B.E.E. - Doors drummer John Densmore - 3/24/14

Transcript

Yeah. So the whole thing is, I feel like it's almost the end of the world. Like, California, for instance, is banning all oil production. What are they gonna do? How are they gonna even power their Teslas? Yeah. I think it's 2035 they've outlawed the sale of any new gas powered vehicles. Right? And meanwhile, you're not allowed to I think now no new oil wells can be drilled anywhere in California. And meanwhile, we're not getting oil from Russia anymore. Saudi Arabia is hitting peak oil, or they did, like, a decade ago. Like, literally, what do people think is gonna happen if you just play this out even 1 year? It's a real good question. And then, look, we can kinda get on California, but Texas you know, you talk about California being a blue state, Texas being a red state. They're having rolling blackouts at times, and they're concerned about that. So it's just really strange when you look at it and you look at someone like China, for instance, just came out, I don't know, 2 or 3 days ago, might have been a week ago, and basically said their coal fired plants, they're at all time highs, Demand's at an all time high. Production's at an all time high. And I think they said they have plans for just astronomical capacity through 2025, you know, for coal. So this is what I don't understand. Like, literally, when I did this podcast with general Spalding, who was the top White House advisor for China, he said we're entering this new cold war, but the difference is the US is gonna be the one with the empty shelves and China's gonna have the full shelves. And are we eyes wide shut going into this or what's what's the story? I'm not just talking about energy, like grad students. Nobody's immigrating to the US anymore or we're stopping as much immigration as possible, so we're leaving out heavy amounts of talent that used to fuel Silicon Valley. And meanwhile, Powell, he kinda wants a recession. People think we're in a recession now. This is not a recession. Recessions are hell, and industrial production goes down, and wages go down, and unemployment goes up. All the reverse is happening now. So what's gonna happen when things actually get bad? Or will the Fed will Powell is he just playing, the game of, he's just bluffing? I think that's the other question. It's like, bring inflation down from 9% to 5%. And then when some of the numbers for things like unemployment start to tick up, be like, oh, we did what we could at the fed, and we don't wanna push it too far because we don't wanna deprive people of their livelihood. Blah blah blah. I kind of think that, but I don't know. Just everyone is going crazy these days. You just have no idea. And I'm an optimist as you guys know. One of the things that's interesting, and I think I just saw today come across the screen, and it was a headline. Right? It was I saw it on my computer, then it popped on my phone. It was definitely a panic headline that mortgage rates hit 5.8%, and I'm like, was that really that bad? I mean, my first mortgage was definitely higher than that. Yeah. In 2006, my mortgage was 8 a half percent. I get what people are saying. I get maybe that does have an effect, but I don't know. That doesn't seem outrageous that it's a 5 point 8, but I do. I think a lot of what Omid said, when things settle down and come in a little bit, I just think that they're trying to cool things off, but, yeah, there there is a risk. Right? I mean, I just don't see how, and this plays in a little bit to what we were talking about last time with Oman's famous oil trade, where I just there's just a disconnect when you see all the charts of global usage of fossil fuels and the green movement and EVs, it just doesn't seem logical, the pace at which things are moving, that we can sustain this move towards green this quickly. Right. And, like, nothing wrong with being, like, hey. If we could do everything with with wind power, then go for it, but it's just not possible. Right. And you were mentioning nuclear power earlier. Why don't we go for nuclear power? Well, that's probably political. Right? I guess so. I'm no expert, but I don't think it's hard to make the argument that nuclear is actually very green. Like, the big events like Fukushima get all the attention. But when you consider most of those nuclear power plants were built, like, 50 years ago, and how much Yeah. Or 70 years ago. Yeah. And how much computer technology has advanced since then? And I believe just the science of nuclear power has advanced greatly. And then you look at the exogenous costs and risk of every other source of power. Like, with a lot of the renewable stuff is just not predictable, and we don't have battery capacity that's good enough, nearly good enough. And then even if we did, I'd wonder what, like, the environmental impact of having all these gigantic batteries that would store power for entire cities would be. And, you know, we know, like, enter or coal and oil and gas and stuff has risks, but solar has risks. So, like, people fall off roofs. Like, I I think that's a non zero Is that a big solar risk? I I believe some I I don't wanna go on the record, but there was a time where people would say, like, if you look at the the problem with solar panels is that someone has to go and install them somewhere that's usually not an easy place to install. But the point is every kind of energy has pluses and downsides, but I feel like given how much the calculus has changed because of Russia and Ukraine and everything in the past 6 months, like, I am surprised there isn't a mass political movement to bring back nuclear power. Or bring power period. Like, they're just shutting down all our source of power. Let's be honest. If you're living in California right now, left, right, center, Gavin Newsom, who we think is gonna likely run for president in 2024, does not want rolling blackouts in his state. He does not want that. You can be the greenest guy in the world, but that person, whether it be Hollywood you know, we we see it all the time from the Hollywood set, right, that take their private jets to the global warming conferences. If you're in California and you have your EV, you're driving your EVs, you're doing everything the right way, and it's a 110 degrees there, and they're telling you you can't have any air conditioning, you know, and you're in your mid seventies and you're sitting there, you know, there's heat exhaustion. There's all kinds. You're not okay with that. You're not okay with that, and there's a solution. There's an available solution. It just doesn't make sense that this is the path that we're going down. But the other funny thing about all this, and this is somewhat related, and this kind of relates a lot to what we've talked about in the past about kind of all the Wall Street stories, is if you're talking about China coal, rolling blackouts in California, Texas, battery capacity, anything. Right now, it's real easy. What's the headline on all of it? Well, put Putin did it. Putin Putin's war in Ukraine. Economic situations, inflation, Putin caused it. And it's such a cheap, easy out, and I'm not saying there's not an effect, there's not a market effect, but to act as if that's the catchall is just disingenuous. It's an easy out. And, look, the easy out in the past, right, is to attack big oil, just