Entrepreneur, investor, speaker, and author Jordan Belfort is best known as The Wolf of Wall Street, a persona that was the name of his bestselling book and a movie of the same name. The film covered many aspects of his life including his experience with penny stocks.
An exclusive interview with Benzinga reveals Belfort’s thoughts on the movie, the cryptocurrency sector, the rise of the retail investor and his new book.
Find more episodes on RazReport.com.
An exclusive interview with Benzinga reveals Belfort’s thoughts on the movie, the cryptocurrency sector, the rise of the retail investor and his new book.
Find more episodes on RazReport.com.
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00:00 I think from a business perspective, I think there's one thing in the movie that was wildly inaccurate,
00:06 was this idea that we were trying to lose people money.
00:10 Like, okay, first we're going to sell them a big stock, then we'll sell them dog shit.
00:13 No, that was never the idea.
00:14 The idea was like, you'd sell them big stocks first, and then sell them speculative stocks, VC stocks,
00:21 and then hopefully make the money.
00:23 I'd already been in business before that, and I went bankrupt.
00:27 I made a lot of mistakes in my first business, which was not in Wall Street,
00:30 which is in the meat and seafood business.
00:31 So I'd learned a lot about business by screwing up a business.
00:35 So, you know, one thing about, not just crypto, about all things in life,
00:40 is my views on these things continue to evolve over time based on new information, right?
00:45 So, you know, sell me this pen.
00:46 You know, how do you sell someone a pen or a car or an insurance policy or a stock
00:51 unless you know what their needs are, what their pain points are, what their goals are?
00:55 Hi, my name is Jason Raznick, the CEO of Benzinga, and welcome to the Raz Report.
01:00 As always, before we kick things off, I want to quickly tell you about what Benzinga is.
01:05 Before I started Benzinga in 2010, there were very few places to get real-time information
01:10 on financial markets.
01:11 I thought it was unfair that Wall Street had access to this information before the average
01:15 Joe investor.
01:16 So I created Benzinga to level the playing field for you, the retail investor.
01:21 Benzinga is for the people and by the people.
01:24 Now let's dive into the show.
01:25 All right.
01:26 Excited to have FinTech Power Hour, Powerhouse himself, Jordan Belfort for half an hour to
01:32 ask questions, learn what he's doing in crypto and just all the things.
01:36 Hopefully I'll ask some different things that someone else hasn't asked since you see Jordan
01:40 a lot and he's pretty well-fouled and pretty famous.
01:42 So, Jordan, thank you for coming on.
01:44 My pleasure.
01:45 Yes.
01:46 So I want to first start off with I'm just going to go to one of my favorite movies,
01:50 Wolf of Wall Street.
01:52 What was one thing the movie got wrong about your life?
01:54 I think from a business perspective, I think there's one thing that in the movie that was,
02:02 you know, wildly inaccurate was this idea that, you know, we were trying to lose people
02:07 money.
02:07 I mean, like, it's kind of like preposterous, like you would never try to lose a client
02:12 money or like, OK, first we're going to sell them a big stock, then we'll sell them dog
02:16 shit.
02:16 No, that was that was never the idea.
02:18 The idea was like, you know, you'd sell them, you know, big stocks first and then sell them
02:23 speculative stocks, VC stocks, and then hopefully make the money, for example, like on a Steve
02:28 Madden shoes, which worked really well.
02:29 We made more money on that deal and every other deal combined.
02:34 So you make a lot of the firm itself.
02:36 The brokers all make a heck of a lot more money when you make your clients money.
02:40 And when you lose your clients money, you have to find new clients.
02:44 So the idea that was the intent is preposterous.
02:47 I understand why Scorsese did it, because it's easy to understand that he was saying
02:52 there's a fraud going on, there's something wrong.
02:53 And that was the easiest way to explain that there's something wrong happening.
02:57 Well, in reality, the wrong was very esoteric on stock manipulation, front running things
03:04 that are not very exciting to watch on the silver screen.
03:07 So I understood his motivations as fine, but that was, you know, kind of just wildly inaccurate.
03:11 You would never try to do that as a broker.
03:14 And I think that, you know, you know, I'm not a big fan of stock brokers, per se, but
03:18 they don't actively want to lose you money.
03:20 They just it's just very difficult to make people money by trading.
03:24 Yeah.
03:24 So you guys needed to find was new deal flow to go after that.
03:28 You couldn't sell that deal flow.
03:29 And the hard part was finding those new good companies or tellies of the world.
03:33 Right.
03:33 Is that and so.
03:35 OK.
03:36 Yeah.
03:39 Yeah.
03:40 And then so what was one thing that gets right about your life?
03:43 The movie?
03:44 Well, I mean, there's the wildness, the drug addiction, the the camaraderie, how fun it
03:52 was because it was fun.
03:53 There's no denying it was a different time, you know, different rules of engagement back
03:57 in the 90s and the in the late 80s.
03:59 And there are today and we didn't have all or all stuck with this little terrible thing
04:03 called the smartphone that everything you do gets videoed.
04:06 So the world was a safer place back then.
04:09 So it was really fun.
04:10 And we had a brilliant time.
04:13 You know, you it was like you used to call Broker Disneyland.
04:16 I think they captured that really, really well.
04:18 Yeah.
04:19 I mean, these phones are great for some things, but they've ruined a lot.
04:22 They absolutely.
04:23 Yeah.
04:23 Instagram.
04:24 It's ruined a lot like it's just you know, there's a lot of stuff.
04:27 It's ruined.
04:28 I'm like, who was the cop that would call you and what's his name?
04:32 The guy in New York used to be, you know, a little Bo Diddle.
04:36 I sat in when the movie came out.
04:38 I was in Miami.
04:39 We had dinner right next to him.
04:40 Was it the first week the movie came out?
04:42 So people don't really know him.
04:43 But I just I saw the movie the day it came on.
04:45 The writer was pretty funny.
04:46 He was pretty excited to be in there.
