WEBVTT - Bitcoin Treasuries: Inflation Hedge or Hype-Driven Bubble?

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, Radio News. Welcome to Meren Talk

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<v Speaker 1>to Your Money, the personal finance edition of Meron talks Money.

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<v Speaker 1>In these bonus podcasts, we talk about the best strategies

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<v Speaker 1>for making the most of your money. I'm Meren Thumset

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<v Speaker 1>Web and with me senior reporter of Money Distilled author

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<v Speaker 1>John steppegg Hi, John Hi, melm Okay. So in this episode,

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<v Speaker 1>we are going to talk about something actually we have

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<v Speaker 1>never talked about before. We've talked about bitcoin a lot,

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<v Speaker 1>but we haven't talked about this new thing. Bitcoin treasury

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<v Speaker 1>is actually not that new, but relatively new to the UK.

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<v Speaker 1>So we think this deserves a conversation, maybe a little scrutiny.

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<v Speaker 1>I think possibly UK investors are beginning to be aware

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<v Speaker 1>of what's happening. So we've got London listed companies, mainly

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<v Speaker 1>smaller companies, some actual companies that are originally minus we're

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<v Speaker 1>going to talk about in a minute who are started

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<v Speaker 1>stockpiling bitcoin in order to get their share price up.

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<v Speaker 1>So we're going to talk about why they're doing this,

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<v Speaker 1>why it might be a concerning trend to investors. Maybe

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<v Speaker 1>there are better ways to get access to cryptocurrencies. So

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<v Speaker 1>to help us dig into all this, we have invited

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<v Speaker 1>our old friend Dominic Frisbee to join us. Now. Dominic,

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<v Speaker 1>many of you will know he's the author of the

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<v Speaker 1>investment newsletter of the Flying Frisbee. He's written a lot

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<v Speaker 1>of very good books. He's sings some great songs, and

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<v Speaker 1>loyal listeners might know him as a recurring guest on

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<v Speaker 1>the Adam Smith panel show that we do at the

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<v Speaker 1>Frinch Festival every year. Dominic, welcome, Thank you so much

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<v Speaker 1>for joining us today.

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<v Speaker 2>It's a pleasure to be here.

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<v Speaker 3>Good.

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<v Speaker 1>Now, I've probably said everything wrong in my introduction, so

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<v Speaker 1>let's start like this. Will you tell us what we're

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<v Speaker 1>talking about? What is a bitcoin treasury? Why have they

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<v Speaker 1>come to the UK?

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<v Speaker 2>Well, it's funny enough. Actually in your introduction I think

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<v Speaker 2>you said absolutely everything right, and not for the first

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<v Speaker 2>time Mary.

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<v Speaker 1>Thank you, Dominic.

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<v Speaker 2>But in your sort of intro to your intro, you

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<v Speaker 2>said about how this is a show for people who

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<v Speaker 2>were thinking about what to do with their money. And

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<v Speaker 2>this whole thing began with an American CEO called Michael

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<v Speaker 2>Sailor who in twenty twenty was looking around at what

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<v Speaker 2>was going on during COVID and he was wondering what

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<v Speaker 2>to do with his corporate treasury to protect it from

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<v Speaker 2>getting eroded by inflation, and so he knew he couldn't

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<v Speaker 2>hold US dollars because effectively he was going to lose

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<v Speaker 2>ten or fifteen percent to money printing every year, probably

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<v Speaker 2>more during COVID. I think at the moment, money printing

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<v Speaker 2>or you know, money supply growth, whatever you want to

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<v Speaker 2>call it, is at seven or eight percent globally, So

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<v Speaker 2>you have to make seven or eight percent just to

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<v Speaker 2>stand still. If you're a corporation running a business, you

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<v Speaker 2>have to grow at seven or eight percent just to

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<v Speaker 2>stand still. And I think that's quite an interesting way

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<v Speaker 2>of framing the gradual erosion of everything that's taking place.

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<v Speaker 2>And so Sailor was looking around at you know, do

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<v Speaker 2>I put my corporate treasury in really stake? Do I

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<v Speaker 2>put it in gold? Do I put it in s

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<v Speaker 2>and p track of funds? What do I do? And

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<v Speaker 2>he eventually arrived at the conclusion of bitcoin, and then

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<v Speaker 2>in quite an astounding way, he took as we call it,

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<v Speaker 2>the orange pill. He was orange pilled in a way

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<v Speaker 2>that I've never seen anyone orange pill before, and has

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<v Speaker 2>transformed himself into the most articulate proponent of bitcoin that

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<v Speaker 2>there is.

