My number one bullet point is you're going to make your money by writing a trend for the very very longest time. Or you can be like Warren Buffett. You can be one of those value investors who won't spend a nickel. And I used to just sit there and rail on Warren Buffett year after year after year. And he just happened to be in the right place at the right time and caught this bull market. I was just thinking, "Oh my god, why couldn't I be Warren Buffett? just believe in America and just went you're down 50% who cares cuz America's going to bring you through. Warren, if you happen to hear this, I'm deeply apologetic. You are the OG of compound interest. There was something that we talked about when we last met that made me laugh and I thought it'd be a fun place to begin our conversation today and it was about the difference between being an investor and being a trader and you mentioned something basically saying you wished you could be an investor. Life would be so easy. I'd love you to describe the difference between the two and the life of a trader. >> I promise I'll do that. and we'll talk about markets and AI and everything and at the end >> I'll say were you not entertained and I bet you'll say yes but of all the things that you do on your podcast the one that I think is the most important if you don't mind I'd love to start with that one which is that question you ask everyone at the end >> I'm in I love it >> and the reason why is because um it's so funny I gave this commencement address one time to what is now Roads College in Memphis. I remember when I was writing it, I was in there thinking, damn, who gave my commencement address? And I couldn't remember. It was funny. No one remembers. Can you remember who gave your commencement? You're so young. You might. >> It was the president of Ireland at the time. I went to Notre Dame. So, >> and you're Irish, right? Okay. But it was so funny because no one remembers who gave their commencement address because and I was sitting there thinking, "God, I'm getting ready to do this for 15 or 20 minutes and no one's going to remember a damn thing. How do I make it special?" Uh, and so on this podcast, I'm assuming people listen to millions of podcasts and they probably can't really remember, but fractions of them. So if there's anything they remember from this, I hope I hope it's this part. >> All right. So, everyone that listens knows that the question is, what is the kindest thing that anyone's ever done for you? >> It's such a great question because the kindest thing was also my very, very, very first childhood memory. I was probably two and a half or three. It was probably 1957, something like that. And I was with my mother at this place called the Curb Market. And uh I got separated from my mother. And boy, you can imagine being 2 and 1/2 years old and separated from your mother. You just it's it's you're terror stricken. And this elderly black gentleman came up and I was sitting there balling my eyes out cuz I thought my mother had left me and said, "What's the matter, little boy?" And I said, "I lost my mama." And he said, "Here, don't you worry. we're going to find her. And he grabbed my hand and we started walking up and down the aisles. It was a outdoor vegetable market. Uh, and I can gosh, I can almost still smell >> fruits and vegetables. We come around the corner finally and I see my mother and I was so happy and my mother saw me and at first she just started laughing and I remember her, she was laughing so hard. So she comes and she gets me and she says to that man, she tries to give him $5, which was in 1957, a huge amount of money. And he said, "No, ma'am. I know you'd do that for my child, too." And it was such a simple act of kindness, but it was so profound to me at the time. So that night, I had a prayer list with my mother that she used to go through with me every night. So it be God bless Mama, daddy, Peter, Paul, Alberta, Grande, Pete, and Judy Lyn, and Sid. And then we added my mother. I said, "What was that man's name?" She goes, "I never got his name." For the next 10 to 12 years, right in that prayer list would be that man. So probably four or 5,000 reps. >> Wow. >> Every night for that man. Now, fast forward to 19 86. I'm living in New York City and I'm lying on my couch, 32 years old, and I'm watching 60 Minutes, and Harry Reer is interviewing this guy, Eugene Lang. And Eugene Lang was a businessman who had gone back to give the commencement address to his elementary school up in Harlem which over the course of the intervening 60 years had completely transformed from a gentrified area into a African-American Hispanic community with almost a population entirely consisting of people of color. And Jean asked the principal, "How many of these kids, these 12 year olds are going to go to college?" The guy said, "M statistically, maybe I don't know, eight or nine%, something like that." He could not believe that because obviously he had graduated from that school, gone on to college, and then done very well. So right there on the spot, he decided, I'm going to promise every one of those kids, if they graduate from high school, I'll put them through college. And that resonated with me so much and he adopted that class and he created something called the I have a dream program. I said I can do that. I can do that. And the next day I called him up and he said, "You know, it's funny. Three or four other uh people have called me and we're all meeting at my apartment on Tuesday night. I got there late and I I was seeing myself up in Harlem or somewhere on the lower east side Manhattan. I got Bedstey, the highest crime crimeridden community in New York at that time, even higher than the Bronx. And that began this journey. I put my heart and soul into it. I spent about I'd go over there every Tuesday. I went to the commencement address of this elementary school, did the same thing that he did, told them that they graduate from high school, put them through college. Of course, everybody was jubilant, right? It was a big surprise that parents were so happy. That began this big journey for really the next 14 years because I kept adopting success in classes. I had tremendous passion. We were doing after school programs. We're playing sports, teaching life skills. About 3 years in, I realized these kids aren't doing that great now. They'd gone on to different junior highs. They're not doing that great. So, I started hiring some tutors. figured that out. And then probably four years in, I've had one kid who got killed. I had a a bunch of girls become teenage moms. So now all of a sudden, I'm dealing not just with the academic challenges, but also with the social challenges to boot, of which there are many. Along the way, I learned so much by failing. I learned so much about what it takes to actually beat poverty. And by the way, 1987, the year after that was when Robin Hood started. And then that informed me through certainly was extraordinarily instructive. And as we built Robin Hood out and began applying metrics and making sure we had goals and standards and a variety of things, it also led me ultimately to start one of the first charter schools in the late ' 90s in Bedstey right next to that spot. Actually, I started a charter school called the Bedstey Charter School of Excellence. The first one started out as an all boy school. We named it excellence because I wanted