And this is the point about Bitcoin, the physical Bitcoin is worth zero. The piece of the network is hugely valuable. Buffett, do you remember Warren Buffett, our favorite person once said that he wouldn't buy all the Bitcoins for 20 bucks and if he did he'd lose 20 bucks. Because if you owned every single Bitcoin, you'd have no value.

My joke has always been, it's a bit like owning all the telephones. If you owned all the telephones, you'd have no one to speak to. And so you've killed the network in a heartbeat. So don't buy all the Bitcoins for $20, but buy a little bit of a Bitcoin for $20 and that might one day be worth $40.

Dan Denning: All right, we'll come back to that because I think I've tended to come at it from the gold point of view. But you do as well and we want to talk about gold. Because I think you've shown that it's not an either or scenario in terms of what both gold and Bitcoin can do for you in a portfolio. But let's start with equities because I saw yesterday...

Charlie Morris: Can we go back? I didn't answer the second part of your question about is Bitcoin money? Can I take that?

Dan Denning: Yeah, go for it.

Charlie Morris: I think that money is normally officially sanctioned to some degree. There are lots and lots of things which are assets, and I think to be money or quasi money, you've got to be a very liquid asset. So gold had different stages through history and sometimes it wasn't liquid because there was a gold price on a screen. 

It was liquid with the central bank because they would buy and sell it for a fixed amount in infinite quantity, right? Unlimited quantity rather. And then it became liquid as a freely traded asset, which is where we are today and Bitcoin has kind of done the same thing. So gold was officially money, now it's not officially money. But it could easily be again one day if the system wanted to bring it back in.

I don't think many people would want that.  But I kind of like the fact that it's not official. I think that makes it more useful for investors as an uncorrelated off grid asset. I'm talking about gold, but let's go back to Bitcoin. 

Bitcoin is an internet investment. It is the goal of the internet. It rules the internet as the Internet's attempt to have its own monetary store. And it's never going to take on the real world in the same way that gold's never going to take on the internet. They're two different investments and I think too many people think they're in competition. And it's my strong view that Bitcoin and gold are not in competition.

Dan Denning: I think that's a really important point too because Bitcoin is often referred to disparagingly by gold bugs as magic internet money and gold is often referred to disparagingly by Bitcoin maximalists as an analog shitcoin. So there's probably some distinguishing where they're useful and why they're useful is helpful. Gold has recently been making news with higher highs in almost every currency. When you took over to edit The Fleet Street Letter, you had already been writing your own gold newsletter, Atlas Pulse in 2012.

So you had put a lot of thought into what was happening with gold, what was driving the price and where it might end up by 2030. And in fact, you published an article a few years ago for the London Bull Market Association where you said you thought there was a case to be made for gold to reach $7,000 per ounce in the US by 2030. 

And at that time the factors that were driving it were the inverse correlation between real interest rates and gold, ETF demand,  and then generally demand from China. Has that argument changed? Because right now the one thing that I think has changed is the relationship between real interest rates and gold isn't the same as it was, it seems to have broken down a bit, but the gold price is still going high. So what do you think is driving it and do you think your forecast from a few years ago is still on track?

Charlie Morris: I think it's still on track, Dan. And it might need a bit more time, but not a lot more time to get to that $7,000 level. But we certainly made good progress since the article was written. And the basis is that I modeled gold as a bond and I asked that question about, "If gold's a bond, what kind of bond would it be?" And the characteristics, it's got zero coupon, gold doesn't pay interest. It's inflation linked, it's got long duration, it lasts forever and it tends to behave a bit like a 20-year bond. It's credit risk-free. And the little joke at the end, "It was issued by God." And that is basically like a 20-year US TIPS with no coupon and with the president being gold in this case. And so you've got this bond and the correlation and the fit of the gold price with that model was exemplary for 15 years and it's broken down since the beginning of 2022.

What happened? Well, we had a war in Ukraine. But I think it wasn't the war that gold worried about so much because mankind does that sort of thing. It was the confiscation of assets. And so I think that was much more important. At the same time we had a transitory inflation issue. So there are two things I want to address and I'll do the war first. 

And I think that if you are a central bank in the east, could be Uzbekistan, by the way they're a gold producer, they're more of an exporter than a buyer. But it could be China, one of these other counties. They're more likely to be having a higher weighting in gold in their reserves than they did in the past at a much lower or potentially zero weighting in US treasuries as a result of the threat of confiscation. And that's a pretty sound vibe. You wouldn't do that lightly, but it makes sense if you think that you are in the firing line.

