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Speaker 1: So it's been the must buy stock because it's a

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good company and they're killing it what they do, and

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it's been the must buy stock because everyone's buying it.

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So more people are buying it because everyone's buying it,

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which means more people are buying it, So perhaps it's

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share price shouldn't be what it is now. The Chinese

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Communist Party has come for Nvidia and said, yeah, we

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think you might be a monopoly. Certainly nothing political there,

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we'll talk about that, plus sort of you should probably

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be alarmed about a company that's making a lot of

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waves and sucking a lot of people in, and it

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might be speculation if people are investing this. We'll talk

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with Zach Abraham, who had a fascinating piece on the

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Twitter machine about how to speculate in the market in

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a way that's responsible. What starts with understanding what speculation is.

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We'll chat with Zach about this with the help of

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God Almighty.

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Speaker 2: But Todd Harman show is one disapproved by big pharma,

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technocurrency and sway from the high mountains of Free America.

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Here's the Emerald City exile.

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Speaker 3: To her Man.

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Speaker 1: Today is today the Lord has made in These are

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the times so which God has decided we shall live.

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My friend and brother, Zach Abraham, joins us. Zach, welcome

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back to the program.

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Speaker 4: Good to be back as always, sir, Thanks for having me.

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Speaker 1: Pleasure just reading a little light reading here about the

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Biden administration spying us through our bank accounts and our

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financial data and targeting Trump supporters. Certainly a reason to

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have a lot of zeal about continuing to bank in

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America and feeling very very good about our government.

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Speaker 4: I'm feeling good. Well, I mean, I'm I mean, I

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know there's plenty of people that aren't feeling good. The

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Lord knows right. I mean, it's it's and you know

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what's really interesting, man, And you're seeing it in a

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lot of different places, and some of it is somewhat surprising,

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and I'm starting to hear other people starting to pick

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up on it. There is and you see it in

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the small business data. You see it. And there I

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thought about you. There was a funny funny. Do you

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know anything about this guy? He's primarily an investment journalist,

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typewriter or whatever. But his name's Rick Newman for Yahoo Finance.

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You ever read that? Okay, He is a water carrier

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for the last. Yes, right, So all this good economic

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news is coming out post election, right, Like, so a surgeon,

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new cars being purchased, right, did you hear the reason

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he offered for that? Well, people are probably buying new

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cars because they know Trump tariffs are going to make

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the cost of cars go through through so they're getting

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in before it gets nasty. And I'm sitting there going, Okay,

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first of all, no matter what Trump does, there's no

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way he's going to do to the price of cars

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what your homeboy Joe Biden did, right, Okay, first of all, Second, Rick,

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I don't know of any consumer base that goes out

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and purchases expensive, durable goods in anticipation of things getting.

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Speaker 1: Bad's that's a strong point, sorry, not how it works, right.

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Speaker 4: And then what's also funny is that married right up

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on the same day that car report came out. It

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married right up with the Jolts Report, which is job openings.

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And there's been a surgeon job openings. So new cars

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so surging, new job opening surging. But it's all because

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everybody knows that it's gonna be so far these people, man,

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and I've I've been choking on that, guys, I've been

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choking on that guy's writing for years, just because I

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make myself read his nonsense just to know what idiots

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are thinking.

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Speaker 1: Yeah, and I continue to watch with wide eyed fascination, amazement,

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and sickness. Is that where people screaming about fascism is

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on the way.

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Speaker 3: It's right around the corner here.

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Speaker 1: Comes to urge fascists. And I'm reading this report from

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Life site News. This is financial monitoring of our finances.

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This is through they purchased third party information they do.

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It's no warrants, They've just got and purchased the information.

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And of course they can use finsend for purchasing above

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a below ten thousand bucks, all sorts of ways you

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can go get this. If you buy bibles or firearms,

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you are flagged as an extremist. This is from a

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House report. Purchasing bibles or flyrearms flags you as an extremist,

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and the committee says your beliefs are your bank account.

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Speaker 3: You can't have both.

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Speaker 1: That they're building up a database for prospective dbanking. And

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this is of average people because they've got out and

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they've dbanked the big guys, some of Team Trump. But

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they've been monitoring all of us and stacking us up

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into these little corners of baddies. But it's Trump that's

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the economic fascist and the social fascist.

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Speaker 4: No, naturally, naturally, yeah, well, I mean you understand where

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they're coming from, though, I mean, when you understand his

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plans to put gay people and minorities in concentration camps,

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you know, I mean that it shouldn't have any freedom

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loving person pause.

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Speaker 1: Right, That's that's obviously why they removed the objection to

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same sex marriage from the Republican platform.

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Speaker 3: That's obviously to get to the.

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Speaker 1: Concentration camps, because that makes things easier by having Peter Teel,

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who is an openly same sex attracted man, being one

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of their top strategists and then one of the choices

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for Secretary of States as well. So maybe maybe that's

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not right.

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Speaker 4: Well, yeah, you get. I mean, I think you're right

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on top of this here. And I think the other

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thing that you got to consider too, is that all

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of this is pressed are precipitated by the fact that

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Donald Trump has become he is a founding member of

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the extreme religious conservative right. Right right, I mean, bottom

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line is, all Donald cares about is what's in the Bible.

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He wants to reinstitute test law. He's a Limitic law.

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Speaker 1: He can't quote the Bible by his own admission, but

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whatever's in it is that's what he wants.

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Speaker 4: Yeah, you know the historical interviews with Clayboy. I mean

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this guy, right, He's a Christian extremist.

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Speaker 3: Is what he is?

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Speaker 1: Right, that's clear for everybody. There's a form of extremist

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economic extremist. You have educated me about in relation to

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share price, and I want to talk about this with Nvidia,

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and then I want to work into an analysis you

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did on Twitter about how to speculate in responsible ways.

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So I want to use two examples in video and

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I want to use this micro strategy and then walk

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I want to walk through your your thread here because

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if people want to speculate, I want them to do

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this in a wise way. I'm using a product that's

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whyse It's called Wisdom. It's a Bible based herbal blend.

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I'm holding it now and in fact, if friend of

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the video service, you notice I'm taking a dropper out

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of this. I'm having it that gets almost sweet, like honey,

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this is so good, I could drink this. This was

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inspired by doctor Patrick Send tempo, and he was in

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the Holy Land walking where Jesus walked. He's a doctor,

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he's a health freedom guy, and he got to thinking

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about how often sacred herbs are mentioned in the Bible.

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This is gmo free, it's gluten free for those who care,

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it's vegan, and it contains sacred herbs. But he did

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something else. He infuses this to sound waves and light

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waves and he makes it in cold brew small batch,

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so it locks in the potency of these herbs.

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Speaker 3: What do they do?

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Speaker 1: Healthy immune response, healthy response to inflammation. You can actually

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harness inflammation for muscle gains if you do it the

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right way. Joint relief, a feeling of relaxation. All of

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this inspired by the Bible and the skills that doctor

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jin Temple has been given by God to Steward.

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Speaker 3: So try this. Go to try.

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Speaker 1: Wisdom noow dot com slash todd Try Wisdom now dot

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com slash todd. You will get thirty three percent off.

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You will also get free shipping. You'll get one hundred

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and eighty day money back guarantee at triwisdomnow dot com

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slash todd. So a couple companies and then we'll get

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into this speculation thread that Zach gifted the world with

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so in video shares fell after China said it's opened

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up an investigation over possible violations of monopoly law. Now

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that's interesting coming from the Chinese Communist Party, which controls

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every company in China. There you go, Hey, all of

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a sudden, maybe in Vidia is not quite the.

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Speaker 3: Safe bet that everybody said.

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Speaker 4: Well, and this is this is kind of illustrates or

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highlights of a fear and issue I've had for a

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really long time, okay, which is so if you look

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at the world, and we look at the world in

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the context of like pre COVID and post COVID, right, actually,

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you know what, what's funny? And you could even do

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this with eight O nine because I think that was

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actually the pivot point. And I think that it's become

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abundantly clear since twenty sixteen, you know, via the election

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of Trump Brexit that things have progressed, but the world

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has become decidedly less collaborative, right yep. So, and and

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you know, the whole the whole push towards geo uh,

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you know, global economy, all that kind of stuff.

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Speaker 2: You know.

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Speaker 4: I think the thing that we do when we critique things,

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especially for those of us more on the conservative side

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of things, and I think especially those of us that

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are more on the Christian conservative side of things, I

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think that we need to be the place that becomes

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synonymous with being factually correct.

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Speaker 2: Right.

