The Tipping Point: Markets Are Disconnected From Reality | Grant Williams & Peter Atwater

Peter and Grant welcome to the show thanks b hey b Peta, it's good to see you mate, also listeners, we have two of my favorite writers on the show for reasons I'll detail here in a moment, but Peter, I was thinking about you last night because I was rereading your book and I think once you read your book it's like one of those books where it's hard to look at the world through the same lens, it keeps popping up in your head when you think about these things thinking about trust, we talked a lot about cinnamon in the show, but there are two comments and I'll let you take this one, the first is when people think about confidence, they often think about self-esteem, but often it comes down to vulnerability.

I think my wife would like that word more than I do when Actually, it's about stocks in the financial

markets

. I made a mistake? Sounds good? Just a little overview of what I'm talking about. Yes, I think you got it right. Yes, we think that trust is something internal. How do I feel about myself? skills and everything else and it has everything to do with the outside world. If Co showed us anything, it's that self-esteem doesn't matter when there's a pandemic, but what I had to discover was that confidence is about having certainty and control. what is the opposite and finally I decided on vulnerability, that when we are vulnerable we have neither certainty nor control, we feel helpless, things feel strange and, for me, market behavior is driven much more by those feelings of vulnerability that necessarily by trust, although we can look. in the

markets

today and there are a lot of places where overconfidence is showing up, but vulnerability becomes a really useful tool, particularly when people start to get scared because you can really start to see what they are doing as a reflection of the vulnerability that they are Feeling that there are a lot of things happening in the markets with sentiment right now and I don't know, vulnerability is the emotion that I would think of when I look today at some of the things that are going straight to the moon with Bitcoin and others that record this one day before leap year. at the end of February and by the way I skipped over how you two know each other, did you meet in the real world?

Is there like a support group for people who don't own Tesla now? Peter and I met eight, nine years ago. I probably guess so, back in your Real Vision days, that's true, a long time ago. I think Steph pomboy was a mutual acquaintance and she had a couple of other people too. Yes, I discovered that Grant is the Kevin Bacon of this whole finance social media world. he knows everyone, not Foot Loose Kevin Bacon, unfortunately Grant definitely has the most luxurious voice on the podcast. Oh, don't listen while Jesse Felder still lives, breathes, and walks among us.

No way, I won't accept that, but I remember very clearly a presentation that you named. of something was like the land of Animation, there is no world of Pure Imagination, thanks, we will see if we can find a show, not a link, but also a great host, but the beauty of Grant is that you get things like if you read his newsletter and you learn things like this. The first time I see a reference to the law for easier recovery of debts on Her Majesty's plantations and colonies in America. British Parliament 1732, how can you find something like that?

I don't know, I'm a I'm a voracious reader and I'm curious, so I think every time I try to put one of these pieces together, I start with an idea of ​​what I'm going to write about whether it's about Elon or whether it's about goods commercial roots or Japan or whatever. I start researching what's happening now and the historical parallels are really helpful to people and Peter has written about this as well. If we understand history, we can sometimes make sense of it and contextualize the present, so I often try to use that. as a way to show people, look, this has happened before, it's not the same, but it happened before, there's nothing new under the sun and this is what happened last time, this is how it's different and it's always different, but as we all know, The echoes are very similar every time and you know Peter's work for me has reached your previous

point

.

M has been absolutely invaluable and once you listen to Peter and read Peter and look at the world through his lens, it completely changes, I think Peter and Ben Hunt, both, the four quadrant map that Peter has and the line of Ben Hunt on why I'm reading this now, those two simple things if you just accept them and take your time when you read the headline in all caps, if you just take your time. and you ask yourself those two questions: about conference or vulnerability? and why am I reading this now? I have felt that it has dramatically improved my own process.

Both, where do you want to intervene right now? I have about seven songs. What I would like to talk about, I mean, we have Bitcoin ripping and roaring. Today we have Elon talking about a car that can go from 0 to 60 in less than a second and that's the least interesting thing about the car, which might be the most interesting tweet. I've seen all year what's burning in your brains, where do you want to go deeper? They planted the seed with Grant over Elon, so I think we need his opinion. I wrote an article recently about Elon and have covered Elon for a long time.

From time to time this will probably come back and Peter and I have talked at length about this over the years. People think I hate Elon, but I think there's a lot involved in his rise and what I suspect will be his eventual demise because it encapsulates fomo and technology and greenery and celebrity arrogance and power, every little kind of facet of our era is somehow involved with Elon and how we've seen him become this moonshot in terms of his audience. visibility and the adoration that he's had from everyone and the way that his star was on the rise, it's been really interesting to watch how that started to spin and spin, I guess, around Twitter and its turn to the right, but now it's you can see that flourishing is out of place for many people who are again taking a step back and not just taking his word and this was the thrust of my most recent article about him and they are starting to question and when you start to question some of The things that Elon has said over the years start to take on a very different perspective and that again plays into the idea that we just read the headlines, we're too busy to read the article, now we see the headlines.

