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All right, guys, welcome back, Eyl. We are back in Gotham City. Another one, Yes, another one. This is going to be a fun episode. I met two of the gentlemen. I haven't met the third gentleman, untwol today. So David, Yes, pleasure to meet you.
Pleasure to me too.
I appreciate it. So Mike Novagratz, he's actually been on market Mondays a market Moneys. You remember that.
I remember. I love it. Some publications loved it, Yeah for sure.
Did you see what happened with that business inside and all these things? Yeah, what happened he's talking about x r P.
Yeah.
I seemed to put my foot in my mother.
Every time I opened it, I was like, wait, we made it to business inside.
Yes, that was good, but it was good. Thanks, good content, some death threats out of that. Things in Best Fast He's the best fast stage. Yes, touch that.
And we got Mel Carter Mel and somebody that we met in Abu Dhabi kicked it with good guy, very good connector of energy.
Yes, that's some mutual acquaintances.
Quite a few boy Larry Larry, great guy, and David Berry to round out the trio. Yes. So this is a unique group of eclectic individuals that have come together to create a powerhouse podcast that you are going to display very soon.
Very very soon.
Business untitled, Business, Business untitled. So this is gonna be a no conversation. I want to talk about each one of you guys individually and show and your mindset on business and investing in a variety of different things. But first and foremost, thank you for joining us. Appreciate it, thank you for having us. Sorry, sorry, sorry, sorry we made you wait.
It's only forty five minutes. But it's fine. That was good.
Yeah, you're supposed to be on our shots.
You're supposed to come on. That's why they see you hours.
Fine, all right, So how did you guys come together? First and foremost, how did how does this group actually happen? Because you're all you're different ages.
Right, I think that's the first denominator, amongst other things.
So how do you guys come together and actually form a friendship? And then a business high level? We met at a party. Mike has to see my watch, which was like, really is a Richard me? Lay took my watch, left for like three days, took your watch off your wrists, like yeah, let me see this, and that became it was that watch right there.
It wasn't this watch. It was the one he forced me to sell two years ago that I made a ship ton of money on, but good trade. But took my watch and I was like, the guy I just met left with my watch and.
Everybody was like, Oh, don't worry, he's a billionaire, like he'll find and I'm like, cook, here I have to do with him to do it with my watch, and I legit didn't hear from him for like three days, and at the time it's like my most valuable possessions, like one hundred and forty grand.
At the time, I'm like, what the the.
Fun and then one day I get a call from him, like three days later, like hey, come pick up the watch.
Then he invited me to his house and uh.
I walked to the door and it was like, uh, this old building bank downstairs, and I remember thinking, this is where a billionaire lives.
This is so weird.
And I walked in the house and it was definitely a billionaire's fucking house. He gave me back my watch, showed me around his billionaire house, and I can't get rid of him ever since.
That five years ago. That's so like, was that a test or did you?
Just?
Like right now?
There was more involved, Like I was hanging out with him, Meek was there, Uh, Meek's friends. The weed they smoke is a lot stronger than the weed I was used to smoking. And so I was at a bar. I didn't know where I was.
I don't smoke.
I'm i resection, and so these guys had me smoking the chronic. I went home. Jesus, I got a chain. I gotta watch what the hell happened?
He just because man? Because party was it?
It was a I think it was a kickoff.
Ruben's house.
One yeah house party figure. So it's interesting because the usual typical party. If somebody takes your watch, that's not something that's welcomed. But I was running around looking for him like that. Oh you so you felt the way about it? I didn't you all to say away when he did? Were you concerned?
Yes? And that's where everyone kept don't be concerned.
How did you get his number? How did you get your number?
I don't even think I had his number.
And he called, he came by. It's very nice. And then we met again at this Super Bowl.
Yeah, so you just got so high you didn't You didn't know what she was doing. You didn't know, you didn't know he was taking his watch. You didn't realize it that moment.
I probably don't remember. I had the watch, I had the chain. I was like, I guys, got to go home, guys, and no one said anything, So I just went home. Man.
Yeah, I had a full on panics scrambling with this guy.
And then you guys been rocking ever since we met in Super Bowl, like a few months later, and that's when we really want of his brothers, you can tell that story.
Yeah, when Dawn, they were supposed to be me and my three brothers and one couldn't come, and so we had an empty spot and mel was staying at the same hotel, and so we were like, you want to hang and he just kind of hung with us, and man, the baby was everywhere at that day.
Who is the baby?
The guy is everywhere? And that became a joke and he just started to having fun and I haven't been able to shake him since.
All Right, So, now, Dave, how did you come into this mix? Because you don't pay As a type that's going to leave with a chain or watch.
More, I would say I'm more responsible than Mike. But so I've known Mike for man thirty years or something since we wrestled in college and happened to meet. We wrestled for opposing teams, actually, but I had a friend that went to Princeton. I went to Colombian, So we met really early on. And uh about ten years after college when we had started families and such, and we had a lot of small world connections, and so we just started hanging out and almost like co raised our
families together in a sense. So we've been on a hundred trips together and have done a lot of different business ventures and friendships and parties and things like that, and so no, sooner than Mike meet mel Than mel and I hit it off like a house on fire. That was probably first that when we went to the Jackson Hole, right, yea, So he showed up to Jackson Hole, saw my eazys love at first sight.
And that was that, right, you got to ski. Yeah, he had a great outfit. He was one of the best guys on the mountain.
But well, oh it is very important and since then we've really like we spent a lot of time together.
