Pomp Podcast #256: Billionaire Chamath Palihapitiya on How To Invest in This Crisis

alright guys bang bang I've gotcha moth here with me you need no introduction but you've done everything from incredible investing career to also running the earth team face book built a number of companies etc thanks for coming to do this thanks for having me on for sure let's let's start off with a fun question I feel like nobody ever gets asked this anymore but you're a billionaire you I think actually made like a billion and a half dollars last year alone what was the moment that you realized wow I have a billion dollar net worth Wow well I mean it's kind of a gross answer but it was a while ago in my early thirties as it happened to be but that was I mean pure luck like it's not as if that that was sort of the plan when I started it was just sort of what the outcome was and the feeling was pretty cool because I for a while all I really wanted to do especially in my teens in my 20s was be rich just because it was the solution to being poor and I'd spent the first 20 years being poor and I didn't like it so it was a it was a good feeling but to be honest with you it also ended up being a little destabilizing because and ultimately better the destabilizing part was just going through a process of realizing that it didn't really solve any of my problems and for a while it amplified most of my insecurities and then it took me a while to just become a more kind of you know normal person and less of a insecure person going through you know their bouts of inferiority so it was it was I guess now 10 years ago I'm 43 so I guess about a decade ago it was great I mean it was a it was a real notch in my belt now what I'll tell you though is it's been a crazy journey because the last 10 years it's gone up way way up then it's gone down you know I've been I've had to rebuild eyes a couple times it's been great I feel like when you start playing with big sums of money people forget not only can you compound it faster but you can also lose it faster swings are really big and you know you really have to this is why I kind of like have really tried to migrate to a much more patient model of doing my job first I was trying to figure out what should my job be and I don't think there is a job that is an investor I actually don't think that job exists I think that you know if you're going to allocate capital well over decades what you really are better than anybody else is just a good observer of the current moment in time and it's taken me a long time to sort of practice and refine a toolkit which all comes back to my psychology and so you know in deconstructing myself over the last 10 years I've become a better person the byproduct is I think I I make better investing decisions because I'm less prone to the wild swings that I went through but in that process I've been going through wild swings now I think the swings that I go through I can tolerate better because they're less psychological and they're more the result of bad structural decision-making versus bad emotional decision-making so that's been an interesting process for sure and obviously there's a bunch of chaos and kind of uncertainty in the world today I listen to the recent podcast a with Kara Swisher and if I got this right you know billion and a half or so last year that's what you guys made you've got three public positions 1.7 yeah 1.7 okay you've got slack Virgin Galactic and Amazon in the public markets and then mostly sitting in cash I'm assuming other than whatever illiquid investments you've made you know you keep talking about hey we're only four weeks into kind of this drawdown if you look historically that's pretty earlier kind of the beginning of the beginning I think it's a quote you used what are some of the things that you're paying attention to that you're like when I see X that's when I'll start to get excited and start getting a little bit more aggressive and kind of switched from an all cash mindset to aggressiveness yeah so I think the setup is important here so yeah last year we were lucky we put about 1.7 billion on the balance sheet I have been trimming all this here and so I'm not I'm not gonna be the one here to tell you that I've been trimming at the top I haven't been I've been methodically selling more and more every day I had four positions coming into this year Virgin Galactic Tesla Amazon and slack in the public markets we have a large portfolio of private equities I don't really know where the market on that is I tend to think it's probably down at least thirty percent and ours is a pretty good portfolio I would say and so I think many companies could be down 60 or 70 if not completely out of business so my mind sight has been to position myself defensively build up a cash base that we can very aggressively put to work and so what signals am I looking at well first is the signals that maybe what we're doing is the right thing the best way that I think about this is just put yourself into the mindset of any company right so pick a great company that you know you've admired so I'll pick one that I've admired for a very long time for a good reason workday simple example you know that's a company that's basically like 10x their market cap and you know the six or seven years they've been public trading at an incredible valuation cheap now in terms of sort of like what they've done historically but then I put myself into and this is not to pick on workday but it's a perfect example of of what other companies will go through because I think this is one of the best position companies so they were before all of these all of this craziness going to companies the global 1000 and basically saying listen like you need to upgrade to big parts of your legacy infrastructure right one part is about how you do all of the human capital planning and human resources management of all the people that work for you the second piece is how you actually count all the money that you make your general ledger right and so the first product would compete against PeopleSoft the second product competes against Oracle financials okay now why am I telling you this story because it's kind of like who cares boring enterprise software well now you put yourself into work day for a second and ask yourself who are their customers today April 1st 2020 well whatever segments of their revenue came from oil and gas just went to zero right oil is at 18 19 bucks a barrel there are a lot of very smart people that are telling you now that oil probably gets to 15 if not $10 a barrel some could go to 0 you've had the tar sands effectively trade to 0 in Canada you've had your first bankruptcy filing this morning when we woke up which was a multi-billion dollar company in the Bakken Shale in North Dakota so if you're an oil and gas company you're no longer thinking about your general ledger because you have no revenue and you're no longer thinking about upgrading your it you know HR software because you may not have any employees right so that whole segment stops by if you're an airline company or a transportation and logistics company that whole segment has stopped by if you're a hospitality business that whole segment has stopped buying if you're in the banking sector that whole segment has stopped buying now the spectrum of decisions are different on the one end these companies are bankrupt at the closest end in banking your market cap has been shaved by 30 to 40 percent which means that you have to now start and figure out how you save from an effects perspective a lot of money to basically try to get profitability in line so that you can grow out of this thing and so decisions that you could otherwise live without you stop and decisions that you could otherwise stall you stall now this is for one of the best run companies in the world so then if you take that trace route that we just did and traceroute a bunch of other companies random companies pick a retail business let's take a retail business Macy's okay well what was Macy's spending money on while they were spending money on people they just furloughed 200,000 they spent money on physical plant they're gonna stop paying their rent they spent money on point-of-sale saw where that's gonna go to zero they spent money on merchandise that's going to stop and now you look at their customers well the customers the point-of-sale manufacturers right let's look at those companies as an example I think there's about 15 billion dollars of public market cap and folks that sell POS POS is used to stand for point-of-sale it may now stand for piece of the entire category has gone to zero the entire category 15 billion dollars of market cap has been eviscerated nobody's bonding point of sale software or hardware or terminals right if you think about all the effects that those companies spent five six billion a year in running their businesses they've stopped so my point is that when you start to follow the trail of breadcrumbs for any company in any sector what I am slowly realizing is that we're a very interconnected web of businesses and that as much as you thought you were insulated from what's happening I tend to think that what is going on is not a sector based drawdown in leisure Hospitality banking and a couple of others but this is a there are implications for every single business so why that's important is for a company to reset I think you're gonna start to hear the term zero-based budget a lot so what is zero based budgeting zero based budgeting means you start with a clean sheet of paper and you say well this company is worth nothing I have no revenue let me build it back up bottoms up line by line excruciatingly ly line by line and when you