OG Crypto Investor SOLD HIS BITCOIN For AI

[0:00] Bitcoin is valuable because it exists
[0:01] outside the system.
[0:03] >> Bitcoin is valuable because if the
[0:04] system makes mistakes, there's an escape
[0:06] hatch. But that only makes sense in a
[0:09] world where the Fed has massive control
[0:11] or the government has massive control
[0:13] over the direction of the economy, which
[0:14] was true for a very long period of time.
[0:16] I mean, basically from the Great
[0:18] Recession up until today, people watch
[0:20] the Fed like a hawk. Today, that matters
[0:22] less. And it matters less because you're
[0:24] seeing true secular worldchanging growth
[0:27] in robotics, in AI, in biotech, in
[0:30] defense. Things are genuinely happening.
[0:32] Things are genuinely being built. I
[0:34] mean, SpaceX is a great example of this.
[0:36] What's going on, guys? Today, we got a
[0:37] great conversation with Avi Filman. He's
[0:39] an extremely successful former hedge
[0:40] fund manager and he's the host of the
[0:41] Thousandx Pod. Avi and I talk about the
[0:44] AI trade, why he doesn't own any Bitcoin
[0:46] right now, what's going on in the crypto
[0:47] industry, how he's thinking about
[0:48] biotech, defense stocks, and then we get
[0:50] into the psychology of a trader and
[0:52] what's been happening in the market with
[0:53] so much volatility, how you can generate
[0:55] an edge, and then what should you be
[0:57] thinking about going forward and how to
[0:59] spot a bubble and maybe when you should
[1:00] sell. All that much more in this
[1:02] conversation with Avi Felman. All right,
[1:04] Avi, uh, you were just telling me
[1:05] something that I think we got to get
[1:06] right into is that you've been in crypto
[1:08] since 2016, but you now own no Bitcoin
[1:10] and it sounds like almost no crypto.
[1:12] you've completely divested. What's going
[1:14] on? Did you just like lose the faith?
[1:16] >> Yeah, it's a it's something that I've
[1:17] actually been struggling with for a
[1:19] while because I actually made crypto
[1:21] somewhat part of my identity
[1:23] >> for a period of time. I mean, I
[1:24] graduated university in 2017 and went
[1:27] straight into the industry because I
[1:28] found that there was a tremendous amount
[1:29] of edge at that time. Basically, nobody
[1:32] cared about crypto. You talk to your
[1:34] average person on the street, they had
[1:35] no idea what Bitcoin was. I remember
[1:37] when Bitcoin first made into the front
[1:39] page of the Wall Street Journal and
[1:40] everyone was just going, "This is
[1:42] incredible. I can't believe it. I can't
[1:44] believe that we've we've done this.
[1:46] We've won." Back in 2017 when Bitcoin
[1:49] finally broke its all-time highs again.
[1:51] And basically from that moment up until
[1:53] 2025,
[1:54] I've had a significant portion of my
[1:57] investment portfolio in crypto. And
[2:00] today, the world is just a very
[2:02] different place than it was in 2017.
[2:03] It's a very different place than the
[2:05] world was in 2020. I mean when you look
[2:07] back at what happened to Bitcoin in 2020
[2:09] because of co look you know as
[2:11] >> crazy
[2:12] >> insane you know as well as I do what
[2:14] happened was the entire world shifted
[2:16] online people didn't have anything to do
[2:18] in in the real world and what was
[2:21] happening is that there was so much
[2:22] liquidity shoved into the markets
[2:26] because of the Fed because of the
[2:27] government because they were worried
[2:29] that secular growth in America had ended
[2:32] that there might be a complete and utter
[2:34] shutdown of the markets and they needed
[2:35] to keep people afloat. Mhm.
[2:36] >> And so a huge portion of this idea of
[2:40] crypto, if you really dig into it, what
[2:42] is it? Why is Bitcoin valuable? Bitcoin
[2:45] is valuable because it exists outside
[2:46] the system.
[2:47] >> Bitcoin is valuable because if the
[2:49] system makes mistakes, there's an escape
[2:51] hatch. You can say if the Fed raises
[2:54] rates incorrectly or cuts rates
[2:56] incorrectly, stimulates the economy too
[2:57] much, inflation runs out of control.
[2:59] There's somewhere for you to go.
[3:02] But that only makes sense in a world
[3:04] where the Fed has massive control, the
[3:07] government has massive control over the
[3:08] direction of the economy, which was true
[3:10] for a very long period of time. I mean,
[3:12] basically from the Great Recession up
[3:13] until today, people watch the Fed like a
[3:16] hawk. Today, that matters less. And it
[3:18] matters less because you're seeing true
[3:20] secular worldchanging growth in
[3:22] robotics, in AI, in biotech, in defense.
[3:26] Things are genuinely happening. Things
[3:28] are genuinely being built. I mean,
[3:29] SpaceX is a great example of this. It's
[3:31] possible in 15 years we have genuine
[3:33] asteroid mining. It's possible in 20
[3:35] years we're going to Mars. I mean, these
[3:37] are advancements that humanity couldn't
[3:39] even have dreamt of 30 years ago. And
[3:42] so, the amount of money that is pumped
[3:44] in the system, the irresponsibility of
[3:46] the Fed or the irresponsibility of
[3:48] government somehow now takes a backseat
[3:50] to the actual future. And that's one of
[3:53] the reasons that I think crypto has been
[3:54] struggling so much is because we don't
[3:59] have a narrative for it right now.
[4:02] With that being said, at the end of the
[4:04] day, I'm a trader
[4:06] >> and I think that there's a price at
[4:07] which Bitcoin makes sense and the
[4:09] Bitcoin is not going away. I don't think
[4:10] it's going away. I just think at this
[4:12] moment in time, attention is elsewhere.
[4:14] For the foreseeable future, attention
[4:16] will be elsewhere. And so for me, it
[4:18] just doesn't make a ton of sense to be
[4:19] holding this drag when I can be holding
[4:21] memory stocks or I can be investing in
[4:23] something that's genuinely going to
[4:24] change the world, right? If you have the
[4:25] choice between hedging your bets with
[4:28] Bitcoin, I mean, it used to be used to
[4:31] be 80% of my portfolio, right? Used to
[4:33] be substantial amount of my holdings
[4:35] versus investing in biotech companies
[4:37] that are now using AI to discover drugs
[4:39] that we could have again never dreamed
[4:41] of before and at a faster pace than ever
[4:43] and actually make real money and impact
[4:45] real lives. you kind of have to go with
[4:46] the ladder. But that doesn't mean that
[4:48] crypto is dead. It's just changed. It's
[4:51] all of the crypto that I'm invested in
[4:53] now
[4:54] are companies that are using crypto
[4:56] technology.
[4:57] >> That's what I'm most interested in.
[4:58] >> Like what's an example?
[4:59] >> So Hyperlquid is the is the obvious
[5:01] example, but I'm even looking at things
[5:02] like cards, right, which is which is a
[5:05] lower cap um coin that basically has to
[5:07] do with the trading collectibles, the
[5:09] trading card market, right? That makes
[5:10] that makes revenue. If you look at VVV,
[5:13] which is Eric Vorhees's project, uh the
[5:15] exact
[5:18] value acral to the token is debated, but
[5:20] the thing is making money. It's actually
[5:22] pulling in revenue. It's a good product
[5:24] that uses crypto infrastructure to
[5:26] generate revenue. And that's really
[5:27] where we're going is people have
[5:29] realized now, wait a second. So maybe
[5:33] the vast majority of things that we
[5:35] created, these infrastructure projects,
[5:37] uh these tokens that pump to the high
[5:39] heavens, they weren't actually useful
[5:41] because they weren't generating any real
[5:44] money. And at the end of the day, what
[5:46] you need is you need users and you need
[5:48] revenues. And so there are a ton of
[5:50] crypto projects out there that are
[5:51] generating revenues. And it's the same
[5:52] way that you go back to the internet
[5:55] bubble, right? People love using this,
[5:57] but it is a varied apt comparison.
[6:01] If you think about it, in the beginning,
[6:03] everyone talked about how internet
[6:04] companies were going to take over the
[6:06] world. Then the bubble burst and then 10
[6:09] years later, nobody was really talking
[6:10] about internet companies. They were just
[6:11] talking about companies, right? Does
[6:13] Facebook make money? Does Google make
[6:15] money? Walmart is benefiting from having
[6:17] an online store. Companies adopted the
[6:19] tech.
[6:20] >> Mhm. New companies certainly were built
[6:22] using the basis of the tech like
[6:24] Netflix, right? Would would have never
[6:25] have worked without the internet, but
[6:27] people stopped referring to them as
[6:30] internet companies or just tech
[6:32] companies now, right? And that's that's
[6:33] that's the sector. And that's what's
[6:35] going to happen in crypto is we're no
[6:37] longer going to have crypto companies in
[6:40] the same sense. We're going to have
[6:42] fintech companies that use crypto as a
[6:43] back end. I mean, I would classify
[6:44] Hyperlid as a fintech company. I think
[6:47] tokenization is going to be massive just
[6:49] because it's better. It's easier. It's
[6:50] simpler. It's faster.
[6:52] >> What is the thesis on hyperlquid?
[6:54] >> So the thesis on hyperlquid is quite
[6:58] simple. It's that the financialization
[7:01] of the world is here. People are trading
[7:03] everything now. People are trading
[7:05] people are trading the weather. People
[7:06] are uh punting on Korean stocks. People
[7:09] are punting on US single single name
[7:11] equities more than ever. And what you
[7:13] want is you want an easy way to be able
[7:15] to do that. And so the hyperlquid thesis
[7:17] is actually basically the same thesis as
[7:20] the Robin Hood thesis. It's the same
[7:22] same thesis as investing in any in any
[7:24] brokerage that or the college street
[7:25] thesis or the poly market thesis. But I
[7:28] think that the market is big enough that
[7:29] there are going to be multiple winners
[7:30] here that are going to be generating
[7:32] tremendous amounts of value. I think and
[7:35] this is something we can get into cuz
[7:36] this is actually very important is my
[7:39] view is that the social contract with
[7:42] the with America has been broken with
[7:44] the average which your average American
[7:46] has been broken prior if you put your
[7:49] money if you worked for 30 years you put
[7:51] your money into a pension fund you could
[7:53] retire you could get paid out that
[7:54] doesn't really exist anymore there not
[7:55] many pension funds right so now the
[7:58] entire crux of the argument is if you
[8:01] work and you invest in your 401k and you
[8:02] put into the stock market, then you'll
[8:05] be able to retire comfortably. But the
[8:06] reality is that inflation for the
[8:08] average person over the last 30 years
[8:09] has been horrendous. And even if you had
[8:12] all of your earnings put into the stock
[8:13] market, housing prices have run away
[8:15] from you, right? a lot of things have
[8:17] just completely run away from you
[8:18] because the top end the capital the
[8:20] capital class of which I you know
[8:22] obviously I don't want to sound like a
[8:24] communist here but it is it is true that
[8:26] the capital class has sucked up a
[8:28] tremendous amount of wealth and they've
[8:30] deployed that into assets and shot shot
[8:32] the price up so the social contract in
[8:33] many ways has been broken so people are
[8:35] searching for ways to escape that right
[8:39] they're searching for ways to escape you
[8:41] know the permanent underclass
[8:43] >> as people call it and what they're doing
[8:45] is that they're gambling on sports,
[8:46] they're betting on the weather, they're
[8:47] on koshi, they're on poly market, and
[8:49] this entire area is just going to grow
[8:51] because I don't especially with AI.
