Ep. 55: How the Nasdaq bounced 5% despite Russian troops storming Kyiv

Hello and welcome. This is episode 55. This is not Anthony Cheung. This is Piers Cowan. Anthony, I don't know, has managed to decide to take the week off work just as the whole world goes into chaos. But instead of Anthony Cheung, for all you Anthony Cheung fans, unfortunately he's not here. But I've got better than that because Joining me for the first ever time on the podcast is a certain Mr. William De Lucy, my partner in crime at Amplify. How you doing, Will?

Good, thanks, Piers. Yeah, sorry I'm not Anthony, but actually I was just looking back. Every single time a major event has happened, from the virus to the vaccines to Trump to Brexit, you name it, it's only ever happened when Anthony's off the desk. You could say that's a coincidence.

Well, you know what, I was thinking about that this morning, that very thing. I don't think it is a coincidence. I think he is—

he's up to it—

stabilizing. Either he's responsible. Yes, you're right. I was thinking more he might be the stabilizing equilibrium of the planet, and once he gets back, steps out, it all kind of just implodes.

I think the opposite. I think he's out there causing trouble.

Now look, why, why, why haven't you been on the pod? What's been going on? Some people have even been speculating that you don't exist.

Wow. Um, I've been, I've been working. Um, actually, I know we'll talk about that, uh, a bit, uh, later in this podcast, you know, just what a, what a journey it's been since we started trading together 20 years ago. But yeah, it's been super busy from, from the Amplify side and, uh, not Notwithstanding the amount of events, have you seen the team or all the finance accelerators going out this week?

Yeah, well, I wanted to actually just, just touch on that because it's been an awesome response from the community ever since we kind of made that key announcement. I think it was a couple of weeks back with our Morgan Stanley sponsorship and really wanting to, you know, deliver on our mission of democratizing opportunities in finance, and Morgan Stanley coming on board being such a, such a powerful endorsement of that. And actually since then we've had just a phenomenal amount of people that have come on to AmplifyMe.com and signed up for our free finance accelerator sim. We've been doing loads of simulations. I wanted to give a few shoutouts actually, um, just in terms of different university societies that have been getting involved. So here in the UK we've had The Durham University Asian Investment Society. We've got BASE, formerly known as CAS, their Finance and Banking Society. We've got Durham again, Fintech Society. We've got Trinity over in Ireland, their Entrepreneurship Society. We've got WUTIS, which is actually in Austria, their Trading and Investment Society. We've got Queen's Belfast, Warwick, Coventry, And then we've got Penn State Asset Management Group, we've got Duke Rotman up in Canada, Commerce Trading Group, Toronto Student Investment Council, so many, it's been fantastic. And then not just universities getting involved, individuals. So just to make it clear, you don't need to be part of a society event to do this sim, just get on our website, anyone, and come and do it. I think we've had people from 35 different countries just in the last week, from Algeria to Indonesia, Chile, Myanmar, Uzbekistan, Pakistan, you name it. So I just wanted to say a big thank you to the community and just encourage those that haven't done it yet to get involved. It really is a potential pathway to launching your career and just finding out more about the industry and actually what the roles in the industry are all about.

So it's definitely become the benchmark experience, I think, to have for anyone now looking to apply to a finance role. I was speaking to a number of recruiters this morning and their response is like, why wouldn't someone do it? If they are interested in working for this company or working in this area, then it's gonna be quite hard to justify not doing it, which is great. We wanted to become the CFA of practical training rather than theoretical training. Training. And I think, um, that brand is getting out there. So yeah, good work, team.