these boys to know that we were going to demand excellence of them. And we completely totally crushed it. We had hired the absolutely dream team of educators to do it. And within about four or five years, we were number one out of 543 elementary schools in New York City. The point being that you can have all the passion in the world, but you have to have a plan. There has to be a great pedagogy in what it is that you're trying to do when educating a kid. Why is all this relevant? Well, just think about this. So, here was this one simple act of kindness of this elderly man helping this young child. In that case, a black man helping this young white boy. And so when I saw Harry Reezner and I saw that elderly man helping those young kids, it was the photo negative of what had happened to me and I thought, "Wow, it just was instinctive." The point here is that one simple act of kindness can have waves of betterment. It can be so transformative and so multiplicative. There's no doubt in my mind that 4,000 reps of thanking that elderly man to help me as a child inspired me when I saw Harry Rezner interviewing Jean Lang to emulate that in a sense. I keep thinking how instructive it would be if intentionally we just all start every day with a goal of one simple act of kindness. It doesn't have to be anything big. It can be as something as small as what happened to me when I was three. And look at the possibilities that come from it. Just imagine if 350 million Americans intentionally sat out every day for one simple act of kindness. What I will say, particularly the young people that might be listening to this, I'll tell you before 2000, I would say 2000 was kind of the turning point. all this demonization and criticism and and the attack mode that we seem to be in this, it didn't exist. It's not the way, by the way, that this generation that's perpetrating it and promoting it was raised. It's not the way we were raised. It's not the way of the 70s, 80s, 90s, you didn't have these vitriolic attacks. >> There was a much higher level of civility and respect. And I think down the road we'll get back to it. Um but so I would just say to young people, you don't have to accept today as what this country historically has been about because it wasn't that way uh when I grow up. C certainly grew up. It certainly wasn't that way and it's not going to be that way in the future. >> Most software companies try to maximize your time on their app to juice engagement. Ramp does the exact opposite. RAMP understands that no one wants to spend hours filing expense reports, reviewing expense reports, and checking for policy violations. So, they built their tools to give that time back using AI to automate 85% of expense reviews with 99% accuracy. And since RAMP saves companies 5%, it's no wonder that Shopify runs on RAM, Stripe runs on RAM, and my business does, too. To see what happens when you eliminate the busy work, check out ramp.com/invest. OpenAI, Cursor, Enthropic, Perplexity, and Verscell all have something in common. They all use Work OS. And here's why. 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Felix works the way your team already does, delivering work quickly and accurately around the clock. Learn more at rogo.ai/felix. >> Absolutely incredible story. Maybe my favorite version of this answer that I've ever had. First time I've ever done at the beginning of the episode, which makes it fun, too. What was your message in the commencement speech that you ultimately gave? What did you decide was the message to leave them with? So I got up there and I looked on the the deis and I said, "How many of you there's like 20 people over 50 or 60. How many of you remember your college commencement address?" None of them. Not one of them could remember. I love to hunt and fish. So I go through and I talk about just kind of the the normal challenges they're going to face in life. And uh and I also talked about how going through this process, I wanted to make sure I was going to say something that was memorable. So right there at the end, I said, "So whatever you do," and I pulled out my bow and and I knocked an arrow. I said, "So whatever you do, aim high and shoot straight." When I when I went like this, the whole crowd goes, "Woo! Aim high and shoot straight." And I had an apple on a table over here and smashed it. >> Knocked it. >> Yeah. >> So, I don't know whether they still remember or not, but I know when everybody was ducking, I thought, "Oh, they're going to remember that." I told the president of university, I said, "Listen, you don't have to tackle me or anything like that." Okay? This is part of it. I'm just trying to, you know, trying to let these people have a night that they they'll remember for some time. And it's an excuse for me to ask my other question about this difference between investing and trading. So I'd love you to explain the life of a trader in contrast to that of an investor. >> If I just think about when I started, I started in 1976. Inflation was raging. I started on the floor of uh the commodity pits. Stuff was literally going up and doubling and cutting in half every year. The volatility was insane. To give you an example of how crazy things got, Bunker Hunt was squeezing silver at the time and he bought about 200 million ounces at an average price of about three 12 bucks. And between 1976 and 1980, we had crazy monetary policy. Inflation started ripping and silver went literally through the roof. Ultimately, I started out in the floor of the cot exchange. I bought a membership on COMX, which was the metals exchange at that time. I got in the pit and was executing some orders for them sometimes along the way. And the bottom line was it was just this the most amazing bull run. And I want to say by like 79, silver was around 30 bucks an ounce. And all of a sudden he was worth about five or six billion which made him worth three times the next closest person in the world. Bunker says, "Well, I think I think this silver here is the most valuable asset and resource on earth." Someone asked him, "What are you going to do with all that silver?" And he goes, "I'm going to bury it. I'm going to bury it. In fact, what I'm going to do is I'm going to buy 20 million more ounces and I'm going to bury that, too." So he buys 20 million ounces at 35 bucks. And when that happened, it just it just roofed, right? Well, it goes to 50 bucks. So at 50 bucks now, he's worth about 11 billion and he's got a multiple of five or six on the next closest guy. I just couldn't even believe what I'd seen and how much money that this guy had made. Anyway, so that was when COMX decided the commercials had been just eradicated because they're sitting there holding physicals and having to put up this margin every day and their bankers going, "Yeah, I can't do it." So anyway, they made liquidation only. Silver collapsed. It went from 50 bucks to under 10 bucks in the space of about eight weeks. And that had a searing impact on me to see him go from the richest guy to virtually bankrupt in the short space of six or seven weeks. Right then and there, I would never own anything for the or trust anything for the rest of my life. You know, again, my my grandfather when I was when I was really young said, "Son, you're only worth what you can write a check for tomorrow." That also had a a really deep impression on me. Um, so liquidity has always been