We Study Billionaires - The Investor’s Podcast Network - TIP318: The Passive Investing Impact w/ Mike Green (Business Podcast)

Starting point is 00:00:00 You're listening to TIP. Hey, everyone, welcome to the Investors podcast. On today's show, we have Michael Green. Michael is a professional investor that has multiple decades managing tens of billions of dollars. Michael is the former portfolio manager for billionaire Peter Thiel's macro investment firm, and he's now the partner and chief strategist at Logic of Funds. As you'll see throughout this discussion, Mike has some fascinating insights surrounding passive investing and the systematic risk it potentially poses to the overall market,

Starting point is 00:00:30 along with numerous other ideas. So without further delay, we bring you our discussion with Mike Green. You are listening to The Investors Podcast, where we study the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected. Hey, everyone, welcome to the Investors Podcast. I'm your host, Preston Pish, and as always I'm accompanied by my co-host, Stig Broderson, And like we said in the intro, we got the one and only Mike Green here with us.

Starting point is 00:01:11 Mike, thanks for making time for us and coming on the Investors podcast. Pleasure to be here, Preston. Hey, so Mike, the thing that I kind of chuckled at when I sent out that I was going to be talking with you on Twitter got a ton of responses, a monster amount of responses. But one of the responses, somebody said, you know, I feel like I understand Mike's positions on where he stands in the markets. I want to know more about Mike the person. One of the things that I like to dig into is deep learning, machine learning, how the brain works. And one of the things that almost always comes up is that when you're younger, like under the age of 10, there's things that shape you and that kind of polarize how your neural net starts to process information. And then there's this reflexive, it leads to who the person becomes someday.

Starting point is 00:02:00 So I'm kind of curious at a young age, your parents, mother, father. somebody who was really influential in your life. What would you say is something that kind of gave you that initial push in the direction that you ended up going? I grew up in Northern California on a small farm outside of San Francisco. And so literally starting at the age of three, it was like collecting eggs and selling them to our neighbors sort of stuff. And my mom in particular was always just very focused on, you know, how wonderful and precious I was and giving me, you know, making every possible sacrifice she could to give me every opportunity that was plausible. And so despite coming from a firmly middle class background, she made the sacrifices to give me the best possible

Starting point is 00:02:43 education that she could and really inculcated a love of learning for me that I remember from like the very earliest ages. My house was always filled with books. I remember my father reading to me. My mom did daycare to help defray the costs of living, you know, where we did. And, you know, I remember reading to the small children when I was younger, et cetera. And so it was just, you know, all those sorts of things, I think, contribute to who you become when you're brought up in an environment in which people are telling you, you know, this is the path. This is what matters, right? And that set off a period of just intense reading is, I guess, the easiest way to put it. So by the time I started reading, which is probably five years old or so, you know, I just constantly had books in front of me.

Starting point is 00:03:31 things that you don't realize are crazy until afterwards is like my mom bought, you know, the World Book Encyclopedia and she buys the World Book Encyclopedia. And of course, I'm like, okay, well, I'll read the World Book Encyclopedia. And so if I were to cover, I read the World Book Encyclopedia when I was like 10 years old. And you don't really think about it because that's just how you grew up, right? And that's the environment that you were. And so if there's like one thing that I would point to, it was just an incredibly voracious love of reading that It translated to building a body of knowledge that allowed me to start making some comparisons at a very young age of what's true, what's not.

Starting point is 00:04:10 People who heard you on other shows are probably saying, now it all makes sense. What I'm thinking, whenever I'm thinking my green, is also a critical thinker. You are a person who does not take things at face value. You dig deep and then you dig deeper. you're constantly trying to piece things together. So I have to ask you, what makes a person a great critical thinker? Well, so now we can turn a little bit dark on this, actually. And it's funny because this is, you know, I know other people who have similar backgrounds.

Starting point is 00:04:43 Josh Wolfe, a good friend of mine, has a similar background. I'll make it actually, you know, really easy. There are two components that led to really critical thinking. The first was I was brought up in a household with comparative religion. So my father was Jewish. My mother was Methodist. I was raised Jewish until I was six years old. Then my grandparents, my father's parents, passed away.

Starting point is 00:05:01 And I suddenly switched to Episcopalianism, not to Methodism, but to Episcopalianism because my mother thought that that was a better religion. And so I'd been exposed at that point to Judaism and then Episcopalianism. Then I went to a Jesuit high school. And all along the way, the people are telling you their stories that are, you know, true, right? This is the truth. You're supposed to have faith in this.

Starting point is 00:05:20 And yet they're completely different stories. And so one of the things that you discover is that that's just, part of life is that people present things with certainty and they have no idea what somebody else is saying. They can be at odds with that. And so collecting that and using that information is important. The second thing that happened in all candor was just that I had a somewhat disastrous relationship with my father who was a pathological liar. When you're again exposed to somebody who is supposed to be telling you the truth and is constantly trying to control the narrative to make themselves look better, that changes you. It puts you. It puts you a

Starting point is 00:05:55 you into a situation where you never really take anything for face value. There's a number of people in my life that I know who have had similar experiences and it's not a positive until you make it one. That's just fascinating. When I hear you tell the stories, it's just I kind of smile a little bit because it really just demonstrates why you are such a deep thinker because I'm serious. I think, and I speak for everybody out there. You're a super deep thinker and it's just really enjoyable to kind of follow your feed. So when we talk to the markets, when you look at these big market cycles, when we look at for the last 40 years, the boom and the bus cycle, so much of this just comes down to the liquidity that the central banks are allowing to be into the system

Starting point is 00:06:39 as to the big moves up and the talking collectively. It appears like the policy at the Fed, particularly, has shifted from not allowing things to contract or not promoting things to contract and that it's just, they're just trying to pump as much liquidity into this. What has caused that change? And I'm kind of just curious to hear your thoughts in general on the liquidity comment. Well, I think that there's a couple of things that are going on. And the John Maynard Keynes quote, you know, everyone, rational men who think they're exempt from any form of influence or slaves to some defunct economist, right? A lot of what you're seeing happen with the Fed and the behavior is them attempting to use the expectations channel to inform their actions. And so, you know, if you

Starting point is 00:07:27 truly believe that the stock market, the S&P 500 or credit spreads or any other measure, reflect the best collective information gathering of private market participants with an incentive to collect that information because of a profit motive. And that therefore represents the best possible knowledge of expectations of what could occur, what is likely to occur in the future, why wouldn't you use that information to try to fine tune the system? And unfortunately, the feedback loop that that creates, you know, you create a feedback loop in which the markets in turn are expecting the Fed to bail them out and therefore they cease to function as an expectations channel. Now, I have my own challenges associated with some of the narrative because I do think

