Add Complex Currency with airSlate SignNow

Justify digital sign

businesses don't seem to be in the business of making profits or making money anymore it seems like businesses today are in the business of raising money maybe pushing revenue when you debase the money the way that you're debasing it the name of the game is how can i get this off of my balance sheet and exchange it for something that has a lot of growth to it or something that's going to be able to outpace this significant amount of the basement obviously the government uses cpi right consumer price index to measure that inflation and it seems like they've changed the way they do that so many times 80s the 90s i mean it's constantly being changed the debasement rate wasn't anything like it is now um you go into the into the early 80s it was really showing up in the cpi gauge and that's why like you were saying earlier they kept adjusting it that's what i try to tell people like you gotta focus what's really happening is you're losing purchasing power right you're not buying as much and so the key is to retain purchasing power or increase purchasing power really noticeable that there's an issue with the money supply obviously we come off the gold standard through that period of time and we make this transition into this floating currency now i would argue we're in another situation where all those same things are rearing their heads again and when you say tangible assets you're talking about real things so commodities gold silver things that can't be debased um that's all that capex that these companies are paying to sustain and manage but yet um in a rapidly debasement type currency world that becomes a massive expense and a massive frictional drag i feel like we can understand natural market moves which um but today it's not about natural market it's about the seven fed bankers or twelve guys in a room and like what's in their head hey everyone welcome to another episode of the market disruptors show and today i am joined by preston pish he is the host of a one of the bigger podcasts that i've been listening to for a while the investors podcast studying billionaires for a long time now diving into bitcoin and today we are going to dive into lots of fun stuff financial stuff bitcoin stuff should be a pretty good time preston welcome to the show hey thanks for having me love being here mark yeah so i'm so glad we were able to do this we had a good time doing one together with uh swan bitcoin recently that was a lot of fun seemed like it got a lot of good reviews and so i wanted to kind of build on top of that so thanks for that i i said that you know you're the host of the the investor podcast and and i've been listening to that podcast for quite a while um maybe you want to just give us a little bit of a background on on what you're doing what you're focusing on well so you know we started off the show with a really strong focus on warren buffett um just out of the interest of exploring other investors because there's all these other investors that have made tons of money in the market stig and i just were like all right well let's let's start studying some of these other folks like how does this guy do like a perfect example when i think about something that's very different to warren buffett is like george soros or stan druckenmiller and how they invest through momentum and at when you really start to study one person in particular and you and you buy into the dogma i'll call it of how they invest it sometimes is uh uncomfortable to kind of study other ways that people were doing it because some of it just doesn't necessarily go hand in hand or at least you don't think that it does and so as we were doing the show it was really fun to to try to learn how these other people were doing investing because it challenged our own core beliefs and made us really try it i feel like it rounded me out now you know people will maybe disagree or agree or whatever studying people like ray dalio he has this different approach he got into this whole thing called risk parity which i can talk in a lot of detail if people have interest in it but um you know it we started off just kind of real narrow it kept expanding and as we were studying all these new people you're just like wow this world is way bigger and way more complex than you might think it at face value and there's people that have made billions for decades um implementing approaches that are just slightly different or completely different than what you might originally think is the only way that works so yeah i love that because i've really built my career business and investing wise off of this off of kind of a similar concept which is success leave clues and so right you find someone else successful you find out what those steps they did you try to duplicate those things and hopefully have about the same results and so um yeah everything i've done in business and investing i've always tried to do that um and so that's that's really cool that that's kind of how you've been doing that so as you've been studying these different people you've i'm sure seen the evolution of finance which i want to talk about um hey just a real quick interruption to let you know that this video is brought to you ad free by blockfi now they're giving you the ability to hold your bitcoin and your crypto as it goes up in value and at the same time you can earn high yielding interest on it so you can basically hold it for all the upside potential and then you can make cash flow off of it at the exact same time now opening accounts super fast super simple and they've offered to give me up to 250 for every sign up but i told them you know what let's give it back to you so you can now go and you can get the 250 whenever you set up your account and all you have to do is just check the link in the description for details set up an account super quick and easy and earn up to 250 brought to you by block five so check them out i was gonna ask you a question uh i don't wanna get i don't wanna jump too far ahead into bitcoin but i was curious let's talk about that first so what have you seen you know studying these investors obviously warren buffett right he's he's uncle warren right he's been doing it for a long