The Compound and Friends - The Bull Market in Electricity

Episode Date: August 29, 2025

On episode 206 of The Compound and Friends, ⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠Downtown Josh Brown⁠⁠⁠⁠⁠⁠⁠⁠⁠ are joined by Jan Van Eck to discuss: Nvidia earnings, AI replacing jobs, future energy demands, why the national debt matters, the case for gold, private equity returns, and much more! This episode is sponsored by Public and Vanguard. Fund your account in five minutes or less by visiting: http://public.com/compound Learn more about Vanguard by visiting: https://www.vanguard.com/audio Sign up for The Compound Newsletter and never miss out: ⁠⁠⁠⁠⁠⁠⁠⁠⁠thecompoundnews.com/subscribe⁠⁠⁠⁠⁠⁠⁠⁠⁠ Instagram: ⁠⁠⁠⁠⁠⁠⁠⁠⁠instagram.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠ Twitter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠twitter.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠ LinkedIn: ⁠⁠⁠⁠⁠⁠⁠⁠⁠linkedin.com/company/the-compound-media/⁠⁠⁠⁠⁠⁠⁠⁠⁠ TikTok: ⁠⁠⁠⁠⁠⁠⁠⁠⁠tiktok.com/@thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠ Public Disclosure: All investing involves the risk of loss, including loss of principal. Brokerage services for US-listed, registered securities, options and bonds in a self-directed account are offered by Public Investing, Inc., member FINRA & SIPC. Public Investing offers a High-Yield Cash Account where funds from this account are automatically deposited into partner banks where they earn interest and are eligible for FDIC insurance; Public Investing is not a bank. Cryptocurrency trading services are offered by Bakkt Crypto Solutions, LLC (NMLS ID 1890144), which is licensed to engage in virtual currency business activity by the NYSDFS. Cryptocurrency is highly speculative, involves a high degree of risk, and has the potential for loss of the entire amount of an investment. Cryptocurrency holdings are not protected by the FDIC or SIPC. Alpha is an experimental AI tool powered by GPT-4. Its output may be inaccurate and is not investment advice. Public makes no guarantees about its accuracy or reliability—verify independently before use. *Rate as of 6/24/25. APY is variable and subject to change. Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. 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/ Learn more about your ad choices. Visit megaphone.fm/adchoices

How's your summer? Oh, great. Doesn't he look super relaxed right now? He does, right? I love the coat. You look good. Look at the color. I'm sporting.

You look great. It's amazing. Don't I look Hamptons? It's a shame we can't get your legs into the shot. Do you spend time at east? Oh, never. Sorry, twice in the last 30 years. Josh, where do you summer?

I summer in South Merrick. Endpoint lookout And Atlantic Beach I got my spots, bro. I definitely do. Yeah, and you're excited for future? Very. So this is a

semi-conductor society. So supposedly this is for people that believe the semis are structural, not cyclical anymore. That's your style hat, the dad hat. That's a dad hat. That's definitely yours. Yeah.

Hey, Nicole, does this jacket make me look like an asshole or is it just my face? I got a couple of looks. I got a couple of looks today. Fat guy. Why are you wearing it? It looks so good in your shirt. It looks a little little.

No, it fits. It fits. You look good. All right. Well, that's not a summer cold. This looks like heavy. No, I know, but it was like a little bit chilly this morning. It was chilly.

I went for an early morning walk. It was cold. We'll do it in video today. Van Nex celebrate 70 years. Unbelievable. One, two, three, four, five, six, seven, eight, nine, ten. I was in Newport over earlier in the week. Yeah, first time.

Rhode Island. Rhode Island. Yeah. And we did the breakers, and it was unbelievable. Holy mackle. You ever been? People say it was so crowded. Not really.

No. No. It was spectacular. You've never been to Newport, Rhode Island? No, I've been, but not for enjoyment. So they built the house in 18, I think 1896 and died like a year later for stroke. 1896? Wait, whose house is it?

Vanderbilt. Oh, that was his. Yeah. Because I was going to say, that's Robert Barron, right? Newport up to the 1920s. I think Sailor owns it now. Oh, man. I know where this is going.

No, that's it. It's a spectacular house. It was really cool. It's a hotel room. It is owned by, like, the Preservation Society. So I think they own a lot of the mansions. Yeah. That are on the coast.

Well, you can't afford to keep these things up. Well, that's why they sold it. They couldn't afford the taxes. Yeah, they never build these things today. Yeah. Well, they do they make mansions of the day. That's what I call it. I mean, they, I think they were like palaces.

Yeah. Because we have a bunch on the gold coast of Long Island. Yeah. And most of them are now, nobody's living in them. Right. Just like museums. So look at the gate. You can't even see Kobe.

Oh, it's nuts. Look at my, that's my eight-year-old son. You can't even say it. The scale of those things is crazy. Yeah, it was really, it is a palace. Yeah. Do you watch Go to the Age? I did not watch the average.

In the first season, they go to Newport. I don't know if they did. And I didn't get past season. So there's a scene that takes place. I don't know if it's multiple scenes or the whole season, but there was a scene where they, like, in the house, they have an HBO card. There was a dancing scene in the library or whatever.

Yeah. That's a good show. I should have kept, uh, I should have kept going with it. I just didn't. Yeah. And you guys are, uh, you are not like in the party face of the ETF market, right?

Like, you saw the article this week from Bloomberg. There's more ETS and stocks. Yeah. Right. You guys aren't like throwing shit against the wall. I don't think so, but I mean, we're not doing, we've never done leverage or inverse, right? We don't do single stock.

We don't do some of that. I mean, maybe we're too stodgy. You know, we just kind of look at the market, look at industries. Kaisu, how come no ETF issuers ever seem to do any M&A? Doesn't it seem like there's very little? Because why, we've done some. Why buy when you could build? So SMH, some little history.

That was a Merrill product. Right. I knew that. And we converted them. When we did an overnight trade, people had to opt in. Okay. So it wasn't a default because they were trusts, and then we were going to start charging a management fee. But that was buying just a single fund?

Well, we bought the whole range. So we wanted it for OIH because that was the missing thing in our suite, and we got SMH. What year was that? And SMH is so much more important. Something like that? SMH is so much more important than OIH. For us? Yeah.

But you know what? You also, you don't see any established brands, and you guys are an established brand. for the most part, getting into the levered inverse game. Direction is the big one, but they started there. Right, right, right, right. But you don't see you doing it. You don't see a lot of the other prime time players doing it because you have, you know. I think what I'm trying to ask you is, it's surprising to me.

Every time I look at, like, the list of ETF issuers, it gets longer. And you would not think that an industry that's as mature as the ETF industry is now, it's 30 years old industry, you would not think that there would continue to be new companies, new players at the rate that there are, you would think that it would be consolidating by now. And yet, it's not. And I think maybe that's because the cost to issue a new fund is dropped. The technology and lift to manage a fund ongoing is easier.

Yeah. And so the spaghetti cannon is out. But also, like, new companies just come along, create one hit. And then that's it. They're a company. They exist. Nobody buys them. Yeah.

