Prof. Burton Malkiel: 50 Years of A Random Walk Down Wall Street (EP.252)

34:27The top of the internet bubble was in February or March of 2000. If you had bought the day after Alan Greenspan's speech, you would have done extremely well. How about the GameStop? Well, there was a hedge fund, Melvin Capital, who was convinced this was absolutely crazy. We ought to sell GameStop short. And Melvin Capital went bankrupt. So what I said efficient market hypothesis means is there are no clear arbitrage opportunities. There are no clear opportunities for gain without taking risks. And yep, markets go crazy sometimes. And avoid it. Don't go anywhere near it. But don't think you can time the market and you can short these things because you're more likely to have the result of a Melvin Capital than anyone else.

35:33And there are some wonderful stories of very smart people who lost their whole companies trying to bet against bubbles. How does the idea that there are multiple non-diversifiable risks in financial markets, How does that affect the investment advice in your book, Random Walk? Well, there is a thought now that, in fact, you can look at individual stocks and let's kind of try to break down why they go up and why they go down. And obviously, one thing that happens is the economy goes up and down. Another thing that happens is some are very sensitive to interest rates. We've just seen in the banking crisis that we've just gone through that as interest rates went up, this was a real problem for many of the regional banks, particularly those who got caught in a mismatch between the duration of their assets and duration of their liabilities.

36:43So let's look at the different factors that makes prices go up and down and that create risks for being in the stock market. And the idea is it's called factor investing. And there are now, they're very popular now, funds that are available that presumably can smooth out some of these so-called factor risks. The problem is they're actively managed. They're expensive. And in the 50th anniversary edition, I've just looked at the last five-year records of these factor funds, and they have underperformed the standard index funds. So sure, there are a lot of different risks. There are a lot of different factors.

37:38And we understand more why stocks go up or down. But if you think you can put this together in a portfolio that will do better than just holding everything, which is what an index fund does, I think you're mistaken. Interesting. It was a pretty rough five years for things like value recently, I guess. If someone thinks that they do want to do that, that they do want to tilt their portfolio toward smaller companies or cheaper companies like value stocks, how do you think they should make that decision? I think if you want to do that, I think what you want to do is, one, try to find a fund that does this in an indexed fashion, i.e.

38:27a fund that just buys everything with that characteristic. And let me give you an example of where it might make sense. Certainly for an accumulator, for someone in their 20s, 30s, 40s, saving for retirement, I want you in a broad-based index fund. But let's say you're in retirement now. It might be that having a portfolio that's tilted a bit more toward the value and dividend growth part of the market might very well make sense. And so I would say, if you want to have some part of your portfolio tilted that way, but do it with a manager that A, charges very little, and B, that uses a broad-based set of securities and doesn't try to pick, quote, the right ones.

39:33I liked your treatment of this topic in the book. One of the other things you said that resonated with me was as opposed to approaching single factors like tilting toward just value, looking at a multi-factor approach where you're looking at multiple factors together to select the stocks or overweight the stocks may make more sense. Yeah. Again, though, I've got to tell you though, that if you think that doing that will mean that you will outperform a broad-based index fund, I think you're going to be disappointed. What do you think about momentum and trend following as investment strategies? Well, again, the momentum following and trend following became particularly popular just before the COVID world upset us.

40:22And again, I remember giving a talk and saying, you're going to be better off with an index fund. And someone in the audience said, come on now, Cathie Wood's fund, that was basically a momentum fund of small, high-tech companies. The market was up 20 % and she was up 100%. You're crazy. Why don't you just buy Cathie Wood's ARC Innovation Fund? And it was selling at$150 a share at that time. All I can tell you is that the problem with momentum is that it can end in a heartbeat. And Cathie Wood's ARC Innovation Fund is selling for less than$40 a share now. So sometimes it works. And back to the idea, you want to be a gambler and think you can get in for a few days and the right time when it's going up, go ahead.

41:25But that's gambling. That's not investing. And I certainly don't recommend it for your serious money. Yeah, your treatment of momentum in the book is great because you talk about it twice. at the beginning when you're talking about technical analysis and chartists, and then again later when you're talking about the concept of factor investing, and you're very, very critical of it, which I appreciated. How do you think that the evidence from behavioral finance, which pretty explicitly suggests that markets are not efficient, how does that affect the investment advice to just buy the index? It doesn't in my view, but in my view, it's very important, however, in that, as I said, investing means, in my mind, doing the right thing, but avoiding the wrong thing.

