How to Make Money in the Bull Market for Electricity | TCAF 206

Summary

• Market Outlook: The podcast discusses the surprising resilience and growth of the ETF industry, noting the increasing number of new entrants despite its maturity and the ease of launching new funds due to technological advancements.
• Company Insights: Nvidia is highlighted for its impressive growth in data center revenue, with expectations to reach $50 billion per quarter, driven by AI infrastructure demands, despite potential headwinds like reduced surprises in earnings.
• Investment Opportunities: The conversation touches on the potential of nuclear energy and natural gas as key players in the electrification trend, with utilities benefiting from increased demand and regulatory support for nuclear projects.
• Private Equity vs. Public Markets: The podcast contrasts the performance of private equity investments with public market investments in alternative asset managers, suggesting that owning stocks of firms like Blackstone may offer better returns.
• Crypto and Blockchain: The discussion highlights the growing importance of stablecoins and blockchain technology in the financial system, with Ethereum being a potential standard for tokenizing securities.
• Gold and Currency Hedging: There's a focus on gold as a hedge against dollar depreciation, with central banks increasing their gold reserves, surpassing US treasuries for the first time since 1996.
• Electricity Market: The rising cost of electricity is discussed as a significant factor in inflation, with implications for both low-income households and the broader economy, driven by increased demand from AI and data centers.
• Future Trends: The podcast anticipates continued growth in private market investing and the integration of blockchain technology into traditional finance, shaping the next phase of investment opportunities.

Transcript

How's your summer? Uh, >> great. Yeah, great job. >> Doesn't he look super relaxed right now? He does, right? >> I love the coat. You look good. >> Look at that. Look at the color I'm sporting pants. It's amazing. >> Don't I look Hampton? >> It's a shame. It's a shame we can't get your legs into the shot. >> Do you uh do you spend time out east? >> Oh, never. >> Sorry. Good. Twice in the last 30 years. >> Josh, where do you summer? Um, I summer in South America and Point Lookout and Atlantic Beach. I got my spots, bro. I definitely do. >> Yeah. You excited for future? >> Very. >> So, this is so supposedly this is for people that believe the semis are structural, not >> that's your style hat. The dad hat. >> That's a dad hat. >> That's definitely yours. >> Yeah. >> Um, >> hey Nicole, does this jacket make me look like an or is it just my face? I got a couple of looks. I got a couple of looks today. Like this guy. Why are you wearing so good little You look good in your shirt. >> It looks a little little >> No, it fits. It fits. You look good. >> All right. >> But that's not a summer coat. This looks like heavy. >> No, I know, but it was like a little bit chilly this morning. >> It was chilly. I went for an early morning walk. It was cold. >> Want some makeup? >> Uh Josh, did anybody Where is this? >> Uh we're doing Nvidia today. Okay. Van celebrates 70 years. >> Unbelievable. >> 1 2 3 4 5 6 7 8 9 10. >> I was in uh Newport over earlier in the week. >> Yeah. >> First time. >> Rhode Island. >> Rhode Island. >> Yeah. >> And we did the Breakersh >> and it was unbelievable. >> Holy mack. You ever been? >> People say it's not. Was it crowded? >> Not really. >> No. >> Um No. >> It was spectacular. >> You've never been to Newport, Rhode Island? No, I've been but I not not for enjoyment. >> So they built the house in 18 I think 1896 and he died like a year later of stroke. >> 1896. >> Who? Wait, whose house is it? >> Oh, that was his own. Yeah, >> cuz I was going to say that's Robert Baron era, right? Newport the 1920s. >> I think Sailor owns it now. [Laughter] >> Oh man, I I know where this is going. >> No, no, that's that's a spectacular house. It was really cool. It's a hotel room. >> It is owned by like the preservation society. So, I think they own a lot of the mansions. Yeah. >> That are on the coast. >> Well, you can't afford to keep these things up. >> Well, that's why they sold it. They couldn't afford the tax. >> They never build these things today. >> Yeah. Like >> Well, they're the McMansions of the day. >> Uh >> that's what I call them. >> I mean, they I think they were like palaces. >> Yeah. >> Cuz we have a bunch on on the Gold Coast of Long Island. >> Yeah. >> Um and most of them are now Nobody's living in them. They're just like museums. So, look at the gate. You can't even see Kobe. Oh, that's nuts. >> Look at my That's my 8-year-old son. You can't even see it. >> The sc the scale of those things is crazy. >> Yeah, it was really It is a pass. Yeah. >> You watch Golden Age? >> I did not watch, but uh >> in the first season they go to Newport. I don't know if they did. I I didn't get past. >> So, there's a scene that takes place. I don't know if it's multiple scenes or the whole season, but there's there was a scene where they like in the house they have an HBO card. There was a dancing scene in the library or whatever. >> Yeah, >> that's a that's a good show. I should have kept uh I should have kept going with it. I just didn't. >> Yan, you guys are uh you are not like in the party phase of the ETF market, right? Like you saw the article this week from Bloomberg. There's more ETFs in stocks. Is that Yeah. Right. You guys aren't like throwing against the wall. >> I don't think so. But >> I mean, we're not we're not doing we've never done leverage or inverse, right? We don't do single stock. We don't do some of that. I mean, maybe we're too stodgy, you know? We just kind of look at the market, look at industries. Can >> I ask you how come no ETF issuers ever seem to do any M&A? >> Doesn't it seem like there's very little? We've done some. >> Why buy when you could build? >> So, so SMH uh some little history. So, um >> that was a Merrill product, >> right? >> I knew that. >> And we converted them. We did an overnight trade. People had to opt in. >> Okay. >> So, it wasn't a default because they were trusts and then we were going to start charging a management fee. >> But that was buying just a single fund. Well, we bought the whole range. What year? So, we wanted it for OH because that was the missing thing in our suite. And we got SMH. What year was that? >> And SMH so much more important or something like that. >> SMH is so much more important than O >> for us. >> Yeah. >> But you know what? You also you don't see any established brands and you guys are an established brand for the most part getting into the levered inverse game. Direction is the big one, but that they started there, right? Right. Right. >> But you don't see you doing it. you don't see a lot of the other prime time players doing because you have you know >> I think what I'm trying to ask you is it's surprising to me every time I look at like the list of ETF issuers it gets longer >> and you would not think that an industry that's as mature as the ETF industry is now it's 30 years old industry you would not think that there would continue to be new companies new players at the rate that there are you would think that it would be consolidating by now and yet it's not and I think maybe that's because the cost to issue a new fund is dropped, the technology and lift to manage a fund ongoing is easier. >> Yeah. >> And so the spaghetti cannon is out. But also like new companies just come along, create one hit, and then that's it. They're a company. They exist. Nobody buys them. >> So >> yeah, but you know why they don't buy them? Because >> anyone pitch you? Like do the bankers come to you and say you should take a look at these guys or not? >> Not anymore. I mean, you kind of know the industry anyway and no. >> Okay. It wouldn't be necessary because you know everybody. >> Yeah. Okay. >> And and the fees aren't high. Everyone >> No, go ahead. >> What were we talking about? No. >> Where did the bankers spend the you know financial investment bankers spend all their time? Private equity, >> right? >> Like ETF firms like there's Wisdom Tree where there's one public company to cover. >> Yeah. The margins stink. It's not a great business. >> I don't even know what the multiple would be for an ETF issuer company to get bought. Would it just would it be like the AUM and then whatever intellectual property and it would be like a multiple of the cash flow of Okay. I'm probably alone, right? Like >> I mean like everything they go through cycles. So when there was a shortage of property, there was like 30 ETF issuers when we started 19 years ago and now there's like hundreds, 300, 400, I don't even know. >> It's wild. >> So there used to be a big premium because everyone wanted to get in, but now the guys have gotten in and it's kind of normal. >> I remember Yeah. I remember like all the rumors like like so and so is going to buy Wisdom Tree, right? >> This this big bank is going to buy this issuer. I don't even