1817: Boombustology: Financial Market Bubbles - Dr. Vikram Mansharamani Part Two

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Welcome to episode 1817. 1817. And today we have part two of Boom Bustology, how you can use the five indicators that we are in a bust cycle and a bubble cycle. So Boom Bustology, we will be starting that in just a moment here, but first I want to talk to you about a couple of very important changes in the market. And that is, I hope you can see my screen, okay. That I announced at the beginning of the year that we are starting this year with the lowest inventory ever. And again, the reference point is, because you've always got to ask, compared to what the reference point is, looking at the inventory of what it should be, right, it should be about 1.2 to 1.5 million homes. And if you see back here, you know, around 2015, we had that kind of number. And we started off the year with a record low of 293,000 homes for sale. Just over 293,000. But then, guess what? Inventory actually declined. It got lower. It got way down to 241,000 homes just about maybe two weeks ago or so. So inventory got lower. But. But wait, there's more. So I described this as like going into the grocery store and seeing 2/3 to 80% of the shelves empty, right? You walk into that grocery store and there's just nothing on the shelves. I mean, only 20% to maybe 33% of those shelves are stocked with food and the goods you need, the groceries you need, most of them being empty shelves, empty store shelves. And that's what the inventory picture was like. But like I said, wait, there. But wait, there's more. It is changing. And maybe this is an indicator of just a tiny, tiny little turn in the market. Look, it's too early to tell. As the old saying goes. Te tt too early to tell, right? But here's the inventory. It actually ticked up ever so slightly last week. And this is all Altos research data. We've had Mike, the founder on the show now at just over 248,000 homes for sale. Again, in order to have a normal market, a normal market, not a down market, not a downturn, not a recessionary market, not considered a buyer's market, we need to see inventory levels increase by 3 to 500% to get to equilibrium, to get to normality. So we are far, far from that. There is still a massive housing shortage. I know there are a few people that disagree with this, not many, but there's one in particular I'm thinking of. I've invited him onto the show because I really want to have a debate with him about this because I think he's wrong. Inventory is in very short supply. There is no question about it. But here's what's interesting. You know, how taught you over the years about the three major types of markets. Linear markets, cyclical markets and hybrid markets. You can take all of the markets in the US It's a very large country, and all of the markets really in the world, all of the real estate markets in the world, and divide them up into linear, cyclical and hybrid markets. As you know, we like the linear markets, the markets that are slow, steady and profitable. And the cyclical markets are the ones that when you're looking at a price chart, they look like a roller coaster. Ups and downs and terrible cash flow. Typically also business unfriendly and landlord unfriendly, which are other characteristics we like to see when we are looking at markets. So check this out. This is the national number. Inventory ticked up slightly, only by 7,000 homes. It's like a drop of water in the ocean. It's. It's nothing. But it is an indicator. It is a comparison. And if it keeps going up, eventually we might reach normal. If it goes up by three to five times the amount of inventory we have today, that's how far away we are from a balanced market. It's a long ways, folks, long ways. But you gotta watch the trends. So that's what we're doing. So this is national, but what if we just look at California? Of course, it's always important to talk about my former home state, the Socialist Republic of California, because it is the most populated state in the country. Although it's been losing population very quickly as people vote with their feet and I voted with my feet about 11 years ago and I left California because I was sick and tired of the high taxes, the high regulation, and all the other problems California has. But notwithstanding, California is mostly a cyclical market. Almost every market in California and certainly the most populated markets within the state are very much cyclical markets. So if we look at the national numbers in inventory, it tells us there's a slight uptick as a percentage of what it needs to be. This is. It's a drop in the bucket. However, let's look at California specifically and see if things are changing at a higher rate, at a higher percentage. In California, a cyclical market. Also other cyclical markets around the country, the expensive northeastern markets, south Florida, where I live, also cyclical markets. Take a look. So we saw this slight uptick nationally, but in California we saw a larger percentage uptick in inventory inventory increasing there to about 19,000 homes for sale within the state. That's just for the state. Okay. Now, their version of a more balanced, normal market would be somewhere around 70 to 80,000 homes for sale at any given time. Still, they've got a big inventory shortage as well in California, but that percentage increase was higher than it was nationally. So does that indicate to us that buyers are rejecting high priced business, unfriendly landlord, unfriendly cyclical markets? More so than they are the national market, which is more composed of a lot of linear markets and some cyclical and hybrid markets. Right. And I say that it does. But again, these are such small changes, such minor changes that I don't think we need to really even imply anything to this yet. But it is something to watch. Right now it's just a little blip on the radar, but we will monitor the situation and report on it as it develops. Okay, I want to remind you all we have a fantastic virtual event coming up. It's live, but it's virtual. So you can be in the comfort of your own home and eating popcorn, learning and networking with fellow investors. Now, this is the JHU event. Jason Hartman University. We've been doing this one for a while and it's the first time we've presented it virtually. You're going to learn how to build a portfolio, how to allocate a portfolio, how to optimize a portfolio, how to do the math when it comes to real estate investing, and how to really understand and evaluate deals and portfolios as a whole. So this is going to be a fantastic virtual event. These virtual events are super easy, super inexpensive. Join us. We start on Friday evening, April 1, yes, I know that's April Fool's Day.

