00:00:00
Legendary activist investor Dan Lope. He
00:00:03
of course is the CEO and CIO of Third
00:00:06
Point.
00:00:06
>> The lost art of shortselling has come
00:00:08
back and it's absolutely critical.
00:00:11
>> Doesn't matter what you do, you have to
00:00:12
be really selective. People talk about
00:00:14
stock pickers market. This is a bond and
00:00:16
credit pickers market.
00:00:17
>> When we were small, our main tool was a
00:00:20
shame and humor. Dan Loe turning up the
00:00:23
heat on Nestle over the weekend. The
00:00:25
shift has really been more towards a
00:00:27
dare to be great message. Activism
00:00:29
without proxy contest is like
00:00:31
Catholicism without hell.
00:00:34
>> You're very active on the Twitter as
00:00:36
well.
00:00:36
>> Oh wow.
00:00:37
>> You found your voice.
00:00:39
>> Lot a lot of emotion brewing there.
00:00:41
>> Can we actually start with that? Before
00:00:42
Twitter, you were actually quite active,
00:00:46
but they were in very different places.
00:00:47
I mean, you were in Wall Street Bets
00:00:49
before Wall Street Bets existed. Can you
00:00:51
just walk us through your evolution as a
00:00:54
as a uh public persona?
00:00:56
>> Sure. I mean, there was this brand new
00:00:59
technology
00:01:01
uh that came out called the internet.
00:01:02
And really shortly that thereafter uh
00:01:05
long before Reddit or any of these other
00:01:08
things, there were a series of of chat
00:01:10
boards. There was, you know, Yahoo,
00:01:12
there was something called Silicon
00:01:14
Investor,
00:01:15
um a few other ones. And people would
00:01:17
congregate in kibbitz. It was done
00:01:20
mostly anonymously and um it was an
00:01:23
interesting place to exchange ideas.
00:01:26
There was it was it was really the wild
00:01:28
west. People could pretty much say or do
00:01:30
anything, but there was a lot of but
00:01:31
there was a lot of substance there too.
00:01:32
It's not actually that much different
00:01:34
than from today.
00:01:35
>> You uh did you engage at all in any
00:01:37
trolling per se?
00:01:38
>> Well, some people use the term OG.
00:01:40
Sometimes I say I was the OT. Um
00:01:44
>> the original troll.
00:01:45
>> Yeah. No, I did. I mean, it was it was
00:01:47
fun. You know, I I didn't know I was one
00:01:50
day going to run institutional money and
00:01:52
have a big fund and, you know, I was
00:01:54
just having fun and uh and blowing off
00:01:58
steam and and uh yeah, it was fun. I
00:02:01
mean, investing is fun and particularly
00:02:04
on the short side. I mean, there's so
00:02:05
much humor in it when you detect these
00:02:08
companies, especially in the '9s. I
00:02:10
mean, that the it was really
00:02:12
unsupervised. There were some incredibly
00:02:15
fraudulent companies out there and it
00:02:18
was just fun to uncover them and kind of
00:02:21
taunt the management teams and
00:02:23
ultimately uh prevail.
00:02:26
>> You have one story above others that
00:02:28
kind of stands out in that era. I mean,
00:02:31
there were there were a bunch. There was
00:02:34
uh wow. Um, there was a company called
00:02:38
Act Trade that I remember run by a guy
00:02:41
who was like a repeat uh fraudster and
00:02:46
we uncovered it and and um you know I I
00:02:51
know we really got under this person's
00:02:53
skin and ultimately it was really just a
00:02:56
factoring company trading at five six I
00:02:59
don't remember what it some large
00:03:00
multiple of book value and they had
00:03:03
created a new technology called TADS I
00:03:05
don't remember what TAD stood for, but
00:03:08
they were basically repackaging
00:03:10
factory securities and saying that they
00:03:13
had some special technology. They were
00:03:15
financing refrigerators and things like
00:03:17
that.
00:03:18
>> Tell us um your evolution as an investor
00:03:22
when you started Third Point. I mean,
00:03:23
you started with very very little
00:03:25
capital. Now it's almost 30 billion of
00:03:27
AUM. your multistrat, but you learned at
00:03:30
Jeffre, I think, like you learned
00:03:33
helping people like David Ter allocate
00:03:35
capitals. Just walk us through how you
00:03:37
learned to invest.
