2024 Predictions Unveiled: Steven Feldman & Anthony Scaramucci – Part Two

Anthony Scaramucci 0:25
Right when that music starts, I feel like I’m back in the 1980s. I’m going to be joined by my guest, Stephen Feldman. In a second here. He’s the founder of Wealthion. As you know, we talked last week. But Steve and I grew up in that era. So I was doing push ups in a parking lot. Somewhere in Hempstead Long Island, to music like that. And now here I am trying to offer out some investment advice to people. So it’s been a long road, Mr. Feldman from spit you remember spit and Uncle Sam’s you grew up on Long Island? Yeah, I’ve looked forward to the day I’ve seen you the picture with the Gravity Boots doing the upside down setups. I used to I used to do push ups in the parking lot outside of my burgundy red Camaro before I entered the disco. Okay, I’ve got that it’s a disco. So all right, so I’m mortified and embarrassed. But you can call us at 928-436-6624. So that’s nine to the mooch. This is speak up with Anthony scare Moochie. And I’m I’m joined again by my very dear friend. And and what I love about him like me, we’re working last day of the trading year. Last day of the year, everyone else is on vacation. Steve and I are you’re working okay, so I do love that about him. But Steve, as you know, is the founder of Wealthion. He also created something called GBI, prior to that 23 years as an investment banker, but also as a real estate person, real estate developer, a principal deployment agent. And years and years ago, an attorney at Skadden Arps, so So Steve is sort of the POLYMATH friend that we all need to have that we could potentially cheat off of in school. But unfortunately, we did not go to law school together. But as I mentioned last week on last week’s show, he did help me with my spreadsheets when I was in real estate, investment banking associate back in the day 1989. Steve, really, really?

Steven Feldman 2:32
I told you, the Geritol, could you pass me the Geritol, please.

Anthony Scaramucci 2:37
But Mr. Feldman, thank you for joining us again. I think we want to take some calls, right? I mean, it’s the last day of the year. Let’s take some calls. You can email us you can fire in a call. We’re taking questions. I can actually start with some email questions and that people are cool with that. We want to we are Here’s one here, an early seed investor, as an early seed investor in the Blackrock ETF. Do you think the ETF approval by the SEC will be a buy the rumor, sell the news event, or buy the rumor buy the news, Andrew and from New Zealand? So I’m going to start with that. Steve, I’d like to have you chime in, as I mentioned to people, and it’s also in a filing skybridge capital was the first money in the first outside money in the Black Rock, Bitcoin trust. And so basically, what that trust, it was formed about a year ago, and then there was an application for that trust to be converted into an ETF. And it’s sigma signaling is good looks like that. ETF is going to happen. Of course, the deadline is January 10. The rumor in the marketplace is that ETF will be approved on January 8, I think the fact that they want to do only cash for these ETFs Stephen, and only cash, Angela is a sign that it’s actually going to get done. And it just has to do to more people. But there’s some technicalities that the SEC is worried about as it relates to money laundering, where people could transfer their illegally garnered Bitcoin into the ETF, the ETF works as almost like a cleansing mechanism for them. And so they don’t want that so they want cash in and cash out. I think that’s an indication that’s going to happen. My own guess is that we’ve already had some sloppy trading in Bitcoin in the month of December, we probably get a modest pop, not the pop that the real Bitcoin maximalists are talking about. But the real question is Angela, if you have time and patience, will Bitcoin be higher next year than it is today? I believe it will be because of the supply constraints. The halving and again not to bore people but Bitcoin. The Bitcoin network is spitting out roughly 900 coins a day, sometime in April. It will be reduced from 900 coins a day to 450. And so every time that that has happened, it’s caused some serious price appreciation in Bitcoin. We’re going to turn it over to Steve. He’s a, like me, he’s a traditional investor. That’s always looking for new things and new ideas. What say you, Steve, related to Angela’s question?

Steven Feldman 5:20
First of all, I’m impressed that anybody from New Zealand is watching the show, God bless. You know, there’s an analogue in the gold business, although gold was in business for 1000s of years, and then GLD was created. And GLD became just another increase of the democratization of something that was not easy to buy, sell own. And so you created I think, a bit of a floor under the gold price, because investors were looking at this as any other asset class, if it got cheaper, buy more, if it’s expensive, they’ll sell it. And so, you know, Bitcoin, the trick of Bitcoin is for it to actually become a liquid currency. That’s the goal, right to have it be money, not just a speculative asset. And I think this is an important step in the journey. I’m never very low to predict prices. But I would say if you’re looking for something in the crypto space that has, is becoming institutionalized, which isn’t going to go out of business, this is the one bitcoin is now going to separate itself from all the others, all the other, all the other coins and Kryptos, it’ll start to continue to establish itself, it’ll end up in retail brokerage accounts more, because people didn’t want to open up a Coinbase account, that they have a brokerage account, they can buy this easily, and it’s liquid, it’s just adding more and more to the fact that it becomes a stable, reliable, alternative asset. And I think it bodes very, very well. Does that turn the price from 40,000? To 80,000? Ish? You know, I don’t know. I don’t know the answer that, but I think it takes it from 40,000 to zero takes the zero off the table.

Anthony Scaramucci 7:03
I think it’s well said and if you have interest in this stuff, what got me into Bitcoin was actually Professor Neil Ferguson’s book the ascent of money. Once I read that book, and I understood what money was in our societies, it became clear to me that Bitcoin was going to have some relevance to us as a store value. Let’s see, there’s another question here, recommend a better book on economics and capitalism, free freedom by Milton Friedman. And so I’m gonna, I’m gonna go with the psychology of money by Morgan Housel. And for those of you that know, I have, I have a podcast called open book. It’s sort of a hobby of mine, which is growing into a nice sort of cottage industry. For me, I interview authors once a week. And Morgan is a dear friend, he’s written two books, the psychology of money, and same as ever, which is a new book. But the psychology of money is so four and a half million books that came out about two years ago. And the central thesis of what Morgan is saying, is very similar to a Buffett thesis, or Milton Friedman, you buy great businesses, and you hold on to those great businesses, and you don’t let the fear mechanisms in your personality, juke you out of those businesses. So psychology of money would be one for me, Stephen, you have a recommendation.

