Bizarro World Episode 155: Who Does the Government Think It's Talking To?

Markets remain tepid as earnings crush select tech stocks.

Meta gets versed: the company is hemorrhaging users and investors.

Police can track down the drug dealers that sold actor Michael K. Williams a fatal dose of heroin but can't execute warrants without unrelated people sleeping on the couch?

Whether refusing to reveal sources of information or telling us to do one thing while it does another... Who does the government think it's talking to?

Plus: We separate the crypto wheat from the chaff.

Table of Contents

2:45 Markets: Earnings, Tech Stocks, Defensive Stocks
8:02 Meta Gets Versed
12:47 Michael K. Williams, Amir Locke, Trucker Convoy
24:06 Do They Think We're Stupid?: Government Misinformation 
27:20 Crypto Wheat & Chaff
40:00 Market Week Ahead


Gerardo Deal Real: Gold still at $1,800. Bitcoin's coming back. I told you, it was the richest plan just to shake out the peasants. The Minneapolis Police are back executing no-knock warrants and executing, pun intended. We'll talk about that. People got their Meta-ass handed to them this week. Everything's going up in the metaverse except Meta-stocks.

I am Gerardo Del Real along with my cohost, Mr. Nick Hodge. This is therapy session 155, otherwise known as Bizarro World. Mr. Hodge, how are you today, sir?

Nick Hodge: Another week has gone by, Gerardo. I'm doing pretty good. How are you?

Gerardo Deal Real: It's been a week. It's been a week. And I know we want to talk a bit about COVID. And we want to talk about whether we're back to normal. There certainly isn't a shortage of opinions out there and approaches. We had an interesting week here in Texas. There was going to be another icepocalypse. We prepared for it.

The city shut down the schools. Nobody was allowed to go to work. And luckily, it wasn't as bad as the last time. I think we're coming out of that. But no, look, all in all, things are well. I'm thankful to be here, happy to be here and good to catch up with you again.

Nick Hodge: Let's do it. How cold did it get? Did you get some snow? I was talking to someone in Dallas and they said there was like a tiny, tiny bit of snow.

Gerardo Deal Real: Yeah. We had some snow, about a quarter inch. We had a lot of ice. It got as cold as 19 degrees. Not out of the woods yet, 19 Fahrenheit for my Canadian friends. It will be 19 or 18 degrees again tonight. And then tomorrow, we get above freezing again. So, that's like the green light to get out there back on the roads.

And it's different. I spent my childhood in Chicago as many of you know and a long time in Alaska, 17 years in on. The infrastructure there is in place to throw salt on the roads and to have the trucks out there scraping away and deicing and preparing for it. And it's just not that way here because you can't have a whole infrastructure network for like two or three ice days. It's better to just shut everything down.

But there was a 14 car piled up on the highway of people that just don't know how to drive in those types of conditions. But luckily, it wasn't as deadly as the last time. And luckily, the grid held up this time around. So, that was good news. So all in all, thankful that it went the way that it went.

Nick Hodge: There was a storm sweeping across the entire country I think. There was definitely some snow all over that people were talking about. I'm here in Spokane so we don't pay much attention to that.

Gerardo Deal Real: You laughed at my 19 degrees. I can see you smirking.

Nick Hodge: I don't even think that made the news. Anyway, what are we going to talk about?

Markets: Earnings, Tech Stocks, Defensive Stocks

Gerardo Deal Real: You know what, before we get into gold still being boring and that's going to be the whole gold segment, let's just not even talk about gold on this one. Gold is still boring. It's $1,800. I still think it's setting up well. That's my take on gold.

We have to talk these Meta stocks. I joke that people got their Meta-ass handed to them. Somebody learned something this week. It was not pretty. I mean, when I see Facebook (NASDAQ: FB) down 23% after market and then the very next day, I see Snap (NYSE: SNAP) up 25%-30% on some earnings beats, the Dow, the S&P and the NASDAQ is starting to trade like a junior.

And so at that point, if it's starting to trade like a junior... for investors and speculators that a risk averse, why wouldn't you take a little bit of that capital and start rotating it into some of the better junior names or even some of the majors in the commodity space that have these really robust supply-demand fundamentals and value propositions that you can measure?

It's a little bit harder with the juniors if you're not into the exploration stocks, but it's a lot easier with the companies that you've mentioned before, some of the Kinrosses (NYSE: KGC) and the Camecos (NYSE: CCJ) and these producing companies that have real numbers attached to their balance sheet. I'd love to hear your thoughts because I know that you're sitting on a cash position that you've been deploying very strategically here over the past several weeks.

I'm curious to hear if you did some more of that this week. I know that you ever savagely trading tech stocks, short and long.

