Some Cigarettes: Accreditation, Memes, Naughty ESG

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We haven't done this for a while.

We haven't seen each other in two weeks.

I know.

But after like 10 days of going by your desk, and everyone's like, no, we don't know where she is.

Oh my God.

Like I told them all.

Just if that comes by, I'm not here.

No, I don't know where I've been, but I don't know either now we're back in the booth back in the booth

hello and welcome to the money stuff podcast your weekly podcast where we talk about stuff related to money

I'm Matt Levine and I write the money stuff column for Bloomberg Opinion and I'm Katie Greifeld a reporter for Bloomberg News and an anchor for Bloomberg Television

It's good to be back, Katie.

It's good to be back.

What's going on today?

Well, we're going to talk about accredited investors, what that is, should it exist.

We'll talk about beme stocks growing up or meme investors meme investment firms true true and we're going to talk about naughty esg

it's less fun than it sounds

accredited investors yeah what are they so currently 200 000 income is what you need to be or a $1 million net worth if I'm an individual.

Yes, there's all sorts of like bars, right?

So like the way it sort of like casually works is that you can invest in private stuff if you're an accredited investor and you can and anyone can invest in public stuff.

And the accredited investor bar used to be like, I don't know, like one or two or 5% of households.

And now it's like 20% of households because it's not indexed to inflation.

So now you need to have an income of $200,000 a year or $300,000 for a couple or have net worth of a million dollars or have a Series 7 or Series 65 license.

So if you have like the securities license, you can be an accredited investor.

And if you're an accredited investor, you can invest in various sorts of private investments, mainly like startups.

And

people don't like these rules.

Yeah.

I should say, I read about this the other day, and he'll point out there are actually two like higher bars.

So

there's the bar for investing in hedge funds and private equity firms, which is basically if you're an investment manager and you want to charge performance fees like hedge funds and private equity do, you need to have qualified clients, which basically means like a $2.2 million net worth.

So it's a little bit of a higher bar than the accredited investor bar.

And then the other thing is like there's certain kinds of private investments that are only open to quibs, qualified institutional buyers, which basically means an institution with at least $100 million.

So like those are the higher bars.

But anyone can invest in startups in theory if they're an accredited investor, which means, you know, $200,000 income, which is like not that uncommon these days.

Like one thing I pointed out is that like the number of people who meet that qualification is about equal to the number of people who own stocks directly.

So it's like the investor class is pretty much overlapping with the with the accredited investor class.

There's this perception that like these days the good investments are the private investments.

I've heard that before.

Yeah, like we talk about it a lot, right?

Yeah.

And so they're like, why is it that like people who don't have a lot of money can't get the good investments?

And then two, why is it that like

the term accredited just correlates with wealth?

Like it sort of seems like accredited means good or smart or

qualified in some way.

Right.

It seems unfair that qualified would just mean like having enough money.

And so there's always this push to open it up for like a test.

So it used to be only the money qualification.

And now if you have certain securities licenses like the Series 7, you can also be an accredited investor.

Because people are like, you know, if you like work at an investment bank, you probably

know as much as the average bear about investments.

And so the most recent news is that the Senate is pushing for a bill to make the SEC write an exam that anyone can take.

And if you pass the exam, then you're an accredited investor and you can buy private stuff.

This scratched a memory up to the surface.

This is slightly different, but it's related.

In April of 2022, FINRA called for comments on whether they should introduce knowledge checks before, you know, retail could buy what they defined as complex products, which basically meant like leverage and all these like funky ETFs that we talk about on this podcast sometimes.

And that was met with outrage.

People hated that idea.

Right, because that's like those products are public products.

Like anyone can buy those, right?

You don't have to be an accredited investor to buy a triple-levered ETF or zero-day options on stocks.

There's all sorts of stuff that is available to the public, which basically sort of of means like it's met disclosure requirements, right?

There's not formally supposed to be like really substantive review of like whether it's a good investment.

You know, there's like a certain amount of pressure on stuff to not be crazy stuff, but like in general, there's a lot of public stuff that is risky.

And

there's this weird situation where a lot of public investments are very risky and dangerous and sort of hard to understand.

anyone can buy them.

And then there's a lot of private market stuff that's like, yeah, like basic stock that like you're not allowed to buy because it's limited to people with at least $200,000 of income.

It's weird that anyone can buy the products that Finner wants to restrict and then like they're trying to expand

qualification to for the well at the time.

Again, they opened it up for comments.

They received more than 12,000 comments, which was pretty wild.