Starting point is 00:08:14 that there's a mixture of factors, right? There's never one single sweeping dynamic, right? And so we'll lay the story at the feet of the Fed, or we'll talk about crazy retail investors, et cetera, right? I tend to find that what's actually happening is a function of market structure, right? You build systems and fund in a certain way. It's almost a variant of, you know, a political science analysis in which you're saying the structures, the reaction function of society determines how the structures are built, right? So I think that in large form, a lot of what we've seen over the last 50 years, I do think that there were components of it that were tied to the central bank and tied to decisions to provide liquidity. But I would argue that the vast majority

Starting point is 00:09:01 of what we're seeing is actually an outgrowth of the idea that markets are forward-looking, that the expectations channel controls and contains information, and that we can centrally plan and fine-tune a system with the benefit of the input from the expectations channel. I really believe that they are not trying to do something bad. I think they're trying to do something good. But just like a parent who constantly gives into their child and constantly gives them what they say they want,

Starting point is 00:09:32 you're ultimately going to end up with quite adverse consequences. How do you think through the velocity of money? When you look at it over the past 40 years, it's been a downtrend, even though more and more liquidity is put into the system. When Fed-Chia-J Powell's looking at the leverage he can pull, is he looking for this to revert and why he needs to add more liquidity into the system and not allow for it to contract? I don't think that Powell has a principled understanding of the system. And candidly, I think that he much more so than prior.

Starting point is 00:10:05 Fed chairs is really captive to the staff because he just doesn't have the academic chops or the theoretical chops to stand up against them. And he was very quickly cowed by the reaction of the market and market behavior under his administration into doing pretty much whatever was necessary, right? But with that said, the entire theory of interest rates of the theory of the quantity of money or the theory of the velocity of money, right, tied back to the idea of mv equals pq. When we think about what money actually is, and I know this is something that is very important to you, I just have a different theory of how I think about money. So I think about money and debt as functionally the equity in a country, because it behaves exactly as you would expect

Starting point is 00:10:48 corporate debt or corporate equity issuance to behave. If I constantly met the shortfall associated with my business by issuing new shares to receive cash, what happens to my dividend deal? Gets crushed. It gets crushed, right? Because I'm, diluting the dividends per share, even faster than the price of the shares are falling due to the delusion, right? And so I think that's what we're actually doing. I think when we respond by issuing debt to match the shortfall or to offset the shortfall associated with productivity and growth of the labor force and everything else, I think when we do that, we're creating conditions. And Lacey Hunt talks eloquently about these types of dynamics, right? We're creating an overhang.

Starting point is 00:11:32 we just can't possibly service it. And the declining velocity of money is just in my book, another way of saying falling interest rates. And that interestingly enough, that was actually John Maynard Keynes' initial theory in terms of how he thought about interest rates and money was that it was much more tied to effectively a time shift dynamic. What is the interest rate that is required to get you to hold money to reduce the velocity of that money effectively against people who are demanding it?

Starting point is 00:12:02 I think the general theory actually probably took a step back. Back whenever he was writing these things, the world had never been collectively on a Fiat standard, right? Collectively, all nations. So is there something that's different about what we're seeing today because, you know, we had Breton Woods. We pegged the dollar to gold. The rest of the world pegged their money to ours, which basically was a global peg on gold. And then we collectively, on a global scale, came off of that standard. And so it almost seems like now that we're off that standard collectively, and we're

Starting point is 00:12:42 going through this delusion that you're talking about, there's no backstop for anybody to be fiscally responsible. If anything, there's an incentive structure to be further irresponsible, right? Again, I think that's largely the dialogue that you hear, right? I mean, this is Paul Krugman's direct lines. It's like you need to be credibly irresponsible. You're going to, if you want to actually get inflation to appear, if you want to get interest rates to be forced upwards through, you know, the Ed Yardini Bond vigilante arm,

Starting point is 00:13:12 the only way you can do that is by being completely irrational. Now, the irony, of course, is that we've moved from the idea that that's completely irrational to the idea that, well, of course, that makes perfect sense. We need to have something like reversal basic income. And so in the space of 10 years, we've completely changed the dialogue. Now, my pushback that we're going to move as quickly as people think to a lot of this stuff, though, is to say, you see this. But this is what we wrote our piece, policy in the world of pandemics, right? In March was saying, the market is ultimately dictating policy.

Starting point is 00:13:42 And so when prices fall rapidly, the policymakers look at it and say, oh, my gosh, the expectatious channel is telling us that the end of the world is nigh, right? And therefore, we have to immediately act. And so they, you know, they immediately roll out extraordinary measures. And then prices move to all-time highs. And what do we see? Very predictably, they're saying, yeah, you know, are we going to do a $1.6 trillion package or a $2.4 trillion package? Well, since we can't agree on how we're going to spend your money versus our money,

Starting point is 00:14:11 let's not do anything because there's no urgency. If you look at the markets, the markets are telling them everything's fine. And it's the few major companies that are doing fine. Whenever you drive into the small towns, you know, their businesses, they're just obliterated. The K-shaped economy that Peter Atwater, I believe, is the one who originated that term, and it's been spreading it. I think it's very accurate. And, you know, in a lot of ways, the companies that were positioned first in line to get those handouts or to benefit from those handouts as

Starting point is 00:14:43 people transition very quickly to a work-from-home environment, whether that's a Microsoft or an Apple or an Amazon, et cetera, you know, you've seen them benefit. Now, I'm always cautious because I think that we're constructing a narrative around that component and there is a feedback loop. I think that's influenced or enhanced by the underlying dynamic of passive investing. At the end of the day, if you have a large sum of money that is coming in and saying, well, whatever price, the last price was, that's the right price. That becomes a reinforcing mechanism for it. To me, nothing that has happened is all that surprising. What's frustrating about it is that we have so blithely adopted a narrative like, well, it must be fine, right? We're going to see a giant

Starting point is 00:15:27 restocking cycle. Americans are rushing out to buy new homes and therefore, you know, the housing sector is going to drive the economy and just wait until we have a vaccine, then everything's coming back, right? I would just push back. I do think that we're going to have a restocking cycle to a certain extent, but I also think that people forget that much of the spending that we've seen has been a function of a collapse in services spending. So people will get fewer haircuts. They go out to restaurants less times. They have fewer people clean their house for them. They take their clothes to the dry cleaners far less.