[8:54] I don't know if I foresee this getting
[8:56] better. I actually potentially foresee
[8:58] it getting worse. Now, when we look at
[9:01] sports gambling apps, the prediction
[9:03] markets, I think a lot of folks say,
[9:05] "Hey, that is some form of speculation,
[9:07] gambling, etc." Hyperl is the same in
[9:12] your mind or it's different. Is it more
[9:13] like the New York Stock Exchange or is
[9:15] it more like a sports, you know, sports
[9:17] book?
[9:17] >> It's a combination. And what you're
[9:20] actually seeing is you're actually
[9:21] seeing the New York Stock Exchange and
[9:22] NASDAQ and all these other companies,
[9:25] they're coming closer to the call sheet.
[9:27] They're integrating this the gambling.
[9:29] They're integrating all that because
[9:30] they realize that's where the world is
[9:32] going. I mean, look, pump
[9:35] three years ago, Wall Street Bets was
[9:37] the biggest subreddit in the world. I
[9:39] mean, the level of activity there was
[9:41] through the roof. And that was 3 years
[9:43] ago. Um, if you remember during co,
[9:47] everybody became a day trader because of
[9:48] all because of the GameStop squeeze. And
[9:51] it gave people a taste of what it's like
[9:52] to be on the winning side.
[9:54] >> Mhm.
[9:54] >> And I think that addiction has stayed
[9:56] with us. And that's what people are
[9:58] really looking for because you're
[9:59] thinking to yourself, if I make 100,
[10:01] even if you make 100k a year for the
[10:03] next 30 years, that's
[10:06] 3 million in gross. And how much is a
[10:09] house? How much is like a How much is a
[10:11] three-bedroom apartment in Manhattan?
[10:12] >> Well, you gota pay taxes, all you got to
[10:14] live, you gota do all this stuff. Yeah.
[10:16] >> And and so what's happening right now is
[10:18] that people are really searching for
[10:19] ways to basically accelerate their
[10:22] growth. And so that's why trading and
[10:26] investing has become a bigger part of
[10:29] everyday people's lives. I mean again,
[10:30] you go back 30 years, your average
[10:32] person was not trading the stock market.
[10:34] They might be invested, but they're not
[10:35] trading. And today they are. And that
[10:37] actually is also a function of there's
[10:40] more opportunity now. There's more
[10:41] opportunity than ever. That and that was
[10:42] that was the beauty of crypto is like
[10:44] crypto was a playground for people that
[10:46] were intelligent and smart and could
[10:48] generate edge. It was a playground
[10:50] because at 22 years old I get into the
[10:52] market and I find that this is a great
[10:55] place to be.
[10:56] >> Mhm.
[10:57] >> Because there's tremendous edge because
[10:59] not a lot of people are playing in it
[11:01] yet. And there's a there's a way to make
[11:02] money. There's a way to basically fast
[11:04] forward my career as a 22-year-old. And
[11:06] that's what people I think are really
[11:08] they've seen that happen in many
[11:10] different industries over and over and
[11:12] over in the last 10 to 15 years whether
[11:14] it's you know what happened with a bunch
[11:16] of these people in AI in Silicon Valley
[11:18] or uh in crypto in in 2017. And today
[11:22] what people are thinking to themselves
[11:23] is how do I escape? How do I get there?
[11:25] How do I get to the next level?
[11:27] >> And so Hyperlid is capturing that
[11:29] financialization
[11:31] of the world. And I think the tech
[11:33] behind it is ob I mean it's just as a
[11:36] native user of crypto it's just easier
[11:38] to use than a Robin Hood or Interactive
[11:41] Brokers or any of these other sites
[11:43] maybe less so than a Koshi Kali is
[11:45] actually pretty easy to use. Poly
[11:47] market's a little bit tougher and I
[11:49] think that this entire sector is just
[11:52] going to grow. I mean we're going to see
[11:53] people trade literally everything. I
[11:55] mean there could be a future in which
[11:56] people are just like betting on what
[11:58] words you say during this podcast,
[12:00] >> right? And that market could grow large
[12:02] because if people are like, well, I just
[12:04] got to find something to bet on. You got
[12:05] to you got to scratch the itch.
[12:07] >> Mhm.
[12:07] >> I mean, that's that's really that's
[12:09] really my take. And I think that
[12:10] Hyperlid obviously makes a ton of money.
[12:11] And so that that's very valuable.
[12:13] >> One of the things that I find
[12:14] interesting is if you look at this like
[12:16] K-shaped economy, basically it's the
[12:17] hollowing out of the middle class, but
[12:18] when you dig into the data, there are
[12:20] definitely people who are worse off.
[12:21] There there's a lot of people, right? Um
[12:24] if you go and look at the poverty data
[12:26] as an example um in uh 2025
[12:30] or excuse me 20 uh 2005 give or take
[12:33] there was about 35 million people who
[12:36] were below the poverty line. Today 20
[12:38] years later all the work that's been
[12:39] done all the there's still about 35
[12:41] million people in America that are
[12:42] estimated to be below that poverty line.
[12:44] So what ends up happening is the poverty
[12:45] rate has come down because more people
[12:48] live in the United States than they did
[12:49] 20 years ago. But the same number of
[12:51] people are still living in poverty. Now
[12:53] at the same time we have actually seen a
[12:56] lot of people in the middle class be
[12:57] able to ascend in from a socioeconomic
[13:00] standpoint. There's mobility to the
[13:02] upside. So what you got is you got this
[13:03] like bifurcation and the middle class
[13:05] went away because some of them got
[13:06] pushed down, some of them got pulled up,
[13:08] right? And I think that that's even kind
[13:10] of a weird dynamic of that middle
[13:12] ground. How many people do you know
[13:14] that, you know, live a quoteunquote
[13:16] middle of, you know, the economic stack
[13:20] lifestyle? There's really not that many.
[13:22] Either you got money and you can go do
[13:24] cool things and, you know, kind of live
[13:26] the life that everyone, you know, dreams
[13:28] of doing or you don't. And that middle
[13:31] ground doesn't really seem like a thing.
[13:33] Like, I don't know a lot of people even,
[13:35] you know, seeing online that are like, I
[13:37] only go on one vacation per year. It's
[13:40] kind of like I go on vacation a lot or I
[13:42] don't go on vacation at all. And I think
[13:44] that that is like a very weird dynamic
[13:46] that just didn't exist 20 30 years ago.
[13:49] >> Absolutely. And it's actually becoming a
[13:51] social problem
[13:52] >> now at this point. I mean, I don't know
[13:53] if you saw the elections in New York
[13:56] recently, but the the socialist sweep is
[13:58] a direct result of downwardly mobile
[14:01] individuals that are living in New York
[14:03] that or downwardly mobile being they're
[14:05] doing worse than their parents
[14:07] >> and they're voting for socialism because
[14:08] they they feel like the social contract
[14:10] has been broken. Now, what I always say
[14:11] to these people is that the best way to
[14:14] get a car in every driveway and a
[14:15] microwave in every kitchen is to allow
[14:17] the capital class to invest. is to allow
[14:19] invention to occur and to actually
[14:22] encourage success in America because
[14:24] that's how you get lower cost for
[14:26] everything. I mean, when you look at
[14:28] quite literally everything that's ever
[14:30] been invented,
[14:31] >> it gets more accessible as time goes on
[14:33] because we figure out better ways to
[14:34] deliver things to people, right? Without
[14:36] I mean, Amazon has probably lowered
[14:38] costs for,
[14:40] you know, millions and millions and
[14:41] millions of different types of goods
[14:43] because of their logistic system. And
[14:44] now you can get things in two days where
[14:47] 30 years ago you'd have to wait two
[14:48] years for some of this stuff.
[14:49] >> Well, there's also there's also the
[14:51] famous chart of like the private market
[14:53] is driving cost down and then everything
[14:55] the government's involved in in terms of
[14:56] education, healthcare etc is all, you
[14:58] know, skyrocketing and so in a weird way
[15:00] you you don't want that. I also think
[15:02] you know one of the uh aspects of
[15:04] society and I feel like you you
[15:06] obviously pay a lot of attention to the
[15:07] financial markets but you you're very
[15:08] aware I think of social trends of uh
[15:10] some political stuff etc. is um there is
[15:14] something about testosterone
[15:18] in society. Yeah. And we know that
[15:20] testosterone in general is falling for
[15:22] all men um across age groups. And so
[15:25] like that is on one hand like there's a
[15:27] health component to it but there's also
[15:28] like a social component to it. But also
[15:30] there's now a lot of studies that are
[15:32] coming out that uh young women who
[15:35] either are in a relationship, spend time
[15:37] with a lot of other men etc. they
[15:40] actually start to move where they are on
[15:43] the political spectrum,
[15:44] >> right?
[15:44] >> There are studies that are coming out
[15:46] that if you take a male and you give
[15:48] them external testosterone, they start
[15:50] to shift right on the political
[15:52] spectrum. So, you see these like data
[15:54] points and there's no like kind of like
[15:55] perfect analysis. There's no like, hey,
[15:57] here's the quintessential, you know,
[15:59] study to go look at. But what you start
[16:01] to realize is like in a very weird way,
[16:02] there's a biological connection to some
[16:05] of the social ramifications through the
[16:07] political process, right? And the reason
[16:09] I bring that up is because increasingly
[16:12] we know that there are lower marriages
[16:14] or people waiting longer to get married.
[16:16] They're waiting longer to have children.
[16:17] Like all the again all of these things
[16:18] that we know of. But when that happens,
[16:22] then you take the like quote unquote
[16:24] average voter. Okay, they're older.
[16:27] They're less likely to have children.
[16:29] They're less likely to have, you know,
[16:31] multiple children. They're less likely
[16:33] to hit, you know, kind of check all
[16:34] these boxes. they actually have less
[16:37] investment in the future.
[16:38] >> Yeah.
[16:39] >> And so in a weird way it becomes what
[16:41] can I get now versus what can I wait for
[16:44] in the future. And the statistics that
[16:46] we've been talking about a lot is 89% of
[16:48] boomers or you know uh kind of senior
[16:51] citizens they are in favor of taxing
[16:53] young people more so they can keep
[16:55] getting their benefits.
[16:56] >> Absolutely.
[16:57] >> But it makes sense, right? Like if
[16:59] you're 70 years old like of course
[17:00] that's what you believe.
[17:01] >> Of course. Of course this is of course
[17:02] it's happening. Look, I think that you
[17:05] might be asking if you're if you're
[17:06] listening to this podcast like why why
[17:07] are two people that are ostensibly
[17:09] talking about the financial markets
[17:10] discussing social dynamics and there's
[17:12] actually a very important reason and the
[17:14] reason that I've started paying
[17:15] attention to politics a lot I mean I
[17:16] grew up in Washington DC. I grew up
[17:18] around politics my entire life. It's
[17:20] something that I've always been
[17:20] interested in from a personal level uh
[17:22] and also somewhat from a professional
[17:24] level. But it's more and more likely to
[17:27] impact the markets than ever before. If
[17:29] you're a trader or an investor or
[17:31] anybody that wants to make money in this
[17:33] world, you have to understand what what
[17:34] made you your money and what can stop
[17:36] you from making money.
[17:37] >> And these trends that you're talking
[17:38] about are the single biggest risk to the
[17:41] future performance of the markets. Index
[17:43] funds, uh, single name stocks, literally
[17:45] you name it, socialism and communism,
[17:48] the rise of all of that is the single
[17:50] biggest threat to the markets. Mhm.
