TFTC: A Bitcoin Podcast - #523: Why a Bitcoin Treasury is the Winning Strategy with Eric Semler

Episode Date: July 15, 2024

Marty sits down with Eric Semler to discuss why Semler Scientific chose to store their value in bitcoin. Semler Scientific: https://www.semlerscientific.com/ 0:00 - Intro 1:43 - Bill Walton 4:16 - TCS Capital and post dotcom 10:39 - River & Unchained 11:55 - Parallel between late 90s and today 16:24 - Journey to bitcoin 23:52 - Themes that lead to shorting the best assets 32:20 - Gradually, Then Suddenly & Zaprite 33:57 - Bitcoin’s relative upside potential 35:56 - Bitcoin as treasury asset 42:15 - Board members need more skin in the game 50:36 - Future of bitcoin Shoutout to our sponsors: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠River⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Unchained⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Zaprite⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Gradually, Then Suddenly⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ TFTC Merch is Available: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Shop Now⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Join the TFTC Movement: Main ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠YT Channel⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Clips ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠YT Channel⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Website⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Twitter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Instagram⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Follow Marty Bent: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Twitter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Newsletter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Podcast⁠⁠⁠⁠⁠⁠⁠⁠⁠

I think that board members generally are risk averse. You know, they're not looking to take a gamble on something like Bitcoin. They see it as a gamble. You know, I don't, but they see it as potentially a threat to their paycheck as a board member. Our board's different. Our board is mainly directors who own a lot of stock in Semler Scientific. Our goal is to create value in the stock. And that's why we were able to make this decision and why a lot of companies won't be able to do it, because they can't get that type of consensus on their board.

And their board members don't want to take what they perceive as that type of risk. This rip of TFTC was brought to you by River. It's the best place to buy Bitcoin. Go to river.com slash TFTC and enjoy this episode. You've had a dynamic where money has become freer than free. We talk about a Fed just gone nuts. All the central banks going nuts. So it's all acting like safe haven.

I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor. I mean, that's part of the bull case for Bitcoin. If you're not paying attention, you probably should be. You probably should be. My favorite Bill Blanton memory. i only saw him once in person it was at madison square garden had to be 2017 or 2018 when the dead were playing there and i was right side of the stage and i was looking

down at the pit and you could just pinpoint bill walton in the middle of the pit seven foot two with his hands up yeah he was a member of the band you know he um yeah he i had i had we can talk about but i had lunch with him last summer um oh really and it was incredible he he he was the most generous guy with his time could have sat there the entire day talking he just loved people he loved to learn about other people and you know he he um he didn't want to leave like it was just it was amazing he was just and all i wanted to talk about were the 1977 blazers but he he wanted to talk about his favorite novels and what he's what i've been reading what he's been reading you know he's just such a he was just such an engaging person yeah uh the world is uh

missing a piece of itself without him because uh i remember i would stay up late to watch those west coast college games just to hear him yeah he was always hilarious funny as hell yeah so many different chapters in his life you know just so many such a complex guy and some so unusual for an athlete of his caliber to have all those different kind of chapters yeah yeah because he went through a rough patch too right some severe depression lots of yeah he had a um a stutter you know up until um you know he's finishing his professional career i mean the last thing you would ever have thought that he would do would be a broadcaster right couldn't talk couldn't talk in college and um so he met somebody a broadcaster named martin marty glickman

i think he was the next broadcaster marty uh taught him how to speak basically uh and then he became you know very successful on-air guy yeah did you guys talk about bitcoin at all when you got lunch no no uh not yeah no it didn't come up i don't know what his views on bitcoin were i'm sure he would have been he was a very open-minded guy so he probably thought it was cool yeah that's why i reached out to you i mean similar scientific scientific excuse me made um made a big splash earlier this year announcing um that they're incorporating bitcoin as their core treasury asset which was received well obviously by the bitcoin community but i think sent a signal across public markets that the strategy seems like it's going to be catching on

after micro strategy block and others had put bitcoin on their balance sheet um but before we get to that i'd love to dive deeper into your background do some research um into your career And I think for the audience, it would be really interesting to dive into TCS Capital, launching that in 2001, right after the dot-com bubble, having all the success that you did throughout the early 2000s. So what was it like launching a fund right after the dot-com bubble? Harrowing. I didn't really have a choice. I was kind of out on the street, and I worked for a fund that had not done well, was down a lot during that time, and had a wife and kids, young kids, and needed to make some money to support them. And really had no choice but to kind of start my own fund at that time, which was a really difficult time to start a hedge fund.

