What's poppin' boys and girls, ladies and gents? Welcome back to another episode of Kicking Their Bass TV. If you guys are new to the channel, hit that subscribe button. Hit the notification bell. Also hit the like button if you guys have been enjoying the content. Today, we got a frog fishing video for you guys. I know how much you guys love frog fishing. It has to be probably my favorite way to catch bass. If you guys asked me like, Noah, what would you like to do today if you could just catch some fish and throw one bait? It would have to be a frog.  Throwin' that thing on braid, throwin' it in thick grass and just catching some big bass on it. It's just all on out a good time. Got my man's Cody with us today. What's good dog? What's good dog? We got all our tackle here in the back. We have a trap house. We have a jig box. We just filmed a jig video. If you guys wanna go check that out, you can go check it out down below. And then we have our frog box with all our frogs, which I'll show you guys here in a moment. And we have our frog rod. We're gonna be throwin' this frog on a Mach 2 combo. Mach 2 reel and Mach 2 rod tied up here on braid. We're gonna be good to go from there. If you guys could drop some video ideas down below like what do you guys wanna see and start liking each other's comments because at the end of the day, somebody can drop a comment on a video that they would like to see from the channel. But if there's not a ton of people liking the comment, I'm not gonna know if that's a hot topic that you guys really wanna see. So drop some comments down below. Interact with each other. I'd greatly appreciate that and then give us an idea on what to film over the next few weeks. Tryin' to get a head start, Cody? What are you doin'? Whatcha doin'? Switchin' lies on my camera, man. Let's get it, dude.  You see that boil? Can you catch one for the cam, Cody? You want me to do it? Let's do it. Oh, you had one. Yeah, I saw him right there. That's the thing, guys, that this pond, there's like so much of this nasty sloth. What in the world? Oh, snap! Yeah! Dang, Cody. Hey, guy. Whatcha doin', man? You know, how to get it in while you're occupying the camera for me. Dude, he's such a little flopper. There we go. Look at that little guy. Little hyper dude? Nice. What a way to start it off. Hi, Cody. Thanks, man. Wanna get a sexy release on him? Yeah, look at that bass. Oh, yeah, there is one. There's two. It's hard to tell with the glare on the water. Nice little fish. As I was saying, there's like a lot of slop, and so it's perfect for a frog out here. You got a ton of this grass, and also around this bank, got more grass, and then you walk down there. There's some more. So let's go ahead and rig up this frog on my rod, get the cast, and see what we can do today. I'm just excited, man. Every time I film a frog video, it's just... Oh, my gosh. It's just my favorite thing to do. If I can catch them on a frog, I'm having a good time. If I can catch fish in general, I'm having a good time, but on a frog, just a whole different level. Let's see what we got. So we have some greens up here, and more natural frog colors right up top. Like a little tannish. That was an interesting color. Very interesting color for a frog. Got some more of these natural colors. That could work good. Got some whites and blacks, which is awesome. Then we have some mini frogs. I wonder if we try that out today. I've never really filmed a video throwing like a smaller frog. I think that could be cool. Then we got some of these pad purches down here. That's a black one. Got a white one, and then we have one standard, one of the juice color that I enjoyed throwing. I think what we should do is probably put on... Since it's cloudy today, the sun's not out. I've had some good luck with a black frog. I think maybe we try this. Just a standard black frog right there.  I think we start off with this one. We might dig throughout this and find a different frog to throw, or maybe even come back and throw one of the smaller ones. I think that would be a lot of fun. So let's go ahead and tie this one on our rod. This black one right here. See what we can do. A little pad perch.  I am so sorry. But we got to do it. We got to do it. We might tie you on here in a little bit, bud, but we are going to put a regular black froggy on for the time being. Like I said, this is 65-pound braid. Very thick stuff. You're throwing in some thick pads and thick vegetation. You're going to want some heavy braid. I'm just tying a basic uni knot. Very simple. Boom, boom, boom, boom. Center down, cha-cha, cut our tag end, and we are good to go.  We're going to trim these down a little bit. I'm probably going to take about an inch and a half off of this. Boom. There we go. I just took that right off.  You don't want to trim them too much. It's better to trim a little less. That's probably, that's perfect. If I could have it maybe a little bit longer, that would be good, but that is perfect. That's how I usually like my frogs. I like to trim down the legs. I don't want them too long. And the thing about when you have the long legs, you can actually walk them a little better, but as long as you don't trim them down too much, that's usually what I do with my frogs. You see this, Cody? I don't know how much. See how I trim the frog legs? Trim them like a little bit shorter. Well, my frog is I like cutting them down a little bit. Yeah. It can be a little easier for a fish to get in its mouth and it looks a little more natural. If you have them long, you can actually walk the bait a little better, but usually I cut them. That's just something I've always done. But you can still walk it pretty good. You see it in the water right there? Look at it twitching. Ooh, baby, look at that. This frog walks very well. This is a little striking frog. Watch this get slammed right away. It looks juicy. Oh my God. Oh my God. Dude, that was more than just a bite. That was insane. She should eat it again. I didn't stick them at all. Oh my God. Dude, that was crazy, bro. I haven't fished this pond in like probably four or five months. Bro, that was wild. I can't believe you didn't eat it. These fish are acting like they're going to eat today. I don't know. We're going to see real quick. I can't believe I missed that one over there on that tree. That thing destroyed the frog, but the thing is I landed like on that grass and I think he was coming up through the grass. He just didn't see it all the way and that's what caused him to miss it. But one thing that I'll tell you is pretty obvious. Like when you come out of these places, I love when there's a mixture of vegetation and cover. So you got this vegetation all on top of the water and you also have these big laydowns. When that grass in the wood meets, there's usually going to be some fish on it. So let's make multiple casts over here. I couldn't get that fish to bite again, but there's probably some more off these trees. Let's go ahead and start casting around and see what we can do. Up there in that shade, there should be a fish. Oh yeah, we should get slammed. Frogs kind of sink and I think I got some water in it.  Before we start walking this pond, I have a weird feeling about this black frog. Something about how that fish came up and he didn't commit. It's kind of keying me off in my head that I should change colors. I don't know, I just have a weird feeling. I think I'm going to put on this pad perch right here. I've had a lot of luck with this color in the popping pickle. So I'm just going to tie it on. The way that that fish came up for that frog and he totally missed it, it could be because of the color. You know, we talked about that in one of the recent episodes when we were top water fishing. And now we're going to, we're going to see if it actually works. We had some fish come up, not eat it. Now we're going to tie on this color. It's a more natural color. We're going to see if that actually helps out the bite. See if these fish would be committing. I wasn't paying attention. Oh yeah, that was 100% fish. I think that was a turtle that just bit me. Like pulled it down. I can't even see it. Oh, dude, it's like they're not committing. Let's walk down this way some more. I'm going to catch one right here. Feel it right there. One's going to slam it. Oh, what's just happened? I itched my ear for two seconds. Really, I should be money. Did you capture that? Oh my gosh. I didn't see him until two, I thought it was a turtle, dude. And I like to see him door to after him. Like what? Dude, this is not what I need right now, Gator. You're not really helping the cause. Come here.  