do that you'll understand what you're willing to bear in your expense basis right so I tend to think in that process that takes six or nine months to unfold people will not be in a position to buy things that were nice to haves people will not be in a position to actually even spend on must-haves so if you think about like you know if you're an energy business and you're thinking about you know look at even Buffett's businesses I mean the craziest thing about Buffett's letter this year was how capital-intensive and unproductive his energy businesses were their negative roee well in a world where you know you have energy consumption falling I think the average power consumption has fallen by about 15 percent for the regional utilities you know but you're forced to price within a band and you're also forced to do certain capital upgrades especially in the you know in the case of what just happened in California where you could get sued because you have faulty equipment you start a fire blah blah blah every single company is going to be under an enormous amount of pressure to rebase line their expenses and in these next six to nine months they're gonna figure out what they're willing to spend and then they're going to start spending cautiously I think so I tend to think this is a multi-year and I don't want to become too alarmist but I do think it's it's something that is sort of akin to a depression like this is 15 to 25 percent unemployment and it's gonna take a long time for us to sort through all the damage you know you bring up a really good point I saw a stat yesterday that the US domestic box office so kind of just movie theaters in general this time last year on the week March 22 26 they made 200 million dollars last week they made $5,100 I mean literally many nine percent although just a decimation now that Emilia brings the idea of like hey are you gonna see an industry basically evaporate right well people ever go back to the movies with the buyers to etc and a buddy of mine said to me well that's the movies and that's kind of a nice to have right people have Netflix or other ways they could get some of that content because what about all the startups that were built that just service other startups right that was the rage for a number of years and so it sounds like you're making the argument like this isn't just hospitality or movie theaters this could be kind of across industries depending where you are and what your balance sheet looks like you could be disappearances you're bringing up some really good examples so let's follow those examples so let's trace throughout those right this is a key word traceroute follow the trail of breadcrumbs we had this is now the time we're honestly like the the propensity to action should be avoided at all costs like this is where you sit down you tape your hands to your hips your lap you don't touch the keyboard and you just learn and you study you know you're not supposed to be day trading in moments like this you're supposed to be learning but let's take your examples so you know the the the major movie compass to do x' were forced essentially to go day and date now the problem with that is that you can't put that genie back in the bottle and the other problem with it is that they may have gotten the pricing wrong they have no time they had no time to really do a pricing elasticity and release these movies for $100 a ticket on itunes they've released them for $20 and so it's going to be very difficult for Disney and you know Universal and Warner Brothers and Sony Pictures so all of a sudden come back and say hey we're gonna try to give them movie theaters back their window of exclusivity I think that's that that's basically very difficult if not impossible and then the second thing that's going to happen is that they're not gonna have the same pricing power that they would have had with the online distributors now all of that has one really important implication which is the cost of the movies that they make are going to change and then as a result the cost of what they're willing to pay is going to change as a result the cost of what they pay they're unionized employees is gonna change what the CGI maker you know charges changes what the caterer charges changes and so this is why in when you have these big sort of cataclysmic economic events what you have is a period that's very deflationary right you have a period where prices fall and fall and fall now in the Great Depression the only way that we could buck that trend is to basically get rid of the gold standard you know in 33 I think it was and so we're gonna have to have some version of that which is to basically create a bottom on pricing and to create a bottom on price stability so the movie theaters more than likely go BK and in that if you were a read or if you were a tenant or if you own the land you're gonna have to figure out how to repurpose that how to try to pay your debt obligations otherwise you're gonna go back corruptor you're gonna go default or you're just gonna hand the keys over to those facilities to banks at which point you know probably the beneficiary is amazon or some other sort of like physical retail that needs last-mile distribution and some of these movie theaters represent the right size and the right physical location okay so that's that's one then you talked about startups that's another great example you know for a long time I think in 2015 or 16 I started to become very bearish on enterprise software and the reason was because we shifted much more towards SMB than we did towards mid market and enterprise and the reason was because the money cycle was faster it was you could put small amounts of dollars to work the companies would sell online via credit card to other SMBs who would buy very quickly you would show revenue traction and then you were able to use that to then go and raise an upper out so venture capitalists loved it the entrepreneurs loved it they used it to attract employees because the equity looked like they was accreting very quickly but then you realize how brittle your customer base is in a moment like this because they are the first to stop paying they are the first to not honor their contracts they're the first to go out of business unfortunately because they don't have the cash cushion and so there's going to be unfortunately a lot of carnage in the SMB space that there won't be in the enterprise space so now go back to a company like word day or you know ServiceNow or sa P or some young startups that have explicitly chosen to sell into the global 1000 netskope is one as an example that sells security software into the global 1000 they consumed enormous amounts of capital to build their go to market but in many ways that capital becomes a protective moat that will keep them safe in a moment like this because their customers have a higher probability of staying in business now their business may slow down their business may get rear ated but their business isn't going out of business but if you were selling mostly to Andie's there's a very good chance that 50% of your revenue is impaired and at that point again if you're already money losing which most of these startups were selling to SMBs at price points that didn't make sense because you were trying to get out of a J curve it's going to be next to impossible the other strategy that startups also employed was being mono product right it was not only go to SMB charge something small if anything at all but do it for one single point solution create a wedge and then expand well again you go back to this problem that when companies are rebuilding their expense base what they're doing is making decisions about what costs to bear the company that has a mono product solution is last in line to be considered because it doesn't solve enough of the CEO CFO CIOs problems so then all of a sudden you start to make substandard decisions meaning you'll take Microsoft because it's a whole stack of things it's one person it's one sale they can now discount and you have this increasing returns of scale property that that benefits Microsoft disproportionately right so you have to be very unique you have to be a zoom or a slack or octa in that environment to be able to defend yourself adequately so that's also a very problematic dynamic amano product company is going to be very challenged a SMB focus go to market sales strategy is very challenged so to your point like the the examples of of contraction I think are numerous the examples of green shoots exist but they're harder to find and to be quite honest they're speculative because they're they're not about adoption they're now more about valuation like everybody loves zoom everybody loves slack it's it's fabulous you have to be able to right-size valuation in moments like this as well yeah one of the things that I keep saying to people is a lot of companies thought about are we recession proof nobody had ever thought are we pandemic proof right and the easiest example is take like a barber in New York City they would say all day long oh I can last a recession everyone needs a hair cut now all of a sudden literally the government has mandated go home right and revenue goes to zero and can they pay there right etc and you kind of again do that that Tracy back and you saw like tump it's a big real estate guy who's got a bunch of hospitality real estate and he came out pretty early and said look I need help because I can't give the rate of bateman to the things that you want me to do for these companies because I got people that I don't money to and you kind of go through this sore cap you know the circle of of that flow of cash and you realize like almost every industry