Latest / The Paul Barron Crypto Show / Insane 11.50% Cash Yields Powered By Bitcoin!🔥$STRC⚡Strategy CEO INTERVIEW🚨Phong Lee

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Insane 11.50% Cash Yields Powered By Bitcoin!🔥$STRC⚡Strategy CEO INTERVIEW🚨Phong Lee · The Paul Barron Crypto Show

0:00
Speaker 1: Investors are star for yield. Obviously, with things that are
0:03
Speaker 1: happening in the markets today, we wanted to break it
0:05
Speaker 1: down with none other than Strategy and their CEO. So
0:08
Speaker 1: we'll get into all of that here in a moment
0:11
Speaker 1: before we bring on the guest. I want to kind
0:13
Speaker 1: of open up where the industry is heading because if
0:16
Speaker 1: you look at the growth of what we've seen here recently,
0:20
Speaker 1: size has rapidly grown to almost six point four billion.
0:23
Speaker 1: I'm looking at some charts here, specifically from Strategy, around
0:28
Speaker 1: some of the assets that they have been putting out
0:30
Speaker 1: into the market. Stretch, of course is well we're going
0:32
Speaker 1: to be talking about today, So I want to have
0:34
Speaker 1: the president and chief executive officer, Fong Lee, coming in
0:38
Speaker 1: from Strategy. Fong Lee, how are you.
0:40
Speaker 2: I'm doing great, Thanks Paul for having me.
0:42
Speaker 1: Pretty accelerated in terms of growth. Why do you think
0:45
Speaker 1: we're seeing the growth we are right now in your products?
0:47
Speaker 3: You know it's stretched specifically now is up to eight
0:51
Speaker 3: point five billion dollars in notional now. Last week alone
0:55
Speaker 3: we issued two point two billion dollars, which is the
0:58
Speaker 3: largest issue ins any week we've had. And look, I
1:01
Speaker 3: think people are interested in the product because they want
1:03
Speaker 3: access to the asymmetric risk return that bitcoin provides. They
1:08
Speaker 3: don't want the volatility. And we're going to yield starved
1:11
Speaker 3: environment right now. Right Anything where you can get eleven
1:14
Speaker 3: and a half percent paid monthly, five x four x
1:18
Speaker 3: over collateralized as something people are interested.
1:20
Speaker 2: In right now.
1:21
Speaker 1: So I'm showing the stretch effective yield compared to the
1:24
Speaker 1: traditional credit. This comes from a deck you guys have published.
1:27
Speaker 1: Pretty hard to go against this. Sometimes when I see
1:31
Speaker 1: charts like this, I wonder, is this too good to
1:33
Speaker 1: be true? Surely that is a question that is asked
1:36
Speaker 1: to you guys. Explain the product for us. Explain how
1:40
Speaker 1: it works, what makes it so efficient?
1:44
Speaker 3: Yeah, well, I'll start with this. A perpetual preferred. You know,
1:48
Speaker 3: a preferred equity is listed on the Nasdaq or NIC
1:53
Speaker 3: and this happens to be perpetual, which means that there
1:57
Speaker 3: is no maturity. A normal preferred has a three or
1:59
Speaker 3: five year maturity. So one is it behaves. It looks
2:05
Speaker 3: like an equity, but it pays a dividend. The dividend
2:08
Speaker 3: we pay is eleven and a half percent. We pay
2:10
Speaker 3: that monthly. We have a posal now to pay it
2:12
Speaker 3: actually semi monthly, so twice a month, and it's also
2:17
Speaker 3: paid in cash tax to that's the product. How do
2:20
Speaker 3: we get to eleven and a half percent? When somebody
2:23
Speaker 3: buys Stretch, we immediately turn around and we buy bitcoin.
2:27
Speaker 3: And because we're the largest holder of a bitcoin in
2:30
Speaker 3: the world now over eight hundred and twenty thousand bitcoin,
2:33
Speaker 3: we have a large bitcoin balance sheet. We're very adept
2:35
Speaker 3: at buying bitcoin. We believe that bitcoin should go up
2:38
Speaker 3: thirty percent a year, and we're effectively taking that spread
2:43
Speaker 3: in between. I call it eighteen and a half percent.
