Anthony Pompliano
He’s Made Money On 95% Of His Deals (Here’s How)
🇬🇧 EN🇪🇸 ES
Ask the tutor about this video
Sign in with a verified email and ask the tutor anything about this video.
TL;DR
Research summary
▶ Investment approach: conviction with diversification
The host introduces Christopher Zuk as Cass Investments’ founder, chairman and CIO, and says the firm manages $13 billion across areas including GP stakes, sports teams, crypto infrastructure, space and defense. Asked how to invest in a changing world, Zuk calls diversification the only free lunch: investors need conviction, but also enough diversification to withstand being wrong or early and to stay invested through volatility. He warns that concentration combined with leverage can quickly cause losses. Cass looks for a theme, chooses what it sees as the best risk-reward way to participate, and partners at scale with leading operators. He says investors should avoid haphazard investing, size positions appropriately and combine assets that move differently.
▶ Correlation and portfolio resilience
Zuk says portfolio construction should fit an investor’s personality, but warns against owning too much in assets that move together. He illustrates correlation with a shop that sells both sunscreen and rain gear, then says professional sports and GP stakes have little correlation with broad markets, while Bitcoin, crypto and large technology stocks can fall sharply together. He invokes the “holy grail of investing,” which he equates with modern portfolio theory, and claims that 8 to 15 uncorrelated assets can reduce risk by 80% and increase return. He says indexed markets and risk-on/risk-off flows make diversification harder, and that the aim is a smoother overall portfolio even though individual assets will perform differently across markets. He illustrates the point with an investor who owns all seven Magnificent Seven stocks: in his view, those holdings are versions of a similar trade, not true diversification.
▶ Crypto: investing in the infrastructure
Asked how Cass approached crypto, Zuk compares it to energy investing: betting on the commodity itself can carry more risk than investing in infrastructure that transports or processes it. He describes this as a picks-and-shovels approach. When it was difficult to know which coin would prevail and volatility was very high, Cass invested in companies and components that enabled the crypto ecosystem and blockchain to operate. He cites early investment in firms that helped back and start Solana as an example. As the sector matured, Cass became willing to invest in other parts of the ecosystem, but Zuk says he treats crypto itself as a trading vehicle and has chosen to invest more in the enabling infrastructure.
▶ Space and defense: new contractors and technologies
Zuk says Cass saw a decade ago the emergence of “neoprimes” alongside traditional defense contractors. He characterizes the traditional cost-plus model as prone to high costs, bureaucracy and slow delivery, while neoprimes fund development themselves in expectation of government purchases and aim to deliver faster, cheaper and more efficiently. He cites Anduril and companies developing radar systems, and describes an autonomous boat company he names as Seronic as having rescued two pilots in the Strait of Hormuz without a pilot or joystick operator. He says such companies were absent five to eight years earlier and points to European allies’ agreed increase in defense spending from roughly 2% to 5% of GDP, which he estimates will mean multiple trillions of dollars over several decades. On space, he credits SpaceX with changing launch economics and says NASA pays it to perform some work. He argues that inexpensive drones make costly missile responses uneconomic and create demand for smarter, AI-driven defense assets.
▶ The book, emotional discipline and downside analysis
After a Lava card advertisement, the host asks about Zuk’s book with Tony Robbins, The Holy Grail of Investing. Zuk says the book aims to make sound investing principles practical and help readers control emotion and stay with a diversified plan. He says investors often abandon plans when markets become bumpy, with fear, greed, cash pressure or career risk influencing decisions. Zuk claims that over Cass’s 25 years, it made money on 95% of its realized and unrealized private-market investments. He attributes the record to removing emotion and first examining the worst-case scenario; if the downside is bearable, he says, the upside can take care of itself. He describes Robbins as an optimist and himself as a pessimist, and says their contrasting outlooks helped make the book both financially grounded and accessible.
▶ Risk levels, private assets and position sizing
Zuk says an investor’s desired risk level and time horizon should determine the portfolio; bonds may suit someone seeking a smoother ride, while a younger person with a long horizon may have more opportunity to compound wealth. He points to Buffett’s investments in businesses and says Berkshire’s privately owned businesses generated much of its cash flow. Zuk argues that access to private assets is changing, citing funds that he says can offer daily purchases and quarterly exits with a $2,500 minimum and no accreditation requirement; he attributes the change to SEC rule changes the previous June. He says diversification need not mean boring assets, but a portfolio should not consist entirely of holdings that could go to zero. He describes a core-and-satellite approach: durable, predictable, low-correlation holdings form the core, while smaller positions in higher-risk assets such as Figure AI can contribute meaningfully if they rise substantially. He urges investors to size holdings as percentages of their portfolio rather than fixed dollar amounts, so decisions are less emotionally driven. As an example, he recounts a long-time investor who moved from repeated $1 million investments to percentage-based allocations after recognizing anxiety about losing more than his first million.
▶ Scarcity, moats and thematic investments
The host observes that Bitcoin, GP stakes and sports teams share scarcity, and asks how Cass connects new markets with established investment principles. Zuk agrees that scarcity and a moat matter, but says investments are selected for underlying themes. He links sports-team value to the shift from cable to streaming and the continuing reach of live sports to advertisers. He characterizes US professional sports leagues as monopolies and says an NFL team owner holds one 32nd of the league; he claims each team receives the same league dividend and that this year it is $450 million before games or concessions. He frames crypto’s theme as money in a different form and its democratization beyond central banks. For GP stakes, he points to growth in private assets and says expanding access through 401(k) and 403(b) accounts could direct a potential trillion dollars to private assets over a decade; Cass seeks to own the firms managing those assets and earn fees. He says these investments are driven by different factors and need not be boring to diversify. An Arch Public advertisement follows, promoting automated trading across crypto, stocks, commodities and ETFs, plus tax-loss harvesting.
▶ Risks, energy opportunity and AI employment concerns
Asked what concerns him, Zuk says complexity and emotion can undermine investment execution. He views high interest rates and oil prices as challenges, but argues energy supply is insufficient for demand growth and prices may rise further. He says Cass invests across energy, including small modular nuclear, storage and batteries, and cites buying businesses at four times cash flow as an opportunity. He respects investors who avoid fossil fuels on personal grounds, while saying his firm provides capital to energy companies because energy will remain necessary. His main AI concern is employment rather than science-fiction scenarios: he predicts autonomous driving will eliminate truck-driver roles in less than a decade, and expects more robots in factory work. He says the concern is lower hiring and workers needing retraining, not necessarily universal layoffs; he expects more entrepreneurial and service work, where human relationships and emotional judgment remain valuable. He cites robots making BMWs and sorting packages as examples of automation already underway. The interview closes with directions to the book and Cass Investments websites, which Zuk says provide materials about the firm’s funds and educational content.
Full transcript
[0:00] for our firm. We're 25 years old. We literally on 95% of all of our realized and unrealized investments in the private markets, we've made money. 95%. I'll put that batting average up against anybody. [music] But what it comes down to is that we completely remove emotion from the equation. What's going on, guys? Today, we got a great conversation with Christopher Zuk. He's the founder, chairman, and CIO at Cass Investments. He is business partners and co-author with Tony Robbins, and they wrote a book called The Holy Grail of Investing. Excellent book. Highly suggest you go check it out. But today's conversation,
[0:30] we talk a little bit about the book, but the majority of the conversation is focused on how do you invest in a dynamic environment where technology is rapidly changing. Bitcoin, crypto, space and defense, artificial intelligence, sports teams, GP stakes, and much more. These guys managed $13 billion in assets. He has navigated lots of different markets, many different industries, and they have done a fantastic job for investors. So, I think you're going to enjoy listening to one of the smart money guys talk about how he's investing in new technologies and new markets. All of this conversation is
[1:00] with Christopher Zuk. Hope you enjoy it. All right, Cass. I think it's very interesting. You run a $13 billion asset management firm. You invest across everything from GP stakes to sports teams to crypto infrastructure to space and defense. I mean, literally everything. And you've got a very unique view, I think, of you want to be concentrated in winners, but you also want diversification. Can you maybe help us understand for the investors that are watching this? How should they be thinking about investing in a dynamic world where it seems like there's lots of opportunity but human nature is still the same, markets are still structured
[1:30] very similarly? How are you guys navigating this given the large pool of capital you have to deploy? >> No, the first thing is that the only free lunch is diversification. And so it is critically important to have conviction and to believe in what it is that you're investing in. But at the same time, you have to be diversified enough to where if you happen to be wrong or early uh which can be the same as wrong, but you know, can work out okay uh in the end. But you need to be able to have a position that you can live with and that you can you know endure potentially some some time. So
[2:01] many people they get so concentrated in one thing that they're very excited about and so they go quote unquote allin in that particular area and ultimately what happens is the first sign of trouble particularly in the public markets they basically get you know taken out because they just don't have the staying power. You know we we have those saying in the industry you know they just don't have the gut to be able to handle the volatility of the public markets. In the private markets, we don't have to worry about that. But at the same time, there's other risks that you have to be mindful of. And so overconentration with a lot of leverage
[2:31] is a very fast way to get taken out on a structure. So what we try to do is try to look at everything from the standpoint of what's a theme that we can believe in. What's the best riskreward way to take advantage of that theme? And then we're going to find whoever is the very best in the world and partner with them and very large size and scale to be able to make it a a fantastic win-win for everybody that's involved. But it's something to where most people they literally just, you know, that sounds great. Let me do that. And they have no thesis behind it. They have no theme as
[3:02] to why they're doing it. And ultimately that can end up with a very just kind of haphazard, you know, as we refer to it in in in some sectors, you know, spray and prey. You know, we don't want to do that either. You got to have conviction. You got to pick names. You have to size them right. And then ultimately have things that are zigging and zagging at different times. That's the best way to build a portfolio. Now, when you're thinking about building this portfolio, given many of these different types of asset classes, you know, crypto is obviously highly volatile. Uh but I think that there's a increasing group of
[3:32] people in traditional finance that say, look, I'm not going to go put my whole portfolio. Maybe I'll go and put, you know, 1 to 5% though. That that's interesting. sports teams have, you know, very unique scarcity characteristics, but they're usually illquid and it's kind of hard to none understand what the price is in between these different funding rounds. So, when you're thinking about like modern portfolio theory, if you will, what are maybe some of the things that you have to adapt to given these types of assets? They all come with kind of pros and cons. And so, are there things that you're actually changing or or having to think about to to make sure that it
[4:02] works in the modern world with these assets? >> 100%. And the the greatest thing about portfolio management is you can do it any way you want. The negative is you can do any way you want. And so it's something to where you have to identify what your personality is. And for some people that's a more concentrated portfolio. For some it's a much more diversified portfolio. But ultimately what you cannot have is overconentration and things that correlate together. You know, and correlation is a big word that a lot of people kind of know what it is.
