Speaker 1 (00:03):
This episode of Energy Sense is brought to you by S&P Global's Financial and Capital Markets Energy Advisory Group. Our team of experts provides the investment community with actionable insight and integrated thought leadership that identify the trends and trend makers of global energy markets. Solutions cover the full energy and natural resources sector, from traditional fossil fuels to emerging clean tech ideas and supply chains, and are available via recurring reports, webinars, robust data sets, and personal engagements with experts.

Hill Vaden (00:32):
All right. Welcome back to Energy Sense. It's an S&P Global Market podcast focused on the intersection of finance and energy markets. This is Hill Vaden here with Breanne Dougherty. How are you, Breanne?

Breanne Dougherty (00:44):
I'm good, Hill. How are you?

Hill Vaden (00:45):
I'm doing all right. And today we're going to talk about the emergence of retail stock pickers and energy stocks over the back of the COVID market crash and resurgence. I think the S&P 500 may have hit a record again yesterday, or one day this week. And we've got with us Karim Fawaz, who has been here at least once before. Karim, how are you?

Karim Fawaz (01:14):
Hey, I'm good. How are you guys?

Hill Vaden (01:17):
Doing all right. And Mike Schpero and his colleague Brian Manalas, Manalas. Sorry. Manalastas. Did I get that right?

Brian Manalastas (01:27):
Manalastas is close. Third time's the charm.

Hill Vaden (01:29):
I'm tripping over myself. And I have it right in front of me.

Breanne Dougherty (01:32):
Brian M.

Brian Manalastas (01:32):
Brian M. Yeah, call me Brian. Thanks for having us, guys. I appreciate it.

Hill Vaden (01:36):
Yeah. And you guys, so just to let the listening world know, but there's a happy hour, a digital happy hour coming up after this that you guys are hosting and have to get to. And I think that's a decent place to start, Breanne, that I think the obvious question here is what's the difference in a virtual happy hour and just drinking at home by yourself?

Breanne Dougherty (02:01):
Really, not much other than feeling better about it, I guess? Or not being as judged. I guess that's the big takeaway. I'm not as judged when I engage in work-related virtual happy hours as I would be if I was just sitting in a corner by myself with a bottle of wine.

Hill Vaden (02:18):
It seems somehow more appropriate. But Mike, you've said you've done these a handful of times. And the question... Breanne and I were talking about this yesterday. That there seems to be, as we've all been moved into working remote and Microsoft Teams, there are those who are quite comfortable with the camera on, those who would rather the camera off, and those who have those fake backgrounds. To do the happy hours, is there a dress code to this? Does one need the camera on?

Michael Schpero (02:49):
Excellent question. And camera on was the first rule of the happy hour.

Hill Vaden (02:54):
First rule of the happy hour.

Michael Schpero (02:55):
Yeah. So we didn't necessarily make a "you must have a real drink in your hand" as a rule. It's kind of optional. But the camera was not optional. That has to happen.

Hill Vaden (03:05):
And can you be anywhere? So a friend was telling me that she's a camera off person on Teams. And the reason for that is she works in her bedroom and she says she's been very uncomfortable with the idea of inviting all of her coworkers into her bedroom. So are people showing up to the happy hour from any and every room? As long as the camera's on, does anything go?

Michael Schpero (03:29):
They could be anywhere. One of our colleagues shows up from his back porch with his dog in his lap and a beer in his hand. Someone else ends up at a lake house half the time. She's not even on our team anymore.

Breanne Dougherty (03:44):
She just shows up.

Michael Schpero (03:46):
The guy I co-manage the team with showed up in a Gumby suit one day. Anything can happen, really.

Hill Vaden (03:52):
Oh, man. That's an episode in itself. We'll [crosstalk 00:00:03:55].

Michael Schpero (03:55):
That was. That was fun.