Nick Hodge: Well, let's start there. Not just Meta stocks, I mean, it was tech stocks that have had a relatively bad week. I mean, the NASDAQ was selling off hard earlier in the week and you're in that phase now where investors aren't responding to news the way they responded to news for the past year.

So, I'm going to take it back to the crabs for a second when the crabs were expensive a year ago and I started saying they're not expensive because there's fewer crabs and they're not expensive because people are buying more Crabs. They're getting more expensive because there's inflation in the system, and people were pushing against that narrative. And then we had the pushing against that narrative for a while saying it was transitory.

Gerardo Deal Real: Transitory.

Nick Hodge: So, we've been saying that earnings weren't going to be so good in that, yes, they were going to be good. Earnings growth was going to be good, but that the rate of change was slowing down. And I was telling you that people think linearly. They think what happened before was always going to happen. So, tech companies prints good earnings, stock goes up. Except that doesn't happen now that we're not in the same sort of macro-environment.

Gerardo Deal Real: The world is a circle?

Nick Hodge: Yeah. So that's what I'm starting to say. Investors are responding negatively to these earnings. And furthermore, when multibillion-dollar company goes down 20% in after-market trading, that's telling you that's not a safe environment to be in. And part of that is the VIX is still elevated. But more than that, it's the market pricing and the slowing down of earnings growth and the slowing down of growth period.

And so, just like people were saying, "No, it's not inflation," I see a lot of articles now, "Earnings growth is still 25%." And it's the same exact thing. It's like, yes but. And that "yes but" can make you a lot of money just like if you bought the inflation trade over the past year. Here, that "yes but" is getting cash, which we've talked about. Buy gold, which I've done. So not only was I buying a little bit of bonds this week but I was buying the old Gold Shares (NYSE: GLD). I mean, I was flashing the cash and the GLD. Why not?

I mean, I think gold's going to go higher especially buying on dips below $1,800 at this point I think is okay. And then, you asked about the majors. I was looking at them as well. I mean, look at Agnico Eagle (NYSE: AEM). I mean, pull up that chart. It's only a dollar or two 52-week low, for example.

Gerardo Deal Real: It's insane.

Nick Hodge: And it's getting ready to acquire Kirkland Lake (NYSE: KL). I own those shares as well, ultimately because I knew they were going to become I need those shares eventually. And so, yeah, buying companies like that, yeah, I think the safe stuff, so bonds, gold, cash.

And then there are companies that are still going up. Like look at a chart of things that are related to like agricultural commodities for example. Look at like Mosaic (NYSE: MO) or Bunge (NYSE: BG), those stocks are still near 52-week highs. General Mills (NYSE: GIS), for example. So, you can be a little bit defensive and start to look to dividends.

But really, if you want alpha, or if you want things that are going to go up, in this environment that's gold and I think yields. So, bonds, the yields fucking spiked right at the end of the week here. And we'll see how high they get.

Gerardo Deal Real: The bond market tends to lead. It's an interesting bond market right now. As you know, I always watch that. I look at German yields. And those are as high as they've been in quite some time. So, something to give ...

Nick Hodge: Zero?

Meta Gets Versed

Gerardo Deal Real: Well, when you're coming from a baseline of a negative, whatever it was, yeah, they're up there. So, it's interesting times for sure. We have to talk Facebook a little bit. And not so much the action in the stock, but the fact that for the first time I think ever, users decreased, users declined. New users declined a lot.

And then the hence the reason for it being down, it was down after hours. But we all know how toxic especially for teens and kids social media platforms can be. I am actually, again, maybe naively so, but optimistic that this younger generation is starting to get it and pivot away from some of the things that they're starting to realize maybe just intuitively, "This doesn't feel like the healthiest thing for me. This doesn't feel like the healthiest way to spend my time."

I can tell you. I have three kids, 23, 18, and 13 years old, all boys. And they think that's for old people. And even some of the older people that I know, the mid-40s and mid-50s people, even they're starting to say, "This is just stupid. We spend half our day arguing over points that we've already made our mind up about." And nobody ever really goes in there wanting to exchange ideas in a curious fashion. They just go in there trying to prove their own ideas.

So, I guess what I'm getting at and what I'm asking you is do you think we're finally getting to a point where maybe society as a whole is starting to ask the question about, "Is there a better way to exchange ideas and to just yell at each other?" And on one side, Fuck AOC and on the other side is Fuck Donald Trump, who by the way said that if he gets elected president, he'll consider pardoning all of the January 6 insurrectionists, hell of a campaign slogan.

