#383: Jim Cramer Becomes A Bitcoin Bull

Jim Cramer is the host of Mad Money on CNBC. He is a former hedge fund manager as well as an author and a co-founder of TheStreet.com. In this conversation, we discuss Jim's early days in the business, how he views the current economic environment, and then we go really in-depth on Bitcoin, gold, and inflation-hedge assets. ============================== Choice is a new self-directed IRA product that I'm really excited about. If you are listening to this, you are likely part of the 7.1 million bitcoin owners who have retirement accounts with dollars in them, but not bitcoin. I was in that situation too. Now you can actually buy real Bitcoin in your retirement account. I'm talking about owning your private keys and using tax-advantaged dollars to do it too. Absolute game changer. https://www.retirewithchoice.com/pomp ============================== 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. Jim Cramer is the host of Mad Money on CNBC. He is a former hedge fund manager, as well as an author and a co-founder of TheStreet.com. In this conversation, we discuss Jim's early days in the business, how he views the current economic environment, and then we go really in-depth on Bitcoin, gold, and inflation hedge assets. I really enjoyed this conversation with Jim, and I hope you do as well. Before we get into the episode, though, I want to quickly talk about our sponsors. First up is BlockFi. I'm an investor in the business, I sit on the board, and I absolutely love the products.

• 0:44Anthony Pompliano?

  BlockFi has three products today. You can buy and sell crypto on their crypto exchange, you can deposit crypto and take out a US dollar loan against your crypto collateral, or you can deposit stable coins or Bitcoin and earn up to 8.6% APY in an interest-bearing account. Go check out BlockFi, they're growing really fast, they've got a great suite of products. BlockFi.com/pomp. Again, BlockFi.com/pomp. Next up is Choice. It's a new self-directed IRA product I'm also excited about. If you're listening to this, you're likely part of the 7.1 million Bitcoin owners who have retirement accounts with dollars in them, but not Bitcoin. I used to be in that situation too.

• 1:26Anthony Pompliano?

  But now you can actually buy real Bitcoin in your retirement account. I'm talking about owning your private keys and using tax-advantaged dollars to do it, too. Absolute game changer. So Choice is a self-directed IRA product that lets you buy Bitcoin, hold the private keys, and use tax-advantaged dollars to do it. It's absolutely a no-brainer. Go check out retirewithchoice.com/pomp. Again, retirewithchoice.com/pomp. Let me know what you think once you try out BlockFi and Choice. 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

• 2:08Anthony Pompliano?

  while sharing my personal opinion on various aspects of each industry. You can subscribe at pompletter.com. Again, pompletter.com. Alright, let's get into this episode with Jim. I hope you guys enjoy this one.

• 2:22Speaker 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.

• 2:48Anthony Pompliano?

  All right, guys. Bang, bang. I have the one and only Mr. Jim Cramer here. What's going on, man?

• 2:53Speaker 02

  Pomp, I gotta tell you, it's one of those exciting times of my life because why? We have an intersection of sports and of stocks like I've never seen. It does seem like every game is a championship game and every stock day is a day where people reconfigure and say, you know what? This is the worst day ever. This is the best day ever. So when you get this level of excitement, when you get this level of schizophrenia, what do you want to do? You want to call the biggest schizophrenic in the world, and that's me.

• 3:23Anthony Pompliano?

  All right.

• 3:25Speaker 02

  You know what month is the most important month?

• 3:27Anthony Pompliano?

  Which one?

• 3:27Speaker 02

  May, National Mental Health Month. Cheers.

• 3:33Anthony Pompliano?

  Before we get into what you're doing now, you have a whole life before CNBC, media, etc. Let's just start with kind of your background. You went to Harvard, you spent a bunch of time as a reporter, then at some point you managed a hedge fund. Just tell us that story real quick for those that don't know.

• 3:51Speaker 02

  Okay, so I get out of Harvard. I don't get my degree, of course, because I criticized the guy who gives you the diploma. He just waved me off the stage. My folks, you know, first generation, my folks were there, they're crying. I didn't get my diploma for a month, so I mean, I got a late start. Then I went home and I was determined to try to get a job. I was rejected by 57 newspapers. I kept every rejection. Most of those are out of business, so I'm still here. What I think was really important was that the Phillies were having a great year and I was determined to watch every single game. I forgot that you have to work, so my mom turned my bedroom into a den and told me to get the hell out. So I moved to Washington to be with my aunt, worked for Congressional Quarterly where I was the Key operator, meaning that I had to operate the Xerox machine.

• 4:36Speaker 02

  Uh, then I, uh, that's true. That was my job. I applied to a million papers. I ended up getting, uh, hired by the Tallahassee Democrat because, uh, I don't know, it was for nineteen thousand dollars a year. That seemed like a great amount. And which it wasn't, by the way, even in Tallahassee. And I get down there and I'm covering sports and I'm, uh, covering FSU. Uh, Bowden had just gotten down there. Uh, I tried to do an investigation of the NCA, uh, and how they were handling the grade degradation of the football team. They, they weren't doing it as well as you'd think. And I realized that there'd be a car, uh, be a bomb under my car. So I very quickly pivoted and wrote about Florida A and M and Florida State. And then, um, I had a terrible break. I say terrible because I ended up living down the block

• 5:21Speaker 02

  from where Ted Bundy killed his girls. Uh, and I did some reporting that got some notoriety. They got notoriety. They got me hired by the LA Hall Examiner where I, I, uh, I really, for a long time, covered, uh, homicide, not a great beat. And when you're too cynical about it, it's time to move on. Then I moved back to New York. I was having some health problems, um, that were, uh, indirectly, oh, check that, directly related to a huge amount of drinking. Uh, I say that because I had a gigantic size of Greenland Mercator projector, yellow stain, which I thought could wash off. But my doctor, who was a farm worker's clinic doctor, uh, he explained to me, no, Jim, in order to get rid of that,

• 6:03Speaker 02

  you have to do something, uh, that you may not want. And he said, do you drink? I said, occasionally. And I, he said, what do you mean by that? I said, occasionally in the morning, occasionally afternoon, occasionally evening. So I got my life together and then the rest is kind of good history. Went to Harvard Law, got hired by Goldman, uh, left to be a hedge fund manager and then started thestreet.com in nineteen ninety-five.

• 6:22Anthony Pompliano?

  All right, so let's start with hedge fund world. While you were doing that, what was that environment like? This is like late 90s into the early 2000s, I think, right?

• 6:31Speaker 02

  Yeah, I left, there were only about 100 hedge funds when I left Goldman. I left Goldman in February of 87. Got it started, had a lot of, you know, I don't know, had about like 40 million under management, which was a lot then. Had a partner, we had a tremendous dispute. He left my, my then girlfriend, who only became my wife and then all became my ex-wife. There's a journey for you. Started work with me and told me right before the crash of 87, that this market was going to crash. And we went to all the great beers and they all loved it. Said, no, no, no, no, it's great. Markets pulled back, you gotta buy. But we sold everything. And because I was in cash for the crash,

• 7:12Speaker 02

  I had a head start on everybody else for years because people kept giving me money saying, well, you needed to get out of the crash. And I ended up doing pretty well. I made a lot of money. It was fun. Gave up most of it to my wife in the divorce, didn't want to have a big fight.

• 7:26Speaker 02

  What can you do? I mean, that's real life. And started over.

• 7:30Anthony Pompliano?

  Got it. And so when you say you started over, was this, you went and did another hedge fund or this is where you started The Street?

• 7:36Speaker 02

  That's, well, at the age of 50, The Street had been going on for a while. It's when I did start, made money. But look, I mean, divorce is something people don't talk about because it's very tough. And I felt very sad about it. And I speak to Karen, spoke to Karen yet today, spoke to her yesterday. But it is, it's very, very, it's very, very jarring because there's no handbook. And I ended up marrying someone that I met on a blind date about eight months after I broke up. There's a terrific article, if you Google The New York Times, it was number one in The New York Times for two straight days, about how amazing Lisa Detwiler is. It was our wedding announcement.

• 8:17Speaker 02

  And wedding announcement got a lot of attention. I'm very proud of that, even as I'm not proud at all about the divorce, obviously.

• 8:24Anthony Pompliano?

  Absolutely. And so tell us the story of starting thestreet.com. Because I think that you've been way ahead of a bunch of these different trends that now everyone's talking about. And by way ahead, I mean, literally, in some cases, 20 years. So tell us that story of why you started it and how, and how you guys kind of built it.

• 8:41Speaker 02

  Okay, so in 1991, I helped start Smart Money.

