350: Ross Gerber on Tesla and Bitcoin

Ross is the Co-Founder, President and CEO of Gerber Kawasaki Wealth and Investment Management. Ross has become one of the most influential investors on social and in traditional media. In this conversation, we discuss the 2008 financial crisis, how he leveraged social media early, what his Tesla thesis entails, what the Tesla bears got wrong, his lack of belief in cash, bitcoin as a global reserve currency, government corruption, and negative yielding bonds. =============================== Crypto.com is the only all-in-one platform that allows you to BUY / SELL / STORE / EARN / LOAN / INVEST crypto all from one place. Join over 1 million users currently using the Crypto.com app. Download and earn $50 USD using my code ‘pomp2020’, or use the link https://platinum.crypto.com/r/pomp2020 when you sign up for one of their metal cards today. =============================== Did you know only 1% of day traders actually turn a profit? So why are so many of us mistaking picking stocks for serious investing? You can’t control the markets, but you can control your risks. So how do billionaire investors control their risk? They invest in blue-chip art. If that sounds unusual to you, you’re not alone. But the ultra-wealthy have been investing in art for centuries. And since 2000, art has outperformed the S&P by an incredible 180%. Just a few years ago, a single work sold for $450 million! Imagine... Being able to invest in the very same paintings as millionaires and billionaires, at a fraction of the cost. Masterworks.io is an exclusive platform that makes it as easy as trading stocks online. And the best part is: you don’t need to know anything about art. Their experts will create a custom portfolio to meet your investment needs. With Masterworks.io you don’t have to choose between big risks and big returns. Sign up today, select PODCAST and you can skip the 70,000 waitlist to get first dibs. Just go to www.masterworks.io and select PODCAST. Hurry, this offer expires =============================== Pomp writes a daily letter to over 50,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at https://www.pompletter.com

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Ross Gerber is the co-founder, president and CEO of Gerber Kawasaki Wealth and Investment Management. Ross has become one of the most influential investors on social and in traditional media over the years. In this conversation, we discuss the 2008 financial crisis, how he leveraged social media early, what his Tesla thesis entails, what the Tesla bears got wrong, his lack of belief in cash, Bitcoin as a global reserve currency, government corruption, and negative yielding bonds. I really enjoyed this conversation with Ross,

• 0:44Anthony Pompliano?

  and I hope you do as well. Before we get into this episode, though, I want to quickly talk about our sponsors. The first one is Masterworks. You gotta go check these guys out. Did you know that only 1% of day traders actually turn a profit? So why are so many of us mistaken picking stocks for serious investing? You can't control the markets, but you can control your risk. So how do billionaire investors control their risk? They invest in blue chip art. That's right, it may sound unusual to you, but you're not alone. The ultra wealthy have been investing in art for centuries, and since 2000, the private art market has outperformed the S&P by an incredible 180%. Just a few years ago, a single piece of art sold for $450 million. Imagine being able to invest in the very

• 1:27Anthony Pompliano?

  same paintings of millionaires and billionaires at a fraction of the cost. Well, that is what Masterworks does. Masterworks.io. It's an exclusive platform that makes it as easy as trading stocks online. And the best part is, you don't need to know very much about art. They have experts standing by that will help you create a customized portfolio to meet your investment needs. With Masterworks.io, you don't have to choose between big risks and big returns. You can sign up today on their website, select Podcast in the tab, and you'll skip their 70,000 person waitlist to get first dibs, all because you listened to this podcast. So go to Masterworks.io, select Podcast.

• 2:10Anthony Pompliano?

  And you'll skip the waitlist. Masterworks helps you buy super expensive art, but only without needing millions of dollars. Fractional shares. Masterworks.io. Go check it out. I love it. No brainer. All right. The next sponsor is crypto.com. They're an all in one platform that allows you to buy, sell, store, earn, loan, or invest crypto. All from one place. They do a lot. Buy, sell, store, earn, loan, or invest. I can say it fast or slow. You can join over 1 million users currently using the crypto.com app. And my favorite part is that they'll give you 50 US dollars if when you're signing up, you use code POMP2020. So crypto.com, they've got a fantastic URL. It's the place where mass adoption is occurring.

• 2:54Anthony Pompliano?

  It's an all in one platform that allows you to buy, sell, store, earn, loan, or invest crypto. All from one place. Go check them out. Lastly, don't forget that I write a daily letter to over 50,000 investors about business, technology, and finance. I break down complex topics into easy to understand language while sharing my personal opinion on various aspects of each industry. You can subscribe at pompletter.com. Again, pompletter.com. All right. That's it for today's advertisements. Let's get into this episode with Ross. I hope you guys enjoy.

• 3:29Speaker 01

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 3:54Anthony Pompliano?

  All right, guys. Bang, bang. I've got Ross here. Super excited about this. You may win the award for the most number of questions I've had to send in. So, uh, welcome. Thank you for doing this.

• 4:05Speaker 02

  Most of it was heckling, I'm sure.

• 4:08Anthony Pompliano?

  Well, you also cheated. Just so everyone knows, when I asked for the questions, I tagged the person on Twitter. Well, you started answering the questions in the comments.

• 4:15Speaker 02

  I didn't realize, you know. I saw the questions. I get excited, you know.

• 4:20Anthony Pompliano?

  I love it.

• 4:21Speaker 02

  People are engaged with finance. You know, it's a lonely thing in my household because my wife doesn't care at all. She doesn't follow the stock market. She doesn't care what I do. She cares if I was losing probably, but it's great to see so many people in the public. That's why I like Twitter. Interested in the stock market. It's what I love. You know, it's fun.

• 4:41Anthony Pompliano?

  Absolutely. So for the couple of people who are watching who don't know who you are, let's start with just a introduction on yourself and then kind of walk us through your background and how we get to Herbert Kawasaki.

• 4:54Speaker 02

  Well, I don't want to take the whole podcast up with my life story. But basically, you know, I was fortunate. I grew up in a household where my mom was an investor and my grandfather was an investor. So when I was a kid, I would go over to my grandfather's condo in Marina Del Rey and they were not rich. Okay. They like were now in hindsight, kind of like middle, lower class in a way. But my grandfather wanted to be retired. So he had this nice little apartment in Marina Del Rey. He would play golf and then he would sail. And I thought it was the best life in the world compared to my dad, who worked like 12 hours a day and he's a dentist. And, you know, I was like, Grandpa, how do you do this? It's better than Dad, you know. So he would show me, you know, the stocks

• 5:37Speaker 02

  he would own, which were basically in the 70s and 80s were like utilities and military companies that would like pay high dividends. So he taught me about dividends and buy and hold and all this kind of stuff. But then, when I was a kid, my mom would get me to save. Like, I worked as a waiter when I was 16. That was my first job. It was great. I was in Bel Air working at this pizza place for a guy named George Santa Pietro. And if you look him up, boy, there's stories around this guy, right? And I was in the middle of it as a 16 year old, but I was making money. Eighties, you know, and so my mom made me invest and I, she said, give me the cash. We'll buy stocks and I bought Disney. She taught me to buy Disney. I, I started following it.

• 6:20Speaker 02

  So then concurrently, I've always played music. So I'm a musician. And so when I got to college, I, I went to University of Pennsylvania and I thought I was going to go to Wharton, be a business major, but I started taking classes there. I really didn't like it and there was also no girls in the classes. So I was, I was pretty much, I'm not going to do this. So, so I went to communications, which I liked a lot more and there were females in those classes.

• 6:48Speaker 02

  And during college, I started trading stocks and it was like ninety two, ninety three. So it was post ninety one recession. So things were starting to get better and the Dow was at three thousand at the time. And I remember when the market rallied thirty points, I was happy. So when I graduated from college, I got into the investment industry because the music industry, which I had, I worked at Atlantic Records in Geffen for a little bit, for a couple of months. And then I was like, this is going to collapse because of technology, because of Napster and all that. And I was like, meeting with people and they were like, look kid, you don't know what you're talking about. So I decided to get into financial services because I was writing newsletters to people, lawyers, friends of my parents about entertainment stocks.

• 7:33Speaker 02

  And they were like, you just can't do this. You have to get a license. So I ended up getting licensed through an independent investment firm called Sun America Securities, which was here in Los Angeles, was run by a guy named Eli Brode, who was a genius. And this other guy, Jay Wintraub ran Sun America and they were super smart and they saw the coming retirement wave. And so we sold retirement products. That's how I learned. I sold IRAs, I sold mutual funds. So when I was twenty three, I was like selling mutual funds and, and, you know, basically making phone calls, you know? And, and so it, it grew from there. It grew from there, but I learned in the nineties, what I always believed, which is that technology is the best thing we do in America.

• 8:18Speaker 02

  And if you invest in technology, you have the best opportunity to build wealth. And because I naturally understood technology and I loved consumer technology, I was able to find investments at the time, whether it was Dell or Gateway or AOL. AOL was kind of my first big score. You know, I was really able to figure out that if we, if I could see what was happening and invest in those things, you could make much higher returns. So that worked out obviously very well in the nineties. So to fast forward to the financial crisis. So I was working for this Sun America firm. And by the time I was 28, I was, I was managing 250 employees and 15 offices for Sun America. We were like a regional firm within Sun America.

• 9:04Speaker 02

  So somehow I was responsible for a lot of people. By the time I was 28 and we were doing pretty well. And then the, then we had dot com and dot bust. And then fast forward to the financial crisis. So after the financial crisis, I, me and my partner were like, fuck all this, you know, fuck AIG, fuck, you know, JP Morgan. We're going to start our own firm because these people, they're so greedy. They, they put us all and our clients all at risk, you know, and it was a nightmare. So I, I got, I lost pretty much everything in financial crisis.

• 9:43Speaker 02

  I was, I was down to like $70,000 and, and then I had put, I bought a house. And then at the low, my house caught on fire. So in December of 08, for real, December of 08, my house was on fire. I had, I was down to my last couple bucks. I didn't have debts, thank God, but I had a couple of properties I lost too. And I was like, dude, this sucks, you know, this really sucks. So I decided to start a firm. That seems like a horrible idea too. But, um, but I figured, and my partner figured that if we, if this was the beginning of the rebound, this would be ideal time to start a firm because new firms would be born and we would hire a whole new set of young advisors and just.

• 10:28Speaker 02

  We do this industry digitally. So that was sort of our innovation was, well, we're small, but we can look big digitally. And so we built a website. We were the first firm on Facebook. We're the first firm on Yelp. We're the first firm on Instagram. We're the first firm to use all these social media tools. And we used to get, I used to get in a lot of trouble, actually. But then one day the SEC was like, well, we want to make rules. Will you help us make rules? So we were in the pilot program for Facebook with the SEC. This was about 10 years ago. And so by leveraging social media, we've been able to build a huge firm and, and still growing like crazy. And we're still doing it. And so our goal is to democratize financial advice.

