Lessons from Investing Through 8 Bubbles w/ Dave Levine

Transcript

[Music] thank you welcome back to the strangewater podcast thank you for tuning in for this week's conversation crypto is an industry that lies at the convergence of many of the world's Titanic forces Finance technology sovereignty and many more but there's one in particular that hits very close to home for nearly every person who wakes up every morning thinking about blockchain personal investing whether or not you're here for the tech the reality is of using and building on

the world computer require at least some Financial exposure to eth and so in this industry where each media cycle can print or burn fortunes we can all get lost in dreams of striking it huge on a great investment but these dreams are deceptive because they provide a thin Mirage over a shockingly dangerous Minefield of Financial Risk if you aren't careful you can easily Meander into cataclysm today's guest is Dave Levine an investor who has survived that Minefield many times and is here to share the lessons he learned from stepping sometimes around and sometimes directly onto these

Minds Dave shares the lessons he learned investing through eight Bubbles and his forward-looking thoughts on crypto and web3 with near daily videos on his YouTube channel Dave levine.com today Dave is going to tell us his story and share with us the lessons he learned from each of these bubbles as you'll hear us discuss I do not believe it's possible to be taught these lessons from YouTube or from this podcast but I do believe it's possible to hear other stories to give you the context and the tools you need to find when you find yourself in a similar situation and so with that in mind please pay close attention to what Dave learned

over the course of eight Bubbles and maybe you can learn it all just in one one more thing before we begin please do not take Financial advice from this or any podcast ethereum will change the world one day but you can easily lose all of your money between now and then and especially in an episode of this nature I just want to over emphasize do not take Financial advice or form an investment strategy based on what you hear in this conversation these are just the personal stories and the self-reflections of Dave and myself all right let's get started Dave Levine thank you so much for

joining me on the podcast glad to be here so um you know before we get started with really anything I would love if you could just kind of give the audience a little bit about who you are your background and why you believe in the space um all right I mean I don't know how far you want me to go back but um I lived in Japan for a year in 1990 right after college I was like 21. and I had been thinking at the time that there was something about religion and government and communism you know that I didn't love and I should say some governments I used to think the

America was great you know the democracy and free markets I liked and I and I remember trying to think what why are there these things that don't seem related that I like and don't like but somehow they are anyways I had this Epiphany while living in Japan which in the long story of why I figured it out there but it was I had this Epiphany that decentralized systems when you when there's a centralized system and a decentralized system competing the decentralized one will grow faster and become larger if they're both competing to do the same thing I saw this in so many places so that's why the free market would do better than the

central planning why the Democracy would do better than a dictatorship why you know the religion which was telling you what to do would be more constraining anyways and that philosophy made all the difference now I didn't realize I think as big how big of a deal it was for me at the time because I did many other things that wasted time now I learned that's my thing I have good insight into when something is decentralized I understand the concept better that a lot of people so I got on the internet when the web started in 95 I immediately was like you know this is before people even heard of the web yeah actually well

that's like like because my mind is being blown right now to hear that your journey into crypto started in 1990 which is not only pre-satoshi it's pre-internet and so can you talk about what was going on in Japan that like really made that click for you said it was a long story but like let's get into it it was more uh of a political so I was in Japan and people aren't religious there and certain the way we think of the word religious but they had this tea ceremony and the Tea Ceremony to me was like a religion you have like how familiar you are with the whole t-ceremony it's like certain clothes and you sit a certain way and you do they pour you someone pours a tea and then

you hold it like this and there's all these rules that you follow and if you do this it's great and I was like what's the difference between that and being a Hasidic Jew you've got 613 laws and if you follow them it's good and these laws are handed down and it wasn't from God but in Japan though that came from whatever and then um than their government where they came from this dictatorship and I saw they had I I just thought Japan would be just like America because they had the same legal structure and the same laws and the same freedoms but they didn't live as free and I was able to see more of the

difference and I had been thinking about this even before Japan so it wasn't anything to do with technology it was just I you know it it it didn't that this was in 90. this is even before the internet I mean the internet exists this is like PCS are starting to get relevant yeah I I was almost also I was always interested in I wanted to have my own business you know my uh uh my father had his own business his father had his own business my other my mother's parents they had what they had one of their own businesses a band you know yeah bringing music to weddings and um as well as a regular job but anyways and

that was always growing up so I always wanted to have my own business I was looking for and I believed that profits is a moral Crusade like if you that I believed in free markets that if you make money it's because you're creating something of value you're adding to the world profits is just the language that tells you and I didn't think oh you're trying to make money you're bad the only way to make money I mean you can make some money by being a crook but I do believe and we see this in reality the people who make the most money are the people at a creating the greatest things I mean Amazon is amazing you know Tesla is amazing I would much rather be Brian Armstrong than SPF let's put it that way right exactly and and

and again a good year or two and and there's other reasons to yeah we can go into the whole you know I believe that and so I was like I want to have my own business and so then I was attracted to technology because one of my best friends uh he made like a million dollars when he was 23 because he wrote some software I had other friends who wrote software and they made money and it was clearly exciting and new and so I was attracted to that um and then you know I saw the internet and I and I did strike me this decentralization thing but I remember when I saw the web I immediately saw but we we you know uh