But back to the Facebook question, social media, do you think we're getting to that point where maybe we're starting to ask better questions? Or do you think it's just the youth and this Fourth Turning that's driving the decline there?

Nick Hodge: I'm not sure. I think that there will always be tribalism and partisanship. Hopefully, it's not the main fruit of the social media tree. The Facebook's been toxic for a long time. It's 2022. That means it's been 10 years since I haven't had an account because it was 2012 when I signed off of Facebook and never went back.

So, that writing was on the wall but nonetheless, it continued to grow. Not only did Facebook grow as a community and an online, whatever, portal and obviously, Instagram made tons of acquisitions, the stock did very well as well. But now, it's more openly toxic as you say. It is toxic for multiple reasons. It's toxic for misinformation, the ads, the personal infringement that it does.

We were just talking about the prayer apps and stuff. I mean, do you think the prayer apps are selling the data to you? I mean, they're selling it to Facebook or brokers that then resell it to Facebook. And it's toxic for the reasons that you say about the kids. I don't know if I've talked about it on this podcast. I mentioned it to my wife though.

There was a study recently that created a bunch of accounts posing as under-age bots and just created like Instagram accounts and stuff. And one, they were allowed to create the accounts. But two, it didn't take long for them to be started to serve up ads about body image and things like that, which leads to the psychological things and potentially even physical things down the line.

So, that's not something I want my kids to get exposed to. I'm starting to ramble a bit. Yes, I think that, gun to my head, I think that the social media fad is waiting for all of those reasons. Is online going to get less toxic? I'm not sure. Is there a better alternative going to emerge? I'm not sure about that either. But I do know or I do think that people are starting to question, "Why am I spending, whatever, two, three, four or five hours a week or more on this app when I'm just wasting time comparing myself to other people?"

And then, it brings up a good question for investors and, of course, business owners like us is where do you go to get those eyeballs? I think Apple was saying they were going to have $10 or $20 billion less in ad sales this year because of like new cookie protections and things that are allowing people to opt out of getting tracked. And so that whole online, whatever, clickbait, click-tracking thing is going to look a little different. It might behoove you to own your own list and acquire your own names.

Michael K. Williams, Amir Locke, Trucker Convoy

Gerardo Deal Real: It's interesting to me, you mentioned tracking and cookies. And Michael K. Williams was an actor who passed over a year ago from an accidental overdose. He bought some heroin that was laced with fentanyl from a local neighborhood drug dealer. You would think that someone at Michael K. Williams' level, if he chose to go buy heroin that he would have like a boutique drug dealer available to him.

And there was a story where it shows how the cops and the Feds were able to track down who did it. And it was great work. It was cameras from the local bodega, which identified a license plate which was then cross-referenced with license plate readers at various toll bridges, which was then referenced with cell phone records. But my point is it was really good investigative work.

And they arrested the people that were responsible. They arrested four people. The police, of course, said they wanted to treat this as in a murder case. They wanted to treat it as, "There was fentanyl that led to the death. We want to charge all four of these people with capital murder." That hasn't happened yet. But the four people are under arrest.

And I highlight that because there was a case in Minneapolis this week. In February the 2nd, a gentleman named Amir Locke was at a friend's house sleeping on a couch. I've been to many of friends' houses. I've slept on many couches. And the Minneapolis Police executed a no-knock search warrant. And we now know because of the body-cam footage that what the police did was they had a key, they put a key in the door.

They didn't knock. They opened the door. They point the gun at Mr. Locke who was sleeping underneath a blanket as one does at 5:00, 6:00 in the morning. They yell for him to get up. He lifts the blanket up and within nine seconds, he's shot three times. It's found that he had a weapon near him. When the body-cam footage comes out, there was nothing there that suggested that he lifted the weapon, pointed the weapon, nothing other than the guy just had his arms like this and heard him yelling. I was like, "What the hell?"

He wasn't named in the warrant. He's not who they were looking for. So, I bring it up because on the one hand, it's obvious to me how well law enforcement could conduct investigations and how efficient and effective they could be when they use information and technology and a little common sense as in the case of Michael K. Williams when they want to.

Nick Hodge: When a Hollywood star is involved.

Gerardo Deal Real: Right. But when it's just another person sleeping on a couch, and we already said as a police department a year ago that we would no longer be executing no-knock warrants. They just straight-up lied to the public again. They lied. They lied. This is where ... We had the whole situation a year ago, the whole thing happened and they said, "We're going to put a stop to this. We're no longer going to conduct these."

The only reason we know it happened is again because of body-cam footage. And again, back to the youth, back to the Fourth Turning, back to our institutions not being trustworthy, it's stuff like this that makes it so difficult to have meaningful conversations about police reform in our criminal justice system and how to best advance that in a way that is sensical, that is empathetic, but also that enforces the rule of law and order in an effective but just way.

