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[Applause]

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Hello everyone.

I created as leading indicators of what

countries have their ingredients project

the next 10 years growth rate in the

years best. I think India over the next

10 years has all the ingredients to

really be the strongest growth rate and

and improvement.

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Youngster in India who's 25 years old,

how does he make money? Uh two things

I'd suggest. First, play the game. Find

a game that you love and then be around

people who are pros at playing the game

so you can chat about it. That's a good

path.

How do you view crypto in the world of

Bitcoin or even like stable coin? Tell

me this, if you were to back You got to

give me one question at a time. You're

Okay, let's do Bitcoin and then we'll

say the coin.

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Hi Ray,

uh thank you for doing this. As a trader

myself, I've been trading now a long

time about 21 years. I think there will

be a lot I can learn from you and many

others back home in India like me can

also learn from you.

If I can contextualize the audience we

are talking to today,

they are young Indian

wannabe entrepreneurs,

uh investors, wannabe traders, people

who want to make a living in the stock

markets.

I would say between the ages of 18 and

30.

Wonderful.

That's that's exactly the the group that

I would like to speak to at this stage

of my life because I've learned a lot

and then I just want to pass what I've

learned along to those people. So thank

you for allowing me to do that. No,

thank you for doing this.

Everybody knows you, but

if we could

go through like the big events of your

life and very briefly just to set

context again,

could you tell us how you look at your

life from the very beginning, from when

you were younger up until today?

Okay.

Um

my dad was a jazz musician.

My mom

uh was a sort of stay-at-home mom.

Um

I was raised

and um

I didn't have any brothers or sisters.

Um

it was a loving family.

Um it was um

not poor, not

it was lower middle class.

Um I

did jobs

when I was young.

Uh I one of those jobs was caddying for

at at a golf course.

And because I caddied at a golf course

at the time when there was a stock

market boom,

the people I caddied with I would have

conversations with and I took the money

I earned, $6 a bag, I carried two bags,

$12 for a round.

When I got $50, I would put it in the

stock market.

And so I started um playing around in

the stock market much like you're

describing our audience does.

And um the first stock I bought

I bought only because it was the only

company I ever heard of that was selling

for less than $5 a share. And I thought,

well, then I can buy more shares so if

it goes up, I'll make more money, which

of course made no sense. But it was a

company that

uh was about to go bankrupt, but another

company acquired it and it tripled in

value.

And I thought, this is easy.

It's not easy.

But I got hooked on the markets at 12.

Do you think it's like that

I often think about this. There was a

really tiny when I was 17, I bought this

company called Mars Soft, a defunct

software company in India.

And the share price again doubled or

tripled.

The first experience of the stock

market,

the people who tend to continue are the

ones who get lucky.

Do you think so?

I think positive reinforcement works.

I get it. Reinforcement.

>> Yeah, sure. If you lost money on your

first trade, you would never have done

it maybe.

Probably, you you know, you put your

hand on a hot stove and take how many

times do you do that and then react to

it. So I can't say for sure, but

probably. But I got into the game. Like

it was a game and it was it's a great

game.

>> Mhm.

If you play it, you think of it as a

game and that if you play it well that

pays you money.

Do you think the stock market has

emotion? Does it treat you a certain

way?

Everything I I think it's unemotional.

We are emotional.

And we certainly have emotions. And

that's one of the reasons

the way I learned to invest

uh was

to write down my criteria when I was

making a decision. Every time I'd make a

decision,

I would then think, why am I making that

decision?

And then I write down the criteria and

see how it would have worked in the

past. It took me a while to do this

because of it my experiences. And also,

you know when you're wrestling with

positions, particularly a position that

goes against you, Yeah. you know, you're

wondering, am I missing something? And

then how hold up how long do I hold that

position? And what do I do? So emotions

and intellect and lack of perspective

is a problem. So when you have a

decision rule that then you know how it

would have worked all through time,

now you're just playing that decision

rule and it helps, you know? Did you

trade on leverage at the very beginning?

Um I didn't trade on leverage in the

beginning, but I bought in the beginning

very early in my age I bought futures

cuz it would give me leverage. Yeah.

Okay. I decided very Nobody traded

futures. Right. Okay. There were no

commodities.

It just very little. Okay. But um I

realized that it would give me leverage.

Mhm. And so I figured if I was going to

be good in the markets, I would want to

do have that leverage cuz I'd make more

money. So that's what drew me to it. Was

it about four or five times leverage?

Well, it was futures contracts.

>> Yeah. The margin requirement would be

about 15, 20%.

>> Yeah, and that would be a good gamble.

Right. All right, yeah.

And what kind of contracts were you

trading in the very beginning?

>> Well, then it was commodities. Right.

Okay. So then it was

um

um

everything from precious metals to

cattle. Like I got really into grain and

uh livestock and um

you know, those types of commodities. So

when I uh

So my background I'll tell you. You

wanted a couple of stories so I'll give

you the stories.

So I did this and I went to college

and then um what was it? The defining

moment I learning experience was um I

the year I graduated from college

1971,

I clerked on the floor of the New York

Stock Exchange. Mhm. And

this is before I went to graduate school

so it was in the summer. Mhm. And

on

August 15th, 1971,

President Nixon defaulted on his

obligation, the US's obligation to give

gold paper money.

You know, back then gold was money. The

paper money was like checks in a

checkbook. Did he default or did he say

that he will no longer back the dollar

with gold? Uh I don't know the

difference.

Right.

>> The way you say it, there was a promise

that you could convert in take $35, get

an ounce of gold. Then he said, you

can't take your $35 and get an ounce of

gold. So that to me is a And that was

because of Vietnam and going to the

moon. Well, well, because we were

spending a lot more. This is the thing

through history. Yeah. We always have to

look at this. We'll get into this, I'm

sure. But through history, that to the

Old Testament and everything, the years

of Jubilee and so on, it's when there is

a lot of claims on money

and there's not enough money in the

bank. Mhm.