Cool. Well, look, we'll talk a bit more about Amplify, uh, you know, now that we've got you on the pod finally. Um, we thought we'd just have a quick chat later on in, in this episode. We'll talk a bit about Amplify in terms of the business and our journey together, kind of building it, and some of the ups and the downs, um, along the way. So just a bit of a sort of entrepreneurial element to this pod, you know, from our own experience. So we thought that might be interesting for the listeners. But, um, but look, let's kind of get stuck into it. What we're going to focus on today— I mean, obviously there's been one story that's dominated the whole planet, so we'll talk obviously about Ukraine, Russia. But I think what we wanted to do was add a slightly different angle. I mean, you're all reading the news, you know, you don't need us to be catching you up on the invasion and the details of it. I mean, this is, this is there for everyone. You've been reading up on this. What we wanted to just delve into is markets and, you know, market reactions. And particularly I wanted to talk about, you know, what's happened. Like, the NASDAQ right now as I speak has just broken up above yesterday's high. And by the way, that puts it back up— it's almost testing the high of the week that was set back on Monday. Pre-invasion. And look, there's been some quite extraordinary market reversals, uh, going into the US close last night, and those reversals just being added to again this morning. And so I really wanted to delve into with you, Will, what, what the hell is going on? I mean, some of these market reactions are crazy. But look, we'll get to that in a second. What I wanted to do was just say there is other stuff happening As hard as that may be to believe, there is other stuff going on. So just a couple of— I'm just going to run through in Anthony Cheung style a couple of other news headlines that have grabbed my attention. You might have heard of a guy called Donald Trump. Well, he's back, and he's just launched his Truth Media and Tech Group. So Truth Social is the social media element of his new offering. And you're going to be able to post truths. So rather than tweets, there'll be truths. And there'll be a truth feed. I'm not making this up. There'll be a truth feed. And basically, they've ripped off Twitter in terms of a design and a functionality point of view. Obviously, Twitter was Trump's main kind of communication channel. He had 89 million followers, actually, before he then got canceled. By Twitter. But he's launched this new media— but it's not just social media, it's a media and tech group. And he launched his kind of investment pack, and they've got some quite extraordinary growth trajectories. Well, we've been kind of working on this kind of stuff with Amplify, these nice sort of forecasted hockey stick charts with growth just going to the planet— sorry, going off the planet. He's basically, even though the focus will be on this Truth Social to start with, actually he's launching a streaming service. He wants to take on Netflix, Disney, you know, as if that space isn't saturated enough already. He thinks he's going to be able to get 50 million paying subscribers by 2026, and apparently his business will be generating $3.7 billion by 2026. So some punchy numbers coming out of Trump's camp.

We'll see if this is the kind of I think there was something similar being forecast with the new British TV channel, right? I forget the name for it. And that he would do well to look at the reality of what's happened there. I think he would.

I mean, it's a space that, well, I mean, it's incredibly saturated, as I said. So I'm not quite sure what angle he's going to bring that's going to maybe—

Truth.

Well, truth. Trump's truth. Um, anyway, that's Trump. Another one that was quite interesting, Elon Musk. Haven't heard from him for a while, but did you see this story this morning? Uh, basically there's a new SEC investigation just opened up on Musk. Um, do you remember that back in, um, I can't remember that, a couple of months back when Tesla was smashing up above $1,000 and becoming one of the biggest companies on the planet. And I was talking with that on the pod about the problem that Musk has is he can't get out of his— he can't liquidate his holding because as soon as he starts selling shares, well, that'll be a massively negative signal and the share price will collapse. And then that weekend he tweeted a poll. He said, right, to my Twitter fans, I remember, should I sell 10% of my stake, yes or no? And I will do whatever the result of this poll says. Do you remember that tweet?

Yeah, I do very well.

The poll was in favor of him selling, and then he did go ahead and started to sell 10%. Well, that poll, when he released that poll on Twitter on Monday morning, Tesla share price collapsed. It dropped like 5-10%. Okay. The SEC investigation is now looking at his brother, Kimbal Musk.

Do you know what? Hell of a name. What's Kim's been up to?

He's been up to— well, he sold $108 million worth of shares, Tesla shares, the day before Musk tweeted that poll. So the SEC have gone, oh, oh yeah, all right, that looks a bit dodge, um, we might just have a little look into that.

Talk about helping your brother out.

Wow, exactly. So, uh, that was quite amusing. We'll see what— I don't think Musk really gives a shit. But quite an interesting story. On the economic front, and I know it's hard to get past any news on Russia at the moment, but on the neck— something happened yesterday, the jobless claims numbers out of the US. Just kind of get back to that whole thing about what's going on economically. Well, their jobless claims number came in at a 52-year low. Again indicating that the labour market is continuing to show signs of real strength. We'll talk a bit in a minute actually maybe about inflation, obviously pre-Russia-Ukraine invasion, obviously the talk on the street was about the Fed hiking and about the inflation problem we've got, and obviously we've had a correction lower, you know, risk-off episode in January as a result of these rate hike fears and we'll talk a bit about commodity pricing and how these commodity prices have spiked high because of this Russia invasion and what does that mean for the Fed and all the rest of it. But certainly the data showed yesterday that labor market conditions continue to tighten and it all plays into that whole story around inflation and is it sustainable and how many hikes will the Fed have to do this year and all the rest of it. But look, that's some of the stories that caught my eye, although you'll be very much forgiven if you didn't see any of that because the media is just dominated by this one.

