To: Hidden Recipient Date: Wed, 12 Feb 2025 19:18:13 +0000 Content-Type: multipart/alternative; boundary="_----eMQGFv0GzGeBtOOmDI7xnw===_20/92-27954-5F3FCA76" MIME-Version: 1.0 Subject: Money Stuff: Not Everywhere Is Insider Trading From: "Matt Levine" X-Hiring: We are hiring, reach out at header-hacker@emailshot.io X-EmailShot-Signature: rfoip5WNW9fknWXpcWiAqG7jqALR6gaWTW318qs6V7L34RRSN1kYL6rl-No2yXkuxjRPiqGf_mYfvZwf0SF8bA== --_----eMQGFv0GzGeBtOOmDI7xnw===_20/92-27954-5F3FCA76 Content-Transfer-Encoding: quoted-printable Content-Type: text/plain; charset="UTF-8" Money Stuff =0A Here=E2=80=99s an insider trading hypothetical for you. I h= ave a golf buddy who is a =0Asenior executive at a public company. One day = on the course, sh =0A=0A=0A <> =0A =0A=0A=0A=0A=0AInsider betting=0A=0AHere=E2=80=99s an insider tr= ading hypothetical for you. I have a golf buddy who is a =0Asenior executiv= e at a public company. One day on the course, she tells me: =E2=80=9CMy =0A= firm is going to announce a takeover of Anacott Steel at $15 per share; you= =0Ashould buy some.=E2=80=9D I go back to my office, open up my brokerage = app, and am =0Aabout to buy 10,000 short-dated out-of-the-money call option= s when I think: =0A=E2=80=9CWait, no, this is insider trading, I will get i= n trouble for this.=E2=80=9D I close =0Athe app.=0A=0AInstead, I pick up my= phone and call you. =E2=80=9CHey,=E2=80=9D I say, =E2=80=9CI=E2=80=99ll be= t you a =0Amillion dollars that Anacott Steel closes above $13 this Friday.= =E2=80=9D You are a =0Adegenerate gambler and have never heard of the conce= pt of adverse selection, so =0Ayou say =E2=80=9Cha, Anacott Steel is at $10= now, this is easy money, it=E2=80=99s a bet.=E2=80=9D The =0Anext day, the= takeover offer is announced, the stock goes to $14, and I collect =0A$1 mi= llion from you.=0A=0ADid I commit insider trading=3F Oh man is this not leg= al advice, but my gut is: =0Ayes=3F Technically I didn=E2=80=99t trade any = stock =E2=80=94 I just made a bet with you =E2=80=94 but =0AI=E2=80=99m not= sure that matters. Our bet is, arguably, a =E2=80=9Csecurity-based swap=E2= =80=9D: We =0Ahave agreed to exchange payments based on the future value of= a security (the =0AAnacott Steel stock). [1] <> And insider trading in se= curity-based swaps =0Acounts as insider trading. [2] <>=0A=0AIn real life = there is also a more practical reason to consider this insider =0Atrading. = In real life, when you get a phone call from me asking to bet $1 =0Amillion= on the price of Anacott Steel, you mighthedge that bet. You might agree = =0Ato the bet with me and hedge it by buying some Anacott Steel stock (or = =0Aoptions): If the stock goes up, you will lose the bet but make money on = the =0Ahedge, and if it goes down, you will win the bet but lose money on t= he hedge. =0A[3] <> You wouldn=E2=80=99t necessarily do that if you were a= degenerate gambler, but =0Arealistically if I am calling someone to bet on= the future price of a stock, =0AI=E2=80=99m probably calling abank or othe= r trading firm, and the bank will probably =0Ahedge. Therefore, while my be= t is not anactual insider trade in Anacott Steel =0Astock, it predictablyca= uses trades in Anacott Steel stock. It=E2=80=99s not just =0Abetween us; so= mebody else =E2=80=94 some seller of the stock =E2=80=94 is indirectly on t= he =0Awrong side of my inside information.=0A=0ANow let me change the hypot= hetical slightly. Everything stays the same, except =0Athat I am in London = and you are in London. Anacott is inErie, Pennsylvania <>, =0Aand its stock= trades on the New York Stock Exchange, but ourbet is in London. =0AIs that= insider trading=3F Or, rather, if it=E2=80=99s insider trading, can anyone= do =0Aanything about it=3F Specifically, can US federal prosecutors do any= thing about =0Ait=3F=0A=0AThis is extra super not legal advice but <>:=0A= =0AA trader accused by the US of making nearly $2 million from insider deal= ing =0Awon a last-ditch attempt at the UK Supreme Court to block his extrad= ition, =0Aafter the country=E2=80=99s top judges ruled that the alleged wro= ngdoing took place =0Aoutside the US.=0A=0AJoseph El Khouri, who holds dual= Lebanese-British citizenship and lives in =0ALondon, was facing criminal c= harges that he traded on inside information. US =0Aprosecutors alleged that= the trader, an avid poker player, gave lavish gifts to =0Amiddlemen, inclu= ding expensive hotel stays in New York, and a charter yacht in =0AGreece, i= n exchange for tips as part of an international insider trading =0Aconspira= cy.=0A=0ABritish courts first ruled that he could be extradited in 2021.=0A= =0ABut the trader successfully argued that the overwhelming majority of the= =0Aalleged misconduct took place in the UK and that the US lawyers were wr= ong to =0Asay that the impact of the trading was likely to have affected US= markets. =E2=80=A6=0A=0AEl Khouri was alleged to use the insider tips to t= rade in contracts for =0Adifference.=0A=0AHere are the original charges <> = and the 2019 indictment <>, which says that =0Ahe tradedcontracts for diffe= rence <> =E2=80=94 similar to total return swaps, bets on =0Athe stock pric= e =E2=80=94 in the UK based on US stocks. If you use inside information =0A= to bet on the prices of US stocks in the UK, what does that have to do with= US =0Aprosecutors=3F Maybe nothing: If British people want to trick other = British =0Apeople, that=E2=80=99s between them and their government, not th= e Southern District of =0ANew York. Or maybe something: If British brokers = sell CFDs to British traders =0Aand then hedge those CFDs by trading the un= derlying stock (in the US), then =0Athat does seem like something US prosec= utors might care about. But not enough =0Afor the court.=0A=0AI am mentioni= ng this mostly because I can never resist a fun insider trading =0Apuzzle. = But there isperhaps a broader theme here. I have gotten used to the =0Aidea= that, if anyone in the world does any sort of financial transaction that = =0Athe US government doesn=E2=80=99t like, that=E2=80=99s a crime in the US= . If you are aFrench =0Abank <> (or a stateless crypto exchange <>) moving= money from a sanctioned =0ARussian company to its Venezuelan supplier, the= US legal and financial system =0Awill find a way to get you: You probably = moved dollars, the dollars probably =0Atouched banking settlement systems i= n New York, boom, you committed a US crime. =0AOr if you are aSwiss commodi= ties trading firm <> paying bribes to win contracts =0Ain Nigeria, that=E2= =80=99s a crime in the US too, and you=E2=80=99ll pay up. The US is a big = =0Apowerful country with big markets and the global currency, and it can ex= ert its =0Apower to make foreigners subject to its laws.=0A=0ACould that be= changing=3F This is just one case. But there are other shifts. We =0Atalke= d <> a few times <> last year about Tether, the stablecoin, as a way to =0A= transfer dollars without being subject to the legal risks of the US dollar = =0Asystem: If you want to send dollars to Russian arms dealers, a US bank w= ill =0Astop you, and a French bank will probably stop you, but stablecoins = move on the =0Ablockchain and are more resistant to US government interfere= nce. Last year, the =0AUS government didn=E2=80=99t like that idea, but thi= s year it might. (=E2=80=9CCommerce Nominee =0ALutnick Is Backer of Outlaws= =E2=80=99 Favorite Cryptocurrency,=E2=80=9D was aBloomberg headline =0A<> l= ast month.) =0A=0AOr I mentioned that paying bribes abroad is a crime in th= e US, but that=E2=80=99s only =0Awhat the law says. But President Donald Tr= ump has issued anexecutive order <> =0A=E2=80=9Cpausing=E2=80=9D enforcemen= t of the Foreign Corrupt Practices Act, so bribery abroad =0Ais no longer a= ny of US prosecutors=E2=80=99 business. [4] <> (Not legal advice!)=0A=0AAn= d it turns out that insider trading abroad might not be either. The US is a= =0Abig powerful country, but that doesn=E2=80=99t mean that US law applies= to everyone.=0A=0A =0A= =0A=0A =0A=0A=0AVanguar= d=0A=0AI do not give financial advice around here, but a pretty good piece = of =0Afinancial advice =E2=80=94 not thebest possible financial advice, not= advice that =0Aapplies to all people in all situations, but a pretty good = first cut [5] <> =E2=80=94 =0Ais =E2=80=9C(1) save as much money as you ca= n, (2) put it in broad market index funds =0Awith low fees, and (3) leave i= t alone.=E2=80=9D=0A=0AThat does not answer all of your questions! For one = thing, it doesn=E2=80=99t exactly =0Atell you which index funds to buy. (Sh= ould you buy the global stock portfolio, =0Aor tilt toward your own country= =3F Should you be 60/40 stocks and bonds, or some =0Aother mix, and should = the mix shift over time=3F) But it also doesn=E2=80=99t tell you =0Aexactly= how much to save, or how to budget, or how to decide between investing =0A= and paying down debt, or when you should start withdrawing money for =0Aret= irement; it doesn=E2=80=99t answer any of your questions about tax loss har= vesting =0Aor tax-advantaged savings vehicles or charitable giving or effic= iently passing =0Amoney on to your heirs; it is not responsive to your part= icular circumstances.=0A=0ABut it=E2=80=99s pretty good, in the sense that = a large number of Americans would =0Aprobably be better off following this = advice than doing whatever they=E2=80=99re =0Acurrently doing. It was also,= once, pretty revolutionary. Once upon a time, =0Amany people got their fin= ancial advice from stockbrokers, who would tell them =0Athings like =E2=80= =9Cbuy this mutual fund that underperforms the market but pays me a =0A7% s= ales commission=E2=80=9D or =E2=80=9Cbuy these three stocks I love right no= w, and sell them =0Anext week to buy different stocks so I can earn a lot o= f commissions.=E2=80=9D In the =0Aaggregate, the customers were unlikely to= outperform the market (in the =0Aaggregate, theywere the market), and they= paid a lot for the advice. Telling =0Athose customers =E2=80=9Cjust put it= in index funds and ignore it=E2=80=9D would have =0Asimplified their lives= , saved them lots of money on fees, and probably improved =0Atheir returns.= =0A=0AOn the other hand their stockbrokers =E2=80=94 or other financial adv= isers =E2=80=94 also =0Aprobably reminded them to harvest tax losses and pu= t money into tax-advantaged =0A401(k) plans, helped them plan for retiremen= t and advised them on passing money =0Aon to their heirs. There was sort of= a bundle where the overpriced =0Astock-picking paid for the useful advice.= =0A=0ASomeone did come along and tell the customers =E2=80=9Cput it in inde= x funds and =0Aignore it,=E2=80=9D with great success. That someone was Joh= n Bogle and Vanguard Group. =0AA lot of people found that advice appealing,= and Vanguard made it easy to =0Afollow it: Vanguard has a website where yo= u can open a brokerage account and =0Abuy its low-fee mutual funds, many of= which are index funds. You can go to the =0Awebsite, buy like five broad i= ndex funds, automatically put in new money every =0Amonth, and forget about= it. [6] <>=0A=0AThis is very good for a lot of people, who save money on = fees and get market =0Aperformance and also don=E2=80=99t have to think abo= ut this stuff all the time. But =0Athere are downsides, the main one being = that the website does not really answer =0Aall of your questions about budg= eting or taxes or charitable giving or =0Aefficiently passing on money to y= our heirs. It essentially unbundles the =0Astock-picking and the useful adv= ice: Vanguard will do the stock-picking better =0A[7] <> and more cheaply = than most financial advisers, but it won=E2=80=99t sit down =0Awith you in = a plush office for quarterly meetings where you discuss your =0Afinancial h= opes and dreams and Vanguard tells you how to achieve them.=0A=0AThat=E2=80= =99s an obvious thing to work on. Here=E2=80=99s a Financial Times story <>= about =0AVanguard=E2=80=99s evolution:=0A=0AFor much of its history, it ca= tered mostly to do-it-yourself investors and =0Aemployee-directed retiremen= t plans. Though its online offerings were clunky =0Acompared with rivals, a= nd its customer service lines had limited hours, =0Ainvestors were rewarded= with low fees that led to superior returns.=0A=0AHaving forced rival asset= managers to slash fees and rethink business models =0Abuilt around stockpi= cking, Vanguard is now taking aim at other parts of the =0Afinancial servic= es industry. [Chief Executive Officer Salim] Ramji is =0Aspearheading pushe= s into investment advice, actively managed bond funds and =0Acash accounts.= =E2=80=A6=0A=0AMeanwhile, many of its older customers are reaching retirem= ent age and need =0Aadvice on the complexities of drawing down their pensio= n pots. =E2=80=9CVanguard is the =0Asleeping terror for US wealth managers,= =E2=80=9D says a senior executive at a major =0AWall Street rival. =E2=80= =9CIf it wakes up, it will swoop upon the complacent cottage =0Aindustry of= financial advisers, and tear it apart.=E2=80=9D=0A=0AVenturing into financ= ial advice defies the instincts of Bogle, who died in =0A2019 but spent a l= ifetime urging investors to =E2=80=9Cminimise the croupier=E2=80=99s take= =E2=80=9D. =E2=80=A6=0A=0AThe company launched personal adviser services in= 2015 and added a =0Adigital-only robo-adviser in 2020. It already has more= than $900bn in advisory =0Aassets, making it a big player in a highly frag= mented industry.