So countries that would once might've been enemies with the United States in public, in private they might've owned their Treasury bonds, no longer. They are no longer going to take that risk. And the second point would be the mispricing of TIPS. US Treasury Inflation Protected Securities, the difference between the price of a TIPS and a normal Treasury bond gives you an implied rate of inflation. It tells you what the bond market thinks inflation is going to be in the future. And currently that's about 2.4% over the next 20 years. The Fed would cry victory if that break even rate implied inflation rate was two, it's not two, it's 2.4%

I just told you a moment ago that gold and the TIPS model worked hand in hand for a long time. Now maybe the TIPS model's not broken, maybe it's working. And if it's working, it's just telling you that inflation is 4%, not 2%. It could be the gold at $2,300 is implying a 20-year average rate of inflation of 4%.

That's the second explanation. I think it's probably a bit of both. I think it's a little bit of the rebalancing by central banks and reserves and little bit of the mispricing in TIPS. And why would we have a mispricing in TIPS? 

Well, because people believe in transitory. So what you see on the ETF flows is that over the last two years, huge amounts of money out of TIPS on the ETF and big, big money into the long bond. So the average wealth advisor in America and elsewhere believes the Fed. They think inflation is coming down so they buy the long bond, they sell the TIPS, mispricing.

Dan Denning:  I think you're right about both and I agree 100% that the transitory theme, seems in our circles completely discredited a little bit like the modern monetary theory that wasn't going to lead to inflation. So that actual inflation, if you discount heavily the reported statistics from the Bureau of Labor Statistics and the official CPI, which is x food and x energy and x rent and x services, that inflation is actually much higher and that's what the gold price is telling you right now. 

We're going to be writing about that more this year and I think for the coming years. We published one of your essays in February and it was well received by our readers. But for the new readers that may have missed your sort of merging of how to buy both Bitcoin and gold and find them when they're not expensive. Can you just give a short overview of the bold index and what it's telling you right now?

Charlie Morris:

Okay, so the background to it is that eventually it was obvious that Bitcoin was going to become the leading crypto and stay that way for a long period of time and that the crypto space had morphed between Bitcoin and then the rest of the universe. And basically Bitcoin was going to remain proof of work, meaning it's an alternative asset, it's out of the control of the authorities, a bit like gold, and the rest of crypto was going to be proof of stake, a bit more like tech stocks. 

It became obvious to me that the moneyness in crypto was Bitcoin and only Bitcoin. And then when you go on the other side, gold doesn't have any friends. What it has, it's got miners and silver and platinum. But actually the job of being money is just gold. And so I kept this idea very simple, the instinct is to diversify and have 30 assets.

So I said, "We actually only need two here. You need Bitcoin and you need gold." And I put them together because it was obvious to me that Bitcoin is routinely ‘risk on’. So the stock market's going up, Bitcoin's probably going up faster, and when the stock market's in trouble or bond market's in trouble or someone's in trouble, gold's probably going up. 

An observation is that there's a counterbalance between the two. You just see it time and again, 2013 for example, gold collapses. The worst year for gold in this century and Bitcoin surges. And then the following year, gold is stable and Bitcoin collapses and it just keeps on happening. One's good, one's bad year after year. And obviously Bitcoin wins spectacularly over this timeframe. But as it's maturing, we're still seeing this negative correlation. Even the last two weeks, we had a Bitcoin drop before halving and we saw a gold all-time high.

So it is very obvious to me that if you balance these two assets on a regular basis, you can do something called harvesting the volatility. Where you buy low, you sell high, you're always buying the cheap one, selling the deer one and rebalancing, bringing it back to your target weight. And what is your target weight? 

Well, it could be 50/50 and that would be the obvious thing to do in most cases. But the reason you don't do it in Bitcoin and gold is because actually $50 in Bitcoin is a lot riskier than $50 in gold. And so if you do some very simple maths, which could be solved by a child, you have a thing that we publish in our BOLD report each month and basically it's called inverse volatility. It sounds cleverer than it actually is, but it basically puts the same amount of risk in each asset and you end up with something like $25 in Bitcoin and $75 in gold.

