1 00:00:00,120 --> 00:00:04,040 Speaker 1: The world's safest investment just collapsed and almost nobody saw 2 00:00:04,080 --> 00:00:08,240 Speaker 1: it coming. Wall Street's most trusted investment lost trillions in value, 3 00:00:08,240 --> 00:00:10,800 Speaker 1: and if you're still holding on to it, your portfolio 4 00:00:10,800 --> 00:00:14,200 Speaker 1: could be next. But what caused this crash, and more importantly, 5 00:00:14,480 --> 00:00:16,800 Speaker 1: what should you do now? In the next few minutes, 6 00:00:16,960 --> 00:00:20,200 Speaker 1: you'll discover why the smartest investors in the world are 7 00:00:20,280 --> 00:00:24,480 Speaker 1: quietly moving billions into a surprising asset, and how one 8 00:00:24,520 --> 00:00:27,920 Speaker 1: simple decision right now could protect your future wealth. My 9 00:00:28,000 --> 00:00:30,880 Speaker 1: name is Mark Mossuf spent decades analyzing the financial markets, 10 00:00:30,920 --> 00:00:34,080 Speaker 1: economic cycles, and investment strategies as a partner in a 11 00:00:34,080 --> 00:00:37,479 Speaker 1: bitcoin venture fund, an advisor to publicly traded companies navigating 12 00:00:37,479 --> 00:00:40,919 Speaker 1: this exact crisis. I've help thousands of investors see these 13 00:00:40,960 --> 00:00:44,800 Speaker 1: trends early and positions themselves ahead of the herd. Now today, 14 00:00:45,000 --> 00:00:47,440 Speaker 1: I'm going to share those same critical insights with you. 15 00:00:47,960 --> 00:00:51,360 Speaker 1: So let's go all right, So we are talking about 16 00:00:51,400 --> 00:00:54,880 Speaker 1: the safest investment in the world. We're talking about us treasure. 17 00:00:54,880 --> 00:00:57,920 Speaker 1: As a matter of fact, they are called the risk 18 00:00:58,160 --> 00:01:02,640 Speaker 1: free investment. They're risk free because the government's always going 19 00:01:02,720 --> 00:01:05,840 Speaker 1: to pay them. Right, Well, maybe maybe not. Let's talk 20 00:01:05,880 --> 00:01:07,959 Speaker 1: about this a little bit. So the US treasuries are 21 00:01:08,080 --> 00:01:10,759 Speaker 1: considered the safe play because of course the government can 22 00:01:10,840 --> 00:01:14,080 Speaker 1: just print more dollars, right, So what they're used for 23 00:01:14,319 --> 00:01:17,679 Speaker 1: is fixed income. So it's a way to head your position. 24 00:01:17,760 --> 00:01:19,320 Speaker 1: You don't need to be all in stocks. You head 25 00:01:19,319 --> 00:01:22,600 Speaker 1: your position, and of course it's backed by the full 26 00:01:22,720 --> 00:01:25,840 Speaker 1: faith of the US government. Knowing that the US government 27 00:01:25,880 --> 00:01:28,080 Speaker 1: never defaults on its debt. It's always going to pay. 28 00:01:28,280 --> 00:01:30,080 Speaker 1: We'll talk more about that in a minute. And so 29 00:01:30,319 --> 00:01:34,800 Speaker 1: what modern portfolio theory is is basically, you dedicate allocate 30 00:01:35,120 --> 00:01:39,240 Speaker 1: forty percent of your investments, your portfolio into this. That's 31 00:01:39,280 --> 00:01:42,200 Speaker 1: forty percent portfolio construction. You can see. It's known as 32 00:01:42,200 --> 00:01:45,520 Speaker 1: a sixty forty portfolio. Now, if you follow my channel regularly, 33 00:01:45,520 --> 00:01:48,880 Speaker 1: you know I often talk bad about this, but if 34 00:01:48,880 --> 00:01:51,200 Speaker 1: you have money with a four to one K or 35 00:01:51,280 --> 00:01:54,240 Speaker 1: mutual fund or some type of fund advisor, they probably 36 00:01:54,280 --> 00:01:57,680 Speaker 1: have you in some variation of this. Sixty percent stocks, 37 00:01:58,160 --> 00:02:02,280 Speaker 1: forty percent bonds. Now sixty two percent stocks are for volatility, 38 00:02:02,600 --> 00:02:04,520 Speaker 1: volatility as things go up and down, but of course 39 00:02:04,520 --> 00:02:06,280 Speaker 1: we want them to go up, and the bonds are 40 00:02:06,320 --> 00:02:09,800 Speaker 1: supposed to limit the volatility or dampen the downside of that, 41 00:02:10,280 --> 00:02:13,560 Speaker 1: they're meant specifically, like I said, to reduce volatility. As 42 00:02:13,560 --> 00:02:15,040 Speaker 1: a matter of fact, if we go on to I 43 00:02:15,080 --> 00:02:17,880 Speaker 1: believe this is from Investopedia, we can look at this. 44 00:02:18,280 --> 00:02:21,919 Speaker 1: Volatility is a part of investing. You don't invest into 45 00:02:22,000 --> 00:02:24,240 Speaker 1: things that don't move. You don't invest into dollars. So 46 00:02:24,320 --> 00:02:27,160 Speaker 1: volatility is things going up and down. So we need 47 00:02:27,200 --> 00:02:29,120 Speaker 1: that if we're going to make money. Shorted if it's 48 00:02:29,120 --> 00:02:31,519 Speaker 1: going down, go long if it's going up. But by 49 00:02:31,600 --> 00:02:36,839 Speaker 1: incorporating bonds into the portfolio, sixty forty, investors can potentially 50 00:02:37,360 --> 00:02:44,360 Speaker 1: reduce volatility relative to an all equity portfolio without sacrificing return, 51 00:02:44,919 --> 00:02:49,280 Speaker 1: so they can compliment. Bonds can complement stocks and diversified portfolio, 52 00:02:49,560 --> 00:02:56,760 Speaker 1: potentially helping reduce overall portfolio risk. How by limiting the volatility. Okay, 53 00:02:56,840 --> 00:02:58,440 Speaker 1: so we don't want to go all stocks because it's 54 00:02:58,440 --> 00:03:01,480 Speaker 1: too volatile, so we'll limit that with bonds. Okay, I 55 00:03:01,520 --> 00:03:03,960 Speaker 1: want you to understand. That's why I'm emphasizing that part, 56 00:03:04,240 --> 00:03:05,840 Speaker 1: and what I'm going to show you right now is 57 00:03:05,840 --> 00:03:09,760 Speaker 1: why bonds have failed. We're going to look at real 58 00:03:09,919 --> 00:03:13,720 Speaker 1: risk because as real investors, as professional investors, we don't 59 00:03:13,760 --> 00:03:16,720 Speaker 1: just think about yolo and going long. We always have 60 00:03:16,800 --> 00:03:20,080 Speaker 1: to think about a risk adjusted return. A hedge fund 61 00:03:20,160 --> 00:03:22,960 Speaker 1: is called a hedge fund because they're hedging their positions. 62 00:03:23,520 --> 00:03:26,520 Speaker 1: They're taking that risk into account. So, based off of 63 00:03:26,520 --> 00:03:28,720 Speaker 1: all that information, what should we do now? Don't worry? 64 00:03:28,760 --> 00:03:31,480 Speaker 1: I got you, okay, So let's talk about the bond story, 65 00:03:31,520 --> 00:03:35,400 Speaker 1: just real quickly. So again, smart investors, they measure risk. 66 00:03:35,680 --> 00:03:38,520 Speaker 1: So when I'm looking at the potential return, I also 67 00:03:38,520 --> 00:03:40,520 Speaker 1: want to think about the potential Vault's a lid that 68 00:03:40,560 --> 00:03:42,600 Speaker 1: I have. And so then the question we have to 69 00:03:42,640 --> 00:03:46,040 Speaker 1: have is our bonds really risk free? Are they really 70 00:03:46,080 --> 00:03:48,800 Speaker 1: the risk free return? And if not, how much risk 71 00:03:48,840 --> 00:03:51,200 Speaker 1: do they have? And if they have risk, then how 72 00:03:51,240 --> 00:03:54,440 Speaker 1: should I think about allocating to my portfolio with those? 73 00:03:54,800 --> 00:03:57,080 Speaker 1: And the question I'm going to answer for you because 74 00:03:57,120 --> 00:04:00,560 Speaker 1: most people think with bitcoin, mark, stop talking about that thing, 75 00:04:00,920 --> 00:04:04,040 Speaker 1: that fake Internet money, whatever it is. It's too volatile, right, 76 00:04:04,240 --> 00:04:08,520 Speaker 1: So let's take a look at is bond our bonds riskier? 