=0A=0A=E2=80=9CLow fees, novel price transparency, operatin= g scale, great brand, unlimited =0Aresources =E2=80=94 it can=E2=80=99t los= e,=E2=80=9D says the senior executive at a rival firm. =E2=80=9CUnless =0Ai= t stays asleep.=E2=80=9D=0A=0AVanguard last year cut the minimum account si= ze to $100 for digital-only =0Aadvice and charges a maximum of 0.2 per cent= for the service. Clients with at =0Aleast $50,000 can graduate to a combin= ation of digital and live advice for 0.3 =0Aper cent. Vanguard plans to kee= p costs down by using video and artificial =0Aintelligence to help advisers= serve more clients, more effectively. =E2=80=A6=0A=0AOne potential mother = lode could be Vanguard=E2=80=99s existing retail customers =E2=80=94 at =0A= present, only 5 per cent of them pay the firm for advice. [The head of the = =0Aadvisory business, Joanna] Rotenberg describes how her father, =E2=80=9C= a =0Adyed-in-the-wool self-directed customer, a Boglehead for life=E2=80=9D= , reached his =0Aseventies and wanted help sorting out his retirement spend= ing: =E2=80=9CHe actually =0Amoved out of Vanguard to another firm because,= in his perception, Vanguard =0Adidn=E2=80=99t have those capabilities.=E2= =80=9D=0A=0AWhen Bogle started, =E2=80=9Cminimize the croupier=E2=80=99s ta= ke=E2=80=9D was counterintuitive but =0Aultimately good adviceabout investi= ng: He was ridiculed for this idea at first, =0Abut now it is widely accept= ed that paying a lot of money to star fund managers =0Ato pick stocks for y= ou is worse than paying Vanguard0.04% <> not to pick =0Astocks. But you mig= ht want more from your financial relationship than stock =0Apicks, and you = might be willing to pay for it.=0A=0A=0AThe Dow=0A=0AOne counterintuitive i= dea of modern finance that I like to think about <> is =0Athat stocks are a= ll kind of interchangeable. In old-timey finance, you would =0Abuy Amalgama= ted Widgets because you liked its dividend and bought its products =0Aand w= ere golf buddies with its chief executive officer, but in modern finance = =0Aevery stock is just a list of factor exposures, and your job is to get t= he =0Aright factor exposures. There are lots of stocks, and you can get you= r factor =0Aexposures in various ways, so it is approximately true that a s= tock is a linear =0Acombination of other stocks. And so, for instance, if y= ou have to sell =0AAmalgamated Widgets stock to take a tax loss, you can im= mediately replace it =0Awith some other basket of stocks to keep the same m= arket exposure under a =0Adifferent name.=0A=0AAgain, this is an interestin= g approximation; it is not quite true. Over long =0Aperiods,most of the ret= urns <> from the stock market come from a fairly small =0Afraction of the s= tocks, so replacing the 10 good stocks with 100 bad stocks in =0Ayour portf= olio would be a disaster. But for many purposes, much of the time, =E2=80= =9Ca =0Astock is a set of factor weights, and you can get those factors lot= s of places=E2=80=9D =0Ais approximately true.=0A=0AAnd so, if your finance= professor assigned you a job like =E2=80=9Creplicate the =0Areturn of the = broad stock market using only a small subset of the stocks in the =0Amarket= , and weighting them in some arbitrary way unconnected to market =0Acapital= ization,=E2=80=9D you could probably put together some reasonable approxima= tion.=0A=0AWhy would you want to do a thing like that in real life=3F Well,= the classic =0Aanswer is what people call =E2=80=9Ccloset indexing <>=E2= =80=9D: If you get a job running an =0Aactively managed stock mutual fund, = you might think =E2=80=9Cactually achieving average =0Amarket performance i= s pretty good for a mutual fund, but I can=E2=80=99t charge 0.75% =0Afees f= or running an index fund when Vanguard charges 0.04%, so I have to run a = =0Afund thatlooks different from the index but that gets roughly the same r= eturns.=E2=80=9D=0A=0AAnother, funnier answer is that if you get put in cha= rge of the Dow Jones =0AIndustrial Average, you will have exactly that job:= =0A=0A * You will want your index to look like a broad market index: People= think of =0Athe Dow as an indicator of how the market is doing, so if your= index regularly =0Agoes up when the market is down, people might stop payi= ng attention to the Dow =0Aand you=E2=80=99ll be sad. =0A * Your index is n= ot a broad market-cap-weighted index of the whole market: It =0Ais limited = to 30 stocks, it has the word =E2=80=9Cindustrial=E2=80=9D in the name (tho= ugh that =0Adoesn=E2=80=99t mean much), and most amusingly, because it come= s from a pre-computer =0Aera, it is weighted bydollar stock price rather th= an market cap. =0AAnd so the assignment is =E2=80=9Ccan you find 30 big sto= cks and weight them by stock =0Aprice and get something that tracks the S&P= 500pretty well,=E2=80=9D and the answer is =0Ahistorically =E2=80=9Csure w= hy not.=E2=80=9D But not right now.James Mackintosh writes <>:=0A=0AFar fro= m tracking the S&P 500 index of the top U.S. companies, the Dow Jones =0AIn= dustrial Average for the past two years has been left in the shade. It lagg= ed =0Abehind the S&P by more than 10 percentage points in 2023 and 2024, a = dismal =0Aperformance matched in only two years since the S&P 500 was intro= duced in 1957. =0A=E2=80=A6=0A=0AExcitement about artificial intelligence h= as driven the Magnificent Seven =0Astocks of Alphabet, Amazon.com, Apple, M= eta Platforms, Microsoft, Nvidia and =0ATesla to make up almost a third of = the S&P 500. Moves in the S&P are dominated =0Aby whether it is a good day = or a bad day for Big Tech. But in the Dow, these =0Aseven make up only 13.9= %, with Meta, Tesla and Alphabet missing altogether.=0A=0AInstead, the Dow = gives five stocks that barely matter to the market as a whole =0Athe same w= eight that the Mag 7 have in the S&P. Aside from Microsoft =0A(third-bigges= t in the Dow, as in the S&P), the five-biggest Dow stocks are =0AGoldman Sa= chs, UnitedHealth, Home Depot, Caterpillar and Sherwin-Williams. =0ATogethe= r they are 32% of the Dow, but make up a tiny 2.6% of the S&P.=0A=0AWhat mo= ves the S&P matters relatively little to the Dow, and increasingly what =0A= moves the Dow matters even less to the S&P.=0A=0ARight now there are seven = important stocks and several hundred unimportant =0Astocks, and if you get = the balance wrong your index won=E2=80=99t track the market.=0A=0AI don=E2= =80=99t know how much this matters. Not that much money is indexed to the D= ow. =0ASurely the main job is to keep peopleciting the Dow, which does not = necessarily =0Arequire minimizing tracking error.=0A=0AAlso, there is a lot= of complaining <> about how concentrated the stock market =0Ais right now:= The Magnificent Seven account for a lot of the S&P 500, not =0Abecause the= S&P is flawed but because it accurately reflects the outsized =0Aimportanc= e of those companies in the universe of US public companies. But a lot =0Ao= f people worry about this concentration: Investing in a diversified index f= und =0Anowadays mostly means betting on demand for Nvidia chips, which migh= t feel like =0Anot a very diversified bet. A pitch like =E2=80=9Cthis is a = broad index of blue-chip =0Acompanies, but it=E2=80=99s not all concentrate= d in AI stocks=E2=80=9D is actually pretty =0Aappealing=3F=0A=0A=0AMetaplan= et=0A=0AIt can=E2=80=99t really be the case that =E2=80=9Cput $100 of Bitco= in in a box and sell shares =0Aof the box for $200=E2=80=9D is a viable str= ategy foranyone, but it works in huge size =0Afor Strategy Inc. (formerly M= icroStrategy Inc.), and it is really the =0Adefinition of =E2=80=9Cnice wor= k if you can get it <>.=E2=80=9D Lots of people want it. Here=E2=80=99s a= =0AFinancial Times story <> from last week about =E2=80=9Cthe MicroStrategy= copycats: =0Acompanies turn to bitcoin to boost share price,=E2=80=9D andw= e talked last month <> =0Aabout a crypto thing called =E2=80=9CFartStrategy= =E2=80=9D that copied the essential =0AMicroStrategy idea =E2=80=94 put $10= 0 of crypto in a box and sell the box for $200 =E2=80=94 =0Abut modified it= by (1) making the box a crypto protocol rather than a public =0Acompany an= d (2) putting FartCoin in the box.=0A=0AI wrote at the time: =0A=0AIt=E2=80= =99s not clear that you can do this. MicroStrategy can do it. Why=3F What i= s =0Aspecial about MicroStrategy=3F=0A=0AAnd I gave some answers that boile= d down to (1) Strategy was early to this =0Atrade, (2) Strategy issmart abo= ut it and (3) =E2=80=9Ca big US non-financial public =0Acompany=E2=80=9D is= actually a very nice box to put Bitcoins in. People =E2=80=94 US retail = =0Ainvestors with brokerage accounts, US institutional investors with a man= date to =0Abuy only common stocks, some index funds =E2=80=94 can invest in= a public-company box, =0Abut might not be able to invest in Bitcoin direct= ly, or perhaps in a Bitcoin =0Aexchange-traded fund, Bitcoin futures, etc. = And so Strategy can trade at a =0Apremium to its underlying Bitcoins becaus= e it is offering Bitcoin exposure to =0Aan audience that, for whatever reas= on, can=E2=80=99t easily get it elsewhere.=0A=0AIf you are another US compa= ny, you can copy this, but it=E2=80=99s not clear that it =0Awill work: Peo= plecan get their US-public-company-flavored Bitcoin exposure =0Aelsewhere. = (From Strategy. [8] <>) But surely there are other niches to fill. =0AFor = instance, aJapanese-public-company-flavored box <>:=0A=0AShares of Metaplan= et Inc. are up around 4,800% over the past 12 months, the =0Alargest gain a= mong all Japanese equities in that period and one of the highest =0Agloball= y, according to data compiled by Bloomberg. ...=0A=0AMetaplanet is one of a= number of outfits around the world that aim to emulate =0Athe success of M= ichael Saylor=E2=80=99s Strategy, formerly known as MicroStrategy Inc. =0AT= he Tysons Corner, Virginia-based company has morphed into a leveraged Bitco= in =0Aproxy and behemoth after accumulating more than $45 billion of the to= ken.=0A=0AMetaplanet=E2=80=99s CEO, former Goldman Sachs equity derivatives= trader Simon =0AGerovich, said he was drawn to the idea after hearing abou= t Saylor=E2=80=99s strategy =0Aon a podcast. He=E2=80=99d been running Meta= planet, formerly Red Planet Japan Inc., as =0Aa hotel developer since 2013,= but shifted to a =E2=80=9CBitcoin-first strategy=E2=80=9D in =0Aearly 2024= after a pandemic slowdown forced the company to shutter all but one =0Aof = its hotels. =E2=80=A6=0A=0AA large chunk of Metaplanet=E2=80=99s retail sha= reholders bought shares via the Nippon =0AIndividual Savings Account (NISA)= program, which Japan=E2=80=99s government revamped in =0Aearly 2024 to enc= ourage citizens to invest their savings for long-term growth =0Aand retirem= ent. =E2=80=A6=0A=0ACapital gains on direct Bitcoin purchases are subject t= o taxes of up to 55% in =0AJapan, making investing in stock proxies like Me= taplanet via NISA a cheap and =0Aconvenient option for small-scale and firs= t-time buyers.=0A=0AOne long-term possibility here is =E2=80=9Ccrypto gets = so normalized and mainstreamed =0Athat all of these weird proxies for it go= away, or at least stop trading at a =0Apremium,=E2=80=9D but there are a l= ot of fortunes to be made before that happens.=0A=0A=0AThings happen=0A=0AB= lackRock Now Wants to Become Private Equity=E2=80=99s Key Financier <>. US = Inflation =0A<> Tops Forecasts, Bolstering Case for Fed to Hold. Effort to = Save VC Tax Break =0A<> Has Become Familiar, Nerve-racking Ritual. Microsof= t-Backed Startup Raises =0A$160 Million forForest Carbon Removal <>. Fearin= g Trump, Wall Street Sounds a =0ARetreat onDiversity Efforts <>. Office att= endance <> is becoming a performance =0Ametric. USPrivate School Tuition <>= Nears $50,000 as Inflation Lifts Costs. =0ATrump=E2=80=99s Sons BackFriend= =E2=80=99s Penny Stock <>, Spurring 84% Price Jump.=0A=0AIf you'd like to g= et Money Stuff in handy email form, right in your inbox, =0Apleasesubscribe= at this link <>. Or you can subscribe to Money Stuff and other =0Agreat Bl= oomberg newslettershere <>. Thanks!=0A=0A[1] See Section 3(a)(68) <> of the= Exchange Act (defining =E2=80=9Csecurity-based =0Aswap=E2=80=9D) andSectio= n 1a(47) <> of the Commodity Exchange Act (defining =E2=80=9Cswap=E2=80=9D)= . In =0Aparticular a swap includes =E2=80=9Cany agreement, contract, or tr= ansaction =E2=80=A6 that =0Aprovides on an executory basis for the exchange= , on a fixed or contingent =0Abasis, of 1 or more payments based on the val= ue or level of 1 or more =E2=80=A6 =0Asecurities.=E2=80=9D It also includes= *options* transactions, and this bet is =0Aessentially abinary (or digital= ) option <>.=0A=0A[2] Here is a 2023 US Securities and Exchange Commission = final rule <> about =0Athe =E2=80=9CProhibition Against Fraud, Manipulation= , or Deception in Connection with =0ASecurity-Based Swaps,=E2=80=9D but act= ually you don=E2=80=99t need the new rule: =E2=80=9CThe =0ADodd-Frank Act [= of 2010] amended the definition of =E2=80=98security=E2=80=99 in section = =0A3(a)(10) of the Exchange Act and section 2(a)(1) of the Securities Act t= o =0Ainclude security-based swaps. As a result, security-based swaps, becau= se they =0Aare securities, are subject to the general antifraud and anti-ma= nipulation =0Aprovisions of the Federal securities laws, including sections= 9(a) and 10(b) of =0Athe Exchange Act, and 17 CFR 240.10b-5 (=E2=80=98Rule= 10b-5=E2=80=99) thereunder.