Steven Feldman 8:31
So I’ll go a little more aggressive. There’s old school, Adam Smith, Wealth of Nations, you really couldn’t understand how it all started, bother. It’s less than five.

Anthony Scaramucci 8:43
Why I wanted to cheat off the guy in law school, but unfortunately, we weren’t in law school together. I got the Wealth of Nations. Go ahead.

Steven Feldman 8:49
Yeah, there was a moment not to be too Egghead ish. But there was a moment in time that all wealth was the king’s wealth. And then America got created. And then we had basically start from scratch. And how do you pay labor? How do you accumulate capital? How do you make loans? How does what’s government’s role versus the individual role? What’s How do you tax? So if you really want to know how it all started, that’s the book to read. And if you want to know how it all blew up, go read the great crash of 1929 by John Kenneth Galbraith. Galbraith, which will tell you all the stories about the enormous errors of politicians, pundits and financier is that led up to 1929. And then how it was botched for another six or seven years in trying to get out of 1929 through the Depression. Two of my most favorite books, and by the way, I don’t think anyone’s going to read Wealth of Nations, but I’m sure there’s a lot of summaries on the internet. You know, just put a wealth of nations PDF summary less than 10 pages in AI and you’ll get the gist.

Anthony Scaramucci 9:56
Well, I mean, you know, see, that’s really the Scaramucci I’d have the Speak up, because, of course, I would be reading the the brief, the three page brief, Stephen, I, let’s go to that. But I think it’s important that we just address what Stephen is saying. The country was made great through the forces of the free market. And through the forces of capitalism, of course, all of us know what the invisible hand is. Smith just makes the reference in the book that you have this sort of working mechanism because of all of our mutuality of self interest, that you bring things into alignment, and things become more efficient from a capital allocation perspective. And so let’s go to Brett Kyle Anthony, can you talk a little bit about algo for a minute, I’ve been following you for a while with this. So and for Stephens benefit, there’s a layer one security token that was developed by Silvio McCauley, a MIT professor in cryptology, a fantastic individual, brilliant guy, he won the Turing Award in 2012, which is effectively the Nobel Prize for computer programming. algoryn is a layer one token on the blockchain, which I think has, arguably the best technology. If it’s not the best, it’s in the top two or three. And I wrote a book about it the genius of algorithm just to explain it to people. I am still a large investor in algoryn. Brett, bad news for me is I think I bought the algo ran at $1. It went to $2.50. I didn’t sell any, it’s trading at about 23 or 24 cents today. And so near term, I’ve lost some money. But I do like the technology. And I do like the early adoption. Now we’re algoryn has misstepped. And I’ll be brief on this is they did not develop the ecosystem, that things like Aetherium or Solana developed. Is it too late for algorithm? Well, some people think it is the skeptics believe that it is I don’t see it. That way I see the technology as being so good that there are quarters of the blockchain space where this will be eventually adopted. I just want to point out to some of the people that are older listening, we all worked on Microsoft’s operating system in the 80s. In the 90s, early parts of the 2000s, Microsoft System was inferior to Apple’s system in terms of an operating perspective, but they had market dominance and market share. And so that’s sometimes happens in technology where you could have something that isn’t as good as the other thing, but it does better from a adoption perspective. So algoryn, I see as something that could develop remember, Apple was niche, and then look at what happened to Apple. And so for those reasons, I’m not selling my algoryn I just think the technology is so good.

Steven Feldman 13:00
Can I weigh in for a second here, which is, Listen, I I don’t know how much the Wealthion audience knows about algoryn. Thank you, Brett. Kyle, a, you know, for asking the question, Anthony is an expert, I am not. But I do want to tie it a bit into mainstream finance and some psychology. You know, I just looked it up on coin market cap, I didn’t, I’m not too familiar with it, it’s 24 cents, trades. 24 cents in the last 24 hour trading volume is $128 million. That means, you know, almost 500 million of these coins traded in the last 24 hours. So what what’s good and bad about that, you know, what’s, what’s bad is that, you know, we people aren’t really investors so much, I can’t believe all those people understand this coin, the way Anthony understands the coin, but there’s a little bit of an infection of gambling, that has come into the crypto space, the options space, the market space. And if you want to be understand that that’s part of what’s going on here. People don’t know what they’re investing in. But if it goes up, I love it. And the best investors in the world that we’re going to be able to differentiate those two. And I were joking before we got on this call that these are hard public markets for people like me who have private market investment investing backgrounds, where cash flows mattered, and, you know, leverage mattered. And now it doesn’t really matter as much to people. I don’t know. I mean, you look at these crazy multiples and some of these stocks and you know, and they’re still going up, and it’s hard for us to just say, Okay, that’s good value. We’re betting on almost market psychology and gambling psychology, as much as we’re better or greater school theory or momentum, which is really anathema for someone like me, who says okay, what’s the yield on? You know, what’s the yield on cash flow yields, so It’s a scary time to be an investor. And, you know, for the folks who are intrigued by algo boo based on what Anthony said, understand that if you don’t understand that you’re probably just gambling. And but that’s okay. Just don’t put enough money in that it matters.

Anthony Scaramucci 15:15
It’s well said. So if there are live callers out there, we appreciate all these emails coming in 928-436-6624. Just dial us up. We’re here. last trading day of the year. We’ll take your call, we’ll do our best to answer your questions. Why don’t we take a few more of these email questions and I want to flip over to our predictions Steve, which we were supposed to get to last week. We made a few and I ranting and raving we never got to them. Okay, Buffett says it being long on on the stock market is a bet on America. This is from Barbara from New York. To we agree. Do you agree Stephen? Why don’t you go first on that one? And then I’ll chime in as well.