Starting point is 00:15:58 They're getting far fewer cups of coffee from Starbucks, et cetera, right? And when they look at the free money that they have or the leftover money that they have, what have they done? They've turned around and they've purchased capital goods, you know, particularly leisure-oriented capital goods that enhance the quality of life that they're experiencing at home. And so that's, you know, hot tubs and RVs and, you know, backyard projects and all these sorts of things have exploded, but those don't come back next year. We don't see an enhancement of that next year, right? That we've pulled forward years and years and years of delayed projects.

Starting point is 00:16:30 And I think part of the challenge is, is if you have any form of economic uncertainty going forward, you could very well see that fall in a far more aggressive fashion as we look to 2021 than I think anyone's thinking about. So recently I saw a clip where Nassim Taleb was asked about What's the big risk that you think very few people are accounting for in the market? He paused and he kind of looked off in the distance and then he said, I just don't think that it's a guarantee that the dollar is going to continue to be the global reserve asset. Is something to that effect? I'm kind of curious if you would agree with him on that.

Starting point is 00:17:07 Well, I think it depends on your time horizon. It's important to distinguish what you mean by reserve currency, right? So there's reserve currency as measured by the IMF. There's a reserve currency as measured by central banks in terms of of what are the actual assets that they hold, right? On that front, there are competitors to the dollar, largely because it's dictated, right? So the SDR components within the IMF include the RMB. They include the Japanese yen.

Starting point is 00:17:30 They include the British pound. They include the euro. But if I look at it on the basis of international trade or global trade, and more importantly, on a like-for-like basis, right? So remember that euro trade figures include transactions that occur between Germany and France. We don't include in global trade transactions between. between California and Nevada. But they are functionally identical. They may not like each other as much, although Californians and Nevadans don't really get along either. But the simple reality

Starting point is 00:17:58 is that they are both municipalities, not states. Germany doesn't have its own currency. It doesn't have its own fiat dynamics. Right. And so it's subsumed itself, although they want to accept that or not. They're part of Europe as compared to a true fiat currency. Right. or a sovereign nation, they gave that up. They may choose to take it back, but if that happens, then the euro collapses as a reserve currency, right? And certainly as a measure of global trade, it falls even further. And so I just highlight that when you look at it on that basis, the dollar is actually

Starting point is 00:18:33 gaining strength, picking up a larger and larger share of global trade. People have started to hear some of my views on the political economy dynamic and geopolitics, and I would just say very simply that we've come to the end of Francis Fukuyama's, the end of history. There is a somewhat legitimate threat to the U.S. hegemony in the form of China. And there's a couple of players out there that are playing it really, really well and quite aggressively, effectively saying, you know, do I switch allegiances from the bully on the playground to another bully on the playground in the hopes to improve my position? And so when I look at Europe, Europe is overwhelmed with the type of Schadenfreude where they're like, oh, you know,

Starting point is 00:19:13 wouldn't it be great if the Chinese dethroned the Americans? Wouldn't that be fantastic if the Americans got their comeuppance, right? And as a result, I think that, and there's a lot of countries that honestly feel that way. And unfortunately, the U.S. in a weird way has almost never had more resources available to it relative to everybody else. And the single most important of those is human capital. And people tend to underappreciate that. You know, we're brought up in an economic environment where we're taught the work of John Maynard Keynes and almost no one in the audience who hasn't formally studied graduate level economics knows who Arthur Lewis is. You may know the Solo Swan model, which has similarities to the Arthur Lewis growth economics model of an emerging

Starting point is 00:19:54 economy, but you don't know it and how that sits at a primary role. And that's really the story of the United States, is that the United States has had the world greatest business model. You will send us products cheaply, and you're going to send us your top human capital from all over the world, those who are actually interested in breaking out of a historical pattern, And that doesn't show up anywhere in the trade accounts. And the fact that China has a negative brain drain to the United States, or for that matter, almost anywhere in the world, with the possible exception, I think, of Australia, has a negative brain drain to the United States.

Starting point is 00:20:29 That doesn't show up in our accounting and our national accounting systems at all. How can you possibly account for that? Think about a system where India devotes its scarce resources, educating engineers, and then they get on a plane and travel to the United States. To see the dollar fail, you have to see. that break. And I think we're a ways away for that. We may be doing our best to expedite those events, but it's really hard to think that the dollar is going to collapse as long as those conditions remain in place. Let's take a quick break and hear from today's sponsors.

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Starting point is 00:25:01 That's Shopify.com. slash WSB. All right. Back to the show. As our listeners would know, we follow Redellio closely here on the show, and we talked multiple times about his model of the big debt cycle. And our listeners, if you're not completely familiar with that, I would highly encourage you to go to episode 224, where we outline that in detail.

Starting point is 00:25:24 But, Mike, do you buy into Radalia's model of the big debt cycle, or how do you see the economy? I mean, the long and short it is is that, yes, there are cycles, but the idea that those cycles are going to repeat themselves in any predictable way. Like, I mean, the nonsense of saying, you know, there's been hundreds or thousands of these cycles, millions of times this has played out the same way. Like, that's just a totally false statement. People often hear me refer to what happened to Rome in terms of the transition from the Roman Republic to the Roman Empire. And I do think that that's actually very interesting. But to point to the dynamics of a, debt deflation in Egypt at a time period when people, the vast majority of individuals,

Starting point is 00:26:09 were so close to the subsistence line that basically a failed harvest was the difference between starvation and survival. That's just not the world we inhabit today. That's one of the reasons people hear me, you've heard me use the idea that we live in the age of uncertainty, right? It's just a ridiculous concept. If anything, we are more certain about almost everything in our life. And if you look at the dynamics around COVID, we're all completely appalled and up in arms because our day-to-day lives have been disrupted. And for the vast majority of us, unfortunately, not the vast, but for the majority of us, even those lives haven't changed all that much. I worked from home before this. You worked from home before this. The only thing has changed

Starting point is 00:26:49 is you have to put a piece of cloth over your face when you go out. Right. And so that's not a meaningful change relative to, you know, I jokingly say things like, you know, the golden hoard invading your village and killing every male taller than a wagon wheel, right? Like, oh, that's a till of the hunt. But that just doesn't happen in our lives. I don't know where you're based, but what would you happen if an invading horde of barbarians came in and literally started lopping off the heads of every male taller than a wagon wheel? Like, that's real uncertainty.