That shattered the record.

I don't know if it's since been shattered, if they've opened up comments to anything else crazier, but usually they get like a couple dozen comments.

So this was wild.

It is interesting, you know, the disclosure-based sort of whatever is how we do it now.

I don't know how I want to talk about that, but basically you can market all of this crazy, risky stuff as long as you put in like big bright letters that you might and probably will lose money on that.

That's fine.

Yeah, although like a weird aspect of that is you're often buying it through your app, right?

Yeah.

Like there's no requirement that you read any of the disclosure.

Like the the firms can't market it without all the warnings, disclosures.

But you can buy it, you know, push button.

That's what one of the points that FINRA made at the time, that since these rules were put in place, there's a lot more self-directed investors in the market now that aren't necessarily going through a financial advisor.

There's a lot of people just clicking around on Robin Hood, for example.

That's a deep tease to what we'll be talking about next.

I'm excited for that.

And that's why they floated the idea of a knowledge check.

That was unpalatable.

It's interesting that the Senate is pushing for some sort of test now.

Yeah.

And like private investments are the opposite, right?

You can't buy them on an app.

You do have to, you know, essentially buy them through a broker or a financial advisor, right?

And there is some history of skepticism about how aligned the interests of some of these brokers are with their clients, right?

I mean, there's a lot of private market stuff that is very high fee, has like lots of layers of fees for products that like, you know, you could probably do better by buying a index ETF, but like the advisor gets paid more for selling you the complex product.

And

making people pass a test

might

make them more resistant to getting pitched bad products.

But it might just make them feel more sophisticated and then make the advisors salivate even more over selling them bad products, right?

I don't know about these tests.

There's not a lot of tests.

I wrote, I would love to write one.

I would also love to, I love taking standardized tests.

That That tracks.

But like, it would be so fun to write this this, but like, just you sort of know what it would be like.

It would be like, you know, like

compound interest.

And like, what's that?

It would be like sort of like financially trivia.

It would potentially give you the illusion of being sophisticated and being able to sort of see through.

That's all I need.

Yeah, but that's, that's all your financial advisor needs, right?

Yeah, that's true.

Sell you a sort of ruinous product.

If you were starting from scratch, you would not like divide the investment universe this way, right?

Like you would not let people buy all of the risky, weird products that FINRA is nervous about.

When the Senate talks about this, they talk about investing in local small businesses, right?

Like you can't, like

there are exemptions to the rules, but in general, it's kind of like difficult and risky for small businesses to raise money from like

people in their community because like there are you have to meet SEC exemptions, like there's a credit investor test.

And it might be nicer if more people could make those sorts of private investments.

And those investments in some ways seem like more appealing or or more like wholesome than like triple levered ETFs or whatever, right?

The complex products that Fenner is right about.

This is more of a niche comment, but I liked it.

So I used to be a convertible bond underwriter.

Right.

And like a lot of bonds are done under an SEC rule called Rule 144A, which basically means that you have to be a $100 million institution to buy them.

And it's just like, it makes their disclosure a little bit easier.

But one reader was like, why am I allowed to buy the stock of a public company, but not their 144A bonds?

The 144A bonds are sort of by definition safer, right?

They're like senior in the capital structure.

But like he's not allowed to buy them because he doesn't have a $100 million

fund.

But like anyone can buy the stock.

So there's a lot of stuff like that where it's like what gets treated as a risky, dangerous thing for retail investors and what gets treated as like, no problem, anyone can buy that by clicking a button just doesn't track any like economic or disclosure reality.

Yeah.

So I don't know.

I don't have a good solution.

I've written my bad solution, which is that the SEC should give out a certificate of dumb investment where you say, I know I'm buying something dumb and they slap you and you say, no, I really want to buy something dumb.

And then like, they give you the certificate.

But like, the, the important thing in my original proposal was that then if the thing goes to zero, you're not allowed to complain like to the press or to anyone.

Right.

Because like a lot of this stuff, it's like retail investors buy this terrible thing and everyone's like, oh, this is a terrible thing.

Like, no, no, it's going to be great.

And then they buy it and it goes to zero.

And they're like, oh, I was defrauded.

And I was like, no, you knew it was a terrible thing.

So the idea of like

making people sign a form saying they know they're being dumb is appealing to me because one, it would sort of like obviate some complaints.

And then two, like all this stuff about accredited investors, like it comes from a place of like thinking those are the smart investors who get access to the good stuff.

