Motley Fool Hidden Gems Investing - Michael Lewis on Crypto, NFTs, and How to Spot Real Experts

Episode Date: May 20, 2022

S&P 500 and Nasdaq had their 7th straight negative week and investors (including us) are feeling the pain. (0:30) Ron Gross and Jason Moser discuss: - How history shows staying invested through downturns pays off in the long run - Major retailers struggling with inventory - Signs of strength in the home improvement industry - Two stocks on their radar: Costco and Marqueta (14:20) Best-selling author Michael Lewis shares insights from the latest season of his podcast, Against The Rules, and discusses: - Why he chose "expertise" as the theme for this season's episodes - How you can spot a real expert - What CEOs can learn from their employees who are six levels down - His thoughts on cryptocurrency and NFTs - The experience of going back to re-read his first book, Liar's Poker Our Investing Starter Kit includes 15 stocks and 5 ETFs. Get a free copy here - http://fool.com/starterkit Stocks discussed: WMT, TGT, HD, LOW, COST, MQ Host: Chris Hill Guests: Jason Moser, Ron Gross, Michael Lewis Engineers: Dan Boyd, Austin Morgan Learn more about your ad choices. Visit megaphone.fm/adchoices

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Motley Fool Money starts now. Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money. It's the Motley Fool Money radio show. I'm Chris Hill, and I'm joined by Motley Fool senior analysts Jason Moser and Ron Gross. Good to see you, as always, gentlemen. Hey. How are you doing, Chris? We've got the latest headlines from Wall Street. Bestselling author Michael Lewis is our guest. As always, we've got a couple of stocks on our radar, but we begin with more red in the markets.

This marked the seventh week in a row that both the S&P 500 and the NASDAQ fell, and the eighth straight week of the Dow falling. Ron, like every investor who's hanging in there, we are feeling this pain. Boy, oh boy. Tough times, Chris. S&P down 20% now from its high. NASDAQ down 30% from its high, trying times for sure. There are days when the market is strong and I say to myself, okay, we're coming out of this. And then the market plummets 4% the next day. It almost invariably happens. Those whiplash days, what I call them, those are what really get to me because they toy with your emotions where you think things are getting better and then they're not, and then you think, and then they're not. So you have to maybe pull yourself away from

the day-to-day action, I think, to alleviate some of that. In this environment, investors are trying to figure out where valuations should be, but because of the macro environment we're in, it's really tough to do. What do you do? I personally, I've been buying consistently, not just stocks, but broad-based ETFs also. I try not to look at my accounts too often, and I also recommend others do the same. Truth be told, I'm not that good at that. I do focus on it. But do what I say, not what I do. But what I really do is I take heart in the rebound in my portfolio after past corrections. The bursting of the dot-com bubble, 9-11, the great recession, the COVID crash. Time really should heal all stock market wounds. You just

have to stick with it. That's essential. I think that's really the message. Jason, on Friday, DoorDash announced a $400 million stop-and-buy-back program. I saw that and I thought, wait a minute, if DoorDash is buying back stock, am I wrong in thinking that we're going to see larger, much more profitable companies doing the same thing with their cash? I don't know that you're necessarily wrong. I guess that remains to be seen. We did see Alphabet recently announce a very large share repurchase authorization. Historically, there's plenty of data out there that shows that specifically times like these is when we see a lot of companies start pinching the

purse string, so to speak, as opposed to repurchasing shares opportunistically. They're getting it wrong, they're getting it backward. It really does depend on the company. I don't know that DoorDash necessarily is best served by repurchasing shares today. It feels to me like that's a business where they could invest that capital a bit more wisely. But yeah, I suspect we will see some businesses out there definitely taking advantage of the situation, hopefully at least. It was a big week for the retail industry, both Walmart and Target issuing first quarter reports and both stocks getting hammered. Walmart was down 20% this week, Target shares falling 30%. Ron, this was surprising for a couple of reasons, one of them being Target CEO Brian Cornell

