How Is Everyone Getting Rich While Millions Lose Their Jobs?! Pomp Explains

all right everyone what's going on i'm gonna wait a second here to get everyone in while people are joining before i forget please smash the like button on this video so more people on youtube will see it don't forget to subscribe to the channel and don't forget that i write a daily letter to over 50 000 investors i basically cover business technology uh finance and bitcoin can subscribe at pompletter.com all right people are starting to trickle in here so if you want to get more of this stuff go subscribe at pompletter.com smash the like button subscribe to the channel and let's kick this thing off the big news 52 million americans have now lost their job in the last four and a half months uh obviously that is a unfathomable number um there's a whole host of different reasons as to why 52 million of people uh have lost their jobs but it essentially breaks down to there's a global pandemic that led to a government mandated shutdown of the economy and when that occurred uh small businesses and large businesses alike couldn't support keeping those employees their revenue basically went to uh zero right in many cases and so essentially what happened is the us government stepped in and they have something what that i call bridge the gap stimulus so the whole idea was um there was a very abrupt disruption to the u.s economy and that was through that government mandated shutdown and their idea was hey this is going to last for three to six months and so if we can step in with monetary stimulus and fiscal stimulus and we can basically pump up the economy we can put money in the hands of the people who are going to be hurt we can do everything we can to kind of prop up that economic data we only have to do it for three to six months and then those programs can basically end and by the time that those programs are ending the economy will have been turned back on and kind of recovered and we'll be off to the races again so you can kind of think of this as a inverted um drop right or kind of a v where it drops down and then the belief was that you were going to get that v-shaped recovery and the stimulus would merely bridge the gap right and kind of keep people living the same life not suffering from that economic drop now the problem is that many of those monetary stimulus um you know efforts uh in that package are now running out so we're kind of at the three to six month range and as those programs expire it's very clear that the economy has not recovered and so there's been 2.4 trillion dollars of monetary stimulus so far that's been presented in that includes everything like the paycheck protection program which was hundreds of billions of dollars lent directly to small businesses the idea there was it's a low-cost loan in the worst case scenario in the best case scenario if you don't fire any of your employees and you don't dock their pay you then don't have to pay it back so it's a forgivable loan if you kind of follow all the rules there's also a 600 weekly beefing up of unemployment insurance so if you applied for un employment insurance you basically got what unemployment uh traditionally would pay you plus an additional six hundred dollars uh that ends this week um coming up and so july 31st is when that'll end the ppp loans uh those expire at the end of september where then businesses can go ahead and they can actually start to fire employees without getting docked and have to be forced to pay back that money so a lot of these programs are rolling off here kind of at the end of next week into the end of september mainly because the government thought that this would be over uh but it's not and so now we've got kind of this really weird situation where democrats have put forward a three trillion dollar stimulus package right if you go back and remember what i said in march right all the way back in march i said it's gonna take five plus trillion dollars for them uh to kind of get through this there's no way it's only going to be one two three trillion dollars so we've done 2.4 trillion the democrats have a three trillion dollar package that they put forward uh republicans don't like it uh republicans have kind of gone back to the drawing board they're trying to keep it around one trillion dollars but reports are when they unveil that package in the early part of this coming week it's going to look something like 1.5 to 2 trillion dollars now as part of that package there's two key things that that seem to be coming down the pipe the first is there will be more unemployment relief so you'll continue to apply for that unemployment insurance there's 52 million americans who have done that for the first time ever in the last four and a half months um but that unemployment will not come with 600 it looks like the republican plan is going to be somewhere more in the three to four hundred dollar range so they're really trying to get to about 70 of what you are getting paid at your job can they get that to you through unemployment insurance both with the traditional allocation or amounts but also with the federal uh beefing up um or kind of that additional capital and so if it goes from you know kind of uh 600 a week to three or four hundred dollars it's still some relief but it's obviously not the 600 that's going to expire the second thing is that they're going to put more money into the ppp program so small businesses can continue to apply for that now what we are starting to see is there are many companies who have started to lay people off right i think it's one of the largest oil companies in the united states they've uh proposed plans that they're going to lay off like 20 or 30 000 people if i remember correctly you also see um the airlines all saying you know 20 30 000 people that they are um kind of alerting saying hey look we are going to do mass layoffs um kind of in the fall uh and so you should go ahead and quit your job now uh or take kind of unpaid leave or go find another job and so it just feels like uh all of that bridge the gap stimulus uh they didn't bridge the gap it came up short because the economy hasn't recovered the coronavirus uh whether you believe the numbers or you don't uh it's very obvious that there hasn't been a reopening of the economy because of the coronavirus and so that's something to continue to pay attention to uh i do not believe that they're going to get a deal done by the end of this upcoming week it's a lot to ask and if they were to get it done if the republican proposal is 1.5 trillion dollars at the beginning of the week do not be surprised if it creeps to two and a half to three trillion dollars by the end of the week kind of there's almost this balance between the faster you want to get a deal done the more money that will get packed into it uh and really that's because it's easier to cave on things and if you're going to cave on something you're likely to cave on adding things rather than caving on taking them out um and so we saw that previously uh in that first bill uh the original proposal was like a trillion dollars ended up being two trillion dollars right um and so don't be surprised if kind of a 1.5 trillion dollar proposal ends up turning into two and a half to three trillion dollars um and asked this is all going on everyone's looking around saying wait a second there's 52 million americans who lost their job in the last four and a half months there's all sorts of stimulus packages getting um you know announced and executed why is everyone getting rich how is that happening how is the top 50 of americans getting rich we're seeing the stock market explode we're seeing housing all sorts of residential home sales explode and it's because there's a manipulation of the economy right they're stuffing liquidity into the market uh if you look at in the housing market for example the 30-year fixed-rate mortgage hit an average across the country 2.87 this past week so 2.87 30 year fixed rate mortgage well that is almost 100 basis points lower than where it was a year ago and so when you look at that number there's cheap capital available of course people are going to refinance of course people are going to leverage that cheap capital to go buy homes and so it's just manipulation yes we are in a recession but they've done a bunch of things in order to provide cheap capital so there's still some sort of economic activity happening right there's all these anecdotes all over uh the internet where people are putting their homes up for sale and they're getting four five six ten full price offers sometimes all cash sometimes higher than full price the median home prices have gone up in the united states this year right which is just crazy to think about during a recession and then obviously the stock market is just exploding now here's what's really interesting about the stock market so this week we have amazon apple mcdonald's starbucks a number of pharmaceuticals like merck and eli lilly all i think alphabet right all of them are going to report their numbers we're also going to get the q2 gdp number this week coming up and so these are absolutely essential data points to understand really what has happened and so we've seen two things occur in the s p 500 40 percent of businesses or i'm sorry the average loss in revenue is 40 so far so out of the companies that have reported the average loss in revenue or drop in revenue has been 40 yet 80 of the companies that have reported have beat wall street's expectations so you get this really weird thing where company everyone knows the companies are going to make less in money but if revenue dropped 40 percent stocks should be tanking except for the fact that wall street was actually expecting worse numbers and so the numbers are positive in light of wall street's expectations now this just goes to show once again that wall street analysts they do the best they can right some of them are incredibly intelligent it's really hard to do this stuff and