Latest / The Income Show / The Bitcoin Bears Are Wrong | The Income Show | Ep. 20

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The Bitcoin Bears Are Wrong | The Income Show | Ep. 20 · The Income Show

• 0:00
  I'm very bullish and the fact that a lot of people aren't makes me more bullish.
• 0:04
  I love that people say it's still going to 40.
• 0:06
  I want people all over the internet screaming the end of time is nigh.
• 0:11
  I don't think it is.
• 0:12
  I'm feeling very good about where we are.
• 0:14
  I have 40% case in my opinion is that we have a FOMO event precipitated by instability and confidence.
• 0:22
  The terminal values begin to erode materially across a lot of other financial assets
• 0:26
  and Bitcoin looks mighty shiny at that point.
• 0:29
  The orange will have glitter.
• 0:30
  The way you manage the rates down is through abundant liquidity and the money printer.
• 0:36
  And all roads lead to Bitcoin.
• 0:46
  Hey, everybody.
• 0:47
  Welcome back to The Income Show.
• 0:49
  This week I have on Tad Smith.
• 0:51
  Tad, welcome.
• 0:53
  Joe, thank you very much.
• 0:55
  Good to be back.
• 0:56
  How are you?
• 0:57
  Doing great.
• 0:58
  Doing great.
• 0:58
  Glad to have you back. I think this is going to be an awesome conversation. We have a lot to talk about.
• 1:04
  Well, and what a perfect time to have a conversation like this. I mean, it's been just macro insane, crypto insane, AI insane, Fed insane, Besant insane. I mean, where to go?
• 1:15
  So lots of lots of potential great topics.
• 1:18
  So I want to start off more on the macro side.
• 1:22
  For the audience, we are recording this on September 17th.
• 1:26
  So yesterday was the Fed rate decision where they did decide to hike rates.
• 1:32
  I'm curious, what did you make of that?
• 1:34
  Does it matter?
• 1:35
  Did it influence how you allocate capital?
• 1:38
  How are you thinking about that?
• 1:39
  Yes, well, it gave us it gave me a buying opportunity, which I took advantage of between
• 1:44
  like 3.10 p.m. yesterday afternoon, Eastern time, that is, and market close at four.
• 1:50
  So that's the end of the answer.
• 1:52
  The longer answer is, you know, I think he's, the new Fed chair is four for four.
• 2:02
  He's come out now four times, and every time he comes out, the market tanks.
• 2:07
  um and um uh i don't i i i mean you know four is not a mehsele a statistically significant
• 2:17
  average but here we are what can i say i don't know i just don't think um i i think he's
• 2:25
  making a lot of changes in a lot of waves and they're they are it's challenging for the market
• 2:32
  to get its mind around it, and it creates a lot of uncertainty.
• 2:36
  But I have to say, I thought yesterday's move of raising the rate by sort of 25 bps,
• 2:49
  obviously it was so-called priced in by the market to some extent going in.
• 2:54
  But honestly, it's a curious move.
• 2:58
  And what do I mean by that?
• 2:59
  What I mean by that is if you take away the reason as being it's really a Fed credibility thing, there's some very good reasons why you didn't need to raise rates.
• 3:16
  And there was a lot of smart money that said you didn't need to raise money.
• 3:20
  By the way, some very smart money that said, one of them, Jeffrey Gundlach, the bond king, said you should have raised 50 basis points.
• 3:26
  But that's, of course, he's a bond king.
• 3:28
  That's what he's all about.
• 3:29
  But there were lots of people, Paulson and others, Jim Paulson and a variety of others that said, you know, there really isn't a particular case for moving right now.
• 3:37
  And I didn't think his case for moving right now was particularly good.
• 3:41
  It sort of boiled down to it's been, you know, a while that we've been above 2 percent.
• 3:48
  Interestingly, though, you know, the CPI averaged 2.1%.
• 3:56
  By the way, the core CPI between 2016 and 2019, it peaked at 6.6 in September of 22.
• 4:04
  It's only 2.4 now.
• 4:06
  And the three-month annualized is actually 2.0 core CPI.
• 4:13
  So there isn't a screaming need to do this.
• 4:18
  He then actually waded into this whole interesting topic about, well, you know, the geopolitical situation is such that we probably need to get ahead of a problem there.
• 4:29
  And anyone that knows macroeconomics knows that the Fed, at least directly, can't really do much about supply shocks.
• 4:38
  What it can do is put a layer of demand suppression in place so that it doesn't create secondary effects.
• 4:46
  but wages are very tame right now.
• 4:49
  The labor market is not particularly hot.
• 4:51
  We can go into data on that if you like.
• 4:54
  It's a sort of no hire and no fire economy.
• 4:59
  We get very interesting stats on that.
• 5:01
  And it's true that last month
• 5:03
  we had a reasonably decent labor print,
• 5:06
  but that obscures the prior 12 months.
• 5:09
  And if you look at the data on that,
• 5:10
  it's a little troubling.
• 5:12
  And the last six months have been just a teeny bit better
• 5:15
  But the reason we have the unemployment rate as low as it is is largely because of participation.
• 5:22
  People are just leaving the labor force, and it's more than just immigration, by the way.
• 5:25
  So I look at it and I say the labor market isn't great.
• 5:29
  It's certainly not burning up.
• 5:31
  And by the way, wages aren't soaring, so we don't have a lot of wage pressure.
• 5:35
  The outlook on inflation in the Treasury market is minimal.
• 5:41
  This was just I want to do it because I can.
• 5:45
  kind of thing. There you go. Yeah. Where does Secretary of the Treasury,
• 5:52
  Treasury Scott Besson kind of fit into this whole picture of massive U.S. government deficit and
• 5:59
  the Fed actively raising rates now? Okay, so here's where I part company with
• 6:05
  someone vastly smarter and frankly wealthier than I, and that's Druckenmiller. On this one,
• 6:11
  And let me just say, I have a tremendous amount of respect for and empathy for the Treasury
• 6:17
  Secretary because he seems to be the only person in Washington, D.C. that is, frankly,
• 6:22
  the only person, period, that is dealing with reality.
• 6:26
  Yes, in theory, we would love it if the Treasury didn't have to manage the yield curve and
• 6:31
  Operation Twist or Operation Twist Lite or I am the house.
• 6:35
  I don't care.
• 6:36
  Well, I don't know what we're going to end up calling this policy that he's playing with.
• 6:39
  But by and large, he's the only one trying to solve the problem of how are we going to finance the deficit over the medium to long term.
• 6:48
  He really is. He's the only one doing it.
• 6:50
  Nobody in Congress is doing it.
• 6:51
  The administration is not doing it.
• 6:53
  The Secretary of the Treasury is the only one doing the job.
• 6:56
  Yes, we'd all like to close our eyes and hold our breath and pretend like there's not a deficit problem and the Fed can figure out a way to do it the old fashioned way by bringing taxes in line with revenue.
• 7:07
  But that's simply not going to happen.
• 7:08
  We know that.
• 7:09
  You know that.