Maybe we'll have an April Fools for you in this event. And then we go for several hours on Saturday, April 2nd. So go to your favorite website, go to jasonhartman.com and register for this live virtual event, JHU and we will look forward to seeing you there. Also, a lot of networking, a lot of time to answer questions, ask questions, and it's going to be great. So be sure to check that out. Remember, this is only 16 days away, so be sure to get your tickets right away while you can still get that early bird pricing. Just go to Jason hartman.com and register. Also, we announced the winners on the last episode of our giveaway. And all you have to do is either comment on our YouTube videos and we use a randomizer. I guess I should say that will pick comments and we pick one winner from there. And we pick one winner who wrote a review on Apple podcasts or formerly itunes. So write your review, comment on the YouTube video, you win a $50Amazon gift card. And let me just tell you folks, the odds are pretty darn good. It's not like a thousand people do this every week. So your odds of winning are very good. And we announced last week's winners on Monday. One of them claimed their prize already. You have 30 days to claim your prize. So I hope that other one comes forward again. We don't have your phone number or anything. You're just handle when you when you write a comment or a review, not even a real name a lot of times. So be sure to do that and enter to win a 50Amazon gift card. Okay, without further ado, let's talk about boom. Bustology and the indicators of whether or not we are about to see a bust. And this is not just in real estate, this is in any asset class. So very valuable information here. Fantastic guest to talk to us about it. And here we go.

And I was teaching this class on financial bubbles down at Yale University probably a decade ago. I was teaching this class and one of my students comes in one day, you know, Dr. Mansha Mani, I figured it out. I know how to solve the Japan problem. I said, oh please, this is like there's trillions of dollars riding on this question. Share it. He said, we got to get a nice big ballroom, lower the lights, get some nice romantic music and bring the boys and girls into the room. We'll be all set. 18 years later, you'll solve this problem. You got to do it widespread across every school. And I was like, Okay, I got it. You're right. It's a demographic problem.

Yeah. Right.

So there's different solutions, I guess.

Right. But it's, it's so, it's so dysfunctional in Japan. I mean, women are having weddings by themselves, these solo weddings. It's just weird. The men are just playing video games and I'm sure watching porn. You know, they don't interact. And now you bring the metaverse into this, and that is really going to lower the birth rate, if you ask me.

I think you're right. No, I think you're right. I think that we haven't thought through the demographic, the long term demographic implications of social media and this whole virtualization of life.

Yeah, yeah, you'd think it would bring people together, but it actually separates people. It's a, it's a, it's a wall of technology. It's like a new kind of iron curtain. It's a tech curtain. But we got on a tangent there and I love getting on going down the rabbit hole with you, but what was the real question? So, so real estate. You're, you're pretty good with real estate, it sounds like.

