The Compound and Friends - Michael Sonnenshein: Inside the World's Largest Bitcoin Fund

Episode Date: March 4, 2020

First up, Michael Sonnenshein, Managing Director of Grayscale Investments, stopped by The Compound to discuss bitcoin with Josh and Michael. Grayscale runs the largest bitcoin fund in the world, with nearly $3 billion in AUM. What does the future of bitcoin look like? And then on today's episode of What Are Your Thoughts, Michael Batnick and Josh Brown get into all the hottest topics in investing and finance. Josh's apology for rooting for corrections Has the market bottomed or do we need a retest of the low? Would rather know about a market bottom or a market top in advance? Josh is reading about viruses and outbreaks around the clock, what's the point? Zoom Media became a hot stock because of teleconferencing, and then traders bought the wrong ticker too - on purpose? Why do people share their transactions on Venmo? Every analyst now gets a base case, bull case and bear case - whatever happened to making a call and standing by it? The Fed dropped a surprise interest cut of 50 basis points during our show - Michael and Josh react in real time. Be sure to subscribe to our channel so you never miss an update: https://www.youtube.com/thecompoundrw... Beginning Investors, check out Liftoff: http://liftoffinvest.com Follow us on Twitter: https://twitter.com/RitholtzWealth Follow us on Facebook: https://www.facebook.com/ritholtzwealth/ Talk with us about your portfolio or financial plan here: http://ritholtzwealth.com/ Obviously nothing on this channel should be considered as personalized financial advice just for you or a solicitation to buy or sell any securities. Please see this 3,000 word terms & conditions disclaimer: https://thereformedbroker.com/terms-a... Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey, it's downtown Josh Brown. I'm live from the compound here with Michael Batnick. As usual, we have a special guest. Michael Sonnenschein is the managing director of Grayscale, which sponsors the Bitcoin Trust. A lot of people know GBTC as the Bitcoin Trust. he's got the largest fund in Bitcoin, why more people should know about it, how it works, everything you've ever wanted to know about making liquid investments into Bitcoin. Stick around. Let's see what's going on. Welcome to the Compound Show podcast. Each week, we let you in on some of the best conversations we're having about markets, investing, and life. Just a quick reminder, the hosts of this show are employees of Ritholtz Wealth Management. All opinions expressed are solely their own opinions and do not reflect the opinion of Ritholtz Wealth. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Ritholtz Wealth Management

may maintain positions in the securities discussed in this podcast. Okay, here we go. Okay, so first of all, I'm calling it the biggest Bitcoin fund in the world, because I think it is, right? That is true. So today, Grayscale Bitcoin Trust controls about 1.5% of all the Bitcoin outstanding in the world. So in dollar terms, how much Bitcoin does it control? controls about 1.5% of all the Bitcoin outstanding in the world. So in dollar terms, how much Bitcoin does it control? We're talking about just shy of about $3 billion. Okay. And obviously, as prices go higher, that goes up. As prices go lower, that goes down.

Correct. So the fund is solely and passively invested in Bitcoin. There is no cash, no leverage, no trading. It's a pure long Bitcoin exposure product. And so over time, as we create more shares, the fund also has more Bitcoin under it. Can you explain what you mean by create more shares? So I think a lot of our audience understands ETFs. They may not understand creation redemption. Sure. But they understand when they put money in, shares are created and given to them in exchange for that money. Sure.

What is the mechanism for the Grayscale Bitcoin Trust? So we have an ongoing private placement. So accredited investors, if you're an individual or an institution, can buy shares directly from Grayscale at net asset value. And so if they're putting money into the fund, we're growing the fund by that many shares and that many Bitcoin on a given day. Those shares have been locked up for six months. Let me stop you. So I say, here's a million dollars. We have to create a million dollars worth of shares.