• 11:11Speaker 02

  You know, be able to provide people, no matter what their background is, financial advice. From young people who have their first jobs to millennials who are now buying houses and getting married. To baby boomers who are trying to figure out how to earn interest in the zero percent world. So. And we've been very successful being an independent firm fiduciary. We pick stocks, which is also rare. So our philosophy is index plus alpha. So we use indexes. We build around indexes with our, with our stock picks. And we only focus in stocks in areas like technology where we're experts. So areas that I'm not an expert, like biotechnology, we own the indexes, you know? I can't tell you if Moderna is going to have a better vaccine than Pfizer.

• 11:53Speaker 02

  You know, I just am not qualified to do that, but I own them all, you know? But I can tell you what I think about Zoom and DocuSign and where Spotify is going. And, you know, whether Apple has a great strategy in that, that's where we focus in the stock picking. So that's, that's the lifestyle.

• 12:10Anthony Pompliano?

  Got it. And so when you went to start the firm, I think that, like you said, there was pretty much nobody on social media, even in 2018, 2019, like social media was kind of just even starting.

• 12:20Speaker 02

  It was starting. Yeah.

• 12:21Anthony Pompliano?

  Right? And so kind of why focus on the digital platforms? And then when you talk about you would get in trouble in the beginning, like what were you guys doing and kind of how did the regulators look at this and all of that?

• 12:33Speaker 02

  So. So part of it was like, we came from South America, which was big, and then they were bought by AIG. And we used to be like, we're with AIG, we're AAA rated, a Dow stock. How safe could you be, right? So when that all falls apart, you're like, why don't we just start a new firm? Because nobody cares about Merrill Lynch or AIG anymore. I don't think anybody invests with Merrill Lynch thinking like this is some big, solid company. Because they've gone out of business already once, you know, they were safe. Let's make of America, really, right? So we were like, how do we look big? And how do we get to lots of people when we don't have an ad budget? And, you know, I, you know, I started the company with like my own money.

• 13:18Speaker 02

  Like, we didn't, we don't have private equity, we don't have VCs. We don't have Hightower, you know, some backer, you know, we're, we're Gerber Kawasaki. And, and so like I came up with my own dough. We started the company, I wasn't making any money, you know? I, I was getting paid from my other company to leave, basically. And, and so that helped me survive through the first two years where I, I basically didn't make any money. Because we went from commissions to advisory. That was the other innovation that, not innovation, but strategic change we made. Was we sold products and earned commissions through a broker dealer. And then in 2003, I started doing advisory and I was like, this is a better way.

• 14:01Speaker 02

  Except you make a lot less money, you know, on the short term. And so when we started GK, I knew it would take five years just to make it worth it to switch from advisory, from commissions to advisory, but I knew over time that would pay off. And, and boy, has it, you know, boy, I, I don't know how people survive selling products now, you know?

• 14:23Speaker 02

  So going back to social media, how, how could we get big? So we sat in a room when Facebook was pretty new. And back then, if you shared a post, your friends actually saw it, remember? And like, it was actually all your friends on Facebook. So Facebook started, it was really cool. Like, what they've turned this into is a disaster. But like, when it started, it was really cool. So like, the first day, we all sat in, in our room and we shared it. And, and I didn't really have any fans because I was older. So, you know, like, any friends on Facebook, I was like, my friends are like figuring this out too. But in the first day, we got a thousand fans and I was like, wow, you know, like this works. Like we just shared it and people followed our firm and so we started posting.

• 15:05Speaker 02

  But our compliance department, not the regulators, stopped us immediately. They're like, what are you doing? Well, it took them a little bit time to figure out what we were doing. And I said, well, what's the difference between this and, you know, I don't know, sending out a letter? Or, you know, or doing a seminar, you know? They said, well, because you got to pre-approve everything and whatever. So we started doing that. We would pre-approve our posts in advance for like a week. So I write posts for a week, send it to compliance, they would say yes or no. And then we would post and ironically, when the financial crisis, this was pre-GK actually. But when the financial crisis happened, they fired the entire compliance department at Sun America.

• 15:47Speaker 02

  So I was like, yes, you know, like nobody's going to check for years, you know? And that was true, actually. And so ironically, like nobody checked us for like two years. Okay, that we were just able to function on social media without compliance. And then AIG got all these like people that started running AIG for the government.

• 16:10Speaker 02

  And I was like, okay, the gig is up now, you know? And this lady calls me from head of compliance for AIG. And she said, I see what you're doing. And I was like, all right, the gig's up. And she's like, no. We want to use you in the pilot program with FINRA and SEC. Because you're the only one doing this and actually, you know, this is going to happen. And they were actually really smart people. The people the government brought into AIG to save it did a great job, you know? And so they were like, just keep doing this and let's make up rules. And so we did that with the SEC and at this time AIG. And we helped create the standards that they use today. But that being said, we were able to reach our target market, which was younger,

• 16:55Speaker 02

  upwardly mobile people, better on social media than traditional media. I use traditional media too. So, you know, I'm big in traditional media and I've used that. But what I've found in my career is almost nobody watches financial television. But millions of people are on Twitter, Facebook, Instagram, and they do consume financial content that way. And it's very effective. And so we continue to do it and we continue to innovate with this with live streams and other things now. And now we can't even see our clients. So from Zoom webinars to we've moved our business completely virtual and we were already prepared to do it.

• 17:36Speaker 02

  But we've had like the most seamless transition to virtual like I could have dreamed of because we were already so far. But now we're back in the office and stuff, but we're continuing to use all the digital tools. So I guess you could call us almost like a hybrid digital firm now. But it's been working. People like working with people. I don't think these digital solutions are the panacea that everybody wants. So yeah, it's been super good.

• 18:03Anthony Pompliano?

  And it feels like when you were early on social media, it really was kind of the outbound communication, fill the top of the funnel with people who could potentially be clients. And that was kind of how you guys did it rather than direct mail or any sort of other type of outreach that other firms would do? Or were you also doing kind of the more traditional outreach along with social?

• 18:23Speaker 02

  No, no. So like the whole idea of our firm, like 100% is digital. Like they're like, where's your brochure? It's our website. Like we had an argument the other day because they, these guys wanted to make a brochure for ultra high net worth clients, blah, blah, blah. I go, you think they're going to read a piece of paper? You know, even these old people look at websites, you know? And, and, and our printers hated us, you know, because we used to print tons of stuff. And I go, sorry buddy, you know? And, and I just had a bunch of young guys ask me for business cards. I was like, You guys want business cards? Like, you can't even see people, let alone like, give a business card out, you know?

• 19:00Speaker 02

  So, so the idea of our firm and where we make margin was leveraging social media is a lot cheaper than traditional advertising. It just is. And then, you know, using PR and getting TV spots is a lot cheaper than TV commercials, which we're actually running TV commercials now because I do want to run stuff on the Lakers. So, um, we have some nice commercials that we made for the, for Lakers. So God willing, we'll have some sports, you know?

• 19:29Speaker 02

  But I think that's the genius of social media. You've done this too. You built your whole, uh, podcast and you have a huge following on Twitter and, and, and it's like, wow, you have this power in the media that traditionally you would have never had in the old days. And, and that democratization of information is a genius thing because now the media has moved into garbage land and people rely on us for information now instead of the media. And so it's an interesting shift what's happened in reliability of information, you know? Um, and so we've become more and more popular because we're the source. And so the, the media uses us for our source daily, but, but same with individuals, they can go directly to us.

• 20:13Anthony Pompliano?

  Yeah, it's very smart. Um, you started out with, I think, kind of early on, tens of millions of dollars in assets. I, I think I saw somewhere online 50 million and then over a billion dollars in assets. So, uh, just, you know, kind of objectively it's working and, and kind of have grown. And I talk a little bit about how the clientele that you guys service, how that's evolved over the, over the years as you've gotten bigger. And then also, um, we can then dig into a little bit to the strategy of kind of this index plus alpha.

• 20:43Speaker 02

  Yeah, yeah. Um, so the client base is basically the same because our, our firm is built around helping people build wealth and then helping people manage wealth, but we do not actually focus on ultra-high net worth. So every other firm, so this was also an innovation, right? So if 1% of people have a million dollars and 100% of brokers want those 1% of people, then you're in a really competitive business. But if they completely ignore everybody else.

• 21:17Speaker 02

  Okay. Then there's no competition for the other 99%. Now, what we found in society is about 50% of people save and invest money. About 50% of people spend all their money and go into debt. And there's actually very little correlation to income. You know, a lot of people have this assumption that poor people can't save, or people don't make a lot of income can't save, and this. There's no correlation. We have a lot of clients that don't make a lot of income, and they save their, invest their money. We have clients that make, not clients. We have prospects that make a million dollars, don't save anything. You know, especially out here in LA. So, I mean, it's easy to spend a million dollars in LA on education alone. Um, so our client base was really focused around the millennial, the upperly mobile.

• 21:59Speaker 02

  Um, we kind of serve the client, a lot of clients of the stocks we own even. You know, Snapchat is next door. Activision is next door. So, we're in Santa Monica, California. So, our business model is focused around younger people that have good careers, invest, getting them when they're young, investing their money, helping them build wealth. But then, these companies, like, over time, see, we're long-term thinkers. Like, when I started GK, I wasn't like, oh, I'm gonna get rich quick. I'm gonna be a billionaire tomorrow. That was not the goal. The goal was in 10 years, like where we are today, to get to a billion dollars and blah, blah, blah. We knew it was a 10-year goal, because so many of our clients didn't have much money at the beginning. But now, it's like, amazing, because they went from 25 and 30-year-olds

• 22:44Speaker 02

  working at, you know, Yahoo, Yahoo's gone now. Um, but Yahoo is down the street, it used to be. And, and now they've moved to being an executive at Snapchat with options and all this kind of stuff. I can't tell you how many questions we get about options and things like that. So, we serve a lot of these tech companies. And it's been, it's amazing how many young people are actually doing very well. And then we serve baby boomers. So a lot of people know that the wirehouses are scams and now they can't, there's no confusion anymore. You know, so when you are a client at Merrill Lynch or UBS, you're being sold products and, and clients understand that now. And they started to understand the difference between a fiduciary and a broker.

• 23:25Speaker 02

  And the performance of the brokers have been horrendous. I mean, the products are garbage. The results have been garbage. We, we see these statements, we take them over every week and it's garbage. Like if you're at UBS or Merrill Lynch, you could be doing way better, but the brokers don't try, you know, they just don't even try. I mean, it's just how they make decisions of what stocks to buy and sell. So those people have now been coming to us in droves because they're saying, look, I want somebody who's really going to manage my money. Not just charge me two fees, advisory fee, money management fee, put it in a bunch of, you know, products, basically, and go play golf. And when your advisor is a better golfer than the client, that is a warning sign. It's just a warning sign.

• 24:10Speaker 02

  Like I could be a great golfer, like I'm good at golf, but I play like rarely because I'm busy, you know, and I have a family.

• 24:19Speaker 02

  And, and it sucks. You know, I lose games I should win, but I, but I work too much. So, so if your advisor is wearing a golf shirt and like showing up to the conference in shorts, you know, come on.

