The Money Gains Podcast

The Stock Market Will Crash: Former Credit Suisse Head Reveals Why (Rich McDonald)

• The Money Gains Podcast • Episode 158

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Everything is hitting record-highs - is this a warning sign? 

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In this episode of the Money Gains Podcast we welcome Rich from The Art of Investing to the show. 

Rich brings over two decades of finance experience to talk about a rare moment where seemingly everything is at all-time highs simultaneously. 

We talk about current market risks and opportunities, practical strategies to protect your portfolio and why the S&P 500's dominance may be creating dangerous concentration risk for everyday investors.

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✅ Why holding 20% cash at 4-5% interest is now a strategic investment decision, not a mistake

✅ How to conduct the "fire drill" portfolio stress test - applying realistic haircuts to assess if you can stomach a proper correction

✅ Why the S&P 500 trading at 24x earnings with 50% in the top 10 stocks means you're not actually diversified

✅ How to spot market tops - when your vicar, taxi driver, or grandmother starts discussing asset prices, it's time to reduce risk

✅ Why leverage and leveraged ETFs will destroy your wealth and what to do instead

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DISCLAIMER:
This video is meant for educational purposes and should not be considered financial advice. When you invest your capital is at risk. Past performance is not a guarantee of future success.

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Speaker 1:

Welcome back to the Money Gains podcast. Today we're gonna unpack exactly what is going on in the stock market with a very good friend of mine, Rich. Rich, welcome back to the show, man.

Speaker:

Great to be back, Sammy. How are you?

Speaker 1:

Mate, I'm great. Uh we had a lot of fun on Friday as well. I was on your show.

Speaker:

That's right. Yeah, we welcomed you onto the TV show in the early morning. Thank you for uh for getting up a little bit earlier than you're used to. That was a lot.

Speaker 1:

Yeah. No, no, just because of the like day I had before. I was in the studio all day and I didn't get home till late, and then I was up like whether like 5 a.m. wake up and I should have probably I know I know.

Speaker:

I can hear the violins out there already. They're they're singing, they're singing from the rooftops. But yeah, you were good. It's it's almost like you'd done it before.

Speaker 1:

It was weird being on the other side.

Speaker:

What was it like live rather than uh than edited by the great Danielle?

Speaker 1:

Yeah. Danielle makes me look way better. I've not watched it back yet, though. So I know.

Speaker:

We've already done three cuts in this episode already. I don't know if anyone can tell.

Speaker 1:

Yeah, so yeah, you wouldn't know. Yeah, there you go. Um, but for those that don't know you, a little 411 into your history and why you're very well placed to be able to have this conversation that we're gonna have today.

Speaker:

Yeah, so I um I guess my first love was 400 meter hurdling. I uh I was an athlete. Uh I did the Commonwealth Games back in 2002, showing my age. Um, but I really wanted to get into the stock market after that. So I joined Credit Suisse. My first day work experience Credit Suisse was the day before 9-11, and um had the the startling realization of uh uh kind of welcome to the real world watching the second plane go into the Twin Towers on the trading floor and the the subsequent gasps and panic that ensued. Um and then I uh so yeah, that was that was the the first kind of intro into how wild things can get. And then uh yeah, joined Credit Suisse on the graduate scheme, was there for three years, then moved to a hedge fund called Brevin Howard. Now, Brevin were the second biggest hedge fund in Europe. What I didn't know that was about to happen the following year was the start of the great financial crisis. And what a place to be to experience that because we had such great economists, great thinkers, and great traders and portfolio managers. So to experience, I was there for three years, right through to 2010. And to experience that with those guys was um it was a it was a very bonding moment because everybody's gone through it together. But I had a lot of friends at Lehman's, um, you know, spoke to them the days before it happened, and they still believed in Dick Food and said, no, we're we're fine, we're gonna be fine. So I think coming out of that was was a real feeling like you'd almost done a PhD in finance. Uh so then I went to run the Emerging Markets Department at Credit Suisse, so that was equity, South Africa, Turkey, Russia. So then I moved from finance to also geopolitics, and you got that real um kind of feel for macro, for interest rates, for currencies. And uh yeah, from 2020 I decided to do my own thing and got into teaching. So I now teach investing, I do the morning show, trade live with IG, and uh and also now a podcast, the podcast The Art of Investing, which is teaching people. It's not all about the S P 500. And you're all world trackers, there are alternatives, Sammy.

Speaker 1:

Well, we're gonna talk about a few of those today, but some other bits as well. And uh, I think it's really interesting because you are so well like you've seen the world, you've seen some of the biggest moments, you were on the floors, you were trading real money trying to keep your clients afloat during some of the most craziest times in history. And then equally as well, you've spent nearly two decades in this, like you get this, and so it was super interesting because last time we were on. If anybody wants to go back and and watch that, we were on the show in February the 26th. February the 28th was the all-time high in the SP 500, and we had a at the time um that's since been beaten. Um, however, you predicted a 30% drop in the SP 500 at that time. Now, a few days later we were messaging back and forth because we were like, is this it? Is this it? And that didn't actually happen until April. So we were a little bit off, but there was a small decline throughout that period. Eventually we were 23% off. So not bad.

Speaker:

Yeah. Yeah. And it's funny, you you kind of, you know, you you pull these numbers out of somewhere. So the the 30%, you know, I I'm um I was happy with at the time, but I must admit I was starting to buy it down 20% and starting to go in uh, you know, to a point where I remember that Sunday evening waking up, seeing the futures down again on the Monday morning. And that was a really interesting because I had to go in and do the TV show. And of course, you've got your own positions, you've got your own investments, but you're also you understand that the audience out there is really hurting. Like, you know, it was a proper crash on that Friday stroke, Sunday night, Monday. So um, yeah, we got it. We were a little bit early, but it's better to give people a chance to uh to take some of their holdings down rather than uh be late to it.

Speaker 1:

Yeah, but if you look at it, we weren't early as such because it had it had some meteoric rises. It was due a correction of some sort at that point. Yeah. And we just didn't know how big it was going to be. But it was so overvalued at that point that it it was only a matter of time. So what was the big catalyst?

Speaker:

The big catalyst then, and well, I mean, it it was we we were overbought, right? That was the February the 28th catalyst, and we we started getting into problems around interest rates, concern about the jobs market. But of course, it was the tariffs of April um 11th that were really uh devastating. Um Liberation Day. Liberation Day he certainly liberated people of uh their savings and their investments. I remember watching it at home and the um Goldman Sachs put out straight away that it was only a 10% tariff across the board, and the market popped 50 points, the SP 500. And um they got it wrong. There, that that was uh something else. There was a baseline 10%. And of course, that at that point, you already sold into it because as soon as he got his silly board up with all the numbers written on it, it's like, oh, what is going on here? There are some 60s and 50s on there. Like this this is not good.

