I am hosting a few panels today at the Bloomberg Hedge Fund & Alternative Emerging Manager Forum.

We just did a version of this in San Francisco last month — these are always fascinating and informative. What makes these events so special is the Bloomberg special sauce — they have all the data needed to select the top-performing managers.

My views on Alts have only slightly moderated over the years: If you have access to a top decile fund, you should strongly consider it. As to all of the rest…

~~~

Here are the details:

New & Emerging Manager Panel
Discussion with new and emerging fund leaders about launching and scaling differentiated strategies, including AI use cases in investment processes and operations.

Featuring:

Paul Podolsky
Founder and Chief Investment Officer
Kate Capital

Michael Alfaro
Chief Investment Officer
Gallo Partners

Nadine Buckland
Founder and Chief Executive Officer
Zenzic Capital

Bloomberg:

The alternative investment landscape is evolving rapidly, with hedge fund managers navigating unprecedented market volatility, rising investor expectations, and accelerating advances in technology. The Bloomberg Hedge Fund & Alternative Manager Forum 2026 brings together senior leaders from hedge funds, multi-managers, family offices, and private capital firms for an afternoon of strategic insights, networking, and innovation.

As the lines between traditional and alternative investing continue to blur, this event will explore what it takes to stand out in today’s competitive environment—from launching a fund to scaling operations and embracing new approaches to data, research, and risk. Sessions will feature industry-leading allocators, emerging managers, and experts at the forefront of global macro strategy, AI innovation, and private markets expansion.

Should be fun!

Swing by if you are in town…

Previously:
Video: Bloomberg Hedge Fund/Alt Fund Manager (June 30, 2025)

Bloomberg Hedge Fund & Alternative Manager Forum 2025 (June 24, 2025)

Bloomberg’s Hedge Fund Forum 2024 (June 4, 2024)

The post Hedge Fund & Alternative Manager Forum 2026 appeared first on The Big Picture.

My morning train WFH reads:

• Anthropic Was Behind. Now It’s the AI Boom’s Front-Runner. After years as also-ran, startup pulls ahead in AI race after focusing on enterprise users and coding (Wall Street Journal)

•  We’ve calculated your chances of winning money on Polymarket: WaPo runs the math on Polymarket. Spoiler: the house always wins, but in a more sophisticated way than the lottery. (Washington Post)

• Trillions in Retirement Dollars Flow Into Opaque Trusts: The collective investment trust quietly eating mutual funds in 401(k) plans. Cheaper, less regulated, less visible — pick two. (Bloomberg)

• Appraisal Institute Is Being Sued By Experts In A Dying Field: Jonathan Miller on the appraisal profession eating itself as automated valuation models close in. The lawsuit is symptom, not cause. (Housing Notes)

• GameStop’s $68,000 Charizard Pokémon card saga is wild: GameStop’s foray into trading-card speculation produces one of the funnier markets stories of the year. Truly, this company will sell you anything. (Polygon)

• The Boxing Ring Where a VC Guy Pummels Opponents With Crypto Trades, Not Punches: James Parillo is a venture capital partner by day. At night he dominates a booming underground world of live trading competitions. Silicon Valley fight club where the combat is crypto trades. Peak late-cycle, peak self-parody, and worth reading anyway. (Wall Street Journal)

•  Pity the poor billionaires – demands for higher taxes must feel hurtful: Arwa Mahdawi at her sharpest, on the perpetual wounded-billionaire complex. Funny because it’s true. (The Guardian)

• Why saying hello to strangers can be good for you. Studies showing that simply chatting with strangers has a lasting impact: It can make the participants happy. Even smiling and waving hello to a vendor you see regularly can boost your spirits, says psychologist Gillian Sandstrom, who delved into the benefits of social ties after her own uplifting exchanges with a hot dog seller during a time when she was feeling really isolated. (NPR) see also Can having a dog boost your longevity? Here’s what science says. There is some research that suggests that furry friends may improve the health of their humans. Dog owners appear to live longer than non-dog owners, according to quite a bit of research. In a 2019 meta-analysis of nearly 4 million people published in the journal Circulation: Population Health and Outcomes, researchers found that having a dog was linked to a 24 percent lower risk of death from any cause during the study period compared with people who lived canine-free. The evidence is mixed; the experiential return is high. (Washington Post)

• The Democratic Senate Map Doesn’t Look So Bad Anymore: On how Trump’s second term has reshuffled Senate competitiveness in unexpected ways. The expert priors are getting reset. (Zeteo)

• ‘Treats its audience like adults’: why Moneyball is my feelgood movie: The latest in our series of writers paying tribute to their favourite comfort films is an ode to Brad Pitt and Aaron Sorkin’s lovably human baseball drama. (The Guardian)

Video of the day: Why Oil Will Never Hit $200

Be sure to check out our Masters in Business this weekend with Sheila Bair, former Chairperson of FDIC from 2006-11. She helped steer the agency through worst financial crisis since the Great Depression. Her new book is aimned at young adults and teenagers, titled “How Not to Lose a Million Dollars”

Will we snap back to the pre-war trend of RoW outperformance if Peace materializes?

Source: Jim Reid, Deutsche Bank

Sign up for our reads-only mailing list here.

The post 10 Thursday AM Reads appeared first on The Big Picture.

At The Money: Is SpaceX IPO Breaking Capitalism? (May 13, 2026)

Once upon a time, companies went public to raise money. Road shows, pitch decks, investor meetings — and eventually, you’d float some stock and IPO. That’s not the case anymore.

Full transcript below.

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About this week’s guest:

Dave Nadig is President and Director of Research at ETF.com, and he shares with us how investors should navigate all of these new products. Dave helped design and market some of the first exchange-traded funds. He is the author of  “A Comprehensive Guide to Exchange-Traded Funds” for the CFA Institute.

For more info, see:

LinkedIn

Twitter

Substack

~~~

Find all of the previous At the Money episodes here, and in the MiB feed on Apple Podcasts, YouTube, Spotify, and Bloomberg. And find the entire musical playlist of all the songs I have used on At the Money on Spotify

Transcript:

Barry Ritholtz: Once upon a time, companies went public to raise money. You’d go on a road show to pitch your story and drum up interest. You’d float a big pile of stock, and then you’re off to the races to go build your company. Turns out, that’s not really the case anymore. I’m Barry Ritholtz, and on today’s episode of At the Money, we’re gonna talk about the upcoming IPOs for trillion-dollar companies like SpaceX, Anthropic, and OpenAI.

Barry Ritholtz: To help us unpack all of this and what it means for your portfolio, let’s bring in Dave Nadig. He is president and director of research at etf.com, and he shares with us how investors should be navigating not only these IPOs, but what they’re gonna mean for various indexes, like the Nasdaq 100 and the S&P 500.

Barry Ritholtz: So, so Dave, you wrote a fascinating piece, and essentially you claimed SpaceX is breaking capitalism and indexing. W- what is exactly broken? Is it the IPO process, the index process, or both?

Dave Nadig: I gotta say I think it’s both. Sadly, I think it’s both. Uh, the IPO process I think most people can understand seems pretty broken, right? We now live in a world, uh, where, uh, the private equity space is where most of the growth in capitalism is captured, right? If, if I had a great idea, if Barry, if you and I were gonna just launch a company tomorrow, go raise a bunch of money and do something, we wouldn’t go to Wall Street. We would go to some private equity firm, and we would say, “Hey, we’ve got this great idea.” And they would say, “Awesome, give us 75% of your company for a couple million bucks,” and we’d be off to the races. And then when we need more money, we would go back to that same private equity person, who would probably connect us to their favorite private credit person, who would then loan us another $50 million for us to do the next stage of our business. And so on, until we’d accumulated so many shareholders, so many, so many mouths to feed, that if eventually we have to go public so that all those people can get paid. That is the reality of the modern IPO market, which works out pretty well for the private equity capital, but no longer really rewards the public as a public market the way it used to.

Barry Ritholtz: So, so let’s talk about that contrast between old IPOs that raised growth capital. You, you very much imply in, in your piece, “SpaceX Is Breaking Capitalism and Indexing,” which by the way, I stole that opening paragraph of, um, you, you very much imply that modern IPOs, uh, essentially exist to provide insiders and early investors with, with liquidity. So first, when did this shift occur? And second, is it an issue? Is it a structural problem?

Dave Nadig: Um, I, I think we can trace this back to pretty much every IPO since the g- the great financial crisis. I mean, I think any, any IPO in the last 15 or 20 years has followed a pretty similar pattern. We’ve seen this, the steady growth of the size of IPOs. They, they’re bigger and bigger and bigger companies. Now we’re talking about trillion-dollar IPOs. You know, when I went… In the dotcom era, the average IPO was about $120 million. That was the value of the company post-IPO, and the amount being floated averaged around 30 or 40%. So big chunks of these companies went public. People could assess them. They traded for a significant period of time, sometimes profitable, sometimes not profitable, and then they would end up in the hands of the public and in indexes, and that was a, that was a lengthy process. It took, you know, a year or two of being a public company for people to get familiar with you. That’s all sh- that’s all gone now, and so now what we have are these sort of headline-making IPOs of big companies, whether they’re, you know, a, a Klarna or a Reddit or now a SpaceX. Uh, and so everybody now feels like these are lottery tickets, that you wanna get in super early on the IPO, get some purported pop which no longer really happens, uh, and that that is your key to riches. Increasingly, what actually happens is the opposite. Companies come public. They trade down initially. Sometimes they ramp up. Tesla famously had a great first year after the initial sell-off. Um, so it’s not that all IPOs go this way, but it is no longer like the dotcom era.

Barry Ritholtz: So you mentioned SpaceX. People have described this company as kind of unique, in part because it involves commercializing space, uh, in part because Elon Musk still, despite the past couple of years, has a cult following, um, courtesy of, of his work at Tesla, uh, and then also because it’s just an immense valuation. Uh, what makes SpaceX unique or, or is it not unique?

Dave Nadig: Well, I don’t, I don’t want this to be about whether SpaceX good or SpaceX bad. SpaceX is unique for a bunch of structural reasons. It is already a multi-business conglomerate. It’s pretty rare we see a multi-business conglomerate come out as an IPO. That tends to be what you do after you IPO and start accumulating new companies. So inside the SpaceX wrapper, we’ve got Twitter/X, we’ve got Grok and xAI, which is increasingly now a data center story, I guess, and less a development of AI story. We’ve got the providing commercial internet, right? 9 million Starlink subscribers. That’s a very real business that makes real money. And then the near monopul- monopoly on at least, uh, United States space launch, uh, is, is, you know, virtually completely a monopoly now for SpaceX. So wh- whether that’s a great business or not, that makes it a bit unique already out of the gate. But more unique is how it’s coming to market. It’s only floating 5% of its stock, so 95% of this company will still be privately held after they float the IPO. And yet, despite that very, very thin float, uh, it’s getting accelerated entry into the Nasdaq 100 and is being considered for accelerated entry into the S&P 500. So we’re breaking all sorts of rules.

Barry Ritholtz: So, so let’s talk about the Nasdaq 100. Um, if you’ve been an investor in the QQQs as, as they’re known, uh, the Nasdaq-100 index ETF, you have done tremendously well over the past 15 years. Outperformed the S&P, outperformed just about every historical period, including the ’90s where the QQQs were just, you know, a giant home run, except for that little, you know, 83% crash at the end. Um, so, so what, what did Nasdaq do wrong in admitting SpaceX to the, the QQQs, and, and what should they have done instead?

Dave Nadig: Well, so what they did was over the spring they did what’s called a consultation, which is they go to all the people who actually pay for the index. I mean, important to point out, Nasdaq’s in a business. They license the S- the Nasdaq-100 to folks like Invesco to run the QQQs products that people know. And so they went out to all the people who licensed that index and said, “Would you be okay if we did this thing?” And everybody said yes, and so now we have new rules. What the new rules did was accelerate how quickly a company can get in if they’re very large, uh, to 15 days. It used to be six months. Um, and they’ve also, uh, changed how they think about the float. It used to be if you really floated a very thin amount of stock, they just wouldn’t consider you at all. Now at 5% float, they’re going to pretend that your float is 15% or 3x, just because of reasons. Uh, and, and then over time as the float increases, as shares come off lockup and more shares trade, that will ramp until, uh, 33% of the fund, the company is floated, at which point it receives full weight in the index because the Nasdaq-100, unlike most other indexes, is not free float adjusted. So normally if they didn’t do anything and they let SpaceX in, it would come in at 1.75 trillion. Instead it’s gonna come up at 15% of that when it finally launches, and then that will increase with every unlock. The percentage that the funds need will go up, and so it creates this kind of ramp that as more shares come out, there’s more guaranteed buying, which I gotta say feels like bag liquidity for the insiders.

Barry Ritholtz: What, what motivates them to do this? I mean, what harm would befall the index or the IPO or, or Nasdaq generally if they waited the six months that they’re supposed to wait for every other IPO?

Dave Nadig: I mean, basically none. The only argument you can make is that by having SpaceX in the ETFs, in the index itself, that people will be more attracted to that index, and therefore people will put more money in those funds, and ultimately that’s what people really care about. They want money tracking those funds. From a performance perspective, it’s not like every human being on the planet won’t be able to buy these shares the day after it IPOs. There’ll be a pr- I think if you wanna go buy 100 shares the day after the IPO, there’ll be a price-

Barry Ritholtz: Or the day of the IPO. You don’t even have to wait till the day after.

Dave Nadig: Right, there’ll be a price. Anybody will be able to buy it. So it’s not like it is this rarefied thing that can only be bought through this index. It’s gonna be everywhere. It’s gonna be like Apple stock. It’ll be easily tradable all over the world. So all this is doing is guaranteeing that existing money that is tracking that index will have to sell a whole bunch of other things in order to buy this new slug of SpaceX, which will be something like seven-ish billion dollars on that one day that they have to buy it all. So they’re just gonna be a big whale buyer in the market on one day. Uh, guess which way the price will go. Honestly, who knows, because who’s… Everybody knows this, so it’s gonna get front run.

Barry Ritholtz: So do you buy it the day-

Dave Nadig: Uh… before this? Do you wait until after this? It’s gonna be one of those get the popcorn moments in markets.

Barry Ritholtz: Is this an attempt to get ownership of SpaceX in an index before the S&P 500?

Dave Nadig: Sure. Uh, it’s, it’s a chance to build a pool of assets with a s- with, you know, a reasonable weight before the rest of the index world has piled on. Although we should point out Space, uh, S&P is now considering accelerating their rules too to include a company like SpaceX after six months. Not nearly as egregious, and the S&P has a committee that could say no, and they c- they always free float weight everything, so even if they did let it in early, it’s only gonna be in at 5% of its no- nominal real value.

Barry Ritholtz: Right. Yeah.

Dave Nadig: So what could happen in the S&P is much less dramatic, thankfully, than what could happen in the Qs.

Barry Ritholtz: So really this raises the question: Is this just a one-off, a one-time technical distortion, or is this gonna be a recurring tax on index ownership for people who don’t wanna play the IPO game, don’t wanna play the stock picking game?

Dave Nadig: Well, historically, I should point out the academic research would suggest that getting IPOs into your index earlier is bad for the in- in- the investor who’s standing there before the transaction. So, um, oddly, Vanguard’s CRSP indexes from the Chicago Research Center for Pricing, um, those indexes have, some of them are accelerated to five-day intr- induction after the IPO, and there’s been a study around that, and it says that’s kind of a bad idea. You’re very likely to, to be buying the pop and then sort of sitting on a long, slow decline back to what becomes some, you know, market value, market fair value. But the index tends to be the top tick. I think it’s very easy to create a scenario where you could see something like that in the queues as these IPOs get added. But again, given that everybody knows precisely when the trade’s gonna happen, which is market on close 15 days after the IPO, you’re probably gonna see the ramp up well before that because everybody’s gonna try to be the one selling into that index buying.

Barry Ritholtz: So how do you solve this problem? Is it simply a matter of adjusting this for the full float? “Hey, you’re only gonna put 5% out. Great. That’ll be reflected in, uh, in the waiting.” Or do you just follow your existing rules in terms of how soon we add an IPO, uh, to the index after it goes public so SpaceX has to wait the usual six months?

Dave Nadig: Well, y- you know, the question is w- the should here is for who, right? As an in- as an investor, as a lowly end investor, what this is doing is creating more differentiation between indexes than we have previously seen, right? So we’re gonna look at the world as it is now. Well, now the queues, the W- NASDAQ 100, is for sure the hyper IPO, get everything in fast, get every- get everything in big. As long as it’s listed on NASDAQ and it’s not a financial company, you’re gonna get it in the queues, and so that’s gonna be the go, go, go index. S&P is somewhere in the middle. They’re, they’re sort of trying to acknowledge this reality of the broken IPO market and maybe do things a little sooner. I would say most investors can probably ignore most of that because they’re adults in the room. And then institutions, I should point out, aren’t playing with any of this stuff. They all use MSCI indexes, right? And those have very static rule books that are very carefully adjudicated, and nobody’s even talking about MSCI changing their rules about this stuff. So what this means is we’re gonna have much more differentiation between what passive means, and as an investor, that means you can no longer just say, “I’m indexed, I’m fine.” You’re gonna have to have an opinion.