It is. It shows though what, what unique times we are living in. There are so many major, and I mean major, market themes all happening at the same time. Yeah. And one of the things I'm most interested in, and hopefully we'll talk about it, is How can this, if you like, centrifuge of activity, what's going to spin out of it? What type of random events will spin out of it? I actually think the biggest event will be an unknown. They normally are the biggest events, something you don't even know that you don't know, but I'm finding it hard to keep on top of everything we do know now. I mean, the Fed, do they hike 5 times or 9 times? I mean, that's major, but even that is a backdrop at the moment.

I like your centrifuge analogy.

Yeah.

And actually, you're, you're so right though, you know, history tells us that when big, when a big event, when a big known event happens, I mean, look, the least surprising thing is Russia have invaded Ukraine, right? In the— there's been a buildup of troops on the border for, for weeks, months, right? So anyway, the invasions happen, but it's almost like, well, it's like the knock-on effects of these known events then trigger unintended consequences, unintended consequences, unintended reactions, reprisals, and events that you cannot predict, and no model can.

And, and I think what's interesting about this, if you like, chaos-type theory or theory of randomness, is an event like Ukraine to me just turns up the dial of randomization. Where the possibility for more random unknown events is now much, much higher, um, than it was 2 months ago.

So I mean, challenging times for traders. I'm going to reel off now some of the market reactions in the last 24 hours, and I want you to explain it to me.

Oh, cheers.

Okay, so here's— here goes, right? Because obviously, if you're re— if all you do is read the press, then, then clearly it's like, oh my God, it's World War III. Okay, and so you automatically would assume, if you're not looking at any charts or you're not looking at markets particularly closely, you're automatically assuming, well, markets are just— it's just going to be absolute bloodbath. And it was for a few hours, but actually the market rebound's been extraordinary. So here goes, I'm going to talk, talk you through some of them. Okay, so let's start with crude oil. So crude oil, I'm just looking at my charts to get this right because I read the numbers and I'm like, what is that? What is that actually possible? So going— if I start, obviously yesterday was when the invasion kicked off, so oil was trading around about $93. I'm talking WTI crude here, $93. It rallied and topped out at $100.50. Okay, that was by mid-morning, about midday UK time. Okay, so went from 93 to over 100. By the time you get to 7:30 PM, it's trading below 92. So make new lows for the day having spiked above 100, right? That's oil. Um, gold— staying on the commodity theme— gold started off, and I know you were trading some gold, so I'm going to get your, your, your insights into what that felt like.

Painful.

But gold was trading around— let's— I'm going to round these numbers up, but let's say $1,910. Then the invasion kicked off and it traded up and hit a high at $1,976. But then by the time you got to 7:30, was trading new lows for the day, down at $1,878. Um, that's gold. NASDAQ— this is perhaps one of my favorites— the NASDAQ from the open on Wednesday in, in, in the US, the market open, it was trading at 14,000. It then bottomed out 1,000 points lower, um, at 7 AM on Thursday. Okay, that's a 7% drop. By the end of the US session yesterday, it rallied and recovered the entire amount and was trading back on the levels we were trading. That's a 1,000-point sell-off and then a 1,000-point rally. That's in one day. That's the biggest intraday swing since March 2020 when COVID hit. Uh, other stuff— the MOEX, well, you know, MOEX, that's the Russian index, that dropped 45% yesterday. It's now rallying. The ruble hit an all-time ever low, and I'm watching it right now on my screen, and it's rallying back, and it's recovered a good 75% of yesterday.

And how much has the MOEX recovered?

I'm just trying to get— that's a good question. It is recovering, but not as— not quite like the others. Well, no, it's about 50%. Let's recover about 50% of yesterday's sell-off. So look, and I can go on here, there's so many examples of this, but what all I want to ask, what the hell? How do you explain this? Yeah, what's going on?

