How To Turn $100K into $4,000,000 with Distressed Investing

so after scott came on the pod and was like i have my distressed guy in europe i'm like ben find me the distressed guy in europe i feel like i could rude world i know i could be what i want to put at all in in like a day's off on a goal travel fine so sky was on our podcast he's and we asked him we say you know we heard the story that you were buying distressed f t x claims after f t x went into bankruptcy and everybody hated it it was like that it was a disgrace it was the the symbol of a bad bad business a bad investment i heard that you were buying up claims on the cheap and that those claims are now being paid out you know in full or even more than full because sam bank freed whatever he was doing his thing he had owned enough assets that would would make all the creditors whole and so he tells the story about how he's got this guy who's brought him into a couple of deals and he was talking about distressed investing and when he told the story he like he like kinda dismissed it he was like i bought ten million dollars of f t x shares or something like that two million two million i think was i'm sorry whatever it was it was like a seven figure bet and he sort of just said like yeah i did this one thing and sean and i were like rewind what and that's what able to story also it was a moment where it's like hold to put some respect on the podcast name but i mean i think a lot of people make fun of scott there's like the inverse scott gallo index and stuff like that basically about his bad calls he's made in his life and i think in general people don't really realize and sam you do a good job of this you're like actually you were on who sold a company for a hundred million dollars he never really talks about that much and then he done some interesting investing stuff and i just feel like because almost he's so good at the gift of ga i think people sort of bucket him as all talk no walk yeah so it was interesting to hear one of his interesting walk stories then i got in touch with tommy and we i say tell me about this i'm interested what are you doing and what are you what's going on and he had some interesting stories so i wanna invite him on the podcast to do two things teach us about this category of distressed with both both me and sam are pretty much novice in this like we are we're missionary guys we we are we're we like vanilla like we we do we do very basic stuff you know when it comes to a business and investing this is more exotic and it's gotta be interested i want you to start with a little crispy description of like what's the big idea with distressed investing what are you trying to do how what how we wrap minds about this and then i wanna play a game called first best worst weirdest which is where we go through maybe the first play you did the best play that ever worked out for you the worst deal that went sideways and then just something where shit got weird while you were doing it but i went first just can you just make us a little smarter teacher so you distressed investing one on one we talk man okay so i am the bottom of the food chain of distressed investing so there is a whole industrial complex of large distressed investing firms out there you have oak tree and silver point and fair and you can you guys apollo everyone's heard these names or maybe if you're if you're for all business and investing i guess so for myself i kinda came up a different way which is my parents were bankruptcy lawyers and i sort of learn i knew a lot about bankruptcy and generally what you're trying to do is you're almost like value investing in the toolkit is you know a lot about the legal process the trick that i've from studying a lot of distressed investing is you know and there's this famous michael pricing which you guys have probably heard but if you haven't it's sort of he says when you're investing you always want like the stake in the sizzle i think what where the okay investors in distress do right as they find steak you know you find something and maybe it's a double but where the guys that really knock the cover off the ball and have outstanding returns generally are looking for that sizzle as well stake is the kind of the known the known value that's there it's the substance it's the thing that will make you give you a margin of safety when you buy the sizzle is the upside of how good this could if things go right but you but you still have the stake even if if things don't go great exactly and that's even what the whole pitch on with what scott was which is you're buying a stake you're buying twenty cents you know you're gonna get thirty cents in cash back plus you have all this crypto sizzle and unless you're you know i don't wanna say a but unless you're just really really aggressively against crypto there was a lot of optional built into that and if you look at the history of distress some of the best ones have been financial service bankruptcies po scheme cases as well as like the dot com cases were actually pretty good you think of things like comm disco which was a famous large bankruptcy and a lot of those actually they kinda peter out because it wasn't as much debt was just equity values went to zero so so if you look at the history there they can be pretty good and that was kind of playbook was as my friend would say who's a pretty smart investor he says you avail yourself to the optional you know so because you sort of set yourself up to either buy that for for free you get it for free or buy it extremely cheaply so that's what we're doing at t and that's what we're really try to replicate in almost everything they do a matter if it's crypto or just general dis distressed is your company just you are you just a guy or do you have a team i'm just a guy i mean i have a small team i think scott calls me a lifestyle business guy but i would describe it as what's nice about what i do is i to choose when i work how hard i'm working if there's no deals i don't have to work on stuff and also because i'm in a low cost jurisdiction you know that passed through to my clients so you know as scott ping the usual fees that you would pay if you went to a big distress firm probably not i mean maybe because they want scott as a client but but the most part the fee structure would have to be higher your cost structure higher can i dumb this down like in a way like i'm kind of a caveman man and you can tell me if i'm right but basically you find distressed deals you convince rich people to buy them and you take a small cut is that right yes or i mess my own capital but yeah or you mess your own money and you're so good that people come back over and over again well if you lose money for people they generally don't return your phone calls yeah they they might call you but they don't they they don't they don't pick up when you call so let's walk through an example together and i think we should use t x because it's a pretty well known company it's kinda what we were already talking about so walk me through the origin story of of the f t x deals so that we can kinda see like a we can get like a a blueprint of the type of thing that you're gonna try to what is the type of thing that you do so where does the story start with your t interest yeah so we were our i had already been involved in a number of crypto distressed situations and i should back up to just say as a as a backdrop like have having studied so many different investors throughout my life and kind of that's what i was really always interested in is principally just being an investor one to the things she'll realize is the guys have really good returns also invented a category so i was very interested in crypto distress as a category and i thought hey crypto the future no one's willing to touch crypto so back in two thousand fourteen fifteen i was already looking at m go you know myself and at the time my partner we were the largest buyer of claims in m ox but before you tell the mount go story i just wanna double click on you said some of the best investors they ended up like actually now when you look back they kind of had invented a category can you give a couple of examples of people of guys who did that so like howard march is the is the pro typical example right like he kind of invented the whole idea of like institutional not just him there were other people of course but he was and in you know a very early early really and basically him in a a group of people and invented the idea of institutional asset class to distress investing so what that does is it compresses it lowers you know cost capital and and and really brings a whole pool of capital that we've never vested this so a long term returns might go down but because the the actual the actual cost capital is coming down and so you're your your tailwind returns are just enormous and what does that mean does that mean that like institutional investors they they were like normally afraid of us and howard i was like no this actually makes a ton of sense and it's actually kind of safe and here's why and so he convince large institutions to buy into that so what you're saying to allocate and the same thing with like early venture guys i mean i guess before you have like the seventies eighties i mean alan pat and people like that these were guys that really invented the category and of course they have huge firms now and you know the valuations for startups but it it's like the it's this wall of liquidity that creates these kinda of tailwind returns which are fantastic you want it i mean you kinda like that's the