Stanley Druckenmiller on What Makes a Great Investor, Bitcoin & His Biggest Trades

This episode is brought to you by the HubSpot Podcast Network. But what is the HubSpot Podcast Network? That's right. It's a new thing by HubSpot. They started with our podcast. And now they're branching into more and more podcasts with experts. in different business areas. So you might have a podcast about marketing. Or sales.

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So Listen, learn and grow with Hub Spot Podcast Network, HubSpot.com slash podcast network. Uh-huh. I feel like I can rule the world, I know I can be what I want to So today Trump who writes our uh daily email and is going viral on Twitter right now is uh

Here with a special episode Trump, what are people about to listen to? Alright, so I had the chance to interview uh Stanley Druckmiller. He's widely considered one of the greatest investors ever. Uh just top level notes. Uh, one of the richest people in America worth five point six bill. Um he famously broke the Bank of England with uh while working at George Soris's fund, a quantum fund. They made a billion dollars on a trade shorting the British pound.

And He has an incredible investing track record. Over forty years, he's never had a down year. Um, two thousand and eight, he was up eleven percent, which a lot of people actually point to as the impressive thing. So even when the entire market's uh tanking

He's be able to be up. And the other thing that he's really known for in terms of his track record is Thirty years. Of thirty percent returns or more. So thirty for thirty. I don't know who else has that record.

I know if you look at Buffett annually over his entire career is like twenty percent a year, but Thirty percent for thirty years straight is outrageous. So That's amazing. I would like that. Um, but our audience is typically guys and and folks building um building companies not necessarily investing But we wanted to air this anyway.

Because A, you're blowing up and people wanna hear from you. And if this works, uh maybe you're gonna wanna do your own podcast. But also Uh, how does this apply to our listeners and what should they look out for? Абсолютно The first thing I wanna mention, actually, that I forgot to say was uh this entire meeting was set up by

Toggle Uh AI. Uh you can find them at toggle.global, uh T-O-G-G L E Dot Global And the reason why they set it up is because Stan's actually an investor in their company. So He's investing startups. And they're a fin tech company.

So Um They're able to set up the meeting, but uh if you're to answer your questions around the lessons of what people can apply, I'd say they're kind of three takeaways. uh from just his mindset as an investor that I think matter uh in in in a business building world.

Is um He said what makes a great investor is having Small bets. Uh in in in in concentrated positions, but with super high conviction. And the example he brings up in the interview that you will hear coming up is he mentions Buffett. And Carl Icon and he says if you actually look at them, they're not doing the whole

um uh MBA playbook of diversifying. They're identifying Crazy good opportunities. And going all in on them. And he brings up uh his personal examples with when he broke the pound or broke the bank of England. Is he went into George Source's office and said, Hey

Uh we put one hundred percent of the fund into the short trade. And then the lesson that he drew from it his source goes to him and says If you're so confident in this trade Why aren't we doing even more? Why isn't there 150% of the fund in it or two hundred percent using leverage, right? Which is exactly what they ended up doing. So the number one thing would be

you know, find uh something that you really, really have a high confidence in and kinda go all in on it. That's one thing I think can be a But you you I thought you said he takes s a lot of small bets. No no he He makes uh he said to take high conviction bets. When I said

Small bets is like I think it was more just his track record over thirty years is what you're alluding to. Is uh he has a long career. Where he's been across many assets and a lot of different investments. But having said that As an investor, where his biggest wins are is when he's gone all in. And uh he's found these

Once in a generation opportunities. Um the other thing. that he does is uh you know the famous saying from Mark Andrewson is uh Is You know

Uh strong ideas but loosely held. Like being able to strong beliefs held loosely held. Exactly. And and having the conviction that I talk about like he did with this pound trade. But then if if the information changes Being able to pivot. And uh he actually famously

Uh during the dot com bubble was one of these people. He was shorting it. Ninety eight ninety nine. And he's like, This is insane. It's never gonna play out and it's gonna be really bad for a lot of people. But then He was

Losing hundreds of millions of dollars shorting the dot com bubble. And to the quote there, he literally Turned around. He didn't take his money off the shorts. He went long. So it's insane. He did a full one eighty

After fully convincing himself that Yeah. That it was a bubble. And he still believed it was a bubble, but he was looking at the information and he didn't believe That uh That he could win or in in in trading terms, he didn't want to fight the tape anymore. So that was pretty amazing. But then that leads into my third lesson.

