Join us on this week’s episode of Speak Up, Anthony Scaramucci sits down with Matt Higgins to chat about some of today’s most compelling topics in business and education. This conversation takes us through the practicalities and potentials of AI, dives into the mindset behind counterintuitive investing, and explores the importance of acknowledging and learning from our missteps.
Anthony Scaramucci 0:15
All right and we are live with Speak up. Speak up with Anthony Scaramucci. You can call us anytime nine to the mooch but Matthew Matt Higgins. Best Selling Author Shark Tank.
Judge, I think it’s a judge right.
Matt Higgins 0:33
It’s not judge it’s not judge was called a shark. Scholarshare All right.
Anthony Scaramucci 0:37
Miami Dolphins guru. You had a great, great season this year. Who’s gonna win the Super Bowl?
Unknown Speaker 0:47
I love Dan Campbell. So I’m gonna say Detroit
Anthony Scaramucci 0:51
said because you’re a fan? Or Is that your real Jimmy? The Greek analysis who’s gonna win the Super Bowl? It’s
Speaker 1 0:58
it’s none of the above. It’s an it’s an emotional it’s an attempt to manifest something I would like to have happen emotionally. Is there a category for that? Okay, yeah, this
Anthony Scaramucci 1:07
category for that. Category. Everything that Matt Higgins does.
Unknown Speaker 1:11
What’s up mooch?
Anthony Scaramucci 1:13
Look at that through beer you This is speak up with Anthony Scaramucci.
So, Matt, we know each other a long time. Okay. Well, I’m lying about my age now. So you just turned 60? Yeah, I just turned 60 See that you had to open up with that. Right you did when you publish more people in my household. This had happy 27th birthday. I was very happy when my mother in law was coming in with the balloons. And it said a six and a no, no, I wasn’t happy. Okay. Very bad marketing from my mother alone. But but we know each other a long time. You’re a brilliant entrepreneur. You have an amazing life story, which is why I wanted to bring you on because we’ve got a lot of aspirational young people. On the show, you wrote a great book, best selling book called burn the boats, which I have given out hundreds of your books to young people. And I and I love I love the book, Love the messaging. I got a big stack of your books from Amazon recently at the house, because I’d like to keep a stash of them around. So tell us a little bit about Matt Higgins. I don’t want to go into your residence at Harvard Business School. But for those of us that don’t know Matt Higgins that are listening in tell someone how you got raised. Tell us a little bit that startup story. That’s Matt Higgins, Inc. Well,
Speaker 1 2:38
well, thank you, by the way about the book. I appreciate that very kind. You’re very kind generous person. Mr. Scaramucci? Well,
Anthony Scaramucci 2:44
I mean, you make me look good brother. That’s watershed. So
Speaker 1 2:47
for those who don’t know. And so if you do Sorry for being redundant, but I grew up in Queens in New York, on Springfield Boulevard, Bayside. And there were these little garden apartments there that were rent subsidized. I think our rent was like 350 bucks a month. Then I was raised by a single mom, who was fiercely intelligent, but progressively more disabled. As time went went on. She actually had a GED, which is relevant to the story. Very, very abusive childhood, which only was revealed to me after she passed away. But so My early childhood was, was basically doing whatever we would take to survive. I used to work at McDonald’s on spring football of arts scraping gum, under the tables and selling flowers on the corner of the highway on Mother’s Day and, and scalping tickets before it was legal, just whatever it would take. Because one of the gifts that I was given was from a very early age was a sense of like, I don’t belong here. Like, I don’t know how this happened. I don’t know how I ended up being like transported to a roach motel on Springfield Boulevard like living in dirt. But I want a better life for my mom and for myself, and so crazy, crazy background, and a moment of desperation of frustration, when I realized that cavalry wasn’t coming, I made a radical decision inspired by my mom, actually, which is back then if you took your GED, and you did well enough, no matter your age, and even though your class hadn’t graduated yet, you could go to any college in America, kind of like the pity path. So I was like, Wait, anything, and I did it. I am I burned the boats move, which I can get into is not that I dropped out of high school when I was 16. To go to college. It was that when I came up with this crazy idea, everybody tried to talk me out of it. And so my revelation, which is carried and we can get into this throughout my entire career, was that if you really want to do something bold one, you’re likely to be alone because it’s bold. No one’s gonna agree with you. But two, you actually have to lean into self sabotage. It’s counterintuitive. And so I got left back every year sat in the same homeroom for as I call the land of misfit toys, everywhere in beepers, dealing drugs, may slinging flowers and scalping tickets, and that gave me no choice but to go forward with my plan because I had a fifth The five GPA by the time I dropped out of high school
Anthony Scaramucci 5:03
and the rest is history, Anthony, okay. Okay, but but there’s a manifestation in your brain forget about school for a second because some of us suck at school, some of us are really good at school in school can’t be the defining characteristic of a success quotient. So for me, you have like three or four things that are going on simultaneously, you are a gifted person in terms of observation and analysis, you’re a great investor, you are a warm person, and you have an open heart towards people, which is why you teach at Harvard, or you’re a shark on Shark Tank, or you’re writing a book about your life, and things that you think about so that you can share it with other people. And then the third thing, which is really the Mad Higgins, inspiration for me is, you’re not at fun. It’s okay, you’re a fun guy, you’re a guy that other people want to be with. And so, so how do you go from the GPA at 55? And whatever the hell was going on in your life, to making the transition to where you are today? So
