The Canadian Investor - Why Gold and Bitcoin Provide Money Printing Insurance

Episode Date: May 20, 2024

In this episode, we look at the legacy of Jim Simons who recently passed away. Known for both his mathematical genius and philanthropic endeavors, Simons left an indelible mark on the investment landscape with his revolutionary approaches at Renaissance Technologies. We unpack the astounding performance of the Medallion Fund, which achieved phenomenal returns over more than 3 decades. We also answer a listener's question which asks about the merits of investing in both Gold and Bitcoin. With central banks' actions under scrutiny, especially during crises like the COVID-19 pandemic, we discuss the evolution of money supplies, the enduring value propositions of gold and bitcoin, and the strategic diversification of assets to safeguard against potential financial instability.  Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Sign up for Finchat.io for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

Welcome back into the show. This is the Canadian Investor Podcast, made possible by our friends and show sponsor, EQ Bank, which helps Canadians make bank with high interest and no fees on everyday banking. We also love their savings and investment products like GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs on a regular basis to set money aside for personal income taxes in April of every year. Their GICs are perfect because the interest rate is guaranteed, and I know I won't be able to touch that money until I need it for tax time. Whether you're looking to set some money aside for a rainy day or a big purchase is

coming through the pipeline or simply want to lower the risk of your overall investment portfolio, EQ Bank's GICs are a great option. The best thing about EQ Bank is that it is so easy to use. You can open an account and buy a GIC online in minutes. Take advantage of some of the best rates on the market today at eqbank.ca forward slash GIC. Again, eqbank.ca forward slash GIC. This is the Canadian Investor, where you take control of your own portfolio and gain the confidence you need to succeed in the markets. Hosted by Brayden Dennis and Simon Belanger. The Canadian Investor Podcast. Welcome to the show. My name is Brayden Dennis, as always joined by the versatile Mr. Simon Belanger. Sir, we got two big chunky topics today that I think everyone is going to like. Looks like the market is doing some weird things right now.

I'll leave it to you and Dan, but it's a bad week to be short junk, it seems. Yeah. You probably lost a lot of money if you were short junk this week. Yeah, I have a feeling you're referring to GME here, GameStop, and some of the other Maymay stocks. Here's the thing, though. It is not just the usual suspects. 16 of the 17 most heavily shorted Russell 1000 stocks were up massive double digit percentage

points on the day as of recording this. And it's Tuesday, May 14th. It's a similar story Monday May 13th so it is a it's a bad week it's bad week to be short junk so what we lost an investing legend last week Jim Simons did you ever read the book the man who Who Solved the Market? I did not, but now it's definitely on my list of books to read, but I know about him though. Okay. Yeah. So I haven't read the book either. You and I, we got the Audible subscription going. I hope it's on Audible. Maybe we can crush it and do a recap. Jim Simons, investing legend, died at 86 last week. And I have not read the book about him, but I did listen to the three-hour podcast that Acquired did on Renaissance Technologies. So Rentech or Renaissance Technologies was a algorithmic trading hedge fund headed up by Jim Simons.

It was basically a team of mathematicians that teamed up to build Rentech, which was an algorithmic trading firm that probably has the most successful track record of any fund ever, which is kind of insane. I mean, there are a ton of famous investors, but there is no more impressive track record since launching Rentech publicly in 1988. Have you seen the track record Rentech did? Have you ever seen it, explored it? No, but I i mean you have it you have it here so it's quite impressive it's it's a track record that the first time

i heard it i didn't believe it the second time i heard it i i said to myself you know that's that's as good as bernie mff. You know, that kind of alarm bell goes off. The third time I hear about it, I thought to myself, what's the catch? It's almost unbelievable. The Medallion Performance Fund, sorry, the Medallion Fund, the performance data of the Medallion Fund from 98 to 2018 is nothing short of spectacular. And the returns since 2018 have also been spectacular. But here they published it from 98 to 2018. And the fund was limited to $10 billion up until 2018 for reasons that i'm going to talk about but the average return was 68 gross and 40 net they were doing a fund fee structure of five