42:09And what the good part of behavioral finance, in my view, is that it shows you how we can get caught up in some of these bubbles and get caught up in doing the wrong thing. In some sense, There's nothing that kind of upsets you more than having your neighbor tell you that your neighbor just bought this great stock that doubled and your neighbor's doing better than you are. And particularly with social media now, it's so easy to get caught up. And so understanding how we are so susceptible to these kinds of problems and avoiding mistakes is tremendously important. And one of the new things that was in the book that wasn't in the first edition is a whole chapter on behavioral finance, at the end of which I say, here are the lessons that you ought to learn from it.

43:20The lessons are very important, but I don't think behavioral finance in any sense means that you ought to do anything different than index funds. One of the leaders in behavioral finance, a professor in the University of California system, Mayor Statman, he and I have sometimes had debates about efficient markets and behavioral finance. finance, even he would agree that while he doesn't think the market's necessarily efficient, he knows perfectly well that it's incredibly hard to beat. And I know perfectly well that being aware of what tricks our psyche can play on us can make us better investors.

44:08Professor Stottman's an upcoming guest, so that'll be interesting to carry on this conversation. What do you think about risk parity strategies like Bridgewater's All Weather Fund? Well, again, I do try to cover in the book all of the new ideas that there are. And I was, in fact, taken by it in that there is a certain element of truth in it. And the element of truth is this, that it's interesting that in all markets, riskier gambling contracts sell for higher prices than are justified. Let me give you an example in the racetrack. In a racetrack, if you look at the odds of each horse and you bet on every horse in the race, you would have a winning ticket.

45:04But what would happen to you is that you lose 20 % of your money because they figure the payoffs after deducting 20 % for taxes and the profits of the racetrack. But if you bet on just the favorite in every race, you'd lose 5%. And if you bet on the longest shot, you'd lose about 40%. In other words, people overbet long shots and under bet favorites. Well, that's the basic idea of risk parity. If in fact, these safe assets are kind of mispriced relative to the expensive assets, the gambling assets, then here's a strategy. We'll buy the safe assets and we'll buy them on margin. We'll leverage them up, we'll borrow money to increase the risk and increase the volatility.

46:09And by doing that, we will get a higher rate of return than we would from buying the expensive assets. And unfortunately, the trouble with risk parity is that the really safe assets that typically get used are bonds and government bonds. So you can make a government bond much riskier by leveraging it, by buying it on margin. But unfortunately, if you go through a period, as we have recently, where interest rates have risen dramatically, you can get absolutely slaughtered. And unfortunately, risk parity funds have not been average investments recently. They have been much worse than average. You want to gamble, you want to speculate, and you think that the Federal Reserve is going to immediately go into a cycle of reducing interest rates.

47:22And incidentally, I'm not saying that'll happen. But suppose you think that's going to happen. Maybe some risk parity funds will do well. But they prove to be extremely risky. And they have not proved to be very good investments because a large part of the portfolio were in, quote, safe bonds leveraged up. And the returns have been disastrous. Yeah, that's interesting. It would look pretty good in a backtest from maybe 1970 to now, but not so much with the recent returns or the returns in earlier periods. Well, that's in fact one of the problems. Everything works extremely well in a back test.

48:09If you had bought bonds right after Paul Volcker had made the long-term treasury bonds yield 15 % or more, and you bought them on margin, you would have done very, very well. I've never met a back test I didn't like, but be very, very careful of somebody who says, look, here's something that's worked very well over the last year, the last five years, the last 10 years. Remember that, unfortunately, there's so much randomness in this world. And the one thing that I am sure about is if you have a low-cost index fund, you're going to do just fine. And let me just say, in terms of investment advice, I think any of us who talk about investing need to be very modest about what they know and what they don't know.

49:14But I'll tell you the only thing about investing that I am absolutely sure of, and that is the lower the fee that I pay to the purveyor of the investment service, the more there's going to be for me. I, in my life, was very friendly with the late Jack Bogle. And one of the quotes that I love to use of Jack on the same topic was, in investing, you get what you don't pay for. Yeah, that's a great quote. Speaking of expensive asset classes, you alluded to the bet with Warren Buffett earlier. More generally, what do you think about asset classes like private equity, venture capital, and head funds in investor portfolios?

