David Barse, CEO of XOUT Capital, and Peter Grandich, founder of Peter Grandich & Co. join Kitco’s David Lin to discuss the outlook on equities, gold, and Bitcoin.
Welcome to kick a news is outlook. Panel discussion with two experts on the markets. We will be running the gamut on both stocks and gold and all the economic themes in between. Joining us today are David bars and Peter grandish. David bars is the CEO of X out capital, and he is the founder of DMB holdings, a private family office.
He was formerly the CEO of third Avenue management and he is a pioneer. And fundamental, bottom up deep value investing David and I have had several conversations and he has stated that he has an optimistic bull on the equity markets. On the other end of the spectrum is Peter Grandage, another popular guest that has been featured several times.
On Kitco news. Peter is, and has been a registered investment advisor. He is a portfolio manager, um, and he's worked for, for hedge funds and mutual funds in his career. He is the editor of foreign investment newsletters and a counselor to professional athletes for the last 20 years. Peter has spent nearly 40 years in and around wall street.
He stated that we are currently in the biggest bubble of all time, and he fears that it will be so bad that he's allocated recently. 50 to a hundred percent of his holdings in cash. So very much looking forward to this discussion. There's plenty to learn from both of you gentlemen. It's a privilege to have built a few on the same time.
Welcome. Thank you. Thanks for having us, David, David, let's start with you. You are the bowl. We'll start with the, uh, optimistic outlook, shall we say? And, uh, we'll carry it out from there. Have a few minutes to state your thesis and then we'll let, uh, Peter state his. Yeah, look, I think being an optimist is just more fun and, uh, and always, uh, in a better place, because you want to think about the glass always being half full, as opposed to being half empty.
My outlook though is based on fundamentals, but also based upon simple principles of asset allocation. And in this world, As we look out at what the environment is as between what has been traditional asset allocation models and whether Euro, uh, long-term perennial, uh, harp fiduciary of assets, or you're an individual investor, you know, we've operated historically with traditional, let's say 60, 40 models.
That really aren't, uh, I think a prudent way to manage money anymore because. If you're allocating significant percentages of whatever your portfolio is to fixed income in the present environment, that's a pretty risky and dangerous thing to do. And most of the market, at least institutional market has been traditionally allocating that way.
And I see that as a trend, that's going to evolve towards more equities, at least in the reasonable term. And. I'm optimistic. I'm optimistic that the companies are going to continue to find ways to grow and that you want to own the common stocks of those companies that are going to successfully navigate through the future.
So my bull is more, really an optimistic long-term fundamental outlook. And if you have that outlook, you have to be exposed to equities. It is the only asset class to be exposed to, to get that kind of exposure. Thank you, David. Uh, Peter, why don't we hear from you? And then I'll give you a chance to respond to each other.
Sure. Well, first I, I, I want to thank both of you Davidson kickoff for this opportunity. Uh, as you've noted, I'm almost at this 40 years and, uh, First thing I like to say to you is, is that the, those of us who, uh, try to make a living, looking into a crystal ball, we really become experts only on how to eat a lot of broken glass.
So, uh, I'm not here to tell you what the future is going to be. Only the almighty God knows the future. I'm going to make an educated guess the best. Uh, I started back in the early eighties and back then, Uh, the stock market, the Dow had traveled between 700,000 for a few decades, but interest rates were 20% inflation was double digit.
Uh, there wasn't a really bullish view to be found. And in fact, there was a famous magazine article business week grand and said, equities are dead. And, uh, then some young man out of Gainesville, Georgia named Robert practic came out and said the Dow's gone to 2,700. And people thought he was crazy. No one could imagine it.
And here we are. 40 years later, it's gone way past 2,700 interest rates have gone down to almost zero inflation had been down or at least government tells us it was down a lot. And, uh, quite optimistic out there. It's very difficult other than buying perennial bears or people that sell products that cater to things that are negative.
Uh, I'm not one of them. Uh, but, uh, the mood has certainly the pendulum is swung 180 degrees and it swung at a time when there's great changes and what existed in the United States. 40 years ago, we were our largest credit a nation. Now we're a serious detonation. We had some political, uh, uh, cohesiveness, there were two different parties, but they managed to get some very good, uh, laws passed that has not happened for quite a while.
