329: Jon Najarian On Wall Street and Bitcoin

Jon ‘DRJ’ Najarian was linebacker for the Chicago Bears before he turned to another kind of contact sport – trading on the Chicago Board Options Exchange. He became a member of the CBOE, NYSE, CME and CBOT and worked as a floor trader for some 25 years. He built and sold a number of companies, including a $750 million exit to E*TRADE in September 2016. In this conversation, we discuss the physicality of the old school trading pits, how Wall Street has evolved over the years, Robinhood, Davey Day Trader, why Jon and his brother are building a company to educate investors, and how much of his portfolio is currently in Bitcoin. =============================== The BTSE exchange allows you to trade confidently. They are the leader in futures, which means they are pioneering Futures 2.0. With BTSE, you can trade next-level futures: freely choose and combine your margin and settlement assets and trade with up to 100x leverage. You can also sign up for a BTSE Elite membership that gives you unbeatable discounts and bonuses across the BTSE Exchange, OTC platform, and more. Go to BTSE.com/pomp to get a 10% discount on your BTSE Elite membership. =============================== The Helium Hotspot is a new product that enables the people, not the telcos, to own and operate a wireless network in their city for Internet of Things devices. You can literally earn crypto for helping to build the network and providing connectivity to Internet of Things devices sending small bits of data. Join the movement and get your Helium Hotspot today with $50 off using the code POMP at helium.com. =============================== Pomp writes a daily letter to over 50,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at https://www.pompletter.com

• 0:00Speaker 00

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. John "Dr. J." Najarian was linebacker for the Chicago Bears before he turned to another kind of contact sport, trading on the Chicago Board Options Exchange. He became a member of the CBOE, NYSE, CME, and CBOT and worked as a floor trader for some 25 years. John has built and sold a number of companies, including a $750 million exit to E-Trade in September 2016. In this conversation, we discuss the physicality of the old-school trading pits, how Wall

• 0:42Speaker 00

  Street has evolved over the years, Robinhood, DayV Day Trader, why John and his brother are building a company to educate investors, and how much of his portfolio is currently in Bitcoin. I really enjoyed this conversation with John, and I hope you do as well. Before we get into the episode though, I want to quickly talk about our sponsors. The first is Bitsy. The Bitsy Exchange allows you to trade confidently. They are the leader in futures, which means they are pioneering futures 2.0. With Bitsy, you can trade next-level futures. You are free to choose and combine your margin and settlement assets and trade with up to 100x leverage. You can sign up for a Bitsy Elite Membership that gives you unbeatable discounts and bonuses across the Bitsy Exchange, OTC platform, and more.

• 1:26Speaker 00

  Go to bitsy.com/pomp. Again, B-T-S-E, Bitsy, B-T-S-E.com/pomp. Bitsy.com/pomp to get a 10% discount on your Bitsy Elite Membership. The second sponsor is Helium. The Helium Hotspot is a new product that enables the people, not the telcos, to own and operate a wireless network in their city for Internet of Things devices. I've got one in my apartment. The telcos have forever held a monopoly on any sort of wireless network. Now, the Helium Hotspot is helping to democratize that ownership. You can literally earn crypto for helping to build the network and providing connectivity to Internet of Things devices by sending

• 2:10Speaker 00

  Small bits of data. So join the movement today. Get your helium hotspot and help to break up the telcos monopoly. You can be a part of the democratized decentralized solution. Your helium hotspot comes with $50 off if you use the code POMP at helium.com. H E L I U M dot com. Helium.com. Use code POMP and you'll get 50 bucks off. Lastly, don't forget that I write a daily letter to over 50,000 investors about business, technology, and finance. I break down complex topics into easy to understand language while sharing my personal opinion on various aspects of each industry. You can subscribe at pompletter.com. pompletter.com. All right, let's get into this

• 2:54Speaker 00

  episode with John. I hope you guys enjoy this one. 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. All right, guys. Bang, bang. I have the man, the myth, the legend himself. What's going on, John?

• 3:30Speaker 01

  I love the bang, bang, man. That's, that's my thing, too.

• 3:34Speaker 00

  Just for the record, John's the first person to ever start the podcast off with finger guns. We're already into the finger guns. We're ready to rock and roll.

• 3:43Speaker 00

  So for, for like the one person watching this who doesn't know who you are, never seen you on television, let's go through your background. Kind of where, where'd you grow up and what'd you do before you got into financial markets?

• 3:54Speaker 01

  Sure. Um, POMP, I, I grew up in the Bay Area, San Francisco, lived there till I was 12, loved it. We used to go down to Hay, Dash, Berry and drive around and check out the freaks, as we used to call them. That was before I became politically correct. Now I would just call them hippies. Um, but we always had a good time. Uh, and you know, it was never a heckling thing or anything else. We would just, my dad's a doctor, and so that's where I took my nickname from, Dr. J, from my dad.

• 4:31Speaker 01

  More or less to honor him. But when he was a surgeon in San Francisco and an assistant chief of surgery there, he would have people fly in from all over the world to learn various surgical techniques. Because he was one of the first people to successfully do liver transplants, pancreas transplants, things like that. So he would teach people from all over the world and since San Francisco and Haight-Ashbury was kind of top of mind for a lot of people, they'd say, hey, can we go down and see the hippies?

• 5:11Speaker 01

  So my dad would say, boys, get in the car, we're going down, but make sure you roll up the windows because those guys have lice.

• 5:21Speaker 01

  But, so we would drive down to Haight-Ashbury and, you know, it would look exactly like you think it would look. A bunch of wonderful Victorian homes, lots of men and women with long hair, big glasses, day or night, you know, big sunglasses and, you know, monster bell-bottom jeans and things like that, exactly what you think it would look like, that is what it looked like. And San Francisco, you know, the city by the bay, I loved it. I, I went back there briefly to Berkeley for school, to the University of California, because we moved when I was 12 to Minneapolis.

• 6:05Speaker 01

  My dad took a job as chief of surgery at the University of Minnesota. So we moved to Minneapolis, loved that because there was snow and season changes. San Francisco, it's pretty much the same year round. It's, you know, it's cold and foggy in the morning and then it gets cold and foggy again in the evening, but in between it could be sunny or rainy. And it was just a fun city. I loved growing up there. And then when we went to Minnesota, like I say, we had very harsh changes in the season from fall to all of a sudden 60 below, you know, a month later.

• 6:47Speaker 01

  So the season change was a big deal, but that was also fun. And I got to go to

• 6:55Speaker 01

  Let's see, high school with Prince and a bunch of these famous musicians. They weren't famous in high school. They were just interesting fellows. Because I got bussed into an mostly black high school. So I went from Lily White, San Francisco, Lily White Junior High School, to all of a sudden being bussed into an all-black high school. And it was a little, not scary, but you know, you were always on edge. So I bet I know how a lot of African-Americans or blacks feel when they go to an all-white high school. You know, they probably are on edge too.

• 7:38Speaker 01

  But some of my greatest friends and friendships were made, you know, from that. And back then, yeah, we had gangs, but the gangs didn't shoot you, Pop. You know, the gangs, worst-case scenario, a gang would beat you up. Now, you didn't want that, but you know, I played football, so all the guys on the team were my friends, but they weren't going to walk me home every day. So I had to frequently run from the football, you know, from showering up after football practice, kind of looking both ways and making a dash to get to a safer neighborhood. Because if I got caught in the wrong neighborhood,

• 8:21Speaker 01

  again, I think it builds kind of a empathy for somebody who would be the opposite. You know, like I say, for an African-American or Asian kid that was in an all-white school where they didn't feel so comfortable walking through that neighborhood either. But, like I say, it ended up working out great. I have enjoyed both the friendships and the experience of not being in the high school that I thought I would have been in.