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Speaker 4: We need to have reliable, reliable information and reliable data

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and and know what we're talking about. So if you

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look like I said, so, if you look at the

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world is becoming less collaborative, and and there were benefits

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to globalism, right, globalism for instance, it it there were

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a lot of benefits. It helped the explosion and a

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lot of technological advancements. It also was a big component

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in the unbelievable profit growth that we've had here in

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the United States. The problem is is it came at

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a cost too high. Right. So, so like everything you know,

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getting more globalistic in the nineties was probably a right

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idea what we do, we went we took it too

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far right, And so the world is getting less collaborative. Well,

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when you look at the dominating nature and dominating in

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a complementary fashion. So I'm not saying it in a

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pejorative way at all, But if you look at the

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dominate the dominating nature of the giant tech companies. This

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is one of the issues I've had looking around the world, going,

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do you think a bunch of these other countries, especially

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the ones that have some real stroke on the on

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the global stage, meaning they really make waves, the China's

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of the world, right, the Indias of the world, do

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you really think they're going to allow our tech companies

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to come in there and do to them what they

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have done to us, meaning open up the you know,

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open up the door to being in koots with government. Uh,

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what about all the profit that they extract that? What

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if it's just an economic argument where they're like, hey,

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we love your tech, but here are the constraints that

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we're gonna put on you operating in our country or

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being listed on our stock exchanges, because we don't want

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you extracting all that value. We want Indian or we

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want Chinese companies to play that role. Right, And China

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has already taken several steps in that direction with the

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restrictions they put on Amazon operating in their country. Right,

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so that we we've already seen that. Well, now you go, okay,

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if you look at Trump in office, we're in a

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we're in a less collaborative place than we were with

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Biden clearly, yep. Uh. Part of it's probably because you

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know Trump, you know, or or excuse me, Biden. You know,

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we're no longer getting back alley deals from the Chinese.

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They're gonna pay one of Trump's sons three million dollars

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a year to sell on the board, right, So there's

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like there's less ties that bind, if you will, and

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so so I think that what you're seeing. I think

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one of the biggest issues with the value euations of

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these companies, like in Nvidia, like Apple, like you know,

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Mike Microsoft, like Google. One of the one of the

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things that we hold my biggest concern on holding Google

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on a valuation basis. Uh, Google is a little bit

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different because it's trading so much cheaper than those other

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companies are, though, so it's got some bad news priced

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into it, and we really think it's really undervalue. But

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you look at these other tech companies, you have so

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much of that you know, that that excitedness, right, that

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euphoria built into the price of these companies, And I

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just think everybody's really overestimating in a more competitive world

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that these countries are just going to open the door

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and allow these tech companies to roll in there and

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extract that much profit from their economy. I just don't

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see it, and I think that is going to be

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one of I think that, and honestly, a cut in

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regulations is going to be something that is not helpful

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to big tech.

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Speaker 3: Get got it?

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Speaker 1: And people continue to buy in video because people are

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buying in VideA. We've been talking about like it's a

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great company, but it is not a company that's free

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from controversy or risk, and it's a pretty big risk.

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If the Chinese Communist Party says, yeah, no China market

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for you, that's a pretty enormous risk. There's another company

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we need to talk about that is not and this

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is coming from you, and I trust you, not a

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good company, and I think I want to compare them,

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Zach to your speculation thread that you put up, and

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we'll do this here at a second, guys, don't speculate

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on your body.

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Speaker 3: Don't do this.

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Speaker 1: I mean, yes, it's one thing to try a supplement

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that I endorse and I always try these and that's.

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Speaker 3: A low risk. But please hear this.

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Speaker 1: If you have a surgical team who's telling you you

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have to have back surgery. Do you know the success

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rate and back surgery for some forms of back surgery,

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it's flat almost zero. And so please please please get

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a second opinion from renew that healthcare in Mexico. Please

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just let them have access to your MRIs. They'll tell

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you if they can help you. You might avoid surgery

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with ethically gathered stem cells that can rebuild ustle, intended

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even cartilage. Same thing applies to your knees. And there's

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one thing that I don't like talking about because it's

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an uncomfortable topic, but it occurred to me.

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Speaker 3: I've never mentioned this so for I hate this man.

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I can't believe I'm about to say these words.

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Speaker 1: Erectile dysfunction. It happens to people. Sometimes it's a nerve thing.

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Sometimes it's an age thing. There's surgeries, there's pills, there's shots.

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Can I tell you something I talked to the guys

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that we knew about this. A stem cell approach to

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this re grows cells, it re animates. Okay, I want

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to be very careful and respectful. You don't need to

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have shots, you don't need to have surgery. Okay, The

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ethically gathered stem cells regrow body parts and cartilage, tissue, muscle,

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and then the very very serious one traumatic brain injuries.

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I'm familiar with now three cases where renew has seen

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incredible results using these ethically gathered stem cells. Never anything

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to do with abortion, not ever to help people recover

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from traumatic brain injuries from horse riding accidents, car accidents,

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biking accidents. Okay, please do not buy what the American

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pharma and surgical complex is telling you. Find out for

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renew if they can help you, and I promise you,

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I promise you. If they cannot help you, they'll tell you.

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They told me and I talk about them publicly. Hey,

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we can't help you avoid surgery, Todd, We're sorry, but

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we can help you recover a thousand times faster.

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Speaker 3: And they did. It's Renewed.

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Speaker 1: Go to our e n U E dot Healthcare. That's

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our e n U E dot Healthcare. So, Zach, there's

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a thread you put up. We'll go through this. I

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want to go through this quickly, and then I want

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to apply this company to this and use this thread

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for a discussion you wrote. I think Dash, I know

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speculation can be a wonderful source of alpha, and you

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need to explain it.

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Speaker 2: To us.

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Speaker 1: When deployed executed, it can actually decrease risk and volatility.

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Speaker 3: Here's the problem.

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Speaker 1: Most market participants don't know how to speculate a thread

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and will unpack these. I'll just give thee highlights. First,

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speculation isn't an investment, it's a bet. Second, speculation isn't

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a trade. Third, you must truly understand convexity and learn

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to target only convex setups. Fourth, you cannot speculate using leverage.

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Speaker 3: Fifth, be selective.

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Speaker 1: Lastly, you must memorialize your wins. And we'll go through

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and we'll pack the greater statements you've made. But let

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me bring into this a company that's getting a huge

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amount of attention. And you said a lot of retail investors.

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That's people like me and a lot of the podcast

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family are investing this. It's this company called micro Strategy,

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which has valued itself at some enormous amount of money.

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They just turned around about another two point one billion

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dollars in bitcoin and drawing increased scrutiny from regulators. So

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what is micro Strategy and explain this to us? And

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you seem deeply concerned about people getting really taken for

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a ride.

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Speaker 4: Yeah, and One of the one of the nice things

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about this conversation is it sounds funny, but I like

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having financial discussions, or I guess the best way to

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put is that financial discussions or investment discussions that I

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like having the most are ones that are independent of

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my opinion, you know, meaning because this industry is so

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filled with so many opinions. And one of the things

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I've learned is that given given up a certain place

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or certain time, any opinion is almost viable. Right. Like,

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this stuff, but I'm going to tell you today, though,

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is purely fact based. It is law based, it is

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regulation based. Because I want to try to pull out

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as much opacity and smoke out of this and so

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people really understand what's going on. I also there's also

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kind of a weird little preamble here, but I mean

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this earnestly. I think that it is going to be

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a much easier thing for your audience to absorb because

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of the percentage of people that are spiritually spiritually focused, right, meaning,

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one of the things that you have to do in

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an environment like this is you have to what is

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going on in this environment right now? Is A good

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buddy of mine called it financial nihilism, which is, we

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don't care. How. All we care about is just making money.

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If we make money, great, we don't care how right,

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So we don't care, right, Yep, We're gonna go buy

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ridiculous things because we think there might be a short

348
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squeeze even though we know that it's not worth this. Right,

349
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it's I don't care, you know, yolo, right, you only

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live once?

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Speaker 2: Yep.

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Speaker 4: Right, financial nihilism, and so in that, in that context,

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what has defined a good or bad investment has been

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purely the movement of the price. Okay, so price goes up, people,

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what's not a fraud? The price is gone up, and

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you're like, well it usually does, right, That's kind of

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a hallmark of most frauds. But what I mean by

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that is I see a lot of I see a

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lot of Christians getting caught up this too, a lot

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of people that would you know that talk about you know, look,

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at the end of the day, what is price price

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on any short term basis in any market? Is opinion?

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Speaker 2: Right?

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Speaker 4: Does the generalized opinion that only fans is a wonderful

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thing for sex workers? Does that open the door for

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your listeners to go become only fans? Members and pay

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s description fees.

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Speaker 1: Well, pray God not since it's also adulta in fornication.