Barry Ritholtz: Huh, really, really fascinating. I, I’m, I’m deeply concerned about the everybody-knows massive buying clo- uh, on close for, for SpaceX. What does this mean for price discovery? What does this mean in terms of distorting the true, um, uh, demand and supply relationship?

Dave Nadig: Uh, it’s, it’s hugely distortive. Um, and the problem is that normally what you could say is something like, “All right, we’ll let this transaction get out of the way, and then things will calm down, and then everything will be… And then we’ll find out what prices really are.”

Barry Ritholtz: Mm-hmm.

Dave Nadig: Like when natural buyers and sellers actually show up in the market and have to think about it. The problem is that implies there’s some future s- time when we can say things are now normalized. N- I would usually have said something like, “Ah, three to six months things will settle down,” ’cause in markets three months is a long time. But I should point out, six months after this IPO, we get two things happening at the same time. Traditionally, when a lot of stock unlocks-

Barry Ritholtz: Mm-hmm.

Dave Nadig: …right, 180 days is a very common unlock window. And second, Nasdaq’s gonna have to rebalance the index again. And if those things time perfectly, we’re gonna end up with a bunch of shares unlocking, meaning the fligh- float might go from, say, 5 to 15%. At the same time, Nasdaq will have to take their exposure from 15% to, say, 45%, because they’re gonna be 3x whatever the float is on that rebalance. So we’re gonna have the exact same problem all over again as shares unlock and the index rebalances.

Barry Ritholtz: I assume the 3x was just for the thin IPO float. If that goes to 15% or 25%, it’s 3x again? That seems kinda silly.

Dave Nadig: Until it, until it hits a third, at which point obviously you’re at 100%, right?

Barry Ritholtz: Right.

Dave Nadig: So but that’s, that’s the w- it, it happens linearly, but as float unlocks, three times that amount gets added to the index until-

Barry Ritholtz: Why? What’s the motivation for that?

Dave Nadig: Because the N- Nasdaq-100 has never been free float adjusted. Now, it hasn’t usually mattered because nobody really cares that Nvidia is 95% float and Apple is 92% float, but the index has always just included them at 100%.

Barry Ritholtz: Right, which makes sense.

Dave Nadig: It’s only a, it’s, it’s only a problem when it’s very, very small, so what historically there’s been is a floor. If only 10% of your shares are floating, you don’t get to play at all. That’s what they’re getting rid of to replace it with this sort of weird multiplier effect.

Barry Ritholtz: It seems like, you know, we’re talking about, uh, an index, it seems like this isn’t a passive decision, and it’s coming from the folks at Nasdaq are making a very-

Dave Nadig: Active bet.

Barry Ritholtz: Hey, this Elon guy with Tesla was a giant win, and S&P was late to the party adding them. Let’s not make the same mistake with SpaceX. Is, is that the thinking?

Dave Nadig: Yeah, I, I think that’s exactly what’s going on. Uh, it, it will for sure be a marketing tool for the index, certainly if SpaceX tears out of the gate, which with all this buying, m- you know, is more likely now, right? Definitely puts some tailwind behind the s- price of the stock when you have these known buyers. That’s gonna just take some time to roll through. And, uh, look, I, I think it makes it a very active index. It already was. It has weird selections all through it, like non-financials, only on Nasdaq. It’s, it’s a bizarre set of rules. And, and now it’s got this weird timed trading thing that you just mentioned. I think this makes it very tough for anybody to think of this as a long-term buy and hold investment where everything will just work out in the long run. It’s now making some very active trading bets.

Barry Ritholtz: All right. So I’m gonna make you the philosopher king of index inclusion rules. What does that look like in terms of waiting period, minimum float, profitability, governance, um, a- and just do we have different rules for mega IPOs than regular IPOs?

Dave Nadig: I, I… If I was running the universe, if it was Dave Nadig’s index company, companies would have to trade for a year. They would have to have a year of trailing profitability, which is what the S&P currently has. They’re talking about getting rid of that, too. Uh, I, I, I would, I would free float adjust everything without question all the way down to nothing. Like, you can float 1% of your stock and you get a 1% presence. Like, I think that’s fine. And I would not count non-voting shares at all, period.

Barry Ritholtz: Huh. Fascinating, fascinating stuff. So for investors interested in the SpaceX IPO, there are gonna be a lot of trading anomalies around this IPO. It seems like the structure is very much, um, set up by Nasdaq and others to goose the price higher. If you’re a holder of Qs, well, maybe this has some impact around the edges. Um, some of it’s gonna offset, some of it could drive prices higher. But regardless, the IPO of SpaceX is gonna impact your passive index. I’m Barry Ritholtz. You’re listening to Bloomberg’s At the Money.

~~~

Find our entire music playlist for At the Money on Spotify.

The post At The Money: Is SpaceX IPO Breaking Capitalism? appeared first on The Big Picture.

• It’s not shameful, it’s savvy: The shoppers redefining how to save money on groceries: The de-stigmatization of Aldi and discount-channel shopping. The middle class is normalizing what the working class never had the luxury of pretending was beneath them. (NPR)

• Streaming, Toilet Paper, Underwear: Subscription Fatigue Is Setting In. As companies look to build cash flow and loyalty, everything from heated car seats to earthworm deliveries can become a recurring charge on your credit card. (New York Times) see also Did Streaming Subscription Prices Just Hit the Wall? Ted Gioia on whether streaming has finally maxed out consumer willingness to pay. (The Honest Broker)

• Half of US Home Prices Are at All-Time Highs. Half Are Underwater Since 2022: The bimodal housing market, in one chart. The “national average” is now actively misleading. Half of the country had a real housing recession that the national index hid. One variable explains why. (EPB)

• AI isn’t coming for your job. It’s coming for your mind: AI isn’t just changing what we do, it’s rewiring our brains as we use it, just like literacy did. We’re trading deep thinking for quick answers without realising the cost to memory and judgment. The people who thrive won’t be those who use AI most, but those who can still think without it. Baillie Gifford on the cognitive offloading already happening at scale and what it might cost us. The investment angle is interesting; the bigger point is worth sitting with. (Baillie Gifford)

• How a Job at OpenAI Became the Greatest Lottery Ticket of the AI Boom: Employees waited two years to sell their shares. Then, the company let them unload $30 million. (Wall Street Journal)

• America’s biggest career hurdle: being a daughter: On the unpaid caregiving tax — disproportionately borne by daughters — and what it costs in retirement savings. A real number, finally being measured. Millennial daughters are depleting their savings to care for aging boomer parents (Business Insider)

• At Gawker, They Battled a Billionaire. 10 Years Later, the Scars Are Still Healing: Ten years after Thiel sued Gawker into oblivion, a reckoning with what the case did to media — and to the people inside it. Their weaponized wit made enemies, minted stars and helped define the internet as we know it. A decade after Peter Thiel engineered the site’s spectacular collapse, Nick Denton’s diaspora is still shaping media — and haunted by what happened. (Hollywood Reporter)

• Stephen Miller in Retreat: On Miller’s diminishing influence inside the administration. Ideologues rarely survive contact with operations. The once-powerful aide’s influence has quietly diminished. (The Atlantic)

• What Ethiopian running says about the limits of human ability: A lovely essay on why one Ethiopian region keeps producing world-class distance runners. Genes, altitude, and culture in one stride. One school of training is highly personalised, technical and data-driven. The other is the one that wins marathons (Aeon)

• ‘Being offended isn’t the worst thing. Being poor is’: how Robby Hoffman became a controversial comedy sensation: Profile of Robby Hoffman, the working-class comic who’s becoming impossible to ignore. Genuinely funny, which still counts. She became a controversial comedy sensation, and one of the world’s most successful comedians, with a hit Netflix special, an Emmy-nominated role in Hacks and another opposite Steve Carell. But many of her jokes raise hackles. Is she a genius – or an edgelord? (The Guardian)

Video of the day: Strike Force Five Is And Always Will Be: Kimmel, Fallon, Meyers, Oliver and Colbert.

Be sure to check out our Master’s in Business interview with Howard Lindzon, known as “The Larry David of Finance.” He is General Partner at the seed fund, Social Leverage, he was one of the first seed investors in Robinhood, which IPOd at $30B in 2021, eToro, Manscaped, and Beehiiv. Previously, he founded Wallstrip, a daily online video show acquired by CBS (2007). He also co-founded Stocktwits, which pioneered the “cashtag.” Recognized by Institutional Investor as a “Super Angel;” his podcast is Panic with Friends.

The Rise of $100 Billion Companies

Source: Chart Kid Matt

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UPDATE:  2:47 pm:

Seems like it was a WordPress memory issue that has since been resolved…

NOTE: 11:07 am:
I have been having these really strange WordPress issues; what was published this AM was an older, prior version — I corrected it this morning to what was saved/scheduled last night at 11:05:53 pm, but it seemed to have dropped from WP

Here is the “Critical Error” message that has shown up…

The post 10 Wednesday AM Reads appeared first on The Big Picture.

• The Melt-Up: The Nasdaq 100 now has a higher return over the past 10 years than: Japan in the 1980s, the Dow in the Roaring 20s, the S&P in the 1950s. Still trails the 1990s tech run but it’s close Is this it? Is the melt-up here? How much crazier could it get? (Wealth of Common Sense)

• The Home Office meets the housing crisis: On the UK Home Office’s role in deepening the housing squeeze. The administrative state as housing policy by accident. (Chaminda Jayanetti)

• How AI mania is disguising big companies’ hit from Iran war — in charts: Biggest groups have gained $5.4tn in value since conflict began — but semiconductor sector accounts for most of the gains. The FT shows how AI-driven megacap returns are papering over Iran-war damage in the rest of the market. The headline index is lying to you. (Financial Times)

• The Factory Town Known as China’s Furniture Capital Is Fighting to Survive: A WSJ portrait of one Chinese export town getting flattened by tariffs and weak demand. The supply-chain map is being redrawn in real time. The U.S. lost much of its furniture industry to China years ago. Now, American tariffs and overseas competition are punishing manufacturers. (Wall Street Journal)

• The Slopification of Lunch: The fast-casual bowl as cultural artifact: cheap, beige, and aggressively undifferentiated. Esquire pokes at why lunch got worse. R.I.P. to the golden age of fast-casual dining. What the hell happened? (Esquire)

• The Emergent Self Loop: Kevin Kelly on how recursive systems develop apparent agency. A useful framework for thinking about AI, organisms, and your own habits. (KK)

• The Culture Crutch: How lazy social scientists and commentators use “culture” as a catch-all explanation to avoid the harder analytical work. How lazy social scientists and commentators use the c-word to avoid doing their jobs (Laissez-Faire, Laissez-Passer)

• New Research: Cognitive dissonance helps explain why Trump supporters remain loyal: “The researchers found a positive association between feeling bothered by the news article and expressing disbelief in the allegations. Participants who experienced higher levels of mental discomfort were more likely to claim the accusations were fabricated. This suggests that the denial is not just a calm rejection of information, but rather a direct response to the psychological distress of cognitive dissonance.” (PsyPost) see also Hundreds of Fake Pro-Trump Avatars Emerge on Social Media: The artificial-intelligence-generated fake influencers have surged on TikTok, Instagram, Facebook and YouTube in an apparent bid to hook conservative voters. In the months leading up to the midterm elections, hundreds of A.I.-generated pro-Trump influencer accounts have emerged on social media, featuring avatars posting at a rapid pace about the “radical left” and “America First.” (New York Times)

• Science Has Found Even More Ways Coffee Is Good for You: More positive nutritional findings on the world’s most-consumed psychoactive beverage. Drink up — selectively. A new study shows the mechanisms of how coffee modifies the microbiome, reduces inflammation, and influences mood. Even decaf has its perks. (Wired)

• ‘Tony’ Gives Anthony Bourdain the Anti-Biopic Treatment: The new Bourdain film aims for something stranger than hagiography. Whether it lands is another question. Blackberry director Matt Johnson’s origin-story movie cuts down on the hero factor by showing us the future icon as a Provincetown line cook with a lot to learn. (GQ)

Video of the day: Psychology of “Generation Jones”

Be sure to check out our Master’s in Business interview with Howard Lindzon, known as “The Larry David of Finance.” He is General Partner at the seed fund, Social Leverage, he was one of the first seed investors in Robinhood, which IPOd at $30B in 2021, eToro, Manscaped, and Beehiiv. Previously, he founded Wallstrip, a daily online video show acquired by CBS (2007). He also co-founded Stocktwits, which pioneered the “cashtag.” Recognized by Institutional Investor as a “Super Angel;” his podcast is Panic with Friends.

Trump disapproval reaches new high via WashPost-ABC-Ipsos poll

Source: Washington Post

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The post 10 Tuesday AM Reads appeared first on The Big Picture.

A proposal from the current administration is working its way through the U.S. Securities and Exchange Commission to end quarterly corporate earnings.

This is a good idea.

Unfortunately, the frequency is in the wrong direction. Instead of replacing quarterly earnings releases with annual or semiannual ones, the SEC should be moving toward monthly, weekly, or even real-time earnings releases.

It’s counterintuitive until you experience it: more frequent reporting makes the data less significant.

Shifting from quarterly to annual doesn’t reduce the focus on short-term earnings management – it intensifies it. Think Christmas: If earnings come out only once a year, it becomes a huge event filled with hoopla and volatility. Even twice a year becomes a hyper-focused earnings-management festival.

The last time I addressed this was in 2018, during President Trump’s first term. As I exhorted the SEC:

“Report earnings monthly, with the goal of eventually moving to a near real-time, daily, fundamental update. Technology is improving to the point where business intelligence software and big data analyses will make this automated. Indeed, some companies already do much of this internally.” (emphasis added)

My frame of reference was the asset management shop I worked at in the late 2000s and early 2010s. I saw firsthand what the pressure of quarterly reporting does to a company that only issues its performance report four times a year. Regardless of whether we led or lagged the benchmark S&P 500 Index, the phones and emails would light up with questions.

That focus on the numbers every three months was an unhealthy obsession among clients and employees alike.

When we launched our firm in 2013, we worked with several partners (Custodians, Analytics, Reporting, etc.) to give every client real-time access to see exactly how they were doing, whenever they wanted. The only caveat we gave them: “You now have 24/7 access to see your returns, tick-by-tick — but please don’t, it will make you crazy.”

For the most part, this completely defused the hoopla around performance reporting.

The state of Artificial Intelligence today can do the same thing for the heightened focus on quarterly earnings reports for Corporate America. Back in the 2010s, Artificial Intelligence was in its “IBM Watson playing Jeopardy” era. We were pre-Claude, pre-Gemini, pre-ChatGPT, pre-Grok, and pre-Perplexity. Today, AI is something everyone carries around in their pockets.

This is not unknown territory. In 2014, the United Kingdom dropped its reporting requirements from quarterly to semi-annual; it saw no benefit. There was no increase in long-term investments after mandatory quarterly reports were dropped.1

Less frequent disclosure only widens the information asymmetry between insiders and investors; we will see even more insider trading as non-public information becomes more valuable. Price discovery will deteriorate even further than it already has. Instead of unpredictability, markets will experience regular tsunamis of volatility.

If we really want to end this sort of short-termism, companies should unilaterally stop giving guidance. The entire gamesmanship of beating last quarter’s company earnings guidance would come screeching to a halt.

The owners of corporate America, aka public shareholders, have the right to know how well the companies they own are doing. This includes basic information such as sales, revenue, and profits. The goal shouldn’t be to make public companies look like private ones. If anything, we should aim to generate more information about private and public companies so that investors can make informed decisions about risk.

This can be implemented gradually: the first companies that volunteer to move to monthly, then weekly, and then real-time are given safe harbor protection from the SEC (for a short period) against shareholder litigation. Eventually, over a 5-ish-year period, all companies move earnings reports to real time.

The recent blowups in private credit illustrate what happens when reporting is less frequent, transparency is lacking, and information exchange between those managing these firms and their owners or investors is highly limited. Private-credit managers, BDCs, interval/tender funds, and flagship private-credit vehicles have experienced notable redemptions, markdowns, defaults, and even portfolio blow-ups over the last couple of years. It is not a coincidence that these private companies report to their shareholders annually.

The idea of automating the process of reporting earnings in real time seemed fantastical a decade ago. Today, it is no longer unimaginable – it has become obvious.

Previously:
Report Earnings Daily (Bloomberg, August 20, 2018)

__________

1. Impact of Reporting Frequency on UK Public Companies by Robert Pozen, Suresh Nallareddy, and Shivaram Rajgopal

We studied the effects of these regulatory changes on UK public companies and found that the frequency of financial reports had no material impact on levels of corporate investment. However, mandatory quarterly reporting was associated with an increase in analyst coverage and an improvement in the accuracy of analyst earnings forecasts.”