time uh you mentioned soros and drucker miller kind of the same camp now things are a lot different today and it seems like some of the old guys like buffett really aren't keeping up with the times a little bit um just finance has changed overall what have you seen in that evolution or what have you seen between these successful people well i would just say in general i think if you look at what's happened over the last 10 years specifically and and how that's impacted a lot of their investing approaches i mean the thing we're here that both of us have a real common interest in is bitcoin and the reason why is because it's a change in how currency is being looked at and so when you look at their approaches buffett is very micro focused so he's looking at the companies he has been on record for decades saying if the chairman of the federal reserve came up to me and told me what they were going to do as far as moving interest rates it just wouldn't concern me in the least bit and so to this day i i think if if you asked him that he he would tell you to this day that he still does not care what the central banks or what the chairman of the federal reserve or any other central bank is going to do because he's looking at businesses and he's looking at businesses that are profitable right so is that approach still valid today um i would kind of push back on that right at least for the last 10 years because when you start getting into how manipulated the markets are um value investing has significantly underperformed uh momentum investing which is more the soros druckenmiller style of of investing yep now what i would if i was going to uh stand up for warren i think he has performed exemplary over the last 10 years considering the circumstances because if you're looking at value only funds like etfs and stuff they've been crushed but if you look at berkshire hathaway and how it stood up if you go to the market bottom until today um it has done extremely well as far as keeping pace with the s p 500 and maybe not so much the nasdaq but the s p 500 he has done really well at sustaining the the growth rate of his company relative to that even though he's executing a value investing right uh strategy yeah yeah that i would say you know i've studied both of them not probably near the depth that you have but um the the comment you made about buffett even if the fed uh whispered in his ear right he wouldn't jump on that whereas i've studied um druckenmiller and he's that's what he lived off of right he's another thing that he he holistically pays attention so isn't that amazing that you see two guys that have decades and decades of performance to back up their decision-making that validates their decision-making yeah and uh literally the polar opposite approach where i would tell you drucken miller like you said is hyper focused on anything that the central bankers are doing and his entire philosophy of where he's going to try to invest is like that's the root of where he's going where warren is looking str straight to the free cash flows that's the thing and the competitive advantage of the business those two things are that are really where he's hyper focused so if i if i'm looking at the investing world and how things have changed what it seems to me and it seems where buffett has kind of lost a little bit of an edge where drunken millers can maintain the edge is that today businesses don't seem to be in the business of making profits or making money anymore it seems like businesses today are in the business of raising money maybe pushing revenue totally so uh you know when you when you make when you debase the money the way that you're debasing it the name of the game is how can i get this off of my balance sheet and exchange it for something that has a lot of growth to it or something that's going to be able to outpace this significant amount of the basement now whether people are doing that via calculation or they're just doing it via intuition it doesn't really much matter because that's that's what uh at the end of the day that's the decision making that they are making based on what we've seen over the last 10 years and when we look at debasement rates i mean everyone knows i've been thrown around the term michael saylor's been throwing her lynn alden's been thrown around that you know m2 debasement is pretty much what we think the inflation rate really is now you're going to get a lot of people that especially people on wall street that'll argue that you'll definitely have fixed income people that'll argue that because uh boy that wouldn't look good if they were buying things with one or two percent yield and the real debasement rates you know inflation rates 15 percent right um so i mean there's it really comes down to how you're seeing things but um i think that your comment that the incentive structure is for you to invest in something that can outpace that or has a growth rate of users that are being onboarded with a very low expense structure relative to how many people you're able to reach out and grab on a global scale digitally um that's man that's been the that's been the trade and that's been the winner of the last decade so yeah and i expect it to continue until uh hard money reappears or at least the majority of of the market participants see hard money reappearing yeah which we're definitely going to talk about but to that point um looking at m2 and looking at the rate of that growth uh you know it's 15 or whatever that is it i mean i it goes into different areas and i know one you know obviously the government uses cpi right consumer price index to measure that inflation and it seems like they've changed the way they do that so many times 80s the 90s i mean it's constantly being changed um we have you know other sources shadow stats or uh you know chapwood index or something like that which i think gives a more accurate picture and it shows 10 to 12 but do you think that inflation is more of a nuanced argument right where it's like things that i might buy are priced differently i mean obviously we've seen massive inflation in certain assets like beachfront property or or collectible items and things like that versus other items is a little bit more nuanced today than most people