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Speaker 4: Right. But my point is is that regardless of what

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public opinion is, as christ followers, there's a set of

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rules that we know always hold true, right, right, And

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there's a set of rules that regardless of what society says,

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we're going to hold to them right right. Investing is

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very similar, meaning when you look at periods of times

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of people that have made really good money and people

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that have lost it or people that have maintained it,

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one of the constant threads you see in successful investors

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is the complete willingness and ability to cut against popular opinion, right,

379
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to sit there and to value data and intellect and

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wisdom and math above price movements, and having the discipline

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to allow those price movements to go against them for

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an extended period of time. Right. But the key part

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to it is we as Christians need to be able

384
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to identify what is the good stuff and what is

385
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the bad stuff, and we cannot allow that to be

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you know, polluted by opinion, right a popular culture. So

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now with that preamble, I pardon the length, but getting

388
00:20:32,640 --> 00:20:36,720
into a discussion about micro strategy, the ticker symbols MSTR,

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00:20:36,839 --> 00:20:38,960
and this has been all the rage the stocks going

390
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through the roof. Okay, it is going through the roof

391
00:20:43,039 --> 00:20:48,000
for I wouldn't say fraudulent reasons because the company is

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being very open about what they're doing. So, and I

393
00:20:51,279 --> 00:20:53,680
think we've talked about it before, but they're a tech

394
00:20:53,720 --> 00:20:57,839
company that sells some tech hardware. It's a decent business,

395
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but really nothing in and of itself. Probably on a own,

396
00:21:00,240 --> 00:21:02,480
it's a one and a half to two billion dollar business. Okay,

397
00:21:02,519 --> 00:21:04,400
so not a bad business, but nothing like this, okay.

398
00:21:05,000 --> 00:21:07,720
And so what they've done is they have issued a

399
00:21:07,759 --> 00:21:10,920
bunch of zero coupon meaning death it doesn't pay any

400
00:21:10,960 --> 00:21:15,160
interest rates they and I believe the structure is they've

401
00:21:15,160 --> 00:21:16,880
issued it. I don't want to get your people lost

402
00:21:16,880 --> 00:21:18,640
in the weeds, but basically they've issued it as a

403
00:21:18,680 --> 00:21:23,200
discount to par. And the way that the bond holders

404
00:21:23,240 --> 00:21:25,759
that buy these bonds can make money is the value

405
00:21:25,759 --> 00:21:27,200
of the bond can go up over time because it

406
00:21:27,240 --> 00:21:30,480
can reach par value and they're using borrowed money. Basically,

407
00:21:30,480 --> 00:21:34,279
they're levering up the company's balance sheet with unbelievable amounts

408
00:21:34,279 --> 00:21:35,599
of money. I mean, I think they've got like something

409
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like sixty or seventy billion in debt or maybe not

410
00:21:37,680 --> 00:21:40,119
that much, but anyway, they're they're stacking on unbelievable amounts

411
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of debt to buy bitcoin, okay, and they've created this

412
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whole narrative and all the bitcoin people are all excited

413
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about it. They're like, oh, you got to own bitcoin

414
00:21:47,279 --> 00:21:49,720
and master Okay, So let's take a step back first

415
00:21:49,720 --> 00:21:52,960
of all. Okay, first of all, what they are doing,

416
00:21:53,160 --> 00:21:55,759
and it's more complicated, it's more convoluted. Remember when we

417
00:21:55,839 --> 00:21:58,839
talked about one of the quickest ways to avoid scams

418
00:21:59,240 --> 00:22:01,039
or ways you're going to lose a lot of money,

419
00:22:01,480 --> 00:22:04,240
one of the simplest ways to identify things you want

420
00:22:04,279 --> 00:22:08,039
to stay away from are things that have unnecessary complexity, right,

421
00:22:08,759 --> 00:22:14,559
So unnecessary complexity. Here they are levering up their balance

422
00:22:14,599 --> 00:22:19,720
sheet to buy Now remember you don't they're not paying

423
00:22:19,799 --> 00:22:22,640
interest on that debt. So that's one saver for them

424
00:22:22,680 --> 00:22:25,400
because the zero coupon debt. But that debt has terms

425
00:22:25,440 --> 00:22:28,359
on it. Okay, so they've either got to repay the debt,

426
00:22:28,400 --> 00:22:30,640
which they have promised not to do because they're not

427
00:22:30,640 --> 00:22:32,920
going to sell any bitcoin. When You've got a company

428
00:22:32,920 --> 00:22:35,240
that's worth one to two billion dollars and you own

429
00:22:35,400 --> 00:22:36,839
how many I think? I mean, I don't know. They

430
00:22:36,839 --> 00:22:40,039
own billions, tens of billions of dollars worth of bitcoin. Right,

431
00:22:41,799 --> 00:22:45,000
if the bitcoin starts going south, you'll be forced to

432
00:22:45,039 --> 00:22:47,920
sell it. The business can't support it. Right, it's forty.

433
00:22:47,720 --> 00:22:49,559
Speaker 3: One billion in bitcoin they own?

434
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Speaker 4: How much?

435
00:22:50,640 --> 00:22:53,079
Speaker 1: Forty one billion, and they're gonna they plan to raise

436
00:22:53,119 --> 00:22:55,400
forty two billion so they could get up to eighty

437
00:22:55,400 --> 00:22:57,680
three billion in bitcoin right now, it's forty one billion

438
00:22:57,720 --> 00:22:58,240
they own.

439
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Speaker 4: Yeah, so they're just issue in debt like crazy, okay,

440
00:23:01,519 --> 00:23:04,799
and everybody's all excited about this. What the investors in

441
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micro Strategy do not understand is that they have zero

442
00:23:08,880 --> 00:23:13,599
claims on that bitcoin. Zero. So if that company were

443
00:23:13,599 --> 00:23:15,440
to get liquidated because it can't pay its debts, they

444
00:23:15,440 --> 00:23:16,599
get none of that bitcoin.

445
00:23:17,640 --> 00:23:17,799
Speaker 2: Right.

446
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Speaker 4: Meanwhile, all of that market cap evaporates, right, And the

447
00:23:21,799 --> 00:23:25,319
reason they don't is because the creditors come before equity holders.

448
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So if they go on, so these people are buying

449
00:23:28,519 --> 00:23:30,720
the stock and bidding it up, now check it out,

450
00:23:31,400 --> 00:23:37,279
the debt converts into stock. Okay, So what now? Remember

451
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all the bitcoin people the reason they love bitcoin so

452
00:23:40,039 --> 00:23:43,799
much is it's anti fiat currency. Right, they can't make

453
00:23:43,839 --> 00:23:46,079
any more of it. It's like digital gold, all this

454
00:23:46,119 --> 00:23:49,039
kind of stuff. Well, now they love this company. This

455
00:23:49,119 --> 00:23:53,119
company is using leverage to purchase the bitcoin of which

456
00:23:53,160 --> 00:23:57,359
the shareholders of the company have zero claim to none.

457
00:23:57,920 --> 00:24:01,000
And oh, by the way, the one thing that they

458
00:24:01,079 --> 00:24:04,920
can bat on is they're going to get diluted, right

459
00:24:04,960 --> 00:24:08,359
because why that debt is going to convert into equity.

460
00:24:09,240 --> 00:24:13,640
So literally, they are buying bitcoin in a vehicle that

461
00:24:13,839 --> 00:24:17,440
nullifies all of the advantages and reasons they like bitcoin.

462
00:24:17,680 --> 00:24:19,200
Speaker 3: But they're not buying it, they're renting it.

463
00:24:19,759 --> 00:24:23,039
Speaker 4: Yeah. Well, you know it's even worse. They're buying shares

464
00:24:23,039 --> 00:24:24,279
in a company that's renting it.

465
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Speaker 1: So they're buying shares in a company that's renting bitcoin,

466
00:24:27,519 --> 00:24:31,160
doesn't even really own it. And there is an absolute

467
00:24:31,160 --> 00:24:34,440
promise that we don't owe you a dime if it

468
00:24:34,519 --> 00:24:39,079
remains debt and if it converts to equity, Congratulations, you

469
00:24:39,119 --> 00:24:43,039
have equity in a company that's renting bitcoin that doesn't

470
00:24:43,039 --> 00:24:43,359
own it.

471
00:24:44,079 --> 00:24:46,440
Speaker 4: Yeah, and so what and so and here you need

472
00:24:46,440 --> 00:24:48,880
to understand the thinking that goes behind this too, the

473
00:24:48,920 --> 00:24:51,960
bet that he's making or the bet that these well,

474
00:24:52,000 --> 00:24:54,240
most people aren't. They don't understand what we're talking about.

475
00:24:54,279 --> 00:24:57,759
But the bet that he's making is what he's what.

476
00:24:58,359 --> 00:25:00,519
The people that understand this bet that think it can work.

