Speaker 1Welcome to the Atomic Level, the show where we decode the matters of wealth, one insightful conversation at a time with the leading minds in finance, business, and tech, so that you can grow and protect your net worth, and most importantly, net happiness. I'm Chris Snook, and today, you definitely want to share this with a friend, with a family member, with a stranger. I don't care, but this conversation was me sporadically spamming the guest that I'm about to introduce to you for the better part of a year. I discovered him several years ago through Raoul Pal and the Real Vision Network and some other things, and I've been following his mind and challenging every assumption I have by just using him as my virtual sounding board, and today, I have the pleasure of welcoming Hugh Hendry to the Atomic Level. Hugh, I'm ready to go on the acid trip with you, buddy. Thank you for being here. Welcome to the show.
Speaker 2My pleasure. I'm also looking forward to finding out who the fuck you are.
Speaker 1Well, we're going to find that out together. We're going to go on the, as those who are new to the show don't know, these are fully unscripted. We go for a long form. We're not going to put a time limit on it. We'll know when to land it, and I can't think of anybody who will know that more intuitively than Hugh, and he also might take us on a trip we've never been on before, and I'm going to let him do that, but for those who are wondering what we're going to do, we're going to find out who the man is and what shaped his worldview. That'll be up front, so you kind of know if you weren't familiar with him or his work before, why you should listen to him. And also the biases that he's operating from that have been well honed, but that are uniquely his. Then we'll get into the frameworks, the operating system, how he thinks, how he applies it, the strategies, the tactics, and then practical takeaways. Most of you are managing somewhere between $3 million to $30 million of your own money. A lot of that maybe has been passively managed. Maybe you're an advisor to people with two to five at scale, and you're trying to figure out what the new world looks like, because it ain't going to look like the last 60 years. Your brain's going to hurt. I can promise you that. You're not going to like everything you hear. You're going to love some of the things you hear. You're going to be surprised like I am, but that's it, Hugh, and we're going to find out who I am along the way while we find out who you are, and it'll be fun. So let's start with a backstory, wherever you want to start it. But what shaped the worldview? One of my favorite lines that I will tee you up with was when you said a couple weeks ago, I don't know when it was, I wore the tie and told the lie. I think that frames up a lot of things. It's about what people can expect today. You're not wearing a tie. You got a cool necklace on and you're down in St. Bart's. But before that, when you were pre-tie and then other tie, what shaped the worldview? And then where are we at today? Just so we understand your purview.
Speaker 2Well, it's like the entrance examination for the Chinese civil service. One question. Tell me everything you know. Boom. You know, let's work. Backwards. And I, it would seem that I am a conundrum. I'm going to speak about myself. Third person, very wanky. Um, let me tell you what I'm not. I have, um, I mean, I am a degenerate by design. Um, I, I have acid in the name. I'm an acid capitalist and it's, it's partly wordplay. Um. torturing our minds with the ambition of getting glimpses of understanding about what is yet to happen what is what will come to pass and for a hundred years i mean jesse livermore wrote the book but i want to say jesse was more i feel like i'm more like a bastard child of jesse than than the people who manage money today the people who manage money today manage money out of fear and they believe it's very protestant and they believe that um hard work is the the fruit of all yeah and i don't wish to uh be disdainful on that it's the nature of the work that i call into question i think it's i think this ambition to see the future i think we share that ambition with with the artists of the world i actually believe that truly reset the mission is is one for artistic minds artistic not autistic maybe maybe both um and so the acid was a play on you want to see the future you know you got to light up the mind never take an acid um dallied on others um really very recently i don't smoke i have smoking i chase young girls um smoking in europe just kind of goes that way i've stopped it i don't vape um almost don't drink any alcohol um i have something beeping at me um occasionally i've discovered i quite like ecstasy because it makes me dance in public i'm very introverted extrovert but i think i've had three ecstasy pills in my life sue me um however i'm gonna i'm a book now and I'm going to open this book to everyone who has kindly joined or will watch on Rewind because I've never done this on Substack. Thank you, Chris, for pushing me into what is my favoured platform. I think of myself as a Jesse James and he said, hey, kid, why do you keep robbing banks? He's like, easy, that's where the money is, right? And I find myself stupidly, like, spending too much time on Instagram or on eeks. But the money's on Substack.
Speaker 1Yeah. Well, and when you came into Substack maybe a year ago, I'm trying to remember. I remember very intently you came out like a ball of fire. And you hit bestseller list. You hit whatever. none of that shocked me because you're such a great short content brander marketer and I remember that's when I first reached out to you because I was like I'm gonna get him finally I have something I can offer him and he's here now I'm gonna get him on the show and that's when I dm'd you right whenever that was like a year or so ago because when you came out you came out only the way that you would like shorts and notes and publishing long form and you know paywall like you really nailed it when you came out and and uh you hit it hard and fast maybe for 30 45 days and then you kind of metered back but you're very prolific on all the other things like you said the money you know the money in the conversation format here is different it's more suitable for certainly your mind or the things that you want to talk about so
Speaker 2i'm glad i'm glad that we're yeah so again as we continue this journey if you go backwards um you know before we we started using these acronyms and and i guess really just with the modern need to diagnose things diagnose things i've got three kids and they've all got adhd and then they get it from me and like you said i probably came out of the gate flying and and then life gets in the way i don't finish i don't finish sentences you now um and and i travel and and my life and and part of you know my sub stack is is the confluence of um the the backstory and the experience and the insight you know i am an orthogonal investor we'll come back and we'll explore that um and i'm not necessarily going to give you trades i'm getting closer to that um but i'm going to show you what i attempt to show you is how an orthogonal mind how the the reef the refracturation of financial light through my mind is something i think which is which is interesting and it has heat it has energy you know i um i feel like a modern day descendant or i certainly my ambition would be the names that i here are you know hunter s thompson and charles bukowski you know and so i i am vulgar and i make no apologies for that i want to say to people listening in and wow you're saying people managing two to five million and forgive me the naked commercialization but um they should come to my my summer camp and i should i should invite i should invite you it begins the first week in august and it is it is a beautiful getting together of of people who've come to reject being ripped off by um financial brands coca-cola is an amazing brand when i when i drink when i drink and i don't drink the diet or the zero sugar like sugar is a natural product if you're going to drink coca-cola drink the natural product not the frankenstein product anyway but when you drink it wow man it tastes damn fucking good yeah and so it delivers financial brands do not deliver i mean i don't have to convince you and the people who will be listening to this they're listening because they get that yeah and i think that's why
Speaker 1they're on substack too is they're they're they're trying to find a way to rapidly get up to speed and because a lot of really smart money minds people People that argue and also sometimes agree with each other. But the fact that there's access now to those conversations in long form is a starting point. But the purpose for this is really to get behind also the human side of it, because you made a comment I think I'll let you run with. But I do think that when it comes to financial markets and financial economy and the real economy, you have to have a game plan for both. Like there used to be this thought that you had one game plan. You're going to do this, you're going to retire, right? You can't have one game plan now. You have to have two different game plans for two totally different economies. The financial economy, which has got a whole different set of rules, whole different set of corruptions, whole different set of, you know, whatever. And then the real economy where diesel is $8.99 in California and your shit's more expensive and your employees are broke and you're trying to run a cash, like you're trying to bring in an exit strategy or cash flow there. And that's really what I try and drill down to over the arc of this is the practical takeaways for their money and for their- For them at work. Because that's the only two places that money compounds is you at work and your money at work. And the only place that doesn't have a limit because of time is your money.
Speaker 2Well, the other thing, I think you're right if I may just interject very briefly, but when I see the application, the endeavor, the passion to make money in the real world, and then I see the abandonment of all of that in the financial world, and again, that's why hopefully we come together as a sub-sac community to say we can do it better. And we- Well, and I think you, you know,
Speaker 1why I've been dying to do this, because I don't know the current status of it, but I mean, you bought a hotel, right? You, for those who haven't, you can look him up on Wikipedia. If you don't know what Eclectica Asset Management is, you can talk about that as much or as little as you want, but that's well documented. And that's why we're here. That's why you became a guy in the world that everyone respected because of what you did during Eclectica time. And now you're doing it for yourself and you're doing it for others. And you're more of a, I don't want to call you an influencer because I think that's insulting. You're a financial mind who happens to use platforms to get your conversations to many people. You also own a hotel in St. Bart's and you operate it. So you're in the real world with a real world asset.
Speaker 2Yeah. So let's touch upon that. So the hotel, I'm sitting in, I'm sitting in the belly of the beast. And I'm actually using my iPhone. We might, we might take a tour. But it's in, in 2012, 14, 14 years ago, I, I purchased the land. I actually got a discount because it received so much sunshine, crazy stuff, you know? And I, I bought it for 3 million. I spent 4 million buying it. And it's, it's a great Gatsby house. It's an acre of land, seven bedrooms. And it's very much the, the headquarters of the Acid Summer Camp in, in August that, that we run. In the last two months have been horrid for me. And I, I ran out of money. And for the first time in my life, every bank account I had, apart from my wise account, which is fed by, by my sub stackers and Patreon, thank you very much. The, everything went, everything went negative. Now the reason for that, again, yes, I'm a degenerative and I have fun, but the, I had no rental business in, in August. And then we closed down September and October for the hurricane season. And my forward book just disappeared. Three weeks ago, I had essentially the Thanksgiving week and nothing else. Wow. And we, we, we charge a super, super high rate the last two weeks of the year. We charge in gross terms, $450,000. It's, I mean, it's just a remarkable place. And, and that's 40% of my annual revenue. And, and up until 10 days ago, I had nothing, nothing in the counter. And I, I failed to meet the, the mortgage. I was in arrears. Yeah. I mean, I'm crazy. I, why the fuck am I sharing this? But that's what you get. You get transparency. And like you say, I transcended, I transcended the worlds. I, and hopefully I feel like, I hope I can have sympathy for people who are just on, on one side of, of, of that divide. I, I think for context
Speaker 1too, for those who are not familiar with St. Bart's or haven't been there, there's a period. And I can't remember if it's the first week of January or the second, but it is where every billionaire in the planet goes for seven days. It's what starts off the quote unquote tour, right? That then ends up through Davos and then goes out to, and, and so, St. Bart's is kind of New Year's centric. New Year's Eve.
