Jay:  Today’s show guest is Jason Hsu, senior advisor of Research Affiliates and chairman and CIO of Rayliant Global Advisors. Based in Hong Kong, Rayliant Global Advisors is an investment management firm focused on smart beta strategies tailored to the Asian markets, as well as Chinese equity strategies targeted at foreign institutional investors.

Research Affiliates, a research-intensive asset management firm, is the global leader in smart beta and asset allocation, delivering investment solutions globally in partnership with leading financial institutions. For those of you who have wondered what the popular buzz word of smart beta really means, this episode is one for you. Please enjoy.

Hi, Jason. thank you so much for joining us. We’re very excited to have you on. Maybe you can give us a quick introduction on who you are and what you do for a living.

Jason:  Absolutely. Thanks, Jay, for the invitation. So I’m Jason Hsu, and I am the founder and CIO of Rayliant Global Advisors. What we do is we create quantamental strategies. And that’s quantitative investment strategies with a fundamental stock picking combined together. Currently, our big focus is in China A-shares and emerging Asia. And we have offices in Hong Kong, Taipei, Beijing and the US.

Jay:  That’s a good intro, and I like quantamental because I think that that is a rare intersection of the two larger ideas. And you’re obviously a modest guy. I know that your background is from Research Affiliates, so maybe you can talk a little bit on that and how you’ve spun off.

Jason:  I actually founded Research Affiliates, be it now 15 years ago, with Rob Arnott. So we’re probably best known for pioneering the entire smart beta space with the launch of the fundamental index. I guess others know it as RAFI. And that’s grown from 2005 in its infancy to today, about $140 billion tracking various different versions of the fundamental index. That’s probably one of the biggest success stories so far in my career, and I’m glad you brought it up.

Jay:  Your work is definitely prolific. So after your work there at Research Affiliates, you wanted to focus, I guess, more on Asia, which is why you spun off Rayliant, which is just Asia focused, is that right?

Jason:  That’s right. So Rayliant Global Advisors was formerly Research Affiliates Asia, and we spun that off at the start of 2016. And that spin off is to allow a dedicated focus in creating China, Asia-specific exposures that we can then supply to global pension funds. 

So it’s very much recognizing that Asia, and particularly China — it’s more than 50% of the global GDP production. And just China alone is 20% of global GDP and crossing over to US very soon. So, I think global investors are underexposed to both the beta and the alpha opportunities.

Jay:  Absolutely, and I think that it was very timely for you, if not even a little bit late, because I think that it’s filling an extremely big pain point for a lot of global investors to have really a specialty, a focused quantitative strategy that they can invest in. And someone on the ground to hold their hand. And we’ll definitely get into all of that in a bit. 

Maybe you can just take a step back and explain a little bit about smart beta. I think a lot of investors hear that term. Nowadays you can hear it thrown around on CNBC and the likes of that. And many people don’t actually know what exactly smart beta is.

We’ve had a huge shift in the demographic of market participation from the traditional market participants to now a lot more quantitative-driven strategies, algorithmic trading, high-frequency trading. And fundamental guys are a very small minority now of market participation, funnily enough. So if you could maybe just give us a brief primer on what smart beta actually is.

Jason:  So I think there’s probably been too much marketing hype when it comes to smart beta. So, as with marketing hypes, it tends to make things really mysterious, really black box, and probably more than what it actually is. So I would say at the simplest level, smart beta is really an innovation in the delivery vehicle. 

The underlying finance, the underlying investment theory, isn’t all that new. It’s really based on the academic literature on factor investing. So there are these behavioral biases expressed by investors, which lead to strategies that could deliver long-term returns. So these are strategies that take advantage of the investor’s willingness to overpay for a growth story, for a glitz name. People speculate with high-beta stocks, high-skew stocks. 