Well, what I would say is. What I would say is this real estate is so much more complicated than anything I could get into here today. And you know better than I. You want to. Every geography is very distinct and unique. Every asset class, whether it's student housing, which everyone thought for the longest time was great, except when people move to virtual education and suddenly education is less valued. Well, maybe it's not as great, right? Or, you know, warehouse space. Oh, well, who needs warehouse spaces if everything's getting shipped to the home? Well, sudden warehousing space is really interesting.

Booming. Yeah, right.

I mean, so office space. Oh, everyone needs offices.

Well, what if you all move to.

Work from home and maybe you don't want office space. You know, I talked to one big global company that has, you know, hundreds of thousand plus employees, and they're reducing their office or their, their real estate footprint by 30% in the next five years. Yeah, I know this is a big headwind for that segment, so I would just suggest I'm. My bias is positive towards real estate over the long run, but demographics are going to come into play, the segment's going to come into play, the geography is going to come into play, et cetera, et cetera, et cetera.

And housing is the most reliable of any of those asset classes in real estate. I mean, the office space, Terrible. Industrial is doing pretty good given the last mile and so forth. But you know, there's drones, there's other disruptors. I don't know, you know, we'll see. It's complicated of course, but I'd say office spaces, the office and retail are the most risky of the two. In the real estate category, residential being the least risky of all, and medical office as well. But some of that is going to be done at home. More and more of that is being pushed into the residence with technology. So that's being disrupted as well. And you know, so many good things came out of COVID and one of them is, you know, every industry was forced to modernize. I mean the legal profession is now using Zoom. Oh my God, it's like America miracle, you know, that a lawyer could use Zoom. To them it's a foreign idea. Medicine, same thing. Telemedicine. So we're seeing some really good stuff come out of this crisis we've been in as well. Okay, so I'm going to ask you the other big one. Stocks.

Sure.

Equities. Well, it's again here I would say one needs to be also more nuanced between growth value, some of the other things. I saw a stunning chart at one point and I haven't seen an updated version of it, but it the Goldman Sachs index of non profitable technology companies. And it was a vertical line going straight up. And the reason I bring that up is that was a vertical line going up months ago. My guess is it continued to go up even after I saw it. And maybe it's pulled off a little bit recently here. But the reason I bring up that one is there's an element in the market today of this growth is coming. It's out in the future. Five years from now, ten years from now, this is going to be a trillion dollar business and it's going to. Well just think about the discount rate one uses to bring it back to the present. If we change that discount rate suddenly my 2030 assumption of profits is worth a lot less in equity value today if I take that discount rate up. And as such I think we need to look and see what people are thinking about the future.

And we also need to look at what happened 21 years ago with the first dot com bubble. I mean let's not forget that.

Sure, that's right. That's right. We get ahead of ourselves. The world is always going to be different, but this time it's different. Phenomenon can be really risky when applied to concepts such as valuation. And so I'm cautious on equities generically. I do think there's probably some segments of the value area, things that are not in predominant indexes. The ETF and passive investing bubble that's been brewing, I think has distorted the delta between security that's in an index versus one that's not in an index. So there's different market cap, perhaps inefficiencies that exist. And I'm a contrarian by nature. I was studying China when people were studying Japan in the late 90s, or, excuse me, the late 80s, early 90s. I'm intrigued by value investing opportunities today. You say, well, distress or no distress, the world's on fire. How's our distress? When you find areas that are sort of beaten up, they kind of draw my attention. Right. If they've got a means to survive. And so it's a different form of analysis that one needs to think through to find those opportunities. But generically speaking, large cap growth, where a lot of the future returns are in that discounted future years, I'm a little more cautious on those today, and not because I think there's a huge inflationary spike that's likely to come, but I do think the cost of money will rise, the discount rates will shift, and as that happens, the equity value embedded by discounting back a series of future cash flows will be worth less today. That'll be an adjustment now once you have.

That's a very good point. So in other words, these tech companies with this sort of infinite scalability that they're selling, which makes their PE ratios psychotic. Okay, you know, maybe they can scale and take over the whole world, but how much time will that take before that return comes? That's a. You got a discount for that? Of course.