00:03:39
>> Well, I I started um really fascinated
00:03:43
by investing and wanting to do it. I
00:03:46
think when I I remember when I was 10
00:03:47
years old, my dad took me my dad was a
00:03:51
notoriously bad investor himself. So, he
00:03:54
didn't give me any good examples. He was
00:03:56
a great lawyer, not a great investor.
00:03:58
But he took me to meet a broker and I
00:04:00
started investing. And then in high
00:04:02
school in the 11th grade, I got a job at
00:04:04
the branch office of Bear Stern, sorry,
00:04:08
of uh Payne Weber working for a guy
00:04:09
named Allan Crown who let me post his
00:04:12
books and make cold calls. And I think
00:04:14
we broke certain securities laws, but I
00:04:17
think the statute of limitations is
00:04:19
passed. I would trade um options on
00:04:22
accidental petroleum and teladine. there
00:04:24
was a lot of volatility and um I think I
00:04:27
had flurries of making money and lost
00:04:29
all of it a couple of different times
00:04:31
but it was a good good lesson. I
00:04:33
continued doing it in college and then
00:04:35
um my learning started really formerly
00:04:40
at Warberg Pinkis where I really learned
00:04:42
to value enterprises as my first job
00:04:44
private kind of across the spectrum of
00:04:46
private equity and venture capital.
00:04:50
I worked at a risk arb firm which was
00:04:52
really invaluable. Uh and then
00:04:56
skipping forward I had I had way too
00:04:59
many jobs in my 20s. Uh but I got really
00:05:01
serious at Jeffre. I had a amazing
00:05:03
opportunity to work on the distress debt
00:05:05
desk there. I started out as a research
00:05:08
analyst and I was just like drinking out
00:05:10
of a fire hose. There was so much
00:05:12
activity.
00:05:14
the securities were so cheap coming out
00:05:16
of distressed
00:05:18
and um it was you know the 10,000 hours
00:05:22
10,000 reps we would write up uh
00:05:26
different things every every day there
00:05:27
were big blocks of debt to move and I
00:05:29
really got that that was my real
00:05:31
learning point and you know I stress
00:05:32
this to people that you know everyone's
00:05:34
kind of sees mentorship as this sort of
00:05:36
hierarchical thing where you you know
00:05:39
learn from some wise older person but
00:05:41
it's I I I learned a ton from my
00:05:44
colleagues, from my own cohort, and I
00:05:47
learned a ton from my customers, you
00:05:49
know, like Eric Mindic was a um boy
00:05:52
wonder at Goldman. He was the youngest
00:05:54
partner.
00:05:55
>> Youngest partner at Goldman.
00:05:56
>> Yeah. Ran the ARB desk there and he had
00:05:59
this triumvirate or quadrumbate,
00:06:02
whatever the four four people. Uh I
00:06:04
don't want to leave them out, but Amos
00:06:05
Dker and um
00:06:10
can't some other guys. Anyway, they were
00:06:13
great and they really kind of brought me
00:06:14
into their thought process thinking
00:06:17
about event- driven investing and then,
00:06:19
you know, I covered some of the smartest
00:06:21
people in the business, including David
00:06:23
Ter. I got to watch their thought
00:06:25
process and I was like a, you know, like
00:06:27
a Chinese corporation that was like
00:06:30
copying and reverse engineering and
00:06:32
taking everything in and creating my
00:06:34
database of knowledge and my own
00:06:38
operating system. kind of taking the
00:06:40
best out of what all these different
00:06:42
people did.
00:06:43
>> And what was that style when you first
00:06:45
started Thirdp Point? What did you what
00:06:46
was that expression?
00:06:48
>> That was well I think that you know we
00:06:50
call it event driven investing. It was
00:06:52
really less focused on the quality of
00:06:54
business more focused on very complex
00:06:58
transactions takeovers spin-offs risk
00:07:01
risk or arbitrage bankruptcies
00:07:03
privatizations demutralizations. And
00:07:06
these transactions created unbelievable
00:07:09
opportunities for alpha because of the
00:07:11
confluence of dislocation,
00:07:15
opacity, kind of time, but also this
00:07:18
goes and nothing changes. I always quote
00:07:20
this Jesse Livermore line, there's
00:07:22
nothing new under the sun. A real focus
00:07:25
on management incentives. So in all
00:07:27
these different kinds of transactions,
00:07:29
management was incentivized to sandbag
00:07:32
their numbers during a time when there
00:07:34
was an excess supply of securities where
00:07:37
their options were being set. And we as
00:07:40
co-investors got to come in with these
00:07:42
depressed projections and ride along not
00:07:45
just the um well we got to ride along a
00:07:49
few different things that would happen.