want to make it believe like it is let me think of an example that would describe my thoughts on quote-unquote inflation it's almost like um it'd almost be like somebody's saying hey if if it's got a cell well then it's it's a life form it's so generic that people could look at like are they talking about a human being are they talking about mammals are they talking about right uh are they talking about uh you know i mean you could the list could go on because when you think about biology it's just got so much breadth and so when i think about how you can how you can apply such a generic term like inflation to everybody's preconceived labeling that they have on a subconscious level of what that means to them and um you know when i think of inflation i think of debasement um the money that er excuse me the currency that i'm using is getting debased right and what do i got to do in terms of owning certain things in order to protect my buying power inside of this ecosystem of currency that's being used that's how i look at inflation um and that's how i would look at it from a terminology standpoint a labeling standpoint because anything that you own that's not keeping up with that the basement rate you're losing buying power yeah that's just the end i mean there's there's no arguing or refuting that so i think that's the key term is buying power i say purchasing power but the same thing and so that's what i try to tell people like you got to focus what's really happening is you're losing purchasing power right you're not buying as much and so the key is to retain purchasing power or increase purchasing power um and so trying to find those assets that do that so if and mark if you're using a sound money sorry if you're using a sound money and you're used to using a sound money that's not being debased in a way that is really that meaningful or something that you just kind of um like if you go back in time and you would look at what would be a good period to use i think the 90s when the debasement rate really wasn't nearly as high as it is now or you'd go back into like the 50s where the basement rate wasn't anything like it is now um you go into the into the early 80s it was really showing up in the cpi gauge and that's why like you were saying earlier they kept adjusting it um so at these various points in time it's a lot easier for people to just ignore this and just do economic calculation like they normally would the textbook way of of doing discount cash flows and things like that in order to come up with valuations but when you get in in these situations where you go in from the 70s into the 80s really noticeable that there's an issue with the money supply obviously we come off the gold standard through that period of time and we make this transition into this floating currency now i would argue we're in another situation where all those same things are rearing their heads again and you know you go back to that period of time uh warren buffett was writing a lot about you know how do i protect how do i how do i deal with this hurdle rate of 15 on the 10-year treasury um when the money is being debased so quickly and he he he writes about this extensively one of the neat things that he talked about during that period of time was um intangible assets versus tangible assets and this i mean you could go back and read the shareholder letters it's quite fascinating to hear his discussion points on this and his big point was is if you have a balance sheet that has a lot of tangible assets it's really hard to keep up with the repricing of those as you have such a high debasement rate and if you look at intangible assets call it through brand power or whatever think of it like this if you have a product on amazon and uh you have almost no it's a it's a digital asset call it a course a digital course that you're selling you can replace that by the day because it's intangible but if it was a tangible book and you had 10 000 in inventory on amazon and you sell only 100 a month and the inflation is going up like it's it's a little bit harder to manage the cost that you paid for those 10 000 books up front to go through the the inflation piece so i find it really interesting that all the things that we're seeing right now are so similar to back then when he was talking about these things and shareholder letters which a lot of people aren't going to go back and read shareholder letters from the 1980s i think yeah he was talking about that like in the early 1980s shareholder letters but it's all valid stuff that applies today so if you've got a business it you should be trying to create assets that are intangible because your ability to reprice them uh during debasement is is much more favorable than trying to do it with tangible assets and when you say tangible ask that you're talking about real things so commodities gold silver things that can't be debased specifically i think in in if i'm comparing it to the way warren was describing it in his shareholder letters he's looking at it as inventory churn and he's looking at it from uh anything that you have to hold as a business tangible item uh you know like let's say you're you got some type of metal cabling or whatever uh if you have a large bin in order to hold all of that and you've built this infrastructure to hold all these coils or whatever um if the money's not getting the base well you can take advantage of all that capex of your your building in your infrastructure but if it's getting the base at a at a breakneck pace you don't want to fill up that that huge warehouse that you've got because you don't want to take that on because the cost of of securing it and then selling it going into you know the next month it's getting eroded rapidly so now a company that had prepared themselves for these kind of things they're sitting on this massive amount of infrastructure think about what's happening today right now i mean all this stuff that he was talking about was valid today all this uh commercial real estate right all that kind of stuff that's all that capex that these companies are paying to sustain and manage but yet um in a rapidly debasement type currency world that becomes a massive expense and a massive frictional drag to the business in order