You have to create a million dollars worth of Bitcoin. A million dollars worth of Bitcoin. And the fund grows by that much Bitcoin, that many shares. They're locked up for six months. And then that investor is then able to sell those shares out onto the public market under the symbol GBTC. Now, the smaller investor is not coming to you direct to create those shares. They're buying in the secondary market. Correct. And they are paying a premium over the price of Bitcoin

in order to be able to do that. Yeah. So the shares have historically and currently do trade at a premium on the secondary market. And I think that's really more than anything, a function of how much demand there is for an access product for Bitcoin, right? If you look back at 2019, second only, I think, It actually has not. The premium certainly ebbs and flows. But again, the price of that premium and where GBTC trades every day is completely driven by the market and market forces. So you don't have a fixed amount of Bitcoins. You have the amount based on what the demand has been from institutions. So if institutions got twice as excited about the asset class, you could theoretically be out there

buying even more Bitcoins in order to facilitate them owning it. 100%. Last year, 2019, about 71% of the inflows across the whole product family, because we have 10 funds at Grayscale, 71% of that was institutional.

Okay. So there's tremendous, tremendous demand. Are these family offices? Are these hedge funds? What are we talking about when we say institutional? It's everything. So it's financial advisors and RIAs. It's family offices.

It's hedge funds that really, Josh, it's every strategy you can imagine. Global macro funds, risk-arbed funds, momentum funds, tech funds. And then certainly starting to see a little bit more interest from the endowment and kind of pension community. So I kind of understand why people would be buying it through your trust if they were institutions, because an institution is not investing their own money. By definition, they're an intermediary. They have an end client. Sometimes it's a wealthy family.

Sometimes it's an endowment. It's a wealthy family. Sometimes it's an endowment. It's a foundation. They have to answer to that entity for what happens with the money. So what are their alternatives to grayscale Bitcoin trusts? They can be in the futures market, buying options on Bitcoin, buying futures. That's got all its own different characteristics. They could have their own wallet and be buying digital coins directly from a brokerage firm. We know that's fraught with peril. So I think a lot of them look at your product. They see the liquidity. You now have how many years of a- So over six years of a track record.

They say, all right, these people have been around for six years. They haven't been hacked. They haven't been hacked. They haven't been, you know, right. And they just say, if we have to have 1% in Bitcoin, which is what we say is our mandate, they would probably say like, this looks like it's the safest way to do it. Like, is that the thought process that you think goes on? I think the thought process is actually around things like the fact that the fund has a QSIP. It's audited. It produces financial statements. It produces tax statements. You can own it in a brokerage account.

In a brokerage account. You can own it in a tax-advantaged account. And actually, just earlier this year, Grayscale Bitcoin Trust became an SEC reporting company. So now you're talking about the fund, which has been around for over six years, has the exact same reporting and disclosure obligations as any other public company or any other product that trades in the market. The fund itself is now a reporting company. Yeah. This is the first digital currency instrument to become SEC reporting. So investors can expect to start seeing 10 Ks and 10 Qs and give them all the same protections that come with being SEC reporting. One potential, before I say that,

Bitcoin never sleeps. It trades 24 hours a day. What about GBTC? GBTC trades 930 to 4. It trades on the OTC market. Right, because it's in brokerage accounts. So, but I'm saying like, if you want access to Bitcoin all the time, this is probably not the right instrument. Well, so I think that our investors that are trading GBTC are certainly looking for it and looking at it as an access product. The investors that are buying into the private placement are going into it knowing there's a six month lockup on the shares they're

creating. So they're not trading. These are people that directionally want to have the Bitcoin exposure and are comfortable and believe in the long term potential where Bitcoin's going. Now, you told me some crazy shit that I love. Okay. This is maybe like the best thing I've ever heard. And I don't understand why more people don't know about this. You told me in Florida the other day that people that own their own Bitcoin, sitting on Coinbase or Gemini or like sitting at any other brokerage or even in cold storage, they can come to you and give you their Bitcoin and you will turn around and give them shares of GBTC in exchange

and they get the premium that the shares trade. Is that true? So let me unpack that for you. So we take subscriptions. I was definitely drinking when we had the conversation. So let me unpack that. So we take subscriptions. I was definitely drinking when we had this conversation. So let me unpack that. So we take subscriptions into the private placement, both in cash as well as in Bitcoin. Right. So you can give us cash. We'll go out, buy the underlying Bitcoin, create the requisite amount of shares.

