DIVERSIFY PORTFOLIO

“First off, they demonstrate excellence. They are someone who came up through the ranks, and they were just outstanding of what they did, and they understand the business. So Tim Cook is arguably the best supply chain person in the world. A A guy like David Solomon had a reputation for being a great trader. I think Jamie Dimon was a great investment banker, a wealth management guy. These guys are just, you know, they're just very they they are better at a component of their business than almost anyone.”

“Interest rates would be higher than otherwise because the treasury would not have kind of automatic insured market for additional treasury debt from foreign central banks and governments, so they would have to offer higher interest rates to place that debt. And we wouldn't get that automatic medic insurance when a bad thing happens. In 2008, when Lehman Brothers failed, we did the bad thing, but the dollar strengthened. So I think those effects that it would become harder for us to import and export, interest rates would be higher, and higher treasury interest rates spill over into higher mortgage rates for your Ohio truck driver.”

“I think the renminbi can come into more widespread use among countries that are geostrategically allied with China, but not globally. The problem is not that China trades too little. It's the leading trading partner, leading trading power around the world. But there are those political constraints that Chinese authorities can change the rules of the financial game tomorrow morning. The People's Bank of China is not independent of the government. It is required to take marching orders from the executive branch.”

“The way it works is that the credit system is like a circulatory system that brings nutrients, buying power, to different parts of the economy. And if that money is borrowed and, used to create productivity that produces income, then there's debt service. When, on the other hand, debt service debts and debt service rise relative to income, It's, you see the debt service is like plaque in the, circulatory system in that it squeezes out spending.”

“Another fact I was reminded by in the course of writing the book is that the dollar hasn't been the dominant currency in The United States for the entirety of this country's history. So Alexander Hamilton, famously created the US Mints in the early eighteen nineties, but there was such a shortage of gold and silver in the country before the California Gold Rush and the Nevada Silver Rush that the dominant unit used for transactions were Spanish silver coins, pieces of eight, you know, Spanish pesos or or dollars that were cut up like a pizza in eight slices. It was legal tender in The United States as late as 1857.”

“If you worry about being the target of sanctions, you put that gold on a boat and you bring it back home. You vault it at home where it's safer from sanctions than our dollar deposits or US treasury securities. But if you bring it home, you can't use it for anything. It become it it's hard to use for payments. It's dense and and if you've ever picked up a gold bar, you know it's dense and heavy, and it can't be lent, pledged as collateral, whatever.”

“So I used to say the the recipe for an international currency was size, stability, and liquidity. Big economy, stable economy, liquid financial markets, but I would add security as a fourth ingredient. Military security, first, the ability to defend your own borders. Secondly, the ability to protect your trade routes.”

“The Byzantine Empire gets short shrift. In my view, it was characterized by fiscal prudence. One of the things that was important was that, for many centuries, despite having hostile rivals and enemies on all borders, it basically lived within its budgetary means. So the pressure to debase the currency, issue more coins of less value in order to divert more resources to the government and the military. That pressure was not so intense. So that enabled, if you will, the solidus to retain its value for a long time. It circulated around the Mediterranean, but also into Asia and and India and elsewhere.”

“The interesting one is Israel's market is up, 9%. And I think what people have, I think if you try and read into it, the market has basically decided that that Israel is the new superpower, is the superpower, the definitive superpower in The Middle East and its tech sector. I mean, I I think the market is betting that their technological, excellence, as demonstrated during the war if you look at many of the a lot of people would argue who argue for military spending that the spillover effect is actually accretive.”

“I am reminded of what famous international economist Rudy Dornbusch said about currency crises that they'd always take longer to arrive than you thought they would, and then they occur more violently than you ever imagined they could. So, you know, it's like who who said there are two ways of going bankrupt slowly and then rapidly. So I think we are seeing the beginnings of the decline of the dollar as a global currency as central banks are trying to hedge their bets, moving out of dollar US Treasury securities into gold and other nontraditional reserve currencies. The analogy I sometimes use is, like an iceberg, which melts very slowly until a whole chunk big chunks calve off all at once.”

“I don't think OpenAI gets out. I think that the numbers are so stark right now for OpenAI that and they're it's gonna be so overshadowed by the upward trajectory of Anthropic. I think they're gonna come up with a jazz hands reason for why they're delaying the IPO. Yeah. I think that's gonna be really interesting. And I think the other thing to be to keep an eye on and the big moment is gonna be when these companies release their s one filings to the public.”

“I would tell them read more history. I would tell them that the shift from one dominant currency to another is rarely smooth. It comes with disruptions, and we all know that the best defense against disruptions is diversification, not putting all your eggs in in in one basket given all the stuff that's going on in the world at the moment. I think sometimes the obvious advice can be the best advice.”

“My takeaway is nothing's changed. Cease fire, no ceasefire. Blockade, no blockade. Seen this movie before. They said Iraq would be six weeks. It was eight years. They said Afghanistan would be $200,000,000,000. It was $2,000,000,000,000. Trump just requested 1 and a half trillion dollar defense budget for next year up from 900,000,000,000. I mean, I think all the signals are clear that this war isn't gonna end anytime soon. So I think it's gonna continue to 2027.”

“For example, as a as a an inclination, I would say, how much gold do you have in the portfolio? You shouldn't have too much and you shouldn't have too little, but it is an effective diversifier ifier to, other assets that you probably do have in a portfolio because, when you have a bad set of circumstances, gold tends to do well because of either the debt problem or the world war problems and so on and so forth. It's not only a long term currency, but today, it's the second largest reserve currency held by central banks.”

