Trends with Friends – Election Day Special: Market Impacts, Crypto Insights, and the $9 Trillion AI Investment
Date: November 6, 2024
Hosts: Howard Lindzon, JC Parets, Phil Pearlman
Featured Guests: Zach Pandl (Grayscale), Michael Parekh
Overview
This Election Day episode of Trends with Friends brings together a full panel—Howard, JC, Phil, regulars Michael Parekh and Zach Pandl—to analyze the intersection of the 2024 US presidential election with key market trends. The discussion covers everything from real-time trading on election news and investor sentiment to deep dives on crypto dynamics, the resilience of international markets (notably Israel), the storytelling power of companies like Palantir, and the eye-popping $9 trillion estimate for future AI infrastructure investment.
The panel emphasizes the importance of behavior in the markets, the volatility around the election, and how to position for the days ahead—regardless of political outcome. The tone is lively, irreverent, and insightful, filled with pointed anecdotes and memorable lines.
Key Themes and Insights
1. Election Day Market Jitters & Investor Sentiment
- Men dominate finance forums: Phil highlights polling data on StockTwits showing overwhelming Trump support, reflecting their male-skewed, crypto-friendly user base ([03:00]).
- Intensity and uncertainty: Howard notes he's "never seen" this much election intensity or anxiety, as participants try to game out market reactions ([04:45]).
- Investor fear and hedging: JC points to the soaring put/call ratio—a sign of investors buying insurance en masse despite all-time market highs ([31:10]).
"Yesterday the CBOE put call ratio hit new 52 week highs... with the S&P 500 at all time highs. People are just scared... Stock market's at all time highs. The world's never been a better place, and they're buying insurance hand over fist because they think the world's about to fall apart."
— JC Parets [31:33]
2. Crypto & The Election: Bipartisan Future or Single-Issue Fandom?
- Short-term price, long-term autonomy:
Zach outlines how a Trump win likely prompts a short-term crypto rally; a Harris win could see an initial drop, but both paths ultimately favor Bitcoin’s value in America’s high-deficit, inflationary backdrop ([06:17]-[09:54]):"The great thing about bitcoin is that it doesn't really care who's in the White House, it continues to produce blocks. It's completely autonomous..."
— Zach Pandl [06:55] - Crypto's longer game: Michael Parekh adds that while regulation appears politicized today, the real future is crypto as global plumbing—especially with the rise of AI and global payments ([09:54]).
"Crypto also has utility value as plumbing... with AI and so on, we may have really useful mainstream applications in a few years."
— Michael Parekh [09:54] - Single-issue ballot-box bugs: Howard rants about 'elite' figures in the crypto world (the Winklevoss twins) backing Trump for narrow, self-interested reasons, arguing it's foolish to tie crypto's future to one party ([13:18]).
"The single issue thing is really irks me... No one's more bullish on crypto than Mark Cuban, and he's a Democrat."
— Howard Lindzon [13:18] - Ethereum: NOT dead: Zach answers a live viewer question on Ethereum's viability, emphasizing its unique capability for "big boy finance" and institutional-scale utility ([16:37]-[18:58]):
"Ethereum is maybe the world's most important open source software project of all time—so it's very much not dead."
— Zach Pandl [17:37]
3. International Markets: The Israel Example
- Israel’s resilience: JC points out that despite immense uncertainty at home, the Tel Aviv Stock Exchange is at all-time highs, driven by software and tech innovation ([19:08]):
"Tel Aviv Stock Exchange continues to make new all time highs, completing a multi year base. Just hit new 52 week highs relative to the German DAX..."
— JC Parets [19:25] - Innovation engine: Michael adds context, citing Israel's outsized role in tech and AI, from Checkpoint to new AI video startups ([20:32]):
“Israel continues to be obviously a fountain of technology startups and innovation... they're very focused on AI."
— Michael Parekh [20:32]
4. Storytelling in Markets: Palantir vs. Crypto
- CEO storytelling as a market driver: Howard and Michael lay out how Palantir’s Alex Karp has crafted a compelling narrative that has made the company a “meme stock” with substance, unlike the “messy” crypto world with too many questionable storytellers ([21:29]-[28:35]):
“If you have a public company, you have two products, you have your stock and you have the product...the product is not worth the stock—meaning it’s trading at, I don't know, 50 times sales. But the story is on bucking point.”
— Howard Lindzon [22:13] - Palantir as a new American tale: The hosts agree that strong stories drive multiples, but warn that as stakes rise, performance must match narrative ([28:35]):
"Palantir has a master storyteller... Bitcoin is hijacked by a thousand storytellers."
— Howard Lindzon [30:08]
5. How Investors Should React to Election Volatility
- Fading fear: JC and Phil recommend buying into dips caused by overreaction—be it Bitcoin or broad indices ([40:11]-[41:45]):
“If bitcoin gets killed for whatever reason through the election, just go buy some.”
— Paraphrased from Zach Pandl [40:48] "...take some cash and buy some VGT or VOO or VTI. Four years from now, eight years from now... those prices will be higher.”
— Phil Pearlman [41:21] - Behavioral edge: JC emphasizes exploiting human irrationality:
"People are crazy... As investors, we want to be able to take advantage of those human flaws and extract money from those who are mentally too weak to overcome their biases."