But you can also give us Bitcoin that we'll have to go through all of our AML and KYC and make sure that we're taking in clean coins into the fund. And you will then be long shares. Is clean coins like clean coal? No, we're talking about like, as opposed to cash, there are firms now that actually do blockchain surveillance and monitoring. So they can tell where they originated from? They can tell every transaction, every wallet, everything. So you're not washing coins from Deutsche Bank?

We are not washing anything. Not a thing. Okay. And so investors can take coins they already own, contribute them into the fund in exchange for shares of the private placement if you're an accredited investor, wait the six-month lockup, and then you'll be able to then sell your shares out on the public market at whatever the prevailing price is for GBTC. Okay.

So assuming – let's say Bitcoin does not change in value, but you now don't have Bitcoin. You have shares of GBTC, which has historically traded at a premium. Are we talking 2%, 5%? What are we talking? So the premium now is probably somewhere around 25% to 30% above the net asset value of the fund. Because I was going to say for a little premium, it probably doesn't make sense to give up a little liquidity for six months. No, no, no. 25% premium. There must be hedge funds that are set up just to do this.

I don't necessarily think there are hedge funds just for this. But certainly for some investors, there are certainly… The risk is the price. Totally. But for some investors, for some subset of the coins they own, that is the potential – a potentially attractive trade for them. So they are doing it. What will narrow that premium? The launch of an ETF or the conversion of you to an ETF?

It's inconceivable to me that this becomes a trillion- asset class and there's still one without it, without an ETF with an enormous premium. So, you know, the ETF is a matter of when, not a matter of if. Right. And so if you look back at our history, we registered for a Bitcoin ETF in 2017 to uplist GBTC into a bona fide ETF on the New York Stock Exchange. uplist GBTC into a bona fide ETF on the New York Stock Exchange. We made a ton of progress with the SEC, but ultimately realized they weren't ready. And we're really citing some, you know, some concerns with the underlying market. And so we pulled out of that process. So I think the regulatory community is as engaged as they've ever been. Certainly looking back at what I just shared with you guys that our fund just became an SEC reporting company. This should signal to everybody who's looking at the space and looking for regulatory clarity that regulators are willing to engage and are moving the needle forward on certain items. I think the regulators have done an unbelievably good job with the emergence of this because we

saw that moment in 2017 with the ICOs, and it was obviously a wild west. But the prosecutions got underway really quickly. I could imagine something like that had gone on for five years in a prior era. Sure. I mean, the dot-com thing, there were scams everywhere, and that went on for five years. Totally agree with you. We stayed meaningfully away from the ICO space, never did anything with it. Running a regulated business, it could not have been clearer to us what laws are in place of how to raise money from the American public, how to offer securities to the American public.

And a lot of these projects were not complying with very, very well-established guidelines. What are the conversations like today versus two years ago, like around Bitcoin? Like institutions when they come to you. So Bitcoin itself has solidified its role as a store of value or as a digital gold, right? So when I talk to an institution, they now look at Bitcoin as part of the same flight to safety as they might look at bonds or gold or other things that have served in that capacity for them. And that wasn't a widely held narrative, probably until about the last 12, 18 months. They see it as like a viable alternative to stocks and bonds.

Well, I think if you look at the world that we live in, it's a digital world, right? And so gold may have made sense for a physical world, but we've really made the move into a digital era. So we need a digital store of value. And this is what's resonating with them because Bitcoin has a lot of the same attributes as gold and actually has some things about it that make it better than gold. It's verifiably scarce. It's much more portable,

right? It's much more divisible. Oh, you want to open up this can of worms? Is it verifiably scarce because the forks seems like, oh, I'm just going to make another 20 million Bitcoin. They'll just be slightly different. Like, is it really verifiably scarce? The Bitcoin protocol itself will only ever have 21 million Bitcoins. And 4 million of them are already lost forever. We don't know how many are lost, right? And forks and airdrops have actually become, I think, less of a part of the conversation in the community. But Bitcoin Cash is still a thing. It is.