00:07:51
greater transparency and understanding
00:07:53
of the business coverage uh companies
00:07:56
that that delivered a topline and
00:08:00
margins and roe and everything else
00:08:02
better than expectations. So it was
00:08:04
really a golden era for that type of
00:08:06
investment
00:08:07
>> and from where that started to what
00:08:09
third point is today just describe that
00:08:12
and where you want to where do you go
00:08:14
from here?
00:08:14
>> Yeah. So stylistically that event um
00:08:18
approach it's it's it's still something
00:08:21
we think about it's in our um it's in
00:08:25
our framework but I think what happened
00:08:28
really when technology became a bigger
00:08:32
uh force but really everything changed
00:08:35
is a greater focus on business quality
00:08:38
and
00:08:40
um innovation and disruption and more
00:08:43
thematic on the on hand understanding of
00:08:46
consumer trends what's going on in
00:08:48
financial services what's the economic
00:08:51
macro backdrop that's that's supporting
00:08:53
all this and of course the big topic of
00:08:56
this event you know AI is sort of the
00:08:59
culmination of that but all these major
00:09:02
technological innovations that have
00:09:04
really happened since
00:09:06
>> you could make money before by not being
00:09:08
technology savvy in the markets
00:09:10
>> you could be technologically illiterate
00:09:11
or just say I don't do it and you could
00:09:13
also be even more or less e you know up
00:09:16
until the GFC I think you could be more
00:09:18
or less economically illiterate and make
00:09:20
a lot of money
00:09:21
>> and now
00:09:24
I you wouldn't want to be either one of
00:09:26
those things I mean given how much how
00:09:28
much more important
00:09:29
>> like the tech through line needs to be
00:09:31
understood everywhere
00:09:33
>> even if you're like blue owl and you're
00:09:35
trading I mean blue owl obviously is
00:09:36
very sophisticated in tech now but
00:09:39
>> any pool of capital that used to not be
00:09:42
correlated is effectively correlated
00:09:45
I mean, yeah. Yes. Yeah, you could say
00:09:48
that. And I just want to answer your
00:09:49
question just to kind of fast forward
00:09:50
and give people a snapshot of what we do
00:09:53
today.
00:09:54
>> Rob Schwarz, who's my partner, and we
00:09:57
took Kempo Karate together when we were
00:09:58
10 years old.
00:10:00
>> It was a purple belt. I think I never
00:10:01
made it past yellow belt, but um we
00:10:04
reconnected at our 20-year reunion in
00:10:08
I'm we're a I'm aging both of us. Sorry
00:10:10
to give up your secret, Rob. uh in 1999.
00:10:15
It was our 20-y year reunion, and he was
00:10:18
working as a a sales rep for wireless RF
00:10:22
components. And I said, "Wow, this guy'd
00:10:24
be great to do channel checks for us."
00:10:27
And then I asked him um a couple years
00:10:30
later say, "Hey, you meet some smart
00:10:32
people. If you ever come across a really
00:10:34
savvy engineer, we should invest." We
00:10:37
didn't know what we're doing. We weren't
00:10:38
venture capitalists, but we were getting
00:10:39
behind person. There was a guy named
00:10:40
Dave Fischer started a company called
00:10:42
radio communications. They made chips.
00:10:45
He made chips that were I still remember
00:10:47
ABG compatible for Wi-Fi base stations.
00:10:51
And ultimately the company was sold to
00:10:53
Texas Instruments. And you know we've I
00:10:56
won't go deep into our our our venture
00:10:58
business, but that we started to do
00:11:00
within the fund. We've done a couple of
00:11:03
dedicated funds. So we have that strand
00:11:07
of activity. We can talk about a little
00:11:10
bit more about what we're thinking and
00:11:11
how we're seeing this. But I think what
00:11:13
ultimately what I want you to get to is
00:11:14
that all these things are interconnected
00:11:16
and come together under the platform
00:11:18
that we have today because we have the
00:11:19
main hedge fund which does credit equity
00:11:23
long short credit is both structured
00:11:25
credit and high yield. We have a CLO
00:11:28
business that we acquired. We started a
00:11:31
um a private credit business. Uh it does
00:11:36
traditional private credit, direct uh
00:11:39
sponsor financing, direct lending and
00:11:41
workouts which is very important. So
00:11:43
credit solutions as they call it. A lot
00:11:45
to do there. And then we started an
00:11:48
insurance company uh a few years ago.