Steven Feldman 15:58
You know, are you allowed to criticize Buffett on the internet? I’m not positive. I’ve got on America. First. Let’s define America star if I’m gonna get too pointy headed on you guys. You know, are you betting on America? Are you betting on capitalism, American style capitalism? If it’s the latter, American style capitalism, yes, that’s what’s being long the stock market is a very smart bet. On American style capitalism, which apropos to my previous comment has creates capital markets where people don’t necessarily invest based on fundamentals, they invest on, you know, the, what I call the financial industrial complex, where everyone says, You gotta be long stocks, you’re bombarded by advertisements, you have a fear of missing out you. Whether it’s Madison Avenue or the Joneses, you better be long that stock market. And then you are relying on the s&p, which kicks out the Woolworths and the Sears and the crummy company. So you can only stay in the best ones. And it’s market weighted, so you get the best of the best. And so seven companies make up all of the return for the s&p in large part each year, not just the Magnificent Seven this year. And then you’re betting on the fact that those companies on the sounds a little nasty, those companies send their lobbyists to government and support politicians who support their positions on pharma on less regulation, on trade on employee rights and all of those things. So yes, it is a bet on American style capitalism, and I don’t never bet it I would never bet against American style capitalism, because that’s what America is about. But my little bit, you know, less positive, I would say is, you know, that America comes at a cost to other parts of America. We’re a divided country, we have a lot of parts of the population that because of capitalism don’t get respect that as much as they might, people who are poor or old, who don’t participate in capitalism in the same way. They were in America, too. And they’re getting the other end of the stick. And I wish there was a bit better balance. But you know, that’s not for this. That’s not for this interview, that’s for sure.

Anthony Scaramucci 18:17
Well, you know, I want to add, obviously, you know, there is a divided America, and there are haves and have nots. And I think that’s causing some pain and anxiety in America. But I think specifically this question, I think what Mr. Buffett is saying is that American capitalism, because of the decentralized nature of the government, and the free market, it’s regulated, but the broad free market and the culture of risk taking and entrepreneurship in America, I think are the things that Mr. Buffett is talking about. And I will say this, and I want to ask Stephen, this question, because I’m reflecting on my 35 year career, if every time I was offered a venture capital investment or a seed investment, had I just bought Berkshire Hathaway, and put it away and held it, I think, frankly, I would have done better. And so I have a lot of losses, a lot of misfires and things that I felt were going to be the next Ubers or the next Tesla’s or whatever they might be. And I think the the the tried and true turtle wins the race is what the mantra of what Mr. Buffett is talking about, but But Steven, how do you feel about that? Because I sort of feel like they just put that money into Berkshire Hathaway as shares. I’d be sitting on more money today. Again, we’re just talking about the best thing.

Steven Feldman 19:45
You know, I wish I wish if I just had one days, one days, wisdom, what how would it all worked out? I would have been a much better investor. If you had put your money in the market in 1929. You would have gotten it back in 1952. So we’ve been in a golden age of investing when interest rates are gone down. But regardless, back to Buffett in the positive story, if you took every single paycheck, every dollar, and you just put it leveraged, you put it long unleveraged into the stock market, closed your eyes, you wouldn’t have to pay money, you wouldn’t have paid much taxes, you would have had compounded, you’ve compounded over 35 years. And the stock market is within an inch of a record today’s if you’ve never sold a share you of course, you would have been much, much, much, much better. You know, the hidden secret of venture capital and private equity are the capital polls and the fact that you’re in and out of the investment and you’re forced to pay taxes, not because you’ve made the selection. By the way, I made one tax move this year, in the last three days, I took some of the most appreciated names and I donated them. That’s I didn’t want to pay the tax. But this is where I can actually save the tax and do what I’m trying to do as I get a little older is be more philanthropic. So I just feel like the being long for these for the Buffett years has been awesome. I mean, obviously we hit a record today you should have bought and hold.

Anthony Scaramucci 21:09
Yeah, no, listen, I hear the question, though. And we’re gonna get to this question from Asia Pirillo in a second, but the question I have for you, Steve, I can answer myself, but I’d like to hear your answer is what are the next 50 years? So Buffett got it? Right? Okay. He said in 1964. I’m just gonna get long some high quality stocks, switch them around here and there. And I’m gonna get long, high quality stocks. And you said this spectacular run 60 year run? What about the next 60 years? Is that the right strategy for the next 60 years?

Steven Feldman 21:43
Well, at the end of 60 years, it will be completely irrelevant to me, because you can’t take it with you. But

Anthony Scaramucci 21:50
I’m saying that because you got offspring, my friend.

Steven Feldman 21:55
I was I was in business school. And there were back then people actually believed in financial models, capital asset pricing models, equities, unlevered equities should return some premium, some real return over risk free rates. So if inflation is not two, but it’s three and Treasuries are four, you should get six to 7%. In equities in an index of good companies, compounded without taxes over 60 years, if you put a million away right now, you’d be Buffett in 60 years. So, you know, of course, I believe I believe in it. And, and by that interesting point, as a guy who runs businesses, I want to make some point, which is really something I wish I knew. Companies are not the economy. It’s a simple, simple thing that nobody really understands, or people don’t talk about, if they understand that they don’t talk about it. When the economy loses jobs, that doesn’t mean the company is going to do bad, the company might be cutting costs, right? So when the when the country loses job, that may mean that a company’s expenses are going down. And companies have 15 things that they can do in any economy. And basically anything the best companies, actually, if they, when they get through the downturn come out better, because if it hurts, if it hurts a good company, it’s killing the small company. So you see, when you come out of the pandemic, these restaurant chains that were able to stay in business to kill it, it now because everybody else wants to business. And so when I own a company, and I suppose the downside, that’s quite bad for the economy, but it might actually be good for my company, because I cut my expenses. And so that’s also one of the reasons why we can start to see that if we go into a recession, people like oh, a recession, I shouldn’t own any stocks. Just have the right names through the recession, think about who’s gonna come out of the recession even better, because their competitive advantage, you’re sitting there with $10 billion of cash, you’re gonna get through that recession?