Yeah, but you know why they don't buy them. Because- Does anyone pitch you? Like, to the best. bankers come to you and say you should take a look at these guys or no more i mean you kind of know the industry anyway and no okay it wouldn't be necessary because you know everybody yeah okay and and the fees aren't high everyone no go ahead what we're talking about no where did the bankers spend the financial investment banker spend all their time private equity right like et ferns like

there's wisdom tree where there's one public company to cover yeah the margin stink it's not a great i don't even know what the multiple would be for an etf issuer company to get bought would it just, would it be like the AUM and then whatever intellectual property and it would be like a multiple of the cash flow? Yeah. Okay. I'm probably a loan one, right? Like, I mean, like everything, they go through cycles.

So when there was a shortage of property, there was like 30 ETF issues when we started 19 years ago. And now there's like hundreds, 300, 400. I don't even know. It's wild. So there used to be a big premium because everyone wanted to get in. But now the guys have gotten in and it's kind of normal. I remember, yeah, I remember like all the rumors like like so. so is going to buy Wisdom Tree, this big bank is going to buy this issue,

where I don't even hear any of that anymore. Yeah. Because I guess, like, anyone that wanted to do that has already done it. Well, the platforms that with distribution, Schwab, Fidelity, right? They already have all their own families. So, and then J.P. Morgan got in, the people really on the outside who wanted to get in or in. J.P. Morgan succeeded bigly. I remember when they first, like, came to market.

And I was like, what do they do with these, like, ultra-short duration bonds and ETFs? And now they're gigantic. Jepi was the killer. Huge. they helped, you know, found a category, which is what you really wanted to do as an ETF issue or, you know, credit to them. What is that category called, like JEPI?

Covered call? Yeah. Or it's, they call it an income strategy. Yeah. Yep. Yeah. And then those defined outcome, but those are different, yeah. Well, it worked.

So. I saw, we were with, uh, oh my, we were with Bruce Bond when he built those things or like when like he announced them to the public. Yeah. And I said to Ben, like, these are going to be massive. Yep. People have started. Okay. Okay. We good?

All right. Let's get it on. Three claps. All right. What episode is this, John? Come on a Friends. Episode two, zero six. Wow. Whoa, whoa, whoa. Stop the clock. Here's a word from our sponsor. Today's show is sponsored by Public. Public is the investing platform for those who take it seriously. You could build a multi-asset portfolio of stocks, bonds, options,

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murky, and much bigger than the equity market. All that said, Lots of big firms throw a couple fleshy funds your way and call it a day. But not Vanguard. Vanguard bonds are institutional quality. That means top grade products across the board of over 80 bond funds. And when we say they're institutional quality, that's not just a catchy phrase. It's a commitment to your clients. Behind the scenes, the lineup is actively managed by a 200-person global squad of sector specialists, analysts, and traders. Because let's be real.

The bond market's way too complex for one-star manager to succeed over time, so Vanguard doesn't really rely on one-star manager. They've built a deep bench of pros who know this space inside and out. So if you're looking to give your clients consistent results year-in and year-out, go see the record for yourself at vanguard.com slash audio. That's vanguard.com slash audio. All investing is subject to risk Vanguard Marketing Corporation distributor. Welcome to The Compound and Friends. All opinions expressed by Josh Brown, Michael Batnick, and their castmates are solely their own opinions and do not reflect the opinion of Riddholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions.

Clients of Riddholt's wealth management may maintain positions in the securities discussed in this podcast. Episode 206, ladies and gentlemen, you are now rocking with the best investing podcast in the entire world. Guys don't seem that excited. Something?

All right. Oh, my God, this is going to be a great show. We have returning champion with us today, somebody who I think has just been incredible on this show

and everywhere else he appears. His name is Jan Vanek. Jan Vanek is the CEO of Vanek, a New York headquartered mutual fund at ETF company. He joined the firm in 1992 and its executive management team in 1998. Vanek runs a number of thematic ETFs, strategies, mutual funds, and alternatives. And he's also a pretty, I want to ask you about this because this is a little bit under the radar. You're doing a quarterly podcast and I don't know about it?

Yeah. All right. Well, you guys were, you guys were. kind enough to have me on in 202, I think. And I sort of would do decks, but not like your guests or like deck pros, right? Yeah. And anyway, I did an interview and I said, you know, it's good to put your thoughts on the record, right? And so I sort of do this on a quarterly basis. And it's, yeah, it's worked out pretty well. This is the thoughtful money pod, which is Adam Taggart's podcast. Yeah. And you have a space to jump on there every quarter? Yep. Okay. And lots of people

are watching these things on YouTube, it looks like. Surprising number, right? Yeah, and those are booking numbers. Quarterly, you got to do daily. This way you put out daily podcasts. You're so on the record, nobody knows what you say. That's what we do. Everybody forgets what you said. You do a daily podcast and you change your mind every day. All right, Vanek celebrated 70 years this week, which is pretty incredible. Let me read this. Amid the post-World War II recovery in 1955, John C. Vanek founded the firm with bold idea. U.S. investors should have access to opportunities beyond its borders. He launched one of the first U.S. mutual funds to focus on international opportunities, marking the beginning

of a firm shaped by conviction, not convention. Here's your quote. My father believed that investors deserved more than what the mainstream was offering. He built this firm on the idea that the world is constantly changing and that by understanding those shifts early, you could create real opportunity for clients. That belief still guides us today. So first of all, congrats on 70 years. It's pretty epic. Yeah. I think, you guys have lived up to that. You guys continue to come out with the latest, the newest thing. It's not throwing stuff at the wall. It's you deciding this is a new category that investors should pay attention to and then acting on it. How many funds do you now, how many ETFs do you

now have in the suite? 70. Is it that many? Yeah. Okay. All right. And I would say Josh, if I could, like, you know, the, but what dad was famous for is starring a gold fund in 1968. So we really took that international equity fund, and he said inflation is going to be a problem. And there's two things about that. Number one, it's really our investment research outlook. Like we look at these macro trends and then what's an investable way? And instead of putting it all in one macro fund, we have a dialogue like this. We say, well, this is what we think.

We think you should add this to your portfolio. It'll reduce your risk or add your return. And actually, I was just realizing that that was one of the first kind of really specialized funds. Right. back then, it was all general equities, diversified. And this was like your first thematic fund in a way. And the gold fund still exists? Gold fund very much still exists.

And that's why we started GDX. It's our first ETF. Oh, that was that right? The gold miners was the first. We were in gold miners, right? We were like, hey, there's no gold miners, ETF. Let's do that. By the way, it's been a minute.

GDX, been working big time. It has been a minute, right? Yeah, that thing's going vertical. It's exploded. As one of my colleagues said, it's now a momentum trade. Yeah, good. international stocks are back in a major way this year. It's something that not a lot of people were expecting.

Of course, they never do. Are you guys seeing flows to areas of your portfolio that had over the last few years kind of just been ignored? A little bit. But, I mean, still, resources, no one's even gold. I mean, barely. Like, we got $4 billion in Redemptions and GDX in the first quarter, which is a lot for that fund.

And I think that was just people covering their shorts. They're not getting long. You know, I don't know. So we still see very little life in the gold market. But that's how a bull market is born, right? Like, not to use the John Templeton quote, but there is still like, you're not going to fool me again. Yeah. Right?

No, I think it's a great, it's a great signal that this is going to be a long cycle. Yeah. That's what we think. Do you ever think about like what your dad have thought of things like Bitcoin or, you know, some of the innovations that you guys have done in different areas of the market? Is that like a guiding thing for you? Yeah, I mean, I think he was a historian, and I know you guys are historians, but what does he take from that?