Follow it to the bank. Yeah. I can't do anything. Look at how fast that thing is. That's actually terrifying. I think it's time to get to a new pond. This is rough. I think I'm going to get one up and then, ooh. I don't know, I was going for a squirrel, but... Oh, dude, whoa. Yeah, that was a dangler, dude. He's right under me. Chupapi, chupapi, chupapi. Yeah, it did. So guys, you know, frog video is going great. You know, we've attracted some birds, turtles, hand gators. There's no fish. They're in the same exact spot. Oh my God. Yeah, that bird just dies down and sloshes it. Oh my God. Oh, I got him, dude. I didn't even see him eat it. All right, thank God it's a fish. I thought it was a bird, dude. If I would have caught that bird, I would have felt so bad. Oh, yeah. First frog bass. There we go. Took us a minute to get this video started, but... Second pond must be two times charm. Pretty bass. Nothing big, but he ate it. Saw some boils up on the bank. Through that frog, skipped it right up there. Wow. Thank you, buddy. Well, guys, we got the first fish. Get the broke the ice right there. That's all we needed. Just get one. It's hard fishing from the bank over here because I can't get under these trees how I would like to. And that was the first cast that I was like, you know what, that's it. Oh, yeah. He's a dangler, but... That looks money, dude. Oh. Wait. He ate it when it was under the water, dude. That was crazy. That was insane right there. Oh. Hey, that counts, man. Does that count? In and out like a fast food restaurant. In and out like the draft through, babe. Just in and out. Like, why did he not eat it? You know what I mean? These fish are just not... They're not playing the game today. They're really not... They're just outsmarting me. So this was our second spot that we hit today. I have a few more spots in mind I think we can go over to and hopefully catch a fish. I can just really tell, you know, that these fish are not filling the top water today. They're not filling a frog. And if we were throwing anything else, I really do believe that we would catch a lot more fish, have a lot more bites. But we're going to go over here to this third spot. See if we can get them on this frog. If we don't, then I have a place in mind I think we can catch some really big ones. So I think we'll go hit that place up. Go on to the third spot. Dude, I got him. Dude, that was so cool. That is what I've been waiting on all day, baby. He's not big, but that's what I've been waiting on right there. Gosh, he ate it good. Look at that. That's how you want to eat it right there. Couldn't be better right in the top of his mouth. Had him stuck in the tree and everything and got him out of there. Thank you for eating it. That's a beautiful fish, man. Look at those markings. Got that goldish glare to them. Not a big fish, but. Every time, you notice every time I lay them in my hand, they just decide to... I need to learn to not do that anymore because every time they just flop, the gills all messed up, too. It's not for me. See that? Gills all messed up. It's a pretty bass, though. He destroyed that thing right there on that lay-down. I wonder if that's the one that bit me a second ago. All right, buddy. I'll get you back in the water. Here goes. Hate those gills messed up. Look at what happened. Oh, he's right under me, right under me. Pretty good one, too. I've never had to work so dang hard for some fish just to come off right when you flip them up. That was a good two-pounder. Oh, my God. Oh, there. Dude. Dude. Dude. That was crazy, dude. Three of them just fighting over it. Right here. Dude, that was so cool. That was dope, dude. These fish are roaming today, guys, like in a big school.  That was a pretty fish. Look at those markings, man. Look at those dang markings.  It's a pretty one, man. Not a big one, but pretty bass. So cool. There it goes. That's a better one, dude. The windy guys, I apologize. I'm the best I can feel. Look at how he ate that frog. That's a good fish. Not a bad one. These things, crazy, man. Eating a frog and a wind like this, working it really fast. That's been the key today, not to slow this frog down, but to work it fast and that wind, and they're just eating like a little baitfish. Look at that, dude. I like it. I like what we're doing. Thank you, bub. There's one sitting, two sitting right down there. Unbelievable. That should be my honey, dude. Around that tree. She gets slammed. This is crazy. Go from not catching them on a frog to catching them in the blazing wind on a frog. That's just insane to me. Look at that indention. That bass is head right there. It's like something got him almost. I officially ate it good, too. It's crazy, guys. When you talk about frog fishing, you don't talk about fishing a frog in the wind. And we could not catch them when it wasn't windy, and now it's windy. I'm working the thing so fast, and it's like just really getting these bass to bite. They're not big, but let me tell you, any fish is fun to catch on a frog. It's awesome. We got all this wind moving up in this corner, and they're stacked along this bank, along that cover. Thank you, bub. It's super windy. There's another pond next to us, and we've caught a good bit on a frog. You know, we've done what we could with it. I'm actually going to tie on a chatterdunk. I'm going to be putting a rage swimmer behind it. We're going to go out to this pond just for a little bit and see if we can catch a really big one, because I've only been to this pond a handful of times, and I've caught two fish that are around five, six pounds, and there's some big ones out there. So I'm like, you know what? Since we're over here, might as well tie us on a chatterdunk. Walk over there and just see if we can catch us a big one and off today's video on. So that's what we got right there. Let's walk out here and see what we can do. It's noisy because people are working out here. See if we can catch us one or two on a chatterdunk. Oh my God, Cody, there's one on bed right here. So big. Dude, that fish is so big. I think they'll bite in a second. If they're on bed in here, dude, I almost say film another video out here. They're locked on bed, bro. That's crazy. Oh, that's a good one. Choke that chatterdunk. Look at how he ate that thing. That's exactly how you want to eat it right there, boy. That is fun. Old chatterdunk, right? Gotta love it. He ate that thing so good. Wow. It's one of the biggest fish today. Solid, too. Do something. Thank you, buddy, for biting. Let me get your mama. Oh. Dude, that's a big one. It's not that big in the world. It's a good one, not a big one. Eat that thing the same way.  It's a nice fish. Choked it. It can make it a lot easier on your buddy, but whatever. I think I'll just go back and try to catch that one big and call it. How do you just break me off, man? Well, boys and girls, ladies and gents, I was going to conclude today's video. Oh, man, I'm so upset about that. That was a freaking toad. I just broke her off. They're actually locked on bed. There's two of them sitting right there. And I knew they were going to eat, caught this two fish, went back to it and he ate it right away. And for some reason, it just broke my line. But I need to re-spool my rods. But I hope you guys enjoyed this video. We got to catch some fish on a frog. Got to catch a few on a chatter bait. And all in all, it was just a good day. I wish it wasn't as windy because I know it's going to mess with the audio on this video. And I do apologize about that. But if you enjoyed the video, please hit that like button. If you guys are new to the channel, hit that subscribe button. And I will catch you guys in the next episode.


This Star Wars cast that we saw in the teaser trailer. Let's get on with this, shall we? So, the drawing that we saw in there. R2D2's little nephew. His name is BB-8. So, those of you that thought he was R2D2 in some other form of fashion. I guess it's not unless R2D2 has been converted in some form or fashion. So, as his name is, I thought he was weird looking. I was like this, a bald with a head that is not attached. It's kind of interesting, you know. So, we'll see what's up with that. The X-Wing pilot that we saw. His name is Poe Dameron. Or Dameron, however you want to pronounce that. I know nothing of him. I have no speculations. I have no ideas except he's a X-Wing fighter pilot. The black dude. The brother. His name is Finn. Why he doesn't have a last name? I have no idea. Maybe he came from slave roots on there. And he don't want to carry the last name of the white man. Like Michael Max did. Maybe his name is Finn X. Just kidding. And the girl riding the thingamabob. Her name is Ray. Okay, well she ain't got no last name either. So, it ain't no slavery thing going on as I can see. Okay, Anakin was a slave. So maybe they never mind. Anyway, so that's her name is. And finally, the Sith Lord. The Darth. The one who represents the dark side. Not the light. It's named Kylo Ren. I thought the name would be harder than that. Is that their name before being given a Darth title? Because you know, Anakin Skywalker became Darth Vader. And so, you'll be known as Darth Vader. So, I'm assuming they will become a Darth later on in the film. And to tell you the truth, I was hoping the name would be harder than that. But that's because I assumed that we'd be hearing a Darth title. You know what I'm saying? Darth Vader sounds hard in menacing. Darth Maul sounds hard in menacing. When I heard, when I found out, man, he was like, Lord Maul. Evil funds your ship.  Lord Maul, I was like, damn, his name was Lord Maul.  Okay, okay, no problem.   If you want to see, oh, by the way, if you want to see my reaction to the teaser trailer, if you haven't seen it yet, you can click, I guess, right there. Yeah, I'll post the link. There you go, right there. Okay, all right, I'll post it right there so you can go check it out. So that is all the names that I see so far. Yeah, that's all the names I see. I'll post the link below to the article. Tell me what you think, any speculations, rumors that you may have heard. I have no problems with these names whatsoever. So yeah, let's do this. I'm looking for more revelations in the future. One million subscribers. Boom!