So these things are well understood in the behavioral literature, but we’re now putting that into a transparent, low-cost index-like chassis. So often times, you find smart-beta products in index funds or ETFs with a underlying transparent index in the background. And, really what it’s doing is it’s giving you exposures to these strategies. 

So previously, we’re really in the domain of hedge funds, who are more quantitative or more sophisticated when it comes to understanding the behavioral literature. So I think all the investment strategy and theory has been there, has been used by very, very successful hedge funds and investors. Just now, we’re making that available through a low-cost index chassis.

Jay:  Understood. So you bring up a very crucial point, actually, and it’s investing — the craft of investing is such a large portion of it is psychology. And so, I want to just talk quickly on this because I think that particularly in Asia where the various markets have a large retail component to it, I feel like there’s less maturity when it comes to investor psychology, cognitive biases and this sort of thing. 

What are some of the reasons why you’re able to use smart beta to take advantage of broader investor psychology and actually capitalize off that? What are the flaws within human psychology that cause people to consistently make mistakes when they invest?

Jason:  The one word you mentioned that is the most important is consistent, right? If it’s a mistake once in a while, you correct from it, then the opportunity is so fleeting as to perhaps not be worth the time of any serious investors with actual dollar they’re putting to work. 

So the question is, how can it be that we consistently make mistakes? So a lot of the research then comes down to it has to be part of our DNA, meaning we do it because it’s a good idea everywhere else in our life, and so we can’t help ourselves but keep doing it, investing even though it’s still a very bad outcome. 

So just take, for example, overextrapolation. We know that is a horrible thing in investments. The fact that this stock went up a lot doesn’t tell you it will go up more next year. In fact, it should tell you it’s become expensive. But yet, if you ask the average investor, more likely than not, they think that’s a great stock.

“It went up a lot. That asset class went up a lot. We should put some money toward it.”

“That manager was really, really good the last two years. Shot the light out. Let’s give him more money.” 

And it makes sense, and we keep doing it because, in our everyday life, someone who is an A student last year is likely to be an A student next year. Someone who’s a star athlete is likely to be a star athlete next year. 

So we see that persistency, so we expect that to be true everywhere else. Except that it happens to be almost the opposite in finance. But yet, it’s just so ingrained into how we process information, that unless you are a very disciplined manager, then it’s really, really hard to work against that human nature.

Jay:  Yeah, like you said, consistency is the key. And it really is. It’s consistently people always get it wrong. And even professional managers that have done it for decades still fall for the same cognitive biases. It’s funny because, even as an investor myself, I catch myself doing the same thing. It’s like you say, you just can’t help it. It’s almost part of our DNA. So, thanks for that. 

And before we move into China and the region, which is what I’m really excited to talk to you about, very quickly you mentioned quantamental, which I like. How do you guys at Rayliant intersect the two, fundamental and quantitative strategies? What is the methodology there?

Jason:  So for a lot of people who have been trying to do quantamental, and that really, I think, is a holy grail in our industry because you have smart people who can analyze data, write computer codes. And you’ve got really smart people, really deep inside of our firms. Not to have both of them work together seems suboptimal. But yet, it’s hard and I think part of what’s driving that is, again, human psychology. 

There is a lot of ego when it comes to star researchers, whether it’s quantitative or fundamental. But because they don’t have the same language, there’s a lot of misunderstanding. Quants are all about statistics and data, not so much about how the company actually works. And fundamental researchers are all about deep dives into the management of company’s supply chain and industry. And to them, to say law of large number works on average, to them is just really irresponsible. 

And so, at our shop, a lot of this helping both sides understand what is the other side doing that adds value, that you yourself probably aren’t doing right now and could either one benefit by saying, oh this way of thinking about companies from a fundamental perspective could be modeled quantitatively. So I can now use data to inform me whether, on average, it’s true or is it better than average? 

