# Bitcoin Is The Only Asset That Survives What’s Coming

https://www.youtube.com/watch?v=hBEQhSxQYtI

[00:00] I think it's impossible to say Bitcoin should do X, Y, or Z.
[00:02] Right?
[00:05] I mean, the reason I got interested in it in 2017 is it's its own thing and it's going to evolve as adoption changes.
[00:13] Now, what what has changed in the adoption story in the last 2 years?
[00:16] Nothing.
[00:18] Right?
[00:18] Central banks haven't come on board, corporations haven't come on board.
[00:22] It's It's basically been some financial investors through the ETFs, but not many institutions.
[00:26] Slowly asset allocators have started to include it, but not not dramatic.
[00:31] So, why would you expect some big change in the price of Bitcoin when nothing has happened?
[00:35] I mean, the way I look at it is still the old-fashioned way.
[00:37] Very simplistic.
[00:39] I'm an over I like to oversimplify.
[00:41] What's going on, guys?
[00:42] Today we've got a conversation with Jan Van Eck.
[00:44] Jan is the CEO of Van Eck.
[00:47] They're a $200 billion asset manager and one of the leading ETF companies.
[00:50] In this conversation, we talk about Bitcoin, gold, the rise of ETFs, why Jan has so much conviction in the country of India, how he thinks about making long-term strategic bets, and then we get into
[01:00] what is in his personal portfolio, where his convictions are, how he's navigating the macro environment, and what he thinks you should know as an investor, and how you should change your capital allocation strategy based on what he's seeing in the world.
[01:11] Here's my latest conversation with Jan Van Eck.
[01:13] All right, Jan.
[01:15] Uh private credit has been a huge issue.
[01:16] People are very worried about it.
[01:18] Are you worried or what do you think is going on?
[01:20] Uh you went right into my favorite topic.
[01:24] Listen, first quarter, a lot of concern well, end of last year, Jamie Dimon says cockroaches.
[01:30] Remember we had two frauds in in the private lending markets.
[01:34] Cockroaches meaning there's a you know, sort of systemic problem.
[01:36] It's the It's a risk.
[01:37] And JP Morgan should know, they lend a lot into the private space, right?
[01:42] Whether it's private equity, private credit, BDCs, everything.
[01:44] They're all over it.
[01:46] So, you think he'd be really informed.
[01:47] So, there were a lot of fears about alternative credit.
[01:49] And as as we said in the beginning of January, the sell-off is going to happen in the BDC space because they're liquid.
[01:55] So, every day every every day the market's open, you can sell your BDC
[02:01] Holdings.
[02:04] And BDCs as a whole as a whole went to a 20% discount to NAV.
[02:08] So, NAV is, you know, only calculated once a quarter.
[02:09] So, it's a stale as soon as they print it kind of statistic.
[02:14] But, 20% If these If these BDCs on average leverage two times, a 20% haircut means that you've got a 10% default rate, right?
[02:23] High yield is defaulting at 2 and 1/2%.
[02:27] So, So, the BDCs are pricing 10% default, whereas the reality of the high yield market now arguably is that's high graded a little bit is at 2 and 1/2%.
[02:36] That's just a disconnect.
[02:38] And I layer on top, listen, the world economy I'm sorry, the US economy is in good shape, right?
[02:42] So, corporate America is in good shape.
[02:45] So, there's no reason to think we're going to get this huge spike in defaults.
[02:50] So, that's why I'm really excited.
[02:52] Now, even more exciting to me is some of the private credit issuers like the stocks of Blue Owl in particular I like.
[02:58] Way down, right?
[03:01] That it's it's come down, you know, I don't know, 20, 30,
[03:03] 40%.
[03:04] The stock itself, the dividend yield at whatever 10-ish a share, which is where it sat this morning, is like 9%.
[03:12] So, you get the upside of the business.
[03:14] They raised money in Q1.
[03:16] So, despite all these concerns, they're a growing business.
[03:18] Slowed down, but still growing.
[03:20] Yes, some of their funds had redemptions.
[03:22] Anyway, so to me that's a very exciting.
[03:25] So, when you When you look at let's take Blue Owl as just a hypothetical example here.
[03:28] So, it has a very high yield on the stock itself.
[03:30] And then how do you underwrite the actual business prospects going forward?
[03:33] You just look at capital raised and then you try to underwrite as best you can in terms of the the solvency of the strategies?
[03:40] Yeah, I mean, look, it's asset management is a generally a growing business.
[03:43] These these companies, remember a year or two ago had been trading at 30 to 40 times forward earnings.
[03:50] I think that's crazy, Right?
[03:53] So, of course, way overpriced against the market.
[03:55] Now they're underpriced where they started life, you know, before anyone heard of Blackstone.
[03:59] Right?
[04:01] These stocks were 10 times earnings because no one thought their
[04:04] performance fees were going to be recurring, so they didn't give them any value.
[04:09] So, uh yeah, I think the I'm not even better even if the business stays the same, I'm getting a I'm clipping the 9% dividend yield and these are really bright guys.
[04:19] So much pain is in the stock already.
[04:21] They and they're growing.
[04:23] I mean, the business is growing, but it's stable.
[04:25] I'd still maybe put in your fixed income bucket.
[04:27] Now, when I look at the industry in general, you said asset management is going to continue to grow.
[04:32] One of the stats that everyone has kind of held on to now and is yelling and screaming about is there's more ETFs than there are individual stocks.
[04:37] And I like to Eric Balchunas, he said, you know, yes, there are more words than there are letters.
[04:41] There's more songs than there are chords, but generally, do you see this as kind of a a 10-20 year run where you're going to continue to see all of these asset managers, whether it's VanEck in the private market or some of these publicly traded ones, just there's a massive tailwind that people doesn't understand?
[04:57] Yeah, the ETF business continues to explode, right?
[04:58] Not explode, but it's the it's the growth area of financial services.
[05:04] And you know, ETFs are like popcorn.
[05:07] You and I have talked about some of the when the kernel, you know, goes off,
[05:11] I mean, suddenly you have a couple of billion in AUM in an ETF.
[05:12] So, but the vast majority of ETFs are below 100 million.
[05:17] Right?
[05:19] So, you know, that's it's kind of a misleading statistic as far as I'm concerned.
[05:23] You know, I was talking about the ETF industry earlier today and I think where people don't appreciate is the accessibility to sort of underserved asset classes.
[05:30] I know Bitcoin is something you know, we can talk about, but fixed income is a huge area.
[05:37] Right?
[05:39] So, if you look at our fixed income ETFs, only probably 5 or 10% of the bonds in any fixed income ETF forgetting governments trade on any given day.
[05:50] So, it's really become a very liquid vehicle.
[05:53] Now, it's vulnerable when you have market dislocations.
[05:55] So, if you look at the industry as at all, I don't care about the growth.
[05:57] I think it's great.
[05:58] I don't care about the proliferation of ETFs.
[06:00] Competition is healthy.
[06:02] But, the thing that to remember
[06:05] is fixed income ETFs are kind of a different cat.
[06:09] Now, when I look at your guys' business, I think these numbers are as of 3/31.
[06:12] You've got about 200 billion in assets, 100 billion are in US and international uh 45 billion is in gold and precious metals, 19 billion is in US and international fixed income, and then 20 billion is in natural resources and commodities.
[06:25] My takeaway from that is you expect equities to be much bigger, but I think to your point having 20 billion in fixed income and 20 billion in natural resources, and then another 45 billion in um gold and precious metals, like you guys are pretty well-rounded here, right?
[06:39] You you really do offer, I think, a full suite to an investor.
[06:41] And it's kind of the DNA of the firm of how you guys started with the big bet on gold in the early days, right?
[06:48] When I when I joined Van Eck, we basically had one fund.
[06:49] It was a gold mining fund.
[06:51] It was a mutual fund.
[06:54] That was the fund that my dad became famous for in 1968.
[06:56] He started the first gold fund.
[06:59] Gold shares are so volatile.
[07:02] Um you know, from 2011 to 2016, gold mining
[07:05] Shares went, GDX was down 90%.
[07:09] Wow.
[07:10] No one, no one realizes what decimation happened in natural resource in last decade.
[07:14] But, to your point, I kind of historically have come to work I describe it.
[07:18] What do I do in the morning?
[07:19] I try to get away from gold and diversify because if you're, you know, that's your revenue stream as a business, right?
[07:25] There's no fallback.
[07:28] Um, then you want to diversify.
[07:30] So, luckily Van Eck is uh has been successful in a number of different asset classes.
[07:33] Now, when people think about gold, let's just start with that as as one single asset class.
[07:36] Um, I think that there's a couple different ways that they can play this.
[07:39] They can obviously buy physical gold.
[07:41] They can allocate to an ETF and just get underlying gold exposure.
[07:45] There are the miners.
[07:45] There's these now gold streaming companies or kind of royalty type businesses.
[07:49] How do you think about gold exposure in someone's portfolio?
[07:54] Is there a kind of a, hey, start here and then expand over time?