greedy big oil. But if you look at a lot of these big oil companies, and and I don't know them well enough, but I've invested in some from time to time. And if you read articles and read research, and there's a lot of people that have been invested in big oil that think they've gone too green too fast. They've definitely poured, like, 1,000,000,000 into research on all sorts every type of green energy possible. Yeah. So, I mean, like, Exxon's probably the leading developer of green energy technologies. Right. Right. So, but which reminds me, speaking of the Wall Street stories, and Omen, I'm trying to remember, you were with us when we were invested in that one fund, well I'll just say Coleman Marks Fund, and were you there when they introduced us to Steve this guy who pitched us on his alternative energy invention? I believe so. Was it the biofuel guy? Yes. Oh, man. It was there the first time around. Because there was a first time. There was an original. Yeah. There was a first time. There was, like, a dinner, and then presentations and stuff. And this is a real technology. They wanted to lay down straps or whatever you call them on the LIE or whatever highway, and get all the energy from the cars driving all over them. Yeah, I was thinking of the train. And, but I've read about that technology, it doesn't really work. Like, you need, like, more energy to power that technology than the energy it gets. But then he had other things going on. His PowerPoint, I remember it. We were invested in this hedge fund and they wanted to pitch a deal to us, so we owned a shell. A shell is a public company that has no assets in it. But you could merge a real company into it and then it that's a way of that company becoming public. And so these guys wanted to merge this biofuel company into our shell, and that's how they would bring this biofuel company public, and then they would fund it. I remember this guy, he had a PhD in something, and he presented this PowerPoint, and it was getting progressively more insane as every page turned. There was an all time moment, and the fact that we're talking about this 15 years later, and Omid, at this point, is gonna say he was not there probably when we say what was in that PowerPoint, but he actually talked in the PowerPoint, right, about being able to teleport himself. Teleport through time. Through time. The next page was the time machine. He literally he literally said he had, like, a meeting in Dallas, and he was working on a technology where he could teleport, like, through the fact that we just didn't walk away at that point. Yeah. As the person who wasn't there, now I'm gonna be, like, the voice of the audience and be, like, be, like, how quickly did you stand up? How polite were you on the way out? And did you take the I I imagine back then there was a printout of the deck that, like, on your way out, you emphatically threw it into the trash can. Here's the funny thing about this. The funny thing about it is we did leave. We did make fun of him for that, but we still thought maybe he had something on the biofuels. We thought he was gonna change the whole energy Yes. Question in the US forever. Kinda just let the mad scientist crazy idea just kinda disappear a little bit. We thought, okay, that's what really crazy smart people you know, they have some really dumb, outlandish ideas like that, but maybe he was onto something. Right. He seemed super smart. Like, he was explaining every chemical equation and physics equation, and he seemed, like, unbelievably smart. And so we wanted to believe him. And still to this day, I will sometimes call James and say, hey. Do you think he was did he believe himself, or was he just crazy? And I don't know if we still figured that out. I think he still might believe himself. The other litmus test is one of my favorite James sayings of all time was always, why do you need us? Yeah. Well, that was always a critical question. Right. Like, it was like that we'd be on some pitch. And I remember this specific one. There was some famous NFL player was also on board. Some startup was racing for Walker, I hope. No. It was it was it might have been Joe Montana. No. No. It was Dan Marino. Dan Marino. Right? Dan Marino. Yeah. I met Dan Marino around then. Some company was like, we have this great idea, and we've raised money from all these important people, billionaires, blah blah blah, and Dan Marino. And then the close is always like, and now we just need your check-in order to create 1,000,000,000 of dollars and take over the world. And that's when James was like, it's never a good sign if our check is the thing holding a company back from success. Right. Dan Marino and George Soros are sitting on their beds with their phone right in front of them waiting for a phone call. Is James in? Did he get in the deal yet? Right. Right. Right. So we could wire $10,000,000? Right. So I never understood that, like, but here's the thing. Well, me most of all, but Dan, I would say also, not as much you, Omid, I was a salesman. Like, I was the one raising a lot of money or trying to raise money directly for the fund, and in every business I've had, I've been the one either raising money or doing a lot of the sales work. And so I think people who are always on for sales, they have a hard time getting pitched because I want people to like me. Yeah. And so when, like, when this guy was saying, okay, well, the next page, the time machine, I'm like, oh, that sounds really interesting. Like, I can't help myself. So now when I go to pitches, I have to bring someone alongside of me to say no. Like, I can't do it by myself. There was just enough stuff surrounding that scientist that we met. He had been in front of enough people. He had presented at a few big conferences. There was enough stuff around him where we kinda thought, alright. We're we're not crazy. Maybe, you know I mean, there other people have met with him, and, you know, I think he was awarded some grants from some big companies or universities. And Yeah. I think Shell or someone like that might have given him some money. Yeah. Again, back in the fossil fuel space. I mean, it always it always comes back to that. I mean, I visited his lab where they were doing, like, some gas to fuel stuff. He was literally the Theranos of the energy industry. And alleged I'm not just saying this is allegedly. Not like it's not a fact. It's my opinion. Yeah. But we were pitched all the time. There was another time, and, Oma, this is this is related to what you were just saying. There was one time we were pitched about a tell like, our lawyer had sent this deal to us. This guy was basically creating the whole telecom industry in Africa. And he was like, we're closing the round, but we're willing to let you guys in. And in the next round, Bill Clinton's coming in. And we just have to close this round first and you're the last one. And, I just never understood this kind of pitch. I would never say that to anyone like, listen, Omid, if you come into this deal, then after that, Warren Buffett is I've actually had texts where people have tried this trick with me. Warren, we're ready for your $500,000,000 investment. We're just waiting to close the round. And, as if they accidentally texted me instead of the intended Warren Buffett. So I've had that trick tried on me with people I know. But I think we've all