First Trust ROI Podcast

Ep 41 | Gibson Smith | Actively Managing Through Uncertain Times | ROI Podcast

• First Trust Portfolios • Season 1 • Episode 41

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Gibson Smith, founder and CEO of Smith Capital, discusses some of the unique challenges—and opportunities—facing fixed income investors today.

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Ryan:

Hi, welcome to this episode of the First Trust ROI podcast. I'm Ryan Isakainen, etf strategist at First Trust. Today I'm joined by Gibson Smith, founder CEO and chief investment officer at Smith Capital Investors. Gibson and I are going to talk about what's happening in the fixed income markets. There's a lot to talk about with interest rates, with Fed policy, with what's happening in the credit markets and what's happening with some of the policies of the new Trump administration. We're gonna tackle all of that more in this episode. Thanks for joining us, gibson. I'm glad we were able to make this work on relatively short notice. Thanks for making the trip out to our podcast studio out here in Wheaton. Your office is in Denver, colorado. This is our first time meeting in person, so it's great to meet you, but I was reading on your website you've spent about 30 plus years in this industry. Does that sound right, correct? Time flies, doesn't it? It?

Gibson:

does it really does?

Ryan:

Boy, has the industry evolved and changed over those 30 years. Yeah, I just finished up my 25th year at First Trust and I tell you, it just seems like I blinked and 25 years was gone. Were you always a portfolio manager?

Gibson:

No, I started my career at Morgan Stanley in New York in the junior analyst program. I worked in fixed income and then did a little stint in foreign exchange and then, on my way to get my MBA, they asked me to stay on and kind of defer a year on. The MBA program Transferred me out to San Francisco where I worked in institutional sales, planned on only doing it for a year. Seven years later I was interviewing with Janice. So it worked out great and a great chance to really learn about the business, really kind of understand how kind of buy side and sell side interact in that sales role and really a chance to kind of learn more, more about markets. But in 2001, I made the decision to leave Morgan Stanley and go to Janice where they had a very small fixed income division, about a billion and a half $2 billion in assets. At the time. Giannis was known for its growth equity business and they had about $390 billion.

Ryan:

This was 2001? 2001. Oh man, that was Not great timing right Well.

Gibson:

I guess, for being a fixed income guy, it was good timing, but yeah, it worked great, but I went there primarily to learn how to analyze company, to really dig into their bottom up fundamental research process, and they had a really vibrant and intense research culture, which was great, and I thought it would be a wonderful place to really expand my skill set and learn even more about markets, and showed up in a 2001 and 2003. I took over for all of fixed income and by the time I left in 2015, we had taken the assets to about 43 billion dollars and the team from 7 to 39 and put up some really you know wonderful risk adjusted returns and industry beating performance and built a great business there. In 2015 I decided to leave, took a year off and spent some time with my family and recharged the batteries and had the plan of launching the business that we have today. It's with Capital Investors.

Ryan:

Okay, wow, so that's 2001. We're in 2025. It's 24, 25 years. As you look back then, compared to now, do you think the industry has evolved, has changed? I'm sure it's evolved and changed, but any observations that you'd make in ways that it's changed, as a portfolio manager especially yeah, it's evolved a lot, particularly on the fixed income side.

Gibson:

When I started in the business fairly opaque business, all over the counter, very relationship driven you didn't have transparency into pricing. You didn't have transparency into what was trading, where it was trading, how it was trading, who was doing what you know. Fast forward to today. We have great transparency in terms of how the market is functioning and flows and that transparency has kind of leveled the playing field in many ways for a lot of players. If you were a very large fixed income participant, you had a competitive advantage in the past. Fast forward today with the transparency of information, of trading flow, pricing, everything. It's really leveled the playing field in a lot of ways.