Speaker 2Yeah. New Year's Eve and St. Bart's. Yeah. It's the greatest concentration of, of wealth in one place on the planet. The, the last two years we've had, again, a weather pattern of very high pressure, which makes the sea become like a lake. And you, you get that in advance and, and they come, the, the yachts and you, you, it's a, it's almost like a natural wonder. It's not natural, but the, the principle, town Gustavia almost at night time as you as you descend from the hills into town you can't differentiate between land and the sea and it's lit and and the sea continues and continues and continues it's a it's a remarkable a remarkable um site um and um but I've got that booked but I was I spent uh the best part of two months in in Los Angeles I I'd like to spend more time there um would you believe I go to LA looking for sanity and again we'll touch upon that because there's things we can say but um I've got a lot of creative friends and they're in hospitality and they've got some amazing um restaurant um brands and and and people with bars and and to a man or a lady um late summer bookings August September catastrophic down 20% um not a comment on the wider world but you know that's like you know we're talking about how we we well I think this is first
Speaker 1of all I mean I I just this is not surprising to me but I wasn't expecting you to be so candid because the reality is is your performance in the financial economy over decades is you just can't argue with it and that doesn't mean you've always been right it just means that you weren't contrarian to be contrarian you literally like you said I think you I think you use the word refractory financial refractory in your mind like trying to illuminate that for folks and and you know the the success there is well documented well well appreciated and ongoing and yet you also are an entrepreneur managing a real world asset against forces that are outside of your control and sometimes that means you know the bank waits a little bit longer for their stupid
Speaker 2payment but also Chris imagine under those circumstances the the creative need to write to see things yeah so a lot of juggling of balls you know
Speaker 1yeah so and I think um at whatever level you want to tie these things together
Speaker 2small violin forgive me but you're a small
Speaker 1violin no no no it's uh I mean first of all I think it resonates with a lot of people because look the most un I I will I will say it this much um in the real world with a ton of operational assets out there um it's been a grind for for a couple years um and and for the last six months it's been a grind and when you when you're in a grind sometimes you think you're all by yourself with the real world assets right with the payrolls with the stuff with all that because you go fuck I you know I must have messed up somewhere or this is me or I'm a degenerate like whatever the thing is right you're getting that because you're myopic you're in the forest and or and all you see is trees and and I think anybody who's ever actually built something can understand that feeling and you're trying to elevate out and go oh okay no I got another hundred meters there's the forest like okay and you land back on the ground you're just fighting trees and um and then you start talking around with people that you think have that you look up to right and maybe that's because you need a bridge loan and and you know maybe that's because you're looking for advice or maybe that's whatever the thing is and then you find out there's a lot of people fighting trees quietly and miserably and people that you don't think would be fighting trees because you see them as better than you or maybe even someone that you go to for advice and you go holy he's fighting trees or she's fighting trees and there's this weird thing that happens at least in my mind um part of it makes you worry because you go well if that guy's fighting trees too how bad is it really and then the other part of it makes you feel calm because you kind of go okay I'm just going to keep the there's there's green grass on the other side of this thing just got to pick up a couple more trees and like and then it gives you perspective and it's like this duality that happens and only a true entrepreneur only a true builder only a true asset manager who actually has to live and die with the consequences of their choices can truly appreciate
Speaker 2that in my opinion no my yeah indeed um the part of what i was perhaps laboriously working on um is again perhaps a greater understanding of me for you for for the audience in that the the technology at hand now with the the ai the ea is the french so annoying like they have to turn everything whatever the ea um the that i so i'm fine people say well why are you not managing money i've been there done it if you will but again i would ask people who are paying uh for for financial services um there's such a huge difference between uh someone like myself um it's why again i'm not i'm not tap dancing i'm not stockbroker i'm not presenting you best buys um i'm presenting you a first-class mind that managed money and managed money money under the most exacting circumstances that you know when i received um a ticket from a client it was a hundred million dollars right and the amount of work and finessing that goes into that um and you don't lose that i mean i came to saint bart's um and and i needed to rehabilitate myself i'd spent 15 years where the mind was thinking i had convinced my mind that i was engaged in mortal combat and at some point i was going to die and so the the flight chemicals being produced i had to recover and they say that the just the joy of nature the beauty of it um the unsurpassed beauty it kind of re it kind of recharges the mind i think that's happened i had no ambition and indeed i have no bloomberg i had no ambition to pursue markets um and yet people would come to the island rich folk would come and you can imagine they're wall street types and i know everything i've got some weird wi-fi that even i'm not aware of okay and that led me back into i've got a voice um now um my new hero i i have to say stupid things let me say my first stupid thing my new hero and the person i'd like to emulate is uh jim cramer i can't wait to hear this one uh jim cramer is a genius and and actually i wasn't going to say by the way if that
Speaker 1doesn't get us a ton of comments nothing will i mean i mean like yeah
Speaker 2go ahead and one of my favorite uh finance books is autobiography uh i'll put that out there um i really related to it um i don't know how much of it's true but really related to it and secondly um scarcity and abundance and singularity um i think cramer is the most deliciously uh pre-programmed idiot um and and actually everyone else is the idiot i think um jimmy boy's making about 30 million dollars on that cnbc contract okay and that's what i'm talking and so i'm not talking about the avarice right of of the money but you we are in it to win it and i'm looking for a competitive return vis-a-vis professional management of other people's money okay um and one call that i've repeated of late in the last year has been the scarcity that's represented by live uh live sport um and we've seen some prominent um corporate activity and notably that is it la jets um the which went out on an enormous valuation metric and and the the easiest play i mean we have to still do the hypothesis but the play would be uh amongst the players but the most liquid would be the the british or the international club uh for soccer manchester united um dollar m-a-n-u uh and and technically i could speak to that it's kind of um yeah you
Speaker 1did a really i think you did a deep dive piece on that several months ago and i actually um i read it uh because i actually i didn't know that there was a publicly traded soccer team first of all because it wasn't something that i would look at um but why it resonated was because uh i was in miami two februaries ago remember i think it was two februaries ago and they had a panel with um four sports owners at fii priority which is you know the future investment initiative the saudi pifs uh kind of davos of the desert they call it and it was all about valuations right and and where they could go 10 15 20 billion dollars for a team in whatever league right and and i just asked a question because messi had just scored a goal he wasn't supposed to play he just scored a game-winning goal in overtime for the uh for the miami team and i and and and you know i think that's one of the things that he's going to do is he's going to try to win and he's going to try to win and he's going to try to win and he's going to try to win and i and and the owner was talking about how he was torn because he's like here's this half a billion dollar asset that i have that i have to manage called messy and then there's this fan base and he he shouldn't play it's not good for me he plays because if he hurts and he blows out his name if something happens then i lose my asset for a year but then he plays and they win and i said at what point does the asset value of your team and your brand stop the enjoyment of the game because when i'm not letting the pitcher throw more than 70 pitches because i got to make them last i don't get the nolan ryan nine inning thing anymore i don't get like i don't get some of the things that make sports fun so i'm interested in that so you you had a whole piece
Speaker 2on this yeah well i draw the distinction between you as the owner of the asset um and the spectator the the you know the billions of spectators all over the world who are engaged in it um and also i'd point point out the suspense that you don't know what's going to happen it's runs it's unscripted um and it begins it has a beginning and it has an end which is then followed by a beginning and an end and in between time there is an industry talking and we wanted to do did he get injured how bad was the injury right
Speaker 1and it's 24 7 and there's fantasy leagues and there's derivative markets right exactly so
Speaker 2first of all look and and they ain't making new franchises really you know i know some kind of weird stuff you do in america yeah and of course we are creating these uh american football franchises the miami team only exists in the last five years but in terms of the manchester united and the europeans right they're not making they haven't made a new one in a hundred years
Speaker 1right there's the there's statements like our our nfl we have 32 teams right the the major league has 30. um i actually have a play for one of the expansion teams that is in my checklist with some some guys that have been working on it for years and you know it it's how we knight people in this country and um and therefore it's very scarce right so so to your point you know there's not they're not making more of them fast enough and and yet the demand is going to increase a because of community human live event well i remember
Speaker 2apparently with the singularity broken fantastically rich unless we die but you know 90 probability we were very very very rich 10% we die you know and and again rationally if you had presented that to the population at large if we'd had a ballot ai or not i'm not i'm not being anti-ai i'm just being anti how we got here um but if you had that hey um for sure you're going to be 10 times richer and probably will work 90% less but there's a 10% tail risk you know 10 on tail is is not tail there's a 10% risk that we might kill you um the the population at large would reject it and of course we are seeing that come through in in the polling which is which is not good but we're so we're going to be 10 times richer um and these and this this is scarce this is this is so scarce now so i i think they're well-based and i think they're well-based and i think they're well-based um like the number of really scarce assets also they deliver dopamine so scarce dopamine assets i mean that's google right so i've got a few other ideas but what i want i want to bring it back to actually sport uh the stock market is sport what we're doing is we're actually sports commentators and i think there's a very good return as the scarcity of the underlying asset is rising you're finding the remuneration is rising for the commentators and my strategic object object of being an entrepreneur is i want to emulate kramer right i want to be that person now to be that person um i so i have to be there has to be a disconnect and i am a fucking genius when it comes to markets um but ai i'm not going to be allow anyone to write and pass that off okay and so what i pass off is something that no one dares to to replicate which is the degenerate you know so people live vicariously through me so apparently i take drugs i certainly spent all my time trying to sleep with younger ladies and when i say you younger i don't mean 20s i mean 30s but you know i'm in my mid-50s um i i the vulgarity the chasing girls the living this billionaire paradise on top of the engine of my mind is how i am seeking to emulate um kramer and i will uh i i will i'm not seeking to be wrong but if i am wrong i don't care as long as it was bold it was well argued um and with personality so that's me so and i
Speaker 1think that's i think that's again just in the nature of the human hue which is a pretty temperate guy from what i'm gathering and then the brand hue which is the opposite equally authentic but it's an edge it's an edge persona that's real it's in other words you are this guy you don't like comb your hair different and put the tie back on anybody who wants to see a picture of of the non-real hue go back to 2012 and look up eclectic management and see the see the picture of him on stage with the perfect hair and you know it's still longer but like you you'll see it was
Speaker 2shorter it's shorter yeah shorter
Speaker 1you'll go okay yeah that was a version of him that was another edge persona but that one wasn't really in the sweet spot what i'm and i'm loving about this conversation because i wasn't expecting it was uh i was expecting to see the persona and and everything else that i've seen and and try and extrapolate it to the human you're kind of leading right in with the human and and kind of acknowledging the persona is authentic and it's a choice and um and there's a strategic choice to it that ties back to your own uh financial opportunity which is that if we can extrapolate that financial markets and poly markets and all these things where money is being changed and the casino is is 24 7 365 and crypto and everything else if these asset classes including sports including fantasy leagues including all that are going to become more and more dominant in the way that we use our time because we're not grinding away and because we could be 10x richer uh from wherever we are in in this new world if we don't die well then naturally we're going to look for humans that we can relate to to provide the judgment and so this is my thesis is that judgment taste context and trust are the only things you'll never automate at least at least for the rest of our lives i don't know if that'll be true 100 years from now but for for a year in my likely lifespan those four things will not be automated everything else should and will be or you'll be left behind well in that world the value the premium value of the cramers of the next which is what you're saying you idolize right is he figured out unapologetically how to just go find the money and if he has to be laughed at and memed at and traded against every time he makes a bet he doesn't give a because he's making three million a month but he's entertaining and he's
Speaker 2entertaining his number one role is entertainment because the the channel is like the it's a sports club they need to fill put bums on seats and there's another game to sell and another game and another game and that's what he does so you don't do that without we neglect the entertainment in in this thing that we're that we're doing or like that's my that's my my thing my my my disdain for the bloombergs and and the cnbc that they curate it where they remove the artistry and it becomes dull and what again i'm saying to you is just like the basketball or the baseball or the soccer right every day the market opens and it will close at the same time and we don't know we think but we don't know something sometimes it's dull sometimes it's fantastically interesting right that's the dopamine and well and so we are in the end to take we're sports entertainment we have we if you the route to being uh to be remunerated in what we do um is you've got to be more entertaining because that we can deliver the commentary but you have to we need people returning you know what you know what i
Speaker 1think is interesting and um i'm observing kind of i've watched your influence and your call it channels, whatever, you know, for the last several years, it's been on my rotation, my playlist, especially every time I get an idea or three or four other people that I respect have a similar idea. And then I go, okay, I got to check myself. I'm like, what is, what is Hugh saying about that? Or is he even talking about it? And it's almost kind of just in this thing. So that's how I've kind of looked at you. And one of the things that's always surprised me is for what I appreciate about, and we've never met before, this is the first time we've ever talked for, for those wondering, but what I appreciate about you through the proxy of your channels has been that I, the mind is obvious. Like when you listen to you, sometimes I literally have to look up like 20 words. Sometimes I have to like look up acronyms because I don't know them. And I've studied this stuff for years and I'm like, holy shit. I just learned like three things I didn't know. I'm an idiot. And then I go look them up and I don't feel so dumb. And so I appreciate that about you. And then I go, why is the view count in the thousands or why is that one only? And then what you just said kind of clicked for me because you're from their world, but their world likes it the way it is. And the person you're actually serving or the care to serve the, with the entertainment and the efficacy, right? The true rigor and the, I don't take myself too seriously because we're all going to die someday and it's just money, right? But we need to do something about it. And that's what I'm trying to do. And I think that's what I'm trying to do. And maybe people who even mean well, but don't have the, they don't have the chops that you have, but they have the entertainment value. And so they're filling the void on entertainment, but they're, they're vacant on the rigor or the context. And I think that that nihilistic market, that futile, that, that futility that's grown for all the obvious reasons, especially, you know, 18 to 30, and wondering what the future means. I think that that market is going to find you and catch up and that you are uniquely positioned to deliver that because they want an old wise man, but they want someone they can aspire to be, learn from, feel not judged by. And there's just not a, there's not an asset on the market like that. And I think that's the void you're trying to fill.
Speaker 2Yeah. I go easy on the old man thing, but the, Hey dude, we're all getting older. I'm 51. So, you know, it is what it is. I'm getting, I'm getting, I'm getting younger. No, I'm getting younger. Yeah. So the, my market straddles two opportunities and the one that I, I, I, the one that I started with the mission was that the young kids who have to have no choice. I mean, the, the AI and the tech, of course, the last 20 years has changed that. But outside of, of, of the tech, Wall Street's been the only game. And so I've got these wonderful kids and, and I'm kind of trying to reach out to them to say, listen, look, okay, look at me. Right. But I'm saying there is another way. Like here I am, this fucking amazing place. I kind of got a few things, right. Yeah. There is another way. And, and listen to it because listen to it before they beat it out of you. So my target market is that kind of twenties. Early thirties market where they're like, ah, you know, um, and that, and I like that. Now I said to you with this ADHD, um, I, in the last month, I believe I, I connected my brain to the, to the GROK bot, to the agent of agent. And oh my God, why to give it the, the, the plug, um, transformative transfer transformative for a mind like mine that can't finish sentences. Um, I, um, I've discovered. So I discovered that I was playing, paying the electricity for my, for the property that I had to give to my ex-wife, the $20 million property I gave to my ex-wife three years ago. Not only did I give her a $20 million property, not only does she hate my guts, I've been paying the fucking electricity bill. All right. And let me tell you, it ain't cheap. Okay. 70,000 euros. Okay. It's like nearly a hundred thousand dollars. You know what I mean? Um, so, and, and so it's, this is a plug. It's going to change my engagement. It is changing and it's going to change the engagement more and more because I can do more. I can do more. And it synthesizes.
Speaker 1So again, I want to let you run with this more, but what I'm hearing is when you have a mind like yours, it is so, so active. And yet it's also so detailed, meaning like you say, Oh, I can't finish a sentence, but it's not because you didn't finish it in your head. You wrote a paragraph in your head. The words just didn't catch up. I've got essays sitting.
Speaker 2I've got essays sitting on the platform that I forgot
Speaker 1to press post. Yeah. So now what you have is you have this thing that only understands like A to B to B to C to D to D, and then can synthesize 50 different thoughts, find the commonalities, predict what should have come out, put it into a thousand, 1500 words, whether it's a daily digest of here's what you got to do today, Hugh or Chris, or whether it's an essay that, and then your brain can go, no, no, no, it didn't get that right or edit it. because now it's chunking it out in a digestible format and you go boom, boom, boom, boom, boom. Someone like you is going to, and I, and I put myself in a, in a similar category, but different, we're different in that way. But what I've noticed is the productivity is real. Like all these reports that say, well, the productivity is not there. It's like, that's true too. But, but for my world, the productivity is real because I'm just cranking out more quality stuff because I'm, I'm able to, I'm able to save the typing. I'm able to save, I'm able to save on the stuff that just wastes time. And my mind is just able to flow. And now it's about, again, discernment and what to publish, what not to say, what to, what to give energy to know, what not to, but I can imagine with your mind as active as it is, it's, it's, it's very centering. And it's also like, Oh my God, like I'm going to be the best years of my life are coming now because you, you, you have a throughput. You just took the throughput and, and quantified you 10 X or 20 X.
