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Kevin O'Leary Reveals His Next Big Bet — Transcript

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0:00They cannot be leaders in that.
0:03>> Name a stock that you got slaughtered on
0:0420 years ago and name one that maybe you
0:06got slaughtered on recently.
0:08>> That's a good question. [laughter]
0:11Everybody in my office said, "What the
0:13are you doing?" I'm getting emotional
0:15about remembering this thing. He said,
0:16"Kevin, we've been worried about this
0:18trade for 2 years. I'm in three and a
0:20half because you don't get Mr. Wonderful
0:23for free. That whole sector is going to
0:26get crushed, including Bitcoin." So now
0:28we have over $200 million worth of
0:32cards.
0:34>> Kevin, thanks for being here.
0:35>> Great to be here.
0:36>> Really appreciate it. Kind of want to
0:38get into it. Um, I know you invest in a
0:40lot of private companies. I want to talk
0:42about your public companies and the type
0:44of different industries you look for in
0:46that world.
0:47>> Yeah. So I start with a basic um
0:50investment premise on the public side.
0:52We we have a lot of positions, but
0:56there's there's a discipline I learned a
0:58long time ago the hard way, and it's the
1:01discipline of diversification.
1:03When you're a uh an investor in stocks,
1:06you get emotionally involved. There's no
1:08way to stop it. You you start to do your
1:10research, you fall in love with a
1:11company, maybe you like the CEO, maybe
1:12you like the story, maybe you like the
1:14sector, and you go nuts. You keep buying
1:18the dips. You keep going, going, going.
1:20The problem with this is if you look
1:23historically
1:24at what happens even to the greatest
1:26names, there are massive corrections on
1:29sectoral transitions and you don't know
1:31where in the time cycle you're involved.
1:33So here's the here's the rule. No more
1:36than 5% in anyone's stock, no more than
1:3920% in anyone's sector. So you have
1:42sectoral discipline. So right now people
1:44are loving the mag 7 or they're not
1:45loving the mag 7 whatever it is. But in
1:48this rule, Nvidia is never more than 5%
1:51of your portfolio and all of tech, all
1:54of it is no more than 20%. And it forces
1:57you to basically go out there and find
2:00other sectors that may be out of favor.
2:03However, they come rolling back in and
2:05you can never time when that happens.
2:06And so my returns are based on this
2:09concept of diversification.
2:12Although if you looked at what I was
2:13doing 20 years ago, I wasn't, you know,
2:16applying those rules. and I got
2:18slaughtered.
2:18>> Name a stock that you got slaughtered on
2:2020 years ago and name one that maybe you
2:22got slaughtered on recently.
2:25>> That's a good question. Um, I'm have to
2:28go back 20 years.
2:30I'll tell you what it was. I shorted
2:33Yahoo.
2:35I got slaughtered. It got added to the
2:38S&P 500 and I let the position.
2:42The amazing thing about that position,
2:43I'll never forget it. It was with Bear
2:45Sterns. Remember Bear Sterns? They kept
2:48calling me on margin calls and every
2:54four hours cuz I was losing three 4
2:57million an hour as the if you if you
3:00remember that stock, it went from like
3:01eight bucks to $280. It was crazy.
3:05And I kept piling in assets to protect
3:09the margin call. I didn't want to get
3:11called out, but it basically took my net
3:14worth down almost by I can't remember.
3:17It was a huge percentage, 40 50%.
3:20Then one day I was golfing at a golf
3:22course called Brayburn in in uh outside
3:27of Boston. I'm still a member there. And
3:32I remember my broker who I'm who was at
3:34Bear Sterns at that time and was a good
3:37friend of mine called me and said,
3:38"Kevin, I was on the eighth hole. I'll
3:42never forget this." He said, "Yahoo's
3:45collapsing right now. It's collapsing.
3:48It's gapping down 20%."
3:50And I had been in this thing for years.
3:54And he said, "Let me cover."
3:58I said, "Fuck it, Mike. we're going to
3:59hang in right to the end. And that stock
4:01went all, excuse my language, but I'm
4:03I'm getting emotional about remembering
4:05this thing. He said, "Kevin, please, the
4:07back office is begging me to clear this
4:09trade. We've been we've been worried
4:10about this trade for two years."
4:13>> I said, "Mike, now's not the time. If
4:16it's gapping down, we got to wait it
4:18out." So, it was both my worst call and
4:22my best call all at once, but I never
4:25ever ever
4:27shorted a stock again.
4:29>> It's funny. I've never shorted a stock
4:31scared of it
4:32>> because it's an unlimited downside.
4:34>> Exactly.
4:34>> But I'll never forget the emotion I had,
4:38the gut-wrenching watching my net worth
4:41getting slaughtered and then it came all
4:42back years later. The point is, you
4:45don't have to do that to yourself. You
4:47don't have to do that to yourself with
4:49the diversa divers diversification
4:52strategy I'm I'm using now that never
4:55happens.
4:57>> Okay. So, you know, we watch you on your
4:59show and we see you investing CEOs and
5:03the companies and the products. What are
5:04three or four things that you look for
5:06when you are about to make a trade in a
5:09publicly traded company?
5:12I've come to realize
5:15leadership matters in a name. You need a
5:19rockstar CEO.
5:22You really do. You need someone
5:26who has the guts to pivot particularly
5:29on tech names that is able to negotiate
5:32the ups and downs and the craziness it's
5:34occurring. I mean, the returns have been
5:36spectacular through this AI cycle, and
5:38we've all benefited from it one way or
5:40another. Just only own only the index,
5:43you benefited from it. You own so much
5:44of it. But
5:47if you look at the CEOs managing these
5:50companies, they're all stellar
5:52performers over long periods of time,
5:54and I'm talking four years or more. The
5:56average lifetime of a CEO is now short.
6:00They get whacked all the time. And so
6:02for me on a public stock is who's
6:06who is actually leading the charge and
6:11why should they be the person men or
6:13woman doesn't matter. [snorts] I'm a
6:15very fortunate guy. I get to meet these
6:17people. So before I take a position
6:20um or in other words add because a lot
6:24of what I hold right now is in indexes
6:27and so but if I'm going to overweight a
6:29name get it right up to 5%. I got to go
6:32and buy the name and then I'm balancing
6:34and I mark to market at 405 every day. I
6:37have a dashboard that says what worked
6:39what didn't you know what's moving what
6:42isn't. And the the the other thing to do
6:46is when if let's say you want to buy a
6:48name and you want to take it up to 3% of
6:49your portfolio,
6:51buy 50 basis points. Get a feel for how
6:54it trades. Start, you know, the the
6:56great thing about putting a dashboard in
6:58any of the services will give you this.
7:01Put the put the you know that name on
7:04the watch list and read all the press
7:06releases. Read all the press releases.
7:08You'll start to get a tonality of how
7:10the company's being run.
7:12And you also get a pretty good idea that
7:17it it's in a trading range. Maybe you
7:21want to trade it. Maybe it's in a 7%
7:24trading range. I don't kind of do that.
7:26I'm looking to get in a name and have it
7:28break out and get me, you know, a 20%
7:32plus return. That's what I want. So, I'm
7:33I'm willing to wait, but what I don't
7:36use is leverage. And that's another
7:39thing. So, I've been been through that
7:41before too as well myself. So, is it
7:44usually a 20% exit for you on these type
7:47of
7:47>> It's Well, the
7:50Well, you're getting into some good
7:51rules here because I'll tell you what my
7:53exit is.
7:56I need a 17% return minimum. That's my
7:58hurdle. Okay. So, I'm going to take more
8:02than half off the table when I hit the
8:0317. But if I'm liking what I see and I
8:07haven't breached the 5%, I'm going to
8:09ride the pony and get the extra 300
8:12basis points. I jump sometimes get more.
8:14You never know. But pigs get
8:16slaughtered. You have to decide if I get
8:19to 25% I'm out. I'm go. I'm done. I'm
8:23done. I'm done. And the, you know, I
8:26tell you in Tesla, which it was a hell
8:28of a story, you know, Tesla for me in
8:30recent times, here's how it went down.
8:32I'm sitting at the table with my son who
8:34just got an internship there out of
8:37engineering school, electrical engineer,
8:39and I'm and you know, he says, "Dad, why
8:41don't you buy some Tesla stock cuz I'm
8:43going to go work there." And I said,
8:44"Are you out of your mind? It's a car
8:46company trading at 140x like for you
8:49know 140 times sales." He said, "It's
8:51not a car company. It's a data company.