Starting point is 00:27:20 What we're going through now is nothing. Yeah, when you put it in a historical perspective, I'm with you. Talk to us a little bit about your comments on this. the Roman Empire. I want to hear this. So one of the things that I try to highlight for people is I think the critical risk, and this is something that I always try to carry through in my communications with regulators, members of the U.S. government. We are in a situation where the biggest risk that we have is actually to ourselves, that in the process of trying to address the risks associated with the rise of China, associated with the inequality that has emerged in our system,

Starting point is 00:27:53 associated with the two high levels of debt that have emerged as the Fed has participated in bailing people out and encouraging them to take on additional leverage. We run the risk that we follow the same path that the Romans did under the Roman Republic, where effectively the equivalent of the congressional body, the Senate, right, becomes dysfunctional and unuseful and so divided by partisan factions that it's incapable of making any decisions. The Romans had a formalized process for how to handle that. That's what a dictator was. And so it began a process. Historically, a dictator was used during periods of military conflict where the state needed to quickly marshal the resources and didn't need to be distracted by various debates. That began to

Starting point is 00:28:40 increasingly turn into a de facto norm. And I would argue something very similar has happened in the United States over the past 60, 70 years. You know, you can start looking back at the march of the growth of power of the executive branch, particularly expanded under FDR and then continued expansion through additional executive order authority, particularly under Obama and on into Trump, right? We're looking at a situation where when we talk about the government, we're no longer talking about bicameral legislative system, and we're no longer talking about, in any real measure, the judicial system functioning is a series of checks and balances. What we're really talking about is Joe Biden's going to solve the problem. Donald Trump is going to

Starting point is 00:29:22 solve the problem, right? We're personalizing it. We're putting a single person at the head, and you're effectively normalizing the conditions under which people are going to say, hey, we just need to have one guy in charge. I drove my daughter and her volleyball team to a meet, a tournament, probably two years ago now, feels like it was forever. And my daughter and I were talking about the dynamics of politics, the dynamics of total war, et cetera, which again, gives you some idea of how much fun it is to hang out in our house. But her friends are sitting in the back seat, like, you know, sitting there going, I have no idea what you guys are talking about. And I'm like, your parents never talked. And they're like, no, no idea.

Starting point is 00:29:59 Like, okay, let me ask you just a really simple question. Would you prefer to vote into a system in which you know that the person you're voting for can't solve the problem, but they at least more represent your choices than the alternative? Or would you rather have just a person who can make the decisions and really fix it? And literally every single kid except for my daughter, or said, oh, absolutely that guy. I want that guy. And that sort of change. I don't think people understand what we have. I don't think they understand why a system of checks and balances were brought in. And this is ultimately, when you start talking about the dollar, the risk that you have to the dollar is that ultimately it is abused ability to be used for force around the world. There's only so

Starting point is 00:30:45 many times Europe will be threatened with access to the financial system before they develop an alternative financial system. China is very actively working to develop an alternative financial system so that they can quit. And this is the other thing that I think people tend to forget. We talk about the dollar as the global reserve currency and that it's been that way for a couple hundred years or a hundred years, whatever. It really has only been the case since 1991. With the fall of the Soviet Union, you ended the ruble block. But when we had Bretton Woods, the Soviets participated in Bretton Woods but didn't embrace the dollar as the reserve currency. They chose to use a ruble and offer an alternative.

Starting point is 00:31:25 And we just totally forget that because we don't have any real history of interaction with half the world over the Cold War period. So is it entirely plausible that we move to a multi-currency regime with trading blocks that don't interact? I think that feels very plausible. We're in a very clear process of de-globalization. And I think there's a variety of reasons why that's happening. The most obvious one being nobody wants to stand in the way of China as they try to deal with the collapse of aggregate demand that's going to be tied to their demographics. So a lot of people in the comments whenever they knew you were coming on the show, we got a lot of questions. You obviously know I'm a fan of Bitcoin.

Starting point is 00:32:03 This question came from a person with the handle, bald call. Instead of bold call, he was bald call and he was bald in the picture. And he asks, ask him his views on Bitcoin and why he's so disinterested in it. So I'm kind of curious to hear your thoughts. So I'm not at all disinterested in decentralized finance, cryptocurrencies, more importantly, smart contracts, etc. I am disinterested in Bitcoin. I could certainly be wrong. wrong in Bitcoin. And there have been many times in the past where I've told people, as I was uncertain as to the path that Bitcoin was going to follow, that they should get themselves to neutral, right? Effectively own enough Bitcoin so that if it became the story, then they were successful. And if it didn't work, they weren't killing themselves. It's hard for people to do. Effectively, I do it all the time in trading. It's what I call go to neutral. And it basically means I take a position, but it's a position that doesn't matter. And so I'm not spending my time

Starting point is 00:33:04 panicking. Am I going to miss out? Am I going to lose a crazy amount of money, buying into this stupid idea, et cetera, right? I've become much more comfortable with the idea that I don't think Bitcoin is going to work. And I think the entire focus of Bitcoin was on let's create an alternative in the aftermath of 2008 to the US dollar or to fiat currencies. And the presumption in 2008, I think was very straightforward, that governments were going to become weaker, right? The governments were going to lose control. And I think the data suggests the exact opposite, right? The governments are becoming stronger. And if governments are becoming stronger, yes, you'll see some defectors. You'll see a Swiss can't and decide, hey, we're going to take

Starting point is 00:33:47 Bitcoin, right? Well, what they don't tell you is they also take rubles, right? So, like, they don't actually care. This is the equivalent, you know, remember where they are geographically and what they represent, they're just saying, yeah, it's fine. As long as we can convert it back into Swiss Frank, we're perfectly happy to take it. I don't consider that a victory. I actually consider that a mark of weakness when people are like, hey, look at the Swiss Canton, right? So in just really simple terms, do I think we're going to move to digital assets? Do I think we'll move away from paper money? Do I think that that'll facilitate the continued strength and growth of governments as a force in our lives? Absolutely. And do I think that there's possibly a role for something like

Starting point is 00:34:22 Bitcoin effectively as the, you know, fraud phone cards, of the late 90s, if you're in Mexico or Venezuela, sure, it functions as a money laundering tool. You're in Venezuela, you can use subsidized electricity to try to effectively mine for gold in an artisanal fashion. You see the same thing in Zimbabwe, where farmers were unable to produce stuff on their farms, go and try and find grains of gold in the Zambizi River. But it's the same thing. It's not a meaningful component of the economic system.