=E2=80=9D Section =0A10(b) and Rule 10b-5 are w= hat prohibit insider trading.=0A=0A[3] You don=E2=80=99t, like, buy $1 mill= ion of stock: The bet is a digital option, so =0Ayour hedge will be dynamic= , nonlinear, and a little weird. But Bloomberg (page =0AOV) will happily pr= ice a digital stock option for you, and give you a delta, =0Awhich is the a= mount of stock you should buy. In any case the CFDs in the actual =0Acase a= re delta-one bets, so they could be (statically) hedged by simply buying = =0Athe underlying shares.=0A=0A[4] The Tether and bribery examples are abou= t the US becoming less interested =0Ain enforcing its laws abroad, but also= other countries might be less interested =0Ain enforcing US laws. (=E2=80= =9CAmerica First Is Quickly Becoming America Alone <>,=E2=80=9D =0Awrites m= y Bloomberg Opinion colleague Andreas Kluth.) People have speculated =0Afor= years that America=E2=80=99s use of the dollar system to enforce its polic= y goals =0Aabroad might backfire; =E2=80=9CPaper Soldiers: How the Weaponiz= ation of the Dollar =0AChanged the World Order <>=E2=80=9D is the title of = my Bloomberg colleague Saleha =0AMohsin=E2=80=99s book on the subject.=0A= =0A[5] It is, for instance, roughly Warren Buffett=E2=80=99s financial advi= ce <>.=0A=0A[6] Disclosure: This was my approach to investing for many year= s. I was a =0Aself-directed Vanguard customer, using its website to buy and= hold boring index =0Afunds. In recent years I have moved to a more full-se= rvice platform for reasons =0Asuggested in the Financial Times story, thoug= h I feel sort of sheepish about =0Athat. It feels like =E2=80=9Cbuy five in= dex funds from the Vanguard website=E2=80=9D might be =0Athe aesthetically = correct choice, *for me*.=0A=0A[7] In some efficient-markets the-market-por= tfolio-is-optimal sort of expected =0Away; maybe your adviser will actually= get better returns.=0A=0A[8] I suppose you could market a lower premium, b= ut that seems like =E2=80=A6 not in =0Athe spirit of the thing. You want a = higher premium! Your investors might want a =0Ahigher premium!=0A=0A=0A <> = =0A=0AFollow Us <> <> <> Get the newsletter <> =0A=0A=0ALike getting t= his newsletter=3F Subscribe to Bloomberg.com <> for unlimited =0Aaccess to= trusted, data-driven journalism and subscriber-only insights.=0A=0ABefore = it=E2=80=99s here, it=E2=80=99s on the Bloomberg Terminal. Find out more ab= out how the =0ATerminal delivers information and analysis that financial pr= ofessionals can=E2=80=99t =0Afind anywhere else.Learn more <>.=0A=0AWant to= sponsor this newsletter=3F Get in touch here <>.=0A=0A You received this = message because you are subscribed to Bloomberg's Money =0AStuff newsletter= . =0AUnsubscribe <> | Bloomberg.com <> | Contact Us <> =0A=0A <> | <> = =0ABloomberg L.P. 731 Lexington, New York, NY, 10022 =0A --_----eMQGFv0GzGeBtOOmDI7xnw===_20/92-27954-5F3FCA76 Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="UTF-8" = = Money Stuff<= /title> <!--[if (mso)|(mso 16)]><style type=3D"text/css">a{text-decoration:= none}</style><![endif]--> <style>body{width:100%;-webkit-font-smoothing:ant= ialiased;font-family:Helvetica,Arial,sans-serif;font-size:16px;line-height:= 150%;margin:0;padding:0}img{max-width:550px}.body-component a:visited{color= :#000;text-decoration:none!important;border-bottom:1px solid #000;backgroun= d-color:#ccc}.body-component h1 a:visited{text-decoration:none;color:#000}@= media only screen and (max-width:480px){.lihide{display:none!important}.lis= how{display:block!important;width:auto!important;overflow:visible!important= ;float:none!important;max-height:inherit!important;line-height:inherit!impo= rtant}.email-ssl-image{width:100%!important;height:auto!important}.body-ima= ge img{width:100%!important}.logo-image{width:100%!important}}</style></hea= d> <body style=3D"width: 100%; -webkit-font-smoothing: antialiased; font-fa= mily: Helvetica, Arial, sans-serif; font-size: 16px; line-height: 150%; mar= gin: 0; padding: 0;">=0D=0A<div style=3D"color:transparent;visibility:hidde= n;opacity:0;font-size:0px;border:0;max-height:1px;width:1px;margin:0px;padd= ing:0px;border-width:0px!important;display:none!important;line-height:0px!i= mportant;"><img border=3D"0" width=3D"1" height=3D"1" src=3D"https://post.s= pmailtechnolo.com/q/cupZuziPZE08yObvnPipTQ~~/AARGbBA~/5CuVPjzXasfAovv0zOfvU= ojZKnorP1oChcmXY9bh4V3XtAHo36ZsMpmF4-EtMkk-jwohgAyOcXC4pTMWVSOUzA~~" alt=3D= ""/></div>=0D=0A<span style=3D"color:transparent;visibility:hidden;display:= none;opacity:0;height:0;width:0;font-size:0;"></span><img src=3D"https://li= nks.message.bloomberg.com/s/eo/WVv9RymsPiGamH7-VKBPXpNCDuDwvM_myvd8ae9nyXN6= LUsGCA8FiiaHRSOsPkHqY9T_MJeVznV2M3nF87I0wbb9SotE5w-3KuNvB0G-8lYow9EI2w9Owz3= lN_usy5UwMKtF3O_GshtxAKxGiLdmxEjbqjud0PcoOpnaEbcxNUBAzSdbCbjbSlkhQ__hEIoQMS= 0eZgM8oi6OJyTJ36rQpBuUTP1m0JOk2IIa/OFmk6hIUSc-eEHJ-YecrK9gN2ksr2hPZ/6" styl= e=3D"border:0;width:1px;height:1px;border-width:0px!important;display:none!= important;line-height:0!important;" width=3D"1" height=3D"1"/> <table id=3D= "wrapper" width=3D"100%" align=3D"center" border=3D"0" cellpadding=3D"0" ce= llspacing=3D"0" style=3D"-webkit-font-smoothing: antialiased; font-family: = Helvetica, Arial, sans-serif; font-size: 16px; max-width: 550px; width: 100= % !important;"> <!--[if mso]><center> <tr><td> <table border=3D"0" cellpadd= ing=3D"0" cellspacing=3D"0" width=3D"550"><![endif]--> <tr> <td style=3D"bo= rder-collapse: collapse; mso-table-lspace: 0pt; mso-table-rspace: 0pt;"> <d= iv style=3D"display: none; max-height: 0px; overflow: hidden;"> Here=E2=80= =99s an insider trading hypothetical for you. I have a golf buddy who is a = senior executive at a public company. One day on the course, sh </div> </td= > </tr> <tr> <td style=3D"border-collapse: collapse; mso-table-lspace: 0pt;= mso-table-rspace: 0pt; padding-bottom: 15px;"> <table width=3D"100%" borde= r=3D"0" cellspacing=3D"0" cellpadding=3D"0"> <tr> <td align=3D"center" styl= e=3D"border-collapse: collapse; mso-table-lspace: 0pt; mso-table-rspace: 0p= t; padding: 20px 0px 10px;"> </td> </tr> <tr> <td align=3D"center" style=3D= "border-collapse: collapse; mso-table-lspace: 0pt; mso-table-rspace: 0pt; p= adding-bottom: 5px;"> <a href=3D"https://links.message.bloomberg.com/s/c/iD= zXokbjMaFXkQVMuxlMgk17HEJt1Uk0OZgwhVM9YfI3Jr9u0RKGi-dlL75lws_oC9_Rdnab5aD9n= 9EyMft_I8iSR07javX03rvaPaR9ETPlKOkA_MFH2V4OKmljqrUwiVHSnQBP_F72hMgE5V0aFeHe= CcZDIFacB3IfpNc-HJjUE2tKiunGhYWsb6nwVmItjNxhTdiznZsdbOxJnsq2PMWnUy3LBfU4I-i= qgRYFOf_7OiSEfSeZLNb2yBIoZU-yBvsqkXdu37tVskgROcv_YT9w3P7j1egstgB3RrI3OImbe6= 7kxxuyuns-Mo8qFQhhQWvS5tRaKg20cFux-w8Q6qHzGVW0lYzWDgRQ2cLwNl4GY3PO0tIu0BesI= Q/KQGq7tdcvWvZGHL6Yan_ICkX7xRKU2td/6"><!--[if mso]><table width=3D"550"><tr= ><td><img alt=3D"Bloomberg" src=3D"https://assets.bwbx.io/images/users/iqjW= HBFdfxIU/img7rZ7yYddA/v0/-1x-1.png" width=3D"550"/></td></tr></table> <div = style=3D"display:none"><![endif]--><img class=3D"logo-image" src=3D"https:/= /assets.bwbx.io/images/users/iqjWHBFdfxIU/img7rZ7yYddA/v0/-1x-1.png" border= =3D"0" alt=3D"Bloomberg" style=3D"max-width: 550px; width: 530px; display: = block;"/><!--[if mso]></div><![endif]--></a> </td> </tr> </table><table bor= der=3D"0" cellpadding=3D"0" cellspacing=3D"0" align=3D"center"> <tr> <td co= lspan=3D"2"> <a href=3D"https://links.message.bloomberg.com/s/c/gv06f7SGx-Q= C-LQsU-cjQ2qoUjK_3EXFUlvzLBc7ORUUfs0tY5tH5Q7I4O0frr35mpYIg5pv8XqMhJCi7Wr38I= swNI2vN_zDAAE2rL7s0VddnJLtrdly_1qzZyL5Hwpc6XsQfGKqSHw1-q9IwGPg9uL4UKShbXJG0= emySeY7TxLRVRWt9CZjYsolDAA-n1KQJVg1kmjCBr-ITY6up8JYolCMdma4RZB0FoQfYqhl_rEe= qouVwPnXPdBrhTyUqJv48CuMT5NqQGyjA6G0PTjx60p727lidx2Z3cXpmx3UHGnMnmOB2KnUHXT= cYb-Xx-MAzuvUMsUX6fv2OIsTKZM2GglSy62SQayZ4HECJ0hOT5N6rsZ1mX5Dg23heH1xyCjQuA= 85TMlw3FBPJpS3/pqs9lU6OCAAOYlIC_r7j0M_R078GOHmE/6" rel=3D"nofollow"> <img s= rc=3D"https://sli.bloomberg.com/imp=3Fs=3D825881&stpe=3Ddefault&li=3D125963= 46&m=3D1e618ca1ed3ef770bf0b25ef3db247f4&p=3D02122025" border=3D"0" width=3D= "108" style=3D"width: 108px !important; display:block"/> </a> </td> </tr> <= /table> </td> </tr> <tr> <td style=3D"border-collapse: collapse; mso-table-= lspace: 0pt; mso-table-rspace: 0pt;"> <table width=3D"100%" border=3D"0" ce= llspacing=3D"0" cellpadding=3D"0"> <tr> <td style=3D"border-collapse: colla= pse; mso-table-lspace: 0pt; mso-table-rspace: 0pt; line-height: 150%; paddi= ng: 0 10px;"> <table width=3D"100%" border=3D"0" cellspacing=3D"0" cellpadd= ing=3D"0"> <tr> <td style=3D"border-collapse: collapse; mso-table-lspace: 0= pt; mso-table-rspace: 0pt;"> <h2 style=3D"font-weight: bold; font-family: &= quot;Arial Black", Arial, Helvetica, sans-serif; letter-spacing: -1px;= font-size: 20px; border-bottom-width: 1px; border-bottom-style: dotted; ma= rgin: 0px; padding: 16px 0px 5px;">Insider betting</h2> </td> </tr> </table= > <p style=3D"margin: 16px 0;">Here=E2=80=99s an insider trading hypothetic= al for you. I have a golf buddy who is a senior executive at a public compa= ny. One day on the course, she tells me: =E2=80=9CMy firm is going to annou= nce a takeover of Anacott Steel at $15 per share;=C2=A0you should buy some.= =E2=80=9D I go back to my office, open up my brokerage app, and am about to= buy 10,000 short-dated out-of-the-money call options when I think: =E2=80= =9CWait, no, this is insider trading, I will get in trouble for this.=E2=80= =9D I close the app.</p> <p style=3D"margin: 16px 0;">Instead, I pick up my= phone and call you. =E2=80=9CHey,=E2=80=9D I say, =E2=80=9CI=E2=80=99ll be= t you a million dollars that Anacott Steel closes above $13 this Friday.=E2= =80=9D You are a degenerate gambler and have never heard of the concept of = adverse selection, so you say =E2=80=9Cha, Anacott Steel is at $10 now, thi= s is easy money, it=E2=80=99s a bet.=E2=80=9D The next day, the takeover of= fer is announced, the stock goes to $14, and I collect $1 million from you.= =C2=A0</p> <p style=3D"margin: 16px 0;">Did I commit insider trading=3F Oh = man is this not legal advice, but my gut is: yes=3F Technically I didn=E2= =80=99t trade any stock =E2=80=94=C2=A0I just made a bet with you =E2=80=94= but I=E2=80=99m not sure that matters. Our bet is, arguably, a =E2=80=9Cse= curity-based swap=E2=80=9D: We have agreed to exchange payments based on th= e future value of a security (the Anacott Steel stock).<a href=3D"#footnote= -1" style=3D"color: #000000; text-decoration: none !important; border-botto= m-width: 1px; border-bottom-color: #000000; border-bottom-style: none !impo= rtant; background-color: transparent !important; display: inline-block;"> <= span>[1]</span> </a> And insider trading in security-based swaps counts as = insider trading.<a href=3D"#footnote-2" style=3D"color: #000000; text-decor= ation: none !important; border-bottom-width: 1px; border-bottom-color: #000= 000; border-bottom-style: none !important; background-color: transparent !i= mportant; display: inline-block;"> <span>[2]</span> </a></p> <p style=3D"ma= rgin: 16px 0;">In real life there is also a more practical reason to consid= er this insider trading. In real life, when you get a phone call from me as= king to bet $1 million on the price of Anacott Steel, you might=C2=A0<em>he= dge=C2=A0</em>that bet. You might agree to the bet with me and hedge it by = buying some Anacott Steel stock (or options): If the stock goes up, you wil= l lose the bet but make money on the hedge, and if it goes down, you will w= in the bet but lose money on the hedge.<a href=3D"#footnote-3" style=3D"col= or: #000000; text-decoration: none !important; border-bottom-width: 1px; bo= rder-bottom-color: #000000; border-bottom-style: none !important; backgroun= d-color: transparent !important; display: inline-block;"> <span>[3]</span> = </a> You wouldn=E2=80=99t necessarily do that if you were a degenerate gamb= ler, but realistically if I am calling someone to bet on the future=C2=A0pr= ice of a stock, I=E2=80=99m probably calling a=C2=A0<em>bank </em>or other = trading firm, and the bank will probably hedge. Therefore, while my bet is = not an=C2=A0<em>actual=C2=A0</em>insider trade in Anacott Steel stock, it p= redictably=C2=A0<em>causes</em> trades in Anacott Steel stock. It=E2=80=99s= not just between us; somebody else =E2=80=94=C2=A0some seller of the stock= =E2=80=94=C2=A0is indirectly on the wrong side of my inside information.