Speaker 2I mean, so for the first time in my life I have a means of actually connecting my mind to the fucking, to the grid, to the matrix, you know, and finishing things. So I'm going to be offering you new and definitely more expensive but niche products, because it relates to something actually you, you, you said it kind of lit up. It was like, wow, yeah, that's it. I'm going to offer, I think about 20, 20 seats at the table, which I'm going to be doing for the rest of my life. So there are so that family offices come to mind, but this was initially aimed at hedge funds. And again, let's think about the, the cultural aspects that cause the world gets in the way. If all the investment was a plus B equals C, like we'd all be billionaires, but it kind of gets in the way when you are the CIO of a hedge fund. And today a $2 billion hedge fund is kind of like kind of where you should be for if you're kind of talented in your mid thirties and you're in New York or London, you will have a team of about 40 people around you, and you'll have a hundred million dollar tickets from pension funds. And both parties are invested on the premise that you are a fucking God. Yeah. And you're just a regular, well, maybe irregular, but you're just a human being, a human being. And, and you will have moments where you don't know what the quiz show, you know, it's, it's not a, and it's not C, but fucking hell, is it B or is it D and, and it's hard to reach out. You've got, you've got the best talent working for you. Cause you're the man, you can't go down. Right. And you can't sit in front of the clients. I don't fucking know. Right. Right. And so I want, I want to be, I want to be your dirty secret because typically I'll know, and I want to be 24/7. I mean, I sleep for eight hours, but 24/7, um, let, talk to me, baby. And I'll tell you if I think you're a fucking moron, you know, and I'll tell you if I don't know, but I'll know someone who will and we'll do it confidentially. Uh, that, so I, I came out of the blocks when I left the hedge fund thinking I would have that as a consultancy or I'd be a board member with funds. But again, culturally, and again, touching on some of the things with Kramer and whatever and myself and how I'm perceived money is fucking conservative. And, and that's to its disadvantage, I believe. Um, and, and I, I think that the last year, it was the fucking conservatives that pushed Elvis into the military. Yeah. All of that shaking his fucking ass on TV. I say we ended up like, we, we don't do shaking. Ass around here, send the kid out, punish him. Okay. The only place that small conservatism persists today is wall street. And so you can't have like, so if you've got a board member, someone on your asset allocation team or, or an external consultant and you want it on your stack, it can't be the asset capitalist. It has to be a black and white picture of a fucking mediocre person and you will grow your wealth. You'll grow your business with that person. So I have to be your dirty secret.
Speaker 1Right. And I think that's a, I think that's a niche. I mean, again, however that plays out, I think you having a round table of 20 hedges that are managing mid career,
Speaker 2but not even round table. Sorry, Chris, but not run. I mean, um, yeah, it's more like direct one. It's like, yeah, I got to talk about it. We've got to talk about like baby. Yeah. Tell me, you know, yeah, yeah. I'm sorry. Round table
Speaker 1is not the right word. The, the bat line, basically, the bat line to Hugh as my, when I'm lonely, because it's lonely, when I'm, when I'm responsible, when I'm ultimately accountable, when it all lives or dies with me and I have two choices and I'm 50 50 on them and I can't go down because my people are looking to me or they're just yes people because they, I'm, I'm the one who's, you know, at the helm. I'm, I'm Bobby Axelrod, right? I can't go down and ask my trader, uh, with any doubt, um, where do I go? And, and, uh, you know, it's not just the Wendy Rhodes thing. It's literally like the trade itself. It's like, what is, what is the macro? What is the micro? What is the, what is the risk? How do I hedge it off? What's my thesis? Is it, is it stupid? Is it right? Why am I holding this back? Like, you know, that safe, dirty little secret that that's a role that you can play. You sound like you want to play it. And I mean, again, if you're talking about 20 guys running money, that's not a lot of money. That's there's a lot more than 20 guys running money or gals. So, um, yeah, I mean, that's a fun meaningful business for you at this point in your career serves the market and anyone whose pension funds are tied up in those 20 are going to be happy that there's this dirty little secret, uh, to, to bring sanity. Um, because the reality is right now, I don't know how you feel about this, but I think even the smartest minds right now don't know which way to go because we're playing in some really interesting territory. And I know, you know, Raul, um, you know, I don't know what you think about the economic singularity and some of the thesis he's got coming out, but, but I mean, bottom line is I think it's pretty hard to see past 2030 with any clarity on, on, on where things go, other than to your point, we're probably all going to get 10 X richer, but we also might have it really lumpy before then.
Speaker 2Oh, we might. I mean, for sure. If, if singularity comes, I mean, I am, I'd like to say I'm a nice person, but I get so when I, when I put the bot thing onto the speaker, oh my God, I am hideous. So, you know, if they come looking to kill people, I'm the first person, but If the bots, if the bots come, they're going to be like, this guy doesn't say please and thank you to me. Oh my God. And my, my, my bad language. And I'm like, and I don't want that they're designed to always be affirmative. Right. Oh, something happened to my screen. Um, it may be my, it may be my bot. Um, there I'm back. And you know, like we're talking to, when I come off the bots watching my, my Twitter feed just now, I, I posted something at nine 15. I should fucking intelligent piece on, on some, some, like imagining if I was saying, Hey, listen, and, and we, we should pivot because people are okay. This is there's been a great audience for a financial creator. So that's like five people. Uh, but what about everyone else? But, uh, so let's pivot a little bit. But, um, I, I put it out. I was, I said to myself, okay, I'm down on the, the red cabbage, which is what I call the remnant and be the Chinese currency. I'm down on it. I'm down. I'm down on people that wear jack boots. I'm down on totalitarianism. And I said to myself, okay, what would it take for me to be less down on the red cabbage on the Remini? Um, and so I put a table and some working assumptions, um, but we'll do that. But the bots watching all the responses. And when I come off of like, take this motherfucker down, you know what I mean? And it's like, I've been thinking about it. I think I've got your voice. I don't know. What do you think? And I go, you don't have my voice. And we'll, we'll, we'll change it. And then we'll, we'll, we'll, we'll do it. The, um, so that the paper, so first of all, I went on the, because i'm not permitted to it's a closed capital okay totalitarian regime okay right uh secondly um and and fundamentally were it to be open and it wouldn't clearly wouldn't trade here okay and we can go china's one of these things that has huge tail huge tail tail i mean the the potential for what it might trade is my god is enormously the the divergence is profound uh so let's do the tail divergence where remember should trade 15 that you need 15 red cabbages to procure one u.s dollar which right now we're
Speaker 1sitting somewhere between five and six right
Speaker 2no we're 6.7 and 6.7 okay it's up there remember has been a strong currency this year um okay it's been stronger than the dollar um the So using 6.7, the principle. And so I said 15, right? And talk is fucking cheap. Give me your prem. I'm very Ayn Randian. And indeed, the degenerate person that I described, the degenerate, I am simply taking the pages from Atlas Shrugged. I'm the Argentinian, like one of the great fucking characters in the book. I'm the Argentinian guy with the family copper mine. Right. And I've gone from being the most impeccable, wonderful, upstanding member of the community to being a fucking degenerate. And there's a reason for that. But think of me like that. That's actually. Everything I do is by design. So I said 15. And back in the day, Kyle Bass was. And it still is. I mean, what a great business. You sell these essentially one touch and like. You make a hundred times your money. And you say, hey, but you just give me a dollar. Just give me a million dollars because most likely it's going to go to zero. So give me the dimes. Don't give me the fucking ball. And what a business. Well done, him. I don't. Morally, I think it's suspect. But hey, if people are willing to buy it, go for it. 15. Where does 15 come from? M2. What is M2? M2 is the totality of all domestic bank deposits held by Chinese citizens. At the present mark, between the two largest economies in the world, China has $53 trillion equivalent of bank deposits. Would you care to guess what the equivalent figure is in America?
Speaker 1I would love to know.
Speaker 2It's 18. It's maybe a little bit higher. Maybe let's call it 19.
Speaker 1These are bank deposits sitting inside mainland or these are bank deposits outside mainland by Chinese citizens?
Speaker 2I'm saying to you, let's turn it in America, right? I'm saying to you, add up all the money sitting in Citigroup, Bank of America, in terms of site and time deposits, and it's sub $20 trillion. And the equivalent in China is $53 trillion. US is roughly $30 trillion GDP. China is roughly $20 trillion GDP. And so one country, the M2 is one and a half times the money. And it is the money, right? The M2, what is M2? So again, let's. It's liquidity, basically, for. Oh, don't mention that word. I don't like that word. But it's the fundamental building block of the economy. It's where we begin. It's a liability of the banking sector. Banks have to pay you a reward for your deposit being with them. And for the last 15 years, it's been a. It's a fucking shitty reward, but, you know, they paid. It's a liability. And it demands that the bank find an asset, and an asset would be a loan, a credit. And that's either to the public or to the private sector, okay? So that's why it has this primacy. And I'm saying in America, it's one and a half times. And in China, it is, what, two and a half times? Yeah. And I'm saying to you, this should be the same. And I'm saying to you that a capital control, this is necessary in China, because if not, if there was only one China man, and it was me, I've got 53 trillion, apparently, in the bank, and I know the mark is fucking wrong. Yeah. And if you would open the door, I would take the money from the Bank of China, and I would put it on deposit at the Bank of America. Right. If I could. And, of course, in doing so, I would be selling renminbi, and I would be buying U.S. dollars. And in the process, I've described my tale of 15 red cabbage to buy $1.
Speaker 1Okay. So let me extrapolate this more. So this puts a challenge in front of Scott Besson and the current administration, because the rules that we put in place are not the rules that we play by, even though we're the hegemony, which has got its own set of strengths and pros. Our number one competitor is playing by rules we can't win by. We can't play by the same rules, right? We don't have a closed account.
Speaker 2We don't have totalitarianism. Well, you can, but you've
Speaker 1looked the other way. So how do you feel like, what's your assessment of how the current strategy with whatever operation you want to pick at, how would you scorecard Treasury right now? Not a political statement. You're not, you're not, that's not, we're just talking about the math. How would you score the moves of Treasury? What has you thinking based on 15 red cabbage to, instead of 6.7 is where it should be. The mark can't, isn't open. So it's not going to necessarily change or materialize, but if something changes it, these flows would change. How do you score Treasury? How do you score the playbook? What do you, what do you think the arbitrage opportunities are? How does a normal person play it?
Speaker 2The, so again, removing the politics aside, I love the administration. This administration are largely asset capitalists. The administration has a seed in the blood. I tell you a nice story. Steve Murren, who's sitting on the Fed and who was president of the, chief of the president's economic advisors, counsel, whatever. Just after the re-election, Steve was in Europe and closed door meetings with the guys who manage a lot of money. And you know, this rule, Chatham's law, which is, hey, what we saying here? Yeah, Chatham House law. Yeah, yeah. And the Financial Times ran a front page article, which is, which was despicable. It had no journalistic integrity. It had simple prejudice. They do not like the administration. Okay. And they were running with a quote from someone who had attended the meetings, who could not tell you what was discussed, but was saying that the overall manner of the, of the audience was one of, you know, disappointment. So that is prejudice built on prejudice and no names. And I found that repugnant and, and I tweeted that point. And Steve, like, again, we forget we're fucking human beings. And Steve, he sent me, he slid into my DMs, he's like, thank you, motherfuckers, but thank you. So, you know. Yeah. Little story. So I, I, I had been, they're doing, they've taken the steps that they can take to confront China. And my God, the summer of the reelection, I've got some bloody good papers with Alexander Hamilton. And I would recommend if you go back, I don't know if we can tag them later or something, but the. Yeah. Yeah. Yeah. It, it, it was the, yeah, no, obviously COVID focused the minds, but it was like, we have a mandate from the people who've been crushed by the fucking Chinese. And what was remarkable was a rich degenerate wall street type was given the mandate and that's the genius of, of, of Trump, but he was, and actually what was incredible was he seemed. Yeah. Yeah. He was able to do and fulfill the mandate and still does. I mean, he's repugnant with the Russians and stuff. I kind of get it. Like all war is bad war, but I mean, we like bullies, the history, history says, if you give oxygen to bullies, boom, they're going to come back more and more and more, you know, the unfinished business in Iran today should have ended in 1979. You shouldn't, we can't say nuclear. Yeah. Yeah. Yeah. We can't say nuked them, but we should have had boots on the fucking ground. You want, you're in my fucking embassy. I tell you what, kill them, kill them all. I'm going to fucking find your girlfriend, your wife, your grandmother. They're all fucking dead. You do not piss with me. I am America. And instead the American administration went nothing. And the, you know, the Mujahideen guys are like, wow, really? Like they're actually, we're the tough guys. You make a tough guy tougher. And 50 years later, we're still fucking dealing with it. Forgive me, but that's, you know, I'm a moron, but that's, that's my, my, my take on things. The tariff thing was palliative. It was the, the best of a bad bunch of things. The thing that I would have done, would I have done it, I think I would have given careful consideration to would, I would have closed the capital account. I would have to the sovereigns. Private sector, fine. sovereign central banks you want to come in and paint your tape but you have the red cabbages at 6.7 because the china will receive net 1.3 trillion uh new dollars uh in trading trading ship with the rest of the world this year and carefully and slowly and with consideration they will be in the market every day selling red cabbage and buying dollars to keep it here because let's talk about another world so we talked about the world where we're 15 you need 15 of these cabbages there's another world where china's a democracy uh there's a world where um it has an open capital account and let's say we get over this kind of uh traffic jam of you've had capital tied up and trapped for forever okay um but if you were if it was just like american and open and you had politics and then the xi jinping what all these guys they could be re-elected or kicked out you'd be trading four you need four red cabbage a chinese would be really really richer than they are today um but we're not there and that's why i would close the capital account so what would that
Speaker 1look like in the current market i'm not going to go into all the details right now but i'm going to go in the current how many moves away from that would we be and then what would that do in your opinion to the delicacy of tsmc and taiwan and rare earths
Speaker 2and yeah everything well forget them i tell you what it would do and why it's not being implemented um the stock market would be down 80 80 percent um but it'd be a reset we'd rebuild i mean you know i've you know like amazon was down 95 percent fell from pre-adjustments priest you know scripts etc from the the tech in march 2000 fell from 115 to 5 we can we rebuild shit when it's built on egalite you know i'm gonna
Speaker 1i'm gonna say this uh out loud because it's a thought and um i don't know if i even think it's true myself so i'll i'll just give it to you maybe maybe we'll both learn something or maybe i'll learn something in my mind i don't know if it's true but i don't know if it's true but i don't i wonder you know we've we've gaslit everybody with the economy is good because we can point to dow or nasdaq or smp right and go look at the gains you're richer and i call gaslighting because everyone really knows like 99 of the planet lives in the real economy um their only exposure to markets is through passive flows and and whatever that may be and so yes on paper and maybe even in their retirement because their house property is double or triple from when they bought it and because they're you know been a good boy and girl and socked away for 15 20 years and they're 401k they're up but you know it's harder i don't care who you are if you're a middle-class millionaire it sucks because you have tuitions you have other things and real bills are expensive and now the grocery bill and everything else is more and so you feel like an idiot because you're going well i don't want to be ungrateful because my smp is up i almost wonder if the reason why we're doing it's just so simple it's like i can't point to a metric that's as transparent as the market and signal to the economy good bad or whatever so if the economy drops in the market if the financial economy changes and then it also becomes another uh recognition of how hard it is for me in the real economy that's not as transparent and publicly seen or easy to point to then i definitely don't get reelected um even by my base and as trite as that is that's just politics right it's it's um it's all just about being at the helm doing the right thing requires being wrong in the current and being looked at 50 years in the future as doing the right thing and very few people are willing to lead that way because it means being judged now and being hated now i don't know if that's what's happening with this administration i don't know if the bullet through the ear changed that i'm not a fan of the person so it's hard for me to do but i can see a lot of policies i think i agree with just like you and have i fucked up the
Speaker 2camera no you're still on you're looking good i can't see myself anymore it's all about me baby you know we've got to talk about me we've got i've got to look at me it says allow camera microphone access i'm gonna let me yeah
Speaker 1you're looking don't don't don't close out on okay so so you can
Speaker 2confirm i'm cool with
Speaker 1that yeah you're and you're looking just as good as before okay um and forgive me the last thing you said there was no just i i'm thinking out loud like not not because it's so obvious but just like oh yes yes really all that's driving it
Speaker 2market the barometer is this
Speaker 1yeah because it's it's the only thing that everyone can see like no one can actually see at scale my house value versus yours or my my income statement versus yours or the pnl that says i'm paying bills net 30 even though i don't want to or you're paying one net 30 because people didn't book like no one can see that unless you disclose it and even then there's no way to like prove it at scale so we can just see it at scale and then we can see it at scale and then we can just go look the economy's up because smp's up and so anything that threatens that threatens power now the other side of that is an 18 to 20 percent pull down if it doesn't reset quickly could have fundamental uh drains on the strategy because now i'm i have to print more money at a time where i'm already trying to you know keep the deficit under seven percent and so there's other real impacts there too but i'm yeah i'm just thinking out loud with you where do we go from here is a hit point and then like what the hell does that mean to you i'm just thinking out loud what does it mean to the person who's just trying to figure out are they going
