On this episode of Okay, Computer.
Dan talks with QED Investors partner Chuckie Reddy about the hit Fintech has taken in 2022 and whether valuations have reached a bottom (6:00), Chuckie’s impressions & lessons from JPMorgan Chase CEO Jamie Dimon after working at the bank for 17 years (16:30), why he thinks Jamie Dimon’s prediction on future interest rate hikes is absolutely correct (20:36), how startups are adapting to the surge in interest rates and inflation (31:30), crypto struggling to recover from its systemic problems (37:05), the risk of a deleveraging event in credit markets (40:20), why more startups are embracing venture debt (45:30), and the biggest differences between working in venture capital versus investment banking (46:40).
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Show Transcript:
Dan Nathan: [00:00:36] Current Ad. All right. It’s Okay, Computer. I’m Dan Nathan. I am here with my guest. Chuckie Reddy he is a partner at QED Investors. He is a venture capitalist focused on fintech. Chuckie, welcome to Okay, Computer. [00:00:50][13.6]
Chuckie Reddy: [00:00:50] Thanks for having me. [00:00:51][0.6]
Dan Nathan: [00:00:51] You know, it’s funny, you and I have gotten to know each other over the last year. Since you become a VC, you have a storied career on the banking side where you get into all that, your name rolls off the tongue a little bit. You’re also one of these guys that ever since I’ve gotten to know you, you always have a smile on your face. It could be like a really bad day in the market or whatever. You just you’re still happy, you’re still in a good mood, and you’re kind of like a fun guy to be out with after like a tough day in the market. Is that fair? Have you heard that before? [00:01:16][24.8]
Chuckie Reddy: [00:01:16] Thanks, man. I really appreciate that. I think it also helps that we both have drinks in our hand. [00:01:20][3.4]
Dan Nathan: [00:01:20] Well, all right. That that that’s actually okay, fine. That’s the root of it. But the other thing I want to say is, like you and I, recently we’ve had a few conversations like this should be a podcast. I’m glad I said that to you like as well. Yeah. So. So here we are. We’re podcasting. [00:01:32][12.4]
Chuckie Reddy: [00:01:33] I love it, it’s my first podcast. [00:01:34][1.2]
Dan Nathan: [00:01:35] Really? [00:01:35][0.0]
Chuckie Reddy: [00:01:36] Yeah. [00:01:36][0.0]
Dan Nathan: [00:01:35] Are you a listener of podcasts? [00:01:36][0.6]
Chuckie Reddy: [00:01:37] I have just started to do that. Really. It’s I was late to the game. [00:01:40][2.9]
Dan Nathan: [00:01:41] What do you generally do you do stuff like sports, entertainment or are you into like stuff as it relates to VC, markets, that sort of stuff. [00:01:46][5.1]
Chuckie Reddy: [00:01:46] It’s been primarily listening to podcasts of my other partners. [00:01:49][2.6]
Dan Nathan: [00:01:49] Okay, fair enough. And I want to get into QED because really interestingly, I’ve known of the firm. I know that they have a specific focus on fintech, which is probably one of the main reasons why you chose, after 17 years at JPMorgan, to join QED, founded by what some pioneers in fintech. I mean, these were personal finance people 30 years ago in the space, correct? [00:02:11][22.2]
Chuckie Reddy: [00:02:12] And that’s right. [00:02:12][0.5]
Dan Nathan: [00:02:13] Yeah. And then just kind of morphing the whole way along started what Capital One financial. [00:02:16][3.8]
Chuckie Reddy: [00:02:17] That’s right. So Nigel Morris co-founded Capital One. He’s a co-founder of QED. His co-founder, Kudi Frank Rotman, was, in my opinion, the father of the subprime card business, was one of the first chief risk officers prior to that even being a role. So they were instrumental in building that business in the nineties and both left in the mid 2000s to go on to do more interesting things around effectively creating the category fintech. [00:02:39][22.0]
Dan Nathan: [00:02:39] Yeah. And again, we’re going to talk about it from a disruption standpoint, from the idea of just here, we’re pretty well banked, but there’s still plenty of stuff to do here. But just looking outside of our shores geographically, I know that you guys have recently made some investments in Africa. You were telling me that the other day. [00:02:54][14.2]
Chuckie Reddy: [00:02:54] Yeah, absolutely. Nigel’s vision for the firm is to be a global firm and to make sure that we’re helping the financial lives of everybody throughout the globe. He personally has a goal of trying to touch a billion lives. [00:03:04][9.5]
Dan Nathan: [00:03:04] Well, sounds like Jack Dorsey. [00:03:05][1.0]
Chuckie Reddy: [00:03:06] Yeah, exactly. [00:03:06][0.4]
Dan Nathan: [00:03:07] But Bitcoin doesn’t fix that. You got you guys are doing it. [00:03:10][3.1]
Chuckie Reddy: [00:03:10] Although Nigel’s definitively the opposite of Jack. [00:03:12][2.2]
Dan Nathan: [00:03:13] Yeah, there you go. That was sarcasm font needed there, Jack. Whenever you want to put that on Twitter, let us know. All right. Let’s do this, though, right now, because it’s been a really funky market over the last, let’s call it year or so. And some of the areas that you guys are focused on at QED have actually saw this huge pull forward during the pandemic in 2020. And if you think about it through the lens of the stock market, we know what some of the largest called fintech names did. I mean, at one point, PayPal had a greater market cap than Bank of America, I think in early 2021. It’s astounding. You were still a banker. You were still sitting in your seat at JPMorgan. You were a managing director in the ABS, the asset backed securities group running securitized products. When you were seeing stuff like that, it must have either got your antennas up wildly or it was thinking about all of the opportunities that you had within your space to get really creative. I’m just curious, what was your mindset back then? [00:04:08][55.7]
Chuckie Reddy: [00:04:09] Yeah, I mean, we just couldn’t believe it, right? Anybody who actually did the math and know anything about finance knew it was a bubble and something like Affirm, which I absolutely love that company and the people that run it. But seeing that stock price run the way it did, it didn’t really make a lot of sense. And so seeing a crash back down to earth and really where it’s trading today also doesn’t make sense. Yeah. So that correction up in the wrong way both ways by somewhere in the middle. And there’s still a lot to prove in that business. And so we’ll see where that goes. But absolutely, financial stocks were in their own bubble and that bubble has definitively deflated. [00:04:40][31.7]
Dan Nathan: [00:04:41] It’s funny you mention Affirm and I guess things like buy now, pay later. I mean, these were like concepts that have been around for a long time. And the fact that for some reason all of a sudden it was treated as some new innovation because of the technology wrapper or however you want to do it, easy onramp or access at payment of sale, you know, whatever it was, all of a sudden, the narratives that were created by maybe analysts, by investors, I think what’s really important we talk about this all the time on this podcast and on on the tape. Sometimes it’s not the bankers fault or it’s not the company’s fault. It’s actually investors fault. What they’re willing to pay for something. Speak to me a little bit about that psychology when you’re sitting in the seat from a banker standpoint, because again, the company was probably not issuing outlandish guidance forward guidance that was getting analysts geeked up and having them raising their estimates and investors willing to pay more for what they were perceiving faster growth. It was just. Investors just running towards the hottest, shiniest little object. [00:05:41][60.4]