• 7:10
  Druckenmiller knows that.
• 7:12
  Everybody knows that.
• 7:12
  So the options are relatively grim, except, frankly, for the one the Secretary of the Treasury is attempting to do.
• 7:21
  Now, am I talking my book?
• 7:25
  Sure, in the sense that I believe the kinds of assets I hold, I hold them because I actually believe his is the only logical answer.
• 7:34
  It's not about him.
• 7:35
  It's just he's the one who's actually saying and doing the only thing that makes sense.
• 7:39
  The Fed, meanwhile, is abundantly focused on things that are not strategic. They're on things like, do I have credibility? What will the market say? All these things. These are not about financing the federal government. These are not about the labor market because it sort of ignored that. These are not about inflation. I mean, it's under the rubric of inflation.
• 8:04
  Of course, we all know that inflation has been above their target for too many years, but we forget that target was made up by, I think it was the Fed director or the Fed banker that ran New Zealand 30 years ago.
• 8:16
  I mean, really, literally just 2% is a completely made up number.
• 8:20
  So all of this is an interesting time to wonder whether anyone is really thinking about anything
• 8:29
  other than Besson, who is clearly thinking about, OK, I got a big job to do.
• 8:34
  And look it isn pretty but somebody got to do it I going to do it And so he is I think he is correct He the house Yeah Do you remember a couple of weeks ago when Bessa and Warsh I think we like getting off the plane together and having a conversation
• 8:48
  Like, what do you think that they were talking about?
• 8:50
  Well, first of all, they meet every single week.
• 8:52
  Okay.
• 8:52
  I think I can't remember where I got that, but there is no daylight between the two of
• 8:56
  them.
• 8:57
  Literally none.
• 8:58
  Now, by the way, when there's no daylight between two people, it doesn't mean that everything
• 9:02
  that each person knows is shared with the other.
• 9:05
  It just means the Fed chair has a different job.
• 9:11
  I'll give you an example.
• 9:12
  The problem for this administration would be very significant if the chair of the Fed, the one they installed there four months ago or five months ago, whatever it is, lost the confidence of the market.
• 9:25
  It's just, I mean, so let's just deal with that.
• 9:27
  And because that outcome is so unacceptable on its face for the secretary of the Treasury, the president of the United States, frankly, the United States generally, that if we have to do a little bit of theater at the Fed to give the market confidence that the Fed is independent, which honestly, I think to a great extent it is, that the chair of the Fed is not a sock puppet.
• 9:50
  He's not. He's a very thoughtful individual. He's very bright. And he's certainly qualified to do the job.
• 9:56
  and that they are on the case about inflation,
• 10:00
  it's good for the administration to have that in place.
• 10:03
  It's also good for the administration to get the rates down
• 10:05
  so that he can finance things better.
• 10:07
  And the president made that clear in his post last night.
• 10:10
  Whether we agree with his macroeconomics, that's another story.
• 10:12
  But the point I'm making is, so for them to hold their breath
• 10:17
  and look the other way while the Fed comes out
• 10:18
  and raises rates a little bit, inconsequentially,
• 10:21
  I don't think it's a big deal.
• 10:22
  And I think Besson expected it.
• 10:24
  And by the way, maybe even have anticipated it when he was beginning to signal to the market as he did in August saying, hey, I may engage in this little bit of Operation Twist.
• 10:37
  What do you think will be the playbook from a year for both the Fed and the Treasury, maybe over the next six to 12 months?
• 10:45
  Treasury is going to buy back a lot of bonds.
• 10:48
  I think it's not going to be $6 billion.
• 10:50
  I think it's going to be a lot more.
• 10:51
  He's even said so.
• 10:52
  I mean, he has begun to telegraph to the market, the TGAs.
• 10:57
  By the way, I'm a good company.
• 10:58
  I mentioned Jeffrey Gunlock yesterday.
• 11:00
  He did a very nice interview at the conclusion.
• 11:02
  And he said the same thing.
• 11:04
  And by the way, he's one of the biggest hedge fund bond investors that there is.
• 11:08
  And he basically said, unless the tenure is at 6.5%, I'm not buying.
• 11:12
  Well, the tenure can't go to 6.5%.
• 11:14
  He knows that.
• 11:15
  And so what has to happen here is somebody else is going to have to step in.
• 11:18
  And he knows exactly who it is.
• 11:20
  It's the Secretary of the Treasury.
• 11:21
  They're going to have to have some version of yield control, yield curve control.
• 11:26
  I'm not even speaking out of school.
• 11:28
  Gunlack said it, and I agree with him.
• 11:29
  I agreed with him before he said it, and I think he's an expert on this, a far greater.
• 11:33
  He's forgotten more than I know, and he said it.
• 11:35
  I think it's absolutely right.
• 11:37
  We're going to have yield curve control.
• 11:39
  As far as the Fed, the Fed, I think, will reverse themselves or become much more dovish very, very fast
• 11:47
  because I don't think the data support a significantly hawkish position.
• 11:51
  and by the way all the noise in the marketplace about oh my god all these other hikes and all
• 11:56
  this and the sap and everything oh come on that's all nonsense it'll go away yeah i want to pivot
• 12:01
  slightly to talking about ai i mean obviously that's been the talk of the town for the last
• 12:07
  24 months at this point people have argued that it's taken away capital from bitcoin or some people
• 12:13
  have argued it's kind of sucked liquidity out of uh the treasury market i guess as well it is
• 12:19
  bidding for bonds. I mean, who was bidding for bonds a year ago? No, the only one was the treasury.
• 12:25
  So yeah, now there's actually a market for bonds, high quality, good quality bonds.
• 12:32
  So what do you make of what's going on in AI? Is it a bubble?
• 12:36
  No, no, no, no, no, no, no. It's not a bubble. By the way, the markets will ebb and flow. So I'm
• 12:43
  not saying it can't go down. Of course, I'm not giving financial advice anyway, but of course it
• 12:47
  can go down and by the way we saw that in and was it june or july i can't remember which
• 12:50
  june and late june and all of july july is terrible i mean july had um i think geordie
• 12:57
  visser said that it had the he showed a chart it was fascinating the single highest um volatility
• 13:05
  on a momentum trade that had ever been measured wasn't like negative 40 some unbelievable number
• 13:11
  And if you were in that, along with situational awareness and all the sort of copycats, you got crushed.
• 13:21
  So what do I think? I think there's no question that AI and frankly, the how shall I say the sort of hardware AI trade has materially outperformed Bitcoin over the last sort of up and certainly up until very, very recently, up until really August.
• 13:39
  and yeah, for retail traders,
• 13:44
  it's just, you couldn't get,
• 13:45
  I mean, Bitcoin, who cares?
• 13:47
  Volatility was dead.
• 13:49
  The asset had narrative problems.
• 13:53
  Korea wasn't interested.
• 13:54
  Japan wasn't,
• 13:55
  Japan's not that much interested anyway,
• 13:57
  but Korea's not interested.
• 13:58
  There's no retail.
• 13:59
  So there's no energy at all in it.
