What's up, everyone? This is Anthony Pompeo. Know most of you know, me as pomp. You're listening to the pump podcast, simply the best podcast out there. Now, let's kick this thing off. Kevin, O'Leary is a Canadian, businessman author, politician and television personality. He's a shark on ABC's, hit show shark tank. This had numerous previous business successes, including when he sold The Learning Company to Mattel, for 4.2 billion dollars in 1999. In this conversation, we discuss Bitcoin gold risk,
Management institutional investors, defy yield farming regulatory environment, ESG mining energy, consumption and Kevin's personal portfolio. I really enjoyed this conversation and I hope you do as well. Before we get into this episode though, I want to quickly talk about our sponsors. First up is block, 5 block, 5 provides Financial products for crypto investors. Those products include high yield interest accounts. US dollar loans against your crypto collateral and a no fee crypto currency trading platform.
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Enjoyed
this one, Anthony pumping, ah, no runs pomp Investments, all views of him and the guest on his podcast are surely their opinions and do not reflect the opinions of Pop investment. You should not treat any opinion expressed by pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy. But only, as an expression of his personal opinion, this podcast is for informational purposes. Only
All right, guys. Bang, bang. Kevin is here in person. How long has it been? Since you've done one of these
in person? It's been a while. I mean, we're, you know, Miami's kind of fully open here. So here we are.
All right, where do you live? Are you living
in Miami? Now, I am. I live right on the beach, right? On Collins Avenue. I love it. I love the Bohemian lifestyle. I walked everywhere. I eat dinner every night. I just love the
place. I've seen him multiple times riding your bicycle. We got dinner. You've ridden. The
You're wonderful bike there. Yeah. Did you recover it? So we stole it. So it
got stolen. All right. A big big operation. They stole over a hundred bikes that night and Vespas.
Also, this was not a targeted. No
crime. Well, I kind of later and I offered a $25,000 reward, not for the bike. You know. I wanted to catch the guy that did it. So they're organized crime organization and they put it in a truck and they put the truck on a barge in the river and they took maybe 250 bikes that night on the streets of Miami. And what are they?
Do with them. They apparently sell them. They take them off shore, they put it on a ship and just so my mr. Wonderful is in some South American country right now and evil, all the bike company that made it for me. I saw it on social media and said, let's do another one, even crazier. So I was there last week, designing, the craziest Miami bike you ever see. It's pink, it's red, it's blue. I'll have it though. It's going it. When it when you see it, I'm going to be mr. Wonderful Ally Miami.
All right.
I feel like you've done a great job Shark Tank, all the social media CNBC, except people this massive audience. Yeah. How do you think about that stuff versus like the investing activity? Do you still spend a lot of time investing or is it more? So now you've got the Investments, you've got, you've made those Investments and now it's more of the the media focus and kind of content.
I think a new model is emerging and you're actually part of this new model and let me explain the way I see it over the last 24 months.
So
let's take a company that
it is trading mine met when I got approached with that company here in Miami at the Soho club. Second floor. It was a bunch of crypto guys. Three years ago, one guy there named Jay Iran, said, look, I'm a Kryptonian. However, I also have a great interest in psychedelics as medicine and I said, you're crazy. Those are illegal drugs, LSD is illegal schedule. One narcotic seems cannabis psilocybin. All of this stuff. He said, no. No, I'm going to go to the FDA Pharma company and do clinical trials. There's no recreational use of this. And, you know, I want three.
Lux. And I said you know it's too crazy but I'm going to my guy Alex, who does runs all their Adventures? He's got a team will do due diligence on it. It's intriguing enough that was three years ago. Alex worked on it for about two months and he really went to town on it and did a lot of research with his guys and the way, my deal with Alex Works to give you an idea of how this works. I probably
told you I already know, but go ahead. Okay. So when we do an
investment, you know, I'm the bank. I lent him 15.
Percent. So his you know what, sir, on the line, he borrows money from me and invest beside me. He gets his own stock, but he owes me the do fifteen percent so that I know our interests are aligned. This is the first time in history on mine, made where he came back to me and said, I'm taking your 15% and I'm tripling it with my own do and I went what why? And he laid out his case, we end up investing that went from a twenty million, 20 million valuation that we bought in at to now 1.7 billion. So it's my biggest winner,
Years. But those are the kind of investments in. How did that story happen? This is where social media intersected with the story of mine men. It got into the Rolling Stone. It was in, you know, all the news magazines, it was in the popular press. It was all over social media because I was talking about along with all the other Advocates and the story builds into a giant company that has over 300,000 shareholders. So my new model pump, is this
You want me to get involved in your business? All right. I want a proprietary position. I don't care what your last round was that. I want to be a Founder, so you're going to give up to stock, but then I'm going to turn on my machine and if you have a, you have a story of Merit, I will explain it to other shareholders and hopefully we'll build this business together. Using all the tools, the new world has shows like this social media, Yahoo finance, been Zynga, CNBC CNN ABC, that's how companies get to be known, not just for shareholders to tell their
Don't story. Why should you care about micro dosing honesty because it works? Or at least it potentially can and it's going through clinical trials and it can solve for it. You know, diction opiate addiction anxiety. Alcoholism. All these things,
is there a specific type of company that this works for more so than other types of companies like does it have to have some inherent story behind it and some interest. And that's really what you're trying to underwrite just as much as the actual investment
itself. It's a great question but the truth is every company has to be able to tell their story in the best.
Slight, I don't care if it's really sophisticated technology. I mean, it's much better when it's consumer go to service, but right now, the reason crypto is of such interest globally is, the story was told by guys like you for years, and it's slowly emerged as a story of, you know, store of wealth. If you want to call it that or currency. If you want to call it that, whatever it was. It's the fact that investing has become democratized by the Robin Hood's by the Reddit Crowd, by all the news channels, by the cable channels, business is part of everyday news.
