← Trends with Friends
Trends with Friends
Fart Coin Frenzy & Rectal Rotations in Meme Coins | Special Guest Packy McCormick
01:07:14
Loading summary
Transcript139 lines
- [00:00]
Paki McCormick
Foreign.
- [00:10]
Howard
2026. I am Howard the Phantom. Very chilly here in Phoenix. 62 degrees. Trying to warm myself, warm my cockles. And what an exciting beginning of the year. There are many trends and there are many friends in the room. So let's get around the horn. Get the show started. January ish 7th. 2025. The year of Silicon Valley. Hostile takeover of the White House lot going on. We have a special guest today. Paki McCormick. Luck of the Irish. They're magically delicious. Do we have anything? Do we have a lucky charms box to commemorate Paki's? No. Where is the lucky charms box? We had a cute app. Do you like lucky charms, Paki?
- [01:03]
Paki McCormick
And are you iron lucky charms in a while. But I do like lucky Charms. Of course.
- [01:06]
Howard
And you are Irish cereal.
- [01:07]
Paki McCormick
First save the marshmallows.
- [01:09]
Howard
Oh, such a great cereal. Yeah, but you know, when I have milk now at my age, I fart a lot. And. And that's our first mention of fart coin. Sound effects the we have Paki McCormick visiting from New York. We have the AI whisperer. Down the bottom square we have the AI whisperer. That is his whisperer. That was an AI produced fart from Siri. That was from Google. Gemini, you have me.
- [01:41]
Michael
200 billion parameters were used for that.
- [01:44]
Howard
Displaying some of my artwork from around the world. That that is Adam Bain got me that Napoleon on a horse right there is the first piece of art I ever purchased, which is fantastic.
- [01:55]
Michael
And don't forget your unicorn. The unicorn over there.
- [02:01]
Howard
There's a lot of significance to the unicorn. And then there is my New Yorker magazine that looks exactly like me. Me sitting on a coach looking at Ellen saying, do I need to remind you I have a huge Internet following? And that is my docs in there. So it's a perfect New Yorker photo. Top left square. JC all star charts survived Disneyland over the holidays. Can report back that it's expensive. And then Phil Pearlman.
- [02:29]
Phil Pearlman
You gotta be long.
- [02:30]
Howard
Really? All right, we'll get to that. And then Phil Pearlman who is sporting the stock twits old logo sweatshirt.
- [02:38]
JC
Old school. This. You know, this sweatshirt is so huge on me now. I pulled it out. I was like, I'm going to go old school. It's like five sizes too big. So you know, got to go, got to go.
- [02:49]
Howard
We but within five minutes we would have complimented you, Phil. But thanks for complimenting yourself. Okay, Phil, get us going. We got a lot to talk about. Many trends, many friends. Good to see you boys back. Great to have Paki. Five different thinkers on this Show. Take it away, Phil.
- [03:05]
JC
Okay. So, Packy, great to have you on the program. You're just doing the coolest stuff in the world, and it's a perfect timing to have you on. We're glad you canceled a couple weeks back on us because this is perfect. Because last night we're gonna get. We're gonna talk to. We're gonna talk to Michael about last night in the Nvidia thing. And it's like, it's so much bigger than people recognize, like, what's going on there. And you, my friend, are right smack dab at the intersection of media and AI, which I just love. How's the view? Like, you know what's going on?
- [03:44]
Paki McCormick
Yeah, I think we're. We're kind of hanging on until AI takes all of our jobs, until it's doing this, till it, you know, until it writes my newsletter for us. But right now, I mean, so we've been playing around. For me, it is like not a core part of the strategy at all yet. I hadn't been writing really a ton about it. I haven't really been investing in it because I think there's either. Either people are going to lose a lot of money or there's a lot better people at it than I am. But we have been experimenting. So I hired two. Two awesome kind of twins, 19 years old, I guess they just turned 20 from India. And we've just been cranking on different projects that we're playing around with. I think you still need to be pretty technical. And they are. So I just have now with them and AI, I can throw a million ideas out there, and we're just building shit. We were talking this morning about how, you know, there are big funds. You know, my fund is me. And now these guys, like, there are big funds who have good analytics and can track a bunch of stuff on a bunch of different companies. Now, pretty much, we're building that with two guys and some AI and a swarm of agents to track all the companies that we're interested in, what they're talking about on social media. Like, all of that kind of stuff is really fun. The other day we. I guess it was almost a month ago now we launched Boring News, which pulls from Polymarket, based on the odds, kind of some of the biggest markets in the prediction markets at any given time, runs it through a pipeline that they've made, comes up with the script, runs it through my voice with 11 labs, and now it's even auto generating. And we're kind of in there for right now, but Twitter threads with like, the whole, here's what's going on in the news, and it'll just kind of. We're going to automate that more and more and more. We might add, like, my avatar at some point, so it just looks like me delivering a newscast. There's just a lot of fun stuff that you can do. I don't know if any of it is like, you know, it's going to revolutionize the. The business yet, but I think in aggregate, we're going to throw a bunch of stuff at the wall and, and see what sticks and I think learn a bunch in the process.
- [05:37]
JC
Are people listening to that? To that podcast? I mean, dude, it's wild. Like, I'm like a dog. Like, you know, like when a dog looks at you and it's confused, like, what's going on? Like, I. I listened to the podcast and I did that because I was like, wait a minute, that's him, but that's not him. Like, what, what, what are people listening?
- [05:54]
Paki McCormick
It's pretty crazy, right? I'd say we probably get like 50 to 100 views on YouTube and then like, you know, 50 to 100 across each of the different podcast things, and then thousands of views on. On Twitter. I think once we kind of like, as we kind of tweak it and make it more breaking newsy and add my avatar and all that, it'll grow. But it's been like, kind of slowly growing. I think people have, like, started adding it to their morning routine now. And so it's just like five minutes. You put it on double speed. It's two and a half minutes in the morning, and you get three kind of interesting stories that you wouldn't have. Wouldn't have otherwise. The cool thing, though, I think with all of this and the value of experimenting right now is that we just now have this pipeline. So the, the guys refactored it the other day, so it's like kind of five agents that do each of the different steps. And now we can throw a bunch of different stuff through that pipeline, whether it's related to the companies we're looking at, different kind of news sources, whatever. We can just do a bunch more with the architecture that we've. That we've built. So I'm just going to kind of kind of doing projects as experiments to see what works, but also to build kind of the tech stack in the background that we can just keep throwing more stuff at.
- [06:57]
JC
It's like, do you. Are you too young to remember Max Headroom?
- [07:02]
Paki McCormick
I'm old Enough to know the name. Too young to know what it is.
- [07:05]
JC
It's awesome.
- [07:07]
Michael
It's coming. We're all going to have one.
- [07:09]
JC
Your next. The next thing I see is like there being a video of your AI head reading that news. Like, don't you know? And it's like, it's kind of a ish looking, but it's kind of real. That was Max Headroom.
- [07:24]
Howard
That was mtv.
- [07:25]
Michael
Meta is introducing it, right? And they're testing it right now. Not Max. Max Headroom, but AI Packy Headroom.