04:47 Was that did he play himself?
04:49 Was that was he involved?
04:50 Yeah, yeah, yeah, yeah, absolutely.
04:51 Yeah, he was my head of security and had bodyguards at my house.
04:55 And he, you know, was organizing all that.
04:58 And yeah, his scenes are very accurate, by the way.
05:01 Very.
05:01 OK, they are.
05:02 OK, and then the other thing I was going to say, you you in the movie,
05:06 they had you come into some like place and then you got on the phone
05:09 and you just sold these guys were like, wow, that you like how amazing
05:13 of a sales guy you were in the movie in the beginning.
05:15 You went into that one place.
05:17 Was that just a Hollywood?
05:19 Probably that's probably that's probably one of the most accurate scenes in the movie.
05:23 That was literally identical, almost identical to what happened.
05:26 Yeah, yeah.
05:27 OK, I always wondered that.
05:29 And then my other scene was when you went into that summer party house
05:32 and there was a girl there that was someone else's girlfriend.
05:35 And then that's who I think you married.
05:36 It was that was that was also just literally dead on balls.
05:40 Actually, that was my house that I was throwing the party.
05:43 And and this girl walked in.
05:44 It was gorgeous.
05:45 And yeah, with a guy and I I snatched her in my younger days, my younger
05:50 and bolder and wilder days.
05:52 Yes, yes.
05:53 OK, now we're going to keep a couple more questions in the movie.
05:58 So, I mean, you get to say Leonardo DiCaprio played you in a movie, which is crazy.
06:02 And he got robbed.
06:03 How he didn't win the Oscar is it's a bomb.
06:07 I know, I know.
06:08 But for the act, I mean, it's abominable.
06:10 I still it's one of the I don't I know whatever who gives an award.
06:14 But you should have won that.
06:15 Well, I mean, I think that on some level, you know, the Oscars are not just about who
06:20 is the most talented or best executing actor.
06:23 It's also, you know, what's the social message of the movie?
06:25 And some messages are inherently more popular than others.
06:29 And and I think that, you know, there was a sort of the the nature of the subject matter
06:35 made it an uphill battle.
06:38 So, you know, and like, for example, I think that and that ironically, you know, who won
06:42 the Oscar, it was Matthew McConaughey, who was also incredibly brilliant in The Wolf
06:46 of Wall Street.
06:47 He won a Dallas, Dallas.
06:49 Dallas.
06:49 Come on.
06:50 You said you said Matthew McConaughey, you got to do this now.
06:53 Exactly.
06:56 He won the Dallas Buyers Club, right?
06:58 Yeah, great.
06:59 And it's a great it's a great website or I think on YouTube called.
07:04 What is it?
07:05 They make fun of they do funny trailers for movies, right?
07:09 And they they make fun of movies by having mock trailers.
07:13 And and one of you look at the trailer for the what's I forgot what it's called.
07:16 Anyway, the trailer they make for The Wolf of Wall Street, like starring, you know, Leonardo
07:21 DiCaprio, they make fun of Leo, they starring and they show Matthew McConaughey and they
07:26 and they refer to him from Dallas Oscar Stealers Club and watch as the guy who stole best actor
07:32 stops by to pound his chest right in Leo's face.
07:36 That's that's true.
07:41 And by the way, if you think about what seat like Matthew is obviously very famous, but
07:46 that scene of part of the amazing.
07:48 Yeah, it's it's played everywhere.
07:50 I was just at a sporting event.
07:51 Oh, the Lions, Kansas City in Thursday Night Football.
07:54 They play that thing so many times.
07:56 And it's like, that's your movie.
07:58 Even you should get a wheelchair to play it.
08:00 I should.
08:00 What's one thing last if you could go back and change one thing about the movie, about
08:05 the movie, what would it be or nothing?
08:07 Um, well, there's one scene in the end where I punched my wife in the stomach, which was
08:16 which is pure fiction.
08:17 I never happened.
08:18 I never hit my wife like that.
08:20 And I guess, you know, it didn't bother me in the sense that because, you know, I knew
08:24 it wasn't true.
08:25 My children knew that it wasn't true.
08:28 And they also asked me for permission to do it.
08:31 You know, they didn't just do that and then surprise me.
08:33 Leo called me and say, listen, Marty wants me to do this and just want to make sure that
08:37 it's OK with you.
08:37 We think it's going to make the scene more dramatic.
08:39 And I'm like, just do whatever you want to make the best movie possible.
08:42 So, you know, because, again, you know, it's a movie and it's not like it's not a documentary.
08:47 Right. And I think people, you know, know there's some poetic license taken with some
08:51 of that stuff.
08:52 So that's actually, you know, when that, you know, every time I watch that kind of, you
08:56 know, it's sort of like I don't like seeing like that sort of, you know, action taken
09:00 by my character.
09:01 But like, you know, I know it's not true.
09:02 And, you know, and I think most people that really anyone that cares that I care about
09:07 that, you know, knows me as a friend or a loved one knows it's not true.
09:11 But I guess I'd like to see that changed.
09:13 What about the helicopter scene?
09:14 Was that any truth?
09:15 That's accurate. That's accurate.
09:17 Yeah. Oh, my God.
09:18 How about the one of the funniest scenes?
09:20 This is my last one.
09:20 The one of the Lamborghini.
09:22 That is unbelievable.
09:24 That's 100 percent true.
09:25 The only the only that's not true is it wasn't a Lamborghini.
09:28 It was a Mercedes.
09:28 Everything else is 100 percent.
09:30 You're kind of Mercedes.
09:31 It was a I was back then.
09:33 It was a 500 convertible.
09:35 So like I was like, yeah, yeah.
09:36 I was like, you know, white 500 convertible.
09:39 Yeah.
09:39 But how about going up the stairs?
09:41 That was all 100 percent true.
09:42 That I cried when that happened.
09:45 I cried.
09:45 Wait, no, the student.
09:47 I was going to say that was funny.
09:48 The webcam.
