SOMEBODY KNOWS
Hosted by @BitcoinAIGuy · 2026-01-27 · Tags: BTC, IREN
TLDR
The discussion was overwhelmingly bullish on Bitcoin miners and neoclouds that can repurpose scarce power and data-center capacity for AI workloads, with IRN receiving particular attention. Speakers argued that institutional Bitcoin demand, hyperscaler spending, Anthropic’s growth, and constrained power supplies could extend the cycle for years, while acknowledging earnings risk, dilution, macro shocks, and severe drawdowns. They also discussed options strategies for managing or exploiting the sector’s volatility.
- Bitcoin-mining infrastructure can support both mining and AI compute, creating diversified and potentially more predictable revenue.
- Power availability, rather than chips, was described as the primary constraint on near-term AI data-center growth.
- The Bitcoin cycle was characterized as institutionally driven, with limited retail euphoria viewed as paradoxically bullish.
- Participants speculated that miners and neoclouds such as IRN, Cipher, CoreWeave, and Galaxy could benefit from hyperscaler capacity demand.
- Anthropic’s reported $20 billion raise at a $350 billion valuation reinforced confidence in sustained AI infrastructure spending.
- Anthropic’s enterprise-first strategy was viewed as stickier and more financially stable than a consumer-first model.
- Upcoming hyperscaler and semiconductor-equipment earnings were identified as major short-term catalysts and risks.
- Speakers entertained highly optimistic long-term valuations for AI infrastructure companies but expected substantial dilution and financing needs.
- IRN price targets were highly bullish, though participants expected repeated 10% pullbacks and potentially one or more 50% drawdowns.
- Selling puts, covered calls, and volatility strategies were discussed, alongside warnings about leverage and assignment risk.
Speakers
- Jeff — Provided extensive analysis of Bitcoin-miner and AI-compute convergence, power constraints, institutional Bitcoin demand, hyperscaler earnings, Anthropic’s enterprise strategy, neocloud valuations, IRN volatility, options strategies, and the long-term economic impact of AI.
- Speaker 2 — Moderated much of the conversation, highlighted market pumps and AI funding news, advanced bullish IRN and neocloud valuation scenarios, questioned counterparties and financing risks, and later described put-selling and covered-call strategies.
- Speaker 1 — Made only brief fragments and minor interjections without developing a substantive argument.
- Speaker 3 — Appeared only in non-substantive transcript fragments.
- Speaker 4 — Appeared only in non-substantive transcript fragments.
- Speaker 6 — Contributed only brief interjections during the investment and options discussion.
Notable quotes
- “I don't, I don't think there's any negativity at all that that in fact, it's, it's all positive, right?” — Jeff
- “What I'm prone of is to figure out the right balance between these different revenue streams so you can build a real sustainable business that actually generates shareholder returns.” — Jeff
- “There's sort of like a general apathy towards the sector, which I think paradoxically is quite bullish because from a positioning and sentiment standpoint, you love to see Bitcoin doing these very constructive moves higher and consolidating with very little euphoria.” — Jeff
- “I mean, this was like major news, that $20 billion raise at a $350 billion evaluation.” — Speaker 2
- “I think Anthropic starting in the enterprise is going to give them a huge leg up.” — Jeff
- “That's incredibly bullish for, I think, the public.” — Speaker 2
- “This may be a 30 or 50 year cycle.” — Jeff
- “I think AGI is probably coming sooner than people expect.” — Jeff
- “Not financial advice. Don't recommend anybody to do it that way you can lose lots of money.” — Speaker 2
Transcript
Speaker 1: The.
Speaker 2: The.
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Speaker 3: The. The.
Speaker 4: The.
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Speaker 4: The. The.
Jeff: The.
Speaker 6: The. The.
Speaker 2: Yo, nice clothes today. How you doing, Jeff?
Jeff: Doing well. That's why they call me Closenberg.
Speaker 2: Did I? I knew something was suspicious this morning. I could feel it was strangely quiet this morning. It was like a four 5% morning pump and even the bulls were in disbelief. I was like, some things, something's not right here. The group chat was, you know, awfully on edge. People are like, I don't really trust this pump. And then that's when I knew when someone said that, I was like, hey, something big is about to happen. Either we're going to get an announcement or we're going to get a major pump. We didn't.
Jeff: I got a little worried though because we had that little double top and then we spiked down with Bitcoin and then Iron said fuck that shit.
Speaker 2: Yeah, sorry, didn't mean to interrupt them. Just no, no, it's all good. I'm really.
Jeff: Excited.
Speaker 2: I'm excited too. Bitcoins perking up. I don't want to we have Chad as a as a speaker. I don't want to keep him waiting too much. He was he really wanted to share his thoughts on on Bitcoin mining in particular. So let Chime, let Chad chime in. Chad, what are your thoughts on Bitcoin mining?
Jeff: Look, core, core scientific open Pandora's box and showed people like what you can do in this sector. And so it triggered like a radical rethinking of the entire sector in terms of the latent optionality you have in this infrastructure. I think that's all healthy. I don't, I don't think there's any negativity at all that that in fact, it's, it's all positive, right? Because the more, the more that you can prove that there's real value to this infrastructure beyond the economics in that moment of, of mining Bitcoin, the more you can justify more CapEx exposure overall to the space, more, more investment. And it brings in a different group of investors. There's a whole group of investors. And this is what Core Scientific and Terra Wolf and some of these guys are playing to really well, this whole investor demographic that has no interest in Bitcoin, not because they're right necessarily about where Bitcoin's going, but because they just don't understand it. They don't like it. They think it's a commodity business. They think Bitcoin's too volatile, whatever, but they love selling, you know, AI compute, they think it's stickier, right? They they think it's dollar denominated, etcetera. I think in the long run, it's possible Bitcoin mining like over 5 or 10 years like dramatically outstrips AI compute provisioning in terms of its, its actual like net economics. It's possible, right? The jury's still out. We don't know how commoditized AI is going to get and we also don't know how high the Bitcoin price is going to go. But what what is happening the more you splinter the available power. And we're again, if, if we focus on power is the key gating factor, not not chips, because we know you can get more ASICS. We know you can get more GP us right? And and while they're not infinite, there is some like finite limit to it. The, the the power market is like, there's like a physical reality of like how much power you can get online in the short term. And so if you splinter that power from the current crop of Bitcoin miners who have secured a big chunk of that, especially like they punch heavier than their weight, right? Like in terms of their market caps, like $30 billion market cap for the sector, but they control more power than like much bigger industries from from a markup standpoint. And so if you splinter that and you start to devote some of it, which I think is the right strategy, by the way, I don't think you want to be all in AI because I think that's going to go through boom bus bus cycles, right? And then it wouldn't be all in on Bitcoin mining only because then you're totally at the, you know, the hostage of the Bitcoin price. And so I think if you can blend it out, which is what people are doing, then you create more predictability in revenue, you're going to get higher multiples on those talks. So I, I'm not a proponent of going all in either direction. What I'm prone of is to figure out the right balance between these different revenue streams so you can build a real sustainable business that actually generates shareholder returns.
Speaker 2: Chad, I get more bullish every time you you, you say that. Jeff, what are your thoughts?
Jeff: Yeah, I was just going to ask Chad, You know, we had been kind of talking about how we've seen these like little mini super cycles within AI. You know, first it was chips to start running. Now we're seeing memory going crazy. You have any predictions as to what you think the next little super cycle might be? Is it networking? Is it cooling? Like it's going to be one of these little sub sectors within AI? Oh, well, Chad didn't like my question. I think. I think he.
Speaker 2: Left. I think he had to take a call.
Jeff: Got it, Got it. Well, I will postpone my question then for Chad when he gets back.
Speaker 2: I'm sure he'll be back. Jeff, how are you feeling about the market? What do you think causes pump?
Jeff: I think pre earning by the rumor is a big part of it. You got the big hyper scalars reporting this week. Typically AI bulls are going to pump, pump the stocks and the stocks that are affiliated with them. I so I think that's part of it, right? Good earnings will hold it and send it further. Bad earnings are going to obviously crash it. So I think it's more, I think it's kind of a buy the rumor type thing and anticipation of good earnings for these big hyperscalers. The last last quarter, I think what 5 of the let's see here, Google had great earnings. Amazon reported really well. I want to say Microsoft was slightly up. I can't really, I can't remember Meta. Didn't Meta have a bad quarter? Most of them had a pretty good quarter is what I'm saying. Nvidia's had like gone on a run. Palantir continues to run and report, report well. So I think people are trying to get ahead of the curb and are pumping these AI stocks. That's my that's my perspective at least.
Speaker 2: You think it's going to be earnings or you think you think it's going to be deals announced that are going to?
Jeff: Well, I think that too, right? I think they're just trying to get ahead of the curb, right? So I think hyperscalers might cone out some of these deals and given their track record of success over the last couple quarters, I think, yeah, people are trying to get out ahead of it and not trying to buy the news, but by the rumor or by anticipation.
Speaker 2: So who's got earnings next?
Jeff: Well, let's see here tomorrow I it's split down the middle, right, I think. Let me look. I had it up on my phone earlier. Tomorrow is Microsoft, Meta, Tesla, ASML, and then Thursday is Apple, Apple and Friday. No one's reporting Friday, but yeah, those, I mean, so it's tomorrow and and Wednesday or what? Tomorrow and Thursday are the.
Speaker 2: Business Does Amazon have the same earnings date as Iran?
Jeff: I believe that is true. Iran's the 5th now I I can double check.
Speaker 2: Simon's back. I think he wanted to answer your question regarding cycles. Chad, what are your thoughts on cycles?
Jeff: Did you hear the question? I wasn't sure if you caught all of it.
Speaker 2: Go ahead, Simon.
Jeff: Yeah, I mean, absolutely. It's an institutionally driven cycle, not the part of the white. Bitcoin has sucked a lot of the air out of the room in terms of all coins. There's of course been a few small rallies and some meme coin stuff, but this is an institutional driven market. Very few institutions are interested in anything other than Bitcoin when they are. It's been Ethereum maybe a little bit and then maybe a little bit of Solana. And that's sort of it in terms of like large scale demand. And so it's concentrated things a bit. The focus on Bitcoin and the retail has largely been uninterested. Even at 100 Ki think a lot of us thought 100K would be a trigger point for bringing in more retail. But like search traffic hasn't really risen. There's sort of like a general apathy towards the sector, which I think paradoxically is quite bullish because from a positioning and sentiment standpoint, you love to see Bitcoin doing these very constructive moves higher and consolidating with very little euphoria. And so I, I think it's a different cycle. I think it could be elongated. That's kind of in my view for for a couple years now that that people may think the cycle will turn down on the same timeline as previous cycles and it may actually run further out. I think part of that is on the Bitcoin side at least is that Bitcoin is converged with AI at the energy layer such that the people providing the compute for for Bitcoin are also providing compute for AI. And that may stretch out the, from a longevity standpoint the cycle because you still have a ton of CapEx being deployed right now and you have CapEx coming in from third parties. Like we just saw right yesterday with the announcement after hours with, you know, not Stargate, but but South Bank, which is essentially Stargate at this point, you know, buying $50 million of, of cipher and a pipe at whatever it was 480 a share. Like that capital didn't exist at all for the Bitcoin sector last time. And I think that's just the tip of the iceberg, you know, relative to what might be coming over the next 12 months. If that continues and actually grows, then you could actually see Bitcoin, so-called Bitcoin miners running all the way out into 26 or even 27, which will probably stretch out the Bitcoin cycle, right? Because if you have a bunch of so-called Bitcoin miners generating revenue from AI, that's stickier dollar denominated revenue that doesn't fall when Bitcoin falls and it's less sensitive to the just pure commodity price. Also, you have less people selling Bitcoin because everybody's following the MicroStrategy model where you know, they're, they're borrowing, using convertible notes and doing whatever they can to not sell their daily production. A lot of the firm's right. And so I just think, I think people may be surprised, right? Like we may be, we may only be in the 3rd or 4th inning now. And, and if that's the case, then like a lot of the biggest moves and a lot of the like the excitement about the sector is still ahead of us. And I think that's already different from a time perspective. By this point in the last cycle, you knew that you were in a bull market that in fact like the mining bull market was almost over already last cycle. So like we're clearly we're either wrong, all of us about the value of large scale infrastructure, which I'm 99.8% certain is, is an incorrect view, or if we're right, then we're still very early in that up cycle. Chad, did you hear my question about AI and like the mini super cycles? I'm curious to get your prediction right. So like first, like at the very beginning of AI, we saw all the chips run. Right now we're seeing high memory man, or high memory band or high bandwidth memory. Sorry, HBM starting to run like crazy. I'm so I'm noticing like these little pockets are all taking their turns having like their own super cycle essentially. Do you have a prediction as to what you see next? Is it going to be like the equipment makers like ASML, AMAT claw? Do you do you foresee like networking taking it, you know, center stage next? Do you have any predictions for that? Wow, Chad hates me.
Speaker 2: I think he had another call. We have the Capone here. Capone, what are your thoughts? I guess people aren't bullish enough. Jeff I.
Jeff: Was going to say I was. I was enthralled by that. That was exhilarating. I I couldn't believe the alpha he just delivered.
Speaker 2: Dude, I don't think anything is priced in. We're you know we got the $60.00 with IRN with no news. You know, something tells me if we close 69 this week, we could hit triple digits next month February.
Jeff: So your personal opinion, do you think that IRN is going to wait until next week to announce something now?
Speaker 2: It could be and I.
Jeff: Did confirm they are aligned with Amazon as far as.
Speaker 2: Reporting it could be they could announce something this week, right. But on no news we we know we're seeing some huge pumps tomorrow could be very volatile, but I mean this week could be very volatile regardless. But I I think there could be announcement this week.
Jeff: I yeah, I hope so. I mean, Iran's kind of been on like a little bit of a Pogo stick the last week. I mean, it's just been very violent moves up and down. I would love just like kind of like AI mean I would love a violent move up. Don't get me wrong, that'd be my first choice, but I would, I would almost like appreciate just kind of like a, a slow melt up right now until earnings, you know, a little bit of stability instead of like 12% swings each way, unless it's just going to swing 12% up each day. That's fine too. But a slow melt up now would I think would be really, really nice and encouraging, show some stability, show that we can hold these, these prices. I mean, even in after hours, right? We're down like $0.40 almost. So, yeah, I mean that's that would be great news. I think obviously tomorrow is going to be big with the hyperscalers that are reporting if they miss earnings. I think that has a potential obviously to to send us down quite a bit and quite hard. I mean Microsoft, yeah, Microsoft Meta I think don't sleep on a SMLI think that's going to be a big teller, right. They're reporting pre market tomorrow, a good quarter for ASML almost. I mean you can't, ASML can't really have a good quarter without chip makers, right. So if they're having a good quarter, that means more chips are being made. That's very, very bullish for AI. So I think that's going to be a big indicator of what we're going to see.
Speaker 2: Dude, the anthropic news was major today. I think that was part of the reason for the bump.
Jeff: I didn't actually hear you want to fill me in on that.
Speaker 2: Are you serious?
Jeff: Are you talking about like them buying Amazon, buying the capacity? Is that what you're referring to?
Speaker 2: The the raise, the recent raise today.
Jeff: What did they get? No, I didn't see it. I've been a little bit off the grid today.
Speaker 2: Yeah. I mean, this was like major news, that $20 billion raise at a $350 billion evaluation.
Jeff: Oh wow, that's very impressive. Yeah, no, sorry, I've been off the grid today. I honestly didn't even open up my phone or my computer until 1:00. I was doing stuff with the dogs. I it was just one of those days. I was running a bunch of different errands and stuff. When you when we said or when you told me that we weren't going to be host hosting a spaces earlier today. I kind of took that time and did grown up.
Speaker 2: Well, yeah, nothing happened right until the Bulls.
Jeff: No, no, I wasn't, I wasn't saying that. I was just saying like I, I, I needed a day to like actually like be an adult. Like I had to go to the drugstore, I had to go grocery shop, like bullshit stuff, So not fun stuff. And then I was able to just sit and watch and rub one out to the price, price action of iron.
Speaker 2: Well, I'm glad you got a chance to go to the drugstore and fill up your ADHD medication because you're going to need it. I think February is going to be an exciting month. Yeah, I think this is, You know, all the stars are aligning. Anthropic essentially said investor demand is also insatiable, right? I mean they're easily raising 10s of billions for just the build out right? So.
Jeff: I'm more personally, I'm more bullish on Anthropic than I am on open AI. I'd like their their go to market strategy better targeting institutions. I've made the comment before, but like if you look at traditionally, if you look at like how enterprise solutions or let me rephrase this. So start with Dropbox, right? So Dropbox like hit the scene amazing everyone started using it. Great B to C product, they then try to pivot, they try to target enterprises and they failed massively at going from a consumer based product to an enterprise adopted solution. I think Anthropic starting in the enterprise is going to give them a huge leg up. I think it's much easier to create a, a consumer based product that started in enterprise than the other way around, which Open AI is doing and starting at the consumer level and then eventually we'll, they're doing it now, but it's not like a massive focus for them is, is going after the enterprise. I think once you start the enterprise and you gain validation from them, it's much easier to go back down to the consumer level than go from the consumer level to the enterprise level. And Anthropic is getting a ton of traction with enterprises. So I love that business model. And additionally, I think something else that's overlooked is these enterprises are willing to pay them, you know, multi year contracts for their solution provides them a little bit more stability with from a revenue perspective than hoping that consumers are, you know, going to pay on a monthly basis or yearly basis that, you know, people's credit cards don't Max out. Like you have a lot more stability from a revenue perspective. I think, and that's why I'm I'm really, really, really bullish on Anthropic. I love open AI. I think it's a great product. I don't think they're going to have any trouble making it. I just personally like the go to market strategy for Anthropic a lot better than Open AI and I think they're obviously.
Speaker 2: The revenue or at least the ARR, what did it do 9X?
Speaker 1: For.
Speaker 2: Yeah, a billion to 9 billion.
Jeff: Yeah. And some of that you have to understand right when you're when you're dealing with enterprise type contracts. So if they signed A2 year deal, they're able to recognize that second year of revenue. If they did a three-year, you typically don't recognize the third year of revenue right off the bat. So that could be part of it. But again, I think that provides them a lot more stability as well. I just, I like that business model better. I think you are a little safer, right. You know your bills are going to be coming in for the next two years, typically with these larger enterprises, whereas consumers, you know, they could cut the cord at any given moment, you know, flip the Gemini flip to another one. Additionally, it's also going to provide stickiness, right? Something like this is going to stick within the enterprise. You're not going to just RIP out and replace an AI solution that's so integral to your day-to-day. Unless there is a massive need to or the solution is failing. I don't see the solution failing and I don't see anybody coming to the table with something so game changing that they're going to be willing to to give it up, right. It's also you're dealing with sensitive data too. That's two different companies now that are going to have your data. So it's just they're going to have a stranglehold here in the enterprise. I think. I think these companies that do adopt one solution or the other are going to be more prone to sticking with that solution too for for a long term basis. And I think that's that's phenomenal for Anthropic. Plus their balance sheet already is, is 100 times better than open AI. So yeah, I'm I'm.
Speaker 2: All right, let me ask you a question, Jeff. But let's pretend Anthropic is a public company today, all right? It's allegedly valued at $350 billion. Where can this go in three years? A.
Jeff: Trillion dollars.
Speaker 2: But that doesn't seem that bullish.
Jeff: I mean, it's not a 50X play. I know you only get really excited about 50.
Speaker 2: X No, no, no. I'm just saying like for for all this FOBO, right? Is that is that risk worth it?
Jeff: I mean, I think it depends your investment style, right? I mean, if you're only chasing the 20X gains, probably not. If you're looking for a an investment that is, you know, going to three X / 3 years, which most people would foam at the mouth for, absolutely. Look, you also have to understand when you go after enterprises, right? They're not typically adopted enterprise wide, right? So Anthropic is going to have ample opportunity to spread its tentacles out throughout the enterprise and grow those existing customers. 34567810X right? Typically when you sell into an enterprise, you start off with one business segment, right? You do really well, that business segment starts talking to other business segments and then you grow organically through cross sell initiatives. So, you know, let's say every company is spending $1,000,000 with the Anthropic today, that easily could go to $3,000,000 in three years plus then you have the consumer business as well. So yeah, I mean, I, I think long term, like it's just going to be steady growth that is going to pay great, that's going to have great returns, right. I think Anthropic, if you were to invest in Anthropic, you'd not perform Buffett over the next three years on his, you know, 20% returns by a long shot. But I think it is a very worthwhile investment.
Speaker 6: I don't think.
Jeff: It's volatile as a come up like iron. But I think, I mean, if you're shying away from a 3X return over three years, I mean, to me that's kind of silly, right? Obviously.
Speaker 2: No, I get it. I get it, I get it, I get it. But in this in this example, Anthropic today, let's pretend it's a public company, right. So it, you know, if you were to compare it to some of the other neoclass players that are still at the valuations they are today, I mean, do you, you know, where do you see the rest of the market going?
Jeff: Well, obviously it's going to have to grow in in with it, right? I mean, this is that's one like 1 notch in the belt, right? All these neoclouds are going to have to support all these varying companies like Anthropic, like Open, open AI, like the French company Mistral, like the the need for infrastructure is only going to to increase tenfold, right? Especially as these solutions become more powerful, enterprises are going to demand more power. That's probably, they're probably going to be running it on Microsoft. That means hyperscalers are going to be demanding more. It's just going to. It's just going to increase it exponentially.
Speaker 2: Right. But now I'm talking about the investors, right? Like you know, do you if Anthropic was public today and investors saw the opportunity to invest in it for AA3X potential in three years as opposed to some of the smaller, you know, top performing neo clouds with a.
Jeff: Are you asking me one or the other?
Speaker 2: Yeah. I mean, I'm just saying like this is, you know, Slime earlier was saying we're in the second or third inning.
Jeff: No, and I agree with slime right. I think the only the only difference is that you have to pick the right winner. I think there's fewer players in the anthropic space, right. See, it's a little bit safer of a bat versus there's 10/12/15 neoclouds technically now me and you know which one is, is, is gonna be the winner and is the right pick. But if you're on the fence, right and you're not 100% sold on iron or right, I mean, people are still buying core weave, unfortunately. I mean, people are interested in Nebius, people are interested in Cypher. Galaxy is going to have a business, right? So I mean, like there's a lot of different players that are going to win. And I think it's going to be harder to identify the biggest winner versus right where it's kind of like Anthropic or open AI. I mean, Miss Stroll has like a a small portion of it. There could be new players that that come into space. Gemini is obviously going to be competing too. I just think there is there's less competition and a clear it's the the water isn't as murky. I preferred to invest in. I think if you have the balls for it, I think obviously the neoclouds are going to be the are going to return more if you pick the right ones. But you are going to have a little bit more of a a roller coaster ride, I think, and you have to have a little bit stronger of a stomach. I think you're going to just see kind of a slow melt up for for anthropic if it was public today.
Speaker 2: Yeah, I was, I was curious about these private company valuations and I was asking Grokford his opinion. You know, XA is on Twitter, right, about like what percent of XA is valuation is like essentially just the infrastructure, GPS, etcetera. And it's like most of it, right. So what I see is you evaluate these valuations in these private companies. I'm just like most of most of the value here is just the, the infrastructure in the GPUs, right, right, right, Jeff, like just oh, I think.
Jeff: Well, I mean, I think XAI is a little bit different. I do get what you're saying, right. So XAI is going to be heavily incorporated in Tesla. There's going to be elements of it incorporated into all of Elon's ventures. Frankly, I think when Rocket Lab IPOs later this year for 1.5 trillion is which they're what they're targeting, right, that's going to increase XA is valuation as well. So I think XA is a little bit different, but you can't really look at it like that with Gemini either, right? Because Gemini's tied to Google. So everything Google is going to be pretty much bullish for Gemini since Gemini is going to be incorporated into all of their business segments, right? Gemini's probably going to be incorporated into Waymo and all of these other subsidiaries, right? I, I, I would imagine it's going to be incorporated into YouTube, YouTube TV in some fashion, right? Maybe recommending what to watch or, or just just as a broad example. So I think it is hard to say that it's just infrastructure, but.
Speaker 2: I no, I'm saying like the more than 50 percent, 60%.
Jeff: Yeah. I mean, well, it has to be, right? I mean, Gemini isn't anything or none of these solutions or anything without the infrastructure behind the scenes. It is infrastructure that's powering these things and that's it.
Speaker 2: Right. So the question is what percent if if anthropic is worth let's say $350 billion, like let's say that's.
Jeff: True anthropic's worth nothing if it doesn't have the infrastructure.
Speaker 2: I understand that, but I'm, you know, besides like IP, brand, Goodwill, all the other intangibles, whatever, you know, if I were to say just divide that by two, 50% of the value is infrastructure, GPU, whatever, you know, that's like 175 billion.
Jeff: Yeah, yeah, that sounds right.
Speaker 2: That's it. That's incredibly bullish for, I think, the public. New clouds.
Jeff: Well, yeah. And that number is going to just continue to go up like it has to. It's not going to shrink. It's not going to stay stagnant. The more adoption, the more compute that's needed, the more infrastructure that's going to be needed, the more power that's going to be needed. I mean, that's just simple. That's just, I mean, it's just, there's no way that it it can increase. Yeah. I mean, I think the I'm a picks and shovels guy myself, right? So I like investing behind the scenes. That's why I like batteries. That's why I like AI infrastructure. So yeah, no, I 100% agree with you. I think it's extremely bullish for any AI infrastructure and player, right? But I do do foresee, and I've said this before, that I think you're gonna start seeing in about 12 months out from now, some of these neoclouds really start struggling. And that's when I think you're gonna start seeing an avalanche of. And as power becomes more constrained, I think you're gonna start seeing an avalanche of M and AI. Think power obviously is going to play a lot, a lot into it as grid connected power is going to become more and more scarce. I think one of the easier ways to acquire more power is going to be through M&A and through those struggling neocloud or crypto miners that turned AI cloud providers. So yeah, extremely.
Speaker 2: Bullish. Yeah, And I'm just looking at today's price action, right? Iron's up almost 15 percent, 14.6 Looking at core weave doing a little Scroll down. Where is core.
Jeff: Weave core Weave announced that they're going to get essentially like are they getting bought or are they getting backed by further backed by NVIDIA? What's?
Speaker 1: They're getting.
Speaker 2: A billion dollar investment.
Jeff: OK, well, I mean, that's NVIDIA investing in itself essentially, because they own a massive chunk of it.
Speaker 2: I'm trying to find the pose so I can pin it but yeah like dude.
Jeff: What did Oracle do today, do you know?
Speaker 2: Pardon.
Jeff: What did Oracle do today? Let.
Speaker 2: Me see, hold on, I'm, I'm, I'm looking at Corey right now, but Corey is, is barely up 11% almost it's 10.7%.
Jeff: Ma'am, And Oracle is actually down 4%. Neebius last I looked was like hovering between 7 and 8%. Yeah, it's up 7 1/2% today.
Speaker 2: Yes, it it appears that a.
Jeff: Lot. It looks like a lot of the data center names ran except for Oracle.
Speaker 2: Yeah, it appears that somebody knows.
Jeff: Well, that's, I mean, look on the last earnings run, right? Every single hyperscaler basically said they need to add a ridiculous amount of capacity. What I think it was Google who said they wanted to double their capacity within the next two years. That was set on their last earnings call, right? So the only people that are going to stand to benefit are these neo clouds. Well, I shouldn't say that the people who are most likely to benefit are going to be these neo clouds and Bitcoin miners, right? They're the ones with the power. They're the ones with the space. You can't just even if they had contracted power with the grid, right, you can't stand up a data center overnight. It's a it's a, it's a monumental undertaking, right? That takes time. And even if you have some expertise in it, like they catch fire, right? I'm not going to name names, but you know, there's, there's a lot of things that can go wrong. So I think these, you know, the ciphers of the world galaxies got a, a really good chance to land a big deal here. Iron's got a chance to land multiple deals. I think they're the ones that stand to benefit the most. And I think that's why I, I kind of went with the, I think people are trying to get ahead of the curve, right? I think if you're trying to buy these names post announcement from the hyperscalers, it's almost a little bit too late in some cases, not for iron necessarily or some of the other ones that have big deals and pending. But yeah, I think they're just trying to get out ahead of it. You're seeing a pre earnings pump.
Speaker 2: I mean, dude, part of I think Core Weave's announcement was that their guidance, right, they're, they're playing on building out five gigawatts over 4 years.
Jeff: Yeah. And three of the three of those gigawatts are going to literally go up in smoke. They have 0 expertise.
Speaker 2: Well, let's let's let's give the benefit of the doubt. Just let's say it happens, right. You know, we've seen this asset light thing happened before, but.
Jeff: Wait, so are they, when they say they're going to build, they're building up five gigawatts worth of data center themselves or they're they're relying on Kolo?
Speaker 2: They're going to they're going to probably rely on others, but let's just, you know, go with a 5 gig like you know, if it's is it, if it's even possible for them or others, right, Like that's a ambitious.
Jeff: Do they even have 5 gigs of power today to?
Speaker 2: Build. No, of course not. But let's let's let's imagine that they can do it. OK. OK. 5 gigawatts apparently can translate up to $50 billion in revenue.
Jeff: I would think would be even a little bit more, wouldn't it? If you go off the Microsoft, you know what?
Speaker 2: Round numbers, round numbers, round numbers.
Jeff: Well, yeah, I'm just saying we sold them essentially 200 megawatts, 250 megawatts for 10 billion roughly.
Speaker 2: Yeah, but let's just use the simple numbers, right? So it's at least 50 billion in revenue, right. Their current market cap is around what, 50 to say 55 billion? I don't have it up, I'll get it. But but I did, I did some napkin math. It was like a 70% CAGR over the next four years. It's not stock price, it's market cap.
Jeff: Yeah, yeah, 54 billion market cap right now, Corey.
Speaker 2: Yeah. So I mean, if in a true AI bull market, I would, I would say like between, you know 8 and 10 price of sales multiple is that.
Jeff: What they're getting today.
Speaker 2: No, absolutely not. But I would expect if, if this growth sustains, people would get more bullish on AI And this this might not be core weave in particular, it could be the top of the old cloud to get that multiple.
Jeff: You think 8 to 10 is like where they should be or where what they?
Speaker 2: Should I, I think in a perspective?
Speaker 1: I was thinking.
Jeff: It was going to be closer to 15 to 20. You're.
Speaker 2: Thinking about price earnings, I'm I'm talking about price of sales.
Jeff: OK. Price of sales, sorry.
Speaker 2: It, it, it sounds crazy, but like, you know, hypothetically this could be a $500 billion market cap in four years.
Jeff: I mean, it's pretty wild. That's, I mean, it's really hard to kind of fathom, right? I mean, I'm trying to play along with it. But I mean, yeah, they were successful and do that. I mean, yeah, I mean, at least 300 billion, right. I mean, as a bear case, if that were all to play out, 500 billion probably bull case. Yeah, that's, I mean, that's insane.
Speaker 2: Yeah, so looking at, you know, our darlings, you know, it's like so early right in the AI store. I mean, just because some of us, some of us have been following these names for like 5, two to five years, right? It seems like this is now the arena to play in. It's like now the game has started.
Jeff: Yeah, I, I would, I would say the first pitch has definitely been thrown by now. Yeah. I, I just, I'm sorry, I'm just trying to, it's hard to wrap your head around those numbers. Like I'm trying to put it in perspective of iron even it's it's it's mind blowing. I mean, I don't really have the words to describe it. It's the ceiling for these companies is like Empire State High. Like you, you can't even see the ceiling.
Speaker 2: I mean, there's definitely going to be more financing, you know rounds, I mean, I don't think we've seen the last of the ATM maybe hopefully we've seen the last of it, you know, sub triple digits, right. But it's not, you know, market cap is not going to be a stock in the stock price. And I think it's going to, you know, require a really good CFOCEO to pull off the the financing aspect of it.
Jeff: Yeah, that or they give like a portion of their company to one of these hyper scalers like like Wolf did, right. That would that would create some liquidity and and help them from well one would get a hyper scaler with some skin in the game to it probably give them liquidity needed to avoid hitting ATM for for some time depending on you know what that looked like.
Speaker 2: Yeah, dude, like these numbers are crazy. Like it's, it's just difficult to vocalize. I mean, we've, I mean, I've been, you know, looking at these, these tickers since before they're, you know, going to our companies.
Jeff: Yeah, that's wild. I mean, I think I got into IRN somewhere in the four to $6 billion market cap range. So I want to say around there, I don't know what it was when it was 18. I could do the math and figure it out, but I don't feel like doing that at the moment. Yeah, no, I mean, it's, it's just, it's wild, right, Like.
Speaker 2: Yeah. I mean, seeing, seeing a company go from, you know, half a billion to potentially half a trillion, right?
Jeff: That's like, I mean, that must, I mean, it must be crazy for everyone, but like, I mean, you were in Bitcoin when it was in the hundreds, right? So I mean.
Speaker 2: Like, yeah, like honestly, like 1000, that was, that didn't really count. It didn't really count because I wasn't a serious investor. I was a child, right? But I mean.
Jeff: Still, it did. It very much counts. I mean, it's not to the IT does, but.
Speaker 2: You're in. It's kind of right now, but I have perspective on Bitcoin when it was under 100 bucks. But as an investor, I think, you know, 2020-2021, I learned a lot of lessons in the, you know, the crypto equity space, Bitcoin equity space. This this is like 1000 times more exciting.
Jeff: Yeah, IA 100% agree. Obviously I'm worried there's going to be some macro things that are obviously going to happen over the next couple of years that are going to create some, you know, hefty downturns. You know, I positive of it. If you don't think that's going to happen, you're crazy. Like it's inevitable, right? I'm just hoping that we can run like super hard and have enough of a runway before one of these Black Swan events happened where we've got enough momentum where the, you know, losing, losing 50% of iron gets to $200 obviously would make me very sad, but it wouldn't make me as sad as going from 80 to 30, right, Because I'm going to be up so much fucking money at that point that like, it is what it is. I know it's going to come back up, but that was really hard. Like I was, I mean, I, I mean, I wasn't sure if I was going to get round tripped at one point late at late 2025, right. Once I've gotten that much cover, like it's kind of just icing on the cake. Like it just, you know what I mean? Like it was a lot more worrisome going from 80 to 30 than it will be going from 20 to 100 in my opinion.
Speaker 2: I, I don't think it, you know, I think there's going to be a lot of new investors that come into the space, right? And they haven't developed those muscles and that's where the volatility is going to come from. It's going to get, it's going to be from, you know, the bulls getting way too excited. You know, I mean that my, my higher end price targets I've upgraded from, you know, my, my, my, my realistic price target, it's like 160. Like that's an achievable target for this year for iron, right?
Jeff: Are you saying that you think it's going to be 160 at the end of the year or we're going to hit 160 at some?
Speaker 2: Point for the highs, my my high range is has been upgraded from 160 like the the whole range is 160 to 273 essentially. And even at 160, I think a 50% drawdown can have it again. I mean that's just the the nature of these these these equities. We could see a drawdown from 160 to 80, you know, 2:40 to 1:20, right and.
Jeff: For me, that's not going to be as like as saddening as going from 80 to 30.
Speaker 2: Yeah, because, you know, you've been here, you know, for a while.
Jeff: Right. I, you know, I hadn't, I mean, obviously I got in early compared to some people, you know, buying below 20 bucks was my entry point, but I continue to buy right through all the way up and I think my cost basis is like around 30 bucks. So I was close to losing at like all of the profits that I had made throughout the year. And that was frustrating, right? But like once we get to 200, going from 200 to 100, I'm already up over, you know what, 3X at that point, even after the draw down. So I'm not going to be, I mean, obviously it's going to be sad to lose money, right? But you know, I, I mean, I got a little bit worried there for a second. I wasn't panicking. I wasn't like thinking about selling. I knew what I owned. But you know, at that point it's just, it's still kind of butterflies and rainbows, right? Like being up 3X4X in 18 months, 24 months, it's pretty ridiculous. Like obviously we're shooting for, for, for more than that, right? We think there's 102050100X, whatever it might be. But look at the end of the day, when, when I look at my account and it shows me, it shows like lifetime up 400%. Like, like it's hard to be like, it's hard to throw a pity party. No one, no one's going to feel bad for me, right? So it's, we've gotten really spoiled. And once we get to that point, I'll be even more spoiled. I'll be a total brat.
Speaker 2: Yeah, I, I think otherwise the 510X, there's at least one or two more 50% of draw downs.
Jeff: I yeah, I have 100% expected. If it doesn't happen, then I think, I think it would be. I think it would be weirder if it doesn't happen, then if it does, I just when is it going to happen? How hard is it going to be? What's going to be the cause of it is like the only unknowns, right? I think it's pretty much a certainty that it's going to happen at some point, right?
Speaker 2: My, my gut tells me that once we hit 100 and a hundred 100 bucks in like a few days to weeks, people are going to want to sell and we might go from 100 to 80 and then because, and people are going to think, oh, we're going to go.
Jeff: There's going to be little 10% hips like throughout the way I'm talking, we're you're talking big. I was talking, I was talking like or referencing like just the major draw downs that we have. Like if we go from where we are right now to 100 like and we don't have a little 10% pullback, that would be extremely abnormal.
Speaker 2: Yeah, I just think people are going to sell too early, like around 100 bucks, 90 to 100, and then we could quickly make a run from 80 to 160 in a matter of weeks.
Jeff: Yeah, I mean when we get once we get to hundred 120 range, I'll probably sell like very tiny, very, very, very, very tiny covered calls if my and the most I would be willing to get rid of would be 1015% right. So if it does, then I save that money off the side and then I buy back the dip. So that's going to be my my play on it at least.
Speaker 2: Yeah, I'm just, I think the move is the move from 80 to 160, right. I mean, we could see a pullback from once we hit 100, we could go down to 80, maybe sell E.
Jeff: It also depends when we hit the ATM right?
Speaker 2: I don't know I'll.
Jeff: Be pissed if we hit the ATM before 100 bucks.
Speaker 2: I'm going to say that they're going to have other ways to raise that cash, maybe through Co location deals, but hopefully it's not below 100.
Jeff: Well, yeah, they just, I, I don't want them to kill the momentum. I want them to allow the stock to perform, recognize its value before it they crush it because I mean, anytime you're going to hit the ATM, you got to expect a 10 to 15% drawdown, right? Like, I mean, that's pretty standard, typically closer to 10, I would imagine 1012.
Speaker 2: No, it's like 50%.
Speaker 1: Don't say that depends.
Speaker 2: On where it is in the cycle and the Bitcoin mining, I mean it could go down 75%.
Jeff: Yeah. But traditionally though, like when Iron went to the ATM, it was like a 10% drawdown. It lasted about 72 hours and then it started recovering.
Speaker 2: Yeah, but we're, we're now in a new arena. I, I, I don't think we're going to see 75% drawdowns with an ATM announcement above 100. But I I get we're not out the woods.
Jeff: Unless they do like deal ATM deal that would be fine. But I mean, even then that kind of curbs like the the momentum.
Speaker 2: It depends. I mean, if it is it a cloud deal, is it a Co location deal? Is it a a, you know, a hyperscaler or is it a, you know, anthropic open AIXAI well?
Jeff: If anthropic, it's $350 billion. Let's call them a hyperscaler, right? I mean, because that they're close to it. They're they're like 1/2 hyper scaler at that point. Guy, are you there?
Speaker 2: Yeah, yeah, I'm just reading the comments. We've got a lot of them.
Jeff: Do you, I mean do you consider, I mean you have to consider open AI hyper scaler at this point I would imagine, right?
Speaker 2: Not technically, no. I mean, I think the traditional hyper scalers, you know, I'm not a finance professional. I'm not I don't work in in a finance department. I don't even, I don't even have a job, but you know, if you ask a finance professional, I think they would prefer, you know, a Google, Amazon, Microsoft, you know, with, with a strong cash balance sheet. And if you weren't to like if, if there's another alternative like a Anthropic, I would expect you know, a greater upfront payment in addition to, you know, them paying, paying more because of the risk.
Jeff: No, Well, yeah, I don't know totally. I was I was more like what is your classification of a hyperscale or not necessarily how it impacts?
Speaker 2: I, I think the new, you know, the new generation of hyperscalers are being created right now. They're being developed. I'd like to see, hopefully Anthropic becomes a hyperscaler, right? I mean, I think that's what the ambition is. That's why they're raising so much money, right? Because they want to be a trillion dollar company, right? But I'm talking about today, like, are you a hyperscaler today? Are you a trillion dollar company today?
Jeff: Yeah, there's, there's, there's, then there's three. Google. Amazon, Microsoft.
Speaker 2: That's what I'm saying. It's it's. My suspicion is it's Google.
Jeff: Or meta. I guess you could put meta in there too.
Speaker 2: Google, Meta or Amazon?
Jeff: Yeah, I mean.
Speaker 2: Or Microsoft again.
Jeff: Yeah, Google, Meta, Microsoft, Amazon, those are the four hyperscalers. And then you got like guys that are close, right? Like, I mean, Oracle, regardless of what you think about their business model and their balance sheet and all of that, I mean, what is Oracle's like what, a 400, five, $100 billion company? Yeah, I mean, Oracle's a half a trillion dollar company and they're they're either like a mega neocloud or a mini hyperscaler, I guess however you want to phrase it. Are you talking to Guy? I can't hear you at all. Can you guys hear me still or is it just a guy that's glitching? Can you guys put a thumbs up if you can hear me? Cool. Yeah. I don't know. It's it's just it's going to be thumbs down. Thumbs up. OK, Good, good, great. Grand. Yeah, I don't know. It's.
Speaker 2: Yo, can you hear me?
Jeff: Yep, we can hear you.
Speaker 2: Yeah, sorry, space glitch. I was saying Oracle. Doesn't Oracle have some credit issues?
Jeff: Yeah, they have major credit issues.
Speaker 2: Yeah. So if I were if we were to see a deal with Oracle for.
Jeff: Example. I would not be happy personally.
Speaker 2: I mean it depends. I'd have to pay a lot more with a higher upfront payment.
Jeff: Yeah, I they would, but or look, Oracle's not going to default, but they're like the greatest risk of defaulting of these major companies. Their CD swaps are through the roof. And I would be concerned if we did a deal with Oracle that it would be to support Open AI through Oracle. And then you have essentially to worry about Open AI not paying Oracle, then Oracle's credit further going down the tubes and then them being in jeopardy of not paying it, paying us like I want to stay from from for Iron, like I want to stay as far away from as possible from Open AI and Oracle right now until their their balance sheet improves until their CD. So OPS aren't going through the roof. Oracle's credit rating is like near junk territory. It's the second like lowest grade you can get there. The considered the least trustworthy like mega cap company on the planet at the moment.
Speaker 2: Jeff, can you hear me? Yeah, My my space keeps glitching.
Jeff: No worries. I'm not sure if you caught what I said, but.
Speaker 2: I I, I caught the tail end of it. Invite the speakers up, whoever wants to come up and speak, come up while I get my shit sorted.
Jeff: Yeah, small cap, I'm going to invite you if you want to come up and chat. Oh, there we go. Mao Bao, my favorite. What's going on, dude?
Speaker 2: Yo, what's up? Not much I've been just selling puts on cipher and it's being extremely profitable because the trader just so repetitive that you can almost do it every week and you know hopefully this trade doesn't break. I think the ticker just come down on Monday then you sell ports on 17 or 16.5 then the winner back to 18 since 1019 on Friday it drops again. So yeah, just that's what might been doing. So yeah, unless I absolutely love to listen to you guys talk about all the stuff. So yeah, actually accidentally request request to be a speaker. I just want to join the space, then I click accept and speak, then become a speaker. But yeah, that's what am I doing. I think lots of the high momentum games and the high beta stocks this year is going to have very high volatility. And if you know how to make choice on that, especially if you own shares, you can do cover the cost at different strike days, especially a longer higher target cover cost. Usually when the price have like a double digit move and the cars actually drop like more than 20 to 30%. So you can't create the crazy that way and send off the other names. You can sell post if you actually want to own the stock. So yeah. So that's all I have.
Jeff: This is a really common way in which big institutions go and try to position themselves to acquire shares. So like that's that's really common. Bow are you are you more of a a compounder or are you more of a trader?
Speaker 2: Yeah, For me, I actually separate My Portfolio into different parts, right. Obviously have a very large position on iron in both costs and shares. But I the way I do it is very risky. I basically use the margin that brokerages provide to me to sell post. And you know unless you're like post get assigned, you don't actually pay any interest for that part of the collateral, right, Because the collateral is actually coming from your Martin book. But if your post expired, what's this? Or you brought them back before assignment then you don't actually lose anything. So it's kind of risky. But this just how I do it. Not financial advice. Don't recommend anybody to do it that way you can lose lots of money. But basically for your question, I have a key holding portfolio then I use the margin then my brokerage provide me for bad position to sell foods.
Jeff: Understood. And then do you have and do you do day trading as well or swing trading?
Speaker 2: Yeah, like for the takers, I already know well, but it's hard to do like day trading nowadays unless you actually have a very repetitive patterns, right? Because I think it's been why do they talk about that? If you like a just regular retail trader, it's hard to predict the price for the next 5 or 10 or 20 minutes, right? Because you have now all those headphones or and market makers and they can see the order book and they see the liquidity level they see and they trade much faster than you are. So yeah, that's going to be a very hard thing to do if you want to like make like 1020 minutes straight. I know some people are good at this, but I'm not particularly good. I like to sell puts because it give me a margin of safety, right? And if it's the tick I really want, I don't mind you buy it like maybe $0.50 or $0.60 higher than the current price.
Jeff: Selling puts over selling, Selling calls. Is it because you don't want to give up your shares I'm assuming?
Speaker 2: I do sell well. I'm more careful on selling cost especially against iron because I do like a Bitcoin AM mining guy. I have a price target for it, but I at some point I do consider to sell cost right because I learned a huge lesson last year. So basically I remember this day very clearly on November the 5th, the cost strike at $110 expiring on this June 18th was selling for $20 per contract. To think about that, that that day the iron was, it was treated as 7576, but the cost for 110 it was, it was sold for $20 and I sold that cost, but I brought back the, the, the day after. But if I could have kept that core back in December, that core was worth like $2.00. So that's like 98% down of your premium, right? So you basically I, I could have basically get like 200K for free, but I didn't so and also there's a way I think about selling cost is that reduce your cost basis per share, right. I think I have a similar cost basis with you on iron. My cost basis is about $25. I have 12 12,000 shares. So if I sell a car that is $20.00 at a let's say 110 strike price, right, then my cost basis for iron basically become $5.00. So that would that give me a like a huge margin for downside protection instead of giving upside, right? Because what would that be less satisfied if I get a like I mean AX instead of a six XI mean sure. But if my downside is like 0, if I can't lose money, then I would definitely want have like a 6X instead of having lose could lose like 50% of money instead of getting AX, right. So it depends on how you see risk and worse. So yeah.
Jeff: It would be interesting like this week, like if you kind of straddle your position, you would have been making so much money, right? If you bought a put and bought a call, like because the price action of iron has been so crazy that a that a straddle would have you probably could have cashed it on both sides with, you know, 10% drawdowns, 10% upswings and just made made good money that way by not exercising, but just just selling for selling them out for cash. I don't know how long it's going to be Pogo sticking around like this, but I'm sure day traders are having a field day and swing traders are having a field day with iron. It's probably got to be one of the more exciting stocks to swing trade at the moment. Yeah, I, I, that's a little too advanced for me. I, I know how to do it. It requires a little bit of finesse and it's just not something that I'm willing to risk. But somebody who's really experienced with it and could straddle it and buy a put, buy a call probably for the next 7 days is going to have an, a really good opportunity to cash it both in for, for sizable profit, I'd imagine. I don't know if that's something you do, Mao.
Speaker 2: Oh, me, and I've done it before and I lost money. Lots of lots of it is just like emotional control, right? Because even for self post, there are a period of time that my self post are unprofitable, right? Maybe it's down like maybe 1020%. I think yesterday the cypher was trading at 16.3, right? And then my post was sold at $0.90 a one up to like $1.20. So I was basically down like 30% on my post, right? But I know like what I able to buy sci-fi 17 short, but for like more complicated strategy, you really have to think, OK, well, if you're like 40% like down, like do you close it? Do you like keep it?
Jeff: Like yeah, you can't be greedy. You got to shoot for like what? Like maybe a 20% pop each way. Like not 20% stock price, but like 20% profit each way. Take your 40% and run right you're you're basically banking on a 10% swing each way you buy Like let's just say iron was at 50 bucks, right? If you bought a put at 49 and or like a A2 week out put at 4849 and then a call at like 52 ish, right, you would have done. I know that I'm making up stock price, but if you actually went by this one, right, let's just say when iron was at 55, if you bought a 50 $3 plate and you bought a $57 call for two weeks out, you could have made probably some pretty good money off that.
Speaker 2: Yeah, Yeah, 100%. You can close the single legs when the price move one way, right, then close the other leg when the price move the other way. Yeah, that require you to do you like lots of you have to watch the market in that way, Yeah, 100%.
