"What's Coming Is WORSE Than A Recession" - Why Only The Paranoid Will Survive | Patrick Bet David

the problem with America today is the following here's one of the problems with America which by the way is a beautiful thing but it's also a problem whoever that gets elected we have cyclical Cycles okay you got Carter gets elected then it's Reagan senior then you have Clinton then you have Bush then you have Obama then you have Trump then you have Biden so Republican Democrat Republican Democrat Republican Democrat so every time you do this every eight years the system is like changing so Cycles are changing whatever you're doing is changing so you can't really

consistently build on a philosophy over a 20-year period because in America you you can't put a 20-year plan in place there is no such thing as a 20-year plan in America because whoever's the next guy that's going to come take your job is going to say no we're not building that wall no we're not going to do that no we're going to cut those benefits no we're going to add these benefits no we are going to spend more money no we are going to do that no we are going to leave this war no we

are going to get into this war the these things the the complexity what we're asking about is challenging because no one leader is going to run for 20 years we just don't have that okay would you want it in a in a way when it comes down to the economy uh yes I would want it selfishly for me and you because we're alive today is it good for America long term absolutely not okay absolutely not because if that one person's a shitty person that gets into office for 20 years this thing's gone it's destroyed okay

so at least this allows us to not be able to go super extreme because you have to get it through Congress and Senate and it's already complicated enough to do that but to fix this thing you're never going to have both sides agree philosophically economically on what they're going to be doing over a 20-year span all right let's go to the next side that we're talking about while all this stuff is going on you have uh um the the war right now with China and India that is also taking place with iPhones are now being

made in India you can now get iPhones where on the back of it it says Made in India first time not made in China say Made in India really guess who blocked Tick Tock in their country India guess who's blocked 100 apps of China India India is not afraid of China now why does China not like India why do they always be on closed doors talk [ __ ] yet at the same time they're part of bricks you got Brazil you got Russia you got India you know you got China and I think it's South

Africa that's part of the bricks right okay so they're part of the same thing but there's also a way of you know competing the reason why I like India a lot and I think India is going to play a very important role here is because India has seen how China negotiated with us and theyve realized we're not doing that but India's also seen the mistakes China made with the one child Rule and erex expansion and what's going on with a lot of these properties that they build out in cities that looks like just like Paris

I don't know if you've seen the city they build in China it's a city everything Paris has it has it looks identical to Paris if you Google this the same kind of architecture if I tell you if I show you the picture you would think it's Paris they spend billions of their own money to build a city replicating exactly Paris that's what China did okay wow so we're talking about you know the whole everything everything they have they have a shaniz same exact model that they have over there exactly when you see the pictures like

when we're done I can't wait for you to see this pictures to see what that looks like so China overexpanded very quickly India is watching China they had their one child one child policy the average age of a Chinese per right now is 38.4 years old India is 2728 okay India's uh IIT Institute is producing incredible Engineers many companies here will hire Indian engineers and they're rock stars better than MIT in many cases so I think India is very important for the next 20 30 40 years very important as long as India is there China's

gonna hate it they they're not gonna like it the fact that Tim Cook right now has got a very hard job I think Tim Cook in the span of four weeks lost $350 billion of valuation for apple in four weeks $350 billion okay one because iPhone 15 didn't do what they expected it to do two because China is now giving them a hard time because China is their number one market of iPhones they sell now China is sitting there saying wait a minute we sell more iPhones in this country than anywhere else yet you're giving

our business to India who the hell do you think you are right then on the back end the real war that's taking place is the semiconductor chips and there's different levels to the semiconductor chips that's being built and China's specialized in the cheapest kind to make the easiest kind to make where some countries have specialized on a tough kinds to make when it comes on to semiconductor sh this is why China can't stand Taiwan being there this is why China wants Taiwan because Taiwan specializes in building the extremely technical semiconductor chips that the rest of

the world uses and then there's complete other aspects to this that you can get even deeper on so taiwan's going to play a very important role you know we can't have a Russia Ukraine or a you know Israel Palestine Gaza Armenia aeran turkey we can't have that taking place with Taiwan Taiwan needs to stay separate that needs to stay protected how we do that I don't know how we're going to do that we're getting involved in one too many wars but if if Taiwan stays free and China relies on them because China destroyed the world