All right before we get started with the first event I'd like to introduce somebody in the audience and that is Mike Nolan Mike was Jack's assistant. A lot of you know Mike Mike was a Jack's assistant helped write how many books? At least four or five books and It's still still a vanguard and is my number one go-to guy for anything I need from vanguard including people to interview Which brings us to our guests today I have question though in the room. How many people here own a vanguard index fund? Okay, the fellow today who I'm going to speak with is your fund manager. So if you have any complaints Anyway, I am pleased we are so pleased to have Jerry O'Reilly as our speaker today He is a principal and portfolio manager at vanguard and he oversees the 1.4 trillion dollar Vanguard total stock market index fund, which is the largest mutual fund in the world and He also oversees 16 other funds of which I believe he said five of them have your name on it. So in total I believe About four trillion dollars is that rough estimate? Yeah, which is 10% of the value of the entire stock market guys important, right? So with no further ado, let me introduce Jerry O'Reilly, please come up to the stage Okay, good good to go. Well again, thank you for being here and my numbers were pretty correct right four trillion Yeah, yeah, so do you sleep at night? I do You know a lot of it is because I'm exhausted when I get home. So there's there's no problem there But yeah, I mean listen I I am the name person on there And I am surrounded with a phenomenal team that I work with and so You know, we have we have 25 people Rick that manage that for trillion and change With you know average tenure, I'd say about 12 13 years, which is unusual In terms of you know the tenure, but like when we hire people it's all about you know How are they going to work in that team environment? How are they going to work in terms of collaboration? I know that if I'm jammed on something there's like three four people I can go to to have them pick up the lead So we pride ourselves kind of in the team concept, but it is great. I mean you know, I started off entry level on the phones at vanguard and you know my my first Paste paycheck. I remember coming home and I said to my wife. Yep I said we're starting and she was working in a shoe store and I think you know I remember thinking well, it's it's a start. I got my foot in the door and within three years I was on the desk and I felt like this is what my passion. This is where my passion lies now You have an interesting background. So I'm gonna go back even before then and you were born and raised in Ireland Partly correct. I was I grew up in Ireland, but my my mom and dad. So my dad was one of 17 kids 17 1717 no twins grew up I have an aunt who's five years older than me My Aunt Mary and if you asked me to list all 17, I'd be I'd be stretched. I'd be here for a while But dad was grew up in a farm in Kells County me the outside Kells County me Probably some of you have heard of the book of Kells. So that's that's where you know Kels is And dad when he was in his early 20s someone locally had gone to Canada to work in a town called Uranium City, which if you look at a globe for Saskatchewan turns from green to white Saskatchewan uranium city is well up into the white so dad and four or five local 20 year olds went over there and that's where he made his money and my mom He came back and they got married and I was born in Uranium City, Canada Oh, is there and when I was two years old they brought me back to Ireland's and mom is from outside Kells, too and Yeah grew up in Ireland and then you know things well, okay, so You were a track star and you were recruited To go to college here in the United States. Yeah, and then you were actually an Olympic athlete. I was yes So about that So it was a few pounds ago Rick. I used to be 152 But that's what happens when you run, you know, 90 hundred miles a week training, but yeah, I mean I From 1976 was a pivotal year for me. I was 12 years old.  I see what age is I Was watching the Montreal Olympics and there was a guy from Ireland who was like our LeBron James his name was aiming Coglin He was a runner He was at Villanova and he was favorite to win the 1500 meters and I had started running at that point And I was fairly good and I remember watching a documentary on Amon and seeing like hey, he's going to school He's Representing Ireland and he was a favorite as it turns out he finished fourth and it was great disappoint But I remember he just planted a seed with me thinking Man if I was good enough as a runner, I could actually get a scholarship I could you know potentially set me off for a career and I would go, you know, we lived out in the country back home And I would come home from school drop the bag off and the family was having dinner And I'd go out and run seven eight miles by myself on country roads And at the back of my head was this fueling me was this potential that someday Maybe I'll have an opportunity to get a scholarship and when I was a senior in high school I won the Irish national championships and all of a sudden I had 12 scholarship offers and my mom Being Catholic from Ireland. She's like Villanova's a Catholic school. That's where you're going And so that was the end of it. And so I ended up in in the fall of 83 Showing up at Villanova campus. Yeah. Well, I just have to I just have to because you did walk into the stadium at Seoul Korea Yeah, you know all those people in the opening ceremony. I mean just tell us just a just a little bit about that Yeah, I was fine until someone yelled from the stands that there's 200 million people watching you The thing about the Seoul Olympics and you can Google this They brought all the all the teams in and I was there was maybe a hundred people on the Irish team between You know all the different sports officials and everything else phenomenal the whole day just was incredible They bring you into the stadium and you line up in on the infield and of course It's time to light the torch that the cauldron and what they did was they released a couple of hundred doves as a sign of peace Mm-hmm, and where do you think that doves landed on the cauldron and then two athletes went up and lit the cauldron? And that's the last time the Olympic games have let off live birds It's it's not a pretty sight. I showed it to my kids on my daughter's jaw like she was 10 at the time And her face just dropped. He's like the birds But yeah, you can you can Google that but phenomenal experience at just you know, it's a 24 year old. Oh Incredible to be there and and then how did you get a job at vanguard? So There was a guy who Mike knows well who used to compete against me named Jim Norris and Jim ended up being He was an assistant to mr. Bogle for a number years He would have been involved in some of the earlier books where his Mike was involved in some of the later books Jim and I would meet at would race each other. He went to st. Joe's I went to Villanova there they're literally, you know four miles apart and I got to a point where in my career where I was I was making some money from running Rick But not enough to walk in and potentially, you know buy a house or even even buy a car And I remember thinking I need to find something a little more stable And you know vanguard was half an hour away and Jim was working there already And he said listen, I'll drop off your resume and that's how he got my foot in the door as I said as an entry-level Person on the phones and I'm within like a month or two. I knew that I was gonna be here for a while And it's interesting. You've been there for 31 years now 31 years in March Yeah, that's a real testament to me to vanguard because they hold their employees for so long. Yeah, I mean, I think When when we hire I mean when I interview people I'm not I'm not interviewing somebody that I want to be on the desk for two or three years I'm in or I'm hiring somebody that I can see 20 years 25 years down there Wow, so there's and I think vanguard does a really good job of making sure that you know Just the whole quality of just your your your work life balance is good. I mean You know, I have you know for kids and they're they're all in their 20s now But when they were you know eight ten if there was a dance recital a ball game I it was no problem for me to to run out and and catch that and and and you feel kind of like and then when you work with people like my Duke Gus Sorter and You learn from people like that and you just you know Gus was probably one of those guys the most humble Person and I know he's spoken to the to the Bogleheads on a number of occasions, but it's just contagious You like like I would have ran through a wall for Gus, you know that that type of person And it just I mean I just absolutely I tell people Interns who come by the desk looking for a little I say listen I'm 31 years at vanguard on a Sunday night, you know when I hear the 60 minutes Clock I'm like, okay works tomorrow. Awesome. I'm looking at the futures I'm figuring out what we're gonna be doing tomorrow, and it's just to me. It doesn't feel like a job well, Fanta, well, let's go ahead and get into the portfolio management, let's first talk about the vanguard total stock market Index fund 1.4 trillion. Yeah roughly just yeah get tied under. Yeah, and that that includes both all share class All share classes. Yeah, and I just for clarification Vanguard has a little different approach to ETFs versus mutual funds where it's all the same pool of money Yes, could you talk about that and how it's split up then yeah different level it is Yeah, so so in total stock market there we have you know the VTI share class We've Admiral share class with institutional share class to me It's all just one large pool of money which makes it easier to manage and there's also benefits to that multi-share class. So for example You know whenever there's corporate actions going on where you potentially have ads to the index if it's a standalone I would need to sell Basically to raise money to buy the stock that's getting added to the index But in total stock market at any given day, I could have 500 million coming in and cash flows. I could have corporate actions for example yesterday I came in in the morning thinking it was going to be a nice quiet day and all of a sudden Activision is halted and I have to spend 2.2 billion at the end of the day because I get $95 a share times all the shares of that of Activision I have and now I'm talking to Nasdaq about you know potentially Is it going to be halted all day? Is there just for the morning and what's the repercussions of that for all of the funds that we manage and you know from my funds I need to spend that cash and spread that across the rest of the 4,000 on securities in the index The share class also when we have redeems So if somebody does a create like I'm talking about APs who are doing dealing in $20 50 a hundred million dollars Authorized participants of the people who yeah Create and regain redeem so Rick when yeah when they Redeem we're able to give them the