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- [00:00]
A
You know what's freaking me out about this market is the fact that it feels like the shitcoin traders have left crypto pivoted to the stock market and now the stock market trades. Kind of like crypto used to.
- [00:33]
B
Good morning, Jonah.
- [00:35]
A
Good morning, Avi. Good afternoon.
- [00:38]
B
Afternoon for me. How's it going? How we looking?
- [00:41]
A
We're looking good, Avi. You know, I was just reviewing the title that Brad put beneath us here. Market update, Fed backstops the yen. You heard it here first. The dollar yen is a fantastic leading indicator for US Treasuries because Treasuries, interestingly enough, the largest holder of US Treasuries used to be China. They're letting those roll off because they hate America and America hates China. But the new, that used to be number two, the new number one holder of U.S. treasuries, to the best of my knowledge, is Japan. Offshore holder, of course. And then there's a carry trade, obviously. So for those of you out there looking for little side hustles and side projects trade to build a systematic strategy with Claude code or chat GPT, where you, you know, you should have decades of history for this, where you just sort of like track the price of dollar yen and use that as leading indicator, maybe spot minus some moving average and use that as a signal to trade Treasuries or Treasury futures. Interesting relationship there.
- [01:53]
B
Yeah, I, I find it hard to grasp why Scott Besant, of all people is deciding to intervene in a currency market. Because he should know more than anybody else that interventions very rarely work. I mean, that was the whole premise behind him betting against the yen and making a fortune. And the whole premise behind him betting against the pound with Soros and breaking the bank of England is that interventions can't stop market forces. It's very rare for that to be the case. Sometimes every now and then there's a case where traders are sort of asleep at the wheel and the intervention wakes them up to reality. But if you're trying to fight a market force, it's very rare that you're going to be able to succeed. And so one of the questions that I had heading into this stream that I tried to answer for you guys is why? Why is he intervening in the market right now? And then also ultimately, what does it mean for you, the investor? So there's obviously a big trade, the yen carry trade, where because the yen you can borrow at very low costs, you borrow yen and then you sell it into dollars or you sell it into U.S. treasuries. And that obviously dampens the price of U.S. treasuries and ultimately helps the market because as it keeps rates low, allows more money to flow into higher, higher, know, higher risk assets. Right. And yields, Yields are low. And so you might ask yourself, well, why, why then would it be bad for the yen to depreciate against the dollar? Right? Like, why would, why would that be the case if it's going to juice the stock market? I don't know, Jonah, if you have an answer.
- [03:41]
A
Yeah, you've put the question to me. So sadly, despite racking my brain, like I knew Brad prepped us, that this would be the title of the episode. I just don't know. This is one of those things where I'm left scratching my head. I do not know why we would intervene in a foreign currency. I've never seen that happen before. Interest rates and currency markets kind of break my brain. I find myself more aligned with commodities thinking where there's an underlying molecule or barrel that you can kind of like attach your thinking to. Like, I have such a better understanding of the Iran war than of this because underneath it is like a barrel of oil, right? Or a nuclear weapon here. I have no idea. And I guess that's unhelpful if you're listening. But what I would say is, like, if you find yourself in the camp of having a good grasp of why something is going on, then you can trade it. If you're like me in this situation, avoid, do not take risk on the back of these sorts of things. Because, you know, risk trading should be intuitive. Your portfolio should be intuitive. You should be able to explain it to yourself. I have no, I have no frickin idea why Scott Besson is doing this. It seems so. Frankly, it seems really stupid.
- [04:58]
B
I think, I think my, my answer actually goes in line with what you said at the beginning. And basically Japan is committed to defending the end. Japan doesn't want the end to go crazy. You said at the beginning who's the largest holder of US Treasuries? Japan. So what does the US not want? The US does not want Japan dumping Treasuries, forcing the rates up and then hurting the markets. And so I think Besant has made the calculation that the Yen showing a little bit of strength is going to hurt the carry trade less or hurt the carry trade unwinding will hurt Treasuries less than Japan's central bank intervening and selling Treasuries to defend that. So that's sort of the counterbalance effect. And so that's the calculation that he Made. And what does it mean for us is it means that just yet another example of our government willing to intervene to make sure that the markets are stable. We are slowly moving towards. I don't want to say it, but a state controlled market, in many ways, it's kind of nuts. I mean, every, you know, every inch, every day we get, we go, we go another inch. Looks like we're lagging for some reason. I kind of want what's going on here.
- [06:25]
A
Oh, no, fam. We lagging.
- [06:28]
B
Oh, no, fam. Who has, who has a bad connection? I'm blaming you, Jonah.
- [06:33]
A
It's probably, it's. It's usually your fault. Brad's saying it must be on YouTube's end. I mean, I see you. I see you fine. X is fine. All right. If you're seeing a lag on YouTube, pivot over to X. Yeah. Brad's.
- [06:50]
B
The Internet must be paid in yen.
- [06:54]
A
Oh, man, that's awesome.
