Jon Glidden - Delta Airlines Pension Fund Turnaround (EP.417)

26:19relative value and fixed income relative value are points of particular focus for us. We've got a pretty substantial allocation of the multi-strats. We do have equity long short specialists. I know that's a bit of a dying industry, but I do think it's possible to develop deep expertise in pretty narrow parts of the market. I know that's what the pod shops suck up, but there's still some folks out there fighting it on their own. And then we've got quite a few macro traders in there as well. them. In the early days, we were like, no credit, no credit. Credit's got too much skew. It's got too much kurtosis.

26:52It was too bad in 08. Nowadays, we actually do let some credit in there, but the derivative overlay looks a lot different. And then we try not to really constrain it that much. The idea here is that unconstrained, talented hedge fund managers have a better chance of beating a risk-free rate than highly constrained, long-only managers have the probability of beating a benchmark. You are investing in hedge funds because you want the best of the best to beat your borrowing costs by looking for market seams all over the globe. We'll typically have around 40 funds at any time. Maybe we'll have five co-invest or something along those lines.

27:27That might sound like a lot to some people. I'm almost 25 years into Portable Alpha. I've seen a lot of the stuff that can go wrong and there's unknown unknowns out there. I don't know what the next degrossing event's going to be, but I know that it exists. I can tell you what the historic correlation between my managers are, but I can also tell you there's going to be environments where they look more correlated than I expect them to look. The only way to get around some of that skew risk, some of that kurtosis risk is to just increase the number of managers that you work with. Some people don't buy into that.

27:57I most definitely do. So within those strategy categories that fit your risk parameters and that goal for diversification to prevent the unknown unknowns. How do you go about deciding who, in your words, is the best of the best? This is something I've got better at through time is really drilling in on the people side. We're looking for a profile, beta 0.1 or lower. There's some great 40 beta managers out there. If you're paying 20 % incentive on 40 beta, you got to be damn good at manager selection. Some people can do it. I can't. That eliminates a lot of the universe. And we've known a lot of the universe for decades.

28:34So a lot of the long established players, and then a lot of the spin outs of the long established players. And then you're just looking for interesting stories as well. Who's out there that might be doing something a little bit different, maybe something that you really haven't heard before. I still have a convert arb manager that's been phenomenal. I don't know how they've been so phenomenal for so long, but we still have some. How about turning to the private markets at 30%, how did you think about how you wanted to invest in that space? The private portfolio was very mature in 1999. By time you get to 2014, it had become immature.

29:10And this is all professional credibility because I'm telling people leverage, derivatives, alpha, 9%, 10%, we can do this. This is going to work. The last thing I want to do is show a bunch of negative time-weighted returns is we're firing up this private market portfolio. So private portfolio. It took a while to build into this. 15 % private equity, 9 % private credit, 6 % private real assets. Within that, for the private equity and the private real assets, 50 % primaries, 30 % secondaries, 20 % co-invest. I want to put some wins on the board. I do not want J-curve. J-Kirk could derail my entire story.

29:57That was the blueprint for the private portfolios. And it's actually still where we are today. So it's been a decade and that structure served us well, but it's probably time to rethink some of those allocations. You didn't mention venture capital in that mix. How'd you think about venture? Want to be very cautious with venture because it is the longest duration asset class, but we targeted in that five to 10 % range of the private equity exposure is about what we wanted venture capital to be. We actually probably do a little bit more venture now, even than we did back then. And venture was mostly primary.

30:31So let's try to get into the best names. And obviously that was phenomenal in 2021. I mean, private equity was pretty phenomenal in 2021 as well. And we've probably paid the price a little bit since then. On the primaries in private equity, what types of managers did you choose? Buyout dominated, especially in those early days, it was very equity-centric exposure. So I've got some private diversifiers. So it's pretty much lower middle market, core middle market, upper middle market, and some of the big ones. So it was buyout-centric, US-centric. So this last 20%, there's hedging, risk parity, there's inflation, there's emerging managers.

31:11How did you think about what the goal is for that group together? I'll start with the hedging at the beginning because that is vital to the story. And this is surreal because I'm sitting there in 2013, sitting with Paul Jacobson and Ed Bastian in the conference room outside of Ed's office. So again, Ed is still the president at the time, and we are building hedging programs together. That gives you an idea of the extent of enterprise risk that continued to come from the pension funds in those days. So we had four or five components to our hedging program. We did some programmatic high certainty stuff.