Anthony Scaramucci 24:04
Well, I think that’s a really important point. I think this is something that we worry about, because of the way our brains think, or linear thinkers are having a bad period of time, we think, okay, that bad period of time is gonna continue. But it doesn’t. We have a cyclical nature of the world. We have four seasons, the moon comes in and out of phases. Everything about our lives is cyclical. And so at a low point, think like the Buddha or the Dalai Lama things change. And so you have to be prepared for the better times. I want us flip over a second because Steve, this week, I got a tremendous amount of comments from people related to your remarks about the s&p, how it’s just wonderful calling mechanism. And the reason why it goes up up into the right by and large, is that they’re taking the bad companies out and they’re putting the high performing companies in enthusiastic a very good call. ASTRONEER via YouTube chat, please comment on the equal weighted s&p 500. What are your thoughts there?

Steven Feldman 25:07
Well, first of all, if you have an equally weighted s&p, the s&p wouldn’t have been up as much. Right like that, right. So what ends up it was very clever. I wish I had invented it, I there’s a million things I wish I had invented it. But the idea that you’re you have a tax free vehicle that calls out bad names, but you don’t have to pay the tax when that trade occurs, is brilliant. If you owned 500 companies, and you decided to get rid of the ones that you didn’t like, and then you’d have to have some tax ramification, and it would start to hinder your return, that’s not true. When you own an ETF, they do the work for you. And you just take the price of the ETF very clever technology underneath it, it’s actually brilliant. You don’t have that in the mutual fund, but you have that in an ETF. So you know, and then the idea of market waiting them is sort of like letting your winners run. And if you take my theory that people love the winners, they get the momentum, people don’t want to miss out. So I got to kind of hone in Vidya. And so those things will run and then that will pull the market weighted s&p, you won’t get the same result in the s&p 500. So now go back to Buffett betting on America means betting on all the things you listen to Anthony, which I believe, risk taking entrepreneurship ingenuity, you know, working like we did, back in the day, 80 hours a week sleeping on sofas, doing all that thing, which I don’t think you find in other countries not to besmirch them, but that’s what you find in our country. So you’re now basically getting to bet on the best, and the ones who really can win it, and really can actually even they’re so big, they can start to even change the playing field. So they’ll always win. So that’s why that is a better version. I think if you took the seven companies The Magnificent Seven, out of the s&p, I don’t think the s&p would have been up 20%, it would have been, like 5%, or some number. I don’t, I don’t know have the chart in front of me.

Anthony Scaramucci 27:09
It’s a little higher than that, because I looked at it before the show. It’s about a, you’re but you’re making the right. You’re making the right point. And I think this is the thing is like, you know, I have a friend of mine, Jonathan Boyer, who runs this analysis called the forgotten 40. Okay, so there’s the s&p 50. And as you point out the seven names, The Magnificent Seven, or maybe there’s 10 names now, what about those forgotten 40? Well, it turns out the forgotten 40 do well, but they don’t do as well as the Magnificent Seven, okay. And the point being is what Steven is making, is, it’s okay sometimes to go with the flow and try not to outsmart yourself, you know, I, I have hurt myself in my career, by trying to be the smartest person in the room by trying to say, Okay, I’m gonna, I’m gonna buy the bottom 10, you know, the s&p 490 to 500. Because that that stuff is cheap. And a result of which I’ll end up making more money by doing that. But then you’re losing out on what everything that Steve just said, and also the forces of market momentum. Because remember, you know, one of the greatest things that can happen to a company, see if you correct me if I’m wrong, getting into the s&p 500, or getting into the Dow, because now you’re forcing all the capital allocators that allocated into these indexes to own pieces of your company. And so you know, sometimes the trend being your friend doesn’t make sense to fight.

Steven Feldman 28:50
Alright, great. And listen, I think there’s also a nice self reinforcing model here. More and more people are coming to the conclusion that you just had Anthony, was it really a good idea for me to put money in venture capital and private equity and individual deals and try to be the smartest person in the room? Maybe it was just better to put the money in the s&p 500 and spend more time with my kids. Now more money goes into the s&p 500 market weighted more money has to go with Nvidia. Nvidia now doesn’t trade right now. The s&p, the NASDAQ 100 trades at 30 times PE that has always been has always portended a bad next year. But it will be offset by all of the people who just got their bonuses or got their raises are now funding their 401 Ks. And that money is just going into the s&p 500.

Anthony Scaramucci 29:38
Well, I mean, the other thing is, I would say, as we’re both lamenting about some of our poor choices in venture capital, private equity, there’s something about the dream. You know what I’m talking about. There’s something about the dream you know, you want to be you want to be in the dream business, the dream making, or the dream, believing business, I want to I want to flip this over to these predictions because we posted them, we put them up on the website wealthion.com. Steven wrote these. And, like, in the old days, he put my name on it as well. So I want to thank him for that. Okay, but I obviously didn’t do any work, but that’s fine. So I’m gonna let Steve, start out with some of these predictions. I’m gonna chime in a little. These are the 2024 predictions. And in 48 short hours or 72, short hours 2024 starting, Stephen. So tell us what’s going to happen.