In those days, there weren't a lot of hedge fund launches. They were fewer and far between. And I just decided to go out on my own, really with not much of a track record. I worked for another hedge fund for a few years, a really high quality one that had just hit hit a wall with the Nasdaq crash and just had the confidence, I guess, in myself that I could make money in tough environment, though that period of time was extremely difficult. If you're a tech investor or media investor, which I was, but I had confidence in my ability to to to pick both companies that were winners and losers. And and at that time, most of them were losers, sadly. But I was I had found success shorting stocks and also being long the right names during that tumultuous time. And when I started TCS in 2001, I went out on a roadshow through Goldman Sachs.

They introduced me to hedge fund investors. They were called fund-to-funds at the time, still are. And the fund of funds who met with me were interested in my strategy, which was really to be, you know, boots on the ground. My background was as a journalist, which was unusual in the hedge fund world at that time. There weren't really any. There were very few journalists who were working for hedge funds. And I had worked at The New York Times and took an investigative journalistic approach to investing. And so that was interesting, I think, to potential investors. They liked that I came at it kind of with this journalistic approach and relationship-driven idea generation.

And what ended up happening was two things. One, I love to write. And so I would just write all these investors that I met who turned me down and said, you know, you seem like a smart guy. But we're not ready to invest. I had no track record, so I can't blame them. And then, you know, I would write them on a weekly basis. Hey, we had a really good week. We did this. We did that. And the other thing that happened is we were doing well when most funds weren't. We were shorting stocks. We were buying the right longs and our performance was really, you know, good and differentiated at that time. This is early 2001. And so slowly investors were getting more interested, calling for meetings. And I started my fund in 2001 with borrowed money and probably one hundred and fifty thousand dollars under management. it. And through strong performance and sadly, you know, 9-11 happened that year, which made things even more difficult as an investor and also as, you know, human, you know, from

it was just an incredibly jolting, sad time in the world. Somehow people, you know, believed in me and gave me more capital. And by the end of the end of the year, we had about 150 million of assets under management. And then from there, we had really strong performance over the next seven or eight years. And we grew the fund to become one of the largest TMT funds at that time, one of the largest independent technology and media funds. I think at our peak, we were around 4 billion of assets under management. And my strategy evolved into becoming a very long-term investor, very high conviction ideas. I tended to like things that other people didn't like. And I tended to like things that were under-researched. So I was not a mainstream

kind of trend follower, or I guess herd followers, a better way to describe it. A lot of hedge funds emerged and kind of owned the same stocks they still do. And there was kind of this herd mentality. I tended to go against the grain. I like things that other people didn't like. And it's just my nature. I come from a place like I grew up in Oregon. We tend to go against the grain out there and think independently. And that's how I am as an investor.

I try to just think on my own and not get too influenced by the herd mentality. This episode was presented by River. River is the best, most secure place to buy Bitcoin in the United States. go to river.com slash tftc set up an account today you'll be able to dca into bitcoin without paying any fees you'll be able to give people bitcoin via river links you'll be able to send and receive bitcoin over the lightning network and you'll be able to set limit orders if you want to buy bitcoin at a particular price below or above where it is now you can set orders to buy bitcoin when it hits that price go to river.com slash tftc and set up your account today this

was also brought to you by our good friends at unchained unchained is building a financial services platform for a Bitcoin standard. They have over 7,000 clients that are securing over 90,000 Bitcoin with 12,000 keys on their platform. Their platform leverages Bitcoin's native multi-sig properties. Their cornerstone product is their Volt product, a two or three multi-sig Volt, which allows you to hold two of three keys in a multi-sig quorum. That gives you full control over your Bitcoin. They also have an IRA product, a lending desk, and they're rolling out a bunch of other products including inheritance protocol and sound advisory so go to unchained.com set up a call with our concierge onboarding team today tell them that tftc sent you and use the promo

