#996 Jamie Catherwood On Using History To Understand The Market Today

Jamie Catherwood is a Financial Historian and Creator of the course "History Amnesia" In this conversation, we discuss studying history to help navigate todays markets, and why Bitcoin and Cryptocurrencies is just history repeating itself. ======================= Bullish is a powerful new exchange for digital assets that offers deep liquidity, automated market making, and industry-leading security. Combining the innovations of DeFi with the regulated environment of traditional finance, Bullish empowers users to trade with certainty and earn passively at scale across variable market conditions, in an environment backed by multibillion-dollar liquidity contributions from the Bullish Treasury. Visit bullish.com/pomp today to learn more. Note: Bullish is licensed by the Gibraltar Financial Services Commission. Virtual assets and related products are high risk. Consult your investment advisor and trade responsibly. Bullish is available in select locations only and not to U. S persons. Visit bullish.com/legal for important information and risk warnings. ======================= 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! =======================

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. Jamie Cathcart Wood is a financial historian. He also works at O'Shaughnessy Asset Management. In this conversation, we talk about how all of the new things in crypto, they really happened before, and you can use history as a guide for understanding the future. I really enjoyed this conversation with Jamie, and I hope you guys enjoy it as well. Before we get into this episode, though, I first want to talk about our sponsors. This episode is brought to you by Bullish. Bullish has reinvented the digital asset exchange. They give you access to DeFi features like automated market making and liquidity pools, all in a regulated environment. It's a whole new way to generate alpha. Seems like something that game changing should be making some noise, right? Well, bang,

• 0:47Anthony Pompliano?

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• 1:27Anthony Pompliano?

  a regulated market environment. Good reasons to be bullish. Learn more at bullish.com/pomp and follow @bullish on Twitter today. Bullish is licensed by the Gibraltar Financial Services Commission. Virtual assets and related products are high risk. Consult your investment advisor and trade responsibly. Bullish is available in select locations only and not to US persons. Visit bullish.com/legal for more important information and risk warnings. 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, and services in lockstep with a rapidly changing world. No other infrastructure provider covers this.

• 2:10Anthony Pompliano?

  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. Next up is compass mining. Compass mining is 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 similar prices and purchase plans as the world's largest mining companies. Compass miners own their

• 2:53Anthony Pompliano?

  machines. They choose whatever mining pool they want, and they mine directly to their own wallets. Miners who don't want to host their machines can order asics directly to their doorstep. 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. Start mining your own bitcoin today by visiting compassmining.io. Again, compassmining.io. Go check them out and let me know what you think.

• 3:23Speaker 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.

• 3:46Anthony Pompliano?

  Next up, we have Jamie Cathcartwood. Jamie's going to be joining us and he's going to be talking about financial history and how a lot of things going on right now, maybe in the bitcoin and crypto world, may not be as new or as unique as you think. So Jamie, how are you?

• 4:01Speaker 02

  I'm doing well. Thanks for having me on, man.

• 4:02Anthony Pompliano?

  Dude, I'm super excited about this. I've been looking forward to this all morning. You are doing, I'm going to call it a finance historian, I think is probably the best terminology. And you've been now for, I don't know, months, years, going back and looking at all of these different times in the financial Financial markets. And what I love about your work is that you tie it to current events. And basically just remind everyone like, hey, everyone calm down for a second, take a deep breath. Like this has happened before. The most recent piece that you put out was around insider trading. So maybe kind of walk us through the scenario that happened recently and then why this isn't necessarily new compared to, you know, history of finance.

• 4:45Speaker 03

  Yeah. So first, I appreciate financial historian instead of just history nerd. Sounds more dignified. But you would probably know more about it than me. But as you said, this past weekend, I have the weekly newsletter and I wrote about the NFT or the OpenSea case that the Southern District of New York brought against the former OpenSea employee who was in charge of selecting which NFTs would be listed on the front page. And the DOJ has said that this person, Nathaniel Chastain, allegedly front ran basically these NFTs and bought them up before he selected these NFTs to go on the page, at which point their prices were kind of skyrocket.