plus 20 i believe or something like that it It is absolutely absurd. So that's 5% off the top and then a huge performance fee. Wow. The performance fee went up after 2000. Yeah. So the performance fee went from 20%. So they've been charging a fixed fee of 5% for the first roughly 12 years. It went up to 36%. And then they said, roughly 12 years. It went up to 36%. And then they said, hey, how about a 44% performance fee? So for those who were doing the quick math at home, it's 5% off the top. And then 44% of outperformance on the market taken as fees. Absolutely bonkers. But when you have fees that are 58%, 39%, sorry, performance fees that are net 58%, 39%, 33, 39, 70. In 2000, they did 98%. And in 2008, when the market lost more than 25% across the board, Rentech did 82.38 net of fees 152 gross return in the year of 2008

this is just it's just silly it's just absolute silliness i'm going to get into how they did this but what are your thoughts when you see this yeah i, I mean, obviously, we've been pretty critical of fees in the past. This is a situation where they clearly had a impressive track records. And I would assume that they had loads of demand for the funds, which allowed them to charge higher fees, because clearly, if you don't have demand, you cannot increase fees like that. And just goes to show what kind of returns you need to have to be able to zero out those fees, right? And have like some really nice outperformance. Because if you start comparing both of them, it's like, okay, like almost like, you know,

your returns almost cut in half because of fees. They're so very good and outperform the market and everything's impressive. That is kind of one thing that comes to mind. The other thing is that I think it's especially impressive around the like 1999, 2000. I don't know when, you know, quant funds and funds that relied more on algorithm started to become more popular as hedge funds, but I would assume it was probably like late 1990s so that they'd be able to keep those returns throughout, you know, the 2000, 2010s. I think that's where it gets impressive when it's smaller. Not that it's not impressive, but you know, you're not playing with a lot of money. So it's oftentimes easier to make those returns, especially if you're a first mover with this kind of strategy, you probably have a

first mover advantage. So I think it's especially impressive that they were able to do that over a very long period of time. And they were able to do it with a $10 billion fund size as well. They had to cap it there as a result of slippage, what I'm going to get to a little bit. But here's a great quote from Jim Simons. He did a seminar, I can't tell you where, but I saw the clip. The quote was, I did a lot of math. I made a lot of money and I gave it almost all away. So very philanthropic guy. Every single photo I've seen of him is in front of a chalkboard with crazy formulas behind him smoking a cigarette.

That's who Jim Simons was. So he did a lot of math. He made a lot of money and he gave almost all of it away. And they made a lot of money. An unbelievable amount of money during that time, because they had to keep the fund size at 10 billion because they couldn't go further. And for a while, it was a lot even less. So they basically were just raking in all this cash because they couldn't just put it back into the fund for reasons that I'm about to mention. But that is a badass quote. I did a lot of math, made a lot of money, and I gave it all away. I don't know what's more impressive. The fun returns are living until you're 86 if you're a smoker. That's pretty impressive too.

If you Google images, like he's smoking in 9 out of 10 pictures in front of a chalkboard, it's pretty funny. So as far as I know, so into the strategy and how this works, it's a fairly short segment I have here. And most of it's actually taken from shout out the acquired podcast. So as far as I know, the fund has been crushing it ever since, by the way, since these numbers in 2018. The Medallion Rentech Fund is still doing exceptional numbers. And they thrive in down markets and volatility, including 2020. So the story goes,

I mean, look, they did 150% in the great financial crisis. I don't think anyone was too mad about paying huge fees when they still netted out over 80% when almost everyone lost their, you know, people down the street lost their house and their portfolio in the same year. I mean, breaking even was amazing for that year. Just breaking even. You were an all-star if you broke even, correct? Yeah. They must have had some pretty interesting hedges in place. Yeah. There's a long, short strategy for sure. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using

Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense, and with them, you can buy all North American ETFs, not just a few select ones, all commission-free, so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com.

So not so long ago, self-directed investors caught wind of the power of low-cost index investing. Once just a secret for the personal finance gurus is now common knowledge for Canadians, and we are better for it. When BMO ETFs reached out to work with the podcast, I honestly was not prepared for what I was about to see because the lineup of ETFs has everything I was looking for. Low fees, an incredibly robust suite, and truly something for every investor. And here we are with this iconic Canadian brand in the asset management world, while folks online are regularly discussing and buying ETF tickers from asset managers in the US. Let's just look at ZEQT, for example, the BMO All Equity ETF. One single ETF, you get globally

