Bizarro World Episode 153: How to Invest in a Stock Market Crash

The past few weeks have been more bizarre than normal. The stock market is correcting. Gold is acting like it's supposed to.

We have two high-quality private deals that are open for high-net-worth investors.

Prince Andrew might go to jail.

Joe Biden misses some major policy initiatives.

Did Microsoft buy Activision so nerds could have meta-sex? Maybe.

We're all losing a bit during covid. 

Table of Contents

2:05 Gold & Silver Looking Good
5:30 Golden Liferafts in the Storm
8:45 Will Rate Rises Kill the Housing Market?
11:43 Quality Private Deals Now Open
18:05 Is Prince Andrew Going to Jail?
24:00 Is Chamath Right... Does No One Care About Uighurs?
32:23 Joe Biden's First Year: Failures and Successes
42:15 Jay-Z the Lobbyist?
46:32 Did Microsoft Buy Activision So Nerds Could Have Meta-Sex? 
54:05 We're All Losing It a Bit During Covid
1:00:15 What We're Watching in the Markets

Gerardo Del Real: Gold's got its mojo back, looking good. The dollar's still looking solid. Crypto's looking wobbly. Prince Andrew, you got away last week, I got you on the sheet, you're not getting away this week. Everything is getting taken from Prince Andrew. He doesn't even have a Twitter account anymore. We'll talk the Biden press conference, what a disaster that was. We'll look back on the first year of this administration, the pros, the cons, and all the in-betweens. A lot to get to. As always, I am Gerardo Del Real along with my co-host, Mr. Nick Hodge. This is episode 153 of Bizarro World. Mr. Hodge, how goes it?

Nick Hodge: It goes very busily, Gerardo, as I know it does for you. I can't believe a week has lapsed already. Things are moving quickly in the market. You should be separating the signal from the noise very much this week and into the end of January here, and we'll talk about it. I can't believe it's been a year of the new administration. Sometimes I forget who's even in office, and that's a good thing.

Gerardo Del Real: So does he.

Nick Hodge: That's very funny. I'm doing great, Gerardo. How's it going?

Gerardo Del Real: It's going well. I'm trying to start the year out peacefully, I'm trying to start the year are out on a positive tone. Every now and then, you get those that will remain unmentioned because I will never give you the attention that you want you little prick. But every now and then, you get a mention here and there that makes me chuckle. And so the show today is in that spirit. It's buy a vowel, have a great time, go write some more and go make some more things up and just keep busy cupcake. That's it. So we're going to have great energy in 2022. That's what we're going to go with.

Nick Hodge: You need at least two vowels there I think, Gerardo.

Gold & Silver Looking Good

Gerardo Del Real: Well I told you I'm not a writer. I'm just a stock picker who happens to write, that's it. So no, I focus on positive energy for the year. Definitely not wanting to feed into any of the fodder that gets people's panties in a bunch at times. And no, really excited about 2022. Jokes aside, I think it's going to be a spectacular year. I think the precious metals market is off to a very, very solid start here. I think that's a great place to start. We have silver above $25 again, we have gold flirting with $1,850. Your thoughts, Mr. Hodge?

Nick Hodge: This is going to be meandering as I guess it is every week. We've got to rewind the tape a little bit I think back to Thanksgiving when we started talking about the selling, we had a sell off, inflation was starting to slow as evidenced by the dollar gaining strength and bond yields starting to slow their ascent. That's picked up here recently as the Fed jawbones for higher rates. But the other thing that's going on is that growth is slowing in a couple of ways. The GDP is going to slow very much in the Q4 and certainly into the spring versus what we saw in Q3 in 2021.

You'll remember in 2021, it was "Buy the dip, buy the dip, this isn't going to crash yet. We're going back to all-time highs." That was all year long. And this time it's different. It's not buy the dip and I think people are getting a little swept up in it because as I just mentioned, the growth is going to slow. Earnings are going to slow as well. So the Q2 and Q3 earnings, the year over year comparisons we saw last year would've been compared to 2020, which would've been when the entire world was locked down. And so you literally saw S&P growth rate's 100% and then a quarter after that 40%, and then at 30% some growth.

Bulls are out there shouting, "Now you're about to see four quarters plus 25% earnings growth," and that's great, but the chart is going like this, from 100% as I just said, stepping down. The earnings growth is not going the right direction. And certainly with the inflation still in the system, it was fine when GDP was making up for it, but when GDP's not running hard and earnings are slowing into rates rising, it's bad for stocks. So what you've seen is that materialize in earnest now from the little showing of the knee in November or December to revealing the whole leg here in January.

And if you haven't reduced some of your exposure to some of, they're not asset classes, but some of the sectors of the stock market that did really well last year, you should get on that. And that's what I mean about separating the signal from the noise this week. Tech looks like shit, banks look like shit, all those meme stocks look like shit, crypto continues to be rough, and people are going to safe havens. You mentioned gold, utilities are strong. What else do you want to talk about? That's it. Reduce your exposure to equities. I don't know how else to say that.

Golden Liferafts in the Storm

Gerardo Del Real: Let's get into that. I think we should carve that out and separate it. You talked about what looks bad, what looks like shit in your words. I hate to sound like a bragger, my little resource portfolio's looking pretty damn good the last couple of weeks, and that's just the public portfolio. That doesn't take into account the checks that you and I have been writing for the past six to 12 months when nobody wanted to write any checks of consequence into a lot of these sectors. The gold space, copper didn't get hot until after New Year this time last year. We were ahead of that a little bit. Lithium, same thing. And so there are opportunities in the market, but I love the comment about the signal and watching the change.

I don't think it's a coincidence that while the market's slid, volatility's going this way now. That's something we didn't have for a while. It was just new record highs, new record highs, new record highs, new record highs. Well here we are, it's been a couple of weeks since we had a record high and everybody's yelling for, "Jerome, Jerome, get in here. Help. Help. Stop the madness." And it doesn't sound like, at least initially, the Fed is going to cave in and not hike. Does the Fed hike 25 basis points? Does the Fed hike 50 basis points? Does it matter? I think it matters for a quarter or two if you have large exposure to those main sectors that were the darlings over the past several years.

