Financial Expert: "Owning 5 Tech Stocks Isn't A Portfolio" | Ep. 447 with Christopher Zook Chairman & Chief Investment Officer of CAZ Investments

0:00I'm totally diversified. I own five of the Magnificent Seven stocks. 30 years on Wall Street, Lehman Oppenheimer Prudential. Now he runs Kaz Investments, the largest GP stakes investor on the planet, owns pieces of over 30 pro sports teams, and wrote a number one New York Times bestseller with Tony Robbins. This is Christopher Zook. every company over$100 million. 85 % of them are private. Only 15 % of them are public. There's a reason why most multibillionaires are involved in some fashion in sports. Let's talk about the price of success for you. The price for sure has been...

0:50You've done some extraordinary things in your life, And I can't wait to dive into your journey of how you got here, because back in 1991, I read that you watched a Tony Robbins video series and you wrote down a vision. What did you write down on that vision? Well, thank you for having me, Daniel. I'm glad to be here. It really is a surreal event because the fact it was late at night. I came home from a long, long day. I was trying to eat some dinner, watching some TV just to relax a little bit. And I look on TV and I see this very large human being with big hair and big teeth. And that was Tony Robbins.

1:31And I liked what I heard. And so I ordered his tape series. And so Lisa, my wife and I, we actually listened to this 30-day series on cassette tapes. For those that actually remember cassette tapes, they really did exist. Cassette tapes. and one of the days during that 30-day process is you do a goal-setting workshop. And during that goal-setting workshop, you set one, three, five, 10-year goals and I set a 10-year goal to have a firm by the name of Kaz Investments by the time that 10 years was up and that it would specifically, and to be very intentional about what you asked me in the question, it said to start a firm named Kaz Investments that is one of the leading alternative investment firms on the planet.

2:15That is what I wrote down. That's what I sought to do. And then basically for the next nine years and nine months, I did everything I could to prepare myself to achieve that objective. So knowing that Tony is now your co-author, shareholder, partner, how does that feel? It's fantastic. It really is. I mean, you know, I've said this many, many places other than my faith, my wife, and there's nobody on the planet that's had more of an impact on my life than Tony Robbins. And so, you know, for, for him to be not only, you know, a partner, not only a coauthor, but most importantly, a friend and somebody that I consider to be, you know, a valued part of my ecosystem and what makes me who I am.

2:59It's really just a, it's a surreal and fantastic feeling to see that happen, uh, over, you know, literally now a 34, 35 year period of time. By the way, people always ask me if I'm related and it's not because of how I look. I'm much shorter. However, I have the same last name. So they always say, and I also wrote a book and they think the book I wrote is written by Tony Robbins because we have the same last name. So I always say that he's like my pretend uncle. Before you jumped and went onto your own and became an entrepreneur, you were at some of the big firms like Oppenheimer, Lehman, which fascinating story there, I imagine.

3:38What made you want to take the leap? Yeah, I was at Lehman a full decade and a half before the global financial crisis. So it was a very, very, very different situation when I was there from 91 to 94. When I chose to leave Oppenheimer to start the firm, it was really, it was all part of the plan. It was always by design. One of the advantages, and Tony teaches this all the time, of having a definitive deadline to the dream, if you will. That's a dream with a deadline, a goal. That's what it is. It's a dream with a deadline. By having the deadline every step of the way, was to prepare me for that.

4:15So it was really not like this, you know, oh, I wonder if now is the right time. It's like, well, I decided this was the right time. So therefore I'm going to go do this. Now, obviously, if it had not been the right time, if I'd not been ready, prepared mentally, and, you know, from a business perspective, ready to go, then I could have delayed. But I'm a pretty goal oriented person. And when I decide that I'm going to do something, I usually going to do it and I'm going to do it in the timeline in which I say that I'm going to do it. So it was terrifying. I mean, make no mistake, it was petrifying.

4:46But as a person of faith, knowing that this is what I felt called to do, this is what I felt led to do, ultimately, we've approached this as a business. What's the worst case scenario? If you can live with that, the upside will take care of itself. That's the way I've invested for literally 36 years now. In that situation, what was the worst case scenario? If I started the firm, it didn't work, well, then I'd have to go get another job. And I knew I could do that and it would suck. And I would hate to do that. And I would do anything to make sure that didn't happen. But if that's the worst case and I can live with that, then the upside takes care of itself.

