 Okay, a number of years ago, Jack Askew, he and Bill Bernstein could have an informal chat as part of the agenda. We all know what Jack wants Jack gets. So it's become a regular part of our conference agenda every sense, and it's now affectionately known as the Varsad Channel. So without further ado, I'd like to briefly introduce the two participants of this non-political discussion. I have to say that every year. Okay, our distinguished guest of honor is the founder of the Vanguard Group and president of Vanguard's Vodal Financial Markets Research Center. He created Vanguard in 1974 and served as chairman and chief executive officer until 1996 and as senior chairman until 2000. He entered the investment field immediately following his graduation from Princeton University in Magna Cum Laude with a degree in economics in 1951. If I listed all of his honors and achievements, which mostly you already know, we wouldn't have any time left for the Varsad Chat. So I'll dispense with that and ask you to please welcome our special guest of honor, Mr. Jack Bogel. The next companion for this Varsad Chat is a retired neurologist who helped co-found a vision frontier advisor. He's written a number of best-selling titles on both finance and economic history. He holds both PhD in chemistry and an MD. Please welcome one of the smartest guys I know, Dr. Bill Bernstein. It's all yours. Okay, well, I have been sternly warned that any speakers who mumble will be promptly cut off. So please, before that happens, you know, start shouting, stop mumbling. I'm going to lead off, Jack, with a question that is kind of a counterfactual. Let's assume that it's 20 or so years ago, and the success of your concept of a popularly available retail fund has succeeded. You know, you've got the index trust 500 funds in the total stock market and starting to dabble in international markets and maybe even some slicing dice in the U.S. market, and that's working out pretty well. And let's start from that point forward. What would you have done differently from that point forward? I'll have to think before you answer a question, is they American or not? You have as long as you need. Okay, but I guess if I had to do over again, what would I do differently? Well, you only went back 20 years, and Vanguard was pretty much formulated almost immediately 40 years ago, as it happens. And then, so 20 years ago, I guess if I had done, would do anything differently, I would probably have a little less impact on marketing, be less of a marketing person. Some of the plums I started, Vanguard quantitative portfolios, what's called, later named, Vanguard growth and income, Vanguard asset allocation, which worked for it now field, used to say it'll never work, and it worked for 20 years, and then it stopped working. And I should have known that, I should have had a 25 year time horizon. And so starting some funds that really, probably I shouldn't have started, at least we continue to do a little bit of that, I'm not too, these are my problems, because I couldn't do it any differently if I wanted to. Things like the managed, what do you call it, managed, rich area, managed payout, portfolio. I just, I think anything that thinks it can improve much on indexing is fundamentally, that's the burden that every fund has to have, really do better than the marketing index. And I just don't see how you can say that. On the other hand, we all have, even bogey, for all these years of learning better, knowing better, still has too much for marketing to have on. It's not that we need the money, my God, $3 trillion. What does that mean to somebody who's written a book called enough? So I'm more worried about that, but you end up kind of thinking, or I did, there was a good idea to kind of pre-empt other people from coming into the field. So we didn't want to allow people to have something that would properly be a Vanguard show, at higher prices, so we basically said we're going to start this fund, start that fund, index funds, various types, and basically say, you know, stay out of here if you're not going to be able to compete with us. I think we maybe could push that too far, and in fact maybe I'd push it a little too far. But in terms of deep regrets, in terms of policies, strategies, structures, which I'll talk a little bit about later, I just, I just plain don't have any deeper regrets. Little regrets or something else again. I mean, you know, I've made so many mistakes that in my life, when I tell people, my wife has forbidden me to write any more books, and I said if I were to write another book, it would be the longest book I've ever written, and it would be four mistakes I have made, but that would go way back into my early career when I was just so stupid with the five descriptions. But the big advantage I have, I think, is I was going to learn from my stupidity, and we all should be able to do that. Learning from your own mistakes is much deeper and more profound. We're learning from other people's mistakes, because somehow the lesson isn't quite as sharply drawn as to when you just kind of shoot yourself in the foot or in the brain or some other place. It might be equally painful. So hopefully, no deeper regrets. Well, that set ways into another question, which is, should the end guard be advertising? Well, that was my marketing hack, and I didn't know how else, because we had no sales tours. How else did it get the information out that we had new fund? So we had kind of an introductory fund that we'd like to be at the hand of the page in the world. It's Returnal, and we had new fund. We kind of told the world that we would want to do it. We absolutely laid down the rule, which we have continued to