But I think if you diversify into some of the other sectors that have been beaten down so badly, I think the baseline, and I'm talking gold equities right now, the baseline for gold equities, I think it's an excellent entry point if you haven't wanted to dip your toe in the water because you were afraid of what was around the corner. I think we have a very, very supportive environment for the gold stocks.

Nick Hodge: Yeah, especially, I'll do the same old song and dance. With gold over $1,800, a lot of the producers look really good. Look at like Barrick Gold (NYSE: GOLD) did this week for example, that stock almost gapped up, certainly had a wide candle to the upside. And so when money's coming out of the stock market, it goes into other places. One of the places it's going is into gold. And so as long as the entire sky is not crashing down, the related equities will do good as well. That's the large royalty companies first and the producers and then on down the line. Like you mentioned, your portfolio is looking good. The resource portfolio same this week. When I sorted by the percent game column a couple of days this week, some of the smaller juniors were up 8% to 12% a day.

They're coming off such a low baseline because everybody threw everything out after the gold price hit a record in 2020 and there was other places to make money including cryptos, "Wink, wink Gerardo, here comes the soldiers." That money's got to go somewhere now. So gold equities look like a good place for that to be, especially as some of them continue to offer yield that is above what the general market and bonds are offering.

Will Rate Rises Kill the Housing Market?

Gerardo Del Real: Let's talk about yields. You have the 10 year which is right up there close to the 1.90% mark. You have mortgage interest rates still at almost historic lows but they're hitting two-year highs. You talked about the slowdown with the financials, tech. Do you see a slowdown in the real estate space now that yields have trickled up or do you think that the move isn't really too consequential? Because look, a 0.5% interest rate move higher if I'm refinancing, pick your number, $0.5 million home, $1 million home, $100,000 home, whatever it is, that extra 0.5% isn't really consequential for most people that are able to refi in this environment.

Nick Hodge: It's a complicated and quasi-long answer. The affordability-

Gerardo Del Real: That's why you are here, Mr. Hodge.

Nick Hodge: ... The affordability to buy a house even with a small uptick in rates as you mentioned is still good. Historically, it's still better than renting, and so that's important. There's large fundamentals driving it in that the millennials are a huge cohort that have to buy houses. I'll probably butcher this a little bit, but I think it's something like every year for the next four or five years, there's like five to 10 million millennials hitting that 30 to 35 window where they're having kids and buying houses. Plus, I don't think the rates go this way forever. We'll see if they do raise rates, but I think housing is one of those safe havens, you throw it in with gold and you throw it in with utilities.

I was looking, before the legs fell out of the market there in the past 30 minutes today, the REITs and the utility sectors were doing okay. I was buying them towards the end of the day. Actually, it's been a crazy week because I've taken that money that was under management, it's now back under my management. And so I'm rotating that money. It's a lot of work especially with the volatility as you mentioned that was in the market this week, but getting out of the dumb fucking funds that I was in.

Gerardo Del Real: I'm not laughing at you, I'm laughing with you.

Nick Hodge: ... That were just tracking the S&P, but were charging me portfolio management fees to do that like active beta funds when you could have just bought the SPX for example and paid a much less portfolio management fee. So anyway, I'm unwinding some of that stuff, but pecking into things like utilities, and you mentioned the question was about housing, so I was buying that today. And as you know I'm in the market to buy more housing and you own a couple yourself. No, I think housing is a bullish and a safe haven.

Quality Private Deals Now Open

Gerardo Del Real: I'd be remiss not to mention now that you have even more freed up capital that I'm sure some of that capital is going into a deal that we're both writing a check for here this coming week. I think it's one of the better deals that I've been able to help finance in quite some time, that we've been able to help finance. We're both going to participate on that front quality management team, world class team, great supporters, phenomenal tier one potential asset. One of those that I think it's going to be a 50-cent placement. And I think in a few months, IPO at a $1.50 or so. And then there's a lot of runways. It's by no means one of these plays where you get in, you sell at $1.50 in five months and you're good to go.

This is one that I think's going to be exciting for years to come. Any thoughts on that deal that's coming up, Nick? We can put a link up maybe by the time we publish this because if you are an accredited investor, and again, if you're allocating any kind of capital to the resource space, this is one that you absolutely should be involved with.

Nick Hodge: Yeah, important distinction in that the capital you would put into this deal is different than the capital that I'm buying mutual funds and ETFs with. Little bit different goals. Excited about this deal for a number of reasons, some of which you mentioned, very large asset has had a lot of money spent on drilling on it already that so you know what's there. It's brought public independently for the first time. It had come out of a portfolio of a major. It has people involved that really know what they're doing on multiple fronts, not just country, but with the specific metals involved in this asset, the style of mineralization that it is, not just how to extract it but how to sell an asset like that, which was recently done by some of the board members. And then people there with significant capital markets experience that know how to get people aligned with the story and walk it out. And of course, the macro environment ripe for all the metals that the deposit contains.

Gerardo Del Real: The palladium, platinum, rhodium, nickel, gold, all the good stuff.

Nick Hodge: You and I have been talking about the catalytic converters for a while. I've been saying you don't want to be the guy stealing the catalytic converters and trading the metals for $50. You want to be the guy who owns the assets where the metals for the catalytic converters come from. And that's not going away. Look, catalytic converter thefts were back in the news recently. I was going to talk about that a couple of weeks ago but didn't, and then I flipped on the news this week randomly and it was back on there a again. People are going into church parking lots is the new thing now and knocking off all the vans because they could just roll under van to van to van, grab all the catalytic converters and go out with them.

Gerardo Del Real: That's not funny, but you know what did make me laugh?

Nick Hodge: What's that?

Gerardo Del Real: It's an article about a guy that had his truck sticker in the decal said, "Come and take it." And somehow, he went and took his catalytic converter, took a picture and said, "Just did." Words have consequences people. Words have consequences. You've got to watch out what you ask for.