Every day. And so if you can get a following that is interested in your investment philosophy. I invest sustainably ethically. That's what I do. That's where I came from. That's all I do. And people that are interested in that follow, they don't have to invest with me. They don't have to, they can bet against me, but at least they hear these companies stories. So, my argument is that the value I have to accompany now is the ability to take it story and blow it up and then investors will make their own individual decisions. But that's
Very hard to get to that place and it's taken me a long time as it has taken you. And I want to use that power wisely.
When you think about public markets are private markets, how much of this is better suited for public markets, where there's liquid stock price their shareholders people can make decisions Everyday by cell, hold whatever versus the private Market, where there's not so much access for some investors, right. There's not that liquid kind of daily stock price and maybe the impact is more around like helping the business.
Built in terms of getting customers or driving, you know, consumers to check it out or whatever, is it either or can this work? Across both public and private markets? It's both. And the most
powerful platform to tie these together is equity, you know, crowdfunding now where you can tell a consumer of a product or service that you can become a shareholder. At the same time, I'm very intrigued by that, I have a relationship with start engine. Now, one of the largest crowdfunding Platforms in the world. So when a company has a hundred thousand customers that have tried, this product, is still private.
It, we can go to the customers and say, look, you love our product, you love our service. Now, we're going public, you can buy our shares, you can buy them online. You can put $200 to $2,000 or $20,000 into the company that you've been supporting. Now for five years and that's this is again. Another digital, you know, Crossroads of equity and funding and debt to the consumer which doesn't have the same issue around timing like a private Equity Firm, does or a venture capital firm where after 7 years they turn into a pumpkin and they want to
Share and they want this and they want all these special rights. I'm not into that anymore. I'd rather. Do you want to raise 50 million? Let's do it in equity crowdfunding, where everybody owns the same share, all the interests are aligned, there's no time bomb. People can buy and sell their stock anytime they want. And so for me, it again, goes to the platform. What I try to do with. My companies are private is get them customer acquisition costs, get theirs down, and I use my platform to talk about their products and services. I try to get people to try the products.
You know, at the end of the day, I feel a responsibility. I don't endorse products. I don't use personally. I think that's bullshit and I think people can smell bullshit a mile away, so I never do that. You know? I'm I do things that I use. I like or I invest in and I tell my story and you can either agree or disagree. It's but at least I get that Mega bullhorn to get out there and talk about it. Yeah.
When you think about your career building up the media side, there's a lot of people who listen who they're very interested in this and more. So Founders are interested.
This
as well. So one of the big secrets in Venture Capital right now is almost on a daily basis. I have a Founder that comes to me and says, how do I build my Twitter following? How do I build Facebook? How do I build Instagram? You know, should I create an email newsletter? Like what should I do? So that I have the same power, maybe set a smaller scale but I can talk directly to an audience that's in my vertical or in my industry. And I think that there's a lot of kind of value that can accrue there. What are the things that you did that? You're like these were the big inflection point. Obviously Shark Tank probably was a big one but
There are other things that you're like, this is how I built this, massive platform, it kind of made a name for yourself where people were willing to at least, listen, here you out.
What I found worked as these, you know, it's a complex question because I get the same question all the time. How can I get a million followers? Well, it's not that easy. I mean, there's people that try and sell you services to do it. There's all kinds of Consultants to try and do it for you. They want you to pay them, 15 grand a month, all that stuff happens. But the truth is that social media is
The great democratizer of people that are good storytellers, because if you have interesting information that may assist somebody or they may find interesting, they will tell another about it. They will send that link to somebody else and that actually that organic growth occurred pretty quickly for me. It started, you know, fifty thousand, a hundred thousand two hundred thousand than a million and then another million it and I never changed. I mean I like to have fun.
Fun on social media. You know, I'll play guitar with my pajamas on and Saturday. I'm happy to do that. People play guitar like to do that, you know, just share it. I talk about stocks that talk about Bonsai get very, very serious about issues around politics. I just laid out there and it's all true and I don't bullshit and I think that's what work for me, but I'm very happy to be in different verticals. You know, I can talk about watches with anybody in the world. Now I have a mess of watch collection. I used to be a shareholder in Fender. I can play guitar.
Have Chef wonderful. Is it multimillion-dollar business? Now, my wine business is now the largest direct to consumer in the country, really? Yep. Yeah, we just did 5.1 million in 20 hours on QVC last week, that's all time record. So these are different verticals that interest me. And there's different constituents that come into Universe around those interests. I got a huge following of people that like wine,
tell me what more about the wine business that aren't anything about this. Yeah,
so, you know, here's something interesting that I learned, I grew up with as a Swiss
A father who's really taught me in my teenage years, how to, you know, the difference between Bordeaux and burgundy and DRC and the Italian wines, and all the varietals and I became interested and over in Europe, you know, wine is just part of family, this not about getting drunk over there, they just drink it, you know, maybe one glass or two glasses, not a big deal. So kids drink it watered down whatever and so I became pretty proficient at the different varietals. I always was interested in why, you know, I'm a collector of wine and investor I buy one Futures with a group in Boston. We invest millions of
Always in wine and we try and guess which varietals like this year's going to be terrible because it's know just last week in France, it actually snowed, it's unprecedented. And the point is, when you get knowledgeable about it, you get this kind of sucked into that lifestyle. So I started a wine business in California where I blended it, and I sold it and I was losing money, like, everybody else. Like a lot of money. Everybody goes into it. Romantically little joke. If you want to be a millionaire start as a billionaire in the wine business.