- [06:56]
B
That was a comment. Somebody commented. The Internet. The Internet must be paid in yen. Actually, what's kind of hilarious is that I. Not to dox my. Actually, I'm not going to dox myself. I was going to completely dox my location here in New York. I'm not going to do that. But let's just put it like this. I live very close to an Internet provider's headquarters and my Internet is still trash.
- [07:16]
A
You live very close to a. Yeah, I'm not going to dox you. I was about to make a joke that would doxy. But I think, put it this way, I think, I think the issue that, that I have with this is, okay, so we're an interventionist market. The government is dabbling in things and managing. Managing price action across a wide variety of securities and commodities. What does that mean? Right? That means that if the government has anointed your. Your security or your holding as. As being strategically important, you can hold it with confidence and buy dips and tax loss, harvest dips and add more on dips. And you probably shouldn't be selling on rallies and you shouldn't be worried about rotating into other stuff, right? Like, you're good until at least 2028. If your asset has not been anointed, which maybe like crude oil. Donald Trump has historically been tweeting bearish stuff about crude oil, then that thing's just not gonna rally. It's not gonna sustain a rally. You're not gonna get your $200 oil. That's gonna be managed. Trump has been telegraphing his management of markets since 2000. I guess as president since the very beginning. But well before that he was tweeting about asset prices. So the guy wants interest rates lower, he wants stocks higher, he wants input commodities lower, but not too low because that hurts the American producer. It's all out there. There's no mystery. So that makes, for me, it makes long term investing very easy to do. You just sort of ride what he tells you to ride. You buy when he tells you to buy and you sell when he makes it clear that the price of something has gone too high for his preference. The yen is way, way outside the remit of what I would have considered to be a market of interest to Trump and Besant. And it seems like a very stupid decision to intervene. But Besant is like maybe the least stupid person in the entire United States government right now, maybe all of Washington,
- [09:24]
B
D.C. and actually hilarious. I don't know if you saw his tweet about Nick Timoros. Yeah, he said, he said, and I quote, let me, let me just read this for you guys. If you haven't, if you haven't seen it, it's hilarious. He goes, one of the highlights of the Warsh Fed has been watching stenographers posing as journalists like the Wall Street Journal's Nick Timoros reduced to reporting Fed backroom gossip because they're incapable of performing real economic or monetary policy analysis without being spoon Fed. Now that is hilarious.
- [10:01]
A
Besant for president.
- [10:03]
B
I mean, this guy would be a great president, but also he's ridiculously sassy. I mean, for a reason. But I think that was quite funny.
- [10:14]
A
And basically he'd fit right in in your neighborhood, Avi.
- [10:18]
B
Basically, it's so interesting that on one end our government is really leaning into free markets and on the other, they're really leaning away. I mean, they're saying we want to take, I think, really, when you dig into it, what are they doing? They're trying to take power away from the Fed and from other branches of government and consolidate that power into the executive branch. Right. They want to make, they want to be able to dictate the path of the market because they view the Fed as somewhat almost incompetent. Right. I mean, the whole premise here is that Besant puts in, you know, Trump and Besant, they put in Warsh because he's not going to give forward guidance because they believe that forward guidance is bad. If you thought that the Fed was competent and right most of the time, then forward guidance wouldn't be so bad. But because the Fed tends to lag or they tend to be Reactive to economic data. Bessen and Trump got together and they said, look, we gotta fix this. Let's basically give the Fed less power. I mean, taking away forward guidance, installing somebody that doesn't like it is effectively taking away power from the Fed. And so what does that mean? You just have to pay a lot closer attention to, as you said, what the administration has anointed and not necessarily the whole reading the macro tea leaves is going to be. You're reading the Fed tea leaves, paying attention to what they're doing obviously is going to be much less of a game than it has been historically, which is honestly very good thing.
- [11:51]
A
I think it's dovish that there's no more forward guidance. And again to you, Avi and anybody else listening, take this at the biggest, fattest grain of salt of all time, because I absolutely suck at interest rate trading. But just knowing Trump and knowing how he thinks, if you install a guy who's famous for not doing forward guidance, that means that more smoke filled back room type conversations can take place, right? That means that whatever Kevin Warsh's weird sexual fetish is like, it will be fulfilled in exchange for a 50 basis point cut. And the market won't be upset about that because, you know, he's guided something sensible on a call. Like I basically expect that interest rate volatility will be higher. There will be more stuff going on behind the scenes that we hear about through the various back channels that finance people listen to. But you know, basically it just, he's less, he's less sort of committed. He's less locked into what would otherwise academically be a sensible interest rate path because they can always just come out and surprise people with stuff. That's, that's what it seems like to me. Like obviously Trump would not have appointed somebody who isn't committed to the Donald Trump agenda of lower interest rates. It's going to happen come hell or high water.