Chuckie Reddy: [00:05:42] Yeah, no, absolutely. I mean, I think in any case, and we can talk a little bit more about what I went through in 2008, for example, the discipline really sits with the investors ultimately and now sitting in and investing seat that discipline has to sit with me or with our firm. And it’s one of those things that if you don’t have that or you get caught up with everything that’s going on, it very much is that tool of mania feel to it. And that’s what happened. I think in many cases right in my career we’ve had the tech bubble burst, then we had the oh eight bubble, as I referenced, around subprime mortgage bonds. And again, it happened with. [00:06:15][33.5]
Dan Nathan: [00:06:16] Oh, we’re going to we’re going to get to that because on your resume, it’s a 17 years at JPMorgan, but Bear Stearns is how you got to Jp morgan. And again, that seat in 07 08 must have been pretty fascinating. I will definitely talk about that. But it’s interesting on that point and you said something that I say quite frequently is that things that overshoot to the upside, they tend to do to the downside. So a lot of people are looking at a lot of these stocks in the public markets, fintech names. You know, that’s a really broad way that can describe them. They’re down 70 or 80%. And these are things that went up 300 or 400% off of their COVID lows, some more for that matter. And so where is the bottom? How low can they go? Because multiples will overshoot also. [00:06:56][40.4]
Chuckie Reddy: [00:06:57] Yeah, absolutely. And I think we all probably have the feeling that we’re not at the bottom yet. And as far as the broader market is concerned, yeah. Have we seen the bottom in fintech? Potentially. You know, when you look at the valuations where they were sitting in April and what numbers these companies have produced since then, the growth rates are still quite strong. They’re moving much more towards profitability. So I think we’ve generally put in the lows on fintech or at least we’re pretty close to that. What we haven’t done yet and you probably know a lot more because of your nature of investing in public equities, that the separation between the good and the bad names hasn’t necessarily happened yet. It’s our hope is something like Nubank, which we were very early investors in, has absolutely fantastic numbers and results and has continued to post. Actually, my first boss, Yusuf is of actively now running the day to day operations and the core of that business is doing incredibly well. And so we’re hopeful that that name, for example, will continue to produce results and that will manifest itself in a longer term fashion in the stock price. But that’s something that just takes some time to ferret out. [00:07:57][60.3]
Dan Nathan: [00:07:58] So now in this seat you just mentioned new banks. So, for instance, you have this thought that some of these companies probably took some pretty dramatic action to kind of rationalize costs in what they thought was going to be a sort of difficult environment. Estimates have come down. So now you’re thinking about, okay, you invested in this company very early when it was still private obviously, you thought the secular shifts that we’re going to be these tailwinds for them sometimes. And over your career, have you found this in periods like this? This is where some companies actually find their groove in a way, and they find that kind of equilibrium between the cost structure and kind of what the opportunity is, and therefore they’ll kind of grow into their valuation again. [00:08:35][36.9]
Chuckie Reddy: [00:08:35] Yeah, absolutely. I mean, we’re currently going through the cost cutting cycle throughout every company. They’re getting very generic advice from everybody. You got to cut costs, you got to cut costs. We’re maniacally focused on unit economics, acuity. And so one of the things I spent a lot of time doing in modeling is figuring out what op X makes sense at what amount of scale. And that’s a place where we’re super focused, because if you can’t get over the inflection point at a reasonable amount of scale, then you probably have a business that has flaws in it. That’s starting to become clear where we need to focus energy at each of these companies. [00:09:08][32.7]
Dan Nathan: [00:09:08] Are you starting to see some companies again? Not ones that, let’s say you invested in? Of course not QED, that literally are on the brink, that we have a period that where the overexuberance, as it relates to the build out in this period where money was free, interest rates were really low, and cost of capital obviously was what it was. And when you have that situation, valuations are kind of getting extreme and companies start thinking that they can do no wrong. Are we going to see it go the other way? Are we going to see some companies shut the doors go out of business? I mean, does that have to happen before this whole period is kind of said and done? [00:09:39][31.0]
Chuckie Reddy: [00:09:40] Yeah, absolutely. I mean, we have a portfolio of companies in a been investing since 2008. You’re at any given time going to have fatalities in this companies right if 25% of your portfolio ultimately is zero, that happens with some regular distribution. Now, that probably wasn’t happening as frequently as you would have expected or as quickly. [00:09:58][18.8]
Dan Nathan: [00:09:59] Because of the interest rate cut. [00:10:00][1.0]
Chuckie Reddy: [00:10:01] Because of the interest rate environment which caused this amount of capital come into the business. And also the outsized returns in venture attracted so much capital for so long and there’s been no washout event in the business for many years. I can talk about the history of venture a little bit. Yeah, but ultimately we’re just seeing the tip of the iceberg for what’s being created by the pullback in funds. So many of these companies are still overfunded from when they took checks in in late last year. And so as a result, this cycle is actually could take much longer to play out than people expect. So it’s probably an 18 month cycle before everything fully gets repriced. It’s a long road. We are at the very beginning of that. This was not going to be 2022. We wake up in 2023 and we feel good about what it is. It’s a very healthy process to start weeding things out of the system. That didn’t make sense. [00:10:44][43.5]
Dan Nathan: [00:10:44] Alright. So what happens, though, the billions of dollars that were raised in 2021 that went into VC funds that need to be deployed? Because that’s a really interesting juxtaposition here. You say there’s a lot of companies that are over capitalized. We know that there’s a lot of companies who do want to raise cash, but they don’t want to do it at a down round relative to their last raise. It just seems like there’s still a lot of cash in this system. [00:11:06][21.8]
Chuckie Reddy: [00:11:07] Absolutely. There’s cash in many forms. Right. What you referenced is there’s a tremendous amount of dry powder on the sidelines. To that extent pretty interesting how venture capital seems to work. It’s a little bit more of a groupthink mentality. And so what we’ve seen is people just slam on the brakes. And so while they have a lot of dry powder, they’re literally putting none of it to work. To the extent that companies need capital and they’re quality companies, mostly insider bridge rounds are getting done in order to just get the amount of capital and to get them to the next step. And whether that’s the next series of funding or that’s getting to the end of 2023, that’s kind of the, again, standard advice that people are getting. And so that dry powder has not really gone anywhere. And for a venture cycle where you have three years to invest that money, you don’t have any reason to be jumping on things per se. We’ve tried to invest through the cycle. You know, we’re trying to look for companies that are high quality, regardless of whether it was last year or this year. So we’ve continued to invest capital, albeit at a slower pace than last year. But that dry powder, it’s good then sitting on the sidelines if there’s not a pricing that makes sense for them. [00:12:09][61.7]