diversified equities. So easy way for Canadians to get global stock exposure with one ticker. Keeps it simple yet incredibly low cost and effective. Very impressed with what BMO has built in their ETF business. And if you are an index investor and haven't checked out their listings, I highly recommend it. I bet you'll be as pleasantly surprised as I was that BMO, the Canadian bank, is delivering these amazing ETF products. Please check out the link in the description of today's episode for full disclaimers and more information. So Acquired Podcast did an excellent job covering the jim simons medallion fund well the jim simons headed up medallion fund of rent tech aka renaissance technologies the flagship fund did 68 gross and 40 net over the past 30 40 years on average while never once

losing money for those keeping track at home, quote, 1,000 invested in the medallion in 1988 would have compounded to $46.5 billion today. Oh my goodness. Of course, that was not possible because you couldn't actually keep the money in the fund. They had to return it all back. And the reason for that, they had to keep the fund size capped to prevent something called slippage. Quote from the Acquired Pod, up to this point, the vast majority of what Medallion was doing was trading currencies and commodities, not equities, because you might be thinking, okay, yeah, I hear you. The 90s was a different era, but half a billion dollar fund

doesn't sound that big. How are they moving markets with half a billion? But it's not the equity markets. They're trading thinner markets. It's not commodities and futures are small markets. They're large, but they're thin compared to equities. There's just not that much volume and you can't trade that much without slippage becoming a huge issue. And Medallion is now hitting that limit. So Simon, it's basically like you'd be trading against yourself if you had like a hundred billion and there's no liquidity,

no volume to move on these thinner types of commodities they were trading. So that was the rationale for keeping it so small or $10 billion, not as tiny fund, but for how much demand they were given from investors to take their money, it was a relatively small fund. Yeah. Yeah. I mean, that makes sense, right? It's just equity markets are much larger. And then if you want to get in the really massive markets, then you go into the bond market or debt markets. That's like on another level in

terms of size. Yeah. Correct. Exactly. So they would hold thousands of long, short positions at every given time. And the holding periods range from like a day or two to a week or two. Apparently they made between 150,000 and 300,000 trades per day, algorithmically. Did a lot of math, made a lot of money and gave it all away. The fund was capped at 5 billion for a while, then 10. And I believe, I don't know this for a fact, but I believe it sits at 15 billion today. It's no longer Jim running it. It's two of his more trusted guys running it. I think they're running it at 15 today, as far as I know. They went on to open a... Well, I hope it's no longer a gym running it

okay dark dark joke dark joke i love it i think it is i'm sure some people caught that as well dark joke but here we're here for it here on the pod they went on to open another fund because people were very obviously there's a lot of interest for people to give them money, of course. They uncapped it and it's fair to say that it didn't really work without capping it. So they have other funds and they've done fine, but you're not covering it on the podcast. You're not writing any books about them. So their strategy really does face up against size constraints. Yeah. Yeah. I mean, it's definitely an interesting kind of interesting to look at. And I think it's just a reminder that, you know, people can make money with different strategies. I think that's kind of the main takeaway. And I think it's also, I'll come back to the fees, is you have to get really strong overperformance when fees are that high.

And I think, you know, this is more the exception to the rule. I think that's really important. And we've talked about private equity before. I've been very critical. But one of those reasons in private equity will actually have kind of a similar fee structure. So they'll have kind of base fee and then a performance fee. But the issue with private equity is where how they calculate those performance fees, right? It's more of an estimate. And they're a bit generous in terms of when they start calculating those

returns without going to too much detail. But that's why I've been critical. That's why I also Buffett and Munger have been quite critical and other people about that, those kind of strategies. But definitely, you know, this fund is completely different from that. But I just wanted to mention that even though this might sound impressive, I mean, this is the exception to the rule for fees. Yeah. And is it mark to market or mark to I just made it up? Yeah.

Yeah, you can. Oh, yeah, it's like, oh, I'll just. Or Mark to I just made it up. Yeah. Mark to vibes. Yeah, it's like, oh, I'll just kind of, you know, pick and choose what I want to compare it to. I'll just pick whatever fits my boat. It's like inflation. Yeah. It's like an inflation number. Mark to vibes.