Okay. And that's happened throughout

history. So we have a central bank that

was that started 1913

and the idea was it had gold and there

were many more claims on the gold than

there was gold in the bank. Because for

the same reason you borrow a lot of

money. And when you borrow a lot of

money, a lot more one man's debts are

another man's assets. So they're holding

it expecting that they can get the

money. And then they want the money, but

there's not enough money. And that was

the Federal Reserve Bank's problem in

1971.

>> money, Rick? What is money? Money is

Money is a medium of exchange and a

store hold of wealth. Very important to

to recognize it as a store hold of

wealth. What is a store hold of wealth?

Okay. So when you

and India many people realize that gold

is a store hold of wealth.

>> Mhm. Now, what we and then we

it's the perception of money. Mhm. That

it can be used as a medium of exchange

that I can go around the world. Mhm. And

I can go from one country to another and

I can turn it in and get value to be

able to buy things, right? So that is

what it is. Um and through history gold

has been the most used money, most

accepted around the world. Um you know,

then what but it's the perception of it.

And so when we think about let's say

money as we commonly think about it,

which is fiat money, then that But

there's a difference there, right? Like

gold is an asset which is not a

liability on anyone else's book.

Exactly. It's a money.

>> Mhm. It's the only money. Well, maybe

it's a

We could talk about crypto is crypto.

But it yes, gold is the only money

that you can have and nobody has to give

you anything to have it. But the other

money, all other money is dependent on

somebody giving you something, okay?

Whether they give you and so it's unique

in that it's confiscation risk is less

than others. So that's why one of the

reasons gold is unique. But it is also

back to your main point main point. It

is a widely recognized store hold of

wealth that I could bring around the

world and I could

use it and it's particularly important

and um that it is not deflate

you can't deflate its value. But you

can't print it. You create more of it.

And then it also in order to hold its I

have a personal question here. I hold a

lot of gold. I

for a long time have kept 10% of my

asset base in gold.

Um

The thing I wonder with gold is while

it can't be replicated today. I mean

there are people who are talking it

about it as a byproduct of fusion and

how they will create it like they did

lab grown diamonds. I I don't want to

extrapolate that far.

But with gold isn't it based on faith?

Isn't it a bit like religion? Because

gold inherently, I get that it's a great

place to store value.

But does gold have enough utility in

isolation? I Money doesn't have much

utility generally speaking, right? If

you're carrying around cash, it's hard

to paper. It doesn't have much utility.

So I don't think it's utility. I think

you got to get out of the utility

perspective of gold.

Every Everything that's money

could be a risk. Does it stay money? So

for example, in the history of gold when

there were great discoveries of gold,

then the value of gold is affected by

the quantity of those discoveries. And

if they could replicate gold or up like

they've been replicating diamonds, then

that becomes a risk of gold. So there

are all risks to all money

that are of the similar nature in terms

of

replicating the the supply of them or

also

the acceptance of them as a money. You

know, they became

gold fell out of fashion as a money and

bonds fell into fashion. But the

historic thing to know is that

throughout history

there is always the temptation

when

when you there's a fiat money which

easily could be produced and then

there's the temptation of the interest

rate. Mhm. Okay. Gold doesn't have an

interest rate.

>> Mhm. Okay, no interest rate.

>> In India it does. Oh, gold has an

interest rate?

>> Uh

So India doesn't produce very much gold

of our own. We end up importing a lot of

the gold.

So to be fiscally prudent, the

government has this plan where if you

buy sovereign gold bonds from the

government Through gold bonds? Yeah, you

get a you get a

>> Bearing gold? Uh-huh.

But you're also able to monetize

physical gold because you can lend it

out for a certain percentage. Uh but

you're still dealing with credit risk.

Mhm.

Mhm. Okay. Mhm. So what you're getting

getting paid for is credit risk, right?

So it's not gold. It's a promise to get

your gold back. Mhm. Right? And that's

what money was and that's why it would

have an interest rate. You have an

interest rate that on the promise to get

your gold back. That's what everybody

believed and that's the great trick

through history. The great trick is

history and everybody believed it back

then for a long time is if I hold the

promise to get the gold then I will get

an interest rate. And I could always

turn my money in for gold. So why won't

I hold the promise to get the gold and

get an interest rate on it rather than

to hold the actual gold which wouldn't

give me an interest rate. And that was

the trap and that is always the trap. So

when you look at it today, let's say and

you you think, okay, I I think it's just

arbitrage. Um let's say I can hold gold

that gives me no interest rate.

I can hold Swiss francs which don't give

me much interest rate.

I can hold US dollars

what which will give me depending on the

maturity, but let's say will give me a

4% interest rate. My basic question is

if gold goes up by more than 4% gold has

to go up by more than 4% then I'm better

holding gold. And if it goes up by less

than 4% then I'm better holding the

bond.

That that will operate. So I keep

thinking about though you know, that

question and the world keeps thinking

about that question. Mhm.

When I think of store of value, I also

think of

gold, money, US dollar, whatever

currency be it.

If I own equity in something very basic

like a farm for example, which is

producing a certain good, that makes it

more fungible almost, right?

All assets Mhm. are valued as their

appreciation in price

and their yield. The yield that you're

getting

and the price change.

And that's the total return. And so all

assets you compare on that basis. If

you're holding a farm Mhm. same deal.

Okay.

In other words, what is the yield on

that farm from holding it? Generally

more than 4%? No, I'm not getting into

the specifics. I'm getting into the

mechanics. So we're looking at the

markets as a whole. What I do is I just

compare everything. Right. Okay. Because

all I want to do is I want to

essentially borrow or be short those

that will have the lower returns

relative to those that will have the

higher returns. So it's constantly

calculations in that way however you get

there. And that's true of your

farm

as it is on the other. Mhm. But I think

that the farm or real estate assets

should have to give me a higher return

because I'm not going to have the choice

of easily selling that farm and buying

that farm. Whereas that choice, that

flexibility, that liquidity But we're

talking about the public equity of a

farm farming company. Okay. Then you are

dealing with a public liquidity. I

didn't know that

I understood in terms of that. So then

there's no liquidity premium. Still that

same calculation.

Okay. What is the yield and then what is

the price change relative What is that?