Elon Musk says less than a second roast. and no one sits back and thinks well, okay, let's think for a second if that's actually possible in a street legal car, because as soon as you take that second, you think there's no way that's strictly street legal. same way. From the other things you've talked about about the specs of the Tesla semi, the mileage is impossible with the type of battery weight you would need, for example, I think it's worth focusing on Elon because I think it will be the type of store campaign. peg in this circus we're watching wrap around us and when Peg's tent falls, the whole tent comes down so I'm not obsessed with him.

I find it a fascinating case study. I don't believe in hype, but more importantly. to me he is a beacon of the upward trajectory and I suspect that when he peaks a lot of things, Peak and Peter please step in because I know they know how to talk about this and they are much more of a helper than I am, yeah I mean. He is in the center of the diagram you see of everything that is great in this cycle. We said you know add crypto and space and all these things and I think it's a master of illusion when you talk about someone who is extraordinary with a narrative of possibility and we fall for that when the confidence is really high and we accept it and exaggerate it.

You can see echoes of this in AI today, but to me there is another element to this and this is going to upset people and I say this not to get into politics but throughout his existence he has been called the Donald Trump of Silicon Valley in the same way that Trump was called the Elon Musk of Washington, those are the words of other people, not mine, but I think those connections are very critical when we think about what is to come because culturally their careers reflect each other very well. , so I expect that the EB and flow for both will probably move in parallel.

Peter, you talk a lot about using some tools for feeling. In checks like the Google search, you talk a lot about KN gas, so I would love to know a little bit about why you are so obsessed with this particular energy product, but also why and how you work in some of these checks and sentiment analysis. what do you use, yeah, so 2021 for me was about futuristic abstraction, fantasy, it was this wild world of possibilities and that to me is always an indicator of foam because that's what we embrace, we get as far away from

reality

as possible.

I started to see it as a retreat, what for me distinguishes 2024 from 2021 is that in 2021 everyone was betting on the unborn folds, the LG engines, these packages, these things that didn't exist yet, but if you look at 2024, It's about thoroughness. breits is the biggest proven horse you know in the Microsoft Apple Google stable and, interestingly, to me, he is a less confident investor than in 2021, even though cap-weighted indices have reached new highs and even within cryptocurrencies , where is the excitement in Bitcoin? In any of the currencies we talk about endlessly in 2021, he had a great quote.

Spikes are a process in which confidence is tested again and again before investors can finally see that they were suffering from a deception of hope. Do you see any of that today? CU, you wrote this article about Nvidia and Nat gas and I think Nvidia and Nat gas have continued to go even further, yes it's a parochial exchange from hell if you were missing Nidan, long natural gas, you would leave on a stretcher, but Nvidia for me , it's all about the possibility of abstraction, this is future-oriented, but look at the commodity space, no one wants the real thing: corn, wheat, natural gas, the only interesting thing is cocoa, but that's because many other reasons.

I see the underlying aspects in that trade. Investors said that no one is worried about abundance in the real world at a time when they are focused on extraordinary abstraction in this nether world of AI and I think there is a reconciliation coming, which you both have talked about and alluded to while Talking a little bit about this abstraction and the real world, about two different experiences that people are having, so whether Peter, you talk about doing Google searches for food banks near me, which means that there are people Despite all the boom and despite everything that's going on, they are having a big The rise in food insecurity and costs Wendy's was a big topic in the news this week, but the cost of food and Grant too They've written about this where you have these different experiences depending on where you stand on the socioeconomic scale, less about maybe class and more about how much money you have, how that starts to change.

I think we have had two very divergent experiences that emerged from the joint experience, those at the top were saved and then some markets reached new highs, those at the bottom. They continue to fall far behind and I think that when we start talking about inflation what we are really talking about is vulnerability, what matters is the psychology of inflation, not its economics, it is the stories, it is the feelings and, therefore, the fact that people feel like No matter how bad they are about food prices, what Paul Krugman writes about it, there's a great Washington Post article about Heather Long, people are angry today, and if You think they're angry in the US, imagine the worries if you have a collapsing currency and all of these dollar-denominated commodities are paying a real price.