31:45So we did 90, 75 put spreads. Dependent on what skew was a little bit, we would tweak some of that. We would tweak the attachment points a little bit. We had, call it a LIBOR floor kind of strategy where we were long call options on the two-year part of the LIBOR curve. It was a make money strategy, like in an upward sloping yield curve, you can actually make money on that. But then if rates really collapse, you can make three times, four times, five times your money. Less certainty there, but a lot of convexity that you got for getting it and maybe not quite as much bleed as you would see in a 90-75 put spread.

32:19Third component was long vol. Yes, this is wishing for a little bit of magic here. Can we work with volatility-oriented managers to say, we don't want this part to bleed that much? I don't want to lose more than 10%, more than 15%, more than 20%. And I understand that's going to impact the convexity that I'm able to squeeze out of the positions, but it's also a funded position. Those first two, those are premium spend strategies. With long volatility, you've got capital in there. We also had funded managed futures positions, and this is approximate hedging. And then we actually had some more liquid, less expensive macro managers as well.

33:01If something happens, maybe they'll be on the right side of it. Maybe they'll be on the wrong side of it. But you start to staple all of that stuff together. And there's 4%, 6 % of all of my capital is invested in those strategies. When something happens, and by the way, in March of 2020, something did happen, option profitability, that's going to be the first thing I go. But then is there profitability in long vol? Give me that. Is there profitability in managed futures? Give me that. And then one of the next places you might go is I'm going to hollow out those exposures altogether, give me my capital back as well.

33:35And then as we're thinking about it, we did all of the scenario analysis. What is a bad environment for Delta? When might Delta not be able to stand up to that pledge that they made in those early days, which is we're going to pay the 5 % mandatory. And if you don't hit a 9 % expected return, we're going to stand up and make it like you did make a 9 % return. When might Delta and not be able to honor that. And what do we do in that case? That's the thought process of that other 20%. There's always been risk parity in there. I'm going through my liquidity waterfall. If equities really, really tank, where am I going for money?

34:13I've got my prime. I've got my govies. I've got my enhanced cash. I've got my hedge portfolio. This other stuff, that's the next place I'm going because I've got those two alpha engines. I've got privates and I got portable alpha, and I don't want to touch those. We're going to take a quick break in the action to tell you about SRS Aquium. Want to make sure your M &A processes aren't stuck in the past? Partner with a company that's been defining the future of dealmaking for nearly two decades instead. When it comes to M &A innovation, SRS Aquium has reshaped the way that deals get done, streamlining processes for maximum efficiency and minimum headaches.

34:54Professional shareholder representation, online M &A payments, digital stockholder solicitation, SRS Aquium pioneered each and continues to set the bar for game-changing innovation. So leave the days of disjointed deal management behind and define your future with SRS Aquium, the smartest way to run a deal. Learn more at srsaquium.com. That's S-R-S-A-C-Q-U-I-O-M.com. And now, back to the show. There's a lot of relatively complex strategies going on in that bucket. How did you go about implementing it? My team's amazing. There's only six of us. I've got my deputy CIO, Amanda Kogar, my chief operating officer, Dmitry Varonkov, and my director of investments, Nick Aliff.

35:48The four of us have been together on this journey for over the past 10 years. We've been joined a little bit more recently by Mark Fong Wu and by Madison Woolley. We knew that we needed help from the outset. We're very engaged with hedge funds. We're very engaged with privates. But we've got consultants in both of those places because my team is not going to be able to monitor the entire universe, either on the hedge fund side or the private side. So we need help there. Two more names that were pretty instrumental as we went through this process is Jeff Scott and Omer Tureen. So Jeff spent some time at Dow and he was the CIO out at Alaska Permanent.

36:26Once upon a time, he worked in Microsoft's treasury department as well. Omer worked with Jeff in Microsoft's treasury department and they got it. There's not a lot of people that are like, I understand. And even that first concept, I want to walk on the capital market line, not on the efficient frontier. we need to figure out a way to make that happen. You can try to help me do that, or you can be a believer and you can say, John, you're wrong on this, or you're wrong on that, or do you think about this? So we've always had quite a few consultants. I need other people to argue with me. I need other people to say, you're wrong.

36:59Did you think about this? This is your weakest assumption. Your scenario analysis is wrong here. How do you do this? So trying to align external resources to help augment what we do on the inside. One of the challenges with going out on the capital markets line to achieve higher return is you also have to accept some amount of extra risk. Curious how you think about risk management in this plan. It changed. In the early days, it was don't be a source of a second bankruptcy for Delta. It was that tight, tight, tight integration. How do we try to hit the return targets without really putting Delta in a position that they can't come back from economically?