50:10Look, there is no doubt about the fact that there is a premium that you get in terms of return for accepting illiquidity. This goes back to the question that you asked, are there factors that actually have influences on returns? And the answer is absolutely yes. And illiquidity can work well. And this was a theory that was popularized by David Swenson, who used to run the Yale Endowment. And what David Swenson understood was that universities are perpetual institutions. When someone gave the money for the chair that I held at Princeton University before I retired, that money was given to Princeton in perpetuity.

51:15That money was going to be in Princeton's endowment forever. And therefore, a university could accept illiquidity and therefore could get perhaps a higher rate of return than was available from a portfolio of marketable securities. And that was the David Swenson endowment model, which served Yale very well. It served my own university, Princeton University, very, very well. But there are two things I would say to individuals. One, you're not Yale and Princeton. If you are saving for retirement, presumably in retirement, you want to start spending that money. And in fact, if you have saved money in a tax advantaged way, as I did throughout my career, you're in a situation now where you have required minimum distributions.

52:24I mean, even if you don't need the money, you've got to take it out. So, number one, realize you're not Princeton, you're not Yale. Well, you're going to have to take that money out at some point, particularly if you're in a tax advantage SEP IRA or something or Roth IRA or something like that, something where you do have to take the money out. Secondly, the Yales and the Princetons of the world have staffs that can analyze who are the people who can actually have done well in buying commercial real estate. And the commercial real estate market is not an efficient market. Merck common stock is seen by thousands of investors every day.

53:21That office building in New York, that hotel in Charleston, South Carolina, is not seen by more than a few investors. So you need professionals to be able to do that. And what happens is the Yales of this world, because the whole strategy was associated with Yale, Yale gets the best of these. If you're an individual, someone will try to sell you one, but you're not likely to get the really good ones. And so for individuals, I say, stay away. It's not for you. You're not capable of analyzing them. You're not capable of getting the best of them, please don't do it. You mentioned bonds earlier. What impact did the recent era of the super low bond yields have on the role of bonds in a portfolio?

54:23Well, I have thought that particularly a couple of years ago, when long-term bonds yielded less than 2%, and the inflation target was 2%, that bonds were a sure loser. And I appreciated the idea that bonds can give you, particularly short-term bonds, some stability in your portfolio. But I really worried that, was this the thing you wanted, even if you were in retirement and wanted to live off your income. And so what I had developed was, in part, during periods where bonds had inadequate yields, and by inadequate, I mean yields that seemed less than the inflation rate, that maybe a better strategy was to buy a portfolio of dividend-yielding stocks where at least you were likely to be able to have returns that had a chance of exceeding the inflation rate.

55:42Bonds today are much better investments because they do give you a yield now. But I do think that this strategy of at least for part of what otherwise might be a bond portfolio be invested in dividend-paying value stocks for retired people may make a good deal of sense. And again, one of the things that's in the book, and I think it's very important to realize, the same portfolio is not right for all individuals. Someone in their 20s saving for retirement needs a different portfolio from someone in their 70s who has begun to take required minimum distributions. I've got to ask on the dividends, is it more about the dividend yield or is it more about a value tilted portfolio of stocks?

56:43It's not easy to separate the two, because if you think of what value stocks are, there are many ways in which some people do it in different ways. But often, one of the criteria for a value stock is that it has high dividend yield. So I'm not sure that you can completely separate the two. I think if you are buying a dividend growth portfolio or a high dividend yield portfolio, you are in effect going to be tilting toward value. Makes sense. I guess the question is, is it better to go to get a value portfolio by sorting by dividends or to get a dividend portfolio? Should the focus be the value or should the focus be the yield?

57:37Well, as I say, I think if you look at these things, you look at the quote, value portfolios, and you look at some of these dividend ones, I think what you're going to find is that they have very much the same companies in them. Yeah, that's probably true. Okay. We've talked a lot about investing, which was great because that's where a lot of your book focuses and it's been fantastic to talk about. I want to do a bit of a shift though. How important is saving as opposed to an optimal investment strategy to investor outcomes? Well, savings is absolutely critical. You can talk about investing all you want, but if you have not saved any money and not put money into the investment, whatever you think, you may be the most brilliant investor in the world, But you won't have any wherewithal in order to invest.