- [07:31]
Paki McCormick
Yes, that's something. Meta's doing it. Epic is doing it. And so we played around with that a little bit. Like, you do still need a bunch of skill to get it to be any good. And so, you know, we found a couple of guys who were going to do it for like 100 bucks on fiverr. And it turns out that they actually didn't do a very good job. And it looked nothing like me. But there are people out there who can do a really high quality job. There was Dwarkesh Patel, did a podcast with W. Who's like a kind of anonymous or pseudonymous blogger who didn't want his face out there. And so they did the whole podcast with Dwarkesh's real face and then Gurren's kind of metahuman avatar from Epic. And it was pretty good. I mean, it doesn't look like a real human yet. Like, you're not going to be confused and wonder whether or not this is a real human. But it's pretty good. Like it makes you believe.
- [08:16]
Michael
Six months conversation.
- [08:18]
Paki McCormick
Six months.
- [08:18]
Michael
Six months. Six months minimum. Or Max.
- [08:22]
JC
So crazy. So you. Okay, so you're an integrationist. That's how I'm kind of like thinking about you. You take different systems and you, you don't mush them together.
- [08:33]
Phil Pearlman
You, you, you're more.
- [08:35]
JC
There's more elegance going on than I think even you modestly let on as you're talking about this, because you're like, we're just playing. You know what I mean?
- [08:43]
Paki McCormick
I think there's more elegance than I probably know about. And I think that's what Iman and Sahaj are working on is figuring out how to make the system elegant. Really, for me, like, I do think there is a lot of value in all of this stuff. I mean, Howie and I've talked about this on the crypto side in the beginning, there's just a lot of value when you see something exciting getting out there and just playing with the stuff and kind of seeing what Happens. So now I can throw ideas out and be like, would it be possible to do this? And increasingly the answer is yes, more and more often that it would be possible to do it.
- [09:10]
Howard
So if we have time, Phil here, I don't want to interrupt Pack. It's the same thing, right? Like I'm, I'm a, I'm a. JC's a little more curious and tech savvy is younger. Phil, you're like me a little bit Packy on the, on the. Even more curious and able to play with these things. And Michael obviously was born to play with this stuff. So for me, what I'm saying, as per Packy is yes, they were sitting around doing a video, doing our video strategy, right? Because who think about any strategy you're in. Like, software is so difficult right now because people should be building one or two person companies, right? Like, they shouldn't be thinking about Web2 and building, you know, raising a Series C $100 million round. They should be thinking about how can I launch a product, one or two people and get to profitability soon. That's AI. But even in content, Phil, I was like yesterday I was like coming up with like the history of this and creating history shows for stocks and going to ChatGPT and, and saying, create me a script of the history of Google with these parameters against this chart and what would have taken writers maybe two weeks gives me. It spits out a script if you write the right prompts. And now I can just have a, you know, so, so content and media, I think where Paki is going, like, we're finally at this point where it's like where Twitter started. When Twitter started, the Internet became fun and silly, right? LinkedIn was a little bit serious. Facebook was like dating. And then Twitter came out and it was like this. And it wasn't even on the iPhone yet. It was, it was on the BlackBerry on the web and it was just the fail whale and went wrong. We could be all these characters and. And it was so creative because there were no rules, right? The early people and, and to me, that's where we are both with AI and at the same time, that's where we are with, with crypto with Meme coins, right? It's so fresh there. You know, the only rules are there are no rules. There's no one to call to like get help. You're just exploring and creating and mashing stuff together. And so we're really at that like 20067 moment again. But the tech's better. We're Coming into an administration that doesn't care about much. So you're going to be able to play with it and send it out. This is going to be one of the most creatively destructive. Like I wrote about it this weekend, where everything is up for Grab Borders Media. What is money? What is a company? What is, you know, what is content? So really exciting time for. For not boring.
- [11:43]
Michael
Howard, you hit it on that.
- [11:44]
Howard
Full disclosure. Full disclosure. Because I'm an LP in PACU's, one of Packy's funds. Just so you know. Go ahead.
- [11:51]
Michael
No, I just want to say that it's been two years since ChatGPT. We think about AI as ChatGPT, what you guys are talking about and what Paggy's doing. This business of just being massively creative with AI. That is what it is about. To take off the tools, the capabilities, the hardware, the software. When we talk about Nvidia in a minute, I'm going to talk about a little bit about this. In six months, what people, like early adopters like Paki and me as Corson are doing, it's going to be available to many millions and billions. You're going to be mixing and matching. We're going to look back in a year or two and say what we were fascinated with. Just chatbots. It's going to be so quaint in just about a year of how mainstream this is going to get in terms of the experimentation and the creativity.
- [12:45]
Howard
Yeah. And there's only a few people you have to follow. I always go back to Fred Wilson, but I remember in 2021, he wrote about stablecoins and I'm like, okay. And then NFTs came out and people were. And it just were too hard for me. I know JC is a much earlier adopter and some of them work, but it's still too. You know, I went to look at some old wallets. I'm like, what the fuck was I doing? Like, they're still. Still don't buy into the whole thing. And. And then there was Axie Infinity and Andreessen and Tokens. And I'm like, never. I never bought into it because I'm like, what? And everything felt just too. Not like a toy. Everything just felt like a. Like a. Like everybody was grifting, everybody was telling you a story. It still felt much like just pushing for the next thing. And then everybody kind of gives up and you get AI and now you get meme coins. And so we'll talk about that. But, like, the silliest things are fun again. And I Don't, I don't think until it's fun. Do people play with it enough to create utility? And so I think that's kind of the moment here in 2025, 2026. Okay, Phil, what else?
- [13:54]
JC
So, Packy, perfect segue to my next question for you. And that is you're an integrationist. Howard's really talking about play and magic right now. You know what I mean? Like, it's just everything's fun again. And I remember exactly what he's talking about early in Web2, you know, Twitter goes to south by Southwest, everything. Everybody's having fun, man. It's like, you know, what did you have for lunch was exciting? And everybody knew it.
- [14:19]
Phil Pearlman
Everybody.
- [14:19]
JC
It was, it was awesome. So you have mentioned this idea of the crossroads between not just AI and media, but technology and magic. Just speak like super fascinating. Just speak to that.
- [14:36]
Michael
Yeah.
- [14:36]
Paki McCormick
So I've used magic in a few different ways. I wrote about maybe a year and a half or so ago about kind of different magical feeling product experiences and how rare those are. And that's kind of one piece of the magic. What I've been writing about recently though is it does seem like there were, and Michael and I were talking about the anti gravity stuff a little bit ahead of this, but does feel like there's this kind of big move back. And you've seen like Wall Street Journal, they talked about the rise in Bible sales, for example, and that's like a small part of it. But there's a big move back to religion, spirituality, consciousness, whatever you want to talk about there. And I think associated with this kind of like UAP disclosure stuff, I think that the very funny thing is most of us on this call would agree the next 10 years are going to be crazy. We're definitely going to get a bunch of nuclear power, we're going to get robots, we're going to get really smart. AI starship is going to keep working and it's going to take stuff to Mars and we'll talk about the radiation stuff, but at least it'll take stuff tomorrow. And like, we're pretty sure we know exactly what the next 10 years are going to look like pretty much within like some band on the timing of how things are going to play out, which like almost certainly means that that is not how the next 10 years are going to play out. And to me the biggest risk to kind of a lot of this stuff is, you know, I don't know if you saw the Cyber Truck Bombers manifesto and like, God, it's not a Manifesto.
