0:00

So there's this wonderful quote from

0:02

Sir John Templeman. He says, little

0:04

markets are born on pessimism, they

0:06

grow on skepticism, they mature on

0:08

optimism, and they die on euphoria.

0:11

And that's what sentiment and really

0:13

psychology is all about. Margaret's all

0:15

about psychology fundamentally. But the stories

0:17

and narratives we tell ourselves and

0:19

each other. including how we assign

0:22

value and value is subjective. So

0:24

the best time to buy crypto

0:26

was immediately after Genesis failed, after

0:28

they blocked their test. The outlook

0:30

is oblique, that's pessimism, and you can

0:33

see in the discount in AV and

0:35

the ECHE and GPTC between 30% you

0:37

could see it. You're

0:40

listening to Because of Bitcoin, a

0:42

podcast that shares the personal stories

0:44

of how Bitcoin is having a

0:46

real impact in people's lives, including

0:49

mine. I'm your host, Mauricio Diorto

0:51

Lomeo, the co-founder and CSO of

0:53

Letting. And without further ado, let's

0:55

get started with today's story. One

1:08

of the biggest challenges of living in a

1:10

Fiat system is that it forces all of

1:12

us to have two jobs. Your first job

1:14

is the one you need to generate income

1:17

to pay for your day-to-day living expenses and

1:19

to generate savings that you can use in

1:21

a rainy day or when you want to

1:23

retire. The second job is that we're also

1:25

forced to become investors and this is because

1:28

we've learned through fire that keeping your savings

1:30

in Fiat or dollars and earning zero percent

1:32

at a bank doesn't cut it when inflation

1:34

is eating away at our savings at around

1:36

10 10% each year. What many people miss

1:39

is that it's the second job, investing

1:41

your harder money, the one that can

1:43

materially change your stars. The reason for

1:45

this is that investing compounds and investments

1:48

can grow passively. As an example, most

1:50

people have made their fortunes not because

1:52

of their paychecks, but because the value

1:54

of their principal residence or the commercial

1:57

building they bought a long time ago

1:59

to do their business. appreciated materially. Most

2:01

of us don't have time to

2:03

efficiently do the two jobs. And

2:06

while you cannot outsource your day-to-day

2:08

job to someone else, you can

2:10

find investment advisors and professionals that

2:12

can help you manage those investments.

2:14

These are people who spend their

2:17

entire lives looking at the markets,

2:19

understanding how they are interconnected, and

2:21

using that to find opportunities. One

2:23

of the smartest minds in this

2:26

space is Ram Alualia. I've been

2:28

following Ram for several years now,

2:30

and I had the pleasure of

2:32

sitting down with him to discuss

2:35

the world of investment management and

2:37

digital assets. I hope you enjoyed

2:39

our conversation as much as I

2:42

did. Ram, how are you? I'm doing very

2:44

very well. I've been really looking forward

2:46

to this chat because... You had some

2:48

great questions in the part we did

2:50

with Alex and Noel recently in the

2:53

bits and bits podcast. And just

2:55

from your questions, I knew you

2:57

understood our business particularly well. I was

2:59

doing some research here and I was going

3:01

deeper into your professional background and it became

3:03

very clear why you get this stuff so

3:06

well, but we'll get into that. I enjoyed

3:08

the chat very much. I wanted to kind

3:10

of high-fied you through the screen. I'm looking

3:12

at things from a principal perspective and you

3:14

bring that to the table but also like

3:17

a lived. real experience perspective and it's great

3:19

because you get to validate a hypothesis like

3:21

oh this is what's going on like oh I

3:23

see man that's me like wow that's

3:25

pretty cool that's awesome man and you

3:28

don't just cover digital assets I really

3:30

enjoy your views on the broader markets

3:32

in general equities etc and etc and

3:34

I'm hoping to draw a bunch of insights

3:37

from you throughout this conversation the way I

3:39

typically like to start the show is to

3:41

get behind the scenes of the professional that

3:43

we all know today And the way I

3:46

typically open the show is asking you what

3:48

it was like growing up in

3:50

your household and was money or

3:52

finance a big topic at the

3:54

dinner table or lunch table. Really

3:56

interesting question. So look, I'm the son

3:58

of an immigrant. I saw they were

4:00

immigrated from India. He visited his residency in

4:03

Detroit in the late 70s. It wasn't a

4:05

nice town back then. My dad used to

4:07

go to work with the $20 bill in

4:10

his wallet, just in case he got mudded.

4:12

He would just hand them the $20

4:14

bill. So now we moved to upstate New

4:16

York. He wanted to be closer to his

4:19

family, a better area, small town, 2,000

4:21

people or so. And those experiences, I

4:23

think, were formed by them in the

4:25

sense that I was always in the outside

4:27

looking in. And, you know, my investment

4:30

philosophy is non-consensus. And it's

4:32

learning how the jungle works, what the rules

4:34

of the road are. And those were

4:36

impressions I had growing up. I never really

4:38

felt like I was in the club, so to

4:41

speak. I was always non-consensus. Even

4:43

at Columbia, I went to

4:45

undergrad. I started through Austrian

4:47

economics. I was always on the

4:49

more classical liberal, what modern people would

4:52

say libertarian, side of things.

4:54

And I was always into the

4:56

classic philosophers and Emmanuel Kant

4:58

and championing the Renaissance as

5:00

peaks of human achievement. And

5:02

that's really not popular these days.

5:04

It's really interesting, your dad's $20

5:07

bill, because growing up in Venezuela,

5:09

my dad made me carry a

5:11

hundred bollywood, always in my wallet,

5:13

it was in case I got robbed,

5:15

because the danger of somebody going through

5:17

the trouble of robbing you and then

5:19

getting no bounty would oftentimes increase the

5:21

risk of them hurting you. And

5:24

so, It's funny to hear someone else get

5:26

to that insurance policy through just trial and

5:28

error. And it's sad, but it's true. Really

5:30

else I read growing up was Gary Becker.