But it's also looking to become and kind of solve other challenges that Bitcoin has. And over time, we don't know who will be the winner. Here's another question. This shit started 10 years ago. No one is walking into Starbucks and buying a coffee on the blockchain. A, there's no reason to. It's $3. Your credit card's in Apple Pay. Who cares? But B, even if they wanted to, it's so cumbersome that people behind them on the line would be like, wait, what are you doing? I'm trying to get to

work. So there's a couple of reports now. In other words, why is it like this? Well, so I think that there's this narrative that people are really stuck on that somehow adoption equates to being able to use Bitcoin to buy something. Well, what does adoption mean then? I think adoption means how much capital is flowing into the space, what the technological innovations are around cryptography and the use of blockchain technology, human capital, job creation. I mean, this is a flourishing industry. And, you know, I think investors need to be looking at this in the context of building out a portfolio. Adoption does not mean you can buy a cup of coffee with it, right? Because as you said, the financial system we have today, it works, right? You have credit cards, you have access to lending. Yeah, right.

I'm just saying it works. It's good enough for everyone. Nobody's complaining about the hassle of swiping a phone in front of a scanner. Sure. But I think if you look at even where Bitcoin is starting to take share of other markets, whether it's gold or that store of value market, or even starting to look at Bitcoin as a value transfer mechanism, moving money around the world, cross-border payments, et cetera. We're in the early innings of this. So the impatience of what adoption is and what adoption

looks like, I think people really need to recalibrate that. When you think about traditional Wall Street institutions, who are the ones? So I know like Fidelity was very fashion forward with this stuff. I know Rick Edelman is really excited about blockchain. Who are the other financial institutions that you feel are taking the lead and are going to really make Bitcoin a regular part of investors' asset allocation or their world? So first and foremost… Besides you, of course. So first and foremost, besides you, of course, you cannot name a investment firm, insurance company, credit card firm, etc. That does not already have meaningful work going on in the broad digital currency. Berkshire Hathaway does not have any blockchain projects underway.

OK, fair. I'll give you the Berkshire Hathaway one. Besides them, maybe you're right. So you mentioned Fidelity. That's super spot on, right? They have a whole unit devoted to this and have started Bitcoin custody and started trading for some clients. You got to look at some firms like CME Group, who's launched futures.

ICE, the parent company in your stock exchange, has launched back. They have their own futures product and are working on some commercial applications. You got to look at Robinhood. You got to look at Square. You got to look at companies like TD Ameritrade who have whole digital assets. Soon to be Schwab. Will Schwab be interested in TD's legacy Bitcoin stuff? class is not going away. Investors want access to it. And if the legacy institutions want to

remain competitive, they're going to have to open the door to this asset class for their clients. I want to talk lastly, this thing that you told me about the Schwab survey. Yeah. So I'm 42 years old. Michael is in his thirties. What are you like 22? Stop. Okay. But, but, and then like then I think about the traditional wealth management client is like 65. I'm just making up a number. But as you go down that scale, there's more and more interest in digital assets as an investment.

And so what did you tell me about that survey? Because I thought that was remarkable. Okay. So Charles Schwab, about two months ago, late 2019, put out a survey that looked at what were the top 10 equity holdings of three different segments of their clients, right? They looked at baby boomers, Gen Xers, and then they looked at millennials. And you saw the usual suspects of widely held securities, right? You saw Apple, you saw Netflix, you saw Google. Across all three. Across all three. Right. But where you saw really an outlier and really strong evidence of kind of where the puck is going and where people need to be skating to is on the millennial column.

The fifth most held security by millennials at Schwab, according to the survey, was the Grayscale Bitcoin Trust, GBTC. Are you surprised by that? That's not Robinhood. That's Schwab. So you have to think about what you as an advisor or what advisors generally are doing about this generational wealth answer. Yeah, you're right. You can't be like, no, I don't talk about it. It's nonsense. Absolutely not. And if you're going to continue to advise on those assets as they move down to your client's children. You need to be thinking

about what assets resonate with them, what do they want to invest in. And I don't foresee it being things like gold. I would much sooner believe that it's going to be things like Bitcoin and digital currencies, because this is the era that those investors grew up in. And it's becoming a meaningful part of the financial system. Michael, thank you so much for coming by to explain this stuff to us. How do you want people to follow like your ongoing messaging or thoughts on the industry? Like Twitter? Yeah, Twitter. So Twitter is...