most amazing thing it's catching more those way like yc is a good example of this or yc basically created the category of the the you know the accelerator right it created the category of this so pre seed pre everything pre prep product pre revenue pre traction investing and so that really wasn't a popular category now it's a whole industry there's angels and they're super angels and their seed funds and pre seed funds there's a whole industry now that specialize in that category but it really started even paul said this as an experiment he was curious like how early on could you fund somebody could you fund a student could you fund a grad student and you know he sort of thought it might be too early but he wanted to go see what happens when you do that yeah and even you know for me when i was start starting my hedge fund my right first when i was really a kid some of my early investors were goldman partners that were partners when it went public and they were all sort of early l guys like lever buyout out guys before private equity became a institutional asset class and their returns were just insane like insane returns hey real quick our sponsor for today hubspot actually did something pretty cool if you like money stuff like this you're like investing wisdom like warren buffett or mona per bra well they actually put together a nine investment principles document there's a free document you can have of frameworks that they shared when they came on the podcast you can get it right now it's actually just a mental model that separates i guess the elite investors from the average investors you can get it right now scan the qr code or click the link of the description alright let me get back to the episode okay so let let's go back to your story so you're saying you got excited about potentially being the first in a category of crypto distressed distressed already was a thing but nobody most people were afraid to crypto in general so especially the institutional guys weren't gonna go there so you're like okay maybe i can carve out an niche of distressed crypto we're all looking for a thing this could be my thing and you're saying like x story actually started before that the before it was mount go sam are you familiar with mt do you know that the rough story here yeah was sort of coinbase before coinbase but it had some nefarious characters involved yeah and so there was a huge kinda like sort of hack problem with with mount go so tom what what happened with with m go what did you actually do there let's yeah so so m cox was really the fur it was almost eighty percent of the volume at the time in two thousand fourteen when it went under and it was the largest exchange i mean other than going peer you know peer to peer and going to starbucks and buying bitcoin like that was where you traded bitcoin and they had a pretty aggressive hack they tried to cover up the hack which was the real crime was to cover up eventually a foul for solve in japan and what's called a chapter fifteen in the states that's kind of irrelevant that just recognizes the foreign proceeding is the main proceeding and you know you could buy claims for a while you could buy them for about a fifth of the the the market price of bitcoin this is when bitcoin like three hundred dollars and then in two thousand eighteen the estate actually sold some coin to have enough to pay people the cash value their claim at the petition date when say cash i mean fiat so i'll try to use fiat and so you could buy below the cash you get the bitcoin for free sorry so just just to just to slow this down for a second when you say buy the claims what you're saying is i was a customer let's say of m cox and boom i lost my money it's ins i don't know what's gonna happen with this it's gonna go through a bankruptcy process i'm hoping maybe in a few years i'll be able to get something out of this and guys like you knock on the door and you're say i'm so sorry for your loss you know what i'll offer you something today for the rights to that claim you have as a customer as a creditor in this bankruptcy thing it's gonna take a long time it's little uncertain you know so i'll give you and in that case like for every kind of dollar worth of claim what were you buying the claims for at mount knox yes so the original trade bitcoin was at about three hundred dollars and we were buying the claims for about eighty dollars per bitcoin were you a bitcoin person or were you just a a dis a distressed person i would say yeah i started economics i remember referring about bitcoin when it's was like ten dollars i like wow that's cool if it works but other than that i had no i was like this is pretty crazy alright so dumb question they get hacked yeah so they don't have the bitcoin so what is underneath i get in the in the f t case because he'd invested in all these underlying companies and they still had there some assets what did mount ga have that made you think that the claims would be worth anything so so just if you wanna if you wanna do it in in bitcoin terms so there's was about eight hundred thousand bitcoin that was supposed to be there what within a first like month or two they basically found two hundred bitcoin found two hundred or two hundred thousand two hundred thousand okay so they found two hundred thousand of the eight hundred that's supposed to be there yeah right so now you know you know this is this is you know just distress actually the math even though i studied math the math and distress is always super simple like two hundred over eight hundred okay you got twenty five cents so guys are gonna get back twenty five cents we're basically offering them five cents this is on the bitcoin dollar you bought the assets after you learned and that he magically discovered so your course so you're like minimal downside potentially high upside that was so the steak there was they got two hundred thousand bitcoin sitting there today and it's three hundred dollars a bitcoin i can buy it at twenty five you know for for for twenty five percent of that value so that's your stake and your sizzle was maybe they'll find more baby bitcoin price will go up is that right is that the right way to think about that basically yep maybe they'll find more and and you get a five x return on bitcoin that was the original bridge and i remember the first headphone i pitched it to the guy literally laughed me out of his conference room and whenever i saw him around town he would just be like bitcoin i mean it was like two thousand and fifteen to be fair but look the bitcoin loser i'm imagine like the big short here because i don't know anything about the world so my only reference point is movies i'm imagining your michael brewery you're sitting in your room by yourself you're pouring through the papers and you're like you're like pen and you're like you doing the math you're like two thousand hundred thousand and eight hundred thousand twenty five cents we get a five cents the equations are popping out of your head and then you go to the hedge fund and then they sort of laughing you out of the room and they're like listen do you wanna just get lunch because we're not doing this if you wanna make something out of this hour were you just getting laughed out of the room in that way well i remember the name of the fund i won't mention them they're out of business now that's the he this isn't any he got but there big names yeah they're dance on the graves i the guy won't remember but the the firm was south paul i don't know what happened to the guys at the south paw it was like a two billion dollar hedge fund anyway it doesn't really matter forever ever go and to be fair or fair to guy like i said oh this crypto exchange my claims were fifth of the market value he's like crypto you mean like bitcoin and i said i said yeah yeah bitcoin and he's like you want me to buy bitcoin and i was like well you know the claims get five times your money and he just like he starts slapping his knee he was like tyler that is the funniest shit i heard all week he was like he was like what else are you working on and i was like wait real idea dude and pets were you an employee some and were you on your own small hedge fund okay so had a small hedge fund so i bought about two hundred thousand dollars worth like literally nothing but for my small hedge fund that was like i was like well was like ten of my money i gotta like you know i was only like i i only i hit so i was a really small hedge file i was running i said okay i can't this is like you know i could get in trouble i can't like make this too big so i'll like to call some of these guys i know and when you're when you have a small hedge fund the nice thing you can do is you kinda have a somebody out of relationship like you can do a million out like if you find a ten million dollar deal you can get i don't i'm just making up a name oak tree you call oak i mean they won't to tim million dollar deals but you say hey you want nine of this i want one a million dollars it don't even have to pay me anything thing i just need you because i need the money so you make friends and you kinda figure out ways to get some relationships with some of these cats i'd be similar to probably in industry like the coop competition you know if you wanna dress it up and make it sound fancy but i mean that's how i spent my whole career like coop coop with like all the big distress firms so they call me with tiny stuff that they can't do and i call them one big stuff that i can't do and i asked for either allocation or a fee or something but generally i'm asking for allocation