• 5:29Speaker 03

  And then he could sell out. And he was just basically using his inside information because he knew which NFTs were going to go on the homepage because he was the one selecting them to just kind of get ahead of other traders. And so I feel like this is a landmark kind of moment in the space because even from the DOJ side and all the headlines on the DOJ's site and the kind of press release that they put out, it's all centered around this being the first insider trading case that they've brought forward in the digital asset space. And so I feel like in a couple of years, this will be kind of a landmark moment that we'll look back on. And having that tie in also within a week of that bill being brought forward in Congress

• 6:12Speaker 03

  around regulation with Bitcoin, I just feel like now we're entering a moment where until this point, markets, crypto markets have kind of been like the Wild West because there wasn't really clarity on how they'll be regulated or how strictly or really just anything. Because it's so new. And now we're starting to get a little bit more insight into what it could look like going forward. But I wrote this piece because I feel like today. There are so many people that just view crypto and kind of digital assets as perhaps just like a Wild West to the worst kind of degree where it's just kind of rife with scams, frauds, like rug pulls, and that's basically all it is because they hear these stories of

• 6:57Speaker 03

  kind of just crazy transactions and bad actors just taking advantage of this kind of lack of regulation. But this kind of period that the crypto markets are going through and digital asset space in general at a much more accelerated pace is really just what the equity markets kind of went through during the 19th century and early 20th centuries. So I wrote about the fact that everything from rug pulls to kind of insider trading, market manipulation, I mean, that's gone on literally in the US at least since the markets were kind of first founded. So in 1792, obviously, we all know constitutions ratified in 1787, and just a couple of years

• 7:41Speaker 03

  later, when the, when Hamilton kind of first becomes the first Treasury Secretary and he's trying to figure out how to basically fund the government because the nation was just riddled with debt from the financing the revolution, he in his basically very first year has to deal with America's first insider trading scandal where a, literally his assistant Treasury Secretary, William Dewar, was this guy working at the Treasury. He was a former Continental Congress member and one of Hamilton's close friends. And while he's working at the Treasury, he's using this inside information to trade government securities, so government bonds at the time.

• 8:23Speaker 03

  And when he left the Treasury, he kept this kind of ring going and started pooling up resources with some other traders, and he kept using his inside information from the days at the Treasury to try and manipulate the market. And he tried to corner the market in this specific type of government bond. And eventually, it all blew up and he went broke. But it was this huge scandal where it's his first insider trading kind of scandal in in the States. And it was basically at the inception of markets themselves. And so the Buttonwood Agreement, which is essentially the founding document of the

• 9:04Speaker 03

  New York Stock Exchange, was written under the Sycamore Tree on Wall Street, just like, I think, three months after this William Dewar insider trading scandal. Because these 24 brokers basically wanted to meet with each other and come up with what was essentially a trading club where they set rules and guidelines of how they're going to trade with each other to try and avoid having another insider trading scandal occur. What's interesting, though, is that that was in 1792. And the next century was just filled with fraud. And all the types of schemes you see today occurring in crypto markets, not obviously only crypto, but the ones that you see in the news and people use to kind of put down

• 9:49Speaker 03

  the crypto space. There was a 117-year period between that 1792 scandal and the first actual legal framework to avoid insider trading. That didn't occur until 1909. And so, again, you just have this century of frauds and scams that we can go into. But I just wrote this article as kind of a reminder to people that are looking down on the crypto space that, you know, all these things that you are using as examples of why crypto is just like one giant Ponzi scheme or whatever people want to characterize it as. These are a lot of the exact same kind of schemes that occurred in equity markets during

• 10:32Speaker 03

  their development over the course of the 19th century. So you just kind of got to give some time for regulation to occur and kind of principles to be put in place so that the market can kind of develop more organically and mature. And

• 10:50Speaker 03

  That's basically, that was the thesis of this, this article I wrote.