admitting they did a bad job with inventory management and having the right mix of merchandise. Yeah. There were some macro factors here, but some unforced errors as well. It's a tale of inflation and supply chain problems, which we should all be used to by now, but also changing consumer preferences and the inventory and merchandise management that is necessary, that is crucial to get that right. And it also is probably the most difficult thing to do for retailers. As you mentioned, on the call, CEO Brian Cornell of Target said, while we anticipated a post-stimulus slowdown and we expected consumers to continue refocusing spending away from goods and into services, we didn't anticipate the magnitude of that shift. That really ended up

crushing the bottom line. Exacerbating it was higher fuel and freight costs. The company underestimated how bad supply chain constraints would be. Target will have to spend $1 billion more on freight than it expected, for example. Lockdowns in China are certainly not helping, creating congestion at Asian seaports. Rising gas prices have driven up the cost of trucking. there's almost nothing good in this report, which is why you saw the stock get smacked 25-ish percent. It's a big number. But as you said, I think the biggest unforced error was merchandising. Target overordered big, bulky home goods like patio furniture, TVs, kitchen appliances. Those are expensive to ship. They overordered. They didn't have the warehouses for the stuff,

so they had to rent new warehouse spaces at incredibly high prices to store the excess inventory, and then they had to cut prices to get the stuff out the door. That's an incredible double whammy right there. The steep discounts there were responsible for most of Target's lost profits. Operating margins were down, only bright spots were food and beauty for Target, and adjusted earnings fell 41%. A lot of the same story for Walmart. More talk, I think, in Walmart's report about inflation and less about merchandising, if there was one big difference. But Walmart hurt by higher product, supply chain, employee costs. Inventory levels also rose too fast, up 33%. U.S. comp sales only up 3%. Net income fell 25%. Both companies cut guidance.

These are still very strong companies. They'll get through this. They got to work through those merchandising problems. That could take a while. And there could be promotional activity and lower margins as a result for a couple or at least a couple quarters. So that's what we should really be keeping an eye on. One other thing with Walmart, and we heard something similar out of Amazon recently, has to do with hiring. They basically said, we kind of overhired, which is interesting as we're heading into the summer, and the next time we get an earnings report from Walmart, part of that report is going to be them sharing what they're expecting for back to school and what they're expecting for the holidays. Yeah, exactly. With Walmart, they underestimated

the speed at which employees would come back after COVID started to wane, and so they had, quite frankly, just too many people. A lot of that has been taken care of due to attrition over the last several months, but I still think they have a little bit of the way to go. But lots of important seasons are always right around the corner. They have to be well-staffed, they have to have the right merchandise, both of these companies. I think they'll get there. These are, I think, still fine companies to own. They pay dividends, they have for years trading Target 13 times, Walmart 18 times, not incredibly expensive. I think you're okay if you're owners of these companies. The home improvement industry seemed to fare a little

better. Home Depot and Lowe's both out with their first quarter report. Home Depot actually raised guidance for the full fiscal year. Despite some headwinds, Lowe's maintained their full year guidance, Jason. If you're looking for silver linings, looks like we found a couple in the home improvement industry. Definitely a bit of a different, a more resilient consumer here. in the home improvement space. They're finding interest in the low locked-in mortgages are still a benefit to home improvement. People are starting to weigh moving versus staying put, and a lot of people are just deciding to stay put and remodel. I think it's also worth remembering there were tailwinds from last year that didn't exist this time around from stimulus and pent-up

demand. I think that actually makes the results that both companies turned in even more respectable, But you look at Home Depot, I mean, definitely still signs of a strong consumer demand exceeding their expectations, noting that project backlogs are very healthy. If you look at sales, sales up 3.8% from the same period last year. Comps were up 2.2% with U.S. comps, a positive 1.7%. And again, you look back at last year, last year in that same quarter, they delivered the highest first quarter sales in the company's history. So that was a tough hurdle. Comp average ticket was up 11.2%. Transactions fell 8.4%. Not terribly surprising. They were seeing a lot of impact there from inflation on those actual tickets. Gross margin maintaining, I think, okay, they've

been warning of some compression this year. They saw 20 basis point compression from last year that was driven mainly by supply chain investments and pressure from lumber that resulted in operating margin down just 20 basis points as well. Inventory is starting to normalize and like you said, offering a confident outlook for the full year, actually raising guidance a little bit. They're calling for comp sales growth in the neighborhood of 3% for the full year. With Lowe's, I think a lot of the same thing, maybe not quite as robust, but I think worth remembering. Certainly, Home Depot has a larger store footprint with greater total square footage. I think that plays into their advantage. Lowe's is also a bit more reliant