2:46
Speaker 3: We're paying out eleven and a half percent to the
2:47
Speaker 3: end customer, and we take the risk of bitcoin volatility,
2:53
Speaker 3: call it forty percent of fall. We strip that away
2:56
Speaker 3: and we give to the end customer a two percent fall.
2:59
Speaker 2: That's effectively the product.
3:00
Speaker 1: Interesting. Okay, So if you look at the potential risk factors,
3:04
Speaker 1: if there are some what metric should a holder pay
3:07
Speaker 1: attention to?
3:09
Speaker 2: I would say there's two things.
3:10
Speaker 3: What is the what is our total bitcoin base which
3:13
Speaker 3: is about sixty billion dollars right as compared to the
3:16
Speaker 3: amount of Stretch out standing, and this particular case is
3:19
Speaker 3: eight and a half billion dollars. That is effectively our amplification, right,
3:24
Speaker 3: and then what leverage do we have, what additional leverage
3:26
Speaker 3: we have when we have about six billion dollars in
3:28
Speaker 3: that leverage, so call that simply sixteen billion dollars of
3:33
Speaker 3: amplification on sixty billion dollars, right, so twenty five thirty percent.
3:39
Speaker 2: That's what someone should care about.
3:41
Speaker 1: Right.
3:41
Speaker 3: If we get to the point where we have sixty
3:44
Speaker 3: billion dollars a bitcoin and sixty billion of stretch out standing,
3:48
Speaker 3: six billion of net leverage that or sixty six billion of.
3:51
Speaker 2: Net debt, that becomes a problem. Yeah. Yeah, So that's
3:55
Speaker 2: piece one that someone should care about. And then piece two,
3:57
Speaker 2: what's bitcoin price? Right?
3:59
Speaker 3: Because this this does rely on the long term that
4:03
Speaker 3: bitcoin price is going up. And I tell folks, I
4:06
Speaker 3: talk to bitco coin bulls, but I also talk to
4:08
Speaker 3: bitcoin bears. If somebody thinks Bitcoin's going to go down
4:11
Speaker 3: ninety percent and sit there for five years, that could
4:14
Speaker 3: be an issue also.
4:15
Speaker 1: So you look at volatility because that's one of the
4:18
Speaker 1: things that I know some of the people who follow
4:20
Speaker 1: our channel in reference to these kinds of assets look
4:24
Speaker 1: for entry points. So I'm showing your liquidity here right now.
4:30
Speaker 1: Is this Essentially, the best time to grab it is
4:33
Speaker 1: when it starts to dip into these valleys.
4:35
Speaker 2: It depends on what you are.
4:36
Speaker 3: If you're a buy and hold verson and look, if
4:40
Speaker 3: someone's looking to get the yield right over the long run,
4:44
Speaker 3: I would buy any point in time because the price
4:46
Speaker 3: basically sits around one hundred dollars. Now it's ninety nine
4:49
Speaker 3: dollars fifty cents, So you might say, okay, I got
4:52
Speaker 3: fifty cent gain there if I buy a ninety nine
4:54
Speaker 3: and fifty go up to one hundred.
4:55
Speaker 2: But put that aside.
4:57
Speaker 3: If you're looking for eleven and a half percent yield
4:59
Speaker 3: paid month, you could enter at any point right.
5:02
Speaker 2: And actually you're INSENTI.
5:04
Speaker 3: Not to sell the product because it's the return of
5:06
Speaker 3: capital right PAX treatment, which means that as long as
5:09
Speaker 3: you don't sell the underlying this is tax deferred for
5:12
Speaker 3: the next ten years. Now, what you see here there's
5:15
Speaker 3: an interesting movement amongst traders. Right now, If you're a trader,
5:18
Speaker 3: what do you want to do with one record data month, right,
5:22
Speaker 3: and that's the.
5:23
Speaker 2: Fifteenth of every month. You want to buy the product.
5:26
Speaker 3: On the fourteenth, and then you want to sell it
5:28
Speaker 3: on the fifteenth. Hold it for one day, get paid
5:31
Speaker 3: eleven and a half percent, right, and then for the
5:33
Speaker 3: rest of the day is whatever, put it back.
5:35
Speaker 2: Into a T bill or something like that. Right.