Steven Feldman 30:39
Okay, so first, I want to I’m going to do a little Wealthion commercial ask. We’re halfway through the show. I hope you’re still here. We do read the comments. And we are trying and Wealthion 2.0 to create, you know, make sure we keep the community going. So please give us your predictions. Put your own in there. Have some fun. Let’s do it. Like Anthony said before. You know, why have I just been low on the s&p 500 because I’m exercising my brain a little bit trying to beat the crowd. There’s a little bit of sport net for us. We all want to win. Please be in our community. We be grateful to you guys. Okay, so I’m going to start with the most lighthearted one, we have serious ones and we have unserious when this was a serious one. But I might have to change it already. Because I watched a football game this week, I had my Super Bowl prediction for the United is 31 ravens 20. And then I watched the 40 Niners play the ravens, and it didn’t look like the 40 Niners should be on the same football field as the Ravens. But I’m gonna stick with it because they have great coaching and they’ll try to figure it out. I also liked the dolphins. Alright, let’s go to one that’s more financial. So this one I cheated with, with Anthony gave me the head start. So there’s a you know, let’s, let’s talk about the markets and what might be a winner. I’ll start out and tell you that combined, you know, sort of one and three. Remember the markets and the economy and companies are not all the same thing. We have to decide that we can be in a recession, the s&p can go down and then one company can outperform I’m sort of looking for a muted 2024 I think a lot of the heat and light that we got in 2023 isn’t going to recreate itself. I think the news of the rate cuts and AI, I don’t know, I can’t see anything on the horizon with the exception of quote, peace. We’ll talk about that in a second. Not sure how big that dividend will be. So I look for a more muted 2024. But who would be the winner? The one company and this is Anthony’s idea. So I’m cribbing this one from him. He always has like cribs for me. I think this AI thing is extraordinary. I’m an I’m an early adopter, if you ask my companies I’ve challenged every manager and every company that I’m involved in with come in, how they’re using it and what their plans were. So we’re already way ahead of people. We’re writing content, we’re doing customer service, we’re doing a lot of the fraud prevention, all this stuff we need to do in the AR using AI companies. If you remember, back for people who are not nine, the first AI was Watson. It was IBM computer and it was going to beat everybody in a chess match. Somehow they lost the lead. They I don’t know what happened to that company. But Watson still exists from what I read about IBM that the whole company is sort of I think they’re concocting something in the back room, which is going to put them on the table. They’ve always traded poorly. They lost their li they would be stuck. They were in Vidya. They were in Vidya Apple, Microsoft, all in one company when I was growing up. I think they come back. I don’t know about valuations are long, but I think they’re, you’re gonna hear them in 12 months. What do you think Anthony?

Anthony Scaramucci 34:02
I agree with that, because unlike Polaroid, or Kodak, they moved, they made the change, you know. And just to remind people, Kodak actually invented the digital camera. They were the first one it was like a couple of megapixels and they had a digital camera. But they didn’t want to deploy it. Because they didn’t want it to hurt their film business. But they needed to do it. Remember Steve Jobs killed the most successful product. At that time, the most successful product in Apple’s history, the iPod, he killed it. He shot the iPod, and he put it in the iPhone. And then people said, Well, why did you do that was such a successful product. Well, if I didn’t do it, somebody else was going to do it. And so IBM is finally in my mind moving in a direction and it still has the CTO of corporate America. You don’t get fired Steve And I know this you don’t get fired in corporate America if you’re using an IBM mainframe, or you have using IBM consulting services, or IBM related products. And so I do, I do think it comes back. You know, I want to say something to you, Steve, because we’re gonna do a show in a few weeks after the World Economic Forum. I’ve been attending that forum for the last 17 years. And I find it is the best prediction mechanism. Let me just tell people this quickly. When I got there 2007 The economy was booming. And the consensus among the 3000 delegates was we were going to grow as far as the eye could see. And the Fed had solved all problems. 2008 Then came, we had the worst financial services crisis, the worst economic crisis of depression. And then when I got back there, in 2009, January of 2009, I was told that we were going to fall into the earth, the earth was opening, all of us were going to fall into it, and melt at the center of the earth. And of course, we started the greatest bull market in history. In 2016. The consensus there was that Hillary Clinton was going to win the presidency. No need to have the election. She was winning the presidency. And of course, she lost the presidency, but that was okay. 2020 right before the advent of COVID those 3000 delegates that Well, Donald Trump is going to get reelected president 100% that’s going to happen last year. And my good friend, Bill Kohane, who has written for Vanity Fair writes for PUC now, he interviewed me last February. He said, What’s your prediction for 2020 years old? Well, bitcoins going up. So bitcoins going on, why do you think that there were 3000 people at the World Economic Forum’s that bitcoins dead? It was in the ground dead? Get the casket and the cremation urn, but you know, and then Bitcoin went up. And so I guess what I want to ask you before we get into these other predictions, when you get this group think around something, okay. It’s usually wrong, right? Why why Stephen? Why is it usually wrong?

Steven Feldman 37:19
Well go back. By the way, the book I recommend that about the crash of 1929 would tell you about the pundit class.

Anthony Scaramucci 37:26
Okay, so this is the crash of 29 by John Kenneth Galbraith,

Steven Feldman 37:29
I’m gonna take take a read, because it’ll talk about the psychology of pundits. And, you know, isn’t this not a lot of Let me tie this into Wealthion for a minute, a little commercial for Wealthion. We’re trying really hard not to give conventional wisdom, you we we, arguably our competitor to CNBC, and we’re trying to do different we’re trying to get into people’s brains to have them think challenge them a little bit. And sometimes the comments are a little nasty, and you know, but we’re gonna take it. The whole idea is to stand I’m not a contrarian. Anybody who knows me, but I haven’t, I have a great ability to stand away from the crowd. My genetic code actually says, If someone everybody agrees with it, they could be right. But I’m not going to take it as gospel, that’s for sure. Because there’s the madness of crowds. And the desire to fit in is universal. And it doesn’t just stand behind the people behind Donald Trump, or religious leaders. It stands on all the people who graduated from Harvard Business School and decided to show up at Davos The World Economic Forum’s and these other things this group think, you know, I think back about the CEO of Citibank, who said, you know, when the markets moving, I have to dance. And I don’t think he believed for a second it was gonna end well, but he had he had no choice. He was damned if he did, it’d be damned if he don’t. And so you want to fit in with the cool kids at Davos, you can’t be a firebrand, you can’t be say something against it. So what ends up happening, it starts to blend the edges, shave away, shave away, shave away straight away until you only have one point.

Anthony Scaramucci 39:19
And Buffett talks about that with boardrooms, he says, you know, you’ve got the board seat, they’re paying you probably an ungodly sum for your quarterly arrival at the board meeting. And so you want to fall in line as opposed to really help the company.