some many of your viewers maybe and certainly many of my viewers I know were too they never had the experience of seeing the web the first time like it was always there but one of the things that happened and it reminds me of what's going on now with chat GPT when you saw the web you were immediately like oh I see where this can go everybody had an idea I could put my business card on here which was like wow you know instead of calling the 800 number I could enter the tracking number through the web page like and those seem trivial but at the time it was why you know the restaurant could have their menu you know it's like on

the thing like I wouldn't I could see the menu like there was no way to see a menu right it was like what yeah and I think um I think like there's something pretty profound about like entering these spaces while they're so like primordial and changing and and it's so easy to look at whether we're talking like early wet like 1996 web or um you know like [ __ ] coin season or any of these spaces and think like this is a mess like the only thing that's getting attention is the most outrageous most silly like most stupid stuff and like how can anyone think that this is serious this is a fad like and you just like it's so easy to get stuck on what's in front of you and like Miss like the

what's in front of you is a reflection of like how early and like how unexpressive these things are and so I think like everyone approaches these technology is faced with these Technologies at some point in their life but there's like something different between the guys who look at this stuff and say like oh disgusting racist Pepe is like I need to get out of here versus like the guys like you and me who say uh discussing racist Pepe's like I need to get in here well and it I think it's also more a lot of there's a hundred things and I look at the one that's like oh a better Finance better borrowing lending right better you know better Payment Systems better privacy like all of these things better security

and those are hidden within all of these other things and then a lot of people who aren't really looking deeply they don't see those they only see the things that's in the you know the entertainment news channels which is the stupid stuff because that gets more clicks um and on the internet when it started one of my things when I so I I immediately thought this is okay this is gonna decentralize the spread of information like I understood that other people did and then I saw and I didn't even know what I could do I was just like I gotta figure out how to start a business on this thing right and but the thing then it wasn't as much that it's stupid there was a little of that of course you know cats and and sex are the only things that anyone will ever do but I remember

talking to my parents and and my you know my father he's a business guy and he looks at profits and he's like okay you know and let me get to the punch line before I you know is so I started a mall uh on the on the web which was the thing to do in 95 you know just have a bunch of different stores and we called it a mall we didn't think Amazon which is one store with everything no you're gonna have all of these stores connected you draw a picture of a mall and you click on the store you want to go in right yeah and for those of you that are I was born in 91 so I have like the the in-between view of um what you're talking about and where we are today but like the the internet was different back

then right like the we didn't have search engines we had web portals like Yahoo wasn't a search engine it was like a a portal in the same way that like we didn't really have like these Mega stores we had like like models or portals well the mall was popular for a few years and then people started to figure out just put everything one store right no no just point as being like this it like like you're saying we are seeing the same things in ethereum and in web 3 that have happened in web 2 and in web one and like it is like really really important to understand that right it's yeah there's there's the similarities of but anyway so I I started them I started this I had all these stores and some I made some sales most of them I made none

uh no you know no trap nobody cared but the one store that had the most consistent sales profits and tracks uh traffic was selling sex toys so you're gonna listen but you know it shows me you know so then I started phasing out the ones that didn't do anything and then eventually I had just a couple businesses I was out setting up people as credit card Merchants which I met some people made a lot more money than me with credit card merchant business uh you know whatever uh but anyway so I I did the toy thing and then my other thing was people were like oh can you build me a toy store you know people would have some like porn site

and they would want a choice and I was like if I build all these stores then I got to maintain them all and I thought of you know they used to have this 900 numbers I thought of the the fur I created one of the first affiliate programs and I made it a white label affiliate program that was on the internet in 96 I did that and because I thought well I'll just make one store and let people customize it and that took off that was my uh best business for the all the whole time I actually owned the domainsextoy.com um which you know people it's very everybody thinks that is a big deal but actually it was the affiliate program was really my business so I think um

just to like pause you on here um I actually have a funny story with uh a funny run-in with your industry like I'll bleep out the name but are you familiar with no is a guy that I met um when I was in college and like in computer science and like in this entrepreneurial business and I met him just like in a taxi on the way to a ski town and he was explaining to me basically a very similar story as yours where he found the internet he got super um excited and interested and then um essentially like got successful doing this but like really was struggling with like the stigma that came along with his success and so um you know I think

while like sex toy stuff is like even particularly like stigmatic or if that's a word or whatever but um like I think that is like particular it is relevant to like the things that we're doing right because like especially during bear cycles and especially like when there's dokwans or spfs like it is it can be pretty shameful to be in this business and um so I I wonder if you have any Reflections from a a thing that's much more serious like what is how does that work I had this uh my one of my other epiphanies uh other than the um decentrals decentralization was that I thought business was an art form right and everyone the business you had

the guys in the suits that's who makes money and then the artists they hate money and profits and they're but they're cool and pro and creative it's like why isn't a business a creative process and I I have this attitude going into it like I'm an artist and and so you know when I started I actually like bleached my hair blonde like and had spiky like I was like in a bad band and I looked terrible but most of those pictures are hopefully destroyed but um so I For What and I also believed you know the philosophy of business is that you need to do something different and I knew about that oh they'll say you

