What Happens When “Dry Powder” Meets Liquid Markets?

Published on
January 31st, 2020
Duration
50 minutes

The “Everything Bubble”: An ECB Insider’s View


What Happens When “Dry Powder” Meets Liquid Markets?

The Interview ·
Featuring Josh Wolfe and Mike Green

Published on: January 31st, 2020 • Duration: 50 minutes

Why is it that equity returns are at record-highs – and yet beating the market is harder than ever? Josh Wolfe, co-founder and managing partner at Lux Capital, sits down with Mike Green, chief strategist and portfolio manager at Logica Capital Advisers, to explore this question. After Wolfe discusses a few of his recent successful venture exits, the pair discusses how excessive liquidity is making it harder to deploy capital, a process Green calls "alpha-degradation." Other topics include Tesla, Bloomberg, and the "first-mover disadvantage." Filmed on January 23, 2020, in New York.

Comments

Transcript

  • TC
    Thomas C.
    5 February 2020 @ 15:37
    I would like to have RV ask all guests what their daily, weekly, and monthly reading/listening/watching regimen is to inform their view of markets, world, tech.
    • .
      27 February 2020 @ 21:54
      that would not be a good business move for RV
  • NW
    Neev W.
    18 February 2020 @ 01:33
    This interview is brilliant. Both are fantastic!!!
  • MO
    Miguel O.
    14 February 2020 @ 02:33
    At what point will Real Vision pull our memberships at the current rates? This interview makes has me thinking my membership rate is crushed on the RSI Monthly at like 4. Thanks for overdelivering, consistenly, guys and Justine. A real pleasure to hit play.
  • CM
    Cory M.
    13 February 2020 @ 05:12
    What a fascinating conversation - from start to finish.
  • AA
    Alberto A.
    12 February 2020 @ 03:55
    Wow! Amazing. I can listen to Mike and Josh talk for hours and never stop learning. This is like getting multiple masters at the same time. This is why I subscribed to RV. Thanks Mike!
  • ra
    rehan a.
    10 February 2020 @ 23:19
    need a 0.75x speed option for this
  • SA
    Scott A.
    8 February 2020 @ 16:51
    Another brilliant Mike Green interview. As others have noted way to short. I especially found Mike's comments on wages interesting. A sample size of one, but I'm over 60, in IT and in demand right now and it's not worth the bother to fight for a "good" raise.
  • JG
    James G.
    7 February 2020 @ 23:40
    Zuck sucks!
  • FD
    Francois-Guy D.
    7 February 2020 @ 04:08
    Very exciting to hear about new developments in technology and how creative the human mind can be, but I often wonder if embedded in this is our future demise as laws of physics informs us the the more a system evolves towards complexity, the more it becomes unstable. Maybe simplification is underrated.
  • AK
    Ado K.
    2 February 2020 @ 17:07
    Extremely interesting, I think the passive indexation bust as crazy as it may sound will be fiats last grande stance. I think Mike indirectly touches on this when he says "there is no law of the universe that means the active manager gets to bid again" The end stage wont be that markets merely become a function of liquidity as passive has taken over, the end stage will just be hyperbitcoinization.
    • DS
      David S.
      5 February 2020 @ 15:49
      With more than a hundred percent of new money in the market being invested passively, we are already in a liquidity driven market. All the money printing is inflating the financial markets. DLS
  • ZH
    Zack H.
    1 February 2020 @ 15:56
    Great interview as always with these 2. Bloomberg has no chance to win, he is the absolute worst candidate Democrats could pick, he’s exactly what’s wrong with this world; old rich white guy telling others what to do. No Bernie fan, but I think he will win now because people are so sick of the corrupt rich white culture and people want to something so far removed from that he is it. Just how Trump won in 16; now a market crash will pull more average votes away from Trump. I’m no MMT fan but this Central Bank Repo bullshit is just socialism for the rich, let’s do something different. Burn it all down and start again!
    • JP
      James P.