kind of over the last 15 or 20 years I mean, sure, we've we've had a number of clients. We've done it. But we've also gravitated towards just doing our own stuff with our own money. Yeah. Because I think we've all gotten to a point, and I know I've said this, where I've told people about stuff that we're all doing. And they're like, oh, that that sounds interesting. I'm like, no. You don't wanna come into this. And I'm like, what do you you just sold me on it for 10 minutes and said you put x. And I'm like, yeah. But you don't I wouldn't put in if I was you. You know? And and and so it's it's this funny Wait. Is that a sales tactic? I you know, that could be a sales tactic. So in all my years of debating with people about Bitcoin, you meet a lot of people who are like, it's worthless, it's going to 0, blah blah blah. And I I never wanna get I don't get into debates with people about investing. I know other a lot of people in crypto are like, no. Bitcoin has value, inflation. It's going to the moon, whatever. I have found the most effective way to end that conversation is when someone says I think Bitcoin is worthless and going to 0. I just said, you know what? You're right. You should never ever own Bitcoin. In fact, I would like for you to publicly declare that no matter what happens, you will never own a dollar worth of Bitcoin. And usually when I say that, they're like, oh, I didn't say never. I just I will say on that, when it comes to to crypto, we've generally and James has done you know, has has been involved more so than than I have, but a lot of what we've done in crypto will happen directly after I have a phone conversation with Omen. So it's and it's usually directly what what Omen has just has just told me about crypto. But it could be a sale it could be a sales tactic when you do that, but it always we've always kind of just on that note, like, about the African deal. When we had our hedge fund early on, I usually would find myself saying to a prospective investor, hey. Listen. If I was you, I'd probably just see whatever the 3 or 5 hedge fund offerings Merrill Lynch has. I mean, I would just I would just it's it's a safe play. Just go do that. I mean, that was our problem from the beginning is that you could never consider us the safe play. Even though our returns were pretty steady, particularly the fund of hedge funds, we were not volatile at all. We usually were like 1 to 2% up every month, and then our down months were like a half percent down, like very small down months. But because, and we've talked about this before, because of our lack of pedigree, except for Dan, we never worked Omid and I never worked at a bank, we never worked at any other hedge fund other than our own, and there was no reason. I remember one time I met with a guy who was an investor, and he was like very looked like an investor. Like, he had the silver hair, a bright red sweater, like super bright red sweater, and he meets me for lunch. And finally at the end of the lunch, he's like, I can't put money with you. You have no business card. Your hair's a mess. You know, you don't have an office. I don't think we had our 5th Avenue office yet, and you don't have a phone number. I'm gonna call your house. Like, what's what's going on here? And he was right. Like, we just weren't professionally set up that way, even though our returns were good. But that also kinda speaks to you talk about our steady returns in the hedge fund. I would say the same thing as when it comes to our VC investments where we've done well, but it's been very like VCs are, we don't have a fund per se where if you look at our 25 or 30 deals, you have a situation where if someone wanted to come in with us on all 30 deals, they would have done well. But it's so hard where you run into someone and you say, hey. We have a new deal we're looking at, and they're like, oh, yeah. We know you've done deals, and you kinda wanna say, well, you can't just do a one off. I mean, the one offs are hard. You kinda have to do a little bit of everything, and we have that on our end. Omid probably has the greatest VC deal of all 3 of us, and I have 10 emails from him and probably can say I had 10 phone conversations inviting us into it, and I have them. And I'm not disappointed or anything about it. I'm just talking about it publicly, but it's a very, very successful, great home run deal. Wait. What was I I think I've heard about the deal. I think Dan told me, but what was the deal? You wanna describe it? I don't wanna name names for various reasons, but I will just say that I do think it's much better to be lucky than good because at the early days of the crypto world, I was also managing a family owned property in Brooklyn where we had, like, half a dozen tenants. And one of them was this young guy who was into all sorts of different tech stuff, including blockchain, and we chat from time to time about random stuff. And when he was moving out, he was like, oh, by the way, I'm costarting a blockchain infrastructure company, and I'm gonna be the CTO, and we're raising money. And I was like, oh, okay. That that's interesting. Picks and shovels, etcetera. And I did not do much due diligence because I didn't even know how. Like, unlike you guys, I didn't have the background or experience. I just met with the cofounder and heard about the vision, and I was like, okay. That sounds good. And I believe I was their 1st outside investor in the precede round. And in the last couple years, they've done very well. They raised, like, a We would have been the second, James. Man, I just I've heard about the results of this deal. That would have been good. But but you're right. It's hard to predict. And here's the other thing about private investing is that it takes a long time. Like, good companies don't want to IPO. They don't wanna sell because they're doubling revenues every year. Why would they slow themselves down by selling to a Microsoft or IPO ing and then having the returns of the stock market? Yes. We're in the 13th year of at least 2 deals that we're in. They're dragged. There there's that. There's the time component where can you imagine if you have 10 or 15 people that are that are in these deals and they're calling you on deals? There's no updates ever. We know that. But there's also a lot that goes into it where Omid did very well on this deal where there were additional rounds, and there were additional times where Omid would reach out, and we'd talk about it. And there'd be, you know, at higher valuations, and then you're thinking, oh, I'm not sure. And he was very smart about adding, but doing it in a smart way and doing the due diligence and doing the work, like, there's a lot that goes into it where he could bring the next 9 or 10 deals he sees to us. None of them may work. You know? And so Right. It's hard to kinda, you know, pick and choose when it when it comes to to VCs. So, again, it just the the point I'm making is it's the same with our hedge fund where, there's just certain aspects of it where you just might not want a bunch of LPs or a bunch of clients that are calling you all the time that aren't don't understand what it means to either be in these private deals or where there's kinda peaks and valleys. I just think people are more used to that if they're just kinda blindly in the stock market because they see it on the news every