to keep pace with the debasement and so if you're a business that has a lot of intangible assets this is really important when i stood up my company i had read these shareholder letters before i even you know turned my company into an llc and i i learned very early on that if i was creating assets i probably wanted to do it as you know in a manner that involved mostly intangible assets if possible so it was a really uh important read for me foundationally very early on uh reading those shareholder letters and it's coming very useful as we look at what's happening today and and how much the money is yeah the currencies being debased you've really set set the problem up pretty well and i think it only gets exaggerated because we have no schedule or no idea or view into how much worse or how much faster it can go right it's like almost like i feel like we can understand natural market moves which um but today it's not about natural market it's about the seven fed bankers or 12 guys in a room and like what's in their head what are they going to do right like and we have no we have no idea what they're going to do so then how do we plan for that we can't i guess well and i think um the other thing that i would highlight is what he was what everybody was experiencing back in the 70s and 80s um was the transition point it wasn't the actual the the default wasn't actualized back then even though that's what was playing out so when you come off the gold standard it's a default at that point but the default wasn't realized because everything continued to press forward globally and everything appeared to be somewhat normal it felt like everything was normalized uh even though there was this big major event that took place where pretty much the entire world came off the gold standard at the same time and said because everyone was pegged to the dollar so now we are at the realization point of those past decisions um everything that led up to that event in 71 which played out from 19 uh the 1940s up until that point all those decisions that led up to that is actually getting realized right now and so i think that i think that this is going to be such a bigger event than anything they saw back in the 70s and 80s because the debt is it's going to be impaired eventually i have no idea when but there's going to be there's going to come a point where fixed income investors are going to look at this and say the debasement rate is nowhere near cpi not even in the same universe of cpi and it's going to be a massive massive event when it when it's eventually realized yeah it seems like we we know what's inevitable we know what's going to happen obviously trying to figure out when makes it makes it impossible but we can see that we're on an unsustainable path i mean just look at the central bankers right they have really two tools at their disposal interest rates and debt and we're kind of out of interest rates and we have so much debt how much more can we take like they're almost running out of tools it seems like and we hear talk of you know the great reset whatever that's going to mean we can see that they're trying to actively change the financial system right whether they're trying to change from the libor to the software indexes they're trying to change the currencies trying to get current like central bank digital currency set up to like make this transition so it's almost like they're almost like just trying to keep it going until they're ready to make the switch and then it might come fast and swift do you have any thoughts on that well so they're going to try anything and everything to keep things uh quote unquote normalized to keep the semblance of stability in place but until until they're ready to make a switch or they're going to try to keep it normalized forever and i think that's why the market oh they're not going to be able to do this forever well not that they're going to be able to but do you think they're going to continue to try or they're trying to keep it going until they're ready to make a switch i think they're going to continue to try and um i think the reason you're not seeing people that are buying fixed income corporate i mean they're stepping in and buying that market they're being incentivized people that are that are owners of this stuff are being incentivized to get more because the the governments around the world have demonstrated that if people start selling off or get spooked they'll step in and provide a backstop and limit the amount of selling that can take place so as a person that would own something like that you get comfortable when thinking hey the government's got my back no one's there's no other there's no other currency in the world to run to is the mindset today so why wouldn't i keep participating in this charade and where i think it all kind of comes on glued is um no one sees that that other alternative today most market participants don't see an alternative to the currencies that exist so they're saying well you know if things get really bad they're just going to reset they'll everyone will go back on a gold standard and and they'll have central bank digital currencies the problem with that narrative is that at the root of the issue we've got is fiscal spending and so when you look at the direction where you look at the direction of where that's going it's not just going higher it's it's rapidly accelerating in a direction where people are voting for even further and further fiscal spending because they want it into their pocket they want their money now and as long as you have that habit that cognitive collective global habit habit of people saying the government owes me a check right as long as that's in place i don't care what you peg it with the currency that they that they create i don't care what you peg it to you're going to have to come off that peg almost immediately almost immediately yes when you look at bretton woods to 1971 they went uh you know four decades three decades of uh of it remaining paid that the basement was slow enough that it lasted three decades if they did it today it might not even last a year before everyone's saying uh there's no way they can make good on this yep there's just no way so i mean that definitely sets the stage and