Speaker 1:

And it was like China ended up being like in the over 100% at one point. Yeah.

Speaker:

Yeah. And you know, we've we've obviously come to know the term tackle. Um, Trump always chickens out. So the so it got it isn't finance wonderful. Isn't it so incredible that you can watch things unfold in front of you and you can express a view. If you didn't believe Trump, if you thought he was bluffing, you could express that view through buying um or uh selling volatility or you know, whatever way that you wanted to, um, selling the dollar. If you really don't believe that that what he's doing is good for America longer term, you can bet against the dollar. And that's what a lot of people have done by buying gold. And of course, gold has probably been the best um investment since we were since we were last on.

Speaker 1:

I've definitely got a question about that today, because we spoke about that the last time and it's just since gone like meteoric. But I'm gonna come back to that because uh there was a quite a pivotal moment where things started to turn around, which is generally usually what happens with a crash. You know, there's they say that the 30 best performing stock market days I think is something like is it's some uh don't quote me on this, but a large portion of them come immediately after the drop, and that's what happened, right?

Speaker:

That's right. And we were really lucky on the program that morning. A couple of things had happened the night before. And I said to my co-presenter, this is it. This is the day it either he has to backtrack or we're in serious trouble. And we managed to put a trade on that day which had a hundred times payoff. Wow. It was an options trade for the market to be up six percent. Six. And in the end, I think it was up six and a half. Yeah. And it paid a hundred times payoff, and a few of the viewers actually put it on. And it was um it was magical just to get that kind of on every every now and again is a hundred times isn't bad. I I took money at fifty times. So I I chickened out myself.

Speaker 1:

Yeah, well, you know, I think anyone would. You start seeing those types of returns, and you're like, well, you know, you might take some off the table. Um but since then we've kind of had what could be only described as a massive bounce back and then some aggressive increases in returns over that time. Um earnings in the tech sector keep breaking records. You know, we've seen huge earnings again this year across the board. There are again some chatter around AI and bubbles that it's creating within the tech sector, but equally as well across the market. What's your views on that right now? And how are you feeling?

Speaker:

Well, it was it was interesting. So BBC did a um a spread about it at the weekend. The Times, it was on the front of their business section. Is AI a bubble? And I got a phone call on Saturday night. Can you come on LBC with Matthew Wright tomorrow morning? Oh, cool. Is AI um the bubble about to burst? And if everybody's asking the question, truth is it's probably not. But I've got a term for you today. Okay. Do you know what we're in at the moment? Now, everybody's heard of irrational exuberance. I do know where that was from? No. First coined by Alan Greenspan back in 1997. Yeah. Before he was talking about the market was going through this exuberance and it was irrational. Okay. So he was basically predicting the dot-com boom three years before it happened. Way too early. Right? But nobody really knows what a um UK Chancellor called the 1929 Wall Street uh boom before it crashed. And that was an orgy of speculation. And Sammy, we are going through one of the biggest orgies that you will ever see in financial markets. This is new to me. We've got NASDAQ all-time highs, the AI stocks going crazy, right? We've got gold, astronomical, silver. We had Bitcoin at the highs last week, Ethereum. Um, we've got even treasury, treasuries are rallying, house prices are at highs. You can't have that. You can't have it all together like that. It's too easy. And when it's too easy, we know what happens next.

Speaker 1:

We do. We do. Is there there's an argument as well of like a lot of once interest rates come down, then these guys aren't getting the same rates from their savings accounts and their bonds. And so do they then put their capital in and that drives a rally even further?

Speaker:

Yeah. Well, there's also a reversal of that though, because there's a chance that interest rate policy is actually impotent. Yes. Right? And because it hasn't worked. You know, the Fed tried to stop uh inflation through increasing interest rates, and uh nobody can believe that it it hasn't actually slowed the economy. Unemployment rate should be five percent by now. Right? Now maybe we're in a point where the wealthiest 10% of the American population are um how would you say responsible for 50% of the consumption.

Speaker 1:

Yep.

Speaker:

Okay. Which would make sense. Now that is, well, it was only 25% 10 years ago. So we've seen this huge explosion of the wealth, and the wealth gap is extending. And that means the wealthy don't necessarily have debt. Right? So that means that what they're actually been enjoying, they've been enjoying additional income on their savings that didn't happen back when interest rates were at zero. When interest rates were at zero, we we were we were dating a girl called Tina. Right? Now we're dating a girl called Tara. Okay. Okay. We've moved. And this isn't anything to do with the orgy of speculation.

Speaker 1:

Okay, I was wondering if we're uh yeah.

Speaker:

So Tina means there is no alternative.

Speaker 1:

Okay.

Speaker:

Interest rates were zero, right? That means you could only really invest in stocks, and that's when everybody did. And everybody got used to this SP 500 tracker. Boom, every month, there you go. However, now Tara is looking a lot more attractive. There are real alternatives. That is real alternatives. Because interest rates up to four and a half percent. You've got um, you know, some corporate bonds are paying seven, which is decent. And I'm talking about corporate bonds of real companies. You know, the likes of Heathrow Airport, you could get a decent return on. Um UK corporate bonds that are sort of household names. But but there's also alternatives from other stock markets across the world. It's not all about the S P 500. And when you see your question was originally, are we in an AI bubble? Some of the um valuations that we're on at the moment. So and when I say valuation, I'm talking about what multiple of this year's profits does it cost to buy a share of the company. Okay, so you can think about that in terms of years maybe. Yeah. So at the moment it'll take me 30 years for Microsoft to pay me my money back, right? Now I'll still have shares at the end of it. And of course, everybody wants to grow profits, but there is a small chance, especially with the likes of NVIDIA, that you're at something called peak margins, which could be peak profits, which means that the multiples should reflect that. And you shouldn't be paying peak multiples at the moment. Now that's what we're doing for the S P 500. We're paying 24 times, right? 24 years worth of this year's earnings to buy the SP 500 at the moment.

Speaker 1:

We broke that down on the first one. So like if you put the pound in today, it's got to multiply by 24 times essentially to be that same pound, right?

Speaker:

Exactly. Yeah. If you were making one pound of earnings, then you're paying 24 times that to buy uh a share of those earnings today. So you're paying a share price of 24 pounds, exactly. Now for the FTSE 100, you're only paying 15 times.

unknown:

Right?

Speaker:

Now it doesn't have the AI bubble stocks. Less sexy. Much less sexy. Right. If you go into an orgy of speculation in the FTSE, then you know it's it's not that great.