day. They see the headlines. Oh, Putin's causing this. You know? And they can kinda just go back to their regular job and and say, oh, that's the stock market. That's what happens. But if they're in a private hedge fund or if they're in a VC that we have, that's something that I think most people don't quite understand, the timing and the ups and downs. And for us to kinda explain it to him, I think, is a little more difficult to understand. Then there's the fraud aspect. And, Omid, this was a little after your time, but at at one point, we were like, okay. Let's try to do faster deals instead of these private investing. So this guy calls us and he has $20,000,000 worth of Twitter stock to sell. This is before Twitter went public. So Twitter was gonna go public in a year or 2 after this and everybody knew it was gonna be a huge markup from where the last VC funding was. It would be a great return if you could buy Twitter shares essentially at a big discount. And so this guy had $20,000,000 worth of Twitter shares that he needed to cash out of in order to fund some real estate development in Chicago. And we found a hedge fund that was interested in buying these shares and we would have maybe participated in this deal somehow, maybe got some shares ourselves or whatever. Like, who is this guy? Well, this is gonna sound anybody listening to this is gonna think, oh, this is classic email from the prince of whatever. This guy said he was the son of the doctor of the king of whatever. So some king in the Middle East, might have been Saudi Arabia, but he was the son of the doctor. So, okay, you think that's a red flag, but we kind of researched it, all the names were legit, we didn't call the father or anything, but the names matched up. We said, can you send your Twitter shares? He had like a certificate, you know, signed by the CFO of the company or whoever signs these things and he had a valid certificate for his Twitter shares. We called the Chicago Real Estate Project and, yeah, they were waiting for his money. It was in the news, this real estate project. We knew it was a legit real estate project. We called his bank supposedly. Yeah. He's got these Twitter shares. Everything's legit. This is a real bank. And we found the the fund and the fund said, okay. We need even a bigger discount. It was like a 50% discount to where he wanted to sell it. Okay. And the guy said, sure. I just need the $20,000,000 or the $10,000,000, whatever. And so the fund was about to wire, and I remember they were about to wire the 10, 15, $20,000,000, however much it worked out to be. I remember Josh calls me and says, something just smells a little bit funny. He agreed too easily to all our terms, and I'm just feeling a little nervous. And Josh says, James, you know the CFO of Twitter. Right? How about we ask this guy for the CFO's phone number, so we can just confirm with the CFO? So we call the guy, and the guy's like, oh, no problem. Yeah. Here's the CFO's phone number. Neil's something. And so so we call the CFO of Twitter, and he's talking to us. Yeah. I'm the CFO of Twitter, and this guy is a shareholder. He participated in one of our early rounds, and then I wasn't saying anything. And then Josh from the hedge fund said, hey, Neil's, by the way, your friend James is on the phone. And then click, guy hung up. Nobody ever answered from every any phone number again. And we we had been minutes away from wiring $20,000,000. And so the FBI got involved, everything involved, but that was a huge fraud. You know, and it was a lot of professionals were falling for it. There was the broker in the middle, I had to call him and say you you need to stop talking to this guy, he's a complete criminal. There was the hedge fund. They had, like, a team of people doing due diligence on this, and everything they were uncovering was legit. Well and at the time, a lot of these deals with a lot of these large unicorn tech deals that were pre IPO, those deals were floating around. It wasn't an uncommon thing. Yeah. Facebook, Uber, we were seeing all of those deals. There were tons, and those deals were happening with hedge funds and with other private outfits. Banks were involved. I mean, on Twitter, especially. Right? There was a big story about Chris Sacca doing the kind of roll up of the private Twitter shares before they went public. Oh, yeah. He he started a fund. Right? Like, JPMorgan funded him or Morgan Stanley, one of those where all he was doing was buying pre IPO shares of all of those companies, like Uber, Airbnb, Twitter, Facebook. And so we figured this was just one of those deals. Yeah. I remember another one was a big Facebook deal. None of these deals ever worked for us. We didn't make a dime on anything yet. If you think about all the things we worked on, this is also the difference between the kind of lifestyle we all had during this whole 20 year period and the difference between that and having a job. We would work so hard on things, 60 hours a week sometimes, with no money in sight and no money ever appearing for most of these deals. Yeah. There was a lot of hustle involved, but that's what happens when, you know, you don't have that pedigree. I wonder if there would have been a better way to, like, use our time more effectively. Like, you know, for instance, I'm a tech guy by background. I should have been, like, writing some software or something instead of trying to sell some Saudi Arabian prince's doctor's son's Twitter shares. Like, what was I doing doing that? Well, I mean, you know, I would argue Omid kinda took that path with crypto where he kinda dove into that, you know, and and understood at a very early time. Well and and, also, because of all of our adventures and misadventures together and then my misadventures trying to be a trader and run a fund and stuff, It was a good hard lesson to not go the investment route or the money management route or the trading route with crypto because I tried it before and failed. And I don't mean just failed financially. I think, actually, like, my returns were okay. But the point that you just made, James, one of the things that dawned on me when I was in my late twenties about trading is that it's one of the few professions where you can work a 100 hours a week for a month and then turn around and be like, oh, shoot. I would have been much better off if I just went on vacation. And I might have been, like, wealthier. So I went on vacation and blew $10 on expensive luxury stuff because my trading ended up being a lot worse than that. So that's one reason I myself decided after that. Like, I never want to be in the money game again. I wanna do things where you wanna earn a living, right, and maybe even, like, make a lot of money. But the contribution that you make, whatever that might be, can be measured in some kind of a non financial way. I agree. Like, I feel like from 2000 to 2010, my sole motivation, and it includes a lot of the stories we've already talked about, my sole motivation was to make money. I didn't really care about the social benefits to what I was doing. I mean, there weren't bad social benefits, but there weren't positive ones either. My only motivation was making money, And even though we had a lot of fun times and happy experiences, I was pretty miserable most of the time. And then from 2010, I started writing my own story. I had