on the do-it-yourself customer. There is some weakness there, not only with Lowe's. Home Depot witnessed the same thing. That was really just a delayed beginning to spring. Some late cold and wet weather that really delayed the start to spring, so to speak. Lowe's results a little bit more pressure there. Total sales down slightly, comps down 4%, U.S. comps down 3.8%. They were able to manage cost a little bit better though, the margin picture looking a little bit stronger there. Then the same dynamic there, an average ticket growing 9.1%. That was driven in part by higher pro sales. They saw transaction count decline 13.1%. Same idea there with inventory. Those are starting to normalize a little bit. They reaffirmed guidance for the year,

which essentially, it's basically flat. In coming up against such a strong quarter last year and such a strong year last year, I think all things considered very respectable as well. Both stocks down around 30% so far this year alone. We know that home improvement represents a very large and a very resilient market opportunity. I encourage investors to keep both of these ideas in mind. You've got a dividend aristocrat in Lowe's and a strong yield there in Home Depot as well. I think I noted on last week's show, Home Depot, that's one of my latest purchases, Eric. Chris, I opened up a position in Home Depot and look forward to owning those shares for hopefully many, many years to come. All right. Because there is so much to talk about with

Michael Lewis. We are breaking our usual format. Radar stocks coming much earlier in the show than usual. Our man behind the glass, Dan Boyd, is going to hit you with a question. Ron Gross, you're up first. What are you looking at this week? Costco, C-O-S-T, consistently one of my favorite companies. I love its subscription-based revenue model, the value prop it offers customers, its pricing power. And to that end, expect a price hike in the membership subscription pretty soon, I would think. Employee and customer-friendly culture. I've owned it since 2008. It's been too pricey of late to add to my position, but now with the stock down, we're getting more to a reasonable valuation. I'm hoping soon where I can add to my Costco position because

it is one of the best-run companies, I think, in the U.S. Dan, question about Costco? Now, this week, I saw on Twitter a fake news story. This was fake. I should point out, it was fake, that they were raising the price of the hot dog in the combo meal, the $1 hot dog combo meal at Costco. And again, this was fake. But Ron, did you see this? And if you did, did you freak out? Yes, I did. Because Jim Senegal said it would never happen while he was still alive. And he is still alive. And so I was thrilled to see that it was fake. Jason Moser, what are you looking at this week? Yeah, just keeping an eye on Marquetta, ticker MQ, recently came out with strong earnings results here. As a reminder, Marquette is a modern-day

card issuing and transaction platform. They're offering the transaction processing and card issuing through its open API and SDK software developer kits. Ultimately, Marquette allows its customers to create customized payment programs around the world. When I'm talking about customers and big customers like Uber, DoorDash, Block, and more. Total processing volume for the quarter, $37 billion. It was up 53% from a year ago. As I was noting with the home improvement space, it's worth noting because a year ago, there were some tailwinds there that just didn't exist this time around. One of the things we've been keeping an eye on is revenue concentration with Block that continues to come down, which is very encouraging. Customer-centric

leadership, I like this one, and I've recently added to it as well. Dan, question about Marquetta? Jason, would you put this stock in your war on cash basket? Well, it's not in the war on cash basket, but it may just go in the war on cash part. What do you want to add to your watch list, Dan? Well, I've never heard of Marquetta, and I have no idea what fintech stocks do ever. So I'm just going to go with Costco because I've been there. Nice. All right, Ron Gross, Jason Moser, guys, thanks for being here.