• 8:55Speaker 00

  Yeah, that's awesome. And then what did you guys do for, for college? Cause you have a, a twin brother. Correct? You guys are twins?

• 9:01Speaker 01

  No.

• 9:02Speaker 00

  No.

• 9:02Speaker 01

  Everybody thinks that though. And not everybody, but a lot of people say, oh, you must be twins. Nope. Six years apart.

• 9:11Speaker 00

  Really?

• 9:12Speaker 01

  Yep. Pete is the youngest of four boys. I am the oldest. Um, so I'm six years older than Pete, four years older than Paul and two years older than Dave.

• 9:23Speaker 00

  So you, you don't know this, but I am the oldest of five boys.

• 9:27Speaker 01

  Ah.

• 9:28Speaker 00

  I, I am eight years older than the youngest and everyone in between is two years apart. So, uh, very similar. We just have one more than you do. What are the two brothers in the middle doing?

• 9:41Speaker 01

  Um, one brother, David, uh, he sold a bunch of, uh, fast food franchises that he started with my brother, Paul. Um, and now he runs, uh, um, a health club that he owns. He owns this big building, you know, that's got a health club. So that's been challenging, of course, during COVID because by law they had to stay shuttered.

• 10:04Speaker 01

  And he has, uh, several ice cream parlors and he kills it with the ice cream. Uh, he's only open in the summer, but he absolutely kills it. You know, they're scooping out these gigantic, you know, scoops of ice cream and people come from all over the city to his ice cream shops because they over serve so much. And, uh, the other one sadly passed away of ALS. Uh, so that was really a crappy thing. Uh, my brother, Paul passed away now five years ago, um, of ALS.

• 10:41Speaker 00

  Got it. Sorry to hear that.

• 10:43Speaker 01

  Yeah.

• 10:44Speaker 00

  Why?

• 10:45Speaker 01

  Our wife.

• 10:46Speaker 00

  Yeah, absolutely. And, and why did you and, uh, the youngest, why the kind of bookends, if you will, want to go into the financial markets, whereas, uh, your other brothers want more into entrepreneurship?

• 10:59Speaker 01

  Well, um, I did it because I was playing football for the Bears. Um, and that's what brought me to Chicago. Um, I was not a, a high draft choice or anything like that. I was a free agent. Which meant that, um, just for the folks that don't know, um, if you're not drafted, you can go to any team that offers you a contract. So I had three teams that offered me a serious contract, discussions with a couple other teams. Um, I ended up picking the Bears because I thought, you know what? They have a really crappy team.

• 11:37Speaker 01

  No, but you know, think about it. It's just like, do you, do you wanna, i- if you're gonna join, um, and try to beat somebody out for a job? Um, do you wanna go to Apple where everybody's a killer? You know, where all those engineers are killers? Or do you wanna go to a shitty?

• 11:59Speaker 01

  Place where you're, you might be as good as any of the engineers they have. You know, that was my, that was how I did it, Pomp. With, uh, you know, weighing, do I wanna be? Um, you know, do I wanna try to play for New England? You know, where they're Super Bowl champ kinda things? Or do I wanna go to a team where they haven't been anywhere forever? They suck and the linebackers aren't that good. That was my position linebacker. And so, and that's, you know, both cockiness on my part. Me thinking, oh, I'm better than those professionals, which I wasn't. Um, but I do, do think that you'd wanna pick a place where you think you might be able to make the team.

• 12:43Speaker 01

  If you're drafted, you don't get that choice. You just, you know, you go. And if, if you're a high round draft pick, you're gonna make it. You know, nobody cuts their first round pick until the second year or third year. But, you know, uh, as far as free agent, it was great. Brought me to Chicago. Um, so when I learned the ropes, my brother Pete, who was, like I say, six years younger, he was still in high school. So, you know, cause I came right after college. He's still in high school. He's deciding where he's gonna go play college football. And after he was an All-American and a big star at University of Minnesota,

• 13:26Speaker 01

  he went down and he played for Seattle, the Seahawks. Then he played for the Vikings, then he played for Tampa Bay, then he played for the Raiders. And each time in the offseason, he'd come and visit me here in Chicago. And he'd always say, "God, it really has a cool energy, a cool vibe down here on the floor." And I said, "Yeah, it does. You know, that's why I love it. That's why, you know, 3,000 men and women on the floor, that's why they love it." But it's also, I'm sure you see this all the time. There are probably people who are so into blockchain and crypto or digital assets,

• 14:08Speaker 01

  but they're into it because they want to make a lot of money. You're into it because you can make money, but also you're into it because you love it. There are probably, every year, give or take 700 to 1,000 people that leave the floor. And they don't leave because they retired with a big pile of money. You know, they left because they couldn't hack it, they couldn't make it. So that churn just stays there all the time. So of the 3,000 people, 2,000 of them are probably happy and 1,000 of them are probably churning and leaving and coming back and, you know, trying to get refunded and all that stuff.

• 14:49Speaker 01

  So, you know, if you are somebody who finds that fun and exciting and, you know, that's why, Pomp, I'm always pumping my fist on TV or, you know, shooting the guns or whatever, bang, bang! Because, you know, it just, I enjoy what I do. And I know you do, because, you know, we've talked and I've seen the people that, you know, come to your events and things like that, the people that just love, they actually love the idea, not just the idea of getting rich. The idea of getting rich, that's really an easy sell. But it's a little harder to get excited about actually doing this every day and making

• 15:33Speaker 01

  this, you know, your vocation.

• 15:36Speaker 00

  Yeah, it's one of these weird things where when you talk to people who seem to be successful and you ask them, why do you do what you do? Majority of the people I've talked to will answer some form or fashion of, I enjoy the process of this, right? It, the product or kind of the end result takes care of itself, right? It's kind of a football way of thinking of like, hey, look, we got to do every single play and as long as everyone does their job, every offensive play is drawn up to be a touchdown and every defensive play is drawn up to stop them for a loss, right? And it really just comes down to kind of the process and execution, all this kind of stuff. And so it feels like that people who end up being successful, they enjoy that process and it's the process or kind of showing up every single day for year after year after year. That's what ultimately leads them to the success.

• 16:20Speaker 00

  And to your point, the people who either don't enjoy it, can't, you know, hack it or whatever it is, they're the ones who kind of wash out and go to find other things to do in them, right?

• 16:29Speaker 01

  Yep, that's exactly right. And, and you can't really, some people will kind of sell their soul to be an investment banker or, you know, some other job in finance that their heart isn't really in it and they do it for a couple of years, maybe they make just enough, but they're always looking for a way out. And I was never looking for a way out. I was looking to stay in as long as I could, but you know, the, the game changes and you know, every financial edge that people think they have goes away eventually. Um, and you have to develop something new. Um, that doesn't mean you can't own, you know, Bitcoin or Ethereum or Microsoft or

• 17:14Speaker 01

  Apple forever. You could, but if you're trying to make a, you know, a living day by day, trading in and out, you know, and all of a sudden computer algorithms are taking all the edge away. It's a little tougher.

• 17:30Speaker 00

  For sure. So when you ended up deciding to leave the NFL, where, what did you do at first? Did you go right to the trading pits or kind of what was that journey like? And what was kind of the impetus for going into that environment?

• 17:44Speaker 01

  Sure. It's a, it is a very good question because A, I didn't leave of my own volition. They fired me. They cut me. And you know, it was one of those deals, Pomp, where literally they come to your door, knock on the door and I know I'm going to get cut tomorrow. I know I'm going to get cut and they'd leave because they couldn't face that.

