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Speaker 1: So the big question is this, how do investors like

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Speaker 1: us get access to the ideas, information, and most importantly,

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Speaker 1: the right people that give us the tools and information

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Speaker 1: we need to make informed and educated decisions to have success.

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Speaker 1: That is the question, and this podcast will give us

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Speaker 1: the answers. This is Mark Moss, your host. Let's get

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Speaker 1: this started. Hello, and welcome to another episode of the

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Speaker 1: Market Disruptors podcast. Today I am sitting down with Mark

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Speaker 1: Usko from Morgan Creek and his experience working with institutions

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Speaker 1: and endowments through what he calls alternative investments, as well

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Speaker 1: as his amazing view of the macro the global economic

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Speaker 1: view leed do some very interesting conversations. We talked about

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Speaker 1: the evolution of bitcoin growing to mascual adoption. We talked

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Speaker 1: about the current state of the global economy, what's going

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Speaker 1: on with that. We talked about what he's what he

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Speaker 1: calls China playing go, and then we talk about big point,

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Speaker 1: where does it fit into all of this? UM, how

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Speaker 1: people should be approaching it, risk levels, etcetera. UM. Some

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Speaker 1: really good conversations I really enjoyed. Let's go ahead and

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Speaker 1: just jump right into it. Hey, everyone, welcome to another

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Speaker 1: episode of the Market Disruptors podcast. Today, I am sitting

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Speaker 1: down with Mark Usko from Morgan Creek Capital and I

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Speaker 1: am super honored to be with him. He's one of

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Speaker 1: the hardest working guys in the space and so welcome Mark. Well,

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Speaker 1: thanks for having me and great to be with you.

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Speaker 1: And uh, I'll try to live up to the hardest

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Speaker 1: working title. Uh, it's a big shoes to fill, but

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Speaker 1: I appreciate that. Well, you're you're definitely doing your part.

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Speaker 1: So Mark, Um, for those that aren't aware, I want

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Speaker 1: you to just tell us a little bit about like

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Speaker 1: what you've been doing and how you got here and

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Speaker 1: what you're doing right now. Yeah. So the short version

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Speaker 1: obviously I don't do short well, but the short version is, uh,

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Speaker 1: you know, I came out of the investment world that

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Speaker 1: we're an insurance company and asset management firm, got into

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Speaker 1: endowment management back at my alma moderate Notre Dame, spent

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Speaker 1: five years there's the number two. Then it took over

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Speaker 1: as the head of University of North Carolina. This is

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Speaker 1: a long time ago, back twenty one years ago, but

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Speaker 1: fifteen years ago, spun out on my own and form

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Speaker 1: Morgan Creek and the whole idea about morgan Creek was

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Speaker 1: to bring alternative investments to lots of investors, so, you know,

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Speaker 1: build products and services that would allow people to integrate

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Speaker 1: this idea of alternative investments into their portfolios. And how

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Speaker 1: little did I know that it would come full circle

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Speaker 1: here today? Uh, you know, back from hedge funds twenty

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Speaker 1: years ago in private equity and venture capital and and

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Speaker 1: now we're talking about crypto assets and cryptocurrency so pretty

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Speaker 1: exciting stuff. Yeah, yeah, really alternative now. Yeah, And you know, look,

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Speaker 1: morgan Creek today is a resure investment advisor. We've got

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Speaker 1: just under a couple of billion dollars of assets, a

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Speaker 1: lot of that in private investments, and then a year

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Speaker 1: ago we launched a new subsidiary called morgan Creek Digital

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Speaker 1: and we've raised a venture fund around that to invest

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Speaker 1: in infrastructure and crypto it self. And just excited about this,

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Speaker 1: this new set of opportunities and how it all fits

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Speaker 1: together in the big world in which we all have

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Speaker 1: to deploy capital into today. Yeah. So I'm super interested

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Speaker 1: to hear your viewpoint on this because of where you sit,

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Speaker 1: having previously worked with endowments and now today kind of

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Speaker 1: with more incre digital, working with institutions and whatnot. So um,

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Speaker 1: I think uh, bitcoin's emergence has been a little bit

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Speaker 1: different in a sense where it started retail, but really

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Speaker 1: to kind of get to mainstream at some point, if

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Speaker 1: we believe it's going to be this store of value,

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Speaker 1: there's probably gonna be this this evolution um that it

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Speaker 1: has to go from maybe a collectible where it's at today,

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Speaker 1: speculative asset into a store of value. And I think

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Speaker 1: that it has to probably go through the institution's first

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Speaker 1: before it hits mainstream. Would you agree with that? Yeah, look,

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Speaker 1: I totally agree it, and I think evolution used exactly

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Speaker 1: the right word. I wrote a letter about this a

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Speaker 1: few quarters ago on on kind of financial natural selection

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Speaker 1: or the evolution of of technology revolutionary. I mean, there's

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Speaker 1: nothing really revolutionary about the ideas of distributed ledger technology,

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Speaker 1: and in triplentiary accounting. There is some revolution in in

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Speaker 1: solving the double spend problem UH and getting getting a

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Speaker 1: new technological application a use case for d LT. But

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Speaker 1: I do think that the evolution is is more appropriate

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Speaker 1: and and to your point, the big money is controlled

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Speaker 1: by institutions and the institutions of God. To get comfortable

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Speaker 1: with anything for it to become really part of of

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Speaker 1: the fabric of of the investment landscape. I mean, go

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Speaker 1: back fifty sixty years. Most endowments, institutions, foundations, pensions were

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Speaker 1: prohibited by charter in many cases from investing in stocks.

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Speaker 1: I mean think about that. They were mostly in fixed

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Speaker 1: incomes securities. And then stocks were the new news. There

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Speaker 1: were the alternative investment. And then it was international stocks

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Speaker 1: with Arissa back in the seventies. Oh my gosh, you're

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Speaker 1: gonna invest outside the borders of the United States. How risky?

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Speaker 1: Not risk you at all. But uh. And then it

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Speaker 1: was you know, twenty plus years ago, when I was

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Speaker 1: back at Notre Dame, it was hedge funds and and

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Speaker 1: junk bonds. You know, first time we brought distress securities

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Speaker 1: to the board. There you can't invest in junk bonds.

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Speaker 1: I'm like, wait a second, fifty five per cent of

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Speaker 1: the fund is in equity, which is junior to even

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Speaker 1: the worst debt. So think about it that way in

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Speaker 1: terms of unsecured claims. And then when we tried hedge funds, like,

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Speaker 1: oh no, you can't invest in hedge funds because that's

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Speaker 1: where all the bad people are. Like what are you

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Speaker 1: talking about the right, Well, they charge these high fees, like, well,

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Speaker 1: in what business do you know, does the best person

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Speaker 1: not charge the highest feet right? Dr lawyer, football coach,

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Speaker 1: basketball player. That's the way the world works. So and

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Speaker 1: then it was private equity and venture capital and all

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Speaker 1: these assets of actually become mainstream because, as you point out,

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Speaker 1: the institutions finally become comfortable, and it's not until that

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Speaker 1: time when the rest of the investment landscape and particularly

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Speaker 1: the firms. Right here's the crazy thing. There are asset

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Speaker 1: management firms. I was just having a conversation with my

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Speaker 1: wife last night. She's got a little bit of capital

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Speaker 1: she's investing, and uh, you know, I was talking about, hey,

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Speaker 1: maybe we should put some exposure to to bitcoin in there.

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Speaker 1: Let's just buy GBTC because it's easy. Oh yeah, you know,

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Speaker 1: the brokerage firm that that we work with for her account,

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Speaker 1: they prohibit ownership of GBTC. That's just silly. And it

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Speaker 1: goes further. There's one firm out there. Won't name names,

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Speaker 1: but it's the biggest one broken jus from not only

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Speaker 1: do they not let your own g BTC, they won't

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Speaker 1: let a financial advisor take a new client if their

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Speaker 1: wealth was created by crypto. Wow, that is absolutely insane

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Speaker 1: on every level. Yeah, that's insane. So, uh you've seen this.

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Speaker 1: I guess you've seen this where you had to kind

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Speaker 1: of go back to these um funds or these endowments

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Speaker 1: and tell them over and over, hey you should look

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Speaker 1: at this, or so you kind out this history of

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Speaker 1: breaking new assets or risk your assets in So I

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Speaker 1: guess you've seen this this playout before, and so today

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Speaker 1: you're they're kind of pitching these guys now saying, hey,

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Speaker 1: this is the new thing that you need to consider. Yeah, Okay,

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Speaker 1: I'm a big movie buff, seen this movie before. Uh,

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Speaker 1: this is not the first time, it won't be the

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Speaker 1: last time. Look, innovation is scary, you know for the

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Speaker 1: ok the name of your your pod, right, you know

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Speaker 1: market disruptors. Uh, it's all about disruption and disruptive innovation.

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Speaker 1: And every incumbent fears disruption, as they should. And you know,

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Speaker 1: the street sweepers passed out pamphlets saying that if you've

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Speaker 1: got an automobile, you die. And you know, the candle

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Speaker 1: makers passed out stuff saying, you know, you go blind

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Speaker 1: if you look at that. You know, lowing or that

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Speaker 1: Mr Edison created or my, my, my, uh my grandfather

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Speaker 1: in laws parents, you know, chastised him from leaving the

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Speaker 1: safe job at the railroad to take the risky job

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Speaker 1: at that American airlines company. And uh, you know, because

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Speaker 1: people really believed that if you got in an airplane

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Speaker 1: and you went faster than a certain miles per hour,

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Speaker 1: that your body would cave in on itself. So there's

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Speaker 1: all this fear, uncertainty, and doubt around disruption, and it

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Speaker 1: occurs in every disruptive phase, whether it's technology, whether it's innovation,

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Speaker 1: whether it's custom and thinking about Galileo, poor Galileo, right,

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Speaker 1: it's like, you know, guys, my data says that the

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Speaker 1: earth um actually revolves around the Sun, not vice versa.

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Speaker 1: And they labeled on a heretic and you wanted to

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Speaker 1: burn him at the State. But it is dangerous to

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Speaker 1: have a view different from the masses. But that's where

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Speaker 1: all the great wealth is created. That's my pin and

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Speaker 1: tweet on Twitter, right, is great wealth is created by

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Speaker 1: investing in something that you believe in before everyone else

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Speaker 1: even understands. So having seen this movie before, um, if

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Speaker 1: you have a perspective there, but you're also on the

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Speaker 1: front lines talking to them about it. Where are we

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Speaker 1: I mean, I'm guessing over the last year you've seen

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Speaker 1: a lot of people are starting to warm up to

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Speaker 1: this idea. I mean we've seen, you know, maybe the

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Speaker 1: Yell and Diamond Fund dip their toe in the water

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Speaker 1: a little bit like so where are we with that? Yeah? Look,

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Speaker 1: I mean Yale got a lot of pressed, but they

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Speaker 1: barely dip the tip of their toe nail. I mean,

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Speaker 1: the amount of assets they put in the fun relative

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Speaker 1: of their total access was was teeny tiny. The guys

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Speaker 1: actually get credit is Harvard. Harvard put in some real money.