To invested a lot of stuff together. Yeah, that's kind of been it.
So yeah, Mike, let's trilleders down a little bit. You came on Market Mondays and we know that you're a billionaire. You talked about cryptop We never really got your full story. How does it When does it start? Like, how did you get to what did you do to get to where you are now?
I was a middle class kid. My dad was in the Army. I went to Princeton. I was a wrestler. When I got out of school, I was a helicopter pot in the Army. And then I came to Wall Street and kind of a traditional career. I started Golden Zachs. I was lucky enough to become a partner there when I was pretty young. Then I helped start a company called Fortress, and Fortress was the first hedge fund private equity company to go public, and I did that with
kind of Wes Eden. Soon I owned the Bucks and Pete Brigger.
And so that was fun.
That's when I really made real money. Left that, you know, had a family office where I started investing in lots of different things, and crypto became kind of the thing. Well yeah, well yeah, what was that twenty fifteen? And so it was kind of a three chapter Wall Street career because they're all variations of the same thing. It's try to understand what's happening in the world and bet
on it and then talk about it. Like once you bet on it, you talk about it, so people understand what you're betting on and you can get more people to invest in it, indeed, because they educated and more enthusiastic. Why'd you switch from stocks to crypto? You know, I was in macro, which is currencies and commodities and stocks, and so it's really understanding the big cultural shifts, the big economic shifts, the big political shifts, and that's what
bitcoin is. So bitcoin at its essence and cryptoi essence is a macro movement, and so it was very natural and I still trade macro. You know it's in five to ten years, you'll see every trader on Wall Street on their screen. They'll have stocks and currencies and the long bond and gold and silver and bitcoin and ethereum, just like it's all the same. And we already seen that conversions.
So that your back. That's your background. Now you said you invest in a lot of things, right with the guys, So you're back.
I'll started in music. Yeah, my background started in music. I started managing acts, trying to get into music. Big fan of Damon ash jay Z, what they was able to do with Rockefeller as a kid watching them, and I was like, I know I can't rap, so I'll find someone that could sing or rap and manage them. Did know how to do that neither, but figured it out. Started managing. Got my first deal with this kid, Jovanni
and Atlantic Records. That didn't work out the way I hoped it would, but it got my foot in the door, and then later on kept managing found this act City Morgue. They ended up blowing up, was offered to be the senior vice president of A and R at Republic Records. I took that job, did that for like five years while running my label, Kari Ultra had a ton of success with the merch business and that I met Mike
shortly after that, and I never forget. We used to kind of not kind We used to sit and go over my finances and at the time I think I had like I don't know, like one point something million dollars in cash and he was like, you have more cash than like a guy that's worth ten million dollars. And I was like, what into bank account? Yeah, And he was like, you need to invest some of this money and just invested in things that like, don't even think about it again, and it's just if it comes back,
it comes back, if it don't whatever. Who he make some money, and you know, I just listened to him, and that's how I kind of looked at investing ever since, Like I'd just rather take whatever money I have when I get large chunks of money and put it into something. And some of them came back really great. Some of
them I'm still waiting on to come back. Some may never come back, and but I get a lot of opportunities between Mike and Dave and you know, we'll touch on some of the other things that did.
But that was my start. Music was my start.
So that the financial literacy piece, like you met them, met him, Yeah, and you're starting to gauge it prior to like did you google who.
He was and not just like maybe at night when I was like fucking trying to find him, but I had no idea.
So you you said something I was interesting. You said that he told you you had more cash than somebody that was worth ten million dollars. Yeah, I want to talk about that, But first, what did you invest in? Like the S and P five said to invest in stay safety.
I invested in like a lot of things alongside him, like I don't know who say yeah, like whoop phase clan.
So you just thought it did you just went straight to yeah, to investing in company.
Like private bitcoin. I invested in bigcoin to get the stock market.
You just went straight to the big.
Straight to invest in At the time, I think I invested in bigcoin like six grand, like uh.
A bio company, like just a bunch of stuff spread out like.
So this is like This is like one of these weird movies. You meet a random white guy, Nick milk Point that's high. He takes your watch. Three days later, he invites you to his penthouse in Manhatan. You open the door, it's like the Batman Chamber. And then he looked at your portfolio and he's like, this isn't what you should be doing. You should be investing. And then he tells you to invest in Phase Clan. Bitcoin, all just all kinds of just random things that just skyrot out out to whoop.
You're like, this is like what Eddie Murphy could have been in trading places the Blessing of Day.
Because Mike is like Mike is you know, you know, but Dave kind of like they both keep me kind of like Mike is like and David's like, no, come back down here real quick. But Dave is also like a super risk taker, so he I feel like Dave balances out me and Mike, you know what I'm saying, and like he's greater investing.
He'll tell his story. So like my mind set on the investing just kept growing, growing and growing and growing.
But the one thing I learned from both of them is just take a risk and don't be scared and don't think about the risks after how much ward comes back?
How much of that money did you invest?
I think maybe one point too off the table.
Do you have one point to many dollars to your name right now?
No?
At that moment, yeah, you had that to your name. He comes and says and to watch and to watch, and he says, invest you should, and you invest every single thing you have everything.
That's how I always listen to some degree, because he mel was lucky enough or smart enough to have a good income. So he was making money for you.
I was making man, I knew If I knew he was all that money, would you make it back in a year?
He wasn't burden furniture, Yeah, like you were.
Gonna have to sell? Yeah.