• 24:32Anthony Pompliano?

  I love it. I absolutely love it.

• 24:35Speaker 02

  We go to these conferences and half the guys are wearing like golf outfits.

• 24:38Anthony Pompliano?

  Oh yeah, of course. You have been all over tech stocks in terms of what you like, what you don't like. One that you have probably been more outspoken than others is Tesla. Talk to us a little bit about kind of your relationship with Tesla in terms of when did you first get interested? Kind of what's the thesis there? And then kind of how do you evaluate where it is today?

• 25:02Speaker 02

  Tesla, the love story. Muddy Waters was mad at me because I, I said that I was going to hold Tesla forever. And they're like, you can't marry a stock. My, my dad taught me never marry a stock. I go, I married Apple a long time ago, babe. I live in a nice house. I thank Steve Jobs and Tim Cook and I'm not selling my stock. And I'm not even happy with Apple. So.

• 25:25Speaker 02

  Tesla, it was never meant to be this way, you know, it was just a stock, you know, so IPO'd,

• 25:33Speaker 02

  I think eight, 10 years ago, and when it IPO'd, you know, they were based in Santa Monica, the first Tesla thing. So, you know, once again, when you're in Southern California and you're connected in the tech community, you have access to information that people in New York just don't have. It's just, it's just you see what's happening around you, talk to your friends, and New York, you guys have different sets of information that you have an advantage on, you know, and there's a lot of good stuff in New York too. And I have lots of sources in New York too, but, but LA is about tech and it's about social media. That's what we're good at in entertainment, and that's what I'm good at. And so I have an edge in these industries and markets. I grew up, I have friends in all the companies, I know the CEOs, CFOs, whatever, and, and everybody talks and so on.

• 26:18Speaker 02

  So Tesla came out with this great little roadster car, it was kind of a piece of crap, and I never owned it. And, and we watched it and I, I always, I never really thought much of electric cars, I always liked cars.

• 26:32Speaker 02

  But when it IPO'd, I think it IPO'd at 17 bucks, they had no product, and I said, we're not gonna buy it until they have a product. So, everyone's like, oh, it's so innovative, blah, blah, blah. I go, listen, you know, it's kind of like Nikola, until they have a product that they can sell something, how far can the stock go? So I waited two years watching Tesla, and then the Model S came out. And when the Model S came out, my partner, I went down to Tesla and looked at it and drove it, and, and I'm a car guy. I love cars, I'm not a technical car guy, but I like driving, I like driving fast, I like race cars. You know, I, I just like cars, I don't know, and, and, and I like ice cars, actually, you know, it's, it's not like I'm like, oh, you know, I only like EVs, no, I mean, fuck, I love the Lamb, I love McLaren's, you know.

• 27:18Speaker 02

  And I've been, you know, trying not to buy an expensive car again because people give me shit, and I've been driving this Tesla Model 3, which I like, but I want the roadster. So, so we, so I, I looked at the car and I said, look, if this car is this good, and they can make these, and it's electric, like, there's no way they lose. And at the time, Mercedes was actually the biggest investor in Tesla. And I had talked to some Mercedes people, and they were like, look, we're gonna buy Tesla. And I was like, that would make sense, right? And so, you know, I figured Tesla would get to a point in their technology and a big OEM would buy them. End of story. Like, why would you not do that? And Tesla had bad financials and they were borrowing money from the government.

• 28:00Speaker 02

  So, you know, I was like, so I, so my mom and dad, my stepfather is a very connected person in the government and in, in education, and they were doing some work with SpaceX and NASA. And they had dinner with Elon. And my mom came back and said, you gotta pay attention to this guy. He's a genius. And, you know, I don't say this much, but this guy was off the charts. So between that and the, in the positive, you know, review of Elon's abilities. And my mom's not wrong. Um, you know, I, I was like, let's buy the stock. So we bought the stock and we kind of piled into it, you know, like right at around thirty, thirty-five bucks, I think it was.

• 28:41Speaker 02

  Um, and I, I think it was because we were just betting on the launch of the S doing well. And so right off the bat, the stock rallied from like thirty, and I think that one day it went up like, it doubled or something like a day. I think it was like right after the S came out. And idiot me, of course, I sold some, you know, I'm like, it doubled in a day, like, I'm no idiot, right? And I was on my way to a vacation or something. And I think I originally had thirty-five hundred shares, so I had about a hundred thousand dollars in Tesla and options at thirty. Fuck, I wish I kept that. You know, I, you know, sometimes I'm too smart for my own good. But, you know, when it got to one fifty, I had to sell some. And then it kind of plateaued in there for a while.

• 29:26Speaker 02

  Um, and we, and, and I kept, you know, I kept my Tesla and we kept adding to it. Tesla came out with the Model X. It was a disaster. It was one of the worst launches I've ever seen. Wing doors didn't work. I'm like, Elon's fucking smart, but he's an idiot. And, uh, he wanted to make the best doors ever. We got through that. Then he bought SolarCity. I didn't like that. You know, it was like, it's like a love-hate relationship, but like he kept doing awesome stuff. So we just kept, kept investing and. But then, when the Model 3 started as a mass-produced vehicle, I was like, if they can make this car, like, it will sell forever. But they have to make it. And it turned out that was not so easy. This has been a really painful stock for me.

• 30:09Speaker 02

  Actually, no, no, and I'm glad I've made a lot of money from it now because no part of that was easy. No part of it. So anybody who thinks that this was just some sort of like walk-in-the-park game, it was not. And last year was even more horrendous. So it was basically this horrendous love-hate relationship between these amazing products, this amazing inventor, who constantly screwed everything up because he was overly ambitious and overly aggressive. Oh, boy, right? So, so what happened was, when they launched the Model 3, the stock rallied because they sold all the expensive cars right off the bat and made margin, remember? And that was like the end of 18. And so, we actually survived 18 pretty good. I thought 19 was going to be pretty good because they were scaling.

• 30:54Speaker 02

  But it didn't turn out that way. Scaling wasn't that easy. So, you know, everybody started shorting Tesla hard, and, and a lot of big-time players. And it's not like I ignore these people, you know? I'm like, geez, what am I missing? So whenever I think I'm missing something, I just work harder. You know, I'm like, I gotta study what they're saying, and then I gotta go figure out if it's true, and then I gotta go figure out what's really going on. So I heard a lot of what the Tesla Q people were saying, and most of it was like personal stuff, like they just didn't like Elon. And I realized that was a big flaw. They actually called me, you know, like, it was like Chanos and these guys, Charlie and Chanos, and they wanted me to go out to dinner with them in New York.

• 31:36Speaker 02

  And I was like, you guys are gonna knock me off, I'm not that dumb, you know? And, but, you know, I thought it was interesting, they really were concerned about my thesis, you know? So then, it was like Einhorn, and then, the worst was when Steve Isman from the Big Short came out short Tesla, and Tesla's starting a crater, and I go home to my wife and I said, you know, honey, I think I'm screwed. Even the Big Short guy is betting against me. So... So you know, I don't invest based off what other people say. I invest off my own research. So I called Tesla and I said, listen, I want to see everything. I want to, I want to meet everybody.

• 32:18Speaker 02

  And I want to know what I'm doing. I'm coming up to Fremont and if you can't accommodate me, I'm selling all my stock, fuck you. You know, it's like, sorry. So this guy Martin, who's head of IR, said, I'll take care of you. So I fly up to Fremont. He meets me. I bring my wife because I wanted to make sure some rational, non-stock operator watched this, you know, because she doesn't care. And so we go to this factory, me and my wife and Martin. And I didn't want just a regular tour. I literally went through every fricking inch of it all day long. I walked the entire Model 3 assembly line in the tent, every position. I looked at the car, top to bottom.

• 32:59Speaker 02

  I looked at the machines. I talked to the random employees, I, you know.

• 33:06Speaker 02

  And I walked out of there, I go, these fucking guys are wrong. This place is amazing. They're gonna kill it. They're gonna kill. I've never seen a place like this, like the motivation level, the work ethic, the, the vision, the, the automation. I mean, the factory itself was this hybrid of amazing technology and then like old school manufacturing. And then I met Jerome Gillion. And when I met Jerome Gillion, I realized the shorts were screwed. Because Jerome Gillion is the genius behind Tesla's success. It's really, as much as Elon is the genius with the vision, the actual person that saved Tesla was Jerome. So I, I had this meeting with Jerome and in five minutes, I realized he was a genius, like off the charts.

• 33:51Speaker 02

  He was super motivated like Elon. He was relentless cost cutter, a relentless efficiency driver. And he was a truck guy. But he wasn't from the tech side. He was from the manufacturing side. So I knew if anybody was going to save Tesla, it was Jerome. And he's really the guy who deserves a lot of credit. And he put up the tent. He got Model 3 up in 17 days and he's now a legend at Tesla. And now he's running this Austin plant. He helped get the China plant going. He is the secret behind this. But when I saw that, I was like, I'm going to keep betting on Tesla. So Tesla goes from 260 to, to 200.

• 34:31Speaker 02

  Now I'm getting calls that I'm an idiot, you know, relatives are seeing if I'm okay. You know, and it was like the big short. I was like in my office, like by myself and then, and then Elon started the pedo stuff, you know?

• 34:48Speaker 02

  And people in my firm were like, Ross, we're out, like fuck this guy. And I was like, guys, he's crazy. I get that, but you can't invest with crazy people who are geniuses and expect normalcy. But I was getting pissed. So I fly back up to Tesla.

• 35:07Speaker 02

  And Martin sets up, I go to autonomy day. And it's me, Gene Munster and Gally and Tricia, I think her name, what's her name? Tricia, something at Arc. And Elon's there. Now, I'm not scared of Elon and I don't really care whether he likes me or not. I have millions invested in this company and he's fucking me, you know? So I was gonna talk to him. I was a little scared. He might just be like, blow me off and be like, screw this guy. But I was like, how do I approach it right? You know, and I was pissed off about Twitter. So I approached him with Gene and, and they needed to raise money back then. And I was like, Gene, we gotta get him to stop doing this, you know, because I love Gene Munster. I think he's one of the smartest guys out there and we did Apple together for a long time.

• 35:52Speaker 02

  And then when I went to Tesla, he went to Tesla too. So I was super happy. And Gene is just so smart. And so, and he writes everything better than me. So I just use Gene's stuff.

• 36:03Speaker 02

  So we cornered Elon and I, I, I didn't let him have it, but I was like, look, Elon, you're making it real hard for us and I'm, I can only do so much to help you in the media and this and that. But you tweeting all this garbage. I'm like, listen, I'm big on Twitter too, and I've gotten hammered for really dumb shit I've said. You know, especially attacking Trump and stuff and you gotta understand like, what's the purpose of this? Didn't you say the mission is to, you know, sustainable transport? Well, you're hurting the mission. You know, like if this is the mission, this Twitter shit isn't the mission, you know? And you need to raise money because you have two billion left. And if anything goes wrong, you're gonna run out of money and I'm telling you, they're not gonna give you money if you have to get it. You know what I mean?