Nick Hodge: That's funny. So the PGM's obviously in high demand and the nickel and the gold. And so, if you can get in at multiples below what the next round is going to be offered at, that's how you make money in the private side of things. It's been a rash of good deals recently. We talked about an oil deal on the last episode. We both had this deal available to our accredited subscribers. In the next week, we're looking even beyond that a bank that I'm looking to get of people in on the private side run by a team who over the course of 20 years from the late '90s to the mid 20 teens and sold it for $2.5 billion.

So serving a niche market that we both operate in, the newsletter space, and so we'll have the potential here to literally own the bank early, if you know anything. But if you watch Game of Thrones or if you know about who controls the money supply, being the bank is a good thing. If you ever played Monopoly, for example. And so, if you can own the bank and the assets and the dividends and the cash flows that come with that, especially from inception. Listen, you can buy a significant chunk of these deals as well. Sorry, a little bit of a rambling answer, but-

Gerardo Del Real: It's a good answer.

Nick Hodge: In the case of this bank, the pre-money valuation is zero and the post-money valuation is whatever money comes in in this round.

Gerardo Del Real: It's a great entry level, a great entry point. I like that level.

Nick Hodge: You can put up $100,00 and own a percent of the bank is something like the math works out too, I was doing this week. Anyway, private deals, the cheaper the shares the lower the valuations, the larger percent of the company you can buy with less capital, which is what allows those shares to go up by multiples.

Gerardo Del Real: Well I'm happy to see they let little old us into all these deals recently that have been pretty darn good. Some luck is always involved. As always, they don't all work out. But it's been a solid, solid, solid I think 12 to 18 months here recently. And I think as we refine our vetting per process and really lean on our network to treat our subscribers and us on favorable terms, I think it's starting to show in the results that we're getting.

Nick Hodge: Absolutely.

Is Prince Andrew Going to Jail?

Gerardo Del Real: You know what else is starting to show? I think Prince Andrew's going to jail for this one. I think he's going to prison.

Nick Hodge: Well it would be nice. We missed the story by a week, but I'll go ahead and recap it. You guys will remember he's accused of sexually assaulting minors involved with the Jeffrey Epstein sex trafficking ring, let's call it that, which Ghislain has now been found guilty of aiding or betting or however you want to phrase that. And so, Prince Andrew is now not immune. We know that he gave that awful interview however long ago that was now that didn't make matters any better for himself. The Queen has got to be shaking her crown -aden head at him and has now, as you mentioned at the beginning, stripped him of his military titles.

Gerardo Del Real: Charities and the Twitter account, that's the one that was the tip off to me. The Twitter account says, "This account doesn't exist."

Nick Hodge: The thread is still being pulled so that's the good thing. Go ahead.

Gerardo Del Real: Look, anytime that there's this kind of a bad face where official Twitter accounts are stripped, military titles are stripped, charities are stripped. There's a reason why up until now, prince... Do I have to keep calling him Prince Andrew? I'm going to assume he's guilty so I'm just going to say... I won't say. I'll keep calling him Prince Andrew. There's a reason why Andrew was fighting so hard to get this case thrown out and dodging it, and not responding to subpoenas, and saying there wasn't jurisdiction. They have the discovery that's going to be turned over. They know exactly what they're looking at, so does the queen, I guarantee you. This is a preemptive move in my tin foil hat world to try to save face for what's about to come out now that we know the case is going to move forward.

There's already been a different settlement as it related to Jeffrey Epstein's role in the sexual assault of these teens. Money is not going to be as big a motivator for dissuading this witness and these witnesses from coming forward. We just saw that in the Maxwell case, where money wasn't enough of a deterrent, neither were NDAs, to prevent these brave women from coming forward and telling their story and having to relive all the triggers and all the nasty experiences that they ended up having to endure as a result of these fucking child sex traffickers.

And so look, I think we might get one that's finally indicted and I think we might get one that's finally convicted. And by "one" I mean a man, because up until now, there hasn't been much of that.

Nick Hodge: I think it goes all the way to the top. A prince of England is as far up there as it gets. And we know there are others. He wasn't acting alone. It speaks to really disenfranchisements with institutions across the board. And we've said this time and again, when you've got former presidents, and prime ministers and people in the justice system letting them sign deals to keep this stuff hidden, and those were the people who were telling you what to do in your day-to-day life, and setting laws that you have to live your life by. Of course, there's going to be animosity and distrust in the system, and it doesn't take a genius to look at a Pew poll and see the downward spiral of trust in institutions. Of course, that's aligned with the turning of generations, that people like you and me who have come of age and have reached maturity in the past 10 years have more who...

Gerardo Del Real: I don't know how much maturity I've reached.

Nick Hodge: ... Who don't stand for this. And so it's going to continue going. It relates to all sorts of things. That's like an octopus. Literally, it's the head of state, it's a figurehead, and that goes down into justice and why people don't trust justice and police. It goes into finance, and you've had CEOs of private equity firms and banks have to step down over this stuff. "Why should we trust our money with them or trust what they say about the monetary policy that we should set, when we know their true character?"

So at the end of the day, it's why really the people we trust are ourselves. A little bit of pontificating here. One of the reasons I just took the money back to manage for myself, tying things together, not wanting to rely on another institution, not wanting to trust other institutions for anything, financial upside or ethical guidance or anything like that. Really wanting to, A, do it ourselves and show other people how we've been able to do that. So that's really the mantra and the vision behind Digest Publishing. It's only just getting going. The trials are only just getting going. The turning is only just getting going. This decade is only just getting going. This commodity and precious bull market is just getting going. And the rebuilding of institutions I think is just getting going. That's why it's a Bizarro World, so you might have to deal with us for another 150-some episodes.

Is Chamath Right... Does No One Care About Uighurs?

Gerardo Del Real: You might. Let's see. Speaking of pricks, and this one surprised me because I liked the guy up until now. I certainly didn't like the comments. I'd like to think I'm practical enough to separate an opinion I don't like from not liking the person or not liking a person's work. But Chamath Palihapitiya, and I know I'm butchering his name, did you see those comments this week?

Nick Hodge: I saw the comments about nobody cares about the Uighurs. Go on.