• 18:10Speaker 01

  And when it happened to me, I, I was pretty sure that I was going to be cut. But I was still in enough denial, you know, the river in Egypt where I thought, well, you know, a couple of these other guys left, maybe they need an extra linebacker to hang around before Singletary, you know, what if he hurts himself or whatever? He never did. The guy was like unstoppable. And that's the guy that beat me out, Mike Singletary. So he did a great job. He was very good guy too. So it would be easy to hate the guy that, you know, that takes the job from you.

• 18:55Speaker 01

  But this guy was just such a good guy. You couldn't hate him. And I've always been a guy also that's pretty honest with myself as far as my abilities. So when I meet somebody who is better than me, could be in trading, you know, I've met guys that are better than me. It could be in skiing and it happened to be in football, you know, and I was just like, yeah, I get it. He's better than me. And the coach was like, yeah, we're sorry. You know, not everybody can make it. You know how it is, John, blah, blah, blah. And I'm like, hey, man, I appreciate the opportunity. Thank you.

• 19:33Speaker 00

  Yeah, that's awesome. And I mean, look, to be completely frank, right? Playing linebacker for the Chicago Bears, no matter how long it was, is one amazing, and then two, to hang out and meet with guys like Mike Singletary and kind of all of the players that went through that organization is obviously a life experience a lot of people won't have, right?

• 19:55Speaker 01

  Yeah, I agree. And luckily, I had one bad injury in high school and nothing after that. So, you know, I've seen guys with their shoulders cut, their knees cut, their hands. My brother Pete has broken every finger at least once, and his thumbs twice. So yeah, there's a lot of injuries and things that guys get that I luckily avoided.

• 20:22Speaker 00

  Yeah, that's awesome. And so help me understand, as you decide, okay, I'm gonna go kind of and build a career in finance and trading, did you already know people and kind of have a backup plan? Was it like, okay, I got cut, and now all of a sudden I gotta go figure this out? Like, what happened kind of post getting cut from the NFL that eventually launched the career in finance?

• 20:45Speaker 01

  Again, that's a great question, because since my dad was a doctor, and he was pretty famous, I mean, in his field, he was, you know, like, at, if not the zenith, you know, right up there on the top of the mountain. He developed a bunch of anti-rejection drugs for people when they got transplants and things like that. So he was very famous, and he's the chief of surgery at the University of Minnesota for like 38 years. So, the choices were, I could go up there, but I could stay there, but I'd always be in his shadow, I

• 21:25Speaker 01

  thought. And no shame in that, but I wanted to kind of forge my own path. And so my agent was putting some of his representative players, because he had hockey players, skiers, baseball players, that kind of stuff. I mean, famous people like Rod Carew and Alan Page, they were his clients. So he was putting some of those guys on the trading floor because they had what he thought was necessary to be successful in trading. They were disciplined.

• 22:02Speaker 01

  They were excitable. They were physical. And he thought those kinds of things would make you a good trader. Now, he knew, of course, you needed to learn all the other stuff, too. But if you didn't have those things, some people were putting like professional blackjack players on the floor. Because if you can count cards, you can be a pretty good trader. And I agree, that's a good skill. I knew a guy that could count three decks of cards and, you know, beat you on virtually every hand. And he was banned. He had to, you know, when he'd go to Vegas or Reno, he'd have to go in a wig and things like that.

• 22:46Speaker 01

  I mean, you know, he was kicked out of more casinos. But he was not good in the pit, even though he was a good trader, because he wasn't aggressive enough. And so, like I say, my agent was looking for guys that were aggressive, that could learn the other stuff. Some of these guys were like professional chess players, you know, grandmasters in chess. And you might imagine that you and I probably know guys, Pom, that are like that. They tend not to be terribly aggressive. You know, it's all up here. And so they'd put on a position and they'd walk away.

• 23:27Speaker 01

  And, you know, hopefully they put on enough edge that they could make money from putting that position on. But they couldn't stand down there in the pit and grind it out like the rest of us could because they weren't aggressive enough. It's a physical, you know, back then, anyway, it was very physical. You couldn't hit people, but you could throw elbows and things like that. People didn't want you standing in their spot. So being bigger, I'm still about 6'2" and 215. Back then, I was 6'2", maybe 250. So I was a bigger guy, you know, broader shoulders and things.

• 24:10Speaker 01

  So you could intimidate people. And that was very valuable in the pit.

• 24:18Speaker 00

  And John, explain that a little bit more because there's a lot of people listening who have no idea how the pits worked, especially back then. And when you're talking about it being more physical and kind of the jockeying for positions and things like that, like unpack that a little bit and explain what was happening.

• 24:33Speaker 01

  Sure. Well, so you're in the trading pit. And a pit is an octagon, just like, you know, the UFC fights in. Except they have steps that go up, usually like three or four feet in the air. Each step is, let's say, you know, six or eight inches. So there might be four steps up, four steps down into the middle of the pit. And each ring, if you will, of that pit is about 18 inches wide. So you could stand on that, but it's not exactly like standing on a two by four. There's enough room that you can kind of walk around on it.

• 25:17Speaker 01

  But you could also fall off of it. And, you know, so sometimes when traders were standing in their spot, if all of a sudden a trade was happening on the other side of the pit, everybody would rush towards that side of the pit. Sold, sold, sold, sold. And they're stumbling down the steps and things as they go over to that side of the pit. So the pits are set up so that from the top ring of the pit, you can see all the trading desks around the floor.

• 25:51Speaker 01

  If you're down in the middle of the pit, you can't even see out of the pit. You're just looking at guys' bellies and things like that. So the more active trader you are, you're at the top. And the less active you are, or the newer you are, you're down at the bottom. So the guys at the bottom tended to hold positions for a long time. The guys that want to buy, sell, buy, sell all day long, they're at the top. And the brokers want to stand next to the guy that's actively trading. Because by rule, they can't trade against their own paper. So if I have an order from a customer, I'm calling that paper. I cannot take the other side of this trade.

• 26:35Speaker 01

  I have to open outcry it into the pit and say 55 calls. And the pit screams back, you know, one to a quarter. And I can say, I'll pay 115. And then they might say, add a quarter, add a quarter, add a quarter. And then if I can't buy them at 115 and the order is not held, meaning I can pay any price I want. I might say 100 and 100, I bought 200, I'm out. I'm 115 bid for 200 more, or whatever. So that trade would happen with those two guys. They'd all write each other's names down on the pit, on the card, rather. The sellers would write down who they sold to, the buyer would write who he bought from.

• 27:19Speaker 01

  And then they'd turn in their cards. So all of this got processed at the end of the day, when I started. Then, as trading became faster and faster and faster, it eventually moved to handheld computers. Then it moved to, you know, at almost light speed to laptops. And then you don't need traders on the floor anymore. Now you can make that market pop from New York, or from Philly, or from Macau. It doesn't matter. So you don't need to be in the pits anymore. So the pits went from very profitable places to be. Where, you know, if there's 3,000 traders down there.

• 28:05Speaker 01

  You know, they might be taking a couple billion dollars home every year. And all of a sudden, you know, most of that gets taken by high-frequency guys. And now the traders on the floor these days, you know, if you're still on the floor, maybe you make a hundred, 150,000 bucks instead of a couple million or 10 million, whatever you could make before. And you multiply that times, you know, 2,000 or 3,000. So you get where, you know, the, the big change came from. Now, there's almost no one on trading floors. It's all by machine.

• 28:40Speaker 00

  Yeah, and, and it's always struck me, uh, at the New York Stock Exchange floor, for example, there's still some people walking around. You look at the old-school photos compared to today, and it's, you know, night and day difference. It almost feels like the people actually on the floor are almost there as more of a ceremonies-type thing. Right? Where it, it just feels like we gotta have somebody there. We can't just have servers all over the floor. So, you know, let's, I don't know, we'll put 50 people out there. But, but what are they actually doing, right? Are, are they literally there for more of a ceremonious thing? And they just personally, it's their personal preference to be on the floor and kind of just use their computer on the floor? Or i- is there some purpose other than that?