assert. No performance advertising. No yield advertising. Got it? I'm a little too far back. I didn't convey that warning. Now I can hear the echo. That's good. So sorry about that. You missed nothing. It was supposed to be very modest, it was. And I have to concede that I wasn't too spent and was spending $50 million dollars per shareholder's money on end guarding our sort of campaign slogan. I don't think we need that. I have conceded that we have to have a name like that in the end. It's a good thing we weren't narrow leech. And I wish I had elevated advertising. Because then we'd start advertising. It would be like very absurdable. But I did a little. And I don't think we really do a lot. Now I don't know what the cost of the internet is. I'm just not familiar with that. But we do quite a bit along those lines. And it's okay. It's not going to, the cost involved in terms of unit costs are really quite trivial. They don't change our expense ratio. And I owe it. But I'm going to the principle of saying, as I did at the very beginning, Ralph Waldo Emerson, build a better mouse track and let the world beat the path. Let the world beat the path to your door. And that was how we began a long time. We'll talk about later. And so I think advertising is not a good thing. But the limit, very limited the way we do it, it's okay. A lot of people are out there, particularly in the go-go years, not the go-go years. In the late 90s, there was a whole tech fund and so on. And they were advertising their returns. How would you like 40% a year? I, for one, would like 40% a year. I just don't know how to get it. And so it's not as bad as marketing. Advertising is not as bad as marketing, but there's marketing when you think about it. What is marketing? Marketing is finding out what the clients want and giving it to them. And that's the way beer works. That's why we have light beer, I guess, through light or new kale. Just for the record. And rarely, sometimes in the summer, but you're always trying to find out when these big consumer products companies do this or are doing this all the time and trying to add a little bit of something to something else and sell a little bit more, because that's what they think the public wants. And it's a good idea for cereal, probably a good idea for lawnmower meals and beer, and God knows what else, but I think it's a terrible idea for investing. The public out there usually wants the wrong thing, but they've read in the paper in the last two or three weeks. Imagine how many Gold funds there would be around. After Gold had that huge run, I guess about two and a half years ago, three years ago, two years ago. So, I know it sounds old fashioned, but I'd let your firm speak for itself. Your record speaks for itself. When people start to trust you, many people trust Vanguard and have that the way you basically do a business. I don't think we need to worry about that again for a long time. We have happily a formula that really, you know, always can't go wrong. And I tell people, we haven't promised you a fund that beat the market 15 years in a row. We haven't promised you a Magellan fund that gets to a hundred, gets to a billion dollars and has now had 20 million. It had a good performance in the band. Money flows in and out. We're right down the middle. And as I constantly advise people, and I advise all of you, we make no guarantee except we will give you your fair share of the return of any portion of the market, if we stock in the bottom market, which you would like to invest your money in. And that fair share of millions of the market goes to hell in a handbasket. Your investments will go to hell in a handbasket. And we should say that. Maybe you shouldn't use a word like hell. Maybe you should, too. I don't know. Going to heck in a handbasket doesn't cut it. So, um... Thank you all. I mean, it's sort of reminds me of the famous Henry Ford aphorism that he asked the public once. It will tell you it wants a faster course. The, uh, the Schiller, the Schiller PDA, the city-to-the-cape, the cyclically-adjusted PDA ratio has gotten a lot of attention that it has become a real topic of conversation, which is worrisome in itself. You know, it's still around, what, 25 or so? You know, what do you, what do you think of Schiller's measure that you think it can be improved or should we not be paying so much attention to it? Well, anyone that has a formula to say whether the market is high or low is kidding, either trying to kid you or has been kidding themselves. And nobody knows this and take the Schiller PDA less than 10 years ago. It was right where it is now. I think it's around 25 or 26 billion. And it hadn't changed. So, if it's giving a warning now that the market was too high, it was giving them a warning then that the market was too high. And since then, the market's going up 60%. Earnings and dividends have gone up. Well, earnings have gone up, I think 70%. Dividends have gone up 100%. So, it was a false signal 10 years ago. So, I'm going to look at it. Enjoy it. I do. I often use it when I go on CNBC. And it's trying to deflate everybody's expectations. But there is no answer. Schiller is fun to look at. It's intelligent. Next year's earnings will do over the history. But it doesn't tell you very much of anything. When you get right down to the right stats. Yeah. I would certainly agree with that. People are always fond of saying, well, gosh, the historical average is 16 and a half or whatever it is. But to get that number you've got to improve. David goes over that once to the Civil War, which was a big one. Parallel industrial stocks were selling four times. That's gone. And if you look at it over the past 50 years, you simply