I had cut back my expenses a lot because I was going broke again after the financial crisis, and I just was a lot happier because I was writing my own story instead of writing some stupid story about Apple stock or McDonald's stock or whatever, and that's what really catapulted me to more success is that people liked what I was writing, and it was helpful to people. It wasn't just, oh, here's a stock you should buy. And I wasn't managing any money. We were doing a lot of private investing, but it wasn't like an institutional thing, and it's just a much easier life. Even in the private investing, I feel like we've kind of trended towards companies that are having a positive effect in society. Right? I mean, it it's not that we necessarily looked for that, but maybe we did a little subconsciously, but it's turned out that a lot of our best private companies that we're invested in, you know, we believe in. And, you know, it's interesting. Our worst deals were the ones where we were greedy, where we said, oh, we could have this deal for ourselves. We're gonna take a third of the company. Yeah. And those deals would instantly go out of business. That's right. And also, any deal where I went on the board, those were always painful experiences. And then around 2014 or 2013, I refused to go on boards anymore. It was just too much work. It was too much headache. Yeah. We're not talking about altruism. Right? Like, it's not about whether it's, like, me, James, when you first started writing and blogging and then podcasting, you touched a lot of people. I remember back then, like, random people would reach out to me who knew I had once worked for you, and they were like, oh, you know, I I I listened. I read James's blog or read one of his books, and it really had a personal impact on my personal choices. I made a big career decision because of it or something. But the argument here isn't go out and do things that are good for other people for some moral or ethical reason. I think we're all agreeing that it's about the personal sense of satisfaction and fulfillment that you get doing those things, which to me particularly stand out in situations where you didn't make money. So, you know, like most of my angel investing, like any angel investing has resulted in nothing and the company's failed. But to the extent where I try to filter by only investing in people that I believe in, it's not as bad because I'm like, I lost a bit of money. That's what you expect most of the time, but so and so I thought was a decent person with a good idea, and I'm glad that I contributed to them trying something. Yeah. I agree. I think, you know, there's supposedly, in in positive psychology, there's 3 components to well-being, which is autonomy, which in most of the decisions you make are your own decisions as opposed to being ordered to do something. There's community, so how you get along with the people around you, and there's mastery. And I think when we were doing the Wall Street stuff, we had very little of all 3. Like, we didn't really have autonomy because we were just glued to the screens, and our investors were yelling at us if we had one tick down. And we were just we were prisoners to what we were doing. We didn't have community because Wall Street's not a community. It's just a horrible place metaphorically because it's not one place. And I would say, okay. There's an element of mastery in that we were getting better as investors, getting better at understanding. You know, I gave a a talk the other day at university about entrepreneurship and investing, and we learned a lot compared to what people who even major in finance graduate with. We learned an enormous amount about how the system works. But I wouldn't really call that mastery because it wasn't something I was interested in mastering. It wasn't something that, you know, the very first time I went into business for myself, I was at HBO and I left HBO to to make websites, but I really just wanted to make a TV show at HBO, and but I kind of got sucked into doing this because there was money there. I I loved the Internet stuff, but there was so much money, and then I had to, you know, once you get into that, it's hard to pull back even though you I hated every moment of being in business. Yeah. The thing I'll touch on that that I thought about when you just said those 3 kinda tenants, for me and I think for all of us nowadays, the autonomy is is everything. Right? I mean, I I think that's a reason why we do things the way we do it where we don't necessarily have a lot of clients or really none. I mean, we'll have friends every now and then co invest, but you don't have to answer to anyone. Right? You don't have to discuss a deal. We can look at a deal. As Omid said, if we like a CEO, like that CEO's vision, and we wanna back that CEO, we can do it. We can feel good about it, and that's that. We don't have to talk to a customer. We don't have to explain a return. We don't have to convince someone of a product or upside. It's it's that's refreshing to me. And you really focus on autonomy. Like, basically, after 911, you stayed in New York City a few more months, and then you cut the cord. Yeah. Like you moved literally back into your parents' house, into your parents' basement. That's fantastic. We were still working together, like all 3 of us were working together and you built up from that. And I also, I moved out of the city, like in order to cut costs, but you totally cut the cord. You never left your parents' basement. Yeah. No. And we're still doing all the same stuff, but for all I know, your office is still in your mom's basement. I don't know. It is still in my parents' basement. Why would I change that? Yeah. It it works. Ruth says we'd still live at my parents' if it was up to me with, you know, with all 4 kids, so Just to be clear, you live across the street. That's right. No. Wait. Wait. Now your how your new house borders. Yeah. Yeah. Your parents' house. So you did live across the street for a while, and then you made a big move. Yeah. Now you now your fence borders your parents' house. That's right. Because it was all it used to be your grandma's house you live in now, and your brother's house is next door to that. And that's because, I mean, I do. I think we see value in that. I mean, you talked about that, but there's it's obviously a personal thing, but it's just when you make an investment and you do the due diligence and you take a look at the deal and you try to understand it, there's something to be said where you make that commitment and you don't talk to anyone else about it. You don't have to explain it. You're not 2 years in where you have a bunch of people saying, what's going on? Why isn't it working? Or when are we gonna see an exit? There's a lot of satisfaction that you can make that commitment and satisfaction that you can make that commitment and realize a return. You know, we've done this for 20 years now. You really do eat what you kill. I mean, no one sent us a check for 20 years. No one pays for our health insurance. No one does any of that, and that's satisfying when you can do that. You know? And it's fascinating for me to pop on to LinkedIn every now and then. Right? And you just see the I mean, it's just relentless every day, just the connection. And I'm so proud of you at your new job that you moved up a floor