#948 Ross Gerber On The Bull Thesis for Bitcoin and Tesla

Ross Gerber is Co-Founder & CEO at Gerber Kawasaki. In this conversation we discuss Twitter, Elon Musk, Tesla and Bitcoin. Ross gives us some brand new insights as to how Saudi Arabia owns Twitter and where Tesla will begin building 2 new Gigafactories very soon. ======================= Since 2018 Copper has been at the forefront of institutional digital asset development. From award winning custody solutions, to creating the first truly off-exchange settlement function, Copper pioneers technology, products, and services, in lock-step with a rapidly changing world. No other infrastructure provider covers as many assets, across as many exchanges, with the speed and security that Copper can offer. To learn how Copper helps the world’s largest institutional investors secure their digital assets, head over to copper.co Copper - the unfair advantage. ======================= Compass Mining is the world's first online marketplace for bitcoin mining hardware and hosting. Compass was founded with the goal of making it easy for everyone to mine bitcoin. Visit http://compassmining.io to start mining bitcoin today! ======================= Bullish is a powerful new digital asset exchange built for institutions that delivers the innovations of DeFi in a regulated environment. The Bullish Hybrid Order Book pairs the high-performance of a traditional Central Limit Order Book with automated market making. Powered by deep Bullish Liquidity Pools, backed by the multi-billion dollar Bullish Treasury. So, you can trade with certainty and at scale across variable market conditions. Learn more at Bullish.com or follow @Bullish on Twitter. Because the future belongs to the bullish. *Not investment advice. Digital assets and cryptocurrencies are high risk products. Consult your professional advisor before dealing in them. Bullish’s services are available in select locations only and not to U. S persons. Visit https://bullish.com/legal for important information and risk warnings =======================

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. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Ross Gerber is the co-founder and CEO at Gerber Kawasaki, an investment and asset manager. In this conversation, Ross and I talk about Bitcoin, Twitter, Tesla, Elon Musk, and much more. I really enjoyed this conversation with Ross, and I hope that you enjoy it as well. Before we get into this episode, though, I first want to talk about our sponsors. Today's episode is brought to you by Copper. Since 2018, Copper has been at the forefront of institutional digital asset development. From award-winning custody solutions to creating the first truly off-exchange settlement function, Copper pioneers technology, products,

• 0:46Anthony Pompliano?

  and services in lockstep with a rapidly changing world. No other infrastructure provider covers as many assets across as many exchanges with the speed and security that Copper can offer. To learn how Copper helps the world's largest institutional investors secure their digital assets, head over to copper.co. Again, Copper, the unfair advantage. Check them out at copper.co today. This episode is sponsored by Compass Mining, the world's largest marketplace for mining hardware and hosting. With Compass, everyone can mine Bitcoin. Their team makes it easy to start mining wherever you want, at home or in one of their 23 hosting facilities around the world. Through the Compass Marketplace, retail miners can access mining hardware with

• 1:29Anthony Pompliano?

  similar prices and purchase plans as the world's largest mining companies. Simple and low-cost hosting agreements, coupled with best-in-class customer service, are the reasons why Compass is the simplest and most popular way to mine Bitcoin. Make sure to check out all of their new Compass Score online resources, developed to help you make an informed decision on your next mining purchase. With a growing number of listings on our marketplace, the Compass Score allows customers to easily compare and contrast, highlighting the standout listings in real time, and identifying the best listings available. Start mining your own Bitcoin today by visiting compassmining.io. Again, visit compassmining.io to start mining.

• 2:10Anthony Pompliano?

  Your own Bitcoin today. This episode is brought to you by Bullish. Bullish is a powerful new digital asset exchange built for institutions that delivers the innovations of DeFi in a regulated environment. The Bullish hybrid order book pairs the high performance of a traditional central limit order book with the automated market making powered by deep bullish liquidity pools backed by the multi-billion dollar bullish treasury. So you can trade with certainty and at scale across variable market conditions. You can learn more at bullish.com or follow bullish on Twitter because the future belongs to the bullish. Now, this is not investment advice. Digital assets and cryptocurrencies are high risk products. Consult your professional advisor before dealing in them. Bullish's services are available in select locations only and not to

• 2:53Anthony Pompliano?

  you as persons. Visit bullish.com/ legal for important information and risk warnings. Go check them out at bullish.com or follow at bullish on Twitter.

• 3:02Speaker 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.

• 3:25Anthony Pompliano?

  Ross, how are you doing?

• 3:27Speaker 02

  I'm good. How are you?

• 3:28Anthony Pompliano?

  I'm doing fine.

• 3:29Speaker 02

  Long time.

• 3:29Anthony Pompliano?

  I know. How have things been going? It seems like a lot of things that you were excited about maybe a year ago or so, they're all playing out pretty nicely there, my friend.