Jeff: I'm saying it's a little too much finesse for me, but like the way that irons price action is moving, I'm sure that could have made swing day traders who know how to do that like a fuck ton of money, right? Especially if you're if you're betting big, right? Yeah. I would only be doing small potatoes until I ever figured it out, like maybe a contract or two each way, right? Where it's not going to be dramatic for me if I if I fuck it up. But yeah, I mean, I think that would be a good opportunity. I bet you would probably be a pretty good opportunity throughout the rest of this week. I anticipate we'll probably have a little bit of a drawdown tomorrow and we'll probably melt up, I would imagine through the rest of the week. Actually. I don't know. I shouldn't say that because tomorrow earnings are going to impact it. So yeah.
Speaker 2: For yeah, because you raised this point, I want to add one more thing because I think there's a popular narrative that wouldn't just like a huge hedge fund take position of certain stocks, right? It's going to be bullish like it's kind of related to option trading because you have to be careful to look at what kind of institution are buying the stock, right? If it's like Citadel or Sequoia or like all those like long short like market makers buying the stock is not necessarily bullish. Maybe they just want to write option contrast, right. And in indeed they can write it much more profitable and they create they could create price movement for their shares to have a profitable entry. But if it's like.
Jeff: Yeah, usually buying both, right. Those institutions are usually buying a pullet and buying a call.
Speaker 2: Yeah. Well, yeah. Actually writing the contracts for them is for like if they have to have the shares to write the contracts, right. So or or for hedging purpose, yeah.
Speaker 6: Yeah.
Jeff: Yeah, that's you see that a lot like when you when you look at the institutions, they usually have a call option each way.
Speaker 2: Yeah, yeah. So you really have to be careful. It's just like a long institution, 41K like like Fidelity, that kind of institution buying the stocks almost like 100% bullish, but it was city dollar. You have to be careful. Yeah, no. Oh, Mike is here.
Jeff: Yeah, I just invited Mike up to to speak. So as soon as he's ready, we'll we'll let him come up and and have the mic. Mike, how's it hanging? Hey, guys, How you doing? Always good, always good. Today was a fantastic day for the Iron Bulls. Yeah, I mean, look, I I try to resist the temptation to let my day be dictated by securities prices. I'm a high volatility, high conviction, long duration value investor. So mark to market pricing on most days is, is largely a non event because I'm looking out a year, 2 years, three years and thinking like, how big can this be? And the thing that keeps coming to mind is as I think about this market is, is I think we're all vastly underestimating the possibilities because it's really hard to think in exponentials. It's really hard to understand like where AI is going. Like when I, I'm going to harken you back to the to the late 90s, like when I think about I was using my first wired T1 connection at Stanford. I was finally able to download like thousands of songs really quickly using Napster and Sean Fanning and one of the other Co founders were in Palo Alto, like rumored to be in Palo Alto when I was at Stanford. And when I think back about that, that timeline, like there were some people that were bullish on the Internet. There's some people that were using the Internet and thought it was cool, but nobody like absolutely no one can understand the trajectory of what like Microsoft, Amazon, Google, Meta, Tesla, etcetera, all these companies, like what was going to happen over the next 25 years. I mean, the consumer Internet largely didn't exist. It was mostly people looking at porn via, you know, portals using phone line modems that blocked your ability to, to talk to anyone else while while the Internet was being used. It took like 5 minutes to load a web page. And if you told someone at that time we would do almost all of human commerce globally on on the Internet, people would have said you're, you're nuts. Like only my professor uses that and he largely sends it use it to send emails to other professors. Fast forward to today and, and now the biggest companies in the world are, are all basically technology comes. They're all basically Internet companies. They're all basically Internet native now and that was not a non obvious non consensus view if you had it 25 years ago. So we're in a little bit of a bubble here because we're having conversations in these rooms that far surpassed with the average person is exposed to. I mean, the average person is watching TV news and Jim Cramer, right, talking to their neighbor who's just is idiotic as as they are. And they're just like they're watching TV and spreading information. A lot of it's incorrect. Some of the stuff they got off of Facebook from their neighbor. And so yeah, like if if you're lucky enough to be in a place where people even understand AI, like you've already, you've already beat 99% of people talking about AI, talking about Bitcoin, talking about robotics, exponential technologies, great. Like if you're on X and you're in these rooms like you're probably far more advanced than the average person, but you're still likely to systemically underestimate how big like for example, the AI cycle might be and how, how elongated it may be. This may be a 30 or 50 year cycle. This may be the first wave of initial CapEx, right? Which is again, according to Goldman Sachs largely being funded by cash and and cash flows largely coming from the largest technology companies in the world, who of course we're behind cloud as well. So we shouldn't be surprised that it's Amazon and Microsoft and Google, etcetera, because those are the same companies that help build the Internet data center business. And so, yeah, if we're in the first or second inning, like a lot of the stuff we're hearing and a lot of stuff we're we're listening to and reading is, is wrong and it's wrong. On the downside, it's, it's not imaginative enough. It's not, it's not looking at the full picture. It's not considering the possibilities. There's a lot of what could go wrong type of Chicken Little thinking on acts and in general and investing. And there's much, much less of the sort of what can go right mentality. It's the kind of mentality you have if you're like Sequoia or Lightspeed or Andreessen Horowitz and you're funding AI companies at the feed stage or the A round, right? And you're not, of course, you know stuff's going to go wrong. Like when you invest in private companies, you expect to lose money. The actual portfolio approach for these big VC funds is to take such big swings that you're only trying to hit. You only need 2, one or two big outcomes to return the whole fund. And then everything else is sort of gravy, right? But you have to hit. The power law means you have to hit those really big returns, so you can't be sitting around asking what can go wrong because something will always go wrong. There's always a reason to be bearish, there's always a reason to be negative. But in order to make these 2000 or 5000 or 10,000 X type returns that people are going to make on companies like Open AI or Uber or Coinbase from the seed stage, you have to be asking what could go right because we already know what could go wrong. That's very low IQ thinking, right? When you listen to somebody time about AI and they can only tell you all the reasons can go wrong, it's like duh, duh, duh, duh, duh. What am I in 3rd grade? I don't need to hear all the reasons it's going to go wrong. What I want to know are all the reasons that could go right. And the reality is the people who are only thinking about what could go wrong don't have the mental bandwidth or the cognitive ability to think about what could go right because they waste all of the energy in their brain and all of their brain cells on things that don't make money right. And, and I like to say that most of the big money that's made in markets, pretty much all of it is made during periods where you can find a lot of people who are worrying about doomsday scenarios like end of the world scenarios, like the vast majority of the massive amounts of wealth made in markets are made just investing while other people are worried about what could go wrong. So what what do I think could go right? I think AGI is probably coming sooner than people expect. I think the AI is disrupting the job market much more rapidly, especially at the middle tier and the lower tier. And I posted a tweet about this earlier. You know, there's a lot of blah blah blah about the K shaped economy and whether it's right or wrong, it doesn't matter really. Like there, there may be some moral implications of the K shaped economy, but what actually matters for investing is trying to understand what it is not, whether it's right or wrong. And I think, Mike, can I ask you a real quick question? Let me just finish the thought. I think it ultimately emanates from the fact that average talent in the economy, the average worker in the economy, they're getting completely disintermediated right now. The that's why you send out a job application to a generic job without knowing the hiring manager right now. It goes into a vortex and there's no actual real job being offered most of the time. A lot of it is just dressing it up for 8:00 HR and compliance to make sure that you don't get in trouble for not offering the job externally that you already committed to fill internally. But that's another story. So average talent is being diluted, right? Because average talent can be disrupted quite easily because it doesn't do anything that is an average and AI disrupts the average in the middle tier first at the at the high end. I'm seeing this in all my companies right now. The war for talent of this like very unique senior talent. Like think about the AI labs, they're willing Mark Zuckerberg and Anthropic and open AI. They're competing with like chain St. and Citadel and Millennium. And if you're successful in those companies, you make 10s of millions of dollars, if not hundreds of millions of dollars. And some of these AI signings have a have a have sort of had an effective implied valuation over a billion, right, for the very top AI people in the world. And so you juxtapose those two things. What does it mean? Well, it means that you can't be average if you think that you're just not going to have capital and you're just going to go get a job, like a mid level job out of school and that's going to be some sort of path towards prosperity. It it won't, it, it can't because the structure of the economy has moved completely away from that and that is accelerating right now. So anyway, I'll let you interrupt me now, but I wanted to finish that thought. Yeah, I don't know, it's just on the topic. I'm just curious, what is your definition of AGI? Feel like it's such a moving target and everyone's got such a different definition. Just to kind of put your comments in perspective. I'm curious, what's your definition of AGI? I mean, I'm not going to be super, super specific on that because I agree with you. It's actually a moving it's it's actually a moving target. And I think it'll be one of those things where there'll be something on X2 years from now where some researcher who's very senior says, look, this is what we just did in the lab. And to us, this path is the test of being something we would consider an AGI. But I think of it as like truly human, like intelligence and ability to evolve in human like ways in terms of intelligence. And a lot of people probably disagree with me. That's it. And I, and I actually think it'll be really hard to recognize when when you see it like, because a lot of the things that we're interacting with now already feel human like in terms of their ability to answer questions and understand contacts and things like that over time. And of course they know pretty much every fact that could be known in the human universe already, which is insane, right? Because the average person is not able to retain very much at all even from the last week. And AI sort of retains knowledge of everything that may have value in some context. Again, it has value at the lower end. But what what it still can't do is think like a CEO, like a great CEO thinks, right? It doesn't think independently like that. It doesn't think independently like a great investor. It can tell you what the data already says. It might even be able to tell you something you didn't know about what might happen in the very near future, but it probably can't tell you much about where asset markets are going over two to three years. I think good human investors are still better at that. I can imagine a world, though, where given the right programming and the right structure, right in the right technology stack and the right amount of compute powering it, where that's not the case. So I think AGI is somewhere between where we are and like what a really good CEO can do in a company and what a really good investor can do operating independently. And I think today it's largely like helpful and filling in gaps and automating rote tasks and being smart about facts, but not necessarily like you wouldn't necessarily want it to be running your company quite yet on autopilot, right? Because there are some decisions that actually require human judgement still, right? Where there are Gray areas where it's not clear, like you actually be able to need to be able to read other contacts that are non verbal, even in some cases are non written right where you only you understand the culture because you actually worked at the company for seven years and you know how things get done in the company. There's no log book or manual that says here's how you actually get this sort of thing approved at this company. But everybody there knows that that's how it's done right. And there's there's millions of those things that are undocumented. And so AGI should be able to, if operating long enough, be able to understand some of those contexts beyond just contacts that are sort of black and white zeros and ones. But it doesn't do that yet. So I don't know, like that may not be the, the, the perfectly correct answer according to some AI researcher working at Open AI, But I don't really care because I think it's better to understand, have an intuitive feel for where these things are going and what's likely to happen. And that'll give you still an edge in market versus like reading what everybody else thinks about it and then just sort of regurgitating that. Like I, I don't actually spend a lot of time doing that. I spend most of my time looking at what the market is actually doing and the opportunities presenting and then asking how is that different? Like what do I think is going to be different over the next one, 2-3 years that in most cases AI cannot think about or understand yet because there's no data that says that that's true. There's no data that's going to predict that perfectly. There's only the human brain's ability to see with pattern recognition and some intuition, the slope of some of these curves that are maybe not visible in the daily. Like for example, right now, if you just looked at the data and you looked at the chart, you could be led to believe that bitcoins dead right? And that bitcoins probably never going to go to $1,000,000 a coin. I actually think $1,000,000 a coin is, is virtually certain like over a long enough duration. Like I think if you go out as far as 20 years, like it's probably 95 to 98%, something like that. But AI is not going to believe that today because there's nothing in the current data like the same things the charts, Quigglers and the Canadians are doing. They're like looking at a spreadsheet and they're circle jerking each other off in a circle talking about their their charts and what happened over the last six months. But if you don't have a deep fundamental understanding of Bitcoin, how it fits in to all monetary technologies and all monetary powers in human history relative to the day, and then what the likely pathway is integrating AI, which again is more of a, you know, looking forward as opposed to looking backwards exercise, then you're going to be unlikely to be able to probabilistically wait the odds correctly. And therefore you're going to miss a chance to stay long term allocated in size to something like Bitcoin that has like almost virtual certainty of having success over a long enough duration, but may look risky or volatile or even dead at certain periods of time if you're just using backwards looking data. So I think, look, I think when Bitcoin wakes up and inevitably will and volatility starts to spike again, I'm betting actively on volatility in multiple different ways, including stacked, I bet options going all the way out to September, I think right now May September, etcetera. But also via, you know, entities like Strive where effectively the higher the Bitcoin price goes, the less drag there is on the entity and the more it can sort of generate an embedded return that exceeds their cost of capital, which is really what's going to create exponential equity value. And so in a sense, it's like a long duration call option with no expiration where like as long as they don't, they can't default. They don't have to sell the Bitcoin because they have no debt instruments. Once they retire the the similar convertible notes, they can just wait until Bitcoin is going up again. And of course, this is what always happens. People get way too excited every time you know, assets are going parabolic and they they want to pile in after that move has already happened. I get it. Feel safe to do it after you see the movement and after you see the excitement from other people. But that's actually not the, the way you make the most money, right? The way you make the most money to have a view as to what's going to do that two or three years in advance often. And then stack the take huge positions and wait, right? Instead of like letting the chart squiggles dictate it, let your understanding of the world and where it's going over the next two to three years dictate your sizing and your approach to that opportunity. And so right now it's, it's amazing. Like MSTR and fall of 2024 you had people abandoning minors to go into MSTRI. Can just tell you people were doing that AT200300400500 all the way up. They were leaving iron and cipher when they were under. There were three 4-5 dollars to go into MSTR at a price that is in many cases more than double the current price. So people who made that rotation late in 2024 rotated out of something that was about to drop 60% plus and left something that was about to go up more than 10 to 15X in some cases. And that's happening again. Now. You have people who loved treasury companies when they were 20 bucks and then they hate them at a dollar or thirty cents or they they they loved them at 12 and they hate them at $0.78. And it's just, it's insane, right? Like it's insane behavior. I can point it out. I can say, look, guys, this is not how you make money in markets. Like this is how you get absolutely hosed. You never going to become even a multimillionaire, let alone a billionaire behaving like that. The way to become a multi millionaire and a billionaire from scratch is actually to take large concentrated positions and things that are undervalued and wait. It's just you don't take large positions after something's run up a lot when everybody's excited and then wait for it to go down and sell it and puke it up. Like that's not that's not how you make money. But I watch people do that over and over and over and over again in markets. So I think we're we're in an interesting inflection point because I think companies like Cypher are about to go mainstream, right? It's whatever it is, 67 billion, but has a good chance of getting to 2030 fifty, maybe even 100 billion, which would make it a household name. Like like Robin Hood did that, right? It went from single digit billions. Palantir went from that like single digit billions to kind of a household name. And that that's probably going to happen to these companies and into that that that's in motion, right? Like we're in the, we went from like nobody knowing the names of these companies 2-3 years ago to now kind of hot in a small subsection. But what's happening with the treasury company is a little different because they're absolutely in the toilet. They did not have a good year last year. MSTR got smoked down 50%. You could almost say last year was the bear market for MSTR. And so it's, it's not a household name. It's most people still don't know what it is, but it's, it's actually pretty large already. And I think the smaller treasury companies, Metaplanet, Dr., etcetera, like those companies, if Bitcoin goes to $1,000,000 are probably going to be more well known, maybe significantly more well known. And if that's even possible, even though it's a plausible scenario, you want to take positions in any of that stuff. Like I'm not saying you should or shouldn't, but if you are going to do it, you do not want to wait till Bitcoin is 300,000 or 500,000. Makes no freaking sense. Have a view on whether Bitcoin is going to do that and then take your positions and wait. And I can tell you from the from the Bitcoin mining to AI conversion side, like if you think back to December 22, January 23, first quarter of 23, very few people who were taking positions there were able to hold because they did not have enough conviction about the three-year view. And I told people even then I said this is a two to three-year game minimum and you will not get paid properly if you get off the ride in the middle of the ride. It would be like getting on Splash Mountain and Disneyland and then taking your seat belt off and then jumping up and down in the ride as you're about to go over the falls. Like that's literally what people were doing in Bitcoin miners in the last two to three years. It's completely insane when you think about it. But they gave up and missed an irons case A50 to 60X return already off of the lows in December 22 because they were dancing around and jumping and jumping on Splash Mountain and and Magic Mountain, whatever, when they should have just been staying seated in the ride and enjoying the ride. You go up and down and and there's a lot of volatility, but you get if you get to the ultimate, you know, destination, it's worth the ride, right? And that's all you're doing, right? Like if you abstract away from all this noise, all these options trading and all these chart squigglers and all this drama by which, by the way, doesn't add much value, especially on an after tax basis over time. If you get away from that and just focus on fundamentally what you're doing, it's actually not that hard to make a lot of money in markets. It actually requires more, less like pure raw intelligence, like the kind of intelligence that Claude or you know, Chachi PT can give you and more conviction and psychology. It's more about like knowing who you are, setting your structure up such that you can't fail, right? Like it's creating something that that you know you can execute on. And and that means executing on even when shit hits the fan, like even when you take a big draw down, which you had to take two or three times already over the last three years just to get here in names like Iron and Cypher. But that was well worth the effort. And you can imagine how much that'll be worth the effort if you held the position. Like, for example, with Iron, one of the benefits of being on the board, in addition to being able to actually help create the value directly, one of the other benefits is they actually can't sell or buy in the open market very easily. Right? I could sell, but then there would be a, an SEC filing and people be like, why are you selling? And a lot of other people sell the pay tax and stuff like that. I've refused to do that. I just believe too much. And what we're doing to, to sell to pay taxes, like I'm glad I'll gladly pay those taxes myself out of my own pocket every year because why would I liquidate a stock that I know is sort of systemically undervalued? But you know, there's a lot of mercenaries in corporate America. I don't blame the guys at these other companies who pay themselves huge amounts of money to generate little shareholder value and then and then also sell the shares that they get every year to pay tax. I don't blame them for that. I don't think it's a very good look personally. But but also it's a free country and and if you buy their stock, then I guess you understand that that's the way they're operating. But listen, like that's one of the benefits though, of being an insider is that in some ways you're actually, you have to resist the urge with stuff that maybe is liquid, right? Or at least has the semblance of being liquid. But but with something where you can't get liquidity at all, it's more like a private equity investment. And it turns out that like if you aren't allowed to sell something, you actually make more money if you're right about that thing being valuable. Because no matter how much you think you could have made more money trading, almost nobody gets to where you're ultimately going with the same amount of shares if they do too much trading along the way, right? It's just, it just is what it is. Everyone thinks it's they get cute, they're like, oh, if I sell at 75 to buy it back at 37, you know how many people actually did that? Like a lot of the ones who sold at 75 are still trying to figure out where do they buy back in? And by the time they figure that out, it might be 95 or one O 5. And then potentially in some cases, you missed the opportunity ever to get back to the same Share Account you had before. And also, by the way, to add insult to injury, you pay taxes on that. And in some cases those will be short term capital gains tax at a higher rate. When you add it all up, it looks like stupidity to me, looks like penny wise pound foolish behavior, picking up pennies in front of a steamroller when there are little literal fortunes to be made. And some of these sectors over 357 year periods, which I think we're right in the middle of one. Now I've been out on on my long runs, I did 10 today. But on some of my other runs recently, I've just been thinking about what's possible here. And I think we're probably systemically underestimating all of us like what's possible because we're just not going to be capable of understanding where AI is going because we're still used to be. We're operating with an analog mindset and increasingly digital world. Now we're operating with an Internet mindset and curve in an increasingly exponential AI world, which is actually a step function upgrade in the speed of adoption and the speed of intelligence sharing and the speed of just how fast the economy is moving. Such that even if you're Internet native and you were smart about the Internet, you're still going to be too slow for understanding the implications of AI. Because it's actually, it's a quadratic, it's an exponential function. It's not, it's not something that's just, you know, going at some, some sort of 2 * 2 * 2. It's going like 4 * 8 * 16 and, and it's moving faster than most people can see. And therefore all of our sort of analog and even Internet digital level views of, of what's likely to happen with AI are probably going to be wrong. And if that's the case, then the, the, the demand for some of these things could be much higher. So anyway, I'll, I'll pause there because I've, I've, I've shared a lot of thoughts of stuff I've been thinking about, but just as a high level summer, like the one of the biggest things I'm noting, which I mentioned earlier in the labor market in particular. And, and this will have implications for unemployment and I'll have implications for like interpreting what unemployment means structurally. But is that at the very high end of the market, like AI researchers, hedge fund analyst, hedge fund managers, private equity, real estate, like at the very, very high in the most talented, most unique skill sets are being compensated at astronomical rate and it's actually accelerating and exploding higher. I'm seeing we're having discussions the number of companies about how we can pay a lot more to get the most senior talent at the same time that I'm seeing a lot of other stuff getting completely automated away. So basically the value of the average employee is plummeting at the same time the value of the most elite employee is, is skyrocketing. And, and I think that's largely responsible for some of the K shape dynamics that that people are seeing and experiencing and may also be responsible for changes in the way the market responds to things like unemployment data, which in a traditional manufacturing economy, just the pure number as a percentage of unemployment may have a bigger impact on stock prices than it does in a world where you might have slightly higher general unemployment, but you actually may have more money going to labor in aggregate, because so much of it is going to some pure top one, top three, top 10 percent at the high end. And those people are largely going to have to support the sort of traditional economy until over the next 20 or 30 years, we figure out what is the economy actually look like. If most traditional jobs or things we thought of as traditional jobs over the last 30 years become automated such that either new jobs are created or people have to move to, to some other part of the economy or the shift of jobs changes. Like we were talking about last night at dinner, People who repair like the, the, the windmills, the people who repair the, the, the, the wind energy turbines, right? Like the, those big things you see out in the desert, in the high desert, right? Like when you're driving to look at Bitcoin miners, there's not going to be a robot to, to repair all those in the near term, right? There's probably not even going to be a good robot you can hire from the outside that's going to repair your toilet for a while. And so, yeah, there, there may eventually be all of those things, but for a period of time, you're much more likely to be disrupted if you're a junior accountant or junior lawyer where AI can literally do your job right now and it could do your job better than you can do it. And so we will see a continued drop, in my opinion, in the value of of those types of jobs. And we'll see maybe a significant bump in the value of jobs that can continue to be done by a human for a while, including physical jobs, technical physical jobs, exactly the thing they don't teach at a liberal arts university like Harvard or Stanford or Princeton. But but certainly something that you can learn if you work hard and, and can probably make 2 or 250 or 300,000 a year, which still, even with inflation where it's at, is a reasonable income for most people. So anyway, let me let me pause there. But those are some of my thoughts. Awesome. And sorry for interrupting you earlier. I just, I wanted to make sure that you were talking about AGI, such a moving target and everyone having such different definitions. I wanted to make sure I and everybody else is able to put your, your thoughts and comments and, and into context. So I appreciate the the clarification Degen, you got your hand.
Speaker 3: What's up boys, Bitcoin mining mafia in the house. I don't care if you change the name Mike, I want to get this macroeconomic shit in a minute, but let me tell you something. I ran 4 miles in 2 feet of snow today. We got dumped on in upstate New York and I just went with Sorrells and like 2 pairs of sweatpants on. It's the first time that I've actually done it with, with some inclines. It's a it's a trailer. I usually run this trail and then there's like a little gym workout thing at the bottom of it, but there's, there's some incline there. Yo. I was guessing harder than beach runs, harder than trail run. Something about like, I don't know, pulling the feet, dragging the still. It's like doing Heinies for all, right, I guess. I guess it probably took me like 4045 minutes to do it anyway. So I kind of disagree on the idea that there's not going to be robots to do this stuff anytime soon because I come from the trade. I mean, I am working by trade. I build skyscrapers, bridges, stuff like that, right? That was my start when I was like 1920 and I did it for a number of years. And I got to tell you, a lot of these things are really not complicated at all, right? When you talk about come and fix a toilet or repairing a windmill, like it's the access is some of the hardest part of it. Like if I could pick any one of you motherfuckers and just put you in the spot and sit there and tell you what to do. I've been a boss for a long time too, and I can just tell you what to do. You could figure it out really easily. And it's something interesting that I'm looking out because I'm like, you know, we're, we're like Cavemen with this stuff, right? I don't know how much time you spend in New York or in any big cities. You see guys building a building. We, we're Cavemen. We're doing it the same way we did it 100 years ago. And nothing, nothing's really changed. But it's, it's, it's like very simple rudimentary stuff that I think some of these optimist robots or any of these types of things are going to be able to pick up on relatively quickly. Especially if you offered someone like me, somebody to train the fucking thing, I'd be, you know, I'd be happy to do it because it's incredibly dangerous, injury prone. Like, you know, there's a lot of things that people do that people probably shouldn't be doing. Like I don't think people should be driving, but most right, I don't think most people should be driving. But I guess we'll just sit here and we'll wait and we'll see what happens over the courts of the next couple years. But you know, yeah, that's it, man. Only fans, industries getting disrupted by these fake, these fake AI people. So my God, in in in a group chat, they know I'm into this, you know, like guys I grew up with and they're sending me and they're like, dude, is this? Is this a real girl? I'm like, no, it's not. But anyway, hope everyone's having a great day.
Jeff: Listen man, you didn't.
Speaker 6: Really.
Jeff: Ask me to comment, but I don't think we. Disagree really much at all. I think at the other day the market will decide. I have a view today that certain physical activities will be full slightly further out because I'm seeing the other stuff being disrupted right now. Like I talked to a kid with automated, their company is a construction company. He's a son of one of my buddies. I went to his wedding recently and I gave him the advice. We're sitting at the reception drinking expensive wine and, and you know, cooking Wagyu on a hot stone. And we, he was like, what what should I do? I'm like, dude, I'm in the invoicing car right now. I said, kid, pull your head out of your ass, use AI and and freaking change the way you do invoicing. Don't keep doing invoicing just because your general manager. General manager doesn't know how to use AI. But you're young. You can use these. Like really? I'm like, yeah, he took a week. He, he completely automated their entire invoicing department so well that the, the GM of the company contacted his dad and said your son like crushed it and your, his dad was so excited that he wants to turn that thing into its own company. He basically rewrote like a whole function of the company and took out a bunch of people and process in a week. And he came to me and he said, well, what should I, should I, should I do that? Should I create a company and said no, I said take the same AI program you just used and disrupt scheduling, disrupt permitting, disrupt procurement. They said like every single thing that you do in your business is going to you're going to be able to take up 10 or to $30 million revenue business probably with AI didn't ask what the profit, but he doesn't even know. The kid doesn't know because they don't share that with them. But it's probably like a 10% margin business or 15% margin.
Speaker 3: Construction, usually, yeah.
Jeff: Yeah. So 10/15 10:15 So what if, what if by using AI, you can take it to a 20% or 25% margin business? Well, now you just possibly double the value of the company because the multiple would go up significantly. You know, maybe it's a $20 million business and now it's a $40 million business because the margins are so much better. And so anyway, like this is happening, it's happening right now, but I don't see robot, you know, there may be a robot plumber, but I haven't had access to 1. I don't know anyone who's used one. And as you said, access is a problem. Like do you want to invite a robot into your home? If someone needs to bring the robot, the robot can't drive themselves here yet they can't let themselves in the front door yet it still needs to be told which toilet to go to. Or in a lot of cases, you know a lot of these home technicians, they need to be able to go in the attic, right, or into the basement. They need to be able to find the equipment and then they be be able to, to fix it and or remove it. And I'm just saying like you may be right that that's coming sooner than most people think, but it's not coming faster than the shit that's being automated right now because you have whole departments being ripped out of companies yesterday because of AI. And again, I I have not seen a robot plumber anywhere yet.
Speaker 3: No, no, absolutely right. In my own personal life, I recently had to get some affidavits done and I had some like accounting questions and I went right to grok with them, right? And after Grok, I went to my lawyer and I went to my account with them and Grok was absolutely right about all of them. And it's more than more than worth of 40 bucks a month at a cost or worth or whatever it is. So like, yes, it saved me $600.00 an hour on the phone with this one and then other time on the phone with that one. So you're right, it is already disrupting those. I just like my personal view is that like once those things, right? It's like the, what do you call it? The rate of expansion, I think, right, I think we're moving a little, a little bit quicker with that. And they're like once they once they do get the ball rolling, like once I can teach this thing how to drive itself. Once you get to, you know, you put it in a Tesla, it'll take itself to Mike's house. But once you once you get that going, I think that's that's going to snowball pretty, pretty quick because most things are just are just not complicated, right. Like I think people over complicate them, especially with like physical tasks and stuff like that. And they're like, I don't know how to do carpet read a fucking tape measure. That's really, that's really the gist of like most instructions, like learning how to read a tape measure. But I guess, I mean, we shall see. We shall see.
Jeff: Bitcoin trail. I'll take the.
Speaker 1: Floor for a little while.
Jeff: Well, hold on real quick. Bitcoin's been here. Bitcoin trail's been here for for quite a while waiting. So let me go to him first and then we can jump to you. Relentless. Yeah, I was just, I mean, I would agree a lot with Mike. I work actually, I'm not a professional investor like he is. I, I work in the AI field and it's actually giving me a unique seat kind of having invested in, you know, all the minors early on, but working in conversational AI. And I get sent articles from friends that aren't in the industry about how AI is a bubble and is it risky to invest. And a lot of the articles are relating to the.com bubble, which I don't even think is comparable because to Mike's point.
Speaker 6: If you take.
Jeff: A, you know, a 19 year old kid and he can deploy software, you know, in an entire company and disrupt an entire division. That is happening times 5000, right In the days you used to have a lot of smart entrepreneurs that they had to go code everything themselves and while there was disruption, it just took a lot longer. The speed of AI is just far beyondanythinginthe.com bubble and why we have enormous CapEx spend. As he mentioned earlier, I don't think, right, everybody didn't really know how to use e-mail. There was just a lot of arguments. I don't think people who are at Fortune 5500 numbers even argue they know AI is the future. It's already here. They're using it in so many different ways. And so the speed is just far beyond anything we've seen previously. And yeah, job displacement to his point is just going to be enormous. In fact, right before I jumped on this space, I got a call from my veterinary office because we got to bring our dog back in. And it was a fully automated AI call reminding of every service. And I just talked to it, asked how long it would take. I mean, it was that is being deployed across every industry. So I don't think there will be losers. Undoubtedly, right. I mean, the the software deployers, there's going to be small companies who lose, but those who are the picks and shovels and and the underlying power, I think we all agree are going to continue to to succeed. So that's the only thing I have to come in. Awesome. Thanks for coming up. Read that list. We'll go to you and then Small Cap and then JWH.
Speaker 4: Hey guys, thanks for having me. I think something that I've thought about a lot is that a lot of times with technology, you have no idea what's going to happen, especially in 5-10 years. Like you can't even imagine the things that are going to be around in 5-10 years. Like we don't, we don't know. I think that's just like something that is interesting to to think about. And in terms of robotics, today Microsoft signed a big deal with RR. And I think it's, I think that that's going to be a theme for this year's. More and more companies are going to team up with robotic companies because that is going to be the future. And personally, I didn't take a position today in RR, but I'm going to because I think it's going to be one of those scenarios where you want to, you want to team up with the winners. And Microsoft, personally, I think it's Microsoft's going to be a winner based on their stock price. I mean, the market thinks they're going to be a winner also. It's gone up significantly over the last five years. And yeah, so yeah, I'm interested in RRI. Want to if anybody has any thoughts on the company, I'd like to hear about it. And yeah, another company that I was interested in also was EOS, the battery storage company. And I was wondering what Mike thinks of that theme. Yeah, anyways, thanks. Thanks guys.
Jeff: There's a guy named Moan Mon investor on here that I started following, I don't know, three months, six months ago, something like that who's been talking about RR for a while and, and it kind of didn't do much until I mean, obviously the Microsoft deal is huge. I haven't looked at the contract terms or what specifically has been done, but I mean the stocks up 44 percent or something today, still only a billion dollar, a little over a billion dollar market cap. I mean, it seems that set up in particular seems asymmetric because if you have a Microsoft contract, again, without looking at the contract and need to do that. But if, if Microsoft's willing to sign a contract with them at that market cap, then given how big robotics are, there's a good chance that they'll be a viable player. Which means even if they're not ultimately one of the big long term winners, it's likely that their their market cap would be higher at some point over the next five years than it is now. So again, without having done any work on it, it is interesting. And I had just thought about it a few weeks ago because I think mom posted about it and he was like, yeah, I'm still bullish on it. Obviously, he's been disappointing. So I'm concerned that it might not pan out. And then I think, you know, you get a deal like that. It's pretty validating. I've also seen people talk about EOSEA lot over the last six months. There's a bunch of these talks that all kind of become like Internet favorites, like X favorites. It was sort of like Palantir and Hims and Robin Hood like a few years ago. Those were, they're all kind of the same. And then more recently Rocket Lab and ASTS&EOSE. And so I think all those, they're all in great themes. I haven't done enough work on the details of like the space companies, for example, or the battery companies. I'm sure there are people who have done that. I don't think you can be an expert on everything. You can certainly scatter shot and like try to pick a couple winners in each one of these things. There's nothing wrong with that type of approach if you don't have time to specialize. I, I tend to specialize more because in order to control long term outcomes as a professional investor, I would rather hit for double s and triples that I know really well and are going to keep paying right versus swing at a bunch of potential home runs that where I don't have any edge and I don't know anything more than the market knows. And that's just an admission of like, hey, there's only so many things you can be great at as an individual independent operator in markets. And some people try to be, you want to be a generalist in the sense because you want to understand things in context, but you also need to be an expert on something if you want to find things that the market can't find and have enough conviction to hold them long enough for the market to validate them. So I've heard good things about all the companies you mentioned from various different people. I think the one you mentioned recently, the RR Rich Tech Robotics, I think it's probably maybe one of the more interesting ones just because when you have an inflection point like a hyperscaler doing business with you, it validates the technology to some degree and validates the potentially validates the business model sort of like what we've seen with iron such that it D risk the story and maybe gives you an opportunity for significant upside with with a more limited downside now that you have that relationship in the back.
Speaker 4: OK. Thanks, Mike.
Jeff: I can comment just really quickly too. I'm I'm very bullish on the battery space I've been pounding the table on it for quite some time have a position with EOS. I think it's a phenomenal company unlike a lot of the big battery players that are built for large scale deployments like supporting the grid supporting data centers, EOS, almost entire supply chain is in the United States, which is pretty rare. A lot of these companies rely on China and rare earth metals coming from overseas, which put them at a risk for risk to be hurt when there's trade wars, tariffs, so forth and so on. So I think E OS has a little bit of protection from that. I think they have a just launched a new battery, like a new model where they're not going to rely on these massive, massive boxes anymore. And given their contracts overseas in Europe, it's going to make shipping a ton easier for them. So I think they're going to be able to expand further than they already have within Europe. The management company is great, but they do tend to over promise a bit. So I would be careful when you when you listen to some of the earnings calls, think it's a phenomenal product. Battery power is immensely important. The entire industry needs to grow at A at a pretty big clip. Overall, I think another another company not financial advice that's worth looking at. So batteries play in a lot of different spaces. AI is going to produce EVs, evitals, robots, drones, wearables, gadgets, so forth and so on. One company I've got a pretty sizeable position in is Ampex. I'm sorry, Amprios Technologies AMPX is a ticker, not financial advice. They make the best batteries for drones and they have use cases for robotics as well as evitol. Definitely a company I would look checking, look at closer. I think they have a really, really good product. Really well positioned. With drones becoming more and more critical to US defense initiatives, I think sky is the limit for them. EOS I'd be cautioned about entering now. I don't know if this is a great entry point. It's ran pretty hard. I would look for a dip back into the 11 or $12.00 range if it gets back there. I think it's it's worth taking a 1% position roughly. Again, not financial advice, but I think Amprius is at least 80% undervalued at its current price right now it should be between 18 and $20.00. I think it should have been there last year. They are moving towards profitability. They've increased expansion lithium ion they just powered a drone that ran for like 72 straight days in the stratosphere, which is pretty remarkable yeah. I would I would check out those two I really like them, but I think the entire space is needs to grow at like 50% kegger in order to support all the byproducts that are going to come out. I listen to you. I think you pitched me on this before and you may even send me a note about it and I didn't buy it, but I like I like the the positioning on on the drones and them the battery technology and I don't have any exposure to the sector. So I just bought some shares in the after hours session as as I was listening to you as just a starter position, right small, but like that'll allow me to to watch it start watching it trade and maybe on any major dips, I'll add a lot more. Like if it gets below 10, that's where I'd be adding more aggressively. I just paid 1161. You should have told me that before I paid 1161. No, no, no. I mean, that's where I'd be adding aggressively. I think everything under 1213 bucks is worth adding, but it wouldn't be like a big position that I'd be staking at the moment. Don't worry, I'm not a child. I won't yell at you if it goes down. Like a lot of people on the Internet, I, I take no responsibility, but I've got a pretty sizable position, not probably your starter positions, probably 5 * 10 X what I have. But no, I mean, there's no, there's no liquidity in the after hours. There's no way that I could add more than you have. I just, I'm putting in thousand share lots, just trying to get someone to sell some to me, but it'll be easier tomorrow or like the next time there's a draw down. Yeah, just with Amprios or AMPX there, the revenues a bit lumpy right now because of their product mix. So their biggest concern over the past year was their gross margins. They were like -167% and they move from that to like profitable gross margins within 12 months, which I think is extremely bullish for them because that was the biggest thing holding them back. They've been like listed as a green partner for Amazon. They they do work with, I want to say it's best, but yeah, it's a, it's a really promising company. It's teeny tiny right now. Sky's the limit for them. Drones are incredibly important. 90% of the batteries today come from China. the US military has mandated that we can't use Chinese batteries for military operations any longer. And you can obviously make that for obvious reasons. Plus you have the tariff stuff. I mean, it's just buying American made right now, especially for that is at an all time premium and it's extremely imperative. And I, I just, there's too much fuel for that fire to, to not take a stab at it, in my opinion. So sorry, I went on a little bit of a rant there. Relentless. I know you're asking Mike, but I've done quite a bit of research in the battery space. Those are two of my favorite. I can send you a list of other stocks that I have on my watch list or that I've owned that I think are worth looking at that show potential. But just just remember right, batteries are it's not a one size fit all. There's so many different ways in which batteries are going to be extremely important for AI growth that don't think because you own one that you you know there's no room for the other. Like you said, EOS and Amprius are both battery companies, but they play in completely different stratospheres.
Speaker 4: Yeah, yeah. No, I'll, I'll take the list for sure. And yeah, thanks for your inputs and yeah, I appreciate it.
Jeff: Yeah, no problem. Happy, happy to help. Small cap, we'll go to you and then JWH. Hey, what's up, guys? Thanks for having me on. Mike, I got a question for you in a little bit of a different sector focusing on real estate. I saw that you posted today that you added to your, your open position and I I actually didn't know that you were you were in open. I'm happy to hear that. I, I took a starter on in open the day that Trump announced how he wanted to ban, you know, Wall Street from investing in single, single family homes. And so I guess I have a two-part question. It's basically your thesis on open cause I've never heard of, I've never heard you talk about it. And my second part is, you know, there's a lot going on in the, in the mortgage world right now. Like Trump is basically there's like a $200 billion housing push, federal funds and just incentives to boost affordable mortgages and like home construction. And I don't know if you saw a bill, Bill Poult, I'm, I'm not sure if I pronounced his name right. He said that he's going to match it by committing like the exact same same number billions through its foundation just to expand whole building and and mortgage relief. So I'm wondering.
Speaker 6: If.
Jeff: You know, if you have a view or what's your view on investing in mortgages right now to like whether it's M, you know, agency MBS or MBBETFS or V MB B, you know, I was looking at it and I think, you know, yields are pretty solid right now, like 4 1/2 to 5% on the agency mortgage-backed securities and. If Ratie's further, you're going to get decent price upside. So I'm wondering if you think that like Trump kind of injecting massive liquidity and capital into housing and mortgages could, could juice MBS returns or if maybe you see it as like triggering A refinance wave. So I was wondering just what you think of mortgages in general. And then I mean, literally last week I thought Trump kind of just told us without telling us to buy mortgages. And I don't want to miss a Trump signal because every time he tells you to buy something or buy the market, it's it rips the next day or the day after.
Speaker 1: So I just wanted your.
Speaker 4: Thoughts on that sector?
Jeff: That's not entirely true that Trump family's been saying, including his sons to be bullish on various things over the past 12 to 15 months. And actually most of them have been short term negative signals. So we've seen a lot of noise in the way a lot of assets are trading based on Trump activities and and largely like those things haven't followed through. So Trump has nothing to do with my thesis. I'm a long term bull on residential real estate structurally, because I think AI actually makes physical locations more valuable, something I've been thinking about a lot over the last few. I mean, really, since the pandemic, first, the pandemic allowed the most successful people in the economy to work from anywhere without any explanation, right? So like before that, I used to work from home anyway, but I'd have to explain to my board why I was in Jackson Hole for two months every summer, because someone would talk to me and they would tell my chairman of my board, Mike's in Jackson Hole for two months. And then I come back. He's like, what are you doing in Jackson Hole for two months? And now nobody cares, right? As long as you get your shit done and you deliver whatever results you sign up to deliver, it doesn't matter where you are. And no one, no one's ever going to ask you. And so it increased the value of residential real estate in different places than it used to be because they used to be highly concentrated in places where people had to work because they had to show up in an office to get paid that much money. And now you can get paid more in some cases by not living anywhere in particular. And then AI in particular, because there's so many experiences people are having online now, they don't feel real and people don't know when they're watching a video or interacting with somebody, whether it's a real experience or not. The value of physical spaces where you go meet someone in person is, is, is actually going up quite a bit. Like, you know, for example, like high end country clubs for the wealthy type of thing. Like those spaces are now increasingly more valuable because you're not sure what you're seeing when you're interacting with people in a digital space. So I, I think that even though we've been stalled out because of the combination of, of prices that are pretty high because the, the asset class has been financialized over the last 30-40 years, right? You got a lot of corporate buyers, you've got a lot of speculation, a lot of people using homes as effectively a store of value because they don't want to own gold and they don't trust money in a bank account and they don't believe in Bitcoin yet. And so they're using homes as a store of value. And then and then rates being too high because the Fed has been behind the curve and, and too political trying to fight the impacts of tariffs, which they thought would be inflationary, when in fact it's been the opposite. I mean, it's been a, the Fed's been a bit of a disaster candidly over the last six or nine months, but we are where we are. I still think like, again, this is my three 5-10 year view that residential real estate in the right markets, for example, domiciles that have low taxes, low property taxes, no state income taxes, lots of services relative to like the general ease of doing business in those areas. I can give you a list of some of those places. But I think those places, those places have a 20 or 30 year run here where they're actually going to become more valuable. Because in an AI world, you'll have more higher earning people who can live anywhere and are going to progressively decide to stop living somewhere simply because they lived there before and they're going to start moving to the place that actually optimizes their advantages. And it doesn't help that you have all these wealth taxes, billionaire taxes, etcetera, being thrown at people in places like California and that's obviously accelerating that migration. So I've been looking for different types of investments. I've made a number of real estate related investments in private companies, one of which was the services company that helps renters from large buildings be able to access various services. That's been a pretty successful investment and I, I was a seed investor and advisor there. I recently invested in a company that financializes home equity, right? It allows you to swap a minority stake in your home equity for an account with stock, bonds, Bitcoin, etcetera. So it's effectively like a partial liquidation, a partial realization of liquidity without actually having to sell your house and without a payment. So a home equity line, you take the home equity line, you invest in Bitcoin, for example, or stocks. Now you got a monthly payment, you got to pay back. And if you stop paying it, you could effectively be foreclosed on. And so we, we developed a product that's now been approved by the SEC to start being operated nationally and offered nationally that allows you to basically swap the equity while still living in the home and still controlling the majority of the home and basically all the decisions. So basically the only thing that changed is that if you were to sell your home in the future, the whoever provided that equity capital now owns X percent of of your home equity, but you still have the account, which hopefully is growing faster than the value of residential real estate. So these are just examples in the private market. So I'm exploring like new products, right, that allow consumers to do stuff. I'm exploring services in the public market. I think open door is one of the best examples of a of a turn around situation where you have new management, you have a new board, right. So you have new leadership, new board, you have some new ideas that are going to take advantage of this sort of evolving both market environment where rates are going to be coming down and prices are still too high for most people. And so you need alternative approaches to make that home ownership possible and and to ease the cost and expense and time of of doing transactions. And so you got to turn around in, in the right market at the right time, effectively where because I don't have any other exposure like that in my public portfolio, it, it is the most logical place for me to take a, a position. I've actually just been sort of looking for an opportunity to increase that position. And I, I love to do that on weakness because really nothing about my thesis has changed, but the price is a lot lower than it was two or three months ago. And so you'll see in my 13 F that comes out in the middle of February. But I actually took that position down quite a bit at the end of the year, a combination of just had the opportunity to do so, had some other positions that I wanted to to increase at that time. And I was sort of hoping and waiting for a moment like we're seeing now where the stock is trading like they're going to do an offering or it's going to go lower and it very well might go lower, might go to 550 or 525 or even below 5 again. But I think any of those prices would actually be buying opportunities and I'd be looking to maybe take the position over a million, maybe up to 2 million shares at the probably maximum if the opportunity presented itself in the next couple months. And I think the stock will do better and the company will do better a as they finally get to execute the strategy that the new team and the new board is developing. But also because of macro factors that are likely to make real estate, especially residential real estate related investments in the USA better proposition generally. And again, I'm investing along the spectrum from public company equity like Open door all the way to, to seed stage private companies that are doing new swap products for consumer home owners, right? The I like the whole spectrum of those ideas. And, and because of AII think that the sector, again, AI will disrupt some aspects of home ownership, but it won't it, it won't disrupt home ownership itself. There's no AI platform or program or AGI or anything that absolves human beings from the need to put a roof over their head and have a place to bathe and sleep and raise their kids. And I think the value in a post AI world actually accelerates to the upside. And it's, it's, it's been masked in the short term by high home prices, stagnant wages, high high mortgage prices, etcetera. But those are all temporary sort of macro factors. None of them are specifically structural. And I think home building can actually accelerate with the right set of regulations. And one of the reasons why like I like Lennar, I actually again, another position that I took up and then took down, took up again and then it ran at the beginning of this year and I took it down again. So I'm trying to find the right entry point on that for like a more long term investment. But I do think the home builders will probably do fine too, especially if we get a real economic cycle, which I expect to happen starting this year where we get the ISMPMI back over 50. We get short term rates starting to come down more aggressively. We get more visibility on like this post tariff, post immigration focused post, you know, like Venezuela and Greenland and all this noise geopolitically, right? Like we get to some steady state where people feel confident investing. I think we'll get a real cycle and that's where you'll see all these cyclical industries like home builders and and things like railroads, transportation sector materials. We're trying to see that commodities complexes come alive obviously significantly over the last year. And I think all these things are related, right. And I think if you think back to 2000 to kind of 2005, like coming back from the.com bubble and recovering from the NASDAQ getting, you know, punched in the face like real estate actually and like hard asset type businesses did really well in that environment. And I think we're sort of in an elongated version of that now from kind of 2002 to 2026, sorry, 2022 to 2026. Yeah, I, I completely agree with you. I, I put some cash like the last couple days into V, MB, B and, and MBB, the mortgage-backed security ETF. And, and real quick, I'm just one last question. I'm wondering what your thoughts are on the Fed coming, you know, after May, it seems that we're, it seems that we're going to like a less like a not independent Fed. That's kind of just where things are are moving towards and and I don't know, I'm wondering what your, your thoughts are on that because it just, it feels like the president is basically going to be the Fed. I'm over here laughing. I'm I'm chuckling my ball. I, I see you're a laughing emoji. Well, I mean, look, I, I just, I disagree with the premise, not from you, but just the broad trapfi premise that we believe that the Fed is actually independent. Like it's sort of like believing in the in the tooth fairy. Like if you're 4 years old and you want to believe in the tooth fairy because it's fun and tooth fairy leave something under your pillow after it takes the tooth. Like I think that's fairly harmless. I think in the context of adults, like 50 and 60 year old adult male investors who believe that, I think it's, it's pretty shameful. the Fed in no ways has been independent. They've, they've gone out of the way to prove recently that they're highly political in nature and that they're highly depended on and, and focused on what's best for the banking sector, which makes sense because the, the board members, the owners effectively of the Fed are banks. So like, of course they're going to advocate now it's better for them if they say it's for the benefit of the American people and the average person. And you can buy that if you want to. And if you think they wheel out a, a nice looking old white man with white hair or Gray hair who seems smart and seems like he cares about you, like a Mr. Rogers character, you might be able to believe that or want to convince yourself to believe that. But like the people they're talking to, or it's not a broad cross section of society. It's like they're friends who work at Goldman Sachs, at AP Morgan, right? And, and when those people have issues with the plumbing of the banking system, well, guess what? the Fed steps in to make sure that they don't have any problems, even if doing that actually causes asset prices to go up or inflation to stay higher or whatever. I mean, they were wrong about inflation being transitory in the 1st place. They're wrong now about tariffs being inflationary. They're, they're way behind the curve. And I, I suspect a lot of it is because of the sort of left-leaning liberal bias coming from a lot of these, these banker types, right? That the, the Jamie Dimon's of the world and that influence on the way the Fed thinks about the world. So no, the, the Fed is not independent and never has been independent. The, The funny thing and I, I'm not necessarily supportive of everything Trump does, but The funny thing about it is all he's doing when he's doing these shenanigans, he's revealing a truth that was there all along. It was always, it was, it was never independent and it was always political. And the fact that they tell you it isn't just like they say this is or isn't QE. You could just look at the thing and ask yourself, is it QE or not? It's fucking QEI. Don't care if you have some very technical, esoteric, asinine explanation for why it's not QE, because it is QE, right? And you can tell me, you can look me in the eyes and say I'm not political and I'm not independent, but I can look at your behavior and I can tell you that you are, that you aren't, right? And and that's what that's all Trump's doing. Everything he's doing is just revealing the man behind the curtain. Like the fact that the Fed should never have been trusted, never believed in. Like, if you're an investor and you believe the Fed, right, you should be aware of what the Fed's doing because they are a tectonic level force in markets. And so you don't want to be moving in opposition, but you don't want to actually believe everything they're telling you, right? And you certainly don't want to believe them when they're actively lying to you. And I think the Fed actively lies. Jawboning has a purpose. They, they're trying to, in some cases, talk down animal spirits, right? Like when, when, when things get too crazy and inflation's going up, up, they're hoping they don't have to use their policy tools. They just want to scare you out of investing. They want to scare you out of hiring. They want to scare the, the prices of goods down. And vice versa. When you have like a March of, of, of 2023, like with Silicon Valley Bank and Silvergate, they're going to come out and say everything's fine and we're going to protect all the depositors and we're going to bail out the system. And it's, it's not a bail out, but, but we're just going to make sure nobody loses money, which is a bail out, right? So they'll, they'll lie to you. An inflection point, They'll tell you it's not, it's it's not political. They'll tell you it's based on their independent assessment and it is not. So the premise is wrong, and therefore there's really nothing else to address in my opinion about that question. Did I lose everyone? Is penny ether still there? No, I was going to let the silence just build. I really like the awkwardness just building.