is now turning to the government and saying hey I need a bailout right mean literally the movie theater the reason why that data came out is cuz they're asking for a bailout right this is and this is where the rubber meets the road because you know right now before all of this happened the government was already a third of GDP and you know we are we are now after all of this is going to be said and done because I think the odds if we're gonna be sort of in the 8 to 10 trillion dollar range is probably very high which essentially means that you know this year at a minimum 55 to 60 percent of GDP is going to be government sponsored but for the foreseeable future we're going to basically be very reliant on the government the federal government and then you know there there's there's another impeding sort of cataclysmic wave that we have to deal with which is not just all these companies but all the states and all the municipalities and counties and cities that are just going to be completely upside down on debt but they have dramatically less flexibility than the federal federal bureaucracy does in basically obviously just printing money so we have a very difficult moment here where what we have realized is that in the search for efficiency we have abandoned resiliency and we have to pivot our economy to resilience there was an article today that the Chinese government was basically metering out PPE equipment so masks gowns gloves etc evenly and why I think that's interesting was I think it was interesting that you know there was a moment where the president about two weeks ago started to back down from naming coronavirus the China virus or the Chinese virus at some point I think that there was a political gambit inside the government that said we should try to label this as a foreign scourge and I suspect that what probably happened not to be conspiratorial or anything is that you know needed a lot of things from China and China said listen not only do you need to back down and never say this again you need to apologize to all the Asian Americans in the United States and by the way he did it and he's never said it since but since then the Chinese government is still not flowing PBE into the United States at the same velocity as they should relative to other countries so it goes to show you that you know in our in our sort of this hell-bent desire for efficiency we've empowered certain countries and economies to have incredible leverage over us these fulcrum you know it's it's kind of like you know when you look at the dead stack of a company you look at the fulcrum asset right you look at the fulcrum security that's what that what we call the pivot security the thing around which everything crumbles and it turns out that our Achilles heel are simple trading goods from countries like China that they can hold back from us this is just incredible and so we have to pivot to a much more resilient economic model and in that by the way that's I think how we countered the deflationary pressure of you know the 1930s because inherently what it allows you to do is actually see a world of rising wages and rising prices if we sort of insource more of the production or at least the last mile completion of the things that America needs to run its economy yeah it's all idea that the supply chain is a national security concern right and I think that as we see this deflationary environment now you know the average American has no clue you know kind of the balance between as asset prices go down the dollar strengthening and obviously the feds can have to step in they're gonna have to do the quantitative easing expand the balance sheet where do we go with that right and obviously I know that you're a big kind of schmuck insurance as Bitcoin proponent but is this a thing we're seeing you know the Fed balance sheet the latest chart I saw was literally it's just a vertical line right B they're adding hundreds of billions of dollars I mean it literally just looks like it just shot straight up in the air and part of this goes let's say we go to 8 10 trillion dollars on the Fed balance sheet what is the fear around higher levels of inflation will that even be enough to get the deflationary environment like where does this take us because I think that the writing's on the wall but we have to go there but I guess like what's the second and third order effect of going in that direction if if it's the status quo I think that we already have the example which is Japan which is like look you know the crazy thing is like you know in 1971 when we formally abandoned the gold standard the reality was every country realized that all of a sudden they had infinite power and it lied in in each of their central banks and the ability for those central banks to print fiat money and so ever since then we've just basically been printing ad nauseam effectively and what Japan is really shown over the last twenty years is if as long as I keep buying my own debt everything's going to be ok because you know I know I'm paying myself back and so I'm just round-tripping money constantly I can keep this whole thing afloat for a very long time so the the idea that the the typical rules of you know debt-to-gdp matter they kind of matter but they don't now America has a different problem in that it has always been the reserve currency and there's a lot of foreign entities governments and otherwise that own American debt which is a little bit less typical than in Japan it's true that other people on the Japanese that but overwhelmingly the Japanese government so you know the United States can go and play this game for a while but eventually it comes home to roost because you're going to have to start issuing paper at a higher and higher risk premium the question is how do you do it and this is where things become very complicated and so unless you find a way to break this deflationary cycle so one can be an explicit decision to just refactor your economy and that and I would advocate for that which is you know we decide that you know the way to sort of create inflation meaning how do you grow your way out of this so not how you issue debt to drive GDP higher but how you actually grow your way out of this is by putting enough money in the system to actually create incentives to do things differently but actually cause prices to go up and I think the only way to do that is to economically incentivize and essentially mandate things to be much more domestically created and produced because it gets us closer to full employment and it allows people to be more competitive in the job market and it forces companies to pay employees more it forces companies to then charge more for their products and we break the back of these deflationary cycle because we were already on it after 2008 with QE I think we're gonna go faster and faster towards this wall and the only way you can slow down and veer away from this wall and I'll tell you what the wall was in a second is by basically forcing some kind of inflation in the absence of that the wall is debasement it's basically just saying okay it's not worth as much anymore sorry and you know I mean to be very honest and I and I can I I don't I don't mean to say this as as flippantly as it's gonna come off but that's what third-world countries do it's a dictator playbook get all the assets and just print money and it's not but it's not what the American economy should do it's not what America should do and it's not what the reserve currency of the world can really afford to do so I think the only solution is path one and it's gonna require us to really look at competition corruption regulatory capture economic incentives in a very different way we're gonna need a new deal we're gonna need a massive stimulus package that incentivizes building things creating things repatriating supply chain back to the United States and in that I think there's a way out of this you know it's interesting because what it then leads to is there's a lot of quantitative easing that goes on and to avoid that debasement I think that you're you know directionally correct right now the strategy has been let's buy every credit product we possibly can stuff into the our mandate right they're doing everything from Treasuries mortgage-backed securities corporate credit all the way don't want it then leads to like well what else can we buy and obviously equities is kind of this like religious topic that once you step across that line I think there's a lot of people that start yelling and screaming how do you just like evaluate should they do it should they not would it be helpful and kind of navigate that conversation I don't I don't think it's additive to be quite honest with you I think the debt markets are much much more important to the functioning of an economic system than equities are I think equities are much more of an individual company's game whereas the debt marks or the debt markets are much more intertwined and interconnected and they all live in a very complicated ecosystem meaning you know carnivals convert doesn't affect Facebook their fees are just like not correlated things they don't they don't really touch each other really but you know triple B corporate credit versus triple a corporate credit live in a very interconnected stack ultimately and those live in a stack that are related to Munez and related to mortgage-backed securities and and related to the CDs that you layer on top of baskets of all of these things it's it's much more complicated important market for how capital markets and economies run debt that are that is I think that before you know the Federal Reserve's starts to try to sort of cherry-pick equities which they're not going to I