The Pomp Podcast - SPECIAL EPISODE: Pomp Answers Listeners' Questions

Episode Date: October 18, 2020

This is a special episode of The Pomp Podcast where I answer questions from listeners about everything, including Bitcoin, crypto, finance, investing, asset allocation, technology, and the macro environment. ===================== Nifty Gateway is the premium NFT platform. They release content from the best NFT artists in the world twice weekly, and have featured many world famous artists including Kenny Scharf, Trevor Jones and WhIsBe. NFTs on Nifty Gateway are in extremely high demand. Sign up for an account in advance to participate in the drops, and browse around on the secondary market to find art you like. http://www.niftygateway.com ===================== LVL is a new crypto investing platform that I'm an investor in. They allow anyone to trade an unlimited number of times per month for only $9. If you buy or sell more than $500 in Bitcoin on any exchange, you're spending too much on trading fees. Use LVL to save money and trade as many times you want, but only pay $9/month. https://lvl.co/ ===================== Pomp writes a daily letter to over 80,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at https://www.pompletter.com

This is a special episode of the Pomp Podcast, where I answer questions from listeners about everything, including Bitcoin, crypto, finance, investing, asset allocation, technology, and the macro environment. There's no music. This is the intro. This isn't investment advice. Do your own research. But before we get into this episode, I want to quickly talk about our sponsors.

That's right. We got sponsors on this one. First up is a new one, Nifty Gateway. They're the premium NFT platform. Everyone knows that I came out and explained why I'm so bullish on digital art. Nifty Gateway is the place where you can go buy digital art. They release content from the best artists in the world twice weekly, and it featured many world-famous artists, including Kenny Scharf, Trevor Jones, and Who's Beat.

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Obviously, artists really find it valuable. If you're into digital art or you want to learn more, go to niftygateway.com. Next up is Level, LVL. They're a new crypto investing platform that I'm an investor in. If you buy or sell more than $500 worth of Bitcoin on any exchange in the world, you're likely paying too much in trading fees. Level has a really interesting model. You sign up, you pay $9 a month as a subscription fee,

and you can trade as many times as you want. You can buy as much as you want, you can sell as much as you want, and you only have to pay $9 in fees for that month. And so if you buy and sell a lot, you should go use Level because you'll save a bunch of money. so go check out level lvl.co again lvl.co if you buy and sell crypto in any size or frequency level will likely save you money it's only nine dollars a month and you can not pay any other trading fees so go check them out and remember if you're paying a bunch in trading fees there's something called fee drag so even if you make a purchase of something and it goes up in value

but you paid a bunch in fees, your performance will actually be lower because of that fee drag. So Level helps people avoid fee drag and you only pay nine bucks a month for unlimited trading, LVL.CO. Lastly, don't forget that I write a daily letter to over 80,000 investors about business technology and finance. I break down complex topics into easy to understand language while sharing my personal opinion on various aspects of each industry. You can subscribe at pompletter.com. Again, pompletter.com. All right, let's get into this special episode. Thanks so much to Paulina for helping me with it, and I hope you guys enjoy this one. All right, what's the first question you got? The first question comes from Brent KT. It's

about time management. How do you find the time to get so much done while sleeping nine hours and putting up with Paulina Marinova? The first piece is I don't sleep nine hours every night. I try to sleep eight. I used to not sleep at all. I sleep like four and a half, five hours, maybe six on a good night. And Planet convinced me that maybe I should be sleeping eight. Game changer. Highly suggest. From a time management standpoint, I basically spend my day being as efficient as possible. So I literally down to almost the minute have it blocked off in terms of there's certain times for content creation. There's certain times for calls with founders, for new companies. There's certain times for calls with existing portfolio companies.

And then I also have content days. So literally there's specific days on my calendar that are completely blocked off. I do nothing other than create content, record podcasts, et cetera. And so by putting all that together allows me to do probably a lot more than the average person just because I'm super efficient and scheduled. Jesus Plaza asks if you could only invest in Bitcoin or Tesla or your favorite company what would it be and why do you think that would be the best thing for the future I mean obviously it would be Bitcoin and really the idea is just that the addressable market for Bitcoin is much larger than the addressable market for Tesla that isn't that's not a knock

against Tesla it's just a different type of investment and I think that not only is there the economic argument, but there's also the non-economic argument of if Bitcoin becomes the global reserve currency or ends up getting global adoption, then it is likely to create a much more equitable world. And I think that that's an important part of the analysis as well. Christopher Vonheim asks, biggest mistakes or regrets you have in your life? What did you learn from them? Probably the biggest mistakes are not going at something hard enough. or doing something big enough, right? So I definitely don't have regrets

because I tend to think that whatever I've done has gotten me to the place that I am. But I do think that mistakes could be seen as kind of anything worth doing is worth overdoing is a motto I like. And that's probably the biggest mistakes is not going bigger or harder at something. And so I try to keep that in the back of my head

