#1425 Anthony Pompliano & Phil Rosen | Paul Tudor Jones Is ALL-IN On Bitcoin

Phil Rosen, the Co-Founder of Opening Bell Daily, and Anthony Pompliano, Author of ‘How To Live An Extraordinary Life’ and CEO of Professional Capital Management, discuss Paul Tudor Jones being long gold and long bitcoin, why he is doing that, what that means for your portfolio, Goldman Sachs S&P 500 long-term outlook, and prediction markets. ======================= Buy book: https://www.amazon.com/Live-Extraordinary-Life-Anthony-Pompliano/dp/0857199927/ ======================= Xapo Bank, the world’s first fully licensed Bitcoin-enabled bank, offers military-grade security with an unmatched blend of physical and digital security, as well as pioneering regulatory oversight, so your funds are always protected. Beyond secure storage, they enable you to grow and use your Bitcoin. Earn daily interest in Bitcoin, spend with zero FX fees using a global card, and make instant payments via the Lightning Network for unrivalled access and convenience. Visit ⁠https://www.xapobank.com/pomp⁠ to join. ======================= Pomp writes a daily letter to over 265,000+ 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://pomp.substack.com/ ======================= View 10k+ open startup jobs: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

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

• 0:02Anthony Pompliano?

  What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. What's up guys? Phil Rosen is back and this is an absolute banger. We talk about Bitcoin and what is going on in the market? Do we think it's going to go higher and how much higher? I'm sure some of you are interested in. On top of that, we talk about Paul Tudor Jones, the GOAT, one of the best traders in the world. He went on CNBC and he said inflation is coming.

• 0:46Anthony Pompliano?

  He's long Bitcoin, he's long gold. We talk about why he is doing that and whether it matters for you and your portfolio. Then we talk about the S and P 500. Goldman thinks it's only going to go up 3% a year for the next decade. I disagree and I'll explain why. And then on top of that, we get into prediction markets and whether we believe them, we don't. What is going to change about the world moving forward? This episode is packed with a lot of things that a lot of you care about and I really enjoyed it because Phil taught me some things. Hopefully I made him think more critically as well. So here's my latest episode with Phil Rosen.

• 1:15Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 1:38Anthony Pompliano?

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• 2:10Anthony Pompliano?

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• 2:44Speaker 03

  Okay, so today, the billionaire Paul Tudor Jones said on CNBC, he is long gold, long Bitcoin, and avoiding fixed income assets. This is something similar to what Druckenmiller said, I think, just a week ago about Bitcoin. And here's his direct quote today on CNBC, Paul Tudor Jones. "We, as in the US government, are going to be broke really quick unless we get serious about dealing with our spending issues." What do you make of this?

• 3:12Anthony Pompliano?

  I wrote about this this morning. Listen, if you have half a brain, you're all over this issue. Obviously, the national debt is a massive problem. $300 billion have been added to the national debt in the first 18 days of the new fiscal year. How are we spending $300 billion in 18 days? That's just the debt. That doesn't include total spending. That's just what got added to the debt. So $35.77 trillion now in debt. One of my favorite statistics is in the first 221 years of our country, we racked up $12 trillion in debt. 221 years, the first 12 trillion. In the last five years, we added another 12 trillion.

• 3:58Anthony Pompliano?

  This is bonkers. The Congressional Budget Office just came out and they said that by 2054, 30 years from now, they expect our national debt to grow from $35.7 trillion to $153 trillion. If you plot that out on a line, it's parabolic. You do not want to see a country's national debt parabolic, but that is where we are headed. And if you use that $35 trillion number, Stanley Druckenmiller deserves a national medal for going on CNBC and always saying, it's really a $200 trillion number because of all the unfunded liabilities. We promised people a lot of money that we haven't paid them yet. So what about Social Security? What about Medicare and Medicaid? What about all these programs that we've promised the

• 4:43Anthony Pompliano?

  people? We're in debt. We owe them that money unless somebody has the courage to shut those programs down and ain't a politician in the world is going to do it. So the debt's a problem and the only way out, the only way out is to inflate away the debt. Donald Trump ain't talking about getting to a balanced budget. Kamala Harris ain't talking about that. I have not heard one time this entire political campaign, the President of the United States to be the leader of the free world, not one person has said, we should balance the budget. It's crazy. So they're gonna let it just inflate away. And so you better not be holding cash or you won't be on the wrong side of that equation.

• 5:20Speaker 03

  Well, do you think in any of that, what you just said, is Bitcoin the most obvious solution?

• 5:27Anthony Pompliano?