Gerardo Del Real: I thought it wasn't just what he said, it was the fact that... I don't think most Americans or most people in the world are even on a very basic level educated enough about what's going on to even form an opinion. I had to do more research about how egregious and how horrific a lot of the alleged abuse that China is imposing on what amounts to-

Nick Hodge: They've got the trains set up, yeah. And the camps.

Gerardo Del Real: Literally, the camps, the trains, the facilities, the systemic rape. I'll put a link up to an article because I don't want to recite it. Full disclosure to anybody out there that's triggered by content that includes sexual assault and all the horrific stuff that goes with forced sterilization of women and all of that, don't read the article, it's pretty detailed. But I know that Chamath is educated enough to understand what is happening. For him to be so certain, and he reiterated this, there's a 20 second clip, I'll put a link up to that. He didn't say it once, he said it twice. He said, "Nobody cares." And then when the host of the podcast that was interviewing him came back and said, "What do you mean, nobody cares?" He gave him an incredulous look like he was crazy like, "What do you mean?"

Gerardo Del Real: Chamath came back and retorted and he said, "Well I know you care, but when I wake up in the morning, that doesn't meet the baseline of me caring. I don't care what's going on." So for him to know what's going on and still be able to be that forceful and double down on the comment that he didn't care, that part was surprising and that does make me look at the guy in a bit of a different context. I'm a capitalist at heart, I'd like to think I try to do well with the good fortune that I've had and the good luck that I've had and the hard work that is paid off and hopefully continues to. But I admire Chamath, whatever the name, for a lot of his business acumen. But this just seemed really cold-blooded and it seemed out of tone.

I don't know if it's one of two things, he let his guard down and that's who he really is, or he just had a moment where maybe he was arguing with his wife or his business partner or something. And he was just like, "Look, I got other things on my mind." I don't know, maybe he's got a sick child at home. I'm always willing to give someone the benefit of the doubt, but I was surprised and I was surprised that he doubled down. And I was surprised that someone as intelligent as that guy would be so forceful about the double down.

Nick Hodge: It's a pretty dumb thing to say and I'm not going to defend him, but I've got I guess a couple things of my own to say. One, not all his investments have been great, especially in the SPAC unfolding or unraveling that has happened in the past year and so, he's got bigger personal problems certainly than what's going on in a foreign land.

And then, as far as the comment about China is concerned, I don't know if he was saying it for shock value or why he was saying it, but I will say this, "Obviously it's horrible." And obviously we care about it, we don't think it should to be happening. And at the same time, I can see where it doesn't resonate at the top of everyone's radar every day. I can't say that I get out of bed thinking about that or any other really global atrocities. So we all live in our own little bubbles and have our own problems and families and businesses and jobs. But that doesn't mean that you go out there and you say that nobody cares about this and you double down on it. We obviously have a range of causes that we care about.

We donate 1% of our subscription revenue every month to a different one, that a different employee picks including us when it's our turn. But I can't say we've given to any cause that is involved with the Uighurs or China. What I will say is that, you don't have to go out there and be a champion of a cause to support it. You don't have to be out there talking about it every day. You don't even have to give dollars to it. It's like the way I protest banks, I don't buy bank stocks, I don't give banks my money. Similarly, I don't buy Chinese stocks, I don't give China my money.

Gerardo Del Real: I do that with churches.

Nick Hodge: Yeah, same. You vote with your dollars, you vote with your feet and at the same time, you don't go out there and be a dick just to be a dick.

Gerardo Del Real: Look, I'll personalize it a bit. There was this horrific shooting here in Texas at a Synagogue and unfortunately there was a loss of life. And I'm not Jewish, I'm not religious, I respect everyone's faith, everyone has a right to their faith as long as you're not using that faith to abuse anyone, but of course I empathize with what happened. Of course I understand that the community is reeling from something where they're there in peace, practicing their faith together, and they have to worry about some asshole or assholes just coming into a church, taking hostages and starting to shoot at and kill people just for practicing their faith, not because they did anything else wrong.

So I don't have to be Jewish or religious for me to empathize. And is it the first thing that I think about every morning? Of course not. I've got to get the kids to school, got to make some coffee, I've got to check the market, all of the other things. But that doesn't prevent me during the day from empathizing and really caring at a basic human level. I guess that's the part about the comment that just struck me. Even the apology was a little bit like, "Look, I went through shit when I was a kid too." That's kind of what he said. I'll read it. He said, "On today's podcast, I recognize that I came across as lacking empathy." He didn't say, sorry. He just says, "I acknowledge that entirely. As a refugee, my family fled a country with its own set of human rights issues, so this is something that is very much a part of my lived experience. To be clear, my belief is that human rights matter, whether in China, the US or elsewhere." And then he ends with "Full stop."

You're almost the bigger prick in your apology statement if that's what you want to call it, than you were in the original statement. It's like, "Hey, I went through some hard shit too." That's like me sitting here going, "Back home in Zacatecas, I've known more people killed in the past three or four years than most of you know, period." I'm talking a lot, and just atrocities that you couldn't even imagine. So if every time something bad happened, a shooting in Chicago or a shooting at a Synagogue, I said, "Well I too have a shared experience that is far more newsworthy and horrific and tragic than just one or two people." What kind of asshole am I?

If then that's the apology, that's the statement to clean it up, it kind of makes me believe he probably is an asshole in real life and it is what it is. I don't know the guy personally, I wish him the best. I hope he was just having a bad day. The cleanup wasn't much of a cleanup, it didn't sound too good.

Nick Hodge: Well we'll see if he gets canceled, but at the end of the day, you can ignore him like I said about separating the signal.

Joe Biden's First Year: Failures and Successes

Gerardo Del Real: That's it. Have some empathy, be nice to people, go on and try to be positive and spread good energy in the world. Every now and then you've got to tell someone to go fuck themselves and you don't even have to do that, it's a personal choice. It's been an interesting week politically, Nick. Voting Rights legislation, do we want to get into that? Do we want to talk about the Biden press conference that I don't know, in the words of the famous poet Jay-Z, "I don't know why your advisors didn't forewarn you." Not for play, why would you put sleepy Uncle Joe up there for three hours. Are you all crazy?