I am worried about Nigeria. I am worried about Türkiye. I am worried about Argentina. I think we'll see the consequences of compensation where inputs are denominated in someone else's money. As inflation hits first right now, the United States has largely saved because energy prices at the pump have gone down, but if you start to see prices at the pump go up, it will move further and moaning one of the cycles that we see not only in the markets. but in society there is trust and this type of cycle of trust is fundamental for the functioning of society, the functioning of markets, politics that works, everything is based on trust and knowledge, more than on money, and I'm sure we'll address that at some

point

. this conversation but this cycle of trust you can see everywhere that the trust that people have placed has been broken everywhere, whether it is inflation and the trust component of this inflation scare is that you have been telling me for years inflation was only 2% and suddenly I don't believe you anymore because you still tell me it's three, but I know it's 10 in my world or 20 if I look at my health insurance on my school fees and that trust has now been shattered. gone.

The Trump years caused a tear in trust, the Biden years theThey have expanded further, but this is repeated over and over again over time and, unfortunately, to rebuild that trust it takes a tremendously long time and B, it usually takes a complete breakdown of trust. and Neil has written extensively about this in his fantastic books, the full twist is here, so these are just things that happen in the 90s that you were perfectly free to trust because it was all a great, balanced budget, if you can remember what they were, look them up on Google. if you're too young to remember, we had rising markets, we had low debt, there were plenty of reasons to trust that everything was going well after 2000, trust moved further from

reality

and trust was placed in people, regulators , politicians, Eons of the world people put their trust in them. and now we are starting to see that that trust is also misplaced, so I think it is important to understand the nature of trust and what it does to a society and to markets that work and what happens when it starts to unravel and I think we're seeing that now and I think Bitcoin is a great representation of that loss of confidence, as is the price of gold, as is the purchase of gold by the central bank, it's all about confidence in the United States not to weaponize the dollar, so everywhere you look you see signs that confidence is breaking down and that's a real problem for the markets, but I think the most important for the kinds of societies that we've all learned to live in over the last 30, 40, 50 years is one of the things that, when we think about trust, we have this strange situation where gold is near all-time highs in some currencies, the same goes for Bitcoin, but at the same time, the US dollar remains there for us now on most quantitative measures, it seems quite overvalued compared to certain currencies like Japan in particular were there on a basis of parody of purchasing power, but it's been there, how do you guys think about that?

Grant, I know you've talked at length about gold in particular and also about Bitcoin, those are things to think about. about in this environment I am bullish in general what is your outlook it is interesting that you use the term bullish that adjective to me depends entirely on the problem you are trying to solve or if you are speculating on these things. bullish is such a speculative thing For me, in the short term, let's start with gold first because we've all seen the Central Bank buying numbers and that goes back to what the Treasury did in terms of freezing the assets of the Russian Central Bank of the Russian Central Bank when they invaded Ukraine and basically said, Every central bank in the world, if you keep your reserves in dollars, this could happen to you, and whether you're friends or enemies right now, you need to have a plan for what could happen if We cross a line or we don't sign. until an invasion or we refuse to sanction someone, we need a plan B and that plan B must be a neutral reserve asset and gold offers that, so you have this on the one hand, it is the solution to the problem of how to maintain your reserves and I think for a lot of people I include myself in terms of personal finance, that's what gold provides, it provides a means to store your wealth in a way that is protected from confiscation by debasement and the price will do what the price will do and Over time it should allow you to buy the same amount of things you can now and that's a really good way to store your wealth.

This was one of the narratives about Bitcoin and it's funny that I recently had a long conversation about Bitcoin. Don't do that because it's just not my thing and I apologize to the Bitcoin people. I do not hate you. I wish you all the luck in the world. It's just not my thing, but I posted a chart and in the conversation I spoke. We talked at length about gold with Natalie and if you listen to the conversation, what I said was that there is a graph that shows going back to 2001, which is when I started buying gold because of what the response was to the year 2000, it was clear that the basement of the currency was going to be the solution to future problems so I go back there and this is why I chose this time period and I understand that people can accuse me of choosing the time period, this is my personal window but if you go back to Gold 2201 has outperformed the S&P in terms of total return by 50%, you know, 600% to 400% or so, and it was fascinating to me to see that chart published in isolation without the context of the conversation and, of course, everyone joins in. you're choosing here, you're choosing the I went to Big Extension, I mean, here's why I choose this window and you could absolutely accuse me of that, but here's the reasoning behind it and I think we're at this place now where Bitcoin offers tremendous speculative returns. .

The store of value argument is coming back at the moment, but it's not really a store of value if you can go from 64 to 13 and back to 64. That's not a store of value, but we're starting to see the fomo going up again, so this idea of ​​protecting your purchasing power through Bitcoin has been left in the dust and now the number is going up again, which It's interesting because again, Peter, I'd love to hear your thoughts on this. again, that feels crazy to me, that's why, again, that feels crazy, that's a long round of rambling, frankly, I'm not even sure if it answers your question, but I think it's important for people to think about whether are If you are interested in gold or Bitcoin, what do you want from it?