5:37
Speaker 3: So that's the dynamic you see right here, which is
5:40
Speaker 3: why we're proposed in two record dates. But look, if
5:42
Speaker 3: somebody wants to do that, that's fine too. But if
5:44
Speaker 3: you're a typical yield starved investor and you just want
5:49
Speaker 3: yield of the long term, I would just buy it
5:51
Speaker 3: and hold it.
5:52
Speaker 1: So you look at the potential for the semi annual proposal,
5:58
Speaker 1: how much would this fix the volatility if you go
6:00
Speaker 1: that route.
6:01
Speaker 3: Mathematically, right, and you know there's the difference between math
6:05
Speaker 3: and actual what people do and sentiment. This is singing monthly,
6:10
Speaker 3: so twice a month, so from once twice a month,
6:12
Speaker 3: it should drop the volatility by about fifty percent.
6:15
Speaker 2: Right.
6:15
Speaker 3: It's already a low volatility product sitting around two to three.
6:19
Speaker 1: Right now, you think that that in general is going
6:21
Speaker 1: to be good for the overall performance. It's going to
6:23
Speaker 1: give some more options to long term investors as well
6:26
Speaker 1: as the short term you know, traders so to speak.
6:29
Speaker 1: Beyond that, because I think there was one more sheet
6:31
Speaker 1: I wanted to show. So this is going to be
6:34
Speaker 1: the only equity right now with semi monthly dividends, is
6:37
Speaker 1: that right?
6:38
Speaker 2: Yeah, it's pretty cool. You know.
6:39
Speaker 3: You see here in the universe of equities, and before that,
6:42
Speaker 3: in the university of universe of preferreds, the vast majority
6:46
Speaker 3: ninety five percent are paid quarterly, right right, ours pays monthly.
6:52
Speaker 3: And when if the shareholders approve this, when we move
6:55
Speaker 3: to semi monthly, it'll be the only preferred paying equity
7:01
Speaker 3: or dividend paying equity in the world that is paid
7:05
Speaker 3: seving monthly. Now, what are we competing with out in
7:08
Speaker 3: the world right in the traditional finance market, is we're
7:12
Speaker 3: competing with other preferred and other equities.
7:15
Speaker 2: You saw those there that pay dividends.
7:18
Speaker 3: You could argue, although we are not a money market
7:21
Speaker 3: or a savings account, we're competing with people trying to
7:24
Speaker 3: get yield on short term money, right call it six
7:28
Speaker 3: months money, one year, two year money, and so we're
7:30
Speaker 3: competing with that. You can also argue that over time,
7:34
Speaker 3: as stable coins become more prevalent and as people are
7:38
Speaker 3: able to make yield off staple coins, which is a
7:40
Speaker 3: big topic for discussion and debate. Right now that we
7:43
Speaker 3: would potentially compete with yield bearing stable coins also, right.
7:48
Speaker 3: That's sort of one category of short term money that
7:50
Speaker 3: we compete with. Then the other category is long duration
7:54
Speaker 3: money that earns ten eleven, twelve percent.
7:58
Speaker 1: Right.
7:58
Speaker 2: A good example might be private credit right right, And.
8:01
Speaker 3: In that case, you get your money locked up for
8:03
Speaker 3: four or five years, but you're able to get potentially
8:05
Speaker 3: high dividend, you pay high fees. What we brought is
8:08
Speaker 3: the best of both worlds high yields, tax deferral plus
8:13
Speaker 3: short duration.
8:15
Speaker 2: Right, the ability to get in and out quickly and
8:17
Speaker 2: low volatility.
8:18
Speaker 3: And you mentioned the innovation like that, that's sort of
8:22
Speaker 3: a sweet spot that hasn't been met before, and.
8:24
Speaker 2: I think it'd be hard to meet again.
8:25
Speaker 1: We just did a video on banks that were really
8:29
Speaker 1: lacking in the innovation. It seems like more companies like yourself,
8:33
Speaker 1: and you know, I would call it the kind of
8:35
Speaker 1: the next generation FinTechs that have really kind of pressed
8:39
Speaker 1: the limit on these new products out there. So kudos
8:42
Speaker 1: to you guys for that. If you look at what
8:46
Speaker 1: you guys are doing in the token I side here,
8:48
Speaker 1: of course a stretch right here. It's one of the
8:51
Speaker 1: top token most popular token I stocks. So this is
8:55
Speaker 1: interesting to me. Could there ever be a time where
8:57
Speaker 1: dividends at some point in the future would be paid
9:02
Speaker 1: like daily or real time? Do you think that's ever
9:04
Speaker 1: a future opportunity?
