Bizarro World Podcast
with Nick and Gerardo
Feb. 7, 2023
We’re just back from the Vancouver Resource Investment Conference (VRIC) where we met with existing portfolio companies, looked for new ones, and met several of you. We recap the sentiment of the conference. Gerardo is now up some 10,000% on Patriot Battery Metals after getting subscribers in at C$0.16 and watching them surge to C$17.00. He gives an update on their current drilling. We give an update on the broader market, including recent jobs numbers, Fed interest rate decisions, corporate earnings, and what it all means. We talk geopolitics, cold wars, and balloons. We bring you the latest installment of American Police Gone Wild — the sex and murder edition. Plus we discuss new efforts to edit the genes of your food in strange ways. It’s all in episode 204 of Investing in Bizarro World.
1:26 Recap of Vancouver Resource Investment Conference
9:00 Gerardo’s Patriot Battery Metals Update
19:13 Market Update: Jobs, Gold, Fed, Earnings
24:53 Geopolitics & Balloons
34:17 American Police Gone Wild
42:32 Editing the Genes of Your Food
Gerardo Del Real: I am mining investor and editor of Resource Stock Digest, Gerardo Del Real, here with my partner, Mr. Nick Hodge, who's also an investor of all things and publisher of Daily Profit Cycle. This is the 204th episode of our weekly therapy session, that we call Investing in Bizarro World. We'll talk about the markets, we'll talk about what we're investing in, we'll talk about Chinese balloons over nuclear sites. We'll talk about the police going wild. We'll talk about the gold dump. We're of course going to talk lithium and Patriot Battery Metals. We're going to talk about alligators, catfish, and meat plants. Mr. Hodge, how goes it for you?
Nick Hodge: It goes very busily. You well know that we were in Vancouver until earlier this week, had some issues getting back, both of us. Good to be back. Then, of course you have to do the old digging out, figuratively on my end and figuratively and literally on your end, because you came back to a snow or ice storm in Austin, Texas. Getting caught up, but feeling good. Some stocks are working. The newsletter side of things is working and feeling good about the new year.
Recap of Vancouver Resource Investment Conference
Gerardo Del Real: No, listen, let's get right into the conference. It's funny, I had issues getting there and coming back. I missed my flight on Sunday. I arrived on Monday. By the time I got to the actual conference hall, I got to see your excellent uranium panel. I know you had a presentation earlier on, touching on uranium. I must say the crowd was as robust and eager as I've seen in some time, and we'll get to that in just a second.
But after the delay in getting there and making the most of it for that day and the following morning, playing catch up with a few people, my flight was then delayed because of this ice storm, ice apocalypse as I call it, that affected a lot of the country and really hammered Austin, Texas. I ended up having seven flight cancellations over a two-day period. No complaints. Was stuck in a nice hotel with a nice restaurant, just missing the family, of course, and getting used to working off a laptop.
But let's get to the feeling and the vibe of the conference. I know it was very productive for both of us. A little bit more productive for you than I. What were your thoughts on the conference? I mean, I saw people on the floor sitting there waiting to hear you speak. It’s been a bit since we had that.
Nick Hodge: Yeah, it was a different vibe for sure. Much better markets than we had last year, especially regarding lithium and uranium and even gold, which is up, or was up some $300 until this recent sell off, that we'll talk about as well. But they just had that conference in May, so they normally have it in January. The most recent one was last May, and I was told there were about 1,500 people there and then they had this one in 2023, the one we just went to. I was told there was around 5,000 people there. More than tripling, essentially how many people were there.
The sentiment was good, especially for the uranium things, which tend to generate rabid retail interest anyway. Yeah, I was on two uranium panels and the one that was in the smaller workshop room had people sitting on the floor and packed all the way out the opening of the workshop room.
There's lots of things that are working and interesting and there's lots of tailwinds, all the things we talk about all the time, right? Megatrends, electrification of everything, battery metals, base metals, and gold is doing well. People seem to be interested in a lot of things. I was popping in talks here and there and then they were very well attended. I think people are excited that we're in a new commodity super cycle and they're interested in doing their diligence.
One thing, that somebody said to me, and I think this is actually true because I walked around and looking afterward, they were saying that the company presentations weren't as well attended, but the newsletter writers, not pop culture people, but people who had a following, their talks were really well attended. I think people are trying to figure out what the, "Experts," are thinking, starting to do their due diligence and thinking about wading into this market.
I also talked to several subscribers, both of mine and former Dines’ subscribers, and they had very nice things to say. I heard some great stories about Mr. Dines and the money that he made people. And then I talked to one gentleman who came all the way from Alabama with his son, who is a fairly new member of Foundational Profits and Hodge Family Office, and it's almost too much weight to bear. He introduced me to his son and he said, "This is Nick. He's the one who's in charge of your inheritance," and I was thinking, "Oh man, that's a pretty big responsibility," right? "Hope you diversify your bonds," but no, the sentiment was good. The exhibit hall was lively and I got lots of new ideas and I got to catch up with some companies that I already cover. How'd you find it?