If you want price appreciation, then at this point, all the risks involved. Bitcoin will probably do much better if you are a pure speculator, if you want to store value and keep buying. power I would say that, in my experience, gold is a much less risky way to go. We have Bitcoin ETFs, which now makes it even easier to speculate. You have new chips to play in the casino. What you are seeing now is again. that retail enthusiasm hits what inevitably happens near peaks and sentiment and is again abstract, for me it's all about possibilities, it's the perfect monetary complement to AI in the work I do.

I do not adopt fundamental views. I am agnostic above all. To the frustration of many of the people around me, I feel that it is a much more pleasant way to live life than what we do. I wonder, particularly with the dollar, if I look at the clear correlations that exist between stocks and bonds today, they both peaked. in terms of sentiment, moments apart, trillions of bonds with negative yields at the same time, you had that euphoria in 2021. I just think of the dollar as the tail that accompanies that very large two-headed dog because stocks and bonds feel like To me, the Siamese twins right now are moving as one and from a diversification standpoint it's a scary thought, but at the same time it leaves the dollar playing this offsetting role to what they're doing like someone who thinks about the feeling Peter and and sort of about that, what are you thinking about today?

This doesn't have to be about bonuses, you mentioned Nvidia n gas, what else is on your brain, what else have you been writing about recently that you think is particularly important in the luxury world generally speaking, there's a huge sports sales chart of luxury celebrities that I think is a single trade when it comes to food mov and what fascinates me about luxury is the reflexivity of it, the buyers of shares or the buyers of the product, it's like that. Incestuous financial turmoil of owners and customers and I think it's a wonderful representation of how those at the top feel and we've created this to borrow Nelson Schwarz's term, this Vel rope economy that feels completely decoupled from the reality of the world that surrounds her.

This and I struggle to see its future given how united the mood is between sports owners, money management owners, luxury owners and what happens to that at a time when reality sets in and no one can afford Taylor Swift tickets at $2,500 each. or Super Bowl tickets, has lost its connection to Main Street, what do you think is the type of game within that situation and trend? I think overcapacity, I mean overservicing, if you go to New York City and look at the amount of real estate dedicated to luxury, if you just look at the debt levels, I mean, it's surprising to me if we We go back to the bottom of the financial crisis.

JP Morgan had about three times as many private bank loans on credit cards, so it was like a three to 1 ratio. Current ratio JP Morgan I think now has more outstanding private bank loans than credit card debt, the that are at the top for me have been over served in everything and I don't think people focus on the dead element that has fueled that, I think. mascot, when you talk about luxury, luxury was always about scarcity and luxury has become anything but scarcity, everyone feels entitled to their Balenciaga bag, etc., etc., and I think if we go back to the era, I guess it would be the late 90s or early 2000s and The story of Berber is really illustrative of this suburb, it was a very exclusive brand in the UK, it had that distinctive brown tartan check and suddenly it became a kind of affordable luxury.

People couldn't afford the Rainco because they were too expensive, but they would buy anything with a little brown tartan pattern on it and Berbery decided to restructure and make the luxury of the Berbery available to as many people as possible and they brought out a lot of stuff. and suddenly everyone was wearing Berbery and there was a famous photograph of a girl who was an actress. in a British soap opera like a soap opera of the days of their lives pushing their Berbery stroller with their Berbery baseball cap and Burberry rainco leggings from Burberry and a baby dressed in a Burberry outfit and that was it, poof and everything related to that luxury brand had jumped. the shark and had become a laughing stock and became a sign of nness as we call it in the UK it's not fancy anymore oh my god you're using burry oh god and it's so fascinating look what you're talking about this idea that luxury is deserved by everyone and we all deserve luxury and when you start to see signs of that tip that everyone buys the Tiffany blue box just when you start to see that become everyday, it is no longer scarce, it is no longer luxurious, something I've been eyeing. very closely with this in the UK, particularly just because I noticed it when I was a kid, there were luxury cars when I was a kid in the UK, if you saw a past Mercedes Drive it was like, oh Mercedes, look at that the same way. today it's Lamborghinis, it was Mercedes back then, you come back to the UK and now one in every two cars is an Audi BMW Mercedes.

