Rob Gardner | Hedge Fund Manager Talks Who Controls The Worlds Money

Rob, what is it like managing £150 billion or dollars of other people's money?

It's a great question. And it'd be easy to be crushed by the weight of it. And I think it's less the amount and it's more that it's 900,000 clients.

Wow.

So 900,000 people.

Nearly a million clients.

Nearly a million clients from babies right the way through to centenarians, so. And almost 55, 45 male, female, up and down the UK. So 25, 35 year olds, 35, 45, mostly elder people because they tend to have more money. But yeah, I think when markets are volatile or when they're not doing well, you obviously get that comeback very, very quickly. What's happening with my money? A lot of fear and panic and yeah, you have to have conviction that you know you're doing the right thing and investing people's money the right way. Otherwise it's just overwhelming.

And when there's pressure and stress in the markets or on you, does that weight feel heavier? When there's nearly a million people and hundreds of billions on the line, you.

Know what it's heaviest is when. So we get intermediated through our financial advisors, so we've got four and a half thousand, so it sort of tends to come up. You know, the client will have a difficult conversation with their financial advisor, they'll then call me, they're trying to pacify them and when they can't, they'll typically want to have a conversation with me. And so the toughest conversations are when, like this, when you're speaking with an individual. So in a way there's a bit of a stadium effect where you can't see the faces of 900,000 people. But if, let's say in the middle of lockdown in 2020, I had to jump on a Zoom call with, I remember very vividly a conversation with this gentleman who must have been in his 80s, and his son, who was probably our age, 25, a little bit older. But yeah, it's conversations like that where you're. Because it's really visceral, you're in the room or you were on Zoom and you're like, this is someone's money, this is someone's livelihood. Whereas it's kind of easy to sort of step back, look at your dashboard, look at the data, see how clients are performing on average, and know that you, overall, you're doing a good job. But it's not until you're in the room with a client who's, who's upset, who is frustrated. You know, all of the emotions that you get when you're investing. Right.

Do you do anything differently strategically, tactically, or emotionally when you're investing other people's money and your own money?

No, I try and be remarkably consistent. And I think. And I've always tried to kind of eat my own cooking, so to speak. So I'm a big believer in having a clear set of beliefs to kind of guide you on where you're going. So personally, I've always had a set of investment beliefs and when money always had this set of investment beliefs because it's like an anchor that when you get blown off course, you can pull back. I actually think it's easier when you're managing other people's money because you're more professional. You force yourself to be in guardrails and principles that I think stop you from doing stupid stuff. And also, you're never making decisions on your own. You're making. You set up committees. We're really into what's called pre mortems and post mortems. So if you've ever read Matthew side's Black Box, thinking every investor been on the show, has he? I mean, legend. So every decision that we would make would have a post mortem. And one of the things that I put in place was this idea that every decision would have a pre. Mortem. So what are the risks and what go wrong? Which is probably not something that I'm as disciplined about when making my own investment decisions as I would be with running other people. And I think, you know, the key thing I like to tell the story of Ulysses and the Sirens, because when it comes to investing, it's easy to get pulled in onto the rocks by the Sirens. So just to sort of tell the story again, you know, Ulysses was traveling home to see his wife Penelope. And he'd heard this story of these beautiful creatures, the Sirens, with these kind of enchanting voices and beauty that could only be imagined. And he spoke to Circe, a sorceress, a powerful sorceress. And she said, look, if you want to see them, you need to know, because they will shipwreck you and kill all your men. But here's a tip. And so what he did is as he approached the island and the Sirens, he got his men to put beeswax in their ears. They blindfolded themselves. And then he got his men to tie into the mosque, and he sailed up and he got to see and hear the Sirens. And every sinew of his body wanted to get free and Jump in the water. And then he sailed home and of course back home to see Penelope, his wife. But the point is, is that markets are like the sirens and you just have to scan the news. The news is just constantly. Markets are down, billions wiped out. And even right now you would think that market's in a terrible place, but they're still harder than they were just two or three years ago. And so if you've invested your money for the last decade, you are way better off than had you not invested. And that is the point about investing. It is risky. And that risk is to shake people off. And people make poor decisions and they get whipsawed. And I've heard you talk about this before. And so how do you maintain that discipline? The hardest part in my job is you've got 900,000 people who feel all of those emotions that then gets siphoned up to four and a half thousand. You then, then get emotional, then they're sort of taking it on you. So you almost become like a psychotherapist of money when you're just trying to sort of keep, keep people calm and not, and not panic. And as I say, that's why those pre mortems and post mortems give you. And also don't expect to get every decision right. That's the other thing. I mean, it's, for me, it's about how do you compound good decision making?

Yeah, you said billions are wiped out. People always wonder, you know, when there's recessions, depressions and big drops in markets, and Tesla $100 billion down on their valuation, Amazon a trillion dollar down on their valuation, where does the money go? Because surely it doesn't just evaporate into the ether. Where does all this money go?

Yeah, it's a, it's a good question. I mean, the thing is, is that shares, they're all in effect like currencies, so you're exchanging cash for shares. So you could, you could think of your money as either in pounds or dollars, or you could think your money in an s and P500, or you could think about your money in bricks and mortar. And all that's happening is these currencies are fluctuating in value relative to, relative to each other. So when you're talking about share prices, in effect, it hasn't got any on it anywhere. The only money that gets lost or made is when a company goes bankrupt or when their profit, you know, a company used to make 200 billion of profit and now they only make 100 billion. I think that the thing that people forget is what you're trying to tap into is kind of economic growth. So if you look, if you zoomed out and you could see the whole of the planet and look at GDP growth over the last 120 years, it's actually been remarkably consistent, sort of, let's say 3 to 4% a year average over the world, very different from country to country and over different periods. Then you've got, and that is just the sum, it's the average of all of those companies over time. The problem is that a company has three parts. It has revenues, it has costs, and it has the differential between that's profit. And when you're investing over the long term, you're trying to capture that profit. What happens is when growth slows down, the revenues fall, the cost might stay the same or might even go higher because of inflation. And that profit can collapse very quickly. So that profit number is very volatile. And then what happens is that when you invest in shares, the valuation of a company is that profit multiplied by, by a multiple. And when things are good, that multiple is big. And when things are small, that multiple is small.

So actually the valuation isn't real money. No, real money when it's sold or bust.

Yeah. What's changed is the perception of the multiple that's being applied to that business. Now there are two things that are happening. Don't get me wrong. The profits realized earnings is the language people talk about has been depressed but will come back. I don't know when it will come back, but it will come back. That has always been the history. It shrinks and grows. What changes is the multiple. And the key to investing is knowing that over the long time there'll be good times. And arguably you might have said at 3 trillion that was the wrong price. But you might also say the truth is somewhere in between the two. So you only really lose money when you're invested in businesses that go bankrupt.

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So you said earlier you have a set of beliefs and principles which you live by investing yours and other people's money. What are they?

