[ { "i": 0, "speaker": "Speaker 1", "text": "Let's bring in Martin Shkreli to break it down for us. >> I believe he's here. How you doing, Martin? Good to see you again. >> Hey guys, I'm doing great. How are you? >> Oh, perfect. >> Perfect. >> Uh, how's your last >> take us through it?" }, { "i": 1, "speaker": "Martin Shkreli", "text": ">> 24 hours. >> What's the last 24 hours been like for you? >> It's It's been interesting. I do invest myself, so uh it's been a it's been a probably one of the craziest months uh in Wall Street history." }, { "i": 2, "speaker": "Martin Shkreli", "text": "Um, I was talking to some friends last night about >> long-term capital management, uh, Amaranth, uh, other famous liquidity driven blowups. >> Mhm. >> And, uh, this is up there. Uh, and, um, yeah, it's just a really crazy thing." }, { "i": 3, "speaker": "Martin Shkreli", "text": "We had heard rumors, um, sort of mid last week and then they really started crystallizing, um, last night, um, and this morning. Obviously, sort of a fatal blow. I actually think they did a wonderful job of of keeping it relatively quiet." }, { "i": 4, "speaker": "Martin Shkreli", "text": "I think some players were already positioning say early in the week Monday Tuesday looking to do what my old boss Kramer used to call uh you know shooting against a fund." }, { "i": 5, "speaker": "Martin Shkreli", "text": "So if you know know somebody has to liquidate the best thing for you to do unfortunately sadly >> Darwinian is to go sell all the positions you have in common and go start shorting everything they have. >> Yeah." }, { "i": 6, "speaker": "Martin Shkreli", "text": "um and it accelerates the the sort of downfall as quickly as you can and this is a very common practice when these things you know happened." }, { "i": 7, "speaker": "Martin Shkreli", "text": "Um certainly not something I I had overlap positions with them so certainly not something I would do but know a wide number of funds that were shorting all these stocks hoping to cause a panic and a crash. How do you trace back the start of this correction?" }, { "i": 8, "speaker": "Martin Shkreli", "text": "Is it the war? Is it oil? Is it jitters around open source or just hyperscaler capex? There's so many different narratives around why the AI >> infrastructure trade, the bottleneck trade might be weakening." }, { "i": 9, "speaker": "Speaker 1", "text": "At the same time, it feels like there's some really solid progress and the models are progressing pretty much as expected. >> At the same time, it feels like there's some really solid progress and the models are progressing pretty much as expected." }, { "i": 10, "speaker": "Speaker 1", "text": ">> At the same time, it feels like there's some really solid progress and the models are progressing pretty much as expected." }, { "i": 11, "speaker": "Speaker 2", "text": "At the same time, it feels like there's some really solid progress and the models are progressing pretty much as expected. Yeah. Yeah. You have the labs having some of the best months in business history of any companies ever." }, { "i": 12, "speaker": "Speaker 1", "text": "Yeah." }, { "i": 13, "speaker": "Martin Shkreli", "text": "But then all the infrastructure correction. Yeah. None of that stuff matters. You know, [laughter] the only thing that matters is is the propensity of the buyer and seller to buy or sell. And what you had happen was the smart guys get in early, start buying, see the prices go up, buy some more." }, { "i": 14, "speaker": "Martin Shkreli", "text": "And then less smart guys take take note and say, I want to do that. I want to be up 400% this year, too. Guys like me started buying right near the top. [laughter] was just like, \"Hey, this is great. I love market." }, { "i": 15, "speaker": "Martin Shkreli", "text": "So they're also the first to sell. >> The first to panic. >> And it just creates this like, you know, every bubble's sort of the same. You have this euphoria, this peak, and then, >> you know, everyone sort of panics at once. And [clears throat] >> you know, the fundamentals basically don't make a difference." }, { "i": 16, "speaker": "Martin Shkreli", "text": "you know, I think they, >> you know, they sort of drive the marginal buyer and seller, but >> you know, the 80 or 90% of the assets shareholders shareholders don't change hands. It's that 5% of the margin that's deciding the price." }, { "i": 17, "speaker": "Martin Shkreli", "text": "And if that 5% is in the state where they're they're levered up 3x or 4x as we heard uh SALT is uh was a 4x levered fund, which is that's a lot of leverage. You know, a 25% draw down takes you out of business." }, { "i": 18, "speaker": "Martin Shkreli", "text": ">> Yeah. Um, interestingly, we heard that three firms were bidding on the assets." }, { "i": 19, "speaker": "Martin Shkreli", "text": "So, uh, Jane Street, Millennium, and Citadel were sort of brought in in a closed closed circle sort of late Friday to to bid on >> the remains of of the the firm and uh, we got offered uh, a look at $100 million of entropic stock, which we were puzzled >> puzzled by." }, { "i": 20, "speaker": "Martin Shkreli", "text": "you know some sometimes you see these SPVS sort of interest comes across uh >> you know here and there and we thought that was interesting. Um I sort of raised my eyebrow and it's like is that Liupold?" }, { "i": 21, "speaker": "Martin Shkreli", "text": "It's because you know sometimes when you want to sell four billion dollars of something you don't come out and say you want to sell four billion. [laughter] >> You come out and you say I want you want to sell $100 million of it." }, { "i": 22, "speaker": "Martin Shkreli", "text": "And usually a guy who wants to buy a hundred is enough to buy 500 or more. >> And you sort of fill them out and say here's 100. Okay. Do you want five by any chance?" }, { "i": 23, "speaker": "Martin Shkreli", "text": "And then you know your eyebrow starts to raise a little bit that you know maybe he's got even more. >> Um now of course this is a really odd situation. So, I I we we heard Millennium did put in a bid." }, { "i": 24, "speaker": "Martin Shkreli", "text": "Uh Citadel's bid was better. You know, I think Ken wants to be the guy >> that everyone goes to when they're in trouble. And that's the, [clears throat] you know, Buffett is getting older." }, { "i": 25, "speaker": "Martin Shkreli", "text": ">> This is not the kind of stuff Buffett wants to do anyway. >> U but you know, Citadel did this in the Amber deal." }, { "i": 26, "speaker": "Martin Shkreli", "text": "You know, when Amber blew up uh natural gas futures, I think Citadel took that portfolio and virtually every blow up in finance, >> they come to the rescue." }, { "i": 27, "speaker": "Martin Shkreli", "text": "Enron where they just raided all the talent. >> Yeah, they wanted to do an Enron as well. I I think Yeah, they just sort of Ken is a very smart guy." }, { "i": 28, "speaker": "Martin Shkreli", "text": "sort of shows up and says, you know, how can I, you know, how can I, uh, you know, be a >> partner to the Goldman's and the Bank of Americas when they need to get out, you know, uh, of a really risky position? They basically take over the book, right? So, if you, I'll give you