37:39I think our hedge portfolio got up to be as much as 8 % of plan assets in those days. It was more of an asset only consideration back then. I was in it for sharp as funded status started to increase, but that's when we started to think, what's our gap funded status volatility and stuff like that. But in those early days through 2017, it was tight integration with Delta. We need to keep this plan alive. We want to avoid a second bankruptcy. We want to avoid terminating the plans and having to work with the government and work with PBGC. That is what risk was. So how do we try to get as much return as we can?

38:16And it was that hedging program in understanding this pledge of Delta. They've got to make the mandatory, but we're going to be there to augment if you don't hit the 9%. I mean, that was really risk management, keeping the plan alive in as many scenarios as we possibly could. How'd you think about some of the common levers of risk? it's all related to how much cash are you going to put behind the notional value of your portfolio? What is your derivative overlay look like? What is your net cash position look like? How much of a liquidity waterfall do you have? At some point you start cutting muscle as you go through that.

38:56That's really it. I mean, you've got investment risk and the liquidity risk and the liquidity risk really is what's your hedge portfolio look like and where are you going to go for cash if you can't get it from Delta and you've exhausted everything else, you've got to start looking at your risk parity portfolio, at your inflation hedging portfolio, at your emerging manager portfolio. You've got to start to look at where you're going to draw some of this. Somewhere along the way, you've hit bumps in the road. So you could think of 2011 was a tricky year for some of the hedge fund strategies, certainly in the early time period during COVID, March 2020.

39:29What happened in those interim periods when things probably weren't working along the smooth trajectory of generating returns? Yeah, so I joined in October of 11. So I missed the worst of the euro crisis that was going on back then. 2015 was not a great year. So in terms of total return and alpha generation, and Paul was there and Delta was there. All the hard work of the Delta employees and the thoughtful corporate capital allocation process, Delta did make it whole. And then 2018 was difficult. The fourth quarter was difficult. And we still had a little bit of smart beta, which did not work.

40:07It was great. It was phenomenal for a long time. And then it wasn't, but it wasn't really a challenge. All of the risk management systems that we had in place worked fine. So it never really got that uncomfortable. 2020 is a different story. So why don't you go through 2020? 2019 was a phenomenal year. So funded status organically is probably 75 % or so. we've reduced the notional value of equity in our hedge overlay, but we still have quite a lot. We think we're in pretty good shape. But COVID was tough because COVID was equities down 35 % in five weeks. 35 % isn't necessarily a problem. You combine that with the five weeks and that's a real challenge.

40:49So we had to go through all of the steps. The first thing we did, yield on the tenure got down to like 50 or 60 basis points pretty early in that process. Look, there's no juice left in that trade. Give me all of that. I'm completely unwinding that LIBOR floor strategy. Here's$450 million. Okay, that's good profits. Now, equity's gone below our 70 % attachment point on our put spreads. What's the point of keeping those around? Let's monetize everything. Now, of course, as I'm doing this, the beta of the portfolio is starting to increase because you're unwinding some of the hedge behind this. How's Long Vol doing?

41:27You can take those profits. And that's early. That's like middle March. We had 3 billion in net margin calls around the worst of the COVID timeframe. So we went into COVID reserving about 3 billion in cash behind our derivative portfolio. You've got the one prime directive of portable alpha. Do not let the markets push you out of your beta position, do not let the markets push you out of your alpha positions. That's why that extra 20 % is there and the hedge is there. But we got to the point, okay, now March 19th, 20th, I need the long volatility capital, not just the profits. I need the capital.

42:06Managed futures guys actually did a pretty good job. Give me the profits. That's easy. Give me part of the capital. Which of our macro managers are doing a pretty good job of our separate account. I've got to unwind some of that. Definitely draws on capital, but I was able to pull a billion dollars of profits from the option strategies and from the long vol strategy. So that's 3 billion in cash, 3 billion margin call. I pulled a billion in profits. And then talking about 8 % was kind of the value of my hedging portfolio. I had to unwind$750 million of that or so. And then we get to March 23rd, 2020.

42:43Delta's revenues are down 97%. I can't go to Delta for liquidity. Look, this has been tough. All the hedging has worked way better than we possibly thought it could. We're taking off hedges, which is what we agreed that we would do. When the world goes on sale, we actually want to increase our beta. So we've got that going on. We are in our red zone and this is intraday. We're going to take the rest of our capital back from our managed futures managers, from our separate account macro managers. We're probably going to liquidate the bond portfolios of our diverse and emerging manager program. And I'm going to violate the prime directive.