aren't good so I was like from an early age sort of almost attracted to or not afraid of oh you're doing something stupid and that's bad I mean I would think about it is it actually bad and in hindsight there are some negatives to the commoditization of sex and I did some things you know I did get into some trouble which is a whole nother story regarding you know thinking it's everything's fine when everybody says it's a bad idea sometimes people are right but uh as regarding business it is good to do that and then I was proven right enough times like you can't have a store with no inventory I had just I just outsourced my I did Drop Shipping and I had the

most products with no information when are you gonna get a warehouse when are you gonna get a warehouse I'm like I don't know I'm looking at the numbers I have more inventory than anybody and I'm not spending any money you know um and so I was used to this and honestly it was worse being in Boston in the 90s selling sex toys like even in Boston now it's fine everyone thinks sex stories are cool now like but it was it was hard so I was used to it and then I did well and then it became totally accepted and then I became cool you know and so I had a number of things and so then when I got into crypto again uh you know I had that negative but I'm like that's my thing like this is what I

do so before we move into like how you got into crypto um fine well we're still in the sex toys uh I am confident that you had problems with uh payment processors because of this business yes in fact you know I'm sure you've heard of choke point 2.0 I it's chokepoint 3.0 that this existed in the 90s and I used to go crazy because so there was there's High fraud things uh out there I know and it was with the video there were a number of things but my business specifically and toys in general it doesn't it didn't have a high fraud rate and then I did a good job yeah you create a product and then you

sold a product it's like kind of hard to do fraud in that in the same way that ever the internet allows and with the room there were things you could do to check and you know whatever we did our thing and my fried rates were always well under one percent um not to mention look at my profit statement look at my you know and it was like I get paid up front shipped to the customer I have no inventory and then I'm working with this one credit card company for years I've got years of statements showing I've never had a problem like and I would and then I one of those companies so first of all yes it was hard to get it and then I had one company and they started over charging on things making mistakes

and I called up I'm like guys what's going on I mean I did this why are you billing me this that and the numbers were getting they were screwing me and I said what's going on I said um yeah we'll call you back I got a letter you're gone within 30 days you have to leave and I had to find a new I'm yelling at people because they'd say sorry you're high risk there's no Financial class tell me and then I it got down to it where it's not Financial Risk and I would force them to say it's political risk okay but the other thing I learned is the way they do it is this at first the sales person or whoever you talk to is like yeah it's

great fill out all together oh we love you yeah we take your business yeah and then and then you submit and then they don't get back to you and they don't get back to you and I'm oh yeah everything's great don't worry about it just like listen to Caitlyn long talk about what happened oh everything's great everything's great and then finally one day you're like guys am I getting the merchant account or not and then it's this super rude we don't do business with people like you and I'm like why would you ever imagine you're gonna get this account and just like yeah I'm like you could have told me this six months ago like all right yeah and actually it's not fine and I I used to get upset um

so yeah that was a thing and that was the and then there was the 1.0 when they they just kept taking it to another level where they really took it to a levels right after 9 11. I remember when yeah and I I um so I have like much closer interactions with the banking industry than most because I worked in the treasure on the corporate side but in the treasury Department of a Fortune 100 company and so um like half of my job was literally just dealing with like kyc like getting customer information specifically because of regulations out of 911 and we're talking about like this 150 year old beer company would need to go get contact information for a 75 year old

distributor because of what happened on 911 like you know it's Madness it's total men and I don't that's actually let's not even go down that rabbit hole but um I just like I'm a huge believer that in order to be in crypto now before it's legal like while people are still going to jail just for touching like tornado cash right like you need to have like been out absolutely betrayed by the financial system in some way and like realize that fairness equality meritocracy all these things that um you know we've been told if if you follow then you'll achieve like it doesn't really work out like that in the real world and so um I've had I've had more you know PayPal in fact I remember when PayPal started

and they're like they're sending money by email and then they've taken your credit card to hold money you you can't do that that's illegal but they had I don't know who they had high up and they were able to keep it going long enough and then I had a PayPal account and then the same thing one day like sorry we don't do business with you I never had a problem never never did anything wrong and they just said Count's closed you can get your money back it you get you can we'll release your money in six months like six months I've never had a charge back and my average order like it was insane and then I also had a thing with the bank one time this was taxes but I moved and then something didn't file and one day I go to my bank account

25 000 was removed I'm like what the hell and then they're like and then ice and they explained it was like well I didn't file so I moved and so I did I wasn't in the attack I wasn't I supposed to file something that said IO zero I didn't file it so they assumed that it was something based on past numbers so they just took twenty five thousand they said oh that's fine we'll give you your money back in six months I said you just took it five minutes ago I just proved you it's fine it was also my address had changed and they didn't update it and so they sent the warning to another and I was just like these people do not give a [ __ ] about me or a business I mean I I and then in California it started getting crazy yeah no man I we I

can go all day like just six months ago I had a moment where I was yelling at my financial advisor at Wells Fargo saying I always realize the purpose of banks was to screw poor people out of their money I just didn't realize that you guys considered me poor as well um so anyway we can go all day on this let's let's move to crypto like so talk to me about like when was your moment when did you first like notice this thing and when did you realize like this changes everything so you know I saw Bitcoin I was probably around when it ran to like it was pretty early maybe around hit thirty dollars it was in the news and I looked at it and I was always a very you know I don't chase stupid stuff or whatever I saw and then

