Bilal Little:
Welcome to another edition of ETF Central. I'm your host, Bilal Little, and I'm a director here at the New York Stock Exchange. Today's guest is Ian Dunlap. He's known as the Master Investor on social, and he has quickly become one of the thought leaders in the retail investment landscape. I asked him to join the show because I wanted to get a pulse and a sense of what he's hearing and seeing in the retail landscape.
And with that, Ian, welcome to the show.
Ian Dunlap:
Happy to be here. How are you, my brother?
Bilal Little:
I'm good, man. I'm good. People don't know. This has been years in the making. I have to speak directly to the camera.
Ian Dunlap:
It was three or four years. Yeah.
Bilal Little:
Three or four years.
Ian Dunlap:
We met what? Four years ago in Huntington Beach?
Bilal Little:
Yes.
Ian Dunlap:
Yeah, it has been a while.
Bilal Little:
Yeah.
Ian Dunlap:
Yeah, yeah.
Bilal Little:
Yeah.
Ian Dunlap:
So, I'm happy to be here. Love the show. Proud of you. Proud of you, what you're doing.
Bilal Little:
Thank you, man.
Ian Dunlap:
Yes, I'm honored to be here.
Bilal Little:
Thank you. Thank you.
Ian Dunlap:
Yeah.
Bilal Little:
Thank you. When the last time you were here? You get here pretty frequently.
Ian Dunlap:
Yeah, I was here a couple of weeks ago. Did Good Morning America.
Bilal Little:
Okay.
Ian Dunlap:
So, my mom will be happy to see this, too, because I told her I was coming down-
Bilal Little:
Okay.
Ian Dunlap:
... to the Exchange. She said, "Okay." So, it's always great to make the family proud, too, for sure, so I'm happy to be here. And like you said, this is long overdue.
Bilal Little:
Yeah, long overdue. Ian, I like for the guest to tell their own story and background, and I think it's best that it comes directly from you. For folks that don't know you, tell a little bit about your background.
Ian Dunlap:
I got started in the market in 2008. I had a friend, Arthur, who was a direct report for Jamie Dimon at JP Morgan. This is right around the time the crash was happening. So, he gave me a call one day and said, "Hey, I need you to buy these stocks." I'm like, "Okay." I was watching the football game. I was with a girl. I didn't pay no attention to that.
So, three months later, he called me and said, "It's time to liquidate." And I'm like, "Liqui what? What you mean?" He was like, "You remember the stocks that I told you to buy?" I'm like, "Yes." He said, "It's time to sell them. We made a fortune." And I'm like, "What do you mean?" Because I'm terrified at the time of that crash.
So, 2007, 2008, people felt like the world was going to end, and the conversation was in the family. If gas prices are high, the market is crashed, and there's panic on Wall Street, how could this be a good time? He sold his shares. He liquidated. He was up a few million. And here I am sitting next to Brianna. I'm like, "Why the world didn't I buy these stocks my guy told me to?"
So, since that moment, I learned two things. One, when a person who has access to information, who are working at these empires, tell you to do something, please do them, and those crashes are a great time to get rich from the market. And they're not often, in our community, marketed that way. They're looked at as pure devastation, but to be very honest, that was a generational buying opportunity. So, since that day, I've been all in on studying the markets, and from there I've done pretty well.
Bilal Little:
Wow. I love that. You know what's crazy, man? I've always said information and access are like the gateway-
Ian Dunlap:
Yes.
Bilal Little:
... and the difference makers for a lot of people.
Ian Dunlap:
For sure.
Bilal Little:
Where are you from?
Ian Dunlap:
East Chicago, Indiana.
Bilal Little:
Okay. I want you to hold that. Put that out there. Make sure that they know.
Ian Dunlap:
Yeah.
Bilal Little:
Okay, I love that. Okay, I want to switch gears a little bit, and I want to go broad for a moment. I want you to talk a little bit about how you built the reputation that you have, as the Master Investor, for people to build trust in you because it's really a trust relationship-
Ian Dunlap:
Absolutely.
Bilal Little:
... that you establish with your community.
Ian Dunlap:
For me, in the beginning, once I got really good at investing and built my blueprint, I literally just gave it to my friends that I went to college with at Indiana University. So, I would get on Facebook. This is at the time when you had to have a college email to be on. So, hey, I'm looking at this company, the Facebook. We were all on there. So, when they went public, despite the issue that they had on opening day, I was like, "I like this company at this price." And then they had a issue on the day of the open, but in a few months it worked out. Right?