8:54It gathers data from these electric
8:56cars." So Trevor convinced me to take a
8:59position. And then I think I bought in
9:01that in that particular portfolio maybe
9:05and this was back before the splits
9:07maybe I put on
9:09150 basis coins 100 one and a half% of
9:11the portfolio
9:13I never added to the position again I
9:16had to keep cutting it back to 5% of the
9:18portfolio my cost base within 18 months
9:21was zero and I kept riding that pony
9:25even to this day I have a zero cost base
9:28in my Tesla stock. It's volatile as
9:31hell, but
9:33I've taken so much off the table.
9:37And everybody says to me, "Why wouldn't
9:39you've just never taken anything off?"
9:41Cuz that's not how I ride. That's not
9:44how I ride. I I sleep every night like a
9:46baby.
9:49>> What looks attractive right now, but
9:51still isn't really cheap enough for you
9:53to buy.
9:56I'm I'm for the next 36 month going on
9:59investment theme called energy.
10:03That's it. And I'll tell you why. Um I'm
10:05a picks and shovels guy. A lot of guys
10:07want me to take on more waiting into AI
10:09names. They're all over the place. I
10:12mean, I know Anthropic is going to go
10:14public. It's going to be a monster
10:15beast. But I didn't take down any
10:17SpaceX. I didn't take any down because I
10:20remember when they were allocating, they
10:22said to me, "You you can't sell this for
10:2390 days." I said, "What? What? What rule
10:26is that?" Like, "I'm not in I'm not in a
10:29hold period. I'm going to buy the stock
10:30in the IPO." I'm not sure that was a
10:32real rule, but the brokage houses are
10:34trying to squeeze guys not to to sell
10:36into it. So, I didn't take any. And of
10:38course, the stock traded down. It's back
10:39up to 147 or something, I think, right
10:41now. But anthropic is going to be the
10:46same kind of story. And I'm probably
10:48going to take some of that down. But
10:51here's how you play the picks and
10:52shovels.
10:54You buy energy stocks, you buy
10:56everything to do with making electricity
10:58from nat gas or turbines to turn it into
11:00electricity. Or my new theme right now
11:03is uranium. And I'm I'm I watched the
11:06deal announced uh last night with
11:08Google, $3 billion into Finland just to
11:11buy a power contract from the utility
11:13there. That's all power. Nothing to do
11:15with AI. They haven't built anything
11:16there. There's no data center. They're
11:18just trying to acquire long-term leases
11:21on power. So,
11:24you know, that's why I'm investing in in
11:26Finland and Norway. Those guys have sub6
11:29cents a kilowatt hour.
11:30>> In regards to uranium, Canada has a lot
11:33of uranium.
11:34>> No, they have all the uranium unless you
11:36want to buy it from countries you can't
11:39pronounce the name of that are owned by
11:40China.
11:42>> So, where is shouldn't can where is
11:46Canada screwing up here in regards to
11:47uranium?
11:48>> What are they doing right? What are they
11:49doing wrong? Well, the problem with
11:52Canada for the commodities and the
11:54energy story has been the last decade.
11:57Um, Canada used to get on a pr-rated
12:01basis for allocation to sovereign wealth
12:03on indexing. It's 2.3 to 2.5 of the
12:06world GDP or was. And so if you're
12:10Norway and you're throwing out an
12:11allocation, you're going to buy the TSX,
12:15like the index of Canada, 2.3% of the
12:19entire portfolio. You're just going to
12:20own Canada, own it in the Canadian
12:21dollar. That's what they used to do. And
12:24then this guy came along um who's
12:27bouncing around off the walls these
12:28days. His name is Justin Trudeau. And he
12:32was very successful politician, but he
12:36had no executional skills. He had no
12:38concept of uh pretty well anything. And
12:42so I don't want to be disrespectful. He
12:44was a prime minister very successfully.
12:46There's nobody in history that stayed in
12:48power that long with no executional
12:50skills. So at in the second four years,
12:52the second term, sovereign wealth
12:55quietly turned off the spigot. They
12:56stopped investing
12:58um in Canada completely. Canadian dollar
13:01collapsed. It was at party when he came
13:03in or close to it and then it collapsed
13:04down 40% or something.
13:07But the real problem with him was he had
13:09this green utopian vision for a country
13:12that basically grew up on its energy and
13:15its commodities. He stopped issuing
13:18permits for anything. So if you were in
13:20the process of opening a uranium mine,
13:24you didn't get to open it. Even though
13:25you spent hundreds of millions of
13:26dollars on engineering or a pipeline,
13:29you didn't get to make it. Or um
13:32precious metals or uh hydro, everything
13:35got shut down. It was it was insane what
13:38happened. And so Canada fell behind in
13:43the production of everything basically.
13:45And even though the Germans came over to
13:47buy their net gas, um his his his
13:51nickname, and I don't mean it to be
13:52disrespectful, is Idiot King. And so
13:55I've said that many times, and I worked,
13:56just so you know, extremely hard towards
13:59the end of his reign to get him out. I
14:02was very, very vocal. took a huge amount
14:04of criticism, but it was important that
14:07he find a new career. He was destroying
14:09every investor's uh assets. He was
14:12killing the Canadian economy. And I was
14:16not the only one. There were others, but
14:18I was extremely vocal on global networks
14:20saying we got to get rid of this guy.
14:22And I bring all this up because in a way
14:28what I've done, and you may be very
14:30surprised, the trade war started with
14:32Canada January 1st of this year. That
14:35was the first snipping between the new
14:38guy Carney and Trump.
14:42We decided to take the contrarian view.
14:46We basically bought
14:50a 10% waiting in the Canadian economy.
14:53We used the uh ETF called XIU, just 60
14:57big companies. We didn't know. And we
15:00bought it in USD. So we converted
15:04I can't remember how much it was into
15:07Canadian dollars and bought on the
15:08Canadian exchange, the XIU. And
15:11everybody in my office said, "What the
15:13are you doing?" like they're going to a
15:15trade war. I said, "Guys,
15:18the idiot king is gone. This new guy
15:21knows what he's doing. He's got every
15:23commodity on Earth. Everybody's going to
15:26need potach, aluminum, water,
15:30electricity, uranium. Let's take a
15:33shot." Remember, these guys are getting
15:36compensated on returns. So, they said,
15:40I said, "Why don't we just watch it
15:41month by month?" As of last night, you
15:43ready for this? You wished you'd made
15:46that trade. It's beat the S&P 500 by 158
15:50basis points. Like, think about that.
15:53Nobody even knows that. Nobody even
15:55thought about that. I'm so happy I'm
15:57long Canada. I'm staying long. I don't
15:59care how long they're pissing at each
16:00other. This is going to get resolved.
16:02This is crazy because if you want
16:04uranium, there's only one place,
16:06Saskatchewan. You want potach? Yep.
16:08Saskatchewan. You want the lowest cost
16:10energy in North America? That's Alberta.
16:12And so how do you own it? Own that. You
16:14own the Canadian dollar cuz that's what
16:16I own now. I converted back then and I
16:18own an index. Now, will I start figuring
16:21out which stocks? Yes. But right now,
16:23we're we're just congratulating
16:25ourselves for having the balls to do
16:27this.
16:28>> Absolutely.
16:29>> Yeah. It's I mean so my point is when
16:31there's blood in the streets in a sector
16:33when there's chaos in the air and people
16:35are saying it's going to zero you invest
16:39you you hold your nose even though
16:42you're you're thinking to yourself why
16:44am I doing this and you sit tight that's
16:48how it work I want to kind of go back is
16:50IPOs you mentioned SpaceX you mentioned
16:53anthropic which apparently sold me about
16:55$2 trillion valuation Um,
16:59I've been through IPOs for a very long
17:02time. There's one IPO that did me well
17:04was Twilio. Every other IPO feels like
17:07it fell pretty hard until after that
17:10first earnings. And that's where I
17:12position myself. How about you? Where do
17:14you When do you get into these IPOs?
17:16>> I don't buy IPOs. I wait. I wait. I I
17:19generally wait till the second hold
17:21period is done. Um,
17:24you're right. about 80% of the time they
17:27trade down 10 15 20%.
17:31However, you know, I remember uh I was
17:33an investor privately in circle and that
17:36had a huge run out of the gate. You
17:39know, it came at 46 or something and
17:41went to 208 or something. So, you know,
17:43we took some off the table, but I'm I'm
17:47a believer in in in digitizing. I mean,
17:49the thing is again, it's an allocation
17:52thing.