Nick Hodge: I'm not even plugged into to either of these things. So Voting Rights seems a little heavy, but I'd love to hear about sleepy Joe.

Gerardo Del Real: Again, I have no dog in the fight other than I don't care for either side really, politically. I have very few politicians that I actually believe are acting in good faith on behalf of the citizenry. And there's a few, Lisa Murkowski, I like her out of Alaska, a Republican out of Alaska. There's a couple of others that I think have good ideas that I hope evolve. But the bottom line is, he was up there for three hours.

Nick Hodge: When? I don't even know when.

Gerardo Del Real: This was earlier this week, so it would've been last week by the time that this was published. So there was a little bit of everything. There was him ranting and snapping at a journalist. The one that really got me is they asked him about the situation in Russia and the Ukraine, which again, if we want to be capitalist pigs about it, it has huge implications for the uranium sector and that's something that we should keep an eye on, human aspect aside. But obviously, the very serious threat of a Russian invasion is something that again, for everyone in the region, I empathize and I feel for what that could possibly turn into. And when he was asked about how the US would respond, he said, "Well it depends if it's an all out invasion or a minor incursion." 

Nick Hodge: No red line, no hard red line.

Gerardo Del Real: Yeah. It was almost like him saying, "Just the tip. I did not have sexual relations with that woman." It doesn't count if it's a minor incursion. If there's one human being on the planet that you probably don't want to give some leeway towards, it's probably Vladimir. That's not the guy that you go, "Just the tip is okay Vladimir." Probably not the guy. So look, I don't mean to downplay the seriousness of the situation. I for the life of me can't understand why his advisors put him up there for three hours. I get that he is ranking low in the polls. I get that he hasn't had the best week with the COVID numbers, and a lot of that isn't his fault, but there are some things he should be held to account for.

Let's get into that. The one that irks me the most is one of course, that's near and dear to me, which is immigration. I've said repeatedly on this podcast, I am a huge fan of law, rule and order, and it's what makes America so great when we do it well. As it relates to immigration, I am so sick and tired of Democrats campaigning, every time there's an election, every time there's a local election, a midterm election, a presidential election its "Hispanic votes matter, immigration matters, we're going to get it right, we need you, we're the party that's going to get this done. The other side doesn't care about you, you know that because Donald Trump says mean things and he started putting up a wall, we're going to take care of that in year one."

Obama did it, managed to do nothing, droned the hell out of the Middle East, won a Nobel Peace Prize. Joe, same thing. Not a peep, nothing has passed. He can't even pass his Voting Rights bill in the US, which all the Republicans except for I believe Lisa Murkowski voted against. So I'm tired again of just politicians doing what they always do, which is just talking the book until it gets them elected and then completely turning their back on everybody but corporations. It takes us back to the conversation we had when he was elected and everybody said, "If Biden gets elected, the market's going to drop 20%." I said, "No, it's not." Everybody was like, "No, he's going to raise a corporate tax rate and it's going to be egregious and its socialism." And I'm like, "Are you serious? Do you follow this guy's track record?"

The one thing that I knew we had going for us Nick is, we were owners of corporations. And whether it's Republican or Democrat, I know both parties are going to get up there and they're going to do their bidding for us because that's the way the country is set up. Corporations do the whole thing. You know that by the Voting Rights bill that got passed down. All the Republicans except for Murkowski I believe, voted against it. There were two different bills that were up for a vote, they both passed the House, they both got shut down in the Senate. They don't want drive-through voting. It doesn't matter if you have the right idea or not. By they, I mean the Republicans in this case. They don't want to make election day a national holiday, which for a lot of people you can't take off of work, you have no more sick days, you need to pay the babysitter, "Well fuck the vote. I've got to feed the kids."

That's most of America. I don't care if you're Black, Brown, White, if you're not rich and you can't afford to drive to the polling station, and you can't afford to take the day off, that affects the ability for our democracy to thrive and for our democracy to really reflect what the people want. It's already hard enough. It's already hard enough with all the lobbying that goes on. That was another thing that was a part of this Voting Rights Act. There was a cap on dark money that could come in, anything above $10,000 they wanted it to be disclosed. They wanted to disclose who was in that dark pool of capital so that we would know, is this a foreign group? Is this a left-wing group, a right-wing group? We want to know who's influencing the elections.

I want to know. I'm big on accountability, I want to know. And so that was sht down. What else was shut down? Let's see, allow voting by mail with no excuses needed and voters could put their ballots in drop boxes as long as it was validated. No, they didn't want that one. Allow states to have early voting for at least two weeks, including nights and weekends. "No, we don't want that shit. Fuck that. Poor people might come out." And so again, what bothered me about the speech was immigration wasn't mentioned once in three hours, and that was a cornerstone campaign issue for you, supposedly.

This is supposed to be big legislation for the Democrats, this Voting Rights Act, they couldn't muster the votes for it and this is simple. Yes you can say that it's because of the filibuster and Republicans, and that's where the opposition came from. And maybe election time that party needs to have a conversation with its constituents. Look, I have tons of Republican friends that want to be able to participate in the democracy by having easier access to polling stations, by being able to vote online, by changing the way it's done. If we can verify all sorts of other things online, why can't we do this? They want to be able to go nights and weekends, they want to be able to go through a drive-through. Here in Texas, we want to be able to take more than three people in a car to a voting station without catching a misdemeanor. The stuff that's going on is insane.

I'll give you another one here in Texas again, personalizing things. They passed the thing back in December here in Texas that did all sorts of fuckery to voting access. They passed that in December and now the Texas Secretary of State's office is telling me that they're blaming supply chain issues for a shortage of voter registration forms. So Texas, one of the wealthiest states in the union, doesn't have enough fucking paper so that people can vote in a system that's already rigged to make it hard for poor people of all colors and backgrounds to be able to vote. It's insane.

Nick Hodge: Hand it out on belt buckles or something, I'm sure they've got enough of those?