~~~~~

AI DISCLOSURE: I wrote this myself. I used CHatGBT to generate the graphics;  Claude to research various proposals, and Google Gemini to identify issues with UK changes in earnings reporting

The post Artificial Intelligence and Quarterly Earnings Reports appeared first on The Big Picture.

• Trade court rules Trump’s replacement tariffs illegal: A divided three-judge panel on the U.S. Court of International Trade concluded that Trump’s 10 percent global tariffs are unlawful. Same trade-court ruling, second take. Watch the appeal closely — this one could rewrite the playbook on executive trade authority. (Politico) see also Trade court strikes down Trump 10% universal tariffs: The U.S. Court of International Trade rules the across-the-board tariffs exceeded presidential authority. Markets noticed. (Axios)

• The Nominal Anchor Still Holds: The Inflation Trauma Lingers, but the Fed’s Credibility Endures for Now. On why long-term inflation expectations remain remarkably stable despite the headline noise. Reassuring for the Fed; less so for the gold bugs. (Macroeconomic Policy Nexus)

• Why It’s So Hard to Spot a Stock-Market Bubble: Jason Zweig on the cognitive traps that make bubbles invisible until they pop. The math is easy; the psychology is brutal. A sudden surge in share prices makes us all think we know what’s coming next. (Wall Street Journal) see also The Real Reason Everything Feels So Expensive Right Now: Despite reassuring economic data, many Americans say their day-to-day costs are still rising. (Slate)

• The whining meant it wasn’t about the pied-à-terre tax It was about being personally singled out: Jonathan Miller dissects the manufactured outrage from billionaires over Mamdani’s housing tax plan. The volume is the giveaway. It was about being personally singled out. “While I very much admire what Griffin has achieved and that he should be rewarded for being innovative, smart and clever (I listen closely to his economic insights), his reaction to the mayor’s video clearly wasn’t about the pied-à-terre tax. It was about being singled out for buying the most expensive home in U.S. history, which has been exhaustively explored since he closed in 2019. I thought it was a bad look for him to talk about pivoting to Miami, which he already did the last time the pied-à-terre tax came up in 2019. However, I have no doubt he meant it when he said it.” (The Real Deal)

• ‘Blissful ignorance’: Milken elite bask in glow of roaring markets: The Milken Conference is always a good index of how the buy-side is feeling. This year: euphoric, oblivious, very interested in private credit.  (Financial Times free)

• Want to understand the current state of AI? Check out these charts. According to Stanford’s 2026 AI Index, AI is sprinting, and we’re struggling to keep up. A clean visual tour of compute, capability, capex, and revenue curves. The shapes tell you more than any of the white papers do. (MIT Technology Review) see also The AI Labor Debate: Three Views on the Future of Work: AI could hollow out jobs, reshape them gradually, create entirely new ones—or do all three at once. The case for starting to act now doesn’t depend on knowing which. Carnegie lays out the three serious camps in the AI-and-jobs debate — substitution, augmentation, and reshuffling — with actual evidence behind each. Useful structure for a noisy argument. (Carnegie Endowment)

• U.S. intelligence says Iran can outlast Trump’s Hormuz blockade for months: The CIA’s read on Iranian endurance is at odds with the White House’s timeline. Worth filing for the next round of strait-of-Hormuz brinkmanship. A confidential intelligence community assessment delivered to the White House also finds that Iran retains a substantial missile and drone arsenal. (Washington Post)

• A Look Inside the Case That Enshrined Political Power for Billionaires: A walk through the Buckley-to-Citizens-United logic chain. The donor class did not get here by accident — it got here by litigation. After Watergate, Congress tried to curtail the role of money in politics. But a pivotal Supreme Court case nipped it in the bud. Years later, new details are emerging on how wealthy Americans were conferred with a “right to spend” on elections. (New York Times)

• Yankees pay tribute to ‘iconic’ John Sterling during, after win: “I still do this, and my coaches look at me like I’m nuts,” Boone said Monday. “I don’t even know if they know what I’m doing. But as soon as the final out is made and I get up to shake players’ hands, I go, ‘Ballgame over! Yankees win! Theeee Yankees win!’ And I’m shaking all my coaches’ hands. I got goose bumps thinking about that.” (ESPN) see also Broadcast booths around baseball tip their caps to John Sterling: The baseball world lost a legend on Monday, with longtime Yankees radio voice John Sterling passing away at 87. After more than three decades of calling Yankees games and injecting his one-of-a-kind personality into every moment, Sterling will leave a legacy in both New York and baseball on a larger scale. (MLB.com)

• The Stephen Colbert Exit Interview: “I Did Not Expect It to End This Way” As ‘The Late Show’ nears its final bow, the host opens up about the cancellation that shocked the industry, the win of going out as a “martyr” and his next act in Middle-earth. Colbert reflects on the abrupt cancellation of The Late Show and what it says about the slow death of network late-night. A more candid exit than the genre usually allows. (Hollywood Reporter)

Video of the day: Why Nobody Wants the Chrysler Building

Be sure to check out our Master’s in Business interview this weekend with Howard Lindzon, known as “The Larry David of Finance.” He is General Partner at the seed fund, Social Leverage, he was one of the first seed investors in Robinhood, which IPOd at $30B in 2021, eToro, Manscaped, and Beehiiv. Previously, he founded Wallstrip, a daily online video show acquired by CBS (2007). He also co-founded Stocktwits, which pioneered the “cashtag.” Recognized by Institutional Investor as a “Super Angel;” his podcast is Panic with Friends.

Wall Street bonuses hit a new record last year, edging toward $250,000 average

Source: Sherwood

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The post 10 Monday AM Reads appeared first on The Big Picture.

The transcript from this week’s MiB Howard Lindzon, Social Leverage, is below.