- [15:50]
Howard
It was a fortune cookie, whatever.
- [15:53]
Paki McCormick
Like the. The anti gravity stuff that has been, like, bubbling up a little bit, maybe physically impossible. But then there's this podcast that, like, NASA sponsored that just came out. I don't know if you guys listen to that, which was awesome. Where they had HAL put off and a bunch of other people talking about real labs kind of doing research on a bunch of this stuff. It just feels like is bubbling right beneath the surface. And if we're so sure that the next 10 years are going to look like they're going to look like, I bet at least one or two of these kind of like breakout, really kind of like, you know, the future is here, but not evenly distributed, or tech is undistinguishable from magic. I think some of that stuff bubbling under the surface is going to break out. It could be, you know, trans, transcranial, you know, ultrasound or whatever. Like these different little things that right now seem absolutely crazy that lead to, like, mind control or like, whatever. And I don't know which. I think they all. Maybe these, like, 1% chance things, 1 of which is going to hit and blow up everything else. That's kind of the moment that I think that we're at, that we're at right now.
- [16:53]
Phil Pearlman
So we're just a question. Can I get a question in Paki? This is great. I love all this stuff Howard says. Like, Howard's giving me way too much credit. I don't know anything about any of this stuff. Love you, though, Howard. I have a real question, though. Are you. Are you buying one of these? Go2Robot dogs. Are you getting one of these?
- [17:09]
Paki McCormick
You know what for? What was it, like 16,000 or 16?
- [17:12]
Phil Pearlman
No, no, no. 16,000 for the human, 3,000 for the dog. It's not bad.
- [17:17]
Paki McCormick
Not bad. I do with the two kids, particularly in the house. What my wife and I have been talking about a lot recently is that we want a Chinese manufactured and kind of controlled robot dog running around our house. And so we've been thinking about buying one of them, actually.
- [17:31]
Michael
I love robot dogs. I bought the first Sony robot dogs, the IVA, 20 years ago, and I bought every upgrade since then. I typically bought two. One to play with, one to put in on a shelf because they're collector's items and they're awesome. And what's coming next, AI driven, is going to be extraordinary for the masses.
- [17:52]
Howard
Can I. Is this illegal? If I pit my robot dog that I buy against my real dog, best. Best dog wins.
- [17:58]
Michael
And I keep going, there'll be fight Clubs for robot dogs.
- [18:01]
Howard
Is there a fight club for robot dogs and is that illegal?
- [18:04]
Phil Pearlman
Fights for robot dogs.
- [18:05]
Paki McCormick
Michael on the Eagles after his. His kerfuffle was transcendent.
- [18:11]
Phil Pearlman
So you anything morally wrong with getting two robots to fight each other? Like an MMA thing? Wouldn't that be cool? Like whoever.
- [18:18]
Michael
There was a TV show where there were teams fielding robots fighting each other.
- [18:23]
Phil Pearlman
That's cool.
- [18:24]
Michael
And that was a. That they remember. What was it called back you probably.
- [18:27]
Howard
It was called Rockam Sockum Robots.
- [18:29]
JC
There's a, there's a club at my kids school that they were wheel like.
- [18:34]
Howard
They get together like Rockham Sock and robots.
- [18:37]
JC
Like there were no kids. The other has a blazer blade or something.
- [18:40]
Howard
That that era of Rockham Soccer Robots. There were no high school shootings. Your two kids got their thumbs on a Rockham Soccer Roebuck and you knocked the other guy's block off and peace ensued. So we should bring back some of those toys. Although I think some of those were awesome. That was my angel, guys. Bringing those toys were fantastic because you could get out your aggression. Go ahead, Phil.
- [19:01]
JC
Hey, pack your last question. Then we're going to move on to important things like fuck, when is there a dark side to this potentially? Because like I Remember like Steve Jobs 2007 or 2006. IPhones could change the world. Everything's going to be better. And now everybody's like addicted to their phone, checking, checking, checking. Like they have OCD and there's a dark side to it. So is there like potentially a dark side?
- [19:27]
Paki McCormick
100%, clearly 100% dark side. I think there's mostly light and I'm optimistic about it. And I think ultimately consumers kind of get to choose what they want. And there's this has like such wide ranging applications that I think it'll do a bunch of stuff. And there's also obviously dark side and there's going to be people who stop thinking because they outsource that to their AI. And I think we'll atrophy there a little bit. For better or worse. Maybe BCIs come in at the right moment. It doesn't actually matter that our brains have atrophied because we can just plug in. But you lose a little bit there. I do think that's why there is the push or part of the reason there's a push to kind of spirituality and consciousness. Like as AI gets more powerful, what can our brains do and what makes it special to be a human? I think that's part of it. But like a hundred thousand percent there can Also be a dark side to all of this. And there will be like, that's. There was a book, the Master Switch by Tim Wu, and he goes through the history of all these different communications technologies. And each one like the radio was supposed to be like, we're now connecting a global brain. And school won't be a thing anymore and everyone will just know everything they need to know at all times. And it's like, you know, it's not as bad as people think and it's not as good as people think. And I think that ends up being the case with pretty much all these.
- [20:37]
Howard
Yeah, the. Here's, here's what we've got. You've got, you've got. That I've seen. You know, I have a 27 year old, Rachel, just turned 27. My son is 25, dating a girl in London because of Hinge. Like we have this convergence of things. Um, I was talking with my daughter and she's like, dad, what if I don't have. You know, this Elon would have cringe. But my daughter was talking to me confidential. She was like, what would you, what would you think if I didn't have kids, right? And she wasn't saying. And I'm like, are you a lesbian? That was the guy's first thing. And she goes, what are you talking about? She goes, no, I just don't want to have. Maybe don't want to have kids. And then I got into it with her and I'm like, they feel things, right? This is where the spirituality comes in. They're not getting any. They're just so inundated with negativity and like this tick tock and YouTube, their minds have been reprogrammed. But then when you dig into the question and really ask them, they're feeling very. They just don't feel like they have a lot of hope. And so the other thing that's coming up is she has a lot of these sensual, like sensuality. And that's a big trend too. Not just like everything's like pornhub, pornhub, pornhub. But on the other side of that, there's a lot of these sensuality companies that are teaching people, you know, products around engagement and sexuality. So I think you're right. Like there's this whole counter revolution trend to like, you know, being in the moment, you know, so, so, so hard to predict. I just think that both sides are playing out against each other against this tech background.
- [22:15]
Michael
The one thing I'll just add to Howard, to your point about you Know, young people in terms of how they're affected by technology. A lot of the stuff I don't think is, you know, binary. I think it's just moving up and down their lives, lifespan. So, you know, I had one of my nephews who's very close to me, said to me just a couple of days ago, you know, look, I, you know, he said, uncle, you know, you've been talking about reading books like for years, and I don't read that many books. My generation doesn't read that many books, you know, and that's generally showing up in the data. But, you know, he's like 23, 24, and he said, you know, I need to start to read books again. And it's like he discovered it, he figured it out, you know, what he, what we did maybe five or 10 years ago. He may have delayed it, but he is going to be doing it maybe another five or ten years from now. And he'll, he'll have the same set of experiences and potentially he'll be smarter and wiser because, you know, many books that you and I, we all have read, you know, if we had read them in our 30s, you know, they have a different impact than when we read them in our 20s.