Thank you. Up next, a conversation with the one and only Michael Lewis. Stay right here. This is Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. Michael Lewis is the author of numerous bestsellers, including Liar's Poker, The Big Short, Moneyball, and The Premonition. He is also the creator of the hit podcast, Against the Rules, which is now in its third season. Michael, thanks for being here. Hey, you, Chris. Good to see you.

there's a lot I want to get to. Let's start with the podcast. Against the Rules is a podcast that examines unfairness in American life. The theme for the new season is experts, which seems like a topic that has fascinated you for a long time. The Big Short is a story about the financial crisis of 2008, but it's really told through the lens of the few people who had the ability to see what was coming when so many people on Wall Street did not. Moneyball is about seeing value in baseball players when many teams don't see that value. I'm sure there are other topics you considered as a theme for this season. What made you choose expertise? So the conceit for the whole podcast, all three seasons and this fourth season and the fifth or

however many we go, is that we were picking a role in American life that had some volatility to it and asking like what's become of it and why and the first season was about referees the second season was about coaches and they were actually like a list of six to choose from when we got to this season and i can think of three reasons why we landed on experts one was my daughter who's a junior in college right now was all over me on the subject because she's gotten has been for the last few years deep into climate change research. And, and anybody who is, who cares about climate change, especially young people who stumble into it for the first time are kind of shocked by the consensus, the consensus in the experts among the experts about what's happening

and the inability of the American population to grasp it. And that, that disconnect, it's like, we figured it out, but we're not internalizing it. So she was on, it was, she was the first one who picked off the list expert. She said, you ought to do that. And I started thinking about it and I thought, well, you know, I mean, I hate to put it this way, but I thought this could be easy because this is in fact, what I've done my whole career is go and find experts. And I think, and my interest in the subject in a really serious way goes back to liar's poker. It goes back to like, I'm on wall street. I know nothing. I mean, and I know, I know nothing. And I'm put on the phone with professional money managers, and I am trying to persuade them to do things with money

as if I'm an expert. And everybody agrees to treat me as an expert. And they do, and they move their money because of things I say, which is insane. And then I go and write a book about how insane it all was, how no one should consider me an expert in financial matters. And ever since then, whenever I'm in public, people ask me what to do with their money. It was such a bizarre dramatization of the inability of people to see who is an expert and who is not an expert, and their hunger for expertise in the case of stock picking. I mean, I forgive, the Fool is an exception, but in the case of short-term movement of stock prices, there is no real expertise, and there are people running around pretending to know what they're doing with that.

That was the second reason, and the third reason was, well, you mentioned some of the books, But if you wanted to make an argument about what's the mechanism in the middle of all my books, in most cases, I'm trying to think of a counterexample, but in most cases, it's me wandering around some small world and finding the person who's the actual expert and who no one's really identified as the expert or who's not getting sufficient attention for their expertise. And so that over and over again, there was this kind of literary arbitrage where I could find someone who could illuminate a world, whether it's professional baseball or the financial crisis or the pandemic, you know, kind of whatever it is, who people didn't know, who was an obscure character because they really had not been unearthed before in this particular way. because their powers had not been completely appreciated. I thought, well, there's a lot there and this is not unfamiliar turf for me. Coming up, Michael Lewis shares how to spot the real expert in any situation. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. My guest is Michael Lewis, bestselling author and creator of the hit podcast, Against the Rules, now in its third season.

I like the fact that I think the first episode of season three, you play an audio clip of a radio interview from when you're on a book tour for Liar's Poker 30 plus years ago. And you're, you know, you were getting these questions sort of demonstrating. It reminded me of a friend of mine who's a financial analyst and he had done a television live hit of some sort. And I asked him how it went and he just sort of smiled and said, you know, it was great. Do you know why? And I said, no, why? And he said, because they called me an expert. It's the only place in my life anyone ever calls me an expert. He's like, my wife doesn't think I'm an expert. My kids don't think I'm an expert. But if I go on television, they call me an expert. And you're on TV because you're

an expert. You're on TV for two actually contradictory reasons. The ability to hold you for the television people to hold you out as an expert and your willingness to be sound completely certain about something you don't know anything about, or to be completely certain about something that maybe you know something about, but not everything about. Every time I go on book tour, this happens. People want me to come on like cable news and talk about stuff that I don't know anything about. I happen to have a book out about X, but they want me to talk about Y, Z, and A and B. And I'll say, look, I don't really know anything about that. And that's not the answer they want to hear. What they want to hear is happy to, I got to take, you know, I'll