77 00:04:09,000 --> 00:04:13,360 Speaker 1: Our bonds riskier? Are more volatile than bitcoin? You might 78 00:04:13,400 --> 00:04:16,960 Speaker 1: be surprised when we break out the math. Don't miss this, okay, 79 00:04:17,160 --> 00:04:21,200 Speaker 1: So again, the US Treasury USTs we can look at 80 00:04:21,200 --> 00:04:23,240 Speaker 1: their returns. Now, we can, of course look at the 81 00:04:24,839 --> 00:04:27,320 Speaker 1: short term ones, the five year, the ten year, the 82 00:04:27,360 --> 00:04:29,520 Speaker 1: thirty year, twenty or whatever we want, but we'll use 83 00:04:29,680 --> 00:04:33,800 Speaker 1: the bond ETF it's the TLT. Now. The TLT represents 84 00:04:33,839 --> 00:04:37,400 Speaker 1: the bonds. It's a long bond, a twenty year plus bond, 85 00:04:37,800 --> 00:04:40,200 Speaker 1: all right. So it's a really good way for traders 86 00:04:40,240 --> 00:04:42,440 Speaker 1: to go in and out of bonds hedge their positions. 87 00:04:43,360 --> 00:04:46,039 Speaker 1: And if we look at this over a five year 88 00:04:46,160 --> 00:04:49,400 Speaker 1: period since twenty twenty, we can see that it's down 89 00:04:50,160 --> 00:04:52,719 Speaker 1: forty seven percent. Now, I don't know about you, but 90 00:04:52,760 --> 00:04:55,719 Speaker 1: if I lost forty percent of my money over five years, 91 00:04:55,720 --> 00:04:59,240 Speaker 1: I wouldn't really consider that risk free. I wouldn't really 92 00:04:59,279 --> 00:05:02,040 Speaker 1: consider that safe. So you have to think a little 93 00:05:02,040 --> 00:05:03,960 Speaker 1: bit differently about this. You can see it's almost like 94 00:05:04,000 --> 00:05:07,040 Speaker 1: a complete straight line going down. Now, you might say, Mark, 95 00:05:07,720 --> 00:05:10,080 Speaker 1: you're probably cherry picking. Of course, we know that long 96 00:05:10,160 --> 00:05:13,159 Speaker 1: term bonds are down, but what about if we looked 97 00:05:13,160 --> 00:05:15,320 Speaker 1: at more short term bonds? Right, and that why Janet 98 00:05:15,360 --> 00:05:17,960 Speaker 1: Yellen was front loading the end of that spectrum. What 99 00:05:18,040 --> 00:05:20,000 Speaker 1: about that, Well, we can take a look at that 100 00:05:20,320 --> 00:05:25,039 Speaker 1: in another ETF AG and we can compare TLT, which 101 00:05:25,080 --> 00:05:27,040 Speaker 1: is all the way down here to AG and we 102 00:05:27,080 --> 00:05:29,520 Speaker 1: can see that it hasn't dropped near as bad. It's 103 00:05:29,560 --> 00:05:32,039 Speaker 1: not near as risky and bad. In this case, you 104 00:05:32,160 --> 00:05:36,760 Speaker 1: only lost sixteen percent of your money. Still risky in 105 00:05:36,800 --> 00:05:39,760 Speaker 1: my opinion, right over five years. And we're not cherry 106 00:05:39,760 --> 00:05:41,960 Speaker 1: picking data. I mean, I suppose if we look at 107 00:05:41,960 --> 00:05:44,360 Speaker 1: this little window right here, we made money, but we're 108 00:05:44,360 --> 00:05:46,279 Speaker 1: not checking cherry picking data. Like I said, this is 109 00:05:46,320 --> 00:05:49,040 Speaker 1: over five years. Okay. Now you might also be saying, 110 00:05:49,040 --> 00:05:52,560 Speaker 1: but Mark, that doesn't take into account to the consideration 111 00:05:52,680 --> 00:05:55,560 Speaker 1: of the dividends that they pay, right because I'm banking dividends, 112 00:05:55,640 --> 00:05:58,680 Speaker 1: so that certainly got to offset the amount of losses. Right. Well, 113 00:05:58,760 --> 00:06:00,680 Speaker 1: let's take a look at that. We go back to 114 00:06:00,720 --> 00:06:03,520 Speaker 1: the TLT, the long bond, and we can see even 115 00:06:03,680 --> 00:06:07,120 Speaker 1: with the dividends, it's down. Now it's only down thirty 116 00:06:07,120 --> 00:06:10,760 Speaker 1: eight percent. I mean, it's better, it's not fifty percent, 117 00:06:10,800 --> 00:06:13,560 Speaker 1: but it's still almost forty percent that we're down because 118 00:06:13,600 --> 00:06:15,960 Speaker 1: of course the dividends aren't very much. And we can 119 00:06:16,000 --> 00:06:18,760 Speaker 1: see the same with AGG as well. On this one, 120 00:06:18,880 --> 00:06:21,840 Speaker 1: we're only down about four and a half percent. Not 121 00:06:21,880 --> 00:06:25,480 Speaker 1: so bad. But we're still losing money. And apparently what's 122 00:06:25,520 --> 00:06:28,760 Speaker 1: considered the risk free return now it gets a little 123 00:06:28,760 --> 00:06:32,240 Speaker 1: bit worse because we have to take into consideration inflation. 