- [13:07]
B
Look, I 100% agree. I also just want to take a step back and talk about the bullishness of the markets in general. The last time that we streamed we were mid blow up in memory and now we're sort of past this. We're past the liquidations. I think we got the churn. We're back on track. NASDAQ is gone in for the all time highs. S and P has already hit the all time highs and a lot of our favorite assets are really starting to move. I mean, look at gold for example. We talked about gold on the last pod and the last few pods saying that it looks really, really primed for a move. And one of the reasons that it looked prime for a move was because I think that a lot of the central banks that were selling had and stopped doing so much. And not only that, yesterday we got a piece of news that the Korean central bank is actually starting to add to their gold reserves in anticipation of rebuilding them for a future crisis. And that is extremely important for the gold price. What you saw from 5,500 down to 4,000 was a mass de grossing from central banks selling gold at the highs to shore up the reserves. And now that process is done and is in reverse. That's why gold is up 4% today, is that people are starting to realize that the flows are going to start coming back. And that is completely separated from how gold historically has acted. Because if you go back 10, 10, 15 years, gold is very sensitive to rates. I think gold is much less sensitive to rates than it is than it is today. In fact, you could even make an argument that as like as these, for as these, as these central banks acquire gold, they might be printing money, they might be selling their own, their own Treasuries to diversify, they might be selling U.S. treasuries to diversify into gold. And so you might actually see an environment where rates can go up and gold, and gold can go up as well because of, just, because of just flow pressure. That just takes me back to my overall thesis of where the markets are today, which is it's really at the end of the day. So the entire thing is just capital flows. The entire thing is just where money is going to go. And it has a lot less to do with these historic. I mean if you pick up a CFA book, for example, it's going to teach you about all these correlations that currently don't exist. That's why I'm very bullish on gold. I'm also bullish on palladium. The palladium chart looks phenomenal. I'm just bullish on metals in general right now. I think that so much focus has been paid, paid to memory, so much focus has been paid to the sort of hot assets. And metals have been overlooked for a while and they're starting to show immense strength right now. So silver, copper, gold, palladium, all these things I think are going to do extremely well over the next, call it three months. And I think we could honestly see all time highs in gold in the next six. And so I've definitely, I've taken down some equity except exposure, which I talked about on on, on the previous pods because I was bullish on gold, but I've allocated more, more to gold, just really, really as a trade. But in general I'm just, I'm constructive on the markets. I mean when you look at memory, memory was just a blow up from ash burner and profit taking but the entire framework is still intact. Intel is still a phenomenal hold in my opinion. And so overall, overall I'm very constructive on the markets and kind of, I think we might head into sort of just a like monkey dart situation where kind of whatever you pick, as long as it's not complete trash, is probably going to go up.
- [16:54]
A
I think, I think just, I mean if you want to, if you want to be defensive and still not just preserve but appreciate your capital S and P, if you want to be risk on hold, NASDAQ or MAG7 or mangoes or whatever you can get your hands on, just go further towards AI Mangoes. I see you asking. It's like the new acronym on Twitter for Microsoft, Apple, Nvidia, Google, OpenAI, anthropic something. I don't know, it's just like basically a new Mag 7. New, new, new. Just the further towards AI you go, I guess at the tip of the spear it would be like Micron, sandisk and the Squid game stock market over in South Korea with leverage. Right. Like the more, the more exposure you're getting to the same trade. But I agree with you, it's, it's just a monkey dart scenario. Now going back to the metals market, I disagree with you a little bit. Not a lot. I do think that gold is just flows. Gold's never been a very fundamental market. Right. It's just the central banks are just these gigantic elephants and everybody else doesn't matter. Sure. You know, some of our cousins in India like to buy for jewelry demand, but it's not like a real, it's not like a real commodity. It's more, it's its own little animal. It's just capital flows. I think it is very risky and problematic for especially young traders to get into the mentality of like, oh, it's all flows. And if you want to be really successful in a market, especially over the long run, you gotta understand the fundamentals. You have to understand how the barrels move, how the molecules diffuse through the pipe, how the 10Qs and 10Ks translate into price action for the stock. Right. If you ignore fundamentals and just sort of decide that it's all capital flows and technicals, you're missing out on basically 80% of the puzzle over the long run. So with regard to palladium, there's probably something going on with regard to car demand or electric, the, you know, the electrical vehicle transition, the energy transition there that I'm unaware of. My boy, my, my trading idol, Stanley Druckenmiller, got on the tapes a couple days ago and he was asked if you had, if you could put on one trade with a blank sheet of paper, what would it be? And who just said copper? And they were like, why? Now remember, truck is the goat. He is the guy, right? He's the best ever to do it the way that he does it. They, he was like, well, well, the reason why copper is, you know, it doesn't seem like, you know, chip demand, data center demand, energy demand, power transfer demand, you know, just like building cities and stuff with wires in the building. Demand is going to go sideways or down in the next eight years and supply seems pretty fixed and kind of like diseased. It's not going to go up for x, y, z reasons. The supply is just capped and the demand is on a super cycle to infinity. For all the reasons that we talk about every day. He's like, I wouldn't overthink this. Just buy copper. So honestly, kind of makes me want to go buy some copper. If you're looking to express a trade, you look for the bottleneck. The bottleneck here is, you know, there's people talk about electrons being a bottleneck. I disagree. I think you can find enough electrons globally to, to satisfy data center energy demands. You may not be building data centers in Northern California anymore, you probably end up building them overseas, but who cares? Those packets of information can get shipped back undersea in nanoseconds. The real constraint is at the commodities level. So I think if you want the purest exposure for a long term trade, you probably go down to the bottom of the capital stack. The sort of AI Maslow's hierarchy of needs. For human beings, it's wheat, for AI, it's copper. And maybe I saw on the other end of that spectrum, I know a lot of people like to take a bunch of risk and buy things like Galaxy stock like GLXY to get their exposure to AI. But just to close this ranch.