mean at the most they buy ETF's but they buy the index but I think you probably have a much bigger problem which is what do you do about pensions and I think before you start speculating in equities I think there's probably a massive bailout of a bunch of these pensions that have to happen and I think that there would be more political support for that before there was political support for buying equities yeah I mean the pension issue is so bad in some areas right just I mean just literally when you look at the numbers you're like it's impossible to get back to where they need to get I don't care if they've got the best you know investors in the world running these things is the solution only a bailout right or or let it fail I mean is that basically it's a binary let it fail or bail them out mm well you have to be able to mouth the bailout isn't going to be to corporates I think the bailout is going to happen at the city county and state level and here's the problem is that you can't politicize that meaning you can't bail out you know the Houston Fire Department pension because the city of Houston issued these bonds or you know the you know state of Texas issued some general obligation bonds and some of it went to Houston but then not do it for California because ones Republican ones Democrat I don't think that dog hunts so this is a very complicated thing that once you start to do it you have to do it for everybody and this is where again I go back to like before you go there you have to realize that that is a never-ending spiral and you have to try everything else before you do that but the unfunded pension obligations that that sit in companies are important but at the end of the day you know that is also a function of haphazard management in part what's much more critical are the pensions of states and cities and municipalities because these are the critical workers that we rely on these are the people on the frontlines easier policemen your firefighters you know these are the people that are working public utilities your teachers and it's it's it's wholly unfair that those folks basically get you know over I just saw a report yesterday the MTA in New York City is saying that Subway ridership is down 90% and obviously revenue basically disappears and now they're worried about being able to service some of the bonds etcetera that they've issued and so they're turning to the government and saying hey we need a bailout - right and you just get in this world of everyone needs help and I agree with you it's gonna be hard to cherry-pick well we'll help you and we won't help you because now you're playing kingmaker well hi but okay I think I think it's it's even it's even harder than that how do you know who to help meaning okay you can get away with it like let's just say you actually try to be a kingmaker so you know the stimulus bill slowed-down for a few days because there was a fear from the Democrats that you know minuchin wanted essentially of half a trillion dollar slush fund well let's just take the extreme and say that he had gotten it he's only going to do one or two deals that don't work before everybody says hey you need to stop and it's only half a trillion dollars in a twenty two trillion dollar economy so at the end of the day it still doesn't do anything and if you if you take the 22 trillion of GDP and layer on all the pensions and layer on all these other things it's a drop in the bucket I mean like we need to come up with 50 60 trillion dollars when it's all said and done so even if he had done it and even if he had done it poorly what we would realize as cherry-picking doesn't work it's an all-or-none problem this is why I think again we have to go back to we have to spend our way and try to inflate our way out of it and basically what we have to do is choose the path of inefficiency because inefficiency creates costs and then costs are passed downstream and then you know you have to get to full employment so that people can you know switch jobs more easier for higher wages that is the only way we can get out of this yeah this leads to Bitcoin right you're famous for calling it the schmuck insurance I'm not going to say that we're in the situation where the insurance is needed yet but we're definitely headed that direction over a long period of time how are your views on Bitcoin kind of changed over time and have you bought more Bitcoin sold Bitcoin or change anything and kind of a portfolio allocation standpoint so first of all I think you said it exactly right which is that I think that this is the set up meaning I think Bitcoin needed a moment like this for it to be relevant in 2003 oh sorry 2013 I bought a lot and at one point I think I had almost 5% of all the bitcoins my basis is about 80 bucks a coin I've never bought more most of my Bitcoin now sit with a company and you know they use it for trading purposes they use it to run a bunch of other strategies and I did that mostly for safety and security and peace of mind I didn't want to deal with it I wanted to own equity in the business that equity can be hedged that equity can be tax structured and advantageous Lee and then it allows them to run a big business which generates cash and I can get a cash and you know dividend stream so I have not bought since I initially basically wrote that article for Bloomberg in 2013 my thoughts are the following right now I think what you're seeing is that it's still a speculative instrument and it's too speculative for it to be reliable so if you're going to make the case that you know it should replace fiat currency well one thing you have to look at is the volatility of the US dollar and you can't replace it with something that's 9 sigma more volatile it doesn't work and the reason it doesn't work is that it's - again going back to what markets are important the only market that's even more important than the debt markets are the currency markets and what you see is enormous amounts of liquidity where 5% moves so 500 basis points are newsworthy well those 500 basis points in the absence of some massive exhaustion is that that take years to play out and in that there's value because it allows more market participants to be active in that market so that they can use it as a critical pillar of how they run their business but now all of a sudden if you have 2,000 basis point moves 1/2 hour you can't effectively use it and so what it does is it pushes it into this ghetto of day traders and speculators and right now that's where we are we're in that ghetto and you need to get out and the way that it gets out is that you need to flush the speculators and day traders out and you need to have still some basis of interest from long-term holders and then you need to have it slowly look like the traditional infrastructure could really implode so again I go back to we our driving slowly but we are driving towards a top of a cliff and then we're going to drive much much faster down that cliff tore down that hill and at the end of it is a is a huge brick wall the way we avoid it is by pivoting to a resilient economy where we introduced in efficiency and cost and inflate our way out of it or debasement the path dependence for Bitcoin is if it looks like path two is likely it will really emerge as a flight to safety and over the next ten years where this trajectory is going to take shape and it is a ten-year trajectory you'll have a lot of time to vector into it to protect yourself and to hedge yourself and I've always thought of Bitcoin as a very binary investment whether it goes from eighty to eight thousand to six thousand to three thousand to thirteen thousand it just it doesn't matter this is either zero or it's Millions because what it will do is it will create a quasi gold standard it'll create an index except instead of having to own gold where gold is owned by central banks it is an instrument that has value that's determined by in between its participants and it's owned by everybody so maybe the correct way to say this is that it's not gold but in gold being gold 2.0 which some people have used about Bitcoin what it does is it replaces the the method of value transfer that you need for fiat money to be valuable but that only happens if the US dollar looks like it's going to careen into this wall so I think that's the bet so the setup is here so before there was no path dependence meaning you were speculating and not really hoping because you know if you were if you're using as schmuck insurance as I was you were kind of hoping it would never come in but now if the probability you know was 1% that that it would be valuable unfortunately the probability is now probably like 5 or 10% and there's a real chance by 2030 we don't find a way to inflate our way out of this and that the only way to break the back of deflation is essentially to create some quasi form of gold standard but it'll be almost impossible to do that between governments and central banks they'll never agree on an instrument and they'll never agree on an exchange but then bottoms up people could decide to do it yeah and the minute that that happens individuals and people then it's a done deal I broke some glass a couple of weeks ago I basically said look there's a lot of people going on television and saying I think X is happening or you know for Y reasons and stuff and I said but the one thing I haven't heard anyone make the argument for is if you zoom out to the big picture are we actually seeing the failure of the fiat currency experiment now it's not gonna happen tomorrow it's over a long period of time but once you got off that gold standard it introduced some advantages but it also introduced some disadvantages and there's this guy