Which is uh Uh it's all about emotion at the end of the day. And he was explaining that in in nineteen ninety nine after he Went from a fully short position in a dot com bubble, you went long. And he made billions of dollars in ninety nine.

And in two thousand he's like, Okay, I'm taking all my chips off the table. I think the bubble's finally gonna burst. But this is where the emotion component comes in. He watched two younger portfolio managers on his team Keep RyanEagland dot com bubble and he couldn't take it anymore. And this guy's like a twenty five year vet, right?

And with an i impeccable track record, but he could not take the fact that there were two people underneath him. outperforming him. So he literally called his broker Put a six billion dollar bet back on the market and he says in the interview They basically called the top of the dot com by ten minutes. He ended up losing three billion dollars. And uh insane, right? And he goes

And he goes, people always ask me, What did you learn from Losing three billion dollars effectively in a couple of months, he's like I learned nothing. Like I already knew that lesson. I knew never to invest on my emotion, but I still couldn't help myself. And it's just uh I think that's just a forever battle, right? Doesn't mi matter how seasoned or good or amazing you are. or amazing your past track record is, you always have to battle that demon uh uh of the emotions. I mean you tweeted this morning, right? You tweeted something about um Something about psychology and emotion. You're reading a new book and I think you said that

Uh what was the quote you put? Is if you're comparing yourself to other people. It it's like there's these little things about emotions and psychology that will always be with you no matter how successful you are. So I think Those would be the three takeaways is uh Hi.

Uh concentrated concentrated best in high conviction plays. The ability to change course if it's clear that it's not working. And then the third thing is just like you're wrestling with emotion, no matter who you are. You could be a nobody or one of the greatest investors ever. And those those human elements never go away. And I just love what he said, it's like I didn't learn anything.

I already knew this lesson. We'll start the uh interview now. If you guys listening like this Uh comment in the reviews. So go to iTunes and leave a review.

Or you can go to Twitter. What's your handle, Trung? Is it Trunk P what is it? Strong T fan. T fan. Um And then um I'm at the same par so tweet at us.

I prefer you leave something in the comments'cause it's easier for us to see, but let us know what you think. And We'll uh see Trump again soon. Thank you. Awesome. Thanks, guys. Thanks for uh putting this on. Realize so

Yeah, and Andre and myself had kind of put these kind of these questions together which we think would be great for a bit of a younger audience. So The first Question we wanted to dig into was uh you're obviously there two thousand dot com.

Uh are you seeing any similarities with what's going on But the especially last couple of days uh this week's been kinda ugly for tech. And uh I I know there's been a lot of talk about has growth run its path was COVID. Аю сінні симлертіз. to the dot com air two thousand.

And if so, what are they? If not, what are the differences? Okay, um I'm seeing some similarities. I'm seeing some Differences. Okay.

Um Number one Um Valuations in Both periods got to what I would call mania speculative levels.

Okay. Um Monetary poly Was Part of the issue in ninety nine when Green Span Decided why to want run run an experiment.

Um Where he let unemployment go. below levels where it had historically been. It's nothing like the crazy stuff we're doing now, but That helped set it up. But what was really going on

But um I mean think about the fact Yeah. Netscape didn't really exist until ninety five. So other than some nerdy professors

back in the early eighties. No one even had email. Right. Literally The internet was just sort of being built.

And the big winners in ninety nine. where companies like Sun Micro and Cisco That were Building the guts of the internet, constructing it. So what happened was

The growth was so rapid. Is this one on and valuations Combined with some easy money. Got baked in baked in those growth rates. As far as the eye could see.

But Think of the internet. Infrastructure like The railroads a hundred and fifty years ago. And think of the tech stocks as the company selling railroad ties.

Building the guts of the internet. So once the railroad is built. While you're building the railroad, your sales are going up fifty, sixty, seventy percent a year. But once the railroad is built. Um, your growth not only doesn't go up seventy percent

It goes down. Because On a rated change basis. You don't need any more railroad ties. Um

So when none of us saw, me included In early two thousand Were a lot of these companies with estimates of fifty, sixty, seventi percent. For the next two or three years. Their business was literally about to collapse.

So The Nasdaq went down ninety five percent. Um not thirty, ninety five. Um Because you had this combination of

Inflated values. Way overestimated earnings. Um out there and then earnings collapse. So today

Um you have something Similar and something different. So monetary policy Is absolutely insane. We had No QE back then.

Uh our rate towards zero. They were four or five when they probably should have been six or seven. No comparison So We have an asset bubble now that's not just in tech stocks.