sort of an example, you're asking the question." }, { "i": 29, "speaker": "Martin Shkreli", "text": "So, let's say, you know, you're at 45 billion, you know, sort of try to trace this back and you're you're uh, you know, 10 billion of that is in Anthropic from what we understood. Uh so you have $30 billion of cash in your bank account." }, { "i": 30, "speaker": "Martin Shkreli", "text": "Uh and running 4x lever means you have 120 billion gross market value. Oh. Um so if your GMV drops, I don't know, 25%. That doesn't sound so bad at 120 billion." }, { "i": 31, "speaker": "Martin Shkreli", "text": "Uh maybe that's, you know, I don't know, uh 30 billion. So you're down to 90 billion. But that's not your equity. So your equity drops from 35 billion to 5 billion." }, { "i": 32, "speaker": "Martin Shkreli", "text": "Yeah. And no no prime broker is going to let you keep 90 billion of gross market value because once you dip your equity below zero. It's their loss, not yours." }, { "i": 33, "speaker": "Martin Shkreli", "text": "And they're not going to lose a penny after Archegos and after these other kind of blowups, that's not their job." }, { "i": 34, "speaker": "Martin Shkreli", "text": "And they kind of have the right to take over your portfolio, which is is sort of uh, you know, something I hope nobody ever has to experience. But they basically call you in and say, \"Listen, you know, these are our our assets now, and you know, we're we're going to decide what\"" }, { "i": 35, "speaker": "Martin Shkreli", "text": "their what their disposition is going to be." }, { "i": 36, "speaker": "Martin Shkreli", "text": "And the rumor is over the weekend he contacted about 10 parties to place Anthropic in an effort to shore up liquidity, selling the Anthropic stake for allegedly that the offer was at 1.1 trillion uh equivalent market cap." }, { "i": 37, "speaker": "Martin Shkreli", "text": "Um, which you know is I think roughly where it's trading. Uh and um you know it's unclear whether that was sold or half of it was sold is what we reported um that that half of it was sold." }, { "i": 38, "speaker": "Martin Shkreli", "text": "It's still a little unclear who bought that what's happening exactly but that's that's the best we've got." }, { "i": 39, "speaker": "Martin Shkreli", "text": "And then, you know, when it came to um the public, you know, book, it does sound like um you know, the buyer of that book basically got a from what we were told a three to four billion dollar insta mark up." }, { "i": 40, "speaker": "Martin Shkreli", "text": "So, you they basically now have to work out they have to work out of three to four billion. Uh uh more than three to four billion. Quite a lot more." }, { "i": 41, "speaker": "Martin Shkreli", "text": "Uh but in essence if they work out of these positions without disrupting the market they'll have printed 3 to 4 billion on the trade which you know is unusual and interesting trade but you know really exciting." }, { "i": 42, "speaker": "Martin Shkreli", "text": "One of the parties reached out to me last night, one of these three parties. Interestingly, after my reporting, and they said that in essence, at some substance, yes, Lehman flew a little too close to the sun and your numbers are um are a little off." }, { "i": 43, "speaker": "Martin Shkreli", "text": "And I asked what direction, and they wouldn't they wouldn't confirm or deny. I I received a lot of push back on the reporting to your point uh privately and publicly that that it's not so bad and that, you know, he's only down 30%. 30% you can kind of live with." }, { "i": 44, "speaker": "Martin Shkreli", "text": "Uh but also if Antronic hasn't changed its mark, that means you were down 60 in the public book. >> And if your forex levered, you know, that means you're sort of down 15 on the public book." }, { "i": 45, "speaker": "Martin Shkreli", "text": ">> Um which sounds too good to be true. If you're trading these stocks, they were down like 15% a day. >> So we've also heard the other other AI funds are are hurting. Maybe not as as much as in trouble, but but certainly hurting as well." }, { "i": 46, "speaker": "Speaker 2", "text": "Where does the fund go? He gives some good he gives some good cover to all the funds that were effectively copy trading him. Oh, sure." }, { "i": 47, "speaker": "Speaker 2", "text": "Maybe even being more riskier and later to these positions because they were they're naturally just late if you're trying to copy trade someone and you're >> trying to catch up, you know. >> Yeah. You're trying to catch up. Yeah." }, { "i": 48, "speaker": "Speaker 2", "text": "Yeah. More leverage. You're you're you're coming into these trades way later. Um, do you do you recall uh like how did you process Ryan Jacob in in around the year 2000? Because you were at Kramer's firm." }, { "i": 49, "speaker": "Martin Shkreli", "text": "I believe you joined maybe right before the Ryan Internet Fund started collapsing. Yeah, there's also the Amarind Fund." }, { "i": 50, "speaker": "Martin Shkreli", "text": "There was a fund in the 60s called the Manhattan Fund that Warren Buffett criticized for being the go-go kind of like uh fund was run by a guy named Gerald Sai." }, { "i": 51, "speaker": "Martin Shkreli", "text": "And so like every generation you you've seen the memes about Kathy, you know, um every generation has it, you know, the guy that believes in that cycle and it goes balls to the walls on on [snorts] that cycle." }, { "i": 52, "speaker": "Martin Shkreli", "text": "And look, I have a lot of respect for for somebody who's who's willing to do that. I I I used to tell a friend who who kind of did the same thing. He followed this trade but he was very early so he had sort of Lehman" }, { "i": 53, "speaker": "Martin Shkreli", "text": "like numbers um and he sort of did hedge at at at what sounds like close to the top." }, { "i": 54, "speaker": "Martin Shkreli", "text": "So sort of a miracle um trader best trader I know and I joked with him I said you know if Lehman sells at the top and turns short like I I will absolutely agitate him as the greatest of all time." }, { "i": 55, "speaker": "Martin Shkreli", "text": "And it's just that, you know, usually when you're so spellbound by that narrative of whatever happening, in this case, AGI, >> you know, there are people out there that say, \"Look, AGI is here slashcoming. When it comes, the entirety of finance is not relevant anymore.