And I suspect that the real experience is kind of the opposite, where like those are the investors who get pitched the expensive weird stuff.

And

when you make it a test of financial sophistication, then like people want to take that test, they want to pass that test, and then they pass the test, like, oh, I'm so sophisticated, and then they buy the worst stuff because they have this illusion of sophistication.

Whereas if you make them sign a thing saying this is dumb, then it's less aspirational and like maybe

deters them from buying the worst things.

That's true.

I mean, it would be labor-intensive to have to line up like a staffer to slap every single person that's really a hypothetical, but like

you know, you know, I don't know.

I think we should kick it around.

Write the test, Matt.

Write the test.

We didn't insult any dentists.

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When meme stocks grow up, you know Robin Hood.

I do know Robin Hood.

I remember a time when their bear case on Robin Hood is that, you know, you would have all these people who use Robin Hood as a gateway drug and

then graduate up into proper investments, such as index funds, and that they'd migrate over to like Schwab or Fidelity, for example.

That hasn't really been the case.

Hasn't it?

I mean, you and I were reading this Baron's article about how Robinhood is growing up.

And like, the stat that I found shocking is something like 10% of Americans have a Robinhood account.

Yeah.

Or like American adults or whatever.

US adults.

And Robinhood has 0.3% of like retail financial assets.

Which is 65 trillion.

Sure.

But like they are 33 times bigger by number of people than by assets, right?

Like they have a lot of people, but like a tiny fraction of those people's assets, or else they have only the people with a very few assets, right?

Or some companies.

Yeah.

And

that does sort of suggest that that bear case had some truth to it, which is that people do the fund trading on Robinhood, but when they grow up to like their index funds, they do it somewhere else.

Well, two points to that.

Number one, the stock is up like 110% this year.

So like in terms of it being a bear case, it's certainly not playing out in the stock market.

And two, that may be the case.

Robinhood is working really, really hard to grow up, which I find interesting.

They had their Hood summit in Miami.

I think it was last week or the week before.

But in any case, they have all these new features that are coming out.

They have...

this desktop trading platform that's one thing they're offering index options for the first time that's kind of exciting but i thought that this was interesting there's one to three percent matching bonuses for investors who transfer assets to Robinhood's platform.

So they'll pay you to bring your money over to Robinhood.

And as of June 2024, Robinhood has provided customers more than $200 million in matches on asset transfers and retirement account contributions.

That's according to the company.

So they are trying to grow up.

Right.

It makes total sense, right?

I mean, if you're a person who has like a $1,000 Robinhood account for fun and like your retirement savings at Fidelity and Robinhood is like, bring all your retirement savings over to us and we'll give you one percent of or three percent of them like yeah why would you sound good

free money right and if you're like relatively self-directed and your retirement savings are on ETFs anyway like yeah it's free money there's some lockup on it where if you bring the money over you you have to keep it at Robinhood for a while so right it's it's part of the strategy for them to go from being people's like fun money play you know shows confetti when you do a trade account to being like their main you know savings and investment account.

The other thing that I thought was interesting about what they're doing is they're talking about getting into building out a wealth management farm where instead of just being self-directed, they have some sort of advisory business.

And that's probably not like opening branches with people, but it's like, you know, some sort of robo-advising, some sort of automated, you know, AI-driven advising where if you are not a person who wants to watch the markets all day and be on Reddit and like sort of, you know, do your own investing, but you want.

someone to help you do your retirement planning,

if Robinhood can offer that, like that's just a ton of assets that, you know, have to be tied to some sort of advice.

Yeah.

They basically want to be like the one-stop shop, don't they?

Yeah, which is like, but you know, with like Fidelity and Trump, all these people, like, they have some roots in being self-directed discount burgerages, but they're all like, you know, trying to help people, you know, give people advice on their retirement accounts.

I should have looked into it, but don't they have a credit card as well?

Or in the case of the code?

They do have a credit card.

Yeah.

That's like a, yeah.

Yeah.

Didn't Goldman have some painful news about that this week?

It seems hard to just create a credit card.

I don't know.

If you have money market funds, it's like a synergy there.

I have to assume that when Robin Hood started, you started from nothing.

There's so much opportunity in

showing people confetti when they do trades, right?

Like the

pool of money that you can extract by

helping people do fun trades on their phone is enormous, right?

And it is enormous.

But it's like, you know, it's a tiny fraction of the pool of money for people like saving for retirement, right?

And so like when you get big enough, you're like, the way to go to the next level of scaling is to get people's retirement money and not just their fun trading money.