43:20I'm going to submit a$1 billion redemption request for my portable alpha engine for my hedge funds. So I'm typing this and that was the day that Powell comes out and gives his whatever it takes moment. That was fortunate. So 35 % in five weeks was a challenge. If it would have been 50 % in nine or 10 weeks, it would have been a real challenge. We'd start with the fat, with the profits. You got to start cutting a little bit of muscle and then there's deeper cuts as you go along. It took our funded status. So we were probably at 75 before COVID, got down to 63 at the trough of COVID. We went from 63 to 85 organically in 16 or 18 months with what the markets gave us in 2020 and in 2021.

44:09Portable Alpha was phenomenal. And we were able to actually rescind all of the redemption requests we submitted. As we get into 2021, Delta put out$20 billion in debt. $9 billion of that was backed by the crown jewel, which is the SkyMiles program. They lost their investment grade credit rating. But even by middle 2021, Delta was okay from a cash perspective. And you're starting to see some light at the end of the tunnel on the COVID thing and what corporate cashflow might look like. They're like, take this billion five, let's get up to 92 % funded. It's an ambitious goal to get the two points of alpha.

44:46It's an ambitious goal to get the 10%. In terms of performance, we did from 2011 to 2021 when we got that infusion. Portable Alpha was perfect. It was almost on top of my numbers. That added over 120 basis points per year at the overall plan level. I was probably too ambitious and maybe a little too risk averse on what we did on the private side. So I wanted the privates to give us 120. It actually gave us 60, some of which was because I had to rebuild the portfolio and it took some time to get money in the ground. The plan largely worked. So we compounded at over 10 % from 2011 to 2021. We didn't quite get our 200 basis points of alpha, but we were really close, 180, 190 basis points of alpha.

45:29And then we've really been able to ratchet down the risk from that point. We've gone from 38 to 102. That's where we are today. I'm blown away with the role that Delta plays in this whole story. They've been incredible. It's been such a team effort to get to where we're going. And I'll be curious to see what comes next. So anytime you have a hedging program that works because the market sells off, and as you said, you then tap that liquidity, you have to think about how do you reset it at some point in time? So you get through COVID, your portfolio looks totally different than it did three months ago.

46:06How did you think about recalibrating the program to where you started with this balance between the privates and the liquidity bucket and the hedge funds? The idea was from the outset, the 30 % privates never changes. The 40 % hedge funds never change. The only thing that changes is the nature of the derivative overlay and what we do with that other 20%. So we just reran all of the same calculations and it's like, you know what? We don't need to reserve as much cash anymore. We don't really need equity hedges anymore. Our hedge ratio, 60%, 70%, something like that. So some exposure to a collapse in rates is still a good exposure for us.

46:48So we've been able to change some of what's in that other 20%. But that's it. It was designed that way from the outset. The derivative, the beta overlay, let that change, let the hedge portfolio change. We don't do managed futures anymore. We don't do separate account macro, low costs, highly liquid stuff. We don't do that anymore. We just don't need to. We think we can get to a better overall risk-adjusted return, liquidity-adjusted return from there. As you look back on this path, what do you think were the key drivers of your success in taking this from 30s to 102 % funded? It's Delta. We had a plan.

47:26I'd worked with a man at Wilmington Trust as well. So we've been building this plan together. We talked a lot about what that plan should look like and how can we make it better. And we held it up to Paul Jacobson, Ken Morge, Ed Bastian, board of directors, Jeff Scott, Omer Terrens, phenomenal. Delta making $11 billion of contributions into the plan from 2012 to 2021. Now we paid out 13 billion in benefit payments during that same timeframe, but they offset a majority of the cash outflows of the plan, which allowed the assets to really grow without hardworking Delta employees in that disciplined capital allocation.

48:10We didn't have dividends in those days. We didn't do a lot of buybacks in those days until we got that investment grade credit rating back. Without Delta's steadfast support in this, it wouldn't have happened. And then I think without really trying to hold this plan up to scrutiny, another thing throughout my whole career. Cliff Asness, what do you think about this? I don't know Ray quite as well, but I know a lot of people at Bridgewater. What do you think about this? I've been influenced by you in making this plan. What do you think about this? Where are the weaknesses? It's an awesome thing about being a CIO.