58:33So it all starts with saving. And one of the things that I try to show is that even saving a little bit of money each week, you can have a wonderful retirement. And there's an example that I use in the book of, let's say that we have somebody who starts saving a bit over$20 a week. You know, maybe one or two times a week, we don't go to Starbucks and have our latte and have our big muffin. Let's see if we can spare it away$20 a week. And I have a chart that shows starting with when the first index fund was available in 1978, that by investing$100 a month in an index fund through the current period, it's just amazing how much money one would have.

59:44And the answer is close to a million and a half dollars. So people say there's no way I can have a million and a half dollar retirement portfolio. I've never made a lot of money in my life. And yet by saving, by just putting a little money in each week, you can, in fact, do it. And for me, I think the thing that makes me feel best about the book is the people who have written me who said that, you know, I read your book a long time ago. I did exactly what you said. And this is the amount of money that I have now. Thank you. And nothing would please me more than getting letters like that. It is possible.

1:00:35Now, let me go back to another thing we've discussed, and that's behavioral finance. It's very hard to say. That's something we know from behavioral finance. So if you can't resist going to Starbucks for that latte and that big bun. Have it done automatically by having your employer take a little out of each salary check that gets put into hopefully some tax-advantaged way of doing it so you don't have to pay taxes on your investment earnings and have it done automatically because one of the best ways to make sure that you have put money into saving is that it didn't come to you in the first place so you could spend it.

1:01:26And for people who live paycheck to paycheck, okay, let's do the paychecks after the money has come out. And again, getting back to the lessons of behavioral finance, there's just a brilliant idea that people have. And I've suggested this to people and people have done it and started saving this way. They say, look, I can't do it. I can't tell my employer to take out$20 a week because I'm spending every single money to put food on the table. And so I've said, okay, do the following. on your next raise. Take some part of the next raise and have it go into the savings plan so that you'll still get an increase in salary.

1:02:20And this way you won't feel deprived of the money coming out. It's called the Save More Tomorrow plan. Make sure you do it. And that's a brilliant behavioral finance way to start on a savings program. But is savings important? Absolutely. It's not just important. It's essential. In addition to those savings, how important is it for investors to figure out what their objectives are? Well, in a sense, what I'm saying is that one's objectives do dictate what you're going to want to invest in. The person in their 20s who's basically investing for a comfortable retirement is the common stock investor.

1:03:10the investor in his or her 70s who's taking required minimum distributions, the objective is to make sure that money will be able to come out in a way to have the required minimum distributions available to you, and you need a much safer portfolio. So whether you call it objectives or whether you call it, what are you investing for? I guess that's objectives. Sure, that is important. And there are different portfolios for different people, particularly for different people of different ages. I want to keep going on that idea. How do you think investors should decide with, of course, Time Horizon being one of them, just like you were talking about, how should investors decide how much risk to take with their investments?

1:04:07Clearly, while I absolutely think that young people should be essentially 100 % common stock investors, I fully understand that there are some people who simply can't take it. I've done a lot of investment advising to individuals. I'm the chief investment officer of Wealthfront, where we are robo-advisors. So I've had a lot of experience and I know perfectly well that while I think that Horizon is the most important, I know that there are some people for whom, looking at the value of their investments and going through a year like 2022, where the market went down 20%, makes one almost sick to one's stomach and makes one not able to sleep.

1:05:06And so I think clearly, one psychological makeup is another part of it that's very important. You know, I tell the story in the book about the person who went to JP Morgan and said, I don't know what to do about my investments. My investments are going up and down so much that I can't sleep at night. And JP Morgan said correctly, well, you should sell down to the sleeping point. So if you are that kind of individual, I still would like you to have at least some of your investments into a broad-based index fund. But if you absolutely told me that you just, you psychologically couldn't stand it, I would not object if you told me today that you had to have something that was absolutely stable.

1:06:10And I'd tell you, look, you want to put a third of your portfolio in one-year treasury bills that yield 5 % today? Sure, go ahead and do it. But if we do, in fact, have a recession and the Federal Reserve turns some corner and starts reducing interest rates, you may be very sorry in the future that you've done it. So there are costs in doing it. Don't think it's going to be something that's absolutely a win for you. But at least the money value of your portfolio will be much more stable. And for people who cannot stand the volatility, fine, go and do it. But I would also caution them that what you want is a big hunk of money for retirement.

