Market Outlook: The podcast discusses the current state of the market, highlighting the impact of the US-China trade tensions and the recent threat of 100% tariffs on Chinese imports, which caused significant market volatility.
Investment Risks: A key theme is the risk posed by a "frothy market" driven by flawed assumptions, particularly the misconception that a US-China trade deal was imminent.
Economic Insights: The discussion touches on the economic challenges faced by China due to US pressure, and the potential implications of the US government shutdown on consumer spending and retail sales.
Investment Strategies: The podcast emphasizes the importance of understanding the risks associated with short-term, speculative investments and the need for investors to be cautious and informed.
AI and Technology: There is a focus on the role of AI and technology in shaping investment strategies, with a discussion on the potential overhype surrounding OpenAI and the importance of monetization for tech companies.
Retail Investing: The conversation highlights the evolving landscape of retail investing, with platforms like Stock Twits enabling retail investors to access information and make informed decisions.
Future Trends: The podcast explores the potential of prediction markets as a new frontier in investing, offering opportunities for retail investors to engage with the market in innovative ways.
Government and Corporate Dynamics: The merging of Silicon Valley with government interests is discussed, particularly in the context of state-owned enterprises and the implications for the investment landscape.
Transcript
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Sit back and get ready for this edition of the disciplined investor podcast. This episode of The Disciplined Investor is sponsored by Horowits & Company. If you're looking for a portfolio manager, look no further. Horowits & Company. From seed through harvest, cultivating financial success. [Music] [Applause] >> Bank earnings are out and they're looking pretty good so far. China trade war. What does that really mean anyway? 10-year yield is tapping 4% and the markets showing another VR recovery. Our guest today, Howard Linden, social leverage and stock twits. All this and much more on episode number 943 of the Disciplined Investor podcast. [Music] Well, well, well. There is so much going on. And it seems that the more chaos that we get these days, the more the equity markets seem to rejoice. They love it. They, oh, we got so much things going on. We got big dips because this one says that, but then they turn around and they say something different. Wow. I'm back from a vacation quickly. Uh, just I got to tell you, every once in a while, you got to step back. You got to get out of your environment. You got to figure out where you want to go, what you want to do. It gives you a few moments to understand more about the world. Not only about the people, their customs, their religion, their way of being, how they see us, how we see them. You have to do it. I had some amazing times in some unbelievable countries looking around the world and looking from afar. I started thinking about what happened last Friday, not just a few days ago, one week before. And that was the day that well it seemed that President Trump got really pissed off and he say he's going to put 100% tariffs on China market caved in 3% on the NASDAQ. It it looked to me like just one thing was after the other looking for some kind of excuse something just to take out some of the extra frothiness. And one of the biggest risks that we have in a frothy market is flawed assumptions. And we're going to get to that. For those of you that don't know me, I'm Andrew Horowitz. I am the host of the Disciplined Investor podcast. I am the author of not only the book, but the audio book of the same name, The Disciplined Investor: Essential Strategies for Success. Uh, I've written a couple other books also. I've also am the co-host of DH Unplugged with John C. D'Vorak. We uh we launched a show on the evenings on a Tuesday each and every week. And the last couple of weeks we had some best of that were just hysterical. If you haven't had the chance to go look at that, I highly encourage you to do so. So, I was talking about the risks. I was talking about frothy market conditions. I was telling you about that in the kind of environment that we're in right now, it doesn't take a lot to get markets going one way or the other. The assumptions that we have that everything is going to be just fine or the facts that we look at, well, maybe maybe there's too much embedded in. But again, the biggest thing that I'm seeing right now is a frothy market is at risk when we have flawed assumptions. In the case that we're looking at right now, the belief that US and China have reached a trade deal and basically it was essentially in place. That's what everybody was thinking because we were told that we're great friends. We have a framework. Besson's going over to talk and there's a meeting coming up with X and President Trump. Everybody's friendly, loves each other. Kumbaya, what a wonderful world. And even though the rare earth situation and the port issues and the fact that we have all sort of terror, that doesn't matter. We're friendly, aren't we? Total horse crap. We're not friendly. We're adversaries. And now that officially President Trump said we are in a trade war, again, I don't know what that means, different than what we have right now. But the notion that a trade deal was in place was pretty much disproven with the recent threat that 100% tariffs are going to be imposed on Chinese imports as of November 1st, which was a direct response to China's rare earth export curbs. These are materials that we really need and why we saw such a significant amount of I guess we'd call it a boom in the rare earth material related stocks last week. Wow. And this year for that matter, up until Friday, not this Friday, but the week before, it seemed as though investors had no care at all about which companies they were quote throwing money into. throwing throwing money. The hard-earned money that we have that we spend our days toiling for that we gather from our jobs and things that we do whether it's a 9to-5 or a gig type deal. It doesn't matter. I'm going to throw some money in that. And every time I hear that that that that phrase throwing money at this or that investment to me it's a huge red flag because what it does is it it signals this lack of understanding about actually what the risks are. And what it does when I hear that it tells me that you are a short-term short-minded weak-handed investor. Doesn't mean you're dumb. I'm just talking about your investments, what you're doing, right? You're a weak-handed investor who's probably going to be quick to pull out if things don't go your way. And I don't know if this particular I'll go so far as calling it a careless pattern of investing will change but Friday surely seemed to spook a few investors when again these bold threats that were issued by President Trump against China were set to take place. Now when I heard that I was thinking okay well what what's the potential here because we have to analyze this right? A lot of times, President Trump will say things that he doesn't mean, which is not a good way of doing business, but okay, that is a way we need to understand about how he does do business. The date November 1st, why? Well, because it sets a few weeks into the future. Nothing's right now. That could be changed. There were four different possible outcomes that I noted once that happened. First, during that period of time, they're going to attempt a resolution of some sort. The second, they'll extend the deadline. The third, they'll pressure and successfully get China maybe to lift lift these export curbs on the rare earth materials. And four, somewhere between now and then, it'll be lost in the shuffle of other news. And probably because it was a Friday afternoon, all of this will be walked back before the opening of the future Sunday night into Monday of next week. And lo and behold, my favorite horse in that race was clearly number four. As soon as this happened, I said, you know, this seems like they're going to have to come in and walk this back. You see a 3% drop in the NASDAQ, 2% drop in the S&P on this on this news, right? which was the most likely. Again, number four, equity markets reacted very poorly to this announcement. And um what do we see? We did see that JD Vance, Vice President Vance said, you know, it's a negotiation tactic. Could you imagine if you were playing poker and you went all in and you were trying to pressure everybody around the table to believing that you had something and then you just say, you know, by the way, this that's a bluff. who says it's a negotiation tactic and why would the other side do anything about it? Therefore, it seems to me China is going to dig their heels in, which is what they did. By the way, the challenge you have right now with China is that their economy is in rough shape. President Xiing, like Trump, he's stubborn. I mean, really stubborn. These guys are stubborn as the day is long. And after months of economic pressure from the US, China, it's wounded. And what do they say about wounded animals? Could be the most dangerous. So now that even though we have heard time and time again that President Trump has said things like um you know, we have the upper hand or or we hold all the cards. I think we have to remember something very important here. those particular cars that we're holding all have been manufactured in China. And the threat from either side at this point due to the power players that we have that are that are creating these threats and these rules and these uh uh export curbs, tariffs, etc. They're going to each be met with substantial resistance. I don't think we're over yet with this whole China mess. If in fact they cave and they come to some kind of a deal, whichever that is, I don't know what that deal is going to be or mean, that's great. I'm all in favor of having a good trading relationship with China because we need China just as much as they need us. By the way, make no bones about that. And if you're in there talking about how no, that's not the case. really take a look at what's really going on around the world and how we need these countries whether it's Vietnam, China, Korea, uh, Indonesia, you look at um, uh, countries like Cambodia, these are countries and Latin America for that matter, a lot of countries there. We need these countries pretty badly. And at a time when our government remains in a shutdown and stocks continue to march ahead making new all-time highs and even though there's not much of a it doesn't seem like much progress making reaching a deal. I don't know. We'll see what happens. It's getting closer. It seems to me um there's some new problems that are going to arise here now. Even though a lot of the governmental workers are on furlow, meaning a lot are getting paid and some of the banks, some of the credit unions that work with government employees will continue paying them their amount due for some period of time. The threats that people will be fired is going to change that dynamic pretty pretty drastically. It's estimated that I think there was a piece last week by JP Morgan that those workers that are missing out on about 400 in totality, $400 million per day of compensation, people that are living on paycheck to paycheck that can't get paid on this. That's a problem. We're going to see this show up in retail sales. The suffering and pain, by the way, for people who can't buy certain foods and maybe kids that will be going without. It's pitiful and shameful. But the markets right now don't care because right now the drivers right now are what? Two things. AI, artificial intelligence, and rates. The Federal Reserve at the last meeting, they reduce rates, we know by 25 basis points, right? It was a stimulative measure. Now they're talking about no longer dealing with quantitative tightening. So ho wait ho wait a second. the quantitative tightening which was used as a mechanism to bring down the debt overall of our country from the ballooning amount the the unsustainable amount of debt that we put on over the last 15 years and in particularly the hockey stick that was added the the amount that went from two to four to eight trillion dollar plus plus or minus during co that's not even been reduced by anything reasonable. So pretty amazing what's going on right now with regard to all the things that nobody seems to care about. I don't expect maybe people need to care about this, but they're looking out further into the future. But if they're looking out further in the future, they're also discounting the fact that we have a debt problem that is going to be with us for the next I don't even know x amount of decades because we're doing nothing about it and we're unwilling to and our uh our government and all the people involved in this particular matter don't have the courage don't have the courage to do anything about it. It's really a shameful situation. All right, we're going to uh we're gonna move over and start talking about our guest. Before we do that, I want to talk about Interactive Brokers. Uh here's another question I think you should think about. Will the US consumer sentiment index exceed 56 in October 2025? At IBKR Forecast Trader, the yes was recently traded 40% and the no was at 58% which is pretty interesting. With Interactive Brokers forecast contracts, you can trade on future events like climate, the economy, or even politics. Pick yes or no, and if you're right, you earn a dollar. Now, forecast contracts are not suitable for all investors. Make your prediction. Go to ibkr.com/forcast and start predicting today. The last trading day for this contract is October 24th. Now, our guest coming up today, who do we got? Howard Linden. Love this guy. He's um he has decades of experience in both public and private market investing. He previously founded and managed the hedge fund Linden Capital. He's the current founder and general partner of the early stage venture capitalist uh capital firm social leverage as well as CEO at stock twits which is a leading platform for traders and investors and through social leverage he and his partners have made investments in companies like Robin