\"" }, { "i": 56, "speaker": "Martin Shkreli", "text": ">> You know, we might as well just run it up and and kind of see the end of days this way. And of course, to some guy sitting on a trading desk at Goldman Sachs, you're like, \"These people are\" [he] nuts.] [laughter] You know, it's just the stock market deal, you know." }, { "i": 57, "speaker": "Speaker 2", "text": "Uh, >> did you given that Leopold had been at FTX right up until the the the fall, did you think that maybe as as risk on as he was, like maybe he was like, you know what, I just I can't go through that again?" }, { "i": 58, "speaker": "Speaker 2", "text": "uh he wasn't necessarily he wasn't necessarily directly tied to any of the sort of nefarious activity at FTX, but he did have to viscerally experience it and and I believe resigned the day of the collapse. And >> yeah, >> uh I would I just would have expected to not like Yeah." }, { "i": 59, "speaker": "Speaker 2", "text": "to run it back like >> so quickly. you would you would expect even like you know go and do have a" }, { "i": 60, "speaker": "Martin Shkreli", "text": "normal you know great career for a decade or whatever then maybe come back to leverage and be like I'm ready to dance again but >> there's a lot of questions like one question is what's his carry you know when a lot of firms in the hedge fund industry believe it or not they have clawback provisions for carry >> like high water mark provisions right so you have to clear something >> everyone has a high water mark but what's increasingly happened is it is is a carry provision where you have to return the two and 20 you earned if you have a severe draw down which you know could actually end up being a tough situation." }, { "i": 61, "speaker": "Martin Shkreli", "text": "Now as you guys know the fellow is getting married this weekend as well >> which is you know a little bit of tragedy with a a little bit of triumph mixed in." }, { "i": 62, "speaker": "Speaker 2", "text": "Um but um obviously you know uh when this >> but does every how common are those clawback clauses because you have to imagine in this fundraiser he had like massive massive leverage you know >> like demand was very high >> demand was very high that feels like a term >> the numbers were so good yeah >> it's a more institutional thing and I and you know speaking of which you know obviously the guy basically had no no experience um and again you know in times like this nobody wants to to grave dance and I'm doing that." }, { "i": 63, "speaker": "Martin Shkreli", "text": "But I had some institutional friends, one of the biggest fund of funds in New York for example, who passed on Leopold, basically laughed at him and said, you know, there's no way I could invest in this. And of course, you know, he goes" }, { "i": 64, "speaker": "Martin Shkreli", "text": "on this tear, you know, makes like 20x or whatever it was since inception >> and does fantastic and he feels sort of sheepish, but ultimately, you know, somewhat vindicated after all of this." }, { "i": 65, "speaker": "Martin Shkreli", "text": "So you did have a manager that had no experience um kind of a long only or extremely long biased starts to do privates which for many hedge funds is kind of the death knell." }, { "i": 66, "speaker": "Martin Shkreli", "text": "Um you you know you know when when hedge funds put on their VC cap and try to try try to do uh what those guys do it it often doesn't end well. And um that that goes back like you know 50 years basically of hedge fund history." }, { "i": 67, "speaker": "Martin Shkreli", "text": "And um very few people have been able to do both. And the other thing I'd point out is we're going to see July numbers very soon here from from quite a lot of hedge funds that I think were in the same trade. Sure." }, { "i": 68, "speaker": "Martin Shkreli", "text": ">> And so this this is not just Leopold's 100 billion gross. It's like that times maybe five or 10. And the mark while the market's liquid, that's a lot of downward pressure in a few weeks." }, { "i": 69, "speaker": "Martin Shkreli", "text": "And you know, it's amazing to see this all compressed in a month whereas like the dot-com bubble took three or four years to like patiently go up and patiently go down. Um you know, seeing that compress instantly is interesting. What's going to happen next is really going to be fascinating." }, { "i": 70, "speaker": "Martin Shkreli", "text": "There's some theory out there that, you know, that we see all-time highs again now that all this liquidity is out." }, { "i": 71, "speaker": "Martin Shkreli", "text": "And there's other theories there that we actually were just having this nice big downtrend and that this liquidity pop will fade and we'll be back down further and further." }, { "i": 72, "speaker": "Martin Shkreli", "text": "Um, you know, nobody knows what'll happen, but it's certainly uh while you're right that, you know, the Anthropic and OpenAI are having record business results. So is Microsoft and Google and Meta for that matter." }, { "i": 73, "speaker": "Martin Shkreli", "text": ">> There's still I think some more discerning questions about is are is this capex investment worth it. >> Um you know they rewarded Meta Microsoft for being prudent. They they've punished Meta and Google for not being prudent." }, { "i": 74, "speaker": "Martin Shkreli", "text": "So one wonders what what the future will bring there. But >> yeah about as crazy as things have gotten on Wall Street in in many years." }, { "i": 75, "speaker": "Martin Shkreli", "text": "uh probably at least since FTX >> and certainly crazier than the the the sort of Tiger Soft Bank venture boom of 2021 >> and then you know really since then uh the '08 uh insanity so it's it's um it's" }, { "i": 76, "speaker": "Martin Shkreli", "text": "quite a uh spectacle and I think you know no matter how much people want to learn the lesson of leverage over and over and over again we all seem to repeat it and uh you know it is what it is but I think the the Jane Street Citadel Millennium kind of like entire hedge fund complex sort of becoming this like shadow bank is quite interesting you know in that like these guys are are sort of there to normally the banks would sort of take this on the chin but now that there's other folks who are like >> you know Jane Street was an LP for example in fund and reportedly was not interested >> uh which is fascinating may have taken the Anthropic however um really unclear we're going to learn more obviously as some days go on here but >> it's uh it's an unprecedented time and" }, { "i": 77, "speaker": "Martin Shkreli", "text": "you know really insane story that uh may just get more insane as we learn more." }, { "i": 78, "speaker": "Speaker 1", "text": ">> Is there a world where the fund continues? Because I'm just hearing the numbers and it's like, you know, up at 45 billion. The actual money into the fund was maybe five billion or something if you sell the positions." }, { "i": 79, "speaker": "Speaker 1", "text": "There's a world where you wind up with like 10 billion in a bank account and the LPS are like, \"Well, we gave you five. Keep going. Get back in the game.