September 27, 2025 • 16 mins
The world's safest investment just collapsed and almost nobody saw it coming. Wall Street's most trusted investment lost trillions in value, and if you're still holding on to it, your portfolio could be next. But what caused this crash? And more importantly, what should you do now? In the next few minutes, you'll discover why the smartest investors in the world are quietly moving billions into a surprising asset, and how one simple decision right now could protect your future wealth.
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Speaker 1 (00:00):
The world's safest investment just collapsed and almost nobody saw
it coming. Wall Street's most trusted investment lost trillions in value,
and if you're still holding on to it, your portfolio
could be next. But what caused this crash, and more importantly,
what should you do now? In the next few minutes,
you'll discover why the smartest investors in the world are
(00:20):
quietly moving billions into a surprising asset, and how one
simple decision right now could protect your future wealth. My
name is Mark Mossuf spent decades analyzing the financial markets,
economic cycles, and investment strategies as a partner in a
bitcoin venture fund, an advisor to publicly traded companies navigating
this exact crisis. I've help thousands of investors see these
(00:40):
trends early and positions themselves ahead of the herd. Now today,
I'm going to share those same critical insights with you.
So let's go all right, So we are talking about
the safest investment in the world. We're talking about us treasure.
As a matter of fact, they are called the risk
free investment. They're risk free because the government's always going
(01:02):
to pay them. Right, Well, maybe maybe not. Let's talk
about this a little bit. So the US treasuries are
considered the safe play because of course the government can
just print more dollars, right, So what they're used for
is fixed income. So it's a way to head your position.
You don't need to be all in stocks. You head
your position, and of course it's backed by the full
faith of the US government. Knowing that the US government
(01:25):
never defaults on its debt. It's always going to pay.
We'll talk more about that in a minute. And so
what modern portfolio theory is is basically, you dedicate allocate
forty percent of your investments, your portfolio into this. That's
forty percent portfolio construction. You can see. It's known as
a sixty forty portfolio. Now, if you follow my channel regularly,
you know I often talk bad about this, but if
(01:48):
you have money with a four to one K or
mutual fund or some type of fund advisor, they probably
have you in some variation of this. Sixty percent stocks,
forty percent bonds. Now sixty two percent stocks are for volatility,
volatility as things go up and down, but of course
we want them to go up, and the bonds are
supposed to limit the volatility or dampen the downside of that,
(02:10):
they're meant specifically, like I said, to reduce volatility. As
a matter of fact, if we go on to I
believe this is from Investopedia, we can look at this.
Volatility is a part of investing. You don't invest into
things that don't move. You don't invest into dollars. So
volatility is things going up and down. So we need
that if we're going to make money. Shorted if it's
going down, go long if it's going up. But by
(02:31):
incorporating bonds into the portfolio, sixty forty, investors can potentially
reduce volatility relative to an all equity portfolio without sacrificing return,
so they can compliment. Bonds can complement stocks and diversified portfolio,
potentially helping reduce overall portfolio risk. How by limiting the volatility. Okay,
(02:56):
so we don't want to go all stocks because it's
too volatile, so we'll limit that with bonds. Okay, I
want you to understand. That's why I'm emphasizing that part,
and what I'm going to show you right now is
why bonds have failed. We're going to look at real
risk because as real investors, as professional investors, we don't
just think about yolo and going long. We always have
to think about a risk adjusted return. A hedge fund
(03:20):
is called a hedge fund because they're hedging their positions.
They're taking that risk into account. So, based off of
all that information, what should we do now? Don't worry?
I got you, okay, So let's talk about the bond story,
just real quickly. So again, smart investors, they measure risk.
So when I'm looking at the potential return, I also
want to think about the potential Vault's a lid that
(03:40):
I have. And so then the question we have to
have is our bonds really risk free? Are they really
the risk free return? And if not, how much risk
do they have? And if they have risk, then how
should I think about allocating to my portfolio with those?
And the question I'm going to answer for you because
most people think with bitcoin, mark, stop talking about that thing,
(04:00):
that fake Internet money, whatever it is. It's too volatile, right,
So let's take a look at is bond our bonds riskier?
Our bonds riskier? Are more volatile than bitcoin? You might
be surprised when we break out the math. Don't miss this, okay,
So again, the US Treasury USTs we can look at
(04:21):
their returns. Now, we can, of course look at the
short term ones, the five year, the ten year, the
thirty year, twenty or whatever we want, but we'll use
the bond ETF it's the TLT. Now. The TLT represents
the bonds. It's a long bond, a twenty year plus bond,
all right. So it's a really good way for traders
to go in and out of bonds hedge their positions.