      5 February 2020 @ 15:48
      “Burn it all down”? Who do you think will suffer the consequences, rich white men? Bernie is a recipe for massive destruction of capital and productive capacity. Wall Street will be fine — the working stiff will be on the street. The poor as always will be the first to pay and the last to recover. But folks who think like you will blame capitalism and the revolution will become permanent. Socialism: you can vote your way in, but you’ll have to shoot your way out.
  • TC
    Thomas C.
    5 February 2020 @ 15:43
    Would like to hear more skeptics and timelines of full level 5 autonomous cars (car is 100% driven by computer on any public roads with no safety driver). IMO that tech has been over hyped in the short term. A lot average Joe's on the street who read a few web articles here and there thought by 2019 cars would be driving themselves all around NYC. When not even one single truly autonomous vehicle is even close to commercial operation on city streets from what I gather. To me this is much more complicated then some have been led to believe.
  • KM
    Kyler M.
    31 January 2020 @ 17:19
    Josh Wolf claim that Trump is not a billionaire is so dumb. A simple google search will bring up his net worth, Trump has a net worth of 3 billion. Why would Josh tell these dump lies? And what does he gain by this. Maybe Josh feels bad cause Trump is richer than he is ??? LOL
    • JT
      Jayne T.
      31 January 2020 @ 17:58
      How does anyone really know Trump’s net-worth if he’s never revealed a tax return? Just because it’s published on the internet doesn’t make it so (or not so).
    • TC
      Thomas C.
      5 February 2020 @ 15:33
      Jayne T. ...how can you tell someones net worth from their tax returns? You can't from mine. Tax returns do not have bank accounts on them.
  • GT
    Gene T.
    31 January 2020 @ 20:20
    My guess for the famous investor that said he was meant to trade in the early 2000's, and doesn't understand how things trade today, is Druckenmiller - he said something similar in a RV interview with Kirl last summer:)
    • TC
      Thomas C.
      5 February 2020 @ 15:30
      But Druck goes back to the 80's?
  • SW
    Scott W.
    31 January 2020 @ 20:38
    Stan Druckenmiller
    • MG
      Michael G. | Contributor
      31 January 2020 @ 21:55
      No
    • TC
      Thomas C.
      5 February 2020 @ 15:29
      Druck goes back to the 80's - he wasn't talking about Druck if "legendary investor of the 2000's"
  • rk
    rob k.
    1 February 2020 @ 22:55
    Tesla is BS?? Really??
    • DS
      David S.
      2 February 2020 @ 19:08
      Maybe at the current valuation. More importantly, I think the reference was to driverless car technology. DLS
    • AA
      Ahmed A.
      5 February 2020 @ 01:01
      Tesla is priced as if all other American automobile companies will cease to exist 10 years from now. Tesla has no patent that prevents other companies from also innovating and creating electric vehicles, some are already producing EVs that are better than Tesla's. Tesla loses billions and only exists because it is cheap to borrow money to keep the lights on.
  • DR
    Dave R.
    4 February 2020 @ 08:46
    MG mentions a paper by Mark 'Koriama' (?) about impactful industrial revolution era innovations. I've Googled but can't find it. Anyone had better luck?
    • MG
      Michael G. | Contributor
      4 February 2020 @ 11:16
      A gift: https://www.sciencedirect.com/science/article/abs/pii/S0167268111001909
  • BA
    Bruce A.
    1 February 2020 @ 23:02
    Paraphrasing Mike Green: Global system is set up on a collateral basis. If the collateral contracts with reducing valuations, the debt becomes increasingly due. Dollar comes under demand; Stronger Dollar.
    • ML
      Michael L.
      4 February 2020 @ 03:28
      Mike Green and Michael Howell discussing the global monetary system and collateral would be an incredible video.
  • CV
    Collin V.
    4 February 2020 @ 00:22
    Brilliant conversation. Loved every bit of it.
  • F
    Floyd .
    3 February 2020 @ 23:53
    Bring these guys back soon. Josh is frankly one of the best interviewers that RealVision has. He has the talent as an interviewer and extraordinary knowledge of the subject matter to ask fascinating questions and engages in interesting conversation. My only criticism is there were too many topics covered in this interview. Would have loved to join these guys for drinks after!
