The Compound and Friends Podcast

Episode: The Bull Market in Electricity
Date: August 29, 2025
Host: Downtown Josh Brown, Michael Batnick
Guest: Jan Van Eck (CEO, VanEck)

Episode Overview

This episode explores the intersection of energy, innovation, and investment markets, focusing on the surging demand in electricity fueled by technology—including AI and data centers—and its far-reaching economic impacts. Jan Van Eck, CEO of VanEck, joins Josh Brown and Michael Batnick to dig deep on the legacy and direction of his firm, major trends in ETFs, the implications of AI infrastructure, the bull market in utilities and electricity, and the evolving roles of gold, private equity, and crypto in modern portfolios.

Key Discussion Points & Insights

1. VanEck’s 70-Year Legacy & Innovating for the Future (10:36 – 15:02)

• Jan Van Eck recounts VanEck’s historic approach:
  • Founded in 1955, emphasizing U.S. investors gaining access to international opportunities.
  • Notable for launching the first U.S. gold fund in 1968 as a hedge against inflation.
• Quote:

  “My father believed investors deserved more than what the mainstream was offering... The world is constantly changing and by understanding those shifts early, you could create real opportunity for clients.” – Jan Van Eck (11:58)

• Current ETF Suite:
  • VanEck now has 70 ETFs, following the ethos of finding investable, new market categories—“not just throwing stuff at the wall.”
  • Emphasis on thematic and specialized funds.

2. ETFs: Industry Maturation, Consolidation, and Innovation (03:13 – 06:22)

• ETF industry has exploded in size and number of issuers:
  • “There are now more ETFs than stocks. You’d think consolidation would have happened by now, but it hasn’t.” – Josh Brown (05:10)
• Barriers to entry have dropped:
  • Lower cost and easier tech for fund management. New players keep coming, even as established brands avoid levered/inverse ETFs.
• Acquisitions and M&A:
  • Acquisitions rarely happen because established firms “know everyone,” and margins remain low.
• Category innovation—example of J.P. Morgan:
  • Succeeded in income strategy ETFs, especially covered call products.
  • “They helped found a category, which is what you really want to do as an ETF issuer.” – Jan Van Eck (06:55)

3. Nvidia & the Innovation ‘Super-Cycle’ (16:05 – 26:51)

• Nvidia’s explosive growth:
  • Data Center revenue up 56% YoY to $41 billion, with no China revenue included (17:39–18:22).
  • Analysts’ expectations have caught up, but further upside may come from sectors like robotics and government/Ai infrastructure spending, particularly from the Middle East (21:41).
• Tech sector scale and labor implications:
  • Tech “mega caps” like Microsoft, Google, and Meta are growing revenue with flat headcount—“insane profit generators” (25:00).
  • “If you look at some of the charts we have—these large cap companies, they’re not hiring any more workers and their revenue is going up. These are going to be insane profit generators.” – Jan Van Eck (24:28)
• Winner-take-all dynamics:
  • AI development will compound at companies with more data and scale, making it hard for vertical/boutique players to compete.
  • “It’s another winner-take-all world. Exactly like social media.” – Jan Van Eck (27:16–27:19)

4. The Bull Market in Electricity: Utility Stocks, Inflation, and AI (27:22 – 34:03)

• Rising demand for electricity due to AI and data centers:
  • Electricity costs are now outpacing CPI; a trend poised to continue.
  • “Electrification is another decade-long trend—there’s no way electricity prices are staying flat.” – Jan Van Eck (28:03)
• Regressive impact on low-income households:
  • Electricity costs now comprise 10–20% of income for many low-income people.
  • “If you’re in Baltimore or New York, it’s 10 or 20% of your income... All your income is your electricity cost.” – Jan Van Eck (28:48)
• Utility stock re-rating:
  • Utilities are trading at record-high multiples because of increasing capex needs and data center demand.
• Investment implications:
  • VanEck nuclear ETF (NLR) is up 45% this year, reflecting a bipartisan, global embrace of nuclear energy (32:33).
  • “It’s kind of richly valued. I wouldn’t sell it.” – Jan Van Eck (32:36)

5. Gold, Dollar Hedges, and Deficit Risks (35:27 – 43:15)

• Gold returns as a global hedge:
  • Despite flows out of GDX (the gold miners ETF), Jan sees a multi-year bull trend in gold demand, especially from emerging markets.
  • “The world wants a hedge against the dollar. What’s the second-best currency in the world? It’s gold.” – Jan Van Eck (37:01)
  • For the first time since 1996, foreign central banks hold more gold than U.S. Treasuries (40:33).
• Deficit concerns:
  • U.S. budget deficit is at historic highs for a peacetime, low-unemployment period—posing a “risk you have to watch.”
  • “If you’re building a portfolio, you want to own the hedges… gold and bitcoin have worked out super well.” – Jan Van Eck (36:35)
• Social Security and default risk:
  • Warns U.S. may effectively “default” on its obligations by cutting Social Security payments in 2033, absent reform—a rare risk historically sourced from D.C., not Wall Street (39:01–39:11).