17:54I I think if I'm giving advice to
17:56somebody, don't try and pick IPOs.
17:59You're not going to win. You know,
18:01you're just sit tight, watch the stock.
18:04But I am a believer in
18:07you. You can get a C. Let's say you're
18:09going to put to work, I don't know, you
18:11know, $100,000.
18:14Buy an index S&P 500, you know, spy, and
18:19then add waitings to the names you like.
18:23Your baseline is there, but if you're
18:25hot to trot on anthropic, let it trade.
18:27Let it trade for 90 days. Buy some
18:30stock, sit on it. It's going to be in
18:32the index anyways, but you want to add a
18:34little juice to it. That's the whole
18:36point remembering because it's so easy
18:38to do this now. Any tool can do this for
18:40you. Mark to market your portfolio at
18:43405. It's a routine. Here's how it works
18:45for me. Montrache 405. Glass of really
18:49good mantrachet. I like good wine.
18:52I sit down. I want to see everything in
18:56front of me. I want to see what happened
18:58today. I want to see went up, what went
19:00down, what went over 5%.
19:04I mean, it's a routine I've been doing
19:06for decades. And it's not a trader's
19:12mentality. It's managing. No one's going
19:15to manage your net worth like you are.
19:19It's great to have somebody doing it for
19:21you, but they're not going to do this.
19:24I showed my son how to do it. I showed
19:26my daughter how to do it. You're going
19:28to do it your whole life. You're going
19:29to look at what in my universe has
19:32changed so much that it it's it's waving
19:35a red flag at me either to the up or
19:37downside. And why? Click on the name.
19:40Click on the ticker. Look at the top
19:42feeds on the news. What happened? You
19:45It's not It's going to take you 20
19:46minutes. It's the most important 20
19:49minutes of your day. And it's going to
19:51protect your net worth and it's going to
19:52teach you about the eb and flow of the
19:55most important thing in your life, the
19:56capital markets. That's how you're going
19:58to retire.
19:58>> Why don't you invest earlier
20:01dur while they're private before they go
20:04public? For example, SpaceX or Ander.
20:08>> Yeah. Well, this may sound arrogant um
20:11but most people approach me
20:15uh and say, "Look, we'd love to have you
20:18on our cap table. Um we have a round.
20:22It's a B round. Whatever." Um,
20:26>> still pretty early.
20:28>> Yeah, it's still pretty Well, it's okay.
20:29It can be a C round, too. It's always
20:30the same story. Listen, put a few
20:32million bucks into this. We're going
20:33public in 90 days or whatever, and we'd
20:35love to see your name associated with
20:37the stock.
20:39My most valuable asset is my name and my
20:41reputation. I mean, that ain't cheap.
20:45Every once in a while, I'll get involved
20:47with a name, but you know what I say to
20:49them? And this I'm just telling you how
20:51it is, and I don't do it any other way.
20:54If you want me to back this story,
20:57I have to eat the cooking. I have to
21:02own the founder shares. That's your
21:04shares. That's two and a half% of the
21:08company's float in my jeans for a penny.
21:11You can tie it up till the cows come
21:13home
21:14and I'll be right beside you. But the
21:17only reason I would do that is I believe
21:19in your story and I would protect the
21:22story and I'd have to believe that you
21:24can execute. And most of the time when I
21:27do the background check or we look at
21:29the story or because I don't want to be
21:32associated with I don't sell my name.
21:35I'm not a [ __ ] I don't do that. But I
21:38love entrepreneurs and when I find a
21:40winner
21:42and I love the story,
21:46you know, I do this sometimes and I've
21:49done it with companies like MindMed,
21:51which was so controversial.
21:54I love the guy running it. I just what
21:58balls. How what guts to say I think
22:03psychedelic drugs are medicine. I loved
22:06him and I said,"I love this story. I
22:10believe in it. I think it can help ADD.
22:12It can help alcoholism. It can it can
22:14help a lot of people and I like that
22:16theme, but I got to own a big chunk of
22:18the company." So, I not only did I get
22:20my seed stock, I bought more and that
22:23was a huge win for me and I loved what
22:25it created. There's two big companies in
22:26the space. They're going into phase two
22:28trials. That's what I'm talking about.
22:31You've been in that company for a while
22:32because I remember after the weed stock
22:34thing in Canada, my men was next up. You
22:37you've been involved in that company.
22:38>> Yeah, but I the weed is not for me. And
22:40I'll tell you why.
22:41>> No, I'm saying after
22:42>> No, no, but I the reason I never did
22:43weed and I got all those weed guys in
22:45the Canadian market saying, "Let's do a
22:47deal with you." I said, "Guys, it's a
22:49schedule two narcotic." Like, it's not
22:51off the chart. It's still a narcotic.
22:53You've got to convince the federal
22:55government, the United States, the
22:56president himself to take it off that
22:58list. these these psychedelics are not
23:00in that space. They're being developed
23:02as medicines. These are not recreational
23:06drugs. I I don't want to be involved in
23:08recreational drugs. Like like that's I
23:11want to be involved in medicines. And so
23:13that whole thing I remember that whole
23:15thing every day I'd get pounded another
23:18penny stock on weed. Here's another
23:21thing I I never understood. If you're
23:23going to grow weed, why would you grow
23:25it in an arctic climate? Why would you
23:28grow it in Canada? Why wouldn't you go
23:30to the equator and grow it where it now
23:33is grown where you have 24/7 crops? Why
23:36why would you grow it? I always ask
23:38these guys, what the hell would you grow
23:39cannabis in in an Arctic country for?
23:41There's only 60 nights you can sit
23:43outside in Canada. So everything has to
23:45be really expensively grown in
23:46hydroponic labs. It's the stupidest
23:48premise I've ever seen. Of course, it
23:50all went to zero. But I mean, it's
23:54as an investor, you should ask some
23:55basic questions. We're competing with a
23:57commodity. Marijuana is a commodity. It
24:00it's it's just a commodity.
24:03Now, you talk about uranium, that's not
24:05an easy commodity. So, you want to
24:07figure out, you know,
24:10to me the trade is now the energy trade
24:13and right now sitting pretty are the
24:15Nordic countries and Canada.
24:17>> Yeah. Let's talk about Norway. Um, why
24:21has that been in the news and has been
24:24talked about in regards to these data
24:26centers?
24:26>> About 5 years ago, maybe four years ago,
24:28I got approached by a guy with a premise
24:30and he said, "Look,
24:32the future's about energy." I said, "No,
24:34the future's going to be about
24:35technology." He said, "Nope, no, no, no,
24:38no, no. You can't run any tech without
24:41energy." And
24:44>> this is before Chat, JPT, all this
24:45stuff.
24:46>> Yeah. Before any of that. And I thought
24:48to myself, you know, let me think about
24:49that.
24:51And I said, 'What your what's your
24:52investment premise? He said, 'Well,
24:55where's the cheapest electricity in the
24:57world? I said,
24:59where? And so I did my own digging. The
25:02lowest cost per kilowatt hour of
25:04electricity on Earth is Saudi Arabia. 1
25:06cent a kilowatt hour. A little difficult
25:09to get to and you're probably not going
25:12to build a data center there currently
25:13for various reasons. As you you
25:15understand the regions going through
25:17some tension
25:19the second lowest are two jurisdictions
25:22tied actually three Finland Norway and
25:26Alberta Canada. Alberta Canada has 6
25:29trillion cubes of stranded net gas with
25:32no no use for it. So the question is why
25:37not turn that into electricity? It's on
25:41top of the world's largest market, the
25:42United States of America. Now, I know
25:44there's a trade war and all this stuff
25:45going on, but to me, that's all
25:46irrelevant. Ultimately, what's going to
25:49happen is
25:51you've got a country that has everything
25:53that any country would need, and you
25:55have a country below it that is the
25:57largest market on Earth. Right now,
26:00they're they're having a tiff,
26:03but they are going to be kissing cousins
26:05pretty soon because energy security is
26:08the future. And there's an adversary
26:11called China that is going to spend a
26:14lot of their GDP on a lot of things that
26:16you don't like. And my argument is in 20
26:18years if you don't want to speak China,
26:20Chinese, I mean, you better amalgamate
26:24all of these rare metals and energy and
26:26water and paper we talked about earlier
26:27in Canada with the largest market. I'm
26:29not saying take the country over. That
26:30was a dumb idea. But the idea that they
26:33would have an economic union makes a lot
26:34of sense to me. Right now, when it comes
26:36to China, seems like they're racing a
26:39hedge in regards to these data centers,
26:41building them up. Um, seems like America
26:44invents something, China copies it
26:45faster. Have you spent some time in
26:47China? And are you seeing
26:48>> uh I I I've spent a lot of time um
26:51dealing with China. I'm not a fan of the
26:53government. I am of the people. Um since
26:57they joined the the WTO, World Trade
27:00Organization in 2000, they have never
27:03abided by the rules. They have stolen
27:06and cheated and ripped off IP and never
27:09paid uh you can't challenge them in
27:11their courts. They they're happy to sue
27:13American companies here. You remember
27:15the whole tick- tock sticktick? We went
27:16through all that. Um
27:20I suggest uh and my positioning and
27:23where I'm supporting efforts in my own
27:25portfolio of development of energy
27:28that China is our adversary
27:31and um they were 20 years ago. They will
27:35be 20 years from now. AI is going to
27:37matter for warfare and robotics,
27:39medicine, cure for cancers, education.