Well, first thing, what are you trying to, to, to achieve? And so in, in very simplistic terms for me, I've got a rough goal is I want to double my money every 10 years. That's about 7% return. So if I, you know, compounded, 7% compounded. So if I could double my money every 10 years, that's great because for me I want to be completely financially free. So 55 doesn't mean I'm going to stop work or not, but I want the freedom to say I don't need to work. So in the back of my head I have a number where I know how much I want for the rest of my life. And roughly speaking, you know, let's say whatever number that is, that might be £50,000, it might be £100,000. Multiply that by 30. That's how much money you Need. And you can basically live off that.

And not defact inflation into that.

That's allowing for inflation as well. So that's basically living off about 3% plus inflation for the rest of your life. So that's my goal. For my mum and dad, it's slightly different. They're retired now, they can't earn any more money, so they have a pot of money. They don't know how long they're going to live and they don't know what inflation is going to be. So they've got a very different problem. Let's say they might need 35 grand a year between them to live off for the rest of their life. So how do they invest that? So the strategy you build for my mum and dad in retirement is very different from the strategy you build build for me. I want to take a lot more risk because I know I'm not going to touch that money. Whereas my parents, you might want to change that risk. And arguably for my daughters, who I both started pension license for, from birth, you want to take maximum risk because they're not going to touch that money. The second thing is strategic asset allocation, which is basically saying, don't put all your eggs in one basket. So a lot of people have historically invested in UK equities. The UK only makes up 4% of world equity markets. Microsoft's market cap, Apple's market cap, bigger than the entire UK.

Wow.

In fact, if you took AirPods as a standalone company, it would be the largest company in the UK on the FTSE 100. So if you just spun off AirPods.

That'S because of me having to buy a pair every two weeks.

Exactly.

That's the best business model ever.

The best business model. You drop them in the shower.

That's the last ten. Ten pairs of them.

But, yeah, I mean, you know, that is a brilliant. A brilliant business. So you need to make sure you have the right mixture of equities, bonds, properties. For some people, you might want to extend that to crypto defi. So depending on where you want to sit at. But you want to spread that, mate. Second thing is, you want to have different investment styles. So in equities, growth companies are like Tesla. So what are the companies that are growing very, very quickly and going to transform the world?

Well, they were, they were.

But, you know, these things come in cycles, Right. Then you have value businesses, which are typically businesses where their share price doesn't reflect the underlying fundamentals. That's really Warren Buffett's approach. And then you have what's Called quality businesses in between. A quality business has what again, someone like Warren Buffett would call economic moat. They say this business has some stuff around it that means it will be successful a very long period of time. Apple is both a growth company and a quality business. Disney is a quality business. It's got an economic moat about it that's kind of hard to break through. And so you want to have a balance of those. Historically in the UK, if you go back 20 years, people were very focused on value investing and missed out on all the growth. They were underweight. The Teslas and the Apples and the Amazon. So again, don't, don't put all your eggs in one basket. Have a mixture. Third thing, number one rule is diversification. Have winners and everyone wants to fit the winners. You've been at the partnership, people like say, yeah, I bought Tesla here and I did that. The trick to creating long term and I think you can outperform 7%. So actually it's about a reasonable expectation is diversification. I happen to believe in active ownership. That doesn't necessarily. You mean to have active management, but you want people who are engaging with those businesses, making them better businesses increasingly now in this world that we live in, thinking about how they can be more sustainable and responsible.

So you wouldn't invest in tobacco companies, for example. Warren Buffett does, doesn't he?

Probably not. I mean, you've got to ask the question is how are they going to be sustainable 15, 20 years from now? Again, so all of this is investing. So I should have right back at the beginning, principle number one is decades, not days. So when thinking about investing all of this stuff, I'm thinking about owning this stuff for 10 years, not for a handful of days. And people confuse investing with speculating. And I get.

Or gambling.

Or gambling. And I know you talk about this, but so yeah, in those number one objectives, decades, not days. And actually when it changes what you.

Look at and what you buy, doesn't it? When you think like that?

Yeah, because then you're not. So you could, you know, oil and gas companies, tobacco companies, in the short term, you know, will make a lot of profit. And you can make that. And from a trading perspective, makes sense, I think, you know, from a long term perspective you go, you someone who's basically making a product that kills people, what's the long term sustainable advantage to that of that business? Now in the UK, smoking people who smoke between 2000 and now has just been a long term decline. The only reason that's been offset is emerging markets. Are smoking more. But one might assume that that plays out then this idea of disciplined research which is you won't get everything right and that whole idea of pre mortems and post mortems, what could go wrong if I invested in the US what could happen? What could happen to the US dollar if I did this or I did that Then when it does go wrong or when it does go right a post mortem and understand that that's really again back to that decades, not days. That's about how do you just marginal gains improve your decision making. And then one that I have both personally and professionally is that in the long run companies that are sustainable in their revenues and their supply chains will win and good businesses or good business is good business. Now not everyone agrees with that last statement and in a way the tobacco conversation is a good example. Oil and gas, how do you bridge gambling? Gambling again it's hard to argued that that is good business because you're preying on people's. You know, of course you've got like responsible gaming and all the rest. There's nothing inherently wrong with gambling. But then you know, where are people making the money from gambling? They're not making money from people just having a punt on the football every now and again. They're typically making money. Who are the addicts?

Well we had Paul Merson on the show. They'd give him 25,000 pound free bets to get him back in betting.

So yeah, you've got to. I always think you've got to ask yourself the question with the world. If this company didn't exist, would the world miss it? It's quite an interesting question when you start asking yourself that question.

Yeah.

And you don't have to invest in everything. Right. That's the point. Yeah.

Who do you think controls the money in the world? Like there must be a few companies vanguard, I don't know. But who controls the money in the world?

That's good. I mean that has been the big shift over the last 20 years I think or even in let's say since the global financial crisis. I think people probably thought it was the banks but it really has been the rise of the asset managers and really it's the big ones, it's the blackrocks, it's the vanguards, it's the state streets because they control trillions. I mean the kind of asset management industry controls over $100 trillion.

Wow.

Yeah. I mean so. And you started to see that in.

So they have more power than the banks you think?

I think, yeah. They have been. And you've seen a number of people writing about this in the FT and the Times about the rise of how Larry Fink, he's the CEO of BlackRock, is arguably more powerful. Whereas if you'd gone back to 0809, you would have named the CEOs of Goldman Sachs and Merrill lynch, or now bank of America, Merrill Lynch. They're still very powerful. But it's these large global asset managers that, I mean, just to put it in context, just in the uk, I think legal and general investment management owns two and a half percent of every single equity in the UK on average. Yeah.

And do you think those big powerhouses are a net benefit to society?

Yeah, look, I mean, at the end of the day, for economies to grow, we need businesses. And I think businesses have two purposes. They should be, personally, I think they should be solving problems first. And the businesses that solve problems, I think will be the most successful in the long run. And second of all, they need to be make money. And that is a discipline, that is a skill, managing your revenues and your costs and managing your profit. Some businesses start at the second and then try and figure out what problem they're solving. But those businesses need capital. At the other end of the spectrum, people need to save and invest for their future. And so the asset management industry provides an important role in deploying that capital. For people like me, probably most of the listeners on this table who are saving and investing for their future, so taking pounds and dollars and putting it into shares, and there's companies that need that capital to grow. So I think they perform as an industry, an incredibly important role in the supply and management and efficient allocation of capital. That doesn't mean they've always allocated it efficiently. And I would say right now the world's a bit discombobulated on what is that efficient allocation of capital and what.