Dan Nathan: [00:12:09] So let’s take a step back. So I just said that you were at JPMorgan, you were in the securitized products group. Am I right to suggest that that seat at a large money center bank like JP is about as close to V.C. as you could get within a large financial institution like that? [00:12:24][15.2]
Chuckie Reddy: [00:12:25] Yeah, I mean, I think I had a pretty unique seat within securitized products. I ran our principal finance business, which was taking the firm’s balance sheet, doing interesting things with companies Capital structures primarily focused on consumer finance companies, originally adding single family rental and some of the what I call SFR 2.0 companies to the remit. But using our capital to replace some of the equity capital that would otherwise have been raised ten, 15 years ago. And to the extent that there was a strategic investment opportunity working with our corporate venture type groups to help put that capital to work as well. But more importantly, it was about outcomes for these companies. How do you inflect these companies from series B and C using this money center capital to help them grow into Series D E and IPO ready companies and for the investment bank to take advantage of the fee pot that’s associated with that. And so yeah, I think to extent for consumer finance person outside of being in a fintech VC, it was probably the closest seat. [00:13:17][52.0]
Dan Nathan: [00:13:18] How did it feel? Because Jamie Dimon, the CEO of Jp morgan, has been really critical of fintech and really the lack of regulation around it. And really we know where this is coming from. It’s kind of like he sees the potential disruption coming from one of these startups and it could be multiple startups taking different shots at different parts of this is the largest bank in the world. So I’m just curious how that mesh with some of the work that you were doing with some of these companies? [00:13:41][23.9]
Chuckie Reddy: [00:13:42] Yeah, no, absolutely. And I think every time something like that were to come out certainly didn’t help our clients feel good about us. But I think Jamie’s points around regulatory arbitrage is kind of correct. I think the regulatory system in the U.S. with respect to the way customers are ultimately treated, or at least the products that can be offered to customers, is not keeping up with the times. And so what the CFP is really good at is saying, Hey, like you didn’t disclose this, you didn’t tell the customer and that’s great. And somebody should be watching and making sure the customer can understand what it what it is. But when a bank like JPMorgan is really prevented from being able to go down into low FICO regions to help underserved customers, providing them either banking services or providing them credit services, because the regulators tend to take a much more difficult eye towards a JPMorgan doing that. It leaves room for fintech staff to come in and fill that void. And that’s been fantastic, but would be even better if the regulators are much more proactive about saying, hey, look, there’s a big underserved population. How do we make sure all financial institutions have a roadmap to be able to serve them and not be scared of regulatory scrutiny? [00:14:47][65.2]
Dan Nathan: [00:14:48] Jamie Dimon is not a stranger to regulatory scrutiny if you think about just what the banks have been under since the financial crisis. When you think about who, as a VC, there’s all sorts of different exits. There’s just generally a couple that you’re pretty focused on. Obviously, going public is one and then strategic M&A is another. When you think about the regulatory overhang on Mega-Cap tech stocks, for instance, Meta can’t buy the next social app that’s coming out. It’s just not happening here. What do you think it looks like? Can some of these large banks, investment banks, money center banks, can they just go pluck some of these smaller fintechs? And will that be allowed, especially when they, the large incumbents, see them as really massive disruptors? [00:15:29][41.2]
Chuckie Reddy: [00:15:30] Yeah, no, I think the banks and Jp morgan in particular has been quite acquisitive. And the trouble for the banks is really that some of these products do not fit the regulatory lens. Number one. But number two, it’s really the question about what size of entity can they actually purchase? They have regulatory constraints and taking in a tremendous amount of goodwill will actually change their capital ratios. So it’s somewhat limits the actual purchase price, somewhere from 300 million to upwards of a billion for the biggest banks. But let’s call it 500, 600 million for some of the mid regionals. Who could benefit the most? And that’s a really difficult frame because if you’re a company founder and you are tied to the valuation of that company, that starts at 30 million to 70 million depending on if that seed or in a where you raise capital upwards of 150 million, you return on that investment at 300 million is just not that great for having all the blood, sweat and tears put in to be able to exit there. Now, many companies do find themselves to be very accretive to these franchises, and they can drive a tremendous amount of value, particularly some of these smaller banks, where I think that the stock that they get will actually benefit greatly and there’s more return for them. But that’s really the constraints, I think on why banks are maybe not going to be the biggest acquirers going forward. [00:16:43][73.1]
Dan Nathan: [00:16:44] All right. So give us a little inside scoop here. So you were at JPMorgan for a long time and you were obviously a bear before that. And so you saw him presiding over this acquisition in early oh eight. I mean, this is really before alarm bells were going off in the global financial universe here. But Bear Stearns went under in March of 2008, and JPMorgan came in and bought them for $2 a share initially, and then they just had to recut it at ten. I think history will show that it was just a bargain. I mean, they got big pieces of a great venerable Wall Street bank. They were able to get rid of some of the biggest problems as far as their portfolio in lending and stuff like that. So talk to me a little bit about Jamie Dimon. He’s kind of like sits up here. If there was a mount Rushmore of bankers, there would have been Jp morgan and just Jamie Dimon. Now, like there’s nobody in between. What about the lore of Jamie Dimon? [00:17:36][52.3]