Hill Vaden (03:59):
All right. Well, all of this is in a weird way more normal, and I think it's related to what we're talking about today with energy... Well, stock picking in general, from stay at home people, that there was this great timing from the perspective of some where Robin Hood and others amounts $0 commission, that they make margin lending easier. And then COVID happens, the market crashes, everybody gets sent home, some lose their jobs, some get a stimulus, and people start picking stocks in ways not wholly dissimilar to the way they pull levers at the slot machines. It's led to stardom for at least one person on Twitter, Dave Portnoy, has gone from a online gambling persona to interviewing the President of United States.

Hill Vaden (04:51):
So it has totally changed things and energy has gotten... Brian, I think you've done a lot of the work on this. Energy seems to have gotten a lot of attention as a lot of these retailers are picking some of the really beaten up stocks. And you've published recently on this. Can you talk a little bit about what your papers have discovered?

Brian Manalastas (05:10):
Yeah, sure. So as you rightfully mentioned, retail investors have been receiving a ton of media attention really for driving trade activity over the last couple of months. And we really wanted to know just how much of an influence this so-called retail trading Renaissance has had across the markets and particularly across our energy clients. So we looked at trends in overall retail ownership and capital flows across, call it a sample size of about 60 issuers. And as you mentioned, really since the brokerage industry slashed fees back in September, 2019, effectively making the equity markets more accessible. And perhaps to no surprise we found that investors disproportionately targeted these beaten down sectors like oil and gas, airlines and hospitality, as well as headline heavy sectors like healthcare, with all the news on vaccines and whatnot. So our data suggests that there is a strong preference to trade and own lower priced stocks. $1.50 per share seem to be the sweet spot in energy.

Hill Vaden (06:23):
And that's regardless... So fractional shares has been another innovation, but people will prefer to buy a full share for $1.50 rather than $1.50 of the more expensive company?

Brian Manalastas (06:35):
Yeah. That's what it does appear to be. Yeah. Yeah. Yeah. And so most of these small cap issuers witnessed really almost a twofold increase in overall retail ownership. It was already high to begin with, averaging at around, call it 16% of float growing to essentially over 30% of float and even higher in some cases. So the story is pretty much similar, but less pronounced for your mid and large cap guys, but really the same trend for the most part.

Brian Manalastas (07:11):
So, yeah. I thought it was also pretty interesting that we saw these retail investors were pretty sensitive towards market moving news, like the price war between Saudi Arabia and Russia, if you guys recall back in March, where we saw total retail ownership in many cases essentially doubling within a week's time. So it's truly a new market phenomena, and it's pretty clear that the cohort in a lot of cases have been the marginal investor. A time like this, then as we continue to see institutional capital essentially leave the space. So that's the bulk of kind of what we were able to take away here.

Hill Vaden (07:51):
All right. And so all this is happening, Karim, I know you do a lot of work one, on the oil markets, but two, working directly with more of the institutional buyers. I'm not sure that we're working with a whole lot with the retail buyers and sellers at the moment. But can you frame a little bit of the context from more of the macro and more of institutional side that this is happening?

Karim Fawaz (08:11):
Sure. It's sitting on the commodity side, we're kind of... On the commodity where we're a bit more familiar with retail investor sentiment kind of playing into the market. Over the past few years, I mean like clockwork, usually as the price of oil crashes, you see this onslaught of retail money come in, just because the lure of higher oil prices is so tempting. We had it in 2008, 2009 during the crisis, then the crash when oil prices went from 140 to 40, you start to have a lot of money come back in saying even if it comes back to 80 or something, it's still a very good investment. So you saw it during the financial crisis, you saw it in 2014 and 15, when the prices crashed and you saw it again this year in the second quarter, after the price war, when all the prices went into the teens and at some point negative, you had this massive influx of retail capital on the commodity side. And typically on the commodity side, it's through ETFs and in some cases even more dangerous leveraged ETFs, 2X, 3X, long Brent or WTI ETF.

Karim Fawaz (09:16):
So retail has been a player on the commodity side for quite a while, but I think what's happened this time around is a much more visible kind of intervention on the equity side and into the companies and the sectors, which I think is quite interesting. And I think what Brian was talking about has some big implications in the sense that a lot of these companies coming into the second quarter were already battered or in bad financial shape. And suddenly you had a lot of capital kind of come into them at a time where... And some of them were almost bankrupt if not already on the road to bankruptcy.