Speaker 1 6:10
I think the simple answer everyone, we’ve all been through crap, and hell, our own versions of it. But I think when you go through hell, and you come out the other side, we all have a fundamental choice, we sort of come to a fork in the road, you’re aware that you were denied something or subjected to something. So you’re going to respond to that by denying that to others for the rest of your life, or subjecting them to that which you were subjected to, like, I had to walk five miles to school, so you should walk five miles to school? Or are you going to take that experience what you witnessed and realize the gravity, the trajectory change in your life it would have made if you were supplied that thing or not subjected to that thing. And I think I chose to say, I witnessed my mother literally die in hellish squalor. When the whole world turned the back on her. She didn’t need to die. Like I witnessed the power of having no one care apathy, and realize you know what the greatest and best use of my money, time, energy and talent is going to be ameliorating suffering. It doesn’t mean I need to be Mother Teresa, but I’m never going to forget what would have happened. Had somebody cared. And I’m going to use that to propel me otherwise known. Are you going to be bitter? Or are you going to be generous? So for me,
Anthony Scaramucci 7:25
another thing another great thing I love among the many things I love about no self pity, okay, life is unfair, bad stuffs gonna happen to you bad stuff did happen to you. But you can’t have any self pity. You got to dust yourself off and you got to go forward in your life and live and dream and manifest your life.
Speaker 1 7:43
I mean, you and I both been around politics we can get into my whole life, right? Like honestly, victim victim narrative is fool’s gold being peddled by cynical people. You have two ways to get elected, right? You go the populace route, you can go the kind of the route where you have no empathy for others. And you know, you’re you’re cruel, you lack compassion. But I would say honestly, those who peddle the victim narrative are actually just being cynical and trying to play on on emotion when in reality, it’s fool’s gold that doesn’t leave anywhere. So I have never once allowed myself to indulge in the idea that somehow I’m a victim or somehow, why you know why this happened to me and I always respond to every bad thing that’s happened, saying, why not me? I mean, I seem pretty well equipped to I had testicular cancer. I’ve one testicle. I’ve seen pretty well suited to be that guy.
Anthony Scaramucci 8:28
Yeah, I’m 11 years survivor, but also you are a you’re a guy that gets uh, you know, I tell people, I’m too short, Matt, to see the glass, anything other than half full, and I’m looking at the glass and it looks cold to me, why can’t Why am I going to get myself upset? Are you just at Harvard, yet? You have a residence at the Harvard Business School, which is an amazing achievement in itself. You’ve done this now for the past six years? What do you teach them? And what do they teach you, Matt?
Speaker 1 8:55
I mean, I love the story of this class on multiple levels, because you know, to go from GED to faculty at HBS, as an executive fellow, that when this all first started, it was always a dream for me to compete honestly, in an academic setting. And because I take care of my mom, I did seven years of college at night, four years of law school and 911 years working multiple jobs. And, but to be even as I say, this, you Anthony, I’m like, You’re full of shit still on excuse, you still could have found a way to compete. Like literally I deny myself that could I’ve really competed in that environment. So I always wanted to be I have an academic part of my brain and I want to do it and so I pitched HBs on this idea of like, What if we created a course that breaks down the the omni channel journey in consumer, right, and we bring the most cutting edge companies that are not, you know, five years ago for an HBs case study. They’re happening now. And we really show them what, what not only what the omni channel looks like, but also what does it take to be successful entrepreneur from every angle? Long story short, over the course of that week, to answer your question, what did we teach you? We teach what does it take to scale a business using DTC and E comm? What does it take to withstand the challenges in this fundraising environment with a private equities close, like, we show it from every angle, but what makes the class truly magic? Is the fact that a lot of the case studies you get in any business school, you know, this are like businesses that aren’t quite relevant anymore. I’m gonna throw out like the gap or something, you know, it’s like, fine company, but nobody cares. And so this year, I brought the CEO of Shopify, Harley Finkelstein, we brought lollipop for those who know about it. It’s probiotic drinks like it’s, it’s athletic greens, cat Cola, CEO came up. So these awesome cutting edge businesses, but the part that I’m proudest of, is that takes place over a week. And it’s like, it’s, it’s it’s unrelenting schedule. But by the end of it, it really reveals the journey from beginning to end, you know, that you really just wouldn’t get in a business school environment.
