00:25:55 · Anthony Pompliano, Ron Biscardi
[00:25:55] S1: a brokerage Silicon Valley Bank, like, going under or something? Going under, yes. Right? [00:26:01] S0: The government stepping in maybe? I I think you always have the risk that a a business can be mismanaged and and go out of business. Right? Like, bankruptcy is is a possibility. Whenever you're making an investment, you're you're underwriting that risk to some degree. But I don't... I can't think of a scenario where a major investment firm or bank was hacked and money was literally stolen out of their accounts. I I can't think of any scenario where that's happened. So I think if you're an institutional investor, you've got to report to an investment committee, a CIO, then the overall board has to approve it. I just think it's incredibly hard to do if you can't say, well, my assets are gonna be custodied at Goldman Sachs or Morgan Stanley or JPMorgan. You know? When when those guys are in the space in a big way, then I think you're gonna see the institutional investors have a much higher degree of comfort. But you're not gonna get those guys in the space in a big way until this other problem is solved. [00:27:07] S1: Yeah. I think that, I think that makes sense. Let's talk about private credit. Private credit obviously had some negative headlines. People were worried there for a little bit, but seems to have kinda cooled off in in some of that concern. What are you seeing there?
00:27:18 · Ron Biscardi
[00:27:18] S0: Totally overblown, and and I kind of said it as it was happening. There there... So what I like about private credit is that there's not a tremendous amount of leverage in the private credit funds. You know, they may have two or three to one leverage. But where you see real, like, systemic level blowups is when an asset class starts levering 30 to one, 40 to one, 50 to one. Right? Like in the in the financial crisis in o eight, you had... A lot of these banks were levered at those kind of numbers. That's when you can take down the system. Private credit funds are making loans to operating businesses. They're filling in a void that exists where where banks are not servicing various segments of the of the middle market in particular very effectively. And private credit has stepped in to fill in that void and they've done a great job of it. As investments, I think they're pretty great. You know, you put money into these funds, they make loans to operating businesses, and those operating businesses make payments on those loans which result in cash flow back to you as an investor in the fund. There were a few funds who probably got a little bit too aggressive in their lending practices and they had too many failures in the portfolio and that started to impact their ability to hit the investment returns that that were targeted. I... Most of the stories that I've heard is that a lot of those funds were able to sell their portfolios ranging from 60¢ on the dollar to 90¢ on the dollar. You know, that is far from a major crash. And it wasn't even really industry wide. It was it was a handful of the biggest players who experienced it, but I can tell you that my institutional investors are still completely focused on the asset class. Like, the whole blue owl thing was playing out in q one of this year. At my event in Miami in late February, private credit funds had 3,000 meetings. Out of a total, we ran about 20,000 meetings in the event this year. So for one asset class to have 3,000 meetings, I'm... I mean, I think it was the... It was in the top three, I would say, asset classes in terms of meeting performance at the event. So I haven't seen any real slowdown. I think it has become a huge part of investor portfolios. It became a huge part, by the way, because, your traditional bond portfolio couldn't generate the returns that it used to.
00:30:06 · Ron Biscardi, Anthony Pompliano
And that also made private credit a really interesting alternative to a bond portfolio when, you know, when we were still in a ZERP world. And I think investors got used to the returns. They got comfortable with the fund managers. They got comfortable with the strategy. So we still see a ton of interest in private credit. Our big event in Miami this upcoming February, [00:30:33] S1: you know, [00:30:33] S0: we probably have 700 funds signed up for that. And the... You know, we we have the same percentage of private credit funds signed up for that event this year as we did last year. So I haven't seen any... I I will say this. It was definitely getting maybe a little bit overheated. Right? There were a lot of new funds coming out. Some of that has slowed, but it it is still a completely viable asset class with a a ton of interest.
00:31:04 · Anthony Pompliano
Ad[00:31:04] S1: Today's episode is brought to you by investorhealth.com. You've built the portfolio. You've made the long term bets. You still have to be around though to compound. Your body is the balance sheet, and most people never invest it in a way that they invest in everything else. Investor Health is a company that we've built that is a clinician prescribed protocol for weight, metabolism, energy, and longevity. GLP-1s, NAD plus B12 all reviewed and prescribed by board certified clinicians not picked off a menu. The process is a short online intake form, a clinician review, then medication compounded and shipped straight to your door. Most patients are approved and shipped within forty eight-seventy two hours. No office visits, no referrals, and no waiting rooms. Ongoing check ins at thirty, sixty, and ninety days, and a 20 clinician support line. Health coaching is included as well. Plans start at $149 a month. They're HSA and FSA eligible, and it's available in all 50 states plus Washington, DC. There's no contracts and you can cancel anytime. Go to investorhealth.com and complete your intake form today. InvestorHealth dot com Go Long on Life! Investor Health is a telehealth platform, not a medical provider. Medical services are provided by affiliated licensed clinicians. Compounded medications are not FDA approved. Individual results may vary, and treatment requires evaluation by a licensed provider. Terms and conditions apply. See investorhealth.com. When you think about, the waning of interest or or the acceleration of interest, it does feel like the institutions are a little bit slower to cool off on things and a little bit less, you know, quick to get excited about that thing. Is that true?
00:32:51 · Ron Biscardi
[00:32:51] S0: Yep. Yeah. A 100%. Yeah. You know, these are these are organizations that have... You know, like for you and I as individuals, we're thinking in terms of maybe decades. Right? Like, I know I'm gonna be in an earning period in my life, you know, from my early twenties to, I don't know, God willing, maybe my late seventies. But somewhere in there, I need to start shifting my investment strategy to be more risk averse, to be focused more on providing cash flow in my retirement years. These big organizations have a time horizon of infinity. If you're an endowment or a foundation or sovereign wealth fund, you're really thinking in terms of I need to provide a certain amount of cash flow and as long as I can build my fixed income side of my book to provide that cash flow, All the other stuff I'm looking at, I can take a very, very long term view. And I think that leads you to be... You you just don't experience the same volatility in your decision making. You know? When when you have a long term view, you can ride out bad markets. You know? You can hang on to things a lot longer and wait till they come back if you believe the core investment thesis hasn't changed and we're just in a moment of market panic for whatever reason. So for sure, they're much more slow moving than family offices and than individual investors for sure. You know, individual investors are the ones who probably are the worst at panicking and, you know, they buy at the top and they sell at the bottom. You know, they're they're definitely much more subject to, like, the emotional swings of the business.
00:34:46 · Anthony Pompliano
[00:34:46] S1: But they have more fun, Ron. They have more fun. Speaking of individual investors, you've got this conference going on in Austin, Texas called TomorrowX. And, when I first saw you guys, talking about this, I was like, ah, it's a idea. I looked at the lineup. This thing is a plus plus. I mean, you guys crushed it in terms of who is speaking. Just give us an overview who the speakers are, why are you doing it, you and for the individuals who who wanna manage their own money and go learn from some of these folks why they should go.