Winning the Degenerate Economy with StockTwits CEO Howard Lindzon

27:10And we'd just hire people, illegal aliens, and they would come into Phoenix. And they would all cut their fingers off by making these things. You made it in the States. We made it in the States. We spent all our money was trying to figure out how to machine make these in the 90s. And we wasted so much money trying to like get humans out of the process. Compact would order a million, pay you. Right, in advance. To start. Right. So we'd be buying cars. It was just a two-person company and like a bunch of like staff. And so we'd go out to lunch and buy cars because we were paid before we even started making the product.

27:46And so we were like, that's how I learned business. Kind of like back to school. And you started this on QVC? No, QVC picked us up. And Mark used to go on TV. And back in the 90s in QVC, if it was selling, they just kept you out there like a cartoon character. They hadn't scientifically gone to the profit per second model because they were surprised at their success. So the grip appealed to like 70-year-old women who had carpal—like they just like squeezing balls. A little arthritis, a little carpal tunnel. So we created this$19 three-pack that had soft, medium. And I swear to God, you can't make this up.

28:23and soft, medium, and firm. And QVC just kept Mark on stage all day and the numbers would go. Unbelievable. And it was a miracle. That was our first success. So that was, so I was very much, that was my first internet success. Sorry, that was my first success. When did Social Leverage launch? So you and I both lived through this, the great financial crisis. And that was an era of, So up until 2007, 2006, we lived in a world of financial leverage, meaning – and we know what happened at the end of that, stacking. You know, Excel came out. People didn't have to – my dad, when I grew up with my dad in Toronto, if you did an acquisition, it was like 700 pieces of paper with pencil taped together.

29:12Then Excel comes out, which, of course, nothing – you know, everything's made up at that point. and one sell-off can change the world. But we became a world of stacking things, financial leverage, right? That was the banking era. And the end of the financial leverage era came in 2006, 2007, at the same time that social media came out. So the play on words was, I want to do, as an early adopter of social media, I was like, if an idiot like me, so the idea was social leverage, you can't implode with social leverage. You canceled? Of course. Well, that was pre-canceled. So I'm saying my thesis was, oh, my God, an idiot like me who knows the right three people can just grow their networks for free forever.

30:01Right. And so that was the birth of the name social leverage. It makes a lot of sense. Yeah. It was just like a play on words. Some people will call me and go, oh, you guys do social investing. I go, it's the last thing I do. Meaning there's no impact. It was just the play on words of financial leverage to social leverage. I like it. But good point. You can blow up on social leverage. So now you're up to fund four? Fund six. Fund six. Wow. I have the I and the V. The good news is you passed on all of them. I did pass on all of them. So we continue to do well until you come in. As soon as I come in, it's over.

30:32Well, that's when we shut down. And I famously or infamously was an investor in StockTwits. And then when you pitched me on Robinhood, it's a line in the book. That's the dumbest effing idea I've ever heard in my life. You weren't the only one. And it was. It was – I will – I will – I own it. You're in the majority. You're in the majority. I own it in the book. And between you and me, I'll say, A, it was off-brand. And B, no doubt that the pandemic lockdown helped them dramatically. Perfect time. No, no, no. The thing about Robin Hood, because I was there from day one. And by day one, I mean it was another company.

31:13Right. Kronos Research before. They were like high-frequency guys and math guys. But you could only – this is about – you ask about investing. The life I've led boots on – like just curiosity, your eyes, nose, ears, feet. You become a great investor by like touching, feeling. Right. You got to be on street level. The best investors are street level. I'm talking about private markets. Public markets are a different thing. So let's talk about private. Let's talk about startups. No, so we were talking about Robinhood. So the great thing about Robinhood is it's not that I got it right. It's like if I didn't get that right, I'm nobody.

31:52Meaning I had to get that right. I was a Yahoo Finance user, street.com guy, E-Trade baby. You know what I mean? Twitter user, StockTwits founder. And if I had any nerve or any tech skills or any like real balls or whatever we're going to call it, I'd build my own brokerage. Like I was there to do all that. But in 2010, even until Robinhood started, no one wanted to start it. Brokerage ideas were terrible ideas. So you have to understand that in 2013 when I saw Robinhood, no one in America, that's shocking that no one wanted to build E-Trade 2.0. Right. But what the venture capitalists were doing, they were enamored.

32:33And this is where venture capitalists, I always goof on venture capitalists. They were enamored with the wrong thing. At the time, it was like wealth front betterment. The VCs were enamored with assets under management, AUM. They felt like Vanguard was the one to disrupt. So everybody wanted to be the next. If you're a venture capitalist, you want to be the next Vanguard. And I thought that was flawed. I thought that was flawed because the margins are tiny. And you're never going to build something 10 times better than Vanguard. Meaning, wait a minute, what's wrong with Vanguard? Versus E-Trade, I'm like, it's s*** interface.

33:07You know, it's just ripping me off. And I was the right guy to get that pitch at the right time. So, of course, I had to do that deal. It would have been – that's why the podcast with the guy who passed – if I passed on Robert, I'd be a more interesting guest. So, how much did you put into – Well, we did 100 – like we had – it was our first fund. So, we were writing$100 ,000 checks. So, it was$100 ,000 at an$8 million. I thought it was expensive. $8 million. At an$8 million valuation. like at the time we were doing 3 million valuations. So, you know, like I met them by Zhu and Vlad. I flew up because they called me because of StockTwits.

33:49So they called me and said, we have this app. They were out of money. And I flew up to Silicon Valley and they showed up wearing Google Glass. Two idiots. Like I'm like, immediately I'm out. Like no one, you know what I mean? Remember that era? Glass holes is what everybody called it. I don't know what it was, but I was immediately like, what? And two dorks, but they showed me the app. They had this guy, Joe, who was their designer who had been at Facebook, and he showed me the app, and that's when I knew. It wasn't live. They didn't have their FINRA. They didn't have their broker. So it was really early.

34:26But because of Stocktoast and Twitter, I knew that if you build it, they will come. If you build a design like Uber, if you build Uber for trading, okay, what people didn't get, again, was they were all betting. Hundreds of millions had been invested in Betterment and Wealthfront at the time. So the Silicon Valley was leaning into the Vanguard model. Right. So no one wanted to do the deal because who needs another brokerage? And by the way, building a brokerage, getting SEC approval, VCs don't like doing work. They don't like waiting a year. It's a grind, yeah. VCs do not like doing investment.

