The Compound and Friends - Life, Liberty, and the Pursuit of Tokens

Episode Date: November 19, 2021

On this week's episode of The Compound & Friends, Michael Batnick, Jim O'Shaughnessy, Phil Huber, and Downtown Josh Brown discuss: selling a business, tail risks, tech innovations and politics, FinTechs buying media companies, financial influencers, investing in collectibles, Phil's new book The Allocator's Edge, and more! Invest in fine art with Masterworks. The Compound & Friends subscribers can skip the waitlist with this link: masterworks.io/compound. See important information: mw-art.co/x Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

Phil, this is beautiful. Thank you. Pleasure. I spoke to Patrick yesterday, and I said, I'm going to have you call during the podcast. Oh, good. To break your dad's balls. And he goes, as much as I would love to do that,

I'm not going to delay a flight. But I'm headed to it. Where is he going? St. Bart's. St. Bart's. Oh, man. Everyone's going places. I would have liked that.

So I spoke to him. He's going to invest like the best from Future Proof. Oh, cool. So he's going to pick a guest who's like from Southern California. Good. Yeah. LeBron James. He'll do like a live interview on stage.

We're going to film it. It's going to be cool. Fantastic. Yeah. That's great. Phil, how was the flight? Flight was good. Yeah. I came in last night, how was the flight? Flight was good, yeah. Came in last night and went out with some friends.

So how do you like our weather versus Chicago, huh? Like 30-degree difference. It's crazy. My daughter's in Chicago, so. Yeah. Why is it like this? Why is it so warm? Oh, don't ask that question.

I know, but. Because that means tomorrow it's going to be. Can we talk about the weather for an hour and a half? I think that'd be a great episode. No, we got. Listen, we got a lot to get to today. Actually, I'm actually I'm more worried about running out of time. All right.

So John's going to. How are we doing on? How are we doing on set up? We're almost good. OK. Am I too loud in the mix? Josh. Come on.

I'm just kidding. In general or just making sure? How am I? I'm like. Okay. All right, so guys, the most important thing is talking to the mic. Even if you're talking to Jim and he's next to you, if you turn your face, we're not going to pick it up. Right.

So always into the mic. Is this good right here? Phil, did you watch a movie on the airplane? I like this. No, I read on the airplane. Okay. What are you reading? I print off a stack of articles that I never would otherwise get to and just try to crank through them.

Old school. Yeah. Very old school. Killing a lot of trees. I love airplanes. I'm old enough to be your father and I don't do that anymore. You know, movies on airplanes are like 20 to 30% better. Because they have your undivided attention.

It's true, but it's not a long enough flight to get through a whole movie usually. So the first time we went to Australia, I had a friend who went back and forth a lot and he warned me. He goes, just telling you, man. He goes, on the first time I went to Australia, I got drunk twice and watched five movies. In one flight? Yeah. Drunk twice is good.

Jim, is your friend actually you? Yeah. Yes, all my friends are imaginary, Michael. All right. We ready to go? Who do I hear? It's loud. Who is that? Is that Kevin?

No, it's Nicky. Majuli? That's loud. Who is that? Is that Kevin? No, it's Nikki. Majuli? I was hyped about the Dow. What happened? Did the market? No, the Dow. The DAO. The Constitution.

The Constitution. Okay. We should buy the White House. Who's down? I'd be up for it. I'll buy the White House. Welcome to The Compound and Friends. All opinions expressed by me, Michael Batnick, and our castmates are solely our own opinions

and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast. All right, Duncan, it's official. Jerome Powell murdered the dollar,

my sweet, sweet fiat. No, only kidding. I'm super long USD, but the CPI index, it skyrocketed. Let's be honest, 6.2% last month, a new 30-year high. That $100,000 you're holding can quickly turn to $94,000 real fast if you don't act. To protect your purchasing power, you can go buy gold, which underperformed bonds over the last 12 months.

That's unbelievable. Gold underperformed bonds. Or, or, excuse me, or you could listen to Larry Fink, who called this alternative asset class the greatest store of wealth today. That's art, Duncan. When inflation is above 3%, which it is right now, contemporary art averages a real return of 23%. That's more than four times what you'd get with hedges like gold and real estate. And the Wall Street Journal declared this week that art is among the hottest markets on earth. Luckily, you don't need tens of millions of dollars to invest in art anymore. With Masterworks,

the $1 billion fintech unicorn, you can invest in iconic works by artists like Picasso, Warhol, and Banksy at a fraction of the price. More than 250,000 investors have signed up and demand is higher than ever. If you want to join me on Masterworks and hedge like the best, then go to masterworks.io slash compound for priority access. That's masterworks.io slash compound. See important disclosures at masterworks.io slash disclaimer. When does this Dow stuff cross over from becoming like actually dangerous? When they raise the money to buy something that like a mob should not be in charge of? Too late. Too late.

We're going to go there though, right? Sure. So they're trying to raise 20 for the Constitution. It's already over 40. That's cheap. That's a good value. But they don't get to own the Constitution. What do you mean?

What are they fucking buying? They're buying the last private copy of the actual constitution, which was in private hands. Right. But the original one that sits on display is not going anywhere. Nick Cage has that. Right. That's already been taken. Yeah.

He got the declaration and he thought, fuck it. I found the guy who's not buying the constitution. Right. Yeah. No, thanks. And I also don't like teaming up with strangers or being part of mobs. And here's another one. You know, the original opening line to the Declaration of Independence was.

Four score. No. Life, liberty, and the pursuit of. Property. Oh, not happiness. Madison was like much more pragmatic than Jefferson. It's always Madison. Let's say happiness, okay?

Yeah, because we want to guarantee everybody property. Property, exactly. Certainly can't do that. Life, liberty, and non-fungible tokens. And non-fungible tokens. The pursuit of tokens. I'm feeling you on that. Is that the episode name?

That'd be good. I like it. Good job, Phil. All right. So let's get started. This is a very special show. This is the Thanksgiving show. I don't know if you guys knew that.

Well, this is going to air at the end of this week, but we're not going to do a show next week. So Compound and Friends fans are going to have this to maybe listen to twice. I feel very, very honored. Is there any turkey? There's no turkey today, no. Typical. Typical Josh.

I should have done this a little bit more festively. We did a Halloween show. I flew all this way. Come on. I saw the Halloween show. I liked that a lot, even though I haven't watched the series just because I couldn't bring myself to.

But you know what the costumes are from. Absolutely. Yeah, yeah. That was Dan. I know, I know. I'm an investor in Dan's anchor list. Oh, are you? from. Absolutely. Yeah, yeah. That was Dan. I know. I know. I'm an investor in Dan's anchor list. Oh, are you? Yeah.

Okay. Yeah. We love Dan. All right. So first things first, this is a very special show for a second reason, which is that, and Phil, please, no offense. We're going to get to you in a second. But you, not only are you a legend in the industry, but you did something 10 years ago, not in this office, two offices ago.

I remember. You came in, met with Barry. I was like a huge fan of your book, What Works on Wall Street. I probably read the first edition. When did it come out? The first one, 96. 1776. So I'm short.

1776. 1776. Yeah. So I probably read a first edition of that book, and I knew nothing at all about76. Yeah. So I probably read a first edition of that book and I knew nothing at all about anything. Yeah. And it's probably one of the formative books that I've read. Just like, hey, this all seems crazy, but there's actually some underlying method to this.

Yeah. Was a really great message to hear. Not that I followed anything that you said to do. Of course not. In my early years. But anyway, you came in, you signed my book for me. Yeah. And I think you're probably like one of the first heavy hitters on Wall Street that I had ever like had a real conversation with.

Cool. So like I had met a lot of people like high by, but you spoke to me as though like I were somebody that was worth your time speaking to. And it just, it meant a lot to me. And we were able to get to know you better, work with your son and work with your company and invest with you guys. So it's, but it was a really special moment for me and I still remember it.

I'm glad you do too. So I'm so happy you're here. And Phil Huber, you are also a pretty good guy. I'm no Jim O'Shaughnessy, but I try. Well, I know that you guys know each other and I was so glad we could do the show, all four of us together. And you have a book out.

And you sold your business. And Jim just sold his business. So the first thing I want to talk about before we get to your book is what is it like, not that you're working for anyone, but you're technically kind of working for somebody? Yeah, no, absolutely. All right. So let's start with you. Yeah, no, absolutely. All right.

So let's start with you. What is it like going from an entrepreneurial situation to, I don't want to say having a boss, but like now there's a layer above you that you're kind of reporting to and letting them know what's going on? Yeah, I mean, I think what's interesting is I wasn't the entrepreneur that started Huber Financial. That was my dad. But I spent the vast majority of my career there. So I felt very much involved in the growth and development of the business, but no. You guys are a wealth management firm based primarily originally out of Illinois. Yeah. Primarily in Illinois. But now you're a much bigger organization. Yeah. We're growing our footprint. We have, I think around 20 office locations in seven States now. We've had a few acquisitions this year. What's called Savant?