they're usually wrong and so when you get 40 on average loss in revenue but that is better than the expectation of wall street you get stock prices going up you get a bunch of liquidity getting injected into the market stock prices go up and so this is all being manipulated uh in various ways so that you continue to see a stock market that's bounced you know 50 plus percent off the bottom the nasdaq has hit all-time highs if you look at the s p it's down just a couple of percent year to date and so this is an artificial stock market right there's no way that you're telling me that a stock price is higher today than it was before the pandemic but they're making 40 percent less revenue how does that make sense and then when you look at just a macro economy level 35 drop in gdp is expected 35 drop in gdp for q2 if that number comes out and it's actually only 30 don't be surprised if there's a positive reaction it means oh we thought it was gonna be really really bad but it wasn't as bad as we thought and therefore people get excited and stock market go up so it all goes back to what are you anchoring on what are you comparing these data points to and usually it's on estimations from analysts or expectations who put them in charge right and and that's ultimately the problem is people end up looking at the short-term price movements based on how did this come in based on analyst expectations rather than what is the holistic picture of the economy if you said to somebody there is going to be an average 40 drop in revenue for s p 500 companies there's going to be a 35 in q2 gdp this year the beginning of january and the stock market is going to hit an all-time high people would have laughed at you there's no way they would have thought of that right if they said that there was going to be a global recession but yet home prices were going to go up personal savings rate was going to go up personal income rate was going to go up the average um mortgage 30-year fixed rate was going to go down nobody would believe this stuff right and again it's because the federal reserve and the u.s government looked at 2008-2009 and they said what was the playbook how do we intervene in this market and artificially inflate it so that we can bridge the gap how do we actually prevent or mitigate damage until the economy recovers well as we know that there's going to be a day of reckoning and that day of reckoning one of two things happens either they are able to bridge the gap they can continue to put trillions of dollars into the economy and basically hold over or bridge that gap until the economic data recovers and we get back to a fully functioning economy with true velocity of money and kind of capital sloshing around in a more organic way and then they can stop with all the monetary stimulus or what's going to happen is that they're going to run out of bullets right at some point you just can't keep printing trillions and trillions and trillions of dollars and the economy won't have recovered and so all of these artificially inflated asset prices are going to have to drop to meet the reality on the ground of the economic situation now when that happens is anyone's guess obviously if they do not come up with a stimulus package kind of this coming week and the week after then you're going to have these monetary stimulus packages that were introduced back in march they're going to start to end and you're going to get that day of reckoning much sooner if you get this stimulus package which i believe will get passed and again i think it's gonna be somewhere in the two to three trillion dollar range which will put us over five trillion dollars total if that occurs you're basically just kicking the can down the road you're continuing to inflate this artificial asset prices and so we get in a really really weird world where you're going to have to eventually pay for your sins and one of the sins that we are committing right now is we are printing trillions of dollars and so we're going to pay for that three different ways the first way that we're going to pay for it is at some point the asset prices that are inflated eventually they pop or they drop and and there's all sorts of economic damage that occurs to investors who bought into these artificially inflated asset prices the second way that we pay for it is there's actually going to be incredible damage created by we are propping up businesses in the private sector that should shut down there's a lot of businesses that are bad businesses right that if the free market was able to operate those businesses would get wiped out they would go and the entrepreneurs and the investors would lose money but then we would get a re-allocation of resources and they would end up in the hands of better run businesses so the free markets not being allowed to operate right now and so it's basically if you go across the board and look at a lot of the businesses that are being propped up they're not good businesses and if they're not good businesses then you don't allow the free market to clear out the bad businesses to allow those resources to then get reallocated in a better business model or in the hands of a better operator entrepreneur so what occurs now is that's the second way that we're going to see damage is eventually those businesses are going to end up going under right you're just prolonging the inevitable and then the third is the bottom 50 percent of americans are going to get their wealth and their savings absolutely ravaged here and if you think about what ends up happening the wealth in a quality gap is not a bug of the system it is a feature and it is because when you print money in an inflationary system people who own assets stocks real estate gold bitcoin are you know whatever type of asset the price of those assets goes up and the value of the dollar goes down right peter schiff i saw him tweet the uh i think it was today or yesterday i thought it was a really good uh good point he said between 1790 and 19 and uh 1971 the price of gold basically oscillated between 19 and 20 dollars an ounce over 200 years it literally was about a dollar difference between the price of gold all of a sudden in 1971 to today the price of gold has topped 1 900 that's not because gold got more valuable it's because the dollar is being devalued if you look at the stock market since 1971 if you price it in dollars it looks like a directional 45 degree angle up into the right if you price that same stock market in gold all of a sudden it's basically flat the stock market has not gained more value it's the dollar that's being devalued so that is how investors who own assets quote make money it's because it will take more dollars to buy that asset in the future rather than less dollars right so they are acquiring u.s dollar value but the people the bottom 50 of americans who do not hold any assets right they have cash they live paycheck to paycheck and they can't come up with 400 emergency payment right it's about 45 to 50 percent of americans own those stocks they get live paycheck to paycheck can't come up with an emergency payment of 400 those people see their wealth right their savings although it's small absolutely gets eroded away because the purchasing power gets uh get gets eroded away and their check that they receive every week is worth less money although it's the same dollar amount so they're getting paid twelve dollars a week right or twelve dollars an hour um and that twelve dollars an hour ends up being the same twelve dollars an hour it was last year and next year but yet twelve dollars an hour actually bought you more goods and services last year it then it buys you this year and this year it'll buy you more goods and services than it'll buy you next year so you're actually making less and less money although your paycheck has the same number on it and so we are going to have this day of reckoning you cannot print trillions and trillions and trillions of dollars without any sort of economic damage and so the things to watch are uh there's going to be a fed meeting this upcoming week i do not see in any world than moving interest rates up if anything they may go down into negative territory that's a super religious uh topic there's a lot of people for all kinds of different reasons that would fight that um so my guess is that it stays at zero percent uh last time jay powell said we haven't even thought about thinking about raising rates so to me there is going to be throughout all of 2020 and into 2021 we're gonna stay at a zero rate environment and maybe possibly go into negative territory so i don't think we'll see that i do think you'll see a lot of commentary uh thoughts and ideas around the monetary stimulus because that is the only lever that they have left is they're going to have to continue to hit us with as much of the drug of monetary stimulus to keep the economy high right use the example in the past of the economy is basically um a drug addict right there it's a crack addict you got to keep getting a hit to stay hot that's what the economy does the economy will not run and cannot continue to operate in the way that we want it to without getting these shots of monetary stimulus but the monetary stimulus contingency continues to be bigger and bigger and bigger and bigger and so ultimately what you're going to see is you're going to see these trillions of dollars in packages you're going to see unemployment benefits extended you're going to see ppp money extended you i wouldn't be surprised to see another stimulus check directly to americans right um there's democrats who want kind of another 1200 bucks uh trump has come out and said that he wants something more than twelve hundred dollars who knows what it'll end up being but you'll get another payment directly to americans uh and then on top of all of that what you're gonna get is you're gonna get earnings reports coming this week so will the tech companies actually outperform right will you see amazon's revenue explode because