Starting point is 00:34:51 You mentioned decentralized finance, Mike. What are your thoughts on that? So for me, it ultimately plays back down to part of what I'm concerned about with the dynamics of passive, right? So you're relatively young, but you don't remember a world in which preferred equity was an investable instrument or convertible debt. Those things don't exist for you. And you've got to ask yourself why. And the answer is very simple because they don't exist in Vanguard's world. So they don't have funds that have any real way to invest in those.

Starting point is 00:35:23 and they receive more than 100% of the marginal capital that's being invested in the markets. And as a result, anything that veers from that normal is going to actually face a penalty. You're going to have a higher cost of capital associated with it because there isn't a defined source of that capital. Ultimately, the complete wasteland that our equity and credit markets are becoming because of the influence of passive will create the conditions under which they break. and when they break, I fully expect that it'll be effectively a punctuated equilibrium type moment. You'll see a massive diverse emergence of diversity in terms of the financing tools that people use.

Starting point is 00:36:05 And ultimately, that's what I'm really interested in, right? Because the dynamics of something like a smart contract on an Ethereum base, and I could care less about the Ethereum itself other than the dynamics associated with the smart contract components to it. And there are other people who are far more in the weeds on this in part because I think we're at least five years out from any of this really mattering. But if you stop and think about what you're doing with a smart contract, you're taking a simplified CUSIP that would say something is equity or something is debt,

Starting point is 00:36:33 and you're suddenly converting it into something that can be any of those things and all of those things. So a debt covenant, a covenant in a debt contract is just a real world option. It gives me as the debt holder the ability to enforce action on the part of management that I otherwise don't have the ability to enforce. If I put that into a smart contract and I can compare that across thousands of securities, and I think about it in terms of its payout feature, I can start to value that as an option. And that's my job. That's what I do, right, is figuring out how to value those options.

Starting point is 00:37:04 And so the idea of smart contracts and their ability to diversify and create thousands upon thousands, effectively unlimited types of securities, that's incredibly exciting to me. What's crazy right now in that space is you effectively have, a CDO type event from the 2008-2007 timeframe that was playing out in a lot of the real estate. I suspect you have the exact same thing happening in the defy space right now where you got all these unknown entities that are creating these tokens. They're then dropping them into these decentralized exchanges. And because they can't capture any type of liquidity because they're not listed on an exchange,

Starting point is 00:37:43 they're pulling them together in order to narrow the volatility. then the more expensive coins are stepping in, call it the Ethereum, the Bitcoins are stepping in and people are receiving high yield, quote unquote, high yield on them supplying the liquidity and then that liquidity is nesting itself down into these pools just like a CDO 12 years ago is playing out in that space right now. But I'm with you on the technology of it in five years from now or 10 years or whatever it might be because that might be the relief valve to what we're seeing in the passive side where so much is just, I mean, it's mind-numbing where all the passive is going these days. So back in, I think it was 2015, Carl Icon basically rang the bell on his opinions

Starting point is 00:38:32 on passive and it kind of being this ticking time bomb from a systematic standpoint. And lo and behold, it wasn't more than a couple weeks later. You had Larry Fink from BlackRock step in and challenge them to a debate. I don't remember the specifics on what Larry was effectively coming back to Carl with, but what was basically his response? So Carl's focus was on the credit securities, right? So the credit ETFs. Highlighting was the liquidity assumptions around things like YG relative to the illiquidity of the underlying components. Larry Fink obviously came back in and disputed this for a variety of reasons, the most obvious being, you know, for purely business purposes. But in Larry's defense, these systems work great

Starting point is 00:39:17 as long as money is going into them, right? So the provision of liquidity is fine as long as there is a net inflow in. The other component that I love in terms of ETFs and, you know, Vanguard and others defend themselves on this basis that actually just made it into a piece from the Boston Fed talking about is passive investing in systemic risk, right? They always come back to us like, well, look, we don't actually have to pay you cash or YG. We can just give you the component parts, right?

Starting point is 00:39:46 And therefore, there's not a problem. That's completely insane. I didn't come to you and say, I'm selling my H.G because I want to receive a series of schlocky bonds, right, that I'm then going to have to dump into the market without the ability of the sponsor from H. YG to efficiently do that. I'm going to suddenly have thousands and millions of retail investors and other players who now have corporate bonds that they have no idea what to do with. They're going to be forced to dump this stuff.

Starting point is 00:40:12 At the end of the day, what Larry Fink argued is that there's no evidence. that this is the case, and they have delivered on the positive liquidity associated with it. And to be honest, he's right so far. I mean, the system works as long as money goes into it. It is Ponzi-like in that frame, and I want to be very careful when I say that. I don't mean that it is Ponzi and that they aren't actually trying to do something, but it is Ponzi-like and that once the process begins running in reverse, that's where you care about the liquidity. So we can make the argument that back in March, the system was running in reverse, and then the Fed stepped in with this huge elephant gun just loaded the economy with liquidity.

Starting point is 00:40:54 When you see what happened with the extra liquidity in 2008, and whether the days of tightening are just over, would we see twice as much liquidity be pumped in? And perhaps the actual amount is not the key point here. How do you see the Fed reacting to a new crisis, Mike? Yeah, I think that's right. The question is always, when you say double the liquidity, does that actually mean anything, right? Because, I mean, there's two sources of money creation. There's money creation that comes directly from the government. So the government can spend money into existence. The other way that money can be created is through the credit system.

Starting point is 00:41:30 So I can lend you money into existence if I'm a legal entity called a bank or have access to the leverage that can be obtained through a bank. In order to break that system, you need to have defaults, which effectively destroy collateral. And so this is the thing that I think is actually happening when the Fed steps in. I don't think they fully appreciate it. I think that there are some market participants that think in these terms, but it's not that the lowering of interest rates radically changes purchasing behavior. If you look at things like credit card interest rates or you look at auto loan interest rates, housing is a little bit different because it has some components of it that have fallen significantly. But housing interest rates have fallen 90 basis points

Starting point is 00:42:13 for the highest quality credit borrowers, lower quality credit borrowers struggle. We're already seeing dynamics of tightening credit availability in that space. So the pass-through is not really that meaningful. And you've done the analysis, right, the difference between a three and a half percent mortgage rate and a two and a half percent mortgage rate, if that's what you're relying on to buy the house, right, then like, that's just kind of silly. I mean, it really is. Because at some point, you're going to take it to zero. If you have a 30-year mortgage, you're still going to have to pay back the principal. And so, you know, you can engage in rank speculation and get a zero interest-only loan with, you know, zero interest rates. And then, sure, you get to live in the