</= p> <p style=3D"margin: 16px 0;">Now let me change the hypothetical slightly= . Everything stays the same, except that I am in London and you are in Lon= don. Anacott is in <a href=3D"https://links.message.bloomberg.com/s/c/r0gKO= fJCOK-tsmFWS4pOVJbJPFIWB-buhQofOJEcM2FC1wlaP8bJdxenRswYxoLFyQyqk0_SmpOe62T2= UPzfmYeCzoV9dkEf9nNqDQAjzAXkVxdvzNwQgjMW3dX0wz4BH1lvBYOx0A6T1l5I8RuOyiWSXz7= B2C2dXDnnsVXp-Megk8hEMBvQWihVAb4MFPMyRPUhQmijJIyQQeNUPGEdWvWoMwjuNS2R6aAkfG= -IJOonJa94IgEvF35ezd2RtoTi-kemH_2PWHzXHTRXYEdEDjHqw-SjWXPqEcX2p9mjKhkGEcGwo= 675zwfXiXhLYK_qLoE5vBXtRaToJOXa0-aRegaMLLZLkg4yfFoyCjTUt6UQ0vilMJMMYxWN_cpt= Gqxl5rwZcereMzYoTjXKNV5J9bBhTn2wp3YnJBt7g9KVHgvxMcIYZJTud7rRCCW1mkS6bg/AhPd= ATjeg_h6LzZWLuh7VRj4LVHNeSOk/6" itemprop=3D"StoryLink" itemscope=3D"itemsco= pe" target=3D"_blank" style=3D"color: #000000; text-decoration: none !impor= tant; border-bottom-width: 1px; border-bottom-color: #000000; border-bottom= -style: solid; background-color: #ccc;">Erie, Pennsylvania</a>, and its sto= ck trades on the New York Stock Exchange, but our=C2=A0<em>bet=C2=A0</em>is= in London. Is that insider trading=3F Or, rather, if it=E2=80=99s insider = trading,=C2=A0can anyone do anything about it=3F Specifically, can US feder= al prosecutors do anything=C2=A0about it=3F</p> <p style=3D"margin: 16px 0;= ">This is extra super not legal advice <a href=3D"https://links.message.blo= omberg.com/s/c/1PEvC7EQWdV0YfzclyuijEAc4J6lupipomSHyMuJoE7cJmJ5flGBV8CmGao-= PnPs-F9Jyb13FaIG_UNDdrMvw0pc1iUjWSskfs_JhLgE8paDsibhEJH2Bca_haP3DNg-iuuNJPz= MS66bhP-JypdE2fU6HiP21b8pJ4z-0NBoiKk1XD1aZCPIPDLgGqlKyNMn65sPw0-W-BSRpyHrD4= l6mAqzM40HLMg4NaOhQFF9ku3H7kBWqJtZ5B59u1XUx3VQEtj2Up_EbmH0QcqbT_sh9BJVU2vIL= C6R3e2k5K8-kFWbMKB7q3BvMthPsyZWNQ570BmobP4MQYJ4KJDnVGecu-KAqr_sDqJnifLU_bA6= IchMkDymnRMgnJApXQ/-syRUn3ewqJKKknBQHDeyi0GGB3b6joJ/6" itemprop=3D"StoryLin= k" itemscope=3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-= decoration: none !important; border-bottom-width: 1px; border-bottom-color:= #000000; border-bottom-style: solid; background-color: #ccc;">but</a>:</p>= <blockquote> <p style=3D"margin: 16px 0;">A trader accused by the US of ma= king nearly $2 million from insider dealing won a last-ditch attempt at the= UK Supreme Court to block his extradition, after the country=E2=80=99s top= judges ruled that the alleged wrongdoing took place outside the US.</p> <p= style=3D"margin: 16px 0;">Joseph El Khouri, who holds dual Lebanese-Britis= h citizenship and lives in London, was facing criminal charges that he trad= ed on inside information. US prosecutors alleged that the trader, an=C2=A0a= vid poker player, gave lavish gifts to middlemen, including expensive hotel= stays in New York, and a charter yacht in Greece, in exchange for tips as = part of an international insider trading conspiracy.</p> <p style=3D"margin= : 16px 0;">British courts first ruled that he could be extradited in 2021.<= /p> <p style=3D"margin: 16px 0;">But the trader successfully argued that th= e overwhelming majority of the alleged misconduct took place in the UK and = that the US lawyers were wrong to say that the impact of the trading was li= kely to have affected US markets. =E2=80=A6</p> <p style=3D"margin: 16px 0;= ">El Khouri was alleged to use the insider tips to trade in contracts for d= ifference.=C2=A0</p> </blockquote> <p style=3D"margin: 16px 0;">Here are th= e <a href=3D"https://links.message.bloomberg.com/s/c/8R4QdRldjLnxSti-IN5Phe= _7wv3frXSvS60ygHQ9N9hyCpOLwrC_K4xBuAZe82ozyTV2TK5E6JidXDqZKcKs-6hP2k7vZAPp6= PlJBWqz8XVzoV1spk-7psptl--pVje9NFINm7LHy33O_UFpb4LpfNzl9NBEWs8VX_gYSIIBiIOd= sAiXKa9dFgG2khc7cNfGUUy9Hbc2RDeplHVYUYD9TbYzJv2NYMSLU3KzMNaI4e-WsmxsKl7MlqG= ArYvBDCaUrSxZISVVyUhSAA_m4IoE5JP5NuPPm_gU8IzAKyoR5WHXRqRIE9luIF9owd2V78Xfoq= wEcZHz9r4etdZjd04FDAB2odlL_6pNWwACJPlwJ0-nZNqggbdigOrylFPZrLbRvMlbAV6Ji94C4= Svj2AvLKgjBNUYM-u6eQ1cIt8ptYaNW6NAqWvoRjjlgqoHMgrMNziHEWym8SSaUuewgjar28RSc= rmsqKP0V0h8XWyv_GtCmLSQSAEfV4-k0KrRtMO2INVJo6AAjK9y9KPglNj6BrdrEFk7KQtVFXqx= btAAGclyLxY4O9HkQlCkjo2UV7cF-xzvPOmQXNUqnkwFAkiIgLG7ke3UIOfI/Wv_886WccMUc95= C9NYx8mzGQbiMhPtbO/6" itemprop=3D"StoryLink" itemscope=3D"itemscope" target= =3D"_blank" style=3D"color: #000000; text-decoration: none !important; bord= er-bottom-width: 1px; border-bottom-color: #000000; border-bottom-style: so= lid; background-color: #ccc;">original charges</a>=C2=A0and=C2=A0<a href=3D= "https://links.message.bloomberg.com/s/c/SphUseHfd0JvnZKOziQ4zB_cnOi4ZGkecR= yL7vKQ25Vdqg1XV-KGSVs1-ZWBEZilGclPNYFTaCFk_2x0AaDqgvDLIqgWBHaSAiu1AkBU6-3vJ= LzC8qB61xxoE5-wD7jR5r95u5Va5JBOsTm4UIh5G5rPKRURUXIA1qXQHqSwVLZnJkTMpOeJiK3n= TVoqL-o0tIyQW8l1F6miVKglZn2eYDhYgi7P44jw2xaRnv3lgXH4ElI6VHp_xQ3fMG2__N12rfG= 3db4fEKG_NUjVhoarWEx4pbTCaX54pNWXPZDQww7jt3u7gHqSLORz9i0RqDhgDAAUOHPCVXAODn= -jnsiq-cb_RFFdHFFeB9tKIEiKQ9G18QWLw2Rlt6BsXM8oYakjKgiPmJjj-1ZuK45zkaX7JUyw1= EL2TyJDroiKoDfo1-gDAGhhyVxKI5hCMlDzjJx4VhIwoxH3X9S3DDSBhs14EcTzkZjRbvjWHJSS= zWM/_sZ2eol-B0Bg0RloFbuS3CxIO-yayOdB/6" itemprop=3D"StoryLink" itemscope=3D= "itemscope" target=3D"_blank" style=3D"color: #000000; text-decoration: non= e !important; border-bottom-width: 1px; border-bottom-color: #000000; borde= r-bottom-style: solid; background-color: #ccc;">the 2019 indictment</a>, wh= ich says that he traded <a href=3D"https://links.message.bloomberg.com/s/c/= 53VW79GIWhQQ5RYYVVdRa457NtqWXN9_qWWPbR3TBTrD2EJkWFGwxrZC-ADw4Q0riV8WWr9RZfU= ZLfnrFoI1a-1W9y_wjDdAYE0_IjM8JQ8nL2SeV4X4-BGMDe0RCvYnz8wi6KuZCVhp_L6kQ_nqjA= 7T2tIlKX90eX0rqK3bsR8bF7-vmWyaqYm59ITzQOHtEXvbv44XptcIdo68LSFkeS97aFjVpEb3s= JYIJR6VlCBhF2e3cP9NhpkG5mlfnCnk19MHfrGKgr5gIexj_IKcmicOKB2OS70xaBmsnLsfU5bM= l5WlWksgMtsD_Q-ZCp7QJd0PvYWwgDDI0plE6yHU3oBz23ZrjC_m0zMRW6gtJYzM_DvCv9WuZss= yK_4aPR8czLDNpjxDpvJcCFxnAWrKWEttAp_yxO-y0HgzAMfvhWdyyYTK-gAcqZ083V2kjOKirM= OzakmZL6zVOziMd0DZDy2vPJSH214NdzTy-8QnQk_CFdsgR-q6GpIFYoinLBfqsMjN0tMEH1V4g= RmC_Ww/PHSQnGM91gNfx67fGCcr3JntLjdgF3zd/6" itemprop=3D"StoryLink" itemscope= =3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-decoration: = none !important; border-bottom-width: 1px; border-bottom-color: #000000; bo= rder-bottom-style: solid; background-color: #ccc;">contracts for difference= </a> =E2=80=94=C2=A0similar to=C2=A0total return swaps, bets on the stock p= rice =E2=80=94=C2=A0in the UK based on US stocks. If you use inside informa= tion to bet on the prices of US stocks in the UK, what does that have to do= with US prosecutors=3F Maybe nothing: If British people want to trick othe= r British people, that=E2=80=99s between them and their government, not the= Southern District of New York. Or maybe something: If British brokers sell= CFDs to British traders and then hedge those CFDs by trading=C2=A0the unde= rlying stock (in the US), then that does seem like something US prosecutors= might care about. But not enough for the court.</p> <p style=3D"margin: 16= px 0;">I am mentioning this mostly because I=C2=A0can never resist a fun=C2= =A0insider trading puzzle. But there is=C2=A0<em>perhaps=C2=A0</em>a broade= r theme here. I have gotten used to the idea that, if anyone in the world d= oes any sort of financial transaction that the US government doesn=E2=80=99= t like, that=E2=80=99s a crime in the US. If you are a <a href=3D"https://l= inks.message.bloomberg.com/s/c/U-aL8YiES1xg02oEMFNJ5mZpmC8c1CKy-EiWeS7JgDhd= nU5_p801ty1X7g1_NOPBrlLN7i4-TD2Zn1bkDUg9s5GUcmvV-WKNGfy40y09NrFy_PGsmGT5jxr= Mw1qR_ajE72ek5LWnMTzsepj700WDDfniK4J2sC-2cc8nbPn3fR6FR213kGNwpzI-druqBSZrl9= mpyZRt4Q6TVa4CHcNuoHJ73M36so5z6zIg7i4NqeUTTs6SGpe-j5qNbgYo_01r03xund07u0Rct= 1Bz5t9xqF7j9REdnSu8m5fO7JkP8D2-VCJ8Um5osW0gH6dvV8gZ397d5ECrLPVaBufeOFcIESMA= 8YAWMzbU_p1ASzrKyhl1lu8CTTBErMi3uGs/AkDq0lcZMgGzJL3zmxjAQ6ogI3a6re6R/6" ite= mprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" style=3D"colo= r: #000000; text-decoration: none !important; border-bottom-width: 1px; bor= der-bottom-color: #000000; border-bottom-style: solid; background-color: #c= cc;">French bank</a> (or a <a href=3D"https://links.message.bloomberg.com/s= /c/NK3VZSYHtP0uOaBh-dDAO-HLEhgNRK2FCPZDIuIK98JNJI_-Q37_3gzzO5FWkGyb0m1-VUUc= kGnLbRRyZhUHBHov74GNxJJAAYBe4B0hAurnnB-F_W3aZCRyPnEllAx5LUZYltmG03cdK8OHSop= g_e4nEvpR24DAEQS2XFDYtD4BGf57m7KXOZNTuFS3EEqz2FpFy6aN66HBSYn4ivQDFP5O7OvdRB= m_egxi7K7JZKkEozIeyfqhDW21brx9NSq1zAfCcYVMchCtvSGKNFPzzvDHGGoUIxweUusyW-dT4= 7U87AEiqapFmUhfgjeGqzBPrqMXvwlKzSB6CXrdJz5WcquXqpQSb3W7-tqAsa1FzmdUfu-cTrE8= jBpMgOU/G7H8YPDwR7zjUFGxJxKxI-jb0E0Q2LbY/6" itemprop=3D"StoryLink" itemscop= e=3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-decoration:= none !important; border-bottom-width: 1px; border-bottom-color: #000000; b= order-bottom-style: solid; background-color: #ccc;">stateless crypto exchan= ge</a>) moving money from a sanctioned Russian company to its Venezuelan su= pplier, the US legal and financial system will find a way to get you: You p= robably moved dollars, the dollars probably touched banking settlement syst= ems in New York, boom, you committed a US crime. Or if you are a <a href=3D= "https://links.message.bloomberg.com/s/c/3fOq5X9XQUszWAyS0CJ5OqJyzGv5mq4nln= 7NOmz3Nf6qmNo-MluumSXcuxaKTDg5il6b_0nhR8kFNMP3tLQOtFLOlqxYmN2QYowxQQl0ZQCIa= Grkllci4Le8qiM-4ZYFUBSv-1qvPPLZoz6yYfaT9hGc5OFMH0HBpztDXKWSuQ2M4u9hv5yd5PZX= getF35P7Jhgs7dK2RFe-_z3mjlMNWq6XLOFVvdo-ADBLunhQFcD6cv4L_bJrat72EQ7_wZmI4at= 2UwL7JiI9MFyb0-kChSGilFz5JCi0Xa49yU6j9CcOjoyAf4j750Cr7mjPgFbxOwYdm1fn2Sh30D= q7U6S-m2sVJWIhTFY5vr3ZGQv5TuT8lD4tbXNIteNxSeygtk3x_A6tkr25UtebfcxxvIJJxFfYq= l4SYzZkscdFuDcvf1p6b2rNExl29tmnuqEhkXhSPd2hjT2SJo2iOctpQ7w9zttOdEinEvVoAcPv= p4Fcskrm-TKwzSidndlxklUJxCjAL6tdkbrZWdN6KU3W9gsukyYauxMuoRZ2nyLDzukV-PEkmsf= XEc-kLeeuliXaZzOx78ey6MY1GfekOo--1z0QVIch4VqjDZqv6PBxGwpVGeumjhynD72REQSz/C= HpdPzdV0ruNcYYFWTCYBAWx1HMO9L0H/6" itemprop=3D"StoryLink" itemscope=3D"item= scope" target=3D"_blank" style=3D"color: #000000; text-decoration: none !im= portant; border-bottom-width: 1px; border-bottom-color: #000000; border-bot= tom-style: solid; background-color: #ccc;">Swiss commodities trading firm</= a> paying bribes to win contracts in Nigeria, that=E2=80=99s a crime in the= US too, and you=E2=80=99ll pay up. The US is a big powerful country with b= ig markets and the global currency, and it can exert its power to make fore= igners subject to its laws.</p> <p style=3D"margin: 16px 0;">Could that be = changing=3F This is just one case. But there are other shifts. We <a href= =3D"https://links.message.bloomberg.com/s/c/pBIRHBSVA1Qqp0JDtecLu_Lv-Oh2CrD= EcDoH703jbMJ6PWfxCgNJ_8jJJiLdifCUE7bliXuBZbteu1gmWBjF6jAFkkF_RTU0-hfVHfwbOQ= VKDRL00jNMgyyCz0q7OOymc6RU6QTXD9K47vlc88tyuyKn43OMXYh8w7iN78f3QtU2QDt7KAiDj= hphw1n9vMsQ98Lk6UujLjRrVVMYJKykfqxQJLrAeSs_nTIxDHCvZpA2-MCnbudM2eWji0mZv0Or= 1Z49GCGzvy0eX3aRT8WZZG3GteYWzuxzHG10OOMa7uVr-dSqXB6XhabQHTlEJW0pnNwTpk44God= L49OSuRhNbHTsnakVX3IyMm-bcE0OiCVnZs9SKblvbXgfTDI/KsM2_hho9-UfQDhbgXTdIDFYKy= kUrgE3/6" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" = style=3D"color: #000000; text-decoration: none !important; border-bottom-wi= dth: 1px; border-bottom-color: #000000; border-bottom-style: solid; backgro= und-color: #ccc;">talked</a> a few <a href=3D"https://links.message.bloombe= rg.com/s/c/SJNkHH1_gJL6d7pO7zgaXbVxZw0qSrT3o-ZkaxndzU46mVxl8LieUUWJ1vDKzMxv= O4NZN2-XbomVQT8U59qdd0zfe9NcdCJlZHDVCVAwU0Y_20GgtITEBfyAE7zuyWtzhXqRrFRkdy5= RSC5DXZeisLwE1i_291W3T34fZVyDaqJfzcl_TTTyQlY6Z5gWiNAJNx_fnlImiDOBgXpZTDXxDI= hFqQNWyG4dN30z1CqOyUxgm9tZyBEF0quIXb_dVj9FXKSYB3DRr0RINxgvsn76R0Awhlz0rqaXg= _p2kA5qjSUuCgHGUronBI_dgwcJiNIRH6c3Y08aV2vv-7RKTYQj0yhC44M2ZhsNZvz98d1lUOXZ= FIi-nmmglhXJCMM/KYcChJbKepB-WO52I0v11yfxqQGPMghj/6" itemprop=3D"StoryLink" = itemscope=3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-dec= oration: none !important; border-bottom-width: 1px; border-bottom-color: #0= 00000; border-bottom-style: solid; background-color: #ccc;">times</a> last = year about Tether, the stablecoin, as a way to transfer dollars without bei= ng subject to the legal risks of the US dollar system: If you want to send = dollars to Russian arms dealers, a US bank will stop you, and a French bank= will probably stop you, but stablecoins move on the blockchain and are mor= e resistant to US government interference. Last year, the US government did= n=E2=80=99t like that idea, but this year it might. (=E2=80=9CCommerce Nomi= nee Lutnick Is Backer of Outlaws=E2=80=99 Favorite Cryptocurrency,=E2=80=9D= was a <a href=3D"https://links.message.bloomberg.com/s/c/EEspMi4MCvUvKAtEI= c5P9LKM2Boj4GL9xYT5EF5xcT8Zyj65ZqMM1pBy5CiWdPeGuDORMCIO13glunKkQl8GFLJyPbN5= bEWqwNmY-TyAhcjElfMJwSeph0ozZ14C5TqZnFUDSdMFaTvND4RVxERQgNQfRhOSehKD5b5S5Fz= S3kl1pv1FUcbd0RAUUpcw57T7mbpgTtZZEzKytzR76CM1LKFU3LHG93z7o7cKqYfFZt1f3553lS= cSQ7KMDI9UTUrSQc2RIZr34fIU24cQPHep-qZdqelYZ12_MwjQa5QHtzzOF60AJorpxjC94uGIR= 1PJMRELmckckC21PX2RJ-3NCIh_cFE6C_p5GALgQKob04vpMdNQLMSub9W9RYA/J20uDA1lPFHy= 9nCbTYeAo14MlGNbveKJ/6" itemprop=3D"StoryLink" itemscope=3D"itemscope" targ= et=3D"_blank" style=3D"color: #000000; text-decoration: none !important; bo= rder-bottom-width: 1px; border-bottom-color: #000000; border-bottom-style: = solid; background-color: #ccc;">Bloomberg headline</a> last month.)=C2=A0</= p> <p style=3D"margin: 16px 0;">Or I mentioned that paying bribes abroad is= a crime in the US, but that=E2=80=99s only what the law says. But Presiden= t Donald Trump has issued an <a href=3D"https://links.message.bloomberg.com= /s/c/8eJHxu4_Bt8VX1JaEC16a9d63kYxMfd16RvguN_xxtQ-cdhCBkROkQZbA4G3PJKedRTG_m= bJchQXQUlhFnwTtvPlHwgdUjFxxzk0-hyQAE6N4R5fZsRzM_SbKak_BrT6GyDpP2Z2NFTg5uqRR= __pu6oluMnWJN-rie_703AI-jypK8-yJVLu4MMCKfIv144Jx0NviAgQf85H050f8eA7B0N74ShU= QONv-Kkcgq4BnGE_VHF70ewD8eykGzeatMxyzABCZrq2Y_4r0nu34SWO1p081069StuW4qyRtWZ= I21MrPi4u4MF_qXGWopwUwYJPMElA7rP91-sgL3ms-QD3t_gMm7a_nVNckTjDP_UCdyHUuy78Qj= lKZUjeHPFI1WUAUTCP_TVNLGgd1W8vbx28TCRwtBAS-noIBaujv--mAbR-ls-ynPBQpm2xTbgEm= s2lq57GHnp5cJAXI84cySqAzL9jO3KxMCczi7Jca65wTVk3Hupr5IWJeDZTZExBqd609iU78upe= 7ctdcHz7mzbvpPtvr5j8UIl1KWQ8AiaGLIxTZnieVhTM-6_GDtyeZjXX-V-NbXnSoQ0lgsbvlL5= jcPIIe7C0vKhuQmvRth7L4V5QoZPB0y38Rhk4EeQ3Yqro1-82YU-6yIjLP2mThklLW2UyVgjeRc= vF2CkbKK23yHDOugKbAlQgnpuMh6T2amaZFc8mHHpWEMMWaY1uq9BUnVA1Xm-RmXrP9kk/Zavwp= BFi8x3VZx-TELsLSttB_nz2u7j7/6" itemprop=3D"StoryLink" itemscope=3D"itemscop= e" target=3D"_blank" style=3D"color: #000000; text-decoration: none !import= ant; border-bottom-width: 1px; border-bottom-color: #000000; border-bottom-= style: solid; background-color: #ccc;">executive order</a> =E2=80=9Cpausing= =E2=80=9D enforcement of the Foreign Corrupt Practices Act, so bribery abro= ad is no longer any of US prosecutors=E2=80=99 business.