• 8:48Speaker 02

  And Smart Money then immediately became, wasn't it, it was also Jim Stewart, the great writer, J. B. Stewart, and we just had an unbelievably good time. It was one of those things where I realized that Steve Swartz, S. W. R. T. Z., was visionary, and he got us together and said, "Listen, I want to do a magazine that is about making money in stocks." Our first cover was like Finding the Next Amgen, and it had a submarine. We were very single-stock oriented. I suppose all these idiots now do all these ETFs and say it's dangerous on single stocks. Those people are charlatans, we'll get to them later. So, we were coming out once a month, and I went to the editor, and I said, "You know what?

• 9:33Speaker 02

  There's this thing called the web. This is after four years. And we can come out every day. We don't need to come out in the month, and we don't need any delivery people for... We can go up against even the Wall Street Journal. We don't need trucks, you don't need dead trees, you know this. And they said, "That's a credit deal. We'll buy it from you for $400,000." I said, "No, I mean, if you're gonna buy from me for... I'll just go do it myself." So, I quit Smart Money. I took the money I was making at the hedge fund, and I started The Street with my friend Marty Peritz. And the first thing we did was I said, me and Marty said, "Let's get the best guy in the world." So, I went to Michael Lewis, the great writer. He came out to my farm in Pennsylvania.

• 10:15Speaker 02

  We had a handshake deal, and I never heard from him again. And auspicious. But then what I did was I went to... I happen to believe in young journalists. So, I went to the editors of... I just looked them all up, of every single major college paper in the country. And I offered them stock, and all of them today, they're all working in great places, like Alex Burns is doing great things, and I... Oh, I've got, I've got from Reuters and Dow Jones, people all over the place who are high-level and are doing great things now that, where they really got their start. And I was very proud of the fact that even Dan Calaruso, who's...

• 10:57Speaker 02

  Our editor in chief worked there. We had some amazing people over the years. Came public in 1999, one of those ridiculous moments where our stock opened at 60 and then went to one. With occasional moments where it stopped before Paul Allen put some money in, got the stock up to four or five. We had a series of CEO changes and kinda went to hell. Got some money again from TCB, which is the first investor in Netflix. They're fantastic guys. And that really didn't work out because it came in at 14. That was the level. The stock then went all the way back down again because we kept being advertising oriented.

• 11:38Speaker 02

  Ultimately it became subscription oriented and that's where the money is. People didn't realize that. Lot of rancor, lot of ugliness, not good, lot of heartache. Was it worth it?

• 11:52Speaker 02

  Here's what I say. I gave hundreds of people healthcare insurance.

• 11:58Speaker 02

  And so therefore it was worth it. That's what I did and I'm proud of that. Anything else? No. I am proud that a lot of people got healthcare insurance and that that is the best Singapore that I did.

• 12:11Anthony Pompliano?

  That's awesome. And so obviously you've been ahead of two trends, right? So one is the subscription kind of media trend where you guys recognize that fairly early. And then the second is kind of this personality or what is now being called creator-driven content. So let's start with the subscription first. You really, it sounds like, came up with the subscription revenue out of necessity because the advertising revenue just kept being so kind of lumpy and so much fluctuation, right?

• 12:36Speaker 02

  Amen. I mean, it went from like 26 million to 12 million. We were desperate. I quit the hedge fund. Again, rancorous sadly. Pre-medication, a lot of rancor.

• 12:48Speaker 02

  And then I realized, look, if we don't have a subscription revenue based on personality, as you said, we're not going to make it. So I started doing, we had doing real money, which people paid for. None of the venture capitalists wanted to do that, but it was only real revenue. And I realized I was writing on real money and people kept reading this one column where I was offering action alerts. You get an action alert on real money, it'd be a red arrow. And people then say, Jim, I wish we knew more about those. So I started action alerts plus.com, which is our by far the biggest moneymaker that we have. I fought a lot of the CEOs over having a subscription model. I had one time even tried to buy the

• 13:30Speaker 02

  subscription business from a CEO who will remain nameless. And in all times, there was tremendous tension at all times. And it was kind of like a jail. It was a jail where I ended up making a lot of money. I admit that. But it's the subscription business is a bear because you got to be there every minute. I'm very lucky to have Jeff Marks, Zed Fima to back me up. We have the, we turned it into a club. That was important because we can't tend to do what we'd like to do because of the restrictions I have at CNBC for the travel trust. So we offer a club, we offer different recommendations. You have to know your suitability, but mainly we try to teach you these people who are Robin Hood people, the 13 million strong, they should all, I mean, I was trying to

• 14:12Speaker 02

  figure out, do I do a skinny version for them? Because they desperately need the education that we provide. I'm very proud of the club, even though it's probably the biggest time consumer I have other than Mad Money.

• 14:24Anthony Pompliano?

  Talk a little bit about, I know that you're very big on the financial literacy, right? Just the absolute lack of financial education that both our schools have, but then ultimately what ends up our population. Talk a little bit just about that problem and kind of how you see getting fixed.

• 14:38Speaker 02

  Well, one of the things that just absolutely drives me crazy is that the irrelevance of the vast majority of things I learned. And I was thinking today, I don't know why, I was thinking about my biology class in eighth grade. I mean, and you know, we cut up a lot of frogs. I mean, if we cut up a lot of dollar bills, we would have been smarter. And it is incredible to me how little. People know, I mean frog legs versus fibers. There is without a doubt a dying desire for people to make money with what they see. Whether it be Amazon, whether it be Facebook, whether it be Snap, whether it be Twitter, whether it be Alphabet, you know, there's just, they want to make money and they want to make money in individual stocks. That's different from this long progression we have from individual stocks all the way to indexing.

• 15:23Speaker 02

  I think that's peak and now we're back to individual stocks again. And you know, I just, I, I struggle, I, I struggle because what I see is people making the same mistakes that I saw in 1980, 1990, 2000, 2010, now they're doing 2020. They play with their hearts, they don't know what they own. And I'll give just one really good educational tip that's worked for me. Before you buy a stock, give me three reasons why you would. Now, see what happened is the electronic e-trading made it so that people didn't have to ever talk about a stock. They just buy a stock. So a lot of people buy the Vaxxarx, whatever it is, it's Sorrento's.

• 16:05Speaker 02

  And it was a great city in Italy and they end up completely getting killed because when the stock goes down, they don't know what they bought. So then they sell. So my number one educational suggestion is if you have the time and inclination, you can buy individual stocks, but you better know what you're buying or else you really do have to default and just try to save over time with, with an S and P index fund. But it is just terrible how little education, that's why people keep borrowing money to buy stocks. I don't mind borrowing money to buy a house because you live in it. But when you borrow money to buy stocks and the stocks go down or the options go down, you're out of luck and you're, and therefore you're, even though I'm Jimmy Chill, you're stupid. I mean, try to be Jimmy Chill.

• 16:48Anthony Pompliano?

  I, I love Jimmy not chill, but we'll, we'll take Jimmy chill today. That's fine.

• 16:51Speaker 02

  Thank you.

• 16:52Anthony Pompliano?

  Uh, in, in terms of the kind of creator or, um, uh, brand as an individual, right? Obviously Mad Money, people know you, you've on there every single day punching buttons.

• 17:04Speaker 02

  Thirty five, I mean about 3400 shows.

• 17:06Anthony Pompliano?

  3400 shows. Wow.

• 17:08Speaker 02

  Yeah. Hey, I'm.

• 17:10Anthony Pompliano?

  So help us understand where did the idea come from in terms of making you the personality to drive all of the media and content?

• 17:19Speaker 02

  Starts from radio. I had a radio show called Real Money, started in 2001. Why? Because we needed to make more revenue for the street. I gave the revenue to the street. I would introduce our writers. The opening was a monologue. And then I did the danger zone. Then I took calls. I did a lightning round. That's where the lightning round came from. And then I do an educational piece. And then I would do what's coming up today or later in the market. It ran in a whole lot of radio markets. It was a very big success. It started out kind of a minor network. And then it went to Bloomberg. It used to run it three times. They loved it. And then we switched to CBS, which was fabulous.

• 18:03Speaker 02

  And I did radio and TV. I did Real Money and then went over to Mad Money. Until I got nodes in my throat. I was using 15, I was saying 15,000 words a day. That's too many. I wrote, I got a doctor's note that I gave to Les Moonbees. But that point was not disgraced. And said, listen, he can't do the show anymore. Les let me out of the contract. And I now just do TV. But the TV show is the radio show on TV.

• 18:27Anthony Pompliano?

  Got it. And did you have a soundboard for the radio show?