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<v Speaker 1>Yeah, Ben, so just be clear, anyone who held micro

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<v Speaker 1>Strategy shares then when he made this decision has made

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<v Speaker 1>an atholete fortune because he's ridden the whole bitcoin wave.

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<v Speaker 2>So micro Strategy was what you would call a zombie company.

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<v Speaker 2>It had a sort of bit of a boom in

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<v Speaker 2>during dot Com, and then basically after dot Com, for

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<v Speaker 2>the next twenty years it just range traded between ten

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<v Speaker 2>and twenty dollars. It just went absolutely nowhere. And you know,

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<v Speaker 2>it had quite a good software business, but it wasn't

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<v Speaker 2>changing the world, and it wasn't making fortunes for its

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<v Speaker 2>investors and so on. But the shinto transforming it. Since

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<v Speaker 2>transforming his company, he basically initially just held his corporate

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<v Speaker 2>treasury in bitcoin. But this model worked so well that

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<v Speaker 2>he just kept raising more and more money and just

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<v Speaker 2>simply buying bitcoin with it. He was doing.

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<v Speaker 1>Issuing shares, using the cash to buy bitcoin and iss

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<v Speaker 1>your debt as well, okay debt. Stopped piling more and

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<v Speaker 1>more bitcoin and effectively becoming a play on the bitcoin

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<v Speaker 1>price for.

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<v Speaker 2>A levered play on the bitcoin price, And I think

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<v Speaker 2>he's going to end up the richest man in the

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<v Speaker 2>world as a result of all of this, and I

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<v Speaker 2>think micro Strategy it's already now in the s and

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<v Speaker 2>P five hundred in terms of market cap, and I

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<v Speaker 2>think it'll be one of the top ten companies in

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<v Speaker 2>the world by market cap by the end of this decade.

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<v Speaker 1>If you're in the US, then you want it, and

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<v Speaker 1>you want to hold bitcoin or have a leverage play

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<v Speaker 1>on bitcoin, micro Strategy is an obvious place to go.

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<v Speaker 1>Although not everyone is happy with the share price that

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<v Speaker 1>was sleep well.

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<v Speaker 2>Funnily enough, a lot of his buyers came from the

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<v Speaker 2>UK because the FCA and its wisdom made it impossible

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<v Speaker 2>for UK investors to investing bitcoin when it was five

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<v Speaker 2>thousand dollars. The only way you could get exposure was

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<v Speaker 2>to buy stock in micro Strategy, and so I remember

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<v Speaker 2>writing articles in Money Week and on the Flying Frisbee

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<v Speaker 2>saying to people, look, if you want exposure to bitcoin

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<v Speaker 2>in the UK, just buy micro Strategy, and you.

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<v Speaker 1>Can also just open a coin based account and hold bitcoin.

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<v Speaker 1>You couldn't you have been able to for some years now.

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<v Speaker 2>It's a nightmare. Merry.

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<v Speaker 1>You can do it. Anyone can know you know how

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<v Speaker 1>you dominice You've known me decades now, you know I

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<v Speaker 1>can't do admin. I've got coin Base account.

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<v Speaker 2>Most banks would not allow you to send money to

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<v Speaker 2>crypto exchanges on.

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<v Speaker 1>My credit card.

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<v Speaker 2>Okay, well first Direct Okay, well you maybe First Direct

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<v Speaker 2>was one of the most modern griovy ones, but most

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<v Speaker 2>banks people found it impossible to send money, and Coinbase

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<v Speaker 2>is one of the more regular ones. Gemini too. It's

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<v Speaker 2>a real headache, and especially you can't buy it and

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<v Speaker 2>your SIP and your ES and whereas you can buy

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<v Speaker 2>micro Strategy. It was just much much easier to buy

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<v Speaker 2>micro Strategy stock than it was to buy bitcoin. And

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<v Speaker 2>in fact, the situation we have now is directly a

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<v Speaker 2>cause of the FCA making it so impossible to buy bitcoin.