\"" }, { "i": 80, "speaker": "Martin Shkreli", "text": "You know, >> I hope I hope that's the case for the LPS who are awesome, for the fund manager who obviously got quite a lot of whiplash, >> but you know, at the end of the day, you know, there's there's this concept on" }, { "i": 81, "speaker": "Martin Shkreli", "text": "the street as as you guys know, like once there's blood in the water, like these positions would go to zero. Like we'll send Micron to $5, you know, just to eliminate this guy at three, right?" }, { "i": 82, "speaker": "Martin Shkreli", "text": "Like that's, you know, the craziest thing is like that's that's the nature of of Wall Street when this happens." }, { "i": 83, "speaker": "Martin Shkreli", "text": "and there's a guy that has to sell a hundred billion, you'll have a trillion dollars in front of him just like, you know, let's let's see this guy cry uncle." }, { "i": 84, "speaker": "Martin Shkreli", "text": "And it's the saddest kind of most machavelian thing, but like he had he sort of had to blow up, you know, there was no other ending sadly. Yeah. Um because of the leverage level." }, { "i": 85, "speaker": "Martin Shkreli", "text": "It's just like one slight, you know, I remember my old boss was a Tiger, uh, Tiger portfolio manager reminded me of the 2000 era where there's this very slight change in tone from one uh optical component supplier and that's like him and his partner from Soros just decided to go like as as short as they could [laughter] this because they knew ultimately these vulnerable hands were sort of sitting there after the easy part of the bubble was over." }, { "i": 86, "speaker": "Martin Shkreli", "text": "You had this like okay what's what's next? things have to get a lot crazier. You saw Dark's tweet. Things like that would have to sort of happen for there to be enough second derivative for somebody to be surprised." }, { "i": 87, "speaker": "Martin Shkreli", "text": "You know, everyone knows AI is in this boom. Everyone knows chips are in this boom. What could possibly shock you to the upside? Not much." }, { "i": 88, "speaker": "Martin Shkreli", "text": "So, if you hear any little like, h, you know, we're not going to spend as much, the whole thing hits the fan and every, it's just too heavy. So, I I I actually wonder if we're we're, you know, if we're not in for a longer, more protracted decline." }, { "i": 89, "speaker": "Martin Shkreli", "text": "Things feel great today. You know, you have this huge boom, uh, this relief rally. Um, and a lot of the froth is out of the system, but >> you know what next?" }, { "i": 90, "speaker": "Martin Shkreli", "text": "You know, I I I don't know that, you know, a patient and calm market is going to emerge because you had the hyperscalers and the big companies, they FOMOed, too. They FOMOed just as hard as Leopold did, right?" }, { "i": 91, "speaker": "Martin Shkreli", "text": "If not harder. So, this isn't just him. It's the whole world collectively saying, \"Fuck, I got to I got to go all in on AI.\"" }, { "i": 92, "speaker": "Martin Shkreli", "text": "And it's it's and who who had the guts, you know, other than one man Tim Cook in the back saying, \"Not me.\"" }, { "i": 93, "speaker": "Speaker 2", "text": ">> Do nothing. >> Yeah. >> No, really. It was Tim Cook. >> I think the most unexpected thing is would be if we saw brand new all-time highs >> for the entire thing. I think almost everyone on Wall Street is skeptical this will happen, which means it has a chance of bullish." }, { "i": 94, "speaker": "Speaker 2", "text": "like slowed a little bit and like there was some jitters and and a lot of this stuff wasn't, you know, public at the time, but you you could tell some of the kind of crossover types were like getting a little nervous, right? They kind of expected MAU DAU numbers, you know?" }, { "i": 95, "speaker": "Speaker 2", "text": "Yeah." }, { "i": 96, "speaker": "Speaker 1", "text": "And really plateaued and and and then we and then there was a correction like there was like briefly you know for a period it was probably like eight weeks it was like okay like uh and then it started ripping again and we were taking like a sort of a um a bit of a joking like victory lap being like cool like AI corrected you know bubble pop we're able to build back sustainably we're good from here on out." }, { "i": 97, "speaker": "Martin Shkreli", "text": "It's smooth sailing. Yeah, I I completely agree. I think the most unexpected thing is would be if we saw brand new all-time highs for the entire thing. I think almost everyone on Wall Street is skeptical this will happen, which means it has a" }, { "i": 98, "speaker": "Speaker 1", "text": "So, you're saying there's a chance. I love it. Can you uh can you give me a little bit more uh insider baseball on uh what it takes to unwind a big position uh as a shareholder?" }, { "i": 99, "speaker": "Speaker 1", "text": "Because uh a lot of people who are not inside the hedge fund world uh are sort of uh maybe confused around, okay, yeah, you own uh $50 million of a $1 billion uh chip stock. Can't you just dump that on retail?" }, { "i": 100, "speaker": "Speaker 1", "text": "Can't you just like sell market sell that on E*TRADE or Robin Hood? And in fact, it's much more complicated when you're at this level even though it's public markets. There's not just a big button." }, { "i": 101, "speaker": "Speaker 1", "text": "Can you walk us through what it actually takes to like >> sell a big position when you're at that level?" }, { "i": 102, "speaker": "Martin Shkreli", "text": "Yeah, there's there's a lot that goes into it interestingly. So, the first is you have this advertisement system. So if you sell into the into the market, you can try that and that's called selling into the screens. The screens are the numbers on your screen." }, { "i": 103, "speaker": "Martin Shkreli", "text": "Anybody can buy and sell Robin Hood, whatever. >> So you don't normally do that if you if you can help it. Uh selling on the screens is at least somewhat quiet. You can just sort of trickle out." }, { "i": 104, "speaker": "Martin Shkreli", "text": "There's always this conspiracy that as I'm selling on the screens, there's some guy who's can see my screen and he's like, \"This guy's got a big market order to sell 10 million shares.\" That's not, you know, I'm going to tell somebody.\" And that knowledge would be very very powerful." }, { "i": 105, "speaker": "Martin Shkreli", "text": "And there's even some even crazier conspiracies uh out there that quants could actually use different all kinds of insane you know ideas around what they can do to sort of sniff out that this is happening. So there's people that are scared of that." }, { "i": 106, "speaker": "Martin Shkreli", "text": "Then you can pick up the phone and this is the way you normally do it and you you call Goldman and you say, \"Listen, I need to sell five, you know, five million shares of Microsoft or something like that and they say, hm, you know, should we take it or do we find a guy that wants to take it?\"" }, { "i": 107, "speaker": "Martin Shkreli", "text": "And they'll sort of try to decide. Now Microsoft is easy. If you're trying to sell Sharon AI, a neocloud in Australia that nobody wants, that's a tough one. And you own like 10 days of" }, { "i": 108, "speaker": "Martin Shkreli", "text": "volume. So, if you try to hit the screens, you have 10 days of volume. You you'd have to be the entire volume for 10 days before you'd be out." }, { "i": 109, "speaker": "Martin Shkreli", "text": "You'd probably take the stock down 50% or more, and you don't want to do that. >> So, you try to, you know, do this advertisement process." }, { "i": 110, "speaker": "Martin Shkreli", "text": "Um, you know, and you basically can post in the stock market that you're a seller of a stock and you can post that your your four-digit what's called market maker ID and so Goldman's is GSCO." }, { "i": 111, "speaker": "Martin Shkreli", "text": "So GSCO would be a seller of say, you know, Nebius, which was one of his positions. And so you'd call up, you'd say, \"Okay, Goldman, I'm a client too of Goldman.