Perfect. No, that's exactly right. Yeah. And you can look at that, whether it's autonomous vehicles, whether it. I mean, there's a whole list of things that are coming that are going to be great, which may in fact be great. But a lot of people forget Amazon, which of course scaled. Amazon went down by 90 something percent during the 99, 2000 bubble. 90 something percent. It fell, of course, it came to dominate. And people said it would dominate back then. Didn't prevent you from taking a 90% hit on your equity position.

Right, right. And most investors get just too scared and frustrated and sell at that point. Unfortunately, that makes the decline even worse.

That's right.

Did you write about. I'm glad you mentioned indexes, Vikram. Did you write about indexes in Boombustology? I think you did, right? Yeah.

The second edition of Boombustology had a chapter Asking whether or not we were in the midst of a passive investing bubble. And so that indirectly gets at the index investing logic, because that's the predominant way of passive investing. I think people have expanded it to say, I'm passively investing in these ETFs that are narrower and narrower and narrower. And I wouldn't call that necessarily index investing, although they think they're passive. So the idea of passive investing was, look, there's all these active investors out there and they're fighting and battling it out between buying and selling. And as a result, the prices are right, the prices are accurate. And so therefore don't waste your money paying a manager to figure out what the price should be. Just buy the basket, minimize fees, and you're good to go. You'll get the market return. And that's generically a very sound philosophy. However, any good philosophy taken to the extreme turns into a bad philosophy. And so just hypothetically, Jason, let's even just do a thought experiment here. What if everyone was passive investing?

Right. No one's thinking right.

Exactly. Hence the title of my most recent book is called Think for Yourself. But if everyone is passively investing, then there's no active price discovery. And prices will move based on flows in and out. Everything good. Security, bad security, one with good news, good, earnings bad. It didn't matter. They'd all go up in sync or down in sync based on inflows or outflows. So flows come to dominate fundamentals. So we all agree that's going to distort markets. Well, now the question is what degree of the way there are we. Because we're going.

That's the question. So, you know, Jack Bogle obviously revolution. The late Jack Bogle obviously revolutionized the whole investing world with, with Vanguard. But it's really scary because you get into this sort of mob mentality, right? People just throwing money at here, I'll just take the S and P, I'll just buy the 500 and not think about it and I'll let it ride. And there are so many books written on this around the Vanguard idea, which is just let it ride. And you know, so many people read the classic random walk down Wall street and you know, you can't beat the market idea, right? Which is true, I guess, until it's not.

Well, it's true in aggregate, right? So you could argue in aggregate, it's even if you had people beating the market and you had some people losing out to the market and you had some fees embedded in there in aggregate, on average, the Investor would lose. Now, there's a lot of assumptions of, in aggregate and on average right there. I love it when people talk about on average. Sorry. Since you've taken a little deviations, I want to take one real quick here. People often ask me about, what do you think about Chinese economic growth? And they say GDP per capita is rising. And I say, whoa, whoa, whoa, hold on a second here. You're talking about on average. And if we want to talk about on average, I want you to get up here on stage next to me. I'm going to put a bucket of ice water here and a bucket of boiling water. Put your left foot in the ice water and your right foot in the boiling water and then say on average you're comfortable.

Right?

Okay, so we're losing a lot of nuance when we talk about on average, et cetera. Anyway, sorry for that.

No, it's a great metaphor. It's perfect. People need to hear the.

We come back to the idea you were getting out of passive investing. I do think it's a problem because ultimately what we're talking about with passive investing is buying and selling independent of price, independence of price. Well, hold on a sec. I always thought you wanted to buy low and sell high. And so the operating assumption that prices are always right misses the fact that the world has transformed from one in which passive investors were price takers into a world where today, in many markets and submarkets, passive investors are price makers, not takers. And so what they fail to realize is that creates an embedded momentum in some of these market cap weighted indices that are passively, that are disproportionately, passively run. Right. So, all right, we're going to buy the s and P500. And so inflows go in and disproportionately, the largest market cap companies need to get the most flows because of their market cap weighting. Well, it turns out that means tomorrow, all else equal, the largest cap companies went up a little bit more because they had more inflows. Well, now you reweight the index and now they got to get more inflows. And so you get a de facto momentum strategy here.

I know, which is fine.