And I'm here to argue that, uh, socially and politically, I don't think the country has ever been much worse off other than maybe the silver war, the differences between people is so great. And then lastly, uh, the other key factor, uh, for my negativity is the simple fact that. Wall street has seen about one to 10% of the people that heavily participated in it, work in it to quite well, especially during the pendulum, the great of Americans have not seen that.
And they weren't seeing that long before the pendulum, uh, the pandemic started. So, uh, I think, uh, I see the cup half empty. It's obviously David sees the cup half full and I'm here to debate him. I think, uh, one of the things 40 years of experience has taught me that somewhere, it was in between him and I will lie what will actually happen.
And so I hope night that, uh, both of us can bring people a good view and to tell people that, you know, people, I used to speak at conferences all around the world, and most people didn't come to learn. They came to really just get. Justification of their position. And I would keep a very open mind. And if I may just say this David quickly a year or so ago, I wasn't positive on copper, but because you had a young man named Giovanni from kapa bank, I was so taken back what I learned there.
I changed my opinion. So I think people have to keep an open mind. And I certainly am going to keep an open mind and listen carefully to what David has to say, not just to hear myself speak. All right. Uh, David, we, uh, we've heard from Peter now. I think, uh, one of the points in which you've different on is the outlook for the economic growth.
Uh, Peter obviously has stated his position just now. He says we're one of the, and one of the bleakest histories in American, uh, in recent history in America. Uh, David, how would you respond to that? And how would that relate to the stock markets? Yeah, I'm gonna look at, besides the, the continued stimulus that we're receiving.
From, uh, from the government and, and what we're likely to get out of the current administration in terms of additional stimulus for the economy. And the fact that the savings rate may have may be, uh, highest and in some period of time. So you've got a lot of dry powder on the sidelines. What really drives.
What, what is really inspiring me quite frankly, to, to be optimistic and as optimistic as I am is the technological acceleration that is going on. And I just don't think we as humans having a full appreciation for how evolving we are in the technological development and change and how impactful that change is.
And I actually think that technological change and the speed of that change is one of the most significant forward facing risks. So everything that Peter noted is factually accurate and true. There's lots of historical things that have happened in this country that are used as benchmarks or measurements, but technological change can't be measured historically.
It can only be measured. Prospectively. And we just don't appreciate how much it's driving growth, not just in businesses that are technological businesses in every single company, in every single industry. And what I'm trying to fair it out for folks is if you're going to have large cap equity market exposure, which is where I started, I'm an optimist with the large cap equity market.
You need to be. Thinking about technological risk change as a risk forward-facing risk. And what we do with, with our strategy at X out is eliminate the companies that are, or likely will be impacted by this technological change and just avoid them. And so my belief is that's the driver of the future, and either get on that technological change.
Or you're going to get disrupted peer. I agree with that strategy because you told me in your recent note sent to me that you're not you're, you're, you're mostly cash. Now I spoke to you not too long ago. Back then you were still allocating money towards gold mining stocks. But now you're saying you're 50% to a hundred percent cash.
So it sounds like you're not just taking things out of things, uh, stocks where, uh, were investment vehicles that you don't like. It seems like you're just staying on the sidelines entirely. Well first, let me just correct you. Those, what I said is I hope to be between 50 and a hundred percent cash between now and year's end that I am now, then I'm going to use whatever happens in the future to take profits.
First of all, David made an absolute correct statement, what he said about technology, and there will be opportunity what he said, and obviously that's the area where he's expertise in. And so if you are going to be a believer and still want to stay invested, And obviously a gentleman that's learned to do that and has demonstrated then that's worthy to listen to, I'm more concerned about the overall day-to-day living.
And I guess I've always been a blue collar guy working in a white collar world and I'm watching so many people economically not participate and literally fall back, despite trying very hard to even before the pandemic started. And, and, and the, the big elephant in the room and the biggest concern I have, uh, even as concerned I am about social and politic factors is we now have a debt binge that has led to where the kicking of the can, if not impossible to kick anymore, we'll take an awful lot of what's ever left of energy to do so.