in San Francisco Brent Johnson at a santiago capital that I interviewed he's got this theory calls it the dollar milkshake Theory which is all these central banks are introducing liquidity into the world and the u.s. actually has the straw so they get a suck all of the value into the dollar right so everyone's introducing liquidity u.s. sucks it in dollar gets stronger asset prices go down you get the bleeding what happens if all of a sudden Bitcoin and the currency it you're moving into is not so much the most stable but it's actually an access play right if you're in certain areas of the world I want dollars I just can't get the dollars right the next best thing is is to access so I think that that I think that that will also happen that the thing is though and I can say this because I I was born in a developing third-world country those countries don't matter for so look the reality is we're gonna have a lot of failures meaning the the the good news is the United States is incredibly important it's the fulcrum security of the world so we're not gonna fail out there there's going to be a lot of pain so for example the eurozone is gonna get stretched right to the breaking point they're not gonna break but it's gonna get stretched right to the breaking point so they'll be okay but then when you look at emerging markets it's very complicated I mean so could you see Argentina fail again yes in fact they probably will if this if the southern hemisphere sees a massive outbreak of koruna virus as they go into the fall in wintertime and they're ill-equipped to deal with it which the odds are reasonable could Brazil fail yeah possible could they devalue again probable Central and South American countries yes Asian countries yes so in all of those markets you'll probably have a bid by the most astute people in those markets to basically defend their defend what they own because who wants to own you know pesos or bought or I mean you still want to do that grey eyes it doesn't make any sense and the risk for all of those currencies and those markets is quite negative quite quite quite negative so there'll probably be a bid there it's just insufficient again I go back to we have to remember the gross tonnage matters here and there you know the fruit peddler you know in Sri Lanka just he doesn't matter and there's just no amount if there's not enough fruit peddlers in the world to overcome central banks so I just think that there will always be a bid for those folks I think it'll go up on the margins because he's there will be a lot of I think emerging market failures first of the developed world but I don't think beyond that there's going to be some massive bid and that's the tipping point yeah it's a fair agreement I was sore skiers real quick a couple of years ago maybe two years ago now you made a pretty big I think strategic move in the way that you started to allocate capital and the way that I read it was you wanted to make much more concentrated bets where you hit higher conviction and a lot of managing outside capital and things like that kind of prevented that when you look at your portfolio today you basically have three public securities that make up you know almost on a percent I found a hundred percent of your portfolio got a cash illiquid stuff kind of looking back good decision happy with it would you do it again and kind of where do you look at now from just portfolio construction and concentration risk that you take like how are you thinking about it kind of two or three years into this it was it was a great decision I think the the way that it happened was too haphazard I think that if I had had the courage to believe in myself I would have probably instead of let it happen in you know four or five kind of cuts I would have just done it all on one day and walked in and said here's what's happening here's everybody's severance packages here's what you guys could make and you know I wish you the best signed this and let's be done and shake hands I didn't really have the courage because it was a process where I was evolving to this place over a year and so I kind of trickled my way into into the decision do I regret the outcome no I kind of regret the process I wish that that was better but you know my setup right now is like I think to myself okay there are there are two big aspects of my life and they're they're measurable in very different ways so in my personal life my whole job is to realize kind of two things the first is and this and the coronavirus has been amazing for me which is I'm powerless I'm just as powerless as the fruit vendor and just as powerless as the President of the United States we are all equal in a moment like this and that is incredibly humbling to internalize okay we're all equal but it doesn't mean that we're irrelevant so being powerless is one thing but we are very relevant I am relevant to my friends and my family and I have a responsibility to be really functional for them in moments like this so it's about maintaining clarity making sure I realize how lucky I am being appreciative staying healthy helping my family talking to my friends making sure that when I see them in moments were there you know when you're cooped up for a month it's tough it's helping them so so I've realized that measuring myself in my personal life is about those things how to stay relevant but yet realize that I am powerless how do I be functional and measure my measure my ability to be functional so I have like a little you know stick it pad and I write my friends names on there and I cycle through it and I make calls you know I have books that I try to read passages that I try to just stay focused and then you know what it's time to be with my family really be present with them that's how I measure in my professional life I have always wanted to be the best at something I just didn't know what that was and I wanted to push myself to try to be the best and right now I'm in a lucky position where you know this is the moment I think for me where I can take you know a three four billion dollar balance sheet and ten exit and so how do I do it and in doing so it's not the money it's proving how good I could be in these moments where I need to be clear minded where I need to make really good decisions where I need to manage my psychology I'll give you an example like as I told you like I've been trimming where markets were down ten thousand or thousand where markets were up a thousand where you know and and I see all these folks who would be like oh I you know clip the top and I you know covered my shorts at the bottom and I think wow I'm an idiot I mean I didn't do any of those things I've just been dollar cost averaging my way to more liquidity and it would make me feel insecure but I had to battle through that and put myself in a position now where I have an even bigger cash pile and I can say okay I can make a couple billion dollar bets here and try to 10x it and in doing so I can be part of the solution I could hire lots of people I could you know solve really important problems that I've always wanted to solve and I'm putting myself to that challenge and so I don't regret any of it but I'm really cognizant of this line because if I am dysfunctional at home I will not be functional at work and if I fail at work I need to firewall my personal life so that I can still be functional because it's it's this is a moment I've really I'm trying to learn how to have equanimity and I think like if you look at the best people in work at any work they have an equanimity to it they they are humble enough to realize they're a participant that they're not some all-seeing all-powerful omnipotent presence they wait for their moment and then they participate in a functional way and that's a real skill I think very few people have it Buffett has it very few people have it speaking of Buffett you and him are in somewhat similar situation and I think a little bit different size and and that you have cash on the sidelines you're being patient you kind of understand at least generally where we are on this cycle and and having that patience will likely pay off when you go to get aggressive I think a lot of people are saying you know when's Omaha gonna move type thing for you where are you going to look is it public market is it looking at kind of more the hard text I think you've been talking in the private markets is it may be something that we aren't expecting like real estate or other assets kind of how do you think about okay I've got a couple billion dollars how do i 10x it there's a lot of risk involved in that obviously right so how do you kind of think through that the way that I'm asking the question right now is first and foremost what is not going to change and you know there's a bunch of things that are not going to change meaning you're still going to go out eventually you're still going to travel eventually you're still going to buy things offline eventually you'll still you know want to make things that will require energy eventually you'll still need to eat you'll still need to clothe yourself you'll still need access to the Internet all what this moment is good at doing is clarifying a hierarchy of needs and so the first thing that we're doing and this is for us and my team and I a multi-week process is just re underwriting what are our basic needs and that's what I'm doing right now and I'm trying to ask myself just really simple kind of basic questions where I look at my kids and if I tell them here are the things that will never change they'll be like yeah it makes sense from there and we've done this because we're a little bit further ahead in some of those sectors that we identified early they're