It's in everything. Facts. Dogecoin or more maybe some of the young uh Viewers disagree. Um

You name it. If you're an asset. You've been moving. Um but what we also have Back then you had this incredible wave from ninety five to two thousand while the internet was being built.

What you have now Is this incredible wave of did digital transformation? Particularly moving on to the cloud. Um I used to say two or three years ago in some interviews

Well, we're in like the bottom of the first or the second inning. And this is a ten year runway. Um Well Covid Um

sort of jumped you. From the bottom half of the first To the sixth inning. Well not to ninth, but to the sixth. Right. I think the guy from Shopify said

We went from two thousand nineteen to two thousand and thirty. Um In one year because of Covet, I think I think it was him. I think the difference now is If you don't if you're a

Customer And you haven't moved to the cloud. You're dead. Because who you're competing against They can just beat you because the technology is so important.

So Now Full disclosure, I didn't see what was coming in two thousand coming. But I am really hard up to come up with a scenario While there's

That this digital transformation thing is gonna collapse. And these SaaS companies are gonna go away. And The biggest problem you have now

Is the overall bubble in asset prices. And where price got to these names in particular. The good news is If we had Had this conversation two months ago.

This the good ones were like forty five or fifty times Sales. Not earning sales. They're down to There's a range I'd say now ten to twenty five times sales for the good ones.

So if the problem is price. And in my opinion, that is the problem. A lot of that has been wrung out. And I think if you hold these names for three or four years. They could easily grow into their valuations.

Yeah. If you held the names in two thousand Lotta these companies Um You still have losses of ninety eighty five ninety percent of your value.

Right. So those are the similarities and those are the differences. Right. So uh uh to summarize, it sounds like uh kind of the key differences would be the uh the monetary policy completely different. And the names themselves. Uh or just As a company and I'm looking in uh further out in the economy is just

Likelihood of those still existing is much higher. Yeah, the other similarity is back then I remember A lot of value managers Uh

Virtually going out of business. Right. Two thousand, one of the greatest investors of all time. Julian Robertson. It was long value. And short these crazy tech names.

He basically threw in the town, so he couldn't take it anymore. And stop managing money in early two thousand. But what happened in the next three to five years was incredible. Companies like Phelps Dodge Copper Companies When I'm six to eight full.

Six to eight times for For the old industrial stuff. So everything Julian was long. Um Went up many fold and the tech stocks went down a lot.

We do have some similarities there today because These covet companies beneficiaries. So much demand was pulled forward. That they got too high and too much ownership.

And as we're reopening There's also an ownership problem. Where there's probably more money that needs to rotate. out of the secular growers. Into these

I'll call them reflation names. But I do want to say very differently I think these things are secular growers. And they'll probably be fine long term. Amazon at thirty two hundred.

Um Is not a bubble stock. Not not whatsoever. It's Basically decent value. And I don't just mean Amazon, but A lot of the

But the big technical fangs, yeah. Absolutely. Um just as uh As a curiosity that I see, uh I actually asked yesterday a bunch of my Twitter followers what they want to ask is Do you have an opinion of any of the thing kind of names uh including Microsoft?

Uh who will get the five trillion first? What a great question. Um I've always answered that with Amazon.

And Microsoft I've never really Believe Apple had the innovation to take you The next level and was mainly a hardware company. Um They obviously have morphed into

The services app Company. But as you know I It's funny, that's the one they haven't talked about being Monopoly.

But when you look at monopoly behavior Charging a thirty percent rent. All these You know. Little companies.

Seems a little extreme, whereas Amazon and Microsoft they basically don't raise price, so My guess my First of all, I have no idea. Right.

My number one If you if you put a gun to my head, or we're going to Vegas Um would be Amazon and number two would be Microsoft. Okay. Um

Google could have a big pop. Ironically, if the government breaks them up. 'Cause their core search business It's literally the best business I've ever seen. Um

But they keep trying all this. Experimental stuff that challenges um Shareholder value, but Those guys are so rich, they're more interested in changing the world right now, and good for them. Yeah, they get to do uh uh mushrooms go to the desert and just think about wild things that you can do in their space with the moonshots, right?

Well said, well said. Um Uh I think the question here that Yan and Ray had put that uh we thought would be a great follow up was uh So what is the biggest risk to the equity market right now? I think you touched on some of them. Has to do with uh I guess the valuations. And just the

Without without a doubt, it's um Inflation strong enough. that this Fed responds to it. Right. No doubt about it.