[17:53] >> And so when I look at investing, I right
[17:56] now the way that I view the markets is
[17:57] very is very straightforward. It's we
[17:59] are in a period we are in at an
[18:02] inflection point. The markets are
[18:04] growing faster than ever because of true
[18:06] revolutionary technology that is
[18:08] unfortunately at the same time actually
[18:11] taking capital and condensing it within
[18:14] a top the top 1% even further. Now, that
[18:17] doesn't necessarily have to be a bad
[18:19] thing, but social unrest occurs not
[18:22] because of absolute value. You might be
[18:25] better off in 5 years than you are
[18:27] today, but if you look at your neighbor
[18:28] and your neighbor is 10x better off than
[18:30] you, you feel discontent. And so, that's
[18:33] why I I sent out a tweet the other day
[18:34] that really riled people up. But it was
[18:37] that so social inequality or income
[18:40] inequality is not a real problem. It's a
[18:41] social problem,
[18:43] >> right? Because income inequality doesn't
[18:44] directly lead to the degradation of the
[18:47] people at the bottom half of the K.
[18:49] Doesn't lead to the degradation of their
[18:50] lives. What it does lead to is
[18:51] comparison.
[18:52] >> Mhm.
[18:53] >> And to me, I mean, comparison is is is a
[18:55] thief of joy. But that is probably going
[18:58] to end up with at some point as people
[19:01] continue to get wealthy in the stock
[19:02] markets. You're going to see agitation
[19:04] for wealth taxes. You're going to see
[19:05] agitation for potentially at some point
[19:08] seizing seizing capital. And this is
[19:10] when I go back to crypto. This is why
[19:12] crypto still has value. This is why at
[19:14] some point I will own crypto again. And
[19:16] I think it's probably important to own I
[19:19] mean I own Zcash um and a little bit of
[19:21] and a little bit of Monero as well
[19:22] because I think that it's important to
[19:24] have these things as a hedge. But this
[19:25] is where this is where the world is
[19:27] going. And so at the same time that you
[19:29] have these massive sec secular growth
[19:32] trends in all of these incredible areas,
[19:35] you have this dangerous political trend
[19:37] rising. And those two things are
[19:39] inevitably going to come to a head. And
[19:41] you have to be prepared. You have to
[19:43] understand what's going on. You have to
[19:44] be paying attention to what's happening
[19:46] in the world of politics. So you can
[19:47] start to think to yourself, well, okay,
[19:49] maybe we were maybe last year I thought
[19:51] we were 5 years off. Now we're 2 years
[19:53] off.
[19:53] >> I mean, with the elections in New York,
[19:55] maybe 2028 looks different, right? And
[19:57] so that's that's really why I focus on
[19:59] this kind of stuff and I and I think
[20:01] about it.
[20:01] >> What has to be true for you to buy
[20:02] Bitcoin again?
[20:04] >> It's a good question. Well, right now
[20:07] it's a flows issue. Right now it's that
[20:10] Michael's I mean this morning when I
[20:12] checked Stretch it's at 76. Stretch
[20:14] being the Bitcoin savings account that
[20:17] Michael Sailor has set up for himself
[20:18] and and for you the investor.
[20:22] It's not looking good and people are
[20:25] afraid to touch Bitcoin. I mean, I came
[20:27] a little bit of my background is that I
[20:29] used to be the portfolio manager of a
[20:31] hedge fund called Block Tower, uh, which
[20:34] was an institutional crypto fund and
[20:36] then I moved over to actually start the
[20:38] crypto and alternative assets business
[20:39] with a partner named Joe Nagger under a
[20:42] $50 billion credit fund called Golden
[20:44] Tree. Uh, serious shop. They got into
[20:47] crypto in 2022 when I came over
[20:51] basically because they thought that
[20:52] crypto was going to be worldchanging
[20:54] tech. And fast forward 4 years when I
[20:58] talk to my old colleagues or when I talk
[21:00] to people from the traditional world of
[21:02] finance, they're just worried about
[21:04] Sailor. They're worried about they're
[21:06] worried about two things. They're
[21:07] worried about quantum and they're
[21:08] worried about Sailor. And then the third
[21:10] thing is that there's no narrative to
[21:13] drive purchase of Bitcoin.
[21:16] That's honestly lesser than what's h
[21:19] what's happening right now, which is
[21:20] people are kind of chucking out. So,
[21:21] what I need to see specifically is I
[21:22] need to see the sailor problem solved. I
[21:25] need to see the quantum problem solved,
[21:27] and I need to see liquidity or I need to
[21:32] see the Fed acting in a way that would
[21:35] make me worried about increasing
[21:37] inflation.
[21:38] >> I I would need to see injection into the
[21:40] injection into the economy. And right
[21:42] now there is a ton of liquidity, but
[21:44] there's also real growth and people are
[21:46] making real money. And that's I think
[21:47] the biggest the biggest difference. So
[21:48] with Bitcoin specifically, I'm wait I
[21:50] mean maybe I'll buy it. If we get like a
[21:52] puke out, if we trade 40K, I'll probably
[21:55] get back get back in. But until then,
[21:57] I'm waiting for these three things.
[21:59] >> Do you think that uh strategy and uh
[22:03] stretch their preferred equity are
[22:05] sustainable or are you worried that
[22:06] there could be some implosion?
[22:10] So the the difference people compare it
[22:13] to Luna. It can't be a Luna. And the
[22:15] reason that it can't be a Luna is
[22:17] because there's in Luna there was I'll
[22:19] tell you I'll tell you a story. When I
[22:21] was when I first came to Golden Tree, it
[22:23] was basically the first week that Luna
[22:26] like that Luna really started dagging.
[22:28] And one of the partners at the firm
[22:31] wakes up one day and calls me and says,
[22:34] "Hey Avi, I really think we should buy
[22:36] some some Luna here or US or Luna. It's
[22:39] down 75%.
[22:42] And I said, "You can't buy it. Like, you
[22:44] just you can't buy this thing. It's
[22:46] going to go to zero." He goes, "That
[22:48] makes no sense. I've been trading
[22:50] markets for 30 years. I've never seen an
[22:52] asset go down 75%." And not bounce.
[22:56] Said, "You don't understand. There's a
[22:57] mechanism here." And the mechanism was
[22:58] you could buy US and turn it into Luna.
[23:02] And as long as Luna kept going down
[23:05] there, there there was a continuous ARB
[23:06] to just print infinite Luna and send it
[23:08] to zero. You can't do that with that
[23:12] doesn't exist. So So the people trying
[23:13] to make a comp, there's no direct comp
[23:15] here. What's happening with Stretch is
[23:17] that Michael Sailor has two levers he
[23:19] can pull. He can either sell well three.
[23:21] He can he needs to fund the dividend for
[23:23] Stretch. So he can either sell MSTR to
[23:26] generate cash, you can sell Bitcoin to
[23:28] generate cash, or you can buy you can
[23:29] get people to buy into Stretch at Par to
[23:31] generate cash to to buy Bitcoin and then
[23:33] use part of that to end up paying out
[23:36] the dividends. The dividend is not in a
[23:40] smart contract. He can pause it at any
[23:42] time there. He can just say, "Guess
[23:44] what, guys? I'm not paying you out. This
[23:47] every holder of Stretch is going to get
[23:49] totally nuked. this thing's basically
[23:51] going to go to zero, but I'm holding the
[23:53] Bitcoin, right? I'm not I'm not going to
[23:55] sell the Bitcoin. So,
[23:56] >> I've thought multiple times,
[23:57] >> right?
[23:58] >> Again, reputationally, there would
[24:00] probably be a lot of damage, but from a
[24:02] pure economic standpoint, if they let
[24:05] Stretch go to zero by just simply
[24:07] turning off the dividend, they keep all
[24:08] the Bitcoin, they don't owe anybody
[24:10] anything. I mean, it's kind of this
[24:11] crazy, you know, what is I think a lot
[24:13] of people deem as a potential edge case,
[24:15] but it's possible, right?
[24:16] >> It's it's for sure possible. And not
[24:18] only that, it's probable. You think so?
[24:20] I think so. I think that he's probably
[24:22] he's going to either have to do it or be
[24:26] or want to do it. I mean, if there's one
[24:28] thing we know about sailor that sellers
[24:30] are genius at financial engineering.
[24:31] >> Mhm.
[24:32] >> He is he's come up with a ton of
[24:36] different ways to juice value from BTC.
[24:38] And what he wants to avoid more than
[24:40] anything is a total implosion of his
[24:43] story.
[24:43] >> Mhm.
[24:44] >> And of MSTR
[24:45] >> of MSTR of of MSTR stock. And if MSTR
[24:48] stock, if he doesn't solve this
[24:50] stretches issue, basically MSTR goes to
[24:52] zero. And you you you kind of have to
[24:54] stop playing the game. I don't think he
[24:55] wants to stop playing the game. It's
[24:57] much easier to just shut down the
[24:59] stretch product than it is to battle
[25:01] this all the way to the dirty end and
[25:03] have MSTR end up going to zero because
[25:05] he keeps having to issue at the money
[25:07] offerings for for it to to pay off the
[25:08] difference.
[25:08] >> Is there a world where MSTR has to
[25:11] become a force seller and puke out a lot
[25:13] of the Bitcoin?
[25:15] uh there is there is a world in which
[25:18] that happens and I think Sailor was
[25:19] trying to basically frontr run that
[25:22] potential uh fear in the market. He used
[25:26] with with the sale. I mean he
[25:28] >> only 32 bitcoin
[25:29] >> but but he used the word inoculate
[25:32] >> like he quite literally used the word
[25:33] like a this is a vaccine pump. This is a
[25:36] vaccine. It's I'm going to sell a little
[25:38] bit so that when I sell more later you
[25:41] have the antibodies to resist fear.
[25:43] >> That's really what he was doing is like
[25:45] let me get this let me get this out of
[25:46] the way now.
[25:47] >> Mhm.
[25:47] >> And to me that's um that's dangerous. I
[25:50] do think that it's it's pos it's
[25:53] possible that he sells a portion of his
[25:55] Bitcoin. He doesn't need to sell all of
[25:57] it to cover his debt. I think the the
[25:59] number is uh you know he needs to sell
[26:01] any somewhere between 15 to 25% of his
[26:04] overall Bitcoin.
[26:04] >> The debt would be the stretch debt or
[26:06] >> all the debt that he's taken out to buy
[26:09] >> the converts everything.
[26:10] >> Yeah. the converts and everything
[26:11] because a lot a lot of the bitcoins
[26:12] actually bought just with cash and at
[26:14] the money equity offerings and the
[26:16] convert somebody converts you know
[26:17] obviously went to equity
[26:19] >> as well like not all of it remained as
[26:20] debt.
[26:21] >> Mhm.
[26:22] >> And so I think the numbers maybe don't
[26:24] quote me on this but it's like 15 to
[26:26] 25%.
[26:28] And so he doesn't need to sell all of it
[26:30] and obviously Bitcoin would take a
[26:33] beating in that scenario and that would
[26:36] probably be like you guys got to buy as
[26:38] much as possible. Like you guys got to
[26:40] get in there and just if Sailor's
[26:42] getting liquidated, if there's one thing
[26:43] that I've learned about trading is
[26:45] whenever there's a forced seller in the
[26:46] market, you need to step in there and
[26:48] buy as much as you possibly can. The
[26:51] best trade that I've ever taken in my
[26:54] entire life was buying
[26:58] Ripple equity off of the FTX estate.
[27:01] >> Explain. And so when FTX, this is
[27:04] actually kind of an I've never told this
[27:06] story on a podcast before, but when FTX
[27:10] went down, I was working at Golden Tree
[27:12] and Golden Tree is a big distress shop,
[27:14] distressed shop, and I got a call from
[27:18] Sam Bankman Freed on that day because he
[27:21] knew that there were only a few shops in
[27:22] this world that could plug the hole for
[27:24] him.