Anthony Scaramucci 10:56
What do you learn from these kids, though? Man, you walk out of class, enlightened by something, what is it such a
Speaker 1 11:02
great question, the the thing I learned the first year, and then I still am surprised, coming, you went to Harvard. So it’s a little bit different, right? But coming from where I sit on the outside looking in, I would think that somebody who makes its way, their way all the way to Harvard, can now take a deep breath and say, my downside has been de risked, right? Like, there’s, there’s now you know, a floor, I’m going to make six figures like I have prestige, right. And when I finished the first year, and it was amazing, and I went back to do a lot of career counseling, I realized that whether you’re talking to a kid at Queens College, like I went to our kid at Harvard University, they have the same fear, the same sense of imposter syndrome, the feeling that I don’t belong here, I don’t know how I got here. There is not an ounce of them that feels like their life has been de risked. And I love that because it just reveals the shared journey that we’re all on and how easy it is to judge somebody else. Somebody asked me this question. Hey, Matt, like because you didn’t go to Harvard? Like, do you just toss away those resumes and look for the kid from Queens College? And I’m like, Absolutely not. What it takes to go to that institution. Anyone sitting in that room has their own troubles and idiosyncrasies that are just as large to them as whatever it is that I dealt with. So long way of answering, Tony, I love the humanity, of connecting with people that I would have thought would have felt like they got everything ahead of them, and they’re just as fragile as anyone else.
Anthony Scaramucci 12:23
Well, I’m I mean, I I love. I love the sentiment there. I think the thing that I found when I was there, Ross Perot may remember Ross
Speaker 1 12:32
Ross about the great Tuesday commercial that he ran the 30 Minute infomercial. Right, exactly.
Anthony Scaramucci 12:37
And he was also he ran for president, but he was also a very famous entrepreneur, and American billionaire, when billions were really a lot of money, polled 20% as an independent 20%. As an independent, he had a lot, a lot of truth in what he was saying. He came to speak at Harvard Business School. In 1987, I was over at the law school. And so I crossed the river. And I went into the amphitheatre to hear him speak. And he left me with something I’ll never forget. He said, you guys. I feel sorry for you guys. And I said Ross was what it was, he means you’re going to Harvard. So now you’re not going to take any risk, you’re gonna go to McKinsey, and Goldman Sachs and Ernst and Young. But some of you are real dreamers and entrepreneurs. But because you went to Harvard, you’re going to fear failure. And you’re going to try to land yourself someplace so that you don’t have Harvard be your crowning achievement. And his point was embrace the suck, go out there and fail at a few things. And I took it to heart of course, I went out and fail that many, many things met. No, but
Speaker 1 13:42
that’s a brilliant insight. I talked about that a lot to that. It’s very important. The more successful you become you define your needs as narrowly as possible. They must be moving in opposition. What do I need? What do I got? Because what you got does become a prison. It’s what makes people totally risk adverse. I’m always meditating like, I need my wife, I need my kids, I need my sustenance. But other than that, I don’t need anything else. It’s such a great, great, great, brilliant advice. Because when I what I love about my course in particular, when I start, you know, the room is full of big future McCain McKinsey consultants and fewer Bain, and by the end, they’ve lost a couple of people. And again, nothing wrong with going that route, but it reawakens the dream and makes people feel like it’s
Anthony Scaramucci 14:23
almost the night I want people to reach their dreams. My roommate from Harvard Law School he was literally a Goldman Sachs bank are like if he was in a box like a Ken doll, you know what I mean? If you pull them off the shelf and you open up the box, he was the prototype of a Goldman Sachs banker and God bless him he had a great career there and went on to become a partner there he he did phenomenally well from a wealth point where he was just wasn’t an entrepreneur. And you don’t need to be you need to be who you are uncomfortable in your own skin. Did you ever practice law I don’t even know if I did not in practice going I actually failed the bar, which freaked out my mother and then I had to go We’ll take it again but I didn’t even need it. But I did it to shut my mother off. And then there was one day I was in Roseanne owes Deli in Port Washington, which is where I grew up. And Mrs. Cap Yanko turned to me and said, How’s that law firm Goldman and Sachs that you’re working at is, excuse me, your mother says you’re a lawyer at Goldman Sachs. And I’m like, my mother, okay. My mother was embarrassed that I was working at Goldman. That’s it. She was embarrassed. She wanted me to be a lawyer. The hell’s wrong with you? What is this Goldman Sachs? Okay. And that’s how I grew up. I mean, no one. I mean, my mother thought I was going to Harvard Law School for the first two years, she had no idea where the hell it wasn’t, didn’t care. So,
Speaker 1 15:37
you know, I never I never took the bar, because I never wanted to, you know, I never wanted that to be my fallback plan. Once I decided I was never gonna be a lawyer. Well, we’re
Anthony Scaramucci 15:45
gonna get to burn the boats in a second because I think that’s really important. But I want to go to some of your tweets because I’m a big follower of Matt Higgins on now called X, but I guess we can still use the verb tweet.