at the corporation. And I I mean, it's just no one really likes that, do they? No one enjoys that. And the thing is also 55,000,000 people were laid off during COVID. So it's not like the job is safer than what we did. You know, it's a different kind of misery also. Like, you have corporate politics and so on. Well, only I mean, you went worked at a job. Like, you were the crypto guy at at Citigroup. Like, how'd that happen? Well, it happened like all great things in life also by accident that a friend of mine was working or or doing, like, a temporary stint at Citibank, which was a corporate VC arm of Citibank. And in his last week, he was like, hey. You just got a new book that came out. Some of my colleagues here care about crypto. Do you wanna meet them? And I only said yes because at the time, the Citibank's office was a 5 minute bike ride from where I live. So I was like, yeah. I'll I'll take a 5 minute bike ride. And then I met with someone and we had a nice chat. And at the end of it, she was like, you're hired. And I was like, for what? Like, I didn't even know what I was applying for. And she's like, oh, well, I need someone that can write about this stuff mostly and maybe take a few meetings and can hire you as a contractor and it pays x. And I was like, wow. Like, I write about crypto for free, and this bank is gonna pay me, like, $100 an hour to write articles. I'm like, sure. Okay. Did you ever show up at the office? I didn't think so. And then they're like, here's your cubicle, and I'm like, do I need to be here? They're like, no. But if you want to what ended up happening is what began as this, like, a side gig, just mostly writing, It ended up with me spending three and a half years there, and it was it was a great run. I work with a lot of wonderful people, particularly at City Venture, but also across the bank. And I got to do some pretty cool stuff just because crypto was weird and different and nobody understood it. So even though I was a contractor who wasn't even on the org chart, I got to be involved with some fairly, like, senior level decision making and learning and then to, like, firsthand witness all of the controversies about, like, everything pertaining to crypto, and it forced me to learn about how the existing financial system works, which was very valuable. I feel like too many crypto people just dismiss why, like, banks are the way they are. But if you wanna try to improve it, you need to understand it first. You can't dismiss it. All of that said, by the time I left, just because I'd been there long enough to be pulled into the bureaucracy and the politics and the endless Zoom meetings and working groups that designate other working groups to come up with action plans for a new working group. There is something personally for me that was so soul sucking. Even though the people were all great or 90% of them were great, but there was just something about being part of that, like, giant corporate machine that I will never ever go back to. I don't care what the job is. I don't care what the pay is. And I think, James, it goes back to your 3 models of happiness where, like, the bigger the company you worked in, the less of the first one you have. Because, like, you don't get to set your schedule. All the other people who wanna have meetings and whatever set your schedule. And then, frankly, like, I feel like if you work in finance, you're naturally going to have less of a sense of, like, fulfillment about the work that you did because the baker can always say, I baked the cake, and the teacher can say, I taught some kindergartners. But if you just worked on some new financial product, which might economically serve a very important purpose, I just feel like it's too abstract for you to take a lot of pride in and stuff like that. And I am amazed that, like, there are so many people out there. Because at Citi, I work with some very smart people whose talents and whatnot were clearly in demand in Fintechs and crypto. And I would have conversations with them about this and be like, hey. You know, you're a payments expert or a regulatory expert. And and Wall Street, people might not know this. Wall Street does not pay well anymore comparatively. Like, it's everything's been regulated to death. The banks are boring. They're not very profitable. Did Wall Street ever pay well? Yeah. I think leading up to the financial crisis, you could do very well. I mean, it was volatile. That was always the trade off. But what's funny is, like, now it's still volatile. Finance is just very cyclical, but the banks just don't pay that well. And if they do, it's in, like, deferred comp that you have to stay for years to get and whatnot. But I would have conversations with people, and I'd be like, hey. If you wanna leave, you can go to it doesn't have to be like a early stage startup. It could be like a Fintech that just raised money at a $1,000,000,000 valuation, and you have more freedom, make more money, and be doing more interesting work. But a lot of the people I met, there's something they found comforting about this, like, giant corporate bureaucracy that doesn't change much from day to day. Well, I've seen this a lot where if you work at a big corporation that spans the globe let's say Citigroup. It's worth tens or 100 of 1,000,000,000 of dollars. It has offices in every city on the planet. It flies its executives around in private jets. If you're staying in a hotel, you're staying in the penthouse of the writs in Tokyo or Hong Kong or whatever. So as you rise up in well, it doesn't matter if it's Citigroup or Reuters or HBO. If you're starting to get to those executive ranks, you're going to live like a billionaire without being a billionaire. So they do take care of their top people. They're not loyal to their top people, but they do take care of their top people whether it's through direct salary or through perks. And so I think that's the benefit of working and putting in the 20 years rising up at a large corporation if you can survive it. I'll say this, though. What's interesting about Ohmed's time at Citibank, which was which was fascinating from afar, is there was really no distinct role. Like, at those banks, you come in at a certain level, and it is pretty much projected how you're gonna move up. Right? Every 2 years, you get promote you know, but But what was fascinating, and it's because Omid had such a unique skill set when it came to crypto, is I mean, I don't know if I'm I'm allowed to say it or not. I won't say what some of the meetings were, but, I mean, Omid, you got pulled in on some meetings that were Oh, yeah. Enormous with global players that were out of this war. I mean, the largest global players you can imagine looking at the crypto space, and Omid's in a cubicle on the 27th floor, maybe with no windows. You know? And they're like, like, in terms of, like, dollars being managed by someone you were on the phone with, what's the largest phone call you had? Oh, it's there were sovereign wealth funds. Infinite. So there were there were there were 1,000,000,000 upon 1,000,000,000. But this this is actually, like Dan makes a good point about a important lesson that I learned by accident, which is, you know, like, Peter Thiel's whole 0 to 1 theory? Yeah. You can probably enumerate it better than I can. But it's basically like invent your own thing so