• 3:38Speaker 02

  Yeah, you know, so far, so good. You know, we're having a little interlude as the Fed, you know, gets its act together this year, but you know, we like the opportunity in the markets right now, and we're seeing some nice fear and I like it.

• 3:53Anthony Pompliano?

  Let's talk Fed first because I think that's kind of what's on everyone's mind. We're recording this the day of the FOMC meeting. We're expecting them to go ahead and announce a 50 basis point hike. It seems like, you know, on the last two years, don't fight the Fed, they're pushing everything up, just get long and chill. Now they're intentionally pushing things down. And so maybe you don't want to be as long as you previously were. Is that the trade of the decade? Is just whatever the Fed tells you to do, do it and then you win?

• 4:23Speaker 02

  It's pretty much the trade of the last three decades, really, if my whole career. You know, there's only one person that's ever killed the economy and that's the Federal Reserve Chairman. And, you know, even Greenspan did it and, and, you know, actually Powell did it in 18. You'd think he would have learned his lesson in 18. But right now we went from a stage, you know, if you look at it from the pandemic was probably the worst economic event in American history. We shut down the entire economy and, and we made up for it by printing tons of money and having, you know, just a free for all at the Fed. And now, you know, it's worked and things are really good in the economy. And the Fed has to just like get back to normal and people look at that as like the end of the world. When it's actually what's supposed to happen.

• 5:08Speaker 02

  So, so valuations come back to normal. I, I don't see this as any crazy thing. So you just gotta like, kind of wait until the Fed's done with their game and then we're game on again. You know?

• 5:21Anthony Pompliano?

  What, what do you think they're going to end up doing? So, uh, the market's pricing in 50 basis points today, uh, 2.75 to 3% by the end of the year. Do you think they can hike that much? Or do you see them stopping at some point? Maybe there's even, will there be a Fed interest rate cut before the end of the year? How do you think about this?

• 5:38Speaker 02

  Well, that would be the classic Fed, you know, you see that a lot with the Fed where they raise too fast. And then they're like, oh, and then they do this like one cut just to make the market happy and get the economy going again. That's actually not uncommon.

• 5:51Anthony Pompliano?

  Um, that's what I think, that's what I think they're going to do, by the way. That, that's my bet.

• 5:56Speaker 02

  It's not uncommon. Yeah. You know, like that wouldn't surprise me at all because what I actually think is, you know, you have this pandemic, you know, stimulus response thing where now everybody's partying like crazy and going out like crazy and, you know, trying to go to Europe this summer is impossible. And, you know, every event is sold out from Coachella, uh, to the Met Gala or whatever. And so when you, when you look at what people are doing, they're out and they're spending money. And, and that'll calm down, you know, in six months or a year as people like go back to normal and, and sort of get it out of their System, but I still think, you know, that it'll take a while and people have jobs and they're getting raises and they're spending money.

• 6:40Speaker 02

  So this is a really good backdrop for the Fed to raise interest rates into the, the bottom line is they're behind the curve. And that's why I'm not so concerned about them right now is, is I think one and a half to two is probably where they need to be right now. You know, and so they're not there. So they got to catch up to one and a half to two. But once I think they get to one and a half to two, they're going to have to really reassess where the economy really is. Because high oil prices and high inflation does affect spending eventually and, and people will spend less. And, and so I think, um, as we get towards the elections, we'll see the economy slow and inflation come down. And I think the Fed will have less pressure on them to be aggressive.

• 7:23Anthony Pompliano?

  Yeah. One of the things that I keep going to is if we already had the, you know, kind of annualized 1.4% contraction in Q1. If they continue to hike the interest rates, they push us more towards, uh, not just a slowdown in the economy, but a full on recession. And, you know, I joke all the time, like what's worse than high inflation for a politician going into an election is a recession. And so if we get to a true recession where people are feeling it and it's very obvious that it's here. Regardless of what's happening with inflation, I think that the Fed will just get pressured, right? It's just, hey.

• 7:53Speaker 02

  Yeah. I just don't think that's a reality this year, you know, like, I don't think the Fed can hike fast enough. Unless they're just crazy to cause a recession this year. What I'm worried about is like the, the beginning, middle of next year where it's like all this stuff finally compounds up. We get through Christmas and, and travel and, and maybe there's another surge of some sort. And then we look into, you know, the first half of next year looks real bad, but, but I actually don't think that's going to happen either. I, I, I think the Fed will do everything possible to avoid creating recession. They, they will lower rates, they will print money, they will do anything they need to do to prevent a recession. So I. I'm not that concerned about it because the demand is so high for labor right now.

• 8:38Anthony Pompliano?