Steven Feldman 39:33
So interesting. anecdote, a personal anecdote, I was on a, I was on a dissident board. And I was John Paulson was the shareholder, and I went on a gold company board as a dissident. And a lot of people told me if you do it, you’ll never serve on a board again. And to which I said there’s no board word that I want to sit on, which is a Country Club board if unless I’m doing something and the company was mismanaged, right and we ended up cleaning it up and selling it and by the way, everybody who came in on the day we I came in and the day I left made 100%. And by the way, PS I still got criticism should have been 200% sold to level.

Anthony Scaramucci 40:20
Right. Well, yeah, no, I listent . I mean, there’s no there’s no pleasing people in the…

Steven Feldman 40:25
But what would have been easier was for me to go to Russell Reynolds get on some boards vote yes. On everything be popular agree with everybody. Oh, he’s such a good board race. So agreeable? You know, all of the time that I have sort of in my mind, I felt like I’ve been a bit you know, disliked is because I wasn’t agreeing. And the louder you get, the more you put your job at risk. And so you ended up just going along with the crap.

Anthony Scaramucci 40:52
So let’s, let’s shift gears abruptly, if you don’t mind, I agree with everything you just said.

Steven Feldman 40:57
We have a prediction we have I don’t know if you could read your chat. But there’s a prediction. I’m reading your chat.

Anthony Scaramucci 41:03
Okay Yep. Okay, Eric is calling in with a prediction. Right? Is that correct? Let’s take the call. This is Eric. He’s Eric.

Live Question 1 41:17
Eric, this is Eric. Yeah, this is your calling. And I don’t have a prediction. But I have a question that you were talking about all time highs, right. And it’s where a lot of people that I’ve been talking to their concert aids, it’s going to be January, right, all time highs. Should I be buying right now? Because you know, I’m gonna get that bonus. Like you said, I’m gonna get a tax refund, I’m gonna get something that 401k allocations to put in the year starts and I have to put money in, do I really want to be buying at all time highs? When, you know, people are like, I don’t feel that great about buying up here. What do you say to that to that question?

Steven Feldman 41:53
Anthony, why don’t you start?

Anthony Scaramucci 41:55
Well start because I was for, you know, a long period of time a financial analyst, before I moved into being a registered investment advisor, I always told clients this, and I think this works is if you’re that nervous, you get put in half, or you take a third. And you just through your discipline, you put in some amount of money, because we can’t time these markets. Charlie Ellis who’s turning 90, has a great men more out of that his life and he reminds people, just you’re out of the markets for the 10 best days of the year, you lost the entire return from the equity markets, and so nobody can time them. No one can time them at least consistently and successfully. Otherwise, you know, we’d have our first trillionaire already. So my thing is, yes, markets are expensive. But you know what, in a hindsight test, okay, they’re going to be less expensive than you think. And, you know, Stephen and I are old enough to remember the Dow 30,000 book, James Glassman, wrote a book in 1999, when the Dow was at like four or 5000, saying that the Dow was going to 30,000. And everyone laughed at him and laughed at the book. And so the Dow is at 37,000 right now. Well, you say okay, well, it took 25 years to get there. But you know what, the people that stayed in there, got started, weren’t worried about market highs or lows are the ones that did the best. And so that’s my recommendation. Eric, I don’t know if Steve wants to add anything to that. But that’s the tried and true answer.

Steven Feldman 43:36
This is where you know, your perspective and your position in life changes. And if you are 25 years old, and you can put the money away and never look at it again, for 1520 years, you shouldn’t even worry. It’s interesting, I have 529 plans for my children. And the money went in automatically. And I never looked honestly never look to they went to college. And it did just fine. I bought at a lot of highs. But I don’t think that is modern portfolio theory today. And it’s also not where people are in life, we have an allocation, I think the stock market is is is rich. And so if you wanted to be fully invested, you could either invest with some sort of mix, you know, for mine, you know, I’m in the gold business. So for mine, it’s very little bit of bonds, a lot of cash for opportunistic investing, and then try to get the best companies in the stock market and then just close my eyes. The other way of doing it, as Anthony said, it’s a sort of dollar cost average because we are psychological and you don’t want to have that psychological burden and being on the other thing that people do, which is I don’t think it’s a terrible idea, it’s not market timing, but you know, you saw it you decide you’re going to put it out during the year almost every year there’s some sort of correction 10 To 15 to 20%. There’s always a moment where Here’s a buying opportunity a signal flow doesn’t go off to say when it is. But I guarantee there’ll be a day when the market is cheaper today and then push the chips. And you know, I think Buffett a lot, you know, sitting in cashes up goes up, I don’t get into money in cash, well, you get the cash return. So now they call that for four and a half percent. But you have the option value of moving that cash into something that feels cheap. So I think about it that way. So not that I get big bonuses anymore. But I’m, I’m going to allocate it, stay a little bit in cash and then pick the cash. opportunistically,

Live Question 1 45:38
I like you’re playing with the 529. Because that’s one of the things I was thinking about. Because in my age group, I’ve got all the friends that are parents that have kids now that have zero to five. So they’re thinking about that 15 year timeframe. And like you said earlier, you could buy at the top decades ago, 15 years later, you haven’t even made the money back. So I think there is some fear of like, if I start now, I’ll have lost money over the next 15 years. So maybe, maybe the dollar cost average is the way to go. And my other question for you guys is the classic 6040 miles that everyone keeps talking about that 40% bonds and a world where, you know, Bugs Bunny has gotten crushed a little bit here. Do you still do you still want to hear that 6040 as a as a common bass line benchmark phrase from people or would you think about it very differently.