Speaker 4: I actually think what does everybody think of Rick Reader if he becomes the the new Fed chair? I think that would be ultimately really good for the market.
Jeff: I don't think it matters who it is to be honest, as long as they just bring rates down and juice the economy and let it run hot, which is the only person that Trump's going to allow in there. The only thing I'd say about reader, I called this out three 4-5 years ago when he was running like he's head of like asset allocation or something for, for BlackRock. Then he was saying positive things about Bitcoin well before BlackRock was aggressively moving in. I mean, people will forget this now, but BlackRock was working on things around Bitcoin as far back as like 2019-2020, 2021. And I think the FTX stuff, right? And the the three arrows and the grayscale shenanigans largely scared a lot of institutions out of their investment program that they were making at the time because they're like, wait a second. We need to figure out whether the underpinnings of this space are just fundamentally fraudulent, which I think is a reasonable thing to do after a bunch of these idiots blew themselves up during the last cycle. But, but I think if you would think back to that, he was pretty early. Like he, he he liked Bitcoin before Larry Fink liked Bitcoin. But Larry Fink is just a mouthpiece, right? Like most of the things that happened in BlackRock, he he doesn't do them right. So that's why when he talks about Bitcoin, he doesn't sound that great. Like he, he gets the high level concepts, but he didn't develop them. He's relatively late even within BlackRock and thinking about this stuff. And reader was was was way, way earlier and and believed in like Bitcoin as part of an asset allocation mindset, A broader asset allocation strategy like 3-4 five years ago. So I think I think in that sense, it's bullish. If you already have Besant who likes Bitcoin, showing up at pub key saying positive things about stable coins. And then you'd have a Fed chair who was bullish on Bitcoin before his employer was. I think that's a nice setup for a running hot type of scenario, which will dovetail nicely with the AI CapEx cycle, which even if you're a bear on it, that's fine. If you want to be a bear on it, it's Dom. You're going to lose a lot of money relative to people who are bullish right now. But if you want to be a bear on it, it's going to be still hard to model the slowdown in the CapEx devoted to that sector for the next two years because it's still accelerating now. And the need for power by itself require a significant additional investment at least in the near term. So even if you hit a wall at some point, that wall is probably as far out as like 2028 or 2029. And that's a nice window in there for descent Trump reader and sort of the cabal of people let Nick who are sort of pro Bitcoin, pro AI, right, pro stable coins to use all these levers that they're going to have access to at the same time to to juice the economy. And that'll eventually lead to probably a crash at some point, right. But it's not going to happen when the, when a lot of these things are just starting and that's where people are going to get it wrong. They're going to be like, well, this is going to crash. And you're not wrong. Like eventually everything crashes if it runs too hot. But you don't get crashes when you're still going from sort of cold, lukewarm to hot. Like that's actually the best time to invest. You want to capture the 3rd to kind of 8th inning of the move. And I think that's where we are. We're somewhere between the 3rd and the 8th inning of the move broadly and some of these mega trends. And so now is not the time you, you want to become more conservative, more defensive in positioning as that process progresses, but you don't want to become too defensive too early. You, you know, because you, you're at risk of missing the, the vast majority of the move. Like if I think back to the late 90s, for example, you were correct in saying in 1997 that there was a rational exuberance and, and Alan Greenspan did say that. And you're correct in saying that some of these Internet companies were overvalued. That was absolutely correct. And, and three years later, four years later, a lot of them blew up. The problem was, is that you still had two to three years left of the run and the vast majority and the big chunk of the returns were made in that final year and specifically in the final like 6 months. So you could be right intellectually about a lot of things, but if you get the positioning wrong because you don't understand that we're in the 3rd or 4th inning, not the 8th inning, then you're going to lose a lot of money relative to people who get them The, the, the correct timing on this. And of course, there's no way to get it perfectly correct, which is why you leg in and leg out, right? You don't. You don't go 100% on margin all in on something at any price. And you just try to build a mental model for where you are along that curve and then add and reduce accordingly. Awesome. Real quick for those who messaged me, I put all my battery list in the chat so feel free to take a look at it. You can message me on the side through DM if you if you want to chat about them. I was going to go to Penny. Penny had been waiting a while. I see they dropped. So Butcher will go to you first then George and if Penny joins they can they can chime in. Thanks Jeff, Mike, George, we haven't had the opportunity to speak before but welcome to our space. And I had a quick question. Mike or George, given your guys position in the market?
Speaker 3: 2.
Jeff: Items caught my eye the last two days, notably today, the anthropic raise where their post money valuation if they close is $20 billion. Funding round will be $350 billion, which is roughly a double since September. And then there's also the news on the equity raise from NVIDIA from yesterday, approximately $2 billion of funds injected into Core Weave, I think at a share price of roughly $87.00. How do you guys view those as far as the health of the market goes and when do you think? I'm just curious what you think is holding back some of the smaller Neo clouds, most notably the names that we hold from institutional perception where feels like the larger LMS are able to draw whatever money they want pretty easily right now. And most of them, whether it's open AI and Anthropic will have a IPO towards the end of the year, at least they're scheduled to. Yet the value doesn't seem to be flowing down to the smaller Co location or cloud players yet. Any thoughts on that's Appreciate it, thank you. I don't I don't buy the premise that it hasn't flown flown down. I mean, iron was AI was on the board, man, it was $100 million company. It was under $100 million in December of 2022. And now it's like approaching 20 billion. And I don't think it's, I mean nothing's happened yet. So the gap between consensus expectations for those companies because they are tainted by the Bitcoin path and what's actually going to happen. That is your alpha. So you want, you actually want people to misunderstand this. You want them to think that core weave is significantly more valuable than iron, right? You want them to think that, right? You want people to misunderstand how valuable anthropic is and say it's a bubble. It's maybe one of the best companies in the history of, of humankind. It's private and most people don't understand it yet. And there's no public mark, but there will be. And I said this many times over the last year, year and a half, like there won't be a a significant long term top in this sector until they dump some of these companies shares on our heads as retail investors. And they're not even close to doing that yet because the the early investors increasingly in these private companies are wanting to extract as much of the value before the IPO as possible. You know like we took Iron public, I joined the board the month before we took it public at a 1 1/2 billion dollar valuation and it proceeded to drop to 100 million because of the timing. You went out November of 2021 and then you had the 2022 sort of collapse in the queues and the NASDAQ. And in that environment you had Carvana down 98% and Netflix and Meta down almost 70% etcetera, right. And of course Iron was down 90 plus percent. It didn't change the long term opportunity set at all. The fundamental value and which is why I went to the board in December of October, November, December of 22 and said, hey, I want to buy 3 to 5 million shares at a dollar. And unfortunately I wasn't able to to do that at the time because we didn't have a structure yet where a board member could buy while we were operating, you know, an equity line of credit or an ATM. And so I wasn't able to buy until I bought 750,000 shares in the open market starting at like the 250 area. And by that point I'd already allocated some of those other funds elsewhere to Cipher and others. And so I wasn't able to take the 3 to 5 million share position. So I, I would argue that like you want the market to misunderstand irons value like it did in December of 22 and January 23. You want them to continue to misunderstand the value of iron cipher. And to the extent which being tainted by previous association with Bitcoin helps that to happen, that's actually where your money comes from. When you're much wealthier in two or three years, it's because the market got it wrong because of something that you uniquely understand, right? The average institutional investor still thinks Bitcoin is a scam. Like I was at the Country Club the other day and this guy who owns 14, like 20 to $50 million properties at this place all over the world, he was sitting there in the bar yelling at me that Bitcoin was a scam. And I was like, dude, like, you can have your own view. I know you're a very wealthy guy. And he told me five times in this, in this conversation that he knew Mark Zuckerberg personally, right? Like, so this is the type of guy you're dealing with. He was screaming his head off at me that freaking Mark Zuckerberg, that he knows Mark Zuckerberg and Bitcoin is a scam. No, I'm sure he's a nice guy and I'm sure we'll be friends in the long run and then in the sort of long arc of time. But this is the, this is the mindset of a lot of people, right? They're like Bitcoin still a scam to them, even really successful people with a lot of money and institutions. And that's why we're able to buy stocks that are invariably, if they exit, you're going to be worth multiples more than than where they are now. So I, I just think, look, this is the nature of being early. It was way harder and way more odd to talk about buying 3,000,000 shares of iron when it was a dollar because people were like, you're, you're insane. What the fuck is an iris energy, right? Or, or buying 7 million shares of cipher when it was still between 1:00 and 2:00 dollars. Like that looks insane because there was only 1,000,000 or 2 million shares of volume in the spring of 2023 when I was taking that position. And that's what you have to do. This is the easy, this is the easy stuff. Wait, so we don't like that irons trading between 75 and and, and 37 and it's painful that the market doesn't fully appreciate yet. Like what's going to be built here. Is that really? Because I actually think that's good. And I think any sort of annoyance about that or whining about that is, is needs to be purged from the body if you're going to be successful. You you, not you. But people in general need to get to the point that they don't feel anything about that you just rationally like a freaking because by the way, we're all going to be competing with robots and AIS that are faster and smarter than us, that more facts, more information. If you are too emotional, those robots will rip your eyeballs out. It'll rip your heart out of your body and you'll be left with nothing. So you'd be better to learn now that there's no emotions and investing that are useful and there are no, there's no crying in the casino. And if the market wants to undervalue systemically your core positions, then you add more. And you should put yourself in a position, in my view, to always be able to add more such that no matter what insane value the company is described in any given moment by the market, that as an active and enterprising participant in the market that you can take advantage of those mispricings. And so you spend less time. Not you. Again, I'm not, it's not a specific comment to the, to the most recent person asking the question, but you don't spend any time complaining about what the market gives you. You just eat what the market gives you, right? And so if the market wants to give you the wrong prices, then you know what to do. And a lot of time the answer is to do nothing right. And this is the hardest thing I, I see for people in the market that we're, we're just in the 3rd to 8th inning along a number of different arcs right now, whether it's rates or US residential real estate or AI or Bitcoin or the ISMPMI, right, or the 10 year yield, They're all on various, the dollar index, the DXY, right? They're all in various curves and they're all in certain innings of whatever cycle that they're in. And you can say 1's leading the other or one's not leading the other or the correlator, not correlator sort of doesn't matter. It's really about understanding holistically, like the environment writ large while you dissect each one of these individual factors. And what I'm seeing right now is that most of the things that actually matter for asset price return, say we're between the 3rd and the 7th inning, which means that this is the part of the cycle where if you position correctly, you just do nothing. And again, if you do anything, it's just take advantage of the if the market gives you insane prices, like if the market gives you silver at the price that it was at yesterday morning, you sell it. If the market gives you Bitcoin at a price that you know is below its fundamental value, you buy it. If the market gives you an insane price in Cor Weaver, Robin Hood, you sell it. And if the market gives you a really good price in a company like Cypher, you buy it. It's not rocket science and there's no complaining needed. There's no, you know, as long as you're not using options, it doesn't matter when it happens. It just matters that it eventually moves your direction. So anyway, that's my long winded way of answering and I mean, not even answer your question, but that's what I wanted to talk about. Thanks for the feedback, Mike. Thank you, George. Pleasure to have you. Welcome.
Speaker 1: OK, thanks. Yeah, I just thought I was listening on the space earlier. The reason I raised my hand there were someone was talking about open door and I have a very different point of view. I've been publicly short the stock for four months or so since September the 7th. I think it's grossly overvalued. You know, it's a lot. It's all hat and no cattle as far as I'm concerned. It's narrative driven. Yeah, I look at numbers of the fundamental guys, so people will call me a value investor. That's not right. But you know, liars figure but don't lie. And the numbers on open Door, everyone's, you know, hailing the company's, it's now a software company or whatever they say it's going to be. Well it's still a a house flipper, a asset heavy house flipper with low margins. I applaud them for changing their model because what they've done before wasn't clearly wasn't working, but it's going to take a long time. The stock is incredibly expensive, but people don't realize the main public promoter of the stock just financially illiterate. Yeah, they'll cite that it's only on one times revenues or 1 1/2 times revenues. Technically that's true, But if you want to make a comparable valuation to anything remotely comparable, be it Zillow or a broker like Compass or whatever, you really have to adjust for the account. Keep in mind that, you know, open door because they're a house flipper. They take possession of the house and they sell it. So let's just say their average house, I think it's like 400,000, something like this round up or so. They buy the house, you know, they'll, they'll, they'll buy it for whatever house worth 400,000. They make 20,000 or so per house, whatever the whatever the number is. But they're showing the full 400,000 in the revenue line, not the 20,000. And you know, whereas you look at these other companies, they're only showing their, their, their, their cuts. So for instance, the case of a real estate broker, yeah, they're not a broker. I get it. But I'm just trying to equalize the accounting. You know, a compass will only show you their Commission, which is 3%. Zillow only shows you their likewise. Let me give you a simple example so everyone can understand this. Imagine. So there's nothing wrong with this accounting. It's totally legal. It's not the issue. The issue is, you know, accounting is imperfect to attempt to try to accurately portray what's going on with the company, but you know, it has to be taken with care. So for instance, let's say you have two companies, Company A and Company B, and let's say they're both, I don't know, ticket resellers. You know, we're all enraged with the ridiculous fees that ticket brokers charge. So let's say company A sells a ticket for $100 and they charge a 10% Commission. They're just, they're just, they're not even a resell. They're just, it's like one of these online websites. They're just charging 10%, that's it. So they're going to show $10.00 of revenue. Then Company B, they actually go and they buy the tickets from somebody and they resell them. And so let's say they buy them for 10, they sell them for 110. They're going to show $110.00 of revenue and cost a good sold of 100. And so their, their net revenue is 10. So the two companies in, in, in terms of real underlying economics, what's going on, it's the same thing. The only difference is 1 never owned the ticket. They just, they're just, it was like a website. Let's say the other one actually physically owned it. But the reality is, leave the accounting aside for a second. The reality of it is both companies are making $10 off what in economic terms, basically the same trade. The difference is from an accounting standpoint, company A is going to show $10 in revenues. Company B is going to show $100 in revenues. So if you're looking at EV sales, EV to sales multiple these two companies, one's going to look ten 110th is expensive as the other one. This is what Eric Jackson does he you know, say, oh, look at look at open door. It's on, you know, 1 1/2 time sales. Look at the comparables. I mean, they're not great compals, but whatever. We can argue about whether Zillow's good cop or not or whether Carvato's good cop or not, but leave that aside for a second. Didn't get there. I think anyone common sense would say, well, wait a second, you know, it's you're right, George. We can't just use a simple gap EV to sales. You have to take into account the difference in the numbers and people don't do this. And so the sort of lazy, theoretically incorrect interpretation, people say open doors really cheap. No, it's not if you actually look at their net revenues. All right. And I'm driving a car, I don't know the numbers in front of me, but I think last year was 400 some odd million and revenues are going down. So let's call it 303 fifty this year. The stock has an enterprise, the company has an enterprise that I have 6 or 7 billion. If you if you adjust it and look at it that way to try and compare it to comparables, it's not a one or 1 1/2 times revenue, it's not 20 times revenues. So that's the first thing. That's probably the most important thing because you know, we can all say it's a good company, it's a bad company, it's good management, it's bad management. But you know, price and valuation is relevant. And because, you know, I can tell you a story about a company, a narrative, but in that narrative, it could be true whether the stocks on one time sales, ten time sales or 100 times sales. And so there's a fundamental category error here that most every investor's making and any any in most all institutions, by the way, there are no institutions in the stock really. I mean, leave, leave, leave JS reality, Shaw. These are these are like, you know, quad shops or making markets arbitrage. There are no real fundamental investors being open door. Because if you just take a cursory examination of the numbers, you'll see that it's that it's it's wildly overvalued. There's another way to look at this too. You can do another check. Open door again. I have the numbers in front of me driving a car. Roughly speaking, book book value is about a dollar a share, plus or minus. Can't remember if it's $0.80 or $1.20. It's some number like that. And the stock is, what, 5 3/4 now? So it's on like 556 times book value for a company, which still is a home footer. Now, hopefully, yeah, they'll transform something else in the future. But right here, right now, the revenues are from home flipping. OK, And stocks like that, you know, you say, OK, well what should that sell at? Yeah, you look at home builders, they're like, I don't know, 1 1/2, two times a book, you know, there are a couple other I think flippers around. There's something like around book value or thereabouts. So if we just say, OK, let's be general. So put on 2 * a book, books a dollar, you get $2.00. I put it on EV to sales. Multiple, I get a dollar, I put it on multiple book value, I get $2.00. And people say, well, you know, that's a that's old school. It's a new company. That's right. But the problem is let's see if they execute, if the plant works. It's if there's no reason to think that it is going to work. But let's just talk about that a little bit. Keith for boy has been very successful in many of his ventures. But I'd like to point out, you know, he and Eric Wu were the driving force. They, they, they've had it open door and they basically ran the company into the ground. So people say, well, Carrie Wheeler came along, blah, blah, blah. I'd like to point out the Eric Wu was CEO of the company until the end of 2022 and they already lost billions of dollars. Keep in mind that since inception, Open Door has never made a profit, never on a full fiscal year, never. There is accumulation of $4 billion of losses since the founding of the company and most of those losses were occurred, you know, before 2023 And actually, you know, you look at 2023, don't blame Kerry Wheeler. I mean, they'll even tell you it's a slow moving business. You know, what happened 23 was largely the guy was cast by already what had happened the way the company was set up by the end of 22 and Eric Lewis still there. So this company has never made money. They're ruthlessly competitive, low margin business. They say, yeah, we're going to go to services and mortgage title, all this other stuff. It sounds good, but there's nothing they haven't shown anything yet. I know things take time, but the market hasn't taken time. The stock went from at its low of $0.50 to thereabouts in the summer, got up like 10 bucks. It's now like 5 or three quarters. I think it's wildly overvalued. They've already told you they're not going to make money. The first, they're guiding towards the first break even quarter be the fourth quarter of this year. So this will be another loss here. So the first by their own numbers, not mine, the first year they're possible to make money is in 2027. And if you start playing with the numbers and start saying, OK, well, you know, let's spend. Let's talk about the cycle, Let's talk about the future. And you know, Eric Jackson goes to this whole rig and roll about what happens if the volumes go back to where they were. So let's say, OK, roll forward. We're not buying the stock, the base of 26 or 27, dream a little bit, you know, pencil in some volumes for 2829, put in some margins and then and then see what comes up. And the problem is on an EV to sales base, so expensive, can't get from here to there. So I would say even if they hit all their benchmarks that they're aspiring to, you know, maybe the stock's fairly priced, maybe all right, But in no way, shape or form is this thing worth, you know, anything of which should be more than it is certainly not worth 33 or 82 or 500. It's just, it's just craziness. And last thing I'll say and I'll stop, you know. People will say, wow, that's the past, George, You'll look at the past numbers. That's true. But as I was taught by my mentor, Peter Lynch, he studied a company's record and to get some idea of, of, of you know what past performance off with companies is a, is a, is a good guide to future, future returns. This company, as I said, has never ever made money. Keith or boy is a disaster when it comes to real estate. Tech pro. The history books are littered with tech pro trying to make money in real estate. Real estate's different from a lot of other things. It's, it's, there's asymmetrical information advantage to the, to the seller. And so I, I just think, you know, I wish him a lot of luck. Maybe it'll work. But I think the market has already discounted so far ahead. You know, here it is, you know, it's this home flipper selling 20 times revenues that it's more than in the price. So I, I only found out about the company in September. I was in a space and Eric Johnson came in, Eric Jackson came in and started talking about the company. And I was like, are you kidding me? And when I, when I hear people talk like that, the sort of evangelical, you know, it's not like, you know, I think the stock go 50 percent, 100%, whatever. No, no, this is going to go up 100X or whatever. I'm like to me that's a huge red flag. And so, you know, I've taken a lot of arrows on open door last few months. I've been on my own jihad against open door very publicly short. You know, I got interviewed by a bunch of people and been out there and I just by my lights, I wouldn't touch this thing with a barge pole. I think, you know, people throw macro narratives at, oh, bonds are going to rat like this, that and everything else. Actually a very different view about that as well. It may cut rates, but I think, you know, they control the short end. It's not going to help the long enter the country. I actually think the long bond yields going to go up. And so I just think from a micro standpoint, from a macro standpoint, I, I just don't see, I just don't see the value in the stock. And you know, all right, so I, you know, I found out about it in the sevens. It's now five or three quarters fine, whatever. But you know, the stock was, it got down a low of $0.50. It was, you know, it was a spike low. It was really like 1 or $2.00 for the longest time and I think that's where it's going back. So this is not a get rich quick short. This is an investment short. You know, I, I expect this year and who knows people date or price never come to the same at the same time. But even though stock's down 25% before I went short, I think it's been materially lower. So I set a mouthful there. If anyone has any questions, happy to answer them. But but I'm, I'm probably, you know, I have nothing good to say about open word. It is a four letter word. Thanks very much.
Jeff: I just want to say that I have always respected George. I think George is a great fundamental analyst. I think we had a conversation on spaces about Bitcoin as far back as like 2021. And I respect anybody in this market who wants to be short. A lot of the short only funds have been blown up because structurally, when you have these really low rates and too much liquidity for too long, in addition to inflation, you basically make it impossible for short sellers to survive because there's nothing to eat because the the prices of everything are sort of systematically pushed higher. So look, as a as a fellow practitioner in the markets, even if I disagree on open door, I do respect the gumption of anyone who wants to take any sort of single name equity short right now. And particularly on names where the narrative is so is so amplified and there's so many supporters, I don't like to be on the other side of those narratives unnecessarily. Like I actually don't disagree with that many of the things that George is saying. I think that is a pretty good summation of the bear case and a summation of some of the things that haven't worked and aren't working now. But I'm, I'm not sure that means that the stock is going to go back to 1 to $2.00. In fact, I think it's much more likely the stock goes to 20 at some point and I think it'll be really hard to hold. Technically it would be really hard to hold that short for a prolonged period if it if it makes a move like that, which is why I prefer to short indexes candidly. Like when I want to just hedge and I want to net out my exposures, like a really easy way to short the S&P. It's a positive carry trade because you cost you 20 bits or 10 bits to borrow it and you get paid like with with a broker like IBKR, you're getting paid 4.34 point 4% on cash. So you're making money shorting just on the carry. And then if you if it actually provides some reasonable downside protection grade. And also there's no idiosyncratic risk that like a company like Open door catches the the meme stock bid again at some point in the next two years and and goes on a major RIP. And again, some of those things could be for reasons that are non fundamental and they're not specific. They're not, they're not, they're not open door specific even like if the residential real estate market in the US heats up because of a number of factors, which I actually think is likely, then open door will be a beneficiary, even if they don't get the business model right. But if they also actually get the business model right. And, and Keith Robla does his job and the new CEO does his job and they actually change the culture and the focus, which is, which is to George's point is not a foregone inclusion and, and may fail. But if they do get it right and the macro is supportive, that's where you get these really sort of exponential type of outcomes. I'm not calling for 82. I personally don't think that 82 is likely anytime soon. It's possible, but not likely. But I do think it's $5.80. The asymmetry is is pretty skewed where you know, maybe you go back into the fours, maybe even threes possible. I think ones the twos is is less likely outside of a major recession or an environment where like the the queues would need to be down 20, thirty, 40% and the IWM would need to turn around after just breaking out after many years and go into a bear market. I think in order for that to happen because there isn't enough structurally wrong. There's nothing. There's nothing in the balance sheet, there's nothing in the company right now that's going to cause it to become so impaired that just on an idiosyncratic basis it would go to 1. I can actually see one in a macro LED major sell off or two. I can see that like a 2022 type of scenario where everything in tech and everything that's not profitable and everything that's sort of out of favor just gets shellacked for 12 months. But to me that that seems like the least likely outcome right now. It seems like given the macro for the way they're setting up, that actually the next 12 months is highly likely to be the period where they actually run it super hot and you get a blow off top, not a not a major downturn. So in, in that, in that instance, it's, it's the scenario where if open door starts to go back to 6789, whatever. Like I just would wonder if I was short, I'd wonder like at what point would I cover or would I just let it run me over? You know, my downside is capped, right? Because the worst that can happen is the stock goes to 0. As of today, I have, I think the as of my last 13 F reporting period, I had 25,000 shares. So going going into this year, I had 25,000 shares and I actually had 0 shares for for a couple weeks and then now I'm at 800,000 and most of those were purchased in the last two days. My average is like 590 something. I think it's it's looked as 597 area. So like, you know, worst case scenario the stock goes down to one or two and I change my mind and I sell it and I lose 3 or $4.00 a share on 800,000 shares. Like not fun, but also like totally survival and not a big deal. If it turns and it goes to 20 though, you know, you're, you're getting $14.00 a share on 800,000 shares. And that's that, that is a more material type of type of outcome. Like that would be the gain would be about 767 percent of my fund, which should be good, right? And, and so I'm more than happy to, to, and I'm doing the same thing with Strive, Like everybody hates Strive right now. And I totally get it, right. Like it's a, the Bitcoin treasury model is way out of favor. And even people who like Bitcoin hate it right now. And, and I get it. But if Bitcoin goes to 200,000 or 300,000, it will work again. It's not rocket science. It's like the question is only how likely do you think it is that it will do that? And my view, which is different than George's and different than a lot of other people's, is that over the next 10 or 15 years that there's something on the order of 90 plus percent chance that Bitcoin goes to $1,000,000 a coin over 10 or 15 years. And I know my probabilities are different than the option market. I don't think there are options yet for that far out. But even for options for a year or two out, like most people don't think those anything like that's going to happen anytime soon. And most traffic people still think Bitcoin is a scam. So of course they're going to be bearish on strive. And it trades like it looks like a penny stock. It trades like a penny stock. And, and so did old, so did cipher and iron three years ago. So I like those asymmetries, though I actually need George and other people to like, hate some of these ideas and in some cases be short because if they're occasionally when they're right, you actually need people to cover, you need people to capitulate the other direction. That's the only way you get these exponential type of returns. You need most people to be out of position and you need consensus expectations to be wrong. And if too many people like George liked some of these ideas, I I wouldn't be as interested because it's unlikely that you would have the same type of upside opportunity. George is 100% correct though. That open door could go to 1, he's 100% correct. It could go to two, it could go to zero and anything's possible. But if I take enough bets that look like open door over a period of time that are that are sized appropriately, I'm confident that the result of that is positive.
Speaker 2: So Mike just mentioned Strive. I just bought a bunch of Strive today. You can see my profile for that. I think you can spend a lot of time being complicated, but I think it's important to be very simple when investing. So what have we seen over the past few months? Gold, huge rally, Silver, huge rally, Copper, huge rally. And what are they? All commodities? And what is Bitcoin a commodity? So that's why I bought a bunch of ASST calls. Wanted to hear what people's thoughts, bull bear thoughts, anything.
Jeff: Well, I mean, I'd just be careful about using options for a company that's in in transition. I really like companies in transition personally, companies at various inflection points that I understand or at least believe I understand better than the market. I mean, this is a company that just did a acquisition that doubled the effectively doubled the size of their their balance sheet at the same time that they're doing a reverse split and some other things on this sort of capitalization structure. And so like, while it's in motion like that, it may take a while to kind of burn off some of the negativity and some of the overhang. But if Bitcoin again goes into price discovery, it's probably going to survive. It's probably going to going to surprise people more than MSTR because MSTR is at least by people that watch this market and understand Bitcoin like pretty well understood it. It is very likely to be the largest Bitcoin holder in the world over the next 10 years and the the largest issuer of of securities related to Bitcoin. And that's all well and good, but if the market already fully understands that, then how does the return of MSDR diverge from the return of Bitcoin itself? As the sort of constitution of their balance sheet largely is entirely Bitcoin. And as it gets bigger and bigger and bigger than in my view, the returns will converge with Bitcoin, which could be fine if you're, you're OK with 30% cagers or something like that. But I think the issue is just why, why take additional risk to buy a corporate holder of Bitcoin if you're effectively going to sort of approach the, the commodity return of the underlying asset that that company is accumulating? Because as their balance sheet gets bigger, it's just sort of the law of large numbers and gravity. And so the reason why I like Strive is, is, is because it's in transition because most people don't even understand fully what they've done so far. And they are competing in that preferred security market. You know, MSTRSSTRC at an effective 10% yield and, and you know, SATA is at an issued 12% yield, but but it's trading at a discount, slight discount trading like 3% ish below, you know, the, the par value. And so you're getting 12% plus a little bit there. And they have to do that because they're smaller. And you can sort of think of those numbers as like the cost of capital because as long as those companies can issue those securities and then go buy Bitcoin, as long as the Bitcoin returns over say 10 year, a 10 year. More than that cost of capital, then whether you like it or not, they can continue running that model. I think the issue is the smaller companies, right, don't have this fortress balance sheet. They don't have 10s of billions of dollars of a Bitcoin on the balance sheet into a Bitcoin falls 60% in a year, which it tends to do approximately every three or four years it falls at least 60%. Then the problem is the sequence of returns doesn't match the requirements of all the capital that you've issued because you've effectively you're on the hook for these payouts, which of course you can pause. But if you pause, that's going to, that's going to plummet the value of those securities and, and raise their cost to capital and effectively make it impossible for you to run that strategy. So it's a stopping the distributions of cash on those preferred securities is effectively the same thing as as death, because no one's going to trust those companies anymore. So when I, when I look at the space now, what I see is, OK, I could I go to MSTR, but I might as well just own Bitcoin with that, because I'm probably going to get a Bitcoin like return. If I want to try to swing a little harder it for a small portion of the portfolio where I'm looking for more leverage. Then one way to do it is to buy the company that has no securities on the balance sheet, right? That would require a bankruptcy filing, no securities on the balance sheet that would require that would predicate insolvency at some point. And so that means that precludes buying anything that has convertible notes or straight dad or any of these other structures, right, Bitcoin backed dad, etcetera. That could cause a liquidation event at some point in the future. And that that basically leaves, especially after they retire the similar that the convertible notes that were issued as part of that. And then they related cap call, they'll have a once again, a pristine balance sheet that basically only has equity, a little bit of warrants and then preferred. And so the common equity, you kind of get a much better sense of what the value in Bitcoin terms is likely to be along that curve because there there's no exploding situation that would would trigger any sort of liquidation of the Bitcoin or liquidation the whole company such that the equity value would go to zero. Yeah, that's what I'm thinking about it. And I think if you have enough time, I think the one thing you're doing by buying calls is you're taking away your, your secret weapon, which is duration. If you're able to wait long enough and, and, and we're right again, two things. One is you need to be able to wait long enough. And two, you need to be sure that Bitcoin's going higher. But if you're right and Bitcoin does go to 234500, I actually think it's virtually certain. But I look, I have a different view on this than most people in the market. But but if that happens and you have enough time, then you almost certainly will do well with that security. If you buy call options and the you know the the dealers decide that there are too many calls purchased in a certain area, then you may find additional pressure in addition on your position, but also in the market as those dealers are hedging and doing things to try to keep the price in a certain area to minimize their losses on the on the calls that they sold. So I would just keep that in mind when you, when you buy those call options on a stock like that, you're actually potentially making it harder, significantly harder to make money when the leverage is already actually embedded in the common equity. Because if Bitcoin goes to 200,000, you're going to get a call option like return on on the actual underlying equity without even needing to use calls.
Speaker 2: I thought George's hand was raised. Do you have something to add? Hey, George, quick question. Were you shorting iron as well?
Speaker 1: Hold on. I was, I was just trying to get on the mute button. So I guess I was going to ask Mike, I have no position in in Strive or any of the Neocloud guys. Mike, could you just give the napkin math on strive? Like, you know, it's a lot of moving parts. So for those of us just going to keep it simple, stupid, the napkin math like, you know, enterprise value, how many bitcoins they have, blah, blah, blah, blah, blah. I mean like, like micro strategy should have to figure out, OK, but there's so many parts on strive I haven't spent the brain power to figure out like, you know, the numbers, the leverage, the M NAV, all that kind of stuff. So what is the what's the napkin math on strive right now? I'm like.
Jeff: I mean the basics as far as I know right now is a little over 12,000 Bitcoin in the balance sheet. They just issued another tranche of preferred. So I think collectively now that's got to be 300 million or so. And I'm not even sure that they finalized the the number. I think I think they may have somebody can correct me if I'm wrong. And then they've got another at today's price, what is it 800,000,900 million of of common equity, something that range. And again, all those numbers change because of the acquisition of similar. But I'm not, I'm personally not betting on stride because of the current situation. So you know, you, you can tell me what you think of the current situation. I'd actually be interested in your view on that, just like I was interested in your view on open door. What I'm betting on is, is something a little bit different. I think irrespective of the the current set up in terms of the cap structure and the amount of preferred and the amount of Bitcoin. What I find most interesting is the caliber of the team and the related experience running bond portfolios and evaluating debt structures working for one of the major California endowments and then the team that he's positioning around him. Because I think there is something real in this preferred equity issuance game where it can create a sustainable long term business. Possibly because because I look at like my mom's retirement portfolio and I say, hey, right now I'd be lucky if I can find her some really safe looking equities that are kind of 5 or 6%, maybe 7% MLPS and tobacco. Like actually those MLPS and tobacco, I could buy EPD and Altria at an 8 or 9% yield at their low prices. But now because they perform well, like the effective yields are lower. And, and so I look at what Taylor and, and the tribe are doing and I look at those securities and I go, if I actually think that Bitcoin is going to be higher in five or ten years, then I actually think 12% or 10% yield is, is, is probably being viewed as too risky by the market. And it may be less risky than that and may actually be inappropriate as a small percentage of, for example, like if my mom has 80% of her portfolio and dividend equities in 20% Bitcoin, I might actually want to shift. 10% of that 80% into SATA or STRC, because even though there's more risk in those products relative to Altria equity or enterprise EPD equity or or Pepsi equity or whatever, the return is significant enough. Especially when you look at the balance sheet and you say, OK, there's enough cash on the balance sheet. For example, on MSTR case where they can actually pay, they can actually pay the, the, the yield, the, the Fiat yield on the securities for several years such that if you don't see a path in six, 1218 months for them to sustainably do that, you can always sell your position, right? And so you get the, the yield during that window that you hold it and then you get probably your money back. Hopefully if you, if you sell fast enough before there's any signs of distress in the balance sheet. Again, I don't think MSTR is going to have that issue, which is why their preferred securities are are priced at 10 on the yield and and SAT is priced effectively well above 12 because the, the current price is 97, not 100. And so I'm, I'm really like underwriting this again is a highly asymmetric situation where I really don't care too much candidly, like because the equity value is priced like it's never going to do anything right now. It's priced like it's just going to do nothing and the Bitcoin just going to sit there and it may not go bankrupt tomorrow, but it's not going to be a successful investment. And I think that if they nail the preferred security issuance that and if Bitcoin actually goes to 150 or 200 that that stock price can go up some multiple of bitcoins return, especially during that early part of that window because we're transitioning from a period where they just did an acquisition, right? They just issued their first preferred securities very recently. The market doesn't understand the stock at all. I am comfortable with the balance sheet that it's not a zero and short term. And so I can hold it for 12 or 24 months and wait to see as they execute. And I think again it's asymmetric where you got 79 laws of now $0.82 of downside and maybe you've got 5 to $10.00 of of upside in that window. And so as a 2% of portfolio long like I'll take that type of setup everyday, especially because I don't have anything else that looks like that. And so I don't really like, I don't really, you can look up all these things, you can use Tachi booty and get all the information. And I know you can, you know this and you don't need to do that. But like, I just don't care, right? Like that's, that's not part of my thesis. I'm, I met with the team multiple times and I asked them a lot of questions about what they were going to do. And I like the answers. And I talked to a lot of management teams. And a lot of times I don't like the answers and I don't like the people and I don't trust them. And that's why I joined the board of Iron when it was a small company because I, I had a sense after meeting with 40 teams in the Bitcoin mining space that they were the only team that could execute on the strategy the way they were describing. And my view is that the Strive team, after talking to a lot of the CE OS of the other Bitcoin treasury companies, is maybe the only team that has the right stuff to build into this market over the next 10 years. And that's sort of my time horizon, 5 to 10 years.
Speaker 1: So I, I, I get that. That makes sense, I guess. So let's assume that everything this thing is correct, that pans out the way you hope it pans out. That being said and the read across, OK, it's different, but there's a common principle here. Just as this is a case. If you know, you look at micro strategy, you'd want to know if I'm buying at a premium discount, whatever. And you want to describe value to their to their treasury function, fine, But as a starting place, you want to know is it selling it, you know, discount to that premium to that whatever. I mean, I think we would all agree, you'd agree if you're buying something like 3 times NAB, it's less interesting than, you know, buying at 8.8 of NAB. So even if I say, OK, fine, let's hope it does what you're saying it's going to do, I still think it's relevant to kind of get an idea of what the underlying valuation is, IE, you know, so let's say Bitcoin goes to one 5200. That's not my view, but let's just go with that, OK? Whether or not you're going to make, you know, double on, on, on Strive or 10 times on Strive will in part depend upon not just the treasury strategy, treasury function strategy, but also what's the starting place.
Jeff: Hey, George. Last time I looked, last time I looked like before the acquisition, it was like 3037% premium to the underlying holdings. I suspect that's declined a bit. It's probably 25 or 30 not but again, but again that I think Metaplanet is slightly lower, MSDR is lower and some of the other ones are negative, right. They're below 1. But again, I don't, I don't think it the, as long as the multiple reasons I wasn't willing to pay 4X for MSDR, I was selling. I sold MSDR 300, three, 5400, four, 5500. People remember this. I held a space the night before MSDR peaked and I said I sold, I sold more and I sold more the next morning. So your, your, your points make sense to me. But again, I don't care about as long as it's reasonable, like not two or three or five.
Speaker 1: Yeah, my, my, my, my. I guess what I'm saying is we, we both can be right. I respect what you're saying, but you can understand why more left brain dominant, you know lumbering boomer I'll self-described OK would want to know. Hey, Mike, you know, am I paying 75% in the 150% in the avenue to me it's.
Jeff: Irrelevant. You're paying, you're paying a 25 to 30% premium is my OK suspicion. It was as high, it was a lot higher. And there was exuberance in these companies and, and I was one of the only people warning people at scale on on this platform for a long period of time that that these these kid analysts and chart squigglers getting people to pile in to Bitcoin treasury companies near the peak of euphoria was going to end badly. And it did. But on the other side of the coin, I actually look at them now and I say, OK, everything you just said is correct. I don't even think you need to bet on a on a huge multiple expansion. But the Bitcoin price does most of the work because the the nature of the way this works is the the main drag that you're going to experience in these companies is at the early stages when bitcoins not performing and it hasn't performed. It's been an underperforming asset for at least 12 to 15 months. If you're running this strategy, because the strategy is entirely predicated on sustainable increase in the Bitcoin price. So what I tell people all the time is I do this, I do this specific investment with two or three percent of my capital Max. It's a very specific thing that I'm trying to do. I'm only doing it at times of very negative sentiment. And where I my personal view is that bitcoins price is undervalued and going up if you don't, not you. But if to someone who's listening, if you don't think Bitcoin is going to 150 or 200, it doesn't matter what what we think about AST or what the multiple is or whatever, it's not going to perform. It's going to be a shit stop as long as bitcoins below call IT10110. But when, when bitcoins above 120, if it gets there and you may believe it will or not, it doesn't really matter to me because the market's the market and it'll prove us either right or wrong over time. But if it does go to 1:20 or 1:30 or 1:50, AST is going to go completely ballistic. I'm very confident of that because it's sort of because of the way it's designed. It's kind of like hyper lever, but only further out along the curve. And the reason why I am confident this is because I made the same argument about the so-called Bitcoin miners at the bottom of the cycle. And I said, look, you may think that that these things should go up 1 to one with Bitcoin when Bitcoin goes from 16 to 40 or 40 to 80 or whatever. But that's not the way it's going to work. What's going to happen is at some point along the curve, maybe it's between 80 and 85, maybe it's between 90 and 115. These things will wake up because you finally get real convexity at certain points along the curve where the market either understands the idea or the economics actually supported. In this case, it was sort of both. But funny enough, the stocks that I was talking about doing it, they actually went up most when Bitcoin was going down. So they went up most when Bitcoin was going down between one O 5 and 100 and down between 1:20 and and 80 a couple times. And a lot of that was because they disconnected from the the Bitcoin narrative and economically disconnected because of AI. And then some of it is just that like the leverage and the sort of multiples you get on anything that's Bitcoin exposed doesn't always show up exactly when you think it does. Which is why I tell people not to use calls or anything that requires time as dimension. Because I think the only way you can be really successful with Bitcoin is if you take a 5 or 10 year view, any view that's shorter than that, you're going to just be wrong over and over again. You're going to miss a lot of the big moves up. You're going to be selling when you should be buying and etcetera, etcetera. And so for me, the, the ASST is the only like Bitcoin treasury company right now that I want to take a new position in because I don't think the balance sheet will allow it to go to zero. And then it gives you time to wait for Bitcoin to go to 150. And again, if bitcoins on at 1:50, I don't care what the price is. So all these people, these got to people that show up and they're like, Mike ASST didn't go up today and it didn't go up last week. And you, you're, you're wrong. You're a failed investor. And it's like, guys, I mean, last year alone just being right about the AI data center sector. Do you think I care that I'm down 500,000 on ASST or down $1,000,000 on a silver short? I couldn't care less. I'm focused on where's the next 100 million or 200 million going to come from over the next 12 months, not how, how I'm going to be down $500 on paper. I wish I was down more. I wish I was down more on AST, but I, I guess I just need to keep buying more shares. I'm at 5 point 5.4 now by the way. Million but.
Speaker 1: MM, Let me ask a question. So you're a thoughtful guy and I'm sure you, you know, in the, in the name of being, you know, rigorously honest with oneself, one always considers A null hypothesis, right? So like, you know, if somebody asked me like George, how could you be wrong? I'd open door, you know, I'd give an answer. OK, so let's not talk about strife. Let's just talk about Bitcoin, OK? If it's not like make up, make up a scenario.
Jeff: Hey, George, George, I don't, I don't want to be rude and just drop off My wife is I got two small kids. My wife, your kids are grown. But but I what I wanted to say before I go is this is a long conference, this Bitcoin side. We've done this before. We've had an hour conference. I'd love to chat with you again and thanks guys for having me, but I gotta go take care of my kids.
Speaker 2: So see you guys.
Speaker 1: Later, no problem. Take care, Take care, take care.
Speaker 2: Hey, George. So just to clarify, you weren't short iron at all?
Speaker 1: No, I have no position in the Neocloud companies. I've commented kind of negatively, but here's my question, all right? It's a question I have no listen, people always get confused about this. There's ones beliefs and there's one portfolio. They don't have to be the same thing. All right. So in other words, you may have a particular you may think, you know, legacy auto companies just make up the story. You may think legacy auto companies are toast. OK, Doesn't mean you have to be short them, OK. Or you may think Tesla's a great company. You don't have to be long, OK, So you can have your beliefs and you can have your positions, your portfolio and you know, you presumably you're invested in the things you have the highest conviction. OK. So Neoclouds, with that in mind, I don't have any cloud positions. Have there been long or short? I missed all the run up last year. That's fine. Here's what I observe. Let's talk about what's built into the price. Not well, I think it's going to go up or down or you think it's going to go up or down, but what is the market saying? But when you look at these companies, you know they're obviously impressive backlogs and that's all these contracts and people will model out, you know how many which are probably going to put out what the margins are going to be and try to put a forward valuation. That's fine. But when you look at it clearly on current business, on current book value, etcetera, etcetera, etcetera, the market's not buying those, the stock, those stocks on that basis, it's paying for the future. So we can say the market is priced in a lot already. So then you got to start a reverse engineer. What do you have to believe to make these stocks attractive? And what I stumble upon the bulls, you know, pencils and their own assumptions and margins and yadda, yadda, yadda. But, you know, there's execution risk. We a lot of these aren't fixed contracts. You know, costs are going all over the place. So, yeah, these could be great stocks, but also, I could see that they could fall fine on their face. And so I just have no position. I'm here. Reminds me, there's a great line from Dennis Gartman years ago. He was talking about one time he was on the Chicago border trade. He's with his buddy and they're watching, you know, prices go up and down. I was like something out of Eddie Murphy trading places. And, you know, so his partner turns to him. He turns to his party. He goes, what do you think? Because it was very volatile. The guy says, well, I'm flat and I'm nervous. I just don't know. All right, So, you know, the bulls in these stocks, they've been well rewarded. They've been great performers. I would just caution everyone to, you know, I'll have to do the work to get to the bottom of it. But a cursory fly over as I wasn't fortunate enough to buy these stocks. I didn't even know they existed a year ago. That was in now is now and I just don't know. I have I have no position. I'm kind of skeptically looking at them because, you know, a lot. I I think the bulls tend to ignore all things that could go wrong and that's kind of what gives me pause. So I don't know if that's an answer, but those are my thoughts. I don't. I don't have a position.
Speaker 2: No, I there's someone in the comments that that was saying how's, how's your iron short doing? So I just wanted to give you the opportunity.
Speaker 1: No, there's there's a lot of garbage. You know, one of the things I have a love hate relationship with X and I'm kind of transitioning off of X because there's just so many, I don't know, bad actors, misinformation, you know, I just it's it's not it's not nice. So I've never, I've never had a position on iron.
Speaker 2: Well, if you want to get up to speed we we cover them in mining mafia. I can send you an invite via direct method. Sure.
Speaker 1: Be happy to.
Speaker 2: Cool. Thanks for coming up. All right, Butcher, you have your your hand up.
Jeff: Yeah, just really quickly, George, you were asking about the NAV of Strive and it is actually below 1 now it's at.
Speaker 3: Point.
Jeff: 9 after the recent share drop off and I think what's also notable about strive versus micro strategy is with the acquisition of Semler, you do have a legacy business that's producing operational cash flow, whereas micro strategy is more reliant on those preferred to issuing preferred essentially to pay their interest, which is a whole other conversation. And, and with the background of someone like Vivak and Matt Cole, I do see an opportunity for them. It's only minor, like less than 1% of My Portfolio. But if there were two guys that on potentially acquiring other companies and creating a cash flow machine that legacy businesses where their cash flow is not exceeding the Bitcoin hurdle rate that they can interact into the treasury. That's kind of, I would say the bull case for Strive right now and you can get in for a discount to MF.
Speaker 2: Any other?
Speaker 1: Thoughts. Just curious. Thanks for all that information, but I'm just curious, why do you have confidence in Vivek Ramaswami's ability to create value? I mean, I know when they had the biotech thing, yada yada, but that was very controversial. Actually, if you go through that whole story, I think it makes him look pretty bad. So why do you have confidence? Boy, stop.
Jeff: Sorry.
Speaker 2: He's talking to us. He's talking to us, boys continue.