give you, I can answer that question. Me, me, me, me, me. But I would say, you know, I was kicking around with the producers after the, we just finished the last episode of this season, which will layer in a couple of weeks, two or three weeks. They're dropping one a week, but we were sitting this kind of shooting about what this was all about. And one of the producers says, you know, if we had to summarize this whole season in a sense, it would be, you can recognize the expert because he or she is the one who is not totally certain and is really quick to say, I don't know that. And that you could, and if you want to find the person who actually doesn't really know what they're talking about, look for total certainty and look for people who don't admit they don't

know things. But, and TV just isn't friendly to that. TV doesn't want you on TV saying, I don't know. I don't know the answer. Why are you on TV then? And this so this is that we open with those clips from Liar's Poker because I said to them, you know, as we were starting the thing, I said, you know, it could not be a more clear cut example of the problems we have in our media environment with presenting expertise to people, to the public that I the whole book of the whole of Liar's Poker was a dramatization of my ignorance, a dramatization of, if you're going to listen to anybody about money, don't make it be me. I clearly don't know what I'm talking about. And these interviews over and over saying, which way is the stock market going? Or what should I

invest in now? It was a madness. Anyway, we open with that, but we quickly get to the subject at had. When you think about expertise being hidden, this is something that comes up in the very first episode of the season, an episode called Six Levels Down. And I have a couple of questions about it. But before that, for people who have not yet listened to the episode, and I can't encourage people enough to do so, can you give a summary of what the episode explores? Because six levels down. I listened to that episode twice. And the second time through, I thought about it just from the standpoint of investing. And I feel like it is an episode that every CEO of every public company should listen to. The general idea is an idea that I stumbled

across while I was working on the most recent book on the premonition, that in a complicated society, in complicated systems, a big corporation, a federal government agency, a state government, whatever it is, a big system, when there is a crisis or a problem, the person who has the expertise to respond to that, the answer to the question, is very seldom the person who's like running the operation. Very seldom the person underneath that person. That often it's someone who's, you know, six levels down on the organization chart, who has a very specific knowledge. In some ways, this is revealing something that is generally true

about expertise. It's kind of quiet and local. People who really know something are spending their time learning about that thing and not advertising their expertise, not being big picture people. They're little picture people. So, you need to find the right little picture person six levels down in your organization to answer the question that happens. And the story that the idea was introduced to me by an entrepreneur who also public servant, a fellow named Todd Park, extraordinary character. He's created three different multi-billion dollar companies in healthcare. He was the chief technology officer for the United States brought in by Obama and dealt with multiple crises at the federal government. And he was filling my ear

about this while I was working on The Premonition. I stumbled into him when I was working on the book. At that moment, he was looking for the expertise to help Governor Gavin Newsom in California figure out how to respond to COVID back in March of 2020. And he found it six levels down in the California state government. And that woman he found happened to be the main character of the book. But leave that to one side. I was talking to him. I said, well, how did you even know to go looking in the bowels of the state government for this particular pandemic expertise. He said, well, Michael, he said, my whole career, entire career has been premised on this understanding. And I myself only accidentally came across this understanding. He was 24,

25 years old, fresh out of the Harvard Business School. He was like a McKinsey consultant, wanted to start his own business, formed a business with a friend. And the idea for the business was we're going to make pregnancy better for women and reduce catastrophic outcomes, make the whole thing, care for the mom better from conception to birth, and it will actually reduce health care costs because they will have been so well taken care of that they're not going to be the really bad outcomes at the end. And they buy a clinic, a maternity clinic in San Diego to try their idea out. It's a disaster. The healthcare firms don't want to, insurers don't want to pay for preventative care. Nobody gets the idea. However, while they're managing this

disaster, losing like a million dollars a year on this clinic, they realize that, oh, there's this other problem. The health clinic we bought is losing all this money because it's not even getting paid for the stuff it's doing by insurance companies because the insurance billing has gotten so complicated that like half our bills are just rejected because we put the wrong item on the wrong line. And they realize, oh, we're in the wrong business. We need to be in the business of figuring out how to get doctors and hospitals paid. And it turns out it's like a national crisis at that time. It's like the 1990s insurance complexity is exploding. There are like 18 different healthcare plans in 50 different insurance companies, and each one has all these