Speaker 1 15:59
By the way, you and I were debating talking when you first joined years ago, we were doing you know, like, should we embrace it? I don’t know if you remember, you probably don’t. But it was many years ago when you first started. What are you going to throw back in?
Anthony Scaramucci 16:10
1009? You told me to get you get on the bus? Um, no. I mean, you have these great tweets. I picked out a few and then your 2024 contrarian guide. Wealth Creation. Okay, people should follow your what’s your handle on x? M, Higgins and HCA. So people should certainly follow you. But myth one, all debt is bad. pay it off. That’s a myth 100%
Speaker 1 16:35
of myth, it’s clickbait. Because let’s use real estate as the prime example. Real estate is basically one of the only ways that anyone who’s not, you know, rich and got a relationship with a bank can get leverage, right? And non recourse leverage, right. And so the ability to go ahead and control, let’s just use the numbers of a million dollar asset and put down 20 20% and get the appreciation on that asset, which historically real estate appreciates. Four plus percent. So I think telling people, you know, all debt is bad, that’s very bad. Because when I look around a lot of people that I grew up with, who’ve made some really terrible decisions, for some people who did, okay, it’s because they bought a piece of property early on their life. And as you know, the rule of 72, right, simply take that interest rate divided by 72, and 15 years from now that property doubles. And so I just am a big believer that not all debt is bad. I didn’t pay off my student loans for, like decades, because they were locked into like, 2%. So why would I want to pay that back? When I get a better return on that money?
Anthony Scaramucci 17:38
I think it’s great. I think it’s a great lesson. That’s why I brought it up. Let’s talk about making money in Upper down markets. Give us some advice there. You’ve been uncanny at being able to do that. A lot of people get scared when the markets crashing. Yeah,
Speaker 1 17:52
I think let me tell you about this. I’m a firm believer that the enemy of wealth creation is diversification. And that at the that really successful people try to consolidate their bets, and they dilute their doubt by cultivating their conviction. What’s it going to take for me to believe more strongly in the thing, I believe, and how do I pressure test it? And so I think the way to make money and up or down markets is to have, you know, a few central themes that you really believe in, that are backed by tail winds that can blow stronger than the headwinds, right. And that you don’t have to be specifically right to be right overall. In other words, like, you’re betting on a company, but it’s getting the benefit of the tailwind. And even if it doesn’t work out perfectly, you’re still going to do okay, so let’s use the videos example. I was pretty early on the video relatively. And it’s only because I talked to people all day long. And I would talk to folks who understood AI much better than Anthony or I do. And I was like, Who has pricing power? Who’s the plumbing of AI? And the answer was always no video, no video, these chips. And so, you know, I went hard on it. Same thing with GLP one drugs. You know, we all have these little insights that are gold and we dismiss them because maybe we’re not professional money managers. My mother died of obesity. I watched her unable to escape the vortex of obesity. She eventually died from pulmonary thrombosis sitting in a chair of throwing blood clots. So I understood if you could if you could, if you could reverse obesity, all these other conditions that go along with it, you could change society. And when GLP one drugs started on the market, I went I would spend endless hours researching Lilly in particular women Jerilyn all this and then I’ve concentrated my portfolio so at any one period of time, I am concentrating 75% of all my assets in three stocks. And that is how I do well and number two,
Anthony Scaramucci 19:45
I don’t You Can I ask you to three stocks you mind
Speaker 2 19:49
I just gave you two as I’ve been in the video Lilina video what else? Literally no video
Speaker 1 19:55
and Microsoft. Like you know, and that’s like obvious, but the other thing Tony, I do, which to get into it a bit is like, there’s two forms of conventional wisdom that are both true, but that don’t tell the full story, you know, put your money in an index and outperform a money manager, right? Because you know, just put it in a spider, or give your money to a money manager, because they’re going to make sure you don’t make stupid decisions, I actually think you can beat both the money manager and the market and index by being an active custodian of your assets. And by because no one is going to care more than you about, you know, in any given day, you know, how to manage your money. And so for example, I love derivatives, I love writing cover calls, I write lighting by love puts, you know, nobody’s management money is going to bother making three or four transactions a day. But I can go ahead and squeeze out some alpha by by actively managed my money. Okay,
Anthony Scaramucci 20:51
so just for some of the young listeners, yes, for a covered call, is you own the stock. And now you’re writing a call contract at a higher price. So you’re covered meaning, worst thing that can happen to you, as they bought the stock at 50, you write the option at 65, the stock moves to 65, you’re a natural seller there. And of course, as the stock doesn’t get there, you’ve collected this call premium, and you’ve added it to your overall return. Right. So it’s
Speaker 1 21:23
a great strategy, when you are fundamentally long something, you people will say that’s a mildly bearish, you know, view, because you’re capping your upside, I actually don’t believe that’s the case. Because you can do something called roll the call, you can go further out, collect some additional premium, you know, move the strike price up. But it’s a perfect example, if you’re long, let’s just say Microsoft, they keep it simple, right? And you’re your money manager has put you in Microsoft, and you got you know, $100,000 in that stock, they’re not going to sit there and say, Hey, Matt, let’s write some covered calls on Microsoft. And they’re not going to manage the strike price. And because it’s not worth the time, but it’s worth the time for you. So So you did a great job explaining it to anyone Young, who doesn’t quite get it. The easiest thing is just make sure you pay attention to call to option strategy around your money. Okay,
Anthony Scaramucci 22:09