That'll be my return. And what is that

relative to the other things I can be

in. And basically you start to think

when you think of leverage, you start to

think,

okay, it doesn't have to be about zero.

Zero means like no leverage. When you

start to think, okay, I can be if if the

lesser returning asset

can become a liability

Meaning I can then borrow it

and get higher year

then I want to get that spread and

that's how I think of the issue of using

leverage. And then the issue is how do

you deal with the risk? But the the risk

is not something that is at like zero

leverage and it's a black and white

thing. It's a continuous thing. Well, I

should say the following. There are two

important ways to invest to invest.

Okay?

The first is

what if you can't beat the market? Mhm.

Most people can't beat the market. So

when they start off, everything isn't a

bet. It's like if I don't know what to

bet on, what is my portfolio? And so you

should start with what is that mix of

assets if you're not a trader and so on.

Um what is the right mix? And that's for

example why a lot of Indians hold gold.

There are a lot of people who hold gold.

They don't want to bet, but they're just

saying that'll be a store hold of

wealth. Once you have that portfolio,

that portfolio should be a well

diversified portfolio that assumes you

can't market time.

Then there's the question, can you

market time? Okay? Right. So you're

asking me a market timing question. I

want to distinguish it. I don't think

most people should play a market timing

question. And when you're asking me my

market timing, I view that question with

a lot of responsibility, cuz maybe I'm

right and maybe I'm wrong. I wanted to

preface answering your question with

that explanation, and then I'll go back

to answering your question. I money is

debt and debt is money. What I mean

money So here's mechanics. You're

holding a debt instrument. What you're

holding is a promise to deliver some

money.

And what that money's worth will

determine what the value of what you're

holding is, okay? You're really You're

holding when they hold that debt. You're

holding money that if it's the value,

you're going to be sorry, okay? And

money is debt. And what I mean by that,

when you're holding your money, you're

holding it in a debt instrument. So

money is debt and debt is money. And so

now I'm when I'm answering your

question, to me there's too much debt

and we're producing it too much. And so

when I'm looking at that and I'm looking

it around the world and I'm not just

looking at it in the United States, I'm

looking at it in the UK and in France

and in China and in most countries,

we're producing too much debt. That

means I don't want that kind of money.

So when because I don't want that kind

of money, I look at Well, that's why I

prefer and have been preferring the

holding of gold to that kind of money. I

think when you think about your

portfolio, you should start to think

again if you don't have

any

What should you be holding? I think

individuals or if you look at the

quality of money and like gold, let's

call it. You want to stay I would say I

want to stay out of fiat currencies and

I want to stay out of those things on a

tactical bet, not on the strategic asset

allocation bet. When I do that,

I think to myself

what should I have and an individual

and most investors should have between

5% and 15% of their portfolio in

a gold or an alternative money. Now it

depends what other assets they have in

the portfolio.

>> starting today to build a portfolio

after the gold appreciation of the last

year? I think that they

they have to stop even thinking about

the appreciation and market timing as a

starting point. You have to say, what

amount am I going to hold? Mhm. Okay.

What is that right amount? And it'll be

So the answer to your question is yes.

Forget about and we can get into the

pricing of gold or what it might do and

what it might not do, but still you're

okay. I need to hold that amount because

that amount is the right amount. If you

were to go through a portfolio

optimization and you were to say, what

through a mechanical portfolio

optimization and you say, what is my mix

of assets to create the right portfolio?

If you're holding stocks and you're

holding other assets, because gold gold

is over a period of time a low returning

asset class like cash. It'll produce It

has produced and for logical reasons it

produces about a 1.2% a year real

return. That's that's a low real return,

but it is highly

diversified because when the other parts

of the portfolio do very badly, let's

say, because of certain things like

we're talking about stagflation, you

print money and all that issues, then

the gold does very well. So it also has

a diversification

benefit in terms of the portfolio. For

those reasons, it is the most

fundamental money that we know of and it

is at the same time

an effective diversifier to other

things. That'll get you to that 50

between 5% and 15% of the portfolio.

While we're speaking about currency, how

do you view crypto in the world of

Bitcoin? Um

Bitcoin is limited in supply and its

perception of money. It is a form of

money. It's perceived as money as a

store hold of wealth. That is unlikely

to be significantly held by central

banks

and many others because of the number of

problems it has. It can't

transactions could all be followed in

Bitcoin. One can monitor what the

transactions are. Governments can

monitor what the transactions are. And

governments can interfere with those

transactions. Just like we talked about

earlier when we talked about, you know,

gold is the only asset that you can have

that they can't

mess with and control. You've got it,

okay? That's not true of Bitcoin. And

then there are other issues of Bitcoin

like if you we talked about the

possibility would somebody make

synthetic gold like they would make

synthetic diamonds

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as a risk? Well, in terms of Bitcoin

being cracked, broken, all sorts of

things and controlled, it has those

issues. Okay. So that's how I look at

Bitcoin.

>> You're not bullish on it.

>> I have a little No, no.

I'm I'm bearish on fiat currencies. And

bearish on So when I look at the world,

I'm I'm just trying to say, then I say,

what do I hold? Okay? So I hold a little

bit of Bitcoin. I have a little bit of

Bitcoin, but for me it's not as

attractive as

gold for the reasons you asked me my

thoughts. Those are my thoughts about

Bitcoin. Mhm. A stable coin

is attached to the fiat currency. So it

goes down like the fiat currency goes

down and it doesn't give an interest

rate. And what they're toying around

with what whether it gives interest

rates or not, but there's not a model

that I've seen. So so far,

it's used largely for immediate quick

transactions and not a store hold of

wealth, but immediate quick transactions

and it may be an efficient way to have

that, but it's not my store hold of

wealth yet. I don't see the merit of it.

So if I were to build your portfolio

today of store hold of wealth, just that

component, let's say if 5% to 15% goes

to gold, how much goes to

You said you have a little Bitcoin. What

percentage would that be? I'm not going

to give you what I've got, but I'll give

you just general guidelines.

Um it depends on

um

the type of equities.

You You can't talk about equities as

equities Mhm. because they're too

divergent. Mhm.