Chuckie Reddy: [00:17:37] People ask me this question all the time and I’ve had some interactions with him over the years. He is the most straightforward person you’ll ever meet. There is literally no BS when it comes to him. The thing I would say about him is that he’s incredibly intelligent and he’s really dialed in in the weeds. I mean, he runs a bank. If you think about each of the divisions of the bank, their investment bank is the same size as Goldman. And he runs a consumer bank that’s the size of another huge consumer franchise. Then he runs his big asset management arm, and then that doesn’t even count wholesale services and all the other institutional custodial products that he’s running. So in many ways, he’s actually if you look at peer institutions, he’s running five of those. But his knowledge of each of the businesses is down to the molecular level. And that’s something that I was always super impressed by when he would call my boss or my boss’s boss and have a mastery of that topic. And he’s really good at ingesting information and quickly making a decision and a definitive decision. [00:18:32][55.1]
Dan Nathan: [00:18:33] Has that changed? Because I think back to about a decade ago when they had that situation in the CIO’s office in London, remember the London Whale and he originally called it a tempest in a teapot, and then he quickly reversed course. And so he was basically dismissing it as some thing that had the potential to kind of bubble up and have broader implications outside of just this group. And I remember thinking back at the time, man, that seemed like a really glib, especially as we’re in the wake of the financial crisis, as we had a rolling debt crisis throughout Europe and this was in London. So was it. He just didn’t see it and it was just glib. And then he did change his tune kind of quickly. And then how you just described him is how most people who know of how he runs that bank or knows him personally, that’s how they speak of him. But maybe it was just a moment in time where just got away from it. [00:19:20][47.9]
Chuckie Reddy: [00:19:21] I was not obviously on the ground or involved in that situation. However, I did work with some of the folks in the CIO office in London. I would have described some of their attitudes to be cavalier in the London office versus the folks in New York at times, however, that was a risk taking mentality that was in that ethos. Again, very different between the New York offices. And ultimately, if you recall, the head of that unit got fired. Yeah. And there was a clawback that was initiated. I’m not sure what ended up happening there, but ultimately he trusts his managers. And so there is a culpability. If you trust the manager, they have to be, what, minding the store. And that was an example where it felt like maybe that was partly not the case. But more importantly, I think he probably made that comment before the position had ballooned the way it did. If you recall on the other side, the other hedge funds, once they figured out there might be a problem, they very quickly moved to explode the position. And you know how that goes when there’s a short squeeze. So that’s exactly where I think it probably was contained. He was reported to that. It was contained and it showed up on his risk report is contained within days. It was probably, you know, much larger. [00:20:23][62.2]
Dan Nathan: [00:20:23] It seemed like a very Goldman thing to do as far as exploding the position. Yeah. And there’s a lot of stories of them kind of getting an inside look on something like that, not helping out one of their peers. [00:20:32][8.7]
Chuckie Reddy: [00:20:32] I can’t speculate there, but I will say, like as a trader, that’s the type of tail risk you’re supposed to obviously worry about. Yeah. And so shame on the trader. Yeah. You never want to get to a place where somebody can put your back against a wall. [00:20:44][11.3]
Dan Nathan: [00:20:44] No doubt. All right. Last thing on Diamond. And what’s important to me about this is that, again, he’s the CEO with probably the longest tenure of any U.S. bank at this point as CEO. Largest bank, $300 billion market cap. It’s down 35% on the year. So the S&P is down 24% on the year. So we could all agree that there was really nothing. And we think about this bear market that we’re in, in this economy that we’re in, that’s kind of pre recessionary. It feels a bit recessionary, but we don’t have an official recession. Why would a bank like J.P. Morgan be underperforming the S&P 500 to the downside? It’s actually led the entire year. The S&P was trading at an all time high on January 2nd or third, and JP’s all time high was made last October. The stock at least started trending lower before the market did, and now it’s outperformed to the downside. There’s a couple of things that I thought were really interesting. In early June, Jamie made some comments about an economic storm that’s coming or a hurricane or something like that, and they reported their Q2 in mid-July. It wasn’t great. The guidance was a little murky. And then just this week, he sat down with a reporter and CNBC in Europe, which I thought was kind of curious. And this is days before they’re going to report their Q3. And he’s talking about a whole host of things, the economy. But he also referenced the stock market where he said that things are about to get bad and they could see the stock market go down 20%, which I thought was really interesting. I guess more importantly is what he said was that next 1% higher in Fed funds rate, now we’re just above 3%. CME Fed Funds Tracker is projecting a 75 basis point hike, which would be their fourth consecutive in four meetings when they meet in November 2nd. So we’ll get to 4% and then just fed fund futures are pricing four and a half percent by early next year. He’s saying that next 1% is going to be really painful. So two questions for you. He seems to be a bit chatty before he reports his quarters, which I think is interesting. And you’d be a fool not to pay attention to him. Okay, that’s one. And the other point is, why did he talk about the stock market? [00:22:41][116.5]
Chuckie Reddy: [00:22:42] Yeah. So let’s start where you started that frame of thinking around Jp morgan’s stock price. Yeah, my thesis around that is that it had exceeded two times book value. And historically, whenever financials go that far, they’re overextended and they’re probably likely due to trade down. And I don’t know what the correlation or causation around recession is around that, but and how long they can stay at that peak. So I think the stock has obviously had to correct for that. I think the market tends to correct for believing that there’s big reserves coming and losses coming in credit books and to some degree like the trading business has been off this year and or the investment banking business. And then more importantly, banks have not been immune from an op x perspective to the salary and wage increases. And so I think the CFO had kind of warned that opex was going to become a bit of a problem. And so the stock price had been pricing in cut stop opex, not increase opex. And so your number one resources humans, of course, then you need to make sure that they’re compensated properly and that just cost a lot of money in cases like this. So I think he’s absolutely correct about the next hundred basis points on the Fed funds rate. And in my career, whenever the Fed funds rate has gotten above 5%, like the whole thing tipped over, we are on this continuum and each additional hundred basis points is going to be geometrically difficult because different asset returns are set up at different levels. And so what a life insurer needs is a fixed amount of yield. And so if you start to surpass that, it starts to change that ebb and flow of the markets. And on the flip side, people that are paying for things like people that borrow money, that starts to really become much more painful and again, a geometric way, it isn’t quite linear. That’s something that’s pretty interesting. And I think he has enough data points to be able to understand even in fact what each hundred basis points of means. [00:24:23][101.7]
