April 14, 2021 – On today’s podcast, we welcome special guest Justin Oh, who provides investment research through his website and YouTube channel A Couple Cents.
On today’s podcast, Justin discusses:
- His career journey in investment banking and hedge funds, then as a CFO prior to starting A Couple Cents
- What his research platform A Couple Cents provides
- The most common investor mistakes
- His outlook on the current market environment and how he is investing
- His top pick for the next decade
- And more
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Transcripts:
Welcome investors to the Absolute Return Podcast. Your source for stock market analysis, global macro musings and hedge fund investment strategies. Your hosts Julian Klymochko and Michael Kesslering aim to bring you the knowledge and analysis you need to become a more intelligent and wealthier investor. This episode is brought to you by Accelerate Financial Technologies. Accelerate, because performance matters. Find out more at www.Accelerateshares.com.
Julian Klymochko: All right, Justin. Thanks for coming on the show. Happy to have you on The Absolute Return Podcast today. I want to kick things off, really delving into your interesting background, starting out at in investment banking with Deutsche Bank in New York, transitioning to a $2 billion dollar hedge fund, and then a stint at Citadel, helping to manage a hundred-million-dollar portfolio prior to starting A Couple Cents here, which is your blog, your platform, everything you’re doing online. Can you give us a walkthrough of your history and how you started from investment banking to where you’re at now?
Justin Oh: Yeah, thanks for having me, Julia and Mike. Appreciate you having me and for being here. Yeah, so kind of my story and my career path is pretty typical on wall street I think, especially Julian can probably relate to some of that path. A lot of us like to come out of school and starting in investment banking. It’s a good way to understand cap structures, valuation from a kind of a rigorous entry level. I would say a lot of people cut their teeth there. So, I started out in the leverage finance kind of investment banking desk at Deutsche Bank.
Julian Klymochko: So that was covering leveraged buyouts, private equity?
Justin Oh: We would be issuing leveraged loans and high yield debt. A lot of times that was in conjunction or in relation to a leveraged buyout from a sponsor, but other times it would just be a high yield issuer investing some credit or issuing some credits. So, start out there, went to a big $1-2 billion dollar kind of hedge fund technically, but it’s kind of a hybrid hedge fund, private equity fund. Lots of private equity fund style investing in the public markets. Long-Term investing, usually a bent towards long only. Really rigorous research discounted cashflow models, valuation models, stuff like that. And doing some private deals like SPACs and PIPES and all that stuff, back when nobody knew what a SPACs was and when SPACs were wildly unpopular.
And I don’t know if you remember this time, right? I remember SPACs being the unloved way to raise capital and a lot of times the sponsors would vote against the deal. Well sort of like the anchor investors would vote against the deal and then the sponsor would be left scrambling for financing and then hedge funds, right. Like what we would do, would swoop in with really, really aggressive financial engineering options. So, an interesting way to generate alpha in that sense back then. But yeah, after that I spent time at Citadel, like you mentioned, running a big book centered around kind of IPO’s and secondary offerings. But it ended up just being in practice, kind of a really successful kind of Long-short portfolio. I’ve been spending the last four years as a technology CFO, which is really great as. I’ve always been super interested in software and always been interested in actually generating value at the corporate level, as opposed to just a pining on value from a capital allocation level. So that’s been really great. We’ve 10X the business, and you know, as I leave the business and as that bookends my operational career. Have been lucky enough to be running, because I’m not regulated on the (SEC) anymore as a CFO, as an operator, I’ve been able to just kind of post research and videos online through YouTube and TikTok and running a YouTube channel with over 70,000 thousand subscribers and TikTok channel over 250,000 thousand subscribers. So just doing kind of equity research, but in a fun more ubiquitous and kinder lighthearted way, but really backing it up with the research of a pro, right. So, with the orientation of helping folks manage their long-term investing portfolios, you know, as an example of what I’m doing personally as opposed to, you know, trading around earnings.
Julian Klymochko: Right or guessing currently EPS, writing up a one paragraph summation of the news, attached to a seven-page disclaimer that you typically find in standard equity market research, but prior to getting to your platform, A Couple Cents. I wanted to get into your thoughts for our listeners, some key insights glean from the sell side and the buy side in your experience?