  Yeah, when you start thinking about various assets in the market, obviously stocks, I think people understand, hey, when, when the Fed's got the money printer on, they go up, when they stop, they go down. And that seems to be what most people are experiencing at the moment. When you're talking to clients, like, how do you talk about these types of environments? Is it a thing of like, hey, just try to get into cash and just hold cash? Is it no actually buy the dips? Or like, what's kind of the general talk track?

• 9:04Speaker 02

  Well, we're typically managing stocks and bonds for clients. So, you know, when this all started with the inflation stuff and the Fed a few months back, I sold all of them, you know, sold all my bonds, pretty much. I'm much more concerned about bonds than stocks because stocks actually do okay in inflation because you get higher pricing, you know. It's, it's bonds that just have like negative value, you know. So all of a sudden, if you're buying a two or even a 3%, you know, treasury bond, you're losing a lot of money right now. So that makes no sense to me at all. Like, and then there's no upside, right? Like, what's your upside in a bond today? It's negative, right? So,

• 9:48Speaker 02

  so bonds are really where the highest risk is because you have no real upside and you have lots of potential downside. So we immediately moved to more cash. So we're holding like more cash than I really like by a large amount right now because we just don't really have much of a bond allocation. So we're looking at inflation protected treasuries and floating rates are really the only game in town. And then these like high yields, like, you know, AMC bonds are paying 14% still. So, you know, stuff like that. So you hold a lot of cash and, and then on the equity side, what we have is actually equities are in a way fine. It's just we're having PE contraction and PE contraction obviously hurts growth names

• 10:32Speaker 02

  like that I typically like more than it, you know, affects Campbell's Soup and, you know, Chevron. So because we don't own Campbell's Soup and Chevron, we're underperforming substantially right now. And we know this, you know, like, cause we're not going to start buying Campbell's Soup and Chevron, because these are just temporary shifts in the market as we have this rising interest rate environment and rising inflation environment. And so you just have to be patient, you know, like I've done this for so long. And, and you want to buy and trade and you want to make money on the upside and it's just not going to happen right now, you know?

• 11:09Anthony Pompliano?

  Yeah. And, and when you start to think about this, so let's go to

• 11:12Speaker 02

  That's what I tell clients. You just have to be patient, you know, like they want to make money every year. I make 15% a year for these people in a 6040 portfolio. And then we finally have a bad year and they're like, oh my God. And I'm like, dude, look at the last five years, you know, we've averaged 15% a year, including this year, right now. I'm like, we were way above trend line. Like, what did you think? It happened. So, you know, most of my clients have been around, you know, I've been doing this almost 30 years. So, so it happens every cycle. You get the rising interest rate period of time and you got to sit on your hands.

• 11:43Anthony Pompliano?

  Yeah. When, when you think about some of those growth stocks, I think Tesla is probably one of the, the biggest ones, one of the most popular ones. I know that you're a huge fan of Elon and of Tesla. Talk to me a little bit about what, uh, what you think about kind of that business and, and maybe headwinds or tailwinds that it has.

• 12:00Speaker 02

  Well, Tesla, I would say is the exception to all the things I was just saying, because they're executing so well. And the environment for Tesla couldn't be better with, you know, gas $6 a gallon here in LA. All you see are Teslas like everywhere now, you know, so like you're almost like an idiot. If you go out and like, I saw somebody just bought a new Explorer in my parking lot and I'm like, you must be like an idiot. You know, it's like, you're going to pay $6 a gallon for 15 miles a gallon in traffic or 10 miles a gallon in traffic in LA. I'm like, you're spending $150 a week just driving your kids around a baseball and stuff. And I'm like, I spend nothing, you know? I'm like, if you don't like inflation, you go buy an EV.

• 12:41Speaker 02

  It's simple as that. And so people are, and so the demand is far outstripping the supply. And the real game is supply. Can we make cars? And, and with China, that's just been a huge problem. So China is the biggest problem for the global economy right now. It makes interest rates seem like nothing. Honestly, like, I don't even spend any time worrying about the Fed. I'm worried about China because we make a lot of stuff in China. We make cars in China. We make phones in China. We make half the stuff I own make stuff in China, you know? And China's like whack a mole with Covid, which is definitely a losing game and you know, it's a mess. It's just a mess. So it's hard for Tesla to manufacture right now in China, which is their best market to sell and manufacture.

• 13:25Speaker 02

  And we have new plants that are coming up in Austin and in Berlin, but we're, you know, 12 months from efficient, you know, production. And so it's a really great time for Tesla right now, but, but this is a super challenging time as well.

• 13:39Anthony Pompliano?

  Yeah, it makes a, makes a lot of sense. Obviously Elon has, has done a fantastic job building that business. He now has, he's turning his, his attention to Twitter. He, a couple of things here. So like one, just like what's your general read on the whole Twitter situation? Are you, are you a fan of Elon doing this? Do you think it's a distraction? How do you read it to start?