• 18:30Speaker 02

  Yes, that's where it came from. I had a fabulous producer by the name of Dave Gorad. Who runs Talk for Sirius, for Sirius Satellite. He's a genius. And he came up with Lightning Round. He came back up with Am I Diversified? He came up with the format of this opening. And then he came up with the idea that you have to be educating, educating, educating. So we had that big educating financial literacy block. The radio show, I liked the radio show very much because I happened to love Dave and we had a lot of rhythm. But when I was about to leave CNBC. Because I wanted to do the Mad Money and the CEO laughed at it and thought it was stupid.

• 19:11Speaker 02

  Got a new CEO, Jeff Zucker. He listened to the radio. He said, hey, I want this on TV. And a month later, we had it on TV, right after the Eagles lost the Super Bowl. Because was that there, I got a nabbed through up in the kind of seconds there was.

• 19:28Anthony Pompliano?

  Did you prefer television or radio in doing the show?

• 19:31Speaker 02

  I got the face for radio. I think that's important. I, I still can't believe like people would like watch me. It's frightening. Um, but I absolutely love TV because I'm surrounded by amazing people. The TV, radio is a very solo experience. People don't realize how solo it really is. I mean, you're sitting there with the headphones and the microphone, you know, like you're just going. TV, I've got this tremendous supporting group. I've got a great executive producer. I have a stage manager. I have all these great people in the control room. I've got all these people on the floor running with cameras, all of whom are of course in my fantasy football league, the Slumpadicka Fantasy League. And they're all my friends. I've got great, I've got my head writer is also my only writer. That's my nephew, Cliff Mason,

• 20:16Speaker 02

  who is my sister's kid. He started as a high schooler. We got all the other writers fired when he decided to go to college. He wrote the show when he was in college. He writes all the written pieces. Uh, I do the top though. And it's just a, it's an unbelievable support network of people who love each other. And it's all led by Regina Gilgan, the executive producer, who has built a team unlike any other. I like team sports. And I like the team that we put together and they make it possible. If they decided they didn't want to play anymore, that'd be very hard for me.

• 20:47Anthony Pompliano?

  Absolutely. How important is it that you had the experience as a hedge fund manager, uh, for all of the stuff that you're doing on the media side?

• 20:53Speaker 02

  It's evident. Uh, because I know that what I say is based on real life mistakes I made. And real life, good things that I did. I used to keep a shoebox in my closet of all my bad traits. And every month I would review it and curse it myself and look at what I did wrong. And it enabled me to be right. That's why I spend a gigantic amount of time talking about what to do wrong. Cause if you do things wrong and you don't note them and figure them out, you're not going to change. Doing things right, well, that's just, you know, that's fine. You don't need to worry about that. But doing things wrong, that is sinful. And I spent a lot of time in my book, Real Money, describing all the sins that I committed.

• 21:37Speaker 02

  And I think it's very important for people to recognize that the wins take care of themselves. It's the losses that wreck you.

• 21:45Anthony Pompliano?

  So you've obviously talked a lot about the things you did wrong. Was this a, hey, we did really well as a hedge fund, but we had mistakes and I talk about the mistakes? Or is this, no, we sucked as a hedge fund and I talk about all the mistakes?

• 21:57Speaker 02

  Well, we, we, um, we compounded it 24% after all fees versus the S and P being 8%. So we tripled the S and P. I know that there were lots of people who were skeptical about my numbers, only not about the actual numbers, but skeptical because I did not run billions. I ran 500 million and I thought it was a lot of money to me. I mean, hey, it wasn't my money. It was other people's money, but I kept all my money in the fund and I was able to make a lot of money because I was betting on myself. I didn't love it. I hated myself. I did not comport

• 22:39Speaker 02

  myself well. I was physical in the way that I handle myself, a kind of like an Eagles fan on a bad day. And I was not the person that I wanted to be. And there was some intervention done in November of 2000 by my best friends and my family to get me to quit. I was, I weighed about 35 more pounds than I do now. I was very worried about my heart. I didn't work out and it was time for a change, but we made a lot of money in the interim. And again, what I did was I said, look, you have to work, if you work for me, it's a bargain with the devil. You're going to work six days a week. You can pick, I don't know, some people, it'd be Sunday, some people didn't want

• 23:21Speaker 02

  to work Saturday, but yeah, six days a week and you must be in at 6:00 AM and you leave when I tell you. And you must never, ever, ever come in later than 6:00 AM or else you're late. And there are a lot of people who didn't understand that. And there was a guy, I'll leave, leave his name out because he's just a repulsive figure. But he came in at 6:01 and I threw a water bottle at him and told him, get that. Well, I was much more into F-bomb sim. Now I'm Jimmy Cho.

• 23:51Anthony Pompliano?

  Throwing water bottles is better than most Eagle fans. They would throw batteries.

• 23:54Speaker 02

  Yeah, I know. I threw a snowball at Santa, but I didn't hit him. Batteries are very effective. Hey, that which brings me to Dave Portnoy is constantly talking to me about the batteries and thought, give me a break. We threw, we threw punches. That's what we were good at and other fans because we're like the worst drunks in the world. Now, this, I know that you know crypto and I follow Portnoy very closely and I love what he says. He's always talking about, you talk about the suits and how they don't know what they're talking about and they discourage people. And that's very much all I like. He's a, he's not a teacher so much as he is a pundit. Now, he got all in. I can see, I got this house at the beach in back up and it's on the Shinnecock Canal.

• 24:40Speaker 02

  And right across from it are these Winkle Vibe, the Winkle Reed, the Winkle, Winkle.

• 24:45Anthony Pompliano?

  Winkle Vibe.

• 24:46Speaker 02

  Yeah, they made like a trillion, a trillion dollars in crypto. And I know that they follow, just like the president's son, everybody follows Portnoy. It's insane. And they had him going on the crypto and, and Portnoy was making a fortune. That's what I understood. And then he leaves crypto. Now you know crypto. What the hell happened?

• 25:05Anthony Pompliano?

  So, Dave, I think, and we'd have to ask him for sure, but my understanding is that in 2017 would.

• 25:12Speaker 02

  Oh, we said, we have to put words and days back.

• 25:16Anthony Pompliano?

  In 2017, Bitcoin was going up, you know, from a thousand to 20,000 that year. And there was a bunch of people at Barstool who started buying Bitcoin and basically they were, you know, talking shit to him saying, hey, look, I'm making all this money, you idiot. And so he bought Bitcoin and then did this epic video that's now famous of, he's like, I just bought Bitcoin. I don't know what Bitcoin is, but I'm not going to sit around while everyone else gets rich and I don't get rich. If everyone else is getting rich on Bitcoin, I'm getting rich on Bitcoin. So he goes on this whole thing. Obviously Bitcoin crashes, a bunch of people lose money. And he, he doesn't really talk about it for a number of years. And then just recently, when he started getting into all the stocks and everything, the one thing that crypto is really good at is there's a bunch of people on the internet who've got memes and gifs and tweets and they're ready to rock and roll.

• 25:59Anthony Pompliano?

  And so they've been chirping at them nonstop to stop playing around with stocks and go buy crypto. So eventually he got the Winkle Vibe to come. They tried to explain to him, you know, here's what Bitcoin is, whatever.

• 26:09Speaker 02

  That's what happened.

• 26:10Anthony Pompliano?

  Here's the best part is he puts some money into crypto. And you know, one of the things I like about Dave is that when he does something, he doesn't just kind of dip his toe in, he jumps all in, you know, basically naked right off of the cliff and put, you know, if my understanding is a couple hundred thousand, if not a couple million bucks in. And it's super volatile. So it goes up, you know, eight, 10% green hammers out. He's ready to rock and roll. He loves crypto. Well, when it goes down eight or 10%, you know, he says, hey, stocks only go up, crypto goes down. I'm out of, I'm out of crypto. I'm going back to play with stocks.

• 26:43Speaker 02

  Okay. So let's say they actually wanted to do it in a serious fashion. What would he need to know before he did buy?

• 26:52Anthony Pompliano?

  Yeah. Here's the whole pitch. I think right now is if you look at Bitcoin specifically, the two things that are important to understand is the macro environment. There's no better asset in the world than Bitcoin in terms of you've got interest rates manipulated down to zero. You've got trillions of dollars being printed, which creates a fear of inflation, whether it ever happens or not. Retail is going to rush for inflation hedge assets. Inflation hedge assets can include everything from real estate, precious metals, Bitcoin, et cetera. And Bitcoin structurally, it's the smallest market cap. It's got the most volatility is likely to go up the most in value when people fear inflation. Right? So if you look at like a Paul Tudor Jones, when he comes out and he says, look, inflation hedge assets are going to do great in this macro environment.