And if there’s things you can model, then of course, you don’t want your portfolio and your target weights to reflect only things you can model because there’s so many risks that you can’t model. Wouldn’t it be a good idea to say, hey, here’s someone else who can deal with things that I cannot model, who can qualitatively risk manage my portfolio and override my weights within some guidance? 

And I think it just takes time for both sides to trust that each side is really helping — helping them create better models. And also, in cases where a model can be created, helping them invest better by complementing your gaps. 

Jay:  It’s really interesting because I was just thinking about how when you talk extrapolation as one of the cognitive biases or flaws, that happens even for, say, fund-to-fund investors. When they’re looking at a hedge fund manager who’s had maybe a couple years of good track record, all of the sudden they’re extrapolating his return out 20 years, and they think that maybe they’ve found the next big winner. 

And so, I think one of the challenges, which is why your strategy is very interesting, is because at the end of the day, all fundamental-type managers, it’s still you’re betting on a very large human component or element to it. And so, even if someone demonstrates a long track record of successful investing, there’s always the outlier, which is maybe the manager is going through a divorce or maybe a tragedy happens. And then these sort of things, it’s always a risk that you have to take into account when you’re betting on a manager. So I definitely appreciate the quantitative side to your strategy. 

So let’s move into the region now, where you have your expertise. Let’s talk about Asia, China in general. There’s a lot of investors out there, both on the institutional level and the individual level, that are still very in the dark with what’s going on out here in Asia. And I think other than Donald Trump, the second-most talked about thing in the markets is probably Asia and China and where the growth is and how do you get involved? 

A lot of people are on the sidelines because they don’t have people like Jason Hsu from Rayliant that they can pick up the phone and call and ask what’s going on and how do I involved. So let’s give a brief background, an overview of what the markets look like out here, and then we can go into some strategies on how investors can take advantage of it.

Jason:  When you think about Asia, and then again, let’s be specific and talk about the biggest component of Asia, basically greater China — all the satellite economies that surround China — the two things you really want to pay attention to is one, the beta component and the other one is the alpha component. 

The beta component, if you’re just going to passively ride that wave, it’s an interesting beta. It’s a beta that contains a lot of growth. Where else are you going to buy growth, and buy growth that has such large capacity?

And because right now China isn’t as globally integrated when it comes to its financial market, the correlation between Chinese A-shares and the rest of global major indices is actually really low. It’s only about 0.3. So from a beta perspective, you have diversification, and then you have, really, this ability to buy growth. 

What’s even more interesting, of course, is the alpha component. When you think about alpha, alpha has to come from someone, right? It’s a zero-sum game. Any time you think of X’s performance, the most important question isn’t, how are you going to win? The most important question is, who is going to lose? You can’t answer that, right? It’s like you go into a poker room. If you can’t identify instantly who is likely the loser in this poker game, it’s probably you. 

Go into China, and instantly you are comforted by the fact that 90% of all trades in China, these trades are placed by essentially retail investors who are not very sophisticated, who probably operate based on bad information, stale information, completely public information that they confused as useful, private information. 

So chances are, willing losers on the other side of the trade, and that’s a pretty good deal, right? On the other side of your trade is not Goldman Sachs. It’s now Rennaissance Technologies. Your chances are a lot better. 

Jay:  That’s true. That’s a good point. I think when you talk about China— so there’s two takeaways from there. It’s number one, if anyone is a fundamental type investor, don’t even bother because there’s a lot of— from a fundamental perspective in China, and I know this personally because we’ve gotten burned a handful of times in China trying to trade on fundamental basis. It just doesn’t work.

The way Chinese companies trade are definitely not fundamental. There’s no transparency. There’s no corporate governance. And you’re always subject to government bailouts and this sort of thing or large conglomerate SOE type bailouts. So it makes for a very interesting and difficult landscape to navigate in. 

And the other thing that I’d like to say is on your first point, mentioning how underweighted the Chinese indices are in global portfolios – and I think that that is actually, on a longer-term picture — that is probably something that I’m most excited about. And I think that it’s almost, it’s funny because I feel like some of the managers that have come in and gotten burned by China, they leave, and they’re missing the forest for the trees. 

