OG Crypto Investor SOLD HIS BITCOIN For AI | Avi Felman

Avi Feldman is a former hedge fund manager and host of the 1000x Podcast. In this conversation, we discuss why he sold all of his bitcoin and crypto after nearly a decade in the industry, how he's thinking about the AI trade and what comes after the memory stock boom, why he believes the financialization of everyday life is accelerating, his current positions in biotech, defense, rare earth minerals, and the psychology of trading in volatile markets. ======================== BitcoinIRA http://lp.bitcoinira.com/after-crypto: Save up to 37% in capital gains taxes on your retirement investments. Take 3 minutes to open your account & get connected to a team of IRA specialists that will guide you through every step of the process. Go to lp.bitcoinira.com/after-crypto http://lp.bitcoinira.com/after-crypto to win up to $4,000 in rewards. ======================== Bitget is the world's largest Universal Exchange (UEX), serving over 125 million users with access to over 2M+ crypto tokens, and TradFi markets. Bitget’s Stocks 2.0 brings 500 major equities and ETFs (like Tesla and NVIDIA) directly to your portfolio. Enjoy 1:1 mapping, deep liquidity, and USDT dividend payouts with ultra-low 0.04% fees. Upgrade your portfolio on Bitget.com https://www.bitget.com/ today! ======================== Arch Public is an agentic trading platform that automates the buying and selling of your preferred crypto strategies. Sign up today at https://www.archpublic.com and start your automated trading strategy for free. No catch. No hidden fees. Just smarter trading. ======================== 0:00 - Intro1:03 - Why he sold all his bitcoin & crypto6:52 - The Hyperliquid thesis & the broken social contract20:01 - What would make him buy bitcoin again?21:58 - Strategy + STRC & how to gain an edge in the markets 33:40 - What comes after the memory stock boom?37:58 - Biotech, defense, & rare earth minerals39:29 - Robostrategy, private markets & NAV premiums44:08 - Why index fund returns may be lower going forward55:40 - Contrarian investing & spotting a bubble1:07:44 - Meme stocks, retail & future outlook1:13:25 - The 1000x Podcast

• 0:01Speaker 00

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• 1:30Speaker 04

  Bitcoin is valuable because it exists outside the system. Bitcoin's valuable because if the system makes mistakes, there's an escape hatch. But that only makes sense in a world where the Fed has massive control or the government has massive control over the direction of the economy, which was true for a very long period of time. I mean, basically from the Great Recession up until today, people watched the Fed like a hawk. Today that matters less and it matters less because you're seeing true secular world changing growth in robotics, in AI, in biotech, in defense. Things are genuinely happening. Things are genuinely being built. I mean SpaceX is a great example of this.

• 2:06Speaker 05

  What's going on guys? Today we got a great conversation with Avi Feldman. He's an extremely successful former hedge fund manager and he's the host of the 1000x pod. Avi and I talk about the AI trade, why he doesn't own any Bitcoin right now, what's going on in the crypto industry, how he's thinking about biotech, defense stocks, and then we get into the psychology of a trader and what's been happening in the market with so much volatility, how you can generate an edge, and then what should you be thinking about going forward and how to spot a bubble and maybe when you should sell? All of that and much more in this conversation with Avi Feldman. All right, Avi, you were just telling me something that I think we got to get right into is that you've been in crypto since 2016, but you now own no Bitcoin and it sounds like almost no crypto. You've completely divested. What's going on? Did you just like lose the faith?

• 2:46Speaker 04

  Yeah, it's a, it's something that I've actually been struggling with for a while because I actually made crypto somewhat part of my identity for a period of time. I mean, I graduated university in 2017 and went straight into the industry because I found that there was a tremendous amount of edge. At that time, basically nobody cared about crypto. You talk to your average person on the street, they had no idea what Bitcoin was. I remember when Bitcoin first made into the front page of the Wall Street Journal and everyone was just going, this is incredible. I can't believe it. I can't believe that we've, we've done this, we've won. It's back in 2017 when Bitcoin finally broke its all time highs again. And basically from that moment up until 2025, I've had a significant portion of my investment portfolio in crypto.

• 3:29Speaker 04

  And today, the world is just a very different place than it was in 2017. It's a very different place than the world was in 2020. I mean, when you look back at what happened to Bitcoin in 2020 because of COVID, look, you know as

• 3:41Speaker 05

  Crazy.

• 3:42Speaker 04

  Insane. You know as well as I do, what happened was the entire world shifted online. People didn't have anything to do in the real world. And what was happening is that there was so much liquidity shoved into the markets because of the Fed, because of the government, because they were worried that secular growth in America had ended, that there might be a complete, an utter shutdown of the markets, and they needed to keep people afloat. And so, a huge portion of this idea of crypto, if you really dig into it, what is it? Why is Bitcoin valuable? Bitcoin is valuable because it exists outside the system. Bitcoin's valuable because if the system makes mistakes, there's an escape hatch. You can say if the Fed raises rates incorrectly, or cuts rates incorrectly, stimulates the

• 4:27Speaker 04

  economy too much, inflation runs out of control, there's somewhere for you to go. But that only makes sense in a world where the Fed has massive control, or the government has massive control over the direction of the economy, which was true for a very long period of time. I mean, basically, from the Great Recession up until today, people watched the Fed like a hawk. Today, that matters less. And it matters less because you're seeing true secular world-changing growth in robotics, in AI, in biotech, in defense. Things are genuinely happening, things are genuinely being built. I mean, SpaceX is a great example of this. It's possible in 15 years, we have genuine asteroid mining. It's possible in 20 years, we're going to Mars. I mean, these are advancements that humanity couldn't even have dreamt of 30 years ago.

• 5:12Speaker 04

  And so, the amount of money that is pumped in the system, the irresponsibility of the Fed, or the irresponsibility of government somehow now takes a backseat to the actual future. And that's one of the reasons that I think crypto has been struggling so much, is because we don't have a narrative for it right now. With that being said, at the end of the day, I'm a trader, and I think that there's a price at which Bitcoin makes sense. And the Bitcoin's not going away. I don't think it's going away. I just think at this moment in time, attention is elsewhere. For the foreseeable future, attention will be elsewhere. And so, for me, it just doesn't make a ton of sense to be holding this drag when I can be holding memory stocks, or I can be investing in something that's genuinely going to change the world, right?

• 5:55Speaker 04

  If you have the choice between hedging your bets with Bitcoin, I mean, it used to be... It used to be eighty percent of my portfolio, right? It used to be substantial amount of my holdings versus investing in biotech companies that are now using AI to discover drugs that we could have, again, never dreamed of before and at a faster pace than ever and actually make real money and impact real lives. You kind of have to go with the latter. But that doesn't mean that crypto is dead. It's just changed. It's all of the crypto that I'm invested in now are companies that are using crypto technology. That's what I'm most interested in.

• 6:28Speaker 05

  Like, what's an example?

• 6:29Speaker 04

  So, Hyperliquid is the obvious example, but I'm even looking at things like cards, right, which is a lower cap coin that basically has to do with the trading collectibles and the trading card market, right? That makes revenue. If you look at VVV, which is Eric Voorhees' project, the exact value accrual to the token is debated, but the thing is making money. It's actually pulling in revenue, which is a good product that uses crypto infrastructure to generate revenue. And that's really where we're going, is people have realized now, wait a second, so maybe the vast majority of things that we created, these infrastructure projects, these tokens that pump to the high heavens, they weren't actually useful because they weren't generating any real money.

• 7:14Speaker 04

  And at the end of the day, what you need is, you need users and you need revenues. And so there are a ton of crypto projects out there that are generating revenues. And it's the same way that you go back to the internet bubble, right? People love using this, but it is a very apt comparison. If you think about it, in the beginning, everyone talked about how internet companies were going to take over the world. Then the bubble burst. And then ten years later, nobody was really talking about internet companies. They were just talking about companies, right? Does Facebook make money? Does Google make money? Walmart is benefiting from having an online store. Companies adopted the tech. New companies certainly were built using the basis of the tech, like Netflix, right? Would have never have worked without the internet.

• 7:57Speaker 04

  But people stopped referring to them as internet companies or just tech companies now, right? And that's the sector. And that's what's going to happen at crypto is we're no longer going to have crypto companies. In the same sense, we're going to have fintech companies that use crypto as a backend. I mean, I would classify Hyperliquid as a fintech company. I think tokenization is going to be massive, just because it's better, it's easier, it's simpler, it's faster.

• 8:22Speaker 05

  What is the thesis on Hyperliquid?

