GM02: The failure of the Dollar ft. Preston Pysh

Our guest for today’s episode is Preston Pysh, founder of BuffetsBooks.com and co-host at The Investors Podcast network. As a graduate of both West Point and John Hopkins, Preston is certainly the only person we have interviewed who has both an MBA but can also fly a helicopter. Mostly in the interview we were talking about economics rather than military strategy, but the topic of a US/China war did come up briefly. Preston has spent a lot of time thinking about value investing, and some of the most interesting parts of our discussion centred around the effects that money printing and technological change have had for the traditional value investor. But we also had a wide ranging chat about many other topics, including Moritz’s current favourite: Bitcoin. Topics Discussed in this Episode Value Investing The correct discounting of future cash flows Demographic changes The debt cycle QE "I operate off this really fundamental thesis of manipulation: anytime somebody steps into a freely functioning system, like nature, for example, when man steps into nature and they start manipulating that, there is always a consequence of some sort that has to balance that manipulation out." Berkshire Hathaway The fundamental case for huge returns on Bitcoin “To be quite honest with you I don't know how anything is going to outperform bitcoin based on my opinions of how I think it's going to perform in the coming year and a half. I don't know how anything can outperform that simply because the market cap is so low.” Yield curve control "The fixed income market is completely manipulated." The failure of the dollar " Every single thing on the planet has to be sold in order to come up with dollars to adjudicate the differences of the trades and the differences of opinions and the impairment that happened on the balance sheets." The connection between Bonds & Bitcoin prices Why countries should be doing their best to accumulate Bitcoin Links Catch up with Preston Pysh and learn more about his work: The Investors Podcast We Study Billionaires Buffett's Books Follow Niels, Moritz, & Rob on Twitter: Niels Kaastrup-Larsen Moritz Seibert Rob Carver Subscribe on: Full Transcript The following is a full detailed transcript of this conversion. Subscribe to the podcast to get access to all of our transcripts as eBook downloads! Preston I wouldn't say that the value investing is dead, by any shape of the imagination. I think what you have happening is that because they're not supplying so much liquidity into the system, you have a different incentive structure that now exists than you used to have when it was just free and open markets and we would let businesses actually fail which doesn't seem to be a thing anymore. So, with that new structure you're now getting all this incentive to allocate capital into non-tangible assets (really strong, powerful non-tangible assets, technology-based assets). Think about, like, Google for example. They don't have the CapEx that your traditional brick and mortar type businesses have - they're global. If there are inflationary impacts they can just immediately adjust. It's dynamically adjusting the bidding of the prices for their ad revenue. All of those things; the technology piece is just crazy in this. So, there are a lot of things that are popping out of this manipulation. Introduction: For me, the best part of my podcasting journey has been a chance to refine my own investment framework through a series of conversations with extraordinary investors in every corner of the world. In this series, I, along with my co-hosts Robert Carver and Mort Seibert, want to continue our education by digging deeper into the minds of some of ...