• 14:01
  And when that happens,
• 14:03
  the narratives,
• 14:03
  oh, it's so yesterday.
• 14:05
  Bitcoin doesn't mean anything with AI.
• 14:07
  All this stuff.
• 14:08
  It's classic bear market stuff. And the only people that were and eventually in August, it ran out of sellers.
• 14:18
  By the way, there was again, I'm quoting all these different wonderful sources.
• 14:22
  I think it was James Check that's made the point that right before it got a little bit of life in August, Bitcoin had the highest percentage of ownership of long-term holders ever in the history of the asset.
• 14:39
  It's like 83%.
• 14:41
  I'm going to get the number.
• 14:42
  It's over four-fifths of it.
• 14:44
  Dead as a doornail.
• 14:46
  Couldn't get arrested, Bitcoin.
• 14:48
  Quick pause.
• 14:48
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• 14:55
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• 14:59
  Like this video and subscribe to the channel.
• 15:01
  That's it. Now back to the conversation.
• 15:04
  Speaking of AI, I also want to ask you about kind of what's happened with Dario, Elon.
• 15:10
  Like they've made posts recently, specifically mainly Dario, about kind of slowing AI development.
• 15:16
  And then we saw Zuckerberg kind of come out and say the opposite.
• 15:19
  Actually, like we don't need this little AI development necessarily.
• 15:22
  What do you make of all of that happening in the AI world?
• 15:26
  Three cheers for Zuckerberg.
• 15:27
  That's what I make of it.
• 15:29
  And I'm going to give four cheers for Alex Karp of Palantir, who came out and said what was absolutely true,
• 15:35
  which is if you are running a company that is creating a dangerous product or a potentially dangerous product
• 15:44
  or a product that is revolutionary and fantastic and nirvana,
• 15:48
  but it has a small probability of creating a really big problem,
• 15:53
  the law is pretty clear on this already,
• 15:56
  which is you've got a real product liability issue,
• 15:59
  certainly civil and potentially criminal liability issue.
• 16:02
  And so, by the way, that's not a newsflash.
• 16:05
  And if you head down that path,
• 16:09
  blind to the potential effects of what you're potentially unleashing,
• 16:15
  then you've got a big problem.
• 16:17
  But the Frontier Labs CEOs are a little bit locked in
• 16:22
  because they have investors that have just put in a lot of money at huge valuations.
• 16:28
  By the way, absent the product liability and the risks,
• 16:32
  the valuations to my mind are very reasonable.
• 16:34
  But with those, they're much more complicated.
• 16:37
  And so what better way to solve your problem
• 16:42
  with this potentially edge case dangerous product
• 16:46
  than to say, well, maybe I can socialize
• 16:50
  the risks of this product on the federal taxpayer
• 16:54
  via regulation or the U.S. government
• 16:57
  or something like that.
• 16:59
  Alex Karp said it plain as day today.
• 17:02
  Palantir, of course, he's been critical
• 17:04
  of those guys in the past, but he wasn't.
• 17:06
  He's actually respectful of them intellectually
• 17:09
  as leaders and all this stuff,
• 17:11
  but he said, just look past what they're saying
• 17:14
  and look what they're doing.
• 17:16
  And I agree with him 100 By the way I am not one of those who doesn use AI And when I say use AI I not talking about Google
• 17:29
  I mean, we've got a fair chance, one in, say, five chance,
• 17:35
  that one of my teams of agents will take over this particular Mac studio
• 17:39
  in the middle of our talk today, Joe.
• 17:41
  So, I mean, I have so many projects running on this Mac studio,
• 17:44
  it's probably going to go up in smoke.
• 17:47
  So it's very possible we'll freeze
• 17:49
  and you'll wonder, Tad, what happened?
• 17:51
  And it will be agents will have taken over my computer
• 17:53
  because I use it that often,
• 17:55
  all day long, all night long, all the time.
• 17:57
  And it's doing constant piles and piles of work for me.
• 18:01
  So I would say I'm pretty far,
• 18:02
  by the way, building things for me.
• 18:04
  I'd say I'm pretty far down the hole
• 18:06
  of being on the AI train.
• 18:08
  I'm not just some independent pundit.
• 18:10
  Well, I am an independent pundit,
• 18:11
  but I'm not necessarily someone who's divorced
• 18:13
  from use of the product and understanding the power of it.
• 18:17
  I love it.
• 18:18
  Yeah, well, hopefully the agents can hold off
• 18:20
  for the next 40 minutes or so.
• 18:21
  I have put them in advance.
• 18:23
  I do see Claude as like four tabs open
• 18:25
  at the top of my Chrome here.
• 18:27
  And it's working on one in particular,
• 18:29
  but I think that task is not going to require
• 18:32
  taking over the computer.
• 18:33
  So I think we're good.
• 18:35
  Good to hear.
• 18:37
  One topic that's like commonly talked about
• 18:40
  in the AI community is like P-Doom.
• 18:42
  like the odds that AI ends up destroying the world
• 18:46
  or does something really bad.
• 18:49
  What's your take on that?
• 18:50
  Is the probability of doom quite high?
• 18:53
  Is it low?
• 18:55
  What do you think?
• 18:58
  I don't know.
• 19:00
  I really don't know.
• 19:03
  I will say count me firmly in the abundance
• 19:07
  Peter Diamandis type tech acceleration camp on this one. I believe that the opportunities with
• 19:18
  the technology are extraordinary. I do believe it brings a lot of turbulence and disruption,
• 19:26
  including, by the way, I am not someone who's particularly bullish on the labor market. We can
• 19:30
  talk more about that if you have interest. And I do think it needs to be managed. And it's very
• 19:36
  important that we get on about it and swiftly. So if this sort of cri de corps on the part of
• 19:43
  the frontier labs results in something not like Sarbanes-Oxley, not like the usual jump, shoot,
• 19:52
  fire, then aim nonsense coming out of Congress, but something actually among the industry and the
• 19:59
  public service representatives together with other countries that are material that is constructive,
• 20:05
  sign me up since we are talking about yeah since we are talking about all the agents working and
• 20:15
  ai becoming you know vastly more productive and making so many processes significantly more
• 20:20
  efficient how are you thinking about the labor market like should the average american or
• 20:26
  white-collar worker all over the world be concerned about their job how do you how do
• 20:31
  you think about that now um well i think that if you are a knowledge worker and you are entirely
• 20:49
  unfamiliar with uninterested in not curious about not exploring not thinking about how to use ai
• 20:57
  then yeah, I think there is risk to your job.
• 21:04
  And some of it could be immediate.
• 21:06
  And by the way, you're seeing that in edge cases,
• 21:10
  like newly minted college graduates are having difficulty finding jobs.
• 21:17
  Some aspects of the labor force are under pressure.
• 21:21
  If you, for example, over the last 12 months,
• 21:24
  take out health care and you look at sort of information services,
• 21:27
  and finance and things like that,
• 21:28
  you see that the hiring has been negative
• 21:30
  on a net basis over the last 12 months.