during covid absolutely destroyed we realize 80% of medications being built there 80% of the technology that we need is being built there they controlled everything car pricing use prices went up 50% like what are you talking about you mean to tell me I bought this car for $90,000 it's used you're willing to pay me $130,000 yes are you serious yes why we don't have chips to make cars are you kidding me no Rolexes they were making Rolexes for 18 months they didn't have equipment to make Rolexes you go to a Rolex shop that had one

one watch like what do you have we only have one watch can I order Rolex no we're 12 months you're not going to get are you serious yes nothing this is what was going on at Rolex store so again the stuff that gets me optimistic is India is Taiwan is we're committed to the semiconductor business here uh the things that concern me is China is erdogan being wanting to be involved in the Israeli War because most people don't realize the most powerful military in the Middle East is not Israel Israel is powerful but Israel has

300,000 soldiers of which I think 150 is reserved turkey has nearly 400 active 350,000 active Soldiers the number one military in the Middle East if Turkey gets involved you know so we have all these dead things that we're looking at obviously the military-industrial complex which Eisen AR talked about where be careful with these companies like rathon and Boeing and General Dynamics and these guys that are making a lot of money when there's Wars we have to be careful with that taking place we have to be very careful with that when that's taking place but uh

yeah it's very complicated very complex Ray Doo says a depression could be possibly around the corner a lot of these guys are fearing what is taking place today Michael bur shorted the S&P 500 1. 6 billion of his client's money and now he did it in a way where you know you're kind of protected but still he's not optimistic about the S&P 500 what it's going to be doing uh one too many moving parts for us to sit there what will happen the rich are still going to get rich the innovators are still going to

find a way to you know win the people who learn how to use AI on their side they're going to advance and Excel even more the acceleration and the disparity between the rich and the poor is going to get wider and wider and wider why because most people are going to spend majority of their lives on Instagram on YouTube on Tik Tok they're not going to learn a new skill set they're not studying AI right now they're not studying technology right now they're not learning new skill sets right now Harvard did an article Harvard Business

Review did an article saying to stay competitive right now every 18 months you have 10 new skill sets to learn as an executive it wasn't like that it used to be 10 new skill set every five years now we have to learn 10 new skill sets every 18 months how the hell do we keep up so so that this is the part where you know we talked about the only the paranoid survival like right now you have to be looking at this shit's out there what part of it do I control what part of it

do I have not no control over if not a billionaire or a hecta or a decamillionaire man I got to figure out a way to increase my market value or else I'm going to get crushed you're going to over the next 10 20 years if you're going to spend more time on Netflix more time watching all these shows more more time playing all these games more time watching all these Tik Tok Instagram if you're going to spend more time on that than building value for yourself and learning new skill sets yes the Market's not going

to favor you the next 18 to 36 months but if you do that fortunately for that Community they're going to be okay this doesn't mean a recision is still not coming though okay so let's start pulling apart some of the issues so the geopolitical part of this comes down to is there something that we can do to position ourselves um you were talking earlier about we create a matrix and it's like okay do we go to war how bad is it like all the different scenarios and we run through them um so but let's sort

of put the pieces on the table we have um global conflict and that's going to do what it's going to do and we need to think about what the plan of attack is there how we position ourselves well we have the debt crisis which is just probably the thing that weighs the heaviest on my mind it seems the most inevitable and because it's so in plain sight and not at all sexy but nobody's freaking out that one makes me the most nervous because you can just run the math and it seems inevitable that it things

have to break for that to work um you've got the what we'll call the Cold War of manufacturing and where that's going Apple China India all competing But ultimately how do people begin to actually put together a battle plan so one of the you you had a really good video about advice for young men and one of the things that you said was you need to be aware of what's going on and I really woke up to that at the beginning of Co covid was a grand uh moment where it's like look behind the curtain

there's The Wizard of Oz and I began to see how things were actually um happening that was very revelatory and just as if you want to be an entrepreneur the ironic advice that I'm going to give you is you need to learn about the body because if you can get control of your body if you can change your physique you're going to find discipline consistency you're going to see that it really adds up to an actual transformation and you can apply all of that to um business ones or yeah to business to anything really once

