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if you would give me a 2025 investing
primer I want to know for the person who
just wants like a set and forget
investing strategy where should they be
putting their money right now well each
person is different right some people
have different uh risk profiles other
people have different knowledge sets uh
but I think that a lot of the Timeless
investing principles are really
important so you should basically create
a system that you can automate uh and it
pays to pay yourself first so what most
people do is they get paid they take the
money they spend it in all their
expenses and they hope there's a little
bit of money left over but a great way
to ensure that you're able to invest is
to actually take out of your paycheck
your investment money first and then
spend what is left over so that's kind
of the first thing is you got to get
money to be able to invest then what do
you do with that investment money and
really I think for the the average
person what you want to be able to do is
you want to dollar cost average every
time you get a paycheck you want to take
some portion of it you want to put it
into the S&P 500 NASDAQ and then I like
Bitcoin as well and the reason why those
three assets is because they likely have
uh very long-term resilience uh they
have a return profile that is uh pretty
good and also they're very simple to
understand you kind of know what you're
buying um I think where people tend to
get in trouble is if you are a amateur
but you are trying to make professional
moves and so I say just like the person
who goes and plays pickup basketball on
the Saturday wouldn't try to go play in
the NBA uh I don't think that the person
who says hey I'm going to spend 30
minutes a month on the investing World
should try to go and pick individual
stocks or use Leverage or short things
or or anything like that and so
understand kind of what your knowledge
set is understand what your uh kind of
competitive Advantage would be and for
the average person it's actually
discipline just simply continue to
dollar cost average into very simple uh
kind of plan and then let time and the
market do its thing and usually turns
out pretty well for those people all
right when I look at the market now it
feels like something is changing it
could be that I just only have one
lifetime I've only been paying attention
for so long but it feels like things are
really collapsing down to very few
assets so when I look at the S&P 500
that to me is synonymous with the S&P 7
AKA The Magnificent 7 that that's
driving the bulk of the returns that if
you really just look and I think I've
heard you say this before if you were
even just to focus on AI and Bitcoin you
would have mopped up most of the recent
gains is it atypical for things to
collapse down to so few assets or uh is
this really just a different moment yeah
what really interesting is if you take
the US economy in general it has gone
through a shift over the last 50 years
or so it used to be that the US economy
was dominated by industrial businesses
manufacturing businesses you know you
can think of these companies as uh
businesses that created physical things
for the physical world um and so whether
it was car manufacturers or construction
or you know home builders Etc but we've
transitioned very much to a world where
now you have what is considered these
kind of capital light businesses they're
pretty much software oriented uh they're
able to create a product they don't need
a manufacturing facility they don't need
nearly as many employees per Revenue as
they used to need uh and those
businesses are really capturing a ton of
the revenue and so a very simple example
would be look at the media industry it
used to be all about newspapers and
magazines you had to make that stuff and
you had to get that logistically out to
people and you paid you know subscribers
and all this stuff now you can simply
just use the internet and you can create
it you don't need that uh plant to print
the newspaper print the magazine you
don't need the logistics you simply are
able to just put it out there uh in
software and so naturally as that
transition has occurred the businesses
that are better right they're more
Capital efficient they're able to drive
more Revenue per employee or more profit
per employee uh they continue to grow
while the businesses that are left in
the traditional economy uh have more of
a headwind and so that shift from
industrial manufacturing and kind of
physical world businesses to these kind
of software oriented businesses really
is the story of the last 50 years and
can see that in the concentration you're
talking about right the top seven
companies in kind of the S&P 500 the
Magnificent 7 they're all software-based
businesses that really are uh pretty
special and by a number of different
measurements uh but also look at the
richest people in the world right really
uh other than Bernard Arno who sells
kind of a luxury physical item uh
everyone else is based in the technology
world and so that shift I think is
really driving uh changes in our
everyday lives and so naturally that
shift in our everyday lives is showing
up in investment returns and you're
seeing those tech stocks are doing much
much better than maybe the rest of the
S&P 500 um and so that I think is going
to be the story uh for the next 10 or 15
years is a continuation of this software
story uh Mark andreon famously wrote
this piece about a decade ago or so and
he said software is eating the world and
we now are seeing very real examples of
this right you know obviously Amazon use
software to eat the bookstores uh you
can see Facebook was able to use
software to eat into the Yellow Pages um
and you kind of go through all these
examples but software is also eating
gold with Bitcoin you know the kind of
this software-based money is really uh
kind of much better and more popular
right now than gold uh you can also then
take that even a step further obviously
with the media companies um but I think
AI is really interesting like AI is
starting to actually eat into uh the