Does it look like if you owned all the money in the world, you were BlackRock Vanguard and the big central banks, what would you do differently with the way you run the monetary system than the current system is?

Yeah, I mean, again, this is just a personal belief, which is I think some of these industries, and I think, you know, blackrock's caught between it, where it's trying to not upset anyone and that's always a tricky place. So just to bring that alive, the Texas pension funds are all saying if you divest some oil and gas companies and all the rest will fire you. You then got the California pension funds and saying if you invest in oil and gas companies and don't start investing in all the stuff that will move us to a more sustainable and healthy planet, we'll fire you. And blackrock's trying to keep both of those clients happy. I think you've got to pick a side. I personally pick the side of we need to move fast. I mean I was, I was in Egypt just two weeks ago for, for, for COP27. I was in Glasgow last year. We are on a pathway to a really unhealthy planet and you know, we kind of need to end our drug addiction on oil and gas. And the crazy thing is the technology exists to get all the energy we need. So this is not about, this is not anti capitalist. I think we can be really capitalist. But in a world where enough energy hits our planet in just a matter of minutes to power all of our energy needs. The world in economic growth needs cheap energy. And that cheap energy can come from other places. We just need to mobilize that capital faster.

So if that tech exists, why isn't it being used?

Well that's my point. There isn't an efficient allocation of capital. There's a company called X Links, Octopus Ventures have invested in it. They want to build a cable from Morocco to the UK that would provide 7% of our energy needs. And yet our government hasn't found a way to unlock that. And people go, well renewable doesn't work because you don't have energy at night. This is the genius thing. So it's solar panels during the day and at night it's very windy. So what happens? Because it's the desert, it cools down so you end up with this onshore offshore breeze effect. So you have wind power at night and you have solar during the day. Again, Eddie Trull back five, six years ago had the similar idea to put a cable between us and ICELAND. GEOTHERMAL. In 2018 there was a plan to build basically a tidal barrage across the River Severn near Bristol that would have provided again 7% of our energy needs. Again, every day the tide goes up and down. So you solve the storage problem so that in this space right now there is very inefficient allocation of capital. And so that needs to break down. And the thing that I get excited about is the technology exists to do just so many cool things. I mean there's business I came across which is growing a type of seagrass you can feed to cattle that reduces their methane. So you know, we're talking about like cutting out meat and all the rest. And some people go, well I don't Want to give up meat? I like meat. But I'm guessing if there was a way to do that without destroying the planet, that sounds pretty good. How do we mobilize that capital fast enough?

So there's this theory about how central banks work and the economy in general, where they rely on the populace being financially uneducated so that they can convince them to do things like save money even though there's a negative return on savings most of the time. And then the central banks can lend and invest that money out, get it off their balance sheet. I think the central banks know that cash is a liability, yet the prevailing narrative is that cash is king. And then once your money is in the savings account and they've factorized it by a multiplier of 10 out into the markets and they're profiting on your cash and your cash is going down in value and then you're stuck. So you need to borrow money from them in the form of mortgages and loans. And then you're paying hundreds of thousands in your life in interest and you're again dependent on them. And then you've got the governments who are supposed to be decentralized from central banks, but I'm not sure that they are. Who then have you employed in the tax system and they take nearly half of your money your whole life or obviously it goes up and down of how much that is. Is that a conspiracy theory or is there some truth in that theory of how central banks work?

Well, so again, take the taxation point aside because I think taxation is a good thing. There's a separate question about what the.

Right, let's cover them both, then let's.

Do the central bank thing. You're right. People don't realize that a pound note is an iou and you've got to remember the debt. Yeah, you've got to. I work near the bank of England, I walk past it every day and there's no gold in the bank of England. So money used to be shells, then it used to be money made of gold and silver. Then people said, well, people used to shave the coins and so I can't trust that, put gold in the bank. And then you'd issue a currency backed by that. And then we now have a system that someone has a note, a 20 pound note that is just a promise to pay you, but there's nothing there if you want to, you know, if you want to get it. There's no gold in the bank of England. And what's been happening is central banks since 20089 of the global financial crisis and then on steroids in Covid basically realized they could print money. And the challenge printing money is that is deflating the value of your cash. If you've got your money in cash, it is worth a lot less. And so I was at uni in the late 90s, early 2000s. I remember you could go out on a night out with a tenor. I remember when I started, you know, just about 20 years ago, you could buy a pint of beer for like £2, maybe £2.50 in London. I mean you can't even buy a pint of beer for five quid in London. Maybe if you had two Wetherspoons, but you know, so your, your money even before the cost of living crisis and inflation of the last 12 months is halving every 20 years. And Central banks knew that they could issue this money and borrow money below the rate of inflation. And that's called basically the government gets to borrow at negative interest rates because it knows that it will inflate away its debt lower than that interest rates. And it's kind of got addicted to that. I don't think it's a conspiracy theory. I think it was probably the right thing to do in 0809. I think probably everyone got a little bit punch drunk on it during COVID.

And hey, this is easy modern monetary policy.

And that's probably why we, you know, it's one of the reasons contributing to this kind of inflation. There are supply side issues to do with COVID and lockdown, but there was a knock on effect to this, what felt like for free.

What do you think about just jumping in the theory that, you know, the mass printing of money is a way to backdoor reduce their debt instead of actually paying it off?

No, that is. Sorry, that is exactly. That's called financial repression. That you either pay it back or you default or you do that which basically goes over 20 years. I know it's half as much and my cost of interest is. But so if you run what's called negative real interest rates, which is what I'm talking about. So if you've got before all this inflation running at 3 or 4% and you're borrowing money at 0.5, you're laughing.

Yeah.

The flip side, if you feel financially confident and you want to buy assets, is you should be using debt to buy assets.

So that is getting wiped off by inflation.

Yeah. So I disagree on the mortgages. I don't think mortgages are bad. If you're buying an asset that's going up in value and I've got a rate of interest that's below the rate of inflation. And if I think it's back to decades, not days, if I think the value of my home will grow more over the next 10 years than the interest rate, why wouldn't, why wouldn't you do that?

Why wouldn't you get taught that though?

No, no. Why. So that's a separate. And we'll come to that. We'll come to that. You know, that's something I'm passionate about. So is it a conspiracy? No. Have they told people that to keep your money in cash Now I think they want to keep people spending. So if you look at savings rates, savings rates have been on a long term annual decline. Right. So if anything, we want. Countries and governments want people to spend. The. The issue is no one tells everyone. It's like right now, take the budget. What people don't realize is when they freeze the tax limit, so 12 and a half grand tax free and the different thresholds. Because people don't really understand inflation. They don't really. So no one's actually pushed the tax up. What they've done is they've changed the. They're not changing the thresholds. They should be increasing the thresholds with inflation stamp duty.

They didn't put that up for decades. Which is essentially putting it up because of inflation.