you begin to understand how the world actually works now you can begin to position yourself to whether any storm but you really do have to understand how the pieces move around the chessboard how you're being manipulated um and I don't it certainly has not then provided me a sense of Clairvoyance and oh I know exactly what to do but I feel like it makes me ask a better caliber of question to me the caliber of question right now is what is the position someone should be working themselves into so I'll paint the picture that I

think and then tell me if you disagree if there's a better thing okay number one I think because only the paranoid survive there's actually two things you need to be paranoid about right now paranoia number one is you can pull out of the market too soon and Miss real opportunities and since no one is going to be able to accurately forecast the timing you have to be thoughtful about that so one strategy might be just that you dollar cost average in every day make sure that you have a certain amount of savings so that you're

not going to find yourself in a panic situation and as Morgan hell said uh the the whole purpose of having cash in a bull market is to make sure that you don't have a for sale in a bare market and I thought that was a a really wise way so um what I'm going to present to people is there's so many variables on the table and I don't know how they're going to go I just want you to be in a position where you have optionality so we're going to optimize for options to do that

you're going to want to be largely in um cash and index funds which is not going to sound sexy and when I say cash I'm talking money market treasury bills something like that bring Five Points right now yep which is [ __ ] amazing y all day every day I'll take it uh now would not be the time in my opinion to invest in anything where you're not just an absolute complete expert where you have so much disproportionate knowledge that you're able to really recognize a deal when you see it so I've heard you talk

a lot about some commercial real estate stuff that you're looking at because you know things are going to go on sale you oddly enough I still find this so fascinating you really understand the baseball card market so you'll know a deal when you see a deal so it's like that to me optionality cash um only investing either sort of blindly in index stocks not just completely removing yourself because you could miss you know it could be six months a year before two years before this is who who knows we really can't predict it but that

we are in a time of such volatility that if you are not taking every step with sort of Maximum paranoia uh you're making a mistake so that's I'm sure if somebody were here they'd have a lot of questions for that but that's my rough guidance to myself I think that was fantastic I think it was fantastic and we're very aligned look I mean here here's also the thing right like where you're you're sitting there watching some of these guys sitting on a lot of cash why are they sitting on a lot of cash are they

sitting on a lot of cash in in case [ __ ] it's the fan is that what they're doing or they just kind of sitting on a lot of cash wondering I don't really know what's going when I say people I mean bshar Hathaway I mean these these guys have a lot of cash right now they're sitting on the table and uh you know maybe they're not buying value stocks yet because they don't yet believe value stocks are here Burkshire haway okay if you're not in this business if if you're not in the business of

Investments financial adviser broker day trader don't play around do not play around and get crazy about it um crypto a lot of people got into crypto and NFD and that was not their world they didn't know about it they lost a lot of money money I mean couple guys made $90 million but the people that bought their stuff lost $89 million but they got their money there's a lot of guys that made the money in nfts but it was a gamble for everybody and everybody's like oh my God but I believe in in all this

other stuff okay great that's pretty crazy you know what about this and what about that now does that mean nfts are going away absolutely not my kids still buy stuff on robloxs and skins and all that there's an element of it that is not going to go away guaranteed is there a 95% of an n that are not coming back yes probably some of them are going to be gone again my opinion I I have interest in things I know about and I'm interested in like right now you know I'm looking at stuff the card

Market got destroyed the last six months destroyed guys are sitting on big cards they were thinking they're going to make a lot of money on it they're not right now okay cars that would have sold for $2 million two years ago are selling for $400,000 today but they're going to end up selling for that value they're not going away because it's art it's non- duplicatable assets you can't duplicate these pieces especially if it's things that are very few of okay so if one of one they're not going to go away art Jamie Diamond's got a

$900 million art collection why Dave Dana White is telling me about a picture he has in his uh office he show me this yesterday that he paid $200,000 for it that picture is probably worth $8 to $10 million today art money in art being made again and non duplicatable assets are very very valuable whatever there's few of very valuable but only touch it if you know a lot about it if you don't don't even get close to it if you know nothing about crypto don't even get close to it don't get too crazy oh my

God I'm hearing you know Bitcoin is going to go to 100,000 it may go to 500,000 but don't do it because you're guessing because somebody else said it do it because you've done a lot of due diligence in it so if you don't want to have that kind of a risk tolerance indexing is the way to go to play it safe now to to the small community of crazies that have an itch and a tolerance for madness Okay this isn't everybody this is some when you have a certain amount of money I'm talking to my