number of employees a company actually
hires or employs and so software is
coming for all of these different use
cases
uh and it's going to make the world more
efficient it's going to empower some
really exciting cool things around
Robotics and self-driving cars and AI
agents and kind of you know quotequote
the future but also as investors you
have to understand am I betting on
things that I hope don't change that
would kind of be more of like a warn
Buffett style of investing or am I
actually betting on things that I hope
do change and that would be more kind of
a venture capitalist or Tech stock uh
investor once you understand who you are
and what you're trying to do then that
really allows you to figure out where
you're going to go put the money if
we're looking back though over say the
last 20 years are you going to capture
value by betting on things staying the
same or would you have missed basically
all of the recent gains if you don't go
for the the software Revolution yeah
what's really fascinating about this is
uh I always like to remind people uh
there's multiple ways up a mountain
right so there are plenty of people take
a Warren Buffett who have been super
successful betting on the world not
changing you know he's owned Coca-Cola
and American Express and a number of
these companies that are really good
brands have good business models kind of
integrated into American Life uh and
those businesses have continued to
compound for a long time now with that
said obviously companies like Nvidia or
Tesla or you know uh Microsoft and
Amazon and Facebook and Google they have
had you know a pretty spectacular return
over that same time period they've
outperformed in many cases now when you
look at a portfolio I think a lot of
young people say to themselves hey I use
the technology products I'm digitally
native this is what I understand kind of
my competitive Advantage is I can
actually tell you are my friends all
using Instagram or are they not right uh
what is going on am I actually shopping
on uh Amazon am I using some of these
Technologies and so I think that the
younger you are the more you're going to
gravitate towards those technology
companies and I think the older you are
the more likely it is that you came up
in a time where you really understood
some of those more physical world uh
economies and so it's just two different
kind of demographics really just
investing in frankly what they know um
and so for young people most who are
probably watching this uh they're going
to be much more attracted to the
technology companies and those have done
very well over the last
decade so my question becomes though is
is the Warren Buffett play still a valid
play or and and let me Define how I read
that so Warren Buffett to me value
investing you look at a company that you
think has the fundamentals right uh and
because they have the fundamentals right
they are going to continue to go up in
value over a long period of time um now
admittedly I am not a Warren Buffett um
uh studier so I don't have a complete
breakdown of how successful he's been
over the last let's call it seven years
but my gut instinct is that uh and I
think he's even said like you're not
going to see another thing like what
Berkshire Hathaway did moving forward
our gains all came from getting into
value investing a long time ago and
holding for a very long period of time
and so when I think about okay I've got
somebody out there who wants to set and
forget they don't want to be um in the
mix every day trying to bet on
individual stocks but uh it seems like
the thing that they should be doing if
they want to get uh more aggressive
returns without taking undo risk would
be to focus on the thesis of software is
going to eat the world that um
everything is transitioning from the old
world of what we're betting on is that
value creation maintains over time based
on fundamentals in the business to
um technology is the thing that has the
cultural energy and therefore as more
and more young people um begin to invest
in a system that they understand not
necessarily a system with fundamentals
But A system that they understand that
they interact with every day that that's
where the gains are going to come from
and I'm just curious if you know do the
numbers bear that out or am I delusional
and Warren Buffett is still just killing
it year after year yeah maybe the way
that I would describe the difference is
Warren Buffett really is trying to do
something that most people would
consider value investing and really all
value investing is although it is
associated with a lot of the industrial
manufacturing businesses he's basically
trying to buy things for less than
they're worth so he looks at a company
and he's got a bunch of different
calculations he'll do and he'll say I
think that this company is worth you
know a billion dollars but right now in
the stock market the market cap is only
$700 million and so if I go ahead and I
buy this business at a $700 million
valuation then I am pretty much
guaranteed to make money because it's
actually worth a billion and so as long
as I can wait and don't have sell the
stock at some point the company will
trade back to at least what it's worth
if not more money and so anytime you're
buying things for less than they're
worth if you actually do the evaluation
correctly you should make money right
and so I think that the value investing
style will always kind of be in favor as
long as you implement it correctly now
to your point and a point that frankly I
agree with um and think is probably the
focus for most young people is if you're
not a a superar investor in terms of
your ability to underwrite companies and
do cash flow evaluations and understand
you know kind of uh uh cash onh returns
and things like that your better bet is
to try to say to yourself okay well
where do I think uh the technology world
is going and how do I go and get
exposure to that and so you know my view
of the future is one that people would
probably put on the spectrum of very
excited about what technology will do to
our lives you know I fully believe that