code tftc at checkout unchained.com looking back in retrospect it's like 2001 despite how chaotic it was in the aftermath of the dot-com bubble and obviously 9-11 um chaos on the streets probably a lot of fear looking back it was probably one of the best times to enter the market and begin putting long-term positions on particularly in tech and media where you had the washout of the early internet days and then media with the probably 2001 the emergence of microblogs which eventually formed into independent media that exists today yeah yeah and there's a lot of parallels to that time you know a lot of people who are investing today weren't around then to invest. But in that 2000, 2001 timeframe, you had that bubble bursting experience that we've seen

more recently. There's a lot of concern that AI is kind of headed in that direction, that you're going to see it burst before it actually emerges as a real thing. So that's very helpful background in terms of understanding the stock market today, that period of time is very instructive, I think. Do you think we're in late 90s territory in terms of a parallel to that time period today? I think we could head in that direction. I think the biggest difference to me is that the companies back then weren't making any money and or, you know, we're losing a lot of money weren't weren't really fleshed out as companies,

that they were more concepts. And I think that the leaders of this huge rally we've seen in tech are really well capitalized, free cash flowing machines, you know, the hyperscalers, those types of companies. And I don't feel like there's the same level of froth in today's market. I mean, I think it has potential to get there because there's such high concentration in these AI-driven themes, but I don't think it's there yet. It could happen maybe in a year or two, but from my standpoint, I don't see that because of the cash flow and capitalization support that the companies have who are driving this. I mean, NVIDIA has had a massive run and, you know, a lot of people consider it an expensive stock, but it's, you know, it's, it's, it's a stock you can value. It's a stock that isn't, you know, trading at an exorbitant multiple for the type of story it is. And that's kind of the poster child for this move in the market. And so I don't see that as comparable.

But, you know, you're definitely conscious of a bubble forming given just the incredible run these stocks have had. Yeah. In the video, you look at the chart and you're like, ah, this looks bubbly. But then you look at the cash flow and the fact that they're selling hardware as well, which makes it easier. You're like, you actually have to produce something and then deliver it to an end customer. And it seems like there's a lot of demand and they're producing machines and delivering them and they're getting plugged in. So, yeah, it's, I mean, as somebody who's 33, who was 10 when 2001 happened, 17 when 2008 happened. I don't quite have the wisdom of somebody who was paying attention to market.

So I look in the video, I'm like, ah, it looks toppy, but they're also delivering these machines. I use AI on a day-to-day basis. It brings value to what I do here at TFTC. And so I see it up close and personal. It does seem to be working to some extent, at least. Maybe the idea of this multimodal agent world hasn't quite materialized or AGI, but the low-level functions of these AI services actually do bring a lot of value to me and my business personally. So it's one of those things where it looks toppy.

You look at everything that's going on with government debt and the expansion of the monetary supply. And it's like, how do you find the signal through the noise in this particularly chaotic point and period of time? Yeah. Yeah. And so with your experience at TCS and having gone through starting a hedge fund at the depths of a bear market in the early 2000s, what about Bitcoin sort of reminds you of things that may have been going on back then in terms of trends that were materializing and a lot of noise around those trends? But there's certainly signal in these trends, I think, as it pertains to the broader cryptocurrency market. Bitcoin is the signal. It seems like you've really honed in on that.

I see you're on the board of Fundstrat with Tom Lee. What was your journey to Fundstrat and Bitcoin specifically? Yeah. So I think what's important maybe to understand how that journey started is my success as an investor. at TCS Capital in the early 2000s was being contrarian, was kind of going against the grain, as I said before. And where I have been able to be most successful is in betting on themes or ideas that are really out of favor. And so some of the, it's hard to imagine some of these things. But when Google went public, it was a very weak IPO. People did not think

Google was going to be the story that it is today. No one really believed in it. I shouldn't say no one, but it was really out of favor as an idea, as an IPO. And that was something that I believe strongly in and that I thought the market was wrong. And so I was very fortunate to be one of the, you know, to get a large allocation in the Google IPO, for instance. And we can talk about why I thought Google was going to be successful when other people didn't. But if you can imagine when I put in for an order on the Google IPO, and we were a pretty large fund at that point, And Morgan Stanley was running the books. And they call you that morning and say, hey, Eric, you got your full allocation.