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Speaker 1: They went big into the fund, about ten times as

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Speaker 1: much as Yale put in, and then they went into

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Speaker 1: to a direct deal. Um. So that that's pretty exciting. Uh.

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Speaker 1: And ARV is a great ceio over there at Harvard.

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Speaker 1: So if you think about what's going on, we're still

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Speaker 1: in that you know, early early adopter phase. You know,

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Speaker 1: we haven't even gotten into the early majority. And I'll

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Speaker 1: say in the individual world, the retail world, we're probably

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Speaker 1: in the early majority, but we're just at the very

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Speaker 1: knee of the S curve. You know, we're probably going

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Speaker 1: from like eight percent to eleven or twelve in terms

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Speaker 1: of adoption, and we've got a long way to go

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Speaker 1: before we've got got full adoption. And and there's the

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Speaker 1: couple of things at work here. One, there's the fear. Right.

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Speaker 1: You know, you've got you got people of influence like

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Speaker 1: Jamie Diamond or Warren Buffett or Charlie Munger you know,

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Speaker 1: calling it bad names, a fraud or you know, Warren

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Speaker 1: calls it rat poise and I always say, well, how

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Speaker 1: do you know what rap poise? And taste like um?

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Speaker 1: And then you got Charlie saying it's like trading, you know,

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Speaker 1: harvested baby brains. And my really w t f Charlie

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Speaker 1: seriously brains. So why do those guys want you to

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Speaker 1: fear it? Well, Fort of Berkshire Hathaway as in financial services.

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Speaker 1: Financial services are at risk of being disrupted by this

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Speaker 1: new technology and so they're they're gonna say bad things

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Speaker 1: about it. And one of the things that's important for

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Speaker 1: institutions is to consider the source, right. Don't listen to

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Speaker 1: people who are shilling projects that have no you know,

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Speaker 1: foundation or basis in in the future. You know, you

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Speaker 1: look at I don't I don't like the term, but

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Speaker 1: you know, people call them shiit coins, right, and they're

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Speaker 1: not even coins right there, their utility tokens. They are.

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Speaker 1: They're basically precede and seed stage venture capital projects which

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Speaker 1: have a loss ratio, which should not be surprising to anybody.

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Speaker 1: Most companies fail. And there's only about a dozen or

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Speaker 1: so cryptocurrencies that actually should be called cryptocurrencies. Everything else

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Speaker 1: should be called utility token and call it what it is,

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Speaker 1: preseed stage venture. So focusing on the differences and not

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Speaker 1: conflating terms and getting information right is is going to

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Speaker 1: help this thing is. Don't listen to the fomo either.

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Speaker 1: You know, you've got the people who are, oh, we're

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Speaker 1: gonna miss it, We're gonna miss you gotta get it. No, no, right,

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Speaker 1: there's plenty of time, plenty of time to you know,

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Speaker 1: have a plan, find good people to work with, find

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Speaker 1: a logical step wise progression. You know, you don't have

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Speaker 1: to just invest in cryptocurrency. You can invest in venture

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Speaker 1: capital and infrastructure. You can invest in lending, you can

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Speaker 1: invest in in uh certain forms of cryptocurrency or even

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Speaker 1: derivatives related to cryptocurrency. There's lots of things that are

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Speaker 1: evolving for institution to look at and the smart ones,

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Speaker 1: and we've fortunately found a handful of the smart ones

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Speaker 1: are doing just that. So you're talking about and not

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Speaker 1: just buying coins, but buying in like infrastructure place so

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Speaker 1: like for example Microsoft is has been and probably will

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Speaker 1: be a big benefitiary you could look at like in

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Speaker 1: video making video cards for mining to stuff like that. Yeah, look,

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Speaker 1: there's there's all the way to that extreme that you're

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Speaker 1: talking about. Which are the existing companies that support the

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Speaker 1: the ongoing development, and you know, the challenges is finding

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Speaker 1: the right ones. It's like like IBM, IBM, what they're

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Speaker 1: doing in blockchain is really interesting, but it's such a

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Speaker 1: tiny piece of their overall dying business that it probably

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Speaker 1: wouldn't buy that stock. Microsoft a little bit different, a

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Speaker 1: little bit better, something like a m D or in video,

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Speaker 1: you know, a m D in particular, where you've got

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Speaker 1: so much of the exposure of their business to this

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Speaker 1: this evolving technology. I like it a lot. Now it's

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Speaker 1: gone up a lot, and I think it's it's a

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Speaker 1: little richly priced today. Um, but that's just you know,

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Speaker 1: how you do it. You buy the dips and you

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Speaker 1: hold for for long periods of time on those those

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Speaker 1: companies that are helping to build out the instruction. But

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Speaker 1: when I talk about infrastructure, I mean the private investments

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Speaker 1: in the private businesses that truly are building out you know, exchanges,

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Speaker 1: software tools, um, you know, education and resources. You know,

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Speaker 1: somebody is going to create the bloomberg of peptoe. We

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Speaker 1: think we've tested in that that firm digital asset data,

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Speaker 1: but we'll see yeah great, so um, we're we're in

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Speaker 1: that evolution stage. It's happening. Um, But it seems like

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Speaker 1: there's stuff going on globally that's seeming like it wants

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Speaker 1: to accelerate that. Right. It's like almost like all these

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Speaker 1: like global macro policies are like just wanting people to

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Speaker 1: buy a bitcoin or adopted alternative system. And I know

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Speaker 1: you've talked a lot about You've tweeted a lot about

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Speaker 1: like quee um, zombie companies, negative interest rates, right, and

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Speaker 1: so these are all things that possibly could be these

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Speaker 1: black swan events or really push this is that what

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Speaker 1: you think? Look, you know absolutely, you know the macro

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Speaker 1: is lining up and has been lining up for a

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Speaker 1: decade now. It's not a coincidence that bitcoin in particular

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Speaker 1: as a use case for blockchain technology and specifically about

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Speaker 1: monetization of value or money or stores of value. Uh

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Speaker 1: came a out in two thousand nine. Right, that that's

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Speaker 1: not a surprise, A trough of the goal financial crisis,

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Speaker 1: you know, the genesis block refers to the chancellor second

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Speaker 1: bail out of the banks. Uh. And and everything that's

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Speaker 1: gone on in the last decade from central banks becoming

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Speaker 1: very very kind of omniscient godlike uh people. You know,

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Speaker 1: a friend of mine says the best, Right, I remember

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Speaker 1: a time. I'm old enough, I remember a time when

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Speaker 1: I didn't know the names of central bankers. I long

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Speaker 1: for those days to to return, and you know they aren't.

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Speaker 1: The The idea that if if it was easy to

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Speaker 1: create wealth by printing money literally by pushing a button

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Speaker 1: and printing money literally physically printing printing press kind of

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Speaker 1: physical notes and coins or you know, ones and zeros

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Speaker 1: in a bank account, if it were that easy, then

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Speaker 1: wouldn't everybody do it? Wouldn't every country just print as

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Speaker 1: much currency as they possibly could. They'll try, and they

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Speaker 1: do try, right, and we've seen the outcome. Right, We've

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Speaker 1: seen in the hyper inflationary outcome in places like Zimbabwe

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Speaker 1: or Venezuela. You know, a cup of coffee a year

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Speaker 1: ago cost you know, nine cents. Today it costs you

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Speaker 1: know what is the fourteen thousand dollars or something um

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Speaker 1: four thousand percent um monthly inflation. So now that's the

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Speaker 1: hyper inflation side. The thing that I'm more worried about

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Speaker 1: is the deflationary side, which is you've got bad demographics. Right,

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Speaker 1: You've got too many old people, meaning sixty day five

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Speaker 1: and sixty five year old people don't spend as much

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Speaker 1: as five year old people. They're not as productive. Then

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Speaker 1: you've got too much debt. You've got all the developed world, Japan, US, Europe,

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Speaker 1: you know, most developed world drowning in debt and overspending.

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Speaker 1: And we were a trillion dollar deaths in the United

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Speaker 1: States because of the silly Tax to Formact that we

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Speaker 1: passed a year and a half ago. And then on

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Speaker 1: top of that, you've got deflation. So deflation is essentially

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Speaker 1: put us in this place where we feel compelled as

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Speaker 1: governments to print more currency and devalue our currency in

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Speaker 1: a race to the bottom to try to inflate our

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Speaker 1: way out of the debt. But it's not working. And

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Speaker 1: so what the problem is that we have is you

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Speaker 1: have this you said, the perfect storm for a fixed

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Speaker 1: supply hard currency or sound money like bitcoin to come

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Speaker 1: in and say, wait a second, if I want to

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Speaker 1: opt out of the fiat currency system, or the Fiat

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Speaker 1: fiasco as I like to call it, uh, if you

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Speaker 1: want to opt out of that and have a little

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Speaker 1: bit of chaos heads or a little you know, schmuck

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Speaker 1: insurance as somebody called it, I should be in kredit.

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Speaker 1: I can't remember who said it, but the schmuck insurance.

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Speaker 1: You know, we got scho leaders all around the world

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Speaker 1: doing stupid stuff. Whether it's bad policies like trade wars,

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Speaker 1: whether it's bad decisions like you know, trade dept or

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Speaker 1: budget deficits spending, whether it's bad things like que all

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Speaker 1: of that is leading to this devavaluation and this depreciation

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Speaker 1: of the value of these assets. And look, if I

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Speaker 1: were them, and I were the dictator, I would do

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Speaker 1: the same thing. Well, actually I wouldn't because I have conscience.

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Speaker 1: But dictators go by the dictator playbook, right. They amass

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Speaker 1: the assets, then they devalue the currency. That's the way

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Speaker 1: it works, and that's exactly what's happening today. And the

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Speaker 1: problem is the average person, right everage person in America

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Speaker 1: doesn't hold a stock. People in this country have no stock,

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Speaker 1: not one not They're four when Caplin, they're a pension fund.

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Speaker 1: They don't own stock directly. They are not benefiting by

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Speaker 1: the increase of real assets, financial assets. They would benefit

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Speaker 1: from holding a sound monetary um aggregate like like yeah,

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Speaker 1: and that's why we have this growing divide between the

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Speaker 1: rich and the poor. The richer inflating their assets. The

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Speaker 1: poor don't have assets. And because there because their money

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Speaker 1: is becoming less value, it's there. Their wages have gone down,

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Speaker 1: their producing power has gone down at the same time.