- [23:24]
Phil Pearlman
Michael's right.
- [23:25]
Michael
So these are all very smart people and they're gonna, they're, they're gonna come figure out all these things. With technology, generally for the better is. So I, I'd like to be optimistic on all of this. I think it's a great point, Howard.
- [23:38]
Howard
Yep.
- [23:39]
JC
I'm doing pagan Rachel, by the way. So let's go. I'm going pagan.
- [23:44]
Howard
Okay. I'm still pornhub. You know what I do I, you, Worship.
- [23:48]
Phil Pearlman
I'll go.
- [23:48]
Howard
I sign is an. I sign it as an under 18 and as my father in law. So that's out in the open now. My father in law is getting the weirdest emails, by the way. But I know he's not listening.
- [24:00]
JC
All right, he's being tracked far coin. So it's a phenomena. It's the best of what we're talking about. It's the worst of what we're talking about right now.
- [24:12]
Howard
It's not the worst, Phil. Let's just quickly get in and then I'll pass the horn because everybody's go.
- [24:17]
JC
No, no, no, go. This is a fascinating topic and I think we touched on. I mean, there's a. Phil, you know, there's, it's the most interesting chart in the world. There's an underlying philosophical thing. We don't have to go that deep. But just, you know, Fart Coin is worth over a billion dollars right now.
- [24:32]
Howard
Okay, so, okay, so let, let's just go through the. To progress.
- [24:38]
Michael
By the way, you can do that on your Tesla too. Tesla Elon has built it into the cars as well.
- [24:45]
Phil Pearlman
If you guys, if you guys want some fun facts, you know, whether you like it or not, far coin's worth $1.2 billion in market capitalization, which makes it more valuable than 60% of the stocks in the Russell 2000 index. Just for perspective, it is now a top 10 meme coin. It has now exceeded the value of other Meme Coin bellwethers, such as the MOG Coin Pop Cat, for example, obviously Peanut the Squirrel. This is now worth more than all of those. So.
- [25:19]
Michael
Okay, I'd like to add a slight amendment given the, you know, pro and con aspect on this subject. I would make, I would, I would humbly say it's not worth that much. It's trading that much.
- [25:31]
Phil Pearlman
Right? So that's what it's worth.
- [25:32]
Michael
There's a big difference.
- [25:33]
Phil Pearlman
That's what it's trading for.
- [25:34]
Howard
Our first fight of the year.
- [25:36]
Phil Pearlman
That's how this works.
- [25:37]
Howard
This is my segment. This is my segment. So just chill. You guys will all have your time. So this is why it's fun. Okay, let's go to Web two. When Twitter was fine and everybody and venture capital and seed investment was very innocent. Then Zurp, what did Zurp create? Zurb created all kinds of false companies, false profits, false cap tables, false everything. It's not any one person's fault. It's just the macro environment in the world that we lived in created this bubble. Okay, and, and, and what did we get from the Web 2.0 bubble? We've got Uber, we got Airbnb. I don't know. I think Facebook, you could almost call pre that the faangs were kind of pre. So you got to Uber, Airbnb, around the horn, or any other interesting company that has a Web two that are global booking was probably before. So Airbnb, Uber, Robinhood, Coinbase, few other ones maybe that have stuck around for all the trillions invested. I would say there was a huge misdirection in Web two and a lot of it could have been macro, blah, blah, blah, blah, blah. And then along comes crypto, right? And everybody and crypto started in 2010. And, and, and then along comes SPACs, and then along comes Covid, along comes Axie infinity, along comes NFTs. And we were told that all these things were going to be spectacular. Right. And so many hundreds of billions of dollars were allocated to cap tables that are in never never land. Right. And I think what far coin represents, as JC said, it's bigger than forgetting about how many private companies it's representing bigger. It's trading at a market cap that's bigger than 60% of the Russell. Think of all the companies and all the people that think they're important. And I think this is what this era is signifying. This is the beauty of meme coins. It basically is telling you take your shitty fucking venture backed idea and everything you know about the world and do not take yourself so seriously because you're not worth anything if you're not public. This is or if, if you don't have revenue and profits. So this is kind of like a you to both Wall street venture capital companies that take themselves so importantly they never are going to make money. And all these companies even that are public and are grinding away. And so that's what I'm reading into this. It's the complete reversal of how money is talked about and how companies will be formed and how things will be valued. And we've gone from a world of Ben Graham, you know how things are valued to an object or a token or a meme that is only valued by price. And what's spectacular about fart coin and Butthole is that there are no fundamentals. It's starting out, it's the entry point is all you need to know is that nobody knows anything and you're trading against people in real time. Price based. Best trader wins. Now the evolvement of where this goes, this isn't going to stay here but this is where we are today. And what's exciting about this is it's live 24 7. You can play with $1, you can hook an email up to Spot Dot dog and trade these. It's a whole new system of like figuring out how the market works, tracking where the wallets are, where's the data analytics. Bloomberg is going to get built from the ground up again based on this. Bond markets are in a five year bear market. I mean that's the most important data that Bloomberg ever started with. So now you have this whole new market and a whole new way to learn how to invest. This is one of the coolest things that have come along since Robinhood. Robinhood in a sense wasn't even that cool because it was just a new UI on an old game. This is a new UI on a new game, on a new set of Rules played globally and there's no roadmap yet for all this. So that is the fascination that I have with this. And I think what makes it even funnier is the players have named the objects to make you laugh and to distract you from the actual utility of all this. So I think most importantly, it's a reminder to people, if you're going to go build something, go first look at the meme world and say before you take yourself so seriously, maybe go learn how to invest and trade because your company's. We don't care about your company because far coin is bigger than anything you could ever build. So anyways, that's the way I look at it. Pass it around the horn. Go guys. And, and, and, and the unicorn. Remember, everything was a unicorn. Guess what? Everybody was chasing unicorns. Fart coin is, is gas, is just empty space and is worth more than all those thousands of unicorns in 2020. So I think it's just a fuck you to the whole monetary system in many ways with.
- [30:58]
Phil Pearlman
I mean, I just think it's part of the overall rectal rotation. You're seeing not just the fart coin but, but the butthole as well. And, and look at crypto dick butts making new all time highs yesterday. Granted, correcting today, but new all time highs yesterday for dick butts. So I mean, you're seeing it in the NFT space as well. I mean, you know, we laugh when we say rectal rotation, but that's what it is, right? It's a theme. It was the dogs, then it was the cats, then the squirrel, the frog.
- [31:26]
Howard
Now you got penguin, then you had penguins.
- [31:29]
Phil Pearlman
It's just rotation. That's all it is.
- [31:31]
Paki McCormick
So go from, from rectal though. Like there's nothing funnier really than, than this. Where. Where do we go?
- [31:38]
Howard
You have.
- [31:39]
Phil Pearlman
It's been pretty funny along the way. They keep one upping each other. I mean I would.