Yeah, So Mike, you said, ten guys with ten million don't have that much money in cash? How much money should How much money should a person have in cash?
Again, so much depends on how old you are, what your lifestyle is, and what your income is. Right, So if you have no income, like you retire, you better have a bunch of cash because you gotta pay your rent, you gotta pay a car bill, you got to have it incidental expenses. But if you know you're making one hundred thousand a month, right, you pretty much can cover
anything you need to deal with. So you can you can really run your investment portfolio with low cash and high risk and so so much because your your personal risk tolerance and your opportunity set. What I what I realized and one of the things that I wanted to kind of experiment with in some ways. I mean it wasn't a mental experiment. But there's not a ton of black wealth, period, right, thirteen percent of the population, one and a half percent of the wealth in this country.
Until that changes, our country's kind of broken. And one of the ways you create health. His network, right, Melissa, stunningly good networker. You put him in any room and everyone likes him. I know, it's his big smile or dopey face, I don't know. And so you know, he went to the Milking conference. Next thing you know, he's
going to Saudi r Abia. He's in the Mid East, and you know he's friends with everybody he met, you guys, right, So that ability network, Well, if you grow up in a bad zip code, you're networking with you know, people that are aren't creating a lot of wealth. You put them in a room with wealth creators. He's going to network and get opportunities. And so now he's bringing more
opportunities to Dave, and either we're bringing to him. And so a little bit as guidance, a little bit is just introducing people to the networks of money, Right, how do you raise capital, how do you find ideas, how do you use your political connections to get stuff done? All of that process that lots of people that don't grow up with that never have access to. And that's a little bit the idea of the podcast.
So we got your story. Yeah, we got my story, Dave, we got we got to get your story. So I know you said Columbia. Yeah, but your background is in developing real estate, right primarily. Yeah, So so explain to the people how you've come to prowse at this level.
Yeah, you've done it.
So I was. I went to Columbia. I was a wrestler there. That was a big part of my life.
I went to law school afterwards, to Georgetown and actually passed the bar in New York and Jersey and practiced law for about three years in New York and you know, learned what I had too.
From that.
It was I think it was a really good base for understanding contracts, how to communicate clearly, and things like that. And from that went with my brother into real estate in the let's say like early mid nineties. My father had done development of affordable housing kind of real estate, so I was I was schooled. I had a little bit of background in it, and you know, understood some things and and and that was a really good time to start investing in real estate. Back that was one
of those times like we're almost in now. So we started with apartments in North Jersey, moved from there to the city. We got into hotels in say, early two thousands. W Standard Chiltern Firehouse came after that. And really at that point in time, as I started broadening my investments, started looking into technology, other food and beverage and hospitality platforms, biotech at this point in time, you know, mushrooms, crypto and so like. In a sense, I've been entrepreneurial the
whole time. And if really, I know, you guys had had Steve Harvey on once and I watched the thing and he had like these five rules, and I thought they were pretty interesting, right.
I think you had said something about it, and.
It was dream big, have imagination, and great gratitude, right, don't fear, you know, control your fear, and then have faith that's going to work out. And I think that's really what like entrepreneurism is about. And that's really how I've been living my life in a sense, in a business sense of like pushing into things even when I was uncomfortable using you know, I didn't use exactly those
five mantras, but but essentially effectively doing that. And so that's what really allowed me to push in and just bring so many opportunities. You know. So when I got involved with for instance, catch with Mark and Eugene and and you know, one of their kind of like founding investors in that, it was really because I had put them in an opportunity earlier in the w hotel before they had started. And so it's that kind of thing
that's always served me well in life. You know, same thing with Mel and you know many people Mike and I and we just kind of create this network and and so it's I guess it's it's real estate would be a big portion of what for sure, what I do and what I focus on, but I do have a bunch of other venture investments.
That I also pursue.
Yeah, I want to personally thank you for Catch. It's my it's my favorite restaurant. It's my kid's favorite.
I heard you say that, like when I left here today, I said, what do you want to do today? She'said, can we go to Catch? I was like, interesting enough, I might know a guy.
Get your table. Well that's that's all.
That's all kudos and gratitude to Eugene Ram and Mark Burnbaum because it was really their entire brainchild in execution, but I was happy to be a part of it.
So this is how Larry gets hooked up with Catch?
Yeah, yeah, I hooked him up with Catch.
Okay, yeah, because when the first time I met Larry, excuse me, we started talking, he started talking about restaurants and I just happened to drop.
That name and he was like, that's my favorite restaurant, you know. And then I was like, oh I could dinner might happen.
And then about a month and a half, two months later, we had dinner at Mike's house and that's where that started.
So, all right, what do you guys look for when you are investing in these type of investments. Because we took a while stocks, that's relatively kind of easy to figure out. I don't want to say easy, but you know, when you're doing private companies, it's a lot more variables that go into play. You got to wait a lot longer. It's a lot lower chance that it is even going to work out. Yeah, So what's the thought process.
Well, there's a whole I would say there's a whole spectrum there. Right, Like one of the big investments I have was in Bojangles and that was less risky. Right. Bojangles is an iconic brand in the South Fried chicken.
You know, the company needed a little bit of management shuffle, needed to cut some expenses, and needed to expand, And so you put money in that and you think over the four or five year cycle, you're gonna get twenty plus percent returns and then sell it out five to ten years later, or maybe not if you can keep building it. So that's kind of a I would say
a safer private investment. Something like the WOOP band, which measures heart rate variability, which all the athletes wear right and measures your sleep and to sleep, you get when I invested in that. It was a kid across the street came over and said, hey, you know, I played squash at Harvard. I'm doing this thing.