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Speaker 1: So it's like this this growing gap. Well, it's the

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Speaker 1: worst since the nineteen thirties. It's the worst income and

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Speaker 1: wealth inequality in the history of the United States. We

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Speaker 1: were doing better from kind of nineteen thirty through the

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Speaker 1: late sixties, and really since nineteen seventy one when we

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Speaker 1: did you know, the Fiat fiasco. We went off the

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Speaker 1: gold standard, and and some would say, well, you know,

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Speaker 1: all of this isn't working. You know, the QUEI is

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Speaker 1: not working, the change of the goals. No, it's working

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Speaker 1: exactly as they planned. If if you actually stopped for

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Speaker 1: a second and say, wait, the haves like being haves

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Speaker 1: and they would like to have a greater percentage of

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Speaker 1: what they have, then it makes perfect sense. And they

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Speaker 1: have not don't seem to. But I don't understand is

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Speaker 1: they have not seemingly vote for the policies that are

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Speaker 1: making them less rich. Well, I think it's not. We're

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Speaker 1: an election cycle, so it's not. Uh, I don't think

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Speaker 1: it's it's hard to understand why. And if you look

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Speaker 1: at the debates that are going on, someone's promising freeification,

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Speaker 1: someone's been promising free reparations, promising free thousand dollars a month.

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Speaker 1: Someone's promising I mean and so q E pays for that, right, Like,

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Speaker 1: that's that that pays for that. So it's it's not

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Speaker 1: a big it's not a big stretch to see how

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Speaker 1: that gets in. But we don't want to jump into

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Speaker 1: politics because we could go crazy there. But um, we

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Speaker 1: do have these narratives in bitcoin, right, and so we're

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Speaker 1: always talking about uh it seems like it drives this.

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Speaker 1: And so one narrative I see is like and people

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Speaker 1: have last onto this is we talked about the economy

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Speaker 1: is good. The economy is good. The economy is good

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Speaker 1: because the stock market is high. But the stock market

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Speaker 1: being high doesn't mean the economy is good, especially for

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Speaker 1: the little guy, right, that's what you're saying, not at all. Now.

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Speaker 1: In fact, you bring up one of the most important

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Speaker 1: points is the economy is not the stock market. The

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Speaker 1: stock market is not the economy, and there are lots

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Speaker 1: of examples. Right. The fastest growing economies in the world

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Speaker 1: over the last two decades have not had the best

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Speaker 1: performing stock markets. Right. The best performing stock market in

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Speaker 1: the world the last two years is Venezuela. Their economy

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Speaker 1: is in the hitner. I mean, I hate to use

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Speaker 1: that word, but that that's where it is. But it's

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Speaker 1: the best performing stock market because on a nominal value, uh,

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Speaker 1: you know, the price of of things goes up and

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Speaker 1: the dictators takes all the assets because they own all

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Speaker 1: the assets. So to your to your point, everyone points to, oh,

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Speaker 1: the economy is great, Well, the economy is actually not good.

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Speaker 1: The economy is good on some measures. You can say, well,

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Speaker 1: a lot of people are working. Well how are they working?

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Speaker 1: Are they underemployed or they fully employed? You know, if

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Speaker 1: you lose your job as a manager at a T

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Speaker 1: and T and you take a job as a barista,

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Speaker 1: you still show up as employed. Now, I would argue

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Speaker 1: your life is less good unless maybe you want more

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Speaker 1: free time. But then the other problem you have is

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Speaker 1: every day someone turns sixty five, they get taken out

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Speaker 1: of the workforce or workforce participation rate drops. Then you

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Speaker 1: got this other crazy thing called the birth death ratio

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Speaker 1: that occur is when the BLS, the Bureau of Labor

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Speaker 1: and Statistics, makes up data based on where we are

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Speaker 1: in the length of the economics cycle, and they said

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Speaker 1: this many companies should be born, this many should die,

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Speaker 1: so we have this many new jobs. Well did you

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Speaker 1: actually count the jobs? Oh? Well no, Well you do

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Speaker 1: realize that this risk recovery is half as strong as

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Speaker 1: previous recovery. Sure you're justing for that, right, Well no, okay,

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Speaker 1: So all of that, you know, indications of oh, people

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Speaker 1: point to um, you know, uh, consumer confidence. Well, of

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Speaker 1: course people have consumer confidence because they read the headlines

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Speaker 1: every day at the stock market is great. Wow, a

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Speaker 1: president tweets about the tweeter in chief every day, woks up.

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Speaker 1: When the market goes down like today, he won't be

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Speaker 1: tweeting today about the market. But said, like you said,

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Speaker 1: the people own no stock so what do they even care?

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Speaker 1: What makes sense the economy. We just had the worst

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Speaker 1: ten years of economic growth the United States in history.

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Speaker 1: Now part of that as figures lie in the liar's figure,

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Speaker 1: in the sense that it is the law of large

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Speaker 1: non verse and it is harder to grow a very

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Speaker 1: large economy at a high rate, although China is doing

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Speaker 1: a pretty good job of doing that. It was so

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Speaker 1: it's made up. Well, I love about that is people say, well,

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Speaker 1: the Chinese data is made up, You mean more made

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Speaker 1: up than our data. It's actually the same amount of

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Speaker 1: made up. And in fact, Bloomberg tried to show how

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Speaker 1: much the data was made up in China. So they

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Speaker 1: created a thing called the Lee Kua Kong Index, which is,

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Speaker 1: you know, using electricity and employment and money flows, and

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Speaker 1: they calculated what they thought the GDP growth was, and

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Speaker 1: it turned out that number was actually saying that China

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Speaker 1: was understating because they don't want to freak people out.

426
00:23:37,080 --> 00:23:41,119
Speaker 1: So it is possible to grow quickly, you have to

427
00:23:41,160 --> 00:23:44,600
Speaker 1: have a different type of of command economy as opposed

428
00:23:44,640 --> 00:23:48,200
Speaker 1: to appear democracy. Uh. And some people would argue against that,

429
00:23:48,240 --> 00:23:50,800
Speaker 1: but the bottom line is, you know, our growth United

430
00:23:50,800 --> 00:23:52,680
Speaker 1: States is not high. Growth in Europe is not high.

431
00:23:52,720 --> 00:23:55,679
Speaker 1: Growth in Japan is not high. It's demographic problem. It's

432
00:23:55,680 --> 00:23:58,919
Speaker 1: a debt problem. And all that comes together back to

433
00:23:58,920 --> 00:24:02,560
Speaker 1: your original point, it creates this perfect storm where the

434
00:24:02,720 --> 00:24:06,879
Speaker 1: macro suddenly has there's a there's a role as a

435
00:24:06,960 --> 00:24:14,240
Speaker 1: macro hedge or a safe haven. And I've gotten great debate.

436
00:24:15,040 --> 00:24:17,480
Speaker 1: It can't be a safe haven, it's too volatible. Well,

437
00:24:17,520 --> 00:24:20,679
Speaker 1: if you define safe haven simply as volatility of an asset,

438
00:24:20,840 --> 00:24:23,159
Speaker 1: you're missing the point. The point of a safe haven

439
00:24:23,240 --> 00:24:26,760
Speaker 1: is what do I feel comfortable and secure in holding

440
00:24:26,760 --> 00:24:29,920
Speaker 1: a portion of my assets if there's chaos someplace else.

441
00:24:30,200 --> 00:24:32,760
Speaker 1: And one of the best things about cryptocurrency and bitcoin

442
00:24:32,840 --> 00:24:37,159
Speaker 1: in particular, it's not seizable right in some ways it

443
00:24:37,240 --> 00:24:42,640
Speaker 1: can actually be um not um recordable, meaning people don't

444
00:24:42,720 --> 00:24:45,120
Speaker 1: know where you have it or where you're storing it.

445
00:24:45,119 --> 00:24:48,600
Speaker 1: It can be moved globally instantaneously. You know, all the

446
00:24:48,680 --> 00:24:50,840
Speaker 1: things that we think about to say here, like gold

447
00:24:50,920 --> 00:24:54,199
Speaker 1: is really hard to to move around. It's heavy, you know,

448
00:24:54,240 --> 00:24:57,200
Speaker 1: it's hard to divide. You've got to pay someone to

449
00:24:57,320 --> 00:25:00,720
Speaker 1: ensure it or store it. Um you crypto has some

450
00:25:00,840 --> 00:25:03,440
Speaker 1: huge advantages, and that's why I think bitcoin has digital

451
00:25:03,560 --> 00:25:07,560
Speaker 1: gold as its first use case is really quite interesting. Yeah,

452
00:25:07,600 --> 00:25:10,000
Speaker 1: so let's talk about that for a minute. Um, so

453
00:25:10,280 --> 00:25:12,360
Speaker 1: you know, we have this perfect storm. You you kind

454
00:25:12,359 --> 00:25:15,879
Speaker 1: of frame that up for us really really well. Um,

455
00:25:16,080 --> 00:25:20,119
Speaker 1: demographics and you know, inflation, deflation, these things, and we

456
00:25:20,160 --> 00:25:23,120
Speaker 1: have this case set. So traditionally gold has been that.