5:20And fortunately, I've been very blessed and we've built a really fun business. What if I was to say that I think manifesting is BS? What if I say I don't really believe in that? So I don't either. And this is the way I would look at it is manifesting something, you know, is in its core, just becoming really what we want to become and saying, okay, this is my intentionality and I'm going to work towards it. But just saying, I'm just going to do this and all of a sudden it's going to happen. I don't believe in that. I believe that somebody can create a plan and could create very much intentional steps to achieve that plan.

5:57is it always going to work out exactly the way it's visioned? Of course not. This is life. Life doesn't work that way. But at the same time, if you don't know where you're going, any road's going to get you there. And as the old saying goes, if you don't have a target to hit, you're not going to hit the target. So I do believe incredibly, it's incredibly important to say, this is what I'm going to achieve. This is how I believe that I'm going to achieve it. But then also be able to say it's going to take a lot of work. It's going to take a lot of intentionality. It's going to take a lot of effort.

6:31It's going to be bloody and bruising along the way in order to achieve it. But that's big enough and a big enough why that you're going to do it. And to quote Tony again, the bigger the why, the more we try. It's not the what we want to achieve. It's why we want to achieve it and what it's going to be able to do for us, for others, for our family, for our nation, whatever it may be. And if we have that intentionality of this is why this is mission critical, then we'll have the courage to do what we don't feel like doing when it gets hard. And so I don't believe in manifesting something. I absolutely believe in that if we're guided towards something or if we believe strongly in something, then you know what?

7:14Go get it and figure out how to achieve it. But it's going to take a lot of work. The big why reminds me of like the big, hairy, audacious goal. I don't know if you've heard rephrased, right? Mine is to impact a billion people, which we started like six and a half years ago. What is your big why? So we actually use the BHAG as part of our business. It's the key driver for our business. good to great big hair audacious goal for those that are not familiar with the book. It's a fantastic book. We have always had a BHAG for every year of the firm. We've had a BHAG. So many times it's a one year, sometimes it's a five year, sometimes it's 20 year.

7:52Right now, we're in the middle of what we consider to be the biggest BHAG ever, which is when we did the deal with Tony in May of 2021, we said we need to create a new big hair audacious goal. So from that point, we want to create$20 billion of profits for the investors in our funds over a 20-year period of time. And I love that specific goal because the fact that, for those of you who read the book, you know this, but you got to have something that unifies the entire organization. So for us, we got to make great investments. We have to have a lot of money in those great investments to be able to benefit from that.

8:29And then we got to have a great team that's making raving fans of all of those that invest with us so that they'll not only make new investments with us, but they'll tell all their friends, neighbors, and coworkers about why they should be investing with Kaz. So that big, hairy, audacious goal is the single driver for us. And we're five years in almost, actually a little over five years now. We're well on our way, but we have to stay focused and we have to be disciplined in order to achieve that. There's something I've come to realize, though, as I've gotten older, is ultra high net worth individuals.

9:03They know how the game is played. They know how to make money. They know how things work. And it's very hard to get there if you don't know. So what is it that they know that we should know? Oh, that's a that's about a four hour podcast. So I'll shorten it up and make it very concise. Number one, diversification is the only free lunch. They know that. There's the old saying that you concentrate to get rich and you diversify to stay rich. It's very, very true. There's a point of diversification, made up word, but it's true. You can be over diversified to where you don't really actually have a chance to outperform.

9:41But you're going to have a lot less risk and a lot less volatility the more diversification that you have. And that's actually becoming really, really hard these days. And again, I could literally talk for an hour on this and I won't. But the whole reason we wrote the book, The Holy Grail of Investing, is because of the fact that most people are much more correlated than they think. And I literally had a conversation with somebody about five months ago. They're like, I'm totally diversified. I own five of the magnificent seven stocks, right? No, you're correlated. If they go down 30, they're all going to go down 30.

10:13If one of them goes down, they're pretty much all going to go down because they're so correlated with each other. Great businesses, but the stocks themselves are going to be incredibly correlated. So diversification is the only free lunch. Number two, it's not so much about what you earn. It's about what you keep, right? So obviously taxes are a big part of that. They understand you need to be tax efficient. Also, you got to make sure that you spend the amount that makes sense relative to the amount that you make. Because we all know, you know, as people get wiser and see patterns, you know, lots of people that make a ton of money and they completely blow that money because the fact that they just have no discipline, you know, whether it be athletes or, you know, superstars of any type, we see it are lottery winners.