You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, Spotify, YouTube (video), YouTube (audio), and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.

~~~

Masters in Business with Howard Lindzon, Hosted by Barry Ritholtz on Bloomberg Radio

00:53  Howard Lindzon: Wow. If only my kids could hear

00:55  Barry Ritholtz: That. I know. They think you’re just an old man. They don’t even

00:58  Howard Lindzon: Know it. They wince.

00:59  Barry Ritholtz: Show, use the finger and ask for pity. Surgically reattached.

01:05  Howard Lindzon: Surgically reattached is a lesson of how lucky we are. What we’re you’re I’ve lived without a acute pain. Like first of all, when I, when I cut it off. It’s amazing how many people do do that.

01:19  Barry Ritholtz: Was it still dangling on or was it severed completely?

01:22  Howard Lindzon: You pick it up, you call 9 1 1 and you go As a Jew. I wasn’t sure if I boil it or freeze it. So that was the question I asked. 9 1 1. ’cause it’s never happened.

01:31  Barry Ritholtz: Well, as a Jew you were only supposed to take the tip off. Not

01:33  Howard Lindzon: The whole thing. I don dunno. If you cook it, I don’t know if you freeze it. It’s like lobster. So the woman on 9 1 1 said to Please don’t bleed out. I go, that is not helpful right now. Now as luck would have it, I live on Coronado. Good

01:48  Barry Ritholtz: Advice. Yeah.

01:49  Howard Lindzon: Out. Good advice. I’m like the one guy, hold on time. I call, write down, call 9 1 1. I go, let’s not talk. Get me a machine over to my house. Get me a robot. So living in Coronado is a magical place. You’ve been there couple times. And, and the great news about Corona is the Navy Bays, Navy Seals are there. It’s like the, it’s the greatest place.

02:05  Barry Ritholtz: They have a hospital right there. They

02:07  Howard Lindzon: Do, but I’m saying there’s cops and firemen everywhere.

02:11  Barry Ritholtz: Everywhere.

02:11  Howard Lindzon: Right. So literally as I’m dialing 9 1 1 IC it’s like they knew I cut my finger off. So, so as a miracle would have it. The the, the young. I’ve never really had to be in an ambulance themselves. Right. So, again, I’m lucky. And they took me off island ’cause they found a hand surgeon who turned out to be 30 years old, which freaked me out. Right. Because I thought he’d sew it on backwards or whatever. Right. Anyways, long story short, you know, I was at peace. Once you realize you’re gonna live. Yeah. ’cause it’s, I’ve never had that happen. Like, something like that happen

02:41  Barry Ritholtz: Was, were you gushing blood?

02:42  Howard Lindzon: Was it frightening? Yeah. Yeah. I, as a favorite of my wife, I went to the neighbors to bleed. So it was like the next day it was spotless in front of our house. Right. But as luck would have, everybody did a great job. The, the, the amazing thing, we make fun of so many things in America these days. The emergency system, I needed it. I don’t care what I pay in taxes. It was, it was amazing right

03:06  Barry Ritholtz: Now. And you still have 10 fingers?

03:08  Howard Lindzon: Yeah, I have 10 fingers for now. The joke in the family is, I don’t want it ’cause it’s kind of like a dead finger at this point. Oh

03:14  Barry Ritholtz: Really? Oh, will it be functional? Will you regain function?

03:17  Howard Lindzon: It feels like if I, if I’m using it, it just feels like a, a wet skin.

03:21  Barry Ritholtz: Right.

03:22  Howard Lindzon: And so I’m not happy, but the doctor was like, you can decide later. It was his, it was his

03:28  Barry Ritholtz: Fault. If you want a prosthetic or

03:30  Howard Lindzon: No, not a prosthetic. If you just want to work with a nub, it’s only a third of the finger. Right. So anyways, it’s, it was traumatic, but here we are. Wow. Alright. Yeah. There’s great stories. If you’re a storyteller. Yeah. Cut a finger off. I mean, if you want traffic on Twitter, bleed out.

03:48  Barry Ritholtz: Yeah. You, that’s, you get traffic. But no engagement. That’s the problem with Twitter. I wanna go

03:51  Howard Lindzon: Viral. I got nine chances. Well,

03:55  Barry Ritholtz: 21 if you wanna be accurate.

03:57  Howard Lindzon: Toes are not good in the operator. No fingers are good.

04:00  Barry Ritholtz: And 21, the 21st. No, go

04:03  Howard Lindzon: The 21st. You, you could be president.

04:07  Barry Ritholtz: So let, let’s roll back a little bit and, and start with your, your early education bachelor’s from Commerce University. Bachelor’s in Commerce from the university at Western Ontario.

04:23  Howard Lindzon: Yeah. It’s a famous business school for

04:25  Barry Ritholtz: Canada. MBA Arizona State and then famous

04:27  Howard Lindzon: For bums. Arizona State Business School. What does that even mean?

04:32  Barry Ritholtz: And then masters at Thunderbird School of Glen Global Management, which

04:35  Howard Lindzon: Was a great school now owned by Arizona.

04:37  Barry Ritholtz: Arizona State. And a great animated cartoon in the sixties and

04:39  Howard Lindzon: Seventies. Correct. Correct.

04:40  Barry Ritholtz: So, so what, given all that, what was the original career plan?

04:44  Howard Lindzon: Comedy? Yeah. I grew up

04:48  Barry Ritholtz: You and Martin Short, right outta Canada. Right.

04:50  Howard Lindzon: Not mine. He was already older. But I grew up in Toronto and that was, so when I was 75 watching Johnny Carson on my first tv, you saw everybody and it was like your living room. Right. And so it’s, Toronto had Second City. I had John Candy, Martin Short, Eugene Levy. Second City was before Saturday Night Live. And, and so I grew up just

05:11  Barry Ritholtz: Surrounding around the same time, weren’t they 74

05:13  Howard Lindzon: Little earlier. Yeah. Yeah. Three earlier. So I’m like 12 years old giggling, you know, and there was no internet. So you were like, go to the comedy clubs with your friends. Toronto had this clubs called Yuck Ys, which was a famous chain. Yes. Like the improv but of Canada. And you had Mike Myers,

05:31  Barry Ritholtz: Another Canadian. Yeah.

05:32  Howard Lindzon: Everybody exploding onto the scene at, at the same time. And so I was doing standup in high school, get out, but not good obviously. But Mike Myers would come, come up. Mike Myers would come up and kill. He was like 17 years old. Right. Jim Carrey’s. 14 years old. Right. And

05:49  Barry Ritholtz: Killing.

05:49  Howard Lindzon: Right. And so everybody wanted to be a comic. No different than like the Web 2.0. Everybody went to Stanford to be an engineer. Right. At certain, in nineties it was investment banking. Right now it’ll be robots and ai, it’s just what’s in the water. And I grew up with comedy in the water. And so that was the goal. And obviously, you know, with Jewish parents at the time, that ain’t flying. Right. Especially I wasn’t good. Right. And so I went to school.

06:15  Barry Ritholtz: You, you dropped that. You weren’t good as like an afterthought. I think if you’re successful and earning a living. Well I wasn’t even a Jewish parent will put up with you being

06:26  Howard Lindzon: Stand up. No, it would be nuts if

06:27  Barry Ritholtz: Warn like Jerry Seinfeld’s mom is fine with it. Yes.

06:30  Howard Lindzon: But I’m saying now, if my son came in and said I’m gonna go hit the comedy tour, I’d warn ’em how dark it is. But I’d say go make it. Go on YouTube. Like

06:38  Barry Ritholtz: Right. Go do you don’t to 10,000 hours. Don’t, don’t have to live in motels to

06:41  Howard Lindzon: Do 10,000 hours. Yeah. The faster you get those 10,000 hours and the better.

06:45  Barry Ritholtz: That’s right. So you grow up in Canada. Yeah. You start your career in Phoenix and San Diego and New York City. Yeah. I’m curious. That’s an interesting, you know, Toronto, Phoenix, San Diego, New York. Yeah. Yeah. How did that geographical upbringing affect your perspective as an investor?

07:06  Howard Lindzon: Oh, as an investor, I don’t know. Because as a, as a kid I was lucky. Yeah. Because if you’re Jewish in Toronto or New York at that area, you go to Florida, you know, the original Del Boca Vista. And, but my dad was different and he discovered Phoenix. And so in the eighties, like Phoenix was like swamp coolers. And he just liked the weather. And I don’t know,

07:29  Barry Ritholtz: I’ll let you on a little secret. The weather in Florida ain’t great. It’s humid. It, it

07:34  Howard Lindzon: It, well to my dad, obviously that’s the way he thought. It’s cold. It’s, yeah. So that’s the way he discovered Phoenix and bought a home. And I liked golf and biking. And so lucky for me, we had a, I went to, instead of going to Florida, we were going to Arizona. And so I would go to the football games as a kid and I was like a SU that was my dream giant is just, just, just go to Arizona State University. Which I ended up, you know, doing for grad school, which isn’t a great grad school, but it was party school. But that was my dream. Get outta Canada. Right. So I got lucky. I, you know, my parents exposed me to, you know, Arizona and I went to a SU at the time. It was amazing. And then if you’re Jewish in Phoenix, ’cause of the summers, right. It’s, it’s like New York goes to Florida in the winter. Jewish people in Phoenix go to this, go to San Diego in the summer to get out of

08:24  Barry Ritholtz: The right. They wanted, it’s closer to the ocean. It’s a nice weather. It’s

08:27  Howard Lindzon: Six hour drive and it’s 70 degrees.

08:29  Barry Ritholtz: And I love La Jolla and that whole area is amazing. So the whole,

08:32  Howard Lindzon: It’s called Zs. So Arizonans flood San Diego to to Del Mar. I wish. And so we grew up, Coronado not grew up, sorry, I I, my in-laws had a place in Coronado. And so when we had kids, I’m like, get out of the heat. If you’re not rich, you

08:48  Barry Ritholtz: Summered in Coronado.

08:49  Howard Lindzon: Yeah. We would, not summer, but a week here, A week there.

08:51  Barry Ritholtz: I wish California wasn’t six hours away if it was two hours away. A hundred percent. We were just in San Francisco.

09:00  Howard Lindzon: It’s fun again,

09:01  Barry Ritholtz: It’s a boom town. Yeah. Tales of an apocalyptic hellscape have been wildly

09:05  Howard Lindzon: Exaggerated. It’s, it’s still not my fa but it’s cool. It,

09:07  Barry Ritholtz: It’s less homeless than New York.

09:09  Howard Lindzon: Yeah. I’m not, I’m not just talking about homeless. The people are still,

09:13  Barry Ritholtz: They’re educated. Yeah. They’re intelligent. I mean if you’re, if you lose, if you’re

09:17  Howard Lindzon: Used, it’s not New York man, York City. It’s not New York. You

09:20  Barry Ritholtz: Could, you know, when you leave New York, I, I I I don’t know about you. I make a conscious effort to not be that New York abroad, even out of Yeah. It’s fun out of town. Yeah. California, especially San Francisco. San doesn’t feel like you’ve left town. I

09:41  Howard Lindzon: Love it. Yeah. I mean, I just have the California bug. Yeah, same. But coast to coast is a dream and I get to live it. So

09:47  Barry Ritholtz: It, it’s just a lot of travel.

09:48  Howard Lindzon: The thing about, and I do like Florida a lot, but same as you six hours like Phoenix or San Diego, Florida is like not on the map, no brainer. Right. It’s no, no one does it. Right. Like it’s not a thing.

09:59  Barry Ritholtz: Right. No. Phoenix to San Diego makes sense. Yeah. Phoenix to Florida, just like New York to Florida makes sense. Correct. New York to, so

10:07  Howard Lindzon: You asked, so you asked how that happened. Yeah. That’s the rite of passage. Instead of Toronto, Florida my whole life, I jumped to the West coast and then I discovered San Diego through my in-laws and my wife and man. Yeah. Well you’ve been to Coronado, it’s, oh yeah.

10:21  Barry Ritholtz: It’s ridiculous. Yeah. So let’s, let me, let me wrestle this. Yeah. Yeah. Back into submission. So you’ve worn a lot of hats. Yeah. You are a hedge fund manager, a founder, a CEO, a seed investor. A media personality. Yeah. How do you describe to people who don’t know you, what you do?

10:38  Howard Lindzon: It’s a great question. My in-laws are in their eighties and they, they still ask me, what do we tell people you do? And I’m like, who the hell cares? Well, and the world’s now decided that for you, no one cares. Right. So what do you do? Right? Like I think we’re getting back into like where it’s, it you should be proud to have like a, what do you call profession? I don’t have a profession. So you asked how I got started as an investing. I got started as investing ’cause I failed at everything else. And which is kind of the Larry David part of it is like, I stumbled into it because the internet is like water. It’d be like discovering California. Like internet was like tech. So the nineties were like, I didn’t understand it was semiconductors. Right. Were full circle. You’re

11:21  Barry Ritholtz: Not a coder.

11:22  Howard Lindzon: I’m not a coder. I don’t even know how things work. I never did Radio Shack. Right, right. Like, so the odd, I like walkie talkies were freaking me out. So the odds of me being in tech are, are, are part of the comedy full circle. We are now back in a tech world. Robots, chips, like real stuff

11:39  Barry Ritholtz: Global. They get a little secret. We never left. It just kind of fell out. Favor.

11:43  Howard Lindzon: No, I, I found the goofball era. Web two was the goofball era where you and I were social media. You could be the class clown and have scale. Okay, now that’s gone again and class clown. You, now you need to be a bully again. It’s, it’s, you need to already have distribution.

11:58  Barry Ritholtz: Right. It’s hard to build distribution today. So I’m

12:01  Howard Lindzon: Saying when

12:01  Barry Ritholtz: Being an early adopter is certainly an advantage,

12:04  Howard Lindzon: It’s super. But now it, it doesn’t matter. You have to have real tech chops. Again, you can’t pose like I am, like I have imposter syndrome for the right reasons. Right. Because I’m an imposter. Meaning the internet left a little opening in 2006 for goofballs. And we got to participate in an era of free growth. When Facebook didn’t charge you or have an AI algorithm that blocked you. You could say whatever you want. People go, he’s funny and you could scale for free. Which is why we had an internet boom. Web 2.0, internet boom right after the internet crisis. Now we live in an era where those people are confusing their genius for a bull market. Right. And we’re all sick of those people.

12:44  Barry Ritholtz: Can can I push back on you a tiny a little bit? Sure. ’cause I know you for so, so well, for so long hold the imposter syndrome aside. The early internet rewarded people who could communicate effectively, be it work your way through the media, be it blogs or short form blogs like Twitter or other social media or podcasts or video and YouTube. There’s a whole run of different ways to use the internet to scale. Yeah. So it’s not an imposter. You basically just kept tacking into what was working. Oh, this works. Let’s do more of it. Of

13:37  Howard Lindzon: Course. But the era was free. So you had the great financial crisis. No one thought effort, the internet was gonna happen. So meaning Uber couldn’t be possible without Google maps. Right. Like people say Uber’s great. It wasn’t possible unless there was an iPhone. The cloud

13:54  Barry Ritholtz: Maps or media five global

13:55  Howard Lindzon: Process, people would be taping, I want a taxi without Google Maps, no one would know where to go.

13:58  Barry Ritholtz: That’s right. And all of that only worked because of the bubble and the build out of global crossing and metromedia fiber. So I’m saying a thousand dollars a mile bought for pennies.

14:09  Howard Lindzon: No, but my imposter syndrome is born of, of course I have an ego, but my imposter syndrome was surrounded by crazy people who, who are mistaking. As I was talking to Tim O’Brien, if this was, we went from a world where strength matter, not that long ago world. That

14:24  Barry Ritholtz: A century world, not even a century, a world where

14:25  Howard Lindzon: This matters.

14:26  Barry Ritholtz: Right? No, you And

14:27  Howard Lindzon: I’m like, people just, the humility is gone. And I feel it’s with my kids and everything. It’s with the injury and everything. You have to have some humility. We need to get back to having some humility and laughing at our success and going, wait a minute, it was a bull market. Zero interest there erp, there was the free internet. Aws, right? You had YouTube, you had, if you d here’s my question. If you aren’t successful, that’d be more interesting. I want to talk to the guy like the Larry David commercial with FTX. I mean he is like, right. Oh, the circle who fire,

15:01  Barry Ritholtz: Who needs a wheel? Who

15:02  Howard Lindzon: Needs fire? That was such a great commercial. ’cause only Larry, David or f you know, I know the guys who wrote the commercial that what made that commercial great is Larry David gets the joke. Right?

15:13  Barry Ritholtz: You idiots. He’s in on it.

15:14  Howard Lindzon: You’re in on the fact that of course you made money, you worked at Facebook, it grew because the product was genius and tricked people into signing up. You did nothing except ride the the train. Now, I’m not saying smart people didn’t work there, but let’s remember Game of Thrones we’re all dead. The people that are successful today are Mark Andres and Shaman. The people that I can’t like, are hilarious to me. They have no humility is that Game of Thrones. There we’re all dead. First, second, first scene. Right. There’s a hammer in our heads and, and you and I might have a chance ’cause we’re the court gestures,

15:48  Barry Ritholtz: Right? That’s right. And

15:49  Howard Lindzon: If we dance well enough,

15:51  Barry Ritholtz: Dance with me Monkey boy. But

15:52  Howard Lindzon: Andreessen dead. Right? Jamag dead. Right. There’s just a pitchfork in their foreheads on the first scene of gladiators.

15:58  Barry Ritholtz: Well, if you, you know,

15:59  Howard Lindzon: So that’s the,

16:00  Barry Ritholtz: You have people like Da Vinci that were consultants to the king to help build weapons and things. So unless you can, you know, early days, days of Palantir. Unless you can say, sure. Hey, here’s how to make a better catapult. Sure. You know, those guys survive.

16:16  Howard Lindzon: So I’m saying I come along with like tweeting stock twits. Like, it was just enabling communication. Listen, I’m very proud of this stuff. Yeah. But I’m also can laugh about how stupid it is. Like I don’t have another trick. Like the internet left this opening. Kind of like discovering California, if you’re early to discover California made it pass the Indians and the mountains. Right? Didn’t get robbed by like

16:39  Barry Ritholtz: Murdered stampeded cash.

16:41  Howard Lindzon: Like right, let’s carry all our money in a stage coast pulled by horses at three miles an hour. What are the odds we get killed? Right. It’s impossible. So the internet left this opening and I snuck through it. And it’s fun to look back with some humor at the whole thing. You, you’re gonna let, I think the hole’s closed up.

16:58  Barry Ritholtz: Like Elon

16:59  Howard Lindzon: Owns the pipes. Zuckerberg owns the pipes. True social owns their version of a pipe. TikTok has an algorithm. How do you break

17:07  Barry Ritholtz: Through? Because those things get tired. And the next gen says, but there’s no scale. Just the way fa just the way Facebook became, oh, my parents are on Facebook. I’m out. I’m gonna go to Insta and then I’m gonna go to TikTok. And so there’ll be something new.

17:21  Howard Lindzon: You’re not questioning that. I’m just questioning. It’ll never have been e it’ll never be easier than when I made money. And I’m cool with that. I’m like, that’s the imposter

17:30  Barry Ritholtz: Syndrome. I don’t disa completely disagree with you. And you’re touching on a pet thesis. I love to ask, what would’ve happened to you had you been born a hundred years earlier or even

17:42  Howard Lindzon: Dad first

17:42  Barry Ritholtz: Seen, or even 25 years earlier. Right? Yeah. If you are born in 1940, what happens?

17:49  Howard Lindzon: I’m a furrier. Look at my ox mo