Gibson:

And the most significant change that I see on my part is that when you create this transparency in markets and you allow for the leveling of the playing field, what it means is that you have to be better at what you do. You have to have a deeper, more intense fundamental process and understanding to generate alpha. You also have to think about the world a little bit differently. You have to be a little more creative. You have to expand what you're watching and what you're focusing on. In the early years of fixed income you just focused on fixed income market. Today we have to focus on all markets. We have to be very, very attuned to what's going on holistically.

Ryan:

Yeah, that's a really good point, and I'm going to ask you about some of the specific views that you hold and maybe their impact on fixed income markets. Looking back, though, you said you started at Janus in 2021. Of course, everyone who was around in the late 90s and early 2000s they remember the Janus 20 fund and all the technology, and there's been a lot of parallels drawn between that late 90s period, early 2000s, and the environment that we're in today, especially in the equity markets, but there's some crossover to fixed income and credit and that sort of thing. Do you see some parallels between now and then or any other historical periods that you think, like this is maybe kind of what we're going through is similar to what we went through?

Gibson:

Yeah, the hard thing is we really don't have a lot of historical analogs for what's happening today and a lot of that kind of because of quantitative easing and this new unconventional monetary policy that really kicked in in the great financial crisis and got obviously accentuated during COVID.

Gibson:

But you can draw comparisons. The dot-com period of time in 01 does have a similar feel to kind of the AI move and big data move we're seeing today. The biggest difference between those two periods from my perspective is that in the 01 period there was just reckless lending in the fixed income markets and the high yield market was lending money to anyone for various kind of reasons, but some of the metrics that they were using to kind of justify the lending were insane. Right, you remember the clicks or eyes on websites and all of that. There was nothing about profitability.

Gibson:

I think there's more discipline today around the lending side. But there's still the same concerns around valuations in the 01 versus the period today. From a macro standpoint we've been in periods where the Fed has tried to engineer soft landings and has not necessarily been successful. So far it's looking pretty good. It'll be interesting to see if the kind of decline in fiscal stimulus here over the next several years kind of plays out and actually does put the Fed in a position to ease. But it's really really hard to go back and find a kind of a really tight comparison period or a really kind of tight, shall we say historical analog, so that we can kind of a really tight comparison period or a really kind of tight, shall we say historical analog, so that we can kind of somewhat predict going forward.

Ryan:

Yeah, so that is interesting. You bring up sort of the quantitative easing and some of the differences in the way that the Fed conducts their monetary policy. How do you, as a portfolio manager, how do you manage through that? Because, as you said, there's no real good historical analog to it. How do you sort of figure out what the Fed is going to do, what the impact will be on rates, not just on the front end but at longer term rates and mortgages and things that they might be either buying or not buying? How do you deal with that, and what? Also, as you answer that question, what's your view on what the Fed is likely to do kind of from here?

Gibson:

Let's work our way backwards on that. From the Fed standpoint, they're in a bit of a pickle where they have a real rate environment because of the high Fed funds rate. So the difference between where Fed funds is and the inflation rate is it's a very, very high spread and they know that that's a very restrictive rate and they know that over time that will have an impact on the economic growth outlook. Obviously, high cost of capital in the front end, where a lot of the financing is done in the economy, will have an impact. So the Fed, I think at this stage would really like to lower rates and normalize that real rate and get into a less restrictive position. But they're still fighting concerns around inflation, resurgence in inflation. They're concerned about maybe a slower growth outlook also. So they're really in a difficult spot and I think the Fed really has to think about the implications of potential sticky inflation as well as the potential for a slowing economic outlook and they're going to have to really be real-time focused on this. I think they would like to lower rates and normalize the front end real rate, but I also think they want to be very, very careful. Our position is that they're more likely to ease and probably be put in a position where they're going to have to ease more aggressively than the consensus in the marketplace right now. But we go back to quantitative easing.