Yeah. So these are these sort of conspiracy theory or. But it's just because people don't know it. So if I turn around and say I'm going to increase it. Outrage. But people don't really think and go, well, actually, you know, 10 years ago I was earning 50 grand and now I'm earning 75 grand. But the thresholds haven't changed and I'm paying more tax than I did 10 years ago. It just creeps up on people and people don't really realize and understand that. And of course there'll be a bunch of people who write about it when there's a budget. But who reads and understands that anyway? So that is the. So central banks understand financial repression, which is run. Keep interest rates lower than inflation. And that's the best way you can keep basically borrowing money and it's cheaper to do it. The reason why the government got in trouble a few weeks ago is that that only works if you can borrow money. And basically, you know, when we had the.

You're talking about Liz Truss, are you?

Yeah, when the pound, you know, almost reached one with the dollar guilt rate shot up and then suddenly what's called the Debt Management Office were like, ah, we, we can't borrow money. So countries are no different from individuals. If you lose your credibility to borrow money, then you can get yourself in difficulty.

And what happens if the pound or the dollar loses its credibility?

Oh, well, that was. You end up in a horrible. And this is the.

This is coming, is it not?

Well, arguably this is why Jeremy Hunt and all the rest are trying to stabilize things. But you can end up in this horrible death trap where the pound weakens against the dollar. You're forced to push up interest rates because of inflation and ras and you.

Want to attract foreign investment, giving it a good return.

And inflation is going up because the cost of buying stuff in dollars or euros is going up.

So you could have this shitstorm effect of high inflation and high interest rates for a short time.

Yeah. Which linking back to my other point is that when you invest in US equities, invest in US equities and don't hedge the currency. So some people sometimes invest in overseas equities and try and hedge it back to pounds.

Right.

But you want to have. The other reason for investing around the world isn't just that you want to have diversification, but you also effectively then get exposed to a basket of currencies rather than having all your money in pounds. So if you're a UK investor and you've been invested in US dollars and let's say the market's down 20% actually in pound amount, you're not down that much because the pounds we can so much. So you've made money on your dollar exposure. Yeah. People won't have realized. Yeah.

So we'll come to the tax part in a moment. I'm torn on this. Part of me thinks the central banks don't necessarily have to be completely open about how they run and operate because you might have a smart investing algorithm that you built up your whole life and you don't have to share that. Why should you have to share that? So is it that the government's and central bank's responsibility for us to really understand how the economy works and how they make money? Part of me thinks, well, no, but then part of me thinks that maybe some of the education, certainly in schools and the financial education is being repressed. And so therefore, to a certain degree we are a slave to this system. You know, you're taught work hard, save your money, get a job, you know, pay your taxes, be a good citizen. And then when they tell you to stay at home for a good few months because they mandated that, you know, you're supposed to stand in line and do what you're told. But actually, really successful entrepreneurs are slightly rebellious and contrarian. And you don't make big returns and grow big companies by, you know, being a drone or a clone in. In that system.

So, I mean, there are a couple of things. I mean, I think countries need to be open and transparent. So I would be open and transparent. I think Malcolm Gladwell always talked about paying tax. And in the UK and the US we pay tax because I trust that you're paying the rent.

Just quick one, if they were all open and transparent, no one would save money in the banks. It's one of the worst places to put your money, isn't it?

Well, no, but paying taxes isn't saving your money. That's just like.

No, no, that's. But you said be open and transparent.

So I was winning on from a taxation perspective, not the banks. Banks are private institutions. I think governments, we have to trust them, right? Because if we don't trust them, what are we doing?

We have to trust them.

Do we have to live, you know, we have to live somewhere. We've got roads, we've got schools. So there's an accountability of knowing they tax as much money and they're using it. And then you can say, well, how much are you spending on military defense? How much are you spending on education? How much are you spending on hospitals and all the rest? And there's a choice, right? We can, if you don't like it, move to Sweden. If you don't like it, move to Singapore. If you don't like it, move to Dubai, don't pay any taxes that it's not like people don't move. I'm sure there are people listening on this podcast who have made that move, who moved to Dubai, who've moved to Singapore. Either pay no taxes, pay 15% taxes, but there are pros and cons with every system. And so that's what I'm meaning about being from a government perspective, be open and transparent. This is the problem in Greece is that no one knows if you're paying taxes or not. And at least in the US and the uk, everyone trusts that individuals are paying the right tax. And then it's. How does that.

How do you mean we trust that we're paying the right tax in the uk?

Well, because if you're not paying tax, they'll come after you.

Oh, so you mean everyone trusts that paying some tax is the right thing?

Well, at a base level, I trust that Pretty much, let's call it 99% of all adults in the UK are paying the right level of tax. Of course there'll be people and the same in the us. There are other countries in the world where no one is paying the right.

Tax and it's all because they're not. Because they're tax evasion.

Yeah, yeah. It's not police, it's not held to account and all the rest. It's not that people don't try and do that in the uk, but it does get clamped down and people, an HMRC will come after you.

But that 20%, now I know that's not a tax you pay when you sell products, but it's a tax you pay when you buy products. Corporation tax up from 19 to 25%. Higher rate of income tax, 45% forced to pay state pension contributions, national insurance, too fucking much. Okay, but then, I mean that's 55% and then you've got what you buy where you'd sometimes on fuel, you're double and triple taxed often. And so you could, like, if you actually looked at it, you could be paying 65% of all your earning and spending and tax, I mean that's at.

The bottom end of the Laffer curve.

Not in the middle, but that's it. So I don't agree with our taxation policy, but you know, you and I could get up and move, move to Dubai, move to Singapore, that's move to Hong Kong.

So do you think it's too much? First of all?

Yeah, so I'm with you on the left. I would have a lower, I think tax is good. So I'm definitely not in the no tax. But I agree that if you set tax too high, there is ultimately an incentive to move abroad and we don't want or to evade or to evade. I think it's hard to evade in the UK, it's hard to evade in the US. You will get caught eventually. All the US's worst gangsters and people never got done for the crime they did. They got done for tax evasion. You forget Al Capone, all these guys, it was tax, not the underlying crimes that they get done for.

So.

The thing about Ireland is it very successfully post 0809 made itself a lower tax haven for the super rich.

Small business owners couldn't relocate to Ireland and run their companies there.

No, they can't. No. But Amazon, yeah, Amazon, Facebook, they've all set up, all the big global tech companies, all have their European headquarters in Dublin and that's been A very successful taxation policy by Ireland to attract foreign direct investment. And that is a choice. And I think what people forget is that half of the economy is SMEs, so it's not the Tesco's and the.

HSBCs, the small businesses.

And I think part of the challenge, I think what is good is that Jeremy Hunt actually was an entrepreneur, actually did build a business and sold a business. So at least he understands half of it. Whereas I think a lot of politicians have been career politicians and don't know what it is to build a business, what it is to have hustle, muscle, what it is to fight to get clients, what it is to manage your costs, what it is to pay people, to fire people, to hire people. Being an entrepreneur, being a business owner is hard.

So why don't the government give the SMEs a bit more relief and support and just take an extra 5% off the super rich in the big corporations? Surely that is a great way to fire up the economy.