09:49 When you're what?
09:51 True.
09:52 Really?
09:53 Oh, yeah.
09:54 Yeah. Yeah.
09:54 Yes.
09:55 All right.
09:57 All right.
09:57 Look how famous Margot Robbie became from that movie.
10:00 Oh, my God.
10:01 Margot, do you ever talk to her?
10:03 Yeah, she's amazing.
10:04 Margot.
10:04 She's a violation.
10:05 The sweetest person ever.
10:06 Yeah, I do speak to Margot occasionally.
10:09 And when I run into her, it's always a great thing.
10:11 And she's amazing.
10:13 Yeah, she's doing amazing.
10:14 How about Leonardo?
10:15 Do you ever talk to?
10:16 Yeah, of course.
10:16 Yeah.
10:17 Oh, yeah.
10:18 Recently.
10:18 Yeah.
10:19 Oh, that's great.
10:20 OK.
10:20 All right.
10:21 So now we're going to go to your life.
10:23 Let's talk about, you know, well, I guess this is real life mixed with, you know, so
10:26 you started your Wall Street firm when you're just like 27 years old, right?
10:30 Twenty five.
10:33 Twenty five.
10:34 So how did you get started?
10:36 Like you were working somewhere else.
10:38 You're like, OK, I can do this better.
10:40 Like, how did you first put the first shingle up?
10:44 So I already been in business before that, and I went bankrupt.
10:49 I made a lot of mistakes in my first business, which was not in Wall Street, which is in
10:52 the meat and seafood business.
10:53 So I learned a lot about business by by screwing up a business.
10:57 So I always had that sort of entrepreneur's mentality since I was very young.
11:01 I was, you know, trying to execute our ideas.
11:04 And then ultimately, after the market crashed and I went to that small firm, a penny stock
11:12 firm, and, you know, I was so much of a more accomplished, better salesperson than everyone
11:18 else.
11:19 And I was approached by the manager.
11:21 He says, hey, let's open up our own place and blah, blah, blah.
11:24 And at first I was very reluctant because, you know, I just did a disastrous business
11:28 before then.
11:29 But ultimately, I started to investigate it.
11:32 And when I went into meetings with lawyers and and people in the industry, you know,
11:37 I think I was very impressive at that age because I had a lot of business experience
11:41 and I was well spoken and and and I had support from people in the industry saying, if you
11:46 want to do this, we'll get behind you.
11:48 And ultimately, I took a I think was probably the most logical path to get in, as I started
11:55 off as a franchised operation.
11:57 Like I was, I was called the Office of Supervisory Jurisdiction, OSJ from another firm, a small,
12:02 very small firm.
12:03 So that allowed me to sort of leapfrog into the business without having to do all the
12:07 back office stuff from scratch, get licensed with the NASD from scratch.
12:12 I was able to sort of get in under the umbrella of a very small firm.
12:17 But then very quickly from there, and I also got very lucky with attracting some incredible
12:23 talent.
12:23 One man in particular, a guy who was a an old Wall Street war dog type, was a clearing
12:31 expert in back office operations, Mike Valinotti.
12:34 So Mike really built the entire back office operations for me.
12:38 I had some mentors along the way on the investment banking side, not very good ones, which ended
12:43 up ultimately biting me in the bucks.
12:45 I learned some things and I probably could have gone a much different way.
12:48 I've had some early stage mentors in the investment banking side that were more legit.
12:53 But the sales side that I think came naturally to me.
12:57 So really, those were the different aspects.
13:00 My dad, who is a CFO, came in to run the money side of things.
13:04 So I just was very lucky.
13:05 I had great people surrounding me that knew the aspects of the business that I didn't
13:10 know myself.
13:11 And that was how I did it.
13:13 Now, those investment bankers are the guys you said that weren't the right guys.
13:17 Do you think back then you just thought everyone was great and some of these guys didn't have
13:22 the best interests aligned or something like that?
13:25 Like you have a sixth sense for sales and a lot of things.
13:28 But do you think like maybe you misjudge some people when you first met them or something?
13:33 Um, it's not that I misjudge them.
13:36 I think I correctly judge them.
13:38 But I had my barometer of what is good and bad was probably a bit off at that point is
13:46 as a young guy wanted to make money quickly.
13:48 And, you know, they were honest in the sense that they were honest with me, most of them.
13:54 But they were doing things in a way that were somewhat dishonest.
13:59 Now, that being said, Wall Street's a fucked up place.
14:03 I mean, like, you know, if you go to the there's no greater, you know, a criminal enterprise
14:07 than Goldman Sachs.
14:08 I mean, frankly speaking, he's no great crime out there that they're not behind.
14:12 Now, they also do a lot of good things as well.
14:15 And I think that, you know, when you get that big and you're part of the establishment,
14:19 you get away with murder, basically.
14:21 And we saw that happen in grand form in 2008, where you suddenly and I was saying it all
14:27 along and I wasn't the only one saying it, but you watched how they basically sold out
14:30 the entire country, but, you know, to make a profit with the, you know, instituting,
14:34 you know, policies and and and loopholes and and and things that allowed the financial
14:40 crisis to come about and with mortgages and and whatnot.
14:43 So it wasn't just that, you know, I was doing things wrong.
14:46 Wall Street is a very corrupt place.
14:48 It really is.
14:49 It's a necessary place.
14:51 It does good things as well.
14:52 And I think that's why there's so much anger and, you know, moving on to crypto.
14:55 I think one of the reasons why people were looking to embrace crypto is that, oh, it's
14:59 going to be better without Wall Street, without, you know, Wall Street's so corrupt.
15:02 And what turned out, you know, crypto was even more corrupt than Wall Street, at least
15:06 most of it.
15:07 Right.
15:07 So so, you know, I think the hundred percent the common denominator is human beings are
15:12 involved.
15:13 So, yeah, I by the way, you don't know, I was the chair of the UCC, you know, whatever
15:20 credit committee for Voyager from the bankruptcy.