everyone's sitting at home ordering things online uh will you see apple are more and more people buying stuff facebook if all of a sudden time on site and users exploded will you actually see that translate to additional ad revenue right we saw twitter have one of their best growth quarters ever and so i think that the the technology companies continue to outperform uh in this sector it makes sense everyone's sitting at home moving to the digital world of course the digital companies will will uh do very well and then all of kind of the non-digital companies or non-digitally native businesses they're getting destroyed right snp companies average revenue down 40 percent there will be people like in the airline industry where revenue dropped 80 plus percent and so i think you've really got to unpack what are the sectors that these companies are in how have consumer behaviors change how quickly will they come back and then holistically what's that gdp number is it above or below 35 contraction in the economy 35 contraction in a quarter is an unfathomable number 52 million americans who lost their jobs in 4.5 months unfathomable there's about 30 million americans who are on continuous unemployment right kind of they continue to draw unemployment 30 million americans there's about 155 million americans in the u.s workforce 30 million of them about one in five americans who are in the workforce are currently unemployed and pulling unemployment insurance week after week after week this is absolute chaos yet the stock market's up and people are getting a crash course and this is what happens in an economy when the federal reserve and the us government steps in they manipulate asset prices so we'll see how it ends before i start taking questions here um remember please smash the like button so more people on youtube will watch this please subscribe to the channel and i will put here in the comments i write a daily letter every single day uh to about 50 000 investors um and if you want to get on that list it's just pompletter.com so go ahead and subscribe uh and you'll get that email every single day uh please start asking questions here the only other thing that i had written down to talk about is uh i'm very interested to see how the virus numbers that are coming out uh in a number of states right there's been about a thousand reported deaths again we'll caveat this whole conversation around the virus with i can't tell you what the real numbers are i don't know if they're under counting over counting i have no clue i see the same anecdotal evidence that other people see of the numbers being wrong or inaccurate right there was a guy in florida who died in a motorcycle accident yet he's counted as a covid death but at the same time in new york there's a total number of deaths have increased but they don't understand where a lot of those deaths are coming from so who knows if the data is uh under counting overcounting all i know is we've got bad data we're making bad decisions because we're counting on that bad data and so if the hospitalization numbers that are growing in a lot of these states if those death numbers are growing what does that mean are we going to go back into some sort of soft lockdown are we going to go into more of a shelter in place across the economy we don't know but that's gonna be something to watch um so so keep uh keep your eye on that all right let me see if i can start uh answering these questions just fire away with as many questions as you got and i'll do my best i'll stay on for about 35 minutes and we'll try to run through as many of these um everyone is what are people doing their stimulus checks yeah look here's the craziest part of this entire situation if you look on robin hood for example when those stimulus checks went out there was very compelling data that showed a lot of people literally took their stimulus check put it in robinhood and started buying them so people were just trading in the stock market and if you look at when they did that they basically got those stimulus checks right at the bottom of the market and so you've got all sorts of the billionaires and hedge funds and wall street folks on television being like you know scratching their heads people are shutting down their hedge funds me like i don't get it the market makes no sense anymore um you know people saying hey we're down on the quarter right how is the stock market rebounded fifty percent yet people haven't made money um in the hedge fund world well let's be and it's because retail investors all they knew was i just got some free money and so they went and they put in the stock market and they've ridden this and is it a kind of enthusiasm fueled run absolutely in the kind of retail and day trading space but at the same time i would argue that actually what retail is showing us is they better understand the market dynamics at play then the professional investors why the professional investors are looking at spreadsheets and they're trying to estimate how much is uh this airline's revenue gonna go down and what retail investors are saying you see it all over the internet people are like dude the airlines aren't going away right they're not going uh we're never gonna not fly again and so you can sit there with your spreadsheet and try to time the market do whatever i just know that united airlines stock went from 80 down to 20 seems like a good time to buy and all of a sudden when it rallies they catch that rally right so you have to remember that just like in the startup world in in silicon valley we tell founders all the time you can have the best team and the best product but if you pick the wrong market or the wrong time you won't win right and there's a million examples of this but if you actually have an okay team and an okay product but you pick the right market at the right time it will carry you you will be super successful same thing here in investing is you don't even have to be the best analyst you don't have to do all of the kind of hardcore spreadsheet work all you had to do was understand the stock market dropped 30 and that is a pretty good drop investors bought in the retail space and as that stock market recovered they benefited from it and so you could argue that both the professional investor and the retail investor have never done this before no one's ever lived through a global pandemic that is investing in these markets and so retail outsmarted the professional investors but they were optimizing for two different things the professional investors were trying to time markets and the retail investors were simply getting exposure with free money that they had recently gotten so that's where we get where we are um let's see what else we got here well housing prices continue to inflate up in a broader economic decline due to the trend towards work from home and social unrest in big cities uh this is a great question um so basically the way that i think about this is there's two two key components uh you have the national averages and then you've got very uh region or city specific so compare the home price uh in the residential sector uh continues to go up you have mortgage rates coming down like i said 30-year fixed rate about 2.8 7 across the uh the country but then if you look in somewhere like new york city for example there is a plethora of uh supply on the market and prices are falling very very quickly and so how do you kind of reconcile those two data points well some of it is people don't want to live in in a place like new york city uh because in the beginning of the pandemic there was all sorts of kind of fear around the virus it was a hot spot it was it was going really poorly you get people who say look i just want to be confined in an urban area i want to move somewhere else uh you also get kind of the social unrest scare some people and then you and on top of all of that it's a very rent-heavy city right so actually what you end up getting is a lot of renters and much less buyers in a city like new york compared to other places and so i think that you've got to kind of look and say to yourself hey am i as an investor looking to benefit from the more macro national average and trends or am i very specific to a market so san francisco and new york are much more similar than let's say new york and the national average and so i think that's where people are starting to understand that outside of these major metros you're getting these housing prices uh inflating it's because there's cheap capital and again remember it's a fixed rate mortgage and so there's going to be long-term impact from a lot of these um these kind of things that people are doing right now but again time will tell kind of how long that happens i have been on record as saying that this work from home movement it would not surprise me whatsoever if you start to see two things one homes that are being built right new construction in the u.s jumped almost 20 percent in june now it had dropped because most construction was shut down in april and into may so it's easy to kind of have a big jump uh when you're coming off small numbers but it was almost 20 jump in the month of june and new construction in the united states a lot of that new construction people are going to start actually saying i only want to buy a home that has a legit home office right and maybe i actually need two because myself and my significant other we're both gonna work from home now what does that look like i don't know right as a kid i remember my friends and my parents and houses that we would look at whatever they would have kind of these home den offices right which was basically kind of like a small room uh it usually didn't have doors like fully closed uh and it was kind of like oh you can go in there and do some work it wasn't optimized for things like zoom meetings phone calls all that kind of stuff and so don't be surprised if you start seeing homes being built out with super legit uh offices they're promoting promoting or