• 21:32
  There are pockets.
• 21:34
  If you know where to look underneath the aggregate,
• 21:36
  you already see the effect
• 21:38
  that AI is having on the job market.
• 21:41
  And by the way, as myself, a CEO,
• 21:46
  and been a CEO a number of times,
• 21:48
  the quickest way you begin to see pressure
• 21:50
  in the job market,
• 21:51
  understanding how CEOs think,
• 21:53
  because I've been there a long time,
• 21:55
  is they stop hiring.
• 21:57
  And so a no hire, no fire market is a yellow signal.
• 22:04
  Now, if you've never run a company, you don't necessarily realize that.
• 22:08
  And the reason is because there is no harm whatsoever in stopping hiring.
• 22:13
  And this one I'm going to credit Jordy Visser again for it because Joe is such a good point.
• 22:18
  If you look at the explosion of revenue and earnings in the S&P 500, which is big tech, mainly AI, big tech, and the AI trade, and you look at the net hiring in those industries, it's flat to zero to down.
• 22:39
  I mean, when do you have earnings growing 20 plus, 30 plus percent and no hiring at all?
• 22:47
  I'm not talking just one quarter.
• 22:49
  I'm talking quarter after quarter after quarter after quarter after quarter.
• 22:53
  When do you have the revenue growth going up and to the right and employment is flat?
• 23:01
  Can you blame that on immigration?
• 23:03
  No, it has nothing to do with it.
• 23:06
  Fundamentally, the revenue and the earnings of our largest corporations, our most valuable companies, the most valuable and productive companies in the world are accelerating.
• 23:16
  and the hiring is zero.
• 23:18
  That is telling you all you need to know.
• 23:21
  The total factor productivity
• 23:22
  being contributed to by labor is falling.
• 23:28
  So if, I guess the importance of labor
• 23:31
  or like the usefulness
• 23:33
  and then I guess the percentage of our GDP
• 23:36
  that kind of comes from human labor
• 23:38
  is like becoming less and less important
• 23:40
  and like CPI inflation is partially driven by,
• 23:45
  Are people getting a lot of raises and is the labor market too hot?
• 23:50
  Does that mean we're going to enter a period where CPI continues just slowly decreasing and decreasing?
• 23:56
  And it might be hard to get CPI significantly higher.
• 24:02
  That's the period we're in.
• 24:04
  By the way, the only reason CPI is climbing at all, by the way, is because of energy.
• 24:11
  That's it.
• 24:12
  that's that's what's driving the cpi up energy um and so um what else to say
• 24:21
  so once we get past that or once energy can kind of once it does whatever it does exactly okay fair
• 24:30
  yeah like if we get past that are we like approaching some sort of economic boom or or
• 24:36
  Or is that too optimistic?
• 24:38
  Well, sorry.
• 24:40
  I mean, we are in a heck of a, you know, we're in a solidly good GDP zone right now, by the way.
• 24:50
  I think we're going to have a pretty strong third quarter.
• 24:51
  And by the way, if we didn't have tariffs and we didn't have a war underway, we'd be even we'd be sitting in the catbird seat.
• 25:04
  But even with those, it's still pretty strong.
• 25:06
  It just isn't a great hiring environment.
• 25:08
  In fact, it's a lousy one.
• 25:11
  Tad, since this is the income show, I do want to ask you about kind of income investing broadly.
• 25:18
  Like, how do you think about allocating your portfolio or how should one think about allocating their portfolio?
• 25:24
  Should there be mainly growth assets?
• 25:27
  Should there be income assets?
• 25:28
  Like, what are good income assets in your view?
• 25:30
  Okay. So as I said, I'm not going to give anybody else advice, but I will tell you what I do. How's that? Can I give you my opinion about what works for me? For me, I am a believer in growth. And I think there are so many growth opportunities that that's where I focus.
• 25:51
  however i also have near cash things and for that you know i use at the moment i got some t bills got some cash on hand and honestly i have Stretch too by the way I like that one Interestingly I don have Strive comparable product which is not even comparable
• 26:10
  It's superior in some ways, in my opinion.
• 26:12
  I know you can't talk about Strive, but I can.
• 26:15
  But I love your stock.
• 26:19
  So I'm in that.
• 26:20
  And for me, talk about a growth stock.
• 26:22
  I think I had another good day.
• 26:23
  I mean, we're not quite closed yet.
• 26:24
  What is it?
• 26:25
  It's like 325 Eastern Time.
• 26:26
  So we got 35 minutes, but you're up 6.5% again today on not much going on.
• 26:33
  So I like your stock too.
• 26:35
  So those are the kinds of things I look at.
• 26:38
  But I am also deeply in the AI trade as it has been,
• 26:44
  and also particularly in what I call crypto rails trade.
• 26:50
  And that's areas such as anything in the world of agentic commerce.
• 26:54
  I think all of that is going to move onto digital rails.
• 26:58
  I'm in a lot of trades like that.
• 27:01
  So that's it.
• 27:02
  I've got a sort of barbell strategy, which is things that are high risk, extremely high growth, extremely high return.
• 27:09
  And then I've got a fortress of stuff that you would recognize.
• 27:13
  I've got Bitcoin and cold storage.
• 27:14
  I've got real estate.
• 27:16
  I've got some intangible assets like art and some other things, but also some cash products that provide high income.
• 27:23
  And then for the really secure stuff, it's basically short-term T-bills.
• 27:29
  By the way, no bonds.
• 27:30
  Not a bonds guy.
• 27:32
  No bonds, fair.
• 27:34
  Duration plus fixed income to me I don't think is a good trade.
• 27:38
  Yeah, that's very reasonable.
• 27:40
  Even at 5%, not a good trade.
• 27:44
  What's the rate where you would say it's a good trade?
• 27:48
  Or is your view kind of what you stated earlier where like, yeah, at a certain rate?
• 27:52
  I'm getting what 12% or something from Strat.
• 27:55
  Fair.
• 27:56
  So that's your rate.
• 27:57
  Yeah.
• 27:57
  And by the way,
• 27:58
  and I can trade out of it anytime I want to.
• 28:01
  And I've forgotten what is Strive currently.
• 28:03
  You guys are selling the preferred share at what?
• 28:06
  Is it 11% or 12%?
• 28:07
  I think it's a lot.
• 28:08
  There's a 13%.
• 28:09
  13%.
• 28:10
  Okay.
• 28:11
  By the way,
• 28:11
  the only reason I don't have yours
• 28:13
  is because I really just haven't,
• 28:18
  I have to break the habit.
• 28:19
  I've got to actually just make the switch.
• 28:22
  But I, as I said, I love your stock.
• 28:25
  Yeah, you're a busy guy.
• 28:28
  Yeah, I guess thinking about stretch and just digital credit broadly,
• 28:32
  where do you put that on the, I guess, maybe not risk spectrum,
• 28:38
  but just generally how you think about it with T-bills on the least risky side
• 28:43
  and then Bitcoin and AI crazy stocks on one side.
• 28:49
  Where do you put that?