Goldman guy he comes in we're having our conversation he says hey here's what I think we can do with this amount of money I said okay what about it he says here's a strategy we can use the next 90 days I said okay I said do you have any questions for me he says I got one question for you are you okay if in the next 6 months we lose $55 million in this what a great question just straight up I'm like no I'm not okay with this that's a big nut he says uh no

problem totally get it then we can't go the way that this is one of the options we can go in because what do you think of a chance of a World War II happen next 6 to 12 months I don't know man I don't know if I'm at 50% % but I'm at 10% well 10 is pretty high yeah I agree okay if that happens how bad is it going to be you know like during Co down went to 18,000 I don't know if you remember for that minute that down went to 18,000 everybody's like

holy [ __ ] what's going on but very quickly went back to 32,000 so it recovered very quickly okay so what does this mean if you think a possibility of craziness is going to happen that you keep cashing it happens you can buy in dollar cost average okay yes you think you're that brilliant that you can time it historically very few people have been able to do it and those who did got purely lucky do you want to be part of that camp because most people historically what happened to them they missed being in the

market on the five best days right and missing those five best days ended up cost them the difference between making 133% over a 20-year period to making 7.8% correct and that's a lot of money by the way between those two so if that's not the world you want to play don't do it don't at all do it for me the game we're playing is a different game the game is there's going to be a lot of assets for sale the next couple years okay and if you made the right choices and you have cash and

some of these assets don't perform the next couple years there's the opportunity to pick up assets there's the opportunity to pick up small businesses I'm talking to a guy who runs a you know a a a business that they're doing 34 million year and he I said how many companies are there in the marketplace that you could buy right now that are between $5 to $10 million there's at least eight how many of them can't stand you one of them we never talk I said okay the other seven how many of them love you three

of them do the other four know you they know of me but we don't have a relationship get it close to them as soon as possible make the following phone call said what do I tell these guys this what the call sounds like hey John listen man we're both in the same industry how's business and you don't know by their answer how it's doing you're gonna say oh great unlike XYZ we did 32% last month over last year per okay great guess what that's not who you want to talk to next call you got six

more left okay hey Larry how are things oh um yeah I mean look I mean some areas we're doing good some areas why what what's going on did somebody tell you something okay boom check what's the conversation Larry here's what's going on the reason why I'm calling you we're getting calls from guys in our space and some of them are not want are not doing as well as they thought they were going to do and they're about to run out of cash and they're calling us because we have access to certain relationships and contracts and

technology that they want to take advantage of I thought just to give you a call because we're within the same space are you in a place right now where you want to entertain possibility of a partnership where we can help you with our company or no if no list I'm not going to impose but if you are maybe we can have that conversation 5 can pause uh you know about 9 months ago I would have told you to go to hell but uh yeah maybe we can talk perfect um when do you want to come

to the office or would you like us to come to your office would it be okay if we first met at a coffee shop away from everybody no problem let's do that then he go sit down what's going on look man I don't know if I want to do because I heard this and I heard that and I heard this I don't want to be ripped off and I don't want to be this and I don't want to bro let's just see what we can do with the numbers if we can't great if we can

we'll support you go do your thing then the conversation starts so there's different levels right now in the marketplace if you have cash a lot of it companies are going to be for sale the next 3 6 12 months and there's going to be a lot of opportunities for you to increase your market share within the industry if not you're somebody that doesn't have a very high risk tolerance do not screw around the next 6 12 months thinking you are no stradamus and you can predict the future because the Market's going to destroy you it's

undefeated yeah yeah timing the market is a ludicrous proposition people nonetheless do it but what I find is that it actually attracts people that have a gambling mentality that was my biggest surprise getting into crypto because I don't have a gamblers mentality at all uh so I just had a failure of theory of mind so I did not see that coming and then I was in a chat group and I realized oh my God all of these people are poker players I was like this is the same mentality like to them they're getting a gamblers

high right now of taking a risk on some crazy coin and you know rolling the dice and seeing if they can time everything correctly and I just thought whoa okay that's a a very different Beast so yeah in given that my goal is to help people put together ideas that are actually going to help serve them um this to me feels like the time to learn what paranoia positive paranoia really is is success is really a game of mixing optimism and paranoia you're going to need both and if you don't have a constant sense of