[07:56] Do they want a bucket of these and in kind of a equal weighting?
[07:59] What, what do you when you're talking to clients, what, how do you think about it?
[08:03] Our number one question when we talk to people about investing is do you want
[08:07] the asset class?
[08:09] Right, your asset class decision is so important and gold is a very, very powerful asset class in the right economic environment.
[08:17] I'm not like my dad.
[08:20] I'm not like an always gold guy.
[08:22] Uh I am very bullish over the next 10 years cuz I think gold is re-emerging as a global currency.
[08:25] But the number one question is do you want to own it or not?
[08:27] Why do you own it?
[08:30] So, I own it because I'm really worried about government spending.
[08:35] Um our budget deficit has come down in the last couple of years from six and a half to maybe low fives in terms of percent of GDP.
[08:42] If we're spending half a trillion more on this Iran war, which is what's been said, it's not showing through in the numbers at all right now, but if that happens, then absolutely I think people need a hedge in their portfolios cuz that will pull everything down.
[08:56] And actually short-term, it'll pull gold down as well, Anthony.
[09:00] So, anyway, that's why thinking about that and I'd love to get your views on, you know, if if there were a I'll call it a freak out
[09:07] because of government spending, you could have the 10-year jump 200 basis points.
[09:11] I don't think there's going to be anywhere to hide, even even gold.
[09:15] But medium-long term, I think gold is is something you want.
[09:18] Start with gold bullion if you, you know, if you don't have someone helping you with the allocation.
[09:24] That would be the biggest thing um in my portfolio because of its historical liquidity.
[09:28] Gold shares are kind of an add-on to that, maybe 2/3 bullion, 1/3 gold shares if I was just to start somewhere.
[09:37] Yeah.
[09:38] But um you know, more of our business is now doing model allocation.
[09:42] Yeah.
[09:42] What was so fascinating to me is, you know, if you go back to, I don't know, 10, 15, maybe 20 years ago and you said to someone, "I'm going to buy gold instead of buy equities and I think gold may outperform."
[09:51] First of all, I don't think there's that many people saying they were buying gold because they thought it was going to outperform as much as they were basically buying it as protection.
[09:57] Right.
[09:57] So, equities was for growth, gold gold is for protection.
[09:59] Now, the argument was always that, "Hey, the equities are productive, right?
[10:01] You're going to get cash flow, you're going to get yield, you're going to be able to do all this stuff."
[10:06] There have been certain times
[10:07] over the last 2 years where if you look back 25 years, gold has actually outperformed equities.
[10:12] It's very fascinating to me because it suggests that maybe a lot of the equity growth has really just been the debasement of the dollar more so than the productivity of the underlying companies.
[10:20] Is that how you look at it?
[10:22] a horrible time for the equities and that's what I was, you know, that's why I was pointing out that big drawdown from 2011 to 2018.
[10:27] 2016.
[10:30] If you take a big step back, the big first big commodity cycle in the US was in recent history was the 1970s.
[10:34] And the beauty of that cycle for the companies, their cost of production didn't go up.
[10:39] So, the price of gold went from $35 to over $800 an ounce, cost of producing gold didn't really change.
[10:46] What's happened over the ensuing decades, including the 2000s, the China boom, is that the cost of producing commodities has started to increase with the cost of inflation and it's basically we're running out.
[10:57] So, it's you have to dig more tons of dirt for every little ounce of gold.
[11:02] And that that extends throughout the resources universe.
[11:05] So, the equities, you know,
[11:09] Were punished for that.
[11:11] They're like, "Great, you know, Anthony, Jan, you know, gold is at 4,500 or whatever it is an ounce, but you know, your costs keep going up."
[11:17] It's like the opposite of when you look at the tech companies like Nvidia or all the hyperscale, their margins are beautiful.
[11:24] They just sit there in the high 70s, right?
[11:26] Why would you want to own a company where the margins are shrinking every year?
[11:30] So, that's been the overhang and you're right, over the recent past it's been been really bad.
[11:35] Now, in a bullish environment, you can overcome that.
[11:38] Yeah.
[11:39] What's fascinating about the commodities in particular is also uh most people don't think of AI and commodities being hyperlinked together.
[11:45] But obviously, we have seen that this commodity bull market is being heavily driven by Oh, wait a second.
[11:49] We need more power.
[11:51] We need to build data centers.
[11:52] We need to build out electrical infrastructure.
[11:54] That is made up of commodities.
[11:56] We have to go find this stuff.
[11:57] And so, there's almost this like global treasure hunt, if you will, trying to find uh enough supply to meet the demand.
[12:04] And I don't see that changing anytime soon.
[12:07] What about you?
[12:08] Uh no, I don't see it.
[12:08] All right.
[12:08] It's
[12:10] The old The new world needs the old world, and you've got the reshoring dynamic, right?
[12:14] All the supply chains need to be independent of China.
[12:16] So, that's where Earth That's not directly for AI compute, but um but indirectly it is.
[12:23] Uh but yeah, copper and all the commodities, uh all the processing.
[12:28] So, you've got the Yeah, the double kick of we need more, and we need it home.
[12:36] Now, when you look at um gold and silver in particular, those two had exploded over the last, you know, 2 years or so.
[12:44] Um in a weird way, Bitcoin has not kept up.
[12:47] And so, some people say, "Hey, well, that means that Bitcoin's got to catch up."
[12:49] Other people would argue, "Actually, that means gold is going to kind of correct, and you know, gold and Bitcoin will meet again."
[12:54] How do you look at the relationship between these two assets?
[12:58] I I I think it's impossible to say Bitcoin should do X, Y, or Z, right?
[13:04] I mean, the the reason I got interested in it in 2017 is it's its own thing, and it's going to evolve as adoption changes.
[13:10] Now, what what has
[13:12] changed in the adoption story in the last 2 years?
[13:14] Nothing, right?
[13:16] Central banks haven't come on board,
[13:17] corporations haven't come on board.
[13:20] It's basically been some financial investors through the ETFs, but not many institutions, right?
[13:27] Uh so, slowly asset allocators have started to include it, but not not dramatic.
[13:32] So why would you expect some big change in the price of Bitcoin when nothing has happened?
[13:35] I mean, the way I look at it is still the old-fashioned way, very simplistic.
[13:38] I'm an over I like to oversimplify.
[13:40] Limited supply like gold, 4-year halving cycle.
[13:44] 4-year halving cycle has driven because that's the amount of Bitcoin that miners get to run the network, that has caused a decline, right?
[13:53] In their profitability and their decline every 4 years in Bitcoin.
[13:55] Guess what?
[13:57] 2026 is the year of decline in Bitcoin.
[13:59] W- why would you know, why would it break this cycle this year given that nothing has changed on the adoption side?
[14:05] So uh I I'm still long-term bullish.
[14:07] Uh and I just don't get the narrative of it should, you
[14:12] know, link.
[14:14] Actually, it's been a negative to me that Bitcoin has had this higher correlation to the Nasdaq since COVID, right?
[14:21] It used to have zero literally zero correlation, and now it's had a 0.6 correlation, which is really high, right?
[14:27] A correlation of one is the identical performance.
[14:30] So I you know, that's kind of where I'm at.
[14:32] I I don't like And And even W- W-
[14:34] It's It's It's a long-term story, yeah.
[14:36] Do you see sophisticated institutional investors actually walking away from or not investing in Bitcoin because the correlations have risen?
[14:43] I think allocators, right?
[14:46] So if you think about a lot of America's wealth through financial advisors um is in these big model portfolios, right?
[14:54] They follow the chief investment officers of a Morgan Stanley or a Merrill Lynch or something like that.
[15:01] And so your average advisor is doing less and less of the fund picking or the Bitcoin allocation.
[15:07] Those allocators are open to uh to Bitcoin um especially with the ETF kind
[15:12] of approval implicit approval of the US government, but they absolutely do not like the correlation.
[15:17] It will right?
[15:19] They'll They'll just say, "Whoop, I'll have 1% as opposed to 2% or 2% as opposed to 4%."
[15:24] Absolutely, I think it's hurt adoption.
[15:28] Yeah.
[15:28] Now I hope it changes.
[15:30] I don't know if you have a view on that.
[15:31] I think that it just takes time.
[15:33] I mean, I've been saying for years, people always ask, you know, what has to happen for Bitcoin to go higher?
[15:36] And I would just say the expiration of time.
[15:38] And I know people don't like that answer, right?
[15:39] But like there is an element of you need young people to become a little bit older.
[15:42] They need to make more money.
[15:44] They already are sympathetic to Bitcoin, and so they're going to continue to put more money in.
[15:46] You need these young people who are analysts or um you know, kind of associates at the financial firms to become the managing directors or the CIOs and get into positions of power and influence and control.
[15:57] Um you need to have the kind of Lindy effect of, okay, this thing has not only been around for 10 years, 12 years, 15 years, now it's been around for 50 years, right?
[16:06] And so people just continue to allocate to it because they realize it's not going away.