Justin Oh: Yeah. So, I think it’s really interesting. I’ve spent much more time on the buy side than I have the sell side. And I have never been a sell side equity research analyst, but I think coming from investment banking, right. A lot of the analysis that you do are more solving for the answer. And you all already kind of knowing the answer. So, if a company or corporate wants to issue bonds or wants to sell themselves in an M&A transaction, like the price is already relatively negotiated, or as a banker, you’re just facilitating conversations. So, your client facing. So, and you are doing a lot of the analysis, the evaluations and the kind of the support to support the listing price, right. Kind of an analogy is being a being a realtor or a real estate agent on a transaction. And you’re the seller’s agent, or you’re the buyer’s agent, but generally your comp analysis is going be a little bit less pure just because you’re making your money, not on a carried interest returns, or you’re making your money on.
Julian Klymochko: Transactions.
Justin Oh: Yep. And then in a similar sense, right. I’ve known a lot of colleagues that were on the other side of the firewall, kind of sell side research. And I think they try to be pure, but I think they’re around the edges, there are maybe not the best incentives because if you issue a sell rating on a stock, you’re going to widen the gap between your firm and the management team of that stock, right, of that company. Like usually they are, I would say 200%, they are multiples more likely to keep a buy rating on, or keep a hold rating on, than to put a sell rating on it. So, in that sense, they’re just usually too bullish, but they also, if something is wildly undervalued, they’re also not going to stick their neck out of line because they’re not making money again on outperformance versus the S&P 500. They’re making their money on being around as a service for a wealth management and stuff like that. So, on the buy side, it’s much more cutthroat. People are right and wrong very, very quickly. And it’s a lot more, I would say, a lot more stressful for sure. But I would say on the buy side, the analysis is much more, everyone wants to outperform. Everybody wants to find that undervalued or overvalued stock to buy or sell, or short, right.
And I would say the bias there is people want to sound smart and they want to be contrary. Everybody’s a contrarian. So, by definition cannot be contrarian. So, you get a lot of these kinds of weird dynamics of hedge fund hotels, where all the smart people that think each other are smart, all pile into a stock because they trust each other or on the other end. You have a bunch of, like a hundred percent. The industry is contrarian quote on unquote. And so, you just get a bunch of people arguing for arguing sake, and then it doesn’t really necessarily, that’s not pure either. So, I would say they’re kind of perverse incentives all over the place. And so, when I’m bringing research to YouTube or my website, acouplecent.com, I already do this, even with my private equity friends and my hedge fund friends who were restricted from buying the PAS. Like I already, throughout my whole career, done the analysis for my friends and family. So now I just have more friends on YouTube and that’s how I treat it. If you had a personal portfolio, this is what I’m doing. And I’d like to take concentrated bets, long only bets. I am innovation minded, but I am no Cathie Wood. I have the discipline of Buffett, Graham style value investor. But I also grew up in California and I’m very, very Silicon Valley minded. So, I like to say my investing style, starts in Silicon Valley and is rooted and at least brought down back to earth with deep value investing.
Michael Kesslering: I appreciate you going over some of your investing style, as well as some of the differences between the buy and sell side. I think you’re really bring up some good, good points with regards to the buy-side. Things that I’ve noticed as well with regards to. Sometimes there is an incentive to trying to sound smart, having great analysis, but that doesn’t mean that you’re going to make money on a particular investment. You could have the best model and analysis. But somebody who just kind of buy Google can outperform with zero analysis. And so, investing certainly isn’t fair in that sense. But moving to your actual platform and your website, A Couple Cents, what was the vision behind the site?
Justin Oh: Yeah, I mean, I will say it’s been very organic. I have been serving as a CFO of a company and I have my own wall street style career, private equity, hedge fund kind of hybrid style career. And that’s what I always thought I was going to do ever since I was even in high school. And as I was on the internet, more and more people wanted to support me. More and more people wanted some of the things that just took a bunch of work. It took me until 1, 2, 3:00 AM in the morning, just to be out there. So, I looked up a site myself, because I’m just generally kind of technology oriented and you know, had a little membership just to support what I was doing and people started signing up and it just basically evolved. And I think the mission now, which I am 150% all in on now. I want to provide actual professional style investment guidance, or at least investment analysis and example for the people, for folks that want to invest in their personal accounts, their 401k here in the States, or, you know, the retirement accounts themselves.