Gerardo Del Real: It's insane what is going on right now and it's insane the stuff that we argue over and riot and protest about, and the stuff that just goes completely unnoticed by most Americans, most politicians. So hey, that's my rant on Voting Rights.

Nick Hodge: Well it's easy to see where they're able to get votes. You can get votes to spend money, you can get votes to send out checks, you can get votes for infrastructure when most of the money is going to go to corporations. But when you try to augment the justice system or change the way police are trained and funds are allocated to them, it's a dead end. When you try to pass cannabis legislation that includes alleviating the charges that are associated with prior convictions, it's a dead end. And when you try to get people the vote... In other words, it's easy to do things where you just print the money and help the corporations, and it's amzing how they don't get through things that are fundamental rights-based things for individuals.

Jay-Z the Lobbyist?

Gerardo Del Real: Very, very, very well said, and not only accept the corporation donations and all the other stuff, the dark poll money and all that. But then, you go ahead and front run your citizenry, the people that voted for you, your constituents by buying the stock of the policy you're about to affect in a nationally classified meeting. Some of these fuckers should be in prison right now with prince Andrew, with Ms. Maxwell. Again, pay attention you all, pay attention.

I'll tell you who's paying attention because he always stays winning. Mr. Sean Carter, Mr. Jay Z. I've said it before, hell of a run. He's doing his 50s right. Jay Z is trying to pass because he understands the power of lobbying and influence, a Senate bill S7527, where if it's passed, prosecutors would be required to provide both clear and convincing, these are legal terms folks, evidence that lyric cited as evidence are literal rather than figurative or fictional. Thoughts on that? And of course, it's the hip hop genre that would most benefit from this because it tends to be the most aggressive, because the stories tend to come from some of the most aggressive places in the world.

Again, this would be a law that would apply to everyone. It would apply to metal bands, it would apply to folk bands, it would apply to R&B groups, singers alike. And so it's meant and designed to where, if I write a thing and I say, "When I see so and so I'm going to smack him in the fucking mouth," and I'm writing this as a blogger or a journalist or a newsletter writer or an artist, and then that actually happens, you can't use the fact that I said that was going to happen in court. You have to separate the two. You have to separate the personality from the actual person.

I like the intent of the law. I would love to hear your take Nick, because I remember early '90s, there was a situation where Tupac Shakur was sued, one of my all-time favorite artists, but he was sued because I believe it was a state trooper was killed by someone. They ended up suing his estate because they said it was his music that motivated this guy in some other state somewhere to shoot a cop because that's what was playing. And so this is meant to separate that line between reality and entertainment and not having the two fuse.

Nick Hodge: If it's a different person, it's just like video games. Are you going to sue the video game because of a shooting or something like that? If it's the artist himself, if rapper Nick Hodge raps about killing John Doe and then rapper Nick Hodge goes out and kills John Doe, that might be a different story. But no, if I make a rap song and then someone else goes out and commits a murder that mirrors even that rap song, certainly it's not my fault for that murder. And so, I wonder what he's personally thinking of or what was the precedent that got him interested in this, or if it's just a niche cause of his.

Gerardo Del Real: I would hate to speculate for Mr. Sean Carter. Above my pay grade. But I do know this, he's always been extremely forward looking. This is a guy that couldn't get a record deal, he said, "Why do I need a record deal? Let me just start a record label." And then said, "Okay well that's cool. I think I'll sell clothes now and go make $40, $50 million from that. Let me start a close label." And then said, "Well the restaurant and bar business sounds awesome. I think I'll buy a franchise of those." And then thought, "Hey, the future is music streaming, it's not CDs. It's not that anymore. Let me go buy myself a streaming service along with some partners." I could go on. He's got a music production company. By the way, he is married to Beyonce, cheated on her, had a threesome on the side, got her back. That might be the biggest win of all.

And so now with this law, I'm sure there's a good reason. I'm sure there's a good cause. I'm sure it's forward thinking. I don't know what that is right now, but him and Tom Brady, I don't bet against those two guys.

Nick Hodge: Who'd he get to sponsor the bill?

Gerardo Del Real: Not yet. Let me see if I can look and say. We'll follow that up.

Nick Hodge: He can't just propose Senate legislation.

Did Microsoft Buy Activision So Nerds Could Have Meta-Sex? 

Gerardo Del Real: Yeah. Well he's got his team of attorneys and I'm sure they've got a team of lobbyists and we'll see. I'll follow up on that. I think that's great. You mentioned video games and I think it's interesting. I'm sure you saw Microsoft acquired Activision Blizzard for $69 billion, Microsoft with the 69.

Nick Hodge: That all?

Gerardo Del Real: That's all. Call of Duty, World of Warcraft, Diablo. I'm getting old because I don't know what the heck a Diablo is. I've heard of a Call of Duty, I've heard of a World of Warcraft. But no, look, $69 billion, which the last big deal like this that Microsoft did was $26 billion when they bought LinkedIn in 2016. So the metaverse is Meta-ing.

Nick Hodge: I think it was also one of the largest all cash deals in recent memory. Came at a significant premium. And so, we're getting to a point here where it would be easier to talk about companies and people who aren't involved in the metaverse rather than those who are getting involved. Because everyone's getting involved and the definition of the metaverse is going to get a little bit loose. Walmart's in the metaverse now was the story this week. I haven't even had a chance to read it so I don't know why Walmart's in the metaverse now, but I'll get to it. Nike's bought a company to design shoes in the metaverse. Now I'm not talking about designing virtual looking shoes, I'm talking about designing virtual shoes, digital shoes that an avatar would wear or something, for example.

Gerardo Del Real: If you have a virtual girlfriend, is it still cheating?

Nick Hodge: I don't know. That might be up to the individual relationship and the stakeholders in that to navigate for themselves. But Chris Curl had a great piece this week about... And I would venture to guess it's probably not cheating because he was talking about ways to envision the metaverse and how you can have a house in the metaverse with a Lamborghini in the driveway, just like you have a house with a Lamborghini in the driveway in Southern California, except that house and the car are all NFTs. And we've talked about this a little bit on this podcast, where the NFTs themselves are tools to mint cryptocurrencies and tokens. What's the joke, Gerardo?

