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The Iced Coffee Hour
Money Expert: A $37 Trillion Market Reset Is Coming - Do This Now! | Chris Camillo
02:20:52
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- [00:02]
Chris
This episode is brought to you by Netflix from the creator of Homeland. Claire Danes and Matthew Rhys star in the new Netflix series the Beast in.
- [00:09]
Graham
Me as ruthless rivals whose shared darkness.
- [00:12]
Chris
Will set them on a collision course with fatal consequences. The Beast in Me is a riveting.
- [00:17]
Graham
Psychological cat and mouse story about guilt, justice, and doubt.
- [00:21]
Chris
You will not want to miss this.
- [00:23]
Graham
The Beast in Me is now playing only on Netflix.
- [00:28]
Chris
This is the biggest thing that we will likely ever see in our lives.
- [00:31]
Graham
The first documented case of an AI orchestrated cyber attack.
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Chris
AI has learned to bypass commands when.
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Graham
Asked to shut itself down.
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Chris
There's so much doom around this concept of AI and it just drives me absolutely bonkers. This is too big to fail. It already is.
- [00:51]
Graham
I feel like those are famous last words. Too big to fail.
- [00:55]
Chris
But it was last time and look how it got saved. You probably saw the Michael Burry stuff, right? People are freaking out about the AI infrastructure being over leveraged. This is going to be, I think, the biggest thing to ever happen to humanity.
- [01:15]
Graham
Chris, thank you so much for coming back on the Iced Coffee Hour. Really appreciate it. What we found amazing is that the last few times you've been on the podcast, you've been 100% correct. We had you on and you talked about buying into the S&P 500. You predicted the best time to buy and since then it's been up 35%. You predicted the best time to buy Robinhood, and since then it's been up over 200%. You predicted it was the best time to buy energy stocks before they went up. Since then, those are up 1 to 200%. And you predicted AI and robotics over the last year and have also been correct. It also seems like every time we film with you, the market's going down, you give us some insights and then we look back six months later and we're like, oh my gosh, he was completely correct. It's a lot of pressure for you. So what's going on today?
- [01:59]
Chris
Yes, same exact thing, just. Just different, slightly different storyline each time, right? So we, we have this boom, bust sentiment cycle around AI. I think primarily because people just don't really understand AI. Like, it's just big, huge, scary thing and so many people are talking about it being a bubble, right? And for investors, the market's gone up quite a bit. So it doesn't take a lot to shake it. Remember back during Deep Seek, you know, Deep Seek was going to completely bust up the entire AI economics model, right? AI was over because of Deep Seek. I think we lost something Like a trillion dollars of value. Because of a misunderstanding of how models work, Deep Seek ended up being a reasoning mod. And shortly after people realize that reasoning models take like a hundred to a thousand x the amount of inference to actually use. So you know, even if you are able to come up with an A model cheaper, the amount of compute necessary to actually utilize that model is massively more than anything we've ever seen, you know, up to that date. So, you know, the market just didn't understand it. And I think I see more of that happening today than ever before in my entire life investing where investors are just not willing to go deep and gain conviction. Like actually do the hard work it takes to get conviction so that when things like this happen they don't get freaked out.
- [03:43]
Jack
But do you think anything could be different this time because the market was at an all time high and then on the Fear and Greed index it hit extreme fear for the first time ever.
- [03:52]
Graham
Yeah. You have two vastly different scenarios. Like when we had you on initially and that was the first, like tariff scare, I asked what should the average person do? And you said get a second job, do everything you can to buy risk assets. You also said this is the dream scenario for every investor. And again you couldn't have been more correct this time however, the markets hit an all time high at the same time that the Fear and greed index hit extreme fear. And you have these two convergences that, that just we don't see the market doing well at the same time. That people are very pessimistic.
- [04:26]
Chris
Yeah, I mean like nobody can predict what the market's going to do over a short period of time and that's not what we're really focused on. Right. Like when I made that comment was like I feel that people should be doing that for the next few years, you know, not just the next few weeks. So like I said, they would have.
- [04:45]
Jack
Been pretty well off though if they did it for the next few weeks.
- [04:47]
Chris
Yeah, I mean you just have to keep doing it. Like this is the biggest thing that we will likely ever see in our life, period. End of story. Right. Like there's so much doom around this concept of AI and it just drives me absolutely bonkers. Let's just talk about like what people are freaking out about right now. Like, like right now you probably saw the Michael Burry stuff, right? So like right now people are freaking out about the AI infrastructure companies being over leveraged and over building and not doing proper accounting because the chips they're saying are going to last and be valuable for five or six years, when in reality, people like Michael Burry are saying they're only going to be valuable for two or three years. Right. So he's saying once the world realizes that the economic models are going to fall apart, they're overspending on things that won't generate enough value to generate a return for their cost, and that this will be similar to the mortgage cris crisis. Right. And that he's like seeding that in everyone's heads. So I'll say this. Even if he's right, it doesn't matter. So even if this one cycle that we're in right now is maybe overspending on compute, that isn't going to last as long as the companies say it's going to last in terms of being valuable and generating income, that doesn't matter to me because that's just this one little mini cycle in the AI story that's not changing the much more important larger, which is we just, we are inventing intelligence. And over the next 20 to 40 years, we are going to make all of industry meaningfully more productive, meaningfully more efficient. And when that happens, everyone wins. When that happens, all companies become more profitable. Right. I don't want to use the word. All right? Like, industry generally becomes more profitable. We're able to climb out of this kind of cycle of scarcity that we've been living in for so long, where more people will be able to get more things that will start to accelerate. And if that happens, you have to be invested in productive assets, period. Like, end of story. Like, like if you have conviction in what I just said, these bumps along the road, whether it's deep seek or whether it's AGI is going to take 15 years as opposed to two years. Or, you know, this, this current generation of chips won't be as productive as people think they're going to be. That stuff really doesn't matter.
- [07:25]
Jack
Okay, so you say that we're not able to predict the short term and we can predict the long term, but at the same time, you're also posting screenshots of your trading account on Schwab of like, call options and like, stuff that isn't super far out in expiration date. For those that don't know, a call option is basically you're predicting a price will go above a different price by a certain date. And that is kind of like predicting the short term. So how do you know when to like, try to predict the short term with your call options? Or is that kind of. You just see that as a gamble, because I see you making millions of dollars.
- [07:58]
Chris
Well, they don't always work. This is a cycle that repeats itself over and over again. Like I said, it happened with Deep Seek, it happened with AGI maybe being further away than we thought it was. Now it's the compute. It's always going to be something else. But the cycles don't last that long. And I'm making bets that over the course of the next few months that it will be a rinse and repeat and these companies will recover because the risk reward of not being invested in these companies is just. It's asymmetric. Right. So could there be some downside? Yes, absolutely. But missing out on the upside of the biggest technological cycle that we've ever seen in the history of the world. Right. That's an asymmetric risk. And I firmly believe that both institutional and retail investors will ultimately decide that they have to be part of that, and these stocks will recover.
- [08:59]
Graham
So what happened to Michael Burry closing down his fund? Why did he do that?
- [09:04]
Chris
Well, listen, Michael Burry seems to have conviction that we're in a bubble, that things have gotten overinflated. And maybe he's partially right, maybe he's partially right, but he's a weird guy. First of all, let's just take a step back. Remember, he obsessed over the mortgage bubble for years and years, and he was really early. I think the difference between his historic call on the mortgage collapse and now is that the mortgage industry was somewhat insular. Like, he found a problem that once exposed, theoretically, there is no way to get out of it. Whereas with this AI super cycle that we're in and we're still on the very early innings, I'm not even sure we started the first inning. That's how early we are. There's so many factors and it's so large that I think he's. He's in over his skis with this one. Even if he's right about one piece of it, this is very different from. From the mortgage sector. Right. Like, this is the entire world innovating in a way that we've never seen it innovate before.
- [10:16]
Graham
Part of it reminds me of Isaac Newton. His investing. Did you see this chart? Was early in on something and sold it for a really big profit. And his buddies got in a little higher than him and it went up even more. And he says, I'm not touching that. That's. That's too high. It keeps going up. And he says, no, I'm not. I'm not doing that it keeps going up even more. He says, you know what? Maybe I'm wrong and maybe I should be investing. And then he buys and it goes up even more. And he's like, oh, wow. Yeah, I'm glad I didn't miss out. And then the whole thing collapses, and it shows. He sells at the bottom. Like, he lost his whole fortune doing this.
- [10:52]
Chris
I think the core issue is people overthink things, right? So, like, we're all. We all have these phones in front of us. I think I've talked to you guys about this in the past. You know, one of my biggest investments ever was on Apple early days, iPhone. When this phone came out, there were a million things to kind of talk the phone down, right? To say Apple's getting overinflated when you experience an iPhone for the first time. When I've held an iPhone one in my hand, I was like, this is maybe bigger than anything that's ever happened in my life. And this might. Will likely end up creating the biggest company we've ever seen. So it's like, that's all you need to know. Game over. Like, you don't need to worry about all the little things. Did he do this thing right? Is the connection good? Did he get a good deal with AT&T? That stuff is, like, nothing compared to the overreaching story that this is the most transformative piece of technology that has ever been invented in my lifetime and would completely restructure the way that we live our lives. And that the chokehold that Apple would have on all of us. Right? It was just. It's hard to wrap your head around that and the financial opportunity for that company. So I think about AI right now and what's happening. It's so much larger than this moment. Like that. No, nothing worries me. No blip in the system worries me. No market correction worries me. They're all opportunities. To me, every single dip, every single market bump is just an opportunity for me.
- [12:24]
Jack
When I checked my portfolio this morning, today is. What is today?
- [12:27]
Graham
Thursday.
- [12:28]
Jack
Today's Thursday. It was a horrible day in the market. You guys can go back and probably see it since we're posting this in a couple of days, and I saw my portfolio down a bunch. I'm, like, freaking out a little bit. I'm like, oh, okay, how am I going to make this up? Okay, I got to make sure the podcast is good for this Sunday. Got to make the money back. Then you walk in and you were saying, oh, yeah, this morning, like, you know, I bought. I bought a little bit this morning too. And you bought some Bloom Energy. Graham asks like, oh, how much did you buy? And you're like a million bucks, casually.
- [12:54]
Graham
And then I'm thinking, okay, that's gotta be okay. Margin. Is that like. No, just a million bucks.
- [12:59]
Chris
But it's on margin. Yes.
- [13:01]
Jack
So you pay for it on margin, but it's not leveraged Bloom Energy. It's not options.
- [13:05]
Chris
I bought options too, but yeah, I bought a million, so equity.
- [13:10]
Jack
So let's talk about this morning when you open up your portfolio for the first time. How much were you down today?
- [13:15]
Chris
A few million dollars.
- [13:17]
Jack
And what, what was the internal dialogue? So if you have people watching where their portfolio is going up or it's going down, what do you tell yourself when you, when you wake up and you see you're down a few million dollars?
- [13:29]
Chris
Why? That's all I care about is the why. I don't care that the market went down, I care about why it went down. If there's new information, if there's something that I didn't know about yesterday that I need to learn about today, that is a meaningful risk to my assets, then I want to know about that and I'll trade on that. And so I immediately try to figure out what's going on. It's the Michael Burry stuff, you know, to some extent it was SoftBank yesterday selling all their Nvidia, although they're just selling it because they have no cash and they need to make a $22 billion investment in OAI before the end of the year. So that didn't concern me. There's a few other little things. Specifically on Bloom Energy. I contacted my Bloom Energy analyst who's one of my best friends, and I said, hey, I don't see anything on Bloom Energy, do you? I just wanna make sure I'm not missing anything. And he's like, no, I don't either. So I just bought more. Again, if your thesis doesn't change and the market takes a downturn, that's an opportunity, right? Like, as long as your thesis doesn't change, as long as the underlying information doesn't meaningfully change, it's just an opportunity.
- [14:44]
Graham
But at what point do you get concerned? Let's just say everything drops by 50% for no real reason, it just drops. Couldn't consumer sentiment be a reason in itself that the market's going down and that becomes self fulfilling and then more people start selling and more people start selling and more.
- [15:00]
Chris
I mean, it doesn't concern me. It probably excites me more than Anything else. If that happens, if, if the reason for it happening is what you just laid out, which is sentiment and fear, that excites me. If the reason is because we found something out that totally disrupts the thesis that I've been working on for three and a half years about. That's a problem. That's something I want to know about. So no, guys, I've been through this. So I was a kid, but I lived through the 87 crash. My family was in, you know, the finance sector. I was living in New York at the time. Like I've been through it in, in 2000, been through in 2008. I mean, this is to be expected. It's actually so weird if we don't have days like today. If we don't have days like today. That's what concerns me. I'm like, wait a second. Is like the information that I know, does everybody already have, they already accepted that, meaning there's no meaningful degree of arbitrage, information arbitrage between me and the rest of the world. Right. I like it when people are coming out with concerns and fear and you know, the polar opposite kind of thesis as mine, as long as I believe mine is stronger.
- [16:20]
Graham
But that assumes that the market is somewhat logical and the market can be very irrational and very emotional. Where does that play in? How long could the market be trading on emotions for before eventually logic comes in?
- [16:32]
Chris
Logic will always win. Historically, the market trades off of emotions for very short periods of times. Days, weeks, maybe months. Look at every market crash, look at the recoveries on every market crash pretty much during our lifetime. It's very quick. So is whenever it's a fear based drop or just confusion. The market generally recovers very quickly.
- [17:01]
Jack
How do some of these companies justify their valuations when they're trading at crazy PE ratios that we haven't seen in a super long time? Sure, you could say the company is, is good, but it seems like there's a lot of emotions in there driving that price up and it's sustaining it.
- [17:15]
Chris
Yeah, I mean, so company by company is different. I'm right now I'm talking about the AI story. Could you make a case that Palantir is overvalued? Absolutely. You can, you can definitely make a case. Listen, I exited almost all my Palantir, you know, over the course of this summer on a case by case basis. You can make, yeah, they could be overvalued, but the stocks that I'm invested in I don't think are overvalued. So I'm not concerned, right. Like, you know what I'm focused on? I'm focused on companies like Amazon, I'm focused on companies like Bloom Energy that I think are beautifully positioned to be one of the primary power suppliers for data centers around the world and compute over the next five to eight years. I'm not super concerned with the companies I'm invested in.