Bilal Little:
Yeah.
Ian Dunlap:
So, then I was really big into Apple when Steve Jobs was there. And then people started saying, "Okay, I know you didn't go to school for this, but I've made a few thousand dollars. What should I do next?" I'm like, "I can't advise you what to do, but this is where I'm actually buying." And it was really just 10 years of me giving advice for free.
And to go to our personal relationship, you've done nothing, especially with me, giving advice on how to navigate this space, what's coming next. So, I think the core of it is just to give. For me, it has always been the part in, let's say, church that I wish was implemented on a Sunday. I love the sermon, I love the service part, I love the pageantry and the choir part, but it wasn't a point where Monday I can go apply this and see direct correlation, financially.
So, I'll say what I do now, especially on Market Mondays, is just like my secular sermon, to give to the people first, and it has worked out pretty well for me in the community, as well.
Bilal Little:
So, talk a little bit about that. And I'll frame it this way. The reason I wanted you on this show is because you, your network of peers, you guys have built a very established community of investors, folks who want to get in, not only into the markets, but just overall wealth planning.
Ian Dunlap:
Yes.
Bilal Little:
And you guys have built in avenues that are across different media platforms, social media platforms. And I feel like you guys caught lightning in a bottle, calling it COVID. Everyone is at home behind the computer, and you guys are leaning into this education-based content.
For me it's helpful, and I think for the audience. What was it for you guys, outside of everyone just being home, that you started telling some real truths that people were like, "I need to tune in. I need to listen," and it leads to what you guys have with Market Mondays and so many other things?
Ian Dunlap:
Yeah, it was just from the very beginning being very honest and seeing the gap. Of course, you have your legacy shows that have always been there, but I remember watching during the Crash. I know people give him some flack now, but I remember Kramer being on air saying they know nothing, and he was absolutely right. I remember him talking about Petro Hawk and the direction it was going to go. So even though he gets flack now, he was the framework for what ended up being Market Mondays, even having people call in. That's really innovative at a time when most shows didn't do that. But I thought it was important to not only be the best show for our community, my aim was to be the best show in the world. So from the very beginning, even before we did Market Mondays, we did a live stream because when I originally did my episode with them. That was in 2019.
Bilal Little:
Oh, wow.
Ian Dunlap:
It didn't come out until March of 2020. Then we did a live the next week. The first two stocks that I said people should invest in was NVIDIA and AMD. So I've been in NVIDIA since 2016-
Bilal Little:
Wow.
Ian Dunlap:
... because my brother was big into gaming, I saw the value in that battle of AMD and NVIDIA, for those who don't remember. AMD had the lead for a significant amount of time.
So that was the start of, okay, there's something different here. Then, of course, index funds were important to my philosophy then, Apple and Microsoft, but it was just telling the truth about the market and telling them, "Hey, this is how I've been looking at the market." I built a mini framework the way a hedge fund manager would, but our community didn't have that. And that was the lightning and the bottom moment of just to say, "Okay, here's the chart. Here's the fundamental reason why. Here's why I think market makers may like this, as well." And it was a conversation that had never, in the history of our community, been had before.
Bilal Little:
Yeah.
Ian Dunlap:
Yeah.
Bilal Little:
I think that COVID moment was the true democratization of finance-
Ian Dunlap:
For sure.
Bilal Little:
... and real access for everybody.
Ian Dunlap:
Everyone.
Bilal Little:
And talk a little bit about what is Market Mondays, and what are you guys doing with that show?
Ian Dunlap:
Market Mondays is our show that we do every week. It's been six years. I can't believe it. That's crazy. It's crazy. But it's the show where I talk about which companies I love the most. The thing that made it unique though, I was one of the few people that actually gave prices for where to enter based on technicals and fundamentals together before we had a proliferation of AI to give you those things now. So, I even remember when people were like, "Well, we should buy Royal Caribbean and United."
And I spent 10 minutes ranting on why I didn't like... Even though I fly them, I don't like to invest in airlines long term. And then we got an email from CEO of United and Delta, and I was like...
Bilal Little:
Really?