15:21 I was one of the larger creditors.
15:23 Didn't turn out as bad as it could have, but it turned out very, very bad.
15:27 And I just invest in USDC.
15:29 And what it was is people are just putting money in and then they were lending the money
15:33 out.
15:34 And when I thought, you know, the USDC guys said, oh, we're just, you know, we're
15:38 disrupting the banks.
15:38 We're giving mortgage credit card interest.
15:40 I end up losing a nice six, seven digits, seven digits on Voyager.
15:44 And I was on this UCC most unrewarding job ever.
15:47 I like it.
15:48 Yeah.
15:48 And that was crypto.
15:50 Again, the common denominator that is human beings and whenever you have human beings
15:55 involved in stuff is going to be fraud.
15:57 There's going to be good things happening as well.
15:59 And in the absence of extreme regulation, it's going to be worse, not better.
16:03 You need regulation for these things because it's just, you know, without regulation,
16:06 people run amok.
16:07 And even with regulation, people run amok.
16:10 But at least there's some semblance of law and order, you know?
16:13 Yeah, I thought it was like a risk free.
16:14 And my brother, who's the older lawyer, smarter and more conservative, he's like, Jason,
16:19 you're getting 9% return when rates are 0.5.
16:22 This is going to be true.
16:22 So luckily, I sold some of it, but that was that's what I didn't, you know.
16:27 So when you started, how did you get your first few clients?
16:29 Like, like, how did you go about that?
16:31 Calling?
16:32 Yeah, on the phone, call calling.
16:35 Yeah, you did.
16:36 Mr.
16:36 The list of America's wealthiest, you know, investors, you just call them on the phone
16:40 and you go through massive amounts of numbers to get people that are interested.
16:43 And then you call them back and sell them on a stock.
16:46 And that's how it starts.
16:47 Yeah.
16:47 Good old fashioned, brute force call calling.
16:50 Like you're very famous for like how to, you know, selling selling the how would you sell
16:54 this pen to me?
16:55 You're very famous for that, right?
16:56 Like, right.
16:57 Everyone knows that line like is what what's the trick in that or how do you know?
17:01 Well, and the trick to that is really, you know, the idea is that, you know, it's about
17:07 asking questions versus trying to sell someone a pen or anything else.
17:11 So, you know, you sell me this pen, you know, how do you sell someone a pen or a car or
17:16 an insurance policy or stock unless you know what their needs are, what their pain points
17:21 are, what their goals are?
17:22 So, you know, the first thing you want to do as a salesperson is not is not try to sell
17:26 something, but to ask questions to identify the needs, their values, their pain points.
17:31 And then from there, you can move in and try to resolve those things elegantly through
17:37 a sales pitch.
17:37 But without that, the first part happening, you're flying blind and he's like social
17:42 disingenuous because you need to know what someone's needs are before you attempt to
17:45 fill them.
17:46 Yep, yep, absolutely.
17:47 OK, going to this and Strand Oakmont took a lot of companies public, including Steve,
17:52 including Steve Madden.
17:53 Did you just love the energy of taking companies public and be involved in that process?
17:58 Yeah, it was great.
18:00 It was it was amazing.
18:01 I mean, I think it's so sad in the sense that, of course, it was so much about Stratton that
18:07 was legitimate and was great and awesome.
18:10 And the shit that I did wrong was corrupted it and then and ultimately forced me to be
18:16 thrown out of that industry.
18:18 Right.
18:18 A relatively young age and whatever, you know, cashed out, made a lot of money and then went
18:23 to jail down the road.
18:24 Right.
18:24 And then I give it all back.
18:26 And that's sad because it was so much great about Stratton.
18:29 But I did love taking companies public and I love venture capital.
18:32 Even to this day, I still engage in venture capital.
18:35 I think we're going to deal together.
18:36 In fact, you mentioned Telly, a mutual friend.
18:40 And so I look to find good companies.
18:42 But that's a dangerous business venture capital for the for the uninitiated and for the unsophisticated.
18:48 So you're going to be very careful.
18:49 You have to realize no matter how how carefully you try to vet companies and pick them, you
18:53 know, you're lucky if one out of ten of them does amazing, hopefully two, maybe two out
18:58 of three, two to three will break even.
19:00 But you can have five or six disasters on your hands, no matter how hard you try.
19:04 That's just the nature of the beast.
19:06 And and and on that level, that's really what Stratton was.
19:09 We were public venture capital firm.
19:12 We're raising money for these firms that really should have been private still.
19:18 So in other words, the VC gets in very early.
19:21 Well, we were getting in just as early, but with public money.
19:24 That's dangerous.
19:26 You know, it's very speculative.
19:27 But when you do get winners like a Steve Madden, you have a valuation start off as like a ten
19:32 million dollars and now it's probably three billion.
19:34 So four more, five billion.
19:37 So, you know, you can hit these huge home runs.
19:38 And Steve Madden wasn't the only winner.
19:40 We had we had many winners, at least at least five or ten really great winners.
19:44 But we also probably 90 losers, massive losers.
19:47 Right.
19:47 And then also, you know, we you know, we you know, again, did other things in the beginning
19:53 that were traded.
19:53 The way we traded the deals was was a bit, you know, to say that not a bit was corrupt.
19:58 Those was illegal, but no different than what all the big firms were doing as well.
20:03 Yeah, because you're basically saying train ahead and the big firms would do similar things.
20:07 They knew a deal was going down the same thing.
20:09 Exactly the same thing.
20:11 They called it laddering.
20:12 You know, they did.
20:12 They best clients get at the early stage and they make people up up a level.
20:17 Same thing.
20:18 Yeah.
20:18 Yeah.
20:19 And they had this fake Chinese wall, basically, that, you know, they got it got tougher over
20:24 time.
20:24 But yeah, ladder.
20:25 So it's different ways.
20:26 And with the feds, when it whatever they could go after, they went after at one point.