9:06
Speaker 3: I would love to see that. First of all, I
9:08
Speaker 3: think you know you mentioned innovation. The innovation in the
9:11
Speaker 3: capital markets is going to happen in the tokenized DeFi world.
9:16
Speaker 3: These are you know, companies building tokenized products on top
9:20
Speaker 3: of strategy.
9:21
Speaker 2: I'd love to see an issue.
9:24
Speaker 3: Fully regulatorily approved tokenized world where we can issue token
9:29
Speaker 3: ized stretch trades twenty four to seven.
9:31
Speaker 2: It doesn't have some of the.
9:34
Speaker 3: I would say requirements or some of the structural you know,
9:39
Speaker 3: inhibitors that typical exchange US exchanges puts on.
9:44
Speaker 2: Top of it. And yeah, I think like, why wouldn't
9:47
Speaker 2: you want to have daily accruals.
9:49
Speaker 3: It might still pay monthly like an ETF And so
9:53
Speaker 3: that would make a lot of sense, and that would
9:54
Speaker 3: be friendly to a shareholder.
9:57
Speaker 1: How high or even how low could see theoretically yields
10:01
Speaker 1: go in terms of ranges? Do you see do you
10:03
Speaker 1: guys have a model for this?
10:05
Speaker 3: Yeah, And by the way, one of the things that
10:06
Speaker 3: I think is interesting and you probably know, right circle Tesla, right,
10:11
Speaker 3: and then spiq circle and Tesla.
10:14
Speaker 2: This is their common equity. That's sure, that's right.
10:18
Speaker 3: We're just talking about one of our preferre. It's not
10:21
Speaker 3: even our common So so I think it's sort of
10:23
Speaker 3: awesome to see this.
10:24
Speaker 2: How high can yields go?
10:26
Speaker 3: Look, if we believe that bitcoin's going up thirty percent
10:29
Speaker 3: a year, right and we're paying a annualized divid at
10:34
Speaker 3: an eleven and a half percent, you would say there's
10:36
Speaker 3: an opportunity in the middle of that. So right now,
10:39
Speaker 3: do I really think we're going to be paying a
10:40
Speaker 3: twenty percent dive? Then I don't think so, because I
10:42
Speaker 3: think the other thing you'll see is some quantitative easing
10:46
Speaker 3: and the Feds start to reduce, you know, the short
10:50
Speaker 3: term interest rate, and as that happens, the need for
10:53
Speaker 3: high yields will reduce a little bit too. So I
10:57
Speaker 3: think we don't need to get there, but we could.
11:00
Speaker 3: If that was what the market.
11:02
Speaker 1: Desired, Well, that would be interesting because I think we
11:05
Speaker 1: are going. First of all, I think they're the dynamic
11:07
Speaker 1: of the investors are starting to shift, and what I
11:10
Speaker 1: mean by that is the demographic You're getting to a
11:12
Speaker 1: point where you know, I won't call them boomers, but
11:16
Speaker 1: there are you know, they're kind of set in their
11:17
Speaker 1: ways in terms of the risk they're willing to take
11:20
Speaker 1: versus what you're seeing Millennial and gen Z, which are
11:23
Speaker 1: just now starting to experiment with this. Obviously, risk assets
11:27
Speaker 1: digital assets are a big target, and this kind of
11:29
Speaker 1: product I think would be perfect for that kind of
11:32
Speaker 1: investor base. So you may be going into I've heard
11:36
Speaker 1: Michael talk about this before, into a huge, you know,
11:39
Speaker 1: perfect storm of where this market is going to grow.
11:44
Speaker 3: I'll give you this as a thought experiment. If you
11:46
Speaker 3: are running a stable coin, right, why wouldn't you take
11:49
Speaker 3: a portion of that stable coin and put it into
11:52
Speaker 3: a product like stretch right, get eleven and a half
11:55
Speaker 3: percent off that portion of the stable coin, mix it
11:58
Speaker 3: with US treasuries as an exact ample, and then pay
12:02
Speaker 3: a higher yield off of it. Right, Like, I think
12:05
Speaker 3: everybody wants yield off of a stable coin right now, and.
