286: Bill Perkins on Investing in Natural Gas

Bill Perkins is an American hedge fund manager, film producer, and high stakes poker player from Houston, Texas. He specifically focuses on venture capital and energy markets. In this conversation, we discuss the energy markets, universal basic income, how investing is a psychology test, why Bill plays high-stakes poker, and what the big idea behind "Die with Zero" really means. =============================== Pomp writes a daily letter to over 45,000 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 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?

  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. Bill Perkins is an American hedge fund manager, film producer, and high stakes poker player from Houston, Texas. He specifically focuses on venture capital and energy markets. In this conversation, we discuss the energy markets, universal basic income, how investing is a psychology test, why Bill plays such high stakes poker, and what the big idea behind his new book, Die With Zero, really means. I enjoyed this conversation with Bill, and I think you guys will as well. Before we get into the episode, though, I want to quickly talk about our sponsors. The first is BlockFi. As many of you already know, I'm a huge fan

• 0:45Anthony Pompliano?

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• 1:25Anthony Pompliano?

  supporter of this podcast, and I'm a huge fan, so go to blockfi.com/pomp to check them out. Again, blockfi.com/pomp, and there may even be some discounts and surprises when you head on over to blockfi.com/pomp. So go check it out. Also, don't forget, I write a daily letter to over 45,000 investors about business, technology, and finance. I break down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at pompletter.com, pompletter.com, or go click the link in the description. Alright, let's get into this episode with Bill. I hope you guys enjoy this one.

• 2:03Speaker 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.

• 2:31Speaker 02

  All right, guys. Bang, bang. I have Bill here with us. As I was joking with them, he is sitting on a boat in beautiful blue waters and I'm sitting in New York City trying not to get COVID-19. So, thanks for doing this. Both have the same goals, just different locations.

• 2:51Speaker 02

  Absolutely. For those that don't know you, let's just start with your background and kind of where you grew up and then how you got into finance. Okay, so I grew up in Jersey City, New Jersey. I went to school at the University of Iowa. And right around my fourth year, I'm a five-year graduate, my godfather goes, you know, basically gives me the, "What the hell are you going to do with your life?" kind of talk, which I was kind of delusional. You know, I knew I didn't want to do engineering. I went to school for electrical engineering, but I knew I wanted to make money and I saw the movie Wall Street and I thought, "This is a way to like leverage my time and make a bunch of money." So I said, "I want to go into stocks." He's like, "I don't know anything about stocks, but I know this commodity firm on the exchange floor.

• 3:36Speaker 02

  Do you want to go take a visit, bring your resume, et cetera, take a visit?" So, long story short, I showed up my resume, they take my resume, they tear it up, they throw it on the ground, "You don't need that here." They walk me around and I thought I had a job, but I didn't have the job. Like, there was apparently somebody else vying for the job. So I used to come down to the exchange for three days waiting, like, "Can I get a job? Call and can I get a job? Can I get in? Can I get in?" Waiting downstairs to get hired and I finally got hired as a peon, like assistant, assistant, assistant peon. And, you know, I worked my way up from there.

• 4:10Anthony Pompliano?

  Yeah, and so when you first got started, did you go right into the energy market? Or were you doing something else?

• 4:17Speaker 02

  So I worked for a company called Refined Energy that was in the crude oil. Back then, there was only crude oil, gasoline, right? Those pits where they were at and heating oil, diesel. And so I was a screen clerk for that firm. That's where I started, right? And that's where I started learning about commodities and options, et cetera, working at different firms on the floor.

• 4:41Anthony Pompliano?

  Yeah, and I guess one of the big leaps I think that every trader wants to make is I want to go from working for somebody else to eventually starting my own stuff. And kind of what was that transition like? Because you made a you were at a couple of different places and then eventually went out on your own. But what drove that?

• 4:59Speaker 02

  That was like a meandering process, right? Like I needed to learn, I needed to stumble. I was in brokering over the counter, which I hated, although it was lucrative, but I really hated it. And then I got offered to run an options desk in Houston as they were deregulating natural gas and needed traders to basically manage risk. So I swore I would never go to Texas, like leaving the Upper West Side to go to Texas was like, friends were like, what the hell are you doing? But I would have went to Siberia to trade. You know, I really, really wanted to be a trader. I really wanted to be a master of my own fate. I really wanted to eat what I killed, not dependent on people's moods, but dependent on my ability versus the markets.

• 5:43Speaker 02

  And so I left and through a long process, you know, developed a name for myself, either good or bad, right? And worked with eventually when Enron went under, my friend John Arnold was going to start his fund. And I was like, well, if you pay me this percent, I'll come work with you. You know, it was two young guys trying to take on the world. And we started off four people in Centaurus, starting this natural gas trading shop. And then that firm became, you know, long story short, the most successful commodity hedge fund ever, aside from Rensselaer in commodity trading, right?

• 6:27Speaker 02

  Just a ridiculous run. He called in rich and retired, and then I started my own fund.

• 6:33Anthony Pompliano?

  Got it. And when you guys started that, what Was it something where you were managing personal capital at that point? Was it you had a couple LPs and that really gave the confidence to make the jump? Or did you guys start and then have to go raise the money before you can actually start trading?

• 6:48Speaker 02

  So, one of the craziest things about Centaurus, as successful it was, is that I didn't have a dime of my own money in the fund. Which, the logic at the time, which I now know is totally false, was that, listen, it's okay to have no money and a job, or a lot of money and no job, but no job and no money is pretty bad. And so, the idea was, if we blow up and you have your money in here, you know, that's a bad thing. And so, we didn't do it. But, you know, looking back, I was so young. I was like, I could easily recover from this. I should have taken the risk, right? And so, John started Centaurus with eight million dollars of his own money. And the investors that said they were gonna put the money in day one, they didn't show up.

• 7:33Speaker 02

  But after we posted a hundred and seventy or whatever, three hundred percent return, they started knocking on the door, right? And then, you know, the next year, whatever, and they kept knocking on the door. To the point where it got to the point where John was kicking people out, uh, and, and not letting people in. Like, he was able to get to the point where he was able to choose the partner he wanted it.

• 7:54Anthony Pompliano?

  I, I asked a very well-known, uh, um, hedge fund manager. I said, uh, how do you guys raise so much money? And he said, "We don't." And I said, "What do you mean?" He goes, "We don't do shit. The returns raise the money." Right? Just people come and find us because they want the returns.

• 8:08Speaker 02

  Right. It's very path dependent, too. It's unfortunate because, you know, no one bats a thousand. A lot of people have, you know, a bad year or whatever. A good thesis, great bet, would do it a hundred times out of a hundred. But if you have that bad stub year or that bad first year, you just, it's almost impossible to raise money, right? And so, that's the bad side about raising outside capital, you know?

• 8:32Anthony Pompliano?

  For sure. And then, talk a little bit about when you actually went out on your own, um, kinda how- Why go out on your own and what were some of the things you learned as you did that?

• 8:41Speaker 02

  Um, I, I thought, you know, that I was avoiding FOMO partially, right? When, when Centaurus stopped, Greg Whaley, who now runs Copperwood, and I were going to partner together, right? I, I being the second most successful trader at Copperwood. And a bunch of other all-stars, they're all all-stars at Copperwood. You know, he was going to start the fund and, and the bottom line is, is Greg and I could not agree on, on control, risk limits, et cetera, right? Like Greg's, Greg's a military guy. He's got, there can only be one captain, right? And so, um, even though we're, we're great friends and we still talk a lot, it was better for me to go away. And the reason why is the pooling risk in commodities.