That's rare with, you know, typical IPOs in tech. And, you know, they're usually oversubscribed. And you would think a company like Google, you couldn't give those shares away. um that's the kind of investor you know that i am and take pride in being is kind of being one of those guys who doesn't care what other people think same thing happened with netflix uh we were at one point one of the largest investors in netflix uh institutionally um really out of favor company uh when they announced that they wanted to do an offering to raise capital to fund their um to fund you know a streaming product um there was hardly any demand

Lehman Brothers did an overnight offering we were the largest investor in it couldn't find people to to to sign on to Netflix's strategy that would go on to become just you know a massive juggernaut um Pixar similar story Sirius Satellite Radio these are companies that um the market just didn't believe in and i'll be you know straight with you some of my peers uh and other hedge funds really uh who were a lot of these guys are short these stocks at the time give you a hard time for owning i i took so much flack for being a shareholder in netflix if you can imagine that No one thought of a future. And so those types of those types of opportunities are I think Bitcoin kind of fits into that, that that silo, that category of ideas that, you know, over time, people have kind of bet it against. And now, you know, they're starting to come around to Bitcoin, as we're seeing through the institutionalization of Bitcoin.

But, you know, in these great companies or these great concepts like Bitcoin, you're always kind of going to see this friction, you know. And a lot of times, if you're right, you make a lot more money because of the friction. You know, that that's that's why I much prefer, you know, it's much more rewarding type of outcome to not just financially, but just, you know, physically, emotionally, you know, to to be able to kind of weather that and and when and and to when you win much bigger when when, you know, you go against the grain and you're right. um tom lee is is tom lee and and i have kind of a kinship in that we do think of the world very similarly known tom a long time he was um he was just an incredible analyst in this in in the wireless area where which i uh was an area that i invested in a lot in the early 2000s tom was um similar. He was a sell-side analyst. He didn't invest directly in these companies, but he tended to like things that people hated. He tended to be a really contrarian sell-side analyst,

which is really rare on Wall Street. You don't see, you see the sell-side, the guys who like write reports and put ratings on stocks tend to be also very herd-oriented. There's not a lot of independent thinking tom really stood out as a independent thing in wireless particularly companies like western wireless and um companies that were heavily levered that people thought were left for dead and tom would upgrade stocks at a dollar and they'd go to 40 bucks you know Like he was just one of those guys who had the guts to see, you know, past everyone else. And so we connected that way and have stayed in close touch over the years. And, yeah, I decided to become an investor in Fundstrat a few years ago.

They have a terrific business. And, you know, Tom, you can see is just kind of often a lone voice crying in the wilderness and just a huge admirer of his. I think he's a refreshing, independent voice on Wall Street. Yeah, I mean, he's been a stalwart on mainstream media in terms of advocating for Bitcoin for the better part of a decade now, which is impressive. if he's been out there on an island in the TradFi world saying, hey, Bitcoin's going to be a thing. He's been right up to this point. But as it pertains to the individual investments and the naysayers,

in your experience, whether it's Google, Netflix, or Bitcoin, what are some of the reoccurring themes of people who don't see what you saw in terms of the potential of these companies and this digital asset that forced these guys not only to the sideline, but also to short these assets? Do you think it was somewhat of a Luddite experience playing out where they couldn't see that things were changing rapidly beneath their feet, or was it something else?

You know, it usually starts with the multiple. You know, it usually starts with people looking at something and saying, wow, that's trading at 100 times revenue or 100 times earnings or, you know, it looks at it's an outlier. It doesn't make sense. How could something be valued that much for and they don't have that much revenue or they don't generate earnings? And and and you have to be able to kind of, you know, see a little further out and say, look, they are going to you know, they're going to be an incredibly profitable company. It's really not trading at that multiple. If you look at it on, you know, a few years out now, that type of investing that's called like time arbitrage investing was actually popularized by Bill Miller, who was considered a value investor but he he you know he became famous for seeing that in amazon when others didn't uh you know amazon looked like a train wreck when it first came out it had a lot of debt didn't you know you know it had low margins wasn't it was in competitive businesses