as I evaluate new things to do. Scott Wickman asks, what are your top tips for marketing your brand slash yourself this one's really easy just be authentic literally just be yourself that I think is the most defensible thing it's the thing that will allow you to stand out the most and it's the easiest thing you don't have to contrive a position in the market or a certain type of branding like literally just be yourself and the more authentic you are the more of an advantage I think you'll have crypto whale what's your thoughts on the correlation between bitcoin and stocks and does it were you in the

long run it's very obvious from the math that bitcoin is non-correlated to stocks over a long period of time there has been a higher correlation in recent months i think the bitcoin correlation has been around 0.15 historically and it's risen to about 0.25 to 0.3 over the last call it five six months. This is expected when you understand that from March to now, there's been somewhat of a liquidity crisis. And that's what's driven the Federal Reserve and other central banks to try to flood the market with liquidity. During those liquidity crisis, you'll see all assets tend to trend towards a correlation of one. If you go back to 2008, 2009, we saw this gold drop 30% over the summer of 08, along with all other assets. And then once the Federal Reserve stepped

in and started to put liquidity into the market. Gold went up 200%, hit an all-time high. And then we kind of went back to normal correlation levels. And so my expectation is that we'll see Bitcoin and other assets decouple again. And we'll get back to kind of that 0.15 or so correlation between the assets. What is you and Joe Pompliano's method for growing a following on Twitter with new content? How do you get that content seen? I think that there's a whole bunch of different ways you can do this. First, obviously, is just having something that people find interesting, valuable, educational, intriguing, surprising, you know, whatever terminology you want to use, but basically just it provides value to other people. The second thing is consistency. You

know, people underestimate the value of consistency. So just doing it every day, day in, day out for months or years. And then the third thing I would say is being intentional about what is the content that you are going to produce, meaning what's your angle. So if you look at my brother, there's plenty of people talking about sports on the internet, but really there's a very, very small group of people talking about the money and business behind sports. And so if you think of kind of what Darren Rovell did 20, 25 years ago, he built an amazing audience and platform on that theme, but no one has really done it in a unique way since then, right? And a lot of that content was done on television networks and kind of more traditional platforms and so Joe's been able to

one kind of find the right market to uncover a lot of interest in that market and then three do it in a unique way on new platforms where those stories haven't been told before and so I think that's kind of what's led to a lot of that audience growth and other people can take that same playbook and apply it the other thing I'll say is it's been pretty cool to see Darren and others in the sports world be so kind of welcoming of my brother and helpful to him. And so I think that it's, you know, not just, hey, can you create great content, but can you also figure out ways to get other people to help you get distribution? I think he's done a great way of doing that as well. And so that's a shout out to, you know, kind of all the people who came before him who have been

helpful also. Zeeshan Syed asks, will you sell Bitcoin if it reaches 100k by the end of 2021? I have no plans to sell Bitcoin. Okay. Zero Trust asks, you mentioned that it was a huge personal productivity breakthrough realizing that good sleep is better than extra work hours. When will you make the same realization with nutrition? So one of the misunderstandings is yes, I obviously love Domino's, eat it every Saturday. I also, if I drink, love Bud Light. But other than that, I'm actually a really healthy eater for the most part. I tend to not eat a ton, and I tend to eat relatively well. I'm not kind of fanatical about any one diet or anything like that. And, you know, I think that having

kind of that one big unhealthy meal to look forward to on Saturdays actually is a pretty good mental trick. And then, you know, I also kind of find a balance between enjoying life rather than living kind of imprisoned to a diet, right? So if I'm out with friends and I want to get a beer and that's what's going to make me happy, then I'll go ahead and I'll do that. But I do think that for the most part, I've got a pretty good diet compared to most people. So it kind of allows me to do some of the absurd things that people see on the internet, but not have me weigh 300 pounds and have a heart attack every day. Uh, find hero asks, I'd be curious on what you'd recommend for asset allocation per age group,

twenties, thirties, forties, fifties, and sixties. Also in general, say you're someone that's only in traditional markets buy-in right now, or wait out for the next recession. Would we even get a recession or hyperinflation? I tend to think that, um, there's very core principles that apply to everybody regardless of age. And so I always go back to kind of these four, uh, personal finance, principles. The first is you have to spend less than you make, right? You just got to live within your means. The second is that you need to have multiple streams of income, right? That's a really important kind of diversifying your income, making sure that you have some level of resilience to your income. The third is you've got to get out of inflationary assets. So getting out of cash,

for example, the financial system is structured in a way where savers are punished and investors and are rewarded. And so understanding that you got to invest is important. And then the last is that you've got to be disciplined and very, very patient. So taking a strategy that will compound money over long periods of time. And so if you think of that, if you can follow those four principles, you're already ahead of most people. Then most people ask, well, what do I invest in? And I tend to think that the risk reward profile that people seek is dependent somewhat on age, is dependent somewhat on kind of their life goals. And so it's hard to give kind of one-size-fits-all advice. I actually think that it would be the wrong thing to do is give one-size-fits-all.