so it's a good transition so as you just said right like um most market participants don't see the option to get out of that and obviously that's what brought us here together to talk about this and so the option that we see is is bitcoin and so i know depending on you know whoever's listening to this there's different levels of people but i i recently heard you talking about something that's really been happening and how right now 2020 2021 is a lot different than back in like 2017 and you were talking about like the level of entrenchment that's coming into bitcoin i think that's the word that you used so it's like not everybody knows about this but it seems like it's catching on pretty big and at this point we're even seeing some of the big financial players even some of the government people starting to get involved so do you think they're starting to like see the need enough where they're starting to explore that more yeah i think they're seeing the need and i think they're also seeing the opportunity cost of not playing the game because especially in the world of finance if if you openly step out and say yeah i don't want anything to do with that that probably means you're taking a position yeah that's just part of of the culture of finance is and so i think there's a lot of distrust um between each other between the participants because anyone who looks at this and and quickly understands what this is realizes that if you aren't taking even a small position um and others continue to participate you're the sucker at the table it's the prisoner's dilemma but it's between nation states is really what we're talking about is the ultimate prisoner's dilemma between nation states yeah well that's that's the game theory and that's the game theory yeah and um i think i think you have enough people uh here in the us over in the uk uh singapore i mean germany people people know what this has the capability or the potential to turn into so if you're doing things to limit that and others aren't boy oh boy the writing's on the wall that you're going to get left in the dust yeah and i don't think anybody wants to be left in the dust at this point well i would hope not it seems like the the us you know the federal reserve has the most to lose seen as the dollar still the reserve currency so other countries might be more willing to adopt it but i could see the us wanting to be kind of the last person to jump in there and we're seeing some mixed messages so we have you know sec the new sec incoming chair gary gensler it seems to be pro bitcoin i know you've you've talked about him teaching at mit about bitcoin we have uh you know larry larry summers he was talking about how bitcoin is here to stay um and so we have like some of these government people that seem very pro then we have like janet yellen now talking about how it needs to be either stopped or shut down because it's you know nefarious actors we have christine lagarde who's not part of the us but part of the ecb talking about it as well so we kind of have this mixed message there um how does that get reconciled well when you hear their lagard and yellen's comments they're specifically saying that that the use of it being used as payments for nefarious activities needs to be stopped they're not saying that bitcoin the protocol needs to be shut down and i think if even if they would say that i think it would get some chuckles out of people that understand how it actually works um so their comments to me seem to be aligned with what any policy maker would say for some type of loophole for nefarious activity for payments um that doesn't maybe i'm just looking at it too literal maybe i'm not i don't know but that's how at least i'm interpreting it and um i think at the at the other if i was gonna say one more thing about it uh i would say that they're in the business of stability that's the thing that they really are focused on and so does janet yellen let me give you two examples janet yellen goes out and says bitcoin's going to change the world uh and we're looking into it extensively i just don't think that would be a really calming event for the market i think that would be something that would set it a blaze right and it would it would lead to instability it'd be good for the small amount of bitcoiners it'd be bad for everybody else now if she comes out and says kind of like what she said everyone's like oh well they're gonna ban it everyone's got their opinion on their interpretation of what she said and i just think that it's much more it's a it's a stabilizing comment for the market at whole in the in the way that she views it 100 trillion plus debt market all these kind of things like those are that's how she's viewing the the quote-unquote economy and so she's saying whatever she can the forward guidance is the big you know buzz word that they use before when you look at how they've been using forward guidance for the last decade it's always been in a manner to try to provide as much stability moving forward as possible irregardless of whether it's good long term for the market or not yeah i remember a couple years ago hearing christine lagarde talk i think when she was still at the imf and she was talking about how um even like financial innovation i think specifically she was talking about cryptocurrencies maybe it was 2017 and she was saying it's a threat to the stability of the financial system and like she was saying we don't want innovation because it would disrupt the system but i guess when i listened to that listen to myself say that through the lens that you just provided i guess it does make a little bit more sense i think they get it i really do i think at the if if you would sit down with them in a private room and say none of this can go on the record and you were able and you were able to extract what they really think yeah i really think they get it i think they know where this is going um no i might be i might be giving them too much credit i don't know but uh you know gary ginsler's a perfect example watches watch his free 24 lesson course each each lesson is an hour long if you don't think that guy doesn't know what's happening you're out of your mind and so these people are in government and like him i mean he's going