[4:32] But I I'll break it down make it very simple for people. You know, if you literally have a store and all you sell in that store is two items and you're a golf shop as an example and all you sell is rain gear. Well, on rainy days you're going to sell a lot of rain gear and you're going to sell nothing really in on sunny days. If you sell sunscreen and rain gear, well on sunny days you're going to sell sunscreen and on rainy days you're going to sell rain gear. Well, that's exactly what it is in the markets. Professional sports don't correlate to anything. You know, GP stakes where we own private asset management firms, they don't correlate
[5:02] to anything. you know, very very very little correlation. They have very little movement that's tied to the overall market. You know, Bitcoin, Crypto, the Magnificent 7, you know, all the big technology names, they're great businesses or they're great assets, but in excess and then they go down 50% and that's all you own. Do you have the stomach, the gut to be able to stay with it? So, what we have to try to do and and we've done this for 25 plus years is truly use what Ray Dalio refers to as the holy grail of investing. What uh for
[5:33] those that are in the industry, Harry Marowitz won the Nobel Prize proving modern portfolio theory. They're the same thing. Modern portfolio theory, holy grail investing. It's exactly the same thing. Just Ray Dalio made it understandable for people. It's just 8 to 15 uncorrelated assets can reduce your risk by 80% and increase your return. So that's been proven. That's why you won the Nobel Prize. You know, Mark's won the Nobel Prize. But most people can't find things that don't correlate because the markets have
[6:03] gotten so indexed and money flows all into one area or all out of that area and ultimately people are just whipsawed by all that volatility, but everybody is just literally in the same basic trade. It's risk on or risk off. So what we have done a great job of for literally 25 years is to come up with assets that don't move with everything else. That doesn't mean that they always work, right? I mean some things are going to work well in certain markets and not well in other markets. That's just investing. But what we want is to have
[6:34] the whole portfolio just do this smooth ride as opposed to this big roller coaster. That's the benefit of being able to, as you put at the beginning, you know, we can invest in anything anywhere at any time. That's a blessing and a curse because we got to go through 2,000 investments a year and decide what we're going to invest in, you know, 10, 12, 15 names a year, whatever it may be. But that's what we get paid to do. And that's the way that we can add enormous value. But for you and every other investor out there that's watching this,
[7:04] the key is to know what the correlation is between the assets that you own. I tell the story a lot. I literally made a speech, this was probably a year ago, and somebody in the audience says, "Christopher, I I just don't understand. Why do I need diversification? I own all seven of the Magnificent Seven. And I'm like, dude, you're not diversified. You own basically seven versions of more or less the same trade. Yes, they're different companies, but if you look at them on a chart, they all go up together and they all go down together in different amounts, but that's not
[7:34] diversification. Diversification is having things that literally go the opposite direction of each other depending what's happening in the market. Now, I don't know if you've ever seen like one of the documentaries where Steve Irwin, he's crawling through the woods and he's like, you know, there they are, whatever to the Bitcoin and crypto crowd. Uh, they're going to think that I've like found one of the smart money guys, right? Like, there he is. He's sitting in the chair. [laughter] Um, help us think through. You got a big pool of capital. You're thinking about going into, let's start, uh, maybe the first vertical with crypto. You could
[8:04] buy the coins, you can go buy Bitcoin, you could buy, you know, longtail other things, you could buy infrastructure, you could go and and maybe play it, you know, many different ways. How did you guys think about okay we want crypto allocation where do we go how do we actually invest capital in this industry >> we've done this in several sectors and and bitcoin and crypto would be one of those specifically which is that you know the actual end product you I'll use energy because it's such an easy thing for people to understand one of the largest energy investors in the world based in Houston Texas we obviously have a little bit of an information advantage
[8:35] and relationship advantage but you in the world of energy if you're only betting on what's going to be coming out of the ground and the price of that. There's a lot more risk than if you're investing in the in infrastructure that gets it from point A to point B and processes it and turns it into something that then can be transported, you know, liquid natural gas or whatever the case might be. So, you know, that's the picks and the shovels mentality, you know, if you use the term for for for gold mining. You know, you can bet on gold or you can buy the, you know, companies
[9:05] that are making the picks and the shovels. So, no matter who digs, as long as somebody digs, you're going to win. We did the exact same thing in the world of crypto is you it was very hard for us this was nearly you know 10 years ago now it's hard to believe but you know it was very hard to say okay which coin is going to be the best is it going to be Bitcoin is it going to be Ethereum you know h who's going to win and the volatility was off the charts still is but it certainly was then at that point we're like okay how do we take advantage of this trend this theme and do it in a
[9:35] way that actually provides us with certainty and predictability and so we did that by investing in the picks and the shovels. So, we invested in a lot of things that allowed the ecosystem of crypto to work and basically the blockchain components of that. You know, early investors with firms that helped back and start Salana as an example, which obviously was an amazing home run. But, you know, that was a better, more certain way to invest. Now, as it's gotten more mature, we will invest in other parts of the ecosystem, but
[10:06] primarily in the world of the crypto itself, it's as a trader. I have a trader background. I helped put myself through college trading futures when I was literally, you know, 19 years old. So, I learned a whole lot of mistakes, you know, from a lot of mistakes that I made and and and and did pretty well and obviously put myself through school. But I learned how to trade these assets. And crypto is an amazing trading vehicle, but I have not chosen to be an investor in that aspect of it. I've been much more of an investor in the things that allow the ecosystem to operate.