[16:10] And so it's
[16:13] in a world of Bitcoin where people as like a population have been so instrumental in making it successful,
[16:20] Mhm.
[16:21] the most important thing to happen to Bitcoin is the thing that none of us control.
[16:24] It's just time.
[16:26] You can't speed it up.
[16:27] And so you just got to kind of let it happen.
[16:29] And if you go back, you know, 2 and 1/2 years ago,
[16:31] what, there's no ETF, right?
[16:33] A lot of these institutions aren't participating.
[16:35] Larry Fink is not on television acting as the, you know, CMO of Bitcoin, right?
[16:39] Like all this stuff.
[16:41] [laughter]
[16:41] And so in a weird way, um just the passage of time, the normalization, I think you get more capital, more interest.
[16:47] That the media actually now treats it much more like an asset that is not going away.
[16:52] Yeah.
[16:52] still claim it's dead or, you know, you guys are idiots for putting in your portfolio or you're too bullish or, you know, whatever their critique is.
[16:59] But people forget.
[17:01] I mean, 5 years ago, if you said that you thought Bitcoin was going to 100 grand,
[17:04] these people were they they'd crucify you, right?
[17:05] I mean, they literally were like, "You guys are stupid.
[17:07] This thing is complete zero."
[17:09] Yeah.
[17:09] And so what I think is interesting is Bitcoin has passed into, you know, kind
[17:13] of the the major leagues, is the way I think about it.
[17:15] I think stable coins have as well.
[17:18] But that long tail of crypto, I mean it's not like you guys ran out and filed for, you know, 50 crypto altcoin ETFs, right?
[17:25] And so I just don't see interest in that stuff in what I consider like the major leagues of uh of finance.
[17:31] Yeah.
[17:32] I think there's an aspect of that level of patience, which really rings loudly in my ears.
[17:42] And it it the first time um this kind of concept was driven home to me, I was listening to the All-In pod, and they were talking about internet stocks like Amazon, like the winners.
[17:52] What was happening to their stocks after the you know, the blow-off in in 2000, right?
[17:58] As as an Nasdaq took what 15 years to break even with a
[18:00] And it's just the rotation in the ownership of those stocks, right?
[18:05] Where people who had lost money were selling for gain you know, tax reasons, and then new buyers would come in, but then the price would go up, and the people were
[18:14] like, "Oh, I'm even. I'm out."
[18:16] And there's just it was a multi-year process.
[18:18] I don't know I don't know if there's a good word for it.
[18:20] If there is, I don't I don't know what it is.
[18:21] But I find that's very similar to like what's happened to Nvidia over the last 9 months, right?
[18:27] Fabulous stock over the last 5 years, right?
[18:29] But over the last 9 months, despite this huge compute shortage, it's been grinding, you know?
[18:37] And I just think I think it's it's just the replacement of ownership, and I think that's happening in Bitcoin.
[18:43] And it's almost foreseeable, right?
[18:45] We were we were talking, I don't know if you remember, at the end of last year, and we were basically saying this was going to happen.
[18:50] It was going to be quiet.
[18:52] We we're both big Bitcoin owners, I believe, right?
[18:53] But we're like, "It's just going to be boring."
[18:58] And I think part of it is that that churn churn is a negative word, but you know what I mean?
[19:01] It's like replacement.
[19:03] Maybe it's a re-energizing or something of the of the ownership base.
[19:07] Jordi Visser calls it like a silent IPO, right?
[19:10] Where you basically have like in a normal IPO, you have all the private investors and they basically are handing
[19:14] it to the institutions of the public market and there's this like changing of the guard, right?
[19:19] And his group his point is basically that is what Bitcoin has been going through over the last year or so is this replacement or or the changing of hands from what are really the hardcore retail individual Bitcoiners.
[19:30] Yeah.
[19:31] Some portion of them, not all of them, but some portion of them have been selling and you can see where the buying is coming from and the question is just how long will it take for that change over to happen.
[19:43] Now, the nice thing I believe is that when the institutions hold Bitcoin, they don't really sell that much, right?
[19:47] And so you're actually almost taking it from people who did have really strong kind of diamond hands and you're handing it to professional diamond hands.
[19:57] And so that should lay the groundwork, but I also think the volatility compressing A lot of Bitcoiners like Bitcoin cuz it was super volatile.
[20:03] Yeah.
[20:04] You know, the thing that scared away the institutions attracted the individuals.
[20:07] Right.
[20:07] Now, I I think that we've reached a volatility point where the institutions are interested, which means that the like cowboys of finance They're like,
[20:15] "Eh, is it going to go up 30% a year?
[20:17] Like,
[20:18] where's the thing that's going to go up
[20:19] 200%?"
[20:21] >> Let's go.
[20:21] >> Right? Yeah, so I I do think that
[20:23] there's this very interesting dynamic of
[20:26] you have people who are early to a lot
[20:28] of these trends. What they're actually
[20:30] seeking is the asymmetry in the
[20:31] volatility.
[20:32] >> Mhm.
[20:32] >> If Bitcoin's asymmetry is gone and now
[20:35] you basically have something that
[20:35] compounds at 30% a year for the next
[20:37] decade
[20:38] any traditional investor would be
[20:40] ecstatic.
[20:41] >> Mhm.
[20:42] >> But the hardcore Bitcoiners that were
[20:43] there for the volatility and and the
[20:45] quote-unquote fun
[20:47] They're like, "Like, the stock market
[20:49] does that stuff."
[20:49] >> They'd be ecstatic, but they'd be
[20:50] thrilled if that correlation came down.
[20:53] >> Correct.
[20:54] >> Cuz that's the that's the, you know, who
[20:56] needs more cues, right? That's kind of
[20:58] the thing. I like I like the silent IPO
[20:59] concept. You know, when I was I've been
[21:02] watching Nvidia, obviously it's the
[21:04] biggest holding in SMA, so I watch it
[21:05] very closely, but uh SoftBank last year
[21:08] announced they were selling the early
[21:10] investor in Nvidia, they were selling
[21:11] all their Nvidia. And that's kind of
[21:13] what your point is, right? It's like an
[21:15] IPO process, like they were getting out.
[21:17] They probably have other things that
[21:18] they can make 10 trillion times their
[21:20] money at, right? But um yeah,
[21:22] interesting.
[21:22] >> It It It's also like what is your game,
[21:24] right? If I think of you and VanEck, I
[21:26] think that you're you've a very specific
[21:28] game that you guys play, right? Both in
[21:29] terms of as you and I have talked over
[21:30] the years about your personal portfolio
[21:32] or the firm's, you know, kind of
[21:33] allocation of capital, uh but also the
[21:35] products that you offer, right? I think
[21:36] it's a very unique approach and and
[21:38] mentality compared to, you know, I take
[21:41] the exact opposite extreme, the
[21:43] 25-year-old who's just started to make
[21:45] money and is, you know, basically saying
[21:46] my W-2 is not going to get me any sort
[21:48] of financial security, I got to go and
[21:50] take max risk right now.
[21:52] Their allocation's going to look very
[21:53] different than what VanEck is doing,
[21:55] right? I think that that is part of this
[21:57] of Bitcoin was super attractive cuz
[22:00] there's also people buying it. They knew
[22:02] the world was betting against them.
[22:03] >> Mhm.
[22:03] >> And you were kind of get going to get
[22:05] paid if you were right. If you think of
[22:06] prediction markets today, like that's
[22:08] kind of what people are doing, right?
[22:09] Like people are looking for what's the
[22:10] thing that is mispriced.
[22:12] And maybe Bitcoin is getting better
[22:14] priced, like the world understands it
[22:16] more, and so if it's better priced,
[22:18] you're just not going to have as much
[22:19] asymmetry to it.
[22:20] >> Yeah, could be.
[22:21] >> All right. Um let's talk about uh
[22:23] international equities in general. You
[22:25] guys have been, I think, very big
[22:26] proponents to this early in the VanEck
[22:28] days. That That was a a big focus, but I
[22:30] know that you're uh pretty excited about
[22:31] India and some of the stuff that's going
[22:33] on there. Talk us through what uh what
[22:35] what you're seeing.
[22:36] >> Yeah, I mean, nothing nothing really
[22:37] new, but I So, take if you take my
[22:39] 10-year kind of investment philosophy
[22:41] and tw- you know, in 2036, looking back,
[22:44] what's going to be one of the obvious
[22:46] things that's happening today? You know,
[22:48] don't just focus on what's happening in
[22:50] the head in in the headlines in the
[22:51] newspapers, but a a very powerful trend.
[22:54] And
[22:56] you know, looking back, see if you look
[22:58] back at capitalism like 400 years, like
[23:00] you want to invest in the countries that
[23:03] are just pro-business, right? That the
[23:06] government has a clear set of rules and
[23:08] stays out of the way.