• 27:35Anthony Pompliano?

  It's just Bitcoin's going to be the fastest horse, right? So they'll all do well. Just Bitcoin's going to be the most volatile. So when it goes down, that means Bitcoin draws down the most. But when all these assets go up, Bitcoin goes up the most.

• 27:46Speaker 02

  Well, I mean, let me give you the thing. I mean, there's a stock.

• 27:49Anthony Pompliano?

  Okay.

• 27:50Speaker 02

  Called Barrick. Okay.

• 27:51Anthony Pompliano?

  Yep.

• 27:52Speaker 02

  The symbol is gold. I like that because it's easy. I'm important. I must like that. I want to buy gold. He goes by gold. And I think gold is remarkable. And this company has an incredibly low cost. Gold is, they make about $700 per ounce. Um, does gold complement crypto or does crypto make it seem like an eagle?

• 28:11Anthony Pompliano?

  So the way I think about, take like a gold bug and a Bitcoiner, you put them side by side.

• 28:15Speaker 02

  Yeah.

• 28:16Anthony Pompliano?

  They agree almost to the T on all of the structural problems, the macro environment, all those issues. They agree on the theoretical solution, which is sound money principles.

• 28:27Speaker 02

  Right.

• 28:28Anthony Pompliano?

  What they disagree on is the application of the sound money principles. So you can do that through a digital means, which is Bitcoin, right? Or you can do that through more of an analog means, which is gold. What most Bitcoiners would argue is if you put gold and Bitcoin next to each other from a utility standpoint, Bitcoin is more efficient, it's more divisible, it's more portable, it's got kind of all these advantages, right? And there's an entire generation of people, kind of 35 and under, 40 and under, whatever, they're choosing Bitcoin because it is a digitally native asset versus gold, which is kind of the boomer sound money principle asset. Now, they're both gonna, they're both gonna do well, they're both gonna do well, it's just which one's gonna go up more.

• 29:08Speaker 02

  You're exactly right. I see the fluidity of gold and gold stocks and the GLT. I tell people if they can, and this is where I think that you've got the edge on me, go buy Bullion, put it in a safety deposit box, which you have to pay for. Give keys to your kids and remember that you can take Bullion if you have to, or gold coins, choose the next place you have to go, but there's a big vig for gold coins, costs a lot. And the Bullion's heavy and very bulky and you can't just walk around with it. So yes, you're right. My curiosity about crypto is if I had to know, if I were more secure in it, I would say, okay, look, younger people, you may not like the analog. You feel, maybe feel more comfortable with the digital.

• 29:53Speaker 02

  I totally understand people want to buy, you know, they, people want to dig a hole in the backyard and put gold. Well, forget it. I mean, you know, the guy, the guys who catch a lunga find it. Um, so I feel very strongly that I have missed crypto. I have a miss gold. I had my father buy a lot of gold. You go overseas, you can put your gold in. If you in 1933, the government confiscated all the gold that people own. And that was FDR. So how do I know? I read these stories, you know, about someone forgets the code or they lose it. And then I start thinking, well, that's too scary for me. Was that just a phony incident? And also, can can the cyber attackers like I like Zscaler, I like CrowdStrike, I like

• 30:38Speaker 02

  Palo Alto, and they always tell me that people are hacking crypto, or also, they tell me that you got to pay ransomware in crypto. So therefore, you better get better find out about crypto. So obviously, there's more uses. But give me a security story.

• 30:53Anthony Pompliano?

  Yeah. So if you think of gold, right, you can own gold, everything from own Barrett Gold, which is a company that that's in that business. You can own gold that somebody else holds for you, right? You can go own the physical gold and put it in your house, or you can own gold and put it in a safety deposit box and have kind of the the most extreme severe security setup in the world, right? Same thing, same thing with Bitcoin in the sense of there's many different ways to get exposure, right? So you can go today, and you can simply use GBTC, right, with Grayscale Bitcoin Trust, and you can get exposure to the actual underlying asset, right? You can actually buy Bitcoin, and you can hold it in a custody provider. So there's everything from

• 31:35Anthony Pompliano?

  BlockFi, Coinbase, you know, Kraken, Gemini, all these guys have kind of institutional grade custody providers. Then you can actually buy Bitcoin, and you can take possession of it yourself. Most Bitcoiners are going to argue that you should take possession yourself. They like the self sovereignty, they like the security, all that kind of stuff.

• 31:53Speaker 02

  But what if you're in here?

• 31:54Anthony Pompliano?

  Yeah, well, so you can have a hardware device, you can hold it on a wallet on your phone. There's, again, there's a whole spectrum of ways to own it. What I always tell people is, if you know yourself, and you say, there's no way that I know anything technical, you can just go buy and get exposure in a stock ticker, right? You can just buy GBTC. If you say, hey, you know what, I want to go kind of level two, I can buy actual Bitcoin on one of these exchanges and put it into an institutional grade custody provider.

• 32:18Speaker 02

  Oh, GBTC is like GLD?

• 32:20Anthony Pompliano?

  Exactly, for Bitcoin.

• 32:22Speaker 02

  Really? It's $11.

• 32:24Anthony Pompliano?

  It's $11. Uh, there's a premium.

• 32:26Speaker 02

  Why wouldn't people do that? Is there a vig there?

• 32:28Anthony Pompliano?

  There's a premium, uh, and it can get kinda nasty, um, at, at certain, like in a really, really, uh, obviously frothy times with Bitcoin, it can, it can go up. But again, if, if that's the exposure you want, right, then you can just do it there. So it's kind of a spectrum of control. But I think the, the bigger thing here, when you compare Bitcoin and gold, you'll, you'll like this, I think, which is with gold, if I said to you, you know, how much gold is in the circulating supply? You'll give me kind of a really close.

• 32:52Speaker 02

  I suppose 1% every year. So it's incredibly healthy. The shortage of gold right now is extraordinary.

• 32:57Anthony Pompliano?

  Yeah. And, and you'll, but you'll tell me a pretty close estimate of what the circulating supply is. You'll tell me a pretty close estimate to the incoming daily supply. I think part of what the younger generation is realizing with Bitcoin is everything is provably scarce. So one of the big differences between gold and Bitcoin is right now, you know, there's some guy somewhere who's, uh, digging through his field. All of a sudden he finds a gold deposit, right? It's not going to move the market materially, but it increases the gold supply, right? And nobody knows. And there's a latency of information, all that kind of stuff. With Bitcoin, everything is provable on chain. So I know every single day, and I can prove to you that 900 Bitcoin are getting created each day.

• 33:37Anthony Pompliano?

  Then I can prove to you on chain exactly 18,000 or 18,460,000 Bitcoin exist in circulating supply. And so it's this weird world of like, I know that gold is scarce. I just don't know, like to the T, how many ounces exist, right?

• 33:53Speaker 02

  Nobody knows.

• 33:54Anthony Pompliano?

  Point, having that provability, I think that the younger generation, just because they're digitally native, say, hey, that's really attractive. I can actually point to an exact number and, and audit it myself because it's transparent.

• 34:05Speaker 02

  Well, but what happened to all the, um, what happened to all the, the mining? I mean, Nvidia, which is a stock I love, they were making cards that people were used for mining. It, it seems like that that business went away.

• 34:18Anthony Pompliano?

  So there, there's two different types of, uh, ways to mine, right? So if you've got, uh, Bitcoin, they're using ASIC miners. So think of these as specialized computers.

• 34:27Speaker 02

  I know.

• 34:28Anthony Pompliano?

  All right. So just for, uh, for Bitcoin mining, there's also, uh, a bunch of people who are using, um, the kind of graphics cards that you would use for gaming or other types of things.

• 34:37Speaker 02

  That's Nvidia.

• 34:38Anthony Pompliano?

  Yep. But they're not mining Bitcoin. They're actually mining Ethereum and a bunch of other token.

• 34:43Speaker 02

  Or they jackasses.

• 34:44Anthony Pompliano?

  Uh, no, I mean, look, it it's, uh, think of mining as just a data center business. But the difference between mining and a data center business, right? Is the data center business, you got to have a sales force and you got to go out and find customers. With mining, you have a 100% persistent customer demand for 100% of your, uh, computing power. Because all you're doing is you're renting your computing power to an algorithm. And that algorithm is paying you 100% 24/7. You don't need a sales force. So the unit economics on mining compared to a traditional data center is much more attractive.