something that's been it was in my DNA as a child because that was my grandfather's favorite saying all the time. And then also just my early trading days cuz my early trading days had $10,000 account. I'd run that thing to a hundred, run it back down to zero. And also living in my early 20s, um I had this friend, he's such a character, he could take 2500 bucks or five grand and run it to 2 million. Of course, the market moves in were crazy like no one I'd ever seen. We were brokers at that time at EF Hutton. And we called him a mortician cuz he'd get an account with 10,000, churn about $100,000 commissions, take it to a million bucks, and then have it in deficit. So you learned that liquidity was really important because the volatility was so huge and we're all living on the edge. But so that had a real impact on me. The idea of owning something for the long run was laughable because look how much money you could make by trading in the short run because uh the volatility profile was off the chart. One of my mentors who got me into trading was teaching a class on investments in Virginia and asked me to come be a guest lecturer and I started in ' 82 and I've been doing it every semester since. I remember one of my favorite stories to tell that class is I would go through how all the greatest fortunes in the world were made. I'd always ask him who's the richest guy in the world and back then it was Bill Gates and Warren Buffett. How did they get there? And my point to them would be they got there by writing a trend for the long run. And that would be my big lesson to them. I'd always have two or three bullet points. My number one bullet point is you're going to make your money by writing a trend for the very very longest time. I said there are many different ways to achieve it. You can own a company like Bill Gates or Steve Jobs, whatever. Or you can be like Warren Buffett. You can be one of those value investors who won't spend a nickel. And I used to just sit there and rail on Warren Buffett year after year after year. And I would self- congratulate myself for trashing because goes, you know, he just happened to be in the right place at the right time and caught this bull market. If that guy had been in Japan, forget it. Never would have happened. If it started 1989 in the Nikki, forget it. It never would have happened. Different story. Right place, right time. Bull market genius. >> Oh yeah. I guess this will be my my 50th year. And the difference between my trading and investing is I just take uh our fund which uh BBI fund for 40 years it has a minus.12 correlation with the S&P 500. So you can see the difference between investing and trading. So 100% of our returns are alpha 100%. And and I was just thinking, "Oh my god, why couldn't I be Warren Buffett? Just believe in America." And just went, "When you're down 50%, who cares? Cuz America's going to bring you through." and you just get and not that he doesn't he works as hard as any human being but it's that belief system that's so fantastic as opposed to I feel like I'm like a right guard >> and I've been but a right guard in the NFL for 50 years where I'm just every day just fighting in the freaking trenches every day and every time someone says to me gee I want to go into trading I said go along short go on the equity side go do And I just I've always envied that belief system. It's such a great belief system and it's worked so well for so long. But I would have huge difficulty uh to have been in Warren's shoes in 2008 9 have a 50% draw down. It would have it would have had uh a really material impact on me. I don't think I have his calm and patience and fortitude to to be able to do what he does. And so anyway, I was listening to the Acquired podcast on Birkshire Hathway and for the first time I learned that at 9 years old, 9 years old, he understood the power of compound interest. And actually when I listened to that podcast, I just went, "Oh my god, this guy is a genius and I have been the biggest fool." I've always wanted to write a a book called What I Realize Now, which will go through the successive mistakes of beliefs that I've had my lifetime. What I realize now is what an idiot I was. That guy is a flipping genius cuz he understood the power of compound interest which I somehow managed brilliantly to avoid my entire career. He understood it at nine. He went out 17 went to Colombia and sought out Benjamin Graham. What a genius. >> Now the great thing from that podcast is that he was also so smart that he partnered with Charlie Mer. Charlie was clearly clearly um a tremendous genius in his own right because whereas Warren would buy 50 cent dollars, right? Charlie understood the power of compounding for companies that were growing all the time. And I think the two of them together, man, what a combination. But anyway, if Warren, if you happen to hear this, I'm deeply apologetic. You are the OG of compound interest and I wish I was onetenth as as smart as you are. >> Didn't you didn't you talk to him about what he thought about AI soon thereafter when we first talked about what was that conversation like? >> You cannot be a trader investor whatever term we use and not be a really good risk manager. Anyone that's really succeeded investing or trading is first and foremost a great risk manager. I went to uh this this conference about 18 months ago and I just was so alarmed by what I heard and then I mentioned on CNBC and he watches CNBC every day and sent me a note and said I agree with you 100% but the genie's out of the bottle. I don't know if we can get it back in. I think he's completely on board with the belief that we have some real threats from AI. The problem with AI is that the the news I I don't like in the last 12 hours the the news that keeps coming out is just more disturbing. The biggest problem with AI is that if you think about the the way AI is being deployed, practiced and deployed right now is the it's the build break iterate model. Build it, break it, fix it and iterate. If you think about it, that's been the invention model since the beginning of man. Build, break, iterate. But we've never been in a situation where the tail event >> the break can do so much damage >> could could be hundreds of millions if not billions of lives. What's so scary when I was at this conference which is only about 35 or 40 people with one modeler from the four biggest model companies and when I was able to ask them pointedly how do you think that AI safety gets resolved the pretty much the consensus answer is I think we'll finally do something about it when 50 or 100 million people die in an accident. I mean it's crazy. My big problems with AI are that one, there's no plebicide on this. There's no vote. There's no way for the public to say yay or nay on the pace at which we're going. And that's the way that most innovation occurs. Again, this one has a tail event on it that's so large. I go back to when the nuclear bomb was dropped 18 months later. our Congress and our uh administration was smart enough and forward thinking to create the Atomic Energy Commission to begin to try to regulate something that had huge tales. Here we are, we're three years in and regulate, what are you talking about? If there ever was a leadership position that needs to be taken by any any uh president, it's on AI regulation right now, not just the United States, but convening with