You know.
So you put one hundred grand in the start, then it starts doing well and you start putting more money in, and so that venture stuff smaller bets, you know, a little.
Bit of a yo.
Like in Atlantic City, you're hoping for the eleven. You better have trust the entrepreneur. He better be dynamic and be able to pivot if shit goes wrong, and you better have a pretty good idea that you're in the right space. Yeah, and those things are you know, one in three work, maybe one if you're great, one in three work if your average one in ten work.
But it starts out with like to summer, Right, it's like good people, right, somebody you trust that's going to execute this. That's how I look at it is is this person going to put their all into it? Are they honestly they are working? Are they giving their everything
to it? And then second with the business model, is it really something like in a space where if they do what they say, it's actually like a business with motes and fensible product right where it's not going to just be something that ten other competitors can just shave the margin.
So is there something a little bit unique enough that this comes also back to network and just how privileged yard to have a good network and how you I was with my interns yesterday. I was like, dude, you guys got to work and build your network. All these people that you just finish this internship class with, stay in touch with the people you worked with. Stay in touch with because over time some are going to become stars and successes, and those guys are going to give
you opportunities. We think of like Dave and I were the first capital they want investors in Peloton, and you know, we put a decent small, you know check a venture check in. It was probably two three hundred thousand dollars each. And at one point that three hundred thousand dollars was worth over one hundred million.
Oh, the two hundred thousand dollars that you invested at one point was worth one hundred million.
Yeah, two months before invested. I mean so after the IBO it went up to one hundred and forty nine dollars. Yeah, and so that made that Yeah.
So again Ty, so we went over.
My financials two months earlier out of got in right there.
And maybe the interesting thing that's something like Peloton is you know, we met the guy through a school connection. He came and sought us out because he knew we had capital. Dave and another friend of ours, Dave Heller. They actually did the work and joined the board and helped him build the company. I was a free rider, and you know, it was a small investment to start with. Next thing, you know, it was significant capital for anybody. And so again it's a little bit what I was
talking about with melgoing to the milking thing. Most people don't have networks, and so working and developing your network, getting into networks where you see opportunity is a good chunk of how people succeed.
Ye.
So there's a part there when we talk about molts, because you said that, and that's something we talk about with our audience a lot is finding the competitive advantage that separates you. So when you're looking at a company like Peloton, I mean use that example, like what molts are you looking for specifically inside of a company?
Yeah, at that time, what I was really looking at, you know, I'd known John Foley and had a lot of faith in him. He was a really great entrepreneur and stationary. It was really like the stationary bike and home fitness market at that time had nothing that was blending it really into like the Internet and the digital
culture and technology that was coming. And so I think what I saw there was was first mover advantage in a sense, and if he could create a little bit of a network effect with his bikes and with that programming, that that would be its moat in a sense right, because it was something that other people tried to compete with, some successfully the Mirror for instance, or Tonal, and.
Others had tried and failed.
But I think by having first mover advantage, and what happened there was interesting was we had to go on hyper speed because we had this problem where the delivery from China Taiwan actually was taking too long, and so like three months after we had raised the round, it was like, we need another round because we have to be able to purchase these things in advance, because nobody's
going to wait one hundred and eighty days. So I think the moat there really was getting ahead of that market having first move advantage.
Essentially okay, and so it I wonder when you're looking at the investment. Obviously had his peakings at one hundred and forty nine dollars. It's come down to like nine dollars now at a certain point that we have a discussion, like, guys, we might want to pull out the investment.
How does that go?
This is really interesting actually, and this is Mike and I had a lot of conversations about a lot of So what happened with Pelton was he actually Mike's you know, he's a macro trader, so when he is more I would say, inclined to at certain points lock a profit, take it off the table, you know. For me as an entrepreneur, I wrote it more part of my position longer than Mike. And it was really interesting because there was times first Suore in the beginning when he was.
Like, God, damn it, why did I move so much of that? Because you know, it moved it when.
It was like that seventy when it was still going on.
When people asked me what was the worst trade of my career? I had hired a new CIO and I said, what do you think about this? Pelicon and our three hundred thousand words were seven million at the time, and he was like, dude, it's a freaking bike. And he did a twenty one page report that said I should sell it, and I was like, and I was making lots of money and other things, and I was like, you know, I've never had a twenty to one venture.
Bet it was my first one. I was like, I'll just sell it and Dave and Dave Heller said, dude, don't sell it. Maybe take your basis off, but this thing's going to take off. And I didn't want to disappoint the new guy. I was busy with Ethereum, and I sold the damn.
Thing, all of it, all of it, like an idiot.
And certainly then that's that's seven million that I would have would have been like where one hundred and fifty million at one point and I was just watched and watched it, but it so when it started getting high, I was yelling at him. I was like, dude, you got to take some profit at one point, yeah, And so I was when he was like yeah, yeah, mister, seven dollars.
Yeah, no, but I was and Mike was just on me, and this is the you know, the power of that friendship, and he was like, look, trust me, I've seen this movie. And so when it started getting into sixty seventy in that range on the way up, not the way, you know, I was like peeling or off peeling or off peeling it off. I was doing some other strategies where I was selling call options to like kind of lock in and then depending on if it hit that, i'd you know,
release the stock or whatever. And so I sold a lot of mine in that time, like between like sixty and one hundred or something, and which even that was funny because when that thing, as you correctly pointed out, I think it had a high like one hundred and fifty, and I was like, my yeah.