permutations on it, everybody's having trouble getting paid. They go casting around for someone who knows how to get hospitals paid, and they find literally in the basement of a big hospital in Boston, Massachusetts, a woman named Sue Henderson, who's in her 50s, and who is the littlest picture person you ever met, who knows more about how to, it's not game, how to solve the game that the health insurers have created to get people paid than anybody on the planet. And they essentially try to code all of her knowledge into software, and they do. And this business becomes Athena Health, which is a monster. They end up selling it for $5 billion. But Sue Sanderson was literally six levels down on the hospital organization chart,

and she had the only person in the whole operation who had the answers to the question that if the hospital doesn't answer, they go out of business. And even the hospital did not appreciate what they had or her knowledge. So the episode is exploring this. He calls it the L6, the L6s of the world, the people who have some sort of critical understanding of a problem and who have real trouble, for odd reasons, being heard. So one of the other examples,

Todd Parker, when he gets to the White House, he has this career of looking for the person who knows the answer to the question buried in the organization. He gets there right as Obamacare is cratering. I don't know if you remember, but the legislation gets passed, and then the website crashes. It was the biggest public relations disaster in the Obama presidency. It was just like, how did that happen? They worked so hard to get this thing passed. And the website crashes. So, Todd goes in, chief technology officer, what the hell happened? And he knows, like, the secretary of the department's not going to know, the undersecretary's not going to know. So, he just went right down to a contractor who is, again, I think he was seven levels down from

the top, who actually had an answer to what was wrong with the software, and they fixed the software. But I think you're right. I think it's sort of like, if I were running a big organization, thank God I'm not, I would be really alive to this problem that a lot of what I need to know doesn't find its way to me naturally. There are all these barriers coming up the chain before it gets to me. And I need to find ways to open up those barriers. And you could call it flattening the organization or whatever. But the truth is, especially in corporate America, The way we behave does not encourage this. I mean, just with like pay,

like you got a CEO who's being paid like $50 million a year. That is not a person who the L6 is going to feel comfortable dialing up and saying, I can fix your problem. That it's, the status differences are so great. Or put it another way, the greater the status differences

that you introduce in your organization between L1 and L6, the less likely the l6 the critical things that the l6 knows is going to find its way to the l1 it's just going to be the status differences end up being barriers to understanding more with michael lewis right after the break so don't touch that dial you're listening to motley fool money Chris Hill Welcome back to Motley Fool Money, I'm Chris Hill. My guest is Michael Lewis, author of such best-selling books as Moneyball,

Liar's Poker, and his latest, The Premonition. I know we don't have all the time in the world. I also know, as you've said, you're not an expert in all things related to finance, but I'm confident that you have opinions about some of the things that are in the financial world. Michael Lewis Often wrong, seldom in doubt. Yeah, that's me. When you see all of the headlines about cryptocurrency, about Bitcoin, about NFTs, you think what? Where is the book? Where is my book in this? There's a book in this. I just don't know where it is yet. So that's been my thought. I think I've found it. I'm not going to tell you what it is, but there is this whole phenomenon. Meme stocks, NFTs, cryptocurrencies,

they're not all the same thing, obviously, but they're all a byproduct of the gamification of finance. It's more and more like a board game. And I don't have the Warren Buffett, Charlie Munger, deep moral disapproval of it all. I think that people will learn hard lessons. There's plenty of information out there. Anybody who can be saved from themselves can find the information to save them from, like, I don't know, buying GameStop at the high, or buying Bitcoin that they can't afford to lose, or buying, you know, one of those apes, those NFT apes. You know, it's just, you're playing in a market that is not underpinned by value, or rather the value is assigned in a different way. The value is not some measurement

of expected future earnings of an enterprise, the value is, what is everybody going to think about this tomorrow? It's like, how is fashion going to change? It's that kind of judgment you're making. The cryptocurrencies in particular really interest me because when I look at that, I think this is telling us something about the world we're living in and the trust problems problems that we have in our world. You can trace a lot of the problems in this country to the decline in trust in interpersonal relation between each other and the trust, the kind trust of the government, the kind trust of institutions. And, you know, Satoshi, when he creates Bitcoin, it's on the back end of the financial crisis or the middle of the financial crisis.