They see this trade, the short-term trade, and they get burnt, so they’re like I’m not touching China any more. I’ve had enough. And meanwhile, they’re missing this huge trade of, like you said, the underweight holdings globally of the Chinese shares, basically. So if China does become the world’s largest economy, which it basically will, they are going to miss out. 

So having said that as a backdrop, what would you recommend for people to— how do you play this on the longer-term basis?

Jason:  I think the point you just highlighted will just— at some point, global pension funds have to invest in China because it will be included more and more in the major indices, be it FTSE, be it MSCI. And we know global pension funds have to track a strategic benchmark. Whether they’re active or passive, they’re just dragged into the benchmark weight. 

So China, no doubt over time, will be 20%, 25% of global benchmarks. And today, it’s under 2%. So a lot of flow is going to come in. And it may make sense for people who can move earlier to get in front of that flow because you’re going to see rising valuation, improved liquidity, improved everything as global flows, particularly institutional and pension flows, come in. 

So how do you then get in front of that flow? I think the big struggle today is, by and large, if you want to buy Chinese exposure. Now access is a lot better because with Stock Connect, you can now access most of the A-shares, and you got dual listing in the A-shares. So really, from a liquidity and access perspective, things look really good today. So it’s less about access of the underlying. It is now really about what are the managers you can go to? 

Now there are a lot of good, well-known managers locally, and by and large, they have a very local style — very local governance, structure, and culture. They sell predominately to retail investors. And so it’s a lot of more balanced-fund oriented structure, a very aggressive market timing. Fees and costs are at the retail level just because they’re just structured for a lot of high-cost servicing and distribution. 

So for more global investors, who have seen ETFs at nine basis points, competitive institutional products with good alpha and good process at 50 basis points, it is difficult for them to look at the local Chinese manager and say, “I can get comfortable with that culture, that governance, and that kind of fee structure.” 

But you also don’t have a lot of good institutions who are operating at institutional-quality money managing practices really providing China as a dedicated exposure. So there is really a very, very large gap from that perspective when we talk about access. It’s really access to quality asset manager who follows best global practices when it comes to money management. 

Jay:  And when you look at China specifically, or I guess greater China, but China specifically, does it make it more challenging on the quantitative side when you’re modeling your portfolios due to the dynamic that you just explained? Due to the fact that there’s a huge retail component of it, and it’s just a different dynamic? There might be less data that you can back-test off of. 

What are some of the challenges that you’ve seen when you’re constructing these portfolios? And then, maybe you can talk about some of the overall challenges that smart beta, as a whole, face and some of the risks that an investor might need to be aware of when they’re investing in smart beta strategies?

Jason:  The big challenge in constructing smart beta or anything quantitative when it comes to Chinese A-shares is, as you indicated, Jay, there aren’t a lot of data there. The Chinese stock market really became a stock market with some liquidity probably in the mid ‘90s. 

But then since then, a number of very key structural breaks. You’ve got the split share reform, where a lot of shares that one traded all of the sudden had liquidity. So the market became very, very dominated by a few SOEs that went through a split share reform. 

And then you have accounting reform, where all of the sudden, people started to adopt this more global standard in terms of what they report, so there’s a lot more transparency. And so fundamental analysis starts to make some sense. And then, of course, afterward, you have the explosion in retail account opening, which then created huge liquidity, but then it’s all noise trading. So structural breaks and data makes it really, really hard to draw statistical inferences.

So for anyone who is empirical in their methodology, quantitative in their methodology, traditional statistics isn’t going to help you very much unless you also have a strong theoretical prior. 

Basically, you have to say, look, I’m not just looking at data blindly and trying to learn everything by looking at data. I have to have a theory about what’s driving this. What’s the mechanism for prices and mistakes in prices?  And so a lot is in starting with good theory about the investor behavior. 