I didn't try our friendship, but there was the first day's been.
Mad at me like twice in life once when I lost that one of them.
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So I lost our two ten year old kids in the middle of Cape Town, South Africa.
For three hours.
I was like, oh my god, Dave's actually Matt. I know the wives are going to be mad at me, But when Dave got mad at me, I know I was I'm screwed, and the other one was like a passive aggressive when Peloton was at one fifty and I've been telling him at sixty and seventy and eighty and ninety, I just sell more, sell more, sell more.
And when it was at like one, was like, but to be fair, it ended up really you know, really that mentality and bleeding that out. I mean I was done with eighty move eighty percent of my position in that range, and so then I could just ride the last twenty you know, really up and down to you know, I think I sold my last bit at fifteen or eighteen or something.
It's eight or nine now, but it probably when you when he looks back on it with an average price of seventy, having bought it at one, you know, it's probably the best you know, one hundred dollars investment with three hundred thousand dollars, Yeah, you still get you get a couple of those in your life.
Yeah, yeah, I'm bigg It's when I'm like, wow, one dollar investment, I mean two hundred thousand dollar investment, because I watched that. We have friends who are invested in and they bought coll options, and yeah, they believed in it. I'm like, oh, I'm trying to figure out what the mote is, right, because if somebody designs a bike that you could be competitive, it's tough.
The thing you have to be careful with this. So I was just just on a show and was asked, what's the best investment advice you ever got? And it's that great fortunes you're made in trend. So if you bought Microsoft, you just stayed with it because they had such a moat. They have a monopoly and it just goes and goes and goes, and smart people. So on the one hand, great fortunes are made in trend. On the other hand, markets are fiery and full of anxiety
and excitement, and we have these bubbles from time to time. Right, Crypto is a market that's prone to that. So in twenty seventeen there was an amazing bubble, then it crashed ninety five percent. There was another bubble in twenty twenty one. Peloton had its explosion based on the COVID bubble. Everyone's going to stay home and never leave again, and they're all going to exercise in their bathrooms, right, and so the insanity of price, So you've got to look at
both do these companies have a mobile? When prices get insane, you just got to get you got to go to the sideline and say, I'm not going to have the top. I had an amazing run. I'm done. You know, beyond me, you can you can have any of these fatty things that happened. You've got to be able to sell.
Ye.
I was going to really quick saying.
I think the moat for Peloton, though, was it was an opportunity where nobody was yet and if you could successfully execute first mover advantage to a scale, you started to get network effect, which they did with their trainers because they could tippeel all the best trainers because they had such a distribution platform, so Equinos for instance, couldn't compete with them, and that business just like music, you know, people follow trainers, right, a good trainer, So that I
think was what the moat was.
In a sense.
And I think what Mike said, I kind of bought it over from the music industry. And then when I heard Mike and Dave always tell me, like, don't get too emotionally attached to investment, and I used to do that with music all the time, Like you know, the first artist I had, Like, no, one couldn't tell me this kid was going to be wasn't going to be justin Biava, right, And he's an amazingly talented kid still
doing this thing to this day. But in my mind he was justin Biava and the rest of the world just biber I would say that wrong and the rest of the world just didn't get it yet.
So to be his kid for five six, seven years.
Just like you guys don't know.
You guys don't know.
And it turned out he wasn't right, but so, but that was just more me being emotionally attached to it and invest in so much already. It's kind of like when you're in the casino chasing that loss, trying to win it back, right, So I think with investing, I've.
Learned like to when it's time to one just not to.
Be emotionally attached to it and learn to cut your ties with it whenever the time is right or you feel this right.
And not like hold on and Peloton's going to go to two hundred dollars.
Because try to rationalize things to make yourself not feel stupid. Yeah, it's like, well I did the research, this has to work. Yeah, it's just a slumpingy economy. I'm gonna buy the dip. It didn't buy more dip, and didn't I buy more tips? And then it's like, well, you know, I'm looking at the charts. Then you start doing candlesticks. Then you start making your own philosophy on why it's there.
Is another write a story that I just found out about this recently.
So when I we started investing, Mike was like betting against Tesla, right, and on the downside, yeah he was too.
They both win.
When shorten at what point when the pandemic it.
Was it was prett pandemic. Let me tell you it was not a good time to be shortened. No, I think it was during the pandemic. I think it was the summer of twenty when it moved from like and it was just going crazy. Yeah, it was moving and moved at that time. I want to say, from like four hundred to.
A thousand, Like in that case I met against it with when our friends and lost like eighty thousand.
Can I tell the story? Yeah, this is really crazy.
So Mike and I have been shortening it and playing it short and like himself, and one day we come up to the Ampton's Mels in the car and we pull up to Mike's house and he looks at the driveway and he goes, damn for a couple of guys short Tesla, There's sure are a lot of Tesla's.
In this driveway.
It was like, and I sold all my provered, all my stuff the next day with it again because I'm like, this guy's right, like we're all driving Tesla's, Like what am I doing. I'm listening to some like investment advice I saw, like you know, CNBC or whatever and mean while you know, and it kept going up.
So yeah, it was.
It was a really interesting lesson.
I mean, it's dope even at the highest levels that y'all some of the same things you're saying, like we're experiencing so but but you didn't give up on music, right, which is because we just had this conversation with Yogati and Shotty was talking about like, Yo, investment is the same thing as like getting a musical artist, Like you're putting the money up front and looking at it as investment.