477
00:25:00,559 --> 00:25:02,440
I don't understand why they think it can work, because

478
00:25:02,480 --> 00:25:05,079
these schemes have been tried many times. This isn't the

479
00:25:05,079 --> 00:25:07,319
first time somebody's gonna lever up their balance sheet to

480
00:25:07,319 --> 00:25:11,960
buy a non cash flowing asset. Okay, Now, it never works, right,

481
00:25:12,079 --> 00:25:16,000
just because eventually there becomes there becomes an imbalance. Now

482
00:25:16,039 --> 00:25:18,039
this is a little bit different because they are zero

483
00:25:18,079 --> 00:25:21,440
coupon bonds, okay, but the impact to the underlying shareholder

484
00:25:21,480 --> 00:25:24,359
is the same because what they're betting on basically is

485
00:25:24,400 --> 00:25:26,799
that the price. The way, the only way this works

486
00:25:27,039 --> 00:25:29,839
is if bitcoin keeps going up into perpetuity, right, It's

487
00:25:29,839 --> 00:25:33,480
the only way it works, Okay. And then eventually what

488
00:25:33,519 --> 00:25:35,240
you do, and I don't even know how that works,

489
00:25:35,279 --> 00:25:38,759
because eventually you've got to pay down the debt. But basically,

490
00:25:38,799 --> 00:25:41,720
what you're what you're hoping for, I guess is you're

491
00:25:41,799 --> 00:25:45,519
hoping that bitcoin accelerates at a rate that outpaces the

492
00:25:45,559 --> 00:25:48,519
rate you're being diluted at either way you sit there

493
00:25:48,599 --> 00:25:52,079
and go, guys, just take the money and go buy bitcoin.

494
00:25:52,200 --> 00:25:54,640
Speaker 3: That's my point. That's the needless complexity.

495
00:25:55,160 --> 00:25:58,319
Speaker 1: Right, You're giving this money to this company, this renting bitcoin,

496
00:25:58,599 --> 00:26:01,640
so you don't even you don't even rent it, they

497
00:26:01,720 --> 00:26:04,480
rent it. You just give them money that they say

498
00:26:04,559 --> 00:26:06,160
right up front, we're never going to pay you interest

499
00:26:06,279 --> 00:26:09,559
on this. It might convert to equity. But then again,

500
00:26:09,839 --> 00:26:12,440
worldly renting the bitcoin when you could just save up

501
00:26:12,440 --> 00:26:15,599
some money go buy some bitcoin. Yeah, then you actually

502
00:26:15,680 --> 00:26:19,880
own the bitcoin and all of the advantages of the bitcoin. Well, gosh,

503
00:26:19,920 --> 00:26:22,720
I wonder why regulators are starting to look into this

504
00:26:22,759 --> 00:26:23,319
a little bit.

505
00:26:23,480 --> 00:26:26,119
Speaker 3: That's that's well so fascinating.

506
00:26:26,640 --> 00:26:29,279
Speaker 4: Yeah, and it's and look, here's the one thing that

507
00:26:29,359 --> 00:26:31,880
I can tell you is that we are getting into

508
00:26:31,920 --> 00:26:35,319
the silly phase of this whole thing. Apple now has

509
00:26:35,400 --> 00:26:38,279
hit a new all time high Apple and Apple has

510
00:26:38,319 --> 00:26:42,240
grown six percent in the last two and a half years. Okay,

511
00:26:42,519 --> 00:26:44,359
And if I pulled up a chart, it'd make your

512
00:26:44,400 --> 00:26:46,480
eyes water. But we show a chart that shows the

513
00:26:46,599 --> 00:26:50,480
valuation of Apple on one line, and then we show

514
00:26:50,839 --> 00:26:53,359
the increase in profits on one line, and the two

515
00:26:53,400 --> 00:26:55,160
lines tod have gone like this.

516
00:26:55,440 --> 00:26:59,039
Speaker 1: Yeah, evaluation straight up and profits are flatlining.

517
00:26:59,599 --> 00:27:03,079
Speaker 4: You you will remember this, I doubt you won't remember this.

518
00:27:03,720 --> 00:27:07,119
You remember Scott McNeely of Sun Microsystems, Yes, very well, okay,

519
00:27:07,720 --> 00:27:10,400
you remember the famous speech he gave two or three

520
00:27:10,440 --> 00:27:12,680
years after the crash and they were like, you know,

521
00:27:12,720 --> 00:27:14,200
your stock crash. And he kind of looked at very

522
00:27:14,240 --> 00:27:16,200
and he goes, what did you think was gonna happen?

523
00:27:16,200 --> 00:27:17,960
He goes, I'm not the one that determined the price

524
00:27:18,000 --> 00:27:20,519
of the stock. And he gives this lecture and he goes,

525
00:27:21,000 --> 00:27:23,039
you guys, bid the stock up to where it got

526
00:27:23,119 --> 00:27:25,039
up to ten x revenue. Yeah, and he goes, do

527
00:27:25,079 --> 00:27:28,559
you understand what that means? Not ten times profit ten

528
00:27:28,720 --> 00:27:31,039
x revenue. So he kind of walks through, how ridiculous

529
00:27:31,079 --> 00:27:35,200
of the evaluation is that? Yeah, Apple, the largest corporation

530
00:27:35,359 --> 00:27:38,880
in the history of public markets and in the history

531
00:27:39,279 --> 00:27:44,559
of commerce, is now trading at ten x revenue and

532
00:27:44,680 --> 00:27:45,759
it isn't growing.

533
00:27:47,160 --> 00:27:48,720
Speaker 3: So so insane.

534
00:27:48,839 --> 00:27:52,519
Speaker 1: All right, let's apply your speculation thread to some of

535
00:27:52,559 --> 00:27:55,160
these things, or zach in a second, people are heading

536
00:27:55,200 --> 00:27:58,200
into Christmas, prices have gone up and time has gone down.

537
00:27:58,240 --> 00:27:59,559
Speaker 3: Notes only two weeks left.

538
00:28:00,000 --> 00:28:01,839
Speaker 1: Hey, is the shipping it to come on time, and

539
00:28:01,880 --> 00:28:03,319
are people gonna make it on time?

540
00:28:03,359 --> 00:28:04,359
Speaker 3: And are you going?

541
00:28:04,519 --> 00:28:06,200
Speaker 1: You know, I have a friend of mine who's arguing

542
00:28:06,200 --> 00:28:08,599
with his wife. Are we going to Arizona? We're staying here?

543
00:28:09,000 --> 00:28:10,880
Might be that after thirty years of marriage, I have

544
00:28:10,880 --> 00:28:13,200
a Christmas apart and there's bad blood and she wants

545
00:28:13,200 --> 00:28:16,640
her family up here, and it's sis so stressful for people.

546
00:28:16,960 --> 00:28:17,960
Speaker 3: Here's a hack.

547
00:28:18,160 --> 00:28:20,119
Speaker 1: Right, In addition to the Word of God and taking

548
00:28:20,119 --> 00:28:24,400
all spirits captive, here's a hack. Magnesium Breakthrough is a

549
00:28:24,680 --> 00:28:29,160
full spectrum magnesium suppent with seven forms of organic magnesium.

550
00:28:29,359 --> 00:28:35,920
One of its superstar outstanding capabilities is to reduce stress

551
00:28:36,559 --> 00:28:39,960
by helping to control the stress hormone cortisol. When it

552
00:28:40,000 --> 00:28:44,119
does that, you feel less stress, you feel more relaxed.

553
00:28:44,279 --> 00:28:47,519
It allows you to enjoy things better, and incidentally, you

554
00:28:47,559 --> 00:28:50,319
will probably sleep better. It'll be doing a lot of

555
00:28:50,319 --> 00:28:53,000
great things in the background, like helping you absorb carbohydrates

556
00:28:53,000 --> 00:28:56,119
more efficiently. But the primary thing in this season is

557
00:28:56,200 --> 00:28:59,559
please don't allow it to stress you out. Try to

558
00:28:59,599 --> 00:29:02,279
do stress your holidays. Good to biptimizers dot com slash

559
00:29:02,319 --> 00:29:04,880
Todd use promo code Todd to get an extra ten

560
00:29:04,960 --> 00:29:09,880
percent off magnesium breakthrough. That's biptemizers dot com slash Todd

561
00:29:09,960 --> 00:29:14,559
promo code Todd. So Zach, you put on the twittershx machine,

562
00:29:14,599 --> 00:29:16,960
this really interesting thread, and then we need to start with

563
00:29:17,079 --> 00:29:19,960
just decoding some things for folks. Yeah, he wrote, I

564
00:29:19,960 --> 00:29:23,079
think dash. I know speculation can be a wonderful source

565
00:29:23,119 --> 00:29:26,440
of alpha when deployed executed correctly, it could actually decrease

566
00:29:26,519 --> 00:29:29,559
risk and volatility. Here's the problem. Most market participants don't

567
00:29:29,599 --> 00:29:32,319
know how to speculate a thread. What does funding alpha mean?