124 00:06:32,800 --> 00:06:36,400 Speaker 1: Now we're going to use CPI consumer price inflation, which 125 00:06:36,400 --> 00:06:38,840 Speaker 1: of course is a false metric. That's around three percent. 126 00:06:39,160 --> 00:06:42,160 Speaker 1: The real inflation rate is the rate of monetary debasement, 127 00:06:42,200 --> 00:06:44,520 Speaker 1: how fast they're printing money. But if we just use 128 00:06:44,560 --> 00:06:48,600 Speaker 1: the government's number cp LIES, we can see that we 129 00:06:48,640 --> 00:06:52,400 Speaker 1: are basically going in a down word spiral, straight down. 130 00:06:53,000 --> 00:06:55,719 Speaker 1: Now that is in real returns. We can also see 131 00:06:55,800 --> 00:06:58,960 Speaker 1: the same thing for AG as well. Again adjusted for inflation, 132 00:06:59,400 --> 00:07:01,920 Speaker 1: it just makes look that much worse, and we are 133 00:07:02,000 --> 00:07:05,960 Speaker 1: just going in a downward trajectory. So if the real 134 00:07:06,120 --> 00:07:11,680 Speaker 1: risk free isn't risk free, what should we be thinking. Well, 135 00:07:11,880 --> 00:07:14,200 Speaker 1: let's dig in a little bit more, because remember bonds 136 00:07:14,200 --> 00:07:17,920 Speaker 1: were supposed to limit the volatility that we get from stocks, 137 00:07:17,960 --> 00:07:20,080 Speaker 1: as if that's a bad thing. So let's take a 138 00:07:20,080 --> 00:07:22,400 Speaker 1: look at the volatility of this. Now, there's a couple 139 00:07:22,440 --> 00:07:23,920 Speaker 1: of things I want to point out to you. So 140 00:07:24,000 --> 00:07:26,360 Speaker 1: number one, let's look at the TLT again sort of 141 00:07:26,400 --> 00:07:29,280 Speaker 1: representing the long if you will, and this shows the 142 00:07:29,400 --> 00:07:31,880 Speaker 1: volatility that we have. So what we can see is 143 00:07:31,920 --> 00:07:34,360 Speaker 1: that we had a high of about thirty three. This 144 00:07:34,400 --> 00:07:37,920 Speaker 1: isn't about mid twenty twenty two. That's when the if 145 00:07:37,960 --> 00:07:40,240 Speaker 1: you remember back in around October twenty twenty two, the 146 00:07:40,280 --> 00:07:43,320 Speaker 1: markets were crashing, the bond auctions were starting to fail. 147 00:07:43,440 --> 00:07:45,920 Speaker 1: That's when the volatility got really high. Since then, the 148 00:07:46,720 --> 00:07:48,880 Speaker 1: stock markets have gone up and now we're down to 149 00:07:48,880 --> 00:07:51,840 Speaker 1: about fifteen, still pretty volatile. If we take a look 150 00:07:51,880 --> 00:07:54,960 Speaker 1: at AG again representing the shorter term, shorter end of 151 00:07:55,000 --> 00:07:56,960 Speaker 1: the curve, we can see it's a little bit better. Here. 152 00:07:56,960 --> 00:07:59,600 Speaker 1: We have a high of only fourteen right here, and 153 00:07:59,640 --> 00:08:02,160 Speaker 1: we're at averaging about six, so quite a bit better. 154 00:08:02,400 --> 00:08:04,440 Speaker 1: But we still have to see that there's a lot 155 00:08:04,480 --> 00:08:09,480 Speaker 1: of volatility. Now again, is volatility bad, Well, not necessarily, right. 156 00:08:09,680 --> 00:08:13,640 Speaker 1: We need volatility if we want liquidity, if we want 157 00:08:13,640 --> 00:08:16,240 Speaker 1: asset prices to go up, we're gonna need the volatility. 