Steven Feldman 46:27
I’ll start on this one. I’ve never been a 6040 person because I actually undergrad I was I studied economics. And I fundamentally, sometimes knowing too much is a little bit against you, I think the government just runs negative interest rates forever, we have $34 trillion of debt. And this we don’t live in a city in a country that can tolerate taxes or massive cuts in spending. So there’s only one way out. And the one way out, is through negative interest rates. And that means for me owning bonds just erodes my it’s like basically running in place or losing money. So that’s why I bother. That’s why I have a big allocation to gold because gold actually is in my version, my is my version of the bond. I don’t get the income but I’m, I’m I don’t need the income that bad. I have a salary and a bonus. I’m not retired yet. So I don’t care about the income. I care about keeping up with inflation, something that goes up when gold goes up over time. And if God forbid, something goes horrible, I have some wealth insurance in that gold bar. Otherwise, I’d rather just take the risk stocks usually outpace inflation, create a real return of those companies go out of business, tying me all the way back to that comment about the s&p 500 and capitalism, which is if you can’t make that return, the company goes out of business, in which case, I get to go into Nvidia. So a long winded way of saying I’ve never believed in the 6040 mix, and you you think $34 trillion dollars is gonna get paid off with today’s value of dollars. I don’t think you understand economics, and so or this country. And so that’s why i don’t i would i I’m so against the 6040 mix, unless you really need income in retirement than you have in a low tax bracket. But I forgot to add, I live in New York City. So every dollar of interest I get in that in the 40. I give half to the government. So I’m really quite against the 6040 mix. By the way, Eric, I know you have a lots of small children. So lots of 520 nines go long only. And don’t look, don’t look at 18 years.

Live Question 1 48:39
Yeah, that was the plan. The plan was simply like starting Jan one because they’re upping the amount you can put in starting January. I’m gonna start funding five kids worth of 520 nines and, and I’m hoping that at least there’ll be at least 1% 16 to 20 years later. So I agree with you. It’s gonna be all long, long stalks, see what happens. But my last question, then I’ll go because I’m not the host of the show, you know, mooches but, but when you said last week, you you got a duffel bag full of gold, and you were just hoping the cops didn’t kill you and take it all. How much gold did you have? pounds? How much gold because I was thinking do I need to do that? Do I need a duffel bag to get some gold? Eric

Steven Feldman 49:18
I you know, I know you and I know each other. So it was this is like a freebie. You know, you look like a pretty strong guy. One chocolate bar of gold. That’s a kilo that’s the same size. That’s that’s today that’s $70,000 and it weighs a kilo 2.2 pounds. So it was a heavy bag was there was not an insignificant amount of kilos in there. And it was quite heavy, manageable. But I keep saying to myself, I’ve told that story 100 times. I know if I was in the back then they would dial cars. If I wasn’t a dial car accident. Seriously, I wasn’t going to the hospital and that bag was gone man. those golden those green Goldman Sachs duffel bags?

Anthony Scaramucci 50:04
i Yeah, I’m embarrassed to tell you still have one actually, I want a little bit of a little border.

Steven Feldman 50:11
David Solomon, if you’re listening, I lost my Goldman duffel bag. Can I have it back? I mean, I did spend 23 of the 23 years there.

Anthony Scaramucci 50:18
It’s funny I was I was actually at the TSA heading on a trip and I saw somebody with that bag. And I was like, Oh, my God, they’re still, you know, using these bags and Coleman, you know, but you know, listen, Eric, I mean, these are great questions. And these are questions that everybody has. And unfortunately, at various points in my life, Eric, I shot in the dark, you know, I didn’t, I didn’t have a financial advisor to give me the advice that I needed. You know, and, and the truth be told, when I was a financial adviser, I was like the shoemaker. You know, my shoes look terrible. Everyone else’s shoes were well attended to. And I was trying to outsmart the market or our guests. People are and things like that. And you don’t need to do that. And I think Stevens Point about, sometimes knowing too much, is a curse. It’s probably just better to be somewhat formulaic about these things, particularly when it comes to your kids. That’s, you know, something I would just point out, and I, you know, I think Steven can reflect upon this as well. I just did that for my kids what you’re about to do for yours, Eric, it worked out better than my personal portfolio. Just that simple formula.

Live Question 1 51:31
That’s great. That’s great. No, I appreciate that. Thanks for letting me jump in and keep up the good show. I’ll keep watching the rest of it from here. Happy New Year. Happy

Anthony Scaramucci 51:40
New Year, man. Happy New Year. All right, Steven, I want to go to a few of these election. Oh, yeah. Okay, cuz I listen, I mean, you have a great prediction here about the election. Okay. You’ve got you’ve got a potential conviction of a former president, you have a potential healthcare, health scare of a current president. Take us through a prediction number six 2024 presidential election

Steven Feldman 52:08
Listen, you have 11 more days in the White House than I do so I’m more interested in what you have to say. But okay.

Anthony Scaramucci 52:14
Hold on a second, you didn’t go on tour once you didn’t like one tour and the way you put it on the White House. ,

Steven Feldman 52:18
Yeah, actually, believe it or not, I have a photo, I’m not going to show it of me next to a wax sculpture of Nixon put my arm around and my sister so I’m aging myself.

Anthony Scaramucci 52:29
There you go, by the way, and that the Nixon White House was rundown. And trust me, the Trump White House also run. You gotta do a better job with these public housing. I mean, I’m gonna just let you know. I mean, these these places are not what they look like on the outside.

Steven Feldman 52:46
So we’re gonna go we’re gonna go through this one quickly, because we have a caller. Okay, so here’s, here’s my let’s, let’s talk about the Democrats for a second. You know, we’re beginning to get this little bit of I get this Jimmy Carter vibe out of Biden. I’m not even talking about whether it’s deserved or not. I’m not I’m not going to opine on whether his policies on everything from infrastructure to middle class to immigration to Israel and Ukraine or I don’t know, I’m not saying this no, that is polling poorly. And, and a lot of his coalition’s are cracking. And so I think the Democratic Party, there’s a lot of hand wringing, you know, and I think that whether, if any sort of event that could be a medical event that could be a bad fall or a slip creates a narrative that allows the Democratic Party to gin up the machine and the pressure for Biden to step down for a prearranged, winning ticket. And then my opinion that winning ticket is a combination of Gretchen Whitmer, and Jay Pritzker. Jay Pritzker comes with a billion dollars of his own money so you don’t have to fundraise. And he’ll be able to go fund, they’ll obviously be a lot of fundraising, but he’ll be able to bridge any funding gap. You move down the youth curve a bit, you move up the popularity curve a bit. And now you have a clean shot to run if Trump is the nominee on age, sanity, policies, demeanor, again, not commenting on any of Trump’s policies, just commenting on the way Americans seem to vote. I remember back when people were voting for George Bush and I was listening to some of the people say, you know, here’s a guy that I want to have a beer with. And I just feel like in American politics, getting those two people on the ticket, any excuse to get them on the ticket. I think that’s the winning ticket. There may be others, but I think that’s my prediction for the Democratic Party.