Jeff: I think someone whether it's Cole with his background and I believe it was helpers and then back simply from political power. Maybe he's not picking biotech stacks per SE, but if I think it's worth, especially with a trading to a discount to MNAB to fact that someone in his position.
Speaker 3: With the people, he's.
Jeff: At has the ability to see what is coming, whether it's legislatively or can he implement things in Ohio or so I it's more of a you can tell by my position sizing. I'm not going to die in a hill for stride yet quite frankly, that position would be iron for me. But to say though that it's, you know, trading at 3 or 4 * m NAV and it's bloated, that's not true either.
Speaker 1: I, you know, I, I, I think we're probably in agreement, like you don't want to spend a lot of time on our defendant. I don't want to spend a lot of time French through the numbers because it's just my cup of tea. It's not my cup of tea. And I, I just, you know, I, I get see like iron. That's great. So, you know, our time's probably better spent not talking about strive. Let's talk about things that any of us have more confidence in. That would be probably a better thing to better way of use of our time.
Jeff: Well, that's, that's a good segue, George. What you, I mean, I'm not familiar with your fund. I'm assuming that you're running a long short, you're not exclusively shorting. So if that's true, what are you long on currently and what's your? Why are you positioned accordingly?
Speaker 2: George, you're muted.
Speaker 1: Sorry about that. So thanks for the question. So you can go look at my feed. I've been very public about precious metals, gold at 2400. I think we're going through regime change. I think you can't own enough gold and precious metals. I think it's not the value of precious metals is going up, it's that the value of paper money is going down. People say, well, you know, and look and look, silver may have topped, I have no idea. But you know, so on a local basis, could silver be, you know, could silver crash back to $80 or levels that that hasn't been seen in two weeks? Of course it can. All right. But if you were saying to me, George, you know, and this is the time for me to think about, you know, let's say between now and the year end, we've got 11 months to run. I think this stuff's a lot higher at year end. I think, you know, people say, well, what will cause you to become less positive on gold and, and, and precious metals? You know, gold and silver and that's gold. Let's just stay with gold because silver is kind of the redheaded step step of the trial. All right, Let's just stop by gold. Gold will peak, in my opinion, when the value of paper money bottoms. Gold will peak when we have real interest rates at a more appropriate level. You know, so the incentives are set up for the central bankers and the politicians just keep spending more and more money, putting more and more money. And the only thing that's going to stop them is the market, in this case, the bond market, which colors my view also of bonds, which I'm not going to get back to open door. But one of the narratives that people run with is they expect the bond market to, you know, to, to, to for, for prices to go up, price yields to come down. That'll help the housing market. I, I categorically disagree with that. I think, I think yields are going up, not down. I can talk about that more if you want. So in any event, precious metals, I think it's just a question of. You've got the total value of all gold outstanding is about $32 trillion. Market cap of equities globally is about I think 120 trillion. You've got I think about 325 trillion of debt. So you're talking about 450 million of financial assets Fiat, not to mention, you know, currency in circulation against market cap of 32 trillion of gold. So gold is a store of value. It's a lifeboat. I suspect based on the conversations, the remarks of other people in this room. There are a lot of people. I don't have to tell them. They they well know the story because, you know, maybe they like Bitcoin instead. I do not share the options of Bitcoin. We can talk about that as well. But any rate, so yes, what do I own? For me it's been precious metals and pretty much nothing else. George I.
Jeff: Got a question for you on that. It's a little different marine. Do you have any exposure to rare earth metals?
Speaker 1: No. And to be honest with you, I missed it and I was doing well enough with well, you know, I don't consider platinum rare earth, but yeah, you know, I do own some platinum, but it's small compared to gold and silver. But so I'm not. I mean, I know the rare earth metals done incredibly well. I just, I don't have a view. I just don't know. Are they still interesting? I have no idea.
Jeff: I mean, I have some exposure to them. One I do like is United States Antimony, which also provides me some gold and silver exposure too. I'm sure that's probably come across your radar.
Speaker 1: Yeah, yeah, yeah. So anyway, it's precious metals. And then more recently I in there's AI have an interview up there, a YouTube video, whatever from December, mid-december. It was like one of these things I didn't want to do year end to hand in one of my picks. I hate those things. But I was being asked like, well, what should people buy? And I said, well, you still got to hack your portfolio, precious metals. But if you want to know what's new and what hasn't run and what I think the risk score is incredibly attractive. It's energy and the energy looks incredibly well situated. It's, you know, it's, it's, it's lagged the rest of the commodities complex in a meaningful way. If you look at the way commodity bull markets run, it's usually starts at precious metals, goes to industrial metals and then onto energy agriculture. And so you've got, you've got commodity cycle going going for you. You've also got a very bearish narrative around oil that the world's awash in oil overproduction, blah, blah, blah. That couldn't be further from the truth. If you actually look at oil consumption, I follow Mike Rothman, he's probably the senior ranking oil and energy house in the street. He counts barrels better than anyone else I know. I think oil consumption is running up 3 or 4% year on year globally and we're under investing. And as you all know, energy oil has a pretty big completion rate. If you don't drill more holes, you're going to lose 5% of your production, five, 6% of your production every year. So there has to be more drilling done and otherwise you're going to start seeing shortages appear eventually. So I think, I think oil's very undervalued. I mean, at least statistics now people say, well, you know, 1 oz silver, you can buy whatever it is, 2 barrels of oil. It's hilarious. They even, I think oil's very cheap. The world doesn't run despite whatever you want to say about or think about, you know, the whole green energy thing. We need hydrocarbons to, to, to, for the world to function. It's cheap. We're not investing enough. And you know, positioning and sentiment. The committed traders data is crazy. It's improved a little bit the last month. But you had speculators as as bearish on energy as they were basically at the COVID lows. I mean, they're just like, it was absurd. You had the hedgers who are always short because that's what they do. They're almost net flat. So positioning was totally the wrong way. Sentiment's totally the wrong way. Stocks are cheap. Stocks are still down a lot. And I think, yeah, they are going to run in hot. I agree with what Mike was saying before, and I think inevitably you're going to get higher oil prices. Why are prices not higher now? Nobody really knows. My best guess is that, you know, the administration's putting the screws into Saudi and the rest to keep the prices down ahead of the midterm. If you look at the gap between time spreads of oil crude, namely the, the, the gap between front contract and the back, it's at a level which would suggest much higher. I have a graph if anyone wants to know, just send me Adm, I'll send it to you. I think maybe if I get Mike Rothman's approval, I'll, I'll, I'll put it out. But the, the, the, the physical market is actually in reasonably good shape and what people have to understand, don't forget, it's just blew me away. The paper market for crude, the paper market for crude is 55 O 50 times the physical market. So you can count all the barrels of consumption you want. It's more important than that. It gets dwarfed by whether sentiments bullish or bearish or the hedge funds are long or short, you know, financial oil and it's been very negative the last few months. And so I think energy looks great. You know, I only, I don't think it really mad at me. It's commodity. So let's be honest, yeah, 1's got higher beta than the other one, and this one's more leverage than the other one. But you know, I had to make 3 picks and I wouldn't get too invested in the picks per SE. But I mentioned Schlumberger just because, you know, big cap money's going to go to the Schlumberger when the oil service starts to rise. I think, by the way, services have more torque than the integrated. So I, I tend to go there. It's like Schlumberger, Valaris, Tidewater, you know, XLA will do OK, XLP will do better. OH, will do even better. So my new thing and it's not consensus too, although I have to say it's it's laughable. So many people going back a few weeks ago, they're saying, oh, you know, energy, yeah, it's it's out of consensus trade. So many people say it's out of consensus, become consensus, but whatever, it's not owned. Nobody really cares. It's only like 2-3 percent of the S and Pi mean Christ, it's not even half of what NVIDIA is. So I don't know. I really like energy. So for me it's I think we are running a hot. I think it's a reflationary playbook 01 great thing. I urge everyone to run, not walk. Go to my feed. You will see with the with his approval from Gadcow, Louis Gad was one of the best global strategists I know. He put out a piece yesterday about the reflationary boom. It's a 3 pager. It's easy to read and I got his permission. It's payroll stuff. But he's a long dear friend of mine. He let me put it out publicly, you know, because it gives him good publicity. But if you want to know the case for sick goals and reflationary boom, go look at, go look, go look at that paper and sidebar. It also does mean I think rates are going up. Even if they cut short rates, I think long bond yields are going to go up, especially on topic more recently. You saw what's happened the last few days with JGBS and the end that whole thing and we're keep running these insane deficits. By the way. By the way, I don't spend more than the amount of time on macro because the end of it gets back to stocks. But here's a useless factoid for you. It's actually not so useless. This is all talk about the deficit coming down as a percentage of GDP. We're going to grow our way out of it, yadda yadda yadda. That's a laugh. I think the deficit spent at GDP was estimated last year. I think it 6.3%. Go read the IMF paper from a week or two ago. They're estimating 7.9% this year. So in a world where, you know, commies are going up, inflation's sticky, the dollar's weak, you know, the idea of buying a 10 year treasury bond, lending money to the government at 4.2% for 10 years, like that's crazy. That's just crazy. The long bond is just the long price. So that getting too Weimar crazy on you. You know, I can easily see bond yields going to five, possibly higher, but I would not. But you know, if you want to open door, fine, but I would strenuously disagree strenuously. This is the hail I will die on, you know, saying the bond yields are going to go down bond prices are going to go up. That's something I would not bet on. I would not bet on at all. You know, I have no bond position because there there are things to do out there that have more torque, but for choice, I think yields are going up. So to answer your question, it's precious metals, it's reflation, it's energy. I even I even go with my sub stack. I everyone should go look at my sub stack. It's free right now, at least free for now. Sorry, since I've given you guys so much, allow me to show for one second. I have a sub stack. It's growing like a weed the last few weeks. I started writing about a month ago. People like what I write. I wrote a buy report on Southwest Airlines, which is a really interesting story to get everyone do your own work. The Southwest, you know it's been dog relative to Delta United. They finally got a cost cutting plan in place in part because of the pressure coming from Elliot, the activist manager. The stock sells at 1/3 of EV. The sales is delta Ual but yeah, the profit marks is a fracture of delta UAL so there's a lot of self help here that's going to come into play. And so they're coming out with their earnings in the next week or two. I can't remember what day it is, maybe the 29th. Actually, I don't really remember. And I think the guidance for 26 and 27 was going to be interesting. I heard the, I heard the elevator pitch from someone at a conference a couple months ago. I thought it was a good story. And the reason I wrote up the Southwest as a bias, Jamie Baker, JP Morgan analyst who's the senior, sorry, senior airline analyst in the street. He previously had a sell on the stock with a $36 price target. He went to a double upgrade at 60. So for a guy for an analyst like that to flip from 36 to 60, they must have told him a few things. But I like the stocking before that happened. So I like Southwest, which is why, by the way, selectively, I think cyclicals. I think cyclicals very interesting. Even crappy industries that have sucked wind like packaging, chemicals, truckers, they're all starting to act better. The isms are turning up and you're seeing capacity reductions a lot of those industries. So, so if you look at the internals on the market, you're seeing the offense on the field, the the cyclicals are doing well, defenses are doing terribly. So I think selective cyclicals are interesting and that's why I mentioned Southwest Air as an example. Then last thing, and you got to allow me to plug this, I did 2 conferences last year, online conferences. 1 was macro and strategy. The other was stock picks. Everyone with stock picks. We're doing a stock picking. It's in my feed. We're doing a stock picking contest, stock picking presentation on March 11th. I selected 14 of the leading investors, professional investors out there, names you would all recognize, you know, Tavi Costa, for instance, Don Durrett, Gordon Johnson will probably come to the short story of Tesla again, you know, Adam Parker, Morgan Stanley X Morgan Stanley guy go down the list. Oh, Robert Mullen, MRA advisors started up over 100% last year. I stayed away from the name brand Macro talkers. These are all stock pickers. So it's going to be 14 guys, 14 men and women. Oh, I don't think we have a female on this panel. Everyone pitching a stock. Kind of like if you go to an ideas dinner and 20 minutes, you can't watch the whole thing. It's a lot to watch. I have to host the whole thing, but the replays will be available within 2448 hours. We did this last summer. We had 16 speakers. 10 of them are coming back. It's kind of like Survivor. The guys with the best picks are coming back. We had some unbelievable picks last year. One guy pitched the platinum ETF, which tripled. Another guy had, you know, Sprott, the resource oriented asset manager, which is fabulous. We had a nuclear stock, BWXT. We had some couple good shorts too. We had DoorDash and we had Fresh Pet. So it's longs and shorts and $99.99 dollars, that's all. And so you'll get to hear 1520 picks from some of the biggest names in the business. And unlike bloviating, macro bullshitting that goes on, these are actually going to be picks like, well, how do I make money on this? One of the one of my pet peeves when when I'm doing in a bigger way, I'm on Substack now. I want to help people make money. Listen, I'm wrong a lot of time, but I think I'm hard working. I'm honest, I'm not stupid. And so I'm bringing 14 of the smartest guys I know to give you their picks, eating their own cooking. It was a great conference. Last summer. I cut the price for $400 to $99.00 because I want it to be. I wanted to have a big conference again. It's all online, so it's on you. You won't find another conference like this, you know, for 99 bucks. Like what the hell, You can't go out to dinner for 99 bucks. The other thing I'm doing simultaneously, I am going to go to a paid Substack as well. They'll be they'll be stuck. I'm lagrating away from X. You're going to find the good stuff on Substack. Some will be free and it'll be a paywall stuff with the portfolio and you know, some of the really higher value added stuff. So anyway, I urge everyone to take a look at the conference. It's 99 bucks. It's you know, I'm not going to get rich on this. It's more like I'm sure we've all been to our share of, you know, stock idea dinners or whatever. This is better than any stock idea you'll ever go to. It's better than any investment conference you'll ever go to. And the reason why my conference was last year, I don't say this arrogantly. I really believe this. We're better than any conference that Morgan Stanley or Goldman Sachs can put on. The reason is real simple. You go to a conference put on by a big brokerage firm, they have conflicts of interest. You know, they don't always give it to you straight. And then even in that case, they're stuck with their own research team. And, you know, some of the analysts are great, so aren't so great. The prize for all those analysts are not to make money with the stock picks. They have a lot of other responsibilities or incentives like, you know, investment banking relationships, so on and so forth. This I'm not constrained to having stuck with any analysts. This is, you know, for lack of a better term, this is like George Noble's All Star team. These are the guys I talked to. These are the guys are selected because they're money makers. So a whole focus is on making money. And if they don't make money, they're not going to be invited back. We're going to review the picks from last time. And so I'm hoping to do this with enough support. We're going to do this quarterly. I got plenty of people. No, virtually no one turns me down. Everyone wants to pitch their names. And this one's the general stock picking thing. We'll probably do one on a sector. We'll do one on foreign stocks. And so I'm really hoping, you know, to talk about democratizing finance. I hate that word. But if you want to give people real ideas instead of, you know, guys with fake avatars and bullshitting about the GDP and the Fed and all this nonsense, how do I make money? How do I make money? I mean, we could argue all we want about GDP and interest rates, all that kind of stuff. Like, OK, well, how do I make money out of that? Let's say you thought interest rates were going to go down. Just as an example, Do I buy open door? Do I buy bonds? Do I buy gold? Do I do? Do I short the dollar? Like, what's the best instrument? OK, I happen to personally think if you heard me earlier, you know, you might have the might. And we've all done this before. The worst thing is you got the right idea. Oh, I think rates are going down. Let's say that's right or wrong. OK, whatever. Let's assume they are going down. You pick the wrong instrument and you buy open door. Well, it turns out if I'm right about open being overvalued, even if even if rates go down, you know, if you just allow that my scenario is right, you know, you could have rates go down an open door. You're not going to make any money, you know, or maybe you buy housing stocks. Maybe housing stocks are much more attractive than open door. Maybe you short the dollar, maybe you buy gold, maybe you buy bonds. I don't know, short any of the oak or blowing. So the point of this is it's, it's, it's less macro bullshitting, I think, I think Fed talk, it's like sports talk radio. It's a huge time suck. It's a waste of time. How do I make money? I mean, I worked at Fidelity, you know, people just didn't have time for you always say he spends 5 or 10 minutes. You think like the economy, all that's about stocks. It's stocks, stocks, stocks. And it's not the market. It's a market of stocks. You know, let's be a look at this, man. I'm on a roll and I'm getting excited. I'm enthusiastic, you know, the last few years, you know, if you didn't know in the Mac 7, good luck with the rest of the market. You didn't make any money. All right. And so it's a market of stocks. It could be a scenario where, you know, what if I'm right about energy stocks and precious metals, you're going to kill it. And it could be that the tech stocks don't do anything this year. Maybe they even go down. So we could bullshit about the market and and and Peter would always say, oh, anyone can make money, you know, trying to call the market, but that is a that, that, that, that that is a fool's errand. It's stocks. Know what you own. All right, so I'm telling you, I could be wrong on Southwest Airlines. I think it's going up. I could be wrong on open door. I think it's going down. I can, by the way, Tesla, I have to talk about it because people said, George, you got to think for Elon Musk, you got TDs. No, I don't, but you know what Trump said, you got Elon syndrome. No, I don't leave personnel is out of it. I think in the in I was very public on this. It was just an article and business decider that came out the other day. Tesla's like the biggest, I believe I was quoted on this. I laid it all out. I've got Youtubes up there and the whole deal. I think Tesla is the biggest bubble in the history of stock market. It's a bubble at scale. There been stocks that have been more overpriced, but not anything that was worth $1.5 trillion. And so Tesla's coming out with their numbers tomorrow. I don't know what the stocks going to do because it's always about narrow and what Elon says this and everything else. But if you want to talk about fundamentals, I'm happy to open up that Pandora's box. But I probably said enough right now so you know.
Speaker 2: George, it's not a car company, it's a tech.
Speaker 1: Yeah, I know, I know, I know. Come on, man. I.
Jeff: Know. Come on.
Speaker 1: I know, I know. Only 87% of the revenues come from cars. I know. Shame on me. Sorry. Sorry about that. My bad, my bad.
Jeff: George, I do appreciate the insight in the Alpha. Appreciate you joining us. Hopefully you can stick around. It looks like we have might have a question for you. We are going to be wrapping things up after these last three speakers. So we we're going to go to Vinny, then we're going to go to Parsuk and then Matt.
Speaker 2: Yeah, thanks for having me up, George. Nice to meet you. I'm also a fellow precious metals guy. I recently rotated on my Bitcoin into gold and silver. I wanted to get your take. I wanted to get your take. What percentage of this gold and silver run up is due to industrial demand versus like people buying it as a hedge against uncertainty? Because, you know, I, I think that I think that there's an unprecedented demand for like, you know, gold and silver because of like these AI Dennison, they AI Dennis centers and semiconductors and chips and all that stuff and robotics. I do disagree with you on Tesla, though. I think they're going to be, they're basically a robotics company and they're going to release Optimus next year and they got a VS going on in Austin, But, oh, and I think that you blocked me. It might have been because I had bitcoins in my name last year. So. But yeah, that's my question, yeah.
Speaker 1: That's fair. By the way, I don't block anybody who likes Bitcoin. That's not the point. People I block, you know, it's funny. People say, oh, you block, people, you sense it. No, no, no. It's real simple. I'm old school. I believe in being polite and respectful, so any time comes up someone comes with ad hominem or profanity or you're a boomer or you're a fucking idiot, whatever. You know, have fun staying poor. That type of horseshit. You want to have a discussion, I'm here. I like I actually like listening to people who disagree with me because I learned something. I stress test my own assumptions. So all the so I will unblock you. Who was it said that I will unblock you? Is that low speaker? Who?
Speaker 2: Oh, that was that was Vinnie gold and silver all.
Speaker 1: Right Vinnie, I'm going to unblock you. OK, so peace. So anyway, I'm unblocking you right now. So anyway, so to answer all right, you're unblocked. So to answer your question, the the goal I think has anything to do with the industrial domain. I think it's all just store value stuff because gold started going, Bob Balu, from early 22 when we had the whole Russian embargo thing. And you look at everything that's going on from Drew political standpoint, the way we're, you know, conducting monetary policy and the tariffs and all this stuff, we're doing everything. And people, the rest of the world's now coming to understand that maybe they can't trust the US dollar, that, you know, their money's not safe in dollars. And so I think that's really to do with the credibility of the Fed and irresponsible monetary and fiscal policy. Silver, I understand, yes, there's an industrial aspect to it particular I know with solar it's a huge deal. And the thing about the Chinese, you know, they've got to buy a lot of silver for all their solar stuff. By the way, by the way, this is mind boggling. Like there's so much smarter than we are. At least they got their act together. They added, they added not total capacity, but they added their increase in solar capacity last year, just in one year. The increase the capacity they built is more the entire installed capacity of solar in the United States. So they figured out they gotta do solar and you need silver for solar and blah, blah, blah. So they're kind of like a forced buyer. They have to buy. Now, having said all that, you know, again, I have no idea what direction the next $30.00 of silver's going to be. Could be up, could be down, I don't know. But what I do know, what I do believe is the year that's going to be much higher. And therefore, if you do go buy silver today at 1:10 or wherever it is and it goes down to 80, don't panic because the problem is when it goes down, you know, I foam when we panic, we get weakly when it goes the wrong way. But more interesting than the metal, I think of the stocks, because the silver stocks, the mining stocks, the gold stocks, they don't reflect the current prices of the metals. And you're going to start seeing results of these companies come out in the next few weeks. And I think they're going to be Baba loop. People can be blown away by the numbers. So I think, I think, you know, even if silver and and gold prices were to stay flat this year, which I don't think is the case, I think these stocks go double from here. And like how high? Let's just talk about gold because gold is, you know, I think the silver market cap is like 8 trillion. Gold is 32 trillion. You know, gold, you know, how high could gold go? Nobody really knows. It's just like how high could Bitcoin go? Nobody really knows because you know, there's no, it's a store of value among other things. And you know, it doesn't, it's not a cash flowing asset. So, but here's a way to think about it. You know, if you look at silver, sorry, look at gold relative to money supply or gold relative to real disposable income or gold relative to the size of the economy, all this stuff. You start playing around with numbers and I put this out on my feed and if anyone's interested, just DM me. You know, you come up with numbers like 6008 thousand, 10,000. I mean, like gold, gold could be 8000. If you say to me, George, gold is going to be 8000 at the end of the year, up 60% from where it is now. Well, it's very easy. I'm not going to predict that. Everyone's got to do their own work. But like, that is not a stretch. That is not a stretch. So I just think the metal stocks where they are right now, the miners, even if, if, if, if the price appreciation's somewhat muted or pedestrian the rest of this year, I think there's huge upsides in these stocks. So I hope that answers your question.
Speaker 2: Yeah, it does. And I appreciate you sharing the your alpha for free. Do you have any like gold or mining like mining stocks that I should maybe look into? Because I hadn't really considered that.
Speaker 1: Yeah, You know what I would do if I were you? I mean, I don't, I mean, some of the names I really like are less liquid. It's not fair. You know, if I say, oh, buy this thing, it's got 300,000,500 million market cap. You know, I don't want to do that to people. So it honestly, to be, to be blunt about it, if you just bought the GDX or the GDXJ, this is the gold mining ETF and the gold mining ETF or the SIL, which is a silver ETF. I mean, Christ, GDX is up, I think 130%. Last year, some number like that, you know, gold was only up 60, only up 60. So, you know, there's plenty of torque in these things. If you say to me, well, George, you know, 130% is not enough. I wanted some kind of 10 XI, don't know you crypto guys like you want action. All right, Yeah, you can find some junior guys. You can find some junior guys are going to go up a lot more. But you know, I want to ask you a question right back at you. OK, So like I'm not the guy to give the Bitcoin story. Let's I know bit I'm going to leave crypto app. It's not Bitcoin right? And no one really knows. I mean it goes up, it goes down, it's got its own cycles. I mean I haven't heard anyone talk about the stock flow ratio lately or all this craziness, right? The narrow is always shifting. So you know, we can all spit balls to why it's not doing anything right now and I have my own reason. I want to bounce this off. You tell me what's wrong with this idea and then more importantly, tell me what you why you think golds are the bitcoins acting poorly. So you know, you look at it and people say it's store value, they'll say well, it's high beta tech stock, yadda yadda, yadda. OK, fine. The last few months, precious metals to the moon, Naz X on well, Bitcoin can't get out of its own way. Why that's true. Like if I had told you that, you know, tech was going to be where it was and gold's going to be at $5050 in double jeopardy, where is Bitcoin going to be? You know, Mike Alford and everybody else would have said 130 thousand 200,300 didn't happen. So you got to ask yourself what's going on here? I have a crazy theory goes as follows, I think, and you guys are younger than I am so you can give me an insight to this. But this is just the boomer in the room. I'm the oldest guy in this room. I guarantee you that. I'm 69, but I still got game. I think you can you can understand that and I try to understand what you crazy guys are thinking all the time. I'd always get the joke, but this is what it looks like to me, namely, you know, the people, you know, these people like Bitcoin and then crypto cause the juice, the action, the pin action. Well, seems to me a few things. One, you know, as we got the institutionalization of Bitcoin, which was initially held as a as, as a positive, it's actually a negative because it's resulted in a dampening of volatility. So, you know, Bitcoin trades and implied volats are much lower than it used to and it's become more mainstream. So the price becomes more tethered to like, normal price. It's all this crazy stuff that was going on before. Because mainstream institutions will intervene. When it goes up too much, they'll sell. When it goes down too much, they'll buy. So that's one point. Second point, there's been a proliferation of other ways to get action, even more action. The ODT options are going crazy. I'll have you know, I made minutes the other day. I just discovered online gambling. Yeah, me. I'm probably the last guy to face the plant to do this. Wow, this is awesome. You can blow yourself up in 30 seconds. Just unfazed or draftings, Right? And so I kind of look around and I'm like, you want action? Bitcoin does not have a monopoly on the action. Like Bitcoin needs to be high beta, high juice, not so much anymore. So I would actually argue, it seems to me that the climbing volatility in the price is a huge negative and it becomes a lot heavier. And therefore I'm not here to say Bitcoin is going to go down. I personally believe it is going to go down. But leave that aside. I'm kind of what I want to know is why that's so that's my idea. You know, Bitcoin is just like it's gone to sleep. I don't see what's really going to like. Let me ask you because you you're playing with some of the juice you own silver like you want action track all your hardcore D Jens out there. Why would you Bitcoin when you got silver or some of these other crazy things, right? Platinum. All right, it's like you want action, I'll give you action. OK, so Bitcoin is so yesterday. All right. So anyway, you catch my drift. So what do you think of my theory? And then more importantly, why do you think Bitcoin's been acting so poorly?
Speaker 2: Yeah, that's an interesting question. I think I think a lot of Ogs are just selling, right. A lot of people got into Bitcoin, you know, really early on with like a really low cost basis and you know, they see it run up to like 6 figures and it's like, well, you know, this is life changing money. So let me just offload some of this and and enjoy my life. I think that's a big part of it. So it's like a long, long consolidation phase. And as you probably know, right, you know, as the asset gets bigger, it takes a lot more capital to to go to go up. Yeah, those are some initial thoughts. Yeah. You know, I think as it matures, like you said, it's not going to be as volatile. So, you know, it's not going to be the Super exciting. But I think some of the properties of Bitcoin will still remain, right. Like, you know, there's the the finite supply. It's, you know, it's, you know, instant. Yeah. You know, it's digital, right? You know, the economy is becoming more and more digital. So, you know, I think it's still worth looking into. I guess I'd be curious to know why you think it's going to go down or what your thesis is in that in that front.
Speaker 1: So, so, so, so again, I mentioned earlier, this is my belief, My Portfolio, I have no position of Bitcoin, all right, to me, it's uninteresting, All right, could go up, could go down. I think it's going to go down, but it ain't going. It ain't going to be number go up. It ain't going to 10X again, OK? It's not even going to 150 in my view, All right? I just think it's boring, all right. And I think, I think Bitcoin is sort of matured. I think one, it's got many attributes and again, the narrative keeps shifting. One of them is a speculative asset. Well, it's lost some of that juice. Evolve's gone down, as you point out. You agree the market cap's much bigger, a lot more money to to push it. Also keep in mind a lot of it's technically oriented as well. You got a lot of overhead supply now, All right, you know one thing about one thing about silver or gold, who knows if it's going to go up or down. We don't know, right? But anyone who owns silver or gold has a profit. You don't have any bag holders out there. OK, You got a huge and forget about the Ogs that owned it from way back when. I'm not talking about them. They're the ones that were selling, but the democratization of finance. Anyone who bought Bitcoin last year's underwater. So you got a lot of bag holders. I eat overhead supply. So it's become heavy. I also think, you know, having been at Fidelity for so long and been in markets for 40 some odd years, we all know, we all, we all, come on, admit it or not, we all engage in FOMO, OK? It's human nature, OK. And by the way, by the way, I got a great statistic for you. You'll love this one. So back in the day when I was at Fidelity, Sir Peter Lynch, 12 years, I worked for him as a third research assistant. Magellan compounded 29% a year for 12 years, 29% a year. Brilliant. All right, He is. He is. There's a Matt, if there's a Matt Rushmore for investors, he's up there with Stan Druck, a million and Warren Buffett, Julian Robertson. OK, he's up there. All right. But here's the crazy thing. Here's what you don't know. That's a time way to return. That is, if you'd bought the fund and kept it, you made 29% KAGR. But if you look at a dollar weighted return. So in other words, FOMO wasn't just advantage. Now, FOMO existed back in the 80s. Yeah, I'm old. I'm real old. OK. They went and calculated and they looked to see when people put money into Magellan and when they took money out of Magellan and the average return on the dollar invested, the dollar weighted return. Drum roll, wait for it was not 29%, it was 7%. And you say, how could that be? They're piling in at the top and panicking at the bottom. All right, so we all do FOMO Bitcoin. You know, you can't get enough of it. You know, blah blah, blah tech stocks, you didn't get enough of it. Maybe now as a country and asshole comment, people are too pulled up on silver, whatever. So I think I'm negative on Bitcoin because it's proving like, you know, I think the people who own Bitcoin got to be looking and one thing is, OK, I'm a believer, blah, blah, blah, OK. The other side of that argument is, dude, you want store value, Store stores of value going through the roof looking for compressors, metals. Bitcoin can't, can't have its own way. OK. Oh, but it's a speck out of asset. OK, well, if tech was crashing, then maybe. No, no, tech's had a great year. OK, well, wait a second. And I think what's happening is you pointed out some of the original holders are cashing out. I also think Bitcoin benefited enormously from a tight structure type market where the holders, you know, you see all those things as a percentage of the wallets that own it, they're selling it, yadda, yadda. You've seen a lot more percentage of those guys selling now. And I think what's I think what's going to happen is I think like go back to FOMO comment. I think people are just going to kind of slowly just like open door in a way. You know, I was yelling about open door. I started in the 7th stock on it for like 9 or 10. No one's listening to me. OK, all right, 5 3/4 and chart looks terrible and people are going to oh, why should I buy open door when I can buy gold stocks or oil or something else, right? So I think people just got a tire of Bitcoin. They got to say enough and you know, it's the extent that, you know, I've never seen an asset. This is one of the problems I've had where I've been in so many Bitcoin spaces where the predominant topic is price. You know, it's like the same. It's price momentum. And so I just think, you know, momentum feeds on itself and it collapses on itself. And so I think Bitcoin proving it's not working when gold and silver are working, Bitcoin proving it's not working when tech stocks are going up and God forbid, I don't even want to get into what could go wrong with Bitcoin. Also also another wise guy comment. This is just you know, you observe a look as Yogi Berra once that you could observe a lot by watching. I'm sorry, the hair of my and I don't want to make I just want to make an observation. OK, I'm a fiercely independent voter. All right, So it's got nothing to do whether you like Trump, hate Trump, nothing to do with it, right? When you see the president of the United States showing coins and he's Mr. Pro Bitcoin, this, that and everything else. OK, that is run, do not walk as fast as you can away from that crowd. So I hope that helps. But that's kind of my it's maybe not logical. Maybe there's a lot of touchy feely stuff in there, but I think honestly, every story of that Bitcoin has been touchy feely. So that's my own opinion. I I just think the extent has been a lot of momentum. People in this thing. It ain't working anymore. And like you. Hey, look at you. I'm gonna use you. I'm gonna use you as an example on you. Why did you get rid of Bitcoin? Oh, because gold and silver. We're going up more. OK, So, so, so, so tell me why you got out of Bitcoin? And what do you think of my cockamamie fury?
Speaker 2: Well, I I just have one more question for you, George and then we can let the other speakers go, but.
Speaker 3: Is there a?
Speaker 2: Price that Bitcoin can go drop below that you will consider buying some.
Speaker 1: Every Yeah, but you know what, it's a moving target because let's say I said to you right now I'm just going to make up a number let's say I'm a buyer at 50,000, right. We don't know what the world looks like at 50,000. So it's it's not a static analysis, it's dynamic. It's just like you said to me, Georgia, what price would you sell your gold? Well, I told before, if they start running, I mean it's never going to happen, but if they had responsible monetary and fiscal policy, they Start Stop printing dollars like crazy. If peace broke out, you know, blah, blah, blah, blah, blah. Go through a whole bunch of reasons to what I would look for. So I can give you this the signs I would look for. I can't tell you what the price is. I have no idea. And you know, it may be in my view on gold and silver, you know, I don't want to say something hyperbolic like you can't own enough gold or, you know, whatever. Honestly, they're going to keep doing. I hate when don't you don't you hate when people say kind of be honest with you? No, tell me a lie instead. No, honestly, no a lot lyingly to you. Like when they they're going to keep printing more money and running more deficits because that's all they know how to do as long as they keep doing that. I mean, you could not have a better salesman for, for big for, for gold and silver than Donald J Trump and the US Fed. All right. It's like they're begging you to to buy precious metals. It's like those green little pieces of paper in your pocket. Again, it's not the gold and silver are going up. It's the value of that nonsense is going down. Like, why would you want to own that crap? It's confetti money. So you know, money. And then one thing about gold and silver, it enables you to step outside the financial system. It's it's an asset which doesn't represent somebody else's liability, as opposed to if you own the debt of somebody else or you own a stock on a company. Now, in theory, that's what Bitcoin is supposed to be as well, but Bitcoin is acting like dog do. So again, I'm not going to let you go. You've been throwing questions at me. Why did you make the trade? Why did you get out of gold and so sorry, get out of Bitcoin into gold and silver? And why do you think Bitcoin's acting so poorly?
Speaker 2: I already answered that, but I mean people don't care about what I think on here.
Speaker 3: They just want to be real, sorry.
Speaker 1: No, what was the answer? I'm sorry, I didn't catch that. What was the answer?
Speaker 2: Oh, you know, a lot of people, lot of OG selling, you know, consolidating and stuff. And you know, obviously, you know, people want to make money, right? So they're getting into these precious metals. So yeah, all makes sense. FOMO.
Speaker 1: There you go. All right. Hey I would love your questions and you are on block so there you go.
Jeff: All right, we're going to go to Parsuk, then Matt, Jlo and Mike and guys, we're not going to take any more speakers. What's up, guys? George, appreciate you, man. You're you're a smart dude. It's interesting to hear your perspective. You pretty much nailed it on what the ideas for Bitcoin going up. You just set it for gold, which is interesting. I mean, if the properties of Bitcoin are just a little bit better, especially if you've grown up with an iPad, you know, I'm a 34 year and kids these days, they know how code works and they know what unfairness.
Speaker 2: Is.
Jeff: And so Bitcoin's kind of like the most fair Ponzi that we've.
Speaker 4: Found so.
Speaker 2: I'm serious.
Speaker 1: I like that. I like that. Keep going.
Jeff: So right now there's kind of a ever since 2020, there's like a flight to new money. We, we don't know, like there's so much cash and bonds and gold now and we're all feeling around like, where can I stay for the next 10 years, right? So like there's clearly a flight and Bitcoin is it's.
Speaker 2: Kind of almost.
Jeff: Irresponsible. You're, you're playing with fire, George, by, by ignoring Bitcoin, I think, I mean, they're like the property of gold is great until you meet someone that's 20 years old and they go, but like I, I, I can't carry a gold bar. You know, everything is on an iPhone. And so like the world is just, I think changing like you're seeing it now. And so a $89,000 Bitcoin, like you said, the dollars are just going down. That's not Bitcoin going up.
Speaker 6: And so I think.
Jeff: Right now is almost like the the easiest time to get into Bitcoin. I I remember buying a full one at 3400 and I wasn't sure if it was going to go to 0, but it's not going to 0. So if it's not going to 0, it's probably going to go to like a lot more than it is now. But I guess that's my bowl case for Bitcoin. I'm in no rush because the the longer it's here, you know, I'm mining it, I stax them every day. The longer it's here, the the more wealthy we are when it goes up. So there's really no rush for most of.
Speaker 1: US right, let's be fair. Let's be fair. I have no position like for choice book a gun in my head. Do I have to be long or short I'd be short, but I just have no position to me it's just uninteresting. You know I just it's because I can see why I understand why I could go up. I hear all those arguments, but I also have my own negative arguments. So I look at I'm like, you know what? I have the right to not to not have a conclusion. So, you know, I just don't know.
Jeff: It sounds ignorant to say that Bitcoin's uninteresting because to most of us, it's the most interesting thing we've.
Speaker 1: All right, well, OK, hold on, hold on, hold on, hold on. Let's not seize on my words. Go go in the meeting by what I was saying, I don't have a strong conviction because I could see both cases and bear cases, right? So for me, it's like, you know, like just like you don't have to have it. You don't have to have an opinion on every asset. I just I have I see bullet points and bear points. So I just don't have AI, don't have a position.
Speaker 6: Well, you called.
Jeff: It uninteresting. So you don't think a finite digital asset that is mined by proof of work is?
Speaker 1: Interesting. OK, excuse me if you heard what I said. Strike that word. Uninteresting. OK. I don't have a conviction. All right? OK. Yeah. Is it interesting to think about? Yes, but is it interesting, uninteresting to me in terms of because I'm not I'm I'm conflicted. I can see it's uninteresting to me to have an investment conclusion right now because I can see bull points and bare points. All right. I hope that clarifies it.
Jeff: Yeah, you also said it was, it was not volatile enough, but you know, before it was, it was too volatile. So it's just interesting with you guys. It keeps switching.
Speaker 1: No, I'm, I'm not, I'm not switching anything. I think, I think the volatility is what made it so exciting for a lot of investors. And it's just like the prior speaker talked about, well, he sees more upside and gold and silver. I mean, he's basically following me saying it's like, you know, I want to go, I want to bet on the horse in the lead. So silver's the silver's the faster horse right now. So you know, I, I again, I don't, I'm not as close to Bitcoin and therefore we probably ignore everything I'm saying about Bitcoin. But from the standpoint of a track fight guy, all right, that's my thought process around. I haven't, I haven't been long. I haven't been short. You know, a few years ago I got lucky at short at the right time and then I overstate my welcome and it was wrong on Bitcoin. So you know, I I like to focus on things where I think I have an edge. I better understand it and to the you know, I studied it a lot, but I can just see both sides and you know, it's lies. Damn line statistics, you know, get a dollar for every person. You know, when Bitcoin 125,000 a few months ago, it's saying it's going to 2300. I mean they got an egg on their face. You know, flip side is anyone bought it years ago at 100 and they made a fortune. So I don't know. I, I just, I don't have, you know, I have other ways to make money. And right now it's precious metals for me.
Jeff: Understood. It's just interesting to hear the trash by guys be like it's it's not volatile enough one when you've like I recently like everyone I was talking to about it was like it's too volatile. So it's just interesting.
Speaker 1: Well, I mean, that's not an opinion, it's a fact. Look at the implied volatility. Just go, it's a number, it's not an opinion. Just look at the implied volatility, how it's been traded, so.
Jeff: Is now is it like a good currency to hold then?
Speaker 1: Excuse me?
Jeff: So is it now like a good?
Speaker 1: Currency in story. I, I, I don't know, I, I don't know. I mean, it depends, you know, if you like the long term story, fine, go ahead. It's just not my thing. It'd be like, you know, if I asked you, well, what do you think about biotech stocks? You're like, well, I don't know, I'm not really a biotech expert, OK? Like, so I, I just, I just, I, I guess I have more sympathy. Like I understand the bull case. So like, you know, a few years ago I went, you know, whatever and I just been, I was under, it's funny, I ran a lot of spaces early in the year and they were begging me to buy Bitcoin. I just said no, no, no. It was like, you know, 110 or whatever it was that here we are at 88 or whatever the price is. And I'm like, I, I don't know, I just, I'd rather spend the incremental hour analyzing out of gold stock or sell or silver stock or, or, or or or or or energy because I think I got or, or Southwest Airlines, you know, because that I can see, yeah, looks, there's no guarantees. Everything's risk reward and probabilities, right? For me, I can see more clearly the upside and the, and the likelihood of the upside as opposed to Bitcoin where I can see both sides. And to me, it's not clear how it's going to play out. Cool.
Jeff: Parsuk or parsun, The floor is yours, Sir. All right, we'll move on. Mike, you got your hand up.
Speaker 6: Yeah, I'll be quick. A couple things. So so the the way that silver was like it was sideways for like years, right. And then it's supposed to be like a hedge against inflation or at least a high understood metal when I started buying it. And then all of a sudden it just goes 150% parabolic, right. And if that's weird for a metal to do, right? And I'm thinking that because it's been papered over, there's more, there's there's calls on it on the actual metal. Is is that why that that does that?
Speaker 1: I mean, no one could explain in any great detail what's going on, but the commonly thought theories are, you know, the, and by the way, this has been proven actually in some of this, you know, the price of the metals were suppressed by the banks and blah, blah, blah. And there've been lawsuits. You know, G people are going to pay a huge fine this time and everything else. So there was manipulation, stroke, suppression of the prices. And then what's really happened, you got to go back to 2022 when we implemented the right, the embargo on the Russians after the whole Ukraine thing.
Speaker 2: So dumb.
Speaker 1: So you know, so, so you know if you're a if you're a Russian oligarch or media or.
Speaker 6: If you're anyone besides yeah.
Speaker 1: Hey, can you hear me or not?
Speaker 6: Sorry, yeah.
Speaker 1: OK, can you hear me? OK, fine. So the way we, we put, you know, the sanctions on, on, on a lot of the foreign, the Russian oligarchs, because the Ukraine situation, all of a sudden a lot of the other people, people typically would hold their money in dollars. You know, say you're a Chinese or you're a mid Eastern oil shake or whatever. All of a sudden it's like, oh, wait a second, we thought this rule of law in the US and our dollars are safe. But Oh my God, they could just steal them from us, put sanctions on them. So there a whole story started to emerge. But people say, well, you know what? We want to add our dollars. What can we put our money?
Speaker 6: Into right. So I'm going to land my plane. I'm sorry. No, go ahead.
Speaker 1: Go ahead, go ahead, go ahead.
Speaker 6: So basically what I see happening is the same manipulation that happened to silver happening to Bitcoin in a way like they're they're they're papering over it with ETFs and shit. And there's going to be it when it, when it, when it does eventually breakthrough that that whatever that zone is, it's going to like act aggressively like silver.
Speaker 1: Well, I, I don't know, I kind of view it the other way around. To me, Bitcoin was the thing that was manipulated up in the sense that, you know, there's no more incremental supply.
Speaker 6: Very. Yeah, that's, that's the theory, yeah.
Speaker 1: OK, OK, OK. And then so, you know, you know what's really hilarious about this? I'm listening to you talk to myself talk. I thought this earlier today. Everyone's freaking out over you know, Silver went from you know, 20 to 100 and yadda yadda yadda guys, you're the ultimate D Gen. crowd. OK, this is like compared to your average shit coin, this is nothing so.
Speaker 6: We don't. We don't shit.
Speaker 1: So what are we getting worked up about here? If this is just another coin, silver coin like no big deal, move on. Nothing to see here, move along.
Speaker 6: No, no. It's just, it's just interesting commodities in general or or.
Speaker 1: Yeah, yeah.
Speaker 6: Headed up.
Speaker 1: Number go up dude.
Speaker 6: Crashing up.
Jeff: All right, Lazarus, we're going to give you the last word and then we're going to wrap things up.
Speaker 2: Shoot, hey, thank you guys. Kind of caught me off guard. I was actually typing it up because I didn't think I would get a chance to speak. So thank you. But it was basically like a rebuttal to George Noble. I believe he made some great points and I think like I was never bullish Bitcoin and I'm still not. I'm not into the crypto thing with the layer of blockchains or whatever. But what I saw with Bitcoin and especially as the Marcos making all time highs, you saw like data center plays ripping and Bitcoin kind of made the top went down. And I believe the predominant theory is the four year cycle that people like front running, especially long term holders. And the other one was that a lot of long term holders are basically into like, you know, decentralized finance. You don't want the government involved, you want your cold storage. So when the government was basically passing these kind of stable coin acts, these I think clear the act is in the House or in the Senate. But basically the more government got involved, the less they wanted to be part of it. Maybe they moved into different coins or you know, some other off exchange, off exchange. But the point is, is these long term holders are selling and that selling is eventually going to end if it's coming from them. And once that happens, where's the selling pressure going to come from? So now you're kind of left with buying pressure and that's coming from institutions that's going to come from retail. And I believe he mentioned something about momentum and especially for something that Bitcoin that doesn't have fundamentals, you know, they're not going to announce they beat earnings or anything like that. Momentum plays a big role. And I think it's going to mean reverse, especially when you see stock market all time highs, you see even gold and silver ripping. And when people are making the argument that's fall dampening. I'm not sure how you could kind of use against Bitcoin when gold is kind of like a risk off asset and it's made a major move last year and even year to date and silver made even a bigger 1. So when you're looking at it like what kind of move can Bitcoin make if it truly takes on a risk on property, what momentum for it, especially going into midterms? And I know he kind of mentioned Donald Trump. You don't want to be involved with me coins, but he I think his son is into American American Bitcoin. His other one is like pumping Ethereum every few months. And then he has war liberty financial. So Trump has some incentive to kind of continue this crypto run going. And you know, you could think like crypto is all crap, but when the president of the United States wants it to go up, he's kind of gonna get it done and moving on. Like you're also seeing institutions adopting AUC brokerage, trading brokerages, Wealth managers have meant recommending like half a percentage allocation going up to 1234.
Speaker 6: Even I really believe.
Speaker 2: Yeah, even Vanguard capitulate and not like I'm looking kind of for the big thing is when your target retirement fund is gonna be taking it in. I think that's gonna be probably the biggest bowl case for Bitcoin. But the what I'm looking for right now is kind of that inflection point flip 'cause it is going down. And I think a lot of investors, even crypto investors are on the sidelines. You know, maybe they bought in a little bit. I kept falling and they're kind of like, OK, I don't want to buy a falling knife. Stocks are all time highs. There's other plays. You know, AI is a big theme. Even like precious metals are ripping and they're going to go for those momentum plays. So for me, I believe Bitcoin just kind of needs like a 1020% jump and that's when a lot of players are going to go back in, especially crypto players, they're going to start buying in. Once that happens, the mean reversions trade starts up and that's when momentum takes hold and that's when they're going to really RIP. And I think that's very likely to happen for 2026. And for me, like I'm the way I'm playing it is I've caused an I bid. So I'm not really looking for, you know, like a 10/20/30 percent gain for Bitcoin. I'm kind of looking maybe like minimum 150K plus by the end of the year. And the, so I'm playing that convexity level. And when you made the case for ball dampening, that really plays as a benefit for me 'cause now you're basically getting IV on the cheap when you're expecting a huge run up. So the market's giving you basically cheap call options on this. If you're making the case for vault, vault dampening. And especially when you saw that these moves and gold or silver even like stock market all time highs like I how are all these?
Speaker 6: Things Ath today.
Speaker 2: Yeah, it's pretty crazy. But when you're when you're looking at, I just don't know how we're going to have a market top without Bitcoin topping too. Like that's basically a bull case for Bitcoin. Like usually when you have a market top, you have euphoria for everything. And even when you look for 2021 like arc top, they think in like March or April somewhere beginning of the year, Bitcoin top 2 like hit down and then it had a run up again. So even if you believe like, you know, we're 8th, 9th inning, crypto has these major runs right at the end and it like happens like that, it happens finally and it happens, you know, it could happen worse than silver. So if you're kind of looking at silver and it's up like 50% year to date, what exactly is going to happen to Bitcoin? And if you like, you're already starting to see these kind of little cracks. Like if you look at Hyperliquid for example, today a thing was up like 10/15/20 percent yesterday, same thing. So that starts happening just for a few, you know, coins or tokens or decentralized exchanges and it starts flowing into Bitcoin. Like once the narrative flips from like why is Bitcoin down to like it's going up? I think that's it. You can't really change the narrative back. So for me, what I'm looking for is just the stock market that doesn't break so.
Speaker 6: Can I get one more thing into to your point when you're done?
Speaker 2: Go ahead. Sure.