The this bubble has gone long long enough And it's extended enough. That the minute they start tightening Um The equity market

Should go down a lot. Um, particularly with so much of the cap weighted in growth stocks would which would be Hit the worst. Um Ar central case.

Is that inflation occurs? But we're open minded. to something like oh seven, oh eight, where you never really got to the inflation'cause the bubble popped. So the inflation never got to the manifestations? Stage.

That would be the second one. In terms of geopolitical stuff become a popular view, but um I'm worried about Taiwan. And um

I think it's probably not a worry. Until after the Bayesian Olympics. Right. Um Xi Jinping wants to deal with

Sanctions and point cuts and all that. But I can't imagine And um He's not gonna try something. Right.

Most of the Bayes in the Olympics and I don't think That's big stuff. That's not some little thing where Yemen is fighting Saudi Arabia If we If you were to get worried about United States and China

That could be an exogenous event. Right. It get quite nasty. Absolutely. Um

So Again to summarize then the in the inflation concern and the Fed tiny kind of big risk. Longer term always just Taiwan is actually a massive hot spot. And uh post twenty twenty two the the winter Olympics.

There there's opportunity for something to happen. That's our that's our central case. As you know, I tend to change my mind, but Right now, if you're asking me what the biggest risks are. It would be them. Absolutely.

So the next one we had here is a more more retail oriented question, or actually not necessarily retail oriented, but And it does concern retail as uh Do you sh uh see anything from uh as an as a long term after effect of of what happened earlier this year with Wall Street bets. With retail being able to congregate in one place, they kinda direct

money flows. I know in the past you've talked about the importance of liquidity. And do you see any long term effects of having The ability of millions and millions of retail investors stuff. To put their

Target on a single name. Right. No, um Let me restart the answer's yes. I don't know why I just said no, I guess I'm too old. Um

Вона старта бізнес. Retail dominated institutions. Okay. And you got most of your information. And you're right.

Um The amazing thing about the Kurt The current retail investor Is they have access to things like toggle. So they're actually

Much better informed. than the retail investors were in the late eighties and early nineties. And with the internet. Um They have tools and the way you already mentioned they congregate.

The big risk is They're all loaded up in this stuff. You know, don't confuse uh genius with a bull market. Yeah. Something exogenous talks like we're talking about.

And they all lose enough money. That they're scarred. Yeah. Um I've always thought the Japanese investor would come back to the market in five or ten years after the bubble burst. That was nineteen ninety and they still haven't come back.

Right. So I worry about scoring, but no, I think My guess is The after effect of Wall Street Vets It's here to stay.

And they'll probably migrate away from Some of the more radioactive names like GameStop, but And I think it'll actually end up being some kind of healthy information sharing net sharing network. Right.

Yeah. All right, let's talk about one of the most important parts of any business, your CRM, right? This is where you see Who are my prospects? Who are my customers? Who are my hardcore customers? And you wanna have conversations, you want to have information about them that goes throughout the all stages of the customer journey. So HubSpot's CRM platform, it's easy to align your team using the features that they have like their messaging tools, live chat, email templates, and having a unified system of record. So how does it work?

You can install live chat on your website and this will let sales and customer support talk to your prospects. You could send marketing emails. uh on behalf of your sales reps to uh to your to your customers. Um, you can have prospects book meetings with your reps without wasting time. And all of this is stored in one unified system of record so that teams can get access to all of your contact history. Why is it so important to have live chat and a unified system of record, you ask?

Great question. It's because when your all your systems are separate. You're just cobbling together data from one place and data from another. It's all disjointed. There's no single source of truth. What I like when I'm the CEO of a company is to be able to click one button and see. Who are our customers? Where are they at in the journey? How do we quickly message them? How do we get them moving forward to success?

So that's what it does. That's HubSpot CRM. And you want to learn about how you can scale your company without scaling complexity. Go to HubSpot.com. So uh you didn't mention Togo as kind of a tool that can be used uh in these environments.

Uh oh just in general as a as a uh in in an investment's toolkit. So how different would that have been, you know, back in the eighties? To have a tool like oh my god. If if you had toggle And nobody else did.