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<v Speaker 2>I mean it's direct, So the.

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<v Speaker 1>FCA has made it hard to buy bitcoin in general,

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<v Speaker 1>but also in particular, and this possibly is the key

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<v Speaker 1>point here, is that you cannot buy a cryptocurrency in

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<v Speaker 1>any way inside one of the tax wrappers available in

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<v Speaker 1>the UK, so you can't put those are the things

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<v Speaker 1>an ISO account on Coinbase, you can't buy bitcoin or

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<v Speaker 1>any cryptocurrency or did an NFT or anything nuse like

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<v Speaker 1>that and shovel it into your step or your I SEP.

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<v Speaker 1>So what we're talking about here is the market going, well, okay,

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<v Speaker 1>let's give you another way to do that. Yeah. So

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<v Speaker 1>this is very recent in the UK, right, So Smarter

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<v Speaker 1>Web they announced that this is what they were going

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<v Speaker 1>to do only towards the end of April, correct, And

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<v Speaker 1>if you look at the share price at its peak,

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<v Speaker 1>it was up over six thousand percent from the date

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<v Speaker 1>of that announcement. That all these bitcoin treasury companies have

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<v Speaker 1>now come off in the UK, so it's up four

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<v Speaker 1>thousand percent at the moment.

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<v Speaker 2>I think it's two hundred and fifty p or something.

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<v Speaker 1>So that's still I mean, that is extraordinary shift, which

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<v Speaker 1>by the way, surely doesn't reflect the actual value of

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<v Speaker 1>the bitcoin that they hold.

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<v Speaker 2>Well, this is the next this is the big argument.

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<v Speaker 1>Yeah. So actually before we get onto that, let's just

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<v Speaker 1>talk about the other companies. What kind of companies have

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<v Speaker 1>done that, because I mean I've got a list of

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<v Speaker 1>them here and there's what, there's ten eleven companies that

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<v Speaker 1>have done this, made an announcement that they're going to

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<v Speaker 1>adopt at bitcoin treasury strategy. I mean, they're all companies

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<v Speaker 1>that I have never heard of before Bluebird Mining Ventures,

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<v Speaker 1>Vault Ventures, True Spuying Technologies, panther Metals, et cetera. So

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<v Speaker 1>companies that were dabbling in other things. A couple of

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<v Speaker 1>helium explorers, right.

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<v Speaker 2>Yeah, there's a couple of helium exposures of pivoting.

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<v Speaker 1>Yeah, I mean that's one hell of a pivot, although

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<v Speaker 1>I suppose it's all hot.

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<v Speaker 2>Indeed, what you always see when you see these incredible

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<v Speaker 2>bubbles is loads of people jump on the bandwagon. I

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<v Speaker 2>remember uranium in two thousand and six. I was planning

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<v Speaker 2>to set up a uranium explorer based on ones with

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<v Speaker 2>Common because there was just you know, everyone was just

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<v Speaker 2>getting in. So there are lots of operations there.

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<v Speaker 1>Again, you can have a go. I mean there are.

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<v Speaker 1>If you look at this list, there are a couple

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<v Speaker 1>of you know, uranium on one'sworth common type companies and

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<v Speaker 1>there absolutely yeah, I mean there's one. There's one. And

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<v Speaker 1>I don't mean to libel you, Amazing AI, because I'm

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<v Speaker 1>sure you're doing something good. But the company is called

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<v Speaker 1>Amazing AI and they only announced their strategy on the

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<v Speaker 1>twenty fourth of Junet, not very long ago, and sadly

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<v Speaker 1>for them, they have not gone up six thousand percent,

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<v Speaker 1>actually down twelve percent since, Yeah.

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<v Speaker 2>They rose a bit and then fell back a bit,

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<v Speaker 2>but they've only got they raised a bit naughty in

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<v Speaker 2>a way that they raised one hundred and twenty grand

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<v Speaker 2>and the share price was trading at four p and

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<v Speaker 2>I think all the directors got the shares at half

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<v Speaker 2>a p.

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<v Speaker 1>Right moving on, we have these bitcoinstragery companies now, and

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<v Speaker 1>we're effectively putting them into their own sector, aren't we

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<v Speaker 1>bitcoin treasuries. We're forgetting anything else they ever did. Should

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<v Speaker 1>retail investors be buying these things? Dominic?