I, I mean, this is, this is, this is fantastically interesting. What a roller coaster. Um, and I think it's important to any sort of new investors out there, or people who haven't been involved in markets for long, asset prices are impacted by a confluence of factors. So many, many things can impact the price of an asset, many different things. Let's look at oil and gold as an example. And you're right, I was trading gold, and in fact, I, um, I had some decent positions in on gold earlier on in the week. And so on Thursday morning Yeah, it was looking amazing. I obviously didn't actually know that that would be the date of the actual invasion, but I believed that this wasn't a coincidence about the troops. I thought more would happen, so I positioned myself accordingly. So I was right. And then, yeah, on Thursday morning, the position was great. I mean, fantastic. And I mean, obviously, the training people for well over a decade in doing this, I scaled out some of my risk even though I was sure that the price of gold would move higher. It's just like a natural habit that I always force myself to do just by learning the hard way when we're not doing it during market volatility. Like, it's a given, right? You take off some of your risk, some of your risk when things are going well. So fortunately I did, um, because then their position ended up, yeah, way below the $1,900 handle. Um, and had I not taken off some of that risk, it would have— would would have been very, very frustrating indeed. Why did gold move higher and then lower so aggressively? And the same, same with oil. Well, a few things. So obviously oil and gold were moving higher based on the invasion. Gold for different reasons. Gold as a flight to quality, so safe haven, people moving out of risk assets and into safe haven assets, assets like gold or US bonds. Oil is normally a risk asset. So actually, if this wasn't Russia, you might find oil moved lower if, uh, if this was a different part of the world. But it is Russia, very oil energy dependent. So oil moved higher because of future fears of supply constraints, which Europe hasn't actually acted on at the moment. And so then we get to the second move. So the reversal of those moves, again, many, many, so many things going on. For gold, actually, if you look at the US dollar yesterday, the way that the US dollar moved was rampant. It reminded me, actually, Piers, I don't know if you remember trading currencies during the global financial crisis in 2009. Just before the global financial crisis, was it the pound? It was like $2.1 to the pound, wasn't it? Something like that.

It was basically free to go to New York.

Going to New York, you're like, yeah, I'll stay in that hotel for sure. Um, and then the global financial crisis, that the biggest flight to quality move was actually people selling currency, selling any type of assets they're holding that weren't in dollars and buying dollar-denominated assets, and particularly US Treasuries. So the demand for the dollar going higher, and that dollar strength then weighing on commodity markets. So gold specifically has an inverse relationship to the US dollar. Um, then obviously in oil you get the news that actually the Europeans are putting all these huge, huge sanctions on Russia, ah, but not including oil and gas, because that's just, uh, wait a minute. Um, and so that then further explains the move lower in oil. It is absolutely fascinating, but I think What these type of market conditions show is you never know. You just never know what's going on and what could happen. And so you should always trade and invest in the way that you don't know, and you don't know what you don't know. And so it's easy for me now to explain why gold moved lower because I, you know, you can look at what happened. But, um, certainly at the time I can imagine a lot of people saying, why is gold selling off when there are rockets being fired in Kyiv right now. Um, and that can get— if you let that lack of, um, appreciation of the randomness of markets and, and, and the, the fluidity of factors that can impact things, the most dangerous thing is to then keep on trading and carry on trading your view. Then you see more negative news about Russia, and so you buy more gold futures without understanding it's actually the dollar strength that, that's, um, negating the flight to quality move. Fascinating times. Equities, um, again, big sell-off because of the lead-up to what sanctions will be announced. Actually, because it wasn't too dissimilar, um, to about a week ago, right? When then, when the sanctions are announced, market goes, ah, yeah, okay, so the world really is going to leave Ukraine, um, to this, uh, and, and we might be okay. So I think, I think they're the, the reactions here, really difficult to trade. And this is why we need Anthony Cheung never to take a holiday ever again. Not only so these market events don't happen, because I'm fully convinced he's responsible for all of them, um, but also, you know, during these type of market activity, you need an on-the-desk and, and live streaming the whole time, because that— I mean, that's what he's so good at. There's so much going on at all times, it's almost impossible for people to trade this if they don't have access to everything that they need to know the second they need to know it. Um, I think there's two time frames here. There's either the ultra short time frame where you're— I'm talking minutes that you're in a trade for, because then the world's going to change again and then again. So yeah, just trade that view for ultra short. Or you've got a long, long, long time frame of years What this type of market doesn't allow is, I'm going to hold this position for 2 or 3 days, because guess what? It changes on a sixpence, and then it changes again, and then it changes again, and you can get topped and tailed. So yeah, that would be my explanation and then advice on the result of that. I mean, I love it. I love volatility. As you know, Piers, my trading style has always been kind of like keep in a glass container and then break when stuff happens. Um, so, so I, I like it. Um, but, but yeah, if you try and get attached to a view, good luck, because, um, it's going to change. And if you don't change with it, then it can be—

yeah, I think that change, that, that, that reversal point yesterday, I think, I think certainly came, I would say, out of the US. And I think it was traders there just— and once the I guess the fresh set of sanctions that were announced were like, oh, okay, well, they could have been harsher, but they're not. And as you said, perhaps that was the signal that maybe this isn't going to be a full-blown, you know, war.