<a href=3D"#footnot= e-4" style=3D"color: #000000; text-decoration: none !important; border-bott= om-width: 1px; border-bottom-color: #000000; border-bottom-style: none !imp= ortant; background-color: transparent !important; display: inline-block;"> = <span>[4]</span> </a>=C2=A0(Not legal advice!)</p> <p style=3D"margin: 16px= 0;">And it turns out that insider trading abroad might not be either. The = US is a big powerful country, but that doesn=E2=80=99t mean that US law app= lies to everyone.</p> <table width=3D"auto" cellpadding=3D"0" cellspacing= =3D"0" align=3D"center"> <tr> <td colspan=3D"2" align=3D"center" valign=3D"= top" style=3D"padding:0 0px"> <a href=3D"https://links.message.bloomberg.co= m/s/c/SmlEKXCUpDcWqK3d6-OHHlbaHnGURvFPBbiwH107V0dpcoEWW5xxvVA1z3UrrKYCyOdPb= wyN7UTwUqkNKyuK4ubzvzFZO0GuJnPBDPOOBD4rT8x62-3ajHrOIiQ496VHGqyJ-Kq_jzLwzWka= I-Cise8WdAizPuNe-YFa7krYE43SufGA6VHBxvYQNskDFL_-NHyCQT9npeXRoL5h1qfqed5Hy4D= kwXteaqQoyGYLk63bIclkPgRliVvRbpCMyJQrDdX9ZiRBa5F0jDBMvpyjMXoRvAUuH8_VZYScvY= jaw1G_lDHvlWwF_fsLtBHA8ILfiEGv8geLHHTo0czwTwGuwJMK08BkgJNOyDCYUg1oNvFJ9Gr36= E7h0Pweo7Fx9NBrFj4ZvP7H9ln0iT7V/UnN9oF6YuZo-7urF2wmw7RNPVBrwzitr/6" target= =3D"_blank"> <img src=3D"https://sli.bloomberg.com/imp=3Fs=3D868432&stpe=3D= default&li_coord=3Ddesktop&collapse_width=3D550&li=3D12596346&m=3D1e618ca1e= d3ef770bf0b25ef3db247f4&p=3D02122025" width=3D"550" border=3D"0" style=3D"d= isplay:block;height:auto;width:100%;max-width:550px;" alt=3D"" class=3D"lih= ide"/> </a> </td> </tr> <tr> <td colspan=3D"2" align=3D"center" valign=3D"t= op"> <!--[if !mso]><!--> <div style=3D"display:none; overflow:hidden; width= :0; max-height:0; line-height:0;" class=3D"lishow"> <table width=3D"auto" c= ellpadding=3D"0" cellspacing=3D"0" align=3D"center"> <tr> <td align=3D"cent= er" valign=3D"top" style=3D"padding:0 0px"> <a href=3D"https://links.messag= e.bloomberg.com/s/c/wO4Uat4bpDTRB5Pd3raWC34rucKISfXpV-aepvKWfuEuisfT8HzBlUk= KiKCyHe63KERYOwXObMh4O19waX6FtzMnSMq0o4k_3_wsjftTTxVItWPz3TSQer5g315EmPvXlR= guuUXt8qQ4ws3dlMhkkd6dXcVEsYnST4DHrPCaBEHz4RLqqR-RujGjWB5Lxyj-ZmzeKOBOGrW80= vFyXLgrzxVq0brKcynYaJ8SHG8UseUtOk8O__QZXOhR_pXnqnHc0RS1CiOksxz-r3rasj2g1QnU= s5UB0y_X5qrCEOR_5vWTaleVZYovIV1cinA1Cvy07_ruqVezUCxQPo3mRDWe-thhgXAoB9NZFer= 7NmWG4lw5BzwfEYjl9_sfudOZD08Ds57oXXAnw91yrqzT/1OlBmKzsFAnpqIwodIrCiRuT9NfPu= Myl/6" target=3D"_blank"> <img src=3D"https://sli.bloomberg.com/imp=3Fs=3D8= 68432&stpe=3Ddefault&li_coord=3Dmobile&collapse_width=3D550&li=3D12596346&m= =3D1e618ca1ed3ef770bf0b25ef3db247f4&p=3D02122025" width=3D"100%" border=3D"= 0" style=3D"display:block;height:auto;" alt=3D""/> </a> </td> </tr> </table= > </div> <!--<![endif]--> </td> </tr> </table> <table width=3D"100%" border= =3D"0" cellspacing=3D"0" cellpadding=3D"0"> <tr> <td style=3D"border-collap= se: collapse; mso-table-lspace: 0pt; mso-table-rspace: 0pt;"> <h2 style=3D"= font-weight: bold; font-family: "Arial Black", Arial, Helvetica, = sans-serif; letter-spacing: -1px; font-size: 20px; border-bottom-width: 1px= ; border-bottom-style: dotted; margin: 0px; padding: 16px 0px 5px;">Vanguar= d</h2> </td> </tr> </table> <p style=3D"margin: 16px 0;">I do not give fina= ncial advice around here, but a=C2=A0<em>pretty good=C2=A0</em>piece of fin= ancial advice =E2=80=94=C2=A0not the=C2=A0<em>best possible=C2=A0</em>finan= cial advice, not advice that applies to all people in all situations, but a= pretty good first cut<a href=3D"#footnote-5" style=3D"color: #000000; text= -decoration: none !important; border-bottom-width: 1px; border-bottom-color= : #000000; border-bottom-style: none !important; background-color: transpar= ent !important; display: inline-block;"> <span>[5]</span> </a> =E2=80=94=C2= =A0is =E2=80=9C(1) save as much money as you can, (2) put it in broad marke= t index funds with low fees, and (3) leave it alone.=E2=80=9D=C2=A0</p> <p = style=3D"margin: 16px 0;">That does not answer all of your questions! For o= ne thing, it doesn=E2=80=99t=C2=A0<em>exactly=C2=A0</em>tell you which inde= x funds to buy. (Should you buy the global stock portfolio, or tilt toward = your own country=3F Should you be 60/40 stocks and bonds, or some other mix= , and should the mix shift over time=3F) But it also doesn=E2=80=99t tell y= ou exactly how much to save, or how to budget, or how to decide between inv= esting and=C2=A0paying down debt,=C2=A0or when you should start withdrawing= money for retirement; it doesn=E2=80=99t answer any of your questions abou= t tax loss harvesting or tax-advantaged savings vehicles or charitable givi= ng or efficiently passing money on to your heirs; it is not responsive to y= our particular circumstances.=C2=A0</p> <p style=3D"margin: 16px 0;">But it= =E2=80=99s=C2=A0<em>pretty good</em>, in the sense that a large number of A= mericans would probably be better off following this advice=C2=A0than doing= whatever they=E2=80=99re currently doing.=C2=A0It was also, once, pretty r= evolutionary. Once upon a time, many people got their financial advice from= stockbrokers,=C2=A0who would tell them things like =E2=80=9Cbuy this mutua= l fund that underperforms the market but pays me a 7% sales commission=E2= =80=9D or =E2=80=9Cbuy these three stocks I love right now, and sell them n= ext week to buy different stocks so I can earn a lot of commissions.=E2=80= =9D In the aggregate, the customers were unlikely to outperform the market = (in the aggregate, they=C2=A0<em>were=C2=A0</em>the market), and they paid = a lot for the advice. Telling those customers =E2=80=9Cjust put it in index= funds and ignore it=E2=80=9D would have simplified=C2=A0their lives, saved= them lots of money on fees, and probably improved their returns.</p> <p st= yle=3D"margin: 16px 0;">On the other hand their stockbrokers =E2=80=94=C2= =A0or other financial advisers =E2=80=94 also probably reminded them to har= vest tax losses and put money into tax-advantaged 401(k) plans, helped them= plan for retirement and advised them on passing money on to their heirs. T= here was sort of a bundle where the overpriced stock-picking paid for the u= seful advice.</p> <p style=3D"margin: 16px 0;">Someone=C2=A0<em>did=C2=A0</= em>come along and tell the customers=C2=A0=E2=80=9Cput it in index funds an= d ignore it,=E2=80=9D with great success. That someone was John Bogle and V= anguard Group. A lot of people found that advice appealing, and Vanguard ma= de it easy to follow it: Vanguard has a website where you can open a broker= age account and buy its low-fee mutual funds, many of which are index funds= . You can go to the website, buy like five broad index funds, automaticall= y put in new money every month, and forget about it.<a href=3D"#footnote-6"= style=3D"color: #000000; text-decoration: none !important; border-bottom-w= idth: 1px; border-bottom-color: #000000; border-bottom-style: none !importa= nt; background-color: transparent !important; display: inline-block;"> <spa= n>[6]</span> </a></p> <p style=3D"margin: 16px 0;">This is very good for a = lot of people, who save money on fees and get market performance and also= =C2=A0don=E2=80=99t have to think about this stuff all the time. But there = are downsides, the main one being that the website does not really answer a= ll of your questions about budgeting or taxes or charitable giving or effic= iently passing on money to your heirs. It essentially unbundles the stock-p= icking and the useful advice: Vanguard will do the stock-picking better<a h= ref=3D"#footnote-7" style=3D"color: #000000; text-decoration: none !importa= nt; border-bottom-width: 1px; border-bottom-color: #000000; border-bottom-s= tyle: none !important; background-color: transparent !important; display: i= nline-block;"> <span>[7]</span> </a>=C2=A0and more cheaply than most financ= ial advisers, but it won=E2=80=99t sit down with you in a plush office for= =C2=A0quarterly meetings where you discuss your financial hopes and dreams = and Vanguard tells you how to achieve them.</p> <p style=3D"margin: 16px 0;= ">That=E2=80=99s an obvious thing to work on. Here=E2=80=99s a <a href=3D"h= ttps://links.message.bloomberg.com/s/c/MG63dGodMlj8Q1sN4CdMcRQbh6Vc_BDmDj8J= ksTtJk_O_xI207jJA6Eiq1eKcN3ohQs0YZ_Eir93J9xg5h3zu1V3dTYxMNq7goHf4qm0sOlWPtG= 4wjm90g0Fhc1qu0k3P1UQf5L0r8TNp0oOwXAyiZnIVvmh1iAedtX-018v6xBXAIWDHxWzh7P3nZ= 4r4BRCgBr-0be5vS-WC2Ru5C2ilmnp4oRyG7GpRU7-yNkZG2M_dvLvA2bcYK5nJRGYB2klBo2kI= 76PibMNCUhWg41gOV6i8g0ax36UvlIYvVnD6LDdzhgSbKs0X4fRYttMvBod7hqt83B21TSA-orv= e0StjOZ3uMRksBQ5DhGnd3S9poMqR0RHL4otD3sGI7ZDGcl_ReDa_njDXWsq3gOBsI9PyuBMuSD= CTD868BtPEucBaLb98ZpWsI-d-U_3q87TJdd_DTRiaWAuc3Kfk5ZsdXV1or1u2mnJv10sRUUM4n= v0/YqLHtPoB9amJ9DAlCESfKMFdr11RaX-0/6" itemprop=3D"StoryLink" itemscope=3D"= itemscope" target=3D"_blank" style=3D"color: #000000; text-decoration: none= !important; border-bottom-width: 1px; border-bottom-color: #000000; border= -bottom-style: solid; background-color: #ccc;">Financial Times story</a> ab= out Vanguard=E2=80=99s evolution:</p> <blockquote> <p style=3D"margin: 16px= 0;">For much of its history, it catered mostly to do-it-yourself investors= and employee-directed retirement plans. Though its online offerings were c= lunky compared with rivals, and its customer service lines had limited hour= s, investors were rewarded with low fees that led to superior returns.</p> = <p style=3D"margin: 16px 0;">Having forced rival asset managers to slash fe= es and rethink business models built around stockpicking, Vanguard is now t= aking aim at other parts of the financial services industry. [Chief Executi= ve Officer Salim] Ramji is spearheading pushes into investment advice, acti= vely managed bond funds and cash accounts.=C2=A0=E2=80=A6</p> <p style=3D"m= argin: 16px 0;">Meanwhile, many of its older customers are reaching retirem= ent age and need advice on the complexities of drawing down their pension p= ots. =E2=80=9CVanguard is the sleeping terror for US wealth managers,=E2=80= =9D says a senior executive at a major Wall Street rival. =E2=80=9CIf it wa= kes up, it will swoop upon the complacent cottage industry of financial adv= isers, and tear it apart.=E2=80=9D</p> <p style=3D"margin: 16px 0;">Venturi= ng into financial advice defies the instincts of Bogle, who died in 2019 bu= t spent a lifetime urging investors to =E2=80=9Cminimise the croupier=E2=80= =99s take=E2=80=9D.=C2=A0=E2=80=A6</p> <p style=3D"margin: 16px 0;">The com= pany launched personal adviser services in 2015 and added a digital-only ro= bo-adviser in 2020. It already has more than $900bn in advisory assets, mak= ing it a big player in a highly fragmented industry.</p> <p style=3D"margin= : 16px 0;">=E2=80=9CLow fees, novel price transparency, operating scale, gr= eat brand, unlimited resources =E2=80=94 it can=E2=80=99t lose,=E2=80=9D sa= ys the senior executive at a rival firm. =E2=80=9CUnless it stays asleep.= =E2=80=9D</p> <p style=3D"margin: 16px 0;">Vanguard last year cut the minim= um account size to $100 for digital-only advice and charges a maximum of 0.= 2 per cent for the service. Clients with at least $50,000 can graduate to a= combination of digital and live advice for 0.3 per cent. Vanguard plans to= keep costs down by using video and artificial intelligence to help adviser= s serve more clients, more effectively. =E2=80=A6</p> <p style=3D"margin: 1= 6px 0;">One potential mother lode could be Vanguard=E2=80=99s existing reta= il customers =E2=80=94 at present, only 5 per cent of them pay the firm for= advice. [The head of the advisory business, Joanna] Rotenberg describes ho= w her father, =E2=80=9Ca dyed-in-the-wool self-directed customer, a Boglehe= ad for life=E2=80=9D, reached his seventies and wanted help sorting out his= retirement spending: =E2=80=9CHe actually moved out of Vanguard to another= firm because, in his perception, Vanguard didn=E2=80=99t have those capabi= lities.=E2=80=9D</p> </blockquote> <p style=3D"margin: 16px 0;">When Bogle = started, =E2=80=9Cminimize the croupier=E2=80=99s take=E2=80=9D was counter= intuitive but ultimately good=C2=A0advice=C2=A0<em>about investing: </em>He= was ridiculed for this idea at first, but now it is widely accepted that p= aying=C2=A0a lot of money to star fund managers to pick stocks for you is w= orse than paying Vanguard=C2=A0<a href=3D"https://links.message.bloomberg.c= om/s/c/BJ54RLL_ctIorkC1Y662woumX1U08oWewGFDZojtlGmGCgSryejBgQ7RDJpDga2ZiLgd= XkgCgpauy-FyCut-UNJKObVRIYdW2RDfI71xNDeaGxZumv9Xr957fmoCRzaxHnua59yuUUN17CG= PKcksTWIAHj0KgPRHt1dYVpCpAVYMmblKYt1qvorofwURaB6WTKuUnIaNstUr0xdHcxDMUbKx_9= _jq4n5cVLPYlJrDVSQ80or-wedEmnF6an5FPHCWdqbPh04cqLielZ8WQ-52qG1vEqWqOqPfmpkZ= kDNl1bMCmj1HTSVhWN-QAZ3Q7ICfv4yUtOIMSTssch5rFRMmWjLbQw09hW3MiGn98HU2Opt7PtO= o5W0TWmEuPLk3cUS5pu4zbDYvESIFtEu1XCjxwuPl6ZQNZKgnGlizePKcft83GSfd6NNzvd-Ipu= v5wFiJYW5jIfmlN6-AcBcz1QTUYt6KGUAR9YvfHAwgDUgl7OlrDia6SVH3V35JoXs3KVE2izp9l= MGIYY/geGB3qmQbmxYLlMdH6d52TuPmUkkoA_G/6" itemprop=3D"StoryLink" itemscope= =3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-decoration: = none !important; border-bottom-width: 1px; border-bottom-color: #000000; bo= rder-bottom-style: solid; background-color: #ccc;">0.04%</a>=C2=A0<em>not= =C2=A0</em>to pick stocks. But you might want more from your financial rela= tionship than stock picks, and you might be willing to pay for it.