lower cost basis stocks So take a stock for example like NVIDIA, which is up what close to 200% for the year We can give them the NVIDIA shares that we have at low cost basis Which tends to make the fund more tax-efficient overall So I want to dig into that a little bit because you do they have this I call it a double-edged sword on tax efficiency of a fund like the vanguard total stock market fund if you have a stock that is That it went down in value. So the basis is higher and you're actually losing money You would redeem that for cash and take the loss in the fund You potentially have the option so you can basically determine when you're talking to our fund accounting Which shares do we want to you know hand out so potentially you could do that There are I mean the primary goal Rick is to you know make sure that we're tracking the benchmark But there are different tools available one would be you know the in-kind process The other would be potentially tax harvest at certain times of the year So names like for example that we might have a cost basis of here that are down here If you sell those names as long as you don't buy them back within 30 days because of the wash sale rule You're able to realize a loss. So we we do look to try and keep about a You know 170 to 200 basis points of a cushion of realized losses in the fund so that we're not distributing gains to the shareholders I think one of the big concerns is when you look at the data on Vanguard total stock market. It says unrealized gains And it would look like there's a huge huge amount. Yeah, and sometimes the media gets a hold of this And they said oh if people started selling this fund You're gonna get hit with big capital gain distributions Yeah, and but it's not really true is it no I mean it is something that we monitor literally on a weekly basis in terms of the capital gains And if we start to see that realized losses are getting below that kind of 170 basis points We start to take action on it and it's and sometimes it's like we have you know, as you mentioned the crisp indexes They do rebalances once a quarter. So if you think about it, we just had one in September If we sell names in the third Friday in September or during the five-day period if They're not large names in the fund and their fund their stocks that are we have a significant loss in the name We can just put those names on hold for a period of 30 days Now these might be stocks that have a weight in the index of less than a basis point But they could be very tax-efficient when it comes to realizing losses Okay, so the whole team that kind of works with us in terms of helping us identify what those names are and making sure that you Don't have any concentration in any industries or sectors where you you know if that sector rebound rebounded over the 30 days You would be hurt. So making sure we do it in a diversified manner. So on the mutual fund side You're able to take losses and build up these capital losses because you're gonna do it in cash Yeah, I'm gonna sell in cash but on the ETF side you're going if you have a big gain and you want to Push that gain out of the fund Without the shareholders incurring a capital gain you'll go through authorized participants. Yes, so explain that process I mean, how does that work where you are able to push this stock out and the fund itself not actually take the game Yeah, I mean, it's it's I think all index all ETF providers because of the in-kind mechanism where You know if you have a stock for example that has a significant gain if an AP comes in and does a Create and on the way out They receive that stock because it's done in-kind the NAV of the fund really has the gain in it and it's not Realized until a shareholder sells whether that's in six months. So it's just deferring the gain It's really what it's doing through the ETF mechanism. So the create then is this Basket of stocks that comes in from the authorized participant, which is maybe a JP Morgan or Goldman Sachs or somebody this whole basket of stocks comes in and They that comes into the fund You're not buying this this comes in through the ETF mechanism So they would give us the shares of the basket We would give them shares of the ETF and on the other side when they want to redeem those ETF shares They bring the ETF shares in and you have to hand out stock And the stock you give them is high cost basis hundred percent. There we go. Yep Okay, and that's how it becomes yeah more tax efficient even to the opened-in fund shareholders Yes, because it's all part of the same that is for the same cool of money. Yeah, very good I always thought that was fascinating. I read the paper that I think it was Gus wrote on this back I don't know two thousand or whatever it was. Well, you crew then you went out and got Patton on this Yeah, and now the patent has come off Expired and I think there are a couple of asset managers that are doing it. I think DFA is looking at it. Yeah Interesting. Well, very good. I'm curious We did mention the index so the index that the total stock market index fund tracks now is the crisp total stock market index In crisp is what we call a crisp It's the Center for Research and Security Prices, which is owned by the University of Chicago currently 3800 Stocks in that index, but it wasn't always that index I mean back in the day it was the Wilshire 5000 Yeah, and then it turned into an MSCI index for a while and then it moved over to the crisp index So these indexes do change once in a while. They do that's a huge Yeah Event yeah for your desk when an index changes correct correct and what do you have to do? How do you get it aligned? Well it lots of times So I remember those days Rick where we had the Wilshire 5000 and there were you know I think going from Wilshire to MSCI there were reasons that we had concerns about Wilshire which back back then I mean Index methodology has become somewhat commoditized now It's it's got little flavors on the margins are a little bit different But in terms of just the basic and Gus contributed to this in a paper he wrote back in the early 2000s as well But for example a simple thing like float So let's say for example, you know, you have a company a biotech company and the insiders own 80% So really there's only 20% of the shares outstanding are available to the public Wilshire would say no all the shares available to the public So when a name got added you had you had indexers trying to buy as if there was a hundred percent of the shares outstanding available And we would cause huge impact on these names So the idea of float adjustment came about and an MSCI had some things that we thought were desirable So we moved but when we move from one index to another It's a big deal and it oftentimes it takes months to convert kind of from your existing Here's your current index to the to the pro forma the one that you're heading towards it needs to be done I mean because ideally what you're trying to do is do it without realizing gains without having any kind of substantial tracking error and Crisp, you know when we move to crisp I think that was primarily for cost certainty So as you guys know like when I started at Vanguard, I think the average expense ratio was around 30 basis points And it's come down to on an acid-weighted basis now around eight basis points And I think Vanguard felt like hey if if we're offering Funds and we're you know giving investors the benefit of economies of scale because of our size We had this Index licensing thing out there that we felt like we need to get this under control for the long term So that we're not you know, like if you think about VTI, it's got a three basis point expense ratio It wouldn't make sense to be paying a licensing fee, you know close to that number So I think with Chris we got a long term where we got cost certainty and it also helped that Chris methodology We thought was best in class MSCI is still, you know really really good in terms we use it for the sector funds But as I mentioned a lot of the indexes have become somewhat commoditized now So you've got 3,800 US stocks in the crisp index of which you own all 3,800 Give or take yeah, there may be some at the very bottom desk side that just trade by appointments And that's where I actually want to go to yeah So how many of these 3,800 stocks are actually liquid? You could go out to the market you can buy them and how do you handle those trades? Yeah, and then how many of them are illiquid where you've got to handle them differently and then explain that process Yeah, great question. So I would say you know the top 1,500 names Very liquid no issues at all trading them if you have it like that list I mentioned yesterday For Activision when we had to spend all the cash from it when I generated trade lists around 3 o'clock yesterday I think I had 1,400 names and very very liquid names The issue and the time and the names that I spend most of the time trading Are the tail the exact names that you refer to Rick which are the ones in the bottom say three des 7 8 9 and 10 the ones that are very difficult and what we do there is every Monday morning We'll come in I'll run a 200 million dollar list of those names that are so we have the ability to basically say On our trading platform to say I want to generate a trade list But I want you to focus on the bottom four desiles And by desiles meaning so we rank them, you know one one through 10 The ones are the most liquid apple would be up in desile one all the way down to the bottom Okay, and then focus on those and those are the names that are really bad And then what we do is we break it up between five or six traders So every trader gets 40 or 50 names and we keep them out there for the entire week and I tell the traders Let's be opportunistic. So You know in the u.s. We have 16 different exchanges. We have 40 pools of liquidity So it's a little bit like whack-a-mole when you're trying to trade one of these names You don't know where the seller is at we have access to brokers who focus just on illiquid small cap names We have we'll we'll run these names through all sorts of dark pools at s's If a broker happens to be doing a small cap rebalance where maybe a Manager is getting out of some small cap names They might call and say hey We've we've got a lot of small caps on our pad today and see if we can get a match with those names And and for the entire five days we'll just focus on those And then the bigger names rick those are the names that we will if we have a trade list Cash coming into the fund around three o'clock is when we'll generate a trade list That's when we're buying the apples microsoft And those are the easy names to trade it it also Is very nice that the most liquid time of the day in the market is that last 45 minutes I think 25 of the total days volume is in that last 25 minutes So you're trading When the spreads are the narrowest and the top of book liquidity is that it's greatest So it is very easy to trade in that type of an environment But that's kind of how we get the exposure to the small cap is running that list And then being opportunistic if