- [21:13]
B
Yeah, go ahead.
- [21:14]
A
Jeff Dorman, who I think is a good guy, debated with him a lot when we were trading against each other. He wrote a tweet, he wrote the sad reality of Galaxy. Slightly better than the horrific crypto stocks like Coin Circle, Bitgo, Gemini, but not quite an AI stock yet. If you're going to be a conglomerate with two weird business lines that don't intersect at all. You better be a good storyteller. And Galaxy is not doing that well. Their CEO only talks about macro. Their investor relations team only talks about Helios and data centers. Their public facing research team only talks about crypto. So basically my point here is don't overcomplicate things. If you want to put on a great trade like get some open AI in the private markets, buy some mag7 on the public markets, buy some copper if you want to really take a yo. Don't, don't try to get cute or creative with this trade. Keep it simple.
- [22:09]
B
Yeah, I think I generally agree with that. I do want to talk a little bit about the crypto market because it actually, for the first time in a while, has started to look pretty good. But Jonah, what's what's funny to me is that I've been, you know, I've been so burned by crypto over the last six months and not burned in like a P and L sense because I made money on it, but burned more in the hopeful sense that maybe we get a real rally this time. Maybe it's sustainable this time, maybe it'll work this time. And I do remember back in 2018, 2019 and also 2022, 2023, that we bottomed basically when literally nobody cared about it anymore. And for better or for worse, people still kind of care and people are still kind of allocated to it. So I don't know if we've reached peak despair yet, but I do have to say, at least when I go look at price action, we're starting to see things, we're starting to see things look better. I mean, we couldn't really on bitcoin, we couldn't really get below 60 on Ethereum, we had that sort of wall at 15, at 1550 that we couldn't get below and were up since then. There's some assets that have been up only for the last two months. Like Uniswap has actually done extremely well and is up 8% today. And it bottomed on June 10, actually, or June 6 is when it bottomed. And so overall the market is showing resilience in the face of stress. And so the real question obviously becomes, is crypto the right thing to buy? And the answer over the last year has been no. Even if crypto goes up, even if bitcoin goes from 60k to 80k, that's a 30% move and you get your SanDisk going up 40% in the last two weeks. Right. And so is it the right move to buy crypto? I'm starting to think that, I'm starting to think, yes, I'm starting to think that it makes sense as a trade to really, you know, maybe, maybe you buy zcash, maybe you buy some of the leaders, but it's starting to look a little bit better on a three to six month time horizon to allocate some of your portfolio there. But as I've, as I've said from, from the beginning, or not from the beginning, but over, over previous podcasts, is that my preferred way of expressing bullishness on crypto is through Robinhood specifically because Robinhood, other than prediction markets, which generate a tremendous amount of margin for Robinhood, crypto is I think 10 times more profitable on a margin basis than stocks, sorry, than options and 100 times more than stocks. And so if crypto volumes start ticking up, if crypto starts to do well, then Robinhood starts to do well. But then Robinhood also has all these other revenue lines so that if crypto go sideways, we can still go up as long as Robin Hood is crushing, as long as the equity markets are doing well. And so while you're probably not going to get as much juice out of it as if you buy like a unis swap and it goes up 50%, I think from a risk adjusted perspective, it'll go up, it'll probably outperform BTC if BTC does well, if BTC goes to 80, I see Robin Hood outperforming by, you know, probably, you're probably at 1:1 at least keeping pace. You're at 120. But to the downside, I view Robin Hood as being able to distance itself from, from crypto. So I am kind of bullish right now actually on the whole crypto ecosystem. I'll keep you guys updated on, on my thoughts there. But basically my main, my main trades right now just in terms of tickers are I bought intel when I tweeted it out. So I think at about 93 is when I got in, which obviously not as good as buying at 80 at the, the pico low, but um, but I do, I do, I did get, did get back into Intel. I bought Robinhood actually today, actually kind of the same price at 92 or 93. So I'm, I'm break even on that right now obviously because I bought it like four hours ago. But other, other than those two trades, I'm sitting, I'm sitting in indexes and I'm sitting in all of the biotech stocks that I talked about before, I'm still sitting in ArcG. I'm sitting in Blln, which has been quite a good trade. I think we're up 40% on that one and I think it's going to continue. And on XBI, I think break even on ArcG, I think up about 10, 10% on these trades. And this is, this is a, it's a very concentrated portfolio right now because I just think that, I just think you kind of just need to pick stuff and sit in it right now because the, the flows, the flows are on our side. And so I'm quite, I'm quite constructive on all these, on all these names. But honestly, you could be sitting in MU, you could be sitting in SanDisk, you could be sitting in DRAM. I think the main thing right now is to just be invested because when I try to think through what could possibly happen, maybe you get another heat up in the Iran war, nobody cares anymore. Maybe you get the rates going up. Kind of seems like bessants on top of it right now making sure that that's not going to happen. And so I think we probably get at least a lull in news through the end of the summer. Maybe it picks up back again in September and then maybe we're looking at new earnings seasons again. We'll see what's going to happen in Q3. But for now, I kind of see a month of free Runway for the last month of summer for people to allocate and I'll probably clip some profits heading into Labor Day. But other than that, I mean, if we rally a ton. But other than that, I'm pretty bullish on the complex right now.