because i'm not like a registered dealer broker what did you end up making on the mount got how much did you end up getting in and what was the what was the and what was the out yeah they were across a number of different sp and we had a later like hit i'm i'm gonna get to the answer i we had a later hedge fund that like was buying all the way up so they probably made like two three times their money because they were literally buying all the way up through the distribution like they'll still buy claims to this day but our original investor made about thirty eight times as money or actually it's more than now it's over forty times as money over what period of time oh yeah like seven years yes and is that because bitcoin price appreciated basically yeah so some of it about five of it is the discount and then the rest is their appreciation right but he put it on in two thousand the big the the the guy i'm describing was our real first outside lp outside of the fund which which liquidate and we sold the claim and i think that claim we bought the original claim we bought from a google actually was pretty funny and i always joke because i was a kid and you know i had my standard documents but i didn't have documents for like in japanese court and he was like so how do we do this time and i was like you know i don't know and he said well why don't i ask so i always joke at google wrote my original purchase documents for for the purchase of you know like i don't know the name of the firm step shoe and something or some some firm that for google because this guy was like a big up at at at at google but yeah about forty forty plus times but a lot of it is appreciation but the really interesting thing about that guy that originally did the deal with us this family office guy is we were buying the bitcoin for free because he we put you put that trade on in two thousand eighteen that was the the big short moment because you were getting it for free i explained that why'd did you get it for free okay because the the rough math at the time in two thousand eighteen bitcoin is like ten grand twelve grand and the trustee sold the fifth of the bitcoin so i sold about forty thousand bitcoin and brought in about six hundred million dollars of cash and so there was six million million dollars of cash and it was about three billion dollars of crypto or two and a five billion dollars of crypto we were buying the claims for below the cash value the clash looked through value on the claims so so we're were buying for about a four hundred million dollars dollar valuation there was six hundred million dollars of cash and there was about two billion dollars crypto so that was the time when i was like really banging the table because before that there was all bitcoin and it was it was cheap but it was quite directional why do they sell it for below the cash value at that point is it because there's still a time delay or an uncertainty like what yes and the there was uncertainty around whether who got the uplift in value so in two thousand eighteen there was a big argument who gets the uplift in value does it go back to mark tell us like the guy that kind of didn't do us right or does the up listen value go to the customer account claim the same thing happened in f the same thing happens all crypto bankruptcies who gets appreciation and value post petition petition meaning the date the company files for ins consultancy as you know i'm i'm i'm an absolute outsider i'm learning about the all of all about this right now but like mount go and particularly f t those were pretty big news headlines and as an outsider when i see this i just think oh i'm sure like there is no opportunity because everything is being taken care of like they're gonna catch the bad guy but then also all the big dogs are already after this like there's no way to make it money there's no opportunity not me someone else is probably like on top of this but the way that you're describing yourself maybe this is like you're under selling yourself but you'll you're kinda describing yourself as like just a smart guy who just like kinda gets in the mix and figures it out take out the smart part was you're doing it good there that you just you just did it good but you like how many like literally how many human beings like how many human beings are actually getting after this like for the mount go and and like who do you who do you phone yeah a lot of questions in there okay so you're right in some sense all the big firms have a corner on the like the bond if you wanna try to play the bonds and stuff like that you can't open up a fidelity account and trade distressed bonds you call them and you say oh can i get a quote in this bond and they're like well that's in default you're like i know it's in default i'm asking what the quotas and they're like we don't trade in defaulted bonds they're way too risky for you to be looking at so they're you'd have to have like real prime brokers and you know you have to have serious money to play that game also you have to worry about getting run over by big distressed firms sort of actually just like in in the big short were the two guys who had the garage hedge fund which one it was big i mean big for a regular guy it was twenty million dollars of there their on money they're were playing with they were like laughed out of chase or something like that yeah yeah the same thing with the derivatives market markets i mean you have to have serious setups ups and serious like comb lines is to have lines with your with your pbs to be able to do this stuff and so i knew the the other side of the market or the kind of the that's why said in the lowest rung of the tote pole which is the claims market so there are probably like ten firms out there that really do trade claims and you know i say this lovingly because i'm one most people in space are not super smart it's kinda like the the the the i don't know in nineteen maybe it's where like the oh gosh i'm gonna offend somebody like the network administrator i don't know like the kinda like the lowest level of it person this is like the lowest level of the trust person yeah like the rejects a little bit yeah and so but i kinda like hanging out with the rejects what can i say right anyway so so you're you're kinda like a like what's such you know there's trevor shark and they have a thing that like lives on the shark the food like a antibiotic yeah you like that little thing that eats the stuff that falls off the shark and the shark kinda likes you because you keep the barn off it or something and that's you as a tray claim buyer if you prefer some of these largest firms the the the cases where largely talking them out when you have cryptocurrency changes going under and things like that your talking about customer account claims and customer account what's nice about that like both in f t and then if you go back to mount cox the docket was largely customer account claims and so it's all trade claims there's not a lot of structured debt and so certain setups are just not appropriate for a small person or home gamer to be trying but you know you can literally buy claims there's no nothing that stops you but do you go do you do you put out a press release and you say hey all one hundred thousand f t x or mount ga claim holders or okay please email me and let's talk right yeah if you've been wrong by this curly haired man call me here so okay so yeah so so in okay mount ox is a good example fortress was my competitor on that docket and they were buying up claims too pete rig is a big big bitcoin and he's one of the founders of fortress and they were buying up claims and they work on my competitor on that case they were the only two people really buying claims we almost worked together but but we're still friends and everything and here were still friends and they actually did do like press releases and tried to get people that way for myself this is gonna sound ridiculous but the entire fourteen thousand cr you know fourteen thousand creditors or customers was a legal list so of things about the yeah so you were able to use the leak list to actually find people my favorite is when you find somebody and his name's like some random name like spin eric and i don't know makeup some and he's in tech and he on linkedin he's like you know he he's he's part of the bitcoin group and then you ping them and you're like hey do you have a amount gosh claim if you do like we could buy it from you and he's like how did you find me and you're like well let me you're under thirty five you're into tech and you're part of the bitcoin group i just and they're there are only three with people with do the same name so that's you're hustling doing like this is work yeah yeah you're hustling there's a lot of work the work here is you find the person you contact them you get them interested you five their ownership and that they haven't already sold the claim to somebody else there's it's like a whole bunch of work that you do so that guys like me could just invest in in just buy the claim and we feel like alright you've done the diligence on this you've done the cleanup work on this that that's what we would have to trust you and that's why you get paid carry or fee that's lot people from investors yeah and you know what's interesting is so it is a lot of grunt work that's why i think sometimes it gets like the more like you know guys holding football who you know played played hockey or something in college you know there's not it's not like the the brain side of distress but actually there's a lot of intricate