Yeah, I agree. But don't you find it interesting about markets now? So they have held back on one or two sanctions, but it doesn't mean that they're not going to be deployed.

Yeah. Right.

So I love the emotions of these markets now. What you're seeing now is hope and optimism again, that everything's going to be fine. And it might be, and touch wood, things don't escalate. But really, things aren't going to carry on from here. I mean, if you look at The Economist today, it's just been produced, talks about Putin's ambitions. You know, Ukraine is the start of actually reimposing influence over the bloc. And then all of the factors we've talked about, black swans. So how are China going to respond to this? What's going to happen? You know, one mistake. I think the markets, when things like this are happening, they're so behavioral, and you've got to go with— I disagree with this recent rally. I, I think it's more likely than not that actually there'll be a further progression here, at least in, you know, the medium term is my view. Um, but I can't deploy that view on the markets now. I can't— you can't step in, in the way of the the behavioral swing. So it's super interesting.

Yeah, I think people are thinking, right, medium term, like right now after the banks. I think that the reason for the banks perhaps is that idea that medium— there might be some medium-term disruption to a few sectors that are specifically exposed, but that this won't become a broader disaster. And so, and actually some of the moves yesterday, um, in, in the NASDAQ particularly, um, it's being reported from some of the desks on Wall Street that a lot of the, the rebound volume was actually people who had short positions, who have had short positions since the start of the year, especially on like the spec tech stuff. Yeah, because inflation and interest rates and so A lot of these stocks have been absolutely hammered. And if you think about things like the ARK Investment sort of flagship innovation ETF with Cathie Wood, it's just been destroyed, her fund, right? But now apparently a lot of its people have now— they're booking profit on their shorts. They're using this crisis as that final leg to the downside to say, you know what, I'm going to put profit and I'm going to buy. And their idea is that actually this Ukraine-Russia situation will be a medium-term disruption to certain sectors and won't become the broader disaster. But that's the— but as you say, obviously, whilst that might be your view right now, this moment, this second, obviously you need to monitor this situation incredibly closely. And if, if it escalates— and like, if it escalates, it's hard to know. I mean, I think it looks like Russia's plan that they're apparently in the northern part of Kyiv now, and they're going for the capital, and it looks like they're looking to probably probably go after the Ukrainian president specifically and kind of take him out, as it were, or capture him or whatever, and just kind of take over the control of the country without necessarily it being a full-blown war across the entire country. They've obviously disabled the airports and, and fine, but obviously we need to monitor this. Can I—

I think, I think just before you move on, I think your point there is really interesting for other people to look at it from other market players' point of view. I think it's so— yeah, we're saying, oh, this is interesting, look at this bounce. But actually, it would make sense if I was short a ton of spec tech. Yesterday would have been a great opportunity to, to take some off and prudent to do so. And look what moves markets, what created the bounce— more buyers than sellers. And so if you've got a lot of funds involved in that, then, then it makes sense. But I think what can be interesting for more novice investors is, oh look, these people who are short since the start of 2022 Sounds great, sounds easy. Don't get me wrong, some of them might have been short from the start of 2021, right? And then yesterday they might have been like, thank God for that. Okay, finally get out of this ulcer, ulcer-making stressful short position.

Yeah, so I mean, some of these spec techs, they were up 15-20% yesterday. Up 15-20%. Um, quite extraordinary. But I wanted to, just before we move away from the whole Russia thing. I do want to talk about SWIFT, just about what are future— if the West want to ratchet the pressure up and if they want to force more sanctions, what are they? And I want to talk about SWIFT specifically, because if you're sat there thinking, right, well, fine, we bounced, is the bounce sustainable or not? What is going to result in the NASDAQ collapsing and making new lows for the year? What's going to result What would push gold above $2,000? You know what, I think they're—

so I think there are two different, um, answers to that question. What would cause the NASDAQ to really drop? Don't forget the Fed is still out there.

Oh yeah.