• 28:50
  Like, where does it align, do you think?
• 28:53
  Well, T-bills to me, I think the matrix,
• 28:56
  I would slightly adjust your matrix,
• 28:58
  which is risk, higher, lower,
• 29:02
  and then duration is a key component.
• 29:06
  I'll give you an example why.
• 29:08
  If you told me I have to put a dollar into something
• 29:12
  and I can't touch it for 10 years,
• 29:15
  I would much rather have Bitcoin than I would T-bills.
• 29:19
  not even close call.
• 29:22
  If you tell me I have to put a dollar into it
• 29:24
  and I need to spend it next week,
• 29:26
  I'm going to put it in T-bills and not Bitcoin.
• 29:30
  And that's really the key issue,
• 29:34
  which is when do you need the money?
• 29:36
  And so the longer you need to put something away,
• 29:40
  the more volatility and growth, I believe,
• 29:44
  for my portfolio I want to have.
• 29:46
  and the sooner you need the money
• 29:49
  and the less risk you can,
• 29:51
  the less volatility you can stomach,
• 29:53
  that's how I think about it.
• 29:55
  And so that's why I say it's really a two by two matrix,
• 29:58
  which is there's a block of stuff
• 30:00
  that is very long duration
• 30:01
  and you want to have as much volatility,
• 30:03
  as much growth as possible in it
• 30:04
  with, by the way, one exception,
• 30:06
  which we'll come back to in just a minute.
• 30:07
  And then there is a block where you need the cash soon
• 30:10
  and you want to have the maximum possible return on it
• 30:12
  consistent with low volatility.
• 30:14
  What did you make of the volatility and stretch in digital credit over the summer?
• 30:22
  Did it?
• 30:22
  Spectacular mistake on the part of a team that I admire.
• 30:28
  It was just a colossal mistake.
• 30:30
  Now, I'm not going to get into the diagnosis of the mistake.
• 30:33
  I can give you as an investor what I observed.
• 30:36
  I observed that when they decided to spend the dividend reserve or substantial portion of the dividend, 1.6 billion, I think it was, to acquire the convertible bonds.
• 30:55
  As a mathematician, that's a good idea, right?
• 30:58
  They were trading at a discount.
• 31:00
  It was a nice, secretive transaction, everything else.
• 31:02
  but it was not sensitive to the reflexivity of the market and the sensitivities of the investors who
• 31:08
  had gotten into stretch and moreover it made them vulnerable to short traders and i don't know what
• 31:14
  the mix of the stretch portfolio uh they had issued was but my guess is it was highly sensitive to
• 31:21
  one or more large institutions that could put a lot of pressure on the price really fast but it
• 31:27
  the stretch to if they sold a lot.
• 31:30
  And if they sell and put a little pressure on the stretch price, when the marketing message,
• 31:36
  however constructed, has been, we target par, it yields vulnerability to further selling
• 31:45
  and further fear and further shorts.
• 31:49
  And so it was just a singular mistake.
• 31:55
  That's what I would say.
• 31:56
  It was just an error.
• 31:57
  do you think that eventually you know that mistake will pass and well it's already but what
• 32:05
  what's stretch trading at right now i mean you could look it up i guess 98 maybe yeah well all
• 32:10
  right uh didn't it hit 80 or something it can't call it 80 or 79 it was it was ugly might even
• 32:17
  have gotten mid 70s i i don't want to look i don't want to look away at the screen at the minute but
• 32:20
  we could look at what the low was and that tells you all you need to know there was a by the way
• 32:24
  There's a lot of blood between 179 or 80 or whatever the name is on an instrument that was supposed to be that I just told you several minutes ago I have as a safe instrument.
• 32:36
  Not safe.
• 32:37
  It's not safe like a T-bill.
• 32:38
  T-bills are safe in the short term.
• 32:41
  But it's something where I park cash for medium term or low medium term uses.
• 32:47
  And no, signing up for 80 on the stretch is not what I do for sure.
• 32:52
  98 I can tolerate it.
• 32:54
  Did you consider like panic selling or no?
• 32:58
  I did own some stretch.
• 32:59
  And here's what happened with my,
• 33:01
  you want to hear my story on this?
• 33:02
  Is this interesting to you or not really?
• 33:04
  Okay.
• 33:04
  Yeah, definitely.
• 33:05
  What happened for me with stretch is very interesting
• 33:07
  because I had been in it up until sometime.
• 33:12
  I've forgotten when they had this problem,
• 33:14
  maybe June or July.
• 33:15
  I've forgotten when it was.
• 33:16
  But what happened is I saw it creep down to like 92 or 93.
• 33:23
  and this was before the whole convert thing went.
• 33:26
  And I said, you know, that really is irresistible
• 33:29
  because earlier it had done that
• 33:31
  and I bought some and it bounced right back.
• 33:34
  And so I bought some at 92 or 93.
• 33:36
  And then as I recall,
• 33:37
  Bitcoin had a little tick up at some point.
• 33:40
  And I was watching it day by day.
• 33:43
  And I saw it get back up to like 94, 95, 96.
• 33:48
  And I said, oh, good,
• 33:48
  I'm going to make a little extra money.
• 33:50
  And then weirdly, I'll never forget exactly,
• 33:52
  So Joe, it went back down to back from like 96 and a half to 95.
• 33:59
  I've forgotten what days it was.
• 34:00
  It doesn't matter.
• 34:01
  And I said, you know, I can't explain why that's doing that.
• 34:09
  And if I can't explain it, I don't want to own it.
• 34:12
  And so I literally, when that happened, I called JP Morgan.
• 34:16
  That's where I'm back.
• 34:17
  That's where that's.
• 34:18
  And I said, exit, all of it.
• 34:20
  Just get out of it.
• 34:21
  I don't know what's going on here.
• 34:23
  I can't explain it.
• 34:24
  And if I can't explain it, it makes this is this is not a part of my portfolio that I have a lot of risk tolerance for.
• 34:32
  So and so I was out when it shortly after plunged and interestingly didn't buy down in the
• 34:42
  sort of low 80s or anything like that.
• 34:45
  But where I did put a little money to work,
• 34:47
  by the way, was actually Strike,
• 34:48
  S-T-R-K, which as you know,
• 34:50
  is the perpetual convertible.
• 34:51
  That one I did because I have both shares
• 34:55
  in MicroStrategy, although hedged,
• 34:57
  in a variable forward sale.
• 35:00
  So I have them hedged,
• 35:02
  but also I have confidence
• 35:04
  in the long-term outlook of the company.
• 35:07
  And that's capital that is not near-term-ish.
• 35:11
  That's long-term capital.
• 35:13
  So I view that as a nice place to park money
• 35:15
  while I'm living through a bear market in Bitcoin
• 35:18
  and waiting to buy more.
• 35:21
  So yeah, I experienced it firsthand, and that is the story.
• 35:24
  I literally, that's why I missed the sort of drawdown to 80.
• 35:27
  Yeah.