Killing a man who was underneath a blanket whether, he had a gun, two guns, a bazooka or not when he's not even named in the warrant and you gave him nine seconds, again, it seems like an execution to me. There has to be a better way. There has to be a better way.

Nick Hodge: No, I agree with that a hundred percent, especially if they said they weren't going to do no-knock warrants. I didn't know that. And I haven't looked into this case too thoroughly. I haven't seen the footage. I did read that the gentleman had a weapon that he was reaching for a weapon or that there was a weapon there. So, I have to read more about it.

The no-knock warrants in general are bad juju, man. I mean, there's just a recipe for this because I mean, it's the same way that Breonna Taylor was killed. And she's not the only one. And it seems like, not it seems like, I'm not sure the benefit of doing the no-knock warrants. I get the element of surprise. But like you say, there's a way to conduct policing such that you don't go gotta go barging through doors in the middle of the night to apprehend your suspect.

Obviously, they can do reconnaissance work at least to know that there's someone in the house that's not named in the warrant, wait till their suspect is the sole person in the house. And I guess those would be my thoughts. I'm going to have to watch the footage and read about it. Has there been any repercussions, protests, whatever, in Minneapolis?

Gerardo Deal Real: So interestingly, there was a woman that a year ago, the last time that something of national significance happened or made it in the national news, there was a woman that was brought on by the Minneapolis Police Department to be a liaison between the community and the police department. And try to have a transparent dialogue about how best to bridge the distrust.

And one of the things that had come out of that a year ago was that they were no longer going to execute no-knock warrants. So, when this case happened, she immediately demanded that that work group pressure the police departments to release the footage. And they did finally. And the footage isn't the most flattering to the police department, obviously.

And so, there's an interaction between her and the captain of the police department or a captain that was given a press conference. And she basically took over the press conference and said, "I'm not going to be up here," I'm translating, all right, "as your pawn to the community, telling the community that this was the right way. You all have to stop killing people that have nothing to do with the person that you're looking for. And you have to give people more than nine seconds, especially if they're not pointing a weapon at you. And you told us that we could trust you to no longer execute no-knock warrants."

So, it was an interesting three, four or five minutes. It was, again, another sign that I think people aren't just going to sit down and take this anymore. And my brain goes all over the place. I look at what's happening in Canada with the truckers and the COVID mandates and how they're linking up and nobody's asking, "Do you believe that you should be vaccinated?"

What they're saying is, "You got to give us an opportunity to work and let it be our choice. You can't mandate 14-day quarantines if we don't get vaccinated and we cross the border because you're taking away our ability to live, to provide for our family." And I agree with the truckers a hundred percent without asking what their political beliefs are, without asking how they feel about the vaccine, without asking any of that.

Not at this point of the COVID dialogue where we know that the most recent variant, yes, if you have underlying health conditions, it can absolutely can kill you, it can kill you. But you have to give people a choice. And you have to give people the opportunity to provide a living to their family. And ultimately, it's up to people what they do. And so, I agree with the truckers in Canada. Another sign that we're no longer going to just blindly trust institutions.

I think that the Ottawa police chief said, "We're looking at every single option including military aid to stop the unlawful occupation of the country's capital." Think about that for a second. A Canadian police chief openly, publicly says, and it's citizens that elected that police chief, that they're considering military aid to prevent this protests.

It's mind-boggling to me. I don't know. I don't know if that doesn't scream of abuse, of just a violation of like just human trust. It's crazy to me like I don't know. Maybe I am the crazy one. I don't know.

Nick Hodge: No, I don't think so. I just think that we're so far down the rabbit hole and nd so far into this turning and then bizarro world that you see things and you scratch your head and you're like, "Wait, am I the crazy one or not?" I mean, I haven't paid too close attention to that, though I have seen some good videos.

But even here in the US, I mean, we talked about Neil Young and Joe Rogan last week and you had the US Press Secretary this week telling Spotify that it should be taking more action, so trying to tell a private company what to do. And no, I think that a lot of things. Two years into a pandemic, tensions are high, of course, all those caveats.

But I think generally, people are ready to get to it. There was a poll this week, Monmouth University poll, 77% of people, irrespective of political leanings, said it's time to move on and live with the virus. You have governors giving speeches and saying that it's time to live with the virus. I think Maryland Governor Larry Hogan gave a speech to that effect in his State of the State address this week.