All right, Simon, that's the recap on legendary investor, rest in peace, Jim Simons, extremely impressive mathematician and just inspiring collector of the smartest human beings possible. It's like an experiment when you bring together just the most elite, I think he had over a hundred PhDs in mathematics of like the most bright people who were not like, didn't have backgrounds in finance or trading or algo or quant or any of that stuff, but they were exceptionally smart. And he aggregated like hundreds of PhDs over that timeframe of just the smartest people. So it's an interesting kind of experiment on what happens when you bring the brightest people in the room together,

headed up by someone who's a leader and has the vision for it. So rest in peace, Jim Simons, to an absolute legend. Yeah, no, exactly. And now we'll move on to the other segment. So another question that I got, so question from Brent on Join TCI. And obviously, we can't always get to all the emails and questions we get. Like Join TCI, we, you know,

we make sure that we respond to people. Sometimes it takes a few days. We both have some busy schedules. But sometimes I'll pick some questions because this one was good. And I'm just like, it's going to be way too long of a response. I think people know me. I tried like when there's something I want to put a lot of thought in, you know, I can do quite lengthy responses. So the question from Brent was why own both gold and Bitcoin? If you're concerned that central banks can't be trusted and will just dilute the value of the local currency, why not just own gold or silver as insurance? At least gold and silver has a modicum

of application for industrial usage so you can make the case that it has some fundamental value bitcoin is just ones and zeros i just don't see where the fundamental value is it really just seemed like an artificial way to own gold so what am am I missing? And of course, go Canucks. Go at the end. So I haven't checked. Are they leading the series right now? I haven't been following the playoffs. I believe it's 2-1 as of recording when you guys hear this. For the Canucks, huh?

Yeah, exactly. When you guys hear this, who knows? But whatever team comes out of that, we need a Canadian team to at least go the distance here if not win the whole thing we absolutely are desperate for a canadian team this could be a good year for it i mean the odds are kind of following right i think in terms of percentage of canadian teams versus american to have two in this round i think it's following the odds one in the next one now just uh just hoping we beat the odds for the Stanley Cup finals.

That's right. I don't have a horse in the race, so good luck to both teams. Having said that, I think it's a great question. And the reason that Brayden asked that question is because I had a goal to my portfolio last month in my joint TCI update. Now, I'll kind of break this down a little bit. And Brayden, feel free to, you know, chime in as well. So the first part he mentioned, like being concerned about central banks, the fact that he can't be trusted. And I think honestly, the evidence is clear that central banks can't

be trusted as harsh as it may sound. The way I view trust here is that you don't know what they'll do and what consequences it will have in the long term. And to be fair, you don't know what they'll do and what consequences it will have in the long term. And to be fair, I don't think they also know what they're doing and what the consequences will be in the long term. And I recently listened and I'm not just being just saying that like this. I recently listened to a former president of one of the feds in the US, an interview, really long form interview interview it was on thoughtful money for people interested with adam tagger really good podcast for a macro focus and he was talking to the fed president that was there during the financial crisis you know in 2008 and basically you know

whatever we think our suspicions are about central banks in terms of making decisions and being very reactionary and not necessarily thinking what the consequences can be in the long term. He pretty much agreed with all of that. So that's why it's and that's someone who was there and one of the few descendant voices of, you know, doing those massive bailouts during the great financial crisis. So I just wanted to add that just so people don't think like, oh, like they're smart. They know what they're doing. I'm just saying that like I'm, you know, this is not just based on random stuff. And we've seen also evidence of this happening.

If you know, if you go back to COVID, for example, central banks panic and lowered rates to essentially zero when that wasn't really the issue. The issue was supply chains that got disrupted, not interest rates being lowered. So these are just example. But for the most part, it's because, like I said, central banks are reactionary and rely on lagging data or questionable data. And an example of questionable data would be the surveys that central banks conduct from businesses and households.

One of the big issues with these surveys is that the response rate is not very good. And I will add the link here from the Bureau of Labor Statistics in the US in terms of response rate. And most major surveys have a response rate of below 60%. So that comes into question in terms of like, how accurate is this data? There's not a lot of people in businesses responding to that, right? So that's the first thing. Obviously, they look at a maraud of data points, but that's just an example of, you know, whether they're even, you know, the data they're looking at is even accurate or not. And money printing, obviously, is an exponential equation. So if you look at M2 money supply, which includes money in circulation, demand deposits, savings deposit.

Demand deposit would just be like regular deposit. So if you want to withdraw your deposit from the bank, you just go and get it. So these are demand. You can get them from any time. Small time deposit. These are like CDs or CDICs in Canada. So they have a term to them. And then retail money market funds.