Gibson:

Managing in this new kind of unconventional monetary policy environment that again started back in the great financial crisis but really accelerated in the COVID period of time is challenging and I think the one thing that we've really learned from that period and kind of reflected on. I grew up in an Alan Greenspan environment where there was very cryptic communication out of the Fed. You didn't know what you were going to get. He would surprise the markets and really exhibit a level of power and control over markets. Fast forward through Bernanke and Yellen and now Powell, a Fed that is much more transparent. That is much more, I'll say, open in their communication and telling you what they're going to do.

Gibson:

I think the biggest learning for us in dealing with this new unconventional monetary policy is believe what they're saying. Take them at their word. They are trying to create transparency to lower volatility. So when they tell you they're going to do something, believe it. I think the greatest learning during the COVID period of time was when they came in and expanded their balance sheet to over $9 trillion. I think many underestimated the impact that that was going to have on rates, on the economy and then ultimately the impact on the overall kind of structure of how financial markets are supposed to function right. If rates are your kind of foundation of setting the discount rate for valuations across everything, the impact is massive and we're still kind of working our way through this. We're still kind of trying to figure out what the right discount rate is and what is the influence of quantitative easing and what is the impact of additional funding needs at the federal level. So there's a lot at play right now and so it's very fascinating period of time.

Ryan:

Yeah, I don't remember a period of time, at least recently, where I've seen the market go from discounting or expecting so many rate cuts to then so few, and it just, you know, it's 10 rate cuts and then it's you know, three rate cuts and then it's two rate cuts and then it's three.

Ryan:

And it just seems like that the market is pricing in a whole lot of different scenarios in a really short period of time. And that seems real. I mean, I'm not a fixed income portfolio manager, so maybe I'm just now paying attention to it more, but it seems like it's just unusual.

Gibson:

It is very unusual and I think a lot of that change in sentiment is somewhat related to the transparency and some of it is related to trying to get in front of the Fed.

Gibson:

We have this massive amount of transparency and information. We have a massive amount of transparency in terms of data. Everyone has an analog or a system or a structure around how they bring data together and analyze it and process it. So there is a much faster reaction mechanism in the market today than there has been in the past, and that's why you see this very quick reaction to oh, the data says the Fed needs to ease, we're going to get in front of the Fed more aggressively. At one point last year you had Fed funds trading 100 basis points, maybe 120 basis points, above the two-year treasury, which is basically the bond market, saying, hey, you're coming to us, right, we know you're behind, so get on with it, let's go right, and so that's. I think some of that kind of quick change in sentiment is related to this transparency and information and the environment that we're in, and that's not going to change.

Gibson:

That's going to be with us forever.

Ryan:

I think, added to that level of complexity. Now there's a new administration, that's you know, kind of a different set of policy tools than the old administration. And what everyone seems to be focused on now, as we're recording this on March 5th, is you know what the Trump administration is going to do with tariffs, in particular on Mexico, and Canada and in Europe and in China and, you know, around the world.

Ryan:

Is it going to be reciprocal tariffs? Is it going to be tariffs as a policy tool to bring about change in border security? There's a whole lot of different ways to think about this. So again, I guess my initial question for you is do you think that that filters through to the bond market, especially because some people think maybe it'll be inflationary, others would argue not, but that clearly would have an impact on rates. So kind of a long question for you. But, gibson, what do you think the impact of tariffs could be on rates and on the bond market?

Gibson:

I think historically, we could look back at the impact of tariffs as being somewhat stagflationary, in that you have a initial impulse of higher prices. The higher prices could be a restraint on consumption, which should lead to lower growth. I think that's the simple way of thinking about tariffs. The truth is it depends on the reaction mechanism, how long the term of the tariff is. There are a lot of inputs into it. The longer and the higher the tariff, the greater the risk to inflationary pressure, and the longer that that tariff is in place, the more sustainable that inflationary pressure will be. And the longer it's in place, the more restrictive it will be on consumption and potentially growth. So that's how the lens we're looking through it.