• 8:24Speaker 04

  So the thesis on hyperliquid is quite simple. It's that the financialization of the world is here. People are trading everything now. People are trading, people are trading the weather. People are punting on Korean stocks. People are punting on US single, single name equities more than ever. And what you want is you want an easy way to be able to do that. And so the hyperliquid thesis is actually basically the same thesis as the Robin Hood thesis. It's the same thesis as investing in any, in any brokerage that are the Call Street thesis or the polymarket thesis. But I think that the market is big enough that there are going to be multiple winners here that are going to be generating tremendous amounts of value. I think, and this is something we can get into because this is actually very important,

• 9:08Speaker 04

  is my view is that the social contract with the, with America has been broken, with the average, which your average American has been broken. Prior, if you put your money, if you worked for 30 years, you put your money into a pension fund, you could retire, you could get paid out. That doesn't really exist anymore. There are not many pension funds, right? So now the entire crux of the argument is if you work and you invest in your 401k and you put it into the stock market, then you'll be able to retire comfortably. But the reality is that inflation for the average person over the last 30 years has been horrendous. And even if you had all of your earnings put into the stock market, housing prices have run away from you, right? A lot of things have just completely run away from you because the top end, the capital,

• 9:50Speaker 04

  the capital class of which, you know, obviously I don't want to sound like a communist here, but it is, it is true that the capital class has sucked up a tremendous amount of wealth. And they've deployed that into assets and shot, shot the price up. So the social contract in many ways has been broken. So people are searching for ways to escape that, right? They're searching for ways to escape, you know, the permanent underclass, as people call it. And what they're doing is that they're gambling on sports. They're betting on the weather, they're on Call Street, they're on polymarket. And this entire area is just going to grow because I don't, especially with AI. I don't know if I foresee this getting better. I actually potentially foresee it getting worse.

• 10:30Speaker 05

  Now, when we look at sports gambling apps, the prediction markets, I think a lot of folks say, hey, that is some form of speculation, gambling, et cetera. Hyperliquid is the same in your mind? Or it's different? Is it more like the New York Stock Exchange? Or is it more like a sports, you know, sports book?

• 10:47Speaker 04

  It's a combination. And what you're actually seeing is you're actually seeing the New York Stock Exchange and NASDAQ and all these other companies, they're coming closer to the call sheet. They're integrating this, the gambling, they're integrating all that because they realize that's where the world is going. I mean, look, bumping a, three years ago, Wall Street Bets was the biggest subreddit in the world. I mean, the level of activity there was through the roof and that was three years ago. If you remember during COVID, everybody became a day trader because of all, because of the GameStop squeeze and it gave people a taste of what it's like to be on the winning side. And I think that addiction has stayed with us and that's what people are really looking for because

• 11:29Speaker 04

  you're thinking to yourself, if I make a hundred, even if you make a hundred K a year for the next 30 years, that's three million in gross? And how much is a house? How much is like a, how much is a three-bedroom apartment in Manhattan?

• 11:42Speaker 05

  Well, you gotta pay taxes, you gotta live, you gotta do all that stuff. Yeah.

• 11:46Speaker 04

  And, and so what's happening right now is that people are really searching for ways to basically accelerate their growth. And so that's why trading and investing has become a bigger part of everyday people's lives. I mean, again, you go back 30 years, your average person was not trading the stock market. They might be invested, but they're not trading and today they are. And that actually is also a function of there's more opportunity now. There's more opportunity than ever. And that was, that was the beauty of crypto. Is that crypto was a playground for people that were intelligent and smart and could generate edge. It was a playground because at 22 years old, I get into the market and I find that this is a great place to be. Because there's tremendous edge, because not a lot of people are playing in it yet.

• 12:31Speaker 04

  And there's a, there's a way to make money. There's a way to basically fast forward my career as a 22 year old. And that's what people I think are really, they've seen that happen in many different industries over and over and over in the last 10 to 15 years, whether it's, you know, what happened with a bunch of these people in AI in Silicon Valley or in crypto in 2017. And today, what people are thinking to themselves is how do I escape? How do I get there? How do I get to the next level? And so Hyperliquid is capturing that financialization of the world. And I think the tech behind it is, I mean, it's just as a native user of crypto, it's just easier to use than a Robin Hood or Interactive Brokers or any of these other sites. Maybe less so than a Call She. Call She is actually pretty easy to use.

• 13:16Speaker 04

  Polly market's a little bit tougher. And I think that this entire sector is just going to grow. I mean, we're going to see people trade literally everything. I mean, there could be a future in which people are just like betting on what words you say during this podcast. Right? And that market could grow large because if people are like, well, I just got to find something to bet on. You got to, you got to scratch the itch. I mean, that's, that's really, that's really my take. And I think that Hyperliquid obviously makes a ton of money. And so that, that's very valid.

• 13:43Speaker 05

  One of the things that I find interesting is if you look at this like K shaped economy, basically it's the hollowing out of the middle class. When you dig into the data, there are definitely people who are worse off. There, there's a lot of people, right? If you go, you look at the poverty data as an example, in 2025, or excuse me, 2005, give or take, there was about 35 million people who were below the poverty line. Today, 20 years later, all the work that's been done, all this, there's still about 35 million people in America that are estimated to be below that poverty line. So what ends up happening is the poverty rate has come down because more people live in the United States than they did 20 years ago. But the same number of people are still living in poverty.

• 14:23Speaker 05

  Now, at the same time, we've actually seen a lot of people in the middle class be able to ascend in it from a socioeconomic standpoint, and there's mobility to the upside. So what you got is you got this like bifurcation and the middle class went away because some of them got pushed down. Some of them got pulled up, right? And I think that that's even kind of a weird dynamic of that middle ground. How many people do you know that, you know, live a quote unquote middle of, you know, the economic stack lifestyle? There's really not that many. Either you got money and you can go do cool things and, you know, kind of live the life that everyone, you know, dreams of doing, or you don't. And that middle ground doesn't really seem like a thing. Like, I don't know a lot of people, even, you know, seeing online that are like, I only

• 15:07Speaker 05

  go on one vacation per year. It's kind of like, I go on vacation a lot, or I don't go on vacation at all. And I think that that is like a very weird dynamic that just didn't exist 20, 30 years ago.

• 15:19Speaker 04

  Absolutely, and it's actually becoming a social problem now at this point. I mean, I don't know if you saw the elections in New York recently, but the socialist sweep is a direct result of downwardly mobile individuals that are living in New York, that are downwardly mobile being they're doing worse than their parents, and they're voting for socialism because they feel like their social contract has been broken. Now, what I always say to these people is that the best way to get a car in every driveway and a microwave in every kitchen is to allow the capital class to invest, is to allow invention to occur, and to actually encourage success in America, because that's how you get lowered costs for everything. I mean, when you look at quite literally everything that's ever been invented, it gets

• 16:01Speaker 04

  more accessible as time goes on because we figure out better ways to deliver things to people, right? Without, I mean, Amazon has probably lowered costs for, you know, millions and millions and millions of different types of goods because of their logistics system. And now you can get things in two days where 30 years ago, you'd have to wait two years for some of this stuff.

• 16:19Speaker 05

  Well, there's also, there's also the famous chart of like, the private market is driving costs down, and then everything the government's involved in, in terms of education, healthcare, etc., is all, you know, skyrocketing. And so in a weird way, you don't want that. I also think, you know, one of the aspects of society, and I feel like you, you know, obviously pay a lot of attention to the financial markets, but you're very aware, I think, of social trends of some political stuff, etc., is there is something about testosterone.

• 16:48Speaker 05

  In society.

• 16:49Speaker 04

  Yeah.

• 16:49Speaker 05

  And we know that testosterone in general is falling for all men across age groups. And so like that is on one hand, like there's a health component to it, but there's also like the social component to it. But also there's now a lot of studies that are coming out that young women who either are in a relationship, spend time with a lot of other men, et cetera. They actually start to move where they are on the political spectrum.

• 17:14Speaker 04

  Right.

• 17:14Speaker 05

  There are studies that are coming out that if you take a male and you give them external testosterone, they start to shift right on the political spectrum. So you see these like data points and there's no like, kind of like perfect analysis. There's no like, hey, here's the quintessential, you know, study to go look at. But what you start to realize is like, in a very weird way, there's a biological connection to some of the social ramifications through the political process. Right? And the reason I bring that up is because increasingly we know that there are lower marriages or people are waiting longer to get married. They're waiting longer to have children, like all the, again, all of these things that we know of. But when that happens, then you take the like quote, quote, average voter. Okay. They're older. They're less likely to have children.

• 17:59Speaker 05

  They're less likely to have, you know, multiple children. They're less likely to, you know, kind of check all these boxes. They actually have less investment in the future.

• 18:08Speaker 04

  Yeah.

• 18:09Speaker 05

  And so in a weird way, it becomes what can I get now versus what can I wait for in the future? And the statistic that we've been talking about a lot is 89% of boomers or, you know, uh, kind of senior citizens, they are in favor of taxing young people more so they can keep getting their benefits.

• 18:26Speaker 04

  Absolutely.

• 18:27Speaker 05

  But it makes sense, right? Like if you're 70 years old, like of course that's what you believe.