[23:10] India has really implemented a very
[23:13] strong set of pro-business,
[23:16] um, you know, kind of enablers over the
[23:17] last 5 years under Modi. One important
[23:21] thing as well is a technological basis,
[23:23] right? So, effectively, the cost of cell
[23:26] phones in India went down to, you know,
[23:28] something that 900 million Indians can
[23:30] afford. And now they have digital IDs
[23:33] and can move all kinds of like paperwork
[23:35] and and and taxes and everything. It's
[23:38] more transparent, but it's it's it's
[23:40] that is a a very important part. And
[23:42] then they've restructured labor laws,
[23:45] you know, bankruptcy laws, everything to
[23:46] make it easier taxes between provinces
[23:49] to make it easier to do business in
[23:51] India. Anyway, the result is you have
[23:53] the highest GDP growth and it's supposed
[23:55] to be as big as continental Europe in 10
[23:57] years. Of course, I started talking
[23:59] about this a year and a half ago, and
[24:01] India has underperformed, I think, every
[24:03] market, but I don't care. I'm just
[24:05] saying in 10 years, do you want 1% of
[24:08] your portfolio in India or do you want
[24:10] 5% or something, you know, given, I
[24:13] think, what I just said is a very high
[24:15] conviction in in my mind. Now, there's a
[24:17] lot of negatives about the Indian market
[24:19] or the large cap companies. They're
[24:21] being attacked by AI, you know, just
[24:24] like the consulting firms here, like the
[24:25] Infosys's. So, I mean, we could spend an
[24:28] hour talking about the pros and cons of
[24:30] India, but that's kind of my my general
[24:32] thesis there.
[24:34] >> What do you do? So, you do the work, you
[24:36] come up with this thesis that, hey,
[24:37] India is going to be a growth sector or
[24:40] a growth, um, geography. I want to go
[24:43] and get, uh, both myself and also our
[24:45] clients access to the Indian market,
[24:47] right? You guys create some products
[24:48] there. Um,
[24:49] it doesn't perform for the first year
[24:51] and a half.
[24:52] >> Yeah.
[24:53] >> Do you get more excited? Do you start to
[24:54] question the thesis? Do you go and redo
[24:56] the work? Like like just walk us through
[24:58] just using this as one example.
[25:00] There's I don't know over the years
[25:01] you've been running VanEck, I don't know
[25:03] how many thesis you've had, right? Some
[25:04] of them will work, some of them won't.
[25:06] >> Yeah.
[25:06] >> At what point do you say to yourself,
[25:08] "Hey, maybe I got it wrong." versus "No,
[25:10] I'm right and it's just early." And so
[25:12] that patience, that long-term thinking
[25:14] is really what will pay off here.
[25:16] >> That's a great question. So, I started
[25:18] doing these like quarterly outlooks and
[25:20] they're on the internet, so you can tell
[25:21] you can look at my track record and I
[25:24] wanted to start keeping score and one of
[25:26] the most important things I realized is
[25:28] to be clear about the time frame of what
[25:30] you're talking about. So, as well if I
[25:33] say India, usually I'm saying 10 years.
[25:35] Right? But sometimes like like the
[25:38] opportunities in BDCs, I think that's
[25:40] short-term. So, I think that's this
[25:41] quarter. Like I'm a strong buyer of BDCs
[25:44] blue out this quarter. I'm a buyer of
[25:46] Bitcoin this quarter. I was a seller in
[25:49] January. So, that's short-term. Um
[25:52] to answer your question, we run client
[25:55] portfolios and we've been doing it for
[25:57] about 5 years now.
[25:58] And uh the models, the quant screens
[26:02] will slap me down
[26:04] if I'm wrong if I have a 10-year view
[26:06] and I'm wrong, right? And and I think
[26:08] over that time period I've gotten better
[26:11] at at least communicating what I have in
[26:13] mind. 10 years for me as a personal
[26:16] investor, which I think a lot of people
[26:18] have some of their portfolio they run
[26:20] themselves, who cares? Who cares if
[26:23] India underperforms by 5% in a quarter
[26:26] against China? Like you know, if you're
[26:28] if you're right over the 10-year period,
[26:30] that's like worrying about Nvidia, you
[26:32] know, when it had the eight it's 80%
[26:34] drawdown. You just buy more if you're in
[26:36] convicted in the trade. So, uh but but
[26:39] that you're right.
[26:41] Our clients [snorts] do care more about
[26:42] monthly and quarterly performance and we
[26:44] our risk screens will uh will affect
[26:46] that. And and we don't really even try
[26:49] to go after like the quarterly
[26:52] um things in most of our models. They're
[26:54] longer term than that. So, it's more the
[26:56] medium and longer term, but under, you
[26:58] know, quant
[27:00] controls.
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[28:49] >> Now, if you zoom out, one of the things
[28:50] I find interesting about investing right
[28:53] now is there's almost different stories
[28:56] or different narratives depending on
[28:58] which data points you want to look at.
[28:59] So, on a macro basis, if we go back to
[29:02] December of last year, I think that many
[29:04] people would have argued that we were
[29:05] entering into a low inflation, high
[29:07] growth economy. And people were very
[29:10] bullish. And I think that they were
[29:12] saying, "Look, we're going into a
[29:13] midterm year. We have a president
[29:15] sitting in Washington, D.C., who is
[29:17] going to juice the stock market." And
[29:19] everyone was, you know, kind of
[29:21] really going risk on from that
[29:22] perspective.
[29:23] At the same time, we then get into the
[29:25] war with Iran. Oil prices spike. Energy
[29:27] goes up, right? Inflationary pressure
[29:29] start to come. CPI starts to creep back
[29:31] up after it had been falling. And so
[29:33] then was people say, "Well, hold on a
[29:34] second here. If we're getting inflation,
[29:37] then we should be getting higher
[29:38] interest rates. If higher interest rates
[29:39] are coming, then maybe this is going to
[29:40] be a headwind for stocks."
[29:42] And then you go and you look at the
[29:43] private market and you see that there
[29:44] are, you know, at least three, if not
[29:46] more, trillion-dollar or larger
[29:48] companies that are supposed to be coming
[29:49] to market in the next 12 months or so.
[29:51] And so people start getting worried
[29:52] about supply coming in.
[29:54] Then you go and you look at the economic
[29:55] data, which maybe is telling a a
[29:57] somewhat rosy picture, but then you hear
[29:59] people and they're like, "I am
[30:02] underwater. This sucks, right? I I Gas
[30:04] is too high. Groceries are too high,
[30:06] etc."
[30:07] My point is, depending on where you
[30:09] look, there's a different story. So,
[30:11] it's very complex and it's very dynamic
[30:14] because
[30:15] I don't know, 100 days ago versus now,
[30:17] the story looks very different.
[30:19] How do you navigate that as an investor?
[30:21] Like like what what You've been doing
[30:22] this a long time. Like what do you do to
[30:25] make sure that you capitalize on
[30:26] opportunities, but also not panic sell
[30:29] buy, you know, and kind of have unforced
[30:31] errors?
[30:32] >> Uh well, you identified the big
[30:35] questions I ask myself when I think
[30:37] about the 10-year trends, right? What is
[30:39] macro What is fiscal policy, government
[30:41] spending? What is monetary policy?
[30:44] What's the Fed going to do? What are
[30:45] interest rates going to do?
[30:47] My thesis coming into this year is we
[30:49] are not going to learn anything. We're
[30:50] in a stable
[30:52] environment in 2026. And literally, we
[30:55] could just go to sleep and wake up on
[30:57] January 1st, 2027. Nothing will have
[30:59] happened on fiscal or monetary. And I'm
[31:02] sticking with that.
[31:03] >> Mhm.
[31:03] >> Right? The generally speaking, the the
[31:06] tax bill went through last year. And
[31:08] even if the Democrats win the mid-term,
[31:10] they're not going to be able to change
[31:11] much on that, right? Because the
[31:12] president will just veto it. So, fiscal
[31:14] is kind of set. Warsh, like Bessen did I
[31:17] think a fabulous job at kind of
[31:19] articulating a less activist Fed stance.
[31:24] And they they they stuck the landing. I
[31:26] mean, like that's what I call it. Like
[31:28] Warsh getting in there, you know,
[31:30] everyone was worried about all this kind
[31:31] of stuff. And what does Trump do the day
[31:33] he's, you know, he's he's put in office?
[31:36] He says, "Go do what you want." Remember
[31:38] how much time we wasted talking about
[31:41] Anyway, sorry. So, there was visibility
[31:43] on monetary policy. I I don't think this
[31:46] I I just fundamentally look at this Iran
[31:48] conflict as temporary.
[31:50] >> Mhm.
[31:51] >> I just I mean, yes, it'll be bad for
[31:53] government spending.
[31:56] Inflation's up. I I don't think the
[31:57] Fed's going to react to that. Like I
[31:59] think that's the whole point is that the
[32:01] Fed doesn't Like do you think the
[32:03] central bank can affect gas prices?
[32:05] Like not not one person in a hundred in
[32:08] America thinks that. Well, you know
[32:09] >> what I think?
[32:10] >> Except for the a couple of people on
[32:11] CNBC.