[10:37] >> I mean, it makes a lot of sense, right? And I know another area that you're very interested in is uh space and defense. We were talking before how this is completely changing. It's evolving at this rapid rate and some of it is frankly different types of people coming in and building different types of companies kind of different you know new approach uh at least philosophically uh but also the technology is rapidly evolving too. What have you seen there? How did you guys kind of think about space and defense and and how you wanted to invest? >> So we saw the trend literally a decade ago of what's referred to as neoprimes versus the primes. And I'm going to define that. The primes would be what
[11:08] the names that everybody knows, the General Dynamics, the Loheed Martins, etc. What they would do and have for 50 plus years, 60 plus years, is they would go to the government and say, "Look, you know, we think you ought to build this ship, plane, you know, whatever." And they the government would say, "Yes, if we'll we'll give you a contract to build that." And it was like if you go out and you get a home and it's a cost plus model for your home. Well, cost plus frequently, not always, but frequently can mean it costs a whole lot more
[11:38] because they get paid based on how much they spend. And you end up with all of the other bureaucracy and the slowdown. They have no incentive to hurry. There's no incentive to do anything that is like logical, right? Doesn't mean they're not great people and they don't go do great work. And obviously our country has been benefited from all of their efforts. But the business model of it is why you end up with $5,000 toilet seats. Okay? And that is something that you cannot do in this day and age. What has changed and
[12:08] Palmer Lucky and and at Anderl and a couple of others, they really have changed it to become neopimes. What is a neoprime? It is something to where we say, "Okay, we're going to build it. We're going to pay for it because we think you're going to buy it and we're going to do it faster, cheaper, more efficiently, and actually deliver something much more in line with the new technology the world demands. You know, we we actually literally we just released the paperback version of the holy grail of investing and we did that with an entirely new chapter on space
[12:39] and defense because while we were already investing in this in in the sector, it really did not have the profile or the opportunities that it does today. the number of new companies that have watched what what Palmer and the team at Andre have done and said we could do that and they've gotten capital to do exactly that for radar systems or you were early investors in Seronic the company that most people have no idea who it is but they know exactly what the company does because they're the company that makes the autonomous boat that
[13:09] saved the two pilots in the straight of Hormuz this spring. Literally that boat had no pilot and had no joystick somewhere controlling it. It literally was fully autonomous and it went out and it found those pilots and was able to rescue those pilots and bring them obviously to safety without putting anybody else in harm's way. So those kinds of companies literally did not exist 5, seven, eight years ago. Now there's a bunch of them not only here in the United States but also in Europe because when you think about Europe the
[13:40] you know the our allies have agreed to increase their spending from roughly 2% of their gross domestic product to 5%. That is literally multiple trillions of dollars over the next several decades that is going to be spent on defense and it's by mandate by agreement. So that's obviously the defense side. On the space side, I mean literally we have SpaceX changed everything and you know people can like Elon or not
[14:10] like Elon, it doesn't really matter. He has changed the way that we have the ability to get things satellites and other things into space. NASA now pays SpaceX to do effectively do their job in some areas. So they're able to do it faster, cheaper, more efficiently with less bureaucracy and just get stuff done which is obviously what entrepreneurship is all about. So the entire landscape has changed. You know there's a favorite line in the book that we talk about that you know became really really popular is
[14:40] you know in this day and age where drones can do so much damage but they're so small and they're so inexpensive you know with 30 40 $50,000 drones they can do a lot of damage. Well, you can't send a tomahawk and have a million dollars, you know, to knock out a $30,000 drone. So, you can't use Ferraris to shoot down Frisbes, right? You can't. You just can't do that. It doesn't. The math doesn't work. So, you have to create better, smarter, AIdriven, intelligent, you know, a assets that you
[15:11] can use to defend yourself. And that obviously is what's completely changed the game in the world of space and defense. >> This episode is brought to you by Lava. The Lava card is the first credit card that allows you to earn up to 5% back in Bitcoin on every single purchase. Most cards have steep annual fees and unclear points programs, but the Lava card offers a much better deal. Earn real Bitcoin every time that you spend. Plus, there's no annual fee. There's zero FX fees and zero spread when you spend internationally. On top of that, Lava gives you access to a Bitcoin line of
[15:42] credit, yield on cash, instant stable coin deposits and withdrawals, on and off ramps to and from your bank account, and much, much more. With Lava, you can borrow against your Bitcoin at the lowest rates, earn yield, move money globally, and stack Bitcoin with each and every purchase you make. Most financial services squeeze you with high fees, confusing rewards programs. Lava keeps it simple, and they help you build your long-term savings via your everyday spend. Visit lava.xyz xyz/pmp to get started in just a few minutes today. lava.xyz/pmp
[16:14] to get started today. Now, what I find so fascinating is uh you wrote this book uh the holy grail of investing. Your co-author is Tony Robbins. Uh a lot of people don't know this. Tony is a great investor. Um he has uh been a mentor and uh worked with a lot of the great investors over the years. Um can you talk a little bit about the two of you writing this book as I've read it? Um, it's very uh applicable, very real world kind of, hey, here here's how to do certain things, but it's also very philosophical at the same time. There's kind of a a
[16:44] thought process, a mindset behind it. At the same time, it's like, hey, here are specific examples. And when I think of a Tony Robbins, I think most people are like, hey, he can really help me control my emotions. He can help me, you know, think uh uh correctly. He can help me maybe go after my goals and and kind of the personal empowerment. But investing is kind of like the ultimate competition of can you actually do this stuff. So you take like his ideas plus what you do on a day-to-day basis. You put it together. It's kind of like theory and reality or meeting and if you're good, you can get a very big
[17:16] economic reward at the end of this thing. And so how have you two kind of thought about you know merging these two worlds together and and you know kind of uh having it show up in this book? >> Well, I I love that you said that and I'm very very grateful that you said that because that's what we really wanted. We wanted people to have a practical application of what is a very very hard thing to control, which is human emotion. And so much of the holy grail of investing is to allow people to stay with their plan. If they're diversified properly, if they have less correlated assets where something is
[17:46] working at basically all time, then the things that aren't working at that point in time, you know, you can live with it and you can move on. But most people get derailed from their financial freedom because of the fact that they bail off of the plan. they jump off the train just because it gets a little bumpy, so to speak. You can't do that. You got to have a plan you can stick with. And for anyone who's ever invested, we all know that the hardest thing to control is ourselves. The hardest thing to remove from the equation is emotion. You know,
[18:18] fear and greed is the only reason really why most things happen. You know, there's a saying in the industry, cash and career risk. people that either have cash burning a hole in their pocket like I got to put it somewhere or they're afraid of getting fired and so that's why they choose to make the investments that they do. Well, if if someone can be very very, you know, clinical and actually identify where the emotions are their enemy and just separate them and to have a very good logical thought process, they can do really really well.
[18:48] I mean, it's one of the statistics I'm most proud of for the for our firm. We're 25 years old and we literally on 95% of all of our realized and unrealized investments in the private markets, we've made money. 95%. I'll put that batting average up against anybody. But what it comes down to is that we completely remove emotion from the equation. We always focus first on what's the worst case scenario because we know if we can live with that, the upside will take care of itself. But what was so beautiful about the way that Tony and I, you know, kind of jive, if
[19:18] you will, in writing the book together and as partners is, and Tony said this in many places, he is the ultimate optimist. He believes everything's going to be great, and that's just kind of his mindset. And I'm kind of the ultimate pessimist. I'm always looking for what's wrong with the situation. So, we're good counterbalance to each other. And that actually came out with a book because there were many, many times that I'd write a chapter and, you know, here's what I think we ought to talk about and this is what investors need to know and, you know, this is what they should know, etc., et, etc., and Tony would read it and he'd go, "Christopher, this is really, really good stuff. They need to know this. They should know this, but
[19:49] they don't care." So, you got to make it interesting to them and also applicable to them, not theoretical. And so, bringing that practical example to what is obviously sound financial, you know, fundamentals. That's what ultimately allows people to get a lot out of the book. So, very glad that you felt that way >> when um when I was reading through it. The other aspect of this is uh I think diversification is something that people ascribe to um you know the Buffets of the world or or kind of like the the old guard, right? And um I'm very fortunate
[20:20] that I've got a number of friends and and folks I really respect that are older, been around for a long time, I like to say more experienced. And then I got a lot of friends who frankly um you know they're my younger brother's age or something and they're insane. These these kids are like I don't invest unless it goes up 10x and you know my diversified portfolio is like I got a sports gambling account. I've got prediction markets and I've got, you know, a meme stock like aren't I good? Um, and you can kind of see like there is like this maturation experience all that that plays into it. But I do think what becomes really interesting is that
[20:51] incorrectly people assign diversification means bonds or it means this thing that is really boring. But I think what if people read this, you know, crypto, uh, space and defense, sports teams, I know you guys are big in GP stakes, like all of those are sexy. They're new. They're shiny. They're kind of like a new way of getting access to certain markets, but the correlation levels are low. And so maybe talk about almost this element of taking an old timeless investing principle and then
[21:23] trying to fit it to this new world. Like that's what I feel like the book when I was reading it really does a good job of and you know you mentioned that the chapter on space and defense. I don't know if I've ever heard Buffett talk about space and defense. I've heard him talk about airplanes, right? Like you know what I mean? So like that's his version. But it does feel like the modern version is much more, you know, kind of what you would hear people talking about online than, you know, maybe what's in an old Buffett, you know, shareholder letter. >> The the the beautiful thing about investing is somebody can decide what level of risk they want to be on. If
[21:53] somebody does want to have a much smoother ride, then maybe bonds do have a place in their portfolio. But if they're 30 years old and they're making a really good living and they aren't going to touch this money for a long time for college, for retirement, or whatever the case might be, they've got a massive opportunity to compound wealth. And if you think about what Mr. Buffett has done, just because you mentioned him, I mean, he didn't really do bonds, right? Boring bonds. He bought great businesses like Geico and Seas Candies and CocaCola and American Express. I mean, you know, these are
[22:23] really, really iconic great businesses both in the public market and in the private market. And what most people don't realize about Mr. Buffett that he has this big flagship, you know, public portfolio that people look at, but the power and the real engine of what generated the success of Berkshire Hathway for decades was the private businesses that they own. That's where most of the cash flow came from. Geico is just a good example of that. you know, you've got amazing value in the private markets, but most people aren't
[22:55] there just because they can't look at it price every single day. Well, that's actually changing to where now you can invest in the private markets and you can watch it change every day. You can't sell it every day, but you can sell it maybe quarterly now. I mean, where else can somebody literally own a piece of SpaceX before it goes public? Own a piece of Anthropic, own a piece of OpenAI, own a piece of the the the Dodgers or own a piece of, you know, Paris St. Germaine alt literally that you can buy every single day with no accreditation requirement at a $2,500
[23:26] minimum and you can actually get out once a quarter, right? Well, that didn't exist until literally the SEC changed the rules last June. Now, literally every single investor in the world can own those types of assets in those types of funds, right? Didn't exist. But the core of your question is, do you have to be in boring stuff to be diversified? The answer is heck no. The key is you can't just have everything on a complete risk spectrum to where you know everything's got the opportunity to be a zero, right? The beautiful thing about
[23:56] GP stakes professional sports, it's it's I it's hard to even mathematically build a model where you're going to lose a significant amount of capital. Doesn't mean you can't lose money, but you can have a lot of predictability and a lot of durability. And if it has no correlation to what you do that has a lot more octane to it, you know, then you can really do well. I mean, as an example, we're early investors in Figure AI, the robotics company. Okay? We did a very small position in our portfolio because we kind of use a core and a
[24:27] satellite approach, right? The core is going to do what the core is going to do. It's very durable. It's very predictable. We know it's going to, you know, not really move around with the markets itself. But then around the periphery in the in in the satellites, if you will, we can own things that maybe are 50 basis points of a figure AI and then it goes up 10x. That's very meaningful to the return of a portfolio. Or you own a piece of anthropic that's gone up, you know, 20fold or SpaceX, etc. You know, you don't have to have a 10% position to do really, really well.