to be the new sec chairman taught the course at mit on this topic in depth i guarantee you you could probably put him up against any person in bitcoin and he knows it just as well as them yeah maybe maybe even better yeah so they're there they're informing they're having these conversations with these people and here's here's some page just another quick interruption to let you know that this video is brought to you ad free by block fi now they allow you to hold on to your bitcoin and your other cryptos for all the potential upside and at the same time you can earn high yielding interest on it so it basically cash flows now with block fi you can earn up to 8.6 interest you can also borrow against your crypto as well it's super fast it's super easy to set up an account and right now you can get up to 250 when you set up your account check the link in the description that i have for details in order to claim that 250 because block fi is the future of finance just check the link in the description for all the details of how to claim your 250 today something to think about if you're gary ginsler and you know as much as you know do you really think he doesn't have a personal position yeah i mean even a small personal position so if he if he's now advising on the direction of this stuff do you not think that there's and i'm going to use the word conflict of interest but and it might not be the right word but if he's advising somebody on the future of this stuff you cannot tell me that he is not more favorable to something that he would own personally in his own account um than trying to ban it and prevent it from happening now think about how many other larry summers i mean you watch that video of him i am not a fan of this guy right but you watch the video of of him talking about it and when i posted the video somebody wrote sure sounds like a whole coiner to me and i just laughed out loud because i thought the exact same thing when i watch the video like you can't tell me this guy doesn't have this in his portfolio you're out of your mind so how's he advising people yeah yeah good point i think you know as far as a conflict of interest i mean everybody has a conflict right and that's right um i remember whoever that last supreme court justice was that got elected by trump i forget what her name was but you know oh she has a conflict of interest because she's a mother of seven kids and she's a catholic and it's like well if she wasn't a catholic then she'd have a different conflict like it's like everyone's got something i don't like the term that i use to be honest with you but i it's it's a term everyone knows yeah yeah i get what you're saying yeah so um [Music] so so we've kind of set the stage we got the problem we got a solution we have uh one of the biggest objections that i hear all the time is that the government's going to ban it and so that's why i kind of want to tackle that we have some really big news around it which of course we just talked about but it seems like no matter how much advancement we make no matter how much entrenchment your word we have coming into the system yet there's still the fud right the fear and certainty and doubt almost like these bombs that like get picked up um so we have a couple i want to just jump into so we have like the tether fud that's probably the biggest one that's been going around and i i can't even count how many messages i must have got asking my opinion on that i'm sure you did as well yeah definitely i'm curious what you think about that i mean uh is it like some sort of bias like these people are mad they didn't buy it i'm curious what people are really afraid of like i mean are they not gonna be able to redeem their tether for a dollar like what does that matter to the bitcoin or is it because you think tether was artificially pumping bitcoin and if it disappears then the pump will be gone what's your what's your thought on that whole tether fight so my first question would be why do they only decide to pump it every four years um yeah there's no way that you're gonna be able to uh step into that discussion with any type of uh conclusion or any type of conclusive evidence uh you know i listen to peter mccormick's discussion with the ceo of of the company and um you know i i try to listen for cues of like does it does it seem like this person's telling the truth you know and you can get everyone can draw their different conclusions i'm sure you could talk to 10 different people four of them would tell you that guy is a total liar six of them might tell you i believe them or vice versa or whatever um but until you can audit the books there's no way to prove whether it's a valid concern or not so instead of trying to debate whether i think it's real or not which i can't prove either way i'm more looking at it what would be the impact to bitcoin because that's the thing that that i own i've never i've never owned a tether in my life ever so i'm looking at it purely from how does this impact the immutable decentralized protocol that we know bitcoin today how does it impact it i think that my personal opinion is that let's just say let's go through the scenario that it's a total scam so in this scenario i would suspect that it would cause a short-term drop in the price of bitcoin just because a lot of people that own bitcoin a significant portion of people that own bitcoin um are going to get scared by that event they're going to somehow say well if that's that's a scam where everything else could be a scam and they're going to sell their positions and uh and you're gonna my opinion is you'll have a bunch of strong hands that step into the market and quickly suck all this all that selling up right um so i look at it more as a buying opportunity um if if for whatever reason it is a scam which i don't think that it is um and most of the reason i would tell you i don't think that it is comes down to this this isn't the first time we've heard this this isn't the first time this narrative is definitely not 2017 my god that's all you heard probably in like the november time frame of 2017 i remember this distinctly of everybody saying oh my god this thing's getting totally pumped by tether this is this is a total scam yeah and the price you know we