So it's interesting, Hey, you say you're not getting emotionally tied to it so recently like uh again, great, advice from Mike and Dave. Like recently I got into affordable housing and Mike is a part of it. One of my closest friends, Steven Manacherin and.
His brother, we have this company where we're doing affordable housing, got some buildings in the Bronx. Dave was helping us with a property in Staten Island, so on and so forth, and I was just kind of like, like Mike said, all these opportunities was coming.
My head was just spinning. I was like, I'm gonna do this. I'm gonna do this, and.
Mike kind of was like listen and Dave actually both was kind of like, figure out a couple things, focus on those, and Mike specifically said, don't be like Mike, who two years ago, I was just doing way too much.
And I was like, fuck, that's good advice.
So I kind of like trimmed down everything and focused on three big things, which is my record label, second Estage, shout out to two and anybody else I signed in the records, so with a clean line of Bow Jangles, which is my company, Meiling Bow, and real estate. And I was like, those are the three things I'm going to focus on on a high level and stop like you know, selling wagou b can this, that, that and whatever else it was. But I'm still like investing in
things that I just built the studio. My merch business does really well, like so it's just like still have things to bring me in cash. And but I'm focused on those three buckets in life.
And like one of the things that's important, especially when you're younger, is to develop domain expertise. Like we were at the the phitys and concert last night and they kept bringing people on and I was like, who is that guy? And of course Mel knows every last person showing up there and what their songs were, and you know, are they in the upper landed down? And so you're not going to really be great at a vertical unless
you got domain expertise. And so you'd be crazy to spend your whole life in music and say I'm not doing music anymore, right when you're starting to make the progress in music, and so you know, knock on wood second, the state becomes you know, the next quality control to shadow Coach K.
I was gonna say that the relationship with Coach K because he's involved in both jngles investment as well Yeah, so you had the relationship with him and brought them off.
So yeah, after Mike, Mike, and Dave actually bought both Jangles from like whatever standpoint the brand, the brand, the actual corporate brand, I was like, you know what, I'm gonna get into both Jangles, and I just kind of wanted to.
One.
There's a group of people who have access to even people like me now, right, because I'm like to have access to me now it means a little something because I could give you access like Larry. I bought Larry and introduced them to Mike, Dave and whoever else I'm I'm the type of person like I'm like excited to share my network with people because I strongly believe whatever's.
For you is going to be for you.
So like if you guys left here tomorrow and started a group chat, I'm okay with that because I want you to have access to them, I want them to have access to you, and we're still going to be friends.
Do I think a lot of people don't understand that and it fucks with them.
So when I had the opportunity for bo Jangles, I was kind of like, I want to bring some of my friends on board. Who probably wouldn't have this opportunity, just like I wouldn't have it if it wasn't for these guys. So I, you know, caught up Coach k I was like, hey, I'm doing this. I'm buying eighteen stares. It's going to make us like the largest black franchise or at Bojangles and just QSR.
In general.
I think we're like in the top twenty, right and we're the fifth largest franchise or in bo Jangles.
And I called up him, Steve Carlis Saint LANDREI gabba.
If I'm forgetting anybody, sorry, but you know, just like a cool little group, you know, along with Ben Black, Mike bay Berry, and we bought this.
We bought this.
Company for twenty five million dollars and you know, just it's my company along with Coach k. But I wanted to extend that to everyone in Coach k Is. He's one of us, now you know what I'm saying. Larry, like Larry's gotten Larry and Dave is actually closer than me and Larry, now you know what I'm saying. So it's just like I love, like what my success I've always said is people people believing in me and people me understanding people.
So I'm always like, it's where we come from.
Like you know what I'm saying, it's really hard to like meet guys like this or have certain opportunities. And when some people get it, they're like, oh, this is like I don't want to and I'm not, like, I'm the complete opposite.
I want everyone one. Like you know what I'm saying, Like what comes out?
Are you going to live life from a point of abundance? Yea, from scarcity and you're just happier when you live from abundance.
Yeah, Mel Mel is one of the most generous person people I've ever met in that in that capacity, He's so generous with his time, with sharing his contact, with helping in any way. And I think it's a really I think it's unusually he's unusually generous, and it really works. It really is, like you know, it kind of pays it forward and he gets lots of opportunities. But I think it's a big part of his success is really that enthusiasm and generosity.
Yeah, So Mike, you said something interesting. You said, Mel is now bringing more deals to us than we brought to him.
So I'm like, Mel when you present, I'm sure people are presenting opportunity to see you.
Now it's like, I know he's connected, So how do you decipher what's worthy of even presenting to the group.
Believe it or not.
Like I've learned so much that I could understand, like you know, like you said, who's the founder, you know what he's done before, just how much I actually believe in that person. And I like to think I just have a good read on people and what they truly stand for. And that's always took me places in my life, right because just like these guys, they're good guys, and
Steven is a good guy. Ben Black, like I truly believe my crew of friends David afa is really good people who we have we're very much aligned in just life. And then there's another group of people that I have tons of access to that I just can't function with on an everyday basis because.
Goals and hearts and minds and souls are just aren't aligned.
So I try to and I think that gets a little bit emotional, but it's just like I try to read people and understand people. I would like to say I'm pretty decent at that, and that's the ones. I'm like, you know, we should take a look at this one. It sounds like a great eye idea too. I kind of believe in this person. And then he would vet it, and then Dave would vett it, and you know, they're both so different at vetting things, but it ends up
the same all the time. So that's kind of like, I don't know if I answered your question, but that's that's that's how I kind of like gauge.