• 36:48Speaker 02

  Next day, he keeps tweeting. Next day, they raise money. They do the second, they do that convertible deal. And I was like, the fucking guy's a genius. He knew the whole time when we were grilling him, he was gonna raise money the next day, you know. And, and so we bought that convertible. It was like 2% convertible, converted at 300 a share. So I got 2%. So we bought the hell out of that thing. I got a lot of these bonds, because I figured, you know, at least I'd get the Gigafactory if he went bankrupt, you know. And, and we figured the Gigafactory was worth 10 billion. And, and so we, we loaded up a Tesla, fortunately, in the,

• 37:30Speaker 02

  you know, under 300 range. And, and if you would have told me a year ago that it'd be at 1500, I would have been like, there's zero chance, you know. And it's, I don't think it's worth 1500, nor do I care. But I think Tesla now, from what I'm seeing, is about to breakthrough into just a whole new level of, of success, you know, in, in especially full self-driving. So I'm a super bull still on Tesla. I'm a seller here. I'm not a buyer. I, I've taken profits. I, I have to. It's just prudent money management, especially for older clients that we have who had bigger positions in Tesla, because they had more money. For our young

• 38:12Speaker 02

  clients, we're keeping it because they have long-term time horizons. But like for myself, you know, I had a ton of it. It's like, you know, I can't have 30% of my net worth in stock, you know, I just don't do that, you know. I sleep at night, you know, I, I'm not a billionaire. I'm not trying to be a billionaire. I don't care, you know, I, I'm fine.

• 38:31Anthony Pompliano?

  Is that how big the Tesla position got for you, was 30%?

• 38:35Speaker 02

  I mean, it's still like 20, you know. I, I mean, it wasn't meant to be that way. I had options and, and I had, you know, I had the debt, I had the equity and I had options. So, you know, it's, yeah, it's gotten real big. And, and, and, you know, now it's so volatile. I just don't like, I've made money there, so you know, I have to take profits. I, I, I, see, I believe your only profit is what you report on your tax return. Unlike Trump, right? So like for me, if I'm reporting losses, that means I lost money.

• 39:12Speaker 02

  So I'm okay paying taxes on gains if I make money, you know, but I also try not to have more than 10% of my net worth in any one position. That's kind of like I try to do that. And, uh, and so that's what I'm trying to continue to do.

• 39:27Anthony Pompliano?

  And so talk to me a little bit, when you say 1500 as a position, and again, you know, to be super, super clear, this is not financial advice.

• 39:34Speaker 02

  Right, right.

• 39:35Anthony Pompliano?

  Please don't. Most traditional.

• 39:37Speaker 02

  Please see a financial advisor.

• 39:38Anthony Pompliano?

  Yes. Um, but in terms of just talk through from the process you guys have run and the research you've done, um, you know, the $1500 uh, stock price being too high. Is that something where you're just saying, hey, look, we think it's going to come back down and then kind of for a long period of time, it'll continue to appreciate? It doesn't sound like you're arguing like the Tesla story is over or.

• 39:59Speaker 02

  No, no, the Tesla story isn't over at all. In fact, the Tesla story has just begun. Um, really, um, what it is for me is I still believe a company is actually a company. I run one. So when I open my Wells Fargo account, for example, like there's cash that comes in and cash that goes out and that is a real thing. So when we look at a company, like I pretend like I'm buying the whole thing and it's like, is this a good business? Like I'm still a businessman. I'm more a businessman in a lot of ways. I'm not really a, I'm a stock trader because I'm sort of born to be that.

• 40:39Speaker 02

  But like, but I'm a businessman. So like when I buy, like, that's why we sold Zoom and DocuSign too, and Slack, which I like all the businesses. But at 500 times earnings, I'd be like, it's like somebody coming to GK right now and offering me, let's say 150 million for my firm. You know, it's way more than what it's worth and, and I would have to take it, you know, like it, it's just, you know, that's economics, I guess you could say, you know? And so like, you have to sell if somebody's going to give you a ridiculous premium for your company, you know? So maybe you don't sell all of it, but like. But that's just like smart, right?

• 41:19Speaker 02

  So, so if you owned a house and it was, and you paid a million dollars and Madonna knocks on your door and says, I'll give you six million for it. You know, like, I love the house and my wife would be furious, but I would be like, honey, we're moving. Okay, like, we'll get over this fight, but we'll have five million extra dollars, you know?

• 41:38Speaker 02

  So with Tesla, the way I value Tesla is based off revenue, even though they're reporting a profit, like, they're not trying to make a profit. And I think that's a mistake I made and missed. A lot of Amazon's gain personally was because I, I invested in Amazon late, I would say. And so I've made a lot of money in Amazon, but I missed Amazon like, and part of it was, I was like, when are they going to make money? When are they going to make money? They never make money. Now, you know, what kind of firm has a 0% profit margin, blah, blah, blah. And I didn't get Vezus's vision, you know? And I didn't like selling crap. Like, I was just like, they sell crap. He makes no margin. I didn't see it. Okay. But there was a point to that because he was in like hyper growth. He was building like a way bigger company and that's exactly what Elon is doing.

• 42:22Speaker 02

  He's building a way bigger company than it is today with that vision already five years out. He's building gigafactories everywhere. He's offering Volkswagen batteries he doesn't even have, you know? I'm like, when are you going to get an extra battery, Elon? You just said on the call, you don't have enough batteries, you know? And so, so, so I was going to make that mistake with Tesla. And if you remember, uh, Amazon was overpriced for most of its history. Uh, and same with Apple and same with Nvidia, actually. I, I, I think a few of the best stocks I've ever bought were extremely expensive when I bought them. And people thought it was a bad idea at my firm and I did too, but I also didn't want to be out. And they've turned into like Shopify.

• 43:06Speaker 02

  I was late in Shopify and I made a fortune and I, I kicked myself daily. I didn't buy more because I knew how good they were, but it was too expensive.

• 43:16Speaker 02

  I mean, that was $100 a share. It's $1,000 and it's still too expensive. So I sold more. You know, um, so Tesla, you know, maybe they do 35 billion. I used to do it at three times rev. I thought three times rev for them was generous, you know? I'm now up to five times rev, just so I don't seem like a bear. You know, um, so that gets you to like, what? 170 billion, $1,000 a share. I think Jonas just put out $1,000 a share because Jonas put out $10 a year ago. Um, so anything, I'll buy Tesla under 1,000. Yeah, I know Jonas $10 a year ago, 2,000 today. Um, buy high, buy high with Morgan Stanley. I like Jonas.

• 44:01Speaker 02

  He, he, he tries so hard and he's just wrong constantly. He's like, now we figured out Tesla actually is really good at autonomy. Um, I'm like, dude, I was in my car on PCH trying full, like the, the autopilot on PCH, which I think is the most challenging drive you could possibly want during summer. People run, you know, it did pretty good yesterday. It's got visualization now. Boy, in a year, don't count this out. Um, so, so people are paying premiums for baseball cards, as you mentioned, and people are paying for, um, ridiculous speculation in penny stocks. They're buying Kodak today. I mean, think about how dumb that is. Like Kodak is going to make some sort of drug.

• 44:43Speaker 02

  Like, why doesn't JCPenney get into the vaccine business too? You know?

• 44:48Anthony Pompliano?

  2020, they may. We may see JCPenney start a pharmacy.

• 44:51Speaker 02

  I would do that right now. I would just shut whatever they were doing and say, we're going to make masks and vaccines. The government will give me 500 million stock rallies. You know, you got Portnoy or somebody will, will pump it and you're, and you're good to go. I love Dave. The penny stock operators are like so happy. It's like, it's never been so good for them.

• 45:11Anthony Pompliano?

  So you obviously, you know who the short sellers are or were. Uh, you've spent time with them. You've heard their arguments. What do you think is the thing that they missed on Tesla?

• 45:22Speaker 02

  So here's, here's one of my theories that many people on Wall Street don't like.

• 45:29Speaker 02

  So I do think valuations matter. They matter a ton. But they also don't matter. Okay. Perception of success or future success of a company can create ridiculous valuations.

• 45:48Speaker 02

  So a lot of people bet against companies purely based on valuation. And I think that's a bad idea. It's just a bad idea. You know, I can tell you a hundred stocks I think are overvalued. I don't bet against them. I just don't bet against stuff very often because the market's rigged to go up. And if you don't, you know, I think Dave says that too. Stocks always go up. They don't always go up. I wish that was true. But it is rigged to go up theoretically. So, so in my mind, where the short sellers were wrong on Tesla, I think mostly they weren't wrong. The financials were garbage. They were losing money like crazy. They had Elon had invested so aggressively.

• 46:32Speaker 02

  He literally put no margin for error. In fact, the short sellers had a very good argument. A very, very good argument. And, and not only did they have everything in their favor, then Elon was even helping them. Okay. With Peto and, and the SEC. You know, the other day he posted something that, you know, sucked whatever. And I was like, dangerous, you know? And he was like, yes. And I'm like, Elon, please. So I email, you know, IR and I'm like, take his phone, run, run, dive in front of his phone. You know, like I tell Martin, no, really, there's a lot of behind the scenes. You know, like, I'm like, run to his office, dive in front of his fingers, you know? Like stop him.

• 47:15Speaker 02

  You can always tell what kind of mood Elon's in if you really follow his tweets, you know? And if he's tweeting a lot before earnings, be careful. He's happy.

• 47:25Speaker 02

  So that was pretty obvious, he was gonna blow out numbers this time. Um, so I don't think the short sellers were wrong. I'll tell you where they were wrong is they didn't go to the factory. They didn't see where Elon slept on the floor. They didn't see the people that were working there who will die working there. They care so much. They did not see the work ethic. Like I came back from the factory, super motivated. I was like, I'm weak. I'm, I am soft. No, seriously. And I push, you know, like, but we have millennials here, you know? God, if I, you know, trust me, like the way I would be doing things, the way I used to, they would all quit. They would all quit. You know, now we have like snack bars and stuff, you know? We have like, like quiet time.

• 48:10Speaker 02

  We have like sing-alongs. We have to, we have to, you know, the millennials need it, but they're doing great. They're doing good. I have had to adjust. I've had to adapt. I'm Gen X and I come from the, the bang the phones, close the business generation, you know? But now it's the

• 48:28Anthony Pompliano?

  The biggest thing that you've had to do that you could have never imagined you would have to do, having millennials work there? Like what's the

• 48:34Speaker 02

  Oh, every day. I've not yelled at people. How about that? I mean, people cry like, you know, if you

• 48:43Speaker 02

  like, so, so my, my, I think one of my greatest qualities and one of my biggest flaws are the same thing. So I see the best in people. Like I see what I, you know, I, I, I train people, like I manage people and I love people. And I see the best in people, but I also see something a lot of times they don't see, you know? And, and so then, then it's like, I push them to be what they can be. But that process is painful for some people. It's kind of like the military, you know, like I trained a little bit like the military. I studied the military extensively. My dad's been in the military his whole life and, um, on and off and, and my grandfather and, and I study military history and I, and, and I very much studied like the Marines, like how do the Marines train somebody, you know?