Ian Dunlap:
I didn't know that it would even go that... Because I'm just talking like just you and I. And then it started to be some pushback, and I'm like, "I think we really have something." Because it was the first time in history that I think people woke up and saw, if I don't take my financial freedom into my own hands, no one's going to hand it to me. Because COVID was such a bleak moment, not only from a health standpoint, but I think people had the realization no one cares about your wellbeing other than you.
Bilal Little:
For sure.
Ian Dunlap:
So, I can't believe it has been six years, but it has been a hell of a ride and a great time.
Bilal Little:
And you primarily stream on YouTube. Anywhere else?
Ian Dunlap:
Yeah.
Bilal Little:
Okay.
Ian Dunlap:
I stream on YouTube, all the Apple platforms.
Bilal Little:
Okay.
Ian Dunlap:
Our main go-to is YouTube to do a live and be interactive with the audience.
Bilal Little:
Got it. Makes sense.
Ian Dunlap:
Yeah.
Bilal Little:
And you guys also host a-
Ian Dunlap:
... Investment conference.
Bilal Little:
Yeah.
Ian Dunlap:
Yes, Invest Fest in Atlanta. It'll be August 7th through 9th, so we've had some amazing guests.
A couple of years ago, I sat down with Mike Novagratz and Kathy Wood, so that was great, to get their discussion on crypto and where they thought that was going to go. Robert Smith has been there, of course, Magic Johnson. We had Jack Dorsey there last year, of Square fame. So it has been good. We average 20 to 25,000 people. We-
Bilal Little:
What's your biggest surprise about their interests in wanting to partner with you?
Ian Dunlap:
To be honest, it's not that... They weren't surprised. All of the... Magic, Robert, Jack have all said, like, "We wondered when this was going to happen."
Bilal Little:
Wow.
Ian Dunlap:
Because if you look, the growth of GTC at NVIDIA, Robinhood's conference, if you go back to the money show in Vegas-
Bilal Little:
Yes.
Ian Dunlap:
... back in the day, there has always been a desire, but it was kind of a hidden pocket for our community. So I think just the consistency of doing the event, because you have to prove yourself. Right?
Bilal Little:
Yep.
Ian Dunlap:
And if certain... And I give Troy and Rashad credit all the time because some of these relationships they've worked on for four years, too. They worked on Magic for five years to get them to come. And I know same for you. Some of the relationships you've built, they've taken seven, eight years to develop for you to be able to have them. So, it's been great. But more than anything, they've all stressed, like, "Why hasn't this happened before?"
Bilal Little:
Wow.
Ian Dunlap:
Yeah.
Bilal Little:
I love that. So, let's switch gears now and let's talk a little bit about your investment framework and philosophy, and what you think people should know, and how do you set the rules of the road, just so they have guidance, if you will.
Ian Dunlap:
Yeah. The foundation for me is always index funds. And even though it's such a simple philosophy, the reason why is I try and mitigate the risk and eliminate the drawdown because for most people, if you're new and you don't have a lot of capital, if you invest in a company that draws down 45%, 50%, you're not coming back into the game. It may be over that first time.
Bilal Little:
Impact the loss.
Ian Dunlap:
Absolutely. And then psychologically, let's say if you're down 50%, you need 100 to break even, but you really need 300% for yourself to say, psychologically, I can get back into the game.
And then on top of that, I love tech. I've always loved tech since I was a kid. My grandmother got me a Apple II when I was 12 years old. I was writing lyrics and putting it in a big floppy disk, not to age myself, into Apple.
So, on top of that, we have the fortune of being in this country where the greatest tech companies on earth have been produced here. So, huge fan of NVIDIA, AMD, Microsoft, Apple, Starlink when that is publicly available. So, that's my foundation of to hyper concentrate, have the base of index funds and stack tech on top of it.
But I think it's really important to only invest into the companies that I think are going to dominate for a generation. And I always tell our audience, like, "If you really want to build a generation of wealth and you're not willing to hold for a generation, you're lying to yourself." Holding period matters a hell of a lot.
Bilal Little:
Yeah, time in market is trying to time the market.
Ian Dunlap:
Yeah. There's too many people who are trying to do zero-day expiration options, and that's like, I know you can get a high return, but the risk is incredibly high. And I think the most fascinating thing that has been done is to frame long-term investment is boring. A 30-year cycle of holding Microsoft, you're up 200,000%.