[27:26] Golden Trade, the Times, 50 bill. I get
[27:29] this call from this unknown number. Then
[27:31] I get a text. Hey, it's Sam Bankman
[27:33] Freed. Like, there's just no way. Why
[27:35] are you call? I mean, I I'd been
[27:36] friendly with him, but I I didn't think
[27:38] that he'd actually call me. So, I say,
[27:39] "Send me a selfie." Dude sends me a
[27:41] selfie. And he's like sitting there in
[27:42] his Bahamas apartment. He sends me a
[27:44] live photo. It's the funniest live
[27:45] photo. I'll show you offline. I can't
[27:47] share with the world, but it's the
[27:48] funniest photo ever. And I go, "Okay, I
[27:51] guess I'll talk to this guy." But at
[27:53] first, I text lawyers. I'm like, "Okay,
[27:54] should I do this?" 100%.
[27:57] >> Like, am I allowed to talk to this guy?
[27:58] I like text I text the CEO of Golden
[28:01] Tree. I'm like, "Hey, should like we we
[28:02] talked to this guy and I end up chatting
[28:05] with him and like how big's the hole?"
[28:08] He goes, "Well, you know, you know, um I
[28:10] think it's like, you know, we need 2
[28:12] billion, 2 to three billion to cover the
[28:13] hole." I'm like, "Well, okay, but how
[28:15] big's the hole?" He goes, "Well, no, no,
[28:16] we need two to three billion to cover
[28:18] the hole." He's like, "No, no, that's
[28:19] not what I'm asking you. Like, how big
[28:21] is the actual hole?" Uh, it's like 8
[28:23] billion or something like that. Like,
[28:24] all right.
[28:26] which actually looking back on it, if we
[28:29] had filled that hole and taken over FTX
[28:32] and kept all the things that they had
[28:33] within it, that would have been great.
[28:35] Um, but it's those moments when there's
[28:38] peak fear in the markets when you're
[28:41] talking to somebody that is not thinking
[28:43] or acting rationally because of what's
[28:47] going on in the markets, you have to
[28:49] take the other side. I mean, that's what
[28:51] that's what Warren Buffett means when he
[28:54] says buy when there's blood on the
[28:55] streets. He doesn't
[28:56] >> he doesn't mean buy when the market's
[28:59] down. He means buy when people are truly
[29:03] panicking. When people are not making
[29:04] rational decisions and they're selling
[29:06] good stocks, good companies at
[29:09] irrational prices because they are fully
[29:11] panicked.
[29:11] >> March March of 2020 with crypto stocks,
[29:14] etc.
[29:15] >> Exactly. And when the market goes down,
[29:17] sometimes people will abuse this phrase.
[29:19] They'll say, "Well, the market's down 10
[29:20] to 15%, buy when there's blood on the
[29:22] streets." And it's like, well, there's
[29:23] no blood. This has been a very
[29:25] reasonable selloff. It's selling off for
[29:27] good reasons. People are repricing the
[29:29] future.
[29:30] >> I mean, like one example of that was um
[29:34] the first week after the tariffs went
[29:40] out. It's the the the first bit of the
[29:43] selloff. It's purely rational.
[29:45] >> If you put up 200% tariffs on China, the
[29:48] market should probably be down 5 to 6%.
[29:51] Shouldn't be down 40 though, right? And
[29:53] so that's how you kind of have to think
[29:55] about these things is when are when is
[29:57] the market and its market participants
[30:00] acting purely irrationally.
[30:01] >> Mhm.
[30:02] >> And that's actually I mean it's very
[30:03] hard to do as you know because everyone
[30:05] everyone gets emotional. Even the even
[30:07] the smartest people in the world get
[30:08] emotional. I mean I've worked for quite
[30:11] a few billionaire hedge fund guys and I
[30:14] can tell you this.
[30:17] Nobody nobody knows like people
[30:20] know a little bit more than others. And
[30:22] really what it comes down to is being
[30:24] able to keep like logic and emotionality
[30:29] when your emotionality in check and
[30:30] logic when things are going against you.
[30:32] And this is maybe the most important
[30:33] thing about being an investor in my in
[30:36] my personal opinion.
[30:36] >> If people don't know anything, how do
[30:38] you generate an edge in the market? It's
[30:40] >> that was a little flippant, but it's
[30:42] it's people do know. Jim Simons for sure
[30:44] knows things. Uh, but that's a that's a
[30:46] really good question. And it's it's not
[30:49] that
[30:51] edge is
[30:53] let me take a step back. When I first
[30:55] got into trading, the one of the reasons
[30:56] that I first got into trading is because
[30:59] I viewed it as a purest expression of
[31:02] your skill set applied. It's like if
[31:04] you're really intelligent, you can solve
[31:07] this massive markets puzzle. But the
[31:09] question is, do you want to solve the
[31:11] 30,000 piece jigsaw puzzle or do you
[31:14] want to solve like your kids puzzle that
[31:16] has three pieces that you just like the
[31:18] blocks like put the blocks in and
[31:22] trading the equity markets is like that
[31:25] 30,000 piece jigsaw puzzle and trading
[31:27] the crypto markets at that time was
[31:28] playing with blocks. And so obviously
[31:30] some people have an ego to it and
[31:32] they're like I want to do the hard thing
[31:33] to prove to myself that I can do the
[31:34] hard thing. As an investor, you just
[31:36] have to say, "No, I'm going to do the
[31:38] thing that makes me money. I'm not going
[31:39] to do the hard thing." I had some
[31:41] friends back in college that what they
[31:42] would do is uh they would go play poker
[31:46] at Lumiere. I went to school in St.
[31:47] Louis. They would go play poker at this
[31:49] casino called Lumiere outside St. Louis
[31:51] at 2 a.m. on a Saturday to pick off
[31:54] drunk people. It's like, well, that's
[31:56] the kind of thing that you need to think
[31:57] about when you think about what is
[31:59] generating edge. So when I first got
[32:01] into crypto, what I would do is back in
[32:03] 2016, 2017, I started reading these
[32:06] papers on the Malaysian stock market
[32:07] when it first opened up, like posts
[32:09] Soviet Russia collapse when the Russian
[32:11] stock market opened up and strategies
[32:13] for trading those markets. I would take
[32:15] those strategies and I would apply them
[32:16] to crypto.
[32:17] >> And by the time I'd graduated, things
[32:20] were going reasonably well for me. And
[32:22] so that's really how you generate edge
[32:24] is it's not it's not necessarily
[32:27] prognosticating about the future and
[32:29] knowing how everything is going to play
[32:31] out. It's what do you know that other
[32:34] people either aren't looking at or don't
[32:37] understand. Right? If you can truly say
[32:40] people don't understand like post chatb
[32:43] people don't understand how much memory
[32:45] is going to be needed. I'm going to buy
[32:46] memory.
[32:48] When I say people don't know it's
[32:50] like a lot of these macro
[32:52] prognosticators are going to talk about,
[32:53] well, rates are here and and the 10-year
[32:56] is there and the two-year is here and uh
[32:59] NASDAQ V is here and the VIX is here and
[33:01] skew is here and it's like that kind of
[33:03] stuff um quite literally doesn't matter
[33:06] in my opinion unless you're running a
[33:09] quant fund.
[33:10] >> Uh it's it can give you it can give you
[33:11] certain frameworks for things, but it's
[33:14] not going to make you money. I mean, I
[33:16] think a lot of macro talk is kind of
[33:17] just astrology for men.
[33:19] >> As somebody that's been inside these
[33:21] these funds, I mean, it it's useful for
[33:24] sort of figuring out what environment
[33:25] you're you're in, but it's not actually
[33:27] useful for making money. Where the money
[33:28] is made is figuring out what do people
[33:32] really not understand right now. Like
[33:34] what are people missing and what are and
[33:36] this can be for a variety of reasons.
[33:39] Um, I'll give you an example of what's
[33:41] happening in the markets right now. The
[33:43] trade has been for a very long time the
[33:45] Mag 7 trade and Mag 7,
[33:48] everyone crowded into that and everyone
[33:50] was looking at Mag7 as memory overtook
[33:52] it and absolutely shot up. And what
[33:54] people didn't understand is that if
[33:56] they're going to be building out $600
[33:57] billion of data centers, they're
[34:00] spending that money somewhere and that
[34:01] that money is going to memory and okay,
[34:05] so then they're also selling equity. So
[34:08] that's going to depress their prices and
[34:11] people are kind of nervous about the
[34:12] demand for that capex right now and now
[34:14] it's become a game of survival. These
[34:17] mag the uh the top tech companies are
[34:19] not building out data centers in order
[34:21] to get ahead. They're building them out
[34:23] in order to remain competitive with each
[34:25] other and so that then memory stocks are
[34:27] really taking off and okay now now that
[34:29] memory stocks are in a crazy crazy
[34:32] bubble you have to start to think to
[34:33] yourself well where are people not
[34:35] looking? Mhm.
[34:36] >> Like what are people not if they're so
[34:37] focused on memory? What are they not
[34:38] looking at? What's downstream for
[34:40] memory? The next trade is what is AI
[34:43] actually going to touch? What is AI
[34:46] going to change?
[34:47] >> Mhm.
[34:47] >> And the answer is well, you look at
[34:49] Accenture going down 30% in a day. It's
[34:51] changing that.
[34:53] >> It's changing biotech. Biotech's, you
[34:55] know, if you look at ARCG, which is
[34:57] Kathy Wood's uh, you know, advanced
[34:59] genomics fund. If you look at XBI, XBI
[35:02] is doing really well, but a lot of these
[35:03] things are starting to look really good
[35:05] and it's because they're genuinely going
[35:07] to benefit in a massive way from AI.
[35:10] So, you know, maybe short the
[35:12] consultant, buy Biotech. Defense is
[35:14] obviously, I think, going to be hu AI is
[35:17] hugely beneficial for defense companies
[35:19] right now as well because they're
[35:21] building, you know, smart forward
[35:22] deployed drones. Uh it's kind of
[35:25] interesting like the the the old world
[35:27] is dying and we're we're ushering in an
[35:29] era for the new world. And so now we've
[35:31] built the infrastructure with the with
[35:34] the hyperscalers. We've supplied the
[35:36] infrastructure with the Microns and
[35:38] SanDisks and Intels of the world. And
[35:41] now we're going to change the world. And
[35:43] so that's the next trade in my personal
[35:45] opinion and that's what people need to
[35:46] start looking at is is what's going to
[35:48] change. Today's episode is brought to
[35:49] you by Bitcoin IRA. Few weeks ago, I
[35:52] said crypto is dead. I meant most of the
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[37:58] mentioned biotech, uh, the arc fund.
[38:01] What else goes in that bucket for you or
[38:03] like what are you allocating to or think
[38:05] are is most interesting?
[38:06] >> Um, it's really right now I'm focused on
[38:10] sort of two two main areas that are
[38:13] almost barbell approach. It's the what
[38:16] is AI going to affect and then betting
[38:19] on American uh isolationism
[38:22] >> as well because I think what's what's
[38:24] happening right now is I mean you saw
[38:25] with the Iran war, you saw with the
[38:28] Venez with what's happening in
[38:29] Venezuela. Who knows maybe we're going
[38:30] into Cuba next. All of this has nothing
[38:32] to do with those specific companies. It
[38:34] has everything to do with China
[38:35] specifically.
[38:36] >> And so the question is uh how are we
[38:39] going to how are we going to be battling
[38:42] with China, right? And that's why I'm
[38:44] still a huge believer in Intel. Intel is
[38:46] at 600 billion market cap. TSMC, which
[38:49] is based in Taiwan, is at a 3 trillion.