</p> <tab= le width=3D"100%" border=3D"0" cellspacing=3D"0" cellpadding=3D"0"> <tr> <t= d style=3D"border-collapse: collapse; mso-table-lspace: 0pt; mso-table-rspa= ce: 0pt;"> <h2 style=3D"font-weight: bold; font-family: "Arial Black&q= uot;, Arial, Helvetica, sans-serif; letter-spacing: -1px; font-size: 20px; = border-bottom-width: 1px; border-bottom-style: dotted; margin: 0px; padding= : 16px 0px 5px;">The Dow</h2> </td> </tr> </table> <p style=3D"margin: 16px= 0;">One counterintuitive idea of modern finance that I <a href=3D"https://= links.message.bloomberg.com/s/c/1kXDEN7yZdGpQsIksav7RbC623qS5F_iPbe_YA79G40= 1l-CUNrOIpppdF4pJmlDYMhrCmh80bUVNZY23Lt3kd-kzdMhaYC0eIaKFBSETo1gCCmHi0e4pHd= pNz35NH49dsil8Qg0CMyctSVHUOqfEOOOIy2ytUgLnVV7rcvOBzu80dAN3tjK7NDuvo9Diw67Hl= PFi4_khkYCNKvFoZLyboTQ9KJmkR4tILOmiJAiTncoUUApwcWnAlGwaSmsSppOanBj3HhNoa5fm= OmkqD282IAVvnfkdYZaXlISXFgSt_banCid_wU0Siu0Fcvt4AdrLSB814CEiyenkjkspu2x3a7O= 0CeJgSNwI9TowNWPvfWcOuHzXg8rCOlpWiAQ/HXUMDcETvQEZ7FWPB4jHImeiQghRbPr5/6" it= emprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" style=3D"col= or: #000000; text-decoration: none !important; border-bottom-width: 1px; bo= rder-bottom-color: #000000; border-bottom-style: solid; background-color: #= ccc;">like to think about</a> is that stocks are all kind of interchangeabl= e. In old-timey finance, you would buy Amalgamated Widgets because you like= d its dividend and bought its products and were golf buddies=C2=A0with its = chief executive officer, but in modern finance every stock is just a list o= f factor exposures, and your job is to get the right factor exposures. Ther= e are lots of stocks, and you can get your factor exposures in various ways= , so it is approximately true that a stock is a linear combination of other= stocks. And so, for instance, if you have to sell Amalgamated Widgets stoc= k to take a tax loss, you can immediately replace it with some other basket= of stocks to keep the same market exposure under a different name.</p> <p = style=3D"margin: 16px 0;">Again, this is an interesting approximation; it i= s not quite true. Over long periods, <a href=3D"https://links.message.bloom= berg.com/s/c/-fUw0sRxoIPx2J6A1lThotH8nSk7gARybDIwEM5lsdY5shEZ3voW6QApsm2l-E= ocFXdym5ELj-bAc7TtacpdTNarhFckgHvCo-dnzOgkq5Gf0uD7mlpeTAt1cpvbBz2f89xMRGa42= u6bk4FR4AfgYy5hI85AeWQQEirJjiA3Q1z063yD9OMMg2B0zqIslb_69Y1uxZZJCbbo8Xmo0MoG= lCIkc24A3rjLg2CMb2aMhvXZ-_9ORYC5pamVFGIUxZU9KF4aZFr7c7KcNJCjZEVFFU8ONIz9fQN= t0YGt9grTXKqKPUMb7_83n574GSyjMiRPYeaEtH46Au91ztTuMkjJA7Gwb_B3DqHtzJf4SiJuPY= J24lOgoNPUeBE_Q99AuMRRL72B0njFBJnCPEuVjnroF1hlYReSD7mQKTS_n3jzMcwPjcjPfWEzc= Ezz7yembDhQVXVPsZNPXO_wbLm43WzsBwhjInsy99AJ9tHTDDH6kBQwX2IIIAKhpAYNnis7MUnK= Oyas4OdhFyPwuc5RxRIDLCKj0iCia01FM4XcAyi_bMp-KA/rLgjs4n0qfdAjdsv2s117AwaZVcl= joNh/6" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" st= yle=3D"color: #000000; text-decoration: none !important; border-bottom-widt= h: 1px; border-bottom-color: #000000; border-bottom-style: solid; backgroun= d-color: #ccc;">most of the returns</a> from the stock market come from a f= airly small fraction of the stocks, so replacing the 10 good stocks with 10= 0 bad stocks in your portfolio would be a disaster. But for many purposes, = much of the time, =E2=80=9Ca stock is a set of factor weights, and you can = get those factors lots of places=E2=80=9D is approximately true.</p> <p sty= le=3D"margin: 16px 0;">And so, if your finance professor assigned you a job= like =E2=80=9Creplicate the return of the broad stock market using only a = small subset of the stocks in the market, and weighting them in some arbitr= ary way unconnected to market capitalization,=E2=80=9D you could probably p= ut together some reasonable approximation.</p> <p style=3D"margin: 16px 0;"= >Why would you want to do a thing like that in real life=3F Well, the class= ic answer is what people call =E2=80=9C<a href=3D"https://links.message.blo= omberg.com/s/c/aBZ6fpajQ1zbZ7oE9dlQHkcKRkwDpR4ngIahlXN_l2qEFyvSxV2sJlUbLqCx= -ZxwiTifta5CW-FIduMNFdV6pQthS0kQ0H8rq2cGl3sC8pY0mEl3_CxPl5Wiz6XFTFDraqGtbFi= 4_5jsuFg8tsWMNwfuGhT2RVg859DCZQZlt7nQsiRw5v2ah2He5UHzY99W_7Fge3ufgmTPnKQwXi= 2CItsZv4RppsTRSk5Qs3V1-vwlFoennTTt_44lUcKdTJOfE2xzC4Kjqc_9V_4ysYrheEZBPdRPv= UmOXEAX97rHjHSmkNRrfBXnQZrHe7BpBd-xWgzegduMmLSyRnGz-bKd87GaNDDBloEVK1ZWv2wa= tBU6mDcYvvPD-wCR_icIw8WjYHEc3gU9aaU5ZXlccu3JuTQYGyhNkvc_AwgNjj-sA6OvhtVorEw= t19kkaptYtU75OeLI9rXO2pmMQ34b2iM/ic3n830RNU1yEIFdem6NI261J4WO38qa/6" itempr= op=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" style=3D"color: = #000000; text-decoration: none !important; border-bottom-width: 1px; border= -bottom-color: #000000; border-bottom-style: solid; background-color: #ccc;= ">closet indexing</a>=E2=80=9D: If you get a job running an actively manage= d stock mutual fund, you might think =E2=80=9Cactually achieving average ma= rket performance is pretty good for a mutual fund, but I can=E2=80=99t char= ge 0.75% fees for running an index fund when Vanguard charges 0.04%, so I h= ave to run a fund that=C2=A0<em>looks=C2=A0</em>different from the index bu= t that gets roughly the same returns.=E2=80=9D=C2=A0</p> <p style=3D"margin= : 16px 0;">Another, funnier answer is that if you get put in charge of the = Dow Jones Industrial Average, you will have exactly that job:</p> <ol style= =3D"list-style-type: decimal; padding-left: 40px; margin: 16px 0;"> <li sty= le=3D"margin-bottom: 5px;">You will want your index to <em>look</em> like a= broad market index: People think of the Dow as an indicator of how the mar= ket is doing, so if your index regularly goes up when the market is down,= =C2=A0people might stop paying attention to the Dow and you=E2=80=99ll be s= ad.</li> <li style=3D"margin-bottom: 5px;">Your index is=C2=A0<em>not=C2=A0= </em>a broad market-cap-weighted=C2=A0index of the whole market: It is limi= ted to 30 stocks, it has the word =E2=80=9Cindustrial=E2=80=9D in the name = (though that doesn=E2=80=99t mean much), and most amusingly, because it com= es from a pre-computer era,=C2=A0it is weighted by <em>dollar=C2=A0stock pr= ice=C2=A0</em>rather than=C2=A0<em>market cap.</em> </li> </ol> <p style=3D= "margin: 16px 0;">And so the assignment is =E2=80=9Ccan you find 30 big sto= cks and weight them by stock price and get something that tracks the S&= P 500=C2=A0<em>pretty well</em>,=E2=80=9D and the answer is historically=C2= =A0=E2=80=9Csure why not.=E2=80=9D But not right now. <a href=3D"https://li= nks.message.bloomberg.com/s/c/3QwvrQ2P1gm084hw456KRNc3RXDQJJaqbwU4BPRmrJ7q7= 5NKiID09IQ3GdrmZmKXVVvbhhAYVWq-vVu0Aguxso0nGFEljWlo8NEVIMW_D2d2Dab-viQ8J_an= 3wz6T2fFYehBl0UplXgYkxhH4OEvaWpCFKLwP-DLJRqeYwUQYpb9OxT2pmjFi_h0Ah31NP5MwiC= sW2iMCGDOrkaBowiaQ25YrQvI6fJP7K3u1DYMeMDZBHNOeKuT3pMWA8kqb_uudum1kTkcwwFlwt= 0O34qBxGwpVZzua7eMkE8gQMXbzDuRQo4WOhAUrBQ4-_PTspsIAsuBhv5uU0h_BsjONUlIzlXpx= uVB-CRrr22dzRTj9vgVgw2QoOeTDxHp8Y7hb7a9LsayGXjyXoDwiDOMlCRzzPdt5WIaCmRC1JJX= 0nvs-HqOz6SBaZAAKatqdO7hCAOLljav9hnYjyUOKQ5S4iPxwZlJlmmdtk2MagjPCL5_c_lBR0y= 1OiNUZoEZG4faDd9n5U6F5mUnB29UNCFU75lvBOBwIr3DSmkCyWEID-wfWf7l1VtT0Fhg6vHMsB= 4klYSOp59qv8iurPG8JfAjI9TQyLi2YJUD0LKf6JWtd98fsuDjxYDOHv-jf0E3iYl9K8AyeoXbl= os6nrUKtIB1n6PUmw/7HNwvVuiNolpa_UgyWoOzBdIwj0CsvXj/6" itemprop=3D"StoryLink= " itemscope=3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-d= ecoration: none !important; border-bottom-width: 1px; border-bottom-color: = #000000; border-bottom-style: solid; background-color: #ccc;">James Mackint= osh writes</a>:</p> <blockquote> <p style=3D"margin: 16px 0;">Far from trac= king the S&P 500 index of the top U.S. companies, the Dow Jones Industr= ial Average for the past two years has been left in the shade. It lagged be= hind the S&P by more than 10 percentage points in 2023 and 2024, a dism= al performance matched in only two years since the S&P 500 was introduc= ed in 1957. =E2=80=A6</p> <p style=3D"margin: 16px 0;">Excitement about art= ificial intelligence has driven the Magnificent Seven stocks of Alphabet, A= mazon.com, Apple, Meta Platforms, Microsoft, Nvidia and Tesla to make up al= most a third of the S&P 500. Moves in the S&P are dominated by whet= her it is a good day or a bad day for Big Tech. But in the Dow, these seven= make up only 13.9%, with Meta, Tesla and Alphabet missing altogether.</p> = <p style=3D"margin: 16px 0;">Instead, the Dow gives five stocks that barely= matter to the market as a whole the same weight that the Mag 7 have in the= S&P. Aside from Microsoft (third-biggest in the Dow, as in the S&P= ), the five-biggest Dow stocks are Goldman Sachs, UnitedHealth, Home Depot,= Caterpillar and Sherwin-Williams. Together they are 32% of the Dow, but ma= ke up a tiny 2.6% of the S&P.</p> <p style=3D"margin: 16px 0;">What mov= es the S&P matters relatively little to the Dow, and increasingly what = moves the Dow matters even less to the S&P.</p> </blockquote> <p style= =3D"margin: 16px 0;">Right now there are seven important stocks and several= hundred unimportant stocks, and if you get the balance wrong your index wo= n=E2=80=99t track the market.</p> <p style=3D"margin: 16px 0;">I don=E2=80= =99t know how much this matters. Not that much money is indexed to the Dow.= Surely the main job is to keep people <em>citing=C2=A0</em>the Dow, which = does not necessarily require minimizing tracking error.</p> <p style=3D"mar= gin: 16px 0;">Also, there is a <a href=3D"https://links.message.bloomberg.c= om/s/c/GckxdCqQ2K6Uo_W0GK6HYyEGznuFS2PZFX6aTKqJ1MsujBGT02O94qMwqtzNpOaMtrom= J-qdN6riGPCUzl-FuHiUEzk18t6z8fLd4HH2cXXgt4jbgNDotlFjGogbYAGDcwj0BTGL0F6ERpd= -5ErxCLQppdCWBEDHO2AU1E2oTut_38YBP3pwR5HIISz8HKkVpjGsg55zmwywcU_WNpigfMhC_p= 2WBOUVTAm3B1TPvhabUb_Xu7U1L3CuJ_FRVBF47VPGRhCe3Eab19a72JOqU-AvjnYWXNi0IAN71= kw5L-XF8nEaak5AKCTpSWTpuLf278n_sYxHCNkaEPXdkFFMxp0F7G4BoF7V7JoU-OOX0BBNzveN= ePnyqqXqWS6EfF3NJEUTM7iWX5hK8013ToISZ6w7hgaiPKCYk_0j9GR1NQdJyrc1AMA-MvJtuVV= 253DPbLciR-0JY98G0iNCT69JyI50PTId3lK6AnE0_WI2/8SkLPU8jXk1wtERmffDSr25irXXyB= nto/6" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" sty= le=3D"color: #000000; text-decoration: none !important; border-bottom-width= : 1px; border-bottom-color: #000000; border-bottom-style: solid; background= -color: #ccc;">lot of complaining</a> about how concentrated the stock mark= et is right now: The Magnificent Seven account for a lot of the S&P 500= , not because the S&P is flawed but because it accurately reflects the = outsized importance of those companies in the universe of US public compani= es. But a lot of people worry about this concentration: Investing in a dive= rsified index fund nowadays mostly means betting on demand for Nvidia chips= , which might feel like not a very diversified bet. A pitch like =E2=80=9Ct= his is a broad index of blue-chip companies, but it=E2=80=99s not all conce= ntrated in AI stocks=E2=80=9D is actually pretty appealing=3F</p> <table wi= dth=3D"100%" border=3D"0" cellspacing=3D"0" cellpadding=3D"0"> <tr> <td sty= le=3D"border-collapse: collapse; mso-table-lspace: 0pt; mso-table-rspace: 0= pt;"> <h2 style=3D"font-weight: bold; font-family: "Arial Black",= Arial, Helvetica, sans-serif; letter-spacing: -1px; font-size: 20px; borde= r-bottom-width: 1px; border-bottom-style: dotted; margin: 0px; padding: 16p= x 0px 5px;">Metaplanet</h2> </td> </tr> </table> <p style=3D"margin: 16px 0= ;">It can=E2=80=99t really be the case that =E2=80=9Cput $100 of Bitcoin in= a box and sell shares of the box for $200=E2=80=9D is a viable strategy fo= r=C2=A0<em>anyone</em>, but it works in huge size for Strategy Inc. (former= ly MicroStrategy Inc.), and it is really the definition of =E2=80=9C<a href= =3D"https://links.message.bloomberg.com/s/c/ySACXlJWiNx7ee2yRvAtZHlBVxaYCMX= noh2eKEMDxlHmOW3baAGKTDWZGJ45VT0WS28EcQW1HPxwxKNQq5Ql7OVObV152tq4jx2avDfvnE= z70dQ3aKEVLpcS4ekQXBc3ZIap8wcWsPKaY13P5H-Sjui9XU5LGi_eVG2acrAt8B163qfi7OS4Q= WBrJjcVKrsrNu8b0oipU4EuNALyYJ2SBQf8JI-IdAuGM_IkJie-rq615J4yQu2N989qMLwPH1GR= SqsA1nsGiuHmNJ_N2O4fpVN06Em2DulwY0LmHm9Bkb6M91CzaM9vLkHXaw2-XfpfqBHQrZeCPkX= WHYI10O9okIaiabbfru_KmXRMHWUwZZU3bubyEwENGv-fAFs/SYCscVHndSco5YO9ktq13rPEOF= oNaR7R/6" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" = style=3D"color: #000000; text-decoration: none !important; border-bottom-wi= dth: 1px; border-bottom-color: #000000; border-bottom-style: solid; backgro= und-color: #ccc;">nice work if you can get it</a>.