Speaker 2to be okay yeah so the um you know it's a bit like churchill and capitalism um may not be the best but it's the best of a bad bunch in terms of a metric um but that's cheap let's see if we can do better than that um without a doubt um the cios of america feel relieved and feel good and are desperate that this administration continue um i mentioned and rand and the the biden administration i don't mean this pull i don't really mean it to be political democrats versus republicans um but it felt like the some of the closing chapters of the atlas shrugged and if you haven't read it you should you should be you you need a you need to have read at the shrugged um to kind of help you understand what's happening in in the global economy and indeed what's happening in markets at large but well and
Speaker 1also the realize realize how fortuitous how how prophetic she was writing that in 1957 yeah and acting as if it was happening today like she was writing it as if it was happening then and so you know to your point
Speaker 2like it's it's
Speaker 1a must read regardless her
Speaker 2family of course like you know so she from she had first hand experience of the devastation that is wrought by you know by the bureaucrat becoming replacing the entrepreneur and the poverty that they quickly imagine so so the the ci the chief executive office and so it's they're they're ebullient and this is why uh trump uh his his war fund is enormous you know um for the continuation um the the budget deficit that you refer to the absurdity of near seven percent when the economy is booming speaks to the divergence within the economy and then let's again let's bring let's pepper with personal experience i want to live in uh venice beach uh california but i want a boat home there um and one of my favorite programs and i think i've styled myself on on the lead character is californication yeah um which uh is following the the life of a writer i'm a writer and he's a degenerate and and he sleeps with a lot of ladies and he i even had his porsche um and uh about a month ago i went to view a house which just it just invoked uh hank moody uh it was in the lanes and it was in uh in venice beach and the asking price was three million dollars um and property housing presently globally does not work um that three million would require a mortgage of about 20 000 dollars to buy a house in venice beach um that's a huge amount of money that's a huge amount a month wow yeah and and the seller i mean the cell this is a the seller actually needs to sell because they were australian they're going back to australia um but most sellers i don't know why they're selling a you you shouldn't be selling because if you sell you're going to lose your your mortgage your 30-year mortgage which is costing you three percent a year for 30 years it's the most it's the greatest gift ever given to you by by the us government right um so you're paying three and i'm coming in and my 30 year and then of course it's going to be a jumbo now there's going to be some credit risk i might be paying eight and a half nine like i say like at least 20 000 a month not good oh and then i've got what one and a half percent property tax a year on top of that nothing has happened so i used to jokingly say that i could see dead people it was a the term or the phrase from the kid I don't know if the movie, I don't think it was. Six cents. Six cents. Thank you, six cents. I can see dead people. When I see residential property, and I don't mean hyperbole, but everything is at least 20% too high, and there's no liquidity. I can't come into the market because the market price is wrong, and people, by and large, don't have to hit the bid.
Speaker 1It plays out differently if it's new construction versus resale for all the obvious reasons. The resell, the seller can't buy down the note, so it's this false indicator too. When you see the normative numbers, like in my neighborhood, prices are pretty stable. Transaction times, 45 days went to 60 days, not a huge change as far as days on market. Volumes are not high in general because it's a very kind of enclavial place. But at the end of the day, if you looked at that, you'd go, oh, things are okay. There's not a lot of sellers. There's not a lot of buyers, so it works. But it's all bull crap because the stuff being sold is mostly new because there's not a lot of inventory. And the sign on the street basically says 5 point whatever APR, 5.2, I think, from the builder. Well, they're buying down the three points you just mentioned. And that's the only reason that thing's even got a chance of moving. Or it's an all-cash buyer because it's two and a half million bucks, right? So, you know, that could continue, cash buyers. I guess. But when you're thinking about, like you said, the person who's aging out or maybe now inherited the property from mom and dad and the basis was a couple hundred grand and now it's worth two million or a half million and a half. They're going to fire sell that thing if they don't hold on to it and can't put a renter in it because they want the cash. And so, yeah, the force is in. Yeah. So let's do it another way.
Speaker 2We've had four going on five years since the refinance set. And like I said, if you've been the beneficiary of that, you've got no appetite to change that inertia. But life has a funny way of actually making you change your mind. Kids maybe are leaving or you've had a job opportunity or whatever. And so I think housing is going to continue to be a bit of a drain on the vitality. It's going to be a bit of a drain on the vitality of the economy. And at some point, I think we may see the need to gain liquidity, i.e., you'll find that house owners actually do have to move, that they've suspended it for the best part of five years. But they do need to move. And that's going to require a reset in some of the prices. So I don't want to have no hyperbole there.
Speaker 1Yeah, no, I think I think it's just I agree with you. I think it's one where I don't want to say it's obvious. It's just. To me, what's obvious is something, something changes. And when it changes, it could be slowly, then suddenly we go, oh, that makes more sense now. Meaning like it could be silent and violent when it changes.
Speaker 2Again, it's this is we do our not we, but those that we elect do their damnedest to maintain the inertia. Yeah. And what I'm saying to you. One of the reasons we have a budget deficit of nigh on seven is we have a moribund housing market, you know, the housing stock was that I should know that the stock valuation of residential property in America must be like forty five trillion dollars or something and it's stuck and there's yes there's activity there's not great activity if we're not moving house than I am buying a new whatever, you know, bad, etc. And and that I I can't imagine a vibrant. Emeritocratic economy in the sense that everyone gains without there being a more normal housing market. So, you know, when we started this by saying, is the stock market the answer? The stock market's on a tear, therefore, where's the wealth? Why are people feeling so miserable? And of course, we the stock market is about a 60 trillion dollar asset and the housing market is is almost of a similar size. And one is vibrant and alive, speculatively. And one is asleep and you put the two together and you get this conundrum, which is the the United States economy.
Speaker 1I want to I want to touch on one thing before we move to a different I have a different question for you, but I want to finish up this thought. David in the live chat asked this question, so I'm going to weave it into into one question that combines the two. So his question was part one. And then I'm going to do part two. Does what happening in France in the streets affect St. Bart's tourism, hotel banking negatively or positively? That's his question. And then he was saying, Hugh, you seem to be more disposed to staying in the US or its economy versus in Europe. So that was his question. The only thing I want to add to that, as you mentioned, Venice. And again, I think when it comes to housing, it becomes this question of what good is it to be worth 30 million more or 10 million more if I have to put barbed wire on my residence to protect myself from the people that live next to me? And Venice is, again, another microcosm of that K economy. Right. Because you literally have all the cultural beauty that has always been Venice Beach that is eclectic, true to your purpose. Right. And yet it's very pricey dirt and and infrastructure if you are lucky enough to own a boat slip or a house there. But you're surrounded by some of the hardest living humans on the planet. And I say that because, again, tie France together with its personal impact to you or not in St. Bart's. Are you feeling it there or are you insulated? And then what's your. Clarity towards the U.S. versus Europe? So the.
Speaker 2In terms of I'm not everyone. And. I need that jagged edge of the two communities kind of living side by side, if you will. But I spent 20 years in Notting Hill. And it becomes less and less as as as we gentrify. But you had both. I'm dropping these London names, it was simply rich people, and I suffocate in a rich people environment. And Venice has been and is in the process of gentrifying and largely complete, but it has no barbed wire and the the the people who look after Venice seemed to have done a remarkably better job than those who look after Santa Monica. I agree. I agree. I agree. I agree with that.
Speaker 1I live a couple of beaches north, so I can I will say I agree with that. Santa Monica is sad to me. What's happened? Yeah.
Speaker 2No. And so forgive me if I'm Santa Monica, Malibu is north or south north north. Yeah, I I've been going to that part of the world for 15 years and I love it. It was only my last trip that I discovered northern Santa Monica, like Montana Avenue and to the north. And I was like, I want to go
Speaker 1to the north side of that and wow, closer towards
Speaker 2Palisades closer to Yeah, well, the like the which no longer exists, but Wow, what a beautiful it means Bel Air what a what a beautiful what a beautiful environment to live but south Santa Monica and of course the clock tower my buddy's got a office there and and yeah, it was urban planning and it made a lot of sense. We brought the above ground. We had a train from central LA and it stops right at the pier and and we built those shopping centers we had yoga studios we had cycling lanes what could go wrong and it seems everything's gone wrong because that part that's like a zombie post apocalyptic world around there is like terrible whereas Venice pushed the vagrants they said like you know, listen, there's some shitty land out by the airport and it's yours like like you can go we won't bug you like just go and put your caravan and like you know your things out there and and for now that that's working another lament and it's to that point so I who was it was it robs be not robs who was it that traveled America like the political scientists in the 17th or 18th century and sometimes I feel like like him. And I frequent I take up the hospitality of friends and new friends and I stay with people and it breaks my heart when I stay in these gated communities the gated communities oh my god like Palm Beach and I was in North Carolina and they're everywhere the the rise and rise and rise of of Utah Utah State isn't it and the Mormons but the Park City. is another example of you know of a part of a of a gated community a white community that use uses you know the the rest of the community to to to build the perimeter wall and to guard the perimeter wall to to keep their brethren out I kind of just grotesque I hate it so my the only place that I can breathe in America well is is so whole in New York and it's kind of West Hollywood and that kind of access that takes you to. to van der speech and again that's why i would be happy to reset markets down 80 because i know we would build it i know we'd come back and we'd come back better um so and then and u.s versus america uh europe the u.s won um if we go back to gfc and remember gfc culpability should be shared widely but the predominant bad strain the malfunctioning component of the banking system 2004 2005 2006 2007 was the european banks europe runs a trade surplus it's a net saver and it it has to put those assets to work and it puts them to work in the only viable place which is america and and they up
Speaker 1uh so your perspective you you see you see the second order function that they played in maybe the derivatives market and then and then the weapons of mass destruction as as buffett called them uh is more culpable than you know the mozillos and the countrywides and the new centuries just creating warehouse lines and and things that were packaging up toxic like in other words that was bad but you think what what what europe's piece of it was was worse which led to i'm not saying
Speaker 2i'm not saying it was worse i'm just people forget but yeah that that the the majority of the the stock that went bad was largely european um regardless it had to be it had that we had to find a remedy again the joy of america was was there was a remedy the remedy was uh re-price bring it down baby bring it down you know and like you know those banks and you know they they faced the the penalty which was you know uh the destruction in their their capital um americans were american banks were obviously um you know had their own fallibility as well i want
Speaker 1to bring attention to some of the stuff you've written um in the last year but even in the last couple weeks related to genius and stables um i know i know you still still own the hotel but i remember uh an interview you did somewhere in the last year maybe where you had mentioned maybe it was a year and a half ago hey i might sell the i might sell the house for 35 million and go into bitcoin um and you weren't always a bitcoin guy um and i don't know where you sit on it today i i'm curious as you as you think about asset classes and what's likely to happen versus what should happen because what's likely to happen is more tradable than what should happen um so i'm curious as to where do you where do you kind of anchor in on some of these things as far as a personal standpoint like what you're doing with
Speaker 2your own portfolio but i mean that's always my my starting point to understand the world you you try initially to put it through your own prism and then you have to recognize that the way i ain't the wall right right um so you've got to take stock of that but we'll keep it and i can answer that and i can go back to to the question as to how do you think about what you're doing with yourself and how do you think about what you're doing with yourself and how do you think about what you're doing with yourself and how do you think about what you're doing with yourself and how do you think about what you're doing with yourself and how do you think about what you're doing with yourself and how do you think about what you're doing with yourself and how do you think about what you're doing with yourself and how do you think about what you're doing with yourself and how do you think about what you're doing with yourself and one of my daughters um and i put her in charge of the hotel and the hotel has like gross revenues of like over two million dollars and it has a um it's got about 30 40 000 uh recurring um expenses on a monthly basis that have to be managed and then on top i'm spending two three hundred thousand a year keeping it you know as splendid as it is and i had it a young girl uh responsible for that uh and of course she had you know so that it was catastrophic which is why i came to discover i was paying 70 000 for the electricity bill of my my former wife no and so oh and the great joy she quit the great choice she quit for the better offer because oh of course in this world there's another rich guy that's right right um anyway and and so not i'm not i am i believe that culpability the recognition of so is vital if you are to prosper in this world and i made errors you know um that's how you begin alcoholics anonymous you my name is hugh hendry i am an alcoholic you take responsibility now uh well i have to replace her so let's do the uh let's do the pricing because this is how the mind works with stocks we can everything can be broken down into basic arithmetic um she would need two and a half three thousand a month for accommodation for rental um and then she would need a car and which i would rent um and then she would need um money like she would she would need like groceries you need you need like a a thousand of of of spend and then you'd kind of want to save a thousand or so and you change that ratio as you wish okay so that takes you to about 60 000 um euros a year for a 23 year old remember but for anyone um now here's the issue with europe and america and and this is very redolent because it's kids there's a lot of people protesting there's a lot of kids manning the barricades in paris and across the country um the the and it's my migratory kids who work in st bossing boss is like a very sunny uh ski resort and and so you i call them a chambermaid or a she a ski charlie girls i'm the i own the charlie and i've got girls who who work for me um um so they're they're french they're not saying bars they haven't spent five years on the island and so i have to employ them directly which then makes me liable for the french government's social charge and that takes the sixty thousand that i have to pay and it takes my gross to 100 000. um euros which is what i think about 120 000 i think um and so guess what i am not replacing um the the girl because it's impossible and that that i'm plus let's let's do let's we did the story of me looking at property um to buy in venice beach and there i'd be looking at a you know the um the 30-year fixed and maybe i'd be able to construe it i would say hey listen i'm commercial maybe i take on a little bit risk more i'd get bumped up on the the risk thing but they might give me um would you call it like the one touch um where you're just as interest only okay so america i've got some options yeah in europe in europe i don't uh in europe they'll give me 20 20 year uh fixed but fixed just now somewhere closer to five but they're gonna ask me to they're going to demand not ask they're going to demand that i repay a 20 i i repay five percent of the principal every month every year so if i'm paying five on interest and i'm my amortization is let's call it five i'm paying 10. right right so again i am buying a new house right and and again my economy therefore is going to suffer under the weight of normally you would expect people like me to be involved but you won't i need a one touch i need the not one touch i need the infinity loan of the interest only yeah you want you
Speaker 1want different capital different capital structure because of a different capital market um yeah yeah more option now there's a third option there's a third option this would work for you or not but just as a third option the other the other calculus right which is uh maybe you could replace the goldie um role uh without having to worry about the french structure um because you could use an employer of record meaning uh the hotel could work with so one of the companies that i've used and they're they're a subscriber to this channel is pebble p-e-b-l there's several out there uh rippling's one deals one wouldn't use deal i used them before not a fan of their customer service great platform same thing but not a fan so that's just my opinion but just to be fair so it doesn't sound like i'm plugging any one thing but pebble hue could be an option for you essentially they allow you to hire in 185 countries i'm assuming saint parts would be on that list um well france would be on the list
Speaker 2france would be on the list and
Speaker 1And so, and so what, what happens is you pay 399 a month. That's kind of your rack rate. And then you outsource. The employer is actually their French jurisdiction entity, but you're the beneficiary. So like, let's say you, it was 60,000 euros, whatever, it doesn't matter. And let's say she wants to be paid in euros or Franks or whatever the hell doesn't matter. You just get a debit off of your account for the, the weekly whatever it is, right. 1250 a month, whatever that is, right. That just comes out of your account to pebble pebble pays them in their local currency and local account handles their HR, gives them benefits, whatever. You pay the actual fee, but you don't have to pay all the other stuff. Now I'm not sure if that would change that social thing or not. It may not. I don't know.