you don't have to compete with other people. Right. And I think there's a career version of that because purely by luck and happenstance, I happen to be an expert on a very new and very confusing thing at a very old institution whose clients was everyone all over the world. And I learned this lesson that, like, you know, if I was a foreign exchange expert or, like, an analyst on energy stocks or even, like, someone that really knew the minutiae of how banks handle checking accounts, there would be 10,000 other people like me in a place like Citi, all of which or most of which would be smarter and more experienced. So now, like, I have to work my way up the list of 10,000 in order to be the guy who ends up on that big meeting. But literally, like, someone from some fund or client or country or whatever will call the bank and be like, oh, we wanna learn more about Bitcoin or what's going on with Stablecoins. And when I first started, I was, like, one of 5 people that would you know, I was on a list number. Like, that guy knows something, so I got these great opportunities. There was even one time where there was, like, a working group that was putting together a report to present to the board about, like, a fundamental potential shift in the bank's overall strategy with certain business lines. And the list goes out, like, here are all the people who are on this working group, and it's like so and so. Who's the group? Kistner, Olymala. The best is not only was I the last person on the list, but whoever put it together, like, didn't know my last name and didn't even bother looking it up. So so it was just omen x. That was it. It was like, you know, Jane Doe, John Smith, and all recognizable names, and then the last name on the list. That's And I was like, this is great. Like, can I can I now officially, like, have everybody at the bank? You need a T shirt with that list on. Right. OMID x. You know, but it's interesting. It's a generational thing almost because 25 years earlier, I was that person for the Internet for a company like Time Warner. Yeah. And, you know, because HBO was part of Time Warner, so I was the guy at Time Warner. There were like 10 people in New York City who knew how to make a website in 1994 and I was one of them, which made it natural for me that that was my first business, but I was an employee at Time Warner and nobody knew anything about the Internet, so I was helping every division make their own websites, internets, whatever. And, Dan, you were in the middle of these 2 generations. When you kind of came out of school, the Internet was already happening. Crypto and wireless hadn't yet happened. You were kind of just Yeah. Loading. There was there was nothing for you to be the expert in. That's why everyone at the time wanted to go to Wall Street. It was the best, safest route. And that's the thing with banking. Right? If you got in, right, there was a certain hurdle you had to meet. You had to go to the right school with the right GPA. But if you got in and you were just willing to put your head down and just kinda block and tackle and grind through it, yeah, you'll do well. You'll get paid. You'll stick around, but it is a brutal, brutal kind of long term path. And it's it's not prestigious anymore. Like, Dan and I are very close to age, so the thing I remember vividly is when I graduated college, the most prestigious job to land was that Wall Street sell side analyst program job, in part because the buy side didn't really exist yet. The whole, like, hedge fund thing and private equity thing hasn't taken hadn't taken off yet, so there were many jobs. And I will tell you now that I actually teach business school students, very few of them want to go work at a big bank. Yeah. There's no reason right now. Yeah. No. I can understand why most industries are not getting employees because, a, who's working as a marketing manager for Procter and Gamble anymore? Like, 0 people are probably applying for that job. And banking, like, when I hear Dan's horror stories about what he had to do working at a bank, it's awful. It's not worth the money, and you can make more money like you say over doing some Fintech thing or some crypto thing. I do think though, if one was inclined to start a hedge fund, now is the time to do it with crypto. The money's there. You don't have to have the pedigree because there is no pedigree for this. And if you have a a vision of the future that is is you think is correct and you can convince people of it, you should start a crypto hedgehog. And I have friends who've done it recently, and what is also interesting is that there is actually alpha to be had in crypto. You can't be too big. Yeah. Because nobody knows. Nobody knows. There's a because there's enough people now who there's enough people who disagree on crypto that creates returns. Disagreement creates returns. Everyone agrees Apple's a good company, so that limits the returns Apple will have. Some people think Tesla's the god of companies, and some people think it's just an average company, so that means Tesla might have some more returns in it. But the gulf between people who believe in crypto and don't believe that crypto even is a thing is so huge that spread makes for huge returns. And within the category of those who are willing to admit that it's an asset class worth exposure to, there is this fascinating bias that I've seen every day now. Like, companies would plow or funds or institutional investors would plow large amounts of money into some private startup that's doing something in crypto that has, like, hardly any revenues and already has a $5,000,000,000 valuation. And then I would be like, why don't they just buy Bitcoin? It's down 50% from its all time. And the one thing you can say about Bitcoin is it's probably not going away, whereas most crypto related startups, like most startups, will go away. And the most striking example of this was there were all these poorly run or downright shady crypto companies that blew up a few months ago. One of them was Celsius, the very badly run crypto bank. And there was a Canadian pension fund that had invested $200,000,000 into the overpriced equity of a unregulated, unregistered crypto bank run by tech people. And I really was like, I wish I had been in that conversation when they were making because, surely, someone was like, wait. Shouldn't we just buy Bitcoin? But I'm sure their response was, wait. No. No. We can't. If we buy Bitcoin That's too simple. Back. It's not even simple. It's it's like the regulators will have to explain to, like, the teachers whose money we invest, how, like, proof of work mining is not boiling the oceans, and then we don't even know what custodian we would use because the bank that we use for custody doesn't support Bitcoin. So all goes back to James's point. There's a lot of biased capital in crypto, and all you have to look and be like, there are too many people that are too limited in how they're willing to get exposure, which means all the other ways you can get exposure might be undervalued. Yeah. Alright. So let's start a crypto hedge fund, and we'll have crypto insane stories eventually to tell. So oh my god. You wouldn't believe this one investor and because the the crypto billionaires are also kinda crazy too. A lot of those initial crypto billionaires are crazier. I already have crypto insane stories that even, like, some of my some of my angel investing in crypto, they've been this roller coaster ride where, like, at any moment in time, it's not clear whether this is, like, a total home run that's the best investment I've ever made or it's a complete 0. And because of the rapid evolution of the industry and the machinations of the crypto market, I've already, like, been up and down 5 times. I'd be like, nope. 0. I'd be like, oh, wait. No. Huge home run. Nope. 0. Is it stressful to you? It's not for two reasons. 