• 18:31Speaker 04

  Of course, of course this is, of course this is happening. Look, I think that you might be asking if you're, if you're listening to this podcast, like why, why are two people that are ostensibly talking about the financial markets discussing social dynamics? And there's actually a very important reason. And the reason that I've started paying attention to politics a lot, I mean, I grew up in Washington DC. I grew up around politics my entire life. It's something that I've always been interested in from a personal level and also somewhat from a professional level, but it's more and more likely to. Impact the markets than ever before. If you're a trader or an investor or anybody that wants to make money in this world, you have to understand what what made you your money and what can stop you from making money. And these trends that you're talking about are the single biggest risk to the future performance of the markets, index funds, single name stocks, literally you name it.

• 19:16Speaker 04

  Socialism and communism, the rise of all of that is the single biggest threat to the markets. And so when I look at investing, I right now, the way that I view the markets is very, is very straightforward. It's we are in a period. We are in an inflection point. The markets are growing faster than ever because of true revolutionary technology that is unfortunately, at the same time, actually taking capital and condensing it within the top, the top 1% even further. Now that doesn't necessarily have to be a bad thing, but social unrest occurs not because of absolute value.

• 19:54Speaker 04

  You might be better off in five years than you are today, but if you look at your neighbor and your neighbor is 10x better off than you, you feel discontent. And so that's why I sent out a tweet the other day that really riled people up. But it was that so, so social inequality or in- income inequality is not a real problem. It's a social problem. Right? Because income inequality doesn't directly lead to the degradation of the people at the bottom half of the K. It doesn't lead to the degradation of their lives. What it does lead to is comparison. And to me, I mean, comparison is, is, is a thief of joy, but that is probably going to end up with at some point as people continue to get wealthy in the stock markets, you're going to see agitation for wealth taxes. You're going to see agitation for potentially at some point seizing seizing capital.

• 20:39Speaker 04

  And this is when I go back to crypto, this is why crypto still has value. This is why at some point I will own crypto again, and I think it's probably important to own. I mean, I own Z cash and a little bit of, and a little bit of Monero as well, because I think that it's important to have these things as a hedge. But this is where, this is where the world is going. And so at the same time that you have these massive secular growth trends in all of these incredible areas, you have this dangerous political trend. And those two things are inevitably going to come to a head. And you have to be prepared. You have to understand what's going on. You have to be paying attention to what's happening in the world of politics. So you can start to think to yourself, well, okay. Maybe we were, maybe last year I thought we were five years off. Now we're two years off.

• 21:23Speaker 04

  I mean, with the elections in New York, maybe 2028 looks different, right? And so that's, that's really why I focus on this kind of stuff and I, and I think about it.

• 21:31Speaker 05

  What has to be true for you to buy Bitcoin again?

• 21:34Speaker 04

  It's a good question. Well, right now it's a flows issue. Right now it's that Michael's, I mean, this morning when I checked stretched at 76 stretch being the Bitcoin savings account that Michael Saylor has set up for himself and, and for you, the investor.

• 21:52Speaker 04

  It's not looking good. And people are afraid to touch Bitcoin. I mean, I came a little bit of my background is that I used to be the portfolio manager of a hedge fund called Block Tower, which was an institutional crypto fund. And then I moved over to actually start the crypto and alternative assets business with a partner named Joe Nager, under a $50 billion credit fund called Golden Tree. Sirius Shop, they got into crypto in 2022 when I came over. Basically because they thought the crypto is going to be world changing tech. And fast forward four years, when I talk to my old colleagues or when I talk to people from the traditional world of finance, they're just worried about Saylor.

• 22:35Speaker 04

  They're worried about, they're worried about two things. They're worried about quantum and they're worried about Saylor. And then the third thing is that there's no narrative to drive purchase of Bitcoin. That's honestly lesser than what's, what's happening right now, which is people are kind of chucking out. So what I need to see specifically is I need to see the Saylor problem solved. I need to see the quantum problem solved. And I need to see liquidity or I need to see the Fed acting in a way that would make me worried about increasing inflation. I would need to see injection into the injection to the economy. And right now there is a ton of liquidity. But there's also real growth and people are making real money and that's I think the biggest

• 23:18Speaker 04

  the biggest difference. So with Bitcoin specifically, I'm wait, I mean, maybe I'll buy it. If we get like a puke out, if we trade 40K, I'll probably get back, get back in, but until then I'm waiting for these three things.

• 23:29Speaker 05

  Do you think that uh, strategy and uh, stretch, their preferred equity are sustainable? Or are you worried that there could be some implosion?

• 23:40Speaker 04

  So the, the different, people compare it to Luna, it can't be a Luna. And the reason that it can't be a Luna is because there's, in Luna, there was, I'll tell you, I'll tell you a story. When I was, when I first came to Golden Tree, it was basically the first week that Luna, like that Luna really started de-pegging. And one of the partners at the firm wakes up one day and calls me and says, hey Avi, I really think we should buy some, some Luna here or U S T or Luna, it's down 75%. I said, you can't buy it. Like you just, you can't buy this thing. It's going to go to zero. He goes, that makes no sense. I've been trading markets for 30 years. I've never seen an asset go down 75% and not bounce.

• 24:26Speaker 04

  Said, you don't understand, there's a mechanism here. And the mechanism was you could buy U S T and turn it into Luna. And as long as Luna kept going down, there, there was a continuous arb to just print infinite Luna and send it to zero. You can't do that with, that, that doesn't exist. So, so the, so the people trying to make a comp, there's no direct comp here. What's happening with stretch is that Michael Saylor has two levers he can pull. He can either sell, well, three. He can, he needs to fund the dividend for stretch. So he can either sell M S T R to generate cash. You can sell Bitcoin to generate cash. Or he can buy, he can get people to buy into stretch at par to generate cash to, to buy Bitcoin and then use part of that to end up paying out the dividends. The dividend is not.

• 25:10Speaker 04

  In a smart contract, he can pause it at any time. He can just say, guess what, guys? I'm not paying you out. This every holder of stretch is going to get totally nuked. This thing's basically going to go to zero, but I'm holding the Bitcoin, right? I'm not, I'm not going to sell the Bitcoin.

• 25:26Speaker 05

  I've thought multiple times, right? Again, reputationally, there would probably be a lot of damage. But from a pure economic standpoint, if they let stretch go to zero by just simply turning off the dividend, they keep all the Bitcoin, they don't owe anybody anything. I mean, it's kind of this crazy, you know, what is, I think a lot of people deem as a potential edge case, but it's possible, right?

• 25:46Speaker 04

  It's, it's for sure possible. And not only that, it's probable.

• 25:50Speaker 05

  You think so?

• 25:50Speaker 04

  I think so. I think that he's probably, he's going to either have to do it or be, or want to do it. I mean, if there's one thing we know about sellers, that sellers are genius at financial engineering. He is, he's come up with a ton of different ways to juice value from BTC. And what he wants to avoid more than anything is a total implosion of his story.

• 26:14Speaker 05

  Of MSTR?

• 26:15Speaker 04

  Of MSTR, of MSTR stock. And if MSTR stock, if he doesn't solve this stretches issue, basically MSTR goes to zero. And you, you kind of have to stop playing the game. I don't think he wants to stop playing the game. It's much easier to just shut down the stretch product than it is to battle this all the way to the dirty end and have MSTR end up going to zero because he keeps having to issue out the money offerings for, for it to pay off.

• 26:38Speaker 05

  Is there a world where MSTR has to become a forced seller and puke out a lot of the Bitcoin?

• 26:45Speaker 04

  There is, there is a world in which that happens. And I think Sailor was trying to basically front run that potential fear in the market. He used, with the sale, I mean, he was.

• 26:58Speaker 05

  Only 32 Bitcoin.

• 26:59Speaker 04

  But he, he used the word inoculate. Like he quite literally used word like this is a vaccine. This is a vaccine. It's I'm gonna sell a little bit so that when I sell more later, you have the antibodies to resist fear. That's really what he was doing. It's like, let me get this. Let me get this out of the way now. And to me, that's that's dangerous. I do think that it's it's possible that he sells a portion of his Bitcoin. He doesn't need to sell all of it to cover his debt. I think the the number is, you know, he needs to sell any somewhere between 15 to 25% of his overall Bitcoin. The debt would be the stretched debt or? All the debt that he's taken out to buy. The converts everything.

• 27:40Speaker 04

  Yeah, the converts and everything, because a lot of the Bitcoins actually bought just with cash and at the money equity offerings. And the convert somebody converts, you know, obviously went to equity as well, like not all of it remained his debt. And so I think the number is maybe I don't quote me on this, but it's like 15 to 25% on that. And so he doesn't need to sell all of it. And obviously Bitcoin would take a beating in that scenario. And that would probably be like, you guys got to buy as much as possible. Like you guys got to get in there and just if sailor, if sailor is getting liquidated. If there's one thing that I've learned about trading is whenever there's a forced seller in the market, you need to step in there and buy as much as you possibly can.