China, with all the other our pre purveyors are to make sure that we don't do something that has catastrophic consequences. And that's just on the safety side, not even what's going to happen to social disruption. Matt Schumer came out with a very lengthy essay on how the two new models that were released six days ago >> are going to be so unbelievably d disruptive to the workforce. So you just the news in my mind keeps getting more alarming. If this was I can tell you if this was anything to do uh inside tutor which this thing would have been so contained so long ago. I mean that's what a good risk manager does and yet there's zero risk management here. >> Your point about great investors and traders are great risk managers in the face of AI. How do you think about this exogenous variable lurking? >> The one thing that I think should be part of this next election the simplest most important thing that we can do is we can demand that all AI is watermarked. That's the single most transformative thing that we could possibly do for the country, for the world. Make it a felony if someone knowingly violates that three times and put them in jail. I want to know what's authentically human and what's not. And when that happens, talk about restoring trust in the country, which I think is one of the biggest problems. I would say two times since this year began, I've had very serious people call and say, "Did you see XYZ?" >> And of course, it turned out to be a deep fake. I think just so we can get back to some some truth and honor and normal discourse. I think we've got to do that. The and the reason why it's so important is if I go back to that conference 18 months ago, I would say a significant portion of the scientists there envision a future where humanity is going to have a chip in our brain that's going to allow us to access so much knowledge, power, etc. So, I'm just kind of looking down the road and thinking, okay, we really need to know what we're reading, what we're looking at, because again, that group without having any feedback from the rest of America thinks that a blended human with a machine is perfectly acceptable, is the future, should have inalienable rights. For me, I I don't think that's the case. I'd vote no. I think most humans would vote no. >> So, coming back to some of these themes of investor versus trader, risk management, etc., I know you learned a lot from this guy, Eli Tullis. And I I love these lessons that were formative for you for what became, you know, the trading legend that that you now are. What did he teach you? And was there any specific episode from your time with him that taught you the biggest or most important lesson? >> God, he was so strong. He was really good at executing at the maximum apogee fear as well as uh greed. He was so good at smelling that because he traded hardly anything but cotton. He would just sit there and he would just focus and he could just he was just so good at waiting for exactly when there was just too much elation or when there was too much fear. And so that was really helpful. And then I would say the number one thing I learned from him was uh oh we were so long cotton one weekend and uh there was a great drought, spectacular drought and of course it rained all through the belt over the weekend. Walk in market was limit down. He'd gotten absolutely smashed. I thought, "Oh my god, it's over." That day for lunch, his wife brought in four of her friends. He had the most beautiful office I've ever seen in my life. And he came out and just, oh my god, he had a smile on his face. Oh, ladies and flirting with the wives. I mean, I was in sitting there going, "Are you kidding me? This guy's just broke and he's acting like uh he's Rock Hudson or something." Wow. Boy, I tell you what, I'll never forget that one to this day. When the going gets tough, the tough get going. And you wear it here and you have that confidence you're going to come back. Hugely important. >> Feels like the right time to ask you just what trading means to you. You've said before that the whole world is just this interconnected series of capital flows and part of the job is being on top of that and taking positions based on what's going on in the world. But mostly I interview investors who buy stakes in companies. I very rarely interview someone that is moving and putting on major positions in any sort of asset class or or trading instrument. And so I would love to just hear you describe like what to you trading is like what is the literal act that you are doing every day with such excellence for decades. >> There's a couple of metaphors that come to mind. Well, let's start with boxing because you have an opponent. In this case, it's the market. You know, you're going into uh the ring with this opponent who's after you the whole time. And I'm thinking more of a classic one as opposed to a Mike Tyson one. But you're kind of pairing, jabbing, feeling each other out, looking for an opening. And then every now and then you'll have a great opening and you take a big shot and you may land one. If I think about big shots, just Bitcoin 2020, a knockout. Two-year rates 2022 knockout. You have these incredible opportunities at times if you just sit and wait the whole time in the interim. Some of it you're just gathering information looking for those openings. You're always trying to make progress. You're always trying to win the round, but there'll be those few opportunities where you can do something really material. >> I love the boxing analogy in the examples you gave. Bitcoin to your raids, precious metals, so many things you've been through. What is going on in one of those? like maybe pick one and I'm literally curious what you are doing in the moments, what you're looking at, what you're studying, what supply demand imbalances you see like what what is the literal nature of one of these windows that opens every so often. If you think about all the really big moves, it's probably because uh the market has gotten too carried away or there's been some imbalance that's gone on for too long or a central bank does something that they shouldn't be doing or a government does something they shouldn't be doing. So that's I think the genesis of most of the big moves. Typically, it's going to be inspired by central bank or central government. A good one right now in the making that's going to be interesting, I think, is is dollar yen. The yen's grossly undervalued. Has been for some time. What's the catalytic moment? That's really the the point you've got to ask. What's the catalytic moment? And that catalytic moment was this new president that was just a new prime minister that was just elected. She has all the characteristics of a Ronald Reagan or a Margaret Thatcher or Donald Trump when he got elected um the second time. And if you look at what those local currencies did, they all appreciated pretty quickly 10% off the bat. I want to say Japan has $4.5 trillion dollars. Uh a $4 and half trillion dollar net international investment position to the good with the rest of the world. Probably 60% of that's in the US and most of that is unhedged. So they just have this massive dollar liability. And all of a sudden, we've now got the most dynamic leader in certainly a half a century in Japan who's Japan first is going to have a very uh entrepreneurial way that she is going to remake that economy. So, you're looking for