What's your handle? My handle is at sunandshine, at my last name. And you can certainly follow... We're going to link to that below. How do people get more information about Grayscale, including disclaimers, risk disclosures? How do we find that? So come to our website, grayscale.co. Follow us on Twitter at Grayscale Invest.

And you can sign up to get our news and announcements and join, see a lot of our content and follow along. Okay. So if Bitcoin either crashes or doubles, you'll come back? I'm back anytime you want. Okay. We love the action. We watch it.

We think it's great. Thank you so much. Guys, follow Michael. Check out Grayscale if you're curious about how their products work. And let us know what you think. What are your thoughts? Bitcoin.

Will it ever be an asset class in the eyes of financial advisors? Go ahead and give us a like if you like what we're talking about. Please feel free to subscribe if you're not already, and we'll talk to you soon. Okay. Hey, it's downtown Josh Brown. Welcome to an all new What Are Your Thoughts? Michael doesn't know what I'm going to ask him. I don't know what he's going to ask me. Stick around. Let's see what's happening. Okay, first things first, Mike.

I want to start with an apology. Last What Are Your Thoughts two weeks ago, I called for – I don't think I called for a correction. I was basically like I want one. You did not call for it. I didn't say I think it's happening. You did not predict it. No, no, no. But I was like I think it would be good.

And then like it started an hour later. And it's just been relentless ever since. So I feel like I shouldn't – not that the world revolves around me and my stupid opinions. But I feel like – I agree. Maybe I shouldn't be saying things like that. I want to go through some of the superlatives really quickly with you. This is from Stephen Suttmeier at Bank of America Merrill Lynch. It was the second largest consecutive seven-day drop since 1950. The sixth largest consecutive seven-day drop going back to

1928. I mean, these were extraordinary numbers. Last week, the S&P 500 went down 11.5%. These were extraordinary numbers. Last week, the S&P 500 went down 11.5%. 12th largest weekly decline back to 1928. And if we exclude the depression in the 30s and early 40s, it was the fourth largest single week sell-off ever, led only by October of 08, which is like post Lehman. My favorite was from Krensky, John Krensky. Yeah.

In 10 days, stocks went from a 52-week high to a 52-week low, which has never happened before. What index is he looking at, though? So I forget. He was looking at an index. I think it was the Dow, the industrials, the transports, and the railroads combined. There's something along those lines. Utilities, railroads, and industrials. Something like that.

It's the Dow composite. So a 52-week high to a 52-week low in 10 days. Unbelievable. It's ridiculous. Never happened? And it's not like it was a flat market to go from a high to a low. It was a very, very wide low to high 52-week situation. Another interesting thing about this was that this all happened in the context of a rising market.

Just defined simply by the 200-day stock being above that. Usually, these crazy washout moves happen naturally below. You know what's really funny? I think you did a post about how stocks don't crash from all-time highs. Well, in 2018, I did that because that was so unusual. In December 2018, that happened also. You might have to revise that post. Sorry.

In December 2018, we sold off 10% in nine days, which would never happen, especially from an all-time high. And we saw something similar. All right. Right. So we were at an all-time high in September of 18. This was literally making an all-time high on a Wednesday and by the following Monday being down 7% and then following all the way through being down 13% at the low. I mean it's pretty extraordinary. All right.

So let's get on with it. I guess my comment or question for you would be, why are we still always surprised when unprecedented things happen? We only have 200 years of legitimate stock market data. And arguably, the world that we live in now looks nothing like it did 100 years years ago, even. Well, what do you mean? Why are we surprised? We were supposed to be like unprecedented things happen every day. Yeah. And they're always, they're always like unexpected. Right. So without a doubt, this is very unprecedented. Yes. But it's like, that's what it is. So, and that's why they call it risk.

All right. Wait. So was that a question? Did you have a question for me or is it my turn? No, I just wanted to do a soliloquy. Okay. It's your turn. All right. So last week, there's two companies by the name of Zoom. One is ZOOM. It's a Chinese micro cap.

