Who Made Money Last Year — Analyzing 2017
Jordan Roy-Byrne: Hello and welcome back to the Atlas Investor Podcast with Tiho Brkan. Thank you so much for tuning in today for episode number nine. Tiho, we've taken a little bit of break. We're enjoying the new year, but we're ready to get back at it today. How are you doing my friend?
Tiho Brkan: Yes, I'm glad that we're back. I'm very, very well. I'm really looking forward to doing a few of these podcasts in January and into February, starting with a summary of 2017. Even though many have done a recap of their own, I think ours will be worth following.
Jordan Roy-Byrne: Okay, Tiho, so before we get into it, very quickly maybe just a big picture thought or two on 2017 and what you're going to highlight today in this episode.
Tiho Brkan: We're going to talk predominantly about equities, Jordan. Equities were really the stellar performer, the asset class that outperformed just about everything else. In particular, if you bought an All-Country World Index in January 2016, near the lows, you'll probably be up 50% or maybe even more than 50% over the last 24 months. So equities have really been outperforming everything. In December we did an episode called Four Reasons Why Stocks Are Risky and since then, equities have been going parabolic. So we're going to summarize 2017 and talk about what that might mean for 2018. So let's get into it.
Jordan Roy-Byrne: Okay, Tiho. So 2017 was a spectacular year for global equity markets. Please share some of the performance figures with us.
Tiho Brkan: Well, first and foremost I think everybody follows the United States stock market, and that's predominantly the biggest waiting in any benchmark when it comes to global equity ETFs and indices that we tend to track as investors. So looking at SPY or the S&P 500 tracker, it gained almost 22 percent for 2017. So that was basically one of the best years in this bull market. I think it matches 2009 and 2013.The United Kingdom and Japan, as well as the Eurozone stocks, did quite similar. Europe did outperform the US by a handful of percentage points. Developed markets outside of United States finished with about 25% gains.
But the really strong story, Jordan, and this is the story that I was hammering the whole year, especially from the beginning of 2017 — because the dollar was so overvalued at that point in time and everybody was betting very, very long towards the dollar expecting it to appreciate further — the theme was that it was time for US investors to go foreign, and in particular emerging markets. And away from US tech, basically the Silicon Valley bubble as Charlie Munger would call it in his recent interview, away from the US stocks it was emerging markets that outperformed. In particular, Asia where I tend to spend half of my year and where I'm always looking for opportunities. Asia, ex-Japan gained almost 42%. That is a terrific year. Emerging market stocks gained 37%, frontier markets 36%. One of the calls in the frontier markets that I made, in particular, was Nigeria, which did really, really well and is still doing well, as my investors would know. Chinese stocks have recovered from their crash in 2015, and it's good to see that, so they're doing pretty well. And international real estate has also outperformed US stocks, too.
So, generally speaking, many Asia and emerging markets are doing well. Some of the countries that really stood out there in Asia were countries like South Korea, but we'll get into that later. United States real estate, Jordan, that really disappointed and it continues to disappoint here in 2018, actually turning negative for the year. But last year in 2017, it only managed a 4.9 percent return, and clearly, Fed interest rate hikes are impacting this interest rate sensitive asset class.
Jordan Roy-Byrne: Right. Now let's talk about other asset classes. Tell us how fixed income performed and then some alternatives like gold and private equity.
Tiho Brkan: Sure. Well, fixed-income-wise, we had a decent year considering how low the yields are. You can't really compare intermediate Treasuries with very, very low volatility towards equities with high volatility. Even though this year and last year, nothing was actually volatile. But generally speaking, over the long historical, statistical view, five-year treasury bonds or a seven-year treasury bond has completely different characteristics to the US equity market, and especially the emerging market stocks. But nevertheless, we had positive returns for all fixed income and alternative assets apart from energy infrastructure. Master limited partnerships were the disappointment of 2017. They were down over seven percent. Gold did the best out of all the alternatives. Having said that, though, there is a lag in reporting for private equity direct, real estate and venture capital that I track — and there are over 2,000 funds that report for their returns for the year — so, therefore, we have to wait for another quarter or so before we get that final figure. I think that gold might not be the best performer in alternative space.