5:32

He used to have a column in the last

5:34

page of Business Week, which is a magazine

5:36

that, I don't know, doesn't really circulate so

5:39

much anymore, but I had a chance to

5:41

meet him. He's a Nobel Laureate. He was

5:43

a university of Chicago. He was also

5:45

a friend of Milton Friedman. And so

5:47

he pioneered the field of human

5:49

behavior and economics, like studying how

5:52

incentives shape human behavior. He was

5:54

studying divorce rates as they relate

5:56

to state policies and costs of

5:58

divorce, for example. If you have low

6:00

entry and exit costs and they happen more

6:03

often, if you have high entry and exit costs,

6:05

have them less. Now this guy kind of

6:07

knows something here, kind of learned from that.

6:09

Like why is popcorn expensive at a movie

6:11

theater when it's cheap to make? And

6:13

explain to you on Opley Dynamics or why

6:16

does the mafia exist? Why do you have

6:18

governance structures in extra legal activity? You

6:20

have two people that want to

6:22

have a voluntary consenting transaction, the

6:25

government denies. Usually there's some.

6:27

other entity misgives the mob that

6:29

stuffs and provides those services. female

6:31

and Marcus, same thing, have certain

6:33

segments of investors that have certain

6:35

behaviors and respond to certain incentives.

6:38

So those are things that influence

6:40

me. That's brilliant. My other question was,

6:42

I saw you do have a

6:44

bachelor of economics and philosophy from

6:46

Columbia University, which is a great alma

6:48

matter, by the way. But I got the

6:50

sense that what you do today, and when

6:52

I see this original bachelor degree, were you

6:54

already interested in finances when you decided for

6:56

that degree or does that come later? Yes

6:59

and no. Look in high school I was

7:01

always building businesses, building my websites. My freshman

7:03

year in college I was the only one

7:05

with a visa master card term on like

7:07

dorm room. I was building websites and swapping

7:09

payments. It was kind of funny. I had

7:11

a visa logo on my door and so I

7:13

had some basic sense of the payment system

7:16

just to that experience and how interchange

7:18

worked. I always loved building businesses but My

7:20

initial passion was always physics actually, so I

7:22

actually applied to climate physics major or studying

7:24

math. It goes ten and a half with

7:26

philosophy and even religion too. Why are we

7:28

here? What's the meaning of life? What is

7:31

it really? You know, I realize that after

7:33

my freshman year that when I looked around the

7:35

room there's me and like eight guys, all

7:37

of whom I think had aspergore or syndrome that

7:39

were certain rather than me. And I said, you know,

7:41

if I got on this path, I'm going to be working that

7:43

firmly lab, I have two miles of two miles

7:45

on the ground two miles of the ground two miles

7:48

of the ground. That's probably not the

7:50

best lifestyle. So I had a crush on a

7:52

girl with my friend in economics. I said,

7:54

what class do you teach? The economics. Oh,

7:56

OK. Let's take some economics classes. Then I

7:58

fell in love with economics for. about the

8:00

girls. A fellow loved one was Milton Friedman.

8:02

Gary Becker and Freeman Hyick wrote to serfdom,

8:04

which are books you read in the court

8:07

curriculum in Columbia, by the way. You read

8:09

Road to serfdom as it's required. So my

8:11

passion has changed, right? And you think about

8:13

what rule of law is, what's the right way

8:15

to govern, what's the right way to organize

8:17

society. That's fascinating, man. So many threats to

8:19

pull, but I want to keep the progression,

8:21

because I want to get into the current

8:23

events and your views on the views on

8:25

the market. from university, you started

8:27

as a national defense analyst, I wish

8:30

I had another hour on this part

8:32

to talk to you about that. Then

8:34

you worked at one of the biggest

8:36

banks in the world, Bank of America,

8:38

then you started your own business, sold

8:41

it to another bank, and then you

8:43

led digital assets at that bank,

8:45

then you went on to your second

8:47

venture, which is where you are today. Can

8:49

you walk us through that? Yeah. Well, I

8:52

graduated in 2001 in the middle of recession,

8:54

I don't know. apply for an opportunity

8:56

at the Cato Institute, which was

8:58

a libertarian public policy thinking. It's where

9:00

I actually had a chance to shake

9:03

the hands of Milton and Rose Freeman,

9:05

his wife, and me, Gary Becker. By

9:07

the way, I was like a 20-year-old

9:09

kid. I was paying minimum wage. I

9:11

was doing analytical work for national defense

9:14

policy people, but I was on hardcore

9:16

analysis to be clear, right? I was

9:18

helping write op-op ends, which actually I've

9:20

done, which actually I've done, which actually

9:22

I've done, incredibly engaging in

9:24

actual debate with one another around

9:26

things like what's the role of government and

9:28

what are the right kind of policies. That

9:31

was a wonderful, it was great, I probably

9:33

had paid the least I ever did, but

9:35

in another sense it was the most rewarding

9:37

and enriching experience I ever had. So then

9:39

I wanted to manage with a consulting, a

9:41

lot of data analytics, worked with a lot

9:44

of banks as customers. That's also been

9:46

a common theme in my career too. I was

9:48

in Merrill and we bought a bank there called

9:50

First Republic. And then in 2008, we sold

9:52

First Republic as Merrill, where she needed

9:55

capital liquidity, capital equity is a key theme

9:57

in how I feel about the world and the banking

9:59

system. I realized that there were

10:01

a lot of dislocations in the

10:03

bond market. These securitizations

10:06

have lost a lot of values and

10:08

G. Maybe this is all you're buying

10:10

them. I didn't really know much about

10:12

how that worked, but I knew how

10:14

loans worked, not securitizations.

10:17

Oh, I had a small ass manager who were

10:19

buying these assets. It turned out that

10:21

they were worth a lot more than the

10:23

things were signed five cents in the

10:26

dollar. It turns out securization

10:28

worked, actually. More money was made on

10:30

the big long than the big short. Right? So

10:32

I was part of the big long. So we were

10:34

buying what are called non-agency residential

10:37

mortgage-backed securities, all the things that

10:39

blow up financial system. But the

10:42

securitization machine actually worked

10:44

in part because house prices went

10:46

up also. That was the underlying

10:48

collateral backing the bonds. Right. So

10:50

I learned about distrust and securitization.

10:52

We were using analysts to figure

10:54

out the price of these bonds. I started

10:56

doing my first angel investing and venture investing

10:59

too, so I learned about that. You know,

11:01

one of the companies went public on Lindy Club,

11:03

so I learned about the IPO process. I also

11:05

learned about all the hot air and venture capital

11:07

through the same time. Oh, this is all storytelling.