hear any of that anymore. >> Yeah. Because I guess like anyone that would wanted to do that has already done it. >> Well, the platforms that with distribution, Schwab, Fidelity, right? They already have all their their own family. So, and then JP Morgan got in. The people really on the outside who wanted to get in are in. >> JP Morgan succeeded bigly. I remember when they first like came to market and I was like, what do they do with these like ultra short duration bonds and ETFs? And now they're gigantic. >> Jeffy was the killer, huge, right? Um they they helped you know found a category which is what you really want to do as an ETF issuer you know credit to them. >> What is that category called like Jeep >> covered call? >> Yeah. >> Or it's they call it an income strategy. >> Yeah. Yep. >> Yeah. >> And then there's defined outcome but those are different. Yeah. >> Well it worked. >> So >> I saw we we were with uh oh my we were with Chris Bond when he built those things or like when like he announced them to the public. Yeah. >> And I said to Ben like these are going to be massive. >> Yeah. Yep. People love certainty. We good? >> Let's get it on. >> Music. >> Three claps. >> All right. What episode is this, John? >> Come on, friends. Episode 206. [Music] [Applause] [Music] Today's show is sponsored by Public. Public is the investing platform for those who take it seriously. You can build a multi-asset portfolio of stocks, bonds, options, crypto, and more. You can also access industryleading yields like the 4.1% APY you can earn in your cash with no fees or minimums. But what sets Public apart? AI isn't just a feature. It's woven into the entire experience. From portfolio insights to earnings call recaps, Public gives you smarter context at every touch point. >> And plus, for a limited time, you can earn a 1% match on all IRA deposits, IRA transfers, and 401k rollovers. Fund your account in 5 minutes or less. Find out >> more at public.com/compound. Paid for by public investing. Full disclosures in podcast description. >> Wow. Episode 206. Ladies and gentlemen, you are now rocking with the best investing podcast in the entire world. Guys don't seem that excited something. All right. Oh my god. This is going to be a great show. Uh we have a returning champion with us today. Somebody who uh I think has just been incredible on this show and everywhere else he appears. His name is Yan Vanek. Yan Vanek is the CEO of Vanek, a New York headquartered mutual funded ETF company. He joined the firm in 1992 and its executive management team in 1998. VANC runs a number of thematic ETFs, strategies, mutual funds, and alternatives. And he's also a pretty you're this is I want to I want to ask you about this because this is a little bit under the radar. You're doing a quarterly podcast and I don't know about it. Yeah. >> All right. Well, >> well, you guys were you guys were kind enough to have me on in 22, I think. And uh yeah, I I sort of would do decks, but not like your guests are like deck pros, right? >> And uh anyway, I did an interview and I said, you know, it's good to put your thoughts on the record, right? And so I sort of do this on a quarterly basis and it's yeah, it's worked out pretty well. >> This is the thoughtful money pod, which is Adam Tagert's podcast and you have a space to jump on there every quarter. Yep. >> Okay. And lots of people are watching these things on YouTube. It looks like >> surprising number, right? >> Yeah. Those are rookie numbers. Quarterly, you got to do daily this way. You put out daily. You're so on the record. Nobody knows what you That's what we do. Nobody Everybody forgets what you said. >> You do a daily podcast, you change your mind every day. All right. Um, Van celebrated 70 years this week, which is pretty incredible. Let me read this. Amid the postworld war II recovery in 1955, John C. Vanac founded the firm with bold idea. US investors should have access to opportunities beyond its borders. He launched one of the first US mutual funds to focus on international opportunities, marking the beginning of a firm shaped by conviction, not convention. Here's your quote. My father believed that investors deserved more than what the mainstream was offering. um he built this firm on the idea that the world is constantly changing and that by understanding those shifts early, you could create real opportunity for clients. That belief still guides us today. So, first of all, congrats on 70 years. It's pretty epic. Yeah, I think you guys have lived up to that. You guys continue to come out with the latest, the newest thing. It's not throwing stuff at the wall. It's you deciding this is a new category that investors should pay attention to and then acting on it. How many funds do you now? How many ETFs do you now have in the suite? >> 70. >> Is it that many? >> Yeah. >> Okay. All right. And um >> and I would say Josh if I could like you know the what my dad was famous for is starting a gold fund in 1968. So he really took that international equity fund and he said inflation is going to be a problem. And there's two things about that. Number one, it's really our investment research outlook. Like we look at these macro trends um and then what you know what's an investable way and instead of putting it all in one macro fund, we have a dialogue like this. We say well this is what we think. We think you should add this to your portfolio. It'll reduce your risk or add your return. Um and and actually I was just realizing that that was one of the first kind of really specialized funds. Right? Back then it was all general equities uh diversified and this was like it was like your first thematic fund in a way. Um uh >> and the gold fund still exists. >> Gold funds very much still exists and that's why we started GDX as our first ETF. >> Oh, that was that right? The gold miners. >> We were in gold miners, right? We were like, "Hey, there's no gold miners ETF. Let's do that." >> By the way, it's been a minute. GDX been working big time. It has been a minute, right? >> That thing it's gone vertical. >> It's exploded. As one of my colleagues said, it's now a momentum trade. >> Yeah. Good. >> Um international stocks are back in a major way this year. It's something that uh not a lot of people were expecting of of course they never do. Um, are you guys seeing flows to areas of your portfolio that had over the last few years kind of just been ignored >> a little bit, but I mean still resources? No, no one's even gold. I mean, barely like we got four billion in uh redemptions in GDX in the first quarter, which is a lot for that fund. And I think that was just people covering their shorts. They're not getting long, you know? I don't know. So, we still see very little life in the in the gold market. >> That's how a bull market is born, right? Like not to use a John Templeton quote, but there is still like you're not going to fool me again. >> Yeah. >> Right. >> No, I think it's a great it's a great signal that this is going to be a long cycle. We hope that's what we think. Yeah. >> Do you ever think about like what would your dad have thought of things like Bitcoin or um you know some of the innovations that you guys have done in different areas of the market? Is that like a guiding thing for you or >> Yeah, I mean I think he was he was a historian and I know you guys are historians, but you know what does he take from that just that the world is changing and you got to be open to how it's going to change and that it can change super quickly, right? And that's he would have he would have been all over Bitcoin. Uh I mean at least researching it, you know, he was a little bit more wonky. He was more that kind of economist than the business guy. It's it's an interesting concept to be a historian or to be very aware of history but then simultaneously not allow yourself to be trapped in it. So if you really pay attention to history what you see is that everything changes. But so many people who are pay attention to history in the markets >> they get stuck. >> They get stuck. they revert back to these analoges that no longer are uh make sense and they want to see mean reversion and they want to see history rhyme or repeat and it doesn't quite work out that way and they almost get like angry about it. So I think >> that's happening today. History is being disrupted by Nvidia >> 100%. >> Right. all of the things that we thought we knew about the laws and how big things can get and how quickly they could grow uh tear it up. >> And our economy is just so different. Like we talked about 100 years ago, we're still kind of an agricultural economy and then during Gilded Age, it started to become more industrialized. Today, it's like you you guys talk about it's a wealth economy. >> Yeah. >> Right. It's it's I don't even know how to describe our economy anymore. There's so much money, right, that you think people get richer if interest rates go up. >> I do. >> No, I know. I know. But it's that's so that's that's never been like that in in US economic history. >> No, it's this bizarre thing and uh it almost it increasingly feels to me that you