  It's all, they're all solutions. Real estate's going up, gold's going up, stocks are going up, Bitcoin's going up. It's all going up because if you have an asset that is priced in dollars, the dollar's going to be worth less. There's somebody's going to need more dollars in the future to buy the same asset. It's just that Bitcoin is the most sensitive, right? If you go back to 2020, Stan, or Paul Tudor Jones had this great quote. He said, I think that Bitcoin's going to be the fastest horse in the inflation bucket. Out of all the assets you can pick, I think Bitcoin's gonna be the fastest one. He was right. Same thing now. Gold's up 30% year to date. It's up 30%. A monster year for gold. Gold bugs patting themselves on the back. Wait a minute. Bitcoin's up 60%. Double the return. Bitcoin is gold with wings.

• 6:09Anthony Pompliano?

  If inflation happens, real estate goes up, stocks go up, gold goes up, and so does Bitcoin. Bitcoin just goes up more than all of them. And so that is why you see these guys saying, look, they're old school. They're going to still hold gold. Young people aren't going to hold gold. They're simply going to sit there and they're going to say, you know what? I'm going to instead buy Bitcoin. Bitcoin is doing all right. So 60% year to date. And I think that we're going a lot higher during this bull market.

• 6:33Speaker 03

  And you've been very clear that you don't think it matters who the president is for Bitcoin, for stocks, for any market or for any asset. But the big financial story the last few weeks has been these betting markets like Polly Market and Kalshi. And you wrote about it this week that if prediction markets end up being accurate for this election, that's going to change everything for traditional polls. I want you to explain that a bit more, but also the part two of that question is if the prediction markets prove true and then we also see a correlation with financial markets, would we also be able to do away with the prediction markets?

• 7:15Anthony Pompliano?

  So the reason why the president doesn't matter is because both Republicans and Democrats add to the debt. They're not balancing the budget. So both Republicans and Democrats contribute to the national debt. If they contribute to the national debt, then they got to inflate away the debt. And so the president doesn't matter because structurally debt's going up, inflation's going to have to happen, therefore asset prices go up. Now, when you go look at the prediction markets, I love that so many people are saying that they're skewed. The more I hear people saying that they're rigged and skewed, the less that I believe that because the masses are usually pretty dumb when it comes to things like this. If you go ask people, can you describe to me how it works? 99% of people can't.

• 7:58Anthony Pompliano?

  Most of the reporters who are writing about it probably can't actually explain it. You and I were talking earlier today that the guys at Kalshi, which I think that one's the most important one to pay attention to. It's only available in the United States. It's the only legal one in the US to bet on the presidential election. And it has a true market maker behind it in Jeff Yass and Susquehanna. There are other ones, Polly Market is a big one, et cetera, but they're not available in the US. So whether it's foreigners betting on it or whatever, that is not as deep of a signal, I think, as something like Kalshi for the presidential election market, right? For specific this market. Now, when I go and I look at it, Kaochi is coming out saying that it takes $8 million to move Trump's odds 2%.

• 8:44Anthony Pompliano?

  $8 million. You tell me, who is going on Kaochi and putting $8 million down to move the market? Nobody. The median bet sizes in these markets is like tens of thousands of dollars. And so if you look at it, Kamala Harris's median bet size is actually higher than Donald Trump's, which means that people, the whales are putting more into Harris than Trump. It's just that more people are betting on Trump than Harris. And so it goes completely against this whole manipulation theory or this story. And so I think that these prediction markets are going to be way more accurate than people give them credit for. Now, I will caveat with two things. All of the prediction markets, Nick Carter pointed this out.

• 9:29Anthony Pompliano?

  The aggregators, the bookies, the prediction markets, and the proprietary models are all saying the same thing. Donald Trump's gonna win. They're all skewing that way now. But what's more, even more interesting is right now, I think that Trump's odds, last time I looked on Kaochi, was 63%. Of course, Elon Musk says it should go to 69% because the most entertaining outcome would be, you know, the most likely. But if you go look at Real Clear Politics, which is kind of a nonpartisan outlet, I believe, they put out odds, 93% odds that Donald Trump wins the Electoral College. Not general population, but Electoral College. Why is that important? Because actually, their poll is suggesting it's 93% odds instead of the 63% on the prediction market. The simple answer here is it's gonna be a landslide.

• 10:13Anthony Pompliano?

  Again, either direction, it's gonna be a landslide. So either prediction markets are dead on and Donald Trump wins in a landslide, or they're so far off and it got so skewed in some way, it's so wrong, that Harris wins and surprises everybody. If you go back to 2016, Trump was the surprise. Everyone thought that Clinton was gonna win. So I think that's really what we're starting to see here. Now, what I do think is probably most important, and we're gonna bet on everything. If America knows one thing and knows how to gamble, the stock market is a casino. People are just gambling. Now, you can sit there and you can say, well, you know, Warren Buffett, he's not a gambler. Bullshit? Warren Buffett is the greatest risk taker of all time, right? This guy waits until everyone else got blood in the streets and then he pounces. He's just a gambler. He happens to call himself an investor.