1:07:09And you really shouldn't worry too much about the quarterly volatility, because that's not what's important. It's what you're going to have when you get to retirement, and you want to start spending the money. Yeah, that's such an important point. The difference between volatility as a risk and future consumption as a risk. And in that framing, bonds are actually riskier than stocks. Exactly. Exactly. Here's a separate question for you, Bert. Do you think people should rent or own their home? I am actually quite concerned that we are going to be living in the future in an inflationary age. For one thing, the demography in this country is just terrible.

1:08:05Populations are not growing. The population that's there is aging rapidly. Fertility rates are very low. I think we are going to have a perpetual labor shortage. Politically, we find immigration a very hard thing to accept. I think there are going to be pressures on labor costs in the future that will prove to be inflationary. I think also that the current political climate, where we would like to disassociate ourselves from China, where we're going to try to balkanize supply chains, trade has been something that has been a big inflation reducer in the past, will be less important in the future.

1:09:03And I think as we move much more to America first, and we want to do everything we can in the United States, this is likely to be inflationary. And third, we seem to have intractable budget deficits, and we have enormous amounts of government debt relative to our GDP, relative to the size of our economy. And I think we will get rid of that debt the way countries have gotten rid of debt throughout history, namely by inflating it away. So if I am right, one ought to think there's at least a strong possibility that it won't be easy to get back to the 2 % inflation target. that we'd be very lucky if we got down from five to four to three, but that we're going to have significant inflation.

1:10:01And therefore, I would like to have people invested in things that are traditionally good inflation hedges. And common stocks have traditionally been an excellent inflation hedge, and so has real estate. If you possibly can, I say, own your house, don't rent. The idea of owned homes as a hedge against future housing costs is a pretty nice argument. I've got to ask though, we talked earlier about market efficiency, obviously. Would what you just said be an argument that the market is currently mispricing expected inflation? Given that you actually look at market indices and there are a variety of futures markets where you can actually see what the market thinks inflation is going to be, what the market thinks interest rates are going to be in the future.

1:11:08The market is expecting somewhat lower inflation than the forecast that I have given you. Now, let me just be very clear. Just as nobody can predict what the stock market is going to do next week, next month, next year, nobody knows what the economy is going to do next month, next year. Nobody knows what inflation is going to be. Forecasters have been absolutely wrong. The Federal Reserve has been completely wrong on their forecasts for the economy and for inflation. So while I have given you a forecast, take it with a grain of salt. I completely understand if you say, no, I don't agree with you.

1:12:01I'm simply saying this is my forecast. And I think that at least you ought to consider that it could be right. And if it is right, let me look at my portfolio and see if my portfolio is somewhat consistent with that possibility of it being right. Am I sure? Absolutely not. I say this with great trepidation, but I will just tell you that my own forecast is that I think we're going to have a much tougher time getting rid of inflation than a lot of experts think and that the market thinks. Yeah, no, it's interesting to hear you say it because as I'm sure you know, when you run the numbers, you can make renting and owning look similar in terms of the impact on wealth, but a lot of it hinges on that inflation assumption.

1:12:57If you assume a higher rate of inflation, renting looks terrible and owning looks amazing. Anyway, it's a very interesting point to consider. One of the things in your book that you did not speak highly of was investment advisors. Do you see a role though for financial planners or fee-only investment advisors who focus on financial planning while recommending low-cost index funds? My worry is that many investment advisors charge, I believe, exorbitant fees. And if you can do it yourself, if you can take a book like mine that tells you, here's the exact instruments that you might use, I would much prefer that you did that.

1:13:42But if you do need specific tax advice, and if you need somebody to nudge you into saving more, fine. And if you do get a financial advisor, make sure that financial advisor is a fiduciary and be very, very careful. Ask up front what the fees are, because the financial advisor might be great, but the point is you want to make sure that after fees you do okay, and you're not simply making additional money for the financial advisor. We spoke with John Campbell at Harvard recently. He said something similar where he talked about all the mistakes that households make with respect to their personal finances and that advice could theoretically be helpful, but then there are a lot of problems with the market for financial advice, which sounds similar to what you're talking about.