(04:43):
And if we look at this over a five year
period since twenty twenty, we can see that it's down
forty seven percent. Now, I don't know about you, but
if I lost forty percent of my money over five years,
I wouldn't really consider that risk free. I wouldn't really
consider that safe. So you have to think a little
bit differently about this. You can see it's almost like
(05:04):
a complete straight line going down. Now, you might say, Mark,
you're probably cherry picking. Of course, we know that long
term bonds are down, but what about if we looked
at more short term bonds? Right, and that why Janet
Yellen was front loading the end of that spectrum. What
about that, Well, we can take a look at that
in another ETF AG and we can compare TLT, which
(05:25):
is all the way down here to AG and we
can see that it hasn't dropped near as bad. It's
not near as risky and bad. In this case, you
only lost sixteen percent of your money. Still risky in
my opinion, right over five years. And we're not cherry
picking data. I mean, I suppose if we look at
this little window right here, we made money, but we're
not checking cherry picking data. Like I said, this is
(05:46):
over five years. Okay. Now you might also be saying,
but Mark, that doesn't take into account to the consideration
of the dividends that they pay, right because I'm banking dividends,
so that certainly got to offset the amount of losses. Right. Well,
let's take a look at that. We go back to
the TLT, the long bond, and we can see even
with the dividends, it's down. Now it's only down thirty
(06:07):
eight percent. I mean, it's better, it's not fifty percent,
but it's still almost forty percent that we're down because
of course the dividends aren't very much. And we can
see the same with AGG as well. On this one,
we're only down about four and a half percent. Not
so bad. But we're still losing money. And apparently what's
considered the risk free return now it gets a little
(06:28):
bit worse because we have to take into consideration inflation.
Now we're going to use CPI consumer price inflation, which
of course is a false metric. That's around three percent.
The real inflation rate is the rate of monetary debasement,
how fast they're printing money. But if we just use
the government's number cp LIES, we can see that we
are basically going in a down word spiral, straight down.
(06:53):
Now that is in real returns. We can also see
the same thing for AG as well. Again adjusted for inflation,
it just makes look that much worse, and we are
just going in a downward trajectory. So if the real
risk free isn't risk free, what should we be thinking. Well,
let's dig in a little bit more, because remember bonds
(07:14):
were supposed to limit the volatility that we get from stocks,
as if that's a bad thing. So let's take a
look at the volatility of this. Now, there's a couple
of things I want to point out to you. So
number one, let's look at the TLT again sort of
representing the long if you will, and this shows the
volatility that we have. So what we can see is
that we had a high of about thirty three. This
(07:34):
isn't about mid twenty twenty two. That's when the if
you remember back in around October twenty twenty two, the
markets were crashing, the bond auctions were starting to fail.
That's when the volatility got really high. Since then, the
stock markets have gone up and now we're down to
about fifteen, still pretty volatile. If we take a look
at AG again representing the shorter term, shorter end of
(07:55):
the curve, we can see it's a little bit better. Here.
We have a high of only fourteen right here, and
we're at averaging about six, so quite a bit better.
But we still have to see that there's a lot
of volatility. Now again, is volatility bad, Well, not necessarily, right.
We need volatility if we want liquidity, if we want
asset prices to go up, we're gonna need the volatility.
(08:16):
But again, this is the main argument that's put against
bitcoin because bitcoin is too volatile. All right, So now
that I've shown you the volatility numbers, wait till I
show you what's coming up next. Let's take a look
at this. Okay, so let's compare risk now in the
risk free trade in the US government treasuries, which is
basically the bedrock of the entire global financial system. Let's
(08:39):
compare the risk the Bitcoin, the most risky asset there is. Okay,
so we use something called a sharp ratio. Basically, what
the sharp ratio is is the measure of an investment's
risk adjusted performance. Because remember, only amateurs think about how
much money they're gonna make. Professionals always think about a
risk adjusted return. What does that mean? If something's very risky,
(09:00):
it could go up one hundred x. It could also
lose all its money. So I wouldn't because it's so risky.
I would only put a little bit of money into it.