34:59Now they do because there's so much money in sovereign – you can get so much money and charge 2%. But back in 2013, it was like, show me something that's working. I want to be the Uber of that. So to take a year off and go get SEC approval, to go do those things, they deserve to be – It's laborious. And you had to wait. You couldn't just go launch it and get sued. This is in hindsight. If you want to be the next vanguard, wait. their secret sauce is that they have such scale they can charge four bips and still make money you you're losing money at 25 bips and if you switch you switch but they have so much assets so switching costs so i could we could talk about this forever i was in the right place right time right people pitched me right valuation everything worked i could tell you a hundred stories of like everything lined up and it doesn't work ramenhood would have worked whether i showed up or not right So we did 100 ,000.

35:52Now, obviously, we helped them tremendously with StockTwits. We were, like, responsible for hundreds of thousands of early sign-ups because StockTwits users loved the idea. Yeah, of course. Free trading. Free trading. No, but also the API, hooking in. You could slide right on. Right over. And trade. Yeah. It's pretty funny. Now, that idea in 07 when I had it, Jack and Av, like, as a Twitter guy, I went to Jack and Av. Yeah, and Av. And Fred Wilson put me in the room with them. And I'm like, guys, what are you talking about Kim Kardashian taking a poop on Kanye West? That's not interesting. You know what's interesting?

36:23The president's going to tweet one day and the markets are going to move. Like, this is literally my pitch to Jack and F set up by Fred Wilson, who was they were like Kumbaya, plane lands on a Hudson. Right. You know, we're growing our beards. No, you know, like, I mean, they were just the darlings. They didn't need ideas. It was the town center for the world. No, they weren't massive. They weren't financial guys. They were kumbaya guys. They were builders. So my pitch fell on. Like, who are you? They didn't get monetizing Twitter through brokerage. It's not about monet. They didn't understand what they had, meaning selling ads against something that Goldman Sachs will pay infinity for, meaning a new pipe.

37:11where Bloomberg's charging$2 ,000 to get real-time information. Now, like Osama bin Laden getting killed, the futures, like in 08, whenever Osama was finally killed, what year? 11, 12? I know where I was. Right. Because immediately I checked the futures, and they had already moved. Right. And that's because of Twitter, right? Because some guy in Pakistan saw it, and the futures moved. Right. Like, that's when it should have clicked. It's like, shut down everything. Delay the feed 30 seconds. And you know what's going to happen? Goldman will call you Reuters, Bloomberg. They'll see that you're off by 30 seconds and they'll pay you fortunes to get the real-time feed.

37:47You and me, schmuck two and three, don't need real-time. It's five minutes, right. So my pitch to Jack and Ev with Fred Wilson was like, slow down the feed because 99 % of the population, and the way we're there anyways with AI, no one gets the real-time feed. Right. Slow down the feed. Your phone will ring for the people that know that the feed's not in real time, and they will pay you infinity to get the pipe. And they were like, no, let's sell ads. So here we are. So you haven't talked about the cash tag, which I really want to talk about. Something StockTwits invented. Yes. A dollar sign, and then AAPL is the symbol for Apple.

38:26So this is the jacking out stories. So, again, I didn't want to start a company. I just sold Wallstrip, which you know, which was my best work. But again, stupid work. Arguably. No, personally, I'm most proud of it. You sell a company to CBS when you are literally an idiot is the dream. I think that's a fair disclosure. Yeah, yeah, yeah. Like they said, by the way, as Les Moonves wrote the chat, he goes, I can't believe we're writing an idiot like this a check. He said that. That's the quote. I said, please write that, like you and your book. Please write that you're so angry. So anyways, they had just bought my company.

39:03And literally a month later, I'm like, you made the wrong acquisition. You need to buy Twitter. Like Twitter is to Quincy who had bought my company at CBS. And I remember there was no iPhone yet. And Twitter came out and I thought it was stupid. You thought it was stupid. We all thought it was stupid. It was just annoying. Andy Swan, an old friend, was like, I get this. This is financial. because, you know, at the beginning, we all had our BlackBerry. It wasn't even a native mobile app. It was just the web, and it was all venture capital. And my shtick in 2006, 2007 was I just peed at the Gramercy.

39:39So the VCs loved me. They were like, who's this idiot talking about his bowel movement? And then Andy Swan said, you know, this is like financial. This is like a new Bloomberg, right? And so the hashtag was the thing, and I'm like, it was all spam like if you went to apple like hashtag aapl or hashtag apple it was like i went to the store and bought a green apple right like that's literally what people were saying it was so now it'd be like let's nuke apples but like at the beginning it was like i bought a green apple and i'm like that's spam so i sent fred wilson the first message that i'm saying like and back then blackberry was the hot stock and i'm like i just bought dollar sign r-i-m-m and fred wilson who's the godfather of all this and was an investor and twitter sent me back a text he goes this is genius You need to start a company.

40:23And that's what set me down the StockTwits path. Was Will an investor in StockTwits? No, because he was an investor in Twitter and he thought there would be a conflict. There's no conflict. I agree. But Fred is the OG. Why? Fred's the OG. So Fred's strategy is if he bets on one, he does. And I follow Fred's strategy. There's other people who spray and pray and don't care who they are. And 90 % do that. But Fred was of the opinion back then is like, I work with you. there's going to be conflicts are a thing like no conflict no interest that's he's very cool that way but don't create conflict just to create conflict so in his wisdom he was like you know what's going to happen if you guys get in a fight and yada yada yada so he politely backed out but we were backed by good vcs right raising money was not my problem the my vcs should have said harren you know it's not a good enough idea so as an investor in stock twits i always wondered why the hell didn't Twitter buy stock to it?

41:23Well, they don't understand finance. They should have bought it. You remember the last scene in Raiders of the Lost Ark? Yeah, of course. The whole movie is about getting and then the last scene is this is a very important, again, why media matters to investing. And it's just a black hole forever. Never to be seen again. The best tech companies like Salesforce, he understands corporate dev. Sometimes you buy something to kill it. Right. to see and by the way it's not Twitter's mistake it's cost me a fortune they're like my Newman Twitter's like my Newman from Seinfeld it's like Twitter like you know now who's dating themselves so no but what I'm saying is they're my Newman like in Seinfeld meaning these people it was a clown car as Zuckerberg said there's so many people that got rich off non-executing I love the line it was in one of your recent posts right but Zuckerberg said it first which was it was a clown car I don't know That crashed into a gold mine.

42:20Yeah. And so Twitter – and the real problem with Twitter was it was a financial product. And Elon knows that better than anybody in the end because – Although he just – Well, he monetized it by stuffing it in a shell company. It's still like – it's an asset. He's made tremendous mistakes to think that Trump end-arounded the whole thing, meaning Twitter is supposed to be a real-time network. Right. They have to pull True Social. Right. True social is worthless other than one guy who sits on top of Twitter and you have to copy paste his tweet. Like so Twitter – On a different platform. Forgetting how bungled the company is.