As we're seeing for example now, it's so

contrary

the magnificent seven and and AI and

tech is such a dominant thing. So in

order to think about portfolio

construction,

you have to think what type of equities.

Where do you hold those equities? I'm

not talking about equity. I'm talking

about the assets that you hold with

relatively lower risk like gold and

treasury and Bitcoin, which is not you

taking a bet on a particular industry,

but some place to park money. What else

do you have?

>> I see. In other words, you're you're not

asking whether there's equities in the

portfolio or bonds or what country or

anything like that. You're just saying

that piece of equities, okay? Then you

think about

that on that store hold of wealth, you

start to think about what that nature of

that thing is. There aren't many. Some

might say there are gems. Some might say

there are works of art. I mean,

basically when they say these things,

they're going through criteria which is

can I move them around?

Are they store holds of wealth that are

recognized in different places?

They're not like real estate. Real

estate is something that's nailed down

in a location. It's easy to tax. It's

not transferable and so on. So it's you

know, those kinds of things. And

Right. Do you think real estate should

be taxed? Like we have very low property

taxes in India.

>> I think what should be taxed

I mean, like if I was to create a

priority list, first tax this, last tax

this

and so on. And I would say in real

estate,

I think there's the question of what

does it mean for the economy or what

does it mean for those who are being

taxed or what does it mean for those who

are taxing. I think the practical aspect

of real estate in terms of taxing is

because the individual owner of real

estate can't take it with them. It is a

very practical asset asset to tax for

the government because they they can

always

tax that and you can't take it with you

versus the other. So I think

while you know, what should be taxed is

dependent on who you're asking should

it's for the government, it's a very

effective thing to tax. For an

individual, Um, another. In terms of its

economic um

impact, I think it's fine to tax real

estate. There's nothing

You got to tax something. I I think no

better do you want to have such a tax

burden burden on any one thing that it's

crushing to the economy. Then just

generally taxes, I would say, you know,

I want to spread them out and then I

would tax things that are harmful. You

know, like um what I I don't know. I

think all them sin taxes. Okay. If I

don't know, maybe cigarettes or you

know, um I don't know those things or

and then some things that are harmful

and you the least things you would tax

are those things that are helpful. Yeah.

I make a case for

taxing real estate because

I think a lot of the

benefits of corruption and the bad

money, the black money in a way sits in

real estate and that might be a good way

to bring it into the tax system.

Okay.

Personally.

If we go back to your life, you spoke

about going to college after you began

trading, after you were a caddy and

after

Do you think there are roles today like

the role of a caddy where you work

around influential people and you can

learn by virtue of being in their

proximity? It's always It's always of

course great to be about around

smart people. If they don't want to be

an entrepreneur,

uh whatever it is, uh be around a smart

entrepreneur and talk, you know, that's

great, sure. What was caddy the job of a

caddy back then? What do you think it

would be today?

Well, they do the same. They They carry

bags or they put them on golf carts and

but they walk there and if

if you're walking with people or it's an

entrepreneur, if you were a physicist

and you're walking with a want to be a

physicist and you're talking with a

physicist Any suggestion of other jobs

like the caddy job today?

Whatever gets whatever gets you

two things I'd suggest.

First, play the game.

If you have an opportunity to play the

game, you can play the game. With the

one of the beauties of the markets is it

doesn't take a big portfolio to play the

game.

At $50, I'd went into the game and I and

because the market pieces can be broken

up into small sizes, you can almost play

the game the same as a huge investor can

play the game. Ease of access, you've

got that in terms of those. So, the game

that you get into at an early age will

influence you a lot. If I look at like

age 12, I'll give you that example.

There's some people who say their

psychologists will say, prior to 12,

people learn differently. Um, because

puberty at the age of puberty, prior to

that, you learn. If you're learning a

language or learning a sport or learning

to Anyway, the earlier you start

learning, the better it is, the more

internal learning that you're at. And

so, play play the game, whatever it is.

Bill Gates

and a lot of the you know, key tech

people like to play gaming. They were in

gaming and they would hack the games and

they would

play in the computer and that'll affect

them. So, play the game, find a game

that you love and ideally one that makes

money. Wow, if you could do those two

things together, that's a terrific

thing. Play the game and then be around

people who are pros at playing the game

so you can chat about it. That's a good

path.

Leverage and speculation, especially

around equity markets.

Across the world, many people seem to be

coming down on

qualify investor more before you allow

him to speculate, buy futures or

options.

Um

Do you think that should happen or

should a young kid who's 18 and has that

$50 be allowed to speculate?

These are questions about I mean they're

they're broader questions about um

being taken advantage financially versus

learning experiences.

I I don't mind any kind of risk

something that becomes a tolerable

amount of risk. That's different from

exploitation. Okay? And so,

um I think that it's incumbent should be

incumbent on anybody who's selling any

investment product to be dealing with it

at a certain age to be thinking about am

I exploiting that person or not? Okay?

So, that's But that's a balance for

regulators to deal with. Right.

Uh do you have a view on

prediction markets? Like I know Shein I

like them. I like them. Yeah.

>> Yeah. Shein and Doty are friends of

mine. They both live in New York. Call

Shein

Polymarket.

Um

In the future, does a lot of what is

happening on stock markets move there?

Cuz you can speculate on just about

anything.

Mostly different act events to bet on.

And I think events affect companies, but

they're two different things. So, I

would say

it'll be something to speculate on.

Um, but and it'll be something that

smart people may use as a hedging device

against owning an equity. Like if this

event happens, that event that you can

speculate on and that might have an

adverse effect to the stock I'm holding.

There'll be all sorts of engineering and

so on. I would imagine you'd see

something like that happening.

Um, but we'll see, you know. So, you

would use it like a leading indicator to

make stock decisions. I'm not a leading

indicator. I wouldn't view it as a

leading indicator. I mean, you might

think about it. It gives you

information, but

it's a vehicle to speculate. It's a

vehicle to use to hedge.