not super complicated but then what we've said is which companies have now been disproportionately punished despite basic needs that should remain relatively and violent over the long arc of time so I'll give you an example you know the one of the things that this is strained is the internet itself and within that I think one thing that we have realized is how misconfigured telecom infrastructure wireless infrastructure and the wireless providers functionally are so let's think about this they have physical wireline infrastructure they have a you know very complicated very expensive wireless infrastructure that doesn't really support massive massive throughput they have incredibly complicated very expensive back-office effects to run it because they were traditional wireline carriers that try to morph they spend hundreds of hundreds of millions of dollars trying to build capacity both in terms of spectrum as well as satellites and then to top all of that Sunday off the cherry on top is that they have a physical retail infrastructure that is the only way for you to interact if you want to switch your plan if you want to upgrade your plan if you want to switch carriers you know they've been they've been resistant to e sims now you're sitting at home and even if you wanted to switch every carrier is thinking to themselves I can't run ads I can't switch because I can't deliver a sim to these people because the stores are closed now take out all that dysfunction the wireless carriers will continue to be more and more important you know we've we've realized that we need to have a more resilient intranet we've realized that it need to be somewhat more homegrown as well we can't you know we can't rely on hallway or Ericsson necessarily we have to have you know internal American products and solutions we need to service the rural areas of the country as well as the you know cities cities have very different complicated patterns of density and servicing that are not done well I mean like you go to a place like New York City and Verizon is just complete so we know that the outcome is but we don't know what's the path to get there is and we have a bunch of companies that have just gotten decimated now then if you take that and you overlay those dynamics in emerging markets what you see already is a bunch of bankruptcies so that's an example of where we've said okay do we step in is there a company here that we can buy out of you know the Chilean equivalent of chapter 11 bankruptcy here you know chapter 7 bankruptcy and what would that look like or you know are there are there companies that we could get a hold of but buying the debt and then basically trans transforming it that's an example we've been monitoring very closely all sources of alternative data so what's an example of alternative data OpenTable has some incredible data Yelp has incredible data second measure credit card panels there's a company I can't remember the name who we use for footfall data TomTom and we use that to build a complexion and what we're asking ourselves is what does this show in terms of patterns another thing that we've looked at as a result of that is in commercial real estate so I think that commercial real estate is fundamentally impaired now because when you factor in just like you and I are as productive as if you and I by the way just think about this you had flown to San Francisco we could not connect you flew back but you stayed in a hotel you had some meals blah blah blah let's say roughly you spent three or four thousand dollars on that business trip you and I are creating just as much value it cost us zero yep so the point for you to spend five thousand dollars of effects to generate this asset is going to be incrementally harder for you to justify it's going to be more to pleasure and waste than it is out of need when you factor that into how it will flow into commercial real estate commercial real estate is fundamentally impaired it's it's essentially what Tom Baraka said but in a world where that commercial real estate is impaired that's not going to be completely true now there are certain REITs for example that only serve as big-box retailers specifically Walmart Amazon distribution and groceries now faves on they've seen 50% draw downs as well because you know you throw the baby out with the bathwater when things like this happen and so we've been going bottoms up in certain REITs literally looking at property by property trying to figure out are these things valued fairly or reasonably the thing with this work that I'll tell you is that it is incredibly humbling because it is unbelievably boring and super tactical I mean you got to be a worker in moments like this a humble worker put your hat on you know and just grind it out and it is excruciating ly boring numbing time-consuming but in it is where you'll find I think the Nuggets but that's what we're doing we're prioritizing needs we're asking ourselves what won't change and then we're looking at things and essentially what that leads us to is a bunch of offline businesses or hybrid businesses the other part of our exercise is saying what things need to change and all of that leads us to our portfolio private businesses and what we are doing there as we put out feelers and what we've said to people is like look we have buying capacity here we're willing to be the buyer but we want control and so you know I'm not interested in putting in 15 million dollars in a Series C or a series d extension round but I'll buy your business for 50 million a hundred million two hundred million and then I'll fund the rest of the J curve to get out of it if we think that that solution is interesting and so we're looking in healthcare we're looking at climate change we're looking at education those are the three areas that we think are going to change the fastest in this move to resiliency so that's kind of what we're doing but honestly dude it's not glamorous it's super tactical well it brings up two things right the first is I don't know who said it but basically the return you get is the price you buy that right and that's the work that you're doing now is trying to figure out you know what are those undervalued assets that if you buy it at the right price today it basically locks in a significant return over time the other thing that you've done is you use the SPAC and obviously the big one is Virgin Galactic what's kind of the thoughts there would you ever put social capital into a speck structure are there other things that you're kind of thinking through seeing the success of the version I think what virgin showed us is that there's a lot of incredible tech companies that should be public and that when you're doing something ambitious there's a huge appetite by retail investors as well as hedge funds and pension funds and other things to have direct exposure to alpha it is a fundamentally uncorrelated business - anything else of its kind and in that you know the the anti-correlation the lack of correlation is an incredible good thing to have when you're constructing a portfolio and this is why you know who knows what it'll do over the next year or two but it's still up 40 percent I mean that's just incredible how could you say that in a market that's down 20 odd percent so I think that's what virgin shows you is that there's a tremendous value in anti-correlation and in that I think that there are a lot of really good businesses tech businesses that could benefit by being public and this back in my opinion is the only way for tech companies to go public because you're doing it via a merger the process is dramatically simplified it's much faster the capital is flexible meaning you can raise as much or as little as you want you can do as much primary or as much secondary as you want and you have huge benefits for the employees in that there's no lock up now try going through a traditional IPO or even a direct listing it's a very difficult thing and I've done the largest direct listing as well I was the you know Series A investor in the board member on slack and so but I can tell you seeing all of these processes is that slack and Spotify can do listing maybe an Airbnb could do a direct listing although the price is unclear at this point but most other companies cannot I think the IPO process is totally broken and so I think spats make a ton of sense the other thing that I would say is specifically around social capital my dream is for this to be public and my objective over the long term is to give individual shareholders the ability to be beside me and be at risk with me I can't guarantee that I'll make great decisions all the time but what I'll tell you is I'm on a journey to become the best that I can be and you know find kind of truth and control and meaning of my psychology and that results incremental II I've seen in better and better decisions and I was making pretty good decisions when I was completely dysfunctional and so I kind of feel like I should be making really good decisions and so I would love for it to be public I would love to take a shot at building the next Berkshire publicly I would love to have annual shareholder meetings I would love to you know have conversations with you multiplied by you know the hundreds of thousands of people that listen to you I would love to have the that connectivity to people I would love that and I would love to have the honor of being in people's portfolio as a way of just being a smart you know next-generation thinker so we know where you are today let's say that that's kind of the not the finish line but a milestone that that's in the future what are the obstacles that you see as to why not go do that right now that's a really