42:59The fact that they owned real time and do not own real time and that I'm the schmuck that came up with the original like Trump is going to tweet. Now obviously Obama was president when I had this idea. But like that the pipe matters and who is king of the pipe to think that Trump beat Elon at his own game is pretty insane. He is savvy in ways that people don't appreciate. Insane that truth socially exists. It's worthless but for one guy tweeting. Right. Unbelievable. It's inconceivable. You bested my man of orange. So the poison cannot be in front of you. So now 2024, you come back to stock twits.

43:40as CEO. Yeah. What motivated that? Are the early investors going to see an exit? What's, what's going on? That's inside information. No, it's not public. No. So it's not, it's, it's, it's non-public information, but it's not a legal inside information. No, stock is just like a, a corn on your foot. No, I mean, listen, can't go. Here's the thing about venture capital is here's the thing about venture capital. Not everything should be venture capital. True. Okay. So I joke about this with, with my finger. Like, whose fault is it? Okay. I think Stocktooth is a great idea. The cash tag was a great idea.

44:17I'm very proud of it. 100%. I'm not proud of having to run a company 17 years later. Not that it wasn't my dream when I started Stocktooth is to be sitting here answering questions about how am I going to make money. Let me bust your job. But you were every right to do this. So what I'm saying is I, and young kids need to know this, like math, not everybody gets to have a startup. Of course. Okay. Well, my venture capitalists, if they're as good as they say, and they are great, should have stopped me and said, this isn't quite venture capital. Let me push back on that because I knew you were going to go there.

44:49I am. And your venture capitalists, and we know a lot of the same people, said, hey, there was a window to get out. You wouldn't have gotten an FU number, but you would have gotten a pretty good number. No, I never got a number. There was never. I thought there were discussions that just never came to fruition. There's always discussions. Yeah. I thought you guys were on the one-yard line. I'm discussing it right now openly. There's always a price. Which camera? Camera two? No. Listen, we have never – some things are only fairly valued for a second. Right. And some things stay overvalued or undervalued forever, as we know, from the markets.

45:25For sure. And I think StockTwits – I'll take full responsibility. We've always missed a window of positioning. Right. But the good news is StockTwits is thriving. Right. It's doing well. This is a perfect - So I'm saying like - Robinhood should really be the part. We were 10 years ahead of our time. If you think about where public, when I started Stockton, retail investing was a laughing stock. And it still is to most institutions. Much less so today than it was. So again, if you look at my portfolio - By the way, the private equity, private credit wouldn't be so hungry for retail investors if it was truly - They lead us.

46:04They call me every day. Right. So there's two worlds that I live in. The world where retail doesn't take itself seriously. And private equity guys call me. CEOs of public companies call me to take – I'm in a crazy seat because I'm a goofball. But I am serious. I'm trying to be serious. You used to be 60-40 goofball serious. Now you're 40-60. Yeah, it switches. You're the new 60-40. Yeah. I can laugh at myself, but I'm trying to run a serious business, right? because it's been a long time. And we were just way ahead of the curve. Like Jack and Ev didn't understand what we have. Fred Wilson understood it.

46:45There are very few people that understood it. Very few people liked Robinhood until 2020 and GameStop. They didn't like it for the wrong reasons, by the way. I don't like the Robinhood that became. Like I'm not, I call it the degenerate economy, but when I invested in Robinhood, I didn't know the degenerate economy would exist. I didn't know the prediction markets would exist. I didn't know options would be their biggest product. I was just wanting to see. Options are bigger than crypto for Robinhood? Crypto is tiny. Options is everything. 90 % of their profits will come from options. Any broker.

47:18Wow, I didn't realize that. How are they going to make money on zero commission other than options? People doing YOLO trades. Payment for order flow, margin loans. That's just media being bad media. I'm going to tell you that the big shops like Fidelity and Schwab, the single biggest line item of profitability are credit loans. Okay, it could be. I don't know. I don't go through the financials. At one point in time, it was over half at Schwab. I don't know what it is today. When we invested in Robinhood, here was my thinking. First of all, I love the product. You got to be a user of the product to be a good investor.

47:52I'm not the guy who's like, here's space check and here's a biotech check. What do I know? So the odds have to be stacked in my favor, first of all. But second of all, and they were, I was Yahoo, I was Yahoo Finance, I was you, I was blogging, I was doing everything. And they came along at the right time. The pitch for me with Robinhood was not that they were going to make money. It was an 8 million valuation. At my event, people were like, how are they going to make money? I'm like, chill the hell out. They haven't even launched a thing yet. The point was Schwab was paying$150 to get a customer.

48:24To acquire, customer acquisition. And my thesis was, like Uber, Robinhood would pay zero. So if you get a million people, even if there's$4 in their cap, that's a good ARB. Those don't come along very – did I think it could be a$30 billion? I'm not so psycho that I thought I was investing in a$30,$40 million company. Billion. Billion. So of course I'm not that smart. But what I'm saying is I saw the ARB, and all they had to do was deliver the product. Now, it went way beyond my expectations. That's the Larry Davis part. By the way, you didn't give me that pitch. The pitch was – I'm sure I did.

48:58The pitch was free trading millennials, the whole next generation, you're going to capture them before anybody else. Well, I knew that from stock tips. I knew I'd capture them. But if I mention the ARB trade, people are like, oh, they're going to have to raise so much money. There was a lot of problems. No, the ARB trade, in hindsight, the ARB trade was why I invested. The ARB trade would have been compelling. And again, it's a chapter in the book. I'll tell you a great – Hey, it's so off-brand for me. One great story. Go ahead. Because this is just an investing story. So we're a very small fund.

49:28The first one was$6 million. Now we run$100 million funds. You cap it at$100? Yeah, I don't think our returns would be good. We like writing$1 to$2 million checks. I get that. Stay in your lane is something everybody hates saying, but I think in my world, unless you're fee gathering, stay in your lane. People know what we do. You're going to laugh. I believe in that. I hate when people say it, but I practice it. That's an annoying way to say I disagree with what you're saying. Right. But what you're saying is, hey, here's our expertise. Here's my skill set. I'm a good monkey at this. I'm going to apply the area I know best.

50:03So with Robin, so occasionally, and again. Stars will alarm. And I had breakfast with Fred this morning. We're talking about, like, you're a legend. Josh is a legend. Like, I'm surrounded by legends because I've lived long enough. Okay. I've lived long enough. And I'm curious and I'm nice and I call people to say hello. I'm a salesman. So who do I see this morning? Fred Wilson. Like, who did I run to? Tim O 'Brien. Like I'm friends with like people that have, you have signal because you have, you've been on the street and you have experience, not maybe in space, but in what you do, you have signal.