Yeah. Savant Wealth Management is our firm. I'm the CIO for the company. And yeah, we're predominantly Midwest based, but we've got locations out west a little bit, McLean, Virginia. So we're kind of scattered all over, but predominantly in the Midwest. You guys are doing deals. You guys are buying. Yeah, we're doing deals. We've done, we've just announced our third acquisition of the year, a group out of Madison, Wisconsin called Phil Brandt Wealth Management. They specialize in university professors. That's kind of their niche. We had two other acquisitions earlier this year, one in Indiana, one in Michigan. And then we actually ourselves took some private equity

money this year, a strategic minority investor. You got to get that out and then you got, right? Everyone's got to like slowly be bought out. That's the idea. Yeah, no, I mean, obviously you guys see the activity on a day-to-day basis. Every single day. Citywide. I haven't checked to see who's seeing the skybox. Michael is wasting private equity money to buy me out.

Every single day. That's why you keep calling. Yeah, yeah, okay. Got to get this guy out of here. All right, we got to talk about your incredible deal. You've built this phenomenal asset management firm, and then Patrick came along, a phenom. He added to that this whole thing with content and this whole way of reaching allocators, advisors. I mean, did an unbelievable job with it.

I mean, did an unbelievable job with it. And then you guys are basically in this situation where you are pioneering into a new way to allocate with Canvas. Yeah. And it's an overnight sensation. And then tell us what happens from there. So step back. Something I've always wanted to do. I founded a company called Netfolio in 1999,

which was going to do this. The difference is this time the technology actually works. Trading costs are zero. Trading costs are zero. But you can't minimize, we have been building this technology for ourselves for more than 10 years. I was dissatisfied with every off-the-shelf solution we had. And so I said to my tech guys, I want it all replaced. Yeah. And so that took about 10 years. And we're not talking about trivial things. So, for example, you guys, one of our clients, one of our great clients, thank you,

you guys gave us feedback and we took you seriously. And, you know, that's because both Patrick and I believe you push the solution or the thing you want to work on to the people who are actually using it. Yes. Right? Because what do we know? We're asset managers. We don't really often meet with the end client. You guys, that's where you guys are the absolute geniuses. So we had the base technology, which led Pat, the famous story, of course, Patrick walked into my office and goes, dad. And I'm like, yeah. And he goes, remember Netfolio? And I'm like, office and and goes uh dad and i'm like yeah and he goes remember netfolio and i'm like yeah um and he goes well um we have built all this technology and and the fact is we built the death star to kill a mouse and i cut my eyes wide and i'm like you want to and then he stopped me

and he goes we are going to AWS this bitch. And the rest was kind of history. I honestly and truly believe and have for a very long time that customized portfolios are the future. It's going to be its own category. You know what's funny about that? They were the past. of the future. It's going to be its own category. You know what's funny about that? They were the past. You're so perceptive because there's a book by Peter Drucker, which I recommend everyone, Adventures of a Bystander. And one of the chapters is when he worked for a merchant bank in London in the 30s, right? The thing that I found really interesting about it was that's exactly how they

managed money. It was to the family, to their specifications. Everyone was different. And, you know, I instantly got that book out again. And I'm like, you know what? This is something that only the super, super rich could afford long, long ago. And you can see the direction that this is going. Yeah, because what ends up happening is like all the Wall Street firms start getting bought by banks and they start scaling, getting bigger. And what always happens is they just look like, where can we cut costs?

Oh, here's a good place. Why are we doing custom bespoke portfolios for people with a million dollars? Why would we do that? That's stupid. Let's put them in lifecycle fund. But it's similar to TV. It's like, so everything gets bundled and then the unbundling is inevitable.

And now we have 18 apps that we're watching shows on versus one cable subscription, but probably paying roughly the same thing. So you guys are basically unpackaging something that used to exist and then got packaged. So now a financial advisor can custom tailor a portfolio to a client. You guys built Canvas, which is the engine that allows that to happen. Are you guys doing custom?

Yeah, we use Canvas too. We were one of the initial partner firms just like you guys, and it's been a phenomenal. I think we signed the day before you though. I don't know about that. But no, it's been wonderful to work with that. I think that's right. I'm going to ask Claudette.

All right. So you built this amazing thing and it looked like you got a really nice head start. And now what? So, you know, honestly, all joking aside. You wanted the plane. When Patrick and I were talking about it, we both realized that the set of companies that we would be willing to sell ourselves to was tiny. Because he's going to – because Patrick is going to live with the consequences of that. Right, exactly. And you are too but to a lesser extent.

Right, yeah, exactly. And so when we got first approached by Franklin Templeton, it turns out there was one guy there who was very clear visioned about the way the world is working. Roger? Roger, yeah. We saw time. Okay, so he had built Morgan Stanley's entire separately managed account platform. He knew how to do things, et cetera. But, you know, after our first Zoom call, Patrick and I chatted about it. And what I said was, listen, what I'm still kind of not believing is that we just talked to one of the biggest

asset managers in the world with a trillion and a half dollars in assets under management. This is Franklin Tableton. Yeah. And they have the vision to come forward with something that is clearly a risk. It's not a standard, right? And that kind of mentality is a very rare thing in a large company. And that's why large companies die. Because why? Because all he has to do really is just keep things status quo and he keeps his job for the most part he introduces something like this and it doesn't

work or whatever cost overruns or delays and then he's at risk exactly so okay so i totally got you know so roger was the guy who got it but i going to give props to their entire senior team. Talk to them all. Let's do that. Congrats to the senior team. We got sound effects. Where's my horn? No, you don't get a horn. Groucho Marx.

Anyway, we finally met, and this is what's kind of weird, right? We got the deal all done over Zoom. It's amazing. Do you ever think in a million years you would sell the business you spent a lifetime building over a Zoom call? Well, there was no Zoom like three years ago.

Right, yeah. But we met for the first time a week and a half ago and the chemistry was fantastic. That's great. You know, these are really... So can I tell you something? I think they should

take the Ben Franklin avatar from the logo and put you in there with like a giant smile what do you think about that no well now they have this

alright so now they have this cutting edge technology and maybe they should like judge the brand a little bit like the parent company like let's

let's be like tech first now. Yeah. The kids aren't into Ben Franklin. No. They need like a Kardashian or something. Right, right. You know, that's true. And in addition to that, he's in black and white, right?

So give him some shades. You know, make him a non-fungible token. Give him a board ape. Remember the Simpsons episode with Poochie? Yes. Theie? Yes. The dog? Yeah. I forget what they need him for, but he shows up with a skateboard.

Yeah. Homer does the voice for him. All right. So they need a skateboarding dog. Any truth to the rumor that potentially Patrick could be potentially in the plans long term as like senior, senior leadership? So still too early of course yeah um listen they they patrick is a phenomenon and agreed and and he uh if they use him right he will

move mountains for him and he will be able to help them become the absolute leader in that category. Selfishly, though, I almost don't want that because then how's he doing all these podcasts? Well, so, you know, one of the things. And I listen to like probably one out of every three. Yeah. Because it's hard to keep up. It is. But every single one I listen to, I share it with people immediately.

Same with me. It's always so good. Same with me. Sorry, let me cut in. Our fates are intertwined a little bit. What's happened to your voice? Dude, don't ask. I just did. Don't worry about it. little bit. What's happened to your voice? Dude, don't ask. I just did. Don't worry about it.

What's wrong with his voice? I'm trying something new. Okay. Wait a minute. We got Elizabeth Holmes going on over here? This is Michael Beckett. I would not have a sore throat because of a podcast without Patrick's nudge. Patrick told me to start a podcast in

2017, and I took his advice and that was game. You have podcast throat game. I podcast. But my, my, Sean is the origin story. And I wrote about this a few weeks ago, was in 2012 at one of Barry's big picture conferences.

And across the board, everybody there scared the shit out of me. And there were a few British gentlemen who were telling like stories about Roman times and whatever. And I was like, holy shit, I need to sell everything and go short everything. And you were the only person on stage telling, I don't know if you're telling people to buy. I remember that. Do you remember that? I do. But you were saying, you were saying stocks, I don't know if you said they've

never been this cheap, but you said stocks are cheap and you went on for an hour and you didn't win my, I went with the bears over you like an idiot, but that was my, that was my introduction to you. That's very cool. So I almost never forecast because what the fuck do I know, right? Well, you know a lot. Okay, fair enough. But my point is most forecasts are bullshit, and people make them because people want them. Let's be honest.

Yeah. people want them. Let's be honest. And I've written maybe four in my entire life. And I only write them when the numbers are screaming at me. Hey, idiot. 99. I wrote the internet contrarian, but remember human OS, just like everyone else. So after writing a really bearish thing called the internet contrarian. You bought Amazon. You bought more. No, I started an internet company, Netfolio. Well, if you can't beat them, join them. Exactly, exactly.

But so the numbers were screaming. And so I published a piece in March of 2009 called A Generational Buying Opportunity. Damn, good timing. It's still kicking around on the web. Wait, that, that was the timing on that.

Yeah. Holy shit. So you have two posts that aged like a fine wine. Well, hopefully more, but yeah, they worked out. Well,

most people have zero. Well, again, like, so what, what people have a hard time understanding is I'm just listening to the numbers, right?

So, so what we did was I said, okay, the 10 years ending February 09 are the second worst 10-year period real rate of return, so inflation adjusted for the S&P 500 or its proxy, which most people don't know the S&P 500 has not been around in that form for a very long time period. But anyway, going back to 1900, okay? Second worst. First was May of 1920. And, you know, I think they had some kind of flu thing going around.