we are going to have self-driving cars
and there may be even a world where
humans are banned from actually driving
uh vehicles I think that we will all
have humanoid robots that we interact
with on a day-to-day basis you can see
this obviously in places like you know
warehouses and things like that but it's
not a far um you know kind of thought
process to think that we're going to
have uh these humanoids in our homes
right now I always say that uh there are
you know cleaning devices that people
put into their homes and it will go
around and it'll kind of clean the floor
well what happens when all of a sudden
you can have a humanoid that will do the
dishes or do kind of household chores
and stuff like that people probably be
pretty interested in that if you go and
you look at things like uh DNA sequence
and crisper technology and the ability
to either biohack yourself to more
longevity or more kind of healthy years
or also maybe to avoid certain diseases
with babies and things like that that
seems like a huge you know uh area of
opportunity then you go to places like
Bitcoin and obviously there is hundreds
of millions of people around the world
who have chosen to take some portion of
their wealth and store that economic
value in a decentralized asset that is
software based that can't be taken from
them and can't be debased by somebody
else and then you go and you look at
things things like drones and it's
obviously changing kind of the entire
Battlefield and how these things are
being used and it's removing humans and
it's now becoming much more of a
technology battle uh in these wars and
then you can kind of go even a step
further and say to yourself okay well if
all those Technologies are happening
here on Earth what happens when you
introduce Rockets and the ability to
inexpensively go up off of the Earth's
surface and get into space whether that
is to go to Mars or to explore more
about the moon or I'm an investor in a
company called vaa that is literally
manufacturing units in space so they
bring pharmaceutical drugs up they
manufacture them in zero gravity and
then they bring them back to Earth and
so you think about this stuff and you
say you know the future is very very
bright because technology has now got
the capital flowing to it to be able to
build these things and really we are
only limited by our creativity what
ideas can we think of that we can now
kind of use software to actually go and
Implement and so if that is the trend
then really what it is challenging
investor to say is hey do you want to be
more of a professional and go pick
individual stocks you can do that
there's more access to information than
ever you have direct access to the
market through things like Robin Hood
public Weeble Etc or you can go and you
can simply index you can buy the NASDAQ
100 or you know any of these kind of
tech oriented indexes and say hey look I
actually just want exposure to
technology in general regardless of the
way you choose to actually get uh kind
of exposed I do think that technology
has performed very well and will
continue to perform perform very well uh
as long as you don't have to time
markets and say I'm buying today I'm
going to try to sell tomorrow if you can
say hey I'm going to buy technology
today and I'm going to hold it for a
decade very hard to see how technology
does not continue on the trend that it's
on okay let me give you my burgeoning
thesis this is a burgeoning thesis so
hopefully the audience will give me
space to uh to start formulating these
thoughts versus being able to give it as
crisp as I would like but um I believe I
think it was Elon that said over the
next 10 years we're going to have a
hundred years of innovation that quote
alone drives my thinking on what's about
to happen and it's a two-fold thing one
I believe that all of the stock market
is gambling full stop period end of
story uh you have gambling with cover
story and you have just pure gambling so
gambling with cover story would be value
investing I I unless you're buying only
dividend um producing stocks that
actually pay you for holding them you
were simply saying I'm going to buy this
because I believe somebody else will buy
it for more money down the road and
that's exactly how you make your money
but make no mistake this is just
gambling okay if you're gambling the
thing that you want to bet on is
cultural energy now I like you don't
think unless you're going to be in this
full-time and even then you're probably
going to lose your money I don't think
you want to think shortterm I don't
think you want to be a day trader I
think you want to look at movements that
happen over years ideally half a decade
or a full decade at a time but the next
decade to me feels like it is going to
be driven driven almost exclusively by
technological changes and Rapid
advancement so I'm going to be focusing
in sectors that have a lot to do with AI
or like Bitcoin to me my whole thesis
there is it is a migration from not just
Fiat but analog money to digital money
and so every day that I hold Bitcoin
whether price goes up or the price goes
down I'm just asking myself is tomorrow
going to be more or less digital than
today if tomorrow's going to be more
digital meaning every kid that becomes
aware of money and starts dealing with
that is going to prefer a software-based
money over an analog money then cool I
want to be where the software based
money is going to be and I think that
that trend is going to continue as far
as the I can see with the rapid rate of
change we're about to live through I
think this moment is wildly
unprecedented I think the rate of change
is going to be unlike anything we've
ever seen I think it is going to be more
dramatic than uh the printing press I
just think it's really really going to
be something quite manic so if this is a
if this is all betting gambling and the
most obvious gamble to me is that um
everything is going to be more digital
tomorrow than it is today um then for a
set and forget strategy while I agree do
it at the index level you want to be
focused on uh technology I treat Bitcoin