So to me, I think if there is a, uh, prevention of imports of oil and gas from Russia, the price of oil and gas will go through the roof, adding to already —four-decade record inflation numbers—how a central bank reacts to that. And any misstep by a central bank here, I think that's a big factor that, you know, it's not just Ukraine, it's actually the response to this event. Remember the unintended consequences and responses. So I think that type of activity might impact equities, but equally hiking rates too fast would also weigh on gold, for example. So, you know, you've got to be aware of this. What's the driving factor to understand each asset class? For gold to move, for me, and I, you know, don't want to be too pessimistic here, um, but if I was China and I had in the back of my head that Taiwan, uh, actually was a bit similar to Ukraine and Russia, um, and the world is focused on Europe at the moment, then would it be a good time to make moves on the Taiwanese peninsula Um, do you remember in the papers, you know, Taiwan is definitely in a precarious position here. And if Putin gets away with this, by the way, and NATO shows that really, okay, let's just contain it to Ukraine, you know, um, why not, why not Taiwan? And then I think the big moves, then you've got to look at semiconductors, right? Taiwan produces the world's majority of semiconductors. And then you've got to look at those, uh, companies producing semiconductors and then also companies relying on the import of semiconductors. Car companies now, I mean, it's, it's, it's essential. Anything to do with semiconductors, which is pretty much most electronics.

Um, and just another stat to put it in perspective, um, because if you think the— so from the US's point of view, the Ukraine is not an important, um, sort of trade partner. They're actually the 67th biggest trade partner of of the US, Ukraine. Okay, Taiwan is the 9th biggest, and obviously, as you say, a semiconductor superpower. And so that would be— globally would certainly have a much larger economic impact.

But, but more than that, sorry, more than that is the fact that the US has said to Taiwan— and it's not right in— but the US has said to Taiwan, don't worry, we've got your back. Yeah. So again, what does that lead to then if you have, uh, Russia, China, uh, and others? And then, you know, then it becomes a little bit, um, worldworry, I think. And that would certainly change the value of assets that we're looking at.

But in terms of inflation then, because you're right, um, I mean, just a quick reminder for people about commodities and, and, and just where Russia sits on the kind of global global commodity production scale because they're a very important player. So a few stats, and all these commodities I'm going to mention have— did initially spike through the roof yesterday. They've reversed back, most of them. But wheat, for example, 29% of global exports comes from Russia and Ukraine. Sunflower oil— here's one for you— sunflower oil, 80% of global are from Russia and Ukraine. So your cooking may well get more expensive, I'm afraid. They're the top 4— Ukraine's the top in the top 4 corn producers. Natural gas, we know about. So Russia supplies 40% of Europe's natural gas. Palladium, Russia produces 40% of global production. Diamonds, I didn't actually realize, global produces— sorry, Russia produces 30% of the global diamond production. Titanium sits at 15% of global mining, comes out of Russia. Fertilizers, a really big one, 13% of global production from Russia. Gold, 10% coming out of Russia. And so the list is massive, right? But as you say, that whole— the economic impact globally and the tightening of monetary policy Obviously, if this leads— if this is a sustained thing that leads to commodity prices staying higher for longer, then clearly that's going to just exacerbate that particular issue. But I wanted to talk about SWIFT. I know I keep saying it, and I want to come back to just very briefly touch on it, because it is my opinion that if the West use the SWIFT card on the sanctions, if they slap the SWIFT card onto the sanction table, then I do think that changes things. And that's just because— well, what is SWIFT? Just for those who aren't sure, it's a financial messaging service. But the Ukraine want us to kind of use the SWIFT card now, but the West are just, yeah, we're not quite sure we want to go there yet. But basically allows quick transactions, financial transactions, that is. It's used by 11,000 financial institutions in over 200 countries. Basically banning Russia from the use of SWIFT would delay the payments of— payments that Russia get for exports of oil and gas. Now, the SWIFT card was used on Iran in 2012, and after that, immediately Iran lost almost half of its oil export revenue and 30% of its foreign trade. Just vanished overnight because they weren't able to process the transactions anymore. So because Russia play on this global commodity exporting plane, and that's how they get paid, then banning them from SWIFT would have a very quick and immediate and a very large impact. And obviously then you play out the what-ifs, you know, what is— how does Putin react to that? Obviously, the Russians have been saying that if you go anywhere near SWIFT, then you can forget any gas coming to Europe, by the way. So that's why obviously the West are very, at the moment, reluctant to play that card. And I think that explains some of the market react— the rebounds yesterday. It's like, okay, phew, they haven't used the SWIFT card. So actually, fine, maybe this isn't going to be quite the global event that people were panicking about and maybe the media were portraying. This doesn't belittle at all what's happening in Ukraine, I want to add. Obviously, what's going on there from a humanitarian point of view is desperately bad. And but from a, I guess, from a global media point of view, you know, clearly the front pages and the back pages and all the pages in between have been plastered full of incredibly shocking scenes. But yeah, so keep an eye out. I would say for those in markets and trading and so on, just keep an eye out for the SWIFT sanction. And should that get deployed at any point, then I think we may well have another change in direction on markets. But for now, as I speak, NASDAQ futures smashing up through new highs for the day. Uh, gold is new lows for the day right now. I as I'm talking, oil is trading down. They're about to test yesterday's low just below the $92 handle on WTI. Quite extraordinary scenes. Look, let's move on. I know it's hard to, but let's move away from the Russia thing. And I thought maybe we'd finish the kind of last part of the pod by talking a bit about, well, ourselves. Which is never a good idea. But, um, yeah, I thought people might be interested. There's lots of students out there, I think, in, in this day and age, perhaps more so when we were graduating. I think the pathway of starting your own company or, you know, trying to scratch that entrepreneurial itch, I think maybe these days that's there, there's, that's more common. Maybe it's probably fair to say that when when we were graduating, where I think we were in that era where you tread the conventional career path route, and you're applying for banks and all the rest of it. But I thought it might be interesting for us to discuss our experiences with starting Amplify and trying to build a company from zero and the kind of trials and tribulations along the way. We've had some great news with Morgan Stanley, I guess we announce the highlights, but what you don't often hear about in the media is, whilst there might be some incredibly successful businesses, there's some desperate setbacks along the way and some incredibly difficult sort of periods and decisions and events happen. So I don't know where we want to start with this because it's obviously such a big topic, but How have you felt about Amplify? I wish I chose a different business partner.