• 10:53Anthony Pompliano?

  How much of this is, uh, human nature doesn't change? And it's just like, of course, somebody's going to try to find an advantage and step over the line and, and it ends up being almost like the manifestation of unethical behavior. Versus, no, there is some difference in human behavior now and, and we should look at it differently.

• 11:11Speaker 03

  Yeah, no, um, I would say that the one constant in all of history is human nature. My boss, who you obviously know well, Jim O'Shaughnessy, likes to say that markets change minute by minute, but human nature remains the same for centuries, basically since markets incepted. And there, he says, human nature is the last sustainable arbitrage because, I mean, so much data today, high frequency trading, et cetera. There's like those types of edges that you can go for, but a lot of those get arbbed away because it's just such a competitive market. And the sophisticated investors that exist, like with the technology they have, it's hard to kind of bet against them.

• 11:52Speaker 03

  But human nature doesn't change. That's the one thing you can count on not being arbbed away. Because we quite literally make the exact same mistakes that investors on the Dutch stock market, which opened in 1602, make. Like the exact same ones. We're all still kind of succumbing to the same biases and, uh, and errors as they were.

• 12:13Anthony Pompliano?

  Yeah. When you think about, uh, using history as the guide, how much of that is the actual, uh, support for the argument that like, hey, there needs to be more regulation here? And that's how we get to, uh, kind of a cleaner, uh, system?

• 12:28Speaker 03

  I think that that is definitely the case. Um, I think that just overall, if you are, I mean, crypto is kind of like a wary space to get into. And using equity markets as an example, I mean, people that don't work in finance, it's kind of a daunting field to try and dip your toes in, you know? I mean, I'm sure we can all remember the first time we started taking an interest in the markets. Like there's so much to learn, like ETFs, stocks, like it's just all seems overwhelming when you're starting with zero knowledge. And I think crypto is the same way. And For a couple of years now, obviously, there's been a huge crypto community built where people are really into it. But there's still such a large percentage of the population that is kind of just wary of the space because they don't fully understand it.

• 13:11Speaker 03

  And so I think if you have an additional layer to that, this other problem of there's no regulation. And so you're scared that, you know, you might be left holding the bag or you might get duped by a bad actor in the crypto space. Because there's just no real regulation, then you're going to be even more hesitant to participate in that space. But as regulation comes and there are kind of rules put in place to eliminate the worst of the bad actors, being able to take advantage of others, then I think people will feel safer about entering the market, which will benefit the crypto space in general.

• 13:48Anthony Pompliano?

  Got it. When you think about like the actual fraud that goes on, one of the big things that people I think have been talking about is like, what does this mean that NFTs are securities? And I've seen over the last couple of weeks, you've talked about this idea of like, there's securities fraud. And then there's like wire fraud and its relationship with insider trading. How do you think about like, okay, there's obviously an issue here. The DOJ has addressed it. Was there always the definition of like a security in over history? Or like, when does that terminology become a thing? And actually, it was just like, if you insider traded in anything, it was a problem.

• 14:31Speaker 03

  So I think a lot of that came in the 33 and 34 acts, like the SEC Act. And then blanking on the name of the 33, I think it might've been Securities Act. But I think that's where you started to get a real focus on definitions of what's a security and what's not a security. And I think you've been talking about this more than I have. I haven't had a chance to go through it really yet, but I know that. If I'm not mistaken, with this new bill that's been put forward by the two members of Congress, that they would have Bitcoin and crypto classified as a commodity regulated by the CFTC, is that right?

• 15:09Anthony Pompliano?

  That's what they want to do, yes.