But obviously, the younger you are, the more risk you can take. The later on in life you are, the less risk you can take. And therefore, you should also be seeking the return profile that matches the risk you take. So if you take lots of risk, you want high rewards if it goes well. If you take very low risk, you actually should expect low returns just because the risk you take should be the reward that you can can earn from an investment. At F underscore D underscore KB asks, in the recent What Bitcoin Did podcast with Michael Saylor, he repeatedly mentioned war as a risk factor in relation to why he values Bitcoin. Do you believe he meant that figuratively or literally? I haven't had the opportunity yet to listen to it, but anything that Peter McCormick

does is high quality. So I'll definitely take a listen to it. In terms of war in general, when it comes to Bitcoin, I think that there's both literal and figurative applications of this. So if you look at right now, the top economist at the World Bank, for example, she's been talking about a war in terms of the central banks buying bonds to keep yields low. And so I think that there's, you know, kind of this competition maybe is a less aggressive word to use there. But I definitely think that there is an element of competition or war. And then in terms of actual war, you know, I tweeted the other day that in the United States, we've spent less than 20 years of our existence, not in war. So, you know, almost every single year, other than 20 of the 244 years

that the United States has been in existence since 1776, we've been at war. And so I think war is a natural kind of phenomenon in the history of the United States. What that means for currencies and things like that, you've got to remember that pretty much every time a global reserve currency switches or there's a transition between one currency to another, there has been violent conflict in the past. And history would expect us to believe that the only way that we're going to get off the dollar system is if there's a war. Now, Bitcoin's a little unique in that there is no offensive capabilities

of Bitcoin. This is all defensive. And so the big question is, is there an advantage to having a decentralized system that allows you to essentially have the highest degree of cyber defense, which then makes you the most powerful network, right? And we'll see if that plays out or not. But that's my theory is that actually not having an offense will be an advantage when it comes to something like Bitcoin becoming a global reserve currency. Great. Maurice Mo Chute asks, what is your opinion? What is the level of risk keeping all my Bitcoin on BlockFi rather than storing it on hardware wallets, etc.? Yeah, I tend to think that this isn't a BlockFi kind of analysis as much as it's just in general

an analysis across all of finance really, but specifically Bitcoin and crypto, is you never want to concentrate all of your risk in one place, right? So even just holding Bitcoin in one type of hardware wallet would be a concentrated risk. And so I think you constantly want to diversify in terms of kind of having redundancy and using different systems and things like that. That also applies to having, you know, hardware wallets, using software products. And, you know, the thing about BlockFi really is if you want to earn interest, use their interest-bearing account, right? Now, just like you wouldn't go put 100% of all of your Bitcoin on one single hardware device, you shouldn't put 100% of your Bitcoin in any product, right? And even if you leave it on exchanges, which isn't recommended, but if you do that, why would you leave 100% of your Bitcoin on one exchange? I think that being able to do risk management is really important.

And so BlockFi obviously has these kind of high rates of interest compared to the traditional world. But understanding what they're doing in terms of lending out that Bitcoin or stable coins, understanding what the risks are, understanding what the upside is in terms of the interest, all that goes into your decision. But, you know, one of the big messages I have for people, it's about personal responsibility. Do the research, understand what you're doing, and then make an analysis. What's your risk parameters that you're comfortable with? And make sure that you never take kind of one-shot kind of risk where everything's concentrated in any one product, whether that's hardware products, exchanges, software products, etc.

Ibn Esterhizen, I'm sorry if I butchered your name. Hey, Apompliano, would love to hear your thoughts on how long before the user interface of crypto is simplified to the extent anyone can use it, or even better, if it is destined to be base layer tech that everyday people never really have to know about? Example, the Swift Payment Network or HTTP. I think you're already seeing some companies come out with better user experiences,

but this is definitely one of the areas that we need to drastically improve. But it's also a natural part of the technology cycle, right? You basically get the underlying technology has innovation, and then people figure out how do I actually improve the user experience or the user interfaces around that stuff. And so, you know, yes, it needs to improve. I believe it will improve. But I tend to remind myself that this is just part of a natural technology cycle and not to get ahead of ourselves and say, you know, it's never going to move, right?

One of the things that is very obvious is we usually underestimate what's possible. And I think that you can see some early data points that suggest, you know, this is going to be a standard of the world. This is going to be adopted globally, and therefore the user interfaces will naturally have to be very usable by anybody in order to have that happen. Bitcoin Bruce asks, if big corporates get into Bitcoin too quickly and too hard, thus sending the price parabolic, will this ruin the concept behind Bitcoin, enabling the ruling wealthy to become even richer? I mean, look, Bitcoin is one of these unique things that was available to everyone all at the same time, right? If you think about kind of the first 11 years, basically the retail person or investor or just the everyday citizen had the opportunity to acquire Bitcoin on an even playing field with these institutions. And so what's been really interesting is that this is probably one of the first times in history that something like Bitcoin has been available to everyone on a more equitable kind of playing field.