well, let me ask you, this is a little bit of a risky thing. It’s called selling a put. And so you like a stock, let’s say the stock is at 50. And but you sell a put at 40. Because you’re willing to buy it at 40. And of course the stock doesn’t get there, you’ve collected the premium on the other end. So there’s a covered call, but also selling a put, but selling puts a risky because if the stock gets hit at 40, and it heads down to 30, you’ve lost some money. What do you think about selling puts,
Speaker 1 22:40
I love that we’re talking about this fall, I love selling puts, I think there’s ways to minimize the risks. Number one is try to back in very, very large cap companies, you’re not going to get paid the same premium, because not as volatile. But ideally, you have some built in protection of black swan events. Number two, when you’re selling puts avoid catalysts. Avoid earnings, avoid anything that you think could trigger a big move. Number three, this is complicated. But you can go ahead and sell a put spread, you know what I mean by a put spread rather. So you can, as Tony said, you can, you can rather sell a put spread, you can sell it, you know 530, but you can buy at 500, just in case there’s a black swan event you can be you could protect your downside, but right
Anthony Scaramucci 23:20
in some premium, but you’re giving up some premium to protect your downside. So. So these are things that I love just to
Speaker 1 23:27
say with that I love put writing even more than call writing because the market goes up over time. And so you have the gravity, the gravity of the market, eventually by your side, but you have to be really careful where young people screw up. And anybody listening to this can probably relate is you chew you chase premium. And you want to get that great premium. And you don’t realize, well that premium is coming to you because of the volatility of the stock and the risk and the risk. So if you’re going to play the game of calls or puts, I think you do great blue chip stocks that have you know, significant market cap and you avoid catalysts and and you could generate decent return. All
Anthony Scaramucci 24:03
right. It’s very, very helpful. We’re going to take some questions from the audience. Some of this stuff is brewing up on our we started with some of the emails that have come in, and then we’ll go to burning the boats that mentality if the Fed cuts rates without taming inflation, which raising rates was never meant to do. How is the how is that possibly good for the economy or the average consumer?
Unknown Speaker 24:28
What do you think I want to hear your first reaction?
Anthony Scaramucci 24:31
Um, well, I actually think the Fed is is is raise the rates to try to tame the inflation I might necessarily saying it worked. But I think that they have an ancient playbook of raising rates to slow down the economy and tame inflation. And I would say that cutting the rates at this point is probably a good idea because I think we are tipping over now. And the worst thing that the Fed can have is deflation. God forbid you get an Situation in this debt laden environment where you have to repay dollars with dollars that are worth more than the ones that you borrowed. The only way you can live in a debt laden environment, unfortunately, is with some level of inflation, you’ve got to monetize the debt and pay the debt back with dollars that are worth less than the ones that you borrowed. Fed has been doing that now for 150. year since its inception in 1913. So let’s call it 111 years. What’s your opinion?
Speaker 1 25:27
Yeah, I mean, first of all, I like the wording of the question because you’re, you’re zeroing in on the reality of the Feds target was 2% inflation, right? So I actually thought there would have a more political pressure on the Fed, fed to walk away from that goal. If you read, you know, especially Financial Times read out of Europe, there’s a lot of debate whether that should even be the goal. 2%. But setting that aside, what what camp Am I in? I’m not convinced we’re going to have nearly as many rate cuts this year, I’m not convinced that the Fed is going to conclude the war against inflation is up, because, you know, we’re defying a lot of forces that we had assumed were fixed, you know what I mean? And so one of them is, if the Fed were to bring inflation down to 2%, unemployment would end up north of 5%. There’s a ton of papers from economists that tie those two things together. And yet, we haven’t seen the uptick and unemployment, which makes me believe that that the war against inflation isn’t necessarily over. But regardless of that conclusion, I’m not sure the Fed will be cutting rates in the first half of this year at all. And that’s what’s interesting about this market, I think, first it baked in that we’re gonna have a cut March, that’s reset without getting the reset in the market, which I found fascinating. I thought the market would have corrected based upon the change in percent, but But
Anthony Scaramucci 26:42
you got better GDP growth numbers, which means you’re gonna have better earnings. So that
Speaker 1 26:46
that kind of makes sense. But we were for a while the market was running based on rate expectations. Right, right. Last December, right, but now it’s running based upon the health of the economy. But if the economy is that strong, that means we might not have gotten inflation under control and rates won’t be when we go down. But to ask your question, how is it good for the consumer? As Anthony mentioned, he’s exactly right. Right? You, you, you you, you increase rates that basically tamps down investment and spending and eventually things reset, right? How it’s good for the consumer is eventually it’s going to the inability to get debt to take on capital is going to show up in job creation, it’s going to show up, like, if you talk to any small business out there and medium sized business, nobody can get capital to invest. If you can’t get capital, you can’t invest. You can’t buy a news store. Let’s say you have two coffee shops, you want to get a third, yeah, but now your carrying cost of that debt is too high to make it worthwhile to build it out. Now, you’re not hiring the contractor. Now, you’re not hiring the barista, that must show up. So I still think we’re living on the contrast of stimulus of that 5 trillion in stimulus that hasn’t finished working its way out through the system. So I feel I’m not at all convinced that the Fed is going to be cutting rates this first half of this year. So
Anthony Scaramucci 28:00
Steve’s coming in here, Stephen mix fed, not cutting rates at all would be a big shift in market expectations. So let’s just play the contrarian game a little. So I think they’re cutting rates. And you think when do you think they’re cutting rates? Well, I think I think certainly by the middle of the year, you’ll see at least one rate cut. And so I
Speaker 1 28:21
think you’re almost saying the same thing. I’m saying it’s not the second half, I’m not sure how many cuts.