draw a regression slope where the one value of years would be close to 20. So, I think the value of 26 really doesn't disclose all that much. Well, let's ask the shift years a little bit and get into some personal analysis. Let's go to the sunglass question. Which is that, you know, there have been star managers for ever starting with Walter Krueger and then Jerry Sy and Peter Lynch and Bill Miller and another guy. I'm wondering, do you think the public has learned anything or do you think the birth rate is higher than the learning curve? Well, the problem with this business is it has a kind of distribution arm that has to sell something and if you want to talk about you've got to find out there and you want to sell on a certain thing, it has to have a good performance. There's nothing else really to show up, you know, let's say our expense ratio is only 10 basis points instead of 100. I think your client is thinking, oh, what does that matter? Particularly since the 100 doesn't even cover what the fund spends on the transaction cost, market cost and things of that nature. So it's an action business. Investment advisors basically feel a need to tell you to do something. Portfolio managers, and this is an interesting point. I keep thinking of Peter Lynch, manager of Magellan Fund, calling to see Ned Johnson on January 2nd of a given year and he says Ned or Mr. Johnson I looked at my portfolio and I think it's fine for the year and I'll see you a year from now. I'm not going to do any more here. But the odds are 51% that that will improve the fund's performance during the year. It will improve. And all that transaction will cost money and it doesn't sometimes age value but more often than not, so it's tax value. But the portfolio manager and people are saying, what are you doing? You've got to be doing something and you know, turn off all those I'll get into the scandal we have with our Pennsylvania judges and their pornographic emails. But that's another story. But you feel a need to do something. Trustees have an endowment to feel a need to do something. Investment advisors feel a need to do something. Financial advisors are. RIAs feel a need to do something. And I'll give you one little anecdote. I was speaking out in Milwaukee a few years ago and I went through my little patchwork on my bonds and stocks to keep the ratio, right? And don't do anything else. So one of the financial RIAs in the room come up to me and said, look, I know your advice is right but think of me a minute. Think of me. He said I've got a client and he comes in and set up his portfolio and he's 65% stocks, 35% bonds and he comes back a year later and he says, what am I doing now? Nothing, nothing. He said, I guess that's okay. They go a whole year without doing anything. Comes back a year later. He says, I must be doing something now and doing it last year. How about this year? Don't do anything. Comes back a year later. This is now the third year. I got through something now. This is just crazy. And the advisor says, no, stay the course, stay exactly where you are. And he said, the client then says to me, what do I need you for? I don't answer that question. And I said, the answer is easy. Just tell him you need me to keep you from doing anything. And there really is and we make fun of it. But there's a lot of truth in that. This is a business where activity is big, never been higher than it is today. I mentioned the spider thing turning over at that awful rate and it traded, I guess I mentioned this to Christine Benz earlier. The spider traded $160 billion in the last five days and the assets of the spider are 160 billion. It's a five-day turnover, 100%. An annual turnover of 5,000%. And I'm the kind of person that thinks 3% of the turnover is kind of pushing him on the high side. And there's a big difference between 3% and 5,000%. So the trading environment obviously reaches Wall Street and impoverishes there for the investor. So that's why state-of-the-art works. Wonderful frontline from about 50 years ago that featured tech funds, the hot tech funds of the late 90s. And there was about a 30-second clip of Garret Van Wagner who was a famous tech fund manager at the time with one phone each hand, shouting words to each phone and even then it just gave me a little bit of a second. There's something wrong here. All right, well, let's shift gears a little bit here and talk about some ladies. And the first lady I want to talk to you about is Mary Joan White. We talked about this last night. I have an odd sense of disquiet about who you pointed out that she is a prosecutor and you would hope that she would perhaps use those skills in her job. But I don't think that's necessarily a good fit for her skills. I think that the job of being the SEC commissioner as a chairman of the SEC is a more broad moral ambit if you will. I'm wondering if you have that same sense of disquiet about it. Well, I think she was clearly brought in with the idea at least a major part of the appointment leaving aside the fact that most administrations really want to have more women in them than most of them do these days is that she's a prosecutor, a tough prosecutor. A, and B, she knows Wall Street. She's been a lawyer in there for, I don't know, three, five years or something, 40 years. And so in that sense, if the mission is prosecute, get people in jail, get big penalties, she was a good choice. Unfortunately, that's a very narrow, as Bill says, a very narrow version of what the SEC does. They're there to protect the consumer, the investor. And it's gotten to be a big, complicated business. They are outgunned at every level by these quads, by the high-frequency traders. I don't know who at the