And so, yes, is there the possibility that large corporations, organizations come in with big dollars and they buy up a lot of Bitcoin? Of course. But I don't think it's so much that they are able to do it to the detriment of other people. It's that everyone's had the same opportunity. you just have had to do the work. You've had to be able to understand what this is, understand what the potential value is in the future, and then make a decision. And so I think that it's less about, you know, the corporations somehow position themselves to take advantage of other people. And it's more of just the people who have conviction and courage early should be rewarded if Bitcoin kind of goes the path that I think a lot of people listening to this believe it

will. What two, oh, Ryan McLaughlin, what two to three points, obviously there's many, would you emphasize the most to convince someone to become pro-Bitcoin? I don't necessarily focus so much on convincing people as much as I think of it more as like just giving people the information so that they can then make their own decision. So it's not for me to convince somebody to do it. It's more so to just explain how Bitcoin fits into kind of their worldview. And if you think of something, you know, let's say you're an investor on Wall Street, usually what I'll explain is three key pieces. I'll say one, here's the macro environment and why people are looking for inflation hedge assets. Two, here is why Bitcoin serves as a great inflation hedge. And then three, I'll explain,

and here's why Bitcoin is likely to continue to see kind of a price increase in US dollars, which ultimately is just a function of a fixed supply asset having increased global adoption. And so when you kind of start with the language or perspective that that person has, you usually can make much more progress than if you just start with, hey, Bitcoin's this decentralized digital asset with a blockchain and, you know, kind of all the things that are kind of crypto native in language. And so that's what I use with a Wall Street investor. But if I go ahead and I use, let's say, maybe somebody who's experienced hyperinflation, right, I take a whole different talk track. Or maybe I talk with somebody who's from a country where there's

been lots of seizing of assets or distrust with their government, you know, use different talk track. And so I think it's really understanding who is the person I'm talking to and what is their worldview and then trying to fit Bitcoin into that worldview in a way that makes them understand here's why it would be valuable to somebody in your position. The Morning Skinny asks, seems like most people getting into Bitcoin and crypto are in tech and finance people. What do you think that's going to do for the future of income inequality? Are the rich going to stay rich and poor going to stay poor? I tend to think that the greatest driver of wealth inequality in the world is inflation. And so that's a systematic thing. Is there the

possibility that the people who are early to Bitcoin will end up being the wealthiest people in the world? Sure. But I tend to think that that's more of everyone had the same opportunity to do that. And therefore, some people acted and some people didn't. That's a much more kind of It's an easier pill to swallow when everyone had the same opportunity and just some people did something some people didn't. I think the problem that most people have with wealth inequality today is that it's a systematic thing. It's not something where you have a say. You basically are either put in a position where you can benefit from it or you're put in a position where you end up suffering from it. And I think that's the big problem. And so just the fact that, you know, look at entrepreneurs, for example, some entrepreneurs fail and some become wildly wealthy. I don't think that we look and say, oh, the ones who became successful, they're bad people because there's some entrepreneurs who failed. You know, that's kind of like, no, one of them was successful in building a company and the other one wasn't.

That's the explanation for it. And so I think when it comes to Bitcoin, there's an explanation of, well, some people took the time, did the work, understood what Bitcoin was, saw the value, had the courage and conviction to act, and they did it earlier than other people. And therefore, they reap the rewards of doing that, right? They took the risk of doing it, and therefore, that's the return that they receive. Matthew46791522 asks, I deployed to Iraq in 2004 as an infantry squad leader. still miss it some days and would do it all over again you were a grunt as well do you feel the same short answer yes um i think that i went when i was uh 20 years old spent my 21st birthday in the deserts of iraq um and it was a point in time for me where uh one i learned some great life

lessons around just our mortality and um kind of changed the way that i looked at life and what i wanted to do and things like that. But also two was it forced me to grow up and grow up in a pretty big way very quickly. And so that was some by the environment we were in. Some of that was with the people I was with. But I think that that was probably one of the most formative experiences in my life. And so I definitely would do it again in a heartbeat. Paulo Cunha asks, if BTC approaches world reserve currency status one day, what do you think the U.S. government will do to defend the U.S. dollar? I tend to think that there will be a lot of talk of defending the U.S. dollar, but at some point there's a capitulation. I'm not really sure, and frankly don't spend too

much time trying to speculate on what are all the different avenues that the United States would pursue in that scenario. I actually think that it's something where no matter what they try, they won't be able to stop Bitcoin, right? And so could they do things like banning ownership for U.S. citizens and all that, of course, but that doesn't actually solve the problem, right? That would be a very reactive, ineffective way to deal with the situation. And so from my perspective, it's kind of one of these things of they may desire to want to do things, but if it's going to be ineffective, ultimately, I believe that they're a rational actor. And so at some point, they'll capitulate just like every other country will, and they'll actually adopt Bitcoin