    • F
      Floyd .
      4 February 2020 @ 00:13
      Sorry I meant Green as interviewer..typing too fast
  • RA
    Robert A.
    3 February 2020 @ 21:34
    Wow, double wow! One of the very best interviews to date (I’ve seen almost all of them)! This one had even more “breadth” than their Passive investing one which was excellent as well. Very, very impressive interview and, IMO, would draw some new subscribers in if it were to be released to a broad audience in say 2-3 months. A couple of interviews like this one and I feel like my subscription just paid for itself and I’m playing with “house $” going forward!
  • JJ
    Jimmy J.
    3 February 2020 @ 17:02
    I wish I could share the breathless optimism he has for this dystopian future.
  • HK
    Himali K.
    3 February 2020 @ 16:35
    I always learn so much from listening to both Mike and Josh. Thank you RV!
  • PC
    Philip C.
    3 February 2020 @ 15:28
    It's truly incredible how good an interviewer and teacher Mike Green is. I have learnt more from him than both my STEM degrees combined...
  • Nv
    Nick v.
    3 February 2020 @ 11:22
    I feel confident "There is NO WAY Zuckerberg will be a good person in future" Pity Reardon fell for it
  • NI
    Nate I.
    3 February 2020 @ 03:47
    The Mike Green interviews are excellent. Thanks RV.
  • HK
    Hari K. | Contributor
    31 January 2020 @ 23:14
    Great interview! One minor comment ... I may sound like a Sorosesque conspiracy theorist, but NOT comfortable with giving Facebook access to technology that imputes decisions from aggregation of nerve activity.
    • JF
      Jack F.
      1 February 2020 @ 16:09
      Me neither! I think Roger McNamee would be a great guest to talk about this
    • JA
      Jordan A.
      3 February 2020 @ 00:10
      I don't even want strangers in my house.
  • AM
    Artem M.
    1 February 2020 @ 15:23
    Great Interview! On a side note: RV, if possible please find a way to remove the commercials at the end of the videos, for the people that have already seen them (many, many times). I think it's great that you're advertising your services, but I think it's counterproductive to make people re-watch the same commercials over and over again, I'm not an expert but I'm sure you can use cookies or something similar to track which commercials people have already. Thanks for all the great content.
    • tc
      t c.
      2 February 2020 @ 01:34
      at least they are at the end so you can turn it off
    • DS
      David S.
      2 February 2020 @ 19:40
      Just hit fast forward a couple of times if it does not pertain to you. DLS
  • PA
    Pankaj A.
    2 February 2020 @ 16:48
    New subscriber here for few months. This is awesome content RV is producing and Mike Green was excellent as usual in interviewing. First time seeing Josh interview and was really impressed. A Question: Mike G mentioned "Michael Mobizen" who has written books etc and have opinions on today's market structure. Tried to google him and twitter him but no luck . Any pointers ?
    • BL
      Brett L.
      2 February 2020 @ 17:11
      Michael Mauboussin
  • JK
    Jonathan K.
    2 February 2020 @ 15:28
    This is unbelievable stuff, not sure about you guys, but I was extremely impressed by this interview. My extended family and also myself are in the medical space professionally and wasn't really aware of a lot of this. Keep these coming!
  • DM
    Dean M.
    2 February 2020 @ 13:55
    this could have been hours longer - no need to cut such great content short
  • JL
    James L.
    1 February 2020 @ 07:22
    You don't need to do genetic research or a drug to combat type 2 diabetes/obesity. You can already reverse it with a low carb/ketogenic diet, we need to change the dietary guidelines. https://www.virtahealth.com/
    • AK
      Antti K.
      1 February 2020 @ 13:53
      Yeah, but most people would prefer to keep their toxic lifestyle and pop a happy pill to stay healthy instead.
    • tc
      t c.