• 10:59Anthony Pompliano?

  He happens to understand the odds of the game. But what's the difference between the guy that goes, plays blackjack, understands odds, gets up and walks away from the table? And Warren Buffett, who understands, I'm just gonna wait for this asset to fall to a certain valuation, I'm gonna buy it and then just wait. It's the same thing, it's discipline. And they're playing odds. And so, if the stock market's a casino, the government is preying on poor people by literally taking their money in the lottery. Nobody wants to talk about that in this country. It's a tax on stupidity. You literally are taking money from people on the hope that they may win billions of dollars. What intelligent person goes and buys a lottery ticket and says, I like the 2.4 billion to one odds?

• 11:44Anthony Pompliano?

  Nobody! And so, that's a government sanctioned gambling outlet. And they take the money and they give it to education. Think about how crazy that is. We're gonna take the money from the people who don't understand odds to give it to people to indoctrinate them into government education. That don't make a lot of sense. So, the fact that we then get to prediction odds into other gambling, it's just a continuation. This is American culture. But it's not just in America, it's globally. And so, as people get access to more information, everything gets financialized, people are gonna wanna make bets. I believe X is gonna happen, or I believe Y is gonna happen. That's been happening for centuries. You just never had an ability to bet people like this, where the friction was so low. So, I do think that these are gonna be massive. It's not just going to be presidential elections. I actually think we're gonna have the opposite problem.

• 12:27Anthony Pompliano?

  Too many things are gonna get kinda prediction markets, including, at some point, you get the assassination markets. Whole nother issue. Cause I do think that we saw recently, if I understand correctly, the Hamas leader, I think he had a prediction market on whether he was still gonna be alive by a certain date.

• 12:47Anthony Pompliano?

  Like you start doing that type of stuff. That's a whole nother ball of wax that you don't want to get into. So let's just stay with the presidential odds and the financial assets.

• 12:54Speaker 03

  Yeah, no, that gets very dicey. Something that has been coming up for me in my reporting is the correlation between prediction markets and stocks and bond yields. And I I'm not sure if there's really a consensus on that because some people tell me, yes, they are super correlated. Others tell me it's all macro factors. But my question is really if they are correlated and we learn they're correlated when the election passes. I wonder if we'll just start looking at the stock market as the prediction market.

• 13:27Anthony Pompliano?

  The stock market already has served us that in the past. Right. Donald Trump, I mean, you ask him, what did you do in your last presidential tenure? Look how strong the economy was. Look at the stock market, right? By the way, what do you think that the Democrat Party is doing right now? Where is that 300 billion, an explosion of national debt? Where's that money going right now? We're two weeks out from an election. Are we trying to pump up the stock market? Are we trying to disperse money to potential voters? What's going on? I don't know. I I have no clue. Maybe that's happening, maybe it's not. But it's real interesting. Yes, we got the start of a fiscal year, but why, within one month of an election, is

• 14:11Anthony Pompliano?

  the current administration in which the incumbent vice president is running? All of a sudden, you're seeing all these stories about soft landing, strong economy, capital being pumped into the into the economy. All that stuff's happening. It's crazy. So the question becomes, should we just lay all the cards on the table? America has always wanted to pretend like we're above all that stuff.

• 14:38Anthony Pompliano?

  But actually, if we're going to cut interest rates within 60 or 90 days of the election, if we're going to take on hundreds of billions of dollars of debt, if we're going to pump money into the stock market, if we're going to expand the M2 money supply, if we're going to run around and tell everyone how great their life is, just call spade a spade. By the way, what do you think's happened on the other side? They're both doing it. It's just that everyone wants to, you know, pretend like, ah, I wouldn't do that, but they're doing it.

• 15:04Speaker 03

  So just to be clear, you're saying that the economy is improving and the stock market's going up due to whatever government intervention because of political reasons?

• 15:14Anthony Pompliano?

  I think that is a fair question to ask because if you look, let's say the central bank, I think that the Fed is unlikely to be saying, I want this candidate or that candidate. There's conspiracy theorists who think that, I don't believe that. What I do think is possible, though, is that the people in control are saying to themselves, how do we get some fiscal policy going? How do we get some money being handed out? Where, where is there money sitting around that we don't have to get approved and go through a legislative process? And we start pumping into these systems, right? One of the stats I recently saw, I think it was the Wall Street Journal put this out, home prices in swing states have exploded, some of the worst housing affordability in the country. You think those people are saying to themselves, oh gee, my life's amazing.

• 15:59Anthony Pompliano?