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<v Speaker 2>Well, you know, Marin, what is a bubble? Tell me

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<v Speaker 2>what a bubble is, and I'll tell you what a

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<v Speaker 2>bubble is.

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<v Speaker 1>Did you tell me what a bubble is?

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<v Speaker 3>First?

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<v Speaker 2>A bubble is a bull market in which you don't

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<v Speaker 2>have a position. Hmm, it's very easy. You know. Everyone

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<v Speaker 2>has been saying bitcoin is a bubble. Bitcoin is a

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<v Speaker 2>bubble for fifteen years now, and it's always people that

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<v Speaker 2>don't have a position, and it's a it's a psychological

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<v Speaker 2>way of coping with the fact that you didn't invest

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<v Speaker 2>and now worried about investing too late. You dismissed it

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<v Speaker 2>as a bubble.

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<v Speaker 1>Okay, Levin, I think I have to interrupt you right now.

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<v Speaker 1>Just ask John a question. John, is bitcoin a bubble?

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<v Speaker 3>Oh? We bitcoin itself as a postive easing.

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<v Speaker 1>Yeah, I'm asking him that first dominic because he's the

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<v Speaker 1>only one of us on this podcast who doesn't have

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<v Speaker 1>any bitcoin.

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<v Speaker 3>Well, I resented furiously, but I think it's a bubble,

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<v Speaker 3>nor a doint has been that owned for two I nically,

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<v Speaker 3>if you look at the chart, isn't very bubbily.

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<v Speaker 1>Okay, well you haven't. You haven't got a coinbased account,

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<v Speaker 1>you haven't got any bitcoin, got any other crypto. So

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<v Speaker 1>let's talk about John. Let's pretend that he's too admin

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<v Speaker 1>useless to open a coin based account, is even worse

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<v Speaker 1>than I am.

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<v Speaker 3>Surely, just one thing, John, The reason I don't own

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<v Speaker 3>bitcoin is because my bank, which was nationwide, stopped me

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<v Speaker 3>from transfer nine hundred quid to my coin base account

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<v Speaker 3>in twenty fifteen. Please do not tell me how much

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<v Speaker 3>that one hundred quid would be.

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<v Speaker 1>What I say, John, myself out of the window, move

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<v Speaker 1>the first direct and just start using your credit cards.

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<v Speaker 1>That's all I'm saying. But which one of these bitcoin

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<v Speaker 1>treasury companies does John buy? I would like him to

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<v Speaker 1>buy panther Metals because you know, they've been looking for

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<v Speaker 1>zinc deposits in Canada. Maybe they'll find some of those too,

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<v Speaker 1>So that you're hedging, John, you're hedging.

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<v Speaker 3>Well, yes, yes, that's a diversify portfolio.

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<v Speaker 1>Sure, Dominic, Sorry, we're gossiping over you do tell us

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<v Speaker 1>what to do.

0:11:05.440 --> 0:11:08.720
<v Speaker 2>I think panther Metals might even be funding their exploration

0:11:08.800 --> 0:11:12.439
<v Speaker 2>of said zinc deposits with their bitcoin treasury. I think

0:11:12.440 --> 0:11:13.320
<v Speaker 2>that's the purpose of it.

0:11:13.360 --> 0:11:15.360
<v Speaker 1>You know, they only have one bitcoin, right.

0:11:15.520 --> 0:11:20.400
<v Speaker 2>Yeah, exactly. So if we go back to the original bubble,

0:11:20.400 --> 0:11:22.880
<v Speaker 2>if you like, which was tulips. You know, there was

0:11:22.920 --> 0:11:26.120
<v Speaker 2>obviously a tulip bubble in sixteen thirty eight, but that

0:11:26.200 --> 0:11:30.720
<v Speaker 2>tulip bubble built an industry that has, you know, brought

0:11:30.720 --> 0:11:33.440
<v Speaker 2>prosperity to Holland for four hundred years and it remains

0:11:33.480 --> 0:11:35.880
<v Speaker 2>at the center of the flower industry today. You could

0:11:35.920 --> 0:11:38.679
<v Speaker 2>say the same back dot com. Dot Com was obviously stupid,