marketing the fact that hey this is a home specifically built to work and live in uh and then even uh seeing things like audio at home audio um all kinds of video and you know av type um work being done in a home so that it is optimized for working from home uh and then again one of the things that we don't know is are we going to see kind of just one big office or are we actually going to start seeing homes that come with two home offices so that you can live and work in the same place we'll see how that kind of plays out but i think that that is definitely a trend that people are going to uh to to um uh start benefiting from you'll see it in new home construction you may see renovations happening uh and then on top of that anybody who's got like an extra bedroom they may start converting those to home offices and as they market homes for sale that will be a big uh selling point um it's the fed they never run out of bullets that's definitely true in the sense that they can always do more of the same the question becomes and this is the wildest thing that i'm going to talk about today is the the fed has historically always said we have a two percent inflation target uh coming out of 2008 2009 they didn't come close to it uh right we kind of stayed under that two percent uh in terms of the cpi reported number the official number now i've talked in the past about there's a lot of studies that show not everyone has the same inflation or experience the same inflation so if you kind of break down the socioeconomic ladder into five separate buckets the bottom 20 percent in many cases there's reports that show they may have been experiencing eight to ten percent inflation coming out of 2008 2009 crisis now the official cpi number never hit two percent but when you get kind of eight to ten percent for the bottom 20 then obviously that's something we've got to pay attention to so when the fed can't run out of bullets they are now talking about the dead uh the i think it's the dallas fed president came out and said that he actually is not worried about inflation at all he's not going to worry about until we hit 2 or even overshoot it a little bit there's a lot of countries around the world who have said oh it's okay if we go over our uh target and the next thing they know they lose discipline and they end up actually destroying their currency hitting hyperinflation all kinds of bad things now i'm not claiming that's going to happen in the united states but what i am claiming is that the rhetoric and the discipline that we typically are able to plant a flag in the ground and say you know the united states is a leader in this area is starting to decay away right that rhetoric is starting to actually be a little scary the discipline you can see them starting to do things that are not as disciplined as they have been in the past and so does that ultimately lead to some sort of bad economic situation history would tell us that yes it inches us closer now are they going to have some sort of hyperinflation situation next three to five years i personally don't believe that's going to happen i do believe that we will have inflation and even see something over two percent uh and definitely in the unofficial numbers we could see 10 plus percent in certain socioeconomic categories but it's something to keep paying attention to is why all of a sudden are people at the federal reserve uh talking about overshooting the two percent target well they understand they're printing trillions of dollars that's what's going to happen and so again if you go back to the framework to be an investor in this market you don't have to be a genius all you have to understand is the macro structure of an economy and the macro structure of an economy is if we print tons of money and devalue the currency asset prices will explode and it we're literally looking at we're right uh kind of on the cliff and we're looking at are they going to stop printing money or are they going to continue if they let these monetary stimulus package uh programs from march run out that means they would stop printing money you'd receive a big contraction the federal reserve's balance sheet but that's unlikely right we know the republicans are going to unveil a monetary stimulus package at the beginning of this upcoming week we know the democrats put forward a three trillion dollar plan previously so we are looking at whether it's the republicans or the democrats a trillion to three trillion dollars in proposals by the time they get these things settled again i believe that we're gonna see you know call two two and a half three trillion dollars in a package and so if there's going to be much more monetary stimulus coming down the pipe it is likely that they will continue to inflate asset prices over the coming months and so a lot of people saying hey the stock market's had this you know incredible run uh there's no way that this can continue oh yes it can absolutely it can and structurally if they continue to print money you're going to see asset prices explode right and so i think that's something that people have to understand to stop looking at you know did the uh revenue of a business go down well of course it all went down there was global pandemic the government shut down the businesses but if there are just pumping money into the economy the actual fundamentals of the business don't matter for short-term price movements now again where that balance comes back right and this is i think where the professional investors are scratching their head saying what do you what's going on here is there's going to be a day of reckoning where we shift from the macro structure being more important than fundamentals to okay the macro structure is evolving or transitioning back to not as much money printing and the fundamentals will become more important on that point there's likely to be kind of the pullback in prices but again the macro structure is built over a very long period of time that 45 degree angle in the stock market if you zoom out over decades is because of the inflationary nature of the currency so keep going uh people who are working will start to complain why work 40 to 60 work weeks 40 to 60 hour work weeks while others essentially get a vacation for 70 of the pay ubi is coming so absolutely we saw this back in march in april there was plenty of employees who were going to their employer saying dude just fire me like i'm gonna make more money on unemployment than here but you've got to fire me and so i think that we kind of already had one whole um you know iteration of that it would not be surprising to see a second iteration of that uh the the thing i'm less worried about is um kind of essential or these workers complaining and asking to be fired uh because we kind of already had the first iteration what i think is more important to pay attention to here is essentially this beefed up unemployment insurance is a very watered down poor man's version of ubi right it is the government supporting a um tens of millions of americans and then when this you get the stimulus check i think they sent the stimulus checks in the first round over 100 million americans so about one-third of our population now if they do a second one again watered-down temp temporary uh poor man's version of ubi so in a world where 10 years ago we could never imagine ubi coming to the united states now we're actually inching closer and it's almost like we're testing it right we're we've got early iterations and we're saying oh does it make sense to call it unemployment insurance and beefed up what about if we call the stimulus check they're testing the waters they're seeing what works what's the impact how much like all of these things i have no doubt over the next 10 to 15 years we will have ubi implemented in the united states right now whether you call it universal basic income you call it modern monetary theory you call it something else right you call purple cows whatever you want to do all i know is that the government is going to continue to support citizens more not less i don't agree with that right i actually think that's like horrible idea but that is what is likely to happen because again it is in the interest of politicians to continue to give more things to people because it sounds good people like the safety they feel like oh they're helping me but it is absolute political suicide for a politician to take this stuff away later right so you get in a really really weird world where i am incentivized to give you more things not take them away and the number one thing that i can do that gets you all excited is i can give you money and now there's precedent for doing it and so it starts in times of crisis but again never let a crisis go to waste right it would not be surprising to see this become something that isn't as temporary something that is much more um kind of permanent in nature and so i absolutely think that ubi modern monetary theory whatever you wanna helicopter money whatever you wanna call it it's coming i don't know if it is like a 2020 implemented for the long haul type thing but over the next kind of three to five years i think that we we start to see the actual plans uh being implemented and then kind of 10 to 15 years uh it's something that's just you know people who are growing up in the workforce at that time they don't know anything else they just have always known that the government will give you a paycheck uh which is pretty crazy and so uh yes real people need money to survive if this continues to be riots and revolutions so here is one of the things that i know will be a very divisive issue so i'll just call it out right now uh again there is a um a difference of opinion between people who believe that the government should intervene and should manipulate and artificially prop up the economy and people who believe that you should let free markets reign and kind of let the economy do what it's supposed to do now those two groups are optimizing for two very