  Home prices are taking off and their wages aren't keeping up. So again, how do you go into these situations? What do you do? And people want to yell and scream about it, but just put yourself in the shoes of a politician. In a weird way, an election is a forcing function for you to start thinking about, am I actually helping the people? The cynic will say, oh, you're pandering. Oh, you're just giving them money. Oh, you're just doing these things. Federal Reserve recently came out with a study that shows, you know what group of people have benefited the most over the last four years? The bottom.

• 16:32Anthony Pompliano?

  Quartile of the wealth status. The bottom 50% of Americans have actually had the greatest percentage increase in net worth out of all Americans. 95% increase in the last four years for the bottom 50% of Americans. Now, people will say, oh, that's a really low base, so it's easy. Okay. Well, the story is that all the rich people get all the money. But the people who actually gained the most ground was the bottom 50%. And so you look at that and you say to yourself, like, there's a lot of complexity to this. That is not the story that's being told publicly. But the data is there. The government is reporting that data. And so when you look at that, you say to yourself, maybe this stuff is way harder than we all like to think.

• 17:16Anthony Pompliano?

  Maybe you can't actually take the economy or a certain individual's life or a certain wealth status kind of situation and put it in a headline. Maybe you need a lot of asterisks. Maybe you need pages and pages of footnotes. Maybe you actually need a lot of charts and graphs and stuff to try to figure it out. Right? It's not as easy as just saying like, everyone's better off or no one's better off. There are some groups that actually their life has improved. There's a lot of groups that it hasn't. And so I think that's what politicians are trying to figure out is like, what is the group of people where it's actually going to matter? Trump's at McDonald's, right? Harris is doing all these campaign stops, right? You look at these people, like, they're obviously telling you who they think is the constituency they got to reach. And so I don't see Harris going to certain places that Trump's going.

• 18:01Anthony Pompliano?

  I don't see Trump going to certain places that Harris is going. And so when you get that, you start to realize, like, watch the actions they're doing, the stops they're making, that's telling you their strategy. Their strategy is telling you who they think is actually going to determine the election or two weeks out. It's put up or shut up, right? Like, either you're going to go talk to the people and convince them or you're not. And so now it's the mad sprint to the end, and it's pretty telling where they're spending time.

• 18:25Speaker 03

  Yeah, it's it's gonna be very interesting these next 10, 14 days or so. I think what you bring up about the bottom 50% doing the best in the last few years. That's actually quite a strong data point for Harris to lean into, but I haven't seen any, almost any commentary on it until you just brought it up.

• 18:43Anthony Pompliano?

  Because if she says that, then she's got to take credit for the policies. She takes credit for the policies, then everyone's gonna yell and scream about housing affordability, about inflation, about all this other stuff. And so, uh, part of the problem in politics, uh, I had this guy, John Avalon, come on, and he said that every political consultant tells you the same thing. Don't put your policies on your website. Don't write your policies down because you can get critiqued for it. The problem in politics is that very few people are willing to actually stand up, uh, by what they accomplished. So if you look at the debate between like Biden and Trump, when they were going, it was just like both of them yelling and screaming, saying like, I was the best president in history. There was no policy debate at all because they realized that if you start to take credit

• 19:23Anthony Pompliano?

  for something, immediately other people come in and they start to critique it. So what usually will happen, and actually I think Trump does a great job of this. If you notice, he never talks about what he did in terms of the border wall itself. He talks about that he secured the border. And the reason that I believe he's doing that is because if he starts talking about the border wall, then it becomes, well, you said you were gonna build this many miles, but you only built this many. You said it was gonna cost this, but it cost that. Right? Instead, if you talk about something that's a little bit squishier, like securing the border, a lot of people say, well, like, yeah, less people came across the border than when they were in office. And so it becomes something where you're trying to essentially claim victory without actually being subjected to critiques. That's why a lot of people hate politics. Right?

• 20:08Anthony Pompliano?

  Because if you and I sat down and we said, okay, let's evaluate two candidates. The conversation you and I would have as two rational people who aren't the candidates would be very different than the two candidates. Because basically, there's entertainers and promoters. They're trying to just present something to people rather than actually have a policy discussion.

• 20:24Speaker 03

  Yeah, their job is really to be as vague as possible.

• 20:27Anthony Pompliano?

  Yeah. And by the way, and to do it in an entertaining way.

• 20:30Speaker 03

  Yeah, yeah, I um, okay, Pomp, I want to switch gears a little bit to the stock market. There's a chart I covered in Opening Bell Daily this week that shows how the S and P 500 is now more expensive than it was than the 1929 crash, and it's getting close to what we saw in the 1999 tech bubble. And a lot of this is coming from what I think is the huge AI play. And obviously, when ChatGPT came out two years ago, there's been a ton of enthusiasm and stretched valuation since then. My question is, if this multi-year AI play doesn't pay off,

• 21:13Speaker 03

  I think we'll be in trouble. But is there something that can, is there another piece of the market that can sort of prop up that play from not panning out?