Gibson:

If we can actually say with any level of confidence that you know tariffs are here to stay, or they're going to be long duration, or they're going to be short duration, or they're just a negotiation tool, we don't know. We're learning as we go. We know Trump is the great negotiator, he prides himself on it and we heard last night in the state of the union address that he's serious. I think the market was somewhat skeptical, thought he was a lot of bravado and not a lot of execution, and now what we're realizing is he is in execution mode. He is trying to reset some of the imbalances that exist in our trade policy, really some of the imbalances that exist in general in Washington and in other areas and the market's a little uncomfortable with it and I understand that it's change.

Gibson:

Some of the change is going to be fantastic, some of it's probably not going to be. But markets like certainty, markets like to know what's going to play out and then to be able to forecast what that means. Right now we're kind of in a state of flux and trying to figure it out.

Ryan:

Yeah, even some of what in your explanation I thought was fantastic. But I'm listening to sort of what could occur. And if tariffs cause inflation to maybe ratchet up and that causes consumption to come down, you've got inflation going up, the economy getting weaker. What does the Fed do in that sort of environment?

Gibson:

Yeah, unfortunately, the Fed is in somewhat reactionary mode. They have to wait and see how it plays out too. I'm sure they have hundreds, if not thousands, of people building models, trying to forecast what this is all gonna mean, and the reality is, most model building exercises, particularly around economic growth projections and or inflation projections, fall short. Right, they always have nuance to them or there's too many inputs, and the variability is very, very high. The Fed's going to have to react to this, and we have to step back a little bit, though. I mean, markets get myopically focused on certain things at certain points in time, and it is largely influenced by what's on the TV or what's in the newspaper I guess today's terms, what's on the website, what's the consensus?

Ryan:

What's on Twitter. What's on X.

Gibson:

Whatever is driving attention, right, but when we step back and we think about what is playing out in really the global economy, where we can just focus on the domestic economy, we still have a lot of disinflationary pressures at play. You've got demographics, you've got technology implementation. I mean to think that big data and AI are not going to have a huge impact on the economy is somewhat foolish. This is a real deal in terms of impact.

Ryan:

And then we have a debt overhang.

Gibson:

I mean, we can't lose sight of the fact that we are a levered country and there are a lot of levered countries around the globe and that debt overhang is disinflationary. So when we think about those three kind of power themes that are going to be with us for probably two or three decades, maybe two at a minimum, and then we have the other side, which is this deglobalization or this reset that we're going through, I tend to think this side's a lot more powerful than just this.

Ryan:

And so in the short term.

Gibson:

Sure, little concern, little repricing In the long term. We're still in a disinflationary environment and a normalization of the inflation rate from the COVID period of time.

Ryan:

So maybe some short-term pain for long-term gain sort of scenario, some short-term pain for long-term gain sort of scenario. So, okay, amidst all this confusion and all the complicating factors, you are an active manager. The ETF industry is. It's really evolving in ways that maybe people wouldn't have predicted 10 years ago. When I look at the issuance of new funds over the last five years, it has surged in terms of the number of actively managed strategies, both on fixed income, which is a little bit before equities, but then equities as well. So you know you're again an active manager. How do you, as an active manager, look at some of the passive strategies and maybe what's your value add? How do you add value compared to just a passive approach?

Gibson:

Yeah, the passive strategy is obviously replicating the returns or trying to replicate the returns of the indices.

Gibson:

And when we look at the indices, there is a natural dysfunction that exists in the fixed income indices and that they are largely market cap indices.

Gibson:

So your companies that are issuing the most debt take up larger weighting positions within the index and as we go through the evolution or time, the size of the debt at the government level or the size of issuance at the securitized level, or mortgages or the growth in corporate issuance, really dictates kind of how that index evolves and changes.

Gibson:

If we think about that, what the kind of call it negative impacts or what the bad consequences of having a market cap index is that on the credit side, for example, your largest issuers could be companies that are deteriorating fundamentally, and so if you're a passive manager, you're getting greater exposure to a company that actually is not necessarily doing the right thing with their balance sheet and you're, in essence, getting in a deeper position in harm's way of things not going well, more leverage, more risk in the corporate structure, so on and so forth.