      2 February 2020 @ 01:39
      Absolutely. many health problems can be cured by change to diet. Americans eat the worst for maintaining good health. A lot of athletes shifting away from the heavy meat and fat diets. GMO creates more diseases than these guys can imagine. Don't need science need a return to common sense.
    • DS
      David S.
      2 February 2020 @ 08:08
      The Blue Zones Diet from National Geographics is a healthy way. Purpose, mostly plant based diet, more beans, less meat more fish, stop eating when 80% full, move naturally, walking six or more miles a day, antioxidants, eight hours of sleep, good social interactions, belong, red wine, coffee. tea, be happy. It worked for them. Why not for us. DLS
  • KT
    Kai T.
    2 February 2020 @ 01:54
    Just give these two their own topic category! It's less like an interview and more like the most information-dense yet relaxed and enjoyable conversation between old friends.
    • DH
      Dale H.
      2 February 2020 @ 06:45
      I've got a 117 IQ and I quickly realized it's not nearly enough to keep up with these two guys. Mike talks so fast I had to check to make sure I didn't have the playback speed cranked up. I felt like these guys are operating on a completely different plane - enjoyable to listen to, but will need to re-listen to absorb every observation.
  • CB
    Chris B.
    1 February 2020 @ 21:34
    Excellent video. These two guys deliver 1+1=5. Josh articulated a framework (impossibility and inevitability) that makes me look at disruptive investments in a new way.
  • DK
    Dave K.
    1 February 2020 @ 18:17
    Literally mutants? Why can't I watch this further....extremes in a normal distribution bell curve are still normal. Sherpa's with superhuman ability? Transplant human infants from middle class US suburbs to the parts of Tibet where walking mountain trails >everyday< is normal, and then train them to be Sherpa's. Sherpa's aren't mutants either. Technological innovations are always a double edged sword, GHO humans will be no different.
  • ND
    Nicholas D.
    1 February 2020 @ 16:23
    Talk of mapping genes of indigenous people to tackle obesity and in the same interview advocating robots to automate our lives. The irony!
  • aD
    amol D.
    1 February 2020 @ 15:49
    Always amazing these 2 guys! If they ever decide to sell tickets for the live show, count me in!
  • GW
    Geoff W.
    1 February 2020 @ 14:51
    that was superb, no need for time constraints on RV I could listen for hours
  • BR
    Byron R.
    1 February 2020 @ 14:08
    Too short - these are two guys that I could watch for 90 min
  • TM
    Thomas M.
    1 February 2020 @ 12:05
    Great interview.
  • AR
    Abishek R.
    1 February 2020 @ 07:21
    Pressed the Like button 5 times.
  • JL
    James L.
    1 February 2020 @ 07:19
    You don't need to do genetic research to combat type 2 diabetes. You can already reverse it with a low carb/ketogenic diet.
  • NS
    Nicolas S.
    1 February 2020 @ 07:14
    A little bit too much faith in the 1% and a little too little appreciation of just how amazing 'ordinary' people are (except when they marry their cousins in which case he'll study them to make money 35:20). Kinda condescending. I'm used to hearing about "wage pressure" (what the rest of us call a raise) but supporting Bloomberg? The guy who won't let his news outlet write anything negative about China for fear of losing terminal contracts. He thinks that guy is the one who "can't be bought"... Interesting. And mark zuck saving us from alzeihmers...I guess it would be fitting considering zuck will remember ever last detail of your life long after you've forgotten them.
  • LC
    Liliana C.
    1 February 2020 @ 06:02
    MG for Prez! Let’s do this!!!
  • AW
    Austin W.
    1 February 2020 @ 04:27
    WOW! I could watch these two speak to each other for hours...
  • NR
    Nelson R.
    1 February 2020 @ 03:56
    Excellent interview and fascinating discussion
  • ID
    Igor D.
    1 February 2020 @ 03:06
    More of this in my head face please. Thanks in advance.
  • ST
    Scot T.
    1 February 2020 @ 01:21
    This guy is trapped in his mind which means he's not connected to reality.
  • JH
    Jesse H.