• 29:15Speaker 01

  Well, like, the New York Stock Exchange, they have kept a couple of carve-outs for the traders on the floor. They see certain information, um, like the end of the day when they say, well, on, on balance, there's 2 billion to buy, or whatever. They see that first. They know it before anybody else. Now, most of them are filling paper, meaning that they're brokers. They're not traders. And that's no disrespect, but that's just what it is. You know, they're, they're not trading. They are brokers. They're filling paper. So they're, um, offering insights and best, you know, I'm gonna try to get you the best price, you know?

• 30:00Speaker 01

  And I've had a relationship with this guy for 10 years. So I think he's great at getting me the best price. Um, and seeing blocks that might come in, getting out of the way and letting it fall a little bit. Then he buys it at a cheaper price for me. That's why they're still there. But most of those traders are brokers. Now, the exception is the, uh, options pits at the, uh, CME.

• 30:28Speaker 01

  They have corn options, bean options, wheat options, all that kind of stuff. You kind of smile and it's like, oh yeah, yeah, I bet they're really act... No, they actually still trade in those pits. They still have traders and brokers. But most of the other pits around the rest of the world, it's really just, like you say, they've negotiated to keep themselves in the mix. So it's not just ceremonial, but there's really not a strong a purpose for them to be there.

• 31:01Speaker 00

  Why have some of the commodity pits survive? So things like corn, etc. Like, why are they still, not only there, but also active, whereas others have kind of gone the way of more electronic trading?

• 31:13Speaker 01

  I think only by mandate. I mean, in other words, if, if the exchange and the members have a deal where they say, "Hey, we want, you know, there to always be some open outcry trading on the floor." That's the only reason it still goes on. Everything else can be done on computer. I'm not saying it's better. Having, for instance, as, when the crap hit the fan in a March pump, and all of a sudden, whether you're trading the S and P's, or whether you're trading in the VIX pit, when things are blowing up, you're better off having everybody getting the information at

• 31:56Speaker 01

  the same time in the pit, than having everybody in offices upstairs and they're all suspicious. Because that's what it is. They're all suspicious then. They see an order coming in and they don't know who it is. When it comes in on the floor and they can all see it at the same time, they know that's coming in from JP Morgan. They know that's coming in from BlackRock or whatever. But when it's upstairs, they, you know, it's silent. It's kind of like, you know, alien in space, can anybody hear you scream? I mean, when a trade happens in the ether... There's nothing, there's no information at all. It's just kinda like the trade comes in, people interact with it.

• 32:40Speaker 01

  You don't know how big it was. You don't know, you know, if it fell into a guy's lap over on, you know, that you think is a great trader or a guy that's a shit trader. Um, and it falls into weak hands. And all of a sudden, you know, the market moves just a little bit and everybody's selling. Because this guy is scrambling to sell out. Rather than if it falls into somebody with strong hands. Meaning they've probably got hundreds of millions behind them or whatever. And they hold it for that 10 cent loss and all of a sudden it click, click, click, click, click. Runs to the upside and they're making dollars. Off of this, you know, huge trade they took down. You know, it makes a difference when you see it in the pit, it makes a difference.

• 33:24Speaker 01

  When you can't see it, it's just silent. And that's when there's a lack of trust.

• 33:31Speaker 00

  Things that I've noticed is people who started out in the pits or got exposed to that world when they were kinda really rocking and rolling. They have a very different understanding of markets and market structure. And it really seems like they had access to and understand the importance of intangible type information, right? So what I mean is, you know, good traders versus bad traders. Who's actually sending in that market order? Who does that person represent from a trading perspective? How much capital is behind them versus not, right? All that type of stuff. And it feels like now that we've kind of gone into this electronic world, the people who have that kinda historical context and information, they actually understand markets better, right? They do have some level of advantage. Um, do you see the same thing in your experience?

• 34:13Speaker 00

  Or do you feel like maybe that's just coming from somebody who I wasn't around? When, um, the pits were really kinda rocking and rolling like that? And so it's more of like a nostalgia thing more so than anything else?

• 34:25Speaker 01

  Well, um, I think it's, uh, it's definitely a skill, uh, pit trading. That's different, um, and doesn't necessarily translate that well to the, uh, uh, you know, screen based trading. Um, because just like you say, um, if there's a Schwab broker on that side of the pit. And, uh, you know, TD broker on this side, Merrill and, you know, Lehman Brothers back in the day, Bear Stearns. Different brokers are representing different paper. So, you know, coming through Schwab, it's retail. You know, it's even though they might try to mask it occasionally with, you know, a big trader

• 35:07Speaker 01

  might come in through something that they call a beard, you know, coming through as a retail trade, you know by the size and how aggressive both the trade and the broker are, that it's something different. So in other words, we all want to trade with somebody who's slower than us, who doesn't have as much access to information. And that differential pump back in the day was, you know, Grand Canyon, right? Because it really was, it was huge. You would have guys that, you know, had news flows that were faster, guys that, you know,

• 35:49Speaker 01

  we would get, you know, long before news reading algorithms and things like that. There were people that, you know, got tipped off by somebody when news was about to break, as illegal as that might sound. Now, nobody's faster than the algorithms. The algorithm is going to see keywords that somebody has programmed for their buy and sell programs to react to. And you see it and it happens like that. There's no way to get in front of everything from the employment data to the ISM to Michigan, you know, consumer confidence, you know, whatever it is.

• 36:31Speaker 01

  So to your point, there were definitely people that had that edge, whether it was informational edge or whether it was the ability to read, you know, to know the difference between a Schwab order on this side of the pit and an E-Trade order over there and, you know, that JP Morgan, you know, order that's coming in for a hedge fund. And you don't want to be on the other side of Bobby Axelrod. So when Bobby's coming in and he wants to buy a lot of something, you don't want to be on that ticket. You want to be the last guy on that ticket. So for instance,

• 37:13Speaker 01

  that's what Warren Buffett has done forever. Warren Buffett owns General Reinsurance. And General Re is always the last one to write that reinsurance ticket. You know, everybody else has piled on there and then the last 200 mil, the last 500 mil, whatever it is, is Warren Buffett. You know, it's him doing that. Because everybody else is taking the risk, he gets to look. And you know, if that thing's not getting funded properly, those other guys are screwed. He's not screwed. So anyway, to your point,

• 37:52Speaker 01

  the democratization that has occurred with information flows over Twitter, which, you know, there's not a lot of things Twitter's good for, quite frankly. But one of the things that Twitter is good for is information that's almost instantaneous. So if you want to see something, if you don't have a high-speed data feed that costs you 20,000 bucks a month, Twitter's the next best thing. You gotta know who to follow and how to get it. But it's there. So if you're looking for certain keywords and things like that, you will find them faster on Twitter than you will doing a Google search or anything else.

• 38:35Speaker 01

  But do you really want to try to trade against, you know, basically guys that are much, much faster than you? And my answer is no. I want to follow those guys and coat tail those guys. That's why Pete and I always call what we do following Smart Money. But I don't want to try to compete with those guys. They're always going to be faster than me unless I want to spend 100,000 bucks a month and then have an IT staff, you know, the size of Goldman's or Virtus or DRW or any of these guys. Unless you can do that, you're not going to be as fast as them.

• 39:19Speaker 00

  I think it makes a ton of sense. Help me understand what you guys are doing with Market Rebellion. So you had it up on the Zoom background and you guys have been talking about it a lot online and everything. What is Market Rebellion and what are you guys doing with it?