Hood and Beehive Manscaped to name a few. He's the founder of Wall Street that was acquired by CBS many many many many years ago and throughout his career he's uh been a strong advocate for and helped drive the decentralization and democratization of investing. Let's bring him right on. And our guest today is Howard Linden. We talked a little bit about him. He's been on before. He's a great guy. Howard, how are you? >> I'm old. I'm 60. >> Yeah. Well, that makes me old. My last podcast could be my last podcast >> ever. >> I'm 60. Anything could go wrong. I have to pee really badly right now. >> Oh boy. >> So, let's let's do a catch up on Stock Twitch. I want to start off with that. Talk to me about the cash awards. >> Um cash awards are something that we did this year. We've got Stocktoberfest coming up. Cash tag awards were like our tribute to like the SPS of of of of retail investing and financial products. You know, last year we got we gave out the first uh lifetime achievement award to VA or you know product of the word to Vlad at at Robin Hood. You know, stock I think was at about 30 bucks. >> Um you know prediction markets were honestly not not a thing. At least people didn't think it was a thing and they've had a hell of a you know we my old my fund is was a seed investor in the company but just couldn't have predicted the year that they had but it it really cash awards more a celebration of like finit and the cash tag and and stock twits and and just retail investors like you and I >> right that's cool stuff >> you also brought on an Marie Gianoso who is the chief commercial officer Now, um, she was from Drone Racing League. >> Yeah. >> That is that Wait, wait, hold on. Is that Is that >> where I've seen this on TV where they're like >> buzzing around this >> track thing with crazy >> ups and downs and all? >> Yes, it is. She was early there helping build out the whole impossible project. And um you know stock is growing really fast and we needed a head of of business that understood crypto because crypto were like large sponsors of that. Some of the crypto companies were large sponsors. So she was referred to me um recruiting is like you know as a founder and an investor in lots of startups. We were basic our basic job is recruiting. We don't get to do the stuff we want. We have to find good people and which is you know unfortunately I didn't know that when I started out doing it cuz no one wants to recruit. It's it's it's it's a thankless hard relentless competitive uh endless uh search for talent. Um which is not what you start a company for, right? Like if they told you all the reasons you got to start a company and said by the way you won't be working on the stuff you want. You'll just be recruiting people and trying to sign them up for your mission. It's tough. But um >> but Ann came to me highly referred and uh we hit it off and she's doing a great job. >> Wow, that's great. And um this is her her job is what? To do what though? >> Well, Stock Twits still today is the you know like Twitter an advertising business, right? um we have subscribers but like 70% of our business is advertising and so you got to go you know sell ads and get partners and you know we from Poly Market down to the ETF companies they all are customers of ours and partners and and and uh rely on our email and our branding and our impressions around the web for for so you know it's a thankless ad business >> right right so she's handed the nano >> so it's going well though I mean people want information, the yearn for information, especially in this area where there's so many different things to choose from, right? I mean, it is it's it's, you know, trying to understand where to get quality information. I think that's the big thing that you guys do at Stock, which is that the cream rises to the top in terms of the we'll call them contributors. I guess it's the right word, right? >> Yeah. I I'll give you the simplest example and and and for your audience that knows a little bit about this, we went we you know, when I started I called this the economy we're in quickly. Andrew, the degenerate economy. And I don't say that to disparrage anybody, but we live at this incredible confluence of of, you know, of economics, politics, free time, the cloud, um, Door Dash, you know, Poly Market, DraftKings, Robin Hood, Coinbase, um, vaping that you give a kid 23, you know, the the Elvis in the room is not Elvis. The Elvis in the room is your iPhone and the cloud and the 23 hour and Netflix. The free time that was handed back to the first time a 5-year-old picks up a you um an iPad and puts on YouTube, the parent just got that's the parent the parents free time just started increasing and then that kid's free time is exponentially growing. You know, that's the angst in in society in general is like everybody's worried about jobs. And I'm like, guys, think about it. We can't go back. People are being handed 23 hours back in their day, right? And so this degenerate economy has evolved. But in 1999, in the very first goaround of the bull market of the internet boom, we lived in a world where you go to Yahoo Finance, Andrew, if you weren't a hedge fund guy and you didn't have Bloomberg. And we thought that was Nirvana and we were 20 minutes delayed quotes. Yeah. So, we were doomed. We just thought we were cool, but we were doomed. And sure enough, 20 the year 2000 came and went and the crash happened and we realized that 20 minutes is a lifetime if you're trading against other people. Right. >> Right. >> And then we had a bare market. And then along comes when nobody expected a Twitter. And when I saw Twitter, the only reason it made sense to me as a stock guy is because I was the Yahoo Finance idiot. And I was like, wait a minute, we just went from 20 minutes to real time. I think this is going to be an incredible, you know, exponential improvement for retail investors. But of course, everybody was skeptical and, you know, my thesis in 2007 was the president will end up saying something and the market will move and you won't have to wait to hear it from Bloomberg. Right. >> Right. >> So, so I was early but correct. Right. Mhm. >> And and now we so we had this real time boom with Robin Hood and Coinbase and and this incredible innovation happened and I I got it right and not because I'm a genius, just because I happened to understand the difference between 20 minutes delayed quotes and real time. Okay, so that was an exponential you had to be dumb not to make money off the real time economy. But then along came AI and the and the need by Twitter and Facebook to monetize and no one wants to pay for the product. So they have to sell ads. And so what happened is and this is why we have this new era developing which I call postreal time degenerate economy is the real time world is is not good anymore because Elon Musk and Mark Zuckerberg have their finger on the feed and we don't know if what the algo is going to serve us. So, real time became fake news and uh and slop of you don't know when you're reading that person's message based on when it's being delivered to you, even though you think you're seeing it in real time. So, we've now gone to what I call a post-realtime world. And in a post-realtime world, if you're on Twitter and think you're seeing stuff in real time, you're the sucker in the room. M >> and so so now we enter this post realtime world where you need to really pick the groups that you want to be involved with. You don't have to be on Twitter or Reddit or Discord or wherever you think you need to be anymore to catch real time news because real time news happens in the White House when Donald Trump eats a eats a burger and blurts out something to the people around him and then it becomes law or or a tweet and no one has that. There's 10 people in the world that have access to that and not even Elon. So, so you don't want to be in the real- time world unless you're a criminal or very close attached to Trump and and and so we now live in a world where you're better off getting the information one or two minutes later >> curated audience of people that you trust. >> And then as long as you're head of CNBC and Wall Street Journal and blah blah blah blah blah, there's still so much alpha to be had. So, we live in the most incredible time right now because there's a whole reshaping of what um news and information is happening and and this is going to be the most incredible time and I think we're seeing the very first steps of it in year 2025 because retail because the market's up but for the first time in a very long time investors are crushing it. They're destroying the indexes, right? They're in quantum computing and they're in space stocks and they're in defense stocks and they're in gold and the indexes are doing fine, but the kids that are on Stock Twits and the people that are in private groups and the people that understand we're in a postrealtime world and understand where where cleaner um slower information is coming from are killing it. They don't know why they're killing it. They probably think they're smart, but the point is they're just in the early stages of being in the right place in the timing of the markets. >> All right. >> Yeah. I I I but it's also scrub data. You know, the old days where you'd always be like, well, garbage in, garbage out, but also I was always fanatical about where is this data point coming from. >> Very good point. That's a that's a more professional term for what I'm saying. You're better off having scrub data 1 minute, 2 minutes after the fact, if that's what you mean. Y >> than being right there sipping from the fire hose. >> Right. Right. >> Because the fire hose is owned by Elon. Like unless you're a friend of Elon, there is no fire hose. >> Yeah. No, I I hear you. So okay when >> where we are today is there but but do you think that this is translating into a herd mentality where >> No because no one believes it because everybody's still playing last bull markets game fang and uh you got to be on Twitter and you got to be you know uh following what what's her name uh what the old s Nancy Pelosi. Oh yeah, you got to be following >> unusual whales. >> Yeah, the Yeah. No, no, there's there's I'm not saying it doesn't work. I'm just saying for someone serious about investing that is not an institution, this has never been a better time to be an investor because you don't have to invest in the next Uber. The next Uber is probably a small cap company that's been neglected by the indexes that you could go create that you can go do the work on using Claude to do all the financial research for you and deep research that a CFA used to be doing and then go to your group and say, "Guys, look at these 10 ideas." Like, let's just get in them and talk about them and let's get the the CEO, let's go bang on the CEO on Twitter to tell him to tell the story better. So there's just all these amazing ways to create momentum. >> Yeah, I have seen that and I have seen that there is um a bit of a change even to you know listen there's still those investors that have or people that have they don't want to have anything to do with any of this, right? They just like just put my money just >> most people don't most people >> let my money do its thing. Meanwhile, by the way, this is a year 2025 where some of the concepts that weren't supposed to be happening like, you know, your emerging markets doing incredibly well. You talk about quantum, most of these don't have any business to speak of. >> Of course, >> you know, you talk about like the some of our best investments are our small modular reactors. Those companies, holy crap, those are out of control, >> right? And you're not going to hear about those on CNBC or Wall Street Journal or even on Twitter. Well, every single analyst, what they do is, "What's your best idea?" Meta. >> I mean, >> you don't get fired for saying that. And by the way, they're getting rid of analysts because you can do all this work on claws. >> Well, they should. I mean, analysts have been terrible for years. The economists have even have been even worse, but um it's it's something. But, you know, there's a lot of things that are changing. You know, one of the fascinating things about our current investment world right now is this merging and blurring of the lines between not only Silicon Valley, but also the investment world, corporate America and and the White House or the administration or the US government. you know, this is it seems to me, you know, we saw the Intel deal, the MP materials deal, um, you know, and and others. And what's fascinating to me is I was under the impression, wrongly so, cuz you know, I just I guess sometimes don't think through that it's only going to be a temporary issue, that state-owned enterprises is when a government takes a position to favor that particular company for some reason, whether it's domestically or internationally. And that was something that we were always really pissed off about. >> Yeah. you know, like a Kyle Bass guy hates China. Let's just get that on the table. It's just there's no question about that, right? Um, but one of the big things he talks about is the whole stateowned enterprise issue and how the you know how they they popped up the real estate markets and all this and they've done I don't know if we've come to the conclusion that you know what that's a good idea or we were so were we jealous about this or I I don't understand what's happening because it's been u embraced by investors that wow this is a great idea let's have the government own pieces of these companies. >> Well, you're overthinking it. Okay. I I like to think of people people as not that sophisticated. I think Trump is all about enrichment and we could argue all day about the politics, but I take the politics out and go like let's look at the history of the person. He tends to blow up. Uh he tends to brag, but he now has power. So what is you know in this case is he's easiest way for him to trade is not have in just to be a part of every startup. So think about what Silicon Valley did. They went, it used to be Wall Street that we were worried about, right? We had the We all hated, it was so much fun to hate Goldman Sachs and JP Morgan and Bank of America because they were kind of stupid, evil and stupid and mean, and charged exorbitant fees. And you knew they were the criminal in the room, but