• 21:20Anthony Pompliano?

  I think that for the last six weeks, the market's been up every single week. And what's interesting is since July 10th, the only sector of the S and P that is not up is the technology sector. And so pretty much the rest of the market is carrying the S and P right now. Now, AI, I think, is a big part of the story, but like, the expectations can't grow to the, you know, to the sky forever. What I find most interesting is, we saw this in the internet, we saw it in crypto, and now we're about to see it in AI. You used to go and you used to tell your parents, I'm joining an internet company. My friend Mark Yusko taught me this. But guess what you say now? So I'm joining a new company. Of course, they use the internet. What company doesn't use the internet? It used to be that you're gonna go and you're gonna join a crypto company. You're already starting to see companies are using stable coins, or this technology, or

• 22:04Anthony Pompliano?

  that technology, or whatever, right? And so you're just joining a company. Today, everyone's talking about AI. Eventually, you're just gonna join a company, and they're all gonna use AI. And so what actually is likely to happen with the AI stuff is that you're gonna get this huge boom, then there's gonna be a crash of expectations and kind of hit the, you know, like the disillusionment trough, and then you're gonna really see the benefit of it. And so it doesn't matter whether you time the market correctly or not. If you're in for the technology, whether it is as a user, as a technologist, as an investor, or whatever, you're going to ride the waves. People are gonna get excited. They're gonna not be excited. They're gonna be excited again. But artificial intelligence is obviously valuable, right? And so you are just automating.

• 22:49Anthony Pompliano?

  Everyone talks about AI like it's some like sentient being. Like, do you think software is valuable? Does software work? If you say no, you're an idiot. But if you say yes, well, that's all artificial intelligences. It's just software. It's using code to automate tasks. There's not some magic behind it, right? Yeah, it's complex. Yeah, it's hard. But if you go talk to an artificial intelligence engineer, which I've done to many of them, and they explain to me how they're doing this. They're not like, uh, it's just like this black box. Like, you know, just like, I don't know, it just works. No, they're like, okay, you take a bunch of information, you train it, there's a model like, and they walk you through it and you're like, okay. By the way, that's crazy that it works that way.

• 23:34Anthony Pompliano?

  But it's very clear what is happening. And so the reason why that's important is because it's going to get exported to every single business. And so today, maybe it is, you know, Klavio talking about they reduced 40% of their customer service staff. Everyone's all excited about that. I know companies that have 10,000 people in their customer service department. And in particular, one guy works at a very large company. He runs that division and he recently told me that now a material percent of the phone calls coming in are being answered by AI and people don't even know.

• 24:03Speaker 03

  Wow.

• 24:03Anthony Pompliano?

  And so he's like, dude, it's coming, right? And we got to figure out, do we keep these employees? Do we move them somewhere else? What do we do? And so like this stuff is real. But the question is, where does it show up in earnings? Where does it show up in stock growth, right? And so the people who are worried about a stock crash, I tell you, you're on a sugar high. You, you, you took a bunch of sugar and you just want to know, is there more M and M's in the room or not? Right? Instead, get lean, get fit. If you're here for the next decade, stocks are going to be higher in a decade. Why? Because Paul Tudor Jones says inflation is coming. Because Stanley Druckenmiller told you currency debasement is a big problem. Because the national debt is literally $35 trillion on its way to 100. And so people who are worried about stock prices.

• 24:46Anthony Pompliano?

  All they are doing is they're just telling you how short term oriented they are. Now, if you're a stock picker, entry price matters. So you don't want to buy at the top because you might have to wait a number of years. But if you're a long-term investor and you're just dollar cost averaging, guess what? Bitcoin is basically flat since 2021. Hit $69,000, trading $67,000, $68,000 today. But you're up huge if you just started dollar cost averaging. And you dollar cost average all the way up in the bull market, all the way down through the bear market and back in the recovery. And so dollar cost averaging over a long period of time for most individual self-directed investors is probably going to be the smartest thing that they can do, regardless of the asset. You want to buy REITs? Knock yourself out, dollar cost average.

• 25:31Anthony Pompliano?

  You want to buy Bitcoin? Knock yourself out. You want to buy stock? Whatever you want to do, dollar cost average. Don't worry about where the prices are. Just make the mental switch. Don't worry about what the dollar value of your account is. Simply look at how many shares do I own? That is what Bitcoin taught an entire generation. Is it isn't about what's the dollar value of the account? It's how many Bitcoin do I own? Can I get to one full Bitcoin? Can I get to two Bitcoin? Can I get to five Bitcoin? Can I get to 10 Bitcoin? Same thing's true in the stock market, just no one ever talks about it that way. How many shares do you own? If you start out owning 100 shares of your favorite company, get to 105, get to 110, get to 120, get to 150, and hold for a long period of time, let inflation do its business,

• 26:12Anthony Pompliano?

  and you are likely to end up with more dollar value over the long run than you have today. But it's because you focused on acquiring shares, not, oh my God, the stock's up today. Oh my God, the stock's down today. Oh my God, it's up again. It's all fake money. It don't count till you sell it. And that's the thing that entire generation, I think, is starting to learn and it's going to make them better investors.