basically have to join the capital class like to survive. It's it it's becoming more and more like that. Even if that just means through a 401k just something at a bare minimum. This idea that you can like live outside of the financial system and not put money at risk. I really think it's like impossible to live that way now. And uh I think there's a growing awareness of it. I think everyone now fully appreciates that. >> Yeah. >> I just don't think it ever reverses. And >> I'm really excited by these MAGA accounts, you know, these thousands per person that's going to start next year. I just really worry that people are so fin. Yeah. I think it's great. >> People are so financially illiterate. I'm like, what? I, you know, I talked to that foundation like how are you gonna educate people with so many people just don't even know what to do with investments? >> Oh, we're here to help. >> Yeah. >> So, as I said, we're we're all on the record. We we podcast a lot. And earlier in the week, Josh and I were talking about Nvidia, how they are the last to report and I said I would be surprised if there's any surprises because we heard from all of their customers, all of their suppliers. Uh the stock is down 60 basis points today, so not much of a surprise. It was a bit of a yawn, but the most impressive yawn you could ever possibly imagine. So, John, let's throw up the first chart of what Nvidia actually reported on the data center revenue. $41 billion, which is hoham, up 56% year-over-year. Have we ever seen a company, I know we haven't, these sort of numbers this big, this fast with room to run >> with no China revenue, right? No China revenue, which >> which is like half the AI researchers in the world are in China. >> Yeah. And they don't even have that in the in the quarter. >> Well, not not directly. >> Not directly. Maybe through LA. Doesn't this chart look fake? >> Does. >> It's real. But but like running a business, not a lot of businesses look look like this. Just that stair step straight up. >> So two potential headwinds for Nvidia and one obvious tailwind that might might make the headwinds look like a joke. Number one is that the earnings per share and the revenue surprises. The analysts have caught up. John next chart please. So the beats are happening on a much smaller basis obviously right the analysts are now not only caught up like they are bullish as all get out. So the surprises are shrinking both topline and bottom line while simultaneously the expectations for Nvidia are again this is a chart that also looks fake. Nice chart please. uh they're projected to grow to $50 billion in revenue a quarter uh in I think five or six quarters which is more than double of where they are today. I'm sorry. From 50 to 100. >> Yeah. >> It's crazy. Yeah. >> These are This is real. Matt had to double check this to make sure that this wasn't fake. >> Yeah. >> 100 billion per quarter. >> So So >> that's in the price. That is in the stock price. That's what people are expecting. I mean, I they announced a $60 billion buyback and I I laughed like, why why bother? Save that for when you miss earnings and and then authorize it as a way to save the stock price. Nobody needs it now. I hope they're not actually going to do it. >> I mean, he's such an impressive CEO. I think his communications are very clear. Like what the the market was worried about was the China stuff and he said, "Look, no China revenue in Q2 and my projections I'm giving you, no China revenue." So you can do your own speculative stuff on top of that, but he's giving guidance, but he's not, you know, he's he's he's really clearly identifying the risks in the stock. And that's why I think the surprises, Michael, are down. >> I think he's going to win. I think he's going to win the China thing with Trump because I think Trump really wants the 15% of um taxes on chip sales. Trump is really excited to announce all this money that we're collecting from the tariffs. It's like a really big part of um his not just his economic policy, but like his communication strategy. He really enjoys saying we just collected 11 billion from this country or from the So I think he wants that 15%. Um and I think it's an easy leap for somebody to whisper the right thing uh into his ear and it's probably going to be David Saxs who's the head of AI policy at the White House. But like David Saxs will make the case to him, we want the Chinese using Nvidia stuff like a degra a deprecated version. It's not we're not going to give them, you know, >> water it down. Not the >> we're not going to give them the Blackwell 300, but like let's give them enough so that they don't start standardizing on something else. >> Yeah. >> And I think that'll get through to him and I think he's going to I think that's the next C. So people like well what's going to drive Nvidia higher? Well, when they come out and announce that they can sell Blackwell in China, then all of a sudden none of that's in the numbers. Yeah, that's how you get the stock at 200. >> I think there's two big upside surprises from the numbers you showed on the last slide potentially. One is just government demand from the Middle East. So, I was in the Middle East earlier this year. The amount of money that they're putting into data centers and not surprisingly, if you think about it, right, their cost of energy is cheaper than everywhere in the world, right, than way cheaper than Europe and way cheaper than the US. So, it makes sense if you got to put a huge data center somewhere, put it in the desert and and have cheap uh cheap energy. So, that's one. And then he talks about robotics. I don't really know what he has in mind. I don't really >> want to interact with a lot of robots personally, but there's going to be, you know, a lot of tasks like moving >> robotics are not in the NVIDIA numbers to the extent that they could be. >> They're not in at all. >> Right. So it it's it's a $43 billion quarter and 41 billion is data center or whatever it is whatever the breakdown is >> and then gaming and then tiny and other data center connectivity. >> It's all data centers. Yeah. >> So all right so the headwinds are we know >> the stock is the company is valued at 4 trillion. The expectations are through the roof. The surprises are coming down. That's the potential headwinds. However, the tailwinds John chart 4 they shared this uh they say we see three to4 trillion in AI infrastructure spend by the end of the decade which is like wait what um right now the the big hyperscalers are spending $600 billion so I guess it's not that that that crazy times but but but but uh three to four trillion is a big number so I thought this is a great answer that he gave in the call Jensen was asked about this like where does this number come from like could how do you get to three to four trillion that sounds made up. He said the best way to look at it is we have reasonable forecast from our large customers for next year a very very significant forecast >> bullish >> right all right I said this earlier you know you heard from Amazon and Google like that we know and they know because they're backlogged okay so very very significant forecast and we still have a lot of businesses that were still winning and a lot of startups that are still being created don't forget that the number of startups for native AI was $100 billion was funded last year this year they say it's 180 billion but here's here's the kudigra if you look at AI native startups that are generating revenues last year was 2 billion this year it's 20 billion next year maybe 10x higher than that it's not inconceivable >> who are these AI uh AI native startups this is open >> and I guess all of these companies >> okay >> wild can you imagine if this is $200 billion next year >> there's so many models I can't even keep keep track of all the open language uh you know open code models that he listed out of China I mean there's just so much innovation happening in the space, right? >> So, do students of history get stuck in the dot analog? Like, because on the one hand, I'm sympathetic to that school. I thought, how could you not be, right? How >> well, we're in an innovation super cycle. That's it. Like, and and what I think is that, you know, the the market value, what I said coming into this earning season is, okay, everyone's nervous the MAG 7 is 35% of the S&P or whatever it is, get your mind around 60%. I mean it could if you look at some of the charts that we have right these large cap companies they're not hiring any more workers and their revenue is going up their profit these are going to be insane profit generators. >> Yeah. >> What's going to stop it? Yeah. >> It's just unbelievable. >> It's not going to be regul. It's not regulation. >> No. And like this is just Microsoft. I bought you know borrowed this slide from CO2 so credit to them but I looked at Amazon headcounts been flat over the last several years as well. They're just not hiring. I talked to, you know, a a MBA professor. Amazon's not hiring any college graduate programmers this year. >> Um, >> I mean, you know, I'm assume that's true. >> Hiring for kids