as my uh the place where I store my
wealth um that feels like the right play
and that what has been happening
historically with something like a
Burkshire hathway is it just isn't going
to work on mass is my gut instinct and
it's going to be harder and harder to
get uh value out of that what I'll call
the the Boomer strategy and um a more
likely bet is to bet on the continued
migration from analog to digital does
that make sense to you I I do think it
makes a lot of sense if you think about
Bitcoin right um the way I treat Bitcoin
is it is an asset that I buy and uh I'm
going to give it to my grandkids now the
reason why that's really important is
that's not a new Phenomenon with just
Bitcoin if you think of let's take uh
the country of India in their culture uh
gold is passed down from generation to
generation to generation it could be
jewelry or kind of the family gold right
uh if you think in the United States
land a lot of times has passed down from
generation to generation to generation
the ability to pass these assets on from
generation to generation really drives
quite a bit of wealth right whether it's
real estate land gold or or any other
asset Bitcoin has a lot of the same
properties of these assets so if you
think about land it's a finite asset
they're not making more of it same thing
with Bitcoin right it's a finite asset
there's only 21 million that will ever
be available if you think of gold it has
sound money principles it's outside of
the system and no one can devalue it
same thing with Bitcoin right it's
outside of the system and no one can
devalue it and so I like to think of uh
there's a very small amount of assets
that you can buy today you can hold your
entire life you can pass it on to your
kids or grandkids and that is going to
set up your family and kind of uh those
that come after you uh to be in a really
good position so that's Bitcoin for me
it stores economic value really well
over a long period of time so I want to
make sure I have that for some portion
of my portfolio in comes to technology I
am not like a Warren Buffett I don't
want to try to bet on the world not
changing that's not how my mind think
it's not what I'm intellectually
stimulated by I am much more interested
in how things are going to change uh and
where that change is going to occur and
who is driving that change and so these
new technologies in my mind are
absolutely fascinating and what I notice
in the market is that now not only are
uh entrepreneurs uh having Capital
available to them there's tons of people
who want to give people money to go and
kind of change the world uh but also the
technology that is available to these
entrepreneurs to do this makes them 10
20 50 100 times more effective and so if
you think back to businesses it used to
take forever for them to get to a
million dollars of Revenue or10 million
dollar of Revenue we are now seeing
businesses launch and get to a million
dollars of Revenue in the first couple
of months right in some cases we have
seen businesses that literally are
getting to 100 million dollars of
Revenue in two or three years and so any
time that you can use technology to be a
more effective company to grow faster to
be more efficient obviously value is
going to acre there and the way that I
think about kind of this brand new
future is two things remain true who is
the person who's actually building the
company whether they're in the public
market the private Market whatever
you're betting on a person right the
same way that somebody would come and
bet on somebody building a manufacturing
business or a food business or anything
you're betting on a person you need to
make sure you get that right and then
the second thing is you need to bet on
these long Trends and the beauty right
now is that technology has the Tailwind
because ultimately there's an economic
incentive and I think that that's really
something that gets lost on this right
if you think about somebody who wants to
go start like a local restaurant and
they go and they talk to investors and
you say well how much money could I make
here there's usually a cap right hey we
have 50 seats we can turn over the seats
three times a night we're open six days
a week and you do the math and you're
like okay the most amount of money that
this business can make is X dollar and
it doesn't matter how long they're in
business it's just capped that's what
this business can do but these
technology companies they kind of have
exponential growth so if they start
today they say Hey look we're making X
or Y product or service and we're going
to sell that and when we get started we
think we can sell it to a certain number
of people but over the next 10 years we
think that that number can literally go
up 10 or 100x and so there's no cap to
the upside of these companies and a
great place to watch this is a company
like paler I mean paler hit a hundred
billion dollar market cap they literally
started off basically as a service they
went to companies or or organizations
they said hey we have this you know
really unique uh technology capability
why don't you pay us some money and
we'll kind kind of custom solution for
you and then over time they began to
build that into a technology product now
that technology product is used by
people all around the world and they
built a hundred billion dollar company
it's insane and so that's where
ultimately I see from an investor
standpoint is I want to be in businesses
that have unlimited upside potential and
if the entrepreneur is good and
continues to do what they're supposed to
do then I can put a dollar in today and
get back way more in the future and I'm
not capped by physical space or the
number of times I can turn over a or
something like that and so I do think
this technology trend is just really
really big um but it's showing up
everywhere right and I think that uh for
the people who are watching this
regardless of what industry you're in
technology is probably infiltrating it
and if you think it's not then you're
not looking hard enough because right
now if you take AI maybe as as the