It's a virtuous cycle while it works, and it'll be vicious when it doesn't.

And it creates more of this winner take all problem. Yes, which, which. Yeah, yeah, so, but, but the, the.

Caution here is that it's virtuous until it isn't, and then it'll be vicious.

How do we know? I mean, you you mentioned, and I agree with you 100% that it's a matter of degree, like how much money is chasing the indexes. Right. And if, if there's not much money chasing the indexes, then you're, you're going to win because you're not going to pay an. You're just going to ride the ride and not look at it and it's going to work. Right, that's the random walk idea. But how much is in now and how do we know when it's tipped? Right.

Yeah. So look, we know from some aggregate data that we've now moved to more of the assets in the world being passively managed than actively managed. However, we also know that passive investors basically don't trade. So the active managers have disproportionate influence on price discovery, which is good. You still want price discovery to be as good. And so what I think we need to pay attention to is the flows. And the big ticking time bomb that I have on my radar screen that I'm watching is retirement. When people start, when we start seeing money coming, flying out of retirement accounts. Now we've had a market that's continued to rise and so those retirement accounts have gone up. But if we start seeing a market that has some hiccups and you see some people say, you know what, I'm done, let's retire. Let's just move it all to fixed income, I want to live off of it. We're good. We got that last juice up. It feels riskier from here forward. And you start seeing an incremental, demographically driven, meaning a non economically driven rationale for selling, which is, okay, I'm at a different stage of my life, I'm done, let's start liquidating. Oh, now we've got the risk of virtual virtuous turning vicious. So that's the one I'm watching. And it could be retirees, it could be accelerated, you know.

Social Security dropping off, say, hey, we can't continue to afford these big benefits. So you got to rely on your retirement more. And so I don't know what it is, something's going to happen that may result in that flow shifting.

Right? No, that's a great point. And you know, the question is, that's a matter of degree too, because it doesn't all happen at once. It's sort of like there's certainly a lot of aging baby boomers out there that are hitting retirement age every 10 seconds or whatever. Right. But you know, that age is getting put off. Do they really retire Are they really taking money out? And, you know, the financial innovation, which. That term scares the hell out of me, but, you know, there's so many more ways you can borrow against those accounts now than before. So you don't have to cash them out. You can just collateralize them.

Well, you're right. It gets scary. And then the labor market today, which we can argue about, and we've already talked about how technology has the ability to take away some of these pressure points that are pushing upside inflation, whether it's labor wages, et cetera, the labor market is strong enough today that people say, hey, you know what? I kind of like hanging out with people. Let me go to this driver job or let me do that. I'll work for a hotel. And so people. People who are retired are coming out and just doing stuff to interact for social reasons.

Social jobs, which. Which those people before used to be married, and now they're. Now they're single. And. And. And so because people get divorced three times in their life nowadays, right. Or never get married. And so they need that socialization. Whereas before they lived in one place most of their life, they were married, they had that social cohesion, which, sadly, there's. The loneliness epidemic is terrible. So that's. That's a very good point. Yeah, yeah.

So that brings people back out into the labor market, and while they're there, and we have this labor shortage and pinch, et cetera, it gives them additional feelings of cash flow. So they don't need to liquidate the 401. Fine for now. I've got any money coming in the door. It's fine. The government gave me more money. I was retired, sitting at home. They gave me a raise. This is great. What do you want me to do? It's fabulous. I don't need to liquidate. I'm good.

I would say if and when. I would say almost not if, if. When that liquidation starts. Given the demographics we know in the retiring population, I suspect we'll see aggregate impacts. And if we have aggregate impacts, then we have something to worry about.

Yeah, yeah. Very good points. Really good analysis, Vikram. Last one for you. Maybe the toughest, actually. Bitcoin.

Sure. No, listen, it's an interesting one. I've commented a lot on it. I wrote a piece in 2017 which a handful of journalists have pulled up. I don't know why, but recently I've been getting asked a lot about it. It was called Bitcoin Boomer Bust. And I wrote it when bitcoin hit, I think eight or nine hundred dollars And a bunch of people were analogizing in the media that, oh, we've got our modern day Beanie Babies.

