If you haven’t yet watched this new “Real Conversation” featuring Jim Bianco, CEO of Bianco Research hosted by Hedgeye CEO Keith McCullough—run, don’t walk to watch it. Below is one particularly insightful (and humorous) exchange during their in-depth investing discussion.

Bianco: These people who keep wishing and hoping, who are jealous and want this retail thing to end in tears—well, if it ends, it ends for everybody…This is somewhat dangerous what’s happening here in terms of these people wishing that this market would go down. And wishing that Dave Portnoy would get his comeuppance. It hits everybody if that’s what happens.

McCullough: Well that’s the grinder on the street. That’s the American capitalist Portnoy—and I salute him for it. No offense to Ron Insana, but it ended in tears for him when he tried it on the buy side at SAC.

There are a lot of institutional people who haven’t been able to make money for a long time. The game has changed dramatically. And the game—if you’re playing it like a hedge fund manager like I was in the early 2000s has changed bigtime. You had big block trading going on, people with big ideas at hedge funds pushing around stocks. And it was all on fundamental research. That made sense at the time. But that game is gonzo.

Prior to this as you point out, 80% of daily trading—90% on some days with the higher volatility—was systematic trading. Quants and rules-based trading. Not individuals.

Bianco: Going back to your point on Ron Insana. There’s a great anecdote. Dave Portnoy got mad at him. Portnoy pulled out a scrabble bag one day, he shook up the letters, and he pulled letters out to buy a stock. And he happened to pull out the letters, “RTX” which is Raytheon. And so he bought Raytheon stock. And I tweeted out at the time that if Portnoy limits himself to three letters or less, he’s going to be buying a NYSE-listed company that meets the qualifications for the NYSE listing.

So why is that any more irresponsible than buying Spiders (SPDR) which just buys the 500 largest stocks in the S&P 500?

McCullough: (Laughter)

Bianco: You know? Is it really that much different? And I know that’s really upsetting to a lot of professional money managers. Because it’s true.

McCullough: It’s true.

Bianco: And that is the game that he is exposing. I think the reason why he has become so popular and this thing has got the ire of everybody is because it is showing them in a light that they don’t want to be shown in. You’re right Keith, the game is over for a lot of these guys.

Watch the full conversation below

Davey Day Trader Vs. Wall Street (And Ron Insana) - Jim Bianco Youtube Livestream