158 00:08:16,480 --> 00:08:19,360 Speaker 1: But again, this is the main argument that's put against 159 00:08:19,400 --> 00:08:22,960 Speaker 1: bitcoin because bitcoin is too volatile. All right, So now 160 00:08:22,960 --> 00:08:25,920 Speaker 1: that I've shown you the volatility numbers, wait till I 161 00:08:25,960 --> 00:08:28,400 Speaker 1: show you what's coming up next. Let's take a look 162 00:08:28,400 --> 00:08:32,360 Speaker 1: at this. Okay, so let's compare risk now in the 163 00:08:32,640 --> 00:08:36,160 Speaker 1: risk free trade in the US government treasuries, which is 164 00:08:36,160 --> 00:08:39,520 Speaker 1: basically the bedrock of the entire global financial system. Let's 165 00:08:39,520 --> 00:08:43,720 Speaker 1: compare the risk the Bitcoin, the most risky asset there is. Okay, 166 00:08:43,920 --> 00:08:47,320 Speaker 1: so we use something called a sharp ratio. Basically, what 167 00:08:47,360 --> 00:08:49,680 Speaker 1: the sharp ratio is is the measure of an investment's 168 00:08:50,120 --> 00:08:53,560 Speaker 1: risk adjusted performance. Because remember, only amateurs think about how 169 00:08:53,600 --> 00:08:56,640 Speaker 1: much money they're gonna make. Professionals always think about a 170 00:08:56,960 --> 00:09:00,640 Speaker 1: risk adjusted return. What does that mean? If something's very risky, 171 00:09:00,720 --> 00:09:02,640 Speaker 1: it could go up one hundred x. It could also 172 00:09:02,760 --> 00:09:05,720 Speaker 1: lose all its money. So I wouldn't because it's so risky. 173 00:09:05,800 --> 00:09:08,079 Speaker 1: I would only put a little bit of money into it. 174 00:09:08,120 --> 00:09:09,640 Speaker 1: And I only need a little bit because it has 175 00:09:09,640 --> 00:09:12,200 Speaker 1: so much potential to go up. If something is safer, 176 00:09:12,240 --> 00:09:14,440 Speaker 1: I can put more money into it. So for example, 177 00:09:15,120 --> 00:09:19,040 Speaker 1: micro Strategy is the biggest bitcoin treasury play there is. 178 00:09:19,160 --> 00:09:21,920 Speaker 1: They have about six hundred thousand bitcoin. I can put 179 00:09:22,000 --> 00:09:24,679 Speaker 1: way more money into that than I would a smaller 180 00:09:24,679 --> 00:09:27,920 Speaker 1: one like Metaplanet. For example, Metaplanet has more risk, but 181 00:09:27,960 --> 00:09:30,319 Speaker 1: it also has more return potential. That's why we think 182 00:09:30,320 --> 00:09:32,760 Speaker 1: about it. So for the sharp ratio, we want to 183 00:09:32,760 --> 00:09:38,320 Speaker 1: measure the risk adjusted performance, calculated by comparing its return 184 00:09:39,160 --> 00:09:42,040 Speaker 1: to that of a risk free asset, which in this 185 00:09:42,120 --> 00:09:45,600 Speaker 1: case is the US treasuries. Okay, so in this less 186 00:09:45,600 --> 00:09:49,160 Speaker 1: than point five is bad and more than greater than 187 00:09:49,320 --> 00:09:52,720 Speaker 1: one is good. All right, that's how would create this. 188 00:09:53,040 --> 00:09:55,880 Speaker 1: So again, Bitcoin is very volatile, right, So let's take 189 00:09:55,880 --> 00:09:58,400 Speaker 1: a look and see what the sharp ratio tells us. Now, 190 00:09:58,400 --> 00:09:59,960 Speaker 1: if we take a look at this, we can see 191 00:10:00,080 --> 00:10:05,800 Speaker 1: as of June thirtieth, twenty twenty five, TLT, the US Treasuries, 192 00:10:05,880 --> 00:10:09,000 Speaker 1: the long bonds had a max draw down of forty 193 00:10:09,000 --> 00:10:10,640 Speaker 1: eight percent. That's we're at right now. Over the last 194 00:10:10,640 --> 00:10:13,560 Speaker 1: five years, I showed you that AG the short is 195 00:10:13,600 --> 00:10:17,640 Speaker 1: about down about eighteen percent. Bitcoin max drawed out of 196 00:10:17,679 --> 00:10:23,720 Speaker 1: seventy six percent. That's massive. Well, obviously, Mark Bitcoin's more risky, 197 00:10:23,800 --> 00:10:26,559 Speaker 1: right because it dropped seventy six, but the US Treasuries 198 00:10:26,600 --> 00:10:28,640 Speaker 1: only went down forty eight. I'd rather lose forty eight 199 00:10:28,679 --> 00:10:32,200 Speaker 1: than than seventy six. Okay, But that's the only piece. 