It's a lot of shit I just don't even bring up. You know, let me ask you guys. Start with you, Mike, artificial intelligence. When the age of artificial intelligence, we saw all of the AI stocks and technology stocks just boom because of chat, GBT, the buzz around and everything. A lot of people are concerned, scared, you know, jobs are being lost currently, so this this downside, but there's also
a lot of upside as well. What's your thoughts on AI and how are you actually implementing how are you personally using art? All you guys are playing So it's interesting.
My my brother in law runs the TED conference and so the first day chat she came out. He was like, dude, you got to see this, And so we start playing with it and making, you know, do a Saturday Night Live skeitch about Saturday Night Live sketch about somebody, and you know, we're kind of running through that kind of deal with it. And I started talking to my investing friends, and in real quick it was Microsoft and and Nvidia those were going to be the two, and so it
was almost consensus. It's one of those few things where every smart guy I talked to gave you the same answer, and they've worked. And so I would tell you that AI is going to be a bubble. Bubbles happen around things that will change the way the world operates. And so the Internet bubble happened in nineteen ninety nine, ten years before the Internet changed the world, because it was clear that it was going to change the world, and it was an easy story for people to understand. And
so we will have an AI bubble. Bubbles don't last four months, they last eighteen months, twelve months, you know, sixteen months, somewhere in that zone, twelve to eighteen months. And so what's driving the stock market now is a small group of stocks in the video Microsoft, Google that are going to keep going higher because the story's too powerful. So that's the markets are going to get way ahead of where AI gets. In reality, AI is going to
change the world. It's going to change how almost every business operates, and it already has. And I talked to the biggest hedge fund, quantitative hedge fund in the world.
The CTO.
It was funny. Guys showed up at a.
Party of mine and I was like, what are you doing. He's like, I'm a head of engineering at this hedge fund. And I was like, how many people you have worked for you? It's like a thousand. I was like, oh, that hedge fund, right, And I was asked him about AI. He said, dude, we've been using AI for fifteen for ten years. You know, this new generation, this new adaption is going to really accelerate them. And it was interesting.
He said, well, it's going to accelerate that. When you have these code driven funds, right, these quantitative funds, the code kind of goes stale every three to four years because you're changing theguage. And he said, so they're now going to use AI to refresh the code. It'll do it literally at six times the speed that they used to do it at and so saves them money, keeps
them ahead of the game. And so in finance you're going to see more AI, but in almost every business, and you know, it's a scary world because you can see ourselves going more haves and have nots. Right, it's I always worry that the world is hurtling towards blade Runner, right, Ken Shasha Zayer has fourteen million people that live without electricity, yet we're talking about, hey, can I get an iPhone that sounds like her, that can you know, keep me
company at night? And so it's I think it's going to be really fascinating to watch. Uh, it's going to be challenging to invest because some companies you know, are going to not have a moat and AI is going to eat them alive, and other companies are going to have. Well, the one thing about AI which is hard is it takes a huge amount of money right to get these language large language learning processing, so it's data, it's huge compute power, and so it's hard to be a startup.
Like the startups are raising billions.
But one thing what you mentioned the stock market, the NaSTA was flat for ten years, dot Com bubble, the stock market crash, so you said that those stocks will continue to go up. You don't think that a bubble would cause the stock market to fall.
It goes first.
The bubble goes up first, and then grashes. And I don't think we've seen a high end, but.
The stock market eventually will catch up to the crash.
Yeah, you're gonna What happens in every bubble is you finally reached the point where there's no one left to buy. And it usually happens run something symbolic like the Great two thousand and you know crash happened around the y two k right the Millennium turn. There was champagne being popped around the world. There was fireworks that went off twenty four hours right from and you remember this great
we went from nineteen ninety nine to two thousand. The Dow Jones peaked January one, and the Nasdaq had sixty two more days. It was like March twentieth or March nineteenth where the Dow was going down in the nags that kept going up, and then it crashed, and it
crashed with aol Time Warner. This symbolic the big old old school company buying the Internet company at a stupid price that was the last money in and then we had an eighty two percent crash of the Nasdaq, not a eighteen percent crash, eighty two percent high to low. And so bubbles go so much further than you think they're going to go, and then they crash all the way back down. And so we're not there yet. We're
going to go a lot higher. NA Video and then Microsoft and in this idea of the world's going to change because we just started it, right, we started talking about this four months ago.
Yeah, out of the AI, that's interesting and they don't want to hear and I want it both of you guys opinion on an app.
But inside of that, it's like there are companies out are here you talked about too in Video, Microsoft, But.
Inside of a bubble, there are always some that are going to survive the bubble and they last longer, right, So like there's the Amazon's the Apple, there's Yahoo for but there's also the Excite dot com that doesn't make it right, And so I wonder if you if you think there are companies that are on the come up or their startups that will come out of this bubble. I'm sure that I'm sure you have some thoughts on that, or should we be looking at it from a different perspective.
You said something very important. This takes a lot of energy, it takes a lot of capital, but it also takes a lot of storage. So should we be looking in that data center type of situation where like these are investments we should be looking at as well.
Yeah, listen, so we have a data center business at Galaxy where and it's been mostly for bitcoin mining, where like, okay, can we repurpose the other six center? Mega lots of capacity? And who's going to use those data centers?
Right?