We got the Cabbage patch kids of the day. And I was like, okay. So I ran through my analysis at the time of five, six lenses. And I was like, well, if you're looking for Beanie Babies, you better look elsewhere. Because I don't see the downside. Right.

Ways a dynamic that you need to think about with bitcoin that's similar to the precious metals. Right. Non printable. Now I'm talking about bitcoin. When we talk about other cryptos generally, now we're talking tokens and all these other things.

That's why I didn't say crypto. Bitcoin specifically is. Yeah.

Bitcoin specifically, I believe is thought of by many as a non printable currency, not sovereign, not printable. And in a world where people print and people take away, et cetera, then you want to be having assets that can't be printed and taken away from you politically, et cetera. So I think there is a lot of reason why one can say bitcoin has a role. I'm not going to get into the valuation because I have no idea how to value this thing. I can tell you about the pressures up and down. The pressure up is if I believe monetary debasement continues, if I believe political risk exists, exist everywhere in the world, and I want some currency or some asset value that can in theory hold value independent of all those dynamics, then that's what I want. Now you've seen regulatory action come after it. Now what's interesting is when the regulatory action, whether it was in China or elsewhere, said, hey, we want to prohibit this stuff, you actually saw more buying, you saw more buying of bitcoin. And I think that tells you that people still think of it as a means to escape sovereign arms reaching into your pockets. Now, whether or not that retains its case, we'll see. I think there's a role for bitcoin. I think it'll exist. I think there's a role for decentralized finance. Bitcoin will probably play a role. Whether we'd call it a currency or a reserve asset, I don't know if we get there. Insofar as people called gold a currency, geez, gold went 2,200. I mean, there's a lot of volatility in gold too. But over long periods of time, gold has proven to be a store of value over long periods. Why? Because people believed it would be. There's nothing inherently useful about A shiny rock that you have to pay to dig up and pay to protect. However, like fiat currencies, it's just a base in faith that it's worth something. The only thing is it's not as manipulatable for political reasons. And so that's one of the roles. Bitcoin, I think, has some value.

One can imagine in a world where the US And China and others are escalating their rivalry and you have global currency wars, monetary basement, et cetera, that Bitcoin could have a nice support base of demand for that reason alone. So I think there's a role for it. I don't think it's a big role. It's not going to replace the dollar. It's not going to replace any big global reserve currency anytime soon. It needs to get some stability to be thought of as a currency, et cetera, et cetera. There's a lot of nuances there, but I'm not, not particularly negative on it saying it's going to go to zero. I mean, it may go down. Yeah, sure, it could go down a lot. It can go up a lot, too. The pressures are there for either direction, but I think it's going to be regulatory pressures that tries to take the wind out of those sails. But the demographics, which is more millennial investors and younger investors that want to be more digital in their thinking, that want to be free and clear of government manipulation, global demand story, et cetera, point towards more upside. The regulatory pressure points towards downside, and we'll end up somewhere in between.

Yeah, yeah. Very, very good. All right. We shall see. That's the toughest one of all. I think it's the Bitcoin one. We've gone a lot longer than expected, and I know we've got to wrap it up, but Vikram, just wanted to ask you about your other book, Think for Yourself. Right.

It's called Think for Yourself. Restoring Common Sense in an Age of Experts and Artificial Intelligence. And it's really about how in this time where we're so dependent experts and technologies to tell us what to do, that we've literally stopped thinking. And what I'm suggesting individuals do is take control of decisions, whether they're financial health or otherwise, that what we need to do is put our decisions in our context. It's fine to go get expert insight, but the phrase I use in the book is we need to keep experts on tap, not on top, which is don't give up control, but take their input. And so that's the essence of it. I talk about it in a bunch of different walks of life, including finance. And in fact, I talk about some stories since we brought up Jack Bogle. I talked about Jack Bogle a fair amount. Jack actually funded my high school education when I was a scholarship kid at Blair Academy. So I got to know him pretty well and he was really profound influence on my life. So yeah, there's stories like that and it's more of a storybook rather than a textbook.

Yeah, very good. Excellent. Vikram, do you have a website you'd like to share?