different things right the group that believes that the government should step in they're optimizing for mitigating short-term pain right they and the federal reserve's job in some cases is to look at jobs right is if people lose their jobs in the short term then the federal reserve feels like they're not doing their job and so now you get somebody who's optimizing for short-term decision-making and worrying about long-term implications later the other group the free market group believes that look there will be short-term pain but over a long period of time this is a better system it mitigates damage long-term and actually creates a more robust uh kind of secure sturdy economy over a long period of time and so both of those groups are actually right right that's the part of the divisive conversation that no one wants to admit both groups are right if you want to optimize for short-term pain mitigation you should allow the government to step in and print trillions and trillions and trillions of dollars and they should stuff it in every nook and cranny in the economy they should give money to businesses they should give money to individuals they should bail out local state and and the local and state governments they should bail out every single corporation they should do all that stuff right that's how you mitigate short-term pay but obviously there's a price to pay for that stuff over a long period of time so they're correct in if you want to optimize for short-term pain mitigation go ahead and let the the intervention to happen on the flip side of that argument the free market folks they're correct as well that if you allow the free market to rain then you will have short-term pain but you have a much sturdier secure kind of sustainable economy over a long period of time so what ends up happening is when people have this debate you've got to ask them what are you optimizing for are you optimizing for short-term pain mitigation or long-term uh sustainability the correct answer in my opinion again in my opinion is you should always optimize for long-term uh sustainability right you can do things in the short term that can mitigate some of the pain but there's going to be pain right it's like saying to a business hey you you raised money uh you have a product that products not selling very well you're spending much more money than you're making and you've now been doing this over and over and over and over again at some point you got to shut down the business you spend more money than you make and you gotta shut down the business but if all of a sudden the government steps in says no we're gonna give you more money right we're gonna give you more and more and more and more money you can actually prolong that business for much longer you can artificially prolong it so that now those resources those individuals all of that that capital ends up getting sucked up by an inefficient non-productive business if the free market allowed you to clear out that business would people lose their jobs absolutely but then they would go and find jobs at something that's much more sustainable right and again you have to look at what are people optimizing for people who want the government to intervene optimizing for short-term pain mitigation people who want the free market to kind of take over they're trying to optimize for long-term sustainability both arguments are right absolutely fine no problem with it you just got to realize what do you as an individual where do you come out on that debate not so much around should the government intervene or not but what are you trying to solve for you're trying to solve for the short-term pain mitigation or that long-term uh situation so socialism for the rich they are showing us that they generally do not work for us they're about to buy up our assets with our money so this is by far uh probably the biggest thing that people miss in my opinion about all of this is i've got a friend travis kling who who said that um monetary stimulus or quantitative easing is just ubi for rich people right quantitative easing is just universal basic income for rich people and what that means is when you print a bunch of money and you inflate asset prices what you're doing is you're bailing out the rich but when you bail out the rich everyone looks at the asset price inflation and they know the top 50 of americans own those assets so it's very clear that you couldn't bailed out the rich but the flip side of that and a really important point is inflation like that through this quantitative easing is a massive hidden tax on the bottom 50 percent and so what you're literally getting is the rich are getting richer faster and the poor are getting poorer faster and so this socialism for the rich it's not just socialism for the rich it's actually socialism for the rich and a punishment for the poor and so what we are seeing is a government that is optimizing specifically to bail out the rich and punish the poor and they come at it with oh we gave you 1200 okay you gave the the people 1200 but there's the billionaires in the united states made over half a trillion dollars so far half a trillion dollars during this crisis they've gotten richer i think it's like like just over 500 billion dollars how is that possible well it's because they're getting bailed out by the government because the government is printing so much money and they're inflating asset prices so socialism for the rich punishment for the poor that is what is going on people can debate whatever they want but at the core that is how we get in a world where there's a massive wealth inequality gap and again i go back to that's not a bug of the system that is a feature now what you at home can do is you have to get educated right you've got to understand how the system works so that you can position yourself so one that you're protected so you don't want to be punished with the poor and then you want to position yourself so you can benefit with the rich right why is it that the rich people aren't walking around with all cash well it's because they understand by owning assets that's how you continue to build wealth well why are all the poor walking around with a hundred percent of their wealth and cash not being able to pay for or living pages to paycheck it's because they haven't been able to save the money and invest it in order to get out of that situation right that is a structural issue now i've got a whole bunch of ideas as to how we actually solve that issue but if you are sitting watching this right now you've got to understand this is the system that i'm in here's the rules of the game if i want to win this game i've got to use the rules to my advantage i can't sit around with cash because that's going to get devalued uh today and in the coming years and i've got to get into assets where the asset prices are going to get inflated what those assets are we can get into kind of all the details there but that ultimately is what is is going on um all right keep asking your questions uh and um smash the like button subscribe to the channel i'll put this in here again if you want more of this content on a daily basis please subscribe to uh the email that i send every single morning 50 plus thousand investors end up reading it i put it i typed it wrong because i'm an idiot so if uh you can go subscribe and i will uh send you an email every morning uh what other questions here uh trade your fraudulent fake dollars for silver gold and bitcoin and then ignore the propaganda uh yep so basically uh let's talk a little bit about inflation hedge assets right so real estate gold silver and bitcoin um when i look at this these are some of the most attractive assets to me right now right and why is that so again when you look at the gold price it went from twenty dollars to one thousand nine 900 all because the dollar has been devalued bitcoin this year is up 30 35 it's the best performing asset class uh in the us this year why it's because the dollar is being devalued right bitcoin hasn't changed at all right there was the having but nothing's really changed with bitcoin the dollar is being devalued asset prices are being inflated so ultimately i think that the four really interesting uh assets to look at real estate gold silver bitcoin now me am 32 years old i have an incredible uh risk tolerance and i have in my head a very specific amount of my wealth that i'm willing to lose to go to zero right and so i choose to take that risk capital that high percentage of risk capital because of my age because of my lifestyle because of my risk tolerance and i choose to invest in what i believe out of those four assets is going to be the highest performing uh of them which is bitcoin right so kind of paul tudor jones uh famously in the last couple of months decided to take two percent of his assets and put it in bitcoin and in the letter where he talked about it he said the reason why i am doing that is because i believe that bitcoin will be the fastest horse in this category right and kind of the inflation heads assets so real estate will go up gold will go up silver will go up but bitcoin will go up more than all of them mainly because it's the smallest market cap so it's only about 200 billion dollar market cap today and it's hyper volatile so when volatility works against you and drawdowns right bitcoin dropped down 50 percent in a single day earlier this year gold dropped 12 to 15 equities down 30 um and kind of real estate uh kind of stayed really flat frankly um but now also when you go back up and and you get the inflation of asset prices gold's up you know 20 or so uh you're going to see equities up right but now all of a sudden what you're going to see is bitcoin is the best performer because it's the most volatile it's the smallest market cap and so that's what i've chosen to do with my wealth and why i've chosen to do that is because gold silver real estate and bitcoin are all inflation hedge type assets but i believe bitcoin will outperform the rest this