“The thing that struck me about the deal and its announcement is that, you know, that saying, statisticians lie and liars use statistics. This number just feels like such bullshit to me. First off, nobody's cashing a check for $60,000,000,000 here. I'd love to see the deal terms, but if it's something along the lines of, if we go public, you're gonna get and you're here for one, two, three, four years, you'll get point five, one, 3% options on 3% of the company and at a $2,000,000,000,000 market cap, that's 60,000,000,000.”

“I do worry worry about excessive financialization. I think we saw its pernicious effects during the global subprime crisis and the global financial crisis between 2007 and 2009. And I worry about private credit and and and AI investment in the present present context. But I I I I don't think it's the dollar's international role that is primarily at work here. It's simply that our highly developed financial markets are attractive places for highly compensated people to play and concoct new financial instruments in in in in ways that may be channeling resources into activities that don't have the highest possible payoff.”

“Google is the one that's the the star of the show today because they're doing so much better than anybody else, not just in Google Cloud. They're also still seeing acceleration in advertising revenue. Their search business accelerated to 19%. That's a massive business, still accelerating. It's catching up to Meta. And Google also started talking about selling TPUs. This is something we started talking about a year ago as a wild idea, and now Google's actually doing it.”

“You should understand, like, cash, which people think is the safest investment, is the most assuredly bad investment in in most times, normally, because cash has a lower return, but it's particularly, a bad investment in a period of stagflation. So we're dealing with, kind of a stagflation kind of environment or an uncertain.”

“OpenAI is proving to be one of the most structurally critical companies in the market to the point where even small details about the business are eliminating hundreds of billions of dollars of market value. Yesterday, for example, the Wall Street Journal reported that OpenAI had missed its revenue target in 2025. Nvidia, for example, fell 4% on the news. Oracle fell 6%. Coreweave fell 7%, and SoftBank fell 12%. In fact, when you add up the market value that was erased, it comes out to nearly $400,000,000,000, all because of one report about one company that isn't even publicly traded.”

“It's more likely has to do with the bottlenecks of building out data centers right now. There's so much competition for resources. We heard from Intel last week that they had to take some CPUs out of the trash in order to sit to meet demand. We can look at memory prices quadrupling within a year, and and we're seeing all these bottlenecks to mention turbines and and and power generation and advanced packaging. There's states that are that have this NIMBY approach of we don't want a data center here.”

“There are five big forces that create the orders where that we're talking about. There's a monetary order. There's a debt cycle. There is a political and social order within countries. There is an international geopolitical order. There is, acts of nature throughout history. Droughts, floods, and pandemics have, been more disruptive, killed more people than wars and have, can't be ignored as a factor. And number five, technology.”

“They're very insulated. Right? Oil is not an input for these companies. The their exposure is only the second order exposure. If the global economy was to slow down, then ad sales to Meta and Google would slow down, retail and Amazon would slow down, and some aspects of Microsoft business would slow down. But there's no direct impact on these companies. Their driver, again, by a mile is the growth in demand for AI compute, and that seems to have very little to do with the conflict, in The Middle East.”

“We are, on the brink. Now the brink might be, I would say, particularly risky period, is between the, two next two elections. So between after the twenty six midterm election and the, twenty eight presidential election, is a a riskier period, and this is a very risky period. I think that, the monetary situation will be more threatening. The United States, basically, the US government spends 7,000,000,000,000. It takes in about 5,000,000,000,000. So it has it's 40% over spending.”

“I think long term, that it's just impossible to believe this is not gonna have some sort of a pretty serious economic impact. But when the majority of the S and P is is fueled by companies and services and tech, whether it's JPMorgan or Microsoft, those companies don't seem to be I mean, in many ways, those companies gonna benefit from this. I mean, there was talk of data centers being bombed, but not really. The tariffs don't affect them.”

“My prediction is the following that the biggest IPO in history will be SpaceX. It'll get out. The best performing IPO will be anthropic. I've never seen that company has more momentum right now than any company, and this is the big prediction. I don't think OpenAI gets out. I think that the numbers are so stark right now for OpenAI that and they're it's gonna be so overshadowed by the upward trajectory of Anthropic. I think they're gonna come up with a jazz hands reason for why they're delaying the IPO.”

“The power in The United States, for example, 1945 created a new monetary order, created a new world order, and that was a multilateral world order that was designed, almost to some ways replicate The US approach to, representative democracy. The creating of the United Nations multilateral organizations, including, can you imagine, the World Court or the World, Bank or the World Trade Organization or the World Health Organization. That's all over.”

“The exception is Florence, whose florin was probably the dominant currency in Europe from the late thirteenth century into the early fifteenth. They were not a first class military power. They were too small. A city state in Tuscany with modest hinterlands and no natural resources to speak of, but a lot of commercial prowess and the first, crew international bankers. They used finance to project financial power and encourage use of their currency despite the fact they that they weren't a dominant military.”

“My view at this point is that plain vanilla cryptos are still volatile, and, therefore, they're least likely to be used in actual payments on day to day basis. And if they're not used in payments that will limit their use for other things, that stablecoin the case for stablecoins is yet to be proven. I think central bank digital currencies are coming. So I would put my money, I think, on combination of central bank digital currencies and tokenized bank deposits, not on stablecoins and Bitcoins.”

“Well, he's first ballot hall of fame for business. He is the most successful successor in history. And you weren't around or you weren't of professional age when Jobs died. But what happened, there was this weird shift in our society where we transitioned from the idolatry of athletes and government leaders and actors to innovators, and that is because of it, I think I think as as attendance religious institutions went down, we still wanted kinda godlike answers.”