Now, I will say the other thing about the bear case of people graduating from meme stocks to retirement funds is that Robinhood so far makes a lot of its money on trading, payment for order flow, right?

And

two stylized facts about that are one, if you are just buying ETFs for retirement, you're not trading that often, right?

So Robinhood is getting less money from your buy and hold investing than they are from your frantic day trading.

And then two,

where they get most of their money from payment for order flow is options and crypto.

Right.

Like frantically trading stocks, less good for them financially than frantically trading options and crypto.

And buying and holding stocks, even worse than frantically trading stocks.

So there is like a margin compression as they go to the higher dollar, you know, retirement funds, but hopefully you make it up on volume.

Yeah.

Another bear case that you could put in there, and this falls more into the psychology category, is we might have moved past this for Robinhood, but I was wondering, you know, when when we were watching the fantastic fall of all these meme stocks and just so much money was being destroyed of retail dollars, whether instead of graduating into index funds, et cetera, whether or not people would just get totally disenchanted and leave the market altogether.

But it seems like that hasn't been too bad for Robinhood.

Yeah, I don't know.

I mean, I think a lot of people interpret meme stocks as themselves a phenomenon of disenchantment, right?

Where people feel like they can't get ahead and so they put a lot of money into gambles rather than like investing it sensibly in index funds or whatever.

Yeah.

And

I don't know what comes after disenchantment with that, right?

Like, I think some people are like, I'm going to stop gambling and start saving responsibly.

Some people are like, we're disenchanted before, and now they're extra disenchanted, right?

I don't know.

I feel like it has sort of played out with crypto.

Like, I think that so many people lost money on crypto.

I'm talking about just like day traders lost money on crypto because this time around with Bitcoin got pretty close to 70,000 sometime in the past few weeks.

It just feels like Bitcoin at 70,000 this time around is a lot different than before like the FTX collapse when I think that did disenchant a lot of the retail community.

I agree.

Although then I want you to tell me why Bitcoin is back at 70,000.

The podcast just ends.

No, I agree, but like this is my crypto skepticism coming out.

Go ahead.

If you got into crypto for gambling and you got disenchanted and you stopped being in crypto, like, that's all like totally consistent, right?

Because it's like, should beep this high, but it's essentially a gambling product, right?

Like, not all, you know, like stablecoin, whatever, right?

But like, you know, like the stuff that you see on like CoinMarketCap is essentially a gambling product.

Whereas like, if you got into the stock market for gambling, like that's a tiny, tiny fraction of like why people are in the stock market of what you can do with the stock.

Like it's mostly you're just like, you're investing in like the growing productive capacity of the world, right?

Like that's what the stock market market is right it's like companies and like you have economic growth so the companies make more money and like that accrues to their shareholders right so like if you get into the stock market for gambling purposes and there's a thing you can stay for that isn't gambling purposes with crypto i'm not so sure that's true yeah uh there are people in crypto building good products blah blah blah blah right but like if you're like buying the tokens you know like there's not you know it's like hard to invest in those things anyway all right that's that's in it for the tech but no i mean like right i agree if you get into meme stocks and you lose all your money and you get disenchanted and you like decide that investing in capitalism is bad, then that is probably bad for your net worth.

The popular perception of meme stocks is like they got into meme stocks because they thought investing in capitalism was bad.

So

the disenchantment will maybe point them in a better direction.

Should cut all of this.

No, this is good.

I will say, I mean, we're talking about Robin Hood's ambitions to become this one-stop shop and, you know, grow up a little bit.

It is, for context, good to point out that Charles Schwab Fidelity, Fidelity, they have $10 trillion and $14 trillion in total assets, respectively.

Robin Hood is clocking it at $143.6 billion in assets as of the end of the second quarter.

So it's a long hill to climb.

It's an intriguing strategy of like being the like

salient fun brokerage and then trying to pivot from there to being like the next Schwab.

Like, I don't know.

It strikes me as like a reasonable thing to do and like kind of cool.

Yeah.

I don't know.

But yeah, you're right.

If I was a CEO of it.

Like, by the way, you're like, oh, they have a long way to go.

Like, yeah, yeah, they have like 100 times upside in assets.

Like, that sounds like a pretty good position to be.

I wonder if it's an easier pivot to make to be the fun investment firm and then try to become the mature one versus like, you know, much easier.

Can you imagine Fidelity being like, oh, we've got confetti, right?

Hey, fellow kids.

Right.

Yeah.

It's so much easier.