10:56We see it over and over and over again. So diversification is the only free lunch. You have to be sure that you can keep what you make and then ultimately do what you love and invest in what you enjoy, right? There's a lot of people that like, I'm going to invest in something. They don't actually know what it is. They don't know what it does. They don't know why they're investing in it. They don't have any rationale, but it seems like a popular hot thing to do. And then they ultimately have no staying power when it gets tough. I mean, one of the great things about Warren Buffett or some of the best investors of generations is they have one specific style.

11:30They understand their own emotional quotient, if you will, of what they're capable of doing when things are good, bad, or ugly. And it gives them staying power to not get pushed out of something that's really good simply because of short-term gyrations. And then the last thing that I would say is that making money is incredibly important, but it's what we do with that that matters. And being impactful and impacting a billion people over six years or, Tony, feeding a billion people a billion meals. You know, these are big time reasons to motivate somebody to not just, you know, ring the bell, hang it up and do nothing every day.

12:13It's to drive them to ongoing success. That's going to really make a difference in whatever it is that's important to them in the world, in the nation, in their state, in their community, and certainly, you know, in their family. So many times I got scared and I got out and then it went way back up. And then I'm like, I don't have the discipline for a lot of these. Bitcoin should have stayed in Bitcoin. I'm curious about private markets. What are they and why are they important? So private markets would just literally be the overly simplified definition is anything that's not publicly traded. So private markets are your home.

12:51It's a private asset. Technically, your car is a private asset. Now, you're not going to invest in a car typically unless you're a collector of some type. But, you know, most everybody understands the home analogy because either they lived in a home that was owned or they own their own home. OK, not everybody does, but certainly a lot of people do. So sticking with that analogy, you know, every single day that home is changing value. But you don't have to know that because it's not quoted in the Wall Street Journal or on a Bloomberg terminal. And it's a good thing because a lot of people, if they knew their home went down by 10 % last month, then they might be tempted to sell it or emotionally get attached to the volatility or be uncomfortable because of that volatility.

13:32But most people make good money in their home over time if they stay in it for any reasonable amount of duration because it typically is going to go up in value as long as somebody didn't overpay. Well, private assets literally can be simplified to that, but it could be anything from an apartment complex to a piece of land to office building to obviously things that are completely different asset classes like venture capital. You know, SpaceX has been all over the news. You know, we were early investors in Anduril and Chironic, which became very, very famous because they had the autonomous boat that saved the two pilots that were shot down in the Strait of Hormuz.

14:11You know, literally on a Thomas vehicle. We were autonomous vehicle. We were early investors in that company. But even going further to things like owning a stake of a private asset management firm, owning a stake of any kind of business that doesn't trade on a public exchange, buyout is a common term there. It doesn't always have to be a buyout where you have control. It could be literally just you're an investor in a growth company, again, like a SpaceX. You also have things like professional sports, where we're one of the largest in the world investing in professional sports or energy or infrastructure or healthcare.

14:47There's so many different things out there that anyone can invest in. And by the way, you asked the question why they're so important. The number of publicly traded stocks in the last 30 years is roughly half what it used to be. Literally half. Why? It's a big burden to be a public company. You have a lot more regulatory responsibilities, a lot more cost associated with it, and you have to report earnings every single quarter to your shareholders, and the stock may go up big or down big based on any given quarter. So it tends to be something that a lot of people choose not to do. More and more companies are staying private.

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18:10And then ultimately went public at the valuation it did. But an investor, literally, this is an amazing statistic here in the United States. Every company over$100 million. If you look at those in revenue, 100 million in revenue, good size companies. 85 % of them are private. Only 15 % of them are public. So there's phenomenal companies in the public market. But if somebody completely ignores the 85 % of the economy that is private, they're really not investing in everything. And they certainly aren't diversified if they're just in the public stock market. I would love to own a sports team, but obviously I can't afford to own a sports team.