And I only need a little bit because it has
so much potential to go up. If something is safer,
I can put more money into it. So for example,
micro Strategy is the biggest bitcoin treasury play there is.
They have about six hundred thousand bitcoin. I can put
(09:22):
way more money into that than I would a smaller
one like Metaplanet. For example, Metaplanet has more risk, but
it also has more return potential. That's why we think
about it. So for the sharp ratio, we want to
measure the risk adjusted performance, calculated by comparing its return
to that of a risk free asset, which in this
(09:42):
case is the US treasuries. Okay, so in this less
than point five is bad and more than greater than
one is good. All right, that's how would create this.
So again, Bitcoin is very volatile, right, So let's take
a look and see what the sharp ratio tells us. Now,
if we take a look at this, we can see
as of June thirtieth, twenty twenty five, TLT, the US Treasuries,
(10:05):
the long bonds had a max draw down of forty
eight percent. That's we're at right now. Over the last
five years, I showed you that AG the short is
about down about eighteen percent. Bitcoin max drawed out of
seventy six percent. That's massive. Well, obviously, Mark Bitcoin's more risky,
right because it dropped seventy six, but the US Treasuries
(10:26):
only went down forty eight. I'd rather lose forty eight
than than seventy six. Okay, But that's the only piece.
That's only a piece of it, because we also have
to look at the potential for the return. Now in this,
remember what I told you the sharp ratios in this
the TLT got a sharp ratio of point three when
bitcoin and the short headed point four, while bitcoin had
a one point Oh now if you remember, let's go
(10:49):
back and look what was good and bad. Less than
point five is bad, more than one is good. Why
is that? Because we don't just look at draw downs.
We have to look at the bounce back. We have
to look at the potential returns that we have on
top of that to fully understand risk. So let's look
(11:09):
at a chart. Okay, so we looked at the max
draw downs, but in order to understand the risk and
the sharp brak show, we also have to look at
the total returns. Right. Can't look at the bad without
looking at the goods. So what we see the total returns.
The positive returns on TLT was three years, fourteenth minus
fourteen percent, not positive minus. That's that's the good return.
(11:31):
Five years minus thirty eight percent not positive the negative return, right,
and we have agg Let's just jump to five years
minus three percent. But with bitcoin it was positive three positive,
twenty eight, positive, fourteen positive, seventy nine positive four to
seventy for a total one thousand and seventy eight over
(11:51):
five years. So we can look at the max draw down,
it was about forty six for the TLT, seventy eight
for bitcoin. But we have to look at the return,
which for Bitcoin was over one thousand and for TLT.
For the Treasury, the risk free trade was down thirty
eight percent. Now you start to understand how the sharp
ratio works, all right. So now that you understand that
there's risk and reward, there's return, and there's lost, and
(12:15):
that's what makes up the sharp ratio a risk adjusted return.
Let's put into some actual math. Let's do some calculations here,
because remember, portfolio theory is I'm supposed to put some
into each, right. So if we took ten thousand dollars
and we put it into each one of these the TLT,
the long bond, the AGG, the short bond, and Bitcoin,
and we held it there for the last five years,
(12:36):
the ten thousand dollars in the risk free trade the
US Government Treasury would have lost and would have only
become six thousand, one and eighty one. In the short
bond we would have put ten thousand in, we'd now
have nine six hundred and twenty three. It didn't lose
as much, still lost. If we put the ten thousand
dollars into bitcoin, we'd be sitting on one hundred and
(12:56):
seven thousand, nine hundred dollars. What that means is you
ten ext your money, which is why it's greater than
the risk, because you can't look at the good without
the bad, or the bad without the good, and that's
exactly what we see here. That's pretty shocking, right, Okay.
So now that we know all this, what are we
(13:17):
going to do about it? How do we position ourselves
to win? Well, there's a couple of things. Number One,
we want to look to the future. Markets are what
we call forward looking. They're discounting mechanisms, right, We're trying
to buy something cheaper today than we think it will
be in the future, which is why Tesla trades at
like one hundred and seventy two times pe. Okay, So
we're forward looking. We understand that uncertainty about the future
(13:41):
is what causes the volatility. However, there's some things that
we feel pretty good about the future. Number one, US
fiscal deficits. That's the government spending more money than they're
bringing in. That's continued to widen, that's going to continue
to grow. Now, why do we think it's going to
continue to grow. Well, besides the fact that, as lenn
Alden says, nothing is stopped this train. The CBO, the
(14:02):
Congressional Budget Office, they're the ones that set the budget
for the government. They forecast that for the next thirty years.