Let me get you to give me an example, Dave, I think this is very important. Like I say, when I started in the business, we were accredited nation. We really didn't have any large scale budget, deficits or debt, but we're now approaching 30 trillion in HOD debt. We could argue that there's a lot more because we have to make Medicare, Medicaid and social security payments, especially to a boomer generation.
That's just come in odd into that. And we don't have that money sitting somewhere, but let's just look at the heart that, that we know of. We now heard about this stimulus. I can, I consider it really like drug use because that's all what's helping move. The economy economy is not moving on their own. So let's just say we, we, we, we go back to four or 5% interest rates.
We somehow return to semi-normal and, and interest rates don't have to be kept at zero and we live this happy life that the don't worry, be happy crown on wall street. Thoughts about, well, At 30 trillion, we're going to have 1.5 trillion in interest expense. In 2019, we had a phenomenal economy. We had $440 billion in interest expense.
We're going to go from that to 1.5 trillion or almost half of the tax revenue that we took in 2019, so that the, the big gorilla in the room. And it's not going to impact this tomorrow or next week to the level that. But over the next few years, we cannot continue the sustain this without paying a price.
And one aspect, someone my age, 65. Won't be as bad because the likelihood is the younger generation is going to pay more of that price and I'm going to have to, so I really respect what they've said. And, and I think people that are focused in that area you'd want to listen to someone like that. My concerns is the bigger picture and maybe not for the people that are so big that a plane of Mockus, but just trying to live day to day.
And those are the types of people that I think are going to suffer greatly. If I'm correct about with social politically and economically we're heading. All right, David, uh, I'll let you respond to that. Yeah, look, I, I, I think it just goes back to the same arguments. I think these are some of the issues that we've been talking about and addressing for years, uh, and, and the problems of us becoming a detonation.
Uh, which we were doing in spades now, I, I can't disagree with what Peter's has said. I just think we are learning to co-exist with it. And we'll in hope we hope grow out of it or adjust our, uh, monetary system to, to try and shift. Right. I think that's part of what's going on right now. You're hearing a massive.
Shift in how we pay for all these things that we want to do to help spirit and grow the economy and we'll learn to deal with it. But at the same time, I go back to my premise. You got to have exposure, institutions have exposure. If they're going to have exposure, you better have large cap equity exposure.
And if you're going to own large cap equities, You don't want to own everything in an index. You want to allow someone to figure out what either picking the winners are and outperform the market. And I think that's a really hard thing to do. So few people do it successfully. My mousetrap is a much better one, I think, because all we do is seek to eliminate the losers and it's much easier to figure out what not to own.
And if Peter's right about what he said, The companies we don't own are going to underperform the ones that we own. Okay. Uh, before I let Peter jump in David real quick, what are some of these companies, these segments, if you will, of losers that you've identified. Yeah. Let's pick on a, you know, a headline today at T and T, right?
Any T and T um, announced today that they were unloading all the media assets that they bought just a few years ago. So they have basically, um, not done right by their shareholders. By making sizable and substantial investments in assets, but that they levered up the company's balance sheet in order to buy.
So some, some analogies to some of what Peter said, they, they kind of mismanaged their balance sheet and then had to get rid of these assets because the new CEO came to town and said, we gotta do something about this. In the meantime, that stock has been dead money for, for a number of years. And so if you just didn't own that.
That stock alone as a large cap, within a broad based index, like the S and P 500, you did better. And in owning all the rest of the stocks. So we T we de-select 250. So imagine if I aggregate all these non-performers so I can pick on another one, like Exxon or Chevron, two large cap companies in an index, like the S and P 500, just by not owning them.
You can help perform the index. So that's what we do at XR. We just simply eliminate the companies that we think are likely to be disrupted in 18 T S case. They, they talked about how technology was going to help them drive, uh, phone sales device sales with linking it to entertainment assets. Well, it didn't work.
And so not only that company was, uh, was, uh, uh, an intelligent decision on our behalf. Peter you've told me before that you think that the stock markets are currently in a bubble. So obviously you think that things are a little bit overvalued right now, valuations over stretched a little bit. Overheated.