200 00:10:32,280 --> 00:10:33,720 Speaker 1: That's only a piece of it, because we also have 201 00:10:33,760 --> 00:10:36,520 Speaker 1: to look at the potential for the return. Now in this, 202 00:10:36,880 --> 00:10:38,880 Speaker 1: remember what I told you the sharp ratios in this 203 00:10:39,200 --> 00:10:42,640 Speaker 1: the TLT got a sharp ratio of point three when 204 00:10:42,720 --> 00:10:46,080 Speaker 1: bitcoin and the short headed point four, while bitcoin had 205 00:10:46,360 --> 00:10:49,160 Speaker 1: a one point Oh now if you remember, let's go 206 00:10:49,240 --> 00:10:53,719 Speaker 1: back and look what was good and bad. Less than 207 00:10:53,760 --> 00:10:58,080 Speaker 1: point five is bad, more than one is good. Why 208 00:10:58,200 --> 00:11:01,079 Speaker 1: is that? Because we don't just look at draw downs. 209 00:11:01,320 --> 00:11:02,960 Speaker 1: We have to look at the bounce back. We have 210 00:11:02,960 --> 00:11:05,280 Speaker 1: to look at the potential returns that we have on 211 00:11:05,360 --> 00:11:09,400 Speaker 1: top of that to fully understand risk. So let's look 212 00:11:09,400 --> 00:11:11,560 Speaker 1: at a chart. Okay, so we looked at the max 213 00:11:11,679 --> 00:11:14,240 Speaker 1: draw downs, but in order to understand the risk and 214 00:11:14,280 --> 00:11:16,000 Speaker 1: the sharp brak show, we also have to look at 215 00:11:16,000 --> 00:11:19,079 Speaker 1: the total returns. Right. Can't look at the bad without 216 00:11:19,120 --> 00:11:22,239 Speaker 1: looking at the goods. So what we see the total returns. 217 00:11:22,400 --> 00:11:27,600 Speaker 1: The positive returns on TLT was three years, fourteenth minus 218 00:11:27,640 --> 00:11:30,720 Speaker 1: fourteen percent, not positive minus. That's that's the good return. 219 00:11:31,040 --> 00:11:36,960 Speaker 1: Five years minus thirty eight percent not positive the negative return, right, 220 00:11:37,240 --> 00:11:39,840 Speaker 1: and we have agg Let's just jump to five years 221 00:11:39,840 --> 00:11:44,120 Speaker 1: minus three percent. But with bitcoin it was positive three positive, 222 00:11:44,120 --> 00:11:47,559 Speaker 1: twenty eight, positive, fourteen positive, seventy nine positive four to 223 00:11:47,640 --> 00:11:51,600 Speaker 1: seventy for a total one thousand and seventy eight over 224 00:11:51,679 --> 00:11:53,920 Speaker 1: five years. So we can look at the max draw down, 225 00:11:53,920 --> 00:11:57,360 Speaker 1: it was about forty six for the TLT, seventy eight 226 00:11:57,400 --> 00:12:00,280 Speaker 1: for bitcoin. But we have to look at the return, 227 00:12:00,360 --> 00:12:03,160 Speaker 1: which for Bitcoin was over one thousand and for TLT. 228 00:12:03,320 --> 00:12:05,880 Speaker 1: For the Treasury, the risk free trade was down thirty 229 00:12:05,880 --> 00:12:08,679 Speaker 1: eight percent. Now you start to understand how the sharp 230 00:12:08,760 --> 00:12:11,280 Speaker 1: ratio works, all right. So now that you understand that 231 00:12:11,360 --> 00:12:15,440 Speaker 1: there's risk and reward, there's return, and there's lost, and 232 00:12:15,480 --> 00:12:18,240 Speaker 1: that's what makes up the sharp ratio a risk adjusted return. 233 00:12:18,520 --> 00:12:20,920 Speaker 1: Let's put into some actual math. Let's do some calculations here, 234 00:12:20,920 --> 00:12:23,880 Speaker 1: because remember, portfolio theory is I'm supposed to put some 235 00:12:24,040 --> 00:12:27,199 Speaker 1: into each, right. So if we took ten thousand dollars 236 00:12:27,559 --> 00:12:30,400 Speaker 1: and we put it into each one of these the TLT, 237 00:12:30,640 --> 00:12:33,400 Speaker 1: the long bond, the AGG, the short bond, and Bitcoin, 238 00:12:33,960 --> 00:12:36,200 Speaker 1: and we held it there for the last five years, 239 00:12:36,520 --> 00:12:39,599 Speaker 1: the ten thousand dollars in the risk free trade the 240 00:12:39,679 --> 00:12:42,560 Speaker 1: US Government