=E2=80=9D Lots of people = want it. Here=E2=80=99s a <a href=3D"https://links.message.bloomberg.com/s/= c/RmdRIYqng0sb1yPyFtard_fcJ4ulsf36BGzQq5XV1qqkNSVfnInleadAuXGmpBze8zrve1Fjq= cC2-KDnBeGytW72XAVBNtbniPgaADGLpx4_03-5iQn4nszdjofEJ_fE6XAduxysMuvL2f1P6m-S= P2Zv6hs9d4PWTQv1zJBwSCeVpw8Lb3x9p6aG25flbRgnBoKrPAnYfEtlPHMfyzKw9javs5Q35PX= 0RerAn8X9xf00jnBotgylGrujzvoo26wOQj-SPuqlZyx9S1jB9v0ycSWu1olu6O-c-mYtsXdUT2= JrcGThFd47RF9_CYp2UKMYrrkC9rdqiG4L9F7fAp3fsVrzhJA4xuq54vmTiSryWC2aU6Ua7F4lv= wd4B76YOsvfzE-TPkd3NFukLDtlI2u_TJcNw7RC8to03_PRk9PFyXDv9PRYr79aXU4SYzpcj6bq= 8NHnCuNll8KCm1SLW3FKTx489I8OhksyV4-09ci5hcvIvrOOSX400dBiom8TS7PGJWtrW9K1j-_= F57Zr/QNNYW9E2KLw2C_uztMynWtbjQ3Y-O6vF/6" itemprop=3D"StoryLink" itemscope= =3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-decoration: = none !important; border-bottom-width: 1px; border-bottom-color: #000000; bo= rder-bottom-style: solid; background-color: #ccc;">Financial Times story</a= > from last week about =E2=80=9Cthe MicroStrategy copycats: companies turn = to bitcoin to boost share price,=E2=80=9D and <a href=3D"https://links.mess= age.bloomberg.com/s/c/v-CQp_2tWVsvMnqwCvhQB67jPp8YKgRSK-s-SNIT8XXGOY1Lt3Rbb= 3TAAATfzG8Aui_piUHApI_rm8M0sI8R5X-VbA1AJW78veMeSv7g22foKb-RaZ-dgsR498-aa-1f= Gil-LQKgapmtdymR0jzCiF4CtjwDjrcNUJRYpLWqOlwtQrTHqZBGhWUMbvOgk-zXwNst1GnCP9l= zjVLk29yOx9e5gSmjltHEY3roVEbBJTXSuFU9sIfNYuFkPzIFYGc1F--5hbbut476mZPK64ZjsW= 2LmXe81WtNH4H8fDeNp1r8XMh0k71QcyT9b6ShLfQGgUdNLWZSdvllg_HZ8YgkkThdSO0obBwNb= fCqo2E40hO4_2pH5j-Nj6KiBXA/tEqvaftEsVl-k2zENfF6zEXJ4q-hpCzY/6" itemprop=3D"= StoryLink" itemscope=3D"itemscope" target=3D"_blank" style=3D"color: #00000= 0; text-decoration: none !important; border-bottom-width: 1px; border-botto= m-color: #000000; border-bottom-style: solid; background-color: #ccc;">we t= alked last month</a> about a crypto thing called =E2=80=9CFartStrategy=E2= =80=9D that copied the essential MicroStrategy idea =E2=80=94=C2=A0put $100= of crypto in a box and sell the box for $200 =E2=80=94=C2=A0but modified i= t by (1) making the box a crypto protocol rather than a public company and = (2) putting FartCoin in the box.</p> <p style=3D"margin: 16px 0;">I wrote a= t the time:=C2=A0</p> <blockquote><p style=3D"margin: 16px 0;">It=E2=80=99s= not clear that <em>you </em>can do this. <em>MicroStrategy </em>can do it.= Why=3F What is special about MicroStrategy=3F=C2=A0</p></blockquote> <p st= yle=3D"margin: 16px 0;">And I gave some answers that boiled down to (1) Str= ategy was=C2=A0<em>early=C2=A0</em>to this trade, (2) Strategy is=C2=A0<em>= smart=C2=A0</em>about it and (3) =E2=80=9Ca big US non-financial public com= pany=E2=80=9D is actually a very nice box to put Bitcoins in. People =E2=80= =94=C2=A0US retail investors with brokerage accounts, US institutional inve= stors with a mandate to buy only common stocks, some index funds =E2=80=94= =C2=A0can invest in a public-company box, but might not be able to invest i= n Bitcoin directly, or perhaps in=C2=A0a Bitcoin exchange-traded fund, Bitc= oin futures, etc. And so Strategy can trade at a premium to its underlying = Bitcoins because it is offering Bitcoin exposure to an audience that, for w= hatever reason, can=E2=80=99t easily get it elsewhere.</p> <p style=3D"marg= in: 16px 0;">If you are another US company, you can copy this, but it=E2=80= =99s not clear that it will work: People=C2=A0<em>can=C2=A0</em>get their U= S-public-company-flavored=C2=A0Bitcoin exposure elsewhere. (From Strategy.<= a href=3D"#footnote-8" style=3D"color: #000000; text-decoration: none !impo= rtant; border-bottom-width: 1px; border-bottom-color: #000000; border-botto= m-style: none !important; background-color: transparent !important; display= : inline-block;"> <span>[8]</span> </a>) But surely there are other niches = to fill. For instance, a <a href=3D"https://links.message.bloomberg.com/s/c= /UQ7IQZYZsIuVZ2t3CGYojsLwYZ34E6yrMqks2JfhuAQFczMt86XMogZHD2jY0AMr4NPRnvDe-h= KOBq-ROyTI4PxYx9X92Y-qS3zyEsz0QrApeAzFclG4NnADfNSuTrSyDXaWElGezH78aptnIbZ3q= 27r8hbPMPV2yBMqAwB3NdASKVFZ9rpTrKVfs8FxhgofM35EdQTQGRNFH1Gr0Kxt_PjfG7xRd4Ef= 0TaLu4bkWJcBoR_98o1kxIxYMVHl8_URBuHKsO2liIxKcL7kIdjtmkyN3ZtE3GNAZu9QzWd1_C5= y7Mq5N8E4uJobgQ7_XOq2fpPfEvVtNaoo2wzPEHdmQMTQ9WDPBaQwWt9USihngy6WwWiVNFzU1R= JBPjE/shAQkhXet3rL4FJD9EqtVxXLYG7b9jNe/6" itemprop=3D"StoryLink" itemscope= =3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-decoration: = none !important; border-bottom-width: 1px; border-bottom-color: #000000; bo= rder-bottom-style: solid; background-color: #ccc;">Japanese-public-company-= flavored box</a>:</p> <blockquote> <p style=3D"margin: 16px 0;">Shares of M= etaplanet Inc. are up around 4,800% over the past 12 months, the largest ga= in among all Japanese equities in that period and one of the highest global= ly, according to data compiled by Bloomberg. ...</p> <p style=3D"margin: 16= px 0;">Metaplanet is one of a number of outfits around the world that aim t= o emulate the success of Michael Saylor=E2=80=99s Strategy, formerly known = as MicroStrategy Inc. The Tysons Corner, Virginia-based company has morphed= into a leveraged Bitcoin proxy and behemoth after accumulating more than $= 45 billion of the token.</p> <p style=3D"margin: 16px 0;">Metaplanet=E2=80= =99s CEO, former Goldman Sachs equity derivatives trader Simon Gerovich, sa= id he was drawn to the idea after hearing about Saylor=E2=80=99s strategy o= n a podcast. He=E2=80=99d been running Metaplanet, formerly Red Planet Japa= n Inc., as a hotel developer since 2013, but shifted to a =E2=80=9CBitcoin-= first strategy=E2=80=9D in early 2024 after a pandemic slowdown forced the = company to shutter all but one of its hotels. =E2=80=A6</p> <p style=3D"mar= gin: 16px 0;">A large chunk of Metaplanet=E2=80=99s retail shareholders bou= ght shares via the Nippon Individual Savings Account (NISA) program, which = Japan=E2=80=99s government revamped in early 2024 to encourage citizens to = invest their savings for long-term growth and retirement. =E2=80=A6</p> <p = style=3D"margin: 16px 0;">Capital gains on direct Bitcoin purchases are sub= ject to taxes of up to 55% in Japan, making investing in stock proxies like= Metaplanet via NISA a cheap and convenient option for small-scale and firs= t-time buyers.</p> </blockquote> <p style=3D"margin: 16px 0;">One long-term= possibility here is =E2=80=9Ccrypto gets so normalized and mainstreamed th= at all of these weird proxies for it go away, or at least stop trading at a= premium,=E2=80=9D but there are a lot of fortunes to be made before that h= appens.</p> <table width=3D"100%" border=3D"0" cellspacing=3D"0" cellpaddin= g=3D"0"> <tr> <td style=3D"border-collapse: collapse; mso-table-lspace: 0pt= ; mso-table-rspace: 0pt;"> <h2 style=3D"font-weight: bold; font-family: &qu= ot;Arial Black", Arial, Helvetica, sans-serif; letter-spacing: -1px; f= ont-size: 20px; border-bottom-width: 1px; border-bottom-style: dotted; marg= in: 0px; padding: 16px 0px 5px;">Things happen</h2> </td> </tr> </table> <p= style=3D"margin: 16px 0;">BlackRock Now Wants to Become Private Equity=E2= =80=99s <a href=3D"https://links.message.bloomberg.com/s/c/OWGcQPMWQRLaFK6Z= Ec29vzFBNNzHN-L-TiseWWJbML8u_mfsppmOOvrdaGQXymEFqcnflSaRfmEa5-LAQS37BtMIcTs= 1zKKyaDyoThegjtY5v0bG2rIgYQjT3bX4QyDq5Ng9Zu9wFTmpYdh3rVtbjkmvg6HjD0p7j9Q1z1= -4Re13LXV-qXCj2WupIl1Cp2R7LP91WhuI3OIpqoF9TcjZs2fAss0paPgLEoD2Mnk02AgZweBpS= Gs8Wq-309SSgE0oy73apcBV7b2x6xSZtGIqIXnJc1_uKNSRts80gjgU6h5omnxWDElObD0ZX0P0= 2YjrXdomtLkpzjg7QR3s6YgzYprAicIZOC9TUEFJlvqmD9yOpfrDKNMGFMwZCIk/vBO-xs-JhLB= AIWkCRifgs6MERjmFHGB4/6" itemprop=3D"StoryLink" itemscope=3D"itemscope" tar= get=3D"_blank" style=3D"color: #000000; text-decoration: none !important; b= order-bottom-width: 1px; border-bottom-color: #000000; border-bottom-style:= solid; background-color: #ccc;">Key Financier</a>. US <a href=3D"https://l= inks.message.bloomberg.com/s/c/xx4f_wWferTan6RT1Xtlj_k-fk7QivlCTpavivDOpHUW= -YXKi0Lql7PEKrGJJ0B88EOjGroBhK2j9wYxuCP52OGzjG7HyVoUIykiAgH3PWj5u9nD5XBl7U9= _TmVwncZvc_R0OTELomVyraDSVTejS1VEYFnmF-jPZ7tfExuMxPh-fFFGrK1D3W5AMcRmDGwJFJ= IJ9iTvkf2PAj_SZI4fPRYLJE7tekJhPu5bAKC5iN-AYAfFM_O6URvE7VtNtQ5iGG5LBsUDxBHrx= yF4dCYq389pswN5DjyajLcFVE32PWyupeoJNYd8QErmeyXD_65Z_kK1UtSlF9lOzCKgeIjvSame= KXLpPH872j4koLBybLcafQhSTgCTp1GCB34/I_IiLCl9TpDsdRkNL2FqdGfGxPpFpuvf/6" ite= mprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" style=3D"colo= r: #000000; text-decoration: none !important; border-bottom-width: 1px; bor= der-bottom-color: #000000; border-bottom-style: solid; background-color: #c= cc;">Inflation</a> Tops Forecasts, Bolstering Case for Fed to Hold. Effort = to Save <a href=3D"https://links.message.bloomberg.com/s/c/k5QFBxx3oFbolJI3= ygFpL64WboQcSjndnXPiwObnuNg3cT85STV5t0W87E_XOQ-bVBvrtnn97G8QXESzYXTGPFrfMHw= 5W4ZrlWNIOn-DMTSzF2T0j7G1B2VDohFBlN9RNpRcdx8fM4Y1Y5tnQBM5NK5T2QnvEIr5R1KXGu= PgbqEhssYgOGMNq9cF3A9pAk4zDNeVbkjOCouzvuAvWZYaHuS52GrI7moaEsQDqdrkbAYrTYQhv= S9Fzi4kIKNLlEd2saXJI8Q81S7R9lgRL3f7_X1XuQx96pEcFS99ZWrcgCVyuPOLPUdrH2M6EOQa= c8US9q-X37CjVaERLzXoS9w5z3cwgJ9wyIMXUeZYwo9Zd8_d9yfhZijtgMDw5uw/bw9cboCh79y= uEN4LF9mmykytXU_kP2AF/6" itemprop=3D"StoryLink" itemscope=3D"itemscope" tar= get=3D"_blank" style=3D"color: #000000; text-decoration: none !important; b= order-bottom-width: 1px; border-bottom-color: #000000; border-bottom-style:= solid; background-color: #ccc;">VC Tax Break</a> Has Become Familiar, Nerv= e-racking Ritual. Microsoft-Backed Startup Raises $160 Million for <a href= =3D"https://links.message.bloomberg.com/s/c/ZVV5srkPRf147dEFOVZkJOQcPhFpREj= EPvuSzrmMaBnrlogtjqAmCeapnzk7wZIevC22NTVKgIOaKhQ5_Fxz6AKZSuM9Cc5FZ5IEioSlwY= ZorDGq739XCM2n_5nwGb4CUK_scdXvvKVy3Q2ConsUoSYLITp33VMbpe73S4bNAMAG3sgdrRuy2= kIbQ3qYcq1TC13b3yThcoLPoF9oxsZcuaFqKgpU6gzWx2hsu5i2wNbjMCgCkHyMqfGvqsL_gUTG= lLng9QfNOZ5142AffJcEP0JTDJ5mkc9LUZwXIzlGbQbshdgfbj7egvWg4Ez1aPXmmioiafTUTfl= DoGHdc8gwC1ZmBMT8LIAD7GDBaCYmea_YA9SQqUCVJ55EoPY/RMKXXboIPxwPV1xNlEaWMjEPgS= fMEYXh/6" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" = style=3D"color: #000000; text-decoration: none !important; border-bottom-wi= dth: 1px; border-bottom-color: #000000; border-bottom-style: solid; backgro= und-color: #ccc;">Forest Carbon Removal</a>. Fearing Trump, Wall Street Sou= nds a Retreat on <a href=3D"https://links.message.bloomberg.com/s/c/NxM4853= qxQxwiFbIzbv67kcWlBeGIeflJJQ7jaNooAEZKvzromKq-ZIFmmGVQeT0rNx8WdjFGuYhn_ouW_= cXOj2TqkE3QOtsoOeknXL4rsFwJjbYBgVjkngHnZ0j22Wk3_kzHh23wu_K3dIrfrhCDM3jS0jyJ= tOA_9JDFK4qA4m5QhZvll7MLA42uozjaXglVitFkgvkXVhbUGJe1FG8aRzRc0uaTJNWfR1EbwiF= EHtTWRmYN6YWFdqvtMsgAqvObekLRK0i2eO9e7SZFl4qK_Ijsj_ZlTA_flHsOCJEbIuBJ4zdfnC= E313PdNqgKprr8_ynkbry05imEIGGcEz5pOwlYyv6t_ztgeAdHfcRu58PQHoFU0Wt5w_-Tnpyn-= 8KuNTfGrY9_9AIc7LBXMq-4KmPVYyKRSk6bP64tDadtGBVbF8Hd-q7-EeIPS2LMtoG-o10XNI3d= gVd5JsbtSJ9hO9M_shAQnCblBEuUwgza1rFi6WESJGSWDU7eBz-qaut2u0K6fnAKinofb2vixuc= 52yiEiSifNcGZAbmPYsSzipGNnvaKtym1gh3_FwwN9NpjM3d95cT652w3pik3VlgjFO0F7pw-fA= iac6orJp9Lj1VNJqTKSkQ3xstHkKEmh9vMWdxCCJ7tP93o9kU-VPhf6Yb-VcJaw5XxDygIRQNVY= ulnd1CAfMmm1mPolpFEoOpqKyqJpH9EHIu_jwFfZx6mvqiHlF9HkF2hfKERI0LOZLo2WwexAv7D= tr4REPBv08cd3Kw4SlaNhSmeQmu9Ywct-AJESR8onc5KrVl8Y8Z0RSDuRKq9WNgN2OCIiqycOhG= Vz9sfZqvi70Qe3MS3MT6Rrmmxuqn6dy9dsKJThGclyYr9fYHyDPUVA/XMWK4edID9qq34MvTMiy= A_9-mkL7OdMW/6" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_b= lank" style=3D"color: #000000; text-decoration: none !important; border-bot= tom-width: 1px; border-bottom-color: #000000; border-bottom-style: solid; b= ackground-color: #ccc;">Diversity Efforts</a>.=C2=A0<a href=3D"https://link= s.message.bloomberg.com/s/c/DZIZ87iW8Awu_aWHpJOr1Sn9qus_o9BcfTM26_63JsuzPqf= oEeftnbfd7p9smSprtd5z7g3K13gY3Gc1_kUmbJtNTEWjcWYb-w70pp-YBVKFFtkh81qYZMazVh= srnzgP1JyoiaYTKH2kUw9xthZP1UQ_74-UuN33eX1NEI1F6kf6UQT51ROuPR-5ggaLC32jdNDsh= xbjxFkCMw2b2_8zBIZ7Y1G1Sms1hjjjP4TrS73X820Gzsjjxw1lh89JC9ZHYEbRM5_h-Lcscv6Y= Q26gmq-Wx3DRlmEaIue70RdfY_6fppBVKVTjA6nJ6tONtYWHpRiQ51Iu87ptrT_3j44nNwpiFZT= LAwBDh8yuoghqHc7GoPXUCbgAse0ikvRYp_gay6ksZbjwQ9XTbbt0lxb_weHwNmyoLqmXcK7HII= Knd0ob8FsMUdOqg4NUSW8QdMsl32-hLRs50yIATaU14Ryv_zazQRRt2Or6Zuw0d4Uj/AKpJb7sa= anpQrRD-sZcMPaen0fpE7Jp0/6" itemprop=3D"StoryLink" itemscope=3D"itemscope" = target=3D"_blank" style=3D"color: #000000; text-decoration: none !important= ; border-bottom-width: 1px; border-bottom-color: #000000; border-bottom-sty= le: solid; background-color: #ccc;">Office attendance</a> is becoming a per= formance metric. US <a href=3D"https://links.message.bloomberg.com/s/c/KRJy= R4DRWFtRn1eGNFKQKzjdwZoPTMWjRW_6oU7IuZFfttdUgX4qywF8mL8JShGC8hFJn_QcRPxhRgh= 2PNlYhgv_Cifirmud13YI4C8K2M9iDW1SYXA9MnHRi-uMdeEDV3j6ucAfu_pfnvXhypePG7iU2N= 7eRasEKtVXeMtFMYK0g-qySAFBLEouBfxRxWkGy2LFfHpi0jXhP8msL452F75GHjDgjXAjePKGs= UFVig-3y1_GKCZsH0cRIMfNxVMcgKGHNLiDB_2o5BAvZCpYlCaZ4alVEnfLS5151YuuX5XsxJd6= GuzaiQfl7AbBZkIdwdsWCj3wZkQRY863QcYuI7K0WBpawuIPmFl8_0W59RANRkTOGHrHbXQEkTQ= /CVOUokTEpdQ3SPkotFF7CiImXi9Nl0dh/6" itemprop=3D"StoryLink" itemscope=3D"it= emscope" target=3D"_blank" style=3D"color: #000000; text-decoration: none != important; border-bottom-width: 1px; border-bottom-color: #000000; border-b= ottom-style: solid; background-color: #ccc;">Private School Tuition</a> Nea= rs $50,000 as Inflation Lifts Costs.=C2=A0Trump=E2=80=99s Sons Back <a href= =3D"https://links.message.bloomberg.com/s/c/dOO1aqUaCJVILbAfAec9yrE69ZyBxSu= OdboreNMU00RxtUxn-qe8y42JXgARrR2nw5dZtCjCTkeOeP5dL_PfkeMPnkq12kBIpj3d1lZnkN= FBncz_y5XSam9Z7QApSDvuDclRnhB-g8NqkYGWgX0aKK5cgVY8K804nXWdKSEup4oF5kHc9bksq= YlkQQLzhWweV1xVupd2bsjpmZYSNkBu5y7UxuyG3gVjxJWbC0QjE5emLvagccgt6hsObvdA7nAe= tBNhjJRlO2kPL_F7lpzqGgwDCxoq4wHt386vaeZux9PvRVE1oL0HI7DpiTtCsc2UWP_w8JgNQcE= _wdYlYEoIRuoxL_jiCfM_VDIrx_I9EC6-MLhizsTKMpdl0UI/Qi3-BRWPU0yX_stavMe5OfFAeI= 09Cw3l/6" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" = style=3D"color: #000000; text-decoration: none !important; border-bottom-wi= dth: 1px; border-bottom-color: #000000; border-bottom-style: solid; backgro= und-color: #ccc;">Friend=E2=80=99s Penny Stock</a>, Spurring 84% Price Jump= .