You know absolutely. Murdered their results. Right. When I started in the business Bed watching was considered

Unique. And I use Ned Davis and other technical services. And I just felt I had a huge advantage. Right. Um

So any tool you have Like toggle. Which is clearly um predictive of price moves, but even more interesting in this case Because of the mathematical capability of it.

can analyze thousands of thousands of securities. Yeah. I only have sixteen hours a day and I'm not that fast of a reader. Um So if you had a tool like that back then

It would be like my advantage is Plus five X. Um The way I think about toggle Is

I don't know how much you know about me, but I've always said Um I like multi disciplines in managing money. So My first boss taught me technical analysis.

So I use fundamental analysis and technical analysis. If there's thousands of securities out there. And my portfolio is only gonna consist of fifteen or twenty. I'm never gonna buy something that doesn't have a great chart. And great fundamentals.

Right. Do that. If you brought something like toggle into that. It's just one more Fantastic screening mechanism. That gives me the discipline.

Um so now I've got A triple screen. So Um hold or or buy or sell securities.

Yeah. That would be Invaluable. To the public. Who doesn't have access to information I have.

As an institutional investor and Paying tons and tons of money to consultants. Something like this, the value added to them could be even more valuable than it's to me and I find it value added. Right. Absolutely. And uh so you did mention a lot about that you're trading back

In the eighties. I don't want to say back in the day it feels kinda wrong to say that, but uh you uh you've been described as someone that has a stomach of a riverboat gambler. I literally don't even know what that means, but what I will say is, what do you think uh are kind of the keys to a good investor, right? So just from your own experience. So

When I've looked at all the Investors of Very Large reputations. Um

Warren Buffett. Pearl icon. George Soros. They all only have One thing in common.

And it's the exact opposite of what they teach in a business school. It's they make large Concentrated bets. Where they have a lot of conviction. They're not buying thirty five or forty names and diversifying.

I don't know whether you remember um Icon a few years ago put five billion dollars In the Apple. Um I don't think he was worth more than ten billion when he did that.

Right. When I Went in to tell Soros that I was gonna short a hundred percent of the fund in the British pound against the Deutsche Mark. Yeah.

Looked at me with great disdain. Because he thought the story was good enough that I should be doing two hundred percent. Okay. 'Cause it was sort of a once in a once in a generation opportunity.

Right. So A they concentrate their holdings. The Concentration, this is very counterintuitive. It really gets your intention. So it actually in my

In my thinking. Decreases. Your overall risk. Because where you tend to be in trouble is if you have thirty five or forty names and you stop paying attention to one.

If you have big massive positions Um It has your attention. Right. So The the way uh my favorite quote of all time, maybe

Is Mark Twain. Put all your eggs in one basket and watch the basket carefully. Right. I tend to think that's what great investors do. The other thing

To me. Is you gotta have to know How and when to take a loss. Right. I've been in business since nineteen seventy six as a money manager. I've never used the stop loss.

Not once. Dumbest concept I've ever heard. It goes down fifteen percent. I'm automatically out. But I've also Never hang on to a security

If the reason I bought it has changed. And that's when you need to sell. If I buy Ex security. For A, B, C, and D reasons.

And those long no longer are valid. Whether I have a loss or a gain. That stock doesn't know whether you have a loss per game. You know it's It is not important.

Your ego is not what this is about. What this is about is you're making money. So if I have a thesis And it doesn't bear out. Which happens often with me.

I'm often I'm often wrong. Just get out and move on. Because I said earlier, if you're using a multi system approach You can find something else. There's no reason

To hang on to any security Where you don't have great conviction in it. Right. No, absolutely. So along that kind of metric, we're When you say what makes a great investor is kind of the the mindset and the approach.

What about from kind of the emotional side? Like managing the emotions and the the psychology and you're constantly fighting your own emotions. Look, I'm not gonna lie to you. My first boss had this thing. The higher they go, the cheaper they look. Um

There's something weird. And I know everybody watching this. has experienced this and it doesn't make any sense. But when a security goes up. Every bone in your body wants to buy more of it.

And when it goes down You're fighting making yourself not sell it. Right. It's just the nature of the beast. And you have to constantly remind yourself. Um

Why you own that security? And just because it's going down. Doesn't necessarily mean You should sell it. If it's going down, it definitely means you should reevaluate your thesis.

But it doesn't mean you should sell it. And you cannot get crazy when it's going up. One of the Probably the biggest mistake I ever made in the business. And I knew better.

Somebody asked me what I learned from this. I said nothing. I already knew it. Um In January of two thousand After writing that tech poem. to a T and making

billions of dollars. In ninety nine. I sold everything out in January. And I had a couple of internal portfolio managers at Soros. Who didn't sell out they had these

It was a smaller portfolio. But they made thirty percent after I sold. And I just couldn't stand it anymore. Um I'm like watching them make all this money every day.