27:42Uh they cannot be leaders in that. We
27:45have to make sure that we develop enough
27:46energy to stay ahead of them. And that
27:48is the problem we have right now is uh
27:51we're tapped out. They built 400 gawatts
27:53of energy in the last 18 months. We
27:55built zero. And so my thoughts are um we
27:59got a lot of work to do on the grid. I
28:01want to be part of that investing and I
28:03am. But I'm also thinking to myself
28:07um what's the cleanest, cheapest
28:10electricity seven, eight years from now?
28:12Uranium. Because those small modular
28:15reactors are going to be there. Same
28:17thing that's in a submarine now. It's
28:18working. So these are 100 megawatt units
28:22size of this sound stage. Very easy to
28:25put anywhere and um don't require a lot
28:28of water. Pretty quiet. They're not
28:30they're not the crazy Chernobyl 3M
28:33island kind of story anymore. It's
28:35completely different in terms of how the
28:36technology works. But it doesn't work
28:38without uranium pellets. And so you
28:40might as well invest in uranium, you
28:42know. Hey guys, before we finish this
28:44podcast, just want to say we have a
28:45limited time membership right now for
28:47the stock sharks inner circle. All our
28:49free research report, two live lessons a
28:52week, 140 courses. You guys will love
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29:00advantage of this offer. Link is in the
29:03description. Click it and become a
29:04member. For now, let's get back to the
29:06pot. How do we speed it up in the West,
29:08Canada and US included? Um, in regards
29:10to these data centers, we have people
29:12complaining about water. We have people
29:13complaining about electricity. It's all
29:15complaints here. When it comes to the
29:16people and the government obviously
29:17moves a little bit slower. So, how do we
29:20speed this up
29:21>> with facts? The narrative is um changing
29:25quickly. You know, the idea that it uses
29:27copious amounts of water, that was true
29:2925 years ago. Now, it's no different
29:31than a golf course. That's basically it.
29:33So, you know, you might as well get rid
29:35of golf courses in our data centers. The
29:36noise thing is not a problem anymore.
29:39um heat not a problem anymore. The tech
29:43has advanced so much and so there's a
29:45lot of groups that have become very
29:47vocal in spewing misinformation and that
29:50is slowly turning around for one reason.
29:53Most of the counties um that have put
29:56them in including Lowden County the
29:58first in Virginia have noted that their
30:01land taxes have gone down not up. the
30:05cost of living there goes down and
30:06because these data centers have to pay
30:08taxes as soon as their credits are over
30:10they're paying a lot of tax and so um
30:13now all of a sudden rural communities
30:14are saying wait a second we're not
30:16against data centers let's put one over
30:18here let's put one over here most of the
30:20sites have fatal flaws they don't have
30:22enough water not even enough to water a
30:24golf course or they're too close to
30:27people you don't want to put these too
30:28close or the population uh isn't large
30:31enough to support the construction of
30:33the site which is around 3,000 4,000
30:36people and then as much as 1,200 highly
30:39paid engineers to maintain it. So you
30:42need the right place to put it. But
30:44there have been some big wins for Texas
30:48um West Virginia
30:50uh definitely uh Michigan and other
30:53states that are starting to realize the
30:55merits. I think this narrative will will
30:57switch over in the next you know 12
31:00months or so. It's it's slowly changing
31:02now. Speaking about data centers, uh
31:04we've seen a little pivot. There's a few
31:06stocks that me and our members played.
31:09Um Kil infrastructure, white fiber.
31:12There's one you're involved with, Bit
31:14Zero, where we see these Bitcoin miners.
31:16>> Yeah. Transitioning over to data
31:18centers. Um tell us about a little bit
31:20about Bitzero, how you got involved. I
31:22believe the company's based in
31:24Vancouver, but they're doing stuff
31:25overseas.
31:26>> Yeah, their their primary assets are I
31:28mean what I I invested in it privately.
31:30We were talking earlier about the
31:31transition. and it's now listed on
31:32NASDAQ. But, you know, I I went in for
31:35multiple rounds of that company um just
31:38on the premise that it was a power
31:39story. I knew at the time they were
31:42mining Bitcoin for cash flow. Um but
31:44that's not what they are. They're
31:46they're they've been able to acquire
31:48some very long-term attractive power
31:51contracts in Norway and Finland um at
31:54sub 6 cents a kilowatt hour, which is
31:57pretty good. And so they're sitting sort
31:59of in the cat's catb bird's seat. Um
32:03they're agnostic to which hyperscaler
32:05wants to use their land or their power
32:07and they'll they'll probably I don't
32:09know who's next or what they're going to
32:11do. But you know it's it's been the
32:14management seems to understand where the
32:16puck is going so to speak that if you
32:19don't have power you don't have
32:20anything. So they're just focusing on
32:22power, permits, land, and the
32:25relationships that their Norway facility
32:27is with with in a town that wants them
32:30there and they create jobs and and
32:32they're happy and they're building that
32:34site out. Um they'll probably lease it
32:37to I don't know whether it'll be cloud
32:39or whether it'll be AI. Who knows? It
32:42doesn't matter. I mean, for me as a
32:44shareholder, it's just to actually be
32:46the utility almost for them. Um, that
32:49was the premise. I wanted exposure to
32:52the Nordics because if I look around the
32:54world, and I said this earlier, if I'm
32:57in if I want to be in power for the next
32:58three years, which I do, I think I can
33:00get more than a 25% return. I think I
33:03want to be in the Nordics and I want to
33:06be um definitely in Alberta, Canada,
33:10100%. I mean, just for the power story.
33:13I mean, because they're both equivalent.
33:16And I think uh you know there's a really
33:18big conference um starting tomorrow up
33:22in Toronto, Canada where Carney the
33:25prime minister has invited all the CEOs
33:27of the world's sovereign wealth funds to
33:31um look at a book with 160 projects in
33:35it to invest in in Canada. Obviously if
33:39he's willing to do that he's he's going
33:41to fasttrack permitting. That's the
33:43signal that I'm interpreting from that.
33:45>> I think he ran off that, too. He said he
33:47was going to speed it up.
33:48>> Yeah. I mean, he's going to say, "Look,
33:49if you guys want to invest in an
33:50airport, you want to invest in a
33:52turbine, you want to build power, you
33:53want to build a pipeline, and you're
33:55telling me you're going to bring in $5
33:56billion,$20 billion, I'm going to make
33:58sure that we get this done because the
34:00other guy couldn't do it." But that's
34:02how he's going to fix the Canadian
34:03economy and that's how he's going to get
34:05diversification. So, there's all kinds
34:07of projects in that book. and the real
34:10action at that conference. I'm flying
34:11back there tonight because my first
34:13meetings start in the morning. I'm only
34:16interested in in you know for me the
34:18focus is on Alberta and Saskatchewan. So
34:21I'm going to though the both premers are
34:23in town, their teams are in town, their
34:25staff is in town. The thing I've learned
34:27about politicians, the actions with the
34:29staffers, they write the law. Like it
34:33it's you you can know a senator, you can
34:35know a governor, you can know a premier
34:36and that's great, but you want to get
34:38something done with them, you got to
34:39talk to the chief of staff. Got it.
34:41>> That's why I fly to Washington. That's
34:43why I go, you know, to Calgary. That's
34:45why I fly to Saskatoon and all that
34:47stuff. And, you know, I go to these
34:48places, meet the staffers. Well, all the
34:50staffers are coming to me in Toronto.
34:53So, I'm going up there to meet them.
34:55There's a hotel I'm going to be hanging
34:56out at. And, uh, we're going to do a lot
34:58of breakfast.