Now, the good thing is Chinese investors aren’t all that different. We like to buy, we just gamble a lot, and we do things that are not very sensical when it comes to investing. But it happens not to be true, so apparently a lot like the Irish when you look at the data. 

So really, when you look at all retail investors, by and large, using the stock market as a way to gamble socially — it’s more socially acceptable way of gambling. It creates community when you talk about stock you’re buying into. It’s really more entertainment than it is investing. You see how the American retail investors. There’s a huge data set that actually studies the Irish. It’s kind of funny. You see the study that looks at Taiwan, Koreans, Japanese behaviors from two decades ago. Retail investors all seem very similar. 

So fortunately, we have really, really solid data behaviors. And once you start with that solid data and research, you can say, okay, well China is different from really a governance, tax, institutions perspective. So how do two interact to then generate predictions about how prices are going to move?

So really, if you’re able to adopt that process, then you are able, again, to make good quantitative predictions. Again, it’s a noisy market, so like you say, you have to adjust for the fact that there are a lot of bubbles that run a long time before fundamental and rationality kicks in, so you’ve got to be prepared for dealing with that. 

But other than that, what you see is the effects of a lot of these quantitative methodologies are just much larger here because there’s just so many more willing losers. And these willing losers tend to have very high savings rates, so they keep coming back to generate even more losses to be alpha for your trades.

Jay:  I laugh when you talk about the Asian — I don’t know if it’s stereotypes — but it’s certainly prevalent in Hong Kong when you hear, just walking down the street, you hear people talking about stocks and the cab drivers giving out stock tips. 

And this goes into what we were talking about about investor psychology as well. Classic example is where, when I talk to people in the industry, and they’re telling me about how their mom’s PA is actually outperforming their funds because their mom is going sort of Peter Lynch, just buy and hold, coffee can type investing versus them being an active manager that’s doing it professionally for a living, and the mom’s performance is beating theirs. Classic. 

So let’s talk about if I’m an institutional investor and I come to Rayliant and I’m looking for a solution for exposure into Asia, do you guys have model portfolios or is it bespoke, tailored to the client’s needs? And how do you go about setting that up?

Jason:  For the largest institutions, and really when I work with large sovereign wealth clients, we tend to go with a more bespoke approach because when you’re large enough, first of all, your needs are just different and your cost structure and the kind of money you put to work, and therefore the capacity you require, are different. So we tend to work in a very collaborative, strategic partnership to bespoke products.

Now for many of the pension funds, that kind of service to them is actually not desired because they’re very busy people. They don’t want to sit down and spend a lot of time helping you understand their needs. Their needs are, in some sense, a bit more cookie-cutter, a bit more similar. So they’re looking for good products that fit the exposure they need. In that case, then we have fairly standard, segregated account services. And again, at size, we’re willing to then create funds. Funds are an easier format for them. 

Jay:  I wonder if there’s potentially a way that some smaller investors or smaller family offices or even high net worth down the line would be able to participate in some of your strategies. You’re just catering to institutions right now. Is that right? 

Jason:  Yes. Up to this point, primarily institutions, sophisticated institutions. But I think what we’re discovering is in Asia, when it comes to family offices, Asia is one of the most affluent places. So family offices in Asia sometimes are perhaps even larger asset owner than some of the institutions. So, we’re definitely broadening out, and I know for these family offices, funds are still the preferred vehicles. So we are definitely exploring and looking into creating cost-effective funds. 

So for us, the biggest thing is, how we can create a vehicle that is cost effective? And unless we can get to a certain size where the fund can be cost effective for the client, we certainly wouldn’t want to create a structure that’s going to have a lot of slippage and cost embedded. And then that’s going to hurt client outcome.