And like for two days I'm like Ready to pick up the phone and buy the stuff back. You know, there's a little devil there and then the angel and she's saying don't do it and he's saying buy it. And um I'd pick up the phone and I'd buy them

I might have missed the top of the dot com bubble by an hour. I ended up losing three більon dollars. Oh. On that trade alone. I had made more the year before, but you know, three billion dollars a lot of money.

And it was all because I got emotional and dropped every tool of discipline I've ever had. Um Somebody says, Well, what did you learn from it? And I just said I learned nothing. I learned that twenty five years ago. So You can talk about not being emotional. But it takes incredible discipline.

To to act on that. No, I was that's I mean that's an incredible you said you started in seventy six, right? And that's twenty four years later, you've been Going through it for tw almost a quarter of a century and it still happened. Yeah.

Yeah. Yeah. So um It's something I want to just uh add on to kind of what you just uh mentioned was The actual approach of investing for yourself, you

You famously talked about Uh looking at what makes the stock go up and down. Uh at a you know, w what does that mean specifically for yourself? When you say what makes stock up and down, what does that mean in terms of fundamentals? It it varies from stock to stock.

Right. Interesting thing about coggle. They'll find things that I didn't even know move to stock. Right. If it happens over and over again you figure it's not random. Um

So I'll never forget I keep going back to my boss in Pittsburgh. But I was an analyst and I analyzed retail. And I come in with my earnings estimate on Kmart and my earnings estimate on this company and that and it's just Yeah, but what's gonna make the stock go up? And

I said, What do you mean? And he says Everybody knows what you just told me. Keep looking, keep looking. Finally I came back, I found out At the time, by the way, this is change since then.

If you graft the change in food and energy prices Over top the retail index. It was like clockwork. Retail and food prices. I'm sorry, food and energy prices go up.

Retail relative stocks go down. Not rocket science here. Yeah. Yeah. If you

If you take discretionary spending And you increase the cost of it. She's got less money to Yeah. My address.

Um And I watched that and I worked for ten or twelve years and then for some reason stopped working. But There's an analysis of fundamentals which I

Completely endorsed. Well Look at the balance sheet. Try and figure out a couple of years from now. What people are gonna think about this company are the earnings gonna be different than they think now, that kind of stuff.

But then there's all the Weird stuff like I just mentioned. The beauty of Toggle Is it comes up with stuff that Sometimes I don't even quite understand.

Frankly, I don't care. If the stuff works. Yeah. I'm gonna go with it. I'm very open minded. I don't need Um

I don't need to totally understand something if I've seen it work over and over again. Right, absolutely. But most of these things I understand. Yeah. So it'd be the equivalent of toggle finding that relationship we just mentioned, right? The the food energy and discretionary spending. Yeah, and the beauty of toggle is

Um, I might get a notice one day That X Y Z looks good. Then I can do my fundamentals. Then I can look at the chart. So it's not only a discipline.

In terms of buying and selling. It can also be an idea generator. Absolutely. No, that makes a lot of sense. Now um I thought this was a good opportunity.

to hop into something. I kind of want to ask it first, but I figured it'd be better to kind of be doing there. I think I know what's coming. You're young, I can tell by the look on your face, it's crypto. Yes, correct. See, I can predict the future. Yeah. The talk will probably give you the alert, right? This guy's about to ask crypto. Yeah.

I uh I'm not gonna ask you to put a price target or anything, but the the the question just uh just to throw it out there to get the conversation going is Uh, does Bitcoin have the opportunity to The thesis is it'll replace nine trillion of gold, right? Along those lines. Or it'll match it. Do you I mean, what is your opinion about that?

He said so. I'm evolved on this. Okay. If you've done your homework. About five or six years ago I said more than once. Um

Crypto and Bitcoin. Or a solution in search of a problem. Right. What the hell are these people are looking for we already have that. It's called the dollar.

Right. Okay. So For the first move in Bitcoin. I think it went from what fifty bucks to seventeen thousand. I just sat there aghast. Um

By the way, consistent with our earlier conversation, I wanted to buy it every day it was going up even though I didn't I didn't think much of it, I just couldn't stand the fact That it was going up. And I even known it. So

Um Fast forward, I I never owned it. From like fifty dollars to seventeen thousand felt like a moron. Then it goes back down to

Three thousand again. And then a couple of things. Happened and this This is consistent with the fundamental and then let's make something go up or down. So

Solution in search of a problem. I found the problem. When we did the CARES Act. Um Chairman Powell started crossing all sorts of red lines in terms of what the Fed would do and wouldn't do.