I think everybody could hit the buy button themselves. It’s not that hard, right? What’s hard is avoiding the landmines in investing, which is where I come in and all three of us are well-trained in. And quite honestly, very highly paid careers to avoid landmines in financial statements. And that’s just something that a normal person with a nine to five jobs is not going to be able to get up to speed on, but we can provide investing analysis, investing ideas, and knowing there’s rigorous background behind it so that they can concentrate themselves into positions that they like in their personal accounts. Because, you know, I mean, I was really young, but I remember picking the Google IPO, right. I would still say a child back then. I picked Apple when I got my little hand. It wasn’t that little, but it’s still in school. I got my hands on the first iPhone and I said, this is a game changer. I think a lot of people are very good at that first level analysis. But then I think we’re in this age, right. Where anybody who drives a Tesla is like, wow, this is different, right. As a Tesla owner myself, it’s like, wow, this is very different, but we’re in a wild age where Apple was never, so highly valued over cashflows as Tesla.
Julian Klymochko: Right?
Justin Oh: So, there is a spot for a very affordable price at acouplecents.com, it’s like under 10 bucks a month for real analysis on some of these stocks.
Julian Klymochko: Now I wanted to get into that concept because as we all know, there’s a ton of content online, whether it’s YouTube, Blogs, TikTok, all sorts of different platforms. A lot of sophisticated analysis, everything from well, unsophisticated to highly sophisticated, Motley Fool seeking alpha, all these different platforms and websites, tons of tons of content. So, what specifically is different, unique about what you’re doing at A Couple Cents?
Justin Oh: Yeah, I would say I would push back and say, what I would consider to be legitimate in a meeting room on Wall Street analysis or analyst doing real research at any price point under 50 bucks a month.
Julian Klymochko: Right.
Justin Oh: I think you have the legacy Motley Fool guys over there, and it’s like, these are the 10 hot stocks that you haven’t bought yet, right. Our hot stocks since 1995, I’ve done X, Y, Z, right. All of us former investment bankers now you can massage that, right. I mean, what is money weighted returns and all that stuff. And then like Seeking Alpha is a great, I would say great legacy website. I think their tech company, right. And I would say not the best one at that, but it’s still fine. And I’m sure there are great analysts on there. But at the end of the day, real hedge fund analysts that can make half a million a year, or, I mean in New York city, but like, you can just whatever, right. A good amount of money. The only time they’re ever posting is a autonomously on VIC Investors Club, where you have to, like you can’t even get in, if you want to.
Julian Klymochko: Are you a member?
Justin Oh: Yeah, I am.
Julian Klymochko: Okay. I used to be for a long time, but haven’t used it in a number of years.
Justin Oh: Yeah. I mean, that’s its own little echo chamber of guides, right. But I mean, you get a lot of that but you only doing it if you’re on garden leave or if you’re in between jobs, because once you’re working at a money manager, you’re basically restricted up through the nose from saying anything, right. And so that’s the kind of the interesting serendipity of what happened with me is I just started making, I made one video and went viral and I just happened to be in a seat that was a financial operation CFO role in a portfolio company. So, I’m not really shackled by the (SEC) and the States. And I’m sure that you have an analog in Canada. That’s what I would say. And like Seeking Alpha is great. I’m sure there are great write-ups on there, but it’s also like such a mess, right? You go on there and you’re like, John Smith says buy Tesla and Sally Mae says, sell Tesla. And the quality is like, it’s almost overload. And so, I think what I bring is like everyone adds me on LinkedIn. I have a million LinkedIn friends now, right. You know who I am. I’m legitimately someone from the industry. And I think one of my great videos on YouTube was I literally just live streamed me opening up a blank Excel document and building a Tesla DCF from scratch. I’m not like faking it. I have nothing to hide. I have a career that I’ve always been very happy about. And so, I think there’s a level of trust there because I’m not really out to sell you anything. This is what my skillset is, and if I can help and basically share what I’m already sharing with, like my mother and my father and my wife and like everybody else, then I might as well just open it up.