457
00:25:23,359 --> 00:25:26,000
Speaker 1: Um when when when currencies inflate, people can go to

458
00:25:26,040 --> 00:25:31,600
Speaker 1: gold because it's not inflatable, can't be inflated. Um, potentially

459
00:25:31,720 --> 00:25:34,000
Speaker 1: right with gold is called digital gold or I'm sorry

460
00:25:34,040 --> 00:25:38,000
Speaker 1: bitcoin is being called digital gold. But uh, in an

461
00:25:38,080 --> 00:25:40,920
Speaker 1: inflationary environment, gold should work really well. But we saw

462
00:25:40,960 --> 00:25:43,640
Speaker 1: in two thousand and eight that gold actually got hammered

463
00:25:43,720 --> 00:25:46,440
Speaker 1: at the same time as the financial crash. However, it

464
00:25:46,560 --> 00:25:49,800
Speaker 1: did bounce back right away. So it almost seems that, um,

465
00:25:49,880 --> 00:25:52,960
Speaker 1: you have this deflationary move that happens first, right, this

466
00:25:53,080 --> 00:25:56,439
Speaker 1: debt de leveraging, which pushes gold down, but then all

467
00:25:56,480 --> 00:25:58,840
Speaker 1: of a sudden they're gonna start printing to try to

468
00:25:58,920 --> 00:26:01,480
Speaker 1: reinflate it, which pushes it back up. So is that

469
00:26:01,560 --> 00:26:04,360
Speaker 1: kind of what you see? Absolutely? Well, the thing about gold,

470
00:26:04,560 --> 00:26:09,159
Speaker 1: it's the only asset in the world until bitcoin was

471
00:26:09,160 --> 00:26:14,040
Speaker 1: created that acts both as a currency and a commodity,

472
00:26:14,560 --> 00:26:16,240
Speaker 1: and so you think about there are lots of commodities,

473
00:26:16,280 --> 00:26:21,439
Speaker 1: and commodities can do, you know, very poorly in an

474
00:26:21,480 --> 00:26:24,800
Speaker 1: economic downturn. Global financial crisis was certainly an economic downturn,

475
00:26:24,800 --> 00:26:26,960
Speaker 1: and a lot of people thought of gold in its

476
00:26:27,000 --> 00:26:30,919
Speaker 1: commodity form first and they sold. Then it turns to

477
00:26:31,200 --> 00:26:34,919
Speaker 1: currency or store of value, and then people are, oh, geez,

478
00:26:34,960 --> 00:26:37,320
Speaker 1: you know, there's gonna be this fed reaction or this

479
00:26:37,320 --> 00:26:40,080
Speaker 1: this central bank reaction, and I'm gonna need uh an

480
00:26:40,119 --> 00:26:42,879
Speaker 1: inflation heads. The problem is we haven't had any inflation.

481
00:26:43,400 --> 00:26:47,280
Speaker 1: We've had deflation. And so gold does have this really

482
00:26:47,520 --> 00:26:51,720
Speaker 1: interesting history, and you know, people say, well, has it

483
00:26:51,760 --> 00:26:54,040
Speaker 1: has uh you know, people have faith in it. We'll

484
00:26:54,040 --> 00:26:55,879
Speaker 1: know what they have is its custom, right, It's been

485
00:26:55,920 --> 00:26:59,120
Speaker 1: a custom for five thousand years. It's a long time

486
00:26:59,520 --> 00:27:01,960
Speaker 1: that one ounce of gold has bought a fine man's suit.

487
00:27:02,480 --> 00:27:05,320
Speaker 1: And so despite all the ups and downs of currency

488
00:27:05,320 --> 00:27:07,760
Speaker 1: and other than seven or seventy five paper currencies in

489
00:27:07,760 --> 00:27:09,800
Speaker 1: the history of the world, three quarters of them no

490
00:27:09,880 --> 00:27:12,240
Speaker 1: longer exist, and the rest of them will go away

491
00:27:12,280 --> 00:27:15,200
Speaker 1: over time too, because paper currency will always go away

492
00:27:15,840 --> 00:27:19,520
Speaker 1: because not backed by anything it's FIA, and so ultimately

493
00:27:19,680 --> 00:27:23,000
Speaker 1: gold does act as that store. But the reason that

494
00:27:23,119 --> 00:27:25,840
Speaker 1: it has is custom Now, what's interesting is in the

495
00:27:25,920 --> 00:27:30,800
Speaker 1: last ten years there's been this new customary asset Bitcoin,

496
00:27:31,160 --> 00:27:35,879
Speaker 1: where people, particularly young people, say, huh, it's more portable,

497
00:27:36,200 --> 00:27:40,840
Speaker 1: it's more easily stored, it's more easily divided. It may

498
00:27:40,880 --> 00:27:44,399
Speaker 1: actually have another use case as a method of payment

499
00:27:44,480 --> 00:27:46,520
Speaker 1: at some point, although it's pretty slow to do that.

500
00:27:46,560 --> 00:27:49,719
Speaker 1: I'll probably a second layer like lightning. But the bottom

501
00:27:49,760 --> 00:27:52,119
Speaker 1: line is, if you ask the average thirty five year

502
00:27:52,160 --> 00:27:55,199
Speaker 1: older younger how much gold you are, well, none. Why

503
00:27:55,240 --> 00:27:56,840
Speaker 1: would I have your own gold? If you ask him

504
00:27:56,840 --> 00:28:00,040
Speaker 1: how much bitcoin they have, the answers might surprise you some.

505
00:28:02,720 --> 00:28:08,360
Speaker 1: And that is a a difference in other assets. And

506
00:28:08,440 --> 00:28:11,080
Speaker 1: one of the things I really really love about bitcoin,

507
00:28:11,160 --> 00:28:13,680
Speaker 1: and one of the things that reasons I think institutions

508
00:28:13,720 --> 00:28:16,680
Speaker 1: will adopt it sooner rather than later, is Look, I've

509
00:28:16,680 --> 00:28:18,040
Speaker 1: been doing this a long time. I got white hair

510
00:28:18,080 --> 00:28:20,400
Speaker 1: to prove it. Although my son said, you know, this weekend, Dad,

511
00:28:20,400 --> 00:28:24,040
Speaker 1: you're your hair still black in the back. I'm like, well, yeah, okay,

512
00:28:24,080 --> 00:28:27,440
Speaker 1: but um, I've been around long enough to see all

513
00:28:27,440 --> 00:28:30,440
Speaker 1: of these promises of alternative investments that are going to

514
00:28:30,560 --> 00:28:35,359
Speaker 1: give you a better return or lower correlation or diversify

515
00:28:35,480 --> 00:28:41,000
Speaker 1: diversification benefit. And you know in national stock correlated hedge

516
00:28:41,040 --> 00:28:45,920
Speaker 1: funds correlate, even bonds correlated, so they don't give you

517
00:28:45,960 --> 00:28:50,480
Speaker 1: this perfect correlation. Hedge Bitcoin, interestingly, through the ups, through

518
00:28:50,480 --> 00:28:54,680
Speaker 1: the downs, good bad, is only fifteen point one five correlated,

519
00:28:55,120 --> 00:28:58,480
Speaker 1: and in some cases, like May and today, it actually

520
00:28:58,480 --> 00:29:01,560
Speaker 1: has negative correlation. So I'm not saying it's gonna be

521
00:29:01,600 --> 00:29:03,560
Speaker 1: negatively correlated all the time. It's not gonna be a

522
00:29:03,560 --> 00:29:07,200
Speaker 1: perfect head, but that point one five correlation is really important.

523
00:29:07,200 --> 00:29:09,160
Speaker 1: And where does it come from. It comes from the

524
00:29:09,160 --> 00:29:13,840
Speaker 1: fact that stocks, bonds, commodities, traditional assets all derive their

525
00:29:13,920 --> 00:29:17,760
Speaker 1: value from the same thing economic growth, interest rates, and

526
00:29:17,960 --> 00:29:22,520
Speaker 1: central bank policies. Bitcoin derives its value from very different

527
00:29:22,560 --> 00:29:29,240
Speaker 1: things technology, regulatory changes, millennial usage, and this this need

528
00:29:29,600 --> 00:29:34,760
Speaker 1: for an alternative store of value, so it moves differently

529
00:29:34,800 --> 00:29:37,480
Speaker 1: and independently, which is a huge advantage when you build

530
00:29:37,520 --> 00:29:40,160
Speaker 1: it into a portfolio. So when you're building that into

531
00:29:40,200 --> 00:29:42,000
Speaker 1: a portfolio, you want to take you want to take

532
00:29:42,000 --> 00:29:44,480
Speaker 1: into consideration the volatilely that it has, which is kind

533
00:29:44,480 --> 00:29:47,160
Speaker 1: of the risk that it has um. So with bitcoin,

534
00:29:47,200 --> 00:29:50,600
Speaker 1: we have this huge asymmetric upside with you know, a

535
00:29:50,680 --> 00:29:54,160
Speaker 1: smaller downside, but it's also way more volatiles, which you

536
00:29:54,200 --> 00:29:57,160
Speaker 1: know has a risk adjusted basis. So then when you're

537
00:29:57,200 --> 00:30:00,680
Speaker 1: putting it into whatever portfolio, whether that's being institute portfolio

538
00:30:00,760 --> 00:30:03,200
Speaker 1: or retail portfolio, you should try to consider that. And

539
00:30:04,160 --> 00:30:05,880
Speaker 1: how does someone look at that? We definitely have to

540
00:30:05,960 --> 00:30:09,240
Speaker 1: consider it. But here's the problem with volatility. Volatility is

541
00:30:09,280 --> 00:30:12,680
Speaker 1: not risk, right, risk is risk of absolute loss or

542
00:30:12,720 --> 00:30:16,520
Speaker 1: permanent impairment of capital. The intersestant thing is Harry Markuts.

543
00:30:16,560 --> 00:30:18,400
Speaker 1: I'm a big Harry Marquts fan. Of fact, I got

544
00:30:18,440 --> 00:30:20,160
Speaker 1: to have dinner with him once, and you know, I

545
00:30:20,240 --> 00:30:22,440
Speaker 1: got to ask him this question, and I had heard

546
00:30:22,680 --> 00:30:27,480
Speaker 1: that he said once that he wouldn't have used volatility

547
00:30:27,920 --> 00:30:30,480
Speaker 1: for the capital asset pricing model. What do you semi variants?

548
00:30:30,480 --> 00:30:34,040
Speaker 1: Because you should only penalize an asset for downside volatility.

549
00:30:34,400 --> 00:30:37,720
Speaker 1: We all want upside volatilly, that's what we crave. In fact,

550
00:30:38,000 --> 00:30:40,680
Speaker 1: we should want as much upside volatility as we can

551
00:30:40,720 --> 00:30:43,720
Speaker 1: possibly get, of course, and I said, would you is

552
00:30:43,800 --> 00:30:45,880
Speaker 1: it true that you said I would use semi variants?

553
00:30:46,120 --> 00:30:48,360
Speaker 1: But the math was too hard, and he said, well,

554
00:30:48,400 --> 00:30:50,040
Speaker 1: of course, and I wouldn't have won the Nobel price.

555
00:30:50,120 --> 00:30:52,880
Speaker 1: I really want to win the Nobel prize. So when

556
00:30:52,920 --> 00:30:56,920
Speaker 1: you penalize an asset for upside volatility, that's a perversion

557
00:30:57,000 --> 00:30:59,600
Speaker 1: of the whole idea of assets. What we want our

558
00:30:59,640 --> 00:31:03,320
Speaker 1: asset that have asymmetric upside, and we're willing to accept

559
00:31:03,400 --> 00:31:05,880
Speaker 1: some downside risk, but we can hedge most of that

560
00:31:06,000 --> 00:31:10,760
Speaker 1: downside risk away with other assets or with position sizing.

561
00:31:11,080 --> 00:31:13,120
Speaker 1: You know, I use this example over the last five years,

562
00:31:13,600 --> 00:31:16,800
Speaker 1: so five years of reasonable time, because at that point

563
00:31:16,960 --> 00:31:20,120
Speaker 1: you could have put one percent of endowment assets into bitcoin.