• 9:25Speaker 02

  You know, guys wanted me to stay for, you know, having my set of neurons and my way of thinking to help the fund. But I was like, listen, you can have your best year ever and I can wipe you out. Right? Because if I have a bad year, I, I trade such a big, you know, big book, big style. You kind of want to be insulated from that. You think you want me, but you don't want me, you know? And we can always talk shop, right? So you still get my neurons, right? But you, you don't, you don't, you don't have the risk. And so that's the way it went.

• 9:55Anthony Pompliano?

  Got it. And then when you went out on your own, uh, you went right to, um, to all the energy stuff? Or were you trading other commodities as well?

• 10:01Speaker 02

  No, it was just to trade what I know, right? Like it would be hard, it would be very, very hard pressed for me to raise money outside of, you know, what I had been doing then. It, it, it's pulling teeth raising money. So we were able to get, you know, a big check from one institutional investor, a fund of funds. And, and we're still a small, teeny, teeny fund. But, and a couple of other friends and family and high network individuals.

• 10:29Anthony Pompliano?

  For sure. And, and then as you've, uh, grown, I think you're also doing venture capital investing now as well a little bit?

• 10:38Speaker 02

  Yeah, I do that through my own entity, right? I have enough capital to be like, I guess, a medium-sized family office. And so I have a lot of in-house expertise that I've hired over the years to attack certain problems, deal with certain issues. And so I have a CIO, I have, you know, capital to deploy, and I love solving puzzles. So I've been doing that kind of on the side, but it's not on the side at the size we're doing it. You know, I say it on the side because my primary job is trading natural gas and trading energy.

• 11:17Speaker 02

  But, you know, we write what I would consider somewhat significant tickets. You know, when I go into, you know, a publicly listed stock and I look at how many shares I hold, and I'm like, oh, wow, we're in the top, if they listed us, we'd be in the top 10, right, of shares, you know? And so, and when we come into a private placement, you know, we're able to write the tickets that people are looking for and the sizes, right? They don't want one single investor to control it, but they're looking for half a million, 2 million, 5 million blocks, you know? We're able to write that ticket. So it's gotten pretty serious, you know? It's always serious, right? But it's gotten, it's significant.

• 12:00Speaker 02

  The unfortunate thing is, is though, we do have a limited pool of capital, and there's lots of great things that they'll look at.

• 12:06Anthony Pompliano?

  Yeah, for sure. Let's talk a little bit about what's going on in the energy natural gas world. Obviously, things have been absolutely chaotic, to say the least. Kind of what are you seeing in the market and how are you guys thinking about what's going to transpire here coming in the future?

• 12:24Speaker 02

  Right, like the two things, the two things that we're kind of is the demand destruction going on from response to COVID-19.

• 12:37Speaker 02

  Versus supply destruction from crude oil shut-ins and rigs being drawn, right? And so we have these opposing forces happening, right? And it's chaotic, right? Like people, we're looking at like power burns and supply getting turned back from LNG versus shut-ins versus nobody's doing anything, right? And you know, our, our general thesis right now is that we used to be extremely bearish the front of the curve, but we've tempered that because of the rig count and shut-ins and prices, right? Nothing cures high prices better than high prices and nothing cures a glut better than

• 13:22Speaker 02

  a glut, right? And so those play, you know, the problem with our view is, is that there's a lot, normally we're very, like our, our, our, our error rate, right? We'll say is a half a BCF a day. If anybody knows, that's a billion cubic feet a day. Uh, for example, the United States is producing about 93 BCF a day, right? So that's where we want to be in our error rate. Like now our error rate's like two BCF a day, three, like it's very hard to, to pinpoint a single variable. How much, how much is production going to be from A within two BCF a day? How much is, you know, how much, how much is demand destruction right now within a BCF a day?

• 14:07Speaker 02

  I don't know, you know? And what will it be in the future? Those are very hard to predict, but if you have an overwhelming, um, overwhelming cumulative uh, factor like supply declines, we believe as time goes on at this low of a rig count, the supply decline will overwhelm all other factors as we get further out. Right? And so we have this kind of like very nuanced view of the world as time moves forward.

• 14:40Anthony Pompliano?

  Yeah, I, I was gonna say, I don't know too many people who I've heard say that before. So maybe describe, like, explain that a little bit more as to what you mean exactly by that.

• 14:49Speaker 02

  Yeah, let me, let me, uh, I guess if, if, if you had a, I, I love bathtub analogies, but this is, if you had a bathtub, right, and it's about to overflow, right? You're like, oh, my gosh, is, there's nobody using this water, it's flowing into, nobody's drinking it, it's all flowing into this tub and this tub's gonna overflow and the drains are this big, right? And then at the same, you know, at the same time, you're like, the drain gets a little bigger and the flow keeps going down, down, down, down, down, down, down, down, until there's no flow, right? So, in the short term, maybe some spills over the sides and we have a price crash, right? But over the long term, we can see the water's gonna stop and the drain is still there, right? And it's gonna get very, you know, it's gonna be very bullish water, right?

• 15:34Speaker 02

  Like, where's the water, right? And so, that's the way it is in natural gas, is that the faucet of natural gas is, is slowing down and the drain is staying the same or maybe getting a little bigger. And so, how that plays out over time is, is complex, right? Like, will, will, will, will it overflow before, you know what I mean? Like, is it gonna overflow in the short term or not? Or it's gonna just be okay, right? And then as we get into the high demand periods of natural gas, which is really the winner, and as we go further in time, you know, we need to start worrying about running out of water, right? There's no water in the tub, right? And so, that's kinda, I hope that analogy helps, but that's kinda the way we're looking

• 16:16Speaker 02

  at the market right now, is what is the overwhelming long-term variable and what's gonna happen in the short term?

• 16:23Anthony Pompliano?

  Yeah, no, that, that makes a lot of sense. And, and I guess, um, how much of that, uh, are you focused just on the United States versus a lot of the things that are going internationally with Saudi, Russia, and kind of a, a lot of the stuff that they're trying to, uh, to manipulate?

• 16:39Speaker 02

  You know, over time, you know, the US used to import natural gas. It still does in Everett, right, up in Boston. But the, over the years, we've gone from importing to exporting seven and a half, going up to eight to 10 DC up a day, right? So that's a significant number. So that has forced every single natural gas trader to pay attention to what's going on in the world. We used to love our market because it was a niche market that was complex enough that the average person couldn't figure it out. But you could if you built the fund and built in resources, right? There weren't that many variables. And now there's this extra variable of what's happening internationally? Are they going to basically turn back all the LNG that we're shipping to them,

• 17:25Speaker 02

  thus complicating our situation here? So we're very much aware of, you know, we build AI ship models and tracking models of fundamentals in Europe and also try and figure out what's going in Asia and that black box, tracking ships, et cetera, because we need to know, okay, when Europe says, when the price of European gas goes below US gas, as it is right now, we need to know how many cargoes are going to wind up at our doorstep, thus putting pressure on the price, right? And so we've all been forced to go to school very quickly on international markets.

• 18:01Anthony Pompliano?