12:09
Speaker 2: Today it's difficult to do.
12:11
Speaker 3: I think most stable coins aren't even interested in that
12:13
Speaker 3: at some point in time. But then other than obviously
12:17
Speaker 3: stable coin has the benefit of the speed of transaction
12:20
Speaker 3: and the low friction. But if you could also provide
12:23
Speaker 3: a real yield off of it through something like this.
12:25
Speaker 3: I think it would make sense, right, And those are
12:29
Speaker 3: conversations that are starting to happen, all.
12:31
Speaker 1: Right, So I would be remiss if I don't challenge this.
12:35
Speaker 1: And one of course your big naysayers is Peter Schiff.
12:39
Speaker 1: He goes on right here. Sometimes a Ponzi scheme isn't obvious.
12:42
Speaker 1: The only sign that it may be seems too good
12:45
Speaker 1: to be true. I said that in the first of
12:47
Speaker 1: the interview. I was like, Wow, these are pretty high performances.
12:50
Speaker 1: Not the case with Strike or with Stretch. How would
12:53
Speaker 1: you respond to that? First of all, when you think
12:55
Speaker 1: about what Peter is saying, there would people trust Stretch
12:58
Speaker 1: more less skeptics that every part of Stretch was say
13:02
Speaker 1: fully un chain.
13:03
Speaker 3: Well, I'll start with you know, Peter is a big goldblug,
13:07
Speaker 3: which of course that he I think believes.
13:10
Speaker 2: And likes spitcoin, which is why he talks about it
13:12
Speaker 2: so much.
13:12
Speaker 3: Sure, because I like gold, right, and so most people
13:15
Speaker 3: who like bitcoin like gold.
13:16
Speaker 2: I think it works the other way around.
13:19
Speaker 3: Addressing this question of a Ponzi scheme, First of all,
13:22
Speaker 3: we have, as a public company made every effort to
13:25
Speaker 3: be as transparent about everything we do as possible, which
13:28
Speaker 3: is go to strategy dot com. You can see everything
13:31
Speaker 3: that you just saw flies real time. We are taking
13:35
Speaker 3: the proceeds of Stretch and putting it into bitcoin. Right,
13:39
Speaker 3: It's not like we're taking the proceeds and we're then
13:42
Speaker 3: using those proceeds to pay out right and a half percent.
13:46
Speaker 3: We're actually using the proceeds and we're putting into bitcoin.
13:49
Speaker 3: That's one, right, So it's very clear what we're doing
13:51
Speaker 3: with the proceeds. We're reinvesting it into the best best
13:56
Speaker 3: asset class in the world, going up thirty forty percent
13:59
Speaker 3: a year. And then we're turning around and very simply
14:02
Speaker 3: issuing additional equity at a premium asset value to pay
14:06
Speaker 3: the dividend. Right, And so we're not we're not taking
14:10
Speaker 3: stretch equity, We're taking common equity to.
14:12
Speaker 2: Pay the dividend. That's pretty much the process. Yeah, right,
14:16
Speaker 2: and that's that.
14:17
Speaker 3: So, so I don't know which part of that sounds
14:19
Speaker 3: like a ponzi scheme.
14:20
Speaker 2: None of it does. Obviously, I'm the one who you.
14:24
Speaker 3: Know, helped create the products, backing the product. But the
14:27
Speaker 3: definition of a ponzi is something that's non transparent where
14:31
Speaker 3: you're taking the proceeds from individuals and they're using those
14:35
Speaker 3: proseeas to pay out interest rates. The only part that
14:39
Speaker 3: maybe sounds ponzish is the rates are very high, right,
14:42
Speaker 3: and we're able to do that because of bitcoin.
14:45
Speaker 2: But you know, we get the two good.
14:47
Speaker 3: To be true quite a bit because it does sound
14:49
Speaker 3: quite novel. But you know, when you digitally transform something, right,
14:54
Speaker 3: is watching any movie you've ever wanted right at any
14:59
Speaker 3: point in time? Is that too good to be true?
15:03
Speaker 3: Is it getting into a car that drives itself too
15:05
Speaker 3: good to be true?
15:07
Speaker 2: At ten fifteen years ago? The answer to be yes
15:09
Speaker 2: to any of those.
15:10
Speaker 1: Yeah, you've been hanging around Michael a lot.