Just a world war that they had to close the market for. Yeah, and a world war. Right. And then that whole Spanish flu thing. Anyway, so I said to the guys, okay, show me the 50 worst and then show me what happens one, three, seven, 10 years later. Yeah. When you get to three years, new negative numbers. Yeah. And some of that data really predates the Fed having the influence that it does today. And in 09, they were basically telling us the same thing that they told us last year,

which is that we ain't going to stop. Yeah. They said it many times. Yeah. No, I know. And, you know, so it was kind of like you really don't get this kind of market very often. Right. And so I poured – I mean I followed my own advice.

I liquidated more – I guess I would say slightly less risky assets than equities. You stopped reinvesting your dividends. Savage. All right, let's start. Jim, you're talking about forecaster bullshit, and of course I are. Let's start with chart number 22. What we're looking at is the global fund manager survey of the biggest tail risk. And if we look at this chart, which Big John will throw up in a second, it's got going back to 2011, what people consider to be fund managers from Bank of America,

what fund managers consider to be the biggest risks. So for the people that are just listening and not watching, they go back to 2011. It starts with EU sovereign debt funding. And that looks like it went on for like three years where that was considered the biggest risk consistently. And then US fiscal cliff, I don't know if anybody remembers that, it was kind of a blip, but we had a debt ceiling fight. Then it went into China.

China hard landing. China hard landing, I remember specifically. I do repeats on there. Which one? China hard landing? It's like every two years, right? That's like a greatest hits. Geopolitical crisis.

What was that about? 2015? Russia invaded Ukraine? No, 2015 would have been probably Greece saying, you know all that

money you loaned us? We don't have it. We can't pay you back. Another China hard landing. How did the

second one hit for you? I prefer the original. You've had a better hard landing. Quantitative tightening.

So this is Jerome Powell quote unquote going too far and the trade war happening at the same time and actually look inside look to the left all of these are labeled Chinese credit tightening who the fuck was worried about that

well obviously the analysts at Bank of America you could always find these headlines have you ever met one of those guys they're America were worried. You could always find these headlines. Have you ever met one of those guys? No. They're very shaky in general. You could always find people worried about this stuff. The best is coronavirus is a good example.

Look when that starts. It starts after it already happened. Of course. No one was talking about it as a tail risk. It started in May. You're right. That's another one of my precepts, right? Story follows price.

Every time. Not the other way around. Look how they say, instead of writing Trump, they say political populism for 2016 and 17. It was all trade war in 2019. But the point is, right now, the point is right now, it's inflation slash bond tantrum. And if you go on down the list, were any of these things a reason to sell? Did the S&P go up or down over that full-time frame? Yeah, right, exactly. Yeah, so inflation since this chart started, the NASDAQ is up 1,000, 1,500%, 25% a year compound. Right. It's amazing.

It's never anything that we're worried about. Yeah, yeah, yeah, yeah. But see, the thing is, in that piece that I told you about, the generational buying opportunity, I'm like, I will never short the United States of America, right? I know, Animal House. And we will not sit here and listen to you bad mouth this country. But the point is, it's true. Like, so yeah, we're going through a bunch of shitty things with people. What else is new?

Exactly. We always should. Can you short the Constitution now that Michael owns it? Don't you dare as somebody who was around for this because i read books phil michael we read books but you were around for this the shitty things that we're going through yeah i understand that we're always kind of going through shitty things but like it really feels like the stock market is completely divorced from like all of the the shitty stuff that's going on societally in a way that in the in the 70s it was not immune to watergate we just had two f***ing impeachments yeah of the same guy the stock market rallied

yeah so why do i feel like it's so different i mean i know it was if like if you look at the bear market of the 70s it was like a double dip yeah it was so different i mean i know it was if like if you look at the bear market of the 70s it was like a double dip yeah it was so disgusting yeah and i know that wasn't caused by watergate but you can clearly see that uh nixon being impeached and then resigning like did make things worse for stocks it was a big deal okay so do stocks no longer give a shit about anything that takes place at that level of politics? Is it just a show? That's funny. I was just talking about this earlier today. I'm doing a series called The Great Reshuffle. We are living through a really fascinating period in history when all of the old

institutions are essentially- This is on the podcast, right? Yeah. All right. So let's plug that real quick. Jim's podcast, infinite loops, which I was a guest on when we were selling our book. It was a lot of fun. Yep. All right. He was too. I have not been a guest on there yet. There you go. Let's see how you do today. Yeah. This is my trial for you. But, but the point is, so the great reshuffle, which means that we are living through an era, which similar eras have happened in the past, but not to the degree with the technology that we have, right? So with the technology right now, time, space, geography all collapsed. They're gone. They don't matter anymore.

Trading 24-7. Trading 24-7. I can hire my guy who works for me, Batsall on the, uh, on the podcast. He's in India, super smart. Twitter was his resume. And, and so what is happening concurrently with that is you are seeing the old gatekeepers like government, like journalists, like, uh, you know, you name it, publishers even, crumbling. And they're crumbling because they're way ahead. We're circles around.

And as a matter of fact, Josh, one of my worries actually, and I'm being very serious about this, is I really don't know how, and let's keep it US centric. I really don't know how our government is going to catch up to where we are, where the private sector is. Can I say that I've been thinking about that too? I spoke with Rep. Patrick McHenry, who is pro-Bitcoin, pro-crypto. And that's kind of the point that he was making is that we're not smart enough to come up with new regulations for things that are going to be invented tomorrow morning in advance. Yep.

So we either like let these people into the building to tell us what's going on or we threaten them. But like one version is better than the other. No doubt. out well but so what do you say to this idea though that the obscene amounts of money being made by technology people and crypto people will ultimately lead to the election of candidates who will be shepherded toward the right solutions and that's going to be the thing that answers your question no way we're so far well they're buying stadiums it's only a matter of time before they're buying sedatives. This group of people, it's such a small group of people. On that note, I used to joke that one of my proposals was that all of the Congress critters should have to be like Formula One and wear the lobbyists who bought them. Yes.

It's incredible. So the Lakers are going to play in crypto.com stadium such a silly sounding that is also a classic top signal and i'm gonna have to they don't exist and blockchains are the new staples so it makes perfect sense yeah yeah you know but anyway so i think what i'm trying to figure out is does elon musk just decide you know what i'm gonna put 10 put 10 senators in that building. And who could possibly go up against me with the capital that I have or is money not going to be enough to do something like that? Bernie Sanders.

So – Chamath is involved in politics. These guys have more money than God. Yeah, yeah. So listen, one of the maxims that usually works out really well is follow the money, man. And he who has the gold makes the rules. So maybe that's the answer. How does politics catch up?

Buy gold. Because the politicians are funded by these new technologies and the creators. Can we also just say, sorry, to go back to this chart, it says biggest tail risk. How is inflation tail risk? Tail risk is like an alien invasion. Is it still a tail risk if everyone's talking about it? How is it alien invasion? Tail risk is like an alien invasion. Is it still a tail risk if everyone's talking about it? How is it alien invasion? No, of course it's not.

That's a tail risk. I do love, though, that your voice has transformed into Funkhauser. It has. It really has. You know what? I wasn't even going to go there, but I'm thinking, I'm seeing Larry David in my head. It's so funny you say that. I thought I sounded like Jeff Garlin, but you're right, I'm funky.

I'm the Funkhauser. You're the Funkman, man. I'm the Funkman. Rest his soul. This is awesome. I thought I sounded like Jeff Garlin, but you're right, I'm funky. I'm the funk man. You're the funk man, man. I'm the funk man. Rest his soul, rest his soul. This is awesome. I should keep this. All right, so the tail risk thing, it's not a tail risk

if you're reading an article about it every day. Right. Is that? No. Okay. So I think people really don't understand that or have trouble with that. So what is the tail risk?

I wrote down mine. I think it's either mortgages or China invading Taiwan. No, I think- That's a pretty good one. Well, or uh china invading taiwan i think i think that's a pretty good one well china china invading taiwan well what let's i mean i'm not like uh i'm not like a geopolitical expert but i'm just thinking from a wall street perspective how critical that part of the world is for all the supply chain we just learned much is yeah so what happens if all of a sudden forget about ships not

being able to get into la how about nothing moving anywhere through the pacific because there's like the potential for a showdown that obviously nobody is rooting for have you heard of the blockchain come on seriously that's to me that this is the what about i'm personally i'm personally worried about illiquidity in the board eight market. You guys are fucking. Wait, I got one. No, seriously. What if. I wanted to answer your question.

Seriously, Josh. Just so you know. I want to hear it. These guys are fist pounding. So listen, I ask this sincerely. What it potentially causes is a very sharp decline that happens very quickly until we build around solutions, right? And some of those solutions are being built right now. We are reshoring some of this manufacturing capability specifically in the chips sector because our economy essentially does not work

without chips. Taiwan Semi is one of the 10 largest market cap stocks in the world, I think, right now. And they should be. I am so bullish on the next decade. The stuff, all of the shit that, like, there is a silver lining to this. All of the business formation that we're seeing in 2021 and 2020, like, the next trillion dollar companies were all founded last year. But that's the idea of tail risk. We're not saying it's the central risk. What we're saying is this is some weird shit at one of the tails. I was saying I'm so bullshit I don't want to talk about tail risk, but fine. Here's

my tail risk event. What if all the smoke around Tether ends up being real and that crashes Bitcoin and that just happens to be the spark that we need to turn sentiment south in the broader markets. Listen, there's a lot of Tinder and there's a lot of matches. Right, exactly.