Gerardo Del Real: Same. Same. Everyone was eager to speak, met some very, very neat people, met a few subscribers, caught up with a few other people that were lucky enough to get into Patriot early on and have been following our work there. Really satisfying conference. Again, outside of being frustrated that I couldn't make it back home on time, it was really productive. Even during morning breakfast, I ended up having several conversations with several companies over breakfast, when really all I was trying to do was go have some coffee downstairs at the lobby, but that's exactly what we were there for.
I felt good about it coming back. We had several companies that reached out to us while we were there and subsequently wanted us to help tell their story and introduce their stories to the audience. We tend to be pretty selective with our stories. We like to be early to stuff. We like good management teams and good assets. And it's a tough business. It's high risk, it's high reward, it's highly speculative. I do, I know you do too, feel a responsibility to vet out the stories and make sure that we're bringing stuff to the table that we feel has a shot at making people money.
That's really the criteria. I'm not in this to build mines. I'm not a geologist and I sure in the heck I'm not an engineer. I'm in this to make money for myself, for my family and my subscribers and our audience. I say that, to say, that not every story we're going to bring to you is something that we think is the best project in the world or the smartest CEO on the planet or the best geologist on the planet, but maybe they're very effective at marketing. That can go a long way.
There's different ways to skin a cat. You can trade your way around a profit. You can keep long-term positions around a profit or you could do a combination of both. I mean, me and my personal life, I can tell you that I have an account just for my long-term private placement stuff that I'm going to buy and hold and let that play out for the most part, unless my investment thesis changes. Then, I have a trading account that I get busy in almost every day. I'm in and out of stuff, and that's my highly speculative money. And I absolutely love what I do for a living.
But you have to know the difference between those two. Again, nothing wrong with a promotional play, if they're going to promote the right way and at least be forthcoming about the fact that that's the game that they're playing. It's our responsibility as newsletter writers and as editors, to make sure that we put ideas in front of our audience in public that give you a chance of making a buck again.
Again, we're never going to get them all right. Nobody is. But man, it was satisfying to hear some of the feedback and some of the commentary on not just Patriot, but to several other companies, although of course Patriot dominated the bulk of the conversations, because look, we're celebrating a 10,000% gain. It's hard not to get excited about a 10,000% gain when a lot of people followed me into that really early on. It's fun to make money on my side of it, but it's really fun to make money for other people and help with an idea that worked, because some of them are not.
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Nick Hodge: It wasn't just conversations that you had. I mean, Patriot was the bell of the ball and they weren't even at the conference. I mean, I was talking to people on the exhibit hall floor about it, in the hotel lobbies, and the bars. Everyone knows now what's going on there and has truly turned into a land grab, land play, closeology type thing, with lots of companies now flaunting their land holdings in Quebec and the James Bay region. Well done on you. I mean, you were the first guy to call that out and get people into it.
Gerardo Del Real: Knock on wood.
Nick Hodge: I hear people bragging about being in at two and three and four bucks and you had people in at 16 cents and 34 cents, I believe it was.
Gerardo Del Real: Yeah.
Nick Hodge: Those are life changing gains and the emails are coming in as well from customer service.
Gerardo’s Patriot Battery Metals Update
Gerardo Del Real: It's nice to get the kind words. I appreciate y'all writing in. I've had a couple of notes just today asking about the potential, and I had one gentleman that you mentioned getting in at a couple of dollars and he said, "I got in at a couple of dollars. This has been amazing. I make..." The amount he told me I won't put out there, but he's done well for himself. He said, "When do I get out?" Let me give you all my investment thesis. I have a pretty robust position in Patriot Battery Metals (TSX-V: PMET)(OTC: PMETF). I think yesterday I may have sold... I'll give you the exact number, because I know they'll hold my feet to the fire on this. I don't want to tell you how many shares I have. So I sold 0.025% of my position yesterday. Minimal, and I did that because I have a tax bill that's due, a loan that had to be taken care of and some other responsibilities and commitments I had to make.
I still have 99.98% of my position, and you know, because privately we've had these conversations, Nick. I am absolutely willing to ride out that position as long as I can possibly ride it out, financial commitments aside, because we all have mortgages and tuitions and all of that to take care of. I say that to say, I don't think we're anywhere near where this is going to end up.
Here's what I see happening. We just touched new all-time highs, almost every day this week. There was a nasty little short attack on February 2nd, that lasted for about an hour and a half that took the stock down from the C$15 level down to like C$12.75 before it closed right back near the C$15 level. Today's Friday, February 3rd. The shorts did not want to go in short over the weekend. Let me tell you why, this is what comes next.
I know there's rigs on the eastern side of CV5, where that deposit is returning some incredible widths and some incredible grades, right? 25 meters of some five something percent lithium oxide, 15 meters of 5% plus lithium oxide. I know there's rigs on the eastern side that are targeting that extension. I'm going to suppose that because they put extra rigs over there, that those grades are continuing to hit on step outs. That can add tonnage really, really quick.