as a global currency. Alexander Inukai asks, why do you only present Bitcoin, gold, and real estate as inflation hedge assets? Stocks are also inflation hedge assets, aren't they? Yeah, this is a really nuanced part of the conversation. I've actually talked a lot about stocks becoming an inflation hedge asset. Historically, they have not been considered that. And when I bring it up in kind of traditional finance circles, a lot of people kind of give me a weird look and almost disagree with it. But from my perspective, that's what people are doing. They're realizing, hey, the government is printing lots of money. Let me buy stocks, right? They're going to inflate asset prices. Let me run into stocks. And that's been a

great trade kind of from a macro perspective over the last five, six months. And so I tend to think they're serving as that inflation hedge asset, but that's just not historically how they've been thought of in the traditional finance world. John McGuire asks, where should a beginner getting into investing start where to gain knowledge and where to find a reliable mentor or guidance i mean john the internet is this amazing place uh i would literally search on youtube and the beauty is if you want to learn about investing don't go find kind of the no name people on youtube who are just producing day trading advice and things like that instead what you should do is look at who are the best investors in the world there's warren buffett

there's Ray Dahlia, right? There's Bill Ackman. You just go down the whole list, right? There's Cathie Wood. I mean, just a bunch of these investors. And part of the internet's kind of benefit is they put all out a lot of information for free. And so if you go ahead and you kind of just search around on the internet, those are the people that I would find or go find the best investors or the most popular ones, right? Robert Kiyosaki with Rich Dad, Poor Dad, etc. and just consume that content and you'll get an education that far exceeds anything that you would get inside of a traditional classroom or maybe from like a local mentor. And I think that the internet is amazing in that way. George Design asks, do you think Satoshi is somehow a threat

to Bitcoin value? What will happen if he, she, they decided to wake up and sell their coins or something. Same for the big whales? Yeah, I don't think that Satoshi is a threat at all. I think that it's something that people like to speculate about and kind of play this game, you know, what could happen. But I just tend to think that it's unlikely that Satoshi would really serve as any considerable threat given how far Bitcoin's come, how much adoption it has, and kind of how decentralized it is at this point. Crypto investing asks, what can we expect inflation or deflation in the next 12 months? Bitcoin, gold, and a housing market? Yeah, this is a very complicated question. I'll throw a couple of data points out there. So

one is I think the average consumer or investor is going to fear inflation and therefore they will move assets based on that. We've seen gold, Bitcoin, real estate, etc. do very well during the last five or six months. So there's a consumer fear of inflation. We also know that the liquidity crisis provided a deep deflationary environment, which kind of soaked up a lot of that liquidity. And then also we know that technology is a deflationary force. So over time, it will become more and more deflationary. People like Jeff Booth, et cetera, have done a great job kind of laying out that argument. But then we also have the Federal Reserve, which is committing to getting inflation up over 2% in a persistent manner in the official numbers. But if you

actually look at a lot of the unofficial metrics, kind of what I believe are better measurements of inflation, some people would argue that we're running between 4% to 6% right now. Many people would argue coming out of the 08-09 crisis, there was a 6% to 10% inflation. We have to remember also that different socioeconomic classes experience inflation at different rates. So the richest people in the world may experience kind of two to three percent, while the bottom 40 percent of Americans may be experiencing 10 plus percent. And so I think that it's a super complicated question and there's no kind of one answer. It's actually kind of who are you talking about and in what manner is easier to answer than just, hey, is it going to be inflation or deflation?

But those are just some thoughts that hopefully help you think through it. Sergey Lou Hoskinson asks what was the best thing you did for yourself in your 20s that helped you get to where helped you get to where you are today did the work um I think that we have a culture of uh you know work smarter not harder um and there's definitely some value to that at certain times but ultimately I think the kind of values and principles of just being willing to do the work and doing it every day for years is kind of a lost art. And so that's probably the number one thing is just my parents really get the thanks for this, but they just instilled in me from day one to always make sure that you're willing to put in the work.

And if you put the work in, then you'll be able to receive the benefits of that work. And I think that that's probably the number one piece of advice I have for people is just do the work and do it consistently for long periods of time. james lack asks you're one of the most prolific creators i'm aware of what is your production function in the tyler cohen sense i.e how do you push out so much so frequently authenticity and efficiency i think are the two answers so one i'm just myself so i don't have to spend a bunch of time preparing for things i literally can just be me which it makes it much easier to create content. And then two, again, as I talked about earlier, the kind of efficiency

that I have around how I lay out my calendar, you know, to when I'm going to create content, have these content days, certain periods of time during the day where I can kind of context switch all of those things, you know, kind of fall into the category of just preparation really allows for me to seize opportunities. And so I think those are the two key pieces, authenticity and and efficiency. Patrick Okenka asks, what is the most valuable perspective shift a person can have to make their life better today? You're responsible for you. That's it. If you, the day you start to realize you want to be rich, it's on you. Go become rich. If you want to be happy, it's on you. Go become happy. You know, if you want to be successful at something, it's on you. Go do it. I think that

personal responsibility is drastically lacking in societies around the world today, but it is the single greatest path to freedom is, you know, however you define freedom. If you want that freedom, it's on you. Go do it. Don't wait around for other people, companies, governments, or anything else to do it for you. I think having that personal responsibility and that ownership of if I want something, I'm going to go get it. I'm going to go do it. That will put you in a position to really build the life that you want. CG asks, once all the Bitcoin has been mined, what happens to all the computing power supporting the network? It will simply process transactions and it will be compensated through the transaction fees for doing that.