something that's underowned, undervalued, way out of whack. >> Yeah. >> People have gotten complacent on it and you're looking for that catalytic moment. In the case of the two-year rates in 22, um, we we had way too much fiscal stimulus. And then pal, he overstayed being easy way too long because he wanted Biden to reappoint him. >> So, as soon as Biden reappointed him, it was go time to get short two-year notes because you knew the Fed was going to normalize. And then in 2020 when you saw again all the interventions both the central bank and the treasury um you just knew that the inflation trades were going to take off and what was of all of them what was the best one at that point in time it was Bitcoin. Bitcoin is unequivocally the best inflation hedge that there is more than gold because Bitcoin is finite. There's only so much Bitcoin that can be mined. The problem with it is inflation hedge is if you got into kinetic exchange, there's clearly going to be cyber warfare and anything that you have to deal with electronically is going down, including Bitcoin. So, strike one. And then secondly, quantum computing. Who knows if and when with AI advancing as fast as it is that we may actually have quantum computing. Now quantum computing, someone can come in and can hack any bank and hack anything they want to. So in terms of it being a great inflation hedge, gold increasing supply every year by by a couple of percent. Bitcoin there's a finite amount that can be mined. It's decentralized. And so in that sense it's has the greatest scarcity value of anything. >> If you think about the big ones that you've lived through 87, you know, the global financial crisis, COVID, etc. Uh various bubbles, asset bubbles through history. Maybe say a little bit about those general experiences. You're very famous for what happened in 1987, of course. And and I'm curious about those ones because I'm curious what you think about today's environment. Are we in a bubble is a very popular question. mostly that's answered by investors, less so by traders. And so I I would love your perspective on the big ones you've experienced historically and how those lessons apply to today. >> If I think of some really really big accidents, most of them have the same underlying reason, same underlying foundation, which is some too much leverage somewhere. Most of the leverage most of the time if I think of the big ones were uh derivative inspired either futures or options. 1987 that crash was 100% portfolio insurance 100%. Had they had limits which they didn't it would have been a 10% maybe 15% max but that was 100% derivatives. If I think about 1998, long-term capital, big derivatives, they had a huge balance sheet with a lot of derivatives they were off sides on. 2000 was a little different. 2000 was the easiest bare market I've ever seen my whole life. It's got so many similarities to right now in the sense that the bare market of 2001 and 2002 were a consequence of all the IPOs in 99 2000 and then as they unlocked uh you just had this neverending >> cascade of selling >> cascade of selling that's a great way of putting it and we're getting ready I I want to say that the the the contemplated IPOs in the next year are going to be five 6% of market cap. So why are we where we are right now? Because we've been retiring 2 or 3% of market cap, probably led a little less than 2% market cap every year without fail for the past 10 years >> through buybacks and things like this >> through buybacks. >> And so now all of a sudden you're going to completely reverse that math. >> And so I don't think it's necessarily happens instantaneously with the IPOs, but then there'll be the unlocks. So you could see a situation where okay, maybe go through some kind of rolling top and then 18 months from now, six months, we'll have to look at the buyback, the the unlock schedule, but you're going to want to watch those because that'll just be adding equity supply and you've already going to be diminishing the buybacks because of all the commitment to capex from the hyperscalers. They're already going to be eating into their cash flow. So, I think that's why tech has dogged it and why it will continue to dog it because all the funding, much of the funding for these IPOs is going to it's going to come out of existing tech stocks. When you say are we in a bubble, I don't know if we're necessarily in a bubble. We're clearly so leveraged in equities in this country. We're so dependent upon firm equity prices at this point in time. And when I say leveraged, we're 252% of stock market cap to GDP. So 1929 we were I think at the top we were 65%. And then in 87 we got to about 85 or 90%. Then 2000 we got to 170% and now we're at 252. So you can just imagine if you think about the periodicity of significant bare markets since 1970, we get kind of a mean reversion about on average every 10 years. When I say mean reversion, let's say mean revert to the past 25 or 30 year PE. So if we did that here that would be and again these are elevated peas way elevated be uh beyond the 20th century that would be a say a 30 35% decline well 35% on 250% of GDP is 80 90% of GDP the reverse wealth effect oh my gosh 10% of our tax revenues or capital gains they go to zero so you can see the budget deficit blowing up you see the bond market getting smoked, you can see this kind of negative self-reinforcing effect. And so it's troubling. >> It's troubling. So, are we in a bubble? We're we're clearly in a sovereign debt bubble. Uh in the stock market, we're over equitized as a country, have the highest individual equity waitings in the history of the country. And then the real problem is is that we're also if you look at private equity in 2007208 that was about 7% of institutional portfolios. Now it's about 16% of institutional portfolios. Real estate's gone up. Infrastructure bets have gone up. We're so much more liquid than we were in 2008. So you have to be cognizant of that fact when you think about how you have your money deployed. I had a friend ask me, he was a wealth manager and he hates hedge fund because of the fees. He just says, "We just need to put money in the S&P 500." He said, "If you were investing for 20 years, what would you tell somebody?" And because he knows that I'm supposed to say, "I'm you just buy the S&P, close your eyes." Well, the problem is that if you buy the S&P at this current valuation, the 10-year returns negative when you buy with the S&P P of 22. That's what history shows. So yes, the S&P is a spectacular long-term if you have a 100redyear view, but that's because that's an average of a 100 years, including times when the S&P 500 PE was six and seven and eight or oneird of what it is right now. So valuation matters a lot and the stock market's really high and it's going to be really hard to make money from here. I think with any kind of long-term view, >> if I came and shadowed you on a given day today, how does it go? What are you doing? What does a day look like today? I I know you have a system that you can be heard by all times by your execution traders. I know it's intense, but just like walk us through a a day in the life. I get up at say 6:15. I work till 7 o'clock. I go work out till 7:45. I try to do 45 minutes of hard cardio every day. I get in front of the screens for the opening. I typically won't have any meetings till um 10:00 and then I'll probably do meetings