Speaker 1:

I mean, it would be quite nice, wouldn't it, in the UK to have something like that for once. But uh we're very old money corporate these are global corporations, but they've been around for donkeys and they move slow.

Speaker:

They move slow. And then you look at maybe the the small caps in the UK. Can Rachel Reeves come out with some incredible policies in this budget that actually make UK small caps attractive? Because this is their second longest period of underperformance in 40 years.

Speaker 1:

Aaron Powell It is. They but uh Andrew Kay came on and spoke about this in 1952 to 1919, I believe. It was 16% plus per year. And so like they and they're crying out for CAS injections. So I mean it would be incredible if we did the he had his idea. It's cool, isn't it? Genius. The £5,000 per child, and it just goes into small cap and small and medium. I think it'd be very cool move to like basically stimulate and stock market and in an economy, which is Andrew Krieg for Chancellor. I I would vote. I would. Would you vote? Absolutely. Yeah. We'll tell him that.

Speaker:

Yeah. He'll like that one. He'll be listening.

Speaker 1:

Yeah. You know what? I don't know if he would do it. And I wish I wish he did. And the comments on that video are literally like the hundreds are like, why is this guy not Chancellor? And I'm like, Yeah, he just sees it logically, which is fantastic. But yeah, going back to this, it's like there is opportunities in other areas, right?

Speaker:

There are, because you you asked me, is AI a bubble? And there AI might actually not be a bubble because we know it is absolutely huge. But what we have got is a capex bubble, right? And we've got four bubbles going on at the moment.

Speaker 1:

And what's the capex for an everyday person?

Speaker:

Uh so sorry, capital expenditure. So that's when you build factories and you build things for the long term as part of those big investment plans into growth in the future. Trevor Burrus, Jr. So investment into your business for growth. Yeah. Exactly. Okay. And um so obviously to build a data center and to pack it out with all these incredible high-performance chips, that's capex. Did you see the open AI? This is what I was coming around to.

Speaker 1:

That blew my mind. Yeah. And the investment from the other companies.

Speaker:

So I I've got another term for you, if you don't mind. Is this an 18-rated podcast? It is now. It's gonna be by the end of this. So they're on a circular jerk. And that is what is going on with this. By all means cut that out if you like. You cannot have a company paying Okay, so sorry, NVIDIA has paid OpenAI $100 billion to take a stake in OpenAI. OpenAI then has promised to use that $100 billion and more to buy NVIDIA chips. Subsequently, they have then done a deal with AMD, which is along the same kind of lines, that they'll take a 10% stake in, or they've got the option to take a 10% take in AMD. And then just before we came in here, they announced another one, Broadcom. They've got a partnership now with Broadcom, hot off the press.

Speaker 1:

You're kidding. Oh wow.

Speaker:

Broadcom's up eight percent. Trevor Burrus, Jr.

Speaker 1:

And that's to build a data center when their revenues and this investment doesn't even cover that, right? As well, as what I was reading. Yeah, they've got no cash. No cash, and they've got to build all this money. And so the money's coming from these companies to fund this data center with their chips, and that's the circular jerk. That was the number that I'm glad you said it.

Speaker:

It's just it's mind-blowing. Aaron Powell And and these are the red flags, right? There are three red flags recently that have just made me sit back and go, all right, it's time to reduce risk. It's not time to take leverage, right? Because of course leverage exacerbates your gains, right? That's when you get the real money gain, Sammy. But it also exacerbates your losses on the downside. And that's what I want people to avoid at the moment.

Speaker 1:

Let's just quickly discuss one point you said there, because we have a lot of beginners which listen to this. So leverage as a real small example, let's say you buy a hundred pounds of Apple stock and you leverage it by five times, what happens in that?

Speaker:

It's a mortgage. Yeah. Whenever you buy a house, you're you're leveraging up. Right. If you use a mortgage, you know, probably unlike yourself. So um, yeah, if if I put down a deposit of um £50,000 in a house, and then I get £450,000 loan to buy the house that costs £500,000, then I've leveraged nine to one, ten to one. Um so that's you can also do that in stocks. So you put down that deposit, but you get um maybe five times the size of the position. And it's wild, right? It can go very well or very wrong. It can go, yeah, it can go very wrong indeed. And um banks do it, you know. Banks do it, but there are strict regulations, and you would hope that some hedge fund managers have got experience enough to know when to be careful, but sometimes not.

Speaker 1:

And if it drops, it can liquidate your position and some That's right.

Speaker:

Yeah. Yeah. And you're and you're wiped out. So you don't just lose 10% of your capital, you lose all your capital. Now, there are times when this can be a good thing, right? You've you've definitely got to be experienced and you've got to be beyond a beginner investor to do that kind of thing. But there are times when it can be really, really useful, right? And the the um uh subsequent from April 11th was exactly that opportunity that you see things and you know that it's just a panic. And as soon as he backtracked, then that's the kind of time. Usually it's when volatility has gone up through 25 and it's maybe trading at 35 or 40, right? So that's the VIX index, if you want to Google it. The VIX index is a measure of how scared we all are. So if it's gone whoosh all the way up to 40, everybody's really scared at that moment, and the market's moving by two and a half percent a day on average. If it starts to come down and you've got subsequent good news, then that's the kind of time that you've got some real, real opportunities. Doesn't come around very often, but COVID was one of them. Yeah. As soon as the central bank said we'll do what it will, whatever it takes, that was one of them. Oh God, that was such a good yeah. Incredible opportunities. Such a good yeah, man. But at these points when everybody's already made the money and it's so easy to make money right now, Sammy. I mean, it's it's incredible. You you look at your pension and you probably can't believe what number it says. Well, I'll give you uh a drill to do, a little fire test.

Speaker 2:

Okay.

Speaker:

I c I came out of my uh apartment the other day and there's a a sixth-form college just down the road and it's boarding. And the poor beggars, 5 45 in the morning, they were all lined up and it the fire alarm was going off. And so I saw one of the teachers, I said, Oh, is it is everything okay? Is there a fire alarm? She went, Oh no, we're just doing a drill. 5.45, get a bunch of students out of bed. That was I thought that was harsh.

Speaker 1:

But we're gonna do a fire drill right now, so I was laughing because that actually happened to me once, but I did bored for a bit. And uh yeah, they I remember well, like 4 a.m. they did it to us, I think. Ooh, yeah, it was like middle of the night territory stuff.

Speaker:

Was anyone put in any interesting situations?

Speaker 1:

No, I was 10, so it was a bit different.