isabel whelpy um top three things that could stop bitcoin and how likely you think they are the number one thing is a self-inflicted wound there's code that's introduced that somehow is um um you know detrimental uh in some way a bug or whatever uh i think that that is possible but very, very unlikely. I'd put it at, you know, less than 1% chance at this point, just given how rigorous the process of Bitcoin development is. The second thing is obviously Bitcoin could go to zero, like literally it just becomes not valuable. The market walks away. I think that again is very unlikely. I always joke that it won't go to zero because I'll buy up all the Bitcoin as it drops in price. But I think there's a lot of other people out there, right? 63% of

Bitcoin haven't moved in 12 months. And so I think you've got this holder base that just won't let the price go below some point. And then I think the third thing really is, you know, everyone always talks about something better coming along. And for me, the thing, the reason why I think that is unlikely is because you have a network effect that is the greatest network effect in the world, which is money. And that network effect has grown at an incredible rate and it's accelerating, right? Over a hundred million people now hold Bitcoin based on some of the reports that I've seen. And, you know, let's take that at face value that it's true. Then you basically have gone from, you know, less than a million people to millions to now tens of millions. And now you've broken

over into nine figures. That network effect allows for virality and that virality will eventually encapsulate, you know, seven plus billion people in the world. And so I tend to think that it's not so much about any other thing other than that network effect when it comes to money adoption globally. Byron Huey, what is your opinion of art and collectibles as part of a long-term investment portfolio? For example, fine art, baseball cards, etc. I tend to think that these are kind of the new alternative assets, right? So kind of the traditional alternative assets have almost become more mainstream. And so now the new alternative assets are a lot of these collectibles and things like that. Obviously, I've come out publicly and laid out the thesis for

digital art. I tend to think that digital art is going to be, you know, really, really important in the future uh it's basically you know analog art has value but digital art will have uh even more value i expect the digital art market cap to uh surpass the analog uh market cap at some point um you know in the future just like i think bitcoin and gold or sound money principles being applied in an analog digital version but the digital version will eventually eclipse the analog one um so that's probably the thoughts there eric freedom oh sorry wow eric friedman asks what's in your anti-portfolio meaning what is an opportunity you had to invest in a company that you passed on that you now regret man there's a lot um off the top of my head uh petal

i think is now like a 400 million dollar company uh at the seed uh i was super indecisive and slow on that one um so i missed that uh i had an opportunity to invest a pretty sizable check um, in SpaceX. Uh, it wasn't like seed round or anything like that. It was, I don't remember series C D E somewhere in there. Um, but, uh, ended up not doing that. And that was obviously a mistake. Uh, there's a whole bunch of them, but, uh, I tend not to think about the anti-portfolio because, uh, I like to focus on, uh, you know, how smart I obviously am for the good investments I've made, but, uh, but, but there's definitely a big anti-portfolio. Mario Detillo asks, Aside from yourself, what are two podcasts you recommend for Bitcoin and crypto?

This one's pretty easy. What Bitcoin Did, Peter McCormick, and Tales from the Crypt from Marty Bent. Alexander asks, tell me the top five books to read to be successful in your opinion. Top five. I've said, you know, many times that the three most important books I ever read were Rich Dad, Poor Dad by Robert Kiyosaki, uh, thinking grow rich, um, and the richest man in Babylon. I read all three of those pretty simultaneously. Uh, another one that I think is, um, is real good is, uh, Mark Spitznagel's book. Uh, it's all about, uh, Austrian, uh, investing. I forget the name of it right now.

Um, but then, uh, another book that I think actually is, uh, is pretty good. Um, the Dow of capital that's Mark, Mark Spitznagel's, uh, book is the Dow of capital. I think that one's good. And then another one is, uh, Eric Jorgensen just put together, uh, the almanac of Naval Ravikant. I tend to think that one, uh, is fantastic just from, uh, everything around business, money, happiness, uh, and life. And so, uh, reading that's probably a fifth one that I throw in there. Uh, paper chaser asks if you had four people investing all of your money in the coming decade who would it be myself I I tend to think a lot about you know do I want to bet on myself or other people to invest capital and and I'll bet on myself all day long because if I'm

right I'll end up reaping the rewards but if I'm wrong I have nobody to blame but myself and so that's that's pretty much it and then obviously Paulina is constantly in my ear telling me when I'm going to about to do something stupid. So, uh, probably me and her are the, uh, the two people I trust the most. Um, undefined asks, why is universal basic income such a bad idea in your opinion? You simply can't change, um, the incentive mechanisms of capitalism without very bad, horrific, uh, impact. And so it's become kind of cool, uh, and, and, uh, normalized to believe that the government handing free money to people is a good idea. But I tend to think that that is just a form of socialism. And as we've seen around the world, socialism does not work. And so I

fundamentally believe in the capitalistic principles of an economy. And, you know, UBI is usually focused on the government giving people, you know, especially at the lowest socioeconomic classes money, but also quantitative easing, the printing of money by governments and putting it into the financial system, that's essentially UBI for rich people, right? And so I'm generally against anything that involves changing of the risk-reward structure and the capitalistic principles of an economy,

of a market, and of a society. And I tend to think that capitalism is the greatest way to run a society. Full Bitcoin asks, why did you join the army? Would you re-enlist if you had to do it all over again? You're obviously very successful, and I'd be curious to hear your thoughts on if the Army played a role in your development. Yeah, we talked about this earlier.