[32:12] >> But here's here's what's crazy to me is
[32:15] the Fed, I think they're smart enough to
[32:16] know that they can't.
[32:18] But what I actually think is a little
[32:20] nerve-racking is that I do think there
[32:22] are some politicians that think they can
[32:24] affect gas prices. And so, if you go
[32:26] down to, you know, take New York City,
[32:29] we both live in New York, and
[32:31] World Cup tickets are expensive.
[32:33] The new mayor's like, "Well, I'm going
[32:34] to go and I'm going to figure out how to
[32:35] get $50 World Cup tickets. And when you
[32:38] realize what they did, you're like, I
[32:40] mean, this is crazy town, right? By the
[32:41] way, the people who get the $50 World
[32:43] Cup tickets are ecstatic. They're
[32:44] they're incredibly happy. But it's just
[32:46] not a sustainable thing that you can go
[32:47] and you can do, right? And so, if all of
[32:50] a sudden the mayor of New York or a
[32:52] couple of other politicians around the
[32:53] country, if you said to them, "Hey,
[32:55] we're going to give you any tool you
[32:56] want get gas prices down."
[32:58] They would come up with insane ideas on
[33:01] how to do that. So, in a weird way, like
[33:03] I actually believe, and I'm not exactly
[33:05] the biggest fan of the Fed usually,
[33:06] right? But I do believe that they are
[33:08] intelligent and they understand kind of
[33:09] what levers they can pull and can't
[33:11] pull.
[33:12] It's the politicians that seem to not be
[33:15] that smart and say like, "Oh, I just
[33:18] need to claim victory in the headlines."
[33:20] >> waived the gas tax, right? That's three
[33:21] and a half billion dollars a month.
[33:23] That's more government spending, to your
[33:25] point. But, I mean, big picture, uh
[33:29] I if you just focus on on these macro
[33:32] trends, uh I think it's I think it's
[33:35] easier and I think it's more transparent
[33:36] this year that there's no big monetary
[33:38] shocks, no big government spending
[33:40] shocks. I think probably it'll extend
[33:42] into next year as well. Sure, it does
[33:44] mean, you know, short-term rates aren't
[33:46] going to fall a lot because I never
[33:48] really thought that was going to happen
[33:49] anyway.
[33:50] They could even rise a little bit. Who
[33:52] Who Like, does that really change the
[33:54] world? I don't really think so.
[33:55] Um
[33:56] you know, my biggest concern by far is
[33:59] government spending, to your point.
[34:01] Don't trust politicians.
[34:03] But, you know, people don't When will
[34:06] that get priced into markets, Anthony? I
[34:08] do all these client meetings and surveys
[34:10] and I'm saying I ask, "Do you think the
[34:12] government will meet its obligations in
[34:15] the next 10 years? Will it default?"
[34:17] >> What do you think?
[34:18] >> They all, 80, 90% absolutely. And then
[34:22] I'm saying, "Okay, social security
[34:25] unless they change the tax regime, will
[34:27] not have enough money to in in 2033 or
[34:30] 2034, right? So, that's within my
[34:32] 10-year.
[34:34] Do you think the government's going to
[34:35] somehow fix that problem? No one thinks
[34:37] they're going to fix the problem,
[34:40] but they don't you know, they don't
[34:41] believe even afterwards, they still say
[34:43] the government's going to meet all of
[34:44] its obligations. So, I'm like, that is
[34:46] dissonance. Like, in your mind, you're
[34:48] saying something, but it's not you're
[34:50] not
[34:51] conscious of that. And so, I I it's all
[34:55] about the timing. I I I absolutely think
[34:58] it's going to be a problem. Every
[34:59] financial crisis in US history has
[35:01] always come out of the banking system
[35:04] because banks are unstable, right?
[35:06] Government has always marched up and if
[35:09] you know, bailed out and let's call it
[35:11] an industry or Wall Street.
[35:13] Who's going to bail out the Fed?
[35:15] When our 10-year [clears throat] rates
[35:17] go up to you know, if if if and when
[35:19] that happens, who's like it's it'll be a
[35:21] new thing for everybody and I don't know
[35:23] about our portfolios.
[35:25] >> Do you think that
[35:27] >> I don't know.
[35:27] >> Do you think that the government's going
[35:28] to default in the next 10 years?
[35:30] >> They're not going to pay their social
[35:31] security. I want to write an op-ed
[35:33] saying, "I'm sorry.
[35:35] You're not going to get your money.
[35:36] You're only going to get 80 cents on the
[35:37] dollar and I'm sorry for the people that
[35:39] really need it."
[35:40] And then they're going to whack up, you
[35:42] know, the rest of society to try to make
[35:44] for a shortfall, but the
[35:46] you know,
[35:46] uh Friedberg David Friedberg on the
[35:48] All-In podcast talks about this a lot.
[35:49] The states have a lot of obligations
[35:51] that they can't meet. I mean, if New
[35:53] York and California continue to drive
[35:55] business out of their states, their
[35:57] pension obligations are going to eat the
[35:59] economy alive. So, they're not going to
[36:01] meet those obligations, either. I I call
[36:03] that a default. I mean,
[36:04] >> [laughter]
[36:04] >> it's they will probably pay the interest
[36:07] and principal on their debt cuz
[36:09] otherwise they couldn't access the
[36:10] financial markets, but they're going to
[36:11] stop paying people what they owe. And
[36:13] then what are the courts going to do?
[36:14] Force them?
[36:16] >> I've always wondered, should they just
[36:17] >> Sorry for that rant.
[36:18] >> No no no, but I I I always wonder,
[36:20] should they stop promising
[36:22] things to young people, right? So, like
[36:24] what what always strikes me as a little
[36:26] crazy is okay, so let's all objectively
[36:29] agree that there is a timeline as to
[36:32] when they're going to run out of money.
[36:33] Some people may think it's a little
[36:34] earlier, a little bit later, whatever,
[36:36] but they they're going to run out of
[36:36] money.
[36:38] Why would you keep making promises today
[36:40] knowing you're not going to have the
[36:41] money, right? Now, they may argue cuz we
[36:44] need those people to pay in, right? It's
[36:45] kind of like a Ponzi scheme. So, it's
[36:46] like we need someone to give us fresh
[36:47] money so we can go and we can use it to
[36:49] pay out our our obligations.
[36:51] But, it does feel like uh politicians
[36:54] are really good at just like keep
[36:55] kicking the can down the road. And so,
[36:56] what I always go to is like what does
[36:58] the "quote unquote" reset look like? Is
[37:00] it just hey, you get 80 cents on the
[37:01] dollar?
[37:03] Again, those people would be very upset.
[37:04] I understand why. I would be very
[37:05] empathetic towards them and and and feel
[37:08] like they would have a great argument.
[37:10] But, for people outside of that cohort,
[37:13] it would not be as destructive if that
[37:15] was the only thing that was happening. I
[37:16] don't think that's the only thing that's
[37:17] going to happen. They are going to have
[37:19] to debase the dollar. They're going to
[37:20] have to do a bunch of these things all
[37:22] at once to be able to address this
[37:23] problem, and I think that's the part
[37:25] that people don't kind of see past is
[37:28] again, this is like pretty complex stuff
[37:30] that they're going to have to do to be
[37:31] able to address this issue.
[37:32] >> I think the sad thing is that day
[37:34] arrives and who do you point the finger
[37:37] at? Do you point it at the Republicans?
[37:39] Do you point it at the Democrats? Cuz
[37:40] they're both responsible. And they're
[37:42] So, then what are you going to do? Blame
[37:44] prior politicians? That doesn't really
[37:46] help the recipients. So, I wonder if
[37:48] those are all, you know, for us, like
[37:50] people in the markets being a little bit
[37:52] louder on this topic. You know, Wait.
[37:55] Anyway, that's a separate because the
[37:57] trustees are very clear. They'll write
[37:58] the annual report saying 80 cents on the
[38:01] dollar in 2033. Uh but yeah, so they'll
[38:04] have a clear conscience or whatever. I
[38:06] mean, they've done what they're supposed
[38:07] to be doing. It's it's uh the
[38:09] politicians that are really
[38:10] shortchanging the average person.
[38:13] >> One of the aspects of investing today
[38:15] that I think has really changed over the
[38:17] last five or six years, and a lot of it
[38:18] I think is because of COVID and in etc.,
[38:21] is um if I go and I look at a lot of the
[38:23] economic data, everything looks pretty
[38:25] good, right? I mean, there's some risk
[38:27] areas, but for the most part, it looks
[38:28] like the US economy is growing, the
[38:30] stock market is up, inflation is not at
[38:32] 9% or you know, whatever.
[38:34] If you go and you talk to people,
[38:37] it is a whole different story. And a lot
[38:40] of people will point to like the
[38:41] Michigan consumer sentiment survey. I
[38:43] think that it's complete trash and
[38:44] there's a lot of like sampling issues,
[38:46] etc. But let's use it as a directional
[38:48] like the stock market is going up and
[38:50] sentiment is going down. People are
[38:52] saying, I'm in financial pain. The data
[38:54] is not necessarily showing that as much.