[24:58] The key is to know what the risk level is. And I'll say this to the audience and I just I implore you. If you don't remember anything else I say, remember this. Don't ever invest based on dollars, right? I'm going to put 100 grand here. I'm going to put 10 grand there, five grand here. Don't do that. Invest on percentages because percentages remove the emotion from the equation. I literally had, you know, an investor that's invested with me literally for 34 years. He invest for decades just a million bucks, a million bucks, a million bucks, a million. He's worth like $800 million. Why is he
[25:30] investing a million dollars in anything? that's not even worth his time. And the answer was finally I got to a psychology which was I remember how hard it was to make my first million and I just I don't I can't live with myself. If I lose more than a million dollars, I won't be able to sleep. Like okay, we're going to work through that. Get on the couch. We'll talk about it. But for him, he now invests 1% 1% 1% 4% 5% depending on the risk. If you do that, it's no longer an emotional decision. It is a literally mechanical manufacturing of returns in
[26:02] your portfolio that is what drives success over decades. You know what's fascinating to me is um again it goes back to like emotional control psychology but also plan and one of the things that um I have real time uh kind of understanding of is we've got this AI CFO product and so people use it to talk to AI with the context of their personal uh finances and and when they're on Sylvia one of the things that people use which wouldn't be surprising is hey I have a goal how do I get to my goal so you know kind of like hey
[26:32] there's an outcome that I want how do I go from where I am to to that. But actually, one of the most powerful things I see people do is they realize the more context the AI has, the more valuable it can be. And I think a lot about you as an investor. If somebody comes to you and says, hey, uh, I want to invest. Should I do a million dollars or should I do 1%. You know, you guys are kind of like, well, it depends on how much money do you have. It depends on, you know, what's your risk profile? Like, it's all so personalized. And the story you just gave about the guy who just kept doing a million dollars, it
[27:02] looks weird until all of a sudden he tells you like it was hard to make a million bucks and you're like, I kind of get it, you know, like it it's understandable. But then it's almost like, okay, that's what you were doing before the professionals got involved. And I think that what I find so fascinating about your guys approach is if I take three assets, Bitcoin, GP stakes, and sports teams, those three things thing, they're different industries. They're different drivers of value, whatever, but they all share scarcity. There's only so many sports
[27:32] teams, there's only so many good GPS, there's only so much Bitcoin. You know, if you just use that as like a heruristic, it almost feels like you guys pick these like very macro themes, overlay them with these timeless investing principles, and then just say like, how do we help our clients get exposure to those themes? And you've got the private funds, you've got the 40X, like like there's a lot of different ways that you guys are serving clients. And you know, I mean, look, the results don't $13 billion in assets. you know, you guys are no dummies, right? [snorts] >> Well, it's it's a it's a really really good point that you made is they they all three of what you described have a
[28:03] level of scarcity. They have a level of a moat, if you will. And to quote Mr. Buffett again, you know, the very very best businesses or assets that you want to own have a moat around them and therefore it provides a level of protection. But it goes back to that thematic side of it. You know, people think, you know, professional sports that we own them because they're cool and they're different. No, it's not anything about that. It's about cord cutting. Cord cutting. People move from broadcasting cable to streaming. If you only have the ability to watch live
[28:34] sports, you know, as as something that you're going to be interested in, well, obviously you're going to watch commercials when you do that. That means that you're going to ultimately see the enormous value of those, you know, those those business models increase because the only way for the advertisers to reach your audience is through those online and those live platforms. So, that drives value and it drives value in a way that most people never fully appreciate. I'll give you I'll give your audience something they probably don't know. Um, most people when they think of
[29:05] sports, it's a trophy asset, etc. And it's actually just this really fantastic business that is a monopoly in the United States. You actually have nobody that's allowed to compete with you without approval from the league. And by the way, you own a piece of the league. This is what most people don't know. When you own one NFL team, you own your 132nd of the NFL. Whether it is literally the first place or the last place team, you're going to get the same dividend check from the league. This year, that's $450 million before you ever play a game, before you ever sell a
[29:35] hot dog. That is your revenue. It's really easy to make money if you start with that kind of a head start. So you have this really big moat that's a monopoly and you have this enormous theme that's driving it. In the case of, you know, crypto, it's the theme is not about, okay, here's a new coin or here's a new, you know, you could do a new quarter, right? And they have a 50 cent piece, right? I mean, you could do that, but that's not the whole point. The point is to be able to have money that is in a different form that is used in a different manner. That's the theme and
[30:05] the way that you're getting democratization of those assets outside of just necessarily the central banks. That's the theme behind crypto. When you look at GP stakes, it has nothing to do with owning a private asset management firm. It has to do with how to take advantage of the growth of private assets and the fact that literally billions and billions of dollars are moving into the private asset space. We actually have on the holy grail of investing here in a couple weeks. We're going to drop the episode with Secretary of Labor Keerling where we talk about the um expansion and the opportunity for
[30:38] private investments to now be available inside of a 401k or a 403b, a retirement account. So now you have the ability to do that for the first time. that is going to be potentially a trillion dollars over a decade that goes into private assets. Somebody's going to get paid to manage that money. We want to own the firms that are going to be managing those assets because of the fact that we get paid the two and the 20, if you will, as opposed to being the one paying the two and the 20. That's the advantage of it. So, it's the theme itself with a moat. And none of those,
[31:09] to your point, correlate with each other. They're completely independent of each other. They're all going to make money or lose money based on different factors at different times for different reasons. That is the beautiful thing about diversification. And it doesn't have to be boring. None of those are boring. And they've delivered fantastic rates of return over time. Today's episode is brought to you by Arch Public. Arch Public has just expanded its agentic trading platform beyond crypto. So pay attention. This is a big one. Now they are automating strategies across stocks, commodities, and ETFs.
[31:40] And I think that this is going to be huge. You can now automatically take profits when one market hits new all-time highs and rotate that capital into other markets showing more opportunity. Whether you're rotating capital into AI stocks, gold, if you're investing in the S&P 500, or you're accumulating Bitcoin, Arch Public brings real discipline and automation to your investment strategy. Additionally, they've launched a powerful new tax loss harvesting tool. With crypto being so volatile and its exemption from the wash sale rule, Arch Public can offset gains with losses without compromising your long-term positions. It's exactly what
[32:11] every serious investor does. Institutional grade automation that works across every major asset class. There's no more emotional trading. No more missing tax opportunities. Just smarter, hands-free execution of your preferred strategies. Go to archpubic.com right now. Connect with their team. Set up [music] a time. Bring your accountant if you'd like. Then you can learn what automated trading can do for you. archpub.com. What keeps you up at night? Like right now there there's a an entire doomer perspective. AI is going to kill us. I don't know if you got that memo. Um, you know, so be careful. Software's going to
[32:42] murder you in your sleep. Uh, oil's, you know, 100 bucks. Uh, 10 years at 5%, they just raised interest rates. The world's supposed to end, right? I don't know if you got that, uh, that message, but um, what keeps you up at night in in terms of separating maybe the noise from the signal. >> And it's again, that's where emotion is the enemy of execution, right? Uh, Tony has a saying, complexity is the enemy of execution. And I've added to that and said complexity and/or emotion is the enemy of execution particularly when it comes to investing. Um there are reasons
[33:12] to be concerned about all of those things. Interest rates, you know, they're high. That creates challenges. Oil, it's high. That creates challenges. By the way, it's going to go probably a lot higher. The supply demand picture in energy is completely out of whack. uh we talk about it a lot in the book, but you you just you're not producing enough energy for the growth of demand and eventually you're going to have just this dramatic supply demand balance that you know is going to be an example of what we've seen in in in the Middle East just over a long period of time. Well,
[33:43] if you have that for a long enough period of time, it creates real pressures on price. And to be very clear for the audience, we invest in all energy. We're very large and small modular nuclear. We're very involved in storage and battery. You know, we're we're we're going to do whatever makes money because we're for all energy and we're against all poverty. But so, you know, energy is is is is a challenge, but it's also an opportunity. I mean, we're buying business at four times cash flow. Four. It's really really really hard to lose money if you buy a business at four times cash flow. And there's a lot of that.