this could all go wrong I could be wrong I could have the timing wrong maybe there really will be a recession maybe there won't be a recession um if right now feels like Peak predictability you're really in trouble that would be the thing I would just red flag instantly if you feel like you have a real sense of what's going on uh yeah I would say not the right move and so figuring out okay how do we deal in a time of massive uncertainty what I find so interesting about Ray Delio and it makes me

very sad that he doesn't like to talk about this is that Rey is extraordinarily good at understanding the historical Trends the problem is everything is sort of plus or minus 50 years and it's like when you've got a swing like that there's just almost nothing you can do with it but let me ask you do you see because I think one of the real um one of the real roads maybe it's a 0.1% chance maybe it's a 70% chance uh what do you think the odds that we are already in some sort of Roman Empire

like decline meaning already in it and that it will happen in the next 10 to 15 years um I don't I don't know if we're there I'm not in I'm not in the Doom and Gloom yet why because um the great thing about capitalism is what here's the best thing about capitalism capitalism prevents you from doing stupid things because it's going to hurt your capital okay when I recruited salespeople over the years I gave score there's a scoring system in this book choose your enemies wisely on who you can have your running mates 15 qualities

for running mates and you score them based on six different qualities okay I would look at guys and I would say which one of the people I work with is going to give me the least amount of headaches and here's what I learned okay extremely good-look guys and girls single in their 20s gave me the biggest headaches why cuz everybody wanted to be with them and testosterone levels high at that level and guess what they're going to fool around you may be high one month and kill it next month you're dating three girls in the

office and one of my best girls who made a lot of money last year you just broke her heart you left her for another girl she can no longer come to the office cuz she's embarrassed and she left us to another company so do that for about three years and then go see 17 therapist who have no clue what sales is like then you're going to realize I have to change my Approach then I'm sitting there and saying man that guy over there is so boring dude he is so boring nothing's exciting about him but

he went from making $500 a month selling Insurance to $1,000 a month three months later to making $22,000 a month three months later to making $44,000 a month a year later then he's making $6,000 a month 6 months later then a year later he's making $88,000 a month and three and a half years lat is making $18,000 a month steady man you are there's nothing about you that inspires me but you know what here's what I learned he was married and he had kids so what's the point he has to make it work he has

to make it work because he has to protect those two kids that he has he has a mortgage he has to make it work he can't go screw around he's married the likelihood of him going and clubbing and partying with all the other single people and smoking and doing ecstasy is lower so I realized I I have to invest my time in people who are the most bankable longterm stable home stable relationship more things to live for more things to work hard for more things that'll prevent you from making stupid decisions perfect now bring that

into the Roman Empire following all this other stuff okay Jamie Diamond is not going to want to screw up what he's doing and his legacy is going to matter to him because there's no way in the world he's going to let Sandy wild be able to say I told you guys that guy failed he was a nobody he's not going to let that happen and he's running the most you know company that every day s trillion dollar they see come in and out JP Morgan Chase right um Apple Amazon Gates Microsoft these guys have assets

are they going to let something crazy happened to it I don't know musk who is standing up against the establishment he's not okay with what the establishment is trying to do and with social media a lot of this bullshit's being exposed whether it's talking about ESG and what Black Rock and you know they're trying to do or open Society Foundation or these Dei scores CI scores which California is famous for they're getting exposed right and people are talking about it so social media is allowing us to hold people accountable I don't know if you saw

what just happened right now this week with Supreme Court having a discussion to say social media compan companies cannot take anything off their websites whoa this week so censorship at the highest level you don't have the right to take anything down people can post whatever they want that's crazy if we go that direction was that a preliminary preliminary it's not done yet no it's fully preliminary you got to look into it yes so you got my attention so so because Supreme Court is now what 5'4 right so now it's kind of like they can impose

and kind of push the envelope there okay and they can protect sanity in America with some of the ways that businesses have been bullying people during co co what it did do which was great it was so awesome in one area you know what it was what's that quote you know absolute power you know uh reveals what this person's driven by right you know and and Lincoln said if you want to test someone's character give them power and see what they do guess what during covid who did we give power to fouchy CDC California New