easiest example uh AI is coming after
Blue Collar jobs and it's going to come
after White Collar jobs you know the AI
and machine learning uh self-driving
cars is it going to take away Uber and
taxi drivers at some point yes when I
don't know but it's also going to take
away truck drivers and it's going to
take away a lot of people who are
employed as drivers but then if you go
and you take a look at well I know a lot
of companies I was having breakfast with
a Founder today and he said that he
thinks that he can take his company
which currently has 85 employees and he
think he can actually use AI to shrink
the number of employees from 85 to 50
but during that time frame he's going to
FX his Revenue which which means that he
can take his Ai and he can actually
replace some of his software Engineers
he can replace some of the marketers he
can replace some of the designers and
the software is going to start to do
this stuff and so if that is the path
that we're on is things like AI are
going to infiltrate every industry it
doesn't matter if you're in accounting
if you're an engineer if you're a
designer if you're in Ops if you're in
sales whatever the way that you insulate
yourself from this is you become the
most knowledgeable person at your
company on these new tools because they
will be the last person that they can
fire is you and so one quotequote
investment you can make yeah you can
make financial investments but I also
think you can make a kind of career or
personal investment by becoming an
expert using these things because it
will help you continue to be employed it
will help you to continue to drive
income whether you're an entrepreneur or
an employee and that will give you the
funds to they get then go invest in the
market and so this idea that hey we're
just investing is partially true I think
it's really important that people
understand these tools are coming for
people's jobs and the people who will
survive are the people who know how to
control them who know how to use them to
be better at their jobs and so don't
ignore it actually embrace it Go become
the expert and you'll become more
valuable to your company we get back to
the show and just a minute but first let
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oh buddy do I agree with that so I think
that 2025 is going to be the year of
just massive anxiety around AI you've
got Salesforce making their announcement
we're no longer hiring any more
Engineers there are going to be a
gazillion conversations like the one
that you had this morning where people
are looking at their headcount saying
how do I shrink this uh so not even
staying static but but how do I actively
reduce this I think what that leads to
is not in 25 but as we go down the road
and that uh proliferation of AI becomes
super ubiquitous that we're going to
have to print more money to create a
bigger social safety net which is going
to push people and this goes back to my
thesis that all of investing is gambling
it's going to force more people to
become uh uh people want me to say
educated investors I'm going to say
degenerate gamblers uh it's going to
force people to be degenerate gamblers
to outpace the inflation of printing all
of that money to take care of the people
that are getting their jobs just
absolutely obliterated by Ai and so now
all of a sudden it's driving more people
into this okay where are the big returns
going to be I think that those are going
to be in technology so you get this
really weird Loop of the more that
technology um begins eating the world
the more people need that social safety
net the more that we are printing money
which requires more people to invest
what are they investing in they're
investing in the very technology that's
eating them which causes it to eat the
world even faster and so it is this
crazy self-reinforcing loop
and that's where I start to get very
uneasy about what's going to happen to
people psychologically during this uh
spiral but being aware that that's where
the opportunity lies certainly for
people that are paying attention
you can uh begin to position yourself
again I'm an index guy do not think that
you can pick the right company but if
you can pick the right sector and hold
for long enough to your point about look
for those longterm trends that I think
people can really um set themselves up
to win now one thing I want to talk
about that to me is tied to that when I
look at micro strategies and what
they're doing is I say okay people
people that invest actively you going to
be able to predict their behavior far
better if you think of them as a
degenerate Gambler than if you think of
them as some sophisticated investor and
what micro strategy has done a brilliant
job because he has a company that adds
value it's just not growing and so from
the stock markets perspective that's a
bad company not interested it's not
going to grow not going to invest and so
what he did was say okay I know the
people want to gamble they don't care if
my company is solid solvent well-run all
they care about is whether they're going
to be able to gamble on this so let me
start doing a Bitcoin treasury strategy
and then overlay basically the entire
stock market all of the shorts the
options trading all of that on top of
cryptocurrency which already attracts
the most extreme gamblers and so what
you're seeing with micro strategy is uh
gambling
mainlined do you see something else when
you look at the just unbelievable
success of micro
strategies yeah so I think if you put
yourself in Michael sailor's seat um why
does he buy Bitcoin to begin with right
uh do I think that there's an element of
hey if I buy Bitcoin then the bitcoiners
will notice me and they'll start to buy
my stock definitely but I think that
probably the bigger story was I'm
sitting on $500 million of dollars of
cash and if I keep holding this cash and
it's being devalued you know since 2020
the US dollar has lost more than 25% of
its purchasing power uh that would be
very detrimental to somebody who's
sitting on $500 million of cash and so I
need to convert it to something else