I also know that CV13 assays are due. We have 14 holes there. I've seen the sheet there that's on the website of 30 and 40 meter widths of lithium spodumene pegmatite mineralization. You can't guess the grade, but you can guess the widths pretty consistently. The company's been really consistent about putting that out there and letting you use your imagination.
I think we're closer to a 200 million tonne resource just on CV5 alone than we are 100 million tonnes at this point, Nick. I wrote this to subscribers of one of my services earlier. When you look at a chart of Patriot Battery Metals, it's really easy to get caught up on the fact that you're in at 16 cents. You had 25 cent warrants. You have a boatload of this stuff. Why not pull out this life changing number of dollars and just sit on that?
The reason is I don't look at the numbers, folks. I look at the potential, I look at the value, and when I look at peer comps of 200 million tonne and 300 million tonne resource base companies in the space, they're not valued at $1.5 billion or $2 billion or $3 billion. Those are much higher valuations, and mind you, they haven't benefited from the excitement of a growing discovery, because this initial resource estimate that we're going to get over the next few months is just that. It's a peek at what's there. I don't think we've even drilled the best pegmatite clusters yet. That's to come. I think we'll see that.
But what comes next? I think you're likely to see a financing here in the next month or two. I mean, we talked off air, if they issued 10 million shares of C$25 or C$30, they can quickly raise C$250-300 million with minimal dilution and never have to go to the market again until they're ready to make a production decision. I think when they're ready to make a production decision, I think they're going to have suitors more than willing to come in. Like GM just came in with Lithium Americas and write a check and say, "We'll build a facility. Just give us a supply and we'll pay a premium to the market if you give us exclusivity on all of this."
When I look at a maiden resource estimate, five rigs turning, multiple rigs on the east side of CV5, I look at the holes from CV13, I look at further exploration later in the year in a potential off take with the major partner or partners, and then I look at the connection that the non-executive chairman has with Pilbara, in my mind, I don't care that I'm in it 16 cents, I'd be happy to be in today at the closing price of $16. Let me repeat that folks. I would be happy to buy in today at the closing price of $16. I told you, Nick, I felt dirty selling that 0.02% of my shares. I didn't want to do it, but I had commitments and man of my word, got to honor the commitments.
Look, I think the best days are ahead of us. It's been a fun run. Can you pull back? Absolutely. This thing always does that. It runs 150%, it pulls back 30 and 40% and then it does it again. But man, we hit new all-time highs, I think two to three days of the last week. If that doesn't tell you how bullish I am, I don't know how else to communicate it to you. Patriot's not the only thing that's working in the lithium space. Our latest recommendation’s up over a 100%, it's barely been a month.
Nick Hodge: Yeah, don't tell them what that one is.
Gerardo Del Real: I'm not. They're going to have to earn that one.
Nick Hodge: That's 10,000%. By the way, 16 cents to $16 is a giant win. In these newsletter promotions that we produce and that others produce, you see a lot of gains tossed around like that. This is proof positive that gains like that are possible in the resource market. Most people only imagine them, or dream about them, or cherry pick past examples that they weren't a part of.
Gerardo Del Real: Sure.
Nick Hodge: Here you have a real company that you were actually a part of. You know what else I'm seeing less of? You just mentioned GM coming in to help Lithium Americas right?
Gerardo Del Real: Yes, sir.
Nick Hodge: Build their mine and that's lithium, right? It's not like they're looking at some alternative battery technology or there's something coming in to kill lithium. This is one of the biggest auto-
Gerardo Del Real: Let me drink my lithium water.
Nick Hodge: This is one of the biggest automobile manufacturers in the world coming in to secure their supply of lithium, because it's lithium batteries. It's something that I spent a lot of time talking about late last year, when I was seeing all these other promotions about different battery chemistries at the end of lithium, and I was telling you week in and week out, "No, those batteries aren't real. No automobile manufacturers are adopting them. They've all built these giga factories that produce lithium batteries, even if the chemistry changes a little bit, using more or less nickel or more or less cobalt or lithium iron phosphate batteries. They're still all lithium based." That rush continues to be on.
Simon Moores from Benchmark continues to pound that as well. He was at the Vancouver Resource Investment Conference and I sat in on his talk and had seen some of his slides, but he's saying literally dozens of new lithium mines need to be built over the next 10 to 15 years to satiate the demand that has already been created. This is base case stuff. This isn't increased EV goals or more tenacious carbon reduction goals. This is like what's already been announced.
Will that many new mines come online? Probably not, he was saying, because existing mines will get bigger and people will add capacity and things like that, but it's still going to require a significant amount of new supply coming online, and that's why prices for lithium are going to remain high for some time. Yeah, have fun drinking your whatever, electrolyte water, or talking about the death of the lithium-ion battery, because you're wrong.
Gerardo Del Real: You're way wrong and there's been a lot of money that you could’ve made by keeping it simple.
Nick Hodge: Exactly. You weren't in an alternative battery at 16 cents that went to $16. You're doing a disservice to yourself and to your subscribers by touting that shit.