[38:57] How do you balance these two? Do you
[38:59] look at the data? Do you listen to
[39:00] people? Do you have to kind of take them
[39:02] both together?
[39:03] >> I think it's a a great question. There's
[39:06] been a collapse in the kind of accuracy
[39:09] of sentiment uh and trust in polling.
[39:12] And it's not just financial markets. I
[39:14] can't [clears throat] recall it off the
[39:15] top of my head, but it's it's
[39:17] consistent. And if you look at trust in
[39:19] institutions, for example, trust in
[39:21] Congress, trust in, you know, I think I
[39:24] don't know what what's retained it. I
[39:25] think small business and religion is
[39:27] about it, but
[39:28] uh you know, academia, right? Uh large
[39:31] businesses, everything. And and
[39:33] sentiment, you're right, is just wacky,
[39:36] out of touch. It it It's It doesn't even
[39:39] match
[39:40] like what they're like their own
[39:42] behavior doesn't match what they're
[39:43] saying about themselves, right? So,
[39:45] they're saying, yes, sentiment is
[39:46] horrible, yet they're spending.
[39:47] >> Mhm.
[39:48] >> Right? And that's so I I don't know. I
[39:51] think there's been a politicization a
[39:53] little bit of sentiment data, but that's
[39:56] what I think.
[39:56] >> Well, it we 100% know that to be true,
[39:58] right? And again, I kind of look at this
[40:00] as and and over the years I've gotten
[40:01] very jaded where I'm just like, both
[40:03] political parties for the most are like
[40:05] full of right? And so like, okay,
[40:07] let's use it as a starting point. But if
[40:09] you go and you look at the Michigan
[40:10] consumer sentiment survey in particular,
[40:13] yeah, they do a great job of publishing
[40:15] a lot of the source data. And so, people
[40:17] smarter than me, aka Tom Lee, uh has
[40:20] gone and actually done the analysis and
[40:21] what he shows is it used to be they
[40:24] would survey 50% Republicans, 50%
[40:27] Democrats. And the reason why that was
[40:30] important is because, you know,
[40:31] Democrats will tell you inflation's
[40:32] going to like 6% and Republicans will
[40:34] say it's going to 1 and 1/2%, right? And
[40:35] so, they're just wildly political, you
[40:38] know, their brains are broken by
[40:39] politics type
[40:39] >> They're talking their books.
[40:40] >> Yeah, of course.
[40:42] Well,
[40:43] the sentiment was kind of middle of the
[40:45] road. And so, you kind of had this
[40:46] healthy tension. Some people thought it
[40:47] was good, some people thought it was
[40:48] bad, and you know, here we go.
[40:50] In the last 3 years or so, they have
[40:52] shifted to a lot more online polling.
[40:55] When they did that, the construction of
[40:58] the survey sample has changed. So, now
[41:01] they are actually surveying 2/3
[41:03] Democrats, 1/3 Republican.
[41:05] Now, I I'm not going to claim cuz I
[41:07] actually don't think that they're doing
[41:08] it intentionally. I think it's probably
[41:10] where they advertise in the survey,
[41:11] where they get the people, you know,
[41:12] there's all these like components that
[41:13] go into it.
[41:14] >> Yeah.
[41:14] >> But immediately by now having two times
[41:17] more Democrats than Republicans, and the
[41:19] Democrats tend to be more pessimistic on
[41:21] the economy going forward, etc.,
[41:23] sentiment starts to pull down. And so, I
[41:25] look at that and I'm like, okay, there
[41:26] are probably a lot of issues with the
[41:28] the stuff. If I tweet though and I say
[41:32] the American economy is rocking,
[41:34] oh my god, I mean, you you
[41:37] you just read the comments and you're
[41:38] like, by the way,
[41:39] there's a lot of people who disagree
[41:40] with that.
[41:41] >> Right.
[41:41] >> Right? And so, again, that's anecdotal,
[41:43] but I do wonder sometimes, like, is that
[41:45] actually a better signal for sentiment
[41:48] than the survey? Because there's a bunch
[41:49] of people who are like, look, man,
[41:51] gas is X dollars, you know, a gallon. Uh
[41:54] grocery bill, it's up 20%, 30%.
[41:58] And so,
[41:59] I think that in finance we look at
[42:01] inflation, and that's the thing we worry
[42:03] about, but really
[42:05] average American family is just looking
[42:07] at I don't care if the inflation
[42:08] happened in '21, '22, or if it happened
[42:11] in '26. All I know is it used to cost me
[42:13] 60 bucks to go to the grocery store. Now
[42:15] it cost me 90.
[42:17] Somebody did this to me, right? Right?
[42:19] You know, and and there and and I don't
[42:21] even know if sometimes they even blame
[42:22] blame it on one political party or the
[42:24] other. They just care about the
[42:25] aggregate increase in price and they
[42:28] don't understand inflation, when it
[42:30] happened, who did it. It's just it's too
[42:32] expensive and that's driving a lot of
[42:34] the sentiment, right?
[42:35] >> It is too expensive. I mean, honestly,
[42:37] they're right, right? We just had a huge
[42:39] increase cumulatively and that's makes
[42:43] more sense, right? To your point, right?
[42:45] Economic statistics can short short-term
[42:48] economic statistics can be very
[42:50] misleading. Yeah, I throw out all
[42:52] sentiment data really in my um
[42:55] and the way I think about markets.
[42:57] >> And so like in the spending example, you
[42:59] put more weight on the spending data
[43:00] than you would on what people are
[43:01] saying.
[43:02] >> Yeah.
[43:02] >> Yeah.
[43:03] >> Yeah.
[43:03] >> And
[43:04] why do you think people are still
[43:05] spending?
[43:05] >> And and I also don't try
[43:08] Look, I'm looking for these big trends.
[43:10] I don't really care that much about
[43:12] wiggles in data. I think Look, the
[43:15] biggest question I've asked myself
[43:16] statistically for this year by far
[43:19] by far, employment.
[43:22] Right? [clears throat] Because the big
[43:23] concern is AI takes people's jobs and in
[43:27] is that happening and you you you know,
[43:29] you can see some of these hyperscalers
[43:31] cutting back on their employment and
[43:33] you're Oh, is this the beginning of
[43:34] something? You know, I published like
[43:36] some 20-year survey data from Morgan
[43:38] Stanley in in January or borrowed it.
[43:41] And you can see huge changes like
[43:43] secretaries, right? 75% fall in
[43:46] secretarial jobs over a 20-year period.
[43:49] But that's over 20 years.
[43:51] >> Mhm.
[43:51] >> You know, you just don't see employment
[43:54] This was my conclusion, but you never
[43:57] know. We'll see
[43:58] at year-end, but you just don't see big
[44:01] moves in employment cuz our economy is
[44:03] so vibrant, Anthony. That's what's so
[44:05] cool about it. And and I was really
[44:07] persuaded by a futurist who said,
[44:09] "Listen, we threw 40 million new people
[44:12] into the workforce,
[44:14] and you could barely see the the the
[44:16] blip in the employment trends." And that
[44:18] that 40 million was women entering the
[44:20] workforce after World War II.
[44:23] Like you just can't see it. And once I
[44:24] saw that, I'm like there's nothing
[44:26] happening from AI that's going to like
[44:28] dramatically, you know, throw half the
[44:30] workforce out of uh you know,
[44:33] >> What is AI doing to your guys' business?
[44:36] Like where are you guys seeing
[44:37] disruption and and obstacles versus
[44:39] where are you seeing efficiency gains or
[44:41] or advantages in using it?
[44:43] >> I mean it's empowering researchers,
[44:45] right? Just generally. And and that what
[44:47] I laugh about a little bit is uh the
[44:51] knowledge flow within Van Eck from
[44:53] department to department has changed. It
[44:55] used to be always went to legal for your
[44:57] first questions. And now legal is kind
[45:00] of like only if they need to produce the
[45:02] document, right? Because you can do the
[45:04] research yourself. That's true for
[45:08] you know, like we were checking some
[45:10] stuff on our website, which you think
[45:11] would be marketing, but it wasn't
[45:12] marketing. It was someone [laughter]
[45:14] another department like built a tool to
[45:16] kind of like check for stuff on our
[45:17] website. Um and and hours, right? So uh
[45:21] what we're seeing is a lot of
[45:22] productivity. We spend about $750,000
[45:26] a year right now on on Claude. We're
[45:28] moving more from chat to Claude. And um
[45:32] you know, you think of we have 550
[45:34] people. That's not a lot of expense. I
[45:36] could see that going up. I I did that
[45:38] partially because I call 2026 the year
[45:41] of corporate AI, right? Because
[45:43] Anthropic on the on the LLM side, and
[45:46] then, you know, Nvidia last week with
[45:48] its earnings broke out the hyperscaler
[45:50] demand for their for their their
[45:52] hardware from kind of the rest of the
[45:54] world, including uh you know, companies.