And if you look at what happened to car finance rates and then do a little research, you'll see that the percentage of new cars financed in the UK fluctuates between the middle 80% and low 90%. So this idea that I'm going to drive a luxury car because I can afford the monthly payments and I'm just using the UK as a For example, because it was very noticeable for me there, it's the same in the US, same everywhere in the US, it's just the big trucks, yes exactly, and at some point BMW, Mercedes and Audi sales are going to increase I suspect. what Burb did and people will no longer be able to afford a BMW, they are not going to afford a new car every three years because the payments are not working and that is why this idea that Peter talks about about luxury is why it is very important to pay attention. to these little things that Peter is so good at noticing because they are absolutely comatose canaries.

I mean the fact that the boss of lvmh was the richest man in the world recently, that's a sign that you just can. Don't ignore the 1% by definition, he is catering to the 1%. How can you become so rich? Yes, talking about the UK. Grant, what are the boots on the ground? Check out this has been a stock market for so long. It has been neck and neck with the U.S. There has been a huge divergence in strength over the past cycle. I remember visiting during Brexit and everyone seemed very D even in the pubs, but recently our good friend Quant, Rob or not, was saying UK stocks.

It could be the deal of the decade, so I say there's some opportunity, there's some takes, maybe some general idea about what's happening across the pond. I don't follow it too closely so I won't talk about anything specific because I don't have the weight to back it up, but from a boots on the ground perspective the UK has been through a lot of political and social upheaval, Brexit was a perfect example and when you went to the UK and everyone was so D, I suspect you were in London all the time and it's funny because the feeling when you go to certain parts of the UK is anything but that people are delighted to have back to their country, so again this idea that Brexit was a silly idea that needs to be debated and it's time to say whether that's the case or not and we had asmall period of time where people who voted yes were gloating because the UK was doing better.

We've had a period of time where the UK isn't doing so well and people saying we should never leave the EU, but that's going to continue and Europe is changing too, so we're going to have to wait and see to get the full scorecard there are some phenomenal companies in the UK, there's no doubt about that. and as you said, it's a stock market that's been there forever, so given that it's fallen so far behind, there are definitely opportunities in the UK, but I think the important thing to understand here is that this comes back to another trend I've been looking at and again, Peter, I'd love to hear your thoughts on the idea of ​​having to do less to be more successful.

That is, we talked about the Bitcoin ETF. It would be easy at this part of our conversation to say: "Oh, the UK is cheap." I'm going to buy the UK and that's where we've come to, we buy these abstract ideas, we buy countries, we used to buy companies, we used to buy a share in a company and now we buy shares and the difference in mentality for that is extraordinary because if you're buying a stock, you just own a number and you buy it because it's going to go up, you haven't done the work to understand the business, you haven't gone into it feeling like an owner of a series of cash flows, which is what it was all about this and change your way of thinking, you are not a long term holder, we have seen the average holding time data, we have all seen how it is created.

Over the last 20 years, again, this is a real shift in mindset that I suspect is happening to start going the other way, meaning if you want to make money in UK shares you'll be able to make a lot of money on the stops. from the UK, but the trade-off is that you will have to go back to work. You're going to have to sit there and start looking at individual companies rather than buying the UK ETF if you want to outperform and to be honest I think that's great. I think it will bring back the talent of these extraordinary managers who I have been marginalized by the ETFs and the vanguards and the black rocks of the world and the idea that you make money by working hard.

I mean, what a great idea, right, what a great idea and again to Peter's point about luxury, it's the antithesis of it's not that we deserve to make money in the stock market, but that we're going to have to work to make money. in the stock market and that, to me, is what this will always come back to over time, when the froth and entitlement dissipates. I'm going to Dogpile this because if you invest in a UK ETF and look at what makes it up, you're not betting on the UK, you're betting on companies that are based in the UK, but it's not a UK bet.

In the same way as the French ETFs, I mean it's essentially a luxury ETF with very high drag. Couture drag, although Peter, yes, my drag, yes, an area that I think is interesting with cash flows. I think it would be interesting to hear them both talk. about this because, in my opinion, you are starting to see a change in the underlying attractiveness of companies and, see if you can guess what I mean, a change in the governance of this country in how CEOs approach their companies in stock, you're quite interesting to me to see a cultural relevance again.

I mean, last night I watched Shogun, which has a 100% rating on Rotten Tomatoes, you have the new Godzilla movie that got like a 97% on Rotten Tomatoes, I haven't seen it. however, in Japanese Tokyo Vice all this relevant Japanese culture comes to light, it suddenly starts to emerge again when this stock market has been a hamburger for 30 years. Grant, I know you've written about this, Peter, I'd be curious to hear your thoughts. Thoughts on Japan as a market that is becoming relevant again lately. I started my career in Japan, so I'm biased and nostalgic about Japan because it says it's where I started my career a long time ago. the euphoric 80s or were you after the fact no no I started my career in the midnight of the 80s so you got the fun part too not only after I got all the fun I got all the fun I could handle during 20 or so years.