like call them corner cases like claim corner cases where you really do need to know a lot about the legal side i mean with chat it helps a lot but still it helps have a ownership experience and you know prompting chad is just as important as anything so the more you know the more powerful is but it seems like a good life for you you're you're hanging out in italy it seems like you work project to project and what's the upside here for you like can you make tens of millions of dollars in one year yes i mean i don't know not i mean seven figures definitely eight figures is pretty hard what happens is you get people to push back on your fees they say like oh you're not in new york you're not a real firm like just a few guys like you're just a broker and but you know you build a reputation over time and then people will pay you more and more and you can definitely make seven eight figures especially in a good year especially if you have something work out and you promote on it so let's let's walk through that game i talked about first last best worst weirdest or whatever so what was the first life you know maybe you were a kid maybe you're in middle school or something like you know sally you didn't want her bike anymore and you you're like oh your trash is my treasure you know so what what was your first tate four am to buying distressed assets okay so my parents really more bankruptcy lawyers or lawyers my mom specifically with consumer bankruptcy lawyers so i used to hang out like at the courthouse as a kid and like hang out with me in the clerk office and with like us trustees and stuff so i kinda grew up like really did you like it or she just like didn't have day you had to go yeah basically didn't have day a single mom basically like no day tom's got the clip on tie and he's in court with me so a lot lot of clothes on pies yeah my this is my associate yeah so and this is like paper files everywhere so no so i grew up kinda hanging around it it we'd always hear about stuff from i remember when i was a kid first about like hud house and like what's a hud house what's that like oh you can buy these houses and you know they're really beaten up but you can get really good deals to remember my brother and i flipped the hud house my mom put up the capital i have no idea what the numbers were we probably bought it for twenty or thirty grand that you know my mom put up but we probably sold it for sixty we did the demo demolition ourselves which was a you know i have to say god my parents i'm glad i wasn't injured severely you know doing demolition when you're fourteen and it's probably a bad idea listen up the old playbook is slowing you down ai broke the funnel loop marketing fixes it it's a new era for marketers ai is capturing search traffic channels are fragmented and generating leads feels less predictable than ever before hubspot loop marketing playbook will guide you through this unprecedented disruption it's the system your marketing teams should use to move faster connect deeper and grow smarter the modern growth playbook for the ai era built by hubspot designed for today's marketer get the loop marketing playbook at hubspot dot com slash loop dash marketing to find out more and leave your competition behind alright back to the pod what was the story of the baseball card shop ben told me there was a baseball child story so these are the kind of things i was talking about when i was a kid these were these these deals would come up you know there was a whole thing where they the baseball card industry went through this this they were they were printing cards they said they weren't printing i don't know if you're moving this sean and and there was a bit of fallout and like the collection market for baseball cards and i'm sure if you them went under probably like the micro thing whereas people were made micro breweries and then i've seen a bunch of micro brewery bankruptcies and i remember seeing it was a fucking the entire shop was three thousand dollars which is a lot of money when i was a kid and my mom was like you want me to put up the money and need buy the whole thing i was like we can do that i was like wow so i would hear about these things as a kid and i guess it probably colored my my imagination for what was possible and then i kind of like between that and you know i was really obsessed so i started i guess i bought my first stock when i was eleven or twelve i can't remember but i sort of obsessed with warren buffett as a kid but and then and then what happened guys is over time is i sort of mel the two things together it's like what would buffet do if he had the specific knowledge you know the all term like specific knowledge of bankruptcy plus what he knows as well which is like you know valuation and sort of like deep value investing or value investing so i kinda melted those two things together yeah it's almost i actually think there's three there's you have knowledge of the law and not a not a not as fearful it's like i speak the native tongue of bankruptcy court so it's like okay i feel i can get more certainty than the people who hold the claims right i i have a better idea of where how this will play out and how long it'll play out take to play out and where the puck will land so it's like knowledge of the legal code deep knowledge about deep knowledge and interest in deep value investing which i like admire buffett and and and and howard marks in a bunch of these guys and and really learning from their playbook and then the third is just the entrepreneurial hustle to go cold call knock on doors raise the capital get the claims do the verification go travel to you know wherever and and and make it happen right so you kinda needed that venn diagram to be able to do what you do what i'm hearing and and i think for me like i got kind of obsessed with the adventure of investing like for me you know like my very first like real distressed investment was this thing called ethnic x energy where people had all these restricted physical shares and so like i literally drove around like the northeast and bought shares off of people and like would go into the local bank and get things medallion singing signature guaranteed and i was like just like buffett and snowball or he's like going around and buy and shares of the hunting lane he's he's like knocking on the door of geico like can you give me a tour of the office and like like lake figured it out yeah if somebody hasn't read snowball could you tell us a a sort of a buffet hustle story or buffett dev value distressed story gosh i mean i must have read it at least ten years ago so yeah i mean he was famous for there was some security i can't think it was a a hunting club that he joined just so he could buy stock in this i mean maybe you guys are heard the story but there was like a hunting club that also had oil on its land and so it's probably a powerful story where he like you know gets all the hunting gear and like joins the hunting club you know buffet doesn't give shit about hunting hello fellow hunters hello there it he's got his rifle on his you know i like you don't suppose you wanna sell your some of your shares do you so i can't remember exactly what the story was but it was something are on those lines and i think it i was like you know you could you know now you know one of the things i took away from buffett is you're always using your unique competitive advantages just like in any business right and and and every all the lessons from business kind of apply to and just pure investing and you know using those in new competitive advantage at the time there's all this informational arbitrage that's probably less and less now there's still sc butt meaning like making phone calls and channel checking and like getting out the field and hustling and hustling goes a really long way but you know now you have other advantages like you can invest in japanese ins solve buff invest in japanese and solve because you didn't have google translate so you know you just have to keep pushing the boat out to me that's the lesson of a joel green black or a warren buffett and joel green black was like a famous special investor which is you know you played a field and you use everything we just talked to howard marx and both sean and i have read a bunch of buffett stuff you're doing something i have i you i don't wanna i don't know how great a investor you are other than like this one topic is is really fascinating to us and you see wonderful but you're doing something that they do which is you use really great language so you've used a few phrases you've used a few really good phrases that helps me understand things a little bit more effectively so you're like i just you just gotta keep pushing the boat out or you're talking about like sc butt like you you've used these words that i've done a really good job of explaining what you do which in my head means you have done a very good job of creating a framework on how to think about this type of stuff for me i think it's all that valuation just how you manufacture the valuation is like the sauce and like how you you know you're making your sauce like you guys are doing venture deals like so much of it is probably access and connections and reputation and being able to get allocation but also being able to vet founders or vet vc firms and like you know and also knowing what the docs look like like all that kinda like or not a vin diagram but that that whole like soup that makes it work that's that we have the same thing and and what we're doing i mean howard marx is an absolute legend and