Gibson:

So that's a natural dysfunction of the construct of the indices, which translates right into the dysfunction of being a passive manager or being in a passive strategy, you're taking on risks that you don't necessarily want to be taking because of the construct of the index. Same thing at the federal level as the government issues more debt and or issues longer debt, the duration of the index extends or goes longer. As the duration of the index goes longer, you're taking more interest rate risk, and so that interest rate risk can have a big impact on your returns when I started in the business, the aggregate index was around four years, four and a quarter years.

Gibson:

Today it's six, six and a quarter years, and two years doesn't seem like a big difference, but basis points times. Duration equals percentage change in price. Moves are more sensitive. Right, you have bigger outcomes on the interest rate moves than you have in the past. So, the way that we approach it and the way we think about active management, we believe philosophically that markets move through cycles and there are times to take risk and times to shun risk or to avoid risk, be return-seeking when in opportunistic or be in preservation of capital focus when we're in defensive positioning. And the reason that we believe that is we've watched markets go through cycles for 30, 40, 50 years and we think portfolio positioning has to adapt as markets move through cycles. Part of the active management premise is that if you are going to actively manage a portfolio, first and foremost you have to be active on the duration side.

Gibson:

Again there are times to take duration risk, there are times to not take duration risk, and if you don't believe this, just look at the bond market over the last seven years.

Gibson:

It is a case study in why active management is important in terms of seeking return and preserving capital at different points in time. On the credit side, our process is very focused on security selection. We go into the entire credit markets, aaa to CCC, and we look for companies that are fundamentally de-levering, companies that are generating free cash flow, using the free cash flow to pay down debt, which benefits the bond holders and, if that benefit accretes, to the equity holders the management team's really doing their job.

Gibson:

They're doing a great work and that's where we find the best risk returns for our investors. So, on an active management basis, we want to go and own the companies that are going through that deleveraging process and we want to avoid the companies that are going the other way, the other direction. We call this the power of zero. There are companies that are large issuers in the credit markets that we will not own because the management teams are being reckless with their capital structures.

Ryan:

It always, I think, surprises people to hear that their passive fixed income fund is lending more money on the basis of the companies that borrowed more money. And that's the criteria, essentially. And it just doesn't really make sense to people when they hear that. And so you know, the idea that maybe you're going to pay attention to whether or not a company can repay that debt by some of the attributes that you mentioned, I think, just rings true to people. It just it seems more logical.

Gibson:

Yeah, very common sense. And I think in all of investing there's a real important premise that you have to step back and really think about things in the construct of what are you trying to achieve as an investor, and you can nail down what you're trying to achieve and then you can look at the market through a lens of how can I achieve this within the construct of what's available to me.

Gibson:

So, from our standpoint, we look at it and how can we generate the most amount of return with the least amount of risk for our investors, and how can we do it on a highly consistent basis so that they can sleep well at night in their fixed income allocation they don't have to worry about big swings in performance or big drawdowns.

Gibson:

They can basically use this as an anchor in their portfolio and that's served us very, very well. Going back to that philosophy of markets move through cycles, there's time to be optimistic and there's times to be defensive and in a neutral position. You let that security selection and security avoidance really be a key driver of your alpha or your return generation.

Ryan:

What about from maybe a higher level, from a fixed income sector perspective? What's your focus on kind of rotating in and out of sectors? Is that another way that you're seeking to add value, or is that less important?

Gibson:

Well, our sector allocation is really a residual of the individual securities that we're buying is really a residual of the individual securities that we're buying. And so sometimes there are periods where we're finding a lot of companies that are focused on delevering, that are all in the same sector, and so that will create a little sector bias in terms of our allocation. But again, if you're finding these companies that are committed to delevering, that are generating free cash flow, have the ability to deliver but most importantly, the delivering accretes to the equity holder, that can create some sector exposure. But we also look at it from a top-down basis, on a sector basis, in terms of thinking about where the tailwinds are for sectors or where the headwinds are for sectors. A couple examples Coming out of COVID.