  Yeah, it's super interesting. And I guess as part of this, like, what would change your mind about the thesis on where natural gas is going now? Are there certain things that you guys are looking at as either kind of flags or things that you're like, hey, if X happens, then we would actually change our thesis?

• 18:20Speaker 02

  Yeah, I mean, we're concerned about the level of like, you know, most of these things are highly educated guesses, right? So, you know, I've gone from bearish the front to mildly supportive, right? With massive error, right, baked in there. And, you know, I would look at, okay,

• 18:41Speaker 02

  We're measuring the supply every day. And is it declining at the rate, right? And that's one of those slow boiling frogs. You don't know because it's noisy. You have to get a bunch of data. We're looking at how quickly the U.S. opens or doesn't open up. This is going to keep opening and shutting up, right? With the effective demand equation. We're looking at international prices. Like what's going to happen with these LNG ships and these turnbacks, right? We have a count and media reports, but it could be bigger, right? We could say, looks like it's two and a half bees a day. But what if it's five, right? And so these things are things that in the short term, we're watching. For the long term, the biggest thing is rig count.

• 19:21Speaker 02

  If you don't have rigs drilling, you can't, um, you can't overcome the declines. So I think, I don't know if people know this, but when you drill a natural gas well, you have this high production and then it starts to decline pretty steep, right? And so we have to, we have to find 18, I think it's 18 B C F a day, 16 18 B C F a day. I don't have the number exactly, just to stem declines, right? So we need rigs out there running just so it doesn't decline. And so when you take the rigs down more than 50%, which we've done, uh, you know, in three weeks, it's just amazing how, how much we've stopped drilling and ship, you know, stop the, stop frac crews going out producing gas.

• 20:06Speaker 02

  That over time becomes just an overwhelming factor. So the main thing I look at every day is what are rig counts doing? What are rig counts doing, you know? And then I do further research. How long does it take rig counts to go up versus down? Right? Because it's easy to drop a rig, drop them rigs. How long does it take to get the crew back out, back on the pad, et cetera? And then, and grow it. And so every day that I see the rig count drop and stay at this level, the more bullish I become the back.

• 20:40Anthony Pompliano?

  How much of the rigs going down is driven by like COVID-19 social distancing stuff versus the economy and natural prices dropping? And so then it becomes unprofitable.

• 20:54Speaker 02

  I think it's 99.9% prices, a response to prices and what's going on in oil. So we have a lot of the natural gas produced here is produced by associated gas. It's called associated gas. Basically, you're drilling for oil and gas comes out with it, right? And so the oil is a higher priced product and gas is kind of the byproduct, right? To the extent that, you know, they're flaring gas into Permian and Bakken, right? And you're selling these liquids. Well, lo and behold, oil goes to crap, you know? You don't get that free byproduct, the gas flowing, right? And also, so you have a lot of those rigs dropping, right?

• 21:34Speaker 02

  And a lot of balance sheets impaired by companies that drill both for natural gas and oil. And so they're dropping rigs, right? They have to get, they have to lower their budgets, they have to survive, they have to tighten their belts, et cetera. And so that activity, that's what's driving, you know, the dropping of the rigs. COVID is the indirect cause, right? Because there's no demand.

• 21:57Anthony Pompliano?

  Yeah, for sure. And I guess part of this is just like you're trying to calculate, you know, how quickly can you get the crews back out and get the rigs back up and running? There's also this calculation of like, they can say the cities are open or the states are open, but actually, how long does it take for consumers to start, you know, demanding or consuming, right? And I haven't got that answer yet.

• 22:17Speaker 02

  Yeah, and we can measure real time demand, right? Like, so we were able to measure a real time electricity demand, real time, you know, we can see power burns every day, every minute. So we're tracking the demand pretty well, right? It's hard to forecast, like, it can kind of get worse, but we're tracking it pretty well and have a reasonable idea of what the bottom is, right? New York City's completely shut down, but it's, the power demand is down 11%. So we kind of know, right? So the main thing right now is like, okay, when does this faucet become a problem, right? When does the supply issue become a problem? Right now, it's not a problem, not a problem at all. As a matter of fact, it's the exact opposite.

• 23:02Speaker 02

  We might, we have too much gas, but that switch is going to flip. And when it flips, given the current circumstances, if we stay on this path, it could be violent to the upset.

• 23:13Anthony Pompliano?

  Yeah, and so what it sounds like you're really kind of highlighting here is right now you've got a surplus from a supply side, demand has gone down a little bit, but because you realize you've got the surplus and demands down, people are actually shutting down production, incoming supplies almost slowing. And so when that demand comes flying back, there could be a moment in time where people are caught without enough supply and that's where the problem would come in?

• 23:39Speaker 02

  Yeah, like people are just cutting their production and associated production. So, you know, these guys, you know, also the cost, the break even cost in a well has changed, right? If you look at the interest costs, you know, drilling is a leveraged business, right? And, you know, there's been studies done in the Marcellus, like what are the break evens at different interest rates? But if you look at like the cost of capital for the drillers, they basically have doubled on average. So I don't know if the price break evens, you know, get you what you want, the supply you want. And so that's another thing I'm looking at. But generally, right now, you know, I say there's things like there's tweezer trades where you have to be really accurate and really nuanced and

• 24:23Speaker 02

  know every single little detail and there's sledgehammer trades. Huge macro thing is happening. You don't need all the details. You have enough room for hours, you just pile it, right? And I think the further we get in time, this goes from tweezers to sledgehammer. Right?

• 24:43Anthony Pompliano?

  For sure. Let's switch gears a little bit. You not only spend a lot of time, obviously, paying attention to the markets and trading, but you also play a lot of poker. And kind of where did that fascination come from? And really, it looks like you just enjoy it. It's like, when did you kind of get into poker?

• 25:03Speaker 02

  I think I got into poker or any kind of wagering on the floor, right? It's a very... You know, locals and traders around it's a very degenerate type attitude, right? Like, they're playing the house generally, but that feeling, that emotion of like, taking risks, the risk takers. And so, I have that gene, you know, that risk-taking gene, that degeneracy, and I just kinda got into that, you know, of being able to let go and take risks, right? And, and, and be able to get lucky. And then as the stakes got higher and the money, I was like, wait a minute, I need to stop trying to get lucky and actually try and be the house just a little bit, learn

• 25:47Speaker 02

  poker, and just get a little bit better. But I do, I do love poker because you, you play with very interesting people. It's a social game, right? It's a competitive social game that you use your math skills and your cunning and intellect, but you're also interacting with some very, very interesting people, and you get to meet some interesting people and characters, uh, playing poker.

• 26:10Anthony Pompliano?

  For sure, and, and I guess as part of that, like, at what point did you make the switch from probably playing like, games with friends and, and more kind of what I'll call the amateur levels to consciously saying, hey, I wanna go play in the bigger games, I wanna go play in the tournaments, um, whether they're public, you know, publicly available or private, like, what was that kind of ambition?

• 26:30Speaker 02

  I think it's the same delusion I had as being a trader, right? Like, it's totally delusional, right? To go, I'm gonna be this multimillionaire trader, and I'm gonna go to Wals, and I'm gonna do X, Y, and Z. I, like, happened to do it, right? You know, my, I, I'm, I'm geared to do it, I have, you know, slightly elevated, elevated chance of being successful, but I don't think I'm that special, right? I just think that I have that motivation and a delusion, like, you gotta have that delusion to try. And so, I think I had that delusion in the beginning, like, I wanna try, I could be, I could be that guy, I could, you know, I could beat this guy, go in a lot of money, I could win a tournament, how hard can it be, type of thing, you know?