Cause you lose a ton of money. And then I met this woman through Shark Tank named Annette Alvarez. She was the one buyer for Costco. The largest buyer of wine in the world is Costco, people don't understand that all the global wines, they are the largest seller of wines as well and she said, Kevin, I was trying to sell her, a shark tank deal of single serve wines, nobody could ever reach her. She was impossible to get to and I asked one of the guys in my office to go to the dark web and half.
Her cell number, which I had in ten minutes and I called it and I left a message and I said, listen, I'm the guy on Shark Tank. If you were a shark tank fan, I don't know. You saw that deal last night a single serve wine deal human and I went into and I'd love you to Costco to does the cupola wine, or whatever it was, it was the and there was another one called Zips as well. And so I left the message and I thought, well, maybe she'll call me back, 10 minutes later, I was up at our lake house, the phone rang and said,
This is an out Alvarez, I got your message. You were rude to Barbara last night on Shark Tank. But what she said, no you were really rude to her. And I said, I got to tell you something and I'm the only reason Barbara gets the Shark Tank on time as I buy a new broom every year and she didn't think that was a funny joke but we are over to with the I know, I thought she'd like that but she didn't. And and anyways, we got into a conversation. He said, I'm on my way to Hawaii for our annual holiday with my husband, I'll be a John Wayne Airport.
At one o'clock on Saturday, it was Thursday night and if you want to fly here to meet me, you can bring your wife because I want to meet your wife too. I said why she said I just do and I want to see a real person and I said Linda we're going to John Wayne and we flew there. I got an hour of her time and she told me that she said, look, you want to sell wine with me? I'm the largest buyer on Earth. The only reason you get this hour with me as I'm a huge shark tank fan. I have some questions about the show. I'd like to meet you. That's great, but here's what you need to know about the wine business 90,
87% of wine sold in America is sold for under $14, a bottle 97% people don't understand that. That's all of the wine pomp. That's basically the stuff you buy for 60 bucks. You're in the 3%, in order for you to make money, you're going to have to be able to ship me. A hundred and fifty thousand cases a day. If I order a cab from you I need a hundred fifty thousand cases. That's just my stocking order. The next day I meet another hundred thousand. You can't do that. You don't have the capability or have the logistics. You can't even
How much juice that is. If you want to pull that off, I'm going to give you the name of a guy named Pat, Roni Young's 19 Vineyards. And he makes our Kirkland. Why he is our Logistics guy. He can ship me two million cases. You form a wine company with him. You go 50-50 partnership. That I know you have a logistic skills, then then I'll give you an order and it'll blow your socks off. How much wine we can buy from you. I go to sleep at and passes.
I know you're coming, and that called me. We're interested. Let's form a relationship. We fought for six months. On the terms of it. It ended up being 50/50. It has been wildly successful because she was right. The minute, we dropped our price point between 11 and 14. We started selling, you know, hundreds of thousands of cases. And last week, I broke a record, never been done before on QVC, we sold five point one. Two five million dollars worth of wine in 21 hours.
Means we have to ship a quarter of a million cases in two days, we can do it but that's a business is very profitable. Now in fact, a SPAC took over that company. I'm not a shareholder in vintage wine, Estates and it's going to trade on the NASDAQ June 6th.
Wow. And so you also do direct to Consumer as well or
just absolutely launching a new site will be announced next week so I'm overly on it here called shop mr. Wonderful. And it's going to have not only all my wines but all my Shark Tank Products. So a massive play direct to
Zoomer as a result of the pandemic organized by a great digital team. A lot of work going into this. It's like extending the voice pop. As we talked about the beginning of the show, you know, what do I do with this voice? These are products I invested in. I use lines, I make my wife Blends, the white side do the Reds. This is our family stuff, try it. It's very it's an honest pitch. If you don't like the ones, ship it back. I mean, you know, you can send it back if you want, but when it comes to Wine, I've got your back. Nobody makes money like I
do. Yeah.
I think when we first met three years ago, maybe now, yeah, CNBC set. I didn't know very much about you other than how the sky on Shark Tank. Yeah, I don't think you knew anything about me and I told you that 50 percent of my net worth in Bitcoin, I thought you're fucking crazy and well that's a nice way of putting it because I think on the segment what you said was I forbid you overall I for
bashing. I remember we were on the set of Squawk Box. Yes. I thought who is this idiot? Yes. Why would he put so
much into one thing?
And and, and you didn't realize that, I think I was playing a game with you, and you were playing a game with me because right before the segment started, there are commercial and we're all talking or whatever and I was kind of jabbing you a little bit trying to get you to be excited. And then you said to me, right before shows how much, you know, do you have in this as a 50%? The lights cameras, turn on and that was the first thing you fired across.
Well, I was those, that was then, and but in 2017, I had nibbled in eyes.
Start buying some Bitcoin and some, you know, theorem at that time and a couple of other I think us can remember when I bought my stable coins, but you know what happened to me because I'm in a highly regulated industry with, you know, all my indexing, all these financial services companies that I'm invested in. So, I'm really regulated by the regulators, and I started talking about crypto and whoa, what a negative response back then you remembered it was it
was specially 2018. When
I had dropped from 20,000 Bitcoin price to yeah $3,200. So I got my wings
clipped pretty pretty hard by lawyers and Washington saying you got to stop. I mean you're a heavily regulated guy and you're out there on TV talking about Bitcoin, forget
it. And you you talk about as much as you want or not. But like I think a lot of people think he'll on tweet something or there's somebody who is really bullish, who all son is a little bit more bearish and they called the tap on the shoulder, right? The like, hey, knock it off type thing. Yeah. Is that like a, you know, goes through the back.
Door conversations, someone just says, hey, you know, you should chill with that. Or is that like something that is kind of more stated, right? In terms of the
way it works is. I I have to be compliant as per the compliance officers that work in these companies every single word I say, including this this podcast is going to be reviewed by compliance. And these organizations, I have to be compliant with because they have to they're telling the regulator's that we are compliant and I have to make sure that's their job.