Speaker:

Eating sweets under the uh under the doobie. Yeah. Um so yeah, the fire drill is write down everything you have invested in at the moment, right? And you're gonna have three categories low risk, medium risk, high risk. Now, low risk, what's in that? It's the defensive stocks, right? So if you own tobacco's utilities, telcos, or maybe the alcohol beverages, right? And water companies, Tesco, stuff like that. If you own that stuff, that goes into low category. Medium category is SP 500, it is um the NICE, excuse me, Japanese NICKI, um, you know, anything that generally isn't sex, drugs, rock and roll. And then we go on to the high risk stuff, which is your AI names, it's your NVIDIA, Palantirs, your Teslas, Teslas. Oh well, that's off that's in a different chart. And um and crypto, right? And I want you to apply a discount to each of them. So I want you to check what would happen if we do have some kind of correction stroke crash. Now we talked about 30% last time, so let's let's stick with that. Because if we drop 30% here, that's back down to where we were on April the 11th. So we're going back six months.

Speaker 1:

Yeah, I was just about to say it's not a huge like if you look back from then, even on that day, many would argue even at that point that the S ⁇ P 500's valuations were still very high.

Speaker:

It's it's just not unimaginable. Um by no means I'm not sitting here this time saying I think it's going to drop 30%, because I don't think that. But I do think we're due a correction.

Speaker 1:

We are due a correction, yeah, for sure. And whether that comes by the time this podcast comes out on Wednesday, or or if it's in a few weeks' time, it's only a matter of time. Well, 54 days was our was our 54 days was our last one, but corrections are now happening on average, it was 1.26 years. It's now down to 1.18. Um, so it's that's 10% or more, and 20% or more is 3.2 years. So it's just a natural part of the cycle and actually very healthy. Um but you mentioned something I don't want to skirt round it because you mentioned about leverage, and leverage is a big risk at the moment. So you wouldn't be taking on risk right now in this environment. What what what what did you mean by that? Just so we can finish and round off that point.

Speaker:

Yes, certainly.

Speaker 1:

And then you're gonna give us your prediction.

Speaker:

Okay, so you're greedy now. Um so if I I can invest, let's take an ISA, for example, right? And let's say somebody has 60,000 pounds in their ISA. You can invest 60,000 pounds, right? Now that's fine, there's no leverage involved there. However, there's a new product in the US and it's become really, really popular. And this is one of the red flags. It's uh leveraged ETFs. And so you can buy, you can buy 10,000 pounds of NVIDIA, but it actually gives you exposure to the moves on 30,000 pounds of NVIDIA. So it's a three times leverage. Now again, these things they're here to stay, right? So there's no point in arguing the the morals or the, you know, should they even be available. But that means that if the stock move if you've got if you invest 10,000 pounds in one of these things and the stock goes down 10%, you've lost 30% of your money. So that's what's easily available at the moment is these leveraged ETFs.

Speaker 1:

And they're very attractive because people look at that, especially when they're at £60,000 and they think, well, if I do this right, I could be a millionaire in four years.

Speaker:

Yeah. You know, and uh that's one day deal boy.

Speaker 1:

Oh, you like I did it at the beginning. I remember these well, because you could leverage hard on these platforms back in the day. Right. And I remember thinking, well, like Microsoft, sure thing. But then you end up paying rent on the on the actual leverage itself.

Speaker:

That's right.

Speaker 1:

Which is really dangerous. Because then you're like, well, hang on a second. Why am I down? It's gone up by two percent. You're like, what? Oh, okay, there's rent on this. And so you've got to be very sure.

Speaker:

And guess who makes money from it? What the banks. Of course.

Speaker 1:

Yeah. So that's why they do it, right? But i i if you get it right, it can be brilliant. But it's very difficult.

Speaker:

It's very difficult. Avoid any volatility product, right? From sites.

Speaker 1:

Right now. This is right now.

Speaker:

No, I'd ever, never trade a volatility product in an ETF form. It's just a guaranteed loser. Okay. And the banks are the only one that make money from it. Good. And I d I speak from experience, 2018 got wiped out. Okay. Because the market was down seven percent in a day. Rich has been there. Got the t-shirt. Oh hell yeah. And but I like I live to stop other people experiencing that pain. Especially as I was sitting in Medellin, Colombia at the time, um, having a wonderful holiday. And that really ruined it. And it was Jerome Powell and Donald Trump. And the market had gone higher and higher and higher. 30 basis points a day, every day. Now that reminds me a lot of the last month.

Speaker 1:

Yeah. So the buffet indicator is a nice tool.

Speaker:

Sorry, let's let's just finish. So the low risk, medium risk, high risk, we've got those three buckets.

Speaker 1:

Sorry, our thing.

Speaker:

You're gonna haircut the low risk by 10%, right? You're gonna take 20% off the medium risk total. So you've you've taken all your the money that you've got invested and you divided it into those three low risk, medium risk, high risk. You take the number, take 10% off your low, 20% off. Your medium and take 30% off your stocks like NVIDIA, Palantir. Because those stocks can go down 30% in a blink. That would take four days. And then add the three together and just see how that number looks compared with what you've got at the moment. Now my ISA and SIP together are all-time highs as of this day today. Right? So they're now all in cash, apart from one stop Pinsana, which is a rare earth um miner. And because Trump and Z are fighting over rare earths, I thought, meh, okay, I'll have some rare earth um miners down in Angola. So I've got Pinsana, but that's the only thing I own. The rest is in cash because I've I'm really happy with that number for the year. It's it's more than I thought I would ever have with this year. And I do not like the thought of losing 10%, 20%, or 30% of it trying to realistically make 10% more. Because I think a drop comes before that extra 10%.

Speaker 2:

Yeah.

Speaker:

And if that number scares you, it's time to reduce the risk. If you don't like what you see, if you take 20% off the total, let's say, if you don't like if that hurts to see your wealth go down by that much, it's time to reduce risk because it can happen.

Speaker 1:

So let's talk about this. And if you you've got all cash, I know we spoke about this quite heavily on Friday. And um people, that's difficult for them to even fathom doing, even though even though like especially for the guys that are just like set up my ISA and park into indexes and like I just do that for ages. So if you're worried at the moment and you're you know you're you're hearing things like this, or you're you're seeing stuff in the news. And how does someone like physically assess? Let's say I'm a total beginner rich, and like all I do is occasionally like check in on my stocks and shares portfolio. Yeah. How do I begin to even assess whether an index or a certain indice or something along those lines is overvalued or undervalued? We mentioned the VIX. Yeah. That's not the sole way of doing it, right? You could we there's there's two ways.