How do you feel about some of the large cap selections that, uh, first of all, David has eliminated and also the ones that he's managed to stick with are, are, would you, would you be positioning yourself in some large cap companies given where evaluations are at currently? If you asked me to be in the market, I would choose a lodge blue clap before it's small bootcamp, a small cap stocks, uh, simply because, um, most of my work is with small to mid-size business owners and they have been struggling for years long before the pandemic.
And, uh, the, the unfortunate, negative surprise people learned once the day-to-day reporting of the pandemic is over. Is how severely hurt small businesses in America, which is the backbone, by the way, it's not the big blue chips, but there's no question that if I'm correct that the market does correct severely or pull back.
Institution money will stay more focused in blue chips. And then David's system of trying to eliminate the loses out of that, I think will actually Excel. So if you're going to stay long in the market, obviously someone like David, what he's doing, I think it'd be a better choice than somebody that's trying to pick small cap stocks.
I just look at the big, broader picture. I see what's happening. Socially and politically, and the problem that I have is that when the inevitable, next financial crisis comes, we won't have the political will with two parties who really have not hated themselves this much since the both parties have been formed, will not be able to go in a room and solve whatever the issues are.
And there are a mounting amount of serious issues. And again, I want to point out I don't sell anything at benefits. I don't sell cabins or dry foods or guns or anything. It's just, I see the cup very half empty. And so I want to err on the side of caution and I've taken an attitude. It's better to be alive chicken versus a dead duck.
Hmm, uh, Peter, uh, just to elaborate here, the social problems that you described concerning America today. I mean, that didn't happen just yesterday. They've been happening for a while. They've been developing. Why is it then that, uh, the equity markets have not yet collapsed. Uh, and what would be this trigger for this next correction?
You think? Well, you bring out a very good point and that's been the argument that the equity markets have been able to have a sense, build a cocoon around themselves, even through the pandemic. And so I always tell you, there's only one of three things that's going to happen either the one or 10% that are mostly benefit from the market.
I'm going to fall back to the 90% of, so that didn't, I don't think that's going to happen the 90% suddenly everything's going to come honky, Dory, and we live happily ever after catch up to the one to 10%. I don't, it'll be some ways in the middle, but it doesn't mean just because. Don't worry. Be happy.
Crowd jumps off the empire state building all the way down says, Hey, so far so good that we have to join them. And I think with getting player, you close to the ground now, and I think the markets are in a. We're more of a rough sledding. Uh, and therefore, uh, I, I wanna, I, I think cash is going to be important because even though it doesn't pay anything in a year or two, I may be able to buy things now 20, 30, or 40% less.
And if I'm wrong, uh, we did really well. And the things I'm still positioned in, I think will mirror whatever the stock market may do. So. That's the way I approach it. We're going to, we're going to come back to your positions in just a minute now, Peter, uh, David, how would you respond to that? Would you be, uh, do you see any reason for a huge trigger for a large correction?
Uh, you know, I'll, I'll, I'll echo an earlier comment by PR it's impossible for me to predict, uh, market gyrations on, uh, on a day to day or week to week or even month to month basis. And I think that's the challenge with those who have a bear market outlook. Uh, they may be right. Uh, but it may never happen in other words, to be able to identify the moment in time when, when you are at your peak and you want to liquidate.
And then when that bottom comes and you want to own is such a hard thing to do. And we, we had a little bit of that last year with. The onset of COVID-19, how many folks are perfectly selected the market peak to liquidate their portfolio, go to cash because the outlook was so terrible and then revert back into the market at the bottom and, and, and be fully invested on that day forward.
I, you probably can count them on one hand. And so to do that is so difficult. So just stay long. In it with a, with a properly constructed asset allocation model. But at this point in time, over-weighting to equities is the only sensible outlook. And if you want to take some of your fixed income allocation and hold it in cash, because Peter might be right, then you've got your cash to be able to buy what you want to buy when the market they comes for you to enter.