Dan Nathan: [00:24:24] So when you were just mentioning that, you’re talking about really the plumbing of the financial system and the way pension funds invest and where they park their money and all that. But what about for consumers? Because he’s got this tremendous look into consumer when you think about in consumer lending. And is he speaking to that to some degree, do you think? [00:24:41][16.7]
Chuckie Reddy: [00:24:42] Yeah to some degree. I mean, he’s probably has a pretty good finger on the pulse around what amount of your daily income goes to certain components? They have probably one of the best databases in the world of what people are spending on and spending habits and trends, albeit much more at the prime customer level. They don’t maybe have as much insight into what’s happening to lower income individuals or people with impaired credit scores. But he absolutely has a tremendous amount of information to look at and sift through. But he’s also very intuitive, having been an actual banker on the ground for this long. He’s not some high inn the sky investment banker that thinks they understand how the world works. He’s very much in the weeds, like I said, understanding what’s going on at the consumer level and how that translates to the economy. [00:25:25][43.1]
Dan Nathan: [00:25:26] One other point here. So on the consumer and again, we know that two thirds of our GDP is consumer. And we also know that, again, the savings from the pandemic basically been depleted. Now we know that there’s been some wage increases, but they have not kept up with inflation. When you look at food, fuel, rents, they’re just kind of going off the charts here a little bit there come in on some levels. We’re seeing fuel come in a little bit. The last piece of the puzzle and what the Fed is really trying to do here by their efforts to kind of raise interest rates and tame inflation, is also bring unemployment up. And so I wonder if they are successful in that we’re three and a half percent. It just tick down in September if they’re successful in that, I wonder how quickly that will push us into a recession. I wonder if that’s what Jamie is also suggesting. That’s kind of the missing piece of the puzzle here. [00:26:11][45.1]
Chuckie Reddy: [00:26:12] I think there’s a lot in what you just said. What I’d say about the data and a recession is that from my perspective, we started seeing a lot of this much earlier than I think the data is suggesting, and I’ll come back to that in a second. But ultimately the data is way lagged. And so I think the hardest thing for me watching the Fed do what they’re doing is they started so late because their data was lagged and now they’re going to end really late because their data is so lagged and then they’re kind of on the run. And I don’t really understand why the data is not showing some of the things we’ve seen. For example, we knew in March that there was demand destruction was already underway. We have a company way flier that actually gives loans to merchants on Amazon for example. I was getting phone calls from my friends in CNBC and saying, hey, we’re hearing Amazon is putting out subleasing on some of their warehouse space. Now, Andy Jassy has now come out and said, hey, we had to prepare. We had no idea which way things were going to break. So we got out a lot of extra warehouse space. We hired a lot of extra people. And by the way, they were the marginal bit on Labor. They were pushing the labor up quite a bit in cost and now they have reverse course. But they started seeing that demand go down and inventories build in March and April. And so here we are in October and that really hasn’t shown up in the data in a material way. That’s just one vector. We obviously watch gas prices go up and down. We know that it’s a long input into so many things, but we really haven’t seen the gas price impact of what happened over the summer of coming down, really show up in the data. And so it’s a really a question now of like if you’re the Fed, how do you time this better? And I think that’s actually a good way for them to restore credibility, is to say, hey, we actually saw something ahead of time and we got in front of it rather than reacting to data. And I understand they’re in a very difficult situation that they have to point to something to say that’s what my decision was based on, and it can’t be a finger in the air or a feeling. And so it’s very hard to time and charge how much of this impact has already happened. [00:28:09][116.7]
Dan Nathan: [00:28:09] Yeah, no. I mean, I think a lot of investors, economists, strategists are pretty well convinced that they’ll probably overstay their welcome on the tightening side of it, just as they did on the on the they’re taking their dovisg stance in 2020 and 2021. All right. Last one on, Jamie. I promise. So then the stock market, why do they mention that? I just thought that was really curious. [00:28:27][18.2]
Chuckie Reddy: [00:28:28] Yeah I mean, look, I think Jamie likes giving guidance. He forms an opinion and he’s willing to share a view. So we get from the management committee on down, hey, this is kind of the House view. It wasn’t always Jamie’s view. It could have been the president’s view or the head of the investment bank or whoever it might be. But you need to take a view because you need to have some perspective based on some information and data on what might happen in order to be able to run the business again ahead of time rather than reactively. Yeah, and I think that’s something that he’s really good at because of what he really ingests from the tremendous amount of information that he’s seeing. That access that I had information in that seat was amazing. I mean, picking up the phone to be able to call anybody across the organization who was the expert in that thing was really powerful. And I think that’s what really they get from being such a scale player. [00:29:14][45.6]
Dan Nathan: [00:29:14] Well, you know, it’s interesting. So just last point on this, if he said it could easily be down 20%. If you look at the S&P 500 3600, it’s down about 25% on the year. We’re starting to see some strategists publish their 2023 or republish or lower, I guess, 2023 earnings estimates for the S&P. Bank of America just said $200. And if you think about where the S&P generally troughs on a multiple basis in a recession bear market, it’s like 14 times so do, 14 times 200. That gets you to 2800. And if you take 3600 miles away, you get it down 20% or so, which makes sense. Okay. So he’s using math. [00:29:53][39.3]
Chuckie Reddy: [00:29:54] Right. I think he’s using math. I’m sure he’s got a view as to what will happen with earnings, what will happen with rates? I mean, I don’t think there’s one vector he doesn’t have a view on. He probably could even tell you what he thinks some of the commodity prices. [00:30:04][10.3]
Dan Nathan: [00:30:43] Current Ad. Mastwrokers Ad. Taboola Ad. Alright. You just mentioned something when you think about the inputs that you’re getting on the consumer. You have all of these portfolio companies. How many QED? [00:32:40][117.0]
Chuckie Reddy: [00:32:42] We’ve invested in about 200. About 130 are active [00:32:44][2.4]
Dan Nathan: [00:32:45] And you think about you and your partners. You’re on the boards of these companies. You’re helping them manage during a really difficult time now, and you’re seeing all these sorts of different inputs or challenges that they’re facing. Talk to me about like, where do you think a lot of these companies, are they is focused on the macro is people like us who podcast or on CNBC or when you guys are in your partners meeting, you’re talking about you’re trying to get that top down view about the environment we’re in. Or generally a lot of these portfolio companies, their managements, they’re just kind of heads down and doing the thing that they’re charged with doing. [00:33:16][31.5]