• 49:29Speaker 02

  And I train a lot of young people, so I And repetition and all these kind of things are really important, but, but they toughen you up. You know, they toughen you up and, and, and so that process is a little bit different now. You know, the, the toughening up process is a little kinder, a little gentler. But we do have a very much a training program to take the socialist millennials that we get and turn them into fierce capitalists. And we do this over time. Um, so we really have a very, we might write a book about this, you know, like I've been, I started a, a millennial management book and I, and I stopped because I just didn't have time. But, you know, but we have ridiculous things we do here to keep people motivated and they totally work.

• 50:14Anthony Pompliano?

  What, what's the craziest thing?

• 50:16Speaker 02

  What we're doing right now. Every year we have the GK Cup. And the GK Cup is, was based off the World Cup. So one year the World Cup was happening and nobody fucking works during the World Cup. And it's super frustrating because I have a lot of immigrants here. So there is nothing, soccer is soccer. So I was like, how do I get these people to work during the World Cup? I'll create my own World Cup. So I bought this enormous cup, you know, like a huge award, like the Stanley Cup. And we engrave their names in the cup if they win the contest. It's a summer contest. So in summer, it's so hard to get people to work in LA. It's like perfect out right now. So we had a contest and they go head to head, like they have the groups and they go head to head.

• 50:57Speaker 02

  We set all these random criterias, you know, a performance related thing, metrics. And then they compete all summer long to win, really just getting their name on the cup. But they care so much about getting their name on the cup. Now, the best part is, is there's a tie. We do real penalty kicks with a real ball and a real goal.

• 51:19Speaker 02

  Okay, now please, I can't tell you, now we're doing this socially distant with masks on now. But I cannot tell you how much fun this is. It, it is so much fun. And, and, and women at our firm win. Like there's, there was this sort of complaint like, oh, well, the women aren't as good at soccer. I go, that's ridiculous and that's sexist. And then they go and they beat the guys in the kickoff. And, and so we have, you know, women are more, I think we have more women winners of the cup at our firm than men, even though we have, you know, kicking the soccer ball.

• 51:52Speaker 02

  But it's super fun and everybody gets into it and our production just goes through the roof, like. If I just said, I'm gonna give a thousand dollars to the guy who's the best, you know, they're just they don't care. They don't care about money.

• 52:07Anthony Pompliano?

  Speaking of money, Bitcoin, you were converted a while ago by Brock Pierce.

• 52:14Speaker 02

  And Roger Ver.

• 52:15Anthony Pompliano?

  Kind of what your, what has your journey been with Bitcoin? Kind of what are your thoughts now?

• 52:21Speaker 02

  I love Bitcoin, you know.

• 52:24Speaker 02

  So Bitcoin's really disappointing to me right now because I feel like the developers who are very, very smart, who promised a lot of things to people have not done their jobs. I think they made too much money and they just were like, this, it's easier just to print the money and make the money than to actually make it useful like they promised. And that's my gripe right now. So there's two gripes I have with Bitcoin because I've been hacked and attacked for my Bitcoin before and it's a nightmare. I had a two FA attack, by the way. Lock your SIM card, everybody. Boy, nightmare if they get your phone and they can get your phone easily. So lock your SIM card. But like, first of all, exchanges offer no protection.

• 53:09Speaker 02

  So Coinbase, major firm, how am I going to put a million dollars in Bitcoin when it can just disappear and I have no protection? The exchanges certainly don't help you. You can't recover anything. There's no SIPC. So I've been arguing for a long time Bitcoin needs an SIPC. It just needs an insurance. Like I would pay in a certain amount per transaction to just know my money at Coinbase and Binance and Bitrex and all these places is safe. But it's like somebody can just hack in and take your money and there's literally nothing you can do. How is Bitcoin going to grow into this enormous thing with institutions investing if you have no security?

• 53:48Speaker 02

  So like if you read, there's this great book about the Vingegaard twins, Ben Mizrahi, who I love, wrote this book, Billionaire, Bitcoin Billionaires. Highly recommend it. And they go through this part about how they secured all their Bitcoin and the process they had to go through to make it secure. And it's absurd. It's absurd. So if you're going to have a million dollars in Bitcoin. I can't even tell you how much effort it is just to keep that safe. Where you can just give me a million dollars and nothing can happen to it. So I think the exchanges have to solve that problem. Insurance, protection. Secondly, use. I can't believe I, like, if I want to buy something, I can Apple Pay with two clicks.

• 54:32Speaker 02

  Why can't I just play with Bitcoin? I still can't do it. I can't do it through PayPal. I can't do it through anybody. Can't do it through Coinbase. I can't do it through Square Cash. Like, why can't Square Cash? Can't I just use Bitcoin to pay for things? I want to use my Bitcoin to pay for things and I still can't. I still can't. So I think this needs to be solved. If these two things are solved, Bitcoin goes up forever.

• 54:57Anthony Pompliano?

  What is your thought process in terms of maybe not price prediction? But in terms of, is Bitcoin eventually the next global reserve currency?

• 55:06Speaker 02

  It already is.

• 55:08Anthony Pompliano?

  Explain.

• 55:09Speaker 02

  Well, like, so the genius of Bitcoin, right? So, so the genius of Bitcoin was, like gold, it has a finite amount of Bitcoin. And so the mine, the longer you mine the coins, we just had a having, you know, the, the harder it is to get more coins. So now there's half as many coins printed per day than there was a year ago. This process is very much like gold. So what makes gold valuable is less per se the gold, is more per se the fact it's so hard to get new gold and the amount of gold actually stays the same. So it, it works real well if we all collect the same rock and we just don't find new rocks. But if you actually study the history of silver, the reason why silver isn't a reserve currency is because they found a lot of it and they were like, this isn't that hard. You know, not worth that much then.

• 55:54Speaker 02

  So Bitcoin has the ability, just like gold, to go up forever. Because, so my, my whole theory about money, actually I was going to write about this because now the government's printing money so fast that I don't even believe in the dollar anymore. Like, I just don't even believe in cash anymore. Like, so there's no value to holding cash because it's being printed so fast that the, between inflation and the cost of living and everything going up because of this, that holding dollars is the easiest way to lose all your money. So over a hundred years, if you had a hundred dollars, you will end up with a dollar of, of equivalent value.

• 56:36Speaker 02

  But if I take that hundred dollars and convert it to Bitcoin or gold in a hundred years? It will go up with inflation. So I don't see why Bitcoin acts any differently than gold. And in fact, if Bitcoin was able to deal with larger institutional investors, it would be worth $50,000. But until I can, like, I have clients who want to buy Bitcoin and I say, I can't do it for you. A, I can't. B, like, you want to buy 50,000? You know, I do trades at like 50,000, 100,000. I can't do that with Bitcoin. It's just too hard. Just trying to buy 100,000 in Bitcoin. You know, it's like a penny stock.

• 57:14Anthony Pompliano?

  Well, and I think part of probably the biggest obstacle for you is just the fiduciary duty of buying Bitcoin and kind of regulations and things like that.

• 57:22Speaker 02

  That's a whole nother issue, but yeah.

• 57:23Anthony Pompliano?

  Yeah, but the institutional stuff now, I think, is getting a little bit better where you see people like Fidelity and others coming.

• 57:30Speaker 02

  And the Winklevosses.

• 57:32Anthony Pompliano?

  Yep. Yeah. Cameron and Tyler have done a great job with Gemini. I think that the, you know, the Coinbase is they just bought Tagomi, which is a basically a prime brokerage type business.

• 57:42Speaker 02

  Right, right.

• 57:43Anthony Pompliano?

  I think a lot of this is kind of coming together, but to your point, until it is as dead simple as what somebody's used to doing in the legacy world, like, there will be obstacles. Maybe it doesn't.

• 57:53Speaker 02

  Yeah, like, I'm not selling my Bitcoin, you know? I mean, I haven't been a buyer in a while because after the hack, I was really turned off, you know, it sucks. It's, it's still, I'm still trying to get control of some of my accounts. It's like, just security is a nightmare and, but like, right. So I just don't feel comfortable having that much money in Bitcoin because it's like so hard to deal with it.

• 58:14Anthony Pompliano?

  How, how do you think about it in your portfolio? Is it something that you're like, look, it's like a one to 2% type allocation? Well, like, you know, an inflation hedge or something bigger? Like, how do you just put it together?

• 58:26Speaker 02

  Exactly that. It's maybe a one to 2% of your portfolio. It's an inflation hedge. It works the same as gold. It's digital gold. In my mind, you know, so I'm not a big believer in governments. So I have some pretty radical beliefs that I don't talk about much because people.

• 58:44Anthony Pompliano?

  Well, let's talk about them right now.

• 58:45Speaker 02

  Yeah. So one of them is I think that most governments of the world are the most corrupt, massive, disgraceful attempts at governing that I've ever seen. I don't think there's ever been a time in history, except maybe in the 30s, when we had Hitler, Stalin, and, you know, the whole thing in Japan, you know, imperialism or whatever you want to call it. It's really disgraceful how governments haven't served not only the people, but from rich to poor and the theft. I mean, just in L.A., every day you read an article about politicians who've stolen from developers and from people and the corruption probes up and down to the President of the United States.

• 59:29Speaker 02

  So I think that governments in general have lost its utility in a lot of ways. And so things like Bitcoin make a lot of sense to me because why do I have to live in a world where the U.S., I have to use their money when their money is worthless? And they just print it like crazy and give it to people, you know? But I could own this Bitcoin and go anywhere in the world and use it. Okay? So to me, Bitcoin makes so much sense in this world. It could be hugely successful if they do this right. But I still think all the major players that should be doing it got too rich and they're just not trying that hard anymore.

• 1:00:12Speaker 02

  And I think they need to try harder and I think it'll work. And I think there's never been a time between the Euro, the, you know, in the EU, they're going to issue a trillion dollars of debt backed by the EU for the first time. Not backed by a country, not backed by any individual, not backed by anything, just the EU. Now, we all know that the EU is a farcical thing that everybody wants to leave, right? It's a failed experiment, basically, that they're still trying to keep going. So what rate are they offering on that trillion dollars? It's minus point one. Now, I went around all day saying, "I will borrow indefinite amount of money at minus point one.

• 1:00:56Speaker 02

  Just give me all the money in the world at minus point one." Who's going to give money at minus point one? Obviously, somebody does. So this is proof that the entire system has failed. It's failed, like we're failed. I go on to buy bonds right now. I'll leave this podcast. I go on, I say, "I want a one-year bond from Apple." It's a negative yield. Nobody's reporting this. This is not on the news. Oh, every bond that's a year or less that's not going to default has a negative yield.