Gerardo Del Real: I just wanted to ask my wife if I can have a virtual girlfriend. Give me two seconds. Babe, can I have a girlfriend in the metaverse? I don't think so. No words back just a look. That's usually a no go.

Nick Hodge: Everyone's feet are bigger in the metaverse Gerardo.

Gerardo Del Real: Maybe she wants a boyfriend in the metaverse. She doesn't have to pigeonhole all that. Goes both ways. You've got to be fair.

Nick Hodge: There was a country song I think in the late '90s or early 2000s, the title was "I'm So Much Cooler Online". In the music video was Jason Alexander, the short bald guy from Seinfeld. This was the beginning of chat boards and AOL, Instant Messenger, and you could create your own persona online. The shtick of the song was that he's 5'9 and bald and lives in his basement, but online he's 6'4 and jacked and a millionaire and everybody loves him. Well this is the next iteration of that where it's gone from message boards and chat characters, and profiles on dating apps and social media things, to actually personifying yourself in or on the internet through avatars, and you've got to spend real money for that. It just so happens that this is coinciding with cryptos, and that adds this whole other layer of minting and appreciation. But in a very real way, that Jason Alexander from 1999 is just being transported to 2022.

He's still 5'9 and bald in his mom's basement, but now maybe he's got a couple of hundred thousand dollars saved in his retirement account or he's made money and he can buy a cool, whatever your definition of cool is, avatar, house or a piece of land in the metaverse. He can go and pow wow with his friends there, I'm not going to characterize whatever, have meetings. And so, it's an alternate life. It's being enabled by the development of technology. So we joke about Farmville and how people own farms and spent real dollars to buy cows. In this instance, you can put on a pair of Oculus goggles, and you're not experiencing it through just the keyboard, but it's more sensory involvement.

So anyway, I don't know if I'm making a lot of sense, but we were talking about the game that your son was playing a couple of months ago. There's like porn being done in those characters I saw in the past week. What else have I seen with porn? Porn leads everything. So VHS tapes, DVDs and all that stuff, they're always ahead of the curve like the rich nerd is always fucking the porn actress. Well now some of the titles are like "Crypto Millionaire Bangs Realtor" or whatever. So anyway, you don't have to watch that video just like someone's going to watch you and I on the screen. You can put on your goggles, your little avatar can get down, whatever.

And so anyway, I'm thinking Demolition Man and John Spartan where they have sex with the little tingly thing. So I don't even know what the question was, but the metaverse is developing quickly and everybody wants their stake, from the biggest retailers in the world, Walmart, all the way to literally individuals still living in their mom's basement.

Gerardo Del Real: You want to hear my tin foil conspiracy theory about the metaverse and Microsoft buying up Activision Blizzard?

Nick Hodge: Yes, that was it. You have Twitch and people playing these games. Sorry, go ahead.

Gerardo Del Real: So my conspiracy theory is that they're going to legalize federally gambling on a federal level soon. And I believe that what the Microsofts and the Amazons and all of these different platforms are looking to do is get kids at a very young age and teach them to spend real money on fate. So that by being legally able to gamble, they have a built-in funnel of money for as long as they're solvent.

Nick Hodge: Interesting. This maybe not just has to do with gambling, but getting people to spend money in the digital economy, whether for gambling or for items in games or whatever.

Gerardo Del Real: 15 times makes a habit, right? Teach them at seven to spend fake money on real things, wait till you're 18 and don't turn 24 and make some real money. You're going to be out there losing your ass.

Nick Hodge: That's the long-term trend.

We're All Losing It a Bit During Covid

Gerardo Del Real: What else do we got to chat about Nick? What are you excited about in the market? Before we do that, I've got to cover Howard Stern really quick. Did you see the Howard Stern quote?

Nick Hodge: No.

Gerardo Del Real: He was talking about anti-vaxxers, and here's the quote. He said, "If it was up to me, anyone unvaccinated would not be admitted to a hospital. At this point, they've been given plenty of opportunity to get the vaccine. People have been told you will die if you get the vaccine, some of you will live, but most of you will die. These people don't trust our government. They think there's some conspiracy to turn them into a magnet or something like this. They think they're going to become magnetized if they take the vaccine. You had your chance. If you're not vaccinated, don't come to the hospital. You're going to go home and die." COVID is turning people into crazy people. I thought politics was doing it.

Nick Hodge: So much to say there. You want another long answer?

Gerardo Del Real: Yes.

Nick Hodge: It's been years, people are getting tired of it. We're going to get mass inoculation or herd immunity or whatever, either by everybody getting vaccinated or by everybody getting the virus. And so I don't know how I feel about turning people away at the hospital. Of course, you're not going to turn someone away. But in some province in Canada, they're talking about adding a surcharge if you're not vaccinated, which I could theoretically see. Then what was the other thing I wanted to talk about?

Gerardo Del Real: Then they're going to add a surcharge if you eat McDonald's, and they're going to add a surcharge if you have more than three drinks a night. That's the problem with government, we're at a point where we can't even look at something that might make sense like a COVID or a vaccination surcharge. That might make sense if it was practical and we trusted the people that are voted into office. I have such little trust for government at this point that I wouldn't trust them for anything. I don't trust them on anything.

Nick Hodge: I think that's part of the problem. That's where some of the vaccine hesitancy comes from. We've seen the changing of the science and the guidelines, and you and I always say, "Take all the information and make the best decision that's best for you and your family." The problem is that some of the guideposts, and this is a personal thing, the goal post that I have to kick the ball through to answer the decision correctly, I'm not sure are the right posts. Let me say what I mean by that.

We just got our five-year-old vaccinated this week, she got her first shot. And it's not necessarily because we think she's in danger of the virus, and that's the problem I have with it. She had the virus. She didn't get sick. And so I didn't vaccinate her to prevent her from getting the virus. And I think that's a problem. The reason that we got her vaccinated is so she could stay in school, because the school has gone to a model that is now test to stay. So if someone tests positive in her class, they can keep the class open as long as you enroll in the test to stay program. They'll test her right on the spot, and if she tests negative, she can stay in school.