Treasury would have lost and would have only 241 00:12:42,559 --> 00:12:45,760 Speaker 1: become six thousand, one and eighty one. In the short 242 00:12:45,760 --> 00:12:48,000 Speaker 1: bond we would have put ten thousand in, we'd now 243 00:12:48,040 --> 00:12:50,480 Speaker 1: have nine six hundred and twenty three. It didn't lose 244 00:12:50,480 --> 00:12:53,679 Speaker 1: as much, still lost. If we put the ten thousand 245 00:12:53,760 --> 00:12:56,840 Speaker 1: dollars into bitcoin, we'd be sitting on one hundred and 246 00:12:56,920 --> 00:13:01,920 Speaker 1: seven thousand, nine hundred dollars. What that means is you 247 00:13:02,400 --> 00:13:06,640 Speaker 1: ten ext your money, which is why it's greater than 248 00:13:07,040 --> 00:13:10,000 Speaker 1: the risk, because you can't look at the good without 249 00:13:10,000 --> 00:13:12,240 Speaker 1: the bad, or the bad without the good, and that's 250 00:13:12,280 --> 00:13:15,439 Speaker 1: exactly what we see here. That's pretty shocking, right, Okay. 251 00:13:15,480 --> 00:13:17,520 Speaker 1: So now that we know all this, what are we 252 00:13:17,559 --> 00:13:19,920 Speaker 1: going to do about it? How do we position ourselves 253 00:13:19,920 --> 00:13:22,199 Speaker 1: to win? Well, there's a couple of things. Number One, 254 00:13:22,360 --> 00:13:24,640 Speaker 1: we want to look to the future. Markets are what 255 00:13:24,679 --> 00:13:28,240 Speaker 1: we call forward looking. They're discounting mechanisms, right, We're trying 256 00:13:28,240 --> 00:13:29,880 Speaker 1: to buy something cheaper today than we think it will 257 00:13:29,880 --> 00:13:32,160 Speaker 1: be in the future, which is why Tesla trades at 258 00:13:32,240 --> 00:13:36,320 Speaker 1: like one hundred and seventy two times pe. Okay, So 259 00:13:36,360 --> 00:13:40,920 Speaker 1: we're forward looking. We understand that uncertainty about the future 260 00:13:41,360 --> 00:13:45,360 Speaker 1: is what causes the volatility. However, there's some things that 261 00:13:45,400 --> 00:13:48,440 Speaker 1: we feel pretty good about the future. Number one, US 262 00:13:48,520 --> 00:13:51,920 Speaker 1: fiscal deficits. That's the government spending more money than they're 263 00:13:51,920 --> 00:13:55,400 Speaker 1: bringing in. That's continued to widen, that's going to continue 264 00:13:55,400 --> 00:13:56,959 Speaker 1: to grow. Now, why do we think it's going to 265 00:13:57,000 --> 00:13:59,080 Speaker 1: continue to grow. Well, besides the fact that, as lenn 266 00:13:59,080 --> 00:14:01,960 Speaker 1: Alden says, nothing is stopped this train. The CBO, the 267 00:14:02,040 --> 00:14:05,360 Speaker 1: Congressional Budget Office, they're the ones that set the budget 268 00:14:05,400 --> 00:14:08,200 Speaker 1: for the government. They forecast that for the next thirty years. 269 00:14:08,360 --> 00:14:10,240 Speaker 1: They tell us that the fiscal death is going to 270 00:14:10,240 --> 00:14:13,560 Speaker 1: continue to increase. Number two, we know that if the 271 00:14:13,600 --> 00:14:16,320 Speaker 1: fiscal deficit increases, if they continue to print more money 272 00:14:16,360 --> 00:14:21,360 Speaker 1: than they bring in, that the governments must borrow more money. 273 00:14:21,560 --> 00:14:24,000 Speaker 1: That's true, so they're going to spend more than they 274 00:14:24,000 --> 00:14:26,080 Speaker 1: bring in. That means they have to borrow money to 275 00:14:26,200 --> 00:14:29,040 Speaker 1: make up the gap that's the debt. And then we 276 00:14:29,080 --> 00:14:32,240 Speaker 1: know if they do that, the bond vigilantes, the people 277 00:14:32,240 --> 00:14:35,720 Speaker 1: who are buying the bonds, they're going to demand higher yields. 278 00:14:35,760 --> 00:14:38,360 Speaker 1: They want more return for the risk that they're taking. 