I thought okay oh so it's a it's for payments I'm like okay are there is anyone using to buy anything no so okay I'm not gonna waste my time right now but I I was interested it's like well if it does someday anyways then in 2014 it started running and I and I find and then I understood the the scarcity the digital gold thesis and I was like oh okay plus people were sort of using it it looked like it was going to be used and that and I started running to a thousand but I knew enough then to not buy it when it goes from 100 to a thousand dollars in months man you are smarter than me on my first cycle good for you

yeah well that wasn't my first bubble I think that was number six so I had the scars I lost plenty of money okay well we'll get we'll get to the scars of the bubbles in a moment my education I wish I went to uh you know Harvard I could have gone to several gotten several mbas for Less Price than I lost in markets uh learning so so you knew better than to buy it a thousand I waited you know I got in it and I but anyways my thought was oh this is decentralized money competing against centralized money my philosophy and what you know and I said okay I'll make uh I can make a little bet on this nothing huge but you know it was it was a position like I would own any stock

and I have some of it you know at I bought them at 500 it went down bought something 400 once went down buy some at 300 went down Boston but 200 I was like oh great probably more 200. remember when it felt like when it was probably 250. then it fell to 175 I still remember the day it felt like 20 one day to 175 after I'm sitting in this thing underwater for a year I'm like there's a chance I'm wrong here I think I bought enough I'm done that was and that was the last draw I always seem to miss the last drop um so anyways and then I held it didn't pay attention but then in 2017 it started running

and I've never seen anything go up like this like I've been in stocks forever I've some winners a lot of losers whatever this thing you know 200 and fifty dollars for ab for me seemed forever for a year or more all of a sudden and when it crossed a thousand and it's every day with the 10 you know 10 you know we know what the bubbles are like it's like are you kidding me here what what is this and then I was like okay so what's going on I'd start looking into it I'm like oh wait a second there's a thousand more tokens what what is this um and I remember too what I thought one of the things I just found fascinating

was to me it was just like a thing and there were like two news sites dedicated to bitcoin I'm like this is not a stock this is a a movement like they have two new sites not just one news so I mean this like I was like so and then meanwhile I had left stopped working at the toy business um and I was looking for something to do and then I said you know what I want to do I want to study this stuff I'm gonna what's what's the number two token I just I'm gonna we're gonna learn what it is what's the number three token yeah I before I let you get on to the number two token um and um because I want to separate this conversation into two

parts what this what I want to get into now is like I want to you paid dearly for the knowledge that you've gained over as you say in your show the last seven or eight bubbles that you um you know have experienced and is like what you're sharing with your audience now but um like the first half of this conversation I would love to just like try to like approach that and figure out what you learned and like how you apply that to crypto today and the second half of this conversation I would love to kind of have the discussion of like the journey from Bitcoin to ethereum to alt L1 to l2s and like how like you're coming at this from a investor standpoint but like you're also investing in technology and so I'd love

to like talk to you about like how you kind of think about capability versus narrative versus price and all these things but let's start with the bubble so you have a huge uh kind of like liner in your show is that you have survived I I keep hearing seven I start the show with you know entrepreneur and investor who's uh and who survived who's it sorry who's invested through eight bubbles yes eight I thought it was seven but I've I've for uh anyway so can we start off by what are the bubbles okay I'll try to do quick I I wrote These out on a substance I'll count them out for you it would yeah okay I've got uh in the 70s delivering newspapers the gold bubble I

learned what happens and you know you probably don't want do you want just what they are or the lesson learned or how much detail here if you have if you have a good lesson learned for each one let's hear but otherwise like no need to talk gold bubble 12 year old almost literally finally convinced my parents and my father said no but we almost bought it the day it peaked price never recovered for 30 years didn't cost me anything learned that lesson was like whoa watch out for the hype right probably the moment you want to invest is the moment it's over when you were a dumb kid especially right U.S savings in law and Loan bubble um in my parents you know my father had a business vending you know soda snacks

coffee all of a sudden there him and his Sid and my you know my mother and their friends condos up in the in New Hampshire made money you know it was because of the savings of London and then it was awesome so they did more condos the bank eventually took those so uh these things when it's not you know leave your normal thing to chase the new hot thing can be good but don't you know stop before it's too late don't put all your eggs in one basket um and then I lived in Japan in 1990 the year the beat the bubble peaked what that the year the year it popped and I remember I I majored in economics Japan

is going to take over the world and everything and just it the markets it's unbelievable everything's amazing but I saw when I lived there that that wasn't true and so I thought oh so it's overvalued so it's gonna crash never crashed it went down for 20 years right and so I learned that something is over valid it's good to you know know the long term but don't the timing and prices aren't always correct immediately it take can take time uh.com bubble sort of same lesson in reverse Alan Greenspan you know the market is irrationally exuberant he said in 1996.