but bill miller you know he looked out and he saw that you know a company like amazon really was going to you know become to scale up and become a dominant business that was really undervalued that has become kind of more of a you know that that type of investing because of guys like bill miller and and things that have happened like with google on netflix that investors have now kind of been more open to these types of ideas um but it usually starts with valuation people look at things and then it's and then it's also a new business model so google no one had really seen google's business model before no one had seen netflix do what it did um serious satellite was another example of that it was kind of this new

form factor new new business model that um really challenged the the the incumbents and um there's just a there's just kind of this natural tendency to think oh no way they could pull it off i i can't tell you how many meetings i went to uh even in the old days when netflix was just a physical delivery business and you go to a meeting at blockbuster and blockbuster did not blockbuster was the you know the incumbent and they did not take netflix seriously and they convinced investors not to take netflix seriously and um there's such there's just this kind of um you know uh it's it's like you're indoctrinated to to think that the status quo is a status quo And it just it's so hard for people to think outside the box and see that change coming.

And it's particularly difficult with Bitcoin because, you know, you have sovereigns who are, you know, preventing it from, you know, growing and emerging. And it's just remarkable to see how well it has staved off all of that resistance. And I think that, you know, we saw that, you know, in the stock market with companies like Google and Netflix and Pixar and lots of companies. You couldn't imagine now, if you look back, that there were people that it was hard to find investors who wanted to institutional investors who wanted to own these types of companies because they were new and foreign and traded high multiples. Maybe they had a lot of debt because they needed to fund their business models. And people just didn't think that they would survive or prosper and, you know, how wrong they were. Yeah. With that in mind, I think Bitcoin has to be even more confusing for this type of investors sort of stuck in their ways because it doesn't. It's not a company. It's not a business. It's not producing cash flows.

it's this scarce digital asset um that runs on a distributed peer-to-peer protocol and so looking at this and that's funny i was at a dinner a couple of weeks ago in austin and um ran into a bitcoin naysayer and that was like his biggest thing he's like i like i like things that produce cash flows and can spit out dividends and bitcoin doesn't do any of that it doesn't have any intrinsic value and therefore i'm not going to invest in it and so um inputting this digital asset into the world and positioning it as a once in a lifetime asymmetric opportunity seems completely foreign to a lot of these types yeah and i think that's great i mean i think um we need more people to think that way like your friend because that's what that's how we make

more money in in this concept i i believe or how how it succeeds you know i i think that you need that friction to continue and um and all i think most of those people will come around once they really understand what what bitcoin is and by the way i i think that it i in some ways um i i think i i think that bitcoin is real relatively um easy to value if you look at gold And the irony is that a lot of people that own gold are conservative. You know, they are conventional and they're very risk averse. And so you would it's hard to imagine those people buying Bitcoin, but they're probably the most they would they would understand the valuation, the undervaluation of bitcoin probably better than anyone because bitcoin is very much

is so similar to gold except that it's you know that it's digital and has you know much better characteristics and has uh optionality that gold doesn't have the transactional potential transactional nature of it that gold doesn't have and among other things so if you look at gold it's got a market value of 16 trillion and it's been pretty uh you know gold has been a good investment over the last 20 years it's uh you know from i think 500 announced to 2400 announced you know so like it's you can't complain about that and um and it's been around for centuries it's obviously not going away why gold is gold is you know it's kind of a moot point it's it's it's proven itself over time to be a valuable asset.

It's a rare mineral. I don't think it's the rarest mineral, but it happens to be, through time, the best store of value, best place to, you know, a safe haven asset, one of the best. And so I would think that if you own gold, you're conservative, you don't like to stretch to buy things at expensive multiples, you would buy Bitcoin because Bitcoin is so similar to gold and better. And it only has a trillion dollar market value. So gold trades at 16 times the value of Bitcoin. If gold trades down and Bitcoin, it's still Bitcoin still has a lot of upside, even if gold sells off a little bit. So I think that's your I think that's your focus

in terms of valuation and analysis. I really believe that. I think that shows you how much upside Bitcoin has as an investment. Quick break here, freaks. This rip is brought to you by Gradually Then Suddenly, a framework for understanding Bitcoin as money by Parker Lewis. I wrote the foreword to the book. I'm honored to have done so because it's the best zero to one primer