there are small caps available And those are names we'd be happy to get an execution at 10 30 11 in the morning It doesn't matter because they such tiny names in the index. It's not really going to impact at all Let me ask a question about new issues. IPO's a brand new company is coming to the market Now they don't go right into the index right away That's a little bit of time like you said Chris, you know adds them Periodically. Yeah. So on that rick, it's a if it's large enough Chris will add it in five days Five days for a large IPO and that's incredible because back in the day It sometimes would be three months six months And considering our size if you have the ability there is this massive liquidity event when an IPO happens and you probably saw it this week with Birkenstocks even though it wasn't added to any of the indexes because it doesn't have a us domicile Or it's not incorporated in the us. So i'm not sure where where it's going to end up But you have this massive volume rush and to be able to trade in that is really beneficial because you're not going to have Impact if you have size to do but if that name gets added to an index in six months When the volume has kind of dropped off you potentially could have a lot of impact So crisp adds within five days and then some of the other index providers you might have to wait until the next rebalance So now it might be december before an IPO would get added 2023 2022 relatively quiet times on syndicate and IPO back in 2022 We participated in over 400 syndicate offerings and added over 350 million dollars worth of value added to the portfolios by participating in syndicate and IPOs So i want to understand this When an IPO is coming out you get the roadshow and vanguard Can you buy on the IPO at the IPO price vanguard? But does it go into index funds? It doesn't go somewhere else Now good question. So if it's if it's a large IPO that it's getting added in five days We will potentially go in for a piece of it now in the fund itself in the fund itself Even before it's in the end it has not been added to the index yet now. We know it's going to be added in five days Now do we go in for the full amount? Absolutely not We might go in for a small portion of our order and take advantage of the IPO price now It's not an automatic. Hey, there's an IPO coming. You guys are going to go in on it We do analysis of it to see how many times oversubscribed it might be If it's an IPO that feels like it's going to be a little flat We're not going to have any part of it But if it's multiple times oversubscribed then we have the ability to go in the IPO We will go in for a portion of our order Knowing that the bulk of our order is going to be bought in five days time when it goes into the index But wasn't this active management? No We we see this as as as as a value add strategy as long as it's done in a risk-controlled manner But uh nice try rick Yeah Well, I was always wondering about big IPOs, you know, I know they're going to go into the index and I know that a lot of them pop You know, uh, as soon as they start trading on a secondary market and I was like, gee You know, are we uh able to participate in that through uh indexing even though they're not in the index And your answer is sometimes Yeah at the discretion of vanguard, right and it would be it would be I mean Sometimes I mean you could put in for a large order you might get a very tiny piece of what you're looking for But just because of it But yeah, you do have the ability to go in on them, especially if they're getting at it Now if an IPO is not getting at it for three or four months, that's a whole different story Well, let me ask a question about this then so you you're going to get a share of the IPO that you know Is probably going to pop on and you you like it It's oversubscribed by however many times it needs to be oversubscribed Yeah for you to for you to like it But you have all these different funds out there. Yeah, how do you decide? Who gets it? Yeah, so we we we prorate it basically Oh, you do do prorate it across all of the so for example if it's crisp and we know it's getting added in five days We're going to know based on the size of the company. Is it going to be small? Is it going to be mid? and based on that The good thing about total stock is almost involved in every one of them because it is it is the entire market But in terms of total stock If it's small cap small growth They all get a portion of it all gets on the size of the fund based on the size of the fund on the way to meet Yeah, all right. Well, all right, you know, you I know you use some derivatives During the day like at the end of the day you have a lot of cash You need to equitize that cash talk with us about how you might use the futures markets versus the cash markets to Square up your portfolio if you will by the end of the day So futures are incredibly helpful now I would say Ideally we hold more no more than maybe 30 35 basis points with the futures in in total stock market And the reason we use futures is multiple reasons number one When stocks go x dividend So say for example today is a monday and a stock goes x dividend tonight We need to spend that x dividend amount on the close and some days in total stock market That can be two 300 million dollars worth of names in the portfolio that are going x dividend We need to spend that The difference between x date and payable date can sometimes be two three weeks So it goes x today. We don't get paid for three weeks If we had no futures in the fund and we spent the x dividend It's no different than if you guys spent money you didn't have in your bank account You get hit with overdraft charges and when rates were zero overdraft charges were no big deal, right? But now the rates are five five and a half percent The banks are coming back and say hey you overdraft Here's what you owe us because you spent money that you didn't have in your account The beauty of the futures is that they kind of give you a cash Cushion in your fund That allows you to spend the dividends without overdrafting So that's one of the nice things about it. The other thing is that believe it or not We get calls at 358 to say You either have cash in or out of your portfolio It's physically not possible to generate a trade list and get it down to the floor in two minutes Who do the calls come from? within vanguard like We have a large transaction area. So any You know institution maybe that was bringing cash in It would get funneled through and then we would get notified Hey, you wouldn't get notified until two minutes before the market it has happened now Do we ask for that? No, we say hey listen, please let us know by three o'clock But it does happen if it's a large purchase into the portfolio We have the right to reject it if we don't think we can equitize it in time and get it in We have the right to say no. We cannot say no to a redemption Oh, so a redemption we have to honor So if we had a redemption in a fund One of the nice things about having futures in the fund that we can sell futures So I can sell the futures to fund that redemption that was called in late in the day Um, we also use futures If you're just trading and you have a rebalance where you have buys and cells and you're trying to stay market neutral If one side gets ahead of the other say your buys are very liquid your cells are not so liquid You can sell futures to keep yourself dollar neutral in terms of trading in the market So they are a very value, you know in terms of a great tool to have in terms of trading But we do, you know, it is a small portion of the overall holdings in the fund So it sounds like you've got a busy day. What I'd like you to do if you could for us is walk through a typical Day, um, you know, you get in in the morning or maybe you've thought about it on the way in What is your day look like from When you get in what time you get in all the way through until you leave at whatever time you leave Yeah, uh, so One of the ways that you have really tight tracking is to make sure that you're 100 invested at all times In addition to having the exact weights in your fund to the benchmark You need to make sure that your fund you're sitting on when you come in in the morning in an ideal situation Your fund says zero in terms of your liquidity. It never happens You all you're either sitting on 10 or 15 million or you're over invested So the first thing you do is Tie out all of the all of the activity that got processed overnight Does does it make sense that my fund is sitting where it should be in the morning? And I will sign off on that as the portfolio manager And then we have someone from our risk area that will sign off on that and then we have somebody On the desk that is a basically overseas Um a desk supervisor to make sure that all of the index changes all of the cash flows got So there's three sets of eyes that will sign off on my portfolios in the morning That's generally completed by about nine o'clock 9 15 Before I even get in there is a team from our data team that pulls in all the indexes from all the different index providers And they make sure that the indexes that i'm looking at on my screen when I log in Are exactly the same indexes that crisp is giving out that s and p is giving out so that we know that foundationally We're tracking the right benchmark and there are numerous corporate actions splits reverse splits All kinds of things that might be happening That those indexes need to account for and making sure that our indexes are good is really really important So when we tie out our everything by you know, nine o'clock 9 15 market opens And then we start thinking about what's happening today. And so we have Notifications that come out from crisp from s and p from futsy from russell saying hey here index changes that are happening on the Closed tonight And our goal then rick will be to make sure that we position those portfolios to make sure that at four o'clock Our funds are identical to the index any index changes that are happening any syndicate offerings that might have happened overnight We factor those in Any, you know dutch tenders any kind of corporate actions all of that Over the course of the day is you know, we'll have meetings about we do a We generally will have one person on the desk becomes kind of the quarterback for A particular index change so all of the information where brokers are calling us to say hey We know there's an increase in the shares tonight We have a seller of this name you funnel that all to whoever happens to be the trader that is responsible for that So that person kind of becomes the expert And you know before you know it you're it's 9 30 and all of a sudden it's it's 3 30 and we're getting ready to send trade lists down to the floor And in between we'll have meetings we have you know, i'm on a number of committees For example itaq committees with new york with nasdaq Market structure type issues that might be coming up over the course of a day so there's It's it's incredibly No day no two days are the same So even though you know, there might be