• 15:11Speaker 03

  Yeah, so I think that would be interesting, that would have a lot of implications. I'm not sure on the exact details of what that means for insider trading, if it's a commodity regulated by the CFTC, but I do think that that's kind of the first step to institutionalizing the space, because you had a lot of the same stuff actually occur with, if it is going to be regulated as a commodity, with the 1848 founding of the Chicago Board of Trade, there was a lot of kind of consternation around whether that was just speculating with these futures and options contracts being traded there versus

• 15:51Speaker 03

  whether it was actually kind of productive speculation, because it was, it served an economic purpose, because farmers and harvesters could use that to kind of just level out the price volatility of their business and the price of crops, but originally, the government was looking at it as, oh, this is just another place where people are going to speculate and gamble basically on the direction of price movements, and so, the founding of the Chicago Board of Trade, and then it coming under eventually the CFTC regulation, was kind of helpful in institutionalizing the space and differentiating pure gambling speculation from serving an economic purpose.

• 16:34Anthony Pompliano?

  Yeah, when you think about bubbles, which is obviously the thing that, you know, most people, it's like, oh, it's a Ponzi, oh, the government's going to ban it, or oh, it's a bubble, I saw on a recent podcast that you talked about this idea of like a bubble triangle, and the kind of this framework, talk to us about that in terms of how people can actually evaluate, is something a bubble or not?

• 16:53Speaker 03

  Yeah, so I would love to take credit for that, but it's actually from these two authors from Queens University Belfast, they put this framework together in their book, Boom and Bust, which is a great financial history book, if people are looking to learn more about this, and so essentially, the framework uses the fire triangle, which is the three sides that you need to basically sustain a fire, which I believe are heat, oxygen, and fuel.

• 17:23Speaker 03

  And then you obviously need the spark to start it. But basically, if you remove any one of those three sides, then a fire will go out. And so using that framework for financial markets and the formation of bubbles, the three sides are marketability, speculation, and money and credit. And so for marketability, it's not necessarily like marketing, but rather the ability to easily buy and sell an asset. So comparing something liquid like private equity versus fractional shares in a Fortune 500 company. And so having something that's very easy to buy and sell and very liquid makes it much easier to sustain a bubble. And then speculation doesn't really need explaining.

• 18:08Speaker 03

  That's obvious. You just need people excited and willing to put their money in something. And they're investing specifically, essentially for the purpose of capital gain, rather than trying to collect dividends or something. And then money and credit, again, you just need the cheap money, low interest rates to help sustain the kind of bubble. And then usually in this case, instead of a spark being a literal spark to ignite the fire, with bubbles, the spark tends to be either a move in the kind of political sphere, maybe a new government policy or a government initiative, or a technological innovation. I'd say most of the time it's probably in the technological innovation space.

• 18:52Speaker 03

  But with politics, like you can argue things like the government's initiative around housing and the formation of 2008 crisis could be one of the kind of sparks that helped cause the 2008 crisis. But I think it's a really interesting framework. And if you think about each side, like the fire triangle, if you remove any one of them, it becomes harder to sustain a bubble. Like with money and credit, if the central banks dramatically raise rates, then you tend to have the bubble pop.

• 19:23Anthony Pompliano?

  Yeah. When you think about this market, like where should people in Bitcoin or crypto go learn about financial history? Like when you think you're like, okay, I'm a young person today. I don't have a ton of experience. It sounds like history should be a great way to learn more. Mark Andreessen, as an example, always talks about reading biographies because it's a way to kind of condense a ton of lessons learned from someone's life and it takes you a couple of hours to read it and you basically get to see some of those lessons learned. Where would you start that journey if you're that young person?