whether that's real estate land gold
Bitcoin whatever and so I think that was
uh kind of a huge piece of this is hey
I'm now convicted that uh inflation is
going to be a problem the currency is
losing value I need to convert it to
something else he buys Bitcoin and I
think that it's kind of this thing where
you know you ever like go to the pool
you're like I wonder if it's cold or not
so you dip your toe in oh it's not that
bad then you put your ankle in right
then you put your knee and then
eventually you go all the way in the
water that's kind of what happened here
right as he like dipped his toe and he
bought you know $400 million or so of
Bitcoin he waited he's like that worked
let me buy some more let me buy some
more and then eventually he was just
like I'm dumping in the deep end I don't
need to check the water I'm buying as
much Bitcoin as I can and so naturally
as you go through that progression it
definitely begins to attract people who
are much more uh kind of uh speculating
on the stock and really the genius of
his strategy is he's not just attracting
speculators from kind of the equity
Market he's also attracting speculators
from the debt Market as well and the
debt Market is massive in the United
States and so he's giving the ability
for people who have a mandate to buy
bonds say hey come and buy these
convertible bonds at micro strategy I'm
going to give you underlying exposure to
bitcoin so now he just unlocked a whole
new pool of capital that wants exposure
to bitcoin and so that has played out
very well for them and you see all these
copycats around the world that are all
kind of popping up saying hey that works
so well maybe I'll do the same thing how
do I start to raise capital and go and
do it but maybe the bigger story here to
me is in in the public markets companies
previously had two levers they could
pull to improve their business they
could drive more Revenue so there's a
revenue lever and then they could also
cut expenses so they could pull the
expense uh lever micro strategy kind of
opened people's eyes to know there's a
third lever which is your balance sheet
so you have Revenue you have expenses
but what he's doing is he's buying
Bitcoin and by putting things on your
balance sheet that go up in value that
is a third lever you can pull and Real
Estate Investors kind of sort of knew
this before right because they would
have uh their ability to borrow against
their balance sheet and things like that
but this is a whole new way of thinking
about it and so I am predicting that
there are going to be a ton of public
companies that are going to say wait a
second we don't pull the revenue or the
expense lever we pull that third lever
the balance sheet lever uh and we're
some people are going to do with Bitcoin
we already see companies like uh Soul
strategies uh which I'm involved with in
Canada they're doing it with salana but
there's going to be companies that do
with all kinds of assets they're going
to say look let's put this on the
balance sheet and let's wait for some
capital appreciation to happen and let's
continue to play this game where we can
now pull the lever of the balance sheet
in that world the ability to evaluate
companies the ability to be a capital
allocator is going to be really really
important and so I always say that you
know to be successful in the world going
forward you need to be able to operate
companies you need to be able to uh
allocate capital and then you need to be
able to create content if you can do
those three things you're kind of a
triple threat and if you look at what is
Michael sailor or Jeff Bezos or a Mark
Zuckerberg right Mark Zuckerberg
operates a business he allocates capital
and he's creating content it may not be
the content that you think of you know
in terms of Mark Zuckerberg is a content
creator but he's able to do this if you
think of Warren Buffett Warren Buffett
operates a business he allocates Capital
he creates incredible content writes his
annual letter he's got an amazing
conference all this stuff and so I think
the challenge for people moving forward
in kind of a digitally connected world
with all these Technologies accelerating
everything is can you be the triple
threat you do those three things to
position yourself to be able to
capitalize to be able to actually build
the businesses attract the capital and
then go and get customers in a cost
effective way and I think the people who
can do that will benefit significantly
from these Tech Trends and if you are
one of those beneficiaries you'll have a
lot of capital then you can turn back
around and that kind of spiral that you
talked about you're going to invest it
back into the tech companies which going
to only further your kind of economic
status if you continue to do that over
and over again uh you will be one of the
big winners over the next 10 or 15 years
that all makes a lot of sense to me I I
am trying to develop a predictive engine
so that when I look at the world I can
say when th this thing happens it's
going to lead to this thing and when I
look at investors as quote unquote
investors meaning oh there's something
of value here I'm going to put money
into this um it does not lead to
Accurate predictions when I look at uh
people's desire not only desire that the
current printing of money forces people
to dodge the devaluation of their money
by gambling in the financial system to
outpace the rate of
inflation and I look at everybody is
these gamblers that are trying to beat
inflation they're being forced into this
then my predict validity seems to
Skyrocket and so I would love for you to
point out if there's anything in the
following statement that you think is
crazy when I look at micro strategy I
see one brilliant move that Towers so
far above everything else um but it only
makes sense when you look at people as
gamblers is that sailor was like oh wait
a second I'm not going to dip my toe in
the water I don't need to I'm going to
run a mathematical equation about what
people would be willing to bet on and
I'm taking the highest volatility
longest performing asset and I'm going