Michael Kesslering: I really liked the idea of opening up the Excel file and just building out the DCF.
Julian Klymochko: I can’t believe people would want to watch that.
Justin Oh: I mean, you’d be surprised, over 10,000 thousand people have watched that video and have watched it through. I would say it’s like a three-hour, Excel or three-hour live stream.
Michael Kesslering: Yeah, that’s great. Something that every invested banking analyst really hopes that all those quick and dirty DCF that they put together throughout their years, that skill sets going to work out for them. So, to be able to give [Inaudible 00:17:10] the following that is able to capitalize on that. That’s fantastic. On another note, as you mentioned, like you built this kind of organically just seeing what works and what doesn’t work, and you mentioned that it’s been a little bit opportunistic with your current role, that you’ve actually been able to do this. As you’ve been building out the platform and your kind of offering. I’m very interested on what hasn’t worked in terms of whether it be different platforms you’ve tried that just didn’t work as well or different services or products that you’ve thought of that, you know, just didn’t catch on. I’m very curious on that?
Justin Oh: Yeah. I mean, I think that’s an interesting question. I think there are two prongs to any SAS Company or any kind of subscription product, and one is growth, and one is retention, right. It’s chart on the other flip side churn. And I think that the nut to crack when you’re going from zero to one is growth. So, a lot of things that hasn’t worked is my lack of, like, I’m not a social media person. I’ve always had private Instagram account. That TikTok video that I posted. The first public thing I posted went viral with two and a half million views, the first month, right. And so, I’m not particularly talented at being a personality per se. But so, I think a lot of the failures and what has not worked is like me doing certain content on TikTok, I’m now focused on YouTube, I still have to make these clickbait thumbnails.
I basically can’t talk about some esoteric, hyper undervalued widget maker. Like that’s not going to do well at all. That’s just a waste of time, quite honestly for my business. And the only time I would do that is to service and really give back to the current paying subscriber base. But I’m not getting into the algorithm on YouTube. If I say, go buy this sub $200 million dollar market cap widget manufacturer, because they’re out there trading under net cash, right. That’s not going to happen, unless you get some GameStop level luck. So, I think that’s where I really struggled. And in terms of just like what’s worked and not worked on the platform itself. I think the subscriber base and everybody, we’re building a community of folks talking about stocks and it’s not just me on there.
And so, we have like an ability to post on the website and yeah, I love the community. The community has really worked really, really well. I try my best to provide write-ups and Excel documents. And now I’m doing premium like videos where we just do live streams and people really liked. I think what’s really been popular is doing quick, takes from a pro because a quick take from me with like, I subscribed to a tool like Sentio, or you can go Bloomberg, or CapIQ, or FactSet. Someone like me who can look at a stock that someone’s saying, Oh, this is like the next big, I don’t know, cannabis stock from Canada. And like, can you look at the valuation and just doing a quick gut check, people really find that to be incredibly valuable, and I think that’s work really well.
Julian Klymochko: So, getting into this community aspect of what you’re building in all the everyday investors, let’s call them that you’re communicating with, what do you see as the most common mistake being made that to come across?
Justin Oh: Yeah, I would say it’s the lack of discipline across the board, but it’s not to roast or call out retail investors because you see it in institutional investors, especially. I mean, just look at what, I mean, look at what [Inaudible 00:21:13] was buying, right. It’s just across the board, it’s a human nature problem. And I think on up days, people don’t want to sell. On down days, people really, really don’t want on itself. And the thing that I’ve learned and it’s something that I see is learned, but I also see it as something that some people just can never get up to speed on is conviction. Like, I mean, I was an early buyer Bitcoin and I was a contrarian, literally contrarian because everybody, all my colleagues on Wall Street laugh at me and which is funny because I was told by another colleague on Wall Street who is a really good investor, but like, and it went down, right.