• 28:21Speaker 04

  The best trade that I've ever taken in my entire life was buying Ripple equity off of the FTX estate. Explain. And so when FTX, this is actually kind of an, I've never told this story on a podcast before. But when FTX went down, I was working at Golden Tree. And Golden Tree is a big distress shop, distressed shop. And I got a call from Sam Bankman-Fried on that day because he knew that there were only a few shops in this world that could plug the hole for him.

• 28:56Speaker 04

  Golden Dream of the Times, fifty bill. I get this call from this unknown number, then I get a text, hey, it's Sam Bankman-Fried. Like, there's just no way. Why are you calling? I mean, I'd been friendly with him, but I didn't think that he'd actually call me. So I say, send me a selfie. Dude sends me a selfie and he's like, sitting there in his Bahamas apartment. He sends me a live photo. It's the funniest live photo. I'll show you offline. I can't share with the world. But it's the funniest photo ever. And I go, okay, I guess I'll talk to this guy. But at first I text lawyers, I'm like, hey, should I?

• 29:25Speaker 05

  Yeah, I'm allowed to do this a hundred percent.

• 29:27Speaker 04

  Like, am I allowed to talk to this guy? I like text, I text the CEO of Golden Dream, like, hey, should, like, we talked to this guy? And I end up chatting with him, like, how big is the hole? He goes, well, you know, you know, I, I think it's like, you know, we need two billion, two to three billion to cover the hole. I'm like, well, okay, but how big is the hole? He goes, well, no, no, we need two to three billion to cover the hole. It's like, no, no, that's not what I'm asking you. Like, how big is the actual hole? Uh, it's like eight billion or something like that, like, all right. Which actually, looking back on it, if we had filled that hole and taken over FTX and kept all the things that they had within it, that would have been great. Um, but it's those moments when there's peak fear in the markets, when

• 30:11Speaker 04

  you're talking to somebody that is not thinking or acting rationally because of what's going on in the markets. You have to take the other side. I mean, that's what, that's what Warren Buffett means when he says buy when there's blood on the streets. He doesn't, he doesn't mean buy when the market's down. He means buy when people are truly panicking, when people are not making rational decisions and they're selling good stocks, good companies at irrational prices because they are fully panicked.

• 30:41Speaker 05

  March, March of twenty twenty with crypto stocks, et cetera.

• 30:44Speaker 04

  Exactly. And when the market goes down, sometimes people will abuse this phrase. They'll say, well, the market's down ten to fifteen percent, buy when there's blood on the streets. And it's like, well, there's no blood. This has been a very reasonable sell off. It's selling off for good reasons. People are repricing the future. I mean, like, one example of that was the first week after the tariffs went out. It's the first bit of the sell off, purely rational. If you put up 200% tariffs on China, the market should probably be down 5% to 6%. Shouldn't be down 40, though, right? And so that's how you kind of have to think about these things is when is the market

• 31:28Speaker 04

  and its market participants acting purely irrationally? And that's actually, I mean, it's very hard to do, as you know, because everyone gets emotional, even the smartest people in the world get emotional. I've worked for quite a few billionaire hedge fund guys, and I can tell you this.

• 31:47Speaker 04

  Nobody knows shit. Like, people know a little bit more than others, and really what it comes down to is being able to keep like logic and emotionality, your emotionality in check and logic when things are going against you. And this is maybe the most important thing about being an investor, in my personal opinion.

• 32:06Speaker 05

  If people don't know anything, how do you generate an edge in the market?

• 32:10Speaker 04

  So that was a little flippant, but it's, people do know. Jim Simons, for sure, knows things. But that's a really good question, and it's not that edge is... Let me take a step back. When I first got into trading, one of the reasons that I first got into trading is because I viewed it as a purest expression of your skill set applied. It's like, if you're really intelligent, you can solve this massive markets puzzle. But the question is, do you want to solve the 30,000-piece jigsaw puzzle? Or do you want to solve like your kid's puzzle? That has three pieces that you just, like, the blocks, like, put the blocks in? And...

• 32:52Speaker 04

  Trading the equity markets is like that 30,000 piece jigsaw puzzle and trading the crypto markets at that time was playing with blocks. And so obviously, some people have an ego to it and they're like, I want to do the hard thing to prove to myself that I can do the hard thing. As an investor, you just have to say, no, I'm going to do the thing that makes me money. I'm not going to do the hard thing. I had some friends back in college that what they would do is they would go play poker at Lumiere. I went to school in St. Louis. They would go play poker at this casino called Lumiere outside St. Louis at 2 a.m. on a Saturday to pick off drunk people. It's like, well, that's the kind of thing that you need to think about when you think about what is generating edge. So when I first got into crypto, what I would do is back in 2016, 2017, I started reading these papers

• 33:36Speaker 04

  on the Malaysian stock market when it first opened up, like post Soviet Russia collapse, when the Russian stock market opened up and strategies for trading those markets. I would take those strategies and I would apply them to crypto. And by the time I'd graduated, things were going reasonably well for me. And so that's really how you generate edge is it's not, it's not necessarily prognosticating about the future and knowing how everything is going to play out. It's what do you know that other people either aren't looking at or don't understand, right? If you can truly say, people don't understand, like post Chat GPT, people don't understand how much memory is going to be needed, I'm going to buy memory.

• 34:18Speaker 04

  When I say people don't know shit, it's like, a lot of these macro prognosticators are going to talk about, well, rates are here and, and the 10 year is there and the two year is here and NASDAQ vol is here and the VIX is here and SKU is here. And it's like that kind of stuff, quite literally doesn't matter, in my opinion, unless you're running a quant fund. It's, it can give you, it can give you certain frameworks for things, but it's not going to make you money. I mean, I think a lot of macro talk is kind of just astrology for men. As somebody that's been inside these, these funds, I mean, it's useful for sort of figuring out what environment you're, you're in, but it's not actually useful for making money. Where the money is made is figuring out what do people really

• 35:02Speaker 04

  not understand right now? Like, what are people missing? And what are, and this can be for a variety of reasons. I'll give you an example of what's happening in the markets right now. The trade has been for a very long time, the Mag7 trade and Mag7. Everyone crowded into that and everyone was looking at Mag7 as memory overtook it and absolutely shot up. And what people didn't understand is that if they're going to be building out $600 billion of data centers, they're spending that money somewhere and that that money is going to memory. And, okay, so then they're also selling equity, so that's going to depress their prices. And people are kind of nervous about the demand for that capex right now. And now it's become a game of survival.

• 35:46Speaker 04

  These mag, the, uh, the top tech companies are not building out data centers in order to get ahead. They're building them out in order to remain competitive with each other. And so that then memory stocks are really taking off. And, okay, now, now that memory stocks are in a crazy, crazy bubble, you have to start to think to yourself, well, where are people not looking? Like, what are people not, if they're so focused on memory, what are they not looking at? What's downstream for memory? The next trade is, what is AI actually going to touch? What is AI going to change? And the answer is, well, you look at Accenture going down 30% in a day. It's changing that. It's changing biotech. Biotech's, you know, if you look at ArcG, which is Kathy Wood's, uh, you know, advanced genomics fund.

• 36:30Speaker 04

  If you look at XBI, XBI is doing really well, but a lot of these things are starting to look really good. And it's because they're genuinely going to benefit in a massive way from AI. So, you know, maybe short the consultants, buy biotech defenses, obviously, I think, gonna be hugely, AI is hugely beneficial for defense companies right now as well. Um, because they're building, you know, smart forward deployed drones. Uh, it's kind of interesting, like the, the, the old world is dying and we're, we're ushering an era for the new world. And so now we've built the infrastructure. With the hyperscalers, we've supplied the infrastructure with the Microns and San Disks and Intels of the world, and now we're going to change the world. And so that's the

• 37:13Speaker 04

  next trade, in my personal opinion, and that's what people need to start looking at is what's going to change.

• 37:18Speaker 05

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• 39:28Speaker 05

  You mentioned biotech, the ARC Fund. What else goes in that bucket for you? Or like, what are you allocating to or think is most interesting?

• 39:37Speaker 04

  It's really, right now, I'm focused on sort of two, two main areas that are almost barbell approach. It's the what is AI going to affect? And then betting on American isolationism as well, because I think what's what's happening right now is, I mean, you saw with the Iran war, you saw with the Venezuela, with what's happening in Venezuela, who knows? Maybe we're going into Cuba next. All of this has nothing to do with those specific companies. It has everything to do with China specifically. And so the question is, how are we going to, how are we going to be battling with China? Right? And that's why I'm still a huge believer in Intel. Intel is at 600 billion market cap. TSMC, which is based in Taiwan, is at a 3 trillion.