17:56  Barry Ritholtz: Beaver peltz. Look at my fur. I have all these beaver PEs.

17:58  Howard Lindzon: I have a, a cafe that has so many dishes on it that make no sense. Right. And I’m selling furs some, right. I mean, I had no shot. I have no

18:06  Barry Ritholtz: Strength. Right. Right. Just think about how fortunate you were. I cut my

18:09  Howard Lindzon: Own finger off.

18:09  Barry Ritholtz: Right? So if you didn’t bleed out your nine finger had forever. Well, but have watched to show the nick, you stick, you stick your finger into the fire and you ize it. That’s what the old timers would tell you. Get a bo get a piece of steel in the, in the fire. They’ll heat up the iron. You just burn it. And that’s your nine. All

18:28  Howard Lindzon: I thought about

18:28  Barry Ritholtz: Was like, Howie,

18:30  Howard Lindzon: What’s the, what’s the, is the ambulance gonna charge too much? And should I bleed at the neighbor’s house? Those were my first two thoughts. My wife will kill me that I’m bleeding in our yard.

18:39  Barry Ritholtz: Oh wow. Let’s do segment two. And I have to start by asking about social leverage. You’ve, you’ve been doing this for 20

19:30  Howard Lindzon: Years.

19:31  Barry Ritholtz: Yeah. So how from the first seed fund you did to today Yeah. Where you have a portfolio of 150 plus companies. Yeah. How has this evolved? First of all, what was the first company you invested in?

19:42  Howard Lindzon: So the first company I invested in was the, was so dumb car, cars direct 1998. The tippy top. As my wire left digitally, my fingertips or whatever bank it was coming from. It was worthless. Right. Meaning like it was a series Q

20:01  Barry Ritholtz: Right?

20:02  Howard Lindzon: It was But

20:02  Barry Ritholtz: You were just early. This was Yeah, yeah, yeah. pets.com eventually became, but I

20:06  Howard Lindzon: Was late in that cycle. ’cause was

20:08  Barry Ritholtz: Carvana would’ve been. Yeah. So

20:09  Howard Lindzon: I was a retail idiot. So I grew up, like I said, I went to a SU You’re gonna be a furrier. Right. That’s your chance. And so in a bad one. ’cause you know, so the internet comes along. I fall in love with stock market ’cause I had made some money at my, at my first startup and I had to be my own broker. And so Yahoo Finance, jim cramer street.com. Like they’re still around. Right. So, so those were my onboarding. Were the, were you were writing for the street.com.

20:37  Barry Ritholtz: So I was they were the dominant, like people who were younger. Don’t realize by the way, that

20:42  Howard Lindzon: Still massive. Right? Kramer’s still massive.

20:44  Barry Ritholtz: I I think the street.com doesn’t get the traffic. No,

20:47  Howard Lindzon: But Kramer’s

20:48  Barry Ritholtz: Massive. Well, yeah, well he’s on TV twice a day. But

20:51  Howard Lindzon: I’m saying this is 30 years. Yeah. So that was my imagine the introduction to retail investing. ’cause I couldn’t afford a Bloomberg. Still can’t. Right. So I think you can, I can afford afford the

21:00  Barry Ritholtz: Drapes. I think you could afford a Bloomberg Post. I

21:03  Howard Lindzon: Could, I wouldn’t know how to use

21:03  Barry Ritholtz: It post Robin Hood exit.

21:04  Howard Lindzon: I wouldn’t know how to use it unless there’s a phone line. What? Especially

21:07  Barry Ritholtz: Huh. Church. Especially with fingers. How you need all 10 fingers for the terminal.

21:12  Howard Lindzon: So, so I was inspired by you that street.com had murders, row of writers. It’s amazing to a new investor. Yeah. I just would sit and wait for articles to come out and Yahoo Finance. So I was on the message boards. Pearlman you like we were, the first download was on the message board

21:27  Barry Ritholtz: First. So Cars Direct was your first investment.

21:29  Howard Lindzon: And 10 years later I got 10% of my money back after it being successful. So, so my first thing was a disaster. What

21:37  Barry Ritholtz: Was your first successful investment?

21:38  Howard Lindzon: So my first successful investment was a cold call that I made pre-internet in a, in a company I probably talked about in the last show called The Grip. It was the, so Q So I had the good fortune of being an hour before the internet, before the internet, an hour before the internet. The thing before the thing was QVCI

21:57  Barry Ritholtz: Recall. Okay,

21:58  Howard Lindzon: So before the internet still on

21:59  Barry Ritholtz: TV

22:00  Howard Lindzon: QVC was the interim, right? Meaning there was the whole of Philadelphia was just old people on the phone saying, yes, yes, we’ll take your order and your credit card. Right? And if you were on QVC was a studio like this, what

22:11  Barry Ritholtz: Was the grip?

22:12  Howard Lindzon: And we had a product called The Grip. I recall this and it’s in the QVC Hall of Fame. So I made a cold call while I was a stockbroker to this kid. I thinking he was rich. ’cause back in the nineties, you, it was just like the movie Wall Street,

22:24  Barry Ritholtz: Dun, Brad Streets.

22:25  Howard Lindzon: You would get a newspaper and decide who you’re gonna cold call that day. Right. So I hated my job. That was my first job outta college. And I was cold calling to get rich clients. And I called this kid and he ended up needing money. Like he was just promoting himself.

22:38  Barry Ritholtz: He reverse pitched you.

22:40  Howard Lindzon: He he, he reverse pitched me. Right. And, and I, and I had to cobble up 25 grand from my mom and friends and I hated my, and I’m like, I’m in. And then he paid off his Amex with that 25. But by the way,

22:52  Barry Ritholtz: Every, every stockbroker and salesperson to appreciate a good sales pitch. Yeah. There’s soccer for a good sales pitch. Well,

22:58  Howard Lindzon: He was promoting himself and I was trying to sell him something and he sold me on his company. So what was, which turned out to be a home run company. What was the grip? It was, it was, he was a dropout. Mark Sced a unbelievable entrepreneur. And he had, he had made this product with five balloons wrapped around this Siberian millet. And we were the largest Siberian millet orderers in the world in the nineties. ’cause we were making millions of balls a month by, by hand and selling ’em with corporate logos on ’em during the whole nineties rather pharmacies. And this

23:29  Barry Ritholtz: Is the desk toy, a squeezey.

23:31  Howard Lindzon: But our genius was putting corporate logos

23:33  Barry Ritholtz: On it. Nobody had done that before.

23:35  Howard Lindzon: Well that industry was huge in the nineties. Corporate giveaways. Right. With trade shows and whatever. And we just got the right product at the right time and it worked. Oh my God. We were just, how many days we were the ball. There’s so many ball jokes, but they’d all get deleted here. We were the ball boys of the nineties. How many

23:52  Barry Ritholtz: Did you

23:53  Howard Lindzon: Sell? We did, we did 60, 70 million in sales. Get out. That’s amazing. And the margins were crazy because unlike retail, if you put Bed, bath and Beyond or compact on a ball, they own it. Right. There’s no returns. And so, so we just had this pet rock business where like Compact would call ’em, we need a million balls for com decks. And we’d just hire people, illegal aliens. And they would come into Phoenix and they would all cut their fingers off like making these things. But you made

24:19  Barry Ritholtz: It in the states. China.

24:20  Howard Lindzon: We made it in the States. China. We spent, we all our money was trying to figure out how to machine make these in the nineties. And we wasted so much money trying to like, get humans out of the process. Compact would order a million, pay you

24:33  Barry Ritholtz: Right in advance

24:34  Howard Lindzon: To start. Right. So we’d be buying cars. It was just two person company. Yeah. 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. And, and so we were like, that’s how I learned business. Kind of like back to school.

24:51  Barry Ritholtz: School. And you started this on QVC? No,

24:53  Howard Lindzon: QVC picked us up and Mark used to go on TV and back back in the nineties in QVC if it was selling, they just kept you out there like a cartoon character. Right. They didn’t, they hadn’t scientifically gone to the profit per second Right. Model because they were surprised at their success. Right. So the grip appealed to like 70-year-old women who had carpal, like they just like squeezing little arthritis,

25:16  Barry Ritholtz: Little carpal tunnel,

25:17  Howard Lindzon: Little arthritis. So we created this $19 three pack that had soft medium. And I swear to God, you can’t make this up and soft, medium and firm and QVC just kept mark on stage all day and the numbers would go unbelievable. And, and it was a miracle. That was our first success. So that was, so I was very much, that was my first internet success. So when did social, sorry, that was my first success.

25:41  Barry Ritholtz: When did social leverage launch?

25:44  Howard Lindzon: So, so, so you, you and I both lived through this, the, the great financial crisis. And that was an era. 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. Then Excel comes out, which of course nothing, you know, everything’s made up at that point. And one, one sell off can change the world. Sure. But, but we became a, a world that the 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, the, the play on words was, I wanted 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 Right. With social leverage. Whereas this financial, 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 network for free forever. Right? And so that was the birth of the i the name social leverage.

27:06  Barry Ritholtz: It makes a lot of sense. Yeah.

27:08  Howard Lindzon: It was just like a play on words. Some, some people will call me and go, oh, you guys do social investing. And go, that’s the last thing I do. Meaning I’m not, there’s no impact. It was just the i the play on words of financial leverage to social

27:18  Barry Ritholtz: Leverage. I, I like it. But

27:19  Howard Lindzon: Good point. You can blow up on social leverage

27:22  Barry Ritholtz: Now. So So now you’re up to fund four.

27:24  Howard Lindzon: Fund six.

27:24  Barry Ritholtz: Fund six. Yeah. Wow. I have the I and the V in the place.

27:28  Howard Lindzon: The good news is you passed on all of them. I did pass on. So we continue to do well until you come

27:31  Barry Ritholtz: In. Right. Soon as I come in, it’s over. Well that’s

27:33  Howard Lindzon: When we shut down. And,

27:34  Barry Ritholtz: And I famously or infamously was an investor in stock Twiz. And then when you pitched me on Robinhood, it’s a line in the book how that’s the dumbest fing idea I’ve ever heard in my life.

27:48  Howard Lindzon: You weren’t the only one

27:49  Barry Ritholtz: And it was tha it was. I will, I will, I will. I You are in the

27:54  Howard Lindzon: Majority. You were in the majority. I

27:55  Barry Ritholtz: Own it in the book. And between you and me, I’ll say A, it was offbrand and B no doubt that the pandemic lockdown helped them dramatically Perfect

28:06  Howard Lindzon: Time. No, no, no. The the, the thing about ramen hood, ’cause I was there from day one and by day one, I mean they had, it was another company, right? Kronos Research before they were like high frequency guys and math guys. But you could only, this is about you ask about investing. It’s, you know, the life I’ve led boots on, like, just curiosity, your eyes, nose, ears, feet. You, you become a great investor by like it touching feeling, right? You gotta be on street level. The best investors are street level. I invest, I’m talking about private markets, public markets is a different thing. Street. So

28:42  Barry Ritholtz: Let’s talk about private, let’s talk about

28:44  Howard Lindzon: Street. So, no, we were talking about Robinhood. So, so the great thing about Robinhood is it’s not that I got it right? It’s like I was, if I didn’t get that right, I’m nobody. Meaning I had to get that right as a Yahoo Finance user street.com guy, E-Trade baby, you know what I mean? Twitter, user StockTwits founder. And, and I, if I had any nerve or any tech skills or any like real balls or whatever we’re gonna call it, I build my own brokerage. Like we, I was there to do all that. But in 2010, even till till Robinhood started, no one wanted to start it. Brokerage ideas were terrible ideas, right? 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. And 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, right? The, the VCs were enamored with assets under management. A UM. They felt like Vanguard was the one to disrupt. So everybody wanted to be the next, if you’re a venture capitalist, you wanted to be the next vanguard. No one. And

29:56  Barry Ritholtz: I thought, thought that

29:56  Howard Lindzon: Was flawed. I thought that was flawed because the margins are tiny and, and you’re never gonna build something 10 times better than Vanguard. Meaning wait a minute, what’s wrong with Vanguard? And they’re, versus E-Trade. I’m like, it’s interface trade. You know, it was just ripping me off and I was a, I was the right guy to get that pitch at the right time. So of course I had to do that deal. It would’ve been, that’s what, that’s why the podcast with the guy who passed, if I passed on Robinhood, I’d be a more interesting guess. Like

30:26  Barry Ritholtz: It’s a Larry. So how much did you put into to,

30:29  Howard Lindzon: Well, we did a hundred. Like I, we had a, it was our first fund, so we were writing a hundred thousand dollars checks. So it was a hundred thousand dollars at 8 million. I thought it was expensive. 8 million, an 8 million valuation. Like at the time we were doing 3 million valuations. So, you know, we nego, like I met them by Ju and I flew up because they called me ’cause of StockTwits. So they called me and said, we have this app. They were, they were outta, they were outta 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? Like, remember that era

31:06  Barry Ritholtz: Glass Holes is what everybody

31:07  Howard Lindzon: Called. 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, this 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. But because of Stock Twist and Twitter, I knew that if you build it, they will come. If you build an 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 be invested in Betterment and Wealth front at the time. So the, 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 tough don’t like doing work. Right? They don’t like waiting a year.

31:58  Barry Ritholtz: It’s a grind. Yeah.

31:59  Howard Lindzon: VCs do not like doing investment. Now they do. ’cause there’s so much money in, in sovereign, you know, you can get so much money in charge 2%. But back in 2013, it was like, so me something that’s working, I wanna 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. It it was, it’s tough. And you had to wait. You couldn’t just go launch it and get sued.

32:20  Barry Ritholtz: Thi 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.

32:33  Howard Lindzon: Yeah. And if you switch, you switch. Right? But they have so much assets. Right? 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. Robinhood would’ve worked whether I showed up or not. Right? So we did a hundred thousand. Now obviously we helped them tremendously with stock to it. So we were like responsible for hundreds of thousands of early signups. ’cause stock with users love the idea of

33:00  Barry Ritholtz: Yeah, of course free trading.

33:01  Howard Lindzon: Free trade free. But also the API hooking into you could slide right on,

33:06  Barry Ritholtz: Right over

33:06  Howard Lindzon: And, and trade. Yeah. It’s pretty funny. Now that idea in oh seven when I had it Jack and Ave, like as a Twitter guy, I went to Jack and a Jack Yeah. And a, 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? The president’s gonna tweet one day and the markets are gonna move. Like this is literally pitch the conversation. My pitch to Jack and AAV set up by Fred, 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 I ideas. So they

33:45  Barry Ritholtz: Were like, well it was, it was the town. The town. No,

33:48  Howard Lindzon: They weren’t massive.

33:49  Barry Ritholtz: They weren’t for the world

33:50  Howard Lindzon: Financial guys. They were kumbaya guys. They were builders. So my pitch fell on like, who are you?

33:56  Barry Ritholtz: They didn’t get monetizing Twitter through

33:58  Howard Lindzon: Brokers. They didn’t, it’s not about monnet. They didn’t understand what they had. Meaning selling ads against something that Goldman Sachs will pay infinity for. Meaning a new pipe where Bloomberg’s charging $2,000 to get real time information now like Osama bin Lain getting killed. The futures like in oh eight 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 ’cause of Twitter, right? Because some guy in Pakistan saw it. And the futures move, right? Like that’s when it should have clicked is like, shut down everything, delay the feed 30 seconds. And you know what’s gonna 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. Right? You and me schmuck, it’s even seconds. And three don’t need real time. One

34:51  Barry Ritholtz: Second, it’s five minutes. Right?

34:52  Howard Lindzon: So my pitch to Jack and e with Fred Wilson was like, slow down the feed. ’cause 99% of the population and then we we’re there anyways with ai, no one, no one gets the real time feed, right? Slow down the feed, your phone will ring for the people that know that the feeds are not in real time and they will pay you infinity, right? To get the pipe. And they were like, no, let’s sell ads. So here we are.

35:17  Barry Ritholtz: So, so you haven’t talked about the cash tag, which I really wanna talk about something Stock Twits invented. Yes. A dollar sign and then a A PL is the symbol for Apple or

35:27  Howard Lindzon: So, so this is the Ginette store. So again, I didn’t wanna start a company, I just sold Wall Stripp, which, you know, which was my best work. But again, stupid work arguably. But my be no personally I’m most proud of it. You sell a company to CBS when you are literally an idiot, right? Is the dream. And

35:44  Barry Ritholtz: I think that’s a fair disclosure. Yeah, yeah, yeah. Advised like

35:47  Howard Lindzon: They said, by the way, as they wrote as Les Ez wrote the che, he goes, I can’t believe we’re writing an idiot like this. A check. That was like, he said that,

35:53  Barry Ritholtz: That’s the quote.

35:54  Howard Lindzon: I said, please write that like you in your book, please write that you’re so angry. So anyways, they had just bought my company and literally a month later I’m like, you made the wrong acquisition. You need to buy Twitter. Like Twitter is

36:09  Barry Ritholtz: Said this to them, to,

36:10  Howard Lindzon: To Quincy at, at 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. ’cause you know, at the beginning I’m on, we all had our Blackberry, it wasn’t even, it wasn’t even a native mobile app, right? It was just the web and it was all venture capital. And my shtick in 2006, 2007 was I just peed at the Gramercy. Like, so the VCs loved me. They were like, who’s this idiot talking about with bowel movements? And and then Andy Swan said, you know, this is like financial, this is like a new Bloomberg, right? And I said, and I just, so, so the hashtag was a 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 a new Apples. But like at the beginning I 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 RIMM. And Fred Wilson is the godfather of all this and was an investor in Twitter. Sent me back a Texaco, this is genius. You need to start a company. And that’s what set me down the stock t it

37:27  Barry Ritholtz: Patch did Was Wilson an investor in stock? Twiz?

37:29  Howard Lindzon: No, because he was an investor in Twitter and he thought there would be a conflict.

37:32  Barry Ritholtz: It’s no conflict. It’s, I agree.

37:34  Howard Lindzon: But Fred is a Fred,

37:35  Barry Ritholtz: The