- [31:43]
Howard
This is, this is kind of. This what I call Brian Norgarter will have on. Yeah, I was talking to him last night. One of the early Tinder guys. One of just massive bitcoin maximalist and wallet holder. Him and I are thinking about all this as software and he calls it market. You have to have a marketing conspiracy theory, right? You can't just go on Facebook and buy your ads, right? If someone pitches me a company, right, I need to understand their conspiracy of how this works. The reason meme coins are so interesting, the conspiracy is Goldman can't play because it's too small. And all the people who finally Believe in bitcoin are now snickering at meme coins, right? All the snickers for 10 years of Bitcoin and Ethereum. I can't snicker anymore at Bitcoin or Ethereum. So where did they move their snickering to? Meme coins, right? And so you have this perfect storm around meme coins, right? You have this, you have stable coins, you have Solana, you have these machines that can build out meme coins. You have all the distribution for it, and you have two ends of the spectrum that can't play. You have the serious people who would probably love to get in here, but they can't move enough money to make it work. And then you have all the bitcoin people now chasing Michael Saylor and copying his strategy, and they think meme coins is stupid. So it's kind of one of those perfect storms for all this to happen. And you're onboarding hundreds, maybe tens of millions of people to the. To the game of trading. So it's like this is the greatest thing that happened since Robinhood and Coinbase. Michael, I know you're thinking about it differently.
- [33:11]
Michael
No, people always want to have fun. I mean, if it's not this, I mean, I'm going to age myself. But when I took eBay public in 98 at Goldman, 12% of eBay's revenues in the first quarter had to do with Cabbage Patch Dolls. They were the most valuable thing. Kids loved them. People loved them. They traded for thousands of dollars. And it was a market. And a lot of people learn about trading through those things. Now we're doing it digitally through these things. The methodology, the tools change, but the. The thing that drives the quest for fun and frivolity, et cetera, is essentially human and it's eternal.
- [33:54]
Howard
All right, you want to go to the regular microphone. What's next? And then the other thing I would say, Packy, anything on this? I know you were early to these meme things. So where is your head today?
- [34:02]
Paki McCormick
Yeah, I haven't been spending a ton of time because I think if you spend a ton of time, you can do well on this. And if you don't, you're just gonna miss it. And so you're kind of either all in or. I agree, I respect your all in ness on it. The thing I will say is what I love to see and then I thought was also interesting was I don't know if you followed like the Mira token, the Sequichen thing, where essentially like somebody made a meme coin, gave half of it to, to our friend Siki Chen, whose daughter has a rare kind of brain tumor. He's using it to fund research, you know, one lab in particular, but to kind of fund research on this rare disease. And this is like a thing that I've been calling for for ever is that if you're going to trade this stupid shit anyway, that has absolutely no purpose. Make the treasury go to something good. And so you just add this little positive sum thing into it and nothing else changes. It might mess with your point on nothing matters and you can't take it too seriously, but I do think occasionally it's kind of beautiful that you're just pulling money out of thin air for good causes is this really pretty amazing thing.
- [35:02]
Michael
That's awesome.
- [35:04]
Howard
So that is what I meant though. We went from very hard to use and this stuffy attitude of fundamentals and values and Warren Buffett and the S and P. And I'm, I've slowly come around like, man, if I'm going to be in the market indexes is fine. If I'm going to go look for alpha, I want to like go look for weird unique alpha that like can last a while, right? Like me picking stocks is not fun anymore. No, I am not 100% down the rabbit. I have kids working in the office now, chief of staffs and other kids that have spot accounts and it's too hard. This is like you said, this if you want to try and make a buck in the crypt in the meme coin market, it's 24 7, 365. That's not for me. What's for me though is it's here. It's not going away. Even if 99% of these go to zero, the next iteration will be more of like these mirror things, right? Like so you're you, you have the public markets and then you have the public meme markets. These are based on fundamentals, but slowly becoming mimi palantir, Tesla GameStop, right, SPACs. And then you have 100% memes and the next iterations will come this way and there's going to be. They will move closer and closer to each other and that's what's exciting.
- [36:21]
Paki McCormick
And it ties back into all the stuff we were talking about earlier too on the AI front. And I think this, that the thing that matters ultimately will be the strength of your meme or the distribution or whatever. If it's easy to make software, then whoever has the biggest audience wins. If it's easy to make content, then whoever has the most audience trustworthy there's also a human angle there, but, like, the meme and the attention really, like, the easier it becomes to make stuff. The meme and the attention is really what matters. And so I think it's like an interesting kind of way of figuring out how you price that kind of just like totally naked when everything else that's kind of a little more quote, unquote, real is moving that way anyway.
- [36:59]
Howard
Yeah. And then the other example is like, Reddit got public, so a meme coin might hurt them. Because if you really want to be involved, the Reddit thing, you own the stock. Right, but what about all the Reddit competitors that may never be able to, like, get financing? Right. This may be the new way to build communities. And, and, and memes may just be goodwill, right? That may be the culture marketing aspect of what that goodwill was on a balance sheet. So memes may just be a balance sheet item at some point. Yeah, but, but people are just. That's what's so fun about it. Like, you could just make up stuff. And this goes to the marketing conspiracy. I think those that know marketing, I think engineering is other than if you're doing engineering at the edge, space robots and stuff, the engineering that was popular from 2008 to, you know, go to Stanford, be design picks pixels and move pixels around, you're walking dead. The world is short great marketers because no one wanted a marketing department for 20 years. Everybody thought they could code their way out of everything and just buy their way to growth. And so now you really, this is really going to show how, how, how who the great marketers are. So we kind of got a big giant move and a big vacuum in how many talented marketers are out, out in the world. Elon, obviously king marketer, he's proven more than just a CEO and a businessman. He's, he's, he's the master of marketing. Trump, like, two people in charge of the country are kind of masters of marketing. Dana Hill just became board member of Facebook. Like, do you think you, you can laugh at that and go, that guy's a master of business and marketing? So the people that know how to get attention are really in control right now. So it's just a really interesting moment. And that's kind of where meme coins go. All right, J.C. what do we got next? Phil?
- [38:53]
JC
Yeah, J.C. why don't you pick out, you know, five of your favorite charts coming into 2025 and, and just walk us through what you're seeing and what is the, you know, what are the most Important variables at this moment.