SEC can out-talk the high-frequency traders about that complex business, which is probably not a bad business. It's got to be regulated more. But it's speed in the markets. And they had tremendous lead times. And then she's also affected. And people have done very little talk about this. I talked a little bit about it at the Senate Finance Committee when I testified there on September 16th as their lead witness. I was talking about regulation. And the Don Frank Law itself, as well as the Department of Labor Regulations, are allowed to impose standards of fiduciary duty on everybody involved in the system, except the people that manage money. How can that be? I mean, they're not allowed to impose the standard of fiduciary duty on money managers. In either case, that's ridiculous. That's the most important fiduciary, the most important toucher of other people's money around. But she can't go beyond what the Congress gave her. So I'm trying to make a little excuse for her. I think she's integrity-laden. I think she's maybe over her head as an administrator of this huge agency. And I think she must struggle each day with figuring out there's so many things going on in the system. She must be struggling, I don't know who she has. It's really good in terms of division heads. I'm not so good with that. I think the God is running the neutral thought division. I think she's okay, but not a hellraiser like the ones I used to work with. We used to go along famously. I don't even know this guy. But on the other hand, I'm not the preeminent figure anymore. Yeah, I mean, I guess I expect too much when I look out at the brokerage industry and the investment company industry. I see a moral swamp. And I keep waiting for the person who's the SEC chairperson to deal with that. It just never happens. Mary Jo White, I think, takes a very legalistic narrow view of things that says, is the law being broken? And the problem is the law itself. Unfortunately, the law itself doesn't make it illegal in those three activities that I think exercise. Jack, Jack and myself. Well, I'll put another idea, and this is so political, but I don't want to, I don't know, hit his ejection button. I don't know his name. But this woman, who's a very prominent woman, has said that the president of the United States cares more about Wall Street than about Main Street. And I'm wondering, you know, what you think about that. Do you think that's true? No, I don't think so. And we were wrapped up in that outrageous political system where there's so much money coming out of Wall Street and you even get somebody a Democrat like Chuck Schumer, who is, I think, one of which committees you head up down there with. He could do something about this outrageous, this is a really good example, of this outrageous tax treatment legislatively, in which hedge fund managers get their returns of capital gains rates and not ordinary income rates. If it's Democrat, he should be for that. Where does the senator Schumer get all his money from? Wall Street. So even the liberals in Congress don't dare to take on the hedge fund industry. And I think that's wrong. I think that's tragic. And I think Obama has talked a little bit about this, but he's limited by the university's regulations around them. And he too was supported, was supported by Wall Street. That seems to be fading quite a bit. I'm not sure anybody's supporting him now, which probably means he's doing a great job. Think about that for a minute. No, I don't think he's against the individual investor at all, or more favorable Wall Street for the individual. He's got the right values. He seems to maybe be a conventional wisdom teller these days. Maybe he had the politics here. Maybe too deep a thinker and not strong enough an actor. And you know what? Not a deep enough thinker and too strong an actor or somewhat contrasted there. Okay, well let's back up again a little bit this time, only six years. I mean if I could back up 30 years, I don't think everybody could back up 30 years. What we would have done is obvious, which is we would have purchased Microsoft of the IPO we wanted at the beach within the best of many Vanguard funds. So with that benefit of hindsight let's go back to September 15, 2008 and you know you have the two biggest financial corporations in the world that either are going to go to Bangkok or have to go to Bangkok. How have you handled it differently? Obviously it was handled tolerably well knowing what you know now what would you have done differently? Well, I mean I'm not an expert in why the Fed and New York Fed particularly the Secretary of the Treasury did what they did but I think they did what they could do and they're limited, I happen to believe, to stimulus factors in the larger there was no as emerging from the litigation between Anchorage and Bergen against AIG or against the government's treatment of AIG there's no question the government had to do some financial bankruptcy when they did it perfectly whether people like Goldman Sachs were protected from taking the haircuts on the paper they had with AIG I wondered about that then and I wonder about that now but I wasn't there, you had to take a look at a lot of things this financial system the lubricates basically everything we do in the US starts to fall apart so particularly under pressure they've done me back sure little things might have been done better but I had to let them even go there's arrogant guys up there pretty disgraceful the way they handled the finances of that firm and they were not the only ones and I also bought the money market people very very lightly taking their asset value what was it called institutional money market sum so there were other things