48:42We get to talk to so many brilliant people. It's a tremendous honor and a responsibility to do what we do. I think it's such an amazing Delta story. I'm so proud to have been one part of it. When other folks come to you and look at what's happened and ask you for advice, what are the key things that you tell someone else that's in a similar position to where you were a decade ago? You need to have a governance that embraces this from the outset. Delta was willing to look a little bit different on the investment side because their investment needs were different. And Paul understood that. And Paul got promoted to CFO.

49:24He was the executive champion. And I met with Ed, of course, on a monthly basis. And Ed's had my back this whole time as well. My 13 years at Delta, Ed's always been there to have my back. And then just meet with your committee members one-on-one. Make sure they understand. You've got to be able to tell the story concisely and simply. You've got to be able to tell the story and you've got to be able to give control to your governance. If the governance is not going to accept what you're trying to do, you can't do it. The governance has to buy into what the vision is. How do you reflect back on the original four forces in the investment process that you saw as the potential driver of this?

50:09It's very much still the way I view the world. I mean, it's why we're still 30 % privates. It's why we're still 40 % hedge funds. It's why we're still 140 % is what our asset allocation adds up to. It doesn't matter what the problem is. Our problem now is we want to continue to grow our gap funded status to 105 to 110 to give Delta maximum flexibility. If they want to engage in pension risk transfer, they can do it without any additional cash. If they want to look at ways to use the excess funding in a way that's mutually beneficial to the company and to the company's employees, they'll be in a position to do that as well.

50:44There's all kinds of funky nonlinearities of pension management. And one that we're facing now is we're looking at mandatory contributions. I'll skip as to why it is. But yeah, we don't want gap funded status to go down. We want to grow it gradually and we want to minimize what those mandatory contributions are. If you can start from a place of two points of alpha, everything else is so much easier. And if you can run a more balanced portfolio, if you can run a higher sharp portfolio, it It just makes it easier. It almost doesn't matter what the problem is. You start with your alpha, those first two forces, private force, your portable alpha force.

51:23You combine a more efficient asset allocation by going out on the capital market line a little bit. It's going to make any investment problem somewhat easier. What have you learned along the way from your original process? The biggest one is I thought I was about as pessimistic as I could possibly be, but I wasn't pessimistic enough in terms of we didn't model down 35 in five weeks. I know this lesson. Financial crisis is not a problem for the portfolio that we run today because you get some correlation benefit between stocks and bonds. You got some of that during COVID. You definitely didn't get it in 2022.

51:592022 is tough. How about on the implementation of the strategies? I've known that Delta was going to be headcount constrained on this process. Again, we froze in 06. These are legacy assets. If you want to do this, if you want to have 70 or 75 % of your assets and alternatives, you need a large team of well-paid specialists. And it was clear that that just wasn't going to be able to happen. In a different place, that would have been my preference. That is a more aligned, less expensive way to do things. Couldn't do it there. So you really do need to have the right partners. And we've seen good partners and we've seen partners that didn't quite fit.

52:40So I mean, people will say extension of staff a lot, but I mean it. I want to be able to talk to anyone. Amanda can talk to anyone. Dimitri can talk to anyone. Nick can talk to anyone. Why this manager? What's your process? We like them. Do you like them? You need to have the right partner. And that's a tough model. That's not a great scale model. It's not a great margin model because I am going to be needy in terms of resources and I'm going to be sensitive in terms of cost. And sometimes we've seen models like that that work on our hedge fund side. Everything continues to work great. It's harder to do on the private side.

53:17We've looked at is discretionary the right model? Is quasi discretionary the right model? Is some of the specialty consultants, should they play a role? You've got to find the right partners and you've got to try to use them in the best way you can. and you've got to insert yourself into the process. And then they get bought. Then there's mergers and acquisitions and everything that you've got to try to contend with. What's exciting you for this next stretch? I love alpha. I love beaten benchmarks. It's what gets me out of bed in the morning. I think we've got a slightly better way. It comes with some moats.

53:50Not everybody can do this because not everyone's governance is going to allow them to do this. If you think about this importable alpha and you take the alpha units and the cash units and you report them into those asset class line items, we're in the top percentile bond manager, top percentile credit manager, top decile equity manager. It's all green. We are top decile in everything we do. And that's against any long, only traditional equity manager in the universe. So I want to beat benchmarks. I want to drive alpha and I want to do it in big numbers. That portable alpha, That's over$200 million of net value per year for over a decade,$2.25 billion since the inception of the program.