Chuckie Reddy: [00:33:17] Yeah. So I would say internally, I think of what Nigel Morris and Frank Rotman are doing. They think incredibly long and hard about the macro and I think is they steer the firm. That’s something that they are spending a lot of time thinking about. And that informs, I think, the ground level decisions that me and my partners are making around individual investment decisions. However, we’re playing a long term game and so it isn’t as impactful to us, obviously, as an investment firm that has a 3 to 5 year horizon in our growth funds that I work on primarily and a seven plus year horizon on an early stage one. So market cycles don’t matter as much as long as you have resilient businesses with good unit economics and can weather the storm when interest rate cycles change and credit losses change and things of that nature. When it comes to the individual companies, I think those are big gradients of our founders as far as how tuned they are to the markets. Many of them are building a company at a very early stage where the market factor is actually not that relevant because they’re trying to test for product market fit, they’re trying to figure out with a very small base of customers, do people like this, will people actually eat the dog food? And so that’s a place where I think the macro impact is actually so minimal all the way up to people that are in the later stages, which are now really starting to think about exit and liquidity for their shareholders. And more importantly, they’re running very large franchises. So here, wages make a huge impact to them. You move the needle from 5% wage increase to 10%. All of a sudden that’s a pretty big material change to their margins. So I think the macro impact for those larger companies or later stage companies is being felt. And I think that’s where the transition is happening, where people, CEOs and founders are having to go from not worrying about it to thinking about it in a way that’s very different. The other thing I’ll say, because we have a lot of financial companies is a lot of people were caught short with the rate move and myself included, I would have never told you the tenure would have moved so violently. Having been an avid watcher of the tenure and researcher of the tenure for so long. But it did move very violently and we got caught on hedges in some cases. And so there were many companies that were too small to hedge, of course. And so I don’t think there was much that we could do, but it really impacted the income statements of many companies. And while that’s a point in time and we can fix it, and largely what we did is stay short duration, the lending products that we work on. That was a perfect example of something that you didn’t expect to happen, and nor was any business really built to inherit that big of a move. In Brazil, for example, the benchmark rate from 3% to 13%. That’s something that is a violent, violent move. [00:35:51][154.3]
Dan Nathan: [00:35:52] Yeah, well, I think from basically zero and Fed funds to what’s going to be 4% in just a couple of weeks, I mean, we haven’t seen that sort of move in 40 years and that was over a bigger number, too. When you think about when that happened, I think it was from like high single digits to low teens in the early eighties or something like that. So it’s a great way to think about how investors of all sorts in public and private markets, they just got lulled into this kind of zero rate environment, easy monetary policy, and until they got smacked in the face, no one took it particularly seriously. [00:36:25][32.6]
Chuckie Reddy: [00:36:26] Yeah, no, absolutely. I mean, you and I have been in the markets about the same amount of time. And people, by the time a recession hits or by the time there’s a trade down, people have completely fell asleep at the switch. And they’re, like you said, lulled to sleep. They stopped thinking about risk. They only think about the upside in those cases. And it happens time and time again. And we were an incredibly long bull market here. A lot of people entered the space in the market that weren’t here in 2008. They were either in college or high school or even some cases earlier than that. And so that’s been a fundamental shift that I think it’s very healthy to have these trade down cycles. I think what’s happening right now is actually, quite frankly, weirdly good for the economy. It’s very bad for a part of the economy where what you talked about in wages being kind of flat and food and energy being so expensive where a household that’s 80% of their income inclusive of rent, that starts to become really quite sad that we ended up in this status in the way it’s shifted so quickly that for the financial markets this is a really healthy period of time to sort out things that didn’t make sense. [00:37:24][58.5]
Dan Nathan: [00:37:25] Yeah. So going back to we just mentioned that you were at Bear during the financial crisis. You got bought by JP and we just talked about. Whatever thing that we’re in right now, it doesn’t even feel that bad. I don’t know. Is DEFCON five the worse or DEFCON one the worse? What’s the worse? You know [00:37:39][14.7]
Chuckie Reddy: [00:37:40] I think it’s DEFCON one. [00:37:40][0.6]
Dan Nathan: [00:37:41] Okay, so it feels like we’re DEFCON three and a half. Just because the stock market’s down 25%, it shouldn’t be hair on fire. The S&P was up 28% last year you know what I’m saying so we’re actually kind of correcting some of the ills. And again, you started off this whole conversation by saying anybody who’s been around for a while knew the lunacy of 2021. And it just was. Think about how we started the year in January. I think we did more SPAC volume than we had done the entire prior year. In Q1 of 2021, we did more SPAC volume than the prior like five or ten year. I mean, and we had people selling for $69 million. We had NFT volumes going crazy. We had Bitcoin at 69,000. We had Coinbase trading at whatever $100 billion mark. I mean, it was just insanity all over the place. And so here we are now. A lot of that stuff has been correcting well longer than the S&P 500 is correcting. And now you mentioned this earlier also, we haven’t really seen any issues as it relates to credit yet. Go back to your financial crisis, mine sitting at a place that could have easily gone under. I mean, Lehman did go under six months later or something like that. Is there anything out there right now that has your antennas up, thinking back to where you were 12, 13 years ago and learning what you learned from the financial crisis, being in an institution like that? [00:39:03][82.3]
Chuckie Reddy: [00:39:04] That’s a really great question. I mean, I think I’m now after it happening enough times, just like waiting for shoes to drop. Yeah. If you asked me in April, I was starting to feel like the crypto market could have easily tripped into that. You know, like. [00:39:17][13.0]
Dan Nathan: [00:39:17] You thought there was potentially systemic risk due to leverage or due to one of these stablecoins breaking or. [00:39:22][4.9]
Chuckie Reddy: [00:39:22] Something. I mean, I think there was systemic problems in that. It was fortunately was self-contained in crypto and that kind of was its own ecosystem. But I think it was systemic. Ultimately, if it wasn’t for FTX, you might have a very different outcome. [00:39:34][11.3]