1, my general expectation when I do any kind of angel investing is that it goes to 0. I literally, like I have a spreadsheet where I write it down to 0 the day I make the investment, and it can only go up from that. That's the opposite. As soon as we make a 20 k investment, it's worth 4,000,000 on our spreadsheet. That would stress me out. But the other thing is 50% of my investing has to do with seeking a financial return. The rest of it is just as a as a professional educator consultant who works in this space. I use my investing to build my personal network. So there are situations where I will invest, but I'm like, it's a good company. I like the team. I think they could succeed. However, I think my personal brand and network would grow with an affiliation with them as an investor even if it doesn't work out. And that not only does it, like, derisk things for me in general, but psychologically, it makes it easier when I look at it and be like, oh, yeah. I lost money on that, but I have a good friend now who used to work at that company, and that might not have happened if I wasn't an early investor. Alright. Fair enough. That's a good way to think about it. Well, I think we've kinda gone through most of our Wall Street Insane stories. Yes. We have. I know there's ones we've missed, which we're basically not allowed to talk about, but other than that, I think It's been a good run. Yeah. I mean, there are a lot more criminals. If we just wanted to list the criminals, there's a lot more people we could've talked about. But some of those stories are basically the same as other stories. Just a lot of bad people doing bad things in a shady industry. And somehow or other, I mean, I don't even wanna say we were the most ethical people because who knows, but we never did anything wrong. Like, just by action alone, we were the most ethical people. I think in part because we just had no clue what was going on, that everyone was doing all this crap around us. We had no idea how diseased it was until later. Yeah. It's it's crazy. There's a lot of unethical and downright criminal behavior that goes on every day, but you just have to be kind of aware and do the work on it. And early on, we thought we did the work, but I think we got progressively much better at that as the years went by. Yeah. And that's why we had to get out of the business because we realized there was no safe place. Yeah. Like, I would never put my money in a hedge fund. But, again, in my take on all this with what Ooma was just talking about, there is probably a ton of alpha in the crypto space right now, but you're gonna find probably the most successful funds out there, and I don't mean success by return, but probably the biggest funds that, you know, have the most assets under management is gonna be whatever fund that can go to these other huge outfits, banks, institutions, that finally look at that pie chart and say, okay. We need our 3% crypto exposure. Who can we go to that we feel comfortable with? Right. And they just give $5,000,000,000, so a guy was gonna buy Bitcoin in that area. And so it's the same thing you see in the hedge fund space that we complain about, Right. Where all the brightest hedge funds that you say, oh, man. That that guy's a genius. And you see their top 10 holdings, and it's Apple, Microsoft, Google, Tesla, and you're like, wait. Why are they getting paid 2 and 20 for that? Those are just the 10 largest tech names or you know, that's gonna be the same in crypto. You're gonna see these huge funds, and they're gonna own Bitcoin, Ethereum, whatever the top 10 crypto players are. And I'm not saying there aren't always gonna be other funds that do something special that have an advantage or a skill set where they can create, but the largest players aren't even gonna mess with them. They're gonna say, just give us our crypto exposure. We know you're safe. We know you're trustworthy. You're doing it the right way, and we're done. And so that's why the upstarts, the young guys that are gonna come into the space thinking they can do something are probably gonna have these same stories we have 20 years from now because they're gonna be jumping around, and they're not gonna have the pedigree and They aren't trading on, like, Polkadot and Shiba Inu and all these weird things. Well, Omid, hook us up at Citigroup. We're we're We need that pedigree. We'll take in 20,000,000,000. The door's open at formula crypto holding. I was thinking more like, it's time to dust off your what was it? Was it your first book, trade like a hedge fund? Trade like a hedge fund. Yeah. Trade like a crypto hedge fund now. The some of the strategies like, the point that Dan made is already coming to fruition that there are more and more of these, like, passive crypto funds being set up where they're like, we're just gonna invest in the top 10 coins by market cap or something. Right? And there's a lot of reasons why that's just a dumb thing to do. But I think one of your things was the Russell 2 1,000 rebalancing trade. Right, James? Like, you buy the stocks that were being kicked out of the Russell and something like that. I bet that's gonna start working for crypto. Yeah. It already is. I mean, there's something called the Coinbase effect that if you could anticipate the coins that are gonna be uplisted to coin base, you'll make a lot of money. Doesn't work as well in a bear market, of course, but it works out of bull markets. Surprise thing that there have been we now know people who, like, in a insider trading kinda way. I'm literally talking about, like, I saw today that Franklin Templeton is launching a 2 different passive crypto funds that, like, RIAs can put their clients in. And it the it's literally formulaic. Like, every month, we will rebalance to make sure we have the top 10 it was like top 10 coins that are not stable coins or meme coins or something. Right? I would not be surprised just like the Russell 2,000 that there becomes a profitable trade if you're small enough that you're like, oh, at the end of every month, because of the rebalancings that go on, buy this coin and sell that coin, and you'll generate alpha. That's a good idea, Orlando. Alright. Well So new new book idea for you. Or new hedge fund strategy idea. Let's just keep our minds open. Alright, you guys. Well, thanks so much. We'll have to be insane. I think we'll have to figure out some other series to do after this, but I think that's most of our insane stories or at least the ones we're willing to share. So we'll have to figure out the next set of topics. But thanks again for coming on the show. I was listening, by the way, to trailer Jay Jay made, and it was refreshing to hear myself laugh so much because I feel like I haven't done that in a while. And this has been a a fun set of episodes. Well, thank you. Yeah. Thank you.