Just that the world is changing, and you've got to be open to how it's going to change and that it can change super quickly, right? And that's, he would have, he would have been all over Bitcoin. I mean, at least researching it. You know, he was a little bit more wonky. He was more that kind of economist than the business guy. It's an interesting concept to be a historian or to be very aware of history, but then simultaneously not allow yourself to be trapped in it.

So if you really pay attention to history, what you see is that everything changes. But so many people who are pay attention to history in the markets, they get stuck. They get stuck. They revert back to these analogs that no longer make sense. And they want to see mean reversion and they want to see history rhyme or repeat. And it doesn't quite work out that way. And they almost get like angry about it. That's happening today.

History is being disrupted by Nvidia. 100%. Right? All of the things that we thought we knew. about the laws and how big things can get and how quickly they could grow, tear it up? And our economy is just so different. Like we talked about 100 years ago, we're still kind of an agricultural economy. And then during Gilded Age, it started to become more industrialized.

Today, it's like you guys talk about it. It's a wealth economy. Yeah. Right? I don't even have to describe our economy anymore. There's so much money, right, that you think people get richer or our interest rates go up. I do. No, I know.

I know. I know. But that's never been like that in. U.S. economic history. No, it's this bizarre thing, and it almost, it increasingly feels to me that you basically have to join the capital class, like, to survive. It's becoming more and more like that, even if that just means through a 401K, just something at a bare minimum.

This idea that you can, like, live outside of the financial system and not put money at risk, I really think it's, like, impossible to live that way now. And I think there's a growing awareness. of it. I think everyone now fully appreciates that. Yeah. I just don't think it ever reverses. I'm really excited by these MAGA accounts, you know, these $1,000 per person that's going to start next year. I just really worried that people are so financially. The babies, you mean, the baby accounts? Yeah. Yeah. I think it's great idea. People are so financially illiterate. I'm like, what, you know, I talked to that foundation. Like, how are you going to educate people with

so many people just don't even know what to do with investments? Oh, we're here to help. Yeah. So, as I said, we're all on the record. We podcast a lot. And earlier in the week, Josh and I were talking about NVIDIA, how they are the last to report. And I said, I would be surprised if there's any surprises because we heard from all of their customers, all of their suppliers, the stock is down 60 basis points today. So not much of a surprise.

It was a bit of a yawn, but the most impressive yawn you could ever possibly imagine. So, John, let's throw up the first chart of what NVIDIA actually reported on the data sent to revenue, $41 billion, which is ho-hum, up 56% you over year. Have we ever seen a company? I know we haven't. These sort of numbers, this big, this fast, with room to run? With no China revenue, right? No China revenue at the quarter.

Which is like half the AI researchers in the world are in China. Yeah. And they don't even have that in the quarter. Not directly. Not directly. Maybe through Laos. Doesn't this chart look fake? It's real.

but like running a business, not a lot of businesses look like this, just that stair step straight up. So two potential headwinds for Nvidia and one obvious tailwind that might make the headwinds look like a joke. Number one is that the earners per share and the revenue surprises,

the analysts have caught up. John, next chart, please. So the beats are happening on a much smaller basis, obviously, right? The analysts are now not only caught up. Like, they are bullish as all get out. So the surprises are shrinking, both top line and bottom line, while simultaneously the expectations for Nvidia are, again, this is a chart that also looks fake. Next chart, please. They're projected to grow to $50 billion in revenue a quarter

in I think five or six quarters, which is more than double of where they are today. I'm sorry, from 50 to 100. Yeah. It's crazy. This is real. Matt had to double check this to make sure that this wasn't fake. Yeah. $100 billion per quarter. That's in the price. That is in the stock price. That's what people are expecting.

I mean, they announced the $60 billion buyback and I laughed. Like, why bother? Save that for when you miss earnings and then authorize it as a way to save the stock price. Nobody needs it now. I hope they're not actually going to do it. I mean, he's such an impressive CEO. I think his communications are very clear. Like what the market was worried about was the China stuff.

And he said, look, no China revenue in Q2. And my projections, I'm giving you no China revenue. So you can do your own speculative stuff on top of that. But he's giving guidance, but he's not, you know, he's, he's really clearly identifying the risks in the stock. And that's why I think the surprises Michael are down. I think he's going to win. I think he's going to win the China thing with Trump because I think Trump really wants the 15% of taxes on chip sales. Trump is really excited to announce all this money that we're collecting.

from the tariffs, it's like a really big part of his, not just his economic policy, but like his communication strategy. He really enjoys saying, we just collected $11 billion from this country or from the, so I think he wants that 15%. And I think it's an easy leap for somebody to whisper the right thing into his year. And it's probably going to be David Sachs, who's the head of AI policy at the White House. But, like, David Sacks will make the case to him. We want the Chinese using NVIDIA stuff.

Like, a deprecated version, we're not going to give them, you know. Water it down, not the un-Ked stuff. We're not going to give them the Blackwell 300, but, like, let's give them enough so that they don't start standardizing on something else. And I think that'll get through to him. And I think he's going to, I think that's the next kind of. So people like, well, what's going to drive Nvidia higher? Well, when they come out and announce that they can sell. lackwell in China. Then all of a sudden, none of that's in the numbers. That's how you get

the stock of 200. I think there's two big upside surprises from the numbers you showed on the last slide, potentially. One is just government demand from the Middle East. So I was in the Middle East earlier this year. The amount of money that they're putting into data centers, and not surprisingly, if you think about it, right, their cost of energy is cheaper than everywhere in the world, right, than way cheaper than Europe and way cheaper than the U.S. So it makes sense. If you've got to put a huge data center somewhere, put it in the desert, and have cheap energy. So that's one. And then he talks about robotics.

I don't really know what he has in mind. I don't really want to interact with a lot of robots personally. But there's going to be, you know, a lot of tasks, like moving trucks around. Robotics are not in the invidion numbers to the extent that they could be. They're not in at all. Right. So it's a $43 billion quarter and $41 billion is data center or whatever it is, whatever the breakdown is. And then gaming and then...

Gaming's tiny. Other data center connectivity stuff. It's all data centers. Yeah. So, all right. So the headwinds are, we know, the stock is, the company is valued at $4 trillion. The expectations are through the roof. The surprises are coming down.

That's the potential headwinds. However, the tail wins. John Chart 4, they share this. They say, we see $3 to $4 trillion in AI infrastructure spent by the end of the decade, which is like, wait, what? Right now, the big hyperscale is just spending $600 billion. So I guess it's not that, that crazy. Times five.

But, but, but, but, but three to four trillion is a big number. So I thought this is a great answer that he gave in the call. Jen's was asked about this. Like, where does this number come from? Like, how do you get to three to four trillion? That sounds made up. He said, the best way to look at it is we have reasonable forecast from our large customers for next year, a very, very significant forecast. Bullish.

Right? All right. I said, you know, you heard from Amazon and Google, like that we know. and they know because they're backlogged. Okay, so very, very significant forecast. And we still have a lot of businesses that were still winning and a lot of startups that are still being created. Don't forget that the number of startups for Native AI

was $100 billion was funded last year. This year they say it's $180 billion. But here's the Kudegra. If you look at AI Native startups that are generating revenues, last year was $2 billion. This year it's $20 billion. Next year may be 10x higher than that. It's not inconceivable.