- [18:00]
Graham
Really quick. Every business is probably asking themselves the question, how do we make AI work for us? Because the possibilities are endless. But guessing is too risky. And sitting on the sidelines isn't an option either. Because here's the truth. If you're not doing it, your competitors are.
- [18:17]
Jack
And that's exactly where NetSuite by Oracle comes in. It's the number one AI Cloud ERP, trusted by over 43,000 businesses to manage everything from inventory, financials, commerce, HR and CRM all in one unified system. And when all of your data lives in one place, your AI gets smarter. And it doesn't just guess, it knows. NetSuite intelligently automates routine tasks, delivers real time insights and helps you make fast, confident decisions that actually drive growth.
- [18:43]
Graham
And this isn't some bolt on tool. It's AI that's built directly into the system that runs your business, helping you cut costs, improve accuracy and get ahead of the competition.
- [18:51]
Jack
Whether your business is making millions or hundreds of millions, NetSuite gives you the visibility and control you need to keep moving forward.
- [18:58]
Graham
And right now, you can get our free business guide demystifying AI for free at netsuite.com ICED Again, the guide is free for you at netsuite.com ICed with the link down below in the description. Again, that is netsuite.com ICed. Who do you think are going to be the biggest winners and losers in the AI race?
- [19:18]
Chris
Well, it's early and we don't fully know that yet. So I think one of the big issues is as investors, we're always trying to answer all the questions. We're always trying to figure out everything all the time at the same time. And that's just, we're just not capable of doing that. To be a great investor, you just have to figure out one or two things. So if you can find one or two companies that you have conviction in, that's all that really matters. You know, for most of the last year, the companies I had conviction in were companies like Robinhood, Palantir and Nvidia. Right? So as you know, I had levered positions in Nvidia every week for like 14 weeks in a row during, during the recovery after the tariffs, you know, going forward, I still have conviction in Nvidia. I absolutely now have less conviction in Palantir because the world knows what I knew about Palantir a year ago. The world now finally knows what I knew about Robin Hood a year ago. Right. I do think Robin Hood still has legs to continue to surprise people the next two to five years. So I'm still in Robinhood. But when we think about this kind of next phase of the cycle, there are 60 or 70 AI companies and I don't have opinions on most of them. Okay. Like there's no way for me to get strong conviction around dozens and dozens of companies. I feel really good about Amazon. Okay. I feel really good about Bloom Energy. I still feel really good about Nvidia. You know, why do I feel good about Amazon? Long term, it's really simple. Regardless of who the big winners are in the early stages of AI, who are ultimate, who's ultimately one of the biggest winners, Right. Ultimately it's hard to make a case that Amazon isn't one of the biggest winners long term from this massive cycle of intelligence and automation and robotics. They spend spent 20 years building out an obscene amount of infrastructure around the world, making investments that no other company would ever even consider making. That didn't make any sense. Because you're making these investments in a very low margin business. Because everything that Amazon does on the consumer side, basically the world's largest retailer of stuff to humans, is extremely low margin. Why is it low margin? Because it takes hundreds and hundreds of thousands of expensive humans to basically move these products from one place to another. The systems are extremely expensive. Right. And so now that we've developed this intelligence and you know, the other half of my world is like this concept of us having an infinite labor machine. Over the next few decades, once embodied AI comes to fruition, which is robots, which is inevitable. It's just, we can debate the timelines, but it's inevitable. Amazon's the biggest winner. Yeah. So like I don't care what happens in the next few weeks to few months with Amazon, if it drops, I'll just buy more.
- [22:24]
Graham
Yeah, Amazon's been incredible. I went to Home Depot the other night to find an extension cord. I wanted to find a 15 foot extension cord outdoors and I went to Home Depot and I looked at the prices and then went to Amazon and then I realized I could buy the same thing at Amazon for half the price and it would arrive the next morning between like 6 and 8 o' clock am. That's insane. So I Just went and bought it on Amazon instead. The other thing that's interesting with Amazon is their movies that you could watch and their shows that you could watch on Amazon, which are incredible. Like Beast Games was through Amazon. And so them getting in that media side too, I think is incredible. Not a lot of people think about that.
- [23:07]
Chris
It's fun, but it's not what I really care about. What I really care about is the, the infrastructure play that Amazon invested in over the last couple decades that once they're able to properly, you know, kind of tweak the efficiencies in that infrastructure with automation and robotics, which is inevitable, I think Amazon is going to be unstoppable. Meaning, like, I don't think you'll be able to compete with Amazon in terms of your ability to get a product from here to there.
- [23:41]
Jack
What about the growth possibility, though? Amazon is already such a massive company that if they doubled, they would be the largest company. And if they doubled like you, it would be hard, I feel like, to make a substantial return on Amazon.
- [23:55]
Chris
Not when you use leverage, right? So.
- [24:00]
Jack
If you're using leverage, they go up 10%. You have like weekly calls on it, then you can.
- [24:05]
Chris
Yeah, yeah, yeah. I mean, it doesn't have to be weekly calls, right? I mean, it could be monthly calls. It could be just, just investing on leverage. Like that's what I do. So I take big swings when I have high conviction in a thesis.
- [24:21]
Jack
So I'm curious, what does your portfolio then look like right now? You had Dave, the other host of Dumb Money Live, say that your portfolio is just insanity. And I'm curious, you know, like, what are the main stocks that you're super bullish on and the swings that you see.
- [24:38]
Chris
Listen, I'm going to stay super bullish on Robinhood for a long time. I don't see that position changing anytime soon. I'm still bullish on Nvidia, but I'm not levered like I used to be. That was insane. What I was doing with Nvidia a few months ago was actually.
- [24:53]
Graham
What were you doing?
- [24:54]
Chris
Actually kept me up at night. I mean, I, I, I had, I had 10% of my portfolio LE invested in weekly Nvidia options every single week, sometimes 15% of my entire liquid net worth in options that if it just moves a dollar the wrong direction in the next few days, it disappears. But I had pretty good conviction that every week it was going to move in the right direction. And except for like, I don't know, maybe one of those weeks, maybe two, I, I hit it every week.
- [25:28]
Graham
How is that not gambling?
- [25:30]
Chris
Gamble. It's not gambling. It's the opposite of gambling. Every single one of those trades was based on a thesis that was deeply researched. Right. So it was the, hey, I see who's flying over to the UAE next week. I know they have these meetings. I know exactly what those meetings are going to be about. Like, it's not hard to like anticipate what the news flow is going to be once they arrive in the uae, once they have those conversations, once they talk about the data centers, once the news starts to put together the pieces about who's going to be the biggest beneficiary. Oh my gosh. Now we have this thing called sovereign AI and all the stuff that Jensen was talking about is actually, actually becoming real. I mean every week there was a different story. So I wasn't just randomly throwing my money in Nvidia calls that week. I had a thesis related to a very specific piece of information that I felt was going to get dispersed Right. That week. And for the most part it did and it worked.
- [26:28]
Jack
So the way that you kind of balance out your finances is very interesting. You have your trading account that you try to build up to a certain amount, like low eight figures and then from that point you take a chunk out at the end of the year, put it in the foundation.
- [26:42]
Graham
Yeah.
- [26:42]
Jack
And so what would happen then if your primary trading account, you were wrong on some of these things. Like how would you build that back up? Like do you, Because I don't think you necessarily have like an active source of income.
- [26:54]
Chris
I do have active sources. I remember I have a few restaurants. True, yeah. Volatile source of income. But you were just, you were, you.
- [27:01]
Jack
Were lamenting recently, I think on X about how hard it is to be successful in the restaurant.
- [27:06]
Chris
It's the hardest, it's the worst. We are successful, but we're an anomaly. I do have another business, as you guys know, Collecticon, which is the largest, you know, Pokemon trade show in the world. And that's actually an obscene cash flowing business and I love it. So no, I, I, I do have income, but for the most part you're right. Like I generate as much I as I can from my trading account and then I take a big chunk of it and put in my foundation every year. And I have gotten a little ag. Listen, Dave has known me since I was 13, seen me go through these cycles and I've gotten in some very squirrely situations in the past where he's had to lend me money.
- [27:44]
Jack
So he's had to lend you money.
- [27:46]
Chris
Oh, yeah, yeah.
- [27:46]
Jack
How did that conversation go about, I.
- [27:48]
Chris
Mean, we were, we were younger and it wasn't a lot of money, but yeah, I mean, I just.
- [27:52]
Graham
A few hundred thousand dollars last week.
- [27:54]
Chris
I, I, listen, I, I don't know if I told you guys this before, but, you know, when I post college, you know, I, I had taken cash advances off of every single credit card that I had. Like five or six credit cards. Cash advances. I use those cash advances to buy options in one stock that went bad and I went broke. I lost every dollar to my name and I was in debt.
- [28:18]
Jack
How old were you?
- [28:18]
Chris
Early 20s.
- [28:19]
Jack
And how did you get out of that? How much debt did you have?
- [28:21]
Chris
I didn't get out of it. It was horrible. I, I was, I was, had no money. My, I was living in LA. My apartment cost $525 a month. My car was broke down. I was selling cars at the time. Literally selling cars at Santa Monica BMW. I believe at the time I was just completely broke. And then unfortunately, I didn't have health insurance and I got sick. I got something called Graves disease, which is a thyroid disorder, and I had to move home to Texas. My parents took care of me and once I got better, I just started building my way. But it took a few years.
- [28:59]
Graham
Took a few years?
- [29:00]
Jack
Yeah, it took a few years from one bad stock?
- [29:03]
Chris
Yeah.
- [29:04]
Graham
How much debt did you.
- [29:06]
Chris
It was, it was, it was the most incredibly bad stock to ever be invested in. It was a stock that ended up having some kind of fraud and they delisted it while I had my options. So they didn't delist it. Excuse me. They froze the stock while they were investigating the whole thing, the sec. And because the stock was frozen while I was holding my options, my options just expired. Worthless.
- [29:31]
Jack
What did you learn then from that experience?
- [29:34]
Chris
Risk management is important. Important. Yeah, it is important. I was a kid, I, I always tell people like, that's when you want to make mistakes. The only way you will ever learn these lessons is losing real money. So I encourage everyone when they're young just to actually do stuff, to invest with their own money. Because if you do blow up your account, you are going to learn that lesson. You want to learn that lesson when you're really young and you're investing thousands of dollars and not millions of dollars and you don't have a family. Right. And you like, that's when you want to do it. But yeah, I was in debt for many years. My credit ruined. You know, when I met my wife, I Was deep in debt, had no money. Like, it was. It was. It was bad, but you come out of it.
- [30:21]
Graham
But how did you have the faith to then go back into the market and do it again?
- [30:25]
Chris
What else are you gonna do? Right? Like. Like, I learned my lesson. But, like, my lesson was I had too much concentration, and I didn't really. At the time, I wasn't investing properly. I wasn't investing the right way. I was investing because I got. I knew a guy that knew a guy that said, hey, this is a sure thing. First of all, as we know, there is no such thing as a sure thing. But more important than that is you have to do your own homework. And that's what I. That's what. Now you know why I preach. I. I don't just say that to say that. Like, I say it because I really mean it. When people try to, like, copy my trades or people ask me for my exact trades, I generally don't release them anym. Because I truthfully do not want to instill that type of behavior. Steal my ideas. But do your own research and actually make your own decisions, because these are really important decisions. You don't want. Like, I don't want to blow up your account. Right? Like, that's on you, not on me. So I'll share an idea with you, but you got to go do your homework.
- [31:25]
Graham
I got to say, when we met Vlad from Robinhood, completely changed my opinion of the company. Like, I was a fan of Robinhood, and I have been for a long time. But meeting Vlad and seeing him face to face and seeing his excitement about the company and how passionate he is.
- [31:41]
Jack
He was open to ideas, which I thought is the most important thing. You need to be able to pivot and hear out other people and listen to the right ideas and ignore the bad ones. And we were like, Graham was feeding him some excellent ideas, and he was, like, totally interested. He's like, yeah, like, we kind of working towards that. And.
- [31:57]
Graham
Yeah. But it made me really think that Robin Hood, I think, has what it takes to compete with the big people like Schwab, which I think a lot of people tend to compare them to in terms of account balance, size and number of accounts and average account. You know, things like this. Seeing Vlad and even going to Hood Summit in Las Vegas. We got invited. Incredible. And you meet the people there that, like, you know, you see Tesla superfans, where they're like, all Elon. I met those people. But for Robinhood, like, a totally different segment of the market where people are so excited about Vlad and Robinhood. And I think he's one of the few people where after meeting him, I was convinced on the company. And we've met other people, big investors, where immediately after meeting them, like, all right, listen, I, I lost all faith.
- [32:48]
Jack
I will say Michael Saylor was pretty convincing too.
- [32:50]
Graham
Yes. Michael Saylor was the only other one that when Bitcoin was 48, $50,000 when we filmed with him afterwards, I'm like, you know what, Jack? What he says makes a lot of sense.
- [33:01]
Chris
No comment on Michael Sailor. But I will say this. That was the best interview Vlad has ever done. I. I watched that and he's come a long way. He used to be terrible at giving interviews.
- [33:14]
Jack
Oh, he was excellent.
- [33:15]
Chris
Yeah, yeah, that. That was great. Listen, the, The. The Robin Hood's my number one position. It became my number one position this last year. It grew into becoming my number one position. Eclip. And my thesis has always been really simple. We have 100 ish trillion dollars that will get transferred over the next 30, 35 years to the younger generation through inheritance and other means. And a big chunk of that money is going to Robinhood. And beyond that, I have a second thesis on Robinhood, which is Vlad manages that company like a startup. There are very few companies in the world of that size where the founder, CEO is, Is quite honestly has the balls to, to, to still manage it like a startup and to take big risk and to break through walls and to ask for forgiveness as opposed to asking for permission. And Elon is one of those guys. He gets credit for being one of those guys. VAD does not get credit for also being one of those guys. So anytime I see a company like that with the capability of dominating a sector and literally like, like, like killing a sector and stealing all the business, you match that with a CEO like that, like, it's game over.
- [34:31]
Graham
Here's the other thing is that he agreed to come on our podcast, which a lot of people don't do. And I think, I think it's dumb not to come on a podcast, especially like a finance podcast. And we've. We reach out to a lot of people and we either get a lot of no's or just never hear back from people that should be doing podcasts. And we would, I think we'd be doing them a favor by doing a podcast. And Vlad was excited about doing it. And walking into his office, it's. It's not like a corporate, you know, headquarters. It didn't look, it looked like a house.