And more and more and I think that that's the sentiment. You and I have talked about it in recent weeks with preschools closing and keeping the masks on all day. And that's another thing for the kids, man. When you see in stadiums like, what was last week, Magic Johnson, Gavin Newsom, and then the mayor of LA hanging out in a private booth at the NFL playoff games, hugging and taking pictures, no masks on.

Gerardo Deal Real: But the mayor said he didn't breathe when he was next to Magic Johnson.

Nick Hodge: He held his breath. Amazing. It's amazing. And so, this juxtaposition, it doesn't pass the smell test. And so, a lot of stuff hasn't passed the smell test. And a lot of stuff was done early on because we didn't know. And now, we know a lot more. You said at this point in the COVID dialogue. Exactly, we know who it affects. We know gets sick. And it's time to treat it as such now.

And I think that's what it is. And some people are doing that more than others, sort of like checking box J on the accredited investor before coming in. The preschool gets closed out and you got to send out a picture of an at home test. Okay. I got a picture of an at home test. It's like right-clicking a JPEG or an NFT. You can save that thing over and over. So, anyway, I'm starting to ramble a bit.

Do They Think We're Stupid?: Government Misinformation 

Gerardo Deal Real: No, it ties in perfectly. It ties in perfectly. And I got to hit the Biden administration again, man. His stupid ass getting in front of the press corps and he got grilled and he deserved it. For those of you that missed it, a rep of the Biden administration was up there explaining to the press corps that they had credible information and sources that revealed to them that Russia was planning a false flag attack. That they were potentially looking to bring actors in and stage what would look like an incursion in order to get Russian troops to be able to be justified in escalating the potential conflict that's occurring right now.

And good on this journalist and I should have had his name ready, I'll find it later on, but good on this journalist for saying, "Hold on, hold on, hold on. I've been around for 30 years. I remember when Colin Powell got up there with the little tube and said, 'Weapons of mass destruction, we know where they're at. It's going to take us a month or two to go get them. And we got to stop them.' And we all voted. And we didn't question you enough."He said, "I'm old enough to remember that. I'm old enough to remember 9/11." He said, "So, just give me what is your source?" And the Biden rep said, "I'm telling you." And the journalist said, "No, no, no. I get that you're telling me but what is the source?" And he says, "Well, it's declassified information that I am telling you."

And the journalist says, "You can't be the source that you're telling me is now declassified for the fact that maybe Russia is going to hire actors to stage an incident that takes us to war. It doesn't work that way. What credible source of information do you have?" And the guy just kept saying, "I'm the credible source of information."

Nick Hodge: They should have renamed the football team, the Washington Senior Administration Officials.

Gerardo Deal Real: Right. It's like the LA mayor expecting us to believe he held his breath when he was next to Magic Johnson and Gavin Newsom when he got caught without a mask like, "Who are you talking to? My seven-year-old niece wouldn't believe you. She would look at you and say, 'What'd you say?'" It's absolute madness.

Anyway, let's get back to the markets for a little bit. I'll get off my institutional work in here.

Nick Hodge: One more thing on that.

Gerardo Deal Real: A hundred more.

Nick Hodge: And just to wrap it up on the Rogan, that's exactly what he was saying. "Look, you're telling me that I'm spreading misinformation." But all these things you were telling us was fact a year ago that we weren't allowed to question have now come to pass. And so, it's come to mean we're like fact-checkers or like narrative administers. And so, anyway, it's interesting.

Gerardo Deal Real: Yeah, no, I thought it was great. I thought the grilling was great. Yeah, the guy that got grilled is State Department Spokesperson Ned Price who got into it with AP Reporter Matt Lee. It's important that I get Matt Lee's name out there because that's what journalism is supposed to be about. It's supposed to be about speaking truth to power and holding those in power that we entrust with that power with our votes and our dollars, holding them to a higher regard and standard.

And good on him for representing the people because that's how you're supposed to do it. I'll put a link up to it. It was fantastic.

Crypto Wheat & Chaff

All right, let's go back to the metaverse because it's fun. Metaverse, real estate sales have now topped half-a-billion dollars.

Let me explain this to you folks. Real people are taking out real mortgages to buy fake real estate in the metaverse. Take it away, Nick.

Nick Hodge: Gosh. I'm not sure what you want to know. I'm not sure how they're getting real mortgages for that. The underwriters might have something to say but they're certainly spending real dollars on it. Now, some of that might be attributed to this simple amount of money sloshing around that whales have made in the crypto space over the past couple of years that has now been redeployed into other assets like NFTs and digital real estate, for example.

So, that might be inflated a bit. But hang on, that's the fact that crypto is here to stay and then maybe not so much digital casino like you're talking about here with the NFTs. What it is I'm going to talk about? Transactions, I was going to talk about processing transactions.