564
00:31:20,400 --> 00:31:22,480
Speaker 1: So our last five years, if you had taken one

565
00:31:22,600 --> 00:31:26,080
Speaker 1: percent and put it in bitcoin, half percent from stocks,

566
00:31:26,120 --> 00:31:29,479
Speaker 1: half percent from bonds, and endowments over the last five

567
00:31:29,560 --> 00:31:32,680
Speaker 1: years made seven point two percent, that one person allocation

568
00:31:32,720 --> 00:31:34,800
Speaker 1: of bitcoin would have taken it to nine point two

569
00:31:35,360 --> 00:31:38,800
Speaker 1: Had that one percent gone to zero, you would have

570
00:31:38,840 --> 00:31:41,760
Speaker 1: only gone to nine to seven percent. So point two

571
00:31:41,800 --> 00:31:44,920
Speaker 1: percent downside two bases points of upside. That's a ten

572
00:31:45,040 --> 00:31:49,880
Speaker 1: to one asymmetry. So we should embrace that upside volatility

573
00:31:50,280 --> 00:31:53,560
Speaker 1: and be mindful of downside volatility and risk. But the

574
00:31:53,640 --> 00:31:57,560
Speaker 1: interesting thing about it is the risk of total loss

575
00:31:58,560 --> 00:32:01,160
Speaker 1: is very low at this point because of lots of

576
00:32:01,320 --> 00:32:05,680
Speaker 1: things related to Metcalfe's law and the Linda effect. The

577
00:32:05,760 --> 00:32:09,720
Speaker 1: longer something survived, the longer it's likely to survive. And

578
00:32:10,120 --> 00:32:13,640
Speaker 1: the way Satoshi San, whoever Sotoshi San is, or the

579
00:32:13,800 --> 00:32:17,400
Speaker 1: people or they or them or whatever, whoever designed it

580
00:32:17,640 --> 00:32:21,840
Speaker 1: was genius in the sense that there are these embedded

581
00:32:22,360 --> 00:32:27,160
Speaker 1: advantages for its longevity. Right, because as the price declines,

582
00:32:27,320 --> 00:32:29,400
Speaker 1: more people are gonna want to own it. As the

583
00:32:29,480 --> 00:32:33,760
Speaker 1: price declines, the difficulty adjust in the mining algorithms, and

584
00:32:34,120 --> 00:32:38,480
Speaker 1: so more people are uh are incented to mine. And

585
00:32:38,560 --> 00:32:43,080
Speaker 1: so there's this beautiful uh ying and yang about the asset.

586
00:32:43,520 --> 00:32:45,680
Speaker 1: And I would say the miracle was it went from

587
00:32:45,800 --> 00:32:49,520
Speaker 1: zero to ten dollars ten to a hundred to a thousand,

588
00:32:49,560 --> 00:32:52,080
Speaker 1: thousand to ten thousand, ten thousand a million. That's not

589
00:32:52,200 --> 00:32:55,720
Speaker 1: a miracle, that's just increased usage and increase adoption. The

590
00:32:55,800 --> 00:33:00,080
Speaker 1: miracle was that it survived getting usage at all all

591
00:33:00,160 --> 00:33:03,280
Speaker 1: and became a custom where we could exchange it for value.

592
00:33:03,600 --> 00:33:06,360
Speaker 1: And I survived that that first really bad bear, that

593
00:33:06,440 --> 00:33:08,680
Speaker 1: bear crash, that bear market, So whant to survive that

594
00:33:08,800 --> 00:33:10,600
Speaker 1: one it was like, Wow, this thing is resilient. Now

595
00:33:10,640 --> 00:33:12,880
Speaker 1: it survived a couple of them, which makes it even

596
00:33:12,920 --> 00:33:15,719
Speaker 1: more resilient. So the investors should look at it as

597
00:33:15,800 --> 00:33:18,560
Speaker 1: a total loss and not just the downside or the

598
00:33:18,560 --> 00:33:20,440
Speaker 1: temporary downside. I guess if you're looking out over a

599
00:33:20,480 --> 00:33:23,520
Speaker 1: long enough time timeframe as well, right, well, look at it.

600
00:33:23,680 --> 00:33:29,280
Speaker 1: What is it? Ninety seven percent of all days that

601
00:33:29,400 --> 00:33:31,880
Speaker 1: it's been in existence, you've made money. So if you

602
00:33:32,000 --> 00:33:35,560
Speaker 1: bought it other than like one or two percent of days,

603
00:33:35,960 --> 00:33:38,840
Speaker 1: you've made money. So yeah, if you chased it on

604
00:33:39,040 --> 00:33:42,840
Speaker 1: December eight, two thousand seventeen, you pay twenty year down.

605
00:33:43,480 --> 00:33:46,479
Speaker 1: But other than a handful of days, it's a it's

606
00:33:46,520 --> 00:33:48,640
Speaker 1: been a positive basset. And the thing that people focus

607
00:33:48,760 --> 00:33:51,600
Speaker 1: on that I think is improper is they focus on

608
00:33:51,680 --> 00:33:55,280
Speaker 1: the peak price. Price is a liar, right. The value

609
00:33:55,760 --> 00:33:59,400
Speaker 1: of any asset is the value the price is just

610
00:33:59,480 --> 00:34:03,120
Speaker 1: with two both decided to exchange some unit uh in

611
00:34:03,200 --> 00:34:06,560
Speaker 1: the current period. And so when assets get above their

612
00:34:06,600 --> 00:34:09,160
Speaker 1: fair value, they tend to fall back to fair value,

613
00:34:09,160 --> 00:34:10,560
Speaker 1: and they get blow fair value to tend to go

614
00:34:10,600 --> 00:34:13,120
Speaker 1: back up to fair value. And so when we look

615
00:34:13,160 --> 00:34:19,799
Speaker 1: at it, we look and say, mmm, well, making meaning

616
00:34:19,800 --> 00:34:22,239
Speaker 1: attractive or unattractive. But what we should really look at

617
00:34:22,360 --> 00:34:26,120
Speaker 1: as a diversifying asset is each year over the ten

618
00:34:26,280 --> 00:34:30,680
Speaker 1: years the low has been higher. That's incredible. That means fundamentally,

619
00:34:30,760 --> 00:34:32,560
Speaker 1: more people are using it, more people are holding it,

620
00:34:32,719 --> 00:34:36,000
Speaker 1: more people are looking for additional use cases. And if

621
00:34:36,160 --> 00:34:40,520
Speaker 1: that trend continues and every year we get higher lows,

622
00:34:41,120 --> 00:34:45,000
Speaker 1: that's very positive for the future. Yeah. Yeah, and uh,

623
00:34:45,080 --> 00:34:47,040
Speaker 1: I mean, like you said, the price is a liar.

624
00:34:47,160 --> 00:34:49,839
Speaker 1: Really we have valuations which is difficult to price because

625
00:34:49,920 --> 00:34:52,799
Speaker 1: we don't really know exactly what it is. I've been

626
00:34:53,000 --> 00:34:55,560
Speaker 1: I've been having fun watching these macro guys like Raoul

627
00:34:55,680 --> 00:34:58,760
Speaker 1: Paul uh and Dan Tapirero is starting to talk about

628
00:34:58,800 --> 00:35:01,359
Speaker 1: this and um, they have a different perspective that makes

629
00:35:01,400 --> 00:35:03,359
Speaker 1: it seems so much bigger than it is. And there

630
00:35:03,440 --> 00:35:05,800
Speaker 1: was another article that I saw you talk about that

631
00:35:05,960 --> 00:35:09,200
Speaker 1: was like, uh, something about he was talking about the

632
00:35:09,239 --> 00:35:12,319
Speaker 1: volatility um something and then nothing at all or whatever,

633
00:35:12,400 --> 00:35:16,520
Speaker 1: and he just said, Hey, we have this global transfer

634
00:35:16,960 --> 00:35:20,799
Speaker 1: system of transferring value peer to peer, Like, what's that worth?

635
00:35:21,160 --> 00:35:22,960
Speaker 1: Is that worth two billion? I guess we're a lot

636
00:35:23,000 --> 00:35:24,839
Speaker 1: more than two billions. We're a lot more than two

637
00:35:25,560 --> 00:35:31,799
Speaker 1: and look what people aren't capable of of understanding yet.

638
00:35:31,920 --> 00:35:34,800
Speaker 1: And it's not a criticism of anybody, it's it's just

639
00:35:35,320 --> 00:35:39,560
Speaker 1: this is how big technological evolutions happen. Right when the

640
00:35:39,719 --> 00:35:44,319
Speaker 1: Internet was founded, there were very very few people, right

641
00:35:44,480 --> 00:35:49,239
Speaker 1: myself included, who saw the incredible upside potential. Now, we

642
00:35:49,400 --> 00:35:51,480
Speaker 1: made some good investments, you know, we invested in Google

643
00:35:51,520 --> 00:35:53,479
Speaker 1: and we made you know, two hundred times our money,

644
00:35:53,719 --> 00:35:57,440
Speaker 1: and we invested in Sycamore and and Sienna and a

645
00:35:57,480 --> 00:35:59,600
Speaker 1: whole bunch of other things. We made a bunch of money,

646
00:35:59,680 --> 00:36:02,320
Speaker 1: but I didn't buy you know, Amazon on the I

647
00:36:02,440 --> 00:36:04,200
Speaker 1: p O and hold it to today, and you know,

648
00:36:04,200 --> 00:36:08,120
Speaker 1: I wouldn't even have to work so because it was

649
00:36:08,280 --> 00:36:12,880
Speaker 1: hard to see the upside potential because when when Netflix

650
00:36:13,000 --> 00:36:15,880
Speaker 1: came out, it was a crappy little company. Those discs

651
00:36:16,040 --> 00:36:18,920
Speaker 1: got broken, they got lost, they were hard. And then

652
00:36:18,960 --> 00:36:21,440
Speaker 1: it was gonna be video on demand. Well you couldn't

653
00:36:21,440 --> 00:36:24,920
Speaker 1: do video on demand motives, and so that business was

654
00:36:24,920 --> 00:36:26,920
Speaker 1: gonna die. And then Blockbuster was going to put him

655
00:36:26,920 --> 00:36:29,880
Speaker 1: out of business. And and then suddenly what happened, Well,

656
00:36:30,000 --> 00:36:33,640
Speaker 1: South Korea gave us broadband. Now, when broadband came like

657
00:36:33,680 --> 00:36:36,480
Speaker 1: whoa whoa, Now we can do streaming. We don't call