York uh governors of some states little it too much better they were like Emperors pretty much you know hey if somebody in La you see them without wearing a mask text this word and we'll find them and da d d what are you talking about you're paying people in LA to snitch on other people it's a part-time job what do you do for living I snitch I make six grand a month really yeah what an incredible way of making money so during covid if we're not oblivious and not naive we realize what the people of

power really wanted to do and we saw that in Europe everybody's walking around with their covid passport and they're kind of doing this kind of stuff um so to me it was fantastic to really see them show their cards oh this is what you're trying to do to America we're not going to let that happen what did that do you got guys like Rogan to flip I'm no longer on your side you got guys like Elam mus oh so you were full of [ __ ] the entire time I thought you were trying to do

something good got it I'm not part of your Camp I'm going to go by Twitter Scott Galloway this guy's full of [ __ ] Professor Galloway there's no way in the world he's gonna buy he's bluffing all of you he's fooling all of you there's no way he's gonna buy Twitter Elon Musk bought 100% of Twitter and now Scott Galloway on Bill Mah last week with Andrew Kom saying we need to show some Grace we were wrong during covid we were wrong during Co I'm sorry Professor Galloway did you show Grace did you show Grace

oh now you want Grace but you never gave everybody Grace and you're this professor from new York who's had exits of a couple companies and you've not taken salary from UC Berkeley respect you you simply go and do the work I've seen the money you've given to Berkeley three and a half 4 million but you don't have any Grace you didn't show people Grace so what happened now but it was beautiful you saw what universities were doing Harvard got exposed during covid no more campus you guys got to go home okay so does that mean

the annual tuition is still 60,000 or is discounted to 20,000 no no still 60,000 what for what you're not giving me food you're not giving me place to stay you still want me to pay $60,000 yes we do Bingo you just showed your true colors beautiful that was fantastic hey we want you guys to go and work from home really yes all right [ __ ] so I'm living in New York I'm working for XYZ company they'll pay me 250 Grand a year I can't live normal life in New York I'll go live in Florida

work from home except now I'm not paying the taxes oh no no no no we don't want you to work from home why now I can work from home from Florida no we want you to come back to New York now got it so you screwed up the policies but now I'm in Florida I'm not coming back to New York cuz I actually love Florida and I'm stuck here and people from California went and work from home in Texas and now they're saving a 13% now they're not coming back so they were like oh people

going to come back they never came back right the people never came back so this this Empire is falling the great equalizer Tom is social media if social media sticks around and they can't silence people from sharing their thoughts and opinions I'm not talking about people getting up there and saying we should go do this I'm not talking about that I'm say hey what about this and we start questioning things then the people of power that revealed their cars not everybody but the establishment that wants to control more the people they're like yeah we're not

we're not doing that bro you know what do you do if you're playing poker with somebody okay and you're going for the river and you didn't hit you know F you know whatever uh uh pick something you didn't hit your three of a kind okay you missed everybody you got two pair it's a jack you got a jack you got a jack on the board all of a sudden you're about to Bluff the guy maybe go in 50% of what the chip is you know there but one card accidentally falls on the ground and you

see it it's an Ace and there's an ace on there what are you going to do what are you going to do you already know you lost so guess what the establishment revealed their cards and we saw it and if we don't realize it and do something with it and they still move their agenda it was our fault all along but if we site and we unify and we come together saying hey guys we the people have the power they ain't going to push us around we love this country let's fight for what makes this

country great let's go and support what this country was great about let's bring it back to that let's be a little bit more responsible let's have better incentive programs let's expect better polic from them let's hold them accountable to what they say they're going to do now we can go in the better Direction and we encourage certain people to run and get involved in politics and office so I don't think it's going to happen because I think on one end capitalist the rich people are not going to want to lose all them all their money

so they're eventually going to be like yeah I don't support what you're doing Soros yeah I don't support what you're doing yeah Charlie Munger said something very interesting he says look I love Larry thinkink but I don't want him as my Emperor what a thing to say buer here's a guy that's 94 4 years old I don't know how old he is but mid 90s you saying hey I respect Larry but I don't want him as an emperor cuz they know what Larry's trying to do people are not dummies right so those types of people

I think are going to fight each other enough and if we keep our eyes open this will continue to be the greatest country in the world and hopefully even better if we rise up to it if not the best days are behind us if we don't learn our lesson from the last three years if you like that clip check out the full powerful episode here and I'll see you there