• 1:01:30Speaker 02

  Like, I have to run like, a really long screen to get a bond with a yield. That's a failure of an entire system. Our entire system has failed. So the entire financial system is backwards now.

• 1:01:42Anthony Pompliano?

  So what, what happens?

• 1:01:44Speaker 02

  I don't know. It doesn't work. So, so in my mind, none of this works. So how do we get out of it?

• 1:01:53Speaker 02

  I don't know.

• 1:01:55Speaker 02

  I don't know. Once you have negative yields, we, I mean, I went to school, you went to school, you're a really smart guy. Like, you, you know what's gonna happen? Like, if you print a trillion dollars every two months? And, and, and, and you only have to pay point five on it. See, I think it works as long as the idiots give you the money. Okay, so, so somebody's giving them the money at negative yields. It's not me. My computer won't even let me buy it. It's like reject, negative yield. I was like, boy, at least my computers won't let me do stupid shit. But somebody's computer is letting them do this. So, explain to me what's gonna happen to all these short-term bond funds? And money market funds with negative yields, and they're still paying point one?

• 1:02:40Speaker 02

  I think Marcus is paying 1%. I think Betterment or Wealthfront's paying 1%. So how are they paying 1%, but they're buying bonds that yield negative? How long does that work? So, how do banks work with negative yields?

• 1:02:56Speaker 02

  So all of a sudden, you start to realize that we've created a nightmare, a financial nightmare box, that I can't

• 1:03:06Speaker 02

  figure out a way out of. Now we have 20% of America unemployed. I drive down the streets to empty buildings. So next door is Activision, empty. Snapchat, empty. My building, empty, except for us? We're like, why aren't people working in their offices? What's wrong? You know, it's like, you wear a mask and you go to work, you know, it's like, we kept people farther apart. We have a big office, fortunately. And not everybody comes in all the time, but you know, nobody coming in? Just, so what happens to real estate? What's gonna happen to all this debt? Who's paying? I wouldn't be paying my rent for an office building I'm not using. Who owns that Activision building? You know, as an Activision shareholder, I'm not stoked that they're paying rent on a building they're not using.

• 1:03:51Speaker 02

  Who owns all this debt? Where does this all go?

• 1:03:55Speaker 02

  So I have 50% of my money in cash.

• 1:03:58Anthony Pompliano?

  What would you put the probability at right now that the existing system actually fails in the United States and it has to be replaced by another one? Is that like a 1% possibility?

• 1:04:11Speaker 02

  The problem is what's the other one?

• 1:04:18Speaker 02

  So remember in the financial crisis, there's this moral hazard thing? Like if we bail everybody out, there was a long discussion about it. See, I always say this in my office and to my wife. You know, I don't like aging very much. I'm not a fan of it. And the only advantage is experience, you know? That's the only edge I have over these kids, you know? And I work out real hard just to stay as fast and strong as them. But, but boy, you know, experience is really valuable. So moral hazard was

• 1:04:51Speaker 02

  a really debated issue with Bernanke and Geithner and Obama at the time. Like if we bail out all these banks and just give them money, what's going to happen the next time? And, and I have to say Dodd-Frank has worked. So, so to the upside Dodd-Frank has worked. And so because of that, we don't have a banking crisis right now. That's huge because if we had a banking crisis right now, what you're saying, I think, would be probably 50% chance our system wouldn't make it. So if we were, if the banks, oh yeah, for sure. I mean, the banks control, there's five banks, four banks control the entire, they're too big to fail. Like we didn't solve any of that. They're bigger. So JP Morgan goes down, like what happens? Right?

• 1:05:35Speaker 02

  Like America shuts down, basically. So fortunately Dodd-Frank has worked. So I think that prevents a worse thing. Secondly, I'm a big believer in innovation and technology. Remember a lot of innovations happening right now, a lot of things, a lot of companies are adapting, a lot of companies are doing well.

• 1:05:53Speaker 02

  I'm shocked.

• 1:05:56Speaker 02

  That's what's confusing to me. Like, I go to one place and they're like out of business. And then you go to the next place, like the nursery, you know, like is packed. Everybody's buying plants, you know, Home Depot doing amazing, you know? But then the restaurants is just like, it's like, it is, it's like a Holocaust for restaurants right now. And, and it's sad. It's, it's, it's just a sad death. That there's no way around, you know? So unemployment, I think, is going to stay high for a long time. And we're going to have social unrest for a long time. We're going to have social cost to this suicides, drug abuse, crime. I don't think the, they, they call it a recession. I don't think the recession's really started yet.

• 1:06:37Speaker 02

  It, it started, but like the pain hasn't started because they just keep printing money and, and there's been no, no issue. But now the $600 ends on Friday and it's going to suck.

• 1:06:49Anthony Pompliano?

  So I, I keep calling it like bridge the gap stimulus, which the whole idea was, hey, there's going to be this market downturn mainly because we have to shut down the economy. So let's just print some money, give us a shot in the arm. And by the time this program runs out at the end of July or the end of September, depending on the program, like the economy will have recovered and, and no one will be any worse off, you know, and we kind of bridge the gap. The problem is that like, we didn't build a long enough bridge, right? Because like, oh shit, we're halfway through building the bridge.

• 1:07:17Speaker 02

  Well, no, it's not that we didn't build a long enough bridge. We underestimated our stupidity. So, so in fact, what, you know, I, God, I hate this. I've spent more time studying this fucking disease, you know? And I have some clients who are virologists and some of the top people in these areas who are very smart. So I, I've forced myself to listen to this and read all this stuff. Coronavirus isn't complicated. We've made it way worse than it needs to be. It's an airborne disease, you know, it's easily stopped if you know it's an airborne disease. So you have to take, you know, the appropriate, you know, things because it's so contagious. You know, the real challenge of coronavirus is a lot of people don't get sick.

• 1:08:01Speaker 02

  So they're not sick and, and they're contagious and, you know, it's just real hard to stop something you can't find or see. So the simple solution is what they're doing at the NBA and what we've done at my firm is you, you create a bubble and you test everybody and, and then you hopefully people don't act stupid. Okay?

• 1:08:21Speaker 02

  Don't act stupid. So where I am in LA, Santa Monica, people are germ phobic, super healthy. People yell at each other if you're not wearing masks. Okay, like somebody yelled at my wife, she was jogging. And I'm like, where's your mask? And my wife's like, what the fuck? You know, I'm jogging. You know, my wife pulled a Karen on a white guy the other day. It was pretty funny. And, uh, yeah, yeah. I mean, this guy's like hassling her. Uh, my wife isn't going to deal with that. So, uh, and she runs a lot. Uh, but then we went to Orange County. So we go down to Orange County, we go to Laguna Beach. Her family's from Laguna Beach. And we go to the beach down there because it's like Hawaii. It's so nice.

• 1:09:00Speaker 02

  And, um, and I, uh, and I walked down there and there's like 150 people partying, hanging out, the kids are playing, the families are all eating and drinking together. And we go over to our little corner or our beach and I go, Jill, holy shit. We're fucked. We are screwed. Do these people know that there's a pandemic? See, a lot of people don't know what a pandemic is. They don't understand that pandemics don't care about what they think. Um, somebody said this, that, you know, you might not care about the virus, but the virus still cares about you. And, uh, and that's what we're seeing right now in Orange County, just explosion of cases.

• 1:09:42Speaker 02

  We've had a governor and our mayor who's allowed construction and essential workers. The Latino community is completely sick with this thing because they've allowed these people to work during the quarantine so that their developer friends and, and their big business friends wouldn't lose money. But now they've infected the entire Latino community here in Los Angeles. And that's who really is getting it. Look at Florida, California, Arizona, uh, Texas. You think this is just a coincidence? So you have this stupid behaviors and then you have this Latino community that's been working this whole time that have basically just been sacrificed by our business leaders with no protective gear and no safety protocols. That, I mean, there's a downtown factory that had 400 cases and four people die and nobody said anything. And I'm just like, what the hell?

• 1:10:27Speaker 02

  What the hell is going on? And then in Mexico, the president of Mexico. Was like, uh, we don't even believe in coronavirus and it's a nightmare in Mexico right now. And the Mexican community goes back and forth a lot between Mexico and the United States. They're very close knit families. Um, they're very dense communities and this is a nightmare. It's a nightmare. So, um, this is not going away anytime soon. And that's the premise we're working on now. And so, you know.

• 1:10:56Anthony Pompliano?

  I tend to think that the data is suggesting that, um, I, I asked a bunch of people for questions. I'm going to fire them at you rapid fire, your, uh, hear your thoughts. Uh, let's start with day trading versus holding and the recent rise of the day traders.

• 1:11:12Speaker 02

  Well, I've been around long enough, these day traders, if they were so good, they'd all be rich, right? So 99 to one, 1% of people have a million dollars, 99% don't. They day traded in, in the nineties, they flipped houses in the two thousands. They are back to day trading again. It just, oh, it was Bitcoin. Remember the Bitcoin stuff, my, my Uber driver trading Ethereum from his car. I, I mean.

• 1:11:38Speaker 02

  So it's sad to me, the get rich quick. American ideology that people buy into, whether it's betting on sports or day trading or. There's no get rich quick, man, you know?

• 1:11:54Speaker 02

  I wish I, you know, I wish I could tell you, you know, like it's luck. Like there are some people who are very lucky and, and it's just not something that's repeatable. So you save and invest your money over the long term, you'll, you'll be a millionaire for sure. For sure. Over 20, 30 years, if you invest in the S and P even.

• 1:12:11Speaker 02

  So that's discipline. It's not as fun. So my whole thing is if I buy a business, how much money can that business make me in one day?

• 1:12:20Speaker 02

  I buy McDonald's. Did something happen at McDonald's yesterday that was so good that it deserves to be 10% higher? You know, it's like, so when you own a business, whether it's Tesla or McDonald's or Apple, you have earnings per share. Those are real dollars that flow into it. And then those CEOs have to make a decision whether to buy back stock or pay dividends or buy a business. Grow. I believe in all that. So if I'm buying a business to hopefully sell that business later in the day for profit. Um, I think that's a stupid thing to do. Um, mostly because the best day trades I've made really are over a couple of weeks, you know? Like to really get a stock ramping. So if you're just like buying and selling. So I learned this lesson when I was twenty eight.

• 1:13:04Speaker 02

  It was nineteen ninety nine and I was lucky enough to spend the day on the floor of the New York Stock Exchange. I got to go with a floor broker is this Irish guy and they set me up with this guy. I was a kid. It was the coolest thing ever. It was the top of the market back before digital had taken over. Yelling the phones, Wall Street, the movie. I was finally there. I was stoked, you know? Like as a kid, I was like, this is cool, you know? So I'm on the floor now at exchange, all guys, Irish guys, Italian, New York guys, toughest guys you'll meet, best traders in the world. Guy look, no, I'm this kid wide eyed like, wow. So moral of the story is he says, you see everybody here, we're all millionaires, every single one here.