I'm telling you it was wild and I was living in Tokyo at the Peak and working there so I saw it up close and it's funny because you say it hasn't been any burger all this time and you're absolutely right except it's very quietly . it finally surpassed its 1989 peak and you're right, I hadn't thought about this but I just downloaded shun. I haven't seen it yet so you have to tell me if it's worth doing because I also read the reviews but hadn't. I thought again about Japan's place in popular culture, but you're absolutely right. I see it now, but the change in Japan has been very real in terms of what they have done during this period when no one has really been looking at the corporate country. governance has improved dramatically balance sheets are in tremendous shape companies have had to slim down to survive and have been largely ignored and it has been a place where the story has been all about the bank of japan and the jgb markets and the yen really There has been attention paid to it in Japan and there has been this kind of quiet revolution in the stock market and again you are going back to researching companies instead of buying stocks.

There are now so many companies in Japan that are trading at or below book value or trading in single digits. urine I mean, if you're a stock picker, Japan is a great place to go now, this has been the case for the last few years, now it's broken all-time highs and it's absorbing all this attention, you'll see a lot of kinds of money coming in. late, so I would warn anyone not to accumulate it right now, but it is a place where you can really go and practice the art of investing. I mean, who would have thought that you can go and you can select companies?

You can find businesses that are world-class businesses that are cheap, I'm not just talking about cheap prices but also valuation, and that's a really good thing. Warren Buffett went to Japan a couple of years ago and bought the big five trading companies; He has done tremendously well with them. Many other investors have been nibbling on Japan in recent years and I've had some fantastic conversations with people over the last few years. CU I realized that I had been writing a lot about Japan, it wasn't something I even realized I was paying a lot more attention to, but when I realized, I've written a lot about Japan in the last few years, that tells me something and I start to dig deeper and it's a really interesting place for people to go, but Again, I would caution that buying the Wisdom Tree Japan Covered ETF is probably not the smartest thing to do, it's doing a little work and finding those great companies.

Yeah, just adding that we have Mark Zuckerberg, you know, making swords there, so your point about that. falling into the culture is absolutely fine what I think is interesting is the renewed respect for Toyota, this notion that the turtle versus the hair people are really appreciating this sense of certainty and control, to use my two favorite words, That Toyota is bringing discipline in different conditions would be considered a conspiracy, late and slow, but I think it speaks to how the rose is blooming in the EV space and its Prudence is now being rewarded, recognized and praised in comparison. with the look, I have a new one.

What's happening in the electric vehicle space, I think it's a fun part of this show when we have two people: you guys can ask each other a question. I always have questions about how you get tired of them, yeah, while you sit down and have a beer or a coffee, what? Would you ask the other guy right now? I would say I have something for you or it could just be a general topic, but what do you want to talk about? I have one for Grant because you're a good interviewer. The question is. Today, who is the person you would love to have sitting on the couch in front of you and whom you could ask?

Oh boy, how can I limit that? There are so many pets, there are so many people. I would love to sit down and talk to one. of them I would go back to being my friend Tony Deeden every time I spend time talking to him. I leave with so much wisdom and so much more to think about, so I never turn down an opportunity. Can you tell the audience who he is? Well, nobody. I'll know who Tony is because that's how Tony wants it. He has an investment practice. I will choose my words carefully because he deserves to have a Zurich-based investment practice.

Well, he is based in Zurich. The companies say he calls it in Jersey. I think Tony is a very private man and will hate for me to talk about him, but I'll do it because he deserves all the plaudits and about six years ago I convinced him to do a real interview with me. in January 2018 and we sat down, spent several hours sitting and talking and ended up with a two and a half hour interview which was innovative at the time since we didn't publish anything more than an hour at most and we published this full video.

I had a big fight to post it in full because everyone said it's too long, no one will watch it for two and a half hours. I won that fight and we published it in its entirety. The response was just tremendous and it's still on YouTube and if anyone listening to this hasn't seen it, just Google my name and Tony Deen D Deen, it's there, I think it's had two and a half million views now, but it extraordinary and this really is the extraordinary thing about this conversation, you two know how garbage the comments section of a YouTube video is, it's not more than four or five comments before it turns into a white supremacy march or a slander fight against pronouns who knows these days.

It's crazy, but you could scroll through the comments on that conversation for a week and not find a negative comment about what people are hearing, and that's the beauty of talking to thoughtful people. Tony is always one of the people at the top of my list, but I have to say that after listening to Bill Acman I am very curious to spend some time talking to Bill because I had heard him talk about stocks before, but I had never seen him with a platform that was so broad and allowed you to really dig deep and I think that's really the key.