Yeah, look, and I think that's, you know, if every time, you know, Jeremy Hunt talks about trying to be, you know, how do we be more sickle and valley, you know, we're sat on so much intellectual property with Oxford University, Cambridge, lse, King's College, we've got some, we've got some of the best universities in the world. Why aren't we more like Silicon Valley? We haven't been, we're not a million miles away from Old Street Silicon Roundabout. And I mean UK is more fintech and more techie than the rest of Europe, which is, hey, great, we're better than the rest of Europe, but compared to the us we are nowhere. So I do think the UK is not firing on all cylinders when it comes to unlocking the talent that we have, unlocking the intellectual capital and incentivizing business owners. And one of my frustrations, and I've built two businesses and I'm about to start a third, is I think our EIS and SEIS system, which is a way to allow you to invest in early stage investors and get good. I actually think that's quite a good tax system. But the mechanism isn't in place in the UK to build unicorns. How are UK going to build the next Google, the next Tesla, the next Facebook? I just can't, under the current framework, I can't see that we're set up to do that. And that seems to me that's a real shame.

This recent budget should warn you that your pension is not safe and secure and they're coming for your inheritance. Do you even know how much is in your pension or where your pension is invested? Add to this the recent inheritance tax grab on your pensions and the risk of a market crash. You probably didn't know this, and I didn't until recently, but physical gold can be added to your pension pot. Gold is inheritance tax free and has grown 700% in the last 20 years. You probably know from my content I'm investing heavily in silver and gold, and that's why I've partnered with direct bullion. Myself and Nigel Farage are brand ambassadors, and direct bullion can help you with gold to protect and grow your pension. I buy my gold and silver from direct bullion, and I don't earn any money on any purchases of gold or silver if you buy direct from direct bullion. So if you go to robmore.directbullion.com you can get a great price on your silver and gold and you can get the pension gold investing guide completely for free. As you know, I don't do many strategic partnerships, and when I do, I do them with people who are credible, who've been doing it a long time, who invest in things that I invest into. And gold and silver's going wild. I'm investing heavily in gold and silver, and I recommend you check out robmore.directbullion.com and is.

Is. Are you talking infrastructure or are you talking.

It's taxation? It's back to your point about getting the tax right. It's about setting the incentives.

Not enough incentives, having the capital. It's removing friction, giving support.

Because what happens is most entrepreneurs get to a point, they turn their business over, get it to like 50 million quid and sell it to someone else.

Yeah, you used to have good entrepreneurs relief, which you don't have anymore.

That's intense. Yeah, yeah, exactly. Used to be 10 million quid, and that's now one.

Yeah, it's 10% of one.

So, you know, you work hard, you build your business and say, well, okay, well, I might as well just. I'll stop there. What's my incentive to keep going? What's my incentive to take risk? A good friend of mine who used to work for me at Reddington, a company I founded, he left to start a business called Save with Oinky, which is one of these automotive saving businesses. And then he pivoted into the whole defi space. So he built a business called Moonpay and has since raised $3.4 billion. He's like 29. He's a billionaire living in the US and I said, oh, what's. And he's built another business called Hypermint. And I said, what's the difference between the UK and the us? He says, I worked with some of the smartest people I've ever worked with in the uk. The difference is just the risk appetite.

This recent budget should warn you that your pension is not safe and secure and they're coming for your inheritance. Do you even know how much is in your pension or where your pension is invested? Add to this the recent inheritance tax grab on your pensions and the risk of a market crash. You probably didn't know this and I didn't until recently, but physical gold can be added to your pension pot. Gold is inheritance tax free and has grown 700% in the last 420 years. You probably know from my content I'm investing heavily in silver and gold and that's why I've partnered with Direct Bullion. Myself and Nigel Farage are brand ambassadors and direct bullion can help you with gold to protect and grow your pension. I buy my gold and silver from direct Bullion and I don't earn any money on any purchases of gold or silver if you buy direct from Direct Bullion. So if you go to robmore.directbullion.com you can get a great price on your silver and gold and you can get the Pension Gold Investing guide completely for free. As you know, I don't do many strategic partnerships and when I do, I do them with people who are credible, who've been doing it a long time, who invest in things that I invest in too. And gold and silver's going wild. I'm investing heavily in gold and silver and I recommend you check out robmore.directbullion.com.

Appetite to take risk in the US is just so different and more supportive. The bankruptcy laws in the US are way more supportive than they are in the uk. It's still seen as a bit shameful to kind of start a business and go bankrupt in the uk, whereas, you know, in the US it's almost like a badger honor.

Yeah, it is. Sometimes you're more investable when you've gone bust a couple of times.

Exactly. When you know what it's like to do it. And so there's no, as I said, there's no shame. So for me it's a cultural shift, it's a taxation point and it's an incentivization point and it recognizes. But the problem is you need to take a long term view. Everyone Talks about Tesla now, people Forget it started 15, 16 years ago. It almost went bust in 2013. People don't realize that SpaceX was started 20 years ago. Back to decades, not days. People want quick results and you don't get this idea that you have overnight success doesn't exist. And so we just don't have that long term compounding mindset that says how do we set the conditions to create the entrepreneurs of the future? Not just for the kind of capital creation but because actually that creates jobs, that creates prosperity, that, you know there are a whole load of other benefits that go with that. And actually I think that's why tax is good, because creating more jobs and people paying tax is a good thing. So it actually benefits.

Yeah, I don't think many or any, even hardcore capitalists would say that tax is unfair because if you go to Dubai you pay twice the price of everything. So one of the downsides of paying lower tax will be higher cost of living. I just think people want to feel like it's fair and it's transparent. You talked about transparency. I'm not sure our UK tax code, anyone understands it. My accountant told me it's thousands of pages long. Why couldn't we just have a flat rate of tax? Because then a big portion of the civil servants public sector wouldn't be needed. So how do we have radical reform? What is a way to fire up the UK economy again? Because I feel like our government only know how to generate revenue one way tax. The one person who showed us a glimmer of desire to fire up the economy through growth was Liz Truss and she lasted 45 days. And now like you said, Jeremy Hunt's coming in and basically saying we're cutting spending and we're increasing taxes. And how's that going to fire up the economy? All that's going to do is stop their debt rot.

Yeah, I mean this trust didn't lose her job because she was trying to far outgrow it. She lost it because she put in place a will immunize everyone from the price of oil and gas. They created a huge liability and didn't explain to financial markets how that was funded. So it wasn't this kind of idea of let's grow our revenue. I mean that's. You're right. If you think of the UK as a company, you grow the revenues faster than your costs or you cut your costs. And what she and Kwasi Kontang were trying to do was say, okay, let's grow our revenues faster. At the same time she Said, I'm going to kind of immunize everyone from the energy crisis and cap your stuff out. And everyone said, how are you going to fund that? And that was what kind of caught her off guard. The guilt market and also the comms on it, the messaging was, I think the underlying strategy was okay, it was good. But the pace at which he rolled it out, the comms could have been finessed. So we're now going into the other one, which is more the CFO thing, which is let's cut costs, let's regain credibility. I do, and maybe I'm being overly helpful. I do think Jeremy Hunt does, because he wasn't, as I say, he was an entrepreneur, does get that this is probably a short term stabilized credibility with financial markets. The pound is now back up at like 118. I mean it was down at like 105. So that's a good thing. Gilt rates have come back down. Gilt rates are below U.S. treasury yields. The thing is, do we stay like that or do we go, okay, well now how do we bring back some of that growth agenda? The UK is not on a tax perspective. It's not transparent because it's trying to hide people. It's transparent because it's not transparent because it's so bloody complex, as you say. It's just that like no one, I mean I kind of work in, well, management. I should understand it, but I have to get an accountant and a financial advisor to help. You know, I understand the basic headline ones and how to make best use of it.