- [35:02]
Jack
It also was surprisingly not Extravagant? No, I was expecting we were going to walk into some sort of like crazy huge headquarters. The classic Google thing with the slides and, you know, free food everywhere, buffets and this and that. It really looked like they were running relatively lean for how productive their company is, which I also think is a, A, a positive indicator.
- [35:23]
Graham
And this is going to be another big one. They're 2 1/2% crypto match right now. They just brought it back. I don't know if it's, if it's targeted, but they had a 2% match when Bitcoin was at 120. Then they increased it, which I thought was really clever, to two and a half percent. But bitcoin is now a hundred thousand dollars, so technically it's not costing them that much more. But it looks on paper that you're getting two and a half percent on a lower amount though. But it looks like two and a half percent for whatever you bring into the platform. They're going to bring in a lot of money to Robinhood.
- [35:56]
Chris
The thing that Vlad and Robinhood does is they play the long game. They are playing the long game. They are in this for the next 20 to 30 years to be the biggest financial company on earth. I have absolute confidence that they will be unless something really crazy happens. Listen, I open up a Robinhood account. Account. Well, I've had an account for a long time, but I put meaningful money into my Robinhood account for the first time this year, which was shocking because, like, I'm just. That's not something I ever thought I would do. I'm old school. But it was because of the match. Yeah, it was the extra little thing that said, you know what, I'm going to go ahead and do this because it was that extra incentive that got me to pull the trigger. And listen, once you're in that ecosystem, they do a really good job. By the way, I love, I mean, the fact that you can, you know, prediction markets on your brokerage.
- [36:51]
Graham
Oh man, don't get me started on that.
- [36:55]
Chris
It's huge though, because you got to realize it's not about even how big of a market that can be. It's about the fact that you can do everything through one app. Right.
- [37:04]
Graham
That prediction market is great. And it's awful because now every sports game I watch or go to, I'm, I don't want to say I'm betting. I am placing a hedged position on Robin Hood in real time. That's what they, they want you. It's not, it's not gambling. How Are you. It's like you're hedging a position.
- [37:27]
Chris
It's definitely gambling.
- [37:28]
Jack
That is by. That is not an edge.
- [37:31]
Graham
It's speculation.
- [37:32]
Jack
There we go.
- [37:33]
Graham
I'm speculating on Robin Hood, but what's funny is that I could watch like I went to a hockey game the other day, and I'm watching the hockey game at the same time as I'm watching my Robinhood account because I bet on the Las Vegas Golden Knights. And when one team scores, like, you see the odds change within like two seconds. It's already priced in.
- [37:51]
Jack
How much did you bet?
- [37:53]
Graham
A hundred dollars. And I lost it all.
- [37:58]
Chris
But you had fun.
- [37:59]
Graham
I had a great time. And I also bet on the. This was bad. I put money on Cuomo in New York because I thought it would be a closer race. And he was priced when I bought in at like 7 cents. And I knew he was probably going to lose, but I thought there's. I thought that was underpriced. I thought it should be more of like, he should be a 15 to 20 cent bet and that lost.
- [38:21]
Chris
I just tell them the church that was. That's a fair thesis that, you know, that's my favorite type of investing is when you see an asymmetric risk reward. Investors like, the way our brains work, we're not really capable of computing that. And those opportunities are out there all the time. It's like, okay, yeah, it probably won't happen, but there's likely a 2x better chance of it happening than how it's priced currently. So you have to take that even if you're likely to lose. You have to. It decides it appropriately, but you do it enough and you will win.
- [38:53]
Graham
But here's the one thing that I think is worth looking out for with Robinhood is that their fees on the prediction markets are so massive, it almost makes it not worth it to go through Robinhood. But the thing is, it's. It's so easy. Like, it saves me from having to drive down to Red Rock and place a bet when I could do it on my phone in like two seconds. But. But the spread between the bid and the ask and the. The Robinhood fee you pay adds up to like 10 to 15% a buy and then 10 to 15% a sell if you sell it before it matures.
- [39:27]
Chris
Okay, so they're. I think they're looking at the long tail of customer who want to engage in that type of prediction market as opposed to the professional gambler. Right. That really cares that much for people like me. I don't care, like if I want to bet on a game, I. I don't care if I can get a 5% better margin going to MGM, which I can't even do in Texas anyway. Right. But even if I could, like I said, it's just easy and they make it easy and fun. I can go on there and place a bet like, like 5x quicker than I could on a gambling app. It's just easier. And I think a lot of people don't want to have a gambling app. They don't want to have money inside of a gambling app. That's just not part of who they are. And I think Robin Hood is going to end up with millions and millions of people casually betting on sports, casually betting on various things and that I think that's fine for them.
- [40:20]
Graham
So in terms of the AI infrastructure that's going in right now, what do you think the impact is going to be on jobs? Because I've heard a saying that says that AI is not going to create more jobs, it's simply going to redistribute them to fewer people.
- [40:35]
Chris
Yeah. This is a topic that I love, that I think most people get wrong. I think this will be massively positive long term for jobs. Just massively. Just play out the scenario. In what world do we end up reducing the amount of scarcity and increasing productivity globally that doesn't ultimately benefit humans in a whole number of ways, including more opportunity and better jobs and just better life. Will there be hiccups in the short run? Yes. Can we actually define what jobs look like in 25 years? Absolutely not. But I want you to envision a world where AI continues to accelerate over the next 20 years. You will have a world where we're going to have millions, if Elon is correct, billions of robots, what they look like, who knows. But there will be billions and billions of robots all around the world. There will be new industries being formed because we now have this intelligence that makes everything so unbelievably easy and cheap and productive to deliver value or to start new things. Right. Essentially any human on earth can create entertainment on the fly. Whatever's in your head, you're able to actually express without having the skill set of being able to actually produce music yourself. Right. You have a helper there. You don't have to be able to produce a TV show or go raise funding to produce a TV show. Envision that world and just imagine how much demand we will have for humans. How many more products will we have have how many more machines will we have that need to be serviced and delivered and taken care of and sold. A world with more things requires more work from humans. Right? So like I am 100% convinced in this. Like, this is not even debatable to me. What a job is in 25 years might look very different from what a job is today, but there will be more and better jobs as a result of AI and robotics in 20 to 30 years. Now again, between now and then, will we have hiccups? Yeah, the issue is we can't foresee how that problem gets solved if AI moves too quickly and disrupts too many job positions. But we will fix that problem. So like, like humans, we, we don't don't fix big problems until the pain of not fixing that problem becomes bigger than the pain of taking action. Okay, so right now the pain of like, let's just say it was increasing taxes. That's a huge pain. Like we're not going to increase taxes unless we absolutely have to for something, right? If we have 50 million people that are jobless in eight years because of AI, do you not think we're going to resolve that? Of course we're going to resolve that. Because if we don't resolve that, the pain of not resolving that will end up be people overthrowing our government and coming with, you know, picks and shovels to actually kill us. Okay, so that problem will get solved when it needs to get solved.
- [44:06]
Jack
But don't you think that the government would then just step in and subsidize life?
- [44:10]
Chris
Life?
- [44:10]
Jack
If you had this massive unemployed workforce that should be working, then that's kind of what we've seen in the past is like the government steps in like they've done with education and now, you know, housing is becoming less affordable. So now they've, you know, they're thinking about introducing 50 year mortgages.
- [44:26]
Chris
Okay, so the answer is maybe yes, it will get solved. Will the government solve it? Maybe someone will solve it. Because the alternative is so catastrophic traffic that we would never allow that to happen. And by the way, not to mention the fact if AI becomes that great to displace tens and tens of millions of workers, probably going to be pretty great at helping us solve those problems too. I have always thought, I mean, not to get too into politics. I always stay out of politics. I have some of my very closest friends on the furthest right as you can get. And some of my very closest friends are literally as far left as you can get and everything in between. And I've just been this guy in the middle. My Whole life I, you know, I kind of call myself like, like a radical centrist because it's like it's. I just like to solve problems. So much of this is about misunderstanding and miscommunication and sentiment and, and feelings and people just not coming up with solutions because we have all these obstacles to coming up with solutions. AI doesn't have that. I think AI is going to actually play a really big role in helping us solve, solve all of these huge problems that we have today when it comes to how do we spend money as a government? Because that's what most people on the right have an issue with. I don't think billionaires or millionaires would have any issue paying more taxes if they had confidence that the money was being spent appropriately to help humanity. I really don't. And to help their neighbors and because that benefits them. Right. Because those people are their friends, their family. We all want the same thing. Most of us want the same outcome. Right. We just don't know how. We argue over how to get, get there. So I think AI is going to do a really good job helping not just companies become. Because everyone's talking about companies becoming more productive and efficient. Like it's going to help governments in a really big way. And no one's talking about that. And once AI gets into government, which it will and actually helps government figure out how to be more productive with our money, I think we're going to see such massive efficiencies there and what we can actually do with our tax dollars to help people. It's one of the things I'm actually excited about, about this AI revolution. So yes, we'll have hiccups. It will not be a long term problem and I don't know exactly what the solution will be or how it will play out. I just know we'll figure out how to like, like, like even out the bumps along the way. But ultimately we will have better and more jobs for humans as a result of this. This. There's, there's like no doubt in my mind. Like I would bet everything I have on that.
- [47:13]
Jack
Let's be honest for a second. Most days it feels like your computer is running you, not the other way around. You've got 20 tabs open, five apps all competing for your attention and basically every day you get way less done than you wanted to. Well, that's why our sponsor Grammarly has teamed up with a bunch of other top tools to create something completely new called Superhuman.
- [47:31]
Graham
Superhuman is an all in one AI productivity suite that brings together Grammarly Coda and Superhuman Mail. It basically puts powerful AI inside the tools you already use so that you could plan, write and communicate without having to bounce between apps.
- [47:47]
Jack
It's not a chatbot, it's AI that actually works where you work. When I'm writing an email, it helps my tone to sound more professional because sometimes I need the help when I'm working on a document. It helps me organize ideas or finish the section that I've been stuck on.
- [47:59]
Graham
It's also really proactive too. It jumps right in when you need it without any setup or prompting required. Basically like having an AI coworker who knows what you're trying to do.
- [48:09]
Jack
Unleash your superhuman potential with AI that meets you where you work. Learn more@superhuman.com podcast that's superhuman.com podcast. There's also a link down below in the description. You can just click it right there. I highly recommend it. Superhuman.com podcast thank you so much to Superhuman for sponsoring this episode.
- [48:26]
Graham
Although really quick, before we go into that, I just want to say that when Jack and I first started the iced coffee hour and even today we have to figure out everything ourselves. From the best cameras to use, the best editing equipment, or even how to get rid of Echo in a room like this. This that is a giant warehouse. That's why if you're starting your own business or you're growing a business, you know how valuable today's sponsor is. And that would be Shopify.
- [48:47]
Jack
Shopify is basically your all in one business partner. They power millions of businesses worldwide, from major brands like Mattel and Gymshark to entrepreneurs just getting started. And here's a fun fact, if you've shopped online in the us, there's a really good chance it was through Shopify because they power about 10% of all American e commerce.
- [49:04]
Graham
Plus, what's great about Shopify is that they give you access to a complete design studio with hundreds of ready to use templates to build a beautiful online store that perfectly matches your brand. There's no coding needed and their AI tools even help you write product descriptions and enhance product photos.
- [49:20]
Jack
Shopify also makes marketing extremely easy with simple email and social campaigns to reach customers wherever they're scrolling. Plus they handle literally everything from inventory to shipping to returns. Basically all of the complicated stuff you do not want to deal with.
- [49:33]
Graham
So if you're ready to sell, you're ready for Shopify. Turn your big business ideas into so.
- [49:39]
Jack
Sign up for a $1 per month trial at shopify.com sh ich Guys, if you have a business Idea. It is only $1 to try out Shopify for one month. Give it a shot. You will not regret it. We've had so many people on this podcast that have made millions of dollars with their Shopify store. I've had a Shopify store. Graham's Coffee Company was ran off of Shopify. 10% of all American E commerce. I mean, come on, if you want to start a business, go to shopify.comich for their $1 per month trial. Thank you so much to Shopify for sponsoring this episode.
- [50:06]
Chris
China is racing towards AI superiority, okay? And that more than anything else, ensures that the US government is going to support and if needed, backstop our AI ambitions. Okay? Nothing in the world motivates a country to backstop something and to support, support it more than its competing enemy. That, that, that, that is pushing forward on that frontier. So that's something that I think people don't fully appreciate. So when we're talking about AI and all these big investments, like, we don't have a choice. Our government doesn't have a choice. Like, even if there is some degree of unknowns or like, hey, we're not exactly sure door how this is going to play out, the government is not going to allow the US to fall meaningfully behind China in this AI race. So whatever needs to happen, whether they're government incentives on AI, data centers or energy, whatever needs to happen, the government is required to ensure that happens. Because this is the new arms race. Think about it. If China becomes the country that's able to produce products 5x cheaper than us, right? They have intelligence on future warfare and, and weapons, right? And on vaccines. Like, you can't let China have AGI. You can't let China get super intelligence, like meaningfully before you have it. That's a national security risk. So there is an inferred backstop here on the sector, which is the government. Now, the CEOs are not going to.
- [52:00]
Graham
Talk about it because Sam Altman kind of did.
- [52:03]
Chris
He kind of did. And it created quite a stir. But it's there, guys. It's there. We all know it's there. They all know it's there. Sam knows it's there. Like all the big tech CEOs, they all know it's there. Jensen knows it's there. This is too big to fail.
- [52:23]
Graham
I feel like those are famous last words. It is too big to fail. Fail.
- [52:27]
Chris
But it was last time and look how it got saved. Okay? This, this, now I say too big to fail. As a sector, companies, obviously, companies can obviously fail. Right. But when you look at the infrastructure sitting behind it, the infrastructure really is too big to fail. This infrastructure might be the most important thing that our country works on the next 20 years. And we need to ensure that we are in lock step, if not ahead of China. China every step of the way. You can love it or hate it, but that's just the way it is. And that adds to my confidence level because there will be moments that will be really rough along the way. There will be moments when, like today, like complete freakout moments, maybe way, way worse than today. The government's going to be there. You think they're going to let our AI superpowers just completely fall apart and let China move forward with AGI and super intelligence and have to all the next generation weapons and warfare.