till about 12:00. typically have lunch with someone, have a meeting after lunch, try to make sure that I'm I've got an hour before the close and an hour after the close to be able to map out >> what I want to do the next day because again, I want to have a plan. Uh, as well as think what's going to happen that night in Tokyo, Hong Kong. I'll go home around 5. Um, walk with my wife for an hour. Uh, go up work for an hour, come back down and eat. I'll normally watch the news and the most mindless entertainment >> that I possibly I used to read a book and a half a week and then once the internet came, forget it. I I'm so tired of reading by nighttime. I've read one uh one book in the last year, which is going to be, by the way, I recommend everyone read it. It's David Wood. He's a kind of a newsletter writer, but he he has written what's going to be a spectacular bestseller on globalization markets. It's fantastic, and I'll bet you gets made a Netflix series. I bet you it's going to be uh a a banger. Anyway, I'll try to watch something on Netflix. Then I'll work from say 9:30 to 10:15 and then uh go to bed. Then I'll wake up at >> 6:15 and do it. >> No, no, no. I'll wake up at probably 2:30 or 3:00 and I'll work for half an hour, watch London open for 45 minute, half an hour and I'll do a lot of analytical work. Then it's a quiet time. It's good. Then I'll go back to sleep and wake up at 6:15. >> Wow. And you've been doing that for 50 years. I've been doing that for I'm probably doing that uh yeah, I've been doing that for certainly since the 80s. I feel like I work so much harder than I did uh 40 years ago, 30 years ago >> because there's more information. >> Oh my god, I get 800,000 emails a day. If I think about when I was a pit trader, I think about even the 80s when there was so much less information. I could spend more of my time intently focusing on what the highs and lows were going to be in the day, which are really important for execution. Doing what my boss Eli did, just waiting, paying attention, focusing. Are we at a point of maximum pain? Is there so much fear right now, which is a great time to buy? Is does it look like it's going to go up forever? a great time to sell. You You have to be intentional to be able to pick those points in a day. And when you're trading 25 different instruments, instrument by instrument by instrument, a lot of times they'll be correlated, sometimes they're not. You have to be very intentional about that. So if while you're doing that there's 48 emails coming in at the same time, all of which >> could be actionable information. I think today, for me at least, it's it's it's just a lot lot harder, I think, because the information overload distracts me from exquisite execution. >> What does that mean, exquisite execution? >> Am I buying when there's blood on the ground? And am I selling when there's complete elation? Let's take last Friday where we had the largest down day in the history of gold and silver. So, you got to be you have to be paying attention every minute because when you have a 33% move in silver in one day, you you just have to be so focused on that day's activity, what you're going to do that on the opening, what you're going to do if the price moves through a certain price that you weren't anticipating that day. It gets back to what I learned in in in bed stock. You better have a plan. >> You better have a plan ahead of time and it better be self-executing and you better have thought through that. And I hear it from my other friends who are macro trainers. They go, "God darn it, I just feel like I'm two hours late, three hours late, >> and last Friday was a great example." Can be so material. If I think about what's required to do that day in day out, there's got to be just like an enormous amount of passion for markets and what you do. Can you just talk about the notion of finding nurturing the importance of passion in a life's work? >> And it's so funny when you when we talk about traders, great traders, and again I'm talking about people who are alpha generators, not investing. We had a dinner about I guess it was a year ago Christmas and I had four or five of my best risktakers at dinner and we had the debate is is uh a great traders born or made. I'd say it was unanimous agreement at the table that 70% of it is uh is nature and when I say born with it by the time I was 21 I had play I I loved games I I love chess back gammon parti monopoly uh battle um gin ramy you name it I played it then I started gambling in college I had a degree in probability theory and had never taken a math course on it, but I knew it. I was such a game fanatic and I loved it so much. If I had to pick out the the number one traits, type A personality, incredibly curious and inquisitive, uh, and loves loves competition, loves games because again, the whole our whole business is just another form of probability theory. And I still I still love today. I play bridge with my friends all the time. I can't get enough of that. I love any kind of game of chance. And I love trading. And the other reason that I I love trading, I'll never forget my wife's Australian and we first got married back in 1989. She said, "Well, I know you guys live in New York, but I came from the beach. So when our last child graduates from college, you're taking me to the beach. So sure enough, my son turns 18, my fourth child, 2014, we're going. So we ended up down here in Palm Beach. She gives me a GP. The GP, a general practitioner. So she makes me go in. I see the guy and uh this guy's 83 years old. And I say to him, "You're living here in the land of the walking dead. Everyone here is basically fossilized. Um, what is the secret to longevity?" And he goes, "It's real simple. You retire, you die." And that had a really profound impact on me because I realized as I get older, and maybe when you get older, you will too. Boy, you better. If you don't use it, you're going to lose it. And that's why I try to work out two hours a day. And uh it's why another reason that I enjoy trading is I want to keep my mind sharp because there's too many things that I want to do when I'm my father lived to be 100 when I'm in my 90s that I want to do. So I think tra trading is is great therapy for me too. The other reason that I really enjoy trading is I'd like to make an absolute pot of money. so I can give it away. I got so many causes that I want to give it to that I actually feel like this is uh the pursuit of nobility. >> So I enjoy I I feel it's a privilege to wake up and I just hope I freaking kill it >> so I can give it away. >> As your business scales up, everything gets more complex, especially your compliance and security needs. With so many tools offering band-aids and patches, it's unfortunately far too easy for something to slip through the cracks. Fortunately, Vanta is a powerful tool designed to simplify and automate your security work and deliver a single source of truth for compliance and risk. There's a reason that Ramp, Cursor, and Snowflake all use Vanta. It frees them to focus on building amazing differentiated products, knowing that compliance and security are under control. Learn more at vanta.com/invest. I know firsthand how complex the tech stack is for asset management firms. And seemingly every new tool and data source makes the problem even worse. Adding more complexity, more headcount, and more risk. Ridgeline