• 13:58Speaker 02

  Well, I'm going to tell you some things, Pom. You know, a lot of, there's a lot of misinformation going around about this whole Twitter thing. And I just read in the paper that the head of the CIA flew out to Saudi Arabia last month. And I think it was to tell them that we were taking Twitter back from them. And that's what this is really about. Whether people want to, you know, worry about Donald Trump being on the platform. Oh no, God forbid, you know, the right wing might have free speech or, or this or that. What it's really about is foreign interference in our elections, in our democracy. It's gotten to a horrible situation in America and in Western governments. Now with the war in Ukraine, it's become so obvious, the misinformation

• 14:42Speaker 02

  that's put out on Twitter daily, the constant attacks, the bots. It's became a national security issue for the United States, became a major issue for Tesla, because Tesla uses Twitter as its main advertising vehicle. And Elon felt it was time to step in and take this asset back from the foreign actors that have been manipulating it.

• 15:04Anthony Pompliano?

  So a couple of questions. First is, you think Saudi Arabia owns Twitter? Or like, what?

• 15:08Speaker 02

  They do own Twitter. They own 6% of Twitter, but I think they control Twitter internally.

• 15:13Anthony Pompliano?

  And in what way? Like, do you think it's part of like the content moderation decisions? Do you think that they've got some sort of leverage over the executive team? Like, tell me more about that.

• 15:21Speaker 02

  I think they've implanted people in executives from all the way through the company that are acting to help with the misinformation campaigns that have been so effective on social media. Saudi Arabia and Russia being the two biggest beneficiaries of these misinformation campaigns.

• 15:40Speaker 02

  We have a very insidious thing going on in social media. And with Instagram and Facebook, we have no ability to get control of these assets because Zuckerberg controls it like the great overlord of misinformation. And we're seeing it in countries like India where Modi has used it to oppress people and really fervent nationalism against the Muslim population in India. And it creates violence and, you know, oppression, essentially. So Zuckerberg and Sandberg are perfectly fine with all of it, as long as they make money. And I think people like Elon had had enough of this stuff. So, so, you know, now he's stepping in and using his considerable financial might to do something that I think that's going to be a benefit to our society

• 16:25Speaker 02

  and very profitable for ultimately Twitter shareholders.

• 16:28Anthony Pompliano?

  So he, my understanding is he's basically putting up some of his Tesla shares as collateral. And then also getting a, you know, a bunch of financing and kind of putting together what is going to end up being a somewhat complex deal. As a Tesla shareholder, do you worry about the Tesla shares being collateralized to help finance the, the acquisition of Twitter?

• 16:48Speaker 02

  No.

• 16:49Anthony Pompliano?

  What, what do you, like, how do you?

• 16:51Speaker 02

  It's a 20, it's like a 25% margin position. So it's not like he's highly leveraged in it. And, and quite frankly, I think the Tesla shares are the most valuable shares in the stock market. So, you know, I don't really spend much time worrying about that either because. You know, like when Elon sold shares last week, it was like to a benefit of the public because he's not like not operating Tesla. He went from owning 17% of Tesla to 16% of Tesla. And it pushes the price down and allows other investors to buy Tesla stock at a cheaper price. When we all know the information that's out there that Tesla is executing brilliantly right now in a product that's in such high demand that they really just can't supply

• 17:32Speaker 02

  it. And what I I'm seeing from yesterday is it looks, and this is what's going to happen next. So, so maybe this is the first place I'm really saying this is that Tesla is prepared to build a second Gigafactory in Texas and a second Gigafactory in Shanghai. And I expect formal announcements for that fairly soon.

• 17:52Anthony Pompliano?

  So you think that they're going to build a second Gigafactory in Texas and a second one in Shanghai, along with the plans that they've already publicly announced?

• 18:01Speaker 02

  Yeah.

• 18:01Anthony Pompliano?

  Why do you, why do you think that that is, is the plan?

• 18:05Speaker 02

  Because I thought about it last night long enough.

• 18:10Anthony Pompliano?

  You know, you just did some thinking and you just said, hey, if I was Tesla is what I would do?

• 18:15Speaker 02

  Like, I can't tell you everything, you know, like I, my sources of information are deep, really deep. I dig, I dig a deeper hole than anybody in my business about the companies I own. And the amount of people and information I get about Tesla, there's nobody knows more about Tesla in the world than me. Maybe a couple other investors, but very few. And, and that's what's going to happen next.

• 18:45Anthony Pompliano?

  Okay.

• 18:46Speaker 02

  So I surmise all the information, data points that I get, and then I perceive what the next strategic decision my man, Mr. Musk is going to make. And I look at the reality of the situations and

• 19:00Speaker 02

  That's what's gonna happen next.

• 19:01Anthony Pompliano?