Speaker 6: So I think that, so Treasury bonds were supposed to be risk off, right? But they're risk on. We all agree with that now, right? Like you, you, you don't want to put your money in that. So I think that Bitcoin is, it's, there's a confusing period, like we're still learning is the risk on, is the risk off? How's it going to act? No one knows.
Jeff: That's all.
Speaker 2: Yeah, but I like gold, I believe was risk off this whole like for a year.
Speaker 6: For 5005.
Speaker 2: Yeah. But like before that, like everyone bought gold to basically protect their assets. I believe for 2025 and like now 2026, it took on risk on properties. And if you're making the case like for gold for that, what happens with Bitcoin not only regains their properties, but basically takes on the properties of like the market where we've seen crazy moves we've seen in memory, we've seen in precious metals, we've seen it with AI names where like things could re rate almost instantly in a month or two. And Bitcoin like was always known as like a lever tech play or bet bet beta for the stock market. So for every gains that it could really run, especially for 2026. And I think one of the better ways to play it is on that convex move with call options for it. So you basically have like a predefined loss, but your upside doesn't have a cap. You actually get paid a lot more the higher it goes. So yeah, those are my thoughts. And this is coming from someone that was never a Bitcoin, you know, maxi bull, I thought still think a lot of crypto is trash. So for me to make this argument is a big U-turn for me. Yeah, I think that's pretty much it.
Speaker 6: Thanks for being objective.
Jeff: George, did you have any thoughts on that or is he still here? Doesn't look like it with that. Maibao, appreciate you helping us Co host. Always great having you. You know you're my favorite. Thank you to all the speakers. George, I know you're not here, but.
Speaker 6: They should do.
Jeff: Listen back, appreciate you coming up, always great hearing contrarian point of views. May not agree with all of them, but certainly refreshing and definitely appreciate the alpha you shared. And I think that's it for me guy. I'll give you the last word.
Speaker 2: Let's fucking go $100 soon. See you guys.
Speaker 1: The.
Speaker 4: The.
Jeff: The.
Speaker 6: The. The.
Speaker 1: The. The.
Speaker 4: The.
Speaker 3: The.
Speaker 1: The.
Speaker 4: The.
Speaker 2: Yo, nice clothes today. How you doing, Jeff?
Jeff: Doing well. That's why they call me Closenberg.
Speaker 2: Did I? I knew something was suspicious this morning. I thought I could feel it was strangely quiet this morning. It was like a four 5% morning pump and even the bulls were in disbelief. I was like, something's, something's not right here. The group chat was, you know, awfully on edge. People are like, I don't really trust this pump. And then that's when I knew when someone said that, I was like, hey, something big is about to happen. Either we're going to get an announcement or we're going to get a major pump we didn't get.
Jeff: I got a little worried though because we had that little double top and then we spiked down with Bitcoin and then Iron said fuck that shit.
Speaker 2: Yeah. It didn't mean to interrupt them, just no, no.
Jeff: It's all good.
Speaker 2: I'm excited too Bitcoins perking up. I don't want to we have Chad as a as a speaker. I don't want to keep him waiting too much He was he really wanted to share his thoughts on on Bitcoin mining in particular. So let Chime, let Chad chime in. Chad, what are your thoughts on Bitcoin mining?
Jeff: Look, core, core scientific open Pandora's box and showed people like what you can do in this sector. And so it triggered like a radical rethinking of the entire sector in terms of the latent optionality you have in this infrastructure. I think that's all healthy. I don't, I don't think there's any negativity at all that that in fact, it's, it's all positive, right? Because the more, the more that you can prove that there's real value to this infrastructure beyond the economics in that moment of, of mining Bitcoin, the more you can justify more CapEx exposure overall to the space, more, more investment. And it brings in a different group of investors. There's a whole group of investors. And this is what Core Scientific and Terra Wolf and some of these guys are playing to really well. It's this whole investor demographic that has no interest in Bitcoin, not because they're right necessarily about where Bitcoin's going, but because they just don't understand it. They don't like it. They think it's a commodity business. They think Bitcoin's too volatile, whatever, but they love selling, you know, AI compute, they think it's stickier, right? They they think it's dollar denominated, etcetera. I think in the long run, it's possible Bitcoin mining like over 5 or 10 years like dramatically outstrips AI compute provisioning in terms of its, its actual like net economics. It's possible, right? The jury's still out. We don't know how commoditized AI is going to get and we also don't know how high the Bitcoin price is going to go. But what, what is happening? The more you splinter the available power and we're, again, if we focus on power is the key gating factor, not not chips, because we know you can get more a six, we know you can get more GPUs, right? And, and while they're not infinite, there is some like finite limit to it. The, the, the power market is like, there's like a physical reality of like how much power you can get online in the short term. And so if you splinter that power from the current crop of Bitcoin miners who have secured a big chunk of that, especially like they punch heavier than their weight, right? Like in terms of their market caps, like $30 billion market cap for the sector, but they control more power than like much bigger industries from from a markup standpoint. And so if you splinter that and you start to devote some of it, which I think is the right strategy, by the way, I don't think you want to be all in AI because I think that's going to go through boom buys bus cycles, right? And then I wouldn't be all in on Bitcoin mining only because then you're totally at, you know, the hostage of the Bitcoin price. And so I think if you can blend it out, which is what people are doing, then you create more predictability in revenue, you're going to get higher multiples on those stocks. So I, I'm not a proponent of going all in either direction. What I'm a prone of is to figure out the right balance between these different revenue streams so you can build a real sustainable business that actually generates shareholder returns.
Speaker 2: Chad, I get more bullish every time you you say that. Jeff, what are your thoughts?
Jeff: Yeah, I was just going to ask Chad, You know, we had been kind of talking about we've seen these like little mini super cycles within AI. You know, first it was chips to start running. Now we're seeing memory going crazy. You have any predictions as to what you think the next little super cycle might be? Is it networking? Is it cooling? Like it's going to be one of these little sub sectors within AI? Oh, well, Chad didn't like my question, I think. I think he left.
Speaker 2: I think he had to take a call.
Jeff: Got it, Got it. Well, I will postpone my question then for Chad when he gets back.
Speaker 2: I'm sure he'll be back. Jeff, how are you feeling about the market? What do you think causes pump?
Jeff: I think pre earning by the rumor is a big part of it. You got the big hyperscalers reporting this week. Typically AI bulls are going to pump, pump the stocks and the stocks that are affiliated with them. I so I think that's part of it, right? Good earnings will hold it and send it further. Bad earnings are going to obviously crash it. So I think it's more, I think it's kind of a buy the rumor type thing and anticipation of good earnings for these big hyperscalers. The last last quarter, I think what 5 of the let's see here, Google had great earnings. Amazon reported really well. I want to say Microsoft was slightly up. I can't really, I can't remember Meta. Didn't Meta have a bad quarter? Most of them had a pretty good quarter is what I'm saying. Nvidia's had like gone on a run. Palantir continues to run and report, report well. So I think people are trying to get ahead of the curb and are pumping these AI stocks. That's my that's my perspective at least.
Speaker 2: You think it's going to be earnings or you think you think it's going to be deals announced that are going?
Jeff: To well, I think that too, right. I think they're just trying to get ahead of the curb, right. So I think the hyperscalers might Co announce some of these deals and given their track record of success over the last couple quarters, I think yeah, people are trying to get out ahead of it and not trying to buy the news, but by the rumor or by anticipation.
Speaker 2: So who's got earnings next?
Jeff: Well, let's see here tomorrow I it's split down the middle, right, I think. Let me look. I had it up on my phone earlier. Tomorrow is Microsoft, Meta, Tesla, ASML, and then Thursday is Apple, Apple and Friday. No one's reporting Friday, but yeah, those, I mean, so it's tomorrow and and Wednesday or what tomorrow and Thursday does.
Speaker 2: Amazon have the same earnings date as Iran.
Jeff: I believe that is true. Iran's the 5th now I I can double check.
Speaker 2: Simon's back. I think he wanted to answer your question regarding cycles. Chad, what are your thoughts on cycles?
Jeff: Did you hear the question? I wasn't sure if you caught a little bit.
Speaker 2: Go ahead, Simon.
Jeff: Yeah, I mean, absolutely. It's an institutionally driven cycle, not the part of why Bitcoin has sucked a lot of the air out of the room in terms of all coins. There's of course been a few small rallies and some meme coin stuff, but this is an institutional driven market. Very few institutions are interested in anything other than Bitcoin when they are. It's been Ethereum maybe a little bit and then maybe a little bit of Solana. And that's sort of it in terms of like large scale demand. And so it's concentrated things a bit. The focus on Bitcoin and the retail has largely been uninterested. Even at 100 Ki think a lot of us thought 100K would be a trigger point for bringing in more retail, but like search traffic hasn't really risen. There's sort of like a general apathy towards the sector, which I think paradoxically is quite bullish because from a positioning and sentiment standpoint, you love to see Bitcoin doing these very constructive moves higher and consolidating with very little euphoria. And so I, I think it's a different cycle. I think it could be elongated. That's kind of, in my view for, for a couple years now that that people may think the cycle will turn down on the same timeline as previous cycles and it may actually run further out. I think part of that is on the Bitcoin side at least is that Bitcoin is converged with AI at the energy layer such that the people providing the compute for for Bitcoin are also providing compute for AI. And that may stretch out the from a longevity standpoint, the cycle because you still have a ton of CapEx being deployed right now and you have CapEx coming in from third parties. Like we just saw right yesterday with the announcement after hours with, you know, not Stargate, but but South Bank, which is essentially Stargate at this point, you know, buying $50 million of cipher and a pipe at whatever it was 480 a share. Like that capital didn't exist at all for the Bitcoin sector last time. And I think that's just the tip of the iceberg, you know, relative to what might be coming over the next 12 months. If that continues and actually grows, then you could actually see Bitcoin, so-called Bitcoin miners running all the way out into 26 or even 27, which will probably stretch out the Bitcoin cycle, right? Because if you have a bunch of so-called Bitcoin miners generating revenue from AI, that stickier dollar denominated revenue that doesn't fall when Bitcoin falls and it's less sensitive to the just pure commodity price. Also, you have less people selling Bitcoin because everybody's following the micro strategy model where you know, they're they're borrowing using convertible notes and and doing whatever they can to not sell their daily production. A lot of the firms, right. And so I, I just think, I think people may be surprised, right? Like we may be, we may only be in the 3rd or 4th inning now. And, and if that's the case, then like a lot of the biggest moves and a lot of the like the excitement about the sector is still ahead of us. And I think that's already different from a time perspective. By this point in the last cycle, you knew that you were in a bull market that in fact like the mining bull market was almost over already the cycle. So like we're clearly we're either wrong, all of us about the value of large scale infrastructure, which I'm 99.8% certain is an incorrect view, or if we're right, then we're still very early in that upcycle. Chad, did you hear my question about AI and like the mini super cycles? I'm curious to get your prediction right. So like first, like at the very beginning of AI, we saw all the chips run. Right now we're seeing high memory man, or high memory band or high bandwidth memory. Sorry, HBM starting to run like crazy. I'm so I'm noticing like these little pockets are all taking their turns having like their own super cycle essentially. Do you have a prediction as to what you see next? Is it going to be like the equipment makers like ASML, AMAT claw? Do you do you foresee like networking taking it, you know, center stage next? Do you have any predictions for that? Wow, Chad hates me.
Speaker 2: I think he had another call. We have that Capone here. Capone, what are your thoughts? I guess people aren't bullish enough, Jeff.
Jeff: I was going to say I was. I was enthralled by that. That was exhilarating. I I couldn't believe the alpha he just delivered.
Speaker 2: Dude I don't think anything is priced in. We're, you know, we got the $60.00 with IRN with no news. You know, something tells me if we close 69 this week, we could hit triple digits next month February.
Jeff: So your personal opinion, do you think that IRN is going to wait until next week to announce something now?
Speaker 2: It could be and I.
Jeff: Did confirm they are aligned with Amazon as far as.
Speaker 2: Reporting it could be they could announce something this week, right. But on no news we we know we're seeing some huge pumps tomorrow could be very volatile, but I mean this week could be very volatile regardless. But I I think there could be announcement this week.
Jeff: Yeah, I hope so. I mean, Iron's kind of been on like a little bit of a Pogo stick the last week. I mean, it's just been very violent moves up and down. I would love just like kind of like AI mean I would love a violent move up. Don't get me wrong, that'd be my first choice, but I would, I would almost like appreciate just kind of like a, a slow melt up right now until earnings, you know, a little bit of stability instead of like 12% swings each way, unless it's just going to swing 12% up each day. That's fine too. But a slow melt up now would I think would be really, really nice and encouraging, show some stability, show that we can hold these, these prices. I mean, even in after hours, right? We're down like $0.40 almost. So, yeah, I mean that's that would be great news. I think obviously tomorrow is going to be big with the hyperscalers that are reporting if they miss earnings. I think that has a potential obviously to to send us down quite a bit and quite hard. I mean Microsoft, yeah, Microsoft Meta I think don't sleep on a SMLI think that's going to be a big teller, right. They're reporting pre market tomorrow, a good quarter for ASML almost. I mean you can't, ASML can't really have a good quarter without chip makers, right. So if they're having a good quarter, that means more chips are being made. That's very, very bullish for AI. So I think that's going to be a big indicator of what we're going to see.
Speaker 2: Dude, the anthropic news was major today. I think that was part of the reason for the bump.
Jeff: I didn't actually hear you want to fill me in on that.
Speaker 2: Are you serious?
Jeff: Are you talking about like them buying Amazon, buying the capacity? Is that what you're referring to?
Speaker 2: The the raise, the recent raise today.
Jeff: What did they get? No, I didn't see it. I've been a little bit off the grid today.
Speaker 2: Yeah. I mean, this was like major news, that $20 billion raise at a $350 billion evaluation.
Jeff: Oh wow, that's very impressive. Yeah, no, sorry, I've been off the grid today. I honestly didn't even open up my phone or my computer until 1:00. I was doing stuff with the dogs. I it was just one of those days. I was running a bunch of different errands and stuff. When you when we said or when you told me that we weren't going to be host hosting a spaces earlier today. I kind of took that time and did grown up.
Speaker 2: Well, yeah, nothing happened right until the Bulls.
Jeff: No, no, I wasn't, I wasn't saying that. I was just saying like I, I, I needed a day to like actually like be an adult. Like I had to go to the drugstore, I had to go grocery shop, like bullshit stuff, So not fun stuff. And then I was able to just sit and watch and rub one out to the price, price action of iron.
Speaker 2: Well, I'm glad you got a chance to go to the drugstore and fill up your ADHD medication because you're going to need it. I think February is going to be an exciting month. Yeah, I think this is, You know, all the stars are aligning. Anthropic essentially said investor demand is also insatiable, right? I mean they're easily raising 10s of billions for just the build out right? So.
Jeff: I'm more personally, I'm more bullish on Anthropic than I am on open AI. I'd like their their go to market strategy better targeting institutions. I've made the comment before, but like if you look at traditionally, if you look at like how enterprise solutions or let me rephrase this. So start with Dropbox, right? So Dropbox like hit the scene amazing everyone started using it. Great B2C product. They then try to pivot, they try to target enterprises and they failed massively at going from a consumer based product to an enterprise adopted solution. I think Anthropic starting in the enterprise is going to give them a huge leg up. I think it's much easier to create a, a consumer based product that started in enterprise than the other way around which Open AI is doing and starting at the consumer level and then eventually, well, they're doing it now, but it's not like a massive focus for them is, is going after the enterprise. I think once you start in the enterprise and you gain validation from them, it's much easier to go back down to the consumer level than go from the consumer level to the enterprise level. And Anthropic is getting a ton of traction with enterprises. So I love that business model. And additionally, I think something else that's overlooked is these enterprises are willing to pay them, you know, multi year contracts for their solution provides them a little bit more stability with from a revenue perspective than hoping that consumers are, you know, going to pay on a monthly basis or yearly basis that, you know, people's credit cards don't Max out. Like you have a lot more stability from a revenue perspective. I think, and that's why I'm I'm really, really, really bullish on Anthropic. I love open AI. I think it's a great product. I don't think they're going to have any trouble making it. I just personally like the go to market strategy for Anthropic a lot better than Open AI and I think they're obviously.
Speaker 2: The revenue, or at least the ARR, what did it do 9X for? Yeah, a billion to 9 billion.
Jeff: Yeah. And some of that you have to understand right when you're when you're dealing with enterprise type contracts. So if they signed A2 year deal, they're able to recognize that second year of revenue. If they did a three-year, you're typically don't recognize the third year of revenue right off the bat. So that could be part of it. But again, I think that provides them a lot more stability as well. I just I like that business model better. I think you are a little safer, right. You know your bills are going to be coming in for the next two years, typically with these larger enterprises, whereas consumers, you know, they could cut the cord at any given moment, you know, flip the Gemini flip to another one. Additionally, it's also going to provide stickiness, right? Something like this is going to stick within the enterprise. You're not going to just RIP out and replace an AI solution that's so integral to your day-to-day. Unless there is a massive need to or the solution is failing. I don't see the solution failing and I don't see anybody coming to the table with something so game changing that they're going to be willing to to give it up, right. It's also you're dealing with sensitive data too. That's two different companies now that are going to have your data. So it's just they're going to have a stranglehold here in the enterprise. I think. I think these companies that do adopt one solution or the other are going to be more prone to sticking with that solution too for for a long term basis. And I think that's that's phenomenal for Anthropic. Plus their balance sheet already is is 100 times better than Open AI. So yeah, I'm I'm.
Speaker 2: All right, let me ask you a question, Jeff. Let's pretend Anthropic is a public company today, all right? It's allegedly valued at $350 billion. Where can this go in three years?
Jeff: Trillion dollars.
Speaker 2: But that doesn't seem that bullish.
Jeff: I mean, it's not a 50X play. I know you only get really excited it about 50.
Speaker 2: X No, no, no. I'm just saying like for, for all this Phobo, right? Is that is that risk worth it?
Jeff: I mean, I think it, it depends your investment style, right? I mean, if you're only chasing the 20X gains, probably not. If you're looking for a an investment that is you know, going to three X / 3 years, which most people would foam at the mouth for absolutely look, you also have to understand when you go after enterprises, right? They're not typically adopted enterprise wide right? So Anthropic is going to have ample opportunity to spread its tentacles out throughout the enterprise and grow those existing customers. 34567810X right? Typically when you sell into an enterprise, you start off with one business segment, right? You do really well that business segment starts talking to other business segments and then you grow organically through cross sell initiatives. So you know, let's say every company is spending $1,000,000 with the Anthropic today, that easily could go to $3,000,000 in three years plus then you have the consumer business as well. So, yeah, I mean, I, I think long term like it's just going to be steady growth that is going to pay great, that's going to have great returns, right. I think Anthropic, if you were to invest in Anthropic, you'd, you'd not perform Buffett over the next three years on his, you know, 20% returns by a long shot. But I think it is a very worthwhile investment.
Speaker 6: I don't think he has.
Jeff: A volatile as a come up like iron, but I think I mean if you're shying away from a 3X return over three years, I mean to me that's kind of silly, right, obviously.
Speaker 2: No, I get it, I get it, I get it, I get it. But in this in this example, anthropic today, let's pretend it's a public company, right. So it will you know, if you were to compare it to some of the other neo cloud players that are still at the valuations they are today. I mean, do you, you know, where do you see the rest of the market going Well.
Jeff: Obviously, it's going to have to grow in in with it, right? I mean, this is, that's one like 1 notch on the belt, right? All these neo clouds are going to have to support all these varying companies like Anthropic, like Open open AI, like the French company Mistral, like the, the need for infrastructure is only going to, to increase tenfold, right? Especially as these solutions become more powerful, enterprises are going to demand more power. That's probably, they're probably going to be running it on Microsoft. That means hyperscalers are going to be demanding more. It's just going to. It's just going to increase it exponentially.
Speaker 2: Right. But now I'm talking about the investors, right, like you know, do you if Anthropic was public today and investors saw the opportunity to invest in it for AA3X potential in three years as opposed to some of the smaller, you know, top performing new clouds with a.
Jeff: Traffic, You're asking me one or the other?
Speaker 2: Yeah. I mean, I'm just saying like this is, you know, Slime earlier was saying we're in the second or third inning.
Jeff: No, and I agree with slime, right. I think the only the only difference is that you have to pick the right winner. I think there's fewer players in the anthropic space, right. See, it's a little bit safer of a bat versus there's 10/12/15 neoclouds technically now me and you know which one is, is, is gonna be the winner and is the right pick. But if you're on the fence, right and you're not 100% sold on iron or right, I mean, people are still buying core weave, unfortunately. I mean, people are interested in Nebius, people are interested in Cipher Galaxy is going to have a business, right? So I mean, like there's a lot of different players that are going to win. And I think it's going to be harder to identify the biggest winner versus right where it's kind of like Anthropic or open AI. I mean, Miss Stroll has like a a small portion of it. There could be new players that that come into space. Gemini is obviously going to be competing too. I just think there is there's less competition and a clear it's the the water isn't as murky. I preferred to invest in. I think if you have the balls for it, I think obviously the neoclouds are going to be the are going to return more if you pick the right ones. But you are going to have a little bit more of a a roller coaster ride, I think, and you have to have a little bit stronger of a stomach. I think you're going to just see kind of a slow melt up for for anthropic if it was public today.
Speaker 2: Yeah, I was, I was curious about these private company evaluations and I was asking Grock for his opinion. You know, XA is oh, on Twitter, right, about like what percent of XA is valuation is like essentially just the infrastructure, GPS, etcetera. And it's like most of it, right. So what I see is you evaluate these valuations in these private companies. I'm just like most of most of the value here is just the, the infrastructure in the GPS, right, right, right, Jeff, like just oh, I think.
Jeff: Well, I mean, I think XAI is a little bit different. I do get what you're saying, right. So XAI is going to be heavily incorporated in Tesla. There's going to be elements of it incorporated into all of Elon's ventures. Frankly, I think when Rocket Lab IPOs later this year for 1.5 trillion is which they're with their targeting, right, that's going to increase XA is valuation as well. So I think XA is a little bit different, but you can't really look at it like that with Gemini either, right? Because Gemini's tied to Google. So everything Google is going to be pretty much bullish for Gemini since Gemini is going to be incorporated into all of their business segments, right? Gemini's probably going to be incorporated into Waymo and all of these other subsidiaries, right? I, I, I would imagine it's going to be incorporated into YouTube, YouTube TV in some fashion, right? Maybe recommending what to watch or, or just just as a broad example. So I think it is hard to say that it's just infrastructure, but.
Speaker 2: I no, I'm saying like the more than 50 percent, 60%.
Jeff: Yeah. I mean, well, it has to be, right? I mean, Gemini isn't anything or none of these solutions or anything without the infrastructure behind the scenes. It is infrastructure that's powering these things and that's it.
Speaker 2: Right. So the question is what percent if if anthropic is worth let's say $350 billion, like let's say that's.
Jeff: True anthropic's worth nothing if it doesn't have the infrastructure.
Speaker 2: I understand that, but I'm, you know, besides like IP, brand, Goodwill, all the other intangibles, whatever, you know, if I were to say just divide that by two, 50% of the value is infrastructure, GPU's, whatever, you know, that's like 175 billion.
Jeff: Yeah, yeah, that sounds right.
Speaker 2: That's it. That's incredibly bullish for I think the public. New clouds? Well.
Jeff: Yeah. And that number is going to just continue to go up like it has to. It's not going to shrink. It's not going to stay stagnant. The more adoption, the more compute that's needed, the more infrastructure that's going to be needed, the more power that's going to be needed. I mean, that's just simple. That's just, I mean, it's just, there's no way that it it can increase. Yeah. I mean, I think the I'm a picks and shovels guy myself, right? So I like investing behind the scenes. That's why I like batteries. That's why I like AI infrastructure. So yeah, no, IA 100% agree with you. I think it's extremely bullish for any AI infrastructure and player, right? But I do do foresee and I've said this before that I think you're going to start seeing in about 12 months out from now, some of these neoclouds really start struggling. And that's when I think you're going to start seeing an avalanche of. And as power becomes more constrained, I think you're going to start seeing an avalanche of M and AI. Think power obviously is going to play a lot, a lot into it as grid connected power is going to become more and more scarce. I think one of the easier ways to acquire more power is going to be through M&A and through those struggling neocloud or crypto miners that turned AI cloud providers. So yeah, extremely.
Speaker 2: Bullish. Yeah, And I'm just looking at today's price action, right? Iron's up almost 15 percent, 14.6 Looking at core weave doing a little Scroll down. Where is core.
Jeff: Weave core Weave announced that they're going to get essentially like are they getting bought? Are they getting backed by further backed by NVIDIA? What's?
Speaker 2: What they're getting at $50 billion investment.
Jeff: OK, well, I mean, that's NVIDIA investing in itself essentially, because they own a massive chunk of it.
Speaker 2: I'm trying to find the pose so I can pin it but yeah like dude.
Jeff: What did Oracle do today, do you know?
Speaker 2: Pardon.
Jeff: What did Oracle do today? Let.
Speaker 2: Me see, hold on, I'm, I'm, I'm looking at coral weave right now, but coral weave is barely up 11% almost it's 10.7%.
Jeff: Well, and Oracle is actually down 4%. Nebius, last I looked is like hovering between 7 and 8%. Yeah, it's up 7 1/2% today.
Speaker 2: Yes, it it appears that a.
Jeff: Lot. It looks like a lot of the data center names ran except for Oracle.
Speaker 2: Yeah, it appears that somebody knows.
Jeff: Well, that's, I mean, look on the last earnings run, right? Every single hyperscaler basically said they need to add a ridiculous amount of capacity. What I think it was Google who said they wanted to double their capacity within the next two years. That was set on their last earnings call, right? So the only people that are going to stand to benefit are these neo clouds. Well, I shouldn't say that the people who are most likely to benefit are going to be these neo clouds and Bitcoin miners, right? They're the ones with the power. They're the ones with the space. You can't just even if they had contracted power with the grid, right, you can't stand up a data center overnight. It's a it's a, it's a monumental undertaking, right? That takes time. And even if you have some expertise in it, like they catch fire, right? I'm not going to name names, but you know, there's, there's a lot of things that can go wrong. So I think these, you know, the ciphers of the world galaxies got a, a, a really good chance to land a big deal here. Iron's got a chance to land multiple deals. I think they're the ones that stand to benefit the most. And I think that's why I, I kind of went with the, I think people are trying to get ahead of the curve, right? I think if you're trying to buy these names post announcement from the hyperscalers, it's almost a little bit too late in some cases, not for iron necessarily or some of the other ones that have big deals and pending. But yeah, I think they're just trying to get out ahead of it. You're seeing a a pre earnings pump.
Speaker 2: I mean, dude, part of I think Corey's announcement was that their guidance, right, they're, they're playing on building out five gigawatts over 4 years.
Jeff: Yeah. And three of the three of those gigawatts are going to literally go up in smoke. They have 0 expertise.
Speaker 2: Well, let's let's let's give the benefit of the doubt. Just let's say it happens, right. You know, we've seen this asset light thing happened before, but.
Jeff: Wait, so are they, when they say they're going to build, they're building up five gigawatts worth of data center themselves or they're they're relying on Kolo?
Speaker 2: They're going to they're going to probably rely on others, but let's just, you know, go with a 5 gig like you know, if it's if it's even possible for them or others, right? Like that's a ambitious.
Jeff: Do they?
Speaker 6: Even.
Jeff: Have 5 gigs of power today to.
Speaker 2: Build. No, of course not. But let's let's let's imagine that they can do it. OK, OK. 5 gigawatts apparently can translate up to $50 billion in revenue. I.
Jeff: Would think it would be even a little bit more wouldn't it? If you go off the Microsoft, you know what?
Speaker 2: Round numbers, round numbers, round numbers.
Jeff: Well, yeah, I'm just saying we sold them essentially 200 megawatts, 250 megawatts for 10 billion roughly.
Speaker 2: Yeah, but let's just use the simple numbers, right? So it's at least 50 billion in revenue, right. Their current market cap is around what, 50 to let's say 55 billion? I don't have it up, I'll get it. But but I did, I did some napkin math. It was like a 70% CAGR over the next four years. It's not stock price, it's market cap.
Jeff: Yeah, yeah, 54 billion market cap right now, Corey.
Speaker 2: Yeah. So I mean, if in a true AI bull market, I would, I would say like between, you know 8 and 10 price of sales multiple is that.
Jeff: What they're getting today.
Speaker 2: No, absolutely not. But I would expect if, if this growth sustains, people would get more bullish on AI And this this might not be core weave in particular, it could be the top of the old cloud to get that multiple.
Jeff: You think 8 to 10 is like where they should be or where what they?
Speaker 2: Should I? I think in a perspective I was.
Speaker 6: Thinking.
Jeff: It was going to be closer to 15 to 20. You're.
Speaker 2: Thinking about price earnings, I'm I'm talking about price of sales.
Jeff: OK. Price of sales, sorry.
Speaker 2: It, it, it sounds crazy, but like, you know, hypothetically this could be a $500 billion market cap in four years.
Jeff: I mean, it's pretty wild. That's, I mean, it's really hard to kind of fathom, right? I mean, I'm trying to play along with it. But I mean, yeah, they were successful and do that. I mean, yeah, I mean, at least 300 billion, right. I mean, as a bear case, if that were all to play out, 500 billion probably bull case. Yeah, that's, I mean, that's insane.
Speaker 2: Yeah, so looking at, you know, our darlings, you know, it's like so early right in the AI store. I mean, just because some of us, some of us have been following these names for like 5, two to five years, right? It seems like this is now the arena to play in. It's like now the game has started.
Jeff: Yeah, I, I would, I would say the first pitch has definitely been thrown by now. Yeah. I, I just, I'm sorry, I'm just trying to, it's hard to wrap your head around those numbers. Like I'm trying to put it in perspective of iron even it's it's it's mind blowing. I mean, I don't really have the words to describe it. It's the ceiling for these companies is like Empire State High. Like you, you can't even see the ceiling.
Speaker 2: I mean, there's definitely going to be more financing, you know rounds, I mean, I don't think we've seen the last of the ATM maybe hopefully we've seen the last of it, you know, sub triple digits, right. But it's not, you know, market cap is not going to be a stock in the stock price. And I think it's going to, you know, require a really good CFOCEO to pull off the the financing aspect of it.
Jeff: Yeah, that or they give like a portion of their company to one of these hyper scalers like like Wolf did, right. That would that would create some liquidity and and help them from what one would get a hyper scaler with some skin in the game to it probably give them liquidity needed to avoid hitting ATM for for some time depending on you know what that looked like.
Speaker 2: Yeah, dude, like these numbers are crazy. Like it's, it's just difficult to vocalize. I mean, we've, I mean, I've been, you know, looking at these, these tickers since before they're, you know, going to our companies.
Jeff: Yeah, that's wild. I mean, I think I got into IRN somewhere in the four to $6 billion market cap range. So I want to say around there, I don't know what it was when I was 18. I could do the math and figure it out, but I don't feel like doing that at the moment. Yeah, no, I mean, it's, it's just, it's wild, right, Like.
Speaker 2: Yeah. I mean, seeing, seeing a company go from, you know, half a billion to potentially half a trillion, right?
Jeff: That's like, I mean, that must, I mean, it must be crazy for everyone, but like, I mean, you were in Bitcoin when it was in the hundreds, right? So I mean like.
Speaker 2: Like honestly like.
Jeff: 1000.
Speaker 2: That was that didn't really count. It didn't really count because I wasn't a serious investor. I was a child, right? But I mean.
Jeff: Still, it did. It very much counts. I mean, it's not.
Speaker 2: To the, IT does kind of perspective, but I have perspective on Bitcoin when it was under 100 bucks. But as an investor, I think, you know, 2020-2021, I learned a lot of lessons in the, you know, the crypto equity space, Bitcoin equity space. This this is like 1000 times more exciting.
Jeff: Yeah, IIA, 100% agree. Obviously I'm worried there's going to be some macro things that are obviously going to happen over the next couple of years that are going to create some, you know, hefty downturns. You know, I positive of it. If you don't think that's going to happen, you're crazy. Like it's inevitable, right? I'm just hoping that we can run like super hard and have enough of a runway before one of these Black Swan events happen where we've got enough momentum where the, you know, losing, losing 50% of iron gets to $200 obviously would make me very sad, but it wouldn't make me as sad as going from 80 to 30, right? Because I'm going to be up so much fucking money at that point that like, it is what it is. I know it's going to come back up, but that was really hard. Like I was, I mean, I, I mean, I wasn't sure if I was going to get round tripped at one point late at late 2025, right. Once I've gotten that much cover, like it's kind of just icing on the cake. Like it just, you know what I mean? Like it was a lot more worrisome going from 80 to 30 than it will be going from 20 to 100 in my opinion.
Speaker 2: I, I don't think it, you know, I think there's going to be a lot of new investors that come into the space, right? And they haven't developed those muscles and that's where the volatility is going to come from. It's going to get, it's going to be from, you know, the bulls getting way too excited. You know, I mean that my, my higher end price targets I've upgraded from, you know, my, my, my, my realistic price target, it's like 160. Like that's an achievable target for this year for iron, right?
Jeff: Are you saying that you think it's going to be 160 at the end of the year or we're going to hit 160 at some point?
Speaker 2: For the highs, my, my high range is has been upgraded from 160 like the, the whole range is 160 to 273 essentially. And even at 160, I think a 50% drawdown can have it again. I mean, that's just the, the nature of these, these these equities. We could see a drawdown from 160 to 80, you know, 2:40 to 1:20, right and.
Jeff: For me, that's not going to be as like as saddening as going from 80 to 30.
Speaker 2: Yeah, because, you know, you've been here, you know, for a while.
Jeff: Right. I, you know, I hadn't, I mean, obviously I got in early compared to some people, you know, buying below 20 bucks was my entry point, but I continue to buy right through all the way up and I think my cost basis is like around 30 bucks. So I was close to losing at like all of the profits that I had made throughout the year. And that was frustrating, right? But like once we get to 200, going from 200 to 100, I'm already up over, you know what, 3X at that point, even after the draw down. So I'm not going to be, I mean, obviously it's going to be sad to lose money, right? But you know, I, I mean, I got a little bit worried there for a second. I wasn't panicking. I wasn't like thinking about selling. I knew what I owned. But you know, at that point it's just, it's still kind of butterflies and rainbows, right? Like being up 3X4X in 18 months, 24 months, it's pretty ridiculous. Like obviously we're shooting for, for, for more than that, right? We think there's 102050100X, whatever it might be. But look at the end of the day, when, when I look at my account and it shows me, it shows like lifetime up 400%. Like, like it's hard to be like, it's hard to throw a pity party. No one, no one's going to feel bad for me, right? So it's, we've gotten really spoiled. And once we get to that point, I'll be even more spoiled. I'll be a total brat.
Speaker 2: Yeah, I, I think otherwise the 510X, there's at least one or two more 50% of draw downs.
Jeff: I yeah, I have 100% expected. If it doesn't happen, then I think, I think it would be. I think it would be weirder if it doesn't happen, then if it does, I just when is it going to happen? How hard is it going to be? What's going to be the cause of it is like the only unknowns, right? I think it's pretty much a certainty that it's going to happen at some point, right?
Speaker 2: My, my gut tells me that once we hit 100 and a hundred 100 bucks in like a few days to weeks, people are going to want to sell and we might go from 100 to 80 and then because, and people are going to think, oh, we're going to go.
Jeff: There's going to be little 10% hips like throughout the way of I'm talking we're you're talking big. I was talking, I was talking like or referencing like just the major draw downs that we have. Like if we go from where we are right now to 100 like and we don't have a little 10% pullback, that would be extremely abnormal.
Speaker 2: Yeah, I just think people are going to sell too early, like around 100 bucks, 90 to 100, and then we could quickly make a run from 80 to 160 in a matter of weeks.
Jeff: Yeah, I mean when we get once we get to hundred 120 range, I'll probably sell like very tiny, very, very, very, very tiny covered calls at my and the most I would be willing to get rid of would be 1015% right. So if it does, then I save that money off the side and then I buy back the dip. So that's going to be my my play on it at least.
Speaker 2: Yeah, I'm just, I think the move is the move from 80 to 160, right. I mean, we could see a pullback from once we hit 100, we could go down to 80, maybe sell E.
Jeff: It also depends when we hit the ATM right?
Speaker 2: I don't know I'll.
Jeff: Be pissed if we hit the ATM before 100 bucks.
Speaker 2: I'm going to say that they're going to have other ways to raise that cash, maybe through Co location deals, but hopefully it's not below 100.
Jeff: Well, yeah, they just, I, I don't want them to kill the momentum. I want them to allow the stock to perform, recognize its value before it they crush it because I mean, anytime you're going to hit the ATM, you got to expect a 10 to 15% drawdown, right? Like, I mean, that's pretty standard, typically closer to 10, I would imagine 1012.
Speaker 2: No, it's like 50%.
Speaker 1: Don't say.
Speaker 2: That depends on where it is in the cycle and the Bitcoin mining. I mean, it could go down 75%, yeah.
Jeff: But traditionally though, like when iron went to the ATM, it was like a 10% drawdown. It lasted about 72 hours and then it started recovering.
Speaker 2: Yeah, but we're, we're now at a new arena. I, I don't think we're going to see 75% drawdowns with an ATM announcement above 100. But I again, we're not out the woods.
Jeff: Unless they do like deal ATM deal that would be fine. But I mean, even then that kind of curbs like the the momentum.
Speaker 2: It depends. I mean if it is it a cloud deal, is it a Co location deal? Is it a, you know, a hyperscaler or is it a, you know, anthropic open AIXAI well?
Jeff: If anthropic, it's $350 billion. Let's call them a hyperscaler, right? I mean, because that they're close to it. They're they're like 1/2 hyperscaler at that point. Guy, are you there?
Speaker 2: Yeah, yeah, I'm just reading the comments. We've got a lot of them.
Jeff: Do you, I mean do you consider, I mean you have to consider open AI hyperscaler at this point I would imagine, right?
Speaker 2: Not technically, no. I mean, I think the traditional hyperscalers, you know, I'm not a finance professional. I'm not I don't work in in a finance department. I don't even, I don't even have a job, but you know, if you ask a finance professional, I think they would prefer, you know, a Google, Amazon, Microsoft, you know, with, with a strong cash balance sheet. And if you weren't to like if, if there's another alternative like a Anthropic, I would expect you know, a greater upfront payment in addition to, you know, them paying, paying more because of the risk.
Jeff: No, Well, yeah, I don't know totally. I was I was more like what is your classification of a hyperscale or not necessarily how it impacts?
Speaker 2: I, I think the new, you know, the new generation of hyperscalers are, are being created right now. They're being developed. I'd like to see hopefully Anthropic becomes a hyperscaler, right? I mean, I think that's what the ambition is. That's why they're raising so much money, right? Because they want to be a trillion dollar company, right? But I'm, I'm talking about today, like are you a hyperscaler today? Are you a trillion dollar company today?
Jeff: Yeah, there's, there's, there's, then there's three. Google. Amazon, Microsoft.
Speaker 2: That's what I'm saying. It's it's. My suspicion is it's Google.
Jeff: Or meta. I guess you could put meta in there too.
Speaker 2: Google, Meta or Amazon?
Jeff: Yeah, I mean.
Speaker 2: Or Microsoft again.
Jeff: Yeah, Google, Meta, Microsoft, Amazon, those are the four hyperscalers. And then you got like guys that are close, right? Like, I mean, Oracle, regardless of what you think about their business model and their balance sheet and all of that, I mean, what is Oracle's like what, a 400, five, $100 billion company? Yeah, I mean, Oracle's a half a trillion dollar company and they're they're either like a mega neocloud or a mini hyperscaler, I guess however you want to phrase it. Are you talking to a guy? I can't hear you at all. Can you guys hear me still or is it just a guy that's glitching? Can you guys put a thumbs up if you can hear me? Cool. Yeah. I don't know. It's it's just it's going to be thumbs down. Thumbs up. OK, Good, good, great. Grand. Yeah, I don't know. It's.
Speaker 2: Yo, can you hear?
Jeff: Me. Yep, we can hear you.
Speaker 2: Yeah, sorry, space glitched. I was saying Oracle. Doesn't Oracle have some credit issues?
Jeff: Yeah, they have major credit issues.
Speaker 2: Yeah. So if I were if we were to see a deal with Oracle for.
Jeff: Example. I would not be happy personally.
Speaker 2: I mean it depends. I'd have to pay a lot more with a higher upfront payment.
Jeff: Yeah, I they would but, or I mean, look, Oracle's not going to default, but they're like the greatest risk of defaulting of these major companies. Their CD swaps are through the roof. And I would be concerned if we did a deal with Oracle that it would be to support open AI through Oracle. And then you have essentially to worry about open AI not paying Oracle, then Oracle's credit further going down the tubes and then them being in jeopardy of not paying it, paying us. Like I want to stay from from for iron. Like I want to stay as far away from as possible from open AI and Oracle right now until their their balance sheet improves, until their CD swaps aren't going through the roof. Oracle's credit rating is like near junk territory. It's the second like lowest grade you can get there. The considered the least trustworthy like mega cap company on the planet at the moment.
Speaker 2: Jeff, can you hear me? Yeah, my Myspace keeps glitching.
Jeff: No worries. I'm not sure if you caught what I said, but.
Speaker 2: I I I caught the tail end of it. Invite some speakers up. Whoever wants to come up and speak, come up while I get my shit sorted.
Jeff: Yeah, small cap, I'm going to invite you if you want to come up and chat. Oh, there we go. Mao Bao, my favorite. What's going on, dude?
Speaker 2: Yo, what's up? Not much. I've been just selling puts on Cypher and it's being extremely profitable because the trader just so repetitive that you can almost do it every week and you know hopefully this trade doesn't break. I think the ticker just come down on Monday, then you sell puts on 17 or 16.5, then we're not back to 18 since 19 on Friday it drops again. So yeah, just that's what I've been doing. So yeah, unless I absolutely love to listen to you guys talk about all the stuff. So yeah, actually accidentally request request to be a speaker. I just want to join the space. Then I click accept and speak, then become a speaker. But yeah, that's what am I doing. I think lots of the high momentum games and the high beta stocks this year is going to have very high volatility. And if you know how to make choice on that, especially if you own shares, you can do cover the cost at different strike days, especially a longer higher target to cover cost. Usually when the price have like a double digit move and the cost actually drop like more than 20 to 30%. So you can't create the crazy in that way and send off the other names you can sell post if you actually want to own the stock. So yeah, so that's all I have.
Jeff: This is a really common way in which big institutions go and try to position themselves to acquire shares. So like that's that's really common. Bow are you are you more of a a compounder or are you more of a trader?
Speaker 2: Yeah, For me, I actually separate My Portfolio into different parts, right. Obviously have a very large position on iron in both cars and shares, but I the way I do it is very risky. I basically use the margin that brokerages provide to me to sell post and you know, unless you're like post get assigned, you don't actually pay any interest for that part of the collateral, right? Because the collateral is actually coming from your Martin book. But if you're expired, what's this? Or you brought them back before assignment, then you don't actually lose anything. So it's kind of risky, but this just how I do it, not financial advice. Don't recommend anybody to do it that way you can lose lots of money. But basically for your question, I have a key holding portfolio then I use the margin then my brokerage to provide me for bad position to sell puts.
Jeff: Understood. And then do you have and do you do day trading as well or swing trading?
Speaker 2: Yeah, like for the takers, I really know well, but it's hard to do like day trading nowadays unless you actually have a very repetitive patterns, right? Because I think it's been why do they talk about that? If you like it, just regular retail trader, it's hard to predict the price for the next 5 or 10 or 20 minutes, right, Because you have now all those headphones or and market makers and they can see the order book and they see the liquidity level they see and they trade much faster than you are. So yeah, that's going to be very hard thing to do if you want to like make like 1020 minutes straight. I know some people are good at this, but I'm not particularly good. I like to sell puts because it give me a margin of safety, right? And if it's the tick I really want, I don't mind to buy it. Like maybe $0.50 or $0.60 higher than the current price.
Jeff: Selling puts over selling, Selling calls. Is it because you don't want to give up your shares I'm assuming?
Speaker 2: I do sell well. I'm more careful on selling cost especially against iron because I do like a Bitcoin AM mining guy. I have a price target for it, but I at some point I do consider to sell cost right because I learned a huge lesson last year. So basically I remember this day very clearly on November the 5th, the cost strike at $110 expiring on this June 18th was selling for $20 per contract. To think about that, that that day the iron was, it was treated as 7576, but the cost for 110 it was, it was sold for $20 and I sold that cost, but I brought back the, the, the day after. But if I could have kept that core back in December, that core was worth like $2.00. So that's like 98% down of your premium, right? So you basically I, I could have basically get like 200K for free, but I didn't. So, and also there's a way I think about selling cars is that reduce your cost basis per share, right? I think I have a similar cost basis with you on iron. My cost basis is about $25. I have 1212 thousand shares. So if I sell a car that is $20.00 at let's say 110 strike price, right, then my cost basis for iron basically become $5. So that gave me a like a huge margin for downside protection instead of giving upside, right? Because what would that be less satisfied if I get a like, I mean AX instead of a six XI mean sure. But if my downside is like 0, if I can't lose money, then I would definitely want have like a 6X instead of having lose could lose like 50% of money instead of getting AX, right. So it depends on how you the risk kind of worse. So yeah.
Jeff: It'll be interesting like this week, like if you kind of straddle your position, you would have been making so much money, right? If you bought a put and bought a call like because the price action of iron has been so crazy that a, that a straddle would have you probably could have cashed it on both sides with, you know, 10% drawdowns, 10% upswings and just made, made good money that way by not exercising, but just just selling for selling them out for cash. I don't know how long it's going to be Pogo sticking around like this, but I'm sure day traders are having a field day and swing traders are having a field day with iron. It's probably got to be one of the more exciting stocks to swing trade at the moment. Yeah, I, I that's a little too advanced for me. I, I know how to do it. It requires a little bit of finesse and it's just not something that I'm willing to risk. But somebody who's really experienced with it and could straddle it and buy a put, buy a call probably for the next 7 days is going to have an A really good opportunity to cash it both in for for sizable profit, I'd imagine. I don't know if that's something you do, MO.
Speaker 2: Oh me, and I've done it before and I lost running lots of lots of it is just like emotional control, right? Because even for sell post, there are a period of time then my sell posts are unprofitable, right? Maybe it's down like maybe 1020%. I think yesterday the cypher was trading as 16.3, right? And my post was so that $0.90 a one up to like $1.20. So I was basically down like 30% on my post, right? But I know like, were they able to buy sci-fi 17 short? But for like more complicated strategy, you, you really have to think, OK, well, well, if you're like 40% like down, like do you close it? Do you like keep it?
Jeff: Like yeah, you can't be greedy. You got to shoot for like what Like maybe a a 20% pop each way. Like not 20% stock price but like 20% profit each way. Take your 40% and run right you're you're basically banking on a 10% swing each way you buy Like let's just say iron was at 50 bucks, right? If you bought a put at 49 and or like a A2 week out put at 4849 and then a call at like 52 ish, right, you would have done. I know that I'm making up stock price, but if you actually went by this one, right, let's just say when iron was at 55, if you bought a 50 $3 plate and you bought a $57 call for two weeks out, you could have made probably some pretty good money off that.
Speaker 2: Yeah, yeah, 100%. You can close the single legs when the price move one way, right, then close the other leg when the price move the other way. Yeah, that require you to do like lots of you have to watch the market in that way. Yeah, 100.
Jeff: Percent I'm saying it's a little too much finesse for me, but like the way that irons price action is moving, I'm sure that could have made swing day traders who know how to do that like a fuck ton of money, right? Especially if you're if you're betting big, right. Guy would only be doing small potatoes until I ever figured it out. Like maybe a contract or two each way, right where it's not going to be traumatic for me if I if I fuck it up. But yeah, I mean, I think that would be a good opportunity. I bet you would probably be a pretty good opportunity throughout the rest of this week. I anticipate we'll probably have a little bit of a drawdown tomorrow and we'll probably melt up I would imagine through the rest of the week. Actually, I don't know. I shouldn't say that because tomorrow earnings are going to impact it. So yeah.
Speaker 2: Yeah, Because you raised this point, I want to add one more thing because I think there's a popular narrative that wouldn't just like a huge hedge fund take position of certain stocks, right? It's going to be bullish. Like it's kind of related to option trading because you have to be careful to look at what kind of institution are buying the stock, right? If it's like Citadel or Sequoia or like all those like long short, like market makers buying the stock is not necessarily bullish. Maybe they just want to write option contrast right? And in indeed they can write it much more profitable and they create they could create price movement for their shares to have a profitable entry. But if it's like.
Jeff: Along the line, yeah, they're usually buying both, right? Those institutions are usually buying a put and buying a call.
Speaker 2: Yeah. Well, they are actually writing the contracts for them is for like if they have to have the shares to write the contrast, right. So or or for hedging purpose, yeah.
Jeff: Yeah, yeah, that's you see that a lot like when you when you look at the institutions, they usually have a call option each way.