And I was buying, I mean, I bought my first one, like 300 bucks. And I was buying all the way up to like 18,000 thousand. And then it crashed for like three years. And, you know, that’s obviously worked out well for me, but it’s in the down days in which you should be buying more, right. I mean, we all can say is buy low, sell high, but at the end of the day, when people are following Cathie Wood and sizing in size, because Cathie Wood just added Ark Invest Innovation Fund, just added some high-tech company trading at a hundred times sales or some IPO like Snowflake and to use colloquial terms, yolo into it. And then the market sells off because interest rates are going up, but nobody wants to buy Snowflake at a hundred times for gross profit. Then people start selling at a loss, right. I think that’s the biggest mistake. It’s nothing new. I mean, I’m sure people were making this mistake when securities were invented back in the Dutch East India Company.
Julian Klymochko: Yeah, I’m sure back then there was even far less due diligence done at every level. Definitely didn’t have the Edgar website where he could just pick up some financial statements to analyze, but I digress. I wanted to touch on the market environment. You mentioned Bitcoin, you mentioned tech stocks. What are your thoughts on the current market environment? And perhaps a transition to some value stocks.
Justin Oh: Yeah. So, we are like somewhere in the middle of that transition you were referring to. Back in December, I’d started talking on my channel and my live streams about, where interest rates were super flat yield curve. 30-year yields being so close to like 10 and 5- and 1-year yields, kind of crazy, right. I was walking the channel through and everyone through like, this is the simplistic example of the discounted cash flows, right. If interest rates go up for 10, 20 and 30 years, 30-year interest rates and basically return requirements go up, then the value of Tesla autonomous driving division cash flows in year 15, go down, right. Because you’re just discounting them at a higher discount rate. So, I basically was saying, again, not to say that was the right timing, but ever since 2021 really started in earnest like late February or mid-February, I believe. We’ve had this like fears of a reopening, fears of inflationary pressures combined with a fed that has kept the course and basically said, we’re willing for inflation to overshoot. I mean, this is something that everybody’s been talking about for weeks now. The ten-year treasury has now gone up to over 1.7, 5% now. So, the yield curve is steepening. So, you’ve seen a lot of sell-offs in, especially the loftiest high growth tech stocks in which, a lot of their values in the terminal value in year 10, 15, 20, as opposed to boring old widget manufacturers. Who’s generating cashflow in years one through five.
I mean, there’s a lot of, I think there’s just active passive money selling and rebalancing as well. So, value is outperformed year-to-date. The S&P has now caught up over the last six months in terms of performance. So, the last six-month period to the NASDAQ, I believe I ran the numbers yesterday and yeah, growth has really sold off aggressively. We’ve seen Chinese tech sell off aggressively, with a lot of the geopolitical risks with trying to crack down on Alibaba and FinTech, and then you have the (SEC) or the U.S. government threatening to delist Chinese ADRs if they don’t completely comply to our audits. And so, you’ve got a lot of fear, uncertainty and doubt there. I think Bitcoin in the short term tends to trade with risk assets, the high beta risk asset in the short term, but in the mid-term to long-term it’s on its own cycle. And we’ve seen that time and time again. And that to me is a secular bet that I made years ago and I continue to make and you know, a lot of my channel, they were never crypto people and I convinced them because I’m not inherently a crypto person. And let’s say other macro stuff is, yeah. I mean, there’s no reason to buy bonds. I think real estate in the U.S., I know you guys have your own dynamics up in Canada, kind of crazy, but yeah, I think real estate has gone up with low interest, zero inventory and tons of people wanting to buy with more room because of work remote. And I don’t necessarily think we’re in a bubble. I don’t think you have that big, short moment where you have like, you know, just a low-income worker buying three levering up for Ninja Loans for three houses.