  Are you and Elon boys? Like you guys text or like hang out or anything?

• 19:05Speaker 02

  No.

• 19:05Anthony Pompliano?

  No? I thought that I saw you guys tweeting at each other on Twitter or something.

• 19:09Speaker 02

  We tweet at each other all the time.

• 19:10Anthony Pompliano?

  Alright.

• 19:11Speaker 02

  You know, because.

• 19:12Anthony Pompliano?

  That's, that's boys in the digital world. No, no, you're boys.

• 19:14Speaker 02

  What? Like, I went out to the cyber rodeo, you know, like, I was like, hanging out with his mom and, and Kimball and, and, and, uh, and his sister who's super cool, Tesla and, and, you know, we're in the VIP area with all the VIPs, you know, and Elon's like, you know, twice the rock star I'll ever be, you know what I mean? He's like, he's like, people are like mobbing him. So I'm like, I can't even talk to the guy, you know, it's like, I can't even, you know, I'm not gonna push through a hundred people to talk to him.

• 19:44Speaker 02

  You know, I, I, uh, one day I'd, I hope to, to get a beer with Elon, you know?

• 19:50Anthony Pompliano?

  Yeah, I, I think that you could probably figure out a way to get that done. Talk to me.

• 19:54Speaker 02

  Yeah, but it's like, you know, part of it is like, because I'm an investor and I'm, I'm in the media pretty much every day about Tesla. You know, I, I don't, I'm not access to information. Like I don't have a separate relationship with Elon that could create insider trading issues or conflicts of interest. So in a way, it's like, good that we don't have that relationship because I would probably be accused of lots of stuff if we did, even though it wouldn't be true. So, you know, I get all my information, you know, the way I get my information is not directly from board members or senior executives. So,

• 20:31Speaker 02

  so, you know, and, and that's, you gotta play the game the right way, you know, I play the game the fair way and I play it the right way, although I play it as right as possible, you know?

• 20:40Anthony Pompliano?

  Yeah.

• 20:40Speaker 02

  So that's where you get into potential issues and, and I do talk to a lot of CEOs. I do, um, and, and I really am trying to ascertain what type of people they are. Because it gets real, you know, you don't want to end up like, uh, Diane von Furstenberg and, uh, who is it? It's Barry Diller right now, insider trading. You know, they clearly were insider trading with Bobby Kotick, having lunch with him and then buying a hundred million in options on Activision right before it gets bought out. I mean, come on.

• 21:08Anthony Pompliano?

  So when, when you think about, uh, other stocks, Tesla, I think is the biggest position that you guys have as an individual stock. What, what's the second biggest?

• 21:16Speaker 02

  Right now it's MGM Hotels.

• 21:18Anthony Pompliano?

  All right. What, what's the theory or thesis behind MGM Hotels?

• 21:22Speaker 02

  So this is getting really good. Okay.

• 21:25Anthony Pompliano?

  All right.

• 21:25Speaker 02

  So.

• 21:26Anthony Pompliano?

  I like good.

• 21:28Speaker 02

  Like really good, like I really like this, like there's, you know, like there's technology investments in Bitcoin, which obviously the upside is just like crazy, right? And then there's like real investments, like real estate or hotels or whatever, you know? So technology always has the most upside potential in my mind. That's why it's the largest percentage of assets that we manage is in technology investments and including Bitcoin and things like that. So when you think about the economy moving forward, fun is the most important thing right now. And so Vegas is in a rebound like I've never seen. So there's been a lot of adjustments to what's happening in Vegas over the last two years because of COVID and, and many of the companies, including MGM,

• 22:13Speaker 02

  not only had begun building an online gambling business, but also were in the process of sort of reassessing their, their overall operations and the use of technology within the hotel and gaming space. And because of COVID, they were forced to implement large amounts of innovation that normally hotel and casino companies don't do very rapidly, you know? And so with this innovation, they've been able to increase margins into hotel substantially, like really substantially because there were so many inefficiencies in the way hotels and casinos are run currently. So technology had an enormous upside in this leisure and hospitality area and MGM rapidly

• 22:56Speaker 02

  employed it successfully. The CEO is really, really good. This guy Hornbuckle, and he's been working at the company a long time, knows the business, knows Vegas. So what happened was MGM decided not to own their buildings anymore and just be an operating company and sell off all the buildings for cash. And they've gotten all this cash over the years and they've been buying back stock and then like, like upgrading casinos and then making trades. So they just sold the Mirage Casino and bought the Cosmopolitan. So the Cosmopolitan is the best hotel casino in Vegas for fun, for young people. It's, it's just an amazing asset. So they got that and they also took full control of City Center, which is Aria and Vedara.