Absolutely would do it again. I think the Army had a really, really big impact, both from an experience standpoint but a training standpoint. I don't think I've ever even talked about it, but went to at least one, if not multiple, leadership training courses and really kind of took away a lot from my time both in theoretical kind of study but also in application and practice from that time and so absolutely would do it again. Redfield Proctor asks,

do you subscribe to the dollar milkshake theory? The dollar milkshake theory is basically every central bank is printing lots of money and all of that money is going to get sucked up by one asset. uh, that asset being the dollar. It's kind of think of everyone's putting in ingredients into the milkshake, but then only one country gets the straw and they get to suck up all the value. And that's the dollar. Uh, I tend to think that that is, um, true to an extent, like when I just talked about, but I do not think that we're going to see a strong dollar, uh, forever. I tend to

think that we're going to actually have the opposite, which is we're going to have a weaker and weaker dollar over time. It'll be systematically devalued. Um, and not holding cash is going to be the better investment than holding cash. Financial freedom asks, what makes you better every day? Uh, I think it's literally just, uh, practice and practice, not in an intentional sense, but just doing the work. Um, you know, the more you do something, the better you get at it. And so I tend to think, uh, just literally showing up every day, uh, investing, creating content, learning, reading, talking to people, all of those things contribute. Um, and, and so it's more about just, uh, you know, really putting the time effort in,

uh, and you'll eventually become better at something. Greg asks, any new investments you've made? I have, we'll announce them soon. Not ready to talk about them yet. ryan male thoughts on the new imf policy bullish for bitcoin i'm still reading about it for those that don't know the imf uh they've been making a bunch of announcements and and uh things but one of the things is they're calling for new brenton woods um which uh i need to read more about before i start talking about it uh but but uh you know very very interesting that that's

happening right now. You know, never let a crisis go to waste is a term that you've probably heard it before. And so let me read more about it before I comment any further. Andy asks, what if you're wrong about Bitcoin? Then I'll be wrong. I'll lose a lot of money and I'll have to go back and reevaluate what I got wrong. But that's kind of how markets are made is there's always the possibility of being wrong. Um, but, but, uh, you know, it's kind of a risk reward thing. And so if I'm wrong, there's a one X downside for me. Um, but if I'm right, there's, uh, an exponential upside or kind of an asymmetric payoff. Uh, and so it's a risk I'm willing to take. Chad Sitzman, how was your dominoes last night?

Uh, I was not allowed to order dominoes because, uh, Paulina, uh, cooked something and she told me that, uh, I would get fat if I eat dominoes plus the dinner that she cooked. That is absolutely false. Um, okay. A King asks, should there be more people in engineering jobs rather than finance jobs? Why does this seem not to be the case? Yeah, I think that most finance jobs are merely the, um, kind of movement of money back and forth between people, right? It's basically just a a casino. Everyone's betting on future outcomes. And so, sure, there's going to be a lot of people who want to go into that field because there's the promise of making a lot of money, right? Incentives drive the world. But should we have more people being teachers and engineers and

scientists and others? Of course. What we need to figure out, though, is how do we incentivize those people to do that financially so that they can make just as much, if not more, doing things that we think might be more productive for society rather than simply just moving numbers around on a screen trying to capture some alpha so that you get a big bonus at the end of the year. Ryan Kukin asks, what innovation do you see on the horizon

that no one else is talking about? I don't know if there's necessarily like some innovation that no one's talking about. I mean, if you think of any innovation, there's somebody somewhere in the world talking about it. I tend to think that this whole idea of like, I know a secret in the world that no one else knows is not really from an investing standpoint the best thing. Instead what it is is being able to find the people who know the secrets right and

what I mean by that is like as an investor you're not really creating anything. What you're doing is you're simply allocating capital to people who are creating things and so sure there are people who have insights in the world that we don't know about but I don't think there's anything that I specifically, especially in an investor seat, know that other people don't. Now I may have more conviction in certain things than other people, or I may think that there's a unique way to kind of solve a problem. But I don't think that there's necessarily some, you know, big innovation, whether it's technology, science, whatever, that no one else knows about. And I know, and I know some secret. I tend to think the exact opposite, which is I don't have the answers. I need to go

find the entrepreneurs who have the answers and I can give them capital to help them kind of build what they want. And then from the things that I build, especially in the content business and things like that, it's actually, I think everyone knows the answer, but people don't like the answer, which is just, it comes down to consistency, time, and effort. And that's an answer that people don't like, but it's common knowledge. And so it's whoever kind of follows the rules in order to be successful will end up reaping those rewards. Fight Eye Guy asks, what was the inflection point that took you from casual Twitter user to power user?