So we text doctors that we know, friends of the family that are doctors that have kids of their own, and we got the same response. In one case, a close friend is a doctor, the wife's a nurse, they have kids almost exactly the same age, same story, they gave us the same exact response. We're not necessarily comfortable vaccinating them against the vaccine either, but we did so because of the schooling situation. People are saying all sorts of crazy things, it's weighing on all people differently. It's unprecedented. We've been using that word for two years. Nobody's gone through this before, unless you were around for the Spanish flu. And so it's weighing people differently. People are responding to it differently.

What I don't appreciate is being forced, I view it as forced in my mind, to have medical interventions for my children that aren't necessarily for their medical interest but for their educational interests. So anyway, I get why people are frustrated. I get why people are snapping off. I get why people are doing whatever they're doing, melting down in Pizza Huts and all sorts of shit. So it's tough out there and we'll see how it goes. No adverse reactions, thankfully so far, not that I was worried about it. But the point there is that I'm pretty sure we vaccinated our kid for the wrong reason and I think a lot of people feel that way.

Gerardo Del Real: It's definitely complicated and obviously everybody has different situations.

Nick Hodge: Sorry, one more. My neighbor, who can make his own decisions, who's not five years old, has been one of those, "I'm not getting fucking vaccinated," just one of those, "I'm not wearing a mask." He's just him. And so that's fine, be you. But he's fucking sick this week, like sick. Had to go to the hospital twice. And so he's of the mind now, I'm pretty sure I'm putting words in his mouth, but I'm pretty sure he's thinking, "I'm a fucking dumb ass. I should have just fucking got the shot." I think a lot of people are going to be in that camp. So I think more people are going to get vaccinated. And all that to say, I just think we're getting closer to the end of this thing for all the turmoil and mental health stuff it's caused, and for all the second guessing it's made parents do, and for all the schedules that had to change, and jobs that had to shift, and people that had to stay home and all that stuff. I think it's getting closer to the end.

What We're Watching in the Markets

Gerardo Del Real: I think you're right, I hope you're right. Things I'm looking forward to in the market this week, same thing I was looking forward to last week that didn't happen. Results that have been delayed because of the labs from Patriot Battery Metals (CSE:  PMET)(OTC: RGDCF). I want to see if I'm proven right, that we're on to a pretty significant lithium discovery, because a significant lithium discovery in Ontario in 2022 with a company that's got $11 million going in the ground here over the next nine months, that excites me a lot. And that's a big position for me. And then Aldebaran (TSX-V: ALDE)(OTC: ADBRF), it keeps going up although the results haven't come out yet. I have recommended that company.

Nick Hodge: I wonder if they're good?

Gerardo Del Real: Fingers crossed or it's going to be a round trip. I recommended it at $0.52 cents, and I today it closed at $1.15 today. There's multiple rigs starting, there's going to be as many as four this year, 100 meter step out from the best hole they have had ever drilled, which was the last hole in the last drill program. So a lot to be excited for there. Anything on your end of it, Nick?

Nick Hodge: I'm excited to keep deploying that capital. I've got it almost all into cash. It's almost all unwound and still early year stuff, and so excited about that because it's time to start managing my own money on that side of things. I think that's going to be helpful for the monthly subscribers, Foundational Profits subscribers, who will get to read about the ways that I deploy and position that money. We talked about some private deals they'll have coming up here soon, the private banking deal and the PGM deal, I'm excited about those.

One thing that slipped my mind, and if you watch this far you'll get it for free, it's a very narrow tip though, it's only going to apply to a couple of people. I don't even know if they watch this podcast. But Gerardo, one of the problems we've had with private placements is the legend removal, especially this language issue between 'have sold' and 'will sell'. Of course, you 'will sell' them. That's why you fucking bought them. Don't make me wait till I 'have sold' them to clear my legend. There's a workaround. And so you've probably been told, I was told a couple of months ago and I forgot, but I was reminded this morning.

Let's say you have 100,000 shares of a stock that is 'have sold' that you can't get the legend removed on until you 'have sold' it. Let's say that stock's trading at $1. You can sell a couple of thousands shares of that stock, put a couple of thousand shares for sale at $1. Put 99,000 shares for sale at $2. Let the 1,000 shares sell, but apply to have the legend removed for all the shares while your offer is up. You understand what I'm saying?

Gerardo Del Real: Mm-hmm (affirmative).

Nick Hodge: Get the legend removed off all the shares, sell just the small portion you want and then take down your ask for the rest of the shares, and your legend will be removed from all of them. So that's a really esoteric thing for maybe half a person that's watching this podcast. But it's an important thing and a little bit of a work around. So I don't know why I'm so excited about that, but if I can get legends removed off of my shares, then I don't have to worry about having to be bought back in it. Well it's one less hiccup that has to come out of my diaphragm in my life and I like that.

Gerardo Del Real: I like it. Anything in the market you're looking forward to this week, Nick?

Nick Hodge: Reduce your equity exposure guys.

Gerardo Del Real: Broader indices or just across the board.

Nick Hodge: Yeah, broader indices, tech, meme stocks, high beta stuff, that high short interest stuff, that AMC shit.

Gerardo Del Real: I like it.

Nick Hodge: It's not a dip to bottom this time.

Gerardo Del Real: I like it. It's been fun everyone. As usual, we've gone over an hour. This go around, there was lots to talk about. I'm going to be more loving this year, I'm going to be more caring, I'm going to be more Zen, more peaceful. That's the theme for 2022. I am Gerardo Del Real along with my co-host Mr. Nick Hodge. Was this number 153, Nick?

Nick Hodge: Oh, my goodness, that's a lot of them.

Gerardo Del Real: Episode 153.

Nick Hodge: If you're going to calm down, I'm going to go the other way. So here we go.

Gerardo Del Real: Trying to make love now all you pricks. Leave me the fuck alone. Bye.

Nick Hodge: See you.

This transcript is unedited. Please excuse grammatical errors and run-on sentences.