[34:13] >> Very hard. >> Very hard. And people have left the world of energy, fossil fuels in particular, because of their personal belief system. And we have total respect for that. That's their freedom. We want them to have that freedom, but we also have the freedom to provide capital to those companies because we still need to operate our iPhone and this camera, etc., etc. So, we're going to need energy for a long time and we want to make money from producing that energy. But back to the point is that when you think about what scares me or what keeps me up at night, you know, AI does scare me not because I think that Terminator
[34:44] or the Matrix is going to happen, even though, you know, I've had some images of that in my head, but realistically, what I think that the real concern I have is jobs. And you know, I've said it for now a decade. I know it's quoted all over the place. You know, AI doesn't replace people, but people who use AI will replace people. It is so true. And that doesn't mean that we're going to have this mass exodus of the job force. You know, except for in certain areas. You know, there won't be truck drivers in, you know, less than a decade. There
[35:14] won't be any. It will all be autonomous driving. You're going to have more and more robots doing factory worker type roles. It's just that is the reality. And we got to replace and train up those people to be able to provide for their families through that environment. Um, so my concern is not that we're going to see everybody laid off. My concern is that you're going to have a lot of people who are not able to optimize what they do, not be fulfilled by what they do, and you're just not going to have as much hiring because company are going to
[35:44] be able to grow faster with less people than they did before. And that ultimately could lead to significant pain in a lot of sectors of our economy both here in the United States and around the world that people are just going to have to retrain. And I think they will retrain, but it's going to be in a way that just is much more entrepreneurial driven, lot more service driven because, you know, no matter what, that robot is not going to be able to do the same things that a human is is when it comes to emotion. And I don't think that will happen anytime soon,
[36:15] right? Could it happen 50 years from now? Maybe. But I'm not, you know, I'm not thinking that far out. I do think over the next five years, they will be able to do the rote mechanical things just like they are right now. Figure AI has robots making BMWs in the southeast part of the United States. They have things that can literally sort packages much better than a human being can in in UPS factories. Those are already here. It's happening. It's only going to proliferate. So, we got to have people that can do things that others that
[36:45] robots can't. And that is going to require sensory acuity. It's going to require that ability to have relationship and that human touch is going to matter more than anything. I do not want a robot, you know, at my bedside if I'm in the hospital one day. I want a person. You know, it's funny is I always ask people two questions. Uh at what point will you trust the robot in your home to babysit your kids? Like, you know, everyone likes the idea of it doing the laundry, uh maybe putting away the dishes. Babysitting your kid feels a little bit more uh
[37:16] okay, I don't know if I'm ready for that. And then the second is how many of the brain computer interfaces have to be implanted successfully with no problem before you're ready to try it. You know, some people are like a hundred. Some people are like, you know, a million. I don't know million. Still not that many. You know, it's like that there's some number for everybody. But when you start to think about this stuff, it it is the human, you know, machine interaction is going to significantly change going forward. And there's uh you can be scared of it, you can be worried about it, or you figure out, hey, what's
[37:47] actually going to happen here? How do I position myself to uh you know, if it does work to uh to benefit from it. So, I think you guys are uh doing a fantastic job. Um the holy grail of investing, you and Tony Robbins wrote this book. Um I think it is fantastic. I highly suggest everyone go check it out. Um what they just search online and can find it uh anywhere books are sold. >> Everywhere books are sold. You can go also go to the holy holy girlinvesting.com. Uh the advantage of going there is you obviously can go get the book via Amazon or wherever, but you also can get all the content that we do related to the podcast. And we also have a newsletter
[38:18] that they can subscribe to that gets delivered right to their inbox that helps people understand what it is that we're thinking about every day. Gives you an idea of okay, where's the puck going? You know, we've done really really well for 25 years identifying where the trends are and somebody who subscribes to that gets that most current information. So we encourage them to do it. What was the website? >> Holy Grail ofinvesting.com. >> Amazing. And then um what about casinvestments? If people are interested in some of the uh the investment stuff that you guys are doing, where can they go learn more about that firm? >> That that one's also really easy.
[38:49] casinvestments.com uh they can get information on everything that we do uh across the private funds that we have and the 40act funds that we have and everything in between as well as a lot of thought leadership and just educational materials. One of the things we really take pride in is that we provide people with great, you know, opportunities to learn in depth about what it is they might be interested in. Not just specifically what we do and how we do it, but actually things that they can use in all aspects of their life, all aspects of their investing and all that's available on the website.
[39:20] >> Here I was thinking I was talking to a very smart successful investor. I didn't know you were a branding genius. You know, just the website is the name. It's pretty good. >> I appreciate that, >> Cass. I appreciate it very much. Thank you for taking the time to do this. We'll do it again in the future. >> I would love to do so.
[0:30] we talk a little bit about the book, but the majority of the conversation is focused on how do you invest in a dynamic environment where technology is rapidly changing. Bitcoin, crypto, space and defense, artificial intelligence, sports teams, GP stakes, and much more. These guys managed $13 billion in assets. He has navigated lots of different markets, many different industries, and they have done a fantastic job for investors. So, I think you're going to enjoy listening to one of the smart money guys talk about how he's investing in new technologies and new markets. All of this conversation is
[1:00] with Christopher Zuk. Hope you enjoy it. All right, Cass. I think it's very interesting. You run a $13 billion asset management firm. You invest across everything from GP stakes to sports teams to crypto infrastructure to space and defense. I mean, literally everything. And you've got a very unique view, I think, of you want to be concentrated in winners, but you also want diversification. Can you maybe help us understand for the investors that are watching this? How should they be thinking about investing in a dynamic world where it seems like there's lots of opportunity but human nature is still the same, markets are still structured
[1:30] very similarly? How are you guys navigating this given the large pool of capital you have to deploy? >> No, the first thing is that the only free lunch is diversification. And so it is critically important to have conviction and to believe in what it is that you're investing in. But at the same time, you have to be diversified enough to where if you happen to be wrong or early uh which can be the same as wrong, but you know, can work out okay uh in the end. But you need to be able to have a position that you can live with and that you can you know endure potentially some some time. So
[2:01] many people they get so concentrated in one thing that they're very excited about and so they go quote unquote allin in that particular area and ultimately what happens is the first sign of trouble particularly in the public markets they basically get you know taken out because they just don't have the staying power. You know we we have those saying in the industry you know they just don't have the gut to be able to handle the volatility of the public markets. In the private markets, we don't have to worry about that. But at the same time, there's other risks that you have to be mindful of. And so overconentration with a lot of leverage
[2:31] is a very fast way to get taken out on a structure. So what we try to do is try to look at everything from the standpoint of what's a theme that we can believe in. What's the best riskreward way to take advantage of that theme? And then we're going to find whoever is the very best in the world and partner with them and very large size and scale to be able to make it a a fantastic win-win for everybody that's involved. But it's something to where most people they literally just, you know, that sounds great. Let me do that. And they have no thesis behind it. They have no theme as
[3:02] to why they're doing it. And ultimately that can end up with a very just kind of haphazard, you know, as we refer to it in in in some sectors, you know, spray and prey. You know, we don't want to do that either. You got to have conviction. You got to pick names. You have to size them right. And then ultimately have things that are zigging and zagging at different times. That's the best way to build a portfolio. Now, when you're thinking about building this portfolio, given many of these different types of asset classes, you know, crypto is obviously highly volatile. Uh but I think that there's a increasing group of
[3:32] people in traditional finance that say, look, I'm not going to go put my whole portfolio. Maybe I'll go and put, you know, 1 to 5% though. That that's interesting. sports teams have, you know, very unique scarcity characteristics, but they're usually illquid and it's kind of hard to none understand what the price is in between these different funding rounds. So, when you're thinking about like modern portfolio theory, if you will, what are maybe some of the things that you have to adapt to given these types of assets? They all come with kind of pros and cons. And so, are there things that you're actually changing or or having to think about to to make sure that it
[4:02] works in the modern world with these assets? >> 100%. And the the greatest thing about portfolio management is you can do it any way you want. The negative is you can do any way you want. And so it's something to where you have to identify what your personality is. And for some people that's a more concentrated portfolio. For some it's a much more diversified portfolio. But ultimately what you cannot have is overconentration and things that correlate together. You know, and correlation is a big word that a lot of people kind of know what it is.