is not financial advice there's risk go do your research but that's why i've chosen to take a percentage of my wealth and do that again i'm 32 years old i've got high risk tolerance i'm willing to lose the money that i've put in so that is kind of how i think about it now when you look at those other asset classes right when it's real estate and precious metals precious metals are doing pretty well this year it gold's up by 20 and i believe it's going to continue to go up right i just don't think that you're gonna see a four thousand dollar gold price in the next two years right i could be wrong i would i would love for all of my friends who are gold investors to be wrong and for there to be a four thousand dollar gold price i just don't see that happening i see gold continuing to kind of grind up and maybe i i think uh back in like march or april i said that i could see gold hitting kind of 2000 to 2500 over the next two years i still kind of think like that's a pretty good target for gold to get to but maybe i'm wrong and i underestimated and it goes higher but but i do think kind of 2 2 500 would be interesting now when it comes to real estate we're seeing residential home prices go up right now doing something like buying real estate manhattan some of the prices of the real estate is actually all-time lows right or or in kind of local lows not all-time lows but local lows and so what that means is there's been this massive sell-off in prices and so people who are have the capital base can come in be opportunistic being uh intelligent about how they buy and where they buy and what they buy they're gonna end up making a lot of money over the coming years remember when you make investments in real estate majority of the returns you will receive is based on the price that you pay at the time you buy it right if an asset is worth a million dollars and you pay 950 000 you bought it for 50 000 less than it's worth if you bought it for a million five fifty thousand you paid fifty thousand dollars more but if we buy the same asset and i buy it at seven hundred thousand and you buy it at nine hundred thousand of course i'm gonna make more money i bought better than you did right so the price you buy the asset at is gonna be that one of the major determinations of what's the actual return uh financially you're gonna get out of that asset well if asset prices are down there's nothing that has changed with the assets in new york uh in terms of the actual assets themselves over the last five months now demand has shifted and because demand shifted prices drew down but if you believe that people want to live in new york city over the coming uh you know decade or two and that actually is going to return to more normal levels and even potentially go higher then of course buying at low prices would be a smart decision now if you believe that you know new york's over no one wants to live in new york anymore uh this whole virus and pandemic thing is gonna get everyone out of um uh kind of urban areas and uh all of those people are gonna move out and demand actually be lower in 10 years than it is now then maybe buying here is not a good idea but that's the type of calculation you've got to look at and so i think that um real estate specifically i see a lot of people saying hey i want to go get into real estate right now because i see prices down the price you pay is going to determine the return that you get and so you got to be smart about the macro trends right is the place that you're buying it something that you see demand being higher or lower in five to ten years and then what's the price that you're paying and then look the other thing is use the financial incentive there's a 30 year fixed rate mortgage national average of 2.7 it's 100 basis points lower than it was a year a year ago you have access to cheaper capital of course there's people who are gonna be excited about that and they're gonna use it to their advantage so i think that people should absolutely um go ahead and take it take advantage uh bill pulte what's up man if you guys aren't following bill on uh on twitter you should absolutely be following bill pulte he's doing a fantastic job i see him here in the comments um let's see what uh what other questions do uh do people have um if you're ju if we're judging value of these assets against dollars what's the point at what point do you want dollars when they keep devaluing so manuel that's a great example a great point which is um again if you go back to the stock market since 1971 and you say okay the stock market is priced in dollars it's up a lot if you price the same stock market in gold it's about flat just a little down if you do it in bitcoin since 2011 it's down uh significantly and so it's all about what is the asset being priced in dollar is obviously the global reserve currency and so everyone chooses to do that um and it ultimately is going to be something where how do rich and wealthy people get rich and wealthy they buy assets and they hold them for very very long periods of time right there's basically two strategies so this is actually an important point there's two strategies to get rich in the united states all right well three you can inherit money but none of us can control that so throw that out the window the two things that you can do to become wealthy in the united states are one you can buy assets that are priced in dollars and hold them for very long periods of time and when that happens those assets will actually increase in value because the dollar is being devalued so whether it's again real estate gold stocks bitcoin whatever it is over very long periods of time you'll almost get this like 45 degree angle straight up into the right uh because the dollar is being devalued in a very kind of um intentional about one and a half two percent a year and that's what drives that price inflation so that is one way is get out of cash get assets hold them for a long period of time the second thing you can do is invest in innovation so the most innovative companies in the world drive the most returns right again innovation leads to financial returns now there's two ways to do it public markets and private markets right public markets there ends up being a lot of people who make a lot of money by investing in something that's innovative and the stock price goes up but the susceptibility that people have is that they end up selling if the price doubles or triples so they buy a stock let's say it's trading at you know 50 bucks it goes to 100 they sell or they buy it at 50 bucks and it goes 150 bucks they sell it well all of a sudden that stock over 10 years goes from 50 to and they don't hold it for a long period of time because in that case liquidity actually can serve as a detrimental thing right the fact that you have the liquidity means that human nature can take over you feel great you just made a bunch of money and so rather than press your winners meaning that it goes from 50 to 100 and you invest more you goes from 50 to 100 and you sell right and then you miss majority of the of the increase in value but innovation drives returns now in the private market the illiquidity actually serves as a benefit in many cases right if you go and you talk to an angel investor and you say hey you invested in uber at a 5 million valuation when it was worth 50 million dollars would you have sold with hindsight bias they say no absolutely not i knew it was going to be a multi-billion dollar company ah you made 10 extra money are you sure you wouldn't have sold what if when it was trading at 500 billion or 500 million dollars and you had made 100 x would you have sold no no i never would have sold no no way i don't know right and so when you then kind of look at it as it goes up and up and up and up at what point would they have sold if there was liquidity there's very few people who could have held from five million dollar valuation up to you know whatever it was 40 50 billion dollar valuation and so the illiquidity actually serves as a benefit in those scenarios so you've got to be able to understand if i want to be wealthy what are the two things i can do buy assets priced in dollars hold them for long periods of time and allow kind of the structural system to actually drive my returns rather than me be the genius or i can invest in innovation public or private markets and i've got to be right and i've got to be early in order to capture significant upside what do most people do they say well why don't i just do both why don't i take a percentage of my portfolio put it into assets allow that system to kind of not get rich quick but get rich for sure and allow the structure of the system just to make me wealthy over many decades at the same time i'm going to invest some percentage usually a smaller percentage of my net worth into innovation that could be through venture capital private equity public markets whatever it is and then that's where you try to to really hit kind of outsized returns so that's how these portfolios are built go look at all of the wealthiest people in in the country that's basically what they did now they supercharge that strategy with an additional thing which is the innovation that they invest in normally is innovation that they're in that they own right so they own equity in their own business and the reason is because rather than put a couple hundred thousand dollars into something you know a very small percentage they say i'm gonna create this value and i'm gonna own a very high percentage of it right whether it's majority or a large minority position and that's how they create wealth and so ultimately if you understand those two things you can position yourself to be wealthy um all right what other questions uh what other questions do we have here um people are asking i just see a bunch of questions about bitcoin um basically the whole idea behind bitcoin is so far uh it's up like 30 35 this year it's the best performing asset um or asset class uh it's you know