you know he has a very famous i mean i'm sure he talked about bruce car who was did you know a lot of the investing and howard marx is like the great communicator i mean the guy i mean that's one of the things i think people don't appreciate is you can still work on investments make really good returns but those guys are like monster communicators like they are great of fundraising raising and and and they're great at what they do so it's just it's it's they have like multiple skill sets or you know or they have partners to back them up you you sent us us a list of your like core philosophies and you told us the first one the stake in sizzle philosophy that you live by tell us about some of these other ones so one is shop madison not canal what does that mean okay i stole that one i like it because what what deep value and distress the mistakes they make is they sometimes buy like value traps like give buy real crap the idea is you wanna buy real stuff that is cheap that that could be good so like the the the phrases is you know you don't buy you know handbags on canal street because those are all fake you buy you try to get a goods price on the mass an avenue when they're discounted not you know because you fool goal is a is a real problem in the trust you guys say oh this guy put two hundred million dollars and it was only ten it's like yeah but it's worth zero so you you gotta be careful of of this kind of bias that runs into like oh it's such a good deal you're like is it so i mean right you know assets become liabilities and liabilities can become assets when you get in a restructuring situation alright let's do the next one you said start young the first decade is tuition i love this this could apply to any field by the way i think that's a great phrase just in general well you guys come on y'all y'all know a lot of this stuff but for me i i started when i was twelve i was terrible i think the first the first i can tell you the first stocks i bought i bought home depot because bob nor delhi who was passed over for whoever i think maybe jack walsh from maybe and met whoever became the ceo of ge came over tom depot and he was gonna ge home depot well that didn't work at all and you know so wasn't investing in all in evaluation i was based on a story in h b there was this huge article in in a harvard business review and i was like twelve years old like reading this being like oh yeah eat ethos i don't even know what's for means he's gonna change the ethos culture was like the first stock yeah i was like i was like ethos what's i never heard this words sounds smart just performed though that was like the first stock but the other one i bought was inc which was a large nickel producer in canada that actually did work out it was based on like the rising price of nickel i read about in foreign affairs and the third one was from a forbes article it was emc which is chip manufacturer which i can't remember what happened to that one i think i the thing is like you didn't think about stocks especially when you're young and you never done anything you buy them and you're like okay i bought them alright then day two you're like now what do we do my kids are i have a one year old a four year old and a five year old and for my four and five year old i just like they were trying to earn something they wanted like ice cream or a treat or a toy or whatever like if we do this can we have that and i was like here's what i'm gonna give you i'm gonna give you a hundred dollars they're like a hundred dollars i was like i'm gonna give you a dollars each but because i was teaching about like we were at the we were like waiting the parking in lot and i explaining what a grocery story i was like yes so somebody owns this business and then they buy the stuff and then they said sell it to us i was trying to explain what a business and i was like failing miserably was like my god why is this so hard to explain what a business is but i basically told them i gave a hundred dollars each and i this weekend i'm going to present to them five stocks of products that they use and buy like we bought a nintendo switch it's like here's nintendo stock here's and i'm gonna let them pick and let them invest it in an account where they're gonna start to see whether it's going up or down and i'm gonna have them explain and their whatever their logic is of why they picked you know either nintendo or whatever you know yamaha or whatever what whatever whatever stock that they pick and then they're gonna get to like ride the ups and downs of this so i'm i'm with you on start young even younger than than than you you would guess well you yeah i just think that you know i don't know you know my own experience like you know you'll meet guys this is a common thing on i'll meet guys i don't know when i'm here on holiday or wherever and they'll have an exit like i'm a guy who's was like a very early employee at airbnb and he had probably eighty million dollars or a hundred million dollars but he's never actually invested money so now he's forty five probably fifty and now he's like you know i'm so good at this like i'm gonna buy some duo lingo and i'm gonna you know do this and do that and i'm like well you just need to respect the fact that you actually never invested money i mean you you are amazing operator and you got a rocket ship that's all we say that all the time on here which is there's huge difference between investing and earning like via a company not just a difference it's almost like the opposite yeah it's like a power lift that then goes and tries to you know do ballet or something it's like oh yeah operator it's all about action you know it's all action action actually you gotta do stuff right you're trying to do as many things as you can be super productive is it investor it's like sit on your hands in action is your friend all the money made and the holding the waiting of the observing and as an entrepreneur who was rewarded for taking action you get punished as an investor for taking too much action yeah and i'm you know just it just it takes a ton of experience to be good and well even to be okay a question that sean has asked people before that i love which is like basically how do you invest your own money and and i wanna ask you the same do you since you are a professional investor do you have one hundred percent of your portfolio in a variety of deals like this or are you doing any passive stuff or is it all active this all pretty active yeah i don't i don't you know like you for me it's like tax advisers great people that like you know state planning advice is great guys don't wanna manage my money no thank you partially because i enjoy it but also i don't think that i've reached the capacity be where i have more money than i know what to do with you know i think that i can still find a a lot of deals i mean you know your opportunity set when you have you know a million or ten million or whatever is just a lot better than if you're you know if you're at a hundred or for it your you know the optimal the optimal the optimal strategy changes based upon your capital base so when you say active do you mean it's all distressed it's like your specialty that's where you're putting most of your your network worth the majority most of my money in our own deals right when you you were saying like you know early on with your hedge fund you were putting five percent into that deal you you weren't allowed to because you have as investors to get you know as crazy as maybe to match your own conviction in the deal now that that's not the case anymore like how concentrated have you gotten like do you have have you gotten to any have you ever been at a point where you're just like in insanely concentrated i kinda like it when it hurts a little bit because it's so con i'm so concentrated but maybe that's me i don't know yeah i mean that is i think it's a little bit like an entrepreneurial bent like you kind of if you're not pushing yourself then then then i i wouldn't feel comfortable with i mean i understand you have a big exit yeah for me i'm constantly investing into other deals friends deals i have pretty i feel like i'm pretty good deal flow in the distressed area and then the claims work i wouldn't say it's free money but you can almost reliably compound your money on a small base you know like a few million bucks or something you can reliably compound that at a pretty aggressive rates what do you mean by pretty progressive rates what is that is that fifteen percent is that twenty five percent that thirty percent what are you say talking about just i don't know probably thirty to fifty depending on the year you can you can probably easily get higher than that there's these guys sean like in i used to live in texas and their guys you're like i didn't know what their job was i'm like i don't know what you do but you're really wealthy and i just started calling them capital men they're just capital guys where they just like do like call them capital men it's a good phrase i think you're you're a capital guy the navy i don't know i guess i'm for me i've i've i i feel like i've spent my entire life studying like the history of sort of like modern investing like guys that bought banks out a bankruptcy before you you know before you know when you could do that you know guys that have mint in enormous fortunes with you know like there's there's a guy that bought a tobacco company around the time they were doing the settlements with the tobacco companies who made a fortnight so i've studied a lot of these things and i've always wanted to be