They tell us that the fiscal death is going to
continue to increase. Number two, we know that if the
fiscal deficit increases, if they continue to print more money
than they bring in, that the governments must borrow more money.
That's true, so they're going to spend more than they
(14:24):
bring in. That means they have to borrow money to
make up the gap that's the debt. And then we
know if they do that, the bond vigilantes, the people
who are buying the bonds, they're going to demand higher yields.
They want more return for the risk that they're taking.
And if they demand higher yields, then the value of
the bonds go down. This is almost certain, right, There's
(14:45):
only two things in life that are certain, death and taxes.
I think we can add a third that governments are
going to print money and they're going to increase the debt,
and the bond yields is going to have to come down.
So now that we know that, or we feel pretty
certain about that, what do we do. We know that
USTs the US Treasuries the full faith of the government.
They will print the money and they will give it
(15:06):
to you. But the problem is they're gonna be paid
back with D valued dollars. So if you take a
thirty year bond, they're gonna give you, you know, three percent,
four percent, five percent. But over thirty years, what is
that dollar gonna be worse than thirty years from now,
They're gonna pay you back with D value dollars. Now,
the second thing we know is that because of that,
gold and bitcoin are going to outperform the risk rere
(15:30):
yield the US treasuries. Now we also know that both
of these are straight up better investments, meaning will both
go up faster than yields. But we also know it's
not just a straight up better return, it's an actual
better risk adjusted return. We just saw the math. So
what does that mean. Well, if gold and bitcoin are
(15:52):
better returns and better risk adjusted returns then the bond
market than what happens, then three hundred trillion dollars that's
sitting in the bond markets will start coming over into
bitcoin and into gold. This is exactly what the bitcoin
treasury companies are doing. The bitcoin treasury companies see that
there's all this money and fixed income all around the world,
(16:15):
pension funds, insurance funds, all these different funds, and each
one of these funds, each one of these pools of
liquidity has different mandates. So what the bitcoin treasury companies
are doing are creating individual, unique products that can go
into each one of these pools with a specific mandates
that can start to suck the liquidity out. And it
will do that because again it is both a straight
up better return and it is a better risk adjusted return. Now,
(16:38):
if you want to know more about how these treasury
companies work, you might want to watch this video right here,
and I'll see you over there.
The world's safest investment just collapsed and almost nobody saw
it coming. Wall Street's most trusted investment lost trillions in value,
and if you're still holding on to it, your portfolio
could be next. But what caused this crash, and more importantly,
what should you do now? In the next few minutes,
you'll discover why the smartest investors in the world are
(00:20):
quietly moving billions into a surprising asset, and how one
simple decision right now could protect your future wealth. My
name is Mark Mossuf spent decades analyzing the financial markets,
economic cycles, and investment strategies as a partner in a
bitcoin venture fund, an advisor to publicly traded companies navigating
this exact crisis. I've help thousands of investors see these
(00:40):
trends early and positions themselves ahead of the herd. Now today,
I'm going to share those same critical insights with you.
So let's go all right, So we are talking about
the safest investment in the world. We're talking about us treasure.
As a matter of fact, they are called the risk
free investment. They're risk free because the government's always going
(01:02):
to pay them. Right, Well, maybe maybe not. Let's talk
about this a little bit. So the US treasuries are
considered the safe play because of course the government can
just print more dollars, right, So what they're used for
is fixed income. So it's a way to head your position.
You don't need to be all in stocks. You head
your position, and of course it's backed by the full
faith of the US government. Knowing that the US government
(01:25):
never defaults on its debt. It's always going to pay.
We'll talk more about that in a minute. And so
what modern portfolio theory is is basically, you dedicate allocate
forty percent of your investments, your portfolio into this. That's
forty percent portfolio construction. You can see. It's known as
a sixty forty portfolio. Now, if you follow my channel regularly,
you know I often talk bad about this, but if
(01:48):
you have money with a four to one K or
mutual fund or some type of fund advisor, they probably
have you in some variation of this. Sixty percent stocks,
forty percent bonds. Now sixty two percent stocks are for volatility,
volatility as things go up and down, but of course
we want them to go up, and the bonds are
supposed to limit the volatility or dampen the downside of that,
(02:10):
they're meant specifically, like I said, to reduce volatility. As
a matter of fact, if we go on to I
believe this is from Investopedia, we can look at this.