- [39:08]
Phil Pearlman
Yeah, listen, I'll run right through it. Stop me at any time or we could talk about it after. But listen, just very simply, you know, the S P and the NASDAQ just put up, you know, banner years. When you combine both years together back to back, those are some of the best back to back returns of all time. I think only four times in the history of the S P 500 going back to 1950, since even before the S&P, only four times have we've had more than 20% returns back to back. This comes after going into 2023. So in other words, two years ago, going into 23, consensus from Wall street sell side was that the S&P 500 was actually going to fall in 2023. That was the first time this century that that's happened. They could not have been more wrong. Obviously historic return since then. So just further reiterates why we look at this sort of sentiment. These are active investment managers running for the the hills. I mean they're just scared to death. Lowest exposure to equities amongst these financial advisors since April of last year. Look at American association of individual investors. Basically 300 boomer Republicans from the Midwest essentially is kind of how I look at this group. And I think it's valuable because again, at extremes we want to take the other side. This is AAII is the next one below. Right. So again, you know, down near lows, these are individual investors. We want to take the other side of that. Meanwhile, credit spreads are as tight as they've been this entire cycle. Right? So if you're going to see stress in the market, you're going to see it in credit, you're not seeing that at all. And then what I think is really most important, and then we'll get into some ideas. What I think is most important is the next three charts which are if mathematically, literally, mathematically we know that we cannot have a bear market or a correction of any kind without the prices of stocks falling. Then why don't we take a look at how many stocks are falling in price in order to determine whether or not the market's in. A correction like that just seems like logical common sense. So if you go to the next chart you could see, go to the, go to the list of new lows, you'll see that the list of new 52 week lows is non existent, does not exist at all because the prices of stocks have not been falling. Now obviously we're in a bull market. It's hard for stocks to make new 52 week lows because they're nowhere near that. So if you look short term at the next one, look at the new one month lows, again, no expansion whatsoever in the number of stocks, large caps, mid caps or small caps that are making new lows. And look at, look at three month lows, again non existent. So in order for there to be a bear market or a correction of any kind, the prices of stocks need to fall. Facts only, right? So this gives us an idea of whether or not stocks are falling and if more of them are falling. That's the whole idea. More and more of them are falling. As the bear market gets worse, the correction progresses. We haven't even gotten anything that's even started yet. So until we see the prices of stocks falling, we're going to continue to air that this is a bull market and we want to buy stocks and we want to look for opportunities to put money to work. One day that's going to change, guaranteed. Right? Facts only. But that hasn't happened yet. So why are we going to fight trends is how I look at it. So we've been putting money to work in semiconductors, seeing rotation into there. If you did not get rotation into semis, bull market canceled as far as we were concerned. So we don't think the bull market's over. So if mathematically you think this bull market's got legs, you got to be buying semis because they have to buy semis for this bull market to continue, in my opinion. So that's, that's what we're doing.
- [42:37]
Howard
Yeah, you got a perfect storm of rectum rotation and sector rotation. You got the asml which has been in the doghouse for all, was up 60 points yesterday. Michael's been writing about that last week there. You know, people are writing off these companies on one bad quarter, one bit of news. But they're so integral to each other as AI explodes. So it's going to take a lot to break this market. But I also wouldn't be surprised if it's just we struggle around here, right? Rates still suck, the dollar's fucking jihading. There are some, we're the best, it's, we're the best country in a really shitty world, it seems like, but it's pretty good. I mean look at the charts and it's like, yeah, there's some weakness. But yeah, I'm with you jc.
- [43:22]
Phil Pearlman
Yeah, I mean the op, I mean it seems to be the opposite of, of the world's in a bad place. Germany is making new all time highs in the German Dax, Israel's making new all time highs. China just had the biggest momentum thrust in the history of Chinese equities in September and they're hanging on there very, very well. Look at across Europe, look at France, look at Amsterdam, look at Oslo making new all time highs in Norway. Look at Sweden, look at the United Kingdom, both The you the footsie 100 and the 350, they're all at all time highs. So Italy making new 16 year highs. Greek, Greece making new 10 year highs. Singapore making new 17 year highs. Australia, new all time highs. If the dollar rolls over here, that's it. That's all that matters. If the dollar rolls over here. Holy. These equities are going to rip.
- [44:11]
Howard
Yeah, I'm worried about the other thing. So it seems obvious that it has to roll over here. The other thing that worries me is it seems like the rates have to kind of bottom or in other words top meaning like the, you know, I'm thinking of the tlt. It just feels like the market's pricing and it's so obvious that the dollar is going to come in and rates are going to start coming down. So I'm worrying about the opposite watching. At some point they got to kind of give because the market's pricing in.
- [44:39]
Phil Pearlman
That they're, they got you're 100 right on the rates. Howard. If the dollar falls to the dollar and the rates have been moving together. So if the dollar falls, rates are going to go with it. I think I'd be really surprised if that didn't happen. I mean listen, you never know but I think you're spot on. I think they're going to move together and if you believe that, look what's happening this year so far in 2025. What's been ripping? Brazilian real, Korean one, you know, Taiwan dollar. These things have been ripping all year. That is very, very new. And by the way, the dumb money is betting that the dollar is going to rally here. Look at commercial hedgers, look at speculators, how they're positioned in the futures market. Hedgers are have the the longest exposure to euro in years. Small specs are betting on a euro collapse. Man, I like the other side of that. But if the dollar falls, I think you're right on the rates.
- [45:27]
Howard
I also got to think, sorry and then I'll let Mike go is think about the experts that, that came out of Web2 and I'll name names, Chamath and Sachs and all these guys and they have jobs at the White House, whatever. God Bless. But I don't know how many times I had to listen to people send me clips of these guys saying the dollar was going to implode. Right? And here we have a president now who has a history like he's going to, he's, he's not going to be caring about the deficit. Trump. And meanwhile the dollar's screaming all time highs. So I would say also, you know, people don't like looking at charts and kind of this intermark analysis but be very careful who your global macro experts are and who you're listening to in 2026 because this is, this is if you're thinking about global macro, stop. Because there's many false prophets and meme coins are here to teach you about price and price behavior and intermarket beh. So really, really is something you want to do in 2025 is learn about intermarket behavior and start trying to predict the largest, most liquid markets in the world. Because I don't know how many times JC we had to hear that the dollar was going to implode. Meanwhile it's fucking screaming and how we heard the rates are going to come down. Trump, you know, and rates won't budge it in.
- [46:47]
Phil Pearlman
But Howard, to your point, think about how the dollar's been ripping particularly since the fourth quarter last year. How well stocks and crypto held in despite that dollar ripper I think was really impressive.
- [46:59]
Howard
Well, it's freaking and with, and with.
- [47:00]
JC
The 10 year yield increasing too. And yet we're you know, 2, 3% from all time high.
- [47:06]
Phil Pearlman
That's on the long end. Ones and twos have, haven't been making new highs at all. So that's really on the long and that's why the yield curve has been steepening.
- [47:13]
JC
Steepening.
- [47:14]
Michael
Right, right.
- [47:15]
JC
Okay, let's talk about Nvidia last night. You know, our news cycle AI corner, AI corner. The news cycle now is so fast it's dizzying.
- [47:26]
Howard
Right.
- [47:27]
JC
Everything's noise and things happen that are significant and then we forget about them in about 30 minutes or 2 seconds. And occasionally though, things happen that are meaningful, you know. And so last night's presentation at CES is one of those situations that I think is like so key. Go back, watch it again. I'm going to watch it tonight. I'm going to make popcorn and watch it tonight with my kids. I want them to see it. Michael, tell us about what went on with Nvidia last night and the significance of it.