The problem Was J Powell. And the world central bankers Going nuts. And making fiat money.

Even more questionable than it had already been. When I used to own gold. Then the second Thing that happened. Because I got a call.

From uh Paul Jones. And he says to me, uh Do you know that When Bitcoin went from seventeen thousand to three thousand

Eighty six percent of the people that owned it at seventeen thousand. Never sold it. Well, this was huge in my mind. Something with a finite supply. Eighty six percent of the owners are religious zealots. I mean, who the hell holds something

Through seventeen thousand to three thousand. And it turns out none of them No, eighty six percent of the people never sold it. And I had this new Central bank craziness phenomena.

The other thing that happened Um It had been You know, it had a few more years under its belt. So it goes up to six thousand in the middle of the

Last spring and I go, Well I gotta buy some of this. Just because These kids on the West Coast that already worth more than I am and they're gonna be making a lot more money than me in the future.

For some reason they're looking at this thing the way I've always looked at gold. Which is store of value if I don't trust fiat currencies. Um And then the thing But Paul told me

And then the fact that it'd been around thirteen years. It became a brand. Right. So It's funny, I tried to buy a hundred million

At sixty two hundred. It took me Two weeks. Divide twenty million. I bought it all around

Sixty five hundred, I think. And I said, This is ridiculous. You know, it takes me two weeks, I can buy that much gold in two seconds. So like an idiot I stopped buying it. Um Next thing I knew

Uh The things trading at thirty six thousand. Uh. I took my cost and then some out of it. And I still own some of it.

My heart's never been in it. I'm a sixty eight year old dinosaur, but Once it started moving and these institutions start adopting it. I could see the old elephant trying to get through the keyhole. And they can't fit

Drew in time. Um I own this company called Palantir and I see the announced with their earnings today, they're gonna start Excepting bitcoin and the May Investment. That's happening all over the place. And you know, this thing is never gonna have more than twenty one million. It's it's a

It's a fixed supply. So I think Because it's a brand it's been around for fourteen years. Because of the finite supply.

It has sort of one Store value game. Is it gonna beat gold? I don't know. It sure is held doing a good imitation of it. Um The last year or two.

But is it gonna beat the other cryptos in terms of digital gold, store value? I would say it's gonna be very, very tough to unseat. Then you go to What I call the uh Commerce facilitators.

Which obviously the lead in smart contracts, that kind of stuff. Would be Ethereum. There I'm a little more sceptical. Oh Whether they can hold their position.

It reminds me a little of My space before Facebook. Facebook came along. Or maybe a better analogy. Yahoo before Google came along.

Like Google wasn't that much faster than Yahoo. But it didn't need to be. All I need to be was a little bit faster. And the rest is history.

And I'm so impressed. One of the ways we've always invested in the private sector is to try and figure out where the engineering kids From Stanford and Brown and MIT, where those kids are going. And so many of them

Are in love with crypto and that's where they're going. I I'm worried about the talent. That's like Twenty to twenty eight years old. Somebody we don't even know who

They are yet. Come up with a payment system or whatever. And on seating. So Again, I don't know. But

My guess is um The winner in the commerce facilitating I'll call whether you want to call it payments or smart contract, w whatever we're on. There's a good chance. That company hasn't even been in or that Currency hasn't even been invented yet.

Absolutely. So Bitcoin uh as a store value, probably safer in the crypto space, but As you mentioned, the computing aspect there's a lot of potential here to Be unseated. Yeah, and I think You know, as long as Jay Powell

Keeps acting like he's been acting. Um I think gold and bitcoin and Bitcoin seems to be a high beta gold. are gonna have the wind behind them. I beat a gold. That's a never heard that so that is a fantastic uh terminology.

Well, it's so fantastic. I'm wondering why the hell I didn't just own Bitcoin two years ago instead of uh Just go. And a little bit point. So uh just uh just to put the cherry on top of the crypto combo, you mentioned it once earlier. Dogecoin is it just

To you ridiculous and Elon's involvement in it. Like what how did what is your reaction to all that? It's just a You know, if like NFTs it's just a manifestation Of the craziest monetary policy in history. Right.

And I think Since there's no limit on supply. I don't really see the utility of this thing. Right now it's just This wave of money and the greater fool theory.