Gerardo Deal Real: Yeah.

Nick Hodge: In the past year, I think crypto was used to settle nearly as many transactions as American Express and Discover Card like not on par with what Visa and MasterCard do, but certainly processing nearly as many payments as other major credit card brands. I also saw that there was, and again I'm not sure what the question is, but there was several members of Congress who reported on trading cryptos in the past year.

So, you've got Congress people and senators who were in on the crypto game long. And you had Senator Pat Toomey this week saying that he's an owner of crypto and he thinks that all diversified portfolios should have a little bit of crypto in it. And then there was one member of the House of Representatives who tweeted this week that he would be open to receiving his salary in Bitcoin, but that tweet was quickly deleted.

I'm not sure what the question was but ...

Gerardo Deal Real: The question was, and I didn't even ask it because sometimes we just got to go there, but the question was is this going to be a trend that continues on? And it's a hypothetical and obviously, I think I know the answer, but is there a way to profit from that? Is there an expert that could possibly help guide towards that? There you go. Ball up to you. Spike away, Nick.

Nick Hodge: I'll map the ground for you. So, let me talk about it as like a skeptic for a second because there was a YouTube video out a couple of weeks ago called Line Goes Up that got millions and millions of views. If you haven't seen it, Gerardo, I can send it to you. You can flick it on your TV. That's how I watched it on YouTube.

But it's a two-hour monologue of this guy basically saying why NFTS are fucking bullshit, why there a Ponzi scheme, why there's no utility, why certain people can sell them and mint them and other projects fall flat on their face, how in some cases they are total grift like the coins and the tokens are just made to provide the liquidity for the originators to exit, and things like that. And the guy seemingly makes some valid points.

But it stunk more of you missed the crypto wave type stuff and you're intellectually smart enough that you shouldn't have and so now you're a little bit jaded.

Gerardo Deal Real: Like Roubini with Bitcoin?

Nick Hodge: Exactly, or Schiff, for example. And so, here's my take. Look, he goes through all the funny stuff, the NFTits and the various gorillas of which there's like five different classes. And he talks about all the spam that he got when he signed up to one community and all the coins that he got pitched.

And I very quickly started thinking about penny Vancouver stocks. And so, he was describing them. It's a story and you can't be negative on them and you always got to be bullish. And I was thinking about Canadian ...

Gerardo Deal Real: And you got to be in the chat room and you got to hype it up. The new blue sky potential and the Chinese are here. And all it takes is a small amount of capital to take this from a $3-million market to $37 million and all that.

Nick Hodge: All of that, yes, which doesn't mean that it's not a market. So, I guess here's my thoughts. It's still so early days that this is sort of like the figuring it out of it all. And yeah, right now, are we building crypto monkeys or whatever on the blockchain? Yeah.

But in the future could like... I was reading this lead engineer from Microsoft's take this week. He's been hired to lead their foray into NFTs. And he was saying that this was a prediction: In three years, he was saying that Etherium is going to be the new appstore where you like you go on the Ethereum blockchain to download your apps because like Ethereum, you can build on top of the chain or whatever.

So, yeah, if the Wright brothers had to start somewhere, they took off in a dumb fucking plane the first time, too. That's like the Crypto Gorilla. That flight sucked. It only lasted for a second or whatever. And it didn't have a lot of utility on the beach in North Carolina but you got to start somewhere. And so, I think the sector is here to stay. And I take that all the arguments against it. But I still think that it's a seminal moment for a new financial entity or a new financial way of doing things.

And to that end, I'll spike your volleyball down. Yeah, we've got the $50,000 now ready to go and Chris was wanting to make some buys this week and I told him to wait a week.

Gerardo Deal Real: Prayer hands. Prayer hands. How are you doing on that one apparently?

Nick Hodge: Yeah, we've got the list of what we're going to buy first, the Mina coin, the Fantom.

Gerardo Deal Real: Make them pay. Make them pay.

Nick Hodge: No. They're not going to know when and then how much you're deploying, which is sort of the point. So, the pub is called Crypto Cycle. He's already got crypto tutorial videos up. This week, he was putting screengrab videos up about how to buy Solana and make hot wallets. And I'm learning already.

Gerardo Deal Real: And those are great. Even my simple self was in there and learned some things. And if I can learn some things about the crypto and NFT space, all of you can learn some things. It's a really, really well-put-together educational series. Kudos to Mr. Chris Curl for getting that up and going. And kudos to us for recognizing that he had that in him because it's really well done.

Nick Hodge: Exactly. He knows his stuff. And that's what I've been saying. Yeah, we want to make some money. Obviously, we're putting $50,000 on the line and we don't want to lose it. But we also want to learn about the space. It's so much to learn that it's worth the price of admission just to get the education. And there literally is an educational series.