11:09

Oh, it's like you're mostly lucky most of the

11:11

time, like, okay, I get it out. I remember after Lindy

11:14

Club, my public, how do we hedged the hell out

11:16

of this thing? How do I got this shit off

11:18

on my balance sheet, my balance sheet, a fast like

11:20

balance sheet, a fast that can. So I can. So

11:22

I can. In a broader story here, just I

11:24

was having experience to build different asset

11:26

classes with the background in data

11:28

analytics and the financial system with

11:30

banking, right? That I built a company called

11:32

PRNQ, or clients who were credit hedge

11:35

funds, or providing data analytics, helped

11:37

banks and hedge loans buy loans from hedge

11:39

loans by loans from lending club and lease

11:41

other players in the surifies of the world.

11:43

I sold that to Cross River Bank a

11:45

few years ago. It's a A6Z ribbon Z ribboned

11:47

back bank. Here in New Jersey, built the

11:49

crypto business as well. I said let's go build the

11:51

crypto business, so we power coin base. If you

11:53

go to coin base and you have an ACHR

11:56

wire transaction to deposit funds for a fee at

11:58

rent, that's powered by a crossover. So you'll

12:00

see that there. So I'm building limited wealth.

12:02

We're an SEC registered investment advisor or

12:04

venture back. And we want to disrupt

12:06

the old guard of trifle or disrupt

12:08

Maryland. We have to more than go

12:11

on and do it the right way.

12:13

Do wealth management the right way. Modern,

12:15

digitally native. Think about digital assets. Think

12:17

about alternative assets. Use analytics and

12:19

link that with trust and tax

12:22

as well and tax mitigation. So. That's

12:24

what we're doing. It's a kind of place where I didn't want

12:26

to put my money, which is what I did. It's fascinating how

12:28

many times the entrepreneurial story becomes. I had a problem. No one was

12:30

doing it the way I wanted it. I went and did it. And now

12:32

other people like what I did. It's the story as old as time. And

12:34

in many ways, it's very similar to Latin. We were mining. Nobody gave us

12:36

a loan. The guys I did. We thought were lunatics. We thought we're

12:38

lunatics to their lunatics. We thought we're lunatics to

12:40

their lunatics. We're lunatics. We're lunatics. We thought we're

12:42

lunatics. We thought we're lunatics. We thought we're lunatics.

12:44

We're lunatics. We're lunatics. We're lunatics. We're lunatics. We're

12:47

lunatics. We're lunatics. We're lunatics. We're lunatics. We're lunatics.

12:49

We're lunatics. We're lunatics. We're lun And so we built

12:51

something that we would want to put

12:53

our money in and then they balloon

12:55

into what you see today. So brilliant

12:57

story and reinforces this idea that when

12:59

you're solving your own problem, you're

13:01

most likely solving someone else's.

13:04

At what point in this whole journey

13:06

does Bitcoin come into the radar? When

13:08

did you find Bitcoin? So November or

13:10

2013, I was approached by a VC

13:12

from conversion capital's name is Christian Lawless

13:15

and he said, Rahm, what's your view on...

13:17

this exchange. It wasn't called LedgerX.

13:19

It wasn't called LedgerX back then.

13:21

But you know, it was a drug

13:23

use exchange. And so I knew that

13:25

was a time when I first encountered

13:27

Bitcoin or had awareness of this email

13:29

there. Because I was wondering myself,

13:31

when did I come across Bitcoin? So I

13:33

sent them an email and so I

13:36

sent them an email and the conclusion

13:38

was, don't invest in this email there.

13:40

Because I was wondering myself, when did

13:42

I come across the Bitcoin, it's super

13:44

cool. What the real thing was just off

13:46

is Bitcoin is Bitcoin. It's like do you

13:48

want to invest in the derivative of Bitcoin

13:51

is Bitcoin itself and I met David

13:53

Namdarn during that experience as well here and

13:55

he was like guys I didn't get much

13:57

exposure to be quite candid then you know I

13:59

think I got, my first Bitcoin was literally

14:01

on Wall Street, actually, which I lived

14:04

at, I lived on 44thaw Wall Street,

14:06

but it was early days, and unfortunately

14:08

I'm getting much exposure, but

14:10

intellectually I was fascinated immediately.

14:12

Well, I first found you when

14:14

you started writing incredible content,

14:17

by the way, around the Genesis bankruptcy.

14:19

This was back in late 2022, and I'm in

14:21

the space. When somebody that I

14:23

haven't come across before writes about

14:25

something... and your views aligned with my

14:27

views and your insights were very aligned

14:29

with the way I was thinking about

14:32

it, I instantly knew I had to

14:34

continue following you. And you wrote about

14:36

this from a lens that only people

14:38

involved in the process would have. You

14:40

went through extreme depths to understand what

14:43

was happening, what were the incentives on

14:45

the other side of the negotiation. So

14:47

I guess the question I had was,

14:49

were you just an astute observer? or

14:51

how did you become aware and

14:53

where you or your clients or

14:56

friends involved? What pike your interest?

14:58

I've never had a commercial relationship

15:00

with the DCG Genesis or Gemini.

15:02

I tried to have relation with

15:04

Gemini, they couldn't get me through

15:06

KYSC. I've heard of her from

15:08

her story. They couldn't get me through

15:10

KYSC. I've heard of her from her

15:13

story. I've heard her from her story.

15:15

I've heard her from her story. So

15:17

I've heard her from her story. So

15:19

I've heard her from her story. And

15:21

what I saw in Genesis, I said, this

15:23

is the next AIG, because they were a

15:25

non-bank Akenas event. They took in

15:28

customer deposits, they turned around, they

15:30

lent them out, but they didn't have

15:32

a lender of last resort, and they

15:34

were making term loans to them and

15:36

asked for liability mismatch. Those

15:38

were some of the key lessons,

15:40

among others, from the French crisis.

15:42

Again, I was admiral, the center

15:44

of the storm, in 2008. So when

15:47

you have those experiences. how you

15:49

look at the world changes fundamentally.