• 40:21Speaker 04

  They're going to close that gap because do you add to critical? Imagine being able to bet on the Manhattan Project, right? If you could go invest in nuclear weapons back in 1944, you take that opportunity all day. And that's what chips are, right? And so obviously, we're going to need to get away from TSMC, and we're going to need to get, we're need to get into Intel. So that's, and then the rare earth minerals, REMX, USAR. USAR is a little bit shaky. I don't know if I would touch that one, but REMX is the safer, is a safer play that I would touch. And then you have, I'm investing in biotech and robotics. I know you had Andrew Kang on here,

• 41:00Speaker 04

  also interviewed him on, on my pod. I think that he has, I'm nervous about where the NAV is on robo strategy, but I really like the idea. And I think that there, there's going to be a good way to get into that at some point.

• 41:16Speaker 05

  Let's talk about that, because I think that We talked earlier about hyper liquid giving people access, right? And now what I think we have seen is there's this whole new crop of these investment kind of vehicles that are coming out. So you have Robinhood has a publicly listed vehicle that gives you exposure to private venture capital. Fundrise has one that exploded when they took a public. Angel List has one as well. Most of those are kind of general early-ish stage venture capital or late pre-IPO growth type exposure. They're not thematic.

• 41:57Speaker 05

  They're not in any way different than investing in a venture fund that somebody says, hey, give me some money, I'm gonna go find some good deals. It's just that now there's a public ticker that you can get in and out of them. What Andrew's doing is more thematic in that it is just physical AI and robotics. And what I, as I looked at it, and I am an investor and it still holds today. What I find interesting is on one hand, there's an access component. So a lot of people will become interested because they're saying, hey, I can't invest in these private robotics companies myself, so I can buy this ticker and get exposure. On the other hand, as you point out, is that it trades at a premium to NAV, at least at the stated NAV. And at times it's been pretty substantial. It's traded at 500% the stated NAV. That scares people.

• 42:41Speaker 05

  But when you go and you look at the actual companies, private markets have this weird dynamic of, you know, you raise your seed round at $20 million valuation, you raise your Series A at 50, your Series B is at 200, and you're about to go raise your Series C and it's going to be at 2 billion, but everyone still references the 200 number, right? And so in the stock market, like you go from 200 to 2 billion over time and people kind of see where you are. Now, There's also companies who like, we're gonna be at 2 billion and actually at near zero and just don't know it yet, right? And so there's like a lot of opaqueness and you've got to kind of underwrite this stuff. But usually when I see these publicly traded closed-end funds that have private market exposure,

• 43:27Speaker 05

  and you start to look at them, the marks are off, not because they're doing something wrong with auditors or whatever. It's just that like, the way that you have to value these on a like a mark-to-market basis is always at the last fundraising round. And so these companies make progress, especially when you have so much capital available to you in the private market. You may not raise money for two years, three years. So if it's 18 months after you last raised money, if you end up raising more money, it's because you're doing well.

• 43:51Speaker 04

  100%.

• 43:52Speaker 05

  Right? And so it's like this weird dynamic of just me as an investor, just trying to figure out for myself, like, what is the actual premium to the NAV of some of these things? It's not as clear. It's just like, what's the stated NAV and what is it currently trading at, right?

• 44:03Speaker 04

  100%. And there's actually, there's a lot to unpack here. You hit on a lot of things that I've been thinking about for a long time. Number one, I'll start with the NAV. I'll answer that question. There is a difference between NAV expansion and just general NAV, right? So what do I mean by that? If I'm looking at investing in robo strategy and they rate, let's, let's say at an aggregate, they raise at a 2 billion valuation across all companies, now they're trading at a 4 billion. You're 100% right. That might actually just be the true price of those companies now. Because maybe that happened six months ago. But what makes me nervous about investing, whenever you look at any of these companies, what makes me nervous is, well, the NAV just went from 200% to 500% in two days, right? Did the companies do that? Like, did something happen? Is there a change? Why did it do that?

• 44:49Speaker 04

  That's when you get nervous about NAV. The actual absolute number, almost irrelevant in terms of investing. It's possible that if this thing raised at, you know, 200, 200 million, and three days ago it came out that they just got a $2 billion order from the US Department of, Department of War, sorry, Department of War now, uh, it's possible that that NAV should be It's actually mispriced. It's mispriced like a thousand percent. Yeah. Right. So like, I'm actually 100% in agreement there. So as an investor, as a trader, what you want to be looking at when I say I'm nervous about NAV is, well, how quickly did that expand? And does it deserve, does it deserve that expansion so in such a short period of time? With that being said, I actually think RoboStrat is a brilliant, brilliant vehicle.

• 45:32Speaker 04

  And not only just for the reason that I think Kang's a smart guy and robotics is the future. It's because something that I've been thinking about for a long time, which is that the forward return in index funds might be lower in the future because companies are staying private so much longer. Venture funds have made so much money over the last 15 years and the private market has expanded so much. Private credit has expanded to insane heights that now companies can wait until they're 1.5 trillion to go public. And they're actually taking those returns from your average American. And I actually don't necessarily think that's fair.

• 46:13Speaker 04

  Either you loosen government restrictions on private citizens investing below the accredited investor threshold, or you force companies to go and list earlier and stop taking money at a certain point. Obviously, I'm in favor of the first one, not the second one, but something needs to change. You can't just have companies going public after the private, after a small cabal of private investors aided by government regulation takes all the profits. That's one of the things that I found so beautiful about crypto. Right? Is that anybody could invest at any time. There wasn't some, well, some assets. Obviously, there were, there were some cabalists that you had to contend with, but mainly across the board, it was if you got your money into the ICO, you got your money into the ICO.

• 46:56Speaker 04

  If you, if you made a Telegram account and you DM'd the founder, he was probably going to take your 5K check. That's how crypto was in 2017 to 2022. Right? If you could, people were angel-ing with $1,000, right? And that I think is actually very important and something that we're missing. So what Andrew has done, what Fundrise has done, what all these other companies have done now. I think is very important. Take these private companies, roll them up, allow private, allow private citizens that may not meet the accredited investor thresholds, invest into these companies and take part in the American future. I mean, I'm right now very constructive on the markets and I'm exceptionally constructive on these robotics defense companies, what's being built

• 47:39Speaker 04

  out in Silicon Valley right now. I mean, people should be able to put their money to work. And so I'm very grateful for these, you know, I, these, these assets popping up. The only thing that I would hope is that at some point, this actually becomes commoditized. It's like the same thing with happened with ETFs, right? The, and the expense costs just have to come down, down, down, down, down, down. Cause right now, people are making a lot of money at expense of the retail investor. That's also why retail investors are punting on the weather. It's also why people are punting on sports is because they feel that they have, like they're, they're getting the real return that they quote unquote deserve from that. Like there's no middleman taking that from you. You're just, in theory, on, on, on Kalshi

• 48:24Speaker 04

  or in theory on Hyperliquid, you're just betting directly against somebody else that wants to take the other side. And so the cost of the middleman is sort of cut out. Whereas in these vehicles, the cost of middleman's, and by the way, rightfully so. If you know better than anybody how hard it is to take a company public and like, it takes a lot of work. It's very difficult. And so people that do it should be compensated for it, but over time, hopefully those costs come down.

• 48:48Speaker 05

  You know, what's interesting to me is I've spent a lot of time focused on what I call like the independent investor. So these people get all their information online. They want to manage their own money. They're chasing financial independence, whatever. And we've got this AI CFO product called Sylvia. And so people come in and they are O-A thing, read access for the product into their accounts. And then they can talk to an LLM and they're getting all the context of their financial situation fed to the LLM. And as you would imagine, all the personal information is, you know, encrypted and secure and private, et cetera. But what we can see is we can see kind of across the user base, these different trends. And one of the things that we found very interesting is if you use Sylvia regularly or heavily, your net worth has grown 16 to 40% in the last six months. Now, the reason why that's interesting is because it is-

• 49:33Speaker 04

  In the last six months?

• 49:34Speaker 05

  The last six months.

• 49:35Speaker 04

  The last six months. That's, that's, that's pretty good.

• 49:36Speaker 05

  To forty percent. Now, here, here's what, immediately when I hear that from somebody on our team, I say, well, is that because only like rich people or, you know, whatever, right? Across all income levels and across all starting net worth positions. True, sixteen to forty percent. Okay. So you start digging deeper and deeper and deeper into this. And my biggest takeaway is actually that there are three things that you can look at. The first is AI in this applied sense. In education, if you want a child to learn what happens, give them one-on-one private tutor. Healthcare, if you want somebody to be healthy, what do you do? Private one-on-one healthcare, you know, and insights, right? Finance, same thing. So having personalized insights on a one-on-one basis, of course, you should be able to grow your assets faster than somebody who doesn't use that type of thing.