Yep. And so I started getting calls from lots of them in different companies saying you're way off side and you've got to stop and I did and I, you know what happened though if only it was only eight months ago, when the Swiss regulator the French regulated, the German New Zealand that Brent Britain, Switzerland and Canada, they started putting ETFs out the regulator's. Had gone 360 or 180. Wouldn't call it right? And I said we'll wait a second. I'm an investor in those jurisdictions.
I have investments in all those jurisdictions, I'm a global investor, I have them investments. In all those currencies, I am going to buy some Bitcoin as I can. In those jurisdictions, we don't have it here yet the same way, but it's coming. I would assume. And obviously The Regulators of lifted their their curtain, or made it easier to do that. And so, I started growing my position to 3%, I'm a 5 in the operating company, so we have five percent in gold. For example, I said let's go Krypto
Two, three and we started buying coins. And we started buying ether and we started, you know, investing in a few other things. And then I started getting calls. And I think I've talked to you about this. I service institutional clients and Sovereign funds and they saw me on CNBC talking about my 3%, waiting and the phone lit up. It went nuts. And what was it about? It was about ESG. It was about this issue around sustainability and saying, where did your coin come from me? But they were mined in China. I said,
Who cares? It's all fungible coin. It's Bitcoins Bitcoin. It's awarded, it's a coin. They said, well, we're supporting cold by coal, burning miners.
You know, this issue I predicted would
explode and I think I've been right on that thing, but it hasn't changed my interest in going long Bitcoin, for a bunch of reasons because I've gotten a lot more sophisticated. Now, what interests me the most right now is defy, I think it's where the puck is going. And I'll tell you why. So now I've got a large amount of capital tied up.
Three percent waiting in the operating companies. A lot of capital and it's not yielding anything, right? So why don't? So I said to my guys, let's get into some defy and take a portion of the assets, and wrap it into the theme chain and let's start making some interest. Let's start looking at different ways that we can loan are our assets out and start making four five, six, seven, eight. You know, I've talked about this, I have gotten way down that rabbit hole and, and I'm way deep into that. Now.
What's up, guys?
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In the business and a very happy user. I think you will be too. When you go to block Phi.com pump again block five.com pop, go check it out and let me know what you think. All right, let's get back into this conversation. I hope you enjoy it. So let's stop for a second just so you understand where we are. So you got three percent of operating coming assets, right in crypto. You've got five percent gold. First question, is why still five percent gold? 3% crypto. I think a lot of people who kind of gone down the rabbit hole of
Either invert that, right? So, it's 5% crypto 3%, gold or like literally have gotten rid of the gold. So why still have more gold than crypto right now? You know that it's a great
question and we've had that discussion internally. Every we do our meetings every Monday at 10 o'clock, we review the portfolio changes, Etc. I know there's going to be a change there soon because it comes up every Monday now. Okay, because we can't make any interest off gold and we now are starting to get yield and starting to make money and the weird thing as
Well, no, we've had tremendous volatility of Bitcoin this last 10 days that actually enhances defy, it makes it better, I'm making way more on my contracts now and so you know I said to the guys look this is you know branches. I haven't even told him where the story. It's just unique, it's on your podcast because it's so new. You only bring me the good store. Well, you know, we talked about a lot of stuff. So I said to the guys, on the on my crypto team, look, this defy stuff is really complicated.
It is not easy. You know, we've got a meta Mass format. We've got all of these other platforms, all the stuff we have to do. These contracts. This is crazy complicated. But there must be millions of people that have a little bit of coin that want to make some four five, six percent on it. Why don't you go find me a company, a team that I can invest in that, will do a commercialized defy? And I mean, not not corporate so that somebody that has a wallet that's got maybe, you know,
20 grand or 10 or 5 thousand dollars in it could easily do. What I'm doing? That takes a staff of four
people. You're basically talking about more user-friendly, better, user experience and easy way. Hey, I elect, I want to do this and rather than me actually have to go in and do it myself. I can use this service to accomplish this. Yeah, and so they came up with
this team again. It's in a different jurisdiction because it's Canada which is very open these days of Vancouver team. That one of my crypto guys introduced me to Ben is the
You know, and he's got a great, almost 20 people there doing this that they're all X Bankers, they understand the whole format, their deep deep, deep into the algorithms and all the code, their writing and they said, look, we're looking to raise some money here. Do you want to be an investor and I said, yeah, I'll take this on I'll but I want to buy a third of the company. I want to be a significant shareholder and we negotiated for a while because you're going to be we're going to do two things for me. I'm going to help your company, but I'm going to give you a ton of capital and
You're going to manage it according to the way I want to manage it and you're going to produce things that I want because I know if I want them others are going to want them like tax returns. I want to press a button, get a tax return. I don't I want to be compliant, right? Nobody does that yet, I don't want to have to sit there with an accountant. Figure out all my trades. I wanted automatically produce he's working on that his team is working on that. So we put we put a significant round together for them, a 20 million dollar round. I'm the lead on that thing and I think it's going to be a great company. We haven't even announced it.
It's called defy Ventures. I'm going to rename it to wonder Phi because it's it's going to be my my vehicle and I think it's just the beginning you know some great things to come. And
so when you go in to defy, what exactly are you guys doing? You're taking Bitcoin that you own and heathyr and Ernie's
what I want pain. Okay I'm a I'm an investor. So there must be many. Other investors like me. I've made my decision to three to five percent allocation probably. As you as you snuck out on me, I
Going to be moving it up because you're right goes not doing anything for me.