okay maybe it was priced too high I think it was at that point too expensive continue to go up four more years including more than a thousand percent for many things eventually crashed and went close pretty much to that price in 96 that he said it was too expensive you know um so that taught me you know because and the other lesson too was I thought only the stupid stuff I had friends buying stuff that wasn't even real stocks and fake and student ah I don't I don't get into that but I do do on Cisco and Intel and Microsoft and I sold 20 of my position at the High that 20 ended up being worth

like uh ten times more than my 80 a couple years later so I I learned how much this stuff goes down kind of but I didn't so then the housing bubble the the The Leverage so I was like I've been through at this point I've been through four bubbles I know what's going on everyone's like oh housing is overvalued by 20 20 that's nothing that was in the.com bubble a minute ago went down 80 what are you guys worried about well if you only have ten percent you only own 10 of the value because you got a blown on it and it goes down twenty

percent you're now negative that's worse than losing eighty percent of something you own losing you know now you're negative so I learned that debt can destroy you and of course I was taking on some debt at the time too to be a [ __ ] in the stock market that was my that was a very expensive yeah let's be clear every single lesson learned ever is learned with your own Blood Sweat and Tears like that's just how humans work you can't be taught you need to learn well I some of it can and that's why I have my YouTube channel to try to help and and you know hopefully our show here you too we're trying to save you know try to save one [ __ ] at a time and I I call people morons because I'm yelling at myself

I'm definitely the biggest [ __ ] I know but I mean I think to reconcile like your Viewpoint in mind is like I really don't think that you can teach people stuff I do think that you can help them understand what's going on and that so that they can learn much faster and maybe what took you eight bubbles might take somebody like one fall on their face I lovely hope so yeah so anyway continue please uh then we've got the Bitcoin bubble uh that one I I told you about that where uh and I what I learned there was what I call Bubble math now many people believe and I'm not sure you're familiar with this math but so you know okay and I and I knew this Bitcoin it could go down he figures 70

to 80 it goes down right now I'm pretty closer to 80. I would be pretty sure at the time I thought oh 70 maybe it whatever so once it fell more than 50 percent and it can go fall to 70. it's only got 20 percent more to go right so you know and you know so maybe it won't or whatever and I'm gonna buy down but we're close turns out that if you do the math um you know so 50 is from a thousand to five hundred fifty percent you're measuring from the Thousand to sort of fall the 75 percent from 50 because to 250 that's another 50 bottom line is 82 percent off is three fifty

percent drops and I didn't I didn't I didn't I didn't know that I think like even more basic than bubble math is like people are really bad at percentage math right so like here's like a little brain teaser don't even bother to do the math right but like if you have a hundred dollars and then I give you five percent more and then take away five percent or you can have more or less than a hundred dollars that's so funny I know it's not the same and I'm like I I I literally have to like do the math in my head well first of all thanks for even helping me more with my point but the answer is you're gonna have less than a hundred dollars Now flip it let me say that like I take the five percent first and then give you five percent are you gonna have

more or less than a hundred dollars have less right and so like that's so counterintuitive to the way that we think where it's like either way you're gonna end up with less whereas like that's oh actually I'll see that's funny that it's less both ways yeah yeah I wish they taught that that's a good now they're about because yeah to be able to they should teach that at a young age so it becomes intuitive one of Buffett's things was that he studied this investment stuff when he was so young and deeply that it's intuitive like for me I literally have to get out pen and paper every single time with these [ __ ] fractions and percents and you can see your your this is like a uh you know the meme with the left curve

right curve have the same take in the middle curve are is like the dumb take like by forcing yourself like by knowing your limitations and knowing that you don't have an innate ability to do this you don't get stuck in the like fallacies and in like the counter-intuitives you just do the math and if it works it works and like again the easiest way to understand this is like okay if I have a hundred dollars and I want to increase it to 200 or 500 or 10 000 or 100 million like by a percent increase I have the space between 100 and infinity to fit to express that if I want to go down to any number I only have the space between 100 and 0 to express that number and so the

lower number is below 100 are going to need to express like so much more than the larger numbers like this isn't how we think of this at all right and you know that's interesting so there's probably some good math one of the things I talked a lot in my videos is you know everyone's always looking at how much to go up and they're not thinking about the other part of the equation is how much could it go down and that is it's so expensive to get killed you know and it's like you're better off having several whatevers and a few winners then to have some winners and some getting killed like and I I'm thinking but there's some math behind there's probably a better way to express it than

for me it almost feels like a gut well let me let me uh respond to your gut and let me pull you back to the.com Bubble because uh you'll get this all the children listening might not but what is the number one like poster child for like the most absurd overvalued silly uh.com company pets.com okay I mean I I have so many I don't know I had a friend uh in this company I can't remember the name of it but they were delivering door to door you could order 75 cent piece of candy and they delivered it an hour okay that's funny no no but um pets.com right so um it it got like a uh it raised hundreds of