that might have done better but that ended up in litigation and the government just didn't win the case and it's always hard to win when you're outdone with a lot of high priced lawyers so I think in the imperfect world that system financial crisis was handled that increasingly comes out of the reading of the testimony I guess it's now over on the AIG trial Gene Farmer you about a year ago Jeff Summer was in the New York Times and he said he would have just nationalized banks and Jeff Summer you'd almost see his job he said that's not exactly the answer I would expect from a Chicago libertarian and on hell's ground he said that's what I would have done and the interesting thing about that reply I think is that it would have avoided a lot of the political fallout people who were angry with the government bailed out Wall Street and not Main Street something else we chatted about briefly the last night Jack is you know obviously we live in a world now it's a DC world it's a defined contribution world the old traditional pensions are slowly going away was that a mistake was the shift from D.B. to D.C. defined that a bit traditional pension plans to defined contribution plans in the state well it's not a mistake conceptually that's the way the world is going corporations want that pressure off their P&L's but it's given as a system that is not working well at all to move the whole shift of risk from the corporation which can handle it presumably over the investor most of whom cannot handle the risk and we try to turn a the bank of a savings plan a thrift plan into a retirement plan and if you have a retirement plan I've written a lot about this talk to Dan at the Senate testimony you have to have whatever you want you can't borrow from it what would happen to Social Security if you could do all those things you wouldn't be working for anybody the wife needs a new rug there goes your retirement too bad so it's basically the defined contribution system is what we're faced with what's going to grow I could even see the state's municipalities going from state local governments by far the biggest defined benefit plans and they're going to eventually go to all the labor unions there so strong that's going to be a hard thing to do but the economics fit that we've got to make a much better defined contribution very difficult to withdraw only allow low cost funding to the system maybe even only index funds even for me to say it's always defined contribution beneficiaries together I think it's around $5 trillion worth own the stock market as a group but they're trading with each other back and forth buying this fund and that fund and selling others they're not going to do nearly as well at my cost so we have to have those kind of elements in the system and we have to have more mandatory contribution rate right now corporations can just buy that so I'm not going to pay you any this year by the way the values in the market are the best they're going to be in a long time if they do this from markets are low because that's business as well so it's a lot of fixing I will say this I'll tell you a little anecdote I was who knows a 60 year legacy party seminar for a day in the museum of financing New York about a year ago and a year and a half ago and I did an interview with Paul Boker at lunch and I told him who was and she asked me what I thought of it Social Security and I'd say the same thing about the fund benefit fund contribution plan I said look it's got to be fixed and the fixes are simple it would barely be noticed maybe not for a long time maybe not forever small changes the cost of living adjustments small change in retirement age a higher minimum production salary cap 115,000 maybe 135,000 which would get only very few people and I said if you would make Paul and me zars of Social Security plan I would say zars of the fund contribution plan too we'd fix it in an hour and Paul said couldn't we fix everything I think we probably could or at least they could I want to turn the tables on you a minute I've got a couple of questions for you I was hoping to avoid that I'm a blister go ahead and the line of my questioning comes it has to do with the markets and that is we can all look at Schiller PEs and regular PEs and we can always look ahead to earnings which I quite like and we can always look ahead to earnings which I'm quite confident quite forced and then we'll do I'll talk a little bit about that later on but I was inspired if you're thinking about staggering risks that we see out there in the world today that the market seems to totally ignore you know you've got terrorism going on and at least and at least it's more unstable than it's ever been I think even more unstable it's more radiant than that but for a long time in tribal society that very religion is in the name of religion being committed this awful thing where someone being beheaded is somehow a worse thing than someone being shot in the head I'm not sure the victim cares that much but that's frightening increasing in transigence in China parents long have broken another problem Ebola doesn't look like a big problem because it doesn't seem to be able to be transmitted I guess we had the bird flu a few years back which was really a dangerous thing it got everywhere but disease, unprecedented, unpredictable things the weakness in the European economy particularly important in the global world so there are all kinds of huge risks out there with the market it seems to be ignoring as far as I can tell so my question to you, what I did when I thought about this, what could I ask Bill I didn't realize he was going to take all my time asking me was I got out a copy of this book called The Investor's