But I also think that, you know, single family rental types of investments aren’t necessarily the place to be. I think there’s some value to be found in probably commercial still. But kind of coming back to the stock market, I think, as you’ve seen tech stocks sell off. I bucket it into four things. And I think we’re somewhere in the middle of the rotation. I think that we can expect interest rates to keep going up and yields keep going up. So, I think a continuation of the reopening trade and some more to value, it should be expected, but I think you have tech stocks that have come down from really expensive, too expensive, and so I’m avoiding those. I think you’ve had tech stocks that are bundled with the expense funds. But if you dig down one or two layers deep, they actually really, really darn cheap. If they just print a few quarters of continuation of 50% plus growth, like, they’re actually really, really cheap. So, I think there’s a bifurcation there and being a fundamental analyst. I think you buying the cheap growth stocks and avoiding the ones that look cheaper, but are still hard to discount at a 10% discount rate on a DCF, you avoid those. And then on the value stock stuff, I think the big money macro flows are going to keep going to value, going to keep going to financials as we reopened. But I think as we reopen, I see a lot of value stocks, namely like airlines and hotels and casinos. It’s still actually look really expensive. I mean, I know they’re value stocks, but they look very expensive because to get them back to like eight times EBITDA or something or whatever the historical where they should be. I have to look out two and a half years, so I’m not willing to do that. So, the value stocks that I’m looking at are kind of the [Inaudible 00:28:50] I’m okay, buy-in at fair or 10% above fair valuations, but I think these are really strong companies, really strong balance sheets that will benefit greatly from the reopening trade, because I think that’s happening at least in the States. I know Europe has got their own thing right now, but like I just got my first dose of the Pfizer vaccine and now the country is basically opening up the vaccines to everyone. I think the reopening is going to happen really fast. And I think keeping cash at a minimum, I mean, cash is really good from a liquidity standpoint and jumping on opportunities. But it’s really hard for me to see how the fed doesn’t tighten and how inflation doesn’t start coming out.
We were going to spend over $2 trillion dollars on an infrastructure bill, a lot of the pieces are actually pretty good. But at least for certain industries, but yeah, I mean like the amount of money printing that has been happening, the amount of artificially keeping interest rates at near zero that’s been happening. I think we are at the end of the line of the D basement of our global reserve currency in the U.S. dollar. If you just pull up a fed funds rate over time, like it’s cycle after cycle after cycle, but we keep having to lower interest rates lower and lower and lower until we’re zero, right. So, I mean, does this keep going on until we’re like negative 10% rates? I don’t think so. So, I think what’s going to happen is some sort of diversification of power in the currency markets and devaluation in relative terms of the U.S. dollar and wages, which again, not to get into social issues. I think a lot of this is really driven, like economically the widening of the wealth gap.
Michael Kesslering: That’s really interesting to bring it to, yeah, some of the social aspects. One of the things and you had kind of alluded to it before with the Yolo investing. I guess, the tide of meme stock investing that we’ve had. It’s really, really accelerated during the coronavirus pandemic. It’s just come to a whole new level, as you’re investing in the markets right now, and you do have a unique lens of having built a community of many retail investors, while also having the institutional experience. When you’re looking at this trend, this macro trend of meme stock investing. Do you see it more as something that is going to result in more opportunity for you or you viewing it more through a risk management lens where you view it as something that you need to be very careful with, some of your security selection things? And then as well as say, if you were looking at shorts typically focused on the long, but if you were looking at short, something that you really need to be aware of?
Justin Oh: Yeah. I mean, I think institutions that are on watch, who are heavily short a company with over 30% short interest, right? I mean, what we saw with GameStop was just comical with the gamma squeeze, all that stuff. You saw a lot of retail investors with the proliferation of Robinhood and app-based options trading. They’ve been expressing their, I would say boredom at home and expressing that with out of the money, short dated call options. And so, when that happens, right, it’s the whole gamma squeeze. The broker has to de-risk it, all that stuff. And I know you guys have talked about that on the channel and I have on mine as well. Yeah, so I would say like, yeah, I don’t short. I’m not here. Especially in my stage of life and career, I’m not here to really, I don’t like, I’m not an optimist, right? I want to be an optimist, I’m a cautious optimist. I like investing behind stories that creates wealth for all of us.
Julian Klymochko: Plus, you don’t have to manage volatility.
Justin Oh: Yeah, plus I don’t have to really, like, my thing is, I’ve seen people that are smarter than me, better at discounted cash flows than me, better at accounting than me. Just absolutely fail at investing because at the end of the day, their assumptions were wrong because they missed the big, the wrecking ball that was e-commerce, right. Like, that thing’s undervalued, sure. But you’re missing the whole, like the bigger trends. So, I like to do this whole thing, especially on a personal portfolio kind of perspective. The 80/20 rule, right? Like 80% of your returns are going to come from 20% of like, the actual drivers, right. If you’re right about, like, if you can distill down an investment to like two things that you just have to be right about and everything else, like this is a good vehicle, meaning it’s not super leveraged. It has a good balance sheet. It’s not crazy overvalued. But if you’re right about these two things about the company like this market’s going to blow up and this company is going to have great market share and the street isn’t recognizing that, then you’re going to do much better. One you have to be right about the company. Two you have to be right about buying in without too much implied vol with enough time decay, right? Like all that stuff. I know you guys are really good at that kind of stuff, but I’m not a merger ARB guy. I’m not a derivative trader. And so, to me, I got to be right about the buy. Being right about the sell is if it goes 30% over my fair market value, like yeah, I’m going to consider selling it.