went into 2018 and the price started going down price went down 80 percent and then why didn't they why didn't they pump it why didn't they pump it there's tethers still there yeah they're if they were a fractional reserve uh well you know my experience with ponzi schemes not that i have any experience but anything that i've seen blow up in the past is that when when it's a ponzi scheme and it's a fractional reserve system that you can't print the money um that you've got to have some type of real dollars behind it whenever everyone's you know turning it in and wanting dollars in return when the price goes down 80 it blows up right and we didn't see that and that doesn't mean that that it's not a scam but it's just for me it's another data point that says i don't think that there's much significance to this so what why spread this this narrative which is your original question and in my opinion in my very humble opinion it's people that are entering for the first time they weren't in the 2017 time frame they're entering right now for the first time and maybe they didn't have a very big position maybe they sold it 42 000 right it's the price went up there and they're desperately trying to um justify their action because if the price recovers and it starts going to 50 or 60 that would that would be a very painful pill for a lot of them to swallow yeah so um i i suspect you've had some people that have taken some money off the table because they had a big fat gain over the last 12 months and they're desperately searching for justification to confirm that what they did was right and uh yeah and i think a lot of those weekends that have come and we weekends have come to the market they're just they're skittish you know they they know that bitcoin's volatile they know it could drop at any time you and i people like us we tell them it can drop at any time and so any piece of news it's that it's that confirmation bias so they have that bias they're afraid they get a little confirmation and maybe they jump on it um i'm looking at this this drop we've got right now and the price is 29 900 right now and uh it went up to 42 000 and it's had this pretty big drop um i don't know what that is in percent terms but um here i'll i'll say what it is so we've had a 28 drop when when i see this type of thing i ask myself so what has fundamentally changed about the protocol has there been an update has there been some type of major restriction by a big country and the answer to the question is nothing has changed no other than the fact that the price was outstripping and going faster than the stock to flow model that was that was something that was happening and yeah being a a correction back down to what it you know that i think it was the it was the the triple the triple threat combo it was like janet yellen coming out it was the tether fudd and then we had the double spend and it's like three things and everyone's just panicking i guess yeah and you know what it's gonna it's gonna continue to do this until this bull market you know fizzles out or maybe even just keeps on going i don't know but you've got to expect a lot of volatility volatility along the way and uh yeah two to two opinion to add to that point though i mean you're right what you know 2017 we heard this all the time but in 2017 tether was the stable coin right so it was like it had such a big percentage of the market share where today we have so many different stable coins so even if tether were to go down it's such a small smaller piece of the overall market that i just don't see it i love where you're going with that because there's so many other it seems to me like every exchange is trying to stand up their own stable coin in order to have their own personal network effect and capture some of that value that they've obviously had a first mover advantage for i mean look at gemini look at crack or kraken and look at uh coinbase i i would tell you i think a lot of the big boomer banks that that you know everyone knows on wall street um they're all trying to get in this business too so it's a it's a total rat race of everybody trying to create a stable coin and uh you know if if the market was really concerned about what was happening over at tether you would see their market share you would see exchanges off-boarding tether and onboarding something else aggressively yeah and you're not seeing anything of the sort so that makes you wonder like so there's nobody in the know there's nobody talking or or concerned about this evidently not the people that are that are closest to it sure aren't concerned about it yeah yeah i i i agree with all that i just think it seems to me it's like if you're afraid you're not gonna get your money back out your dollars that you have in tether then that's compartmentalized to tether i guess if you think that bitcoin is only reaching the level because it's being pumped i think that's totally invalidated and i guess maybe that's a little bit of risk but um yeah so we'll go from there but i know we're i know we're running short on time here so i want to try to wind it down i uh i had i had a bunch of questions uh posed to me on twitter i grabbed a couple of them see if we can get through these here pretty quickly um what do you think about yellen's 50-year bond idea i i think it was very inevitable and uh you know when i saw the announcement i was like well duh like of course i was surprised it wasn't a hundred year yeah i guess you start with nothing move to 75 or 100 but yeah oh it's coming yeah don't think for a second that that's not coming it's just a matter of when and uh i mean i there there's a question that somebody posed uh it was something like this how what's the average uh duration or time period from the time that a country issues a hundred year or 50 year bond to the time that they default on their currency or that their currency goes up in flames and i think that's just such a great question because it encapsulates everything you need to know about a 50 or 100 year issuance is that it's desperation by the issuer um and i mean look at the yield like like you really think as a person buying the other end of that that if it comes out let's say it comes out at four percent the coupon on it do you really