Private equity did pretty well and similar to gold. They both finished up between 12 to 13%. Emerging market debt in local currency also did very well in the fixed income space because the US dollar had such a bad year, and that was up 12 and a half percent. Hedge funds finally, after such poor performance, had double-digit returns. But 12% looks horrible compared to 22 percent in the S&P. So, these guys are just not getting a break, Jordan.
Jordan Roy-Byrne: Okay, Tiho, you've covered the performance of equity markets, fixed income and alternatives, but finally I'd like you to discuss how the Atlas Portfolio performed and I know that you generally run two different portfolios for your clients. So please explain the differences and then how those two portfolios performed.
Tiho Brkan: Sure, well since I'm a young fella or at least I like to think so, I run my personal money slightly different to somebody with different goals and objectives. Every investor, depending on their age, their spending habits, their lifestyle and their targets and goals that they want to achieve — will have a slightly different portfolio. Because I'm young I'm all about capital growth and trying to increase my wealth. Somebody that's between 55 to 65 might be more into income producing portfolio or even capital preservation portfolio. It really depends on what your objectives are, Jordan. So basically the standard portfolio that we run which has lower volatility, lower risk and it's globally diversified, regionally diversified and also has a larger mix of, not just public assets but also private assets, that portfolio did 15.3%. So, clearly not as good as Asia, ex-Japan stocks that did 42%.
Having said that, I did a little bit better because I take more risk. I use more leverage, and I got into the mid-20s for my returns, and I did overweight myself quite a lot of emerging market stocks and so forth. But November and December were not good for me. And they were really good months for those portfolios that were just holding equities. I believe equities are now getting overvalued so clearly, I did not collect that run which seems to be getting really overbought. Generally speaking, the returns of 15% are very desirable for me because anyone that does basic mathematical statistics would know that if you can average 15% for five years straight, you will double your money. Last year I did 14%. This year we did 15% in the portfolio. I'm very happy on that note. The real test will come through when equities correct, and this is where we try to get an absolute return that's positive, even if equities finish lower for the year.
And this is a bit of a warning, Jordan, because US stocks are now up nine years in a row, and that matches the last record into the late 1990s before the tech bubble peaked. Not saying that they can't go up 10 or 11 years in a row. They definitely can, but this is highly unusual and not very normal activity, so the real test for my portfolio will come when equities correct and we'll see if the diversification pays off.
Jordan Roy-Byrne: Okay, Tiho. Last thing on performance. Let's talk about some individual countries and how they performed, what the real leaders were. And first I'll just say, I know that Poland was one of your biggest winners of the year, but Poland actually came in second by just a hair. So maybe in 2018 you can do better and actually pick the number one performer.
Tiho Brkan: What can I tell you? We were winning for the whole year with Poland, and I definitely thought Poland had a good chance. It was a very cheap market, just like Turkey except Turkey gave some of its gains throughout the year back because the currency weakened while the Polish Zloty stayed strong. But Austria beat us in the end. What can I say? 52.5% for Austria is an unbelievable return in 2017. Poland second with 52.4 %. We had five equity markets return 40% or more, which also includes South Korea, Chile, and India. Incredible. Another pick of mine was Vietnam and Turkey. As I said they did pretty good, and we had one third, even more than one-third of the global equity markets that I track personally return more than 30%. S&P as I said, did 21.7%, and it only outperformed a handful of stock markets. In particular, it outperformed the United States small caps. It outperformed Chinese small caps. It outperformed the United Kingdom and the Philippines, and then the Middle East was in a bit of trouble, Qatar, and the Emirates didn't do very well.
I think even Saudi Arabia which is not included here, which is a new ETF that's been released, also didn't do well. Russia didn't do well. Columbia didn't do well. Generally speaking, the average return was 25.7%, and the median return was almost 27%, so that was a stellar year for equities, Jordan. Forget all this diversification. I should have just went along with Austria and Poland. I made a big mistake, right?