00:11:51
It's not the first insurance company we
00:11:52
did. We did a PNC company, but this one
00:11:54
is was wholly owned. Now we own half of
00:11:57
it. And the insurance company
00:12:00
um captures basically the investment
00:12:02
grade part of what we do. So private
00:12:06
credit through structured vehicles,
00:12:07
structured credit, whole loans,
00:12:11
um uh investment grade both private and
00:12:15
and and public, but we also can use our
00:12:17
surplus capital in very interesting
00:12:19
ways. So
00:12:20
>> So what's the role of the human? What's
00:12:22
the role of Dan Loe in running
00:12:24
thirdpoint 10 years from now? Like 10
00:12:29
years before Dan Lo was 100% of
00:12:31
thirdpoint
00:12:32
>> and then there's now there's agents,
00:12:34
there's AI, there's all this learning,
00:12:35
there's all of this data.
00:12:39
Where do you see the role of the human?
00:12:41
Where do you see the role of systems
00:12:44
making decisions, allocating capital,
00:12:46
managing risk? I mean it's a so first of
00:12:49
all investing now like first of all the
00:12:52
my time is spent primarily on managing
00:12:55
the hedge fund which for now is the
00:12:58
biggest capital pool and most important
00:13:01
business that we're in.
00:13:02
>> Yeah. the human element. I think this is
00:13:04
true for everyone you have here like the
00:13:07
the element of uh the social component
00:13:10
that the the human network of knowing
00:13:14
people being able to to capture
00:13:16
opportunities work with people interact
00:13:20
like that's never going away. like
00:13:21
you're never had going to maybe maybe
00:13:23
you can theorize that there will be
00:13:24
agents that will sit at Andre and
00:13:27
Horowitz and who whoever else your funds
00:13:30
but I think the human will always have
00:13:32
to be there because people like to
00:13:35
you know
00:13:35
>> you want to know who's making or losing
00:13:37
the money.
00:13:37
>> Yeah. There's a there is a thing that I
00:13:39
think the the the agents of the AI will
00:13:41
never really be able to look in your eye
00:13:43
and assess all the things that
00:13:45
>> you you've expanded your philosophy of
00:13:48
investing in companies from cheap catal
00:13:51
uh cheap securities with catalyst is I
00:13:53
think how you described it on a podcast
00:13:55
recently um and now you're very
00:13:57
concerned about moes defensibility and
00:14:00
just the quality or the brittleleness as
00:14:02
Chimath likes to remind us of the
00:14:04
revenue so maybe could you tell us how
00:14:07
you evolved that core thinking about the
00:14:10
quality of companies and then maybe give
00:14:12
us some examples of the companies that
00:14:15
now fit through that filter where you
00:14:17
feel they have a moat, you feel they
00:14:19
have durability.
00:14:20
>> Yeah, obviously that's everything right
00:14:21
now. Chimath talks about the time
00:14:24
bounded value of companies and I think
00:14:28
that's essential. um what what are the
00:14:31
companies that are going to be around
00:14:34
seven to 10 to 20 like what what what
00:14:36
are the real moes that exist out there
00:14:38
and it's it's it is harder now I don't
00:14:43
think we can I I don't know that we can
00:14:46
really go out you know 10 or 20 years
00:14:48
ago by the way I think we deluded
00:14:49
ourselves earlier because I think if you
00:14:51
ask people about the moat around you
00:14:53
know IBM or you know some of the other
00:14:57
companies
00:14:58
>> AOL
00:14:59
>> AOL Well, Yahoo, you know, you say the
00:15:02
same thing. I mean, look, we're we're
00:15:04
we're we're investing
00:15:07
>> outside of tech into uh companies that
00:15:12
have uh you know, some great Well, first
00:15:16
of all, it also comes back to the
00:15:18
management because we can't really just
00:15:21
look at a product or a technology and
00:15:25
say, "Oh, this is going to be it
00:15:27
forever." So we really look for a
00:15:29
management team that we think will be
00:15:31
adaptable and just like you guys were
00:15:33
saying last night, you don't want to be
00:15:35
on boards of companies. These are things
00:15:37
that they should be doing. So I think
00:15:38
that's a huge part of it like finding
00:15:40
management teams that you really believe
00:15:41
in that have
00:15:43
>> have a proven ability to stay ahead of.