Dan Nathan: [00:39:34] Which just, you know, a footnote here when we’ll talk about another pod, I mean, there’s no way this SBF FTX thing, like he’s the savior of the crypto markets, like something funky is going to be going on there. [00:39:43][9.4]
Chuckie Reddy: [00:39:44] Well, either way, I think if they had the next shoe to follow was potentially the prime broker within that ecosystem. That would have felt like the Lehman moment, if you will. And I definitely started making that reference in April that didn’t ultimately prove out, and that partly didn’t prove out because there was so much capital in that system that had been sitting on the sidelines that could be foisted in that. And there’s a genuine belief that you hold in that market, but that market’s somewhat irrelevant to what everyday life is like. I would say that the reason the economy, why it doesn’t feel that bad to you or I is because unemployment is where it is. And so I think that is been super critical throughout my entire life. When unemployment felt very high in the eighties, people didn’t have jobs. Crime goes up. People feel terrible about what’s going on with their neighbors and their friends and their family. Making sure that we have good employment and quality employment too is really important from public policy perspective, but also just the way we feel on a day to day basis. And the stock market should not be the arbiter of like what the economy should feel like to you per se. But this is a situation where if you think about what could happen, ultimately, I think the credit markets are always the big harbinger. And so the credit markets are the leading indicator of like how bad things are going to be. So far, the credit markets have been fairly orderly in the way they’ve operated, with the exception of maybe the mortgage market, which the spreads are at all time wides. And that’s largely driven by what’s happening from a QT perspective. But I still think that there’s an opportunity for there to be a de-leveraging event in one of the credit markets. Now, I don’t think it’ll probably happen, but there is definitely an increasing risk of that. And if that happens, it’s a really interesting question. What will the Fed do? As you know, since 2008 [00:41:30][106.1]
Dan Nathan: [00:41:31] We know exactly what they’re going to do. [00:41:32][0.8]
Chuckie Reddy: [00:41:32] The Fed’s playbook has been a total open the. [00:41:34][2.4]
Dan Nathan: [00:41:34] Wall, but it’s funny. Jeffrey Gundlach at DoubleLine, I think he tweeted this a couple of weeks ago. He actually pointed to an ETF that, like 98% of investors have no idea what it is like, but the iShares IBEX investment grade corporate bond ETF, and he highlighted the fact that it is trading below its lows during the pandemic. In Q1, Q2 of 2020, when we were clearly in a black hole, no one knew. I mean, there were obviously forecasts that we could have had credit events all over the place. That’s why the Fed flooded the zone. Right, with monetary and all the fiscal that we had from Congress. So when you think about the fact that the investment grade corporate bond ETF is down 22% on the year and the S&P is down 25% on the year, isn’t it signaling something? [00:42:22][47.6]
Chuckie Reddy: [00:42:23] Well, I mean, that ETF, my guess is has some duration to it. So the actual base rate is part of that move. Be curious to see how much of it is base rate versus spread. And in March of 2020, IGC moved from 70 to 140 or something like that. But the Fed installed the quickly because they didn’t really know what to do and they didn’t know what was going to happen because it was an unprecedented situation and they didn’t want to have to dig out of a hole. Now, remember, in 2008, the longest pole that they had to dig themselves out of was people’s underwater home equity. And that was a huge overhang for a very, very long time and took a long time to unwind. That’s probably why they were so accommodative for so long, you know, to encourage house prices to grow. This time around, I think you have to figure out if you’re the Fed while you’re trying to raise rates, while you’re trying to pull money out of the system, can you actually put a Fed put in for IG credit, which feels to me like that doesn’t make a whole lot of sense or high yield credit, which is like kind of like a bailout for. [00:43:21][57.7]
Dan Nathan: [00:43:21] Yeah, but they were buying those ETFs actually to give optical support. This was during 2020. [00:43:26][4.9]
Chuckie Reddy: [00:43:27] Because that’s where the liquidity was coming out of the system. And so that’s what they’re trying to do, is make sure there’s an operation of orderly liquidation that needs to happen. And I think that is I don’t know if that’s part of their mandate per se, but it obviously is something that’s a band aid that they can play. [00:43:41][14.5]
Dan Nathan: [00:43:42] I’ll tell you one thing than just talking to you for the last 45 minutes, the companies that you sit on the boards of and advise. And I think when I look at the pedigree of all of your partners at QED, you’re all former operators for the most part. I think those portfolio companies are very lucky in times like this to have guys and gals like you to be able to help them through this thing. Because, again, you said there’s a couple of times you’re in this conversation, this is complicated stuff and you happen to be focused in a part of the tech ecosystem that’s a lot more complicated than making some social picture app or something like that, right? I mean. [00:44:14][31.4]
Chuckie Reddy: [00:44:14] Although I still wish I owned a bunch of monkey JPEGs, but. [00:44:16][2.2]
Dan Nathan: [00:44:17] All right. Do you guys have speaking hard pivot to crypto or do you guys have a house view on crypto? [00:44:24][6.6]
Chuckie Reddy: [00:44:25] Yeah. I mean, I don’t know if we formed a house view per se. I can tell you we haven’t participated in tokens thus far. [00:44:31][5.9]
Dan Nathan: [00:44:31] Have not? [00:44:32][0.2]
Chuckie Reddy: [00:44:32] Have not. We’ve largely stuck to picks and shovels in the ecosystem, things we understand, utilities, if you will, so far. And we have bitso in Mexico, which is the Coinbase of Mexico, Shake Pay and Canada, which is kind of like a neobank. And we have some companies that have some crypto things going on under the covers. And when I talk about crypto, what I really feel like it is, is the technology. And I think that’s where our house view starts to become important, which is that this technology’s not going away. This technology’s there to reduce friction in the system. And actually fintech in general, the ethos of fintech is to reduce friction in the system, make things cheaper, make things easier, include more customers. And so to the extent that we can use this technology within even the companies we have today, if not all the companies are coming in the future, we have to be, as you said, we’re operators and we are trying to give the best advice given anywhere. We have to know what this technology is. We need to know how to use it and we need to be able to tell our companies where we think it could be helpful. It’s up to them to take the advice, of course, but I think it’s coming very quickly. I think it’s something that everybody, regardless of what part of the financial ecosystem you’re in, have to really understand it and you have to be ready to embrace it. [00:45:39][66.8]
Dan Nathan: [00:45:39] I saw this on TechCrunch today. Charli D’amelio endorsed FinTech step borrows 300 million to bring crypto to kids now said borrows isn’t that fascinating? And I didn’t even click through it because you don’t even know who Charli D’amelio is. I do because I have teenage daughters. She was like TikTok, famous during the pandemic. [00:45:56][17.3]