Bilal Little:
Exactly.
Ian Dunlap:
If you just look at the runs of some of these company, even Tesla up 10 to 13,000%, depending on the time and which you acquired it. All the fun is holding for a long period of time.
And for an analogy, I always tell the audience, like, "Jeanie Buss just sold the Lakers now 40 years later. Imagine if she sold it year three or year six, all the upside." And even with that, there was a fight in the family over selling that stake. So, more than anything, once you have a great company, you want to hold onto it for dear life.
Bilal Little:
No, I love that. I love that. And I'm glad you broke that down because the index funds just give you beta to the market-
Ian Dunlap:
Absolutely.
Bilal Little:
... to your point. Let's get exposure, and then let's lean into high-conviction stories.
Ian Dunlap:
Absolutely.
Bilal Little:
That makes total sense. Now let's switch gears. Just talk a little bit about broad market risk right now because volatility is high, right?
Ian Dunlap:
Yes, it is.
Bilal Little:
That things are what's going on in the Middle East. You still got the war and Russia still going on. You have global disruption across the board. You also have-
Ian Dunlap:
Private credit markets.
Bilal Little:
... private credit markets, right?
Ian Dunlap:
Yeah.
Bilal Little:
In your opinion, how do you frame that conversation for your audience and for the listeners and viewers who follow you?
Ian Dunlap:
My first thing, like my dad is in construction. He's a real estate developer. So a lot of these principles I got from him in real estate.
Bilal Little:
Love that.
Ian Dunlap:
His first question for anything, when I was a kid, "What happens if this goes wrong? Explain to me..." Even when I start bringing up the AI conversation, he said, "I get the data center, but what happens if there's a destruction of waterways in the Midwest, and they don't have a plan to get 3X or 5X, what then?" And it's the one question most companies can't answer.
So, the thing I say, there is a lot of risk on the table, and unfortunately the curtain has been pulled back. The Iran war issue is critical. The Straight issue is critical. I've been a big fan of the company OpenAI since 2022, but I would be lying if I said I'm kind of concerned about the character of Sam Altman, and what that fiasco has turned into, and how it's poisoned the well of Microsoft as a result. So, you have to consider the drawdowns from the very beginning of how bad it could go.
I do think we should enter, if they allow it to, a deep correction going slightly into... I think we hit maybe right at 15 to 18, maybe 20%, worst case scenario, but I think the private credit market issue is really interesting because once companies found a way to finance it and not have it on their books, that's the first tell sign of like, "Why don't you want that on your books while you're doing investor relations?" That's really fascinating.
So, I always look for the tailwind risk first, because that would determine how much upside you'll have. But overall, in three or four years, I think everything will be okay, but I do think we need better global leadership. We need better leadership in Washington. And as a result, I think some of the gluttony from Washington has spilled over into our companies here that has to be fixed. But I need to know what you think.
Bilal Little:
No, you know what's interesting about that point is when private investment vehicles become marketed to the retail public-
Ian Dunlap:
It's never good. It's never good.
Bilal Little:
... it's usually not a good sign, right?
Ian Dunlap:
No, no.
Bilal Little:
It's usually not a good sign.
Ian Dunlap:
No.
Bilal Little:
So, I think the unemployment issue and what's happening with the marginalization of the employee-
Ian Dunlap:
Yes.
Bilal Little:
... in many areas... I speak at a lot of universities, and these kids that are coming out of school, it's going to be difficult for them-
Ian Dunlap:
... [inaudible 00:15:55] terrified.
Bilal Little:
... to find entry-level jobs. And they want to compete, but if no one wants to train them or if they say-
Ian Dunlap:
No.
Bilal Little:
... "You know what? That ancillary work can be done by a handful of agents." If I'm a business owner, I understand the case because I got to keep my marge. I have to produce and perform.
Ian Dunlap:
For sure.
Bilal Little:
If I'm young talent, I'm ultra concerned-
Ian Dunlap:
Yes.
Bilal Little:
... because I'm dealing with the market that's hyper-competitive, meaning multiple generations are all working for the same level jobs-
Ian Dunlap:
Yes.
Bilal Little:
... for the most part. The highly skilled labor jobs, no one wants to go do that. Right now, we don't have anyone to build ships. There's a lot of work that no one wants to do.
Ian Dunlap:
Yeah, no one wants to touch. Yeah.