• 26:31Speaker 03

  That's a great reframe, focusing on the share amount rather than the dollar amount. Just to clarify, you see the AI boom right now. This is going to become more of a structural change rather than a cyclical like trend?

• 26:47Anthony Pompliano?

  AI is coming for everyone's job. Artificial intelligence already automated away the central bankers. Nobody want to talk about that. Bitcoin is a more disciplined monetary policy than any other central bank in the world. There's no central bankers. We automated away their asses with software. Right? And now no one calls it artificial intelligence. What do you call a pre-programmed piece of software that automatically executes based on preset parameters that understands exactly what's happening in the world and can execute? Sounds a lot like artificial intelligence. We took intelligence, we made artificial and software, and we executed monetary policy. Right? And so like, if you can do it to a central banker, you can do it to anybody. There's not a job in the world that is going to be safe from this stuff.

• 27:30Anthony Pompliano?

  And so what's going to happen is you're going to get new jobs. What's a prompt engineer? You ever heard of that? Growing up, that was just, can you Google? Right? But now all of a sudden, they're creating new jobs. People are going to learn how to use this stuff to their advantage. They're going to start integrating technologies. Right? Where they say, okay, we're going to take artificial intelligence. We're going to take stable coins. We're going to take machines. We're going to do that. We're going to put all this stuff together. It's going to create brand new products, services, industries, verticals, et cetera. Like, that is where the world is going. And so that's where you get this whole idea of like, we're accelerating. What do you think that the SpaceX rockets use? They got software. Nobody's calling SpaceX an artificial intelligence company. They're using a lot of the same information. They're using a lot of machine learning.

• 28:15Anthony Pompliano?

  They're using a lot of software. So it just becomes like they're all software. It's companies, services, people, whatever. It's just software. Yeah, it's a new way of doing software. Great, it's going to be very powerful. But at the end of the day, it's just software. And it goes back to the old Marc Andreessen, software's eating the world. There's not a lot of people who argue with that. It's just this new type of software. Everyone's like, oh, I don't know. AI might be a bubble. Like, shut up. What are you talking about? If AI is a bubble, that basically means software is a bubble.

• 28:47Speaker 03

  So when people were saying the internet was a bubble, as they've all been proven wrong, some stocks were evaporated. And that's something that essentially you're saying we're seeing right now is not on the bubble. We are, we're just evolving.

• 29:04Anthony Pompliano?

  Here's the problem with people who call the bubble is if prices go down at all, they'll claim victory. So usually a bubble pops and is over. So people call it the dot com bubble. Was it a bubble? Oh, it self corrected. Yeah, it drew down 80%, but then it came back. And so is that really a bubble or was there a market crash? And now it's almost like we're doing like the semantics game, right? But like a true bubble means that it goes up, it comes down and never comes back. But if it comes back, then prices got ahead of themselves a little bit, right? But like the promise ended up being real. And so again, people use bubble because it's like intellectual laziness, right? It's like, oh, the bubble, right? But like, if it comes back,

• 29:49Anthony Pompliano?

  then the promise ends up being fulfilled. You only think it was a bubble because you bought the top and sold the bottom. Like you're dumb. But the person who bought and just held, if you bought Google and held till today, you're a genius. Bill Miller, probably one of the best stories. Bill Miller started looking at, he's a value investor. He saw Amazon. He realized, I think that's a value investment. It's worth less than I think it's worth. And so what did he do? He started buying and it kept going down. He kept buying, kept buying, kept buying, kept buying. Coming out of the dot com crash, Bill Miller was the single largest individual investor in Amazon behind Jeff Bezos. He owned like 15% of the company. Nobody is talking about how Bill Miller was dumb because he bought it at 50 on his way to like eight. Everyone's talking

• 30:34Anthony Pompliano?

  about how Bill Miller is a genius for buying as much Amazon as he did. So it's all about like the victors get to write history. All the bubble callers end up fading into obscurity and they look stupid because the prices end up running. And so Paul Krugman, the internet would never be more valuable than a fax machine, like slap that on his forehead and just be like, dude, what are you talking about? Right? Now, again, is it his fault? No, because he's not an investor. He doesn't have to think long term with skin in the game, all this stuff. He's just trying to grab headlines. He's trying to pontificate. And so it goes back to just listen to the investors. Don't listen to the market commentators, listen to the investors. Paul Tudor Jones just won

• 31:16Anthony Pompliano?

  on national television. He's got nothing to gain. He's the GOAT. The only thing that can happen from here is Paul Tudor Jones' reputation goes down. He's the epitome of Wall Street in terms of success. And he says, the whole story is inflation. If he is wrong, people say, ah, he's past his prime, a little washed up, you know, he hasn't really got it anymore.