50:35So with Robin Hood and I had learned from Fred Wilson, like if you really believe in something and I'm not a poker player, I don't gamble. You got to go in as a VC. You have to. So Robin Hood. You're convincing me to throw money into fund seven and that'll be the end of your run. But that's different. Every fund is like a crop of wine. it could go shit. We're wrong all the time. Well, 2024 was a good vintage. 2021, terrible vintage. So when Robinhood was doing very well, but the two guys were like, it was not popular. All the VCs had committed to Betterment Wealthfront type model. So now they needed to raise another round.

51:15And I'm like, they wanted to raise - This is 14 or 15? 14. Yeah. I think that's when we spoke. Yeah. So they were like, And I'm like inexperienced because we write one check. We don't have more money. So they call me up and they go, can you write us a term sheet? It's a very sophisticated way of saying like you won't have to like actually invest. But if you come in, like we can shop, like we can kind of shop it around. So I'm like, dude, screw that. I want to invest. So over like July 4th weekend, Tom, my partner, and I was two of us at the time. I'm like, let's just write an 11 million. They needed to raise 11 million bucks.

51:50and they wanted to raise it at some stupid valuation. It was$60 million-ish. And I'm like, well, we're never going to have to really write it. But even if we do, I can convince my friends, like, this is the one. And I called Fred Wilson. He goes, what are you calling me for? You know what to do. Write a term sheet. I go, but we don't have$11 million. And Fred goes, you'll find it. Just do it like a six-week, which is absurd. Now, today, people write billion-dollar checks in an hour. But, like, he goes, just ask for six weeks, right? Right. So, you know, whatever you're typing it up, send him a term sheet.

52:24Back then you had 10 fingers. Yeah, back then I was more, but, you know, 10 fingers, more errors. So anyway, so we read up this term sheet. We send it to him and they shop it as they probably index ventures. Jan Hammer, who's like one of the best investors, comes back with a term sheet of 11 million on 65 million. Wow. And like a five-day close. So like, you know, they got what they wanted. Oh, and by the way, index in their term sheet. Index in their term sheet, like, social leverage. That's a typical, like, who are they? Luckily, by writing that term sheet, Vlad and Baiju did the right thing, and they carved out like as much as we could.

53:08We couldn't even raise a million. So they carved us out. We put 800 grand in the Series A. If we had done the 11 million, I'd be a billionaire. But 200x on the – Yeah. That's unbelievable. No, way bigger like at the peak. But like – But we've had better investments. You're not still sitting with the Robinhood shares. A lot of my LPs – we distributed the stock. A lot of my LPs have not sold. I've sold – Nobody collars it. Nobody says – I don't ask. Our job is to deliver them – There you go. The cash. I want to start with a quote of yours that I really love. Okay. Quote, the whole world has become a casino.

53:44know, thanks to AI and prediction markets, we are all more productive and degenerate now. Let's talk a little bit about the degenerate economy. Explain to listeners, what is the degenerate economy or the degen economy? Well, I don't like the word degen. So when I say degenerate, I say it in the humoristic way. You and I are degenerates. Because we'll buy a watch, we'll bet on a game, we laugh at degeneracy. We don't – we appreciate the art of degeneracy versus – Meaning – Meaning laser eyes was dumb. Right. But degeneracy is an art form like speculation. And I live – I own and I joke that I own and operate two millennials.

54:30And when you own and operate two millennials, you watch – you look over their shoulders. Those were your first startups. No, my kids. Yes. Those were your first two startups. The only startups that matter. Did either of them merge yet? Do we have any M &A activity yet? No, we need... I'm not talking about spinoffs. I'm not talking about dividends. I'm talking about... Are they married? No. So no mergers yet? No. My son was in a long relationship. Aren't you on the board? You should be chairman of their board. Who am I on the board? I'm trying to get them kicked off. I'm trying to get them fired.

55:02I'm trying to get medical checks to see if anything's working. So degenerate economy was born of this idea that I couldn't believe where we went. like with GameStop. Like, I was so stressed during the GameStop thing because I hadn't monetized their investment. I'm like, there was a weekend when Robinhood was worth $40 billion and it could have been worthless. Do you understand? 100%. I wasn't rich. And I'm like, it wasn't even their, blame whoever you want. People lost their minds. Let me annotate. So let me just explain to you if you have your phone. Go ahead. What Robin Hood perfected, which no one figured out, was like when we used to play pinball, there was always that kid who was so good at it.

55:51Crazy flippers fingers. Well, he could bump it without tilting it. Right. And he could just get the machine to dance for him. Tilt happened. Uh-huh. The app was so well designed. They couldn't execute, yeah. The app was so well designed that everybody pushed the same button at the same time. And it couldn't carry the... I remember when it was grand. I understand that's literally what happened. It was a design flaw. It was a design flaw. It wasn't the design flaw. Nobody expected it to scale 10 ,000x over a week. No, but if you push everybody to one button or another button, and then people come on and see me say, push this button, and everybody's like, let's see what happens.

56:29And guess what happened? Crash, crash. Not to be repeated again. Hasn't been repeated again. And that's what makes the markets great. That hole was filled by the hole being created. Right. We haven't seen another thing like this. Although recently with Caravis, but like GameStop broke the machine and almost bankrupted the company. Right. And it was many lessons in there. The most important was Robin Hood. Not in their hubris or anything. They mistook success for a brand. When you build a brand in four years, not 40 years, you don't appreciate that you have no brand value. And I'm like, no one understands this.

57:07Like they were one of the first case studies in like, why? It didn't deserve to be zero. Who knows what all the things that went wrong? But I'm just some guy who's like, what the f***? How embarrassing would it be if it goes from 40 billion to zero? And, you know, Galloway and all these guys were piling on and all these people piling on. I'm like, you don't even understand what's going on. So wait, let me tease this out of you a little bit. I thought you were going in a different direction. How degenerate the trading in things like GameStop and when Hertz was bankrupt and or was it Avis? I don't even remember which.

57:40Some really foolish, reckless. And I think those of us with gray hair looked at it and kind of laughed because we knew exactly. Yeah, the apes and all the A &C stuff. I hated it. But it doesn't mean I can stop it. That wasn't your concern. Your concern was, hey, here's a fire hose of new clients, new orders. This is the scale this company needs to become wildly successful. And they're just not prepared to deal with the sheer volume. And if this crash goes on more for a couple of hours, two days from now, this is a zero. It was a zero. We can argue. I don't know the whole story, but I imagine someone called someone at the options clearing firm and said, you're bankrupt.

58:19And the VCs, lucky we're in so big, they had to put in more money. They didn't have the reserve cash you need for margin trades of options. We'll never know the real story. So technically, SIBO is the counterparty on all trades. And they also own the platform. So they demand a certain amount of capital if you're going to trade X. And they're trading billions of dollars. They didn't have that capital. So this is why my degenerate economy index was born, Meaning I don't think AMC is – what's in my index, which is outperforming everything, is SIBO is one of my number one positions. Who benefits – so my degenerate economy thesis is finding the companies that benefit from global degeneracy.