It's just my last name dot com. It's www.mansuramani.com. and the one thing that individuals may appreciate your listeners, Jason, is that I've written oh geez. There's probably 115, 120 short meaning 800 to 1000 word articles on various topics of global affairs, inflation, deflation, central bank policy, bitcoin, you name it, all those topics, the demand for food, demographics, and they're all on my LinkedIn Prof. So people go to, you know, it's publicly available for free, no password. You don't even need to connect with me, although if you want to, you can.

Good stuff. Well, Vikram, you are just a wealth of knowledge. Thank you so much for joining us. Really fascinating discussion that I could easily carry on for two more hours.

Jason, thank you for having me. Jason, I really enjoyed it.

It's my pleasure.

I really encourage you to get involved with Jason and his team.

The whole group over there is just fantastic.

I started working with them probably 10 years ago. I think the world of this group.

They'Ve helped me a lot and I.

Think that you'll really enjoy the process.

So George Gammon, Jason Hartman and I have, we've created a high level mastermind group called the Collective. The goal of the Collective is for you to learn from the three of us, us as well as of course the other members on how to build and more importantly, how to maintain your wealth. In this video we're going to go into detail about what the Collective is and what it can do for you. Enjoy. So I'm Ken McElroy. I've been in real estate for over 30 years. Started with a two bedroom, two bath using my own money. And now I own over a billion dollars worth of real estate that I bought over the years. Built a big company. We have a construction company, a development company, a property management company, and of course an investment company. And typically now we syndicate and work with large both private and public institutions for the equity and the debt. And so what I bring to the collective is how to scale, how to grow. Starting with one really small property with no experience at all and growing it into an organization, which I've been able to do that basically runs almost without me. So that's what I'm going to bring to the collective. We decided to start the collective because one, I met George Gammon and George brings a very interesting perspective about the economy and the Fed and the way money works and bitcoin and alternative types of investments, which quite honestly, I was super focused on real estate almost the entire time. And even I want to be a little bit more diverse. So when I talk to George and to Jason, they're always doing very, very different things. On the investment side, Jason specifically is more focused on the single family housing and what's going on in that market so that we could collaborate and have different viewpoints, points on different things. And so that's why I thought the collective would be good because I think everybody's kind of searching for the same kinds of answers. So the collective means to me basically the collective group, the whole. And I've always been a big believer of team and collaboration. So for me it really means collaboration of everyone kind of coming into a room and learning from each other based on their individual highs and their individual lows and to be very, very respectful of all their independent views on things and to be more open minded, transparent and authentic. So I cannot wait for the group to get together each and every quarter because we all have very different walks of life that we're going through. And so it's very, very cool to get into one room with like people. I think the right person for the collective is somebody who's into personal development, somebody who's trying to be a better individual, somebody who's trying to have that work life balance, trying to figure out good decision making on the investment side specifically, good decision making on the personal side perhaps, certainly on their health and on their wealth. The members that have already signed up are people typically that have businesses that they're growing, businesses that they've started or businesses that they've sold. So typically they're higher net worth and they're trying to figure out what to do with their money. They're probably a little bit afraid of inflation, they're probably a little bit concerned about where to invest and they're obviously looking at real estate as one component. Somebody that's trying to, to do the right things both on the personal side and on the financial side. So some of the experiences that members can expect to get out of the Collective are certainly the network and I think that's always super powerful. I've been involved in groups like this before like EO and ypo, the Entrepreneurs Organization, and ypo, which is Young President's Organization, which is kind of a peer to peer network. And I that's what I envisioned and I think people going to certainly get that out of there. They're going to have lifelong friends for sure from this and they're going to meet people at every single event. But also we're going to have fun. So as an example, things like race car driving and doing all kinds of really cool things and meeting celebrities and things like that and fashion shows are going to be part of it. So it's kind of a how do we have fun and learn together? And we're going to have that at each and every event. So thanks for watching. If you guys are interested, there's a link below you can click on. It'll take you right to the website which has a load of information on exactly what the Collective is, where the next events are, and what exactly you'll be getting if you become a member. Thanks for watching.

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