- [27:58]
A
Yeah, me too. I like what you said. For me, my big risk on BET is Micron. I bought it basically around the time of the last pod last week, slightly before that is my trade. I'm in indices. And the biggest yo that I have on right now is Micron and I'm still adding to it. The reason why is I don't believe I, you know, this is why private wealth management as an industry is a scam, right? You have to, as an, as a personal investor, you have to literally make a decision. You have to say, am I trying to preserve and protect capital and grow it steadily just in line with or slightly ahead of inflation? Or am I trying to swing for the fences and make a lot of money? So am I trying to preserve and protect or am I trying to swing and thousand x my money and you can do both things in the same portfolio, you can say like, hey, 90% of my money I'm going to try to preserve and protect and 10% is my moonshot book. So right now my moonshine shot book is like some bitcoin and some micron, right? And the bitcoin is a longer term position. The micron I'm going to be getting out of. When it comes to a moonshot book, I do not believe in overcomplicating things. People with like 63 line items in their moonshot book are venture capitalists, right? And if you have a liquid book with a ton of a big mess in it and a bunch of different positions in your moonshot book, you're screwed. You're not going to monetize it efficiently. Efficiently. Meanwhile, in your wealth preservation book or your wealth, you know, steady appreciation inflation protection book, you should be very diversified. Diversified. But frankly, the s and P500 contains all the diversification and exposure you'll ever need, in my opinion, and what a private wealth manager will do. So for those of you who have hit it big and you're starting to consider, should I pay 1% of my net worth every year to one of these, like, slick, you know, suit and tie wearing executives who manages wealth for billionaires and stuff, the answer is if you're listening to this podcast, no, you shouldn't, right? Like if you're a professional baseball player and you need to be babysat and not accidentally, like spend all your money at a nightclub, which is literally an anecdote that I was told from my former private wealth manager who I fired. Like, you should get a private wealth manager, but if you're even halfway aware of markets and if you have an IQ above 100, you should just DIY. And the reason why is private wealth management as an industry is a scam. It should, it is literally. They don't make the distinction that I made between wealth preservation and moonshot. They try. They're obviously not going to take moonshots. That's not their job. Their job is wealth preservation. But none of them beat the s and P500 ever. And now that the 30 year treasury is trading 5.2% tax tax free, right? So that's like 7.5% or 8%s and P equivalent return. The 10 year treasury is trading 4.6 something yield 4.6% tax free. So that's like 6 or 7% before tax that you would need to earn the s and P500. There are all these incredible instruments out there to give you Your exposure to stocks and bonds, they're never going to beat it. All they're going to do is diversify you into a bunch of illiquid high fee crap that underperforms the S and P in the name of like a little more wealth preservation that you don't need. So frankly to me, like moonshot book should be clean, wealth preservation book should be, you know, like clean and concentrated in the right shit. And wealth preservation book should like indices or indices and bonds are going to do you great right now. It's a beautiful environment for that for at least another two years until the, you know, the Trump administration sunsets.
- [31:56]
B
I think it's hilarious.
- [31:57]
A
But.
- [31:59]
B
Well, I mean, wealth manager is the main reason to get a wealth manager is, as you said, if you have a sub 100 IQ and you just cannot be trusted with money, it's, you got to make it hard to access. But this is also probably something that, I mean, all of us, you know, if, if you made money quickly, if you're a crypto investor and you made money very quickly, it's very easy to spend all that money instantly. I've seen so many people that I've come up with that joined crypto with me in 2017 that actually ended up they made more money than me on the way up because, you know, they're, they're smarter or they're more savvy or they just took more risk. Whatever the reason is they made more money than me on the way up, but on the, basically they spent like half of it. I mean, it's insane. I've seen people buy multiple sports cars. I've seen people go to the club and drop $250,000 on a table in Vegas when they're worth like 10 million. And I'm like, do you, do you realize that you just like that you just spent 2.5% of your net worth?
- [32:55]
A
Were you at that party? Tell me. It was, it was. Share, share some anecdotes, man.
- [32:58]
B
It was unbelievable. I mean, honestly, 2021 crypto is just a totally different world because if you're worth 10 million at the time your thought process was I'm going to be worth 30 million in three days because this is all going to 3X. So like, what does it matter if I spend $250,000 in a night? It actually just doesn't matter. And people were throwing money left right up, down. I mean it was just actual, I
- [33:23]
A
mean, did get most I've ever spent in a night in Vegas, it was at the Marquee at the Cosmopolitan. I think I dropped 15 GS and
- [33:32]
B
I got like most you've ever spent a night. I think, I think I hit 50 once. This is a super out of touch conversation, dude.