Volatility is a part of investing. You don't invest into
things that don't move. You don't invest into dollars. So
volatility is things going up and down. So we need
that if we're going to make money. Shorted if it's
going down, go long if it's going up. But by
(02:31):
incorporating bonds into the portfolio, sixty forty, investors can potentially
reduce volatility relative to an all equity portfolio without sacrificing return,
so they can compliment. Bonds can complement stocks and diversified portfolio,
potentially helping reduce overall portfolio risk. How by limiting the volatility. Okay,
(02:56):
so we don't want to go all stocks because it's
too volatile, so we'll limit that with bonds. Okay, I
want you to understand. That's why I'm emphasizing that part,
and what I'm going to show you right now is
why bonds have failed. We're going to look at real
risk because as real investors, as professional investors, we don't
just think about yolo and going long. We always have
to think about a risk adjusted return. A hedge fund
(03:20):
is called a hedge fund because they're hedging their positions.
They're taking that risk into account. So, based off of
all that information, what should we do now? Don't worry?
I got you, okay, So let's talk about the bond story,
just real quickly. So again, smart investors, they measure risk.
So when I'm looking at the potential return, I also
want to think about the potential Vault's a lid that
(03:40):
I have. And so then the question we have to
have is our bonds really risk free? Are they really
the risk free return? And if not, how much risk
do they have? And if they have risk, then how
should I think about allocating to my portfolio with those?
And the question I'm going to answer for you because
most people think with bitcoin, mark, stop talking about that thing,
(04:00):
that fake Internet money, whatever it is. It's too volatile, right,
So let's take a look at is bond our bonds riskier?
Our bonds riskier? Are more volatile than bitcoin? You might
be surprised when we break out the math. Don't miss this, okay,
So again, the US Treasury USTs we can look at
(04:21):
their returns. Now, we can, of course look at the
short term ones, the five year, the ten year, the
thirty year, twenty or whatever we want, but we'll use
the bond ETF it's the TLT. Now. The TLT represents
the bonds. It's a long bond, a twenty year plus bond,
all right. So it's a really good way for traders
to go in and out of bonds hedge their positions.
(04:43):
And if we look at this over a five year
period since twenty twenty, we can see that it's down
forty seven percent. Now, I don't know about you, but
if I lost forty percent of my money over five years,
I wouldn't really consider that risk free. I wouldn't really
consider that safe. So you have to think a little
bit differently about this. You can see it's almost like
(05:04):
a complete straight line going down. Now, you might say, Mark,
you're probably cherry picking. Of course, we know that long
term bonds are down, but what about if we looked
at more short term bonds? Right, and that why Janet
Yellen was front loading the end of that spectrum. What
about that, Well, we can take a look at that
in another ETF AG and we can compare TLT, which
(05:25):
is all the way down here to AG and we
can see that it hasn't dropped near as bad. It's
not near as risky and bad. In this case, you
only lost sixteen percent of your money. Still risky in
my opinion, right over five years. And we're not cherry
picking data. I mean, I suppose if we look at
this little window right here, we made money, but we're
not checking cherry picking data. Like I said, this is
(05:46):
over five years. Okay. Now you might also be saying,
but Mark, that doesn't take into account to the consideration
of the dividends that they pay, right because I'm banking dividends,
so that certainly got to offset the amount of losses. Right. Well,
let's take a look at that. We go back to
the TLT, the long bond, and we can see even
with the dividends, it's down. Now it's only down thirty
(06:07):
eight percent. I mean, it's better, it's not fifty percent,
but it's still almost forty percent that we're down because
of course the dividends aren't very much. And we can
see the same with AGG as well. On this one,
we're only down about four and a half percent. Not
so bad. But we're still losing money. And apparently what's
considered the risk free return now it gets a little
(06:28):
bit worse because we have to take into consideration inflation.
Now we're going to use CPI consumer price inflation, which
of course is a false metric. That's around three percent.
The real inflation rate is the rate of monetary debasement,
how fast they're printing money. But if we just use
the government's number cp LIES, we can see that we
are basically going in a down word spiral, straight down.