to put over the top of it all of the the
G gambling mechanisms of the stock
market and this is why I think the
average person which I will very much
consider myself of they don't understand
the stock market has almost nothing to
do with whether the company is valuable
people do not give a [ __ ] Anthony all
they care about is the really fancy guys
they want to know can I beat other
people at guessing whether this goes up
or down which is why in the stock market
you can make a ton billions of dollars
betting against something say saying
this is a trash company and it's going
to go down and sailor's like hey I don't
care whether you think it's going to go
up or down I'm going to let you pick the
amount of volatility that you want it is
so brilliant I'm literally it melts my
brain to think about what he's done to
go oo you like this High volatility
thing a word let me give you all of
these different ways that you can bet
for it against it short-term long-term
uh highrisk low risk it it's
unbelievable but it only makes sense
when you look at it as the entire I
don't want to limit it to the stock
market people may get the wrong idea the
the financial system for the most part
is just a big casino and once you
understand that oh I'm being forced to
play at the casino to beat inflation and
sailor has built the greatest Casino
ever and this is why this guy is it it
is he can borrow money hand over fist it
it it's unb believable but it for me it
didn't click into place until I was like
oh wait this is just gambling once I was
like oh he built a casino now I get it
it all made sense tell me why that's
crazy well I think a good uh kind of
framework for people to think about is
uh if you want to drive a financial
return you have to take risk right and a
you know kind of old adage in the
financial world is uh the risk you take
is the return that you make so whatever
risk you're taking if you take a small
risk you can only expect a small profit
if you take a huge risk then you can
expect a potentially huge profit right
but the risk and the return is uh very
much married together and so obviously
the best investors in the world are
looking for how do I take almost no risk
and make a massive return it's just that
that doesn't exist very often right so
usually it is small risk big or uh small
risk small return big risk big return
and what I think Michael saor figured
out is this Bitcoin thing is highly
volatile you know 80 90 100 Vol asset um
and it goes up and down up and down up
and down but over a long run it goes up
and so if I put this highly volatile
thing into the public market there's a
ton of people who are going to have an
opinion to your point and some of them
are going to think that it's going to go
up a lot and some of them are think it's
going to go down a lot and they're going
to bet in either direction but again it
goes back to people who are investing in
that asset they are betting knowing
they're taking a big risk and so they're
expecting a big return and that's what
they've gotten if you have bet and said
that micros strategy was going to go
short for the most part you've lost
money and you probably lost money big
because it has gone the exact opposite
way but if you've bet on micro strategy
and it's gone up a lot you've probably
made a lot of money and so what I think
about that type of uh company is you can
expect it to have the same volatility as
the underlying asset there have been
times where micro strategy has gone up
you know hundreds of percent there's
been times where it's been cut in half
and lost 50% of its value but it goes
back to that idea of what is your time
frame right there was this great study
done I think by Fidelity where they
looked at all of the best performing
accounts and they tried to find
commonality between them and said what
are the best people uh from a return
perspective do and two of the insights
they got were the best performing
accounts were from people who lost their
passwords or people who had died because
people just didn't look at the account
for 5 10 15 20 years and so naturally
the same thing here is if you buy some
of these stocks whether it's an index or
the individual stocks and they're good
companies and you don't look day-to-day
you just come back in two years it's
probably going to be doing better than
it was when you bought it but the
problem that people have is if there's a
daily Ticker price it went up today it
went down today it went up today went
down today their like entire mood is
affected you know I have some friends
who are public market investors they
literally are in a bad mood when the
Market's down they're in a good mood
when the Market's up right I'm like dude
the stock market is determining whether
you're having a good or bad day like
stop looking and I think that is the
challenge for young people is how as
you're learning as you're investing how
do you figure out how to deploy Capital
but also remain uh emotionally
disciplined so that when the market goes
up or down you don't actually get you
know upset or excited because if you go
back to the Warren Buffett Buffett
actually gets excited when the price
goes down he's already convinced himself
I'm going to buy you know whatever stock
if it goes down I'm excited because I
get to buy more of it at a cheaper price
so the joke about bitcoiners is the
people who really understand Bitcoin
they get excited when it goes down
because they can buy more at a cheaper
price
right same thing with some of these
these businesses but you got to make
sure it's an asset that's going to be
around in 10 years right that's got got
kind of longevity got resilience to it
Etc and so I think your point about uh
kind of this High volatility you know uh
really elicits people who want to
speculate is 100% true um and Wall
Street is better than anyone at creating
you know kind of speculation tools or
you know casino games as you said um
sure they've got you know kind of better
ways to describe it they've got all
these models and all this stuff but at
the end of the day they're risking
dollars for a potential return if