Who are these AI-A-Native startups? This is open-AI? I guess all of these companies. Okay. Wild. Can you imagine if this is $200 billion next year? I mean, there's so many models. I can't even keep track of all the open-langode models that you listed out of China.

I mean, there's just so much innovation happening in the space, right? So does students of history get stuck in the dot-com analog? Like, because on the one hand, I'm sympathetic to that school. I thought, how could you not be? Right? Well, we're in the innovation super cycle. That's it. And what I think is that, you know, the market value, what I said coming into this earning season is, okay, everyone's nervous.

The MAG7 is 35% of the S&P or whatever it is. Get your mind around 60%. I mean, it could. If you look at some of the charts that we have, right, these large cap companies, they're not hiring any more workers and their revenue is going up. Their profit, these are going to be insane profit generators. What's going to stop it? Yeah. It's just unbelievable.

Well, it's not going to be regulation. It's not regulation. No. And like this is just Microsoft. I borrowed this slide from KOTU, so credit to them. But I looked at Amazon headcounts, been flat over the last several years as well. They're just not hiring. I talked to, you know, an MBA professor.

Amazon's not hiring any college graduate programmers this year. I mean, you know, I'm assuming that's true. Hiring for kids coming out of college is one of the things we've harped on. on this show repeatedly, it's now noticeable in the data. Look at this. Unemployment rate for college. So this is no high school diploma, no college, a bachelor's degree, and college grads. And none of them look like this.

Yeah. College grads, it's not good. Right. So white color workers, they're white color workers. It's the first thing you automate. And the large caps, my point into the market cycle is it's a mega caps and the large caps that benefit. If you're Van Neck, we don't have that many employees.

We've got four people maybe doing the same. job. You've got thousands at banks, right? So they're just going to, like, it's, it's just crazy. Efficiencies that these large companies with the installed customer base are going to realize. Another thing that is often lost and probably a bit lazy when you're describing Google and Microsoft, you have to unpack them and talk about the other companies underneath. I mean, YouTube would be a top 20 company, right? Yes. They've got so much innovation that they're working on in so many different... How many Fortune 500 companies does Meta set on top of, or Microsoft?

Yeah. Meta has 11 different services or perhaps something of Alphabet has 11 different services that on their own, like have a billion users. Like, this is on that it's unprecedented. We've never had companies like this. AI is another scale technology, right? If you have a little vertical focusing, just like say, like we invest in this, finance AI company that it was going to kill Bloomberg's, right? But their models will never be

as smart as open AI or perplexity because they're not going to have the traffic. So someone who has 100 times the traffic is going to have the smarter models, the better answers, and they're going to suck up all the market share. It's another winner. It's another winner take all world. Exactly. Just like social media, right? Are you worried about what this does to electricity? Because I was listening to a podcast that Patrick O'Shaughnessy had the CEO of a company called BASON. And they were talking about how quickly

the cost of electricity has gone up. And I think this is a very underreported story. I knew nothing about it until I listened to it. We have a chart from you showing the cost of electricity versus CPI. And all of this AI stuff, is this going to push this up even further? I think there are a couple of implications.

This is wild. Yeah, this is great chart for my colleague, Matt Siegel. Shout out. So number one, you know, we talk about, well, those are the macro implications, right? We talk, I don't know if you guys think that inflation is going to 2%. I just don't think that's likely to happen, right? And here's another example of something that's running way ahead of this.

And if electrification is another decade-long trend, there's no way electricity prices are staying flat. Because if you look at these trends, like we're, that's why we're rushing to build nuclear reactors and all that kind of stuff. The other thing about this, though, is it really has psychological impact on people, right? even though inflation wasn't crazy at the end of Biden's administration, a lot of people felt that inflation was super high. Electricity prices are like 2% of the income of wealthy people.

For low-income people, it's like 10 to 20%. Really? Electricity. If you're in Baltimore or New York, it's 10 or 20% of your income. Is your electricity cost? Is your electricity cost? Wow. So it's so that, you know, whatever it is, 300 to 400.

Like in New York State, electricity is going up like 11% this year, 11% last year. We shut down our nuclear reactor. Thank you very much. So our electricity is more expensive in New York. But, yeah, it's – so this is just an interesting story. I think, you know, it's very regressive, right? And so I think it'll have – I don't know about political implications, but it's – It's economically regressive in that it more – it's got a heavier impact on the

on the lower income people. Correct. I was looking at utility stocks. I've been looking at utility stocks all year. This is like a once in a hundred years re-rating for these names. They're trading at some of the highest multiples we've ever seen. And it's not just the unregulated utilities, like the more fun ones. The regulated utilities are going to their state and they're pitching these weight cases and

they're winning them. And the reason they're winning them is because they're saying, guys, we can't, with our current CAP-X, we can't meet the demand. And if there are data centers in their territory, forget about it. It's like off the charts. So I think some of the biggest winners in the market over the last couple of years have been utilities and some of these transmission companies that are the go-between. And do you think there's an end to that in sight?

Or if three to four trillion is right from Nvidia, then these have to keep working. Yeah. I mean, we need more electricity in the U.S. That's not a secret, right? We've been talking about the winners from this sort of second phase of investing in AI and what we've pointed to is nuclear and natural gas because nuclear because we just need it

and people want environmentally clean electricity and then not gas because you can't build a nuclear plant in two months. Why is the energy sector trailing so poorly if this is the story at the utilities? Is it just because oil and electricity have very little to do with each other. Because in that gas component, I would have thought that the demand side would have picked up,

pricing would have been stronger, and those stocks would work. But they're the worst stocks in the market. But the worst. I mean, EQT had a pretty good run for a while. There's a few good ones. But as a sector, XLE. Because there's no supply limitations.

The United States are never going to run out of natural gas. Okay. So that's part of the pricing problem. So it's as simple as that. Yeah. Okay. All right. Got it. But still, like the machine makers, the combine, like, you know, there's a lot of services, construction that still needs to go into building these plans. Do you guys have a utility fund? We don't. Okay. On the drawing board? So in our nuclear fund, not to, you know, sound too promotional. No, no, no. It's okay. It's a mix of miners. It used to be everyone would just play, you know, uranium miners. And we said that's like too, that's too narrow. So we include utilities, you know, utilities oriented towards nuclear.

obviously. And then it was like the equipment suppliers, but now those are the new SMR companies, right? The ACLOs or whatever that went to five, 10 times last year. Yeah. It's kind of richly valued. I mean, I wouldn't sell it. Oclo? No, I mean, just the whole sector. Okay. Is that the biggest market cap in this sector now? Aklo? I don't know. Do you know what that is? I know that's one of the momentum stocks that the kids like. That's the Sam, Sam Altman invested in this mini nuclear reactor thing. Yeah. SMR, I think, is... Is that the other one?

I don't know. I should pay more... I should pay closer attention. Is that fund raising money? Yeah, it's our highest fund. Is that right? Really? Yeah. Oh, wow.

What's the ticker? NLR. NLR. It's up 45% this year. I just think it's... It's like a lot of things in the market. It's just sort of tired now. It's just got to...

Like, the real activity's got to catch up with it. I mean, the bearish case coming into the year was... It takes five years to build these things. And, you know, like alternative energy and everything, people are, like, they were already expensive in December and you're going to get wiped out. And I said, I don't know. I just think it's a global thing. It's bipartisan.