Speaker 2: Yeah, yeah. So you really have to be careful. This is like a long institution for 1K, like like Fidelity, that kind of institution buying the stocks almost like 100% bullish, but it's $30. You have to be careful. Yeah, no. Oh, Mike is here.
Jeff: Yeah, I just invited Mike not to.
Speaker 2: Speak.
Jeff: So.
Speaker 6: As soon as he's ready.
Jeff: We'll, we'll let him come up and and have the mic. Mike, how's it hanging? Hey, guys. How you doing? Always good, always good. Today was a fantastic day for the Iron Bulls. Yeah. I mean, look, I, I try to resist the temptation to let my day be dictated by securities prices. I'm a high volatility, high conviction, long duration value investors. So mark to market pricing on most days is, is largely a non event because I'm looking out a year, 2 years, three years and thinking like how big can this be? And the thing that keeps coming to mind is as I think about this market is, is I think we're all vastly underestimating the possibilities because it's really hard to think in exponentials. It's really hard to understand like where AI is going. Like when I I'm going to harken you back to the to the late 90s. Like when I think about I was using my first wired T1 connection at Stanford. I was finally able to download like thousands of songs really quickly using Napster and Sean Fanning and one of the other Co founders were in Palo Alto, like rumored to be in Palo Alto when I was at Stanford. And when I think back about that, that timeline, like there were some people that were bullish on the Internet. There's some people that were using the Internet and thought it was cool, but nobody like absolutely no one can understand the trajectory of what like Microsoft, Amazon, Google, Meta, Tesla, etcetera, all these companies like what was going to happen over the next 25 years? I mean, the consumer Internet largely didn't exist. It was mostly people looking at porn via, you know, portals using phone line modems that blocked your ability to, to talk to anyone else while while the Internet was being used, it took like 5 minutes to load a web page. And if you told someone at that time we would do almost all of human commerce globally on on the Internet, people would have said you're you're nuts. Like only my professor uses that and he largely sends it, use it to send emails to other professors. Fast forward today and and now the biggest companies in the world are are all basically technology comes. They're all basically Internet companies. They're all basically Internet native now. And that was not a non obvious, non consensus view if you had it 25 years ago. So we're in a little bit of a bubble here because we're having conversations in these rooms that far surpassed what the average person is exposed to. I mean, the average person is watching TV news and Jim Cramer, right, talking to their neighbor who's just is idiotic as as they are and they're just they're watching TV and spreading information. A lot of it's incorrect. Some of the stuff they got off of Facebook from their neighbor. And so yeah, like if if you're lucky enough to be in a place where people even understand AI, like you've already, you've already beat 99% of people talking about AI, talking about Bitcoin, talking about robotics, exponential technologies, great. Like if you're on X and you're in these rooms, like you're probably far more advanced than the average person, but you're still likely to systemically underestimate how big, like for example, the AI cycle might be and how, how elongated it may be. This may be a 30 or 50 year cycle. This may be the first wave of initial CapEx, right? Which is, again, according to Goldman Sachs, largely being funded by cash and, and cash flows largely coming from the largest technology companies in the world who of course were behind cloud as well. So we shouldn't be surprised that it's Amazon and Microsoft and Google, etcetera, because those are the same companies that help build the Internet data center business. And so, yeah, if we're in the first or second inning, like a lot of the stuff we're hearing and a lot of stuff we're we're listening to and reading is wrong. And it's wrong on the downside. It's, it's not imaginative enough. It's not, it's not looking at the full picture, it's not considering the possibilities. There's a lot of what could go wrong type of Chicken Little thinking on acts and in general and investing. And there's much, much less of the sort of what can go right mentality. It's the kind of mentality you have if you're like Sequoia or Lightspeed or Andreessen Horowitz and you're funding AI companies at the feed stage or the A round right? And you're not, of course you know stuff's going to go wrong. Like when you invest in private companies, you expect to lose money. The actual portfolio approach for these big VC funds is to take such big swings that you're only trying to hit. You only need 2, one or two big outcomes to return the whole fund. And then everything else is sort of gravy, right? But you have to hit. The power law means you have to hit those really big returns. So you can't be sitting around asking what can go wrong because something will always go wrong. There's always a reason to be bearish. There's always a reason to be negative. But in order to make these 2000 or 5000 or 10,000 X type returns that people are going to make on companies like Open AI or Uber or Coinbase from the seat stage, you have to be asking what could go right because we already know what could go wrong. That's very low IQ thinking, right? When you listen to somebody time about AI and they can only tell you all the reasons can go wrong, it's like duh, duh, duh, duh, duh. What am I in 3rd grade? I don't need to hear all the reasons it's going to go wrong. What I want to know are all the reasons that could go right. And the reality is the people who are only thinking about what could go wrong don't have the mental bandwidth or the cognitive ability to think about what could go right because they waste all of the energy in their brain and all of their brain cells on things that don't make money right. And, and I like to say that most of the big money that's made in markets, pretty much all of it is made during periods where you can find a lot of people who are worrying about doomsday scenarios like end of the world scenarios, like the vast majority of the massive amounts of wealth made in markets are made just investing while other people are worried about what could go wrong. So what what do I think could go right? I think AGI is probably coming sooner than people expect. I think the AI is disrupting the job market much more rapidly, especially at the middle tier and the lower tier. And I posted a tweet about this earlier. You know, there's a lot of blah, blah, blah about the K shape economy. Whether it's right or wrong, it doesn't matter really. Like there there may be some moral implications of the K shape economy, but what actually matters for investing is trying to understand what it is not, whether it's right or wrong. And I think, Mike, can I ask you a real quick question? Let me just finish the thought. I think it ultimately emanates from the fact that average talent in the economy, the average worker in the economy, they're getting completely disintermediated right now. The that's why you send out a job application to a generic job without knowing the hiring manager right now. It goes into a vortex and there's no actual real job being offered most of the time. A lot of it is just dressing it up for a HR and compliance to make sure that you don't get in trouble for not offering the job externally that you already committed to fill internally. But that's another story. So average talent is being diluted, right? Because average talent can be disrupted quite easily because it doesn't do anything that is an average and AI disrupts the average in the middle tier first at the at the high end. I'm seeing this in all my companies right now. The war for talent of this like very unique senior talent. Like think about the AI labs, they're willing Mark Zuckerberg and Anthropic and open AI. They're competing with like chain St. and Citadel and Millennium. And if you're successful in those companies, you make 10s of millions of dollars, if not hundreds of millions of dollars. And some of these AI signings have a have a have sort of had an effective implied valuation over a billion, right, for the very top AI people in the world. And so you juxtapose those two things. What does it mean? Well, it means that you can't be average if you think that you're just not going to have capital and you're just going to go get a job, like a mid level job out of school and that's going to be some sort of path towards prosperity. It it won't, it, it can't because the structure of the economy has moved completely away from that and that is accelerating right now. So anyway, I'll let you interrupt me now, but I wanted to finish that thought. Yeah, I don't know, it's just on the topic. I'm just curious, what is your definition of AGI? Feel like it's such a moving target and everyone's got such a different definition. Just to kind of put your comments in perspective. I'm curious, what's your definition of AGI? I mean, I'm not going to be super, super specific on that because I agree with you. It's actually a moving, it's actually a moving target. And I think it'll be one of those things where there'll be something on X2 years from now where some researcher who's very senior says, look, this is what we just did in the lab. And to us, this passes the test of being something we would consider an AGI. But I think of it as like truly human, like intelligence and ability to evolve in human like ways in terms of intelligence. And a lot of people probably disagree with me. That's it. And I, and I actually think it'll be really hard to recognize when when you see it like, because a lot of the things that we're interacting with now already feel human like in terms of their ability to answer questions and understand contacts and things like that over time. And of course they know pretty much every fact that could be known in the human universe already, which is insane, right? Because the average person is not able to retain very much at all even from the last week. And AI sort of retains knowledge of everything that may have value in some context. Again, it has value at the lower end. But what what it still can't do is think like a CEO, like a great CEO thinks, right? It doesn't think independently like that. It doesn't think independently like a great investor. It can tell you what the data already says. It might even be able to tell you something you didn't know about what might happen in the very near future, but it probably can't tell you much about where asset markets are going over two to three years. I think good human investors are still better at that. I can imagine a world, though, where given the right programming and the right structure, right in the right technology stack and the right amount of compute powering it, where that's not the case. So I think AGI is somewhere between where we are and like what a really good CEO can do in a company and what a really good investor can do operating independently. And I think today it's largely like helpful and filling in gaps and automating rote tasks and being smart about facts, but not necessarily like you wouldn't necessarily want it to be running your company quite yet on autopilot, right? Because there are some decisions that actually require human judgement still, right? Where there are Gray areas where it's not clear, like you actually be able to need to be able to read other contacts that are non verbal, even in some cases are non written right where you only you understand the culture because you actually worked at the company for seven years and you know how things get done in the company. There's no log book or manual that says here's how you actually get this sort of thing approved at this company. But everybody there knows that that's how it's done right. And there's there's millions of those things that are undocumented. And so AGI should be able to, if operating long enough, be able to understand some of those contexts beyond just contacts that are sort of black and white zeros and ones. But it doesn't do that yet. So I don't know, like that may not be the, the, the perfectly correct answer according to some AI researcher working at Open AI, But I don't really care because I think it's better to understand, have an intuitive feel for where these things are going and what's likely to happen. And that'll give you still an edge in markets versus like reading what everybody else thinks about it and then just sort of regurgitating that. Like I, I don't actually spend a lot of time doing that. I spend most of my time looking at what the market is actually doing and the opportunities presenting and then asking how is that different? Like what do I think is going to be different over the next one, 2-3 years that in most cases AI cannot think about or understand yet because there's no data that says that that's true. There's no data that's going to predict that perfectly. There's only the human brain's ability to see with pattern recognition and some intuition, the slope of some of these curves that are maybe not visible in the day. Like for example, right now, if you just looked at the data and you looked at the chart, you could be led to believe that bitcoins dead right? And that bitcoins probably never going to go to $1,000,000 a coin. I actually think $1,000,000 a coin is, is virtually certain, like over a long enough duration. Like I think if you go out as far as 20 years, like it's probably 95 to 98%, something like that. But AI is not going to believe that today because there's nothing in the current data like the same things the charts, Quigglers and the Canadians are doing. They're like looking at a spreadsheet and they're circle jerking each other off in a circle talking about their their charts and what happened over the last six months. But if you don't have a deep fundamental understanding of Bitcoin, how it fits in to all monetary technologies and all monetary powers in human history relative to the day, and then what the likely pathway is integrating AI, which again is more of a, you know, looking forward as opposed to looking backwards exercise, then you're going to be unlikely to be able to probabilistically wait the odds. Correctly and therefore you're going to miss a chance to stay long term allocated in size to something like Bitcoin that has like almost virtual certainty of having success over a long enough duration, but may look risky or volatile or even dead at certain periods of time if you're just using backwards looking data. So I think, look, I think when Bitcoin wakes up an inevitably will and volatility starts to to spike again. I'm betting actively on volatility in multiple different ways, including stacked, I bet options going all the way out to September, I think right now, May September, etcetera. But also via, you know, entities like Strive where effectively the higher the Bitcoin price goes, the less drag there is on the entity and the more it it, it can sort of generate an embedded return that exceeds their cost of capital, which is really what's going to create exponential equity value. And so in a sense, it's like a long duration call option with no expiration where like as long as they don't, they can't default. They don't have to sell the Bitcoin because they have no debt instruments. Once they retire the the similar convertible notes, they can just wait until Bitcoin is going up again. And of course, this is what always happens. People get way too excited every time you know, assets are going parabolic and they they want to pile in after that move has already happened. I get it. Feel safe to do it after you see the movement and after you see the excitement from other people. But that's actually not the, the way you make the most money, right? The way you make the most money to have a view as to what's going to do that two or three years in advance often. And then stack the take huge positions and wait, right? Instead of like letting the charts quiggles dictate it, let your understanding of the world and where it's going over the next two to three years dictate your sizing and your approach to that opportunity. And so right now it's, it's amazing. Like MSTR and fall of 2024 you had people abandoning minors to go into MSTRI. Can just tell you people were doing that AT200300400500 all the way up. They were leaving iron and cipher when they were under. There were three 4-5 dollars to go into MSTR at a price that is in many cases more than double the current price. So people who made that rotation late in 2024 rotated out of something that was about to drop 60% plus and left something that was about to go about more than 10 to 15X in some cases. And that's happening again. Now. You have people who loved treasury companies when they were 20 bucks and then they hate them at a dollar or thirty cents or they they, they loved them at 12 and they hate them at $0.78. And it's just, it's insane, right? Like it's insane behavior. I can point it out. I can say, look, guys, this is not how you make money in markets. Like this is how you get absolutely hosed. You're never going to become even a multimillionaire, let alone a billionaire behaving like that. The way to become a multi millionaire and a billionaire from scratch is actually to take large concentrated positions and things that are undervalued and wait. It's just you don't take large positions after something's run up a lot when everybody's excited and then wait for it to go down and sell it and puke it up. Like that's not, that's not how you make money. But I watch people do that over and over and over and over again in markets. So I think we're we're in an interesting inflection point because I think companies like Cypher are about to go mainstream, right? It's whatever it is, 67 billion, but has a good chance of getting to 2030 fifty, maybe even 100 billion, which would make it a household name. Like like Robin Hood did that, right? It went from single digit billions talent here went from that like single digit billions to kind of a household name. And that that's probably going to happen to these companies and into that that's in motion, right? Like we're in the, we went from like nobody knowing the names of these companies 2-3 years ago to now kind of hot in a small subsection. But what's happening with the treasury company is a little different because they're absolutely in the toilet. They did not have a good year last year. MSTR got smoked down 50%. You could almost say last year was the bear market for MSTR. And so it's, it's not a household name. It's most people still don't know what it is, but it's, it's actually pretty large already. And I think the smaller treasury companies, Metaplanet, Dr., etcetera, like those companies, if Bitcoin goes to $1,000,000 are probably going to be more well known, maybe significantly more well known. And if that's even possible, even though it's a plausible scenario, you want to take positions in any of that stuff. Like I'm not saying you should or shouldn't, but if you are going to do it, you do not want to wait till Bitcoin is 300,000 or 500,000. Makes no freaking sense. Have a view on whether Bitcoin is going to do that and then take your positions and wait. And I can tell you from the from the Bitcoin mining to AI conversion side, like if you think back to December 22, January 23, first quarter of 23, very few people who were taking positions there were able to hold because they did not have enough conviction about the three-year view. And I told people, even then I said this is a two to three-year game minimum and you will not get paid properly if you get off the ride in the middle of the ride. It would be like getting on Splash Mountain at Disneyland and then taking your seat belt off and then jumping up and down in the ride as you're about to go over the falls. Like that's literally what people were doing in Bitcoin miners in the last two to three years. It's completely insane when you think about it. But they gave up and missed an irons case A50 to 60X return already off of the lows in December 22 because they were dancing around and jumping and jumping on Splash Mountain and and Magic Mountain, whatever, when they should have just been staying seated in the ride and enjoying the ride. You go up and down and and there's a lot of volatility, but you get if you get to the ultimate, you know, destination, it's worth the ride, right? And that's all you're doing, right? Like if you abstract away from all this noise, all this options trading and all these chart squigglers and all this drama by which, by the way, doesn't add much value, especially on an after tax basis over time. If you get away from that and just focus on fundamentally what you're doing, it's actually not that hard to make a lot of money in markets. It actually requires more, less like pure raw intelligence, like the kind of intelligence that Claude or you know, Chachi PT can give you and more conviction and psychology. It's more about like knowing who you are, setting your structure up such that you can't fail, right? Like it's creating something that that you know you can execute on. And and that means executing on even when shit hits the fan, like even when you take a big draw down, which you had to take two or three times already over the last three years just to get here in names like Iron and Cypher. But that was well worth the effort. And you can imagine how much that'll be worth the effort if you held the position. Like, for example, with Iron, one of the benefits of being on the board, in addition to being able to actually help create the value directly, one of the other benefits is they actually can't sell or buy in the open market very easily. Right? I could sell, but then there would be an SEC filing and people be like, why are you selling? And a lot of other people sell the pay tax and stuff like that. I've refused to do that. I just believe too much. And what we're doing to to sell to pay taxes, like I'm glad I'll gladly pay those taxes myself out of my own pocket every year because why would I liquidate a stock that I know is sort of systemically undervalued? But you know, there's a lot of mercenaries in corporate America. I don't blame the guys that these other companies who pay themselves huge amounts of money to generate little shareholder value and then and then also sell the shares that they get every year to pay tax. I don't blame them for that. I don't think it's a very good look personally. But but also it's a free country and and if you buy their stock, then I guess you understand that that's the way they're operating. But listen, like that's one of the benefits though, of being an insider is that in some ways you're actually, you have to resist the urge with stuff that maybe is liquid, right? Or at least has the semblance of being liquid. But but with something where you can't get liquidity at all, it's more like a private equity investment. And it turns out that like if you aren't allowed to sell something, you actually make more money if you're right about that thing being valuable. Because no matter how much you think you could have made more money trading, almost nobody gets to where you're ultimately going with the same amount of shares if they do too much trading along the way, right? It's just, it just is what it is. Everyone thinks it's they get cute. They're like, oh, if I sell at 75 to buy it back at 37, you know how many people actually did that? Like a lot of the ones who sold at 75 are still trying to figure out where do they buy back in? And by the time they figure that out, it might be 95 or one O 5. And then potentially in some cases, you missed the opportunity ever to get back to the same Share Account you had before. And also by the way, to add insult to injury, you pay taxes on that. And in some cases those will be short term capital gains tax at a higher rate. When you add it all up, it looks like stupidity to me. Looks like Pennywise pound foolish behavior, picking up pennies in front of a steamroller when there are little literal fortunes to be made. And some of these sectors over 357 year periods, which I think we're right in the middle of one. Now, I've been out on on my long runs, I did 10 today. But on some of my other runs recently, I've just been thinking about what's possible here. And I think we're probably systemically underestimating all of us like what's possible because we're just not going to to be capable of understanding where AI is going because we're still used to be, we're operating with an analog mindset and an increasingly digital world. Now we're operating with an Internet mindset and curve in an increasingly exponential AI world, which is actually a step function upgrade in the speed of adoption and the speed of intelligence sharing and the speed of just how fast the economy is moving. Such that even if you're Internet native and you were smart about the Internet, you're still going to be too slow for understanding the implications of AI. Because it's actually, it's a quadratic, it's an exponential function. It's not, it's not something that's just, you know, going at some, some sort of 2 * 2 * 2. It's going like 4 * 8 * 16. And, and it's moving faster than most people can see. And therefore all of our sort of analog and even Internet digital level views of, of what's likely to happen with AI are probably going to be wrong. And if that's the case, then the, the, the demand for some of these things could be much higher. So anyway, I'll, I'll pause there because I've, I've, I've shared a lot of thoughts of stuff I've been thinking about, but just as a high level summer, like the one of the biggest things I'm noting, which I mentioned earlier in the labor market in particular. And, and this will have implications for unemployment and I'll have implications for like interpreting what unemployment means structurally. But is that at the very high end of the market, like AI researchers, hedge fund analyst, hedge fund managers, private equity, real estate, like at the very, very high end, the most talented, most unique skill sets are being compensated at astronomical rate. And it's actually accelerating and exploding higher. I'm seeing we're having discussions the number of companies about how we can pay a lot more to get the most senior talent at the same time that I'm seeing a lot of other stuff getting completely automated away. So basically the value of the average employee is plummeting at the same time the value of the most elite employee is, is skyrocketing. And I and I think that's largely responsible for some of the K shape dynamics that that people are seeing and experiencing and may also be responsible for changes in the way the market responds to things like unemployment data, which in a traditional manufacturing economy, just the pure number as a percentage of unemployment may have a bigger impact on stock prices than it does in a world where you might have slightly higher general unemployment, but you actually may have more money going to labor in aggregate, because so much of it is going to some tier top one, top three, top 10% at the high end. And those people are largely going to have to support the sort of traditional economy until over the next 20 or 30 years, we figure out what is the economy actually look like. If most traditional jobs or things we thought of as traditional jobs over the last 30 years become automated such that either new jobs are created or people have to move to, to some other part of the economy or the shift of jobs changes like we were talking about last night at dinner. People who repair like the, the, the windmills, the people who repair the, the, the, the wind energy turbines, right? Like the, those big things you see out in the desert, in the high desert, right? Like when you're driving to look at Bitcoin miners, there's not going to be a robot to to repair all those in the near term, right? There's probably not even going to be a good robot you can hire from the outside that's going to repair your toilet for a while. And so, yeah, there there may eventually be all of those things, but for a period of time, you're much more likely to be disrupted if you're a junior accountant or junior lawyer where AI can literally do your job right now and it could do your job better than you can do it. And so we will see a continued drop, in my opinion, in the value of, of those types of jobs. And we'll see maybe a significant bump in the value of jobs that can continue to be done by a human for a while, including physical jobs, technical, physical jobs. Exactly the thing they don't teach at a liberal arts university like Harvard or Stanford or Princeton. But, but it's certainly something that you can learn if you work hard and, and can probably make 2 or 250 or 300,000 a year, which still, even with inflation where it's at is a reasonable income for most people. So anyway, let me let me pause there, but those are some of my thoughts. Awesome. And sorry for interrupting you earlier. I just, I wanted to make sure that you were talking about AGI looking such a moving target and everyone having such different definitions. I wanted to make sure I and everybody else is able to put your, your thoughts and comments and in into context. So I appreciate the the clarification Degen, you got your hand.
Speaker 3: What's up boys, Bitcoin mining mafia in the house. I don't care if you change the name Mike. I want to get this macroeconomic shit in a minute. But let me tell you something. I ran 4 miles in 2 feet of snow today. We got dumped on in upstate New York and I just went with Sorell's and like 2 pairs of sweatpants on. It's the first time that I've actually done it with, with some inclines. It's a, it's a trailer. I usually run this trail and then there's like a little gym workout thing at the bottom of it, but there's, there's some incline in it. You know, I was guessing harder than beach runs, harder than trail run. Something about like, I don't know, pulling the feet, dragging the stove. It's like doing high knees for I guess, I guess probably took me like 4045 minutes to do it anyway. So I kind of disagree on the idea that there's not going to be robots to do this stuff anytime soon because I come from the trade. I mean, I'm working by trade. I build skyscrapers, bridges, stuff like that, right? That was my start when I was like 1920 and I did it for a number of years. And I got to tell you a lot of these things, they're really not complicated at all, right. When you talk about come and fix a toilet or repairing a windmill, like it's the access is some of the hardest part of it. Like a if I could pick any one of you motherfuckers and just put you in the spot and sit there and tell you what to do. I've been a boss for a long time too. And I can just tell you what to do. You could figure it out really easily. And it's something interesting that I'm looking out because I'm like, you know, we're, we're like Cavemen with this stuff, right? I don't know how much time you spend in New York or in any big cities. You see guys building a building. We, we, we're caving. We're doing it the same way we did it 100 years ago and nothing, nothing's really changed. But it's, it's, it's like very simple rudimentary stuff that I think some of these optimist robots or any of these types of things are going to be able to pick up on relatively quickly. Especially if you offered someone like me some money to train the fucking thing, I'd be, you know, I'd be happy to do it because it's incredibly dangerous, injury prone. Like, you know, there's a lot of things that people do that people probably shouldn't be doing. Like, I don't think people should be driving, but most right, I don't think most people should be driving. But I guess we'll just sit here and we'll wait and we'll see what happens over the courts of the next couple years. But you know, yeah, that's it, man. Only fans, industries getting disrupted by these fake, these fake AI people. So my God, in in in a group chat. They know I'm into this, you know, like guys I grew up with and they're sending me and they're like, dude, is, is this is this a real girl? I'm like, no, it's not. But anyway, hope everyone's having a great day.
Jeff: Listen, man, you didn't really ask me to comment, but I don't think we disagree really much at all. I think at the end of the day, the market will decide. I have a view today that certain physical activities will be slightly further out because I'm seeing the other stuff being disrupted right now. Like I talked to a kid who'd automated their company's a construction company. He's a son of one of my buddies who I went to his wedding recently and I gave him the advice. We're sitting at the reception drinking expensive wine and, and you know, cooking Wagyu on a hot stone. And we he was like, what, what should I do? I'm like, dude, I'm in the invoicing department right now. I said, kid, pull your head out of your ass, use AI and and freaking change the way you do invoicing. Don't keep doing invoicing just cause your general manager, general manager doesn't know how to use AI. But you're young. You can use these. Like really? I'm like, yeah, he took a week. He, he completely automated their entire invoicing department so well that the, the GM of the company contacted his dad and said, your son like crushed it. And your, his dad was so excited that he wants to turn that thing into its own company. He basically rewrote like a whole function of the company and took out a bunch of people and process in a week. And he came to me and he said, well, what should I, should I, should I do that? Should I create a company and said, no, I said, take the same AI program you just used and disrupt scheduling, disrupt permitting, disrupt procurement. I said like every single thing that you do in your business is going to, you're going to be able to take up 10 or it's a $30 million revenue business probably with AI didn't ask what the profit, but he doesn't even know. The kid doesn't know because they don't share that with them. But it's probably like a 10% margin business or 15% margin A.
Speaker 3: Good construction? Usually, yeah.
Jeff: Yeah, so 10:15, 10-15 really good. So what if what if by using AI you can take it to a 20% or 25% margin business? Well, now you just possibly double the value of the company because the multiple would go up significantly. You know, maybe it's a $20 million business and now it's a $40 million business because the margins are so much better. And so anyway, like this is happening. It's happening right now, but I don't see robot. You know, there may be a robot plumber, but I haven't had access to 1. I don't know anyone who's used one. And as you said, access is the problem. Like, do you want to invite a robot into your home? If someone needs to bring the robot, the robot can't drive themselves here yet they can't let themselves in the front door yet it still needs to be told which toilet to go to or in. In a lot of cases. You know, a lot of these home technicians, they need to be able to go in the attic, right, or into the basement. They need to be able to find the equipment and then they be be able to to fix it and or remove it. And I'm just saying like you may be right that that's coming sooner than most people think, but it's not coming faster than the shit that's being automated right now because you have whole departments being ripped out of companies yesterday because of AI. And again, I I have not seen a robot plumber anywhere yet.
Speaker 3: No, no, absolutely right. And in my own personal life, I recently had to get some affidavits done and I had some like accounting questions and I went right to Grok with them, right. And after Grok, I went to my lawyer and I went to my account with them and Grok was absolutely right about all of them. And it's more than more than worth of 40 bucks a month at a cost or, or whatever it is. So like, yes, it saved me. $600.00 an hour on the phone with this one and then other time on the phone with that one. So you're right, it is already disrupting those. I just like my personal view is that like once those things, right, it's like the what do you call it the rate of expansion I think, right. I think we're moving a little, a little bit quicker with that. And like once they once they do get the ball rolling, like once I can teach this thing how to drive itself, once you get, you know, you put it in a Tesla, it'll take itself to Mike's house. But once you, once you get that going, I think that's, that's going to snowball pretty, pretty quick because most things are just are just not complicated, right? Like I think people overcomplicate them, especially with like physical tasks and stuff like that. And they're like, Oh, I don't know how to do carpet read a fucking tape measure. That's really, that's really the gist of like most constructions, like learning how to read a tape measure. But I guess that man, we shall see. We shall see.
Speaker 4: I'll take the floor a little while.
Jeff: Well, hold on real quick. Bitcoin's been here. Bitcoin trail has been here for for quite a while waiting. So let me go to him first and then we can jump to you. Relentless. Yeah, I was just, I mean, I would agree a lot with Mike. I work actually, I'm not a professional investor like he is. I, I work in the AI field and it's actually given me a unique seat kind of having invested in, you know, all the miners early on, but working in conversational AI and I get sent articles from friends that aren't in the industry about how AI is a bubble and is it risky to invest. And a lot of the articles are relating to the.com bubble, which I don't even think is comparable because to Mike's point, if you take a, you know, a 19 year old kid and he can deploy software, you know, in an entire company and disrupt an entire division. That is happening times 5000, right? In the days you used to have a lot of smart entrepreneurs that they had to go code everything themselves. And while there was disruption, it just took a lot longer. The speed of AI is just far beyondanythinginthe.com bubble. And while we have enormous CapEx spend, as he mentioned earlier, I don't think, right, everybody didn't really know how to use e-mail. There was a lot of arguments. I don't think people who are at Fortune 5500 companies even argue they know AI is the future. It's already here. They're using it in so many different ways. And so the speed is just far beyond anything we've seen previously. And yeah, job displacement to his point is just going to be enormous. In fact, right before I jump on this space, I got a call from my veterinary office because we got to bring our dog back in. And it was a fully automated AI call reminding of every service. And I just talked to it, asked how long it would take. I mean, it was that is being deployed across every industry. So I don't think there will be losers undoubtedly, right. I mean the the software deployers, there's going to be small companies who lose, but those who are the picks and shovels and and the underlying power, I think we all agree are going to continue to to succeed. So that's the only thing I have to come in. Awesome. Thanks for coming up relentless. We'll go to you and then Small Cap and then JWH.
Speaker 4: Hey guys, thanks for having me. I think something that I've thought about a lot is that a lot of times with technology, you have no idea what's going to happen, especially in 5-10 years. Like you can't even imagine the things that are going to be around in 5-10 years. Like we don't, we don't know. I think that's just like something that is interesting to to think about. And in terms of robotics, today Microsoft signed a big deal with RR. And I think it's, I think that that's going to be a theme for this year's. More and more companies are going to team up with robotic companies because that is going to be the future. And personally, I didn't take a position today in RR, but I'm going to because I think it's going to be one of those scenarios where you want to, you want to team up with the winners. And Microsoft, personally, I think is Microsoft's going to be a winner based on their stock price. I mean, the market thinks they're going to be a winner also. It's gone up significantly over the last five years. And yeah, so, yeah, I'm interested in RRI. Want to if anybody has any thoughts on the company, I'd like to hear about it. And yeah, another company that I was interested in also was EOS, the battery storage company. And I was wondering what Mike thinks of that theme. Yeah, anyways, thanks. Thanks guys.
Jeff: There's a guy named Moan Mon investor on here that I started following, I don't know, three months, six months ago, something like that who's been talking about RR for a while and, and it kind of didn't do much until I mean, obviously the Microsoft deal is huge. I haven't looked at the contract terms or what specifically it's been done, but I mean the stocks up 44 percent or something today, still only a billion dollar, a little over a billion dollar market cap. I mean it seems that set up in particular seems asymmetric because if you have a Microsoft contract again without looking at the contract, I need to do that. But if if Microsoft's willing to sign a contract with them at that market cap, then given how big robotics are, there's a good chance that they'll be a viable player. Which means even if they're not ultimately one of the big long term winners, it's likely that their their market cap would be higher at some point over the next five years than it is now. So again, without having done any work on it, it is interesting. And I had just thought about it a few weeks ago because I think Mom posted about it and he was like, yeah, I'm still bullish on it. Obviously, he's been disappointing. So I'm concerned that it might not pan out. And then I think, you know, you get a deal like that. It's pretty validating. I've also seen people talk about EOSEA lot over the last six months. There's a bunch of these talks that all kind of become like Internet favorites, like X favorites. It was sort of like Palantir and Hymns and Robin Hood like a few years ago. Those were, they're all kind of the same. And then more recently Rocket Lab and ASTS&EOSE. And so I think all those, they're all in great themes. I haven't done enough work on the details of like the space companies, for example, or the battery companies. I'm sure they're people who have done that. I don't think you can be an expert on everything. You can certainly scatter shot and like try to pick a couple winners in each one of these things. There's nothing wrong with that type of approach if you don't have time to specialize. I, I tend to specialize more because in order to control long term outcomes as a professional investor, I would rather hit for double s and triples that I know really well. And we're going to keep paying right versus swing at a bunch of potential home runs that where I don't have any edge and I don't know anything more than the market knows. And that's just an admission of like, hey, there's only so many things you can be great at as an individual independent operator in markets. And some people try to be, you want to be a generalist in the sense because you want to understand things in context, but you also need to be an expert on something if you want to find things that the market can't find and have enough conviction to hold them long enough for the market to validate them. So I've heard good things about all the companies you mentioned from various different people. I think the one you mentioned recently, the RR Rich Tech Robotics, I think it's probably maybe one of the more interesting ones just because when you have an inflection point like a hyperscaler doing business with you, it validates the technology to some degree and validates the potentially validates the business model sort of like what we've seen with iron such that it D risk the story and maybe gives you an opportunity for significant upside with with a more limited downside now that you have that relationship in the back.
Speaker 4: OK. Thanks, Mike.
Jeff: I can comment just really quickly too. I'm I'm very bullish on the battery space I've been pounding the table on it for quite some time have a position with EOS. I think it's a phenomenal company unlike a lot of the big battery players that are built for large scale deployments like supporting the grid supporting data centers, EOS, almost entire supply chain is in the United States, which is pretty rare. A lot of these companies rely on China and rare earth metals coming from overseas, which put them at a risk for risk to be hurt when there's trade wars, tariffs, so forth and so on. So I think E OS has a little bit of protection from that. I think they have a just launched a new battery, like a new model where they're not going to rely on these massive, massive boxes anymore. And given their contracts overseas in Europe, it's going to make shipping a ton easier for them. So I think they're going to be able to expand further than they already have within Europe. The management company is great, but they do tend to over promise a bit. So I would be careful when you when you listen to some of the earnings calls, think it's a phenomenal product. Battery power is immensely important. The entire industry needs to grow at A at a pretty big clip. Overall, I think another another company not financial advice that's worth looking at. So batteries play in a lot of different spaces. AI is going to produce EVs, evtols, robots, drones, wearables, gadgets, so forth and so on. One company I've got a pretty sizable position in is Ampex. I'm sorry, Amprius Technologies AMPX is a ticker, not financial advice. They make the best batteries for drones and they have use cases for robotics as well as evtol. Definitely a company I would look checking look at closer. I think they have a really really good product. Really well positioned. With drones becoming more and more critical to US defense initiatives, I think sky is the limit for them. EOS I'd be cautioned about entering now. I don't know if this is a great entry point. It's ran pretty hard. I would look for a dip back into the 11 or $12.00 range if it gets back there. I think it's it's worth taking a 1% position roughly. Again, not financial advice, but I think Amprius is at least 80% undervalued at its current price right now it should be between 18 and $20.00. I think it should have been there last year. They are moving towards profitability. They've increased expansion lithium ion they just powered a drone that ran for like 72 straight days in the stratosphere, which is pretty remarkable yeah. I would I would check out those two I really like them, but I think the entire space is needs to grow at like 50% kegger in order to support all the byproducts that are going to come out. I listen to you. I think you pitched me on this before and you may even send me a note about it and I didn't buy it, but I like I like the the positioning on on the drones and them the battery technology and I don't have any exposure to the sector. So I just bought some shares in the after hours session as as I was listening to you as just a starter position, right small, but like that'll allow me to to watch it start watching it trade and maybe on any major dips, I'll add a lot more. Like if it gets below 10, that's where I'd be adding more aggressively. I just paid 1161. You should have told me that before I paid 1161. No, no, no. I mean, that's where I'd be adding aggressively. I think everything under 1213 bucks is worth adding, but it wouldn't be like a big position that I'd be staking at the moment. Don't worry, I'm not a child. I won't yell at you if it goes down. Like a lot of people on the Internet, I, I take no responsibility, but I've got a pretty sizable position, not probably your starter positions, probably 5 * 10 X what I have. But no, I mean, there's no, there's no liquidity in the after hours. There's no way that I could add more than you have. I just, I'm putting in thousand share lots, just trying to get someone to sell some to me, but it'll be easier tomorrow or like the next time there's a draw down. Yeah, just with Amprias or AMPX, their, the revenue's a bit lumpy right now because of their product mix. So their biggest concern over the past year was their gross margins. They were like -167% and they move from that to like profitable gross margins within 12 months, which I think is extremely bullish for them because that was the biggest thing holding them back. They've been like listed as a green partner for Amazon. They they do work with, I want to say it's best, but yeah, it's a, it's a really promising company. It's teeny tiny right now. Sky's the limit for them. Drones are incredibly important. 90% of the batteries today come from China. the US military has mandated that we can't use Chinese batteries for military operations any longer. And you can obviously make that for obvious reasons. Plus you have the tariff stuff. I mean, it's just buying American made right now, especially for that is at an all time premium and it's extremely imperative. And I, I just, there's too much fuel for that fire to, to not take a stab at it, in my opinion. So sorry, I went on a little bit of a rant there. Relentless. I know you're asking Mike, but I've done quite a bit of research in the battery space. Those are two of my favorite. I can send you a list of other stocks that I have on my watch list or that I've owned that I think are worth looking at that show potential. But just just remember right, batteries are it's not a one size fit all. There's so many different ways in which batteries are going to be extremely important for AI growth that don't think because you own one that you you know there's no room for the other. Like you said, EOS and Amprius are both battery companies, but they play in completely different stratospheres.
Speaker 4: Yeah, yeah. No, I'll, I'll take the list for sure. And yeah, thanks for your inputs and yeah, I appreciate it.
Jeff: Yeah, no problem. Happy, happy to help. Small cap, we'll go to you and then JWH. Hey, what's up, guys? Thanks for having me on. Mike, I got a question for you in a little bit of a different sector focusing on real estate. I saw that you posted today that you added to your, your open position and I I actually didn't know that you were you were in open. I'm happy to hear that. I, I took a starter on in open the day that Trump announced how he wanted to ban, you know, Wall Street from investing in single, single family homes. And so I guess I have a two-part question. It's basically your thesis on open because I've never heard of, I've never heard you talk about it. And my second part is, you know, there's a lot going on in the, in the mortgage world right now. Like Trump is basically there's like a $200 billion housing push, federal funds and just incentives to boost affordable mortgages and like home construction. And I don't know if you saw a bill, Bill Poult. I'm, I'm not sure if I pronounce his name right. He said that he's going to match it by committing like the exact same same number billions through its foundation just to expand whole building and and mortgage relief. So I'm wondering.
Speaker 6: If.
Jeff: You know, if you have a view or what's your view on investing in mortgages right now to like whether it's M, you know, agency MBS or MBBETFS or V, MB B. You know, I was looking at it and I think, you know, yields are pretty solid right now, like 4 1/2 to 5% on the agency mortgage-backed securities. And if Raty's further, you're going to get decent price upside. So I'm wondering if you think that like Trump kind of injecting massive liquidity and capital into housing and mortgages could could juice MBS returns or if maybe you see it as like triggering A refinance wave?
Speaker 1: So I was.
Jeff: Wondering just what you think of mortgages in general. And then I mean, literally last week I thought Trump kind of just told us without telling us to buy mortgages. And I don't want to miss a Trump signal because every time he tells you to buy something or buy the market, it's it rips the next day or the day after. So I was just wondering your thoughts on that sector. That's not entirely true that Trump family's been saying, including his sons to be bullish on various things over the past 12 to 15 months. And actually most of them have been short term negative signals. So and we've seen a lot of noise in the way a lot of assets are trading based on Trump activities and and largely like those things haven't followed through. So Trump has nothing to do with my thesis. I'm a long term bull on residential real estate structurally, because I think AI actually makes physical locations more valuable, something I've been thinking about a lot over the last few. I mean, really, since the pandemic, first, the pandemic allowed the most successful people in the economy to work from anywhere without any explanation, right? So like before that, I used to work from home anyway, but I'd have to explain to my board why I was in Jackson Hole for two months every summer, because someone would talk to me and they would tell my chairman of my board, Mike's in Jackson Hole for two months. And then I come back. He's like, what are you doing in Jackson Hole for two months? And now nobody cares, right? As long as you get your shit done and you deliver whatever results you sign up to deliver, it doesn't matter where you are. And no one, no one's ever going to ask you. And so it increased the value of residential real estate in different places than it used to be because they used to be highly concentrated in places where people had to work because they had to show up in an office to get paid that much money. And now you can get paid more in some cases by not living anywhere in particular. And then AI in particular, because there's so many experiences people are having online now, they don't feel real and people don't know when they're watching a video or interacting with somebody, whether it's a real experience or not. The value of physical spaces where you go meet someone in person is, is, is actually going up quite a bit. Like, you know, for example, like high end country clubs for the wealthy type of thing. Like those spaces are now increasingly more valuable because you're not sure what you're seeing when you're interacting with people in a digital space. So I, I think that even though we've been stalled out because of the combination of, of prices that are pretty high because the, the asset class has been financialized over the last 30-40 years, right? You got a lot of corporate buyers, you've got a lot of speculation, a lot of people using homes as effectively a store of value because they don't want to own gold and they don't trust money in a bank account and they don't believe in Bitcoin yet. And so they're using homes as a store of value. And then and then rates being too high because the Fed has been behind the curve and and too political trying to. Fight the impacts of tariffs, which they thought would be inflationary, when in fact it's been the opposite. I mean, it's been a, the Fed's been a bit of a disaster candidly over the last six or nine months, but we are where we are. I still think like, again, this is my three 5-10 year view that residential real estate in the right markets, for example, domiciles that have low taxes, low property taxes, no state income taxes, lots of services relative to like the general ease of doing business in those areas. I can give you a list of some of those places. But I think those places, those places have a 20 or 30 year run here where they're actually going to become more valuable. Because in an AI world, you'll have more higher earning people who can live anywhere and are going to progressively decide to stop living somewhere simply because they lived there before and they're going to start moving to the place that actually optimizes their advantages. And it doesn't help that you have all these wealth taxes, billionaire taxes, etcetera, being thrown at people in places like California and that's obviously accelerating that migration. So I've been looking for different types of investments. I've made a number of real estate related investments in private companies, one of which was the services company that helps renters from large buildings be able to access various services. That's been a pretty successful investment and I, I was a seed investor and advisor there. I recently invested in a company that financializes home equity, right? It allows you to swap a minority stake in your home equity for an account with stock, bonds, Bitcoin, etcetera. So it's effectively like a partial liquidation, a partial realization of liquidity without actually having to sell your house and without a payment. So a home equity line, you take the home equity line, you invested in Bitcoin, for example, or stocks. Now you got a monthly payment, you got to pay back. And if you stop paying it, you could effectively be foreclosed on. And so we, we developed a product that's now been approved by the SEC to start being operated nationally and offered nationally that allows you to basically swap the equity while still living in the home and still controlling the majority of the home and basically all the decisions. So basically the only thing that changed is that if you were to sell your home in the future, the whoever provided that equity capital now owns X percent of of your home equity, but you still have the account, which hopefully is growing faster than the value of residential real estate. So these are just examples in the private market. So I'm exploring like new products, right, that allow consumers to do stuff. I'm exploring services in the public market. I think open door is one of the best examples of a of a turn around situation where you have new management, you have a new board, right. So you have new leadership, new board, you have some new ideas that are going to take advantage of this sort of evolving both market environment where rates are going to be coming down and prices are still too high for most people. And so you need alternative approaches to make that home ownership possible and and to ease the cost and expense and time of of doing transactions. And so you got to turn around in, in the right market at the right time, effectively where because I don't have any other exposure like that in my public portfolio, it, it is the most logical place for me to take a, a position. I've actually just been sort of looking for an opportunity to increase that position. And I, I love to do that on weakness because really nothing about my thesis has changed, but the price is a lot lower than it was two or three months ago. And so you'll see in my 13 F that comes out in the middle of February. But I actually took that position down quite a bit at the end of the year, a combination of just had the opportunity to do so, had some other positions that I wanted to to increase at that time. And I was sort of hoping and waiting for a moment like we're seeing now where the stock is trading like they're going to do an offering or it's going to go lower and it very well might go lower, might go to 550 or 525 or even below 5 again. But I think any of those prices would actually be buying opportunities and I would be looking to maybe take the position over a million, maybe up to 2 million shares at the probably maximum if the opportunity presented itself in the next couple months. And I think the stock will do better and the company will do better a as they finally get to execute the strategy that the new team and the new board is developing. But also because of macro factors that are likely to make real estate, especially residential real estate related investments in the USA better proposition generally. And again, I'm investing along the spectrum from public company equity like Open door all the way to, to seed stage private companies that are doing new swap products for consumer homeowners, right? The I like the whole spectrum of those ideas. And, and because of AII think that the sector, again, AI will disrupt some aspects of home ownership, but it won't, it won't disrupt home ownership itself. There's no AI platform or program or AGI or anything that absolves human beings from the need to put a roof over their head and have a place to bathe and sleep and raise their kids. And I think the value in a post AI world actually accelerates to the upside. And it's, it's, it's been masked in the short term by high home prices, stagnant wages, high high mortgage prices, etcetera. But those are all temporary sort of macro factors. None of them are specifically structural. And I think home building can actually accelerate with the right set of regulations. And one of the reasons why like I like Lennar, I actually again, another position that I took up and then took down, took up again and then it ran the beginning of this year and I took it down again. So I'm, I'm trying to find the right entry point on that for like a more long term investment. But I do think the home builders will probably do fine too, especially if we get a real economic cycle, which I expect to happen starting this year where we get the ISMPMI back over 50. We get short term rates starting to come down more aggressively. We get more visibility on like this post tariff, post immigration focused post, you know, like Venezuela and Greenland and all this noise geopolitically, right? Like we get to some steady state where people feel confident investing. I think we'll get a real cycle and that's where you'll see all these cyclical industries like home builders and and things like railroads, transportation sector materials. We're trying to see that commodities complexes come alive obviously significantly over the last year. And I think all these things are related, right. And I think if you think back to 2000 to kind of 2005, like coming back from the.com bubble and recovering from the NASDAQ getting, you know, punched in the face like real estate actually and like hard asset type businesses did really well in that environment. And I think we're sort of in an elongated version of that now from kind of 2002 to 2026, sorry, 2022 to 2026. Yeah, I, I completely agree with you. I, I put some cash like the last couple days into V, MB, B and, and MBB, the mortgage-backed security ETF. And, and real quick, I'm just one last question. I'm wondering what your thoughts are on the Fed coming, you know, after May, it seems that we're, it seems that we're going to like a less like a not independent Fed. That's kind of just where things are, are moving towards and I and I, I don't know, I'm wondering what your, your thoughts are on that because it just, it feels like the president is basically going to be the Fed. I'm over here laughing. I'm, I'm chuckling my ball. I, I see you're a laughing emoji. Well, I mean, look, I, I, I just, I disagree with the premise, not from you, but just the broad tratfi premise that we believe that the Fed is actually independent. Like it's sort of like believing in the, in the tooth fairy. Like if you're 4 years old and you want to believe in the tooth fairy because it's fun and tooth fairy leave something under your pillow after it takes the tooth. Like I think that's fairly harmless. I think in the context of adults, like 50 and 60 year old adult male investors who believe that, I think it's, it's pretty shameful. the Fed in no ways has been independent. They've, they've gone out of the way to prove recently that they're highly political in nature and that they're highly depended on and, and focused on what's best for the banking sector, which makes sense because the, the board members, the owners effectively of the Fed are banks. So like, of course they're going to advocate now it's better for them if they say it's for the benefit of the American people and the average person. And you can buy that if you want to. And if you think they wheel out a, a nice looking old white man with white hair or Gray hair who seems smart and seems like he cares about you, like a Mr. Rogers character, you might be able to believe that or want to convince yourself to believe that. But like the people they're talking to, or it's not a broad cross section of society. It's like they're friends who work at Goldman Sachs, at AP Morgan, right? And and when those people have issues with the plumbing of the banking system, well, guess what? the Fed steps in to make sure that they don't have any problems, even if doing that actually causes asset prices to go up or inflation to stay higher, whatever. I mean, they were wrong about inflation being transitory in the 1st place. They're wrong now about tariffs being inflationary. They're, they're way behind the curve. And I expect a lot of it is because of the sort of left-leaning liberal bias coming from a lot of these, these banker types, right? That the, the Jamie Dimon's of the world that and that influence on the way the Fed thinks about the world. So no, the, the Fed is not independent and never has been independent. The, The funny thing and I, I'm not necessarily supportive of everything Trump does, but The funny thing about it is all he's doing when he's doing these shenanigans, he's revealing a truth that was there all along. It was always, it was, it was never independent and it was always political. And the fact that they tell you it isn't just like they say this is or isn't QE. You could just look at the thing and ask yourself, is it QE or not? It's fucking QEI. Don't care if you have some very technical, esoteric, asinine explanation for why it's not QE, because it is QE, right? And you can tell me, you can look me in the eyes and say I'm not political and I'm not independent, but I can look at your behavior and I can tell you that you are, that you aren't, right? And and that's what that's all Trump's doing. Everything he's doing is just revealing the man behind the curtain. Like the fact that the Fed should never have been trusted, never believed in. Like, if you're an investor and you believe the Fed, right, you should be aware of what the Fed's doing because they are a tectonic level force in markets. And so you don't want to be moving in opposition, but you don't want to actually believe everything they're telling you, right? And you certainly don't want to believe them when they're actively lying to you. And I think the Fed actively lies. Jawboning has a purpose that they're trying to, in some cases, talk down animal spirits, right? Like when, when, when things get too crazy and inflation's going up, up, they're hoping they don't have to use their policy tools. They just want to scare you out of investing. They want to scare you out of hiring. They want to scare the, the prices of goods down. And vice versa. When you have like a March of, of, of 2023, like with Silicon Valley Bank and Silvergate, they're going to come out and say everything's fine and we're going to protect all the depositors and we're going to bail out the system. And it's, it's not a bail out, but, but we're just going to make sure nobody loses money, which is a bail out, right? So they'll, they'll lie to you an inflection point, They'll tell you it's not, it's, it's not political. They'll tell you it's based on their independent assessment and it is not. So the premise is wrong. And therefore there's really nothing else to address in my opinion about that question. Did I lose everyone? Is penny ether still there? No, I was going to let the silence just build. I really like the awkwardness just building.