00:15:46
>> Is that quantifiable or is it still very
00:15:48
much a subjective um
00:15:50
>> sorry is what
00:15:50
>> is it quantifiable assessing the
00:15:52
management team? Have you built a rubric
00:15:54
for doing that? No, it's still very
00:15:55
subjective qualitative. I I think it's
00:15:58
one of those things after 30 years
00:15:59
there's like a pattern recognition and
00:16:01
you
00:16:02
>> let me ask a question on um on screening
00:16:05
you know in the I think you've said
00:16:07
recently publicly that there's a lot of
00:16:10
opportunities on the short side in the
00:16:12
market right now for the first time in a
00:16:15
long time how do you start top down is
00:16:18
that a top down or is it an
00:16:19
opportunistic an you know something
00:16:21
comes across the wire and you guys jump
00:16:23
on it in kind of an event- driven way or
00:16:26
do you guys have kind kind of a
00:16:27
systematic top- down approach to looking
00:16:29
at the market and finding those
00:16:31
opportunities.
00:16:32
>> Yeah, there's no one approach to it. I
00:16:34
think one thing that we've avoided is
00:16:37
kind of a valuation
00:16:39
a solely valuationbased approach.
00:16:42
There's a I've just seen
00:16:44
I've seen too many people get run over
00:16:46
by shorts that have dumb valuations, but
00:16:51
they get captured on, you know, Reddit
00:16:54
or one of these other things and they
00:16:56
just get their, you know, or like some
00:16:58
of these space companies right now that
00:17:01
there's no rhyme or reason. We had a a
00:17:04
really strong view on homebuilders from
00:17:06
last year
00:17:08
that uh there were two things going on.
00:17:12
It wasn't just
00:17:14
it wasn't just rates, mortgage spreads
00:17:17
that were depressing housing prices.
00:17:20
that home prices that that the home
00:17:22
building industry was first structurally
00:17:26
um impaired because of the way that they
00:17:29
were all pretending to be NVR which is
00:17:31
say all pretending to be asset light but
00:17:33
they had massive commitments to these
00:17:35
land pools which in in things that they
00:17:37
said were options but they were really
00:17:39
very committed in the capital and that
00:17:41
that value was going on but but that the
00:17:44
the home building industry was really
00:17:46
the last industry that had this postcoid
00:17:49
hangover over of inventory disruptions
00:17:52
and and pricing um pricing that really
00:17:57
made no sense. You know, all those
00:17:59
prices went up to unsustainable levels,
00:18:02
but so did um building costs went up and
00:18:06
and buyers are no longer able to pay
00:18:09
those prices at the current current um
00:18:13
uh in the current financing environment.
00:18:15
But that the but there have also gotten
00:18:17
squeezed by by inflation and costs. So
00:18:20
that's been you know something so we've
00:18:23
been short on things related to that.
00:18:25
>> Let me bring Saxs into the discussion
00:18:26
here. Sax we've learned uh a little bit
00:18:29
about distribution of public securities.
00:18:31
You're famous in the all-in theme song
00:18:34
of this great quote let your winners
00:18:36
ride. I'm curious when you hear Dan
00:18:37
talking about this um how you think
00:18:41
about as a private market investor how
00:18:44
to navigate distributing equities and
00:18:46
and how you've sharpened your blade
00:18:48
about you know which ones have brittle
00:18:51
or you know more robust revenue.
00:18:54
>> I mean that's I'm sure you guys share
00:18:56
this. It's it's one of the most vexing
00:18:58
questions. We were um we were private
00:19:02
investors in Palunteer and I think we
00:19:05
sold all our stock in the 20s. Huge
00:19:07
mistake.
00:19:08
>> Gosh, I missed a 10x after going public.
00:19:11
>> Yeah.
00:19:11
>> Or up 8x or something.
00:19:12
>> We were um private. We led the B round
00:19:16
in in Upstart. Uh that was one I think
00:19:21
we learned not to go on boards anymore
00:19:23
because it restricts your ability to be
00:19:25
liquid. But we're also early investors
00:19:27
in in Nphase and we um sold some stock
00:19:32
on the IPO and then took a tax hit and I
00:19:35
think sold it under a dollar and the
00:19:37
stock I think had we stayed on would
00:19:39
have made $4 billion. I am not claiming
00:19:41
to have any great expertise in knowing
00:19:43
how to best distribute our
00:19:45
>> dude markets are brutal.
