In their recent episode of the VALUE: After Hours Podcast, Taylor, Brewster, and Carlisle discuss The ARKK, Tesla, Bitcoin Correlation. Here’s an excerpt from the episode:
Tobias: If you pump asset prices up high enough, you’re going to get a bust eventually. They get to a point where they’re so far over their fundamentals that there’s no ability to make any money out of them holding them. So, people just will look for other alternatives. They’ll stick their money into silly stuff like NFTs, with all due respect to the crypto bros. Crypto, that’s not the big market capped ones.
Bill: Yeah. You know what I thought was funny about crypto, I hopped on a Space with Akram’s Razor’s, and we were chatting. I’ve been trying to figure out because I look at how bitcoin trades, and it seems like a levered beta asset to me. I need to run a regression analysis on this but it seems totally like a risk on asset the way it’s– [crosstalk]
Bill: Bitcoin, specifically, which is odd, because it’s supposed to be like this– [crosstalk]
Jake: Store value.
Jake: Outside the system.
Tobias: It’s the same crowd. The growthy tech guys tend to be the same guys. I realize there’s some overlap with the gold buggy type guys, and I’ve got some sympathy for those guys. But when you look at what’s underperformed most this year, Cathie’s off 25% plus, Tesla’s off 20 something percent, Bitcoin’s off 20 something percent. They’re all pretty correlated with each other.
Bill: Yeah. You guys know Preston better than I do. But over time, I’ve heard him advocate Ark as a long and Bitcoin as a long. I think that the underlying premise, correct me if I’m wrong, but I think it’s similar in that it’s predicated upon kind of nuts monetary policy. A lot of the long Bitcoin thesis is government can’t be trusted. So, when the government actually shows that maybe it can be, Bitcoin falls to the ground. So does SaaS–
Tobias: But there’s a big [unintelligible 00:11:40] component, right?
Bill: –it’s like the same fucking trade.
Tobias: I agree with that.
Bill: I’d like to see factor overlayers or something. I don’t know what I’m trying to say.
Tobias: Oh, Preston’s more value than he is growth. I vaguely remember the Ark pitch. I don’t think he’s pitched Ark. I don’t know.
Bill: I think he did. I think it was on your Mastermind. But I think it was on a policy based– I think it was almost a macro call that would drive people to Ark. He wasn’t saying this is a value investment. I think he was just trying to come up with something not named Bitcoin to pitch, because that’s what people wanted him to do.
Bill: Yeah. I don’t know. I like him. I’m not trying to– [crosstalk]
Jake: That’s as good as money, sir.
Tobias: [laughs] Doge.
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