Karim Fawaz (09:50):
So it's going to start to distort the signals from the market to these companies, which has added a lot of volatility on the equity side, within the sector. Just to kind of bring it back to the market I think the conditions that let all the capital in were kind of self-reinforcing. You had low oil prices, extremely low prices, and if you look at it at a price chart for any of these kind of small ENP stocks in the US in particular, all of them are down 70, 80, 90% from two, three years ago. So you had the combination of oil the prices are low, these things are trading at minuscule multiples or ratios. I mean, what's the worst that could happen?

Karim Fawaz (10:30):
Well, so far, I mean, some bad things have happened since then. I mean, just [inaudible 00:10:35] filed for bankruptcy. Other companies have had kind of filed for bankruptcy since then. So I think-

Hill Vaden (10:40):
[crosstalk 00:10:39], right? I mean, from a retailer perspective, some of the bankrupt companies, at least in short term pup, even outside of energy.

Karim Fawaz (10:50):
That's why I'm curious about what the third quarter is going to show. And that's where I want to see whether that trend we saw in the second quarter did calm down to some extent, as you started to see some kind of under-performance for some of these talks, as opposed to tech or other sectors. A lot of the energy markets still is under a lot of pressure. Oil prices have stabilized at a relatively low level. So it'll be interesting to see how in that post initial euphoria things check out.

Breanne Dougherty (11:22):
Well, what about is... I mean, are they just buyers? Historically, when do they back back out? Or is it something that once they're in, they're just going to wait until... I mean, they'll hold on to whatever they've picked up, unless the price goes below what they picked it up as. I mean, to me, that seems like a psychological thing, that you might keep hoping that it goes up until you start seeing red on your screen relative to what you bought in at. So are these guys potentially just going to hold on this forever or do we think that they're fickle and they're going to be moving in and out?

Karim Fawaz (11:52):
I mean, it's a good question. On the commodity side, from our experience having seen that play out for a longer period of time, typically they start to peel away as prices move up above certain thresholds. So if you're getting in at $35 oil, once you get up into a range that's closer to, say, the five year range, which is around 55, $60 a barrel here. Once you got into that new normal, a lot of that kind of tourist capital, the way we think about it, will start to peel away. Some will stay, but for the most part, as you get... It gets harder to keep retail capital in once you get to that upper echelon where you need to make actively call on fundamentals improving, or that you believe that oil prices are going to go back to $100 a barrel, which that's kind of faded a bit from the market psychology over the past six, seven years. [crosstalk 00:00:12:42].

Hill Vaden (12:44):
Yeah, Brian is that your expectation on equity?

Brian Manalastas (12:46):
Yeah. You know, actually, that's a good question. On the equity side, we've seen overall ownership move about actually 10 to 15% lower from essentially what we think is an all time high around mid-June. So really a decrease from June into July and even into August. I mean, I think it's normalizing around August, but from a total ownership perspective. And by that we look at total shares held in inventory across these retail platform custodians, so that total share cut has actually been on a descent here.

Hill Vaden (13:24):
For energy or across all?

Brian Manalastas (13:27):
This is for energy in particular.

Hill Vaden (13:29):
Okay.

Breanne Dougherty (13:29):
So we don't know that they moved maybe onto a different space or if they've just pulled the money completely. Okay.

Brian Manalastas (13:36):
Correct. Yeah. Yeah. I'd be curious to see where that-

Breanne Dougherty (13:39):
Yeah, because I wonder if they just keep searching, if the idea is they just keep searching for the next beaten up segment, whatever is not performing. I mean, I have to say, I am myself one of these people that we're probably talking about, that I'm not going to lie.

Brian Manalastas (13:53):
Hell yeah. Same. Same here.

Breanne Dougherty (13:54):
Things started selling off and I was like, "Sure, I've got no idea what this company does, but it's at its 52 week low, and it's a dollar. Why not?" This all sounds very logical to me that really has nowhere to go but up. Or at least I'm willing to take a chance on that. And to be honest, those ones that I did pick, well, yeah, it's pretty easy for them to start doubling and tripling when you're down in those type of low price ranges.