• 23:39Speaker 02

  And so they've gotten full control of all these assets and and then they sold off all the land and you know, sort of the buildings under it. And they just finished that with a deal with V I C I properties where now MGM just got 4.4 billion in new cash, which they paid off debt doing these transactions and now bought this European online gambling company called, I think it's called Bet Leo or something like that, or Leo something. I don't know, just bought it. Now they're expanding online gambling. Now, if you look at what's happening in California, for example, they're trying to pass online gambling here in California, the Native American casinos have had this monopoly on it and Bet MGM

• 24:19Speaker 02

  and DraftKings and FanDuel are trying to break this monopoly and and get open in more states. But right now, I think they have 21 states or so with online gambling. So they've got all this convergence of the online with people going out and the and the two areas for MGM that are really tough are their investments in Macau, which are basically shut down. So that's sort of like, sort of this upside once China comes back, maybe in a year. And then you've got, so, so the Macau thing is, is kind of the, the dog of the company. But you've got this like, rapidly growing convention business. And I think because of work from home, companies are going to be spending more and more money

• 25:03Speaker 02

  on getting together employees and things like conventions in Vegas. And then you've got really just an unbelievable amount of spending as people are going out again. And we're seeing the average person spend a huge amount of money. So then sports came to Vegas, you know. So now we've got the Raiders and the Golden Knights. But what's happening next is hopefully the Oakland A's are going to be moving to Vegas, we hope. And we expect a NBA expansion franchise as well in Vegas. And we've got the Super Bowl in 24 and Formula One at the end of 23. So Vegas has become this like sports city, and it's hugely lucrative

• 25:47Speaker 02

  and complimentary to the other entertainment that already exists in Vegas. So I've never been more bullish on the future of Vegas than I am right now.

• 25:54Anthony Pompliano?

  So when you start to think about this and you see a business like it, do you worry about the price at which you're buying? Or do you worry about like short-term price movements? Or do you just look at the fundamentals and say, hey, here is kind of our thesis on this, and we're going to hold this for a long time. So the price at which we buy it, or the short-term price fluctuations may not matter?

• 26:15Speaker 02

  No, price matters for sure. You know, during the pandemic, we got into MGM at nine bucks or something. So that was ideal. And the only reason I bought it was because I knew their cash financial position because they had just sold these casinos, you know? And it was, and it's been probably, I think it was one of the best stocks I bought in the pandemic as far as returns are concerned, several hundred percent. But at 40 bucks, I don't think, you know, because it's hard to value because it really hasn't had earnings, you know, since the pandemic, and they're about break even now. But what it is, is what the assets are worth. And so when you like, add up the equity value of the business, it's trading at sort of this traditional multiple,

• 26:58Speaker 02

  like two times the equity, which is, you know, pretty normal for casinos. But the growth right now, and the way they changed the business, I think it's undervalued by at least 20%, maybe 25% at the current price. So we, we value it closer to 50, it's trading at 40. So I like that. And they're solid assets. You know, Vegas isn't going anywhere. So the real boogeyman that I think is also super bullish for MGM is this Osaka project in Japan. You know, Japan's going to have, you know, gambling by the end of the century, and MGM is really in the lead for building this thing. And I, they released like the plans for this thing, and it's amazing. It's

• 27:40Speaker 02

  just amazing. It's an amazing development. I expect Japan to approve it. I think it'll be great for the Japanese economy. It's a great investment for MGM. And so when you look out over the next, so we're long-term investors. So it's 22, and I'm thinking about what 2030 is going to look like. MGM is going to be a substantially bigger company.

• 28:00Anthony Pompliano?

  Yeah, fascinating thesis. Talk to me about Bitcoin. I know that you've become pretty bullish on Bitcoin, it seems, at least from what I've seen you say publicly.

• 28:09Speaker 02

  I got a Bitcoin business.

• 28:10Anthony Pompliano?

  All right. Explain, one, what your thoughts around Bitcoin are, and then tell us about the Bitcoin business.

• 28:15Speaker 02

  Well, you know, Boy, you know, like, look at what's happening to our global system, right? I mean, we've weaponized the financial system. You know, so it's funny, Pomp, because I, I did this show with Peter Schiff the other day. And boy, was that frustrating, you know? He, he, he's super annoying, like, he's really, really hard to like, even have an argument with because he doesn't listen, like, he just doesn't care what you say at all. And, and it's super frustrating and, you know, I was trying to explain, you know, once again, the premise behind Bitcoin in that there should be a global currency that isn't controlled by a government.

• 28:58Speaker 02

  And there's so many instances, even in the last year, that I can say where this utility has been proven over and over and over again. Right now, if you're a Russian, you know, I have a friend who, who lives in Thailand and he, he's like, yeah, all the Russians travel there and they've been stranded, you know, like they're all stranded. And then their credit cards stopped working. So now they've all become like Bitcoin experts, you know? And then, and everybody, you know, in Thailand, you know, has to kind of get good at Bitcoin because all the tourists are now transacting in Bitcoin because their currencies are all like banned or whatever. And so when you start thinking about the way governments have weaponized finance and now what we're seeing with China and, you know, their goal to, you know, we're moving, we're deglobalizing right now.