offers a better way forward. One unified platform that automates away that that automates away that complexity across portfolio accounting, reconciliation, reporting, trading, compliance, and more. All at scale. Ridgeline is revolutionizing investment management, helping ambitious firms scale faster, operate smarter, and stay ahead of the curve. See what Ridgeline can unlock for your firm. Schedule a demo at ridgeline.ai. >> Can you tell us the story of starting Robin Hood and what what you talked to us earlier about the charter school work and and everything in Bedstey. Robin Hood started the year after. It's a really important part of your life and legacy. >> Robin Hood happened the day after the crash and I I maybe the worst macro call of my life was thinking we were going to go into depression. I thought for sure I'd been looking at the parallels in 1929 for a year. All of a sudden it happens. I think oh my god this is a perfect replay, a perfect analog. So um I called up my friends and we began it. It was just been the most marvelous journey. I can't recommend anything more highly than uh getting involved with some cause that you believe in. The best part of philanthropy and charitable giving is the people you meet. Oh my gosh, I've met the greatest, most wonderful, most giving. It just brightens every aspect of your life to be associated with the best people who embody the best ideals. Anyway, we said we got to do something. So, the only alternative at that there really wasn't there really weren't any charities focused on fighting poverty, which I thought was going to be rampant at the time. So, um, I've always believed if you want to do something, you're better off doing it yourself. So, we started out very small and we just applied basic business principles to finding the most efficacious way of helping people in need. And again, along the way, I'm learning. I'm learning by doing. I'm making all these mistakes along the way. uh and I'm learning so much and then I realized boy this is this is a science uh and then we just started hiring the very best people that we could uh as our staff and then recruiting there was it was so easy to recruit people from the financial world to help the 90s were a special time everyone wanted to participate and give back and help I I don't know when it was but my gosh we created so many fantastic philanthropists in that era. In the 80s it was completely different. Everyone wanted to be associated with the fillermonic and these are all great but they wanted to be with the named social charities. Uh and I'd say after the crash everyone found their significance by helping others. Maybe it was just because that was when you really started to accumulate these big fortunes, individual fortunes for people and they were just really really um wonderful about wanting to give back and the whole financial community supported Robin Hood such a spectacular way. The whole hedge fund community in New York, it was really just it still is a joy. What if you think about the whole broad world feels the healthiest to you today about the system that is the world where that makes you the most optimistic and where does it feel the most fragile? >> I'm trying to fast forward to the workless world to where AI does so much for us that we don't have to work. And I used to have a really negative outlook on what that would be like cuz if you think about it, so many of us define our significance through our work. Imagine a world where now the significance that huge incredibly important component of human happiness is now taken away from us because of the fact that we don't have to work. I used to really despair about that because as someone who works all the time and finds my significant, what am I going to do? But I've become more optimistic recently because as I think through um how athletes find significance in the sports they do, how I play bridge with my friends and find so much significance in competing with them. I think maybe humans are adaptable enough that we'll find a different way to find significance. Maybe it's going to be in finding that intentional simple act of kindness every day. I'm not sure what it is, but I do think that as a race, we're so unbelievably adaptable, so smart that we might be able to find out a way to find happiness. I think that's going to be the biggest challenge. potentially in four or five years is what do we do when so many of our jobs have been replaced by uh by AI? >> So many young people are trying to figure out what to do, what their careers are going to be. You've talked and written a lot about the power of communication, like great communication. It's like such an essential skill. >> Journalism is an interesting, you know, way of of learning that. Can you talk just about that power as a as a message to young people trying to figure it out why they should maybe focus on that? >> I have long maintained that better than a business school degree. Journalism 101 should be mandatory subject in every college which is newspaper writing in particular. It was so important to my development. So my father had a really small trade finance legal paper in Memphis 2500 person subscription. I would be the the copy editor, the front page editor and then I would write for it and took journalism classes and what newspaper writing does is it teach teaches you you have to write where the conclusion comes first. So unlike writing something and then at the end we get the story here the end comes first and you have to write it with this incredibly rigid discipline so that every succeeding thing that you write the most important part is in the first sentence of the first paragraph. The first paragraph is not more than two sentences. Who, what, where, when, why and how. That's the first one. Then the next most important thing that's the second paragraph no more than two sentences. The next one same thing. What is that really? It's a principal component analysis of taking whatever event may have transpired and putting it in this cogent way where the most important stuff starts the beginning and you work your way down through it. Particularly where today's world the attention spans are this short uh and time clearly is money. You want to be able to communicate in the quickest and most concise fashion you can where you get your entire point across in the shortest amount of time. There's that old saying, if you can't tell your story in 15 seconds or less, no one's going to listen. And never been more true than right now. Because again, if you're getting a thousand emails a day, I want to know in the first paragraph whether I want to keep reading or not. As a macro thinker, man, it helped me so much >> frame every potential trading decision, every single action. I could just again very quickly because I had I had learned how to do it do that principal component analysis and hierarchialize the most important things. And in trading there there's so many different variables that come into play. so many different variables that come in in making a trading decision. Let's say that there's 10 really important things. Every one of those will have its day. It'll rotate through in terms of importance. Again, the yen's a great example. It's been completely undervalued for the past 24 months, way off sides. It's so ripe to rally sharply, but it needed a catalytic moment. And that catalytic moment was this new