coming out of college is one of the things we've harped on on this show repeatedly. It's now noticeable in the data. >> Look at this. Unemployment rate for college. So, this is uh no high school diploma, no college, a bachelor's degree, and college grads. And none of them look like this. >> Yeah. >> College grads. It's not good, >> right? So >> white collar workers, they're white collar workers. It's the first thing you automate. And the large caps, my point into the market cycle is it's the mega caps and the large caps that benefit. If you're van, we don't have that many employees. We got four people maybe doing the same job. You got thousands at banks, right? So they're just going to like it's it's it's just crazy efficiencies that these large companies with the installed customer base are going to realize. Another thing that is often lost and probably a bit lazy when you're describing Google and Microsoft, you have to unpack them and talk about the other companies underneath. I mean, YouTube would be a top 20 company, right? >> Yes. They've got so much innovation that they're working on in in so many different >> How many Fortune 500 companies does does uh Meta sit on top of or Microsoft? Yeah, >> Meta has 11 different services or some or perhaps I'm thinking of Alphabet has 11 different services that on their own like have a billion users like this is un it's unprecedented we've never had companies like this >> AI is another scale technology right if you have a little vertical focusing just like say like we invested in this finance AI company that was going to kill Bloombergs right but their models will never be as smart as open AI or Perplexity because they're not going to have the traffic. So someone who has a hundred times the traffic is going to have the smarter models, the better answers, and they're going to suck up all the all the market share. It's it's >> another winner it's another winner take all world just like social media, right? >> Are you worried about what this does to electricity? because I was listening to a podcast that Patrick Oshani had the CEO of a company called Bason and they were talking about how quickly the cost of electricity has gone up and I I think this is a very under reportported story. I knew nothing about it until I listened to it. We have a chart from you showing the cost of electricity versus CPI. Yeah. >> And all of this AI stuff. Is this going to push this up even further? >> I I I I think there are a couple of implications. So, first of all, >> this is wild. >> Yeah. There's a great chart from my colleague Matt Seagull. Shout out. But so number one um you know we talk about well there's the macro implications right we talk I don't know if you guys think that inflation is going to 2% I just don't think that's likely to happen right and here's another example of something that's running way ahead of this and if electrification is is another decade long trend there's no way electricity prices are staying flat because if you look at these trends like we're we're that's why we're rushing to build nuclear reactors and all that kind of stuff. The other thing about this though is it really has psychological impacts on people, right? Even though inflation wasn't crazy at the end of Biden's administration, a lot of people felt that inflation was super high. Electricity prices are like 2% of the income of of wealthy people. For lowincome people, it's like 10 to 20%. >> Really, >> electricity of the money. >> If you're in Baltimore or New York, it's 10 or 20% of your income. where you're spending all your income is your electricity cost. >> Wow. >> So it's it it's so that the you know the whatever it is 300 to 400 like in New York state uh electricity is going up like 11% this year 11% last year we shut down our nuclear reactor. Thank you very much. So electricity is more expensive in New York but um yeah it's so this is just an interesting story. I think, you know, it's it's very um regressive, right, from a and so I think it'll have I don't know if it'll have political implications, but it's economically regressive in that it more it it's got a heavier impact on the on the uh lower income people. >> Correct. >> Um I I was looking at utility stocks. I've been looking at utility stocks all year. This is like a once in a hundred years rerating for these names. They're trading at some of the highest multiples we've ever seen. And it's not just the unregulated utilities, like the more fun ones. >> Yeah. >> The regulated utilities are going to their state and they're pitching these raid cases and they're winning them. And the reason they're winning them is cuz they're saying, "Guys, we can't with our current capex, we can't meet the demand." And if there are data centers in their territory, forget about it. It's like off the charts. So I think some of the biggest winners in the market over the last couple of years have been utilities and some of these transmission companies that are the go-between and uh do you think there's an end to that in sight or if if three to four trillion is right from Nvidia? >> Yeah. >> Then these have to keep working. >> Yeah. I mean we need more electricity in the US that's not a secret right. We've been talking about the winners from this sort of second phase of investing in AI and what we've pointed to is nuclear and natural gas because nuclear because we we just need it and people want environmentally clean electricity and then not gas because you can't build a nuclear plant in two two months. >> Why is the energy sector trailing so poorly if this is the story at the utilities? Is it just because oil and electricity have very little to do with each other? Because in that gas component, I would have thought that like the demand side would have picked up, pricing would have been stronger, and those stocks would work. But they're the worst stocks in the market. >> Oh, but the worst. I mean, EQT had a pretty good run um for a while. >> No, there's a few good ones, but as a sector, >> yeah, because we because there's no supply limitations. We will never the United States is never going to run out of natural gas. >> Okay. >> So, that's that's part of the pricing problem. >> It's as simple as that. >> Yeah. >> Okay. All right. Got it. But but still like the machine makers, the combine like you know there's a lot of services construction that still needs to go into uh to building these. >> Do you guys have a utility fund? >> We don't. >> Okay. On the drawing board. >> So in our nuclear fund, not to you know sound too promotional, but no it's it's a mix of miners. It used to be everyone would just play, you know, uranium miners and we said that's like too that's too narrow. So we include utilities you know utilities oriented towards nuclear obviously um and then the the it was like the equipment suppliers but now those are the new SMR companies right the OAS or whatever that went five 10 times last year yeah it's it's kind of richly valued I mean I I wouldn't sell it but >> no I mean or just the whole sector >> okay is that the biggest market cap in this sector now uh alo >> I I don't know >> do you know what that is >> I know that's one of the momentum stops that the kids That's the Sam Sam Alman invested in this mini nuclear reactor thing. >> Yeah. >> So, um >> SMR I think is >> that the other one? I don't know. I don't I should pay more I should pay closer attention. Is that fund uh raising money or people? >> Yeah. It's our highest fund. >> Is that right? Really? >> Yeah. >> Oh, wow. >> What's the ticker? >> NLR. >> NLR. >> It's up 45% this year. I just think it's like it's like a lot of things in the market. It's just sort of tired now. It's just got to like the real activity's got to catch up with it. I mean, the bearish case coming into the year um was it's takes five years to build these things and you know like alternative energy and everything. People are like they were already expensive in December and you're going to get wiped out. And I said I don't know. I just think there's it's a global thing. It's bipartisan and there's been enough news flow happening this year which is what happened that that the stocks will be supported. But you know again I wouldn't put all my money in now. Trump is pro- nuclear. >> Oh my god. >> Yeah. No, I don't know. Is he? >> Yeah, he's incredibly I mean prouclear Biden started like full credit to Biden and then Nuome you right Democratic governors Nuome Whitmer in Michigan and then Delaware governor all supported nuclear projects in their states like extensions or whatever it was. So it's definitely bipartisan, right? But Trump did this executive order and now he's like challenging companies. He wants three of these newer reactors up and running by next July 4th. >> So, I don't know anything about this stuff. What is the opposition? Like, I know nothing about it. As if people are afraid that there's going to be like a blow up or something. >> Yes. Fukushima, ThreeMile Island, Chernobyl. Nobody wants that anywhere near them. >> But aren't there ways to not do that? >> So, Nimi Nimi, right? No one wants it in their neighborhood. >> No. Would