[38:51] They're going to close that gap because
[38:52] the U critical. Imagine being able to
[38:56] bet on the Manhattan project,
[38:59] right? If you could go invest in nuclear
[39:01] weapons back in 1944, you take that
[39:04] opportunity all day. And that's what
[39:05] chips are, right? And so obviously,
[39:07] we're going to need to get away from
[39:08] TSMC and we're going to need to get
[39:09] we're need to get get into Intel. So
[39:12] that's and then the rare rare earth
[39:14] minerals. Ramx us is a little bit shaky.
[39:18] I don't know if I would touch that one,
[39:19] but uh Ramx is is is the safer is a
[39:22] safer play that that I would touch. And
[39:24] then you have I'm investing in biotech
[39:27] and robotics. Uh I know you had Andrew
[39:29] Kang on here. Also interviewed him on on
[39:32] my pod. I think that he has
[39:35] I'm nervous about where the nav is on
[39:40] robo strategy, but I really like the
[39:43] idea and I think that there there's
[39:44] going to be a good way to get into that
[39:46] at some point.
[39:47] >> Let's talk about that because I I think
[39:48] that we talked earlier about hyperlquid
[39:51] giving people access, right? And now
[39:53] what I think we have seen is um there's
[39:55] this whole new crop of these investment
[39:58] uh kind of vehicles that are coming out.
[40:00] So you have uh Robin Hood has a publicly
[40:03] listed vehicle that gives you exposure
[40:05] to private uh venture capital.
[40:08] >> Fundrise has one that you know exploded
[40:11] when they took it public. Uh Angelist
[40:13] has one as well. Most of those are kind
[40:16] of general uh earlyish stage uh venture
[40:21] capital or late preipo growth type you
[40:24] know exposure. They're not thematic.
[40:27] They're not in any way, you know,
[40:29] different than uh investing in a venture
[40:31] fund that somebody says, "Hey, give me
[40:32] some money. I'm gonna go find some good
[40:34] deals." It's just that now there's a a
[40:36] public ticker that you can get in and
[40:37] out of them. What Andrew is doing is
[40:39] more thematic in that it is just
[40:41] physical AI and robotics. And what I as
[40:44] I looked at it and I uh am an investor
[40:47] uh in it still hold today. Um what I
[40:49] find interesting is on one hand there's
[40:52] an access component. So, a lot of people
[40:53] will become interested because they're
[40:55] saying, "Hey, I can't invest in these
[40:56] private robotics companies myself, so I
[40:58] can buy this ticker and get exposure. On
[41:00] the other hand, as you point out, is
[41:02] that it trades at a premium to NAV, at
[41:03] least at the stated NAV. Um, and at
[41:06] times it's been pretty substantial. It's
[41:07] traded at 500% the stated NAV. That
[41:10] scares people. But when you go and you
[41:12] look at the actual companies, private
[41:15] markets have this weird dynamic of, you
[41:17] know, you raise your seed round at $20
[41:20] million valuation, you raise your series
[41:21] A at 50, your series B is at 200, and
[41:25] you're about to go raise your series C
[41:27] and it's going to be at 2 billion, but
[41:29] everyone still references the 200
[41:31] number,
[41:32] >> right? And so in the stock market, like
[41:34] you go from 200 to two billion over
[41:36] time, and people kind of see where you
[41:38] are. Now, there's also companies who
[41:42] like we're going to be at 2 billion and
[41:43] they're actually at near zero and just
[41:45] don't know it yet, right? And so there
[41:46] there's like a lot of opakqueness and
[41:48] and you got to kind of underwrite this
[41:49] stuff, but usually when I see these
[41:52] publicly traded, closed end funds that
[41:54] have private market exposure and you
[41:57] start to look at them, the marks are
[41:59] off. Not because they're doing something
[42:01] wrong or auditors or whatever. It's just
[42:03] that like the way that you have to value
[42:05] these on a like a marktomarket basis is
[42:07] always at the last fundraising round.
[42:09] >> Mhm.
[42:10] >> And so these companies make progress,
[42:11] especially when you have so much capital
[42:12] available to you in the private market,
[42:13] you may not raise money for two years,
[42:15] three years. So if it's 18 months after
[42:17] you last raised money, if you end up
[42:19] raising more money, it's because you're
[42:20] doing well.
[42:21] >> 100%.
[42:22] >> Right? And so it's like this weird
[42:23] dynamic of just me as an investor just
[42:25] trying to figure out for myself like
[42:26] what is the actual premium to the nav of
[42:28] some of these things. It's not as clear
[42:30] as just like what's the state of NAV and
[42:31] and what is it currently trading at?
[42:33] Right.
[42:33] >> 100%. And there's actually there's a lot
[42:35] to unpack here. You hit on a lot of
[42:36] things that I've been thinking about for
[42:38] a long time. Number one, I'll start with
[42:40] the Nav. I'll answer that question.
[42:42] There is a difference between NAV
[42:44] expansion and just general NAV. Right?
[42:48] So, what do I mean by that? If I'm
[42:50] looking at investing in Robbo Strategy
[42:51] and they ra let's let's say at an
[42:53] aggregate they raise at a two billion
[42:54] valuation across all companies. Now,
[42:56] they're trading at a four billion.
[42:58] You're 100% right. That might actually
[43:00] just be the true price of those
[43:01] companies now because maybe that
[43:03] happened six months ago. But what makes
[43:05] me nervous about investing whenever you
[43:07] look at any of these companies? What
[43:08] makes me nervous is well the NAV just
[43:10] went from 200% to 500% in 2 days, right?
[43:14] Did the companies do that? Like did
[43:15] something happen? Is there a change? Why
[43:18] did it do that?
[43:19] >> That's when you get nervous about NAV.
[43:20] The actual absolute number
[43:23] >> almost irrelevant in terms of investing.
[43:25] It's possible that if this thing raised
[43:27] at, you know, 200 200 million and three
[43:30] days ago it came out that they just got
[43:32] a $2 billion order from the US
[43:33] Department of the Department of War.
[43:36] Sorry, Department of War. Now, uh it's
[43:38] possible that that NAV should be,
[43:40] >> you know, mispriced like,000%.
[43:43] >> Right? So, like I I'm actually 100% in
[43:46] agreement there. So, as an as an
[43:47] investor, as a trader, what you want to
[43:49] be looking at when I say I'm nervous
[43:50] about NAV is well, how quickly did that
[43:52] expand and does it deserve does it
[43:54] deserve that expansion? So in in such a
[43:56] short period of time with that being
[43:58] said I actually think robot strategy is
[43:59] a brilliant brilliant vehicle and not
[44:02] only just for the reason that I think
[44:04] Kang's a smart guy and robotics is the
[44:06] future. It's because of something that
[44:09] I've been thinking about for a long time
[44:10] which is that the forward return in
[44:14] index funds
[44:16] might be lower in the future because
[44:18] companies are staying private so much
[44:19] longer. Mhm.
[44:21] >> Venture funds have made so much money
[44:24] over the last 15 years and the private
[44:26] market has expanded so much. Private
[44:28] credit has expanded to insane heights
[44:31] that now companies can wait until
[44:33] they're 1.5 trillion to go public. And
[44:35] they're actually taking those returns
[44:38] from your average American.
[44:40] >> And I actually don't necessarily think
[44:41] that's fair. either you loosen
[44:45] government restrictions on private
[44:47] citizens investing below the accredited
[44:50] investor threshold or you force
[44:52] companies to go and list earlier and
[44:55] stop taking money at a certain point.
[44:57] Obviously, I'm in favor of the first
[44:59] one, not the second one. But something
[45:00] needs to change.
[45:01] >> You can't just have companies going
[45:03] public after the private after a small
[45:06] cabal of private investors aided by
[45:07] government regulation takes all the
[45:10] profits. That's one of the things that I
[45:12] found so beautiful about crypto, right,
[45:14] is that anybody could invest at any
[45:16] time. There wasn't some well some assets
[45:19] obviously there were there were some
[45:20] cabalas that you had to contend with,
[45:21] but mainly across the board it was if
[45:24] you got your money into the ICO, you got
[45:25] your money into the ICO. If you if you
[45:27] made a Telegram account, you DM the
[45:29] founder, he was probably going to take
[45:31] your 5K check. That's how crypto was in
[45:33] 2017 to 2022,
[45:35] >> right? If
[45:36] >> you could people were angeling $1,000,
[45:39] right? And that I think is actually very
[45:41] important and something that we're
[45:42] missing. So what Andrew has done, what
[45:45] Fundrise has done, what all these other
[45:46] companies have done now, I think is very
[45:49] important. Take these private companies,
[45:51] roll them up, allow private allow
[45:53] private citizens that may not meet the
[45:55] accredited investor thresholds, invest
[45:57] into these companies, and take part in
[45:58] the American future. I mean, I'm right
[46:01] now very constructive on the markets,
[46:03] and I'm exceptionally constructive on
[46:06] these robotics, defense companies.
[46:08] uh what's being built out in Silicon
[46:10] Valley right now. I mean, people should
[46:13] be able to put their money to work. And
[46:15] so, I'm very grateful for these, you
[46:17] know, these uh these assets popping up.
[46:20] The only thing that I would hope is that
[46:22] at some point this actually becomes
[46:24] commoditized. It's like the same thing
[46:25] with happen with ETFs, right? The the
[46:29] expense costs just have to come down
[46:31] down down down cuz right now people are
[46:33] making a lot of money at expense of the
[46:35] retail investor. That's also why retail
[46:37] investors are punting on the weather.
[46:40] >> It's also why people are punting on
[46:42] sports is because they feel that they
[46:43] have like they're they're getting the
[46:45] real return that they quote unquote
[46:47] deserve from that. Like there's no
[46:48] middleman uh taking that from you.
[46:50] You're just in theory on on Kali or in
[46:54] theory on Hyperlid you're just betting
[46:56] directly against somebody else that
[46:58] wants to take the other side. And so the
[47:00] cost of the middleman is sort of cut
[47:02] out. Whereas in these vehicles, the cost
[47:04] of middleman's and by the way,
[47:06] rightfully so if you know better than
[47:09] anybody how hard it is to take a company
[47:10] public and like it takes a lot of work.
[47:12] It's very difficult and so people that
[47:14] do it should be compensated for it. But
[47:16] over time hopefully those costs come
[47:17] down.
[47:18] >> You know what's interesting to me is um
[47:19] I spent a lot of time focused on what I
[47:21] call like the independent investor. So
[47:22] these people get all their information
[47:23] online. They want to manage their own
[47:25] money. They're chasing financial
[47:26] independence whatever. And we've got
[47:28] this AI CFO product called Sylvia. And
[47:31] so uh people come in and they are owing
[47:33] read access for the product into their
[47:36] accounts and then they can talk to an
[47:38] LLM and they're getting all the context
[47:39] of their financial situation fed to the
[47:41] LLM and as you would imagine all the
[47:43] personal information is you know
[47:45] encrypted and secure and private etc.
[47:47] But what we can see is we can see kind
[47:49] of across the user base these different
[47:52] trends. And one of the things that we
[47:54] found very interesting is if you use
[47:55] Sylvia regularly or heavily your net
[47:58] worth has grown 16 to 40% in the last 6
[48:00] months. Now the reason why that's
[48:02] interesting is because
[48:03] >> in the last 6 months
[48:05] >> the last 6 months that that's pretty
[48:06] good
[48:07] >> to 40%. Now here here's what immediately
[48:09] when I hear that from somebody on our
[48:11] team I say well is that because only
[48:12] like rich people or you know whatever
[48:14] right
[48:15] >> across all income levels and across all
[48:18] starting net worth positions true 16 to
[48:20] 40%. Okay. So you start digging deeper
[48:23] and deeper and deeper into this. And my
[48:25] biggest takeaway is actually that there
[48:28] are three things that you can look at.