Without a doubt. Yeah, I. One just needs the light. Yeah. I mean, so the way we look at it, just like I said before, like my time horizon is infinite. I have children and grandchildren and charities I want to give money to. So I learned that from my first client, who was a 73-year-old gold prospector who sold his company to Barrick Gold in Canada. I went to his ranch here in Montana and, or Wyoming, sorry. And it's just super. Is this John Sutton you're talking about? No. And anyway, so I'm, I'm like selling him or I'm showing him the most conservative stuff we've got. And he's like, no, no, no. Show me that small to mid-cap growth,

which was pure momentum, by the way. And I'm like, David, I don't really think that that might be appropriate for you, given the time horizon. He points at the picture on his table of his grandkids and his kids. And he goes, my time horizon's infinite. And ever since he said that to me, it really changed the way I think about things because mine is tuna. And so like, I, I don't really worry too much about tail risk. Look, human operating system I know is going to operate the same way. People are going to fuck up. They're going to sell really near the low. You guys are going to do your absolute best to convince them not to do that. And you will, you will be incredibly convincing,

but it might not be enough depending on how steep or not for everyone. 2020 was interesting because we came out of it pretty, pretty well for our clients in terms of making sure they got through it, but it ended so quickly. That's the thing. It's not the depth of the sell off. You can't have bit like that kind of pessimism and fear set in in the course of a month. You need like this series of lower highs that just breaks your heart every time.

That is incredible. We didn't have one. We haven't had that though. We didn't have one. There wasn't even one rollover. So during the height of the great financial crisis, right? Right after, by the way, I wrote the generational buying opportunity. Ari Rosenbaum, who's my guy who deals with- Yeah, Ari. Love Ari. Love Ari.

So he goes, Jim, I need to wheel you out here because one of our oldest clients- Wheel you out. Yeah. You're like an animatronic Disney robot. Hello. It's a small world after all. Anyway, so I go. I walk in, and literally, I've known this guy. I was the one who pitched him. Oh, wow. So he has been, like, one of our clients since the beginning,

since O'Shaughnessy Capital Management. Like, oh, four. Even before. Oh, my God. 90s. Oh, wow. So anyway, he's an advisor, like you guys, and he shall remain nameless, obviously.

As I'm walking into his- Phil Huber's dad. What, no? Shout out to Dave Huber. Yeah, shout out to Dave Huber. Stop panicking, Dave. No, no, this guy was in Washington. Listen to animatronic Jim.

Don't sell. But anyway, you know, Sim Jim is soon to come out of beta then you f**kers are never done you in the metaverse of course all right anyway see you there so so uh he stops me before i can even get over to his desk and i got a briefcase and he goes you got 20 charts and tables in that briefcase showing me why this is going to be the absolute best time for me to put all my clients money in equities and i I went, yeah. Yeah. And he goes, I don't give a shit.

Yeah. And he goes. What did he want to hear then? He wanted, he, he wanted us to say. Actually, my dad's exact words were. Phil was taping him. I wondered how you rose so quickly. Anyway, what he said was, what he wanted

was for me to say it was cool, what he was going to do. What was he going to do? Well, yeah. He reallocated to 85% fixed income, 15% foreign equities, not US equities.

Yeah, because those are lower risk. Oh, much lower. Much lower.S. equities. Yeah, because those are lower risk. Much lower. Much lower. Man, this is happening again. But the point is, he wanted me to say that was fine. And I went, you know me. I'm like, that's not fine. You're going to lose so

many of your clients. Right. Did you ever hear anything in the aftermath? Nope. Don't call. You don't want to hear it. He sold the CI Financial. Yeah, yeah. He got rolled up. Well, and again, you know, the last time that that kind of happened was during the dot-com, right? Yeah.

So I used to do a lot of speeches, do a lot of debates and everything. And one time I'm sharing the stage with a guy who's essentially saying to the audience, the only intelligent thing to do is move 100 your 100 of your portfolio into dot-com stocks and if you want to be a little more conservative then put just by the technology sector and then i look at him like i literally look at him like you are out of your mind you wanted to punch him and and and so then i dropped the yahoos are buying yahoo yeah not a single level of applause i mean they they hated me they wanted because they wanted to that was a great one-liner though they wanted to a lot of people want to hear what they want to hear or what they expect

they're going to hear yeah um i went through that i spoke at a gold mining conference in 2012 and i told them the uptrend is broken and and they, I mean, they chased me. Sure. Chef wouldn't even shake my hand in the green room. Really? They were like, they started walking, getting up and walking out. I was just like- Ouch.

It's a way of life. It's Canada. Oh, no, yeah, yeah, yeah, yeah. This is Vancouver. It's like a cult. Oh, man. No, it's worse than a cult. This is like going to Texas and saying, like, oil is over.

And all I was saying was, here's a technical chart. Look at this beautiful uptrend. It's over. We don't know what happens next, but it's unlikely what just happened is going to continue now. So, you know, they so believe their beliefs, right? So there's the joke, right? A gold-binding guy dies and goes to heaven. St. Peter says to him or whoever the head angel is, says to him, you know,

dude, we, we have limits that we have, you know, it's, we don't, it's not infinite, even though you stupid humans think it is, we got space problems. So we're all filled up with gold spectators. And the guy says to the guy, well, can I say, just, can I do one line to them? And, and he was like, yeah,

sure. So he goes over to the gold miner section and he shouts gold found in hell. And literally every one of them run out and go down to hell. And St. Peter goes, all right, dude, it's all yours.

And he goes, I'm going to go with them. There might be something to that rumor. Yeah, yeah, yeah. Is it a true story? Yes. You really are a funny guy. It is a true story.

Well, you can repeat something so much that you actually start to believe it. Yeah, and that's what they do. So I keep telling myself Lucid is cheap at these levels. Do you have a take on Tesla, lucid uh what rivian like in the last week or so what we've seen like does any of that resemble capitalism anymore no but but i love it when you ask me if i have a take i don't have a take on any stock either the stock meets our models criteria or it doesn't we know that that doesn't. But just that mentality where it's like, I love how the car looks. Yeah.

And I believe in the projections out to 2025. Yeah. Buy it and then actually have it work. That's the disturbing part, that that mentality actually is working really, really well. Not forever. Yeah. But it is right now. Yeah.

So one of the things that I don't have any position in any of Elon's companies. Totally understand. But I mean, I don't know how you can't love this guy. He is like the greatest show of our era. I think he's, he's like breathtaking to watch what he's doing. I mean, and I don't love him. Well, you know, I, I have this guy, I have this guy who follows me on Twitter. Right? And like all he does is bash Elon Musk. Oh, that's absurd. And so I DMed him. I'm like, dude, do you like own – are you short Tesla? What's going on? What's – you must have a thesis here. Is Ross Gerber's evil twin?

Well, no. It was that he just – or Musk owns so much of the real estate in this guy's mind. Yeah. And I was like, dude, you just got to stop this. Yeah. But that's – people get fixated long or short in different stocks. Absolutely. To your point though, he encourages this because he's constantly going – like at a certain point, you don't keep putting yourself in people's faces.

At a certain point, you don't keep putting yourself in people's faces. And again, back to the changes of government and everything, 20 years ago, he's in jail, Fed max, almost 100% certainty. Now, what is anyone going to do to him? Well, how about this? Due to inflation, 420 has gone up by 69. I know. That should be framed. It really should be, man. The guy for, you know, listen, you got to. That's the richest person on earth at two o'clock in the afternoon has time to shit

posts a 420 joke. And probably baked out of his mind as he's doing it. That's part. When you talk about a great reshuffle, I give you a lot of credit. Most people who have seen a lot of credit. Most people who, who have seen a lot of stuff and have been around a long time. Yeah. They're not getting a kick out of this.

This shit terrifies people. They're like, I don't understand how the is this company worth more than Ford. And they delivered their first truck last month. Right. And why is the world's richest man antagonizing Congress on Twitter? Right. And why is the president a Twitter troll?

And like, I don't feel like most people are enjoying this as much as you seem to be. Is this you putting on a brave face? Or do you really feel like, hey, man, it's all good? I feel like, hey, man, it's all good because— For now. For now. Listen. I give you credit for this. There will be some reckoning at some point.

I don't know when. Okay. But that's the way markets work, man. And I'm a bull all the way towards my great-great-great-great-grandchildren saying, thanks, Bubba. Yeah. All right. Let's keep going. I don't have much to say on the electric car things.

Do you have any take on these stocks? I know you're not trading them. I'm not a car guy, but I did, when you put it in the show notes, I looked up Lucid because I just wasn't familiar with it. It's a cool looking car. The car is sick. It looks amazing. The Rivian truck is amazing.