• 50:22Speaker 05

  No different, you should learn better, et cetera. Okay. So there's something about using a AI-based tool that gives you one-on-one personalized insights that definitely has an impact. The second thing is that you're paying attention. If you use these types of products, you care, you're measuring, you're, you're, you're, you're inclined to be involved. You probably should grow faster than somebody who isn't, who's just kind of passively living their life, not paying attention, right? So those two things, I think, are like pretty common sense. The third thing, though, is how fast people's net worth grows, regardless whether you use a product or not. Like, the volatility of the things that people are holding now is so much greater than ever before. So people know about the Bitcoin stuff and, you know, like the things that have been popular over the last five years.

• 51:04Speaker 05

  But now we're talking about memory stocks are up and down.

• 51:08Speaker 04

  And it's because of twenty percent today.

• 51:10Speaker 05

  It's crazy. Micron was up ten percent just off of earnings, you know, call, right? So, okay, that's memory. That's a really hot sector. Like, no, man, if you go look at some like pretty basic stocks, and one of the jokes right now is that Grindr, you know, the gay app, is outperforming a lot of crypto coins over the last, you know, year.

• 51:27Speaker 04

  Yeah.

• 51:27Speaker 05

  And so you go and you say to yourself, wait a second here. If capital and information now move at the speed of light, everything becomes more volatile. And so if you position yourself well, obviously that means you can significantly grow your net worth. But if you position yourself incorrectly, if you're betting on the weather, if you're doing some of these things and you're wrong, you can destroy your net worth overnight. And it almost feels again like that K shaped economy is in economic outcomes, but also in the performance in the market, there seems to be this like bifurcation into like the winners and losers as well, right?

• 51:58Speaker 04

  I think in a huge way. And what's kind of interesting is that this is, I think this is actually a function of AI in some ways.

• 52:05Speaker 05

  Okay.

• 52:05Speaker 04

  And also a function of just retail entering the market in droves. If you go back 15 years and there's a new trend that comes out, your average person cannot become an expert on that new trend in three days.

• 52:19Speaker 05

  Mm hmm.

• 52:20Speaker 04

  A little bit of knowledge is very.

• 52:21Speaker 05

  Don't tell the people on Twitter that. They only need about an hour.

• 52:27Speaker 04

  It's like any, anytime anything goes down, it's like, wow, you're a geopolitical expert now. Wow, you're a, you remember when everyone became a virologist?

• 52:34Speaker 05

  Yeah, 100%.

• 52:35Speaker 04

  In 2020.

• 52:35Speaker 05

  I was right there with them. I said, ah, let me do the math here.

• 52:38Speaker 04

  But you know, the kind of, kind of the joke is that now it's kind of becoming possible.

• 52:44Speaker 05

  100%.

• 52:45Speaker 04

  Because of AI. It's kind of, it's actually genuinely possible to become an expert now. And by using, by using AI, if you spend a week researching a topic with AI, you can get, I mean, obviously you're not going to become an expert, but you can get up to speed on things and you can find things genuinely, you probably were too lazy to find before.

• 53:04Speaker 05

  Well, so you know.

• 53:05Speaker 04

  And so for example, like the Korean stock market, just to hop in there for a second. I guarantee you that the only reason that SK Hynix went up as much as it did is because people were able to find it. And people were able to bet on it. And maybe it would have gone up that much because there would have been some hedge funds that would have absolutely piled into it, but it would have been only the hedge funds that would have done it. But now you go into Claude and you type in, what are the biggest beneficiaries from the AI trade? And all these companies populate and your average person can do it in three seconds. And then they do literally zero research. I've seen this happen many times because I host, I host a live stream twice a week just on the financial markets.

• 53:46Speaker 04

  And we get all these comments from people that are like, yeah, I put my, half my net worth into this thing because I found it. Claude told me to buy it. What do you guys think about it? I'm just like, well.

• 53:55Speaker 05

  He kinda already bought it, dude.

• 53:56Speaker 04

  Yeah, you're in it, man. Ride it out.

• 53:59Speaker 05

  So does Stanley Druckenmiller.

• 54:00Speaker 04

  Like, enjoy.

• 54:00Speaker 05

  And Druck, I mean, I don't know if you know the story, but he heard a speech from Javier Malay. And then when he heard the speech, he basically was like, I like this guy, like his policies. He went on, he said perplexity, and he just said, what are the five most liquid Argentinian ADRs? And he bought them, and that was like his due diligence. And then he's like, and then I always spend some more time looking at it, but it was like an invest than than research. And so in a weird way, what you're talking about, so everyone can become an expert. My like framework for this is everything in our lives is becoming compressed timeframes.

• 54:30Speaker 04

  Hundred percent.

• 54:30Speaker 05

  Right? Well, now, if you wanted to be a virologist, as you know, just the extreme example, you had to one, be interested in it, then you had to go figure out like, what school can you go to? And you had to go sit in a bunch of classes, take a bunch of tests, do all the like, whatever. Maybe that took 10 years, right? Maybe it took six years, whatever. It was years of work to become a virologist. Could you get 70% of that knowledge? In an hour of Googling slash AI models now?

• 54:59Speaker 05

  I don't, because you get 30% of it in an hour, right? Like, you've compressed the timeframe to get some material amount of that information. And then the beauty is that you don't have to know everything about virology. You just need to know specific for this, right? And so whether that's finance, that's, you know, social stuff, whatever. Like, I do think that there's this weird element of like, the meme has truth to it. In that you can very quickly get up to speed on things and then have an opinion about it.

• 55:23Speaker 04

  No, it does. I mean, I love the Druckenmiller quote. I'm a big, big fan of, I'm a big fan of studying the greats. And making sure you understand how they make their decisions. And what he says specifically is anytime he hears a good idea, he buys a little bit of it, because it actually forces him to investigate it and pay attention a little bit more. Once you put a little bit of skin in the game, I mean, the whole world opens up to you. And that's what's happening now with AI. I mean, people are putting a little bit more than skin in the game. They're full, you know, full porting things sometimes. And but that's, we're opening up the markets to retail in a way that have never been opened up before. Because again, a little bit of knowledge is very dangerous and people are willing to throw money at these things. And if you take a, if you take a step back, it's a combination of that.

• 56:06Speaker 04

  And then everything that we talked about at the beginning, where people are more likely to be traders today, because they want to escape the rat race, they want to escape the underpass. And so taking it full circle to the volatility point, that's why you're seeing all this, that's why. Jane Street is cleaning up. That's why these market making firms are making a ton of money is because A, when there's volatility on the market, market makers tend to make money as long as it's not trending volatility, like unidirectional volatility. And two, you have more retail that are just willing to cross spreads and pay whatever the heck they want to get into assets. I mean, you're obviously going to clean up. And so that's the shifting nature of the markets today. Before what you had is you had really

• 56:49Speaker 04

  low volatility on the way up. Generally, you just have like a step, step, step, step, step, step, step in S and P and NASDAQ and super high volatility on the way down. Now you have it in both directions. What happens when volatility goes through the roof? Your cash actually becomes more valuable and looking for opportunities becomes more valuable. So the way that I tend to approach the markets now is I have these, I have these mega trends that I want to allocate to. And anytime we get extreme volatility to the downside, I'm buying them. I'm buying and I'm getting in. And if we have incredible insane volatility to the upside, we'll sell a little bit, right? We'll take advantage of, we'll take advantage

• 57:32Speaker 04

  of that. Maybe you sell some calls against your position or something like that to sort of dampen dampen the vol because when vol is this high, you get presented with opportunities basically every three months where things collapse 30% and you want to be in a position to get back in. If vol is 5%, I mean, just mathematics. If vol is 5%, the price and, and you go up 5%, the likelihood that you see the price 5% ago is much lower than a vol is 100% and the price goes up 5%. So then the question is, if vol is much higher, it's actually better to sell. That's just general, it's better to sell because the probability that you're going to get that entry price again is much higher when vol, when vol is

• 58:16Speaker 04

  high. And this is, this is my old school trading coming back.

• 58:19Speaker 05

  When you think of these mega trends, is this just as simple as like physical AI and robotics, defense tech, biotech? Is that like the mega trends you're talking about? Or there are a different way to think about it?

• 58:28Speaker 04

  That's it. I mean, the only thing that I think I haven't hit on is energy and specifically, I'm a big uranium bull. Okay. I think that, well, right now you see the Trump administration is actively encouraging innovation and startups within the nuclear sector. And what we're seeing right now is we're also seeing that oil is very fickle. It can be cut off from you at any moment. And having nuclear reactors is actually a way to ensure national security. That's why France is building more. That's why Germany is building more. That's why the US is finally looking at throwing these up. And at some point, I think what's going to happen is that the reason that we haven't had any nuclear reactors put up in a long time is just safety issues. And I think people are going to get over that when the government's pushing it. And that doesn't necessarily mean the price of uranium is going to go up.