• 35:28
  Maybe let's shift to Bitcoin,
• 35:30
  since you did kind of mention that we kind of have been
• 35:34
  in this bear market for Bitcoin,
• 35:35
  despite strength in, you know, SB500 and most broad-based indexes.
• 35:42
  You know, what do you make of Bitcoin right now?
• 35:44
  I like it.
• 35:45
  I'm very bullish.
• 35:47
  And the fact that a lot of people aren't makes me more bullish.
• 35:51
  I love that people say it's still going to 40.
• 35:55
  I want people all over the internet screaming the end of time is nigh.
• 36:01
  I don't think it is.
• 36:02
  I'm feeling very good about where we are.
• 36:04
  it's behaving even in the last few weeks.
• 36:09
  Joe, when you think about the pounding Bitcoin has gotten just in the last two weeks,
• 36:15
  Fed, war, inflation noise, bad labor, bad in the sense of hawkish labor report,
• 36:25
  Clarity Act going down the tubes, all this stuff.
• 36:29
  And it's still sitting at 76.
• 36:33
  I mean, that's telling.
• 36:34
  It is getting pounded every single day and still sitting right at 76.
• 36:41
  Somebody's buying a lot of it, steadily buying a lot of it.
• 36:45
  The other thing when you look at the on-chain data is long-term sellers aren't selling.
• 36:50
  You've got a little bit of selling as it jumped up from the low 60s, and it's tried to pierce the 80s, which it's gotten up there a couple times.
• 37:00
  But there's a little sell pressure right there, and it pushes it back down.
• 37:04
  We're sitting right where we want to be, in my opinion, and I like it.
• 37:07
  So I am definitely accumulating it for sure.
• 37:10
  And the more bearish stuff I see on it, the happier I get.
• 37:15
  When you think about Bitcoin in the context of the current macro situation that we're in,
• 37:20
  does the current macro situation really emphasize why you're so bullish on Bitcoin?
• 37:26
  Sure. We talked about it.
• 37:28
  Besant said the quiet part out loud.
• 37:31
  What did he say?
• 37:32
  He said, in other words, in much more elegant words, we need the rates to come down.
• 37:41
  He said it loud and clear.
• 37:43
  And the only way to do that is for me to manage the rates down.
• 37:49
  And he's already managing treasury volatility.
• 37:52
  And the way you manage the rates down is through abundant liquidity and the money printer.
• 37:58
  And all roads lead to Bitcoin.
• 38:02
  thinking maybe zooming out for a split second and thinking about, you know, where Bitcoin has been
• 38:09
  and where it might be going. What inning of global Bitcoin adoption do you think we're in at this
• 38:15
  point? Well, global Bitcoin adoption, I want to draw a distinction. Adoption for what is what's
• 38:22
  really interesting to me. For me, Bitcoin's role as a store of value is becoming stronger, deeper,
• 38:31
  and more powerful because Bitcoin is a scarce, algorithmically and mathematically scarce,
• 38:40
  engineered store of value in a world where agentic commerce is eroding all the barriers
• 38:47
  and slowly and then rapidly, both slowly first and then rapidly.
• 38:53
  And in that world, it's a great store of value.
• 38:57
  It's not a great digital transaction mechanism. It's not a great digital rail for agentic commerce. It's a really nice store of value of scarcity and safety and growth, too, by the way, in a world that is increasingly fraught with peril for investors who are trying to look for long-term opportunities.
• 39:18
  isn't great for agent of commerce all of that you know i i know some bitcoin people are ideological
• 39:26
  on this point i don't happen to be one i'm i'm i i think if it works it's great you know
• 39:31
  michael saylor famously called other um l1's venture projects and i think he i don't know
• 39:39
  how he meant it but i think he didn't mean it disrespectfully i think he actually called them
• 39:44
  right, which is they are incredibly powerful venture projects, and many of them are turning
• 39:49
  into something really exciting. So I'm in those too, but I think of them as different kinds of
• 39:54
  things than I think of Bitcoin. Bitcoin to me is long-term store value. Given your constructive
• 40:01
  outlook on Bitcoin, and we talked more about like digital credit and the preferreds a bit earlier,
• 40:06
  but maybe focusing more directly on the treasury companies, the ones that kind of
• 40:11
  our amplified Bitcoin per se, like strategy.
• 40:15
  How are you thinking about those now?
• 40:18
  Well, I own yours.
• 40:19
  As I said, I'm really pleased with it.
• 40:22
  The thing I like about yours is you,
• 40:26
  first of all, I have a great confidence
• 40:29
  in your management and your focus.
• 40:32
  And I think you guys do a really good job I have a lot of respect for Matt Cole If he listening send him my best If he not listening send him my best And I like it
• 40:42
  I'm a happy shareholder in you guys.
• 40:45
  And it's not just that you're a little bit off to the races.
• 40:47
  I am a long-term shareholder of MicroStrategy, so-called strategy.
• 40:55
  But as I said, for me, I don't have to make a lot of interim decisions on that one because
• 40:59
  what I do is I lock it away for a year or so. And then there's a day when it comes available and I
• 41:05
  have to make a decision. Do I want to relock it or not? That to me is a long term. Basically,
• 41:10
  I'm doing exactly what Michael Saylor once said that he suggested. I don't think he suggested it
• 41:16
  overtly because he doesn't get financial advice. But if he did, he would be saying, look, just,
• 41:20
  you know, accumulate. I'm thinking of me as a strategy hodler. That's really what I am. I'm a
• 41:26
  strategy hodler, and I have it hedged for periods of time. And then it comes out of the hedge,
• 41:32
  and then I re-hedge it for periods of time. And for me, that is a large position. I'm a very happy
• 41:37
  shareholder there, very happy long-term shareholder. And hopefully, one day I'll wake up,
• 41:43
  or one day it'll roll into my estate one way or another. So that's how I think about that one.
• 41:47
  With yours, I want to build up a nice position, and that's different. With MetaPlanet, by the way,
• 41:52
  interestingly i i like simon very much um and i have to tell you i've never bought meta planet
• 41:59
  and um i the reason i didn't is because when it originally was sort of a japanese thing was
• 42:07
  too hard to get my mind around and then it was sort of illiquid and i couldn't really figure it
• 42:11
  out i could figure out the business of course i understood the business but i couldn't really
• 42:15
  figure out how to deal with it it was a lot of paperwork i just didn't want to deal with it um
• 42:19
  And then it got up to shot up to whatever it was.
• 42:23
  And I said, oh, well, I missed that one.
• 42:25
  OK, well, that's fine.
• 42:27
  And then it got a little frothy and the balloon came off.
• 42:30
  And of course, by then, Bitcoin itself was beginning to give up the ghost a little bit.
• 42:36
  So I just never got into it.
• 42:38
  More recently, of course, I followed the noise about the compensation thing that Simon has and a little bit about that.
• 42:47
  I don't have any comment on that.
• 42:48
  I think they are trying to fix it. I think his communications, particularly the recent ones, are doing everything that is appropriate under the circumstances, at least from, again, not being a shareholder.