Gibson:

The auto sector was in a perfect position to take advantage of some of the dislocations that were created by COVID. They had pricing power. They weren't able to build up inventories during COVID so, as things normalized, people needed to buy cars, they needed to replace cars, pricing was high, so margins went much higher in the automotive sector and they had this just wonderful tailwind. We had significant overweights to exposure to the auto sector General Motors, ford, for example, fast forward a few years, a year later, what happens? We have the war in Ukraine, we have the kind of outbreak in the Middle East.

Gibson:

Defense companies are really in focus. We see a trend that there's going to be massive defense spending going forward because of geopolitical risk and what's happening around the globe. Go through, analyze the individual companies, find companies that are focused on de-levering and therefore put them in the portfolio and have an overweight to defense, because a nice tailwind. Now, as we're doing that, what's happened with the automotive sector? Now they're facing headwinds. Right. Things have normalized, inventories have increased, used car pricing's coming down, so sell autos, buy defense. Now that's just an example of one of the things we do. Most of the return generation is gonna be focused on finding those individual companies that are doing the right thing with their capital structure, that are de-laboring. That benefits the bondholders and thus our investors.

Ryan:

Yeah, in Smith Capital. You have done a tremendous job in adding value over time with that process. So, gibson, when you're not furiously analyzing credits of companies, what charges your battery? What do you enjoy doing outside of the office?

Gibson:

Well, I've got a great wife. I'm really fortunate. I've almost 27 years married and I've been with her for 31 years. I spent an enormous amount of time with her and really have a great relationship there. I'm very blessed on that front.

Ryan:

I am an avid golfer.

Gibson:

I can't play enough golf. I love it. I could play every day. It's just a passion of mine. My team kind of laughs at me at times. There's times where the markets are really intense and things are really wound up and I will leave the office after the market's closed and just go walk 18 by myself and say wow you enjoy that?

Ryan:

Yes, it's my reset. It's a chance to kind of reconnect.

Gibson:

Those are my two real passion areas. I'm an avid reader, you know, always reading something. I spend a lot of time reading about culture, about leadership, about teams. I spend a lot of time, obviously, focusing on books that are about markets and spending a lot of time reading about China and a lot of time reading about globalization and deglobalization. I just started a book by, I think, paul Samuelson on inflation that went back and looked at the inflationary periods of the 70s and 80s and really want to just stay attuned on what's happening in markets, want to stay attuned on kind of the personal development side and then really want to be just the best leader I can possibly be for my team.

Ryan:

Yeah, that's phenomenal. Is it true that you can hit a ball, a golf ball, farther at elevation in a place like Denver? People say that. I don't know if I experienced that but they say the elevation matters.

Gibson:

I think it might be the fact that there's not a lot of humidity in Colorado, so it does go a little further. You don't get that drag on the ball.

Ryan:

But who knows, who knows?

Gibson:

One or the other right. It's fun when I have people come out to Colorado. They say so do I have to club down?

Ryan:

And I'm like I don't know.

Gibson:

Is there a way that in Colorado it goes straighter than more left or right? Straighter and longer would be good.

Ryan:

Straighter and longer would be very good. Well, that's phenomenal, you anticipated. My final question for you is usually what books are you reading? And you already told me that, so I'm going to rephrase it a little bit Are there any books that you would recommend viewers of the ROI podcast, that you haven't read yet, that are on your reading list, that you're considering reading?

Gibson:

Oh, boy, I didn't come prepared to answer that question, but I can send you a picture. I have a process that when I come across a book whether it's recommended, or I've read about it or I've seen a review I go to Amazon immediately, I order it and it gets delivered and it goes into a pile in my office and then. I selectively work through that pile of books, I would again. I'll send you a picture. It's almost embarrassing.