to do just one deal like that so i guess i've always aspire to do that but i mean if you there's that phrase you know what is it a position well bought is already half sold and i do think when you're doing sort of very special sit sort of dev value dis distressed stuff if you're selective the problem though the fund and the biggest institutional money management firms is they always have to constantly be finding deals the nice thing about being a little bit of a home gamer is you can kinda select you can be very selective you can literally do nothing in a six month period or a year if you just can't find anything and you know there's still be claim work and bring an income but you don't necessarily have to swing i mean we've seen deal over my lifetime i've seen deals where guys have you know turned you know twenty twenty million into three billion and you know six million into eighty million in one year i mean you've see some incredible deals in the space and you know you're getting high optional low risk because the price you're paying but it's a ton of work and a lot of brain damage for sure and a lot of hustle and it's not necessarily the claims alright let's take a quick break because gotta tell you a story let me tell you about the first time i try to run payroll for my team i was using a traditional bank and you know the type it's got a jan interface it's built like a two thousand and two tax form and it was open only during business hours and i hit send froze they flagged the transaction they locked my account they put me on hold for forty five minutes and then they told me i gotta visit my local branch and that was the day i started looking for a new banking solution after asking a few founders what they were using i found out about mercury and so now my payroll is two clicks i can wire money i could pay invoices i can reimburse the team all from one clean dashboard that's why use it for all of my companies and so do two hundred thousand other startup founders and so if you're looking to level up your banking head to mercury dot com and apply in minutes mercury is a financial technology company not a bank bank the services are provided choice financial group call them man a and evolve bank trust members fdic we've kinda hiked up you know what you do glam it a little bit in this episode we've glam you and what you do give us a little bit of the ugly so first on the asset class in general so for example start up investing i could tell you it's amazing you meet these entrepreneurs they're telling you about the future these are the smartest of the smart young ambitious creative people and when it works did you create the next facebook next airbnb create you can create you can get ten thousand x and then you go and start doing and you're like oh and also you know you're gonna be wrong most of the time you think you're gonna learn so much from these people like you hand them the check and then you kind of don't hear from them that much after that you're not actually gonna learn that much nor do you have any control or say and and at all what's going on in your investment and by the way even when it works it's gonna take ten years for to get liquid you might be rich otherwise you know this is not the way you're gonna get rich is the way it's a hobby for people who are already rich and that's like if i was gonna say what's the real talk of angel investing that's how i would describe it what would you say is like the ugly side or the bad side of what you do what's the downsides of this asset class well this just stressed in general as a small player you can get totally hose so don't like ever now and then they're i'll hear someone even smart friends will say oh well you know k is gonna make sure everyone's taking care of because they don't want the bad press someone i'm like what are you talking about it's not like ob they're are gonna walk all over you and bankruptcy court so i never understand this logic and and it's all like from many years of being like oh they're gonna play nice and no they're not gonna play nice and don't ever assume that and sometimes you do get a gift they'll do you know things that'll that'll be a a little more gift like to wherever you are if you're in a preferred or if you're an equity god forbid equity but if you're even claiming things like that so that's one of the ugly sides i think also one of the ugly sides is you know it's very transactional and financial so doesn't exactly you don't get people who are like giving you the starry eyes of the future a lot of times you're you're sitting across people arguing over a pie that ain't grow and in fact maybe the pie is bad apple pie that's already gone off so it's like they really are going over over you know something that could be either dying or shrinking so i think it has an emotional toll on you're being in distressed investing also you are actually hearing people's life stories like you know i i i i will not mention names but you know companies will go bankrupt and this will be someone's entire life's work and they're they're picasso and they're spending two hours telling you about their picasso and you just can't you just gotta let him you're almost like a guidance counselor walking them through you know maybe doing a dealer transaction and try and to be as respectful as possible to the fact that this person might have just lost their life's work or their families fourth generation business etcetera etcetera so you you have people in they emotionally are in distress so it is it tax on you but also you need to be as respectful as possible and right i don't think let's think what else i i think as a small player it's very hard i think for me i i would say that investing isn't i would i wouldn't say i'm good i'd say i'm okay investor i'd also say that it's a bit of a disease so i kinda like feel compelled to do it even though sometimes maybe it's not the best thing for me so i always joke that it it you know it's it's kind of a disease like i'm looking at this stuff on nights and weekends on sunday morning you know i'm you know just like you might be look do have having another call to start up that you think is interesting or trying to get on an allocation for something like i'm doing the same thing with my deals like i'm trying to learn a little bit more and see if i can find something so yeah i know if i answered your question no you you did the second part of the question is we've been glam you a little bit but you called me you know before the pod and are you called ben and you were like hey like just in know you know like to google me you're gonna see some stuff i wanna be able to you know what do you guys wanna ask me any questions do you want me to talk about that on air like do you want me to clear the air about this so like hey here's an opportunity because if if somebody google's you yeah there's like a settlement case i don't know what's going on with this like what do wanna say about this yeah so and and i that's why i said i said ben i got i you haven't said anything about this and i'm wondering why you haven't and i just wanna put it out there which yeah i was involved in this receivers ship in delaware and i guys are pretty nasty headlines and i have to say you know as i've gone through my life i've had a lot of ups and downs like any need anybody or any entrepreneur for sure and this was a down one and i'm i i'm glad to have it behind me but basically it was a receivers ship that i was in charge of i you know we hope when we made a lot of money for the shareholders so the the court didn't like some of the way i went about you know my activities and sort of aggressively slap me on the wrist or maybe in the face and i'm glad that everyone in the is called fun dot com is getting a good recovery and i'm glad to have it behind me but yeah it's like once something i wanted to pull bring up because i didn't wanna act like it was that we didn't happen okay but what you do you're like and not not my best do so the biggest thing is so i was running this receivers ship and of course because of that i was in charge of doing everything whether it's like administrative work or like running the bank accounts and doing the taxes and you know while i dumb question what what is doing the receivers recipient mean you're taking it through bankruptcy is that what that is so you're it's kinda like a bankruptcy but it's a state in state court so this was in delaware transfer court because a company was a delaware court and so my job was to sort of marshal all the assets there were no assets when i showed up so this is a basically a pump and dump penny stock i bought up twenty percent of the company and then i went to delaware because the guy who was running it actually got arrested for a different fraud that he was doing this guy named jason gal goliath and so because of that i was like oh because i knew all along with this company likely own the domain name fund dot com plus they own this ownership of a an etf company called adviser shares so i wouldn't got myself a appointed of receiver there was no assets in the company and my my goal or my what i was my remit from the court was as a receiver almost like a bankruptcy trustee was to marshal all the assets and then try to pay out as much to to shareholders was as possible i think i did did that the court and we and i did do it but we had a i had a shareholder who was very unhappy with the way i was going about it he complained to the court the court looked into my activities they didn't take kindly to some you know some of the things i did whether it's the tax position