Peter is giving people time and space to talk about whatever they want to talk about, like I do if you give people time and space to talk about what's important to them versus what you. I want to ask you, you will often find extraordinary things buried there. Now you can rotate the microphone. I have two for you, Peter, because it's my nature. I'm afraid. Let me ask you both so I don't forget. The other one, when I get engrossed in your answer, the first one is about Trump and Biden and that's what the fact that we have two octogenarian candidates for president, what does it tell us about the cycle of trust and all that kind of stuff ?

And the second thing, going back to your point about Toyota, that I wanted to ask you while you were talking about it is that Toyota has very quietly moved forward with its business while all the attention has been on Elon and all the bats that are coming at them. Because they are yesterday's news and yesterday's media, they have simply continued to be a car company that has car sales margins and does all the things that car companies do. So what does that kind of resurgence in the court of public opinion mean for excessive valuations of things like Tesla, to your first question, I think the fact that we have two octogenarians speaks to a dramatic change ahead, that there is a generational shift that's about to happen across leadership and I think that's one of the things that people overlook when we go back and look. in the '60s and early '70s, which is where certainly, in Biden's case, his career was born and he was the youngster of a group of octogenarians at the time, so think of this as indicative of dramatic social change in which the baton will be.

Pass, taken or ruined, but there is a change of cycle here. I would also say that I'm not convinced that one of them maybe both won't be on the ballot in November. Pay attention to how we think about age. It takes a lot in terms of a

tipping

point to push people into the collective belief that the old is weak, unstable when trust is high. The old is worn out. Battle tested, we have a whole different set of adjectives we use to describe elders when trust is low. They are old and weak and that is both of our risks and then the question is who builds the vacuum cleaners and I will let others decide on the Toyota front.

I think this is a really significant shift in viewpoint and could have lasting implications. To me, it is something similar to what we are seeing in AI, where there is a preference for larger, more established companies because we see that they have greater capacity; The threat is that they don't have it, that they are as prone to unbridledness and excess as the rest. startups that surround them,but I think when it comes to Tesla, this is a really changing environment and we see that very often when the incumbent comes into play they overdo it and the older, quieter organization ends up making huge profits and I think we forget that the biggest Traction does not occur at the highs but at the lows, that is when the home field advantage moves dramatically, it is the one who picks up the pieces, Peter, you mentioned somewhere, one of the best electoral indicators is how the economy in general evolves and the perspective of the people who come to the elections and us.

Also talking about the stock market, it's like the three to six months leading up to the election tend to have a pretty huge impact. At what point do the parties in power start needing to start pushing this? Is it like June? What kind of delay are they? we need everyone to feel comfortable and at war. I think the Biden administration went overboard early with the Biden omics announcement. You only say that you draw people into your connection to the economy when you believe that the economy is working and that to me was One of the first warning signs of the economic problems ahead is when you embrace it intensely as president, so I think they're going to struggle, and I think since energy prices at the pump are probably the best indicator of real-time sentiment for Main Street, if we start to see gas prices go up, the headline has a big problem at hand, okay, you're in a group of your professional peers, so the three of us are at kman having a shot of rum or a coffee and we're with 10 other money managers or just professionals in our kind of sphere, what?

What is your belief that if you say this out loud, the majority of the table will shake their heads and say I don't agree with you at all? Your opinion doesn't matter Your point of view doesn't matter Ultimately your price is a function of what the crowd believes, wants, hates, loves and instead of focusing all your attention on what you think is right, dedicate much more attention to what they do. I want to know what the crowd around you is that you choose to get excited about and run away from because ultimately I think that's what's going to make you successful or bite you in the butt at the end of the day, that's what the crowd decides.

Okay, give it what you have, you know, a week ago my leading opinion would have been that the Fulams were going to beat Manchester United at Old Trafford, no one would have believed me then, but surely they have to believe me now and this is something which I've talked about periodically over the years, but I feel like there's a real moment here where these things are unloved and have disappointed so many people for so long that I just laugh. off the table and that is always a very good sign and they are the gold miners. I think gold mining stocks have become, I mean, they're so defeated that they're such a small part of the investment spectrum and if you mention them, people will laugh. you, but we've seen some pretty serious, pretty sophisticated, pretty experienced investors start to dip their toe into the gold mining space over the last few weeks and months and while you'll be heartbroken again, I think they're getting close to a point. where you can buy gold. mine stocks with money that you can afford to lose with your eyes closed and just keep it somewhere because if we end up with the kind of problems that we have been creating for ourselves for a long time both in the financial system and with the type of finances of the United States and others western democracies, gold is going to play a role again and the leverage in the mining companies, particularly from where they are going to start that particular cycle, is just crazy, there is no rush like a gold rush as they say and like I said well, They will still break your heart from now on.