20:30 But, you know, they had better lawyers and they had longer cons like their their their
20:37 their schemes were longer in duration and better papered to create plausible deniability.
20:45 And and and also I got unlucky when I got invited for was, you know, the money I smuggled
20:51 to Switzerland.
20:52 Ultimately, the other stuff was very difficult to prove.
20:55 And was that true, by the way, money on the body and all that?
20:58 Yeah, absolutely.
20:59 Why don't you just go on private planes and they still do the red flag?
21:04 Yeah, it's a red flag, you know, from a private jet and you still have to carry it through
21:08 customs yourself.
21:08 But no, you're right.
21:09 We just did the can.
21:10 You're right.
21:11 OK, we're going to crypto now.
21:12 So at one point you called crypto insanity, mass delusion.
21:16 Now, I think you've changed your mind a little bit on crypto, right?
21:19 Like, yes and no.
21:20 I mean, I think I was right with most of the ninety nine percent of crypto.
21:25 I was wrong about Bitcoin and and and Ethereum and maybe one other.
21:29 I don't know.
21:30 So I think that, you know, my you know, one thing about about not just crypto, about all
21:36 things in life is my views on these things continue to evolve over time based on new
21:41 information.
21:42 Right.
21:42 So at the time when I said crypto is a complete scam, I believe that I believed it was.
21:46 And based on the information I had, I think I was right.
21:49 And I think that sometimes a scam becomes legitimate.
21:52 Like it happens often with a lie becomes the truth.
21:55 And Bitcoin is a perfect example of the lie becoming the truth, where in the early days
22:00 I wouldn't say it was a scam, but it was it was controlled by a few was very not decentralized.
22:04 It was being propped up and pumped up.
22:06 And I was right when I say crypto is Bitcoin is a scam.
22:09 It was 19 or 20,000.
22:10 It crashed out to 2000 because at that time that that run up was completely bolstered
22:15 by fraud and inside dealing and was trading.
22:18 And it was, you know, very much of a concentrated, non-institutional run.
22:23 And I think that I was right about that.
22:25 What I was wrong about was that I didn't look deeply enough at Bitcoin itself into
22:29 the code, into what it really did.
22:31 And I think that, you know, it's a really elegant solution.
22:34 Bitcoin is a store of value, at least.
22:37 And now now I know there's, you know, greater and greater effort to try to make it more
22:41 into a payment, you know, through lightning network or whatever.
22:44 But, you know, I think that, again, my views on crypto were dead on balls, accurate for
22:51 all the shit coins and all these other money that was just destroyed.
22:57 There's a fleece from investors or all these, you know, these crazy, insane deals.
23:01 There's a Terra Luna or FTX or all these things.
23:05 I think I was mostly right.
23:06 But what I was wrong.
23:07 Yeah, I was wrong about was Bitcoin itself, though.
23:11 And I think Michael Saylor really gets it right in this in this regard is that, you
23:14 know, Bitcoin is really is a is a really elegant thing.
23:18 It is.
23:19 Yeah, I remember watching interviews of you and you saying these NFTs, all these guys
23:22 selling these things, they're going to they're going to get their asses handed.
23:26 I never saw.
23:27 Yeah, yeah.
23:27 I never, for example, like I was offered, as you can imagine, many times to do wolf
23:32 NFTs.
23:32 Right.
23:32 And and I could have made a quick twenty, thirty million dollars off that.
23:37 But I never did.
23:37 I went I went very close to trying to like I would investigate it.
23:41 I would get close to doing it.
23:43 But then every time I got to the to the end zone, I'd be like, I just don't see how
23:47 this is not going to be a fucking disaster in the end.
23:49 OK, I didn't see a legitimate use case.
23:52 So, you know, how would it maintain its value?
23:54 And and I saw other people, some very well respected people who who made like 50, 100
24:01 million dollars like they lost their clients all the money.
24:03 I don't understand how they got away with it.
24:04 Maybe they didn't.
24:05 The wheels of justice grind slowly sometimes.
24:07 But I know some people that like that sold massive tens of millions of NFTs and they
24:12 just evaporated in value.
24:13 They're worthless now.
24:14 And and and and they're they're still acting as if everything and they've been it's been
24:19 accepted that they did this.
24:21 I don't get that.
24:22 So, yeah, I don't know if what's going to happen there.
24:24 I mean, yeah, who knows?
24:26 That's a justice.
24:27 Takes time, you know?
24:28 OK, OK.
24:28 Yeah.
24:29 And Kathy Wood is a big believer in Bitcoin.
24:30 She says I had her on the show last week.
24:32 She says two weeks ago she thinks Bitcoin will hit a million a share a million things.
24:37 So who's to say?
24:38 I mean, listen, I own I'm long a lot of Bitcoin and everything I'm long.
24:42 I'm long for the very long term.
24:44 I don't think you can really I don't think it makes sense to try to trade Bitcoin as
24:48 a nonprofessional investor.
24:49 And I think that if you want to buy some Bitcoin as part of your overall portfolio, I think
24:57 it's a good thing to do as a small percentage of an overall portfolio.
25:01 Got it.
25:02 OK.
25:02 Now, what about this pet themed crypto project that you're involved with?
25:06 No, I'm not even involved in.
25:10 So that's a perfect example of where I got involved.
25:12 I got involved in it and I didn't make any money on it.
25:15 I didn't take any fees from it.
25:16 And I thought it was a cool idea because I have dogs I love.
25:19 But is this is this is this Potico?
25:21 Is that what they're talking about?
25:22 Yeah, yeah, yeah.
25:24 They gave me tokens.
25:25 I never sold one.
25:26 And, you know, I put a little money in.
25:30 I lost every dollar I put into it.
25:31 And now, but again, like everything else, all these ideas that seem like they made sense
25:37 back in the day.
25:38 So I say even my own views continue to evolve.
25:40 Like I invested, I lost a lot of money in these in these in these coins myself.
25:45 I did try to invest and get involved in deals.
25:48 Sometimes I bought them in the open markets as I was early stage.