president that was just a new prime minister that was just elected. So if you take valuation which everyone's ignored now for the past two years in the end all of a sudden this moment takes it from here and puts it at the very top. So newspaper style hugely important in developing any logic framework. what's the most important thing that's actionable at this second in that particular instrument and what's my checklist and how do I hierarchalize and that's that's literally what trading is all about. >> If I were to ask you to do that on the topic of the principal components of a great life what would how would that read? >> God, family, friends. When I think of friends, I think of fun. So, God, family, friends, and fun, service. I mean, my significance uh is not going to be from being a trader. I don't think that's where my significance is going to be. My significance is going to be um first and foremost uh going to be my family. every now and then like uh I actually get joy out of thinking about my funeral cuz I'm so excited about the songs that I've chosen that'll be sung. I almost wish I I wish I was going to be alive for that cuz it's going to be such a great time. I know my family and friends will enjoy it. I'm thinking of family because again, if I think about the end of my life and I look back, I'm not going to be thinking about the 87 crash or or Bitcoin. I'm going to be thinking about who I loved and who loved me. That's what I'm going to be thinking about and what kind of relationships we had and what kind of times we had. I think the professional aspects are these great tools that allow you to do more meaningful things and the things that count which is what have you done with your family? What have you done with your friends? How have you served others? What have you done to leave a legacy of uh happiness and betterment and goodness to the people that you've been privileged enough to come in contact with? And when I say legacy, I don't mean words. I mean deeds. So what have you done that have allowed other people to enjoy and better their station in life, their happiness in life for me? That's that's the most significant thing by far and away. >> Do you always believe in God? >> I have trouble at times. I mean, yes, I do. But I mean, I you know, my faith is tested like I think anybody faith is tested. I wish I could say with 100% certainty, I know I'm going to heaven. I certainly pray every night. The most important aspect is, and the reason why I think it's so important for us all to have God in our lives is is you got to have some set, some code by which you live. I think Christianity, Judaism, a variety of these have these wonderful doctrinary ways of bringing stability and order and goodness in people's lives. They give you something that you can lead a productive life with and and in a way that's very sustainable and allows you to uh again engage with everyone around you with with great happiness and joy. What about Africa? >> I love Africa so much because I love the outdoors. Can I just say this? It's taken me 70 years to get this point. My new new thing is I love to find peak spring and peak fall. It doesn't have to be Africa. You can find that day in a neighborhood and in peak spring when the colors are vibrant and when the fragrance is just overwhelming. you can find it to the minute in the right place. And I've never felt so alive in my life. I And I look for that. I'm I now travel the United States for that moment because I know when Peak Spring is in Georgia. I know where Peak Spring is uh in Tennessee and I know when it is in New York City and I know when it is north of New York City because New York City's normally a week behind um this place I go to in upstate. Same thing in fall. There'll be a day where you get the intersection and the northeast is the best because it has the greatest biodiversity where you see the greatest color and you can see those color changes by day by tree and you find that day with that intersection of color change. I'm telling you if you find that day you can feel the energy. I've never felt so alive. I you can you feel God at those moments. It's such a wondrous moment as as you go through how life is changing so fast and one in case of spring obviously it's blooming in the case of fall it's transitioning into a more dormant period but they are so energetic and so exciting and I highly recommend people try to in their neighborhood find that day boy make sure you're walking that afternoon before sunset oh my gosh it's a joy boy. >> You've lived so much life in the years that you've been with us, and I never asked the question of general advice. I think it's kind of a lame question, but I'm tempted to close the conversation there with what you would just tell people listening that this audience is passionate, they're curious, they're searching for their thing or they're trying to get to be the greatest at their thing, they're competitive. What would you tell them based on the sum total of all your amazing life and experience? My mother used to always say, uh, and I think this is what this country really needs right now. You've just got to kill them with kindness. So, you're going to wake up someday it's going to be terrible. You're going to be in a bad mood. There's going to be something on TV that's going to make you angry. And particularly in these times right now, my gosh, when everyone wants to demonize the opposition, I think we've got to realize it doesn't have to be that way. We can humbly uh devote ourselves to finding the kindness within ourselves and the goodness within ourselves and transmit that to somebody else during that day. I think that's I think that's the secret to happiness. You don't have to worry about yourself. You have to worry about how am I going to brighten someone else's day. And with that attitude one, you'll always be happy. I'm just going to spend this one day doing this one outward act. And if you repeat it enough, again, everything is about the reps, right? Pretty soon, you take I should and they will become I ams. So if you take that mentality that I want to do this wonderful act of kindness for someone else, pretty soon you become an incredibly kind person. It becomes natural. It becomes instinctive and organic and it just it's going to brighten your day and you'll have just such a positive outlook on life. And I think that's I think that's where we I think that's what we need to intentionally begin to do uh every single person for sure. It'll be a much better world. >> Paul, thank you so much for your time. >> Thank you. >> Your finance team isn't losing money on big mistakes. It's leaking through a thousand tiny decisions nobody's watching. Ramp puts guard rails on spending before it happens. Real-time limits, automatic rules, zero firefighting. Try it at ramp.com/invest. As your business grows, Vant scales with you, automating compliance and giving you a single source of truth for security and risk. Learn more at vanta.com/invest. Ridgeline is redefining asset management technology as a true partner, not just a software vendor. They've helped firms 5x and scale, enabling faster growth, smarter operations, and a competitive edge. Visit ridgelineapps.com to see what they can unlock for your firm. Every investment firm is unique and generic AI doesn't understand your process. Rogo does. 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