- [33:38]
A
I know, but like, I'm obviously a lot older than you, so maybe inflation adjusted it's the same. My point is like for 15G is in 2013, I got a cool table in the front row and it was fun. Like for 250 grand, just like Diplo come over and personally hang with you? Do you have like, what happens?
- [34:02]
B
Actually, that did happen once. We got a table at Space for Peggy Goo on New Year's and Diplo and Diplo literally showed up to our table and just like sat down with the collection of the weirdest women that I've ever seen in my entire life. And some people were like, oh, that's cool that Diplo's here. And I'm like, he's kind of mooching. Like, he's kind of like, like, what are you doing here? And so after like maybe 20 minutes of him, just because we have the table right next to the. To the dj. So he was like, I bet these people, it's like, dude, if you're not going to pay, like, you can't drink your alcohol. You can't have your women drink it. Like, get out of here. So I went up to him, I'm like, hey, do you want to chip in for the bill if you're going to be here? And he looks at me and he goes, what? And I go, well, if you're not going to chip in the bill, I mean, you kind of need to. You kind of need to leave. He looked at me like, like nobody had ever talked to him this way in his entire life.
- [34:59]
A
And he's like, like, what have you launched Diplo?
- [35:04]
B
And. And a few. A few minutes later, he left. I mean, I wasn't super aggressive about it, but I was like, look, I mean, dude, it's not like we don't need you here. You're actually kind of a weirdo. But I mean, he's a nice guy. He's a nice guy.
- [35:20]
A
Crypto 2021.
- [35:22]
B
Look, I mean, this is when crypto people were on top of the world. And we're like, actually you might be a dj, but I trade shitcoins. Get real. Who's the real cool one here? Yeah, I made 15 million bucks off of like jelly bean coin. Like off of dogecoin. Off of. Yeah, exactly. Get the out of here. I mean, you just make Stuff up at that point. But I mean, that was a nightlife back then was totally different. I don't know how we got on this topic. We were talking about wealth managers.
- [35:51]
A
Yeah. You're saying if you just can't hang on to money, the spenders, you, you
- [35:55]
B
have to be careful with how you spend your money. And I mean, even myself, like, I see it kind of, it flows out the door. Now I have all these random subscriptions on my credit card. It just, they go everywhere. So like every, every month I try to do a review of all the things that I've subscribed to, and sometimes they get overwhelmed and I literally just cancel my credit card. And so, so that they stop charging me. And basically, I think at least once a year I've canceled all my credit cards to make sure that. And like reissued new numbers to make sure that my subscriptions don't keep going. And then you have to call the credit card companies and you have to say, please do not update my numbers with the automated subscriptions. Because they do that now. Because they, they say it's to be helpful, but really it's to make sure that you keep spending money on the card. These scammers, I used to work at Capital One, I know all their tricks. And I mean, look, it's, it's, it's an, it's an important thing. Money, fast money is easy. Money is fast money. That's always been my mentality. If you've, if you made it quickly, it can go quickly. And especially when you're in this business. I mean, look like my portfolio went down, I think 20% from the peak in this last. 15%. Sorry, 15% from the peak in this last drawdown. But that last, that last like 15 or that last 20%, it went up, happened in like three weeks. So it's like, you know.
- [37:15]
A
Do you know what's weird about the market right now? You know what's freaking me out about this market is the fact that it feels like the shitcoin traders have left crypto pivoted to the stock market. And now the stock market trades. Kind of like crypto used to. I was watching the insane volatility on the Leo Aschenbrenner blow up and subsequent hard bounce, thinking to myself, this is not the stock market that I remember. I don't remember bulge bracket stocks like Amazon and Microsoft literally gaining hundreds of billions of dollars of value in a day. I don't every. Everything about this market feels like 2021 in crypto. Even, you know, even private markets like watching Anthropic RIP from being worth whatever a few hundred million to a few billion to now, whatever it's worth, like basically a trillion. It's, it's starting to get a little silly. It feels like numbers don't have meaning anymore. And I wonder whether it's the result of, you know, to what you were saying earlier in the call, capital flows, whether it's just hot money flowing in like a white hot ball of capitalism, or whether there's something more fundamental here underlying it, which is like, maybe the AI boom is real. Maybe this is 1999 pets.com shit. I, I don't know. And that's what makes me feel so uneasy as, as an investor, I wrap myself in the warm blanket of knowing that Donald Trump and his ilk in DC are going to protect my bags through the end of the term. And that's been a real tried and true, tried and battle tested shield against undesirable financial outcomes. Basically, since I was at vital 11 years ago as an oil trader watching him tweet, it works. So I'm cool. But something's amiss here, you know, it just feels a little weird. So I'm going to hang on and ride whatever inning this is, 6, 7, 8 or 9. Probably pocket some more price appreciation. But come 2027, I'm really watching the political shifts as closely as I can. And if this DSA stuff accelerates, like, I know Abdul, who is technically not
- [39:40]
B
dsa, he technically calls himself a capitalist.