[4:32] But I I'll break it down make it very simple for people. You know, if you literally have a store and all you sell in that store is two items and you're a golf shop as an example and all you sell is rain gear. Well, on rainy days you're going to sell a lot of rain gear and you're going to sell nothing really in on sunny days. If you sell sunscreen and rain gear, well on sunny days you're going to sell sunscreen and on rainy days you're going to sell rain gear. Well, that's exactly what it is in the markets. Professional sports don't correlate to anything. You know, GP stakes where we own private asset management firms, they don't correlate
[5:02] to anything. you know, very very very little correlation. They have very little movement that's tied to the overall market. You know, Bitcoin, Crypto, the Magnificent 7, you know, all the big technology names, they're great businesses or they're great assets, but in excess and then they go down 50% and that's all you own. Do you have the stomach, the gut to be able to stay with it? So, what we have to try to do and and we've done this for 25 plus years is truly use what Ray Dalio refers to as the holy grail of investing. What uh for
[5:33] those that are in the industry, Harry Marowitz won the Nobel Prize proving modern portfolio theory. They're the same thing. Modern portfolio theory, holy grail investing. It's exactly the same thing. Just Ray Dalio made it understandable for people. It's just 8 to 15 uncorrelated assets can reduce your risk by 80% and increase your return. So that's been proven. That's why you won the Nobel Prize. You know, Mark's won the Nobel Prize. But most people can't find things that don't correlate because the markets have
[6:03] gotten so indexed and money flows all into one area or all out of that area and ultimately people are just whipsawed by all that volatility, but everybody is just literally in the same basic trade. It's risk on or risk off. So what we have done a great job of for literally 25 years is to come up with assets that don't move with everything else. That doesn't mean that they always work, right? I mean some things are going to work well in certain markets and not well in other markets. That's just investing. But what we want is to have
[6:34] the whole portfolio just do this smooth ride as opposed to this big roller coaster. That's the benefit of being able to, as you put at the beginning, you know, we can invest in anything anywhere at any time. That's a blessing and a curse because we got to go through 2,000 investments a year and decide what we're going to invest in, you know, 10, 12, 15 names a year, whatever it may be. But that's what we get paid to do. And that's the way that we can add enormous value. But for you and every other investor out there that's watching this,
[7:04] the key is to know what the correlation is between the assets that you own. I tell the story a lot. I literally made a speech, this was probably a year ago, and somebody in the audience says, "Christopher, I I just don't understand. Why do I need diversification? I own all seven of the Magnificent Seven. And I'm like, dude, you're not diversified. You own basically seven versions of more or less the same trade. Yes, they're different companies, but if you look at them on a chart, they all go up together and they all go down together in different amounts, but that's not
[7:34] diversification. Diversification is having things that literally go the opposite direction of each other depending what's happening in the market. Now, I don't know if you've ever seen like one of the documentaries where Steve Irwin, he's crawling through the woods and he's like, you know, there they are, whatever to the Bitcoin and crypto crowd. Uh, they're going to think that I've like found one of the smart money guys, right? Like, there he is. He's sitting in the chair. [laughter] Um, help us think through. You got a big pool of capital. You're thinking about going into, let's start, uh, maybe the first vertical with crypto. You could
[8:04] buy the coins, you can go buy Bitcoin, you could buy, you know, longtail other things, you could buy infrastructure, you could go and and maybe play it, you know, many different ways. How did you guys think about okay we want crypto allocation where do we go how do we actually invest capital in this industry >> we've done this in several sectors and and bitcoin and crypto would be one of those specifically which is that you know the actual end product you I'll use energy because it's such an easy thing for people to understand one of the largest energy investors in the world based in Houston Texas we obviously have a little bit of an information advantage
[8:35] and relationship advantage but you in the world of energy if you're only betting on what's going to be coming out of the ground and the price of that. There's a lot more risk than if you're investing in the in infrastructure that gets it from point A to point B and processes it and turns it into something that then can be transported, you know, liquid natural gas or whatever the case might be. So, you know, that's the picks and the shovels mentality, you know, if you use the term for for for gold mining. You know, you can bet on gold or you can buy the, you know, companies
[9:05] that are making the picks and the shovels. So, no matter who digs, as long as somebody digs, you're going to win. We did the exact same thing in the world of crypto is you it was very hard for us this was nearly you know 10 years ago now it's hard to believe but you know it was very hard to say okay which coin is going to be the best is it going to be Bitcoin is it going to be Ethereum you know h who's going to win and the volatility was off the charts still is but it certainly was then at that point we're like okay how do we take advantage of this trend this theme and do it in a
[9:35] way that actually provides us with certainty and predictability and so we did that by investing in the picks and the shovels. So, we invested in a lot of things that allowed the ecosystem of crypto to work and basically the blockchain components of that. You know, early investors with firms that helped back and start Salana as an example, which obviously was an amazing home run. But, you know, that was a better, more certain way to invest. Now, as it's gotten more mature, we will invest in other parts of the ecosystem, but
[10:06] primarily in the world of the crypto itself, it's as a trader. I have a trader background. I helped put myself through college trading futures when I was literally, you know, 19 years old. So, I learned a whole lot of mistakes, you know, from a lot of mistakes that I made and and and and did pretty well and obviously put myself through school. But I learned how to trade these assets. And crypto is an amazing trading vehicle, but I have not chosen to be an investor in that aspect of it. I've been much more of an investor in the things that allow the ecosystem to operate.
[10:37] >> I mean, it makes a lot of sense, right? And I know another area that you're very interested in is uh space and defense. We were talking before how this is completely changing. It's evolving at this rapid rate and some of it is frankly different types of people coming in and building different types of companies kind of different you know new approach uh at least philosophically uh but also the technology is rapidly evolving too. What have you seen there? How did you guys kind of think about space and defense and and how you wanted to invest? >> So we saw the trend literally a decade ago of what's referred to as neoprimes versus the primes. And I'm going to define that. The primes would be what
[11:08] the names that everybody knows, the General Dynamics, the Loheed Martins, etc. What they would do and have for 50 plus years, 60 plus years, is they would go to the government and say, "Look, you know, we think you ought to build this ship, plane, you know, whatever." And they the government would say, "Yes, if we'll we'll give you a contract to build that." And it was like if you go out and you get a home and it's a cost plus model for your home. Well, cost plus frequently, not always, but frequently can mean it costs a whole lot more
[11:38] because they get paid based on how much they spend. And you end up with all of the other bureaucracy and the slowdown. They have no incentive to hurry. There's no incentive to do anything that is like logical, right? Doesn't mean they're not great people and they don't go do great work. And obviously our country has been benefited from all of their efforts. But the business model of it is why you end up with $5,000 toilet seats. Okay? And that is something that you cannot do in this day and age. What has changed and
[12:08] Palmer Lucky and and at Anderl and a couple of others, they really have changed it to become neopimes. What is a neoprime? It is something to where we say, "Okay, we're going to build it. We're going to pay for it because we think you're going to buy it and we're going to do it faster, cheaper, more efficiently, and actually deliver something much more in line with the new technology the world demands. You know, we we actually literally we just released the paperback version of the holy grail of investing and we did that with an entirely new chapter on space
[12:39] and defense because while we were already investing in this in in the sector, it really did not have the profile or the opportunities that it does today. the number of new companies that have watched what what Palmer and the team at Andre have done and said we could do that and they've gotten capital to do exactly that for radar systems or you were early investors in Seronic the company that most people have no idea who it is but they know exactly what the company does because they're the company that makes the autonomous boat that
[13:09] saved the two pilots in the straight of Hormuz this spring. Literally that boat had no pilot and had no joystick somewhere controlling it. It literally was fully autonomous and it went out and it found those pilots and was able to rescue those pilots and bring them obviously to safety without putting anybody else in harm's way. So those kinds of companies literally did not exist 5, seven, eight years ago. Now there's a bunch of them not only here in the United States but also in Europe because when you think about Europe the
[13:40] you know the our allies have agreed to increase their spending from roughly 2% of their gross domestic product to 5%. That is literally multiple trillions of dollars over the next several decades that is going to be spent on defense and it's by mandate by agreement. So that's obviously the defense side. On the space side, I mean literally we have SpaceX changed everything and you know people can like Elon or not
[14:10] like Elon, it doesn't really matter. He has changed the way that we have the ability to get things satellites and other things into space. NASA now pays SpaceX to do effectively do their job in some areas. So they're able to do it faster, cheaper, more efficiently with less bureaucracy and just get stuff done which is obviously what entrepreneurship is all about. So the entire landscape has changed. You know there's a favorite line in the book that we talk about that you know became really really popular is
[14:40] you know in this day and age where drones can do so much damage but they're so small and they're so inexpensive you know with 30 40 $50,000 drones they can do a lot of damage. Well, you can't send a tomahawk and have a million dollars, you know, to knock out a $30,000 drone. So, you can't use Ferraris to shoot down Frisbes, right? You can't. You just can't do that. It doesn't. The math doesn't work. So, you have to create better, smarter, AIdriven, intelligent, you know, a assets that you
[15:11] can use to defend yourself. And that obviously is what's completely changed the game in the world of space and defense. >> This episode is brought to you by Lava. The Lava card is the first credit card that allows you to earn up to 5% back in Bitcoin on every single purchase. Most cards have steep annual fees and unclear points programs, but the Lava card offers a much better deal. Earn real Bitcoin every time that you spend. Plus, there's no annual fee. There's zero FX fees and zero spread when you spend internationally. On top of that, Lava gives you access to a Bitcoin line of
[15:42] credit, yield on cash, instant stable coin deposits and withdrawals, on and off ramps to and from your bank account, and much, much more. With Lava, you can borrow against your Bitcoin at the lowest rates, earn yield, move money globally, and stack Bitcoin with each and every purchase you make. Most financial services squeeze you with high fees, confusing rewards programs. Lava keeps it simple, and they help you build your long-term savings via your everyday spend. Visit lava.xyz xyz/pmp to get started in just a few minutes today. lava.xyz/pmp
[16:14] to get started today. Now, what I find so fascinating is uh you wrote this book uh the holy grail of investing. Your co-author is Tony Robbins. Uh a lot of people don't know this. Tony is a great investor. Um he has uh been a mentor and uh worked with a lot of the great investors over the years. Um can you talk a little bit about the two of you writing this book as I've read it? Um, it's very uh applicable, very real world kind of, hey, here here's how to do certain things, but it's also very philosophical at the same time. There's kind of a a
[16:44] thought process, a mindset behind it. At the same time, it's like, hey, here are specific examples. And when I think of a Tony Robbins, I think most people are like, hey, he can really help me control my emotions. He can help me, you know, think uh uh correctly. He can help me maybe go after my goals and and kind of the personal empowerment. But investing is kind of like the ultimate competition of can you actually do this stuff. So you take like his ideas plus what you do on a day-to-day basis. You put it together. It's kind of like theory and reality or meeting and if you're good, you can get a very big
[17:16] economic reward at the end of this thing. And so how have you two kind of thought about you know merging these two worlds together and and you know kind of uh having it show up in this book? >> Well, I I love that you said that and I'm very very grateful that you said that because that's what we really wanted. We wanted people to have a practical application of what is a very very hard thing to control, which is human emotion. And so much of the holy grail of investing is to allow people to stay with their plan. If they're diversified properly, if they have less correlated assets where something is
[17:46] working at basically all time, then the things that aren't working at that point in time, you know, you can live with it and you can move on. But most people get derailed from their financial freedom because of the fact that they bail off of the plan. they jump off the train just because it gets a little bumpy, so to speak. You can't do that. You got to have a plan you can stick with. And for anyone who's ever invested, we all know that the hardest thing to control is ourselves. The hardest thing to remove from the equation is emotion. You know,
[18:18] fear and greed is the only reason really why most things happen. You know, there's a saying in the industry, cash and career risk. people that either have cash burning a hole in their pocket like I got to put it somewhere or they're afraid of getting fired and so that's why they choose to make the investments that they do. Well, if if someone can be very very, you know, clinical and actually identify where the emotions are their enemy and just separate them and to have a very good logical thought process, they can do really really well.