• 27:13Speaker 02

  And, you know, through the school of hard knocks, you figure out, it's, it's very hard, but if you're persistent, you can get better and better and better and better, and it's like, a game of golf, you're always getting better, right? You can always study and be better.

• 27:27Anthony Pompliano?

  For, for sure. Uh, what's your favorite game that you've ever played?

• 27:33Speaker 02

  In terms of like no limit hold'em or like on I think like the televised uh we used to play this game where it was called uh not the wild card but they would have these televised things where they would bring somebody in and give them a chance to play against sharks right and you'd sit there and they got to keep the money they've won and I I really love that concept that I really love playing on the shows and I you know it changed people's lives you know it it I I really love those televised poker shows where um people who wouldn't have the means to play in those games get a chance and get keep the money one it's great for the game

• 28:19Speaker 02

  brings out awareness and two it's I just love rooting for the young

• 28:24Anthony Pompliano?

  I I I love that and you it also brings in the uh the whole element of there's everybody out there thinks they can uh beat the people on TV right whether it's basketball poker or anything else and so give them a shot

• 28:36Speaker 02

  yeah yeah the the only one where people just will not go do that is in boxing

• 28:42Speaker 02

  they just they just know they will get their ass kicked right but like I say is like you know they still write the checks whether you get your ass kicked or not so

• 28:52Anthony Pompliano?

  when when we were kids we used to joke all the time and say how much money would it take for you to stand in the ring with Mike Tyson for 30 seconds or not even fight back for 30 seconds well how much money would it take

• 29:02Speaker 02

  yeah yeah that that is that's one of those punches are pretty severe you know

• 29:08Anthony Pompliano?

  absolutely uh one of the most asked questions that I had people no one really wanted to tweet they were all like DMing me this was they said ask Bill to tell the wildest poker story that he can that he's never told before I said I don't really know how I'm gonna ask them that other than just flat out ask them so you got any wild stories you've never told before

• 29:28Speaker 02

  wild stories I mean

• 29:33Speaker 02

  I can't because my kids might see this. I can't. I mean, there is a story I want to tell.

• 29:40Anthony Pompliano?

  Did you make it PG?

• 29:42Speaker 02

  I mean, uh, it involves me, Dan Balzari and Sam McGee, a bunch of interesting ladies and, and at his house late at night. And I, it, I just can't, I can't, I can't do it. But I guess, let me give you the second one. I mean, the, the other wild ones are really just money swings for people just doing ludicrous things, right? Like, just, you know, sending out all in, three, six off, you know, shipping it in 200,000. Like, what, what's going on here? Like, I'm clearly not rich enough, you know, like that type of thing. But the true story would have to be, my daughters will have to be a little bit older before I tell them.

• 30:26Anthony Pompliano?

  All right, that, that's fair enough, fair enough. Um, a- as you kind of think about, uh, investing on the venture capital side, uh, also a couple of people were interested, um, you know, poker is, um, you're, you're playing a multifaceted game, right? It's not just the math of the cards. You also are making decisions without all the information. Uh, you're, you're playing off of other people at the table, uh, and it's very similar to venture capital investing, where you've got to make those decisions without all the information. Uh, you've got to have some confidence. You've got to have some probability understanding. Like, what are some of the lessons that you've learned, uh, from poker that you've brought over on the investing side that, uh, that you think would be helpful for others?

• 31:03Speaker 02

  I, I think that, uh, bankroll management is very important for like in the professional poker space. Uh, risk, you know what I mean? Uh, you know, they're very similar, right? In terms of risk reward, limited information, you know, sometimes, uh, you know, the market can be, you know, it's, when you put on a position in the market, it's not like, oh, I'm right. I did all my homework and then the trade goes my way, right? There's Mr. Market who goes, oh, no, we're going to be idiots and jam it up in your face or, you know, make, make this trade riskier for you. You know what I mean? So you, you, you got kings and a guy's jamming all the time. You're like, does he have aces this time?

• 31:44Speaker 02

  Right? You know, limited information. You just have to probability weight things, risk management, uh...

• 31:51Speaker 02

  Budget management, bankroll management, all these things go back and forth. And I always say it's easier for a poker player to become like a VC or a commodities trader than a commodities trader or VC.

• 32:06Anthony Pompliano?

  Explain that more. Why do you think that?

• 32:09Speaker 02

  I just think that um the the the school of hard knocks and poker in terms of bankroll management, managing your risk, managing your emotions is the main thing. Like when when people say, you know, at trading, what does it take to be a trader? I say at the highest, highest level, it's a psychology test.

• 32:30Speaker 02

  Right? Because nothing changes. You just react to the market. It's like, do you do the right thing? You know, are you thinking correctly? Are you making the right risk reward decisions? Or when you have a bad day, are you chasing? Are you doing something other than just what math, risk management and fundamental still you to do? Right? Are you making excuses? And, you know, poker trains you not to be results oriented, not to, you know, go on tilt, right? Not to act out of boredom or et cetera. It's all about the money, et cetera. And those skill sets translate well into trading, right? You're going to carry that over because it's your own role and you've been dealing with that.

• 33:14Speaker 02

  As a trader, you come over to poker and you're like, whee, you know, gamble, gamble, you know, stuff like that. And so I just think that those lessons, if you learn them in poker, translate very well into investing, right? Very well.

• 33:32Anthony Pompliano?

  And in times of like market chaos like we're seeing right now, what are the things that you do to kind of control those emotions or control your psychology to make sure that you actually are thinking clearly and making sound decisions?

• 33:45Speaker 02

  Um, I I try to come out of appreciation. Like if you take everything away away from me, like I have my health. I'm able to uh love my kids. Uh, you know, I have love and I give love. You know, and so I come from appreciation, like where I came from, where I've been. And what I have, no matter what you take away, right? I can at least breathe, right? So. Once I detach myself from. The ego of you lost the money or you did this or what are people gonna think? I I can think clearly, right? I can start doing analysis like, okay. The market just dropped, oh, thirty percent. If I and I'm buying company X, Y, and Z, okay?

• 34:30Speaker 02

  So let's say I thought they were gonna pay me ten dollars a month for for thirty years. But now these first three years is gonna be zero. What's the change in the NPV? Right, so that's a the rational thought, right? Like, okay, we're not gonna have, the company's gonna survive. It's just not gonna have revenues for the next three years, but it's gonna survive. How did that change the NPV? And if if the market's down thirty and the NPV should be down seventeen. I can rationally think that this is a bargain, right? I should be buying. And there were actually many, you know, we ran that exercise, right? It's a sledgehammer exercise, but we ran that exercise. On a bunch of companies that were we are not going bankrupt, right? They have impaired sales, right? Uh.