568
00:29:33,519 --> 00:29:37,039
Speaker 4: So alpha would be any type of excess return you

569
00:29:37,160 --> 00:29:40,799
generate over any type of given data set or market

570
00:29:40,839 --> 00:29:42,880
or index. So meaning like let's say I'm index to

571
00:29:42,920 --> 00:29:45,200
the s and P five hundred. If the SMP is

572
00:29:45,279 --> 00:29:47,279
up ten percent in the year and I'm up thirteen,

573
00:29:47,839 --> 00:29:49,640
I've generated three percent of alpha.

574
00:29:49,680 --> 00:29:50,319
Speaker 3: Got it.

575
00:29:50,079 --> 00:29:52,680
Speaker 4: That's a that's a very simplified way to think about it.

576
00:29:52,680 --> 00:29:54,640
But that's that's the basis of it, all right.

577
00:29:54,519 --> 00:29:56,680
Speaker 3: So first paragraph for our first tweet.

578
00:29:57,000 --> 00:29:59,960
Speaker 1: First you write, speculation isn't an investment, it's a bet.

579
00:30:00,359 --> 00:30:01,599
Speaker 3: So it's all about sizing.

580
00:30:02,079 --> 00:30:04,200
Speaker 1: A good place to start is speculating with no more

581
00:30:04,240 --> 00:30:07,319
than your investment portfolio yields. What with no more than

582
00:30:07,319 --> 00:30:10,920
your investment portfolio yields. If you do more than two

583
00:30:11,119 --> 00:30:14,160
x your bet, sell half and pay your portfolio back.

584
00:30:14,200 --> 00:30:16,039
If you lose it, you're done for the year. So

585
00:30:16,079 --> 00:30:17,279
help us understand that too.

586
00:30:18,279 --> 00:30:21,839
Speaker 4: So, so you hear all this talk about speculation, I'll

587
00:30:21,880 --> 00:30:24,680
just give you some. I'll give you some classic examples

588
00:30:24,680 --> 00:30:28,440
of what we've done. Yeah, First of all, you need

589
00:30:28,480 --> 00:30:33,799
to understand the difference between speculating and investing. Okay, when

590
00:30:33,839 --> 00:30:37,000
you are investing in a company, you are doing it

591
00:30:37,119 --> 00:30:40,720
based on numbers. You are doing it based on data.

592
00:30:41,200 --> 00:30:44,960
You are doing it and saying, Okay, this company generates

593
00:30:45,039 --> 00:30:47,559
this level of profit, I am asked to be paid

594
00:30:47,599 --> 00:30:52,480
this much. When I compare that amount to other opportunities

595
00:30:52,519 --> 00:30:55,960
I have, it's attractive, meaning I'm getting more back for

596
00:30:56,119 --> 00:31:00,000
my invested dollar. Right I am investing for fundamental reasons.

597
00:30:59,759 --> 00:31:03,559
That is a calculated decision based on math. Right now.

598
00:31:03,599 --> 00:31:06,279
It doesn't mean it's always works out, because things happen

599
00:31:06,279 --> 00:31:10,599
and things change, but time tested, it's been pretty proven

600
00:31:11,279 --> 00:31:15,640
that investing that way over the long run is the

601
00:31:15,680 --> 00:31:17,920
best or one of the best ways to invest in

602
00:31:18,000 --> 00:31:20,359
terms of overall returns over a long period of time, right,

603
00:31:20,559 --> 00:31:23,200
And the biggest reason is because if you follow that path,

604
00:31:23,559 --> 00:31:27,519
you will miss the biggest losers, right, and losses are

605
00:31:27,559 --> 00:31:30,680
far more impactful on long term returns than short term.

606
00:31:30,960 --> 00:31:33,440
So first of all, we have to identify that. And

607
00:31:33,519 --> 00:31:35,599
one of the biggest things that you see that happens

608
00:31:35,640 --> 00:31:38,359
in every bubble, but is happening writ large in this one,

609
00:31:38,880 --> 00:31:41,720
is that those two things are being conflated. They're being

610
00:31:41,759 --> 00:31:42,839
completely crossed up.

611
00:31:42,960 --> 00:31:43,200
Speaker 3: Right.

612
00:31:43,680 --> 00:31:48,400
Speaker 4: So people have begun to think that speculating is investing,

613
00:31:48,960 --> 00:31:54,359
buying a buying shares. A classic speculation would be buying

614
00:31:54,400 --> 00:31:58,359
shares in a company like micro Strategy, meaning there is

615
00:31:58,400 --> 00:32:03,279
no discernible, fundamental or measurable way to evaluate that company

616
00:32:03,319 --> 00:32:06,119
and make a decision. So therefore you are buying the

617
00:32:06,160 --> 00:32:08,920
stock for one reason and one reason only you think

618
00:32:09,119 --> 00:32:12,160
and hope it goes up. Okay, that is just be

619
00:32:12,279 --> 00:32:16,319
honest with yourself. That is making a bet, just like

620
00:32:16,359 --> 00:32:20,240
you would in a casino. Right, same thing. Okay. Now,

621
00:32:20,759 --> 00:32:25,160
people that can sound bad when done correctly, it's not.

622
00:32:25,400 --> 00:32:27,960
And I'll give you a perfect example of this. So,

623
00:32:28,160 --> 00:32:31,119
coming out of Covid, a company that had been very

624
00:32:31,200 --> 00:32:33,720
cheap for a very long time. That had a lot

625
00:32:33,720 --> 00:32:36,599
of issues. But you know me and valuation, It gets

626
00:32:36,640 --> 00:32:38,759
cheap enough and I'm to stop and look at anything.

627
00:32:39,720 --> 00:32:42,079
But it attracted us for a long time, but there

628
00:32:42,079 --> 00:32:44,519
were issues that we just couldn't quite reconcilence, so we

629
00:32:44,559 --> 00:32:46,440
never pulled the trigger on it. And a company was

630
00:32:46,480 --> 00:32:49,200
called bed Bath and Beyond Well coming out of Covid.

631
00:32:49,640 --> 00:32:52,720
That was a stock that wasn't recovering off its COVID lows.

632
00:32:52,960 --> 00:32:55,319
And the reason it wasn't is because the narrative about

633
00:32:55,400 --> 00:33:00,000
the stock was they have no online presence and Covid

634
00:33:00,119 --> 00:33:02,200
is going to be their quick death. Well that was

635
00:33:02,240 --> 00:33:05,000
a ridiculous assertion because people that were saying that didn't

636
00:33:05,039 --> 00:33:06,920
know anything about the company. We had been studying the

637
00:33:06,960 --> 00:33:12,160
company and they were drastically and radically increasing their online

638
00:33:12,200 --> 00:33:14,559
sales as a percentage of their overall revenue. The new

639
00:33:14,599 --> 00:33:16,680
CEO was doing a great job at ramping up that

640
00:33:16,759 --> 00:33:19,000
side of the business. So we thought that was a

641
00:33:19,039 --> 00:33:22,599
great opportunity because what was pushing the stock down was

642
00:33:23,240 --> 00:33:28,559
negative opinions that were unfounded, right, but that was still

643
00:33:28,559 --> 00:33:31,960
a speculation on our part. Why because it wasn't based

644
00:33:32,039 --> 00:33:34,759
on a runway or a trajectory of the company that

645
00:33:34,799 --> 00:33:37,200
we could look at and we had any confidence on

646
00:33:37,319 --> 00:33:39,960
over the long term. It was more looking at a

647
00:33:40,000 --> 00:33:42,480
company that we felt was not about to go under,

648
00:33:42,519 --> 00:33:44,559
that we knew wasn't about to go under, like as

649
00:33:44,599 --> 00:33:47,400
in the next six to twelve months, and it was

650
00:33:47,440 --> 00:33:50,519
a company that was doing considerably better in that environment

651
00:33:50,559 --> 00:33:54,119
than what people thought. And it seemed like a great

652
00:33:54,160 --> 00:33:56,599
place to take a bet because we were buying it

653
00:33:57,000 --> 00:34:00,880
at its low market for like the last fifteen year, okay,

654
00:34:01,119 --> 00:34:02,839
And so why did that feel like a good place

655
00:34:02,880 --> 00:34:05,839
to take a bet Because we knew really quick when

656
00:34:05,880 --> 00:34:08,360
we wanted out of the bet. We wanted out of

657
00:34:08,360 --> 00:34:11,599
the bet when it broke below that previous all time

658
00:34:11,639 --> 00:34:14,000
low and created new lows. And then we're like, okay,

659
00:34:14,199 --> 00:34:16,079
we'll get in and out of this thing quick, but

660
00:34:16,159 --> 00:34:18,079
we'll take a flyer on it. Okay. Well, we ended

661
00:34:18,159 --> 00:34:20,920
up buying the stock at about somewhere between three fifty

662
00:34:20,960 --> 00:34:24,480
to four dollars a share. Fast forward about three months,

663
00:34:24,559 --> 00:34:29,119
we sold it for thirty eight It right now here.