54:35Private markets, it's over a billion excess relative to the respective public markets since then. A lot of people say you can't beat benchmarks. I think we can. And I think we can do it consistently. I love it. I'm as energetic about it as I've ever been. Ted, I love beating benchmarks. It's why I'm here. It's why I get out of bed in the morning along with my beautiful family and everything, but I love it. I love everything about it. All right, John, I want to make sure I ask you a couple of closing questions. What is your favorite hobby or activity outside of work and family? I want to just send my prayers and wishes out to the folks in Tennessee and North Carolina that have been impacted by the hurricane that went through because that area is one that's very special to me.

55:22So we've got a condo in a place called Transylvania County, which is a little bit south of there. We love it up there. There's something that's called the Western Carolina 100. So this is 100 waterfalls in that area. And then there's also something called the Southern Sixers. So these are mountains that are above 6 ,000 feet in either North Carolina or Tennessee. I love hiking in the Western Carolina mountains. and I love it especially because my son will often tag along with me even at 19 years old. Now, it doesn't happen as much as it used to, but I'm telling you, ever get a chance to go to Black Balsam Mountain in North Carolina and you just either take a tent or you take a hammock and a blanket?

56:04I mean, the views are spectacular. The sky is spectacular. There's no sign of humankind anywhere. So hiking up in the North Carolina mountains is really special. What's one fact that most people don't know about you? I used to be good at some stuff. I used to be a pretty good runner when I was a kid. I used to be a pretty good swimmer when I was a kid. I found that I've kind of slowed down and running just hurts. 52. I know there's plenty of 52-year-olds that are running ultra marathons and marathons. It just hurts. My knees are a mess. I still mess around with swimming. There's something soothing about just having your head in the water and either looking at the bottom of a pool, because I'm not thinking about portable alpha.

56:44I'm not thinking about liquidity management. I'm thinking about efficiency of my strokes and trying to find pain and then trying to deal with pain and work through pain. What's your biggest pet peeve? I'll give you one on the investment side, and this is highly tied to how we invest. Effectively, I borrow money to invest in hedge funds. That's one way to look at it. I would love to see cash hurdles for hedge fund managers. I would love to see that. I don't know that I'm going to get my wish, especially we've got a pretty impressive roster of managers. There's a supply-demand mismatch. Something else I've learned along the way is anytime I see self before team, that's a bit of a turnoff.

57:23But I've been guilty of this, I'm sure. I've always been pretty ambitious. I always think, yeah, 10%, we can do that. 2 % alpha, we can do that. But one thing I've learned, diversification matters on portfolio construction, but it matters on the decision-making process as well. So anytime there's somebody who's like, I have the right answer. I'm not going to listen to you. That's a big pet peeve. Which two people have had the biggest impact on your professional life? Matt Wright. He is my mentor in this business. He is a beautiful, beautiful person. And you know, he taught me the ropes. He brought the quantitative rigor to show me portable alpha.

58:01And then the name that's come up the most is Paul Jacobson. I mean, he is a uniquely talented individual. And without him, we could have the same investment results and it still wouldn't have worked. Without Paul, it wouldn't have worked. So that's Matt Wright, Paul Jacobson, they're amazing people. What's the best advice you've ever received? It's what Paul gave me. He's like, I understand we've got unique needs and you're bringing us a unique solution. I appreciate that. And I think it's the right fit, but you need to define success at the outset and do not change the goalposts. So you need to define success and be consistent with it, have expectations in advance, and then build guardrails around yourself.

58:41That's going to pull the governance infrastructure into play in sufficient time. If there's a real problem, I think that's the best advice I've ever gotten. All right, John, last one. What life lesson have you learned that you wish you knew a lot earlier in life? The power of the team and working with people and being influenced by other people and not having to have the right answer all the time and to be willing to vote for somebody else's idea if it's better than yours. And as a CIO, it doesn't mean you have the right answers. It means you can set up the processes that you hope will improve the probability of you making the right decision in the future.

59:16So you don't always have to be right. And this isn't a one person show. I am not sitting here without all of the myriad of names that we've discussed over the past hour or so. Well, John, thanks so much for sharing this incredible turnaround story. Thanks, Ted. It's been a real honor. Thank you. Thanks for listening to the show. To learn more, hop on our website at capitalallocators.com, where you can join our mailing list, access past shows, learn about our gatherings, and sign up for premium content, including podcast transcripts, my investment portfolio, and a lot more. Have a good one and see you next time.