0:11:39.000 --> 0:11:42.600
<v Speaker 2>but the Internet it's bigger than it ever was, and

0:11:42.679 --> 0:11:45.720
<v Speaker 2>so we're seeing that same pattern. So if you ask

0:11:45.760 --> 0:11:47.920
<v Speaker 2>me where are these stocks going next? I will say

0:11:48.080 --> 0:11:51.240
<v Speaker 2>higher and lower and lower and higher. I mean, it's

0:11:51.240 --> 0:11:54.520
<v Speaker 2>a speculative bubble, and there's obviously a lot of opportunists,

0:11:54.800 --> 0:11:58.080
<v Speaker 2>but some of these companies, and the Smarter Web Company

0:11:58.120 --> 0:12:00.280
<v Speaker 2>being one of them, and coincilly and being an other,

0:12:00.720 --> 0:12:05.320
<v Speaker 2>are legitimate. You know, if you like bitcoin believers and

0:12:05.400 --> 0:12:08.440
<v Speaker 2>they are following the Sailor crypto model and they're not

0:12:08.520 --> 0:12:12.120
<v Speaker 2>just sort of fly by nights. And if Bitcoin goes

0:12:12.400 --> 0:12:14.839
<v Speaker 2>from one ten to say one fifty or wherever it's

0:12:14.880 --> 0:12:17.400
<v Speaker 2>going next, then these companies will double and triple them.

0:12:17.440 --> 0:12:19.840
<v Speaker 2>More so, if bitcoin goes back to seventy or fifty

0:12:19.920 --> 0:12:22.880
<v Speaker 2>or whatever, these companies will lose similar amounts.

0:12:23.480 --> 0:12:25.840
<v Speaker 3>The only reason I'd sort of struggle with it is

0:12:25.880 --> 0:12:30.400
<v Speaker 3>because they're specifically. So let's say I'm agnostic one betcoin.

0:12:30.440 --> 0:12:36.000
<v Speaker 3>I don't know strong view either way, but why I

0:12:36.040 --> 0:12:38.520
<v Speaker 3>don't quite get why I would buy what I most

0:12:38.600 --> 0:12:42.000
<v Speaker 3>and investment trust trading a massive premium to its now,

0:12:42.679 --> 0:12:45.280
<v Speaker 3>which is like you know, investing vet coins. And then

0:12:45.480 --> 0:12:48.920
<v Speaker 3>I suppose at least Sailor was the FoST in the space,

0:12:49.040 --> 0:12:51.520
<v Speaker 3>But as far as I'm aware, it's like trading that

0:12:51.559 --> 0:12:54.959
<v Speaker 3>a big premium to the bitcoin holdings up in double

0:12:55.000 --> 0:12:59.480
<v Speaker 3>check that maybe I'm wrong twice. Yeah, And I mean,

0:13:00.040 --> 0:13:02.240
<v Speaker 3>you've got all these new ones, and clearly some of

0:13:02.240 --> 0:13:05.800
<v Speaker 3>them are blake junior uranium minos that explored. Does that

0:13:06.000 --> 0:13:08.960
<v Speaker 3>I haven't got anything. It's a bit like whenever the

0:13:08.960 --> 0:13:11.840
<v Speaker 3>gold ETFs got launched in the gold minos that didn't

0:13:12.240 --> 0:13:14.840
<v Speaker 3>ended up losing a lot of flows because people could

0:13:14.880 --> 0:13:19.160
<v Speaker 3>just access gold directly, except even more so because at

0:13:19.240 --> 0:13:22.640
<v Speaker 3>least the gold miners yard actually digging some gold out

0:13:22.679 --> 0:13:25.120
<v Speaker 3>of the ground at a courst and then selling it,

0:13:25.320 --> 0:13:30.280
<v Speaker 3>whereas with bitcoin they're just buying backcoin and then holding it.

0:13:30.400 --> 0:13:32.960
<v Speaker 3>So this is what I don't understand the nationale for

0:13:33.040 --> 0:13:35.400
<v Speaker 3>these being the good ways to play backcoin.