664
00:34:29,320 --> 00:34:32,840
Here's why it works. There's plenty of speculations that we've

665
00:34:32,880 --> 00:34:35,840
lost money on, but we structure it.

666
00:34:35,840 --> 00:34:36,159
Speaker 2: In a way.

667
00:34:36,199 --> 00:34:38,760
Speaker 4: Remember, because if it goes down, we don't buy more.

668
00:34:38,800 --> 00:34:40,320
And why because we just made a bet that it

669
00:34:40,360 --> 00:34:42,159
went up. We lost the bet. We take our loss

670
00:34:42,159 --> 00:34:44,239
and we move on. We put that six or seven

671
00:34:44,239 --> 00:34:46,400
percent loss in our pocket and we move on. We

672
00:34:46,440 --> 00:34:49,559
take it on the chin like a big boy. Right. Well,

673
00:34:49,360 --> 00:34:51,840
we can take a few of those shots here and there,

674
00:34:52,119 --> 00:34:55,719
knowing that the bed Bath and Beyond the GameStop bet

675
00:34:55,760 --> 00:34:57,960
that we made that we made five x on right

676
00:34:58,000 --> 00:35:00,639
when we hit them. If we're disciplined about them and

677
00:35:00,679 --> 00:35:03,280
cut our losses early and stay disciplined, which we have

678
00:35:03,400 --> 00:35:08,960
to about speculations, right, they're you probably won't win most,

679
00:35:09,320 --> 00:35:12,719
but if you do it correctly, right can vex situations

680
00:35:12,760 --> 00:35:16,400
meaning situations that appear to have load very little downside

681
00:35:16,679 --> 00:35:19,519
but a lot of upside potential. Right, you want to

682
00:35:19,519 --> 00:35:22,960
see the right setups and then you still don't bet

683
00:35:23,000 --> 00:35:25,519
them big. When we bought bed Bath and Beyond, it

684
00:35:25,559 --> 00:35:28,400
was only a three percent slice to the portfolio. But

685
00:35:28,519 --> 00:35:31,360
when that when three percent slice to the portfolio goes

686
00:35:31,480 --> 00:35:35,400
up ten or twelve x, that's a big win. You

687
00:35:35,440 --> 00:35:37,760
don't need to bet big to win big, right, And

688
00:35:37,840 --> 00:35:40,960
so what we're saying is Look, I'm not encouraging everybody

689
00:35:40,960 --> 00:35:43,079
to go out there and speculate because it's something that

690
00:35:43,119 --> 00:35:46,039
I haven't close to mastered. It's something that nobody will

691
00:35:46,079 --> 00:35:50,079
ever master. But it can be like clients will last

692
00:35:50,079 --> 00:35:52,360
me all the time, Zack. I've got my own little

693
00:35:52,360 --> 00:35:54,760
trading account here that I'm wondering if I can buy this,

694
00:35:54,800 --> 00:35:56,719
And my answer to them always is yes, you can

695
00:35:56,760 --> 00:36:00,599
buy anything, just don't buy it in big size and

696
00:36:00,679 --> 00:36:03,599
have very district rules. If it does what you think

697
00:36:03,639 --> 00:36:05,719
it's gonna do, or you hope it doesn't, it goes up, great,

698
00:36:05,800 --> 00:36:08,079
right it. But if it doesn't do what you think

699
00:36:08,119 --> 00:36:10,000
it's gonna do, take your loss and move on.

700
00:36:10,360 --> 00:36:10,559
Speaker 2: Right.

701
00:36:11,519 --> 00:36:15,519
Speaker 1: So great, Yeah, because a great explanation. I want to

702
00:36:15,559 --> 00:36:19,079
talk about why it isn't a trade and why you

703
00:36:19,360 --> 00:36:23,119
cannot speculate using leverage. We'll talk about that with Zach Abraham,

704
00:36:23,199 --> 00:36:26,599
Chief Investments or Bulwark Capital Management. This is a guy

705
00:36:26,599 --> 00:36:29,320
who you want to talk about speculation. This is a

706
00:36:29,320 --> 00:36:31,840
guy who placed a bet and this is a stupid investment.

707
00:36:31,880 --> 00:36:33,199
Speaker 3: You think about this.

708
00:36:33,199 --> 00:36:35,280
Speaker 1: This guy just started to start a company with a

709
00:36:35,320 --> 00:36:40,480
meth addict, cocaine addict, gambling addict, a guy who was

710
00:36:40,519 --> 00:36:44,360
sleeping on a couch like screwed up. His family life

711
00:36:44,400 --> 00:36:46,960
completely messed up. He was a joke in his hometown.

712
00:36:47,559 --> 00:36:50,280
People knew him as a drinker and a drugger loser.

713
00:36:51,039 --> 00:36:54,599
So he decides to start a company with this guy. Yeah,

714
00:36:54,639 --> 00:36:58,360
he bet on himself. His name is mich Lindell. He

715
00:36:58,400 --> 00:37:01,639
bet on himself, and my Pillow became very famous because

716
00:37:01,679 --> 00:37:03,719
he went to trade shows. His daughter made the logo.

717
00:37:03,800 --> 00:37:04,400
Speaker 3: Did you know that?

718
00:37:04,719 --> 00:37:08,119
Speaker 1: The first logo and the existing logo for my pillow

719
00:37:08,159 --> 00:37:10,119
his fortes. I think she was fourteen when she made it.

720
00:37:10,480 --> 00:37:13,400
Because he couldn't afford anything else, traveled the country, going

721
00:37:13,440 --> 00:37:16,079
to trade shows and fairs, sand and there, Hey, come

722
00:37:16,079 --> 00:37:18,000
and check out my pillows and look, I'll put him

723
00:37:18,000 --> 00:37:19,760
in a dryer and the puff up. He did that

724
00:37:20,559 --> 00:37:23,440
so long that finding this thing broke through. Then he

725
00:37:23,519 --> 00:37:26,920
decided to express himself. He didn't think the election was fair.

726
00:37:26,960 --> 00:37:30,239
He spoke out and boom, Enemy of the State, Boom,

727
00:37:30,280 --> 00:37:32,360
the FBI coming up to Amys in line to buy

728
00:37:32,400 --> 00:37:33,639
Chick fil A, taking.

729
00:37:33,400 --> 00:37:34,400
Speaker 3: His phone away from him.

730
00:37:34,880 --> 00:37:39,400
Speaker 1: Boom, retailer's canceling orders. It just happened again, A big

731
00:37:39,440 --> 00:37:42,440
retailer just canceled in an order with my product. Mike

732
00:37:42,519 --> 00:37:44,400
Lindell got in touch with us. Could you guys come

733
00:37:44,440 --> 00:37:46,719
in and help? And yep, we haven't worked with Mike

734
00:37:46,760 --> 00:37:47,960
in a long time, but we're glad to do it

735
00:37:47,960 --> 00:37:51,039
given what he's done for free speech and election integrity.

736
00:37:51,280 --> 00:37:53,360
So here's what we're doing. When you go to my

737
00:37:53,440 --> 00:37:56,480
pillow dot com slash todd, use promo code Todd, you're

738
00:37:56,519 --> 00:37:59,880
going to get the lowest price ever on the class

739
00:38:00,199 --> 00:38:00,760
my pillop.

740
00:38:00,800 --> 00:38:01,960
Speaker 3: This has never been this low.

741
00:38:02,360 --> 00:38:04,400
Speaker 1: Go to my pillow dot com slash todd use promo

742
00:38:04,440 --> 00:38:06,280
code toad to get the standard my Pillow for.

743
00:38:06,360 --> 00:38:08,679
Speaker 3: Only fourteen eighty eight. It has never been that low.

744
00:38:08,760 --> 00:38:09,239
Not once.

745
00:38:10,000 --> 00:38:12,440
Speaker 1: Use promo code tod for discounts on the entire my

746
00:38:12,639 --> 00:38:17,079
Pillow collection. Plus know this, they're extending the money back

747
00:38:17,119 --> 00:38:20,280
guarantee period all the way through March first, twenty twenty five.