Manifesto and it says preparing for prosperity Armageddon and everything in between and so I immediately went to the index and looked up Armageddon it wasn't there so I thought Bill could tell me what's going to happen what I'm describing is almost an Armageddon all these risks converge almost kind of an Armageddon scenario so what do you say about Armageddon well, first of all that word was sometimes all built for Luton's fault I finally figured that out and I invited the index yeah he said how does this sound to you? and I said sure sounds good to me whatever sounds but you know, more seriously I think that human beings are prisoners of saliency alright you know the image of someone having their head cut off the mental image of somebody leaving out from their orifice from a heart with disease that you really can't treat those are things that really get our attention but I think if you were to go back into a time machine to say 70 years ago when we were staring down the likes of Hitler and Stalin or even 50 years ago when one man really saved the world from being incinerated and that's the Dr. Pav it was a columnist song his commanders were pressing a nuclear button on that submarine to make you should look down because it's an interesting story I think when you went back and told people 50 or 70 years ago the biggest threat we have now is from people who want to go back to the 7th century and can't even manufacture them on bicycles they would have laughed at us I think the problems that we're facing now are trivial compared to to those problems and I think that's one of the reasons why expected returns, why prices are so high and why expected returns are lower now the other reason why that's the case and has nothing to do with the risk is simply the fact that there's a lot more capital in the world and this is a complex subject but if you go back 5,000 years nobody had capital we're talking about subsistence level societies but people needed capital they needed to by farm influence and by seed so that one person who had capital could get an enormous price for it and then as societies become wealthier that physics changes so the richer a society becomes the lower the returns and maybe the returns we're going to get really aren't commensurate with the risks I think that's right I think the problem is not that the risks are so high I don't think they are high compared to the world with 50 or 70 million years ago I just think that the returns are so low commensurate with all the risks that we have that's something that I was going to ask you about but I'll comment upon and maybe get a response from you Jack which is and I'm sure you'll talk about this more later on this morning is if you look at the expected return of a prudent mixed portfolio a 60-40 portfolio it's lower than it's ever been in human history zero return on real return on bonds maybe a 3% or 4% return on stocks that's not much more than 2% real return on your capital and that I think is really the worrisome thing for people who want to retire you've got this squeeze if you will between lower returns and then people are going to be living longer looking at some of the younger people in this audience if you want to retire age 55 what do you mean only the younger people are going to live to be younger I'm talking about this for a sense I've never had a chance that I do that's for sure and if they want to retire age 55 well maybe people will do it but not many other people will the interesting thing is whatever it is we see I have to be really concerned about the state of the world today and I don't quite myself know what to do about it I could go heavily into cash as always I'm roughly in this day and age probably 60% stocks 65 something like that counting all of the accounts I have I would be hired as my biggest asset and my personal account would be lower but personal account is supposed to be intermediate so I'm happy to be there as happy as I could be this year as I've ever been most of which is tax free is not to be seized back but I still puzzle about the big risks that are undefined and out there somewhere and that kind of a situation basically doesn't get a response to the stock market and whether it should or not I might have to know what particular investment advisor who has all of his clients has had for years 60% in short term treasures and he says he knows the event is coming he's got to be ready he's got to protect their assets and they have to give up a few gains or a lot of gains in the search for protection when the great day or the bad day or the evil day comes well that's the way it is I'm not sure that's a viable strategy I think his clients would get a little he knows what he's doing but if you're ahead of the crowd people are always going to wonder what you're doing I don't have any answers to it either but I do think that everybody in the room I would feel very guilty if I didn't warn everybody risky, risky world we live in and I don't know what to do about it except a reasonable conservative position and if Armageddon is let's tell people if Armageddon is having a some kind of a foreign object striking the media or striking the US well no matter whether you're in stocks or bonds that's the good news or to put a little top on that I would give you this in a different context earlier we all know the world is going to hell in a handbasket but it never quite gets there never quite gets there so I don't think you should be aware of risk I don't know what to say do about it, I don't know what to tell myself when I start to panic I would just read one of my books Thanks Jack, thanks Bill and we're going to take a short break now and in 20 minutes Jack will start his