• 29:43Speaker 02

  And that makes Bitcoin even more valuable as a global currency, you know, or a system of finance that doesn't involve governmental interaction. And, and so I think the utility of Bitcoin continues to grow. And what's happening now, what we're working on is we partnered with Gemini and we are building managed Bitcoin accounts for clients so that they can build portfolios with digital assets, just like they're building them in traditional assets. And our work with Gemini has led me to believe, kind of like when I'm talking about Tesla, I don't know if this is a fact, but it's led me to believe that soon companies like Gemini will be able to offer all types of securities, including stocks and bonds, in a digital wallet

• 30:27Speaker 02

  by tokenizing all assets. And maybe we'll be able to manage, like, People's collectibles, their real estate, like all their assets in theory in a digital wallet with Gemini. So we're working with them to build that right now. And we've been slowly, because it's been, you know, a very manual process of building what I will consider the most advanced, most amazing managed Bitcoin system for people who are not sophisticated enough to do it on their own.

• 31:01Anthony Pompliano?

  And when you think about this, most clients, this is like 1%, 2%, this is like 10%, but what is most of the clients that you're talking to about Bitcoin? How are they thinking about this?

• 31:12Speaker 02

  No, 100% of clients today are interested in Bitcoin. They want to know more about it. There's a huge knowledge gap. That's an area that we're working on. You know, like tech people have a really hard time understanding humans that aren't tech people, you know? And that was kind of like Steve Jobs's brilliance. And that's what kind of Bitcoin needs is that person, maybe it's me who can sort of explain it to the regular person in a way that they understand it and doesn't scare them away. And I think that's being done more by all these YouTubers and bloggers who are really bringing the message out in different ways to different people, especially underserved groups like the African American community, which has really bought into Bitcoin, you know, like, and I think it's a wonderful

• 31:56Speaker 02

  thing, you know, because it's a community that's been inherently discriminated against by the banking system. So we have this enormous opportunity, but we have to educate people on how it works. And that's why the NFT thing pisses me off, you know, is like every time people get ripped off and every time people lose money, it just hurts the credibility of the system that we're building.

• 32:16Anthony Pompliano?

  Yeah, I tend to think that that is exactly what's happening. When you start to think about Bitcoin for clients, you said they're all interested in it, but there's a knowledge gap. How many of them are looking at it because it's an inflation hedge or they're looking at it because they think they can get rich quickly? Like, what's the driver that is really pushing that interest?

• 32:37Speaker 02

  Well, always money. You know, greed is always the first driver of everything, you know? Not that that's bad. You know, it's kind of like porn is always the first driver of internet, you know, innovation, but like.

• 32:50Speaker 02

  I think we all understand the limitations of like Wells Fargo and JP Morgan controlling our financial system. They have abused our system for, I don't know, as long as they've existed and people don't earn any money in the bank. So the Fed's going to raise, you know, interest rates 50 basis points. They're not going to pay you 50 basis points in your bank, right? So like Wells Fargo isn't going to like raise their interest rate by 50 basis points today. So how is that fair? Like, what kind of system is that? So people don't want to hold their money in the bank. And we've been preaching this since I started in the business. Don't hold any money in the bank. Why would you want to hold money in a bank? They pay you nothing and they invest it and you have all the risk of the bank. Why would you have money in the bank? So people are saying like, why would I keep money in the

• 33:35Speaker 02

  bank? I can keep my money in crypto and that and it becomes a store of value. And people are like, I'll just keep my money in crypto. And that's what I've done with my own money. It's like, why would I keep my money in the bank? They don't pay me interest on it. I can put it in Ethereum. I can put it in Bitcoin and, and, you know, over time, it'll probably go up in value.

• 33:50Anthony Pompliano?

  I mean, that makes, uh, makes a ton of sense. Uh, and I think that there's a lot of people who, uh, as they learn more about it, they start to say to themselves, wow, I didn't understand this. I closed that education gap. Uh, maybe I'm educated enough and feel confident enough to store it myself. Maybe I need help with it. Uh, but it does feel like, uh, there's a ton of people. And one of the metrics that I always look at is, uh, the number, the amount of Bitcoin that hasn't moved in the last year, the higher that percentage goes up, the more that just signals to me, people are understanding this idea of Bitcoin as savings technology.

• 34:20Speaker 02

  Yeah, buy and hold. Yeah, we buy and hold it. We, we don't trade it for clients.

• 34:24Anthony Pompliano?

  Yep.