0:13:35.440 --> 0:13:39.600
<v Speaker 2>I guess I shall attempt to explain the rationale. I

0:13:39.640 --> 0:13:44.920
<v Speaker 2>hope I'm being clear that that My overall position is

0:13:44.960 --> 0:13:48.000
<v Speaker 2>that there is a lot of hot air and you know,

0:13:48.120 --> 0:13:51.360
<v Speaker 2>rolics in this story, but there is also an underlying

0:13:51.400 --> 0:13:52.439
<v Speaker 2>truth to it as well.

0:13:53.120 --> 0:13:55.880
<v Speaker 3>Now it's clear to me that you are saying that

0:13:56.400 --> 0:13:58.880
<v Speaker 3>there's a lot of speavy companies in the space where

0:13:58.880 --> 0:14:01.040
<v Speaker 3>I am. I'm kind of windomly why does this space

0:14:01.800 --> 0:14:05.760
<v Speaker 3>exist at all beyond the regulatory arbertrage element, which I

0:14:05.800 --> 0:14:09.560
<v Speaker 3>think is completely. That makes sense. It makes sense, and

0:14:09.600 --> 0:14:13.120
<v Speaker 3>as much as until there's a bitcoin eta, if evering

0:14:13.200 --> 0:14:16.760
<v Speaker 3>can easily get hold of, which presumably isn't that far away.

0:14:16.840 --> 0:14:20.560
<v Speaker 3>I think the FC is looking at something on noise lanes.

0:14:20.680 --> 0:14:23.720
<v Speaker 2>The traditional way of valuing an investment trust is you go, yeah,

0:14:23.760 --> 0:14:26.200
<v Speaker 2>this investment trust has got a million pounds worth of assets.

0:14:26.200 --> 0:14:28.280
<v Speaker 2>It's only trading at half a million quid. I'm going

0:14:28.320 --> 0:14:31.440
<v Speaker 2>to buy it because it's worth twice its assets. Bizarrely,

0:14:32.080 --> 0:14:37.920
<v Speaker 2>in the bitcoin treasury space, it's almost like the reverse applies. Now.

0:14:38.080 --> 0:14:41.600
<v Speaker 2>MicroStrategy is trading at a value of roughly twice it's

0:14:41.760 --> 0:14:44.960
<v Speaker 2>the value of its bitcoin. So it's the expression is

0:14:45.240 --> 0:14:50.240
<v Speaker 2>m NAV it's market cap to NAV ratio. So Strategy

0:14:50.280 --> 0:14:52.800
<v Speaker 2>has an m NAV of two. And I think that

0:14:52.920 --> 0:14:55.600
<v Speaker 2>Strategy that price is deserved because of what I call

0:14:55.640 --> 0:14:58.360
<v Speaker 2>the sale at premium. The guy's just so charismatic and

0:14:58.400 --> 0:15:03.080
<v Speaker 2>such a articulate proponed to bitcoin. You just get a

0:15:03.120 --> 0:15:05.520
<v Speaker 2>premium because it's Michael Sailor, and he's the visionary and

0:15:05.560 --> 0:15:08.040
<v Speaker 2>he's the leader and so on. But some of these

0:15:08.080 --> 0:15:12.680
<v Speaker 2>other companies. There's another company called Semlar Scientific which is

0:15:12.720 --> 0:15:16.920
<v Speaker 2>training on the navstat and I think it has five

0:15:16.960 --> 0:15:20.040
<v Speaker 2>thousand bitcoins something like that, and its market cap is

0:15:20.080 --> 0:15:22.080
<v Speaker 2>half a billion, so it's trading at an m NAV

0:15:22.120 --> 0:15:26.880
<v Speaker 2>of one. And the CEO of the company, Eric Semler,

0:15:26.960 --> 0:15:28.840
<v Speaker 2>is a very nice man, but he doesn't have the

0:15:28.880 --> 0:15:31.520
<v Speaker 2>charisma that Michael Sailor has, and so you get no

0:15:32.400 --> 0:15:34.960
<v Speaker 2>premium for the management. But if you look at a

0:15:35.000 --> 0:15:37.600
<v Speaker 2>company like Metaplanet, I don't even know what it's m

0:15:37.680 --> 0:15:41.320
<v Speaker 2>NAV is at the moment, but it's many multiples of

0:15:41.440 --> 0:15:45.840
<v Speaker 2>what its actual bitcoins holdings are. And in the case