\" Uh, you know, what do you got on Nebius?" }, { "i": 112, "speaker": "Martin Shkreli", "text": "And the guy would say, \"Listen, we got a pretty big seller here.\" You know, and say, \"How big?\" You know, half a million shares. And you >> So you don't normally do that if you if you can help it. Uh selling on the screens is at least somewhat quiet." }, { "i": 113, "speaker": "Martin Shkreli", "text": "You can just sort of trickle out. There's always this conspiracy that as I'm they're they kind of are trying to be quiet about how big, but they're not going to waste somebody's time either. So, the guy who's heard that there's a big seller. Well, he might turn around." }, { "i": 114, "speaker": "Martin Shkreli", "text": "He's not supposed to do this. He sort of might turn around and say, you know, there's a huge seller of Nebula out there and I'm just a little baby fish. Maybe I could short 50,000 shares and get in front of this guy." }, { "i": 115, "speaker": "Martin Shkreli", "text": "If you're an actual interested buyer, you might also still be nervous because you'd say, \"Well, if he's really got a ton of size,\" I might have to be judicious about how I step in." }, { "i": 116, "speaker": "Martin Shkreli", "text": "And so, if you combine that with the sort of like pressure in the market and you add it all up and then usually what you do is you'd have say, \"Oh, I know a guy that works there and let's see if he's returning calls.\" And you know, when you hit up the guy and he's not on Bloomberg, he's hard to reach." }, { "i": 117, "speaker": "Martin Shkreli", "text": "It's kind of like, well, it sounds like it could be them selling. Uh, so it's not too many people that own that many shares of that security. So, you look at the holders list and you're sort of like, who could it be selling 10 million shares?" }, { "i": 118, "speaker": "Martin Shkreli", "text": "So, you call Fidelity and they say, no, we're not selling. >> You call the next guy, no, we're not selling. Next guy's an ETF. Next guy's a index fund." }, { "i": 119, "speaker": "Martin Shkreli", "text": ">> You know, it's got to be him. You know, and so if it's them and they're the ones and then you start noticing all of their positions are down, it gets really hard. So ultimately the bank decides because you might say, you know, I don't want to sell." }, { "i": 120, "speaker": "Martin Shkreli", "text": "The bank says, I don't care what you want. [laughter] We're we're selling regardless. And Goldman Sachs is not in the business of holding AI stocks." }, { "i": 121, "speaker": "Martin Shkreli", "text": "You know, we're going to sell at any price we can because our board would rather know for sure that we're down a billion and just take the rip the band-aid off than to wonder if we could lose 50." }, { "i": 122, "speaker": "Martin Shkreli", "text": "And so it's Goldman's position that we're just going to just cut the arm off right now before it metastasizes. And so they'll do a fire sale. And of course Goldman's smart. They're going to reach out to a guy like Citadel or somebody else to place it carefully." }, { "i": 123, "speaker": "Martin Shkreli", "text": "But selling the whole portfolio in one shot was a very smart move. Now again we've heard the discount could have been as big as you know 20 to 50% which is you know mouthwatering discount to buy you know some quality companies at." }, { "i": 124, "speaker": "Martin Shkreli", "text": "Yeah." }, { "i": 125, "speaker": "Martin Shkreli", "text": "But to end it and have finality what was really to answer the question finally what you really needed to do is the buyer of these stocks has to have the liquidity to hold them for 5 years and do nothing because the market guys like me and to a very small extent and guys to much bigger will sit there and say I don't think you can hold this and they'll start shorting it and shorting it and shorting and trying to make you cry uncle Kosha in Japan one of Leopold's holdings also one of mine is trading at three times earnings you know they basically forced you to sell." }, { "i": 126, "speaker": "Martin Shkreli", "text": "And if you're going to hold this stock, you have to make sure that you can hold it until it's two times earnings or one times earnings. And the only player big enough or more powerful enough to sort of hold a hundred billion dollars and not blink is somebody like a citadel." }, { "i": 127, "speaker": "Martin Shkreli", "text": "And even still, some people there rumors out there, they're the people who are going to try to crash your citadel, which I wouldn't advise, uh, you know, but something like that where, you know, maybe they'll now have to suffer the same contagion." }, { "i": 128, "speaker": "Martin Shkreli", "text": "So, it's a very crazy time in the markets very small extent and guys to much bigger will sit there and say I don't think you can hold this and they'll start shorting it and shorting it and shorting and trying to make you cry" }, { "i": 129, "speaker": "Martin Shkreli", "text": "uncle Kosha in Japan one of Leopold's holdings also one of mine is trading at three times earnings you know they basically forced you you're forcing ing the guy to to really, you know, uh, to sell." }, { "i": 130, "speaker": "Martin Shkreli", "text": "And if you're going to hold this stock, you have to make sure that you can hold it until it's two times earnings or one times earnings." }, { "i": 131, "speaker": "Martin Shkreli", "text": "And the only player big enough or more powerful enough to to sort of hold a hundred billion dollars and not blink is somebody like a citadel." }, { "i": 132, "speaker": "Martin Shkreli", "text": "And even still, some people there rumors out there, they're the people who are going to try to crash your citadel, which I wouldn't advise, uh, you know, but something like that where, you know, maybe they'll now have to suffer the same contagion." }, { "i": 133, "speaker": "Martin Shkreli", "text": "So, it's a very crazy time in the markets and I don't think we've seen everything yet because I do think there are some large tech funds that have had the same trade on." }, { "i": 134, "speaker": "Speaker 1", "text": "I do think liquidation is over thankfully, but I do think that there are some funds that are about to [clears throat] be found out to be down 30% or down 40% or something. >> Take me through the mind of Ken Griffin like a couple weeks ago." }, { "i": 135, "speaker": "Speaker 1", "text": "There's this rumor that he was sort of like pushing or signaling that there might be a rate hike." }, { "i": 136, "speaker": "Speaker 1", "text": "But what I'm interested in is if you suspect that there's going to be a fire sale on X, Y, and Z companies, is there a world where you build the hedges before you acquire those assets, or is that two-dimensional chess?" }, { "i": 137, "speaker": "Speaker 1", "text": "Because that I if they if they wind up acquiring these for 50% or 20% off, but they already have offsets, then they sort of come in market neutral. Is that possible? >> I don't think so." }, { "i": 138, "speaker": "Martin Shkreli", "text": "So, I'm familiar with the Citadel's performance uh for this month, which is surprisingly up. >> So, I think they're probably one of the only hedge funds in the world." }, { "i": 139, "speaker": "Speaker 