And well three plus five is eight not five so you could get rid of all the
gold could get to 10, okay, I get it. All right. But you know, we're Bound by certain covenants just for how we manage the operating company,
10 F feel like is on the upper bound of most conservative investors, right? So it still fits within the kind of bands, if you will, if you're a conservative investor, most of your focus is outside of crypto. Yeah, one to ten percent is kind of the Bands up their pom-poms 5%, or Institutional Investor 10 is up there.
Right now, that number for the big guys is 3%, they're happy and they want Bitcoin, they haven't gotten past that yet. Bitcoin is the property the digital asset they want. And they want to store Value Store value. And you've been right on that can't deny that. Okay? It's a, it's a
Volvo. We might have to roll the tape back there after
racing. My whole point is the it has inherent volatility, but imagine. So here's my thoughts about defy, okay. I've
Got the Vol. I know I'm going to be up up and down 38% a year, that's what it's been historically, right? So, we're seeing that. We had a crazy, Vault right
here. We're a little recording this on a day that it's been down 40%, no month.
Okay, so, so let's say, in my case, my defy company of which, I'm a large shareholder. Now, I say to the guys, look, let's put a bunch of crypto on our balance sheet. All right? I'm going to own third of that balance sheet or whatever. I own of the balance sheet. I want you to loan that out and get me.
Between a four and a half, and an eight percent yield. Now, of course, I have to mark to market the change in value because it's going up and down. But I'm kind of agnostic because I'm owning it as property. I don't really care because it's an allocation. Let's say it's 5%, I'm just going to stay at Five, I'll change it every quarter adding, or taking away from it, but I want you to loan it out there. So the whole operation, the defy operation is to start doing these contracts for me on an AI basis. So it can go look to the market see what the spreads are on all these different
Opportunities. I don't want to get too complicated because basically yield, for me, it was just reduce your for me and then others that are interested, like, I am on taking their asset and imagine if I could have over these years, had a five percent yield on my gold, that would have been incredible. Well, I can on my crypto. So that's really what I'm doing in defy and I've think I've got the best team in North America. Everybody says that, but I'm backing this team because I've done a lot of due diligence on them. And I think, you know, in the next few months that will become part of our
Portfolio with a yield metric to it.
So because what you're basically saying is you're going to keep the Assets denominated in the asset, right? So let's say just for easy things, you have a hundred eith, you put that in, you want eight percent. So now you're going to end the year with a hundred and eighty staying anything. Regardless of do not price go up or down, I might
go back to theater, just pay some expenses but I'm going to stay and eat on that balance sheet and you as a shareholder. Go with me in the share price as my assets.
Grow. Do you think that this is a really important piece that I think the traditional world hasn't woken up to you? It sounds like you're now getting there is once you leave Fiat into crypto. Yeah, you don't go
back, I don't want to go back. Okay, why would I
well why don't you tell me how do you think about it, right? So you've got a hundred percent of your assets. You said I'm going to take the ribbon to put it into crypto. Yeah maybe that goes up. Maybe it doesn't whatever but let's just say it's three to five percent whatever the application is. Once you put that into crypto, why are you not going back? Well the
reason I would come back out.
Say let's say, our covenant is a Max content which it Dept most institutions that is Max
Arena. Okay? Alright. So 10 is the max allocation
because, because if you're going, you know, you basically if you have a LPS, or you have other shareholders or you have other constituents, you've told them you have a covenant of diversification and it might be ten percent whatever it is but it's not much higher than that. So when you get to 12%, the end of a quarter in your crypto, you're going to trim back to fee it. You're going to go back to 10% or maybe you know and then you just sit in the weeds waiting for
Correction and you buy back up to 10%. I've, you know, I've been buying like you bought the dip. Well it's it's not really a dip. It's maintaining the 3% waiting, right? Yeah, no box. And the dip in the price? I know. I know but it but to me it's okay we're 2.4. And we said we're at 3 by up to 3 because we've had a correction, you can't call that that's a correction. We just yeah,
well I mean look in 2017 there is what six over 30%. I think right there was to 40% draw down, so it doesn't feel good, right? Want to know when the acid draws down, but it's not.
A typical for the kind of historical bull runs, right? Right. Which, again, if you told in the traditional World, hey, there's me to 40% draw downs, but you're gonna go up 20 x in a year. They're like I'm out. Well then, oh my God,
I'm out of this. But in this case, you end up with more coin after that correction and then you're out, loaning it out and you're getting your and with that volatility, you just got 200 basis points. More yield people don't understand. Vol is good for yield. It's not good for your stomach. Yep, but it actually helps you. Mine. You
Old from your crypto and so when you understand those smart contracts and how it's being loaned out and I'm getting way more sophisticated. So I look at it now with my team saying okay, you know you could even put leverage on this if you want which we don't. But I think that's a crazy chicken move, but you could really go, sir.
Why are you only targeting four and a half to eight percent? Some of these can pay
20% or 30%? What's your duration? What amateurish?
Well, that's why I'm asking you right? Is it just you're saying hey I want to be able to earn the four and a half to eight percent forever and the 20 to
Essentially there for a couple of weeks or a couple of months, like how do you think about yield verse duration? So what we don't
have is a long history of what that curve on generation, looks like you just don't have it. We're all Pioneers in this and because I'm a bond guy, I've been a Banh gai for decades and so what I look at is duration quality. You don't you can't work with that yet, we don't know. So I said, look, let's keep our contract short. Let's understand the change in the Deltas. Let's understand. You know, how inefficient the market is when there's a lot of volatility, let's just gather our own data.
Gotta keep our powder dry. Let's only loan out 50% of our positions until we understand how it works. And I should also disclosed I'm working with some of the larger corporate defy, guys. I've opened accounts to manage some of my company's balance sheets. I'm putting up to 5% of our fiat, currency into a strategy like this on our balance sheets. I don't talk about that too much, but I'm letting you know I'm saying guys? We're in and let's have an operating company. It's sitting with, you know, 30 million dollars in cash. Let's put million and a half.