We have what we call a CryptoU series that's already up to Level 301, plus I think four videos and a glossary to tell you and show you about the genesis of the crypto space and how it's evolving and the definition of all the stuff and why it can be used to create a decentralized future of finance.

Anyway, membership is open. We've had people that have already taken us up on that. So, we have a real publication issues coming out every other Wednesday. And we'll be making crypto purchases before Valentine's Day for sure. I don't know if we'll buy NFTITs or not but we're going to buy something.

Gerardo Deal Real: Wow. Look, Bitcoin, back about $40,000. Ether, right around that $3,000 mark. So, I joked a week or two ago that every time there's a shaking of the tree, to me, it's ... If you want to argue that 3% of Bitcoin owners own 95% of all the Bitcoin or you extrapolate that to the entire crypto space, well, it sounds like that's an easy way to make a lot of money if you just shake the tree every four or five months.

So, regardless about how you feel about a Bitcoin or a Solana or an Ether or whatever it is that you're dabbling in, you could be right, a hundred percent correct that it's a manipulated space because of the small amounts of capital that are required to move it. But if that's your thesis, I can make a counter argument that says, "Well, what's stopping them from taking Bitcoin to $100,000 then or $200,000 and just shaking the tree every time it gets a little frothy?"

And if that's the case, then we're going to make money either way and everybody's happy. So, except for the people that just live to be right instead of getting it right and now for you, sorry.

Nick Hodge: Yeah. And think about it in terms of resources again. Think about Bitcoin like your physical gold. I mean, you literally buy it. How? You put it in a safe or safe deposit box or you bury it somewhere and you forget about it. And so, I heard somebody describing it as like real estate this week. They were saying like, "Owning a Bitcoin now, it's like owning a barren spot on Wall Street 200 years ago where the financial system is built up on it."

And now, you're buying that baseline real estate that a new system is going to be built on top of. And in that respect, I think it totally makes sense to buy Bitcoin and stash it away on the dips. That's sort of my personal strategy with Bitcoin. And then NFTs and Altcoins are all the way on the speculative side where you certainly shouldn't be putting the majority of even your speculative capital in that.

And there's sort of those 5, 10-cent to 50-cent type shots that you're trying to take. No one's building a financial system on Bored Apes. But on Bitcoin, they might be. And so, I don't know. That's my strategy. Then you think about the finite nature of it, the 21 million Bitcoins. And I can certainly see a future where owning one whole bitcoin is like bragging rights. So, anyway ...

Gerardo Deal Real: Just to be clear, lots of runway still in the crypto space and you're ...

Nick Hodge: Oh, absolutely.

Gerardo Deal Real: Yeah.

Nick Hodge: I'm back to the circle thing. So, yeah, tech stocks don't go up forever. Neither does Bitcoin. But the bear markets or the down periods are, what are they, they're the authors of the bull market, right, Gerardo? So, that's how it goes.

Gerardo Deal Real: I have a happy sad story.

Nick Hodge: Yeah?

Gerardo Deal Real: Which version do you want first? The happy story or the happy version of the story or the sad version?

Nick Hodge: The sad first.

Gerardo Deal Real: Rihanna is pregnant.

Nick Hodge: I heard. Not by you?

Gerardo Deal Real: Not by me. Not even in the Metaverse. In the real world, I had no shot. I'm aware. I'm a happily married man. I wasn't going to get around Rihanna. And even if I did, it wasn't going to happen. But in the Metaverse, I thought there might be hope. I suspect she will never join the Metaverse. Oh no.

Congratulations to Rihanna and ASAP Rocky. And I wish them all the best, man. They're a beautiful-looking couple and all the best to them and theirs. I'm sure they'll do great by that baby. But yeah, no, everybody knows my affinity for Rihanna. If you know me, you know I love that one.

Nick Hodge: Was that the happy part of the story?

Gerardo Deal Real: That was the happy, yes that part. The happy part is her bringing a baby into the world. They look like they're in love. They're thrilled. It's the first baby for both of them. They look like a new power couple. Good for them. Good for ASAP Rocky and good for Rihanna. She's been grinding and working billion-dollar empires. And I remember when she was just a little umbrella girl.

Gerardo Deal Real: And so, yeah, congratulations to them. It's been impressive to see that run.

Nick Hodge: I was just going to say 155 episodes ago, I believe you opened up the very first episode of this podcast by saying that, yeah, we were going to learn why you would let Rihanna sing the ABCs to you.

Gerardo Deal Real: Because that would be enough for me. But now, that's probably never going to happen. And we're probably not going to get another album from her for quite some time. So, yeah.