Jordan Roy-Byrne: Well, you were at least half right there. You got one of them. Maybe, like I said, maybe this year you could pick the top one.
Tiho Brkan: Well, jokes aside, it wouldn't surprise me if Greece continues to do well, even if everything else doesn't. I mean, Greece has been so badly hammered, it's had worse performance than the United States during the Great Depression. The Greek real estate market as we discussed in one of our first episodes was down nine years in a row. Out of all the MSCI indices, I track, Greece has the worst 10-year compound annual growth rate.
Wouldn't it be interesting if the United States had a recession, and the bear market in Greece tends to have a positive return, after having a lost decade and a depression of its own? It finally comes out of that and the stock market does well. Even when things are so, so, so, so, so bad, even just getting to really bad is an improvement for the stock market, and Greece has a chance to outperform in coming years, I think, being so depressed, Jordan, so one to definitely keep an eye on.
Jordan RoyByrne: Oh, for sure. Now with that said, let's talk about just the lack of volatility during the year. I know you have a lot to say on this subject, but in one respect, I mean, the monthly performance, is it true that both the S&P and global equities went up every single month last year?
Tiho Brkan: Yeah, well that is true. The S&P 500 total return index and the All Country World Index (ACWI) by the MSCI, both of those indices were up every single month since November 2016, including January of this year. So, they were up January to December throughout 2017. That's never happened before. Now ETFs tend to have a bit of a tracking error as they have fees as well. So the All Country World Index ETF didn't reach that feat. It was slightly off in June. Nevertheless, the indices actually did, and that's never happened before. So you're right. So we had a perfect run.
Donald Trump gets elected. November is up. December is up in 2016, and then we had a perfect run, 12 out of 12 for 2017, so that's never happened, and so now we're up the 15th month in a row, including January. And I think this month the S&P is up another 5 percent or even more. So unbelievable. It definitely, to me looks like the bull market is finishing with a bang. But it remains to be seen if this is going to be the final peak or just an intermediate peak before a correction. So yeah, the volatility, Jordan or the lack thereof, that's definitely something to discuss.
Jordan Roy-Byrne: Yeah, before I get to volatility when you mentioned Donald Trump I was just thinking, he would probably say that record month by month streak is entirely because of him.
Tiho Brkan: Well, yes. I mean, I think he would also say that he's the person of the year. Didn't he say that Time magazine rang him up, and they said we chose you to be the man of the year? The person of the year, but you have to do an interview and a photo shoot, and then he said I kindly declined. I'm too busy. So, he’s a very modest guy.
Jordan Roy-Byrne: Right, but okay, Tiho. Let's talk about the S&P 500 and the volatility or lack thereof, of volatility. I mean, give us some statistics so our listeners can understand just what was going on with the lack of volatility.
Tiho Brkan: Sure, well in some regards volatility is as low as it's ever been. When you look at the average true range of the price or when you look at the standard deviation of the 12 months, the annualized volatility of the initial price, we're going back to 1960s or back to 1900s and there is nothing like it. When we used the VIX, which is more commonly used, and I put a six-month moving average, it's the lowest in, at least, I would say two and a half decades. The lack of volatility is basically the total opposite of what we saw during the global financial crisis and the post-aftermath of the global financial crisis during the Eurozone debt saga. The crisis that went on, I think, the Europeans set 40 meetings and they never resolved anything, so in the end, they just got Mario Draghi to print money. That always fixes everything. So now volatility's very low, the equity markets are booming and we're having the total opposite, and that's usually what markets do, they go from extreme to another.
So if you thought volatility was crazy in 2008 and 2009, you're definitely falling asleep right now. We're enjoying the total opposite of that. And when you put very, very strong returns together with very low volatility, you get an incredible risk-adjusted return, Jordan.
Jordan Roy-Byrne: Yes, tell us about that because I'm really interested as to how last year the risk-adjusted return, how does that compare with the past and in some other years where there was just such fabulous returns and then amazingly low volatility?