Speaker 2I don't see how you make the, I don't see how you make, I mean, for that to succeed, the pebble whatever would be doing sovereign tax arbitrage. And I don't see how it could, how it could make, but there's a liability that exists. And the sovereign will pursue someone for that liability. So I don't see how that third party, it may not,
Speaker 1it may not change the actual number. It may not change it. That's what I'm saying with the caveat, but it is worth exploring. I happy to set up separately. I'll just send you a person. They've been doing it for 16 years. So they're not, you know, they've perfected and invented what's called the employer of record.
Speaker 2But again, if we come back and we look at, and we, we talk color on, on France. Yeah. The kids are fucking protesting like Macron. Yeah. Yeah. A few years back. And I said at the time it was noble and long overdue reform fiscal reform, but it was being conducted at a catastrophically wrong moment in the history of, of France, which is to say you can, and this again is the, the, the, is it genius or the, the knowledge, this, this, this is what the present American administration understood. You cannot take on root and branch reform austerity or whatever against the backdrop of an economy, which is in the doldrums, which is dead. Your one opportunity is pump that system for growth. The admitted the U S emissions, like we're pumping and we want 5%. And at five, there's a big sheen, which is the stock market and a lot of feel good. And that's where you come back. You say, Hey, we, we, we got to push, like, look how great the economy is. I need you working another five years before you take that pension. That's an easier ask. Right. Right. And so I've got kids who are profoundly disadvantaged. That's that tax system that I suggest that's a system that preserves the status quo, like the people. Who have a job stay in a job because I can't replace them with the kids because my liability changes. And so the people who are being fucked, when you try and change it, they go on the streets. They go, we want to be fucked. We want to be fucked. I mean, this is why I moved to a tropical island. No, let's do the interesting point about 35 million for that, for the house. I'm full of, I'm always gloating. I don't mean to be, but you know. I'm, it's not a gloat, it's a number, um, I'm asset rich and believe me, cashflow poor, even I'm paying 2% fixed for 20 years and I'm 5% amortization. So I'm 7%. I've got 7 million of loans. So I'm $50,000 healthy
Speaker 1because you're, you're actually gaining equity in the thing that, you know, the asset richness is
Speaker 2getting richer by, you know, what, you know, don't let me amortize, let me invest the fucking money in the market. So I'll create, I'll create equity in a, in a better manner. Right, right, right. Yeah. Give me the extra five. Yeah. So with the divorce three years ago, a Knight Frank value, the property, it's $35 million. Um, I would not sell it for less than 60 million today. Um, and again, let's, and this is the scarcity, which embeds my call on the Manchester United. Don't tell me the EV EBITDA, don't tell me the fucking price earnings ratio. Go fuck yourself. Right. Tell me how many there are ever. Exactly. So, so the guy who is, who's pinched, uh, the wonderful Goldie who was costing me a hundred thousand dollars, uh, a hundred thousand euros. Uh, he just bought a house, you know, like, so same as one of the joys is, you know, that movie, um, was it a wonderful world where he runs the bank and the bank has got a run. And, you know, Oh yeah. Yeah. It's a wonderful life, a wonderful life. Like it's one of my favorite business movies. Yeah. I'm watching it. And there's a thing like, you know, the angels, like, Hey, you know, like when the church bell rings, yeah, there's an, there's another, it's his wings. Yeah. There's another angel with the wings and, and say bosses is like that. There's always another, I'm just going to say millionaire, there's always a billion. There's no, a billionaire being created somewhere in the world every day. Right. And, and the wings, typically the wings is a place around here. Okay. So that's why I would sell for less than 60 million. So, so that the billionaire guy, he was my best client. So I've lost him. I've lost, I've lost four weeks and I've lost the wonderful girl. Okay. Now he, he, he buys a property, right? He buys it. So this property, I know it, and this property, I try to do a deal, try to do a deal with. Other people. And I could have bought it in 2022 for 13 and a half million. Um, and my plan would have been to spend another 2 million, call it 15 and a half, uh, because it was tires and needed up upgrading and, and it was an opportunity to add at least one bedroom. So let's call it all in call it, call it, call it 16 million all in. Right. And it transacted at that level. Uh, the person who bought it four years ago, just sold it to the billionaire and his wings for 35 million. Nice. Okay. So, and then think about it. Um, space X is what $2 trillion market capitalization, um, and almost certainly open AI and entropic will have. I think it's a good thing. It's a good thing. It's a good thing. creating six trillion of paper money and there's probably at least a thousand individuals involved I think it's a good thing. It's a good thing. in those three entities who've become billionaires and for sure as hell they're going to buy a property in saint boris and they might buy it from me and it will have the number will begin with six i don't want to sell uh but you're the trader the scorpion there why did the scorpion kill the fog halfway over because we're born that way um now and then i wouldn't be cash poor I would buy a secondary home I don't need a gin palace I would want to continue living here I would be able to afford the property in Venice Beach I would have to pay tax which would be 10 or 15 million at that level but I'd be left with a kind of 40 million stipend and I would I would buy at least 5 million in in crypto uh which i think is where we were coming to probably the more interesting part and and and i like you're right i said this before and i probably said it when the the bitcoin price was 100 000 and of course people ridiculed me as it as it halved um and if we were to bring in raul's i mean well done raul well done raul i mean just amazing not necessarily you know he's amazing he's built an outstanding um business and he's and he deserves all the credit and all the wealth that comes with that outstanding um the and another thing that you didn't mention probably to save my embarrassment but i'm pretty prominent and on record as saying that i think the bitcoin or some derivative of it trades closer to a million dollars yeah a million dollars per coin um and where are we today about 80 000 um now again if when i say that um there's a calculus which is really really really straightforward which we can discuss and and the calculus is the market capitalization of the bitcoin and the market capitalization today i think is one and a half trillion dollars and that's that's tiny that is tiny in the world of global capital markets there's about four or five hundred trillion of of global savings and the gold market as you know at four thousand one hundred and thirty eight dollars or wherever we are is valued at about 35 trillion dollars and we are and let's again go back to things we've discussed, Besant. Besant understands this, he understands, and this is very much the retreat from accepting the mercantilism of the totalitarian nations and the savings grace of that was the capital they were the buyer not even the buyer of last resort, they were the buyer of everything and as we push that away the dollar system needs something to replace the totalitarian sovereign bid for the treasury and that takes you into the world of the stable coin which is fully endorsed, like I say the administration are acid capitalists, I'm sure they will take great joy in that and so what I'm saying to you is the modern, the next iteration of the dollar standard and iteration so you know up until 1933 we had a gold standard then we had, we don't kind of know what we had, then we had bread and woods and in bread and woods without a public press statement morphed into the euro dollar monetary system and the euro dollar system which is a private unregulated, dark node connecting all the world's banks has been responsible probably for more than 90 percent of all the dollars created since I was born quite like that actually, it's a true book and so we went from gold to something, the great depression to winning the second world war beating totalitarian states introducing bread and woods bread and woods actually having kind of the same problems as the gold standard being secretly or without fanfare replaced by the euro dollar system and now I'm saying to you there's another pivot coming and that pivot is the world of stable coin it is inconceivable that we can move into that world with bitcoin at one and a half trillion dollars
Speaker 1does it work? yeah I can't do the math I can't do the math any other way either and I'm saying the math is, the math, I have so I've been around that asset since 2013 I first discovered it in 2011 but I have challenged my own thesis because again there's plenty of stuff on my own stack written about all of this and you would say oh he's a bitcoiner for life whatever and in many ways I am both on the principles of it and it's design but as an asset though it is a conundrum and as someone who's giving advice I'm certainly not telling anybody to buy anything what I cannot reconcile in my mind is in a world where we know regardless of the slowdown, the pause, the regulatory capture, whatever agentic beings will outnumber humans by a factor of a thousand or more in a short period of time three to five years and they will not transact over swift rails they will transact 24/7 365 in micropayments amongst each other agentic to agentic as well as through human loops and vice versa and that only works on some kind of crypto networks and underneath all that there has to be collateral and so if we believe that gold can go higher and 35 trillion is where it's marked at today and silver can go higher no one's going to dispute that we should all probably own some of that
Speaker 2I just I dispute that gold goes higher okay so but I mean I don't as a statement gold can go higher let's say it doesn't let's say it doesn't but let me qualify so gold gold the metal normally I prefer the metal to the to the miners but whatever but I am I would not invest my scarce speculative money speculative capital in gold because I can't conceive of gold trading at 70 trillion dollars which is say bigger than you that's where I'm going right
Speaker 1so this is where I was heading with you you and I are tracking so I'll let you finish that statement no no no so you take over you take over no no no so so this is what I'm saying though this is where I think I'm tracking so the simple kid from Trenton New Jersey me right who was not born into an investment-grade family was not and very grateful for everything that I was born into but that this was not in my vernacular was not in my awareness the simple kid from Trenton New Jersey goes okay one and a half trillion in this thing there's only 21 million of 90 some odd percent of them have already been mined into existence and are held somewhere a portion of those have been lost programmatically no more can be created and the next two percent of them that will be created are going to happen over the next 120 years every 10 minutes in a 24/7 day with a having every four years and that is programmatically incorruptible and that is something you either know or don't know is that going to go from one and a half trillion to 15 trillion before gold goes from 35 trillion to 350 and if my answer is I think so I should probably own some it's very easy to see how a Bitcoin as collateral as whatever people want to call it a risk asset speculative asset starts to become more of a store of value because institutions take the volatility down but while the volatility is there it's a feature not a bug and if I can buy it at one and a half trillion market cap and all I'm thinking is over a 10-year 20-year horizon it could be a 15 trillion dollar contributor to the global money supply I 10x my my money with something that I can carry across a border in my pocket that has utility in a portfolio I don't know at what percentage but to me I do argue that I should probably have some and when everyone else thinks it's a pile of crap or dead or a boring conversation that's usually the time to probably pick some up that's again I'm not giving financial advice I'm not telling you I just I did that same math I'm going if we believe gold and silver are good and they could go higher or stay the same do they double triple or quadruple before Bitcoin 5 10x's I can't see a world where that happens
Speaker 2yeah you're right absolutely we're on the right page
Speaker 1and I also go and in a world where we're not even the main consumers anymore so we become the scarce asset yeah and in a world where we're not even the main consumers anymore in an economy where we're at 30 trillion like you said and China's at 20 and whether those numbers are real or faux or made up or centralized whatever it's what it is it's real it's there it's what we count on does that world increase in consumption whether GDP is still a relative metric or not it's a whole other conversation for three hours but the point is that number goes up deficits rise they get papered up with printed money because that's the system we have and hard assets that are scarce will probably be valuable and this is one that I can take with me it's not a sports team that could be in a town that gets sieged it's not a piece of dirt that gets rezoned it's just it's again that's where my brain goes to it is that the simple math
Speaker 2I think your brain is working well so I keep fucking right I just managed to refine the link
Speaker 1to the next episode of the show so I'll see you guys in the next episode. Bye. you know I had
Speaker 2I had that conversation with my son recently he's have kids go through periods that he's having problems but I had to reiterate that without trust you got you know if he can't respect me then we kind of got to take a pause in our relationship until he can because without trust you got and that extends to business and extends to markets extends to politicians
Speaker 1yeah yeah and I think you know for what it's worth because I want to respect everybody's time I want to give you the chance to pick up on something or say something that you haven't had a chance to say I don't care which direction you pivot but I do want to start to land this for folks as we come up to the two hour mark and I want to I want to really acknowledge I didn't know what to expect I knew I was going to enjoy this conversation because I've I've been a fly on the wall watching you I actually treasure this conversation because I did not expect you to trust the process or even your own self enough to kind of go where some of the places you went and I think it was so damn human I hope people really take that away I hope we take the veneer off and recognize that as as human beings we can know what we know and we also can be very fallible and and the path to where we all want to go meaning purpose non-futile starts with us being that way to ourselves and I just I just really appreciate how you've how you've shown up today man i i have a newfound respect for you uh that is beyond um the intellectual one and um and so for for me i just want to thank you for for being so
Speaker 2fucking awesome thank you thank you the the the bane in my do you know what the bane in my life and it's wonderful but i travel and i i was at the coffee shop yes two days ago and a wonderful chap uh came over angus and he's like yeah i read you on on on twitter you know and uh it's it's nice when people reach out but i was like the bane is i've got middle-aged men that love me but i don't have any hot girls coming up wow you're the answer capitalist you the i want to okay what can we offer uh first of all um there's one thing we can talk about bitcoin and we can have these valuations yeah yeah yeah yeah yeah right uh what's your fucking catalyst and uh it you've offered it i just want to like make sure that the point sticks and the agent of agent is bringing proof of concept right basically we're moving from uh library tower and we're moving from an environment of rebellion i mean this is really hard like so yeah yeah is it don cox i think it was don cox who i think he's maybe dead now but he was a wonderful canadian uh nesbit whatever they're called canadian broker guy he was a strategist on the commodities and and his and i'll never forget it he said the most powerful bullish thrusts prices go higher when those who know it best love it least all right um and and that was very redolent for me in 2005 i launched an agricultural equity mutual fund uh which went on to become the fund for a while it's the largest global fund um and it was partly meditated by by that comment farmers and they were selling off the land to bill gates they were like if you were rich you would buy a farmhouse and turn it into a fun place um and that was the beginning of a of a great move in in the attics um bitcoin is there it's there because those who know it best you know that the brothers they fucking hate
Speaker 1oh they can't tell they can't stand the ties are now showing up at conferences and the politicians like it or hate it they you know the next stage
Speaker 2and i i think i saw it some of the um some of the comments there uh the footprint so the thing that had to happen was it had to be brought in from the wild and it had to be given american sovereign blessing and that's happening and that's and the manifestation of that is the vol was receding right now um the vol had to recede the only way you can get to bitcoin being 10 trillion on the way to becoming 30 trillion is with lower volatility because it can't it's one and a half trillion dollars because it's still a still a hard thing for an institution to own but bring the vol to 10 like like the stock market like treasury market you could you got yourself a big asset class so falling vol and you're getting a blow job from best i shouldn't say that um but you're getting you're getting government sponsorship that if it never conceived to be a pet project for the next monetary system run by the us sovereign so the guys who know it best fucking hate it that's bullish the low volatility that's bullish and finally probably ethereum probably i'm not the best person on this but my limited knowledge and row would be better but probably ethereum is going to be your proof of concept and the agent of ages and the catalyst to demonstrate that you know well and