It gives you some notion of what those

who are

speculating on an

is. There are certain things that I'd

like to try to get across here in our

interview that I'd like to You know,

what what is the difference between

wealth and money? Um, there are certain

things that if I can get across to your

audience, I'd like to get across. Yeah.

Do you want to go wealth and money

first? Okay. Yeah.

Bubbles

and wealth and money.

People are not used to dealing with

the difference in them and it's very

important.

Wealth

can easily be created.

The way we account for wealth. For

example,

if you're you start a company

and

let's say you want to make a unicorn.

You sell $50 million worth of it. You

value it at a billion dollars. You're

now a billionaire and it counts in

wealth as a billion dollars and there's

but nobody would pay a billion dollars

for that issue combined. Okay? And

that's a lot of what's happening now

with wealth.

And if you look at the 1920s bubbles or

you look at those, what you see in one

way or another is that wealth goes up

and people feel wealthy, but their

wealth isn't worth anything if you don't

sell it, convert it into money to spend.

Right? So, people should know that,

okay? That when they have this wealth,

they perceive they had the wealth and so

on. You it's not worth anything unless

you can

convert it into money and spend it other

than its utilitarian value, but it's not

worth what it what it is. And that's how

bubbles are created, the mechanics of

how that bubbles are created. In one way

or another, that happens. Okay? Then

there comes along the need for money.

So, what happened and how does that

work?

For one reason or another, somebody's

got to get that money that money who and

they have wealth, so they sell wealth in

order to get money and then the bubble

comes down. So, if you look at the 20s

and and there or you look at any of the

bubbles, the Japanese bubble or you look

at the 2000 bubble and so on, you can

see this dynamic

because it can be created without money.

Money is the means that settles

transactions. It's very different from

credit. Okay? When you get credit to buy

something, um you have an obligation to

deliver money. But when you get money

and you buy something, you have no

obligation to deliver anything. You've

paid for it. You've settled your

transaction. So now when I when we look

at this, we have right now a very high

ratio of wealth to money and this is

particularly important now. Okay? And

there's a and we have a very large also

wealth gaps and values gaps. But when

you have such a large wealth gap and and

you have populism of the left and the

right and so on and you have the notion

of wealth taxes, you can have wealth tax

as wealth taxes come in,

what and the and the wealth is so large

relative to the money,

um if you're not taxing well wealth,

then people can get very wealthy

and no money can be raised for for the

taxes. So, there's a real pressure to

tax wealth and if you tax wealth, then

people have to sell in order to get the

money to pay the taxes and that creates

a dynamic that can pop a bubble. So, in

my opinion, we're in a bubble, okay? By

various measures of it being in a bubble

and and people feeling very wealthy, but

you have that vulnerability. So, that is

largely the dynamic of when we see these

wealth booms and then the wealth bumps.

I wanted to convey that, okay? So,

that's the first thing I want to convey.

Is there a way to calculate wealth to

money ratio, which you said is

>> Yes, I do. I do. Right. Wealth to money

ratio right now in the United States is

about 8 and 1/2 to 1, and and so on. And

when you look at it, um and then also

then there's what it's in. The stock

market uh um is is right now about 3 to

1. And uh and that's very high. If you

were to go back to 1929 or 2000, it's at

about the same level uh as it uh was in

those times. Is it higher today than

2008 and 2000?

Well, 2000 was the peak.

>> Mhm. How much was it?

Uh same same as today. The sa- same uh

same level. Not if you take 1929, 2000,

and now, it's along right now if you

look at that chart, you can you can see

that chart. So, um we have a lot of

wealth and a lot of equity wealth

relative to money.

Do you think it could be possible that

tomorrow wealth tax is

collected in equity and not money?

No.

Because they have to spend it.

And they have to pay it. In other words,

the liability that it's going to fund

can't be paid by I'm going to give you a

piece of my farmland. You know, you get

a piece of the farmland. The government

gets a piece of the farmland.

>> Yeah, that's what you're suggesting. I

don't think that's realistic. You get a

piece of the farmland. Right.

Okay, you're not going to

feed people in inner cities with a piece

of the farmland. Right. If that were to

happen, people will have lesser

incentive to work on the farm cuz

eventually the government will own too

much.

>> think so.

Um

So, I wanted to talk about the five big

forces that that drive things, yeah, if

I can. Um

First, there is a debt money economy

markets dynamic. Credit

creates buying, but it creates debt.

And when it had creates debt, there's an

obligation to pay back.

And then the and and so how that dynamic

works. The second big force happens

simultaneously is the internal political

force. You experience it in India. Every

country does. We experience here.

There's an element here of that

political force that there's left and

right. In other words, the rich and the

poor. And the conflict and how to run a

country and so on. So, that political

force and there's a cycle just as

there's a debt cycle. That means that

you cannot increase your debt past a

certain point, and that changes. That

monetary order cycle lasts something

like a lifetime. Um and

and that that's the debt cycle. There is

a political cycle that goes with that

that has the left and the right. And the

political And we are in the middle of

that. So, the nature of our governance

system and the nature of democracy at

the risk of do you

we're past the point of um saying that

we'll abide by the rules. Okay? It's a

it When you have populism on both sides,

it's a win-at-all-costs

type of uh approach. Will you accept

election results? Can you Can the

government compromise? Can it govern in

that way? That political cycle is number

two, and it matters a lot. The All these

cycles relate to each other. Number

three is the geopolitical order, the

world order. In other words, we came out

of 1945. You come out of the You end a

war, and then the dominant powers at the

time determine how the world order

works. How who has what power, what the

rules are. That was dominated by the

United States because of the power it

had. And then you have changes in

relative power. The emergence of China,

the um relative decline of the United

States, India's role, and other places'

role. That world order has changed. That

world order's gone from a world order

that it was a multilateral

world order, sort of with rules like the

United Nations and the World Trade

Organization and the World uh Health

Organization and the World This is, you

know, the World Bank and the World This

and the World That in terms of

multilateral governance, and that is

over, okay? So, we no longer have that

kind of a world order. We have a world

order which is dominated by um power,

power struggles, and as we deal with

that. So, those three cycles, that money

cycle, that debt money cycle, that

internal order and disorder cycle, that

international world order cycle, they

tend to coincide and throughout history.