Chuckie Reddy: [00:45:57] She is like a venture. [00:45:58][0.6]
Dan Nathan: [00:45:58] Oh, now. Okay, so you know who she is? [00:45:59][1.4]
Chuckie Reddy: [00:46:00] Well, I don’t know her, but if she wants to invest in fintech, she should call us. [00:46:03][3.2]
Dan Nathan: [00:46:03] But isn’t that interesting? This is fintech step borrows and we’re going have to read into that. But again, do we really need crypto for kids? I don’t know. I just thought that was kind of a funny headline. [00:46:12][8.6]
Chuckie Reddy: [00:46:12] Yeah, I mean, like kids is an interesting application. So if you believe that you’re going to be instead of typing in your 10,000 password reset, you’re going to be logging in with an NFT wallet to set up credentials going forward. Then maybe it’s good for kids, right? It’s good for kids to be able to keep all their things in one place. There’s technologies that could be relevant. But yes. Does a kid need to be trading bitcoin? No. But they probably don’t need be trading bitcoin the same way they don’t need be trading ten year treasury ultras. [00:46:38][25.6]
Dan Nathan: [00:46:38] Right. So and again, you probably thought as being a little cynical as a former securities product guy at a bank, I mean, so debt financing for private companies and we’re hearing it more and more thoughts on that. [00:46:48][9.6]
Chuckie Reddy: [00:46:48] It’s a double edged sword. So I think in the cases in which you can raise equity because you’re a quality company, that’s probably the preferred route and earlier stages of the company. As the company matures and it becomes more known what the vectors and the outcomes are going to be, it becomes more relevant to get that or if you have actual assets. So in the case of one of our portfolio companies, wander, we’ve talked about before, I know of some drinks. This is a great company. For example, they’re we’re working with World Class Investment Bank to provide financing directly on the homes. And so that’s a place where it makes a tremendous amount of sense to take on the debt. And I think we try to make sure that CEOs understand what the upside and the downside of taking debt is. While it is cheaper, it obviously comes with some handcuffs. And as long as would CEO and founders feel very comfortable with their numbers, very comfortable with being able to hit milestones, the debt will be useful rather than company blow up risk or, you know, hugely expensive. Yeah, but the blow up risk is really the problem. [00:47:45][56.2]
Dan Nathan: [00:47:45] Yeah. All right. Last thing again, a little more than a year as a VC, you’ve had this nice, long career on the banking side. Give it to me. What’s it been like? What’s it been like? [00:47:54][9.3]
Chuckie Reddy: [00:47:55] Well, it’s been great to rejoin some male Capital One colleagues. That’s been fantastic. And I love my partners. And I think the firm I joined was it was a great home. [00:48:02][6.8]
Dan Nathan: [00:48:02] It’s a pretty cool bookend. You started the Capital One Financial. Right out of college in the mid-nineties. [00:48:07][4.9]
Chuckie Reddy: [00:48:07] Yeah. Bill Cilluffo, one of our main partners who runs our early stage investing. He came to the University of Virginia and interviewed me when I was 17 years old. And it’s crazy. I mean, I got the job I owe my entire career to that moment. He gave me a job as an intern. [00:48:21][13.9]
Dan Nathan: [00:48:22] Oh, you’re like Doogie Howser or something. 17 years old in college. [00:48:25][2.3]
Chuckie Reddy: [00:48:25] You know, my dad put me ahead of kindergarten. I skipped kindergarten. So I don’t know if that counts. [00:48:30][4.7]
Dan Nathan: [00:48:30] So he was really smart. [00:48:31][0.6]
Chuckie Reddy: [00:48:31] We skipped my last year high school anyway. Long story. And over the summer, I met Nigel and Frank. So that kind of rounds out our management committee. In fact, I actually sat outside Tommy Blanchard’s office, who’s our CEO. We joined after I did. So it’s crazy to think I’m now 41. I joined when I was 40 that I knew these people for 22 years. Hopefully this is my last job. But yeah, to start my career and my career with people I have so much respect for is really cool and very personally fulfilling. So that’s been great. Without question. I think the companies and the founders is something that drives all of us in this business. And I’m literally working with a 24 year old. [00:49:07][35.3]
Dan Nathan: [00:49:07] Yeah. [00:49:07][0.0]
Chuckie Reddy: [00:49:07] Who’s it’s his third startup so John Andrew and whistle if you listen to this podcast I’m talking about you he’s absolutely incredible. 24 Like when I was 24, I was trying to figure out where is my career going in the next year and how do I get paid $10,000 more? Yeah, he’s trying to build a world class company. You know, that’s really impressive. The median founder age I found is probably in the late twenties to early thirties. It’s really impressive what people are doing and taking that risk and putting themselves through a very grueling process in which the vast majority of people do not make it. So we’re talking about a 90 plus percent ultimate rate of not getting to those billion dollar outcomes are big outcomes. I actually don’t quite know that statistic, but I will say that it’s a lot of work. One of the things I think we try to pride ourselves in, as you mentioned, is operators is spending so much time with the companies. We think that changes outcomes. We think that kinks the curve that we think that makes us generate alpha using our knowledge rather than just the initial investment decision, which we do our best to do it right there. But kicking the curve is really important and that’s just a lot of work. And so I will tell you that I thought I was definitely going to have an easier life, an easier job, and it’s been a lot more work, but certainly very rewarding to do it with people that immediately give you feedback, saying like that was really helpful or you were wrong and I was right or whatever it is. Like, it’s great because you have that rapport with people and it’s just been really interesting. Gotten to meet guys like you through this process. I mean, I’m really thankful for that. [00:50:34][86.9]
Dan Nathan: [00:50:35] Yeah. I mean, listen, you know, I imagine it’s been re-energizing. You had this nice long stint. You probably did as much as you could probably do within that group there, within a big bank. And the idea of going to the other side and really kind of rolling your sleeves up and really helping people solve big problems. And you guys are going after companies and founders who are looking to do that within the financial space. So, listen, Chuckie Reddy I really enjoyed this conversation. I’ve enjoyed meeting you over the last year. Shout out to my friends at CBS SPG for making the intro, but also, you know, getting to know your firm and the companies you’re invested in and just kind of the ethos of your firm has been pretty interesting for me also. So thanks a lot. I hope you come back. [00:51:15][40.9]
Chuckie Reddy: [00:51:16] Yeah, no, I really appreciate. I love being here. Thanks so much. [00:51:18][2.4]
Dan Nathan: [00:51:19] Thanks again to our presenting sponsor Current and our supporters Masterworks and Taboola for bringing you this episode of okay Computer. If you like what you heard, make sure you hit, follow and leave us a review. It helps people find our show and we want to hear from you. Email us at contact at risk reversal dot com follow and connect with us on Twitter at okay computer pod. We’ll see you next time. [00:51:19][0.0]
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