And there's enough news flow happening this year, which is what happened, that the stocks will be supported. But, you know, again, I wouldn't put all my money in now. Trump is pro-nuclear? Oh, my God. Yeah, no, I don't know. Is he? He's incredibly.

I mean, Biden started out, like, full credit. it to Biden. And then Newsom, like Democratic governors, Newsom, Whitmer in Michigan, and then Delaware governor, all supported nuclear projects in their states, like extensions or whatever it was. So it's definitely bipartisan, right? But Trump did this executive order. And now he's like challenging companies. He wants three of these newer reactors up and running by next July 4th. So I don't know anything about this stuff. What is the opposition? Like I know nothing about it. Is it people are afraid that there's going to be like a blowup or something? Fukushima, Three Mile Island,

Chernobyl. Nobody wants that anywhere near them. But aren't there ways to not do that? So NIMBY, right? No one wants it in their neighborhood. No. Right? Well, would you buy a house?

So you know what they're doing? Would you buy a house 10 miles away from a nuclear reactor? I wouldn't. Why can't you stick in the middle of nowhere? Because there's no middle of nowhere. Because then you have to like move the energy? No, that's what's happening. So they're doing it on federal land.

There's one company that's got... Bro, you take flights. There is middle of nowhere. There are literally hundreds of miles. But that doesn't help you. You have to move the electricity. It's to have it fast. Dude, AI, blockchain, something.

Come on. To have it fast, you need either a friendly local regime, like Louisiana, right? Great people. You need federal land where Trump with a, you know, an executive order can do it. So that's what they're doing. And there's one company that's doing private financing. They're doing it underground. They're building a nuclear actor underground.

And they're literally building one, don't happen on the moon. All on the moon. It's great idea. No, but they're. I am all for nuclear on the moon. I have always said this. That's the best place you could put it. That's why I had to mention it because it's a little ridiculous.

But that's why you have to get around NIMBY. You have to get around it. But it's literally moody. The problem with it is you see Fukushima, that was not a nuclear meltdown. It was a tidal wave or a tsunami that created the conditions for a nuclear meltdown. They didn't do anything wrong at the plant. That's not a Chernobyl. It's the Japanese.

They don't f*** up like that. is so old. It's like the iPhone 3. You know what doesn't have tsunamis? The moon. I agree. I've always said this. What do you want to say about U.S. credit and the deficit? So, Yon, let me ask you this.

I know you're a deficit warrior. Steve Eisman was in here a couple months ago saying, ah, it's just virtue signaling from the rich guys. What say you? Did you hear that? Yes, I did. So, look, I think if you look at history, right, the budget deficit in the U.S. has never been.

as large as it was a year or two ago. I mean, it was just ridiculous, especially given that we had low unemployment. Any country in the world could not get away with the budget deficit that we've had. So all I'm saying is it's a risk out there, right, that you really have to watch. And I know people are sick about talking about it. And, you know, I know that Japan has a lot of debt. And throughout my career, everyone was, you know, the JGB trade blew people up, right? It was one of the widow makers out there. I get all that. Timing and markets is impossible. just grant that. All I'm saying is, let's just focus on it. Now, if you're building a portfolio, you wanted to own the hedges, right? So, you know, we've been talking about Bitcoin and gold for a

couple of years. Guess what? Gold is working. Again this year, those hedges against that big risk have really worked out super well. And gold looks like it's about to explode even higher. You think gold is working because of the deficit? I do. You do? Yeah. Okay. What do you think? I have a slightly longer view. Like, I look at, If you look out 10 years, I think that India is going to be the fourth largest consumer, you know, market in the world. So it's going to pass Europe. They love gold for jewelry. The world.

The world wants a hedge against the dollar, right? And so they are just, what's the second best currency in the world? It's gold. It's not the revenue, right? It's not the yen. I just list these and you're like in your mind, no way, right? The euro? No.

So that's why it's been gold. And that, I think, is a multi-year trend. That's not complicated. The dollar's weakening. This is in the basement trade. People are buying Bitcoin and gold for this reason. It's very straightforward. I thought when you said India, you were going to say Duali season.

Because when I was a broker, I used to pitch gold stocks, and we would pitch them around Duali season. And I didn't even know what it was. I was reading it off a script. Yeah. But it's this like Indian gift giving festival and gold is like prominently featured. No, I mean India, just if you think about what the world looks like, it's going to be more fragmented. Yeah.

And that's not a bad thing. it's good that, like, other countries are getting wealthy. All I mean is that the Chinese economy has nothing to do with the dollar, right? They're the Rumenbee and the Indian rupee. They don't want to dollarize economy in any way, right? So all I'm saying is they have their own ecosystems. What's the common, you know, kind of number two currency is going to be gold. What's so funny about that is it's like a complete 360 back to the way it used to be.

Gold was the common currency. 100%. So now they have this belt and road thing, but it was the Silk Road. And it's like everybody could agree what gold was worth. Yeah. So like you had this barter system, but like gold was the medium that everyone just looked at and said, okay, I understand the value of that. And you're suggesting like we're sort of headed back there.

Look, I'm just saying, you know, you can make fun of the deficit watchers like your guest was doing. And I always just, my first counterpoint is that the hedges have worked great in my portfolio. I don't know about his. So that's number one. And then number two, I guess what we look at? We look at the 10 year and we look at the 30 year. And what I like to say is we know the government's going to default on its debt in the next 10 years. And if people look at me, the U.S. is going to default on its debt in the next 10 years.

We are not going to meet our Social Security obligations. In 233, that's less than 10 years from now. Yes, we will. We are going to cut payments down by 20%. That's a selective default on your obligations. Are you adjusting that for V-N-Vidia? How are we- All right. No, no, no.

The trustees say this. Everyone knows that. That's political suicide. Who's going to do that? Well, so I said you have two chances to fix these problems. Sorry, you fix a problem like this the year after a presidential election. We only have two presidential elections between now and 233, right? We just had one, 2025, and then we've got 20-29.

In his third term, you don't think-trop-old. We'll take a look at this. So it has to be bipartisan. Like, I wish he would have dinner with Hakeem Jeffries and say, we just got to solve this problem, right? We can't, we can't cut the benefits to people who are relying on social security. But there's no way one party is going to do it on its own, right? So we're going to default.

Do they convince you now? You're rolling your eyes. I think one of the great things about investing is, to your point, it doesn't really matter because the price is the price. And if you don't understand that gold is being accumulated, just based on its price action, then you don't understand the first thing about investing.

That thing is being bought. Yeah, it's working. Not just the ETF, but gold in general is being bought. I remember three years ago, Costco was putting gold coins into the stores and they couldn't keep them on the shelf. Dude, this is a face blower.

Look at this. Yeah, what are we looking at? This is it. Foreign Central Banks, where did they buy in? They're buying gold. And they own more gold than Treasury. So for the first time since 1996, foreign central banks hold more gold than U.S. Treasuries. This is a wildly big deal, I think.

Yeah. So what the central banks did is sort of like in different phases. First of all, the developed market, central banks said, oh, gold is so old, like we're going to start selling it. So L.I. Europe started selling their gold. And then what's been happening recently is basically the new rich countries, the emerging market countries are buying. So India, China, slowly, even Eastern Europe. So that's basically what you're seeing here. They just want to hedge against the dollar, which makes a lot of sense. What's the Y axis? 35% of their reserves.