• 59:13Speaker 04

  This is very important when you invest in commodities. The price of uranium could go down because if demand for uranium goes up, we could oversupply. But what's going to happen is that uranium miners are going to make way more money than they are making in the past because if they're selling 10x and price is down 50%, they're still 5x up on their revenue. And so I hold uranium miners as well. So enter like infrastructure as it relates to energy. That's why obviously Ashen Brenner bought Bloom Energy. He's very bullish on that. I'm bullish on it as well. But uranium, I think, is overlooked and then everything else that we've talked about so far. What about SpaceX? I think that SpaceX is interesting. And I'll say this.

• 59:58Speaker 04

  SpaceX at the 1.8 trillion, I think it was trading at 94x. It was making 18 billion. So if it's trading at 1.8 trillion, it's 100x price to sales. Nvidia. Is that high? It's reasonably high, but Nvidia in 2023 was trading at 45x price to sales. And the maximum drawdown that it ever had from that moment that it hit 45x price to sales was 10%. And now it's trading at 22. And it just grew into its valuation massively. And so I think what's probably going to happen with SpaceX is that it will actually, it's quite literally the only viable space company that exists on the planet. Space will be valuable.

• 1:00:40Speaker 04

  They will extract that value and they have so much goodwill because of the way that Elon's been able to keep Tesla, which is a much, much, much weaker company at its core. I mean, EVs are not a world-changing technology when you compare it to SpaceX in the same way. They are, but like autonomous vehicles.

• 1:00:56Speaker 05

  There's a lot more competition and.

• 1:00:58Speaker 04

  It's just not the same. So I think SpaceX can actually maintain its valuation and probably become one of the most valuable companies in the world in 25 years. Now, the question is, are there better things to own over those next 25 years? Will there be a lot of volatility? But I'm a buyer of SpaceX under a trillion for sure. Hundred percent. And people just need to realize that because of what happened with AI and because of the time compression that you just alluded to, people have a lot more leniency for companies that are trading at massive ratios because it's like, well, they might get there in three years. Instead of getting there in 15, 20 years, if Nvidia was able to close that gap in just two, I mean, who knows? Maybe SpaceX will be able to do it too.

• 1:01:39Speaker 05

  There's this interesting idea of like chasing momentum, right? And I think that is part of why Bitcoin has been suffering is like capital is just chases returns. And that's a human nature, you know, kind of fallacy of investing. But I also think though, that what a lot of investors have learned is maybe you don't always have to be contrarian, right? You know, there's this whole belief that like, you gotta be the one to find the thing that nobody else invests in. If you go to the private market, maybe where people have less knowledge, right? Is, well, I could go find the company no one else has found yet and be the first person to believe and also, or like, I don't know. Sequoia, Andreessen and Benchmark are all investing in this thing. Probably got pretty good odds. They got a lot more capital to keep investing in it. They got a lot of, you know, a good network of people that can help recruit.

• 1:02:24Speaker 05

  Like there's all these things that increase the probability of success. So like, do you want to be the hero or do you want to make money? SpaceX is a great example. Like how many venture funds would have been better off not investing in 20 different companies and just put all their money in SpaceX? Now, in hindsight, it's obvious, right? And it might not have been then, but SpaceX had a 30 or 50 billion dollar valuation. There weren't a lot of people yelling and screaming saying it's overvalued, right? So it was more of just like, do you think you can go to LPs and be like, hey, you're basically going to pay me to just buy this one company? And you don't go look to see how you could do it yourself, right? I think there's a lot of people doing that. Public market, same thing. Like, why is the memory stocks all going up? Like part of it is, yeah, the companies are doing incredible, but also part of it is just like, I don't know, man. I buy and it goes up 10%. Like, who cares if it's overvalued or not? Like, I made 10%.

• 1:03:09Speaker 04

  There's, it's funny. I'll take you back to 2021 for a second, when every single person in the entire world in crypto specifically, was telling me crypto is overvalued and I need to be contrarian and I need to go short it. And these were all people that were in the industry. I mean, they're all like, all deep in the industry. And I'm looking around going, do you not realize what's happening here? Everyone in the industry is bullish, but that's not a bad thing. Because all of the capital that's coming in is coming from outside the industry. And actually, we're just a tiny little piece of this entire thing. And yes, we might be all 100%, 150%, 300% allocated to this thing. But 99.9% of the world,

• 1:03:50Speaker 05

  Zero.

• 1:03:50Speaker 04

  They haven't touched it. They haven't touched it at all.

• 1:03:52Speaker 05

  They're intellectually short.

• 1:03:53Speaker 04

  Right, they're intellectually short. So, like, you're not, you're not being smart and contrarian, you're just being dumb. You can't, you have to figure out, you have to basically realize, like, when you're being contrarian, who are you betting against? Are you actually, are you actually betting against the herd? Or who are you betting against? When you're betting against memory, right now, you're betting against the continued growth of AI. Like, are you betting, who cares how many people are in it? You're betting against the continued growth of AI. Now, some things to look out for. If I watch the leverage ratios in Korea a lot, because they have 3X since the start of the year. Look, if we get up to like, if we get up to like $50 billion pumping SK Hynix, I'm going to be a little bit nervous. If I start seeing

• 1:04:34Speaker 05

  Nervous around that one stock or nervous around the overall AI trade?

• 1:04:37Speaker 04

  Nervous around the overall, because it's a, it's a symptom. It's like, you, you build, when you're, when you're looking

• 1:04:41Speaker 05

  There's too much interest, too much enthusiasm.

• 1:04:43Speaker 04

  When you look, when you look for the top of a bubble, you have to build, you have to build a picture. You can't just, you know, there's no one magic silver bullet. If, if a taxi driver starts talking to me about Intel, I'm probably selling out. If I, you know, if I meet somebody that's never traded, like, every single person starts around me, starts trading stocks, if all my doctor friends start trading stocks, if, if it feels like 2021 crypto again, which it doesn't, because there's actual real value being created here so far. Yeah, I mean, you can you can sort of look for these things, but right now I'm personally not seeing them. Now, if inflation comes roaring back, maybe I get a little bit nervous, but that seems to be tapered because of the war with Iran coming to a close. So right now,

• 1:05:27Speaker 04

  I'm kind of just seeing green lights. But again, I'm not focused on memory specifically now, because I think that we are probably in the last eight, maybe the eighth inning. And don't get me wrong, the eighth and ninth inning can be awesome. They can be awesome. I mean, you can score 10 runs in the top of the ninth, right? Like, this happens. But I'm focused on what AI is actually going to change now.

• 1:05:49Speaker 05

  Mm hmm.

• 1:05:49Speaker 04

  Right?

• 1:05:49Speaker 05

  You want to hear a crazy story about the top of the crypto market?

• 1:05:52Speaker 04

  Please.

• 1:05:52Speaker 05

  So my wife and I went to dinner with a very well-known investor. He's probably worth, I don't know, five, six billion dollars at the time. And we're sitting at dinner down in downtown Manhattan. And at some point, he, who was not in the crypto industry, but had told me he owned crypto, pulls out his phone and he tells me, you know, look, look what I own. And he's holding it there for like, a little bit longer than is like, normal.

• 1:06:22Speaker 04

  Yeah.

• 1:06:22Speaker 05

  And I realized that he wants me to look at how much he owns, not just what he owns, right? And he had, I don't know, maybe five, six different names, whatever. And I look, and I have to do a double take, because he has a billion dollars, like 1.1 billion, or whatever, on his phone. And naturally, I like, can't help myself. I'm like, you're not like a crypto person. I don't think you knew the word crypto six months ago. Like, what the hell? And so he tells me a story as he was at dinner a couple of weeks before. And remember, this is in, or I'm sorry. Yeah, this is in like, December's timeframe. He tells me that basically, he had been at a dinner and somebody had told

• 1:07:04Speaker 05

  him they thought that crypto was going to do really well. And he had put $200 million and had five Xed. And I don't remember what he had in it, also whatever. So first of all, you look, you'd be pretty rich to like, off a dinner conversation, go put $200 million in, you know, fucking crypto. But two, he was very proud of himself. And so like, I would have been too, if I was him. So I kind of like, memory hole that. And we have a great conversation, like, incredible human, all this stuff. So it was like, a little out of character for this one five-minute part of the conversation, but great. We leave the dinner and an Uber picks us up and we get in and he drives to the stop sign. And you know how they have like the phone, uh, kind of in like a phone holder sitting there?

• 1:07:44Speaker 04

  For sure.

• 1:07:45Speaker 05

  He flips from the Uber app to Robinhood. And I can't help myself. I say, uh, oh, you, you, you into investing? Not trading. I say, you into investing? He goes, yeah. I go, what are you looking at? He goes, Dogecoin. And I should have immediately got on my computer and sold everything, right? But like, I think back and it's like, uh, like I'm mentally scarred. Cause I'm just like, it wasn't just like one, it was like the sequence of like, dude, everywhere I'm looking, rich people, Uber drivers, everyone is excited. There can't be much juice left.

• 1:08:17Speaker 04

  Yeah.