Julian Klymochko: Right, so Justin, prior to wrapping things up here. Quickly, I want to put you on the spot. And the question is, if you’re to hold just one investment over the next 10 years, what would it be and why?
Justin Oh: Can you narrow that down to me and give me an age and a risk tolerance?
Julian Klymochko: Oh, no. It’s just you, what do you want?
Justin Oh: Oh me.
Julian Klymochko: Yeah. You’re a personal call, if you’re restricted to just 1 over the next 10 years, can be whenever you want.
Justin Oh: Over the next 10 years. That’s interesting. I would say, me just to know, a 30-year-old high earning retirement account type of investor, who believes that I have 30 years before I touched the money, it’s probably Bitcoin. And the reason why I say that is because, if someone was a little bit more risk averse and he only had a 10-year view or a 20-year view, but was more risk averse, right. And needed more liquidity, I’d probably say Amazon, because I think they have the best ability to go reinvest their profits back into high ROIC projects, right. They will compound and manage your capital and shepherd your capital for you. But in terms for me, I’m in here to 10X my money, right. And I’m willing to take a bunch of shots to zero to get to a 10X, right. If I could pick one out of every three investments, we’re going to 10X, but the other two would zero out, right. Maybe not zero out, but cut in half, right. So that’s like a Bitcoin. I personally don’t think Bitcoins go into zero for sure. I mean, that was my downside thought back then, but, you know, I think the thesis is really simple here, right? It’s like you have a physical layer store value type of currency in, in gold. And now you have a virtual layer getting built out in the world and what is the virtual store of value kind of reserved currency going to be? And I think time and time again, virtual assets, virtual products tend to be much more valuable than their physical analogs. And so, you know, if Bitcoin just even equals gold, it’s going to be half a million dollars per Bitcoin, and it’s at 59 today. I mean that’s immense upside, high volatility, don’t get me wrong, but if you’re going to set it and forget it and buried in the ground and wake up in 10 years, I think that’s the thing of the play.
Julian Klymochko: Bold call, and prior to letting you go, where can investors find out more?
Justin Oh: Yeah, thanks so much. Yeah, like, absolutely go follow me on Twitter. I’m @acouplecents, acouplecents. Everywhere, Twitter, Instagram, acouplecents.com is my website. We also have a free daily email newsletter that I write every morning. You can sign up acouplecents.com/signup, A Couple Cents everywhere, basically.
Julian Klymochko: Okay, great. Well, thank you, Justin, for coming on the pod today, explaining what you’re up to at A Couple of Cents, your background, your whole investment philosophy and the value that you can add to retail investors. So, thank you very much. It was a fun chat.
Justin Oh: Yeah. Thanks Julian. Thanks Mike.
Justin Oh: Alright, all the best. Bye everybody.
Thanks for tuning in to the Absolute Return Podcast. This episode was brought to you by Accelerate Financial Technologies. Accelerate, because performance matters. Find out more at www.AccelerateShares.com. The views expressed in this podcast to the personal views of the participants and do not reflect the views of Accelerate. No aspect of this podcast constitutes investment legal or tax advice. Opinions expressed in this podcast should not be viewed as a recommendation or solicitation of an offer to buy or sell any securities or investment strategies. The information and opinions in this podcast are based on current market conditions and may fluctuate and change in the future. No representation or warranty expressed or implied is made on behalf of Accelerate as to the accuracy or completeness of the information contained in this podcast. Accelerate does not accept any liability for any direct indirect or consequential loss or damage suffered by any person as a result relying on all or any part of this podcast and any liability is expressly disclaimed.