Bilal Little:
So, I think all of that is the recipe for more volatility, honestly, especially as unemployment continues to creep up. And look, inflation remains stubborn-
Ian Dunlap:
Absolutely.
Bilal Little:
... and they actually didn't do anything with rates. So, there's a lot more to come going into the summer.
Ian Dunlap:
I know.
Bilal Little:
And usually the old adage was, "Sell in May, go away."
Ian Dunlap:
And go away. And I normally don't like that, but this year, I'm... And also Dex GDP is at 123. The last time we were in this range was what, World War II?
Bilal Little:
Correct.
Ian Dunlap:
It took 26 years-
Bilal Little:
A long time.
Ian Dunlap:
... 28 years to... And even now, there's some investors I've talked to, they think that's GDP could get to 140. And I'm like, "If we get there in 10 years, how do we course correct just to get back to 100?"
Bilal Little:
Yeah.
Ian Dunlap:
I don't know. There's a lot of potential. I don't see a black swan, but I do see like cracks in a bunch of pillars at one time that I have not seen in my lifetime.
Bilal Little:
Right, for sure.
Ian Dunlap:
Yeah.
Bilal Little:
No, I'd argue it's... For all the things that we're excited about, like AI, I would say there's a mutually concerning issue on the other-
Ian Dunlap:
Absolutely.
Bilal Little:
... side of the aisle, so a lot of people are dealing with that.
Let's switch gears if we could. Let's talk about tech a little bit because with the time that we're living in, you just talked about this sort of polarizing issue with Sam Altman and how it has this spillover effect. There's a lot of issues around AI governance.
Ian Dunlap:
Yes.
Bilal Little:
How are you teaching your audience about ways to identify value with all of the disruption from AI?
Ian Dunlap:
Number one is you have to look to fundamentals. Let's take the Super Micro issue, which I... There's some great people who work at that company. I never understood the case for why they went up 900%. If I'm reselling intellectual property from another company, and I don't make the chips, I don't have Jensen as a chairman of board, I have no essential IP worth anything, and the profit margin is 3%, how can the stock go up 800%? That was pretty damning and fascinating to me at the same time. So, I always tell them, "Look at the fundamentals first."
Thank God now we have AI, so you can go through your research and your reports to see if there's any flags. And more than anything, AI is a great tool for risk mitigation. So, if I'm comparing best of breed... When NVIDIA had that run and AMD had their run, and now Sandisk is having their moment, Super Micro never belongs in that conversation. But I think so many traders and investors wanted such a high return because they saw it happen with NVIDIA, we got a little bit of hype behind some of these companies that shouldn't have it. But I always say, "Research the companies first. See what the history of the founder is. See what the profit margin is, what the gross margins are, what the analysts are saying in terms of expectations."
That's easier to do now than ever now. In 2010, it would've been hell to find all of that. Now, you can aggregate all the analyst reports, put it in Claude, and have it do an assessment for you. So, now, that's taking even my research down from six hours today to maybe 35 minutes, which helps a lot, but you always have to start with the risk on the table.
Bilal Little:
So, talk about the tools that you're sharing with people that they need to look at and utilize to do some of that research. Are you just saying now, "Hey, just throw everything in the Claude"?
Ian Dunlap:
No, I spread it out, Claude-
Bilal Little:
Okay.
Ian Dunlap:
... GPT, not just because I'm here, ETF Central. You have to look, research. I like Koyfin. I like GuruFocus. There's so many great sites and apps that you can aggregate now to be able to pull data. I would say, if you're a retail investor, you will never have the same level of access that a hedge fund manager will, but this is the closest I've ever seen to be able to pull.
The thing I like in GuruFocus, and I'm not affiliated with them in any way, but to be able to see all the portfolios and how all of those are structured from different fund managers and Fund of Funds, that's really exciting to be able to see. So I go through those every day.
Bilal Little:
It reminds you of like the Wall Street movies where it's like, it's always about the edge.
Ian Dunlap:
Absolutely.
Bilal Little:
Right? Information is the edge.
Ian Dunlap:
You have to find where to build. Yes.
Bilal Little:
You have to find the edge.
Ian Dunlap:
Yeah, but most people won't hunt for that. Anytime I talk, it'd be 11:oo at night, "Hey, brother, I'm looking at this. What you think about this ETF? What do you think about this levered opportunity?" The same mentality that Kobe had for basketball, we have to have a Mamba mentality for the market-
Bilal Little:
Wow.