Speaker:

So you so you can look at valuations. Valuations, we talked about P ratios. We we um we touched on that, so I I don't want to kind of hammer that home too much. But we are at 24 times earnings, and we've already priced in. Okay. So the market already expects 12% earnings growth next year. So there can't be any disappointment because that's in the price already. So to be now the the normal average is 18 times earnings, a PE ratio of 18 times for the S P 500. You'll come back and say, we've got an AI revolution coming on, Rich. Come on. Now to finish your point there, we uh we do have an AI revolution, and that's going to take over the world, and there's incredible things happening. But it doesn't mean that it'll happen in the current form that it's in. Yes, exactly. It's unsustainable. We cannot use that much energy on um, you know, you you producing a meme to send to me of um you know a funny joke. No one wants to see the inside of our WhatsApp chat, Rich.

Speaker 1:

But it's true. Yeah, you're right. They're using vast amounts of energy and uh uh you know the investment in this area is gonna be un is it's unsustainable at these levels, but there is no doubt it's gonna change the world.

Speaker:

It's just how. If you moan about Taylor Swift taking a private jet, um, what was it, 160 miles? Yeah. There's no way you should be using Chat GPT, because trust me, you are wasting much more than she did.

Speaker 1:

Yeah. Um just not seen because it's in a wire.

Speaker:

No. So that's that's the second one of the bubbles. The first bubble is the the CapEx that everybody's building the data centers and the um and the chips. It's fashionable. It is it's definitely it's it's the only way you've got to spend six hundred billion. And Mark Zuckerberg, in fact, made up the number.

Speaker 1:

He did. And also the UC China coming out and doing it for tenth of the cost, and everyone doesn't even look at that and they go, oh no, no, no, no, this is the way it needs to be done. Yeah. But actually, it doesn't. And there's gonna be a pretty for me anyway, from what I've read into this, is that it's you know, there's gonna be a quick eye-opening thing when it it's kind of likened to like, you know, when they build like those super super markets and then they're just empty. That's what it feels like is gonna end up being. Like you do, you put all this infrastructure and eventually it'll be powered by this tiny little tiny thing like that, because technology is gonna allow you to get to that point.

Speaker:

Which is super efficient and you're gonna be sitting with empty data centers. Exactly. So the the idea at the moment is you you need to go down the nuclear energy energy to power the data centers. That's the second bubble at the moment. So if you're in Rolls-Royce, just be careful. You've had an incredible investment, much better than me. My ex-girlfriend and I, you know, I I think one of your things was um one of your pods was about relationships and difficult money chats. She would throw in front of me the fact that she had bought um Rein Metall, which was the German tank producer, and Rolls-Royce, and she had made 10x on both of them. And uh, you know, so that was too too hard for me to stomach, clearly.

Speaker 1:

Fair enough.

Speaker:

I get it. But yeah, nuclear energy is the second bubble. The third bubble is quantum computing, and then the fourth bubble. I'm not 100% on this one, but potentially robotics. Because I just interviewed a robot on Friday after I interviewed you. I'm not gonna say which was the more interesting interview.

Speaker 1:

But that that's an interesting one because it could flip. Right? That could it be in your homes and Tesla builds armies of these robots, and it's actually really very valuable, right? One billion robots coming to us. Yeah, I read that too. It's mental, isn't it? Like, can you imagine?

Speaker:

I'm actually right with it though. Yeah, yeah. And and this thing, like we had an arm wrestle on I won, so I'm still okay with this. Did you? It's called COID. So it's the Crane Shares Humanoids um ETF. And it's just been launched in the UK. This robot rang the opening bell of the London Stock Exchange on Friday morning. Jokes. That's brilliant. It's brilliant, but it's also potentially a short-term top, you know, if we if we get into that kind of thing. Now it's a great ETF, and I'm sure I will invest in it at some point. But the four bubbles are CapEx on AI, nuclear power, quantum computing, most definitely. I'm actually short reggetti, and then um robotics. So that's your orgy of speculation, sir.

Speaker 1:

Okay. So we've got that right now. So in your opinion, if you were to put a number on it, where do you think we're going to end up in, let's say, the next time this happens? So the correction if and when it happens, or the crash, if we get to that point.

Speaker:

Do you know it could be a correction sideways? Interesting. There's every and that's at an index level, because we do we we started the podcast Um The Art of Investing, and the sole purpose of this is to educate the nation on how to invest. Now you mentioned beginners and the ones that have just opened an ISA or a SIP, and they don't really know, they're just learning what an ETF is. So we go through what's an ETF? What are what how do you describe equities? That's the second episode. Third is on commodities. The fourth is on kind of everything else, right? Bitcoin and um bonds and currencies. Proper dive into assets. A real, yeah, a deep dive into a beginner's guide. Brilliant. And then we launch the model portfolio in week seven. And so this is taking, and we do it all in percentages, there's no money. We do how would I break down my asset allocation if I had X in my ISA? And it's not just me. If you're already bored of hearing my stories, then luckily I just host it. Because I've found two guys that are way more experienced than I am and way more knowledgeable than I am. One of them worked for Soros, hedge fund, sat next to George Soros, and George used to phone his house to ask him advice. So that's how qualified this guy is. And his name's Chris Fellingham. And uh, you're just an incredible man, 40 years, but he's also pretty damn funny. So it's real fun to have him on board.

Speaker 1:

Yeah.

Speaker:

And then the other one is Mark Spice. His his middle name is um his nickname, sorry, was Spice. Right? Mark Spice Holden and uh Spice was head of investment at Standard Life. Oh cool. Another 40 years. So the thing we our selling point is between us, we've had a hundred years in the market running money. Nice. So we've we've taken this model portfolio and I'll tell you how it's how it looks at the moment. And this is my my thing that if we're in these bubbles, they're pretty much all in America, right? You don't have too much of a bubble in the UK. You definitely don't have a bubble in um the NIKI in Japan. You don't have a bubble in India. So we've broken down and we've got we've still got 20% between in in America. So between the SP Nasdaq and Russell 2000. Russell 2000 is more like the small caps across there. We got 20% there. We've got 10% in the good old FTSE. We got 10% in the NICE, and of course that's had a great week recently because you've got a new Prime Minister there that's very open to uh to growth. We've got 10% in global mining stocks, right? Yeah.

Speaker 1:

And that's because Anglos, Americans, etc. Exactly.

Speaker:

Anglos, Rio Tinto, BHP, uh, Freeport, MacMoran. And that's because resources are becoming um more sought after, especially copper and gold. There's 30% of the exposure there is funny that copper and wires, data centers, etc.

Speaker 1:

So you're seeing the spillover from that.

Speaker:

Spillover. It goes into everything. Um so yes, so we got 10% of these global mining funds. We've got 10% in the DAX. Looking back, that's our probably that's our mistake. Maybe shouldn't have gone. What's the DAX for? Uh sorry, German DAX. German DAX. Yeah. Yeah. Yeah, yeah, yeah. Yeah, equities there. And then uh we've got five percent in something which is That's a lot for the DAX. It is a lot for the DAX. And it was it was in week seven, and it was when we um were seeing the questions around American exceptionalism.