I mean, that's a $500 billion market cap company right there. Yeah, that should be a trillion immediately. Which one? Lucid. The Lucid. What is it called? The Air? If that's not a top five market cap company by there. Yeah, that should be a trillion immediately. Which one? Lucid. The Lucid. What is it called? The Air? If that's not a top five market cap company by the end of the year, I don't know what we're doing. You're not buying any of the – you're not a car guy?

This is $150,000. I don't know if this is the one. The Lucid. It's amazing. In classic Jim form, I didn't read the show notes, so I wasn't aware of this. No worries. We're going to talk about fintech spying media companies. So Scott Gallery was talking about this.

I thought it was interesting. Uh-oh. Was he in favor or opposed? I think he sees it as inevitable. Like JP Morgan bought this thing called the infatuation, which is like restaurant – they're not doing this for revenue. No. What I think though so Square bought

Tidal and Tidal today just announced music is free well it was, Jay-Z actually sold that company twice which is pretty impressive so now Dorsey owns it through Square and he basically came out on Twitter, the other company that he's the CEO of

and he said there's a free tier now on, now you have no reason not to use title because he's giving you what you're paying Spotify for. How is Jack Dorsey such a hyperinflationista when everything that he's built is pushing costs lower? Yeah, it's really bizarre. That's actually, I said that same question out loud when I was having dinner with some friends and like no one could answer it.

I have no idea. I have an answer. I have an answer for why Silicon Valley people think there's so much inflation everywhere. It's where they live. Yeah. It's two things. Oh, that's a good idea. A, it's their lifestyle.

Yeah. So everything that they do costs so much goddamn money. Do you understand how much caviar has gone up? Exactly. And they can't get a house for less than $30 million. Right. And B, all of the series A that they used to fund, they had $5 million and now $37 million. Right. You know all of the series A that they're used to funding at $5 million are now $37 million. Right.

You know what the cost is to rent an island for a month these days? It's unconscionable. So, all right. But anyway, the point being made is that you now have a situation where fintech companies have tons of money to throw around and they're going to buy up things that have audiences and find new ways to monetize those audiences, which makes sense to me. And it's way easier to buy something than start.

Oh, by the way, if Jack Dorsey wants to buy the compound and friends, it's, it's a $900 billion. Well, you know, I mean,

you joke, but listen, Howard Linsen, who's a buddy of mine and yours. Um, in fact, I met him here. And the reason we're friends is because he couldn't annoy me

for the 45 minutes that he tried to. And he asked me later, he goes, how did that work? And I said, I'm Irish, man. You can't get under our skin. And so anyway, we turned into good friends, but he was like all along, Hey Jack, why don't you add brokerage? Well, you could have a brokerage, Jack. Just a dollar sign. He ignored him. Yeah. And like he could be like Robin Hood. He could be big in all of these because Twitter itself is a schnulling point, right, where everyone goes.

Yes. And he blew it, man. And so he's making up for lost time, I think. So Square is like an $80 billion market cap, and he could do a lot with that. Exactly. And Twitter's kind of, honestly, the way I look at it, it's kind of his side project. Yeah. It feels that way.

Yeah, it does, right? Yeah. But I still think that Twitter can survive despite it. Twitter stock is 10 points above the date. Such a shitty stock. Oh, it's an awful stock. Are you a fan of Twitter Blue? Yeah, I am. Twitter can survive despite it. Twitter stock is 10 points above the date. Are you a fan of Twitter Blue? Yeah, I am. What is Twitter Blue?

It's like $2.99 a month or something. For what? Can I not get tweets for $2.99 a month? So somebody invited me on a Twitter Spaces. Tyrone's like, yo, we're going to do this thing. And I'm like, I had to call Mike. I'm like, I haven't been on Twitter in so long that Spaces didn't exist when I left.

Is that in the metaverse? He had sent me screenshots of like if I go on this thing, like how to do it. How to do it? How to tweet. Literally how to tweet. Yeah. So it's been a minute. It's come full circle.

So the market cap of Twitter, I'm making this up. It's like up like 30% since it came public, but it's all from share issuance. Right. From paying themselves. The price is up like 7% or something. It's crazy. That's the case, but that's the case

for some of these crypto projects. Because if Twitter people owned it, if people, let's say the people who sent the most tweets got airdropped the most tokens. And so they had some governance. And then all of a sudden it's Donald Trump and it's downtown Josh Brown, like calling the shots on what goes on on Twitter.

As it should be. Right. Well, I don't know. Like, is that good? Is that, does that turn into worse? Potentially. Oh, yeah. Somebody, there might be a Reddit token or something,

but they should incentivize the users so they pay every user with a twitter token for getting every 100 retweets that they get, they get.00 whatever tokens Instagram just offered me $250 if I would upload a reel not like just me, that's the email blast

they're sending out to verify pay you in tokens what reel would I upload? It's always people dancing. All right. I can dance. There you go. So $250 though?

That's nothing, man. Turn them down. Even for a teenage influencer, that's like $0. $0. Tell them to add two zeros and you'll talk. Two zeros maybe. Add two zeros and a hot dunk and you're going to film me doing a reel? Of course you will.

Wait, that's not how it works. I'll dance for free. Yeah, we'll do it. All right. See, listen. Throw in a constitution and then we'll talk. No, no, no. The race to zero. Phil just said he'd do it for free. The race to zero, man. He'll do it for likes.

He'll do it for likes. All right, so wait, what other fintech companies are buying? I don't even know what you're talking about with this fintech stuff. So I think what we're probably going to see is some of the media outlets covering markets get bought by brokerages and cash apps. And like PayPal was caught talking to Pinterest or thinking about talking to Pinterest. The stock didn't react well. You say like, why the hell would they do that? Well, there's like hundreds of millions of users around the world to Pinterest. The stock didn't react well. You say like, why the hell would they do that? Well, there's like hundreds of millions of users around the world on Pinterest.

Who cares about the content? You just put PayPal app in their face. Exactly. Twice a week. Exactly. Why not do that versus buying ad space during the Super Bowl? Totally. Hasn't every media property been bought?

I was going to joke stripe is going to buy a barstool but colossus is still available but colossus is available compound is available franklin templeton if you're listening no but seriously uh morning broob obviously was business insider uh barstool was was uh well i mean again michael it fits with the thesis your attention is the new gold. Right. And if you don't get it. In crypto, that started natively. Like who owns CoinDesk? It's one of the big crypto asset management groups.

DCG owns everything. DCG owns their own media. Yep. So when they want to launch a product, a service, announce a promotion of somebody, they don't have to like talk to reporters in the journal. They report. They just put it on CoinDesk. I genuinely feel that a lot of things are going to start going that way as technology companies with vastly inflated currency realize how cheap it is to buy editors and journalists. Exactly. And you know, they're the ones who are most pissed off, right? because they had an implicit deal in the old days.

The old days was I am going to be thought of as having a very prestigious job. And I own the audience. I own the audience, and I get to rub shoulders with the bigwigs. Gone. That's all gone. That's right. It's all gone. The bigwigs are publishing their own propaganda.

Exactly. The bigwigs are making memes. Of course. Yes. But you're right. And so the old command and control structure just doesn't work anymore. Another example, like, so, you know, you bring up Nixon, right? Back then, man, the man, in quotes, could do anything he wanted to do, and it worked.

So if the man decided um yeah the psychedelics that you guys are all enjoying that by the way are non-addictive no you're going to fed max prison and that's the end of that um and there's three networks and we're going to tell them what the to say yeah and that's the way it ran yeah that's over that's gone was that a better time to be alive uh no i don't think so's gone. Was that a better time to be alive? No, I don't think so. I think this is a much better time to be alive. Much more entertaining. Much more.

Well, but also much more creative, much more, you know, I just love it, man. I love, like, I love young people because they're digital natives and the shit that they can do is amazing to me. I would say like that is endlessly impressive to me. Like young people just adopting something and being experts at it later that day. Kyla, who you just had. Yeah, I just dropped Kyla today on the podcast and I'm like, we're talking afterwards. And I'm like, you know, she just wants her own company. And she'll have it.

And she'd bet she'll have it yeah she's probably you probably started as the youngest person in your firm at one point oh i was when i first started at huber financial uh i was the youngest by like 15 years yeah company and now you probably look around at the the new young people yeah and they're not i'm the old now they're not your generation i feel i very much feel like the old but how about it's weird anything i feel well that's why i need to keep Barry in the office more. So I'm not the oldest person here. So now think about how fast cream can rise to the top.

So Paki started his newsletter a year and a half ago. I know. What happens if an hour passes and you don't mention Paki? I get hives. And now he's an advisor to A6CZ's crypto. It's incredible. Paki is also a really good guy. He's also a phenom.

I put him in the same category as your son. Yeah. Yeah, for sure. But so one of the dangers that I perceive, right, is you got – these guys who are – and women who are doing really well on the personality front, on the writing front, on all those fronts, we haven't tested them as investors quite yet. And they need to be tested, right? We're not going to test them. The market's going to test them. That's what I mean. I'm testing them. I invested in Packy's fund. There you go. There you go. He's been in for six weeks. Everything's fine. Yeah, don't worry about it. What do you worry about? Packy.

I also think there's this other category of finance influencers who are getting like Scooby snacks at this point from big finance. Like they're getting checks, show up at our event, interview somebody. Like there's a little bit of that going on. Yeah. Some of these people are transcending and building their own brands. But the thing is, they mostly don't do anything. No.