you Well, you know what they're doing? >> Would you buy a house uh uh 10 miles away from a nuclear reactor? I wouldn't. >> Why can't you live in one? That's there's no middle of nowhere >> cuz then you have to like move the >> No, that's what's happening. So they're doing it on federal land. There's one company that's >> if you take flights, there is middle of nowhere. There are literally hundreds of miles. >> That doesn't help you. You have to move the electricity generates. >> It's to have it fast. >> AI, blockchain, something. >> Come on. >> To have it fast, you need either a friendly local regime like Louisiana, right? They're they need federal land where Trump with a, you know, an executive order can do it. So that's what they're doing. Then there's one company that's doing private financing. They're doing it underground. They're building a nuclear reactor underground. And they're literally building one. Don't laugh. On the moon. >> Oh, on the moon. Great idea. >> No, but >> I am all for nuclear on the moon. I have always said this. It's the best place you could put it. >> I absolutely >> That's why I had to mention it because it's a little real. >> But you have to get around Nimi. You have to get around it. >> But it's literally >> But the problem with it is you see Fukushima that was not a nuclear meltdown. It was a tidal wave or a tsunami that created the conditions for a nuclear meltdown. >> They didn't do anything wrong at the plant. >> Yeah. >> That's not a Chernobyl. It's the Japanese. They don't >> The technology is so old. It's like the iPhone 3. >> You know what doesn't have tsunamis? >> The moon. >> I agree. I've always said the What do you want to say about uh US credit and the debt? But Jan, let me let me ask you this. I know you're a you're a deficit warrior. Steve Eisman was in here a couple months ago saying, "Ah, it's just virtue signaling from the rich guys." What's a >> Did you hear Did you hear that? >> Um, yes, I did. Uh, so uh, look, I think if you look at history, right, the budget deficit in the US has never been as large as it was uh, a year or two ago. I mean, it was just ridiculous, especially given that we had low unemployment. any country in the world could not get away with the budget deficit that we've had. So all I'm saying is it's a risk out there, right, that you really have to watch. And I know people are sick about talking about it. And you know, I know that Japan has a lot of debt and throughout my career, everyone was, you know, the JGB trade blew people up, right? It was, you know, one of the widow makers out there. I I get all that. >> Timing in markets is impossible. Let's just grant that. All I'm saying is let's just focus on it. Now, if you're building a portfolio, you wanted to own the hedges, right? So, you know, we've been talking about Bitcoin and gold for a couple of years. Guess what? >> Again, this year, those hedges against that big risk have really worked out super well. >> And gold looks like it's about to explode even higher. >> You think gold is working because of the deficit? >> I do. >> You do? >> Yeah. >> Okay. >> What do you think? I I have a slightly longer view like I look out if you look out 10 years I think that India is going to be the fourth largest consumer you know market in the world so it's going to pass Europe >> they love gold for for jewelry >> the the world the world wants a hedge against the dollar right and so they are just what's the second best currency in the world it's gold >> it's not the rebon right it's not the yen I just list these and you're like in your mind no way right the euro what no so Uh, so that's why it's been gold and that I think is a multi-year trend. >> That's not that's not complicated. The dollar is weakening. This is a debasement trade. People are buying Bitcoin and gold for this reason. It's very straightforward. >> I thought when you said India, you were going to say Diwali season cuz when I when I was a broker, I used to pitch gold stocks and we would pitch them around Diwali season and I didn't even know what it was. I was just reading it off a script. >> Yeah. >> But it's this like Indian giftgiving festival and gold is like prominently. Well, I mean India just if you think about what the world looks like, it's going to be more fragmented and and and and that's not a bad thing. It's good that like other countries are getting wealthy. All I mean is that the the Chinese economy has nothing to do with the dollar, right? The the Roman be and the Indian rupee they they don't want to dollarize economy in any way, right? So, all I'm saying is they have their own ecosystems. What's the common, you know, kind of number two currency is going to be gold. What's so funny about that is it's like um it's like a complete uh 360 back to the way it used to be. Gold was the common currency >> 100%. >> Um so now they have this belt and road thing but it was the Silk Road and it's like everybody could agree what gold was worth. >> Yeah. >> So like you had this barter system and but like gold was the medium that everyone just looked at and said, "Okay, I understand the value of that and uh we're you're you're suggesting like we're sort of headed back there." Look, I'm just saying, you know, you can make fun of the deficit watchers like your guest was doing. And I always just my first counterpoint is that the hedges have worked great in my portfolio. I don't know about his, right? So, that's number one. And then number two, I guess what do we look at? We look at the 10-year and we look at the 30-year. >> And what I like to say is we know the government's going to default on its debt in the next 10 years. >> People look at me. >> Wait, what? >> The US is going to default on its debt in the next 10 years. We are not going to meet our social security obligations in 2033. That's less than 10 years from now. We are going to cut payments down by 20%. That's a selective default on your obligations. >> Are you adjusting that for Vid Nvidia? >> How are we all right? >> No, no, no. The trustees say this. Everyone knows that political suicide. Who's going to do that? >> So, well, so I said you have two chances to fix these problems. You Sorry. We you fix a problem like this the year after a presidential election. We only have two presidential elections between now and 2033, right? We just had one 2025 and then we've got 2029 >> in his third we'll take a look at this. >> So it has to be bipartisan. Like I wish he would have dinner with Hakee Jeff and say we just got to solve this problem, right? We can't we can't cut the benefits to people who are relying on social security. But there's no way one party's going to do it on its own. Right? >> I think so. I'm going to default. >> Does that convince you? No. You're rolling your eyes. >> I think one of the the great things about investing is to your point. >> It doesn't really matter because the price is the price. And if you don't understand that gold is being accumulated just based on its price action, then you don't understand the first thing about investing. That thing is being bought. >> Yeah. It's working. >> Not just the ETF, but gold in general is being bought. I remember 3 years ago Costco was putting gold coins into the stores and they couldn't keep them on the shelf. Dude, this is a face blower. Look at this. What is it? >> Yeah. What are we looking at? >> Uh, this is it. Foreign foreign central banks. What are they buying? They're buying gold. And they own more gold than treasuries. >> So, for the first time since 1996, foreign central banks hold more gold than US treasuries. That that this is a wildly big deal, I think. >> Yeah. So, what the central banks did is sort of like in in different phases. First of all, the uh, you know, developed market central banks said, "Oh, gold is so old like we're going to start selling it." So LII Europe uh started selling their gold and then what's been happening recently is basically the new rich countries the emerging market countries are buying. So India, China uh slowly even Eastern Europe. So that's that's basically what you're seeing here. Um they just want to hedge against the dollar which makes a lot of sense right. >> What's the y-axis? 35 uh 30% of their% of their total reserves. >> So central banks have about it's it looks like 30% of their reserves in gold. >> Yeah. and a declining 25% in US treasuries and for reference that number peaked around 2015 2016 at 30% for treasuries. >> Can I give you the the other side of the argument? >> Yeah. >> So the bullish side of the argument is that they are we are reducing our budget deficit >> and so in the last fiscal year of 6 and a half% of GDP which I said was crazy from a historical or any other perspective. Besson just yesterday is talking about getting that to five or five and a half percent. So since Trump has been in office, it's been at 5 and a half percent. Tariff revenue and that's why they keep talking about tariff revenue. Um so we'll see they love the tariff revenue. >> So if you're if you get down to five or five and a half% within a year, >> then you can grow your way out of it and then it just