279 00:14:38,920 --> 00:14:41,640 Speaker 1: And if they demand higher yields, then the value of 280 00:14:41,720 --> 00:14:44,840 Speaker 1: the bonds go down. This is almost certain, right, There's 281 00:14:45,040 --> 00:14:47,520 Speaker 1: only two things in life that are certain, death and taxes. 282 00:14:47,800 --> 00:14:50,320 Speaker 1: I think we can add a third that governments are 283 00:14:50,360 --> 00:14:52,680 Speaker 1: going to print money and they're going to increase the debt, 284 00:14:53,000 --> 00:14:54,920 Speaker 1: and the bond yields is going to have to come down. 285 00:14:55,240 --> 00:14:57,920 Speaker 1: So now that we know that, or we feel pretty 286 00:14:57,920 --> 00:15:00,520 Speaker 1: certain about that, what do we do. We know that 287 00:15:00,960 --> 00:15:04,480 Speaker 1: USTs the US Treasuries the full faith of the government. 288 00:15:04,640 --> 00:15:06,400 Speaker 1: They will print the money and they will give it 289 00:15:06,400 --> 00:15:08,960 Speaker 1: to you. But the problem is they're gonna be paid 290 00:15:09,000 --> 00:15:10,840 Speaker 1: back with D valued dollars. So if you take a 291 00:15:10,840 --> 00:15:14,560 Speaker 1: thirty year bond, they're gonna give you, you know, three percent, 292 00:15:14,680 --> 00:15:18,920 Speaker 1: four percent, five percent. But over thirty years, what is 293 00:15:18,920 --> 00:15:20,880 Speaker 1: that dollar gonna be worse than thirty years from now, 294 00:15:20,920 --> 00:15:23,160 Speaker 1: They're gonna pay you back with D value dollars. Now, 295 00:15:23,240 --> 00:15:25,200 Speaker 1: the second thing we know is that because of that, 296 00:15:25,720 --> 00:15:29,920 Speaker 1: gold and bitcoin are going to outperform the risk rere 297 00:15:30,040 --> 00:15:34,160 Speaker 1: yield the US treasuries. Now we also know that both 298 00:15:34,200 --> 00:15:38,640 Speaker 1: of these are straight up better investments, meaning will both 299 00:15:38,680 --> 00:15:41,320 Speaker 1: go up faster than yields. But we also know it's 300 00:15:41,400 --> 00:15:44,280 Speaker 1: not just a straight up better return, it's an actual 301 00:15:44,640 --> 00:15:48,480 Speaker 1: better risk adjusted return. We just saw the math. So 302 00:15:49,080 --> 00:15:52,560 Speaker 1: what does that mean. Well, if gold and bitcoin are 303 00:15:52,720 --> 00:15:57,240 Speaker 1: better returns and better risk adjusted returns then the bond 304 00:15:57,280 --> 00:16:01,320 Speaker 1: market than what happens, then three hundred trillion dollars that's 305 00:16:01,320 --> 00:16:04,640 Speaker 1: sitting in the bond markets will start coming over into 306 00:16:04,640 --> 00:16:07,920 Speaker 1: bitcoin and into gold. This is exactly what the bitcoin 307 00:16:08,000 --> 00:16:11,440 Speaker 1: treasury companies are doing. The bitcoin treasury companies see that 308 00:16:11,560 --> 00:16:14,000 Speaker 1: there's all this money and fixed income all around the world, 309 00:16:15,000 --> 00:16:18,560 Speaker 1: pension funds, insurance funds, all these different funds, and each 310 00:16:18,600 --> 00:16:20,200 Speaker 1: one of these funds, each one of these pools of 311 00:16:20,240 --> 00:16:23,560 Speaker 1: liquidity has different mandates. So what the bitcoin treasury companies 312 00:16:23,560 --> 00:16:26,480 Speaker 1: are doing are creating individual, unique products that can go 313 00:16:26,520 --> 00:16:28,840 Speaker 1: into each one of these pools with a specific mandates 314 00:16:28,920 --> 00:16:31,120 Speaker 1: that can start to suck the liquidity out. And it 315 00:16:31,200 --> 00:16:34,200 Speaker 1: will do that because again it is both a straight 316 00:16:34,320 --> 00:16:38,080 Speaker 1: up better return and it is a better risk adjusted return. Now, 317 00:16:38,120 --> 00:16:40,600 Speaker 1: if you want to know more about how these treasury 318 00:16:40,640 --> 00:16:43,400 Speaker 1: companies work, you might want to watch this video right here, 319 00:16:43,920 --> 00:16:45,360 Speaker 1: and I'll see you over there.