• 31:43Anthony Pompliano?

  He obviously has confidence enough to go on television and say that stuff. So just look at the people that actually have money in the market, skin in the game, if they're wrong, they'll lose cash.

• 31:52Speaker 03

  So, speaking of skin in the game, Goldman Sachs came out with a 3% annual per year for the next decade. And part of why they made that forecast, they had a long technical argument, but part of it was valuations are too stretched right now. And they pointed to the chart that showed we're at 1929 valuation levels, and they're concerned. So I assume you, you think that's bullshit?

• 32:18Anthony Pompliano?

  Well, we're at 1929 valuation levels, but we're at 2024 debt levels. That's what they're not paying attention to. We're at 2024 inflation levels. We're at 2024 understanding of the internet. We're at 2024 software levels. So to compare a company in 2024 with the capital efficiency, with the valuation metrics, with the growth prospects, rate of change, all that stuff, to a company in 1929, stop it. Come on. So, is a company in 2024 supposed to be worth more than a company in 1929? Of course. A company today is supposed to be worth more than it was in 2000. In 1929, there were still people riding to work on horses. Instead, today, we got self-driving cars on the road.

• 33:05Anthony Pompliano?

  So what are we gonna do? Uh, Ford in 1929 valuation metric compared to Ford today? Stupid. And so the reason why people like to make those comparisons is because imagine how fortunate we are. We gotta go all the way back to 1929 to find a data point to manipulate in a way, "Ooh, the 1929 crash before the government could step in with any type of stimulus." It's crazy. So instead, I think the better thing to do is say to yourself, "Given the companies today, given their growth rates, given the financial results,

• 33:45Anthony Pompliano?

  what do I think they're worth?" As an individual, if you can't answer that question, stop investing. Just go buy the S and P 500 dollar cost average in, let the market do its thing. But if you're gonna pick individual stocks, you need to have an opinion on what you think the company's worth. And so it forces you to think, "Well, what do I think is a fair valuation metric?" And what you will find is most people will agree that the valuation multiples are higher today than they were 50 years ago, because the businesses are better. Imagine showing up in 1950 and showing someone a business like Amazon, the monster cash flow producing Amazon. They'd be like aliens.

• 34:26Anthony Pompliano?

  They'd be like, "Where did you find this thing?" It wasn't possible. And so that is why valuation metrics go up is because the companies are better. People should pay more for a better company. And so, show me a business that is as big as Amazon that's growing as fast as Amazon. In history, can't find one? Oh, no shit. Then of course the valuation metric's higher. And so it goes back to this idea of also like, "Why, why is the S and P now returning 11% when it used to return 8%?" I don't know. You think maybe that's because of inflation's higher? Nobody wants to have that conversation. It's not because we're smarter. Maybe inflation is just higher. Maybe earnings are better.

• 35:07Anthony Pompliano?

  It used to be 8%. Go all the way back to 1929, 8% compound annual growth rate of S and P 500. Go back the last 20 years, it's like 13%. What happened?

• 35:16Speaker 03

  Okay, so not that I agree with this, but what do you think of how index funds have changed the market? Because you've got a bunch of people that can just blindly buy into the entire market. And in one respect, it does inflate the market by making everything more valuable.

• 35:35Anthony Pompliano?

  Of course, but they're also smarter than most stock pickers. I think it was in 2022 or 2023, I can't remember which year. There was not a single major hedge fund on Wall Street that beat the S and P.

• 35:48Anthony Pompliano?

  Millions of dollars being spent. Now, some of the funds are not trying to beat the market. They're just trying to produce 12% returns year after year after year with as little volatility and risk as possible. That's different. But the people who are actually saying the S and P 500 is my benchmark, I'm trying to beat it. If you don't beat it, maybe you just buy the S and P, right? And so indexing, I think, is actually a very, very good strategy for a lot of people. In a weird way, Bitcoin is an index.

• 36:18Speaker 03

  As in dollar cost averaging into Bitcoin?

• 36:20Anthony Pompliano?

  And you just hold it. And it is an index of this new digital world.

• 36:25Anthony Pompliano?

  Right? Computational power. You've got a programmatic monetary policy. You've got computer infrastructure. You've got decentralization. Like it has all these things that feed into it. Again, I'm not going to argue that Bitcoin is an index, but it's a very similar idea of it's the blue chip that encompasses a lot of the return. It's 60% of the market of the whole stock market. How much is the S and P 500? A big percentage, right? And so if it's 60% of the market and you can just dollar cost average into it and it gives you the bulk of the return. It's very similar type thing. And so I think that what index funds did is they said, if you're smart and you want simple, we got you covered. And so people who buy indexes for the most part are pretty smart.