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annual subscription. Zaprite.com slash TFTC, $40 off. Compared to all the other investments you've made throughout your career how does bitcoin compare to other assets whether it be google netflix in terms of upside potential like how how good of an opportunity from a risk-adjusted perspective is it to be allocating to bitcoin right now compared to other assets that you're investing at other points of your career um i i don't i i um i i don't see it um really uh i see it very similarly i should say you know i think that it has that kind of um outsized potential return um you know the the the because it's contrarian still although it's becoming less contrarian um and it has the upside into the valuation of gold i believe that you know and so

um i think that it's you know anything with you know that's trading 16 times below its peer uh is a really attractive risk reward so hard to say uh you know when you when i was buying And Google, I think we thought it would do $3 a share in earnings. It went public around 90-ish a share. So it was trading at like 30 times earnings when it went public. Turned out that they did, I think, close to $6 a share in earnings. We thought they would do three. So Google went public at like 15 times earnings, which is, you know, at that time it was growing like a weed.

Um, so I think that you have that type of, uh, unpredictable upside, uh, given, given kind of it's, it's discount to gold. And let's transition to Bitcoin as a treasury asset, particularly for publicly traded companies. director at similar scientific again made that big announcement earlier this year why did it make sense to put bitcoin on the balance sheet as a treasury asset in april or may of this year and since then i believe you made two announcements that you're adding to your position on the balance sheet and what is driving publicly traded companies particularly similar to adopt Bitcoin as a treasury asset?

Why does it make sense? What does it do for the business strength of the balance sheet and the potential to either expand or explore new business avenues in the future? Yeah, so this is totally, you know, I'm talking with a different hat on as the chairman of a similar scientific public company that I have been an investor in since its inception back in about 20 years ago. I recently joined the board or in the last year or so, in April last year, I joined the board, had not had been just a passive investor in the company. There were some corporate,

there were some corporate actions that I didn't approve of and, you know, approach the company with one of the other large outside investors and asked for board seats. And we ended up, Will Chang is his name. Will and I joined the similar board. I became the chairman last April. We've had a very successful medical business. We have a device called QuanaFlow that measures people for a condition called peripheral artery disease, PAD.

And the product has been, you know, had been doing really well, has very high margins. And recently, right before I joined the board, had run into some issues with changes at CMS, which oversees Medicare Advantage, and affected our reimbursement. And so that created some tumult in the stock. And since that time, we have been spending a lot of our time looking at additional sources of revenue and new businesses and potential acquisitions. What happened was because we have such a high margin product and that generates a lot of cash flow, we built a large cash balance. Uh, our balance sheet got, uh, uh, we got to a point where we had, um, uh, to decide what to do with all of our cash, our, our market cap, uh, our stock had trended down to a level where, um, cash had almost become half of our market value, the value of our

stock. So it was a huge component of, of our, of our story. Uh, and so we looked at acquisitions. We spent a lot of time doing that. We thought about stock buybacks and other things. And as this was happening, Michael Saylor was out there for MicroStrategy preaching to small and mid-sized companies to to use their cash to buy Bitcoin. And I had been listening to a lot of his comments and and and I agree with him that there are so many companies and, you know, our market cap now is around, you know, two hundred and fifty million dollar market cap. there there's so many companies in our of our size or even bigger that have strong balance sheets and are not are just sitting on cash and really have uh not a clear picture for how to how to deploy it

and he has been telling these companies you know you should buy bitcoin that's a great you know get a great return on that investment etc um and as an investor in the stock market i've i i've always been interested in smaller and mid-sized companies and i've seen the underperformance of these stocks it's it's a that's a whole nother topic but in general investors have made so much money in much bigger more liquid companies that it doesn't make as much sense for them to have to you know do the surgery brain surgery to figure out if a small cap stock you know it's going to go up or down it's it's uh it's hard you know it's hard when stocks aren't that liquid to find buyers and it's just it's just a really complicated area smit called smit cap investing