[18:48] I mean, it's one of the statistics I'm most proud of for the for our firm. We're 25 years old and we literally on 95% of all of our realized and unrealized investments in the private markets, we've made money. 95%. I'll put that batting average up against anybody. But what it comes down to is that we completely remove emotion from the equation. We always focus first on what's the worst case scenario because we know if we can live with that, the upside will take care of itself. But what was so beautiful about the way that Tony and I, you know, kind of jive, if
[19:18] you will, in writing the book together and as partners is, and Tony said this in many places, he is the ultimate optimist. He believes everything's going to be great, and that's just kind of his mindset. And I'm kind of the ultimate pessimist. I'm always looking for what's wrong with the situation. So, we're good counterbalance to each other. And that actually came out with a book because there were many, many times that I'd write a chapter and, you know, here's what I think we ought to talk about and this is what investors need to know and, you know, this is what they should know, etc., et, etc., and Tony would read it and he'd go, "Christopher, this is really, really good stuff. They need to know this. They should know this, but
[19:49] they don't care." So, you got to make it interesting to them and also applicable to them, not theoretical. And so, bringing that practical example to what is obviously sound financial, you know, fundamentals. That's what ultimately allows people to get a lot out of the book. So, very glad that you felt that way >> when um when I was reading through it. The other aspect of this is uh I think diversification is something that people ascribe to um you know the Buffets of the world or or kind of like the the old guard, right? And um I'm very fortunate
[20:20] that I've got a number of friends and and folks I really respect that are older, been around for a long time, I like to say more experienced. And then I got a lot of friends who frankly um you know they're my younger brother's age or something and they're insane. These these kids are like I don't invest unless it goes up 10x and you know my diversified portfolio is like I got a sports gambling account. I've got prediction markets and I've got, you know, a meme stock like aren't I good? Um, and you can kind of see like there is like this maturation experience all that that plays into it. But I do think what becomes really interesting is that
[20:51] incorrectly people assign diversification means bonds or it means this thing that is really boring. But I think what if people read this, you know, crypto, uh, space and defense, sports teams, I know you guys are big in GP stakes, like all of those are sexy. They're new. They're shiny. They're kind of like a new way of getting access to certain markets, but the correlation levels are low. And so maybe talk about almost this element of taking an old timeless investing principle and then
[21:23] trying to fit it to this new world. Like that's what I feel like the book when I was reading it really does a good job of and you know you mentioned that the chapter on space and defense. I don't know if I've ever heard Buffett talk about space and defense. I've heard him talk about airplanes, right? Like you know what I mean? So like that's his version. But it does feel like the modern version is much more, you know, kind of what you would hear people talking about online than, you know, maybe what's in an old Buffett, you know, shareholder letter. >> The the the beautiful thing about investing is somebody can decide what level of risk they want to be on. If
[21:53] somebody does want to have a much smoother ride, then maybe bonds do have a place in their portfolio. But if they're 30 years old and they're making a really good living and they aren't going to touch this money for a long time for college, for retirement, or whatever the case might be, they've got a massive opportunity to compound wealth. And if you think about what Mr. Buffett has done, just because you mentioned him, I mean, he didn't really do bonds, right? Boring bonds. He bought great businesses like Geico and Seas Candies and CocaCola and American Express. I mean, you know, these are
[22:23] really, really iconic great businesses both in the public market and in the private market. And what most people don't realize about Mr. Buffett that he has this big flagship, you know, public portfolio that people look at, but the power and the real engine of what generated the success of Berkshire Hathway for decades was the private businesses that they own. That's where most of the cash flow came from. Geico is just a good example of that. you know, you've got amazing value in the private markets, but most people aren't
[22:55] there just because they can't look at it price every single day. Well, that's actually changing to where now you can invest in the private markets and you can watch it change every day. You can't sell it every day, but you can sell it maybe quarterly now. I mean, where else can somebody literally own a piece of SpaceX before it goes public? Own a piece of Anthropic, own a piece of OpenAI, own a piece of the the the Dodgers or own a piece of, you know, Paris St. Germaine alt literally that you can buy every single day with no accreditation requirement at a $2,500
[23:26] minimum and you can actually get out once a quarter, right? Well, that didn't exist until literally the SEC changed the rules last June. Now, literally every single investor in the world can own those types of assets in those types of funds, right? Didn't exist. But the core of your question is, do you have to be in boring stuff to be diversified? The answer is heck no. The key is you can't just have everything on a complete risk spectrum to where you know everything's got the opportunity to be a zero, right? The beautiful thing about
[23:56] GP stakes professional sports, it's it's I it's hard to even mathematically build a model where you're going to lose a significant amount of capital. Doesn't mean you can't lose money, but you can have a lot of predictability and a lot of durability. And if it has no correlation to what you do that has a lot more octane to it, you know, then you can really do well. I mean, as an example, we're early investors in Figure AI, the robotics company. Okay? We did a very small position in our portfolio because we kind of use a core and a
[24:27] satellite approach, right? The core is going to do what the core is going to do. It's very durable. It's very predictable. We know it's going to, you know, not really move around with the markets itself. But then around the periphery in the in in the satellites, if you will, we can own things that maybe are 50 basis points of a figure AI and then it goes up 10x. That's very meaningful to the return of a portfolio. Or you own a piece of anthropic that's gone up, you know, 20fold or SpaceX, etc. You know, you don't have to have a 10% position to do really, really well.
[24:58] The key is to know what the risk level is. And I'll say this to the audience and I just I implore you. If you don't remember anything else I say, remember this. Don't ever invest based on dollars, right? I'm going to put 100 grand here. I'm going to put 10 grand there, five grand here. Don't do that. Invest on percentages because percentages remove the emotion from the equation. I literally had, you know, an investor that's invested with me literally for 34 years. He invest for decades just a million bucks, a million bucks, a million bucks, a million. He's worth like $800 million. Why is he
[25:30] investing a million dollars in anything? that's not even worth his time. And the answer was finally I got to a psychology which was I remember how hard it was to make my first million and I just I don't I can't live with myself. If I lose more than a million dollars, I won't be able to sleep. Like okay, we're going to work through that. Get on the couch. We'll talk about it. But for him, he now invests 1% 1% 1% 4% 5% depending on the risk. If you do that, it's no longer an emotional decision. It is a literally mechanical manufacturing of returns in
[26:02] your portfolio that is what drives success over decades. You know what's fascinating to me is um again it goes back to like emotional control psychology but also plan and one of the things that um I have real time uh kind of understanding of is we've got this AI CFO product and so people use it to talk to AI with the context of their personal uh finances and and when they're on Sylvia one of the things that people use which wouldn't be surprising is hey I have a goal how do I get to my goal so you know kind of like hey
[26:32] there's an outcome that I want how do I go from where I am to to that. But actually, one of the most powerful things I see people do is they realize the more context the AI has, the more valuable it can be. And I think a lot about you as an investor. If somebody comes to you and says, hey, uh, I want to invest. Should I do a million dollars or should I do 1%. You know, you guys are kind of like, well, it depends on how much money do you have. It depends on, you know, what's your risk profile? Like, it's all so personalized. And the story you just gave about the guy who just kept doing a million dollars, it
[27:02] looks weird until all of a sudden he tells you like it was hard to make a million bucks and you're like, I kind of get it, you know, like it it's understandable. But then it's almost like, okay, that's what you were doing before the professionals got involved. And I think that what I find so fascinating about your guys approach is if I take three assets, Bitcoin, GP stakes, and sports teams, those three things thing, they're different industries. They're different drivers of value, whatever, but they all share scarcity. There's only so many sports
[27:32] teams, there's only so many good GPS, there's only so much Bitcoin. You know, if you just use that as like a heruristic, it almost feels like you guys pick these like very macro themes, overlay them with these timeless investing principles, and then just say like, how do we help our clients get exposure to those themes? And you've got the private funds, you've got the 40X, like like there's a lot of different ways that you guys are serving clients. And you know, I mean, look, the results don't $13 billion in assets. you know, you guys are no dummies, right? [snorts] >> Well, it's it's a it's a really really good point that you made is they they all three of what you described have a
[28:03] level of scarcity. They have a level of a moat, if you will. And to quote Mr. Buffett again, you know, the very very best businesses or assets that you want to own have a moat around them and therefore it provides a level of protection. But it goes back to that thematic side of it. You know, people think, you know, professional sports that we own them because they're cool and they're different. No, it's not anything about that. It's about cord cutting. Cord cutting. People move from broadcasting cable to streaming. If you only have the ability to watch live
[28:34] sports, you know, as as something that you're going to be interested in, well, obviously you're going to watch commercials when you do that. That means that you're going to ultimately see the enormous value of those, you know, those those business models increase because the only way for the advertisers to reach your audience is through those online and those live platforms. So, that drives value and it drives value in a way that most people never fully appreciate. I'll give you I'll give your audience something they probably don't know. Um, most people when they think of
[29:05] sports, it's a trophy asset, etc. And it's actually just this really fantastic business that is a monopoly in the United States. You actually have nobody that's allowed to compete with you without approval from the league. And by the way, you own a piece of the league. This is what most people don't know. When you own one NFL team, you own your 132nd of the NFL. Whether it is literally the first place or the last place team, you're going to get the same dividend check from the league. This year, that's $450 million before you ever play a game, before you ever sell a
[29:35] hot dog. That is your revenue. It's really easy to make money if you start with that kind of a head start. So you have this really big moat that's a monopoly and you have this enormous theme that's driving it. In the case of, you know, crypto, it's the theme is not about, okay, here's a new coin or here's a new, you know, you could do a new quarter, right? And they have a 50 cent piece, right? I mean, you could do that, but that's not the whole point. The point is to be able to have money that is in a different form that is used in a different manner. That's the theme and
[30:05] the way that you're getting democratization of those assets outside of just necessarily the central banks. That's the theme behind crypto. When you look at GP stakes, it has nothing to do with owning a private asset management firm. It has to do with how to take advantage of the growth of private assets and the fact that literally billions and billions of dollars are moving into the private asset space. We actually have on the holy grail of investing here in a couple weeks. We're going to drop the episode with Secretary of Labor Keerling where we talk about the um expansion and the opportunity for
[30:38] private investments to now be available inside of a 401k or a 403b, a retirement account. So now you have the ability to do that for the first time. that is going to be potentially a trillion dollars over a decade that goes into private assets. Somebody's going to get paid to manage that money. We want to own the firms that are going to be managing those assets because of the fact that we get paid the two and the 20, if you will, as opposed to being the one paying the two and the 20. That's the advantage of it. So, it's the theme itself with a moat. And none of those,
[31:09] to your point, correlate with each other. They're completely independent of each other. They're all going to make money or lose money based on different factors at different times for different reasons. That is the beautiful thing about diversification. And it doesn't have to be boring. None of those are boring. And they've delivered fantastic rates of return over time. Today's episode is brought to you by Arch Public. Arch Public has just expanded its agentic trading platform beyond crypto. So pay attention. This is a big one. Now they are automating strategies across stocks, commodities, and ETFs.