Tiho Brkan: So it was the best risk-adjusted return since the 1995, '96 period. I don't track the Sharpe ratio like others do because basically, that's the excess return. You remove the risk-free rate basically, the T-bills or I think some people use the treasury bond and so forth because interest rates have been so tampered and manipulated by central banks, they've been artificially suppressed is a better term to state here. There is no, in my opinion anyway — personally for me, to use a Sharpe ratio where the interest rates were sitting at zero for eight or nine years. So, not important for me, so I look at the risk-adjusted return in the way of what is the volatility relative to what is the return, and that was the best since 1995.
Interestingly 2009, the bottom in the equity market was the worst risk-adjusted return since the oil embargo in 1974. So we've gone from one of the worst in a generation to one of, or the second best in a generation. So, 1995 and 2017 go down as two of the best years since the 1950s. So yes, we're really living through a great stock market rally, Jordan. I think Alan Greenspan said that it was irrational exuberance around that time. This is rational exuberance. Everybody knows that they can't earn anything in bonds or in cash at bank, so they're being rationally exuberant. They're actually chasing returns because they have no other choice.
Jordan Roy-Byrne: Oh, very well put. Now, Tiho, let's move on and talk about along the same lines as far as the lack of volatility, the maximum drawdown within a calendar year in 2017 and then how that compares to history and what that tells us about the next year or two after. Does a small drawdown always imply a bigger draw down the next year? What's your data telling us?
Tiho Brkan: Sure, I went back and I looked at maximum drawdowns within a calendar year going back to the 1920s, and this was the second lowest or the lowest on record depending on the data. I think it was 2.5% drawdown. So rounded up, it was similar to 1995 at about 3%. One of the lowest ever, and this year, by the way, I know we've only started the year and we are three weeks in, and the S&Ps already up five and a half percent or something, but the drawdown, Jordan, is zero. So the market never goes down anymore. So if this year finishes at zero, that'll be the lowest.
Jokes aside, by the way, the average drawdown intra-year is about 16%, and the median one is about 13%. So the one standard deviation on the positive side is about 4.5%-5%. So we were more than a standard deviation, this is a very unusual year, and one standard deviation on the negative side is 28, and that's usually what happens during recessionary periods or whenever earnings drop or whenever we have a financial crisis catalyst.
What happens after low volatility periods? Well, there is no perfect indicator in markets, and nothing is 100% certain or effective but usually, periods of low volatility are followed by periods of high volatility and likewise for drawdowns. Low drawdowns are followed are followed by higher drawdowns in the coming year. So we had something similar in the 40s and then we had a big drawdown during and after World War II. We also had something similar in the 50s and then a big drawdown during the Eisenhower recession in the late 50s, and then once again we saw the same thing in the 60s on two occasions, and in particular, we saw something like that in the mid-70s. After Nixon took off the gold standard, we eventually had the Bretton Woods collapse in 1970, '71. And then we had, after a very quiet 1972, 1973 and 1974 had 20 and even almost 40% intra-year drawdowns.
Having said that, in the mid-90s, volatility stayed very, very low and drawdowns remained in single digits for about five or six years. But afterward, we had catastrophic volatility, in particular, first starting with the Asian financial crisis in 1998 where we saw some stock markets like Singapore, Indonesia, Philippines, Thailand, Vietnam and so forth, decline by 90 percent. So talk about a drawdown, and there also were some others, too, that I didn't mention like South Korea and Japan, that definitely had big declines as well. And then obviously we had the tech crash in the early 2000s. So now we're in a period of very low volatility. 2013 and 2014 were years of very, very low drawdowns. Drawdowns did start to rise a little bit in 2015, '16, a period where we saw China have a crash in emerging market slowdown, and a period where oil crashed, and also a period where we saw Brexit and European financials under pressure again.