Gerardo Del Real: That was going to be my next point. Sometimes again, I pride myself on being a person with simple premises, simple ideas and just things that kind of seem obvious to me, and this one, again, just a lot of it just seemed so obvious and continues to. I actually pulled up my original recommendation for Junior Resource Monthly today, and it's amazing to me. That was December, of 2021, where I wrote it up for the service.
I had financed it in Junior Resource Insider a few months before that, but I was reading through that. Everything in that initial writeup rings as true today as it did then. Again, just a simple premise. There's no need to get cute with your subscribers and your audience, folks, if you're a newsletter writer, when you can just make money with the truth. You should be telling the truth anyway, because it's a tough enough business to be getting cute and creative with some of the bullshit that goes on, is beyond me. I don't understand it.
Kudos to those that don't do it that way. The Brent Cooks of the world, the Joe Mazumdars of the world, the Simon Moores of the world, who by the way, they do phenomenal research. That's one of the few sources that I actually don't triple check everything when it comes to numbers and timelines, because they've proven themselves over many, many years to be very, very reliable, ahead of the trend, and conservative even in their bullishness for the sector.
Look, I just gave you a bunch of names on where to do some due diligence outside of us. Go to Simon Moores, Benchmark Intelligence, go to the Brent Cooks and the Joe Mazumdars, who do a different kind of speculating, but are very, very reputable people that we can say are reputable. If you want to high risk, high reward it, come on this way. If you want to be a tad bit more conservative, Nick Hodge is as good as they get out there in all the sectors, he's agnostic. I'm just a simple resource guy. You do it all, Nick. It's a boatload of options for you people to make some money, people.
Nick Hodge: Mm-hmm.
Market Update: Jobs, Gold, Fed, Earnings
Gerardo Del Real: Let's get into the markets. Heck of a jobs report. Sent gold from looking real cute and pretty, to all of a sudden being nasty and wanting to argue with me and I haven't even had my coffee yet. "What you doing, girl?" It took a big, big spin around. I was telling a close friend of ours earlier, gold is like that really, really pretty girl that wears all the right shoes. She's got the red bottoms, the outfit's amazing, the fit is phenomenal. But God, every couple of weeks she wants to argue. Right? You don't want to get rid of her, because dammit is she cute, and man does she got a mean walk on her. But God, that mouth be getting her in trouble sometime and irritates the living heck out of you.
That's my analogy for gold right now. I'm a man. That's how I process it. If you're a woman, you can imagine a guy that's rich, but he's horrible looking and every couple of weeks he says something funny to keep you around. We got analogies for both genders here if you go that way.
Nick Hodge: That's funny.
Gerardo Del Real: For those of you that go both ways, you could just intermix them. But yeah, gold... Look, now gold looks weak again to me, after that jobs report that send it tumbling and silver has never looked strong on a sustainable basis for the last year or two. To me, anyhow. Thoughts on gold? Thoughts on the overall markets?
Nick Hodge: I think it's a healthy consolidation for gold. I mentioned as much could happen last week. I think I said that trees don't grow to the sky and that even if gold did sell off, there was pretty significant support at the $1,875-ish level, which is about where it is. I think $1,865 or $1,869, I saw it close at today. I think that's a buying opportunity to get into some quality gold positions if you haven't already, either individual equities or ETFs, GDXJ or SILJ or something like that. I think it presents an opportunity. The jobs number is an interesting one. Look-
Gerardo Del Real: Yes.
Nick Hodge: Powell raised rates again, no surprise there, another quarter point, 25 basis points, however you want to say that, and you'll likely get one or two more of those before the federal funds rate is topped out. Employment is one of the things that I've been saying is the thing that gives them the cover to continue hiking. Right? We've gone through the softness in housing and then the softness in manufacturing orders and then the softness in earnings, which we actually are seeing now, to some extent, and then I can get into that a little bit.
Gerardo Del Real: Mm-hmm.
Nick Hodge: Then ultimately, a contraction cycle culminates with layoffs, which we're not seeing yet. On the jobs report itself, what did it come in at 517,000 or 518,000 jobs
Gerardo Del Real: The expectation was like 186,000 or something along those lines.
Nick Hodge: Right. Something's broken there, when the expectations are off by that much. I haven't figured out or looked into what is broken, but one of the things I read was that some of this is people looking for two and even three jobs. That's not a sign of a healthy and growing economy. That's a sign that inflation is eating away at people's ability to pay their bills, which we've seen reflected in not just record credit card debt, but people who typically pay their bills on time every month in full are now having trouble paying off their credit card every month. That's people that have money, because they pay off their credit card every month, are starting to fall a little bit behind. It gives them cover to hike more. I'm not sure what it portends for the economy. We're going to have to wait and see.
On earnings, it's been a mixed bag. Some of these companies did really well. I think Facebook was up 15% or something the other day. Meta (NASDAQ: META), I should say, in a single day and this is after they laid off a ton of people. They come out with decent earnings and if you look at the earnings growth of the S&P, which I've been talking a lot about, it's actually positive, not negative, which I've been saying. We've still got half the companies to report.
Gerardo Del Real: Yeah.