15:51

It's like, food me once, shame on you, food

15:53

me twice, shame on me. You're not going to

15:55

get wrote called that way again. So you really

15:57

understand what happened, and when I looked

15:59

at. Genesis, DCG and other student

16:01

block files, critical about block file and

16:04

Celsius. I think I was on the

16:06

last paddle to Alex Mashinsky and I

16:08

was calling him out and people didn't give me

16:10

the time of day. He was like, oh Alex,

16:12

can I get your autograph after him? That was

16:15

the vibe. You had to be careful which

16:17

was staying public because you can get cures

16:19

of defamation of course. Yeah. I knew the

16:21

shit coming out of his mouth didn't make any

16:23

sense, but it's hard for the public

16:26

to understand that. Where and who? What

16:28

third party audit and what custodian?

16:30

No, none of that exists. Right. So

16:32

anyway, those things, as you can see,

16:34

just kind of bothered me and irritate

16:37

me. And I'd be robbed, pulled myself

16:39

in the past, you know, an M.F. Global

16:41

account. And the council, we said,

16:43

raided and Dalmat, they were, and they

16:46

lied and misrepresented. So

16:48

I lived those extremes, like, I see

16:50

this incumbent, you know, when Michael Moore,

16:52

it's the CEO of Genesis, sit

16:54

on Twitter, He said, we have fully

16:56

shed the risk from 3AC. At that point,

16:59

I knew something was terribly wrong

17:01

because it's only a fine number

17:03

of ways you can shed your risk.

17:05

You can sell the acid, but that

17:07

means you recognize a loss on

17:10

your P&L. And someone's got

17:12

to buy that off of you. You

17:14

sell it, you just crystallize in a loss.

17:16

Yep. Or you buy CDS, but who's

17:18

going to write you to CED? No

17:20

one does that. So I said this doesn't

17:22

make any sense. What he said. I

17:24

asked him in that threat, in the aim of

17:26

good faith, I said, hey Michael, how did you

17:28

do that? Here are your options, which one was

17:30

it? It was purely from a point of

17:33

view of curiosity, inquiry, and

17:35

a presumption of good faith. But then

17:37

there was no clarity and more question.

17:39

And then after more data points started

17:42

to come together, wait a minute, and

17:44

this is just bad, like the promissory

17:46

known, other things like, this is an

17:48

interrelated party transaction. I called then in

17:50

Enron. And I got some flat for

17:52

that. They're like, oh, are you engagement?

17:54

I'm like, no, this is Enron. And then four

17:56

or five, six months later, New York, AG said,

17:58

we're going to graph them, it's fraud. as it was.

18:00

So that's what it was. It was like,

18:02

kind of pulling that thread, just trying to

18:04

make sense of it, trying to figure out

18:07

what the impact is to the price of

18:09

Bitcoin too, right? I think we let double

18:11

GBTTC or not, those are the cross considerations,

18:13

trying to make sense what the house happened.

18:15

But after some time, like I was like,

18:17

you know what, this is good like volunteer work

18:20

for the people that were embroiled, those DCGJ

18:22

justices, those DCG justices, I live

18:24

through Merrill, I was like, the moment meets the

18:26

man kind of thing, like, I'm designed to analyze

18:28

this, let me go deep on this. That's fascinating,

18:30

man. I'm sure myself and many others that

18:33

were closely following the bankruptcy are very grateful

18:35

to you for spending the time and putting

18:37

your insights out for everyone to see. Funny

18:40

enough, I don't know if you know this,

18:42

but we ended up refinancing the large majority

18:44

of Celsius borrowers out of Celsius bankruptcy. I

18:46

had a happy ending for them. to your

18:48

point. I had similar concerns when somebody

18:51

asked me, how do you feel about

18:53

Celsius, whether it was in public or in

18:55

private, because I didn't really want to

18:57

be perceived as speaking ill of any

18:59

of my competitors. But it was very

19:01

frustrating when I had clients at the

19:03

time withdrawing assets from Latin. We were paying

19:06

I think 9% on USDC to take it to

19:08

Celsius because Celsius was paying 12. And I

19:10

kept telling people, have you asked them where

19:12

they're getting 12? Because I can show you

19:14

where my nine comes from, I turn those

19:16

dollars at 12. I don't see, they're lending

19:18

supposedly at zero. How are they getting

19:21

12 at the same risk that we're offering to

19:23

you? But people didn't see risk then, they

19:25

just saw yield. For good or bad, people

19:27

seem to only learn with these shocks hit

19:29

the market. And I think you're seeing a

19:31

big renaissance because the level of questions that

19:33

clients are asking now has been elevated, the

19:36

type of diligence they're doing, it's come a

19:38

long way. Even if you look at some

19:40

of the newer offerings that are out in

19:42

the market, they're all fully reserved. less and

19:45

less people are doing this brace on rates,

19:47

which eventually leads to rehabification and other things.

19:49

And so I think it acted as a

19:51

bit of a reset for the lending industry,

19:54

it washed away a lot of the bad

19:56

players, solidified the good ones, and I think

19:58

we've now been building on the... stronger

20:00

foundation for what's to come?

20:02

Crew does running the lessons

20:04

of baking and markets history.

20:06

100% application is a lesson

20:08

as old as time and

20:10

now market structure is somewhat

20:13

better, so has a lot more to do.

20:15

I agree. I saw that you mentioned that you

20:17

see or expect markets to be materially higher

20:19

by end of the year. I think the

20:21

word is significantly or materially but higher by

20:23

the end of the year, but that you

20:25

do expect a lot of chop or volatility

20:28

along the way because of political reasons and

20:30

others. But I found interesting that you didn't

20:32

mention Bitcoin on this most recent newsletter newsletter.

20:34

So I was curious to ask you, could

20:36

you share a bit of your view in

20:39

terms of Bitcoin, recent developments in DC?

20:41

And what you see is driving this

20:43

idea that markets are going to be

20:45

going generally higher. Yeah. So overall,

20:47

like the number one driver of the

20:50

S&P is earnings growth. That's number

20:52

one. And related is also the

20:54

direction of interest rates. So earnings

20:56

growth is continuing. Why is it continuing?

20:58

And why is it going to accelerate?

21:01

Because you're going to have

21:03

this animal spirits bump from deregulation

21:05

and the increased enthusiasm from

21:08

small business consumers and corporates.