- [53:33]
Graham
But doesn't that then mean that it's really going to be the taxpayer who ends up funding AI? Possibly. And do you think this is the reason why they're investing so much right now? Because they know we can't go belly up because the government wouldn't let us. So we may as well take riskier bets right now.
- [53:50]
Chris
There are a lot of reasons to take those big bets because again, it's an asymmetrical risk reward. If AI does what everyone believes it will. And again, it's not about us reaching AGI in like two years. It could be 10 years, 15. It doesn't really matter. We've already seen enough. We know where it's headed. You can't not be part of that. It's just so, so obvious. It's like saying you're not going to be part of the Internet when it came out. Like, you know, like, listen, it didn't cost that much to be web oriented as a company when that happened. This just happens to cost more. But you can't just not be part of it. Even look at what Apple's doing right now, right behind the scenes. You know that like Apple's trying to figure out a way to leverage Google, to leverage all stuff they're doing. You know, Apple has a lot of data for Google. I think this is what you're going to see really soon. Apple is going to lean on Google's models for all their AI the next few years. And I think they're going to get a great deal for that because Apple has so much crucial data for Google to share back. I think that's going to be the deal that plays out. But even Apple, who's behind on AI, they will catch up.
- [54:57]
Graham
Does it worry you about the Circular financing. Nature. Nature.
- [55:00]
Chris
No, not at all. It's what has to happen. The circular financing is a huge problem. If this doesn't work out to explain.
- [55:12]
Jack
The circular financing to.
- [55:14]
Chris
So basically, if you're Nvidia and you're essentially financing your customers to buy your own chips, essentially, there's a lot of different ways that it's happening right now. If your customers go belt, belly up, you're taking the hit too, right? So that's where we get into trouble. Circular financing could be not such a bad thing. If everything moves in the right direction, if this whole thing falls apart and we're not not able to monetize artificial intelligence at the corporate level, at the consumer level, if there's no monetization that eventually comes in over the next five, to call it eight, nine, ten years, that's a problem. And that, that. Yeah. So. So think of the circular financing as leverage. It's just Nvidia and Jensen have a strong thesis and they have a lot of conviction the same way I do, and they're willing to place a little bit of leverage on it. The way that they're doing that is they're taking their cash and rather than just giving their cash back to shareholders, they're spending their cash to allow their customers to do bigger and better things with their chips. That's it. It's nothing. It's not that scary. I know it sounds scary because it can. It's leverage.
- [56:30]
Graham
It just looks scary.
- [56:31]
Chris
Okay, so think about leverage. When things don't. When things go wrong, they go really wrong. But when things go right, they go really right. And so everyone's making a bet that they've seen enough, they know enough. They know directionally where we are headed, even if there are bumps in the road, that it makes sense to apply leverage. And that's where the circular financing comes in. And I don't blame them for doing it. Like, I, I like it. What's so amazing to me is like, you've seen like, what, Nano Banana, like, like you've seen some of this stuff, right?
- [57:01]
Jack
What's Nano Banana?
- [57:02]
Chris
Like a Photoshop Google. And it's the new one's coming out, like literally any day now. You've seen what open AI has done right with, with, with their, with their, their social network. Right. Have you been on there yet?
- [57:16]
Graham
Like the Sora.
- [57:17]
Chris
Sora, yeah.
- [57:18]
Graham
All the Jake Paul memes are hilarious.
- [57:21]
Chris
But guys, this is like not even one point. Oh. Like they literally just showed us the future. Like, how do you see that? How do you see that? See what this AI is capable of doing today.
- [57:32]
Graham
Okay? But I see that the first thing in my mind is every actor, every movie, every production company is going to be obsolete in 20 years. Like, they were talking about doing a big movie studio here in Las Vegas and bringing it in from Hollywood, and they wanted all these subsidies and that got temporarily shipped, shut down. And at first I was like, oh, that's dumb. That would think of all the jobs it would bring here. And then I'm thinking, you know what? In 20 years from now, it's going to be a dude on his computer sitting on a couch who could create the next Michael bay movie in 20 minutes for $10. All these movie production companies are going to be wiped out. Like, why get a real actor when you could get the perfect AI? And when you think about it, when you're watching stuff, it's just pixels on a screen. And when you think the pixel coloration is perfect and the way they're laid out on the screen is perfect, it's going to be identical. And you could create anything that you want to. Like, why wouldn't that wipe out entire industries? And then what you're left with is all these people who have trained their entire lives for one specific thing, and that gets wiped out. What do they do when they're 50 and they don't have savings and they have to learn something all over again when they're entering retirement and they don't know what to do?
- [58:43]
Chris
Okay, so let's frame that in a way that I know you'll appreciate, okay? We used to have a media world where all of the media, all of the marketing and all the advertising got pushed through agencies and then got pushed through old media. And so if you wanted to advertise something, that's the flow of the money only went one way. And you had newspapers, and you had TV networks and cable networks, you had radio stations, and they essentially controlled all of those media dollars. Now, we democratize the world of media globally through social networks. And now we have millions, tens of millions of content creators around the world. In every little niche, those content creators are delivering messages on behalf of companies around the world, right? So a big part of that media world has already been disrupted and has already been torn apart, Right? It's not what it used to be. Newspapers, they barely even exist. Rarely. Radio barely even exist anymore. Wait till you see what's about to happen to the rest of that world, like TV and Hollywood, all of it. Right? But look at what we created. Do you not think that what we created to replace that is meaningfully bigger, more efficient. And look at the way the dollars are flowing. They're still flowing to people. You have a real job, Graham. Like you are a creator. Like your job matters. Just because you don't work, work at the newspaper that went out of business 15 years ago doesn't mean that's any valid, less valid of a job. At the time, we just didn't have the foresight to understand what that job was going to look like in the future. So in the same way, I agree. I think Hollywood will change. I don't know if it will, like, completely go away or how long that will take, but I think what this is going to create is going to be meaningfully large, larger than the system that exists today.
- [60:42]
Graham
And what's going to happen to the people who don't adopt it? Well, get left behind or just aren't as ambitious to pursue these things.
- [60:52]
Chris
I mean, I think you can say that about any other innovation. If you don't change with the times, you won't benefit. Right. So if you didn't adopt computers or if you didn't adopt the Internet right when it came out, your company was likely going out of business. So, yeah, you have to adopt it. That's what I tell every kid. I, I constantly asked by other parents, like, what should I be telling my kids? What, what job should they can go into? I'm like, I, I don't know about jobs, but like, just get, start using AI every day. Like, like start spending it. Like, learn all the tools, like start doing. Because this is not going away. And this is not a bad thing. It's generally a good thing if it doesn't kill us. And it might kill us. I don't know about that. There is a doomsday scenario that's like, very real, very legitimate and, and definitely something to be concerned about as we start to not only democratize the ability to make entertainment, but to the ability to make weapons to democratize the ability to do damage in the world. That does concern me. This doesn't concern me at all.
- [61:51]
Graham
Like, so what is the doomsday scenario for AI?
- [61:54]
Chris
The doomsday scenario for AI is, is democratizing violence, like, democratizing the ability to do bad things. Because the same way that we can now do amazing things so quickly, so cheaply, and anybody in the world has access to the information to do those things. You could use these tools, tools to do terrible things, to, I don't know, create viruses that we can't even imagine, to create weapons that we can't even imagine, I mean, to just do damage through hacking and various things. Like, you've seen some of the deep fakes. The deep fakes alone are exceptionally dangerous right now that are out there. Like, there was an investor who's very well known who kind of exposed a deep fake of Elon Musk this last week, kind of. Of talking about some political issues. And in his. You know, this is Bill Ackman, right? Bill Ackman is known for doing deep, deep research. It. It would take one of us, like, 15 seconds to realize this was like, AI. He said it might be fake. It might not be. I'm like, what might, dude? It literally says it's AI if you just read it. But this is the issue, right? Like, we don't even know what's real and not real anymore. There are a lot of dangerous things that are coming out out of this, but I don't think it's. It's the. It's the job issue that everyone's so concerned about.
- [63:11]
Jack
So you said it's extremely important to stay on the cutting edge of AI and to educate yourself with AI. What are the best ways to do that? Like, how do you apply AI in your own life to better it? And how. If a listener out there wants to, like, learn more and adopt AI as deeply as possible to be able to use that in the markets, how would you recommend they do that?
- [63:32]
Chris
First, follow the right people. You should be spending 15 minutes a day just catching up on whatever happened in AI that day. You should do that every day for the next few years. There's a guy on TikTok, I think he's on Instagram, called Nate. I mentioned this during our last show. He's like the Mr. Rogers of AI and in like 60 seconds, he'll tell you he'll spend nine hours researching whatever happened in AI that day and tell you in 60 seconds. So, like, anyone could understand the way he communicates. So that's like the one guy I tell everyone to follow. I forget his last name. But if you're young, younger, you have to use AI. Like, you have to use the tools for everything that you do. Like, there's so many tools, creator tools. You should be creating with AI you should be using it for your writing. You should be using it to help you with every single aspect of your life. There are hundreds of AI tools. You should be using the top 15 or 20 of them on a regular basis because that's value. Like, this is the new world. This is whatever your new job is going to be. It's going to be using AI as a tool because whoever employs you in whatever sector you go into is going to want to get five to 10 employees out of you. And you need to be able to show up to that interview and say, I can produce. And I can produce 10 people of work because I'm that good at utilizing AI to make myself more productive in every single facet of everything that I do. And based on that job description, here are the eight tools that I'm going to use so that you're hiring 10 people instead of hiring one person. When you hire me, like, that's what I would tell. Like, I. I can't speak to the job, but, like, no matter what the job job is, I can almost guarantee you that you can utilize that approach.
- [65:06]
Graham
And what do you tell your kids to make sure that they're prepared to go into the workforce and make their own living?
- [65:12]
Chris
Pretty much don't tell them anything because they don't listen to anything I tell them. So I don't even try anymore. I try to get other people to tell my kids I don't know, but not me.
- [65:21]
Graham
Why not? It's funny because this episode will get a few hundred thousand views and every person will be listening intently at every word you say.
- [65:28]
Chris
For my and your kids. My kids are now at an age. Age. They're 15.
- [65:33]
Jack
You have to put Subway Surfer on the lower half of this and make it like a vertical. Have you seen those, like, the brain rot maybe take talks where it's. Yeah, you have like, some video playing on the lower half. And they can.
- [65:45]
Chris
I hope you guys get to experience this for yourself someday. But. But there is nothing that you can do to win the approval of your kid. There's just nothing that you can do. At least not at this age when they're in high school. So, like, my kids bring friends over to the house, and their friends are starting to come over to me, like, Mr. Camilo, we saw your video. I love this. I love this. Like. Like, they're watching. They're learning finance or learning stuff. And like, my kids, nothing, nothing. They won't. They want nothing to do with it. And I'm totally fine with that.
- [66:15]
Graham
That sounds like an act, though, right? Like, if their buddies come over and they're like, can we get an autograph? And the kids are like, I am.
- [66:23]
Chris
I am just a big. I'm just the biggest idiot for them is.
- [66:25]
Jack
Are you.
- [66:25]
Chris
No, no, no, no. Their. Their. Their friends are legitimately watching. Like, yeah, you know what? You know what's Shocking to me. I was such a finance nerd when I was a kid, but I was the only finance nerd maybe in the whole world at that time. This is going back to the late 80s, you know, early 90s now. Like, yeah, I told you guys the story. I used to like, touch tone trade options trading at college in the basement of SMU on a, on a payphone, and it would take me 20 minutes to place one trade. I mean, now These kids are 12, 13, 14. They're studying trading. Like, dude, that is actually a good piece of information right there. Like, for Robin Hood. Yeah, like, if that doesn't get you psyched on Robin Hood, I don't know what will. Because being like this gritty, having like a, like, like a, like a side gig, like investing is part of the culture of being young now, especially for young males. And it's like a cool thing if you don't do it. It's almost like, wait, you're not doing this. You're not trading.
- [67:27]
Graham
You know, it's an interesting concept. A lot of people talk about what age to give their kid a phone. At what age do you give your kid the access to invest?
- [67:36]
Chris
I wanted my kids investing when they were way younger. They just wouldn't, they wouldn't take on to it. They just, they just wouldn't do it. So I started accounts for them. I'm, I'm crushing it in their accounts.
- [67:48]
Graham
They're doing great, dude.
- [67:49]
Chris
They're are up 5x in two years since I saw their accounts. Yeah, but, and they don't care.
- [67:56]
Graham
They don't check it.
- [67:57]
Jack
They don't want to know how much money they have.
- [67:59]
Chris
They don't even care about, I mean, my daughter, my son doesn't even care about money. He's just, he, he, he, he plays football, he plays Madden when he's not playing football, and he, he plays guitar and sings country music. He just doesn't care about money.
- [68:15]
Jack
Do you pay for him when he goes out with his friends and he wants to go get a lunch? Do you fund his life?
- [68:21]
Chris
Kind of. Because, with, with, with limits, with reasonable limits. Right, so. And that's a parent problem. You always, you're always kind of, kind of arguing with yourself over what's appropriate, what's not appropriate, especially if you live in a wealthy neighborhood and you have to have that balance of. We chose to live here and this is how people live. These are the restaurants that the kids go to. These are the things that they do. And like, you don't want your kid not to be able to engage socially and cult in, in the world that you move them into. So you have to make that choice as a parent that hey, like you have to balance. Like. So yeah, you kind of have to to some extent, like the thing that I've talked against my whole life, which is trust funds. I think trust funds are like the most evil, terrible thing that like you just can never do a trust fund for a kid. But now the world is changing, our world is changing to the point where no one used to talk about trust funds. Now it's like you have $100 trillion that are being transferred. Will there become a point in the next 10 years? I think there will be where if you are a kid that is coming into the world in their twenties with no money and maybe just a bunch of debt from college, you're not starting at the same level as everyone else. You're starting like 10 levels below everyone else. So does having some sort of nominal starting point become just the, the absolute nuance norm over the next 10 years? I know it sounds crazy, but, but like, so the house next to me is for sale right now in my neighborhood and I'm friends with the real estate broker and I'm like, hey, you sell it yet? Like, tell me who's moving in? Like, who's looking at it? And then I'm like, it's so expensive. I'm like, who can afford to buy these homes now? Because when I bought my home it was 4x cheaper, you know, 12 years ago. He's like, let me tell you something. Every single person I've shown that house to is getting money from their parents. Every single one, he goes, there's not one person that's looking at that house that's not getting help. So it's just like it's become like a norm.