Anthony Scaramucci 54:53
Let’s take our call. This is Tyler Tyler, can you hear us in the great state of Missouri?

Live Question 2 55:04
Yes, yes. Thank you for taking my question, y’all. I greatly appreciate it. Um, I’m going to keep it quick. I don’t want to take too much time from y’all. But um, have you personally looked into cryptocurrency nodes, such as nodes that allow you to earn passive revenue from the transactions on the network? And if not, I strongly recommend looking into Vulcan forge that peer token Tyr.

Anthony Scaramucci 55:30
Okay, well, I, you know, full disclosure to everybody, Tyler, I own a lot of Vulcan fours, I was an early investor in Jamie’s company. And we have at skybridge, an Elysium node, which basically earns us money. And so again, for Stephens benefit, what these nodes do is they confirm the transactions. And then the network itself actually gives you a return as a result of that. And so, Tyler, I have a lot of that that’s a gaming token is a utility token in the US web three gaming space. And so obviously, I’m quite bullish on that. I also have a, we also run a Bitcoin node at skybridge. It’s a little bit less lucrative to run a Bitcoin node than it is a gaming utility token node, but I’m with you on these nodes. And they don’t, you know, again, not to bore everybody who may not be interested in nodes, but they don’t take a lot of time or energy to set up, frankly. So I appreciate you calling in and Happy, Happy New Year to you, sir.

Live Question 2 56:39
Thank you, mooch Have a blessed New Year. Thank you, Steven.

Steven Feldman 56:42
Happy New Year, Tyler. Alright, so Anthony, I am not going to let you leave. We have just a couple of minutes left last show. Yeah. 2023 We’re ushering it out. You? You obviously you’re like Zelly, you have show up in lots of places that I wouldn’t expect. I didn’t expect you to show up in the White House and Nick show you up to be like a crypto Maven, God bless you. By the way. I am super impressed. Who’s gonna be the next president United States?

Anthony Scaramucci 57:10
It’s a really good question. And I I’m gonna say something that people are not gonna like, by the way, I used to say this, okay. You and I have a lot more forehead than when we first met. You know, I’m, I’m on a fivehead. Now, I’m not saying you. Just I’m just like, you know, we have more forehead than when we started our relationship.

Steven Feldman 57:37
I have a lot of other things that less hair and a lot more, a lot more wisdom.

Anthony Scaramucci 57:43
You have more wisdom than me, I’m gonna, I’m gonna say Joe Biden. And people are gonna, like, throw up on me and blah, blah. But I want you to stop and look at the job that he’s done. And look at where the economy is. And look at where interest rates are and look at the stock market. People typically vote with their wallet. And so if he doesn’t have the health scare, predicted in the Wealthion, 2000, SpeakUp, 2024 prediction, if he doesn’t have the health scare, and he manages his way through this process, he could end up as the president now maybe I’ll be dead wrong on that. I will say this to completely mortified and embarrassed myself. If you asked me that question. In 2008, the early part of 2018. And let’s say it was December 29 2007. I would have said that the nominees would have been Rudy Giuliani and Hillary Clinton. Okay, so I got that about as wrong as somebody could get it. So I’ve never been good at this, which is probably why I only lasted 11 days in the White House. Stephen, I’m not really well suited for politics.

Steven Feldman 58:50
Yeah well, you know, but you had a Hunter Thompson sort of life. And God bless you for that. And thank you for letting me be along a little part of the ride.

Anthony Scaramucci 58:57
Well, I’ve seen the feeling’s mutual. See, see Steven is bringing up something here before we close out this show. Stephen is saying I’ve been saying for a year that Trump will never become president, because the system will not allow it. It’s interesting, you know, Trump was going to say that the system wasn’t going to allow him to become president in 2016. And, but the system did allow it, Stephen but

Steven Feldman 59:26
different Stephen, this isn’t me. No, no, no.

Anthony Scaramucci 59:28
I know, Stephen mix. I know. I know. We’re starting with but I think Steven mix is going to be right on this. I think I think out I think Al Capone and Trump have a lot in common. Government has decided that their targets. Al Capone was previously untouchable. No one thought they would ever get him they got him. Everyone’s saying the same thing about Trump. I think he goes down like ankle bone. So Steven mix hopefully, you’ll call in if that happens and you’ll say hey Gustad here on Wealthion. Speak up with the mooch Well anyway, guys, it’s been great to be on. Happy New Year. I’m up here winter mountain. It’s 55 degrees. So just if you’re not a scientist, you can’t make snow and 55 degrees. In case you didn’t know, so we’re slogging it up here. Lots of fast food. What are you doing for the new year? Steve?

Steven Feldman 1:00:21
Not any. Not any downhill swimming. That sounds like that’s what you’d be doing. I’m heading on holiday next year.

Anthony Scaramucci 1:00:27
Downhil mudsliding.

Steven Feldman 1:00:27
Yeah, you know, I just I the reason I don’t work this week is I think it’s one of the very few weeks you get to think sort of, it’s been fun, but this has actually been really enjoyable. Thanks for having me on the last two weeks. If I can come back from time to time, I would really love that.

Anthony Scaramucci 1:00:46
We were having you back. Robbie back to speak up with Anthony Scaramucci, the mooch please send us emails. Send us comments. If you think we suck. We want to hear that too. If you’d like us great. What we what we could do better. We want to hear that as well. And thank you so much today for joining the show.

Transcribed by https://otter.ai