Ian Dunlap:
... because the market is evolving so quickly. And not only have the companies gotten better, the retail investors have gotten dramatically better over the last 10 years, as well. So, an edge that you used to have of knowing about a tech stock that's on a fringe or maybe a blue chip tech stock... Some people missed out on Sandisk and Micron as a result of not researching diligently. So, all the tools are there, but you just have to allocate the time. Make two to three hours a day to get an edge in the market every day.
Bilal Little:
Your audience spans, right? So, I'm sure you probably have millennials and Gen Zs-
Ian Dunlap:
Yeah.
Bilal Little:
... but you probably got some older folks-
Ian Dunlap:
We do.
Bilal Little:
... in there as well, and risk for them is different.
Ian Dunlap:
For sure. It's life or death.
Bilal Little:
It's life or death-
Ian Dunlap:
Yes.
Bilal Little:
... because they're entering in retirement. They're like, "Hey, I need to figure out something." Have you thought about introducing more conservative opportunities for that audience? I'm not telling you to change who you are-
Ian Dunlap:
Yeah.
Bilal Little:
... or what you're catering to, but do you even think about-
Ian Dunlap:
You do have to make the adjustment. Because I think of my own family members who are entering retirement or they're getting to an age where risk really isn't an option for them. So, we definitely... I do want to ask you a question, though.
Bilal Little:
Yeah, sure.
Ian Dunlap:
Do you think the 60/40 portfolio is dead?
Bilal Little:
That's a great question. So-
Ian Dunlap:
Because I think the biggest scandal... not scandal, but story of this decade should be the bond market has been down for 67 months. If tech has been down for half of a decade, it would be on ESPN every day. And I feel like no one has blinked an eye and said, "Why is our bond market moving the way that it is?" So, has it reshaped the way that you look at a traditional 60/40 portfolio?
Bilal Little:
Yeah. I think it's funny because when I was a wholesaler and I was out in the field, and I was working at BlackRock, I think there are different parts of the portfolio that got people from the 1980s to the early 2000s-
Ian Dunlap:
Yes.
Bilal Little:
... and it got them there safer. And I know there, that balanced model portfolio was phenomenal-
Ian Dunlap:
Yes.
Bilal Little:
... obviously even through the tech bubble.
Ian Dunlap:
Mm-hmm, it was flawless.
Bilal Little:
It was flawless. It did extremely well. I think post-9/11 and... Well, not post-9/11, but post the GFC, when they put so much money into the system, it changed everything.
Ian Dunlap:
Absolutely.
Bilal Little:
Right? It changed everything.
Ian Dunlap:
They printed too much money.
Bilal Little:
Correct, but here's what happened that I don't think enough people paid attention to. No one was holding commodities. No one still holds commodities.
Ian Dunlap:
That's true.
Bilal Little:
They don't hold enough commodities in the portfolio, when you start thinking about the broad utility of commodities. I'm talking more than just gold. We're talking about the precious metals. We're talking about even agriculture. There's certain parts that do extremely well, and they become defensive hedges. No one looks at anything like that.
Ian Dunlap:
They don't.
Bilal Little:
The other thing, inverse vehicles are available.
Ian Dunlap:
Yes.
Bilal Little:
As we look to the holding period, yes, it's still long, meaning like the time horizon, but what's different is because they're more tax efficient, you can look at some short-term tactical plays that actually help you-
Ian Dunlap:
Okay.
Bilal Little:
... on the downside. So, you may still love your Tesla exposure, but if you have the ability to get an inverse exposure to it while it might be in a lull period-
Ian Dunlap:
That's a good point.
Bilal Little:
... great opportunity because it doesn't mean that you don't love the company, or the leadership, or whatever. So, I use that as an example.
Here's the other one that I'll tell you that's really interesting. Not a lot of people hold high yield or credit.
Ian Dunlap:
At all.
Bilal Little:
And that has done pretty well, not only just on the income side, but really talented money managers have been able to go out and find bonds that have been cheap and do well on the upside. It's a conservative equity play, I'll call it, but no one builds a portfolio like that. They tend to think about bonds as the ag...
Ian Dunlap:
Okay.