37:35  Howard Lindzon: Og, Fred Fred’s the OG Fred, full dis disclosure. Fred, Fred, Fred on strategy is if he bets on one, he does. And I, I follow Fred’s strategy. There’s other people who spray and pray and don’t care who they and 90% do that. But Fred was of the opinion back then as like, I work with you, there’s gonna be, conflicts are a thing. Like no conflict, no interest, of course. That that’s, he’s very cool that way, but don’t create conflicts just to create conflict. So in his wisdom, he was like, you know, what’s gonna 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 VC should have said Harry, you know, just not a good enough idea.

38:18  Barry Ritholtz: So as an investor in StockTwits, I always wondered why the hell didn’t Twitter buy StockTwits? Well,

38:24  Howard Lindzon: They don’t understand finance.

38:25  Barry Ritholtz: Is that what

38:26  Howard Lindzon: It’s, they should have bought it. You remember the last scene in Raiders of the Lost Ark? Yeah,

38:29  Barry Ritholtz: Of course. The whole

38:29  Howard Lindzon: Movie

38:30  Barry Ritholtz: Where they is about

38:31  Howard Lindzon: Getting, and then the last scene is this is a very important, again, media matters to investing into the, and it’s just a black hole. Forever Miles. Forever Miles, never to be seen again. Miles of miles. The best tech companies like Salesforce, he understands corporate dev. Sometimes you buy something to kill it,

38:50  Barry Ritholtz: Right?

38:51  Howard Lindzon: To say, and by the way, it’s not

38:54  Barry Ritholtz: Best.

38:54  Howard Lindzon: It’s cost me a fortune. They’re like my Newman, Twitter’s like my Newman from Seinfeld. It’s like Twitter, like, you

39:00  Barry Ritholtz: Know, now who’s dating themselves.

39:02  Howard Lindzon: So, no, but what I’m saying is they’re my Newman, like in Seinfeld, meaning these people, it was a clown car. As, as Zuckerberg said, there’s so many people that got rich.

39:11  Barry Ritholtz: It was a clown car. Non executing. I love the Linein Yeah. From Zuckerberg. You, it was in one of your recent posts, right? But,

39:16  Howard Lindzon: But Zuckerberg said it first,

39:18  Barry Ritholtz: Which was,

39:19  Howard Lindzon: It was a clown car. I

39:20  Barry Ritholtz: Don’t know. That crashed into a gold mine. Yeah.

39:22  Howard Lindzon: And so Twitter and the, the real problem with Twitter was it was a financial product. And Elon knows that better than anybody in the end. ’cause he,

39:31  Barry Ritholtz: Although he just,

39:32  Howard Lindzon: Well he monetized it by stuffing it in a shell company. It’s still like, it’s an asset. And he’s made tremendous mistakes to, to, to think that Trump end around of the whole thing. Meaning Twitter’s supposed to be a real time network, right? They have to poll true social, right? True social is worthless other than one guy who sits on top of Twitter, right? And you have to copy paste his tweet like so Twitter,

39:57  Barry Ritholtz: Well, on a different platform forgetting

39:59  Howard Lindzon: How bungled the company is, the 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 gonna 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.

40:20  Barry Ritholtz: He, he is savvy in ways that people don’t appreciate

40:23  Howard Lindzon: Insane the truth. Social exists, it’s worthless. But for one guy tweeting, right? Unbelievable. So it’s inconceivable

40:30  Barry Ritholtz: To, to bring back

40:31  Howard Lindzon: You bested my man of orange

40:33  Barry Ritholtz: To,

40:34  Howard Lindzon: To, so the poison cannot be in front of you.

40:36  Barry Ritholtz: So, so now 2024, you come back to stock Twiz Yes. As CEO. Yeah. What motivated that? Are the early investors gonna see an exit? What’s, what’s going on?

40:47  Howard Lindzon: That’s inside information.

40:49  Barry Ritholtz: No, it’s not public.

40:50  Howard Lindzon: No. So it’s

40:51  Barry Ritholtz: Not, it’s it’s, it’s non-public information. It’s like a but it’s not legal inside information.

40:56  Howard Lindzon: No. Stock just is like a, a corn on your foot. You can’t, no. I mean, listen, just can’t go away. 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, like whose fault is it? Okay? I think stock is a great idea. The Cash Act was a great idea. Yeah. I’m very proud of that. Hundred percent. I’m not proud of having to run a company 17 years later. Not that it wasn’t my dream when I started Stock Twist is to be sitting here answering questions about how am I gonna make money? Let me bust your up, but you 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.

41:38  Barry Ritholtz: Of course.

41:39  Howard Lindzon: 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 capitalist.

41:48  Barry Ritholtz: Let me push back on that. ’cause I knew you gonna go there.

41:50  Howard Lindzon: I am,

41:50  Barry Ritholtz: I 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 a, an fu number, but you would’ve gotten a pretty good number.

42:02  Howard Lindzon: No, I never got a number.

42:04  Barry Ritholtz: There was never, I thought there were discussions that just never came to always discussions. Yeah. I thought you guys were on the one yard line.

42:11  Howard Lindzon: I’m discussing it right now. Openly, there’s always a price. Who, 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 market. For sure. And I think StockTwits I’ll take full responsibility. We’ve always missed a window of positioning, right? But the good news is stock TWI is thriving, right?

42:38  Barry Ritholtz: It’s doing well. This is a perfect,

42:40  Howard Lindzon: So I’m saying like,

42:41  Barry Ritholtz: Robinhood should be the,

42:43  Howard Lindzon: We were 10 years ahead of our time. If you think about where public, when, when I started stock to retail, investing was a laughing stock. Yeah. And it still is to most institutions,

42:52  Barry Ritholtz: Much less so today than it was. Correct. Now it’s

42:55  Howard Lindzon: So, so again, if you look at my portfolio,

42:57  Barry Ritholtz: The, by the way, the private equity, private credit wouldn’t be so hungry for retail investors if it was truly us.

43:05  Howard Lindzon: They call me every day, right? So there’s two worlds that I live in the world where retail doesn’t take itself seriously enough. And private equity guys call me CEOs of public companies call me to take like I’m in a crazy seat, right? Because I’m a goofball. Right? But I am serious, you know, like I am serious. Like I’m trying to be serious.

43:24  Barry Ritholtz: You used to be 60 40 goofball serious. Now you’re 40, 60.

43:28  Howard Lindzon: Yeah. It switches.

43:29  Barry Ritholtz: You’re the new 60 40.

43:31  Howard Lindzon: Yeah. I’m, I am. I can laugh at myself, but I’m trying to run a serious business. Right? Because, because it’s been a long time and we were just way ahead of the curve. Like Jack and Eeb didn’t understand what we have. Fred Wilson understood it. Right? There are very few people that understood. Very few people liked Robinhood until 2020. And GameStop, they like it for the wrong reasons. By the way, I don’t like the Robinhood that became like, I don’t, not, I call it the degenerate economy. But when I invested in Robinhood, I didn’t know the degenerative economy would exists. 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

44:10  Barry Ritholtz: Are bigger than crypto for Robinhood.

44:12  Howard Lindzon: Crypto’s Tiny Options is everything. Huh? 90% of their fucking profits will come from o Options. Any brokerage.

44:18  Barry Ritholtz: Wow. I didn’t realize that.

44:20  Howard Lindzon: How are they gonna make money on zero commission other than options, people

44:23  Barry Ritholtz: Doing YOLO trades payment for order flow margin loans.

44:26  Howard Lindzon: That’s just a, that’s just media being bad media.

44:29  Barry Ritholtz: I, I’m gonna tell you that the big shops like Fidelity and Schwab, the single biggest line owner line item of profitability are credit loans

44:38  Howard Lindzon: And money. Okay. It could be I’m 90, I don’t know. I don’t, I don’t The

44:42  Barry Ritholtz: Financials, no. I mean at one point in time it was over half at Schwab. I don’t know what it’s today. Yeah.

44:45  Howard Lindzon: When we invested in Robinhood here was, my thinking is, first of all, I love the product. You gotta be a user of the product to be a good investor. I’m not the guy who’s like, here’s space check and here’s a biotech check. Right? What do I know? So yeah, 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 right. And, and they came along at the right time. When Robin, the pitch for me with Robinhood was not that they were gonna make money, it was an 8 million valuation. Like, you know, at my event people were like, how are they gonna 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

45:25  Barry Ritholtz: To acquire customer, customer acquisition

45:27  Howard Lindzon: Customer. Yeah. And my thesis was like Uber Robinhood would pay zero. So if you get a million people, even if they’re $4 in their account, it’s a hundred. That’s a good herb. Yeah. Those don’t come along very did. I think it could be $30 billion. I’m not so psycho that I thought I was investing in a 30, $40 million company. Billion, billion, billion, billion dollar company. 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 David

45:56  Barry Ritholtz: Part by the way. You didn’t gimme that pitch. The pitch was, I,

45:59  Howard Lindzon: I’m sure I did. The

46:00  Barry Ritholtz: Pitch was free trading millennials, the whole next generation. You’re gonna capture them before anybody else.

46:05  Howard Lindzon: Well, I knew that from Stockton. I knew I’d capture ’em. But if I say, if I mention the ARB trade, people are like, oh, they’re gonna have to raise so much money. There was a lot of problems.

46:14  Barry Ritholtz: No, the ARB trade in hindsight. Yeah, the trade A

46:16  Howard Lindzon: Trade would, was why I invested would

46:17  Barry Ritholtz: Would’ve been compelling. And, and again, I it’s a chapter, the, I’ll tell you a great, Hey, it’s so offbrand

46:24  Howard Lindzon: One great story. Go ahead. Because, because this is just a, an investing story. So we’re a very small fund. The first one was 6 million. We’ve, we’ve done, now we run a hundred million dollar funds and

46:33  Barry Ritholtz: You cap it at a hundred or

46:35  Howard Lindzon: Yeah. I don’t think you, I don’t think get our returns would be good. Yeah. We like writing one to $2 million checks. I get that. Stay in your lane is something everybody hates saying. But I think true in my world, unless you’re fee gathering, stay in your lane. Like people know what we do,

46:48  Barry Ritholtz: You’re gonna laugh.

46:49  Howard Lindzon: I I believe in that. I hate when people say it, but Right. I

46:53  Barry Ritholtz: Practice it. That, that’s an annoying way to say I disagree with what you’re saying, but Right. But what you’re saying is that’s skill. Hey, your expertise. Here’s my skillset. Yeah. I’m

47:01  Howard Lindzon: A good monkey.

47:02  Barry Ritholtz: I to apply my, the area I know best.

47:04  Howard Lindzon: So with ramen, so occasionally, and again,

47:06  Barry Ritholtz: Stars

47:07  Howard Lindzon: All long enough and I had breakfast with Fred this morning. We’re talking about like, you’re a legend. Josh is a legend. Like I’m around surrounded by legends. ’cause 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, right? Because you have what you’ve been on the street, right? And you have experience, not maybe in space, but in what you do. You have signal. So with Robinhood, and I had learned from Fred Wilson, like if you really believe in something just, and I’m not a poker player, I don’t ball, you gotta go in as a vc you have to, so Robinhood,

47:47  Barry Ritholtz: You’re, you’re convincing me to throw money into Fund vi and that’ll be the end of your run. But

47:52  Howard Lindzon: That’s different. Every fund is like a crop of wine. It could go depending on how you know we’re wrong all

47:58  Barry Ritholtz: The time. Well, 24 was a good vintage

47:59  Howard Lindzon: 2020. 2021. Terrible vintage. So, so, so when Robinhood was doing very well, but they, the two guys were like, it was not popular. Everybody, all the VCs had committed to betterment wealth front type model. Right? So now they needed to raise another round. And I’m like, they wanted a raise.

48:18  Barry Ritholtz: This is 14 or 15? 14. Yeah. So it was like, I think that’s when we spoke. Yeah.

48:22  Howard Lindzon: So they were like it and I’m like inexperienced. ’cause 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 around. You can shop it around. So I’m like, dude, screw that all I wanna invest. So over like July 4th week, I’m telling 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 and they wanted to raise it at some stupid valuation. Right? Let’s, it was 60 million ish. And I’m like, well we’re never gonna have to really write it, but even if we do, I can convince my friends like, this is the what. Right. And I called Fred Wilson and he goes, what are you calling me for? You know what to do. Let’s write a term sheet. I go, but we don’t have $11 million. And Fred goes, you’ll find it. Just, just do it like a six week. Right. Which is absurd. Now today people write billion dollar checks in an hour. Right. But like he goes, just ask for six weeks. Right. So, you know, word, you know, whatever. You’re typing it up, send him a term sheet by fax.

49:25  Barry Ritholtz: Back then you 10 fingers. So it much,

49:27  Howard Lindzon: Much better back. It was more, but, you know, 10 fingers more errors. So anyway, so we write up this term sheet, we send it to ’em and they shop it as they probably really in Index Ventures, y Hammerer, who’s like a, 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, indexing their term sheet, put index in their term sheet. Like fuck, social leverage. Right. That’s a typical, like who are they? Right. Luckily by writing that term sheet, VLA Baiju did the right thing and they carved out like as much as we could. We couldn’t even raise a million on. So when we, 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.

50:17  Barry Ritholtz: Right. 200 x on, on the, yeah. That’s unbelievable.

50:20  Howard Lindzon: No way bigger, like at the peak. But like we’ve had better investments. We’ve

50:26  Barry Ritholtz: Better investments. You’re not sitting with the Robinhood shares.

50:28  Howard Lindzon: A lot of my LPs, we distributed the stock. A lot of my LPs have not sold, sold

50:32  Barry Ritholtz: Calls it nobody says

50:33  Howard Lindzon: I don’t ask. Our job is to deliver them. There

50:36  Barry Ritholtz: You go.

50:37  Howard Lindzon: The, the, the, the cash.

50:39  Barry Ritholtz: I wanna start with a quote of yours that I really love. Okay. Quote, the whole world has become a casino. Thanks to AI and prediction markets, we are all more productive and degenerate. Now let’s talk a little bit about the degenerate economy. Yeah. Explain to listeners what is the degenerate economy or the degen economy.

51:03  Howard Lindzon: Well, I don’t like the word degen. So when I say degenerate, I say it in the humoristic way. You and I are degenerate, right. Because we’ll buy a watch. We’ll bet on a game. We laugh at de degeneracy. We don’t, we don’t, we appreciate the art of de 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. And when you own and operate two millennials, you watch, you look over their shoulders. Those

51:36  Barry Ritholtz: Were your first startups?

51:37  Howard Lindzon: No, my kids. Yes. By the those were your startups. Startups. My the only startups that matter. And did

51:43  Barry Ritholtz: Either of them merge yet? Do we have any m and a activity yet?

51:46  Howard Lindzon: No, we need, we need, I’m not talking about spinoff need

51:50  Barry Ritholtz: I not talking about dividends. I’m talking about are they married? No. So no mergers yet?

51:54  Howard Lindzon: No, my son was, my son was in a Are you on the board?

51:57  Barry Ritholtz: You should be chairman of their board.

51:58  Howard Lindzon: Are they on the board? I’m trying to get, you see adult also. I’m trying to get them fired. I’m trying to get medical checks to see if anything’s working. Right. So, 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 really I’m so surpris, I hadn’t monetized, I hadn’t monetized our investment. I’m like, okay, on Robin Hood there, there was a weekend Yeah. When Robin Hood was worth 40 billion.

52:28  Barry Ritholtz: Right.

52:28  Howard Lindzon: And it could have been worthless. Right. Do you understand? Like

52:31  Barry Ritholtz: A hundred

52:31  Howard Lindzon: Percent. I wasn’t rich. And I’m like, it wasn’t even their blame. Whoever you want, people lost their minds.

52:39  Barry Ritholtz: Let me annotate.

52:40  Howard Lindzon: So, so let me just explain to you, if you have your phone, go

52:42  Barry Ritholtz: Ahead.

52:43  Howard Lindzon: What Robinhood perfected, which no one figured out. It was like when we used to play pinball, everybody, there was always that kid who was so good at it.

52:52  Barry Ritholtz: Crazy flipper.

52:53  Howard Lindzon: He could bump it. Well he could bump it without tilting it. Right. And he could just get the, he could just get the machine to dance for him. Tilt happened.

53:02  Barry Ritholtz: Everybody,

53:03  Howard Lindzon: The, the app was so well designed. The app was so well designed that everybody pushed the same button at the same time

53:09  Barry Ritholtz: And it couldn’t carry the, the, I remember it was scratching. Do you understand?

53:12  Howard Lindzon: That’s literally what happened. So that’s

53:14  Barry Ritholtz: What you were,

53:14  Howard Lindzon: It was a design flaw. You were, it was a design flaw. It

53:16  Barry Ritholtz: It wasn’t the design flaw. Nobody expected it to scale 10,000 x. No,

53:21  Howard Lindzon: But a if you push everybody to one button, right. Or or another button. Yeah. And then people come on see me say push this button and everybody’s like, let’s see what happens. And guess what, what happened? Crash. Crash. Not to be repeated again. Right. Hasn’t been repeated again. And the, that’s what makes the markets great. That hole was filled by the whole being created. Right. We haven’t seen another thing like this, although recently with Car Avis. But like GameStop broke the machine. Yeah. And almost bankrupted the company. Right. And and it was many lessons in there. The most important was Robinhood. None in their hubes 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. Right. And I’m like, no one understands this. Like they were one of the first case studies and like why it didn’t deserve to be zero. Who knows what all the things that went wrong. But I’m just some guy that’s like, what the right. I’m like couldn’t. 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.

54:26  Barry Ritholtz: So wait, let me, let me tease this outta 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. Some really foolish, reckless Yeah and and I, I think those of us with gray hair looked at it and kind of laughed. ’cause we knew exactly how that was gonna

54:51  Howard Lindzon: End. Yeah. The apes and all the a c stuff. I hated it. Right. But it doesn’t mean I can stop

54:54  Barry Ritholtz: 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. How could be, and if this crash goes on more for a couple of hours two days from now, this is a zero. It was

55:14  Howard Lindzon: 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. And the VCs lucky we’re in so big. Didn’t they had had to put in more money.

55:24  Barry Ritholtz: They didn’t have the reserve cash. The margin trades have the of options.

55:28  Howard Lindzon: The cash. We’ll never know the real story. So,

55:29  Barry Ritholtz: So technically SIBO is the counterparty on all trades. Yes. And they also own the platform. So they demand a certain amount of capital if you’re gonna trade X. Yes. And they’re trading billions of dollars. Correct. They didn’t have that capital.

55:44  Howard Lindzon: So, so this is why my degenerative economy index was born. Meaning I don’t think AMCs in what’s in my index, which is outperforming everything is SIBO is one of my time number one positions who benefits. So my degenerate economy thesis is finding the companies that benefit from global degeneracy. You

56:02  Barry Ritholtz: Created this last year, two years ago, three years ago. All crush.

56:06  Howard Lindzon: It’s three. I had to share it