Speaker 1:

Yeah, yeah. Okay.

Speaker:

And money was flowing into the DAX. I think we we all admit that was our mistake, but but we don't want to cut it yet. Um then we've got we've had this thing called the um the Van Eck blockchain and crypto ETF. Yeah, I know. Well it's up 51% in the six weeks since eight weeks since we bought it. That does not surprise me. Yeah. That sometimes it's good to have these things because you realize I wouldn't have actually known that if I hadn't been part of this podcast. That to me, as soon as it goes parabolic like that, then that's that's the end of the rally. And that's why I'm talking about these corrections. Yeah. So we've actually sold half of that. Have you interesting, you took profit. Yeah. Took profit only on half. The guys won't let it be.

Speaker 1:

Technically, it's ending up like seven, eight percent of your total allocation at that point to it needs a haircut to stay in line.

Speaker:

Exactly. We've got five percent in India, in the MSCI, India ETF.

Speaker 1:

I love that, baby.

Speaker:

Yeah. It is it's just it's such a a strong part. Yeah. Um and then, but you know, you so this all changes week by week, episode by episode. We do a weekly episode. And um it's just exciting. So but the main takeaway is we've got 20% in cash, right? And we're earning four percent on that uninvested cash.

Speaker 1:

That's the thing for us right now, I think, is what is the game changer. We spoke about this on Friday. I think it's you asked me what my biggest game changer is, and I was like the fact that we're like brands like IG, trading two on two, whoever you do you decide to use for your ISA, majority of them do uh uh interest on uninvested cash, which is just enormous because it takes the pressure off. It's not sitting there making zero anymore, it's getting money sometimes better than what your savings account will give you, which is just brilliant.

Speaker:

Yeah. And there's offers now and again as well for for signing up. You know, maybe you get a higher interest rate for a few months, that kind of thing. Yeah, yeah. Or free shares of no that as well.

Speaker 2:

Yeah.

Speaker:

Uh so so yeah, so it's cash is a decision in itself, right? And that's what the the guys have really rammed home in those first few episodes. You know, you decide to buy gold, you decide to buy the FTSE. Oh, sorry, five percent is in gold as well. You decide to buy these things, but you've got to think of cash like I am deciding to hold cash. What's my return? What's the upside? What's the downside? And um, we've decided at the moment markets are so elevated that we're actually going to sit 20% in cash, which is huge. It's enormous. Yeah. For a portfolio manager, it is.

Speaker 1:

Yeah, I I'm currently not far off, you know, 15 or so. Um, just been shaving off some profits and and looking at it almost exactly what you said earlier: high, medium, low, um, done in a very similar way, just not as like all I'm looking at mainly is the highs. And looking at those like we've had 120% run on X, Y, and Z over the next few months. We should probably be taking a little bit of off the table there um and just waiting for a little pullback on some of them.

Speaker:

And this is where I'm calling bullshit on Andrew Craig. And I'm a brave man to do it because he's the next Chancellor. Of course it matters if the market crashes. Okay. Of course you're gonna be you're gonna be pissed off because you've just lost 30% of your money. You haven't if you haven't sold it. Oh, that's rubbish. Absolute rubbish that you haven't lost money if you haven't sold it. You uh whatever that PL is, right, whatever the figure is, is what your total is. Doesn't matter if you if you've sold it or not. If you if something happened and you had an accident abroad, you don't have travel insurance, you needed to to buy a new heart, and you you needed a hundred grand, then you gotta sell it and it's only worth that. The thing I would say that I of course I see where Andrew's coming from, and and it's a very lazy argument, and this is why he's an economist and an amazing writer, not a portfolio manager. If you've got a hundred shares of something, right, and you sell it and it goes down thirty percent, and while in the time that from when you sell it it goes down thirty percent, you earn a bit of interest. How many shares can you buy back? If you rebuy, how many shares are you buying?

Speaker 1:

Okay, I'll see where you go with that.

Speaker:

Yeah, yeah, but then you got 150.

Speaker 1:

Yeah, yeah.

Speaker:

If you earn five percent interest, you've you can buy 150 shares. So in Andrew's example, that you know, you you sell in 1987 or you sell in 1929, and you still buy every month. Okay, if you have taken a bit off the table, you can buy fifty percent more, which means by the time you retire, you if you do it twice even, you've got double the amount of shares that you had to start with, and they finish at the same endpoint.

Speaker 1:

Okay. I agree with you wholeheartedly, hence why I move some of my money into cash. But let's yeah, well, yes, because there are we're a different breed of investor to you you extremely more than I am. I don't have the the the you know the abilities or anything like that to do short-term trading. It's just not my thing.

Speaker:

Um, but that's not short-term trading though, Sammy. That's that's what I want to get away from.

Speaker 1:

No, no, I know that. I I I just want to finish this point because I think it's important. This is like we spend time in the markets, is what I'm trying to say. Um, I'm not saying that that's short-term trading. Um the um other side of it is Joe Blogg's mechanic sticks some money in your ISA, try and grow your wealth over the long term, never gonna care about this stuff, but does care enough that his money's being inflation. What would you like what are you saying to that guy?

Speaker:

That's why we're making the podcast. Yeah, right, because investing is for everybody. Okay. And this country's crap at teaching you at school. And so I was at an event at the London Stock Exchange last Wednesday to support financial literacy. And this is what we want to do. We want to take this podcast, The Art of Investing, and we want to get, you know, teens and college and university students to listen to it and to learn. Because every time we make a decision in that portfolio, we talk about it and we explain why we're doing it. Right. But you don't even have to go that far. If you can see all the headlines that, you know, we're in an AI bubble. Yeah. And you've doubled your money in something like Palantir in six months, understand that's not normal. Right? And I'll give you another example. I'm a good boy. I go to church on Sundays, right? And you're looking at me with disbelief.

Speaker 1:

I don't know what's true anymore, Rich.

Speaker:

I I do, I go to church, HTV church in um in Brompton. And um something really made me look, you know, sit kind of sit up literally. This week's sermon, um Archie Coates, who's the local vicar, he brought up the price of gold in his sermon. And he said, Some of you may have seen that the price of gold just went through 4,000. For me, that is it. Get the bell out and ring it because you've just put a flag in the top of the market. If your taxi driver's talking about the price of gold, if your grandmother's talking about the price of gold, if the vicar in church sermon is talking about the price of gold, that is a short-term high. I completely agree. And it's the same with all the stocks, it's the same with the quantum, everything.