Bilal Little:
... and that's the exposure. I get it, but I think they're missing these other carve outs of the portfolio for a 60/40.
Ian Dunlap:
What allocation would you... Going 2026 through 2036, what percentages would you have them structure it?
Bilal Little:
No.
Ian Dunlap:
I have to ask you.
Bilal Little:
No, I'm not allowed to say that, so I won't answer that, but here's what I will say, and I will submit to the audience. I will say, I would think long and hard about commodities in the portfolio.
Ian Dunlap:
For sure.
Bilal Little:
That's like, just given where inflation is, and then the way the rest of the world is reallocating capital back to the gold standard is a very real thing.
The second thing is looking at global debt around the world, we have a global governance space debt issue. This is not just a corporate debt issue. This is much more at the state and entity level. So, I'd be looking at that.
The third thing that I'll point to, and I'll just submit this to you, I think international equity is completely-
Ian Dunlap:
Underused.
Bilal Little:
... underutilized-
Ian Dunlap:
Yes.
Bilal Little:
... and underinvested for most, especially US-based investors. Let alone, and I'll say this even last part, thinking long-term if they're long-term investors, emerging market exposure. Most people are not paying attention to these other areas of the market, to your point. It's S&P 500 and it's mega tech, and they're missing these growth opportunities across the board.
Ian Dunlap:
Especially India.
Bilal Little:
Yeah.
Ian Dunlap:
Especially in India. I think that's ripe for opportunity. And given how fast their middle class is growing and the development of the country, I think there's an amazing opportunity there, for sure.
Bilal Little:
Yep. So, let's talk about a couple of things. I want to get your take on this. Right now, what are your biggest concerns that you're sharing with your community?
Ian Dunlap:
It's a few. The circular investment of AI is concerning because as an investor, if I deploy a dollar, I want to know a plan. How can I get five back? So, in a data center buildout, I get everyone was chasing the magic that Microsoft created with OpenAI. Okay, I get it. And even though Apple mismanaged what could have been an acquisition for them, they were smart to hold off on the deployment of all that capital, as a result. So, that's number one, because I think all the players in AI that are saying they're going to be the next unicorns, I don't think all of them are going to be okay within five or six years.
The political landscape is very, let's say, confusing to say the least. So, geopolitically, we just, even in this war in Iran, I don't know how long it'll last, but it's not beneficial for us financially, that's a concern. And then also, too, we've talked about it, the market has been too ripe for too long. I don't want a recession by any stretch of the imagination, but when we had-
Bilal Little:
That's where the value is exposed.
Ian Dunlap:
Yeah, but when we had 2020, then the SPAC era, then NFT... Like I had someone two weeks ago tell me, "Hey, Apple is only giving me 12 or 13%. I think I should get rid of it." And I'm like, "Any other era in time, that's a home run." But people have normalized.
Bilal Little:
People have gotten greedy.
Ian Dunlap:
... 150% gains in a year with no leverage and no options on it, and I'm like, "That's not a normal market."
So, some of the course correction that we're seeing, I'm telling people, I'm like, "The era of those easy gains are going to come to an end, but you still have to hold quality companies."
Bilal Little:
Yeah. I think that's why I've been really excited about the ETF wrapper. You've seen this evolution of beta exposure to getting more precision in a portfolio. When you start thinking about unique sectors that are really either beaten up or untimely, when you look at healthcare or-
Ian Dunlap:
Oh, healthcare is [inaudible 00:28:15].
Bilal Little:
... right, biotech-
Ian Dunlap:
Yeah.
Bilal Little:
... the innovations of AI will penetrate these other areas and unlock an insane amount of value that most people will never get exposure to outside of just the index. So, some things that I like about the active side of ETFs... And this is what I wanted to at least submit to you and share with you, to just even start thinking about. The best active managers that, historically, you couldn't even find are launching some of the most exciting products-
Ian Dunlap:
Absolutely.
Bilal Little:
... in ETF wrappers that do two things, by the way, because of the transparency. They expose unique positions that you may not even have seen, right, that are up and coming positions.
Ian Dunlap:
Yes.
Bilal Little:
The second thing is they're outperforming some of these beta positions with downside protection. And it's been, when I'm telling you what I'm seeing from launches or given my role and seat, I'm seeing a tremendous amount of high-quality money managers pick up real dollars.
Ian Dunlap:
Okay.