think you can forecast a four percent coupon for the next 50 years from a risk standpoint it's totally ludicrous it's insane it's insane i mean well yeah i mean nobody's going to buy that bond right only the government's going to buy that bond with fake money well they'll force yeah through regulation they'll force the banks to do it and then they'll just buy it back from the banks at some point through qe yeah um this is uh maybe you want to answer this one um you talked about earlier about um when you're talking about the debasement of the currency tangible assets do you hold any other assets besides bitcoin do you like tangible assets commodities gold anything other than bitcoin so and i have a business and the business has a bunch of intangible assets i mean right now you and i are creating an intangible asset that you can run advertising on into perpetuity so um when i think of of my position size i look at it very similar to the way that michael saylor looks at things he has a business that's kicking off free cash flows uh he's taking his retained earnings and he's investing in something that he has a very high conviction of that that is going to protect them against the basement that's how i look at things so when i think of it in terms of percentages that's a for me that's a very wall streety kind of like question because that's how most people when you listen to an investment show it's all people that manage other people's money or at least that's what they're used to doing and that's how they think but as a business owner that's not how i think i think what would be the capitalization of all the assets that i that i own from a business standpoint that kicks off free cash flows and then what's the valuation on the things that i've retained and put them in there and then we can talk percentages but unfortunately i have a private company and i have no idea i mean i know what i would sell it for and it'd be way higher than what uh you know i i suspect i'd be offered to in the market yeah for those assets so you know it it turns into uh i know it's it's it's gonna sound maybe i am sidestepping the question but i'll put it this way the way that i structure and the way that i think about things are very very similar to the way that uh you've seen happen with a with a public company in microstrategy yeah well that's a great point though because i deal with this all the time where i see all these people wanting to come in and be vet investors and most people think they can quit their job and become these full-time investors and i'm like that's not how this works even professional investors i mean maybe a couple of these hedge fund guys but even that's like a job right so most people are still working they still have income from working and then they're investing on the side so um it does make sense to me hopefully it makes sense to everybody listening so you have your business that's your asset you're actively working you have active income you have tangible assets in that business and um usually the best investment you can make is in your own business anyway um all right uh two more you've talked about the mayor multiple before what do you think about the mayor multiple for this bull market so i think uh and maybe this this uh correction that we're seeing right now is a perfect example of how the mayor multiple is is maybe still valid because in the back testing and just so uh if people see this and they go to the page that lays out some of the statistics that i did in 2017 i haven't touched it since uh the statistics were showing that if you in the way that i back tested i said if i bought every single day since the time that bitcoin was on the open market for buying and if i bought every single day when would it be a bad time to buy and what came back in that scenario was that at a mayor multiple of 2.4 it was a good indicator of not buying and waiting for the price to drop back below a 2.4 then you would start buying again on it on it and i think i ran it on a daily basis if you were able to dollar cost average on a on a daily basis so if you're doing it on a monthly basis maybe your numbers are different i don't know um but what's interesting is the price on this recent pump that we had uh here at the start of 2021 it got over that 2.4 threshold for a couple days i'd say three or four days and uh you know and sure enough that was that was overbought [Music] there's been a correction so that was an interesting now the right now the multiple's back below that threshold which would suggest that you should be continuing to dollar cost average on a daily basis um so i just found that a little interesting that that indicator was was suggesting hey this is this has gotten a little uh overheated now mike my concern with this multiple on this particular bull run is let's say that we do go into a scenario where you have hyper bitcoinization at the end of this or you know through 2021 into 2022 whatever that multiple would would have suggested that you step out of the market and you stop buying and it might be happening at a point where um that's probab where that scenario isn't a good recommendation so that's the only thing that i would caution people with with it and why i don't really particularly put a lot of weight on it um but you know it's there you can look at it and come up with whatever risk assumptions you want to make yeah okay good all right well we'll go ahead and wrap it up with that i know we i know we're going long and you got to get get going so um with that i guess we'll go ahead and sign it off but i just want to give you a chance just to let people know where to follow you i mentioned your podcast i think you're pretty active on twitter maybe go ahead and drop some some some names there yeah that's probably the best place mark it's just on twitter uh i like to engage with the audience um and and anyone that that's got questions yeah just hit me up on twitter and if you want to check out the podcast you know the investor podcast we'll make sure to link to it down below and with that we'll go ahead and sign off preston i appreciate you taking the time to come hang out it was a fun time mark i really appreciate this we got to do it again sometime soon okay see ya [Music] foreign