    31 January 2020 @ 23:34
    Fantastic interview all around. Mike’s comment towards the end, “No, I’m interviewing you!” made me chuckle. Brilliant, self-effacing and gentlemanly. Please get these guys back soon!
  • GF
    Gordon F.
    31 January 2020 @ 22:26
    At about 4:10 Mike says, "Nobody cares what I have to say." WRONG!! Please, PLEASE get these two on camera again much sooner than "a year". And for a lot longer than an hour. You would probably want to break it up into a series of 1-hour or so episodes, but we need to hear their perspectives and insights more often and at greater depth.
    • DS
      David S.
      31 January 2020 @ 23:27
      Mr. Green wanted to cover other topics and the time was short. Mr. Green discussed his population views in other presentations. An update would be helpful. I would also like to hear Mr. Green at any time, especially on how the market is moving to new paradigm at least in the short run. Please, please. DLS
    • SS
      Sam S.
      31 January 2020 @ 23:32
      I agree and do want to hear from Michael Green. He's awesome!
  • SS
    Sam S.
    31 January 2020 @ 19:19
    Fabulous intelligent interview by very well spoken depth of knowledge skin in the game gentlemen. Didn't really care for the Bloomberg plug and regarding the "looking up to the President" by the way he behaves comments. The rear view mirror is dark and deep on that shite. This whole theme of tech innovation, massive change dynamics, as generated by our super smart guests, will almost guarantee future leaders, statesmen and officials will have no clue how to act, how and what decisions to make and will become the puppets of those who do. Mark Zuckerberg was asked, during the Senate investigations, if Facebook was like what Twitter does? Really---WTH? The future leaders better be the smartest guys in the room, or forget it. Politics is about compromise and making deals and that's what Trump is good at. He finds the smartest guys or "You're Fired". The food for thought of this interview and banter back and forth, was first class!
    • CC
      Casey C.
      31 January 2020 @ 20:00
      All due respect Sam, you were put off about Josh's comment regarding Trump, yet you express your political opinion in your feedback.?.? Agree or disagree, it's his opinion. Let's not make it an issue, and let's certainly not do the same things you're criticizing him for. Peace, love, harmony my man.
    • SS
      Sam S.
      31 January 2020 @ 23:30
      Hey Casey, Point taken! Thought I clarified why after stating my comment. Mr. Wolfe can have his political views, as can all of us, I think. Not sure Bloomberg or any one in the political arena can measure up. Government to me is broken and declining around the world. People vote with their wallets. It's all good and I appreciate your reply! All the best.
  • KB
    Kenneth B.
    31 January 2020 @ 22:07
    Usually I just want to hear the guest speak and not hear the questions; or I find the interviewer highly distracting and annoying. This interview was quite the exception. I found the interaction to be highly interesting and engaging. The respect each has for the other despite some differences in opinion (or thesis) is inspiring. Well done.
  • MI
    Madhu I.
    31 January 2020 @ 22:05
    You can’t have these two talking for 45 minutes. Just not enough. Need at least a two hour segment. Now we have to wait for a year to hear them speak.
  • JS
    J S.
    31 January 2020 @ 20:51
    Josh are there publication(s) where we can keep learning about these type of innovation enterprises and/or projects? Not in particular your portfolio, but emerging technologies and trends. In many ways they are histories of hope (ex-FB acquisitions). Thank you both.
  • SS
    Stan S.
    31 January 2020 @ 15:23
    What is the limiting factor here? Why stop these two from talking? Always leave them wanting more? Well, it worked. This is the content I am here for but I want more of it. Thank you Mike, Josh and RV!
    • MG
      Michael G. | Contributor
      31 January 2020 @ 15:38
      Lol... limiting factor was time of day and construction about to start next door! Glad you enjoyed. We’ll get an extended cut next time. We talked for 2 more hours after this, but couldn’t film due to noise.
    • SS
      Sam S.
      31 January 2020 @ 19:21
      Also limiting was the comment of meeting up with someone for drinks after the interview-----all this brain work is exhausting. Take chill pill and give them a break. But I did want to hear more.