• 35:16Speaker 02

  So then what happened? Why, I mean, my stepson one day came to me and said, listen, I want to mine. Oh, okay, so that was when it was at 19,000. So exactly. Everybody was a miner. Okay, so let me ask you this. Let me ask you a theoretical question.

• 35:28Anthony Pompliano?

  All right.

• 35:30Speaker 02

  If I were coming out of college, no, no, no. If I were 32, 35 and it started to make money. And felt like of my principle, which is that you need 10% of your assets in gold. I've been a gold bugger all my life. Do you think that I wouldn't even be thinking about gold? And I would just be thinking, I need 10% of my assets in a great hedge against inflation. So I need to be in crypto and that gold would be something that actually didn't compute. Because who wants to have hide something in some place, pay for deposit box? It's really an inefficient way to to fight inflation.

• 36:08Anthony Pompliano?

  Yeah, I I think the first key, and we talked about the financial education, is people are waking up to just, hey, I should have an inflation hedge asset in my portfolio.

• 36:14Speaker 02

  Absolutely.

• 36:15Anthony Pompliano?

  There there's a bucket there, I got to have it. The way that I talk about it is each individual person, so age, income level, goals. All the optimizations are really hard to kind of give, you know, one size fits all advice, right? Obviously. What I do know is the zero exposure to Bitcoins, the wrong answer. So I don't know if it's 1%, 5%, 10%, right? Each person's different, but getting off 0% is really, really important. Because what it does is gold and Bitcoin, while they both serve as inflation hedge assets, Bitcoin has a very, very different return profile, meaning that it's much more asymmetric. So right now, if you look earlier this year, right? Remember, the volatility works both directions. So when equities drew down 30% in March, gold was down 12 to 15%.

• 37:00Anthony Pompliano?

  Bitcoin drew down on one day 50%. I mean, it's just nasty, rip your face off, right?

• 37:06Speaker 02

  Yeah.

• 37:07Anthony Pompliano?

  Now, when we go the other direction and asset prices increase, Bitcoin's the best performing asset. So Bitcoin's up like 45% year to date, right? Gold's up about, I think it's 15 to 20%. Equities are, you know, flat to kind of single digit positive in some of the indexes. And so what you start to realize is if asset prices are going to go up and the Fed's going to continue to just inject trillions of dollars of liquidity and kind of all this macro stuff happens, you just want to have exposure to the most asymmetric asset, right? So I don't think Bitcoin will ever go to zero. So your downside may be, you know, again, 20, 30, 40, 50%, whatever it is. But your upside is hundreds of percent, if not thousands of percent. That brings me to, here's the most important thing you've got to know about Bitcoin. The halving. So no one's explained this yet.

• 37:51Anthony Pompliano?

  There's something called the Bitcoin halving, right? And I'm going to tell you why this is important. I publicly, December of 2018, came out and I issued a million dollar, my partners and I issued a million dollar challenge to any manager on Wall Street. They could put any asset, any individual stock, any asset for a decade, Bitcoin will outperform it. Million bucks goes to charity, knock yourself out. Not one person took it. Here's why. Because the Bitcoin halving is a programmatic decrease in the incoming supply. So imagine if in 2008, when gold went down 30%, the government steps in, they printed a bunch of money, everyone ran to gold, went up 200%, hits an all time high in 2011.

• 38:31Anthony Pompliano?

  Imagine when everyone ran to gold, if 50% of the incoming supply of gold got taken out of the market, so 50% of the miners just shut down. Of course, the price would explode, right? That's what happened with Bitcoin. So in March, liquidity crisis occurs, government steps in, starts printing money, everyone runs for inflation hedge assets, Bitcoin being one of a bunch. On, in early May, there was a drop from each day, 1,800 Bitcoin being created, to now each day, there's only 900 being created. And that happens every four years. So that'll go on for four years, 900 a day get created, and then it'll get dropped to 450 after that four year period. So programmatically, what you see is you're actually making the asset more and more scarce over time.

• 39:16Anthony Pompliano?

  But it just so happens that this last one occurred at the exact macro environment where everyone's rushing for inflation hedge assets. And so I actually think Bitcoin's price is going to top $100,000 by the end of next year.

• 39:28Speaker 02

  See, I have to say, I'm not going to disagree with that. And the reason why I've been focused on it, lady gave me the education on it. Stan Druckenmiller is a friend of mine, and he's a great investor, though he is a Steeler fan, which then causes complications. Although I have Juju Simon and Houston there, I always call him Simon, but here's the problem. He said yesterday that in three to five years, we're all going to have to pay for what the government. And my friend Joe Kernan asked me that. And I said, I have been so possessed by that, because I know that we're going to get hurt. So when I go to my inflation handbook, what it says is buy gold, buy masterpieces, and buy mansions. Those are the three things that that's it. In my age,

• 40:13Speaker 02

  okay, those are the three things you had to do. Now, my wife's in real estate, so we've gone with the real estate as our hedge, right? What we didn't have in that menu was crypto. And I think that you have to have, I'm going to still say gold or crypto because I have so much gold, but you have to have one or the other. And I like what you're saying about crypto. I'm not in crypto. Remember, I'm not in gold for the appreciation. I'm in the gold, I'm in gold for the alternative. But I don't know how my kids are going to pay down what happened. I think we had to do it to avoid a depression. So I'm glad we did it. But I see the dollar going down. And most importantly, I know that no one wants to raise taxes in this country. And even if we

• 40:55Speaker 02

  did raise taxes, we still can't afford it. We're not cutting social security. We're not cutting Medicare. We're on a collision course where which makes me feel great about the gold I own. But I do feel that it's perfectly logical to add crypto to the menu. And now, after speaking to you, I think that my kids, when they get my inheritance, won't feel comfortable with gold, and will feel comfortable with crypto. And I don't want them, I want to, I try to put everything I own on one piece of paper. They won't understand the deposit box at, say, Toronto Dominion, okay? But they would understand crypto. And I had to start recognizing that maybe I am using, maybe I am using a type of

• 41:39Anthony Pompliano?

  Well, here's what I'll tell you is if you take 10% of your gold position, right? So just whatever you have allocated for your inflation hedge bucket. If you take 10% of that bucket, so let's see if 10% in gold, you just take 1% of your portfolio. All right, 10% of your gold. Okay, take 1%, you put it in Bitcoin. That 1% of Bitcoin will outperform the 9% of gold over the next 18 months. Hands down, not even close.

• 42:05Speaker 02

  And you want me to actually do the bit, but my kids set up the Bitcoin for me?

• 42:10Anthony Pompliano?

  Yeah, they'll do it or I'll help you do it. Whoever will help you do it. It's super simple. And what you end up doing is you would end up owning 1% Bitcoin, right? In your portfolio. If it goes to zero, you lost 1%. Not the end of the day, right? Not happy, but not good to the day.

• 42:24Speaker 02

  No, but that's okay. I have stuff in it. I have an international fund that's done terribly until now. And I just said, look, I can't have all my eggs in US basket. I want to have, like I said, I got the, I lost the masterpieces to my ex-wife. God love her, some beautiful paintings. They're total track. Um, but then I have the, um, I have the gold. Uh, I have the, the so-called mansion, the real estate equation. Okay. And what I do is I need, and I'm not a, you know, paid spokesman for why I need gold or why I need crypto. But I just need something that my kids will understand as a hedge to inflation. And they will never understand gold. And the reason why they'll never understand gold is they think gold's dangerous.

• 43:08Speaker 02

  It's dangerous because it can be stolen. It's dangerous because they don't want to take it out of the bank. It's dangerous because they may forget where it is. Okay. I mean, you know, let's say I, you know, people talk about like, well, crypto gets hacked or whatever. You know what's really bad is when your kids can't find your gold. And that is, by the way, not unusual. So this is why I am fixated on needing to own crypto. Because I fear massive amount of inflation and I don't have, you know, gold will do okay. And the houses will do okay. Those are going to keep me running in place as opposed to pulling off the cliff. The idea of actually making money? Well, holy cow, I'd take a shot at that with 1%.

• 43:52Anthony Pompliano?

  Think about this. So one thing is important, right, is when you talk to your kids about it, you got to make sure it's Bitcoin, not just crypto in general, right? Because Bitcoin specifically has the inflation hedge, things that we're talking about here. The other ones, you know, advantages, disadvantages, but Bitcoin specifically is this kind of inflation hedge type asset. The thing that I would say is that people forget when they hear this, though, it becomes very attractive. 6040 global portfolio over the last five years or so, about 7.2% return, right, annually, right? If you had taken 1% of your assets and put it in Bitcoin, even with all the crazy ups and downs, everything, you would have taken that 7.2% and gone to 9.2.