doesn't matter, >> right? And so I think I think >> is that your base case of what ends up happening? >> I think we don't know. I'm just saying it's the it's a big force in the markets that we got to watch and obviously government debt matters in people's portfolios and I just think you know we think you need to have a hedge >> but I don't think I I know for sure that there's going to be that I was making fun of so not fun of social security I was kind of using that to make a point but there's both sides of the argument so I I I a little bit agree with your your guess that you can't overly and only obsess about >> I would I would say that the deficit has been a worry since the beginning of time, it's only gone up and to the right. Um, so I am not super concerned about it. However, it does seem like the type of thing that even if there's a 0.1% chance of something going wrong, it's like the ultimate something going wrong, right? So like I get it. Well, it's always been the risk has has come out of the banking system. It's coming out come out of Wall Street. Basically, if you look at our financial history, this would be the first time that the risk since pre Alexander Hamilton came out of Washington DC. >> Right. >> Right. >> Uh, it's interesting. Yeah. Nobody worries about bank balance sheets. >> It's like no one worried about housing debt until housing debt blew up, right? Because it never happened before. >> Do you think we'll see a central bank start to accumulate Bitcoin? >> Our central bank, >> any central bank, >> there's probably a few that already are. >> Well, yeah. I mean, aren't they doing that? The Middle East countries are mining it and so they're accumulating it. They're not selling it. But, um, yeah, I think eventually. >> Yeah. And if you're worried about volatility, definitely the answer is to start accumulating Bitcoin. I love it. I I love it. Um, let's talk private equity. It's been brought to my attention by one of your employees. Give this guy a raise. >> How do I say his name? >> Bo. Bo. >> You call him Bo? Yeah. Okay. >> So, um, I did this I did this thing on, uh, private equity investing and, um, I had a little bit of help from Sean and Chart Kid Matt. We were just basically trying to figure out like is it better historically to have invested in private equity funds or just buy the stocks, the publicly traded companies that are the biggest private equity uh players. And I mean it's it's night and day. Like if you bought the stocks of Blackstone, KKR, um etc. the top 10, whether it's by market cap weight or equal weighted, you turned uh you turned $100 into $264 owning the stocks. >> Yeah. Whereas if you bought I mean this is one index but the Bloomberg PE index benchmark which aims to capture the returns of all their funds um you turned $100 into $113. Now that's in a three-year period. So it's a little unfair but just conceptually I asked the question why be um an LP or an investor in the fund when you could be a GP or a sponsor of the fund by owning shares of the sponsor. So, your guy reached out and uh >> he tried to sell you our ETF. >> Yes. No, but that's Listen, man. I want I want my people uh this this aggressive. He said, "Hi, Josh. Hope all is well. I am Bo by way of introduction. I've been an avid fan for a while. I listened to your session on the Prof Markets podcast um and was struck by the analysis you highlighted between the performance of the stocks of alternative asset managers versus the performance of their fund. I recently joined Van to lead coverage of our asset manager channel. Uh uh let me skip ahead and I've been highlighting this trend as captured by our GPZ ETF. I didn't know this existed. I went through all this trouble to build like my own model using the individual stocks. But uh the VANC alt asset manager ETF. What a great idea. >> Isn't it amazing that didn't exist? I mean it's like four or five when did you start it? >> Like four or five months ago. I am super bullish on this theme. >> You are. I want to buy this bullish. I want to buy this ETF. >> I own Blackstone. I think I This is >> Okay. So, so here's the issue with that time period, Josh. These companies, alternative asset managers, right? Because their performance fees aren't necessarily that predictable used to trade at a quite a significant discount to traditional asset managers. I mean the argument in the old days right when the hedge funds were all over Wall Street is there's no terminal value to these hedge fund businesses right what's his face famous hedge fun guy retires there's no business left now there is >> right >> so right so now they realize wow these are you know very um you know they're diversified they're constantly achieving these returns you could also argue the alternative credit managers have a competitive moat because if you want a billion dollar check for a data center you're going to blue owl or Apollo or Aries, you can't go to some small $3 billion. >> There's not a thousand, right? There's not a thousand players there, >> right? And so, so I think you know, so that's about 45% of the portfolio. Yeah. So, I kind of like that story. >> What's the other 55? >> You like the credit the private credit part of the story better. >> Since the financial crisis, the government basically said, you know, banks get out of the risky lending business. So, now there's risky lending. >> Are there any moes in private equity? because I feel like my inbox is filled with thousands of offers from companies I've never heard of. >> Yeah, you get the bad ones. >> I only get the Well, I get the good ones. So, >> so can I ask you guys a question? So, if you look at these unicorns, right, all these private companies, there's about three trillion, you know, rounding up, right, and market cap of these private companies. And you go to an RA and you say, "You're missing these out of your portfolio because the Stripes and SpaceX, they're just not going public. the open AIS, let's say they never go public, but you should have some exposure in your market cap weighted portfolio. >> How do you not open AI? $400 billion. >> Small caps, by the way, are like 7 trillion, right? So, so it's a little wedge in your portfolio. So, does that appeal to you? >> I think I think to a lot of investors, depends on if the NASDAQ just went up over the last six months. Yeah. >> Wait, are you saying you can get me into OpenAI at $25 billion? I'm in. >> So, what's the answer to that? I I I'm asking you like honestly we think about so we we used to we actually have some private funds and and for that business I think its mentality is totally different than the rest of our business. ETFs are in economies of scale business all I care about for my hedge fund and my early stage venture fund is total return to LPS. >> But what you're talking about is very different. You're talking about like early stage investing versus growth investing. These are very different things. The markets are going to mature, right? NASDAQ marketplace and Carter and all these companies are coming in a big way. Black Rockck is going to be in there. So this I think we are still very very early on the transformation of of private to public. >> I think we're still very early. So these these names are going to work uh >> to buy. >> Yeah, I think to buy >> um I think the ETF will work. I haven't even looked at the holdings, but just I think the tailwind is probably a 5 to 10 year tailwind. I don't think this is a uh I don't think it's a fad. I think as more advisors start to utilize these tools in their portfolios, >> yeah, >> some will work, some won't, but they won't just stop for some reason, it's different than when they threw all these hedge funds in our faces 15 years ago. >> That because that I think suffered from the problem you described like everybody wanted to be in John Paulson, everybody wanted to be in Steve Cohen, everybody wanted to be in like the hot manager. >> Yeah. >> That's not uh evidence-based. You can't like a financial adviser >> cocktail party like investing. >> Like a financial adviser who talks to their clients about Vanguard funds is never going to be the same person that's like I'll do anything to get into 72. It's two different people. But this stuff, if there's a way to show people a systematic approach to making loans at a private credit fund, you will have that advisor's attention and that adviser will not feel like a clown re-explaining that to their end customers. So I think the runway here is like 5 10 years, >> but the the open the open AI the names that you mentioned that's that's venture stuff, right? That's not private equity. Private equity traditionally is you borrow you you buy a a small cap a micro cap you lever it up and and it works right it's it's equity it's equity and leverage it works >> right >> uh advisers are never going to have early access to these names for their company for their customers if you want to get into and today you could do it at a valuation that you know is not what early investors got and it's fine that's that's the way the the market works >> so latestage access is okay to growth companies >> well the reality of there