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Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching.

Michael Batnik and Ben Carlson work for Ritholds Wealth Management. All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions and do not reflect the opinion of Ritholds Wealth Management.

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So February 2018 is an underrated day. I think it was February 6th maybe I was looking it up. That was an underrated day in finance, Twitter history. That was the day that XIV went under, which is very bizarre because it was like a 10 to 12, maybe 15% correction at the most.

And this strategy that had just been going gangbusters because there was no vote, especially remember 2017 I think the S&P was up 30 plus percent and the biggest drawdown was maybe 3 to 5%.

It was like the least volatile year in a long time.

You know what's annoying? That you can't find like historical tickers that like go cabloey. You can't find a chart of XIV. You can find it if you Google search images.

This goes away. What would be neat to just type into any of the services like a chart of Lehman or Enron?

Yes, you know, if you would have put $10,000 in Enron in blah blah blah.

Anyway, so why are we talking about XIV today in the show? We have Paul Kim on for his third time to talk about ETFs from Simplify.

And what was XIV? XIV was a strategy where you were selling volatility, which I said to Paul is like picking up pennies in front of a stimulus. That's what people say selling vol is. It's the what I'll make your trade.

So his whole thing with this new strategy that we're going to talk about today called as fall is taking what XIV did right, which was yes.

You do want to over the long term sell volatility because that makes sense most of the time the market is not all that volatile.

Most of the time it's fairly calm, but also not take as much exposure as XIV did and hedge out the tails when the markets invariably blow up because they always do.

It's an interesting strategy. We learned new terms today. Yes, we've heard about the carry trade before we've never heard of the anti carry, which I think anti carry could be a very good villain on an Avengers movie.

What do you think?

Anyway, every time we talk to Paul, I feel like I learned something and they are doing we talked a little bit before we started and we said, are you creating products that hedge funds would have created the past.

This is probably a strategy that some hedge funds do, but most of the stuff they're doing is also using beta, but also adding some overlays.

It's very interesting the stuff that they're doing and I think this is really cool of a lot of the niche and thematic ETF players is they are trying.

Different stuff and they are giving investor stuff that they never would have had access to before in a low cost tax efficient wrapper.

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