21:10

By the way. Fun fact, I learned

21:12

yesterday that U.S. military recruitment

21:16

shot up to a 15-year high in

21:18

December. All that's because of the

21:20

Trump election. I remember the day

21:22

of the election I had a

21:24

live space as I said, you're going

21:26

to see the NFIB small business

21:29

survey, crank higher, and one

21:31

month later, three-year highs. Look

21:33

at non-form payrolls that came

21:35

out in January, crushed expectations,

21:38

200, 200, What's happening is

21:40

animal spirits, which is a term

21:42

from John Maynard Keynes, right? The idea

21:45

that people have more confidence in

21:47

the future and their outlook, and

21:49

they're more optimism, because they want

21:52

to spend more and make

21:54

more investment decisions if their

21:56

business owner, and that is creating

21:58

more economic growth. Korea's growth

22:00

will be there. On the interest rate

22:03

front, Besson said yesterday that Trump wants

22:05

the long-term rates to go down and

22:07

Trump is a pressure on the short end

22:09

rate. That's the right idea. It's a pro-growth

22:11

policy. So that's going to unlock more

22:14

sources of growth too. So I think

22:16

it's an up year for the S&P, not

22:18

as much as it was in the last two years,

22:20

but an up year nonetheless. And however,

22:22

evaluations are in the top decile.

22:24

So what matters is positioning within

22:26

the market. Not everything is cheap.

22:28

you really had to pick your spots at

22:31

a sector level within each sector you've

22:33

got to pick within those sectors too.

22:35

So that's one. On Bitcoin I shared

22:37

views in late December and my push

22:39

of crypto is more like intermediate term.

22:41

I don't have like a weekly change

22:43

in year per se. ID risks of

22:46

substantial portion like crypto in mid to

22:48

late December actually. I shared why

22:50

in one of these December newsletters. What I

22:52

saw was that Trump election

22:54

created an extraordinary Trump bubble

22:56

in risk assets, including crypto,

22:59

and we wanted to ride that

23:01

higher. But it created a parabola. And so

23:03

the way I approach digital assets and these

23:05

high momentum assets is, you kind of want

23:08

to ride them up, but then keep one eye

23:10

for the exit. And when you see that parabola

23:12

coming, just rotate and move out. So the

23:14

expectations around crypto are so high, but

23:17

the reality which needs to be delivered

23:19

is far below that. You need congressional

23:21

action. Congress is going to

23:23

focus on their tax bill down this year,

23:26

which is going to be hard to do

23:28

anyway. And the other information I've been

23:30

hearing from my friends in DC is

23:32

they're saying, look, fair shake pack was

23:34

like a morphine drip for these politicians.

23:37

They don't want to let it go

23:39

ever. They're hooked on this thing. It's

23:41

addictive. Because fair shake, essentially, when every

23:43

election they competed, every contest, they need

23:45

to keep the issues of encryption and

23:47

not to fix the problems. Like. The

23:50

farmer lobby for 20 years has been

23:52

a non-scriptive crypto is one of those

23:54

powerful lobbies in his state's mouth. He

23:56

fixed the problems and the money goes away. Like

23:58

they couldn't have a stable coin. past last year.

24:00

It was by Parmesan. They had

24:03

Democrats, like Kristen Gellibran, and

24:05

Cynthia Lemus, Republican. So that's one.

24:07

On the other hand, though, Trump

24:09

family, their wealth is denominating of

24:12

crypto. They don't Bitcoin, they don't

24:14

have a day off-sarium, they own

24:17

Solana via Trump token. I did participate

24:19

in the Trump token thing, that

24:21

was fun. Not enough though,

24:23

unfortunately. So overall, I would say

24:25

this, it's like, like, one, we had a parabola.

24:27

We had a parabola. So I fade sentiment at

24:30

extremes. That's one of my approaches. You know, we had a

24:32

problem with Syria in May. I also sold my theory on that.

24:34

I wrote all of these things on Twitter by there, every single

24:36

one, all the three things I told you, I wrote them all

24:38

on Twitter. And, you know, you want to get in when people

24:40

are pessimistic again. You want to get in when people are pessimistic,

24:42

when people are focused on other assets like in a video or

24:44

something like that. I remember I was on phone for Thanksgiving. And my step. She

24:46

asked her. She asked her. She asked her. I said, I said, I said, I said, she

24:48

asked her. I said, I said, I said, I said, I said, I said, I said, I

24:50

said, I said, I said, I said, I said, I said, I said, I said, I said,

24:53

I said, I said, I said, I said, I said, I said, I said, I said, I said,

24:55

I said She's like low 80s. They're exciting

24:57

from one perspective about adoption, but

24:59

also top-signally, right? That was

25:01

an event, but clearly we saw a

25:03

momentum behind that, but you know, I

25:05

started getting these text messages. So my

25:07

spider census goes off, and again, I'm

25:09

contrary. And so like, well, my orientation

25:11

was, I want to get off the probable

25:13

at some point. There's really just timing

25:15

that, was the basic idea. So I

25:17

think maybe in a few months I

25:19

will reposition, and I think the question

25:21

is going to be around this executive

25:23

order. what happens in this 180 days

25:25

timeline, a lot of open questions there.

25:27

The other thing I would say is,

25:29

technically, whales are selling above 100K,

25:31

is something I noticed in December,

25:34

which is what gave me the

25:36

conviction to sell, actually, which was,

25:38

you know, when SEC Chair Ganser

25:40

or Nazi's resigning, Bitcoin ramp to 105,

25:42

and then it sold off. Then

25:44

they declared his replacement, Paul Atkins,

25:47

Bitcoin ramp to 105, then it sold off.

25:49

And then it sold off. So I look at

25:51

that, and I say, wait a minute. Whales

25:53

were selling at these levels. So

25:55

that's kind of my orientation to

25:57

the officer class right now, but

25:59

I I expect I'd be

26:01

constructive later in a few months. I do

26:03

think by year end though, if you look

26:05

at the cycle timing, I've missed feelings about

26:07

that. Like I spent time Michael Turp and

26:09

that's a churchy roundtable. I had

26:12

him on my podcast as well. I've looked,

26:14

November 2025 is the end of the cycle.

26:16

It's an interesting data point. You touched on

26:18

a few of the questions I had, which

26:20

was, what do you expect to see out

26:22

of DC? And we talked about this tax

26:24

bill and I would have agreed bill way

26:26

earlier. On this topic of peak sentiment,

26:28

I've heard you write about this a few times

26:30

and this idea of peak sentiment in

26:32

markets and the fact that when you

26:35

are at peak sentiment, the market becomes

26:37

vulnerable to bad news flow or negative

26:39

headlines, etc. and becomes extra vulnerable to

26:41

bad news flow or negative headlines, etc.