When you have that that convergence, you

almost have a perfect storm of that. The

fourth influence through time has been

climate. Um

acts of nature, droughts, floods, and

pandemics have killed more people than

wars and changed more orders. And number

five, always through history, is man's

inventedness, particularly of new

technologies.

So, everything that we're we would ever

talk about in the markets, in the

economy, will fall under those things,

practically everything. And it's the

interrelationship of those things and

the arc through history that one needs

to see in order to understand what's

going on. So, my basic view is that

there are many things that happen over

and over through history that haven't

happened

in our lifetimes that are very

educational, very valuable in being

making decisions. I'm going to ask you a

question, Ray. How does a youngster,

this is a very candid, pragmatic

question. How does a youngster in India

who's 25 years old, say his name is

Nikhil and he's living in India in

Bombay,

uh how does he make money

using all this information and

framework? Cuz that's his objective.

Play the game.

How do I use this information to play

the game better?

>> I I think

I think there's cerebral learning and

there's visceral learning, you know? And

um

so, I can tell we can talk like this,

but we are it's a different thing. Once

you start to get into playing the game,

whatever the game is, little

entrepreneur on um street corner selling

something, okay? That's You play the

money game. Right. Okay? Whatever way

you play the money game, maybe it's in

the public markets, maybe it's in you

buy a little piece of real estate, or

you have a hot dog stand. I don't know

what it is, but you play the game. And

as you start to play the game, you'll

start to learn the fundamentals of the

game. You And we talked about this. Be

around people who also uh play the game.

So, while you're playing it, and you

will learn through your experiences and

your reflections and the help of other

people.

I think everybody wants to play the game

and they are tempting to play the game,

but what will be really cool is if we

can get an insight from you of how to

play the game. Like if I were to be

looking to begin today, should I look at

is value in public markets, in private

markets? Should I be I I I think it's

more like

the opposite. What happens is

you find your thing. Mhm. Okay? There

are many different games If you look

around you, there are many different

games. You know, it's um I have my

grandchildren

um sell

um hot cider in the winter in a park,

and then what and then they understand

capital formation. I have to buy the the

the flask, I have to buy the table.

Okay, that's capital formation. Then

they understand when they go out that,

okay, if I can uh produce it, what's my

incremental cost and unit cost for

producing it relative to I I can sell it

at this, I have a margin of this. Then

they understand margin, and then they

understand that they make money when

that overcomes their capital cost. Okay?

They're playing the game, they start to

think about that way. Then they start

speaking with others. Gee, can I Where

can I get the cider cheaper or whatever

and and so on. So, there are all these

games around you, okay? And start to

play. Then you'll ask the questions.

Then you'll dig and so on. Or Yeah, you

can find somebody will help you. And

they might say, "Hey, here's this little

job that you can do." Whatever it is, it

is that little germination that then

creates

um mul-

empires. That That That's the process of

going from wherever you are in India to

or wherever you are from me caddying on

a golf course in the United States.

That's the process that allows that to

grow and develop over a period of time.

It's very helpful to understand your

nature.

Okay? People have different pulls. Some

people are more risk-averse.

Some people like to pay attention to the

big picture.

Others

will handle risk.

Others will pay attention to the

details.

What is your nature? So, I created

online I'm It's free online a a test

called PrinciplesYou. I recommend you

take it, everybody take it. And they'll

look at you, and through answering

questions, you'll learn about yourself.

And if you also have other people that

you know you have relationships, you'll

look at them to help to identify their

nature. What is their inclinations? And

I think that what what really is the

journey in life is to try to know about

your nature and find it connection to

the right path, right? So there are many

right paths. For all your audience, I

want you to know your nature and try to

match it up with what the right path is

for you.

Um

for the trader in me, uh if I were to go

back in time and be 18 years old again,

if I were to specifically ask you,

you you model people a lot in the sense

that you psychoanalyze them, you let you

have them go through different kind of

testing to figure out

what psychology is suited to what. What

works for a trader, Ray? What makes a

trader successful? There are many what

what one When you use the word trader,

it has an implication of a certain way

of operating that may that is only a

small percentage of the total way of

investing, right? So it's the person who

um the the

it could be buys this from here and

sells it from here. It could be the form

of, you know, you buy a bracelet here

and you sell a bracelet here and you do

it or it could be a stock trader and so

on and so forth. And that implies like

buy, sell and so on. There are many

other ways. I think you have to if

you're understanding, let's say,

investing, then you have to understand

the various ways of converting one thing

to another thing and making a profit.

And that's why I give the example of the

cider cases and so on for being able to

do that.

A trader,

I'd say think biases it too much to the

guy who's flipping. But I think for this

example, let's say, what is the

archetype of a trader but investor that

would help him succeed psychologically?

First,

you're going to go into it and you're

going to get hooked on it like getting

hooked on a game.

Okay? And you're not going to know

anything.

And then through those experiences, what

you need to do is be curious to

understand mechanics. Okay? What are the

cause-effect relationships? What are the

things that make the market go up or

down so that you can and whatever it is,

whether you're a day trader or whether

you're investor, you have to get into

the mechanics and you have to learn the

mechanics, right? And through that

experience and you if you think and

you're curious and you can research,

then you can do that. I am creating a

platform that anybody can use to help

them do that. In other words, there's

information. And the way you make

decisions is your brain brings in

information and it puts it through

criteria

that determine action. Okay? That's how

the brain works. That's all the

decisions. And so you have to learn what

are what is the criteria that are And

the criteria is cause-effect

relationships because causes happen

before effects. And if you understand

cause-effect relationships and you

understand the causes, you can bet on

the effects that it will be have

happening from that. So you have to be

curious and you have to be analytical to

understand those cause-effect

relationships. You begin a journey,

okay? Because if you're just gambling

and you don't understand the cause, you

won't have an edge. You need to have an

edge, okay? And that is by knowing those

cause-effect relationships and playing

your bet and how to organize your bets

so that there's a diversified group of

bets because the power of

diversification means that you can

greatly reduce risk without reducing

returns. Right. What else do we have?