00:19:47
>> It's so hard. I mean you're
00:19:49
>> No, this is why I bring it up. We've all
00:19:50
struggled with this. Sax, where did
00:19:52
where have you wound up?
00:19:53
>> I I think it's case by case. I mean,
00:19:55
there's some companies where, like I was
00:19:58
on a board and you can't sell and you
00:20:00
end up regretting that. And then there's
00:20:02
others where the best thing to do is
00:20:04
just hold on to that stock forever.
00:20:06
>> Examples in your portfolio where you
00:20:09
made great decisions.
00:20:10
>> I'm not going to talk about the ones
00:20:10
that didn't do so well, but um but no, I
00:20:13
mean, look, I've I've owned um Meta and
00:20:16
Palunteer as a private, you know, as a
00:20:20
venture investor, as an angel investor.
00:20:22
And you sold
00:20:23
>> and the question well I sold some and
00:20:24
held on to some obviously in hindsight
00:20:27
you take Meta I think Meta IPOs Facebook
00:20:30
back then IPO 50 billion
00:20:34
>> 50 billion now it's went down to 18 now
00:20:36
it's
00:20:37
>> can you imagine how alternate universe
00:20:41
>> 400 right
00:20:42
>> Chamath never sold his Facebook how
00:20:44
insufferable he'd be or if Freeberg
00:20:47
never sold his Googleberg would be worth
00:20:49
10 billion
00:20:50
>> I I would be nearly as What's that?
00:20:52
>> I wouldn't be nearly as good.
00:20:53
>> It's like a like an analyst
00:20:55
>> because it created tension.
00:20:57
>> It's not real. It's not It's not earned.
00:20:59
>> So back in those days, 10 years ago, we
00:21:01
thought a hundred billion dollar market
00:21:03
cap company was pretty much as big as
00:21:04
anything could get.
00:21:06
>> Yeah.
00:21:06
>> And so Facebook at 50 or whatever, it's
00:21:09
like the upside was to 100. And things
00:21:12
are just totally different now. We have
00:21:13
multi-trillion dollar companies. The
00:21:15
market's so much bigger. And that that
00:21:17
changes. I mean, that's a rub against
00:21:19
Nvidia, which is a $5 billion company,
00:21:22
and people feel like it's sort of a
00:21:24
ceiling on it. I think we'll look back
00:21:26
at some point in time and say that was a
00:21:28
foolish way to think about Nvidia given
00:21:30
its dominant position and its valuation
00:21:33
relative to
00:21:34
>> Is it undervalued right now?
00:21:35
>> Yeah, absolutely. On earnings over the
00:21:37
next two or three years.
00:21:39
>> And is it because people are having a
00:21:41
hard time processing the largest entity
00:21:44
that's ever existed in human? I I think
00:21:46
that and and the narrative that that the
00:21:49
well first of all technically there's
00:21:51
all this other stuff that's growing
00:21:53
faster and going up more people are and
00:21:56
the long short pods are structured such
00:21:59
that they have to be short something. So
00:22:00
Nvidia feels like a safe short by the
00:22:02
way Google was a safe short um Amazon
00:22:06
was a safe short. So I mean this just
00:22:08
happens and sometimes they'll languish
00:22:10
at a valuation then they they break out.
00:22:12
I think that'll eventually happen with
00:22:14
Nvidia.
00:22:15
>> Well, there's probably some boundary
00:22:16
condition discount to that, right? Like
00:22:18
we've never seen a valuation like this.
00:22:20
You can't overbet that.
00:22:22
>> I want to shift topics for a second. I
00:22:23
just want to talk society and culture
00:22:25
before we run out of time with you.
00:22:27
There was this uh incredible thing that
00:22:29
you told me which I relate to these guys
00:22:31
which is um you're very passionate about
00:22:33
criminal justice reform and specifically
00:22:36
you were a key person to get the pardon
00:22:39
of Ross Albrook. Tell us your views on
00:22:43
criminal justice, why it hit such a
00:22:46
nerve and then why Ross Albert? What was
00:22:49
what happened there that said I must
00:22:52
fight for this guy?