they're right the market rewards them if
they're wrong they're they lose the key
thing is there's probably better odds in
you know the stock market than there is
at a casino table right and I think that
that's where a lot of people get
attracted to hey let me go over here one
of my favorite stories I don't know if
you know the story of Susana Investment
Group uh Susana uh was a couple guys in
college they actually started betting on
horses and they were trying to use all
this math to figure out which horses
were most likely uh to win the races and
do all this stuff and somebody came to
them and said hey you guys are pretty
good at this like horse betting thing
but like did you know that you don't
have to wait for the horse races to bet
every day like there's a stock market it
trades every day right you can go over
here and there's all these horses uh
called stocks you could pick different
ones and run your math models and
whatever and they ended up becoming one
of the great investment firms but it
literally was people saying hey why
don't we take something that works in
you know kind of the the risk-taking and
gambling world and let's bring it to
kind of a more orderly Market that we
have more access to there's more
opportunities and let's go and implement
it there and so I do think that there's
a lot of these stories where people have
crossed over from you know kind of pure
risk-taking with very you know um
unattractive odds to a market like the
stock market where they say hey there's
much more attractive odds here let me go
uh and uh you know kind of invest
here okay so to me that is the perfect
illustration of my point that the guys
who are betting on horses end up doing
great in the stock market because it is
the same skill set
uh my question becomes why do you think
the government and Society at large is
cool with people betting on the stock
market but not cool with betting on
sports so I think that's changing um but
what I would say is uh you know there's
this really interesting Dynamic where uh
people will say what do you want to do
why do you want to do it and the why do
you want to do it is actually a really
important component to whether they like
what you're doing or not maybe it
shouldn't be that way but that's how it
is I'll give you a couple of examples
why do you want to invest in companies
somewhere someone somewhere along the
line said you know I want to invest in
companies because I want to give Capital
to entrepreneurs so as entrepreneurs can
use it to build products and services
and corporations and create jobs and
economic activity and you know GDP
growth and all these things that sounds
really good people said hey we like that
idea let's Empower let's let's fund kind
of American compan companies so that
that that's
okay somebody came along and said you
know what we should do we should create
a lottery system and you know what would
be a great thing to do with the proceeds
we can use it to fund the education
system within a state and so there's
many states across the United States
where they literally have a lottery and
the odds are not good you know there's
like one in a billion chance of winning
or something and the proceeds are
actually used to pay into the education
system the schools the teachers you know
all that kind of stuff well all of a
sudden what do you want to do when I
create a lottery well I don't know if I
like that why why do you want to do it
oh we're going to help fund the schools
great idea that gets approved Sports
gambling right now is very much what do
you want to do I want to bet on Sports
uh why do you want to do it because it's
fun that answer hasn't been so you know
well accepted but I do think that it is
changing now because really what ended
up happening is kind of twofold one
there was like this like black market of
gambling that had been going on for a
long time and they kind of realized hey
we can't control this so it actually may
be better to pull it into the regulatory
apparatus put some rules around this
kind of sanction this stuff and uh it
probably is better actually for the
market participants but two is there's
Revenue source and so states started to
really say hey look we should legalize
this because we're actually going to
make some money and I forget the exact
number so somebody will probably correct
me if I if I get this uh wrong but I
think it's something like in the first
two or three years the state of New York
has generated like 122 billion in
revenue from Sports gambling and so
again whether it's 12 billion it's 1
billion or it's you know 20 billion it's
some big number that is going to the
state and so whenever you see that you
say to yourself why is it that this was
not legal and now it's becoming legal
why do you want to do it oh because the
state's going to get money and so that I
think is really what's kind of
transitioning it now what I will say is
um there is uh a potential risk where it
all comes down to odds right so again if
you're investing in a company uh the
company some are winners some are losers
but there's disclosures there's a lot of
things that happen in the public markets
that make an investment quote unquote
safer than maybe trying to pick what
color is the Gatorade going to be when
somebody dumps it on the coach at the
end of the game that is like you know
very pure play uh kind of you're right
or you're wrong now I'm in the situation
where I always say to myself look I
think Americans should be able to do
what they want with their money right
that's kind of the beauty of America the
the kind of uh belief in Financial
Freedom is you should be able to do what
you want with your money but I also
think whether you're investing in a
company you're you're betting on sports
or you're doing something in between you
also should have as much information
available to you as as uh needed and so
things like company disclosures Etc is
really important in the public markets
things like in sports betting having an
understanding of the odds and and
various other uh topics is really
important as well I think you see a lot
of States saying hey what wha