Yeah. It's like less than $20 million company. The other is ZM, which is the video conferencing company. And people were flocking to ZM rightfully because if people are staying home to- Full disclosure, I own a little bit of ZM. Not to brag. So if people are staying home because of the virus, then it makes sense that the stock is going to do-

If business travel is going to be curtailed- This business will- This is how people will do meetings. All right. So what happened was ZM did do well, but Z-O-O-M, it's such a thinly traded company, went up like 50% in a day. Now I want to ask you this, obviously that's silly and whatever, LOL, but do you think that there are genius investors who bought it because they know how dumb people are? Yes. That's actually, that's exactly what I think. Anytime there's like a biotech where they announce a cure for something or whatever, people find a similar symbol in a penny stock and they just say, what the hell? Let's see how dumb people or it's enough people playing that greater fool

game where there really aren't any fools. It's just everyone in there thinks they're going to outsmart the next person who comes along. I don't know, but I think that's exactly what it is. I want one more comment just because like it's whenever you see stuff, it's always like people, LOL, EMH, right? People laugh at the efficient market hypothesis. Not every time people are stupid does the thesis get like disproven. Oh, there's no such thing as the efficient market because 12 people bought a penny stock by accident? Right, right.

Yeah, it's stupid. That's even dumber. All right. What is this bullshit with base case, bull case, bear case? I'm seeing more and more of this. I mean, it's always been around, but when I read sell side strategists

and their targets for the year, and even on individual stocks, this is now the base case that every analyst gets three swings of the bat. There used to be like, here's our target. Now it's like, oh, well in our base case, and it's something in the middle, our bear case is lower, our bull case is higher. Now you get three guesses instead of one? I much prefer. You agree with me? You see this? No, I don't agree with you.

Why? You don't see this happening? No, I prefer the best, the best, best, and worst to just a price target. Okay. What if I give you the bear case, the extreme bear case? Like, where does it stop? Can I predict everything? What do you mean?

Can I have seven outcomes? You can do whatever you want. But I think that it's better to say, okay, if things get catastrophically bad, that's what worst case means. There's no second worst case. Worst case. Here's worst case. Here's what ordinarily happens. And this is the best case.

I think that that's a much more reasonable way to do things. I've actually seen like bear case, base bull case nirvana case like i i'm telling you it's it's creep okay i don't see that maybe well you're reading too many sell side research well that's without a doubt uh all right was that the bottom no i'm gonna say we have to retest i don't know why i just think the headlines are gonnaest. I don't know why. I just think the headlines are going to get worse. I don't know why. Well, I'm just telling you, like, I think the headlines will get worse. As we're taping this, they're closing the high school in the Bronx.

They're definitely going to get worse. I guess the question is, will they be worse than expected? I don't know. So I don't know what's expected. I don't know what's expected. So here's my take, now that you asked. I think the easy balance has been made last week. 95, almost 95% of stocks were at a 10 day low, had to bounce 95% of stocks were at a 10 day low. Again, that's very short term. So, you know, you're going to get

these like wild bounces. I don't, I think I'm going to abstain whether that was the bottom or not. I don't really, the technicians that I listen to are saying it was a bottom. Thanks. We went up 1,300 points yesterday. But probably not the bottom. And almost all of them agree. Maybe this is why they'll be wrong. Almost all of them seem to agree that we were so oversold that there had to be a bounce.

Right. oversold, that there had to be a bounce. But in past situations where you were that oversold, there was usually like an undercurrent to the market that was very unhealthy. And so that it doesn't just clear itself up that quick. You know what you see often? It's weird. You see people saying, oh, everyone thinks that was the bottom. Oh, everyone thinks that we're going to retest. Well, that's just people trying to be clever. JC was saying, are you still waiting for the retest of the March 09 low? But I guess like are we talking about – it's not the bottom of a bear market even. We only went down 13%. We've done that recently. So Mark Minervini did a poll and he's a trader. So I would assume that his audience are traders. Do you think the market bottomed? Okay. What do you think the respondents said?

Yes or no? I think almost everyone said no. So it was 30-70, 30 yes, 70% no. Yeah, that's about what I would say. That's what I would guess is how people feel. But in December 2018, the market was up 5% on the bottom, and that was it. Never looked back.