Jay:  I think there’s an interesting… The Asian family office is an interesting topic because it has such as short history. When you talk about family offices, people usually think about the Rockefellers or the Kennedys. Because of the rapid wealth accumulation that we’ve witnessed here in Asia over the last decade or two, all of the sudden, there’s a lot of these family offices. But again, it’s like how you were talking about the managers in China. All of the sudden, they’re sitting on a large amount of money. They don’t know what to do with it. The first instinct is “I’m going to put the money to work. Oh, I think I can figure this out myself. I’m in Asia.” Then they fall prey to the retail mentality and maybe they lose a little bit of money. 

And then so they take the next step, which is “Okay, I don’t know what I’m doing. Let me go to one of the big guys that I can trust, and I’ll put my money with them.”

But again, most of those guys are going to be Western-based institutions. So I think there’s a huge opportunity for you, Jason, because I think, finally, they ‘re going to come around and be like “Okay, those guys actually don’t know what they’re doing, either. Let’s find a manager that is on the ground here, one of us. Someone that I can trust, speaks the language, looks like me, and give him my money.” 

So I think it’s going to be very interesting. Like you say, there’s going to be— there’s a huge opportunity because there is a lot of this family offices popping up now in Asia, which could be quite interesting.

So on a broad strokes level for investors, what’s your five-to-ten-year outlook on the region? For again, this feeds into the retail mind— it seems like, especially where we’re sitting in the markets, given the valuations right now, across the board, it’s hard to not tune out the macro news flow that always tends to plague investor psychology.  

Same thing with China. You hear about China, and are we in a banking crisis? Is there debt issues? Is there currency issues? On a whole, I think, my view is that China will be okay. They certainly are going through some growing pains. What’s your view five, ten years out from here?

Jason:  My view is when you’re looking at China, when you look at the region, you gotta first and foremost be a buy-and-hold investor. There’s going to be cycles. There’s going to be booms and busts, like every other market. 

As long as you believe this is an economy that will continue to grow, that it’ll catch up to the US, it’s per capita GDP will continue to grow from where it is today — which is about 6,000, 8,000 per capita — and converging, I would say, rapidly to the rest of Asia, and then converging to US. As long as you believe in that growth story, buying and holding on to it is going to do awfully well. 

And then, if you like to do some more, then there’s market timing. And that just means when you’re at the top of a greed cycle where, like you say, the cab drivers are all stock traders rather than cab drivers, then you peel off a little bit. And then when everyone’s terrified and no one’s talking about stocks, you leg in a little bit. And then that’s going to add some value. 

And I would say, like you say, ignore the macro because a lot of that is noise. All you have to believe in is China, with its current policy, with its culture, with its government’s commitment to growth and stability — if you believe enough of that will drive a steady GDP growth… It doesn’t have to be 8%. It doesn’t have to be 6%. We know even at 4% growth— look at the amazing stock market responses that we get in the US when it’s just 4%, 3%. If you believe in that growth — it doesn’t have to be this year or next year, just on average — if you believe that’s going to happen, then holding on to the China beta is going to be a pretty darned good trade. And then you can do a little bit more on top of that. 

Jay:  Yeah, that’s funny. It’s funny how investor appetite has just gotten so used that high, single-digit GDP growth. And it’s like anywhere else in the world, you’re doing cartwheels, like you say, and in the US…

So thanks for the advice on China. Are there any sort of themes, sectors, that really excite you at the moment in China, that maybe investors should take a second look at?

Jason:  Definitely. So I think the one that— it’s a theme that comes back regularly in China, but I think they generally get it at the wrong time. But the theme is state-owned enterprise reform, so SOE reform. And one of the greatest telltale sign of SOE reform starting to really pay dividend— because prior to that, it’s always going to be tightening. 

Things are going to look bad because as you are going through these reforms, you’re cutting out corruption. You’re cutting out waste. So a lot of the government-based spending will go away temporarily. It’s going to cool off the entire economy. The state-owned enterprises are going to look scary because you’re hearing news of the chairman being arrested. [inaudible] was running off and disappearing. Going through the scariest time. 