If you're smart enough to figure out what that entry point is, I'm just not smart enough. To market time like that. And I've watched over my 25 year career in the asset management business, seeing so many people fail at that day in and day out, just failing to, to time markets, uh, in an effective way.
That's why there's so few real successful hedge fund map. So David, let me respond. Uh, and then we can move on to another subject. Cause we'll play volleyball here. If we just go back and forth on that one. So, uh, Biggest question. I heard over 40 years from, from investors. Uh, maybe not institutional, but retail investors, which is most of my, uh, been my clientele over the years is, Hey, you guys always tell us when the buy, you never tell us when to sell.
And I always had a simple answer and that is you should consider selling when you quit in first, bring yourself to buy it today at today's price. And that's what I'm talking about. I'm not speaking about market timing. I'm not looking to go in and out. You know, James dine had a great mind. He used to say, thinking of Paul, got it.
Bent the preparation G you know, so I, I'm not going to be the guy that does the H what I am just saying is certain things like equities because of surrounding economic, social, and political reasons may put pressure on prices, where we could see a significant decline. If I'm correct. And I believe we're heading there.
I want to have cash to step up and buy the things that David May be pointing out too, because I do think blue chip is going to be a better choice over small cap and things of that nature. That's what I'm looking at. And maybe I can use this as a lead into another question. One of the other big concerns I have, and I seen that recently, because when I went on your show, David they're 60 something thousand and said, I'd be a seller of Bitcoin.
I never got so much hate mail in my life. And, uh, the concerns I have now is the lack of real experience, not just on the professional level, you know, two thirds of financial licensed financial advisors. I've only been practicing after the millennium and almost 40% now after the last financial crisis. So a good part of them have learned to drive on just the one-way street.
They haven't had to live with a market that turns down and stays down and they have retail clients really upset. And then we have people out there now, uh, in the last year, what YouTube channels and things of that nature, who just a couple of years ago, their biggest problem was how they're going to do on their algebra test.
So I'm really also concerned of the lack of experience. And that's clearly not in David Tam, but the lack of experience that's out there, both professionally and in this so-called new medium of. Internet advisers and concern I have is like, we just saw here, even in the Bitcoin move, we had somebody come out and say something, somebody that supposedly is an expert or whatever, and something drops 10 to 20% if it had all the reality is that the fact is it should never do that.
So I think that at least what we could say, and here's what we'll settle on regarding the market. Maybe David will agree. The market is likely to be more volatile and become more narrow-focused and, and most likely narrowed to the area where Dave specializes in at a gas. Me get took my kid, even though she's 29.
Now I said, you can get a back. What does better than next year? Big cap, a small cap. There's no question. Institutions will focus more on big cap, over small cap. All right, let's move on to, uh, uh, either talk about the economy a little bit. Uh, Inflation is a concern for many investors. Is it a concern for either of you?
Uh, David I'll I'll let you, uh, I'll let you go first on this topic. 4.2% headline inflation CPI came in just last week. It was higher than many expected. It's double the feds target is as transitory David, or is this gonna be persistent? Yeah, I mean, look, there are, um, It pick up, put a hundred economists in a room and you'll get a hundred different opinions to the answer to that question.
I think that, um, those kinds of judgments don't, they don't drive our decision-making or the, the fundamental metrics behind the model that we use to de-select companies from a large cap, a universe that we use. That being said, obviously, companies that are, um, impacted by inflation are, are going to have, uh, that impact be negative.
If it rises at a faster rate than, than what's projected or what the fed has targeted themselves to be at all that being said, sorry, it's, it's not that important in the scheme of things that is. We are long-term fundamental investors. We are trying to address a risk that's forward-facing, which involves technological change.
And those companies that are, or likely will be impacted negatively by technological change are going to be in longterm secular decline. And whether there's inflation or deflation, it really doesn't matter for us. Get rid of these companies that you don't want to own in any kind of economic environment own the remaining portfolio.
And you will outperform over the term. That's what we're trying to address. I'll give you an opinion that probably differs from the other hundred in the room and it won't really matter. All right, Peter, is he right? Does it not matter? Does it matter to you? And if it does, what's your view? Again, I don't think this, this discussion is a matter of right or wrong.