Other than that, no, I just think it's been amazing. Yes to all of the challenges and the uncertainties, sometimes the, you know, the sick feeling in the stomach when you're taking risk and, you know, setting up your own endeavor is always risky. I think there's definitely a positive feedback loop. The longer you're around, the more people that you know, the more connections that you make. So I think much like someone starting out in their career, actually it's relatively similar in terms of the trajectory, whereby the first few years, you know, you're getting known. Who are you? Why do you do this, what you do? And you have to really prove yourself and then do a good job, whatever your business, whatever service it is. You need to, and hopefully continue to, blow away expectations to get people going, wow, about whatever it is that you're delivering. Now it's actually much easier. I mean, our biggest client's Citadel, you know, and for our quant training simulations. And, you know, they're obviously known as the world leader in quantitative trading. So now if I wanted to talk to any business school, any firm, any hedge fund, any hedge fund out there, then you start with, oh well, Citadel do this, and then it's immediate justification of where you are. So there becomes a snowball effect over time. But you know, Piers, it's 13 years now. It's been a long time. And so the snowball effect is one thing that I'd encourage any entrepreneurs to try and create as soon as possible, to start working, even if it means you're giving clients something for free, if it means that they can talk about it and then you get to make relationships, then that's a really important place to start. And don't be too stubborn about it. Just do what they want, if you can. Then the next thing really is about adaptability. So I mean, we've changed so many times, Piers, our focus, our area, our pitch. I mean, one of the reasons for going into the whole quant sim and working more on the programming and the coding side of everything that we're doing is that's where many roles in finance are going. So we need to be there. One of the reasons why we do, you know, we moved our simulations online immediately, well, actually just before COVID We're always trying to be trending in the right place. Now, you know, leveling the playing field to our Finance Accelerate simulation, that's because the industry is now interested in that. Obviously it's our mission, but it's finally coming through that now the industry is interested. They genuinely want to actually level the playing field. So I think being able to be flexible and not get married to a view. And I think that wasn't shown ever more clearly than when we actually stopped the trading side of our business. You know, that was gut-wrenching, I think, for us, given it was, you know, it's our passion in terms of originally how we started the organization. But looking at it quite coldly, you've got 2 or 3 areas: the technology, training, and recruitment for students. Is making a global impact and growing by hundreds of percent a year. And, um, the, the trader training side wasn't— just wasn't growing as fast. So, you know, being quite brutal with, with strategy, I think, is important. Um, but yeah, it's been, it's been, been, been a whirlwind, really. But I feel like— I know we're old now, but I do feel like we've just started at this new, if you like, level, um, a global level, rather than, um, a more sort of a small, medium-sized organization.