• 39:31Speaker 01

  Happy to. We are, over at Market Rebellion, we're basically using the same sort of techniques that we used to train people years ago that were our own traders. So in other words, when you came down to the floor, and as I said, if you're a chess grandmaster, or if you're a card counter from Vegas and you learn some of the basics of floor trading, you can start to, you know, understand how to make markets. But you still have to be big, or at least aggressive, and then you have to know how to lay off risk and all these other things, and know how to cut your losses, let the winners run.

• 40:17Speaker 01

  So, we trained hundreds of our own traders over the years. And once they got good enough, they'd always leave. You know, as they, it used to be kind of a joke, they'd say Lincoln freed slaves. But, you know, when you're a trader backing another trader, there's no greater compliment than that trader leaving you and going off on his own or her own. Because that means you really trained them, they know what they're doing. And none of us, at least I never did, try to tie anybody up to a contract and say, "No, you gotta work for me for three years," you know.

• 40:57Speaker 01

  That's crazy. But, some people did it.

• 41:03Speaker 01

  Most of the time, what traders would do when we were training a trader is, "I would put up money for you, Pop," and I'd put up, say, 50 grand. And I'd say, "Okay, you know, you've been working with us, you understand what you're doing. I have confidence in you. Here's 50 grand. Go out there and make us some money." And you'd go into the pit and start trading. And if you started losing money really fast, we'd cut you off. But, if, you know, since we trained you, we taught you what to look for and all that kind of stuff, you probably started making money, and all of a sudden I give you more and more money. Now eventually I've given you a quarter of a million dollars, and you're making money. Once you've made me my quarter million back...

• 41:49Speaker 01

  I'm probably on a like a 60 40 my way split on that. So when you make $200,000, you don't get 200,000. I get 120, you get 80 kind of thing. Once we get to you've paid me my 200 back. Um, now I'm like, okay, pump. Um, I'll do a deal with you where it's 60 40 your way. And you're like, okay, and now you're really grinding hard. And then you're making money and I say, okay, now it's 70 30 your way. Um, and then eventually you leave because you're going to say, I want to make all the money for me. And I'm like, yeah, you should.

• 42:30Speaker 01

  Um, so you're out there trading those what when you say, what is market rebellion? We took all the same, uh, training that we used for our traders and we basically systematized it, put it online and people can go through it chapter by chapter and learn. Here's how you manage risk. Here's how you cut losses. Here's how you take profits because you gotta be pulling profits off the table just as aggressively as you're cutting losses. And then here are a bunch of spreads. Here's a bunch of different ways you can, um, make more money than just straight out scalping. So market rebellion is our version of what we used to give our traders.

• 43:15Speaker 01

  And, um, we have basic, intermediate, advanced. We've got coaches. We've got mentors, you know, depending on how much time somebody's got. They might just learn at night because you know, it's, it's just a distance learning product. They can log on anytime they want. Watch it for 20 minutes, go put the kids to bed, watch it again, whatever. They've got to pass a, a test every chapter to get through it. And that's not so we, we don't get any additional money, but that's to make sure that you know what you think you know before you move on. Uh, because otherwise, you know, you, you could end up getting in trouble instead of making money.

• 43:58Speaker 00

  Yeah, absolutely. And so it feels a lot like, you know, regardless of the assets, trading for the most part, right? A lot of the things you're talking about is very systematic, right? There's things around understanding the market structure, understanding risk, understanding when to take profits off, understanding options, you know, all this type of stuff. And do you feel like investors in general, not just ones who go through market rebellion, but just investors in general are kind of waking up to this world of now there's the ability with everything fractional shares, the zero cost trading, like more and more people are saying, hey, look, I want to go play in the financial markets and there's more access, but they are seeking out that type of education? Or are you still have a fear that there's so

• 44:41Speaker 00

  many people going into the markets that just don't have the knowledge really necessary to set them up for success?

• 44:48Speaker 01

  Well, I see both. And quite frankly, through one of the main things that you kind of identified indirectly, which is Robinhood, you know, one of the free trading place. And, you know, I admit, when it first, when I first started to see a lot of the flow from the Robinhood type traders, I was somewhat dismissive of. But especially in light of COVID, I've seen a lot of smart young men, and I imagine women, that are doing smart trades. And this isn't rocket

• 45:27Speaker 01

  science. You know, if it was, I wouldn't be doing it. It's trading, like I say, is addictive, it's fun. It's especially fun when you're, when you know enough how to not lose a lot, because that's what it's all about. It's not about making a lot, it's about not losing a lot. Because then, when you have the experience, just as you know, obviously, now you can lay into bigger and bigger trades and feel more confident about making money. So for instance, Robinhood, well, our business has doubled every month of this COVID.

• 46:12Speaker 01

  And I say that not because Pete and John are so great. And we've got a great staff of men and women that work with us. But literally, we have doubled in March, in April, in May, and in June. Double the size of the business. And I think, Pop, it's because, you know, I'm not on TV more now than I was then. I'm on less. But I do broadcast a lot. I mean, I put out my own podcasts. I do various, you know, reaches to the public through, you know, Instagram and all the rest. But I don't think that's it. I think that augments it.

• 46:55Speaker 01

  But I think there's a lot of people that are at home, that have time. And an awful lot of them are really well versed in how to use the Internet. So Robin Hood just being an app, because it's not really a trading platform. It's an app. And again, that's not meant to be derogate. You know, I'm not meaning to denigrate them when I say that. But when you have a bunch of people that are used to, you know, typing with their thumbs and checking out their phone all the time, and they know how to, you know, follow people on Twitter and on Instagram and on Snapchat and on TikTok even, you know, and they're getting all this information.

• 47:38Speaker 01

  Many of those things I just named, you can get information damn near instantaneous. And so you've got a guy like Davy Day Trader Global, right? You know, you've got Portnoy. And a lot of these people probably watch him and listen to him. And the guy should be a freaking comedian. I mean, he is. And he's a pretty good trader too, by the way. I'm not just saying that, you know, watching what he does and how he does it. I'd say he's a pretty good little trader. And he's self-taught, from what I can tell. And I love the way he goes after Buffett, and me probably, I haven't heard that, but, you know, I could easily see him, you know, I've got the tie on, because I just came off of CNBC.

• 48:22Speaker 01

  But, you know, he hates the suits. He's always talking about, "Oh, his freaking suits, they think they know everything." Some 94-year-old guy in Omaha knows that I don't know, nothing. You know, "I know numbers, I know, you know, airline seats, I know this, I know that." You know, he's just, I love him. But I think a lot of that entices the folks that are at home, and that are watching him, and they're kind of chuckling, but then they're kind of also seeing, "Wow." You know, "He's talking about Carnival, and it's up $2 today." You know, "That's 20% for a $10 stock," or whatever. "Wonder if I could make some money trading in Robinhood."

• 49:05Speaker 01

  So they go in there, and like you say, fractional shares. "Oh, you don't have enough for 100 shares? Here's 20 shares, here's 1 share." And they kind of learn it, and they're getting the hang of it. And, you know, I'm sure there are some spectacular losses, because there always are. Like I said, in a professional environment, like down on the trading floor, we would turn over almost a third every year. And most of it isn't people that are leaving because they got rich. You know, they're leaving because they couldn't act, couldn't take the pressure, couldn't take the losses, lost a backer, whatever it might be, you know, they couldn't do it.

• 49:46Speaker 01

  So, to think that you probably have about the same from people at home, home gamers, as we call them, you know, people that are trying to trade and make a living. But it's also, one of the things that I've observed forever, Tom, is that...

• 50:06Speaker 01

  If I want to make, you know, a hundred grand a year, 200 grand a year, I could do it all in out of bed.