34:59>> Um, you've talked about Norway. You
35:01know, we've talked about Canada, US, you
35:03spent a lot of time in Dubai, right? And
35:05we we talked about Saudi Arabia a little
35:06bit. Are all the countries right now,
35:09where's the best place to invest?
35:12>> I would say UAE.
35:13>> Why?
35:14>> Um, it's in chaos in terms of people
35:17thinking what's going to happen next
35:18there with all of this stuff around the
35:20war. But they have the most pro um,
35:26you know, just pro business policy I've
35:29ever seen. and they're really really
35:31smart and understanding. For example,
35:33you know, I still have my offices at the
35:35ADGM. They're so advanced in AI tools. I
35:38mean, those guys are really, really
35:41advanced in AI, particularly around
35:43agents. The concept of making an agent,
35:46a human being that can do work for your
35:48business or act for your CEO when
35:51they're asleep or anything like that.
35:53They have amazing production facilities
35:55there in Dubai and Abu Dhabi. um they're
35:59also the center of that entire region.
36:02So if you believe that there'll be peace
36:05at some point, I don't know when, who
36:06knows when it there's nothing closer
36:11than there to any of these of these
36:13other countries. And so I I think what's
36:15going to happen, my thesis, my
36:17investment thesis, and why I'm staying
36:18long, the UAE is that eventually the
36:21cost of maintaining peace in the strait
36:25is going to be borne by the countries
36:27there and Japan, India, and China
36:30because they have the most to lose. And
36:32so if it costs five billion a month,
36:34they'll pay for it. It's like keeping
36:35the Suez Canal open, you know, or the
36:37Panama Canal open. Somebody's got to
36:39pay.
36:40>> What are some of the risks is in
36:41investing over there? the war goes on
36:44forever, you know, which I don't think
36:46will happen because I think, you know,
36:47I'm not I'm not pro-war. I'm against it,
36:49but I don't see it. It's not in the
36:51economic benefits of anybody. Um,
36:55it's also, you know, you got to think
36:57about what percentage of your portfolio
36:59that would be. I would argue that, you
37:01know, you want some geographic
37:03diversification.
37:04Makes a lot of sense. So, why not put 10
37:0915%. You know, Ray Dallio and a lot of
37:12these guys at investors know, I run into
37:15those people in Dubai all the time in
37:16Abu Dhabi. They're all there. These
37:19conferences that they have are packed
37:21with US money managers. They're because
37:23they're watching where the capital's
37:25going. That's what they're doing.
37:27>> You did mention energy. What else other
37:29sectors right now that Wall Street might
37:32be missing out on?
37:36Well,
37:38on a se sectoral diversification, the
37:41consumer trade
37:44has been
37:46flattish
37:48and may
37:50people think, well, you know, it's it's
37:52a it's a counter it's a contrarian buy
37:55because everybody's saying when are we
37:56hitting a recession? consumer's been
37:58quite strong. But in in terms of what
38:00I've been overallocating a little bit,
38:03uh pharma
38:05because I think it benefits from AI in a
38:07big way. We haven't seen yet. Um I'm
38:11really intrigued uh with what's going to
38:13happen there. But the one that I have
38:15not won anything on yet that I think is
38:17going to be a monster winner is
38:19healthcare. We're going to digitize it.
38:21We're going to put AI into that. We're
38:22going to have a a digital record of your
38:25DNA and your health and who you are. Um,
38:28and your whole life is going to be in
38:30the cloud. So, your doctor can
38:32immediately see what's ailing you, you
38:36know, before you're even in the office.
38:38And we're so screwed up in that right
38:41now. When I was shooting Shark Tank last
38:43year in LA, I I my back went out and I I
38:46was in immense pain. And so, I went in
38:48for an MRI and a and a another scan. and
38:51I forgot what it was. I said, "Send this
38:53to my doctor right away who's been
38:55monitoring me for years with this back
38:56thing." And he said, "I can't do that."
38:58I said, "What?" He said, "I can give you
39:01the CD ROMs and you can hand carry them
39:04back." I said, "This is freaking
39:05archaic. This is ridiculous." And you
39:09know, it's because we have all these
39:11crazy privacy laws. I think those things
39:13are going to get worked out with better
39:16encryption. So, I'm I'm bet I'm betting
39:18on that. Um, and the way I think this is
39:22going to play out, because
39:25you know, you're asking me where I'm
39:27actually investing. These are some of
39:28the themes that I've started to do. I
39:31went into a um,
39:34it was only two months ago in next door
39:36to my condo in Miami and for $2,300 in
39:40one hour and 40 minutes did an entire
39:43body scan in an MRI, a highdefinition
39:46MRI. And then for an extra 800 bucks, I
39:51did a further higher scan on where they
39:55found some cysts on some organs, which
39:57you find all the time when you do one of
39:59these body scans. And then I waited 18
40:01minutes for an AI generated report. It
40:04was a gamecher.
40:06It said, "Do you have a sinus
40:08infection?" I said, "No, I don't." It
40:10said, "Yes, you do." I said, "I do not
40:12have a sinus infection." I did have one.
40:16It just hadn't manifested itself yet.
40:18Two days later, boom. I mean, it was
40:21incredible. And so what I said to these
40:24guys, can I come back every six months
40:26and monitor any changes? I'm willing to
40:29sit in that thing for 2,300 bucks. This
40:31is where medicine's going. So that's one
40:33of my investment themes. The other one I
40:35like is I'm really getting intrigued
40:37with quantum computing.
40:39So put your money in Google or are you
40:41looking at a
40:42>> IBM too that had a pretty good IBM
40:45corrected 25%.
40:47That was worth buying.
40:48>> That kind of goes in healthcare as well.
40:50>> Well, it does but you know it it got a
40:51bad rap but if you want if you want to
40:53get indexed with two big public names it
40:56would be Google and IBM but I own those
40:58already. So it's sort of like that 25%
41:01correction for a big name. Like that's
41:04what I'm talking about. If you're
41:06overweight a ticker
41:08over a 5% waiting and you get a 25%
41:12correction, you're going to feel that
41:13right in the gut. That's going to be
41:14booma. And so you want to make like
41:17IBM's a good name, but it's it's nowhere
41:19near 5% in my portfolio.
41:21>> Don't you think we're kind of in a
41:22little AI bubble right now, though?
41:24>> Yeah, I've been listening to that story
41:25now for about 17 months. And you know,
41:28the only way you can control that is do
41:30what I do. Trim it back to 5% in each
41:32name.
41:33you think which sector of the AI will
41:36survive they'll they'll do better than
41:38>> well I don't know which model is going
41:39to win I mean anthropic you know it's
41:41really interesting uh we had a vote
41:44within our operating company all hands
41:46on deck I could have mandated what we're
41:47going to use but I said okay everybody
41:50what tool do you want that will get an
41:51enterprise license in I thought they'd
41:53say open AI but they went with anthropic
41:56and so I've now had to relearn
41:58everything I'd learned on open AI and
42:00I'm now using the the you know the
42:02anthropic tool It's powerful as hell. I
42:04mean, it's I'm now one of the things
42:06about these tools, they're not all the
42:08same. Like I, you know, people that
42:10think, oh, it's just a commodity. It's
42:12not. And so, you know, for the things
42:14that I do and the things that I do with
42:17my private portfolio, 50 companies,
42:20we're we're getting tremendous
42:21efficiencies on customer acquisition
42:23costs using AI and and financial
42:26management of of our of our dashboards,
42:29of our tools, analysis of our income
42:32statements and balance sheets. Really
42:34powerful stuff. And so, you're looking
42:36for that incremental savings, that
42:38incremental margin, and you're getting
42:40it. And so you can pay 129 bucks a
42:43quarter for a fantastic tool and
42:46eliminate a ton of of consulting cost
42:49you used to have to pay.
42:50>> Yeah. But thing with these models like
42:51you know Fable 5 came out was great with
42:54Claude. OpenAI just came out with theirs
42:56which apparently is better now and I had
42:59I had my wife say it's awesome
43:01>> right? So it feels like it's going to
43:03continue to do this go back and forth
43:04with things and
43:06>> but we you know we use them both. I mean
43:08it's not just that there's certain
43:09verticals for example um because of uh
43:14the move from television to streaming
43:16services. This is just a gives you an
43:18idea. If you're a if you're a company
43:20doing 500 million in sales like a lot of
43:23what I invest in are companies 5 to 500
43:25million in sales. They're they're p
43:27they're private but they're cash
43:28flowing. They're making money. Their
43:30biggest problem is customer acquisition
43:32and customer maintenance. So to acquire
43:35a customer cost x thousand bucks or what
43:37depending what industry they're in. They
43:39have to use social media. They have to
43:41buy either television ads, radio ads,
43:44print ads, e even snail mail or Google
43:48search, you know, all that stuff and
43:50they have to make content. And today
43:54when you put content out, you better own
43:56the IP or the algorithm is just going to
43:58take it down and you will have wast
44:00wasted your money. And so making
44:04proprietary backgrounds just see this is
44:06a this is a white psych. There's no risk
44:08when you air this anybody's going to
44:10claim that you use their background.