• 42:59
  But I understand and have respect for how they're trying to handle it and resolve the situation.
• 43:04
  So I don't have a problem with it. It's just not one that I've ever really gotten to.
• 43:07
  So, Tad, you brought up Strive.
• 43:11
  And one thing that's funny that either you may know or you may not know,
• 43:14
  but at your wine tasting party last year,
• 43:17
  that's when Matt Cole met Jeff Walton.
• 43:20
  So to Strive executive team members.
• 43:24
  Well, I'll give you a hint.
• 43:26
  You may not know this.
• 43:29
  Actually, I probably can't say.
• 43:30
  I'm sorry.
• 43:31
  I'll retire.
• 43:32
  We'll take that one offline.
• 43:34
  All right.
• 43:34
  Yeah, sounds good.
• 43:35
  But yes, there are lots of coincidences in Strive. I feel as though I have been behind the scenes and enthusiast for you guys.
• 43:46
  Yes. Well, thank you. And I remember when I started, when I was hosting you on a podcast last year, my first episode for that podcast was Michael Saylor.
• 43:56
  And then it was you. So it's kind of it's just kind of funny. And that was at Simler. And then Simler, you know, obviously became part of Strive.
• 44:03
  Eric's a great guy. He has a SPAC called Blazer. I'm an independent director on it, and I'm thrilled to be in business with Eric.
• 44:14
  I love it. Hopefully, I'm following that. I remember Eric telling me about that a good bit.
• 44:21
  Yeah, he's great. He's a terrific guy.
• 44:24
  Yeah, 100%.
• 44:25
  Also, I want to ask you about the Clarity Act.
• 44:29
  You know, that was hyped up this week. A vote came up pretty quickly, seemingly out of nowhere.
• 44:35
  I mean, it had been talked about for quite some time and the vote obviously this week failed.
• 44:40
  What do you make of that?
• 44:43
  Disappointing. Unsurprising.
• 44:48
  I think, you know, there is a lot going on in the room, so-called in the room.
• 44:54
  I'll give you an example.
• 44:55
  It is easy to say that the problem was the ethics provision. It's easy to make the ethics provision a problem. But when it got moved to September 15th, six weeks before the election, with all the noise going on, it's very difficult in that environment, a very heated environment, to get anything bipartisan done.
• 45:24
  It's just extremely difficult. Is there a little bit of a prayer for it in a lame duck session? Sure. But at the end of the day, nobody wanted to give either side.
• 45:38
  Nobody, the Democrats just didn't want to give the president a win.
• 45:42
  And I think the Democrats would take the position that the ethics position that they were insisting on, the Republicans didn't choose to force the president to agree to.
• 45:53
  And the president didn't want to agree to it.
• 45:55
  So there you go.
• 45:57
  It's horse trading.
• 45:59
  Yeah.
• 45:59
  But honestly, Congress has real difficulty getting basic stuff done.
• 46:03
  I mean, when you think about how hard it is to get Congress to extend the credit limit so that it can fund the government on things that it's already spent, it has a hard time, Joe, doing that to get a complicated bill such as Clarity across the line.
• 46:25
  And by the way it was made more complicated arguably by one large one key crypto CEO who had it allegedly at the goal line back in February or January whatever it was and decided to you know double down and see if he could get a bit more
• 46:42
  And where the banks are getting, you know, the banks have to give something up.
• 46:45
  It was a very fragile, large coalition around it in a particularly partisan heated environment.
• 46:53
  It's going to be very difficult to get it across the line.
• 46:56
  But the good news is we have energetic regulators at the SCEC and the CFTC, and they're already off to the races.
• 47:05
  Apkin's got his announcement out today, and I think it's the first of many to come.
• 47:09
  Yeah, it definitely seems like there will be clear rules around Bitcoin and crypto broadly, regardless of whether it gets passed.
• 47:16
  Yeah, clearer.
• 47:17
  And the key thing, remember, a lot of people say, well, it won't be legislative.
• 47:21
  Well, that's sort of, it is, of course, true at one level, but it's also not nuanced.
• 47:25
  And what I mean by that is two years of this administration under this SEC will be very difficult to reverse, particularly if you've got a lot of capital being deployed and a lot of adoption going on.
• 47:42
  It'll be very difficult. It won't be irreversible, but it'll be hard to reverse.
• 47:47
  And moreover, there won't be any incentive to take it on.
• 47:50
  So it just I mean, why why reverse it?
• 47:54
  They'll reverse things around the edges.
• 47:56
  They'll curb it a little bit.
• 47:57
  But mostly the out-of-power party will want to adopt.
• 48:02
  As those regulatory agencies do make the rules a bit clear,
• 48:06
  do you think that that will actually bring in more capital to Bitcoin
• 48:09
  and the whole space broadly or not necessarily?
• 48:15
  Well, the one regulatory thing they are actually moving out of the house,
• 48:19
  of course, is the tax provision related to Bitcoin.
• 48:22
  So that'll help.
• 48:22
  Technically, your answer, yes. In terms of the regulation for what I would call, broadly speaking, clarity-affected digital assets, I tend to agree with Saylor in one sense, which is that Bitcoin didn't need clarity. Bitcoin has clarity.
• 48:41
  But I do believe that a secondary effect of the broad, in my view, explosion, positive explosion of growth and innovation that's going to go on with agentic commerce across crypto rails.
• 48:58
  Ethereum, for sure. Solana also. Robinhood's growing as well, which is Ethereum again and an L2, if I'm not mistaken, other others.
• 49:07
  that will materially increase the relative value of Bitcoin.
• 49:18
  And what I mean by that is, and this is the point I was making several minutes ago,
• 49:21
  and I said maybe we'll come back to it.
• 49:23
  I believe that Jordy has this thesis, Jordy Visser has a thesis,
• 49:31
  which I think is very compelling, which is to say that as the agentic commerce speeds up,
• 49:39
  the uncertainty around companies' long-term prospects or even their medium-term prospects
• 49:47
  goes way up, which means that the terminal value of those companies' cash flows or prospective
• 49:54
  cash flows or forecasted cash flows goes down. And that introduces a level of concern
• 50:03
  about where to put your cash that is a new thing, a very new thing and a concerning new thing.
• 50:13
  And so there will be an increasing realization that, oh, my goodness,
• 50:19
  I'm not sure NVIDIA is going to be a long-term store of value. Now, you might laugh at that
• 50:27
  right now, but explain to me why NVIDIA is trading at a PE multiple that it's historic
• 50:35
  really low. It's really low right now. Sure, the value of it is gigantic because every institution
• 50:42
  in the world has to own it, but why is it so cheap relative to its growth rate? What's going on?
• 50:48
  Why are some of these fantastically successful companies, safe companies, trading at such low P.E. multiples?
• 50:56
  By the way, even though their growth rate is gigantic, what we're implicitly saying in the marketplace is that we don't trust the duration of their growth.
• 51:05
  And that is another way of saying that the overall level of volatility in the market and the prospects for the market have risen materially.