• 1:13:48Speaker 02

  You know why? Because we trade every day and we have better information. We're on the floor of the exchange. I said, that's a good point. Then he showed me this guy and he was typing like this. He was typing trades in like this because this was, they still had computers then, obviously. But it was like only the market specialists had these computers and they were filling the small orders. And the, and the guys on the outside were yelling for the ten thousand shares and above. So this guy's typing like this and I go, what's he doing? He goes, oh, he's filling all the smaller. I go, I've never seen the guy type like so fast, you know, it's like crazy. And he was basically the, the business mistake you can make is trade against us. We're the specialists on the floor of the exchange. We have better information, we're faster, we're quicker, and we do this for a living.

• 1:14:31Speaker 02

  Don't trade against us. And I was like, I was done day trading. I was done day trading. And so what I realized is that why would I trade against Virtu? Why would I trade against, you know, uh, Ken Griffin and Citadel? You're trading against people with better information, faster computers, you know? So, so why do you think you're going to win when ninety nine percent of people don't? You're not, you're not the special one. So I don't believe in that. What I do believe in, if you want to speculate in a stock. And you want to buy an option, you know, try to speculate in a stock. Fine, but accept what it is. If you take a small portion of your money, you want to bet on stuff. Fine. But it's not investing.

• 1:15:13Speaker 02

  You know, some of my clients, they just keep their little $50,000 account and they want to bet on stuff. And then they, they go, and then they own all the same stocks I own. And I go, why didn't, well, you're just buying the stuff I'm tweeting about anyways. Like, you know, really?

• 1:15:27Speaker 02

  So I, I just think people should understand that. Why are you competing? It's like playing football against, you know, like, I was going to say the, the Patriots, but it's really, you know, the Tampa Bay now, I guess. Right? So, so why play football against the Patriots and Bill Belichick? You know, it's just, why not just be on their team? And you can buy mutual funds or ETFs where you're on their team. You can invest with professionals that will help you, even if you want to buy a stock or at least have some help. You know, but the real money trading is made by owning positions over, you know, some period of time, maybe even a few months or a few weeks. So you can really get that gain, you know? Uh, but today I buy a stock and hopefully sell it by the end of the day.

• 1:16:12Speaker 02

  You're wasting a lot of time, you're paying a lot of taxes and you're giving, you know, I think Ken Griffith's new apartment in New York. I think it costs 240 million. And he's divorced. So he paid a divorce and still has money. And he runs the biggest market maker in the world. Think about it.

• 1:16:31Anthony Pompliano?

  You, uh, you, you've gotten in multiple, uh, online conversations, we'll call them with, uh, with Dave Portnoy.

• 1:16:38Speaker 02

  Oh yeah, Dave.

• 1:16:39Anthony Pompliano?

  And some Barstool. What, what's kind of the idea there? I, I think I saw you today tweet and say he's got a nice comedy show.

• 1:16:45Speaker 02

  It is a comedy show. That's not serious, right? No, I mean, look, Dave's a, a, a smart guy, right? He, he, he built Bar, Barstool. It's a, you know, he's a marketing guy. I, I, I use some of the same techniques that Dave uses. I don't dislike him. I, I actually think he's kind of funny.

• 1:17:06Speaker 02

  And you know, why he thinks I'm a suit, whatever, you know. You know, I'm actually the anti Wall Street guy, so I kind of found that funny. Cause he's just, you know, he's a ranter. But you know, I like guys like Dave, you know. Dave helps us a lot. Because the people who listen to Dave lose their money and then they call financial advisors. When they realize they can't do it. So they, these people help us, you know. And, and they popularize investing. And since investing is so hard, you know this, investing is so hard. And it's so humbling, you know, if you do it for any, you know, look, I'm in, I'm on a roll right now. So I'm feeling pretty good. But trust me, I've lost money, you know, like.

• 1:17:51Speaker 02

  It's humbling, dude, it's, it's brutal. It's just brutal, it's a brutal job. I actually don't recommend this to people at all. I think trading is really hard. And, and now I'm responsible for a billion dollars. And, and if I'm wrong, I might lose millions. Now that, I take that responsibility seriously. So, so, so my thing with Dave Portnoy is.

• 1:18:15Speaker 02

  Number one, I think he's funny, I do. Number two.

• 1:18:22Speaker 02

  He, he clearly discloses that he's not serious. It, it, it says it like, don't follow what I'm saying. It's a comedy show, it is. And, and so I think it's, it's, it's funny. Now, I don't watch it very often just because, you know, it's like watching a train wreck. And we're all waiting for him to lose all his money, you know, because it'll be funny when he does. And I hope he quits soon, you know, like, I think he's smart. So what he's going to do is he's going to quit while he's ahead. Declare victory and go back to sports because sports is starting back up. And so, you know, with the NBA starting tomorrow, he, he actually has a, a tough job. Because he's working for Penn. And Penn is very leveraged right now with a lot of casinos.

• 1:19:06Speaker 02

  And if Corona gets bad and, and Penn has to shut their casinos again. You know, boy, they don't own their casinos, they rent them. And then secondly, Barstool is an ad rev business and ad rev is down huge. So they're getting hurt right now and there's no sports and their app isn't even out yet. So, you know, Dave's got a lot of work to do, you know, like his life isn't so easy. I, you know, so I like it. I, I, I love. See what, what Twitter does is it creates engagement. And there's good engagement, there's bad engagement. Someone could say it's bad engagement. He's talking shit about you.

• 1:19:48Speaker 02

  And I was pretty annoyed the first time and I, and my friends were like, you should just fucking hammer this guy. And I go, I'm not, I'm not going there. You know what I mean? Like it's like, I'm not on that level, you know what I mean? I, I manage money for real and, and I, and I don't have time to start, you know, playing games with this guy. But I enjoy it. I honestly, I do.

• 1:20:08Anthony Pompliano?

  Are you a buyer of Penn stock?

• 1:20:10Speaker 02

  No, I'm an owner of MGM. So I'm a competitor. We have a big position in MGM that we're building. I do believe in online gambling. I think MGM is in a better position. I think it's a better company. It's trading at below book value. I've known these companies since I was a kid. I've been an investor in Mirage and MGM back in the day. So I know Vegas really well, really, really well. And I know what a piece of shit Penn is, you know? So Penn, Penn owns like the worst casinos you can imagine. They literally serve the lowest income economic group. And so I just don't see that as a great business, you know, like especially in a recession and, and all these problems.

• 1:20:54Speaker 02

  And, and, and every casino they had is in a coronavirus hotspot right now. And I don't think Barstool has an edge on, on sports betting. I think DraftKings does. I like DraftKings actually, and I like Patty Power, which is really owns FanDuel. And so we love online gambling and it's going to be a setback for gambling. Cause I'm actually bearish on sports until next year, like mid next year. So I actually, cause I'm in the music industry. So, you know, we're fucked.

• 1:21:28Speaker 02

  In the music industry and I deal with Golden Boys, you know, through one of my companies and, and, and we produce music and it's so grim, dude. It's so grim. So, live events, casinos, um, sports, it's not looking good.

• 1:21:48Anthony Pompliano?

  The, uh, two more questions for you and then we'll do the final, let's wrap up, uh, the tech anti-trust hearings.

• 1:21:57Speaker 02

  Well, of course, there are monopolies and if we cared about monopolies, we would have done something a long time ago. Goal in America is to build a monopoly. Microsoft taught everybody that. And, uh, I think there's two things. One, do they abuse their position of power? Of course, of course. If you were Amazon, why wouldn't you run your products in front of others? Your, your website. Um, is it anti-competitive? Of course, of course it is. I mean, if I'm trying to start an app and I have to put it on the App Store, it's cost me 30%. I have no negotiating power at all. And if I'm not on Apple, I can't sell anything. So, a lot of companies are now just trying to get people to sign up on the website and then they can

• 1:22:41Speaker 02

  have the app and so on, so forth. I, that's what we're doing with my music company. So, we're doing live shows and like if we build an app, they're going to take 30% of my, my, my ticket price and we can barely fucking survive. Like, I can't run live, live streams of music with 30% going to Apple. So, the way we're doing is you have to sign up on, on your phone or on your web and then you get a code and you just put it into the app. But it sucks. 30% is outrageous. So, the issue, going back to what I was saying before, I don't believe the politicians care at all. I think it is just Trump trying to beat up his enemies before the election. I think that they have no power. They're not smart enough. Their lawyers can't beat the, the private sector lawyers. Um, any attempt to

• 1:23:25Speaker 02

  hurt these companies will only hurt America. It'll hurt jobs. It'll hurt us in competition against the Chinese. Like, where's the win?

• 1:23:35Speaker 02

  So, so all these guys care about is the election and what's gonna happen. Trump wants to beat up on these guys so they don't put so many bad articles about him. That's all he cares about.

• 1:23:46Anthony Pompliano?

  The, the most asked question, and I don't know what you can say or what you can't, is about the PPP stuff.

• 1:23:50Speaker 02

  Yeah.

• 1:23:51Anthony Pompliano?

  What, uh, just rant away in terms of, I saw nine million different tweets about it.

• 1:23:57Speaker 02

  I know, you know, people are really concerned about like trying to run a business during a pandemic. And, you know, I did, I, you know, I did say the PPP was a scam, but that was taken out of context. See, what happened was when the PPP went down, the market was down 35%. And it was like a fucking nightmare, you know? Now, I'm used to these nightmares because I'm old enough. So I go into battle mode, you know? So I actually performed decently under nightmares because I've had to deal with many of them, not because I like it. So, you know, nightmare happens, we're getting, you know, we have 7,000 clients, market's down. We get paid 100% based off of how much assets we have, 100% of our income, and we're a growing company.

• 1:24:41Speaker 02

  So I had hired, you know, obviously based off having a great year and, and we're expanding and growing. And I had all these staff members that, you know, like, we're growing and we do events and marketing and all these divisions we have, right? So when all this went down, we applied for the loan because we just, like, we don't have private equity. It's not like I got $5 million sitting here, you know? I, I wish, that would be great. So I didn't want to have to fire anybody. And what, what happened was when we applied, we got, you know, the first round just like came and went. And I was like, this fucking sucks. And then like the Lakers got it and like, like the Catholic Church got a billion and a half. And I was like, this is fucking bullshit.

• 1:25:23Speaker 02

  And there were 3% commissions to the banks, which still nobody's talking about. So the bank made it through, so they were pushing us to get the loan. So like they sent me this thing and I was like, I'm gonna apply. Everybody's applying and if I my rev goes down twenty or thirty percent, I'm gonna have to fire people for sure. For sure. Now, look, I did financial crisis. I fired. I think it was fifty to sixty people. I had to shut five offices. I had fifteen offices. I shot a third of the. I basically shot a third of the company right off the bat. And that helped save us. I'm not, you know, unfortunately, I'm a business person, so I will do what I have to do to survive. And, um, and you know. But everybody who works here is kind of like my family, you know, it's.