• 35:14Speaker 02

  Clearly, you know, and the market punished them on, you know, was an overreaction. And it's like, we're a buyer. And there were certain companies like, no. It's not gonna survive. It may not survive. This is actually a this is actually a sale, right? Without a bailout or a so and so like, it has debt due, it's over levered. This thing should collapse, right? And and that's a sale. And so. Being able to like remove what's happening to me. You know, and still focus outward focus on the problem is what I try and do, you know, and knowing that, hey, I'm really, really lucky. Like, I live in the United States of

• 35:55Speaker 02

  America, high infrastructure, you know, even at my worst, worst, worst scenario where I'm waiting tables or something like, I'm okay, right? And so, once I remove that like panic about me, what's happened to me, what's happened to my money, then I can focus and start making right decisions.

• 36:13Anthony Pompliano?

  Yeah. How do you think about like the dislocation right now in the market where it seems like stocks are, you know, relief rallying, if not really rallying, but the economic data we keep getting is going down, right? Twenty-six million Americans unemployed, 4.8% contraction in Q1 for the economy. Like, it just seems like the underlying data and the actual reality on the ground is way worse than the stock market, which seems to just be going in the opposite direction.

• 36:38Speaker 02

  Yeah, I think usually when you have scenarios like this, where the government comes in and intervenes, it drives the wealth gap, right? And so, I think that the current, like rally, broadly speaking, is asset inflation, right? And so, there is a massive effort of to inflate the value of assets. And it's, you can't, you just can't fight that, right? And so, that's where you're gonna see, this stock is up, or doing X, Y, and Z, or doing well, or getting these funds, why this guy is unemployed, etc., right? And so, those who own stock X, Y, and Z do well, or bought it at the dip, this guy still doesn't have

• 37:20Speaker 02

  a job, right? And so, you see that divergence in, unfortunately, in times like this, with the government action, it usually drives the wealth gap, it doesn't help the wealth.

• 37:33Anthony Pompliano?

  Yeah, it feels almost like, it reiterates the point that the stock market's not the economy, it's just the central bank actions or representation. How do you think about the bailouts and that government intervention, kind of the next step of that?

• 37:48Speaker 02

  I'm generally, I'm not on the camp that the government should do nothing. But what the government is doing, I am generally 100% against, you know. I am, there's a lot of companies that, you know, a lot of people have the idea like if this airline fails, then we won't have an airline. And, and that's just not true, right? When you're, when somebody goes bust with their house, the house doesn't disappear. Just a new owner shows up, right? That guy disappears. And so, you know, with the airlines, these owners that created this highly leveraged position, right? Spent all their capital buying back their stock, didn't think about like, you know,

• 38:33Speaker 02

  the robustness of the stability, which is okay. I'm not even going to mock that. It's okay if you want to do that, but you have to accept the risk when something goes wrong. In a leveraged scenario, you go bust. You don't get your executive bonus, you get fired, the management comes in, bondholders get smashed, they should have been paying attention, and the equity guys get wiped out. But the airlines are still there and somebody will gladly come in, put in some capital and run it, run it, right? And so what we've done is we've removed that, right? We've removed that punishment and I'm against it. I would much rather have all that money just be direct deposits into the individuals' pockets, right? Which actually helps close the wealth gap and then let that money trickle into,

• 39:17Speaker 02

  trickle up into whatever investments or whatever is out there, right? But now we're flowing money into concentrated pockets of businesses and industries, right? We're picking winners and losers and letting them distribute the money as they see fit.

• 39:33Anthony Pompliano?

  Yeah, it feels like, what I know about you, I think that you're very much kind of, the United States is, is the best country in the world and we have a significant advantage around the American dream and kind of that belief that like we're all entitled to move up in the world. But it feels like when you start to take away the impact of risk-taking, right? The actual negative side effects of when you take risk and it doesn't work your way, you change the incentive structure, right? And it almost feels like you start to create this social safety net or corporate safety net that really almost incentivizes more bad behavior, more over-leveraging if you know someone's going to bail you out every time.

• 40:16Speaker 02

  Yeah, and it also like it hurts other guys and other competitors who don't get picked. Maybe I have Joe upstart airlines and I'm like, hey, the leverage ratio is pretty crazy. And their customer service is shit. And you're building up your customers, right? I don't know what airline you are, call it Spirit, but not Spirit because a lot of people hate Spirit. But you know what I mean? But and you're like, great, this is my shot to take over. Like, I'm going to get those slots at Newark and I'm going to get those slots at I A H. And my airline is going to grow, but here comes the government with 7.8 billion dollars. Or 72 billion dollars, you know? It's a that airline, that airline, that airline. And you get squashed while they get rewarded, right?

• 40:54Speaker 02

  And so not only does the incentive structure change, it just solidifies incumbents, right? Who probably shouldn't be there, right? And just it just it crushes the American dream for a lot of people. A lot of people don't realize like there's people, organizations, entrepreneurs, upstarts, right? Coming out to compete who are not getting the billions of dollars, right? And now it makes their job even harder, almost impossible in certain cases, right?

• 41:27Anthony Pompliano?

  You're almost in a situation where the government is playing kingmaker to some degree, right?

• 41:31Speaker 02

  Correct.

• 41:31Anthony Pompliano?

  They're picking winners. And the other data point that I saw recently that just blew my mind was there's a lot of workers that are asking to be fired from various companies because they can make more on unemployment with the stimulus kind of beef up in the unemployment insurance than they will at their normal job. And it feels like that's just, one, not something that I ever would have thought was possible. But two, it's kind of sad to see, right? Where people are literally saying, hey, fire me from my job because I literally can make more money on unemployment than you're paying me to actually show up here.

• 42:04Speaker 02

  Yeah, that's that's interesting, you know? I'm a fan of like some sort of floor UBI, right? I'm at the point where I think that survival, just basic survival, should not be dependent on a job.

• 42:23Speaker 02

  Right, all the land is taken, there's no living off the land and farming and all that kind of stuff. So you're kind of forced into the structure where if you want to survive and eat, you have to have a job, right? And I think a lot of people culturally say, "Yeah, but of course." But it wasn't that way, right? That's not how America started. You did not have to go work for somebody, okay, in order to survive. Most people worked for themselves, right? Went out, went out in the West, settled, grew their crops, whatever. That, that is gone. You can't do that. And so there's this force element to work, like you must work, or else you cannot survive, right? And I, I think that should be eliminated, right?

• 43:05Speaker 02

  And I'm not saying people should be lavish, I'm saying like, at the poverty level, right? Where you can survive. I think that work should be for thriving. That being said, these levels of unemployment, you know, where I'm paying you, you know, I don't know if that's an indictment on unemployment, or what they're paying their employees, but I, I, I think that's a little bit absurd.

• 43:26Anthony Pompliano?

  Yeah, to, to me, that, I think that was the part that I took away from it, right? Was the fact that the wages that a lot of folks that are obviously asking to be fired, it has to be so low, right? It, it's not the, you know, fifteen dollars an hour type thing. You gotta be talking about people who are probably making, you know, eight to ten bucks an hour, in today's environment. You know, it's just, it's sad frankly, right? But, but that's

• 43:51Speaker 02

  Yeah. And, and those are people that like, "Hey, I would rather work on my play, or my theory of physics," or whatever it is they could work on if they had some, if their survival was taken care of, right? If you, if you knew you were gonna survive, you know, I think that would unleash a lot of creativity and entrepreneurship of, out of the populace, and not force them to work in McDonald's versus working on this brilliant cure for X, Y, and Z, that's gonna take five years, right? And so

• 44:24Speaker 02

  That's the crushing thing like people are missing about like having a floor and eliminating work from survival is you actually unleash a ton of risk-taking and entrepreneurship and you unlock the creativity of many people, right? There's so many people who are in soul-sucking, low-paying jobs just because they gotta buy ramen noodles and beans. And if they had their ramen noodles and beans taken away, they would say, "F you" to that job, right? And work on whatever they were working on, which I think society would benefit.