Speaker 1again when you hear when you hear larry fink and people like that talking about rwas right and everybody goes what does that really mean what it means is it needs rails like if you really just simplify it you can't tokenize every real world asset without having rails by which you do that yeah so when you have thousands of blockchain networks that are what i would call the walking dead or the walking wounded in venture terms because they actually have a plenty a plenitude of holders but those holders are not actually doing anything but holding and hoping um then there's consolidation they either decide to uh move over to one of the networks that has the network effects and that could be suey that could be east that could be i'm not going to name you know again ral talk to ral and then and then figure it out but the point is there's there's going to be consolidation because there always has to be and then there's there's a couple that are already blessed or that will be blessed eth is is probably likely to be one of them for all the obvious network effects that everyone's talked about but when you hear people talking about rwas and things like that and you realize that a tokenized world is the only world that functions where agentic beings are consuming um whether the whether we're in charge of them still or whether they're in charge of us isn't the point the point is they will outnumber us when we're at 10 billion people there will be a trillion agentic beings and they will all have wallets and they will all transact every single day on our behalf and on their own behalf and those rails will represent the world that we're in charge of we'll represent the digital programmable container of every physical real world atom and those atoms will be scarce and uh the bits will be arbitraged and it has to happen
Speaker 2somewhere yeah okay but that okay so we um on behalf of the audience i have to offer just a little bit of pushback on that good which um and again i i don't know where it came a gift from the odds but i literally don't know where it came it came from the most oddest source i think i watched a a reel on instagram with a mexican billionaire that i didn't know it wasn't carlos slim or whatever and he spoke about bitcoin and um and i wrote i wrote a fucking good paper on bitcoin which was the theology if you will but you know it had how to make money um uh with based within it um and and so the the legitimate concern you have is the quantum computing um the and it's not just the quantum computing it is the the maverick and beautiful political structure that governs bitcoin it's been built to be dispersed no no one can lead it it is not a consensus forming organization and it tries everything to resist change and the and it becomes and i use the analogy i don't know if you read the paper i i used the analogy i actually did i
Speaker 1i think i actually did but i'm
Speaker 2not sure remember i was talking about the people's republic of jerusalem or whatever you know the monty python the life of brian yeah and john cleese and you have that wonderful sketch which is like fuck the romans we uh the part the the people's front of judea that's what it was the people the people's family and then it's like hey whoa fuck the people's front of judea we are the judea people's front and fuck you and that's that is a structure that's gonna struggle in defending itself yeah against the super computing that's all i'm saying
Speaker 1no no and i i think i'm glad you pushed back because again i'm not i'm not here to sell somebody on a thesis i'm i'm offering and you're the perfect guy to do it with i'm offering things for us to debate in public and sharpen our own minds um we have these forces that are real i mentioned some of them we have these other counter forces or these counter things one of those being uh the very nature of bitcoin that makes it idealistically beautiful right decentralization flies in the face of the incentives that move things into call it a stability or a stable asset class right it flies in the face of it and so when you when you start to reconcile those forces the people who love at least i love that quote right um should be the ones buying it or whatever whatever that was but that was very because it's true that the purists start to hate it because it's now not what it was it's changing it's selling out or whatever but at the end of the day it doesn't function at global scale if it doesn't morph and yet you're already seeing the debates around quantum resistance the solutions are out there and theoretically you could make the argument that uh a because it's so small one and a half trillion in a global economy of 900 trillion dollars worth of stuff floating around um it it won't be the first thing that gets hacked right in other words like when we have when we have quantum computers just doing whatever or when we have a breakout of ai like we're supposedly supposed to fear right now hacking everything and jamie diamond comes out this week and says watch out right like it's it's hacking stuff it's going after jp morgan chase before it comes after your one and a half trillion dollars worth your little sliver that thing right now again not saying it's a risk it's just a broad-based risk the bigger risk i do think is twofold one um a number that i'm aware of is uh there's a phenomenal solution out there called blockware solutions and essentially they allow you to buy a mining machine and it's a marketplace you can sell it you can get the tax right off you can immediately start it's already plugged in it's hosted and you're paying seven cents a kilowatt hour and that's where they make their money and you're immediately in the game and right now even at today's prices a machine uh that you could buy today for as little as a couple thousand bucks is throwing off a 24 apr right so it's great how much
Speaker 2are they paying you to say that for fuck's sake none none
Speaker 1i'm just saying here's
Speaker 2the risk that was like the great like you sound as if you're sponsored by
Speaker 1them no i'm not i'm not full disclosure not i'm glad we made that that clear no i'm not so here's so that's what's interesting about it here's what's risky here's what's risky here's what's risky about it though so all that aside here's what's risky about it they control 31 because big miners like publicly traded miners use them because there's efficiency they have 31 or 32 percent of the hash rate flowing through their layer so why does that matter because even though technically the network is decentralized they are a layer of of hash rate where they're they're mining pool basically right so as a pool even though they have core and they have all these other riot all these publicly traded companies that are decentralized actors that own all the hardware they are a mining pool layer and that represents 32 of the network's hash rate well if that gets over 51 there's no decentralization so even though the programmatic design of it is decentralized there's layers of application on top of it doing certain things it's not decentralized it's decentralized it's not decentralized there's layers of application on top of it doing certain things that could become compromised and to your point that could be a benefit for forcing change it also becomes a risk to the very stability of the network and so you have these trade-offs and again i'm not pro or i'm not telling you to buy stuff i'm certainly not promoting a a company i am just saying these things are out there and they are risks worth considering at the end of the day though if you're putting a million dollars down and the bet is it goes to zero or it doesn't stay here there's a lot more upside there than there is in another asset class if you have a million dollars to speculate yeah i
Speaker 2mean the i i think the i don't know but my instinct tells me that the bear market is over in bitcoin i'd want to want it and probably i'd want to own i probably want to own one of those ones that are closest to the um the proof of concept via the agenda treasuries and stuff go with staples
Speaker 1because that's more interesting right is there's a lot of hype around that is it somehow going to offset or create enough of a new market for u.s treasuries to impact the bond markets and i don't think you agree with that and no i do agree
Speaker 2i think it will no i'm sure you do think it will okay you do it's it's fundamental to my call that bitcoin has to and indeed probably will trade not 80 000 but 1 million um it only gets there um with the stable coin and the and the the sovereign endorsement so we have the sovereign endorsement and we have the falling volatility and we have a price footprint technically which looks like a a bottom um and then we have again just you know whatever you know my whimsy that those who know it best love at least so i think we've done it and i wanted lastly there was something i'm going to put out of paper um and just briefly um two things um so let let me say i never say like this uh by the way i love
Speaker 1that you you i love that you just called out like are you promoting them because i i just i love how fucking on the fly you are there's no there's no hiding with you and you're and you're not hiding from anybody which is wonderful appreciate it
Speaker 2no flies on me baby the um um so the the thing which sounds very promotional is you know i think since 1949 um buying the equity market now like going into the midterm in 11 in 12 days um and holding it for a year you have never since 1949 you've never fucking lost money really yeah and that is 100 100 even so even in the current
Speaker 1dynamics even when we're at the all-time highs we are that that seems to hold hey listen it might be the one year
Speaker 2it might be the one the right okay to the room we never know but
Speaker 1so the the the 49 till present day so what the hell is that that's 70 some odd years right so that's 77 some odd years so in 77 years on a two-year clip because that's when midterms happen you're saying that if you buy before the election day wherever the money is going to go and if you buy before the election day wherever the money is going to go
Speaker 2you're going to have to hold it for 10 years of financial markets yeah interesting and so what happened so let's let's let's hit the the heat map 1974 it was up um the tech the tech bubble march 2000 midterm was uh 2022 you made money um the great financial crisis or 708 the midterm was you made a lot of money um covid midterm was 2022 we had inflation surging blah blah blah you made money okay so what's happening is there's typically been a purge and and so why it may be dangerous this time is that there's typically been a purge you know that kind of down 20 you kind of want to lean in and buy it yeah there's been a purge and the midterm has just had beautiful fucking timing
Speaker 1uh so i think i think let me push i don't want this isn't really pushing back this is pushing for clarity it's not pushing back um i get to talk to a lot of smart people they don't all agree but one of the things that i also think is inevitable because i just haven't been able to work out in a simple equation how it doesn't continue is the money supply grows and if the money supply grows therefore asset production is not going to continue prices will see inflation now whether we can figure out how to normalize other prices and other inflationary things that's a different conversation but the money supply grows and technically the thing you're buying with that money supply has to go up in value and if that's the case um then every time there's any kind of pullback you should be betting on these inevitable themes whether they be tech whether they be crypto like in other words you should be buying in to that weakness whether it's an ai bubble that burns whether it's whatever because it's not going to disappear um do you agree with that do you think it's more nuanced than that are etfs the best way because you're just going to let some other smart cio guy like you said who's part of your bat line group uh to make the right decision manage it for you is that is that not just apathy is that just the smartest way to play it because contrarian is just a way to get slaughtered quickly with not enough you know not enough money to be able to make a profit or not enough to piss in the tall weeds with the big dogs type of thing like where do you land on that what does a
Speaker 2normal person do okay um so i agree i you know it's like hold hold the s&p for 50 years never been a period where you haven't lost we haven't made money okay i i agree with that but it requires caveat um and it's not disingenuous or it's not making the facts up to say that the best minds looking at that same data will tell you that you're there's a very high probability that your 10-year return if you put all of your nest egg into the s&p today in 10 years time your return will be zero now i'm not saying you're gonna look i'm saying like i mean and and probably within that you'll have had a drawdown of 50 at some point but you never sold you held on and your compound growth rate will be zero for 10 years so that's not 50 it's 10 years um but you know that has to be there are not many humans on the planet that are willing to take a zero percent return with a 50 drawdown over 10 years and so it doesn't sound very the 50 years sounds appealing but 50 years i'll be 107 right doesn't help you and now i'm getting younger every day and we're making advances in longevity so who knows but it doesn't interest me right and so that's why and indeed that's why the kids is why the the brightest young minds want to be in finance is why they want to be in ai and it's why um before ai they were all over um bitcoin and i think they'll come back to bitcoin because you you the s&p is not the answer if you are 30 years old today okay what is the answer um you're gonna have to take more risk now this is where i get into a word solid or whatever but um i look at again i try and keep it simple and i talk about the permanent portfolio portfolio and you've got four quadrants you've got um the S and P but why not um you've got um uh treasure duration Treasuries mature Treasuries you've got alternatives so Bitcoin gold silver et al commercial property and then you've got cash and you have to be willing to commit and allocate when there's been a bear market a sizable bear market and we've had a bear market in the 10-year Treasury which is now the greatest bear market in terms of peak to trough ever okay we're down about all that you've
Speaker 1called it a silent depression if I remember right at some point in the last couple years no I
Speaker 2borrowed that I borrowed that that was uh the wonderful um chap who used to who who launched the Eurodollar University with Jeff oh
Speaker 1yeah yeah yeah right
Speaker 2yeah Camille Camille wonderful guy um the and so and it it it's very striking in my mind because you know I prospered in 2008 and peak to trough the S and P I think lost 56 of its value and it troughed in March of 2009 and March of 2009 I was on a train a slow train in the interior of China uh I I alighted at Wuhan before the same you know the fearsome uh the market that we know of today um and I should have had all of my funds assets in the S and P it fallen 56 and I didn't and I I'm where I am today and I've made peace with myself for that but I did it registered and I said I've got four quadrants and I don't believe in mean reversion for stocks there's too much idiosyncratic risk but for the tempo for the the columns that support the temple of the globe 10-year treasury S and P Bitcoin gold silver et al and dollar cash you have to buy um the the asset which has had the which is like two three standard deviations below now now that's hard because one of the other disciplines why do I own a house which I wouldn't sell for 60 million because I'm a smart guy and um you don't buy you you buy when it's going up and the treasuries like and so I get slaughtered every day on you know on on Zoolander on on on eeks uh because three years ago I brought this fact up um we've slid the markets continues to slide but the momentum of the sell-off is it you know it really can't go anywhere you know even with the the hula about uh inflation core thinks 2.4 yeah and the inflation expectations have not fundamentally changed the risk premium as people look at the world has changed the world is deemed to be riskier um and so I'm saying to you that so those kids kind of have to look there and as soon as we start getting some price momentum you've got to come in and you know what fall was always low there you could buy like two year forward at the money and then you could maybe try and harvest some cash and make it less costly by selling every month like you out of the money tails on it I don't know but you know keep your mind but really you want to be allocating now the kids of course uh are not going to do that um they should be buying Bitcoin today okay um because Bitcoin could be a million bucks and and your 10-year return from the could be zero I can marry those two I can imagine those two together oh yeah
Speaker 1because when you say when you say the 10-year return could be zero you're you're saying there's going to be some kind of reversion whatever that is then you have to earn back what you had plus what you know and then when you normalize that out the IRR is zero yeah um even if even if in year 10 you're up 22 percent the normalization like you're basically where you started but you went through this roller coaster ride and if you didn't enjoy the ride which most people would not um and you held then you basically are poor because even if inflation core stays at two and a half you compound that for 10 years your zero return means
Speaker 2you know the zero is a real return
Speaker 1oh that's no okay that's real okay so you should have just been in cash
Speaker 2and just or whatever right like maybe in you know 13 you've got another like 30 years to hold on you know well so you just wrote a piece
Speaker 1that I wanted to pick real quick or at least draw attention to because it's it's I don't want to say it's contrarian it's just a lot of people talk about Arisa act and these forced withdrawals I I saw it on acidcapitalist.com which I outside of subscribing to you here guys if you haven't already clicked the button to subscribe to Hugh right in the player do it um upgrade you'll get more than your value out of it obviously if you've listened this long or even for 10 minutes I think you need to to discover him if you're not already part of his tribe um but acidcapitalist.com a lot of new upgrades there I hadn't recognized it and so I'm going to spend some more time there but there was a piece on there that you talked about how the lie around boomers tanking the SMP like their their mitigated withdrawals a lot of people have said oh when they have to start withdrawing there's not a buyer on the other side in the younger generation to offset it and so the that that's not going to happen I didn't get a chance to read it yet highlight it for us so that people can go check it out