- [70:32]
Graham
I sold my house recently actually in la. It was the same situation, all multiple. There were multiple offers on it, but all were receiving assistance from their parents. And their parents wanted to give their kids either a leg up or, you know, big milestone events. The kids are getting married, something like this, and here's a house. And I think that's going to be a lot more common for parents to pay for a house than education. Like, instead of going to college, let me help you out with the down payment for a house. And now you got a place to live.
- [71:05]
Chris
I totally agree. I think this is going to get so much worse and it's going to to create a huge cultural issue with the haves and have nots. Everyone's complaining because they don't have the money to do this. They can't buy a home, they can't get ahead. Or you can if you have help. And there are, there's just two people now in the world. That's just what we've become. That's just how our country has evolved. There's been so much wealth accumulated that things are becoming so expensive because of the people that, that habit. So if you're starting out and you don't have that, you're in trouble. I hate it. Like, I, I, I don't have a solution to that problem.
- [71:45]
Jack
Yeah.
- [71:45]
Graham
How much money should you leave to a child?
- [71:48]
Chris
I think about this all the time now. So I'll tell you what I did. As opposed to starting a trust fund, I started a foundation. And I want to grow the foundation to be infinitely large, hopefully a billion dollars someday. It's kind of like my little goal in my head. What's so amazing about a foundation is you can run the foundation and you could take a small salary. The government actually regulates what you can take from a nonprofit. So you can pull some expenses for your health care, you can pull expenses for managing the, the foundation, but it has to be nominal. I love that model. Because if you start a foundation or maybe start two foundations, if you have two kids, you could put them each as the administrat for each of your foundations. You don't have to have this trust where you have an attorney that's approving things and you're having to make all these hard decisions. You know that they would always, in a worst case scenario, be able to take a nominal salary and get health insurance from that foundation. And the beautiful part is you tell them the goal is to never take money out, but if you need to, you can legally. And it just lives on forever. And it lives on for generations, hopefully. And it grows. And the great thing about a foundation is it grows tax free. Free. So once that foundation starts to go, you have to distribute 5% of the foundation every year to charitable causes to 50001 3s. But that foundation's always getting larger and larger. So you, it's kind of like having a trust, but you're involving your kids in something that's productive, something that's giving back to the world. And you know that they will always be capped.
- [73:29]
Jack
So for your foundation, is that where you get the 20,000 to 60 million thing in your bio?
- [73:35]
Chris
No foundation is separate. I started the foundation like three years ago. So it's, it's relatively new.
- [73:40]
Jack
So what's the 20,000 to 60 million.
- [73:42]
Chris
That's just my brokerage account.
- [73:43]
Jack
That's just your personal brokerage account?
- [73:44]
Chris
Yes.
- [73:45]
Jack
But then you transferred most of that over to the.
- [73:48]
Chris
Yeah, so. So I transfer basically excess capital every year into my foundation.
- [73:55]
Jack
And then the money in the foundation, you also invest that?
- [73:57]
Chris
Yes, unfortunately I legal, I learned this the hard way. I'm not allowed to invest on margins and or options in the foundation.
- [74:05]
Graham
How do you learn that?
- [74:06]
Chris
The hard way. So I open the foundation and I get the account and I'm really pumped because like I'm going to like, you know, I'm going to grow this account. Like I grow my account, you know, like we're going to have the biggest foundation ever. And how lucky is this foundation to have me managing the money? And we do, we crush it. Like I'm doing really well and my CPA sends me my tax bill and there's like I think a 200 and some odd thousand dollar penalty fee. I'm like what is this from my foundation? And he was like oh, you can't trade on leverage. You can't do that, any of that stuff in a foundation. If you do it, you have to pay massive penalties. So like I just didn't know. I think I made more money off of doing that than the penalties I paid. But that. Yeah.
- [74:55]
Jack
So would you then do it anyways if you're super bullish on a trade?
- [75:00]
Chris
Yeah.
- [75:00]
Graham
What if your conviction is so high that the fee is going to be so small compared to what you could make?
- [75:05]
Chris
I'm actually when it comes to like, like the law and ethics, I'm like super conservative. So once I realized I'm not allowed to do that, I haven't done it since like one day I had like just like few hundred dollars over it. Was it tapped into margin? I freaked out and like I covered it. So no, no, I don't, I don't want to mess around with that. But yeah, so I, I do manage the foundations account but unfortunately no margin and it is frustrating not to be able to use more and it's frustrating not to be able to use options. You know, my style of tracing trading is, you know, a few times a year I get really high conviction around a piece of information and I, I want to make the most of it. Right. And that's how I make my year. You don't generate 70 some odd percent returns annually over 20 years, which is where I'm headed right now. Just investing without leverage. You have to apply leverage.
- [75:54]
Jack
So what's the reason behind using options Trading instead of buying a leveraged ETF for a stock like Robinhood.
- [76:01]
Chris
Well, I mean, they're pretty much the same thing if they offer that.
- [76:04]
Jack
Right, but I can leverage the leverage option though. It, you know, it's not technically expiring, so it wouldn't go down to zero for the, for the leveraged etf.
- [76:14]
Chris
Yeah, but I want to maximize my leverage around a thesis.
- [76:18]
Jack
And that's why you do weeklies as opposed to. But you still do leaps like you do.
- [76:22]
Chris
I never do leaps. I, okay. My trading methodology all revolves around an information window. So it, it all depends on when I believe the information that I'm trading on will become widely disseminated the to the market. So if that's three days from now, then I'm trading a weekly. If it's three weeks from now, I'm trading a monthly. Yeah, if it was like six months from now, I guess I would trade elite. But that rarely happens. Right. So like I, I, I, I, the trade is defined by the information that I'm trading. Like it all depend. Like when I traded the Barbie movie, my thought was that going into the release, all the hype would happen and then Mattel would move up Right. When they realized that Barbie was going to be a successful movie that was centered around their biggest toy. So I bought options that expired on the Friday of the movie release and I actually exited my position before the movie actually came out based on all the good reviews it was getting that week. Right. So you have to frame the trade around when you think other people are going to come across the information that you came across early that will cause that stock to directionally move in the direction you, you think it will.
- [77:37]
Jack
Who would you say are the best CEOs that are out there right now?
- [77:41]
Chris
Jensen for sure. Vlad at Robin Hood. Sam Altman as a CEO, maybe not as a person. Okay. Like, I know he's a controversial person. And by the way, I, I, I do think the best CEOs are often kind of psychotic. Right. Like they're not normal people. I would not be a great CEO at, at that level. Like, I like spending a tremendous amount of time with my kids, with my dog, having coffee with friends. Like, I don't want to spend the rest of my life continuing to level up in that manner. But Sam Altman is a complete nut bag. And like, that's who I want running OpenAI. If I'm invested in OpenAI because he is a guy that's going to do whatever it takes, he's going to make sure that OAI doesn't leave any chips on the table. Know, like he's going for it all.
- [78:32]
Jack
Do you think open will ever go public?
- [78:35]
Chris
Absolutely, it will go public.
- [78:36]
Jack
So why?
- [78:37]
Chris
Why?
- [78:37]
Jack
Oh, it has to.
- [78:38]
Chris
Yeah. They, they need the money. They, they need liquidity. They, they need more capital. They'll continue to need more capital. They, they'll go public as soon as they determine that that's the next tranch of capital that's required and they should go public.
- [78:52]
Jack
Yeah.
- [78:52]
Graham
It'll be a trillion dollars more. Do you think it'll go more than that?
- [78:55]
Jack
The biggest ipo?
- [78:56]
Chris
It'll be the biggest ipo. I've been saying this for two years. People thought I was nuts. Two years ago I said it'll be a trillion dollar ipo. And I still think it will be. But I think it could, I think on IPO day, I, it could be closer to 2 trillion then 1 trillion. With the way it trades. We'll see if I'm right about that. I know that sounds insane.
- [79:14]
Jack
Yeah.
- [79:15]
Graham
How soon until they have ads in Chat gbt when it starts recommending like, oh, this, you go, go to this local McDonald's here if you want a good place to eat.
- [79:24]
Chris
It has to have ads. It just has to. And it will. He doesn't like ads, but it will have ads that. So OAI did a deal with Shopify. That's a good, really, really big deal. Right? Because like doing that deal with Shopify means that they will merge the worlds of commerce that, that. Listen, as an Amazon investor, my biggest tail risk right now is Oai and Shopify. Because if Oai comes out and actually has like a 60 to 70% consumer market share of AI using that app and a lot of that commerce ends up getting pushed to a Shopify market model. That could be a little bit of an issue for Amazon at some point, but I'm not worried about that's like years, years out.
- [80:07]
Graham
We like Shopify a lot. Shopify has been a great sponsor of the channel. For the record, we use Shopify. Thank you, Shopify, for sponsoring this episode.
- [80:15]
Chris
Yeah, I didn't even. Well, I did kind of know that, but I wasn't thinking that. That's a big deal for Shopify though.
- [80:22]
Graham
Didn't open AI also do a deal with PayPal.
- [80:24]
Chris
Yes. I don't know as much about that deal.
- [80:27]
Graham
They announced a deal and, and immediately PayPal went down.
- [80:30]
Chris
Did they? Yeah, I don't know much about that. Okay. I think, listen, they have like a billion people using Chat GPT. It's incredible. By the way, I don't know the degree to which you guys use AI, but like, I'm so addicted all the time. Like, and this is the thing, like, again, I'm going to go back to the iPhone moment. There's no doubt in my head. My conviction is 100% that AI is as big or bigger than what 95% of the people in the world think it is. I use it, I see it, I can't get away from it. I can't even imagine going back to a world without it. It. Most of the world is just living to survive. Okay? Like the people concerned about job loss, like in the first world, like, most people are just trying to survive every day. And like, when we talk about that, we, we do not want these jobs for our future generations. Like, do you really want someone doing physical labor for 45 years of their life? Do you know how many people do not get to spend quality time with their family during those crucial years because they're working 60, 70 hours, hour weeks? That is not what we want for humanity. Will we have disruption that will happen the next decade? Absolutely. Do we need to do everything in our power to try to help those people that are getting displaced temporarily? Absolutely. We need to figure that out. But that aside, this is going to be the, I think the biggest thing to ever happen to humanity because I think 30 years from now, a lot of the people in this world will get to live a lifestyle similar to mine, which is, I never missed a soccer game, never missed a basketball game or a football game on my kids. Like when I've been fortunate enough to be financially independent because I've been an investor my whole life. And when I show up to the soccer field, there's usually one other dad because it's a four o' clock game. It's so hard to get who gets off of work at 4 o'. Clock. It's impossible. So you get a bunch of moms, not even all moms, because sometimes you have both people work, right? And so I'm at these games, I'm like, this is, I'm so fortunate. Like, I've gotten to see every single piece of my kid's life, life. And almost nobody gets to do that. We could be entering an age of abundance. And people talk about age of abundance, like we're going to have all this nice stuff. That's not what it's about. It's about becoming a civilization to where people get to engage deeply with their family and friends and get to actually experience all of life. Like we Forget that most people literally spend their whole life in a cubicle or in a warehouse. Right. Like that's. We're in a warehouse, you know. Well, by choice, really cool warehouse, sure. But no, like, like that. That is meaningful. Okay. We're going to bridge the entire rest of the world into like this wonderful life. Hopefully when we get rid of scarcity and we have food and shelter and, and things for everyone so that you know what, your job can actually be somewhat creative. Wouldn't that be cool if everybody could have somewhat of. And I don't mean like an actual creative job, but to actually have do something in your life that you actually enjoy. I enjoy what I do. Most of people don't like. Who's to say that we can't create a civilization where most people get to do something enjoyable for their life? Why not? I think AI is going to help us get there.
- [83:41]
Jack
You know that doctor's appointment you were supposed to make a while ago? The one that's been sitting on your to do list for weeks, maybe months. Whether it's an overdue annual checkup, a weird rash you keep googling, or you're just clearly sick like I am right now, as you can probably tell from my voice. And you need to see a doctor. I know. We've all been there. Booking a doctor's appointment has always felt like such a hassle.
- [83:59]
Graham
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- [84:26]
Jack
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- [84:59]
Chris
Everything Will get easier to produce and cheaper to produce in time, which will.
- [85:06]
Jack
Decrease the price of housing.
- [85:09]
Chris
It will decrease the price in housing. I think the thing that I will also do like right now, do you ever watch those home shows, you know, like they've been going on HGTV for.
- [85:19]
Jack
The last 20 renovation shows?
- [85:21]
Chris
Yeah. Or like, like just, you go in a lot of homes, right? Yeah, most people's homes, Homes are designed like I would have designed them when I was 13 years old, which by the way, is still how I would design a home today. Because I don't know any better. Most people cannot afford to hire designers and all that stuff. Now look what HGTV did. Now people at least have a visual into like, oh, I'm going to try to replicate that on my own. AI is going to help people live in better places, right? Like, it's going to help them design their rooms, it's going to help them to dress better. There's so many things that AI will improve. AI is helping people improve the way that they speak and communicate via email. Like I used to sit over an email for 45 minutes to frame one paragraph. Now I just write it like junk and AI makes it look beautiful in two seconds. Like everyone's a great communicator now. Like if everyone has the capacity to engage with the world in a professional manner because of AI, like you can just take that with everything with homes, with fashion, like everyone will have the capability to like actually express themselves. Their, whatever their creativity is in their head. If they have a song in their head, they'll be able to make it. If they have a show that they want to make, they can do it if they want to. Like, they want to be dressed better, but they don't really know how AI will help them. They want to have a beautiful home. That stuff matters. Okay. Like, they want to have a beautiful home, but they can't hire a designer and they don't know how to do it. AI is going to help them do that. It will also help them build homes cheaper and better.
- [86:57]
Graham
Now what about in this short, short term for helping home affordability, they just floated the 50 year mortgage. They also floated mortgage portability to be able to take it from one to another, which I, I personally, I never think that's going to be able to happen. But what are your thoughts?
