Best Advice BEFORE You Buy Crypto (How To Invest $1,000) | Michael Howell

Awesome perspective on macro in general What are your thoughts on bitcoin [Music] Let me answer that in in two ways I mean One is what is the what is the case for Crypto I think the case for crypto is That uh is a compelling one because Basically crypto in theory has Restricted Supply uh it is not Um subject to the same forces as paper Money which is government issued debt Effectively and we know the governments Uh or the fiscal arithmetic facing Governments is is horrendous so Basically in terms of Supply uh Considerations crypto has to be a better Vehicle there is a demand case for Crypto in certain cases now um I would Be the first to say that that may be in Certain areas slim and in other areas Compelling uh if you look at things like Um uh the Ripple currency uh which is a Bridge currency I think that has Compelling attractions uh as a crypto Unit uh I think there are other other Crypto which I simply don't understand And therefore I'd be the wrong person to Comment I think in terms of Bitcoin it's Established it's first through the door It's got a name uh and it's you know It's approved effectively by the SEC uh As a as a as a currency and therefore uh We've got a number of issuers in the US Trying to do ETFs on uh uh on bitcoin so

You know hey why not it probably is a Decent alternative So when you see the black rocks the Citadels the fidelities in their own Ways getting into Bitcoin does that open You up to getting exposure in your in Your business for your clients I think The one has to have some exposure to Crypto I think it's you know as I say It's through the door it's an Established medium I think you've got uh You know as I say a varying use case but Providing supplies more constrained Which in theory uh at least it should be Uh there's a compelling argument that These are these are decent stores of Value but don't just rely on those Things because we've got a we've got to Acknowledge the history books and the History books show that if you go back To the 1930s uh there was uh I was it Called the I forget if it was called the Gold act but uh it wasn't in 1933 34 uh Well Roosevelt basically uh made holding Of gold illegal uh for us for U.S Residents uh and that was something that You know probably could not be done now But uh you know hey let's never say Never here and that's something I think We've got to consider so diversification Is clearly the the key thing uh one of The things that governments don't like Doing is losing potential revenue Streams

You have Decades of experience as an Investor in general so if you're just Talking to crypto investors could you Give some advice to these crypto Investors coming into the market in These last few years I think that I think there are two Things to say one is that the most Important variable to understand is uh Or our money flows and you've got to Understand how the system is working Basically you know what what uh you know What I specialize in is looking at asset Price inflation and asset price Inflation is all about understanding Money flows from a macro standpoint now I'm not saying and don't misinterpret I'm not saying that looking at Individual Securities and adopting a Value investing approach you know I'll Uh Ben Graham doesn't work clearly it Works that's a pretty good discipline But you're also got to look at macro and Macro is all about understanding money Flows and how those money flows are Allocated and effectively this is a Portfolio decision so if that flow of Money is going to increase in the future And I would argue that money flows Because they're created by central banks And by governments at the end of the day Have to increase okay then you we as Investors have got decisions to make as To how to allocate that money and

Basically what you've got I would argue Are sort of three basic pots you've got Traditional bonds which in an Environment of high monetary inflation Are not going to be decent performers Particularly if governments can't afford To let interest rates go up too much the Second thing is you've got Equity Markets now Equity markets can do well In a higher inflation environment they Will not do well in a very high Inflation environment but they'll do Well in a high inflation environment and Just you know just remember again the History books in examples of Hyperinflationary economies think of What's happening in Zimbabwe now right Think of what's happening in Germany in The 1920s the stock markets were Extremely strong performers because they Were inflation Hedges okay Bonds did badly now as I say there are Better alternatives to the stock market When you've got very high inflation and That comes back traditional monetary Hedges such as real estate such as Commodity markets such as precious Metals and I would add probably uh Crypto as well in that same sphere Michael I want to give you a fun Question more thought to provoking Question you don't have to mention Cryptocurrency at all but say you were 25 again starting over and yet an extra

1 000 in your pocket how would you go About forming a portfolio or investing That thousand dollars Well I think the first thing to the First thing to ask is what is the time Horizon uh but let's assume I'm going to Say let's assume you take a two-year Time Horizon for argument's sake I would Have Um probably the I mean I'm going to Exclude real estate because that's uh You know that's clearly a social Decision but I say that of that I would Tend to be putting about 80 percent in Um 80 in stocks and 20 in inflation Hedges and I think the preference you Can you can say is do you prefer gold or Precious metals which is probably you Know let's say a generational decision So basically people uh you know like Myself or uh maybe older people would Tend to think that that is the best Inflation head because traditionally has Been or you'd say okay for a younger uh Cohort you want crypto so I'd be Thinking of that 80 20 balance And when you say 80 in stocks Uh what type of stocks or could you give Me some breakdown on what you would be Yeah I think that I think that if you I Mean this is you know back of the Envelope but I would say that probably You know for us investor you'd be you'd Be wanting to put probably you'd want to

Diversify 20 to 30 percent of that I Would I would tend to think that the Moment as we stand uh a large part of That diversification ought to be in Asia Into countries like uh Korea Japan Um as alternatives Those look attractive to my view and if There is a coming cold war with China Then these economies have to be Bolstered anyway as a bull walk against Uh you know Chinese expansions so I Think that you know economically they May Prosper so I would say that that Would be my my bent in terms of Geography I think in terms of sectors I Think one has to acknowledge that Technology has a place in every Portfolio uh and I'd also say that Commodity markets probably also because In an environmental let's say uh Heightened geopolitical risk uh resource Availability uh and securing resources Has clearly got to be key and we've Under invested in this area of so much Over the last 20 years that there's got To be a lot of money moving towards Commodity areas so I'd say those have Got to be fairly big weightings within Uh within a portfolio Final question and this is more about You um not so much about the current State of the economy but for you could You finish this sentence I became Successful when I understood

Blank Oh I think the the big quite the key Question is understanding Global Liquidity and that was something that Was taught to me at uh you know one of Us Asylum brothers and I think the thing To look at is why was Salomon Brothers Such a dominant and such a successful Um Investment Bank through the through The 80s until the midnighters and Basically what happened if you look at The history books uh it was derailed Because of uh Aaron Traders trying to Corner the uh the treasury market and Salomon was slapped down understandably By the U.S Administration uh but up to That point it was a money-making machine Uh and it was all about understanding The flow of money uh around the world Yes be sure to click subscribe we drop a Video every single day giving you Informed about crypto

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