Speaker 4: I actually think, what does everybody think of Rick Reader if he becomes the the new Fed chair? I think that'd be ultimately really good for the market.
Jeff: I don't think it matters who it is to be honest, as long as they just bring rates down and juice the economy and let it run hot, which is the only person that Trump's going to allow in there. The only thing I'd say about reader, I called this out three 4-5 years ago when he was running like he's head of like asset allocation or something for, for BlackRock. Then he was saying positive things about Bitcoin well before BlackRock was aggressively moving in. I mean, people will forget this now, but BlackRock was working on things around Bitcoin as far back as like 2019-2020, 2021. And I think the FTX stuff, right? And the the three arrows and the grayscale shenanigans largely scared a lot of institutions out of their investment program that they were making at the time because they're like, wait a second. We need to figure out whether the underpinnings of this space are just fundamentally fraudulent, which I think is a reasonable thing to do after a bunch of these idiots blew themselves up during the last cycle. But but I think if you would think back to that, he was pretty early. Like he, he he liked Bitcoin before Larry Fink, like Bitcoin. But Larry Fink is just a mouthpiece, right? Like most of the things that happened in BlackRock, he he doesn't do them right. So that's why when he talks about Bitcoin, he doesn't sound that great. Like he, he gets the high level concepts, but he didn't develop them. He's relatively late even within BlackRock and thinking about this stuff and reader was was was way, way earlier and and believed in like Bitcoin as part of an asset allocation mindset, A broader asset allocation strategy like 3-4 five years ago. So I think I think in that sense, it's bull. If you already have Besant who likes Bitcoin, showing up at pub key saying positive things about stable coins, and then you'd have a Fed chair who was bullish on Bitcoin before his employer was. I think that's a nice setup for a running hot type of scenario, which will dovetail nicely with the AI CapEx cycle, which even if you're a bear on it, that's fine. If you want to be a bear on it, it's done. You're going to lose a lot of money relative to people who are bullish right now. But if you want to be a bear on it, it's going to be still hard to model the slow down in the CapEx devoted to that sector for the next two years because it's still accelerating now. And the need for power by itself require significant additional investment at least in the near term. So even if you hit a wall at some point, that wall is probably as far out as like 2028 or 2029. And that's a nice window in there for the cent Trump reader and sort of the cabal of people let Nick, who are sort of pro Bitcoin, pro AI, right, pro stable coins to use all these levers that they're going to have access to at the same time to to juice the economy. And that'll eventually lead to probably a crash at some point, right? But it's not going to happen when the, when a lot of these things are just starting and that's where people are going to get it wrong. They're going to be like, well, this is going to crash. And you're not wrong. Like eventually everything crashes if it runs too hot. But you don't get crashes when you're still going from sort of cold, lukewarm to hot. Like that's actually the best time to invest. You want to capture the 3rd to kind of 8th inning of the move. And I think that's where we are. We're somewhere between the 3rd and the 8th inning of the move broadly and some of these mega trends. And so now is not the time you, you want to become more conservative, more defensive in positioning as that process progresses, but you don't want to become too defensive too early. You, you know, because you, you're at risk of missing the, the vast majority of the move. Like if I think back to the late 90s, for example, you were correct in saying in 1997 that there was a rational exuberance and, and Alan Greenspan did say that. And you're correct in saying that some of these Internet companies were overvalued. That was absolutely correct. And, and three years later, four years later, a lot of them blew up. The problem was, is that you still had two to three years left of the run and the vast majority and the big chunk of the returns were made in that final year and specifically in the final like 6 months. So you could be right intellectually about a lot of things, but if you get the positioning wrong because you don't understand that we're in the 3rd or 4th inning, not the 8th inning, then you're going to lose a lot of money relative to people who get them The, the, the correct timing on this. And of course, there's no way to get it perfectly correct, which is why you leg in and leg out, right? You don't know, you don't go 100% on margin all in on something at any price and you just try to build a mental model for where you are along that curve and then add and reduce accordingly. Awesome. Real quick for those who messaged me, I put all my battery list in the chat so feel free to take a look at it and you can message me on the side through DM if you if you want to chat about them. Oh, I was going to go to Penny. Penny had been waiting a while. I see they dropped. So Butcher will go to you first then George and if Penny joins they can they can chime in. Thanks Jeff, Mike, George, we haven't had the opportunity to speak before, but welcome to our space. And I had a quick question, Mike or George, given your guys position in the market, two items caught my eye the last two days, notably today, the anthropic raise where their post money valuation if they close this $20 billion funding round will be $350 billion, which is roughly a double since September. And then there's also the news on the equity raise from NVIDIA from yesterday, approximately $2 billion of funds injected into core Weave, I think at a share price of roughly $87.00. How do you guys view those as far as the health of the market goes and when do you think? I'm just curious what you think is holding back some of the smaller Neo clouds, most notably the names that we hold from institutional perception where feels like the larger LMS are able to draw whatever money they want pretty easily right now. And most of them, whether it's open AI and Anthropic will have a IPO towards the end of the year, at least their schedule to yet the value doesn't seem to be flowing down to the smaller Co location or a cloud players yet. Any thoughts on that? So appreciate it, thank you. I don't I don't buy the premise that it hasn't flown flown down. I mean, iron was a, I was on the board man, it was $100 million company. It was under $100 million in December of 2022. And now it's like approaching 20 billion. And I don't think it's, I mean, nothing's happened yet. So the gap between consensus expectations for those companies because they're tainted by the Bitcoin path and what's actually going to happen. That is your alpha. So you want, you actually want people to misunderstand this. You want them to think that core weave is significantly more valuable than iron, right? You want them to think that, right? You want people to misunderstand how valuable anthropic is and say it's a bubble. It's maybe one of the best companies in the history of, of humankind. It's private and most people don't understand it yet. And there's no public mark, but there will be. And I said this many times over the last year, year and a half, like there won't. Be a a significant long term top in this sector until they dump some of these companies shares on our heads as retail investors and they're not even close to doing that yet because the the early investors increasingly in these private companies are wanting to extract as much of the value before the IPO as possible. You know like we took Iron public, I joined the board the month before we took it public at a 1 1/2 billion dollar valuation and it proceeded to drop to 100 million because of the timing. You went out November of 2021 and then you had the 2022 sort of collapse in the queues and the NASDAQ. And in that environment you had Carvana down 98% and Netflix and Meta down almost 70% etcetera, right. And of course Iron was down 90 plus percent. It didn't change the long term opportunity set at all. The fundamental value and which is why I went to the board in December of October, November, December of 22 and said, hey, I want to buy 3 to 5 million shares at a dollar. And unfortunately I wasn't able to to do that at the time because we didn't have a structure yet where a board member could buy while we were operating, you know, an equity line of credit or an ATM. And so I wasn't able to buy until I bought 750,000 shares in the open market starting at like the 250 area. And by that point I'd already allocated some of those other funds elsewhere to Cipher and others. And so I wasn't able to take the 3 to 5 million share position. So I, I would argue that like you want the market to misunderstand irons value like it did in December of 22 and January 23. You want them to continue to misunderstand the value of iron cipher. And to the extent which being tainted by previous association with Bitcoin helps that to happen, that's actually where your money comes from. When you're much wealthier in two or three years, it's because the market got it wrong because of something that you uniquely understand, right? The average institutional investor still thinks Bitcoin is a scam. Like I was at the Country Club the other day and this guy who owns 14, like 20 to $50 million properties at this place all over the world, he was sitting there in the bar yelling at me that Bitcoin was a scam. And I was like, dude, like, you can have your own. I know you're a very wealthy guy. And he told me five times in this, in this conversation that he knew Mark Zuckerberg personally, right? Like, so this is the type of guy you're dealing with. He was screaming his head off at me that freaking Mark Zuckerberg, that he knows Mark Zuckerberg and Bitcoin is a scam. No, I'm sure he's a nice guy and I'm sure we'll be friends in the long run and then in the sort of long arc of time. But this is the, this is the mindset of a lot of people, right? They're like, Bitcoin's still a scam to them. Even really successful people with a lot of money and institutions. And that's why we're able to buy stocks that are invariably, if they exit, you're going to be worth multiples more than than where they are now. So I, I just think, look, this is the nature of being early. It was way harder and way more odd to talk about buying 3,000,000 shares of iron when it was a dollar because people were like, you're, you're insane. What the fuck is an iris energy, right? Or, or buying 7 million shares of cipher when it was still between 1:00 and 2:00 dollars. Like that looks insane because there was only 1,000,000 or 2 million shares of volume in the spring of 2023 when I was taking that position. And that's what you have to do. This is the easy, this is the easy stuff. Wait, so we don't like that irons trading between 75 and and, and 37 and it's painful that the market doesn't fully appreciate yet. Like what's going to be built here. Is that really? Because I actually think that's good. And I think any sort of annoyance about that or whining about that is, is needs to be purged from the body if you're going to be successful. You you, not you. But people in general need to get to the point that they don't feel anything about that you just rationally like a freaking because by the way, we're all going to be competing with robots and AIS that are faster and smarter than us, that more facts, more information. If you are too emotional, those robots will rip your eyeballs out. It'll rip your heart out of your body and you'll be left with nothing. So you'd be better to learn now that there's no emotions and investing that are useful and there are no, there's no crying in the casino. And if the market wants to undervalue systemically your core positions, then you add more. And you should put yourself in a position, in my view, to always be able to add more such that no matter what insane value the company is described in any given moment by the market, that as an active and enterprising participant in the market that you can take advantage of those mispricings. And so you spend less time. Not you. Again, I'm not, it's not a specific comment to the, to the most recent person asking the question, but you don't spend any time complaining about what the market gives you. You just eat what the market gives you, right? And so if the market wants to give you the wrong prices, then you know what to do. And a lot of time the answer is to do nothing, right. And this is the hardest thing I, I see for people in the market that we're, we're, we're just in the 3rd to 8th inning along a number of different arcs right now, whether it's rates or US residential real estate or AI or Bitcoin or the ISMPMI, right, or the 10 year yield, They're all on various, the dollar index, the DXY, right? They're all on various curves and they're all in certain innings of whatever cycle that they're in. And you can say 1's leading the other or one's not leading the other or the correlator, not correlator sort of doesn't matter. It's really about understanding holistically, like the environment writ large while you dissect each one of these individual factors. And what I'm seeing right now is that most of the things that actually matter for asset price return, say we're between the 3rd and the 7th inning, which means that this is the part of the cycle where if you position correctly, you just do nothing. And again, if you do anything, it's just take advantage of the if the market gives you insane prices, like if the market gives you silver at the price that it was at yesterday morning, you sell it. If the market gives you Bitcoin at a price that you know is below its fundamental value, you buy it. If the market gives you an insane price in Core Weaver, Robin Hood, you sell it. And if the market gives you a really good price in a company like Cypher, you buy it. It's not rocket science and there's no complaining needed. There's no, you know, as long as you're not using options, it doesn't matter when it happens. It just matters that it eventually moves your direction. So anyway, that's my long winded way of answering and I mean, not even answer your question, but that's what I wanted to talk about. Thanks for the feedback, Mike. Thank you, George. Pleasure to have you. Welcome.
Speaker 1: OK, thanks. Yeah, I just thought I was listening on the space earlier. The reason I raised my hand there were someone was talking about an open door and I have a very different point of view. I've been publicly short the stock for four months or so since September the 7th. I think it's grossly overvalued. It's, you know, it's a lot. It's all hat and no cattle as far as I'm concerned. It's narrative driven. Yeah, I look at numbers of the fundamental guys, so people will call me a value investor. That's not right. But you know, liars figure but don't lie. And the numbers on open Door, everyone's, you know, hailing the company's, it's now a software company or whatever they say it's going to be. Well it's still a a house flipper, a asset heavy house flipper with low margins. I applaud them for changing their model because what they've done before wasn't clearly wasn't working, but it's going to take a long time. The stock is incredibly expensive, but people don't realize the main public promoter of the stock just financially illiterate. Yeah, they'll cite that it's only on one times revenues and 1 1/2 times revenues. Technically that's true. But if you want to make a comparable valuation, anything remotely comparable, be it Zillow or a broker like Compass or whatever, you really have to adjust for the account. And keep in mind that, you know, open door because they're a house flipper. They take possession of the house and they sell it. So let's just say their average house, I think it's like 400,000, something like it's round numbers. So they buy the house, you know, they'll, they'll, they'll buy it for whatever house worth 400,000. They make 20,000 or so per house, whatever the whatever the number is. But they're showing the full 400,000 in the revenue line, not the 20,000. And you know, these other companies, they're only showing their, their, their, their, their cut. So for instance, the case of real estate broker, yeah, they're not a broker. I get it. But I'm just trying to equalize the accounting. You know, a compass will only show you their Commission, which is 3%. Zillow only shows you their likewise. Let me give you a simple example so everyone can understand this. Imagine. So there's nothing wrong with this accounting. It's totally legal. It's account, it's not the issue. The issue is, you know, accounting is imperfect to attempt to try to accurately portray what's going on with the company, but you know, it has to be taken with care. So for instance, let's say you have two companies, Company A and Company B, and let's say they're both, I don't know, ticket resellers. You know, we're all enraged with the ridiculous fees that ticket brokers charge. So let's say company A sells a ticket for $100 and they charge a 10% Commission. They're just, they're just, they're not even a resell. They're just, it's like one of these online websites. They're just charging 10%, that's it. So they're going to show $10.00 of revenue. Then Company B, they actually go and they buy the tickets from somebody and they resell them. And so let's say they buy them for 10, they sell them for 110. They're going to show $110.00 of revenue and cost a good sold at 100. And so their, their net revenue is 10. So the two companies in, in, in terms of real underlying economics, what's going on, it's the same thing. The only difference is 1 never owned the ticket. They just, they're just, it was like a website website. The other one actually physically owned it. But the reality is leave the accounting aside for a second. The reality of it is both companies are making $10 off what in economic terms, basically the same trade. The difference is from an accounting standpoint, company A is going to show $10 in revenues. Company B is going to show $100 in revenues. So if you're looking at EV sales, EV to sales multiple these two companies, one's going to look ten 110th is expensive as the other one. This is what Eric Jackson does he you know, say, oh, look at look at open door. It's on, you know, 1 1/2 time sales. Look at the comparables, you know, I mean, they're not great compals, but whatever. We can argue about whether Zilla's good cop or not or whether Carvato's good cop or not, but leave that aside for a second. Didn't get there. I think anyone common sense would say, well, wait a second, you know, it's you're right, George. We can't just use a simple gap EV to sales. You have to take into account the difference in the numbers and people don't do this. And so the sort of lazy, theoretically incorrect interpretation, people say open doors really cheap. No, it's not. If you actually look at their net revenues. All right, I'm driving a car. I don't know the numbers in front of me, but they were I think last year was 400 and some odd million and revenues are going down. So let's call it 303 fifty this year. The stock has an enterprise, the company has an enterprise that I have 6 or 7 billion. If you if you adjust it and look at it that way to try and compare it to comparables, it's not a one or 1 1/2 times revenue, it's not 20 times revenues. So that's the first thing. That's probably the most important thing because you know, we can all say it's a good company, it's a bad company, it's good management, it's bad management. But you know, price and valuation is relevant. And because, you know, I can tell you a story about a company, a narrative, but in that narrative, it could be true whether the stocks on one time sales, 10 times sales or 100 times sales. And so there's a fundamental category error here that most every investor's making and any any in most all institutions, by the way, there are no institutions in the stock really. I mean, leave, leave J leave J Street out of these Shaw. These are these are like, you know, quad shops or making markets arbitrage. There are no real fundamental investors being open door. Because if you just take a cursory examination of the numbers, you'll see that it's that it's it's wildly overvalued. There's another way to look at this, too. You can do another check. Open door again. I have the numbers in front of me driving a car. Roughly speaking, book book value is about a dollar a share, plus or minus. Can't remember if it's $0.80 or $1.20. It's some number like that. And the stock is, what, 5 3/4 now. So it's on like 556 times book value for a company which still is a home flipper. Now, hopefully, yeah, they'll transform something else in the future. But right here, right now, the revenues are from home flipping. OK, And stocks like that, you know, you say, OK, well what should that sell at? Yeah, you look at home builders, they're like, I don't know, 1 1/2, two times a book, you know, there are a couple other, I think flippers around. There's something like around book value or thereabouts. So if we just say, OK, let's be general. So put it on 2 * a book, books a dollar, you get $2.00. I put it on EV to sales. Multiple, I get a dollar, I put it on multiple book value, I get $2.00. And people say, well, you know, that's a that's old school. It's a new company. That's right. But the problem is let's see if they execute, if the plant works, it's if there's no reason to think that it is going to work. But let's just talk about that a little bit. Keith for boy has been very successful in many of his ventures. But I'd like to point out, you know, he and Eric Wu are the driving force. They, they, they've had it open door and they basically ran the company into the ground. So people say, well, Carrie Wheeler came along, blah, blah, blah. I'd like to point out the Eric Wu was CEO of the company until the end of 2022 and they already lost billions of dollars. Keep in mind that since inception, Open Door has never made a profit, never on a full fiscal year, never. There is accumulation of $4 billion of losses since the founding of the company and most of those losses were occurred, you know, before 2023 And actually, you know, you look at 2023, don't blame Kerry Wheeler. I mean, they'll even tell you it's a slow moving business. You know, what happened 23 was largely the guy was cast by already what had happened the way the company was set up by the end of 22 and Eric Lewis still there. So this company has never made money. They're ruthlessly competitive, low margin business. They say, yeah, we're going to go to services and mortgage title, all this other stuff. It sounds good, but there's nothing they haven't shown anything yet. I know things take time, but the market hasn't taken time. The stock went from at its low of $0.50 to thereabouts in the summer, got up to like 10 bucks. It's now like 5 or three quarters. I think it's wildly overvalued. They've already told you they're not going to make money. The first they're guiding towards the first break even quarter be the fourth quarter of this year. So this will be another loss here. So the first by their own numbers, not mine, the first year they're possibly make money is 2027. And if you start playing with the numbers and start saying, OK, well, you know, let's spend, let's talk about the cycle, let's talk about the future. And you know, Eric Jackson goes to his home rigging parole about what happens if the volumes go back to where they were. So let's say, OK, roll forward. We're not buying the stock, the base of 26 or 27, dream a little bit, you know, pencil in some volumes for 2829, put in some margins and then and then see what comes up. And the problem is on an EV to sales base, so expensive, can't get from here to there. So I would say even if they hit all their benchmarks that they're aspiring to, you know, maybe the stock's fairly priced, maybe all right, But in no way, shape or form is this thing worth, you know, anything of which should be more than it is certainly not worth 33 or 82 or 500. It's just it's just craziness. And last thing I'll say, and I'll stop, you know, people will say, wow, that's the past, George. You'll look at the past numbers. That's true, but as I was taught by my mentor, Peter Lynch, he studied a company's record and to get some idea of, of, of you know what past performance off with companies is a, is a, is a good guide to future future returns. This company, as I said, has never ever made money. Keith or boy is a disaster when it comes to real estate. Tech bro. The history books are littered with tech bro trying to make money in real estate. Real estate's different from a lot of other things. It's, it's, there's asymmetrical information advantage to the, to the seller. And so I, I just think, you know, I wish him a lot of luck. Maybe it'll work, but I think the market has already discounted so far ahead. You know, here it is, you know, it's this home flipper selling 20 times revenues that it's more than in the price. So I, I only found out about the company in September. I was in a space and Eric Johnson came in, Eric Jackson came in and started talking about the company. And I was like, are you kidding me? And when I, when I hear people talk like that, the sort of evangelical, you know, it's not like, you know, I think the stock go 50 percent, 100%, whatever. No, no, this is going to go up 100X or whatever. I'm like, to me, that's a huge red flag. And so, you know, I've taken a lot of arrows on open door last few months. I've been on my own jihad against open door very publicly short. You know, I got interviewed by a bunch of people and been out there and I just by my lights, I wouldn't touch this thing with a barge pole. I think, you know, people throw macro narratives. Oh, bonds are going to rally this, that and everything else actually have a very different view about that as well. It may cut rates, but I think, you know, they control the short end. It's not going to help the long end. To the contrary, I actually think the long the long bond yields are going to go up. And so I just think from a micro standpoint, from a macro standpoint, I, I, I just don't see, I just don't see the value in the stock. And you know, all right, so I, you know, I found out about it in the sevens. It's now five or three quarters fine, whatever. But you know, the stock was, it got down a low of $0.50. It was, you know, it was a spike level. It was really like 1 or $2.00 for the longest time. And I think that's where it's going back. So this is not a get rich quick short. This is an investment short, you know, I I expect this year and who knows people date or price, never give them the same at the same time. But even though stocks down 25% from where I went short, I think it's been materially lower. So I set a mouthful there. If anyone has any questions, happy to answer them. But but I'm I'm probably you know, I have nothing good to say about open word. It is a four letter word. Thanks very much.
Jeff: I just want to say that I have always respected George. I think George is a great fundamental analyst. I think we had a conversation on Spaces about Bitcoin as far back as like 2021. And I respect anybody in this market who wants to be short. A lot of the short only funds have been blown up because structurally when you have these really low rates and too much liquidity for too long, in addition to inflation, you basically make it impossible for short sellers to survive because there's nothing to eat because the the prices of everything are sort of systematically pushed higher. So. Look, as a as a fellow practitioner in the markets, even if I disagree on open door, I do respect the gumption of anyone who wants to take any sort of single name equity short right now. And particularly on names where the narrative is so is so amplified and there's so many supporters. I don't like to be on the other side of those narratives unnecessarily. Like I actually don't disagree with that many of the things that George is saying. I think that is a pretty good summation of the bear case and a summation of some of the things that haven't worked and aren't working now. But I'm I'm not sure that means that the stock is going to go back to one to two $3. In fact, I think it's much more likely the stock goes to 20 at some point. And I think it'll be really hard to hold technically it would be really hard to hold that short for a prolonged period if it if it makes a move like that, which is why I prefer to short indexes candidly, like when I want to just hedge and I want to net out my exposures like a really easy way to short the S&P. It's a positive carry trade because you cost you 20 bits or 10 bits to borrow it and you get paid like with with a broker like IBKR, you're getting paid 4.34 point 4% on cash. So you're making money shorting just on the carry. And then if you, if it actually provides some reasonable downside protection grade and also there's no idiosyncratic risk that like a company like Open Door catches the, the meme stock bid again at some point in the next two years and and goes on a major RIP. And again, some of those things could be for reasons that are non fundamental and they're not specific. They're not, they're not, they're not open door specific even like if the residential real estate market in the US heats up because of a number of factors, which I actually think is likely, then Open Door will be a beneficiary. Even if they don't get the business model right. But if they also actually get the business model right. And, and Keith Robot does his job and the new CEO does his job and they actually change the culture and the focus, which is, which is to George's point is not a foregone inclusion and, and may fail. But if they do get it right and the macro is supportive, that's where you get these really sort of exponential type of outcomes. I'm not calling for 82. I personally don't think that 82 is likely anytime soon. It's possible, but not likely. But I do think at $5.80 the asymmetry is, is pretty skewed where you know, maybe you go back into the fours, maybe even threes possible. I think ones the twos is is less likely outside of a major recession or an environment where like the QS would need to be down 20, thirty, 40% and the IWM would need to turn around after just breaking out after many years and go into a bear market. I think in order for that to happen because there isn't enough structurally wrong. There's nothing. There's nothing in the balance sheet, there's nothing in the company right now that's going to cause it to become so impaired that just on an idiosyncratic basis it would go to 1. I can actually see one in a macro LED major sell off or two. I can see that like a 2022 type of scenario where everything in tech and everything that's not profitable and everything that's sort of out of favor just gets shellapped for 12 months. But to me that that seems like the least likely outcome right now. It seems like given the macro for the way they're setting up, that actually the next 12 months is highly likely to be the period where they actually run it super hot and you get a blow off top, not a not a major downturn. So in in that, in that instance, it's it's the scenario where if open door starts to go back to 6789, whatever. Like I just would wonder if I was short, I'd wonder like at what point would I cover or would I just let it run me over? You know, my downside is capped, right? Because the worst that can happen is the stock goes to 0. As of today, I have I think the as of my last 13 F reporting period, I had 25,000 shares. So going going into this year, I had 25,000 shares and I actually had 0 shares for, for a couple weeks and then now I'm at 800,000 and most of those were purchased in the last two days. My average is like 590 something. I think it's it's looked as 597 area. So like, you know, worst case scenario, the stock goes down to one or two and I change my mind and I sell it and I lose 3 or $4.00 a share on 800,000 shares. Like not fun, but also like totally survival and not a big deal. If it turns and it goes to 20 though, you know, you're, you're getting $14.00 a share on 800,000 shares. And that's that, that is a more material type of type of outcome. Like that would be the gain would be about 767 percent of my fund, which should be good, right? And, and so I'm more than happy to, to, and I'm doing the same thing with Strive. Like everybody hates Strive right now. And I totally get it, right. Like it's a, the Bitcoin treasury model is way out of favor and even people who like Bitcoin hate it right now. And, and I get it, but if Bitcoin goes to 200,000 or 300,000, it will work again. It's not rocket science. It's like the question is only how likely do you think it is that it will do that? And my view, which is different than George's and different than a lot of other people's, is that over the next 10 or 15 years that there's something on the order of 90 plus percent chance that Bitcoin goes to $1,000,000 a coin over 10 or 15 years. And I know my probabilities are different than the option market. I don't think there are options yet for that far out, but even for options for a year or two out, like most people don't think those anything like that's going to happen anytime soon. And most traffic people still think Bitcoin is a scam. So of course they're going to be bearish on strive. And it trades like it looks like a penny stock. It trades like a penny stock. And and so did old, so did cipher and iron three years ago. So I like those asymmetries, though I actually need George and other people to like hate some of these ideas and in some cases be short because if they're occasionally when they're right, you actually need people to cover, you need people to capitulate the other direction. That's the only way you get these exponential type of returns. You need most people to be out of position and you need consensus expectations to be wrong. And if too many people like George liked some of these ideas, I I wouldn't be as interested because it's unlikely that you would have the same type of upside opportunity. George is 100% correct, though, that open door could go to one. He's 100% correct and go to two. It could go to zero and anything's possible. But if I take enough bets that look like open door over a period of time that are that are sized appropriately, I'm confident that the result of that is positive.
Speaker 2: So Mike just mentioned Strive. I just bought a bunch of Strive today. You can see my profile for that. I think you can spend a lot of time being complicated.
Speaker 3: But I think it's.
Speaker 2: Important to be very simple when investing. So what have we seen over the past few months? Gold, huge rally, Silver, huge rally, Copper huge rally. And what are they? All commodities? And what is Bitcoin a commodity? So that's why I bought a bunch of ASST calls. Wanted to hear what people's thoughts, bull bear thoughts, anything.
Jeff: Well, I mean, I'd just be careful about using options for a company that's in in transition. I really like companies in transition personally, companies at various inflection points that I understand or at least believe I understand better than the market. I mean, this is a company that just did a acquisition that doubled the effectively double the size of their their balance sheet at the same time that they're doing a reverse split and some other things on this sort of capitalization structure. And so like, while it's in motion like that, it may take a while to kind of burn off some of the negativity and some of the overhang. But if Bitcoin again goes into price discovery, it's probably going to survive. It's probably going to going to surprise people more than MSTR because MSTR is at least by people that watch this market and understand Bitcoin like pretty well understood. It is very likely to be the largest Bitcoin holder in the world over the next 10 years and the the largest issuer of, of securities related to Bitcoin. And that's all well and good. But if the market already fully understands that, then how does the return of MSDR diverge from the return of Bitcoin itself? As the sort of constitution of their balance sheet largely is entirely Bitcoin. And as it gets bigger and bigger and bigger than in my view, the returns will converge with Bitcoin, which could be fine if you're OK with 30% kagers or something like that. But I think the issue is just why, why take additional risk to buy a corporate holder of Bitcoin if you're effectively going to sort of approach the the commodity return of the underlying asset that that company is accumulating? Because as their balance gets bigger, it's just sort of the law of large numbers and gravity. And so the reason why I like Strive is, is, is because it's in transition because most people don't even understand fully what they've done so far. And they are competing in that preferred security market. You know, MSTRSSTRC at an effective 10% yield and, and you know, SATA is at an issued 12% yield, but but it's trading at a discount, slight discount trading like 3% ish below, you know, the, the par value. And so you're getting 12% plus a little bit there. And they have to do that because they're smaller. And you can sort of think of those numbers as like the cost of capital because as long as those companies can issue those securities and then go buy Bitcoin, as long as the Bitcoin returns over say 10 year, a 10 year. More than that cost of capital, then whether you like it or not, they can continue running that model. I think the issue is the smaller companies, right, don't have this fortress balance sheet. They don't have 10s of billions of dollars of a Bitcoin on the balance sheet into a Bitcoin falls 60% in a year, which it tends to do approximately every three or four years it falls at least 60%. Then the problem is the sequence of returns doesn't match the requirements of all the capital that you've issued because you've effectively you're on the hook for these payouts, which of course you can pause. But if you pause, that's going to, that's going to plummet the value of those securities and, and raise your cost to capital and effectively make it impossible for you to run that strategy. So it's a stopping the distributions of cash on those preferred securities is effectively the same thing as as death, because no one's going to trust those companies anymore. So when I, when I look at the space now, what I see is, OK, I could I go to MSTR, but I might as well just own Bitcoin with that, because I'm probably going to get a Bitcoin like return. If I want to try to swing a little harder it for a small portion of the portfolio where I'm looking for more leverage. Then one way to do it is to buy the company that has no securities on the balance sheet, right? That would require a bankruptcy filing, no securities on the balance sheet that would require that would predicate insolvency at some point. And so that means that precludes buying anything that has convertible notes or straight dad or any of these other structures, right, Bitcoin backed dad, etcetera. That could cause a liquidation event at some point in the future. And that that basically leaves, especially after they retire the similar that the convertible notes that were issued as part of that. And then they related to cap call, they'll have a once again, a pristine balance sheet that basically only has equity, a little bit of warrants and then preferred. And so the common equity, you kind of get a much better sense of what the value in Bitcoin terms is likely to be along that curve because there there's no exploding situation that would would trigger any sort of liquidation of the Bitcoin or liquidation the whole company such that the equity value would go to zero. Yeah.
Speaker 2: That's what I'm.
Jeff: Thinking about it and I think if you have enough time, I think the one thing you're doing by buying calls is you're taking away your, your secret weapon, which is duration. If you're able to wait long enough and, and, and we're right again, two things. One is you need to be able to wait long enough. And two, you need to be sure that Bitcoins going higher. But if you're right and Bitcoin does go to 234500, I actually think it's virtually certain. But I look, I have a different view on this than most people in the market. But but if that happens and you have enough time, then you almost certainly will do well with that security. If you buy call options and the you know the the dealers decide that there are too many calls purchased in a certain area, then you may find additional pressure in addition on your position, but also in the market as those dealers are hedging and doing things to try to keep the price in a certain area to minimize their losses on the on the calls that they sold. So I would just keep that in mind when you, when you buy those call options on a stock like that, you're actually potentially making it harder, significantly harder to make money when the leverage is already actually embedded in the common equity. Because if Bitcoin goes to 200,000, you're going to get a call option like return on on the actual underlying equity without even needing to use calls.
Speaker 2: I thought George's hand was raised. Do you have something to add? Hey, George, quick question. Were you shorting iron as well?
Speaker 1: Hold on. I was, I was just trying to get on the mute button. So I guess I was going to ask Mike, I have no position in in Strive or any of the Neocloud guys. Mike, could you just give the napkin math on strive? Like, you know, it's a lot of moving parts. So for those of us just got to just keep it simple, stupid. The napkin math like, you know, enterprise value, how many bitcoins they have, blah, blah, blah, blah, blah. I mean, like like micro strategy, simple, have to figure out, OK, but there's so many parts on Strive I haven't spent the brain power to figure out like, you know, the numbers, the leverage, the M NAV, all that kind of stuff. So what is the what's the napkin math on strive right now, Mike?
Jeff: I mean the basics as far as I know right now is a little over 12,000 Bitcoin in the balance sheet. They just issued another tranche preferred. So I think collectively now that's got to be 300 million or so. And I'm not even sure that they finalized the the number. I think, I think they may have somebody correct me if I'm wrong and then they've got another at today's price, what is it 800,000,900 million of of common equity, something that range. And again all those numbers change because of the acquisition of similar. But I'm not I'm personally not betting on stride because of the current situation. So you know, you can tell me what you think of the current situation. I'd actually be interested in your view on that just like I was interested in your view on open door. What I'm betting on is something a little bit different. I think irrespective of the the current set up in terms of the cap structure and the amount of preferred and the amount of Bitcoin. What I find most interesting is the caliber of the team and the related experience running bond portfolios and and evaluating debt structures working for one of the major California endowments and then the team that he's positioning around him. Because I think there is something real in this preferred equity issuance game where it can create a sustainable long term business. Possibly because because I look at like my mom's retirement portfolio and I say, hey, right now I'd be lucky if I can find her some really safe looking equities that are kind of 5 or 6%, maybe 7% MLPS and tobacco. Like actually those MLPS and tobacco, I could buy EPD and Altria at an 8 or 9% yield at their low prices. But now, because they perform well, like the effective yields are lower. And, and so I look at what Taylor and, and Shriver doing and I look at those securities and I go, if I actually think that Bitcoin is going to be higher in five or ten years, then I actually think 12% or 10% yield is, is, is probably being viewed as too risky by the market. And it may be less risky than that and may actually be inappropriate as a small percentage of for example, like if my mom has 80% of her portfolio and dividend equities in 20% Bitcoin, I might actually want to shift 10% of that 80% into SATA or STRC. Because even though there's more risk in those products relative to Altria equity or enterprise EPD equity or or Pepsi equity or whatever, the return is significant enough, Especially when you look at the balance sheet and you say, OK, there's enough cash on the balance sheet. For example, on MSTRS case where they can actually pay, they can actually pay the, the, the yield, the Fiat yield on the securities for several years such that if you don't see a path in six, 1218 months for them to sustainably do that, you can always sell your position, right? And so you get the, the yield during that window that you hold it and then you get probably your money back. Hopefully if you, if you sell fast enough before there's any signs of distress on the balance sheet. Again, I don't think MSTR is going to have that issue, which is why their preferred securities are are priced at 10 on the yield and and SAT is priced effectively well above 12 because the, the current price is 97, not 100. And so I'm, I'm really like underwriting this again is a highly asymmetric situation where I really don't care too much candidly like because the equity value is priced like it's never going to do anything. Right now. It's priced like it's just going to do nothing and the Bitcoin just going to sit there and it may not go bankrupt tomorrow, but it's not going to be a successful investment. And I think that if they nail the preferred security issuance that and if Bitcoin actually goes to 150 or 200 that that stock price can go up some multiple of bitcoins return, especially during that early part of that window because we're transitioning from a period where they just did an acquisition, right? They just issued their first preferred securities very recently. The market doesn't understand the stock at all. I am comfortable with the balance sheet that it's not a zero and short term. And so I can hold it for 12 or 24 months and wait to see as they execute. And I think again it's asymmetric where you got 79 laws of now $0.82 of downside and maybe you've got 5 to $10.00 of of upside in that window. And so as a 2% of portfolio long like I'll take that type of setup everyday, especially because I don't have anything else that looks like that. And so I don't really like, I don't really, you can look up all these things, you can use Tachi BT and get all the information. And I know you can, you know this and you don't need to do that. But like, I just don't care, right? Like that's, that's not part of my thesis. I'm, I met with the team multiple times and I asked them a lot of questions about what they were going to do. And I like the answers. And I talked to a lot of management teams. And a lot of times I don't like the answers and I don't like the people and I don't trust them. And that's why I joined the Board of Iron when it was a small company because I, I had a sense after meeting with 40 teams in the Bitcoin mining space that they were the only team that could execute on the strategy the way they were describing. And my view is that the Strive team, after talking to a lot of the CE OS of the other Bitcoin treasury companies, is maybe the only team that has the right stuff to build into this market over the next 10 years. And that's sort of my time horizon. It's 5 to 10 years.
Speaker 1: So I, I, I get that. That makes sense, I guess. So let's assume that everything you're saying is correct. That pans out the way you hope it pans out. That being said and the read across OK, it's different, but there's a common principle here just as it is a case if you know you look at micro strategy, you'd want to know if I'm buying at a premium discount, whatever and you want to describe value to their to their treasury function, fine, but as a starting place, you want to know is it selling it you know, discount to that premium to that whatever. I mean, I think we would all agree, you'd agree if you're buying something like 3 times NAV, it's less interesting than you know, by 8.8 of NAP. So even if I say, OK, fine, let's hope it does what you're saying it's going to do, I still think it's relevant to kind of get an idea of what the underlying valuation is, IE, you know, so let's say Bitcoin goes to one 5200. That's not my view, but let's just go with that, OK? Whether or not you're going to make, you know, double on, on, on Strive or 10 times on Strive will in part depend upon not just the treasury strategy, treasury function strategy, but also what's the starting place evaluation.
Jeff: Is it, Hey, George, last time I looked, last time I looked like before the acquisition it was like 30, sure, 37% premium to the underlying holdings. I suspect that's declined a bit is probably 25 or OK 30 now. But again, but again, that I think Metaplanet is slightly lower, MSDR is lower and some of the other ones are negative, right? They're below 1. But again, I don't, I don't think it the, the, as long as the multiples, I wasn't willing to pay 4X for MSDR. I was selling, I sold MSDR AT3035040450500. People remember this. I held a space the night before MSDR peaked and I said I sold, I sold more and I sold more the next morning. So your, your, your points make sense to me. But again, I don't care about as long as it's reasonable, like not two or three or five.
Speaker 1: Yeah. MMM. I guess what I'm saying is we, we both can be right. I respect what you're saying, but if you understand why more left brain dominant, you know, lumbering boomer self-described. OK, would want to know. Hey, Mike, you know, am I paying 75% of that, 150% of that? To me it's irrelevant.
Jeff: You're paying you're paying a 25 to 30% premium is my OK suspicion it was as high. It was a lot higher. And there was exuberance in these companies and and I was one of the only people warning people at scale on on this platform for a long period of time that that these these kid analysts and chart squigglers getting people to pile in to Bitcoin treasury companies near the peak of euphoria was going to end badly. And it did. But on the other side of the coin, I actually look at them now and I say, OK, everything you just said is correct. I don't even think you need to bet on a on a huge multiple expansion. The Bitcoin price does most of the work because the the nature of the way this works is the the main drag that you're going to experience in these companies is at the early stages when bitcoins not performing and it hasn't performed. It's been an underperforming asset for at least 12 to 15 months if you're running this strategy, because the strategy is entirely predicated on sustainable increase in the Bitcoin price. So what I tell people all the time is I do this, I do this specific investment with two or three percent of my capital Max. It's a very specific thing that I'm trying to do. I'm only doing it at times of very negative sentiment and where I my personal view is that bitcoins price is undervaluing going up if you don't, not you. But if to someone who's listening, if you don't think Bitcoin is going to 150 or 200, it doesn't matter what what we think about AST or what the multiple is or whatever, it's not going to perform. It's going to be a shit stop as long as bitcoins below call IT10110. But when when bitcoins above 120, if it gets there and you may believe it will or not, it doesn't really matter to me because the market is the market and it'll prove us either right or wrong over time. But if it does go to 1:20 or 1:30 or 1:50, ASST is going to go completely ballistic. I'm very confident of that because it's sort of because of the way it's designed. It's kind of like hyper lever, but only further out along the curve. And the reason why I am confident this is because I made the same argument about the so-called Bitcoin miners at the bottom of the cycle. And I said, look, you may think that that these things should go up 1 to one with Bitcoin when Bitcoin goes from 16, the 40 or 40 to 80 or whatever, but that's not the way it's going to work. What's going to happen is at some point along the curve, maybe it's between 80 and 85, maybe it's between 90 and 115, these things will wake up because you finally get real convexity at certain points along the curve where the market either understands the idea or the economics actually supported. In this case, it was sort of both. But funny enough, the stocks that I was talking about doing it, they actually went up most when Bitcoin was going down. So they went up most when Bitcoin was going down between one O 5 and 100 and down between 1:20 and and 80 a couple times. And a lot of that was because they disconnected from the the Bitcoin narrative and economically disconnected because of AI. And then some of it is just that like the leverage and the sort of multiples you get on anything that's Bitcoin exposed doesn't always show up exactly when you think it does, Which is why I tell people not to use calls or anything that requires time as a dimension. Because I think the only way you can be really successful with Bitcoin is if you take a 5 or 10 year view, any of you that's shorter than that, you're going to just be wrong over and over again. You're going to miss a lot of the big moves up. You're going to be selling when you should be buying and etcetera, etcetera. And so for me, the ASST is the only like Bitcoin treasury company right now that I want to take a new position in because I don't think the balance sheet will allow it to go to 0. And then it gives you time to wait for Bitcoin to go to 150. And again, if bitcoins on at 1:50, I don't care what the price is. So all these people, these got to people that show up and they're like, Mike, ASST didn't go up today and it didn't go up last week. And you, you're, you're wrong. You're a failed investor. And it's like, guys, I mean.
Speaker 4: I mean.
Jeff: Last year alone, just being right about the AI data center sector. Do you think I care that I'm down 500,000 on ASST or down $1,000,000 on a silver short? I couldn't care less. I'm focused on where's the next 100 million or 200 million going to come from over the next 12 months, not how how I'm going to be down $500 on paper. I wish I was down more. I wish I was down more on ASST, but I guess I just need to keep buying more shares. I'm at 5 point 5.4 now by the way. Million but.
Speaker 1: MM, you missed the question. So you're a thoughtful guy and I'm sure you, you know, in the in the name of being, you know, rigorously honest with oneself, one always considers A null hypothesis, right? So, like, you know, if someone asked me, like George, how could you be wrong? I'd open the door, you know, I'd give an answer. OK, so let's not talk about stride. Let's just talk about Bitcoin, OK? If it's not like makeups, makeup a.
Jeff: Scenario, Hey George, George, I don't I don't want to be rude and just drop off my wife is I got two small kids. My wife, your kids are grown. But but I what I wanted to say before I go is this is a long conference this Bitcoin side. We've done this before. We've had an hour conversation. I'd love to chat with you again and thanks guys for having me, but I got to go take care of my kids.
Speaker 2: So see you guys later.
Speaker 1: No problem. Take care, Take care. Take care, Take care.
Speaker 2: Hey, George. So just to clarify, you weren't short iron at all?
Speaker 1: No, I have no position in the neo crowd companies. I've commented kind of negatively, but here's my question, all right? It's a question I have no listen, people always get confused about this. There's one's beliefs and there's one's portfolio. They don't have to be the same thing. All right. So in other words, you may have a particular, you may think, you know, legacy auto companies just make up the story. You may think legacy auto companies are toast. OK, Doesn't mean you have to be short them, OK Or you may think Tesla's a great company. You don't have to be long, OK, So you can have your beliefs and you can have your positions, your portfolio and you know you presumably you're invested in the things you have the highest conviction. OK, So neoclouds with that in mind, I don't have any neocloud positions have never been long or short. I missed all the run up last year. That's fine. Here's what I observe. Let's talk about what's built into the price. Not well, I think it's going to go up or down or you think it's going to go up or down, but what is the market saying? But when you look at these companies, you know they're obviously impressive backlogs announce all these contracts and people will model out, you know how many power they're going to put out, what the margins are going to be and try to put a forward valuation out, that's fine. But when you look at it clearly on current business, on current book value, etcetera, etcetera, etcetera, the market's not buying those, the stock, those stocks on that basis, it's paying for the future. So we can say the market is priced in a lot already. So then you got to start a reverse engineer. What do you have to believe to make these stocks attractive? And what I stumble upon the bulls, you know, pencils and their own assumptions and margins and yadda, yadda, yadda. But, you know, there's execution risk. We a lot of these aren't fixed contracts. You know, costs are going all over the place. So, yeah, these could be great stocks, but also, I could see that they could fall fine on their face. And so I just have no position. I'm here. Reminds me, there's a great line from Dennis Gartman years ago. He was talking about one time he's on the Chicago Board trade. He's with his buddy and they're watching, you know, prices go up and down. I was like something out of Eddie Murphy Trading Places and you know, so his partner turns to he turns his partner, he goes, what do you think? Because it was very volatile. The guy says, well, I'm flat and I'm nervous. In other words, I just don't know. All right, so you know, the bulls in these stocks, they've been well rewarded. They've been great performers. I would just caution everyone to, you know, I'll have to do the work to get to the bottom of it. But a cursory fly over as I wasn't fortunate enough to buy these stocks. I didn't even know they existed a year ago. That was in now is now and I just don't know. I have I have no position. I'm kind of skeptically looking at them because, you know, a lot. I, I think the bulls tend to ignore all things that could go wrong and that's kind of what gives me pause. So I don't know if that's an answer, but those are my thoughts. I don't. I don't have a position.
Speaker 2: No, I there's someone in the comments that that was saying how's, how's your iron short doing? So I just wanted to give you the opportunity.
Speaker 1: There's there's a lot of garbage. You know, one of the things I have a love hate relationship with Axe and I'm kind of transitioning off of X because there's just so many, I don't know, bad actors, misinformation, you know, I just it's it's not it's not nice. So I've never, I've never had a position around.
Speaker 2: Well, if you want to get up to speed we we cover them in mining mafia. I can send you an invite via direct method. Sure.
Speaker 1: Be happy to.
Speaker 2: Cool. Thanks for coming up. All right, Butcher, you have your your hand up.
Jeff: Yeah. Just really quickly, George, you were asking about the NAV of Strive and it is actually below 1 now. It's at .9 after the recent share drop off. And I think what's also notable about Strive versus micro strategy is with the acquisition of Semler, you do have a legacy business that's producing operational cash flow, whereas micro strategy is more reliant on those preferred to issuing preferred essentially to pay their interest.
Speaker 2: Which is a whole.
Jeff: Other conversation and and with the background of someone like Vivac and Matt Cole, I do see an opportunity for them. It's only a minor like less than 1% of My Portfolio. But if there were two guys bet on potentially acquiring other companies and creating a cash flow machine that legacy businesses where their cash flow is not exceeding the Bitcoin hurdle rate that they can interact into the treasury. That's kind of I would say the bowl case for Strive right now and you can get in for a discount to MF.
Speaker 2: Any other?
Speaker 1: Thoughts. Just curious. Thanks for all that information, but I'm just curious, why do you do you have confidence in Vivek Ramaswami's ability to create value? I mean, I know when they had the biotech thing, yadda yadda, but that was very controversial. Actually, if you go through that whole story, I think it makes him look pretty bad. So why do you have confidence? Boy, stop.
Jeff: Sorry, there's.
Speaker 2: We're talking.
Jeff: To.
Speaker 2: It's done, boys, Continue.
Jeff: I think someone whether it's Cole with his background and I believe it was Talpers and then back simply from political power. Maybe he's not picking biotech stacks per SE, but it I think it's worth especially with a trading to a discount to MNAB to fact that someone in his position.
Speaker 3: With the people, he's.
Jeff: AT has the ability to see what is coming, whether it's legislatively or can you implement things in Ohio or so I it's more of a you can tell by my position sizing. I'm not going to die in a hill for strive yet. Quite frankly, that position would be iron for me. But to say though that it's, you know, trading at 3 or 4 * m NAV and it's bloated. That's not true either.
Speaker 1: I know I, I think we're probably in agreement, like you don't want to spend a lot of time on our defendant. I don't want to spend a lot of time crunching through the numbers because it's just my cup of tea. It's not my cup of tea. And I, I just, you know, I, I get so you like iron. That's great. So, you know, our time is probably better spent not talking about strive. Let's talk about things that any of us have more confidence in. That would be probably a better thing to better way of use of our time.
Jeff: Well, that's that's a good segue. George, what you, I mean, I'm not familiar with your fund. I'm assuming that you're running a long short, you're not exclusively shorting. So if that's true, what are you long on currently and what's your? Why are you positioned accordingly?
Speaker 2: George, you're muted.