0:15:45.880 --> 0:15:49.760
<v Speaker 2>of Coincillium, for example, at one point last week, Coincillium

0:15:49.760 --> 0:15:51.840
<v Speaker 2>had a market cap of maybe one hundred and twenty

0:15:51.840 --> 0:15:55.280
<v Speaker 2>million quid and the value of its bitcoin holdings was

0:15:56.080 --> 0:15:59.920
<v Speaker 2>less than five million quid. And similarly, at one extra

0:16:00.040 --> 0:16:03.600
<v Speaker 2>dreen point, smarter Web company at a valuation above a

0:16:03.600 --> 0:16:07.360
<v Speaker 2>billion and I think it's bitcoin holdings worth maybe fifty

0:16:07.360 --> 0:16:11.520
<v Speaker 2>million or something like that. So you know, there was

0:16:11.560 --> 0:16:15.080
<v Speaker 2>a huge premium to m NAV. So there's this new

0:16:15.120 --> 0:16:19.560
<v Speaker 2>thing which people talk about called time to m NAV.

0:16:20.760 --> 0:16:23.320
<v Speaker 2>So if a company has an m NAV of one,

0:16:23.400 --> 0:16:26.160
<v Speaker 2>it can only issue more shares and more debt to

0:16:26.240 --> 0:16:28.560
<v Speaker 2>the value of its bitcoins. Whereas if it has an

0:16:28.640 --> 0:16:31.680
<v Speaker 2>m NAV of ten, it's able to issue paper at

0:16:31.720 --> 0:16:36.480
<v Speaker 2>ten times its value and buy bitcoins with this overvalued paper.

0:16:36.920 --> 0:16:40.200
<v Speaker 2>And then the idea is that the company the value

0:16:40.200 --> 0:16:43.080
<v Speaker 2>of the bitcoin holdings eventually catches up with the value

0:16:43.080 --> 0:16:45.560
<v Speaker 2>of the company. So you have this thing called time

0:16:45.720 --> 0:16:48.480
<v Speaker 2>to m NAV, which is a sort of measure that's

0:16:48.520 --> 0:16:51.520
<v Speaker 2>been devised. And if you can pick up a company

0:16:51.560 --> 0:16:55.360
<v Speaker 2>with a greater time to m NAV, the potential of

0:16:55.400 --> 0:16:59.120
<v Speaker 2>that company to grow its bitcoin holdings to reach its

0:16:59.320 --> 0:17:03.080
<v Speaker 2>m NAV grows greater. But there are also, at the

0:17:03.160 --> 0:17:07.879
<v Speaker 2>same time, loads and loads of parallels, if you like,

0:17:08.160 --> 0:17:11.480
<v Speaker 2>to the old fashioned pyramid scheme, and the earlier you

0:17:11.480 --> 0:17:14.000
<v Speaker 2>get in the pyramid scheme, the more money you make.

0:17:14.160 --> 0:17:16.840
<v Speaker 2>And because this is just suddenly happened in the last month,

0:17:17.119 --> 0:17:19.439
<v Speaker 2>everyone's really trying to get in early to be the

0:17:19.480 --> 0:17:22.080
<v Speaker 2>guy who you know, makes all the money. I was

0:17:22.160 --> 0:17:26.040
<v Speaker 2>lucky enough to buy coincillion at six p ten days

0:17:26.119 --> 0:17:29.119
<v Speaker 2>later it was ninety p ten day. That includes a

0:17:29.160 --> 0:17:30.200
<v Speaker 2>Saturday and a Sunday.

0:17:30.800 --> 0:17:33.879
<v Speaker 1>So did you keep it? Did you sell it?

0:17:34.359 --> 0:17:36.800
<v Speaker 2>I took my initial steak off the table they're in,

0:17:37.040 --> 0:17:38.919
<v Speaker 2>and I took a little bit more off the table,

0:17:39.400 --> 0:17:42.119
<v Speaker 2>and looking back, the stock is now twenty five p.

0:17:42.280 --> 0:17:44.280
<v Speaker 2>I should have taken more off the table, but my

0:17:44.320 --> 0:17:47.040
<v Speaker 2>attitude was I'll just let the run, I'll enjoy, I'll

0:17:47.040 --> 0:17:49.320
<v Speaker 2>get the rest of the free and see what happens.