(06:53):
Now that is in real returns. We can also see
the same thing for AG as well. Again adjusted for inflation,
it just makes look that much worse, and we are
just going in a downward trajectory. So if the real
risk free isn't risk free, what should we be thinking. Well,
let's dig in a little bit more, because remember bonds
(07:14):
were supposed to limit the volatility that we get from stocks,
as if that's a bad thing. So let's take a
look at the volatility of this. Now, there's a couple
of things I want to point out to you. So
number one, let's look at the TLT again sort of
representing the long if you will, and this shows the
volatility that we have. So what we can see is
that we had a high of about thirty three. This
(07:34):
isn't about mid twenty twenty two. That's when the if
you remember back in around October twenty twenty two, the
markets were crashing, the bond auctions were starting to fail.
That's when the volatility got really high. Since then, the
stock markets have gone up and now we're down to
about fifteen, still pretty volatile. If we take a look
at AG again representing the shorter term, shorter end of
(07:55):
the curve, we can see it's a little bit better. Here.
We have a high of only fourteen right here, and
we're at averaging about six, so quite a bit better.
But we still have to see that there's a lot
of volatility. Now again, is volatility bad, Well, not necessarily, right.
We need volatility if we want liquidity, if we want
asset prices to go up, we're gonna need the volatility.
(08:16):
But again, this is the main argument that's put against
bitcoin because bitcoin is too volatile. All right, So now
that I've shown you the volatility numbers, wait till I
show you what's coming up next. Let's take a look
at this. Okay, so let's compare risk now in the
risk free trade in the US government treasuries, which is
basically the bedrock of the entire global financial system. Let's
(08:39):
compare the risk the Bitcoin, the most risky asset there is. Okay,
so we use something called a sharp ratio. Basically, what
the sharp ratio is is the measure of an investment's
risk adjusted performance. Because remember, only amateurs think about how
much money they're gonna make. Professionals always think about a
risk adjusted return. What does that mean? If something's very risky,
(09:00):
it could go up one hundred x. It could also
lose all its money. So I wouldn't because it's so risky.
I would only put a little bit of money into it.
And I only need a little bit because it has
so much potential to go up. If something is safer,
I can put more money into it. So for example,
micro Strategy is the biggest bitcoin treasury play there is.
They have about six hundred thousand bitcoin. I can put
(09:22):
way more money into that than I would a smaller
one like Metaplanet. For example, Metaplanet has more risk, but
it also has more return potential. That's why we think
about it. So for the sharp ratio, we want to
measure the risk adjusted performance, calculated by comparing its return
to that of a risk free asset, which in this
(09:42):
case is the US treasuries. Okay, so in this less
than point five is bad and more than greater than
one is good. All right, that's how would create this.
So again, Bitcoin is very volatile, right, So let's take
a look and see what the sharp ratio tells us. Now,
if we take a look at this, we can see
as of June thirtieth, twenty twenty five, TLT, the US Treasuries,
(10:05):
the long bonds had a max draw down of forty
eight percent. That's we're at right now. Over the last
five years, I showed you that AG the short is
about down about eighteen percent. Bitcoin max drawed out of
seventy six percent. That's massive. Well, obviously, Mark Bitcoin's more risky,
right because it dropped seventy six, but the US Treasuries
(10:26):
only went down forty eight. I'd rather lose forty eight
than than seventy six. Okay, But that's the only piece.
That's only a piece of it, because we also have
to look at the potential for the return. Now in this,
remember what I told you the sharp ratios in this
the TLT got a sharp ratio of point three when
bitcoin and the short headed point four, while bitcoin had
a one point Oh now if you remember, let's go
(10:49):
back and look what was good and bad. Less than
point five is bad, more than one is good. Why
is that? Because we don't just look at draw downs.
We have to look at the bounce back. We have
to look at the potential returns that we have on
top of that to fully understand risk. So let's look
(11:09):
at a chart. Okay, so we looked at the max
draw downs, but in order to understand the risk and
the sharp brak show, we also have to look at
the total returns. Right. Can't look at the bad without
looking at the goods. So what we see the total returns.
The positive returns on TLT was three years, fourteenth minus
fourteen percent, not positive minus. That's that's the good return.
(11:31):
Five years minus thirty eight percent not positive the negative return, right,
and we have agg Let's just jump to five years
minus three percent. But with bitcoin it was positive three positive,
twenty eight, positive, fourteen positive, seventy nine positive four to
seventy for a total one thousand and seventy eight over
(11:51):
five years. So we can look at the max draw down,
it was about forty six for the TLT, seventy eight
for bitcoin. But we have to look at the return,
which for Bitcoin was over one thousand and for TLT.