26:44

and becomes extra vulnerable to these types

26:46

of changing or contrary news flow. How

26:48

can you describe this idea of peak

26:51

sentiment? It's a great question. So there's

26:53

this wonderful quote from Sir John Tumpleman.

26:55

He says, All markets are born on

26:57

pessimism, they grow on skepticism,

26:59

they mature on optimism, and they

27:02

die on euphoria. Such a wonderful

27:04

quote. And that's what sentiment, and

27:06

really psychology is all about markets,

27:08

all about psychology, fundamentally. But the

27:10

stories and narratives we tell ourselves

27:12

on each other, including how we

27:15

assign value and value subjective. So the

27:17

best time to buy crypto was immediately

27:19

after Genesis failed, after they blocked their

27:22

cats. The outlook was bleak. Everyone had

27:24

panic sold. No one left to sell.

27:26

That's pessimism. And you can see in

27:28

the discount to ANAV, and an ECH and

27:31

GPTC, between 35% you could see it. And

27:33

that was climbing the wall of worry, which

27:35

as well as the warms going to the

27:37

crypto army. It was all priced in.

27:39

Now we're on the opposite side of

27:41

that. You have literally MSTRs and premium

27:43

and premium NAV. It's not just

27:45

emissures. Many aspects were expensive.

27:47

And that's just the nature of how

27:49

things work. Remember, in 2022, in that

27:51

bar market, the only assets that work

27:54

were cash on energy stocks. Think about

27:56

that. Any other house did not work.

27:58

There's no way to avoid the pain. You could

28:00

have bought a house or commercial

28:02

real estate. You've been screwed on

28:04

that. Equities, screwed on that. If

28:06

you bought bonds, you'd be screwed

28:08

on that too. Think about that.

28:11

Bonds were 10 years at 1.5%. So

28:13

all asset classes priced higher at the

28:15

top of a bubble. We're not very

28:17

yet. Things are 10 years at 1.5%.

28:19

So all asset classes priced higher at the

28:21

top of the bubble. Remember when Trump spoke at

28:23

the UN, which hilarious, by the guy is a

28:25

topic of conversation. And he's like, I'm going to

28:27

give all of you guys tariffs here, tariff, you,

28:29

you, and you. It's like Oprah, except a set

28:31

of cars of tariffs. That wasn't really his message

28:33

by the, it was his subtext, but he said,

28:35

look, I want everyone to lower interest rates around

28:37

the world, number one. And then that same day,

28:39

a project, a project star date, come out, where

28:41

you had four people, including Trump, Sam Baldwin, and

28:43

others, where they were there, where he said $500ing

28:45

up, $500, $500 billion dollars to $500 billion dollars

28:47

to bill, $100 billion, $100 billion, $100 billion, $100

28:49

billion, $100 billion, $100 billion, $100 billion, $1 million,

28:52

$1 million dollars, $1 million, $1 million, $1

28:54

million, $1 million, $1 million, $1 million, $1

28:56

million, $1 million, $1 million, $1 million, $1

28:58

million, $1 million, $1 $ Credit spreads, tightening,

29:00

the international tight end, US sectors are

29:02

up, cyclicals are up, and

29:04

defensives, and race sensitive, anything

29:07

was up. That's one of the

29:09

markers of the peak sentiment event.

29:11

Essentially, it's a decline and risk

29:14

aversion. If you want to put

29:16

an economist's perspective, it's a decline

29:18

and risk aversion, it's a decline

29:21

and risk aversion. That is what

29:23

animal spirits feels like. It's

29:25

actually so funny, when you hit the exact

29:27

same question that I had for you, which is,

29:29

as someone who's very active in public markets,

29:32

you follow evaluations, I've been really dying

29:34

to speak to someone like you here,

29:36

what's your take on strategy now, formerly

29:38

known as micro strategy, and other companies

29:40

replicating that model, like how do you

29:42

think this movie plays out? We first

29:44

saw Michael Sarlow, what he's done is

29:46

brilliant. I've had the chance to meet

29:49

him a few times. He's a wonderful

29:51

storyteller and communicator. And the coin needed

29:53

that leadership. There was no Satoshi. You

29:55

need a voice. People could point to.

29:57

And he played a very important role

29:59

for big... Bitcoin, not to mention the

30:01

flows and financing the purchase of

30:03

Bitcoin. It's real. Everyone should send Michael

30:05

sale like coin one decline. I don't

30:07

like the change to strategy. Here's why.

30:10

Markets are all astacology. That's my principle

30:12

number one. So you don't want people

30:14

looking to the left or to the

30:16

right when you're going up a bubble.

30:18

You want them looking straight into Valhalla,

30:20

which is the promise land. Want them

30:22

looking straight and not thinking. You want them

30:25

to be on the bus cheerleading, rah rah

30:27

rah rah. That's what you want. So when

30:29

you do something like, hey, we're going to change

30:31

the name to strategy, it calls people

30:33

to stop, reflect, and think, well, why

30:35

are we doing that? He actually had an

30:37

incredible streak on CNBC. I listened to him.

30:39

I listened to him. I said, I was

30:42

like, wow. He's messaging, like, right on target.

30:44

He was just bouncing, you know, return, return.

30:46

He's like, like, a tennis metaphor. And

30:48

then CNBC asked him this one question,

30:50

like, like, and he said, well, well, it's better

30:53

than commercial real. because it costs me with a thing critically.

30:55

Bubbles are about just being a part of that. We're staying

30:57

long. We're one of our howlahs do this thing. Let's go,

30:59

go, go, go. Huddle, huddle, huddle. I don't like that in

31:01

ancient chat. I don't think it helps. Well, my other question

31:03

for you on this topic is, I've had a few interesting

31:05

discussions. I had Raul Powell on the show a few weeks

31:07

back, and we got talking about potential pockets

31:10

of risk in the market of risk in

31:12

the market, around micro strategy, around micro strategy,

31:14

around micro strategy, around micro strategy, So this

31:16

is coming up more and more as I

31:18

talk to people in the space, particularly people

31:20

that manage size or are involved and they

31:22

have such a large portfolio that they have

31:24

to have spot inequities and all this stuff.