Now that moves over time. It was as low as 10% Bitcoin in 2018. But 25% is as high as it's ever been and it's driven by the volatility. So if the long-term volatility of Bitcoin is coming down, which it is, that it's showing that it's becoming a more grown-up asset, a more serious credible asset. And if that's true, then one day the target volatility of Bitcoin in the bull mix will be more than 25%, it could be 30% or 35%. 

It’s very hard to see it at 50% because gold is really, really low vol, so quite hard to imagine you getting there. But every time you have a big move in Bitcoin, up or down, you're buying the one that did worse, adding to it. And if you think about it, in 2022 Bitcoin collapsed as it's done several times before. But because we kept rebalancing into the weakness, when the bull market started at the beginning of 2023, we had loads of Bitcoin in bull. Had we not rebalanced, we wouldn't have had very much.

So as a result, the BOLD index could do very well because it was loaded with Bitcoin. Then Bitcoin does very well last year, gold not so much. We had loads of gold because we kept buying gold all the way through, then gold starts to go nuts this year and we've got loads of gold. So the BOLD index, provided there's a normal relationship between Bitcoin and gold and they're not in competition and they remain uncorrelated.

There's a significant excess return, 5% to 7% per year we estimate by counterbalancing these assets on a regular basis. And we publish the weights on the website, follow us for free and that's our public service. But it's good for Bitcoin and gold because you've got countercyclical investment cycles. So people are selling the hot one, buying the cold one. That's good for markets. So the more people that do this, the better for asset class behavior.

And by the way, if you took gold and silver and tried to rebalance or you took French and German equities, you would create no value because they're correlated. And so rebalancing two things that behave similarly, you don't do anything, you don't add anything. And rebalancing really comes from the big US pension schemes and superannuation schemes who've been doing it for years in bonds and equities. 

David Swensen used to write about it. It's tried and tested, this strategy. You do it in uncorrelated assets and it makes sense. The reason why BOLD would fail is because there's a winner. Gold either goes up 10 times and Bitcoin goes to zero or Bitcoin goes up 10 times and gold goes to zero, in which case, duh, you should have chosen the winner. But if you don't believe that, if you believe they're not in competition and they're both having a fair fight, then bull is a very sensible way of approaching this problem.

Dan Denning: Let me ask you one more question about that without going too deep a dive into it. Because I think it's important for investors who are listening or watching to figure out what kind of investor they are too. Because part of our approach to gold, I guess you would describe us as sort of absolutist or Old Testament view, where we're not interested in regularly rebalancing or figuring out what it's cheaper. We use Dow gold with respect to gold and equities. 

When you were describing Bitcoin and the rebalancing, it reminded me of Bridgewater's All Weather Portfolio. Where they had a very high allocation to bonds for many years on a risk adjusted basis. So the idea was that because, and correct me if I'm wrong, but that because bonds were less volatile, they could own more of them without taking on more risk.

Is the risk with Bitcoin that the volatility is much greater than you expect or model so that you get these drawdowns of 60% or 80% and you don't have time to react? Do you think that you've set it up now that there's sufficient time for people to not get caught on the wrong side of a really big down move?

Charlie Morris: You wouldn't get caught because let's say you go into a BOLD strategy with your 25% Bitcoin. Now Bitcoin halves, your drawdown is 12.5%. That is not the end of the world. In the old days that happened to the stock market on a regular basis. It doesn't happen anymore, but it's a normal size drawdown for a 50% fall there. Would a 60% fall happen in Bitcoin? I'd be surprised if it didn't happen again at some point. And for that matter, gold had a 50% fall between 2011 and 2015 or just now.

Absolutely these things can happen. But if you get the counter cyclicality, and actually gold went up a little bit during your 50% fall in Bitcoin. You're now making 12.5% look more like 8% or 7% or 6%.

 That's very powerful. So if  that dynamic broke and you had both assets fall, then I guess you're going to lose proper money. Then the next phase of the conversation is, "Well, how much did you have in BOLD?" And the answer is not everything, you'd also have some other assets. But I'm just making the argument that as you enhance gold by putting it together, a little Bitcoin and you calm down Bitcoin by putting it together next to a little gold.

Dan Denning: Yeah. Well, I have to say I find this conversation much more interesting than the next question. But I'm going to ask it anyway because the truth is most of our readers and most investors still have within their portfolios a significant allocation to equities. And from that regard, at least over in the UK, that was good news overnight that for the first time in a long time the FTSE 100 made a new high. 