But companies like us have to hire a proportion of our staff just to work for the government, just to try and figure out how to pay all the tax. It's not there. It's friction. Where's the speed?

No, and that's where somewhere like Singapore has just has a flat rate of tax. So flat rate taxation would be a much, a much fairer and transparent system and everyone understands it. Okay, fine. And then you go, okay, we pay that tax and what are we getting? Return. We get roads, we get police, we get hospitals. Okay, that's fair enough.

Yeah. Because in the UK we have a really good legal system. We have pretty good infrastructure. Sometimes we take that stuff for granted.

We do. I mean our legal system, you and I trust that if I'm to, if I buy a house or fit you, if I sell my business, you know, that's not true of many places around the world. So our, you know, English law is not something to take for, to take for granted. The thing is how.

How do you.

Get a politician who can come in and have 20 years and make a.

Well, that's an argument that the political system is not even set up for long enough term view.

It's not. So how do you, how do you put in place? Because the problem is that everyone's like what do we need to do to win the election in 18 months, two years time? So that is your window rather than saying 10, 20 years from now, how do we make the UK succeed? Punch above its weight. We're not going to be the US because we're 60, 70 million people, but for a country of 60, 70 million people, how do we make the UK the economy? It could be, it should be what are the foundations for success and work backwards from that. But none of that long term strategic planning happens. There are none of those investment beliefs. It's all tactics. I mean you asked me at the beginning, I have very little tactical stuff. It's mostly all strategy and I think our politics is the opposite. It's all tactics, it's all hand to mouth and we've been distracted for the last six years with Brexit. I mean Mark Carney said it, when 2016 the UK economy was 90% of the German economy. Today we're 70%. We're going backwards in the economic World Cup. We are not doing very well.

Is a massive crash coming? Is it a recession, is it a depression? What's happening?

No, I mean this is not 0809. That was a big crash.

Do you think this is not as big?

No, what we've had is probably more akin to 2001, 2002. Markets have been in this world where they fall, they bounce, they fall but every time they bounce they don't go back. So you end up with this trend line going lower. Could markets fall another 10% from here? I'm not saying they can't fall further, but earlier we talked about long term GDP growth. We talked about companies that effectively have this leverage position on profit. Actually underlying earnings has been pretty stable and I think that's why I don't think markets will fall out of bed the way they did in 0809. 0809 was bad. Markets fell 50% but the underlying fundamentals of the economy fell through the roof. One of the key measures is employment rates. Unemployment is very low. Companies still have problems with hiring people. It's only been recently that tech companies, the Amazons and Facebook have even talked about letting people go. And it sounds scary when you read them in the headlines. But they're tiny. You know, in the Context of America, 300 million people, tens of thousands is tiny. So if you look around the world, if you look in the UK, unemployment is exceptionally low. In 0809 unemployment went of the roof. And that is the fundamental difference. And the other thing is that we said inflation's partly being caused by all the quantitative reasoning that happened during 2020, 2021. It's partly been because of the supply chain issues around Covid and lockdown.

Surely that's got to have a big impact though.

It's coming off. You just have to look at the cost of shipping. A crate from Shanghai to Los Angeles has just collapsed. It's like fallen 80%. The commodity costs are falling.

So asset prices are definitely starting to drop, aren't they?

Well, no, no, but if inflation falls, equities and asset prices will go up again because all of this has been driven by an inflationary fear and pushing up interest rates. So what happened a few weeks ago was when the US inflation had come off a little bit and people were like well actually if inflation is coming off and we saw the equity markets rebound a little bit, the big question is will inflation keep coming off and therefore the central banks, the Fed, the Bank of England don't need to raise interest rates as much and will markets recover? And as I say, unemployment or employment levels have been incredibly, incredibly resilient. So in my mind, if you go back to it, GDP growth has slowed, companies have taken a dent, multiples have collapsed, but a lot of businesses are still healthy and carrying on. And so to me it feels very different from 0809 and very different from the stock market crash of the 1920s.

Yeah, interesting. Neither you nor I can predict the future and often when we think things in the past have happened that might drive future markets. What we don't take into account is the reactions to current things today which change the variables for the future. But I've never seen secondhand car prices so high. They were unbelievably high I guess because of reduced supply. I mean a 911 Turbo S peaked at 220 plus it's now down to about 165, 170 watches. I'm a big watches fan and some Pateks and Rolex and Richard Milles went double, triple, quadruple on the gray market. Now they're all starting to soften because maybe you've got supply up again or gray market second hand dealers haven't got the leverage anymore. Property. I never thought the lockdown would force prices up because I'd never seen it before. But lockdown forced prices up because there was no supply chain, there was nothing being sold. So property soared in price. And to me that's just, I couldn't call it a bubble because it happened. So it happened. But it's irregular circumstances that aren't normal of a market. Has that not got to create some kind of correction?

Yeah, but I think what you're highlighting is that these things are de correlated from each other. And that goes back to my point about diversification. So if you had money in property, you were making money in property when equity markets were falling. That's why you said what are your beliefs at the beginning? Have a bit in all of these pockets because they will go up and down a lot of it. That multiplier effect is a function of supply and demand. The reason why your luxury cars and your luxury watches was just a supply and demand is that supply and demand.

And then gray market dealers, secondhand, you know, forcing up, it's created by supply and demand, but then they push it up too much.

Yeah, but I'm guessing that that works until people say I'm not buying at this level. So as they were pushing and someone was like, well I'm prepared to pay that price. I'm prepared to pay that price.

And then supply increases again.

And then, and then like you know what, and then, yeah, and then it, and then it collapses. That, that, that always, that always happens. So that is my point that the, the, the quantitative easing does have a knock on effect to all of these things. What we don't understand is that it.

Can push asset prices up.

Yeah, yeah, yeah. Well the problem is is all of this thing is way too complicated and we don't understand the unintended consequences. And I think that was what caused court distrusts and quasi car turn off. They never understood the impact on financial markets. And I'm not sure politicians understand how important it is to control your gilt rates, to have confidence, to issue bonds. The impact on why it's important to have stability in your currency. And when that goes again, you take these things for granted. We take for granted in the UK and we had that credibility and we lost a lot of that in a matter of weeks. There are other countries around the world, emerging market countries that don't have that risk and they don't have that credibility and they over time pay a higher price for that.

So why are the people who are leading our world have no understanding of markets and no understanding of business?

Well, that is a good Yeah, I mean, that is a good challenge. I mean that, you know, one of. If you have a company, you're meant to have good governance and have a board and you should have a diverse board of directors who have complementary but.

Diverse skills and you have to trade solvently.