Nick Hodge: I think we're just over 200 companies that have reported. Then some companies are shitting the bed. Apple came out this week and had earnings and their earnings-
Gerardo Del Real: Amber Heard-ing it. Sorry.
Nick Hodge: Apple's earnings growth was -10%. Then the stock went up after they said the earnings were down 10%. We're in a phase where the whole bad news is good news, good news is good news, good news is bad news. The market is having trouble figuring that out. One of the new phenomenons that Keith McCullough has been talking about, but also the Financial Times is having a tough time figuring out, is these short term expiration options. I don't know if you've read anything about that, but these are options that expire in one day or less. You buy them in the morning, they expire by the evening. They were representing well over 50% of the option volume in the S&P.
Gerardo Del Real: It's insane.
Nick Hodge: What's interesting there, is that we talk about the VIX and how there's no volatility. Well, the Vicks only looks at options that are out a longer duration than that. They don't look at these short term options, which has thrown a wrench into the market. All that to say, this bear market rally has grown quite long in the tooth. If you look at the trend line, the S&P has actually poked its neck above it. These next couple of weeks are going to be make or break, to see if we remain in a bear market or if the S&P turns around, which I continue to believe.
We'll see what this next batch of earnings do. The other half in the S&P needs to report. I guess the last thing I'd add there, is that it's still being buoyed by energy stocks. If you look at the earnings that are coming in strong, it's the Chevrons (NYSE: CVX) and the Exxons (NYSE: XOM) that are propping the whole thing up. Interesting period for sure. Just some stuff to figure out over the next couple of weeks.
Geopolitics & Balloons
Gerardo Del Real: Look, not getting any simpler to figure out.
Nick Hodge: No.
Gerardo Del Real: We're now sending tanks to the Ukraine. Right? Initially, Biden and the administration came out and said, "It would be madness. We would start World War III if we did that. We have no plans on doing that." That's happening now. I've talked about the silent Cold War with China and how China wants to be the big man on the yard. Look, we just found a spy balloon over US air that initially everybody said, "Oh yeah, sure, it's just a decoy." But China came out and said, nah, that's our balloon. Our bad. It just so happened to fly over very sensitive nuclear sites all across the country. Oops.
It's not going to get any calmer geopolitically. We have copper mines in Peru, some of the largest in the world shutting down, because the locals are tired of having to beg to make a livable wage. I'm not blaming that on the mining company. I'm blaming that on the government that's put them in that predicament. What they see is an opportunity for upward mobility and they don't see the upward mobility being extended to them and they're frustrated.
This is a sentiment that's growing around the world. When I take geopolitical uncertainty, when I take the stupidity of our political class, especially here in America, but largely throughout the world on all sides of it, it's not going to get any easier to forecast some of these things. Again, I think we really should be focused on brushing up on our jurisdictional risk. I am taking some risk off the table as it relates to certain countries. The subscribers will get that first, obviously. I am starting to get overweight into jurisdictions like Quebec, overweight North American stocks on the uranium side. I just recommended a trade that's heavily focused on domestic uranium projects here in the US.
Look, there's actions to take, defensive actions, but you could be aggressive with those defensive actions if you're able to take those defensive actions in a sector that has overwhelming positive fundamental — sectors like the lithium space sectors, like the uranium space. You can do both. One of my favorite boxers of all time, Sugar Ray Robinson, wasn't just great offensively. He had some great defense to him as well. Roy Jones Jr. another one. He can make you miss seven punches before he hits you with the knockout punch.
You can do both. You can be defensive and also be aggressive. You just have to know when to say, "When," as the old commercial says. Right? That's what we try to do here. Hopefully that helps for some of y'all.
Nick Hodge: Yeah. A tip outside of the newsletters and the recommendations on how to spread risk, I don't know if you saw, you probably did, Sprott was out with a bunch of new ETFs this week. Right?
Gerardo Del Real: A lithium one.
Nick Hodge: There's a lithium junior ETF, right?
Gerardo Del Real: Yeah.
Nick Hodge: There's a Copper Junior ETF and there's now a uranium junior ETF.
Gerardo Del Real: Mm-hmm.
Nick Hodge: These are some smaller companies that are in there for sure. You don't have to necessarily be right by picking individual stocks if you don't want to take my advice or Gerardo's advice or you don't like buying individual equities that are penny dreadfuls, as Rick Rule would say. You can buy these new ETFs that do a pretty decent job of spreading out that risk and owning some of the quality junior stories all in one single basket. You might want to spend some time researching those. I was scrolling through the holdings of the uranium and the copper one this week, and they look pretty good.
Gerardo Del Real: They got 2% of their holdings in Patriot. I couldn't help but notice that in the lithium ETF. That was interesting to me. Yeah. Anyway, I'll save my personal story about when I told them at C$0.50 cents that this thing was going at $5, he started laughing at me and kept telling me to sell all the way up. Anyway, another story for another day. Any thoughts on the Chinese balloon that just happened to float over nuclear sensitive nuclear sites? You got to be fucking kidding me, right?