millions of dollars at billion dollar valuation it was like it went it ipo'd at the peak of the bubble and then like literally within like two months it was down 80 and it was dead before the year was over number one investor of that company can you guess who it is no Jeff Bezos oh that's funny and so like at the same time as like you need to like be very careful in bubbles and like in these exuberant moments and when you're not paying attention like the way Venture Capital works is like you put out like many bets knowing that like because you're so far out on the risk curve most are going to fail but the ones that succeed like vastly outweigh

the um the the losses and like now we're in very tricky territory because that's a hard uh right I mean that is the risk management thing but I um yes I mean I know that and I do have some stuff that could although you know another topic is how I think I I think what I'm in and I'm not sure exactly what you're doing with your investing but there's apparently a term for it uh liquid Venture it's like Venture Capital but everything's liquid you can get in these things were invested these tokens are like series a series B Investments but you can get in at any size get out at any size and so I don't have to wait till it goes to zero I can get out and so and there are those risks

I mean any of these yeah I own fracks I love it that thing's got that risk reward I mean who knows what's gonna happen that could Moon usdc could become uh you know who knows and I'm not I shouldn't pick on frax what else do I own snx I mean all of these things could uh could have that catastrophic failure but I think I'm thinking more about the math when you balance no yeah that's exactly my point I like literally I'm I lit I've only lost money in this industry I joined in 2021 so like my cost bases are wow okay so your education has moved quickly well yeah so don't listen to me on anything at all especially when we're talking about like

how to build a portfolio but I was just queuing off of kind of what you're saying is that like bubble math is weird because like you have to understand that like if you're in an industry where like you have like 10 000 X Games but also like to zero like very quickly like it risk reward becomes about like um it's a very different mentality than about like like assessing risk and um you know like long-term um forces and these kinds of things and so I don't have answers for any of it but like what you learned in the Bitcoin bubble like is not a trivial thing like bubble math is different than regular math which is different than financial math right

okay um then the so that was Bitcoin bubble that that was uh 2014 then the I called it crypto bubble you could say it was led by ethereum uh but that was oh that's when I finally really learned about this risk management because one of the tokens I liked was Stellar which my thing I only like three two I liked Bitcoin ethereum and Stellar um I I played with other things but I really that's what I put and so my thing was has it launched is it decentralized because no one was using anything has it launched is it decentralized and I feel like there was another thing but anyways Stellar was one of the only things that actually launched oh and is anyone using

it they were that was the those were the only three that satisfied that criteria and Sharon and so Stellar I got in at under two sets within six months it was at 90 cents okay I've never I talk about never seeing something go up so fast and it became like a big percent of my not never mind the crypto portfolio which I started small I don't advise people putting a lot of money in but if you put it in and you make it so I made some in Bitcoin in the last boat then I you know Diversified a little with some ethereum and then the Stellar now it was a decent amount of money and it was just Stellar was like a real amount of money

and I remember talking to somebody who was just like well you know sort of talking about risk management you need to respect market cap he's just saying I mean that thing you need to understand can go down a lot more you know than Bitcoin and obviously your stocks and your home you know and and understanding that risk curve and I always understood that like what you're saying how you learn you can learn but you don't really learn I understood it's further out on the risk curve but the numbers were so extreme that I really learned how much did it go how much did I make in a short amount of time and then it started falling

fortunately I figured I learned that in time and then I learned this idea which I I you know I talk a lot about on my videos where you you when you got to look at all the stuff you own one percent of your portfolio is it and does it make sense like I loved Stellar at the time now in 2018 I you know made my video I've given up on this thing no longer guys I wish them luck believe me and I love the I hope it does great and and I'm not saying it's going away we can talk about Stellar if you want but anyways I uh I did get out of it but I I loved it at the time and when I realized

I needed to sell some it wasn't because I don't like it it wasn't because something changed with the business with the fundamentals it was just risk management and how much how big of a bet do I want to put on this thing that just went up three thousand percent in six months right you know and so to look at Investments like that uh you know I mean I could go on and on about how to I don't know if you want another example just but like with with eth you know in 2019 with ethereum I was like I really I'm like I really believe in this thing and then well really in 2020 I was just like 10 of my net worth in ethereum was like okay that's a good bet a 10 of your net worth in one thing is a big bet General in

this hot in this riskier thing with ethereum that's a big bet at the peak of the bubble if you started with ten percent what what is your percent so now I still love ethereum nothing's changed but if I thought 10 was big two years ago should 50 what is 50 is that too big and okay it's the same thing but it just went up a thousand percent in two years so you know do is that the size of a bet I want to make not to mention I see the Central Bank pulling money out like so I'm I need to reduce re I'm not selling it I'm not ethereum and then it was it felt at that everyone was

laughing at me because I thought a 10 position in ethereum then in 2021 everyone's telling me I'm a [ __ ] because I'm trying to sell down to 10 and when I say trying to sell down it's funny when the Market's going up and your dollar cost average selling and you sell you know three percent and then the next day it goes up by you know eight percent and now I I have more than I did before I sold it you know so sorry I think we might have just transitioned into the last bubble there right uh yeah sorry that was risk management I learned in the crypto bubble and then the last bubble was our last 2021 the everything bubble which honestly finally