good I think it's more of my insecurities than anything else I mean I think that you know could we do something sooner rather than later possibly I think that coming out of this if we prove that you know our process was good and that our psychology was rewarded I think I'll be ready to be really honest with you I still battle my ego all the time and I want to be able to look you in the eye and tell you that when I get these belts of inferiority and superiority I know how to manage myself because I think that is what like I said that is what's required to be an incredibly astute observer of the present and I think that is the single biggest requirement to being a great investor just observing dispassionately observing what's happening around you and I still have these you know follow-ups like I kind of trip up and I do it to myself so I think when I know that that is largely behind it'll never be a hundred percent behind but when I can like really have a grasp and I have the mental control to know oh it's happening to step back then I'll be ready because then I can look you in the eye and say you know my game is a plus it's may not always gonna work you know I may be on the wrong side the analysis may be wrong we may not make the right bets but I am NOT going to do something that takes away from our ability to be successful I feel like I'm pretty close and you know like a process like this like really it it tests your mettle yeah I want to finish up ask the audience for a bunch of questions and I found some that I just thought were really interesting or fun MBA you obviously are a owner of Golden State Warriors they canceled the season just thoughts they're kind of how do you see that playing out and what do you want to see happen I guess with the league and with the team I think it's going to be an incredible boost to America's morale to get professional sports going obviously there's a lot of health care related issues between here and there both for the players as well as the fans but it frankly like when it happens I think it'll just be an enormous boost to see people playing basket all to see people playing baseball you know when the NFL season starts whenever all of these things happen so I don't know when it's gonna happen and I don't know what it's going to take but I think it's going to be psychologically a very important it's gonna be hugely emotionally important thing for America Quarantine overlaid with no sports is killing a lot of people in the country for sure the best tweet on this I saw was it was very very early into the quarantine and like the guys tweet was you know day two of no sports found this very nice woman sitting beside me turns out she's my wife absolutely speaking of quarantine someone asked how do billionaires quarantine like what's something that you think that maybe you do differently than than the average person or some of the people wouldn't expect I mean honestly I'm doing basically the same things as everybody else I'm cleaning my house I do it every two days you know mop the floors clean the toilets make the bed every day what I've tried to do is create myself a routine because I think that routine is very important so you know I've started to have make my breakfast and then bring it upstairs and I and I have breakfast in bed cuz it's like a moment to just relax and just kind of you know which I normally wouldn't do but then I get up and I make the bed I clean the bathrooms you know make breakfast for the kids I try to get 10,000 steps a day under any circumstance I've missed three days so far in almost a month of quarantine but so I don't work out anymore which has been kind of shitty but you know my whole thing is like I don't want to I was pushing myself pretty hard I didn't want to injure myself I don't want to do something where I have to go to the hospital in this moment so I'm just like I'll just walk do you have a cool quarantine outfit like a David Sachs posted I saw he looks like a terminator with his hat and his gloves and goggles no in fact I mean like I live in the suburbs of San Francisco and so Palo Alto area and so there's not a lot of you know people are very kind of kind and they respect the social distancing and they cross the streets and no but I don't do anything differently I mean maybe you know if anything I you know I I would only drink once a week now it's like I'll have a glass of wine every night because I'm like it could be the end I mean you know you might as well go in style but I'm not doing anything differently got it spaced any interest in being on one of the early flights now that the your financially incentivize to see it be successful well I bought a ticket and but I'm six hundred and fourth in line so I don't really get any advantage and I think that that's right like it's like I should be waiting in line like everybody else and you know the other thing is like I wonder how many people will wake up and realize like hey listen I've always wanted to go and become an astronaut and maybe I was hemming and hawing I mean I don't think there's going to be any shortage of people at this point because I do think that there's a there's there's a thing that a lot of people will go through I suspect when they were quarantined at home which is just really a ting what's important mm-hmm you know and and I think a lot of people come out of this and they'll double down on relationships they'll end relationships they'll take the trips that they've always wanted they'll you know change behaviors that they didn't think we're healthy they'll double down on other behaviors maybe even if they were unhealthy because they're like screw it it could go off to hell anyways but I think that you're going to see a lot of that Rionda writing and so I think it generally helps things that are unique yeah three more for you I think you and I should probably spend a lot of time along with many people we engage with thinking about tech companies larger companies the Fed finance etc small businesses in America or getting decimated let me just they don't have enough cash they're being mandated to shut down etc any thoughts on how small businesses you know what percentage survive on the other side of this or kind of what that segment of the market will look like I think that I think if you look at the percentages I could be getting this wrong so you can tell me if you know this but I think the the three-year mortality rate on companies is like 5060 percent on SMBs sounds actually correct IIIi think that you basically have to assume within two or three years it's a hundred percent turnover so I think it's really bad I think it's really this and this is why I think it's it's unfair to be glib and like focus on the equity markets above all else or you know think that the quote-unquote the bottom is in but all we've done in the stock market is reprice risk what we have not done is step two which is trade the news and I think the news is going to be bad because unlike 2008 and unlike you know a few of the recessions before it this is going to touch everybody you are going to know people like in your small circle that are wiped out and I don't think that was true in 2008 and so we have a responsibility I think to support small businesses when they start to rebuild themselves and I think part of the way we do it as well is that the government has to create incentives for these businesses to onshore a bunch of things that were offshore I've said this before even in my investor letter for 2019 I think the general trend is towards more nationalism but this is the best reason for everybody of all political ilk stew realize that we do need to nationalize large parts of our economy it's the only salvation and in it you can see a rebirth and a renewal of small business but otherwise it's a hundred percent wipe out over three years yeah speaking of kind of bad situations we are not at the end so we don't have complete clarity of the hindsight but there's been a lot of what I'll just call bad behavior in the market that led to a lot of this so whether it's the over-leveraged of corporations or even hedge funds at the key talks right at one point a lot of the debt fueled buybacks the CEO departure is kind of at the top all of these things what's your take at this point in time right so we're kind of going into this situation we're not out of it but like how do you view a lot of that be right now so I got it I got an email this morning actually from my prime broker so hedge funds were at 99 to a hundredth percentile of their historical max leverage literally February 20th and now we're at you know the 20th to 30th percentile historically so you know we were probably at 7 or 8 turns of leverage and now we're probably down to one and a half to two or three I think that this next go-around you're going to have to realize government will have to realize that in 2008 all they did was allow financial institutions to pass the buck they were able to take the leverage off balance sheet and when you subtract out debt as a function of GDP for many years now we have had negative GDP so we were not growing in the absence of people issuing debt and most of that debt unfortunately was not towards R&D but it was towards things that superficially propped up stock prices which really only benefited a handful of people and I do think we have to restrain people from being able to do that in the future I don't think it makes a lot of sense and I don't think it adds a lot of value and I think that it's not that it was obviously responsible for the coronavirus but I do think that when you look at how much devastation we are encountering and when we do the final tally on the amount of buyback oh sorry the amount of