so i i was aware of that and i was thinking god how how what is the best use of our cash and what michael saylor was saying resonated with me and um we as a board discussed it and debated it and just decided that maybe this is a great use of our cash. We're not getting any credit for having this cash. Perhaps there's a better way to hold the cash rather than in dollars. Maybe we should hold it in Bitcoin. We've talked about why Bitcoin has upside and we can talk about all the other issues in the world with, you know, owning currencies and the debasement of currencies. And, you know, I think it was in the Bitcoin standard. It was said that, you know, Bitcoin is the cheapest way to buy the future because it's the only currency that is guaranteed to

not be debased no matter how much its value increases. And I think that that is a powerful concept and that's how we came around to uh deciding to to change our bit uh our treasury strategy yeah with that in mind i do you think again considering you alluded to considering the nature of the global macroeconomic landscape particularly as it pertains to currency debasement and fiscal dominance particularly here in the united states do you think boards of publicly traded companies or even privately traded companies for that matter have a fiduciary responsibility to put a heavier weight on these risks in terms of the index index of the risk analysis analysis that they're doing is if companies are not weighing the currency

and debt risks that exist in the West or are they not doing their duty as directors? I don't know how to answer that question. I think there's a more practical answer to that. I know I've spent a lot of time thinking about this because one thing we haven't talked about is that I have spent the last part of my investing career as an activist going on boards of public companies

or writing letters to companies where I think the board is not acting in the best interests of shareholders. And what I've learned from that, serving on public company boards, is that most boards, in my opinion, are filled with directors who are looking to just collect a paycheck every quarter. They don't tend to own a lot of the company stock that they're on the board of. It's not something where they have a lot of skin in the game. There tend to be older people who are retired and almost doing this just as a source of income and don't feel the pain or the incentives maybe that we would feel as shareholders. So I think that board members generally are risk averse. You know, they're not looking to take a gamble on something like

Bitcoin. They're just, they see it as a gamble. You know, I don't, but they see it as, you know, potentially a threat to their paycheck as a board member. And it's very difficult for company boards to come around to the idea that, to think about things that, you know, that philosophically, I guess, you know, it's unusual to have a board that's going to really address those types of questions that you're asking. They're more focused on the short term, the quarter, making sure that, you know that um just like this the the the basic nuts and bolts of the company are uh you know kind of on track and it's and they're very divorced from the actual operational side of the business our board's different our board is um mainly uh directors who own a lot of stock in similar

scientific. They have huge incentive to see the stock go up and to maximize value for themselves and all shareholders. So there's this, there's an alignment with the board and the shareholders of the company. We all want to see the company's stock do really well. It's much more important to us than getting paid a stipend for being a board member. That's much more secondary. Our goal is to create value in the stock. And that's why we were able to make this decision and why a lot of companies won't be able to do it because they can't get that type of consensus on their board. And their board members don't want to take what they perceive as that type of risk. They see it as a very risky kind of, I think, in some cases, probably, you know, just too outside

the box for them to make that bold a decision. And they'd rather just maintain the status quo. And so that's why we did it. That's why we were able to do it. And maybe why it's not happening as fast as it should. You would think that more companies with lots of cash on their balance sheet, big and small, would turn to owning some Bitcoin. Just the way that Wisconsin Pension Fund is buying Bitcoin or so many other institutions are buying it now with the ETFs, you would think that there would be more announcements. It's surprising there hasn't been, but maybe we were able to be early because our board has so much skin in the game. Yeah, that's a very good point. you want these directors to have skin in the game values aligned to dry value to the to the underlying shares at the end of the day and it does make sense that a board with that mindset and that skin in the game would be more willing to make a jump like this and it seems like we're

in the trickle phase of this bitcoin treasury strategy in public markets specifically what do you think it's going to take to get the interest of other boards in the public markets that get their interest piqued to say, oh, maybe we should be doing this too. Because if you look at the reaction, particularly of the stock price for companies not only similar, but others like MicroStrategy, Alliance Resources, the coal producer that announced they've been mining bitcoin for a few years now it has been very beneficial to the underlying stock price and do you think that creates some fomo from from other boards in the public markets that will force them to seriously consider the strategy yeah yeah i do i think it's a herd mentality