So, like you know, the the elite businesses are going to stay with the elite data centers because they're not going to take any risk. But there's a whole bunch of different users of AI of data and so the answer is yes, But it's really granular and you got to kind of do your homework and there's not a macro bet on it. I don't think to say by all the data centers. I think you've got to be very careful to understand which ones are going to win.
So you're getting it with Amazon because you get you know, the big cloud providers already have it, So you're getting with Amazon. You're getting it with Google, getting it with Microsoft. It's why those damn stocks just keep going. So I wanted you to tell because you didn't. You look like you was about to say something, but you didn't have an opportunity to say something.
Well, just in AI, I was going to just say that. I think it's also like a term that's batted around in this way that it's like what really is AI? Because AI, to me, really is like machine learning where
machines are teaching it. You know, a lot of what masks as AI in some ways it's just like complex algorithms attached to the large language model, right, But it's I think we're still a ways away from like I don't know where the definition of AI or the singularity actually becomes right, where it's actually thinking, making decisions, teaching itself, and how far away we are I do think, just to you know, it's it's a pretty scary proposition because
I think it needs more ethical thought and moral thought
around where it's going. I think as a society, it's too easy for us to just build Adam bombs and then oh shit, one goes off, you know, And so I think there's a lot of danger around I, you know, Harreriri wrote Sapiens and also had something like twenty three Lessons for the twenty first Century and some books, and in that like his theory is the Industrial revolution replaced bodies, and now the intelligence or digital revolution culminating ultimately with
AI is going to replace minds, right, and so in the Industrial Revolution those jobs got replaced by programming jobs or the people that make the machines and things like that, and then you know, kind of where's the next thing. If so, I think it's I think there's a lot
to think about it. I'm not answering from an investment standpoint as much as just and you know, for my personal company, I just look at like, is it in a spot right now where in the foreseeable future it's going to leverage a business return for me, it's going to either have less friction, more market or how am I applying it to the business in a way that's meaningful and not just like, oh, let's just you know, kind of put this new program in.
And but it's hard not to think that in ten years every kid will have an AI tutor, right, Like, if you're rich, real rich, you hire a tutor for your kid and he comes over to your house for two hours a night or an hour two hours a week, and he sits with your kid, and he figured out where your kid is, what what what he needs, Like that's going to get replaced by and then the kids that grow up in flat Bush, maybe I'll have the same access to great education than the kids that grow
up on the Upper east Side. It hasn't happened yet, Devil's Advocate though.
When COVID came, I know it's not AI, but people started computer learning and scores went down.
Could we have it?
Could we haven't perfected or even kind of close to tutoring.
So my experience for AI is funny because like I don't know very much about it, just like no one, no one really. I mean, it's probably a couple of guys that knows a lot about it. But I was in the process literally when I built that studio. A part of the reason for billing that studio was because I wanted to start a publishing company. I was in a raise like four or five million dollars to start this publishing company, and the AI talk started happening right
around then. And a publishing company you primarily like sign produces song writer is you know, you may sign an artist and is publishing right, but you make your money from producers and songwriters. And I was like, you know what, I'm like connected in every label, I'll be able to play it. And I had this great blueprint. And then I heard songs that AI wrote right, like the Drake, the Weekend Song.
I'm sure you guys heard that.
I heard beats they produce, and I was like, Fuck, I don't know if I'm right about this, but I don't want to spend four or five million dollars building up a business for the next because publishing takes about three years before you hit that cycle if you do it completely right right where money's coming in.
And I just didn't know where AI would be in the music industry.
Three years from now, maybe AI's writing all songs and then there's no need for me to sign They buried to write songs anymore. Right, So I'm like, do I take a risk right now of developing and starting a new business based on like humans? Right that I'm realizing the very beginning stages of AI. They're doing it really
really well. And maybe three years from now AI is writing songs for Beyonce or songs for you know whoever producing beats for Drake and I don't have the technology, and he said it's a lot of money to do that.
So I literally completely stepped back from that business and.
Decided to just focus on real estate, Bojangles and music and just traditionally, like from a label perspective, because not because I knew.
It was just a gut feeling and I'm just like, you know what, instead of like.
Using all this money to do something I'm already unsure about now, this AI thing put me in a position where I just want to kind of wait and see what happens, and I won't revisit that business. It's just kind of passed for me at this point. But that was my experience with AI recently, and again hopefully I'm wrong, because like you said, that had cost so many jobs, so many songwriters producers out of work, which is fifty
percent of the music business. But from a label perspective, if I had to pay and I'm just making this up, if I had to pay Timbland.
Two hundred thousand dollars.
For a beat, and I could tell AI, hey, I need a beat that sounds like Timbland, and it cost me a fractic. Don't even cost me anything because I already paid for the program right effective as the label.
I'm going to go with that. AI.
So I'm I'm I looked at it from both perspectives and I just decided to completely backuate interests.
Well, appreciate you guys.
I know you got to run. How can they watch the podcast? When will the podcast be available?
They better could answer that, that's it back to you. No, we uh, we're shooting. We have like four we're only doing seasons.
No, we're doing twelve episodes each season and we have like maybe five done. We're going to finish up in September, and we'll be sure to let you guys know when, way or how, but it.
Will becoming yell, yelling, scream.
Okay, yeah, well guys, thanks to Ton the same and yeah, thank you guys. Appreciate this is a really insightful conversation.
So a great one. Thank you, Thank you guys, and you guys will be on that ship sure, all right.
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