- [87:12]
Chris
I mean, the 50 year mortgage, it's, it's dumb. I mean it's optional on paper. I think the 50 year mortgage can be good. I think I come from a premise of we should Borrow all the money we can at a low interest rate and reinvest it at a higher rate. And that's been my life. I think that's like the, the financial pyramid of life is people that give their money away and then other people take their money and make more money with it. So I like the idea of people able, of people being able to actually just take out big loans at low guaranteed interest rates by the government. But the problem is most people won't do that, right? They're not going to reinvest that money. They're just going to take out a bigger loan and, and they're never going to get equity from it because people have bad habits. So I think long term it will be detrimental. And I, I, I would, I hope it doesn't happen.
- [88:14]
Graham
It seems like people are getting very fed up with the system. I think New York was a prime example of this. Mom D got elected. That it's a, it's a sign that a lot of young people feel like they're priced out of the market. They're priced out of the housing market. Incomes have not kept up with exposure expenses. And so it seems like they're looking for any sort of solution that's out there. Do you think there is a solution?
- [88:34]
Chris
No, I don't think that's the solution. The solution is to build more houses. If anything. We all know what the, Everybody knows the solution. Build more houses, right? Like, we know what the solution is. We just got to actually do it.
- [88:45]
Graham
But why do they make it so hard to build more houses?
- [88:47]
Chris
I mean, people don't want the houses next to them sometimes, right? Like nobody wants a fourplex next to a single family home. Also you have all kinds of, kinds of, you know, safety thing. I mean, look, look at all the stuff we build into a house for safety that gets like taken off right away. You know, like you have to have a banister here and then you take it off. You have to do this. Like we become over regulated. It's just what happens in a mature society. We become over regulated, things become overly expensive and I'm not sure how we back out of that. Honestly, I don't have the answer for that. Other than boomers have too many houses. And maybe we, maybe we tax having more than one house in a different way.
- [89:33]
Graham
You know, Las Vegas does it really interesting. So in Las Vegas you could have one property as a primary residence and on that primary and you have to claim it every year the property taxes are capped and they don't go up more than a Certain amount. But on an investment property or a second or third home, whatever it might be, if it's not your primary primary, they could increase your property taxes at a much higher rate. So instead of it being a 2% increase, they could increase it 6%. Let's just say it seems like a fair system overall.
- [90:05]
Chris
I think the big issue with taxes, again, is that we don't spend the money right. So no one wants to pay more taxes because you don't feel like it's going to be spent correctly to help people. But if you have to have more taxes, I can wrap my head around the luxury tax thing. I really can. Whether it's a second home or certain items or beyond a certain degree, maybe that's part of the solution. But again, what are you going to do with that money?
- [90:33]
Graham
Nothing.
- [90:33]
Chris
Exactly.
- [90:34]
Graham
It's gonna go. No, it's gonna go into the abyss. My God, it's gonna get squandered.
- [90:40]
Chris
I always thought it'd be cool. I, I think about taxes all the time. And like, I would, if I had like nine lives, I would absolutely be a politician and try to be a Mr. Smith goes to Washington for one of them. I'd probably get crushed immediately. I had this, I had this idea, like, what if you had, like we had this billionaire tax or millionaire tax, right, that everybody hates, and I hate it too. But what if you had that tax at whatever level it gets kicked in at, and you give control over how that money gets spent by the consortium of those that pay into it. So it's a government, let's say, for New York, New York puts this tax into place. But if you're paying into that tax, we're only going to use that money to do something really great that we can kind of all agree would be a great thing, a problem that we could solve, but we're going to allow almost like you get votes with how much you pay. You guys who are all pretty smart because you're all billionaires, millionaires, etc, right? You have control over how that program works, how it gets managed, how you deploy the capital. So let's do something great for our city with your money. But we're going to give you control because we know that you guys will do a better job with it than us. And instead of like coming down on billionaires for being billionaires, why don't we, like, give them credit and be like, hey, we need your help. Like, like we need your help.
- [91:57]
Jack
That's a great idea like that.
- [91:58]
Graham
But.
- [91:59]
Jack
But I feel like that you're gonna have billionaires that just end up having political power that are gonna then put like homeless shelters, you know, or like high density housing way off in the boom.
- [92:10]
Graham
Or they're gonna be like, this area here. Our money's going to this park and we're gonna make this the nicest park. And we're gonna put this nice art piece in this.
- [92:17]
Chris
No, you have to, you have to have, you have to have been a. You have to have a framework. You have to have parameters, right? You have to have objectives. And I think if you did it, like, I think public private partnerships are really interesting. Like Bryant park in New York. I don't know if you remember Bryant park before it was a public private partnership, but what they've done with that park is so outstanding. It's a place that we go to every time we go to New York. Do you know they have like one of the cleanest bathrooms in the city? It's safe, it's clean, it's fun. The park generates income. This like, beautiful display of a public private partnership as opposed to other parks that just kind of spiral down and then there's no money to take care of them, right? They were like, how can we make money from the park and then use the money to make the park better? I think there's a solution. Now, it's not an easy solution, but I bet you AI can help us solve it, right? Like it's. I. There's something there. And again, I truly do believe we're all talking about AI making all these companies more productive. And these. We're going to have new industry and one employee is 20 employees now with AI, is there a reason we couldn't do that with government? Why couldn't we make government way more productive, way more efficient? Like, why can't we make government great with AI and we can kind of eliminate all the political banter and all the fighting. Like, there's a solution to government in AI somewhere. And I know it's coming for us and I'm super excited, excited about it. I hope we don't resist it too much. And I don't think that we can because other governments will like, will take advantage of that opportunity and then it becomes a thing like, oh, if your government's not using that, you're going to get left out, right? You have to have an AI assisted government. They're tools, right? They're literally just tools. Like our government, let's be honest, operates a lot better today with computers and the Internet than it used to. I have to say, like, there's some like government payment methods with like my driver's license and stuff that for the first time ever it's like really easy to renew.
- [94:25]
Graham
Oh, I just. My passport.
- [94:27]
Chris
Right.
- [94:27]
Graham
I. It was a pain in the ass to do like 10 years ago. This took me five minutes to do online and I uploaded my own photo.
- [94:36]
Chris
Yeah, it took them like 15 years to figure it out, but they finally figured it out and it is better. It, it is helping. AI is moving like a hundred x faster than the Internet. So if we can start to bridge those two worlds together, think how amazing it would be if we had like a really efficient, productive, hyper intelligent government. How cool would that be? Like how many problems would that solve?
- [94:59]
Jack
I always thought it would be interesting to have someone campaign under the idea of I'm going to let like some sort of open source AI, large language model or something decide on policy for me.
- [95:14]
Chris
Yeah, well, I think it would be.
- [95:16]
Graham
Interesting with the amount of mistakes it makes.
- [95:19]
Jack
Well, if it was.
- [95:20]
Chris
The thing is it will get better or early ground.
- [95:23]
Jack
I may not mean right now, but at some point in the future that could be kind of interesting because I feel like it could prevent a lot of more catastrophic things that have happened. Such as like when, you know, Trump wheeled out like the Tariff Board and he showed it and it was like crazy terror of percentages. I don't think that's something that AI probably would have cooked up.
- [95:41]
Graham
Maybe it did cook it up.
- [95:43]
Chris
No, no, no. First of all, better prompting will solve most hallucinizations. Right. Like and, and in agentic world and the ability to fact check itself and to validate information. Like we're going to solve all the issues that we have issues with today when it comes to AI hallucinations, not being able to trust it. But you're right. I mean AI, even at the person level, the voter level, it will. That's coming. There's no doubt. That's definitely coming. But I'm more interested in just at the government level generally. Like, like let's, let's have AI figure out how to get these parties working together to solve problems. You almost like you need a mediator, right? Like there's no mediators in government. He just people fighting and that really sucks. Like that's what really depresses me about politics right now. I was on a zoom a couple years ago. One of my friends dads is like one of the big guys in the Democratic party and he's very old and he was telling stories of how it used to be when they would have Leadership of the parties just fighting to death for like days and days on end over policy. And then he would host dinners at his house and they'd come to dinner and they'd have wine and they'd spend all night talking and riffing with each other. And then the next few days they would somehow come to an agreement. And he goes, it's really sad because that doesn't happen anymore at all. Like, you do not have Republicans and Democrats having a dinner at somebody's house, just hanging out, talking about kids, talking about stuff other than that policy. So that when they get back in the chamber, they're all of a sudden, they see each other as humans and they're like, come on, let's figure this out. Like, that's, that's sad. So, like, you know, maybe we need AI to kind of be that mediator.
- [97:42]
Graham
What happened, because that always does help when you, you get face to face with someone. It's different.
- [97:48]
Chris
It always helps. I, when someone leaves a bad review at our restaurant, I always say like, you know, back when I don't do this anymore because it just drives me nuts. But like, if I could just talk, talk to them, just talk to them, right? And be like, hey, you know, we have, we have 65 employees, kitchen workers, people working for next to nothing servers. We come to work every day and just to make you happy and we're trying our best. We're getting, we're getting cut a million different ways every day. Like there's nothing but problems in the restaurant industry. I was like, we're trying really hard. We're sorry, you know, we screwed that up for you. Let us make it up. But like, we don't have to like go to war with each other because you had a bad meal or something. But over Yelp, they just go off, you know, because they don't have that, they don't have that, like, person to talk to on the other side.
- [98:40]
Graham
What do you think is going to happen if the Trump tariffs are declared unconstitutional or they're shut down by the Supreme Court? Do you think there's a chance of that happening?
- [98:49]
Chris
Yeah, I think it's more likely than not that it happens.
- [98:52]
Graham
And then what happens to all the money that's been paid into it already? How do you coordinate refunds?
- [99:00]
Chris
This is why I bought Elf cosmetics. Medics on the dip, hoping that that happens. And, you know, they get some of that tariff, tariff money back.
- [99:08]
Graham
But how do they get it back? Who's going to refund them? Who's going to coordinate? Here's how much you paid, I get it back. Is that just on like a tax filing? That sounds more complicated to give it back at this point than just to say, hey, you know, we're going to stop tariffs from this point onwards. But what you paid in is going to go into a fund.
- [99:24]
Chris
And knowing how the government works, I would imagine that the government works, will put that onus on the taxpayer to tell them what was paid in tariffs, to then show the proof that that was paid, and then they get to deduct it going forward. They always put the onus on us. So I assume that's how it would happen. You know, they're not going to automatically pay back. They're going to hope that you don't care or you forget. Right.
- [99:49]
Graham
So you're saying if I ordered a couch and I know I paid a higher price because of the tariff, I could claim on the couch that I paid an extra 10% and that should be a write off.
- [99:59]
Chris
I don't know if they would do it at the consumer level or at the company level. Probably the company, but if they do it at the company level, the company certainly would have the ability to then refund you. So. But I would imagine they would probably put it on the company to say, hey, how much was paid in tariffs? Let us know. It becomes a big cluster for the company then, because they have to do a lot of administration work to then reimburse you. Right.
- [100:23]
Graham
So do you think that's why Trump promised the $2,000 stimulus checks from tariffs? In that it might place more pressure that if the Supreme Court says, no, this is unconstitutional, Trump could then say, guys, I promised you the money. It's not my fault, it's the Supreme Court places maybe a little more burden on them to vote in favor of it.
- [100:43]
Chris
I think the two things are definitely attached because he announced it right after. I think part of it is like, hey, we made all this money from tariffs, now we're going to give it back to you. So that the Supreme Court is like, oh, there's no money left to refund. So that if they rule in that way, you're essentially having to do a massive stimulus, which would be terrible, by the way, very inflationary. That could be a disaster. Like if he pays the $2,000 and then on top of that they have to print more cash to pay back all the those tariffs. I mean, I can trade around it, but I, I think that's generally a bad thing in an inflationary. It's the exact thing that we're trying to get ourselves out of. We're trying to stop this inflation cycle. Right? Like, I don't think we need to just be handing money out in that way. I think what we do need to think about doing right now, and I hope someone's thinking about this, if not, maybe AI can think about it, is I think we need to start some sort of a fund for AI displaced workers. Like there needs to be something there. We might need to have some emergency procedures in place to allow people to claim unemployment for longer periods of time. If we do get into this vicious cycle where we have a period of time and people are displaced and not able to get trained up for new.
- [102:00]
Graham
Jobs quick enough, what I think they should do is put money into a fund that is used towards education of AI so that if someone loses their job to get unemployment for longer than six weeks or eight weeks or 10 weeks, however long, they have to go through a training program of AI to be able to learn something new. And that should be free a hundred percent.
- [102:22]
Chris
Absolutely. Do you know how many people resisted computers back in the day? How many people resisted the Internet? I remember back in the late 90s, so many people that I was around were like, I'm just not doing that. I'm not going to get a job where I have to deal with that. And they really thought they could just stay away from it. You can't, you event, I don't care how old you are, you have to figure out how to use the computer, how to use the Internet. You got to get on email. I mean, do you know how many people were like refused to get on email as executives back then? It was wild. They're like, no, my assistant will do it. I'm not getting an email account. Like, think about how crazy that sounds today. So there's a lot of resistance to AI. It's coming. Everyone has to learn it. They will learn it. I think everyone will learn it. Like I said, we are not going to take major steps that are uncomfortable to change the way that we live and work unless we absolutely have to. Unless we're at a point of catastrophe. And I think if we start seeing, you know, schools in China every, and we're hearing that, you know, 12 year olds in China are, are basically operating at college levels of intelligence because they've converted their system to AI. I think we'll start to convert our education system to AI. But that's what it might take, right? We're not going to just proactively start to say, hey, we have AI learning in every single school now. We already have evidence that it works, right? Like you learn 5x faster and like, what, like 30% of the time.
- [103:53]
Jack
But do you think that they're actually learning or do you think that they're just applying AI in, in lieu of their.
- [103:59]
Chris
No. Have you seen these studies? They're freaking insane. So basically, if you're really into soccer, you are into soccer, right?
- [104:07]
Jack
I like soccer, yeah.
- [104:08]
Chris
You like soccer?
- [104:08]
Jack
Yeah, I do.