[48:30] The first is AI in this applied sense in
[48:34] education. If you want a child to learn,
[48:36] what happens? Give them oneonone private
[48:38] tutor. Healthcare, if you want somebody
[48:40] to be healthy, what do you do? Private
[48:41] one-on-one healthcare, you know, and
[48:42] insights, right? Finance, same thing. So
[48:45] having personalized insights on a
[48:46] one-on-one basis, of course, you should
[48:48] be able to grow your assets faster than
[48:50] somebody who doesn't use that type of
[48:51] thing. No different. You should learn
[48:52] better, etc. Okay? So there's something
[48:54] about using a AI based tool that gives
[48:57] you one-on-one personalized insights
[48:58] that definitely has an impact.
[49:00] >> The second thing is that you're paying
[49:02] attention. If you use these types of
[49:04] products, you care, you're measuring,
[49:05] you're you're you're inclined to be
[49:08] involved.
[49:09] >> You probably should grow faster than
[49:10] somebody who isn't, who's just kind of
[49:11] passively living their life, not paying
[49:13] attention, right? So those two things I
[49:14] think are like pretty common sense.
[49:16] >> The third thing though is how fast
[49:19] people's net worth grows regardless
[49:21] whether you use a product or not. Like
[49:22] the volatility
[49:24] >> of the things that people are holding
[49:26] now is so much greater than ever before.
[49:28] >> So people know about the Bitcoin stuff
[49:30] and you all like the things that have
[49:31] been popular over the last 5 years.
[49:34] >> But now we're talking about memory
[49:36] stocks are
[49:38] >> up 20% today.
[49:40] >> It's crazy. Micron was up 10% just off
[49:42] of an earnings, you know, call, right?
[49:44] >> So, okay, that's memory that that's a
[49:46] really hot sector.
[49:47] >> Like, no, man. If you go look at some
[49:50] like pretty basic stocks, I mean, one of
[49:51] the jokes right now is that Grinder, you
[49:53] know, the gay app is outperforming a lot
[49:55] of crypto coins over the last, you know,
[49:57] year.
[49:57] >> Yeah.
[49:57] >> And so, you go and you say to yourself,
[49:58] wait a second here, if capital and
[50:02] information now move at the speed of
[50:03] light, everything becomes more volatile.
[50:07] And so if you position yourself well,
[50:08] obviously that means you can
[50:09] significantly grow your net worth. But
[50:11] if you position yourself incorrectly, if
[50:13] you're betting on the weather, if you're
[50:14] doing some of these things and you're
[50:15] wrong, you can destroy your net worth
[50:18] overnight. And it almost feels again
[50:20] like that K-shaped economy is in
[50:21] economic outcomes, but also in the
[50:23] performance in the market. There seems
[50:24] to be this like bifurcation into like
[50:26] the winners and losers as well, right?
[50:28] >> I think in a huge way. And what's kind
[50:30] of interesting is that this is I think
[50:32] this is actually a function of AI in
[50:34] some ways
[50:35] >> and and also a function of just retail
[50:37] entering the market in in droves. If you
[50:39] go back 15 years and there's a new trend
[50:43] that comes out.
[50:44] >> Your average person cannot become an
[50:46] expert on that new trend in 3 days.
[50:49] >> Mhm.
[50:50] >> A little bit of knowledge is very
[50:52] >> tell the people on Twitter that
[50:54] >> they only need about an hour.
[50:57] It's like any anytime anything goes down
[50:59] it's like wow you're a geopolitical
[51:01] expert now wow you're a vi you remember
[51:03] when everyone became a veriologist
[51:05] >> in 2020
[51:05] >> I was right there with them I said ah
[51:07] let me do the math here
[51:08] >> but you know the kind of kind of the
[51:11] joke is that now it's kind of becoming
[51:14] possible
[51:15] >> with AI
[51:16] >> it's kind of it's actually genuinely
[51:17] possible to become an expert now and by
[51:19] using by using AI if you spend a week
[51:23] researching a topic with AI I you can
[51:26] get I mean obviously you're not going to
[51:27] become an expert but you can get up to
[51:29] speed on things and you can find things
[51:32] genuinely you probably were too lazy to
[51:33] find before. So you so for example like
[51:35] the Korean stock market just to hop in
[51:37] there for a second. I guarantee you that
[51:39] the only reason that SKH highinex went
[51:42] up as much as it did is because people
[51:44] were able to find it
[51:46] >> and people were able to bet on it.
[51:48] >> And maybe it would have gone up that
[51:50] much because there would have been some
[51:52] hedge funds that would have absolutely
[51:53] piled into it, but it would have been
[51:55] only the hedge funds that would have
[51:56] done it. But now you go into Claude and
[51:59] you type in what are the biggest
[52:00] beneficiaries from the AI trade and all
[52:03] these companies populate and your
[52:05] average person can do it in 3 seconds
[52:07] and then they do literally zero
[52:09] research. I've seen this happen many
[52:11] times cuz I host I host a a live stream
[52:14] twice a week just on the financial
[52:15] markets and we get all these comments
[52:17] from people that are like, "Yeah, I put
[52:18] my half my net worth into this thing
[52:20] because I found it. Uh Claude told me to
[52:22] buy it. What do you guys think about
[52:23] it?" I'm just like, well,
[52:25] >> you kind of already bought it, dude.
[52:26] >> Yeah, you kind of like you're you're in
[52:28] it, man. Ride it out.
[52:29] >> So did Stanley Duck Miller like enjoy
[52:30] it.
[52:30] >> And and Duck, I mean, I don't know if
[52:32] you know the story, but uh he heard a
[52:34] speech from Javier Malay. And then uh
[52:36] when he heard the speech, he basically
[52:37] was like, "I like this guy. I like his
[52:38] policies." He went on, he said,
[52:40] "Perplexity." And he just said, "What
[52:41] are the five most liquid Argentinian
[52:44] ADRs?" And he bought them. And that was
[52:46] like his due diligence. And then he's
[52:47] like, "And then I was spend some more
[52:48] time looking at it, but it was like an
[52:50] invest than than research." And so in a
[52:53] weird way what you're talking about so
[52:54] everyone can become an expert. My like
[52:55] framework for this is everything in our
[52:58] lives is becoming compressed time frames
[53:00] 100%.
[53:00] >> Right. Well now if you wanted to be a
[53:03] viologist as you know just the extreme
[53:05] example you had to one be interested in
[53:07] it then you had to go figure out like
[53:08] what school can you go to and you had to
[53:10] go sit in a bunch of classes take a
[53:11] bunch of tests do all the like whatever
[53:13] maybe that took 10 years right maybe it
[53:15] took six years whatever it was years of
[53:17] work to become a viologist.
[53:20] Could you get 70% of that knowledge
[53:24] in an hour of Googling AI models now? I
[53:29] don't know. Could you get 30% of it in
[53:30] an hour? Like like like you've
[53:32] compressed the time frame to get some
[53:34] material amount of that information. And
[53:36] then the beauty is that you don't have
[53:37] to know everything about viology.
[53:39] >> You just need to know specific for this,
[53:41] >> right? And so whether that's finance,
[53:43] that's, you know, uh social stuff,
[53:44] whatever. I do think that there's this
[53:46] weird element of like the me the the
[53:48] meme has truth to it and that you can
[53:51] very quickly get up to speed on things
[53:52] and then have an opinion about it.
[53:53] >> No, it does. I mean, I love the drunken
[53:55] Miller quote. I I'm a big big fan of I'm
[53:58] a big fan of studying the greats
[54:00] >> and making sure you understand how they
[54:01] make their decisions. And what he says
[54:03] specifically is anytime he hears a good
[54:05] idea, he buys a little bit of it because
[54:06] it actually forces him to investigate it
[54:08] and pay attention a little bit more. But
[54:10] once you put a little bit of skin in the
[54:12] game, I mean, the whole world opens up
[54:13] to you. And that's what's happening now
[54:16] with AI. I mean, people are putting a
[54:17] little bit more than skin in the game.
[54:18] They're full, you know, full porting
[54:20] things sometimes. And but that's we're
[54:23] opening up the markets to retail in a
[54:24] way that have never been opened up
[54:26] before because again, a little bit of
[54:27] knowledge is very dangerous. And people
[54:28] are willing to throw money at these
[54:30] things. And if you take a if you take a
[54:33] step back, it's a combination of that
[54:36] and then everything that we talked about
[54:37] at the beginning where people are more
[54:39] likely to be traders today because they
[54:41] want to escape the rat race. They want
[54:43] to escape the underclass. And so
[54:45] >> taking it full circle to the volatility
[54:47] point, that's why you're seeing all
[54:49] this. That's why
[54:51] >> Jane Street is cleaning up. That's why
[54:53] these market making firms are making a
[54:54] ton of money is because a when there's
[54:57] volatility on the market, market makers
[55:00] tend to make money as long as it's not
[55:01] trending volatility like unidirectional
[55:03] volatility.
[55:05] >> And two, uh you have more retail that
[55:07] are just willing to cross spreads and
[55:08] pay whatever the heck they want to to
[55:10] get into assets. I mean, you're
[55:11] obviously going to clean up.
[55:13] >> And so that's the shifting nature of the
[55:16] markets today. Before what you had is
[55:18] you had really low volatility on the way
[55:21] up.
[55:23] Generally you just have like a step step
[55:24] step step step step step step step step
[55:26] step step step step step in S&P and
[55:27] NASDAQ and super high volatility on the
[55:29] way down.
[55:29] >> Now you have it in both directions.
[55:31] >> What happens when volatility goes
[55:33] through the roof? Your cash actually
[55:35] becomes more valuable
[55:37] >> and looking for opportunities becomes
[55:39] more valuable. So, the way that I tend
[55:41] to approach the markets now is I have
[55:43] these I have these mega trends that I
[55:46] want to allocate to. And anytime we get
[55:49] extreme volatility to the downside, I'm
[55:52] buying them. I'm buying and I'm I'm
[55:55] getting in. And if we have incredible
[55:57] insane volatility to the upside, we'll
[56:00] sell a little bit, right? We'll take
[56:01] advantage of we'll take advantage of
[56:02] that. Maybe you sell some calls against
[56:04] your position or something like that to
[56:05] sort of dampen dampen the V because when
[56:09] V is this high you get presented with
[56:11] opportunities basically every 3 months
[56:13] where things collapse 30%.
[56:16] >> And you want to be in a position to get
[56:17] back in. If V is 5% I mean just
[56:21] mathematics
[56:23] if V is 5% the price and and and you go
[56:27] up 5% the likelihood that you see the
[56:30] price 5% ago is much lower than if V is
[56:33] 100% and the price goes up 5%. So then
[56:35] the question is if V is much higher it's
[56:38] actually better to sell.
[56:40] >> That's just general. It's better to sell
[56:42] because the probability that you're
[56:43] going to get that entry price again is
[56:45] much higher when V when V is high. This
[56:47] is this is my old school trading coming
[56:49] back to
[56:49] >> when you think of these mega trends. Is
[56:50] this just as simple as like physical a
[56:52] robotics, defense tech, bio uh biotech?
[56:55] Is that like the mega trends you're
[56:56] talking about or there a different way
[56:57] to think about it?
[56:58] >> That's it. I mean the only thing that I
[57:00] think I haven't hit on is energy and
[57:02] specifically I'm a big uranium bull.
[57:04] Okay.