They mostly influence, but there's almost nothing behind. I don't want to overgeneralize. No, because what are you talking about? What do you mean they don't do anything? There's a lot of people who have been able to amass very big audiences on YouTube.

Michael, they're famous for being famous. On Instagram. And I, by the way, I don't have a problem with that because everybody, when they're starting out, has to present a successful version of themselves. Right.

Like you're trying to meet your first client. Right. You don't want them to feel like you've never had a client before. Right. So this is not about that. But I generally find even the ones with millions of followers, like if you go to do something with them business-wise, you start to realize, oh, this this f***ing guy just makes Instagram. He doesn't do anything. Right. Or he hasn't

even tried to learn this industry. Which is by the way, proof of work. That's why that's important in there. But it doesn't exist in there. My point is Yeah, there is no proof of work. Okay, so you call me on the phone and you say, it's Josh. Hey, Jim, I got this guy I really like.

Want to go and co-invest with me, right? Yeah. What am I going to do? I'm going to look for proof of work from this guy. I'm going to look at a portfolio that it might even be young, but it's pointing in certain directions, right? And you wouldn't make an investment without proof of work. I wouldn't make an investment without proof of work. I look for proof of stake.

He likes proof of stake. Just say his name. Just say his name. You're talking about Ram Capital. No. Ram Capital. Shots fired. Ram Capital is not even pretending to be in this industry.

No. Come on. Come on. I once had a conversation with him, actually. Let's not be silly. I'm talking about MedFaber. Oh. No. Come on. Let's not be silly. I'm talking about MedFaber. Oh. No, come on.

Listen, there are people. I'm just saying there are people who create really pretty images and post them and write a really great caption. Yeah. And I have no problem with that. And the pandemic, there's all these investors that don't know anything. Yeah. They wouldn't even think, is this person registered? Oh, this is an unregistered person, has no responsibility to say anything, right?

Right. Fiduciary. Right there is a huge difference. I totally agree. The only thing that I would say is, look, when you have these explosions of growth, right, I personally think that that is worth it, even though there's going to be a lot in there that doesn't make it. Right. And and it happened in dot com. Right. It happened. It happened.

It continually happens. Creative destruction. And so will these people always be getting paid nice big chunks of money from people who are hiring them as influencers? No. Some of them are like running backs. It's like they have a very short shelf life. But some of them will actually take that opportunity and become serious. Yes, I agree. Right. And then that's the wheat versus sheaf machine of the market. Yeah.

Right? You have to give it time to let that process play out. Yeah. And when it plays out, it's brutal. Barry talks about Sturgeon's Law. You familiar? Yes, of course. 90 let that process play out. Yeah. And when it plays out, it's brutal. Barry talks about Sturgeon's Law. You familiar? Yes, of course. 90% of everything is shit.

Yeah. So I think like- What about the other 20? With financial influencers, it's probably like 95. Probably. But it won't always be. I agree. Some of this stuff will go away.

We got time for like one and a half more things. Josh, what do you want to go? Let's do this investing, trading, and collectibles. What NFT are you recommend? Can I tell you, as I'm sitting here, I just got an offer for 0.05 ETH on my OpenSea NFT. I don't want to tell you what it is. I'm insulted by that offer.

What do you mean? 0.05. I listed it for 0.12. Dude, this back to it. Right? I wish I could. You want a full phone call right there? 0.05 ETH is $2,500.

I don't even know. Is that $1,000? No, no, no. 0.05 ETH is, I don't know. What Is that $1,000? No, no, no. 0.05 ETH is, I don't know. What is that, $100? Not 0.5,

0.05? 0.05. Oh, I'm offended. I'm offended. He's in five basis point land. Ooh. Get out of here. What a burn.

That's a sick burn on you. Are you doing NFTs? No. Every time I see how much work goes involved into actually doing it and all the steps, I get-

You just want somebody to buy it for you and give them the cash? I'll pay Michael $20 to do it for me. I'm too lazy to do it. Buy him like a wrestling. So Ben and I are going to talk about it next week. He would love the wrestling.

Speaking of which, so the reason I wanted to talk about collectibles, you wrote a post not too long ago called I Collect Cash Flows. You talked about you want to own cash flowing businesses. I like that one, by the way. Loser. And not NFTs or trading cards or whatchamacallit. So I wanted to use this opportunity to share a gift that I brought for all three of you guys today. Okay. Oh, man, you're so cool.

I feel like an asshole. I didn't bring anything. Well, I listened to an episode a little while ago that Tom Lydon was on. He brought you guys some nice gifts. And I thought, you know what? I should do something like that, but not nearly as impressive as his gifts. I do collect things. Look what I brought for you. That's a big build up. You mentioned your mother-in-law

who collects elephant figurines, I think, because she likes to put them on a shelf and she likes looking at them. I have something like that. It's action figures, wrestling action figures. I brought each of you your own wrestling action figure. Come on. And each one is curated to your personality.

Hey, so Phil, I'm going to send you a GIF with that guy who says, I got you this GIF. Josh is your prisoner. So we're going to start things off here with. You're serious. Look at this. He's serious. So we're going to start with Josh.

I used to have all of these as a kid. Josh gets John Cena. I had the G.I. Joes. Let me walk through the reasons I got each of these. So John Cena's catchphrase is, you can't see me. Josh quit Twitter, and now we can't see him. John Cena's also super into hip hop, and he's probably the most mainstream wrestler that even non-fans recognize.

Similarly, in our world, like my mom knows who you are. She has no idea who Michael is. No offense, Michael. His mom doesn't know who he is. So that's what Josh gets. And feel free to give this to your son this is awesome and i love it says height 61 weight 250 which are actually my measurements but we don't look we don't look alike at all so this is this is amazing so thank you now we're gonna go to um to jim jim you get dusty roads dusty because i'm're familiar with Dusty Rhodes, his nickname was the American Dream. And honestly, Jim,

I look at you as the embodiment of the American Dream. The other key point is that Dusty Rhodes, who's since passed, his son Cody is one of the top wrestlers out there today, similar to your son Patrick being just an absolute phenom as well. So I thought that was a perfect fit for you. Thank you, man. I'm actually

honored and touched. You can give it to your grandson'm actually honored i will pierce my grandson is going to look at this and say papa you are cool man pierce can't wait to uh eat and swallow one of the pieces of that uh action figure he's seven man and then last but not least we got we got michael i got you goldberg oh that and the Goldberg. Oh, that is Jewish. The reason being another phallically challenged Jewish man. And partially your blog name is The Irrelevant Investor, but the irony is that you're far from irrelevant. Similarly, Goldberg, his heyday was the late 90s. So you would think he's irrelevant, but he actually still shows up now today. So he's actually relevant despite most people thinking he's not. I love it. What was his finishing move with the jackknife jet the jackhammer again kind of like you think with goldberg that's so crazy is what are these muscles called traps thanks wait is that right the deltoids

and the and the traps were just so out of control i almost gave you goldberg because your traps kind of reminded me my traps are pretty big yeah my traps are out of control not to break uh who's your who's your favorite wrestler all time uh sean michaels why currently i he was a smaller guy and he's a sexy boy obviously i figured that like smaller guy more athletic i wanted to get you to say it current day uh daniel bryan would probably be me what's his what's his deal what does he do he does yes he's a small guy he's the yes chant uh just's like the yes guy. Just the ultimate underdog. Is that the guy in the gift? Yes, yes, yes.

He's a good guy. That's him. Oh my God, Jim. There you go. He knows every gift. I went to one of those with my kid. Did you have a great time? I went to the Barclays in Brooklyn, and we were on the floor.

No seats. And my kid's a tiny, so I got to hold him up. Oh, man. Like I'm holding a sign. I have to hold him up for three hours. These things never end, by the way. You know that, right? They are long.

This thing went from like 7 to 10.30, and I'm holding a 40-pound child almost the entire time because otherwise he won't see a thing. I don't know why we were on the floor. This must have been a few years ago then. Yeah. You've got a lot of karma points for that. The one thing that I would say, though, I was with another dad and his kid, and his kid was lighter. I think we switched at one point. I was with another dad and his kid and his kid was lighter.

I think we switched at one point. But the one thing I will say is I have never been to an event before. Barring maybe a Knicks playoff game. I have never seen that much enthusiasm for anything. And like, I've seen every concert. I've seen every type of sport in every venue. These people,

you, your people, when you're a fan, you're, you're a super fan. You guys are rabid. Do you own the stock? I do, actually. You do?

Does that conform to Jim O'Shaughnessy's models? You're stepping out on me. High shareholder yield, low. I actually personally invested in a private wrestling promotion, a smaller one. Good for you. This is amazing.

Very nice. Thank you. We absolutely love you. Have fun. Who's your wrestler? You have one? I mean, I would probably go back to when I was a kid, Hulk Hogan or something.

Hulk Hogan. Wait, you were a kid that, I was Hulk Hogan as a kid. You're not my age. I just remember playing with the action figure, but I was never super into it in general. So my guy was, my guy was,

my guy was Nikolai Volkov. And he would come out and sing. You strike me as the Nikolai Volkov guy. So he would sing the Russian national anthem. And the crowd. And you would stand up at attention. The crowd would like throw garbage cans at him. This is the 80s.