• 34:24Speaker 02

  Like, we're not like trying to outsmart the Bitcoin market. You know what I mean? Like, it's at, let's say, 38,000 today, so we buy more today. You know, like, we just buy Bitcoin, just like we buy Tesla or we buy any stock. See, Bitcoin's easy in that there's a limited supply. So it's a store of value just based off supply and demand, just like gold. And, you know, since gold really hasn't performed as it traditionally has, one of the reasons I suspect is a lot of that money has gone to Bitcoin that would traditionally have gone to gold. I don't know if that's true or not, but I suspect that may be true because gold should be so. boring in this environment, right? And it really has been a piece of crap investment. So, so what, what, what's going on with gold? Do you think gold would be doing really well right now?

• 35:09Speaker 02

  Actually, right? All the same elements that make Bitcoin interesting, make gold interesting, yet gold hasn't performed. So I think investors are starting to look for the digital version of these things and that's Bitcoin. But there's a utility with Bitcoin, you know, like I used the Lightning Network for the first time the other day and boy, that worked pretty well. And all of a sudden, like on the Cash App, I did a couple transactions in Bitcoin and it was like, wow, this works pretty well. And actually Bitcoin has been the most solid currency in the world besides the dollar, you know, over the last six months, probably, right? Look at the ruble or the Turkish lira or, or a lot of currencies, they've been like going crazy. And people are like, oh, Bitcoin's so volatile. And I'm like, really?

• 35:53Anthony Pompliano?

  I mean, that is the way to look at it, right? Is that it's all relative. Volatility is relative and also volatility-

• 36:00Speaker 02

  Oh, sorry. Cause I was just saying, like, China is not going to want the dollar to be the reserve currency anymore, for sure. And, and individuals are, are kind of saying, I don't want the one, or I don't want the dollar, I don't want the ruble, I don't want the euro, and all for good reason, right? And, and what's left is, is Bitcoin.

• 36:21Anthony Pompliano?

  Yeah, it makes, uh, makes complete sense. Ross, I could talk to you forever, my friend. Where, uh, where, where can we send people to find you on the internet or, uh, or find more about what you guys are doing over at Gerber Kawasaki?

• 36:31Speaker 02

  Well, you can always go to our website, gerberkawasaki.com. Of course, we help people manage their money, the stocks, bonds, crypto and such. Um, we're probably the only firm that actually is integrated to all assets, digital and physical, I guess, other than physical real estate. And then at Gerber Kawasaki on Twitter, you can always follow me on Twitter. That's, I do put out a lot, a lot of stuff on Twitter, um, or on our YouTube page, at YouTube, at Gerber Kawasaki. But, uh, please follow along. Um, you know, I'm a big believer in young people investing in the future and the amazing technologies. Like, I'm really, really bullish on the future. I, I feel lonely- Now, because everybody's so bearish, but I'm like, look at what's being invented in America. Like, we're bringing business back to America.

• 37:16Speaker 02

  With all this great innovations happening in America, happening in Europe. And there's so much utility to things that we're building, whether it be this global financial system, or like Starlink and the utility of a global internet system. Think about how great Starlink is for Bitcoin, because I can't transact Bitcoin in the middle of nowhere if there's no internet connection. So all of a sudden, now I got Starlink terminals. Now I got Bitcoin globally, even in Antarctica. So, you know, now I got this global financial system that's irrelevant of a government. Now I got this global internet system, right? That's irrelevant of a government. Like, wow, there's some really cool things happening.

• 37:51Anthony Pompliano?

  I love it.

• 37:52Speaker 02

  So I always love following you, Pomp, and I love what you're doing and the content you're putting out. And, and so keep it up, man.

• 37:59Anthony Pompliano?

  I appreciate it very much. Before I let you go, one of our sponsors is Eight Sleep. What's your sleep schedule? You told me that you used to not get that much sleep. You getting better sleep now?

• 38:08Speaker 02

  I always sleep pretty good. I'm a seven-hour guy and, you know, cannabis.

• 38:12Anthony Pompliano?

  Cannabis, cannabis in seven hours and you're good to go? You got all the energy?

• 38:17Speaker 02

  Yeah, cannabis before the seven.

• 38:21Anthony Pompliano?

  I love it. All right, I appreciate you coming on. We, we definitely got to get you back soon. And let's see what Tesla and Bitcoin end up doing. But you're carrying the torch, my friend. We'll talk to you later.

• 38:32Speaker 02

  Thank you.

• 38:33Anthony Pompliano?

  All right, bye. Thanks so much for listening to today's episode. I really hope you guys enjoyed this one. Make sure you subscribe on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to pompscryptocourse.com. We've developed a curriculum with the top teams across the industry. It's a three-week intensive training program with over 50 events packed into that three-week time period. Go to pompscryptocourse.com to learn more and I'll meet you guys for the next episode.