by Simon Black, Sovereign Man:
Today is one of those days when I feel blessed to have such wonderful and interesting people in my life.
A few months ago I introduced you to Ben Yu, a Silicon Valley-based entrepreneur who’s easily one of the most unique people I know.
I first met Ben when he came to our summer entrepreneurship camp a few years ago.
I knew instantly that he was bright… and different.
He had already won the prestigious Peter Thiel fellowship, dropped out of Harvard, and started a successful company (in which I invested, alongside many of our Total Access members).
Among his many talents and interests, Ben is heavy into cryptocurrency.
And a few days ago as he was reading the latest Howard Marks investment memo, something caught his eye.
Howard Marks, of course, is the billionaire founder of Oaktree Capital.
His regular investment memos are highly insightful, and on Monday we told you about the latest commentary in which Marks cast a stark warning to investors.
Marks plainly states in his latest commentary that market valuations are at their highest levels in history…
… that complacency is at record levels, i.e. investors seem to think that the good times will last forever…
… that risk levels are quite high, while returns are incredibly low…
… and that investors are engaging in some damn foolish behavior.
Among them, Mark cites multiple examples of how investors are lining up to buy bonds issued by bankrupt governments.
In June, for instance, Argentina issued billions of dollars worth of bonds with a 100-year maturity.
Bear in mind that Argentina defaulted at least five times on its debt in the previous 100 years.
So it seems likely that the minuscule return investors will receive completely fails to compensate them for the risks they are taking.
Marks also wrote about cryptocurrency as an example of foolish behavior.
On the topic of Bitcoin, ether, etc., Marks states simply, “They’re not real!” and “nothing but an unfounded fad.”
And so… my friend Ben Yu took the liberty of emailing Howard Marks to engage him on the topic of cryptocurrency.
Ben was polite, but incisive as always, saying that Bitcoin is “no more or less real than any shared concept of money. . .”
His point is that the dollar isn’t “real” either. It’s merely a concept that people believe in.
Plus, over 90% of all US dollars in circulation, in fact, are already in digital form.