• 19:56Speaker 03

  So I wouldn't be doing myself justice if I didn't suggest my own site Investor Amnesia, which, as the name implies, is a testament to the fact that we never learn from history. And so I, on my website, have a weekly newsletter. I've written a bunch of articles. And I also have two online financial history courses, which it's funny you mentioned Mark Andreessen because for my second course, I actually interviewed him and we talked about history and kind of innovation. And it was really, really educational. But if we're talking about bubbles, then my first course, which is called Bubbles, Manias and Fraud, which is probably a good course

• 20:38Speaker 03

  to be reading or watching right now, is taught by seven outside experts who all come in and lecture for around an hour on a specific topic. And it's all online and it's lifetime access to the content. And if anyone's a CFA, it qualifies for professional learning credits, but that's on my site at investoramnesia.com. And if you go and you enter subscriber 20, then you'll get 20% off each course. But those are really helpful courses if you're just looking to kind of get up to speed on an important topic like bubbles and manias and how they form the biggest

• 21:21Speaker 03

  ones in history, how they end. So I would definitely recommend starting there. Or if you don't want to do a course, then just going through my Sunday reads, it's where I write up some historical Kind of context for something happening in the markets that week and then a link to five articles from around around the web and different kind of scholarly institutions that are tied into the major theme of that week.

• 21:47Anthony Pompliano?

  Yeah, when people are doing this, so whether they go through the the training program that you have, if they end up reading a book, if they end up reading a podcast, like, how do you take information? You're like, okay, I understand what happened in the past and then figure out how to critically think about like, how does that apply to today? Because I think that's probably when I talk to folks about history, you usually get like history buffs who could recite every single data point in the world, right? And you're like, that's great, but like, how does that apply to today? And their like brains just overheat and steam comes out of their ears. But then there are some people, I think that you're one of them, that can read about history, understand it, and then make the connection to like, oh, here's how that applies today. Like, where does that skill set come from? Or like, how should people think about doing that?

• 22:29Speaker 03

  So I think you have to start reading enough to be able to form a view. Like, you're not just going to read one article and then know kind of how to apply it to today. I think also the mistake that some people make, and I've definitely made this before too, but the analogy I like to use for how you can use history is that history is like a compass. It's not like a GPS system. So just because, you know, you've read history and you've looked at market history, what happened in previous bubbles, that doesn't mean, you know, you have some like crystal ball necessarily, or you have a GPS system that's telling you exactly how to navigate markets going forward just because you've learned from the past.

• 23:11Speaker 03

  But it is a compass where if you can see XYZ happens in most of the major bubbles in history, like using the bubble triangle, for example, if you see that these three things are typically what Cause the formation and destruction of a bubble, then you can at least ensure that when you're investing today, you're kind of orienting yourself in the right direction, using the compass metaphor, to just make sure that you're facing north when you should be and not facing south. And so if you're using the bubble triangle, for example, and interest rates are rising, and it seems like a pretty speculative period, then it might not be the time to, you know,

• 23:53Speaker 03

  put 100% of your portfolio into highly speculative stocks, because you could say from history that this bubble triangle framework would indicate that the bubble and kind of good times might be coming at least temporarily to an end.

• 24:09Anthony Pompliano?

  Got it. When you look back at history, is there one thing that you've been most surprised by? Like, there's a lot of, you know, hey, this time's not different. This has happened before. But has there been anything over the years that you're like, oh, wow, like, that is shocking that that did happen before? Or actually, I can't find anything where this current event actually occurred?

• 24:27Speaker 03

  One thing that did shock me, which I guess makes sense, because, I mean, it's happening today to an even greater extent in this age of information. But basically, every moment in history, whenever there's a new technology introduced that provides investors with more information and data points, it doesn't really have any material impact on the kind of average

• 24:53Speaker 03

  performance or like, performance of the average investor. You would think, you know, if you have access to more data, you can make better decisions and therefore become a better investor. And that's just not really the case. What's also interesting is that when investors receive more access to information, again, you would think that, oh, you know, previously, before the ticker, for example, investors would get, investors at high-quality exchange, like brokers, rather, would still get their price information like, two weeks late. So their broker, you know, say you lived in Virginia, but your broker was in New York, because the brokers needed