[57:04] >> I think that well right now you see the
[57:06] Trump administration is actively
[57:07] encouraging innovation and startups
[57:09] within the nuclear sector. And what
[57:12] we're seeing right now is we're also
[57:14] seeing that oil is very fickle. It can
[57:17] be cut off from you at any moment. And
[57:20] having nuclear reactors is actually a
[57:22] way to ensure national security. That's
[57:24] why France is building more. That's why
[57:25] Germany's building more. That's why the
[57:27] US is finally looking at at throwing
[57:28] these up. And at some point, I think
[57:30] what's going to happen is that the
[57:32] reason that we haven't had any nuclear
[57:34] reactors put up in a long time is just
[57:35] safety issues. And I think people are
[57:37] going to get over that and the
[57:39] government's pushing it. And that
[57:41] doesn't necessarily mean the price of
[57:42] uranium is going to go up. This is very
[57:44] important when you invest in
[57:44] commodities. The price of uranium could
[57:46] go down because if demand for uranium
[57:49] goes up, we could over supply, but
[57:51] what's going to happen is that uranium
[57:52] miners are going to make way more money
[57:53] than they were making in the past. Cuz
[57:54] if they're selling 10x and price is down
[57:56] 50%, they're still 5x up on their
[57:59] revenue. And so I I hold uranium miners
[58:02] as well. So en like infrastructure
[58:05] as as it relates to energy. That's why
[58:07] obviously Ashen Brener bought Bloom
[58:10] Energy. He's he's very he's very bullish
[58:12] on that. I'm I'm bullish on it as well.
[58:14] But uranium I think is overlooked and
[58:16] then everything else that we've talked
[58:18] about so far. What about SpaceX? I think
[58:21] that
[58:23] SpaceX is interesting. And I'll say
[58:26] this, SpaceX at the at the 1.8 8
[58:31] trillion. I think it was trading at 94x.
[58:33] It was making 18 billion. So if it's
[58:35] trading at 1.8 trillion, it's 100x price
[58:37] to sales. Nvidia,
[58:40] >> is that high?
[58:41] >> It's reasonably high. But Nvidia in 2023
[58:45] was trading at 45x price to sales
[58:48] and the maximum draw down that it ever
[58:50] had from that moment that it hit 45x
[58:52] price to sales was 10%. And now it's
[58:54] trading at 22 and it just grew into its
[58:57] valuation massively. And so I think
[58:59] what's probably going to happen with
[59:01] SpaceX is that it will actually it's
[59:04] quite literally the only viable space
[59:05] company that exists on the planet.
[59:08] >> Space will be valuable. They will
[59:10] extract that value. And they have so
[59:13] much goodwill because of the way that
[59:14] Elon's been able to keep Tesla, which is
[59:16] a much much much weaker company at its
[59:18] core. I mean EVs are not a worldchanging
[59:21] technology when you compare it to SpaceX
[59:23] in the same way. They are, but like
[59:25] autonomous vehicles,
[59:26] >> there's a lot more competition and
[59:28] >> it's just not the same. So, I think
[59:30] SpaceX can actually maintain its
[59:32] valuation and probably become one of the
[59:33] most valuable companies in the world in
[59:35] 25 years. Now, the question is, are
[59:37] there better things to own over those
[59:39] next 25 years? Will there be a lot of
[59:40] volatility? But I'm a buyer of SpaceX
[59:42] under a trillion for sure, 100%. And
[59:45] people just need to realize that because
[59:46] of what happened with AI and because of
[59:49] the time compression that you just
[59:50] alluded to, people have a lot more
[59:52] leniency for companies that are trading
[59:54] at massive
[59:56] >> ratios because it's like, well, they
[59:58] might get there in 3 years instead of
[60:00] getting there in 15, 20 years. If Nvidia
[60:04] was able to close that gap in just two,
[60:06] I mean, who knows? Maybe SpaceX will be
[60:08] able to do it, too.
[60:09] >> There's this interesting idea of like
[60:10] chasing momentum, right? And um I think
[60:13] that that's part of why Bitcoin has been
[60:14] suffering is like capital just chases
[60:16] returns and that's a human nature, you
[60:18] know, kind of fallacy of of investing.
[60:21] But I also think though that what a lot
[60:24] of investors have learned is maybe you
[60:26] don't always have to be contrarian,
[60:27] right? You know, there's this whole
[60:29] belief that like you got to be the one
[60:31] to find the thing that nobody else
[60:32] invests in. If you go to the private
[60:34] market, maybe where people have less
[60:36] knowledge, right? is well I could go
[60:39] find the company no one else has found
[60:40] yet and be the first person to believe
[60:41] and all or like I don't know Sequoia
[60:44] Andrees and Benchmark are all investing
[60:46] in this thing uh probably got pretty
[60:49] good odds they got a lot more capital to
[60:51] keep investing in it they got a lot of
[60:52] you know a good network of people they
[60:54] can help recruit like there's all these
[60:55] things that increase the probability of
[60:56] success so like do you want to be the
[60:58] hero or do you want to make money
[61:00] >> SpaceX is a great example like how many
[61:02] venture funds would have been better off
[61:03] not investing in 20 different companies
[61:04] and just put all their money in SpaceX
[61:06] >> 100% Now, in hindsight, it's obvious,
[61:07] right? And it might not have been then,
[61:09] but SpaceX had a 30 or $50 billion
[61:11] valuation. There weren't a lot of people
[61:12] yelling and screaming saying it's
[61:13] overvalued, right? So, it was more of
[61:15] just like, do you think you can go to
[61:17] LPS and be like, hey, you're basically
[61:19] going to pay me to just buy this one
[61:21] company and you don't go look to see how
[61:23] you could do it yourself, right? I think
[61:24] there's a lot of people doing that.
[61:26] Public market, same thing. Like, why is
[61:28] the memory stocks all going up? Like,
[61:29] part of it is, yeah, the companies are
[61:30] doing incredible, but also part of it is
[61:32] just like, I don't know, man.
[61:34] I buy and it goes up 10%. Like, who
[61:36] cares if it's overvalued or not? Like, I
[61:38] made 10%.
[61:39] >> There's It's funny.
[61:41] I'll take you back to to 2021 for a
[61:44] second when every single person in the
[61:46] entire world in crypto specifically was
[61:49] telling me crypto is overvalued and I
[61:53] need to be contrarian and I need to go
[61:54] short it. And these were all people that
[61:57] were in the industry. I mean, they're
[61:58] like all deep in the industry. And I'm
[61:59] looking around going, do you not realize
[62:01] what's happening here? Everyone in the
[62:03] industry is bullish, but that's not a
[62:05] bad thing because all of the capital
[62:07] that's coming in is coming from outside
[62:08] the industry. And actually, we're just a
[62:10] tiny little piece of this entire thing.
[62:12] And yes, we might be all 100% 150 300%
[62:16] allocated to this thing, but 99.9% of
[62:19] the world, zero. They haven't touched
[62:21] it. They haven't touched it at all.
[62:22] >> They're intellectually short,
[62:24] >> right? They're intellectually short. So,
[62:25] like, you're not you're not being smart
[62:27] and contrarian. You're just being dumb.
[62:29] M
[62:29] >> you can't you have to figure out you
[62:30] have to basically realize like when
[62:32] you're being contrarian who are you
[62:33] betting against are you act are you
[62:34] actually betting against the herd or who
[62:36] are you betting against
[62:37] >> when you're betting against memory right
[62:39] now you're betting against the continued
[62:42] growth of AI like are you betting who
[62:46] cares how many people are in it you're
[62:47] betting against the continued growth of
[62:49] AI now some things to look out for if I
[62:53] watch the leverage ratios in Korea a lot
[62:55] because they've 3x since since the start
[62:57] of the year look if we get up to If I if
[62:59] we get up to like $50 billion pumping
[63:00] skinex, I'm going to be a little bit
[63:02] nervous if I start seeing
[63:04] >> nervous around that one stock or nervous
[63:06] around the overall AI trade.
[63:07] >> Nervous around the overall because it's
[63:08] a it's a symptom. It's like you you
[63:10] build when you're when you're looking
[63:11] for
[63:11] >> too much interest, too much enthusiasm.
[63:13] >> When you look when you look for the top
[63:14] of a bubble, you have to build a you
[63:16] have to build a picture. You can't just,
[63:18] you know, there's no one magic silver
[63:19] bullet. If a taxi driver starts talking
[63:21] to me about Intel, I'm probably selling
[63:23] out. If I, you know, if I meet somebody
[63:26] that's never traded, like every single
[63:28] person starts around me starts trading
[63:31] stocks. If all my doctor friends start
[63:32] trading stocks, if if it feels like 2021
[63:35] crypto again, which it doesn't because
[63:37] there's actual real
[63:38] >> Mhm.
[63:39] >> value being created here so far. Yeah. I
[63:43] mean, you can you can sort of look for
[63:44] these things, but right now I'm
[63:46] personally not seeing them. Now, if
[63:48] inflation comes roaring back, maybe I
[63:50] get a little bit nervous, but that seems
[63:52] to be tapered because of the war with
[63:55] Iran coming to a close. So, right now,
[63:57] I'm kind of just seeing green lights.
[64:00] But again, I'm not focused on memory
[64:02] specifically now because I think that
[64:05] we're probably in the last eight, maybe
[64:07] the eighth inning. And don't get me
[64:09] wrong, the eighth and ninth inning can
[64:10] be awesome.
[64:11] >> They can be awesome. I mean, you can
[64:13] score 10 runs in in the top of the
[64:14] ninth, right? Like, this happens. But
[64:16] I'm focused on what AI is actually going
[64:18] to change now.
[64:19] >> Right.
[64:19] >> You want to hear a crazy story about the
[64:21] top of the crypto market?
[64:22] >> Please.
[64:22] >> So um my wife and I uh went to dinner
[64:26] with a uh a very well-known uh investor.
[64:29] Um he's probably worth I don't know five
[64:32] six billion dollars at the time. And uh
[64:34] we're sitting at dinner uh down in uh
[64:37] downtown Manhattan. And uh at some point
[64:40] he who was not in the crypto industry
[64:42] but had told me he owned crypto pulls
[64:44] out his phone and he tells me, you know,
[64:47] look look what I own. And he's holding
[64:49] it there for like a little bit longer
[64:50] than it's like normal.
[64:52] >> Yeah.
[64:52] >> And I realized that he wants me to look
[64:55] at how much he owns, not just what he
[64:57] owns, right? And he had I don't know,
[64:58] maybe five, six different names,
[64:59] whatever. And I look and I have to do a
[65:01] double take because he has a billion
[65:03] dollars like$1.1 billion or whatever on
[65:07] his phone. And naturally I like can't
[65:11] help myself. I'm like you're not like a
[65:14] crypto person. I don't think you knew
[65:15] the word crypto 6 months ago. Like what
[65:19] the hell? And so he tells me a story as
[65:21] he was at dinner a couple of weeks
[65:22] before. Um, and remember this is in uh
[65:26] I'm I'm sorry. Uh, yeah, this is in like
[65:28] Decemberish time frame. He tells me that
[65:32] basically he had been at a dinner and
[65:33] somebody had told him they thought that
[65:35] crypto was going to do really well and
[65:37] he had put $200 million and it had 5xed
[65:41] and I don't remember what he had in it
[65:42] all whatever. So, first of all, like
[65:43] you'd be pretty rich to like off a
[65:45] dinner conversation go put $200 million
[65:47] in, you know, crypto. But two,
[65:49] he was very proud of himself and so like
[65:52] I would have been too if I was him. So I
[65:53] kind of like memory hole that and we
[65:55] have a great conversation like
[65:57] incredible human all this stuff. So it
[65:58] was like a little out of character for
[66:00] this one five minute part of the
[66:02] conversation but great. We leave the
[66:05] dinner and an Uber picks us up and we
[66:07] get in and he drives to the stop sign
[66:10] and you know how they have like the
[66:12] phone uh kind of in like a phone holder
[66:14] sitting there. He flips from the Uber
[66:16] app to Robin Hood and I can't help
[66:19] myself. I say, "Uh, oh, you you you into
[66:22] investing, not trading." I say, "You
[66:23] into investing?" He goes, "Yeah." I go,
[66:24] "What are you looking at?" He goes,
[66:25] "Dogecoin." And I should have
[66:27] immediately got on my computer and sold
[66:30] everything, right?