• 44:33Anthony Pompliano?

  So it added 200 basis points of performance annually, right? If that 1% had gone to zero, you'd gone from 7.2 to 7%. So 20 basis point downside, 200 basis point upside. So it's literally 10 to 1 in terms of risk reward, right?

• 44:47Speaker 02

  Right.

• 44:48Anthony Pompliano?

  The key is the standard deviation of risk stays about the same and the sharp ratio goes up over 20%.

• 44:54Speaker 02

  Really?

• 44:56Anthony Pompliano?

  Because it's a non-correlated asset over long periods of time.

• 44:58Speaker 02

  Non-correlated asset. You're so right. Now, let me ask you a very obvious question for you, but not for me.

• 45:04Anthony Pompliano?

  Okay.

• 45:06Speaker 02

  Will my kids understand where it's kept? I mean, is it an app?

• 45:14Anthony Pompliano?

  So the way to think about this is wherever you buy stocks, the way that your kids are going to get access to that is either through a will or you're going to have to tell them username, password, all that kind of stuff, right? Same thing here. So if you don't self custody it, meaning that you actually take physical possession, you know, sovereign possession, what you would have to do is let's say that you use Gemini, the Winklevoss thing, right? You can go on, set up an account, got a username and a password, you buy Bitcoin, you can hold it in there, you have a custody solution, right? And then you just got to make sure that your kids or whoever oversees the will or whatever knows how to get access to that account, right? It's the exact same thing.

• 45:53Speaker 02

  Thinking about this is I have trust with my kids and they're laddered, you know, when they turn 30, when they turn 30, they're 29, 26. And I have stock for that index funds because not on individual stocks. And I am thinking that when they turn 35 and turn 40, I would look, I hope I'm there, but you never know. Right. Uh, I would love to have right now some Bitcoin in there, but I'm worried what they'll do is they'll read the will. So why, where's the Bitcoin? What his dad did? What did he do? He made it side like high and dry. I don't have the code. I don't have the code. I just lost it. Someone hacked it. I want them to feel comfortable when they turn 35 and 40 that I didn't buy them something that doesn't exist.

• 46:34Anthony Pompliano?

  Yep. The exact same thing. I mean, look, as long as you've got, uh, in an account where you want to pass it on, you just got to have a, uh, them have the information on how to get in the account.

• 46:44Speaker 02

  Now, when Square tells me that they'll handle trades, can you keep it at Square or you really want to use like the Gemini?

• 46:52Anthony Pompliano?

  Uh, you can keep it on any of these exchanges. One of the things that you're just doing, right? Just like any other, um, kind of financial institution is you're just offloading some of the risk to that financial institution. So you've got to underwrite their security, their solvency, all that kind of stuff. The, the key piece is the Bitcoin ethos, right? That the hardcore Bitcoiner is all about self sovereignty. So just like you say, hey, go get the gold and put it in, you know, your backyard or put it in a safety deposit box, whatever. Bitcoiners have the same ethos. One of the challenges for people who are older or not as technical is that there's a somewhat technical process to take physical control of a digital asset. Right? And so what I always tell people is like, get started by getting off 0% exposure. So get to 1%.

• 47:36Speaker 02

  Right.

• 47:37Anthony Pompliano?

  Hold it in, uh, one of these kind of, you know, well-known, uh, large custody providers to start, then.

• 47:44Speaker 02

  Mentioned Gemini, I know you don't take any money. Gemini is the one that, that they're in.

• 47:49Anthony Pompliano?

  Wigglevoss Twins, that, that, that's their exchange, right?

• 47:52Speaker 02

  So you don't want to make fun of them. They're actually great guys. They belong to a club that I belong to and they're incredibly kind and upstairs. And I see them. I don't want to maybe making fun of them, but.

• 48:01Anthony Pompliano?

  If you tell them, if you tell them that we talked and you're going to buy Bitcoin, they'll be your best friend.

• 48:06Speaker 02

  Hey, you know, they like my wife, you know, she's the head of the entertainment committee at the club we belong to. And I need to do this for my kids. I need to do it because they are much more at risk than I am because of what happened. Let's say before this, okay, before February, before the pandemic. Well, I would have said, you know, one of the stocks are doing well. I feel they're a good hedge against inflation. There's no inflation. But then everything broke down and now I know I'm being reckless. See, I was being prudent with cash. Okay. That's what I thought because you have stock, you have cash. That's great for your kids. Remember the 2926.

• 48:47Speaker 02

  After what happened during this period, it's not right. I know now I went from being prudent to being reckless. So do I have to go buy them paintings? Again, very hard and subjective. Okay. Real estate, again, taking care. I've taken care of that asset. But I think that they will be by when by the time they're 35 and 40, much more comfortable owning not the gold that they have, but the Bitcoin that they have because they're digital. And I am analog. I love that. It's, you know, and look, I have no regrets. That's who I am. And I've loved gold and there's a lot of people who hated gold. The whole time I've loved it. And I've loved it for exactly what you've been talking scarcity value. I like the touch of it.

• 49:29Speaker 02

  But this touch of it is no longer as valuable as the scarce. That's the one that I like. And as long as you're telling me that Jim, this is something that you can put and you can tell your kids, they will not be baffled by it. They will not be scared. That's really important because I was concerned that they would be.

• 49:47Anthony Pompliano?

  That they're going to understand it better than you will just because they're digitally native, right? Which is, which is crazy. Here, here's the best part about Bitcoin, right? And this is why Portnoy loves crypto in general so much. Is because not only is the asset great, but the community, they are the best memes and gifs and tweets, etc. on the internet.

• 50:07Speaker 02

  Things.

• 50:08Anthony Pompliano?

  Of course.

• 50:08Speaker 02

  They think.

• 50:09Anthony Pompliano?

  So if you.

• 50:10Speaker 02

  Daughter who just does, you know, her whole rap is to do incredible Instagram and, you know, she takes photos of, of, of food. She takes, I have another daughter who is just me loves the meme of me going like this. They all understand. And when I tell them about, look, there's this deposit box at this bank and like, they're like, dad. What it what two keys like in the movies and what and do I have to go and like what everyone will see me in that room and when they know that I walk out of it, they'll know that I have it and you know, gold coins, when you tell me that you're buying a dollar gold coin for fifty two dollars, I don't get that at all because I did that too. I bought

• 50:51Speaker 02

  gold coins and I know it's just incredibly inefficient. And I'm possessed by this, which is why I, you know, tell them, listen, you can go buy a gold fund, junior gold fund, allowed to do that. But I I know that I'm being reckless now. I know that when I saw that I, you know, we got to talk, I talked with my wife about this. I said, Look, I gotta breach this thing that I'm not comfortable with. I'm just not. And she goes, Well, is that really good and prudent money management? Why don't you educate yourself? And I said, Well, I'm gonna ask this guy, I mean, I was gonna go to to Portnoy. I was because yeah, I mean, I said, Okay, he's in there. I gotta figure this out. And then he turned on them

• 51:32Speaker 02

  and yeah, he and I'm thinking about seven years, uh, seven years, fifteen years and twenty years. And I know that I am, if I just had that cash in there and some gold, that I they may look back and say, Why? What was my father's thinking? Why didn't he know about this? He was supposed to be such a savvy guy. And I think the answer is because I'm scared. But you know, I mean, I like this idea that the community is behind you. I like the fact that this Gemini is somebody you trust and I I have to do my work, obviously, and the others. You know what, of course, would be the easiest is like if, you know, if JP Morgan, which I have, I just told JP Morgan, Listen, I want to buy some Bitcoin, but they I they won't do it.

• 52:17Anthony Pompliano?

  So JP Morgan hasn't done it yet. I'm sure they will at some point, but Fidelity has a

• 52:22Speaker 02

  I have money with Fidelity.

• 52:23Anthony Pompliano?

  All right. So Fidelity has a very big digital asset business. And one of the things that they're doing is basically helping a bunch of their clients get into Bitcoin, right? So whether

• 52:32Speaker 02

  They can help me?

• 52:33Anthony Pompliano?

  Uh, I think so. Yeah, they they can basically, they can

• 52:35Speaker 02

  I have most of my money at Fidelity.

• 52:37Anthony Pompliano?

  Oh, then there you go. Yeah, they can absolutely help. I'll when we get done, I'll introduce you to to somebody over there who can who can help you do it.