6. Private Markets: Alternative Asset Managers & Access (43:57 – 52:56)

• Publicly-traded PE managers outperforming private equity funds:
  • “Why be an LP or investor in the fund when you could be a GP by owning shares of the sponsor?” – Michael Batnick (44:43)
  • VanEck’s GPZ ETF offers a way to access these alternative asset manager returns (45:56).
• Private equity and democratization:
  • Most investors can't access pre-IPO or venture equity in hot companies like OpenAI; late-stage access is becoming more accepted.
  • “The closer you are to these founders, the more likelihood you are to have access [to early funding].” – Josh Brown (51:17)
  • “If you want access, go work there.” – Michael Batnick (51:52)

7. Crypto, Blockchain, and Stablecoins (52:56 – 57:57)

• Bitcoin’s outperformance:
  • On all timeframes, Bitcoin vastly outperformed the S&P 500 (55:11).
  • “It’s so common sense: digital gold... people have demand for that kind of stuff, and it hit escape velocity.” – Jan Van Eck (55:41)
• Generational, global aspects:
  • Younger generations adopt crypto more widely; central banks in the Middle East accumulate via mining.
• Stablecoins as transformative financial technology:
  • “The stablecoin bill is the third most important piece of bank legislation in U.S. history… it enables tech companies to get into payments without being a bank.” – Jan Van Eck (57:11)
  • This will allow financial apps to process payments, store value, and move money outside traditional bank rails.

8. Tokenization and the Future of Securities (58:10 – 61:16)

• Corporate pushback on tokenized shares:
  • Direct tokenization (e.g., by Robinhood) faces resistance from private company issuers who want to control their shareholder base.
• **Pathways to more liquid, tokenized security markets are seen as “inevitable,” paralleling earlier ADR development, but transparency and investor protections remain open questions.
  • “It’s just a tug of war and I don’t know how it’s going to play out.” – Jan Van Eck (60:29)

9. Looking Forward: VanEck’s Direction and Personal Futures (63:40 – end)

• VanEck will explore private market investing, especially via interval funds.
• Personal notes:
  • Jan is looking forward to college football (USC) and hockey season (NY Islanders), and advocates for preventive health screening via a calcium CT test (65:02).
• Memorable banter about Oasis concerts and family obligations closes the show.

Notable Quotes & Memorable Moments

• On AI and market structure:

  "History is being disrupted by Nvidia... Everything we thought we knew about the laws and how quickly things can grow—tear it up." – Josh Brown (16:05)

• On inflation and electricity:

  “If electrification is a decade long trend, there’s no way electricity prices stay flat.” – Jan Van Eck (28:03)

• On gold and multi-polar world:

  “The world wants a hedge against the dollar… what’s the second-best currency in the world? It’s gold, not the yen, not the euro.” – Jan Van Eck (37:01)

• On private equity access:

  “If you want to have shares of an exciting pre-IPO startup, go work there. Second easiest way: be the college roommate of the founder.” – Michael Batnick (51:52)

• On stablecoins’ policy impact:

  “The stablecoin bill is the third most important piece of banking legislation in US history… it enables tech companies to get into payments without being a bank.” – Jan Van Eck (57:11)

Timestamps for Important Segments

| Segment | Start Time | |-------------------------------------------------|-------------| | Opening & VanEck Firm History | 10:36 | | ETF Industry Dynamics & M&A | 03:13 | | Nvidia, AI, and Mega Cap Disruption | 16:05 | | Utilities, Electricity, Inflation | 27:22 | | Gold, Dollar Hedges, and Global Reserves | 35:27 | | Private Equity Managers & Public Access | 43:57 | | Crypto, Bitcoin, and Stablecoins | 52:56 | | Tokenizing Securities & Corporate Resistance | 58:10 | | VanEck’s Future & Closing Thoughts | 63:40 |

Final Thoughts

This episode delivers a comprehensive discussion on the profound changes facing investors—from the risks and rewards in utilities, private alternatives, and crypto, to the still-unfolding impacts of AI-driven energy demand and innovations in financial technology. With a balance of historical awareness and focus on future opportunities, Jan Van Eck and hosts provide both thought leadership and actionable insights for navigating rapidly evolving markets.