748
00:38:20,639 --> 00:38:23,320
When you place an order between now and the twenty

749
00:38:23,360 --> 00:38:25,719
fifth of December, all of the pillars are on sale,

750
00:38:25,760 --> 00:38:29,079
but none of them as dramatically as the MyPillow classickets

751
00:38:29,079 --> 00:38:33,079
My pillo dot com slash Todd promo code Todd. So Zach,

752
00:38:33,199 --> 00:38:36,760
you talk in this thread very very well about what

753
00:38:36,920 --> 00:38:40,239
is and is not speculation. And you say that speculation

754
00:38:40,400 --> 00:38:43,920
is not a trade. So what helped me understand that part?

755
00:38:47,239 --> 00:38:49,039
Speaker 4: Would I say it's not when I say, and the

756
00:38:49,079 --> 00:38:50,480
speculation is on an investment?

757
00:38:50,679 --> 00:38:51,920
Speaker 3: No, you say it's not a trade.

758
00:38:51,960 --> 00:38:55,559
Speaker 1: You write Yeah, you say, you write this, You must

759
00:38:55,639 --> 00:38:59,760
understand speculation. Second, speculation is in a trade, meaning there

760
00:38:59,800 --> 00:39:02,639
must be rules and parameters set out at the jump

761
00:39:02,840 --> 00:39:04,159
before any position is taking.

762
00:39:04,159 --> 00:39:05,920
Speaker 3: You need a bat a plan how much you're willing to.

763
00:39:05,960 --> 00:39:08,079
Speaker 1: Risk, at what price do you take, at what point

764
00:39:08,079 --> 00:39:08,800
do you take profit?

765
00:39:09,880 --> 00:39:11,360
Speaker 3: Failing to plan is planning to fail?

766
00:39:12,159 --> 00:39:15,480
Speaker 4: Yeah, so I probably miss I probably missed type there

767
00:39:15,679 --> 00:39:18,039
because what I was trying to say was, at its

768
00:39:18,159 --> 00:39:22,039
very nature, speculation needs is a trade.

769
00:39:22,079 --> 00:39:22,840
Speaker 3: It needs to be.

770
00:39:23,400 --> 00:39:24,960
Speaker 4: Like a trade, not a trustment.

771
00:39:25,079 --> 00:39:25,639
Speaker 3: Right, okay?

772
00:39:25,840 --> 00:39:28,679
Speaker 4: And what happens, and this is where it goes wrong,

773
00:39:29,360 --> 00:39:31,360
And this is where it goes back into kind of

774
00:39:31,360 --> 00:39:34,599
crossing up with our moral with our moral guidelines. Right,

775
00:39:35,280 --> 00:39:38,440
price go up does not mean that you made a

776
00:39:38,440 --> 00:39:41,280
good investment decision. It means that you're on the right

777
00:39:41,320 --> 00:39:45,159
side of a trade for now. Okay. And here's the problem.

778
00:39:45,679 --> 00:39:50,199
Even when speculations work. Guess what happens The investor forgets

779
00:39:50,199 --> 00:39:53,800
that it's a speculation because it's worked, right, So then

780
00:39:53,840 --> 00:39:56,480
it becomes oh, I love that, don't get rid of it.

781
00:39:56,559 --> 00:39:58,559
I'm like, well, yeah, because it made you money. But

782
00:39:58,639 --> 00:40:01,679
treat it like a car. Hey, it's supposed to get

783
00:40:01,679 --> 00:40:04,920
you to work. Once it does that, you get out, Okay, right,

784
00:40:05,039 --> 00:40:06,760
you know, just sit in the car all day long.

785
00:40:06,920 --> 00:40:07,159
Speaker 2: Yep.

786
00:40:07,360 --> 00:40:11,800
Speaker 4: So understand Now, an investment is different. Now, get investment

787
00:40:11,840 --> 00:40:13,360
is something that you can buy and hold for a

788
00:40:13,400 --> 00:40:15,639
long time because it stays within your parameters and you're

789
00:40:15,679 --> 00:40:18,440
not freaking out about that, right. So what I mean

790
00:40:18,480 --> 00:40:22,400
by this is saying any time the so much pain

791
00:40:22,559 --> 00:40:27,039
can be missed by investors if they properly evaluate what

792
00:40:27,239 --> 00:40:30,599
they're going into when they go into it and classify It's.

793
00:40:30,599 --> 00:40:32,239
One of the things we do at our investment meetings

794
00:40:32,639 --> 00:40:35,000
every single week is when when one of our analysts

795
00:40:35,119 --> 00:40:37,400
comes in with a new idea, the first question we

796
00:40:37,480 --> 00:40:40,119
ask is is it a trade or an investment? And

797
00:40:40,400 --> 00:40:43,079
they all know what that means, right, Meaning if it's trade,

798
00:40:43,159 --> 00:40:44,639
here's how we're gonna look at this. We're gonna have

799
00:40:44,639 --> 00:40:46,639
an exit point. We're gonna have an entry point all

800
00:40:46,679 --> 00:40:50,199
that kind of stuff. If it's an investment, we want

801
00:40:50,239 --> 00:40:52,960
to have enough confidence and have done enough research and

802
00:40:53,039 --> 00:40:55,840
understand that company. The litmus test for me is do

803
00:40:55,880 --> 00:40:58,599
we understand it enough to where if it's down twenty percent,

804
00:40:58,639 --> 00:40:59,199
we buy mode?

805
00:41:00,119 --> 00:41:00,480
Speaker 3: Right?

806
00:41:01,280 --> 00:41:04,280
Speaker 4: You do not do that with a speculation. You just don't.

807
00:41:04,440 --> 00:41:04,719
Speaker 2: Okay.

808
00:41:05,239 --> 00:41:08,360
Speaker 4: And I can tell you story after story after story.

809
00:41:08,400 --> 00:41:10,719
And it's one of those things where either take my

810
00:41:10,800 --> 00:41:13,079
word for it or you will learn it on your own.

811
00:41:13,360 --> 00:41:15,960
But learn it you will, because that is the price

812
00:41:16,039 --> 00:41:19,719
to play this game. The old guys in this game say, look, son,

813
00:41:19,719 --> 00:41:21,840
you've got two options learning that lesson. You can take

814
00:41:21,880 --> 00:41:23,519
my word for it, you can learn it on your own,

815
00:41:23,599 --> 00:41:25,960
but you learn it. You're going to learn it. Yeah.

816
00:41:26,079 --> 00:41:28,719
Just and and that's where I get back to it

817
00:41:28,719 --> 00:41:31,039
circles back to this whole micro strategy thing. Why do

818
00:41:31,119 --> 00:41:35,880
I talk about it and set certain terms because because

819
00:41:35,920 --> 00:41:39,280
this is done, this has been done so many different ways,

820
00:41:39,639 --> 00:41:43,639
so many different times. Okay. When when you are levering

821
00:41:43,719 --> 00:41:47,239
up your balance sheet to buy a non cash flowing asset,

822
00:41:47,320 --> 00:41:51,159
even if that debt quote unquote isn't costing you any interest,

823
00:41:51,559 --> 00:41:54,880
you have an imbalance, and at some point you will

824
00:41:54,880 --> 00:41:58,360
get shook out. And that's why in investing, if you

825
00:41:58,400 --> 00:42:01,079
look at the history of markets, time has always been

826
00:42:01,079 --> 00:42:03,760
on your side right, no matter how bad it got.

827
00:42:04,039 --> 00:42:07,760
If you held on, markets came back well. When you

828
00:42:07,800 --> 00:42:10,719
add leverage in debt into that, you have officially started

829
00:42:10,760 --> 00:42:14,639
a clock. Right, You've taken away your greatest advantage as

830
00:42:14,639 --> 00:42:17,760
an investor, which is time you can sit and wait.

831
00:42:18,199 --> 00:42:21,679
Right once you add leverage in now you know it's

832
00:42:21,719 --> 00:42:25,400
hard enough picking an investment the right way or getting

833
00:42:25,440 --> 00:42:28,280
it right, but getting it right in the right timeline.

834
00:42:28,440 --> 00:42:31,119
The minute you add leverage, you now have to be

835
00:42:31,199 --> 00:42:34,719
right about the bet itself, the investment itself, and you

836
00:42:34,760 --> 00:42:36,760
have to be right on the timeline. If you're wrong

837
00:42:36,800 --> 00:42:38,119
on either, you've got big problems.

838
00:42:38,320 --> 00:42:41,039
Speaker 1: Okay, that explains to me. While you don't buy, you

839
00:42:41,079 --> 00:42:44,440
don't speculate with leverage. That makes all the sense of world. Okay,

840
00:42:44,440 --> 00:42:46,639
this is the most poetic thing that you write. I think,

841
00:42:46,679 --> 00:42:49,639
and this is so, this means something to me. I

842
00:42:49,719 --> 00:42:51,199
want you to explain this to people. I know we're

843
00:42:51,320 --> 00:42:56,920
short on time with you. Fifthy right, be selective. You

844
00:42:57,159 --> 00:43:00,360
have to wait for your pitch. I cannot emphasize this enough.