So central banks have about, it looks like 30% of their reserves in gold. Yeah. And a declining 25% in U.S. treasuries. And for reference, that number peaked around 2015, 2016, at 30% for treasuries. Can I give you the other side of the argument? Yeah. So the bullish side of the. argument is that we are reducing our budget deficit. And so in the last fiscal year,

six and a half percent of GDP, which I said was crazy from a historical or any other perspective, Besson just yesterday is talking about getting that to five or five and a half percent. So since Trump has been in office, it's been at five and a half percent, tariff revenue. And that's why they keep talking about tariff revenue. So we'll see. They love the tariff revenue. So if you're, if you get down to five or five and a half percent within a year, then you can grow your way out of it. And then it just doesn't matter, right? And so I think...

Is that your base case of what ends up happening? I think we don't know. I'm just saying it's a big force in the markets that we got to watch. And obviously, government debt matters in people's portfolios. And I just think, you know, we think you need to have a hedge. But I don't think I know for sure that there's going to be that. I was making fun of social security. I was kind of using that to make a point.

But there's both sides of the argument. So I a little bit agree with your guess that you can't overly and only obsess about the budget. I would say that the deficit has been a worry since the beginning of time. It's only gone up until the right. So I am not super concerned about it. However, it does seem like the type of thing that even if there's a 0.1% chance of something going wrong, it's like the ultimate something going wrong. Right.

So like, I get it. Well, it's always been the risk has come out of the banking system. It's coming out of Wall Street. Basically, if you look at our financial history, this would be the first time that the risk since pre-Alexander Hamilton came out of Washington, D.C. Right. Right? It's interesting.

Yeah, nobody worries about bank balance sheets anymore. It's like no one worried about housing debt until housing debt blew up, right? Because it never happened before. Do you think we'll see a central bank start to accumulate Bitcoin? Our central bank? Any central bank. There's probably a few that already are. Well, yeah.

I mean, the Middle East countries are mining it. And so they're accumulating it. They're not selling it. But yeah, I think eventually. Yeah, if you're worried about volatility, definitely the answer is to start accumulating Bitcoin. I love it. I love it. Let's talk private equity.

It's been brought to my attention by one of your employees. Give this guy a raise. How do I say his name? Bo, Bo. You call him Bo. Okay. So I did this thing on private equity investing. and I had a little bit of help from Sean and Chart Kid Matt.

We were just basically trying to figure out, like, is it better historically to have invested in private equity funds or just buy the stocks, the publicly traded companies that are the biggest private equity players? And, I mean, it's night and day. Like, if you bought the stocks of Blackstone KKR, etc., at the top 10, whether it's by market cap weight or equal weighted, you turned the, you turned the, $100 into $264 owning the stocks. Whereas if you bought, I mean, this is one index, but the Bloomberg PE index benchmark, which aims to capture the returns of all their funds, you turned $100 into $113. Now, that's in a three-year period. So it's a little unfair.

But just conceptually, I ask the question, why be an LP or an investor in the fund when you could be a GP or a sponsor of the fund by owning shares of the sponsor. So your guy reached out and, uh, I tried to sell your ETF. Yes. No, but that's, listen, man, I want, I want my people, uh, this, this aggressive. He said, hi, Josh, hope all is well. I am Bo by way of introduction.

I've been an avid fan for a while. I listened to your session on the Prof G markets podcast, um, and was struck by the analysis you highlighted between the performance of the stocks of all. alternative asset managers versus the performance of their fund. I recently joined Vanek to lead coverage of our asset manager channel, and I've been highlighting this trend as captured by our GPZ ETF. I didn't know this existed. I went through all this trouble to build, like, my own model using the individual stocks.

But the Vanek Alt asset manager ETF, what a great idea. Isn't it amazing that didn't exist? I mean, it's like four or five months old. Like four or five months ago. I am super bullish on this. Same. You are. I want to buy this. I want to buy this ETF. I own Blackstone. I think I this is. Okay. So here's the issue with that time period, Josh. These companies, alternative asset managers, right, because their performance

fees aren't necessarily that predictable, used to trade it at quite a significant discount to traditional asset managers. I mean, the argument in the old days, right, when hedge funds were all over Wall Street is there's no terminal value to these hedge fund businesses, right? What's his face famous hedge one guy retires, there's no business left. Now there is. Right. So, right. So now they realize, wow, these are, you know, very, you know, they're diversified. They're constantly achieving these returns. You could also argue the alternative credit managers have a competitive moat. Because if you want a billion dollar check for a data center, you're going to Blue Owl or Apollo or Ares. You can't go to some small three billion dollar. There's not a thousand. There's not a thousand players

there. Right. And so, so I think, you know, so that's a. about 45% of the portfolio. So I kind of like that story. What's the other 55? You like the credit, the private credit part of the story better. Since the financial crisis, the government basically said, you know, banks get out of the risky lending business. So now there's risky lending.

Are there any moats in private equity? Because I feel like my inbox is filled with thousands of offers from companies I've never heard of. Yeah, you get the bad ones. I only get the, well, I get the good ones, too. So can I ask you guys a question? So if you look at these unicorns, right, all these private companies, there's about three trillion, you know, rounding up, right, and market cap of these private companies. And you go

to an R.A. and you say, you're missing these out of your portfolio because the stripes and SpaceX do just not going public. They open AI. So let's say they never go public. But you should have some exposure in your market cap weighted portfolio. How do you not open AI? Four hundred billion dollars. Small caps, by the way, are like seven trillion, right? So it's a little wedge in your portfolio. So does that appeal to you? I think to a lot of investors. It depends on if the NASDAQ just went up over the last six months. Wait, are you saying you can get me into Open AI at $25 billion? I'm in.

So what's the answer to that? I'm asking you. Like, honestly, we think about it. So we actually have some private funds. And for that business, I think its mentality is totally different than the rest of our business. ETS are in economies of scale business. All I care about for my hedge fund and my early stage venture fund is total return to LPs. But what you're talking about is very different.

You're talking about like early stage investing versus growth investing. These are very different things. The markets are going to mature, right? NASDAQ marketplace and Carter and all these companies are coming in a big way. Black Rock is going to be in there. So this, I think we are still very, very early on the transformation of private and public. I think we're still very early. So these, these names are going to work.

To buy. Yeah, I think it's a buy. I think the ETF will work. I haven't even looked at the holdings, but just I think the tailwind is probably a five to 10-year tailwind. I don't think this is a, I don't think it's a fad. I think as more advisors start to utilize these tools in their portfolios, some will work, some won't, but they won't just stop for some reason. It's different than when they threw all these hedge funds in our faces 15 years ago. That, because that, I think, suffered from the problem you described.

Like, everybody wanted to be in John Paulson. Everybody wanted to be in Steve Cohen. Everybody wanted to be in like the hot manager. Yeah. That's not evidence-based. You can't, like a financial advisor. This cocktail party, like investing, right? Like a financial advisor who talks to their clients about Vanguard funds is never going to be the same person that's like, I'll do anything to get into 0.72.

Or it's two different people. But this stuff, if there's a way to show people a systematic approach to making loans at a private credit fund, you will have that advisor's attention. and that advisor will not feel like a clown re-explaining that to their end customers. So I think the runway here is like five to ten years. But the open AI, the names that you mentioned, that's venture stuff, right? That's not private equity. Private equity traditionally is you buy a small cap, a microcap, you lever it up, and it works, right?