But you pointed out this morning in your multi-asset investor newsletter, which is also available at your website, that in dollar terms, the FTSE 100 hasn't made a new high since 2007. And in fact, this is a point I discussed recently with Dr. Mark Faber from Thailand, that really before 2020, but especially since 2020, there hasn't been any global equity markets that could hold a candle to the US.

So you have this decade of out performance by US assets driven mostly by tech, US equities anyway. Is that something you see changing? Do you see compelling value in emerging market equities, European equities, particular sectors in Europe? Is that something US investors ought to be looking at as American markets remain extremely pricey on historic multiples?

Charlie Morris: Let me break that down. I think that October 2007 is a well-chosen date. Yes, I don't want to be accused of chart crime. I'll come straight out with it, 2007 was the pre-crisis peak. So we're going back to the old highest price for most markets, particularly Asia. Asia was like Bitcoin before 2008, it was going straight up with China and everything else.

It was a very exciting time to invest in it out there. And they all peaked at that time, the FTSE and dollars also peaked at that time. So did Europe and in fact, most places. Even the S&P did. So if you start there at the old major global high, what happened since? Well, the answer is that the S&P 500 went up 3.5 times and everything else is basically at the same level or slightly lower when mentioning dollars.

Now there are a couple of exceptions. Canada managed to make a tiny bit of money. Mexico, your other neighbor managed to make a tiny bit of money. Japan made a little bit of money. Switzerland did quite well. But there really weren't many others. Indonesia and India as well, but nothing else really made it. Brazil's half price from then in dollar terms. 

And it goes on, the FTSE is 25% down, Europe's 18% down or something. Why? And I think it's because the competition of the industries around the world are old school and all the tech gravitated to the United States. And partly that's good policy. Partly that was Silicon Valley's just been the most extraordinary success story that's stuck. And whenever something has been interesting around the world, the US buys it and brings it in. They've done so well in monopolizing the whole global electronics industry, moving to software then to the internet, that whole trade. And our index, the FTSE's barely got a tech stock in it. The European indices, there's very little to speak of.

People sort of look something like SAP, an old school accounting firm or Spotify, not nearly big enough to contend with to do these things. China has got a big tech index, but then along comes President Xi and basically slams it for abusing its privileged position. Something that probably ought to happen to many of the big US tech firms, you might say, giving what it's doing to children's health and so forth. 

But going back to the stock market, you've had this extraordinary outperformance and these great things always come to an end. I always thought that 2021 was the end.  But some of these stocks have made new highs like Nvidia. But some of them haven't. Tesla didn't and Apple, if it did, it wasn't by much. But just as we saw in 1999, just as we saw in '72 just as we saw in '29, when these big stocks become overly dominant, it's a sign of a bubble. It's got to burst and the rest of the world will be a better place to be.

Now that doesn't mean to say the rest of the world's going to be great, it just means it's going to be a better place to be. If we go back to 2000 when the last time .com popped, Europe and Asia, they were great places to be. Because they were full of old economy, they were undervalued stocks.

Every stock is potentially dangerous if it's overvalued. Even if something that bakes bread, something simple, if it's the wrong price, it can fall by 50% or 80%. Or if it's over leveraged, it can fall by 100%. But if it's just a simple robust company that's trading cheap, which are plentiful in Europe and Asia and the emerging markets, they're not risky. And there's just so much of it around the world that's just been overlooked.

And I think the biggest culprit is regulatory trends towards passive investing because the focus on low cost and that just takes you to the biggest market. It makes you overweigh the biggest market and the biggest stocks within that market. And it just breaks the whole foundation of how the stock market should be, which is lots and lots of people making lots and lots of decisions. And if that's happening, then most things will be the right price in the end. 

But I think that that has taken the backseat, whether it's from professionals and hedge funds who... I don't think there are as many hedge funds as they once were. They're certainly not playing in the small caps and there certainly aren't as many active private investors doing decent, fundamental, good long-term stock picking. And in the sort of institutional crowd, in pensions and so forth, they sort of give it up on cheap dividends. No one really cares anymore, it's just the index. So I think there are structural reasons. 