Um No. No. Now having said that I

I'm I wouldn't short it because I don't like putting campfires out with my face. Um So I just Try and present Dogecoin doesn't exist.

Right. I think so little of it, it doesn't even bother me when it goes up. Right. I'd go crazy that I didn't own it. When Dogecoin goes up, I just I just start laughing. But to me it's all about your own power.

Right. At the end of the day it goes back just to the money printer. Yeah. I yeah, I like that how you you said about Doge, where it it's a joke. Uh I mean it was literally created as a joke. So for you just to look at it as a joke, that's probably the best way for everyone to look at it, right? Hey, this is a joke, don't even consider it. It's like irrelevant. Yeah, don't go long and don't go short. I mean, you know, unless you're like going to Vegas, then I guess it's okay because it's a lot of action. Yeah, absolutely.

So uh I think one of the uh one of the last questions we had here Obviously, thank you so much for your time. Uh the the question we had here was If you were twenty years old. Today. What would you be doing as you start your career?

Uh the number one necessary can condition would be something I was passionate about. Okay. Particularly in this business. The people that love it like me.

Are so addicted to it and so intellectually stimulated by it. If you're not and you're in for the money. You have no chance competing with these people. They're gonna outwork you. They're gonna out execute you.

So And I think it's probably true of a lot of professors, but let's not forget If you're American, you're probably gonna spend sixty to seven hours a week minimum working. If you're in your job for the money Not because you love it.

You just blew seventy hours a week on the heaven on the happiness quotient? That's pretty rough. Right. I would tell a twenty year old Follow your passion.

I was just lucky. I followed my passion. My mother in still lost his I'm an idiot savant. I wouldn't be good at anything else. But I would do this for fifty thousand a year. I really would. I just I just love it.

And I hate to see Young people get trapped. In something And I would also say Keep an open mind.

I started uh At Bowden is an English major. I took economics just so I could read the paper. Intelligently. I went to get a

PhD in economics. And I went. These people are crazy. They're trying to shove the economy into a math formula. It doesn't make any sense. Then I went to

I work construction for six months. I got kind of a weak upper body, so that didn't work for me. Then I went to uh the bank. And I found out what I was just in love with. Um

So Try stuff out. And if you're not really, really Engage during the day and you're not happy. Uh move on to something else because there's There's something out there for everybody.

But I would not let money be the driver of the equation. That can lead to a lot of Not maximizing what I call the happiness quotient. Mr. B is the most important quotient in your life. Well, you mentioned that you would be doing this job if you're

making fifty grand a year. So the question is, will you will you hand over the family office? When do you expect that to happen? If if ever until I what? Well will the handover of the family office to another manager and you just go hands off happen in the near future, or this is something you just want to be doing. Just for your own happiness question. So as you probably know, a lot of people when they retire

They start messing around in the stock market for fun. So if they're all retiring Doing this to other ninety, why am I supposed to stop doing it? What I will say is My skill set.

You know, I think a lot of my performances been because I'm flexible in terms of uh instruments I use in terms of assets. So I'm not afraid to just plan bonds or currencies or this or that.

But my real passion Is it macro? Um I think history would say in Macro, I'm probably an A plus and inequities I'm probably B minus.

Um Equities are much more labor intensive. As you know. There's only one yen. There's only one euro.

Um Treasury's I guess my dream to your excellent question. Would be to find A successor

To run The entire equity part of my Family office. But have me fiddling around in the macro and acting like the old talking head sage. Uh you don't coach to him.

That's that's where I'd be but I I I think I would die if I couldn't If I couldn't do have some connection with the investment market and the markets during the day, I just First of all, I'm not very good at golf. I like doing stuff I'm good at. And I think that's part of what we're talking about with passion.

No one likes being a loser. Um So yeah, I I think I'll probably go to my grave doing this stuff, but maybe not with the control I have right now. Well, uh just uh last comment on that point is for the equity side, at least you have Tago, right?

Absolutely. Absolutely. Um Takes a lot of the labor out, I'll tell you that. You can cover a lot more ground in an hour than you can

Trying to do normal reading. No, that's perfect. Uh I I I wrapped up on my end. Those are all the questions we had. And uh It was amazing, Stan. That was uh Incredibly insightful and uh really appreciate your time.

Thank you to Jan and Audrey for setting that up. Yeah. Okay, nice. Um Hopefully this does some good for everybody. Uh-huh.

Feel like I can rule the world, I know I can be what I want to I put my all in it like my day song On the road less travel never looking back

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