F into this strategy will open an account, you'll understand Works your the treasury. Let me show you how it works. How I'm doing it, let's disclose to their private. We just have to disclose to our LPS. What we're doing. I haven't anybody tells said to me, no, I don't want that. There are everybody wants to learn. So instead of making nothing on our cash, which were basically under inflation, we're losing money on our cash. You know, we're picking up. We're doing better than four-and-a-half. That was a few weeks ago, when corn was very stable. Now today, I can get seven, eight, nine, as you know. So it's
It's not
impossible. And so I think while I put five percent of the company's assets why not do more? If it's just yield, you're not taking the price for us. Necessarily in terms of the that's the goal
because the compliance departments are all in that. Let's tiptoe in, you know, that the concern, it's, it really is a three percent number. Right now, there are some at five, but the, here's the thing that everybody should understand that, I because I live in this world, the potential is huge.
Which you've got less than 1% of global corporations even thinking about crypto right now. So as time passes and they see examples of what I'm doing others are doing and they start to tiptoe in, you're talking about billions of dollars that are sitting on balance. She's making nothing. And so it's going to become that's good and bad news because the more money goes into that the less yield you're going to be making it's gonna be a lot of competition and so but right now I'm tiptoeing Through the Tulips, you know?
Almost double digit yields. I think it comes down, commensurate with the volatility. So you here's the thing, understand, don't want to get too complicated, but let's say when you put a lot of Bitcoin on your balance sheet, you're going to evolve. You're going to volatility the criticism of Tesla. When watching they showed on CNBC today, all the balance sheets that have, you know, crypto on it, they're all down because people like, oh, woe is me. They've got crypto, it's going to affect their balance sheet it does but at the same time they're loaning it out if they're smart and they're bringing in yield that they never used to make on their cash. So over time when people
Understand this little offset it.
I think people when they hear this going to be very surprised to hear that, you're buying the dip. You're getting into defy your earnings yield, right? Those are various fairly sophisticated strategies compared to just buy Bitcoin, right? Or hey, I want to buy a Mining stock, for example, because you're getting more and more in the weeds or a knife, over the last, like two years, maybe went from, hey, I probably shouldn't talk that much about this to okay? Maybe there's something interesting to 3% now. Like hey, let's start going further and further into the weeds.
Where does this goat like 10 years from now? Like, if you just fast forward, you say, okay, hold on a second. Like, there's a bunch of stuff that's to get built and get there eventually. It just a hundred percent of corporate balance sheets or, you know, in digital assets. And so there's digital dollars, but also Bitcoin ether, whatever there's yield, there's like a like a true decentralized Financial system that gets built here. Kind of right out underneath, the Wall Street, or is there coexistence like just like, where are we going? I guess,
I guess what's happening is
The money is looking for the most frictionless way to actually be productive. And so, the reason Defy is so interesting, instead of paying those crazy 200 bases to 2% fees at these wallets are charging. I don't need those guys for anything. Maybe I need a ramp to put my Fiat into ether or whatever. But after that, I don't need them and I can go and do this for a fraction of those costs on a decentralized basis. What got me into this was, we're always trying to find a place for our cash, like, when we
Found investment. We want some kind of yield on our cash and right now we have a lot of cash because we sold a lot of commercial real estate during just before the pain Deming it during it because I'm worried about what happens to all that office tower space. I'm not sure everybody's coming back the way they think. So one of the guys that works with Alex that runs all your adventures was one of our interns heavy crypto. Eric's is named, I'm not going to tell you a second name soon. Nobody bugs. And but he came to me said, listen, you got a ton of cash here. Why don't we start a fund?
A structured product that does exactly what we've been talking about. And I said, why is it going to be structured product? He said, because in the jurisdiction, we're going to put the fund where you invest the cash. They allow this. We don't allow it here in the US yet, but there's other jurisdictions like Switzerland and everywhere else and you just report your gains to the IRS says, you should have any other asset and he worked on it. He went way down the rabbit hole on it and he's still working on it. It makes still come to pass. But in the meantime I said to him
Eric, why don't you and Alice? Go find me a company that's doing this already. I don't need to have a fund, I got the cash, let's just buy the company and put it our cash on the balance sheet. If we have large enough shareholder, we won't care and is, which is what we did. And he so he found the company. He introduced me to these guys in Vancouver, you know, defy Ventures and I met the CEO and the whole team and I went. Wow. And I showed other investors. The team has said, hey guys, do you want to come in with me? Put this deal together and that's, that's
It's actually how it happened and along the way, you know, I ran into guys, you know, Josh Richards his partner animal Ventures, all those guys. We all looked at together to set, this is cool. So we're Partners on it, I think it's great. I mean he you know, he Josh is like some Phenom, you know, gen Z guy that wants to be part of this. So I said, okay,
who's better paying stocks? You were Josh?
We did it. We did it with wine the other day and he shouldn't even be
drinking. He's only 19.
But I met his parents online, he's a great cool kid. And you know Griff is partner and Michael gruhin and all those guys. We have fun together and I actually introduced some of the crew at CNBC and I said you got to get this guy on as the Gen Z guy. Like you're the crypto guy, I'm the institutional guy. He should be the Gen Z guy. He's very smart. I like him. And I said, you know, you want to come into a couple of deals with me. Let's work together and find some stuff and he's been back by some Heavy Hitters, you know. Yeah. Oh
yeah. I know the whole story.