31:26

There seems to be this theme coming up

31:28

that this whole micro strategy looks too good

31:31

to be true. How long can this continue?

31:33

And people are starting to try to find

31:35

if there are any pockets of risk that

31:37

the market is unaware of. Do you have any

31:39

of those concerns or do you see that

31:41

there could be any pockets? No risks out

31:43

there, certainly. There are two bubbles that are

31:45

in place right now. Bubbles aren't really bad.

31:47

You want to be in the bubble and

31:49

write it up. I am participating in the

31:52

data center bubble. It's a great bubble. You

31:54

guys should go and join the fun. It's

31:56

a great waiting. I got a

31:58

nividia, solistica, flex, semiconductor. directors,

32:00

met at Google, it's a wonderful

32:03

bubble. There are two bubbles. One

32:05

is the bubble in animal spirits

32:07

and the bubble in quality stock,

32:09

which is really funny because these

32:11

are like, I'd tip this to

32:13

each other. So the bubble in

32:16

quality stock is like, look at

32:18

Costco. Costco is a Ford PE

32:20

ratio of 50 times. It's much

32:22

more expensive than Nevada.

32:25

Walmart, price you than technically

32:27

call a quality business. These

32:29

are businesses that are indestructible,

32:32

they're AI-approved, they've got a

32:34

dominant advantage, they've got a deep

32:36

mode, recurring cash flows, pristine balance

32:38

sheets, and they lead their market,

32:41

they just grow, grow, grow. They're

32:43

wonderful businesses, but they're no longer

32:45

at a fair price. There's a bubble

32:47

in quality, not all quality sites, but

32:49

those names and others too. So then

32:51

you've got a bubble at animal spirits

32:54

like Tesla, which is like Tesla, like

32:56

a pea- both Tesla and micro strategy

32:58

are technically deteriorating right now. So animal

33:00

spirits, parts that bubble are leaking now.

33:02

So, you know, uranium had a nice

33:05

rally, and these are all correlated. People

33:07

that own Bitcoin, and if they also

33:09

in equities, I tend to own Tesla,

33:11

micro strategy, and funny enough, like uranium.

33:13

I see my own clientele, we're well,

33:15

men in this. I talked to my

33:17

clients, and it's an unusual correlation with

33:20

uranium. Well, why, it's a material, it's

33:22

scarce. and it's linked to energy

33:24

literally, right? I mean, what's

33:26

Bitcoin? Chopin, what's uranium? Energy,

33:28

right. So I said on

33:31

that Bipsam-Dits podcast in December,

33:33

microstrandgy, may have hit its local top

33:35

as well, after we saw that right

33:37

shoulder break. That's the key with Bubbles.

33:39

It's best to just wait for the

33:41

right shoulder. Don't just wait for the

33:44

right shoulder. Don't try to get ahead

33:46

of it. Enjoy. So I think overall

33:48

animal spirits and quality bubble aren't probably

33:50

going to be leaking the next couple

33:52

of months and you're going to have

33:54

more rotation to value. You know if

33:56

you look at like gross stocks versus

33:58

value stocks, gross stocks. are like two

34:00

standard deviations where they're norm right

34:02

now. But meanwhile, if you compare

34:05

like meta and video and Google,

34:07

they're cheaper than these other stocks

34:09

out there, like manga DB or

34:11

team or snowflake, these software stocks,

34:13

they're far more expensive, and they

34:15

don't have the same dominant

34:17

competitive advantages as these hyperscalers,

34:20

which are monopolies and can influence

34:22

government and hang out with Trump at

34:24

moral logger whenever they want, right?

34:26

So meaning it's not like a single.

34:28

driving all of that up. So the

34:31

question is, when that group isn't

34:33

seeing P&L gains, or worse, or

34:35

seeing P&L declines, they're going to

34:37

pull back on their other assets too, because

34:39

some of them are margin 11 long.

34:41

That's what caused these markets to, because

34:44

these markets to correlate to, because when

34:46

they get hit on one asset, they're

34:48

a risk original one go up. If

34:50

they're going to hit on microstriders

34:52

down 30%, they're more sensitive to

34:54

losses than other assets that are

34:57

correlated and similar. And then that has

34:59

another effect on to the initial asset and

35:01

so forth and so forth. So you need

35:03

new inflows from like sovereign wealth funds, which

35:05

may well happen. I think Dubai, I think

35:07

maybe Saudi Arabia, I think the UAE, I

35:10

think there are sovereigns looking at Bitcoin Bell,

35:12

which is all good news. It's the question

35:14

of tiny. Can they show up facts? Right?

35:16

And they're not typically FOMo chasers, these

35:18

wealth funds. Oh well, I guess it

35:20

depends, really. Because they're all human. Yeah,

35:22

it takes time to get these reruns

35:25

in place and the purchase orders in

35:27

place and figure it out and all

35:29

that. I hope that in the next

35:31

couple months we'll have some favorable entry

35:33

up. Sure, that might be wrong. That's

35:36

fine. We got in Q1 of 23. We've

35:38

had a nice run. It's about a

35:40

nice run. It's about discipline, right? 100.

35:42

100%. You explained your strategy so well.

35:44

It makes a lot of sense and

35:46

it's been working. And what type of

35:48

work do you do you do you

35:50

do with your clients? Many of them

35:53

are exited founders and two-thirds of

35:55

them are cryptonators that creating material

35:57

wealth and digital assets. So I

35:59

first claimed... made a billion dollars

36:01

on digital currency. It's wild. This

36:03

guy is kind of incredible. Listen

36:05

Puerto Rico, very humble guy, married

36:07

with kid, and just a wonderful,

36:10

wonderful human being. Another client who

36:12

in the mid-forties, multi-generational

36:15

lumber family with significant wealth.

36:17

And we actually don't invest

36:19

in crypto. We're doing public equities

36:21

and other things and deals like

36:23

corweave with him. One day, I was like,

36:26

how did you find out about it? He said,

36:28

oh. You were talking about Solana one

36:30

day and I won some

36:32

Solana one hour. Wow, that's cool.

36:34

So it's a four thinking crowds,

36:37

a non-consensus crowd, an

36:39

original thinking crowd. You know,

36:41

you would track which around

36:44

the world. They're fascinating

36:46

people. We learn from them too.