Starting point is 00:42:49 house, quote-unquote, free for 10 years or five years, whatever the length of your no-interest mortgage is. But how is that really positive for the economy? Because what happens to rents then? Effectively, you just end up in a situation in which nobody in their right mind is going to do anything other than build and sell houses until you've exhausted the supply. And then you need to be thoughtful about what you're going to get back in 10 years is going to be enough to pay off that no interest loan. So you're kind of trapped in that framework. But at the end of the day, when the Fed cuts interest rates, all they're doing is making bonds go up in price. And when bonds go up in price, if you have a balanced portfolio or you have a risk parity type portfolio, the bond portion of your

Starting point is 00:43:29 risk has now expanded relative to your overall portfolio, you need to turn around and buy equities. Well, the stop levering part is hard, right? Because all of a sudden, the interest costs associated with your leverage or short interest rates have fallen. It's easier if you're doing it in the corporate sector and you don't have to worry about personal liability associated with it, whereas for the household sector, we've gone an incredible way towards eliminating the dischargeability of various types of debt. And I do think that that's another factor that people needed to consider, is that in the last 15 years, we've eliminated the non-dischargeability of student loan debt. We've eliminated the dischargeability of student loan debt.

Starting point is 00:44:07 We've eliminated the dischargeability of many forms of credit card debt. We've created conditions under which people can't escape many forms of debt that they take on, particularly when they take it on an incredibly young age, right? I mean, it's completely absurd to me that a 17-year-old is supposed to figure out how they're supposed to take on enough debt that is the equivalent in many cases to buying a house for the generation that came before. and then go study something where the availability of that debt has destroyed the price signal from the market that says, hey, you should really become an engineer, even if you think

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Starting point is 00:48:13 You had multiple conversation with Peter Thiel and Seth Claremont, two people who are just amazing critical thinkers. What is something that you feel is distinct about the personalities and what did you take away from those conversations? First on Peter, Peter's a brilliant thinker. He surrounds himself with really, really smart people and allows himself to be challenged in a way that many don't. Right.

Starting point is 00:48:40 Now, I think that the hardest part about being Peter Thiel is when you're working for Peter, it becomes an interesting situation when many of those around him would place the value and being in his orbit higher than they do in the intellectual curiosity. And so I do think that like everyone else, there becomes a component of an echo chamber. I think Peter offsets that for the most part by surrounding himself with people outside of his organizations and regularly bringing people in that are amazing, just absolutely unquestionably talented. If I'm thinking about like one thing that Peter does that I think everyone should do is just every once in a while feel comfortable and stopping. You say something to Peter and he will literally sit there and just go, hmm, hmm. And the vast majority of us feel a need to actually say something.

Starting point is 00:49:32 You feel a need to actually verbalize why you either agree or disagree. He doesn't have that. And it's an incredibly powerful tool. Seth is a really, really interesting guy. I've interacted with them a couple of times. First of all, he is so warm and so genuine and such a kind person. Like, it's almost impossible to reconcile the idea of a, you know, hedge fund genius and one of the truly warmest, kindest people that you'll ever meet. He just, just very consistently, if you meet Seth, he's always happy to listen to what you're saying.

Starting point is 00:50:10 And I don't think that's just me. I think it's true for everyone. The thing I would say with Seth is that he's one of those people who makes leaps that are extraordinarily well-founded in logic, does them faster than logic would actually allow you to make that leap. The way I describe value investing, I think would intuitively appeal to anyone who has read that book when he talks about margin of safety, what he's really describing is actually like figure out all the possible ways you're wrong and how that's, you know, not going to cause you to lose money. And, you know, for me, value investing is about figuring out why somebody has

Starting point is 00:50:47 to sell something to me. If they're coming to me, they're like, hey, you want to buy this from me? and I can't figure out that, no, they've got to make their mortgage payment, therefore they're going to give it to me for a really nice price. But I constantly find these things where people are saying, you know, oh, this is being sold by so-and-so, and it's being sold because he's diversifying his personal assets or, you know, etc. It's like, that's not how the world works, right? You want to find somebody who's being forced into a liquidation mode,

Starting point is 00:51:11 being forced to give you something, or you need to figure out a totally different angle in which it fits into a piece of your puzzle and complete something creating a quote unquote synergy that radically changes the outcome. To me, that's just the only way the value investing makes sense. The idea that you're going to look at a company and do a better job of forecasting their cash flows than everybody else put together and calculate their weighted average cost to the seventh decimal point, all you're doing is building an incredibly fragile model. I mean, like I spent the first 10, 15 years of my career in one form or another trying to

Starting point is 00:51:45 figure out better than somebody else what was going to happen next. but free cash flows would be with XYZ company and the access to the cost of capital is. And in really simple terms, you're just creating fragility when you do that. You're creating a portfolio that is very brittle to your individual forecasts as compared to very robust to the possibilities that can emerge around you. Why does the book, why is it not listed now? Why is he? Because Seth refuses to have anyone print it. Why? There's bootleg copies all over the place. No, no, no, no, no. I know that. But why would Seth do that? put an element of scarcity into the number of copies that are out there? Like, what's his logic

Starting point is 00:52:24 of not keeping it in print? I mean, look, I think it's a little bit like Paul Tudor Jones with his traitor video, right? You enhance the legend by keeping it away, right? If everybody had access to it like, oh, yeah, I know I read Seth Klaman's book. I mean, it's like securities analysis. It's sitting on everybody's bookshelf, right? Graham and Dodd, I'm an accolite of Graham and Dot. I'm a sober value investor. And I've read it, but I read everything. And if you took away something remarkable from that book. That's impressive to me. Let me go to a question from Lynn Alden, who said, my understanding is that you think that Volker was a bad Fed chairman, which is a very contrarian point of view. Ask him about that. I think that Paul Volker was an extraordinary

Starting point is 00:53:08 political animal. I think that he was a terrible Fed chair. And the simplest example that I would use of that is the actual data that exists. So there's a paper written in 1980. by Alan Blinder called the anatomy of double-digit inflation in the United States in the 1970s. It's very readable, quite easy. And what it points out is something very straightforward, which is that the metrics of inflation that the Fed was monitoring during the early periods of the Volcker administration from 79 until 81, included mortgage rates in inflationary conditions. So when the Fed hiked interest rates, what it was actually doing was raising mortgage rates,

Starting point is 00:53:47 which then was showing up as an increase in the mortgage payment, which was then coming through the CPI and saying, hey, the inflation rate went up. And so it was a positive feedback loop that Volker created where that became the driver of inflation in the 79 to 81 time period. And he literally just kept hiking it until he destroyed the entire economy. And his lack of awareness of this is appalling to me. And I think it's perfectly fitting that, you know,

Starting point is 00:54:13 the post-GFC worst legislation that's had almost no point. positive impact whatsoever, the Volker rule bears his name. He was a terrible Fed chair. He truly did not understand what he was doing. So look, the story of the 1970s, most people who think of the 1970s as this terrible decade in which unemployment was high, jobs were hard to find, et cetera, inflation was running rampant, your life was terrible, you know, blah, blah, blah, blah, blah. The 1970s had the highest level and rate of job creation of any decade in the United States history. It's a fact. It's not a disputed number.