59:01You created this last year, two years ago? Three years ago. It's crushing. It's free. I just share it. Just to put some numbers on this, it's gambling, it's day trading, it's meme coin speculation. It's vaping, unfortunately. It's up 170%. The NASDAQ 100 over the same time period isn't even up 100%. It's up 94%. Correct. You're almost doubling the NASDAQ. And I give it away for free and I share the position size. Why isn't this an ETF? Because VanEck always talks to me. VanEck always is like, why do you want to be in the ETF business? So, you know, you use ETF Architect. You know, I get it. Work with VanEck.

59:37This is a billion-dollar product. Again, this is, I think, part of, like, you know, the age I'm at is, like, I don't want to be someone yelling at me that my that i kathy what that i as soon as i monetize it it'll go to zero like this thing will stop working i love the idea that i can give it away for free this goes back to the original social media meaning what am i going to make it's like as soon as i start charging for it the whole thing becomes i took ads off the blog because they were annoying and ugly and the amount of revenue it made was just too annoying you're saying the same thing yeah i'm saying like hey man i'm like i got a little thesis it's not that complicated i i love this thesis i would i think people would be buyers cme hyperliquid now is in there no one knows what hyperliquid is i constantly what's hyperliquid hyperliquid is the is the thing meaning today all i get pitched on are by the next robin hood And I'm like, the world doesn't mean another Robinhood.

1:00:36But all they keep talking about is, you know, we've got perps trading 24-7 on Hyperliquid. It's the new Solano, let's call it, because I'm not a crypto guy. And I'm like, after getting 100 pitches of the same product and they all talked about Hyperliquid, I just bought Hyperliquid. And what's the market cap of that? A couple of billion? It's like 12 people in one of the most profitable companies in the world outside of Singapore. Like the guy has no freedom because he's so rich. It's like a system. It's like a very fast chain. What's the symbol? H-Y-P-E. Hype. Yeah. What a great symbol. Yeah. It's a token and you can buy it on Robinhood.

1:01:11Again, I'm not promoting. I'm just saying. So you could buy it on Robinhood, but does this not trade over the counter? You can't get it anywhere? You can trade it as a – there's a DAT called P-U-R-R. Again, I'm not recommending it, but I'm long a little. It's a way that you can trade it over the counter. And again, you're betting on the fact you don't know anything about supply demand. You're just right. It's the system that everybody's trading. Pure speculation. Pure speculation. On other people's speculation. That's my thesis. This is speculation squared. So anyways, so the degenerate economy is about picks and shovels.

1:01:44We can't stop if a young person like my son, and again, I own and operate two millennials and I don't want them betting. My son will call me and goes, I can't believe I lost a 20 team parlay. I go, who are you? even of my this is why i have to do a step in takeover of my son's company because i'm like take private are you talking to me like you asked me to vend my you 50 bucks to put on a 20 team parlor and you're complaining so idiotic it's so idiotic so i'm like trying to teach them not to be idiots you can have a degenerate you just need a little bit of math the problem is not a math and you also full circle on the general economy you have the wrong teachers right now i got brought on board by guys like Hugh Kramer the people who had experienced stuff Fred Wilson these kids are learning from Chamath and David Sachs these guys were born of one generation they worked at Facebook they worked for Elon if you're not rich working for Elon or Facebook that would be interesting if you are rich and you're kissing the nipple of Facebook and it's not interesting you were supposed to be rich have some humor a little humility or a little hubris so my job is to teach my kid stop being a degenerate But the fact is you can't not be a degenerate when prices – kids are YOLOing because they can.

1:03:02And it's frictionless. Frictionless. And they'll learn. Some of these kids will learn how to be good put sellers or premium sellers. Very few. I understand. But the markets are very important, meaning having a price on everything is fantastic. Coming up, we continue our conversation with Howard Lindzen, co-founder of Social Leverage. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio.

1:03:51and the future of private capital. Catch exclusive interviews with top newsmakers, plus a live recording of Bloomberg's Odd Lots podcast. Visit bloomberglive.com forward slash investhongkong to learn more. Supporting sponsor, Deutsche Bank.

1:04:10I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. My old friend Howard Linzen of Social Leverage is here. And when I say old, it's only partly because we know each other so long. It's mostly because he's an old man and is now 60 years old. Years ago, my wife and I, I'm not a cruise person. We were young. We were broke. We used to use this website called vacations to go dot com. You book last minute would cost you nothing like a week long cruise through eight islands in the Caribbean. 500 bucks, food and drink included, booze included. So as soon as they hit international waters, the casino opens.

1:04:50I am not a gambler. We walk through and I just decide to look at the roulette table. Not bet, look at it. And this is the difference between my wife, who taught fashion illustration and design, is a visual person. I'm a little more of a math guy. And I say to her, so we're watching 20 minutes of roulette and it's just, it's so dumb. Yeah, I hate losing money. It's for random stupid reason. But I point out to her, look, the red pays or red or black or odd or even pay two to one. But you have zero and double zero. So it's not even odds. And then this group pays three to three to one. But it's one in four chance of winning.

1:05:36So they're making money. And I'm going over all the math with her. And she listens to all the numbers and says to me, I don't know about the ratios or the math, but all I can tell you is I see people. I see the croupier taking off a whole lot more money than she's handing out to gamblers. That's the takeaway. Be the croupier. Not the odds. Correct. Be the house. So CBOE hit all time highs. They're the house. Yeah. Have you ever heard anybody on social media talking about CBOE? Never. They love that no one's talking about them. So the other thesis that I have is trends with no friends. Uh-huh. Okay.

1:06:12So I'm looking for trends because, again, I run a huge social media site, right? So if I have a choice between NVIDIA and Sandisk, everybody's talking about NVIDIA. You want Sandisk. I'm not saying I know much about Sandisk. We're just talking about Broadcom. Same thing. Same thing. So on StockTest, I can look for tickers that are trending with very few followers. No, not to be early. I don't like small caps. So I'm like five billion and above. No, I mean early. I mean before it really goes up 10x. So I, it's the one thing that Structivit has, and I have, AI, you asked me why I came back to Structivit, it's two things, AI, and the fact that, like, I can now code with cloud code, and so I can call bulls**t on engineers a little bit.

1:06:51Oh, this could take six weeks. I need it by today. Well, again, there's not today, but there's not six weeks. Right. Okay, so there's that, and then there's the fact that we have all this data, and we have a great community. So I wanted to come back and, like, see this thing through, and we're doing very well. The issue is now I can explain to people and I can pull out the data to show people trends with no friends. Meaning you want to find stocks that are trending that have very little discussion. Makes a lot of sense. Yeah, it's just intuitive. Meaning IBD, I learned on IBD, I love price relative strength.