56:07  Barry Ritholtz: Just to put some numbers on this. Yeah, it’s gambling, it’s day trading. It’s meme coin speculation.

56:14  Howard Lindzon: It’s vaping. Unfortunately

56:15  Barry Ritholtz: It’s up 170%. The NASDAQ 100 over the same type of period isn’t even up a hundred percent. It’s up 94%. Correct. You’re almost doubling the nasdaq.

56:24  Howard Lindzon: And I give it away for free ’cause and I share the

56:27  Barry Ritholtz: Petition size. It’s not, why isn’t this an ETF?

56:28  Howard Lindzon: Because the VanEck always talks to me VanEck always like, why do you wanna be in the e TF business?

56:33  Barry Ritholtz: So do it. You know you use ETF architect. No I get it. Work with VanEck, but I

56:38  Howard Lindzon: Billion dollar product. Again, this is, I think part of like, you know, the age I’m at is like, I don’t wanna be someone yelling at me. That might that I Kathy would that I, I, as soon as I monetize it, it’ll go to zero. Like that thing will stop working. I love the idea that I can give it away for free. This goes back to the

56:55  Barry Ritholtz: Original

56:55  Howard Lindzon: Social media. Meaning what am I gonna make? It’s like y as soon as I start charging for it, the whole thing becomes

57:02  Barry Ritholtz: Fast, slow. I took ads off the blog ’cause they were annoying and ugly and the amount of revenue it made peanut was just too annoying. You you’re saying the same thing.

57:11  Howard Lindzon: Yeah. I’m saying like, hey man, I’m like, I got a little thesis. It’s not that complicated. I,

57:18  Barry Ritholtz: I love this thesis. I would, I think people would be

57:20  Howard Lindzon: Buyers. So she’d be always CE big hyper liquid now is in there and no one knows what hyper liquid is. I constantly What’s hyper liquid? Hyper liquid is the, is the thing. Meaning today all I get pitched on or by the next Robin Hoods and I’m like, the world doesn’t that another Robinhood. But all they keep talking about is, you know, we got perps trading 24 7 on hyper liquid. It’s, it’s, it’s the new salono, let’s call it. ’cause I’m not a crypto guy and I’m like, after getting a hundred pitches of the same product and they all talked about hyper liquid. I just bought hyper liquid.

57:51  Barry Ritholtz: And what what’s the market cap of that

57:54  Howard Lindzon: One?

57:54  Barry Ritholtz: Couple

57:55  Howard Lindzon: Billion. It’s like 12 people and one of the most profitable companies in the world side of Singapore. Like the guy has no freedom ’cause he is so rich. It’s like a system. It’s like a very fast chain.

58:05  Barry Ritholtz: What’s the symbol?

58:06  Howard Lindzon: HYPE hype.

58:08  Barry Ritholtz: Yeah. What a great symbol. Yeah,

58:09  Howard Lindzon: It’s a token. And you can buy it on Robinhood. Again, I’m not promoting, I’m just saying wait,

58:14  Barry Ritholtz: So this, you could buy it on Robin Hood, but does this not trade over the counter? You can’t get it anywhere.

58:18  Howard Lindzon: You can trade it as a, there’s a dat called PURR. And again, I’m not recommending it, but I’m long A little is a way that you can trade it over the counter. And, 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

58:34  Barry Ritholtz: Trading on. Pure speculation. Pure speculation on other people’s speculation. That’s what is

58:39  Howard Lindzon: Speculation.

58:39  Barry Ritholtz: My thesis. This is squared.

58:40  Howard Lindzon: So anyways, what I’m, what? So the degenerate economy is about picks and shovels. We can’t stop if, if a young person like my son, and again I own and operate two millennials and, and they’ll, 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? Are we even of my, this is why I have to do a step in takeover of my son’s company. ’cause I’m like

59:04  Barry Ritholtz: Dick private, are

59:05  Howard Lindzon: You talking to me like you ask me to end my U 50 bucks to put on a 20 team parlor And you’re complaining about, so idiot three threat idiot. It’s so idiotic. So I’m like trying to teach them not to be idiots. You can have a degenerative economy, you

59:16  Barry Ritholtz: Just need a little bit of math. The problem is not enough kids, kids has taking math,

59:20  Howard Lindzon: Math important. And you also full circle on the general economy. You have the wrong teachers Right now I got brought on board by guys like you 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. Right. They worked at Facebook. Right. They worked for Elon. You could, if you’re not rich working for Elon or Facebook, that would be interesting. Yeah. If you are rich and you’re kissing the nipple of Facebook and that’s not interesting. You are supposed to be rich. Right. Have some humor. Have So we’re, our job is to

59:50  Barry Ritholtz: Little humility. You’re a little hubris.

59:51  Howard Lindzon: Yeah.

59:51  Barry Ritholtz: So my job is to teach

59:52  Howard Lindzon: My kid is like more humility. Stop being a degenerate. Right. But the fact is, you can’t not be a degenerate when prices kids are yo lowing. Because they can and because,

1:00:04  Barry Ritholtz: And it’s frictionless. We, we

1:00:05  Howard Lindzon: Frictionless. And they’ll learn. Some of these kids will learn how to be good. Put sellers very or premium sellers. Very few. I understand. But the markets are very important. Meaning having a price on everything is fantastic.

1:00:16  Barry Ritholtz: And when I say old it’s only partly ’cause we know each other so long. It’s mostly because he’s an old man. 60 and is now 60 years old. Years ago, my wife and I, I I’m not a cruise person. We were young, we were broke. We used to use this website called vacations to go.com. You book last minute, it 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. I 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 watching 20 minutes of roulette and it’s just, it’s so dumb. Yeah. I hate

1:01:46  Howard Lindzon: Losing money.

1:01:46  Barry Ritholtz: It it’s for for random stupid reason. Yeah. But I point out to her, look the red pays or red or black or odd, even pay two to one. But you have zero and double zero. So it’s not even odds. Correct. And then this group pays three to three to one, but it’s one in four chance of winning. So 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 of the math, but all I can tell you is I see people, I see theier taking off a whole lot more money than she’s handing out to gamblers. That, that’s the takeaway. Be theier not the odds. Correct. Be the house don’t be

1:02:32  Howard Lindzon: So CBOE hit all time highs. They’re

1:02:34  Barry Ritholtz: The house. Yeah.

1:02:35  Howard Lindzon: Have you ever hear anybody on social media talking about CBE? Never. Never. They love that. No one’s talking about ’em. So the other thesis that I have is trends with no friends. Okay. So, so I’m looking for trends. ’cause again, I run a huge social media site. Right. So I, if I have a choice between Nvidia and sand disk, everybody’s talking about Nvidia. You want, I’m not saying I know much about, we’re just

1:02:55  Barry Ritholtz: Talking about about Broadcom. Same

1:02:56  Howard Lindzon: Thing. Same thing. So on stock to I can look for tickers that are trending with very few followers. No, it doesn’t have to be. I don’t like small caps. So I’m like billion.

1:03:06  Barry Ritholtz: No, I mean earlier, I mean before it really goes up 10 x.

1:03:09  Howard Lindzon: Yeah. So I, so the one thing that stock to tell, and I have ai, you asked me why I came back to stock to, it’s two things. AI and the fact that like I can now code with clog code. And so I can call bullshit on engineers a little bit.

1:03:22  Barry Ritholtz: Oh, this could take six weeks. I need it by today. Well

1:03:25  Howard Lindzon: Again, there’s not today, but there’s not six weeks. Right. Okay. So 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, and we’re doing very well. The, the, the issue is now I can explain to people and I can pull out the data to show people trends with no friends. Meaning I wanna find, you wanna find stocks that are trending that have very little discussion.

1:03:50  Barry Ritholtz: Makes a lot of sense. Yeah. It’s

1:03:51  Howard Lindzon: Just intuitive. You meaning I-B-D-I-I learned on IBDI love price relative strength. We, I’ve just added a layer to that that matches high price, relative strength with low social, it’s almost like the moosh of Vegas. Right? I’m trying to find the stocks that No, even though I run a social media site, I’m like betting on the fact that like, they’ll discover this in time.

1:04:12  Barry Ritholtz: You should talk to Ben Hunt and what he’s doing with I love that Perent. ’cause they’re too

1:04:16  Howard Lindzon: Yeah, they have a narrative thing.

1:04:17  Barry Ritholtz: They’re too, but the combination of where the narrative is just starting to take off. Correct. Tipping and, and where the trends is

1:04:25  Howard Lindzon: Starting. I’m doing

1:04:26  Barry Ritholtz: This for 20

1:04:26  Howard Lindzon: Years friends. So that’s why I, so I give it away for free.

1:04:29  Barry Ritholtz: He’s quantified it. You

1:04:30  Howard Lindzon: Done it. Yeah. I hate the quant side. Yeah. I just visually see it. Right. From years of being a known quant. I went a UI don’t even know math,

1:04:37  Barry Ritholtz: But, but if you want AI to help you with this, I matters. I

1:04:40  Howard Lindzon: Gotta catch up on matters. That’s awesome. But, but he also sees the role a little darker than I see it. I’m a much more of an optimist.

1:04:46  Barry Ritholtz: You and I both. Yeah. So, but, but when I wanna know what’s the worst case scenario, like when the tariffs were first rolled out, not so much losing my finger, but his piece, the end of the pax Americana is true. Was the end point where if this really goes off the rails, this is how bad it could get. Well it’s

1:05:06  Howard Lindzon: Deglobalization, right. Which,

1:05:07  Barry Ritholtz: You know, but, but he, he works out the details. Yeah, he’s great. But again, you and I are both a little more of optimist.

1:05:13  Howard Lindzon: I’m much more simple. Right. If I see something going up, you want up, that’s my cue

1:05:18  Barry Ritholtz: To look.

1:05:19  Howard Lindzon: And then if it’s a certain market cap and then, then I check stocks to and I go, no one cares. I love that. Then I, I need to tell a story. Everybody needs to tell stories. Stocks are stories and some people are great at storytelling. The Palantir guy, the certain, but again, the numbers eventually matter. Right. And I’m trying to find companies going up. Right. And that’s not complicated. But then I have other layers to it and 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%.

1:05:56  Barry Ritholtz: So, so let’s talk about your,

1:05:58  Howard Lindzon: So that’s my index.

1:05:59  Barry Ritholtz: Let, let’s talk about your startups who are becoming degenerates. Yeah. Your kids given social apps, zero commission trading, all the options, 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? And and let’s also add, these are not minors. These are late twenties adults out of school for almost a decade. Yeah. Real people. What guardrail should they have to protect them from their own most instincts? Well,

1:06:40  Howard Lindzon: Listen, we could argue let the be we put our, 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 like stop betting. Betting is different than investing. Right? So if, if, if Shane at at Poly market and their partners of ours, if they, if Shane or tq at at call sheet had pitched me those ideas at the same time that Robinhood pitched me their idea, I would’ve passed. Why? I don’t bet. I think it’s stupid. Right? Okay. Like 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. ’cause 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, if Poly Market and Kashi went out to VCs and said, we’re the new news, their valuation would be a dollar. Right. Okay. No, they’re so we know the real story. They can’t tell what they really are good at, which is news.

1:07:41  Barry Ritholtz: And by the way, they’re not great at news. I understand.

1:07:43  Howard Lindzon: But either is news good at news? It’s

1:07:45  Barry Ritholtz: Probability of something happening.

1:07:48  Howard Lindzon: Not, but I’d rather not read someone’s opinion. I don’t need to see Elon’s finger on the news. ’cause that’s a stor. There’s, that’s not the real story. Give me the numbers. I know it’s fake, but I got a number. It, it’s not, if Mond isn’t 90% of my daughter’s mad. Right? But go Rachel, here’s what you do. That bet the other side you’ll make eight times. Or or

1:08:07  Barry Ritholtz: Put it’s 10 to one.

1:08:08  Howard Lindzon: 10 to one. But I would bet money on Madami. And if you really wanna 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,

1:08:19  Barry Ritholtz: I love what he’s doing on the healthcare side.

1:08:20  Howard Lindzon: But 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, whether they, whether they tipped it in this, again, I don’t wanna get into all like the fraud and all the fake stuff about it, but the numbers are much easier than reading an opinion piece.

1:08:38  Barry Ritholtz: I’m gonna, can I tell share something fun. So 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. But if you stop and think about it, if you’re negotiating with another side, this being a psyop, ’cause 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 anybody on this side is looking at this. Oh, they’re, they’re really gonna put boots on the ground. That’s look at the track record here. Here. Here’s A-A-A-A-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. That’s a, it’s still better. That’s

1:09:33  Howard Lindzon: A false flag. It’s still better than Russia and China using our social media against

1:09:37  Barry Ritholtz: Us. Oh my

1:09:37  Howard Lindzon: God. It’s forced. So I’m very forced.

1:09:39  Barry Ritholtz: And North Korea and Iran.

1:09:41  Howard Lindzon: Yeah. So I’m not saying I’m for, I’m an investor in poly market and college personally at crazy valuation. ’cause I wouldn’t have invested, like I just chased it in, in s pv

1:09:50  Barry Ritholtz: Personally the, the co founder of Calci, the woman, what’s her name? I

1:09:56  Howard Lindzon: Don’t know, but I know it’s a woman. I just can’t

1:09:58  Barry Ritholtz: Remember her name. No, she was a guest on the podcast and I was she great. She was really good. This is years ago. Yeah. I, I’m not this three years ago I should never even thought to put money into it. So

1:10:06  Howard Lindzon: That’s what I’m saying because I

1:10:07  Barry Ritholtz: Don’t, it felt sounded more academic than anything.

1:10:09  Howard Lindzon: It was academic. Yeah. And 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. Right. All, well, Twitter,

1:10:19  Barry Ritholtz: Press aside. Well Twitters started getting the drain at this point. No,

1:10:21  Howard Lindzon: But I’m saying at the beginning it had a lot of power even though there weren’t that many users.

1:10:25  Barry Ritholtz: It was, it was, you know, it was a fraction of Instagram or TikTok. So put markets

1:10:30  Howard Lindzon: Is the same a fraction. It’s a fraction of the news. But I’d rather my son and daughter go to page two of Poly Market. ’cause you know what? They’re gonna see news that they didn’t, wouldn’t never look at it in the New York Times and go look at the election in Peru and now at least I’ll know the names

1:10:45  Barry Ritholtz: Or Venezuela for that or

1:10:46  Howard Lindzon: Venezuela. So I am super bullish for different reasons on prediction markets. And I know there’s like, obviously I have money on this

1:10:53  Barry Ritholtz: Side and this fits right into the Degeneracy index. It fits completely.

1:10:57  Howard Lindzon: How

1:10:57  Barry Ritholtz: Long does the DEN index run for? Is this a short term thing or does this have legs?

1:11:02  Howard Lindzon: Great question. That’s why I don’t want to charge for it. ’cause I think I’m a elect. ’cause Google and Apple are my biggest positions because they are the rails for the degenerative economy. They are the front facing tool of it.

1:11:14  Barry Ritholtz: And Apple ’cause of the phones and mobile, Google and

1:11:16  Howard Lindzon: Google ’cause of the phones and YouTube and the on YouTube store course the casino games all run on the app stores. Right. Like the free games that you have, they make a fortune

1:11:25  Barry Ritholtz: Off that Apple. Apple. Why not Amazon or Facebook? Amazon

1:11:27  Howard Lindzon: Just added to the beginning of the year ’cause of robots, axons in the

1:11:32  Barry Ritholtz: Portfolio. Not close to the Amazon web service ’cause of robots.

1:11:34  Howard Lindzon: Yeah, I mean it’s just am You can’t not own Amazon at this era in degenerate economy. ’cause they’re the center of it. Again, that’s which robot,

1:11:41  Barry Ritholtz: Which robot shops do. Like

1:11:42  Howard Lindzon: You can argue is a degenerate economy. But you have to own any

1:11:45  Barry Ritholtz: Of the robot builders you like.

1:11:46  Howard Lindzon: No. ’cause they’re too early. I mean personal investor in a few, but Clear, secure,

1:11:50  Barry Ritholtz: Give us some

1:11:51  Howard Lindzon: Names. Apron, which is just massive. Right. But again, it’s a personal investment. You

1:11:56  Barry Ritholtz: Have any interest in what Elon is doing with Gro and I

1:12:02  Howard Lindzon: Mean Yeah, but it’s a holding company. Like I, I don’t know what position.

1:12:05  Barry Ritholtz: It’s kind of random.

1:12:06  Howard Lindzon: So, so meaning

1:12:07  Barry Ritholtz: Tesla is a holding company for everything but SpaceX

1:12:10  Howard Lindzon: Or is that space gonna be the entity that goes public for

1:12:13  Barry Ritholtz: Space? SpaceX? I thought it was SpaceX.

1:12:14  Howard Lindzon: No, but I’m saying to SpaceX, why does he need two tickers? Like again, I don’t understand what the final being is. So why do I need to own some Elon holding company? I think I’m stupid. So

1:12:24  Barry Ritholtz: Because you’re betting on him and you don’t think he’s,

1:12:26  Howard Lindzon: Who cares? I’d rather bet on something. I understand.

1:12:29  Barry Ritholtz: Amazon, I’m with you. I’m not, I don’t disagree. I’m trying to

1:12:31  Howard Lindzon: F figure. Yeah. Another recent ad is it’s already doubled. It’s clear, secure, you know, clear. When you go through it, it’s lot clear. So to me if the world’s degenerate, you need security. So it’s more secure. It’s clear. Clear’s been a home run. They don’t have a lot of tech, but the great brand. Yeah.

1:12:45  Barry Ritholtz: And I thought they have tech isn’t it?

1:12:48  Howard Lindzon: I think they license a lot of the

1:12:49  Barry Ritholtz: Tech every, oh that’s not theirs. They don’t

1:12:51  Howard Lindzon: 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 and that the company’s been around forever

1:12:58  Barry Ritholtz: And they have the relationships. They’ve failed many times with FAA on the

1:13:01  Howard Lindzon: Airports and they can do so much more around stadiums. The brand matters.

1:13:05  Barry Ritholtz: What are you talking about? You go to watch a Nick game. It’s clear. It’s clear. Okay. You use clear on the way in.

1:13:10  Howard Lindzon: 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. I like

1:13:20  Barry Ritholtz: You use either Chase Reserve or Amex, I wanna say platinum. You get, you get a credit towards any travel and Clear is just an automatic, it’s no brainer. Yeah. I’m Is it $150 a year? It’s fantastic.

1:13:34  Howard Lindzon: It’s, my son would call me and goes, 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 it just a 20-year-old knows it not a brand.

1:13:45  Barry Ritholtz: Maybe it catches on. Maybe it doesn’t. Yeah.

1:13:47  Howard Lindzon: C-B-O-E-I love it. ’cause they power the whole thing. You can’t do this without C-B-O-E-C-M-E. The Merck, you know, is, you know, the New York Stock Exchange. Let

1:13:58  Barry Ritholtz: Me ask you a question, a direct investing question before we get to our favorite questions that I, I think a lot of investors have a hard time with. I started on a 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 gonna go outta business. Yeah. Maybe five or 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 not a math