• 37:09Speaker 03

  Yeah. What do you think is the argument for buying into Bitcoin? Let's say you have a thousand bucks that you have to spend. Why buy Bitcoin as opposed to S and P 500? Like if it's a foreign, you know, if everything is foreign to you, what's the argument?

• 37:28Anthony Pompliano?

  You may not want to buy Bitcoin. I think a huge part of it is, um,

• 37:34Anthony Pompliano?

  a lot of people like to rush into, hey, I have some money, let me go buy something. But, uh, what someone should buy is really personal kind of evaluation and decision. Right? And so, um, think about an extreme example. If you're a 15 year old kid who got a thousand dollars, you know, uh, from, I don't know, doing some yard work in your neighborhood or something over a couple of summers. And they got a thousand bucks, like, what do I do? And you've got a really, really long time horizon and you're really into, uh, technology and everything. You may say, you know what, this Bitcoin thing, I like it. I think it's cool. I think it's gonna be around, I'm gonna buy some. Okay. But if you're 80 and you got a thousand bucks, you're probably more worried about income and making sure that it's not very volatile, et cetera. Right? So like, that's an extreme example to kind of prove the point. But then you look at it and you say, well, a lot of people think black and white.

• 38:19Anthony Pompliano?

  Like I got a thousand dollars, why don't I just go buy it all? Most people who are not, you know, um, experts or focused full time on markets, probably actually should use diversification as a risk mitigation tool. And so don't go put all your money in one asset. And so if you got a thousand dollars and like, I have no clue about any of this stuff. You may actually be better off saying, well, I'm gonna pick five, you know, different things. I'm gonna pick S and P, I'm gonna pick the NASDAQ, I'm gonna pick Bitcoin, I'm gonna pick this, whatever. I'm gonna put, you know, uh, 200 bucks in each one. And like by diversifying, it is making up for my lack of knowledge. So it goes back to this idea of like, who are you? What are your goals? What are the things that you can stomach in terms of risk? And what are the things you can't? And then go make those decisions.

• 39:02Anthony Pompliano?

  Now, one of the things that, uh, I think people give a knock on as financial advisors, I've knocked on them plenty, right? I make fun of them sometimes. You guys deserve it, sorry. But other times you guys are amazing. And guess what? If you're somebody who doesn't actually know that much about finance and investing and all that kind of stuff, working with a financial advisor could be, it can be literally life changing. Say, "Hey, I got money. I don't know what to do with it. Let me go find an expert, somebody who's trained, who's licensed, who's all this stuff. Hopefully, I find a smart one." What do I do? That's their job, right? And so like, again, it goes back to this idea of like, is a financial advisor worth it or not? It depends. If you're working at an investment shop on Wall Street and you need a financial advisor, unless it's just because it saves you time,

• 39:47Anthony Pompliano?

  "I got questions." But for the majority of people who actually don't do this for a full-time basis, they're not educated, they don't feel confident, working with an expert actually could be very valuable. And so I think that's where it just comes down to this whole thing of like, you know, who you are and what your goals are, end up really determining, you know, should you buy Bitcoin or not? And I think, you know, early on, one of the things I used to talk about is like, get off zero. Having zero is probably the wrong number for majority of people, but that doesn't mean go put 50%. You know, it could just be by half a percent or 1% and just dollar cost average, 1% of whatever money's left over every month after you pay, you know, your monthly bills, and just let it ride and see what happens.

• 40:30Speaker 03

  On that note, I think that's all I got for you today, Paul. Thank you for having me.

• 40:34Anthony Pompliano?

  Thanks for doing it. What's up, guys? I hope you're enjoying this episode, but I got a quick message for you. I just released my very first book. It's called How to Live an Extraordinary Life. In this book, there are 65 life lessons that I've picked up over the years. These lessons will teach you about money, investing, relationships, work, health, happiness, and much more. In this book, I wrote letters to each one of my children, and I tried to share those life lessons with them. If you pick up this book, there's three things that I can promise you. The first is that it is very concise. The audiobook is only three hours. You can listen to it on a long drive or on a rainy afternoon. The second thing is that you're going to learn something. It's worth the price of admission just for the lessons themselves. And then the third thing is, it will make you think more deeply about

• 41:19Anthony Pompliano?

  your life and how you try to live it. So go pick up How to Live an Extraordinary Life today. It's a quick read. It's very impactful. It's very concise, and it would mean the world to me for the support. Go check it out today on Amazon, Barnes & Noble, or wherever you buy your books, hardcover, audiobook, it all works. Thank you so much for the support, and I'd love to hear what you think about the new book.