Anthony Scaramucci 28:27
They cut steeply going into the election. And I think that if Alan Greenspan could be accused of hurting George Herbert Walker Bush in 1992, by raising rates into the election, I think Jerome Powell is going to help President Biden by cutting those rates. And he’ll find reasons to cut the rates. And so that’s my feeling there. So Steven, I appreciate you bringing that up. Let’s go to the next one. I believe the market will top at the end of February. What do you think it’s called from Long Island, I have a soft spot for a long island call because it’s why spend 90% of my life market going to top and February, for this good year for the mortgage?
Speaker 1 29:07
Well, I’ll just repeat, I’ll just repeat the prediction I had made since I put it out on Twitter anyway, that the market would would would correct 10% from whatever was the high going into the end of 2023. I still believe and I said that it would happen but within the first eight months of this year, so I don’t know if we
Anthony Scaramucci 29:23
end the year then we end the year higher or lower than the start of the year.
Speaker 1 29:28
I think we ended the year lower than the start of the year. Interesting. Okay, so I’m more I’m more in the JP Morgan category. I think they’re the most bearish on a prediction. I think we ended a year lower.
Anthony Scaramucci 29:37
So there you go. So Carl, that’s a disclosure though. I
Speaker 1 29:40
have a bunch of s&p putts. So I’m shopping my book, but that’s my view,
Anthony Scaramucci 29:45
essentially, because it’s against the 125 year stock almanac analysis of presidential years. And so but a big shout out 91
Speaker 1 29:58
indictments you know So just kind of throwing it all out
Anthony Scaramucci 30:01
there, out there, you know, 491 counts for big. And I
Speaker 1 30:06
also think it’s, you know, it’s interesting, we have the pandemic behind us, right. So it’s hard to, it’s hard to keep that into focus that that was 100 year event. And when you have 100 year events, right, that that ends up distorting, distorting all the other factors. The whole reason why the world is not behaving and economy in the market aren’t behaving is because of the injection of 5 million or 5 trillion of stimulus or like you can’t even know that seems like it’s in the rearview mirror. It’s right alongside us right now
Anthony Scaramucci 30:30
affecting people save a lot of people put it in their savings accounts,
Speaker 1 30:33
right, which is hard for most people to believe, like, How could there still be 500 billion left in the accounts? I was like, Oh, well, there is.
Anthony Scaramucci 30:39
Let’s go to the next one. Yeah. How would How much do our US proxy wars contribute to inflation? World inflation Esteban from New Mexico? That’s
Speaker 1 30:53
a great question. First, I don’t have a very brilliant answer to that. I wouldn’t. I don’t think I don’t think it’s as significant but
Anthony Scaramucci 31:00
Higgins is like a typical politician that somebody’s passing the buck to me, hoping that I flubbed The question then you can come in with his exactly ever your date brilliance. I think the proxy wars contribute a lot to the inflation, frankly, because when you are having proxy wars, you are expanding your military and you’re printing more dollars, and let’s just face it, US is monetizing its debt through inflation. It’s also printing dollars, it’s being bought by the Fed, that we’re the Fed is carrying a lot of our own debt on its balance sheet. And so that is coming from all of these outside entanglements among everything else. World inflation, what do we have you take the world inflation?
Speaker 1 31:44
Oh, how does it How does it contribute to our definitely contributes to world inflation from food prices? I mean, oil hasn’t showed up to the fullest extent, but no, it definitely contributes. I think Ukraine is the mother of all proxy wars, though, right? I mean, you know, do I think generically, intervention and other places contributes to inflation? to the same extent, no, but But Ukraine is an entirely different animal. So
Anthony Scaramucci 32:05
hurt the energy markets hurt the supply chain in Europe, it put Germany into a recession. You know, I mean, the Russians are saying they’re growing the economy, that’s after it imploded. So if you go if you go down 30 And then you go up five, I don’t know you haven’t a great economy. It doesn’t seem like they’re having a great economy. No one is winning, when there’s a war. Alright, let’s take another question. What happens to the mining stocks this year? Or the having a Bitcoin?