So this would all be included in the M2 money supply. It's the most widely quoted metric of money supply. There are different ones, but it would be too long to go over all of them. And just to give people an idea of how exponential it is. So in December of 1960, the M2 money supply was $360 billion. In December of 1990, it was $3.3 trillion. In December of 2020, it was $19.1 trillion. And in December of last year, it was $20.8 trillion. It just, I mean, it's the power of compounding, right? We invest and, you know, your returns compound over time.

But the reality is, is that the money supply is also acting in a similar fashion. And what's even crazier here is that it doesn't even include the money in the euro dollar system. And the euro dollar system, just to make it simple, essentially US dollars that are in circulation outside of the US. And that's a quite massive, you know, it's quite massive as well. and that's a quite massive, you know, it's quite massive as well. So just to give people a sense here and join TCI listeners, they'll actually be able to see in terms of the growth of the money supply over time. And clearly, you know, this cannot go on forever. I don't think I'm breaking that for everyone.

Until when can it go on? Who knows? But it's definitely something to consider. And you added another one here, Brayden? Yeah, that's the one from the Bank of Canada of the money supply. Yeah, the five-year trend is from the mid-2 trillions to high-3 trillions. And that's only five years, right? If you go back further and further, you'll see a similar story.

years, right? If you go back further and further, you see a similar story. I'm just pulling out this number because I have been vocal about this. I've been critical about this. I think Canada is a post-COVID loser when it comes to economic status and growth trajectory forward, real economic growth, not job numbers hidden behind public sector job growth. So I just wanted to include that here as well. But yeah, I'm with you. I mean, everything you said so far, it's like, it definitely is nerve wracking to anyone who looks at this data. It's a stress-inducing graph to look at right and he's like how long can it i don't i don't know the answer to that no one knows yeah i i guess the counterpoint to that is you and i differ on gold quite a bit and we can talk about that more i think you're about to kind of get to that next yeah we're aligned we're aligned on Of course, you've owned it for a lot longer than me.

You know what that means? You've made way more money than me on Bitcoin. That's an easy way to say, a nicer way to say you've dominated me returns-wise with that perspective. But you and I are not on the same page on gold. And that's totally okay. I just think that it's a bad form of money. And I think we're more aligned on the digital version of it, but I'll leave it there.

Yeah. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission free so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team

with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money.

Visit questrade.com for details. That is questrade.com. So not so long ago, self-directed investors caught wind of the power of low-cost index investing. Once just a secret for the personal finance gurus is now common knowledge for Canadians. And we are better for it. When BMO ETFs reached out to work with the podcast, I honestly was not prepared for what I was about to see because the lineup of ETFs has everything I was looking for. Low fees, an incredibly robust

suite, and truly something for every investor. And here we are with this iconic Canadian brand in the asset management world, while folks online are regularly discussing and buying ETF tickers from asset managers in the US. Let's just look at ZEQT, for example, the BMO All Equity ETF. One single ETF, you get globally diversified equities. So easy way for Canadians to get global stock exposure with one ticker. Keeps it simple yet incredibly low cost and effective. Very impressed with what BMO has built in their ETF business. And if you are an index investor and haven't checked out their listings, I highly recommend it. I bet you'll be as pleasantly surprised as I was that BMO, the Canadian bank, is delivering these amazing ETF products. Please check out the link in the description of today's episode for full disclaimers and more information.

This is just to provide a bit of context here. So I'll get to gold and silver. So essentially gold and silver have been used throughout history as a form of money in terms of industrial application like Brent was referring to. I would push back on that. That's more true for silver than gold because under research I've done around 50% of the silver produced is used for industrial purposes. While 10% of the gold produced is used for industrial purposes. purposes while 10% of the gold produced is used for industrial purposes. So gold primarily is definitely either a kind of jewelry slash fashion slash money. And gold has a higher money premium than silver. And a money premium is just a prize that is put on an asset because it can be used as a form of money. And then if we go to the question, so why do you own Bitcoin and not gold?