It's a matter of opinions. And only over time you'll judge whether or not that opinion ended up being the right one. Uh, I I'm in the camp that inflation is a real concern. Uh, I don't think you can keep. Creating trillions of dollars. Uh, and, and not somehow have them come back at you. Uh, we're seeing that now, uh, every small business owner, I know in a variety of fields, not just food and industry, but across the spectrum has seen a dramatic rise in costs.
And literally because of the pandemic, they've had an excuse where they could pass it on. And, uh, w w w we're seeing now people are demanding and actually, uh, getting interest in wage. Increases. And we've seen, you know, commodity prices and, and, and serious, uh, potential food shortages and things of that nature.
So I don't think it can be just discounted. I don't think you can just put blinders and not look at it in the longer the, the, the genie is out of the, uh, the bottle, which I think it is. And the fed, you know, some chap person said in recent days, we're not really worried about it's not time. Uh, that's what happened in the early seventies.
And by the time they had to fix it, Not only they had to slam on the brakes. They, uh, they literally had, so almost caused the country to go into depression. And I don't think that depression or anything's coming from that, but inflation is here now. It is something that's going to be, have to consider. And I think if you ignore it, uh, you'll pay a bigger price along the way.
We don't recognize that it's going to play a role in not only our daily lives, but in markets in general. Okay. Now, Peter, you and I have talked about gold many times before, and I know your viewpoints on gold. You, you liked the metal. Uh, do you still like the metal given your outlook? Uh, now, uh, when you allocate more of your holdings, where should you do that later on to cash?
Would you still allocate a portion of your investment portfolio into gold? Well, goal has always been close to my heart because at one time it was something that I helped manage and things of that nature. But from 2013 to 18, I ignored it. But as you know, in 2018, I came back in a big way, uh, wrote up the big ride of it and took something off the table.
And then most recently said that the second wave was beginning under 1700. There were very few bowls. Uh, and I said, I would own it before I own Bitcoin. And let me tell you that was. The single most, uh, thing I heard about, but, uh, yeah, I, I think, you know, I always tell people that, you know, I have home insurance, I have car insurance.
Uh, I don't want my home to burn. I don't want the car to crash, but if it does, I want something to offset it. So. But gold is always going to be kryptonite the mainstream wall street. It's just not going to be something because in a sense for him to do really well, normally, uh, financial assets have to be poor.
And people that are in the business of selling products of financial assets are not going to want to see that happen. And then there's always the hardcore group that, you know, it's always a good time to be buying gold. And it's not always a good time to be buying gold. But the fundamentals there are correct.
It's positive mining. Uh, reserves are strong by 50%. Uh, people have been securing it on the basis that China or Russia or a combination of both are likely to move to a different world. Currency and gold will be involved in it. But whether it's gold or uranium or even copper, I still think there's opportunities in those type of metals.
But again, something that hasn't been part of people's portfolio, like for a lot of decades and it's been right. Not to, I think, needs to be gone for it. And that's to have some cash for a rainy day. All right. Uh, David, what's your outlook on gold? Do you like gold as an investment right now? I like gold because my wife's in the jewelry business and she makes really pretty necklaces and rings and bracelets, but I don't like it as an investment.
I never have. Um, probably never will. And this is one where I, uh, I'm gonna, uh, re repeat and sound probably a little too repetitive where technology. Is having its impact here, the disruptive effect of what blockchain has done to the cryptocurrency marketplace and, and, and has been further enhanced by the network effect of you own Bitcoin or Ethereum or any of the other cryptos you want to own.
And, and you tell your five friends about it. And those five friends called air five friends and so on and so forth. And you've seen this rapid rise. And the more adoption you get from it, which is really blockchain in play. You know, people don't under, you know, I want to understand what it means, what is blockchain?
You're watching it in play right now. And as it gets more and more adopted and its use becomes more adopted, you will see its price. It's, it's a supply demand dynamic that will cause it to price to continue to rise. And if you want to have something that's not correlated and isn't potential storehouse of value, then.
That's a much more logical place to go for, again, a portion of your portfolio allocation, not to put 100% of your assets in, but something where you can get some exposure to an asset class that technological change is driving a material impact too. And that's how I come out on it. And so, um, I like the fact that there are people out there.