It's so much easier because also like age moves in a direction, right?

Like if you, if you're like a 23-year-old and you start on Robinhood and then you become like a 33-year-old and you're still on Robinhood and you're like, oh, I'm going to save for retirement, right?

Whereas like if Fidelity is like average, you know, account holder is older, like,

they're not going to be like, oh, like maybe they have like a midlife crisis and get into memes like gambling, but like, you know, it's a better move to start to hook them young and then sort of grow up along.

So true.

Yeah, it's like me with Taylor Swift.

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ESG, naughty ESG, Wisdom Tree.

I'm not rapping, but Wisdom Tree was fined $4 million for mismarketing their ESG ETFs, a selection of them.

In the world, a lot of people are worried about greenwashing, right?

Like there's this idea that people market ESG products, funds, or

market their companies as ESG or whatever.

And like they don't really mean it, and they're doing bad stuff.

They're like, you know, secretly doing coal or whatever.

They might have a point.

So one, they have a point sure but like two i think most people get mad about that would like someone to police that according to their own beliefs about esg right so like you know people get mad at like blackrock for having esg funds that like sometimes vote for the directors of coal companies or whatever right and like people are like oh they shouldn't do that and you know it's like it turns out there's no like single accepted standard for what is esg or like what an esg fund should do and so different issuers of esg funds have different opinions and they do different things and if you have like a strict view then you'll be mad at like ESG issuers who have less strict views.

And there's like nothing you can do about it.

I mean, you can like put your money in a different fund, but like the SEC is not going to say to a big ESG fund, what you are doing is not ESG.

Because like the SEC doesn't like have a substantive definition of what ESG is.

And you can imagine that changing, but like not really in like the current state of American politics and SEC rulemaking.

It's just going to be ESG is like this sort of like somewhat like voluntarily defined concept.

But what the SEC can do is look at every ESG firm's definition of ESG and see if they're following it.

And it turns out a lot of them aren't.

And the reason they're not, by the way, is these like ESG ETFs where like they, you know, it's like fairly low expense ratio and like they don't have a huge staff of people you know investigating everything.

They like buy data from data vendors and like sometimes they mess it up and then they don't do ESG things.

They don't do what they said.

So Wisdom Tree got in trouble.

It had this ESG ETFs and it described them in fairly strict terms.

You know, it said of some of them, like, they don't invest in companies that have any involvement in fossil fuels or tobacco.

Like, regardless of how much revenue they get from it, if they have any involvement, they are screened out.

And the way they did that is like they went to some data vendors and they bought lists of companies that do things, right?

And like the lists were not quite right for the thing they described.

So they bought lists of companies that were involved in tobacco.

Lots of like big stores carry cigarettes, right?

And like the cigarettes make up, you know, 1% of revenue or whatever, but like they are on the shelves.

And

the data vendor would only flag a company, a retailer if more than 10% of its revenue came from cigarettes.

And so like most retailers, that's not the case.

And so they weren't flagged.

And so the SEC looked and Wisdom Tree was investing in some of these, in some retailers that like, you know, sold some cigarettes.

And they said in their materials, they didn't invest in companies that sold cigarettes.

And it's like, you did not do the thing you said you were going to do because of like a data error, right?

They said we wouldn't invest in fossil fuels.

And so they bought the list from the data vendor that's like listed companies in the energy sector.

And then like, it turns out they're investing in like railroads that transported coal.

So they got in trouble for that.

So that's like the level of policing of greenwashing that the SEC can do is like, if you say something and you don't do that due to like laziness or like buying the wrong data set, then you'll get in trouble.

Yeah.

I do like that the defense is probably like, well, it's just a little bit of cigarettes, you know, if I have like one cigarette a month, it's not that bad.

Right.

I mean, like, I mean, like, they didn't invest in tobacco companies, but they invested in like drugstores that sold cigarettes.

Yeah.

I also think it's interesting, and this was a point raised by my colleague, Vildana Heyrich, that, you know, Wisdom Tree was fined here, $4 million, not necessarily the third-party data provider.

Well, my impression is that the data provider actually, for the most part, accurately described its data sets.

So like the ETF description and prospectus didn't match up with the data that they were buying?

They weren't like buying an index.

They were like, we're excluding companies that do this.

And then the way they excluded companies that did that is like going to a data provider and saying, what companies do this?

So

it wasn't like the data provider's name was on the ETF.

Yeah.

That's interesting.

The tobacco stuff, I'm actually...