I think part of what's. So fascinating is you have a lot of different worlds that Collide, right? So you've got wine, you've got watches, you've got Shark Tank, you've got commercial real estate, you've got your traditional kind of businesses and investing venture capital and then you've also got crypto. Yeah. And when all that comes together is a fair, just a state. Like, you're just looking for the best
opportunities you would be right. But you know, I'm like you, I want to enjoy what I'm doing. I want to get up in the day and say everything that Nancy is plotted for
The state including being here with you, I want to do it. I don't want to do stuff. I don't have to do anything, but I want to do stuff and I love working with entrepreneurs. I just, I like finding people and saying, look, don't do that because I've been there before and some mistake do this. I can help you here. I can help you here and let me come along for the ride, and let me bring in shareholders at vest beside me and let's do stuff together. I have a community of entrepreneurs that enjoy, like, you know, I work all day and all night and I love what I do and I get up and play the guitar in the
Of the night, I was wailing on the balcony the other day like two in the morning, I know they're pissed at me on the beach but it was just fun for a couple of minutes. It's enjoyed it, I enjoyed it. And so that kind of, you know, it's like live your life as if there won't be another tomorrow and try and make some money because it's expensive,
cashew somewhat personal questions, sure. Never asked you this before. Do you have like a number in mind that you would eventually say, you know what, I've had my fun but like, I am now Rich enough where like I want to walk away. Is there a milestone?
Or is it literally you're going to die working and you'll just never retire. You'll never have stopped. I'm not, I'm not
working for money anymore. I don't need anymore. I don't want to lose what I've got. And there's always another watch to buy. And so, you know, every the reason I do deals is in my world, you have to do a deal to buy a watch. So you remember what deal that watch was from and that's the collection. So I'm always doing deals to buy watches, that's basically the way I look at it. So I got a, you know, a massive watch collection now.
That Community is a very interesting Global Community. I've met some of the biggest collectors in the world. Some of the princes in the Middle East. I'm friends with them now because you know, we were on WhatsApp talking about different watches, it's a great Community to be associated with and when we find a rare piece, you know, everybody gets excited about it and it's just, I don't know, it's just interesting, I enjoy
it. So what is it? Why are you doing it? Is it literally just gonna watch?
Yeah, you know it's a good
question. You enjoyed. I know you won't laugh at this point now. I know you
This stuff. I did it but I'll tell you why I do it. I tried the other way I took on my first big score. The sale of The Learning Company is 4.2 billion dollar transaction, including the debt. There were 10 of us as Founders, we had all started in within middle class or, you know, no money and, and we'd work together for, you know, I don't know, 12 years or something. And then, that was a massive liquidity. And I remember when we close, we're in Cambridge, and we're sitting around a table just like this 10 of us, you know, having lunch.
We ordered in some lunch to talk and we closed the deal. So now we were funded and I said to her. What's everybody going to do? I mean like, you know, where they bought our company? They don't need us that we gonna do. And how old are you at this point? I think I was 30 maybe early 30s. Maybe 29. Okay. All right. So around 30. Yeah. Around 30, right? And I said, you know, I'm going to take, I'm going to take
I'm off. I'm going to go to Every Beach on Earth. I just want to go to Every Beach on Earth including those ones in Cambodia. Vietnam Thailand, you lose incredible beaches, the northern part of Cyprus, these all these legendary beaches and I did, it took me three years and at the end of it I was bored out of my fucking mind. I mean I just said this sucks, it was depressing. This is it this is all I do is go to beaches and sit there and get drunk. It's just boring and I got back in the game. I'ma just got I started doing deals like
Crazy and I put my Capital work and became an investor, not an operator. I I made some great scores, I made some cat, you know, catastrophic failures. I lost Millions, I made millions and then I got in the groove and I figured out what is it? I'm good at and you know and then the Shark Tank thing came along and that became a huge platform. Then the CNBC thing came along and it kind of just morphed into this you know like you know people know exactly I'm pretty transparent. Not everybody likes me. They think I tell the truth too much but you know
- I think it's good. But anyways, it is what it is at this point. So I'm kind of what riding the wave looking for opportunities Shark Tank? I renewed? Yes. 1307 announced 13 Seasons. I mean you know, nobody can believe what happened there. Like nobody. Nobody, I have another show. I taped a Telemundo here in Miami, which will be announced this week. I'm excited about it. But, you know, they said about to keep it a secret till maybe next week. I don't know when but tell him
Mondo is a tell you, I've never been to the studio before. It is the most modern studio in the world. It's completely digital. The whole thing is wired. Digitally even the signs are all digital, they can change anything temperature. And one part of the room, it's in its massive. When JLo rehearsed for her Super Bowl act, she did it in a soundstage their size of a football field. Wow. And I was taping right beside that when I walked and looked at him with this place, has his own weather Zone. It's so big the ceilings
So high. Yeah. It's just north of the airport. It's a massive
facility. Yeah. Shark Tank 13 season versus the first time you went on. Does it still just as exciting as it still just as fun or is it different now?
Well a few things have changed, first of all, venture capitalist have now figured out that
They get to a hundred million eyeballs for free. So you've got all of these VC back deals like with 50 million valuations, hundred million valuations and my attitude about that is I don't give a shit what your valuation is. If you want me as an investor, I'm carving my own deal and you don't have to take it, but it's going to be that makes me get a, get a special position because I had way more value than your VC does. Nobody knows who your venture capitalist is, they don't, they don't know the brand, who cares. They're all the same and they all want preference shares and all this stuff and I'm not saying they're bad people. I
Venture capitalist but I don't need them. I can't even raise my own money for my firms and my own way. And I don't like preference shares. I don't like shares that are sitting above me and have rights. I don't have that just pisses me off, so I don't use that stuff. So we get a lot of those companies. They'll pop, we got all these companies and safe, the only we could get on Shark Tank, right? So we get they have to weed a lot of those out because they're just gold diggers. Then we get some really interesting stuff on direct-to-consumer. Like there's a trend emerging in America.