• 50:14Speaker 01

  Because I've done it for a while, so it's not hard, you know, and think about that. If I want to make 200 grand a year, there are 256 trading days in a year. So I only have to net, you know, let's say, what, 700, 800 bucks a day? If you can't do that, sitting in front of your computer all day, moving the odds in your favor, you know, you're at a blackjack table. It's the way we always tell our traders, you're at a blackjack table.

• 50:44Speaker 01

  You don't have to accept, you don't have to bet. You don't have to put even, you know, you don't have to empty anything. You can just sit there and sit there and say, I'm waiting, I'm waiting, I'm waiting. And all of a sudden, you've been counting the shoe and the dealer's got a bunch of face cards in there. And you're like, okay, I'm in. Buying 500 shares of Carnival, I'm buying 500 shares of Apple, I'm buying 1,000 shares of Facebook, whatever it is. And all of a sudden, those things, because of the setup you think you saw that is actually working now, all of a sudden, that 1,000 shares of Facebook, Facebook moves a point and a half. You just made 1,500 bucks.

• 51:25Speaker 01

  So now the deal is, are you smart enough or are you too greedy? You only needed to make 700 a day to get to your 200,000, you know, quarter of a million goal. So take that freaking money off the table, or at least take most of it off the table. Carnival's starting to move for you or against you, cut it or add to it or whatever. But again, keep in mind, you were there to make your 700 or 1,000 bucks. You don't have to push it to 3,000 or 4,000. If you can do that, you're talking about 600,000, 800,000 a year. But if your goal was 200, and now you're pushing it,

• 52:08Speaker 01

  and maybe you're out on the ragged edge because you're leveraged, you know, you're in margin, and God knows in your world, Pop. You know, you could be, you know, getting 50 to one leverage on, you know, various digital assets and on the options on those digital assets, which is, you know, risk on crack. You know, you could do all that, but is that the right thing? In other words, I think there are plenty of people who can do it. And there's a lot of people who get enticed into or fool themselves into thinking, yeah, I'm day-to-day trader global, you know, 5,000 a day. If I do 5,000 a day, I'm making a million a year.

• 52:52Speaker 01

  And all of a sudden, you know, the market reverses and they're sitting there and they're going, oh, my God, you know, I was up 1,500 and I pushed for five and now I'm down 3,000. That means I've got to make, you know, four days worth of 700 just to get back to break even. As long as they're disciplined, they can win in this game. But there will be a lot of them that will lose because they don't have the discipline.

• 53:19Speaker 00

  I think it's a great way to look at it. It's just breaking it down into kind of day by day. And again, going back to kind of how we started the conversation about just showing up every day, right, in and out and understanding and believing in and enjoying that process. You and your brother and a number of people around you have become very big, or maybe not big, but have become more excited about Bitcoin and digital assets and have started to actually make investments in the space. So maybe just talk us through kind of how you guys evaluate Bitcoin in the crypto markets in light of kind of the rest of your portfolio and then what you guys have done in the crypto space.

• 53:56Speaker 01

  Sure. Well, I've probably got somewhere between and on a, on a monthly basis, because I don't trade that often. I'm not like in and out, in and out during the day like you, Pop. But on a monthly basis, I probably have between 5 and 10% in digital assets. And almost all of it's Bitcoin.

• 54:21Speaker 01

  A little Ethereum, but mostly Bitcoin.

• 54:26Speaker 01

  I've got a little Litecoin, a little Stellar. But really, I'm about Bitcoin and I'm there because guys like yourself, guys like Peter Brigger over at Fortress, who really got me.

• 54:43Speaker 01

  You know psyched about it. Um, Max Kaiser always likes to tell me, oh yeah, I told John to buy it this. I love you, Max, but I don't remember you telling me to buy it when it was freaking forty. You probably told a bunch of people, but you didn't tell me. I would have loved it if you did. Um, but uh, I love Max. I mean, he's a funny dude and he, you know, randomly pop, he will put out a tweet that says, I told all these guys and he'll list like ten of us, uh, to buy Bitcoin at forty bucks or whatever. And I'm like, okay, whatever. I wish you did because if you did, I'd be rich.

• 55:25Speaker 01

  Um, but I first got involved at about three hundred, realized I didn't know what the hell I was doing in it. Um, didn't get involved again until it was closer to seventeen hundred. So I missed an awful lot of that. Um, and I didn't sell when it got over eighteen or nineteen thousand. I didn't liquidate. Um, I would have looked like a genius if I did, uh, but then we all would. Um, I, right now, uh, Pete and I put an investment down in Voyager. Um, you know, a crypto broker run by a friend of ours, uh, Steve Erlich.

• 56:06Speaker 01

  And there were a bunch of smart investors that got into this latest round too. Um, so I wanted to get in because I think these other investors are smart. I think Steve is doing, building the business in a good way. And, you know, I've met so many, so for instance, I, I know a lady that runs the Winkle Boss Family Office. Great lady, smart woman, um, Stanford grad. I think she's a chaos mathematician. Um, and, uh, you know, I think what the Winkle Vi did, buying into the, uh, uh, you know, buying into Bitcoin in a big way. Um, and getting involved in the space, creating Gemini and all that.

• 56:52Speaker 01

  This is all good stuff for the space, the way I look at it. You know, Novogratz, Peter Brigger and these guys, Fortress, Pantera, you know, all of these different groups that have come in in bigger and bigger ways. I don't think they've wrecked it. I think they've made it better. And I think that it'll, you know, it's still just got a foothold that's this big compared to everything else, compared to gold, compared to stocks, compared to futures. But I, I think that people will, you know, and again, nothing better than COVID pump for people to realize.

• 57:36Speaker 01

  Now, it hasn't hurt the dollar yet, but eventually what we're doing, printing money is gonna hurt the dollar. And it's gonna hurt my kids. It's gonna hurt, you know, for years out into the future, all this printing of additional capital. And that's what I love about digital assets like Bitcoin. You know, I love that it's, it would really have to be a mutually assured destruction for us to have more Bitcoins than Satoshi Nakamoto Satoshi, and whoever that group or that whatever is, had created as, as the, the top level of the amount of Bitcoins out there.

• 58:20Speaker 01

  You know, it would take a majority of us that own coins to say, yeah, let's, let's make more. And I don't think that's in the cards.

• 58:31Speaker 00

  For sure. And I guess part of this, and what's really interesting is, we kind of have two forces at work here, right? You have kind of the bullishness and the market growth and the innovation that's happening in Bitcoin and the crypto markets. And that by itself, I think, gets, you know, a good amount of people excited. But then you bring up the other point, which is, and then you have the traditional world, absolutely in chaos, right? And yes, the stock market is hitting all time highs. And yeah, there's people who basically saying, hey, look, I know the world is Basically burning, but I'm making money, right? So there's kind of this cognitive dissonance, if you will. But at the same time, it's only going up, right?

• 59:11Speaker 00

  As Portnoy would say, because of the structural thing of we're just injecting trillions of dollars into the market. So of course you're going to get the inflation of asset prices. Do you feel like the damage to the dollar? Is that more something short term you're worried about? Medium term, long term? Like, how do you think about when that damage actually kind of comes? And it sounds like you're of the belief that Bitcoin would be kind of a beneficiary of some of that kind of collateral damage to some degree?

• 59:39Speaker 01

  Yeah, well, and you'd be much more eloquent speaker about the topic. But here's some of the things that I have heard from folks like you and from you that I think play into that. So longer term, yes, I think it does impact the dollar, not in the short term. Short term, we're a safe haven, just like Japan is a safe haven.

• 1:00:05Speaker 01

  Japan still prints more money than we do.

• 1:00:09Speaker 01

  You know, borrows a ton. And yet people haven't abandoned their currency. It's just the opposite because such a country of savers and so forth.