you you didn't expect them to blow up uh with leverage. You just didn't you just didn't know what to expect cuz they had such good businesses. Why do you need to cheat? >> Okay, so we hated the banks. But I long for the day, we are going to long for the days that Wall Street and Goldman Sachs were partners with the White House, right? Because we knew because with Goldman Sachs, we knew their deal. We'll take 2%. We'll we'll, you know, we're going to screw you. We're going to take our fees. The deal may or may not work, but we're just we're in for that. That's what we do. We char we come in with our suits and we pillillage you for our 2%. Some deals work, some deals won't, right? Transactionbased world. Along comes Silicon Valley. And these people are hedonists. They have so much money. They think they're smarter than everybody. And again, not all of them, but I'm saying this is Silicon Valley. And they have incredible wealth. And they also have different values like as libertarians or like the world could end. They don't care like if you think about Peter Tail like they everything's a game >> and so now they have taken over the White House. So Silicon Valley we have two things going on. We have Silicon Valley partnering with the White House, married to the White House, integrated with the White House and there's some good and bad with that. Yes, Trump is getting rich and yes, the Trump family has money now in every great startup. Trust me, from nuclear to infrastructure to space, they that family is going to have Putin-like wealth because they don't even have to do insider trading. They are literally in the seed and a rounds of every great energy and infrastructure and data company and and and Jensen hangs walking in there and cutting 50. It's it's just pillaging. It's not Wall Street pillaging. It's absolute enrichment of insiders at the White House. I don't know what to tell people. That's what's going on. You can I don't know what to do about it, but that's what's happening. At the second order of this is Wall Street missed ret like totally disregarded retail forever, right? They they treated him terribly when they had the power over him, the 20 minutes delayed news, and then they ignored Robin Hood and Coinbase and let Silicon Valley make all the money off the the re-imagining of of trading. But they're not going to let that happen this time. So, we have this incredible era where both Wall Street and Silicon Valley are booming together and in cahoots with the White House. So the Wall Street is embracing retail. If you think about Poly Market and and um Khi, they are very earlybacked. You know, um ICE just put $2 billion into Poly Market. They're not going to mix the next Robin Hood. And so Wall Street is much smarter this time and is embracing retail. They don't want to blow up retail. They realize retail is going to be 30, 40, 50% of trading volume. And then thirdly, you still have for the 90% that want to just invest. There's never been a better time to just lowcost dollar cost average invest into index funds or direct index. So there's something for everybody right now. If you want to be mad all the time, there's something for you. If you want to be out of the market, cash is earning 4%. You can go buy commodities and it's a bull market. If you want to um uh start a company, it's never been easier to start a company, but if you want to get mad, there are so many things that will get you mad right now and get you out of the market. And I think that's an important point, too. It's never been a better time to get invested or it's never been easier to get invested and it's never been harder to hold on to your investments because of all the news and misinformation and aggravation out there. So, so that's what's going on. That is truly what's going on. And um the people that love investing, the people that that love investing, it's a great time to be a degenerate because you can bet on trade on anything. >> You know, it's interesting because you make a really good point there that it's uh it's almost uh right to be involved. It's almost right not to be involved depending on who you are. Right. Yeah. uh and and and and and where we are right now, you know, we look at whether you want to look at the fundamentals or the technicals, you want to look at this or that, you want to be like you said, be mad and angry that we're getting ripped off by it was just Pelosi and a few of those guys. Now is everybody seems to be in it. But here's what I always say. I always say, you know, Howard, go play that slot machine over there. And you're like, why? I'm like, well, it's it's rigged. I'm not going to play the rigged slot machine, Howard. It's rigged in your favor. that that that slot machine pays out every single time that you go to it. And some people like, I'm not going to do that. I'm like, why not? Just go over there and put a quarter in, see what happens. Kind of where we are. >> Yeah. We're at this incredible moment and we're not going to be able to fix it, right? Like my kids 27 and 26, right? Like one's into investing, one's not into investing. Like you can't they're not all going to be into this language of investing that I've been harping on for the last 20 years. But it's ne it's only going to get easier to onboard and it's only going to get easier to make a bet or to make a trade or to speculate and it's only going to be more free time not less free time. Now this is barring war or some catastro catastrophic events. There's always some issue that I'm you know uh you know a swan out there that I can't predict. But overall, you need to focus on keeping distractions away. And the good news is this is all just, you know, you mind over matter, right? If you don't want to use the Twitter app, which I don't, and I love Twitter, it'll take you about three days to get rid of the habit. There's nothing on there that you're missing. And so you've it's up to us in a distraction-based world. It's up to our parents to teach the kids. It's, you know, we have to get people web 2 and and 0% interest rates and Zerb created a lot of bad habits, embedded a lot of bad habits, and then you have bad leadership on both sides and COVID and distrust. I don't know what fixes that. So instead of complaining about it, it's up to parents and young people to just take control. Stop blaming, stop being upset about the phone down. Like there's so much opportunity for people that just >> put in the work right now. >> And and you know what's interesting? It's also easier than ever. >> Do you remember Do you remember a time I mean we could talk about the stock market too, but I remember a time relatively recently that somebody said to me, uh, you know, I want to I want to start buying Bitcoin. I'm like, "Okay, it seems really hard." I'm like, "Oh, oh, well, okay." You know, this is before Coinbase and all that. I'm like, "Yeah, well, you got to do this. You gotta It's like the old days of Do you remember way back when when you wanted to like play poker online, you had to like send your money to some international place and it had to move over then this one and then if you ever want to take your money out, it was a whole process. That was like the initial Bitcoin cryptocurrency stuff, right? It was like really how do I do this? How do I get money?" But these days, stuff is so easy. They make it so easy. You just take a picture of a check on your phone and yeah, $10,000 lands in your account within a day. No, but like I said, never been easier, never been harder to stay invested. So, what people have to do is have a plan and they have to surround themselves with people that help them do the right things. Right? These are healthy habits. It's for long. It's, you know, there's all this talk about longevity. you and I, you know, I'm 60, so all I think about I don't think about longevity like the crazies are thinking about it, but I think about longevity like, hey, man, I there's enough information out there that am I supposed to be doing more weights than cardio? Like diet? Uh, so sorry, nutrition, weights, um um >> pickle ball. That's what I do. Pickable. >> Yeah. No, but I'm saying there's so many new real good ways to to get information and take control of your own life on your own. Um, and put that time back in your pocket both during the day and at longevity that it really is an empowering moment for people. And at the same time, if you're if you're caught up in the wrong products and in the wrong algorithm and the wrong, you know, state of mind, it's never been easier to get distracted and mad, right? And we see this all day, every day because that's what's selling clicks. And so, people need to take control of this free time that they were given and put their 10,000 hours. It's never been easier to put your 10,000 hours in to something, but it's also never been easier to waste 10,000 hours. So again, these are just freedoms that we've been handed to that we're not we're not really taking them as freedoms. And it's really I think it's up to me as a parent like our kids grew up so much faster, you know, uh even though there was no war because of the internet. And what we're learning is they grew up faster, but they also got off course. Uh, and if you don't step in, so these kids need mentoring, you know, and then co came along and these kids aren't getting mentoring at at at at really that university era between 19 2020 and 2023. They lost serious amount of time at a at a very key age. So, so, so this boomerang effect, and there's a lot of 25 to 35 year old kids that really need to still get mentored. And so, there's that little weirdness going on in the economy, too. And so, it, you know, there's it's not like it's all it's all bubbles and balloons. Um, there's a lot of trouble out there, but it wasn't like they had to go through trench warfare like World War I. >> Yeah. So it's like we've got to but you also can't be mean to these kids and say oh you didn't have to go to trench warfare they had co co was at a young age like that >> was their version digital trench warfare misinformation and like you know so they they got [ __ ] over >> and and parents have got to step back in here because you're not going to get it from the government and you're not going to get it from China and you're only going to open yourself up to misinformation. So, you really got to surround yourself with people and and mentors that and groups that really add value to your life. And you got to tune out more than you've ever had to tune out. >> There's a great saying that someone said to me is there's no such thing as information overload only filter failure. >> Oh, >> and so in a world where overload is not going to solve itself. You're only going to get more, more, more. You know, with AI, you have to have good filters. And you know, I don't know what to tell people. That's it. Like, you have to filter things. >> Well, then everybody every day is trying to make it so that your filtering isn't good. I mean, you look at the Instagram. I I never buy anything on Instagram, but you know what? >> Correct. That's what I'm saying. Like, it's no longer the product that they they originally shared with us. So, get rid of it. >> I tell you, I'll tell you a quick story. >> Uh, I had a I have a pickle ball elbow, tennis elbow that really got very severe. Very, very severe. Like problematic, not just your normal problematic. like I'm on the edge of do I I have one more thing to do and then I have to go to surgery. Um but meanwhile now all of a sudden everything on Instagram is curing your pickle ball elbow curing it >> and I found this one. I'm like all right I'll buy you know I bought this like 10ens unit that was this portable battery whatever and whatever it cost and whatever but uh it just came in a couple days ago. Uh but but point is that it it's they're very and they're very good at all that. Um let let me switch gears with you. I want to ask you something and ask this question. I'm going to give you mine and then I want to hear yours. Is there a trend or buzzword in finance that you think is totally overhyped? Mine is a maybe it's not a trend. I guess it's a trend at this point. It's a trend of open AI committing hundreds of billions of dollars over 10 years or so when they're losing billions annually and they have no idea what this company's really going to be in the future. And you're quite And so what's your >> that's my that's my overhyped issue that really is like a it's starting to piss me off and bother me. >> Again, if it's starting to piss you off and bother you, that's a signal that like you you are right, but you're also overthinking it. The it shouldn't piss you off. The the signal was early and it's already correcting itself. Google is probably the going to retain the throne, right? Mh. >> Um, I think people just need to understand one thing. Eventually in the stock market, you have to flip a switch and make money, right? Eventually, like especially when rates aren't zero. So eventually, OpenAI has to charge, right? Or has to sell ads. And if you charge for a product, your customer base that was a hundred million becomes two million or five million or maximum 10 million. you got this incredible product that that needs like vaping. Okay, but open AI isn't vaping. It's a beautiful re-imagining of how you consume information. It's a magic trick. And it's a beautiful magic trick for people that that that struggled with writing or reading um or comprehension, right? and and the 10 blue links that my son would stare at as a non-reader, you know, curious person, but as a non-reader, looking at 10 blue links on Google is not getting is not getting an answer. That's getting anxiety. >> Y >> So, so the magic trick for my son and people like him that can go to open eye and just get the answer they want whether it's true or not. Let's forgetting that argument. >> Um for a reasonable kid that can go read and get a wellthought through answer without clicking links. Genius. But here's where Open AI falls apart. And believe me, I know this because I talked to the team and and they're not. Let's give you the simplest example of where Open AI falls apart for me or why it becomes an advertising business. Let's look at Mark Cuban, one of the best entrepreneurs of our time. He has a product called Cost Plus Drugs, right? And he's the best entrepreneur. He knows what he's doing. He fight with anybody in the