This did not affect S&P 500 that much, and after 2015 and '16 we had a stellar year in 2017 with very low drawdowns. This has continued into 2018 as well. I think eventually, it's hard to say when, but eventually, periods of low drawdowns will lead to some pretty high drawdowns, Jordan. I think the risk event is just around the corner in my opinion. Whether that's a one-year phenomenon or whether that's a handful of years type of phenomenon remains to be seen. But if you remember the episode that we did, warning about why stocks are risky, you would remember that valuation was one of the key things that we covered, and since then valuations have trended even higher.
Jordan Roy-Byrne: So Tiho, with that said, how does this period compare to other periods in history?
Tiho Brkan: Well, one of the things that's interesting about drawdowns is that if we use the monthly chart and we look at the monthly data, and that's usually what you do when you're looking at 30, 40, 50 years of history, you would notice on the monthly closing basis that drawdowns have not been higher than 10 percent since 2012. So we're now running into the sixth year where the market has basically corrected only in single digits. The only instance of this happening actually was during the emerging markets slow down and the crude oil crash in 2015, early 2016 period. We saw something similar in the beginning of 1990s into mid to late '90s.
So from 1991 to 1997, we saw a similar phenomenon where the market just kept running and running and running, and we had a period, I think, of seven years where the market on a monthly basis never had a drawdown of more than 10 percent. We had a similar period once again but for shorter duration in the 1980s, from 1982, 1983 period until 1987. So periods like this where investors become very exuberant and they trip over themselves to get into the market having FOMO — the fear of missing out. There is no better motivator, Jordan, than when you're next door neighbor is getting rich, and your buddy next to your cubicle is making all this money in stocks and you're not. You fear to miss even more gains and you just pile in. And it's usually these very low volatile, very complacent periods that lead to a catastrophic type of a market event.
During the end of the 80s, it was the '87 crash. During the end of the 90s, it was September 11 and the technology crash, but even the Asian financial crisis before that. So I'm wondering how this period will end and also how long will it keep going for. That is something to keep very much an eye on. I mean, you have to understand that S&P was trading at 666 in March 2009, that famous devilish number, and now we're approaching 3,000. So you're not buying low and selling high anymore. The market has gone up quite a lot. Keep that in mind and every single valuation metric reflects that. That doesn't mean the momentum cannot run higher, Jordan, and it doesn't mean you go and short the market right now. But just keep in mind that if you're a longer-term investor looking to allocate your funds, there are better places to put your money to work today than in the growth stocks, junk bonds, technology stocks, United States stocks and so forth. They've had a terrific run.
Jordan Roy-Byrne: That sounds like you could also throw cryptocurrencies in there.
Tiho Brkan: Well, cryptocurrencies are not up nine years in a row, but they've made more in nine months in 2017 than S&P did in nine years. So, yeah, we could throw that in as well.
I think Alan Greenspan said that it was irrational exuberance around that time. This is rational exuberance. Everybody knows that they can't earn anything in bonds or in cash at bank, so they're being rationally exuberant.
Jordan Roy-Byrne: Okay, Tiho, now moving on, you mentioned sentiment a little bit a couple minutes ago. I just wanted to come back to that. Is there anything right now that's catching your eye with sentiment? Is there any, I mean we know that sentiment has been very bullish for a while but in the last month or two, are they any sentiment indicators that are showing something more notable?
Tiho Brkan: Well, more and more of them are just showing record-breaking statistics. I think the daily sentiment index for Nasdaq, which has an inception at the beginning of 2000, hit a record of 96% bulls the other day. Investor intelligence, its bullish sentiment, hit over 67% and the bears got down to only 12%. You have to go back to 1986 to see numbers this extreme. So we're looking at about three decades, so 30-plus years. So maybe you could trade another 30 years, Jordan, and you become a handsome old man with gray hair like a real silver fox and you're sitting there like Gordon Gekko in your suspenders, trading and you might not see an event like this for another 30 years. Maybe you will, but it took about 30 years for advisors to become this bullish, and I know that the readings are a little bit different for this survey relative to the 70s and the 80s, but nevertheless, it just goes to show how high, the nosebleed-level sentiment is right now.