25:51 But I never sold anything.
25:53 I'm always a very long term player and stuff.
25:55 Right.
25:56 I never I never made a penny in crypto.
25:59 But I would think people would want to give you their NFT or their project because then
26:03 they would want you to promote it or they think if they gave it to you.
26:06 Yeah, they did.
26:07 But I never did that.
26:08 I didn't do that, though.
26:09 I never engaged in that.
26:10 So those projects, you're not a big fan of that.
26:14 What about so you like Bitcoin?
26:16 I like Bitcoin.
26:17 Do you prefer Bitcoin or Ethereum?
26:18 So I think I have to say Bitcoin, but mostly because I think Ethereum
26:27 potentially, you know, has, you know, all these these use cases, right.
26:32 You know, but that being said, I don't I still still don't know what those use cases are.
26:38 You know, and I think that Bitcoin is really established itself right now, at least as
26:44 we see from all of these rush to make, you know, from the bigger institutions to create
26:50 ETFs.
26:51 And there's been a lot of institutional sponsorship coming in.
26:55 And I think it's a great leading indicator for Bitcoin far less so for Ethereum yet.
27:00 I would I definitely think Ethereum is legitimate.
27:03 I don't think Ethereum is a scam.
27:05 I think it's very decentralized.
27:06 And but again, I don't know.
27:10 I have a long Ethereum as well.
27:12 I have Ethereum as well.
27:13 Those are the only two positions I maintain are Bitcoin and Ethereum.
27:16 And I have less Ethereum than I have Bitcoin, but I still am not quite sure of precisely
27:23 what problem it's going to solve.
27:25 And that's what and that's what you're looking for.
27:27 And then, yeah.
27:28 And so, you know, us being Benzing, we're financial news media.
27:32 We have this digital asset day.
27:33 I mean, it's crazy what BlackRock's doing with Bitcoin and get involved.
27:36 And once BlackRock starts coming in, you're going to see more institutions.
27:40 And hopefully that since Bitcoin only has 20,000 coins, hopefully, you know, maybe the
27:43 price goes up over time.
27:45 But so far, it's just been stagnant for right now.
27:47 But maybe that changes in the next.
27:50 Listen, my my belief is that Bitcoin is going to go higher over the long term.
27:55 But that and that's just my opinion.
27:58 It's my belief.
27:59 I am.
27:59 I'm not certain that I do smart guys, you know, own Bitcoin to smart like, you know,
28:04 doing some some don't some hate it.
28:06 Some love it.
28:07 OK, some hate it.
28:08 So I have some friends that are very smart that absolutely hate it.
28:12 For example, Ilya posing right from telly hates absolutely despises it in every single
28:18 way, hates it, would never touch it with a 10 foot pole, anything crypto related.
28:22 What about Shervin?
28:23 Shervin's probably somewhere that much short lesson.
28:26 I'm probably more in the middle.
28:27 I don't know.
28:27 I really can't I can't answer that.
28:29 Yeah, but but it's a good question.
28:32 I never asked him.
28:33 I should ask him.
28:34 But I have other friends that are very, very smart that that own Bitcoin.
28:39 But I think at this point, almost everyone is unanimous, unanimously of the thought that
28:47 all this other nonsense with crypto is just complete nonsense and a scam.
28:52 And it's all bullshit.
28:54 OK, so we took questions from the audience that like, you know, who follow Benzinga.
28:59 So they want to know, do you have any favorite penny stocks?
29:02 No.
29:03 OK, what are ways to tell if a penny stock is garbage or good?
29:08 Well.
29:10 I think that by and large, you know, almost all penny stocks are garbage, you know,
29:16 that's my opinion, knowing the penny stock world really well.
29:20 I think that.
29:21 For the most part, penny stocks are not designed to work,
29:28 that they're designed to enrich the people that issue them like so.
29:32 I just think that the stack is that deck is so heavily stacked against investors
29:37 in the penny stock world because you're not dealing in a in a realm where
29:45 the whole the companies themselves are designed and the market capitalizations are.
29:49 Oops, sorry.
29:50 And the market capitalizations are in line with reality.
29:54 That's not to say that every once in a while a penny stock doesn't become real,
29:58 because I guess they do.
29:58 Right.
30:00 But I think what you need to do as an investor is you have to make a distinction between
30:05 the stock and the company.
30:07 So there's the stock, right, which is the stock with a price to be 10 cents or $10.
30:12 You can do a reverse split and make a 10 cent stock, $10 if you please.
30:16 Right.
30:17 So I think this and the question is, is what is the company doing?
30:20 What's the management like?
30:23 What's their track record?
30:24 And is the business itself really have any shot of making money now in the United States?
30:30 Mostly the answer to that is no.
30:33 You know, it's very, very rare that a penny stock becomes real in other parts of the world,
30:38 though, for example, like in Australia.
30:41 They do have a lot of stocks that are specifically priced in pennies in the mining sector,
30:47 and many of them are real companies.
30:48 They price their stocks in pennies.
30:52 So you might find a 25 cent stock that actually has a legitimately good shot with good management.
30:57 Right.
30:57 And when it becomes successful, it might be $3, but it has a mark cap of $5 billion because
31:03 there's so many shares outstanding.
31:04 So you have to remember that a price of a stock is always in relation to its market cap.
31:10 The more important question is, what's the market capitalization?
31:14 Right.
31:14 Sometimes you might find a stock that is a penny stock that didn't start off as a penny
31:18 stock.
31:18 It's like the stock crash for some reason.
31:20 It became a penny stock.
31:21 That might be more interesting where the company is still legitimate and they just have a problem.
31:26 And then and now you're you know, you find a great management team.
31:29 You find an opportunity where a distressed situation that's a penny stock that used to
31:33 be a real stock, but things that started off as penny stocks that were merged into shells
31:39 and whatnot, it's very, very rare to end up working.
31:42 Yeah.
31:43 I mean, sometimes the stories are just so nice, like it's going to be the supplier to
31:46 Tesla and batteries.