There was not even security yet. Like the heels in the 80s. Like people took that seriously. They never broke character. Like they got stabbed on the way to the ring. It was like not even security like the heels in the 80s like like people took that seriously they never broke character like they got stabbed on the way yeah yeah it was like crazy stuff yeah crazy well the iron chic and nikolai volkov were tag team partners are that i remember and they would fight two guys with like american flag speedos of course and uh it never really went well for them um thanksgiving's coming up i wanted to ask you guys what you do for Thanksgiving. What are your traditions?

I'll go first. So our tradition more of the last decade, like since I got married, is just with my wife's family, going to see them. Because it's a smaller family. My family's pretty big, extended-wise. Happy wife, happy life. It's more noticeable if we're not there for her. So we're going down to Naples, actually, next week to visit them.

Sounds terrible. I know, right? But as far as foods, I'm a big fan of the corn souffle. That's kind of the Huber family specialty. Will you tell us about the Allocator's Edge? I will, yeah. I just realized we spent an hour talking, and we haven't gotten to the fact that your new book is out.

Yeah, we'll plug that for sure. Thank you. I got a copy too. Wait, hold on. Let's make sure this gets on camera. There we go. So tell us why the book, why now, and what you're most excited about people reading in here. Yeah, so I'm super excited and proud of how it turned out. The inspiration for writing this particular book was based on a lot of the conversations I had been having in our firm with advisors, with clients on, you know, we have dedicated allocations to different types of alternative investments and it accounts for

most of the questions that the clients have. The alternatives account for most of the questions. And naturally, you know, that should be unexpected because they're more complex. They're a little bit more foreign to most people. They don't have experience owning them, so they don't know how to properly set expectations. So my whole goal here was to really create the manual for financial advisors and other professional allocators on the why, the how, and the what behind investing in alternative investments. I like what you did where you kind of took like the – what is that called? The periodic table? Periodic table, yeah.

So every type of investment has its own periodic table symbol. So like equity market neutral is MN. And then you explain what it's for, diversification and growth. I would argue with the growth part, but I see what you mean. But there are so many categories of alternatives. How many do you get into? Yeah, so the whole middle part of the book is the what. So I tried to take a past, present, future framework for going through chapter by chapter.

So I kind of start with the four big horsemen of all, private equity, hedge funds, real estate, natural resources, and then move into some other categories that are becoming more popular today. Things like insurance-linked securities, like cap bonds, things like- Board apes. You know, like different types of private credit, digital assets, et cetera. So I tried to make it as comprehensive as possible because it is a pretty big topic. And the word alternatives, it really just tells you more about what something isn't as opposed to what it is. So to lump everything together in one category,

I think is a disservice, but what do you think? Well, I read the book and if I could quote myself, disservice, but you know, what do you think? I read the book, and if I could quote myself, I wrote... Notice that he's got to read it, though. It unpacks the misunderstandings. Hold on, hold on. It unpacks the misunderstandings and misconceptions that often accompany alternative investments.

Well done, Funkhauser. Well done. Well done. Well played. I'm very proud of you, and you have all the best people on the back cover. It was a true wish list of the people that provided endorsements, including Michael. So let me read these. Corey Hofstein, who is brilliant. Meb Faber, who is brilliant.

Shannon Sikosha, she's, like, a great, great CIO at Boston Private. Yeah. Who else on here? Ted Seides, who, great podcast, Capital Allocators. And it wasn't just the – like people like Brian Portnoy, like Ted, like Rory. Did he ask you? He did not. They were so –

You know, after this is over – Cliff Asness wrote the forward. So I am powerful at OSAM only until 1231 when the deal actually closes. So I'm going to use my power in a very reckless way. Because I was not asked, I'm cutting his entire firm. Yeah, Cliff did an amazing job with the foreword. How did you get Cliff? I emailed him and I asked him.

I've known Cliff. We're not close friends, but I emailed him. He does nice things for people. You only know one side of him, but he does nice things. And I attribute a lot of my – He does nice things for people. You only know like one side of him, but he does nice things. And I attribute a lot of my early education around alternatives early in my career came from attending AQR University, their conference they did for advisors. And so for me, it was kind of full circle where if I'm writing a book on alternatives, if I could pick one person in the world to do the forward, it was Cliff. And I told him that, and he was kind enough to do it and did a phenomenal job. So, you know, very funny. If you call them like two weeks before the book came out and said,

yeah, that forward that you wrote, we decided it really wasn't that good. I sent it to my editor, Craig, and we were both like, I don't think there's a single word to edit of this because it was just classic Cliff footnotes. I dare you to edit. I dare you to edit. I dare you. I dare you to. He's actually like to edit. I dare you. I dare you, too. He's actually, like, so we both live in Greenwich. You guys have a lot in common in the quantitative world. Yeah. Like, in terms of how you look at markets. Very much.

But one time I, like, took him out to lunch, and I'm like, Cliff, listen, man. Who bought? Me. That's one of the weaknesses. Like, I go into shock if they don't give me the tab. It's like it's cursed with that. And one time I even asked a waitress. I'm like, okay, so I was with guys my own age, right?

Yeah. And she comes over and doesn't even think about it. She puts it right in front of me. You're very patriarchal. Is that the right description? Patriarchy. You're part ofal. Is that the right description? Patriarchy. You're part of the patriarchy. All right, next time you have lunch with him,

will you pass on this suggestion? I'm afraid to DM it to him, because I feel like it could be explosive. I could text him on the show right now. I mean this in the best way. This is my idea for him. Okay. I know he doesn't want to stay off Twitter.

I get that. I know it's a place to vent off Twitter. I get that. Right. I know it's a place to vent, and there is some interesting conversation going on once a year. I get that, too. That's true. He should hire Jeff Ross to just roast all of these assholes that come at him. Right.

Like, how much could it cost, honestly, to hire Jeff Ross? I agree. Take over my Twitter. Yeah. Every once in a while, I'll send my own tweets. But 90% of the time, I just want you to destroy these people for me. You should hire the most comics. He's more of a fundamental guy, though.

That's true. That's true. He's not quant. The thing, though, that I just want to stress is when you meet him in real life, he's a genuinely kind, good guy. Cliff's the man. He really is. All right. But enough about Cliff.

Let's get back to me. Let's get back to Josh. I know what you're going to do Thanksgiving because I follow you on Instagram. I'm going to see – I'll probably see most of it. Yeah. So it's at the Hacienda? The Hacienda in California. Okay.

Oh, California. Yeah. Okay. Where? Good question. I don't know. What time should I be there? I just pay for everything. Okay. Oh, California. Yeah. Okay. Where? Good question. I don't know. What time should I be there? I just pay for everything.

Okay. And we, kind of like Phil's family, we swap every year. So we go Christmas one year, we get the whole family. And then the next year, our in-laws get them. And then we do the same thing for Thanksgiving. So Patrick and Lauren are going to her parents. Lael and Cy are going to his parents. But for Christmas

they all are coming with us. Okay. So you get that holiday where everybody comes back. And then next year we'll get Thanksgiving and the other families will get Christmas. It seems to work out really well. That's great. What are you doing? Are you in town? For Thanksgiving? Yeah. Yeah, I'm having my family over. are you the meddler at the table oh my

god i'm so not the meddler i like basically you're a meddler you're a meddler no no no no no i'm the youngest by seven no no no no the middler is like uh seinfeld almost explain the middler so the last the last curb your enthusiasm they figured out i haven't seen the new one yet so they figured out that one of their friends is terrible in the middle of the table. They're having a dinner party. Oh, a middler. If you're in the middle, you've got to conduct conversation. Is that on the newest and deepest?

And having a conversation that nobody else is involved in. Right. And it's ruining the dinner party. Susie says, Larry, can I see you in the kitchen? She goes, you've got to get this asshole out of the middle. He's not a middler. So Larry jumps in and saves the day. He's a great middler.

I was talking about him earlier, too. This man, I do not know another comic. Maybe I put Jerry Seinfeld in there with him. But his comedic arc is. It's still ascending. It is. Yeah. I mean, the last episode he did

was one of the best episodes ever. He's still getting better. The whole season's been phenomenal. How? It's just amazing. This guy is such a genius. And if you think about it, you had to have that crazy mind work for network TV. Yeah, yeah. And the shit they got on network TV.

Yeah. Just astounding. My wife said, how come he could get away with it? Because the last episode was about KKK, whatever. And I said, got on network TV. Yeah. Just astounding. My wife said, how come he could get away with it? Because the last episode was about KKK, whatever. And I said, because it's funny. Yes, exactly. Because it's so funny. I do think, though, that he's old enough that what are you going to do? Right.

Like, are you going to take his sponsorships away? He doesn't have any. He doesn't give a shit. He really doesn't. No. I also think that HBO is going to look at how Netflix handled the Chappelle thing. Right. And get back into putting great stand-up comics on.

Yeah, I agree. Which they were known for for 20 years. I totally agree. They're going to say, you know what? It blew over in three weeks. We got three weeks. Yeah. We could deal with this.

Follow their stock, AT&T. Exactly. It's a buckle. Yeah, right. All right. So I don't really have anything great to share for Thanksgiving. My parents are divorced, so I actually hate the holiday. I'm going to do a restaurant with assorted people and just hope it comes and goes.