00:22:53
>> Let me take a step back and just talk
00:22:55
about my framework for philanthropy,
00:22:58
which is I think not unlike Brad
00:23:00
Gersonner and many people in the room
00:23:02
here is that I care I would say
00:23:05
everybody up here. I care deeply about
00:23:08
income inequality. I care deeply about
00:23:12
making sure that as many people have
00:23:14
opportunities to the incredible things
00:23:16
that we've all had here. So, my interest
00:23:18
in criminal justice reform really
00:23:20
started earlier with an interest in
00:23:22
education
00:23:24
and education reform. And I was very
00:23:26
lucky to get on the uh to start
00:23:28
supporting get on the board and
00:23:29
ultimately be chairman of successmies
00:23:32
which is a charter school network in New
00:23:34
York. And I do think nobody talks about
00:23:37
it, but the thing that's hiding out in
00:23:39
plain sight for everybody is that the
00:23:42
problems with income inequality isn't
00:23:45
that, you know, Jeff Bezos is going to
00:23:48
be a trillionaire or all these other
00:23:52
people are gaining wealth. It's that
00:23:53
we're not equipping
00:23:56
children and particularly the most
00:23:58
vulnerable children with the
00:23:59
intellectual tools that they need to
00:24:01
succeed and compete. And it's not
00:24:04
because poverty is this intractable
00:24:06
thing that can't be overcome. We've
00:24:08
proven that it can be. The problem is
00:24:11
that the unions and the basic principles
00:24:13
that we all use in business, which is
00:24:15
accountability and merit and cultivating
00:24:19
talent is set aside for the benefit of
00:24:22
adults who are part of these unions. And
00:24:24
it's a systemic thing. It's not a lack
00:24:26
of money. It's really a lack of it's
00:24:29
just a broken structure. Accountability
00:24:32
is I think what I'm hearing. Yeah.
00:24:33
>> So, I spent a lot of time on that. Just
00:24:35
leave it at that. Um I I then became
00:24:38
aware and it was interesting. I was
00:24:39
looking for issues that conservatives,
00:24:41
you know, it's great to see Federman and
00:24:44
McCormack up here like what are issues
00:24:46
that conservatives and liberals,
00:24:49
progressives can agree on. Hopefully,
00:24:51
they can agree that we want young people
00:24:52
to be better educated. I think we can
00:24:54
also agree that whenever you put the
00:24:56
government in charge of something,
00:24:58
they'll it up one way or another. I I
00:25:01
want to give you guys a shout out though
00:25:03
for noting up this private public
00:25:05
partnership with the investments in the
00:25:07
private sector because I think this
00:25:09
administration has done enormously good
00:25:11
job at backing companies. But let's put
00:25:13
that aside. It's one of the rare
00:25:15
instances where I've seen that. But um
00:25:18
>> can you give an example of that that's
00:25:19
standing out in your mind? We have a
00:25:21
company in our portfolio called Atom
00:25:23
Computing that with many other quantum
00:25:27
companies um has gotten money from the
00:25:31
government and we were just super
00:25:32
impressed that they uh how they
00:25:36
contracted with us to engage with them
00:25:38
in cryptography and to meet the
00:25:41
government's needs but also in the
00:25:43
financial component. They drove a really
00:25:45
tough bargain. the the the uh government
00:25:48
the taxpayers are going to make a ton of
00:25:50
money on this and their involvement also
00:25:53
has will contribute meaningfully to the
00:25:55
value of this business. It's just like a
00:25:57
win all.
00:25:57
>> So they're an investor and a customer,
00:25:59
>> right? And they are capturing part of
00:26:02
that value as a customer for the
00:26:05
American people which they I think
00:26:07
everybody deserves.
00:26:08
>> Yeah.
00:26:09
>> Okay. So back to the
00:26:10
>> So criminal justice reform, first of
00:26:12
all, there's a lot of bad people in
00:26:13
jail. I'm not one of, you know, I think
00:26:15
the criminal justice uh
00:26:18
uh movement has been undermined by uh
00:26:21
folks who see it as an opportunity to
00:26:24
not prosecute, not deal with bad people
00:26:28
that are out there. But there's also a
00:26:31
lot of people that are rehabilitated.