Yeah. And, and I think, you know, the question is, should our political leaders have, you know, not be career politicians but have people who understand that? I mean, you know, that's regardless of what you think of individuals like Rishi Sunak or Jeremy Hunt, at least they've got previous credibility. Right. He worked at Goldman Sachs. He understands money. He has a background on that. It's not someone who spent 20, 30 years of their life working up through a political system. That's okay if you don't. But how do you introduce smart people around the table to say, is there a better way of doing this? Take energy in the uk. I mean, obviously you've got Octopus, a business that's trying to say there's a better way of doing energy in the uk. Are we saying that we think the way offgem and our electricity is generated and distributed is as efficient as it could be? Just think how much value could be unlocked if you, if you did that better. And that's, you know, obviously Octopus set themselves up to try and disrupt that marketplace and they have disrupted it. But that doesn't mean that, say the market is anywhere near where it could be.

Yeah.

And that must have been everywhere.

Let's do a quick fire round.

Okay.

We like to have a bit of fun towards the end of our episodes. So your challenge, if you are ready to accept, is 15 seconds, ideally 30 seconds max on these answers. What makes a great investor?

One who thinks long term, one who has clear set of beliefs, one who doesn't get overcome by their emotions.

Is crypto or bitcoin going to go to zero?

I don't think so. I think again, don't invest in what you don't understand. I think people have got confused about why people lost money on ftx. Again, good investors do their research and understand stuff. So I think crypto has some fundamental principles and technology that will be really interesting. There's a separate point about centralized versus decentralized, but I think it's here to stay. And this is a good kind of correction. Clear out of bad behaviors and people will take the good stuff and it will be hit to.

Do you think there'll be a central digital currency and if there is a ufan.

Yeah, this is where we disagree. I think there will be and I think actually that will be bring stability to the digital market. Sweden, the uk, fca, all want to regulate this stuff, which is why I was trying to separate out this kind of technology from the centralized versus decentralized belief. I think central banks, for all the reasons about controlling their currency, reducing crime, will. So I think by 2030, most big economies will have a centralized digital currency. It's my prediction.

I'm going to keep my mouth shut.

I knew that was one year.

Does that not part? I wouldn't say wind me up, scare me. Okay, let me ask you this. What's the downside of a central digital currency or downsides?

I mean, we've had centralized currencies for a long time. I actually think it's a better system of what we have today. I think we have both worlds. I think I'm neither. Cats are bad and dogs. They're both good and they both have their strengths and weaknesses. And I think they need to coexist. And I think decentralized currencies will keep the centralized currencies honest. So I think you need both.

Right, so what you're not saying is one central digital currency and no decentralized currency. You're saying currency free market competition, essentially.

Yeah, and I think actually that's different. I think the decentralized gives the competition and held that to account and makes it better. And going back to investing at the beginning, you know, I wouldn't say I'm an expert in this space, but I've invested to have skin in the game, to learn. The main reason I invest is to learn everything I bought. I've lost money technically, but I'm not selling anything. Everything I bought decades, not days. And so for me, there is value in both of them and it will improve the system of money over time. And you want diversification, so it's good.

Quick aside, that raises one point which maybe we see the same on. Many great investors will say, never invest in anything you don't understand. But you've just said you invest to learn. And I sometimes invest to learn. That is, it might take me too long to understand it, but if I've got money in it, I'm now interested in it. So I'm actually investing to learn before I earn. What do you think about that?

So that's my personal philosophy. I think when people say don't invest in what you don't understand, they're talking about people who not done the basics, not done their ISAs and pensions and gone. You know what? Equities is too boring for Me, I'm just all in crypto, have invested, don't really understand proof of stake versus proof of works. Don't actually understand the difference between owning bitcoin on a wallet versus owning it on an exchange.

And just until FTX goes bust, until.

After that and they put all of their money in 100 grand or so forth. And so for me, it's like food. Like doing your pensions and your ISAs. It was like having your veg and your veg. It might be boring, but do that. That doesn't stop you trying new, interesting food on the sideline, but that doesn't become your main diet. So for me, I always take 2 to 3% of my money that I know I can afford to lose.

Yes, risk.

And if it goes to zero, I'm like, fine. Because I treat it as my cost of learning. And so for me, seis investing in startups. Often I invest in startups not because I think they're going to go to the moon, because I know I'm going to learn so much about entrepreneur. They see something I can't see. And by being an early stage investor, I get ringside seat of what they're up to. And it's the same. You know, had I not started investing in digital assets, I wouldn't have understood it. And then my entire narrative would be driven by what other people write about it rather than what I understand about it. So for me, investor learn. But it's about right. Sizing. Yeah.

Great. So in 15 seconds or less, what's the best financial advice you ever remember receiving.

To begin with? And it's probably my mom and dad would be save 20%. But back to the conversation. The worst bit of advice is they weren't good investors. So you've got to invest your money. And so my whole catchphrase is earn it, keep it, grow it. You've got to earn some money. You've got to keep some money, which my mom and dad taught me. But unless you're growing it, unless you're diversifying away from cash, unless you own some equities and property, some other assets, you are going to lose money in the long run.

What's the worst financial advice you ever remember receiving?

Put all your money in, insert crappy digital currency. This thing's going to the moon. You're missing out.

What's the best investment you've ever made?

Getting married.

What's the non politically correct for your wife? Answer.

The best. Starting my own business. Starting Reddington 16 years ago. Starting my other business. Magistrate.

What's the worst investment you've ever made.

I invested in a three time levered fund of hedge funds before 0809. Actually worst. I panicked in 0809. I sold all my stocks and I vowed I'd never make that mistake again. Back to that kind of call of the sirens. I lost my nerve and I sold a lot of stuff and actually if I'd held on, it would have all recovered.

Buy, hold, die.

Yeah.

And what's a great investment right now? I know it's not financial advice, so I'll do that disclaimer for you. But you know, what are you liking right now? One class or one thing that's on the upward?

I mean I think there's going to be a massive shift of capital to this a more sustainable world, whether it's the energy transition. Right now I've decided to start a new business in investing in nature and ecosystem services. So that has to be because I've decided to pivot my entire career to go all in on nature based capital.

Wow.

So let's go there for a minute before I ask the last two. So you're not diversifying your career, you're going all in?

I am, yeah.

Wow. So what's behind this then? What, what belief and what shift has happened to you?

Okay. Actually so the step that links that one of the things I started investing in is carbon credits. So I believe that basically the price of carbon is, is mispriced. So companies that produce a lot of carbon have to buy carbon credits to offset. And I started investing at about $40 a tonne. Last year it reached 80, it's down back at 60, but just a few years ago was $10 or $20. Economists would argue that the price is anywhere between 100 to $200 a tonne and unless we kind of solve climate change could push up to 1000. So started investing about a year ago in what's called EU Emissions trading scheme. In the US you've got this thing called the Californian ccas. But then once you link to that, anything that captures carbon rather than produces carbon has value. So elephants get killed for $40,000 every 15 minutes. But because of the way they live, they capture carbon, they sequester carbon. And alive, those elephants are worth about 1.75 to $2 million now. Whales even more, seagrass, kelp. So right now I'm focused on anything that naturally captures carbon. Seagrass, kelp, gorillas, elephants, whales. And basically how can you create a digital token on a blockchain where you can invest and know that I have a stake in a herd of elephants and it's capturing carbon. And then you can sell those carbon credits to companies that want to offset. So that's what I'm doing in my business. But the investment that started before that was I started investing in the price of carbon and thinking this is structurally, over the next 10 years, going a lot higher. It's going to be volatile, so decades, not days.