Nick Hodge: That's a recent story. I haven't had a chance to dig into it a lot. You say over top of nuclear sites, more specifically over top of intercontinental ballistic missile sites. It's very high. People were saying, "Why don't we shoot it down with a plane?" It's like at a 100,000 feet and F16 can only go to 50,000 feet. I'm not sure if it can shoot to a 100,000 feet. I'm not a military strategist or expert, but we haven't taken action yet. Then the other thing that's interesting is I saw a lot of snarky tweets about, "If you're worried about the balloon, you should probably delete TikTok off of your phone." Something like 80 million Americans have TikTok on their phone, which is a Chinese app.
I know there've been some efforts in Congress to ban that app. We'll see where this goes, but definitely echoes of a Cold War in intelligence gathering and in posturing, and then elected representatives getting worried about technology that comes from China. And that translates to other places. Who was I speaking with about... Who the hell was I talking with about China's influence in the metals markets?
It was Stephen Quinn and he was talking about the antimony, and he would go to the US government and say, "Hey guys, where are you going to get your antimony from?" They were like, "Oh, we just can buy it from Acme Supply Company or whatever." Stephen was saying, "Yeah, but do you know where that antimony comes from?" They were like, "No." It's like, "Well, it says stamped right on the bag, processed in China or whatever." Then he was talking about some other country, I forget, I think it was Bolivia. They were like, "Oh, we can get it from Bolivia," and Stephen was like, "Yeah, but the Chinese own all the mines in Bolivia. Where are you going to get your antimony from?" It took them literally a decade to realize that China had locked up all the supply for antimony.
That's just one metal or mineral that we're talking about there. It's similar with the processing capabilities for lithium and for the copper and rare earths and on down the line. That Cold War is really making countries rethink where they get their raw materials from and who they let invest. We didn't talk much about it on this podcast, but Canada came out in December, I believe it was, and said, "We don't want Chinese companies or state-owned corporations investing in Canadian lithium assets," and so told companies to divest, have their Chinese investors divest. Yeah, that kind of went off topic there. I know you were talking about the balloon, but the balloon is just one of the things that are there.
You still got Russia to deal with. You mentioned the tanks and stuff like that. They're starting to talk now about sanctioning Russian uranium, for example. A lot of tailwinds that come with these unfortunate geopolitical events. But again, if you had the foresight to think some of that stuff through as your investment thesis like we have, then you knew that all that was going down and you positioned accordingly. I'm not out there owning companies that are backed by China or Chinese ADRs or anything like that. I'm very conscious of jurisdiction as well.
Gerardo Del Real: Yep, yep. Well said. Why does Biden's own legal team and advisors, why are they trying to get him out of there? Every week, they put out-
Nick Hodge: They don't think he can win the election.
Gerardo Del Real: Every week his personal attorney says, "I'm recommending that the FBI go raid this house over here. I'm recommending..." I'm looking at this and I'm going, "With Trump, we knew that it was his political enemies that were leading the charge to go and find classified documents. With Biden, it's interesting to me that it's all his own staff." It's all his side that's like, "Oh, but have you looked there? Okay, I know you found it in the Corvette, but have you looked at the beach home? Oh, by the way, the Hunter Biden laptop, that was a real thing. We were just kidding about the fact that it was Russian misinformation."
It seems like every week they try something new. Much like when Trump had scandal after scandal, I think people on both sides are so fed up with politicians in general that everybody's like, "What will be, will be. Let's just let it play out, until something breaks."
Nick Hodge: I mean, I don't have much to add there. I haven't followed the stories too closely as you know, and it's not just him. I mean, other top level officials, they found documents at Pence's house, for example. It's just one of those things. I take it back to the two-tier justice system, "There's justice for me, but not for thee," or vice versa, depending on who's saying it. But yeah, they operate with a different set of rules and seeming impunity.
You talk about maybe tongue in cheek about them wanting him out of there, but I often wonder, "What's the next election going to look like? I mean, I don't see Biden having the energy level and the approval rating to go out there and beat a Ron DeSantis." I don't think Kamala can win. I mean, she makes me cringe. There's nobody out there for me that's like, "Oh yeah, I'd vote for that guy." The next election cycle is going to be interesting, as they all are. But as far as the documents themselves, I haven't paid too close attention.
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American Police Gone Wild
Gerardo Del Real: Look, if you follow this podcast for quite some time, you all know I have a childish brain. Here it comes, right? While you're saying all this about the documents, I'm thinking, "Everybody's doing it," right, and then immediately I thought about the Tennessee police officer that literally was just kind of... Listen, no sex shaming here and no slut shaming here. I am nobody to judge anybody's sexual habits or appetites. I don't like it when it interferes with professional environments that could affect the livelihood of somebody.
We're going to segue into Mr. Tyre Nichols here in a little bit, because that was also in Tennessee, though that was in Memphis. But I just thought everybody's doing it. I thought about that female officer. For those of you not up to speed, there was a female officer in Tennessee that was fired for inappropriate relationships with a large contingency of the police department that she worked for. The part that was problematic for me is that a lot of these hookups, orgies, trains, however you want to describe them, were happening on the clock.