00:26:34
Uh well, there's really three different
00:26:36
categories. There's people who are
00:26:37
falsely uh convicted. There are people
00:26:41
who have shown
00:26:43
uh contrition and rehabilitation
00:26:45
and those then there are those who just
00:26:48
had a really
00:26:50
disproportionate sentence relative to
00:26:52
what they did. There's a case right now
00:26:55
of of a guy named John John Grubman who
00:26:58
was uh dealt in gray market diapers and
00:27:01
formula. He got an 18-year sentence for
00:27:03
dealing these goods. Uh in the case of
00:27:06
Ross Olrich, I was approached by someone
00:27:08
and this just seemed Ross as people may
00:27:12
know uh probably this room knows he was
00:27:15
sort of a a folk hero because he had
00:27:19
this sort of cat-and- mouse game with
00:27:20
the government. He ran Silk Road. Silk
00:27:23
Road was a one of the first like
00:27:25
crypto-based exchanges. He acknowledges
00:27:28
that he did things that were illegal
00:27:30
that he should have done. He regret it
00:27:32
regrets it. uh drugs were were dealt on
00:27:34
the exchange. Um
00:27:38
but that that's that's what he was
00:27:40
accused of. The government later said
00:27:42
that there were murder for for hire uh
00:27:46
incidents that was never that wasn't in
00:27:48
he was never prosecuted for that and he
00:27:51
denies that that ever happened. But in
00:27:52
any case um he was sentenced to a double
00:27:56
life double life plus 40 years. who
00:28:01
knows how he got the extra 40 years on
00:28:02
there and how he would spend that after
00:28:04
he'd been there for two lifetimes. And
00:28:07
um
00:28:09
there there's a a woman I met through
00:28:11
Intel named Rivetz who alerted me to
00:28:14
this friends with Olaf Carlson Wii and
00:28:18
uh sort of the crypto insiders. And um I
00:28:23
I thought about this like this guy's got
00:28:25
no way out. There's no there's no
00:28:27
recourse through the system to get
00:28:29
someone with a life sentence out of
00:28:31
jail. This this will only work with a
00:28:33
presidential pardon. And we worked on
00:28:36
it. We had some familiarity with the
00:28:38
pardon process. Worked on it. Um then I
00:28:42
approached Charlie Kirk about this. And
00:28:45
Charlie really embraced this and
00:28:47
embraced this individual as someone who
00:28:50
had been falsely or not falsely but
00:28:53
unfairly sentenced.
00:28:55
He took it to the president. Um Charlie
00:28:58
had a also had an attorney named David
00:29:01
Warrington who's currently the uh
00:29:04
>> White House counsel.
00:29:05
>> White House counsel. I just found out a
00:29:07
couple days ago because I was talking to
00:29:08
him that he was his lawyer for a decade.
00:29:11
Um so I'm not taking credit for this.
00:29:12
I'm not saying Charlie does it. It takes
00:29:14
a village. But David had been working on
00:29:16
it. And on the last day of
00:29:20
Trump's 45th term,
00:29:24
we we were we were certain that he was
00:29:26
going to get out. And the Justice
00:29:28
Department, for whatever reason, said,
00:29:31
"If you if if you if you commute his
00:29:35
sentence, we're going to go after you to
00:29:37
to the president." So he as I understand
00:29:41
um he uh withdrew the commutation. So
00:29:46
four years went by and um really Charlie
00:29:49
took the lead on this. This was his only
00:29:51
ask of the president and the president
00:29:52
at a uh to libertarians and to the
00:29:56
crypto community promised to uh deal
00:30:00
with this and not only was sentence
00:30:02
commuted but is pardoned and today
00:30:04
Charlie is married. Not Charlie, sorry.
00:30:06
Um, Ross is married, is having a child,
00:30:10
and uh living a free life after spending
00:30:13
a decade, which is probably argue
00:30:15
whether that was the right amount or
00:30:16
not. Um,
00:30:18
>> and you feel like you should is there a
00:30:20
role for you to play in doing more of
00:30:22
this? Was this a
00:30:23
>> No, I continue I I continue to work on
00:30:26
cases. is there's an organization called
00:30:28
Olive uh and we work
00:30:32
you know constantly on different people
00:30:34
and I think it's you know look it's I I
00:30:37
feel like as philanthropists it's great
00:30:39
to do to work with organizations
00:30:43
and there's a lot of great organizations
00:30:45
I work with I do a lot fighting
00:30:48
anti-semitism and um supporting Jewish
00:30:51
identity also but I also think that we
00:30:54
can help people one at a time. I think
00:30:57
it just really nurtures the soul and I
00:30:59
think it just good thing to do.
00:31:01
>> All right, let's give it up for Dan. Dan
00:31:03
Logan.