Speaker 1 32:36
That’s interesting. What do you think that’s more your area?
Anthony Scaramucci 32:40
This is Diana from California. So I think the mining stocks are going up, Diane, I think what ends up happening is, as they mined Bitcoin, and the program of Bitcoin cuts the issuance of Bitcoin and just for people that don’t know what I’m talking about the Bitcoin network is spitting out 900 coins a day, sometime mid to late April, it will get cut in half, there’s a four year having cycle, and it’ll get cut in half when they reach a certain block issuance, and they’ll go from 900 to 450 a day. And so some people think that’s going to hurt the mining stocks because it’s going to be harder to mine Bitcoin but I don’t think it hurts the mining stocks is going to push the price up, you have two things pushing the price of Bitcoin up the ETFs, which have now been sanctioned by the SEC. We have our friend Larry Fink working for Bitcoin right now. I say that somewhat facetiously, but he’s got over $2 billion in the AI bit ETF. And so no one’s asking me, but I’ll say it anyway, I think we go through the all time high of Bitcoin, which is 69,000 plus, by the end of the year, if not more than that, and that’ll be very good for the mining stocks. What say you, Mr. Blockchain?
Speaker 1 33:55
I completely agree with you. I think what’s amazing about Bitcoin is that it’s, it’s crossed over into an institutionalized asset that isn’t going anywhere for the foreseeable future, which is interesting on a number of fronts, because if you believe that we’ve crossed over into adoption, that it’s here to stay, it’s institutionalized as part of society. Now you can zero in on the deflationary aspect of of Bitcoin, and that gives you some insurance of the direction it’s going to so actually Bitcoin now, I regret it because I’m stupidly lost faith in it after being so early, I’ve used the mind Bitcoin in 2013. And then I lost faith. And I’ve done a 180 again on it, but because of that, because of the nature of it, because there’s only going to be 21 million of them, because of the fact that you know, it’s crossed over. You can play that and a lot of weight with a degree of confidence if you believe it, and I happen to believe it. So Anthony, I don’t know if you follow a bio but I love bio, I’m always I’m always at any one moment. I’m always selling puts on bio and selling calls 10% of the money when Bitcoin goes up. Then I pull up the puts. The reason why puts as Anthony said before can be very dangerous is because a black swan event, that thing could drop. But if you believe that Bitcoin has this inevitable, you know growth, which I do, then you can be a little more confident on puts because then you could chase it down knowing that it will recover. So anyway, that’s how I relate to Vic I don’t own any bitcoin I just I just play Bitcoin constantly would just
Anthony Scaramucci 35:22
be long term and don’t look at it day to day. That’s what I would say. Let’s take another question. Use debt to make investments in the crypto space. Recent events cause liquidation and now I’m upside down impossible to meet debt service taking personal notes on credit worthiness. And so you want to take that one year the crisis manager here? Yeah, I
Speaker 1 35:45
mean, first of all, I’m really sorry, Mark. I mean, we all may very well, they all those who were involved made some terrible cringe worthy decisions. I’ve personally made some terrible decisions so that I’m shocked by them, whether it buying NF T’s that were ridiculous, like there was a degree where we I think all lost our our judgment, I would say to you, number one, it takes time to rebuild your credit and just slow and steady, the most important thing you need to protect to protect his your self esteem, and your worth. But what happens is, I think actually, the greatest destruction of somebody is made decisions like you did you start feeling you lose your confidence in yourself. And so I’m sharing with you that without going into specifics, that I made a range of terrible decisions like you did, but using using debt. So number one, don’t ever do that, again, you always want to manage your debt capacity. And honestly, as somebody who’s rebuilt their credit multiple times in my life, especially when I was younger, eventually you will, you will turn it around, and then three, every cry from every crisis, bursts and opportunity even greater than that which was taken from you. So what do I mean by that is, for example, I’m about to launch a company in two months, and the it’s a blockchain native cybersecurity company. And if I had never made terrible decisions in crypto, I would never have understood the need for a cybersecurity company that goes way beyond audits. And that’s what I’m working on. Right? You and your bad decisions, using too much debt and whatnot. Like you’ve probably learned something that’s very valuable. So don’t walk away from it figure out what what did I learn here that I can profit from in the future? And that’s how I approach every crisis and every time I emerge with something even greater than that, which was taken from me
Anthony Scaramucci 37:27
All right, I mean, it’s well said, we either win or learn Yeah, but a lot of we either win or learn. Amen. And is a really good statement. All right, let’s see there’s any more questions since the economy numbers looks so healthy? Why would the Fed cut rates and
Speaker 1 37:44
I think it’s to what Anthony said they would cut rates because they’re seeing other other other signals that show that we are out there on the other side and they don’t want to behind they want to be ahead if they there’s an argument to be said if you wait obviously for you know, all the signals to be right in front of you, it’s too late. So that’s why they would I’m not convinced that that is actually the case though. I think that unemployment was a key mover that you wanted to see move and it didn’t and so I don’t know where all this conjecture comes from that though we’re gonna get five rate cuts this year, but you’re asking exactly the right question and the only reason I would is because they have a belief that they’ve already achieved their goals are well on their way to achieving their goals. All right,
Anthony Scaramucci 38:23
so I mean, it’s another great answer. We were we’re I’m watching the time go by here we’re going to we’re gonna you know, we’re gonna draw to a close in a second but before we do I want to talk about the book burn the boats and I want to talk about the mantra of boat burning. We have one quick what happens I think we got that one already. So let’s keep going but talking about burn the boats just phenomenal concept. What is burned the boats mean by the way, obviously, I know because I give the quick history we burn the boats means and tell them why you are both Broner.