being enough great startups in order to satiate the demand of like trillions of dollars. Like it's just it's imp it's a it's an impossible thing. And I was debating this with somebody who was like it's not fair. Yeah, I know. Like like we not everything gets democratized cuz life's not fair. I don't know a better way to answer that really. It's it's unfortunate. I wish everybody could have open AI. You can't. And and if you could, you probably don't want it. If Open AI decides we're going to raise money at a trillion dollars, yes, there's plenty for everyone. >> Wait, that's nonsense. It's not fair. That's a ridiculous argument. It's not fair. >> It's not fair. Okay, >> the closer you are to to these values, the more likelihood you are to have access to invest early. So, that's ridiculous. >> No, this is ridiculous. This is the way the world works. First of all, power is obviously concentrated. Yes. The people that have these relationships get access. But also, a lot of the venture investors that are putting money on the line, for every open AI, there's a million that go to zero. Correct. Want those two? Most people don't. >> Exactly. So, they're taking the risk and they get the reward and sometimes they they eat and that's the way it works. Matter of fact, being a venture investor, it's not been fun for the last three years at all. Yeah. If you were an open AI and some of the big winners, you did great. Yeah. >> But it's been a it's been a desert out there. >> Yeah. My advice to people who are like on the outside looking in and they're like, why don't I have access to this or the easiest way to have access to the shares of an exciting preipo startup is to go work there. I mean, seriously, go get a job there. You will you will be in the stock option pool if it's not important to you. Second easiest way, be the college roommate of the founder. I mean, you have podcasts, give speeches. It's an amazing thing. That's a really easy way to get access to. >> But wait, Yan, you've you've done a lot of early stage investing. Like, I'm sure like like me, you have a lot of zeros in there. That's just the way it works. >> Yeah. I haven't done a lot. Yeah. But um Howard, I like to invest with Howard and um you know, we we hired the team out of circle and they've come off to a really good start, but you know, it's a $40 million fund, >> right? >> You know, and and you got to cap these strategies. I mean, we have a hedge fund that's done fantastic. It's like 47% annualized, >> but you you know, what do you have a half a billion or a billion dollars in capacity in that? >> Everybody can't get in. >> It's a different business. >> These early stage companies, they don't need all the money in the world. That's not how it works, >> right? Yeah. >> Let's do some crypto stuff. Um, so you've you were pretty early to crypto amongst the traditional asset managers. You've been very open-minded about it. You've been bullish about it for a really long time. What do you make of the state of crypto this year? And why is Bitcoin falling? >> Uh, well, Bitcoin and crypto are totally different things. I mean, Bitcoin's hit all-time highs several times this year. >> I know. Why is it It's corrected recently, but Josh, come on. Take the month of August off. I'm teasing. All right, so that's Bitcoin. Um, so crypto I think look is uh blockchains are a great technology but >> who cares? Nobody cares about that. I know I know I'll be I'll be brief. I'll be brief. Look, it it it was only in 2023 that blockchains became at all a non-toy. What I mean by that is the cost for a database have to be low and reliable. Right? before 2023, ETH fees, ETH, ETH gas, excuse me, the transaction fees were all over the place. Yeah, right. Bitcoin all over the place. No one's going to build on that. Any CTO is going to like not even talk to you. They're not even letting you in the conference room. >> That changed in 2023. Okay, so now you have Salana, a you know, a lot of cheap uh reliable blockchains. >> Now you have stable coins being legalized, right? every financial institution is going to want to have stable take stable coins right in from their clients. You're going to have a checking account, savings account, you know, credit card and your bank app and they're going to want to be able to take stable coins. That's now starting maybe it takes a year and that'll be built out, right? And so I I I said that's I was explaining the other day, ETH is like the Wall Street token because that's what people are going to build on. It's Ethereum or something. Their their methodology is ETH virtual machine, right? EVM. So there's some EVM compatible change. So that's what Wall Street I think is going to build. >> They're going to standardize on ETH as the way they tokenize all the securities. >> EVM, right? So that's why ETH is like rather like crazy over the last It's more than doubled since >> we thought it was Tom. It's more than just Tom. >> That was a great interview, but it's more than Tom. >> Look at this. This is back to the price. Nobody cares about these blockchains. >> The So Hogan tweeted >> Hogan loves when you hold this laptop right in front of the list. I can attend Hogan Hogan tweeted this the one year, two year, three year, 5 year and 10 year keer of Bitcoin versus the S&P 500. And for people that don't own Bitcoin, this hurts. And they're mad. And I'd be mad, too. This this feels unfair. >> Bitcoin's outperformed. Yes. >> But the the the level of outperformance on every time frame imaginable off of uh what people still think is just imaginary funny money nonsense. So common sense. It's digital gold, right? The supply is limited. People have a demand for that kind of stuff and it has hit escape velocity like in in the mid- teens. So by 2017, like there was a little chance that anything was going to catch up to this, right? Millions of people had already adopted it. And then if you just say, okay, it becomes half the value market value of gold. Boom. That's $400,000 in Bitcoin. Like it's not like a crazy like it is just kind >> the concept of a new financial system was just really hard for people to even wrap their heads around and the loudest voices not the best people in many cases. Um and you know the FTX and the rugs like you can understand why the average person doesn't believe. Now for people that spend time around this I think it like it's more makes more sense. >> It's extremely generational right a lot of young people. Um, and yeah, I can't really explain it. I say don't if you don't if you don't want to ever believe it, don't spend time on it. And if you're a financial adviser, don't spend time talking to clients about it because it's >> I have a joke where somebody starts talking about, but what is the use case? And I always say >> this, >> picture this. You're in Venezuela and then and you lose people that way. Um, but Michael and I were doing a show on Tuesday night and we looked at a chart of Western Union and Western Union effectively has vanished. It share price is $8. And I said, I think this is the first US company to be literally put out of business by a blockchain technology. >> I bought some Western Union today. >> Well done. >> All right. Let me can I give you my history history point here? Yeah. >> This is why I think the stable coin bill was so important. It's the third most important piece of bank legislation in US history. You got Alexander Hamilton sets up the credit of the US. You got FDR that puts in deposit insurance and saves the banking system. Trump. >> And then you've got stable coins, which enables tech companies >> to get into the payments business without being a bank. >> No charge. >> Everything else in your financial life, you have to touch the bank. You have to go to your checking account and do everything from there. Not anymore. >> Right. You can remember they made fun of Zuck when he wanted to do Libra that stable all like it's this was bipartisan. It's not getting reversed. It's it's it's pretty radical. >> You think it's going to have that big of an an effect? I do >> in taking fees out of the system, speeding up the movement of money. >> Payment stack is totally going to change. >> All right. Uh slight >> there'll be more Western unions. >> But what's wrong with Venmo? I keep asking for us >> or >> that that's fine. >> You're not Venezuelan. You don't understand. All right. Wait. Slight pivot. uh when Robin Hood announced they were going to build this thing uh ETH is going to be the underlying uh base but it's like tokenizing securities corporations who themselves issue stocks did not like it so I I was surprised at the negative reaction I just I think companies were saying like make no mistake whatever Robin Hood is cooking up these are not secur These are not securities that we have issued. There was a little bit of like a mini backlash and then Robin Hood quickly stopped talking about it. >> Yeah. >> So what was your take on that? >> Those were private companies and there is that dynamic going on. Okay. >> Right. Where if you you get into this world of SPV special purpose vehicles, right? So, uh, SpaceX does rounds of investing and