• 44:59Anthony Pompliano?

  For sure. What's your thoughts on like all the quantitative easing and kind of the central banks' response to a lot of this? Just in terms of, it seems like they could just print and print and print and there's no end in sight.

• 45:13Speaker 02

  I am generally against it. Like I said, it favors rich guys like me, right? Guys who have assets and houses, you know, when you devalue money, you know, you value assets, right? And, you know, I hear arguments like on Twitter, it's like, "Yeah, but it helps the poor because their debt is lower." I'm like, "Their wages don't go higher, okay? Their wages are not going higher, okay? And everything they buy is getting more expensive, right? And their debt is still the same. It hurts the poor 100%. The poor don't have $300,000 mortgages and $200,000 mortgages and inflation adjustments in their paycheck, right?

• 45:58Speaker 02

  Nobody's getting the guaranteed CPI-adjusted wage, right? And so, it's just terrible, you know? And I think like if it ever gets to the situation where the world goes violent over the wealth gap, I'm gonna be like, "Don't blame me! I was against, you know, I was against all this inflationary crap that hurts the poor, right?" I just think it's... I just think it's terrible. It's just plain terrible.

• 46:24Anthony Pompliano?

  Yeah, and part of, you know, what last year or so, I've really kind of pounded the drum on that I think is so interesting is like, every single person that has any degree of wealth that I talk with, or any amount of assets, they all understand this. Right? And what's very quickly become obvious to me is there's this big education gap as well. Right? Because the bottom 50% or so of Americans who can't afford the $400 emergency payment, or whatever, you know, whatever the stats are, they actually don't understand how money works. They don't understand that all that quantitative easing is stealing the wealth, devaluing their savings and things like that. It's the people who have the assets, they get it, right?

• 47:05Anthony Pompliano?

  And whether they agree with it or not, they understand how the game works. And so they're going to position themselves to be protected, to benefit, etc. And it almost feels like the system is dependent on a big portion of people not understanding how it works to some degree.

• 47:20Speaker 02

  Oh, yeah, there's a couple of good quotes. I forget who said it, but if people knew how their money worked, they would, you know what I mean? They'd kill the king, right? They'd kill. Uh, there is, I am actually shocked at how financially illiterate

• 47:37Speaker 02

  the public generally is, right? If I say net present value, and people are like, "What the fuck are you talking about, net present value?" You know what I mean? Like, you know, like, simple things, like, I, I, it's not like they don't have the mask skills. They do, because, you know, you had to learn these things. It's just that this is not taught. It doesn't seem to be a priority. Uh, and it's so important to, like, even just your daily life, like, should I have money in this bank account, in my savings account, while I have credit card debt? Like, this is a very simple thing, right? Like, you don't carry 24%, you know, you don't pay,

• 48:17Speaker 02

  you know what I mean, to have cash in the bank. You can use your credit card for anything. You want another cash withdrawal, you can take it out at any time, but there are so many people, friends of mine, that I'm just like, "What are you doing?" You know, "What are you doing? You're paying to have money in the bank." They don't get it. And so... I don't know, it's just sad. It's sad. Like, I think a lot of my discussions, like, people are, you know, I get into, like, these Twitter battles. I love Twitter. I'm addicted to Twitter. Uh, and people are like, why, why, they're like, why are you arguing with this troll? Like, why are you doing X, Y, and Z? And the reason is, is that there are other people reading that discussion, and I want them to learn. I want them to know.

• 48:58Speaker 02

  Right? And so as long as we can have a civil conversation, I can hopefully help somebody else to go either investigate further or learn about what's going on and dispel the myths that are getting thrown around.

• 49:12Anthony Pompliano?

  For sure. Um, you, uh, you live a fun life. Uh, talk a little bit about kind of the lifestyle stuff and, uh, kind of how you've structured your life to, uh, to, to enjoy it now, um, rather than, uh, you know, kind of working every single day inside of a normal office.

• 49:28Speaker 02

  Yeah, like, uh, you know, the great thing about technology is, is that, you know, people talk about remote work, and I've been remote for, for a while, right? And so everything from the applications we build in-house to other trading applications I have on my phone. So the good thing is, is that I can be anywhere and work from anywhere. The bad thing is, is I can be anywhere and work from anywhere, right? So it's, it's a double-edged sword. Um, but, you know, my favorite thing in the world to do is travel. Um, so that's, there's a kibosh on that right now. And, you know, I spend most of my time trying to change what my office looks like, right? I'll go to Tokyo, or go to St. Petersburg, or go to Europe. You know, that's kind of all on hold right now.

• 50:12Speaker 02

  And so I'm in the Virgin Islands, where, you know, at least I can be on the water, uh, you know. You know, I'm out here with all the other boats. I can get a little look. You know, I'm hanging out here.

• 50:28Speaker 02

  If you can see that. Do you see that? Yeah, of course. Yeah, and so, you know, that's, I just kind of go where I like it, just try and be at peace. And the water and the animals and sea life, it's, I'm at peace here.

• 50:44Anthony Pompliano?

  For sure. And then you've got this kind of idea, I know you've got a book coming out over the summer, but die with zero, right? Maybe kind of explain what that concept really means and kind of how you put it into, into practice.

• 50:57Speaker 02

  Well, so independently, I've been thinking about like the utility of money and what it's for, right? You spend hours of your life and exceed from money in order to do things, to have experiences. The first experience is survival, right? You want to survive. You want to feed yourself, shelter, health, whatever. And then the other is other experiences that you want to have, whether that's putting your kids to college, or going on a trip, or buying baseball cards, or going to a show, right? We're all working in order to, exchanging hours of our life in order to have other experiences, okay? And so, it stands to reason that if I go to work to acquire money, to have experiences, but then die,

• 51:41Speaker 02

  I just wasted hours of my life, right? Like I just, why did I go to work for money that I'm never going to use? And so, you know, it quickly set in my head that you want to die with, you want to die, you want to use all your resources before you die. And I'm not the first person to think about this. Economists call it full life cycle hypothesis, or full life cycle theory. Basically, rational people will aim to die with zero, okay? And then the other part of it that I stuck into it that I was thinking about is that, you know, as I've seen people in my life, my dad, my grandmother, and other people age, right? And then when you look at the data, your ability to extract positive life experiences, you know, have experiences, declines as you age.