Speaker 1 39:03
Okay, all right. youngins I should a little bit of history lesson. So as I mentioned before, every society has this phrase, but all the way going back to 500 BC. The Art of War. This idea this phrase burn the boat shows up in different languages and so burn the banana boats literally means eliminating any means of retreat. I actually, this phrase can be a little bit jingoistic, and often used in a very bombastic way, like burn the boats, and I don’t care what anyone thinks, you know, you know, I felt like I was the one to write this book, because as you’ll see, if you read it, I talk openly about the shame I had from growing up poor and all this baggage that I would carry anxiety imposter syndrome. The first time I was on Shark Tank, feeling out of my depth. I wanted to write a book for those people for whom risk does not come naturally. And I think a lot of people self select out of ambition because they labeled themselves I’m not a risk taker. And reality is we’re all risk wanders, and so we don’t don’t know how to reframe our relationship with risk, burn the boats is an attempt to appropriate this phrase on behalf of the angst laden and the anxiety ridden, to teach you how to change your relationship with risk so that you can fully commit. I don’t know, why is that so important? Studies show sign shows talked about in the book, merely contemplating a Plan B, while you’re pursuing Plan A, the energy leakage from thinking about there’s another way, is the very reason why you end up needing a backup plan. It’s such an insidious thought, but so counterintuitive, what you need to do is process the worst case scenario before you undertake a big goal. Number two, decide what would I do if it were to happen? We all have hardwired into our primitive factory settings and backup plan, what’s the likelihood that the worst thing is going to happen? Very low? And three, what for? Rather, what pain would you endure to achieve your goal? When you lay it all out like that before you take on something hard, then you move in one direction, you burn the boats and you’re not afraid, because you know that you’ve taken care of the details. Most People Fail to litigate the risk before they do something scary. And then they’re always looking over their shoulder and looking over the shoulder. So in my book, I share like 50 different case studies from people of all walks of life. Rex Ryan, Scarlett Johansson, an amazing paraplegic in Canada, all of whom had to burn some kind of boat before they can achieve the impossible.
Anthony Scaramucci 41:16
Or listen, it’s a phenomenal book. I think it’s it’s got to be one of the best entrepreneurial books I’ve ever read. Certainly the best of 2020 Did
Speaker 1 41:24
I tell you about my tattoo really quick? Which I wish I don’t have a luna tattoo. I wish I could i No, no, I was only I was a week away from getting that and it says it looks like a like a whole gang sleeve but it’s down my right arm and it’s a poku Tenjo which is burned the boats effectively in Chinese. So that’s my tattoo. All
Anthony Scaramucci 41:45
right, well, you know when when you are Sports Illustrated bathing suit model because they are switching up and adding a lot of diversity to that. I’ll make sure I get a picture of that. I’ll be trying to make sure I get the negative so I can burn the negative
Speaker 1 41:59
but either way, you just turned 60 I’m 49 who ran into each other at 6am at the gym in Dubai without even knowing where the Abu Dhabi without even a
Anthony Scaramucci 42:06
four seasons we were hustling who had also yet to stay. Gotta stay in the gym. You know that and I know that. Ladies and gentlemen, Matt Higgins a brilliant entrepreneur, a shark on Shark Tank, but also an incredible person and inspirational person. Next week we have the legendary economist Lynne Alden, that wrote writes about our broken money system and I’m a huge fan of hers and she’s obviously a big corner. And more exciting lives. The conversation. Can’t wait. We’ll get to a thank you Mark. You hang in there, man. All right, my friend. You’ll figure it out. My brother we all do. You will figure it out. Just hang in there. All right, Matthew. Thank you. And I’m gonna root for your Detroit Lions. Now that you brought that up. You can go that fast and see what happens this weekend. Great weekend, everybody. Alright, take care out until next week.