• 52:44Speaker 02

  Well, that would be great. I mean, look, I we got a little sidetracked here. But the reason I want to stay with this education, I guess, that's what I'm about. I'm a faux educator if I don't know Bitcoin. You know, for a long time, people say, well, how about Bitcoin? I say, well, I don't trade coffee and I don't trade cotton and I don't trade Bitcoin. And that sufficed for a very long time. Uh, it, it worked until the $3 trillion package. Cause we don't have that. We don't have 3 trillion in this country. You can raise the, you can make the rich pay as much as you want. This is the first time in my life, and I've said it publicly, that I know we don't have the money.

• 53:28Speaker 02

  And I, that's one of the reasons why I like gold so much, but like you said, how about upside? I don't understand. Look, when you buy insurance on a car, you don't expect, you know, you don't like, you have insurance on a Toyota and then you get paid for Lamborghini. It doesn't work like that. You get paid for the Toyota and you're thrilled. You're thrilled. I would love it if I put insurance on the Toyota and I got the Lamborghini. Uh, with a little bit of downside, maybe I don't get as nice a Toyota. And, and so this is what I've been, and it's literally what I said this morning on, on Squawk on the Street, which is that I know it ends badly. Not the stock. I can tell you that. I'll find you the next Nvidia, whatever. My, my kids can, you know, they do.

• 54:10Speaker 02

  I mean, they, they later on they can do stock, but I, I can find the Nvidia. But I can't find the cash and the cash is what I'm most worried about. Because I know the cash is something that will be looked at as laziness and will be looked at as I didn't pay attention to my kids.

• 54:32Anthony Pompliano?

  The, the best thing that you're gonna see, and you've probably seen this chart before, is, uh, if you go back to 1971 and you, uh, take the US stock market denominated in dollars, it's like a perfect line up at 45 degree angle to the right, right? It just looks like great compounding growth. If you denominate the same exact stock market in gold, it's down.

• 54:53Anthony Pompliano?

  Right? So the stock market's down denominated in gold. It's just that the dollar's being devalued, which again, that that is what is happening. And the bottom 50% that are uneducated about this stuff, right? They're the ones who get hurt the most because they live paycheck to paycheck. They just have cash sitting in their accounts, all this stuff. But for those that can educate themselves, you got to get into these inflation hedge assets, right? And so gold is going to be just fine. Like, it's not a gold's going to do bad. It's just that Bitcoin is going to be way more volatile and over very long periods of time. I think if, don't quote me on this, but if I remember correctly, Bitcoin's compounded annual growth rate is over 35%. Okay. Right? So it's just, it just continues to be volatile, but you need volatility to go up, right?

• 55:35Speaker 02

  Would you do this? Here's why I own stocks. I tell people like this point. I said, look, I don't really trust the market, but if you really got to get in, let's use a very good example. You really got to get in, I like Nike, okay? And Nike at the moment was at 118. And then it fell to 115. I was at an all time high at 118 today. Now it's 115. And I would tell people, okay, this is it. Buy, let's say you want to buy 200 shares of Nike. Buy 50. Now people want to go all in. They want to buy I want to get started in crypto by buying the equivalent of 50 Nike, okay? So the person I deal with, well, the first thing I'm going to say is, do I need to be insured? Do I need to have, I mean,

• 56:17Speaker 02

  you know, I can buy insurance that my, when I say insurance, what I mean is that it won't vanish.

• 56:23Anthony Pompliano?

  Yep.

• 56:23Speaker 02

  Because that's what, one of the reasons why I'm afraid to recommend is I keep thinking it's going to vanish.

• 56:28Anthony Pompliano?

  So here's, if you're really, really worried and it scares the hell out of you're the most conservative person in the world, you can literally go buy GBTC. Now GBTC is that ticker that just has the Bitcoin exposure. There's some premium to it, right? What I would tell people is if you're an accredited investor, you can actually go and participate in the private placement of GBTC. So you can go to grayscale and say, hey, I don't want to buy this stock publicly. I want to invest in the private placement. You got to hold it for six months illiquid, right? But at the end of six months, you still have the same price risk of Bitcoin, but now you capture the premium rather than pay for the premium. So there's a little bit of premium.

• 57:07Speaker 02

  Owning it outright is for.

• 57:09Anthony Pompliano?

  Owning it outright, I think is the best thing to do.

• 57:11Speaker 02

  I think that if I'm going to go in, here's what I'm thinking. I immediately get comfort with that grace. Why do I get comfort? It's a stock.

• 57:18Anthony Pompliano?

  Stock, of course.

• 57:19Speaker 02

  I know that if you really want to own gold, you buy gold boy. So I figure if I want to own Bitcoin, I should go buy Bitcoin. I mean, to me, the analog works.

• 57:32Anthony Pompliano?

  Yeah, it does. And the other thing you were talking about was basically dollar cost averaging. So here's a crazy stat for you, which is in December of 2017, Bitcoin hit $20,000.

• 57:42Speaker 02

  Right.

• 57:42Anthony Pompliano?

  It fell from 18 until today. It's now around $11,000, let's call it. But if you dollar cost averaged every single month, the same amount of money from the high all the way till today, you would be up double digit percentages on your investment.

• 57:58Speaker 02

  Okay, well, that's how I do things. I mean, I tend to either do it when I was used to be able to be more active. I would do it every month. I'd invest every month. And then if the market fell between 10 and 15, I would double up that month. Okay. That's the plan I would have for Bitcoin. Now, I always am afraid that the broker will say, oh, my God, here comes Kramer again. Every single month he's do it. But you know what? I shouldn't worry about that. Right? I mean, I shouldn't let that deter me from buying a smaller amount to get started. Because I'm not only use the word I'm afraid. I want to use the word that I want to get my feet with.

• 58:34Anthony Pompliano?

  Yep, I think that's perfectly fair. And the whole thing here, right, is as you know, if you want to educate yourself, the best thing to do is put skin in the game because you'll start paying attention.

• 58:44Speaker 02

  I always tell people, look, before you, I mean, I want you to pay for portfolio, but we've already passed that phase because I watch this. But I tell people, look, I don't want you, let's say you like Tesla, okay? All right, buy 10 shares of Tesla. They say, no, I got to be big. No, I need you to feel like if it goes down, you can buy more, not if it goes down, I have to sell. And that is something, that's the buy high, sell low. For this, what would I have, let's say today, when I have a conversation and the one, let's just use, let's use $10,000. Okay, let's just pick that. So I say I want to buy $10,000 worth of Bitcoin.

• 59:26Anthony Pompliano?

  Yeah, you could go do that.

• 59:28Speaker 02

  Really?

• 59:29Anthony Pompliano?

  Of course.

• 59:29Speaker 02

  You say, listen, I want to journal the 10,000 from my cash account to Bitcoin.

• 59:35Anthony Pompliano?

  Of course, you basically, you just got to determine, do you want to buy it through fidelity? Do you want to buy it on one of these exchanges? You know, whatever, wherever you want to normally buy, it's the same thing.

• 59:43Speaker 02

  Because that's where my assets are, so my kids understand. Now, look, I apologize for my lack of knowledge, but let me just tell you.

• 59:50Anthony Pompliano?

  You're doing a great job.

• 59:51Speaker 02

  Well, you know, I gotta be, you know, I gotta play with an open hand. The fact that I've been a gold bug all my life has made me feel very comfortable as someone who does, who likes alternative assets. Okay, the fact that my wife did the real estate part of her portfolio is again, that's the inflation hedge. When I saw that you wanted to talk with me, I said to myself, okay, why don't I just be naked about? And just say, I don't know. In the same way that I went to the Apple store, the first time I bought the app, I went in, there was this fabulous guy, it's short or small. I said, listen, I don't know anything about Apple. I showed me everything. And he said, what do you know? I said, no, I don't know anything. And, you know, there was a guy next to us, a kid next to us, he's like, oh, my God, what an idiot this guy is. I'm not afraid of being an idiot.

• 1:00:34Speaker 02

  The only way to start, if you're an idiot, is small, and then you get educated and you become a rookie, and then you become, you know, a second and a third year. Because I am convinced that my kids will think that I'm negligent. There was actually a little dispute between them. My kids said, listen, first and inheritance that my dad left, I was very nervous because of the precedent, candidly, because I think he's a little erratic. We may disagree on that, but we're disagreeing, wow, he's a little erratic. So I did not put as much money that my father would have liked into the kids' account as stock for mutual funds. And I now feel I got a chance from Bitcoin because I'm not buying at 20,000.

• 1:01:16Anthony Pompliano?