2", "text": "It's up this month. >> It's up very slightly." }, { "i": 140, "speaker": "Martin Shkreli", "text": ">> They were actually hedged is what you're saying. >> Yes. They have a diverse platform of different businesses, a guy trading weather, a guy trading rates, a guy trading stocks, you know, about a thousand guys trading stocks." }, { "i": 141, "speaker": "Martin Shkreli", "text": "And they have a computer fund uh you know called Citadel Securities that is a market maker that trades a good chunk of the volume of every instrument of the world." }, { "i": 142, "speaker": "Martin Shkreli", "text": "And ultimately I think that the the prime brokers like Goldman's and Bank of Americas they do so much business with Citadel and they've done this before where they know who to go to just the same way the US government went to Warren Buffett when they wanted to shore up Goldman." }, { "i": 143, "speaker": "Martin Shkreli", "text": "Yeah." }, { "i": 144, "speaker": "Martin Shkreli", "text": "they know that the right person to call is Ken and he is really going out of his way to make himself the guy to call and I think that is a great brand because um you may not need to be that guy more than once every decade but look once a decade to make a free $5 billion or $10 billion is a great" }, { "i": 145, "speaker": "Martin Shkreli", "text": "great guy to be and you know it's sort of like he becomes a dependable trusted partner to these banks and if he wants something for the banks he's helped them >> because without him they might have had to sell that uh at a negative number." }, { "i": 146, "speaker": "Martin Shkreli", "text": "In fact, some people think I don't think this is what happened, but some people actually think the equity in Lehman's prime brokerage accounts went negative. >> Okay." }, { "i": 147, "speaker": "Martin Shkreli", "text": ">> Which I think is uh you know, something that again like Goldman and Bank of America's try to stop you before you get there. >> But, you know, they also don't want to sell like I said, share in AI, which is an illiquid, tough to sell security." }, { "i": 148, "speaker": "Martin Shkreli", "text": "Sure. you know, they'll sell out your micron very fast or you'll sell it out before then." }, { "i": 149, "speaker": "Martin Shkreli", "text": "But if you're left holding this bag of like an illiquid crap that you have 60 days of volume to get out of, it's pretty tough to to sit there and and tell your prime broker, don't worry. >> Uh which is why again I think he needed cash." }, { "i": 150, "speaker": "Martin Shkreli", "text": "Probably somebody on Monday or Tuesday tapped them on the shoulder and said, >> \"Your margin's looking a little thin.\" You know, can can you add, you know, a couple billion here or more? And things happened so quickly that there was just no time." }, { "i": 151, "speaker": "Martin Shkreli", "text": "And um yeah, it's I think I think Citadel learned about this at the 11th hour >> as you're supposed to. You know, the firm didn't leak out that they were hurting. Um they didn't have, to my knowledge, daily performance." }, { "i": 152, "speaker": "Martin Shkreli", "text": "In fact, from what I'm told, um situational awareness as a young hedge fund manager was not so great with communication. Not surprising. Uh especially with monthly and quarterly letters. Could have been more timely on some of those." }, { "i": 153, "speaker": "Martin Shkreli", "text": "So it's small group of a couple of guys." }, { "i": 154, "speaker": "Speaker 2", "text": "So I don't think that this was the same. >> You rewind what was it only a month ago that the or >> 13F was late?" }, { "i": 155, "speaker": "Speaker 2", "text": ">> 13F was like late and everyone was questioning like work out, did he work out some kind of deal to get it, you know, keep it confidential, [laughter] but it it sounded like he just like didn't get around to it. They had >> other priorities maybe." }, { "i": 156, "speaker": "Speaker 2", "text": ">> Do you think I mentioned uh >> do you think you can rebuild a career as a venture investor? Because like in venture you just you're just like giga-long always like it's like you know one of the few forms of investing where it's just so hard to get out of position." }, { "i": 157, "speaker": "Speaker 2", "text": ">> That's that's the thing." }, { "i": 158, "speaker": "Martin Shkreli", "text": "I mean why become a hedge fund manager? This is the I have a friend who [laughter] wants to to start I have a friend who wants to start a hedge fund. I told him this is the most painful horrible business in the world. Why do this?" }, { "i": 159, "speaker": "Martin Shkreli", "text": "And if you start a newsletter business that makes a hundred million a year uh even 50 million a year of revenue, you've done better than almost every hedge on the planet. Like you do not want to do this job." }, { "i": 160, "speaker": "Martin Shkreli", "text": "And the reason, you know, the reason people do it, and I did it, too, and I would never do it again, is >> it's the sexiest thing in the world. You think you're, >> you know, the glorious universe >> is incredible." }, { "i": 161, "speaker": "Martin Shkreli", "text": "You're the master of the universe. And I had friends of wanting to quit really high-profile jobs to to be a hedge fund. And I was just like, you're you're out of your mind. You don't know what this job is." }, { "i": 162, "speaker": "Martin Shkreli", "text": "It's waking up at 3:00 a.m. checking Korean stock prices and, you know, waking up back up at 6, you know, wondering what's what's happening in the world. Stuff like this. And there's absolutely no productive thing you're doing." }, { "i": 163, "speaker": "Martin Shkreli", "text": "You know, uh you're providing capital, [laughter] you know, but other than that, you know, you're really playing this high stakes crazy poker game. And you know, it's it's certainly fun and interesting, but when it's painful and and raw, >> you know, I hope he'll he'll do something." }, { "i": 164, "speaker": "Martin Shkreli", "text": ">> You know, he's a brilliant person. Brilliant people like that. I mean, look, Peter Thiel had a hedge fund that >> didn't quite have this level of liquidation or anything like that, but it had a rough last few years." }, { "i": 165, "speaker": "Martin Shkreli", "text": "And you know, Thiel was able to obviously not only continue his venture investing efforts, creating one of the biggest funds of all time, one of the most successful funds of all time, investing" }, { "i": 166, "speaker": "Martin Shkreli", "text": "personally, doing amazing, also getting back into macro trading with Thiel Macro, which supposedly has done well." }, { "i": 167, "speaker": "Martin Shkreli", "text": "I do think there is this like period of a few years that that you know he can reset and take the learnings, take whatever talent, skill, and certainly genius that nobody denies that he's a brilliant guy and rebuild." }, { "i": 168, "speaker": "Martin Shkreli", "text": "I I don't think it's the end at all. And um I hope he's [clears throat] keeping like that even temperament about this because, you know, I I I think a lot of people respect him quite a lot. No matter how this turned out, you know, he'll be back and and successful." }, { "i": 169, "speaker": "Martin Shkreli", "text": "But it is a little bit of a humiliation thing that I think most people on Twitter and other places are sort of saying well the market tends to humble you and this is like an" }, { "i": 170, "speaker": "Martin Shkreli", "text": "extremely humbling moment from being you know just two months separated from the biggest hedge fund on planet earth and most successful to being forced to to sort of liquidate that is quite a rapid sort of you know um reversal." }, { "i": 171, "speaker": "Speaker 2", "text": "Uh, >> also just imagining [clears throat] what the fund looks like in two or three years if you just survive, right?" }, { "i": 172, "speaker": "Speaker 2", "text": "I can, you know, he, you know, there there was a clip that was circulating yesterday from his, you know, appearance on Dark Matter where he's like, \"Oh, there's obviously like a 100x, you know, left before AGI, right?