It's just been averaging more than 60 which is extreme on its own. I think for the last several months, and as you can see, for those watching on the YouTube channel, S&P has basically gone parabolic. It's just going vertical now. It's rising exponentially and every month it's rising. You know what I actually think is happening, Jordan?
Jordan Roy-Byrne: Well, I don't because, you and I, we haven't talked about this privately.
Tiho Brkan: Yeah, I think all jokes aside that the stock market had a very bad feeling about Bitcoin getting all the attention, so it decided to go parabolic as well.
Jordan Roy-Byrne: That's very possible.
Tiho Brkan: Yeah, so basically sentiment is following that. We have FOMO with investors and I think it's a very risky event for those that are not prudent traders with tight stop losses and that is kind of complacent, thinking that this kind of lack of volatility will persist for a long time. So one has to be very, very careful here. But generally speaking, the current environment of no correction will end one day and one day soon I think, Jordan, so how about we discuss that.
Jordan Roy-Byrne: Yeah, let's. That sounds good, although I do want to come back to your silver fox comment. I'm hoping that in 30 years I can look like a silver fox. That'd be great.
Tiho Brkan: Well, you keep working on it my friend, and I'm sure something will happen. In 30 years technology will be much, much more progressive when it comes to vanity and such.
Jordan Roy-Byrne: I'm sure it will.
Tiho Brkan: I think the South Koreans will be leading that as they are today. But having a look at the correction period, basically since North Korea, we haven't had anything that worried the stock market, the least little bit. One interesting thing is that since the Brexit, we haven't had a five percent drawdown. That is now at 394 trading days, Jordan. On top of that, since North Korea, we haven't had one percent drawdown, so I think we've gone more than 100 trading days without a one percent selloff or a one an a half percent selloff somebody would say. I'm not 100% sure on that, but give or take, it's just about there. So the market is now going vertical as I've said before and this is one of the greatest runs without any kind of a pullback. We're witnessing history I think. If you are long, I really congratulate you. Number one, you're really, really smart or number two, you're really, really stupid.
Jordan Roy-Byrne: Well just, Tiho, one follow up question on that. The fact that we're getting into record territory for days without one percent or one and a half percent pullback, I mean, is that a sign that we really are in a, like a serious blow off move? What is the downside risk after this move exactly?
Tiho Brkan: Well, my mentor one time taught me, and several other people also taught me that parabolic moves — vertical moves — they don't end with mild corrections. We are starved for a correction. In the 60s we had a period where we had 386 days without a correction, and eventually in the 70s corrections made a comeback and bear markets made a comeback. In the mid-90s the same thing happened as well and we had 394 days without a five percent setback. Now, we're breaking that record according to the Financial Times. Somebody else's data is a little bit different. My data says 399 is actually the record in the 1990s, but nevertheless, it's all pretty similar. But one of the things that I want to say is that because we are starved for corrections and we haven't had a healthy pullback where investors can allocate more funds, whether it's the funds that they receive from the dividends or from their fixed income or from liquidity events of selling their private businesses or their properties, nobody had the chance to actually allocate and increase their equity weighting unless they were chasing the stock market.
So from that aspect, everybody's kind of the mentality of wait and see whether we're going to get this correction or not, and some capital I'm sure is waiting for this correction. From that aspect, the way that I think about it is that a blow-off move or a parabolic move usually doesn't have a mild correction, and because everybody's waiting to buy the dip, they buy the next correction, because we haven't had one in almost 400 trading days which is over a year and a half. Any kind of a little correction that we get, I think a lot of people will pile in, and at that point in time, it's going to be important to watch whether the stock market, after such an amazing performance since January 2016, actually continues to make new highs. If everybody piles in on the first correction and the market rallies and fails to make a new high, it makes the first lower a high. I mean, you basically have a classic setup where a majority of the money piled into the top and this is something that I'm worried about.