• 1:26:08Speaker 02

  It's it's brutal. So so we got the month. So the second round came and we got the money. Um. And I'm really grateful for it, to be honest. We kept everybody on staff and and and certainly at the time I had no. Idea that we'd be making money right now. Boy.

• 1:26:25Speaker 02

  I didn't think that at all. In fact, we were thinking the market should be down like forty or fifty, you know, because with the financial crisis, we were down fifty. So I figured we'll go down fifty this time, you know, and I still think we could go down fifty. So by no means do I think I'm out of the woods. I'm still in combat mode. Um, we have a little bit of a cushion now, thanks to PPP. The markets come back, so our revenues come back, and we've actually used it to hire more people. So, you know. What we're trying to do is is help out by by adding people. So a lot of people in financial services have been laid off. And we've been able to get some really good people recently. So, you know, I'm stretched again. And taking risk having so many people, but we have this cushion and we're trying to do our thing.

• 1:27:09Speaker 02

  Um, I get people criticizing because the perception is that I'm wealthy and I shouldn't get government money. And I am wealthy, um, but that's not the way business works. Okay. I have a company. I have shareholders. Uh, I have employees. And I'm gonna have to do what's best for my company and my shareholders at the expense of employees. And I care about those people. So I'm very grateful that I haven't had to lay anybody off. And now. We've used this opportunity to try to help out by by growing. Um, I'm willing to take the criticism. I I get it. You know, I'm gonna do what I have to do to survive. So I'm here in ten years. And if people don't. Like that, then they've never been responsible for thirty one people.

• 1:27:52Speaker 02

  You know, and it's like we have single parents with kids like I play with their kids. Like you try firing a single mom, okay, with a kid right now. What other job is she gonna get? So people don't think about that. They can tweet all their shit they want. Okay, but I go to work every day and see these people and their kids and their families. I don't want to fire anybody. I haven't fired anybody, so it's great. It's great. And so, so I am grateful. I do want to say I'm grateful for it. Um, I haven't had to go beg some bank for money. I haven't had to, um, you know, sell, you know, we did raise money internally too. I did put money in personally, you know, fairly substantial amount of money into the company too. And, and many of our employees so that we have this cushion.

• 1:28:35Speaker 02

  Um, but fortunately, you know, revenue hasn't gone down now. So we only lost one quarter, you know, where it was down and, and now we're up. So, you know, but I, I still think the market's going to go down 15% or more. Um, I still think we're going to be dealing with this for a year. I think anybody who thinks that, um, it's a fun experience running a company right now has no idea what we go through every day. You have no idea what I go through every day just to keep everybody safe. Irrelevant of the cost, just the process, you know? Um, but when you're responsible, you know, and I have a second company too. So in my music company, I have six other employees and that company's not doing as well. Um, and I'm going to have to make tough decisions there. Um, so I've got 40 people who rely on me and I take that very, very seriously.

• 1:29:20Speaker 02

  And that's the answer, you know? And if people don't understand, that's their right. And they can criticize me all they want, but in the end, I'm going to keep my people here and I'm going to keep my business going and we're going to make money ultimately in the end and, and serve our clients and, and, you know, life will go on and the government gave out money to everybody. So I'm sure they got theirs too.

• 1:29:42Anthony Pompliano?

  I, I feel like that's a pretty thorough answer to anyone who's got any.

• 1:29:44Speaker 02

  Listen, you know, I get it. I get it. Criticize me all you want. You're not in my position, you know? But when you look at your team and it's a big team and you have to decide which six or eight are going to go.

• 1:29:57Speaker 02

  Dude, it's a nightmare, dude. It's a nightmare. I don't know if you've ever had a lot of employees or whatever. You know, I care very much for the people I work with every day.

• 1:30:08Anthony Pompliano?

  Yeah. I ask the same two questions to end each podcast. The first is, what is the most important book that you've ever read?

• 1:30:15Speaker 02

  Important? Oh, boy. Important has a lot of different meanings. You know, do you want to talk about finance? You want to talk about life? You know?

• 1:30:28Anthony Pompliano?

  Pick whatever book you want.

• 1:30:29Speaker 02

  Because finance books are not the most important books that I've ever read. Books that have influenced me like the most, number one is Jack Kerouac. Jack Kerouac was my favorite writer as a child. I read every book, top to bottom, read them twice. Not just On the Red, you know, like Dharma Bums, you know, the whole, those books changed. So I was a, so it started, so the Beat Generation changed my life. You know, like, I, for some reason, at that age, when I started into that, it opened up my whole world of like individualism, freedom. No, I'm basically a hippie. And then the Dalai Lama, I would

• 1:31:13Speaker 02

  say, number two. Art of Happiness is a great book. We all deal with mental issues and I have too.

• 1:31:23Speaker 02

  When I was younger, you know, I had many internal debate about life and we all do this. I don't think anybody is, and I think in some ways, you know, my mind has certain complexities that are good and bad. And so I was trying to figure it out. And I found Buddhism in general and spiritual things like meditation. And it started, so I met the Dalai Lama. I was lucky enough to meet the Dalai Lama. And he said like five sentences and they all were amazing. And I was like, you could just sit and think about this stuff for all day. And it kind of changed my life. And I, and now spiritualism is really popular and people aren't as much into religion.

• 1:32:06Speaker 02

  But I think being able to find a mental place in this crazy world is the biggest challenge. And so, for me, that's been an important thing. Insanity, in maintaining sanity in a crazy world, you know, and maintaining sanity in a tough job with lots of volatility and lots of people. So I highly recommend, highly recommend anything Dalai Lama or Buddhism, and I highly recommend, you know, bee generation and existentialism.

• 1:32:40Anthony Pompliano?

  No one has recommended either one, so it's great recommendations. Second one's more fun, and then you're gonna get to ask me one question to finish up. Aliens, believer or non-believer?

• 1:32:51Speaker 02

  I mean, it depends what, how you define an alien, you know? I think there's a lot of aliens on Earth. I lived in Venice, you know, so, you know, when you live in Venice for 10 years, or whatever I did, boy, you have to try to be different, you know, you gotta try real hard. There's, like, you, people talk about diversity, right? I don't believe in aliens from like another universe. I think our solar system's kind of a fluke, like our universe is a fluke, like the sun and like the big bang and this whole universe that we know of.

• 1:33:34Speaker 02

  And, and so I kind of believe in God, like, in life is God, like, so, so I, I don't know, I think we're, I think we have a really, we overestimate our value a lot. We're just a bunch of fucking animals, you know? And we're all gonna die, and it's ugly, and it's horrible, and we're a little bit better than monkeys and stuff, and, and we just overexaggerate our importance, okay? We're not that important. We're just little creatures who die very easily, as it turns out, and a little pandemic can throw our whole civilization for a loop. So, I think we overestimate our value substantially. I don't think there's other people running around, if anything, they wouldn't, they

• 1:34:18Speaker 02

  surely wouldn't show up here, right? Like, they'd be like, "I'm not going to that universe, cuz it's all fucked up there." So, you know, I just don't see that, man.

• 1:34:28Anthony Pompliano?

  I love that. We're all just animals.

• 1:34:31Speaker 02

  We are. We are. We just, we think too much. We, we give ourselves a lot of credit.

• 1:34:37Anthony Pompliano?

  All right. You could ask me one question to finish up. What do you got for me?

• 1:34:41Speaker 02

  Uh, you know, I was curious, you know, I started, uh, obviously reading up about you a little bit. You know, what, what inspires you to do, uh, these podcasts? Um, you know, I, I guess this is how you make money. What, what inspires you to do this?

• 1:34:57Anthony Pompliano?

  Yeah. Well, it all started, uh, we've got a whole asset management business, right?

• 1:35:01Speaker 02

  So you have like an asset management business?

• 1:35:03Anthony Pompliano?

  Yep. Yeah. Asset management business that.

• 1:35:06Speaker 02

  It's private or public equities?

• 1:35:08Anthony Pompliano?

  Uh, all private, all venture capital.

• 1:35:10Speaker 02

  All private. Okay.

• 1:35:11Anthony Pompliano?

  This business and crypto stuff. Um, and basically the whole idea was just, I had access to a lot of really smart people and I enjoy talking to them and learning and I started to record the conversations and other.

• 1:35:23Speaker 02

  You're in New York right now?

• 1:35:24Anthony Pompliano?

  New York. Yeah.

• 1:35:26Speaker 02

  And so is that where you always worked?

• 1:35:29Anthony Pompliano?

  Uh, no, I, I was out in, uh, San Francisco for a while.

• 1:35:31Speaker 02

  Okay, cool.

• 1:35:32Anthony Pompliano?

  In the New York. Um, but I, I think that, you know, it's one of these weird things where it's like probably the most selfish thing I do is where I get to talk to really smart people. They basically educate me on their view of the world on a whole bunch of different topics that I'm interested in, they're interested in. And then I record it and, you know, tens of thousands of other people will listen and they'll get to learn alongside, right?

• 1:35:53Speaker 02

  Well, you've built, you've built a, a, a really big following, you know? I mean, it's, it's impressive, you know, because I think, you know, before, you know, Twitter and FinTwit, I didn't think anybody cared about this stuff, you know? It's like when I would go, I, that's why I love New York. I would go to New York and hang out with my New York friends and, you know, the CNBC people or whatever. And it was like great to just like find anybody to talk stocks with, you know? Like in my circle, like they don't want to talk about what I do. It wasn't until Dave Portnoy, then they wanted to talk to me. But like my friends didn't care like at all, at all, you know? And actually that's why I like Dave because for the first time, like my group of friends actually like saw something I was in, even though it was him talking shit.

• 1:36:35Speaker 02

  But they were really entertained because they all talk shit to me too. So, uh, So like, it was pretty funny. So, you know, that's why I love what you're doing, you know, and that's why I do these things too and support a lot of different people who are bringing finance and I think interesting viewpoints out there. You know, you've interviewed some really interesting people. I watched a few of them and I think it's very valuable, you know, podcasting is becoming a big thing now, you know.

• 1:37:06Anthony Pompliano?

  Absolutely. Well, we appreciate you coming on. Where can people find you on the internet or find out more about Gerber Kawasaki?

• 1:37:13Speaker 02

  Well, you know, GerberKawasaki.com, of course, you can just put my name in search. There's plenty, but I'm at Gerber Kawasaki and we're on Instagram and follow us on Instagram or Twitter. And if you have financial questions or need advice, that's what we do at Gerber Kawasaki. We work with anybody. We don't have minimums. Send me an email, [email protected]. Happy to help you out. And, you know, I, once again, I appreciate your time and the thoughtfulness of your interview and, you know, I appreciate the audience for listening to me ramble. I talk a lot, so hopefully I didn't talk too much, but it's an hour and a half of me rambling.

• 1:37:55Anthony Pompliano?

  People are excited to hear this one. So thanks so much for doing it. We'll do it again in the future.

• 1:38:00Speaker 02

  Yeah, thank you. Thank you. Take care.