44:12This is white. By the way, I think I
44:14look fantastic here. But you know, the
44:16whole point is that's smart. But if you
44:19put a background you don't own in and
44:21you do the production and you cut it and
44:23you stick it out on, you know, Instagram
44:25or LinkedIn and it's not and it's not
44:27your IP, it's coming down.
44:30And so, how do you make backgrounds that
44:32you own?
44:34>> You take a picture with a camera of
44:36yours. You prove it's yours. Use you use
44:38AI to modify it to your liking and you
44:41put it as your background and you own
44:43it. It's a very low cost to do that or
44:48you generate it with your license. It's
44:49your IP. And so, all of a sudden, these
44:52companies are using these tools because
44:55they were getting taken down everywhere
44:57at a great cost. And now they're they're
44:59rising back up and saving a ton of money
45:00on something so simple as a background.
45:04Like nobody even thought about that two
45:06years ago, but somebody owns that
45:08picture. When it's scraped on the
45:10algorithm, they're going to know it's
45:11not yours and you're down.
45:13>> Stream about pictures just brought back
45:16the old uh NFTTS uh little run we had a
45:20few years ago and I wanted to kind of
45:22get into uh Bitcoin and crypto. Do you
45:24still have some exposure in those? I do,
45:26but I'll tell you the big debate going
45:27on in crypto right now.
45:30Last October, almost a year ago, um
45:34there was a conference in Florida, Caner
45:36conference, and Atkins spoke there. And
45:38the assumption was, and you didn't say
45:39this, but the assumption was that the
45:41Clarity Act was going to pass, which was
45:44a good and bad news story because what
45:46occurred that was packed with sovereign
45:47wealth funds and so most of the analysts
45:50at the conference said, "Okay, it's time
45:52to allocate one or two% into crypto.
45:54what names.
45:56So they started doing their analysis and
45:57lo and behold they found out they only
45:59need needed two tickers. They needed
46:00Bitcoin and Ethereum to get 97% of the
46:03vault. So everything else collapsed and
46:06then the Clarity Act didn't pass. So
46:08everything stayed in the toilet and
46:10still is there and the only two that
46:13were covered materially were Bitcoin and
46:15Ethereum. So we had 27 positions on. We
46:18got rid of some of them before that
46:20conference and then the rest we got
46:21slaughtered on. But we kept our BTC and
46:23our ETH. There's a new narrative
46:25emerging. Two verticals to think about.
46:28Um narrative one, it's not clear that
46:32Ethereum is going to be the winner
46:34blockchain for all sectors of the
46:36economy. It's not clear anymore um for a
46:39bunch of reasons. Because if you go talk
46:42to real estate or you go talk to tech or
46:45you go talk to uh banking, banking right
46:47now the majority of trades for
46:50transferring the legal stable coins is
46:52on ETH. So that's a good business for
46:54Ethereum. But if you're talking logistic
46:57management and contract law management
46:59for companies that do storage and
47:01trucking and they're not using Ethereum
47:05too slow
47:08>> and Avalanche
47:10>> Avalanche remember hearing that name.
47:13Interesting.
47:13>> So I have a new thesis. I'm trying to
47:17figure out
47:20which of these other chains are going to
47:22end up with use case adoption.
47:26So really big conference next week, the
47:3017th in New York, the Avalanche
47:31conference. It'll be packed with
47:33analysts.
47:35Why? Those guys out of nowhere started
47:39blockchain technology for sports teams
47:42and collectibles, which is a massive
47:45sector. You know, these these teams are
47:47worth billions. Why are they using
47:51Avalanche? Because it turns out
47:52Avalanche can develop your own private
47:56chain easily.
47:59You don't have to use the other guy's
48:00version of Avalanche.
48:02That's an interesting narrative. So, I'm
48:05going to go check that out because John,
48:07the CEO there, is very provocative about
48:10this. He's been like one of those Greek
48:12mythology guys pushing this stone up the
48:14mountain.
48:15not being rewarded for it. But I'm
48:17thinking if this is real,
48:20um there may be something there. And so
48:21I may start putting on new positions
48:23around blockchain. Nothing to do with
48:25the volatility of pricing. This is to do
48:27with how is how are we going to adopt
48:32um blockchain into each of the 11
48:35sectors? Is it one standard? Then you
48:37want to own that one. If it was
48:38Ethereum, you want to own it.
48:40or is each sector going to adopt a
48:43different chain and are they going to
48:46have APIs together? I mean, I don't want
48:48to get too technical here, but to me,
48:50it's time to tiptoe back into the tulips
48:52on betting on some chains, maybe small
48:54positions, 1% holdings. You know, in a
48:56sense, they're public. You can just get
48:57an account and buy the token. The other
48:59theme which is really fascinating me is
49:02quantum computing. I have been talking
49:05to institutions about buying BTC for a
49:07while now. They won't do it until the
49:09Clarity Act passes. But I would guess
49:12I'm guessing it's a personal guess. 10%
49:14are never going to buy it because of
49:16quantum computing breaking the chain,
49:19breaking the encryption. They believe
49:21that that will happen.
49:22>> Satoshi said that in the white paper
49:24originally that was a threat that they
49:26had.
49:26>> Well, they call it Qday. You know,
49:29remember that song Eli's coming. Well,
49:32Qday is coming. And that's going to be
49:34the when when somebody thinks
49:37the first time somebody thinks it's a
49:39quantum breaking an algorithm or
49:42breaking encryption that whole sector is
49:45going to get crushed including Bitcoin
49:47even though it may not really be
49:49happening because I think it could be 5
49:51years away but it's not 100 years away.
49:54So how are we? So the real opportunity
49:56is to find those startup companies in
49:59quantum
50:01computing that are going to adapt it for
50:04security
50:06because if I'm a bank and I can get a
50:09quantum solution that nobody can crack,
50:12I'm going to pay for that.
50:14>> Do you know any company you're working
50:15on?
50:16>> I'm just starting my research and
50:17they're mostly private. But if you want
50:19a ticker, if you said to me, "What
50:21tickers would I buy?" And I'm not
50:22telling people what to buy. I'd buy a
50:24chunk of IBM and that was a big
50:26correction. It came back quite a bit and
50:28then we talked about Google. Those are
50:29the two monsters right now.
50:33>> Is it easier to evaluate a private
50:34company or a public company? You know,
50:36private company, you see the owner,
50:38you're you see the company, public
50:40company, you get everything. And I feel
50:42like with when you're dealing with a
50:43private company, the owner, they could
50:44hide a lot of [ __ ]
50:46>> No, it's the it's the alternative. I I
50:48think you you give me a balance sheet in
50:50income statement in in 15 minutes I'll
50:52tell you whether it's going to zero or
50:53not on a private company they have I
50:56mean the only thing that matters in a
50:57private company is cash flow
50:58>> that's it
50:59>> that's it and so I look at every deal I
51:01look at I look at two things what is the
51:04cost of acquiring a customer what is the
51:06churn rate of those customers and I'm
51:07talking about wireless charging
51:08insecticides what we have so many
51:10different positions I look at the
51:13entrepreneur I meet with them I say how
51:14you acquire a customer what does it cost
51:15to acquire a customer show me your data
51:17on your customer acquisition cost and
51:18show me the last five quarters of
51:20customer attrition. I want to see that
51:23right then I know if they have a stable
51:24business model I'm just pouring gasoline
51:26on most of these companies bring 15%
51:29down to the bottom pre-tax bottom line
51:31cash flow cash flow then the question is
51:34how much debt do they have public
51:36companies screw around with offbalance
51:38sheet debt deals all kinds of counter
51:40financing stuff you know and they're big
51:43generally they're much bigger if I'm
51:46going to bet because the negative is
51:49private companies are illquid so there's
51:51There's a big for me. I I want let's say
51:55the guy's trying to sell me uh the deal
51:58at eight times free cash flow. That's
52:00not a crazy number. Some of them want
52:0211. You know, it depends how fast
52:03they're growing. I know this sounds
52:06outrageous, but I'm in at three and a
52:08half because you don't get Mr. Wonderful
52:10for free.