For the Treasury, the risk free trade was down thirty
eight percent. Now you start to understand how the sharp
ratio works, all right. So now that you understand that
there's risk and reward, there's return, and there's lost, and
(12:15):
that's what makes up the sharp ratio a risk adjusted return.
Let's put into some actual math. Let's do some calculations here,
because remember, portfolio theory is I'm supposed to put some
into each, right. So if we took ten thousand dollars
and we put it into each one of these the TLT,
the long bond, the AGG, the short bond, and Bitcoin,
and we held it there for the last five years,
(12:36):
the ten thousand dollars in the risk free trade the
US Government Treasury would have lost and would have only
become six thousand, one and eighty one. In the short
bond we would have put ten thousand in, we'd now
have nine six hundred and twenty three. It didn't lose
as much, still lost. If we put the ten thousand
dollars into bitcoin, we'd be sitting on one hundred and
(12:56):
seven thousand, nine hundred dollars. What that means is you
ten ext your money, which is why it's greater than
the risk, because you can't look at the good without
the bad, or the bad without the good, and that's
exactly what we see here. That's pretty shocking, right, Okay.
So now that we know all this, what are we
(13:17):
going to do about it? How do we position ourselves
to win? Well, there's a couple of things. Number One,
we want to look to the future. Markets are what
we call forward looking. They're discounting mechanisms, right, We're trying
to buy something cheaper today than we think it will
be in the future, which is why Tesla trades at
like one hundred and seventy two times pe. Okay, So
we're forward looking. We understand that uncertainty about the future
(13:41):
is what causes the volatility. However, there's some things that
we feel pretty good about the future. Number one, US
fiscal deficits. That's the government spending more money than they're
bringing in. That's continued to widen, that's going to continue
to grow. Now, why do we think it's going to
continue to grow. Well, besides the fact that, as lenn
Alden says, nothing is stopped this train. The CBO, the
(14:02):
Congressional Budget Office, they're the ones that set the budget
for the government. They forecast that for the next thirty years.
They tell us that the fiscal death is going to
continue to increase. Number two, we know that if the
fiscal deficit increases, if they continue to print more money
than they bring in, that the governments must borrow more money.
That's true, so they're going to spend more than they
(14:24):
bring in. That means they have to borrow money to
make up the gap that's the debt. And then we
know if they do that, the bond vigilantes, the people
who are buying the bonds, they're going to demand higher yields.
They want more return for the risk that they're taking.
And if they demand higher yields, then the value of
the bonds go down. This is almost certain, right, There's
(14:45):
only two things in life that are certain, death and taxes.
I think we can add a third that governments are
going to print money and they're going to increase the debt,
and the bond yields is going to have to come down.
So now that we know that, or we feel pretty
certain about that, what do we do. We know that
USTs the US Treasuries the full faith of the government.
They will print the money and they will give it
(15:06):
to you. But the problem is they're gonna be paid
back with D valued dollars. So if you take a
thirty year bond, they're gonna give you, you know, three percent,
four percent, five percent. But over thirty years, what is
that dollar gonna be worse than thirty years from now,
They're gonna pay you back with D value dollars. Now,
the second thing we know is that because of that,
gold and bitcoin are going to outperform the risk rere
(15:30):
yield the US treasuries. Now we also know that both
of these are straight up better investments, meaning will both
go up faster than yields. But we also know it's
not just a straight up better return, it's an actual
better risk adjusted return. We just saw the math. So
what does that mean. Well, if gold and bitcoin are
(15:52):
better returns and better risk adjusted returns then the bond
market than what happens, then three hundred trillion dollars that's
sitting in the bond markets will start coming over into
bitcoin and into gold. This is exactly what the bitcoin
treasury companies are doing. The bitcoin treasury companies see that
there's all this money and fixed income all around the world,
(16:15):
pension funds, insurance funds, all these different funds, and each
one of these funds, each one of these pools of
liquidity has different mandates. So what the bitcoin treasury companies
are doing are creating individual, unique products that can go
into each one of these pools with a specific mandates
that can start to suck the liquidity out. And it
will do that because again it is both a straight
up better return and it is a better risk adjusted return. Now,
(16:38):
if you want to know more about how these treasury
companies work, you might want to watch this video right here,
and I'll see you over there.
Host
Mark Moss
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