- [104:09]
Chris
So if you're really into soccer, it will teach you everything through the lens of soccer. So whether it's math, whether it's English, history, like, like, like it will literally figure out what your interests are and it will teach you hard concepts in ways that you can relate to personally. So it's still teaching you the same concepts. It's teaching you how to problem solve. It's just using methods that are more geared to your DNA and to like, your personality and your style of learning. So where it works exceptionally well right now is with, with autistic kids, but it will work really well with everybody else too. The reason why it works really well with autistic kids or people that have learning disabilities is that the school system generally isn't set up to like, educate them in a way that they're capable of learning, but the AI can do that. But truthfully, even people that don't have major learning disabilities all kind of learn in slightly different ways. And we could definitely enhance that process through, through, like, personalization. What it really comes down to is personalization. Not to mention the fact that what is the chance that you have the best teacher ever when you're, you know, in a small town in Kansas? Like, maybe, maybe not. Right? So everybody would have access to best in class models and education and approaches.
- [105:38]
Jack
Is any bit of you. This is speculation, but concerned about AI being used to like, feed bad ideas or with malicious intent. Like we were talking earlier about, if you're just having a conversation, oh, where, you know, where should I go to eat? These are the things that I like. You could have advertisers or companies paying some sort of large language model to, to recommend their own restaurant over other restaurants. And obviously that's a pretty harmless example, but that could also be taken to a different degree where you have, you know, covert advertisements being paid, or you have.
- [106:12]
Graham
Or an agenda, political agenda.
- [106:14]
Jack
A political agenda being shown as though it's like the truth, even though it's more subjective. You see that a lot with ChatGPT.
- [106:21]
Chris
Yeah, AI alignment's super important and it has to get solved on the advertising front. My assumption is it'll be fairly transparent and noted out. Similar to when, you know, I was around working in search marketing when Google was created and I remember when they started kind of, you know, putting those ads in, you could definitely tell like there was, there was a lot of conversation back then, a lot of controversy around how they were identifying the ads versus the organic information. I assume the same sort of conversations will happen now if necessary. I would imagine government would get involved in regulation if they needed to, but hopefully it will be self policed. The good thing here is that we have like a relatively small number of very large models, model companies and they have a lot to lose by not doing this the right way. And I don't think they're overly concerned about squeaking a little bit more advertising revenue right now. Like I said, I think, I think that won't be a big issue. I'm more, I'm more concerned with like you know, someone using AI to create a terrible virus. That's the thing that keeps me up at night.
- [107:32]
Jack
As someone who only really uses ChatGPT, what are the main like differences and arguments for and against the other main AIs?
- [107:41]
Chris
It changes every few weeks, right? So it's like the models are all changing all the time. You know, everybody's really hyped right now for Gemini 3.0 it's coming out like any day.
- [107:53]
Jack
What do you use if you have something come up and you just pop open your phone?
- [107:56]
Chris
I use Chat GPT because it's what I used in the beginning and that's just how it is, right? Like we get used to using something and then now it has so much history on me that I'm afraid to change because I'm like, but it knows so much. I don't want to have to like, I want my, I want my agent to have two and a half years of data on me. Like it knows how I like to speak, it knows like what words I don't like to use. Like it, it knows a lot. Like I have a pro, I use the pro model, right? So it has more history, more memory. 200 bucks a month is like nothing compared to what I get out of it. So I actually think the market on the consumer side is massive. When Sam Altman puts out these numbers of how much money they're going to generate and everybody's like, there's no way you're, I'm like, oh yeah he will. When AI can do anything for you, you'll pay up for it. Because it's like it's, it's a drop in the bucket compared to what you're used to paying to get those things done. Right.
- [109:02]
Graham
Like so for the people watching, what do you think are the best opportunities today for them to look into or potentially invest into the stocks that I'm.
- [109:11]
Chris
Most heavily invested in right now, Robinhood's my largest holding. I think Amazon will ultimately be the biggest beneficiary of AI and robotics long term. The shorter term trade that I'm in right now is Bloom Energy. So Nvidia came out a few weeks ago and basically announced their new architecture of their new chips. And it's really interesting because they're moving from like a 48 volt power consumption to an 800 volt DC platform. An 800 volt would mean that you could have like bigger pipes going to the, the, the chip system so that it's way more energy efficient and you use like small, like it's just way more energy efficient. Right. And so it just happens to be that Bloom Energy is a company that has like this direct current type of energy platform that is perfectly suited for an 800 volt DC connection. So I think Bloom Energy is going to be probably the biggest beneficiary jury the next one to five years of data centers around the world wanting to get a direct current kind of fuel source to power their data centers. So the stock is already up like 5 or 6x in the last six, seven months because people are slowly starting to learn this. But energy is a big part of this story, as you guys have probably heard, right? Like there's a concept that eventually the cost of AI will basically just be the cost of energy. The real story right right now is, is, is time, time to compute. So how long does it take for you to get your data center up and running? And if you can get your data center up a year earlier or six months earlier because you have an energy source that works now, the amount of money that you can make in that six months off the compute is so insane that you would pay anything for it. You know, Bloom Energy, I guess you can say that would be my more kind of like more of a short term speculative. I don't want to call it speculative. I did a tremendous amount of research. One of my good friends Xianxu has done a report on it. You guys can read it, it's on my Twitter. But that's like, that's like my big energy play right now. That and a company out of Canada called the Symbols T A C. Transatlantic. Yeah, transatlantic. I, I think that data Centers are going to move into Canada, Alberta, and they're one of the companies that's primed to benefit once data centers finally move into Canada. There was a big issue with nobody wanting to be in Canada earlier this year due the Trump administration and due the fact that Canada is a very difficult place to do business. So if you don't have to go to Canada, you're not going to Canada. But now we're at a point where you have to like, you just need to go where there's energy. And so this company, Thomas, see, they have excessive amounts of energy that they can power data centers with in Alberta. Alberta is kind of like the Texas of Canada. It's the least regulatory, burdened environment in Canada. So I think that's going to happen here in the next few months. So that's another kind of more speculative trait of mine.
- [112:37]
Jack
And for the average person out there, what percent do you think they should have in cash of their portfolio?
- [112:44]
Chris
So. So I think that I'm not a financial advisor, to be clear. The only people whose account I advise are my parents.
- [112:53]
Jack
And your kids.
- [112:54]
Chris
And my kids. I think a great way to think about kind of portfolio positioning, again, you've heard me talk about this is bucketing. So you have to bucket your money in how much money do I need in the safe bucket, how much money do I want to grow? Right in the growth bucket? And then you can call it the get rich slow bucket. Right? And then everybody needs to have a get rich quick bucket. That is the most important thing that nobody has. You absolutely must have a bucket of money where you're going to get aggressive, you're going to take big risk, maybe put on some leverage, invest aggressively in things that might or might not work out. You must have risk assets. And every wealthy person has risk assets. People that are not wealthy for the most part don't. You just have to properly bucket them. So I think for most people, don't put any money in the get rich quick bucket unless it's coming from trade offs you're making in your life that you're not, you're not worried about losing.
- [114:07]
Jack
So to Graham, who has what percent cash do you have right now?
- [114:12]
Graham
It's over 20%.
- [114:14]
Jack
Over 20% cash. And then how big is your risk asset bucket?
- [114:23]
Graham
10.
- [114:24]
Chris
Really?
- [114:24]
Graham
To 15.
- [114:25]
Jack
Are you Bitcoin?
- [114:26]
Graham
Yeah, I just, I just count. I just count bitcoin ETF in that bucket. Okay. And that's, and that's that other. Other than that, No, I. Everything else is growth. Just safe.
- [114:37]
Chris
Safe. Yeah. So like you save a lot of money on coffee, right? I think most people would prefer not to save money on coffee because it's not worth it, because they're like, I'm just saving, like, $3. But if you think of that, $3 is growing to $300, and then every single day you're saving $300, all of a sudden you're taking Graham's approach towards saving money on coffee. Because, like, for me, I don't care about saving $3, but $300 a day, that's starts to get interesting. So, like, you have to think about every dollar in your life as a hundred bucks, because you could definitely 100 extra money over your lifetime if you're investing aggressively. And then all of a sudden you're fighting, you're clipping coupons, you know, you're making your own coffee. You're just doing all these different things. I'll wash my own car. Maybe I'll just, just like, take the, the later flight that gets in a slightly less optimal time. But I'm saving a hundred bucks. But that's like $10,000 when I retire. Is it worth getting an extra $10,000 when I retire to, like, get in three hours later?
- [115:41]
Jack
Yeah.
- [115:42]
Chris
Yeah. So, like, when you think about money as being a hundred times more valuable than it is today, and I know that sounds like an insane number, but I did it, and I'm kind of just a big idiot. So, like, like any, anybody could do it. Cash. I have, like, very little cash. But the reason why I have very little cash, almost like a nominal amount of cash, is because I know that I have enough equity. It's not going to zero. So in my mind, I'm prepared for a 70% drawdown at any point in time, meaning I'm prepared for the market to go down 70%, or at least the things that I'm invested in to go down 70%.
- [116:19]
Jack
What would you do if the market went down 70%?
- [116:21]
Chris
That would be rough. Yeah, it's done it before. Like, it's happened.
- [116:26]
Jack
Would you, like, sell the restaurants and then put that then into the stock market?
- [116:30]
Chris
No, I, I, I, I. No, because it would come back. Like, it's not going down 70% and just staying there. It's like, that would be insane. Right?
- [116:40]
Jack
But to buy more.
- [116:41]
Chris
Oh, to buy more.
- [116:42]
Graham
But Japan did that. Japan went down quite a bit and stayed there for decades.
- [116:47]
Chris
That was a different time. I do not see capital market the way that it works and the way that. How productive we are with capital here and the growth engines that we have, especially now, that's just not everything is a tail risk concern. I'm definitely not living my life that way because like again, it depends on what your goals are. So when you ask how much cash do you have? I think the better question is like, what's your ultimate objective? Because if your ultimate objective is just to continue living your life the way that you're living it, and maybe you do want to have like a decent amount of cash and a lot of money, money that's invested conservatively and you might not even need to have like a high risk bucket. Like if you don't, if you wouldn't live any differently if you came into $10 million, then what is the point of putting your money at risk to earn $10 million? There's no point in doing it. So it always starts with what your objective is. What is my objective? To build a billion dollar foundation. The only way that I'm going to do that is by taking big swings at things. I have high conviction in hopefully my making a lot of money getting it in the foundation. Right. So like my objective is different than yours and probably different than Graham's. So like you just got to know what the objective is.
- [118:00]
Graham
You said that you really enjoyed our talk with Sahil Bloom about wealth.
- [118:04]
Chris
Yeah.
- [118:04]
Graham
What's something that you've noticed when it comes to that? What have you found as you've made more money?
- [118:09]
Chris
There's definitely a sweet spot for wealth. You don't want to have too little and you don't want to have too much, but they're equally uncomfortable on both sides. Probably the most depressing days I've had in my life for the days that I've. Shortly after I've made a tremendous amount of money. Like tremendous amount of money. Money that I never thought would I could ever make in my lifetime. Whether it's due to an exit in a company or an insane few months in the stock market because you see your account get inflated and you look at that number and you're excited for like a few hours to maybe a day. And then it hits you that you just achieved something that you've been trying to achieve for so long, long. And you're just like, it's not what you thought it was. Right. Like it's, it's, it's just really not what you thought it was. And the reason why I'm saying that is because I've already hit the sweet spot. Right? So like early on it was that great. Like when you go to becoming non financially independent to Becoming financially independent, that is the biggest high in the world. It opens up your entire life to spend with family, to spend with friends, to travel, not to have to think about what you want to order when you're at a restaurant. Like, that is. That is like living life at its very best. To actually get to that point in life is. Is so amazing. And that's what I want for everyone in the world. But once you hit that, you go above it, and it's like, not what you think. Not only is it not what you think, it's like the opposite of what you think. I'll give you the perfect example. Like, the last few years, we started traveling on spring break to these resorts that are like 2,800 a night, you know, 3,000 a night, stuff like that, right? With our kids and stuff. And they're so nice. It's like the nicest resorts in the entire world. And we get there and you have people that are just, like, bowing to you and any little thing that you need, and everything is so gorgeous and beautiful, and the food is. Everything's perfect. And after a few days, you're like, this kind of sucks. It's like, this is like, if this is what it's like, it's not fun. It's like you've gotten to a point where there's no energy. And I told my wife recently, I'm like, I'm done with that. But you know what really stinks is that once you. There are some good things about that, that once you go back, you're like, oh, man, this is fun. But, man, you've kind of experienced this ultra luxury, that once you've experienced it, now you have an issue with just. Just regular good stuff. And so that's why I call it the sweet spot. You want to get in there and stay in there. Like, I know everybody wants to, like, do all this crazy stuff with all this excess money, but, like, when you're having, like, having conversations, if you're in a room of people that are just ultra, ultra wealthy, they kind of suck. You know? Like, I hate to say that, but, like, for the most part, they kind of suck. I kind of pride myself as spending all. Almost all of my time just being normal. Like, with normal, regular, real people doing real things. Like, that's why I go to a coffee shop every day and just hang out and talk to strangers. And just like, you get in these certain circles and it gets weird.
- [121:27]
Jack
How do you know if you're in the sweet spot?
- [121:29]
Chris
That's. That's a great Question. First of all, I think it's different for everyone, right? Like so my sweet spot might be. I, I know you're going to want a number, right? Like you're going to want a number. So the number for me used to be, it used to be 10 million. I thought like 10. Nobody needs more than $10 million. Now we're in such an inflationary scary environment that maybe you need to rethink that number. I don't know. But that's traditionally, that was always the number for me. I was like, I never want more than that amount of money because I just know what's going to happen over the, that amount of money. People just, your life changes. You just, you just, you have to continue to like. So like that's where the, that's where foundations are so awesome, right? Because you can build towards something, but it's not about you just getting a nicer car, a nicer jet, right? Like, cuz I don't know what more you need at a certain point and, and life really does get worse. There's way more problems. Like I have, I joke with my buddy who has a, you know, he's in the yachting world. He's just always complaining. He's going to watch his show, by the way. He knows who he is. He's always complaining when he does these yachting trips. He's like, he's like, gosh, you know, my, my, my AC broke and they're charging me $30,000 to fly to fix a button on my AC, you know, or like a pump broke and that's $40,000. Or we're stuck at this port for two days because no one can get out here to fix this. Or like he just spends so much time logistically dealing with problems. So like there is a lot of truth to the More money, more problems. I would say more stuff, more problems.