1:07:25I've just added a layer to that that matches high price relative strength with low social. It's almost like the moosh of Vegas. I'm trying to find the stocks that know, even though I run a social media site, I'm like betting on the fact that like they'll discover this in time. You should talk to Ben Hunt and what he's doing with Persean. Because they're too. Yeah, they have a narrative thing. But the combination of where the narrative is just starting to tick up. Correct, tipping. And where the trend is starting to keep my friends. So I give it away for free. He's quantified it. Yeah, I hate the quant side.

1:08:00I just visually see it. Right. from years of being a non-quiet. I went to ASU. I don't even know math. But if you want AI to help you with this, the math matters. Yeah, I got to catch up with that. That's awesome. But he also sees the world a little darker than I see it. I'm much more of an optimist. You and I both. Yeah. But when I want to know what's the worst case scenario, like when the tariffs were first rolled out, not so much losing the finger, but his piece, the end of the Pax Americana. It's true. Was the end point where if this really goes off the rails, this is how bad it could get.

1:08:34Well, it's deglobalization. But he works out the details. Yeah. It's great. But again, you and I are both a little more of optimists. I'm much more simple. Right. If I see something going up, that's my cue to look. And then if it's a certain market cap and then I check stocks and I go, no one cares. I love that. Then I need to tell a story. Everybody needs to tell stories. Stocks are stories. And some people are great at storytelling, the Palantir guy. But again, the numbers eventually matter. And I'm trying to find companies going up, right? And that's not complicated. But then I have other layers to it.

1:09:13And I need to understand the catalyst myself. Like if it's just something I'll never understand, it's hard for me to ride the waves. So if I don't really understand and use the product, the odds of me getting scared out of a trade are 99%. So let's talk about your – So that's my index. Let's talk about your startups who are becoming degenerates, your kids. Given social apps, zero commission trading, all the option stuff that's going on, for your kids' benefit, what sort of guardrails – I don't know if it's the product, regulation, educational – what do you wish was in place to protect them that isn't there yet?

1:09:53And let's also add, these are not minors. These are late 20s adults out of school for almost a decade, real people. What guardrails should they have to protect them from their own worst instincts? Listen, we put our negative hat on. It's like you can go buy bullets at Walmart. So it's like, what is a guardrail, right, in a world where you can buy bullets and, you know, everybody's got drones? So I'm like more like, okay, guys, if I hear that you did a parlay, we can't be related. So stop betting. Betting is different than investing. So if Shane at Polymarket and they're partners of ours, if Shane or Tariq at Kalshi had pitched me those ideas at the same time that Robin had pitched me their idea, I would have passed.

1:10:41Why? I don't bet. I think it's stupid. Okay. I think it's funny, and I think prediction markets are news better than the New York Times, no offense, because I like prediction markets because I don't have an opinion. I just look at the price and I go whether I believe it or not. I think that's the genius of it. But if Polymarket and Kalshi went out to VCs and said we're the new news, their valuation would be a dollar. Right. Okay. So we know the real story. They can't tell what they really are good at, which is news. And by the way, they're not great at news. I understand, but neither is news good at news.

1:11:13It's probability of something happening. But I'd rather not read someone's opinion. I don't need to see Elon's finger on the news because that's not the real story. Give me the numbers. I know it's fake, but I got a number. If Mondami isn't 90 % and my daughter's mad, I go, Rachel, here's what you do then. Bet the other side. You'll make eight times or put— It's 10 to 1. 10 to 1. But I would bet money on Mondami. And if you really want to change how you think about the world, go help somebody on the other side who has a chance. Go put in the time. Go help Mark Cuban if you really want to be. I love what he's doing on the health care.

1:11:49But what I'm saying to my daughter, I said, call Mark. I'll get you in touch with Mark. Do something. But just complaining about the numbers that you see. And the numbers were right. Whether they tipped it in this. Again, I don't want to get in all like the fraud and all the fake stuff about it. But the numbers are much easier than reading an opinion piece. Can I share something fun? Yeah. So there was some of the early bets about outcome of the war and different events happening. And I said in a quarterly call, hey, I don't really know who's putting we don't know who's putting these bets in. Yeah.

1:12:24But if you stop and think about it, if you're negotiating with another side, this being the psyop, because you spent half a million dollars to move the outcome of something. That's the least money the Department of Defense will ever spend. And and anybody on this side is looking at this. Oh, they're they're really going to put boots on the ground. That's look at the track record here. Here. Here's a wallet that's 10 for 10. Oh, my God. We have to stop and think about you don't really know who's using this, who's betting this, who's manipulating. But we didn't know that guy who got arrested. That was a throwaway.

1:13:01That's a false flag. It's still better than Russia and China using our social media. Oh, my God. It's the worst. And North Korea and Iran. Yeah. So I'm not saying I'm an investor in Polymark and in Kalshi personally at crazy valuation because I wouldn't have invested. Like I just chased it in SPV personally. The co-founder of Kalshi, the woman, what's her name? I don't know. But I know it's a woman. I just can't remember her name. No, she was a guest on the podcast. Was she great? She was really good. This is years ago. I'm not. This is three years ago. I should never even thought to put money into it.

1:13:34So that's what I'm saying because I don't bet. It's more academic than anything. It was academic. Yeah. It still is because there's very few people using these products. For all the free press, it's like Twitter. There's very few people using Twitter. Well, Twitter is circling the drain at this point. No, but I'm saying at the beginning, it had a lot of power even though there weren't that many users. It was a fraction of Instagram or TikTok. So production markets are the same. It's an important fraction. It's a fraction of the news. But I'd rather my son and daughter go to page two of Polymarket because you know what?

1:14:06they're going to see? News that they wouldn't ever look at in the New York Times. They can go look at the election in Peru and now at least they'll know the names. Or Venezuela for that. Or Venezuela. So I'm super bullish for different reasons on prediction markets. And I know there's like, obviously I have money on the side. And this fits right into the degeneracy index. It fits in completely. How long does the DGEN index run for? Is this a short term thing or does this have legs? It's a great question. That's why I don't want to charge for it because I think I'm a leg. Because Google and Apple are my biggest positions.

1:14:35because they are the rails for the degenerate economy. They are the front-facing tool of it. Apple because of the phones and mobile. And Google because of the phones and YouTube. And App Store, the casino games all run on App Stores. The free games that you have, they make a fortune off that Apple. Why not Amazon or Facebook? Amazon just added the beginning of the year because of robots. Axons in the portfolio. Not because of the Amazon Web Service, because of robots? Yeah. Yeah, I mean, you can't not own Amazon at this era in the degenerate economy because they are the center of it. Which robot shops do you like?