Breanne Dougherty (14:20):
So I get it. I get how this happens. And when I was reading the work that you guys had put together, I had to admit that, unfortunately, you were talking about me [crosstalk 00:14:32] jumping onto it. I'd like to pretend I'm more sophisticated, but often obviously I'm not. And so when we think about energy, and Karim you mentioned it, how much... Is this changing the way the... Okay, so these small caps, for instance, which we know it was a bigger factor for small caps as opposed to large caps and mid caps even. Is it changing the way that the investor communications, what they're saying out there to the street? Is it that they need to be putting out greater soundbites? It sounds as though a lot of this was soundbite driven. Have we seen a switch in the communication style of these companies, knowing that they might be able to attract these retail investors? Or maybe they don't want to attract them, I don't know. What have we seen on that side?

Michael Schpero (15:14):
It's Mike speaking. So we do speak with a lot of investor relations officers from different sub sectors, and they're not necessarily putting out new messaging. If anything, they're being careful to stick to the company line because they're getting a ton more inbound inquiries, questions. They're getting inundated. They're signing executives, people from the legal departments, they're sharing the load in dealing with these retail questions that have been coming in.

Michael Schpero (15:48):
And they're very leery of saying too much because these types of investors tend to retweet things and they have to be very careful so that if anything, they're getting a little more careful. I mean, obviously there's regulations, so they're always careful, but they're definitely sort of ratcheting down and making sure they're not saying anything that they shouldn't be saying.

Hill Vaden (16:13):
Has it changed any of their... I mean, I'm sure that these investor relations teams, that there's a cadence and an expectation of how to deal with a group of sophisticated asset managers.

Michael Schpero (16:25):
All right, so...

Hill Vaden (16:28):
Has anything changed?

Michael Schpero (16:29):
Yes, there's a big exchange here. So as one IRO said, typically they speak to an investor two to 10 times per year, not weekly. So they're getting calls all the time by the same people.

Hill Vaden (16:45):
And so they're getting calls from the retailers to the investor relations number-

Michael Schpero (16:50):
Yes.

Hill Vaden (16:50):
Well, so it's more than just stock picking. It's stock picking and-

Breanne Dougherty (16:54):
And following up. I'm surprised by this. This really surprises me.

Michael Schpero (16:58):
Right. Us too, but it's really going on. And this and one of the IROs actually mentioned that he actually enjoys the calls from a retail investor because they're just like, "Hey, how do you make money?" I tell them, they're like, "Cool, sounds good to me," And they move on. They don't get grilled and raked over the coals over all the minutia that goes on. They just want to basically understand that it makes sense to them, the stocks beaten down, and off they go.

Michael Schpero (17:29):
But, not all the conversations are that easy. I mean, in some instances, these retail investors are piled into stocks that did not work. And they mentioned that they're talking to people that are in tears. So it really runs the gamut of the tone of these conversations, depending on how things went.

Hill Vaden (17:48):
You know, I was thinking of a difference. Karim, you were talking about people piling into commodities and the USO went negative for a little while in April. And I guess equities aren't going to go negative, but there's a lot of margin lending on these platforms. So I guess the same risk is there if one is essentially playing with money that he or she doesn't have.

Michael Schpero (18:13):
Certainly the case. And I don't want to refer to them as dumb money anymore because we did some analysis and it looks like they did pretty well as a whole, the group seems to have made money. And as Brian had just mentioned, they're paring back after having seen some pretty good run ups in energy companies. So they've done pretty well as a whole, but it doesn't mean there aren't individuals out there that didn't borrow money, overload into one stock that was low, and just basically lost it all. Because there have been bankruptcies in the space, things have gone wrong. Really wrong.

Hill Vaden (18:50):
Karim, from your side, have you noticed at all if retail has always been a presence in commodities, has that presence lightened as retail has increased its focused on equities?