— JC Parets [31:33] - No result risk: This election, people are also hedging for a possible “no result” scenario, adding even more anxiety to the markets ([39:37]):
"Part of the elevated volatility and, and put call ratios is people placing bets on a possible no results tonight."
— JC Parets [39:47]
6. Crypto Instruments: ETFs, MicroStrategy, Coinbase
- Bitcoin ETF mechanics: Zach clarifies that ETFs merely hold actual Bitcoin and are the most practical and secure way for most investors ([43:06]).
"Bitcoin ETFs work exactly the same way [as gold ETFs]... For the vast majority of investors, the Bitcoin ETFs are going to be much cheaper than trying to buy Bitcoin yourself and much safer from token security and from a tax and from a estate planning standpoint."
— Zach Pandl [43:33] - Stock proxies for crypto: JC and Howard discuss the performance divergence of MicroStrategy (ultra-leveraged Bitcoin proxy), Coinbase (full crypto play), and direct Bitcoin exposure—the former crushing both due to leverage and narrative, but possibly with a "sell by" date as market structure matures ([44:55]-[47:51]).
"Microstrategies is a bet on Bitcoin. Coinbase is a bet on crypto.”
— JC Parets [46:26]
7. The $9 Trillion AI Compute Investment
- What is compute? Michael Parekh breaks down "compute" as everything from AI chips (Nvidia et al), power, data centers, to cooling infrastructure ([49:32]).
- How realistic is $9 trillion? He references runway estimates from Nvidia's Jensen, OpenAI's Altman, and SoftBank's Masa, noting prior tech revolutions (like the telecom fiber buildout) cost trillions and viewing $2-9T as plausible for the scale of generative AI ([52:55]).
“When you’ve got a big change in computation...2 trillion is a in the ballpark number. And can it grow to 4,5,6,7,8,9 trillion? Yes... It is in the trillions.”
— Michael Parekh [52:55]
8. On Winners and Losers: Post-Election Perspective
- Phil's message to the "losers": Phil closes with wisdom for those whose candidates will lose, urging a level-headed personal response and focus on self-improvement ([56:55]):
"Tomorrow morning... you have two choices... One is to just get really fucking pissed off... The second choice is, 'Okay, we fucking lost. Now what am I going to do from here...to make something great of my life, to do something positive, to do something wonderful.'"
— Phil Pearlman [57:07] - Michael's coda: Michael Parekh, as a first-generation immigrant, reminds everyone of the resilience and diversity of America ([59:25]):
“Whatever happens... we are still winners because as a first generation American, I just want to feel we are Americans and we have something amazing regardless...”
— Michael Parekh [59:25]
Notable Quotes & Moments
- On Bitcoin's Independence:
"It doesn't care what happens in the election... bitcoin would rally after a short dip.”
— Zach Pandl [07:14] - On Single-Issue Crypto Voting:
“The single issue thing is really irks me... Cuban has the ear of the Democrats.”
— Howard Lindzon [13:18] - On Palantir's Storytelling:
“I've never seen a guy tell such a clean story at the right place at the right time.”
— Howard Lindzon [21:29] - On Market Psychology:
"People are all in on insurance. And if we've learned anything... that's the time that you want? Insur, not so much. So I like fading this."
— JC Parets [33:11] - On America's Strength:
“There are good people all over this place. And it was only in my 30s and 40s that I realized left wing and right wing. I just want to get back to... there are just good people everywhere.”
— Michael Parekh [59:25]
Important Timestamps
- 03:00 – StockTwits election poll reveals male, Trump-leaning bias
- 06:17 – Zach’s analysis: How election outcomes affect crypto
- 09:54 – Crypto as financial “plumbing” and a tool for global efficiency
- 13:18 – Howard criticizes single-issue crypto voters/Winklevoss rant
- 16:37 – Is Ethereum dead? (Zach’s deep dive)
- 19:25 – Israel’s stock market defies geopolitical and tech headwinds
- 21:29 – Palantir’s narrative and “meme stock” status discussed
- 31:10 – JC: Investor hedging is at historic highs, psychological signals
- 39:47 – Risk of no clear result, market volatility
- 41:21 – Phil’s advice: Buy the dip, invest for the long term
- 43:33 – Bitcoin ETF mechanics debate
- 47:05 – MicroStrategy, Coinbase, and crypto equity performance
- 49:32 – Michael Parekh breaks down the AI compute investment thesis
- 56:55 – Phil’s message to Election Day ‘losers’
- 59:25 – Michael’s affirmation of America’s enduring strengths
Final Takeaways
- Elections drive intense (and often illogical) reactions in markets—savvy investors fade the fear.
- Crypto’s future is bigger than any one party—its core utility remains unstoppable worldwide.
- Storytelling is a vital (but double-edged) force driving fortunes in public markets.
- Massive AI investment is real and could dwarf even the internet buildout—but the numbers are still squishy.
- In the end, political wins and losses are temporary—personal agency and resilience matter most.
Trends with Friends delivered a timely, spirited, and deeply insightful look at how the biggest themes of the moment—politics, investing, and technology—intersect in real time. For market participants navigating uncertainty, the recurring lesson is clear: Keep perspective, follow the bigger picture, and use volatility to your advantage.