Nick Hodge: Off the market.

Market Week Ahead

Gerardo Del Real: Yeah. It is what it is. As bummed as I am, I'm sure Drake is kicking himself in the ass. It's another conversation for another podcast. Anyhow, Nick, back to the markets, what are we looking for this week? My Patriot Battery Metals (CSE: PMET)(OTC: RGDCF) that I've been telling everyone about had some heck of a week, released some more drill results. Four out of four on the first four lithium holes have hit significant wits and mineralization.

I'm excited for that project. They're cashed up. They're going to be conducting a 20,000-meter drill program. The stock was up some 11%, 12% today. I think it's headed to $1 in short order. We shall see.

I'm looking forward to results from Aldebaran Resources (TSX-V: ALDE)(OTC: ADBRF), big copper-gold project drilling out some of its higher priority high-grade targets in Argentina. Those assays are due any day now. And it will be 100 to 200 meters step outs from the best hole ever drilled at that property late last year. So, I'm excited to see what that does. That stock's firmed up. I think we recommended that to subscribers on the trading service I think at C$0.56 cents. And last I checked, it was over $1 without the assays. So, I think any positive news there, you're going to get a quick rerating higher.

Anything that's caught your attention in the cannabis space, the tech space? I saw you making some moves in a couple of the letters.

Nick Hodge: Honestly, I'm not too excited. What I'm excited about is this development of the cycle that I think is coming for people to realize that it's actually is going to be maybe a prolonged bear market for a little bit. I'm excited for rates to start going the other way, which I still think has to happen.

Gerardo Deal Real: Yes.

Nick Hodge: I think gold is going to go higher. So, I'm excited to fill out my position there. And other than that, man, I think you're in bear market S&P territory, tread lightly. Your physical gold below $1,800 bucks and just be careful because I don't think that nastiness that you saw in January is done. I think you're going to see a little more nastiness.

Gerardo Deal Real: And again, the bond market and the volatility index are our leading indicators when it comes to the potential for capital dislocations and in the overall indices. Would you agree with that?

Nick Hodge: Yes. And there's opportunities always. But like Unilever (NYSE: UL). Unilever, I mean, one of the largest consumer staples companies. They had a misstep a couple of two weeks ago and was going to buy a unit of another big company that didn't go through and the stock sold off like $15 bucks. I mean, it was amid those high volatility days in the S&P and things.

I didn't put it in any letter but it's taking the opportunity personally to peck away at that stuff. And so, you just have to know the environment that you're in. And I think it's important to know that the environment you're in now is not the environment you were in like last summer and early last fall. In fact, it would probably surprise quite a few people to know that the NASDAQ actually peaked in November for example.

And so, it's already been four months. So I think these next couple of nasty down days or down spells you have. And then February and March, it's time to start positioning for like the next cycle of the market. It's already going to be the end of the first quarter. And so, those are the things I'm looking at on a macro-level. On the smaller private side of things, you and I were talking before the podcast, we've got some that have been private for a while that are starting to come public and it will be good to get that liquidity because liquidity is good.

Gerardo Deal Real: Liquidity is good. You got offices to buy and I got all sorts of things to do. So, yeah, I like liquidity. I'm a big fan of it. Yeah, I think that was good. Anything else you want to get off your chest? You know what, I should mention about Mr. Amir Locke that was killed by the Minneapolis Police. That was a legally registered gun and he was a legal gun owner.
So, for those that would counter ...

Nick Hodge: That's important, yeah.

Gerardo Deal Real: Yes. And I don't think I've mentioned that and I should because it's an important point to me, especially here in the US, someone that's very pro-Second Amendment. If your name isn't on a warrant and all you're doing is sleeping with your gun for whatever reason and you're inside a secured premise and you're doing nothing wrong and that weapon is registered, and it's registered to you and you have a permit to carry it, then when an officer breaks through or opens a door starts yelling at you, you have every right to have been holding that gun in the safety and comfort of that home, who's ever home it was.

So, it's a slippery slope when we started saying but he had a gun. Food for thought, everybody. That's all I got. Hate to end on a somewhat somber note, but it should be an interesting week, a lot going on. Be careful with the Russia, Ukraine thing. I think we're not getting to hear the end of that anytime soon.

Anytime I see capital looking for safe harbor, it tends to lead to volatility societally and so something to look out for. It's all I got. I am Gerardo Del Real along with my cohost, Mr. Nick Hodge. So, it's therapy session number 155, otherwise known as Bizarro World. Nick, say goodbye to the people.

Nick Hodge: See you.

Gerardo Deal Real: Be safe out there, everyone.

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