31:48 But the reality is, it's bullshit.
31:50 Well, I mean, yes, that's part of it.
31:53 That's part of it, you know, and then and it's also it's not designed.
31:58 They're not designed to work for the long term.
32:02 Their market caps are out of whack for what the company is fundamentally worth.
32:06 So it creates this problem where you can't really get institutional sponsorship in the
32:10 stocks at all.
32:11 You know, hot money with, you know, investors and these people that are typically organizing
32:15 PR campaigns to pump things up and then only dump them.
32:19 Now, if you want to play the game, like play the pump and dump game, meaning try to figure
32:24 out that you get in on the right side of a pump and dump.
32:26 You could do that for fun.
32:28 I mean, if you find that fun, that's OK.
32:30 You want to speculate with a few bucks.
32:32 You know, let's say you pick take 95 percent of your portfolio.
32:35 I just wrote a book which is coming out in the end of October, right, called The Wolf
32:41 of Investing.
32:42 Right.
32:42 And it's a Simon & Schuster is my publisher.
32:45 It'll be out in bookstores on Amazon.
32:47 Right.
32:48 It's available for presale right now.
32:49 And so I think it's a great book.
32:51 And what I really talk about is, you know, it's OK to speculate with anything.
32:58 If it's a very small percentage of your portfolio, like five percent of your money to have fun
33:03 with, that's exciting.
33:04 That's cool.
33:05 You want if you like doing that stuff.
33:06 So all the power to you.
33:07 So we want to play the penny stock pump and dump game, meaning try to figure out what
33:11 they're pumping up next and get in before they dump it.
33:14 You can make money like that.
33:15 Mostly you lose, but you everyone's off.
33:17 You get really good at you can make money if you're in the right network of people.
33:20 But that's not investing.
33:21 That's speculation.
33:22 And that's a very big difference between the two.
33:25 The vast majority of your money should be in an S&P 500 index fund that pays, you know,
33:30 that you reinvest the dividends.
33:32 That has a very low cost basis to it and virtually no fees like a Vanguard fund or something
33:38 like that.
33:38 That's the bulk of your money should be.
33:40 Got it.
33:41 OK, couple of last questions.
33:42 Do you think retail traders are smarter than they were before, like 20 years ago?
33:46 Why?
33:48 I think that retail traders, I wouldn't know if they're, say, the smarter or stupider.
33:54 They certainly have better tools and access to information they didn't used to have.
33:59 So, for example, you know, back in the olden days, I've been pre-internet, and especially
34:05 the modern Internet where everything really all the news is out there.
34:08 There used to be a significant gap in technology and in news and in that, you know, people that
34:14 so-called in the know would have access to information and research a lot sooner than
34:20 the average investor.
34:21 That gap has been completely obliterated.
34:24 Any investor that wants to educate themselves and receive news in a real time basis can
34:30 do so right now and get it on the Internet.
34:32 Right.
34:32 So that certainly has made people, I wouldn't know if they say it's smarter, but certainly
34:36 better informed.
34:38 And with that comes the opportunity to at least level the playing field somewhat.
34:44 But still, again, you know, one of the messages in my book, The Wolf of Investing, is that
34:49 all of these sort of short-term trading strategies, they've proven over time not to stack up to
34:55 a long-term investment in a low, you know, in a very low expense index fund like the
35:01 S&P 500 that beats these things consistently, not every year, but over the long term.
35:07 So that's really where the bulk of your money should be going.
35:11 Well, because you just said level playing field.
35:13 And the next question was, do you think retail is edging closer to a level playing field
35:17 where institutions aren't two steps ahead or are institutions always going to be two
35:22 steps ahead?
35:22 I think they're always going to be ahead because, for example, now you have, you know,
35:26 like this high frequency trading, right, where you have these lightning fast computers which
35:32 are executing millions of orders in microseconds, and they're able to legally front run the
35:39 market.
35:39 And that creates a playing field that's not level.
35:43 You also have, you know, companies like Goldman Sachs, which also hedge funds that certainly
35:47 have access to information at an earlier point than the average investor, although it might
35:54 just be days or hours now versus it used to be, could be weeks before, right?
35:59 But I still think that you have these big institutions that are going to have an edge
36:03 on you.
36:03 But even they, they don't beat the S&P 500.
36:06 They don't.
36:06 Even the hedge funds can't beat the S&P 500.
36:08 And if they do, you know, when you subtract the fees out, they don't.
36:12 So it's like I think there's a way to beat, there's a way to offset all this, and that
36:16 is to be a long-term investor in index funds.
36:18 Well, the thing that I find super crazy is that, like, in these pension funds and endowments,
36:24 they're invested and actively managed like mutual funds.
36:27 They're not buying indexes.
36:28 I'm in the board of one of these things.
36:30 And I looked at our returns, and they're not buying indexes.
36:33 And I said, why aren't we getting indexes?
36:34 They're like, well, we believe that this helps with volatility when it's down.
36:38 I said, OK, so let's see the last five to 15 years.
36:41 Our return or the nonprofit's return is 4% on average the last 15 years.
36:48 That's 10%.
36:48 Exactly.
36:50 The 10.5, especially about over 100 years.
36:54 So I think that what happens there--
36:56 Why is that?
36:57 I explain that in my book in excruciating detail.
37:01 You do?
37:02 OK, this is great because no one talks about that.
37:04 I do.
37:05 Not in a written form.
37:06 Not like--
37:06 There's a reason.
37:07 That's great.
37:07 There's a reason.
37:08 I do it in a very funny, ironic way.
37:11 It's partially because there's this--
37:15 the military industrial complex keeps the United States constantly at war.
37:21 Well, you have something called the Wall Street fee machine complex,
37:25 which keeps people constantly trading, and churning, and buying, and selling.
37:28 And there's this whole infrastructure set up around that, which basically
37:35 tries to convince people.
37:37 And there's the money management industry.