</p> <p style=3D"margin: 16px 0;"><span><em>If you'd like to get=C2=A0Mon= ey=C2=A0Stuff=C2=A0in handy email form, right in your inbox, please=C2=A0<a= href=3D"https://links.message.bloomberg.com/s/c/nks7xcD6UkhA6kC_eKE-7cfp-R= _xXUpi4HKwec_SCADT7dMWEGNkXwpVqBVxR3D_6Fglgg0_jpQF-At2IaSnWPDfYfxxz9XNEAaXW= Tdjf6shXRwB09ww2-iCF317avReRBzhcH41m3lny5_0JgyZ04fd6vya9fZMwaF7Aj049cs8V99s= -8b6DZq1j1nnRwHPq6BFxe04rxZFTmCo5fIKp1XAB4wL3Yh5wnnkCRKRAbg_lhK9UEYmO8uAoFi= cP5t_3nlS0wEb5d27RLnJybtQpgoU8qsaCzUqXPuWF6gf-WKfkFznXQwVuR1Z6xei9oC5GSOAyP= 5q_Udz7ZUXg2zm2h-6_m5-vhTNT3ev7ozoV85VeHXmO5KkYZeTAci1o2u4HJ_I1-UW4XJO546bR= dzw9CRZRsUlpFXEOmMcegfq8jiNUNi9yV1YhFYIC39VU9t948ssFH_6WHOpxzx6qet1xGxj9hqM= RoGBRks0Tn4arzs_9D_M4PwOuZw6_-CKZJRbiKcmdyyXoyrPAs2BKEppnPYunqVNs5fKYPIjOO4= 6495jgq4PSXl6R91u_I8uIDI37KLUWOK7VCEqrL8L18w/YaVDeprKDQX5zgmzwMZzsPSpb2w4R7= Um/6" target=3D"_blank" style=3D"color: #000000; text-decoration: none !imp= ortant; border-bottom-width: 1px; border-bottom-color: #000000; border-bott= om-style: solid; background-color: #ccc;">subscribe at this link</a>. Or yo= u can subscribe to Money Stuff and other great Bloomberg newsletters <a hre= f=3D"https://links.message.bloomberg.com/s/c/nnpqOw0j-L4-aEc8aS1c8gYaFOXqmC= RwF4A0-GkoifvbY4jk3ty7Y1rCrodou4TeERjLCyKZtxf-gbqE0SW3HbtZvO1sa-YEdYMMtukND= GhfP3NpuIiG3ZFxHFR3HRrv3n6h7kkY58a3GY_bi0u7Fg592WfMFIpTMbRKah8FV-PDrKo3QB5I= QzEkTaKJvFEuvnLXy-MPVcNBOJbqja_UCkM064o4-AmsyDzAULa3rYWmQRMjpnMa_iXDp5d1KtX= xD1cWF1Ev0oOF86TgaX6k0JdNRp57XeZ9GVmucaFSFZ1qTOCtRor6ANvU55GkvdXS9qnVPNTBE-= 66UrXRPe7YCcO0dE9B4sv_SksHKlbj9oeqGSAxhRUvnrJjLMJaG04mLHafDSCNJjSHLG080aDkQ= _B02hFzzKvTb60TPEcS/2FyOqBVy7DZL3082G10H6UP8K05obAvk/6" itemprop=3D"StoryLi= nk" itemscope=3D"itemscope" style=3D"color: #000000; text-decoration: none = !important; border-bottom-width: 1px; border-bottom-color: #000000; border-= bottom-style: solid; background-color: #ccc;">here</a>. Thanks!</em></span>= </p> <div id=3D"footnote-1" style=3D"font-style: italic;"> <p style=3D"marg= in: 16px 0;">[1] See <a href=3D"https://links.message.bloomberg.com/s/c/upS= NUat3A8hgn0qrcwtB86mKMiXDou9HlHIAuAbSq7jjqH5TriMNtg36ZgZTNd8krE0ywHMfg1qru7= NaN12lcb0ITvjTwfqoUGhAcCvQwL-rC82siZTHPVDIqRscbO0jzpLCXlIrgQ7e72ol8iO0oGMnT= QSymA9ljGyH5YThK_Sb7sXxadLBBiNKGjzx9MMc9Iyv7m_c8PLAhHbct65swwDVjseaff6sEkhd= xOcDJ7VeYteTGjcJ7Zn8uiTgGSx5oTK_hg31chEY09rDMKHflKxaBYTiC8y05Ri4oi4WAyOWADd= lvcXm8XIDAP0lLLTNLJHRJHVOq6H-_YVY4I0YguXDA6Su37UAeD4KFRp2JuRj6Ap6NHqn670aEj= tqJE6TCqRnkDxXjNMOooquadh_5qyCdK0NqFyGfcaLkqzoO0p9bOdPjIWPLPNsOPM/CfvR8cLef= HSOxDkd0lDk6_-uvdily1EV/6" itemprop=3D"StoryLink" itemscope=3D"itemscope" t= arget=3D"_blank" style=3D"color: #000000; text-decoration: none !important;= border-bottom-width: 1px; border-bottom-color: #000000; border-bottom-styl= e: solid; background-color: #ccc;">Section 3(a)(68)</a> of the Exchange Act= (defining =E2=80=9Csecurity-based swap=E2=80=9D) and <a href=3D"https://li= nks.message.bloomberg.com/s/c/MxGxaAxpVvTVI-iyBYG1xb50ZNkrbRFlFJqjj9TWDayZT= QFzPFaORv6dQ3b-FQCtLQu57oIskBLyhuRh1M0furoUPJfLpjDsZPd7aHBBDClQp7p4Vn0ht327= _JWJpEt_WE9JpjNv2TFJ-3gFPUtTR8M8whiCZI4mdW80SyhtDHuj0dGKhPuoRLoPj2swWC9a9vr= 9Xzk705Or07A5F1jVi_NzLdD0NkCSjS6rQItcOMUKckCu3V3jK1p5i_vMpmHomtft8XGFtWaC8Z= hhDP4f0br0DJwMC5GdpTUHoz7y2rIBNLxt3tP5URMEpcyOBHVh_WQlYiN_Groxj8UBzpnd1pqgF= ijTaNY4kmbemloM9dmFRVH652-5r5FL5e-ISiqixyanGrI6Bcpf6TiW-V1qHNjcpvzzisB3w1ks= 423ZGhIki80jwspCCw/Yf7MU1Tm_9_Kd_UdLqb1GczpZkoB9d_t/6" itemprop=3D"StoryLin= k" itemscope=3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-= decoration: none !important; border-bottom-width: 1px; border-bottom-color:= #000000; border-bottom-style: solid; background-color: #ccc;">Section 1a(4= 7)</a> of the Commodity Exchange Act (defining =E2=80=9Cswap=E2=80=9D). In = particular a swap includes =E2=80=9Cany agreement, contract, or transaction= =E2=80=A6 that provides on an executory basis for the exchange, on a fixed= or contingent basis, of 1 or more payments based on the value or level of = 1 or more =E2=80=A6 securities.=E2=80=9D It also includes *options* transac= tions, and this bet is essentially a <a href=3D"https://links.message.bloom= berg.com/s/c/Jleseuh412zr9GNU1Vdq_z0T-aXY02Y1DNOPp3Gb6AfIFFBkVnVRScpVEruzpg= IqkSsb6mjQcteVEfEcXxjF22_XDSsKOw6rC3VLNlLvdPiF5GgD0QkPGyb9iyWNRzGHxrqw5rpGt= rTYOP3HU0Qv1VJ8dVEyAxOp6QUgzpKrbfgZJ917qeQEbPj0gNpZibn8FQoiz3BWf_b8pyNrf9mG= WD9oO_sZxJyd_tnppacjeRNKnHqAiYqNZcbKzTwhkhe31Bur6-pRqTPcKW8T8jS2NC1RvIghNlf= ambvRnEXrhv8OQ-NwXWy8fTA7QuxGF4XbKEPrPOFMTsAFJNVg3R0qJnN5N5VUOf8WcaDuBi6uvC= aH8-kyfcsZzQXJaZks27XXqPJeFmVwh8Whba0ebUV36wG40s8QB1zRbDjGaoXIhhGWvzdByIQ/N= NzBl75juaLOS1KCUbBkOiVdl_26WOVA/6" itemprop=3D"StoryLink" itemscope=3D"item= scope" target=3D"_blank" style=3D"color: #000000; text-decoration: none !im= portant; border-bottom-width: 1px; border-bottom-color: #000000; border-bot= tom-style: solid; background-color: #ccc;">binary (or digital) option</a>.<= /p> </div> <div id=3D"footnote-2" style=3D"font-style: italic;"> <p style= =3D"margin: 16px 0;">[2] Here is a 2023 US Securities and Exchange Commissi= on <a href=3D"https://links.message.bloomberg.com/s/c/uKOlpR_21eu0NuSBY9bgp= yUgMdMEyIscyg4BMyT9KeysfLy6FPsmBz7b8NYzZIylLsJ5URoRsjqS-LqBv713DUsPitTcxtqt= 6_ALlkw2i6lqM2fJIp4T2_VtB4qm_0Qb9ToY1qcCsZKtdXieN7TyFhBN8T8yLpiSG00SSrxjKbC= PhLy1Y5W-dC1-Bjkdoywb-gsrQhLfaBcHckXt7MqE6U5sw_Dozty2OQvw0T-66e4kn6V8xQVLDM= EkLwmZpm-puouXIdJOhGVPcG3EFf-5nQdfjYMkqTjeM9T6X1tXfywao-kmuLYpetJ0vLPjqncAa= EPMtRUWRIQuWuA312GiZVQm-Z3h_pwPd4HdizRbjyc1PG1lZVwbxDUbsAdLECNocV4Yvab9zj2s= A6e5KuyqGl_12ocNP7GZ2Xt8G-wgnXe5v5An6TIMZrbfgeLHgwYFCdFwzf2UuGPYCn5esig/nyx= sd-izstO3on8Z1HqBjBLy_8WMEgC0/6" itemprop=3D"StoryLink" itemscope=3D"itemsc= ope" target=3D"_blank" style=3D"color: #000000; text-decoration: none !impo= rtant; border-bottom-width: 1px; border-bottom-color: #000000; border-botto= m-style: solid; background-color: #ccc;">final rule</a> about the =E2=80=9C= Prohibition Against Fraud, Manipulation, or Deception in Connection with Se= curity-Based Swaps,=E2=80=9D but actually you don=E2=80=99t need the new ru= le: =E2=80=9CThe Dodd-Frank Act [of 2010] amended the definition of =E2=80= =98security=E2=80=99 in section 3(a)(10) of the Exchange Act and section 2(= a)(1) of the Securities Act to include security-based swaps. As a result, s= ecurity-based swaps, because they are securities, are subject to the genera= l antifraud and anti-manipulation provisions of the Federal securities laws= , including sections 9(a) and 10(b) of the Exchange Act, and 17 CFR 240.10b= -5 (=E2=80=98Rule 10b-5=E2=80=99) thereunder.=E2=80=9D Section 10(b) and Ru= le 10b-5 are what prohibit insider trading.</p> </div> <div id=3D"footnote-= 3" style=3D"font-style: italic;"> <p style=3D"margin: 16px 0;">[3] You don= =E2=80=99t, like, buy $1 million of stock: The bet is a digital option, so = your hedge will be dynamic, nonlinear, and a little weird. But Bloomberg (p= age OV) will happily price a digital stock option for you, and give you a d= elta, which is the amount of stock you should buy. In any case the CFDs in = the actual case are delta-one bets, so they could be (statically) hedged by= simply buying the underlying shares.</p> </div> <div id=3D"footnote-4" sty= le=3D"font-style: italic;"> <p style=3D"margin: 16px 0;">[4] The Tether and= bribery examples are about the US becoming less interested in enforcing it= s laws abroad, but also other countries might be less interested in enforci= ng US laws. (=E2=80=9CAmerica First Is Quickly Becoming <a href=3D"https://= links.message.bloomberg.com/s/c/OFU_K1E0HIzLuDNMbXW9MBhHZJ9IuZ7lT2kzL-hDIlg= VFvytVrVFPIKL88_ff0iNvOIZu7N2h1HonqmUIxyD7FnNo68lPH12-oFxt7W-u1VQw_gKtOwehL= E1zjbxbxcgekrnjkR601o9mYlM-YDFtOZSFP7nmUOp85f0QSaxOS-1ovtD5HuPwO0HjXMvt_lfs= YSl7RugYdBonluYShNoE6VcUHbWOL-Wglehd99z-oxMxWDayTtxNUfEIFbDkaBpXL-C5zokz6Qa= vUlkKJrbFcH5COJe-sA4bHM2sJVY_yn5kA77Wr_ZRiAEYdWYm51X-FH9u-He-gJsgVIMZwVUJUX= oBMuU1mZkmk14jabq2DfLoP679Q8kiT5_VzQ/Iew2JbKBNjiSSToiaug76XLBNyzI8D0K/6" it= emprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" style=3D"col= or: #000000; text-decoration: none !important; border-bottom-width: 1px; bo= rder-bottom-color: #000000; border-bottom-style: solid; background-color: #= ccc;"> America Alone</a>,=E2=80=9D writes my Bloomberg Opinion colleague An= dreas Kluth.) People have speculated for years that America=E2=80=99s use o= f the dollar system to enforce its policy goals abroad might backfire; =E2= =80=9C<a href=3D"https://links.message.bloomberg.com/s/c/bdb5rsOyMxxJXbPMq5= dcT_9mFMBhrrkeKvheBaKlV3muElj3PCA1LFZZ9E1oayqPFC5zV_JZED_Mm1VO932Wnwgy_GMXk= 8rGyoYRE_RNOAEQB8BUomNQARY0KX-_wLJCAPaQ5-oQOaDlRYtkJMRrqizMGyYhmUgaDxZ9l1rr= MxCp6KBBb_1_ItpiwShu8whDBNvcg2XA1k4DIqDJAeQMP7Gltbe9TFauxMMkFtHzQdmKZ3e8Brn= Bu-o73eptFNkqpzmQ1MERyPZFcC1h5NUbMNXc_T7ZuDHTWpdne-xlD4AB4v7wZf2P6HQs8j7dnF= 7xnF0Pwvgj6uwlR7CjbCeSnSb342uhfHInWrxhkCKLxrz53rC9UHw0WygMmHDLYpkreWktPRBTu= iyd-fGgKuYA-_4qBjcVFQkFXzMpHgBWYbVmMUGXJOVwsBhmMjHNscLYBPqzTRHMUGcYvVj53C4h= CpuewZwOhDaOB55nmZ7w-SYJaggW54ShJt6kgA2R7aua27IhJz7SQn-TBNrE4t_ZbA/bAfk2dek= OPGiAfyIsZudTDoTFaaSPmk3/6" itemprop=3D"StoryLink" itemscope=3D"itemscope" = target=3D"_blank" style=3D"color: #000000; text-decoration: none !important= ; border-bottom-width: 1px; border-bottom-color: #000000; border-bottom-sty= le: solid; background-color: #ccc;">Paper Soldiers: How the Weaponization o= f the Dollar Changed the World Order</a>=E2=80=9D is the title of my Bloomb= erg colleague Saleha Mohsin=E2=80=99s book on the subject.</p> </div> <div = id=3D"footnote-5" style=3D"font-style: italic;"> <p style=3D"margin: 16px 0= ;">[5] It is, for instance, roughly <a href=3D"https://links.message.bloomb= erg.com/s/c/HKIwMSHQ_O3zZptUizxFxoT4qrqVd5PUe0zz0mrZm5lo0ehxc_eLNT8aqL-N0sa= iiiFI5CvmS5P09g-r-Lv3tQ33VhXgv4Gx5z_Q9QsMQZhRQMaMv74kBHkreUtCkVkFsW4RUyFP14= g_ss9eTF1pO1wf_7ZxB3WDlprYPK80fnxXpmjAFB_oBK3JPRwSkRTnl0Vnur4Uf-f7L-8jgqUxs= QY4wMCEHw2JhRBSdx-2h_bu74W-CdKNpcUsm4mLMRoYgZTWw4qJ_N_GznEITS8CsSJih3R1b1QT= oGhzKbTE35yHN7ePEbP531Tq_5MOpchE5ZGuS-gM2XC9Em6xJHUwYkmOe7ywUTqGI56EplUl9Sa= EiRYeN1tLurRFQ3kxwiJ9TyIBp0d9cShaELZwQkYa2DacVoI2SPveHkcwIyI3HltRBlxxKeTSOn= 2D8lffoWkJawTI_w0eEw_DLpTF9U9Yd-el9aq4lCpsjvoMNJ0H8cqZzXim8eRL-f5Wv_KHqfiWL= w7Nk7sF9l-FevLEoe2EMRM7JDsRduj-IADJfO4P7sI_cZHQjvCgvdeN42YtTWoQkaDNOQsFMeCM= mwZtA2ghRFVupec/9N_Ad1h9wcQ2rKI7BzHau6j2bJFk3xM1/6" itemprop=3D"StoryLink" = itemscope=3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-dec= oration: none !important; border-bottom-width: 1px; border-bottom-color: #0= 00000; border-bottom-style: solid; background-color: #ccc;">Warren Buffett= =E2=80=99s financial advice</a>.</p> </div> <div id=3D"footnote-6" style=3D= "font-style: italic;"> <p style=3D"margin: 16px 0;">[6] Disclosure: This wa= s my approach to investing for many years. I was a self-directed Vanguard c= ustomer, using its website to buy and hold boring index funds. In recent ye= ars I have moved to a more full-service platform for reasons suggested in t= he Financial Times story, though I feel sort of sheepish about that. It fee= ls like =E2=80=9Cbuy five index funds from the Vanguard website=E2=80=9D mi= ght be the aesthetically correct choice, *for me*.</p> </div> <div id=3D"fo= otnote-7" style=3D"font-style: italic;"> <p style=3D"margin: 16px 0;">[7] I= n some efficient-markets the-market-portfolio-is-optimal sort of expected w= ay; maybe your adviser will actually get better returns.</p> </div> <div id= =3D"footnote-8" style=3D"font-style: italic;"> <p style=3D"margin: 16px 0;"= >[8] I suppose you could market a lower premium, but that seems like =E2=80= =A6 not in the spirit of the thing. You want a higher premium! Your investo= rs might want a higher premium!</p> </div> </td> </tr> </table> </td> </tr>= <tr> <td style=3D"border-collapse: collapse; mso-table-lspace: 0pt; mso-ta= ble-rspace: 0pt; padding: 0px 10px;"> <table width=3D"100%" border=3D"0" ce= llspacing=3D"0" cellpadding=3D"0"> <tr> <td style=3D"width: 100%; border-co= llapse: collapse; mso-table-lspace: 0pt; mso-table-rspace: 0pt;" width=3D"1= 00%"> <center> <a href=3D"https://links.message.bloomberg.com/s/c/e5De3RVva= fatbrroxveNrH4YXHngjttWVj01XSrGISJ0bDh-u8wRVjVN0-XtCfjC9Ye4jJDlHWeTte6QurP9= Oh9fsYVOKY7NgdnSsYJ5-kbJ3bK-itXDyO1_47sXMj3G7lJYdcCwu6mLU77_t_EWUgd85CX4P_u= YQRkH0D5sZxk_53yDnXLyB7Pgd2BBRJhgsFO-KCfcv-h2MusbmNR33nu1nUsNKLJGrtLUwYX8MO= 8CaHK9DGWyKpR5hnYiK3nocHkmyCntSXRp4uLcxWGyyb-PP7ADLc37AcBH1Hmu-tX9xzfZJau00= URTXM_zkgln8ZubabYsGwXH-w2Jve0OQLzESQHX9g3WSd3YPfKBjkkl0DwPaPyaMgF0wtjm1S9m= AHFcNJ0HC58RRCzIE2iTBZOnVPKp-P2bUi1LFlFChjnqesfwKot899rUEJYJqwjuUpCeSc6t086= Dwg/aWFF3hd8G1z_hJJVubgUAxxWBP9sO9Jb/6" target=3D"_blank"> <!--[if mso]><ta= ble width=3D"550"><tr><td><img alt=3D"Listen to the Money Stuff Podcast" sr= c=3D"https://assets.bwbx.io/images/users/iqjWHBFdfxIU/i6H.ue2bNPOA/v0/-1x-1= .png" width=3D"550"/></td></tr></table> <div style=3D"display:none"><![end= if]--><img src=3D"https://assets.bwbx.io/images/users/iqjWHBFdfxIU/i6H.ue2b= NPOA/v0/-1x-1.png" alt=3D"Listen to the Money Stuff Podcast" style=3D"max-w= idth: 550px; 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