1:15:11You can argue it's a degenerate economy, but you have to own Amazon. Any of the robot builders you like? No, because they're too early. I'm a personal investor in a few. Such as? Give us some names. Aptronic, which is just massive. But again, it's a personal investment. Do you have any interest in what Elon is doing with Grog? Yeah, but it's a holding company. I don't know what the position is. It's kind of random. Meaning Tesla is a holding company for everything. Or is that going to be the entity that goes public for SpaceX? I thought it was SpaceX. No, but I'm saying to SpaceX, why does he need two tickers?

1:15:46Again, I don't understand what the final being is. So why do I need to own some Elon holding company? I think that's stupid. Because you're betting on him and you don't think he's a - Who cares? I'd rather bet on something I understand. Okay, I'm with you. I don't disagree. I'm trying to figure it out. Yeah, another recent ad, it's already doubled, is Clear Secure. You know Clear when you go through it. Sure, I love Clear. So to me, if the world's degeneracy, you need security. Much more security. So Clear's been a home run. They don't have a lot of tech, but they're a great brand. Yeah. I thought they have tech.

1:16:16I think they license a lot of the tech. Oh, that's not theirs? They don't own it? Yeah. So again, once you dig into a story, my conviction comes like how much of this they own. But they're a hell of a brand. The company's been around forever. And they have the relationship with FAA. Yeah, in the airports. And they can do so much more around stadiums. The brand matters. What are you talking about? You go to watch a Knick game. It's clear. It's clear on the way in. That was my bet. It's just a clear trend. No one ever talks about it, too. So it's a massive uptrend. And. Broke out, and you never hear people talk about it.

1:16:49I like that. If you use either Chase Sapphire Reserve or Amex, I want to say Platinum, you get a credit towards any travel, and clear is just an automatic. It's a no-brainer. Yeah. What is it,$150 a year? It's fantastic. My son would call me and go, that's the greatest gift you ever got, man. I'm like, wow. When a 20-year-old knows something and an 80-year-old knows something, those are good trends. Yeah. You know, that's a brand. Yeah. When just a 20-year-old knows it, not a brand. Maybe it catches on, maybe it doesn't. Yeah. CBOE, I love it, because they power the whole thing. You can't do this without CBOE, CME, the Merck, you know, the New York Stock Exchange.

1:17:27Let me ask you a question. a direct investing question before we get to our favorite questions that I think a lot of investors have a hard time with. I started on trading desk, so I'm okay with losses. It's a given. But if you say to somebody, I want you to put a little money into these 10 or 20 stocks, half of them are going to go out of business, maybe five or a break even, you'll make money on a couple and maybe one's a home run. How do you deal with that really fathead long tail? you're not a math guy. Indexing. I'm so into indexing. No, I mean on your private seed state. Like most of the seed investments you're going to make aren't going to give you a massive return.

1:18:09How do you deal with, oh, I'm wrong all the time. I'm just bearish on my industry, right? I never, I believe it was a moment in time with ZERP. I think it got the country through its unintended circumstances. We live in all these unintended circumstances. Consequences, right. Yeah, or unintended consequences, sorry. By the way, now that you're 60, that happens a whole lot more. I am wealthy, just born at the right time, a lot of unintended circumstances. Zerp is a good thing. Right. I'm not saying I shouldn't be ashamed. If you have assets, if you're working stiff, like I used to be, it was tough.

1:18:44Yeah, S &Ps at all-time highs, cash levels at all-time highs. If I hear those two things together, what do I think of? Inflation. Right. There's never been a better time to have assets. Right. It doesn't mean I don't know when it's going to end. I have cash and stocks. It's a double whammy. So I'm lucky. I am so bearish on what I do for a living, meaning what value do I add in a world of 6 % interest rates tying someone up for 10 years when I can go buy Sandisk in the public markets and get 6 ,000 % in a year? I'm not saying I'm smart enough to hold these things. But in a world where Robin Hood and 1 ,000 Robin Hoods are going to bloom, if you're asking me my biggest bet, public markets.

1:19:27Do the work. You have an analyst in Claude. You can go see beaten ups. No one's following any stock. Everybody's momentum investing. Go find 10 companies. Why would you do a startup investing? Every kid wants to be an angel investor. I'm like, dude, do it in the public markets. You have liquidity, and you're not locking up your clients for 10 years. But you're not answering my question. Okay. Which is, how do you as an investor deal with the psychology of knowing most of your seed investments aren't going to work out? Is it just the nature of the beast? No. Or does that weigh on you at all? No, I think it aligned with how I thought of the world.

1:20:05As someone who believes their high integrity, who wants people to believe their high integrity for my kid's sake, And, you know, the integrity of telling my investors that up front is the release, meaning I'm not telling my investors we're going to be 90 percent hit rate. If you give me money, you're going to hate me because you're going to think the idea that I love is the dumbest idea. The Robin quote unquote. Yeah. Dumbest idea. You are betting on me to hang 30 pieces of art in Howie's gallery, the Larry David gallery. and you will pick, if I gave you the choice to invest in all 30, you would pick the two that went to zero.

1:20:45So you're betting on me to deceive the world my way. And then I'm not telling you we're going to make a hundred times our money, but my job is to find one company that's a hundred bagger. Okay. So I have to know math. I have to do this. I have to have, just get yelled at by my LPs when they read our quarterly letters and go, that was the dumbest idea. I'm like, you're right. Like, I'm embarrassed. But our job is to find a Robin Hood, and we found many of them. You know, LifeLock, Robin Hood, Beehive. We just got one called Alpaca. Again, a trend with no friend. Alpaca powers 1 ,000 Robin Hoods around the world.

1:21:20They're like the modern apex. So I'm saying, like, our job is to know what we know, take crazy bets, and sell that to our LPs. It's like, you're investing for 10 years. This is like, you know, it's not as good as it was in 2013 when rates were zero. And now it's a different game again. And I'm thinking like, you've got Claude and you can analyze the stock in like three seconds. I'm like, everyone's a CFA all of a sudden if they want to be. What a great time to be a public market investor. And yet everybody wants to be a private investor. It's so funny coming from you. Yeah, no, no, in 2020, I've been writing about this since COVID.

1:22:03It's like public markets are amazing because there's so many stupid people making dumb bets on Robinhood and dislocation is everywhere. And it's only getting worse. And the degenerate economy is going to continue driving this theme. Yes. And I think most people should index, but everybody should learn how to pick stocks too in this era. I got you. Yeah. All right. So it's almost midnight. I only have you for a few minutes more and you have to end up at your event tonight. Cash hack awards tonight. Yeah. And breaking news, Octoberfest, October 6th, coming back to New York. That's our big event.

1:22:35That's exciting. Yeah, 1 ,000 people on the west side. I am looking forward to that. October 6th. If you want to come, hit me up. Let's do our speed round. Five questions. Two hours. Ten seconds each. I'm going to jump right into it, starting with. Boxers. Who were your early mentors who helped shape your career? I think part of it, I hate saying this, I didn't have good early mentorship. So I really take pride in mentoring other people because I think - Who were your later mentors? I hear Fred Wilson all the time. Yeah, you, like people that I discovered, like the mentorship came from the community.