stocks are essentially flat uh you've got gold that's about twenty percent bitcoin up thirty thirty five real estate um in many markets is trending upwards but but still bitcoin is outperformed and uh in june of 2019 right so let's go back this is this is my uh victory lap a little bit this is me uh with my internet receipt so in june of 2019 i wrote a piece that said i believe that we are heading into a scenario that is going to be rocket fuel for bitcoin and that scenario it needed three things to occur we needed a significant decrease in interest rates we needed large printing of money and we needed the bitcoin having in may of 2020 to execute correctly we've got all three of those things that have happened i did not believe that we would see zero percent interest rates or that we would see two emergency cuts to drive interest rates to zero i did not believe that we would get trillions and trillions of dollars of monetary stimulus but i did believe that we would get the bitcoin having to execute successfully so i thought we'd get a drop in rates not zero but a drop and i'd see printing of money but not trillions of dollars so really what's happened here is we've gotten a way bigger drop than i thought we've gotten way larger amount of money printed and we had the successful bitcoin having there could not be a better scenario over the next 18 months for bitcoin to be walking into i believe it is absolute rocket fuel for bitcoin's price because you have a macro environment that is providing all of the ingredients for this asset to explode in u.s dollar value right again it is the most volatile of all assets and therefore because of that volatility when it goes down it works against you when it goes up and you're long it works for you and so that's my entire thesis around bitcoin is that we are going to see an absolute explosion in the u.s dollar price right i'm on record again there's risk do your research this is not financial advice but i am on record saying uh back in january i believe it was that we would see bitcoin go from at the time about ten thousand dollars to over a hundred thousand dollars by the end of december 2021 so the end of next year seeing a bitcoin price of a hundred thousand dollars or more today we said about 9 500 right so that's kind of where i think everything's going we'll see what happens there um but i think it's very very interesting um okay there's a question about would you say a young person starting their career should mostly do high risk high return investments like crypto tech stocks etc so i think that there's two things that young people should do right and the way that i would do this is uh if i was going back let's say i was 20 i actually have a brother who who's about 22 23 year or maybe 24 years old at least 24 years old uh and so at 24 um we just went through this exercise and we were talking about all the different investments that he could make and what i said to him was i said listen the amount of capital you have right now is going to be immaterial in your life right it's nowhere near what you're going to have in the future and so today you should take as much risk as possible with that capital because it is likely that if you lose it it won't matter over the long run and if you're right it actually could grow into something important right and actually be meaningful in your life now as part of that as you get older you should start to go from 100 high risk zero percent um kind of low risk to maybe you go eighty percent high risk twenty percent low risk right and so kind of there's a continuum as you get older and older could be you go from your early to mid twenties to your late twenties right and now you say hey look i'm actually thinking about getting married i don't think about starting a family or i've got other things that i want to worry about buying a house uh you know traveling whatever then maybe you start to say okay you know what i'm gonna take 20 of that uh high-risk capital previously and start diverting that 20 to an s p and let it compound over time right but right now when you're 22 23 24 years old or even in 18 or younger right there's a whole group of people that will say oh you should let compounding work for you you should let the stock market have eight percent kind of uh annualized um compounding work for you absolutely but i am of the belief that you have to invest in innovation in order to drive financial returns and there's a way to get rich but there's a difference between rich and wealthy right and being rich just means that and this is gonna sound crazy right but in america being rich is like having a million dollars when you uh when you retire right that's great most young people when you're looking at it and you've got a couple hundred dollars a couple thousand dollars you say wow if i had a million dollars i'd be rich in the grand scheme of things having a million dollars is not that much money in today's society right a million dollars today when you fast forward five ten years from now is going to be a lot less because again if it's in cash the purchasing power of a million dollars is gonna deteriorate significantly so a million dollars may seem like a lot today but five or ten years from now a million dollars is going to be worth much less and so what you've got to be able to do is you've got to understand do i want to be rich or do i want to be wealthy and if you want to be rich let compounding go to work for you right but if you want to be wealthy and i'm talking about tens of millions of dollars and you're young the way to do that is to invest in innovation so you can take capital and you can deploy it into highly innovative things most young people actually have a better understanding of what is innovative than older people right if you went you talked to a lot of young investors um kind of you know two years ago and you said hey is electric cars gonna be a thing in the future they'd be like duh every car is gonna be electric right or if you ask them uh what about cash app and square right they'd be like of course like i use that all the time with my friends so there's all sorts of things that young people understand because it's part of their daily life that older people have a hard time analyzing and kind of identifying so you know the things that are innovative by investing there you can drive outsized returns the second thing you can do as a young person is get started early right so again the number one way to get wealthy in the united states is to own equity in things whether you're an investor or you're the builder why not do both invest capital and start a business that business doesn't have to be a venture scalable uh venture capital type business where you got you raised millions of dollars and it's got to be the next you know facebook or instagram or google or twitter or whatever you can have a great business where literally it throws off half a million dollars in cash a year in terms of net owner earnings and if you invest that capital correctly you'll be worth tens of millions of dollars by the time you're in your 40s and 50s so you don't have to necessarily hit grand slams you can hit singles doubles and triples and it's all about the cash flow in those businesses rather than the um equity value right so i think that there's a whole bunch of things that young people can do i tend to think that the idea of diversification is horrible advice right if you talk to a warren buffett for example um he him and charlie munger on record is saying that uh diversification is for people who don't know what they're doing right and concentration builds wealth diversification protects wealth right so if you don't have money going and being in a highly diversified portfolio that's going to make you between five to eight percent annualized at 18 to 22 years old is stupid it's literally stupid and anyone who tells you that's what you should do doesn't understand how to actually build wealth right if instead they said to you you should go and um do a lot of research and work and either create a business where you've got highly concentrated uh net worth in a single asset and grow that asset or you should make investments and things that you think are highly innovative that you've done the work right analyze the risk and if you're right it will grow that concentration is what's going to build your wealth the diversification later when you have money that's where you'll actually end up protecting it so i think that you've really got to to understand that um i see people asking where plina is uh she literally is taking a nap right now uh probably because she knew i was gonna come through this and didn't want to be annoyed um all right i'm gonna take uh five or six more questions here what else uh what else do you guys have um yes jeff bezos almost doubled his wealth after he gave his wife uh like 30 billion dollars right if you understand that i mean that's insane he's the wealthiest guy in the world and he gave his wife or ex-wife i guess at this point 30 billion dollars um absolutely uh nuts um people like to look rich more than they like to be wealthy don't be that uh marlo yeah look this is one of the things there's a picture i've talked a bunch of times about um of jay-z that's not that floating around the internet and basically uh there's two pictures of jay-z one of them on the left is uh jason's got all the chains and the earrings and you know all kind of the the symbols of wealth a big watch all that kind of stuff and it says jay-z net worth 100k and then on the right side of the image it has jay-z and just a black t-shirt with a blazer on and it says jay-z net worth 100 million dollars and throughout my entire life the richest people i know don't act like the richest people right and it's because they understand why do i need all the flashy flashy things now do they spend money absolutely they got a lot of it right so they'll do things they'll buy a nice car they'll buy a nice house they'll do all that stuff but what