Yeah, interesting. If you only had $10,000 or pounds, what would you invest in? Or how would you split it.

Now? Or when I was like 25. I mean, now I've already done all the basics, right. I've done my ISAs, I've done my pensions, I've got global equity.

So you put some in an isa.

I've already. That's what I'm trying to understand.

I see what you mean.

Is this a new. Are you.

You've only got $10,000. You haven't got all of your bases covered of your fundamentals, but you do have your knowledge of investing.

And I'm my early 40s. Yeah, yeah, yeah. I mean, I would put it 100% in globally diversified equities, right. Maybe 90, 90% and then 10% in something a bit interesting or spicier to give me a bit of diversification. But I would make sure that I have good exposure to my Microsofts, my Amazons, my Teslas, my JP Morgan's BMWs. And I would just do that by investing in a fund that tracks the MSCI World Index, which is the 5,000 largest companies in the world.

Right. Something I don't really hear any or many investors talk about are things. So when I was 26, 27, that was at the height of my addiction to consumerism and I didn't understand about investing, and I'd buy retail price clothes and retail price electronics. And that desire for nice things has never really gone. But how I've managed to keep that desire but turn it into an asset, not liability, is I learned about asset classes of things I like. So I have a nice Ferrari Testarossa that's done quite well. I've got a good watch collection and they've all done really well. I buy the right kind of clothes in the private sales that I get invited to, so at least they're not likely to go up, but they won't drop. And there's other things, if you like wine, if you like art, and I don't think that's really talked about, but that makes investing really enjoyable because even though I've Got a sense of humanity thinking about investing in a herd of elephants. I can't enjoy it, but I really fucking enjoy this. What do you think about that?

Yeah, so when I think about asset classes, I think they like a Venn diagram, they have one or all of these three characteristics. They have a utility, they have a cash flow and they have scarcity value. What gives value to all the things you talked about is scarcity value. So I started investing in wine back in 08 09, just putting some money away and buying it on bond. Because I remember being friends with someone a lot older than me who had this amazing wine and getting it out and I said, how can you afford that? He says, because I bought this wine 20, 30 years ago and what happened is I sell half of it and I drink half of it. I'm like, that's being genius. So get drunk for free. Yeah, you know, I started that and probably now you get to start enjoying that, right? Because you need to put it, you're buying on Premier, which means you can't drink it for a long time. So you can only really start to sort of benefit from that now. And a lot of the wine I bought a long time ago is worth a lot of, a lot of money. I don't understand watches and I don't understand cars, but I completely agree with you and I know lots of people who do that. And the other thing about a watch is you can grab it so it's fungible, you can use it, you can use it, you could grab a bunch of watches and go to another country and sell it.

So, and if there is doomsday in the economy, you've got things of value.

So I've always said to my wife, if you want to buy Chanel handbags, I treat them as an asset, not a cost. So because I know every Chanel handbag that we've ever bought has only gone up in value. You know, handbags have gone up like 4 mad. Yeah. And if you can be on the, like you are for the private viewings once, you know the, with all of these brands you need to be buying to do it. Like if you want to buy a nice Porsche, you need to have been buying 10 Porsches. If you've, if you want a nice Rolex, you need to have been a good Rolex customer. So I completely understand that and that's why I see as I say Chanel handbags, it's like a no brainer for me personally much have a Garmin watch. So I'm not that, that doesn't that, doesn't. That doesn't float my. Doesn't float my boat. When, when Ferraris start making electric Ferraris, I will be with you 100 of the way. Until then, it contradicts with my own personal.

Right, yeah, yeah, yeah. No, it's coming though, isn't it?

It's coming. I mean, yeah, the prancing horse. Brilliant. Yeah, yeah, yeah. So I'm very jealous of your.

Yeah, well, when I, my dreams when I was a kid, the Testarossa for me was the car. So. Yeah, there's also, you know, people think that physical materialism is kind of a grotesque. You know, it's, it's not a good way to live. But actually if you buy something that you dreamt about for 25 years and you created an enterprise that does good in the world and your little profit margin helped you buy that car, that's, you know, Patek Philippe, you know, watchmakers probably spent five years of his life making this. So it's not just a material item, is it? It's creating economy, jobs, growth.

Yeah. And at the same time, it is an asset that is fungible. I think people, you talked about consumerism. There's a difference between understanding the stuff that you buy has an asset value or go up in value versus you could easily buy some expensive watches that aren't the right watches or some clothes that aren't and the wrong brands and.

Probably 95% go down.

Same with clothes. And so that again, if follow the advice we were talking about earlier, I just haven't had that interest and haven't gone to pursue it that way. But I, as I say, dabbled a bit in wine. And when it comes to Chanel handbags, there is. I'm fully, fully on board.

Yeah. Lucky wife. This show is called disruptors. What does the word disruptive mean to you?

Change the game, change gear, shift it up. And I see it as a positive. I think some people see disruption as a bad thing. You know, disruptors for me is like the Frosby Flop, 1968 Olympics. People were doing the scissor jump and then some crazy guy came along and jumped over backwards and just changed people's view on how you could do it. Or Roger Bannister breaking the four minute mile. Right. That we have these mental blocks until someone does it. Elon Musk, probably the greatest disruptor of our lives. Right. He's just disrupted everything from back to PayPal, SpaceX. He's taken the cost of putting people and payload into space down by 10x.

Wow.

So NASA would cost them like a billion dollars to put something up into space. He can do it for $100 million because of the way he's built his rockets that can land. I mean, Tesla has disrupted the entire way we think about the transportation industry. He's disrupted batteries, so.

And now watch out, social media.

Yeah.

Now I was very excited when he bought Twitter.

Yeah.

Because I think social media needs disruption now.

Yeah, he will, he will. Definitely. He is definitely. He's disrupting it already.

Yeah, yeah, I know a lot of.

People are saying he's going to destroy it. I think he's doing exactly that. He's disrupting it and he'll, he'll turn it around.

And Rob, what about you? Where can we follow you? What's your vision? If people want to get in touch with you, where can they go? And what are you working on now?

Yeah, so what am I working on right now is rebalance Earth. The idea that you can invest in nature, that you can earn money from protecting nature. That's my goal. That's my vision. I suppose my vision is financial well being in a world worth living in. So I want everyone to understand how to earn money, keep money and grow money to have freedom in the truest sense of freedom. At the same time, I think businesses and money can be a force for good. So that is my vision. And that circular self reinforcing thing, I'm probably more traditional, so LinkedIn is my thing. So LinkedIn Robert Gardner. But I'm also on Twitter and Instagram obertjgardner and Gardner is G A R D N E R Rob, this has been fun.

Thank you very much.

Foreign. This episode was brought to you by Disruptive Media, helping bold entrepreneurs stand out through podcasting video and social content. Visit disruptive media.co.uk to learn more. Foreign. This episode was brought to you by Disruptive Media, helping bold entrepreneurs stand out through podcasting, video and social content. Visit disruptivemedia.co.uk to learn more. It.