the first time I really feel like I I just I'll just say it I [ __ ] killed it I mean I really I saw what was happening I I got in I'm even me I like felt I knew you know I knew when we were in the ballroom alone I knew to accumulate I saw defy early I lined up all my stuff when it was riding I made a video when Bitcoin crossed you know when it started running and it passed like five thousand I made a video that said it's gonna it's gonna go to 50 and higher and when it crosses 50 that's when you're going to want to start selling and that's when all the morons are coming in I I said that like a year before it happened and then I and then in February of 2021 I I said nobody

listened to me when I said that but I just told you and nobody's gonna listen to me when I say at a dollar cost to average eth over three thousand and and we had eight months to do that and so uh and that's you know accumulating stable coins and then again getting back in here at the boring low uh you know June of 2022 started going in and it's all looked great it granted you know I understand that the next bubble you know I I something tells me I don't know it all and uh I will have more lessons to learn but that one uh you know I think I guess the only thing I learned is that being right doesn't get you more viewers on you yeah I let's not talk about content because

that's just like literally the route to insanity but um the I think I think a perfectly valid lesson to learn from a cycle is like if you like stick to like your lessons and you stick to your plan and you like stay measured and like you execute like it works out you know and that's not to say that the next cycle is going to go as well and it's not to say that the next cycle is not but like that's a lesson that like [ __ ] works right I remember because you feel you can't I couldn't help but feel in 2021 it's like I love ethereum I think it's taking over the world it's like selling over three thousand is it gonna go

higher yeah well then why are you selling because it's probably gonna be lower in two years why would it be lower I don't know all I know is I've lived through eight Bubbles and it's going to be lower because that's how this [ __ ] works it doesn't make sense to me I don't know why and now in hindsight it's like oh obviously I was going to go down you know well why would it go over ten thousand next time I don't know all I know is I've been through taking all these bubbles no so I I mean I found your content um I I mean I know it was like right around when I started tweeting which was uh June of last year and I think it's because you reached out to me um and like that's how I found your content and I remember at the time uh

like just to be clear I had been in crypto for less than a year at that point and I had placed my like the vast majority of my bet up to like at eth above 4K and like put too much money in ohm and you know just like first cycle stuff right yeah and so um I you know and what I was I was seeing your videos like as we were watching dokwon tumble right and I remember just like everything you're saying just like wasn't even really registering to me it was just like nice to have crypto content honestly like and you know so you last year you were doing a video a day and so just like every morning I was listening to it and like I don't know if at what point what you said or even if

it was anything that you said like changed how I think about this but like it's just it's so much easier and better to just like pick your numbers like buy Below sell above or like pick your time frames or whatever and then just like have a plan and go into it you know and so like you talk about this the boring low and then I for like I forget what your term is for the top is um and boom Boston boring love yeah yeah and so I don't know I mean like for me how I've internalized that is um I wasn't really buying at the bottom unfortunately because I wasn't listening to you but like I picked my number it's 2K like I'm willing to buy below 2K and then above 5K is like when I'm gonna start selling out and like

I don't worry about this stuff anymore well and just someone just commented on a video on talking about that and one of my thing he was like oh eth under 1500. I was like no eat under 1500 means you've killed it in this boring log because I mean we'll see when it's over I mean the boring low could go on for two more years and end up being you had eight months to buy it at a thousand we're not done here at this point that that's what I've been thinking for a while is under 1500. but over 1500 is still I still I think neck I like to call it when the morons come which is when everybody wants it everybody's getting in more but it's going to be lower in two years and that's when each cross is ten thousand now

that means and what I said to this person I mean honestly you're okay to get into eth up to five thousand I just I wouldn't wait for five thousand like if you want to get it at five it's okay and selling at five just according to the laws of Bubbles and keep in mind all of these stupid things one thing I always say and this used to be true for me that as soon as you notice a pattern the pattern stops happening like it doesn't have to keep following the pattern but the pattern would say you go up about 10x from the boring low in this boring low here if the average cost around 1500 that means it goes to 15 000. and and I don't like Peaks anyways because the peak is two minutes it hits

one price and no one sold it at that like what what price do you have eight months to sell at well to be clear I did buy either four thousand eight hundred dollars so because yeah right I love finding yeah the new I every once in a while I meet people and then I'm like okay do me a favor when you it's the people now who are so negative but they so like I get this feel I'm like oh do me a favor when you start buying call me yeah no and I think I think there's so much more just like content and discussion to have around like the psychology of bubble and look like everything goes back like I really appreciate that you just shared

all the lessons from each bubble but to me like the most important one is the one that you shared in 2017 or sorry with the Bitcoin thing which is like you have to understand that like Bubble World Is A Different World you know and like um I think that that's very much about like bubble math but that's also very much about um just like bubble mentality and um you know like there we are waiting for like the next group of like idiots to come in like that is unfor like the I and you when you say morons you mean it because like you call yourself a [ __ ] and I'm a [ __ ] and like that but I I mean this in this kind of like disappointing and like

pessimistic ways like we really are waiting for like the next group of retail who doesn't understand what's going on to come in and it's not all negative because it's also just the optimism we these we're optimistic because you see that future and then especially if you're younger you don't have a good time frame and you're also again optimistic like I don't care if it I used to be like I don't care if it's 10 years I'll hold for 10 years because I just I'm a long-term thinker and then like after four years you're like yeah we had 10 Years yet like what you know no you're right and look at the end of the day like I am the guy who bought ethit 4 800 but also like I'm here you know and like you you need you need people to come and unfortunately a lot of that is like