[31:40] And I think that this is going to be huge. You can now automatically take profits when one market hits new all-time highs and rotate that capital into other markets showing more opportunity. Whether you're rotating capital into AI stocks, gold, if you're investing in the S&P 500, or you're accumulating Bitcoin, Arch Public brings real discipline and automation to your investment strategy. Additionally, they've launched a powerful new tax loss harvesting tool. With crypto being so volatile and its exemption from the wash sale rule, Arch Public can offset gains with losses without compromising your long-term positions. It's exactly what
[32:11] every serious investor does. Institutional grade automation that works across every major asset class. There's no more emotional trading. No more missing tax opportunities. Just smarter, hands-free execution of your preferred strategies. Go to archpubic.com right now. Connect with their team. Set up [music] a time. Bring your accountant if you'd like. Then you can learn what automated trading can do for you. archpub.com. What keeps you up at night? Like right now there there's a an entire doomer perspective. AI is going to kill us. I don't know if you got that memo. Um, you know, so be careful. Software's going to
[32:42] murder you in your sleep. Uh, oil's, you know, 100 bucks. Uh, 10 years at 5%, they just raised interest rates. The world's supposed to end, right? I don't know if you got that, uh, that message, but um, what keeps you up at night in in terms of separating maybe the noise from the signal. >> And it's again, that's where emotion is the enemy of execution, right? Uh, Tony has a saying, complexity is the enemy of execution. And I've added to that and said complexity and/or emotion is the enemy of execution particularly when it comes to investing. Um there are reasons
[33:12] to be concerned about all of those things. Interest rates, you know, they're high. That creates challenges. Oil, it's high. That creates challenges. By the way, it's going to go probably a lot higher. The supply demand picture in energy is completely out of whack. uh we talk about it a lot in the book, but you you just you're not producing enough energy for the growth of demand and eventually you're going to have just this dramatic supply demand balance that you know is going to be an example of what we've seen in in in the Middle East just over a long period of time. Well,
[33:43] if you have that for a long enough period of time, it creates real pressures on price. And to be very clear for the audience, we invest in all energy. We're very large and small modular nuclear. We're very involved in storage and battery. You know, we're we're we're going to do whatever makes money because we're for all energy and we're against all poverty. But so, you know, energy is is is is a challenge, but it's also an opportunity. I mean, we're buying business at four times cash flow. Four. It's really really really hard to lose money if you buy a business at four times cash flow. And there's a lot of that.
[34:13] >> Very hard. >> Very hard. And people have left the world of energy, fossil fuels in particular, because of their personal belief system. And we have total respect for that. That's their freedom. We want them to have that freedom, but we also have the freedom to provide capital to those companies because we still need to operate our iPhone and this camera, etc., etc. So, we're going to need energy for a long time and we want to make money from producing that energy. But back to the point is that when you think about what scares me or what keeps me up at night, you know, AI does scare me not because I think that Terminator
[34:44] or the Matrix is going to happen, even though, you know, I've had some images of that in my head, but realistically, what I think that the real concern I have is jobs. And you know, I've said it for now a decade. I know it's quoted all over the place. You know, AI doesn't replace people, but people who use AI will replace people. It is so true. And that doesn't mean that we're going to have this mass exodus of the job force. You know, except for in certain areas. You know, there won't be truck drivers in, you know, less than a decade. There
[35:14] won't be any. It will all be autonomous driving. You're going to have more and more robots doing factory worker type roles. It's just that is the reality. And we got to replace and train up those people to be able to provide for their families through that environment. Um, so my concern is not that we're going to see everybody laid off. My concern is that you're going to have a lot of people who are not able to optimize what they do, not be fulfilled by what they do, and you're just not going to have as much hiring because company are going to
[35:44] be able to grow faster with less people than they did before. And that ultimately could lead to significant pain in a lot of sectors of our economy both here in the United States and around the world that people are just going to have to retrain. And I think they will retrain, but it's going to be in a way that just is much more entrepreneurial driven, lot more service driven because, you know, no matter what, that robot is not going to be able to do the same things that a human is is when it comes to emotion. And I don't think that will happen anytime soon,
[36:15] right? Could it happen 50 years from now? Maybe. But I'm not, you know, I'm not thinking that far out. I do think over the next five years, they will be able to do the rote mechanical things just like they are right now. Figure AI has robots making BMWs in the southeast part of the United States. They have things that can literally sort packages much better than a human being can in in UPS factories. Those are already here. It's happening. It's only going to proliferate. So, we got to have people that can do things that others that
[36:45] robots can't. And that is going to require sensory acuity. It's going to require that ability to have relationship and that human touch is going to matter more than anything. I do not want a robot, you know, at my bedside if I'm in the hospital one day. I want a person. You know, it's funny is I always ask people two questions. Uh at what point will you trust the robot in your home to babysit your kids? Like, you know, everyone likes the idea of it doing the laundry, uh maybe putting away the dishes. Babysitting your kid feels a little bit more uh
[37:16] okay, I don't know if I'm ready for that. And then the second is how many of the brain computer interfaces have to be implanted successfully with no problem before you're ready to try it. You know, some people are like a hundred. Some people are like, you know, a million. I don't know million. Still not that many. You know, it's like that there's some number for everybody. But when you start to think about this stuff, it it is the human, you know, machine interaction is going to significantly change going forward. And there's uh you can be scared of it, you can be worried about it, or you figure out, hey, what's
[37:47] actually going to happen here? How do I position myself to uh you know, if it does work to uh to benefit from it. So, I think you guys are uh doing a fantastic job. Um the holy grail of investing, you and Tony Robbins wrote this book. Um I think it is fantastic. I highly suggest everyone go check it out. Um what they just search online and can find it uh anywhere books are sold. >> Everywhere books are sold. You can go also go to the holy holy girlinvesting.com. Uh the advantage of going there is you obviously can go get the book via Amazon or wherever, but you also can get all the content that we do related to the podcast. And we also have a newsletter
[38:18] that they can subscribe to that gets delivered right to their inbox that helps people understand what it is that we're thinking about every day. Gives you an idea of okay, where's the puck going? You know, we've done really really well for 25 years identifying where the trends are and somebody who subscribes to that gets that most current information. So we encourage them to do it. What was the website? >> Holy Grail ofinvesting.com. >> Amazing. And then um what about casinvestments? If people are interested in some of the uh the investment stuff that you guys are doing, where can they go learn more about that firm? >> That that one's also really easy.
[38:49] casinvestments.com uh they can get information on everything that we do uh across the private funds that we have and the 40act funds that we have and everything in between as well as a lot of thought leadership and just educational materials. One of the things we really take pride in is that we provide people with great, you know, opportunities to learn in depth about what it is they might be interested in. Not just specifically what we do and how we do it, but actually things that they can use in all aspects of their life, all aspects of their investing and all that's available on the website.
[39:20] >> Here I was thinking I was talking to a very smart successful investor. I didn't know you were a branding genius. You know, just the website is the name. It's pretty good. >> I appreciate that, >> Cass. I appreciate it very much. Thank you for taking the time to do this. We'll do it again in the future. >> I would love to do so.