Karim Fawaz (19:02):
It hasn't, really. I mean, what we had in the second quarter here was the biggest run-up of retail capital coming into the futures markets for crude that we ever seen. I mean, even much larger than we had in 2015, 2016, much larger than we had in 2008, 2009. And I mean, to such an extent that the USO and some of these large ETFs became so large that a lot of scrutiny and regulatory pressure forced them into shifting their holdings away from strictly holding front month contracts, which was the way the USO historically worked, and towards owning a spread across multiple contracts along the curve, just to diffuse some of the effect that the ETFs could have on price formation and spot month pricing.

Karim Fawaz (19:45):
So I think it's been more than ever. The other interesting thing is similar to the risks you talk about on margin on the equity side, on the futures side and on commodities, I think there was a bit of a misunderstanding about the risks involved with severely imbalanced markets, where you do have a massive contango in the front month and the kind of forward curve, which means that these ETFs every month need to spend a huge amount of money to roll over their contracts from the front month contract to the second month contract, incurring a loss across the entire holder base.

Karim Fawaz (20:18):
So I think that was another dimension of the ETFs that wasn't kind of well understood, versus the intuitive, okay, oil prices are at $20 today. I know that they're not going to be at $20 forever. Let me just come and sit. What turned out to be is a lot more volatile than that. So I think that's been one of the other issues here.

Breanne Dougherty (20:40):
And so that volatility, that is obviously something that sort of comes hand in hand with the increase in retail investors. So from a commodity perspective, as you said, this is something that the commodity market's kind of gotten used to, at least here in the US and maybe knows how to manage it or read it a little bit better. But on the equity side, I mean, that could be quite dangerous, couldn't it? You know, when we start thinking about as these different companies and these equities start to recover, if we've got these sort of movements in retail investors, is it going to make everything a little bit choppier, basically, is what I'm getting to, as we kind of go through this recovery mode?

Michael Schpero (21:20):
Definitely. I mean, one specific company that had fallen below a dollar that we cover and we see flows, the stock was running between 90 cents and 30 cents up and down and we're looking at retail flows moving in and out. And it would have been impossible to get that right, and you're talking about a significant loss if you don't get it right on a percentage basis. So yeah.

Hill Vaden (21:49):
And there's an attraction to that. I think Brian, if I remember your report, that it's the high beta stocks that they're seeing the most money come into them. Is that right?

Brian Manalastas (22:01):
That is correct. Yeah. You know, actually what was interesting is not all issuers saw... I'm going to play off that a little bit, but not all issuers saw an increase in retail ownership. Actually relative outperformers from a total return perspective, which we by our data had at most a negative 20% or better, actually saw decrease in retail ownership. Obviously those guys were mostly the integrators, the large cap midstream issuers. So to your point, yeah, that's correct. The higher beta names, the worst performers attracted a lot more of the retail guys.

Breanne Dougherty (22:40):
Again, because they're at the lower threshold, like us, right? They're talking about dollars as opposed to tens of dollars or hundreds of dollars in some cases, I guess.

Brian Manalastas (22:49):
Yeah. That's right.

Hill Vaden (22:50):
Energy, with all that went on in energy at the beginning of the year, I mean, does this seem to be a new normal or just because energy was so beaten up that energy is maybe getting a little bit more play right now from the retail segment than we expect to see maybe as soon as the end of this year, as things become more stabilized. Or do you see this continuing? Brian or Michael, any idea?

Brian Manalastas (23:17):
Mike, you want to take that? It's a good question.

Michael Schpero (23:21):
I think it's somewhere in between. I don't think this is going away, but those unique price dislocation opportunities probably they won't be as rampant now that there's been a recovery in share prices since the COVID related sell off. But they're there. The accounts are growing and they're probably hunting for it. These situations don't go away that fast.

Michael Schpero (23:49):
You know, we see a rise at DraftKings every week. I mean, these types of situations, online gambling and whatnot. I'm not saying it's that, but I'm just saying that they got a taste for it, they've done pretty well, and I assume they're still going to be looking for new opportunities.

Michael Schpero (24:06):
One thing that came up in one of our conversations that could really put a halt to this would be if there was a rise in interest rates. [crosstalk 00:24:14] sort of changed the landscape and potentially put novice investors, and I use that word carefully because these people have been pretty smart on the whole, but they might be dealing with a situation that they're not familiar with and that could sort of put a damper on things.