I mean, I do own both, but and I don't think it's an either or and that's the reason for it. And there's a lot of people out there that are, you know, I am Braden, I'm sure you know this, like either gold bugs that are all in on gold, or you have Bitcoiners that only own Bitcoin. And, you know, I'll be very, very blunt. I think that's a mistake. I think it's a mistake to be all in on one kind of asset because of one simple question. What if you're wrong? And, you know, at the end of the day, I know I can be wrong about certain things, about certain investment, about other things in my life. Right. And to me, that's why I like to diversify in different kind of assets. And gold has a lot going for it. It has history on its side. I mean, it's been used as a

form of money for thousands of years. Gold is one of the most innate elements of the periodic table. That means, you know, it doesn't really, it's very stable and it does not corrode or tarnish over time. And that's one of the primary reasons why people like it as a form of money. But it also has a great balance between rarity, availability, and difficulty to produce. And people may kind of push back and say, well, as technology gets better, it'll be easier. Well, the issue is, is the easiest gold to produce has already been produced. Now, the gold that needs to be produced is harder to produce than previous times. So the technological advancements are being

offset by that. And the addition in supply every year has been incredibly stable in terms of between one and two percent every year. And it's a hard asset for central banks to hold, especially when the reserve currency can be confiscated, you know, exhibit a, you know, Russia with the US dollar, putting sanctions on Russia. I mean, whatever your thoughts are, I mean, it is serving notice to other countries that may not be on the best terms with the US or that maybe now but in the future, they're, you know, maybe they will come to a disagreement and they might be afraid of getting those assets frozen. So they compensate with getting more gold reserves. And it's not an all or nothing, and it's just on the hedges for now. But you have countries like China that have been buying more and more gold in their reserves.

So that's kind of the base case, I would say, for gold. But the biggest issue with gold is definitely portability and purity. So say you have one ounce coin. Well, that's worth currently in excess of $3,000 Canadian. So if you buy something that's $500 Canadian with it, you better hope that the person's store you're buying it from has smaller denominated gold available to give you your change. But the smaller the denomination, the more of a premium there is on the value of gold. And then there's always a question mark about purity. I mean, you can get tested, but that takes time, costs money. And that's why

it's important to buy it from a trusted source but that's probably like costco downfall yeah like costco exactly that's it have you bought a gold bar from costco yet or what apparently they were hard to get yeah uh no they're not that hard i mean they just uh they kind of sold out like they end up selling out pretty quickly if the price goes up and they have it priced lower. And then they reprice it higher and then there's availability. So what I did is basically I got it from Costco and then I put it in our saved deposit box with our bank. So that's kind of the way I went. Nice. That's cool.

I mean, gold bars are pretty – I mean, I'm not a gold bug. I know many people are, and I get it. Like, I'm with you. I understand the thesis. I understand all of that. I just don't see it playing out the way that the gold bugs think that it will. For the reasons that you've mentioned, I mean, portability, purity, it's just a really bad currency in 2024. And it's not to say they don't look cool. I want a gold bar. I actually,

I want one in my storage deposit box. I'm jealous. I want some. But don't hear what I'm not saying. I get it. I just don't see how it can be a very valuable currency. I've been out for a long time. I've been out on the story for a long, long time. And I think gold is more, the way I see that, is more of a way to kind of, it's not necessarily to see it as like an investment per se. It's more something where you, I would say it's more of a store value, you know, longer term.

It can be volatile on a shorter term basis. And I think that's how the proper way to view it. Because if you want to have maximum returns, that's probably not the best investment. You know, spoiler alert, that's probably not right there. But, you know, in terms of the historical foundation, I think that's where, you know, gold has a lot to stand on. But again, I mean, I'll just give an example. And, you know, I'll say that right away as kind of the biggest advantage for Bitcoin is that in my view, it is its portability, which I think it's second to none. I mean, you don't believe me. You want to take an airplane with a decent amount of gold. Good luck with that. I mean, they're going to be asking a lot of

questions if they do let you go on the plane, right, depending on the amount of gold you have. If you don't believe me, if you want to plan a trip to Vegas and you want to bring, you know, $15,000, $20,000 to play some World Series of Poker tournaments, you know, good luck getting through customs with that amount of money you will be asked a whole lot of questions and i'll have to declare with bitcoin though you can just go to another country and bring as much as you want that's because it's all you need is your seed phrase to be able to access it and i think it's the best solution of them all in terms of capital controls because ultimately governments cannot do anything about it they can make it difficult for you to withdraw the money and use it in the system that's in

place in their jurisdiction. But they can't do anything if you go somewhere else, especially if they don't have any treaties in place. And obviously, Bitcoin has a lot of gold like properties, but in the biggest issue, it doesn't have the same track record. But I think it's important to mention that you can have more than one form of money at a time, which can be used for different purposes. I mean, for example, long term servings versus spending. I mean, we've had, you know, in the past, there's been, you know, gold when we had gold back fiat or gold back money, essentially, people could have gold but use the paper money for everyday transaction and keep gold for more the longer term savings. And traditionally, if you look at history of money, that's usually the case.