In 2017, I told myself I'd helped a lot of other people build very large audiences, but I'd never done it for myself. And so I was intentional. I said, I'm going to go do it for myself. And here we are. Harris Agadi asks, you once said that you don't have any investments in public equities. Why is that?

I don't think I have an advantage there. I tend to think that if you're going to be a public market investor, you need to believe you have some advantage. Why are you having this investment and other people passed it up? I don't think I've got a good answer for that. And so I tend to stick to things that I understand really well and also places where I think I've got some significant advantage and that just isn't in the public market. There's just too many smart people all competing for returns there. And so I tend to look for much more inefficient markets in the private markets or on crypto, things like that. So that's where I spend most of my time

investing. All right. Last question from. Two more. Oh, two more. From Grub Passport. When were you last wrong about something you're pretty sure about? What was it? Who, why and what evidence made you acknowledge your honest error? If necessary, any learnings from it? Yeah, I think one of the really good things that I still believe will happen, but I definitely was wrong about was kind of the digitization or tokenization of assets. So if you think of this thesis of every stock bond currency and commodity will eventually be digitized over time, I believe that to be true, I probably had much more conviction from a timeline perspective, that it was going to happen really quickly, you know, like it would already have started. But obviously,

I was wrong on that. And so one of the hard things about kind of predictions is, in order to have a legitimate prediction, you need to have both an event that's going to happen, like a thing that will occur in the world, and also the timing, you know, that kind of really forces you to be thoughtful about the prediction. I believe that I'm still right about the thing happening, but I definitely was wrong about the timing. And so what that one calls from a learning perspective is it goes back to like the Bill Gates quote, we overestimate what's possible in a year, we underestimate what's possible in 10 years. Like I was a victim of that for sure, of being overly optimistic in the short term. And the second thing is also I probably didn't

spend enough time critically thinking about every single step it would take to go from nothing being digitized or tokenized to everything being digitized and tokenized, right? What are the actual execution steps that that will take? And so, you know, if I'd kind of spent more time critically thinking about that, I probably would have ended up realizing that there was a longer timeline. So I think that's the big one. And, you know, I'll also say that, like, I'm constantly wrong about things. I've got a good friend who says the best investors in the world are right 55 to 60 percent of the time, but they only put trades on or investments on that are super asymmetric, meaning that when they're right, they're really, really right and there's big

payoffs there. I tend to think of my investing that way as well. It's a very kind of Austrian way of investing. And so I look for those asymmetric opportunities. And so when I'm wrong, I don't really lose that much. But when I'm right, I can make a ton of money. And so being wrong a lot is just kind of a natural part of this. And, you know, I recently tweeted and said that avoiding small losses as being important is one of the greatest lies. Like actually losing a little bit, you know, over and over again is not a bad thing as long as you're always in asymmetric trades that if you're right, end up being, you know, kind of very, very lucrative because those will pay for all the times that you lost. And so I'm comfortable being wrong. I'm wrong all the

time. It's just a matter of like, you know, remaining disciplined and unemotional about the fact like that's part of the way that I invest. And so don't get kind of caught up when you're wrong. Okay. Final question. Paul Anderson asks, would love to hear what your asset allocation is and why. If you're not comfortable sharing your personal asset allocation, curious what you think the new 60-40 is. So I definitely think 60-40 is dead for the foreseeable future in the sense of holding 40% bonds is absolutely insane in a zero interest rate environment. In terms of my asset allocation, I don't know exactly the numbers, but the way I would think about it is I'm probably 80% Bitcoin right now. I am the other remaining 20% is by 5%

cash. Uh, and the remaining 15% is split between real estate and startups. Um, so, you know, some of that is a function of, uh, the original kind of big, big bet I made on Bitcoin, um, Um, in December of 2018, it wasn't, it wasn't the original investment that I made, um, or anything like that, but just like that was the moment I think everyone kind of points to and says, you know, I took 50% of my net worth, uh, and, uh, I went ahead and I put it into, uh, Bitcoin at the bottom of the market. Obviously that's played out very well. Um, you know, I, I've been fortunate to, uh, kind of continue, um, driving income and,

and, uh, you know, other investments that have gone well and things like that. So, um, Bitcoin's grown to about 80% probably. Um, and I don't plan to kind of, um, you know, really rebalance or anything like that. I've kind of made, made the investment and got the conviction I've gotten and we'll go from there. Uh, but everything else is a real estate, um, cash and, uh, and early stage investing. And so that's kind of where I'm at now. And I hopefully will end up being a good kind of asset allocation moving forward. So that's it for this episode. I appreciate Polina taking the time to ask all these questions from you guys.

Thank you guys all for writing in, and we'll have to do this again in the future.