suddenly there's 10 venture capital funds and they're all sponsoring SPVS to invest in different rounds of SpaceX. These companies don't Elon's like, I don't like this nonsense. I don't I don't even know who owns it. And frankly, if you own SPV, you have no idea if that VC firm disappears or the Carter blows up or whatever, you have no idea. You have no transparency. So, he tries to clean that up, right? And that's what these companies they want to control their own you know cap table which means they are private they want to control who's the shareholder right like rit holes like your company van we want to control who our shareholders are right we may not mind having some minority shareholders but we don't want just anybody >> do you think that's going to happen though do you think that'll happen in a more accepted way not the private startup companies but maybe public companies similar to an ADR to me >> where somebody comes along and says we're going to create something that is represented by a share in this company. We'll be the ADR sponsor here in this country. >> Y >> the issuer is in a foreign country, but if you want to trade the security here, use this. That worked. The ADR market is fairly substantial. Is this like the next evolution where people say, "How would you like to trade a security but not be in the dollarbased world, be in the stable coin world slash move in and out of these tokenized securities?" >> It's it's a it's just a tugofwar and I don't know how it's going to play out, right? Vlad on the CEO of Robin Hood on our behalf, we all want to be able to trade SpaceX, right? Or or open AI. There's huge demand in the wealth channel for this, right? And then there's the founders and they may like it, they may not like it. In that case, they didn't like it, but you know, maybe they get comfortable. And the and the weaker the founder, meaning if the company's super hot, sure, they can suck up all the shares, right? But if they're kind of meh, then you know, too bad. They're their shares are going to trade. >> But you know what's weird? If this becomes like a liquid market, what about like investor protection and disclosures? >> Oh, well, stop. It's 2025. What are we talking about here? Nobody cares about that. Wait till the next uh market crash and then we'll talk about that. Um are there any other charts we do we want to do this? >> No, we did it already. >> We're not going to do the the treasury stuff, are we? We did. >> Okay. Suffice to say, Yan is super bullish on the uh digital asset treasuries. How do you really feel though? Honestly, you think they're you think they're good for investors because they're creative and they're giving people a new way to bet or >> I mean, look, the these companies, let's say they just are public companies or corporations that buy some kind of crypto asset to describe what a dad is, right? And so, Michael Sailor has the most famous one. I think it gives some people the ability to buy access to that crypto with an ETF doesn't exist or they just want to own it in that form. So that's a limited use case. So what >> how about if you manage a convertible bond fund? This has been a home run for you. >> Yeah. >> Seriously, >> why? >> Like buy the buy the bond >> the micro strategy convertible bonds. >> Oh no, we own strategy and a whole bunch of our ETFs. We're like what? What's going on? So that's a yeah, that's a separate thing. But and then the the a the positive spin is for some of these foundations. So a foundation is basically the original founding group of a token right and let's say they issue a token to do stock trading or whatever it is derivatives trading and suddenly that a lot of people use that platform then that token becomes valuable and they're this weird offshore thing now called a foundation. Most people don't know about these foundations. If the foundations say, "Okay, you know what? The United States is hospitable to to tokens and to crypto. I'm going to come on shore and I'm going to be like a normal software company and I'm just going to be like a version of Unix, like an open-source software company that specializes in something." >> That's sort of what Ripple That's sort of what Ripple was trying to do. >> And then they got accused, some would say rightfully, of issuing securities away from the securities laws. and they fought it for I don't know 12 10 years how long however long um so these companies will look increasingly more normal >> some some will right and and and the test is right to to avoid being a security uh all these will all be securities is are you centralized or decentralized right the good thing about Bitcoin is completely decentralized there's no one person in charge um other companies there'll be a range of solutions >> okay what do you want to do with the next 70 years at uh VANC. Where do you think uh where's the firm going? What are you excited about in >> private market investing? Are you kidding me? >> Okay. All right. Good. So, how are you going to do that? >> We're looking at it. >> An ETF rapper or no? >> No. Like Interval Fund maybe or something? >> Interval fun. Okay. Uh I hear those are hot. >> So hot right now. >> So hot right now. All right. Do you have fun on the show today? >> It was great to be here. >> All right. Dude, it's so great to see you. And you of course will be at Future Proof. Um have you been to all of them? >> Did we ever miss one? How many How many were there? A million. It feels I don't know. I'm so tired. >> I'm already tired thinking about it, right? >> I'm already tired thinking about it, but I also can't wait. >> This is my third third straight. There we go. >> So, I'm like, yeah, whatever, >> dude. I'm psyched to I'm psyched to see you in California. I'm so glad you're going to be there. Um I want to thank you so much for coming on the show. We really appreciate it. And uh aside from your podcast, your secret podcast that we just learned about today, um you're active on I think your Twitter, LinkedIn. >> Yeah. >> Okay. All right. Awesome. Guys, make sure to follow Yon Vanak. Wherever he's saying things, you're probably going to learn something. Um, we always end the show asking people what they're most looking forward to. Would love to hear if you have something for us. >> Okay, so college football, USC fan, uh, hockey USC, >> USC, University of Southern California. All right, good. My wife went there with that. >> Uh, New York Islanders hockey fan. >> Okay. >> Um, >> they're playing each other. My my one shout out if I could. Um there's something called and I'm not really big into healthcare or anything called a calcium CT test. If you haven't taken it, >> take it. It's the weirdest thing. It's a $200 test. No one prescribes it ahead of time. It's basically a way to see if calcium is building up in your veins. And it's like there's opeds about it. Brad Gersonner talks about it. And I'm not a healthcare guy, but why don't people take these tests? It's insane. So it's calcium CTL. You just ask your GP and I did it. Someone told me to do it and my GP is like why do you need it? I'm like cuz I want to take it. >> I read about it on Twitter. Just give it. >> What does it have to do with the islanders or >> USA? Nothing but I'm looking I'm looking forward >> looking forward to his next calcium. >> No, I'm looking forward to other people. What's that in my neighborhood? Like he didn't take it and suddenly he took it two weeks ago. It's off the charts bad. >> What do you do if you're off the charts bad? >> You change your diet and you take a statin. Okay. >> So, wait. Literally, USC Islanders, I don't I don't get the connection. >> There's no connection. I'm looking forward to hockey season. It's like Knicks, you're looking for >> We're excited the same way for the Knicks. >> You know what I'm excited about, Yan? Speaking of USC, I'm going to see Oasis at the Rose Bowl. >> Oh, sick, right? >> That's awesome. >> I Why do you have to do this? I was supposed to go and my wife and I told him, "Get me a ticket." And my wife's like >> 20 minutes later, he goes, "Uh oh, some of my money back." >> No, it was the next day. I think was it the next day or a week later? >> It was very It was very soon after a friend, >> dude. I called Michael. I'm like, "I'm so sorry. I'm not allowed to go >> to his I'm like, "Can you cuz we you bought on StubHub or something?" >> Whatever. >> I'm like, "Can you like resell it?" He's like, "Don't worry about it. I got it." Like he didn't make me He didn't make me feel like a loser about it. Um there's a good reason why I can't go. Um I didn't ask permission for No, there's a good reason why I can't go. I was so I was so upset that I couldn't go. All right, we're going to get out of here, guys. Thank you so much for watching. Thank you for listening. We really appreciate it. Great job this week. Duncan, John, >> whole crew, guys. >> Happy birthday, Duncan. >> Happy birthday. Happy birthday, dude. >> What are you looking forward to? >> Uh, future birthday. >> All right. What'd you do for your birthday, Peter Luger? >> No. >> All right, guys. Thank you. Uh, we'll be back next week. See you soon. Bye.