• 52:24Speaker 02

  Like I tell people, the memory of playing football right now is greater than actually playing football right now for me, right? And so, that will happen with all experiences, including sex. Like you'll be at a certain age, be like, wow, that was a great time back in my 30s. But trying to have sex then might be like, I don't want to break a hip, I don't want to, you know what I mean? Like whatever it is. And so, not only is there, hey, you should aim to spend all your money before you die, you have to get the, the timing right. Right? You know, you don't want to go heliskiing at 90. You probably want to go heliskiing between, you know, 30 and 50, right? And I'm just using extreme examples, right? And there's always outliers, so I don't want to get into that. But I'm just saying, on the whole,

• 53:08Speaker 02

  right, there's a season for you to do different activities. And making sure that you allocate your resources properly within each season is important. You know, and I've been saying it a lot lately. I said, "Life is like Texas." Right? You got to get the order right in order to get the most points, right? In order to get the most, the fullest life. So anybody who's like, "Hey, I'm gonna wait till I'm 90 to go hike Kilimanjaro, and then go to see Petersburg and do whatever," they got it wrong, right? That money was meant to be spent now, and a lot of people actually do that. And what happens is, what you see is, those who save, save too much. People's net worth keep growing into their 70s and 80s, and it's like, what are they waiting for?

• 53:48Anthony Pompliano?

  Right? For sure. In that sense, I think you recently turned 50 years old, right? What's left on kind of your bucket list? Or what are the things that you say, "Hey, you know, these are the things that I want to do in the next 10 years"?

• 54:03Speaker 02

  Right. So I try and break them up in categories. And I actually have a beta, version one of like, "Bucket your life", because each time bucket matters. You know, one of the things is like, as writing this book and thinking about it, like, "Holy shit, I need to listen to the same things I'm talking about," right? Like, not be the fat coach on the sidelines, like, you know what I mean? Like, who's all out of shape, you know? But it's the coach. That was me, right? And so I'm like, "Wait a minute, I spend time with my daughters, these are the activities I want to do, etc. These are the places I want to travel, things I want to investigate, projects I want to work on, charities I want to help, or problems I want to solve." You know, I've kind of put them into those buckets.

• 54:47Speaker 02

  And so, travel was way number one for me, which is really... You know, nobody's gonna play the violin for me. I'm super lucky, but I'm like, ah, you know what I mean? Like, not being able to travel is a crusher. So now I'm like refocusing on personal relationships, helping people and charities and helping solving problems, you know, research projects and just learning, you know, and loving and keeping in contact with my personal relationships. So it's been a great quiet time to actually do that with family and be forced to be stuck in a house, you know, and being with two teenage girls in a house, it's not easy, but every day I'm like, this is great.

• 55:29Speaker 02

  You know, yeah, we had a blowout battle, screaming and yelling and then crying and then yelling and then whatever, but like, this is great. Like, I'm gonna look back one day and be like, this was the best of times. And so I'm just learning to live in gratitude right now, and then I'm planning when this opens up to really, really travel, like really burn it and travel and, you know, learn other cultures and go to places I haven't been and visit some places that are high on my list that I love.

• 55:57Anthony Pompliano?

  Have your daughters got you on TikTok yet? Have they pulled in any of the dance videos?

• 56:03Speaker 02

  I mean, they're on TikTok, they're doing dance videos. They do not want me on it. They, I used to be a cool dad to them, but now like it embarrasses them. They're like, all my friends follow you on Instagram. I can't stand it. They're always saying something, you know, now teenage are like anything I do wrong or that's like not cool or my girlfriend's boobs are showing or whatever, they're like, ah, you know, your dad's girlfriend, you know, whatever it is, right? And so they hate me. They hate it. They hate that there's a book coming out and I might be more recognizable. It's just, it annoys them.

• 56:42Anthony Pompliano?

  Well, the worst part is probably all the girls probably say stuff that are their age and then the guys all probably love you, right? They're like, I want to do that stuff.

• 56:51Speaker 02

  Yeah, they don't like it. Like they have, you know, I thought like a lot of their guy friends, they like kind of want to meet me or say hi or whatever. At that very instant, I'm cool. They like it, but it still annoys them. They're like, no, don't come because everybody's gonna want to talk to you. And they want it to be about them. They feel as if I'm ruining their high school experience, you know, and I don't want to ruin their high school experience. You know, it's kind of weird, you know, but. It's the way it is, you know?

• 57:20Anthony Pompliano?

  But we all been in high school and pretty much anything can ruin it, right? Like literally anything could throw it off.

• 57:27Speaker 02

  Yeah, yeah. And so I'm trying not to ruin it. I'm trying to protect them, raise them well, whatever. Probably doing it like 70% wrong, but I'm there. You know what I mean? Like, I'm there.

• 57:39Anthony Pompliano?

  Absolutely. It's not the battle. All right, man. Listen, where do you want people to go? In terms of sending them to either check out the book when it comes out or find out more about what you guys do on the investing side?

• 57:52Speaker 02

  Yeah, I think, I mean, I don't know if our website's been updated for smallventuresusa.com for investing, you know? But that's where, you know, a lot of people are like, who do I talk to? I'm like, you know, they follow the links or whatever. You'll get to the right person to get the deal through. And then die with zero book. DieWithZeroBook.com for the book. But unfortunately, or fortunately maybe, because bookstores are closed right now, and that's a significant portion of book sales, even though, you know, the online isn't making up for the, you know, the amount that's gone from physical sales. But July 28th, it's coming out and you can preorder. And I appreciate it, you know?

• 58:34Speaker 02

  And I think you will appreciate it too, because a lot of people are spending a lot of money, you know, whether it's the state, your insurance, or yourself, to extend your life for three months in a hospital bed with a low quality of life. And I'm like, you know, that's kind of backwards. Take all that money, put it in the good health years, create memories, have those memory dividends with people, and really live a full life and fuck the three months in a hospital bed.

• 59:02Anthony Pompliano?

  I don't remember where I heard this, but I adopted it as a life motto years ago, was anything worth doing is worth overdoing. And if you think through everything that you do in your life, if it's worth doing it, it's absolutely worth overdoing it to some degree.

• 59:17Speaker 02

  Yeah, and I think like living your life to the fullest is definitely one of the things you want to do while you have your health.

• 59:23Anthony Pompliano?

  For sure. I wrap up each conversation with two questions for you and then you get to ask me one. The first is, what is the most important book you've ever read?

• 59:33Speaker 02

  Wow.

• 59:36Speaker 02

  Wow, this is, this is a, I'm gonna tie it, I'm gonna tie it with two.

• 59:44Speaker 02

  The Four Agreements is probably edging out your money or your life. So one is a financial book and one is like holistic approach about life. So The Four Agreements is number one, that's my number one recommended book. And Your Money or Your Life, which kind of started the FIRE movement, you know, financial independence to retire early, I don't know if you've heard of that. But that book completely changed the way I look at money and personally and also professionally. Right, and led to further discoveries and questions, etc. Right, and so, and it, it, it's why I went into trading.

• 1:00:28Speaker 02

  It's my understanding of leverage, you know, not leverage just of money, but leverage of time. Right, when that, when that, when somebody makes a lot of money, all he's doing is like, he's, time is leverage. One minute of my time is like one hour of that guy's time. Right, and we're just exchanging time. And so, that understanding, that concept and how money works allows me to, you know, really, you know,

• 1:00:55Speaker 02

  really, really changed my life. And The Four Agreements is just like, really changed my life.

• 1:01:00Anthony Pompliano?

  Have you ever seen the movie In Time with Justin Timberlake?

• 1:01:04Speaker 02

  Yeah, I thought it was okay, it could have been better, I love the concept though.

• 1:01:08Anthony Pompliano?

  So, I'm, that's basically it, right, it's like the concept was spot on, but the acting was, you know, it was alright.