- [39:43]
A
Yeah, okay, but I don't buy it. I don't buy any of that. Like, Mr. Abdul, you know, just won the Michigan primary. Mom, Donnie's grocery stores are probably going to be a smash hit. Like, I'm watching this stuff closely. These people will take the stock market to the woodshed. They will, they will take the pill, right? For, for the longest time I've been preaching no politician or central banker has the balls or the mandate to unwind what's happened in capital markets, right? And these people, they'll certainly debase the currency which is good for Bitcoin over the long run, might get shanked first, but they will absolutely hike capital gains taxes, redistribute wealth, hike corporate taxes, and basically take that S&P 500 right back down to where it was five years ago.
- [40:37]
B
That's what I think people often talk about. I mean, people are focused on the politics of it, we're focused on the economics of it. And the problem is that it's a real wave. I mean, the Democratic Socialists of America are a genuine force to be reckoned with. And you can't just close your eyes and say, well, that's a small group of total radicals, because those, those small group of radicals changed the world in 1917 when the Bolsheviks rose up and dethroned the tsar. And people talk about this and people aren't. People are. I think the world is a little bit asleep at the wheel right now, but I don't think it's going to happen in 28, because my general framework for how these political pendulum swings work is that they come back to the middle and then swing out even further. So I think what we've actually had is we've probably had an extended period of time post woke right now where the culture has actually shifted towards the right. And you've seen kind of a complete cultural takeover in many ways, except for the pockets of extreme socialism and extreme leftism that obviously you see in Brooklyn and whatnot. But overall, I think Americans are really not in favor of WOKE ideology anymore in a way that they were in 2018. And so that led to the rise of Trump, that led to Trump getting reelected, obviously. Now, I think what you're going to get is I don't think either extreme side is strong enough right now to pull a victory. I think that most Americans actually probably. I know this sounds like totally crazy and contrarian, and nobody believes me when I say this, but I actually genuinely think most Americans sit in the middle now and that Rubio has the best chance of winning the presidency. Everybody, when I say that, they go, what are you talking about? The extremists are out in force. I'm like, those are actually the loud people.
- [42:38]
A
That is a contrarian take right there.
- [42:39]
B
I actually 100% believe this. So I think that Rubio is probably going to be the 2028 nominee, and that means that we get another four year. But then post Rubio, I think that we get a swing to the left, because at that point, I think what's going to happen is that wealth inequality in the United States has gotten even worse. AI has accelerated, technology has. The wealth has been captured by the top 0.1% because of the AI boom. And we get a hugely disaffected population that has not participated in this wealth creation because they don't actually have access to. To that capital. And then those people drag us to the left. Or, or you get economic populism on the right. But I think it's more likely that the left captures people. So my, my view on this is that we have. We do have some time, by the way.
- [43:29]
A
Yeah, but when you say that people haven't participated and maybe, you know, I am, I've been admittedly out of touch. I've been a finance guy for 20 years. I've, I've, you know, been a bit lucky in markets and, you know, sitting pretty, thank God for now. But like, I don't know if this is the same as the 1917 revolution that you alluded to when poor people and wealth inequality was probably similar to what it is today. You know, you had the czars in their palaces of gold and the peasants, you know, severely underperforming. But back then, like, if you were in the underclass, you were like sleeping on the floor in freezing cold Russian temperatures and your teeth were rotting out of your face. Today, global poverty levels have collapsed with crop yields and other sorts of innovations. Even people who I know here in my community who are struggling financially, their quality of life is objectively better than even the richest people 50 years ago. Right. It's hard to make ends meet, but they don't.
- [44:35]
B
But they don't believe that or they don't feel it.
- [44:38]
A
That's it. That's what I was getting to, which is that I guess it's all relative now. And the Internet has made it abundantly clear what you don't have, which is what scares me the most. Right. Because things are objectively pretty darn good for people in America. You know, we don't need to, we don't. Like, equality of opportunity has, in my opinion, almost been achieved, or it's, it's closer to being achieved than at any other point in American history. Why do we need to suddenly pivot to equality of outcome? That's just a recipe, a time tested recipe for societal collapse. Yeah, I'm, I'm, I'm struggling a bit. I'm scratching my head. I don't understand, I don't understand this political movement, but it seems to be rising so quick. Like the Democratic Party, you know, just political opinions aside, they were really searching for a message and a leader after the 2024 loss to Donald Trump. Right. Like they were rudderless and Zoran Mamdani basically stepped up to the plate and hit it out of the park. Like that is the, that is the winning message now. And that message is taking over basically 50% of the American political discourse at the top levels in Washington, basically, and in the halls of power around the country, not necessarily on Main street or where people like you said are mostly moderate, but in the pilot seat of that political engine. That is the ideology that seems to resonate most with people. And so, you know, in an era of polarization, you know, back to the George Soros saying, like you see a bubble, you kind of like run towards it, right? Polarization is great while, while it creates a bubble that you can ride, but that, you know, bubbles do pop. So now it's the finally, for the first time since this rally started in 2008, there's like a significant risk emerge, downside risk emerging that we need to care about, which is the lack of will to continue propelling the bull market.