• 25:34Speaker 03

  to be physically close to the stock exchange, because the ticker wasn't distributing that price information across the country yet. The broker would send 12 day old prices to the investor in Virginia. And it's like, what do you do with that information? And so it's only information on a small pool of stocks. But then after the ticker and the ticker, you know, was then placed in states across the country. And they were all receiving data from the New York Stock Exchange and they're linked up through cables. You would think that, oh, there's a much wider pool of data on a much wider pool of stocks. And so people are going to invest in more stocks and like a wider range of stocks. But the data shows that when that happened, people just still concentrated into, you know,

• 26:19Speaker 03

  the 20 most popular stocks. And so there are just a lot of instances of things like that where you would expect something to happen just based on what makes intuitive sense. Like you have more information on more things. So there will be more diversity in people's opinions and approaches to investing. But we all just still tend to like herd into the same popular things. So when the Robin Hood kind of day trading phenomenon was first starting during COVID in 2020, there was like that Robin tracker, whatever that site was. And it was just showing how much of the volume of trading each day on the Robin Hood app

• 26:59Speaker 03

  was concentrated in like the same 10 stocks, which again, you think about how much information we have today at our fingertips and on our phone. And we're all just still herding into like most of the same stocks.

• 27:12Anthony Pompliano?

  Yeah. You recently tweeted this story about Winston Churchill. And it could not be a true story, but it just cracked me up. It says Churchill was a terrible speculator and visiting his Wall Street friend Bernard Barak in 1929, he's given a trading desk by clothes Churchill cried, he was ruined. Barack said Winston actually broke even. He had sold every time Winston had bought and bought every time he had sold. And so like this whole idea of like counter trading and almost understanding like, hey, maybe I should do the opposite of what the emotional people are doing. Like, how do you take these types of stories? And let's just say that it is true regardless of whether it's not or not. Like, how do you take those and just say like, yeah, it's just the exact same?

• 27:55Speaker 03

  Yeah, so I mean, it really is. And I think that story. So the one thing I can say is that it is a fact that Churchill was a terrible speculator. Like, that is true. There's evidence of he was like going broke and taking a bunch of advances on his books and then investing in them in these like speculative things that often didn't turn out. Whether that specific story of Baruch, like, contratrating every move that Churchill did that day is, again, it could be apocryphal and it honestly probably is. But the one other interesting lesson from that story, I think, is that just because you're an expert in one domain

• 28:32Speaker 03

  does not mean that you can just translate that to other areas. And so Churchill was obviously master politician and famous for a reason. But that does not mean that he would be a master trader, despite what he might have thought. But yeah, that kind of stuff happens all the time. One of my favorite examples is, again, in the 1600s, when the Amsterdam Stock Exchange opened, which was the first like modern stock exchange in the world. One of the tricks that speculators used to do was if a speculator wanted to move the price of the Dutch East India Company stock,

• 29:12Speaker 03

  he would have a written piece of paper with like a huge buy or sell order on it and then accidentally drop it on the ground, knowing that some other kind of day trader would like sprint over and pick it up, thinking he'd found some like secret that he could trade on. And so that guy that picked up the piece of paper would go run over to his kind of group of trading friends and say like, oh, my God, you know, John or whoever just dropped this. He's about to buy like, you know, 4,000 shares of the Dutch East India Company or something. Let's all go buy it up. And so they go do that and then bid up the price and then the original speculator that dropped that piece of paper on purpose then sells out at a

• 29:55Speaker 03

  he places a huge sell order and then those kind of day traders are left holding the bag. 200 years later, in New York, one of the biggest robber barons The Gilded Age, Daniel Drew, used to do the exact same trick in New York clubs near the stock exchange. He would go in and he called it the handkerchief trick where he would have again a piece of paper in his handkerchief. And then on his way out, he would mop his brow and drop the piece of paper on the floor. So that people would go pick it up and trade on that information. And then he would do the opposite and benefit from those people bidding up or bidding or selling down the price of that stock in his favor.

• 30:38Speaker 03

  So 200 years apart, the exact same trick and people still fell for it every time.

• 30:43Anthony Pompliano?

  When you think of those things, should people learn from the past in the sense of like how to do business? Or is history a better teacher when it comes to things like regulation?