internet. He can take your heart. He can take the arrows in the back. He started companies. He's a billionaire. He can go spend the money. And his idea is [ __ ] [ __ ] these drug uh deliver the pharmace not the pharmaceutical but whatever the the the intermediate >> yeah the express grips and all those guys the PBMs. >> Okay. He goes screw those guys. I'm just going to mark it up 10%. >> Right. >> Right. >> And anything that's off patent is cost plus. Now he's got to go market that site. But what a better place to market that site than a supposedly a truthtelling AI product. Meaning if you're going to search, hey, where do I get this drug off patent? Shouldn't the first answer from a system that's supposedly, you know, curating the web for you cost plus drugs? Right. >> Right. >> But right there, not having cost plus drugs in any of those searches telling you where OpenAI is going to go. They're going to be in an adbased pay-to-play model. Yeah. And it's so so in that world, Google still wins. That's the way I'm playing that bet. Now, OpenA has a huge advantage. It's a great product. My son loves the UI. My do my wife likes the UI. So, you know, 20 year olds are using it and 80 year olds are using it. So, that's why it's being talked about every day. You you got a product that in two years 700 million people are using and a huge age disparity, right, across four generations, right? So that's why it's worth what it's worth. >> But but the real trick comes is how you monetize that because eventually you got to pay for all this. >> And so that's what's frustrating you. That's what's making everybody curious. The good news here is again you're right, I'm right. It doesn't matter who's right. what their true understanding of what you have to understand is we all win because this time the companies paying for it are paying for it with their cash right so Nvidia Oracle they have cash for now Facebook Google their money is good so Nvidia's someone's everybody's going to get paid the only people that may not get paid by this are the customers that open AAI may not be able to pay one day so it is a develop veloping problem, but it's only just starting to develop now because cash has been good so far, unlike 2000 1999 when Cisco's customers really couldn't pay after about two months >> when the bubble came crashing down. >> So, I think it's it's history's rhyming, but it's not exactly like the 1999 bubble. But I am a skeptical like you >> and I'm just avoiding AI other than, you know, Google. I will tell you that uh from a user standpoint now I use a couple different ones. I use actually the uh mobile >> cloud's great too. >> Cloud's great. I use the I use I use open You're probably not going to like this, but I I use Copilot um Microsoft's uh >> Of course you do. You're old. Look at you. >> Yeah. Well, of Well, I I if AOL had one, I'd use that one, right? So So uh but it was interesting. I was in Italy. I was in this town called Orvietto and I was in front of the Duomo and I'm like h man I wish I was I seriously this is not this has happened last week. I'm looking I'm going h I wonder what I wish I had a guy telling me what this I'm like wait a second. So I picked up my phone. I I put on the microphone. I said, "I am standing in front of the Duomo and Oviet blah blah blah blah blah. Tell me about the edifice. Tell me about how it was built. Tell me about what I'm looking at." It was unbelievable. >> It's unbelievable. A magic trick. It's >> we are talking about a magic trick and what I said stop worrying about. Yes, some there is going to be a crash from but again I think the crash will be eaten by different people this time, right? because the the the cash is in the system. >> Uh >> and and in 1999 that cash went to Porsches and infl like all this stupid stuff and and in the zer bubble we went to apps and all this stupid stuff. But right now, I I as much as I hate leadership around the world and how stupid it is, I'm I'm I'm feeling a self-correction coming from just tech from good spend like defense uh space um robotics. There's enough good investing going on combined with the stupid investing >> that I feel pretty optimistic. Now, it's up to you to not make to make stupid investments and the like we just talked about for the first hour, the easiest way to do that is to direct index or do you know dollar cost average. Um, but I also would say it's never been a better time to be a independent thinking uh stockpicking investor if you want to do it because there's just so much dispersion in the system because you can go do the work yourself from anywhere in the world. >> Yep. I want to close on one thing because you're a forwardthinking guy. I've known that since I've known you. How many years? 20ome years I've known you when we were we were both young at 40. um tokenization of stocks. I'm still having a little bit of a hard time wrapping my my my head around this maybe because I back to I'm an old guy supposedly. Um but is this something that you see as anything or um and you know what what is it that I need to be aware of? >> I'd say nothing. I'd say some things like are exciting like NFTTS are exciting to the people playing it because it's so interesting and it's so doable but the world doesn't need it quite yet right like buying a stock on Robin Hood you can't improve it for me right like unless you wanted to say oh Citadel if they wanted to come out and say Citadel sucks and we're embarrassed that we ever did business with Citadel and the only way to get around Citadel people is if we took tokenize like you know the amount of like heavy lifting Robin Hood would have to do to do that. Now, at the same time, Vlad's on TV every minute right now saying tokenization's everything, you know, God bless, but like he has a much longer term horizon than you need to have. And right now it ain't broke. But if you live in Europe systems, you know, tokenization makes a little more sense. or if you live in, you know, it's kind of like landlines versus, you know, uh, you know, I'm on Coronado and it's gross that like the most beautiful island on in the in in America and Navy has land, you know, power cables everywhere versus not. But so we live in a world where the landlines still pretty much work and you've got the the devil we know with Citadel, etc., and Goldman. And so I'm like not even thinking about tokenization. Now I have some tokenization investments because I own certain companies that are involved in that space, but my expectations are those are startups and they could take 10 years. And look at Stock Twits. I thought in 2007 and 2008 when I started it that real time was the only thing that mattered and because that because there was an AI and it was so new and turns out I it was the only thing that mattered but you had to have the one it was only Twitter like you had to have the one main network or you weren't real time right you needed scale >> and now stock twitch is relevant in a post realtime world and The key was just surviving. So I would say to people investing in tokenization, it's going to take longer than you think. So you better not run out of money. And for the average investor, disregard it. >> And if you really want to invest in tokenization, you can buy Coinbase on a dip or Robin Hood on a dip because that's what they say they're working on. >> But in terms of like getting distracted by it, absolutely not. I I don't feel like the government as bad as the S and I'm friends with a lot of securities attorneys and we talk about just what you just asked me uh all the time and the good securities will tell you that we really all we've done is gone from an SEC whatever the idiot's name was in charge um who was just kicking the can down the road and like being very like >> Gensler Gensler. >> Yeah, Gensler. He was very obscure and like it was terrible because he just didn't give you any signal or mixed signals and we've only gone to a thing that's like not giving you mixed signals but they haven't really green lit it much right. Yeah. >> And so I don't think tokenization has any real decisions there. I think the real thing is prediction markets. I think the greatest thing to come along in since Robin Hood is prediction markets. And I wish I could tell you I would have I was early into that thing, but I wasn't. I'm I'm an investor small amount personally in in poly markets, so I'm talking my book. But the the idea that my son who will never trade, and I don't want him to trade, I want him to do what he loves to do. Like why, you know, why learn a language you're not interested in? And you know, my son will say, "Dad, you're doing a great job. Why do I want to learn the market?" Yeah. So um in a world where you don't you can just index um in a world where my son can learn trading without thinking he's learning trading. So in a with with a prediction market the way I see the world going versus tokenization and and they do eventually merge in a prediction market I can bet on Tesla beating earnings. The hardest part about saying a stock's going to beat earnings is predicting the the direction of the stock. So, you have to get two things right. >> Right. >> In your prediction, the idea that I could unbundle that and let people learn that, you know, I love Tesla. I think optim I think they're going to ship a lot of [ __ ] cars this quarter and you know, and Elon's sandbagging. The fact that he can handicap it that way and just make a bet on Tesla beating is pretty cool. And so I think, you know, when options and futures came around in the 80s, you know, I still don't trade options and futures and I've been doing this forever because I don't really like the idea of time value of money and leverage. And so I've never traded options and I know they make sense for a sophisticated investor because you're tying up less capital, but I just don't do it. But in a world where prediction markets make sense to me on day one, that's exciting. And in a world where I've never Andrew, I'm telling you this is the signal here. >> I've never made a bet. I'm six years old. I think betting's stupid, but I think it can be fun. But I think it's stupid. I think DraftKings is stupid. I love the people. Appreciate all the work they've done. I don't think it's good for society, but I don't begrudge anybody. It's better than [ __ ] semi-automatic weapons in many ways and and bullets at Walmart. So, I don't want to get into that argument. But like, come on. parlays and like kids bedding and like everything's wrong with it. Okay, but God bless >> the idea that this can be broken out further and taught as a language and this and the secondary effects of of prediction markets is that news will be much more digestible and real where we won't have to go to Twitter for news. You'll just be able to go look at the stats. Um I think that's that's a huge secondary other order effect of prediction markets. So this again I call it the degenerate economy is just that's the theme that makes the most sense to me and it's the theme that is kids are going to have more time and what are they going to do with that time? They're not going to get their third gig and their fourth gig. They may start a little side hustle and they may have like a YouTube channel and they may do this and they they they become a middleman and make an honest living doing, you know, small business, but they need they're going to need to invest to keep up with inflation and prices, right? And so the sooner they learn to do that, the better. >> And and that's the world we're heading into. So, the more you can get your kids down this path of of investing and putting their money to work and making good decisions, um, the better. And I don't like the idea of doing that by betting on a sports game. I like the idea of that by getting in a group, doing the work, uh, and getting good at predictions and reading the markets. So, I I'm super bullish on that part of the world. But at the same time, I'm also very much rooting, as much as I hate the idea of Silicon Valley merging with the White House because I don't trust Silicon Valley. I mean, I don't trust the White House, but I definitely don't trust Silicon Valley. And as we've seen with Instagram and as we've seen with all these products that like are free, but they're not really free. >> Um, is um you can have both going on. Like I don't trust them, but I do like the idea of like the investments that they're making. I'm not saying I like the style and I'm not saying I think they're all going to work, but I like the idea of the government protecting me and investing in things that'll protect us, whether it's an like I want Israel's Iron Dome in America. >> Yeah. >> Yeah. >> I want it. I think it worked for Israel. I think if they're getting uh interbolistic missiles sent from Iran, the ocean means nothing. So the faster the faster we can put New York and San Francisco and Phoenix and big cities and protect people with a glo dome, I'm all for that. >> Yeah, I would agree. >> So So if Silicon Valley can pull that off with the White House, I'll put up with Peter Teal. >> I I hear you. No, I mean there is there is that that fine line though. We got to be careful about I mean I you know going back >> you can't have it all. We are at a high-risisk situation here. But I'm hoping that the smart people, >> right, are realizing by watching the drone attacks and by watching what happened in Israel and the hand-to-hand combat war and tunnel war that we're taking the lessons from that and are going to apply them to our borders. >> Perfect. >> Right. Because if if if borders mean nothing, then we better be able to protect ourselves from the sky. said well and uh we're going to close it on that. Howard Linden, always a pleasure having you on board. Make sure I have all the links to where people can find you, find your stuff and stock twits and all the good things out there that you have created and shepherded and uh not only that uh that you will continue to over your lifetime. Appreciate you. >> Thanks, Andrew. Great to see you. >> Thanks. >> And that's going to wrap it up for this episode of the Disciplined Investor podcast. Please stay tuned for next week. We have Oh, what do we have coming on? Emanuel Bl Ross Gerber in a couple of weeks. We have Danielle D. Martino Booth, the Fed insider going to talk to us about what's going on and maybe her prediction on who actually will be the Fed chair, the pick for the Fed chair and what does that mean? Talk to you soon. Go over to the discipline.com and uh see all that we have to offer, find out more about uh what we do for our clients, etc. And thank you for joining me this week, every week. I'll see you again next week. 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TDI Podcast: Profit on Predictions (#943)