1:14:29  Howard Lindzon: Guy indexing. I’m so into indexing. No, I

1:14:32  Barry Ritholtz: Mean on your, on your private seed state, like most of the seed investments you’re gonna make aren’t gonna give you return. It’s a great

1:14:40  Howard Lindzon: Question.

1:14:40  Barry Ritholtz: Return.

1:14:41  Howard Lindzon: I’m

1:14:42  Barry Ritholtz: Bearish. Do. Oh, I’m wrong all the time. I’m just

1:14:44  Howard Lindzon: Bearish on my industry. Right. I’d never, I believe it was a moment in time with Zer. I think it got the country through its unintended circumstances. We live in all these unintended circumstances.

1:14:55  Barry Ritholtz: Consequences, right?

1:14:56  Howard Lindzon: Yeah. Or ci. Yeah. Unintended consequences. Sorry,

1:14:59  Barry Ritholtz: By the way, not that you 60 wealthy, that happens a whole lot more.

1:15:02  Howard Lindzon: I’m wealthy just born at the right time. Lot of unintended circumstances. Zer is a good thing. Right? I’m not saying, I’m not saying I shouldn’t be ashamed, but

1:15:09  Barry Ritholtz: If you have assets, if you’re, if you’re a Yeah, a working stiff, it’s like I used to be, it was tough. Yeah.

1:15:15  Howard Lindzon: S and 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? It just has never been a better time to have assets. Right. It doesn’t mean I don’t know when it’s gonna end. I have cash and stocks. It’s a double whammy. The, the, 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 could go buy sand disk right. In the public markets and get 6000% in a year. I’m not saying I’m smart enough to hold these things right? But in a world where Robinhood and a thousand Robin Hoods are gonna bloom, if you’re asking me my biggest bet, public markets do the work. You have an analyst in Claude, right? You can go see beaten up, no one’s following any stock. Everybody’s momentum investing. Go find 10 companies. So let, 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

1:16:17  Barry Ritholtz: 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 gonna work out? Is it just the nature of the beast? No. Or does that weigh on you at

1:16:33  Howard Lindzon: All? No, I think it, it aligned with how I thought of the world as as, as someone who believes their high integrity wishes, who, who wants people to believe they’re high integrity for my kids’ sake. And you know, the integrity of telling my investors that upfront is the release. Meaning I’m not telling my investors we’re gonna be 90% hit rate. If you give me money, you’re gonna hate me because you’re going to think the idea that I love is the dumbest idea. The Robinhood quote

1:17:02  Barry Ritholtz: Unquote Yeah. Dumbest idea I’ve ever had.

1:17:04  Howard Lindzon: You are betting on me to hang 30 pieces of art in Ma Howie’s gallery that Larry David Gallery and you will pick, and if I gave you the choice to invest in all 30, you would pick the two that went to zero. So you’re betting on me to dece the world my way. And then I’m not telling you we’re gonna make a hundred times our money, but my job is to find one company that’s a hundred bagger. Ah, okay. So I, so I have to know math, I have to do this, I have to have just get yelled up 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 Robinhood and we found many of them, you know, life flock, Robinhood beehive. We just got one called alpaca. Again, a trend with no

1:17:48  Barry Ritholtz: Ai,

1:17:49  Howard Lindzon: Alpaca powers, a thousand Robin Hoods around the world. They’re like the eight modern apex. So I’m saying like, our job is to know what we know, take crazy bets and and sell that to our LPs is 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, and, and now it’s a different game again. And I’m thinking like with you’ve got Claude and you can do an an, you can analyze the stock in like three seconds. I’m like the, the the, the everyone’s a CFA all of a sudden if they wanna be. Right. What a great time to be a public market investor. And yet everybody wants to be a private investor. So again,

1:18:29  Barry Ritholtz: It’s a it’s so funny coming from you. Yeah.

1:18:31  Howard Lindzon: Special. No, 2020. I’ve been writing about this since COVID is 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.

1:18:44  Barry Ritholtz: And the degenerative economy is gonna Dr. Continue driving this theme.

1:18:47  Howard Lindzon: Yes. And I think most people should index, but everybody should learn how to pick stocks too in this era.

1:18:53  Barry Ritholtz: I gotcha. Yeah. Alright, so it’s almost midnight. I only have you for a few minutes more and you have to end up at, at your events tonight. Cash awards tonight. Yeah. Cash Egg Awards

1:19:01  Howard Lindzon: And Breaking News. October Fest. October 6th. Coming back to New York. That’s our big event where

1:19:06  Barry Ritholtz: That’s

1:19:07  Howard Lindzon: Exciting. Yeah. A thousand people on the west side.

1:19:09  Barry Ritholtz: I’m, I am looking forward to that.

1:19:10  Howard Lindzon: October 6th if you want come hit me up.

1:19:12  Barry Ritholtz: Let’s do our speed round. Five questions,

1:19:16  Howard Lindzon: Two hours,

1:19:17  Barry Ritholtz: 10 seconds each. Okay. I’m gonna jump right into it. Starting with

1:19:21  Howard Lindzon: Boxers,

1:19:22  Barry Ritholtz: Who were your early mentors who helped shape your career?

1:19:26  Howard Lindzon: I think part, I hate saying this, I didn’t have good early mentorships, so I I really take pride in mentoring other people because I think Who

1:19:34  Barry Ritholtz: Were your later mentors? I hear Fred Wilson the

1:19:36  Howard Lindzon: Time. Yeah, you like people that I discovered, like the mentorship came from the community being the mentor led me, like Stock Twit being a giver opened me up to get mentorship. I think young kids are not getting good mentorship.

1:19:48  Barry Ritholtz: 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,

1:19:56  Howard Lindzon: I got your, but I don’t read.

1:19:58  Barry Ritholtz: You’re on flights all the time. What do you do? Just movies.

1:20:02  Howard Lindzon: I’m so addicted to like HBO, Amazon.

1:20:06  Barry Ritholtz: So you’re watching series. Yeah, I

1:20:07  Howard Lindzon: Built, I’m just very into content

1:20:08  Barry Ritholtz: That content’s my next

1:20:09  Howard Lindzon: Question. What? But hang on. So you’re asking books. I still love the classic Shoe Dog for business. You know Phil Knight’s book? I love that. That was fun. I guess he’s biography. I I like stuff. I just, I just, my brain doesn’t work with books.

1:20:21  Barry Ritholtz: Huh. That’s really interesting. Yeah. Tell us what you’re watching on Netflix. HBO Amazon.

1:20:27  Howard Lindzon: I just rewatched the Nick. Have you watched the Nick on HBO Soderberg? Why does that sound so familiar? Oh, it’s about the 19 hundreds. The Knickerbocker Hospital.

1:20:35  Barry Ritholtz: No, I did not watch that best show. Really?

1:20:37  Howard Lindzon: This season it’s about, 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 19 hundreds and soho in New York,

1:20:57  Barry Ritholtz: Huh? I’ll check that out on hbo. It’s, give us one more.

1:21:00  Howard Lindzon: There’s very little good stuff on tv. I think Rooster’s pretty

1:21:03  Barry Ritholtz: Good. Can I tell you something from HBO

1:21:04  Howard Lindzon: Rooster’s

1:21:05  Barry Ritholtz: Is funny. You have that backwards. There’s okay, there’s too much to stuff,

1:21:07  Howard Lindzon: But I think I’ve seen it all.

1:21:08  Barry Ritholtz: Have you seen Landman

1:21:10  Howard Lindzon: Great. But that’s, that’s more like Harlequin romance kind of series. They’re fun to watch and the kids like ’em too.

1:21:16  Barry Ritholtz: Okay. But the Nick

1:21:17  Howard Lindzon: You’ll love ’cause it’s

1:21:18  Barry Ritholtz: Superior piece. You see three Body Problem if you want something a little more.

1:21:21  Howard Lindzon: No, but that’s sci-fi I think. I don’t like sci-fi.

1:21:23  Barry Ritholtz: You don’t like sci-fi? No, I just, so you didn’t watch The Expanse?

1:21:27  Howard Lindzon: No, I didn’t like that either. Oh my gosh. I try it and I never get into it, huh?

1:21:30  Barry Ritholtz: Yeah, that’s interesting. I like

1:21:32  Howard Lindzon: Degenerate stuff.

1:21:33  Barry Ritholtz: How do you feel about Spy, that sort of stuff? I love him killing Eve.

1:21:39  Howard Lindzon: Killing is good, was great. I like spice. I can rarely follow it. Well nine because I, I start have you start dozing up. Yeah, it was good.

1:21:46  Barry Ritholtz: Wow. Yeah. Really. How about any of the British period pieces? I,

1:21:49  Howard Lindzon: I love Brit Box. I watch

1:21:51  Barry Ritholtz: Bri Box. Alright, so the Crown Bridge, Bridger Tin,

1:21:54  Howard Lindzon: Not Bridgeton, but Brit Box is a great channel. Yeah, there’s that criter criterion for old movies.

1:22:01  Barry Ritholtz: If you have Brit Box, go back and watch. What was the name of that show? There was a show that came out around the same time as friends only coupling. And it had, oh, I’ll watch it. It has teeth. It’s, I mean, everything from the nineties is a little dated, but whereas friends was kind of milk toast 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.

1:22:28  Howard Lindzon: Okay. Yeah. So I’m a media fanatic, but not like I’m weird and I’m know that so bullish on YouTube, apple tv, YouTube

1:22:37  Barry Ritholtz: Is just great.

1:22:37  Howard Lindzon: I just love YouTube.

1:22:39  Barry Ritholtz: 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?

1:22:53  Howard Lindzon: Well, 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. Like, don’t worry about pay or title. Worry about finding something that’s working this way. It’s, it’s much easier to go work for a company that’s just working. So go like, ignore the title, ignore

1:23:16  Barry Ritholtz: Low end job at a,

1:23:17  Howard Lindzon: Ignore the salary, right? Find a rocket ship and attach yourself, whether it’s manscape, you’re gonna learn more. You’re either, you’re gonna be smarter people around, there’s gonna be, you know, less aggravation, more work, but hey, like, if you’re really serious,

1:23:32  Barry Ritholtz: But you gotta grind it out.

1:23:33  Howard Lindzon: I tell my daughter is like, if you’re really serious about this, it’s gonna take a lot of work, but go do it. If you’re not serious, be a socialist. Like, it’s okay, but like, don’t commit, don’t fool yourself. Like go work for a rocket ship. Otherwise, dude, who are you talking to? So like, there’s no room anymore for these kids that, like, if you wanna start a company, do you know it’s 24 7? Right? And if you, and no one’s gonna like you. And if you wanna 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

1:24:06  Barry Ritholtz: More. And our final question, what do you know about the world’s of venture and, and seed investing today that would’ve been helpful 65, 70 years ago when you were first getting started?

1:24:17  Howard Lindzon: No, I think I luckily got the right mentorship entered at the right time. I think you have to do it for a while. You gotta get a crop, like if you’re gonna go do wine or weather matters. And same with tech. Like what matters with tech is you have to get, if you, if you were of the Google Glass era, not much worked, right? If you were in the Blackberry Fund 2008, no go. No go baby. So, so

1:24:39  Barry Ritholtz: Unless, unless you could have been an early investor in Apple or when they were public, when the iPhone

1:24:44  Howard Lindzon: First came out, I, 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

1:24:51  Barry Ritholtz: Thought seed investing or venture investing really became cool in the nineties and then in the 2000 it kind of faded. No, it became,

1:24:59  Howard Lindzon: No, it’s never been more in, it’s never been more loved

1:25:03  Barry Ritholtz: Today. Oh,

1:25:04  Howard Lindzon: I go see these young kids, they, it seems like they know nothing and they all wanna be venture invested. I’m like, yeah. Have you ever bought a stock, like 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?

1:25:21  Barry Ritholtz: Gotta graduate to private.

1:25:22  Howard Lindzon: Yeah. I think the most, the guys that got who were 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, how mar 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. Now the prices in private markets make no sense to me,

1:25:43  Barry Ritholtz: Howard, it is always a blast. When you come in, you’re bucking Bronco. I never know where we’re gonna go. You are not Larry David, you are the Zach Galifianakis. Oh, I love Zach of, of finance. He was

1:25:56  Howard Lindzon: Just on Conan watch out episode.

1:25:57  Barry Ritholtz: I should, I should put two ferns in here just for your arrival. Thank you, by the way, for, for being so generous with your time. And good luck at the cash tags. Thank you awards tonight.

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• Why Almost Everyone Loses—Except a Few Sharks—on Prediction Markets: A WSJ analysis shows a small number of accounts on Polymarket and Kalshi—often pros using data-driven algorithmic trading—take home most of the winnings. Polymarket and Kalshi run on the same dynamic as every other market — informed pros take retail money. The only surprise is how many retail bettors keep showing up. (Wall Street Journal)

• What $25 Billion Spent on the War in Iran Really Means: $25 billion is similar to: The annual budget of NASA. Spending on military aid to Israel after Oct. 7. Spending by U.S.A.I.D. before it was disbanded. The cost to expand Obamacare subsidies for one year. These are all comparisons to other aspects of the U.S. federal budget. An Upshot interactive translating the bill into the things we said we couldn’t afford. Opportunity-cost journalism at its best. (New York Times) see also The real cost of the Iran War: $72 billion for the first 60 days: Popular Information crunches the numbers. The official accounting is at least $47 billion too low. (Popular Information)

• This Summer, the American Water Crisis Becomes Real: From the West to the Mississippi, the water-infrastructure stories are converging. The summer of 2026 may be the year the abstract becomes the ordinary. Concerns over water access are poised to consume summer in the US, as crises in Corpus Christi and across the Colorado River threaten to boil over. (Wired)

• Meet Clout-as-a-Service: Where weaponised FOMO meets digital gaslighting: What happens when “experiences” evolve from physical presence to virtual tags. On the influencer-rental market and the manufactured-virality economy. The internet is mostly performance now; the prices are finally legible. (Girl Online)

• In Wine Country, Sales Are Down and Fraud Is Rampant: Ian Frisch on a luxury market in retreat, and the fakes that always flourish when the real stuff stops moving. Fraud loves a soft tape. The industry’s murky supply chain has long attracted scammers and con artists. In the words of one expert, “Wine and fraud go hand in hand.” (DealBook)

• The Convenient Narrative Letting Insurers Off the Hook: Blaming hospitals isn’t wrong. But it’s incomplete—and it’s exactly the story insurers want told. On the framing tricks that keep health insurers blameless in the public discourse. Worth reading before your next employer-benefits meeting. Blaming hospitals isn’t wrong. But it’s incomplete—and it’s exactly the story insurers want told. (Health Care Un-Covered)

• Babies Are Bleeding to Death as Parents Reject a Vitamin Shot Given at Birth: An Essential Shot, Vitamin K, which help the blood to clot, are one of three key interventions for newborns, along with an antibiotic eye ointment and the hepatitis B vaccine. The government doesn’t track vitamin K rejections, but hospitals have seen a rise in parents opting out of the shots for their newborns, often driven by unfounded fears. Hundreds of children die each year from spontaneous bleeding in the brain, a common result of vitamin K deficiency, suggesting that many related deaths go unreported. The vitamin-K refusal trend produces preventable infant deaths. (ProPublica)

• The media blackout of Jared Kushner’s historic, ongoing corruption scandal: As Trump’s son-in-law returns to Pakistan for more talks with Iran, major news outlets are largely ignoring an egregious conflict of interest. Judd Legum documents how the press has failed to cover Kushner’s ongoing foreign-payments scandal. (Popular Information) see also How the Trump family’s business deals could open the door for future presidents to profit from office: The problem of conflicts of interest goes back a decade to when Trump first ran for office, but some government ethics experts and historians argue it’s more pressing than ever as conflicts pile up in his second term that they consider unprecedented, blatant and dangerous to democracy. The AP’s Bernard Condon on the precedent being set in real time. The norm erosion outlasts the administration that caused it. (PBS)

• The Corporate Thriller Lied to Us: On the genre’s long arc from ‘corporations are scary’ to ‘corporations are simply the world.’ A useful frame for what we expect storytelling to do. Criterion Channel is hosting a retrospective on Hollywood’s “corporate thrillers” from the 1980s through the early 2000s. If anything, their message about the capitalist rot in America’s institutions looks far too tame for how the last couple of decades turned out. (Jacobin)

• Adam Silver Goes to War: The mild-mannered NBA commissioner has overseen a time of peace and prosperity for his league. Until now. The NBA commissioner is taking on tanking, gambling controversies, and a bloated playoff format. Now, with the 2026 playoffs under way—the capstone of the most turbulent regular season in modern NBA history—Silver for the first time faces real trouble. The quality of the product has diminished. Narratives surrounding the league are prevailingly negative. Things once taken for granted—commercial satisfaction, cultural prestige, national relevance—no longer seem guaranteed. Peacetime is a thing of the past; for the foreseeable future, the commissioner will be at war—with fans, with media critics, with players and coaches, with the game itself. I came to Nashville wanting to know: Does Adam Silver have the stomach for this fight? Tough room. (The Atlantic)

Video of the day: Stronger Than Steel. Lighter Than Plastic. Why Aren’t We Using It?

Be sure to check out our Master’s in Business interview this weekend with Howard Lindzon, known as “The Larry David of Finance.” He is General Partner at the seed fund, Social Leverage, he was one of the first seed investors in Robinhood, which IPOd at $30B in 2021, eToro, Manscaped, and Beehiiv. Previously, he founded Wallstrip, a daily online video show acquired by CBS (2007). He also co-founded Stocktwits, which pioneered the “cashtag.” Recognized by Institutional Investor as a “Super Angel;” his podcast is Panic with Friends.

Trump used the presidency to promote family businesses 110 times in 16 months

Source: Popular Information

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This week, I speak with Howard Lindzon, co-founder and CEO of StockTwits, and founder and managing partner at Social Leverage. His podcast is podcast is Panic with Friends. We discuss his outlook for venture capital investing, including what he sees as potentially profitable from human behavior.

Our original recording in April was postponed because Howard accidentally severed a finger completely — he had to have it surgically reattached.

His current favorite book is here; a transcript of our conversation will be available here tomorrow.

You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, Spotify, YouTube (video), YouTube (audio), and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.

Be sure to check out our Masters in Business next week with Joe McLean, Managing Partner at MAI Capital Management, where he leads firm’s Sports & Entertainment division, serving 100s of pro athletes/entertainers across NBA, NFL, MLB, PGA + NASCAR. His path to finance runs directly through the locker room as a 4-year NCAA Division 1 player at U of Arizona. Dubbed the athlete’s “Money Whisperer” by the New York Times, he is known for his non-negotiable 60% savings mandate for clients.

Current Reading/Favorite Books

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