- [48:10]
Michael
Yeah, I think Nvidia's presentation by Jensen Huang yesterday. He does a lot of Keynotes, obviously for years this was one of his most important ones. I think in hindsight we're going to come back because he, I think, underlined and released a number of key things related to his Blackwell series of chips that are now going to be very important, not overnight, not next quarter, but over the next two to three years for what he's calling the physical AI market. So at a high level, you know, we know Nvidia is Nvidia. They're, you know, at three plus trillion dollar market cap over the last two years, tremendous company. They have an 80, 90% of the large language model data center growth opportunity which where Microsoft is planning to spend 80 billion just on their own. Everyone's spending money extraordinarily aggressively to build data centers. So that's a given. So the big question investors have had is Nvidia, what happens when the competition comes in? It's a commodity. What's the next act? And he underlined two areas under the label physical AI. He's basically make the point that we're going from digital AI, all the things we're talking about, chatbots, all the things Packet was talking about, to AI, basically making a difference physically on machines of all types. He highlighted two areas. Cars. We already know AI is a big thing in cars. Tesla. Elon has taken Tesla to a $1.5 trillion market cap on that. And the second thing is robots. Not just robots, humanoids that walk around with arms and legs. He was on stage again with two dozen robots, but also robots that are industrial robots in warehouses, industrial applications, et cetera. And he again pointed out the point that Elon's been talking about for a while, which is that physical AI, automated cars, and Elon is also in robots with Optimus robots are going to be probably bigger markets than the markets for AI that we're seeing over the next three to five years. What was unusual, what is important, and this is why I would encourage everyone to look at the watch. The keynote, if you want is he outlined a whole bunch of products, hardware, software that work around the Nvidia ecosystem, where millions of developers are already building the stuff. And so it's much easier for them to take stuff they know and build things for robots, things for cars, etc. I'll have big write ups on all of this stuff a little bit later. But in many ways he also embraced open source in a big way. He took Meta's Llama, very successful Llama models, and he's created a whole bunch of small, medium, large models that are open source. That are tuned to use in cars, for gaming with his GPUs and for robots. And he also introduced several computers that we're going to be able to buy individually. Everything from three, $400 to $3,000, $4,000 computers that we're going to be able to connect to use on our desktops. And in a year or two when these things are really cooking, we're going to need data centers less. One of the things I've talked about a long time is that we're seeing mainframes and PCs and smartphones that took 30 years, it will compress in five years. Nvidia announced products like their digits computer, which is a $3,000 computer, will be available in May that will be able to run 200 billion parameter model on your desk. So you don't have to pay anybody, anybody to run that. Once you buy that computer, to train your models on your data, etc. These things are when they're really baked and available, they're going to be. These markets are in tens and hundreds of millions. So you can see a lot of visibility on Nvidia's long term opportunity. I've been calling it the new Intel. They're basically taking their hardware and creating a software empire. And my conviction level on Nvidia has gone up a lot since seeing this. We knew the direction he was going there, but he announced real products, real software, real hardware and there's a roadmap that is so, so clear. If you're watching this, last thing I will say is that, you know, everyone talks about Nvidia's valuation, et cetera. I did a post over Sunday talking about Max 7 to Batman. Barron's had a great article. They took all the max 8 companies or anything that's worth over a trillion dollars in the US and did peg ratios on them. Nvidia is at a 0.6 PEG ratio even though it's been one of the best performing stock. And Tesla is at the high end at 3.2 PEG ratio. Everyone else, the Microsofts, the Amazons, et cetera, between one and two. The reason I'm going there is that one of the reasons Nvidia, Tesla today at 1.2, $1.3 trillion is worth more than every public auto company in the world, including in China. Okay, so that valuation basically says the world believes in robots and Roel believes in robo taxis, which is Elon is, as Howard said, you know, these people are amazing marketers. Elon is the master of marketers and he's done this. It's extraordinary. But if you look at the fundamentals on a bottom up basis, the kinds of things that Jensen is introducing and rolling out at scale, basically every car company is going to be able to do what Tesla did with synthetic data using Nvidia hardware and software that Nvidia that Tesla did in the last couple of years. Everyone talks about Tesla having two and a half million cars that have cameras and grabbing a lot of data. What Jensen announced yesterday is going to allow car companies like Toyota to create their own billions of hours of synthetic data for their own cars, for their models. So overnight I see, I think he's level leveled the playing field on the car side. He announced a partnership with Toyota yesterday which got lost in the, in the big flurry of announcements that one keynote could have been five keynotes. There was so much in it and there's a lot to talk about. But I just want to highlight that Nvidia's longevity, the visibility as a, as a long term investor has gone up. And if you put Tesla's, and this is not a stock recommendation, but Tesla's PEG ratio and excitement about robots and cars and AI on Nvidia at 0.6 peg multiple and put it at 3 multiple Tesla Nvidia today could be worth over $10 trillion. It shouldn't be but because we have to see all this stuff delivered. But market's already valuing Tesla at one and a half trillion dollars as big as all the entire auto company industry on the planet. So the market's already excited about it. So I just wanted to highlight that.
- [55:26]
Howard
And Tesla's begging for products. So it's one hand wagging the other. So it's like Tesla needs to be a customer in Nvidia before the other way around right now.
- [55:37]
Michael
And Tesla is a huge customer and Jensen treats Elon very well. He helped Elon create the first 100,000 GPU data center and delivered all of that and talked very highly of Elon's ability to execute and hats off to that. But I'm just saying that if you're excited about robots and AI and cars and so on, Nvidia is as much in that game, in fact much more than anybody else out there. So I just wanted to. That was one of the key things I took away from yesterday.
- [56:10]
Howard
The key thing I'll take away and then pass it off to Phil, my key takeaway. And listen, because I know you'd have the Raptor and I'm long Nvidia but the key takeaway to me is we are here the Nifty Nine as I call them, I don't know, they call them Magsam. But there's nine tech companies that make up 40%. So let's call them. They used to be the Nifty 50. I call them the Nifty 9. You know the names Batman.
- [56:29]
Michael
Yeah, yeah.