• 51:14
  And so people are looking for places, as I am, store value, safety, where am I going to get growth and safety at the same time, which is why I have a significant portion of my store value type assets in Bitcoin.
• 51:32
  So that's a way of saying a secondary effect of clarity will be, or just clarity on the regulatory environment for agentic commerce, will be the agents will accelerate, AI will accelerate, commerce will accelerate, and the uncertainty around the traditional business models will also accelerate.
• 51:57
  That increases their volatility. People will look for greater, safer stores of value. Bitcoin, baby.
• 52:03
  Yeah, I mean, the concept of the terminal value of an individual company shrinking over
• 52:11
  time due to that increased uncertainty, as you pointed out, makes perfect sense.
• 52:15
  With that context what do you think the economy even looks like five to 10 years from now Is it a bunch of smaller firms compared to mega corporations Like how much changes That is a really good question I have something really funny to tell you
• 52:36
  I just told you the agents would take over my computer. They did. I've lost my picture.
• 52:40
  Can you see me? Oh, no. Yes, I can see you.
• 52:43
  Okay, well, I'm just going to go ahead and finish the question. But if I look a little
• 52:48
  befuddled it's because it literally
• 52:51
  agents have taken over the computer and they're doing an entirely different thing. I can't see you.
• 52:56
  So I'm sorry about that. It's kind of funny. It says my call
• 52:59
  is in another window. Let me see. Bring call back here. Let me see if I can do that one sec.
• 53:03
  Oh, there we go. Got it. But literally they just hijacked the computer.
• 53:06
  It was sort of unnerving, actually, I have to say. I'm sorry. Can I have the question again, please, Joe?
• 53:11
  Yeah, just the idea of, okay, AI is creating a lot of uncertainty,
• 53:15
  the terminal value.
• 53:18
  And then what does the economy look like
• 53:19
  for five to 10 years from now?
• 53:24
  There is much greater volatility in financial assets.
• 53:31
  Bitcoin and crypto both are a much larger proportion
• 53:35
  of all assets value, by the way.
• 53:40
  More companies, more small entrepreneurial companies
• 53:43
  are a greater portion of value.
• 53:46
  There'll be some very big ones,
• 53:47
  but there are a lot of medium-sized
• 53:49
  big companies right now
• 53:50
  that will be under a lot of pressure
• 53:53
  for a lot of time
• 53:54
  that just aren't going to make it.
• 53:56
  I don't mean to be grim,
• 53:57
  but there's a lot of NGMI's
• 53:59
  in the S&P 500.
• 54:02
  And I think the GDP will be much higher.
• 54:08
  We're going to have
• 54:09
  a lower labor participation rate
• 54:12
  significantly,
• 54:13
  lower labor participation rate. Everyone will be more productive. And I'm optimistic,
• 54:20
  but not confident yet, but optimistic that all sorts of exciting things will happen.
• 54:27
  We had Navier-Stokes solved in the last few weeks. Moderna and Merck came out with a,
• 54:35
  I think it was a vaccine for melanoma, if I'm not mistaken. I think it's actually a vaccine.
• 54:40
  And I believe we're going to have significant additional health things that stretch us out in terms of longevity as well as health blinges.
• 54:51
  I mean, you know, one thing that I think it was actually Peter DeMondis that said this.
• 54:55
  He's exactly right.
• 54:56
  Or maybe it's Alex Wichner Gross.
• 54:57
  I think that when you look back from 10 years or 20 years from now, you will see GLP-1s as the first longevity drug.
• 55:06
  And I think we're going to be healthier and living longer.
• 55:09
  and I think we're going to have to completely redo our education world.
• 55:15
  I wouldn't be, I would be very careful now about sending my kids to college for the first time.
• 55:25
  Now I'd be thinking about what really makes sense.
• 55:27
  There are lots of things that broadly speaking, if we can keep our governance and keep our polity and keep our heads about us,
• 55:36
  good things are going to happen.
• 55:38
  I agree with that.
• 55:39
  I agree with that.
• 55:41
  By the way, your stock's going to be a hell of a lot higher.
• 55:43
  You didn't ask me and you're not allowed to, but I can say that.
• 55:46
  I'm not even pitching.
• 55:47
  I'm just a happy shareholder.
• 55:50
  It's great to hear.
• 55:52
  Michael Saylor's stock's going to be a hell of a lot higher too, if you ask me.
• 55:55
  But again, not for potential advice.
• 55:56
  That's just my opinion.
• 55:58
  Makes sense.
• 55:59
  Tad, maybe last question.
• 56:00
  We can start to close it out.
• 56:03
  Bitcoin, you know, you're constructive.
• 56:05
  Makes a lot of sense.
• 56:06
  what's your like base case for kind of where we are in 2030 is is the power law a good base case
• 56:12
  what's like a realistic kegger that you think that bitcoin might do over the coming four years or so
• 56:19
  well um the challenge with 2030 is that it's um i don't know what the world looks like then
• 56:29
  but if you want a good guess
• 56:34
  do low this cycle to low last cycle
• 56:40
  that's growing what 33-34%
• 56:43
  per compound and annually per year
• 56:45
  and then play that forward
• 56:50
  and then do high this cycle
• 56:52
  or last cycle to high prior cycle
• 56:55
  that's growing and then play that forward
• 56:57
  and it's probably a good guess.
• 57:01
  So 30 to 40% or so?
• 57:03
  30 to 40%.
• 57:04
  I don't know why.
• 57:06
  I mean, I know why a year and a half ago
• 57:09
  we talked about why it would slow down.
• 57:11
  Sure, it'll slow down a little bit,
• 57:12
  but I'm not sure it's going to slow down
• 57:15
  as much as we think.
• 57:16
  There is an alternative,
• 57:17
  which is the growth rate,
• 57:19
  even though it's larger,
• 57:20
  you would expect it to begin to slow down,
• 57:22
  which is the base case.
• 57:23
  Let's take that as the base case.
• 57:24
  But I think it's a 60% case.
• 57:26
  A 40% case, in my opinion, is that we have a FOMO event precipitated by instability and confidence, not bubble stuff.
• 57:39
  I'm not talking about bubble stuff because I'm not on the bubble train.
• 57:42
  But that the terminal values begin to erode materially across a lot of other financial assets, and Bitcoin looks mighty shiny at that point.
• 57:51
  The orange will have glitter.
• 57:53
  I agree with that.
• 57:54
  I think that's a great spot to end it.
• 57:55
  Tad, any additional final closing thoughts?
• 58:00
  Joe, you guys just keep doing what you're doing.
• 58:02
  You're doing a great job,
• 58:03
  both in your public role
• 58:06
  as well as your public company role.
• 58:08
  So thank you for that.
• 58:08
  I'm a happy shareholder.
• 58:10
  You're doing great stuff.
• 58:11
  Appreciate it, Tad.
• 58:12
  Well, thank you for your time here.
• 58:14
  This was an incredible conversation.
• 58:17
  It was fun.
• 58:17
  It's always fun.
• 58:18
  Thank you, Joe.
• 58:19
  Enjoyed it.