18:50Otherwise, I would probably not be here right now. No offense. I would probably not be doing a podcast right now. I should say if I could own a sports team, Christopher. You might, because it's a way to impact a billion people in six years. And you also impact a lot of people through your sports team. If you did that as well. I feel better now. So you know what? I wouldn't even be doing anything differently in my life if I owned a sports team right now. So I appreciate you saying that. Why are you so attracted to sports? So for us, we're a thematic investor. So everything we do is based on a core theme.

19:21So, you know, overly simplified when we shorted subprime mortgages with John Paulson in 2007 is because our theme was that the housing bubble was going to burst and that people didn't realize how much risk was in the system at that time. When we went long, you know, crude oil and infrastructure in the shales is because this just technological revolution that was happening. The growth of private assets, going back to your question about private assets. That's why we're an investor in GP stakes. We're the largest in the world in GP stakes because everyone who's going to invest in private markets, that money has to be managed by someone.

19:56And we want to own the firms that actually manage that money, get paid the two in 20 for those that are familiar with that term. We'd rather be receiving that as an owner of those businesses than the person who's paying it as just an investor in those funds. So we want to own the firms. When it comes to sports, the theme is irrefutable. I've actually been in front of audiences of thousands of people, and I've challenged the audience to disagree with me when I say that cord cutting is not going to go backwards or the other way. People are not going to go from broadcasting cable to streaming and go, yeah, let me go back to broadcasting cable.

20:30Not going to happen. What that means is that live content is what's going to drive the economics for broadcast, for anything that is presented over the air. Naturally, live events also matter, but most of the revenue for these companies, these businesses, comes from the media rights, not from just the actual game day. Tickets and sales and hot dogs and beer and all that. So if that is true, then you want to own the teams themselves. I'm getting that perspective. In 2006, not that long ago, 20 years ago, 97 of the top 100, off the top of my head, 97 of the top 100 programs were not sports. In 2025, 95 of the top 100 programs that were watched live were sports.

21:21so a complete reversal because obviously streaming really didn't exist in 2006. So when you think about that seismic change, what it means is an advertiser, it's really hard to reach your audience. You either target them with a micro through social media and stuff like that and all the eerie ways that they can do it, which is very effective, or you have to do it over a large live event that is watched by a lot of people. Think about all of the people that watched the World Cup and how many commercials they had to endure. Not a ton, but there was a tremendous amount of advertising that was done around the World Cup.

21:59Obviously, advertisers paid a lot of money for that, right? That's why the World Cup obviously generated so much revenue that it did, which is why the NFL is the juggernaut. And so when you think about the cord cutting theme, it led us to, after about two years worth of homework, that owning sports teams was the best way to do that. And it just happened to coincide with the rule changes. Because until 2019, no one was allowed to own multiple teams, stakes in multiple teams at the same time. And you had to be an individual. You couldn't be a fund. Well, those rules began to change. And we have several great partners that we've partnered with that are approved by the leagues to be able to go buy stakes in multiple teams.

22:42And in some cases, actually across multiple leagues, so that then you can get diversification across a lot of different things. The NFL was the last to open that up to private equity, and they approved it a year and a half ago, roughly. for the first time ever, could a private equity fund, if it was a specific approved company, would be able to own a stake in an NFL team and more than one. So it's a fantastic business model that people don't fully understand. It also has tax benefits for taxable investors. Talk to your tax advisor, obviously, about that. But it's something to where there's a reason why most multi-billionaires are involved in some fashion in sports.

23:25There's just a lot of stickiness to it. It's inflation protected. It's not really affected by the economy that much. Founder's story started with a$50 microphone and I'll be the first to tell you, none of it happened solo. Upwork has been my go-to for years for hiring, marketing, editing, branding, all of it. The editor who cut this episode, Upwork, the whole team behind our founder's story branding, also Upwork. The talent is genuinely top tier and paying them couldn't be simpler. Upwork is a one-stop platform to find, hire, and pay expert freelancers across development, data, marketing, operations, and more.

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25:39And you have all of these other tailwinds associated with it. And we love the fact that we now have stakes in over 30 different professional sports franchises, everything from North America to teams in Europe, Formula One franchises. I mean, we're really all over the sports ecosystem. It's really a fun place to invest. I was just reading that the World Cup brought in an estimated$9 billion in revenue from themselves, from the cities around them. Do you think in the U.S. we're going to see this increase, maybe a resurgence of soccer? You know, soccer has always been the number one worldwide sport.