Starting point is 00:54:51 That's not my opinion, et cetera. That's a fact. What actually happened in the 1970s was that we had to deal with the dynamics associated with an explosion of our labor force, tied to the baby boomers, tied to the entry of women into the labor force, tied to the formal entry of minorities into the labor force, under the Civil Rights Act. Most people tend to think about a labor force as a reduced labor force means the cost of labor goes up. They forget the demand side of the equation.

Starting point is 00:55:22 Somebody entering the labor force is making the single, simplest, and most powerful declaration they can possibly make. I want to consume more. Otherwise, you'd sit on your sofa. So when you enter the labor force, you're saying up front, I want to consume more. And what form does that consumption make? well, you need a place to live. That required somebody to borrow money in advance,

Starting point is 00:55:44 construct a structure for you to live in, put a dishwasher in it, put a refrigerator in it, put air conditioning in it, et cetera. All that has to be done before you touch it. And you're doing that entire thing on credit, right? So it's money that is being created on another form. What did Volker do and what did the Fed do in the 1970s by reacting to the increase in prices

Starting point is 00:56:04 associated with this outward shift in the aggregate demand function tied to an explosion of the labor force, largely tied to demographics and some regulatory changes, they chose to respond to it by trying to hike interest rates to keep prices from going up. Well, that has almost no impact. I don't know if you remember what it felt like to be in your 20s and your incomes rising rapidly and you could literally care less. That's why so many 20-year-olds rely on credit card debt because they presume that their income is going to rise so rapidly and they absolutely need that toaster oven right now.

Starting point is 00:56:35 And so it has very little impact. Effectively, there's a hyperbolic discounting rate for young generations that were streaming into the labor force and wanted everything and were being presented with a variety of financing options that allowed them to obtain it in a manner that they hadn't previously. And the feds out there hiking interest rates at the exact same time that the oil crisis destroyed a significant component of the capacity of the U.S. economy that relied on oil fire generation. So you had an outward shift in the aggregate demand curve, an inward shift in the aggregate supply curve. Guess what? You get a spike in prices. And Volcker's reaction to that was,

Starting point is 00:57:12 you know, more cowbell. You know, Ray Dalio said that he was the best fed chairman that ever existed. Well, there we go. Ray and I are just going to have to disagree on that. It wrapped up the discussion. I had to throw that in there. Yeah, I know. Perfect. One of the things that I would encourage people to do is to look around the world and look what happened to inflation rates, they rose on a coordinated basis on a global front from basically 1965 to 1979, the minute that Volcker took office. Everywhere else in the world, inflation rates fell starting in 1979, except for the United States where Volker hiked interest rates, driving this dynamic. It's well documented on a contemporary basis in Allen Blinders piece in 1983 that the Fed itself drove that inflation, and yet we celebrate Volker as having solved

Starting point is 00:57:59 inflation. It's just not true. All right. The last question. You're such a well-read person. We talked about Hathseth Claremont's book, Margin of Safety, is perhaps the best value investing book out there. But which other books would you recommend that has really shaped your character as a critical thinker? I don't like the world that we live in in passive. So I would not encourage anyone to try to replicate what I have done in terms of building that body of knowledge because my hope is that it doesn't continue to exist. So I would, would encourage people to try to focus themselves on doing what you're supposed to be doing with

Starting point is 00:58:34 investing, which is figuring out how to identify valuable companies, how to be thoughtful about how you allocate your capital to them, et cetera. And one of the things that I always want to make very clear to people is while I'm extremely concerned about the environment that we're in, I don't think that means that we should all throw up our hands and walk away and stop. And so books that were particularly powerful for me earlier in my career, Phil Fisher, common Stocks on Common Profits is world-class. Given a choice between the enjoyable read of common stocks on common profits by Phil Fisher and rereading securities analysis, I'll choose a gun. The second thing that I would say on that is that I encourage people to read biographies.

Starting point is 00:59:22 I know you do your stuff on billionaires, for example, because what you want is you actually want the anecdotes, and if you can retain those, right? I mean, if there's one thing that I would say that I'm really, really good at, it's at holding these like really apparently meaningless pieces of information until they become valuable, right? So, like, a huge chunk of my insights on the dynamics of Vanguard are remembering reading a newspaper in 1994. I mean, this is crazy, right? This is literally 22 years before I began to really develop my theories around passive. and reading this paper in 1994, and there was a discussion around the challenges the Vanguard was having in terms of tracking error, right? And I have no idea where that sat in my memory and how that sat there in that way.

Starting point is 01:00:06 But, you know, read is kind of the most important. It doesn't actually matter what you read. It could be, you know, an aberrant piece of information if you can hold on to it. But the other thing that I would say is like, you know, read Jack Swagger's Market Wizards. Read things that inspire you personally that give you the ability to capture little pieces from, history, right, that allow you to capture how people were going to react. One of my favorite books people have heard me recommend before is The Mind of Wall Street by Leon Levy. It's out of print, I think, at this stage. I mean, he has even less incentive than Seth Clarman because he's passed

Starting point is 01:00:39 away. But it's just such an extraordinary insight into how somebody could approach investing after the Great Depression. And I really think that that's part of what we're looking for as we come out of the desert of passive, which we eventually will. I don't know how it's going to resolve itself. I don't know how we're going to come out of it, but I know we will. And so to be prepared on the other side of it, that's part of the reason you hear me talk about things like, you know, the dynamics of crypto and smart contracts, et cetera, because I'm trying to already prepare my mind for what that's going to be like. And if I allow myself to be overcome by the despair of what we're watching right now, that's totally useless. It may not come in time for me to have a

Starting point is 01:01:19 serious career doing it because I am, I mean, I'm 50 years old. But that's what I would encourage people to be thinking about. What do you want to be doing in 10, 15, 20 years? And how are you preparing your mind for that world? Well, Mike Green, wow, can't thank you enough for coming on our show. If people want to learn more about you, give me a handoff where they can find more about you. You can go to logicoffunds.com, www.orgicoffunds.com. I'm well followed on Twitter. Confusingly, I'm an old bald guy from the Princess Bride on Twitter, but it makes for interesting cocktail conversation. My Twitter handle is at Prof Plum 99.