There's always going to be like two or maybe more at the same time where there's going to be different usage for each form of money. Capital controls, for those who are not sure, they're simply measures that are placed by governments or central banks to restrict the flow of capital in and out of the country, can be imposed in a variety of ways and can affect both citizens and foreigners. In Canada, we've been relatively lucky for that, but in recent budgets, I mean, there are certain things that I think would qualify as capital controls, you know, depending like an easy example is preventing foreigners to buy properties in Canada or putting restrictions on that. So that is a form of capital

control, whether you think that's a good thing or not. It is a capital control, but they can take other forms right to the extreme. It could be a government that prevents people from leaving the country with a certain amount of money, anything in excess of that, and you would not be able to. So it's just something I am keeping in mind. I don't want to have a tinfoil hat on, but, you know, history has shown that governments can go to these measures if they're trying to keep investment in. Can you hear that? Do you hear that sound? No. That's the sound of my tinfoil hat crinkling up a little higher and higher.

The mics we use are so good, you can't even hear it. Block that out. But you can hear a crinkle in this room. No, I get it. I think a lot of people's tinfo crinkle in this room no i i get it i mean my i think i think a lot of people's tinfoil hat in this country has grown significantly uh you know for the last four or five years no matter what your stance is and so i i'm with you so okay so how do we round this out like yeah you own you own both uh for the reasons you've mentioned. The FBI is going to knock on your

door in the next 24 hours, by the way. You own both. You have this thesis. What can people do? I mean, I own Bitcoin. You own Bitcoin. What do you say to the people? What do you say to me? This is an easy way for me to ask this question because I don't know as much as you about this topic. Why does Bitcoin move so much on the NASDAQ? Why is there so much correlation to what I'll call growthy equity assets? Why have we not seen a breakaway in terms of correlation between those and a correlation between inflation prints. What do you say to that argument and to me asking about that? Yeah. I mean, I think at the end of the day, it's probably because it's still nascent when you look in the grand scheme of things. I mean, Bitcoin has been around for about like 16 years, I think, at this point. So, I mean, it's still a nascent technology, although it has some pretty significant network effects at this time. It's still even compared to gold, right? It's about a 10 to 1

in terms of size, gold versus Bitcoin. So it's still relatively small. And gold is just a small pawn in the grander or the bigger financial system. So people might think, you know, $10 trillion, which is typically, you know, give or take a few trillion what gold is in terms of market cap. And Bitcoin is about, you know, a trillion, trillion and a half, maybe a bit more now in terms of market cap. So it's just still a small pawn, I would say, in all of that. And it can still move quite a bit just because the sheer size of it. And I know these are big numbers, but you know, when you're thinking about hundreds of trillions of dollars in terms of debt in the system, you know, a trillion or two is just, you know, it's like chunk change.

So I think that's one of the bigger reasons for its volatility is just because it's so small. I mean, it's just, you know, it's, I don't have the market cap right now, but I think it's smaller than NVIDIA, right? In terms of our market cap? Yeah. I think for sure, yeah. To put things in perspective. So I think that's the way to see it. I mean, for, you know, I'm a big proponent.

I think you've known me long enough and I've changed my stance a little bit. But I think for me, it's just being able to diversify, you know, not only stocks, but also in other assets. I think by doing that and just owning a percentage of your portfolio that you're comfortable with, because you mentioned that Bitcoin will be volatile. Gold has some volatility as well. So does silver, if that's something you're interested in. Obviously, stocks can be quite volatile as well, although I don't know. If you look back at the last year, it feels like it's always always number go up as well for stocks, at least for the main index. But in terms of value, I mean, at the end of the day, value is whatever the market is willing to give to an asset, right?