15:13
Speaker 2: Yeah, did you can tell? Allows you to do these things?
15:17
Speaker 1: When you take it that way, it does feel as though, okay,
15:20
Speaker 1: this is just the next generation of products that are
15:22
Speaker 1: going to be out there. So maybe you guys are
15:25
Speaker 1: at the right place at the right time. Why don't
15:27
Speaker 1: you just go ahead and issue its own wrap bitcoin
15:30
Speaker 1: for say a DeFi purpose? Why not go that route?
15:33
Speaker 3: We could do that eventually. I think, Look what works
15:36
Speaker 3: here is we're using the existing traditional financial market system, right,
15:42
Speaker 3: We're using a publicly listed equity, right, thank you buying
15:46
Speaker 3: the Nasdaq STRC. And for now to me, that is
15:51
Speaker 3: the You know, we have quarterly earnings reports, right like,
15:55
Speaker 3: we have full transparency on a product on our level,
16:00
Speaker 3: ratios on our assets on our balance sheet. So to
16:03
Speaker 3: the extent we can take something that is in the
16:05
Speaker 3: format everybody's very useful. Yeah, provide a novel product. I
16:09
Speaker 3: think that is better than taking a brand new format
16:13
Speaker 3: and then putting a novel product on top of that too. Right, Like,
16:16
Speaker 3: you go back to boomers, right, what is a boom
16:18
Speaker 3: This product you would think is ideal for a boomer
16:22
Speaker 3: who has a million dollars in assets and wants to
16:25
Speaker 3: live off of a fixed income. Sure, right now they're
16:28
Speaker 3: making three and a half four percent a year and
16:30
Speaker 3: they can make eleven and a half. I'm not suggesting
16:32
Speaker 3: it put all their assets in there, But if you
16:34
Speaker 3: want to live off of fixed income tax deferred and
16:37
Speaker 3: then when you pass away, give this to your children
16:41
Speaker 3: and the tax basis steps back up, right or a
16:43
Speaker 3: cost basis steps back up. This is a And now
16:46
Speaker 3: if I was to wrap that in a DeFi product
16:49
Speaker 3: and then give it to the boomer, like they're very
16:51
Speaker 3: unlikely to purchase that. But if I tell them you
16:53
Speaker 3: can go buy this through Charles Schwab or through Fidelity
16:57
Speaker 3: on the Nasdaq, They're like, okay, I can work with that.
17:00
Speaker 1: Explain to me when you say this, You said that
17:04
Speaker 1: this product is of course tax efferd for ten years.
17:06
Speaker 1: How does that work within the tax code? Is this
17:10
Speaker 1: similar to other you know, other yield products that are
17:14
Speaker 1: out there that are going What makes it qualify for that?
17:17
Speaker 2: Yeah?
17:18
Speaker 3: So there's sort of three types of taxation typically on
17:22
Speaker 3: dividends and on yields. One is ordinary income. So you
17:26
Speaker 3: make interest on a money market, right, and that would
17:29
Speaker 3: be taxed at at the highest tax rate federal tax
17:32
Speaker 3: rate in the US thirty seven percent. You live in
17:34
Speaker 3: New York, it's fifty five percent, right, And so you
17:37
Speaker 3: put your money into money market, you're an interest off
17:39
Speaker 3: of it.
17:39
Speaker 2: That's ordinary income. That's sort of the worst, right.
17:42
Speaker 3: The second are dividends on securities, right QDI quality dividend income,
17:48
Speaker 3: and that is taxed at a fifteen percent rate. Right,
17:52
Speaker 3: And that is if it's a return on capital, sure, sorry,
17:55
Speaker 3: a return of capital. If it's a return of capital,
17:59
Speaker 3: which means is that the company is producing negative earnings
18:02
Speaker 3: and profits. And because we have an operating software business
18:07
Speaker 3: where we purposefully return negative earnings and profits, there is no.
18:11
Speaker 2: Capital to return.
18:13
Speaker 3: So it is a return of capital, which essentially means that.
18:18
Speaker 2: We're giving you back the capital you gave us. That's
18:20
Speaker 2: how the tax co looks at it. Interesting.