Starting point is 01:01:57 And I would encourage people to follow my partner, Wayne Himmelsstein, who is absolutely brilliant as well. He's at Wayne Himmelsene. We'll be sure to have all that in the show notes. Mike, thank you so much for making time for us. My pleasure. Thank you very much. All right, guys.

Starting point is 01:02:13 So this part and time in the show, we'll play a question from the audience. And this question comes from Anthony. Hi, Preston and Stig. My name is Anthony from Melbourne, Australia. I'm a huge fan of the show, so keep up the incredible work you guys are doing. I recently listened to an interview with an expert investor who said that for insiders, there are plenty of reasons to sell a stock, but only one reason to buy. They think the price is going to rise. How often do you look at insider transactions of directors, CTO, CEOs, as confirmation when to buy a stock? Also, what stock options do insiders get access to that gives them an edge over retail investors, how do these stock options

Starting point is 01:02:50 generally work? Thanks for having me on and I look forward to your response. Thanks. So Anthony, you bring up a good point that all investors should include in their analysis of stock. We should always look up what the insiders in the business are doing. Insiders per definition know more than anyone else about the company. So whenever they buy or sell, we should pay attention. As you mentioned, insider selling is not as significant as buying. Insiders are usually exposed to the company much more than us investors. For instance, you can have a CEO that's already been compensated based on how well the company performs, so it is not surprising that the CEO wants to lower his or her exposure to the

Starting point is 01:03:31 performance of the company by selling options. Another example could be that a founding or key employee got stock options as a part of their compensation plan, and they're now looking to cash in for private consumers. That is perfectly understandable and there's nothing wrong with that. Buying is more interesting because it often indicates that the company will do well in the future. That is also why insiders are required to disclose their actions to the SEC. An example is Warren Buffett who recently added to his stake in Bank of America. He already owns more than 10% of the company.

Starting point is 01:04:04 So even though he's not holding a formal job at the management or board the company, he's considered to be an insider because he has information that the market does not have. So whenever you ask whether or not I look at insider trading before buying individual security, the answer is yes, I always look at it, but it's never a deciding factor. I've multiple times bought into a stock where there's own insider selling, and while that is not a plus, I don't consider it an issue in most cases. Having said that, I don't think I ever sold a stock whenever I saw a lot of insider buying. It is one of the key factors that is interesting to look at.

Starting point is 01:04:41 Insider trading is one of the key factors that is always interesting to look at. All companies have different key metrics that are very important, and you should first of all pay attention to what the business and industry-specific key readers are telling you. But really what is neat about inside of trading is that it's important for all companies to understand. So at least you should take note of if you see anything significant. And keep in mind that it's very common for most companies to do in the business. little insider selling? Really what you're looking for as an investor is a significant change in

Starting point is 01:05:11 the volume. You can find much more information about options and warrants in the annual report. And we tend to use the terms options and warrants interchangeable. But technically, there is a difference since warrants are issued by the company itself, whereas options are traded between investors. But whenever you look at it, at first glance, it can look a little overwhelming, looking at the annual report and especially about options and warrants. But with a little practice, you'll see what is important. The exercise price, meaning at which price a share can be bought, is one thing, and then you have how many options they have and the expiration date.

Starting point is 01:05:46 Unfortunately, you have this crazy accounting rule that options are not expensed. So you can find a significant dilution of the shares of standing there, meaning it's not unimportant if you want to invest in a company. And even worse, you see new management being hired getting a lot of options that can be exercised way below market price. Now, there's nothing wrong with options per se, but since they are tied to the performance, it's hard to see why they want to issue options at a price that it traded at years ago whenever that new person in the management didn't even have an impact on that performance.

Starting point is 01:06:18 It is effective to taking money away from the owner at giving it to the new management. And again, it's not even been an expense to the income statement, but hidden as a subpoint in the annual report. But okay, enough about my rant here. to your question. And then you have expiration date. And that's important to look at because if you suddenly see a high degree of selling, often it's simple because it's near a quarter's end, where the money would be lost if the options were not exercised. So Anthony, I don't have too much to add beyond what Stig already covered because he pretty

Starting point is 01:06:51 much covered everything from the same vantage point that I see this as well. I pay much closer attention to the buy side than the sell side, just like Stig had mentioned. Though the one big tip I would like to give you is a resource that I personally use. The name of the website is insidearbitrage.com. We'll have a link to this in the show notes. The founder of the site, his name is Asif Seria, and he does just a fantastic job laying out all sorts of not only buys and sells of insiders, but he also does merger arbitrage, spinoffs, buybacks. and he does a fantastic job, just laying out all the information for key executives and people that are holding significant chunks of stock in various companies.

Starting point is 01:07:40 And whenever they're making big moves that are getting published in the open markets, Asef's website is just capturing all this information. So I would highly encourage you to go there and check that out. And hopefully it'll be a useful tool for you. So Anthony, for asking such a fantastic question, we're going to give you access to our TIP finance tool, which helps you do intrinsic value calculations. It helps you out with capturing momentum information, correlation data, all sorts of things. It helps you manage your portfolio, the sizing, all that kind of stuff. So we're really excited to be able to give that to you.

Starting point is 01:08:13 And if anybody else wants to get a question played on the show and to potentially get access to TIP finance, just go to Ask theInvesters.com. You can record your question. If it gets played on the show, you get free access to TIP finance. All right, Anthony, thanks so much. All right, guys, Preston and I really hope you enjoyed this episode of The Investors Podcast. We will see each other again next week. Thank you for listening to TIP. To access our show notes, courses or forums, go to theinvestorspodcast.com. This show is for entertainment purposes only.

Starting point is 01:08:47 Before making any decisions, consult a professional. This show is copyrighted by the Investors Podcast Network. Written permissions must be granted before syndication or rebroadcasting. Thank you.

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