Speaker 1: Sorry about that. So thanks for the question. So you can go look at my feed. I've been very public about precious metals, gold at 2400. I think we're going through regime change. I think you can't own enough gold and precious metals. I think it's not the value of precious metals is going up, it's that the value of paper money is going down. People say, well, you know, and look and look, silver may have topped, I have no idea. But you know, so on a local basis, could silver be, you know, could silver crash back to $80 or levels that that hasn't been seen in two weeks? Of course it can. All right. But if you were saying to me, George, you know, and this is the time for me to think about, you know, let's say between now and the year end, we've got 11 months to run. I think this stuff's a lot higher at year end. I think, you know, people say, well, what will cause you to become less positive on gold and, and, and, and precious metals, you know, gold and silver and that's gold. Let's just stay with gold because silver is kind of the redheaded step step of the child. All right, Let's just talk about gold. Gold will peak, in my opinion, when the value of paper money bottoms. Gold will peak when we have real interest rates at a more appropriate level, you know, and so the incentives are set up for the central bankers and the politicians just keep spending more and more money, putting more and more money. And the only thing that's going to stop them is the market, in this case, the bond market, which colors my view also of bonds, which I'm not going to get back to open door. But one of the narratives that people run with is they expect the bond market to, you know, to, to to for, for prices to go up, price yields to come down. That'll help the housing market. I, I categorically disagree with that. I think I think yields are going up, not down. I can talk about that more if you want. So in any event, precious metals, I think it's just a question of you've got the total value of all gold outstanding is about $32 trillion. Market cap of equities globally is about I think 120 trillion. You've got I think about 325 trillion of debt. So you're talking about 450 million of financial assets Fiat, not to mention, you know, currency in circulation against market cap of 32 trillion of gold. So gold is a store of value. It's a lifeboat. I suspect based on the conversations, the remarks of other people in this room, there are a lot of people. I don't have to tell them. They they well know the story because, you know, maybe they like Bitcoin instead. I do not share the options of Bitcoin. We can talk about that as well. But any rate, so you ask, what do I own? For me it's been precious metals and pretty much nothing else. George, I got a.
Jeff: Question for you on that. It's a little different. Are you? Do you have any exposure to rare earth metals?
Speaker 1: No. And to be honest with you, I missed it. And I was doing well enough with oh, yeah. I don't consider platinum rare earth, but yeah, you know, I do own some platinum, but it's small compared to gold and silver. But so I'm not, I mean our, our, I mean, I know the rare earth metals done incredibly well. I I just, I don't have a view. I just don't know. Are they still interesting? I have no idea.
Jeff: I, I mean, I, I have some exposure to them. One I do like is United States Antimony, which also provides me some gold and silver exposure too. I'm sure that's probably come across your radar.
Speaker 1: Yeah, yeah, yeah. So anyway, it's precious metals and then more recently I in there's AI have an interview up there YouTube video, whatever from December, mid-december. It was like one of these things I didn't want to do year end ahead in one of my picks. I hate those things. But I was being asked like, well, what should people buy? And I said well, you still got to hack your portfolio precious metals. But if you want to know what's new and what hasn't run and what I think the risk score is incredibly attractive is energy. And, and then the energy looks incredibly well situated. It's, you know, it's, it's, it's lagged the rest of the commodities complex in a meaningful way. If you look at the way commodity bull markets run, it's usually starts at precious metals, goes to industrial metals and then on to energy agriculture. And so you've got, you've got commodity cycle going going for you. You've also got a very bearish narrative around oil that the world's awash in oil overproduction, blah, blah, blah. That couldn't be further from the truth. If you actually look at oil consumption, I follow Mike Rothman, he's probably the senior ranking oil energy house in the street. He counts barrels better than anyone else I know. I think oil consumption is running up 3 or 4% year on year globally and we're under investing. And as you all know energy has oil has a pretty big completion rate. If you don't drill more holes, you're going to lose 5% of your production, five, 6% of your production every year. So there has to be more drilling done and otherwise you're going to start seeing shortages appear eventually. So I think, I think oil's very undervalued. I mean, at least statistics now people say, well, you know, 1 oz silver, you can buy whatever it is, 2 barrels of oil. It's hilarious. They even, I think oil's very cheap. The world doesn't run despite whatever you want to say about or think about, you know, the whole green energy thing. We need hydrocarbons to, to, to, for the world to function. It's cheap. We're not investing enough. And you know, look at positioning and sentiment. The committed traders data is crazy. It's improved a little bit the last month. But you had speculators as as bearish on energy as they were basically at the COVID lows. I mean, they're just like, it was absurd. You had the hedgers who are always short because that's what they do. They're almost net flat. So positioning was totally a wrong way, sentiments totally the wrong way. Stocks are cheap. Stocks are still down a lot. And I think, yeah, they are going to run in hot. I agree with what Mike was saying before. And I think inevitably you're going to get higher oil prices. Why are prices not higher now? Nobody really knows. My best guess is that, you know, the administration is putting the screws into Saudi and I rest to keep the prices down ahead of the midterm. If you look at the gap between time spreads of oil crude, namely the, the, the gap between front contract and the back, it's at a level which would suggest much higher. I have a graph. If anyone wants to know, it's just send me Adm, I'll send it to you. I think maybe if I get Mike Rothman's approval, I'll I'll put it out. But the, the, the, the physical market is actually in reasonably good shape and what people have to understand, don't forget, it's just blew me away. The paper market for crude the paper market for crude is 55 O 50 times the physical market, so you can count all the barrels of consumption you want It's more important than that it gets dwarfed by whether sentiments bullish or bearish or the hedge funds are long or short. You know, financial oil and it's been very negative the last few months and so I air you looks great. You know, I only, I don't think it really mad at me. It's a commodity. So let's be honest to me, yeah, one's got higher beta than the other one and this one's more leverage than the other one. But you know, I had to make 3 picks and I wouldn't get too invested in the picks per SE. But I mentioned Schlumberger just because you know, big cap money is going to go to the Schlumberger when the oil service starts to rise. I think by the way, services have more torque than the integrated. So I tend to go there. It's like Schlumberger, Valaris, Tidewater, you know, XLA will do OK XL people do better. OH, will do even better. So my new thing and it's not consensus too, although I have to say it's it's laughable. So many people going back a few weeks ago, they're saying, oh, you know, energy. Yeah, it's it's out of consensus trade. So many people say it's out of consensus become consensus, but whatever it's not owned. Nobody really cares. It's only like 2-3 percent of the S and Pi mean Christ, it's not even half of what NVIDIA is. So I don't know. I really like energy. So for me it's I think we are running it hot. I think it's a reflationary playbook 01 great thing. I urge everyone to run, not walk, go to my feed. You will see with the with his approval from Gap cow Louis Gap was one of the best global strategists I know. He put out a piece yesterday about the reflationary boom. It's a 3 pager. It's easy to read and I got his permission. It's paywall stuff, but he's a long dear friend of mine. He let me put it out publicly, you know, because it gives him good publicity. But if you want to know the case for sick goals and reflationary boom, go look at go look, go look at that paper and sidebar. It also does mean I think rates are going up. You even if they cut short rates, I think long bond yields are going to go up, especially on topic more recently. You saw what's happened last few days with JGBS. In the end, that whole thing and we're keep running these insane deficits. By the way, by the way, I don't spend amount of time on macro because the end of it gets back to stocks. But here's a useless factoid for you. It's actually not so useless. This is all talk about the deficit coming down as a percentage of GDP. We're going to grow our way out of it, yadda, yadda, yadda. That's a laugh. I think the deficit spent GDP was estimated last year, I think 6.3%. Go read the IMF paper from a week or two ago. They're estimated 7.9% this year. So in a world where you know, Camais are going up, inflation's sticky, the dollar's weak, you know, the idea of buying a 10 year treasury bond, lending money to the government at 4.2% for 10 years, like that's crazy. That's just crazy. The long bond, just the long price. So that getting too Weimar crazy on you. You know, I can easily see bond yields going to 5, possibly higher, but I would not. But you know, if you want to open door, fine. But I would strenuously disagree strenuously. This is the hail I will die on, you know, saying the bond yields are going to go down, bond prices are going to go up. That's something I would not bet on, I would not bet on at all. You know, I have no bond position because there there are things to do out there that have more torque. But for choice, I think yields are going up. So to answer your question, it's precious metals, it's reflation, it's energy. I even I even go my sub stack. I everyone should go look at my sub stack. It's free right now. At least free for now. I'm sorry, since I've given you guys so much, allow me to show for one second. I have a sub stack. It's growing like a weed the last few weeks. I started writing about a month ago. People like what I write. I wrote a by report on Southwest Airlines, which is a really interesting story. You can everyone do your own work. The Southwest, you know, it's been a dog relative to Delta United. They finally got a cost cutting plan in place, in part because of the pressure coming from Elliot, the activist manager. The stock sells at a third of the evening. The sales is delta ual but yeah, the profit margins are fractured, delta Ual So there's a lot of self help here that's going to come into play. And so they're coming out with their earnings in the next week or two. I can't remember what day it is, maybe the 29th. Actually, I don't really remember. And I think the guidance for 26 and 27 is going to be interesting. I heard the, I heard the elevated pitch from someone at a conference a couple months ago. I thought it was a good story. And the reason I wrote up the Southwest as a bias. Jamie Baker, the JP Morgan analyst who's the senior, sorry, senior airline analyst in the Street, He previously had a sell on the stock with a $36 price target. He went to a double upgrade at 60. So for a guy for an analyst like that to flip from 36 to 60, they must have told him a few things. But I liked the stocking before that happened. So I like Southwest, which is why by the way, selectively, I think cyclicals, I think cyclicals are very interesting. Even crappy industries that have sucked wind like packaging, chemicals, truckers, they're all starting to act better. The isms are turning up and you're seeing capacity reductions a lot of those industries. So, so if you look at the internals on the market, you're seeing the offense on the field, the the sickles are doing well, defenses are doing terribly. So I think selective sickles are interesting and that's why I mentioned Southwest Air as an example. Then last thing, and you got to allow me to plug this. I did 2 conferences last year, online conferences. 1 was macro and strategy. The other was stock picks. Everyone with stock picks, we're doing a stock picking, it's in my feed. We're doing a stock picking contest, stock picking presentation on March 11th. I selected 14 of the leading investors, professional investors out there, names you would all recognize, you know, Tavi Costa, for instance, Don Durrett, Gordon Johnson will probably come to the short story of Tesla again, you know, Adam Parker, Morgan Stanley's Morgan Stanley guy go down the list. Robert Mullen, MRA advisors started with up over 100% last year. I stayed away from the name brand macro talkers. These are all stock pickers. So it's going to be 14 guys, 14 men and women. Oh, I don't think we have a female on this panel. Everyone pitching a stock. Kind of like if you go to an ideas dinner and 20 minutes, you can't watch the whole thing. It's a lot to watch. I have to host the whole thing. But the replays will be available within 2448 hours. We did this last summer. We had 16 speakers. Ten of them are coming back. It's kind of like Survivor. The guys with the best picks are coming back. We had some unbelievable picks last year. One guy pitched the platinum ETF which tripled. Another guy had, you know, Sprott, the resource oriented asset manager, which is fabulous. We had a nuclear stock, BWX 2. We had some couple good shorts too. We had DoorDash and we had Fresh Pet. So it's Long's end shorts and $99, $99.00, that's all. And so you'll get to hear 1520 picks from some of the biggest names in the business. And unlike bloviating, macro bullshitting that goes on, these are actually going to be picks. Like how do I make money on this? One of the one of my pet peeves. The reason when I'm doing it a bigger way, I'm on Substack now. I want to help people make money. Listen, I'm wrong a lot of time, but I think I'm hard working. I'm honest, I'm not stupid, and so I'm bringing 14 of the smartest guys I know to give you their picks eating their own cooking. It was a great conference. Last summer. I cut the price for $400 to $99.00 because I want it to be. I want it to have a big conference. Again, it's all online, so it's on you. You won't find another conference like this, you know, for 99 bucks. Like what the hell, you can't go out to dinner for 99 bucks. The other thing I'm doing simultaneously, I am going to go to a paid sub stack as well. They'll be they'll be stuck. I'm lagrating away from X. You're going to find the good stuff on Substack. Some will be free and it'll be a paywall stuff with the portfolio and you know, some of the really higher value added stuff. So anyway, I urge everyone to take a look at the conference. It's 99 bucks. It's, you know, I'm not going to get rich on this. It's more like I'm sure we've all been to our share of, you know, stock idea dinners or whatever. This is better than any stock idea you'll ever go to. It's better than any investment conference you'll ever go to. And the reason why my conference was last year, I don't say this arrogantly. I really believe this. We're better than any conference that Morgan Stanley or Goldman Sachs can put on. The reason is real simple. You go to a conference put on by a big brokerage firm, they have conflicts of interest. You know, they don't always give it to you straight. And then even in that case, they're stuck with their own research team. And you know, some of the analysts are great, some aren't so great. The price for a lot of those analysts are not to make money with the stock picks. They have a lot of other responsibilities or incentives like, you know, invest in banking relationships, so on and so forth. This I'm not constrained to having stuck with any analysts. This is, you know, for lack of a better term, this is like George Noble's All Star team. These are the guys I talked to. These are the guys are selected because they're money makers. So a whole focus is on making money. And if they don't make money, they're not going to be invited back. We're going to review the pics from last time. And so I'm hoping to do this with enough support. We're going to do this quarterly. I got plenty of people. No, virtually no one turns me down. Everyone wants to pitch their names. And this one's the general stock picking thing. We'll probably do one on a sector with the one on foreign stocks. And so I'm really hoping, you know, they talk about democratizing finance. I hate that word. But if you want to give people real ideas instead of, you know, guys with fake avatars and bullshitting about the GDP and the Fed and all this nonsense, how do I make money? How do I make money? I mean, we could argue all we want about GDP and interest rates, all that kind of stuff, like, OK, well, how do I make money out of that? Let's say you thought interest rates were going to go down. Just as an example, Do I buy open door? Do I buy bonds? Do I buy gold? Do I do? Do I short the dollar? Like, what's the best instrument? OK, I happen to personally think if you heard me earlier, you know, you might have their might. And we've all done this before. The worst thing is you got the right idea. Oh, I think rates are going down. Let's say that's right or wrong. OK, whatever. Let's assume they are going down, you pick the wrong instrument and you buy open door. Well, it turns out if I'm right about opening overvalued, even if even if rates go down, you know, if you just allow that, my scenario is right. You know, you could have rates go down an open door, you're not going to make any money, you know, or if you buy housing stocks, maybe housing stocks are much more attractive than open door. Maybe you short the dollar, maybe you buy gold, maybe you buy bonds. I don't know. So the point of this is it's it's it's less macro bullshitting. I think I think Fed talk, it's like sports talk radio. It's a huge time suck. It's a waste of time. How do I make money? I mean, I worked at Fidelity. You know, Peter Lynch didn't have time for you. You always say he spends 5 or 10 minutes here. Like the economy is always just about stocks. It's stocks, stocks, stocks. And it's not the market. It's a market of stocks. You know, let's be look at this, man, I'm I'm on a roll and I'm getting excited. I'm enthusiastic. You know, the last few years, you know, if you didn't know in the Mac 7, good luck with the rest of the market. You didn't make any money, all right. And so it's a market of stocks. It could be a scenario where, you know, what if I'm right about energy stocks and precious metals, you're going to kill it. And it could be that the tech stocks don't do anything this year. Maybe they even go down. So we could bullshit about the market and, and, and Peter would always say, Oh, anyone can make money, you know, trying to call the market, But that is a that, that, that, that, that is a fool's errand. It's stocks. Know what you own. All right, so I'm telling you I could be wrong on Southwest Airlines. I think it's going up. I could be wrong on an open door. I think it's going down. I can. Oh, by the way, Tesla, I have to talk about it because people said, George, you got to think for Elon Musk, you got TDs. No, I don't, but Trump said you got Elon syndrome. No, I don't leave personnel is out of it. I think in the in, I was very public on this. It was just an article and a business decider that came out the other day. Tesla's like the biggest, I believe I was quoted on this and I laid it all out and I've got Youtubes up there and the whole deal. I think Tesla is the biggest bubble in the history of stock market. It's a bubble at scale. Yeah, there have been stocks that have been more overpriced, but not anything that was worth $1.5 trillion. And so Tesla's coming out with their numbers tomorrow. I don't know what the stock's going to do because it's always about narrow and what Elon says this and everything else. But if you want to talk about fundamentals, I'm happy to open up that Pandora's box. But I probably said enough right now so you know.
Speaker 2: George, it's not a car company, it's a tech.
Speaker 1: Yeah, I know. I know. I know. Come on, man. I know. Come on. I know. I know. Only 87% of the revenues come from cars. I know. Shame on me. Sorry. Sorry about that. My bad. My bad.
Jeff: George, I do appreciate the insight and the alpha. I appreciate you joining us. Hopefully you can stick around. It looks like we have might have a question for you. We are going to be wrapping things up after these last three speakers. So we we're going to go to Vinny, then we're going to go to Parsuk and then that.
Speaker 2: Yeah, thanks for having me up, George. Nice to meet you. I'm also a fellow precious metals guy. I recently rotated on my Bitcoin into gold and silver. I wanted to get your take. I wanted to get your take. What percentage of this gold and silver run up is due to industrial demand versus like people buying it as a hedge against uncertainty? Because, you know, I, I think that I think that there's an unprecedented demand for like, you know, gold and silver because of like these AI Dennison AI Dennis Centers and semiconductors and chips and all that stuff and robotics. I do disagree with you on Tesla, though. I think they're going to be, they're basically a robotics company and they're going to release Optimist next year and they got AVS going on in Austin. But, oh, and I think that you blocked me. It might have been because I had bitcoins in my name last year. So. But yeah, that's my question, yeah.
Speaker 1: That's fair. By the way, I don't block anybody who likes Bitcoin. That's not the point. People I block, you know, it's funny. People say, oh, you block, people, you sense it. No, no, no. It's real simple. I'm old school. I believe in being polite and respectful, so any time comes up someone comes with ad hominem or profanity or you're a boomer or you're a fucking idiot, whatever. You know, have fun staying poor. That type of horseshit. You want to have a discussion, I'm here. I like I actually like listening to people who disagree with me because I learned something. I stress test my own assumptions. So all the so I will unblock you. Who was it said that I will unblock you? Is that low speaker? Who?
Speaker 4: Oh.
Speaker 2: That was, that was Vinnie gold and silver all.
Speaker 1: Right Vinnie, I'm going to unblock you OK, so peace. So anyway, I'm unblocking you right now so anyway, so to answer all right, you're unblocked. So to answer your question, the the gold I think has anything to do with the industrial domain. I think it's all just store value stuff and cause gold starter going Bob Balu from early 22 when we had the whole Russian embargo thing. And you look at everything that's going on from Drew political standpoint, the way we're, you know, conducting monetary policy and the tariffs and all this stuff. We're doing everything and people, the rest of the world's now coming to understand that maybe they can't trust the US dollar, that, you know, their money's not safe in dollars. And so I think that's really to do with the credibility of the Fed and irresponsible monetary and fiscal policy. Silver, I understand, yes, there's an industrial aspect to it particular I know with solar it's a huge deal. And the thing about the Chinese, you know, they've got to buy a lot of silver for all their solar stuff. By the way, by the way, this is mind boggling. Like there's so much smarter than we are. At least they got their act together. They added, they added not total capacity, but they added their increase in solar capacity last year, just in one year. The increase the capacity they built is more the entire installed capacity of solar in the United States. So they figured out they gotta do solar and you need silver for solar and blah, blah, blah. So they're kind of like a forced buyer. They have to buy. Now having said all that, you know, again, I have no idea what direction the next $30.00 of silver is going to be. Could be up, could be down, I don't know. But what I do know, what I do believe is the year that's going to be much higher. And therefore, if you do go buy silver today at 1:10 or wherever it is and it goes down to 80, don't panic because the problem is when it goes down, you know, at FOMO, we panic. We get weakly when it goes the wrong way. But more interesting than the metal, I think of the stocks because the silver stocks, the mining stocks, the gold stocks, they don't reflect the current prices of the metals. And you're going to start seeing results of these companies come out in the next few weeks. And I think they're going to be Baba loop. People can be blown away by the numbers. So I think, I think, you know, even if silver and and gold prices were to stay flat this year, which I don't think is the case, I think these stocks go double from here. And like how high? Let's just talk about gold because gold is, you know, I think the silver market cap is like 8 trillion. Gold is 32 trillion. You know, gold, you know, how high could gold go? Nobody really knows. It's just like how high could Bitcoin go? Nobody really knows because you know, there's no, it's a store of value among other things. And you know, it doesn't, it's not a cash flowing asset. So, but here's a way to think about it. You know, if you look at silver, sorry, look at gold relative to money supply or gold relative to real disposable income or gold relative to the size of the economy, all this stuff. You start playing around with numbers and I put this out on my feed and if anyone's interested, just DM me. You know, you come up with numbers like 6008 thousand, 10,000. I mean, like gold, gold could be 8000. If you say to me, George, gold is going to be 8000 at the end of the year, up 60% from where it is now. Well, it's very easy. I'm not going to predict that. Everyone's got to do their own work, but like, that is not a stretch. That is not a stretch. So I just think the metal stocks where they are right now, the miners, even if, if, if, if the price appreciation's somewhat muted or pedestrian the rest of this year. I think there's huge upsides in these stocks. So I hope that answers your question.
Speaker 3: Yeah, it does.
Speaker 2: And I appreciate you sharing the your alpha for free. Do you have any like gold or mining like mining stocks that I should maybe look into? Because I hadn't really considered that.
Speaker 1: Yeah, You know what I would do if I were you? I mean, I don't, I mean, some of the names I really like are less liquid. It's not fair. You know, if I say, oh, buy this thing, it's got 300,000,500 million market cap. You know, I don't want to do that to people. So, and honestly, to be, to be blunt about it, if you just bought the GDX or the GDXJ, this is the gold mining ETF and the gold mining ETF or the SIL, which is a silver ETF. I mean, Christ, GDX is up, I think 130% last year, some number like that, you know, gold was only up 60, only up 60. So, you know, there's plenty of torque in these things. If you say to me, well, George, you know, 130% is not enough. I wanted some kind of 10 XI don't want you crypto guys like you want action. All right, yeah, you can find some junior guys. You can find some junior guys are going to go up a lot more. But you know, I want to ask you a question right back at you. OK, So like I'm not the guy to give the Bitcoin story. Let's I know bit I'm going to leave crypto apps. So Bitcoin right and no one really knows. I mean it goes up, it goes down, it's got its own cycles. I mean, I haven't heard anyone talk about stock and flow ratio lately or all this craziness, right? The narrow is always shifting. So you know, we can all spit balls to why it's not doing anything right now and I have my own reason I want to bounce this off. You tell me what's wrong with this idea and then more importantly, tell me what you why you think goals bitcoins acting poorly. So you know, you look at it and people say it's store value, They'll say, well, it's high beta tech stock, yadda, yadda, yadda. OK, fine. The last few months, precious metals to the moon, Naz X on well, Bitcoin can't get out of its own way. Why that's true. Like if I had told you that, you know, tech was going to be where it was and gold's going to be at $5050 in double jeopardy, where is Bitcoin going to be? You know, Mike Alford and everybody else would have said 130 thousand 200,300 didn't happen. So you got to ask yourself what's going on here? I have a crazy theory goes as follows I think. And you guys are younger than I am so you can give me an insight to this. But this is just the boomer and the road and I'm the oldest guy in this room. I guarantee you that. I'm 69 but I still got game. I think you can you can understand that and I try to understand what you crazy guys are thinking all the time. I'd always get the joke, but this is what it looks like to me, namely, you know, the people, you know, these people like Bitcoin and then crypto because it's good, the juice, the action, the pin action. Well, seems to me a few things. One, you know, as we got the institutionalization of Bitcoin, which was initially held as a as a positive, it's actually a negative because it's resulted in a dampening of volatility. So, you know, Bitcoin trades and implied volats are much lower than it used to and it's become more mainstream. So the price becomes more tethered to like, normal price. It's all this crazy stuff that was going on before. Because many institutions will intervene. When it goes up too much, they'll sell. When it goes down too much, they'll buy. So that's one point. Second point, there's been a proliferation of other ways to get action, even more action. The ODT options are going crazy. I'll have you know, I made minutes the other day. I just discovered online gambling. Yeah, me. I'm probably the last guy to face the plant to do this. Wow, this is awesome. You can blow yourself up in 30 seconds. Just unfazed or draftings, right? And so I kind of look around and I'm like, you want action. Bitcoin does not have a monopoly on the action. Like Bitcoin needs to be high beta, high juice, not so much anymore. So I would actually argue, it seems to me that the climbing volatility in the price is a huge negative and they it becomes a lot heavier. And therefore I'm not here to say Bitcoin is going to go down. I personally believe it is going to go down, but leave that aside. I'm kind of what I want to know is why that's so that's my idea. You know, Bitcoin is just like it's gone to sleep and I don't see what's really going to like. Let me ask you because you you know, you're playing with some of the juice you own silver like you want action, like track all your hardcore D Jens out there. Why would you Bitcoin when you got silver or some of these other crazy things, right? Platinum, right. It's like you want action, I'll give you action. OK, so Bitcoin is so yesterday, right? So anyway, you catch my drift. So what do you think of my theory? And then more importantly, why do you think Bitcoin has been acting so poorly?
Speaker 2: Yeah, that's an interesting question. I think I think a lot of Ogs are just selling, right. A lot of people got into Bitcoin, you know, really early on with like a really low cost basis and you know, they see it run up to like 6 figures and it's like, well, you know, this is life changing money. So let me just offload some of this and and enjoy my life. I think that's a big part of it. So it's like a long, long consolidation phase. And as you probably know, right, you know, as the asset gets bigger, it takes a lot more capital to to go to go up. Yeah, those are some initial thoughts. Yeah. You know, I think as it matures, like you said, it's not going to be as volatile. So, you know, it's not going to be the Super exciting. But I think some of the properties of Bitcoin will still remain, right. Like, you know, there's the the finite supply. It's, you know, it's, you know, instant. Yeah. You know, it's digital, right? You know, the economy is becoming more and more digital. So, you know, I think it's still worth looking into. I guess I'd be curious to know why you think it's going to go down or what your thesis is in that in that front.
Speaker 1: So, so, so, so again, I mentioned earlier, this is my belief, My Portfolio, I have no position of Bitcoin, all right, to me, it's so uninteresting. All right, could go up, could go down. I think it's going to go down, but it ain't going, it ain't going to be number go up. It ain't going to 10X again, OK, It's not even going to 150 in my view, All right? I just think it's boring, all right. And I think I think Bitcoin is sort of matured. I think one, it's got many attributes and again, the narrative keeps shifting. One of them is a speculative asset. Well, it's lost some of that juice. The Vols gone down, as you point out, you agree the market caps are much bigger, a lot more money to to push it. Also keep in mind a lot of it's technically oriented as well. You got a lot of overhead supply now, All right, you know one thing about one thing about silver or gold, who knows if it's going to go up or down. We don't know, right? But anyone who owns silver or gold has a profit. You don't have any bag holders out there. OK, you got a huge and forget about the Ogs that owned it from way back when. I'm not talking about them. They're the ones that were selling, but the democratization of finance, anyone who bought Bitcoin, last year's underwater. So you got a lot of bag holders, IE overhead supply. So it's become heavy. I also think, you know, having been at Fidelity for so long and been in markets for 40 some odd years, we all know, we all, we all come on, admit it or not, we all engage in FOMO, OK? It's human nature, OK. And by the way, by the way, I got a great statistic for you. I'll love this one. So back in the day when I was at Fidelity, Peter Lynch, 12 years, I worked for him as a third research assistant. Magellan compounded 29% a year for 12 years, 29% a year. Brilliant. All right, He is. He, he is. There's a Matt, if there's a Matt Rushmore for investors, he's up there with Stan Druck, 1,000,000, Warren Buffett, Julian Robertson. OK, he's up there, right? But here's the crazy thing. Here's what you don't know. That's a time way to return. That is, if you'd bought the fund and kept it, you made 29% KAGR. But if you look at a dollar weighted return. So in other words, FOMO wasn't just invented now, FOMO existed back in the 80s. Yeah, I'm old. I'm real old. OK. They went and calculated and they looked to see when people put money into Magellan and when they took money out of Magellan and the average return on the dollar invested, the dollar weighted return. Drum roll, wait for it was not 29%, it was 7%, he said. How could that be? They're piling in at the top and panicking at the bottom. All right, so we all do FOMO Bitcoin, you know, you can't get enough of it. You know, blah, blah, blah tech stocks, they didn't get enough of it. Maybe now as a country and asshole comment, people are too pulled up on silver, whatever. So I think I'm negative on Bitcoin because it's proving like, you know, I think the people who own Bitcoin got to be looking and one thing is, OK, I'm a believer, blah, blah, blah, OK. The other side of that argument is, dude, you want store value? Store stores of value going through the roof looking for compressed metals. Bitcoin can't, can't have its own way. OK. Oh, but it's a speck out of asset. OK, well, if tech was crashing, then maybe. No, no, tech's had a great year. OK, well, wait a second. And I think what's happening is you pointed out some of the original holders are cashing out. I also think Bitcoin benefited enormously from a tight structure type market where the holders, you know, you see all those things as a percentage of the walls that own it, they're selling it, yada yada. You've seen a lot more percentage of those guys selling now. And I think what's I think what's going to happen is I think like go back to FOMO comment. I think people are just going to kind of slowly just like open door in a way. You know, I was yelling about open door. I started in the 7th. Stock went up like 9 or 10. No one's listening to me. OK, Howard 5 3/4 and chart looks terrible and people are going to oh, why should I buy open door when I can buy gold stocks or oil or something else, right. So I think people just got a tire of Bitcoin. They got to say enough and you know, it's the extent that you know, I've never seen an asset. This is one of the problems I've had with I've been in so many Bitcoin spaces where the predominant topic is price. You know, it's like the same it's price momentum. And so I just think, you know, momentum feeds on itself and it collapses on itself. And so I think Bitcoin proving it's not working when gold and silver are working, Bitcoin proving it's not working when tech stocks are going up and God forbid, I don't even want to get into what could go wrong with Bitcoin. Also also another wise guy comment. This is just, you know, the observer. Look as Yogi Berra once if you could observe a lot by watching. I'm sorry to hear my and I don't want to make splook. I just want to make an observation. OK, I'm a fiercely independent voter. All right, So it's got nothing to do with you like Trump, hate Trump, nothing to do with it, right. When you see the President of the United States showing coins and he's Mr. Pro Bitcoin, this, that and everything else. OK, that is run, do not walk as fast as you can away from that crowd. So I hope that helps. But that's kind of my it's maybe not logical. Maybe there's a lot of touchy feely stuff in there, but I think honestly, every story of that bitcoins been touchy feely. So that's my own opinion. I I just think the extent has been a lot of momentum. People in this thing. It ain't working anymore. And like you. Hey, look at you. I'm gonna use you. I'm gonna use you as an example on you. Why did you get rid of Bitcoin? Oh, because gold and silver. We're going up more. OK, So, so, so, so tell me why you got out of Bitcoin? And what do you think of my cockamamie fury?
Speaker 2: Well, I, I just have one more question for you George and then we can let the other speakers go. But is there a price that Bitcoin can go drop below that? You will consider buying some.
Speaker 1: Every Yeah, but you know what, it's a moving target because let's say I said to you right now I'm just going to make up a number let's say I'm a buyer at 50,000, right. We don't know what the world looks like at 50,000. So it's it's not a static analysis, it's dynamic. It's just like you said to me, Georgia, what price would you sell your gold? Well, I told before, if they start running, I mean it's never going to happen, but if they had responsible monetary and fiscal policy, they Start Stop printing dollars like crazy. If peace broke out, you know, blah, blah, blah, blah, blah. Go through a whole bunch of reasons to what I would look for. So I can give you this the signs I would look for. I can't tell you what the price is. I have no idea. And you know, it may be in my view on gold and silver, you know, I don't want to say something hyperbolic like you can't own enough gold or, you know, whatever. Honestly, they're going to keep. Do I hate when don't you? Don't you hate when people say kind of be honest with you? No, tell me a lie instead. No, honestly, no a lot lyingly to you. Like when they they're going to keep printing more money and running more deficits because that's all they know how to do as long as they keep doing that. I mean, you could not have a better salesman for for Victoria for for gold and silver than Donald J Trump and the US Fed. All right. It's like they're begging you to to buy precious metals. It's like those green little pieces of paper in your pocket. Again, it's not the gold and silver going up, it's the value that nonsense is going down. Like, why would you want to own that crap? It's confetti money. So you know, money. And then one thing I'm about gold and silver, it enables you to step outside the financial system. It's it's an asset which doesn't represent somebody else's liability as opposed to if you own the debt of somebody else or you own a stock on a company. Now, in theory, that's what Bitcoin is supposed to be as well, but Bitcoin is acting like dog do. So again, I'm not going to let you go. You've been throwing questions at me. Why did you make the trade? Why did you get out of gold and so sorry, get out Bitcoin to gold and silver. And why do you think Bitcoin's acting so poorly?
Speaker 2: I already answered that, but I mean, people don't care about what I think on here. They.
Speaker 3: Just want to be here, sorry.
Speaker 1: No, what was the answer? I'm sorry, I didn't catch that. What was the answer?
Speaker 2: Oh, you know, a lot of people at OG selling, you know, consolidating and stuff and, you know, obviously, you know, people want to make money, right? So they're getting into these precious metals. So yeah, makes sense there.
Speaker 1: You go. All right. Hey I would love your questions and you are on block so there you go.
Jeff: All right. We're going to go to Parsuk, then Matt, Jlo and Mike and guys, we're not going to take any more speakers.
Speaker 2: What's up guys?
Jeff: George, appreciate you, man. You're you're a smart dude. It's interesting to hear your perspective. You pretty much nailed it on what the ideas for Bitcoin going up. You just set it for gold, which is interesting. I mean, if the properties of Bitcoin are just a little bit better, especially if you've grown up with an iPad, you know, I'm a 34 year and kids these days, they know how code works and they know what unfairness.
Speaker 2: Is.
Jeff: And so Bitcoin's kind of like the most fair Ponzi that we've found, so.
Speaker 2: I'm serious.
Speaker 1: I like that. I like that. Keep going.
Jeff: So right now there's kind of a ever since 2020, there's like a flight to new money. We, we don't know, like there's so much cash and bonds and gold now and we're all feeling around like, where can I stay for the next 10 years, right? So like there's clearly a flight and Bitcoin is it's kind of almost irresponsible. You're, you're playing with fly fire George by by ignoring Bitcoin, I think, I mean, they're like the property of gold is great until you meet someone that's 20 years old and they go, but like I, I, I can't carry a gold bar. You know, everything is on an iPhone. And so like the world is just, I think changing like you're seeing it now. And so a $89,000 Bitcoin, like you said, the dollars are just going down. That's not Bitcoin going up.
Speaker 6: And so I think.
Jeff: Right now is almost like the the easiest time to get into Bitcoin. I I remember buying a full one at 3400 and I wasn't sure if it was going to go to 0, but it's not going to 0. So it's not going to 0. It's probably going to go to like a lot more than it is now. But I guess that's my bowl case for Bitcoin. I'm in no rush because the the longer it's here, you know, I'm mining it, I stack them every day. The longer it's here, the the more wealthy we are when it goes up. So there's really no rush for most of.
Speaker 2: US.
Speaker 1: Right. Let's be fair. Let's be fair. I have no position. Like for choice book a gun in my head. Do I have to be long or short? I'd be short, but I just have no position. To me, it's just uninteresting. You know, I just, it's because I can see what I understand why I could go up. I hear all his arguments, but I also have my own negative arguments. So I look at I'm like, you know what? I have the right to not to not have a conclusion. So, you know, I just don't know.
Jeff: It sounds ignorant to say that Bitcoin's uninteresting because to most of us, it's the most interesting thing we've.
Speaker 1: All right, well, OK, hold on, hold on, hold on, hold on. Let's not see some of my words go go in the meeting by what I was saying. I don't have a strong conviction because I can see both cases and bear cases, right? So for me it's like, you know, like you don't have to have it. You don't have to have an opinion on every asset. I just, I have, I see bull points and bear points. So I just don't have AI, don't have a position.
Speaker 6: Well, you called.
Jeff: It uninteresting. So you don't think a finite digital asset that is mined by?
Speaker 1: Proof of work is interesting. OK, Excuse me if you heard what I said. Strike that word uninteresting. OK. I don't have a conviction. All right? OK. Yeah. Is it interesting to think about? Yes, but is it interesting, uninteresting to me in terms of because I'm, I'm, I'm conflicted. I can see it's uninteresting to me to have an investment conclusion right now because I can see both points and bare points. All right. I hope that clarifies it.
Jeff: Yeah, you also said it was, it was not volatile enough, but you know, before it was, it was too volatile. So it's just interesting with you guys. It keeps switching.
Speaker 1: No, I'm, I'm not, I'm not switching anything. I think, I think the volatility is what made it so exciting for a lot of investors. And it's just like the prior speaker talked about, well, he sees more upside and gold and silver. I mean, he's basically following me saying it's like, you know, I want to go, I want to bet on the horse in the lead. So silver's the silver's the faster horse right now. So you know, I, I again, I don't, I'm not as close to Bitcoin and therefore we probably ignore everything I'm saying about Bitcoin. But from the standpoint of a track fight guy, all right, that's my thought process around. I haven't, I haven't been long. I haven't been short. You know, a few years ago I got lucky at short at the right time and then I overstate my welcome and it was wrong on Bitcoin. So you know, I I like to focus on things where I think I have an edge. I better understand it and to the you know, I studied it a lot, but I can just see both sides and you know, it's lies damn line statistics, you know, get a dollar for every person. You know, when Bitcoin 125,000 a few months ago, it's saying it's it's going to 2300. I mean they got an egg on their face. You know, flip side is anyone bought it years ago at 100 and they made a fortune. So I don't know. I, I just, I don't have, you know, I have other ways to make money. And right now it's precious metals for me.
Jeff: Understood. It's just interesting to hear the trap by guys be like it's, it's not volatile enough one when you've like I recently like everyone I was talking to about it was like it's too volatile. So it's just interesting.
Speaker 1: Well, I mean to be able, that's not an opinion, it's a fact. Look at the implied volatility. Just go it's a number. It's not an opinion. Just look at the implied volatility, how it's been traded.
Jeff: So is now is it like a good currency to hold then?
Speaker 1: Excuse me?
Jeff: So is it now like a good?
Speaker 1: Currency in store. I, I, I don't know, I, I don't know. I mean, it depends, you know, if you like the long term story, fine, go ahead. It's just not my thing. It'd be like, you know, if I asked you, well, what do you think about biotech stocks? You're like, well, I don't know, I'm not really a biotech expert, OK? Like, so I, I just, I just, I, I guess I have more sympathy. Like I understand the bull case. So like, you know, a few years ago I went, you know, whatever and I just been, I was under, it's funny, I ran a lot of spaces early in the year and they were begging me to buy Bitcoin. I just said no, no, no. It was like, you know, 110 or whatever it was that here we are at 88 or whatever the price is. And I'm like, I, I don't know, I just, I'd rather spend the incremental hour analyzing out of gold stock or sell or silver stock or or or or or or or energy because I think I got or, or Southwest Airlines, you know, because that I can see. Yeah, look, there's no guarantees. Everything's risk reward and probabilities, right? For me, I can see them clearing to the upside and the and the likelihood of the upside as opposed to Bitcoin where I can see both sides and to me, it's not clear how it's going to play out. Cool.
Jeff: Parsuk or parsun, The floor's yours, Sir. All right, we'll move on. Mike, you got your hand up.
Speaker 6: Yeah, I'll be quick. A couple things. So, so the, the way that silver was like it was sideways for like years, right. And then it's supposed to be like a hedge against inflation or at least a high understood metal when I started buying it. And then all of a sudden it just goes 150% parabolic, right? And it that's weird for a metal to do, right? And I'm thinking that because it's been papered over, there's more, there's there's calls on it on the actual metal. Is is that why that that does that?
Speaker 1: I mean, no one really could explain in any great detail what's going on, but the commonly thought theories are, you know, the, and by the way, this has been proven actually in some of this, you know, the price of the metals were suppressed by the banks and blah, blah, blah. There have been lawsuits. You know, JP are going to pay a huge fine this time and everything else. So there was manipulation, stroke, suppression of the prices. And then what's really happened, you gotta go back to 2022 when we implemented the right, the embargo on the Russians after the whole Ukraine thing.
Speaker 2: So down.
Speaker 1: So you know, so, so you know if you're a if you're a Russian oligarch or media or.
Speaker 6: Or if you're anyone besides Yeah, us, Yeah.
Speaker 1: Hey, can you hear me or not?
Speaker 6: Sorry, no.
Speaker 1: OK, can you hear me? OK, fine. So the way we we put, you know, the sanctions on, on, on a lot of the foreign, the Russian oligarchs, because the Ukraine situation, all of a sudden a lot of the other people, people typically would hold their money in dollars. You know, say you're a Chinese or you're a mid Eastern oil shake or whatever. All of a sudden it's like, oh, wait a second, we thought this rule of law in the US and our dollars are safe. But Oh my God, they could just steal them from us, put sanctions on them. So there a whole story started to emerge. But people say, well, you know what? We want to add our dollars. What can we put our money?
Speaker 6: Into right. So I'm going to land my plane. I'm sorry. No, go ahead.
Speaker 1: Go ahead, go ahead, go ahead.
Speaker 6: So basically what I see happening is the same manipulation that happened to silver happening to Bitcoin in a way like they're they're they're papering over it with ETFs and shit. And there's going to be it when it, when it, when it does eventually breakthrough that, that whatever that zone is, it's going to like act aggressively. Let's go over it.
Speaker 1: Well, I, I don't know, I kind of view it the other way around. To me, Bitcoin was the thing that was manipulated up in the sense that, you know, there's no more incremental supply.
Speaker 6: Very. Yeah, that's, that's the theory, yeah.
Speaker 1: OK, OK, OK. And then so, you know, you know what's really hilarious about this? I'm listening to you talk to myself talk. I thought this earlier today. Everyone's freaking out over you know, Silver went from you know, 20 to 100 and yadda yadda yadda guys, you're the ultimate D Gen. crowd. OK, this is like compared to your average shit coin, this is nothing so.
Speaker 6: We don't. We don't shit.
Speaker 1: So what are we getting worked up about here? If this is just another coin, silver coin like no big deal, move on. Nothing to see here, move along.
Speaker 6: No, no, it's just, it's just interesting. Commodities in general are are.
Speaker 1: Yeah, yeah.
Speaker 6: Headed up.
Speaker 1: Number go up dude.
Speaker 6: Crashing up.
Jeff: All right, Lazarus, we're going to give you the last word and then we're going to wrap things up.
Speaker 2: Shoot, hey, thank you guys. Kind of caught me off guard. I was actually typing it up because I didn't think I would get a chance to speak. So thank you. But it was basically like a rebuttal to George Noble. I believe he made some great points and I think like I was never bullish Bitcoin and I'm still not. I'm not into the crypto thing with the layer block chains or whatever, but what I saw with Bitcoin and especially as the Marcos making all time highs, you saw like data center plays ripping and Bitcoin kind of made the top went down. And I believe the predominant theory is the four year cycle that people like front running, especially long term holders. And the other one was that a lot of long term holders are basically into like, you know, decentralized finance. You don't want the government involve you on your cold storage. So when the government was basically passing these kind of stable coin acts, these I think clear the act is in the House and Senate. But basically the more government got involved, the less they wanted to be part of it. Maybe they moved into different coins or, you know, some other off exchange off exchange. But the point is, is these long term holders are selling and that selling is eventually going to end if it's coming from them. And once that happens, where's the selling pressure going to come from? So now you're kind of left with buying pressure and that's coming from institutions, that's going to come from retail. And I believe he mentioned something about momentum. And especially for something that Bitcoin that doesn't have fundamentals, you know, they're not going to announce the B earnings or anything like that. Momentum plays a big role and I think it's going to mean reverse, especially when you see stock market all time highs, you see even gold and silver ripping and when people are making the argument that's fall dampening. I'm not sure how you could kind of use against Bitcoin when gold is kind of like a risk off asset and it's made a major move last year and even year to date and silver made even a bigger one. So when you're looking at it like what kind of move can Bitcoin make if it truly takes on a risk on property, what momentum for it, especially going into midterms? And I know he kind of mentioned Donald Trump. You don't want to be involved with meat coins, but he, I think his son is into American, American Bitcoin. His other one is like pumping Ethereum every few months and then he has war liberty Financial. So Trump has some incentive to kind of continue this crypto wrong going. And you know, you could think like crypto is all crap, but when the president of the United States wants it to go up, he's kind of going to get it done and moving on. Like you're also seeing institutions adopting it. You see brokerage trading brokerages, wealth managers have meant recommending like half a percentage allocation going up to 1234.
Speaker 6: Yeah, I really.
Speaker 2: Believe, yeah, even Vanguard capitulate and not like I'm looking kind of for the big thing is when your target retirement fund is going to be taking it in. I think that's going to be probably the biggest bowl case for Bitcoin. But the what I'm looking for right now is kind of that inflection point flip because it is going down. And I think a lot of investors, even crypto investors are on the sidelines. You know, maybe they bought in a little bit. I kept falling and they're kind of like, OK, I don't want to buy falling. Knife stocks are all time highs. There's other plays, you know, AI is a big theme. Even like precious metals are ripping and they're going to go for those momentum plays. So for me, I believe Bitcoin just kind of needs like a 1020% jump. And that's when a lot of players are going to go back in, especially crypto players. They're going to start buying in. Once that happens, the mean reversions trade starts up and that's when momentum takes hold and that's when they're going to really RIP. And I think that's very likely to happen for 2026. And for me, like I'm the way I'm playing it is I've caused an I bid. So I'm not really looking for, you know, like a 10/20/30 percent gain for Bitcoin. I'm kind of looking maybe like minimum 150K plus by the end of the year. And the so I'm playing that convexity level. And when you made the case for ball dam, that really plays as a benefit for me because now you're basically getting Ivy on the cheap when you're expecting a huge run up. So the market's giving you basically cheap call options on this if you're making the case for ball ball dampening and especially when you started these moves and gold or silver even like stock market all time highs like I.
Speaker 6: How are all these Ath today?
Speaker 2: Yeah, it's pretty crazy. But when you're when you're looking at, I just don't know how we're gonna have a market top without Bitcoin topping too. Like that's basically a bull case for Bitcoin. Like usually when you have a market top, you have euphoria for everything. And even when you look for 2021 like arc top, they think in like March or April somewhere beginning of the year, Bitcoin top 2 like hit down and then it had a run up again. So even if you believe like, you know, we're 8th, 9th inning, crypto has these major runs right at the end and it like happens like that, it happens finally and it happens, you know, it could happen worse than silver. So if you're kind of looking at silver and it's up like 50% year to date, what exactly is going to happen to Bitcoin? And if you like, you're already starting to see these kind of little cracks, like if you look at Hyper Liquid for example, today a thing was up like 10/15/20 percent yesterday, same thing. So that starts happening just for a few, you know, coins or tokens or decentralized exchanges and it starts flowing into Bitcoin like once the narrative flips from like, why is Bitcoin down to like it's going up? I think that's it. You can't really change the narrative back. So for me, what I'm looking for is just the stock market that doesn't break so.
Speaker 6: Can I get one more thing into to your point when you're done?
Speaker 2: Go ahead. Sure.
Speaker 6: So I think that, so Treasury bonds were supposed to be risk off, right? But they're risk on. We all agree with that now, all right, like you, you, you don't want to put your money in that. So I think that Bitcoin is, it's, there's a confusing period, like we're still learning. Is it risk on? Is it risk off? How's it going to act? No one knows.
Jeff: That's all.
Speaker 2: Yeah, but I like gold, I believe was risk off this whole like for a year.
Speaker 6: For 5000 bucks.
Speaker 2: Yeah. But like before that, like everyone bought gold to basically protect their assets. I believe for 2025 and like now 2026, it took on risk on properties. And if you're making the case like for gold for that, what happens with Bitcoin not only regains their properties, but basically takes on the properties of like the market where we've seen crazy moves we've seen in memory, we've seen in precious metals, we've seen it with AI names where like things could re rate almost instantly in a month or two. And Bitcoin like was always known as like a levered tech play or bet bet beta for the stock market. So for every gains that it could really run, especially for 2026. And I think one of the better ways to play it is on that convex move with call options for it. So you basically have like a predefined loss, but your upside doesn't have a cap. You actually get paid a lot more the higher it goes. So yeah, those are my thoughts. And this is coming from someone that was never a Bitcoin, you know, maxi bull, I thought still think a lot of crypto is trash. So for me to make this argument is a big U-turn for me. Yeah, I think that's pretty much it.
Speaker 6: Thanks for being objective.
Jeff: George, did you have any thoughts on that or is he still here? Doesn't look like it with that. Maibao, appreciate you helping us Co host. Always great having you. You know you're my favorite. Thank you to all the speakers. George, I know you're not here but we should do listen back. Appreciate you coming up. Always great hearing contrarian point of views. May not agree with all of them, but certainly refreshing and definitely appreciate the alpha you shared. And I think that's it for me guy. I'll give you the last word.
Speaker 2: Let's fucking go $100 soon. See you guys.