Summary
Transcript
This episode is sponsored by Interactive Brokers. And if you're looking to trade gold, silver, platinum, palladium with low cost and global access. Well, Interactive Brokers, you could do that. You could trade spot metals, futures, and options on major exchanges, all from one powerful platform. Get efficient pricing, deep liquidity, and institutional-grade tools right at your fingertips. Whether you're hedging, investing, or diversifying, Interactive Brokers puts the world of metals in your hands. Interactive Brokers is a member of SIPC, and futures are not suitable for all investors. US gold trading is available only to legal residents of the United States, excluding residents of Arizona, Montana, New Hampshire, and Rhode Island. The best informed investors choose Interactive Brokers. Ready to get started? Visit interactivebrokers.com/medals and start trading smarter. >> The disciplined investor is all about you, your money, and the markets. Sit back and get ready for this edition of the disciplined investor podcast. This episode of The Disciplined Investor is sponsored by Horowits & Company. If you're looking for a portfolio manager, look no further. Horowits & Company. From seed through harvest, cultivating financial success. [Music] [Applause] >> Bank earnings are out and they're looking pretty good so far. China trade war. What does that really mean anyway? 10-year yield is tapping 4% and the markets showing another VR recovery. Our guest today, Howard Linden, social leverage and stock twits. All this and much more on episode number 943 of the Disciplined Investor podcast. [Music] Well, well, well. There is so much going on. And it seems that the more chaos that we get these days, the more the equity markets seem to rejoice. They love it. They, oh, we got so much things going on. We got big dips because this one says that, but then they turn around and they say something different. Wow. I'm back from a vacation quickly. Uh, just I got to tell you, every once in a while, you got to step back. You got to get out of your environment. You got to figure out where you want to go, what you want to do. It gives you a few moments to understand more about the world. Not only about the people, their customs, their religion, their way of being, how they see us, how we see them. You have to do it. I had some amazing times in some unbelievable countries looking around the world and looking from afar. I started thinking about what happened last Friday, not just a few days ago, one week before. And that was the day that well it seemed that President Trump got really pissed off and he say he's going to put 100% tariffs on China market caved in 3% on the NASDAQ. It it looked to me like just one thing was after the other looking for some kind of excuse something just to take out some of the extra frothiness. And one of the biggest risks that we have in a frothy market is flawed assumptions. And we're going to get to that. For those of you that don't know me, I'm Andrew Horowitz. I am the host of the Disciplined Investor podcast. I am the author of not only the book, but the audio book of the same name, The Disciplined Investor: Essential Strategies for Success. Uh, I've written a couple other books also. I've also am the co-host of DH Unplugged with John C. D'Vorak. We uh we launched a show on the evenings on a Tuesday each and every week. And the last couple of weeks we had some best of that were just hysterical. If you haven't had the chance to go look at that, I highly encourage you to do so. So, I was talking about the risks. I was talking about frothy market conditions. I was telling you about that in the kind of environment that we're in right now, it doesn't take a lot to get markets going one way or the other. The assumptions that we have that everything is going to be just fine or the facts that we look at, well, maybe maybe there's too much embedded in. But again, the biggest thing that I'm seeing right now is a frothy market is at risk when we have flawed assumptions. In the case that we're looking at right now, the belief that US and China have reached a trade deal and basically it was essentially in place. That's what everybody was thinking because we were told that we're great friends. We have a framework. Besson's going over to talk and there's a meeting coming up with X and President Trump. Everybody's friendly, loves each other. Kumbaya, what a wonderful world. And even though the rare earth situation and the port issues and the fact that we have all sort of terror, that doesn't matter. We're friendly, aren't we? Total horse crap. We're not friendly. We're adversaries. And now that officially President Trump said we are in a trade war, again, I don't know what that means, different than what we have right now. But the notion that a trade deal was in place was pretty much disproven with the recent threat that 100% tariffs are going to be imposed on Chinese imports as of November 1st, which was a direct response to China's rare earth export curbs. These are materials that we really need and why we saw such a significant amount of I guess we'd call it a boom in the rare earth material related stocks last week. Wow. And this year for that matter, up until Friday, not this Friday, but the week before, it seemed as though investors had no care at all about which companies they were quote throwing money into. throwing throwing money. The hard-earned money that we have that we spend our days toiling for that we gather from our jobs and things that we do whether it's a 9to-5 or a gig type deal. It doesn't matter. I'm going to throw some money in that. And every time I hear that that that that phrase throwing money at this or that investment to me it's a huge red flag because what it does is it it signals this lack of understanding about actually what the risks are. And what it does when I hear that it tells me that you are a short-term short-minded weak-handed investor. Doesn't mean you're dumb. I'm just talking about your investments, what you're doing, right? You're a weak-handed investor who's probably going to be quick to pull out if things don't go your way. And I don't know if this particular I'll go so far as calling it a careless pattern of investing will change but Friday surely seemed to spook a few investors when again these bold threats that were issued by President Trump against China were set to take place. Now when I heard that I was thinking okay well what what's the potential here because we have to analyze this right? A lot of times, President Trump will say things that he doesn't mean, which is not a good way of doing business, but okay, that is a way we need to understand about how he does do business. The date November 1st, why? Well, because it sets a few weeks into the future. Nothing's right now. That could be changed. There were four different possible outcomes that I noted once that happened. First, during that period of time, they're going to attempt a resolution of some sort. The second, they'll extend the deadline. The third, they'll pressure and successfully get China maybe to lift lift these export curbs on the rare earth materials. And four, somewhere between now and then, it'll be lost in the shuffle of other news. And probably because it was a Friday afternoon, all of this will be walked back before the opening of the future Sunday night into Monday of next week. And lo and behold, my favorite horse in that race was clearly number four. As soon as this happened, I said, you know, this seems like they're going to have to come in and walk this back. You see a 3% drop in the NASDAQ, 2% drop in the S&P on this on this news, right? which was the most likely. Again, number four, equity markets reacted very poorly to this announcement. And um what do we see? We did see that JD Vance, Vice President Vance said, you know, it's a negotiation tactic. Could you imagine if you were playing poker and you went all in and you were trying to pressure everybody around the table to believing that you had something and then you just say, you know, by the way, this that's a bluff. who says it's a negotiation tactic and why would the other side do anything about it? Therefore, it seems to me China is going to dig their heels in, which is what they did. By the way, the challenge you have right now with China is that their economy is in rough shape. President Xiing, like Trump, he's stubborn. I mean, really stubborn. These guys are stubborn as the day is long. And after months of economic pressure from the US, China, it's wounded. And what do they say about wounded animals? Could be the most dangerous. So now that even though we have heard time and time again that President Trump has said things like um you know, we have the upper hand or or we hold all the cards. I think we have to remember something very important here. those particular cars that we're holding all have been manufactured in China. And the threat from either side at this point due to the power players that we have that are that are creating these threats and these rules and these uh uh export curbs, tariffs, etc. They're going to each be met with substantial resistance. I don't think we're over yet with this whole China mess. If in fact they cave and they come to some kind of a deal, whichever that is, I don't know what that deal is going to be or mean, that's great. I'm all in favor of having a good trading relationship with China because we need China just as much as they need us. By the way, make no bones about that. And if you're in there talking about how no, that's not the case. really take a look at what's really going on around the world and how we need these countries whether it's Vietnam, China, Korea, uh, Indonesia, you look at um, uh, countries like Cambodia, these are countries and Latin America for that matter, a lot of countries there. We need these countries pretty badly. And at a time when our government remains in a shutdown and stocks continue to march ahead making new all-time highs and even though there's not much of a it doesn't seem like much progress making reaching a deal. I don't know. We'll see what happens. It's getting closer. It seems to me um there's some new problems that are going to arise here now. Even though a lot of the governmental workers are on furlow, meaning a lot are getting paid and some of the banks, some of the credit unions that work with government employees will continue paying them their amount due for some period of time. The threats that people will be fired is going to change that dynamic pretty pretty drastically. It's estimated that I think there was a piece last week by JP Morgan that those workers that are missing out on about 400 in totality, $400 million per day of compensation, people that are living on paycheck to paycheck that can't get paid on this. That's a problem. We're going to see this show up in retail sales. The suffering and pain, by the way, for people who can't buy certain foods and maybe kids that will be going without. It's pitiful and shameful. But the markets right now don't care because right now the drivers right now are what? Two things. AI, artificial intelligence, and rates. The Federal Reserve at the last meeting, they reduce rates, we know by 25 basis points, right? It was a stimulative measure. Now they're talking about no longer dealing with quantitative tightening. So ho wait ho wait a second. the quantitative tightening which was used as a mechanism to bring down the debt overall of our country from the ballooning amount the the unsustainable amount of debt that we put on over the last 15 years and in particularly the hockey stick that was added the the amount that went from two to four to eight trillion dollar plus plus or minus during co that's not even been reduced by anything reasonable. So pretty amazing what's going on right now with regard to all the things that nobody seems to care about. I don't expect maybe people need to care about this, but they're looking out further into the future. But if they're looking out further in the future, they're also discounting the fact that we have a debt problem that is going to be with us for the next I don't even know x amount of decades because we're doing nothing about it and we're unwilling to and our uh our government and all the people involved in this particular matter don't have the courage don't have the courage to do anything about it. It's really a shameful situation. All right, we're going to uh we're gonna move over and start talking about our guest. Before we do that, I want to talk about Interactive Brokers. Uh here's another question I think you should think about. Will the US consumer sentiment index exceed 56 in October 2025? At IBKR Forecast Trader, the yes was recently traded 40% and the no was at 58% which is pretty interesting. With Interactive Brokers forecast contracts, you can trade on future events like climate, the economy, or even politics. Pick yes or no, and if you're right, you earn a dollar. Now, forecast contracts are not suitable for all investors. Make your prediction. Go to ibkr.com/forcast and start predicting today. The last trading day for this contract is October 24th. Now, our guest coming up today, who do we got? Howard Linden. Love this guy. He's um he has decades of experience in both public and private market investing. He previously founded and managed the hedge fund Linden Capital. He's the current founder and general partner of the early stage venture capitalist uh capital firm social leverage as well as CEO at stock twits which is a leading platform for traders and investors and through social leverage he and his partners have made investments in companies like Robin Hood and Beehive Manscaped to name a few. He's the founder of Wall Street that was acquired by CBS many many many many years ago and throughout his career he's uh been a strong advocate for and helped drive the decentralization and democratization of investing. Let's bring him right on. And our guest today is Howard Linden. We talked