things that you think you have to do when you come into work Like i mentioned yesterday with activision that was an expect that i think most people thought it was going to close next week But all of a sudden yesterday i come in and we have You know 20 of us huddled around the table at eight o'clock in the morning figure out How do we handle this index change tonight and what are the repercussions across all of portfolios? And before you know it you're getting ready to to trade at three o'clock Well, i'm gonna i have one more question But but before i do that if people in the audience have questions mel where's mel mel there's mel You could hand your question that you have just write it down on a piece of paper hand it to mel Because we do have 10 minutes for q and a at the end from the audience So there's mel you can get you can get up mel get up and walk around And hand him your question. Okay, so Here we go with the last question, you know indexing is a evil evil thing at least that's what the media says It's worse than marxism. I understand. Yeah, i mean You control the universe, right? I mean you're It could bring down the entire financial system. What do you say to these critics? Well, I I would say listen Think about all of the benefits That indexing has brought to investors. I think since 1993 Up through 2021. I think i've seen estimates mike shared with me 334 billion worth of savings to investors when you compare the expense ratios of index funds versus You know some of the more higher active funds so incredible benefits There are just so many advantages that I see with indexing in terms of the low cost the low turnover Helping people save. I mean I i've had so many good conversations probably with some of the people in this audience when bogelheads used to come When you would come to campus About people telling me hey, I I worked in this job for whatever number of years And I put money away and I've been in total stock. I've been an index 500 I've been in your total bond. I've been your total international And i'm going to be retiring at 52 years of age and I can't tell you how good that feels So it does irk me a little bit when I hear people bashing indexing because I look at all the benefits that it's brought and Listen, we have all the assets that you talked about rick, but it's at the end of the day It's this audience. It's your money that we are managing And we are incredibly privileged to be in a position to manage the money for investors like you And we have 50 million shareholders that we we take that incredibly seriously The argument, you know, I've heard that indexing it doesn't really contribute to price discovery so that You know potentially you would say well if if If there are disparities in price it should be a goldmine for active managers It should be so much easier for you to outperform And we haven't seen that it's incredibly difficult to outperform the markets It's a zero-sum game for every dollar that outperforms as a dollar underperforming And when your factor-end cost is just incredibly difficult to outperform And I think a lot of these articles that have come out bashing indexing. I think If if you dug a few layers You know if you peel the few layers I think you'd find that there are people probably not happy that they're losing money You look at the cash flows investors understand If we look at where the net cash flows have come it's To that high that lowest quartile of expenses 1.5 trillion has come in since the 90s Whereas if you look at the two three and four quartiles in terms of expenses That has been a net outflow of 1.6 trillion So investors understand that as as as mr. Bogle used to say, you know, you you get you keep what you don't you get what you don't pay for right so We're very proud of what we have we understand What a privileged position we have to manage for money for 50 million odd investors and Yeah, we think indexing has a long way to go yet rick So while mel is making his way up to the podium make your way up to the podium mel Got one last question Now you told me this in an interview that I did with you and the Bogle heads on a vesting podcast that It's a misnomer that index funds are doing a lot of trading In fact, you trade very little amount of the shares that are actually traded on a daily basis could just hit on that once Yeah, yeah, absolutely. So if you look just a normal day Probably index strategies account for less than five percent of the trading that's out there Even yesterday, you know when I mentioned Activision and let's say You know total stock wasn't the only fund that was trading but maybe in total our desk might have traded around three billion yesterday That sounds like a ton of money and it it is But if you the entire over the entire stock market if you look at what traded yesterday For stocks and for ETFs, it's probably in the six to seven hundred billion So that three billion is is less than half a bit, you know, it's less than half a percent of the average volume So one of the really good things about indexing rick and we talked about it on your podcast was The low turnover so even total stock, which is as you mentioned the largest fund When I have rebalances, they're small So the total turnover is less than 10 percent So turnover is you know, the average assets if you look at you know The lesser of buys and sells divided by the average assets in the fund It tends to be below 10 a year active managers You can have turnover 70 80 percent and believe me, that's not a tailwind when you're turning over a portfolio like that you're incurring transaction costs commissions taxes and we just you know, we really don't trade unless we have to trade and so One of the beauties of indexing is the fact rick that you do have such low turnover incredibly tax efficient And you know, it's it's it's a tough benchmark to outperform I got a lot of questions in a lot of different areas. I will say that I'm just going to ask jerry what The questions that actually pertain to to him, you know questions like You know, will this be available by vanguard or is vanguard to go to start offering this fund or that fund? I really he wouldn't know honestly, and I'm not going to I'm not going to do that So I'm kind of try to stick with you know, his His area Here so first of all Uh Do you also on your desk do international stocks? So the way our desk we have about 25 people on the desk and it's roughly 13 on the domestic side and 12 on the international So we kind of have dollar Which is the side that I'm on and then we have non-dollar which you know people like mike parry and Jeff miller and christine frank one are the people who would Focus on the international side of things and that side of the desk Does a ton of work with our trading desks in London and also in australia. So if they have european names that they're trading They're sending those to the london desk and trading And we have about 12 traders in london similar amount of traders in melbourne and the melbourne traders Those guys would trade all of the asia pack names for trading. So over the course We have this concept of kind of past the book So we'll generate a trade list in melbourne Send it out to our melbourne desk. They will trade the asia pack names when they're done trading that They will pass it on to the european desk in the uk Europe is done. They will send it back to us And the international side of the desk them will trade canada latam those types names in a global portfolio So we do have an international side. I just don't happen to be on that side. I'm on the domestic side. Yep and On the international side, do they go through the same process that you go through on the u.s Side as far as you know when they're trading and so forth. Yeah, I mean they would interact There's probably more trading done on the domestic side because on the international side the generating trade lists But then they're sending the trade lists to the desk to the local coverage in london for european names And for asia pack But the concepts would be the same the risk metrics all that kind of stuff would be very very similar Yeah, so this I know is not in your area, but i'm going to ask it.  Do you run into black rock trying to do the same thing and state street trying to do the same thing?  Well, you know if you think uh, so i'll give you an example rick. So we mentioned activision last night, right? So it got deleted um s and p announced um That they are going to replace activision in the 500 next tuesday By lulu lemon So there's going to be lots of lulu lemon that needs to be bought and we know that it's probably net If you factor in all the folks that you mentioned vanguard black rock state street everyone else that manages 500 There's probably 18 million odd shares of lulu lemon That will need to be bought now Brokers make a living out of predicting which names they think is going to be added to the index So lulu lemon has been on the list for probably a year now We know that in total we know how much that needs to be bought And we will put together a strategy on monday morning about Of the total that needs to be bought. We know what we represent and we can look at the volume numbers and start to see like Okay, it looks like there's people that are starting to front run The order in it, you know, try and get ahead of the indexing demand for tuesday And some of those may be competitors some of those might be hedge funds And all of that kind of gets built into the strategy in terms of how are we going to buy lulu lemon for our 500 portfolios But yeah, you're fully aware of it's all out there in terms of the holdings and the assets So we know as the as they know what we have to buy And then it just comes down to the desk itself in terms of the traders the experience the strategies And we feel really good about the position that we're in You know, I've been on the desk. I've been a vanger 31 on the desk about 28 Don butler is about the same. We have probably we we understand the different strategies involved And it's our goal to make sure that you know when when a name like lulu lemon gets added That we do it in a way that that we feel we can Potentially add a little bit of value add to the portfolios But making sure above all that we track the benchmark closely And on that point I've noticed that you're actually able to make up some of the basis points Yeah, in other words, if the etf is three basis points, you actually outperform Yeah, so this year year to date. I think we're more active management by the way Go ahead I think so if if you think about it We would call it value add right So if if you think about it so the expense ratio on vti is three basis points The value add year to date is about three and a half Yeah, and so it's a combination of some of the things we talked about some of it a syndicate Some of it is complex corporate actions For example, there was one large one a few weeks ago. Johnson and johnson spun off cave view We were able to handle that action in such a way That we added 190 million dollars in term to the funds in terms of how we handled the spin-off How we elected shares