\"" }, { "i": 173, "speaker": "Speaker 2", "text": "So, like he was like up, you know, 20x or whatever, thinking like I got I got so much room to run but just couldn't >> stay in the game. Um, I got >> extrapolating >> is always a risk." }, { "i": 174, "speaker": "Speaker 2", "text": "I got a um, yeah, I got to say it felt like a felt like a huge moment for you and your business just because everyone the whole finance world was learning about the situation from your post." }, { "i": 175, "speaker": "Speaker 2", "text": "I'm sure a lot of people were glued to your terminal and it felt like a changing of the guard because again you were getting push back. Um you were getting some push back but then two hours later it was like Financial Times and Bloomberg and Wall Street Journal." }, { "i": 176, "speaker": "Speaker 2", "text": "They're all kind of clearly they needed a couple hours to like run it down. Um but you got to it first and >> uh yeah I was I was quite impressed." }, { "i": 177, "speaker": "Martin Shkreli", "text": "Thank you. Yeah, I mean I think that you know we've talked about this in the past. I mean, there is a changing the guard there. You guys help change the guard in your space." }, { "i": 178, "speaker": "Martin Shkreli", "text": "And I think that, you know, the folks at the journal, the folks at Bloomberg, the folks at these other companies, they're fantastic reporters, but they're not active or former players." }, { "i": 179, "speaker": "Speaker 2", "text": "And you know, we will hear we will always hear things before them >> uh because especially on the street um because that's just >> well and the crazy the craziest thing is you you actually waited until it was like over effectively to to share, right?" }, { "i": 180, "speaker": "Speaker 2", "text": "Like you had been hearing about this. There's a lot that we sit on that we don't want to, you know, we've been in that position like hundreds of times where it's not appropriate to share anything." }, { "i": 181, "speaker": "Speaker 2", "text": "And sometimes you're sitting there being like, I'm really surprised that like legacy media hasn't picked up on this story. It feels like it's just common knowledge and there's a definitely a time and place to just not not say anything and and let something work its way through the system." }, { "i": 182, "speaker": "Martin Shkreli", "text": "Yeah, I mean to give the devil their due, the information is also quite good at, you know, this type of thing. And they are particularly good at scoops on OpenAI, [laughter] but the uh which I still haven't unraveled how how, but they're obviously very good reporters." }, { "i": 183, "speaker": "Martin Shkreli", "text": "Uh but a reporter at a place like that in traditionally don't care about burning bridges and resources or contacts. So they want that news out yesterday. You know, I do care." }, { "i": 184, "speaker": "Martin Shkreli", "text": "And it also is a conflict of interest because I don't want to hurt somebody that's given me good information uh and betray their confidence because I have to keep the confidence of these folks if I want to keep talking to them." }, { "i": 185, "speaker": "Martin Shkreli", "text": "But I also in the case of this situation as the carnage is unfolding you know there's sort of a balancing the need for everyone to know with the need for you know protecting friendships and relationships. You have to make that judgment call each time. And I I hope that our customers understand that there will be things that we know before" }, { "i": 186, "speaker": "Martin Shkreli", "text": "others and we can't disclose because we want to protect uh folks and protect our friends. Bloomberg, Wall Street Journal, they'll never do that. They they're they're always going to serve their customer who is the reader." }, { "i": 187, "speaker": "Martin Shkreli", "text": "We can't necessarily do that. You'll probably know things about a litany like you said hundreds of times, different fundraises going on, different things like that." }, { "i": 188, "speaker": "Martin Shkreli", "text": "And you have we have to all keep our lids closed because, you know, that will be the last time we hear about a fundraiser. And I think that this was a situation where it sort of merited discussion. It was going to happen anyway." }, { "i": 189, "speaker": "Martin Shkreli", "text": "I in fact to your to your point the thing that got me to publish was my friend saying everyone is hearing this now. Once that happened I said all right well you know it's time to let I can let the cat out of the bag." }, { "i": 190, "speaker": "Speaker 1", "text": "It's going about to be let out anyway. So >> yeah. Uh I have two more quick questions if you have a minute. one is uh uh just about how leverage works at a hedge fund." }, { "i": 191, "speaker": "Speaker 1", "text": "I think uh you know again from the retail perspective from the much smaller player you might know that you can go to a uh you know a brokerage and get a little bit of leverage but what does the process look like as you're scaling into the tens of billions of leverage at certain point you have to go to all of the banks certain banks who's actually like what does that process to get leverage at that scale actually look like >> and also let's let's appreciate for the for a moment moment that I feel like" }, { "i": 192, "speaker": "Speaker 2", "text": "just a month ago the west coast broadly was taking this insane victory lap being like the west coast is eating Wall Street [laughter] like the best and biggest hedge fund is no longer on the east coast like we just have everything now finance and technology and then just deeply humbled uh within the span of 30 days uh and it turns out turns out you guys over there you you know a thing or two and here we are asking you So how would one go about getting [laughter] >> so so one of the things that I think is not well understood is the prime broker >> make a spread on I think this somewhat understood is they make they make their business to make a spread on financing." }, { "i": 193, "speaker": "Martin Shkreli", "text": "So if you go to a prime broker and say I'm never going to use leverage >> uh never [laughter] they say I'm never going to use leverage and I'm never going to really trade a