I suspect that if you're smart about it and pick the right ones while I was laughing at that table, I think I can get a couple of phone calls later from people who, away from the crowd, might say, let's chat about this Peter while we look out over the horizon. so that in 2024, anything in particular you're writing about anything in particular, your students or just the people that your followers in general are confused and excited about. What keeps you up at night? What's in your brain as we look toward the Horizon? I'm really focused on the real world and what's happening to real people.

Real assets in real time. I think there is a huge disconnect between what people pay. attention on the investment space and what is happening in the world around them. I think there's too much attention being paid to left versus right rather than up and down, and I think the opportunity for cross-party fusion is amazing if you reconfigure this as an up versus down issue, it's not a left issue. versus right. Grant, give us a preview of the next issue. What are you working on in the next 50 pages? Any candidate so far I think they are going to talk to me about private credit.

I think this is something. which I've been looking at for a while and it's interesting, you know, I looked at commercial real estate a couple of months ago and it's been fascinating to see how that situation accelerated you to get back to your point about bonds that we talked about. confidence and trying to engage the bond market in what Peter does and it's pretty clear that the reason people didn't panic about those bonds was because we all knew the narrative was that it doesn't matter if your money is good or we won't do it. You have to mark them in Market so you don't panic and this is, of course, the narrative around private credit.

This is the feature, not the bug, is that you don't have to mark these things in Market, you can trust the marks. and of course that works very, very well in a bubbly and confident market, but once the trust disappears and people start to feel vulnerable, suddenly questions arise everywhere: are the grades good and that 75 marks is actually the midpoint of the market price of 5882? I think I'm interested in digging into private credit over the next few weeks and looking at it because I think it's a real indicator of sentiment. One more question. One of my favorite questions we ask people is what their most memorable investment has been.

It doesn't have to be good, it's just the one etched in your brain that has an idea of ​​what it wants to talk about first, so I'll be embarrassed. The most memorable thing is a loss. You know, having short finances in March 2009 and if I attribute what I do today to anything that is trying to understand how and everyone could think the end of the world was coming, including me, the markets can go up and we learn more about our losses than our profits. I am proof of that, without a doubt, the funny thing. The thing is, that concept is even for a quantitative investor and trend follower like me, when you're in a position and it's working, so you're long Nvidia right now, you short your stuff, when it's going down, you don't really want the match to finish things are going in your favor and I remember one of the challenges that so many people in the world of trinfo, for example, try to make the transition from discretionary to rules based and have a very hard time, they receive signals, I mean, I remember originally as a REIT it would have been in 2007 because REITs were one of the first ones that started to accumulate and I remember thinking it was like man, it doesn't seem like it's time, but it seems like we have a lot of time to for this to happen maybe just wait a month maybe I would wait for the next sign these thoughts and doubts that come into your head and the same thing on the opposite side even when you start to see some of the signs and changes you are like that It doesn't seem like the end of the day turning point when you have a winning position it is always difficult, but hopefully you cut them off for a while and then they broke your face.

Hopefully you didn't get the short in March, it was good for a long time and then very bad and then very bad, very bad what you just said M, that's what Peter is talking about in a nutshell, that's the book, right, Peter, you have confidence and you don't have confidence and that's why you ignore the signs in each. The steering is crazy, we all do it every time, it was like a hard square from right to bottom left, like a straight teleport. Every time I think about it, for me again it's pretty easy and that would be my investment in real Vision when we started.

I learned so much over the course of that journey during those four or five years that I did, I met so many great people and learned an incredible amount, it was like I hated using the drink of a fire and the energy, but it's perfectly appropriate in this case, so for me, in terms of investing in my own education, my own improvement, what I do and how I understand the world around me, nothing comes close today for me, whatever you do, listeners subscribe and if you you do. Whatever you do, don't go for the interview with me because in real Vision I had been running in the Cayman before doing the interview and for the life of me I couldn't cool down and I sweated like you've never seen anyone sweat, I mean.

Talking about emerging markets is not something that normally makes me sweat, but it's a pretty disgusting video, so if you listen to it, cut the video, listen, hey, it says nothing, believe me, like a guy who talks about finances and is sweating profusely, gentlemen. I'm going to take a breath. I didn't even get to my notes. Where can we find out? Stay up to date with what they are doing. The best places. Grant you first easy Grant

williams

.com and on Twitter TTM ygh, which is the acronym for things I make you go Peter Atwater at

peter

w water.com and you can find me at _ Atwater on Twitter gentlemen, it's been a whirlwind, it's been a blast catch up with you guys, thank you so much for joining us today, thank you, thank you, I really enjoyed it, Peter. great to see you friend