Speaker 2but I can't I can't think of what you mixed me up with someone else I don't know let me try and answer that um no it's on your site I think I'm almost certain it's on your site
Speaker 1I could be wrong I didn't even know I had an I actually your grokbot's working without you but
Speaker 2you know hold on a second so there's a filthy European Eastern European selling an asset that's me that is an imposter that's not me wait a minute acid capitalist I don't have an acid capitalist
Speaker 1domain that is oh that is not me oh you need to get your cease and desist letters out my friend um okay well then do remove that plug you can subscribe to over here like
Speaker 2people should know I mean what the is the most boring is written by a idiot who's like a criminal um you know I'm like uh I've heard of it but I don't know what yeah Chrome Hearts makes like like these rings these aren't Chrome Hearts because oh if these were Chrome Hearts they would be like a hundred thousand dollars and and I know the the owner and I remember meeting him the first time I was like man I gotta Richard I gotta tell you something like you've got a lot of imposters right and they've got websites and Chrome Hearts and this and he's laughing as though I hear you I used to go to my lawyer and and eventually my lawyer is a smart guy sat me down it's like listen I'm happy to spend all of your money but it's actually a good thing that you've got you know replicants and it's pretty obvious it's not you like the people the people your market is selling you know this ring for 10 grand right and they ain't selling that ring they're selling a cheap knock-off but what it does require of course the level of intelligence but there you go that motherfucker
Speaker 1well I'm glad I'm glad you brought that up because like I said to you in the green room right when we were getting on I was like wow you've done a lot of things to the site I don't remember seeing before because I didn't I didn't know there was a fake so I didn't really review it I pulled it up as we were going because I wanted to know what to plug at the end here for for all the people to thank you with the time you've given them and I'm glad you just brought that out so we are not going to that we're going to hughhendry.com I just put it in the chat it'll be in the show notes we will put a special thing in there that says
Speaker 2there's an employees if you are following them please unfollow them not conflate the two this is not the finger
Speaker 1yeah yeah and he's also I know guys that have been at your camp like um Brent and uh George Gammon I think was there and he's got he's definitely like faking everybody out because he's got George Gammon on there and so uh again um in the world of deep fakes there's only one Hugh Hendry you've spent two and a half hours almost listening to him with me hughhendry.com is the real guy that's his site anything that you want to link to out of there including his sub stack is available um that's where you should go any other acid capitalist is a fake so yeah we just clarified that all right so forget that last piece because
Speaker 2we're let me give you the the acid cap the true acid capitalist uh response um you got to be buying or you got to be thinking about buying I'm going to say a name but you buy whatever but Oracle you got to be buying so and it kind of leads into what I said about the the midterm let's say the midterm you know that that rule from 1940 the rule of 49 is going to stay intact and a year later we're going to be looking we've bought the S&P and we're up I would say to you rather than buy the S&P uh I would buy I'd buy Oracle and I'd buy core weave I would buy anything that has a CDS uh credit spread of a thousand Etc um I would buy them um and so I've got the ah the the silly jazzy story of the the midterms and and the 70-year data set um i've also got the experience i mean and it is experience having lived through 1997 1998 participated with risk-taking 98 1999 2000 and then 2006 7 8 um having lived through 2020 i don't get um it takes a lot for me to to shout something being a bubble and wanting wanting to sell when people shout bubble my first reaction is i want to get involved you make you make the most amount of money in bubbles um and and what we know from bubbles is you're climbing what do i call it i call it the bucking bucking bronco forgive me if i if i start saying bad language bucking bronco yeah the the thing you're saying is trying to is trying to get you off right that's what a bubble is trying to do and so it has profound downtrend uh profound uh reversals drawdowns right and we are we're redolent we have a lot really we've got the s&p and stuff at all-time highs but those stocks are on their ass and i would buy them i mean i was watching i love that i mean like everyone else the the the the biggest podcast in the world um whatever it's called um with chamath and all all those guys yeah yeah all in let's go all in so chamath was saying the smartest people in the world trade the cds and that was his pitch and then if he was going to take the cds price is the signal and not the noise smartest people in the world um no it's not um so i i i raised a hundred million dollars of equity capital or fund capital i think in 2011 or 12 and i geared it up to a hundred million dollars to about my notional my god i had about 15 billion notional on on the equity uh and i was buying cds i was buying it in japan and i was buying it on steel companies i bought cds on posco the south korean company um etta etta um and i thought the slowdown that we're seeing in china would would be 12 years ago turned out i was 12 years early which is a great omission um but the fund i operated it for two years i didn't take a management fee it was all um if you you you get rewarded on on your kill if you will and basically yeah and and and when there were big risk reversals in the market in the global markets you made money and the clients were happy with that you made a lot of money when that happened but you know point to point we were down 30 percent and and i so i gave they gave me 100 and i gave them 70 that was my deal right um the kyle basses of this world will run it to zero and that's you know that's a different different issue um cds is the worst fucking market imaginable right and so let me try and explain it so and you probably you will have a taste of this i think you'll understand if i say to you what is the largest natural gas etf on the market i don't know if you if you're how familiar you are with natural gas but i know enough to be
Speaker 1dangerous sir so i couldn't name it top of my head i probably will go oh yeah when you say it but i
Speaker 2can't think okay i i don't know that i don't know the name of it but what has been the worst investment in the history of mankind uh owning natural gas etf and and why because of the i think it's contango like uh you have to roll and and you're rolling quarterly and it's negative carry and it's steeply negative carry um so in absolute terms it looks cheap it's a bit like vol vol is only 10 but no one's going to sell you vol at 10 they're going to sell you vol at 13 in a month's time and if it stays at 10 you lose 30 okay um that and so being long commodity futures in contango if i'm getting the the correct terminology correct um is the worst trade possible and that's cds right now cds um it prints the five year you got to own the five year okay that's the on on the run money and hold it for a month and you don't own the five year you own the four years and 11 months and the liquidity is different from that uh and so what you find if you're running a hedge fund is you got to keep rolling so that you maintain the five year why because that's where the liquidity is right you want to get out of the position don't fucking phone me up and say you've got three years and fucking nine months like because my price for you is oh i dropped the soap could you pick the fucking soap up forget it so when you see these explosive moves in oracle credit spreads but mostly the real explosive would be core weave and stuff um the actual return was the realized return on that was it was okay but for the risk you're taking you're going to have to take a look at the stock market you're taking them for the lack of liquidity absolutely it's not geniuses who are in that market you should not be in that market however so there you go so but shamath is saying that and the front page of the wall street journal and the front page of the financial times is telling you oh cds that's the last call that's the last call not to sell that's the last call to buy okay so midterms drawdowns i prefer the drawdowns stocks than the s&p here and there will be a profound re-reckoning at some point i don't think it's in the next 12 months and so if i'm a kid and i can't and i'm not attracted to the notion of earning nothing on the s&p for 10
Speaker 1years that's where i'm going to be final final thought with all the pattern recognition you have and with all the uniqueness of it and the teased out nuance that you then articulate in you know layman's terms at the end what is it that has you confused because i think a lot of what you have you're pretty clear on and you've teased it out and you've done the math and you can stand on it in your own mind and you have the pattern recognition to to feel good about it and others that want to borrow that pattern recognition can choose how to apply your judgment but where are you perplexed where do you go i just don't see where this goes is there any place is there an asset class that perplexes you is there a human behavior that perplexes you that violates pattern recognition or that
Speaker 2confuses you absolutely um so investing for me and again i should be transparent um i do not trade daily monthly or yearly i do not have an investment portfolio that will come as a great shock to people um i have a 40 million dollar property in saint bart's um i've got 7 million of debt 6.9 and the bank which is really the postal bank of uh of france and insists that i hold 1.4 million so where i told you we started and i was going through a cash crisis and i i missed payment on the mortgage i said i wasn't really taking it seriously i was like dude draw it down from the 1.4 million which is your surety and why do why are you holding 1.4 away from me when the property's 40 million it would have to fall 80 before it even got anywhere near your loan right so go yourself and right yeah that didn't work that didn't work
Speaker 1but i guess i don't i don't say this with any in transparency i can relate i understand the argument you are making i've made it myself i've made it myself i've made it myself i've made it myself more times than not uh i'm not recommending other people try and make it but i get it i i i would have probably
Speaker 2said the same thing yeah um so so i trade something else i trade my reputation and my reputation is considerable and um and i've got to be very robust i mean and again we like you said earlier we you you you said very very nice things you said i'd been perhaps more than the caricature um but the things that people say in social media oh my god are like they forget that we are human beings um now i i suffer from that as well i was in i was in an open discourse with i can't recall her surname maybe turner kathleen turner i'm making that name up um and and she kept hooking on to what i was writing and um and she was really talking a lot of nonsense but she had a lot of fun and she was really talking a lot of nonsense but she had a lot of followers and so i had to look at the um the bio and it says former central banker what and she says to me like one of her tweets was why would anyone not want to be invested in the stock market of an economy like china which grows at five percent per annum um and okay like maybe in first blush that sounds really relevant but if you're a central banker what the where the have you been that's the most damn stupid thing you could possibly ever say because gdp has no divisor it's an app it's an accumulation of the spending in any one year and if you don't have the discipline to spend money on the basis of creating wealth you can print whatever fucking GDP you will but you'll destroy wealth and shorthand for that is look at the fucking stock market because that's the barometer not of how well the ordinary people are feeling but of the wealth right and when you look at the fucking broadest most representative Chinese stock indices they're below the 2007 level right no wealth creation but 5% GDP a central banker wrote that so I mean I get inflamed but I don't call her a cunt I don't call her I don't like use any masochistic negative female language around she's a human being but she had to be you know she's out there with front and she's probably got a little social media business and she's mis-educating my fucking tribe so I'm going to take her down right anyway what most confuses me let's end on a bit of humour ladies ladies confuse me I I you see I married my I married my first girlfriend I met her at university we didn't marry until I was 30 but we married when I was we met when I was 17 um and we divorced three years ago we'd known each other for 35 years um and I mean I don't understand her like she has a lot of anger directed me and that's you know whatever you know she's entitled to to be who she wants to be um I'm now however so I miss that whole I guess I miss the secondary market of trading relationships in my 20s I have no experience of it I literally um dating or trying to date girls with the mindset of a 17 year old in in this packaging and it confuses a lot of people
Speaker 1um well and I think and again to be fair and I am not I I am I would not be anywhere near nor do I want to be uh an expert in the dating world today because it's fundamentally different than 20 30 years ago before we turned uh the the smartphone into a remote control on-demand engine for everything in our life I don't understand how um humans have healthy relationships in a world with uh devices um because it's hard enough uh as someone who has learned about himself you have I have anyone who who's willing to share the way you have openly has done some work on themselves and can own their stuff like you said you know I'm Chris and I'm a whatever right and yeah I I think it's just a struggle I think I think more people are confused by that uh than they'd like to admit and I think it starts with knowing oneself I I you know why I put protect your net worth and your net happiness is is you know because the net happiness is the actual thing that's most interesting to me right now and I think you know I I'd go out there without knowing you more than the wonderful chat we've had today I think there's a part of you that your net happiness is is is is higher and there might be areas where it's not but you know nobody does what you did which was be at the pinnacle of financial management asset management and then go to an island and buy a hotel and and be asset rich and and be in the real world with cash flows and things like that um without some level of honoring yourself and maybe what moves you no one goes and thinks about moving to venice beach that doesn't have a dna of someone who's just curious and creative and wants to express and be okay in their own skin and I think those are the basis of a healthy relationship with anybody else is am I healthy and I'm happy in my own skin
Speaker 2with yourself yeah
Speaker 1yeah and then and then and then therefore what I do believe and I do nerd out on this so permit me anyone who's listening to it's like we attract who we are not who we want and um and the minute we can reconcile those two things you know we get better relationships regardless of their age gap or their uh or their no I don't know their normalization so I think if we are working on who we are which is what I'm trying to do um and being healthier and happier in that skin and more accepting of who we aren't without justification and without defensiveness my biggest weakness is uh then you know then we can have healthier relationships and if we're in one then that relationship stays and grows and if we're not in one then maybe we find the one we've always been looking for
Speaker 2yeah well the thing I'm most satisfied with is so I've just it's unlikely now that I'm going to become a billionaire um but I think this is a universal truth because I I get a lot of correspondence from people I got one the other night someone who moves in those circles and it won't come as a surprise to you they're miserable as fuck they're not happy yeah and so I think we need a different uh unit uh for for being a billionaire and if you measure on happiness I think I'm I think I'm as rich as fucking Elon my life is so fucking beautiful
Speaker 1yeah I and I and I and again I am biased I I am not trying to put a limiter on me certainly wouldn't want to put if hey if you could be net happy like you are right now with a billion dollars I'd be the first guy to say go for it he'll go get it what I do know is money isn't everything unless two things happen you don't have any because when you don't have enough cash to put gas in your tank or pay whatever or you're worried about losing the assets you've taken forever to accumulate that makes you constrain that puts us in fight or flight no one can function well in fight or flight right we don't create there we don't do anything we survive there so if we stay there too long then it's very toxic the cortisol rises and it's impossible to be healthy or happy so money isn't everything unless you don't have any or unless you have too much and don't know what to do with it then money creates problems there is a sweet spot and everybody's sweet spot might be different because a life without compromise or minimal compromise means something different to each person and that's okay so I don't put caps on my own wealth I don't put caps on yours I don't I think everybody should go for as much as they want but at the end of the day net happiness is my metric and it's hard to measure because it's like it is it's what level of joy do you feel how free do you are you hanging out with the people that you're doing are you doing work that means something to you are you contributing in a way that you're not doing it for you you're not without the money feels good, but also do you have enough money where you can keep doing it? Because if you don't, then you're not going to be able to do the thing that makes you happy. And you'll be chasing somebody else's thing and feeling like you sold out. So again, it's a moving target for me. But I do recognize that you are happy. And I think you've made so much money in the past and you've got good assets. And there's a billionaire who's going to want to buy that from you for 60, 70, 80, it doesn't matter. So, you know, you have an exit. And the key is, can you stay happy? And can you attract someone else who's grown up?