But then you know what’s then going to replace that is people who perhaps brought in from private sector — people who’ve demonstrated civil servant success as people of high integrity — are then put into place. And everyone else goes “Alright. The ship’s been righted. We are supposed to do the right thing because the consequence of doing the wrong thing is very, very bad.” 

And, often times, by this time, the market is so disappointed with the SOEs, valuations are cheap. Everyone hates them but everyone says I want a portfolio that’s ex-SOE. [Inaudible]  perfect place, right? And then the new guys that are put in — now, I think one of the things that’s most notable, and people haven’t paid enough attention to it, is now the Chinese government says “SOEs, we want you to operate a little more like private enterprise. So we’re going to give you the right to issue so that performance based compensation, stock options.” 

And now all of the sudden, you’re going to drive a lot of alignments. Instead of, “Oh, you know, this is a dead-end government job with a lot of security, so why do I need to benefit myself by excessive amount of wining and dining?” Now they say “No, no, don’t waste money. I have stocks. I want to the stock price to go up.” 

And that incentive alignment is so, so powerful. And so, I’m guessing we’re probably about the cusp of another round of major, I would say, price collection and insolvent dividends from the SOE reform work that’s been done to this point. So I guess I’m going to bet on the SOE reform theme.

Jay:  That’s awesome. Thanks for sharing that advice. It’s definitely something that should be on every investor’s radar. I’m hopeful for China. I’m certain they’ll figure it out. 

Well, Jason, thank you so much for sharing your insights. I think it was a very interesting and meaningful discussion we had. What sort of exciting things are you working on, either personally or at Rayliant, that you want to share with the audience?

Jason:  So I think the most exciting thing that we’re working on is we’re now looking at pledge shares. So it’s been in the news a lot, right? You look at Leshi [Le.com]. I call it HappyTV. I know that’s a horrible translation, but it works for people who can’t read Chinese. Basically, what toppled it, and really the straw that broke the camel’s back, is just the pledge shares that the chairman’s put on the stock. It’s cost distress selling, and of course, that’s what’s really outed the fact that it may have been actually a Ponzi scheme.

You see the market is really now beating up on firms that have a lot of pledge shares. People are just afraid. Is there something unsavory going on? So we’re able to actually go out and gather data — for companies in Taiwan, companies in Hong Kong, companies in China — and say, is conventional wisdom correct in this case? And I would say our initial research, by looking at a lot of data, is actually generally, companies have pledge shares, they do pretty well. 

So in some cases, what you see in the press is the extreme negative outliers and people overreact and actually make the wrong decisions. And often times, the data speaks a different story. So what we’ve found so far is that pledge shares is actually a pretty good signal. It’s about insiders saying I really believe in this company. I’m going to bet my fortune on it. And it’s about banks telling you this company is actually worth the kind of money I’m lending to it, that’s why I’m taking shares as collateral. It’s a really positive signal.  

Jay:  That’s very interesting, and it’s timely because we might even be able to take advantage of some of the dislocation that comes from the news. So there’s two good themes for us to look at, thanks to you. Thank you for that. 

Again, thanks so much for your time. I really appreciate it, and I think the audience is going to really enjoy what you have to say. What’s the best place that our audience members can find you, follow you, connect with you, maybe learn a little bit more about Rayliant?

Jason:  We are finally going to get connected with the 21st century and have more of a social presence. But for now, please do connect me at my email, and then I’ll link you to my LinkedIn account to follow my research. My email address is just my last name, Hsu, at rayliant.com. So that’s R-A-Y-L-I-A-N-T dot-com. 

Jay:  Excellent. Thanks so much. And again, we really appreciate your time and your insights.

Jason:  Thanks, Jay.

Jay:  All right. Take care.

Jason:  Thank you. Bye-bye.