a little bit about him. He's been on before. He's a great guy. Howard, how are you? >> I'm old. I'm 60. >> Yeah. Well, that makes me old. My last podcast could be my last podcast >> ever. >> I'm 60. Anything could go wrong. I have to pee really badly right now. >> Oh boy. >> So, let's let's do a catch up on Stock Twitch. I want to start off with that. Talk to me about the cash awards. >> Um cash awards are something that we did this year. We've got Stocktoberfest coming up. Cash tag awards were like our tribute to like the SPS of of of of retail investing and financial products. You know, last year we got we gave out the first uh lifetime achievement award to VA or you know product of the word to Vlad at at Robin Hood. You know, stock I think was at about 30 bucks. >> Um you know prediction markets were honestly not not a thing. At least people didn't think it was a thing and they've had a hell of a you know we my old my fund is was a seed investor in the company but just couldn't have predicted the year that they had but it it really cash awards more a celebration of like finit and the cash tag and and stock twits and and just retail investors like you and I >> right that's cool stuff >> you also brought on an Marie Gianoso who is the chief commercial officer Now, um, she was from Drone Racing League. >> Yeah. >> That is that Wait, wait, hold on. Is that Is that >> where I've seen this on TV where they're like >> buzzing around this >> track thing with crazy >> ups and downs and all? >> Yes, it is. She was early there helping build out the whole impossible project. And um you know stock is growing really fast and we needed a head of of business that understood crypto because crypto were like large sponsors of that. Some of the crypto companies were large sponsors. So she was referred to me um recruiting is like you know as a founder and an investor in lots of startups. We were basic our basic job is recruiting. We don't get to do the stuff we want. We have to find good people and which is you know unfortunately I didn't know that when I started out doing it cuz no one wants to recruit. It's it's it's it's a thankless hard relentless competitive uh endless uh search for talent. Um which is not what you start a company for, right? Like if they told you all the reasons you got to start a company and said by the way you won't be working on the stuff you want. You'll just be recruiting people and trying to sign them up for your mission. It's tough. But um >> but Ann came to me highly referred and uh we hit it off and she's doing a great job. >> Wow, that's great. And um this is her her job is what? To do what though? >> Well, Stock Twits still today is the you know like Twitter an advertising business, right? um we have subscribers but like 70% of our business is advertising and so you got to go you know sell ads and get partners and you know we from Poly Market down to the ETF companies they all are customers of ours and partners and and and uh rely on our email and our branding and our impressions around the web for for so you know it's a thankless ad business >> right right so she's handed the nano >> so it's going well though I mean people want information, the yearn for information, especially in this area where there's so many different things to choose from, right? I mean, it is it's it's, you know, trying to understand where to get quality information. I think that's the big thing that you guys do at Stock, which is that the cream rises to the top in terms of the we'll call them contributors. I guess it's the right word, right? >> Yeah. I I'll give you the simplest example and and and for your audience that knows a little bit about this, we went we you know, when I started I called this the economy we're in quickly. Andrew, the degenerate economy. And I don't say that to disparrage anybody, but we live at this incredible confluence of of, you know, of economics, politics, free time, the cloud, um, Door Dash, you know, Poly Market, DraftKings, Robin Hood, Coinbase, um, vaping that you give a kid 23, you know, the the Elvis in the room is not Elvis. The Elvis in the room is your iPhone and the cloud and the 23 hour and Netflix. The free time that was handed back to the first time a 5-year-old picks up a you um an iPad and puts on YouTube, the parent just got that's the parent the parents free time just started increasing and then that kid's free time is exponentially growing. You know, that's the angst in in society in general is like everybody's worried about jobs. And I'm like, guys, think about it. We can't go back. People are being handed 23 hours back in their day, right? And so this degenerate economy has evolved. But in 1999, in the very first goaround of the bull market of the internet boom, we lived in a world where you go to Yahoo Finance, Andrew, if you weren't a hedge fund guy and you didn't have Bloomberg. And we thought that was Nirvana and we were 20 minutes delayed quotes. Yeah. So, we were doomed. We just thought we were cool, but we were doomed. And sure enough, 20 the year 2000 came and went and the crash happened and we realized that 20 minutes is a lifetime if you're trading against other people. Right. >> Right. >> And then we had a bare market. And then along comes when nobody expected a Twitter. And when I saw Twitter, the only reason it made sense to me as a stock guy is because I was the Yahoo Finance idiot. And I was like, wait a minute, we just went from 20 minutes to real time. I think this is going to be an incredible, you know, exponential improvement for retail investors. But of course, everybody was skeptical and, you know, my thesis in 2007 was the president will end up saying something and the market will move and you won't have to wait to hear it from Bloomberg. Right. >> Right. >> So, so I was early but correct. Right. Mhm. >> And and now we so we had this real time boom with Robin Hood and Coinbase and and this incredible innovation happened and I I got it right and not because I'm a genius, just because I happened to understand the difference between 20 minutes delayed quotes and real time. Okay, so that was an exponential you had to be dumb not to make money off the real time economy. But then along came AI and the and the need by Twitter and Facebook to monetize and no one wants to pay for the product. So they have to sell ads. And so what happened is and this is why we have this new era developing which I call postreal time degenerate economy is the real time world is is not good anymore because Elon Musk and Mark Zuckerberg have their finger on the feed and we don't know if what the algo is going to serve us. So, real time became fake news and uh and slop of you don't know when you're reading that person's message based on when it's being delivered to you, even though you think you're seeing it in real time. So, we've now gone to what I call a post-realtime world. And in a post-realtime world, if you're on Twitter and think you're seeing stuff in real time, you're the sucker in the room. M >> and so so now we enter this post realtime world where you need to really pick the groups that you want to be involved with. You don't have to be on Twitter or Reddit or Discord or wherever you think you need to be anymore to catch real time news because real time news happens in the White House when Donald Trump eats a eats a burger and blurts out something to the people around him and then it becomes law or or a tweet and no one has that. There's 10 people in the world that have access to that and not even Elon. So, so you don't want to be in the real- time world unless you're a criminal or very close attached to Trump and and and so we now live in a world where you're better off getting the information one or two minutes later >> curated audience of people that you trust. >> And then as long as you're head of CNBC and Wall Street Journal and blah blah blah blah blah, there's still so much alpha to be had. So, we live in the most incredible time right now because there's a whole reshaping of what um news and information is happening and and this is going to be the most incredible time and I think we're seeing the very first steps of it in year 2025 because retail because the market's up but for the first time in a very long time investors are crushing it. They're destroying the indexes, right? They're in quantum computing and they're in space stocks and they're in defense stocks and they're in gold and the indexes are doing fine, but the kids that are on Stock Twits and the people that are in private groups and the people that understand we're in a postrealtime world and understand where where cleaner um slower information is coming from are killing it. They don't know why they're killing it. They probably think they're smart, but the point is they're just in the early stages of being in the right place in the timing of the markets. >> All right. >> Yeah. I I I but it's also scrub data. You know, the old days where you'd always be like, well, garbage in, garbage out, but also I was always fanatical about where is this data point coming from. >> Very good point. That's a that's a more professional term for what I'm saying. You're better off having scrub data 1 minute, 2 minutes after the fact, if that's what you mean. Y >> than being right there sipping from the fire hose. >> Right. Right. >> Because the fire hose is owned by Elon. Like unless you're a friend of Elon, there is no fire hose. >> Yeah. No, I I hear you. So okay when >> where we are today is there but but do you think that this is translating into a herd mentality where >> No because no one believes it because everybody's still playing last bull markets game fang and uh you got to be on Twitter and you got to be you know uh following what what's her name uh what the old s Nancy Pelosi. Oh yeah, you got to be following >> unusual whales. >> Yeah, the Yeah. No, no, there's there's I'm not saying it doesn't work. I'm just saying for someone serious about investing that is not an institution, this has never been a better time to be an investor because you don't have to invest in the next Uber. The next Uber is probably a small cap company that's been neglected by the indexes that you could go create that you can go do the work on using Claude to do all the financial research for you and deep research that a CFA used to be doing and then go to your group and say, "Guys, look at these 10 ideas." Like, let's just get in them and talk about them and let's get the the CEO, let's go bang on the CEO on Twitter to tell him to tell the story better. So there's just all these amazing ways to create momentum. >> Yeah, I have seen that and I have seen that there is um a bit of a change even to you know listen there's still those investors that have or people that have they don't want to have anything to do with any of this, right? They just like just put my money just >> most people don't most people >> let my money do its thing. Meanwhile, by the way, this is a year 2025 where some of the concepts that weren't supposed to be happening like, you know, your emerging markets doing incredibly well. You talk about quantum, most of these don't have any business to speak of. >> Of course, >> you know, you talk about like the some of our best investments are our small modular reactors. Those companies, holy crap, those are out of control, >> right? And you're not going to hear about those on CNBC or Wall Street Journal or even on Twitter. Well, every single analyst, what they do is, "What's your best idea?" Meta. >> I mean, >> you don't get fired for saying that. And by the way, they're getting rid of analysts because you can do all this work on claws. >> Well, they should. I mean, analysts have been terrible for years. The economists have even have been even worse, but um it's it's something. But, you know, there's a lot of things that are changing. You know, one of the fascinating things about our current investment world right now is this merging and blurring of the lines between not only Silicon Valley, but also the investment world, corporate America and and the White House or the administration or the US government. you know, this is it seems to me, you know, we saw the Intel deal, the MP materials deal, um, you know, and and others. And what's fascinating to me is I was under the impression, wrongly so, cuz you know, I just I guess sometimes don't think through that it's only going to be a temporary issue, that state-owned enterprises is when a government takes a position to favor that particular company for some reason, whether it's domestically or internationally. And that was something that we were always really pissed off about. >> Yeah. you know, like a Kyle Bass guy hates China. Let's just get that on the table. It's just there's no question about that, right? Um, but one of the big things he talks about is the whole stateowned enterprise issue and how the you know how they they popped up the real estate markets and all this and they've done I don't know if we've come to the conclusion that you know what that's a good idea or we were so were we jealous about this or I I don't understand what's happening because it's been u embraced by investors that wow this is a great idea let's have the government own pieces of these companies. >> Well, you're overthinking it. Okay. I I like to think of people people as not that sophisticated. I think Trump is all about enrichment and we could argue all day about the politics, but I take the politics out and go like let's look at the history of the person. He tends to blow up. Uh he tends to brag, but he now has power. So what is you know in this case is he's easiest way for him to trade is not have in just to be a part of every startup. So think about what Silicon Valley did. They went, it used to be Wall Street that we were worried about, right? We had the We all hated, it was so much fun to hate Goldman Sachs and JP Morgan and Bank of America because they were kind of stupid, evil and stupid and mean, and charged exorbitant fees. And you knew they were the criminal in the room, but you you didn't expect them to blow up uh with leverage. You just didn't you just didn't know what to expect cuz they had such good businesses. Why do you need to cheat? >> Okay, so we hated the banks. But I long for the day, we are going to long for the days that Wall Street and Goldman Sachs were partners with the White House, right? Because