  • SS
    Simeon S.
    31 January 2020 @ 18:44
    A pill to fix obesity epidemic. Ok...
  • DB
    Don B.
    31 January 2020 @ 18:37
    Way too short!
  • BK
    Bruce K.
    31 January 2020 @ 18:24
    Inconceivably good! Bravo to Mike, Josh, and the team. This one interview worth the price of annual RVTV subscription.
  • DS
    David S.
    31 January 2020 @ 16:39
    Concerning the discussion of managers showing a 0-10% reduction in liquidation versus a much larger value before in past market crashes, this may be behavior. Many of the current managers have not seen first hand a market in a liquidity crisis. They are more use to 10% declines, except for the Christmas Eve decline which quickly recovered after the Fed changed course. The Fed cannot always have the market's back. DLS
  • RG
    Richard G.
    31 January 2020 @ 15:42
    Please do not ever put a time restriction on a conversation between these two guys. Just let these guys talk until they're too exhausted to say another word. It would be worth multiples more than the cost of the subscription!
  • AM
    Alexander M.
    31 January 2020 @ 15:24
    #underlyingdynamicsquad
  • WB
    Wesley B.
    31 January 2020 @ 15:14
    FFS Mike, go another 30 min! You have to catch a flight or something? That ended like one of my middle school papers... Abruptly and incomplete.
  • RM
    Richard M.
    31 January 2020 @ 14:52
    Wow, so so good! This is really why I signed up to RV many years ago - truly enlightening conversations in a convivial atmosphere that you just don't want to stop. Please have them on again in 6 months to update and delight again (and increase to maybe 2 hours in length!).
  • SS
    Steve S.
    31 January 2020 @ 14:42
    Mike Green is the best interviewer on Real Visions, hands down. These two have such great chemistry that only best friends can have. A real privilege to listen to.
  • JA
    John A.
    31 January 2020 @ 14:40
    Holy cow! Didn’t know it was possible to disagree on the state of current politics without bullets flying! Kudos to both of you. Great conversation. Mind. Blown.
  • NR
    Nathan R.
    31 January 2020 @ 14:38
    Slick. I wonder what Taleb would say to this level of hubris relative to technology and human capacity. People with access to cheap capital and good intentions. A bit frightening, frankly.
  • TB
    Thibault B.
    31 January 2020 @ 14:05
    This needs to happen more than once a year!
  • JW
    JW2 W.
    31 January 2020 @ 13:37
    Great conversation. So many topics that would benefit from further discussion. One of the things I was interested in is the Machine Learning aspects of the new developments that Josh discussed in the areas of autonomous driving, neuro-technology. He seems to be involved in some cutting-edge companies and it would be great if we can do a deep dive into these aspects of his business. Mike indicated he is starting to get involved in this as well. Much to talk about for sure. Thanks to both for the fascinating conversation.
  • DP
    Daniel P.
    31 January 2020 @ 13:20
    Can we tokenise these guys already so I can buy a little piece of each of them? I think I'd go about 60:40 Mike:Josh
  • GD
    Gerald D.
    31 January 2020 @ 11:50
    When I saw this on the docket for the week, I instantly knew this was gonna be good
  • PJ
    Peter J.
    31 January 2020 @ 11:06
    Brilliant, but far too short, next interview Josh interviews Mike? Soon?
  • NH
    Nils H.
    31 January 2020 @ 10:59
    Just phenomenal! Thank you
  • DF
    Diamantino F.
    31 January 2020 @ 10:53
    Best of the best, thanks RV, please Mike green update on china soon,
  • AS
    Amit S.
    31 January 2020 @ 09:28
    This brilliant discussion should be available to everyone asap i.e. beyond a paywall!
  • DS
    David S.
    31 January 2020 @ 09:21
    Just excellent. There are so many nuggets that passed by so quickly I will need to listen several times. The transcript will be very helpful. Vast quantities of money chasing fewer and fewer stocks passively will run its course. I hope I live long enough to see the paradigm shift and that some of our hedges worked. DLS