52:11>> That's it. And I'm going to bring my
52:13team to help you acquire customers. And
52:15I'm going to bring my analysts to help
52:17you figure out how we can get another
52:20seven to 15% free cash flow using some
52:24AI tools, some enterprise tools that we
52:26have. I'm going to bring in my
52:27enterprise licenses around accounting uh
52:30or security. I outsource a lot of this
52:33stuff because I have buying power with
52:34multiple companies. You know, we did
52:36that in the watch insurance industry. Um
52:39I love watches. I'm a big collector.
52:41When you get your watch stolen, most of
52:43the time it's attached to your home
52:44package and all of a sudden the price of
52:46your premium on your house goes up.
52:47That's stupid. Why not just ensure the
52:49watch? No one's stealing your house.
52:51They're going to steal your watch. So,
52:52we partnered with Chub and we built out
52:54uh Wondercare. But that company uses the
52:57benefits of all of my enterprise
53:00platforms. So, you know, that that's a
53:03remarkable company, my one of my fastest
53:05growing because we were able to build a
53:07tech stack that attached to the dealers
53:09POS. So, if you go to 1916, which used
53:12to be Watchbox or Wrist Enthusiasts or
53:16um any of the big the dealers that are
53:19using it now, they just simply say to
53:22you buy your watch new or used, would
53:23you like watch insurance? Just like
53:25Apple Care, you click here. We issue the
53:28policy in 9 seconds. We get all the we
53:31scrape all the data. We're partnered
53:32with Chub. We know what the fraud rates
53:33are in your zip code and everything
53:34else. And boom, you get your Rolex
53:36Daytona. Insured while you're standing
53:38there buying the watch.
53:40>> You started this company yourself with
53:41your team
53:42>> with three partners. Well, listen, I had
53:44I had two collections stolen. I was
53:45pissed off out of my mind and I said,
53:47"This is freaking crazy. I I can do
53:49better. I want to build this for myself,
53:51which is what I did. I built it for
53:53myself." And then other people heard
53:55about it and started using it. Then we
53:56built the tech stack to attach to the
53:58POS, which was one of the partners was a
54:01genius. He said, "Why do I have to wait
54:03to fill out a form on a tablet? Why
54:04don't I just click here and boom, it
54:06just populates the policy and it issues
54:09it right to your phone and you got a
54:10picture of your watch and you got your
54:12policy and the laws in in the US or in
54:14every state. Every 12 months it renews
54:16and our renewal rates are way over 90%."
54:19>> Wonderfy, it was uh the crypto company
54:22that you started up in.
54:23>> It was in Canada. It was bought by uh
54:25Vlad and the guys at Robin Hood. I had
54:28was the largest aggregation of uh you
54:30know crypto trading platforms and I
54:34again did that uh because I thought I
54:36actually thought a Canadian bank would
54:37buy it because I I I really believed
54:39that eventually we would get um the
54:43Genius Act which made
54:45uh digital um you know you could you now
54:49buy USDC for example or Tether. Tether
54:53may have to go through some changes
54:55because it has gold on it, but stable
54:57coins backed by US treasuries are really
55:00interesting because you're getting
55:02yields of over 3%. Um, and I I was able
55:07to just simply, you know, instead of
55:09doing Fed wires, if I want to wire money
55:12to Zurich or something, I just use USDC
55:14now. So I have a you know I in Canada I
55:17had that platform and then I had my
55:19platforms in the US and now they can
55:21trade costfree basically. I I mean
55:24there's so much coming that's so
55:26interesting but you know that they
55:28bought the company it was a good trade
55:30for me. Uh that's an example of a
55:31private company um that eventually went
55:34public and then got acquired by Robin
55:36Hood.
55:36>> Yeah in can when I lived in Canada it
55:38was really difficult to trade uh crypto
55:40even through the banks. I used to use
55:41Shake Bay and I just remember them
55:44making it so difficult just to send
55:45>> Yeah, I I I think Canada with Carney um
55:48I'm I'm I'm be I'm never I didn't vote
55:50for him. I'm I'm actually a
55:51conservative, but I I have a lot of
55:53respect for what he's done and I'm I'm I
55:55don't think in Canada you really have to
55:57think um liberal or conservative
55:59anymore. You just need someone with
56:01executional skills. I mean, it's it's
56:03been so badly managed for so long. It's
56:06on its knees at the bottom of the G20.
56:08It couldn't get worse. And it goes back
56:10to my theory. It's at the bottom. This
56:12is a chance to buy in at the absolute
56:14toilet bowl bottom. And the market
56:18itself is is is telling you that it's
56:19outperforming the S&P.
56:21>> So, you're thinking maybe five years for
56:23a turnaround time in Canada?
56:25>> No, it'll take longer. But I think uh
56:27the trade war will be over long before
56:29then. And and the commodities that I
56:31think are going to benefit will be pot,
56:33will be aluminum, will be uranium, will
56:35be um some of the precious metals.
56:38Certainly gold has benefited it. Uh
56:40there's been and water forever.
56:42Electricity is being sold into the US.
56:44They're never going to this trade war is
56:46going to be over. It's it's it makes no
56:48economic sense whatsoever.
56:50>> Got one last question. Lakers just sold
56:52for within a year for a $2.5 billion
56:55profit. Have you ever thought about
56:56getting into the sports world?
56:58>> I have and I have got in. The way I did
57:00it is I started buying uh these
57:02collectible sports cards, basketball
57:04cards last summer. I'll never forget it.
57:07It's another one of those experiences. I
57:09got approached by two other uh
57:10collectors that said, "Let's form a
57:12syndicate." And there's a there's a dual
57:15logo man Kobe uh Bryant card coming with
57:18Jordan uh two signatures on it, a piece
57:21unique. It's going to sell for 8
57:23million. I said, "Are you out of your
57:25mind? $8 million for a card that I could
57:27have put in my bicycle last week?" They
57:29said, "No, no, you wouldn't put this one
57:31in your bicycle." [laughter] So, you
57:33remember those cards you plop flap with
57:35a with a you know laundry pin on it? The
57:37um anyways I the auction started uh
57:42[snorts] it went till 3:00 in the
57:43morning and my wife said to me, she went
57:45to bed. I was up at the cottage. She
57:46said, "What are you doing?" I said,
57:47"Well, I'm bidding uh with some other
57:49guys on a on a basketball card and the
57:52bidding is currently at $9 million." She
57:54said, "No, no, no, no. You're not going
57:56to spend 9 million bucks on a piece of
57:58cardboard." I said, "I don't know what's
58:00going to happen. I'll tell you in the
58:01morning. We spent 13.92
58:05million on that card at 3:45 in the
58:08morning. We were the winning bid.
58:12It's just over
58:1514 months ago. No, no, it's just a year.
58:1914 months on Card Ladder today. That
58:22card is listed at $30 million.
58:26You show me one asset class that's
58:29appreciated that much. So now we have
58:31over $200 million worth of cards. Every
58:36single one of them
58:38peace peace uniques because I believe as
58:41I said in diversification
58:44and so you talk about this market. I
58:47want I want 5% waiting in these cards
58:49and I'm just going to sit on them.
58:52the grail card in this space in the
58:54world, the number one card just to give
58:56you a sense of how valuations are going.
59:00And I I would show you the analysis all
59:02the way back to modern art 1958. It
59:05looks the same. There are three
59:09tops 1952 Mickey Mantel cards that are
59:13rated at 10. Three in the world.
59:16None of them have traded in the last 30
59:18years.
59:19The speculation on what this card is
59:22worth, one of these cards, if it were
59:24ever to trade,
59:2750, 60, 70, 80, $100 million for one
59:32card that you could have bought that
59:34card back in 1952 just like you could
59:38have bought a Picasso
59:41for three bucks.
59:43It's worth 100 million.
59:46So, are you telling your kids to load up
59:48on Cooper Fle cards or you know like
59:50what who's a card right now was Arch
59:53Manning College? You got Cooper Flake
59:54there in Dallas.
59:55>> That's the fun of it. The Otani last
59:57week, I don't know if you heard the
59:58story. I was on CNBC with this last
1:00:00week.
1:00:01>> Um, this is modern. Ultramodern. We
1:00:03don't buy ultramodern except when this
1:00:05Otani was made. both of his MVP years,
1:00:072425, the patch itself, the gold patch,
1:00:10and he signed it in both English and
1:00:12Japanese, and the card, one of a kind,
1:00:14was made, it was put into one of
1:00:17millions of packages and sent out to the
1:00:19world, and a kid pulled it in Florida.