Nick Hodge: And in or on taxpayer property. Right?
Gerardo Del Real: That's the part that gets me. I have no problem with anybody doing whatever the heck they want to choose to do with their own personal life. You want to be gay, you want to be bi, you want to swing both ways. You want to have orgies, have at it. Have an absolute blast. Make it consensual and be safe out there, folks. But I do have a problem with this stuff going on on company time with taxpayer dollars, when you should be out serving and protecting, which is what you should be doing. I've seen a lot of the memes and a lot of them are hilarious.
Nick Hodge: Sure.
Gerardo Del Real: But all of the stuff focuses on the actual sexual behavior, and that to me is the least problematic part of it. The most problematic part about it, is that it was happening on company time. When I see that happen, and then again, because my brain just makes odd connections sometimes, and I think about Mr. Tyre Nichols and the absolute execution via a beat down that took place in Memphis, when this kid was just driving to his mom's house, was blocks away from his mom's house, pulled over for a traffic stop and was literally beaten to death.
I mean, I don't recommend anyone watch the video, because I watched it. I tell you, it made me hurt for humanity and it made me angry, Nick. But he was given 71 contradicting commands during a period of 13 minutes, and they absolutely beat the living life out of this kid. I don't think that one culture of irresponsibility is very different than the other one, as it relates to “we think so little of our citizenry, that we can have an orgy on company time in company vehicles, on company property, while we should be out protecting and serving, because we don't really give a fuck about you.”
Nick Hodge: Right.
Gerardo Del Real: Which is the exact attitude that the officers... I hope they put these assholes under the prison, but I hope they put them in general population for a little bit, just to see how tough they really are. Just get them in there for a couple of months and let them go get busy. I have no more words, other than to say that it's an absolute tragedy. I hope that Mr. Nichol's family finds some sort of meaning and peace in this horrible, horrible, modern-day lynching of a human being via a beat down. That was just horrific. Yeah, again, we need to hold our institutions a whole hell of a lot more accountable. Because you've said it many times, Nick, everybody talks about bad apples and bad apples and bad apples.
Nick Hodge: Right.
Gerardo Del Real: It wasn't just the five black police officers, it was the sixth police officer who happened to be white, and the color doesn't matter to me, right? Happened to be the white cop who tased him and said, "I hope they beat the living out of this guy." It was the EMTs that let this boy sit there, this man sit there for 20 minutes.
Nick Hodge: Yep.
Gerardo Del Real: 20 minutes on the ground, bleeding internally with his head busted open like a pinata and didn't render any aid. Zero CPR, zero treatment, zero oxygen, none of this stuff. It is just, I can't believe in 2023 we're still doing this. I don't have any other words other than to say some of these institutions, I am not a defund-the-police guy, because I come from a town where I know the consequences of having zero law enforcement, but this approach to law enforcement can't continue. There has to be a revamping of the system. I want better trained officers. I want more accountability. I want qualified immunity to end.
Nick Hodge: Yes.
Gerardo Del Real: I want to quit paying out these lawsuits with my taxpayer dollars. If I'm not the one that's beating the living shit out of people and killing them, I don't want to write a check for it. You take it from the pension funds of the police department. You take it from the police department's private stash fund. You don't take it from taxpayers. There's so many things we can do, like with gun ownership, that are simple solutions that don't take away guns or don't take away police officers from the streets. But man, there's a smarter way to own guns and there sure is a smarter way to police and this ain't it, y'all.
Nick Hodge: Yeah, maybe taking it out of the police pensions would make some of those good apples speak up, which they rarely, I won't say never, but very rarely seem to do. Even in the case of the sex stuff, which is where I'll start. It wasn't some other cop who turned them in. It was ultimately the mayor of that town that got ahold of some information and then went to the chief of police and said, "Hey, you got to investigate this, man." It's not like other cops were turning them in, despite them knowing it was going on. I've said it a lot.
Gerardo Del Real: Yeah.
Nick Hodge: It's not just the police killing people, it's all kinds of stuff. I mean, look up police shooting dogs or look up police beating their wives and you'll see cases every single week where there's an officer here or there or somewhere that's doing that sort of stuff. It's a culture thing. Then, when you know have qualified immunity and you know you're going to get put on paid leave or you're going to be able to transfer to another department, then it creates a culture of those good apples that everybody says are out there not stepping up to do anything.
Then in the case of Mr. Nichols, that was appalling and a couple of things stick out to me. One is that we still really don't know why he was pulled over. Why was some task force pulling him over? These officers were part of a task force. I've talked a lot about the ‘gun trace task force’ in Baltimore.
Gerardo Del Real: Baltimore.
Nick Hodge: Anytime you have a small sub-sector of the police force that are given special privileges and are given special tasks, it further breeds that culture of, "We're untouchable, we're not able to be regulated. We're here to do the regulating." Whether or not that's inside or outside the law. Then they named themselves things.
Gerardo Del Real: Scorpion Unit.