bailouts we need the bailouts are directly correlated to how stupidly run and badly run these companies were you know why is it that California is legally mandated and you'll say oh because it's a nonprofit but legally mandated to have a rainy day fund but a company isn't and then the company is the first one to knock on the door of the government and we're just waiting for the next shoe to drop or California Mississippi Alabama Louisiana to all do the same thing and I would much rather see the money go to the states and the cities in an in an fair even then the money go to a private company I think that those private companies should be wiped out the equity should be wiped out and they should need to restart it's one thing I'm a hundred percent in alignment with you on this but the part that I don't understand is how do you continue to benefit from the elements of capitalism if you take out the risk moving forward it everyone knows I can quote unquote take this like fake risk and if anything goes wrong I can just run to the government and get a bailout you changed the dynamic of what happens and I actually think you incentivize even more bad behavior right it's almost like there was bad behavior and then there was no punishment for it and therefore you just encouraged that to continue you know when we get out of this thing well I it depends on what you view capitalism as I think if you view capitalism as a game of risk I think you're right I've always viewed capitalism as money becomes a fulcrum instrument for change what do you want to see in the world okay money is your lubricant you decide and the person with more money or the person who's willing to put more money into something and who can be more clever basically has the opportunity to win so I I think it's a game that puts ingenuity and money at the forefront that's what to me that's what capitalism is and so when companies are doing things that are fundamentally not advancing that forward they should disqualify themselves from them being able to run to the government so it would be a different thing entirely if all the airlines had invested let's just say 96% of free cash flow dollars on supersonic flight failed and then came to the government and said look I took a big bet on the future to help advance humanity it didn't work and I need a bailout I would be the first one to say okay but when 96% of free cash flow dollars go back to buying back shares and then you basically claim the same thing I think you should be punished and punished financially so you know you you you took the money that you had you refused it you refused to multiply it by a good smart bet on the future and I think that there should be consequences for that yeah I don't disagree with you at all last question for you been incredible kind with your time here if you were the president over the next six months what's your playbook so president Shamus got full control can do whatever was it within the presidential powers what's your playbook to kind of weather the storm and get us out of this I would first stand up every single voting site that we would use in the November election and I would schedule every single man woman and child to come through all of those testing facilities and I would basically deploy a rapid test to figure out whether they had coronavirus in that moment okay and families could come you know 10 minutes apart so that you could get back into your car and go etc etc in step number one if you didn't have Corona so you weren't shedding the RNA in that moment you go to a second and you get administered a finger prick and you get tested for the antibodies and within 15 or 20 minutes and you're held in an isolation you know booth area where you you know you're on Instagram and when you're done you're given a wristband and that wristband basically says one of three things well if you had tested positive you get a red band you go home and you isolate if you test negative and you have the antibodies you get a green one and if you test negative and you how don't have the antibodies maybe you get a blue one green and blue are allowed to go back to work right away red self isolates you contact trace etcetera etc that's sort of the frontline of getting the economy back to work and you have some combination of the National Guard and sort of like a whole infrastructure then separately I think you introduced a massive massive massive infrastructure bill that starts to drive the refactoring of the supply chain back in to the United States and part of that is incentives and part of that is government spending and it has to cut across many categories from you know semiconductors in silicon all the way to clean energy to actual physical infrastructure like you know bridges and and tunnels and roads and in that what I think you're mandating is a certain percentage of things to be made domestically in the United States and you start to get people back to work so the short term path I think is to kind of baseline the disease and get the people who are allowed to be working back into a green zone of every city every town where people with these green and blue bands are allowed inside and the red banded people have to stay and quarantine themselves so that we can start to restart this economy and then longer-term is an infrastructure build that basically resets incentives towards resiliency towards inefficiency away from efficiency I think that's a pretty solid plan I'm shot I'm actually shocked that some of this hasn't been instituted already the lack of testing just blows my mind I mean the stats I saw on Saturday 895 thousand people I think I've been tested at a 330 million in the United States I think the other reckoning that we have to do maybe just to finish on this is that we've politicized things that should never have been politicized health should not be politicized you know the problem is that starting with Obamacare health became something that was about the Democrats versus the Republicans and you can see how that's sort of like you know flowed into things like the FDA and the CDC and history will tell what they could have done better history will tell what the w-h-o should have done differently but I think what we can see is that there are many points along the evolution of this disease where logic and open-mindedness and iteration ran into bureaucracy and bureaucracy one and I think that's probably the most generous way of describing it and we need to figure out where there are almost constitutional level provisions you know you have the right to bear arms great what about the right to basically not you know not die in a preventable scenario what does that mean for how these organizations should run you know we at a very basic level have told the healthcare infrastructure that we must do no harm and I think it's time to say look with 8 billion people in the world and a 90 trillion dollar economy that supports those eight eight eight billion people do no harm doesn't work anymore it doesn't scale we need to do our best and there's a lot of rules that could change in a scenario where you embrace do your best and I think that that that has to happen but the failures of the political infrastructure and the healthcare infrastructure to use bureaucracy as the thing that that drives decision making I think is also the a domino that has to fall after this and we need to revisit because it's a you know we've we've done a lot of unnecessary damage to ourselves and some of this some of these self-inflicted injuries we should figure out how to prevent for the next time because it's gonna come again yeah I think we're living in incredibly uncertain in chaotic times and you know one just thank you for your time today but uh too is uh think I speak for a lot of people in that we'd love to see you go public and kind of be along for the journey so you're doing an incredible job and I just appreciate you uh kind of going out there and sticking your neck out there frankly because a lot of people who they they're gonna all be the armchair quarterbacks right okay two three years from now like I said I told you that we should have done X or Y but right now they're they're kind of quiet so we'll see how it plays out well I really appreciate the fact that you had me on and I just want to say that I think you've been a really good person in being out there in this moment the reality is like in moments like this you need people to be coalescing opinions and I think that you've done that that's a really important service because it allows people to get to ground truth so I just want to say thank you for doing that thanks for including me no problem at all all right sir well thank you a teacher all the best talk to you soon right bye

Channel: Anthony Pompliano

Views: 1,301,500

Rating: 4.8445377 out of 5

Keywords: bitcoin, btc, off the chain, podcast, pomp, anthony pompliano, crypto, cryptocurrency, blockchain, finance, investing, fintech, tech, technology, investing news, financial news, btc price, bitcoin price, markets, bitcoin news, media, Golden State, Warriors, Golden State Warriors, Facebook

Id: _hA3TV1bGsg

Length: 82min 41sec (4961 seconds)

Published: Thu Apr 02 2020

Reddit Comments

[u/Amichateur]

<http-youtube-link>?t=34m48s

try it

[u/ForWhenImWeird]

A lot of interesting points made... but I cant help but feel that people overlook the generational aspect of cryptocurrency.

I’m definitely not claiming to know what I’m talking about but perhaps speculation and hype among an entire generation who grew up with technology may very well be all BTC needs; especially when said generation is going to be seeking out leadership positions soon enough.

[u/CoinDaddy88]

Chamath is Satoshi.