• 1:00:21Speaker 01

  I think one of the things that probably hits Bitcoin in a positive way, pump beyond, you know, that we're printing money and it's making other currencies worth less. Again, like Buffett says, not worthless, worth less. Is that I think we're likely to see people get frustrated by things, you know, could be Biden supporters, could be Trump supporters. It could be BLM. It could be a whole bunch of things that have caused people to say, you know what? I don't know if I want, especially like here in Chicago, where are you right now, Pop? Are you in New York?

• 1:01:04Speaker 00

  I am, yep, in New York.

• 1:01:06Speaker 01

  Okay, so New York and Chicago, they burned our cities. And they, you know, I'm not saying, I'm not blaming the cops, but I'm saying the cops were told to stand down, I believe, in both cities. And then they burned up and down Lexington and Madison, and they were obviously down on Fifth Avenue and destroying things in New York, where I love to spend time, destroying things here in Chicago, up and down Michigan Avenue. And we know that wasn't, you know, peaceful protesters. That was more or less career criminals that just used it as cover for them to do what they do. But I think it woke a lot of people up,

• 1:01:48Speaker 01

  and a lot of people realized that there's gonna be a lot of stress on the system. And maybe they want to get somewhere other than where we are.

• 1:02:02Speaker 01

  And the most portable wealth on the planet is Bitcoin.

• 1:02:07Speaker 01

  It is the most portable because all you'd have to do is have it up here. You don't have to, back in the day before there was Bitcoin, Pop, it would be, I'd hear this from my friends in Israel, or I'd hear it from friends in the Middle East, and they'd tell me, "I bought a bunch of American Express Traveler's checks. Remember the serial number on the first and the last, and I burned them." Burned them. Why? Because now I can go anywhere and then walk into the American Express office in Geneva, Switzerland, and say, "Here's my American Express Traveler's checks. Here's the first, here's the last." You know, "They got destroyed, give me my money." And they would.

• 1:02:53Speaker 01

  But you're giving up, you know, 3% or 4% to do that trade.

• 1:02:59Speaker 01

  And meanwhile, in Bitcoin...

• 1:03:02Speaker 01

  You can be dumping back and forth from Bitcoin to stablecoin and doing all kinds of things while you're trading these other currencies and jumping back and forth into a stablecoin or whatever without even taking the market risk of the Bitcoin and move anywhere you want with your money, with your wealth. And that I view as a constant demand feature. The more people that figure that out, and I know you and everybody who's been a long time Bitcoin or digital asset proponent, they have said forever, "Yeah, you know, how do you take my Bitcoin?" You know, "You can't. You can't take my..." But you can

• 1:03:45Speaker 01

  screw with my bank account. You can basically put an exit tax on me if I want to leave America or, you know, leave the country and give up my citizenship and go over to Switzerland and go to Italy or go to wherever. But if you have Bitcoin, they can't do that. I mean, you could literally go anywhere on the planet. No, I'm not saying that there's lots of places better than America, but I'm saying it's a nice insurance policy to have something that is portable wealth. And it doesn't have to be like when my great-grandfather

• 1:04:22Speaker 01

  came here because of a genocide of Armenians. He came here with bags filled with gold. He wasn't that rich, but you know, obviously, gold back then versus what it is now, he would have been crazy rich because gold wasn't seventeen or eighteen hundred dollars an ounce. But he had literally bags of gold, heavy to transport, you know, pretty significant risk of theft and all the rest. Meanwhile, Bitcoin, nobody knows you have it. I loved when I would travel back and forth in Europe over the last couple of years and I'd be at the border and the guy would say, "Anything to declare?" You know, "Over ten thousand

• 1:05:07Speaker 01

  in currency or whatever?" And I'm like, "Nope."

• 1:05:11Speaker 01

  And yet, you got whatever, I mean, you know, could be tens of millions of dollars in Bitcoin, and nobody's the wise.

• 1:05:20Speaker 00

  Just words in your brain. That's how it works. One of the things is, it feels like Wall Street's waking up to a lot of this, right? And so there's the kind of qualitative argument, how I describe why Bitcoin's important. You just did a great job of articulating it, and you don't give yourself enough credit for understanding kind of the intricacies of it. But then there's also more and more investors who seem to say, hey, look, wait a second. This is a tradable asset as well. So we've seen, you know, Renaissance Technologies obviously putting one of their filings that they're now looking at Bitcoin. I can't actually remember if it was spot trading or kind of options-type trading. We've seen Paul Tudor Jones come out and say he's put about 2% of his portfolio into Bitcoin.

• 1:06:01Speaker 00

  And so we're kind of like now, okay, there's more kind of cover-your-ass going on, right? There's more people with big names and great track records that are starting to actually get exposure to Bitcoin. Do you think that that really wakes up Wall Street and we're going to see this like massive capital inflow? Or do you think it's still something that just slowly but surely over time, more and more people will opt into it? It's just going to take, you know, three, four, or five years to happen?

• 1:06:31Speaker 01

  And I don't have that crystal ball, so I don't know. But I do know that all those people you named, as well as a friend of mine, Mark Lazarie, Mark is a distressed asset buyer. That's what he does. So he finds distressed assets and buys them. Now, he's not saying that Bitcoin is a distressed asset. He's saying, I put, I think he said 2% to 5% of his net worth, and it's in the billions, into digital assets, Bitcoin being the most prominent, I think.

• 1:07:07Speaker 01

  And I think you'll see more and more of those folks doing that. I mean, I gotta believe Don Paulson, who was such a proponent of gold and, you know, famously caught the financial crisis and out on the right side of that. And then he got into gold. And since then, he's kind of, you know, sort of said, now I'm shutting it down. I'm just gonna run my family office. I guarantee you, he gets into Bitcoin if he isn't already. But I think a lot of them will want to keep it quiet as they're getting in. Because, you know, they'll run it. I don't mean that they'll run it in terms of how it operates. I mean,

• 1:07:50Speaker 01

  they'll push the price too far, too fast. So for the exact same guys that know that you don't want Goldman knowing that you're buying, you know, FireEye, or Uber, or Microsoft, because they'll run it ahead of you, those same guys are sitting there thinking, I really like this play in Bitcoin here, but I'm not gonna say a lot about it until I got enough of this stuff. Because, you know, we both know that blocks of it stand out. And so they've got to stay under the radar with these accumulations. And forever, I had guys

• 1:08:33Speaker 01

  coming to me, two years ago, I probably had five to 10 calls a week from people telling me, oh, I want to buy 200 million in Bitcoin. And I'd say, no, you don't. And they'd say, oh, yeah, I do. I'll give you proof of funds and all that. And as soon as I'd ask for it, then they didn't have it. You know, same old crap. And it was when Bitcoin was falling from 18 on down to 35 or 3200, whatever. And it seemed like, more than anything, they were trying to hold the price level by telling people like me that they had it to buy. So I would go to people, and then these, you know, that had large quantities, and these

• 1:09:18Speaker 01

  people would say, okay, give me proof of funds, I'll do 50 million, or I'll do 100 million with them, and blah, blah, blah. And these were at $4,000 and $5,000 per Bitcoin, USD to Bitcoin. And

• 1:09:34Speaker 01

  I did, I think, two transactions out of at least 100. And most of them were complete BS. And I think they were just trying to, you know, manipulate the market or whatever. But same is true when it's, you know, stabilized and hanging near 10,000 now. The people are probably not wanting to see it jump to 12 and 15 and 20 again too fast because they're going to try to accumulate it at a level.

• 1:10:02Speaker 00

  I think that's exactly what's happening. You, you understand that the people who want to buy a lot don't want the price to go up, right?

• 1:10:12Speaker 01

  Oh, yeah.