Speaker 1:

So your position on that is take a little bit more of a keen interest into what's happening and make decisions based on what you're seeing and how potential risk could be increased in certain places to potentially be able to buy more and be more active over the longer term, which gives you that better decision.

Speaker:

Exactly. Just to because I tell you what is a great feeling when something sells off, and okay, you are losing a bit of money on the 70% of your positions you've kept, right? So that that hurts a little bit. But my God, it feels good to see that cash and to go, I'm gonna buy it again now.

Speaker 1:

Well, it's happened to me so many times. The the biggest one I did was April uh after Liberation Day. And well, I actually waited two days after. Uh, it went down and then it went down five percent. All my mates went in. I went, no, not yet. And then we had a chat actually, and then I waited again and it went down four percent from there. And I was like, okay, today. And I just went and I clutched shut my eyes, and it was the biggest one I did. Every single time they'd gone down before, I'd slowly increased up a little bit more of what I put in, I potentially moved some money out of short-term savings and put that in there as well. Because I'm like, it's never gonna happen again. Was it scary? Uh the scary the day after, right? And then after that, I I actually just shut my phone and I didn't look. I just I just kept an eye on the news. I didn't even look at the stock prices. And then uh a few days later, I was like, that was the best decision I ever made. And I could tell it was just gonna be the best decision I ever made, and it was. And so it was just about being a little bit more, it was kind of going against the grain of your own feelings, and because everything is telling you that's the wrong decision, but actually it couldn't and right now everything's telling you, don't sell.

Speaker:

Yeah, it was created. This is easy, we're on a run, it keeps on going higher and higher. Why would I sell? That's the time to sell.

Speaker 1:

Yeah. There's certain things that I will just hold, and it's just certain things that I'll just never get rid of, and I'll just keep popping money in there. And that's like it's just a rule. And but you know, I've moved from my 80-20 strategy, probably more of a 70-30, and now because some of my individuals have just been flying, and then I'm like, whoa, this is not normal. Like to be two, three hundred percent up on some things, it's like that's not that shouldn't be happening in six to seven months.

Speaker:

And it's it's it's like that in the stocks, but it's also like it in the businesses. It's not normal for NVIDIA to earn 80% um margins on 95% market share. That will get competed away. 100%. And it gets competed away, it means that the profits come down, means the valuation comes down, means that the share price comes down.

Speaker 1:

I want to ask you because obviously Andrew's a friend of the podcast, and I want to make sure that like it we understand that it the you know there is that long-term time horizon is important. So I don't want to like make everybody go like that doesn't never work.

Speaker:

And no, I'm I'm I'm just gonna do it. In jest, yeah.

Speaker 1:

Of course, we know that. But I just some people may take that the wrong way. And so I just don't want them to like because it's so hard to get them to even buy the index fund, which is such a big step anyway. Agreed. Um, and so I want to like get them to buy the index fund and then start doing low high each month, which for me is like a brilliant next step for people. So if you're just buying your index fund, if it's gone up this month by less, if it's gone down by more, and start doing that.

Speaker:

Brilliant. And and that in itself, or just pausing one month. Yeah, exactly. Yeah.

Speaker 1:

Some sa and if it's stagnated, you stagnate, don't don't do anything. You know, but but still buy, but just don't buy as much.

Speaker:

And well, but but you also don't need to be buying the same thing every month, right? Now, and this is again, we've got I go back to to the art of investing. We we've got 12 assets, right? You don't have to keep on buying the SP 500, right? It's been the best horse in the race, but this ain't horse racing. Right? Just because Man United have been fantastic back in the 90s doesn't mean they're gonna perform for the next 10 years.

Speaker 1:

No, no, no.

Speaker:

I you know, and and so they are alternatives.

Speaker 1:

If you are the guy that's just started doing something, don't stop doing it. Like still do something. That's what I'm saying.

Speaker:

Buying something different. Buy the FTSE 100s, that's not financial advice. But FTSE 100's a lot more defensive. Um or well it's about balance, isn't it? It's about balance, a diversified portfolio. Buying the SP 500 is not a diversified portfolio anymore. It used to be.

Speaker 1:

No, it's not. Just have a look at the top 10. Yeah. The top seven.

Speaker:

The top 50%. Yeah. It's all AI.

Speaker 1:

Yeah, exactly. So that you yeah, you're buying almost a higher risk fund. A good way around that is an equal weight, right? You can do an equal weight.

Speaker:

Now you're talking. S P 500 equal weight is is another option. Probably better than the Russell 2000, to be honest. Yeah. Interesting.

Speaker 1:

Okay. Would you look at that as an example? Oh, definitely. Yeah.

Speaker:

Yeah. Um, and that's that's the broadening out. Because if you imagine we know that AI is going to come into the pharmaceuticals, it's going to really help, you know, podcasters. Every single business going, right? AI is going to help. I saw an incredible photographer. Check this Playboy out, right? He hired out the whole of the Natural History Museum to propose to his girlfriend. Oh, what a man. What I'm like, I said, take take a bow, son, take a bow. Don't leave him. So anyway, the but the photographer was taking the pictures and managed. Um, there was a few people when they came back to do the uh the wedding photographs, and she managed to take them all out via AI. Anyway, sorry. So the AI stocks are where the the investment is at the moment, but every single company is going to benefit from this. And so maybe the the valuation breadth, the money starts going to the rest of the index, which means that you can benefit from the equal weight, which it basically means there's one percent, you know, or less in each stock of the 500 stocks, rather than um 34% of the index being in the top 10. Yeah, which is nuts, right.

Speaker 1:

And uh yeah, that I think is a nice way of looking at it. And you can do also if you're not necessarily okay with tobacco and mining, you can do any SG version of the S P 500 equal weight as well. I know, but you can, and uh I get asked that question a lot, and so I like to bring it up. Yeah. But I I I I tend to agree with you, so um, as well. Um but look, it anything in particular right now, I'm sure you've got your eyes on the whole market. You guys are crazy for how fast you move in the IG live show, it's great fun. Um but anything you're particularly like cool, I like that.

Speaker:

And I I guess they touch on that as well at the moment. So, so nobody wants to watch unless you're in the industry, nobody wants to watch CNBC or Bloomberg because it's just a little bit dull and it covers a lot of politics and you know, European companies you you're not interested in. I try and make Trade Live with IG a bit like soccer Saturday.

Speaker 1:

So it's quite like that, yeah, yeah.

Speaker:

Yeah. When when the market opens, you know, it's like, and Rio Tinto's up three percent, what's going on there? And you know, one of my PCMs will tell us. So I try and make it fun. We have a bit of banter, and um, yeah, it's uh it's more of a yeah, podcast-y kind of um morning show.