Yeah, and I guess that's a good point. It's like, never sit still, never be content with where you are. It's always like, I think for us, it's always been, okay, well, we're here, and it's like, okay, right, well, how do we now get to the next level? And that sometimes means changing direction and incredibly difficult decisions. But yeah, I think the moment you're the moment you think you've cracked it is probably the moment you'll start to fail. Well, that—

we've got a great story about that, haven't we? When we were, um, we— when we were on the trading floor, this is going back to 2005, we're in Canary Wharf trading floor, and by then, uh, I mean, Piers, you would especially— I think one of the largest, um, Schatz traders in the world, so, you know, good at what you do trading-wise, but still humble enough to know that this isn't easy. And there was a new, um, grad who joined the trading floor. And, um, he was doing okay. He was a bit of an annoying character, but, you know, he was actually doing okay for a brand new person. And I remember he's walking down, uh, walking down the middle between all of the desks, and he just goes, you know what, guys, this is easy. I've cracked this. I have cracked it. And then we're all like this. And anyway, I don't know how long he lasted, but trading isn't easy. The job isn't easy and he didn't crack it. And, um, he wasn't around, he wasn't trading for that much longer, but he definitely got the nickname of Cracked It.

That's what I was going to say, his nickname became Cracked It from that point on, the rest of the 2 months he lasted at the company. Before then, he got axed for not delivery.

But you're right in terms of, uh, business. I think if you're— if you've got that type of personality, I mean, I, I'm very emotional, uh, as you know, Piers, anyway. But, you know, I really, really want to win a client, or I really want to win a piece of business. Let's say I want to win a new pipeline for US hedge funds to, to use our kit, and I'll work really hard on it. Strangely enough, as soon as I've won it and it's confirmed, it's a weird reaction because it's kind of like, oh, okay, that's good, right? What next? Almost within a minute. Now The negative side of that is I think it means I'll never be happy, or never— because it's not that it's never enough. I'm not greedy. It's just that, you know, as soon as you've achieved that, I then want to feel like— I then want the fight again. I want the chase and the challenge. That's what I enjoy. But I think we wouldn't be where we are, and you're the same, you know, that's what what is needed. And I think we try to take decisions, aggressive decisions, to push it to the next level each time.

Yeah, and I guess it's also trying to have us making sure you have a scalable product where, or whatever that is, a physical product or a service or whatever. It being scalable means that, you know, there's always— once you've done the US hedge funds, great, well then is there anyone else who wants wants this. And yes, great, right, I'm going to go after them. I think just trying to make sure that the product offering has proper scale.

Um, but yeah, okay, well, listen, I just, I just want to say to anyone listening to this, by the way, if you are thinking about starting out your own venture, you know, it's brave, it's, it's a big decision, um, whatever it might be, just please do ping me a message on LinkedIn. I'm happy to advise, provide any guidance We've personally been through it. Still got a long, long way to go, still learning, but definitely happy to share some advice. If anyone wants it, just ping me a message.

Well, there is an offer for you right there. So your LinkedIn is going to blow up. Good. Hopefully. Yeah, absolutely. Well, look, thanks, Will. Look, it's been— I can't even remember what episode. On now. I said at the start, is it 55? It's been 55 episodes. And can we make sure that it's not another 55, uh, before you, uh, come on the pod? We should do this more often. We've got some good— we've got some plenty of trading store— trading floor war stories, some absolute classics, in fact.

Yeah, let's not share all of those.

Uh, cool. Well, look, Thanks, Will. Thanks for your time, and thanks a lot, guys. Look, obviously keep an eye out for news flow over the weekend. Um, we've got stuff like an OPEC meeting next week which could be interesting on the oil supply front and the response from OPEC, uh, following the Ukraine-Russia situation. So plenty of interesting stuff. And look, just be careful, um, now that markets have bounced and rebounded, doesn't mean that they're going to stay bounced. Um, this— these markets can be incredibly violent, and above all, you've got to be super on it when it comes to keeping your risk under control.

I'm going to finish on one point: volatility up, leverage down. Nice. Reduce the size of your trades. Like it.

All right, bombshell.

We'll see you next week.