• 1:08:18Speaker 05

  And at some point, not now, but at some point, the AI trade will be the same thing. Probably far, you know, far away, but like, we will get back to that kind of craziness in that industry as well.

• 1:08:29Speaker 04

  Keep your eyes open. I mean, this is one thing that I'll say is if you look around at the world, you'll find opportunity and you'll find information. Talk to your Uber driver, talk to the person checking you out, talk to the barista, talk to everybody, ask them what they're thinking.

• 1:08:42Speaker 05

  What are you asking about, uh, you know, Micron?

• 1:08:44Speaker 04

  Yeah.

• 1:08:46Speaker 04

  No, straight up. Ask your, like, when, next time you go get a coffee, go, dear barista. This is the most antisocial advice I could possibly give you. Go up to them and say, hey, have you heard of Micron? No? What about Sandisk?

• 1:09:00Speaker 05

  You ever, uh, looked at the, uh, you ever looked at the inflation rate in Korea?

• 1:09:05Speaker 04

  No, seriously, seriously. Like the most blue haired, bull ringed, white like person you can find. Like if they're talking about it, like it's, it's, it's probably, you're probably close to the end.

• 1:09:15Speaker 05

  Is there anything that people are excited about right now that you think is actually like, there should be a warning issue to investors?

• 1:09:24Speaker 04

  A warning issue to investors, not really a warning issue, but what I'll say is that stablecoins are going to eat the world, but that does not mean Coinbase and Circle are going to do well.

• 1:09:37Speaker 04

  That's, that's my general take on these things. I actually think that Circle could be in some trouble.

• 1:09:43Speaker 05

  Why?

• 1:09:43Speaker 04

  Because basically, the banks are fighting so hard against this to buy themselves time to issue their own versions of stablecoins. And so it's possible that, and additionally, Tether's kind of winning. Tether's doing an incredible job and you can invest in Tether unfortunately. I mean, you can try, maybe Ping Pao, ask him to put like five bucks in, he's going to say no, but Tether's actually winning across the board. And so it's like, people are really excited about this stablecoin thing, but where are you going to, where are you going to put? I can't put my money to work in anything that I actually think is going to be valuable here.

• 1:10:21Speaker 04

  Everything else that people are, I mean, if you're talking about AI, if you're talking about bot, if you're talking about defense, I mean, like what, what do you see that people are excited about? I'm curious. Like this is, this is goes back to our point about being contrarian. It almost feels like there aren't that many places to be contrarian. The hardest thing to do is just to stick with it.

• 1:10:42Speaker 05

  I have a very hot take on this, which is X is kind of like the global chat room. And now there are so many people paying so much attention and are so smart and have access to so much information that the herd is actually more right than not in the public market. In the private market, there will still be a lot of things, you know, there's certain new industries or applications of technology, you know, there's a little bit more bifurcation there. But in the public market, think about all the names that people got excited about over the last hour, a year or two that we could think of. They were right on majority of them, right? Definitely more than 50%, but like maybe even like 90 plus percent.

• 1:11:27Speaker 05

  So actually, it becomes less of a like, you need to think for yourself and like, go find some idea that no one's ever thought of before. You still need to be a critical thinker. You still need to like, double check the analysis and all that kind of stuff. But it becomes more of a game of, am I online enough? And know who to follow and what information sources to pay attention to, to see these narratives as they start to bubble up? And then get ahead of, or as I like to joke, just get in the way of the narrative? And you will benefit. And so crypto people are excellent at this.

• 1:12:02Speaker 04

  It's true.

• 1:12:03Speaker 05

  And they're very well positioned for the public market now.

• 1:12:05Speaker 04

  We would always joke, we'd want the crypto markets to become more like the equity markets. And the equity markets have just become the crypto markets. And it's hilarious to see, but it's also true. It's the people that are terminally online. You see the headline for peptides and potentially being approved by the FDA? And PIMS goes up 25%.

• 1:12:21Speaker 05

  Dude, Wendy's.

• 1:12:22Speaker 04

  And Wendy's, I mean, yeah, the Wendy's.

• 1:12:25Speaker 05

  Did you look at, see what the, what like the initial catalyst for this was?

• 1:12:28Speaker 04

  I don't know. I just thought it was a meme. It's just like, everyone just decided.

• 1:12:31Speaker 05

  So basically they're, they've got like some debt. So I don't know all the details of like the actual financial picture.

• 1:12:35Speaker 04

  It was super heavily shorted. I know that, but.

• 1:12:37Speaker 05

  But somebody, I think it was on Reddit, was like, you know, the meme of like, well, if we suck at trading, we'll just go back to our jobs at Wendy's. Well, like if Wendy's in trouble, we're not going to have jobs there either. And so somebody basically was like, we gotta save, we gotta save Wendy's.

• 1:12:49Speaker 04

  That's incredible.

• 1:12:50Speaker 05

  And bam, there you go.

• 1:12:52Speaker 04

  Yeah.

• 1:12:53Speaker 05

  And so you think about like, imagine being Nelson Peltz.

• 1:12:57Speaker 04

  Yeah.

• 1:12:58Speaker 05

  Sitting there, I think it was like 20% of Wendy's, right? Like incredible guy, great track record, investing all this stuff. And somebody coming to you and being like, hey, you know that company? That we own? It's up 30% today. Why? Cause some idiots on the internet want to make sure that they have a potential job.

• 1:13:15Speaker 04

  Yeah.

• 1:13:16Speaker 05

  You know, like, like you couldn't comprehend it.

• 1:13:17Speaker 04

  Yeah.

• 1:13:18Speaker 05

  He probably would like to say, thank you. But like, that is the market. But like, once you understand the meme and you understand what happened, you're like, dude, of course, like, duh. Of course, they were gonna do that.

• 1:13:28Speaker 04

  Yeah, and you know, you know what it is almost? It's a, it's a shared of self, uh, shared identity is what I'll say. That's what people really seem to crave. And this is what happened with GameStop. Seems to be happening with Wendy's. Whenever you get a meme stock that runs, it's because people, it's so much more fun to make money together. That's actually what kind of held crypto together in a big way is you're part of this entire ecosystem. And when crypto was going up, you were making money with your friends. You were having, you had inside jokes, you were laughing, you were really, you were like genuinely enjoying yourself. And I think that's coming to the equity markets as well. I mean, there, there are cults around every single major asset now. There's a, there's a SanDisk cult, there's an INTC. If I, if you tweet the ticker INTC, I mean, like you get insane engagement. It's the same thing with Hyperliquid, right? The Hyperliquid cult.

• 1:14:12Speaker 04

  And what started off in crypto is now everywhere in equities.

• 1:14:17Speaker 05

  Of course.

• 1:14:18Speaker 04

  And the traditional guys can't wrap their heads around it. They can't wrap their heads around it. It's kind of, it's incredible for people like you and me. But like, if I have one piece of advice to anyone that's coming from the traditional world and trying to trade these crazy markets is deprogram yourself. And just realize that it doesn't matter.

• 1:14:36Speaker 04

  Like a lot of these things that you think about, they don't matter. But you still have to be careful because at some point, when things get over exuberant, the market will fall apart and you just have to make sure that you've taken enough profit by then to get, to get out. Right? So like, if you're, if you're in Wendy's right now, you probably want to get out.

• 1:14:55Speaker 05

  Tell us about your podcast request before I let you go.

• 1:14:58Speaker 04

  Yeah, no, I, I appreciate that. So I started, actually, I started this podcast four years ago with my friend Jonah Van Berg, who is the head of, who was oil trading at Goldman and then a partner at VITAL. I was a big crypto trader and then I was a golden tree and we actually just recorded, we recorded a call and put it online four years ago, sort of blew up. And today we livestream twice a week, Wednesdays at 1pm, Fridays at 1pm. And I just talk about my take on the markets. We get Jonas' take on the market and we talk to really interesting guests and hopefully you'll come on one day as well. I think it'd be a lot of fun.

• 1:15:31Speaker 05

  It's called Thousand X.

• 1:15:32Speaker 04

  It's called the Thousand X Podcast.

• 1:15:34Speaker 05

  All right, Thousand X.

• 1:15:35Speaker 04

  And what we're trying to do is at some point compete with CNBC because I think there's actually a big gap in the market between influencers and traditional media.

• 1:15:43Speaker 05

  Hundred percent.

• 1:15:43Speaker 04

  And I think we can deliver something in the middle. The number one thing that you gotta know about it is it's practitioners talking about the market. It's two people that have managed over a billion dollars actually telling you what goes on inside the markets, how a real hedge fund trader would think about it and talking to you every two days.

• 1:15:58Speaker 05

  Yeah, it's valuable, right?

• 1:15:59Speaker 04

  Yeah.

• 1:16:00Speaker 05

  Amazing. Well, thank you so much for coming to do this. We'll do it again in the future.

• 1:16:02Speaker 04

  I appreciate it. Thank you.