Bilal Little:
That's a telling sign that people have moved, not past the beta trade, but they're now looking... Can you get the edge? And some of the managers are being more rewarded than the others.
Ian Dunlap:
How do you keep that edge without having... Let's say what Kathy would, because I had a chance to talk to her, without having too many positions rotating too much, how do you actively manage that opposed to, let's say, the other side of it, Michael Saylor, where you're just really building around one asset, and then things fall apart? How do you manage the growth and all that?
Bilal Little:
Yeah. No, that's a good question. What I'll say from what I've seen is the high caliber money managers hold somewhere between 25 to 45 positions.
Ian Dunlap:
Okay.
Bilal Little:
They know their companies very intimately opposed to just that single course in the race. So, I think, but it still moves into concentration, to your point earlier, from the beta trade-
Ian Dunlap:
Yes.
Bilal Little:
... of 500 positions, because all 500 may not do well, but you still want the broad market exposure. So, just some of the precision can be added, is what I'm submitting.
Ian Dunlap:
Who do you think has done incredibly well the last three or four years with that approach?
Bilal Little:
Money managers?
Ian Dunlap:
Yes.
Bilal Little:
Oh, man, you're going to put me on the spot here. So, look, I'll point to some of our clients. I'm not going to say any names on the ETF side. You can go to ETF Central and check it out.
Ian Dunlap:
For sure.
Bilal Little:
There has been Korean defense exposure.
Ian Dunlap:
That's a great one.
Bilal Little:
I was-
Ian Dunlap:
When I saw that, I was so, "Ugh." Oh. I just-
Bilal Little:
Right?
Ian Dunlap:
Yeah.
Bilal Little:
A new play on yield and risk mitigation as far as duration management, autocallables...
Ian Dunlap:
Okay.
Bilal Little:
... which is a structured product historically offered by banks through financial advisors.
Ian Dunlap:
Okay.
Bilal Little:
... is now being offered in an active ETF wrapper. We're close to seeing one of the first ETFs to reach a billion dollars, but pay a very nice dividend yield with very strong downside protection.
Ian Dunlap:
Okay.
Bilal Little:
Very interesting sector.
The next I would say, I'd be shocked to say this, but the exposure with, I can't say the name, the combination of public privates and an ETF wrapper-
Ian Dunlap:
Okay.
Bilal Little:
... if you look-
Ian Dunlap:
It's fascinating.
Bilal Little:
If you look at the performance, now, look, you're not getting a 20% allocation of privates. It's a smaller allocation, but here's what I was going to say. You can actually see the exposure in those products perform better than some of the traditional broad open asset classes across fixed income.
Ian Dunlap:
Really?
Bilal Little:
Which means they've done a really nice job of earmarking high-quality debt. That's exposure that they want that they can still provide exposure that's open in the ETF wrapper, which is very different than what you've seen historically.
Ian Dunlap:
Okay.
Bilal Little:
So, those have been areas that, for me, I'm like, "Wow."
And then international. Last two years, international-
Ian Dunlap:
Yeah, yeah, amazing.
Bilal Little:
... has done relatively-
Ian Dunlap:
Yeah, great.
Bilal Little:
... well compared to the US.
Ian Dunlap:
Yeah, it has been great.
Bilal Little:
No one has those. So, again, I can't say the names because it's like-
Ian Dunlap:
Can't say the names, of course.
Bilal Little:
All right, so let's close out with this. Talk to me about your vision for the next five to 10 years and how you're communicating that message.
Ian Dunlap:
I can't state everything because I've learned to keep some things. I will talk privately, but a lot of the things we talked about today, I have a great interest in. I'll say that. I'm working on a book now.
Bilal Little:
Okay.
Ian Dunlap:
So, I'm very excited about that. I think that's long overdue. I'm working on a documentary around investing and some of the movement that we built in trading, as well, in the futures market, so I'm excited about that.
Bilal Little:
Okay.
Ian Dunlap:
But the other four or five things on that vision board I'll talk to you about privately because I'm going to need your help.
Bilal Little:
All right, dude.
Ian Dunlap:
So, hold him to it because he agreed that he would help. so-
Bilal Little:
Ian, thank you so much for joining ETF Central.
Ian Dunlap:
Thank you, my brother. I appreciate it.
Bilal Little:
This is amazing.
Ian Dunlap:
It's really an honor.