Speaker 1:

It's kind of mixed between being on live, but then it's got that cool podcast feel to it. Like you do have those like real cool and like you make trades live and it's yeah, it's just good fun. It's just nice to watch. It's when I've got time as uh I do have it on, but I often just put it on in the background.

Speaker 2:

Yeah, and just hang on the TV.

Speaker 1:

Um and you know, if I'm on calls and stuff, I mute it and I put it in and I put it back on. Because I keep I like keeping my ear to the ground with you guys and I think it's fun.

Speaker:

And the fun that also there's a community there, so it's on YouTube, so you can write comments and ask questions and we answer them straight away. So that's pretty cool. You know, why is British Telecom down four percent today? Um, you know, what are your your top ideas? This morning we had Peter Hamburg on. Now, Peter Hamburg is the godfather of gold. Very cool. He had his own company and the Russians stole it from him. Amazing. So the guy's got incredible stories, and he brought in with him a gold coin, which was uh minted in the year that Jesus was born. How about that?

Speaker 1:

That's pretty cool. Well, I think you're gonna be carrying around that round.

Speaker:

And then he went home on the the Elizabeth line.

Speaker 1:

It's amazing what people yeah, it just m mind blows me what people do. Um but I would literally have armed guards around that thing in London. Um But sorry, your question. Any anything you have got your eye on, as in maybe a sector or something that you're like, that's really interesting play. Maybe someone's not necessarily looking at that at the moment.

Speaker:

The the problem is that you get um so caught up in in everything being so high at the moment that what hedge funds are trying to do is they're trying to find the the parts that have been left behind. So anything good that's been left behind has already had money go into it. So now they start to buy the shit that's left behind and the really bad companies. And another red flag, the the last one I'll give you, was that back in 2021, of course, we saw the meme stocks. Yeah. The Game Stops and the AMC cinemas. There was an ETF of all the meme stops. Of course, 2022 it it got killed and it got delisted. It's just been relisted. That's another red flag to say we're back. And what are we back into?

Speaker 1:

The or oh something orgy.

Speaker:

You just remembered that bit. The orgy of speculation.

Speaker 1:

Orgy of speculation.

Speaker:

That's right. So that was from uh yeah, 1929, October 1929. Uh, that was the phrase that Chancellor of the UK government came out with to describe Wall Street, and it's actually the what sowed the seed of the crash.

Speaker 1:

Okay, okay. So we've had orgy of speculation and circle jerking. Is there any major ones that we're missing, Rich?

Speaker:

No, I think that'll probably do another. I'll do it for the deck. Otherwise, I'll never get invited back.

Speaker 1:

Yeah. No, I love it, man. Um look, it's always a pleasure to have you on. I uh you know uh don't let anything we've said today scare you. Use it as knowledge um because these things can be scary when you have your mark, you know, your money in the markets, etc.

Speaker:

But you should have done very, very well, right? There's not many things you could have bought that haven't had an incredible year. So give yourself a pat on the back.

Speaker 1:

I'm just worried about we have listeners that may have started two months ago and ones that started 10 months ago and some that have been doing this for years. So I just want to make it very clear and just say, like, you know, don't panic, use this as a learning experience as well. Um, because markets move in cycles for sure. Things will come back. It's just how long they take to come back. And so if you don't manage to do the right decisions on this time, you to watch, learn, and then take it on and use it in the next one.

Speaker:

Yeah, definitely. And don't um don't have so much of your savings in there that it makes you feel uncomfortable. Start small.

Speaker 1:

I 100% agree with you there. Emergency fund is the most pivotal thing in place. When if you haven't got that in place and you're like aggressively investing at the moment, stop what you're doing and start doing that, because that will stop you making emotional decisions if and when these things happen, which is just guaranteed, as we know. So I agree with you, like wholeheartedly.

Speaker:

Yeah. And be careful with crypto. You know, know what you are investing in. Because if you invest in a company, you're investing in bricks and mortar. If you invest in crypto, you're investing in an idea. So that's something, and that was the head of London Stock Exchange that that actually quoted that um Dame Julia Hoggart in her.

Speaker 1:

Oh, very quick last question. Cryptos in ICEs.

Speaker:

Yes, it's coming. Incredible. So wild. Yeah. 21 shares are actually going to have these crypto ETNs that you can buy in your ISA and at last you can put Bitcoin in there without you know having to go through a Bitcoin treasury company or so. This is a big a big step forward.

Speaker 1:

What does that actually entail?

Speaker:

Can you just Yeah, certainly. So so well, the likes of 21 shares is like the safe one to do it with because they actually have the the the crypto and they hold it and then they make uh equity um an ETN out of it. So it's like an ETF, right?

Speaker 1:

So if you buy an exchange traded note. Exactly. Right.

Speaker:

So the exchange traded note is backed by the real asset, and you can buy that just like you buy an ETF, and you can hold that. So you're holding Bitcoin or Ethereum, you're holding it in your ISO or SIP, just like you do with all your other um assets. So you can have an SP 500 and you can have Bitcoin at last. They can do it in the US, you couldn't do it here under the tax wrapper of an ISO or a SIP, and now you can.

Speaker 1:

Yeah, it's a big, big step for the UK retail investors as well. I think it's a good thing because a lot of people are interested in crypto and they get into just that. And so at least having it in a tax-sheltered account is just a big, big step for the market for sure.

Speaker:

So, yeah, so we I would imagine I don't want to front run the guys in the art of investing, but I think we'll probably invest five percent of our money into that. So, like I say, we've got 20% in American stocks, we'll have five percent in crypto, and then the rest spread throughout. Do you come out of the vanak? After a 51% rally, I want to.

Speaker 1:

They're a three-way portfolio, you've got to all have buy-in.

Speaker:

And it's funny, Spice is the big bull, I'm the big bear, and then CJ's the chairman. Okay, got it. So um so it's quite there's a lot of fun.

Speaker 1:

I'm gonna tune in and we'll 100% link to that. Uh, I hope you guys get some new listeners. I'm sure a lot of our listeners will find that valuable. So definitely hop over there. Um, but Rich, always a pleasure, man. Thank you. We'll see you again soon. We predict another crazy uh episode where things have been happening in the markets.

Speaker:

When's 54 days from now? That's gotta be almost pretty in Christmas. December the 10th, yeah.

Speaker 1:

Yeah, we may even be like coming up to Christmas period.

Speaker:

Yeah. That could be juicy, couldn't it? Right, December the 10th, down 25%. Let's go. All right.

Speaker 1:

Sell everything. Thanks, Rich. Thank you.

Speaker:

Cheers and congratulations on a fantastic podcast. Thank you.

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Sammie Ellard-King

Host