1:00:22We bought it from him for $11 million.
1:00:25>> Wait, how old was the kid?
1:00:27>> You know, we just got $11 million now.
1:00:31>> Out of respect for his family, we we I
1:00:33mean, we're not we're not disclosing
1:00:34anything. And the same question came at
1:00:36I showed them the redemption card on TV
1:00:38last week on on Squawkbox. Then I showed
1:00:41Andrew the actual card inside of a
1:00:43Tiffany chain. You know, Po Logan Paul
1:00:46started with the chain thing. We up the
1:00:47Annie with Tiffany. We made a $2 million
1:00:50chain and Becky put it on. She's on the
1:00:52show. She said, "Wow, this is
1:00:53beautiful." Of course it is. It's a $13
1:00:56million necklace. But you know, it was a
1:00:58lot of fun. And what's that card worth
1:01:01today? I could probably because we took
1:01:04the risk of rating it. We took it to PSA
1:01:07unrated. It was raw. They call it raw
1:01:09and it needed to get a 10 on the auto.
1:01:12If the card got an eight or nine on the
1:01:14card itself, it wouldn't matter because
1:01:14it's a piece unique. There's only one in
1:01:16the world. It doesn't really matter. It
1:01:18got 910. So, I'd argue, and I don't know
1:01:21this, but if we checked, if we wanted to
1:01:23sell that card today, we could probably
1:01:24make
1:01:26>> on an IR basis, it would be way better
1:01:28than anything stock.
1:01:29>> Absolutely.
1:01:29>> Yeah. So, I mean I mean that's the way I
1:01:31look at I kind of say to myself,
1:01:32alternative asset classes are
1:01:34interesting and they're fun. So, yes,
1:01:36I'm long in to answer your sports thing.
1:01:39I'd rather own these cards. They're far
1:01:40more liquid than a sports team. You
1:01:42can't buy easily a control of a sports
1:01:44team. That's very hard to do. But you
1:01:46can get an index of cards and you can
1:01:49buy and sell them and ma and maintain
1:01:50them like a stock portfolio, which is
1:01:52what I intend to want to do. But I'm
1:01:55enjoying it and you know it's it's uh
1:01:57it's been one of my most lucrative uh
1:02:00assets in the last 18 months.
1:02:02>> Based on how you talk, you could tell
1:02:03you you love it. You enjoy it.
1:02:05>> I mean I you know Andrew it was across
1:02:07from and he said Kevin if somebody
1:02:08offered you right now you paid 11 for
1:02:10this. If they offered you 15 would you
1:02:12sell it? I said I don't think so. I love
1:02:15the card too much. I'm like I'm loving
1:02:17the card too much. And that's the point
1:02:19of it. You know, it's it's these are
1:02:21pieces of art and when you actually hold
1:02:23it in your hand and you see the
1:02:26signatures and the patches and it's only
1:02:27one of one in the world, something
1:02:29magical happens. It's faking crazy.
1:02:32>> Dere was calling this like 15 years ago.
1:02:35It was crazy. 10 years.
1:02:36>> Yeah. I know. I talked to Gary about it.
1:02:37He said to me, you know, these are not
1:02:39NFTts. These are physical pieces of art.
1:02:42They actually exist. And people want the
1:02:44the this card will go into a vault for
1:02:47most of the year, but we are going to
1:02:48take it to museums to show on Father's
1:02:50Day. Bring these cards out for
1:02:53exhibitions because a lot of everybody's
1:02:55been calling me. They want to hold they
1:02:57want to wear the Otani. They want to put
1:02:58the chain on in the green room, you
1:03:01know, at at the television network.
1:03:03Everybody came out and and took a
1:03:04picture with the chain on. They all
1:03:06wanted the chain. Even politicians there
1:03:09have pictures with the chain. Everybody
1:03:11wanted the Otani to see if any of the
1:03:14luck would rub off on them. He's the
1:03:16luckiest baseball player on earth. He's
1:03:17also very talented. But look at what
1:03:19he's achieved. The card is magic and
1:03:22it's it it has its own life now.
1:03:24>> So, how does insurance work with these
1:03:25cards? Are you going to start a company?
1:03:27>> Yeah. Well, insurance there's there's
1:03:29three businesses around it. We'll get
1:03:31into all of them eventually. Vaulting.
1:03:32>> Okay.
1:03:33>> Which you you basically rent a vault for
1:03:35security. Lending, so that you can lend
1:03:37maybe up to 30 40% of the cards. um
1:03:40value you know there's many valuation
1:03:42platforms card ladder right now is the
1:03:45hot one and then um rating the card I
1:03:49mean I look at rating uh is really
1:03:52important you know the PSA rules the
1:03:54roost on rating right now but AI is
1:03:55coming you know I think AI would
1:03:58democratize any questions about the
1:04:00human eye rating the card because really
1:04:02you're rating the card on its perfection
1:04:04in manufacturing but also on how well
1:04:07the signature is placed on the card is
1:04:08there any smudge ing or anything like
1:04:10that. And so the autos are very very
1:04:14very valuable. But the excitement of the
1:04:17whole industry right now is around will
1:04:21one of these mantels come to market
1:04:23because it's a generational shift. The
1:04:24imagine 30 years since the last trade
1:04:27>> and there's three of them.
1:04:28>> Three that's all.
1:04:29>> No any idea where they are.
1:04:31>> Everybody knows where they are. They
1:04:33just you know everybody would like to
1:04:36see one. It's one thing to you can look
1:04:38at it digitally, but to actually see a
1:04:40mantle. There's other mantels, but
1:04:42there's only three tens. They made
1:04:44thousands of mantels and but there's
1:04:47only three tens. The rest are eights and
1:04:50sevens, but the three tens are the three
1:04:52horsemen. To own a 10 mantel from 52,
1:04:55there'll never be more than three. How
1:04:57are you going to upgrade a car that's
1:04:59already been rated an eight? It has
1:05:01imperfections in it, but not these
1:05:02three. And I mean, everybody wants to
1:05:06see the mantle. Like I mean, if they put
1:05:08the mantle out, it would be like the
1:05:10Mona Lisa. There'd be lineups outside
1:05:11the museum. To go and get a picture
1:05:13beside the mantle. I mean, it's the
1:05:17whole thing to see. It would be amazing.
1:05:20>> Maybe one day. Maybe one.
1:05:20>> Yeah. Watch what happens. I mean, this
1:05:22is the kind of stuff, you know, we're
1:05:24talking about it, but it it is in the
1:05:25investment sphere. It is. And And so,
1:05:28you get a mantle today. You pay 65
1:05:30million for it. Maybe in 20 years it's
1:05:33200 million. Like a Picasso. You could
1:05:36have bought a Picasso for,300 French
1:05:39Franks.
1:05:41I went into a a Switz a a a mansion on
1:05:44um Lake Geneva in Montro at this famous
1:05:49woman's place. Her name was I shouldn't
1:05:52put her name out there. I went into the
1:05:54can to wash my hands during lunch.
1:05:57I looked up.
1:06:00It was a oil Picasso
1:06:04small about
1:06:0714 by 12 inches, but it was a Picasso
1:06:10with his signature. And I went out and
1:06:12said to her, "Is that a Picasso in the
1:06:16toilet?" She said, "Oh, yeah. My friends
1:06:18was my my husband was friends with
1:06:20Pablo. He couldn't pay his rent. We have
1:06:2240 Picassos. Walk around the house, look
1:06:24at them." I said, "Four Picassos?"
1:06:27"Yeah, some are prince." He couldn't pay
1:06:29his rent. So my husband would buy one
1:06:31every week from him. I said that what
1:06:34did your husband pay for that? I don't
1:06:36know, you know, maybe 200 French Franks.
1:06:39Who knows? Back then it was Franks in
1:06:41the south of France. You can't make this
1:06:43[ __ ] up.
1:06:44>> That's crazy.
1:06:45>> And look at what an investment that was
1:06:46for her. Him. And she likes him. Oh,
1:06:50they're nice pictures. [laughter]
1:06:54>> Anyways, great talking to you.
1:06:55>> It was great. Thank you. And I'm glad we
1:06:57got into some other stuff besides Wall
1:06:59Street stuff. Kevin, thanks again. I
1:07:00can't wait to do this again. It was
1:07:01awesome.
1:07:01>> It's great. Take care.

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