Thread by @otisa502

1/16 RYAN (@RyanSAdams): “Mark, one thing, the other difference, though, is that only accredited investors get access to the private markets —

MARK (@MarkYusko): "Oh, amen!"

RYAN (@RyanSAdams): — “which is such a pain point, I think, for many of our listeners that does not

2/16 “exist in the same way in crypto."

MARK (@MarkYusko): "It's a scam. Look, it's not intended to protect you from the ravages of the scammers. It's created to protect the rich. The rich created the accredited investor laws not to protect the small investor. That's a crock.

3/16 “I know plenty of people who aren't rich who are really smart, I know plenty of people who are rich who are not very good investors and vice versa. So 'accredited investor' is to protect the wealthy so they get access to the great deals. It's like why companies stay private

4/16 “longer. They stay private longer because the only people who can invest are accredited and qualified purchasers, and they invest in Tiger Globals and the Co2s (phonetic) and the T. Rowe Privates and the Wellingtons, and they kept these companies private. Now through

5/16 “SPACs, we can take these companies public faster, we can get them into the hands of individuals faster, you can own these companies of the future. It's a democratization of access, a topic for another day. But the 4th risk you can take is leverage, and leverage is just

6/16 “a tool. 100-to-1 leverage in crypto, bad idea. People still do it; dumb idea. 100-to-1 leverage in fixed income, dumb idea. Not quite as dumb as 100 to 1 in crypto, but still a dumb idea. 30 times, 40 times leverage, still a dumb idea. We got banks in Europe 40 times

7/16 “leverage; that's a bad idea. Look, you want to use leverage, everyone levers their house 4 to 1, other people lever other assets; you want to use margin debt, fine. But make sure you understand how it works. If you use 100-to-1 leverage, you need a 1% move and you've lost

8/16 “100% of your equity, and most people don't think of it that way. They're like, well, the price is going up, so I'm making more money. Yeah, but... I'm a big believer that credit risk, not very attractive; equity risk today, not very attractive, because of all the things

9/16 “we've been talking about with the money printing. Illiquidity risk is the best I've ever seen, because most people don't want to be illiquid. Here's something for everyone on the call: I have this thing that I talk about, and my daughter when she first got her job, she's

10/16 “a pediatric oncology nurse and she works nights, and she called me up one day and said, 'Dad, what should I do with my 401 (K)?' And I just got angry. My daughter has no business being in charge of her 401 (K). Not because she's not smart, not because she's not a wonderful

11/16 “person, she's doing God's work as a nurse. But she works nights, she's tired, she doesn't have any interest in the markets, she doesn't want to, she's not educated in management of her assets. And why do 401 (Ks) exist? They don't exist to help the average investor.

12/16 “They exist because the mutual fund companies lobbied to create them; because back in 1986, you used to have to have a defined benefit pension fund, and the company took care of you after you worked for the company. And they said, oh, no, but it will be portable. No, no, by

13/16 “going from defined benefit to defined contribution, you cut the cost to companies by 30%; that went straight to the bottom line. How did they get that done? Through lobbying, which is just a fancy word for corruption. And so, the mutual fund industries

14/16 “get really, really rich, and the average person — look, so what does my daughter do? And she's great, she's smart, but she does one over end. She got 5 choices, she puts 20% in each, and that's how the average person invests. Well, why should she own any bonds at all?

15/16 “It should be against the law for a 25-year-old person, a 35-year-old person to own bonds in their 401 (K); you can't touch the money for 50 years. You should have 100% in venture capital, growth equity, real estate, commodities. It should be against the law to

16/16 “own bonds, but then it wouldn't be profitable for the mutual fund companies. So you got to consider the source and you got to consider why things exist."

Timestamp:1:02:46

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