It's equity and leverage. It works. Advisors are never going to have early access to these names for their customers. If you want to get into Anderlville today, you could do it at a valuation. that, you know, is not what early investors got in it. And it's fine. That's the way the market works. So late stage access is okay to growth companies.

Well, the reality of there being enough great startups in order to satiate the demand of like trillions of dollars. Like, it's just, it's an impossible thing. And I was debating this with somebody who was like, it's not fair. Yeah, I know. Like, not everything gets democratized. because life's not fair. I don't know a better way to answer that, really.

It's unfortunate. I wish everybody could have Open AI. You can't. And if you could, you probably don't want it. If Open AI decides we're going to raise money at a trillion dollars, yes, there's plenty for everyone to go around. That's nonsense. It's not fair.

It's not fair. It's not fair. Okay. The closer you are to these founders, more likelihood you are to have access to invest. True. To invest. So that's ridiculous. No, this is ridiculous.

This is the way the world works. First of all, Howard is obviously concentrated. Yes. The people that have these relationships get access. But also, a lot of the venture investors that are putting money on the line for every open AI, there's a million that go to zero. Correct. Do you want those two?

Most people don't. Exactly. So they're taking the risk and they get the reward and sometimes they eat shit. And that's the way it works. Matter of fact, being a venture investor, it's not been fun for the last three years at all. Yeah, if you were in open AI and some of the big winners, you'd be great. Yeah.

But it's been a desert out there. Yeah. My advice to people who are like on the outside looking in and they're like, why don't I have access to this? The easiest way to have access to the shares of an exciting pre-IPO startup is to go work there. I mean, seriously, go get a job there. You will be in the stock option pool if it's not important to you. Second easiest way, be the college roommate of the founder.

I mean, you've got podcasts, give speeches. It's an amazing thing. That's a really easy way to get access to. But, yeah, you've done a lot of early stage investing. Like, I'm sure, like me, you have a lot of zeros in there. That's just the way it works. Yeah, I haven't done a lot. Yeah.

But Howard, I like I invest with Howard. And, you know, we hired the team out of circle and they've come off a really good start. But, you know, it's a $40 million fund. Right. You know, and you've got to cap these strategies. I mean, we have a hedge fund that's done fantastic. It's like 47% annualized. But you, you know, what do you have a half a billion or a billion dollars in capacity in that?

Everybody can't get in. It's a different business. These early stage companies, they don't need. all the money in the world. That's on how it works. Right. Let's do some crypto stuff. So you were pretty early to crypto amongst the traditional asset managers. You've been very open-minded about it.

You've been bullish about it for a really long time. What do you make of this state of crypto this year? And why is Bitcoin falling? Well, Bitcoin and crypto are totally different things. I mean, Bitcoin's hit all-time high several times this year. I know. Why isn't it? It's corrected recently.

But, Josh, come on. Take the month of August off. I'm teasing you. All right. So that's Bitcoin. So crypto, I think, look, is... Blockchains are great technology. Who cares?

Nobody cares about that. What coin is... I know. I know it's boring and shit. I'll be brief. I'll be brief. Look, it was only in 2023 that blockchains became at all a non-toy. What I mean by that is the costs for a database have to be low and reliable, right? Before 2023, eth fees, eth gas, excuse me, the transaction.

fees. We're all over the place. Right? Bitcoin all over the place. No one's going to build on that. Any CTO is going to like not even talk to you. It's too unreliable. They're not even letting you in the conference room. That changed in 2023. Okay. So now you have Salana, you know, a lot of cheap, reliable blockchains. Now you have stable coins being legalized, right? Every financial institution is going to want to take stable coins from their clients. You're going to have a checking account, savings account. you know, credit card and your bank app, and they're going to want to be able to take stable coins. That's now starting.

Maybe it takes a year, and that'll be built out, right? And so I said that's, I was explaining the other day, ETH is like the Wall Street token, because that's what people are going to build on. It's Ethereum or something, their methodology is ETH virtual machine, right, EVM. So there's some EVM compatible chain. So that's what Wall Street, I think it's going to build on. They're going to standardize on ETH as the way they tokenize all the securities. EVM, right?

So that's why ethos are, like, rather like crazy over the last. It's more than doubled since the bottom of the April. We thought it was Tom Lee. That was a great interview, but it's more than Tom Lee. Look at this. This is back to the price. Nobody cares about these blockchains. So Hogan tweeted this.

Duncan loves when you hold this laptop right in part of the last. Hogan tweeted this. Hogan tweeted this. The one year, two year, three year, five year, and 10 year keager of Bitcoin versus the SEP 500. And for people that don't own Bitcoin, this hurts. And they're mad, and I'd be mad too. This feels unfair.

The coins outperformed, yes. But the level of outperformance on every time frame imaginable off of what people still think is just imaginary, funny, money, nonsense. It's so common sense. It's digital gold, right? Their supply is limited. People have a demand for that kind of stuff. And it has hit escape velocity, like in the mid-teens.

So by 2017, like there was a little change. that anything was going to catch up to this, right? Millions of people had already adopted it. And then if you just say, okay, it becomes half the market value of gold, boom, that's $400,000 in Bitcoin. So, like, it's not like a crazy, like, it's just kind of sense. The concept of a new financial system was just really hard for people to even wrap their heads around.

And the loudest voices, not the best people in many cases. And, you know, the FTX and the rug is like, you can understand what the average person doesn't believe. Now, for people that spend time around this, I think it's more, makes more sense. It's extremely generational, right? A lot of young people. And, yeah, I can't really explain it. I say, don't, if you don't want to ever believe it, don't spend time on it.

And if you're a financial advisor, don't spend time talking to clients about it. I have a joke where somebody starts talking about, but what is the use case? And I always say, this. Picture this. You're in Venezuela. And you lose people that way. But Michael and I were doing a show on Tuesday night, and we looked at a chart of Western Union. And Western Union effectively has vanished.

Its share price is $8. And I said, I think this is the first U.S. company to be literally put out of business by a blockchain technology. I bought some Western Union today. Well done. All right, let me give you my history point here. Yeah. This is why I think the Stablecoin bill was so important. It's the third most important piece of bank legislation in U.S. history.

You've got Alexander Hamilton sets up the credit of the U.S. You got FDR that puts in deposit insurance and saves the banking system. And then Trump. And then you've got stable coins, which enables tech companies to get into the payments business without being a bank. No charter. Everything else in your financial life. You have to touch the bank. You have to go to your checking account and do everything from there.

Not anymore. Right? Remember they made fun of Zuck when he wanted to do Libra that stable? This was bipartisan. It's not getting reversed. It's pretty radical. You think it's going to have that big of an effect? I do.

In taking fees out of the system, speeding up the movement of money. Payment stack is totally going to change. All right. There'll be more Western unions. But what's wrong with Venmo? I keep asking for us. Or Zelle? That's fine.

You're not, Ben is whaling. You don't understand. All right, wait, a slight pivot. When Robin Hood announced they were going to build this thing. ETH is going to be the underlying base but it's like tokenizing securities corporations

who themselves issue stocks did not like it so I was surprised at the negative reaction I think companies were saying like make no mistake whatever Robin Hood is cooking up these are not security

these are not securities that we have issued there was a little bit of like a mini backlash and then Robin Hood quickly stopped talking about it. Yeah. So what was your take on that? Those were private companies and there is that dynamic going on. Okay. Right? Where if you get into this world

of SPV special purpose vehicles right, so SpaceX does rounds of investing and suddenly there's 10 venture capital funds and they're all sponsoring SPVs to invest in different rounds of SpaceX. These companies don't like it. Elon's like, I don't like this nonsense.