You know what, though? Minervini has day traders following him. Right. Futurist people, macro people. right futurist people macro people he doesn't have investors he doesn't have corporate ceos it's a total the audience that would have the bullish answer is not really in his follower base unless he has a million he doesn't have a million followers like i don't think the sample size is big enough well it's definitely biased to traders yeah i said that right so the traders bias is always there's going to be another wiggle because that's how they make money. So anyway, that's what I think. Speaking of,

maybe this is a little bit of a thought exercise. You rub a lamp, you find a lamp in a treasure, in a treasure cave. Hold on. I'm taking notes. Go on. Okay. Yeah, this is science. You find a lamp. You rub it. A genie comes out and says, okay, here's the deal. I can either tell you every time the market is topping in real time or every time the market is bottoming in real time. Is this a taxable account? Hold on. But the catch is you can't trade on it. It's just like comfort food knowing we're about to top or we're about to bottom. But you must remain fully invested the entire time.

Which would you rather have the knowledge of? Bottom, not even close. Why? I'm on the other side. Why would you rather know it's the bottom? Can't do anything. All right, listen to me. You don't get scared when the market's rising.

Some people do. I mean, really? Yeah, because- Versus when the market is falling? Pessimists do. I would rather know. Let's say, okay, how much lead time do you have? No, in real time.

Oh. They're not going to tell you- All right, still bottom. It's going to be the bottom. They're going to say this is the bottom. It won't get any worse. And you can't trade on it. Yeah, I don't think that's useful information at all.

I still want the bottom. I'm a top in this situation because I want to know as things are peaking, if somebody says to me, Josh, this is as good as it's going to get, brace yourself. I would like on the roller coaster. Okay. When you hear the thing clicking and you know, you're getting to the top, you want to know right before the drop.

So I, you do use Venmo. Yeah, my wife does. So I was Venmoing somebody the other day and I always go private and I was, it just caught my eye. I guess I never really thought about this. Is it like a social network? Why do people do their payments? Why do people make their payments to friends public? I have no idea. It's a stupid thing I've ever seen. It feels a little weird. I think there's a social component to it for people much younger than us. Okay.

I think when seven 16-year-olds all buy tickets for Lollapalooza, they're kind of like celebrating the fact that they're all doing it. Okay. I don't think it really applies to like me making a Little League payment for my kids' registration. No one is going to be like, cool. So I think that's what that's about. I default to private. It doesn't matter what I'm paying for.

It's always something stupid like concert tickets or whatever. All right. I want to ask you like my last topic. Are we learning anything useful? So you know how like when there's a crisis, all of a sudden you find yourself like reading up on things that you never really were even curious about before. So I'm reading all the stuff about like viruses and how to protect yourself and market reactions to prior outbreaks. And I guess everyone's doing the same thing. Is this going to come in handy in five years or in 10 years?

Or are we going to forget everything and just have like this one opinion about how things will turn out the next time because of however this turns out? Like what are your thoughts about that kind of like research on the fly because everyone's talking about some new topic? It's a big question. Right. I mean you must be reading as much as I am about. No, I'm not.

I don't delve deep into the transmission mechanisms. You don't become a 30-second expert like I do? No. It's not that I don't care, but it's just I don't want to read about it. But you have read a lot about Spanish flu. I've read about – yeah, as it relates to the market, but I'm not reading about the science of it because it does it's it's not because you're not going to be able to help anybody with anything that you learn you're not a doctor it's the foreign language to me i don't know it's

just i that's not my my knee-jerk reaction is not to learn everything i need to know about it obviously people have different personalities that's not mine um i noticed that a lot of people are generation older than me oh wow fed cut by 50 basis points. Oh, you got everything I said. Stocks are rallying. We don't have to. Bottom. We don't have to retest. Bottom.

I guess like what I'm saying is that a lot of people a little bit older than me. Wait, hold on. Can we address this? The Fed just cut rates by 50 basis points. Yeah. Are you kidding me? Everyone thought they would. Every single person you know thought they would.

It's not a surprise at all. The timing might be a surprise, but they said there's going to be a meeting between all the heads of central banks today. What did you think they were going to do? Put out an album? This is what central banks do. All right, let us know what your thoughts are.

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