[45:57] And so I really think we are providing
[46:00] this extra compute um demand. So, um
[46:04] >> What what I find interesting is
[46:06] >> I went a little back to the markets
[46:07] there, but I was that helpful? We We
[46:09] published our use of tokens on our on
[46:11] our website.
[46:12] >> I know you guys did. I find it pretty
[46:13] cool. And and one of the things I'm
[46:15] seeing across the industry, at least are
[46:16] seeing inside of our companies, like you
[46:17] take the CFO Silvia product, right? Um
[46:19] it was like roll this out to everyone,
[46:21] get everyone using as many tokens as
[46:22] possible. Companies had token
[46:24] leaderboards, you know, all this kind of
[46:25] crazy stuff.
[46:27] And then all of a sudden everyone
[46:27] realized, wait a minute.
[46:28] >> Publish it for Silvia?
[46:29] >> Uh we do not know. But um
[46:31] >> You should.
[46:32] >> No, it it's uh
[46:33] >> the transparency.
[46:34] >> Uh the the token usage uh exploded, and
[46:38] then we have been very successful in
[46:40] cutting it. And I think that this is
[46:42] >> That's the dynamic, right? Something
[46:43] costs money, you figure how you use it.
[46:45] >> Yeah, and and industry-wide, I talked to
[46:47] friends who run private companies,
[46:48] friends who run public companies,
[46:49] investment firms, etc.
[46:51] Everyone 12 months ago, 18 months ago,
[46:54] told their teams, go use AI. Go You have
[46:57] to start using this stuff. Become, you
[46:59] know, AI native. Go go and figure out
[47:01] how to use these tools. Sometimes they
[47:02] did trainings internally, they built
[47:04] tools, like whatever they could do to
[47:05] enhance the productivity of their teams,
[47:07] they did.
[47:09] Then they started to get the bill.
[47:10] And they said, wait a minute. I like the
[47:12] productivity. I don't like the bill. And
[47:14] so, over the last 6 months or so, what I
[47:16] see a lot of teams doing is they're
[47:17] saying, how do we keep as much
[47:19] productivity gain as we can, but I want
[47:21] this bill to come down. And so, what
[47:23] people started to realize, just like all
[47:24] new technologies, is like, hey, every
[47:26] time we refresh this page, it was
[47:28] hitting the model.
[47:29] >> Right.
[47:30] >> Let's stop doing that. And you start to
[47:32] see these bills come down. And so, it
[47:33] would be fascinating inside of uh like
[47:36] an Anthropic
[47:37] >> Yeah.
[47:37] >> the per query
[47:39] >> Yeah.
[47:40] >> token usage. My guess is probably coming
[47:42] down. Some of it's cuz things they're
[47:43] doing, some of it's because of the way
[47:45] the users are are uh using their tools.
[47:47] >> Yeah.
[47:48] >> But the adoption of AI is exploding
[47:50] higher. So, you get this net gain for a
[47:52] company like Anthropic, but actually the
[47:54] individual companies are trying to
[47:56] figure out, okay, how do I get this bill
[47:57] down, but still get the efficiency gain?
[47:59] >> Yeah.
[47:59] >> And so, that I think is maybe one of the
[48:02] most bullish components of AI is it's
[48:04] not just, oh, we have existing customers
[48:06] and they're using AI more.
[48:07] >> Mhm.
[48:08] >> What they're doing is they're actually
[48:09] trying to cut back their bills, yet your
[48:11] business is adding $10 billion of
[48:12] revenue a month.
[48:13] >> Right.
[48:14] >> Right. I mean, that is there may not be
[48:15] a more bullish sign than that.
[48:17] >> Yep. Yeah, I mean, when we showed the
[48:18] data, um
[48:20] an investment colleague said, "Well,
[48:22] what's VanEck's usage?" And I said, "Uh
[48:23] let's share it." Uh I was surprised,
[48:26] right? Our So,
[48:27] couple of things. Open AI is less
[48:29] transparent about their token usage for
[48:33] some reason than Claude. And Claude is
[48:35] supposed to have the compute problem,
[48:36] right?
[48:37] >> Mhm.
[48:37] >> But like, we could only get estimated
[48:39] token usage uh from Open AI, whereas
[48:41] Claude would actually publish it was
[48:44] like order of magnitude higher. It's
[48:46] like millions and millions of tokens a
[48:48] day. Like, you know, anyway, that we had
[48:50] to guess with Open AI.
[48:52] Uh but our overall token usage on Claude
[48:54] had only sort of doubled in a 4-month
[48:56] period, which didn't feel right, but
[48:59] it's to your point, people are using it
[49:00] more efficiency efficiently.
[49:02] >> Mhm.
[49:03] >> And the IT department, like 9 months was
[49:05] completely like literally I I heard that
[49:08] people worried about their jobs. These
[49:10] people are are provided They're like in
[49:12] enhanced
[49:13] >> Well, they're enhanced you you having
[49:15] the IT background like makes you so much
[49:19] more productive, right? I mean, vibe
[49:21] coding is fun, but, you know, having
[49:23] access to the underlying data and being
[49:25] able to optimize use of AI is way
[49:27] better.
[49:27] >> Mhm.
[49:28] >> Now, um
[49:29] what will it take for the AI to make the
[49:32] investment decisions?
[49:34] Right now, everyone is using it for
[49:35] research. They're using it for things
[49:37] around.
[49:38] >> Yeah.
[49:39] >> When will you feel comfortable giving
[49:41] your money to an AI? Or when will VanEck
[49:43] offer some sort of product where the AI
[49:46] makes 100% of the investment decisions?
[49:48] >> So, I mean, we use AI already, right? If
[49:51] you think that all of actively managed
[49:53] funds
[49:54] and all the analysts are AI empowered,
[49:57] right?
[49:58] So, that's already happening. We have
[50:01] We have an ETF that
[50:02] sorts huge amounts of data using AI.
[50:06] And I guess that's fully AI in in a
[50:09] sense. It's it's processing social media
[50:12] data
[50:13] like likes and dislikes and comments on
[50:15] your tweets and that kind of stuff if if
[50:17] you talk about stocks.
[50:19] So, but I don't
[50:21] I'll tell you what the difficulty is.
[50:23] Maybe AI is really good
[50:26] it presumes a lot of trading that's
[50:29] better sitting within a Citadel or a
[50:31] Jane Street than within an ETF because
[50:34] it the cost of transacting if you're if
[50:37] you're not really good at it is is is
[50:39] exorbitant. And then the last component,
[50:42] Anthony, that I think really delays it
[50:43] is do you really trust an AI not to go
[50:46] off the rails?
[50:47] >> Mhm.
[50:48] >> And I it it might We might be okay, but
[50:51] if we to persuade a customer like this
[50:54] is a really smart AI as opposed to all
[50:56] the other ones,
[50:57] >> Mhm.
[50:58] >> that's a tough sales proposition.
[51:00] >> You one of your big bets is India. One
[51:02] of my big thesis over the next 10 years
[51:04] is that the people actually trust the AI
[51:06] more than the humans. And there will be
[51:10] some tipping point. I don't know when it
[51:11] will happen or what the thing will be.
[51:13] But
[51:14] we have people who reach out to us from
[51:16] the CFO Silvia user base. And they ask
[51:18] us all the time, can I just give Silvia
[51:19] my money? Now, we don't do that, right?
[51:21] For a whole bunch of different reasons.
[51:23] But what they're essentially saying is
[51:26] she's superhuman intelligence, she's
[51:27] smart. I already trust her to give me
[51:29] insights or information.
[51:30] >> Yeah.
[51:31] >> What really is happening is I query, she
[51:33] gives me information, I'm then the
[51:36] bottleneck, and I have to go into the
[51:38] portfolio and make a decision.
[51:39] But she's already telling me the thing
[51:41] that she thinks is a good idea, bad
[51:43] idea, or you know, the pros, cons,
[51:44] whatever.
[51:45] >> Yeah.
[51:45] >> Why don't I just remove the human from
[51:47] the loop? Why don't I just let her do
[51:48] it? It's fascinating because when I've
[51:50] always thought of AI, I thought of, you
[51:52] know, high frequency trading and, you
[51:54] know, those types of things where it's
[51:55] almost like humans can't do it.
[51:57] What these people seem to be saying is,
[51:59] I actually just want to outsource the
[52:01] decision-making.
[52:03] And that to me is that's not
[52:04] rules-based. That is, you know, kind of
[52:06] this almost black box to a degree.
[52:09] I don't know if I'd be ready to do that
[52:11] yet right now.
[52:12] >> I I I'd I'd love to ask you more
[52:14] questions. Like, if I
[52:16] put my data into Sylvia, right, and I
[52:18] had two brokerage accounts, but 80% of
[52:21] my net worth was in apartments I'm I
[52:25] rent apartments. Like, whatever that was
[52:27] like my culturally, my parents said,
[52:29] "Put your money in real estate." I like
[52:31] to walk around and collect the rent from
[52:33] people and kick them out if they'll pay
[52:35] I don't I don't know who likes to do
[52:36] that, but anyway.