I'm not sure if I got it right, but in general, the data provider accurately described what was going on.

Yeah.

And Wisdom Tree just bought the wrong data.

I've never smoked a cigarette, just so everyone is clear.

It is interesting.

This kind of tracks with what we were talking about.

I swear.

This podcast was basically for Katie's parents.

I've never smoked a cigarette.

I swear to God.

I believe you.

Anyway, moving swiftly along, this is similar to what we were talking about a couple of weeks ago.

You were saying that the SEC won't define ESG.

It really is the same for all principles-based investing.

We talked about the biblical

WWJD.

What would John do?

What would John do?

And how they were...

Bible washing.

I think about that all the time.

Yes.

It's a great phrase.

But yeah, principles-based investing.

It's hard to define, but it seems easy to run afoul of doing what you said you would do.

Right, no, I mean, like, in the general case, like, you can't define principles-based investing because you could have any set of principles you want.

It's just the SEC is going to check up on your principles.

One gets the sense that the SEC as an institution sort of likes some sort of ESG principles and would like investors to invest in things that are environmentally and socially and governance-minded, right?

That's why the SEC has proposed rules about climate change disclosure, not just because it thinks the disclosure is interesting, but because it thinks investors might like to invest in greener companies and avoid browner companies.

I get the sense, I could be wrong, that the SEC is less interested in biblically based investing.

And the SEC doesn't think that investors should try to avoid companies that contribute to like gay rights charities.

Right.

Speculation.

Yeah.

One might think that.

Speculation.

But the SEC doesn't get to choose, right?

The SEC just looks at your list of principles and says, did you buy the right data set to adhere to your list of principles?

And sometimes with both ESG and with biblically based investing, the answer is no.

And then the SEC finds you.

It's like a non-substantive.

It's just like going around checking the boxes.

It's not like interested in the substance of the things.

I will say it's been kind of fun to watch.

There was this big demand for ESG, or at least, you know, a lot of these fund companies would tell you that there was all this fantastic demand.

But I think that they just wanted to launch products because now you have a lot of ESG funds that have been closing.

That's the case in the US.

Well, there was a lot of demand.

I don't know.

I think it was all BlackRock.

Backlash.

Backlash.

Backlash.

It was a huge backlash.

Backlash.

Backlash.

Maybe there was demands.

Backlash rhymes with BlackRock something.

I don't know.

I think that a lot of fun companies launched a lot of ESG products because it was in vogue.

And then the demands maybe wasn't there to the way that maybe some of those fun companies thought there would be.

Yeah, it was in vogue among fun companies.

And I think there was a sense that you're getting ahead of the giant wave of demand that was coming, and that wave was not quite coming anymore.

I have a parallel to make.

Sure.

Well, first of all, you're seeing hundreds and hundreds of ESG funds shutter now, both in the U.S.

and in Europe.

It's sort of similar to how all of these automakers were like, we are going to phase out internal combustion engines and pivot to EVs.

And a lot of these legacy automakers have had to take a lot of losses because the EV demand isn't really there.

And of course, when it comes to that, it's probably a combination of range anxiety.

The charging infrastructure in the United States isn't quite there.

EVs are more expensive for now than normal cars, but you could draw a lot of parallels to the ESG fund space.

I think that like ESG investing is so interesting because part of the thesis for ESG investing is we're going to avoid fossil fuels because

In the future, there will be such public backlash against fossil fuels that it will be impossible for fossil fuel companies to to be profitable.

There will be regulation stopping them.

There'll be, you know, carbon taxes.

There'll be something that makes it uneconomical to run a fossil fuel company.

And to have that investing thesis, you have to have this like view of the future of public opinion that's like really quite stark, right?

You see the same thing here, right?

If you're an automaker and you're talking to like your shareholders who are investment firms that are launching a lot of VSG funds, there's this like widespread view of like the consumer

demand for clean energy and avoiding avoiding fossil fuels is going to be so strong in the future that like you'll need to have a robust EV business or like you'll need to have a lot of ESG funds.

And

evidence for that was kind of, it was like a little bit wishful thinking by ESG investors.

And it turns out that the projections about like future consumer demand were not right.

There's so much more to say, Matt, but I actually literally have to go get the oil on my car changed right now.

It's not electric.

That was a choice I made because I don't know where I would charge it.

There you go.

And that was the Money Stuff Podcast.

I'm Matt Levi.

And I'm Katie Greifeld.

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The Money Stuff Podcast is produced by Anna Mazarakis and Moses Andam.

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