- [123:14]
Graham
But that seems like a character trait of that guy because I instantly relate to that. Just if there's a little issue, like the other day I spent three hours trying to fix an outlet and it's just a minor thing, it shouldn't take me, but I just get fixated. It seems like that's more, it's less about the money and more that that's him. He'd be the same way if he had $10,000.
- [123:34]
Chris
Totally. And truthfully, he's in that world because he loves, he loves, he loves the world. So it makes sense for him. For me, I think the sweet spot is getting to a place where you get to do everything that you want to do in life? Like, for me, like, I'm going to take my kid to the Georgia UT game in Athens, like, tomorrow, right? So that's awesome just to be able to do that. Like, tickets are so super expensive, but I could handle it, right? Like, that's, it's awesome that I didn't need to worry about the cost of those tickets. It's also really fun to be at a place where you have friends that do crazy cool things because, like, I can go on his yacht, you know, Like, I can go on that guy's jet, but I don't, I don't have the burden of all that. I think there is a sweet spot, and life becomes actually almost more miserable above it than it was below it. I, I, I think life is worse above it than below. I, I really do. From everything I've seen. And, and not to get too dark, but it's like when you have literally everything and then you're above that level and you continue to look for dopamine hits, it generally only takes you in one direction. Drugs, affairs, you know, like, whatever. It's just dark places is what I've seen. Depression, right? Like, it's, you get to the top of the world, and it's kind of a scary place. So I like staying in the sweet spot. Like, and I think, I think you have to kind of get to the top of it to realize that you don't like what's above it. And then you realize, then hopefully you have common sense to come back under it.
- [125:14]
Jack
Was there any other moment in your life that you realized that you were at the top of it and it was a scary, lonely place? Aside from this experience. Experience at this resort?
- [125:22]
Chris
Oh, yeah.
- [125:22]
Jack
I mean, I mean, what was the first epiphany?
- [125:25]
Chris
I mean, it was the year of the pandemic when I just saw my account balloon that big. And I was like, this is like, you just, you almost feel like for me, and maybe because I grew up, like, maybe it's like Catholic guilt from growing up, but, like, when you have that much, I mean, you see people talking about there shouldn't be billionaires, right? I don't believe that, but by the way, but for me, you. I question myself every single day. What do I deserve? And for me to be this fortunate to be in this position right now, how accountable should I be to others to be doing something with this that has nothing to do with me? So I felt like a really big weight on my shoulders, like, wow, I just came into all this success. What do I owe for it. Like. Like. And maybe that's just me, but I felt there was even more pressure on me, and that's when I started the foundation. And starting the foundation just relieved me of so much stress because now I had a new mission, a new objective that was not about me, that I felt was healthy and positive and made me proud to be able to. To put more money in it. And every time I put more money in it makes me proud. Crowd and, like, I developed this awesome way because I'm all about efficiency. So, like, I don't take any money out of the foundation. And the way that I figure out how to disperse checks at the end of the year is I just go to my friend network, and anyone that I think is kind of generous or, like, a generally good person, I'm like, do you have one charity that you work with who operates efficiently and does really meaningful things where you think a check that's like 10 to $50,000 would actually be meaningfully beneficial and that you trust them? And then all these people like, yes, I actually do this. The most amazing charity, and they tell me about it, and they're excited, and then I'm like, I just need the name, nothing else. Just tell me where to wire the money. And I just. I wire the money, and not only do I know that money is going to a place that's going to do good with it, but I just actually built a deeper relationship with the person that introduced me to them because that was an important mission for them. So it, like, it, like, like, adds depth to my friend network, and, like, they might not be in a position in life to cut that check, but I am. But, like, I trust them, and they trust that charity. So, like, I don't have anyone administering, like, I do it all myself.
- [127:59]
Graham
I realized I should have reached out to you to invest or donate, I should say, in Ryan Trahan's latest challenge.
- [128:07]
Chris
Yeah, what. What was.
- [128:08]
Graham
That Was a whole great series. He was staying in all 50 states, the coolest Airbnbs, and every day was like, a new sort of thing where you could. What was it? The Wheel of doom. And a $50,000 check would cause him to spin the Wheel of Doom, and he has to, like, take on a challenge. That would have been a great thing. And.
- [128:25]
Jack
And.
- [128:26]
Graham
And he reads off a little message that you could say, well, next time.
- [128:29]
Chris
Call me like this. I. I think the most interesting charitable entity in the world is actually beast philanthropy. I don't know how much you know about them, and I know he gets A lot of crap. But they have this mission behind the scenes that is way bigger than just donating money. Like, they want to change the world of philanthropy over the next 20, 30 years and like deeply ingrain it into everyone's life. And I just think it is so cool. So that, that's been one of the big.
- [128:57]
Graham
Why does he get so much hate? I never understood that. Like, people want to find a reason why what he's doing is bad is that people don't think that it's possible to make a lot of money and then do a lot of good.
- [129:09]
Chris
Yeah, they, they, they think you, you built your empire on the shoulders of common people. Like, it's, it's, I think it's a misunderstanding. I deeply, deeply disagree with it, but it exists. And, and I do think there is just a complete misunderstanding that a lot of wealthy people don't just want to hoard their cash. I, most of the people I speak to don't. They would love to do good things with it. They just don'. Trust anybody. They definitely don't trust the government. So they don't want to give it back to the government. And they're even skeptical and have a lot of cynicism around philanthropy. So that's why. And I do too. And that's why it's like if there's not a relationship there and it's small to medium size, I'm not interested in it. People love to build you up and tear you down. I mean, it's, no one's immune to it. Has anyone ever been immune into it? I don't even know Mr. Rogers. Is he.
- [130:07]
Graham
I think he's the only one I've seen who's never.
- [130:09]
Jack
I also don't even know who Mr. Rogers.
- [130:11]
Graham
You don't know Mr. Jack showing his age here. Mr. Rogers, really? I think Mr. Rogers neighborhood. No.
- [130:19]
Chris
Oh my. I'm sure if he was around today, he would have gotten cancelled by now. 100%. Yeah.
- [130:26]
Graham
I, I, who is this adult hanging around children all day? Man, what is that?
- [130:31]
Chris
There's, there's, there's always something, but no, th, this is, Listen, this is the best time in history to be an investor. Like, there's no doubt about it. I continue to be more excited about the next few years than the last few years. Even though like the first little bit of this AI cycle is over. Like, it's just going to get so much bigger. You can't even wrap your head around how big this is going to get. How much of the world is going to change and what change comes? Opportunity as investors. So even if you're just starting out right now, like you have to find money to put into an investment account. You just have to, whatever it takes, drive an Uber while we still have drivers and Ubers. What I, I truly think every dollar you can figure out how to like get through any means you can turn into fifty or a hundred bucks through aggressively investing the next, you know, five to 10 years.
- [131:27]
Graham
Is there any investment you won't make?
- [131:31]
Chris
No.
- [131:31]
Graham
Restaurants?
- [131:32]
Chris
Oh, well, well, no, I have two, but they are passion projects of mine. I, I, I talk about this. Restaurants are the worst use of capital. What's really fascinating about the restaurant industry, and I have two super successful restaurants that me and my business partner fully own. But almost every restaurant in the world is set up in a similar manner. And basically investors will invest in a restaurant and you have an operating group, and that operating group will take 5% off the top before the investors get any money back. Well, the problem is most invest, most restaurants will only make 5%. So if you're investing in a restaurant, likely you're never making your money back. The very best restaurants make, let's call it a 15% profit margin. So if it takes you $5 million to build out a restaurant, because that's often what people will take to build a restaurant out these days, and that restaurant knocks it out of the park, like really knocks out of the park, and is doing $10 million of revenue, then that restaurant is making $1.5 million of profit in like the best of all best case scenarios. But the management firm took 5% off the top, so that's 500k just to them. They make their money no matter what. Okay, so that leaves a million dollars. Now investors will get their money back before the management company takes any profit share for themselves beyond the 5% they already took. But it would take you five years just to get paid back. And then, then once you get your paid back as an investor, the management company takes half of the profits after that in addition to the 5%. So now you're looking at only half a million dollars of profit that goes to the investor pool. You're basically making half a million dollars on a $5 million investment that knocked it out of the park. So you're taking on one of the riskiest investments in the entire world that is almost definitely going to fail in the hopes that it becomes one of the top performing restaurants and you can make 10% on your money. Who on earth would do that?
- [133:58]
Graham
What was the restaurant we went to With Joshua Weisman, Jose Bazaar.
- [134:01]
Chris
Yeah.
- [134:02]
Graham
And how much was that build out?
- [134:04]
Jack
I think their build out was like close to 50 million, 60 million, 40 million, something like that.
- [134:08]
Graham
Yeah. So we looked at this restaurant and it is incredible. It is one of the best places to go, go on the Strip if you have time, maybe tomorrow, go and check it out. Would highly recommend it. But we were looking at the build out and Josh was saying this build out cost over $10 million.
- [134:22]
Jack
The oven alone was 1 million.
- [134:24]
Graham
It was a million dollars. And I was looking at this thinking, okay, it's got to be like 5 or 6. 10 might be like pushing it. Yeah, it was more than $40 million on this build out. Just on the build out.
- [134:35]
Chris
Vegas is a bit of an anomaly place, right? So, like, maybe it was a vanity project, but if it was, I, you know, Vegas, it's a weird market, right? But even in Vegas, like, I'm telling you guys, it. There's never been a worse time to start a restaurant. There's never been a worse time to invest in a restaurant. The cost inflation is through the roof. The insurance inflation. I pay almost $300,000 every year for liability insurance between my two restaurants that used to be under 100k just a few years ago ago. So it's tripled in a few years. So we pay more in liability insurance than most restaurants make.
- [135:14]
Jack
How profitable are your restaurants?
- [135:17]
Chris
We're profitable. We're on the top end of the spectrum. So, like, we're in that 15 profit. You know, one of my restaurants makes almost, almost $10 million. I have 65 employees of that restaurant, Chelsea Corner. And you know, I think I have like maybe 25, 30 at Milo Butterfingers and in Dallas. But these are both restaurants that I'm super passionate about. I used to work at Chelsea Corner in college. So it was me and my best friend going back, Lynn, and we went back and bought the restaurant that we both worked at in college. And like, we rebuilt it and it's become a neighborhood institution. And it's a place for our neighbors, our friends, our family to come and hang out. Like, we get a lot of joy from it. And it just happened to grow into like one of the best performing restaurants in Texas. So great. We knocked out of the park. It's awesome. But that's not why we did it. We did it because, like, we really enjoy, like, I enjoy joy just like walking into the restaurant and seeing people I know and sitting down with them. I spent my entire career in intangibles, you know, investing in tech Companies and analyzing publicly traded companies. It's nice to have something tangible that people can enjoy. And so that's the only reason I think, to open a restaurant is if you want to dedicate your life to it. Because I'm there every day, like almost every day. I stopped by both of my places. If you're doing it for money, you're absolutely crazy. And people complain that drinks cost 16, $18. Dude, the restaurants are generally not making any money even with the 18 drinks. We paid $35,000 to get our napkins cleaned, like enrolled and brought back to us and to get like the mats done and people's uniforms on animals. Annualized basis, the expenses. Okay. How much you think it cost to clean an ice machine?
- [137:04]
Graham
Oh, gosh, my guess is probably $1,500 to go through and like clean out everything.
- [137:12]
Chris
I think it's like six to $800. We have three ice machines. They're supposed to be cleaned every three months. So that's call it 1500 to $2000 every three months. So we're basically paying, I don't know, upwards of five to $8,000 a year to clean our ice machines at one rest. Now, how many restaurants do you think actually do that?
- [137:32]
Graham
Oh, very few.
- [137:33]
Chris
Very few. But, you know, I eat there, right? And so, like, I want it to be clean and hygienic and my neighbors eat there. So that's a commitment I have to them. But it is so expensive to operate a restaurant. And the lawsuits, they never end, right?
- [137:52]
Graham
What do you get lost?
- [137:52]
Chris
Oh, you get, you get slip and fall lawsuits. You get. There was a fight at our restaurant a year ago. A kid started a fight, and then these other three kids, one of them hit him in the face. And so they're suing each other. And then they sued us just for no reason. And they're like, oh, well, you should have had more security or something. It's like, you just. What can we do? Like, we're, we're getting yelled at for serving food late and like some kid quickly punches someone else. Like, that's my responsibility now. Well, guess what? We're 120,000 doll dollars into legal bills a year later, just trying to get ourselves off the case. And that's something that our insurance is paying for. But believe me, we're going to end up paying for it. So it's like this is why our insurance has gone from like, you know, 80,000 combined to 300,000. It just keeps going up because we live in this place where people just feel comfortable doing Stuff like that. And nobody cares. No one cares that we have almost 70 employees, that it's their long livelihood, that because we have to pay this money, we have to pay them less now. It's like, it sucks. It's a bad business is all I'm saying. Like, you do it if you really want to love it and like, if you want to become your life, but you do not do it for money, I'll tell you that.
- [139:13]
Graham
Well, Chris, thank you so much for coming out. Really appreciate it. You're actually here because we're doing a meetup for the index and really happy you're able to join. For those unaware, by the way, we meet quarterly. It's all for, like, business owners, high end entrepreneurs, investors, things like this. We meet up quarterly, monthly zoom calls, if you're interested in joining that. By the way, you are a honorary member. The link is down below in the description. I'm glad you're able to make it out to Vegas.
- [139:42]
Chris
It's awesome. We had a zoom and I talked about robots for a few hours and it, I, I thought it was awesome.
- [139:49]
Graham
You got everybody very hyped.
- [139:51]
Chris
I'm hyped on robots, man. The robots are coming. They are definitely coming. Just not as quickly as people think they're coming, but they're coming. And. And I think that will be the biggest, the biggest thing to happen to our economy in our lifetime.
- [140:07]
Graham
So looking forward to it. Well, thank you again.
- [140:09]
Jack
Thank you so much for coming on the podcast. Thank you guys for watching. Also, you may notice it looks a little bit different in here.
- [140:15]
Chris
Yeah.
- [140:16]
Jack
So I don't know if we're gonna reveal quite yet why it looks different, but it looks a little bit different. The members, it looks better.
- [140:23]
Graham
The members already know. We did a members video.
- [140:25]
Jack
All right, well, we moved the podcast studio. There we go. I shared it. Thank you guys for watching. Till next time.
- [140:30]
Graham
See ya.