Dan Denning: Yeah, I was going to follow up on that. I have two more questions for you and then I'll let you go. But the first was related to what you just talked about. When I spoke to Dr. Faber a couple of weeks ago, he recommended that US investors hold 50% of their assets offshore with a different custodian. And that was related partly to concerns that performance, one, and two, I guess regulatory safety. That for high net worth individuals, there was a real risk in the coming years that assets could be confiscated or that you just have capital controls of some sort that would impair your ability to move your money and get exposure to places where the returns might be higher.

In your multi-asset report, two things that jumped out were, one, that HSBC was closing some of its exchange traded funds that allowed investors exposure to some of those emerging markets or developing markets. But you still thought ETFs in other areas were the simplest way for an investor to make this decision to try and get some exposure to higher non-US returns. 

Is that what you are recommending to people if they're excited about Indonesia, Brazil or somewhere else? Don't make it too complicated, just buy the ETF.

Charlie Morris: I think in most cases, yeah. You've always got to look at what's inside it. So for example, if you are looking at Korea or Taiwan, guess what, you end up with a huge holding in a couple of tech stocks in both cases. And if you're an Indonesian, you end up with a huge holding in a couple of banks, dominant. So it's worth having a look under the lid and seeing what you're getting. In a country like Brazil, you end up with a very much a commodities type portfolio. 

So the macro, the country and the dynamic of the stock market could change, could be different. A bit like the British stock market. We're hardly Saudi Arabia, but our index is full of oil. So there are sort of anomalies I think you ought to be wary of as an equity investor. Having some understanding of not necessarily just what the country does, but what its stock market reflects and that's not always the same thing.

But yes, I think generally speaking for EM, it makes sense. It's quite hard to buy many emerging market stocks directly. I know the US has got quite a lot of ADRs in big stocks like Petrobras and so forth, but certainly going down to mid-cap, that wouldn't be possible. But I think yes, ETFs, I think they're a brilliant solution. They're a brilliant idea provided the underlying assets are liquid, it all goes wrong if the underlying assets that you are buying are not liquid. So better in large cap than small cap.

Dan Denning: Yeah, that's a great point. It’s very important for people to have a look, one, to make sure that the index actually correlates to the asset that it's trying to imitate and that you don't end up getting exposure to just one or two huge names and of course, liquidity. 

One last question for you. I thought about this yesterday because I thought it would give some insight into how you think and I wanted to know the answer, so I thought I'd ask. Right before you started working for The Fleet Street Letter and after you left HSBC, we were talking, but you were kind of out of contact because you were hiking the Pilgrim Trail in Spain, Santiago de Compostela. 

And as you may know, my colleague Tom Dyson did part of that trail recently with his family.  What drew you to that, and what was the experience like? Did you take away anything from it that our readers should know about?

Charlie Morris: Well, I've been in banking for 17 years. The movie with Martin Sheen and Emilio Estevez, The Way, came out the way in 2011.  I’d seen that and I'd heard about it from a couple of friends. I had one very close friend who had done it in stages, and he was one of the many people that sort of do a week at a time because it's quite hard to take a month off. 

I put it all together and just went and did it. And after 17 years in banking, it was a really nice break. It was a really nice way to fitten up because I spent too much time sitting down in front of a computer screen for 17 years. And being ex-military, I wanted to get back into shape. By the way, I need to go and do it again because I'm in terrible shape at the moment.

But it also cleared the mind. It was just a very, very nice way to go for a walk…a long walk, because you don't have to navigate, you don't need to carry a map or a compass because there's only one way to go and there are big arrows everywhere. You meet people along the way and there's lots of places to sleep and eat. So it's really simple in those terms. Y

ou don't have to do any logistical planning at all. And if everything was terrible, you'd just call a taxi. You know what I mean? It's really risk-free. This is not like going up Mount Everest or something. You just take another step until you've done a million Steps. When you've done a million steps, you should be in Santiago de Compostela.

Dan Denning: Well, that's great. By the way, don't feel too bad. I've been sitting behind screens for the last couple of years and I'm eager to get out on my bike. But I wanted to thank you for taking the time to show our readers the way a little bit today with your expertise on lots of important topics to them. And again, they can look right behind you and see if they want to learn more about Atlas Pulse or Multi-Asset or Bold, go to Bytetree.com and Charlie won't steer you wrong. But for now, Charlie, I will let you go. Thanks again for joining us. It's always a pleasure to talk to you, and I hope to see you soon.

Charlie Morris: Thank you, Dan. Always a pleasure.

Dan Denning: All right, take care.