845
00:43:00,360 --> 00:43:03,760
You're right, learn it from others' mistakes or from experience,

846
00:43:03,800 --> 00:43:05,599
but learn it you will. I find that it run

847
00:43:05,599 --> 00:43:09,480
into one or two highly high convexity, high conviction bets

848
00:43:09,960 --> 00:43:12,840
every twelve to six months. You cannot chase the trade.

849
00:43:12,880 --> 00:43:16,079
They have to come to you on their own, so

850
00:43:16,239 --> 00:43:20,199
you it sounds like you're going to have heart I think.

851
00:43:20,320 --> 00:43:23,280
And then but every twelve to sixteen months, it's really

852
00:43:23,320 --> 00:43:26,239
that infrequent that you place a bet or speculator.

853
00:43:26,760 --> 00:43:30,199
Speaker 4: No, we might place bets, but meaning you know, little

854
00:43:30,239 --> 00:43:34,400
opportunistic things we see. But probably the best, probably the

855
00:43:34,400 --> 00:43:35,760
best example I can give.

856
00:43:35,599 --> 00:43:35,960
Speaker 2: You is.

857
00:43:39,480 --> 00:43:42,679
Speaker 4: Well, uranium earlier this year was one where you know,

858
00:43:42,920 --> 00:43:45,199
like it lined up at the price it was at

859
00:43:45,239 --> 00:43:47,840
and to us it just looked like go time it's up.

860
00:43:47,960 --> 00:43:51,159
Since then, we've hold those positions for a long time.

861
00:43:51,159 --> 00:43:54,559
But probably the best, probably the best example of this

862
00:43:55,119 --> 00:43:58,639
was going into twenty twenty two. At the end of

863
00:43:58,639 --> 00:44:01,519
twenty twenty one, were really pounding the table just saying

864
00:44:01,519 --> 00:44:03,960
we really, we really firmly believe the best place to

865
00:44:03,960 --> 00:44:07,360
be as long energy in short tech. Had you followed

866
00:44:07,400 --> 00:44:10,320
those trades, had you put your entire portfolio long energy,

867
00:44:10,320 --> 00:44:12,920
short tech. In twenty twenty two, the market was down

868
00:44:13,320 --> 00:44:16,480
twenty one percent, that trade was up like fifty wow.

869
00:44:17,400 --> 00:44:21,119
So but it had been since going into COVID that

870
00:44:21,199 --> 00:44:23,960
I had felt that kind of certainty, and you just

871
00:44:24,079 --> 00:44:26,760
don't know when it comes. It was sort of like

872
00:44:26,840 --> 00:44:29,519
game Stop in bed Bath and Beyond. Those just came

873
00:44:29,559 --> 00:44:32,800
to us too, and we'd watched them for a long time,

874
00:44:32,840 --> 00:44:34,679
and all of a sudden, the stars aligned and you

875
00:44:34,760 --> 00:44:38,159
kind of go there it is. And I joke with

876
00:44:38,199 --> 00:44:40,639
my buddies that manage money. When you see it, you

877
00:44:40,719 --> 00:44:43,440
see it. You can't fabricate it. Where you get in

878
00:44:43,519 --> 00:44:46,320
trouble is when you've seen them a few times, you

879
00:44:46,360 --> 00:44:50,280
start trying to create seeing them and you just can't.

880
00:44:50,280 --> 00:44:52,599
And I don't have a good reason for that. It's

881
00:44:52,679 --> 00:44:54,199
like life, like why do you go out on the

882
00:44:54,199 --> 00:44:56,239
golf course some days and shoot seventy six and other

883
00:44:56,320 --> 00:44:58,000
days you feel like you can't break eighty five to

884
00:44:58,039 --> 00:44:59,920
save your life. I don't know it's right, the very

885
00:45:00,079 --> 00:45:03,360
ability of human beings right, But it just every good

886
00:45:03,400 --> 00:45:06,199
investor I know goes through these periods of times where

887
00:45:06,199 --> 00:45:08,679
they feel like they're so bloody hot they can't miss.

888
00:45:08,719 --> 00:45:11,320
And then other times where they're like, I don't this

889
00:45:11,400 --> 00:45:14,400
looks like Japanese to me, right, like it nothing makes sense.

890
00:45:14,880 --> 00:45:19,360
And one of the reasons you don't you don't want

891
00:45:19,360 --> 00:45:22,239
to play those bets or speculate unless you see it

892
00:45:22,280 --> 00:45:26,480
is when you're in those times where you don't see it,

893
00:45:26,519 --> 00:45:27,360
is where you lose.

894
00:45:27,519 --> 00:45:28,119
Speaker 3: Tons of money.

895
00:45:28,920 --> 00:45:30,639
Speaker 4: You gotta let it come to you, and you got

896
00:45:30,639 --> 00:45:33,320
to let it play out. And yeah, you just can't.

897
00:45:33,360 --> 00:45:34,559
You can't create the opportunity.

898
00:45:34,599 --> 00:45:36,639
Speaker 1: And then of course census is betting. And you wrap

899
00:45:36,679 --> 00:45:38,880
this up really well, you call it memorializing your wins.

900
00:45:38,920 --> 00:45:42,199
In other words, pocket the money, move on the car

901
00:45:42,280 --> 00:45:43,159
got you to work.

902
00:45:43,559 --> 00:45:46,360
Speaker 3: This caeculation was a car. It got you to work.

903
00:45:46,599 --> 00:45:48,480
I say the same thing with people who go win

904
00:45:48,559 --> 00:45:51,039
money and casinos, great, fantastic.

905
00:45:51,360 --> 00:45:54,679
Speaker 1: Now take the money that you paid to gamble, put

906
00:45:54,679 --> 00:45:56,280
it back in your bank accounts, and if you want

907
00:45:56,320 --> 00:45:58,440
to keep gambling, just use your winnings.

908
00:45:58,840 --> 00:46:01,840
Speaker 4: Yes, yeah, investings the same way, right, And that's what

909
00:46:01,880 --> 00:46:05,360
I mean by in memorializing our wins, meaning, look, I

910
00:46:05,360 --> 00:46:07,239
don't care if you take that profit and you dump

911
00:46:07,239 --> 00:46:09,079
it into the S and P five hundred. I don't

912
00:46:09,079 --> 00:46:11,199
care if you take that profit you dump it into treasuries.

913
00:46:11,360 --> 00:46:13,000
I don't care if you take that profit dump it

914
00:46:13,039 --> 00:46:15,239
into a red or dump it into like a blue

915
00:46:15,320 --> 00:46:18,360
chip dividend paying stock. Right, Just something that you know

916
00:46:18,480 --> 00:46:21,679
five years from now will be there. Right Because now

917
00:46:22,039 --> 00:46:25,159
you hit a bet and you are turning that bet,

918
00:46:25,199 --> 00:46:28,239
you are memorializing it. That win will not escape you.

919
00:46:28,360 --> 00:46:30,679
It ain't going away and it's going to be there.

920
00:46:31,000 --> 00:46:34,480
And that is just as important everybody thinks about the

921
00:46:34,519 --> 00:46:37,280
wind has You know, I don't want the stock I'm

922
00:46:37,280 --> 00:46:39,440
buying to go down. I really want it to go up.

923
00:46:39,679 --> 00:46:43,599
But if you do not memorialize your wins, it won't

924
00:46:43,599 --> 00:46:45,800
matter because you'll whatever you win, you'll give back.

925
00:46:46,000 --> 00:46:49,159
Speaker 3: Yep, yep. I love it. That a great way to formulate it.

926
00:46:49,199 --> 00:46:49,880
Thank you so much.

927
00:46:49,920 --> 00:46:51,719
Speaker 1: Please say hi to your beloved bipocks.

928
00:46:52,400 --> 00:46:53,239
Speaker 4: I will certainly do that.

929
00:46:53,320 --> 00:46:57,519
Speaker 1: I'll say hi to my why pucks over here, Zach Abraham,

930
00:46:57,599 --> 00:47:00,199
Chief and Vestment Officer, Bulwark Capital Management. Know you're risk

931
00:47:00,280 --> 00:47:02,719
Radio dot Com eight sixty six seven seven nine Risks.

932
00:47:03,000 --> 00:47:05,000
This is the Todd Herman Show. Please go be well,

933
00:47:05,280 --> 00:47:07,280
be strong, be kind, Please make every effort

934
00:47:07,320 --> 00:47:08,960
Speaker 3: To walk in the light of Christ.