1:23:09Being the mentor led me, like StockTwits, being a giver opened me up to get mentorship. I think young kids are not getting good mentorship. So just pure karma. Karma. I love that. What are some of your favorite books? What are you reading right now? I know what you're reading next. What are you reading now? Yeah, I got your book. I don't read. You're on flights all the time. What do you do? Just movies? I'm so addicted to like HBO, Amazon. So you're watching series. Yeah, I built, I'm just very into content. That's my next question. But hang on, so you're asking books. I still love the classic Shoe Dog for Business, you know, Phil Knight's book.

1:23:44I love Dagasi's biography. I like stuff. I just, my brain doesn't work with books. Huh, that's really interesting. Tell us what you're watching on Netflix, HBO, Amazon, I just rewatched The Nick. Have you watched The Nick on HBO? Soderbergh? Why does that sound so familiar? Oh, it's about the 1900s, the Knickerbocker Hospital. No, I did not watch that. Best show. Really? First season. It's like surgery wasn't done until like barbers used to do surgery in 1900. Right. All the rich oil guys started backing hospitals and that was the original tech. Surgery was tech. And it's just an incredible period piece about the 1900s in Soho in New York.

1:24:26Huh, I'll check that out. On HBO. Give us one more. There's very little good stuff on TV. I think Rooster's pretty good. Can I tell you something? On HBO. Rooster's funny. You have that backwards. Okay. There's too much good stuff. I think I've seen it all. Have you seen Landman? Great. But that's more like Harlequin romance kind of series. They're fun to watch and the kids like them too. Okay. The Nick you'll love because it's just periopee. Did you see Three Body Problem if you want something a little more? No, but that's sci-fi, I think. I don't like sci-fi. You don't like sci-fi? No. So you didn't watch The Expanse?

1:24:56No, I didn't like that either. I try it and I never get into it. Huh, that's interesting. I like Degenerate stuff. How do you feel about Spy, that sort of stuff? I love them. Killing Eve? Killing Eve's good. It was great. I like Spy stuff. I can rarely follow it well. Night Agent? Have you seen Night Agent? Yeah, it was good. Wow. Yeah. How about any of the British period pieces? I love Britbox. I watch Britbox. So The Crown, Bridgerton. Not Bridgerton, but Britbox's a great channel. Yeah. There's that criterion for old movies. If you have BritBox, go back and watch – what was the name of that show?

1:25:35There was a show that came out around the same time as Friends, Coupling. Oh, I watched it. It has teeth. I mean, everything from the 90s is a little dated. But whereas Friends was kind of milquetoast and mushy, this has a sharp edge and it's British. so it's nasty and funny in a way that only the Brits can do. Okay, yeah. So I'm a media fanatic, but not like I'm weird. And I'm so bullish on YouTube, Apple TV. YouTube is just great. I just love YouTube. All right. So final two questions. What sort of advice would you give to a college grad interested in either becoming a seed investor or a startup entrepreneur?

1:26:21Well, I think there's no shame in being a number two, number three, or number four. So chief of staff is the new CEO. So go be someone's chief of staff. Don't worry about pay or title. Worry about finding something that's working this way. It's much easier to go work for a company that's just working. So go ignore the title. Low-end job. Ignore the salary. Find a rocket ship and attach yourself, whether it's Manscaped. you're going to learn more there's going to be smarter people around there's going to be less aggravation more work but hey if you're really serious if you're really serious about this it's going to take a lot of work but go do it if you're not serious be a socialist it's okay but don't fool yourself go work for a rocket ship otherwise who are you talking to so there's no room anymore for these kids that like, if you want to start a company, do you know it's 24-7?

1:27:24Right. And no one's going to like you. And if you want to be a number two, do you know what it takes to be a number two? So I'm like, be honest, but like, go work for a company that's working. And our final question, what do you know about the world of venture and seed investing today that would have been helpful 65, 70 years ago when you were first getting started? No, I think I luckily got the right mentorship and entered at the right time. I think you have to do it for a while. You've got to get a crop. Like if you're going to go do wine or weather matters, and same with tech. Like what matters with tech is you have to – if you were of the Google Glass era, not much worked.

1:28:02Right. If you were in the BlackBerry Fund 2008 – No go. No go, baby. Unless you could have been an early investor in Apple or when they were public. I think the public markets are underappreciated because seed investing became cool because of Zuckerberg and because of a few of these rocket ships. See, I thought seed investing or venture investing really became cool in the 90s and then in the 2000s kind of faded. No, it's never been more loved. Today. Oh, I go see these young kids. It seems like they know nothing and they all want to be venture investors. I'm like, yeah, have you ever bought a stock?

1:28:40Like, you get wounded like day one, like stock drops 20%. Like, go open a Robinhood account and learn how to invest. Like, if you don't know the public markets, what are you doing in the private markets? Got to graduate to private. Yeah, I think the most guys who are interesting to me, and I'm not saying they still are, the crossover investors, the people that, like, knew the public markets and then started doing private. And I think that was my edge. I knew how pricing worked, whether I was right or wrong. I understood how markets worked. And the seed investing, the prices made sense to me relative to public markets.

1:29:09Now the prices in private markets make no sense to me. Howard, it is always a blast when you come in. You're a bucking bronco. I never know where we're going to go. You are not Larry David. You are the Zach Galifianakis of finance. He was just on Conan. I should put two ferns in here just for your arrival. Thank you, by the way, for being so generous with your time. And good luck at the Cash Tags Awards tonight. If you enjoy this conversation, well, check out any of the 600 we've done over the past 12 years. You can find those at iTunes, Spotify, Bloomberg, YouTube, wherever you get your favorite podcasts.

1:29:50I would be remiss if I didn't thank the crack team that helps put these conversations together each week. Alexis Noriega is my overworked video producer. Sean Russo is my researcher. Anna Luke is my podcast producer. I would also like to just drop a little piece of information. The paperback of How Not to Invest comes out today. By the time you hear this, it'll be out already. What else do I want to say other than - You look good. Thanks. I'm Barry Ritholtz. You've been listening to Masters in Business on Bloomberg Radio.

1:30:35Bloomberg Sustainable Business Summit returns to Singapore on July 22nd. Our fifth annual Asia Pacific Summit will explore how business and finance leaders are shaping the next phase of globalization by strengthening resilience, advancing climate adaptation and driving a multi-speed energy transition across Asia's diverse markets. Join us for solutions driven discussions, interactive workshops and networking opportunities. Learn more at Bloomberg Live dot com slash SBS dash Singapore.