18:23
Speaker 3: So if you buy one hundred dollars worth, when we
18:26
Speaker 3: give you eleven and a half dollars, now your tax
18:29
Speaker 3: base is your cost bass goes down to eighty nine
18:32
Speaker 3: dollars and fifty cents or eighty and fifty cents, and
18:35
Speaker 3: that can continue till when it steps down to zero
18:37
Speaker 3: at which is taxed at as a as a dividend right.
18:42
Speaker 3: So that's about ten years of tax deferral as long
18:45
Speaker 3: as you don't sell the.
18:45
Speaker 1: Underlying interesting and intriguing because I think a lot of
18:48
Speaker 1: people are trying to do more strategy now no pun
18:52
Speaker 1: in how they're investing. You just hit on some of
18:55
Speaker 1: the key things that I often argue around money market
18:57
Speaker 1: is just the tax exposure that you have on money markets,
19:01
Speaker 1: even though it is paying somewhat.
19:03
Speaker 2: Of a reasonable yield.
19:05
Speaker 1: But when you look and apply the tax position starts
19:08
Speaker 1: to create a different story.
19:10
Speaker 3: We thought when we did this that the product market
19:13
Speaker 3: fit and the demand was going to go through the roof.
19:15
Speaker 3: You never know until you put the product out in
19:17
Speaker 3: the market, and it did.
19:18
Speaker 2: Right.
19:19
Speaker 3: It's grown to hear eight and a half billion dollars.
19:21
Speaker 3: It started off as two point eight billion dollars. It's
19:24
Speaker 3: one of the fastest growing financial products or any product
19:27
Speaker 3: in the history of the markets.
19:29
Speaker 2: And it was that change going.
19:32
Speaker 3: From a fixed principle to a variable dividend. And look,
19:37
Speaker 3: when you're talking about short term money, right, that's sort
19:40
Speaker 3: of what you don't want. You don't want to risk
19:42
Speaker 3: losing your money exactly, having twenty percent come off of
19:45
Speaker 3: your money. And if you want to hold something it's
19:49
Speaker 3: your kids college tuition, you know you're gonna have to
19:51
Speaker 3: pay it in six months, and you want to park
19:53
Speaker 3: it somewhere without losing the.
19:55
Speaker 1: Principle, right, Right, What about I'm looking at all these
19:58
Speaker 1: products and I think, all right, why not lay in
20:01
Speaker 1: or create a vault strategy that alternates between all of
20:05
Speaker 1: the different products.
20:07
Speaker 3: Yeah, you know, there has been a lot of i'll
20:10
Speaker 3: call it layer two innovation on top of our products.
20:13
Speaker 3: In fact, if you look at Stretch right now, a
20:15
Speaker 3: few companies twenty one Shares, apicks Hope have created fairly
20:20
Speaker 3: good size products on top of stretch that offer for example,
20:25
Speaker 3: Deli Crules, there are ETFs that are available in Europe.
20:30
Speaker 3: I love the idea of a vault strategy on top
20:33
Speaker 3: of these products, and we don't want to necessarily create
20:38
Speaker 3: that because it'll cause us to defocus a little bit.
20:41
Speaker 2: But we're happy to partner with others who want to
20:43
Speaker 2: do something like that.
20:44
Speaker 3: So I think it's a fantastic idea, Paul, And if
20:46
Speaker 3: anyone's listening wants to do something like that.
20:48
Speaker 1: One there you go, guys, conversation, reach out to fong
20:51
Speaker 1: Lan and he'll work it up. Well. Listen, this is
20:54
Speaker 1: one of the things that we try to do for
20:56
Speaker 1: our audiences is give you, guys insights a little bit
20:58
Speaker 1: more into stuff that are is a little bit more.
21:03
Speaker 1: It sounds easy to understand, but until you really hear
21:06
Speaker 1: it broken down like what Fnglai has done, you have
21:10
Speaker 1: to understand how it makes sense for your investing. So
21:12
Speaker 1: obviously not investing advice, but it is something that we
21:15
Speaker 1: dive into around discovery and education. Hopefully this has worked
21:19
Speaker 1: out for all of you guys. Thanks for coming in today.
21:21
Speaker 1: We appreciate it.
21:21
Speaker 2: Yeah, thank you too, Paul appreciate the time.
21:30
Speaker 1: If you like this video, h like and subscribe, drop
21:32
Speaker 1: a comment down below, and also join our free private
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Speaker 1: member group.
21:36
Speaker 2: The link is in the description.