1:14:52My question, Bert, I'm sure you've been asked hundreds of times. with incredible growth in index fund assets. Is there a point where you become concerned about, could it be market efficiency or corporate governance being negatively affected? Well, first of all, would it matter for a market efficiency? And, you know, the paradox of efficient markets is that you need some active managers to make sure that information does get reflected. And the paradox is that obviously, if everybody indexed, who would make the market efficient? And so I understand that you do need some active managers. But I believe markets now a little over half indexed.

1:15:38I believe it could be 75 % indexed. I think it could be 90 % indexed. I think it could be 95 % indexed. there would still be plenty of people to make the market efficient. In fact, suppose it was 100 % indexed. And we go back to my original example. There's the drug company that's found the cure for cancer. The stock should be at 40, not 20. Can you imagine in a capitalist system, there isn't somebody who would then say, hey, wait a minute, there's an opportunity here. I'm going to go in and buy the stock until it gets up to 40. So I am not worried whatsoever about not having enough active managers to make the market efficient.

1:16:30What I do worry about somewhat is the other question that's implicit, And that is the voting power that just a few companies might have. You know, there are three big companies that index. State Street, BlackRock, and Vanguard. And very often, they could hold more than half of the stock. They could, in fact, influence how the company is run. And in fact, there have been papers that suggested that, look, in the airline industry, these three have a majority stake in the airlines. What they will do is have the airlines collude to raise prices so that the airlines can make more money. Well, first of all, that doesn't make any sense, because if I'm an index investor, maybe the airlines would make more money.

1:17:35But other businesses that send their people by plane to different factories, to different customers, they're going to be hurt. So why would I want one industry to do better than the other? And there's no evidence that people have done that. But it does raise questions about voting. And I think one of the things we're going to have to find is some way, particularly when institutions own a lot of the index funds that are in the Vanguard and BlackRock and Stead Street portfolios, that they will find some way of allowing the ultimate holders to have some say in how the shares are voted. So in answer to your question, in terms of making the market less efficient, I'm not worried.

1:18:31In terms of voting, yeah, there's a possibility. And I think we're probably going to have to find some ways of letting the ultimate holders have something to say about how the shares are voted. Interesting. Your comment about collusion when you own all of the companies is great, though. That's an interesting perspective. You touched earlier on letters that you've gotten from investors who had followed your advice and been successful 50 years after writing your book and many, many editions. Looking back, what's been the best part about writing such an impactful book? Well, I think that is the best part.

1:19:07I mean, you know, look, in life, one hopes that you made a difference. And you hope that the difference that you've made is a difference that may have helped people. And I think that, for me, is without question what pleases me the most about it. I mean, obviously, I'm delighted that the book has now sold more than 2 million copies. But I'm even more delighted that for a lot of ordinary people, they have written and said their life is better because they read the book. And the fact that I wrote the book that made them better, there's nothing that could please me more. Our final question for you, Bert.

1:19:59How would you define success in your life? Well, again, I would say for me, it's having made a difference. And I think also having done a lot of interesting things. I've spent most of my life being a teacher. And I think that that has been important. And hearing from generations of college students who I might have influenced over time and who've had very successful and happy lives, that's certainly been what's important. I think doing different things has been important for me. I spent two years in Washington as a member of the President's Council of Economic Advisors. Having been in the policymaking arena, seeing how policy is made, and maybe having a bit of influence on how policy is made has been important, certainly has been rewarding for me.

1:21:04I've been a corporate director. I've been a member and sometimes chairman of investment committees, both for the profit world and the nonprofit world. And so having done a lot of different things and having done a lot of interesting things. And I would say also being intellectually challenged throughout my life. I am not someone who, in moving to emeritus status, has simply sat on a beach and watched the waves come in. I mean, I do like to sit on a beach and watch the waves come in. But I think continuing to be active makes for a very continuing, interesting life. So I think all of those things were important.

1:21:58But again, I think the most important one was, did one make a difference? Did one make a difference with one's own family, you know, one's own children, grandchildren, wife? These are certainly important. But having some wider influence is a wonderful feeling for me. Amazing. And I must say, Bert, thank you for your time today. This has been incredible. But I must also thank you for your incredible books. I read your book for the first time back in the late 90s. And it changed how we delivered financial advice and has been a big part of what we've been doing ever since. So thank you for this time today.

1:22:37And thank you for all your work over the years. Thank you very much. I really appreciate it. Thank you.