• 1:01:14Speaker 02

  Yeah, they could have done the story better or whatever, but the concept was great, it was great, I was really looking forward to it. And, you know, Your Money or Your Life, it's a little didactic because it's really trying to hammer in the point and change, when you're trying to change people's cultural views and what they've already, or, you know, what they've accepted via osmosis and everything around them, you have to be didactic, you have to be repetitive because they won't get it, so, but still, that book is a must, must, must, must, must, must read.

• 1:01:43Anthony Pompliano?

  Awesome, um, Aliens, believer or non-believer in some sort of intelligent life out there?

• 1:01:51Speaker 02

  I think, I think the answer is believer, but we'll never know.

• 1:02:00Speaker 02

  So, I mean, if something's, you know, a billion light years away, you're not gonna know, right? Even if it's 500 light years away, you're just never gonna know, right? Like, and so, yes, I have this kind of almost religious belief that it just, you know, the numbers just are so large that it must be. But, you know, the idea that we're gonna get in contact or capture, even if they were sending signals, it's like, you know, very, very, very, very unlikely you're gonna grab them or get them, except. So, I don't know, I guess that's an unsatisfying answer.

• 1:02:41Anthony Pompliano?

  Yeah, it's good. I actually almost forgot to ask you, thoughts on Bitcoin? That was another one that everyone wants to know. What were your thoughts on Bitcoin?

• 1:02:49Speaker 02

  I'm kind of ambivalent. I'm actually long at Proxy, because I'm long this company. I bought the stock, very teedy company called Silvergate Partners, or Silvergate Capital, SI, on New York Stock Exchange. They actually had good results today, a release.

• 1:03:07Anthony Pompliano?

  That's Silvergate Bank? Is that what it is?

• 1:03:10Speaker 02

  Yeah, yeah, that's the one, SI. Simple as SI. And they basically have a platform where they're one of the niche players where they provide lending to institutions, trading Bitcoin, clearing, and they're now starting this product to offer them some leverage, because they need to have both Bitcoin and cash on every exchange that they trade. And so, you know, banks are all about capital efficiency, so the leveraged product may work. And so, I'm like, you know, I'd rather be long the shovel maker than the gold miner. You know what I mean? Like, I think Bitcoin can, you know, I'm not, I was once long it, went up to 17,000, and then I ran some calculations, and I was like, well, it'd be impossible to redo the blockchain, right?

• 1:03:56Speaker 02

  And then I did some calculations, and I was like, well, if you bought this amount of money, right? If you spent this amount of money on servers, you could rehash the block, right? At this value, right, in this time. And that just kind of gave me a sense of this thing is overvalued, when, back then, when it was 17,000, right? And you know, it's an adoption phenomenon. It's a marketing thing is will people keep and believe in Bitcoin and will it grow? And I, I really don't know. You know, I hear arguments for yes, I hear arguments for no. But in the meanwhile, I'm like, well, this is a bank. These guys are trading it. It's not going to get hurt. It's very conservative. It's making

• 1:04:41Speaker 02

  revenues off of Bitcoin, you know, not by, you know, if the price goes up, that means more people are trading, they'll make more money. If it falls, it goes up and down, they make more money because people are trading it. If he based business, I'd rather be on that side and be long it. So I'm quasi long Bitcoin, you know?

• 1:04:58Anthony Pompliano?

  Yeah. Look, and especially if it's a, hey, I don't know. It's actually a pretty, um, pretty rational position to take. Alan, the CEO of Silvergate's been, uh, been on the podcast and, uh, is, you know, credit to him. I think back in like 2013 or 14, he really saw the opportunity and, and kind of moved that entire bank into let's be the, the player here. Um, cause the large banks won't be and it's proved to be a, a pretty good decision for them, obviously.

• 1:05:24Speaker 02

  Yeah, it's great. And it's like, you know, it's like, it doesn't matter what it is. If it's Beanie Babies, right? Like it's like, I don't care where Beanie Babies are going. I'm still making money servicing the Beanie Baby crap, right? Until, until it goes away or, you know, it stays around. And so I, I, I like, I like what he's done. He's visionary. Maybe he's a believer in the price will go up and that would be great for his business. But they are a niche player where other people just don't want to deal with all the KYC and the bullshit and they don't want to get involved into it. Right? And so I, I think it's great.

• 1:05:56Anthony Pompliano?

  Yeah, it makes sense. What, uh, what one question do you have for me to, to finish this up?

• 1:06:01Speaker 02

  Um, why did you get into podcasting and do you still like it?

• 1:06:06Anthony Pompliano?

  Uh, I told the story on the podcast before, but, uh, I had, um, I had some kids come to me who basically were like, hey, you should do a podcast. And, uh, I, I'd listened to a couple of podcasts, but knew nothing that went into it. Uh, literally was like, I, my mom always said, you know, I had the face for radio giving me a hard time, but, uh, Why the hell would I do this? And we recorded a couple of episodes and released it. And it was immediately, people started listening. I was like, wait a second, you're telling me that I can go sit in a room, talk to somebody, just have a microphone there and hit publish and like everyone else gets excited. And I don't have to like sit and write and then like edit, you know, my writing and like all of the work that goes into publishing, like much more um kind of higher production stuff, uh especially when you're writing.

• 1:06:51Anthony Pompliano?

  And so for whatever reason, I was just like, well, let's do another one. Let's do another one. And uh here we are. I think we've done like over 280 of them. Uh in about a year and a half or so. And um I enjoy it because it's it's two things for me. And I always said like, it's very selfish, right? So first is you and I probably wouldn't talk unless I had the podcast. So there there's this element of like, I get to meet a lot of people who are kind of tangentially related to what I do. And obviously I learn from them. I get to ask them questions and and all of that. So that's super valuable to me. And then the second thing is uh as I've started to do this, I just began to realize like you could go on CNBC and all of the ideas you have in your head, they may give you five minutes, right? And that would be like a long segment.

• 1:07:36Anthony Pompliano?

  Or it might give you two. And and it's not, you know, to pick on CNBC specifically, it's just all of those uh kind of television formats. They're very hitch driven around kind of salacious comments. Uh it's very, you know, cutting up a lot of different segments. And so you still have a lot of time to explain your ideas. And uh and I think these kind of longer form podcasts really allow people to share their ideas in their words without being interrupted and explain what they mean, right? It's one thing for you to say, hey, you know, I think that the money printing is not a good situation. Okay, what does that mean? And when you explain it, you get the context and it ends up being much more valuable content, I think, for people uh who really are just trying to learn. So I I enjoy it and uh I I'll keep doing it until one day I wake up and it's not fun. And then I'll just be like, all right, guys, that that was a good run. See ya.

• 1:08:21Speaker 02

  Yeah, yeah. Well, that's great. That's great. And I I totally agree with you. Like I've I've been on CNBC before and it's just like what blurb headline thing can you get out? And you you when you don't explain and give context, like you know, people twist it, right? Like I'm against the money printing. Oh, he's against helping Americans, you know? No.

• 1:08:42Speaker 02

  So yeah, I get it. And I appreciate you and the other podcasters for doing this, getting out there. It's super entrepreneurial and it's awesome.

• 1:08:50Anthony Pompliano?

  For sure. So we will, um, we'll, we'll send people over to, uh, to go check out the book and I appreciate you doing this.

• 1:08:55Speaker 02

  Yeah, anytime. Hope everybody got value out of it.