  Of course, look, it's a thing where if I'm right, in the macro environment, serves as the tailwind. And if I'm right, that supply and demand economics are going to remain valid, meaning that that Bitcoin halving is going to have a supply shock, right? And as demand increases, price has to go up. Then Bitcoin is likely to be the best performing asset in people's portfolio. It's just, it's only a $200 billion asset, right? So it's so small in the global financial system that of course, if you, you know, billion dollars of capital inflow to Bitcoin versus gold versus equities, you're going to get way more movement on Bitcoin because it's a smaller asset class, right? And so I think that's a key piece of this is it feels like everyone's been talking about Bitcoin for years,

• 1:01:58Anthony Pompliano?

  but it's still pretty small, like the, the, the world hasn't started to really kind of move assets there. I think that this macro environment, you know, I joke and said the Federal Reserve ran a $3 trillion marketing campaign for Bitcoin, right? And so it's like people are starting to pay attention.

• 1:02:14Speaker 02

  Again, but before what happened, before the pandemic, I would have had a nice conversation about Bitcoin's kind of interesting. And yeah, it's not for me. I think that what really changed my mind was my daughter, uh, my 26 year old saying, hey dad, how are we going to pay for 3 trillion? And, and, but it was one of those questions. It wasn't like, how are we going to pay for 3 trillion? It was like, no dad, how are we going to pay? And I looked at her and I said, well, we have to raise taxes. She goes, but dad, what are you going to, there's not enough money if you raise taxes. So what happens? And I said, well, we don't know what happens. And she goes, but dad, you're the guy. And, and I said, I, I'm not the guy.

• 1:02:58Speaker 02

  I, I, I, I have an idea, which is not a good idea about what will happen, which is bad. And she said, well, what can I do? And that's when I said, listen, we're going to get you a house, get you some gold. Uh, and I did, I got you the beach house. I mean, all of these are designed for what I regard, not, it's not going to be apocalypse. It's just going to be not good.

• 1:03:17Anthony Pompliano?

  Yeah.

• 1:03:18Speaker 02

  And I want to hedge against not good. I need, I expect that there's going to be global warming and I expected if I bought a house right on the beach, it's bad. So we bought the house, five houses in, okay? That was the hedge against, yeah, it's ocean globe. Um, and that was the hedge against what's going to happen. Uh, but that's an illiquid asset that has, I think, a residential risk, uh, particularly if things get ugly, okay? Uh, which I think is a perfectly, before I would have said, I said, what are you crazy? I mean, the march of progress, but progress stopped. Uh, and this is a very serious issue and that the trillion, 3 trillion. So I got to take action and I'm going to take action after this video.

• 1:04:01Anthony Pompliano?

  The, uh, my favorite stats are for the last six fiscal years, the government has set a new record for federal tax income revenue, right? So we keep taking in more and more money, but the intra-year deficit gets bigger and bigger. So it's not, it's, it's not a, it's not an income problem, right? It's just, we just keep spending more and more and more and more. And people will debate, you know, what should we spend and what should we not? I don't care. All I know is that when you print that much money, I'll tell you where it comes from. They're going to steal the purchasing power of all the people holding cash.

• 1:04:34Speaker 02

  Yeah, I, I told my daughter to read about Weimar, the Weimar Republic, uh, read about what happened before the third right, how they wiped out, uh, purchasing power, and then they wiped out savings. It was a one-two punch. Uh, everyone was penniless. One of the big reasons why you had the tumultuous, and I'm not saying it's going to happen again, but you had the tumultuous things that happened in Germany had a lot to do with them printing money the way we printed. They were walking around with wheelbarrows. I hope that doesn't happen. But as a student of history, I, I'm ashamed that I have not acted on what is the first time that I've seen a Weimar-like

• 1:05:16Speaker 02

  situation in our country. And I believe in 2011 with the, uh, I spoke to the fellow eagles when they just, uh, just had just downgraded the debt. And I said, listen, you don't have to worry. We're the strongest country in the world, blah, blah, blah. Now it doesn't have to do with one of the strongest countries. What it has to do with is we can't pay. We just can't. So what do you do? Now you can go overseas. I mean, that's not my plan. Yep. Uh, or you can hedge and a hedge with, I've got the hedge on one side, but I don't have appreciation of hedge. And that's why I gotta make this move, which is why I'm glad I talked with you because for the most part, I'm a stock, I'm a stock guy. I know that. I'm a gold guy. I'm a real estate guy because my wife, um, but I

• 1:05:57Speaker 02

  didn't have anyone to talk to. And the reason I didn't have anyone to talk to is because of the, of what I call the Portnoy factor, which is that is everybody's a speculator. And I'm thinking about 10 years because I'm thinking about when, I mean, my kids will not, the moment I make that move. My kids will not be able to touch this until 23rd.

• 1:06:15Anthony Pompliano?

  Okay, of course.

• 1:06:16Speaker 02

  So I, that's, I'm certainly not trading. I, and I'm gonna buy it in state just because I don't want to commit all at one level. But, you know, if you know you're not gonna be able to touch something in 2030 and it's cash, well, believe me, that cash is not gonna be worth what you think it is. And I am, I'd like to think I'm a pro. Uh, I'd like to think that I have analyzed the situation. But the $3 trillion that we printed changed everything that I believed in. And now if you told me, honest to God, if you told me that I should be buying lakes in Maine, because there, I, I, I would do it. I mean, I'm so, I am so concerned. I'm not frightened, I'm not scared, but I'm concerned that I'm not being proved. And I now think that Bitcoin is proof.

• 1:06:59Anthony Pompliano?

  When, when we get off, I'm gonna tweet to everyone and tell them to send you the best memes that they have to welcome you to Bitcoin. And you'll be very impressed with the meme ability.

• 1:07:07Speaker 02

  And also, I'm not walking around with, if I walked around with gold in my pocket, you said, "Welcome me," I would like, I'd hide under the rug because then everyone knows I'm walking around with gold. He must have gold coins sewn into his jacket, you know? But this is one that obviously, um, it, it's not gonna be stolen. It'll be, it'll be, I don't, I don't mean to push fidelity. My money's been with fidelity since 1977, so I have a long history with it. Uh, but what it tells me is that, uh, when the inevitable happens to me, it will not be like it disappeared. It will be where the rest of the stuff is. Uh, a, and that my kids will feel that it's like cash, but better.

• 1:07:47Anthony Pompliano?

  Absolutely. Before I let you go, I ask everyone the same two questions. First one's, what's the most important book you've ever read?

• 1:07:53Speaker 02

  Uh, Anna Karenina, uh, because yeah, Tolstoy, because it really is about, about love, um, and about, uh, health and about tragedy and about how sadly, life doesn't work. Life does not work out. And that's, other than for Levin, that's what that story's about. And I want people to read it because many people think, the young people think that life works out and they need to have a wake-up call that it doesn't. And no one writes it better than Tolstoy. Tolstoy's my favorite writer.

• 1:08:27Anthony Pompliano?

  That's a great suggestion. Uh, second one's more fun. Aliens, believer or non-believer?

• 1:08:35Speaker 02

  Can I say ghosts?

• 1:08:37Anthony Pompliano?

  You are the second person, you're the second person to say you believe in ghosts, but not aliens.

• 1:08:41Speaker 02

  My, um, my school up and then I know we got to stuff to do. Uh, my cousin, you know, I never met him. He was deceased, but my cousin was a, was a, a pilot. He was a bomber pilot.

• 1:08:55Speaker 02

  And he went, it was, uh, he flew in the great raid to, of, over Hamburg. And he was shot down. It was the Hamburg raid. You couldn't, there were so many planes. It was dark. He got shot down and he died. And my grandma told me that there was a picture of him on the piano. Had been there the whole time for the whole war. And when she came home, it had fallen. And that it's impossible to rationalize. And I say, no, it is. It was a ghost. Now you could say, well, Jim, you're absolutely nuts, but why did it fall?

• 1:09:37Speaker 02

  I go to a, uh, my mom and I, my mom loved this place called the gritty pals. Uh, in theirs. And that we ended up getting the same room and I swear I saw her in the mirror. Big mirror. I swear I saw her and my kids do too. And I genuinely believe in ghosts. Uh, now I don't believe in ghosts to the point where like gay, you know, when your passion gets to be ghosts. I just can't rationalize certain things, uh, other than to believe that they're ghosts. So I may be not aliens, certainly ghosts.

• 1:10:10Anthony Pompliano?

  All right. That's personal experience. Can't say anything wrong with that. Listen, thank you so much for doing this, ladies and gentlemen, Mr. Jim Cramer himself.

• 1:10:18Speaker 02

  Thank you, Pop.