- [56:32]
Howard
So with the Nifty 9, they're not going anywhere. And God bless, thank goodness there's nine of them and they're bigger. And Microsoft's spending what, 80 billion on. I mean I think the government should be going to the Nifty Nine and saying listen, we'll match dollar for dollar. If you're going to spill 80 billion a data set, build less 10 billion while you're at it or give up rent it. Make sure you carve out space for us or you know, Costco building housing. And then there's three retailers I call, we call them the shopping Gods, Costco Walmart and Amazon that are 20% of retail sales. Interesting. There is of the Nifty 9 and the shopping Gods, Amazon straddles both. Right? So look for Amazon to be sneaky good in the years ahead because they actually cross over from the Nifty9 into the shopping gods. Right? They're the only company that's a crossover. But Costco's also doing what the government should be doing. They're building housing above Costco's. Right. Like you know, the original WeWork idea. So, so there's a lot that these companies, these 12, the nifty nine and the shopping one. So there's 11 because Amazon's car. There's 11 companies that are going to solve a lot of problems for this country and they have to do this while fighting each other off. There has never been a better time again, never been a more interesting time, but a harder time to start a business because you have to start the right business. And there's never been an easier time to start a business because if you start the right business, no one cares. You can build a two person company that prints money and no one will ever care. So really think about the type of business you want to build in a world where these ginormous companies exist and are going to have to act like governments in many ways and they're going to be slowed down by that and they're going to be fighting each other. So when the T. Rex is fighting King Kong and that and, and, and fighting Godzilla, Godzilla, when they're fighting, let them fight, right? Go fucking just stay out of their way and go build something important. And where, where the meme coins are telling you is like, don't build something unimportant because you. We're trading fart coins over here. Go learn how to trade or go build something meaningful. And you've got the tools to build. You got APIs, you've got AI, you've got mentorship up the wazoo, you've got research that you can do up the wazoo, you've got networking you can do up the wazoo. So there's just, there's something for everybody if you put your head to it. So I think, I think as much as we hate the Magnificent Seven or the Nifty Nine, they've got their own problems and they're out there doing it. So I think just like having. Being an investor will be very different going forward. Pack, he's learned this. He entered the business late investing. JC is an expert at what he does. Mike, you've seen three, you've seen all the cycles. Being a Goldman in the 90s and I've seen many cycles. This one's very different to me because when I'm going to fund a company, right, I've got to think through how, what is this company they're building and how should it really be built? And what does VC mean in a world where fuck, my LPs could trade meme coins and the indexes and buy the Magnificent or the Nifty Nine? And why do they need to tie their money up for 10 years when interest rates are 6%? So I think a lot of investors need to really start thinking about how special their fucking sauce is when there's all these great liquid ways to invest money. And I think that's the biggest change and it's not going to affect that many people. The VC industry is not that big. But, you know, this is a real you to the venture industry, all this happening, right, all these new ways to form capital, etc. And by the way, it's great for VCS as well, because they should be focusing on stuff like space and robots and highways and better housing and nuclear and defense and so. So it's kind of like a perfect storm for people being productive again if. If everybody behaves.
- [60:35]
Phil Pearlman
So, Howard, on the deal side, when you're doing the deals, like on a safe that comes with a token, what is it like a safety? Yeah, what do they call it?
- [60:44]
Howard
Yeah, very hard. Listen, we invested in more crypto managers so they would deal with it. We don't love that, Right? Social leverage again. I'm 60, so we're learning packing May have a better idea, but you have to be very careful. Right. Like when we look at stuff now, it's like, who owns those tokens? Are they owned in an offshore entity and like, are they owned by the company itself or how they're going to be distributed? So there's going to be a lot of fighting going on and people, you know, pulling rugs over each other on cap table. So you got to be very sophisticated in cap table management package. Do you have any insight onto that?
- [61:19]
Michael
Yeah, no.
- [61:19]
Paki McCormick
So I think the SAFT or the safety has gone away.
- [61:23]
Howard
Yeah, I didn't like that whole idea.
- [61:25]
Paki McCormick
The safe or the preferred with token warrants, which is also just an interesting little trick and not legal advice. But because the warrant purchase price, which is like 500 bucks, is what counts against. You're not qualifying. You're not qualifying. So more people can trade, can invest in crypto companies without having to register, which is just like a little, a nice little thing that avoids annoyance. I mean, I think it comes down to same as everything that the people you're dealing with. Like, if you're investing in kind of shady crypto companies that I'd be very worried about figuring out who custody is, the tokens, and when they're going to transfer them to you and what the lockups look like and all that. If you're dealing with good founders and legit people who are working with good law firms, I think you're pretty much safe on that point. It's just then on you to figure out, all right, what account am I custodying this to? When do I trade? You're asking venture managers to now become kind of traders. Like, I'm in this position. I have some, some things that have come liquid and I'm like, I don't know, do I, do I sell it now? Do I wait for the bull market that everybody's saying is going to come? It's just a whole different piece of it that you have to worry about. Whereas with equities, it's kind of like if you get lucky enough to go ipo, your, your kind of window, your window ends and you just kind of let it, let it rip into the market or you distribute it to your lps. I'm not about to distribute tokens to a bunch of my LPs. I just think that's more than I'd want to put on, put on people. And so it just adds that kind of extra layer of complexity there.
- [62:44]
Howard
Yeah, I think we're getting to the point where you pay for expertise again. Right. Like there was a period where Vanguard said listen, basket of stocks is, is way better to go if you. I'm willing to pay for assets to be managed if the person has expertise. So with crypto I was like, instead of me holding wallets and worried about all my capital, I'll pay 2 and 20 to let someone else sweat that out. Risk is their at it too. But that's their job, J.C. like their job is to not get hoodwinked, whereas my job is running a crypto deal is the chances are I got two things to worry about that I get hoodwinked and I don't even know what I'm doing in the space. So I think we're coming to an era where you should be paying for expertise, you know, with this. Zero fees was a nice thing with indexing. And by the way, it ain't broke. And there's something to be said about indexing in the stock market. And you know what? You know what we started worry about? There's only 500 companies and no IPOs. Guess what came along to solve that? Solana and Meme Coins and Spot Dog and Finance. And now the US is going to play catch up. So it's a really, you know, like, for what it's worth, the US is going to play massive catch up here because of, you know, Sachs and Musk and you know, putting people that like Silicon Valley and growth in the, in the White House. So it's a mad experiment, but that's what we got going on. It's just a great time to be an investor. Great time to be an investor.
- [64:14]
JC
So we're going to wrap it up and I got one more segment left and I just want to call this don't be an idiot. This is just a little like the intelligence intelligent degenerate or don't be an idiot. If you're watching this, you know, it's a wild time right now. It's a wild west and we described it earlier. It's like play or it's very high speculation. We're talking about Dick Butts and, or whatever that is and Fart Coin and it's wonderful. It is a, it is a one. That's never not funny, by the way. So good one. It's a one. It is a wonderful time. Right? But the laws of human nature still apply. And we all are subject to loss aversion and anxiety related to loss and the behavioral correlates of loss aversion and the anxiety that comes with loss. And the behavioral correlates are to pretend that it's not happening and to just like pretend that you're not losing. And so any money that you put in a far and it's like Dadaism for the 21st century or whatever, it's great and it's crazy and it's total absurdism. But if you're putting money into this every single cycle that we've seen and I've been around for a lot of cycles, I remember the dot com bubble like crazy. There were people who got so deep in and so greedy and they put money that they didn't have, you know, non speculative money, money that they needed to pay for their kids college or to pay for child care or to put food on their table. The people who took their money for those things and put them in pets.com and put them in, you know, Global Crossing and companies that did not survive that went to zero. And so I'm just saying don't be a fucking idiot right now. To everybody, the end of this program. I know we talked about these things. I know we laughed. No, we had the little fart track and you know, it's all wonderful but don't be an idiot. Like don't take all your money, don't you know, take out a second mortgage and invest it in fart coin because you think it's going to 10 billion because somebody, somebody on you know, stock twits or Twitter told you that it was going to do that. Don't do that. Don't go overextended. It's just a friendly warning. Do with it what you will. You probably might not listen. Maybe some people will. I just want to end it with.
- [66:56]
Michael
That just, just warning. I'm going to say I'm in.
- [67:00]
Howard
All right boys, good point. Welcome to the show. We'll have you back and it's great to have you, Michael. AI Coroner Phil. Thanks buddy.
- [67:09]
JC
Adios.
- [67:10]
Michael
Thank you everybody.
- [67:11]
Paki McCormick
Cheers.
- [67:11]
Michael
Happy New year.
- [67:12]
Howard
Happy New Year.