0:17:49.840 --> 0:17:52.679
<v Speaker 2>There are some people who are using this measure with

0:17:53.200 --> 0:17:56.600
<v Speaker 2>great success. So we can mock and scorn and all

0:17:56.600 --> 0:17:58.560
<v Speaker 2>the rest of it, but they are making a great

0:17:58.600 --> 0:17:59.120
<v Speaker 2>deal more money.

0:17:59.119 --> 0:18:02.119
<v Speaker 1>They're making money. Not I get that. I mean, I

0:18:02.119 --> 0:18:05.280
<v Speaker 1>suppose that the positive side to this, John, and the

0:18:05.280 --> 0:18:07.399
<v Speaker 1>thing that well we should bring out before we finish,

0:18:07.560 --> 0:18:12.119
<v Speaker 1>is that it is however it happening. It is great

0:18:12.200 --> 0:18:16.520
<v Speaker 1>to see retail and festas engaged with the listed store market.

0:18:16.760 --> 0:18:18.359
<v Speaker 1>I know this is not the way you want it

0:18:18.400 --> 0:18:20.800
<v Speaker 1>to happen, but I still look at it and I

0:18:20.800 --> 0:18:22.919
<v Speaker 1>think that more people are engaged with the store market,

0:18:22.960 --> 0:18:25.400
<v Speaker 1>the better. And what the stock market is doing here

0:18:25.440 --> 0:18:27.520
<v Speaker 1>is saying there's something you guys want, and that's what

0:18:27.560 --> 0:18:31.200
<v Speaker 1>the market is supposed to do. So we should approve

0:18:31.240 --> 0:18:33.640
<v Speaker 1>of that mechanism, and we should approve of people using

0:18:33.640 --> 0:18:35.600
<v Speaker 1>that mechanism to get what they want, even if you

0:18:35.600 --> 0:18:37.280
<v Speaker 1>don't approve of the thing they're buying. Am I right,

0:18:37.320 --> 0:18:38.920
<v Speaker 1>Dominic work with me here. Yes.

0:18:40.000 --> 0:18:43.720
<v Speaker 2>The thing is there's so much pent up demand over

0:18:43.760 --> 0:18:48.239
<v Speaker 2>many years, and you know that sort of tap has

0:18:48.280 --> 0:18:52.040
<v Speaker 2>suddenly been opened, and that's what's created this wild helter

0:18:52.119 --> 0:18:56.159
<v Speaker 2>skelter ride. You have to think psychologically, where are we

0:18:56.240 --> 0:18:58.240
<v Speaker 2>in the bubble? Where are we in the hype cycle

0:18:58.680 --> 0:19:02.280
<v Speaker 2>rather than in turn of traditional investment metrics.

0:19:02.840 --> 0:19:05.240
<v Speaker 1>Dominic, thank you so much for joining us today, and John,

0:19:05.280 --> 0:19:10.680
<v Speaker 1>thank you as ever. Thanks for listening to this week's

0:19:10.680 --> 0:19:13.119
<v Speaker 1>Marin Talks Your Money. If you like us show, rate review,

0:19:13.160 --> 0:19:15.840
<v Speaker 1>and subscribe wherever you listen to podcasts. Also, be sure

0:19:15.880 --> 0:19:17.679
<v Speaker 1>to follow me and John on ex or Twitter and

0:19:17.720 --> 0:19:19.200
<v Speaker 1>Dominic of course, what are you on Twitter?

0:19:19.240 --> 0:19:22.000
<v Speaker 2>Dominic, I'm at Dominic Frisbee and the website is the

0:19:22.040 --> 0:19:23.520
<v Speaker 2>Flying Frisbee dot com.

0:19:23.520 --> 0:19:27.720
<v Speaker 1>Thank you. I'm at marinsw and John is John Underscore Stepic.

0:19:28.000 --> 0:19:30.840
<v Speaker 1>This episode was produced by some Asadi Productions of Broughton

0:19:30.960 --> 0:19:33.919
<v Speaker 1>sound designed by Moses and Questions and comments on this

0:19:34.000 --> 0:19:36.960
<v Speaker 1>show and all our shows are always welcome. Our show

0:19:37.000 --> 0:19:39.719
<v Speaker 1>email is merin Money at Bloomberg dot net.