• 30:56Speaker 03

  I think both. I think with stories like that, I think that, so one of the takeaways of like, you know, all these stories are interesting, just from historical, historical perspective, and they're pretty entertaining. But I think like some of the actionable ways you can think of how to apply that to investing today is, so I work for O'Shaughnessy Asset Management and we're a quant firm. And so we basically recognize this history of humans just getting in their own way. No matter how smart you are or stupid you are, you just tend to work against yourself because at points where the market is either up a lot or down a lot, your kind of emotional side takes over and just

• 31:42Speaker 03

  basically kicks out the rational part of your brain.

• 31:47Speaker 03

  And so how do you, how can you eliminate that? One of the ways is to just invest systematically according to a rule set where there's no human element. And so as quants, we have the algorithm that we set up because we have decades of backtaste, backtested data and historical.

• 32:09Speaker 03

  Evidence and research showing, you know, what we think leads to outperformance over time, what kind of characteristics of stocks are indicative of outperformance. And then from there, you remove the, the human element by not trading. And so whether the market is going haywire, you're not actually having to make those decisions because you're just letting the computer basically trade systematically for you. And so you can kind of remove that possibility of you shooting yourself in the foot by getting involved when your emotional side of your brain starts to take over.

• 32:44Anthony Pompliano?

  When you think moving forward, are there elements of reality or kind of the current times where you think is the best way to document it? Like many people say, hey, write stuff down as it happens and you can look back at your own experiences, your own thoughts, your own kind of emotions. Are there other things that you do so that you can almost create your own, you know, personal history that you then can look back on?

• 33:07Speaker 03

  For me, I would say writing the weekly newsletter is kind of my, my form of that. I don't do anything else. I mean, I write kind of like the stuff I do each day and things I need to do in a physical notebook, because I'm a very tactile person. But yeah, for me, it's kind of the weekly newsletter because that's me each week in real time, putting together my thoughts. And so in a couple of years, it'll be interesting to look back and see, you know, where I was wrong, where I was right, or what I never even saw coming.

• 33:40Anthony Pompliano?

  I think that you're more right than wrong, which is, which is the whole key, right? Yeah, everyone's wrong, but just being a little bit more right than wrong means that you got a shot.

• 33:50Speaker 03

  I hope you're right.

• 33:51Anthony Pompliano?

  Yeah. I hope so, too. Where can we send people to find you on the internet or find the newsletter or, or the programs that you run?

• 34:00Speaker 03

  So on Twitter, I'm investor amnesia and my website is investor amnesia.com. So there you'll find the newsletter, you can subscribe, my articles and the courses. One is on bubbles, manias and fraud, where like Jim Chanos did a lecture on some of his like big short. And the common, uh, common themes among them. And then my second course was on the financial history of empires, which is a fascinating subject. And for that one, I had Mark Andreessen, um, Neil Ferguson, who wrote the ascent of money. And he's like the GOAT financial historian, um, Mike Green and some, and some others. Um, so both courses are really interesting. Um, and you can find them both online.

• 34:45Anthony Pompliano?

  I think that's fantastic. And, uh, he, he is the GOAT. I do think that he, uh, he probably is the GOAT. Uh, awesome. Listen, thank you so much, Jamie. I appreciate this. I, uh, I learn every time that you write something. So, uh, please keep it up. I don't know how you have time to go back and find all of this information. Uh, I think that's probably the most impressive thing is that you, uh, you have to be an expert Googler, uh, at this point in, uh, in locating all the information, but I appreciate you put it together and, uh, we'll definitely have to bring you back as, uh, as the world continues to just repeat all of the same things it's been doing for centuries.

• 35:17Speaker 03

  Exactly. Awesome. Thank you so much.

• 35:19Anthony Pompliano?

  All right. Sounds good, buddy. Talk soon.

• 35:21Speaker 03

  Bye.

• 35:22Anthony Pompliano?

  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.