we knew because with Goldman Sachs, we knew their deal. We'll take 2%. We'll we'll, you know, we're going to screw you. We're going to take our fees. The deal may or may not work, but we're just we're in for that. That's what we do. We char we come in with our suits and we pillillage you for our 2%. Some deals work, some deals won't, right? Transactionbased world. Along comes Silicon Valley. And these people are hedonists. They have so much money. They think they're smarter than everybody. And again, not all of them, but I'm saying this is Silicon Valley. And they have incredible wealth. And they also have different values like as libertarians or like the world could end. They don't care like if you think about Peter Tail like they everything's a game >> and so now they have taken over the White House. So Silicon Valley we have two things going on. We have Silicon Valley partnering with the White House, married to the White House, integrated with the White House and there's some good and bad with that. Yes, Trump is getting rich and yes, the Trump family has money now in every great startup. Trust me, from nuclear to infrastructure to space, they that family is going to have Putin-like wealth because they don't even have to do insider trading. They are literally in the seed and a rounds of every great energy and infrastructure and data company and and and Jensen hangs walking in there and cutting 50. It's it's just pillaging. It's not Wall Street pillaging. It's absolute enrichment of insiders at the White House. I don't know what to tell people. That's what's going on. You can I don't know what to do about it, but that's what's happening. At the second order of this is Wall Street missed ret like totally disregarded retail forever, right? They they treated him terribly when they had the power over him, the 20 minutes delayed news, and then they ignored Robin Hood and Coinbase and let Silicon Valley make all the money off the the re-imagining of of trading. But they're not going to let that happen this time. So, we have this incredible era where both Wall Street and Silicon Valley are booming together and in cahoots with the White House. So the Wall Street is embracing retail. If you think about Poly Market and and um Khi, they are very earlybacked. You know, um ICE just put $2 billion into Poly Market. They're not going to mix the next Robin Hood. And so Wall Street is much smarter this time and is embracing retail. They don't want to blow up retail. They realize retail is going to be 30, 40, 50% of trading volume. And then thirdly, you still have for the 90% that want to just invest. There's never been a better time to just lowcost dollar cost average invest into index funds or direct index. So there's something for everybody right now. If you want to be mad all the time, there's something for you. If you want to be out of the market, cash is earning 4%. You can go buy commodities and it's a bull market. If you want to um uh start a company, it's never been easier to start a company, but if you want to get mad, there are so many things that will get you mad right now and get you out of the market. And I think that's an important point, too. It's never been a better time to get invested or it's never been easier to get invested and it's never been harder to hold on to your investments because of all the news and misinformation and aggravation out there. So, so that's what's going on. That is truly what's going on. And um the people that love investing, the people that that love investing, it's a great time to be a degenerate because you can bet on trade on anything. >> You know, it's interesting because you make a really good point there that it's uh it's almost uh right to be involved. It's almost right not to be involved depending on who you are. Right. Yeah. uh and and and and and where we are right now, you know, we look at whether you want to look at the fundamentals or the technicals, you want to look at this or that, you want to be like you said, be mad and angry that we're getting ripped off by it was just Pelosi and a few of those guys. Now is everybody seems to be in it. But here's what I always say. I always say, you know, Howard, go play that slot machine over there. And you're like, why? I'm like, well, it's it's rigged. I'm not going to play the rigged slot machine, Howard. It's rigged in your favor. that that that slot machine pays out every single time that you go to it. And some people like, I'm not going to do that. I'm like, why not? Just go over there and put a quarter in, see what happens. Kind of where we are. >> Yeah. We're at this incredible moment and we're not going to be able to fix it, right? Like my kids 27 and 26, right? Like one's into investing, one's not into investing. Like you can't they're not all going to be into this language of investing that I've been harping on for the last 20 years. But it's ne it's only going to get easier to onboard and it's only going to get easier to make a bet or to make a trade or to speculate and it's only going to be more free time not less free time. Now this is barring war or some catastro catastrophic events. There's always some issue that I'm you know uh you know a swan out there that I can't predict. But overall, you need to focus on keeping distractions away. And the good news is this is all just, you know, you mind over matter, right? If you don't want to use the Twitter app, which I don't, and I love Twitter, it'll take you about three days to get rid of the habit. There's nothing on there that you're missing. And so you've it's up to us in a distraction-based world. It's up to our parents to teach the kids. It's, you know, we have to get people web 2 and and 0% interest rates and Zerb created a lot of bad habits, embedded a lot of bad habits, and then you have bad leadership on both sides and COVID and distrust. I don't know what fixes that. So instead of complaining about it, it's up to parents and young people to just take control. Stop blaming, stop being upset about the phone down. Like there's so much opportunity for people that just >> put in the work right now. >> And and you know what's interesting? It's also easier than ever. >> Do you remember Do you remember a time I mean we could talk about the stock market too, but I remember a time relatively recently that somebody said to me, uh, you know, I want to I want to start buying Bitcoin. I'm like, "Okay, it seems really hard." I'm like, "Oh, oh, well, okay." You know, this is before Coinbase and all that. I'm like, "Yeah, well, you got to do this. You gotta It's like the old days of Do you remember way back when when you wanted to like play poker online, you had to like send your money to some international place and it had to move over then this one and then if you ever want to take your money out, it was a whole process. That was like the initial Bitcoin cryptocurrency stuff, right? It was like really how do I do this? How do I get money?" But these days, stuff is so easy. They make it so easy. You just take a picture of a check on your phone and yeah, $10,000 lands in your account within a day. No, but like I said, never been easier, never been harder to stay invested. So, what people have to do is have a plan and they have to surround themselves with people that help them do the right things. Right? These are healthy habits. It's for long. It's, you know, there's all this talk about longevity. you and I, you know, I'm 60, so all I think about I don't think about longevity like the crazies are thinking about it, but I think about longevity like, hey, man, I there's enough information out there that am I supposed to be doing more weights than cardio? Like diet? Uh, so sorry, nutrition, weights, um um >> pickle ball. That's what I do. Pickable. >> Yeah. No, but I'm saying there's so many new real good ways to to get information and take control of your own life on your own. Um, and put that time back in your pocket both during the day and at longevity that it really is an empowering moment for people. And at the same time, if you're if you're caught up in the wrong products and in the wrong algorithm and the wrong, you know, state of mind, it's never been easier to get distracted and mad, right? And we see this all day, every day because that's what's selling clicks. And so, people need to take control of this free time that they were given and put their 10,000 hours. It's never been easier to put your 10,000 hours in to something, but it's also never been easier to waste 10,000 hours. So again, these are just freedoms that we've been handed to that we're not we're not really taking them as freedoms. And it's really I think it's up to me as a parent like our kids grew up so much faster, you know, uh even though there was no war because of the internet. And what we're learning is they grew up faster, but they also got off course. Uh, and if you don't step in, so these kids need mentoring, you know, and then co came along and these kids aren't getting mentoring at at at at really that university era between 19 2020 and 2023. They lost serious amount of time at a at a very key age. So, so, so this boomerang effect, and there's a lot of 25 to 35 year old kids that really need to still get mentored. And so, there's that little weirdness going on in the economy, too. And so, it, you know, there's it's not like it's all it's all bubbles and balloons. Um, there's a lot of trouble out there, but it wasn't like they had to go through trench warfare like World War I. >> Yeah. So it's like we've got to but you also can't be mean to these kids and say oh you didn't have to go to trench warfare they had co co was at a young age like that >> was their version digital trench warfare misinformation and like you know so they they got [ __ ] over >> and and parents have got to step back in here because you're not going to get it from the government and you're not going to get it from China and you're only going to open yourself up to misinformation. So, you really got to surround yourself with people and and mentors that and groups that really add value to your life. And you got to tune out more than you've ever had to tune out. >> There's a great saying that someone said to me is there's no such thing as information overload only filter failure. >> Oh, >> and so in a world where overload is not going to solve itself. You're only going to get more, more, more. You know, with AI, you have to have good filters. And you know, I don't know what to tell people. That's it. Like, you have to filter things. >> Well, then everybody every day is trying to make it so that your filtering isn't good. I mean, you look at the Instagram. I I never buy anything on Instagram, but you know what? >> Correct. That's what I'm saying. Like, it's no longer the product that they they originally shared with us. So, get rid of it. >> I tell you, I'll tell you a quick story. >> Uh, I had a I have a pickle ball elbow, tennis elbow that really got very severe. Very, very severe. Like problematic, not just your normal problematic. like I'm on the edge of do I I have one more thing to do and then I have to go to surgery. Um but meanwhile now all of a sudden everything on Instagram is curing your pickle ball elbow curing it >> and I found this one. I'm like all right I'll buy you know I bought this like 10ens unit that was this portable battery whatever and whatever it cost and whatever but uh it just came in a couple days ago. Uh but but point is that it it's they're very and they're very good at all that. Um let let me switch gears with you. I want to ask you something and ask this question. I'm going to give you mine and then I want to hear yours. Is there a trend or buzzword in finance that you think is totally overhyped? Mine is a maybe it's not a trend. I guess it's a trend at this point. It's a trend of open AI committing hundreds of billions of dollars over 10 years or so when they're losing billions annually and they have no idea what this company's really going to be in the future. And you're quite And so what's your >> that's my that's my overhyped issue that really is like a it's starting to piss me off and bother me. >> Again, if it's starting to piss you off and bother you, that's a signal that like you you are right, but you're also overthinking it. The it shouldn't piss you off. The the signal was early and it's already correcting itself. Google is probably the going to retain the throne, right? Mh. >> Um, I think people just need to understand one thing. Eventually in the stock market, you have to flip a switch and make money, right? Eventually, like especially when rates aren't zero. So eventually, OpenAI has to charge, right? Or has to sell ads. And if you charge for a product, your customer base that was a hundred million becomes two million or five million or maximum 10 million. you got this incredible product that that needs like vaping. Okay, but open AI isn't vaping. It's a beautiful re-imagining of how you consume information. It's a magic trick. And it's a beautiful magic trick for people that that that struggled with writing or reading um or comprehension, right? and and the 10 blue links that my son would stare at as a non-reader, you know, curious person, but as a non-reader, looking at 10 blue links on Google is not getting is not getting an answer. That's getting anxiety. >> Y >> So, so the magic trick for my son and people like him that can go to open eye and just get the answer they want whether it's true or not. Let's forgetting that argument. >> Um for a reasonable kid that can go read and get a wellthought through answer without clicking links. Genius. But here's where Open AI falls apart. And believe me, I know this because I talked to the team and and they're not. Let's give you the simplest example of where Open AI falls apart for me or why it becomes an advertising business. Let's look at Mark Cuban, one of the best entrepreneurs of our time. He has a product called Cost Plus Drugs, right? And he's the best entrepreneur. He knows what he's doing. He fight with anybody in the internet. He can take your heart. He can take the arrows in the back. He started companies. He's a billionaire. He can go spend the money. And his idea is [ __ ] [ __ ] these drug uh deliver the pharmace not the pharmaceutical but whatever the the the intermediate >> yeah the express grips and all those guys the PBMs. >> Okay. He