or where how when how how i was moving money around and the fact that i was investing the money in deals that i was doing and so you know they pretty aggressively slap me and that's where the headlines come from i of course of the whole time feel like i did my best to cooperate with the whole thing and well i'm glad to see that we have a good settlement with the with the new receiver of the receivers ship and again the outcome for the all the shareholders who were involved is pretty darn good which i'm glad about because at the end of the day i didn't want it all just go to lawyers fighting over this and you know that's that's kinda what happened so not my brightest moment i would say because i feel responsible as a person in charge to do everything and do it properly and i don't think i'll be being university anything anytime soon don't think i'll be doing that again okay well you know to make it awkward i just had to ask trying to understand what no i'm glad to hear i just and i've you know my thing is for me reputation computationally as someone who does what i do it's important that that i try my best but i think in the end over time i'll be able to talk about it more and more sam you you look highly amused by this that i this question and answer what are you thinking the headlights aren't good yeah i saw the headlines i understand why you'd wanted addressed it's not it's it's not a good headline yeah i'm reading it as you you spoke so did you admit gil is that what is that no what's what's implied with the settlement so the settlement is just well the fault the the settlement in addition to the fine from the court does the court fined me two million dollars so i paid two million of what they considered were constructive trust profits in plus i played for the special master that was another seven fifty or eight hundred so it's basically three million then the settlement was three point six million plus eight hundred thousand that was in escrow plus about ten million dollars in claims so i gave them claims and they say were comm ming within my personal investments do you did do was of liability yeah so i don't know how to even ask this question i can't ask this there's no of liability you can ask because you should and my only thing is i don't i've never i'm glad that is a good outcome for shareholders and i wouldn't want anyone be inflamed by the stuff i say like and you shareholder to be like oh he's not like admitting you know in my estimation it's a lot more gray than the court tries to make it out to me but at the same time like i respect the court you know like i was raised by lawyers if a court says that you know i don't care what you arguing going i just agree with you we've we've had a bunch of people who who've come on this podcast before that i think have had stuff i mean i think it's fairly common in the world of business you do business for thirty forty years that at some point something can you know it's it's extremely common for something to to go down where you get sued or you sue somebody or whatever happens that person on uncommon what is interesting like sam i don't know if you remember when we had martin sc on and he sort of got this character which is like he's the bad guy and he like leaned into it and like inflamed it and like did a bunch of stuff which was like really crazy and you i remember were it he got trouble and then he had the issue where you got trouble and he was like hey i already made money and then they're like yeah but like you went to jail so like you know something happened he made any and remember you were telling him were like and this was this is now like years later he had like literally like done his time and again he's quite a character like sc is like an actual he's an actual character he i think he plays a bit i think he plays up that character and i think he likes it he likes mixing it up in that way i remember just thinking like it's so interesting how to handle something like this it's such a such a tricky spot to be in because there's many versions of things like this like there's i did something wrong not knowing or in unintentionally i did something wrong intentionally then there's like the sc case which is kinda like i did something wrong intentionally but everybody like made money and so who's you know so so it all worked out right and even for example like elon right now i think he's getting sued and like you know you know fifteen different courts by fifty different people like publicly feud with the president and sam alt and others right he's like there's a lot of people just like constantly mixing it up and i i don't know it's just it's very interesting to see how that side of that side of entrepreneurship that side of business that side of investing i definitely think get it has to have you know and maybe not as aggressive as mine was but i definitely think people think over time you're gonna have scrape with with certain stuff and the whole bad guy thing and i know scar did kinda lean into that i guess even now i feel like it well i don't know if it does now but kinda i don't know it's a it's a different way to do it i for me i kind of like don't view it as a good thing for me i kind of view it as like something that if someone's gonna be a business partner me i need to be able to plane and and you know frankly probably more candid than on air but at the same time like try to respect the the outcome of of the whole thing how long did this last gosh twenty twenty two oh wow three years something to now that has to feel horrible i've gotten in trouble before when i was in college and just like waiting to hear the verdict i remember like that feeling and my was not i think your your your consequences are significantly worse in my consequences and can't imagine three years of what's gonna happen joe for me i tried to resign my fact it's resign myself to whatever happened like i have to accept responsibility for that that was a big one for me so like really was you know bracing for the worst but trying to do the best also like even even with the settlement but like way before the settlement with different things that went on the case i was really trying my best to be constructive and cooperative with what the court wanted me to do but at the same time like you know not everybody's gonna love your decision making i guess it's like you know in a weird way it's like you know it's it's you know i grew up in the south where people are way too like i don't know maybe maybe some you know maybe my upbringing was a bit too like people please but this was like you have to do the right thing whether someone likes it or not and you have to do with the what you think is the right thing so that's what i really a lot of it what i got out of this and i try my best and people might not like what you've done but or you know what you've made a decision like oh you're doing this you're trying to hide this or you're trying to do this and you're not cooperating here but you're still trying to you're still trying to to to find some middle ground so but it was a big one a big big one over me i wanted to ask you we end with this i wanted ask you for a bit of a reading list like if i was gonna try to get you know smarter about the stuff or what are like i don't know the the most influential book or blogs or people that are are worth checking out like give me your kinda top three in no particular order but what's your shortlist on stuff i would get read just if i wanted to get smarter about the stuff so i think on the list because i shared like a a book list of course you have people like seth cl and margin safety it's a hard book to find but if you google around you might go to find a copy that you can isn't it like a two thousand dollar book now he like a thousand plus it it's it's good he talks about different stuff i just think that he's kind of a goat in the in a kind of deep value you bow post and stuff cl are pretty influential but you know a easy guy to find you know anything by marty not marty lip but now i'm trying to think it his named from third avenue value he's written a few books on distressed investing and he was the one that kinda stole the idea from him where it's like an asset is liability and a liability can become an asset in a bankruptcy and it's so true and you think about it with a lease a you have fifty leases and they're all below market well the debtor a debtor can assign assume reject leases so if you're all below market rents you can just you can just you can assign them and they come become an asset even though leading up to the bankruptcy you know they can be a huge liability to make those payments you like kirk cor sean have you ever read about kirk cor you've told me about them but i haven't read anything about him oh my gosh that is one of the best biographies of all time kirk corey like that one that's a all my god yes the gambler that's one of the best buyer basically he's a our arm mini i think i think our median immigrant yes ray raised in central valley california went to the army when he got back his first little business was a small airline which basically just means he somehow convinced someone to lease him a small su and would fly people back and forth from like i don't even know all around california i like it it sounds more glamorous than it was but he grew that over something like fifteen years and have sold the business to t which was the large airline company at the time and he made a little bit of money but he part that into buying the what would now become the las vegas strip and then he partly that to bind