[66:32] But like I think back and it's like uh
[66:33] like I'm mentally scarred cuz I'm just
[66:35] like it wasn't just like one it was like
[66:37] the sequence of like dude everywhere I'm
[66:39] looking rich people Uber drivers
[66:42] everyone is excited
[66:45] >> there can't be much juice left.
[66:47] >> Yeah.
[66:48] >> And at some point not now but at some
[66:50] point the AI trade will be the same
[66:52] thing. Probably far you know far away
[66:55] but like we will get back to that kind
[66:56] of craziness in that industry as well.
[66:59] >> Keep your eyes open. I mean, this is one
[67:00] thing that I'll say is if you look
[67:02] around at the world, you'll find
[67:04] opportunity and you'll find information.
[67:06] Talk to your Uber driver, talk to the
[67:08] person checking you out, talk to the
[67:09] barista, talk to everybody, ask them
[67:11] what they're thinking.
[67:12] >> Well, you ask them about uh you know,
[67:13] Micron.
[67:14] >> Yeah. You know, no, straight up, ask
[67:17] your like when next time you go get a
[67:18] coffee, go, "Dear Bista,
[67:21] this is the most antisocial advice I
[67:22] could possibly give you, but go up to
[67:24] them and say, hey, have you heard of
[67:26] Micron?" "No." "What about Sandas?
[67:30] You ever looked at the uh you ever
[67:33] looked at the inflation rate in Korea?
[67:35] >> No, seriously. Seriously. Like the most
[67:37] blue-haired, bull ringed weight like
[67:39] person you can find. Like if they're
[67:41] talking about it, like it's probably
[67:44] you're probably close to the end.
[67:45] >> Is there anything that people are
[67:46] excited about right now that you think
[67:48] is actually like there should be a
[67:50] warning issue to investors?
[67:53] >> Um
[67:54] a warning issue to investors. Uh, not
[67:57] really a warning issue, but what I'll
[68:00] say is that stable coins are going to
[68:02] eat the world, but that does not mean
[68:04] Coinbase and Circle are going to do
[68:05] well. Um, that's that's my general take
[68:08] on these things. I actually think that
[68:09] Circle could be in a in some trouble.
[68:12] Uh,
[68:13] >> why?
[68:13] >> Because
[68:15] basically
[68:17] the banks are fighting so hard against
[68:19] this to buy themselves time to issue
[68:21] their own versions of stable cos.
[68:23] >> Yeah. And so it's possible that and
[68:26] additionally Tether's kind of winning.
[68:28] Tether is doing an incredible job and
[68:30] you can't invest in Tether
[68:31] unfortunately. I mean you can try maybe
[68:33] ping Paulo ask him to put like five
[68:35] bucks in he's going to say no but te
[68:37] Tether's actually winning AC across the
[68:39] board. And so it's like people are
[68:42] really excited about this stable coin
[68:43] thing but where are you gonna where you
[68:45] going to put I can't put my money to
[68:46] work in anything that I actually think
[68:47] is going to be valuable here. Mhm.
[68:50] >> Um everything else that people are I
[68:53] mean if you're talking about AI, if
[68:56] you're talking about biotech, if you're
[68:58] talking about defense, I mean
[69:00] like what what do you see that people
[69:02] are excited about? I'm curious like this
[69:03] is this is goes back to our point about
[69:05] being conturan. It almost feels like
[69:08] there aren't that many places to be
[69:10] contrarian. The hardest thing to do is
[69:11] just to stick with it. I I have a a very
[69:14] uh hot take on this which is um
[69:18] >> X it's kind of like the global chat room
[69:20] >> and now there are so many people paying
[69:24] so much attention and are so smart and
[69:26] have access to so much information that
[69:29] the herd is actually more right than not
[69:31] in the public market.
[69:32] >> Mhm. In the private market, there will
[69:34] still be a lot of things, you know,
[69:35] there's certain new industries or
[69:36] applications of technology. You know,
[69:38] there's a little bit more bifurcation
[69:40] there. But in the public market, think
[69:43] about all the names that people got
[69:46] excited about over the last, I don't
[69:48] know, a year or two that we could think
[69:49] of. They were right on majority of them,
[69:53] right? Definitely more than 50%, but
[69:54] like maybe even like 90 plus%.
[69:57] So actually it becomes less of a like
[70:00] you need to think for yourself and like
[70:02] go find some idea that no one's ever
[70:04] thought of before. You still need to be
[70:05] a critical thinker. You still need to
[70:06] like doublech checkck the analysis and
[70:08] all that kind of stuff. But it becomes
[70:11] more of a game of am I online enough and
[70:15] know who to follow and what information
[70:17] sources to pay attention to to see these
[70:19] narratives as they start to bubble up
[70:22] and then get ahead of or as I like to
[70:24] joke just get in the way of the
[70:25] narrative and you will benefit and so
[70:29] crypto people are excellent at this.
[70:32] >> It's true.
[70:33] >> And they're very well positioned for the
[70:34] public market. Now, we'd always joke
[70:36] we'd want the crypto markets to become
[70:38] more like the equity markets, and the
[70:39] equity markets have just become the
[70:40] crypto markets. And it's hilarious to
[70:43] see, but it's also true. It's the people
[70:44] that are terminally online. You see the
[70:46] headline for H for peptides potentially
[70:48] being approved by the FDA and PIMs goes
[70:51] up 25%.
[70:52] >> Dude, Wendy's
[70:52] >> and Wendy's. I mean, the Yeah, the
[70:54] Wendy's stock.
[70:55] >> Did you look and see what the what like
[70:57] the initial catalyst for this was?
[70:58] >> I don't know. I just thought it was a
[71:00] meme. It's just like everyone just
[71:01] decided.
[71:01] >> So, basically, they're they've got like
[71:03] some debt. So, I don't know all the
[71:04] details of like the actual
[71:05] >> heavily shorted. I know that, but
[71:07] >> but somebody on I think it was on Reddit
[71:09] was like, you know, the meme of like,
[71:11] well, if we suck at trading, we'll just
[71:12] go back to our jobs at Wendy's. Well,
[71:13] like if Wendy's in trouble, we're not
[71:14] going to have jobs there either.
[71:16] >> And so, somebody basically was like, we
[71:17] got to save we got to save Wendy's.
[71:19] >> That's incredible.
[71:20] >> And bam, there you go.
[71:22] >> Yeah.
[71:23] >> And so, like, you think about like
[71:25] imagine being Nelson Peltz.
[71:28] >> Yeah.
[71:28] >> Sitting there. I think it was like 20%
[71:29] of Wendy's, right? like incredible guy,
[71:32] great track record investing, all this
[71:33] stuff. And somebody coming to you and
[71:35] being like, "Hey, you know that company
[71:37] that we own, it's up 30% today." Why?
[71:41] Cuz some idiots on the internet want to
[71:43] make sure that they have a potential
[71:45] job.
[71:45] >> Yeah.
[71:46] >> You know, like like he couldn't
[71:47] comprehend it.
[71:48] >> Yeah.
[71:48] >> He probably would like to say thank you,
[71:51] >> but like that is the market. But like
[71:53] once you understand the meme and you
[71:54] understand what happened, you're like,
[71:55] "Dude, of course." Like duh, of course
[71:57] they were going to do that.
[71:58] >> Yeah. And you know, you know what it is
[71:59] almost? It's a it's a shared of self uh
[72:02] shared identity is what I'll say. That's
[72:05] what people really seem to crave. And
[72:06] this is what happened with GameStop. It
[72:08] seems to be happening with Wendy's.
[72:09] Whenever you get a meme stock that runs,
[72:10] it's because people, it's so much more
[72:12] fun to make money together. That's
[72:13] actually what kind of held
[72:15] >> crypto together in a big way is you were
[72:18] part of this entire ecosystem. And when
[72:20] crypto was going up, you were making
[72:22] money with your friends. You were having
[72:23] you had inside jokes, you were laughing,
[72:25] you were really you were like genuinely
[72:26] enjoying yourself. And I think that's
[72:28] coming to the equity markets as well. I
[72:30] mean there there cults around every
[72:32] single major asset now. There Sandis
[72:34] there's a Sandis cult. There's an INTC.
[72:36] If I if I if you tweet the ticker INTC I
[72:38] mean like you get insane engagement.
[72:40] It's the same thing with Hyperlquid,
[72:41] right? The Hyperlquid cult. And
[72:43] >> what started off in crypto is now
[72:46] everywhere in equities,
[72:47] >> of course.
[72:48] >> And the traditional guys can't wrap
[72:50] their heads around it.
[72:51] >> They can't wrap their heads around it.
[72:52] It's kind of it's kind of it's
[72:53] incredible for people like you and me,
[72:54] but like if I have one piece of advice
[72:56] to anyone that's coming from the
[72:58] traditional world and trying to trade
[72:59] these crazy markets is deprogram
[73:01] yourself
[73:02] >> and just realize that it doesn't matter.
[73:06] >> Like like a lot of these things that you
[73:07] think about, they don't matter.
[73:10] But you still have to be careful because
[73:12] at some point when things get
[73:14] overexuberant,
[73:16] the market will fall apart and you just
[73:18] have to make sure that you've taken
[73:19] enough profit by then to get to get
[73:21] 100%, right? So, like if you're if
[73:22] you're in Wendy's right now, you
[73:23] probably want to get out.
[73:25] >> Tell us about uh your podcast real quick
[73:27] before I let you go.
[73:28] >> Yeah. No, I I I appreciate that. So, I
[73:31] started actually I started this podcast
[73:33] four years ago with my friend Jonah
[73:34] Vanberg who was the head of who was oil
[73:36] trading at Goldman and then a partner at
[73:38] Val. I was a big crypto trader and then
[73:41] I then I was at Golden Train. We
[73:42] actually just recorded we recorded a
[73:45] call and put it online four years ago.
[73:47] Sort of blew up and today we live stream
[73:50] twice a week. Mhm.
[73:51] >> Wednesdays at 1:00 p.m., Fridays at 1:00
[73:53] p.m., and I just talk about my take on
[73:55] the markets. We get Jonah's take on the
[73:57] market, and we talk to really
[73:58] interesting guests, and hopefully you'll
[74:00] come on one day as well. I think it' be
[74:01] a lot.
[74:01] >> It's called Thousandx.
[74:02] >> It's called the ThousandX podcast.
[74:04] Thousand X.
[74:05] >> What we're trying to do is at some point
[74:07] compete with CNBC cuz I think there's
[74:08] actually a big gap in the market between
[74:10] influencers and traditional media
[74:13] >> 100%.
[74:13] >> And I think we can deliver something in
[74:15] the middle. The number one thing that
[74:16] you got to know about it is it's
[74:18] practitioners talking about the market.
[74:19] It's two people that have managed over a
[74:21] billion dollars actually telling you
[74:23] what goes on inside the markets, how a
[74:25] real hedge fund trader would think about
[74:27] it, and talking to you every two days.
[74:28] >> Yeah, it's valuable, right?
[74:29] >> Yeah.
[74:30] >> Amazing. Well, thank you so much for
[74:31] coming to do this. We'll do it again in
[74:32] the future.
[74:32] >> I appreciate it. Thank you.