and how we traded around it That moved the dial a little on some port, you know, not quite a basis point in total stock But but somewhere between 0.6 0.7 of a basis point. So Those types of strategies Also our sec lending our sec lending is that the security is lending So you think about a broker wants to short a stock they need to get a locate They'll come to a company like vanguard and say, hey, can we borrow x number shares? And they will give us collateral We then can invest that collateral and sometimes it's incredibly lucrative. So You're probably familiar with amc movie theaters You know, they had a complex corporate action going on this year that everyone was looking to borrow amc to the tune of like It added some massive amounts of money to our shareholders now We're a little different. I think in that our Securities lending it cost a certain amount of dollars for that group to run But all of the money that comes in through Sec lending take out whatever takes to run that group the rest of that money goes directly to the funds that loaned it out there's no Company, you know our management company keeping a portion of that to make sure their stock price remains at a certain level It goes directly back to the shareholders. So you have a situation where in total stock Close to two basis points this year has come from security. It's not, you know, sec lending extended market. It's 15 basis points has come from sec lending a lot of it is related to that amc because it was so lucrative um But that group this year has brought in over a billion dollars to vanguard in terms of loaning out securities And that money has gone back to help offset the expense ratio 100 less the cost of the less the cost Which is different than other index fund providers where they keep 50 percent of it Give us give only give the shareholders 50 percent. So yes And so in the end I made this comment yesterday and another I said beta is free Beta is free and you're confirming that. Yeah, I mean if you if you own vti this year in fact, you're getting a free lunch Free lunch. Yeah. Well, thank you I think that's all the time we have Uh, um, thank you jerry. It's been really fascinating. I really appreciate that. Thank you for coming in today Thank you, any time


Hello everyone, welcome to another Narc Survival Live video. In this one we're going to be discussing how the discard phase isn't real. Many of you who are watching this right now, you may have been discarded by the narcissist and I know it's a very painful experience to go through. You've been through a lot with them, all of the ups and downs, the lies, the manipulation, the betrayal. You've been through so much with them and I know it's hard. It's difficult. It's like the entire time you felt invalidated as though they could not share your experience. Everything that you had to go through with them, they were never really there for you. It's like you had to go through all of that on your own and no one was there for you. No one listened to you. No one was by your side. No one supported you and I know what that's like. It's a very difficult thing to go through and in the end it just feels like they discarded you like you're nothing, your garbage, your rubbish, you're no good for them anymore. After everything you did for them, after how much you tried, you gave them everything you had. You did everything in your power to make them happy but nothing you did was ever good enough. They weren't satisfied. They weren't happy with you despite everything you did. It still just wasn't enough because nothing can fill that void. It doesn't matter what you do for them, they're never going to be happy with you or anyone else and that's why I say the discard phase isn't real because it's not real. It's an illusion of a rage. It looks like they're done with you. It looks like they're not coming back. But they will be back and I know you may have seen the pictures on social media of them flaunting their new source. It looks like they're so much happier without you. They've just moved on, they've forgotten about you. They're living their best lives now and it's like you never even existed, you never meant anything to them but in actuality, yes they may be with someone else and they love bombing that new person, they're in the idealization phase but soon enough the narcissist will end up devaluing them. Something will happen, things will go wrong and they will turn against them and when that happens they're going to be seeking another new source and they may just come back to hoover you, they may re-idealize you, they may love bomb you again and that's why I say the discard phase isn't real. It's an illusion, it's a mirage, of course at some level they do realize they do know despite the arrogance, the sense of superiority and entitlement beneath all of that they know that they're not that special to where you cannot find anyone to replace them because how difficult is it to find someone who is manipulative, self-absorbed, someone who lacks empathy, there are so many people like that in this world and at some level they know or they will know how difficult it's going to be to replace you because empathic people they are very rare and being empathic you were a great source of supply for them, you were a good listener, you paid attention to them, when something went wrong you didn't blame them, you self-loathed, you blamed yourself, you took responsibility for everything, perfect supply for a narcissist because they need a doormat, a fool, someone who will just listen to them blindly and do whatever they want, that's what gives them their supply and what seems to happen a lot because I've had so many clients, I've spoken to so many people and I do notice a pattern, I notice that when narcissists leave empaths, people who follow my videos, my clients, people I talk to, when a narcissist leaves someone like that they typically want to go off and prove to you and to themselves that you were the one who was the problem so for that they need someone who they can create a false image with, to where it looks good, they've moved on, they're happy, they're living the best lives and for them to do that they're going to have to find someone who is also if not a narcissist then narcissistic typically someone who's overt, grandiose, someone who knows how to put on a show and of course these types of people, they're manipulative, they're liars, they're frauds, they're exploitative, so they're likely to just be deceiving the narcissist and yet the narcissist will sell this dream to you, they will flaunt the new source in your face without even being aware that they are being tricked themselves and it's only a matter of time until all falls apart and then they will come crawling back to you or if it's gone too far and all of their family and friends know about their new relationship then they're gonna have to just go on with it and pretend like nothing is wrong because now everyone has heard all of the lies about how you were the problem, how you caused everything to go wrong so now they should be fine if they've met someone new and of course in the beginning they tell everyone this time it's different, this time this person's great so if anything goes wrong in this next relationship of course the only common denominator is them so people are going to start to realize that they are the problem even if they are being manipulated, tricked and deceived they can only cry wolf so many times until people start to catch on so they may just play along with it, they may act like nothing is wrong and you will still see the illusion it looks like they're happy they've moved on but deep down they are miserable they're not happy they just don't want you to know about it so they will continue going along with it acting as though they're having such a great time without you even though yes deep down they may still be miserable just as they were with you things haven't changed at all but there is a chance that they will still come back to you I did when they come back to you they may act as though the relationship was fine but maybe they just had different priorities maybe it was something with the news sources job and they had to move somewhere else they'll make up some excuse and then they'll compare you to the news source they'll say the news source did this they did that they did things differently they did things better than you to hold you up to that same standard even though it's very different to how they portray it to you it's just to get you to jump through hoops to do things that you wouldn't normally do but you're willing to make an effort to please them to make them happy so they'll use that tactic because they know it's going to work on you if you're an empath especially if you're if you're a codependent or a people pleaser now that's why i'm bringing this information to you to make you aware of it so that you don't fall for it because after everything you've been through you deserve better treatment than that you deserve someone who loves and cares about you for real someone you matter to someone who has your best interest in mind not someone who's just trying to play you for a fool because you're not a fool yes you may have this sense of innocence and naivety if you just trust them blindly you give them so many chances you trust them at times even when you shouldn't but you still do because you want to believe that they're a good person you see the goodness in yourself so you see the goodness in them even if there isn't any that's what we often do we we project our own empathic traits on to other people even when that's not even who they are and we need to stop doing that because when we do that we're just entering a fantasy and they're not even reciprocating it back they don't even feel the way that you do it's just that we project our emotions onto them because maybe we want this ideal love we want to feel like so many times before maybe we did get it wrong people hurt us they tricked us we failed for it their lives their games but maybe this time it's different this time we didn't make a mistake maybe we got it all wrong all of those times for four but this time we got it right we must have got it right and it's like we enter this state of delusion to where we can't even see what's right in front of our eyes because it's like if this is reality and reality is this painful let me not be in reality anymore let me just pretend that this is what I want it to be even if it's not let me just be blind let me just not even see it just ignore the red flags just overlook it and that's typically what we do in the beginning if you look back I'm sure you'll remember you saw those red flags things that weren't right and you just ignored it you just kept it pushing and that's just as we are as empaths it's like we want that love that ideal relationship so bad after all of the pain and a heartbreak that we've been through we'd rather just be delusional just pretend like nothing is wrong even though deep down we know that it is very wrong we just go along with it and we pretend because it's like we just