Nick Hodge: Right. Why do you got to be the Scorpion Unit? Why can't you be the Protecting and Serving Memphis unit? Right? No, because that's part of that whole culture thing. Kicking down the doors. I've talked about the police recruitment videos with the MRAP vehicles and that's the sort of culture they want to permeate and perpetuate, I should say.
Then, you get an incident like this where it escalates so fast, you can't even determine why. Why did they get him out of the car? Why did they start beating him immediately? Then, you have a gentleman here who is fearing for his life and so no wonder he wants to take off. I mean, they're fucking kicking him, holding him up and taking turns kicking him in the head. I mean, running shots. I watched the video.
Gerardo Del Real: Yeah, I watched it too.
Nick Hodge: Crazy. Then, you see, I will bring race into it a little bit. You see these offers immediately terminated. I have to wonder if they were white, would they have been fired so quickly? Then, last point I'd make is in their initial report to the... Well, two other things I'd say, the initial report never is actually what happened once you see the video. Then the contradictory commands and also it seems like they're trained to say things like, "He's going for my gun," or, "He's got a gun," or something like that, because they know that they're on camera.
It's not like they don't know they're on camera. Right? They know the things to say to leverage the system that's in place, that qualified immunity and things. They know the things to say while they're committing the atrocities like that. No doubt that was an atrocity.
Editing the Genes of Your Food
Gerardo Del Real: Absolutely, absolutely. Let's lighten it up a little bit. Let's talk about alligators, catfish and meat plants, Nick.
Nick Hodge: Let's do it. Oh, shit. Then, yeah, we got to have to wrap up. We've been going 40 minutes already.
Gerardo Del Real: Yeah, yeah, yeah. I know. We told everybody last week this one would be action packed. Got all sorts of action going on.
Nick Hodge: I'll try to make it quick. We know that there's this whole plant-based food movement. People are trying to eat less meat.
Gerardo Del Real: They want me to eat the bugs.
Nick Hodge: Right. I was going to say either for health reasons or for climate reasons. We know that meat is energy intensive. It generates a lot of carbon emissions, methane emissions, et cetera. At the same time, we also know that we've made great progress in gene editing and things over the past couple of years. Two quick stories that are worth keeping a pulse on or keeping your finger on, just to see how they develop. One is we're trying to farm more fish, because there's depleting sea stocks and there might not be enough wild seafood to meet demand in the near future. They've had success doing that with salmon.
But the second biggest crop of fish that's farmed is catfish. The problem with that is when catfish are held in quasi captivity or in a farming environment, they develop this disease that ultimately they get lesions and sores on their skin and they die. The people farming these catfish lose a portion of their crop. I read this in the MIT Technology Review, they took the gene-
Gerardo Del Real: Told y'all he was smart.
Nick Hodge: They took a gene from an alligator, because alligators are resistant or immune to this disease that causes the lesion that the catfish are getting. They spliced the alligator gene into the catfish to make them not get this disease to get the lesions. We're putting alligator genes into catfish. Then they were saying, "Well, we don't want these fish to be able to reproduce because we don't know what would happen, basically. We don't know what would happen, because we've never done this before. This is some science fiction shit, and so they wanted the catfish to be sterile as well.
Gerardo Del Real: Oh God.
Nick Hodge: They're editing the gene that allows the catfish to reproduce. They're putting in this alligator gene and they're making the catfish sterile. I just thought that was interesting. Something that I'd be interested in keeping tabs on. Not sure I'd be wanting to eat without some serious studies, some catfish that had been fused with alligator genes. I know alligator is delicious. I know you like alligator too, but-
Gerardo Del Real: I love me some alligator and I love me some catfish.
Nick Hodge: I don't know if I like alligator in my catfish. Then, the other thing I was reading, and let me just click on that real quick so I get it right, there's this new company listed on the NASDAQ called Moolec Science (NASDAQ: MLEC), M-O-O-L-E-C. This is on sort of the plant-based side of things, not-
Gerardo Del Real: Already don't like it.
Nick Hodge: Right. Listen to this. You know how we've got Beyond Meat and Impossible Burgers. They're not doing that well, because the texture's not great and it's expensive. Well, this company, Moolec Science is inserting pork and beef genes into soybeans and peas, so that the plants have actual meat-based protein because they've got, as I just said, beef and pork genes in the plants. Now we're putting meat genes from domesticated farm animals into plants. That's it. Those were the two stories I wanted to talk about. That's a publicly traded company Moolec Science.
Gerardo Del Real: It's a bizarro, bizarro world out there, folks. That's why we titled this Investing in Bizarro World many, many years ago. This was a great session, Nick. We promised a longer episode this week. I'm supposed to remind you all to make sure that you check us out dailyprofitcycle.com/subscribe to never miss our updates and all of our market commentary. I am Gerardo Del Real, along with Mr. Nick Hodge. This was episode number 204 of our weekly therapy session that we call Investing in Bizarro World. Mr. Hodge, send us off.
Nick Hodge: It was good meeting some of the listeners in Vancouver. Thanks for listening and continue to do so. Have a great week. See you.