Curiosity, understanding cause-effect

relationship, then?

And being addicted to the game and

getting the best guidance you can get.

Right. How does one get guidance?

All guidance is all around you. I'm part

of the guidance here today. There are

courses you can take, okay? Once you

have the curiosity,

then you will dig in and you will learn

and you will experiment. Is that what

worked for you, Ray? You still

you still come across as a

very curious person. It almost feels

like

you're trying to answer the question of

life Yeah. that can't be answered in a

way.

I'm learning more every day. Right. And

I can't answer it all or

understand it all.

Um but I I understand a lot more and I

get a kick out of it. You know, um

Albert Einstein supposedly on his

deathbed was still trying to figure out

problems.

Um I can imagine me doing that because I

love the problems and like to learn, you

know?

Um so yes, I have uh that addiction to

learning and and then one of the great

things about this game is you bet on it

and you get a score. So you you can

measure my performance down to three

decimal places and so on, don't you? Has

this taken a lot of time, changing world

order, the research, the amount of

effort that

>> Yes, but it's a passion. Right. What do

you hope to achieve at the other end?

For me, now? Yeah. My main thing is can

I pass it along?

I got a journey.

And I learn and I love it and and all of

that that So it's still a passion. But

what I'm really also trying to do as I

approach this stage in life is to pass

along. I think there are three stages

for me. There are three stages in life.

There's the first stage where you're

dependent on others and you're learning.

You go to school, you're not really

doing it. You're just learning, right?

And and you have that dependency. Second

stage is you begin the second phase of

life. Very different stage is you're

working and you're trying to be

successful and others become dependent

on you. Mhm. And in that phase, you're

dealing with the real world in terms of

being able to do it. It's no longer

academic. And then you and you have your

career. And I started Bridgewater,

um largest hedge fund in the world. I

started uh the two-bedroom apartment. I

ran it for 50 years and I'm then I

passed it along. Okay, wow, what a great

journey and I learned a lot, okay? But

now I'm at a phase in my life where what

I want to do, I'm in the transition to

my third phase. And this in this

transition, I think that there's an

instinctual

uh desire to pass along what you've

learned, to mentor. Why am I doing your

show? Okay, because I have that desire.

So that's what's important to me.

>> And why do you have that desire? I'm

just asking you for

>> it's instinctual and it's intellectual.

It's instinctual almost um we learn uh

you know, man's subliminal understanding

goes back millions of years even though

man only

was 250,000 years old and so on because

of what becomes Why do we love our raise

our children? Why do we do many things?

It's There's a lot of subliminal things

that enter into why we do things.

And and then there's and it's

intellectual. What do I want to do? It's

the most valuable thing I can do.

Um karma, okay? Karma, what goes around

comes around. In other words, that

notion. That So I I believe it, I feel

it and I want to do that. So it's both

intellectual and emotional.

You've spoken about karma and meditation

and

does that play a role in your investor

career? It makes you a better investor?

>> a it's a

These are dominant things. Meditation

has been the biggest source of success

that I

um have. It's given me an equanimity.

It's given me

[Music]

um when you transcend, I do

transcendental meditation. That's my

When you transcend, you're going into

your subconscious. And as you go into

your subconscious, it helps you align

your subconscious with your conscious.

It brings back a creativity.

It brings back a flow because like

creativity, if you go take a hot shower

and you you relax and so on, ideas can

come to you much better perhaps than if

you try to muscle them out. So

meditation has played an important role.

And then karma, I I believe in the the

reality

is

is that

um by people mutually helping each other

or and not just people but operating in

a way that's also helpful to nature and

the world, that there is this greater

there's this greater good. And that one

happens is it's very functional because

a a little things that won't take much

for me to help somebody else can make a

life difference to them. And then they

when they do something, whether it's to

me or whether others, you create

environment like that, you create a

better environment. So not only is it

practical, it also has the effect of

creating this wonderful

environment.

You look at studies of history and you

find in studies of history uh what

brings about happiness and health past a

certain amount of money uh

basic subsistence life, there's no

correlation between the amount of money

you have and the amount of health

happiness you have. Um the greatest

source of health happiness, excuse me,

across societies is community. If you

have a good community and that's that's

a source of helping it and well-being.

So, I think that these are laws of

nature and they're just reality when I

look at them that way. So, yes, your

your question was does meditation and

karma play a role? It plays a role in

everything. Yeah.

You spoke about community. Are you

spending time in Abu Dhabi, for example?

Um

How do you find that place culturally?

Oh, I love it. I

>> Yeah? Uh I

I uh I started going there uh 32 years

ago

um because their large wealth fund uh

hired me and hired Bridgewater as an an

investment. I think that they understand

karma. Um what each society has may call

it different things and so on, but they

understand um most important things um

and I'll and I'll to create

a a a successful society. What it is

required to to create a successful

society is basically three things. If

you do this well, then you are in a

successful society. The first is teach

your children, educate your children

well, so that they are capable of uh

succeeding, earning money, and so on,

and living life, and also that that uh

they're civil.

They understand civility.

Have them come out to a civil society in

which people work well together to make

good things happen.

And stay out of wars. Stay out of a

domestic war and stay out of an

international war.

If you do those three things well, you

will have a successful society.

Okay? So, now if when I look at the the

places, you could almost look at that.

Is is there harmony?

Is there Do you educate the children

well and and do you have broad-based

prosperity?

In other words, that it works well for

most people.

Right?

These are

These are fundamentals. And so, um in

the Gulf countries, uh particularly Abu

Dhabi or the UAE and Saudi Arabia and so

on, even there's a Bedouin culture and

so on that has elements uh a lot of

elements in in those things. It exists

in other places. In in various places,

success is their version of it. If you

go to um Asia and and you go to

Singapore, you go to China, they do it

in their Confucian way, okay? In terms

of harmony. How do you do harmony or

what is common prosperity? How do I um

make it that most people are benefiting?

And that if you look at the

accomplishments within India in terms of

the development. And and so when I say

that civility, certain basics. Do you

earn more than you spend?