• 1:10:13Speaker 00

  And that's what we're seeing. Before I wrap up, I always ask people the same two questions and then you're going to get to ask me one to finish it. The first is, what is the most important book that you've ever read?

• 1:10:28Speaker 01

  That is a tough one. Um.

• 1:10:35Speaker 01

  One of the most important would be Ayn Rand.

• 1:10:43Speaker 01

  And I don't mean the fountain head. But John Galt, I just love, you know, I know not everybody's a big fan of libertarianism. And you can be, you know, I know Alan Greenspan was. And Atlas Shrugged is one of, you know, those books that sort of changed my outlook. I mean, for a long time, Pomp, I would start the book and couldn't finish it. And some of that is because I'm dyslexic, so I don't enjoy reading. But I enjoy books.

• 1:11:23Speaker 01

  So now, all I do, as far as books, I read newspapers because, you know, I have to or, you know, online stuff because I have to. But as far as a book, now I listen to them all on tape. So I love it because I can do it when I'm walking, when I'm working out, when I'm flying in a plane, you know, driving a long drive or whatever. I love it. So that was my best way to get through Atlas Shrugged. Because it is, you know, a lot to get through. But I, I loved a lot of what she wrote. Um, and how passionate she was about it and that Greenspan was such a big fan.

• 1:12:03Speaker 01

  And then after going through it twice now, I'd say that's probably the book for me that I would say.

• 1:12:10Speaker 00

  That, that's a great answer and I'm a, uh, almost 100% audiobooks as well. So, uh, so I'm there with you. Uh, the second question's more fun. Aliens believer or non-believer?

• 1:12:21Speaker 01

  Believer.

• 1:12:23Speaker 00

  Why?

• 1:12:25Speaker 01

  Um, so I, I believed, uh, that I saw, um, some activity that I could not describe. Um, any other way except to say it was alien. Because, um, I was coming out of an artist's studio in college and, um, because a girl was screaming outside. So I was coming to her rescue, being a, a gallant young lad. So I came out and she's pointing up in the sky like this. And it was about two in the morning. Um, nobody else was around.

• 1:13:05Speaker 01

  And I looked up at what she was pointing at and it was, you know, as many have said, a cigar shaped object. Um, that was lit up and I couldn't tell how far away it was. And I'm sitting there looking at it going, what in the hell is that? And we're both just staring at it. She wasn't screaming anymore. Um, And I said, how long's it been there? And she said, it's been there for like three or four minutes. It's just sitting there. And it appeared to be over a building that was about maybe an eighth of a mile to a quarter of a mile away. Not too far.

• 1:13:44Speaker 01

  And we couldn't tell how big it was from that distance. But it had a steady glow and not lights going around it or anything, just a steady glow. And wasn't a balloon or anything else. It stayed at that exact spot. And then all of a sudden, Pop, it just went, you know, like back and forth like this and then boom, straight up and gone. And so we were both just. What the hell was that? Now, flash forward to a Joe Rogan podcast, not as popular as Pop, but you know, right up there. So I'm listening to this Navy pilot.

• 1:14:25Speaker 01

  Talk about seeing the same Tic Tac shaped thing, you know, cigar Tic Tac, whatever. Out over the ocean about, I think, four or 500 miles off the coast of California. And he's talking about, he's pinging it on radar and it's not there. And you know, his co-pilot, you know, the guy behind him, the weapons officer or whatever behind him's going, I got nothing on it, skipper. And he's going, he says, all of a sudden, then it starts jamming them. And he said, in the Rogan podcast, I believe, he said, jamming us is an act of war. He said, if you're jamming, you know, our planes when they're out there to defend an aircraft carrier.

• 1:15:08Speaker 01

  It was just a routine trip that he is out there. And he says, if you're actively jamming us, he said, that's an act of war. So he says, we go close to this thing now, because he said, I'm, you know, thousands of feet above it at this point. But he said, we go right down at it. And he said, it is down on the wa- just above the water and there's something beneath the water. That he says, "Looks like it might be controlling it," or something. And it's a big thing, you know, like the size of a submarine or bigger, under the water. And all of a sudden, this little tic-tac-y thing that he's got video of it, but he's got no radar back from it. It's being blocked, or absorbed, or whatever.

• 1:15:51Speaker 01

  All of a sudden, he says, "This thing just goes at not the speed of light, but faster than anything." He says that any object that we know that can fly cannot move this fast. And he said, "It just goes straight up and gone." And he and the co-pilot are just like, "What the hell was that?" And he gets back to the ship. And they say, "You were chasing UFOs again, huh, huh, Captain?" And he goes, "Yep." And they go, "You see any?" And he throws them the VHS tape, and he goes, "You tell me." And the Navy has released that tape.

• 1:16:30Speaker 00

  It's scary. It is scary.

• 1:16:32Speaker 01

  There is something out there, my friend.

• 1:16:35Speaker 00

  Listen, I, uh, I'm a believer. I don't know if they've come here, if they're not, but there's things that we can't explain, and the maths suggest that, uh, that they're out there somewhere.

• 1:16:45Speaker 01

  Yeah. Well, so then my question to you would be, have you seen them?

• 1:16:51Speaker 00

  No, so I, I, I've never, uh, never seen aliens. The reason why I asked the question is, uh...

• 1:16:57Speaker 01

  Again, by the way, I haven't seen aliens.

• 1:16:59Speaker 00

  Yeah.

• 1:17:00Speaker 01

  I've seen what I think is evidence of a ship, or a vehicle of some sort, but I can't explain how it's got there, or how it moves.

• 1:17:09Speaker 00

  Yeah, and, and the reason actually why I came up with the question, this is now almost two years ago, was I was laying in bed one day, and I literally was thinking, "Do aliens have pets?" Which is a weird question to, to think about. But if you think if somebody came here, they'd be like, "Wait a second. So the big animals have smaller animals on leashes and that live with them, right? And all this stuff, and like, we just think of them as pets. But does that mean that there's like a multi-species alien, you know, kind of, uh, civilization out there? And they've literally, some of the aliens... are kind of in charge or more intelligent and they've got pets of you know other things started just thinking about that like we have no clue we literally have no clue and and so you

• 1:17:51Speaker 00

  just like you could get lost thinking about all this stuff and one of it's just fun right two is it's kind of this like intellectual curiosity exercise but it just does feel like uh we'd be pretty selfish to think that we're here alone

• 1:18:06Speaker 01

  yeah um and the more you see you know again people credible people like that Navy pilot um he's got a lot more credibility than me and he's seen a lot of weird stuff I'm sure when you're up in the atmosphere as often as those guys are um just like some of the astronauts are now admitting that they've seen stuff up there there's stuff you just can't explain now could there be another explanation for it no but to see it that close and to see him move that fast without a sound again and he said they were putting it even that pilot was saying we had it on infrared nothing

• 1:18:49Speaker 01

  there's no exhaust plume there's nothing coming off of this thing and he's like how the hell is it moving you know

• 1:18:57Speaker 00

  crazy yeah absolutely nuts John where can people find you on the internet and where uh where can they find market rebellion

• 1:19:05Speaker 01

  oh you can go to uh market rebellion.com um and it's just like the name sounds market rebellion dot com forward slash get started that's all of our educational stuff um and and if they uh want to follow me on Twitter just at J O N N A J A R I A N just at John the Jerry

• 1:19:31Speaker 00

  you're a legend my friend thank you so much yeah listen thank you for doing this I I think that you know people get to see on TV every day and and kind of see everything that you're talking about so it's awesome to kind of hear your thoughts both about um you know your background and story but also how you look at Bitcoin and digital assets so thank you so much for taking the time to do this

• 1:19:50Speaker 01

  thanks very much Bob um I appreciate the offer

• 1:19:54Speaker 00

  for sure