Gibson:

I think I'm almost four feet high on this pile right now there's a lot of stuff I want to read, but with my team, what I do every year is, when I come across a book that has really impacted me whether it's on a personal development side or a leadership or a culture or team side I deliver it to them every year around Christmas, and so they get a book from me every December and then, if I find something mid-year, I bring it and it's kind of required reading for the team.

Gibson:

So we get everyone on the same page and yeah walking in the same way and it's really a lot of fun. It's been a great process since we launched the firm. You know, one of the one of the areas that we're focused on right now is a lot of the global trade, and I'm really using that as a focus, and we're having to go back and reread some things about. You know how deficits work and how they normalize and all of that, so that's been a lot of fun. But the one book that really, really resonated with me last year was Unreasonable Hospitality.

Ryan:

Oh, I just read that book. Oh well then, but go ahead, continue to talk about it, because it's a fantastic book.

Gibson:

Continue to talk about it because it's a fantastic book. You know, danny, danny Meyer's protege, you know basically running the number one restaurant in the world and all the lessons of taking over and starting restaurants and kind of the impact that you can have on individuals and, as the title describes, an unreasonable hospitality.

Gibson:

they are a lot of the lessons in the restaurant business are very applicable in every business yeah, isn't that amazing it's touching people, it's making people feel special, it's going the extra, you know the extra mile to really help people's lives. You know, improve and the the element of service, which is one of our core values, is really critical. And so when I read this book and I highlight and I take notes inside the book it was really fun to apply our values and our process, our vision, to what he was writing about. I think it's a very impactful book. I think everyone should read it. I tell my team this all the time. It's very hard to execute on.

Gibson:

You have to be very focused, you have to be very organized, you have to be very organized, you have to be very disciplined and it's got to come from your heart. Yeah, you got to do it for the right reason, not just to kind of give to get. It has to be the service component, the element of you want to connect with people for the right reason.

Ryan:

Yeah, isn't that amazing yeah. Reading that book it made me think, man, I would really love to run a restaurant, but there's just no way I could ever run a restaurant, you know that. But the ability to connect with people and to show hospitality and to make them feel seen and make them feel just this experience, I think, crosses over to a lot of different industries crosses over to a lot of different industries.

Gibson:

It does, and one of the elements in the book that I think is so important you hear this statement that you know clients first, clients first, clients first, and that's absolutely true, right, If you're going to run a business, you don't have a business unless you have happy clients right and satisfied clients and you're delivering something to them that matters. But you also have to focus on your team and that team that is there to deliver to those clients. And if you're not focusing there and making sure that's a high priority, making sure they feel the connection, they feel what's important, they're directed with what's important, you're invariably going to let your clients down. And so that was the real lesson in the book that really grabbed me was get your team right and get your team focused in the same mindset of service and care and connection and make that kind of your mantra.

Ryan:

Yeah.

Gibson:

If you make that your mantra, everything's easier. Yeah, and that goes for investing too. You think about. You know, this is all about service, right? No, it's actually not. I mean, this is about how you show up, it's about how you engage, it's about your responsibility, your accountability and in the asset management business, as you know, it's critical that everyone does their job and does their job really really well to be successful. So yeah the book's got lessons.

Ryan:

It does.

Gibson:

And it's just second and third derivative lessons that we play off of all the time. It's a lot of fun, all right.

Ryan:

Well, gibson, I've really enjoyed this conversation, enjoyed getting to know you. Looking at the time, and it has flown by. We're at about 33 minutes now, so we'll end things there, but hopefully we can have you on at some point in the future to chat a little bit more. But thanks for coming on. Thank you, I really like that. Thank you for having me. Thanks for coming on. Thank you, I really liked that. Thank you for having me Appreciate it All right, and thanks to all of you who have joined us as well for this episode of the First Trust ROI podcast. We will see you next time you.

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Ryan O. Issakainen, CFA | Senior Vice President | ETF Strategist

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