658
00:36:36,600 --> 00:36:39,680
Speaker 1: video on demanding, We're called streaming. And what people weren't

659
00:36:39,760 --> 00:36:43,640
Speaker 1: capable of understanding is just how many people would cut

660
00:36:43,760 --> 00:36:47,080
Speaker 1: the cord and transfer to streaming instead of cable. And

661
00:36:48,160 --> 00:36:50,080
Speaker 1: the same thing is true with the mobile net. Right

662
00:36:50,320 --> 00:36:53,280
Speaker 1: when I remember two thousand ten being in Craig McCaw's

663
00:36:53,320 --> 00:36:56,840
Speaker 1: house up in Seattle for a party, and you know,

664
00:36:56,960 --> 00:37:00,239
Speaker 1: talking to the head of his family off was Reginal

665
00:37:00,320 --> 00:37:03,480
Speaker 1: investors in in mobile telephony, And I asked this guy, so,

666
00:37:03,600 --> 00:37:05,680
Speaker 1: what you know, do you think the mobile net will

667
00:37:05,719 --> 00:37:07,480
Speaker 1: be as big as the Internet? He's like, Mark, you

668
00:37:07,640 --> 00:37:10,239
Speaker 1: kidding me? Yes, people fifteen years ago if they want

669
00:37:10,280 --> 00:37:12,120
Speaker 1: a computer, like what do I want a computer in

670
00:37:12,239 --> 00:37:14,400
Speaker 1: my house for? Yes, people today if they want a

671
00:37:14,440 --> 00:37:17,000
Speaker 1: cell phone, like, well, already got to probably don't need

672
00:37:17,040 --> 00:37:21,040
Speaker 1: another one, butter and do more to be awesome. And

673
00:37:21,120 --> 00:37:23,319
Speaker 1: then ten years ago the iPhone, or eleven years ago

674
00:37:23,360 --> 00:37:26,279
Speaker 1: the iPhone comes out, and suddenly our world has changed.

675
00:37:26,320 --> 00:37:29,000
Speaker 1: And now we all got sore thumbs and crooked nits

676
00:37:29,080 --> 00:37:30,880
Speaker 1: and these bolts on the back of our head from

677
00:37:30,960 --> 00:37:35,000
Speaker 1: leaning over too much. But you know, we can't comphend

678
00:37:36,320 --> 00:37:39,960
Speaker 1: the change. That's gonna occur. And when you take money

679
00:37:40,360 --> 00:37:43,320
Speaker 1: and value and all the assets in the world and

680
00:37:43,440 --> 00:37:47,440
Speaker 1: you think about what will be done to them, the

681
00:37:47,560 --> 00:37:50,880
Speaker 1: same thing that the Internet did too, or what email

682
00:37:51,000 --> 00:37:53,759
Speaker 1: did to information, or what the internet did to commerce.

683
00:37:54,440 --> 00:37:57,000
Speaker 1: It's it's really incomprehensible. And I think that's why people

684
00:37:57,200 --> 00:38:00,920
Speaker 1: struggle with getting exposure and make an investment because they

685
00:38:01,000 --> 00:38:04,640
Speaker 1: can't see the future because the future has been tomorrow.

686
00:38:04,640 --> 00:38:07,560
Speaker 1: It's gonna happen over a decade or fifteen or twenty years.

687
00:38:07,680 --> 00:38:11,440
Speaker 1: But think about this. Forget digital gold, right, that's a

688
00:38:11,520 --> 00:38:14,759
Speaker 1: seven seven a half trillion dollar market. What about money

689
00:38:14,840 --> 00:38:18,600
Speaker 1: marketing accounts? What about just instead of having a bank

690
00:38:18,719 --> 00:38:21,200
Speaker 1: money where the bank could take assets like they did

691
00:38:21,239 --> 00:38:24,520
Speaker 1: in Cyprus, what if I had an unseizable asset like

692
00:38:24,600 --> 00:38:26,720
Speaker 1: bitcoin and I could have that being my money market.

693
00:38:27,000 --> 00:38:30,520
Speaker 1: Oh that's pretty interesting. That's why the government and Libra

694
00:38:30,640 --> 00:38:34,800
Speaker 1: is not even a cryptocurrency, right, it's a centralized corporate

695
00:38:34,920 --> 00:38:38,839
Speaker 1: digital asset. But it's still could be the largest money

696
00:38:38,920 --> 00:38:42,480
Speaker 1: market in the world by a factor of ten if

697
00:38:42,520 --> 00:38:45,799
Speaker 1: they instantly distributed it to all their their clients. So yeah,

698
00:38:46,040 --> 00:38:49,240
Speaker 1: governments don't like that. Drains asked in the banking system.

699
00:38:49,280 --> 00:38:53,760
Speaker 1: Think about this. Ali Baba created a money market account

700
00:38:54,040 --> 00:38:57,560
Speaker 1: back five ago, maybe seven years ago, and in nine

701
00:38:57,680 --> 00:39:01,960
Speaker 1: months there'd eighty bi billion dollars, became the third largest

702
00:39:02,000 --> 00:39:05,200
Speaker 1: money market in the in the world in nine months.

703
00:39:05,320 --> 00:39:08,359
Speaker 1: Took forty years for Van Garden Fidelity to get up

704
00:39:08,360 --> 00:39:11,279
Speaker 1: to a hundred billion dollars, And the p BOC said,

705
00:39:11,280 --> 00:39:13,640
Speaker 1: whoa time out, we're changing the banking laws. You can't

706
00:39:13,680 --> 00:39:17,160
Speaker 1: do this because you're siphoning assets out of our banking system. Today,

707
00:39:17,280 --> 00:39:20,880
Speaker 1: that account without any new app for two hundred billion

708
00:39:20,960 --> 00:39:24,120
Speaker 1: dollars by far the largest money market in the world.

709
00:39:24,680 --> 00:39:28,800
Speaker 1: And that's what can happen with new technology. And so

710
00:39:28,920 --> 00:39:31,560
Speaker 1: then we go from there too, Well, what about currencies.

711
00:39:31,800 --> 00:39:34,359
Speaker 1: Do we really need all the different currencies around the world.

712
00:39:34,440 --> 00:39:38,920
Speaker 1: What about a borderless currency It's possible, that's eighty six

713
00:39:39,000 --> 00:39:41,960
Speaker 1: trillion dollar market. Well what about real estate that's three

714
00:39:42,080 --> 00:39:46,839
Speaker 1: times as big. How about that two billion dollars I'm sorry,

715
00:39:47,440 --> 00:39:53,560
Speaker 1: trillion dollars, six trillion, a billion um on. So so

716
00:39:53,680 --> 00:39:56,600
Speaker 1: then then you go to total private businesses and total

717
00:39:56,880 --> 00:40:02,240
Speaker 1: total assets. We're talking seven hundred billion dollars of assets

718
00:40:02,320 --> 00:40:06,400
Speaker 1: that will be digitized. That will be traded free. Seven

719
00:40:06,719 --> 00:40:09,319
Speaker 1: they will be owned in a fractional basis. I mean

720
00:40:09,520 --> 00:40:13,719
Speaker 1: the few is so big it's almost too big to comprehend.

721
00:40:13,760 --> 00:40:17,480
Speaker 1: And that's why people just don't do anything. Yeah, boy,

722
00:40:17,520 --> 00:40:20,320
Speaker 1: it is too big to comprehend. The big risk that

723
00:40:20,400 --> 00:40:23,160
Speaker 1: we have those, as you said, these disruptive technologies. Companies

724
00:40:23,200 --> 00:40:26,080
Speaker 1: don't like that. Blockbuster obviously didn't like getting taken out

725
00:40:26,120 --> 00:40:29,440
Speaker 1: by Netflix. But now we have sovereigns Now we have government,

726
00:40:29,520 --> 00:40:32,520
Speaker 1: So the p BOC says, hey, no, Ali baba, you

727
00:40:32,600 --> 00:40:35,600
Speaker 1: can't do that. So now we don't really have this

728
00:40:35,760 --> 00:40:37,520
Speaker 1: free market anymore. A nowly of a sudden, we have

729
00:40:37,640 --> 00:40:40,839
Speaker 1: like governments that maybe we'll shut it down. I think

730
00:40:40,880 --> 00:40:43,320
Speaker 1: that adds an element of risk in addition to just

731
00:40:43,520 --> 00:40:47,480
Speaker 1: like new technology risk. I mean, we have government regulation risk. Now.

732
00:40:48,600 --> 00:40:52,080
Speaker 1: It's a really really important point. And uh and that's

733
00:40:52,120 --> 00:40:54,600
Speaker 1: not new in the sense that you know, the government

734
00:40:54,640 --> 00:40:57,720
Speaker 1: tried to regulate the Internet, and you know they tried

735
00:40:57,800 --> 00:41:02,040
Speaker 1: to regulate cell phones and you know, look, we got all.

736
00:41:02,640 --> 00:41:08,399
Speaker 1: All of these things occur when interested parties feel their

737
00:41:08,480 --> 00:41:12,040
Speaker 1: dominance slipping right. Financial service institutions don't like the idea

738
00:41:12,120 --> 00:41:15,600
Speaker 1: that you and I can exchange value today directly, and

739
00:41:15,680 --> 00:41:17,680
Speaker 1: we don't need a bank. You don't need a bank account.

740
00:41:17,719 --> 00:41:21,360
Speaker 1: I don't need an account. I get in transfer value instantaneously,

741
00:41:21,719 --> 00:41:24,560
Speaker 1: and let's do that across borders. Well, that's the problem

742
00:41:24,680 --> 00:41:27,880
Speaker 1: is today Western Union charges twelve if I want to

743
00:41:27,880 --> 00:41:29,480
Speaker 1: send money to my mother in law and Brazil, I

744
00:41:29,520 --> 00:41:31,680
Speaker 1: don't have the mother in lawn present I did, and

745
00:41:31,719 --> 00:41:33,520
Speaker 1: I want to send her money. It costs me twelve.