Just take the food group, for example, low sodium, low sugar, low cal, totally healthy, like really eclectic verticals where people, you know, that really care about health will make a different kind of coffee or a different kind of peanut butter. And what I find what I what I see happen on those deals is when they hit the airwaves to sell 5 million dollars worth of it in one hour. Yeah. A lot of people are into that Health thing. So that's a big
Change that because the old days we just have pizza sauce and you know, just as hot sauce and yeah sauce and you know, now it's sauce with no sodium, totally fresh, no, preservatives all, that kind of stuff and things like that. And really they come in knowing what shark they want. They've know us so. Well now I want to deal with, you know, Damon and clothing or, you know, I want to do a financial thing with Kevin or whatever it is in anything in the wedding industry. That's me. I love love.
I want to leave with the best story from Shark, Tank. The you've ever told me, which is your best
investment, which is the potatoes? Yes!
Tell us the story and what happened since you did this
deal? Yeah. So it's called potato parcel. And it's a
company that I'm imagining Damon being here right now and just laughing his head
off. He and he did, he did.
This guy comes on and he says, I take a potato, a real potato and I you send me your image digitally and I am print your face on the potato and then I ship it to somebody for you in the u.s. mail.
And then they put the potato with the toothpicks in a little thing of water and the potato grows right through your face and it takes months to do it and crazy stuff happens, right? I said that's really, really stupid. I mean, that is incredibly stupid and what a stupid business this is and he said well what is it? You care about in business sales right? And I said of course but nobody would buy that crap and they said oh yeah look at this. He had like 30 percent growth a month and he was really
Good at SEO, he was really good on digital, really good on social. He was telling the story and I was sitting there thinking I'm never going to invest in this thing. So stupid and I said, too well,
How about I get a chunk of equity but I want a royalty. I
want a bullhorn on, you'd already seen one example of something stupid, yes money. Right. That's an important part.
Well, it's true. I saw, I want to draw a cat for you. Yes, which was the stupidest. Most stupid thing I've
ever, which one's Dumber, potato, header, I want to draw a clock.
Half using incredibly stupid. You pay a guy to draw a cat and then he mails it to you, like and Cuban invest in that made a fortune. I thought that is the stupidest to, because he had the song, right? He like
has any had a little song that's like a cat.
Like so I thought it's such a piece of trash what a stupid idea and it did a ton and it really really high margins because this guy would just sit down and draw a cat and yet other cat drawers, like so dumb. So when I saw a potato partial I said there's room in my portfolio for potato parcel company. Now remember on Shark Tank you calculate your putting out Capital so you really want the internal rate of return on that capital in really gnaeus Adventure. Investing its return of capital not return on Capital.
Capital you care about that thing aired, and I got my money back in, like, 45 minutes, rinse. So it has the highest return ever for me in a shark everything, because I had a dollar royalty on every potato and I own, I can remember what percentage. I forgot what I wanted the company, but that thing has has just spun cash and I got calls from CEOs of major corporations saying, listen, I want to buy 1500 potatoes for my Salesforce globally and ship them. And I want a discount. I say no.
There's no discount. I'm the only kid in town for
an awfully unfazed. We run. We are
nobody else. Puts a face on a potato. The way we can place our new gift box Pompey. Get a premium gift box. With a beautiful little label on it. In a gift package with your face, in the potato, and it comes to your door, and you just thrilled to death. We are pumping those up by the hundreds of thousands and there's no discount. I mean, this is the El Supremo potato.
Yeah.
So there it just
Shows you with the right social media platform, what you can do and and and these are real entrepreneurs a real business. It's not a bullshit business so it's made money. If possible. I shall tell you that,
huh, I'm proud of you. Because three years ago when I went on the CNBC set, if you hit me with you were forbidden, you're not at 50% yet. Yeah. But you're at three, maybe five, maybe. Well, you know,
you're headed in the right direction. Yet, we are. And I think we could eventually get we met
We may abandon our gold position which is significant. We pay the way we own gold as we own the GLD for rebalancing even though it's a more expensive. It's very liquid. But we also store gold and pay for the storage. So we it costs us money to hold an asset that has no yield. And that's the argument that the committee makes about the gold position. We've got saying, think about this, it's reversed interest. If gold stays flat, it cost us to own it. Why don't we just allocate 200 basis points of the gold?
Leo, just sell down RG, L DS, go to Fiat and then just buy in, you know? Yeah, of course, you know, whatever you can, you don't have to just buy Bitcoin but by a portfolio different at crypto, you know, crypto assets and then do the contracts and I'm opening up to it because proof is in the pudding. And so, it's just and you. And the weird thing is that in the you said earlier, you don't want to go back to Fiat. And so you're saying to yourself, I'm going to live with more and more.
Because you are as you build up that asset but you feel a lot better about getting yield off of it. Hmm. All of a sudden it's working for you while you're sleeping as opposed to most people think they just own Bitcoin in their wallet. Pay them ridiculous fees to their wallet which they don't have too many people are going to figure this stuff out. They're going to start to see D Phi can be a lot cheaper less and less friction, you can still be compliant. I don't want to break any laws. I want to be complied because I got a lot of other assets and that's why I want this version of
What we're doing in Vancouver with the you know the D 5 inches, guys. I want that to be compliant to the point. I just press a button to get my tax return. You know, that's how it works. Yeah. I mean it can't. So I'm very excited. I mean, obviously you've been riding the wave a lot longer than I have, but I'm caught up pretty damn
fast. You're coming along. We just got to get you to stop. The other thing, you said, one time was a crypto garbage, not garbage garbage, which is a little bit above garbage. I know, but I liked
it and it's now legendary out there and everybody Nails me with
A wall on that thing. They say it's a they say you're the guy that called it garbage.
All right ladies and gentlemen, my friend. Kevin O'Leary thank you so much. I really
enjoyed it. The time flies when I'm talking with you that's terrific. Take care everybody.