don't want to deal with the reality we don't want to accept it and that's perfect for the narcissist to come in and go along with it as though they're this hero the savior the Samaritan this person who's there for you because that's all that they're going to do they're not going to be there for you for real they're only ever going to manipulate and exploit you and they will happily share this delusion with you making you believe that it's real when they know fully well that they are not that person and they are never going to be that person for you but that doesn't mean that they won't come back they will keep coming back as long as they see an opportunity to do so as long as they think that you're still going to be susceptible to their manipulation you're still going to believe in their lives and you're still willing to be delusional about it because let's just keep it real we have been delusional about it we saw them as something they're not and that's not to say that they didn't play along with it but in the beginning it was what we wanted and they knew it they could see it that's why they may come back if they believe that they can put you through that again because that's all they're going to do they put you through the ringer once and they're going to do it again it's not going to change they're not going to change you can change as much as you want you can change everything about yourself it's not going to change them they're always going to be that way and the sooner you accept it the sooner you will be able to protect yourself by realising that this is who that they are this is their character and that is not going to change there's no incentive for them to change they're quite comfortable with being that way it gets them what they need and all they're really concerned about is short-term gratification as damaging as that may be to them they can't help themselves delayed gratification is the way to live a fulfilling life it's the way for us to get us the things we want over a long period of time but narcissists settle for short-term things and that is why they never experience long-term success because there's no discipline or self-control they're just all over the place they're impulsive or reckless they're just doing whatever they want whatever they want and however they want to do it there's nothing to keep them in check and that is why they're so out of control that is why they're so damaging and destructive but as for ourselves we are thinking more long-term we're thinking about what is going to be best for the future and that's why we move the way that we move because we're long-term focused because we know we have the ability to experience long-term success and that's why we're not so impulsive or reckless in the way that they are they are the ones who damage and destroy us not the other way around but they come in and everything that we have the tools and the resources everything that we've prepared for something long-term and future they take that and they destroy it because they're impulsive or reckless that only short-term focused they're not thinking about anything long-term they're not thinking about a future and that is why all they really get is short-term gratification and that's how you know the discard phase isn't real because wherever they go whoever they're with whatever they're doing it's only a matter of time until that falls apart and then they will come back it won't be long but when they do come back make sure that door is shut make sure you've turned the key and locked it so that they can't get back in because all they're going to do if you let them back in again they're just going to destroy everything again they're not going to build you well they're not going to make you better they don't even have the ability to do that if they could do that they would have done it before but all they're concerned about is short-term gratification they don't care about anything long-term and that is how you should know that they are no good for you all they're ever going to do is destroy you or anyone else that they may be with so while yes the discard phase may not be real that does not mean that you should see it as an opportunity to let them back into your life because you should know by now what they're going to do they've already done it before and they have no incentive to change just think about it what they did in the past they got them what they wanted so why wouldn't they do that again and if they don't do it to you they're going to do it to someone else so make sure you're out of harm's way and when you see them flowing to the news source on social media don't even bat an eyelid at that know that it isn't real remember what they did to you know that they're going to do that same thing to them as well and it will make it that much easier for you to forget about them and move on when you know that that's all they're going to do they manipulate cheat lie future fake and then to discard you and there is no other way around that that's how their disorder functions that's how they get what they want in the moment but it's only in the moment it's short term they can't produce long-term success the problem is it takes something long term for you to realize that when you're looking at things in the beginning of course it's going to look good because they're short term focused that focused on short term gratification so they're doing everything they can to go after that so of course it's going to look good in the beginning but what about over time where are they going to be in the future of course it's not going to go well for them and you may think yes but it didn't go well for us and that's the thing as well we were long-term focused they weren't when you're long-term focused and someone else isn't and they're just coming in to manipulate and exploit you then of course things aren't going to go well for you that's why I said it's important to keep that door shut turn the key and make sure it's locked do not let them back in all they're going to do is destroy because while you may be long-term focused they are not they're only thinking about what they can get from you in the moment and someone like that who comes in just thinking about what they can get and the shortest amount of time possible like I said it's like a mouse coming out the hole in the ball grabbing a bit of cheese and then it just goes back to the hole where it belongs that's exactly what our sisters do that's exactly what they're going to do to you they've done it before they're going to do it again and that's exactly what they're doing with someone else right now and it's because they know where they belong they know that they're no good for you they know that it's only a matter of time until they screw things up or until you get fed up of them or until they get bored and then they're going to go and find a new supply they know that they cannot last over time so keep them out don't let them back into your life on average a narcissist will discard a victim seven times before it's finally all over of course that may be changing now with all of this information and people are becoming more aware of it but that's why I have to promote this message in the hopes that it will prevent you from having to go through this seven times because if you think you lost a lot and you wasted a lot of time the first time just imagine how bad it's going to be the second time the third time and all of the times after that of course it's only going to get worse but then that also just reveals what type of people they target if they're able to go through their seven times before it's finally all over now that's how you know it's not going to be easy for them to find someone else like you that's why they typically go through their seven times before it's the final discard because they already know as well they're not going to find someone like you ever again the odds are that they won't as I've said in previous videos statistics show that only one to two percent of the world's population are empaths so that is how rare we are but just know that the discard phase isn't real it may look real it may feel real but it is an illusion it is a mirage and it is something that you should not believe in but something that you should be aware of knowing that they could come back at any moment and typically the moment when they will come back is when things start to get better for you when you begin to heal and move on because that is when they will sense your energy shifting away from them and they want to have that attachment they want you to attach to them they want you to be holding on longing and doing in for them but be aware that things are never going to get better they're always going to be that way that's always how they're going to be treating you it's never going to change the only thing that's going to change is you when you finally leave them in the past and you decide to move on when you do that yes things will get better for you and they won't like it they will try to come back they will try to sabotage it and destroy you again that's why you've just got to keep them out don't let them back in don't believe in their lies don't believe in the illusion recognize that what you saw with your own eyes that was real that was the real deal what you went through your feelings were real those negative emotions you felt when you were around them that was a real experience do not doubt it based on what they say to you or on how they try to come back and treat you better don't let that pull you into the delusion remember what you saw before because yes of course sometimes this can give you cognitive dissonance too conflicted beliefs of where you're unsure of what actually happened this is where you have to trust your own intuition believe what you're seeing recognize it as true and real do not doubt yourself you didn't doubt yourself before and you were fine before you met them all right so that's the message for today on how the discard phase isn't real and in many situations yes they will come back but you need to keep them out and recognize that they're not for you they don't deserve you and you deserve better you deserve the right treatment you deserve to be treated with love and respect rather than being manipulated fooled deceived lied to so i hope this message was helpful to you and if it was you can give it a thumbs up down below it will take you two seconds and it will help to get this message out there to other survivors you can also leave a donation by giving this video a super chat or a super thanks in the comment section or you can go to my paypal it is paypal.me slash narc survivor hit the subscribe button and click all notifications so that you will be notified when i upload a new video and if you'd like to book a one-on-one coaching session with me you can go to my website it is narcsurvivor.co.uk and you can also follow me on instagram it is narcsurvivor youtube thank you all for joining me on another narc survivor live video i do appreciate you all and i look forward to talking with you in another live video very soon