A ledger like Bitcoin that is censorship resistant, decentralized, and already has a substantial network effect in my view and in a lot of people's view as a lot of value tied to it. I know it's a bit different than what we're used to, but I mean, to me, it has more value than the graphic I just showed for a joint TCI listeners that shows the money supply where, you know, central bankers can just increase that money supply basically at will. And a few and a few people decide how it grows, where even though it's a young technology for bitcoin i mean the protocol you know there's a certain cap it will not go beyond 21 million are there some risk of course there's some risk with bitcoin and it's my own

viewpoint but i trust the protocol way more than i do central bankers because central bankers are reactionary you You know, we saw what Tiff McClim said, you know, these rates are going to be low for a very long time. And just what a year, year and a half after we saw the fastest interest rate rise in pretty much history if I in terms of the speed that it got up from. So I think it's just something to keep in mind here. And like I said, Bitcoin, is it 100% certain? Of course, it's not. I don't know exactly what could go wrong, but it doesn't mean that nothing could go wrong. And I think that's where it comes down to being

diversified. That's why I own multiple asset types, including stocks. I mean, the majority of my investment are in stocks, short-term treasury bills, Bitcoin and gold. And the modern day Ray Dalio, Simone, there you go. The all-weather. The all-weather portfolio. That's the way I try to see it. Will it work out? We'll have to see, but I'm pretty comfortable with that. Yeah. Very cool. Well, I appreciate the perspective, right? It makes sense. Simone, we're at 40 minutes into the show here. EQ Bank's been a long-term sponsor of this show and we appreciate the heck out of them. They've been wonderful partners. We love the product quite a bit. And you know how last

episode I go, hey, hit me up about the business bank account. Hit me up. They emailed you or texted. What did they send you? They emailed me. Yeah, they emailed me. Sorry, I was coughing up a lot. Coughing up a lot.

That mute button does wonders. They forward you an email and say, hey, by the way, tell Brandon to sign up for the wait list on the business banking. And apparently it's very close to launch. So I did that. And if you are a small business owner- It's launching soon. I don't know how soon. So I don't wanna, they did not confirm.

I'm putting the pressure on you, QBank. Putting the pressure on. No, I think it's gonna be fantastic. I'm gonna be a customer for sure. So I have two call to actions. If you run beautiful small businesses in Canada or, or large businesses or medium businesses, uh, one go sign up for the wait list at eqbank.ca forward slash business for business banking. I think it's going to be awesome.

And two, if you've been listening to the show for a while, maybe you're a listener to this pod, you understand the vibes, you understand the content, you understand the host, you understand the demographic, which is just the best Canadians on earth, obviously listening to the podcast. Maybe you want to sponsor the show and you can get in touch with us on our website anytime if you ever want to sponsor the show. We're pretty full right now, but we can get you in this year. So two call to actions. If you're on a small business in Canada, go sign up for a wait list at ecubank.ca forward slash business. And then also if you want to sponsor the show, you'll get one of us to endorse your product and we can work together. Anything else, Simon? Anything else on your mind? I know just I need some cough medicine, but aside from that that's uh yeah rack these days i

mean we all whatever's coming through yeah you'll see if you have kids one day uh you're you're gonna you know the uh the daycare viruses it's not a myth it's it's definitely true well between you and my sister who has two young ones running around, very similar age of your first one there. I get all the stories now, and I'm looking forward to it, you know? Personally, I am looking forward to it. As you cough out another lung. I got a couple years here, though. Yeah, I think you're – no pressure, no pressure.

I hope she's not listening to the podcast. Ear muffs, ear muffs over there. Thanks for listening to the show. We really appreciate you. And, you know, again, if you run a small business, ecobank.ca forward slash business

or write us to the show on, if you want to sponsor the show. We appreciate the heck out of you. We are here Mondays and Thursdays. I'm with Simone Mondays and Dan and Simone talk earnings, news, lots going on, the madness of the stock market casino day to day, but also the long-term things that really move the needle when it comes to earnings and things that we care about and some pattern recognition for you to take notes on. That is on Thursdays. As well as we have the real estate show. The real

estate show is the Canadian Real Estate Investor hosted by two handsome devils, Nick Hill and Dan Foch. That is the Canadian Real Estate Investor on your podcast player. Peace out. The Canadian Investor Podcast should not be construed as investment or financial advice. The host and guests featured may own securities or assets discussed on this podcast. Always do your own due diligence or consult with a financial professional before making any financial or investment decisions.