It's an expression of mistrust, mistrust of our government's currency, which is not a healthy thing, but an understandable thing. And what interests me when I watch that world, how they move from like a juvenile libertarian fantasy to trying to create trust of their own. And that's when I watch it, I'm watching it through that lens. Like who's trying to build trust in this world and how are they doing it? Because they can't, they're not going to sustain anything without the trust. People will need to trust that their Bitcoin won't be stolen or that there's a place they can put it and it will be safe and they won't forget their keys. All that stuff has to be resolved if it's going to be a viable asset class. The other lens I look at it through

is the social consequences of the asset class getting really big. So when it was 10 years ago, when it was a play thing and it was a few tens of millions of dollars, who cared? when all of a sudden, well, as a few months ago, the market value of all the cryptocurrencies was $2 trillion. Well, the market value of the businesses around the cryptocurrencies was maybe another trillion dollars around the world. When you're talking about a few trillion dollars, this is a different thing. You all of a sudden have, you've created really rich people with a risk. If all this goes poof and $3 trillion vanishes, that's not going to just happen without anything else happening in the world. You create status upheaval. All of a sudden,

people are top dogs in finance. They're there. They're not at Goldman Sachs. There are 50 people in crypto land who have 10 times more money than the guy who runs Goldman Sachs. The game on Wall Street is who has the most money. So Wall Street just lost. The status thing gets really interesting to me. So I look at it through that lens too. Last thing and then I'll let you go. You recently went back and revisited your first book, Liar's Poker. You narrated the audiobook version of it. What was it like rereading a book that you wrote more than 30 years ago? Well, I was bailed out by the quality of the material. I was not, I was learning how to write a book. It wasn't that it was, it wasn't horrible, but it was just, there were lots of moments that

I found literarily embarrassing. And, and I, and I wondered, you know, in the hands of someone who really knew what they were doing, instead of in the hands of someone who was just enthusiastic about some great material, God, that could have been a masterpiece. I could see where I screwed up stuff. And so that was my first thing as I was reading it. And in particular, it's hard to describe, but you find your voice on the page and you don't really think about it. You don't think, oh, that's my voice, but you develop a voice on the page. I hadn't done that when I started that book. That was really the first sustained piece of writing I'd ever done. And so I was learning to write a book by writing a book. And chapter three, four, two, three, four, and five, chapter

one I wrote at the end. So that's not fair, but two, three, four, and five, I could see my voice getting clearer and clearer, clearer. And I could see the influences starting to diminish, but I could hear George Orwell and Charles Dickens and Mark Twain and all these things I was reading at the time in my own prose, which is mortifying. You know, I was like imitating other people. And that's, that's what you do when you're learning. You kind of start by imitating other people, but, but ideally you do it before you write your first book. And I just hadn't, I was getting that out of my system. Season three of Against the Rules is available wherever you get your podcasts. It is eye-opening. It is great storytelling, which is not surprising

because it's from Michael Lewis. Michael, really appreciate your time. Great seeing you. I hope you get out of that basement soon. Come on. How great is Michael Lewis? I could have talked with him for another hour. He is so curious and thoughtful and such a great storyteller, all of which is on display in this podcast. Apple Podcasts, Spotify, Stitcher, Amazon Music, Audible, iHeart, whichever app you use to get your podcasts, check out Against the Rules. And while you're on the app, give our show a follow, if you wouldn't mind. Be sure to check out David Gardner's weekly podcast, Rule Breaker Investing. Among the reasons to listen to these podcasts, they're free. You know what else is free? Our investing

starter kit. It's a 20-page report that covers everything from saving money to 401ks to buying your first stock. And it comes with a built-in watch list of 15 stocks and five ETFs. And it's free. If you're a new investor or you know someone who's just getting started, have them go to fool.com slash starter kit. That's fool.com slash starter kit. The link is in the show notes. So, if you're driving in your car right now or exercising or out for a walk or doing something in your home, just keep doing what you're doing, the link will be there in the show notes when you're done. As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so

don't buy or sell stocks based solely on what you hear. That's it for this week's Motley Fool Money radio show. The episode is mixed by the amazing Dan Boyd. I'm Chris Hill, thanks for listening. We'll see you next time.