goes screw those guys. I'm just going to mark it up 10%. >> Right. >> Right. >> And anything that's off patent is cost plus. Now he's got to go market that site. But what a better place to market that site than a supposedly a truthtelling AI product. Meaning if you're going to search, hey, where do I get this drug off patent? Shouldn't the first answer from a system that's supposedly, you know, curating the web for you cost plus drugs? Right. >> Right. >> But right there, not having cost plus drugs in any of those searches telling you where OpenAI is going to go. They're going to be in an adbased pay-to-play model. Yeah. And it's so so in that world, Google still wins. That's the way I'm playing that bet. Now, OpenA has a huge advantage. It's a great product. My son loves the UI. My do my wife likes the UI. So, you know, 20 year olds are using it and 80 year olds are using it. So, that's why it's being talked about every day. You you got a product that in two years 700 million people are using and a huge age disparity, right, across four generations, right? So that's why it's worth what it's worth. >> But but the real trick comes is how you monetize that because eventually you got to pay for all this. >> And so that's what's frustrating you. That's what's making everybody curious. The good news here is again you're right, I'm right. It doesn't matter who's right. what their true understanding of what you have to understand is we all win because this time the companies paying for it are paying for it with their cash right so Nvidia Oracle they have cash for now Facebook Google their money is good so Nvidia's someone's everybody's going to get paid the only people that may not get paid by this are the customers that open AAI may not be able to pay one day so it is a develop veloping problem, but it's only just starting to develop now because cash has been good so far, unlike 2000 1999 when Cisco's customers really couldn't pay after about two months >> when the bubble came crashing down. >> So, I think it's it's history's rhyming, but it's not exactly like the 1999 bubble. But I am a skeptical like you >> and I'm just avoiding AI other than, you know, Google. I will tell you that uh from a user standpoint now I use a couple different ones. I use actually the uh mobile >> cloud's great too. >> Cloud's great. I use the I use I use open You're probably not going to like this, but I I use Copilot um Microsoft's uh >> Of course you do. You're old. Look at you. >> Yeah. Well, of Well, I I if AOL had one, I'd use that one, right? So So uh but it was interesting. I was in Italy. I was in this town called Orvietto and I was in front of the Duomo and I'm like h man I wish I was I seriously this is not this has happened last week. I'm looking I'm going h I wonder what I wish I had a guy telling me what this I'm like wait a second. So I picked up my phone. I I put on the microphone. I said, "I am standing in front of the Duomo and Oviet blah blah blah blah blah. Tell me about the edifice. Tell me about how it was built. Tell me about what I'm looking at." It was unbelievable. >> It's unbelievable. A magic trick. It's >> we are talking about a magic trick and what I said stop worrying about. Yes, some there is going to be a crash from but again I think the crash will be eaten by different people this time, right? because the the the cash is in the system. >> Uh >> and and in 1999 that cash went to Porsches and infl like all this stupid stuff and and in the zer bubble we went to apps and all this stupid stuff. But right now, I I as much as I hate leadership around the world and how stupid it is, I'm I'm I'm feeling a self-correction coming from just tech from good spend like defense uh space um robotics. There's enough good investing going on combined with the stupid investing >> that I feel pretty optimistic. Now, it's up to you to not make to make stupid investments and the like we just talked about for the first hour, the easiest way to do that is to direct index or do you know dollar cost average. Um, but I also would say it's never been a better time to be a independent thinking uh stockpicking investor if you want to do it because there's just so much dispersion in the system because you can go do the work yourself from anywhere in the world. >> Yep. I want to close on one thing because you're a forwardthinking guy. I've known that since I've known you. How many years? 20ome years I've known you when we were we were both young at 40. um tokenization of stocks. I'm still having a little bit of a hard time wrapping my my my head around this maybe because I back to I'm an old guy supposedly. Um but is this something that you see as anything or um and you know what what is it that I need to be aware of? >> I'd say nothing. I'd say some things like are exciting like NFTTS are exciting to the people playing it because it's so interesting and it's so doable but the world doesn't need it quite yet right like buying a stock on Robin Hood you can't improve it for me right like unless you wanted to say oh Citadel if they wanted to come out and say Citadel sucks and we're embarrassed that we ever did business with Citadel and the only way to get around Citadel people is if we took tokenize like you know the amount of like heavy lifting Robin Hood would have to do to do that. Now, at the same time, Vlad's on TV every minute right now saying tokenization's everything, you know, God bless, but like he has a much longer term horizon than you need to have. And right now it ain't broke. But if you live in Europe systems, you know, tokenization makes a little more sense. or if you live in, you know, it's kind of like landlines versus, you know, uh, you know, I'm on Coronado and it's gross that like the most beautiful island on in the in in America and Navy has land, you know, power cables everywhere versus not. But so we live in a world where the landlines still pretty much work and you've got the the devil we know with Citadel, etc., and Goldman. And so I'm like not even thinking about tokenization. Now I have some tokenization investments because I own certain companies that are involved in that space, but my expectations are those are startups and they could take 10 years. And look at Stock Twits. I thought in 2007 and 2008 when I started it that real time was the only thing that mattered and because that because there was an AI and it was so new and turns out I it was the only thing that mattered but you had to have the one it was only Twitter like you had to have the one main network or you weren't real time right you needed scale >> and now stock twitch is relevant in a post realtime world and The key was just surviving. So I would say to people investing in tokenization, it's going to take longer than you think. So you better not run out of money. And for the average investor, disregard it. >> And if you really want to invest in tokenization, you can buy Coinbase on a dip or Robin Hood on a dip because that's what they say they're working on. >> But in terms of like getting distracted by it, absolutely not. I I don't feel like the government as bad as the S and I'm friends with a lot of securities attorneys and we talk about just what you just asked me uh all the time and the good securities will tell you that we really all we've done is gone from an SEC whatever the idiot's name was in charge um who was just kicking the can down the road and like being very like >> Gensler Gensler. >> Yeah, Gensler. He was very obscure and like it was terrible because he just didn't give you any signal or mixed signals and we've only gone to a thing that's like not giving you mixed signals but they haven't really green lit it much right. Yeah. >> And so I don't think tokenization has any real decisions there. I think the real thing is prediction markets. I think the greatest thing to come along in since Robin Hood is prediction markets. And I wish I could tell you I would have I was early into that thing, but I wasn't. I'm I'm an investor small amount personally in in poly markets, so I'm talking my book. But the the idea that my son who will never trade, and I don't want him to trade, I want him to do what he loves to do. Like why, you know, why learn a language you're not interested in? And you know, my son will say, "Dad, you're doing a great job. Why do I want to learn the market?" Yeah. So um in a world where you don't you can just index um in a world where my son can learn trading without thinking he's learning trading. So in a with with a prediction market the way I see the world going versus tokenization and and they do eventually merge in a prediction market I can bet on Tesla beating earnings. The hardest part about saying a stock's going to beat earnings is predicting the the direction of the stock. So, you have to get two things right. >> Right. >> In your prediction, the idea that I could unbundle that and let people learn that, you know, I love Tesla. I think optim I think they're going to ship a lot of [ __ ] cars this quarter and you know, and Elon's sandbagging. The fact that he can handicap it that way and just make a bet on Tesla beating is pretty cool. And so I think, you know, when options and futures came around in the 80s, you know, I still don't trade options and futures and I've been doing this forever because I don't really like the idea of time value of money and leverage. And so I've never traded options and I know they make sense for a sophisticated investor because you're tying up less capital, but I just don't do it. But in a world where prediction markets make sense to me on day one, that's exciting. And in a world where I've never Andrew, I'm telling you this is the signal here. >> I've never made a bet. I'm six years old. I think betting's stupid, but I think it can be fun. But I think it's stupid. I think DraftKings is stupid. I love the people. Appreciate all the work they've done. I don't think it's good for society, but I don't begrudge anybody. It's better than [ __ ] semi-automatic weapons in many ways and and bullets at Walmart. So, I don't want to get into that argument. But like, come on. parlays and like kids bedding and like everything's wrong with it. Okay, but God bless >> the idea that this can be broken out further and taught as a language and this and the secondary effects of of prediction markets is that news will be much more digestible and real where we won't have to go to Twitter for news. You'll just be able to go look at the stats. Um I think that's that's a huge secondary other order effect of prediction markets. So this again I call it the degenerate economy is just that's the theme that makes the most sense to me and it's the theme that is kids are going to have more time and what are they going to do with that time? They're not going to get their third gig and their fourth gig. They may start a little side hustle and they may have like a YouTube channel and they may do this and they they they become a middleman and make an honest living doing, you know, small business, but they need they're going to need to invest to keep up with inflation and prices, right? And so the sooner they learn to do that, the better. >> And and that's the world we're heading into. So, the more you can get your kids down this path of of investing and putting their money to work and making good decisions, um, the better. And I don't like the idea of doing that by betting on a sports game. I like the idea of that by getting in a group, doing the work, uh, and getting good at predictions and reading the markets. So, I I'm super bullish on that part of the world. But at the same time, I'm also very much rooting, as much as I hate the idea of Silicon Valley merging with the White House because I don't trust Silicon Valley. I mean, I don't trust the White House, but I definitely don't trust Silicon Valley. And as we've seen with Instagram and as we've seen with all these products that like are free, but they're not really free. >> Um, is um you can have both going on. Like I don't trust them, but I do like the idea of like the investments that they're making. I'm not saying I like the style and I'm not saying I think they're all going to work, but I like the idea of the government protecting me and investing in things that'll protect us, whether it's an like I want Israel's Iron Dome in America. >> Yeah. >> Yeah. >> I want it. I think it worked for Israel. I think if they're getting uh interbolistic missiles sent from Iran, the ocean means nothing. So the faster the faster we can put New York and San Francisco and Phoenix and big cities and protect people with a glo dome, I'm all for that. >> Yeah, I would agree. >> So So if Silicon Valley can pull that off with the White House, I'll put up with Peter Teal. >> I I hear you. No, I mean there is there is that that fine line though. We got to be careful about I mean I you know going back >> you can't have it all. We are at a high-risisk situation here. But I'm hoping that the smart people, >> right, are realizing by watching the drone attacks and by watching what happened in Israel and the hand-to-hand combat war and tunnel war that we're taking the lessons from that and are going to apply them to our borders. >> Perfect. >> Right. Because if if if borders mean nothing, then we better be able to protect ourselves from the sky. said well and uh we're going to close it on that. Howard Linden, always a pleasure having you on board. Make sure I have all the links to where people can find you, find your stuff and stock twits and all the good things out there that you have created and shepherded and uh not only that uh that you will continue to over your lifetime. Appreciate you. >> Thanks, Andrew. Great to see you. >> Thanks. >> And that's going to wrap it up for this episode of the Disciplined Investor podcast. Please stay tuned for next week. We have Oh, what do we have coming on? Emanuel Bl Ross Gerber in a couple of weeks. We have Danielle D. Martino Booth, the Fed insider going to talk to us about what's going on and maybe her prediction on who actually will be the Fed chair, the pick for the Fed chair and what does that mean? Talk to you soon. Go over to the discipline.com and uh see all that we have to offer, find out more about uh what we do for our clients, etc. And thank you for joining me this week, every week. I'll see you again next week. 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