Breanne Dougherty (24:33):
And I think what's interesting as well to think about is, well, two things. One, I think that we all agree here that the retail investor is probably sector agnostic, right? It's not necessarily that they're energy lovers, it's that they really look for opportunistic type of positioning. Right? So I guess whether they stick an energy sort of depends on if energy starts stabilizing, then they're probably not going to stick around in energy, whereas if it stays volatile, it might be a sector that continues to draw attention.

Breanne Dougherty (25:03):
But also, I mean, behavior shift wise, let's be honest. As we were talking about at the first part of the call here, we're all sitting at home. So it kind of makes it easier to do that type of stuff right now. If everybody's having to get back to the office or in some cases back to work that doesn't have you sitting in front of a computer all the time, are we just going to see a downward trend in activity off of people getting back to work? Or maybe you're now you're rightfully addicted. Let's be honest, it can be a little bit addictive, just like any other platform, that you're going to keep it up while you're walking around with your phone because you can carry it on your mobile device. I don't know. These are all...

Michael Schpero (25:42):
Yeah, those are great points and questions. I would think if the world got back to normal and people returned to the office, that would slow things down. But if we get another stimulus check, that could-

Breanne Dougherty (25:53):
Yeah, I guess.

Michael Schpero (25:55):
Round two, you know?

Hill Vaden (25:56):
As long as you made enough money in the first round then you don't have to go back to an office.

Breanne Dougherty (26:06):
I guess [crosstalk 00:26:04]. You've just decided to sort of become the retired poker player. I mean, that was always the thing. You'd hear these guys that do well on the poker circuit for a couple of years and then all of a sudden they become a professional gambler. You know, maybe we have a lot of people sort of shifting focus and this is where they want to make their money. And you know, of course, until they get burned, I guess, is always how it plays out.

Michael Schpero (26:27):
Maybe it's a speculative bubble. I mean, maybe it's not different than the bubble bursting on the dot com days and the retail goes away again. I don't know.

Hill Vaden (26:34):
Well, so one of the things in your report, Brian, was saying that the cohort, it doesn't appear to be big enough to really be having that much of an impact on some of the pricing of equities. So it sounds like if there is any sort of bubble thing, it's maybe a part of a bigger thing, but it's not the retailers that are driving this, what we see.

Brian Manalastas (26:57):
That's right. Yeah. So from a broader market perspective, I think we saw the increase in retail trading activity move in proportion to overall market volume. So it kind of range bound between three and 5% by, by our calculations. I mean, obviously there's a lot of different ways to calculate that. But three and 5% is still relatively small.

Hill Vaden (27:22):
And you put more buyers than sellers, which I guess some of that is intuitive. If you're new to the market, you got nothing to sell.

Brian Manalastas (27:30):
Yeah, right, right.

Hill Vaden (27:32):
But that has been kind of the... Which I guess, Karim, thinking about the overall environment for energy, it has been an out of favor sector. I mean, Mike, you and some colleagues and I worked on this last year. Energy, particularly oil and gas, has been out of favor, so it's been hard to find a buyer.

Brian Manalastas (27:53):
Yeah.

Michael Schpero (27:53):
Yeah. I mean, for a long time... I've seen over the last few quarters, it's been the hedge funds that have stepped in in a bigger way, but a lot of hedge funds have left the space. Either they've closed, they're not touching energy. We've heard about a lot of energy pods being closed. So there's not nearly the amount of hedge funds in these stocks as there were even three to six months ago.

Michael Schpero (28:20):
So the long onlys have left. They've been leaving as energy is becoming a smaller and smaller part of the S&P 500, as we all know. ETFs passes up, but a lot of that has retail behind it. But then there's these individual retail accounts that are just growing and they're filling this void. So is this a new norm? That question is very hard to answer. It kind of jumps back to that a little bit. But that's where the flows are in energy these days.