this other thing this other thing this other thing and he works his way all the way up from being a nobody pour no running water immigrant to owning what was the car chrysler i think he also owned like warner did he own warner but he for sure owned chrysler mgm i believe sorry mgm and the biography is basically his thinking he's very calm he's very methodical he's very like kinda traditional immigrant like where he was like straightforward it is what it is i don't stress about it but he was a total kinda degenerate gambler and he died with a net worth of something like fifteen or ten billion dollars thought about right yeah you know what i actually love because you asking about john it's like i actually think the entrepreneur like biographies either auto or biographies can be amazing there's one called z which is by a guy who's like a big real estate guy in york who like made a billion lost billion there's like one it's like how to lose a hundred million dollars and another valuable advice by arts little like there's all these kinda like entrepreneurs books they're like some are out of print some are still out there and of course there's like you know special investing joel green you can be a start market genius these are these are great books for in terms securities markets but i actually think the best investors with people you've like never heard of because you know they make a hundred million bucks and then they're like i'm out piece like you know you you you might and in it their their stories aren't recorded i i think i put ep p taylor in there so you wanna hear the taylor story real quick that a really great one so e taylor during a prohibition he would go up and buy up breweries and his whole thesis was like one day this is gonna be done back like we're not gonna we're all gonna start drinking again so so you would go around and buy up like you know manufacturing distribution bottling that was a play on that and he would roll them up because the capacity was so low he could buy him for peanuts and that was it that was one trade like you know of course it took him twenty years to work to trade out but you know he may he mint himself you know with some serious dough and in then you wrote a book about it so i think these these guys you know you can do the biography of edward p taylor said him yeah that's him edward p and he found the life or key club i don't if guys ever been down there but it's like a famous club and the bahamas like p palazzo and well while sand bank freed was across the thing at a place called albany down and down in bahamas but do you ever you ever bump into sand bank with freed any any goods sbs stories you know what funny is like so i was in crypto and then sam became like this like rockefeller of crypto like john rock crypto i was like who the hell is this guy like i never even really i never really ran across him in passing and a lot of people that work for him were like you know whatever ea or e effective alt yeah ea people so you had a lot of ea people around i just didn't know any of those folks they weren't like hardcore crypto people yeah this kind of a weird thing when i saw him coming up i was like man how did i miss this where this got come from we had robert greene from forty eight laws of power on the pod like two weeks ago or something like that and yeah he kinda we we we have you ever read forty eight laws of power it's like the book is what it sounds like i own the book i got breeze through of i read all that forty he's great on acquiring power whatever it's very soc path but that's like kind of the point which is like it's the yeah soc but it's real and one of the laws is like to reinvent yourself and and also so em me had talked to him like we're like when you have social media you can like talk to your people or talk your audience like while you're on the toilet like any any hour you can tweet anything how do you deal with that and he was like basically like you wanna have you wanna have planned silence so you like you know the best way to be loud and in everyone's face sometimes is to just shut up and and and and not say a word disappear for a while and disappear for a while and he was talking all about like powerful people who kinda come out of nowhere john rockefeller is one of these guys who he was one of the richest men of the world before everyone like no one had seen a photo of them and it was all part of a plan i think and it sounds like sam beck freed we didn't give him in a credit because when at least when i saw him coming up i was like oh he's just an artist and he's just this typical silicon valley type of like he just doesn't know he doesn't have any manners this is all but it turns out it was probably all planned where he was like i want to appears though i slept on this bean bag i want to here though i'm playing video games while i'm talking to sequoia over a two hundred million dollar deal and it it was straight out of robert greens forty eight laws of power which is pretty funny i mean i met a ton of people that work there of course and a ton of people that were like in the orbit and it's kinda crazy to see the different i guess like mu does it best right the la is effect of like the whole thing like everybody's getting drunk off the money with they straight the dollar yeah like almost all the people all these employees they didn't know anything that because on work they're just normal circle nerds they're just normal workers just normal they weren't part i they no i mean like i met the lady she was ahead of payments and she was like an expert to getting like payment licenses so basically like banking licenses around the world and she had worked for somewhere and then she got then c z pulled her over to to to bin and then she she got poached by sam she was just the best of course he had to pay her like she was the best who's was making millions of dollars a year but like some of their contracts were in the scene i mean sam was giving out ten year contracts to people guaranteed ten year pay contracts you know like million dollar contracts to like salary employees a little bit like the ai you know like ai you know meta thing i mean it's a little bit like that because he had so much money coming in from vcs and of course he had an unlimited you know while not unlimited but he had a big customer base though to to dip into so between that i mean he was making unbelievable like whatever you wanna call it un un uncomfortable contracts to dude just to put this in perspective i think z i think the news about this stuff kinda came out you know let's just call it even three or four months ago okay so let's just say that's been going on for three four months the the a researcher stuff if you go look so four months ago the stock was at about five hundred let's even let's go april first so five hundred and eighty six today the stock at seven eighty four so he's spending this money or he's making these offers which has a you know a multiple effects right first it raises the price for all of his competitors so he's like cool even if they don't take my offer now they have to pay one hundred x what they were paying for talent before like way to screw up their business in his own business this the stock since then it's now at seven eighty four so it's up thirty three percent so what's thirty three percent of it's oh it's almost two trillion dollars stock six hundred billion dollars or six hundred billion dollars hundred basically offered the equivalent of twenty billion dollars for these for for this talent right maybe maybe forty billion max and so he's basically said cool i'll put out offers and try to spend twenty thirty forty billion dollars already made back six hundred billion in the market just in that time with by strengthening my story of us being all in on ai right like it it's not like the facebook business changed that much in four months where it's up six hundred billion dollars because of the actual you know like user base growing or or even even revenue or earnings yeah they beat they beat by like you know a small small like maybe eight percent beat or something like that but the reason it's up is because believes ai is the future and who do you think it's gonna win an ai and you can punished if people think you're not gonna win apple stock is like going down right now because people are like apple has no ai strategy they're gonna lose and then somebody like you know meta at least the story is z is all in gonna win poaching great talent we'll see you know and so there's leave ability to it so that it's crazy that you can spend so much and somehow net out way ahead like he did it's crazy that's crazy that is for the market hey tommy appreciate you doing this brother oh guys thanks for thanks for having me on it so good to meet you guys in chat alright that's it and we appreciate you that's the pod i feel like i could rude of world i know i could be what i want to from at all in it like a days off on a road less travel never looking back alright let's take a quick break because as you know we are on the hubspot podcast network but we're not the only ones there's other podcast podcasts on this network too and maybe you liked them maybe you should check them out one of them that wanna draw your attention to is called nudge by phil ag and whether you're a marketer or a salesperson and you're looking for the small changes you could make the new habits you could do the the small decisions you could make that will make a big difference that's what that podcast is all about check it out it's called nudge and you can get it wherever you get your