lot with with with your firm." }, { "i": 194, "speaker": "Martin Shkreli", "text": "they're just going to just sit there and say like we'll still take the assets because we can rehypothecate them and and lend them to the guys that are going to take leverage, but in general that's not a great customer." }, { "i": 195, "speaker": "Martin Shkreli", "text": "So if they're making a 1% spread, which actually would be is a relatively huge amount, >> and you're borrowing 4x, you're actually giving them 400 basis points of free money, >> which is uh sort of fantastic." }, { "i": 196, "speaker": "Martin Shkreli", "text": "Um in fact, you know, their borrowing costs are probably less than uh so far. So, you know, they may be getting as much as 600 or 800 bips of free money on huge amounts of capital. So, uh, leverage is the best friend to a prime broker." }, { "i": 197, "speaker": "Martin Shkreli", "text": "Now, the risk guy is sitting there saying, \"Well, wait a second. You know, I I I love lending, but I don't like lending to concentrated portfolios. I don't like lending to short sellers." }, { "i": 198, "speaker": "Martin Shkreli", "text": "Uh, you know, short sellers can get big big big uh, you know, leaps in their like GameStop, for example. So, the most a long can lose is 100%. But if a short lever the most long loses is 25%." }, { "i": 199, "speaker": "Martin Shkreli", "text": "So, uh, leverage is the best friend to a prime broker. Now, the risk guy is sitting there saying, \"Well, wait a second. You know, I I I And of course there are funds now like Altimeter and Co and others that are doing both and doing both." }, { "i": 200, "speaker": "Speaker 2", "text": "And what made that what made it so tempting obviously for Lupus to just how close he is to anthropic and it's a company that over the last six months has had 100x the demand relative to the allocation right so it just felt like you know and I don't know who knows what the what the structure on those investments look like but it's like if you're going to break your rule and do privates like then that's the company to do it with but then you still get into a situation where you're like, \"Wow, I really wish this was more liquid.\"" }, { "i": 201, "speaker": "Speaker 2", "text": "Yeah, I can't press this all button. Uh, give us an update before you leave on Korea broadly because uh, you know, a lot of people are uh, commenting on on just how similar Lupus's approach is to Korean retail." }, { "i": 202, "speaker": "Speaker 2", "text": "I don't know how true that is, but I can imagine like it's uh there's blood in the water over there and the whole country is probably in shambles. Yeah, I think so." }, { "i": 203, "speaker": "Speaker 2", "text": "I made a Kelly criterion calculator and like a little portfolio simulator tool that you know basically and Paul Tudor Jones said this a while back and I had a problem with this." }, { "i": 204, "speaker": "Martin Shkreli", "text": "Every single trader out there makes one mistake over and over again, which is their position size is probably two to 10x more than it should be. And if you actually, you know, so it sounds nuts, right?" }, { "i": 205, "speaker": "Martin Shkreli", "text": ">> But if you actually run the simulator and we use the Kelly, so Kelly was a guy at Bell Labs. He was a member of the technical staff. He's original OG uh MS." }, { "i": 206, "speaker": "Martin Shkreli", "text": "And so Kelly came up with the proof called famously the Kelly criterion which gamblers use mostly was a gambler thing before a finance thing and it proves the optimal bet size and the optimal bet size is your edge subtracted called famously the Kelly criterion which gamblers use mostly was a gambler thing before a uh finance thing and it proves the optimal bet size and the optimal bet size is your edge subtracted" }, { "i": 207, "speaker": "Martin Shkreli", "text": "by the reciprocal of it. So if you have 55% edge your optimal bet size is 10%. That's still quite volatile for folks and so people do half Kelly or quarter Kelly." }, { "i": 208, "speaker": "Martin Shkreli", "text": "Most folks don't actually have an edge when they trade, but they're if they did have an edge, they're trading as if they had a 4x or 5x Kelly edge, which is interestingly like you might sound okay, well that just sounds bucking and like guy takes a lot of risk." }, { "i": 209, "speaker": "Martin Shkreli", "text": "No, if you run the >> And it's an eye-opener. We might say, who has a 60/40 edge in the stock market? Nobody has 60/40 edge. Um, but you will absolutely go bust if you don't size correctly." }, { "i": 210, "speaker": "Martin Shkreli", "text": "And it's something that And it's an eye-opener. We might say, who has a 60/40 edge in the stock market? Nobody has 60/40 edge. Um, but you will absolutely go bust if you don't size correctly." }, { "i": 211, "speaker": "Martin Shkreli", "text": "And it's something that I've had to learn very painfully, very, you know, over the years, uh, that I'm almost always overbedding. And I think every fund is sort of the same. And certainly every retailer is the same." }, { "i": 212, "speaker": "Martin Shkreli", "text": "And it's just sort of this weird variance math game that very few people actually map out and say, can I simulate portfolio and just to see what is the" }, { "i": 213, "speaker": "Martin Shkreli", "text": "And in fact, I had a uh after I left the Tiger Cub I worked at, I worked in the uh briefly in the office of a guy who worked at SAC" }, { "i": 214, "speaker": "Martin Shkreli", "text": "Capital, now called Point 72, for years, and he was one of the best managers who's quiet guy nobody's ever heard of, kind of retired." }, { "i": 215, "speaker": "Martin Shkreli", "text": "But I got to watch him before I set up my own hedge fund and did the exact opposite, way over bet on everything. Uh I got to sit with this guy for a few months and I was astounded." }, { "i": 216, "speaker": "Martin Shkreli", "text": "So what I found is that you know he was managing I don't know three or 4 hundred million of his own basically he almost never used the capital >> you know 80-90% of the capital was just cash and he would just make these tiny trades and the guy had almost never had a down I think his record was he never had a down quarter >> in 20-something years of trading and he had like 20-30% returns which is great and the guy just kind of you know just did these little nibbles and" }, { "i": 217, "speaker": "Martin Shkreli", "text": "he never lost money and it was this incredible thing and then of course the second I get the chance to get some capital, I'm 8x [laughter] leverage, you know, and it's just like, you know, it's the dumbest thing in the world, you know, and you live and you learn." }, { "i": 218, "speaker": "Speaker 1", "text": ">> Psychology. Well, thanks so much for coming on the show and breaking down." }, { "i": 219, "speaker": "Speaker 2", "text": "This is always a great time. >> Yeah." }, { "i": 220, "speaker": "Speaker 1", "text": "Looking forward to uh >> seeing where we go from here. Have a great week." }, { "i": 221, "speaker": "Speaker 2", "text": "Have a great weekend. We'll talk to you soon." }, { "i": 222, "speaker": "Speaker 1", "text": "appears to be" } ]