Well, there you go. Because somebody is always mad at me every year. It almost doesn't matter. And then I can't put everyone together. Do the reasons they're mad at you change? No, because it's Thanksgiving. What are you doing for Thanksgiving this year? Oh, well, I figured I was.

Got it. It never works. All right. Let's do some favorites, and then we'll let everybody decompress. This has been quite an episode, I would say. What do you think? Pretty good? Okay.

You'll have me back. Top percentile. Top percentile. Top percentile. All right, Michael, you go first. We did curb. We did curb. We did curb. What is with this Bored Apes bullshit?

Can I stop hearing about this soon, or is it going to get bigger? I will say, listen to the podcast. So Patrick has a new podcast. I think it's his eighth podcast or something. So he had Eric Golden on. I met Eric actually. Oh, that's in my queue. Okay.

I'm going to listen to it. So he's the Bored Ape guy. So I actually met Eric at Capital Camp a few months ago. That was my first introduction to him. You guys should come to Capital Camp. He's a former fixed income portfolio manager at Fidelity who did a complete 180 pivot and is fully into like Bored Apes and NFTs. And I was picking his brain all week on stuff, just peppering him. He must have made a ton of money.

Oh, I mean, yeah. But like so he did this episode of web three breakdowns with patrick it's a great interview i highly suggest but he is also a like one of the nicest guys you'll ever meet yeah i did a favor for him and like he minted an nft of my uh patent okay on giving investment advice over the world wide web and fulfillment through a computer network. How's that for a patent? That's amazing.

That's a very good guy. All right. So we'll listen. So we'll listen to that. Excellent. Wait, Phil, you have the same one,

the same board apes podcast. I think that was the same thing. Not only was that so good. I read the research report. I forget who put that together, but the team that Patrick has assembled at Colossus is ridiculous. And I listened to Business Breakdowns, the Founders Field Guide, and the Flagship Fund,

the Flagship Podcast. He is just, his motor is something else. I can't even believe how many he's doing per month, how many episodes of different shows. So he's very smart in that he knows how to delegate a lot of stuff. So he could just show up and be on the mic. Yep. I'm not,

I'm not smart like that. King of the castle. Yeah. Yeah, he is. We're going to, we're going to hire somebody to help me out going into next year. Josh,

I swear to God, you, you, if you get the right person. Yeah. You will even think to call me and say, thank you for telling me I had to do that. Yeah. Because it will. Barry's been telling me that for two person. Yeah. You will even think to call me and say, thank you for telling me I had to do that. Yeah.

Because it will make you – Barry's been telling me that for two years. Yeah. Well, listen to him. Listen to him. I told – I mean Patrick, like when he started with me, he was nothing, right? He didn't know any – philosophy major. Yeah.

How'd you let that happen? I actually personally think that's a great major because it teaches you how to think. Yeah, yeah. And man, when people come to me now, I say study evolutionary biology and psychology because in the end of the day, it's still human beings who are just domesticated primates making the same fucking mistakes. So what you're saying is Patrick is getting by on a lot of people beneath him doing a lot of the stuff that – Well, no.

What he's doing is he's picking people really well. Yep. And he is empowering them. Like nobody wants to be micromanaged. They want to do a good work product, right? Duncan actually does. Does he? Yeah.

OK. You're not going to work out at any O'Shaughnessy establishment. He's the exception that proves the rule. He wants constant feedback all day. Yeah, so Patrick is just like, he just leverages them correctly. Yeah, well, he's doing a kick-ass job. And shout-out to Colossus and all the amazing content he puts out. Did that get bought or that's separate?

That's separate. Yeah, smart. Let's see. Smart. Did that get bought or that's separate? That's separate. Yeah, smart. Let's see. Smart. Get a better multiple for that too. Yeah, he owns all that himself too. We don't – which honestly, asset management doesn't own anything.

All of our creators own their own blogs. Which is great. I own Nick's. What's that? I own Nick's blog. Oh, you own Nick's now? I thought you said I own the Nick's. Everyone owns their own blog, but Michael owns Knicks.

Okay, got it. We should tokenize all the blogs. We should. You really should. And then what? On the blog chain. What can we do with it? My favorites.

Is anybody watching Narcos Mexico season three? Am I the only person? I want to watch it, but my wife refuses because she thought the first one was too violent. So watch when she goes to sleep. Yeah. I could never get my wife to watch that. Did you ever watch it? No.

I think it's the best thing Netflix has ever made. The whole Narcos cinematic universe. The first – I've only seen the first one, but the first one is so amazing. So the first one is Columbia and the last three seasons are Mexico, but the characters from Columbia come back because they're still supplying the Mexican plazas. I mean, this is like Star Wars

with drug dealing. It is truly incredible. Who's in the Yellowstone? What's that? You guys in the Yellowstone? Michael is. That shows. The first 30 minutes of that first episode of the new season was just insanely good.

It's on Paramount+. It's so well done. You have a subscription to Paramount+. No, it's on Fios. It's on demand. It's Succession on the Ranch and Kevin Costner is Logan Roy. I love Succession. So Succession is the funniest show there is.

I totally agree. I think it's, actually, I'd go further and say, I think that Succession is one of the best shows of the last 10 years. Oh, 100%. Without a doubt. Who's your favorite character? Well, that's the thing, right? We stopped watching it originally because we just hated everybody in the cast.

You gotta buy in. It's Greg and Tom. I'm a Wamsgams guy. Yeah, Wamsgams. You like Tom? Tom and got to buy in. It's Greg and Tom. I'm a Wamsgams guy. Yeah, Wamsgams. You like Tom? Tom and Greg. I love Tom. That's one character, Greg and Tom. Well, yeah.

And so Greg's going to end up running everything, right? I mean, he has to. It has to end that way. It just has to end that way. It's the only way it can end. Are you reading a lot? Oh, yeah. I know you are.

Yeah. Do you read novels or is everything nonfiction? So I do read novels. There's a great novel called The Fifth Science. The Allocator's Edge. It started as a romance novel and then I pivoted. So there's a great sci-fi book called The Fifth Science, which I highly recommend. Okay. I'm going to recommend one to you. That's why I asked. Okay, cool. Do you know Gary Steingart? Yeah. Have you read any of his stuff? Yeah.

He's my favorite living novelist, I would say. Yeah, he's good. I read Lake Success based on your recommendations. His new one came out last week, My Country Friends. It could be the first great piece of art to come out of the pandemic. Wow. Because he wrote it contemporaneously with actually living through the pandemic. It wrote it contemporaneously with actually living

through the pandemic. It's not a memoir. Like he was upstate New York with old friends drinking wine, getting into age old conflicts with people. Sure. And that's the book. It's not about him, but a lot of the characters you can see he's speaking through them.

It is so good. I'll, I'll pick it up. You must read this book. And what you then must have liked uh bo burnham's uh thing uh inside i haven't got i haven't gotten to that i didn't get it i know i liked it i thought it was genius myself i thought it was like everyone liked it this guy's a genius you should try it is that Netflix where is that yeah it's on that was Netflix yeah yeah

okay i will i will absolutely get that all right right, we're going to wrap. Duncan, anything to add here? No, I would second that. I loved Inside with Bo Kernham. All right, so we'll wrap this. Everyone will get a drink of water, and then we'll turn the cameras and the mics on, and we'll do this for real. Does that sound good?

I feel like Jim's warmed up now. Is that cool? Yeah, I think we'll be done by 10. All right, I have a couple of quick announcements. First of all, if you want to become a serious investor, you have to read good books. The Allocator's Edge by Phil Huber. You cover a lot of stuff in here. So this is – congratulations, dude.

Thank you so much. I appreciate it. Who's going to play you in the movie? Probably Jason Biggs is what I get a lot. Jason Biggs. He's my doppelganger. Okay. All right.

I'd watch the shit out of that. Jim O'Shaughnessy, Infinite Loops. What else do we want? Like, we want people to follow you on Twitter because you're hilarious there. Yeah, so it's JP O'Shaughnessy on Twitter. Infinite Loops is the podcast. Okay. I meant everything I said when we opened this up.

I appreciate that. You've been hugely influential. Hugely influential, not only here, but I think to a lot of younger investors who have come after you, and thank you for that. I appreciate it. So thank you for being a great part of the community who have come after you and thank you for that. I appreciate it. Thank you for being a great part of the community. All right.

We want to tell you that all new merchandise in, I don't shop.com. I don't shop.com for the finest in financial blogger apparel shirt. I'm wearing right now. The official ETH Hernandez shirt. Go ahead and pick that up. Also want to remind everybody that every Monday, every Wednesday, brand new Animal Spirits.

We're doing that next week too? I never miss. You guys never miss. You do it from your home. All right. All new Animal Spirits next week. There will not be a Compound and Friends next Thursday, so hopefully this will tide you over. Listen to it twice. Yeah, listen to it twice.

It's twice as nice. What else did I have to get to? Are we all set? Yeah? It's enough already, right? Yeah, I think we're good. All right. All right.

Let's get out of here. Thanks so much for listening, guys. We'll see you next week. All right. That was great. Was that fun? That was fun. You guys are naturals.

You should have a podcast. You really could. You should have a podcast. That was awesome. That was awesome.