Speaker 2So here's the question. Should I, and you know, and we must wrap, but, and wow, I've got to show you the view actually, but the, I may be, I may not be, but to your point, some billionaire approaches me. It's quite Faustian in that. Imagine I'm offered 65 million fiat dollars. We know for sure it's not going to make me happier. So why do I do it?
Speaker 1I don't, and I don't know the answer to that. Well, I I'll role play with you and maybe, maybe it's something that hits when you're sleeping later. Why would you do it? Because at heart, we're all making trades every single day. We're making trades, whether we're a trader or not, whether we ever thought of ourselves that way, we trade joy in the moment or dopamine in the moment for some sacrifice in the moment that we have outweighed. Right? So in other words, what happens? Okay. You got 65 million fiat dollars. You pay the taxes, your net up 40 something, right? You're, you got zero debt, but guess what? Unless you rent it back, you got nowhere to live. So now you gotta go find a place to live. Maybe that's an opportunity. Maybe I buy a Venice thing. Maybe I buy a second place on Barts and I trade time and I still got 30 million and now I can go play in the market and playing in the market makes me happy. Putting conviction behind my ideas makes me happy. Okay. Well then, then that would be a good trade. If putting behind my convictions is boring because I spent 30 years doing it. And at this point I just want to be happy and live and go to the coffee shop and be in St. Barts and do videos and inspire young people and inspire middle-aged people. Well then no, it ain't gonna make you happier. So keep the fucking place and turn the influencer business into a couple of million bucks a year. So you don't have to ever worry about the cashflow. And then when the guy comes, tell him, fuck you, I'm not selling. There's not enough money in the world for me to sell this place because it's my home. I'm going to go buy Venice, right? In other words, who knows, but the trade is always there. Everyone looks at the outcome and goes, Oh my God, if I could be in your shoes or if I could be in Q's shoes, or if I could do that, I'd be X happier, whatever. No, you wouldn't because you don't know what we traded to be here. And some of the things we traded to be here. I know some of the things I traded to be here. I wouldn't do different in the history. Like in other words, I don't regret my life. I don't want your life. I don't want anybody else's life, but I wouldn't do it the same moving forward. If I got that same set, of variables today, hopefully I'm wiser. Hopefully I would choose a little bit more conservative in certain things. Hopefully I'd still have the nuts to go for the thing that I'm scared to do. Like, hopefully, i'd have that that nuance and that wisdom but my priorities are different so you can't rewrite it you the script forward is unnew and net happiness is the barometer and and you know i got kids you got kids it's like they're at different ages i just want them to learn something from me that they can use to have happiness in their life that's all i want but you know again take the trade it'll feel right you'll know but it's all a bit again so we
Speaker 2can make it a redolent of like people are here to make money but um the most convincing argument for why i i would entertain the faustian bargain is that the probability so again i said things earlier and talk is cheap but we can qualify it further the probability that i associate with bitcoin trading is that the probability that bitcoin is worth ten times greater than its present spot price is such that the i the intellectual intellectual satisfaction of taking at least somewhere between five and ten million and actually investing it so selling the house and as you say net net paying off debt and taxes say 40 and put in let's say i don't know if i don't i don't think i could put ten but i could put five i could put five in and and it goes so five becomes five and ten times
Speaker 150 and yeah five becomes 50 over the next 10 years and you know what and 50 goes on top of the 40.
Speaker 2and i'm just kind of it's just a game but it's kind of fun
Speaker 1game well and and and so to the point if i was to say yeah then you should do it right but i'm i'm just playing back and forth i'm signing board here's the point is like you just came alive a little bit there just like i do the thing that the thing that for me it's about now is i'm tired of being right without something on the table like i've been right a lot of times i've been wrong
Speaker 2don't obviously uh chris i have to stop you you ain't never fucking right until it's on your pnl that
Speaker 1and that's the point is that it's not real if you didn't have your ticket punched and and so the the thing i think that frustrates people in our bracket where we've been at a thing 27 30 years is we can we can sound convicted and you just said it is cheap and the only way we make talk not cheap is put freaking scratch on the table and there's a fulfillment in that and it's not the like gambler high because i don't consider myself to be a gambler it's the fact
Speaker 2i've been in a casino never been in it i hate
Speaker 1him i'm not that guy i hate polymark i think all that stuff is stupid i i don't need it i don't hate it i don't
Speaker 2hate it but it just doesn't light up any cells in my yeah maybe that's that's
Speaker 1what i'm getting out of my own vernacular i'm saying like it doesn't do anything for me like it actually doesn't it does i need to feel like i built something or like i yeah there's like a satisfaction you said it intellectual there's an intellectual satisfaction now maybe if i was like a real nerd about you know a player's weight and stats and whatever and i could intellectualize it then i'd care about sports betting or something right because i'd feel like i somehow intellectually outwitted somebody including myself but with markets or with entrepreneurship that's how i i orient i go was i right did i did i see the tea leaves right did i connect all the dots did i place money on the thing and was it right there's satisfaction in that there's a creative energy in that and then therefore there's a happiness because there's meaning what we're all looking for is meaning so if you go 40 million in and you can't find more meaning okay but if you place a bet on bitcoin everybody thinks bitcoin's stupid but you have a reason and you get meaning from being right and it shows up on your pnl fuck you're happier and you're 50 million dollars richer so win-win i mean that's the trade that we're making is meaning
Speaker 2i think the best thing from all of that is again one thing to see i think it's going to a million bucks and then it's like then we take through well how would i would have to raise capital so i'd have to realize my principal asset then and it's revealing how much would i put in and i said i couldn't put 10 but i could do five and and suddenly i think that puts like it it puts more gravitas if you will to to the call on bitcoin i hope it does i don't know um you know i don't know you know yeah yeah the you know this will go out maybe i'll put this out on youtube or something you know and every call not every comment every third comment will be the guy's wasted you know fake fake bono and again it's fine because i come back to the um what's his face the the ginger guy um on cnbc you know kramer yeah yeah kramer like you won't make money with if you can't take the brick but so bring it on listen there's never
Speaker 1been a president there's never been a president no matter who it was other than maybe reagan in his first term but there's never been a president or i think it was a second term that left the office with like better than a 40 something percent which means six out of ten people hated their guts right and some have done and yet you're rolling the largest economy the largest hegemony in the world you're the most powerful person on the planet if you sit in that seat regardless of whether you belong there or not and same thing you don't make 30 million from cnbc uh with just fans the haters the haters are what create the the reason to watch yeah and and again i i'm sensitive to that too and part of it is i i don't like the celebrity side of it i don't like that i'm here to serve and i'm here to scratch my own creative itch and i'm here to be curious with rad dudes like you and and and to challenge my assumptions and have conversations that no one gets to have and just fucking try and think and so if people want to watch that and hate it fine great then
Speaker 2we'll make more money actually good thank you because you just opened up a little a little uh box in my head actually because back on my analogy with sport that the joy of going to the stadium and consuming live sport is to hate on the other side it's actually we need it we need it so i have to welcome it i do welcome it but i wanted this is the first time and and thank you for offering the the your platform and you and the generosity um to keep coming back to get me on thank you for that no it's just it's been my pleasure again i i wanted to be i wanted to reveal if you will less of the show business in in this format because you know the people on substar are you know are the people right and so i felt it was kind of necessary to say alter ego person let's have a candid and transparent conversation and i think you've helped me achieve
Speaker 1that so thank you oh and the the point of the atomic level is that right it's to really get down into the dna of the mind of the of the advice of the person because you have brilliant stuff you're writing prolifically everybody can and should go get it pay for it whatever is right for them um but who they're getting it from is is the piece that is is vacant and and i think that's the piece that builds us back as a community we all trade differently we all think differently we have different priorities but at the end of the day we're all trying to get the same place we want stability for our family we want upside we want meaning we want happiness we want stability we want wealthiness and we want to be wealthier because it's better than being poor and i just want to get laid and and there's that too so you know at the end of the day um i appreciate it and and uh and that's why i do these and you you played into it perfectly without any pretext i didn't tell you that's what we're gonna do you didn't tell me we just landed there and so i'm glad i could scratch that it's for you i think you deserve it i think i think your fan base that already loves you has more reasons to love you now which is my goal with these and for those who didn't know you now they don't have to like now they don't now they can see who the man is and then ex and then experience the persona for what it's supposed to be which is serious financial wisdom and pattern recognition packaged up in an entertaining way but from a real dude who's fighting alongside them with his own portfolio and his own wealth and and i i think it's been a tremendous unique episode in that way i want to thank everybody for tuning in hugh i want to thank you i can't wait to do it again whenever that time is i really appreciate you man it's
Speaker 2awesome well you you warned that you gave me the wings where like one hour to three hours and i was like oh that means we're going to do three hours and we have hey i i
Speaker 1i'll take it you know what the the answer engines are going to love this one because they're going to they're going to latch on to a bunch of cool things and you know and uh it'll help with the aeo yes which engines the answer engines like perplexity and gemini and all the ai ones right the aeo the everyone you know talks about seo but the aeo optimization will be great because these transcripts these transcripts now have three hours worth of words in them and sourced evidence and sub stacks and everything so there's a strategy to the long form too i like it i like it all right thank you very much all the best thanks everybody for tuning in we appreciate you subscribe heart restack do the things that tell the algo that uh yeah i remember
Speaker 2that assetcaptains.com imposters yeah that's
Speaker 1an imposter hugh hendry.com h-u-g-h-h-e-n-d-r-y.com the one and only place you need to go to get into hugh's world and uh follow him on sub stack keep him keep him here he wants to be here this is where the money is this is where you are this is where he wants to be so help him out get him off instagram uh with with some with 20 more of his time and on here let's go i just want to thank you for being here thank you for being here thank you
Speaker 2what lastly if anyone in the audience forgive me but if anyone has friend that works at raya raya r-a-y-a i'm begging you i'm begging you i'm stuck on the outside i gotta get it's a dating app um oh gosh my buddy in la just got on it he's got it's meant to be if you've got social presence i've got fucking social presence but i'm in the caribbean and he is dating the hottest like actresses european film producers my ladies but i need please if anyone has uh an intro to raya you would i'm happy but my god i could be even happier the only kind of sign
Speaker 1off you'd expect from the one and only hugh hendry i appreciate you man thanks everybody for tuning in take care you
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