Making statements that have bottle impacts on the market price of the, of the underlying, um, asset, because it gives you a great chance to buy it along the way. So every time it dips, you know, I, I like it even more because I get to buy more. Well, David just, and I'll let Peter to, but just on the point of it being a store of value, I mean, we've seen what happened over the weekend with, uh, there's this one person, Elon Musk, he has made a series of tweets about, uh, potentially Tesla selling Bitcoin and the price moved down afterward.
I mean, if something is truly a store of value, should it be subject to this kind of volatility even, but just based on one person, one individuals. Yeah. Look, it's a, it's a relative, this is a relative concept, right? You have to recognize what you're dealing with. There's not a soul who I, I hope doesn't appreciate the fact that this is a highly volatile asset.
And as a result of that, you just have to have your eyes open and be aware of it. And as long as you are accepted and when, when you have opportunities like, um, someone talking about. About the asset and making a comment that causes such a material impact on its value, where that gives you a great buying opportunity.
And so it's, it's up to folks to just educate themselves and, and be aware of the fact that you're going to have this kind of volatility in the asset, but it's, it's certainly something long-term. That's technological impact. We haven't even seen the beginning of it yet. Peter I'll just before we wrap up, I'll just let you respond to, uh, David's comments regarding, uh, crypto assets as a store of value.
Sure. Thanks David time. So I, my emails could all be filled once you're on this. I appreciate that. I just want to give you a chance to get your word in. All right. So, uh, I respect, uh, I, it was nice to hear somebody speak it from the technical standpoint versus the pumpkin circumstances at some other name, guys that have been talking about cryptocurrencies, as you know, I've never been against cryptocurrencies.
What I spoke about was Bitcoin being the old hail everything. And when people had 10000% gains, they would not only look and not to take profits, but to buy more. David kind of talked about a multilevel it's, uh, you know, for guys like it and four guys, more like it. So far, the only people that have been very strong proponents of it, uh, people from wall street.
And let me just tell you this, and I hope David doesn't take this personal because this is no way directed at him. I'm going to have this almost 40 years and I studied markets going back 200 years. I've yet to see anything that wall street itself got greatly behind. I remember governments have always talked negatively about so far, so we don't know where they're going to land on this yet, but let's just leave that out from a modern and say this much I've never heard when wall street has stressed such an stress to get into something that after the general public got in a big way, the story ended with this last sentence and the general public investors live happily ever after.
No, how the stolen normally ends is they were the ones left holding the bag. I think like we saw in the internet bubble, we're going to see a burst. We're going to see a dramatic shakeout. There's going to be a large losses. And then the survivors of that will prosper and even do 10 times better than maybe what some of them thinking of.
I'm not smart enough, nor am I at the point in my life where I think I need to focus on that. I'll leave that to others, but I do feel in steel field that they have become way over priced. Uh, they have priced in perfection and when wall street is predicting things with 10 to 20 times return in a year or two, we used to throw brokers out of the penny stock brokerage business 20 years ago was they did the same thing and I know the results that happened there.
And I think the same results are going to happen here as well. All right. Okay. Uh, I know your stance on, uh, on blockchain, uh, David, so, uh, well, we'll, we'll uh, unless you want to comment, well, we'll leave it at that. And, uh, we'll, we'll, we'll wrap it up. Um, and the last segment, this is so much of your viewpoint, but I want to get sort of your experience as investors built, the VF spent.
Decades in the markets, various capacities. And I just like it to give some anecdotes to investors watching right now, who, you know, doesn't matter what their experience level is. Maybe they can learn a thing or two from you. What are some of the mistakes you've seen other people make, perhaps you've made yourself in the past that you could apply?
What are some of the lessons that you could apply it today in today's environment? David I'll let you go first. No, look, I think, uh, most importantly is, is having a long-term time horizon, trying to, um, Today trade markets is, is a really, really challenging thing to do. And, and again, so few successful professionals exist that to be able to say that you can do that on a consistent basis.
