Bob Elliott - A Macro Tour

**Patrick O'Shaughnessy** (0:00)
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**SPEAKER_2** (1:35)
Patrick O'Shaughnessy is the CEO and founding partner of PositiveSum and the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of PositiveSum or O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Clients of PositiveSum or O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.

**Patrick O'Shaughnessy** (2:07)
My guest today is Bob Elliott, the CEO and CIO of Unlimited, which creates low cost index ETFs for alternative investment strategies that typically cost two and 20 Prior to co-founding Unlimited, Bob was the senior investment executive at Bridgewater Associates, where he served on their investment committee and led Ray Dalio's personal research team for a decade.
His breadth and depth of experience makes him a great person to assess the current macro landscape. We discussed the relationship between rates, inflation and asset classes, Bob's approach to identifying data with the most signal and finish with his view on quantitative strategies in private markets. Please enjoy this great discussion with Bob Elliott.
Well, Bob, I've been so looking forward to this conversation, mostly because of your extremely unique background across both breadth and depth of different asset classes and strategies for investing inside of those asset classes. So this is gonna be sort of like a tour, if you will, across all that experience. But I found, I think, a very interesting place to start our conversation, which was based on something you shared publicly, which was that you could really learn an incredible amount from a paper called The Economic Organization of a POW Camp. That definitely popped off the page of me as sounding very interesting. Maybe you could describe how you came to that paper and walk us through the key lessons that you take from it.

**Bob Elliott** (3:25)
First of all, thank you for having me. It's a real pleasure. I've been listening to your podcast for a long time, and it's great to finally join you here. The Economic Organization of a POW Camp, I think, is one of the most interesting core pieces when you're thinking about anything to do with the creation of financial markets, the macro economy, or frankly, just how people live their economic lives. There's something so nice about a constrained environment to look at how people at their most fundamental level organize themselves. Now, obviously, that is not to say that I appreciate that there were POW camps in the past, but it does give a very unique lens into individual behavior and how that individual behavior then creates collective behavior, and then how that collective behavior then creates markets and how that collective behavior creating markets then creates natural economic cycles that you would typically expect to see then back in the big picture macro economy that we live in our day to day lives. And so I think it does a really nice job of sort of capturing all those individual pieces.
A level down, when you think about how it does that, it really helps you understand the individual's behavior. If you think about the global macro economy, all it is is billions of people engaged in a bunch of individual behaviors which collectively lead to macro economic outcomes. And so in many ways, if you wanna understand the macro economy, your best lens is to understand the individual and what the motivations are of the individual, what the behaviors are of the individual.