746
00:41:34,520 --> 00:41:36,839
Speaker 1: But my mother in law's in Tulsa, Oklahoma, doesn't cost

747
00:41:36,880 --> 00:41:39,520
Speaker 1: money to send money there. But the key is that

748
00:41:39,600 --> 00:41:42,279
Speaker 1: if I cont across borders, you know, the Rothchild's like

749
00:41:42,480 --> 00:41:46,000
Speaker 1: the fact that their two banks get paid and they

750
00:41:46,000 --> 00:41:50,360
Speaker 1: don't want that to go away. So over time, disruptive

751
00:41:50,560 --> 00:41:55,160
Speaker 1: innovation is going to dominate and and there's no putting

752
00:41:55,200 --> 00:41:57,920
Speaker 1: the genie back in the bottle here. We're going to

753
00:41:58,120 --> 00:42:01,320
Speaker 1: see increasing and increase you stage, We're gonna see different

754
00:42:01,400 --> 00:42:04,640
Speaker 1: use cases. We're going to see government push back, we're

755
00:42:04,640 --> 00:42:07,279
Speaker 1: going to see regulatory But the key is in a

756
00:42:07,440 --> 00:42:11,160
Speaker 1: borderless world, in a decentralized world, or de central land,

757
00:42:11,239 --> 00:42:13,959
Speaker 1: which one of the terms I like in de central land,

758
00:42:14,560 --> 00:42:18,440
Speaker 1: if the US makes it really hard to open businesses

759
00:42:18,600 --> 00:42:21,560
Speaker 1: around this new technology. What will happen. They'll open up

760
00:42:21,600 --> 00:42:24,360
Speaker 1: in Russia, They'll open up in China, open up in Argentina,

761
00:42:24,680 --> 00:42:28,600
Speaker 1: they'll open up in the Bahamas or Cayman, and the

762
00:42:29,520 --> 00:42:34,839
Speaker 1: will have question is going to happen? And then, well,

763
00:42:34,960 --> 00:42:37,680
Speaker 1: can people then make it criminal to own the asset?

764
00:42:37,960 --> 00:42:41,360
Speaker 1: People forget it was against the law to own gold

765
00:42:41,400 --> 00:42:45,080
Speaker 1: from nineteen thirty three to ninetevent literally against the law

766
00:42:45,239 --> 00:42:47,600
Speaker 1: in the United States to own. Plenty of people on gold,

767
00:42:48,080 --> 00:42:51,160
Speaker 1: so it's got to be enforced, it's got to be monitored.

768
00:42:51,440 --> 00:42:56,000
Speaker 1: So all these things become tougher in a decentralized world

769
00:42:56,760 --> 00:42:59,600
Speaker 1: where you know, you literally can store your bitcoin in

770
00:42:59,640 --> 00:43:01,279
Speaker 1: your head. It right, You don't have to have it

771
00:43:01,280 --> 00:43:02,680
Speaker 1: on your computer and have it on your phone. You

772
00:43:02,719 --> 00:43:04,520
Speaker 1: can have your seed phrase in your head and and

773
00:43:04,880 --> 00:43:10,800
Speaker 1: just be happy. Now, will they start carrying gating you? Absolutely,

774
00:43:11,320 --> 00:43:13,600
Speaker 1: But people will figure out a way around that. I

775
00:43:13,680 --> 00:43:16,160
Speaker 1: heard one guy say, well, I just wipe my computer

776
00:43:16,800 --> 00:43:22,040
Speaker 1: before I go through plank computer. You're more suspect than

777
00:43:22,080 --> 00:43:25,040
Speaker 1: the guy who has, you know, a coin based account

778
00:43:25,080 --> 00:43:29,359
Speaker 1: on his computer. So we'll all figure it out. Yeah, yeah,

779
00:43:29,840 --> 00:43:32,800
Speaker 1: all right, Well, um, such such good information that I

780
00:43:32,880 --> 00:43:34,560
Speaker 1: really appreciate taking the time well ahead and try and

781
00:43:34,600 --> 00:43:38,319
Speaker 1: wrap this up. I'm just curious. Um. Now we've talked about, uh,

782
00:43:38,560 --> 00:43:42,000
Speaker 1: this global stage that's setting up to to um create

783
00:43:42,080 --> 00:43:45,120
Speaker 1: this perfect storm to push this uh lots of risk

784
00:43:45,239 --> 00:43:49,080
Speaker 1: in the world where uh, you know, all these accounts

785
00:43:49,120 --> 00:43:52,000
Speaker 1: are overvalued and potentially you know, Marcus could come crashing

786
00:43:52,040 --> 00:43:53,759
Speaker 1: down at any point. But at the same time we

787
00:43:53,840 --> 00:43:56,799
Speaker 1: have this new asset class. How how do people uh

788
00:43:56,960 --> 00:43:58,799
Speaker 1: look at this? I mean, where where are the safe

789
00:43:58,840 --> 00:44:02,680
Speaker 1: places for people to go by bitcoin and buy gold? Keep? Okay,

790
00:44:03,040 --> 00:44:05,800
Speaker 1: I love it. It's the it's the ultimate softball question

791
00:44:05,880 --> 00:44:08,760
Speaker 1: for my favorite hashtag, which is hashtag get off zero.

792
00:44:09,719 --> 00:44:12,160
Speaker 1: Ten years from now, we're gonna look back and it

793
00:44:12,200 --> 00:44:20,160
Speaker 1: will be fiduciarily irresponsible for anyone individual institution, For investor

794
00:44:20,480 --> 00:44:23,880
Speaker 1: to have zero exposure to crypto assets and particularly bitcoin

795
00:44:24,040 --> 00:44:27,120
Speaker 1: will be irresponsible. And why is that? It's because when

796
00:44:27,160 --> 00:44:28,600
Speaker 1: you look around in the world is did you just

797
00:44:28,760 --> 00:44:32,920
Speaker 1: summarize perfectly, Uh, just about every asset class is in

798
00:44:33,000 --> 00:44:36,160
Speaker 1: a bubble. Real estates in a bubble. Stocks are in

799
00:44:36,200 --> 00:44:39,680
Speaker 1: a bubble. Government bonds are in the greatest bubble in

800
00:44:39,800 --> 00:44:42,200
Speaker 1: the history of bubbles. I mean the fact that the

801
00:44:42,360 --> 00:44:47,040
Speaker 1: Greek tenure trades below treasuries absolute insanity. The fact that

802
00:44:47,160 --> 00:44:52,160
Speaker 1: Italian interest rates or single digits insanity. So with a

803
00:44:52,280 --> 00:44:55,759
Speaker 1: buyer of last resort is a government entity that can

804
00:44:55,880 --> 00:44:58,480
Speaker 1: print money at a whim to buy assets, and they

805
00:44:59,360 --> 00:45:03,200
Speaker 1: economic reasons to own. Yeah, we get bubbles. And it

806
00:45:03,400 --> 00:45:09,840
Speaker 1: is irresponsible to own debt of corporations that wildly over levered.

807
00:45:09,880 --> 00:45:14,120
Speaker 1: It's irresponsible to own equity of companies like Tesla where

808
00:45:14,239 --> 00:45:16,880
Speaker 1: they don't have enough money to pay back their debt holders,

809
00:45:16,960 --> 00:45:20,040
Speaker 1: let alone the equity holders. So I think what's gonna

810
00:45:20,080 --> 00:45:22,600
Speaker 1: happen over time is people are gonna wake up. They're

811
00:45:22,600 --> 00:45:25,799
Speaker 1: gonna say, oh, there are these diversifying assets, and they're

812
00:45:25,840 --> 00:45:28,680
Speaker 1: gonna start with one per cent, then two, then five,

813
00:45:28,800 --> 00:45:31,600
Speaker 1: then eight and ten, then fifteen, then twenty. And the

814
00:45:31,719 --> 00:45:34,440
Speaker 1: younger you are, the more you should have because you've

815
00:45:34,480 --> 00:45:38,560
Speaker 1: got this wonderful thing like a pseudo fixed income instrument,

816
00:45:38,600 --> 00:45:41,279
Speaker 1: which is your future earnings potential. Right, a young person

817
00:45:41,320 --> 00:45:44,839
Speaker 1: should have zero bonds, none, Right, Their bond is their

818
00:45:44,920 --> 00:45:48,480
Speaker 1: future earnings from jobs they're gonna have in in over

819
00:45:48,520 --> 00:45:51,520
Speaker 1: the years. And so you should have as much private

820
00:45:51,600 --> 00:45:55,319
Speaker 1: investments take advantage aliquidity. Premium should have as much Diversifying

821
00:45:55,360 --> 00:45:59,520
Speaker 1: assets are asymmetric assets like bitcoin in your portfolio when

822
00:45:59,600 --> 00:46:02,680
Speaker 1: you're young, because you've got more time to make up

823
00:46:02,719 --> 00:46:05,880
Speaker 1: for your mistakes. And so you know, Michael Steinhard had

824
00:46:05,880 --> 00:46:08,920
Speaker 1: a great lines, and make all your mistakes when you're young, Okay.

825
00:46:09,400 --> 00:46:11,920
Speaker 1: And that's how we should think about investing, is we

826
00:46:12,000 --> 00:46:16,040
Speaker 1: should be pushing. And so I went on vacation last

827
00:46:16,080 --> 00:46:18,440
Speaker 1: week and I sent out a post a picture on

828
00:46:18,520 --> 00:46:22,560
Speaker 1: Twitter of me water skiing and someone said, uh, falls

829
00:46:22,719 --> 00:46:25,120
Speaker 1: question mark, And I said, if you're not falling, you're

830
00:46:25,160 --> 00:46:28,640
Speaker 1: not skiing. So if you're not falling down occasionally, if

831
00:46:28,640 --> 00:46:30,759
Speaker 1: you're not having a loss occasionally, if you're not having

832
00:46:30,760 --> 00:46:33,560
Speaker 1: a setback occasionally investing, that you're not investing. You're not

833
00:46:33,680 --> 00:46:36,960
Speaker 1: taking enough risk. And one of the things that people

834
00:46:37,000 --> 00:46:39,359
Speaker 1: don't like to be wrong, so they don't put their

835
00:46:39,480 --> 00:46:42,920
Speaker 1: their opinion out there. They don't put positions on where

836
00:46:42,960 --> 00:46:45,520
Speaker 1: they could be wrong or lose money. Well, the whole

837
00:46:45,640 --> 00:46:49,960
Speaker 1: purpose of this business is sometimes being wrong, because you're

838
00:46:50,040 --> 00:46:53,120
Speaker 1: only gonna be right mathematically about half the time. And

839
00:46:53,200 --> 00:46:55,440
Speaker 1: it's not whether you're right or wrong, it's how much

840
00:46:55,480 --> 00:46:56,960
Speaker 1: money you make when you're right, now much money you

841
00:46:57,000 --> 00:46:59,120
Speaker 1: lose when you're wrong. And Sorrow says it best. I'm

842
00:46:59,160 --> 00:47:03,200
Speaker 1: only rich because I admit my mistakes faster than other people,

843
00:47:04,000 --> 00:47:08,640
Speaker 1: and I cut my losses. And so good investors, great investors,

844
00:47:09,000 --> 00:47:13,360
Speaker 1: are wrong way more than bad investors, because bad investors

845
00:47:13,680 --> 00:47:16,799
Speaker 1: are paralyzed by fear of being wrong, and so they