37:39 And it's this 900-pound gorilla that sits on top of the market and basically
37:48 has people at institutions brought into this cycle of managing money on an active basis,
37:55 despite the fact that virtually every--
37:57 not virtually, every academic study out there, going back to the 1905,
38:03 will show you that active investing does not beat passive investing.
38:07 It's impossible, virtually impossible, to beat the market.
38:10 Now, that being said, every once in a while, you have a rare animal, like a Warren Buffett,
38:14 who does beat the market, right?
38:16 And they're amazing, those people.
38:18 There's very few people that are just incredible, like a Tepper, that are just amazing.
38:22 But guess what?
38:23 You can't invest in their funds, so to speak.
38:25 You could buy Berkshire Hathaway.
38:26 Most of these amazingly sophisticated hedge fund guys, the ones that are really worth
38:33 their weight, that are worth their 2 and 20, they're not open to you anymore.
38:37 They're only with a few select people.
38:39 And the ones that are open are the ones that don't deserve to charge a 2 and 20,
38:43 whatever they're charging, meaning 2% management fee, 20% of profits, right?
38:46 So you have this whole structure out there, from mutual funds to hedge funds to money
38:55 managers, whatever they are, right?
38:56 And it's all sort of this vest that you could draw a straight line back to the 1920s and
39:01 see exactly how it all came to be, why it's still there, how it's gotten better, for sure,
39:06 because of people like Jack Bogle from Vanguard, who really called the mutual fund industry
39:12 out and caused their fees to collapse.
39:13 But still, they're out there, and they don't stack up to investments in a low-cost index
39:18 fund, but they're still there.
39:21 And you have to scratch your head why it's still happening.
39:23 It's gotten better, for sure.
39:24 There's a lot more indexing going on right now than there was 15, 20 years ago.
39:28 But there's still way too much managed money, I believe.
39:31 Oh, my God.
39:32 It's crazy.
39:32 And this one fund, I mean, I'm like shocked by it.
39:34 OK, two last questions.
39:37 You and Grant Cardone ever make up, or are you guys--
39:39 Yeah, I don't beef with Grant Cardone at all.
39:42 I think Grant had a bad moment on my podcast.
39:44 And I think that I wish him nothing but the best.
39:48 And when I saw him last time, we hugged, and not even a word was said.
39:50 And again, I don't hold grudges.
39:56 And I wasn't even trying to hurt him on my podcast.
39:58 I was just trying to have a great conversation.
40:00 I think he came in a bit argumentative and whatever.
40:03 And that was that.
40:05 And but I certainly moved on from that moment.
40:07 It's a funny it's certainly a funny podcast.
40:09 When you get back at it, you scratch your head.
40:11 What was he thinking?
40:11 But you know, I'm sure he's evolved since then.
40:15 It creates views, you know, whatever.
40:17 Yeah, no bad media.
40:18 OK, and then last thing is you have this book coming out.
40:20 You said Simon and Suster.
40:21 What are like two takeaways or why should people buy that book and learn from?
40:26 You already mentioned the mutual fund thing, which is.
40:29 Yeah, well, yeah, I'm not saying I'm not saying mutual funds are bad in general.
40:33 I'm just saying they are.
40:34 But I'll say they're bad.
40:35 I'll say they're bad in general.
40:37 We may have some clients that are mutual funds.
40:40 I got to be.
40:40 It's fine.
40:41 My opinion is they're by and large worthless.
40:44 And there's a much better way for the average investor to to deploy their capital.
40:49 And I go through that in the book in a very funny, irreverent
40:53 and way with a deep history of Wall Street.
40:56 But I use a lot of stories and and and really laugh out loud situations
41:01 to explain everything about how the market works, why it is the way it is,
41:07 how people are actively trying to fuck you every day of the week
41:10 and a very simple solution of how you could beat Wall Street their own game
41:14 and outperform ninety five plus percent of all the top hedge fund managers
41:19 in the world with a very simple strategy.
41:20 And I go through that and I think the book is amazing.
41:24 It's actually available for presale right now on Amazon and other places.
41:29 Again, it's a wolf of investing and I think everyone is going to be a must be.
41:32 I hope it's a must be getting the book has massive value to every person.
41:35 Do you think you'll do an audio book version of it?
41:37 There is an audio book.
41:38 It's just that it'll be out simultaneously with the release of the book.
41:41 All right.
41:42 Did you read it or was it?
41:43 I did.
41:43 Yeah, I did it.
41:44 Yeah.
41:45 How'd you like doing that?
41:46 I guess I've done three already, so it's like not like my first rodeo, you know, so it's fun.
41:50 OK, easy for me.
41:51 And where are you right now?
41:52 Your background's amazing.
41:53 I first thought of my house.
41:55 But where do you got?
41:56 Where do you are?
41:56 You Miami Beach.
41:57 I live on the water in Miami.
41:58 Yeah, you must love it there.
42:00 I do love it.
42:01 It's a little hot still.
42:02 Yeah, I was I was away most of the summer.
42:03 I just got home and but it's about to start cooling down now.
42:06 So we get into the glory days of Miami like mid-October through probably, you know, mid-April
42:11 or even at the end of April.
42:12 Last year was pretty cool yet till till the early May.
42:14 Yeah, it's amazing.
42:16 Yeah.
42:16 Well, thank you, Jordan, for coming on.
42:18 We appreciate it.
42:19 Thanks for enlightening us on crypto.
42:21 He's a believer, long term Bitcoin.
42:23 He owns a theory.
42:24 Talk about the movie.
42:26 We talked about a lot of things and I hopefully brought different angles and the penny stock
42:30 stuff.
42:31 It's very hard to find a penny stock that turns into real real money is basically what
42:35 you're saying today.
42:36 Yeah.
42:37 Yeah.
42:37 Even if it does, they'll probably convince you to sell before it does.
42:40 Yeah, that's right.
42:41 That's right.
42:42 Well, thank you again for coming out.
42:43 I really appreciate it.
42:44 You got it.