i mean is they don't do it over and over and over and over again right i i've got friends who literally will say hey this year i'm going to make five million dollars and i promised myself every year that i hit a five million dollar target i'm gonna buy myself a nice car and i have a budget up to 250k a lot of people say wow you're buying you know 250 000 car well they made 5 million so actually on a percentage basis like that's pretty cheap in terms of a small amount of capital i've got friends who they make 150 000 and they literally spend a hundred thousand dollars every year on nonsense right and social how do you do that once you take taxes out and all this kind of stuff well they end up going into debt and so what you have to realize is it's all relative there is no kind of one simple uh you know uh silver bullet for all this stuff but there are many lessons over history that have shown people how do you build wealth how do you accumulate that wealth and then how do you actually make sure that it's something that will continue to grow over long periods of time and you don't have to worry about uh any government forget just the u.s government any government eroding away your wealth and savings by just printing money like they're doing um all right two more questions let's see uh robotics uh yeah so here's the thing and i see people talking about ark and kathy would know them so as many people know i've interviewed kathy wood from arkanvest twice on uh on the podcast uh she's probably one of my favorite investors on wall street because she understands that's where innovation leads to returns um i personally have a very deep conviction in robotics uh mainly for two reasons one is uh the virus has shown us that we're gonna have to nationalize uh not nationalize in terms like the government take over but we're gonna have to bring back a lot of supply chains and manufacturing facilities to the united states if we do that cost will go through the roof because american labor is so expensive and so it is going to have this resurgence in 3d printing robotics all sorts of different things that can help continue to drop the price of manufacturing and supply chains here in the u.s so we have to have a resilient supply chain and manufacturing industry but it's going to take robotics and and all sorts of things there to continue to drive that price down so that people can still keep the profit margin than they currently have so i'm very very interested and excited about kind of all of the things we're going to see in 3d manufacturing and robotics that is just one application of it and ultimately yes will people lose their jobs because of robotics and 3d printing absolutely but i believe that what ends up happening is that those people then go find more productive work to do so the example that i always use is at one point it was like 98 of all uh people in the united states were farmers right well obviously we got much better at the food supply chain uh technology all that kind of stuff now it's about two percent i believe is uh is farmers the united states well what happened to all we lost all the jobs yeah but those people went and they found much more productive things to do with the industrial revolution like look look at the country and the economy that we built right and so i think that that's the same thing that happens here is we'll just continue to get more and more people who will um go find more productive work to do i don't get so caught up on um you know people losing their jobs because of technology ultimately technology is very deflationary right my friend jeff booth wrote a book about this essentially the idea is that as technology continues to become more prevalent you get deflationary trends at play so the cost of things goes down and you kind of free up that labor to go do other more productive things um all right do you think real estate prices will drop with forbearance expiring in september uh i think oh there's blender right there pliny just woke up from her nap no i didn't for anyone who is uh who is interested i got some i got some friends in the chat i was chatting with them all right okay i'll let you i'll let you go that's plainest way of telling me to shut up uh no so i think that uh yeah if you were saying hey plenty miss pomp um all right so oh hi pelino welcome the main host all right so the whole idea around real estate prices essentially is um yes there is going to be uh potentially uh this situation that uh forbearance will go away people will actually kind of get hurt by that uh real estate prices go down but if there is still cheap capital in the market i believe that we could continue to see kind of propped up real estate prices the other piece of the real estate uh analysis that uh needs to be uh talked about and paid attention to is uh there's a very big shortage of u.s new housing that comes on the market every year so the numbers that i recently saw were about 200 000 to 250 000 homes uh is the deficit that we have so there's basically here's the demand that we have for new uh homes in the us and here's what we actually produce that deficit or difference is about 200 to 250 000 homes right so it's about the size of a city like miami that's how many homes more we would have to produce on top of what we already do just to keep up with demand and so if you continue to have this housing shortage uh you've got a lot of kind of um margin for error in terms of um the demand so demand could drop but because there's that housing shortage you actually could continue to have more demand than supply and therefore prices at least sustained if not continue to rise you have cheap capital network rate again i'm much more kind of a macro um analysis type person where i want to understand what are the big forces or trends at play so that i don't have to pick the perfect stock i just have to do asset allocation and i think that's the key piece that retail misses a lot i spent a lot of time with institutional investors and if you ask most of these cios that run multi-billion dollar books um what they'll tell you is the returns that we get it doesn't come down to like did we pick the right stock or not or even in many cases do we pick the right manager or not it's actually our asset allocation so did we decide to put five percent or 25 percent of our uh assets in commercial real estate or in private equity or in public equities or in precious metals or whatever it is that asset allocation is going to be the biggest decision in terms of what returns you actually end up driving and so that's the part that as a retail investor individual you got to back up and look at the whole thing say okay how am i allocating my assets how much is in public equities versus somewhere else how much is in real estate then once you get into the asset class uh do you do low-cost indexing do you pick stocks do you go with a manager all of those other decisions can help improve or potentially slightly hurt but there's very few managers that if the public's uh equity market is 15 there's very few managers that are gonna throw up a two percent uh performance or there's very few managers they're gonna throw up 40 performance right so if the public equities are generally going to be 15 this year right now i'm just making up a number uh then most managers are going to oscillate between like 10 and 20 percent so you're directionally going to be correct just by the asset allocation decision uh and then the micro decision you make can kind of hurt or improve that just a little bit same thing with other asset classes as well and so i think the asset allocation is much more important to look at again i think real estate is super interesting right now uh mainly because i see tons and tons of money printing already happening i think there's going to be trillions of dollars on the way i do not see this slowing down and so i think people just got to buckle up get out of cash get into these inflation hedge assets um and be prepared to uh let the structure of the economy end of the financial system and and use your knowledge of how money actually works to your advantage that you're positioned to build wealth rather than try to be a gambler right kind of all the day trading all stuff there's people who are good at it i'm sure people get lucky at it it's not my game i don't think i have an advantage there um but but i do believe that uh people can definitely um you know benefit in the time of crisis like this if they understand that the macro environment so all right that's it for today i need a huge favor from each one of you i need you guys to go right now smash the like button on this video if you learned anything during it so that more people on youtube see it please subscribe to the channel and then i'm dropping every single morning i write a letter to over 50 000 investors where i essentially break down business technology finance and bitcoin and i do my absolute best to educate people uh using my personal opinion and my analysis of what's going on in the world so use pompletter.com again pompletter.com go there sign up you'll get the email you'll learn some stuff you can reply and get i read every single one try my best to respond to everybody it's awesome uh and so i hope you guys enjoy that uh yes miss plana marinova pompliano or plana evilo marinova pompilano thank you for allowing us to do this i will let her know um miss pomp rocks but she sleeps a lot that is very very very true uh all right that's it for today thank you guys so much smash the like button subscribe to the channel go subscribe at pompletter.com and i will try to do this again in the future thank you guys so much

Channel: Anthony Pompliano

Views: 84,660

Keywords: Bitcoin, finance, wall street, economy, business, technology, real estate, investing, invest, currency, us dollar, crypto, cryptocurrency, blockchain, unemployment, monetary stimulus, federal reserve, gold, silver

Id: zEneCMdy91M

Length: 72min 5sec (4325 seconds)

Published: Sat Jul 25 2020