thing it goes full circle to what we've been talking about with stock market and how powerful that herd mentality concept is. I think you're going to, you know, it helps that our stock did have a great reaction. I think other companies, smaller probably, rather than larger, will look at that and say, wow, maybe we should try that. We've had a really positive reaction from people outside the company and investors. And so I think that that definitely helps and is probably going to take more than just us and a successful stock performance or micro strategy to pull that off. But I think it will happen gradually and incrementally. Like you said, I think that what will happen is that a lot more board members and companies, executives will see that Bitcoin is

a great store of value. I think that just time is the best element to prove that. So it's just more time passes and Bitcoin, you know, separates itself from other cryptocurrency and there's no alternative to Bitcoin. I think that, you know, that will just gain strength and as a store of value and people just more and more look at it versus gold and say, wow, it's, you know, that's that's a huge disparity. There's a huge disparity in value between Bitcoin and gold. And so you have kind of this dual attractiveness of Bitcoin. It's a great store of value, but it also is a great investment. And so I think those two factors will eventually lead to a herd mentality where you'll see a lot of companies do what we did and now outside of this treasury asset what most

excites you about bitcoin whether it be the technology or the potential it has to unleash innovation or freedom as we move forward through time like do you find bitcoin simply as a unique investment opportunity and good treasury asset or is it bigger than that to you um i don't think it I'm still exploring that concept. I think there's so much to think about there. It has so much optionality and it wouldn't surprise me if a lot of things that talked about come to fruition. But as an investment, I don't really, I'm not banking on that. I'm just banking on this kind of increased notion as a store of value and it becoming more and more embraced by people as a value. I think what's really exciting is that the younger generation really embraces Bitcoin.

And that's the future. And I think that that's just a huge driving factor in Bitcoin becoming more institutionalized, more established. And as that's happening, just to see like the huge you know, institutions like BlackRock, you know, really supporting it, that combination is super powerful. Having these massive institutions, it's hard to get any more impressive than BlackRock as an institutional supporter for something. When you have BlackRock on your side and you have a whole generation coming up that, you know, a lot of whom believe in this asset, and then you have these issues around the world. It's probably more pronounced much more outside the United States where currencies are getting debased. It's just such a it's an incredibly strong force. And so

whether Bitcoin becomes more transactional or becomes, you know, something that's valuable in health care, that's great. That's gravy. But I don't I'm not necessarily, you know, doesn't for it to be a successful investment, I don't think it necessarily requires those, you know, additional things. Yeah, I think that's a very sober approach to it. And it's refreshing to see somebody of your caliber, who's really had an incredibly successful career, investing through many different types of cycles and themes and emerging technologies, recognizing this and then not only that but putting your money where your mouth is and um really putting uh bitcoin on on similar's balance sheet is is i think going to be looked

back in a decade as one of the wisest moves i mean juxtaposed through what saw some sovereign nations like germany dumping i think more than 30 000 bitcoin in the last week alone um you're to look at that and then juxtapose that to yourself micro strategy alliance resources and others who saw the signal going the other way and acted appropriately i think it's going to be um it'll be written about in history the the early movers in public markets that decided to put this asset on their on their balance sheet um to me it's a no-brainer you're talking to somebody who's pot committed has been maniacally obsessed with with this asset for 11 years and And it's something that people have surmised over the course of Bitcoin's first 15-year history.

But I think as it stands today in 2024, a lot of the things that people talked about 10 years ago are beginning to materialize. And it's just incredible to watch play out in real time. Yeah, that's amazing. That's really impressive that it's been 11 years for you. Yeah, it's been a fun journey. It's a third of my life now at this point, which is hard to believe. Good for you. Eric, this has been an incredible conversation. I really appreciate you taking some time out of your morning to sit down. I think your story is very unique in the Bitcoin space, and I think it's an incredible validating signal that somebody with your experience has recognized Bitcoin and taken action to put a position on.

So kudos to you and really appreciate your time. Thank you, Marty. It's been a pleasure. It's great meeting you. and uh look forward to stay in touch definitely okay we'll have to connect on the east coast at some point be great all right thanks for your time okay take care thank you peace