846
00:47:16,840 --> 00:47:19,440
Speaker 1: sit in cash or bonds and don't do anything. And

847
00:47:19,560 --> 00:47:24,160
Speaker 1: great investors make investments, take views, make you know, wild

848
00:47:24,200 --> 00:47:26,759
Speaker 1: assertions like I do all the time, saying, Hey, I

849
00:47:26,800 --> 00:47:29,799
Speaker 1: actually think there's gonna be a value here. I think

850
00:47:29,880 --> 00:47:31,719
Speaker 1: this asset is going to take off. He said, well,

851
00:47:31,760 --> 00:47:34,080
Speaker 1: what if you're wrong. I'm wrong all the time. So

852
00:47:34,520 --> 00:47:37,000
Speaker 1: I make a mistake, I change it, fix it, go

853
00:47:37,080 --> 00:47:40,319
Speaker 1: on to the next idea. So the key to all

854
00:47:40,440 --> 00:47:44,880
Speaker 1: of this is adopt a portion of your assets in

855
00:47:44,960 --> 00:47:49,920
Speaker 1: these diversifying assets, particularly crypto assets, reduce your exposure to

856
00:47:50,000 --> 00:47:54,120
Speaker 1: the overvalued assets around the world, and prepare for an

857
00:47:54,280 --> 00:47:57,360
Speaker 1: environment at which stuff is gonna go on sale. So

858
00:47:57,520 --> 00:47:59,799
Speaker 1: there's a reason the very best investors in the world

859
00:47:59,840 --> 00:48:02,520
Speaker 1: to day have the highest cash positions they've ever had.

860
00:48:02,800 --> 00:48:06,800
Speaker 1: Like one of my mentors Julian Robertson, guys always invested.

861
00:48:07,200 --> 00:48:10,560
Speaker 1: He's basically fully in cash. He's got a lot of longs,

862
00:48:10,600 --> 00:48:13,760
Speaker 1: a lot of shorts, but net he's basically neutral because

863
00:48:13,800 --> 00:48:17,880
Speaker 1: he knows that assets are overvalued. He's shortly overvalued assets.

864
00:48:18,200 --> 00:48:19,839
Speaker 1: He's long with a few things that he thinks are

865
00:48:20,080 --> 00:48:22,520
Speaker 1: are undervalued, and he's waiting with a lot of cash

866
00:48:22,960 --> 00:48:26,600
Speaker 1: to buy the assets when they get cheap. Just timing

867
00:48:26,640 --> 00:48:28,880
Speaker 1: it is the problem, all right, A Japan's kept it

868
00:48:28,920 --> 00:48:31,239
Speaker 1: going for twenty thirty years? How long can this game

869
00:48:31,320 --> 00:48:35,520
Speaker 1: go on? Right? Absolutely? And the markets can behavior rationally

870
00:48:35,560 --> 00:48:38,919
Speaker 1: longer than the rational investor can remain solve it only though,

871
00:48:39,040 --> 00:48:42,279
Speaker 1: that only applies if you lever If you don't lever up.

872
00:48:43,360 --> 00:48:45,960
Speaker 1: Cash is like valium. It keeps you calm and it

873
00:48:46,160 --> 00:48:48,880
Speaker 1: lets you wait out. But if you put a lot

874
00:48:48,960 --> 00:48:51,600
Speaker 1: of leverage on your assets, yeah you're gonna get stopped

875
00:48:51,600 --> 00:48:54,440
Speaker 1: out at precisely the wrong time. Leverage can never make

876
00:48:54,480 --> 00:48:56,640
Speaker 1: a bad investment good, but it can make a good

877
00:48:56,680 --> 00:48:59,919
Speaker 1: investment bad. And so today you want to have max

878
00:49:00,000 --> 00:49:05,480
Speaker 1: some flexibility, You want to have a focus on constantly rebalancing,

879
00:49:05,920 --> 00:49:09,200
Speaker 1: and yeah, could this game go on longer than I

880
00:49:09,280 --> 00:49:12,239
Speaker 1: think it can. Of course, well, central banks do everything

881
00:49:12,400 --> 00:49:15,160
Speaker 1: they can to keep it going. Of course, Well the

882
00:49:15,239 --> 00:49:19,640
Speaker 1: elites do everything they can, including passing stupid laws. Of course.

883
00:49:20,000 --> 00:49:23,680
Speaker 1: But at the end, I believe gravity rules right, Newton

884
00:49:23,840 --> 00:49:26,840
Speaker 1: was right, and assets returned to their fair value and

885
00:49:26,880 --> 00:49:30,040
Speaker 1: even go below. And if you wait long enough, um,

886
00:49:30,360 --> 00:49:33,400
Speaker 1: you get to buy him it with a margin of safety,

887
00:49:33,400 --> 00:49:35,960
Speaker 1: which is the key to life. Yeah, awesome, So that's

888
00:49:36,000 --> 00:49:39,480
Speaker 1: good stuff. You're definitely a wealth of knowledge. I appreciate

889
00:49:39,520 --> 00:49:43,399
Speaker 1: you sharing that with me in the audience conversation. Um,

890
00:49:44,160 --> 00:49:46,319
Speaker 1: so anybody listening told definitely be following you on Twitter

891
00:49:46,360 --> 00:49:47,960
Speaker 1: because you put out a lot of good information, a

892
00:49:48,000 --> 00:49:49,600
Speaker 1: lot of retweets. I don't know how you get any

893
00:49:49,680 --> 00:49:53,000
Speaker 1: work done. My wife asked me the same thing. She

894
00:49:53,520 --> 00:49:56,720
Speaker 1: she thinks I'm a Twitter holic. But Twitter is awesome

895
00:49:56,880 --> 00:50:00,719
Speaker 1: because one, it's an engaged community, and I've made some

896
00:50:00,880 --> 00:50:04,279
Speaker 1: incredible relationships around the world, been introduced to some some

897
00:50:04,440 --> 00:50:07,400
Speaker 1: really cool opportunities. Uh. The second thing I love is

898
00:50:07,440 --> 00:50:10,319
Speaker 1: I get instant feedback, right, And when I put out

899
00:50:10,360 --> 00:50:12,279
Speaker 1: an idea and everybody hates on it, and like, oh,

900
00:50:12,360 --> 00:50:14,200
Speaker 1: that's a pretty good idea. If I put it out

901
00:50:14,200 --> 00:50:16,120
Speaker 1: an idea and everybody loves it. I'm like, oh, maybe

902
00:50:16,200 --> 00:50:20,600
Speaker 1: that's already in the price, So great instant feedback. Um.

903
00:50:21,000 --> 00:50:23,279
Speaker 1: But the thing I really like about it is it's

904
00:50:23,400 --> 00:50:26,640
Speaker 1: it's a way to to build and grow a community

905
00:50:27,320 --> 00:50:30,239
Speaker 1: of like minded people in different areas, whether it be

906
00:50:30,280 --> 00:50:34,359
Speaker 1: crypto or finance or China. Um. So we didn't even

907
00:50:34,360 --> 00:50:36,120
Speaker 1: get talking about China. May will do that next time,

908
00:50:36,200 --> 00:50:39,279
Speaker 1: But there's so much going on in the world today. Uh.

909
00:50:39,400 --> 00:50:42,600
Speaker 1: And one thing I really like about about twitters it's instantaneous.

910
00:50:42,640 --> 00:50:46,000
Speaker 1: I don't have to wait for a producer to review

911
00:50:46,120 --> 00:50:49,759
Speaker 1: a journalist article and eight hours later I get, you know,

912
00:50:49,880 --> 00:50:52,440
Speaker 1: somebody's view of what happened. I can watch a periscope

913
00:50:52,560 --> 00:50:56,200
Speaker 1: live of people standing in the polling place in Argentina

914
00:50:56,520 --> 00:50:58,600
Speaker 1: and get a sense that mockery is gonna win and

915
00:50:58,719 --> 00:51:01,800
Speaker 1: good things are gonna happen. So very cool stuff. Is

916
00:51:01,840 --> 00:51:04,640
Speaker 1: there anywhere else that anyone should follow you to you write?

917
00:51:04,719 --> 00:51:06,759
Speaker 1: You write like blogs or do you have anything else?

918
00:51:06,800 --> 00:51:09,680
Speaker 1: And just follow you on Twitter? Our our website is

919
00:51:09,800 --> 00:51:14,000
Speaker 1: Morgan Creek cap c ap dot com and we've got

920
00:51:14,040 --> 00:51:16,880
Speaker 1: a lot of quarterly letters that I've written over the years. Uh,

921
00:51:17,160 --> 00:51:20,640
Speaker 1: a number of them on on bitcoin and crypto of

922
00:51:20,719 --> 00:51:23,040
Speaker 1: the last of the last couple of years, kind of

923
00:51:23,120 --> 00:51:25,560
Speaker 1: on the origins. And then we've also got a YouTube

924
00:51:25,640 --> 00:51:28,719
Speaker 1: channel called Around the World with us Go, and I've

925
00:51:28,760 --> 00:51:31,399
Speaker 1: got a lot of presentations about forty five minutes each

926
00:51:31,520 --> 00:51:35,200
Speaker 1: with audio that we do on this on a monthly basis.

927
00:51:35,320 --> 00:51:37,480
Speaker 1: We post those, and I've got a number on on

928
00:51:37,600 --> 00:51:41,440
Speaker 1: crypto and China and energy and stocks and you name

929
00:51:41,480 --> 00:51:44,520
Speaker 1: a topic, it's out there. Cool all right, Well, thanks

930
00:51:44,560 --> 00:51:46,240
Speaker 1: so much for taking the time to share the information

931
00:51:46,280 --> 00:51:49,200
Speaker 1: with you. Appreciate it, all right, Thanks, take care. Hey,

932
00:51:49,320 --> 00:51:52,200
Speaker 1: if you like this episode of the Market Disruptors Podcast,

933
00:51:52,400 --> 00:51:54,759
Speaker 1: please help us take this to the top of the

934
00:51:54,840 --> 00:51:57,680
Speaker 1: podcast charts. Just please do me a favor and rate,

935
00:51:57,800 --> 00:52:01,080
Speaker 1: review and subscribe. Taking fish teen seconds to just leave

936
00:52:01,080 --> 00:52:03,440
Speaker 1: a quick review goes a long way in helping us

937
00:52:03,480 --> 00:52:06,760
Speaker 1: reach more people and disrupt more markets. I really appreciate

938
00:52:06,800 --> 00:52:08,800
Speaker 1: you listening and I'll see you next time on the

939
00:52:08,880 --> 00:52:10,080
Speaker 1: Market Instructors Podcast.