Karim Fawaz (28:53):
Yeah. I mean, , that's the ultimate irony of this whole kind of stock-picking, and that a lot of these new investors landed in energy, which is a space for the past three years that's been very tough for anyone who's been in there. So suddenly they see all this external capital coming in speculatively trying to make the most of a cyclical industry, which hasn't been particularly kind on anyone who's been in there. So. [crosstalk 00:29:20].

Michael Schpero (29:19):
I think they've done well.

Karim Fawaz (29:23):
In the short term, to some extent.

Michael Schpero (29:24):
In the short term.

Karim Fawaz (29:25):
I mean, that's where we get back to the debate, which is how long can this last? And that's the part which is, the longer they stay in this market, the more they're going to fall out of of love for some of your, some of these names.

Hill Vaden (29:43):
And so if the retailers or the buyers, when, it's out of favor, when the retailers want to get out, is there a new round of retailers that comes in to be the buyer? Or [crosstalk 00:29:54] Yeah.

Michael Schpero (29:58):
Who knows? Maybe they're going to have a tough time at accounting time when they find out what a wash sale is, or... I mean, there's tons of retail investors loading into MLPs. And maybe they don't even understand what that means from tax time implications. There's a lot of unknown here. Because the volume's jumped up. So what if they're churning when they find out that, no, you didn't lock in all those small gains. It's one big trade when you're moving in and out like that.

Michael Schpero (30:29):
These questions just runs through my head all the time, like I wonder if they fully understand what it is that's going on. And they seem to understand pretty well. I'm not disparaging anybody because the stocks are going up that they're in for the most part. But the nuances of making money trading like this is very difficult.

Breanne Dougherty (30:50):
So we said that we've seen a pullback from the peaks of June. Does anybody want to start sort of making some speculative of ideas about when we actually see bigger changes in this type of behavior? I mean, are we talking that we think they're going to stick around in more stabilized oil price world for three months? Or do we think that year end, for instance, is an indicator for them? What kind of... Are there signposts that we think might be out there for what might trigger these retail investors to start exiting some of their energy positions?

Brian Manalastas (31:24):
Mike, I'll take a stab at that. I'm waiting to see what the next conversations around the next round of stimulus will be, really. So that's kind of what I'm keeping my eye on.

Breanne Dougherty (31:38):
Yeah.

Hill Vaden (31:39):
Yeah.

Karim Fawaz (31:39):
I think that the commodity price is going to be big here. I mean, I think if you lose the stability of the oil price and you come back down, I think it's going to be very quick to get out because they've seen that movie before and it's ugly. So get out as quick as you can. I think if oil prices do move up and you start to see that recovery forming and that narrative around how COVID has passed and everything is looking better, I think that could kind of keep capital just lingering here a bit longer, but it's going to be very responsive to that. I think that's where... And the meantime, as long as you're within a small band, I think you'll continue to lose some just because it's not going anywhere while the rest of the market is still going up. So it's an opportunity cost too. Just put it in, whatever, Tesla and you would have been up 600% by now.

Breanne Dougherty (32:35):
Karim, that's a whole 'nother podcast.

Karim Fawaz (32:37):
Exactly.

Hill Vaden (32:37):
Well, you mentioned you've seen that movie before and immediately Trading Places comes to mind, which ended so very well for the two retail investors, I guess, [crosstalk 00:32:51] one of them there. I don't know if there's a Randolph and Mortimer Dukes out there kind of watching all of this and shivering. But it's nice that the retailers have had a good run of it and it's nice for energy that we've got some buyers in this space, given all the negative news around the sector.

Karim Fawaz (33:15):
A lot of optimism on the retail side.

Hill Vaden (33:16):
Yes. Well, thank you. Thank you all. I think this has been a very interesting podcast and a whole interesting new data set and new everything for us to look at in these days of COVID. And here we are working from home altogether in our podcasts. And I guess you guys are getting ready for your cameras on happy hour. Hopefully Gumby will show up.

Breanne Dougherty (33:45):
Yeah, I was going to say I hope Gumby makes an appearance.

Hill Vaden (33:50):
So, all right. Well we will sign off and look forward to doing this again soon.

Michael Schpero (33:55):
Thanks for having us, guys.

Brian Manalastas (33:57):
Thanks for having us.