Do you have a good income statement and

a good balance sheet?

Okay? And these are basics. You have

these basics, you will have a successful

if not I'm not saying not challenging,

but you'll have a successful life and

you'll have a successful society. You've

had a very eclectic experience in terms

of China, Russia, Abu Dhabi, Saudi. Uh

How are they like?

How are these people to talk to? Uh can

you tell us something about them?

Well, the best uh

um

the best leaders

are reflective.

They go above it.

It being how the world evolves, where

they are in the cycles.

They understand human nature.

And they care deeply about uh the

well-being of their people.

And they're practical.

That those are the you know, the

characteristics. So, we have

conversations that are quite like this.

And then you get into this particular

like what to do, you know? Uh you know,

how do you deal with the conflict? Okay?

So, there's a conflict. And like a a

general rule, um

be neutral.

Okay? Cuz if you look at the history of

wars and so on, there are

in winners of the wars, losers of the

wars, and neutral country countries.

The winners of the wars lose.

Meaning, they still get deeper in debt

and they have the consequences of the

wars.

The losers of the wars get wiped out.

They lose everything.

And the neutral countries prosper from

the wars. Even that's how they

accumulate money and they don't have

that problem. And so it's it's always

better to operate that way. Now, if you

look at history and you then say we

apply it today.

Um okay. So, the conversations are like

that.

You've liked China for many years. I

think one of your kids went to live in

China. How do you

see the global dynamic playing out

between China, America, Russia? Maybe

you can opine on India as well.

What do you think will happen next? Now,

we have the changing world order. The

United States and other countries have a

different mentality about fighting and

so on and so forth. There may be that

dynamic. So, now you have a the change

power matters. Power in all of this. Not

it's not the rules of the game. It's not

etiquette. It is power matters. And that

is the dynamic that we have. What's most

important is how healthy the country is,

each country. More important than the

international way. If you're strong,

you're strong. And that's the most So,

be strong and healthy. And so, there uh

the United States is going through its

challenges. We we talked about that. We

could talk about that more. And then the

and then uh China is going through its

challenges and India is going through

its challenges. But how it goes through

those challenges to do the things that I

just said are effective to make an

effective country is the most important

thing. So, I don't think we're going to

There is a greater risk that we can have

um I'll say military war. We're

certainly in the classic wars that

happened before military war. We're in a

trade war. We're in a technology war.

We're in a geopolitical influence war.

All of those are in that and that's the

dynamic that's happening. If you're

asking me uh what it means, I think that

it's probably that they're not it's

lower risk of, you know, a big It can

happen. You have to be careful. But um I

think then it's how each country takes

care of their own

and becomes strong and healthy that

matters most.

And how do you think the dynamics

between them will change? If I were to

get more specific as a proportion of

world trade, who will do better? Will it

be 10 years forward, will it be China or

the US?

I think when we look

>> how does India fit into this? What can

we do better? Um

I think the technology war is the most

important war that almost whoever wins

the technology war will win almost

everything. I think that right now you

have a situation where they recognize

that the each side can do harm to them

and actually is using techniques. And

so, there we're now in a period of time

of inter eliminate or reduce

interdependencies.

That there's a list that both countries

or all countries are going on and they

say, "How can I squeeze the other? What

dependency do they have that I can use

to squeeze the other? Or what dependency

do I have that might be used against me

to create squeezes?" And that's in

capital as well as trade and so on. So,

everybody's now going to kind of this

independence

and you know, minimizing interdependence

because that's the smart thing to do

whatever because I will be squeezed if I

can be it'll be used against me. So,

that's where we are on that. And then

compete to become most effective, most

powerful, most rich, most powerful.

They're both doing that. And technology

will be important. So, I think that over

those periods of time, you're going to

see

um

that dynamic. Um I think China

uh they're ahead and behind in different

ways. Um for example, the inventiveness

of new chips

um and the most advanced chips, um the

United States is a bit ahead is is

ahead.

Um and then uh but the application to

use the chips, whatever AI there is, to

be able to integrate it into life and

making it for the society most

applications and most effective, China's

ahead. I think that um India is um at a

wonderful

um arc in terms of um its circumstances,

its potential, and and what and what

it's developing. And I think that um

uh President Modi is very much like uh

Deng Xiaoping for China.

Um and and what I mean by that is that

um he's creating changes. And when you

are have a country that um can build its

infrastructure and can build on that so

that you and you don't have much debt

and you have a large talented population

in many ways

that

for these reasons

I have I've created as

indicators leading indicators of what

countries have their ingredients to

project the next 10 years growth rate

India is best India's going to have

probably the as the best fundamentals to

have the best growth rate in that

because you're going from not having

enough money to having for that has

infrastructure you have to build

infrastructure when you're building

infrastructure when you're creating the

the things that happen in India not only

all the different infrastructure

including the ability to get credit and

the ability to do transactions and so on

in that that produces a growth curve

particularly if you don't have very much

debt and you have talented people so I

for those reasons I think India over the

next 10 years has all the ingredients to

really be the strongest growth rate and

improvement however it's it still has

development to do it is more akin to

where China was

you know 30 years ago maybe than where

China is today so it has that that

growth it the actual power of it is not

as great as the those other two

countries

I'm going to ask you the last question

of today

if you were 25 years old and in India

and you had

either $100 to

if you had $100 to invest somewhere

where would you put the money

the

first thing I would do

is ask myself what do I need most

to be most successful

and I would secure that right it's not

just return on investment does that mean

that I can take a little bit of that

$100 and I could start my little

business or do I secure that $100 to

have my education that I'm being able to

operate whatever is going to as a young

person invest in their own success to be

able to learn do I how do I learn do I

listen to your podcast what is it that

is going to allow me as a young person

to be able to invest in myself and learn

and get better so that's the most

important thing that's the best

investment I can make

super any last words for our audience

no just thank you I would say if you are

interested in staying in touch

you can do that online

um

through LinkedIn and various media

and it's my pleasure thank you thank

them to be able to communicate this way

I hope it's of some use thank you really

I hope you come visit India someday sir

I would look forward to it thank you so

much

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