36:48

We learn from our clients all

36:50

the time because they have areas

36:53

of expertise. They created

36:55

wealth and they want to.

36:57

Be part of what are the major

36:59

trends? That's fascinating. And obviously you

37:01

cover a breadth of investment opportunities

37:03

ranging from equities. One of the

37:05

things I really like is to

37:07

have a view on any one

37:09

sector, you kind of have to

37:11

have to have the whole sector.

37:13

You kind of have to have

37:15

the whole picture. Exactly right. I

37:17

mean, isn't that obvious? You just

37:19

said it. That's exactly right. How

37:21

can you not? If you're being

37:23

a fiduciary, like we're talking about

37:25

Bitcoin, then what? Sometimes I find

37:27

that I show the overlapping global

37:30

liquidity chart with Bitcoin and people are like,

37:32

oh my God, they're watching this chart for

37:34

the first time and it feels to me

37:36

like, you have been driving without the lights

37:38

on for that love. All markets are related

37:40

to one of those. So it's very important

37:42

to understand the ebbs and the flows and

37:44

trends take years to play out. The master of

37:46

this is Stanley Druckenmiller, of course. He is

37:48

a genius. I would say that's who I'm

37:50

trying to emulate as best I possibly can,

37:53

but I think he has the right idea.

37:55

You got to look across asset classes. Sometimes

37:57

equities are the moves, sometimes crypto, sometimes bills,

37:59

sometimes bonds. you have to look at the

38:01

broad picture. 100%. I used to think bonds

38:03

were the most boring thing on the planet.

38:06

Now I actually think they are the easiest

38:08

things to understand and follow because the government,

38:10

they are the only one where the main

38:12

issuer has openly stated policy goals that they

38:15

can't go against. And it's almost like you're

38:17

playing against a deck of cards that's

38:19

laid versus you're playing against someone that's holding

38:21

the cards here. It's not perfect, but

38:23

it makes your life much easier as an

38:25

investor because you know their constraints, you

38:27

know what they've promised, and you look at

38:30

the same data. So it's super interesting

38:32

for me to watch bonds now. I find

38:34

them very interesting, which makes me sound

38:36

probably like a finance nerd, but it's fascinating.

38:38

I think as an investor you have to

38:40

understand. these interplays and many times that's why

38:43

people that are so busy in their

38:45

business and have a portfolio to manage

38:47

look into people like yourselves because that's

38:49

your full-time job is to really gauge

38:51

where this is at. If you want

38:53

to excel it takes dedication and focus.

38:55

Equities and crypto about psychology and stories

38:57

and bonds are about cash flows, credit,

38:59

under writing, timing. So it is a

39:01

different kind of analytical skill, but it's

39:03

a foundation of other markets. You need

39:05

a well-function bond market. The risk-free rate,

39:07

right that we all go by. That

39:09

we all go by. Ram, where can our

39:11

listeners learn more about you and

39:13

Lumida? We have a newsletter, which

39:16

you reference called Lumida Ledger.

39:18

Lumida is called Lumida L-U-M-I-D-A.

39:20

Our website is Lumida wealth.com.

39:22

I'm also on Twitter at

39:24

Ram Alawalia, R-A-M-A-H-L-I-I-A-M on LinkedIn.

39:27

Lumida is a company founded

39:29

and we're Lumida

39:32

is a company founded and a

39:34

process of class investor folks time. Exitive

39:37

founders, script donatives, builders really. Yeah,

39:39

we're creating content and doing more

39:41

curations and really building a community.

39:43

We've got a public telegram. We've

39:45

got a great vibe in there. I love the

39:48

vibe in there. We're talking about markets and age

39:50

and all longevity. It's fun. I'll have to join

39:52

the telegram group. I follow you on Twitter. I

39:54

just subscribed last night. By the way, for anyone

39:56

listening, it's free alpha. Like go follow RAM. Go

39:58

sign up to the newsletter. Man, I hope we could

40:00

do this again in a little bit and see how your

40:02

views play out and how the parabolas that were in play

40:05

out in the administration changes. We won't have a shortage of

40:07

things to talk about, I think, for the next little while.

40:09

So we're all, look, I'm optimistic about the future. We're getting

40:11

a real innovation, a real rough, never even better to be

40:13

human being. And it's an exciting, wonderful time. Thank you so

40:15

much for stopping by and making the time to join us.

40:17

I look forward to our look forward to our next chat.

40:19

I look forward to our next chat. I look forward to

40:21

our next chat. I look forward to our next chat. I

40:23

look forward to our next chat. As

40:26

RAM very eloquently described, all financial markets

40:28

are interconnected. As a professional investor, it's

40:30

very important to understand these interdependent dynamics.

40:33

Doing so can help you assess where

40:35

in the market cycle we are and

40:37

what could be up next. One of

40:39

my favorite points he made was this

40:42

idea of peak sentiment in the markets,

40:44

and why he takes a defensive approach

40:46

when markets are euphoric. We all like

40:49

to think of markets as these rational

40:51

organisms that perfectly price in all known

40:53

information. But the reality is that markets

40:56

are made up of humans. And the

40:58

way we make decisions varies greatly as

41:00

our circumstances change. This is why you

41:02

may have seen people overspent when they

41:05

get into some new money or tighten

41:07

their belts when they experience a loss.

41:09

The same happens at a macro level.

41:12

I really encourage all of you to

41:14

check out RAM's content on X and

41:16

to subscribe to his free newsletter free

41:19

newsletter. It's a great source of market

41:21

insights and always a good checkpoint to

41:23

see where your views on the market

41:26

are compared to those of a professional.

41:28

Thanks again and we'll be back soon

41:30

with another great guest. If

41:44

you enjoyed this because of Bitcoin episode, I would be

41:46

very grateful for the five seconds it would take you

41:48

to drop us a review and give us a rating

41:50

on your favorite podcasting platform. This will really help us

41:53

reach even more listeners. And if you'd like to learn

41:55

more about Bitcoin, be sure to check out our newsletter

41:57

by subscribing at LED. and that I.O. Let's let in

41:59

that I.O. Again this was this was

42:01

Mauricio Lomeo stay tuned for our

42:04

next episode and until then,

42:06

muchas gracias I los quiero mucho,

42:08

Los Quero. Chaucho.