With everybody saying that oh, you know, according to statistical studies because the S&P momentum is so strong, whenever it corrects by five percent, you have to buy because you know, 11 times out of 15 over the next 12 months it'll be up. This is the kind of thing that's making the rounds everywhere, but yes, 11 times out of the 15 it has been up. However, 11 times out of the 15 the price to sales ratio wasn't this high, the CAPE ratio wasn't this high, the bull market wasn't up nine years in a row and the sentiment wasn't this high. So you can't just compare any time in history to today's time. This is a special event and a special condition of how investors are behaving. Every one of them is different on its own merits so I'm thinking a lot of people are just reading a lot of bullish narratives.
They've been starved when it comes to pullbacks, and they haven't had a chance to allocate funds and they're getting very impatient. Thus, any kind of a 5% to 7% correction will be bought almost instantly, at which point in time it will remain to be seen whether the market will actually make a new high after that. If we will follow through, or if it does follow through, it might be only marginal where we have something known as a breakout by technical analysts, but a majority of the people will be actually trapped because once you have a false breakout and a reversal, you tend to have a sharp correction. So this is what I'm really scared of when it comes to managing my client's hard earned and hard saved money.
I don't want to be buying a price to sales ratio that's record high in CAPE that's, the highest at any point since the few quarters of the tech bubble and the price to GDP ratio similar to 2000 and so forth. Valuations reached incredible levels. Price to book is also very extreme. So you could be trapped there and it might be difficult to get out if the stock market starts to unravel. So I would like to see a decent fall and as decent, I don't want to say a crash, but a bear market which can give value investors a chance to buy. And we've had nine years of just positive returns, so hopefully one of those will come soon, Jordan. Otherwise, we'll all be fired, all of us fund managers, well including me. I'll definitely be fired.
Jordan Roy-Byrne: Well career risk, Tiho, that's a serious thing. I've known you for five or six years, and you're very good at what you do. I don't think you'd ever get fired, but career risk is definitely something that many people have to worry about. And on a serious note, Tiho, maybe a lot of those people you're talking about are going to pile in, maybe those are the ones facing career risk. Who knows?
Tiho Brkan: Well, it's possible. I actually had an interview recently with one fund manager in the Middle East and he was describing exactly that to me, and I think it's a difficult time for everybody, but you don't have to worry, Jordan, because I have plan B. My plan B is that in case I miss the next two or three years of rising equity markets, which will never have a five percent setback again, I just plan to put 99.9% of my own capital into Bitcoin and they'll make up for it.
Jordan Roy-Byrne: I'm sure it will.
Okay, Tiho. Great work today on the wrapup of 2017, a spectacular year for investors in equities. So Tiho, before I let you go, well actually, you haven't told me this yet, but what are you going to be covering in episode number 10?
Tiho Brkan: Well, first of all, Jordan, it's very good to be back doing this podcast again after a New Years break. I definitely got some sun while I think you were freezing in Northern America, and some of my clients there I was talking to in Europe, they're having a snow storm. I don't want to make anyone jealous, but I'm working a little bit on my tan. But that won't be episode 10. Episode 10 we'll be looking at the Treasury bond market where volatility is starting to pick up. Some big names are talking about the end of the bull market in bonds and bear market in yields, which have been falling for 35 years or so, since September of 1981. This is going to be a really, really good episode because for those of you on YouTube and also on our website, theatlasinvestor.com, I'm going to include some spectacular charts going back 50, 60, 70, 80 years, so we really get a nice historical perspective on what's going on, where we are in the treasury cycle and maybe what we can expect from treasury bonds in 2018.
Jordan Roy-Byrne: Oh, that sounds great, Tiho. I'm really looking forward to that, and as we close, we want to thank the listeners for tuning in, whether you're freezing somewhere or working on your tan like Tiho, we thank you so much for tuning in and if you have a moment, please review the podcast. You can go to iTunes.com and search for the Atlas Investor and you can review the podcast there. We would really appreciate it, and if you have a question for Tiho or any comments or suggestions, you can email them to firstname.lastname@example.org, that's email@example.com. On behalf of Tiho Brkan, thanks for listening to the Atlas Investor podcast. We hope you will join us again for episode 10.