- [46:56]
B
And Lord knows that we have used up a lot of that. Well, I want to end on something fun. So SpaceX earnings, SpaceX actually beat earnings by a billion dollars. I think analysts had them at 6.8, they came in at 7.8 billion. So look, they're making money, Jonah. They're making money. And not only that, they actually just crashed a rocket into the moon. Like how many companies do you know that can crash things into the moon? Not many.
- [47:27]
A
Not many.
- [47:27]
B
And so if you can crash things into the moon, it's possible that your stock price might go to the moon.
- [47:32]
A
It's got to be. That crash has got to be worth at least $1 trillion, right?
- [47:36]
B
That is like, you have to think past the crash, think past the headline. The fact that they were able to crash anything into the moon is, is really the key here. And so with all that being said, I'm super bullish on SpaceX, even though we got unlocks coming up because who else is even targeting the moon?
- [47:56]
A
I'm not bullish on SpaceX. Not financial advice. Don't touch SpaceX with a ten foot pole. Why? You just saw what a little sprinkling of unlocks did into the price. It got daddied with. Wait until we have the, the deluge, the, the freaking Hurricane Katrina of, of selling that's about to hit in whatever ipo t plus 6 months.
- [48:25]
B
Oh my freaking let the supply unlock tomorrow and I think we run for a month. Like buy, buy the supply unlock. I think we run for a month. That's my, that's my take. And that's just me looking at the chart and thinking to myself, it looks pretty good. And completely ignoring the fundamentals because often that actually does work.
- [48:47]
A
You're probably right. I, I just don't want to touch it because I don't want to think about it. I got my moonshot book. I want to ride that micron into the stratosphere. I don't want to ride SpaceX into unlocks.
- [48:57]
B
You know what's done extremely well in the last, like, 20 minutes since we started the stream is Ethereum. Ethereum is up. Ethereum is up 1.25% in the last 20 minutes. It's actually looking. I mean, Bitcoin and Ethereum are looking like somebody's buying. I don't know who, I don't know if it's Tom Lee, I don't know if it's Saylor, but somebody's buying. People are buying crypto again. And more importantly, people aren't selling. Now, I'll just take it back to the tweet that I tweeted out yesterday. I don't think that any of these rallies are going to be sustainable. Like, I'm a seller of. I'm a seller of 75, I'm a seller of 80 on BTC. But that doesn't mean that we can't get back there, doesn't mean that we can't trade 82. But I'm, I'm. Until. Until equity markets really calm down, I just. I just think that they're better places to put. To put your money. I mean, you know, buy. Buy some. Buy some Robin Hood, buy some Intel. I mean, if you want to take a fly, if you, like, have crypto already, like, I wouldn't necessarily sell it, especially if you're going to incur capital gains. But I don't know, like, maybe eth is. Maybe eth is good for a trade back to 2500.
- [50:09]
A
Ether's a random number generator. Honestly, it's actually kind of like a
- [50:12]
B
good R. Like from like a pure trading perspective. If you're just comfortable, more comfortable trading crypto, it's pretty good because you can stop out below 1800, target 21. So that's actually like a pretty good trade from my perspective. It's, you know, 2, 2, 2 1. Risk, reward. Eth, like structure is looking good overall. Sentiment is, is really. Is really against it. So, you know, if, if clarity does pass, we probably go there in a straight line. So it's like a good. Probably a good trade.
- [50:42]
A
I just actually used ETH recently for the first time in, like months, I bought an nft. What you buy, it's called Hypertopographics. I got the physical too. It's going to be behind me in my office here soon because this white background is too boring. But I actually used the ETH mainnet. It was fast and cheap, I guess. Hypertopographics.
- [51:04]
B
Shout out to hypertopographics.
- [51:07]
A
Yeah, basically it's a collab between an AI artist and an ultra famous photographer named Richard Burtynsky who's been doing amazing stuff for decades. It's basically commodities art, but AI, it's like photographs of different types of commodities, installations sort of like stitched together and I got hypertopographics number one. I'm very excited. Hopefully it'll be behind me when we record next week. But yeah, it came with an nft, which I don't care about. I want the physical. And the NFT arrived over the old Ethereum, so it felt good to get back into NFTs.
- [51:48]
B
Hell yeah, we love it. I think I got. I gotta run because it's 2pm here, but we had a. We had a great stream. This is fun.
- [51:54]
A
This is awesome. Great talking to you Avi.
- [51:56]
B
As always, Jonah. See you later. Stay good.
- [52:00]
A
You too.
- [52:10]
B
Foreign.
- [52:17]
A
Nothing said on the Thousand X podcast is a recommendation to buy or sell any investments or products. This podcast is for informational purposes only and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of One KX Media. Our hosts, guests and the One KX team may hold positions in the company's funds or projects discussed.