Grandma's money who's gonna put into this stupid app that's gonna directly take your money and put it into anchor protocol and then like give it to dokwan's Yacht Company yeah and look I I think ultimately this is like a reflection of how desperate our like society and world has become and like the reason people are willing to like just throw money at things that have like are very sketch but think they might make them rich is because like they're desperate and they need resources but I don't know if that's new uh that I I yeah that's always been the case um and the only thing that the difference with crypto is that everything is priced and you can see it AI right now is 100 if there were tokens for every AI idea they would all be

ridiculous and will be priced lower in two years like totally agree and like this is not a crypto problem like we can go back to the Dutch tulip thing that you know we all learned about at some point where like tulip bubble in the like 1600s literally you know like it can happen for anything it's just what happens when people are desperate and and I think also with the pricing I think you know there's a bubble coming to a theater near you soon in that um you know we used to think people used to say and you know crypto is very volatile but when it becomes more accepted the volatility volatility will calm down you know like Fiat markets but I'm starting to think no I think Fiat markets are going to become more like

crypto like this volatility just seems to be I think it's going to increase I mean look at what's gone on with treasuries and we've seen it with stocks we're more volatile than crypto last year and I'm not sure that's thrown away so get you know strap on your seat belts and learn how to multiply with percentages yeah no look this all goes like I mean you you have the best story right to really understand what's happening now because like so much of the transformation that you saw going on in the 90s which began your journey was like the breaking of like the multi-polar world and into this like one market system and like the one market system in this like massive globalization and like what we had

before was like Taylor built to like as things mature and grow they become more stable and like say what you will about that system but we have left it like we have fully fully left it beginning in 2008 and then fully in 2020 and um it is like I I totally agree with you I think the world is going to look more like crypto and not the other way around and maybe someday we get to a new low Vol world but you know but the next bubble I I'm not I'm not seeing things calm down yeah well again great uh call back to Bubble math so uh with that Dave um thank you so much for just spending the time and sharing so much of uh the wisdom that again you very dearly paid for

um before I send you off can you just share where um the audience can find you so you know I've got the uh old man domain Dave levine.com that links to it's got a link tree where I have my Twitter which is day at Dave Levine zero the number zero.com I've got my YouTube uh which is Dave Levine and I can't put a dot so I spell d-o-t-c-o-m um I I'm slowly writing a little bit and I've got this bubble essay on my sub stack which is Dave levine.substack.com um oh and then you know in my YouTube description there's always a link to uh Discord that must be on my link tree too

I hope uh you've got a Discord where people make suggestions for videos I'm just doing this literally I mean it's fun I literally I literally spend time too with people I do Zoom calls with like help people with their career like I don't charge money I enjoy it it gives me something to do I'm mostly retired now hold my job is hold is not selling Heath until it crosses ten thousand then I gotta you spend 20 minutes selling some um so I enjoy trying to help people I love the feedback I like getting questions and also people believe it or not have helped me and I remember spotting I can't remember exactly what article you wrote uh that that when I hit you up I was like this guy's smart

I'm gonna get him on my show and then you were too busy for me but I came on your shelf so you know now um please you hit me up while we were well I was too busy just getting punched in the face by dokwon and now you came on my show when we're also bored we like are thinking about like what real touch grass activities we can do so it's I would love to come on your show completely different era okay great I don't even remember what it was that you you talked about that I loved um anyways but I'm yeah I'm watching your stuff what is your website I'm not trying to just plug you but you mentioned I didn't know you had a website oh no honestly I just um when Elon bought Twitter and things became just so like volatile on that platform I

was afraid I would lose my content so I just went and got all my threads and then put it um on a website that's called inevitableeath.com and um it's basically just like a Wikipedia of ethereum research so um yeah but that it's like like deep dives into dank sharding into like stateless clients into um all that kind of stuff so if you're interested in that you're pretty well you're more wonky than me yeah no I mean I'm a big believer in like the ethereum core protocol in the world computer and like I've almost like on a intellectual level like I've almost lost interest entirely and like D5 and in nfts because like there's no space left after ethereum right well that's fine I've

never got the nfts don't I think that's for the cool kids that's yeah yeah yeah for the uh Zoomers all right Dave thank you again so much and uh yeah look forward to uh hopefully I know you're not doing daily anymore but I look forward to seeing you on YouTube I do I do a fair amount I'm going for three weeks I've been doing more than that so stay tuned and I hope you get back into watching every day yeah no I mean you post them I'll watch them thank you all right have a good one thank you so much see you foreign