And the word consistent is dirty because nobody really does it consistently. And so take a long-term approach, be sound about how you allocate your. Your investible portfolio so that it can work through various market cycles. Because what I've seen in my own experience has probably some of the biggest mistakes are winners get sold early and losers get held onto for long periods of time because the conviction and bias for a, for a security that has an investment that hasn't worked out, you tend to see people hold onto those for longer periods of time.
To prove themselves. Right. And all it does is become the proverbial value trap. And you never, you never get what you want out of it. So be fundamental, be longterm, be mindful of how you allocate your portfolio and then just be patient because things will work themselves out. And as I said, if we spend as much time focused on technological risks, And as we did on interest rate risk or inflation risk, all the pundits out there studying this, you'd probably have a much better handle on understanding market dynamics and some of these asset classes that are new and forming and how those markets will evolve into the future.
And I think they're going to be the big drivers for growth and for success in investing. Okay. And Peter, you, I know you are also a wealth of knowledge. What could you share to our viewers watching now? Well, since I last, I lost more money than I ever imagined over 40 years at times than I thought I would have as a young man.
I don't know if I'm an expert on, on, on how to be a rich person. I can tell you that, uh, the me and because of what I experienced, you know, I entered wall street by accident. I don't have the education that most have. It was hands-on for me. Uh, I've made a lost millions twice. Uh, finally for me, what worked for me is I found faith in my Catholic Christian faith.
Uh, I got very involved in sports management and been involved with professional athletes and I've watched people make tens of millions of dollars and, and lose it and try to explain to them how blessed they were. And, and yet they would take him risks. I'll just say that, uh, I notice a lot of people now say to me, well, I'm just hoping to get my money back, or I'm hoping for this, or I'm hoping for that hope is a wonderful spiritual strategy, but it's the absolute worst investment strategy.
You have to have a plan. There's no question that David has a formula. He sticks by it and he's going to react based on preset notions. He's not going to wake up one morning and because he's emotionally filled one way, he's going to make a decision, probably why he's been successful. Most people don't approach it that way.
I think the other thing is the ultimate crime in investing does not be in wrong. It's stay in wrong. And that's where a lot of people get caught up. And, uh, I just think that if we look around and recognize that no matter how much we may be struggling, or we lost in Bitcoin or something today, the fact that we had something to lose in a lot of the world, doesn't, we've already been pretty good investors in blessed that way.
And I, and I just hope tonight that people walk away from this, that both David and I, uh, performed a good service, requested a blessings that the good Lord has given us to share what we know. Okay. Well, I appreciate both of your messages finally. Uh, we, we we've talked about this offline of possibly donating to a charity of your choice should, uh, um, either of your, uh, viewpoints outcomes come into fruition by the end of the year.
Could you talk to us a little bit about what charities you'd like to donate to and why? Well, I think David, I'll take this one. I'll take this one first. I think we agreed on a thousand dollars. Uh, I will take wherever the S and P 500 closed this evening. And after December 30 it's S and P 500 fair. David has adequate benchmark.
Sure. So if it finishes higher than it is tonight, I'll make a thousand dollars donation. David can mention his in a moment and if it finishes lower, David can make it to the Allera community farm. It's a farm in wall township, New Jersey that my wife and I are very involved in. And not only takes in, uh, animals, but it does a lot of work with special needs kids and veterans.
Excellent. Uh, and I'm very admirable because Peter and you should be very proud of your problem with that. I am the chairman of the city parks foundation, which is responsible for supporting and programs in all parks, within the five boroughs of New York city. And in addition to also. Being the, uh, uh, sponsor of summer stage, which has free concerts throughout, uh, many of the major parks in New York city as well.
And. And we'll look forward to Peter's donation to that charity at the end of this year. Right? Well, that will happen if you've backed con later on this year. And, uh, we'll see which, uh, which charity gets the lucky $1,000, regardless of, uh, of what happens. Thank you so much built the view to educating our viewers with your viewpoints.
I appreciate it. I appreciate your time. Thank you. Thank you, Peter. Thank you. This was quite enjoyable and, and, uh, Look forward to the next time. bless you. Have a good evening. Thank you for watching kicker news. I'm David Linn.