[52:38] Is Sylvia going to tell them that's a
[52:40] that you're you have too much risk in
[52:42] New York real estate? Let's say you were
[52:43] doing it here. And then what? Move?
[52:46] >> Well, so
[52:46] >> Like, or or I mean, reduce that part of
[52:48] your portfolio? And you're saying people
[52:50] are like, "Yeah, that's right. I
[52:51] actually don't really care if I own any
[52:53] apartments." I don't really believe
[52:54] that.
[52:55] >> Yeah, so I think that there's two
[52:55] components. One is it will definitely
[52:57] say, "Hey, you got heavy concentration
[52:59] here. You're very exposed to interest
[53:00] rates." Or, you know, what whatever the
[53:01] thing is.
[53:03] Um you can explain, you know, "I'm not
[53:05] going to change it. Disregard this."
[53:07] Right? So, like that there's a back and
[53:08] forth, no different than a financial
[53:09] advisor. Right? Or maybe a CFO or an
[53:12] accountant.
[53:12] >> my point. They're not going to totally
[53:14] give or take.
[53:14] >> Right. I don't think it's just like,
[53:16] "Here's all of my money, all of my
[53:17] assets. Like, do whatever you want."
[53:19] What I think is more interesting is
[53:20] somebody may say, "You know, actually
[53:22] what I want is I want to
[53:25] um
[53:26] give
[53:27] 100 grand Yeah. to this. And no
[53:29] different than an actively managed ETF,
[53:31] I want maybe exposure to
[53:34] um the AI trade.
[53:36] Go find, you know, uh certain types of
[53:38] stocks that are very asymmetric, that
[53:41] could double every year in the AI space
[53:43] or whatever.
[53:44] >> Yeah.
[53:44] >> That to me, it's almost like a
[53:45] self-contained, you know, uh AI-driven
[53:49] type strategy.
[53:51] It's a blending, right? It's kind of
[53:52] rules-based, it's kind of not, it's got
[53:54] the LLM.
[53:55] >> mainly human because that the human is
[53:58] saying
[53:59] I've made the decision, you go execute.
[54:01] I'm totally with you. I just get the
[54:04] agent to execute it, rebalance it,
[54:06] whatever, or reminds you that maybe you
[54:07] want to rebalance. But that
[54:09] [clears throat]
[54:10] the gate of the kill switch is still
[54:12] with the human is how
[54:13] >> Yeah, I I do think the I do think the
[54:14] kill switch and the ability to shut off
[54:16] obviously will will always rank the
[54:17] human. The other thing I think is really
[54:19] interesting is um uh
[54:21] you've probably seen these apps or these
[54:23] tools where uh people scroll a lot on
[54:25] the internet, right? You know, and so
[54:26] forth.
[54:26] >> Yeah, yeah, and they track it.
[54:27] >> And and so you basically though you can
[54:29] say like, "Hey, only let me do it for 1
[54:30] hour." And then once you hit the 1 hour,
[54:32] you literally can't log in to the
[54:33] services until the next day or you know,
[54:35] you maybe hit pay five bucks or
[54:36] something, right?
[54:37] Uh I do think that there's something
[54:39] about investing where like uh Stanley
[54:42] Druckenmiller always tells the famous
[54:43] story of like he knew in 2000
[54:46] but he like couldn't sit on the
[54:47] sidelines and he bought at the top and
[54:48] lost like $2 billion in you know, 6
[54:50] weeks or something.
[54:51] >> Yeah.
[54:51] >> And he's like, you know, somebody asked
[54:52] him what he learned. He goes, "I didn't
[54:53] learn anything. I knew I shouldn't have
[54:54] done it."
[54:55] >> [laughter]
[54:55] >> He said, "But I did it anyways, right?
[54:58] He's like, I'm not an idiot. I knew not
[54:59] to do that and I still did it." And so I
[55:02] do think that's where AI becomes really
[55:03] interesting of like uh you know, you go
[55:06] to do something and it says like, "Are
[55:07] you sure? Are you really sure? Are you
[55:09] 100% positive you want to do this? Are
[55:11] you not, you know, panicking and chasing
[55:12] momentum?"
[55:13] It's almost like a a
[55:15] a you know, co-pilot's probably overused
[55:16] but a coach or some sort of, you know,
[55:18] sounding board that I could see being
[55:19] viable.
[55:20] >> of the coolest things I've learned is
[55:22] behavioral economics, right? Or just how
[55:24] we are built built as humans, our
[55:26] decision-making processes are biased to
[55:29] to kind of make the same kinds of
[55:31] mistakes. And the what you're talking
[55:33] about is I actually talked about this
[55:34] with my summer interns is like you need
[55:37] rules or tricks to kind of cut combat
[55:40] some of your you know kind of biases.
[55:42] The the bias that I care about the most
[55:44] is recency bias where everyone just
[55:46] thinks oh this is the trend and that's
[55:48] going to continue. I'm like no, you
[55:50] know, history and markets can be very
[55:52] discontinuous. But but but like when you
[55:55] think about the whole retirement savings
[55:57] system has been driven by the ability of
[56:01] people just to say I'm putting my money
[56:02] in a 401K and the default right is the
[56:06] target date fund. That is so good for
[56:08] people because they used to always put
[56:10] their money in cash.
[56:11] >> Mhm.
[56:11] >> The amount of wealth that that trick or
[56:13] tool has generated is probably enormous,
[56:18] you know, so anyway so I I think you're
[56:20] right. AI can maybe be your buddy or
[56:23] your trick or tool and and apply that in
[56:26] more places
[56:28] but that's also the role that financial
[56:29] advisors play.
[56:30] >> Yeah, I think that that that makes
[56:32] sense. We we've known each other now for
[56:33] a while. I never asked you this question
[56:35] so I'm very interested in your answer
[56:37] but there's a quote on your website. It
[56:39] says my father built this firm on the
[56:40] idea that the world is constantly
[56:42] changing and that by understanding those
[56:44] shifts early you could create real
[56:45] opportunity for clients. That belief
[56:47] still guides us today. And when you
[56:50] first started at Van Eck, he had pretty
[56:52] much made two major bets from my
[56:53] understanding. There was kind of the
[56:54] international equities and then there
[56:56] was gold and I think that he probably a
[56:58] lot of people did not agree on the gold
[57:00] thing at first but it obviously was a a
[57:01] very smart thing for them to do.
[57:04] Um, what do you think your father would
[57:05] say now to you or or how would he look
[57:08] at the firm? I mean, you know, this
[57:09] thing has grown to 200 billion in
[57:10] assets. You've completely diversified
[57:12] away from gold although you still got
[57:13] have a still a big gold business. Um,
[57:17] and this quote about, you know, just
[57:18] constantly staying on top of these
[57:20] shifts, you guys have done a pretty good
[57:22] job of. Yeah, I mean look these 10-year
[57:24] shifts are I think very profound and you
[57:27] look how they can distort like the US
[57:29] equity market the AI trade. But they're
[57:32] not, you know, it's not magic. And, you
[57:34] know, we we leaned into emerging markets
[57:36] as well. A lot of people did, right?
[57:38] They saw the rise of China. We're not
[57:40] alone in seeing the rise of India. Don't
[57:42] mean to be alone. Like, we're not
[57:43] looking to be the only people out there,
[57:45] right? Uh so, my answer your question,
[57:48] my dad, I think he'd totally be all in
[57:50] on India. Um he he was Well, no, I mean,
[57:53] he's just was he was a globalist, right?
[57:55] His parents were were European, so he
[57:57] always thought of the world as a globe.
[58:00] And, the commodities bias, too, Anthony,
[58:03] you know, I realize has has affected me,
[58:04] too, cuz all those markets are always
[58:06] global, right? Um so, I think India
[58:09] definitely um AI, I don't know.
[58:12] We never really talked technology a lot.
[58:14] And, the way I look at the world now,
[58:16] technology really is a is an important
[58:19] trend for industries. Uh and, he would
[58:22] definitely be worried about government
[58:23] spending. Yeah, you know, he would
[58:25] definitely be worried about that.
[58:27] >> like that is like uh seared into the
[58:28] family lineage, is that government
[58:30] spending is a problem.
[58:31] >> Well, but it isn't all the time, right?
[58:33] It's not all the time. But, uh we we
[58:36] went nuts relative to other countries
[58:38] during COVID. We went berserk. And, um
[58:41] and I think there were no consequences
[58:43] to our markets. And, that's why we have
[58:46] continued to be really irresponsible.
[58:48] And, we'll see um if we get there.
[58:51] >> All right. Where can we send people to
[58:52] find out more about VanEck?
[58:54] >> Uh vaneck.com, Jan VanEck number three
[58:57] on Twitter, and then LinkedIn, you know,
[58:59] try to share my favorite pods.
[59:01] >> up the social media a little bit.
[59:03] >> bit.
[59:03] >> Yeah, you're doing a pretty good job.
[59:05] >> right. We'll do it again in the future.
[59:06] >> Thanks.