I don't even know who owns it. And frankly, if you own SPV, you have no idea, if that VC firm disappears or the Carter blows up or whatever, you have no idea, you have no transparency. So he tries to clean that up, right? And that's what these companies, they want to control their own, you know, cap table, which means they are private. They want to control who's the shareholder, right? Like Rittles, like your company, Van Eck, we want to control who our shareholders are, right? We may not mind having some minority shareholders, but we don't want just anybody. So you think that's going to happen, though? Do you think that'll happen in a more accepted way, not the private startup companies, but maybe public companies, it's similar

in ADR to me, where somebody comes along and says, we're going to create something that is represented by a share in this company, we'll be the ADR sponsor here in this country, the issuers in a foreign country, but if you want to trade the security here, use this. That worked. The ADR market is fairly substantial. Is this like the next evolution where people say, how would you? like to trade a security, but not be in the dollar-based world, be in the stable coin world slash move in and out of these tokenized securities?

It's just a tug of war, and I don't know how it's going to play out, right? Vlad, the CEO of Robin Hood, on our behalf, we all want to be able to trade SpaceX, or open AI. There's huge demand in the wealth channel for this, right? And then there's the founders, and they may like it. They may not like it. In that case, they didn't like it. But, you know, maybe they get comfortable.

And the weaker the founder, meaning if the company is super hot, sure, they can suck up all the shares, right? But if they're kind of meh, then, you know, too bad. Their shares are going to trade. But you know, it's weird. If this becomes like a liquid market, what about like investor protection and disclosures? L.O.S. Stop. It's 2025. What are we talking about here? Nobody cares about that.

Wait until the next market crash and then we'll talk about that. Are there any other charts? Do we want to do this? No, we did it already. We're not going to do the treasury stuff, are we? We did it right. Okay, suffice to say, Jan is super bullish on the digital asset treasuries. How do you really feel, though, honestly?

You think they're good for investors because they're creative and they're giving people a new way to bet? Or... I mean, look, these companies, let's say, they just are public companies or corporations that buy some kind of crypto asset to describe what the dad is, right? And so Michael Saylor has the most famous one. I think it gives some people the ability to buy access to that crypto with an ETF doesn't exist or they just want to own it in that form. So that's a limited use case.

So what? If you manage a convertible bond fund, this has been a whole month for you. Yeah. Seriously. Why? Like buy the bond to then convert. By the micro strategy convertible bonds? Oh, no.

We will in strategy and a whole bunch of our ETFs. We're like, what's going on? that's a, yeah, that's a separate thing. And then the positive spin is for some of these foundations. So a foundation is basically the original founding group of a token, right? And let's say they issue a token to do stock trading or whatever it is, derivatives trading. And suddenly that a lot of people use that platform. Then that token becomes valuable. And there, this weird offshore thing now called a foundation. Most people don't know about these foundations. If the foundation say, okay, you know what? The United States is hospitable to tokens and to

crypto. I'm going to come onshore and I'm going to be like a normal software company. And I'm just going to be like a version of Unix, like an open source software company that specializes in something. That's sort of what Ripple. That's sort of what Ripple was trying to do. And then they got accused, some would say, rightfully, of issuing securities away from the securities laws. And they fought it for, I don't know, 12. 10 years, however long. So these companies will look increasingly more normal. Some will, right?

And the test is, right, to avoid being a security, will all these, will all be securities, is are you centralized or decentralized, right? The good thing about Bitcoin's completely decentralized. There's no one person in charge. Other companies, it'll be a range of solutions. Okay. What do you want to do with the next 70 years at Vanek? Where do you think, where's the firm going?

What are you excited about? A private market investing. Are you kidding me? All right, good. So how are you going to do that? We're looking at it. In an ETF wrapper or no? No, like interval fun maybe or something like that.

Interval fun. Okay. I hear those are hot. So hot right now. So hot right now. All right. Do you have fun on the show today? It was great for here.

All right. Dude, it's so great to see you. And you, of course, will be at Future Proof. Have you been to all of them? Did we ever miss one? How many were there? This are four. A million.

It feels. I don't know. So tired. I'm already tired thinking about it, right? I'm already tired thinking about it, but I also can't wait. This is my third. Okay. Third straight.

There we got. So I'm like, yeah, whatever. Dude, I'm psyched to see you in California. I'm so glad you're going to be there. I want to thank you so much for coming on the show. We really appreciate it. And aside from your secret podcast that we just learned about today, you're active on, I think, your Twitter, LinkedIn? Yeah.

Okay. All right. Awesome. Guys, make sure to follow Jan Vannach, wherever he's saying things, you're probably going to learn something. We always end the show asking people what they're most looking forward to. We'd love to hear if you have something for us. Okay, so college football, USC fan. USC, University of Southern California. Oh, okay. All right. My wife went there. Okay. New York Island is hockey fan. Okay. They're playing each other.

My one shout out, if I could, there's something called, and I'm not really big into health care or anything called a calcium CT test. If you haven't taken it, take it. It's the weirdest thing. It's a $200 test. No one prescribes it ahead of time. It's basically a way to see if calcium is building up in your veins. And it's like there's op-eds about it.

Brad Gersner talks about it. And I'm not a healthcare guy. But why don't people take these tests? It's insane. Really? Where do you got it done? You just asked your GP. And I did it.

Someone told me to do it. And my GP is like, why do you need it? I'm like, because I want to take it. I haven't missed that one. You read about it on Twitter. Just give it. What does it do with the Allerger's or USA? Nothing, but I'm looking forward.

He's looking forward to his next calcium teeth. No, I'm looking forward to other people. What's my best friend of my neighborhood? Like, he didn't take it, and suddenly he took it two weeks ago. It was off the charts bad. What do you do if you're off the charts bad on a calcium test? You change your diet and you take a statin. Okay.

So, wait, literally, USC Islanders, I don't get the connection. There's no connection. I'm looking forward to hockey season. It's like, Knicks, you're looking for... We're excited the same way for the Knicks. You know what I'm excited about, Yon? Speaking of USC, I'm going to see Oasis at the Rose Bowl. Sick, right?

That's awesome. Why do you have to do this? I was supposed to go. And I told him, get me a ticket. And my wife's like... 20 minutes later, he goes, uh-oh, some of my money back. No, it's the next day. I think it was the next day or a week later.

It was very soon after. So you took a friend. Dude, I call Michael. I'm like, I'm so sorry. I'm not allowed to go to his I'm like can you because you brought it on Stub Hub or something

whatever I'm like can you like resell it he's like don't worry about I got it like he didn't make me he didn't make me feel like a loser about it there's a good reason why I can't go I didn't ask permission for no this is so upset that I couldn't go

but I was so upset that I couldn't go all right we're gonna get out of here guys thank you so much for watching thank you for listening we really appreciate a great job this week Duncan John whole crew Happy birthday Duncan Happy birthday. Happy birthday, dude.

What are you looking forward to? Future proof. All right. What did you do for your birthday? Peter Lugar? No, believe you're not. All right, guys, thank you. We'll be back next week.

See you soon. Bye. Thank you.