Billionaire Boaz Weinstein's Winning Strategies In A Volatile Market 📈 | E52
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I manage 5 billion. We're sparring right now with BlackRock. They manage 9 trillion. 9 trillion? Trillion. With a T, Dr. Evil. And so they have 9 trillion. There you go. I like that.

ladies and gentlemen welcome to 2024 the money mondays podcast i'm here with my co-host the real tarzan so i used to say that he gets 200 million views a month but it's been 10 days into the month of january and he already hit 200 million views and counting so we're going to come up with a new number we'll update you guys in a couple weeks when we hit january 31st on how many views this guy got in the month of january

Now, on the Money Mondays we cover three topics: how to make money, how to invest money, how to give away to charity. Our guest today has done all that and a bag of chips and everything in between. I'm really excited to have him here with us today. He flew in from New York City. We've got to find out why is he in Los Angeles. Because back home in New York City for, I don't know how many years, we've got to find out how long, his manners were $5 billion at Saba Capital. So, as you can tell, I'm excited. I've got a lot of questions for him.

We actually met, charity related, at a charity poker tournament half a decade ago, maybe even longer, inside of what's called Gotham Hall. It has a cool name to it. It is that cool. The place looks like Batman would play poker there. And so, without further ado, let's do a quick two-minute bio with Mr. Boaz Weinstein. Thank you, Dan. I am very excited to be here. I didn't fly in for you, but I would have flown in for you. Thank you, thank you. If you asked me. Yeah, I've been investing since I was 15 years old. I got a...

job after school working at Merrill Lynch and then in college I got a job at Goldman Sachs and so for 35 years I've been really focused on the markets and and I'm so excited to get to talk to you about about the strategy now why I came here is You know, they say never meet your heroes be careful meeting your hair eyes, and I was on Bloomberg TV It was the day after my 50th birthday and they were asking me about the link between investing in games you and I are both pretty damn good in blackjack and

poker, chess, and I referenced a man that I'd never met but had long admired named Ed Thorpe, who's 91 years young living in Newport Beach. He's had some great episodes on Tim Ferriss and others, and he's written an amazing book called The Man for All Markets.

And so I referenced him and I said, by the way, as a bucket list item, I would love to meet Ed Thorpe. And someone listening, you know, it's like Wayne Gretzky, you miss 100% of the shots you don't take. I took the shot. I said, I'd love to meet him. Somebody connected us. And here we are. So I had a two hour amazing lunch with the guy. And I might reference him since he's basically my idol for how to think about investing. Wow, that's so cool. So you already have the meeting? Yeah, yeah. Oh, very cool. Yeah. Interesting.

Yeah, it lived up. So it defied the never meet your house. It exceeded my expectations. That is so cool. Yeah. All right. So let's go over the three core topics. Let's start with how to make money. So...

millions and zillions of people around the planet want to invest into the stock market. They're nervous, they're scared, they're excited, they have bad information, good information, they're researching, they're hearing, there's so much noise. How can people make decisions about how to research or learn to first get their feet wet into the stock market? Yeah, so I was listening to the show you did right at the turn of the year, and you were talking about, there were a couple of things that I thought were really interesting. We were talking about

buy into companies where you understand the product, where you're attracted to the product, whether it's Amazon or Apple. And that really resonated with the putting things in simple terms that investors can understand. Because in the end, you have to have edge, right? You have to have edge in the market. You have to be able to understand where your edge is coming from. And if you don't understand the product well, how could you possibly think you have edge? Maybe you have some information edge or some friend or some access. But what you were saying is

you know, and I always struggle like to try to put things because I do derivatives and some things that are more complicated into English. And I felt like you were putting the words of Peter Lynch from Magellan from Fidelity fame 40 years ago, where he said, Look, my kids kept eating at Albon Pan back in the 80s in New England, and Panera eventually bought them. But, but he

But he said, I just I wasn't interested in the company until I saw what my kids are reading. My wife was buying and and some of those stocks were were ten baggers for him. And so he put it that way. And I think that that that really resonates. Now, on the other hand, when you look at who are the leaders, like obviously Amazon, Apple, Tesla are going to be leaders in the future.

But as a caution, if you just look at leaders, because I think you can make a lot of money investing in bankrupt companies, and I'll give you an example, and you can lose a lot of money investing in great companies. And so if you look at what were the great companies of 1999 during the internet, the first internet bubble, we had AOL, we had Excite at home, we had Lycos, we had all sorts of things that are no longer Yahoo, that are no longer around, or even Shadows of their former self. And so I think...

It's a balance because you want to buy great companies. We have to buy them at the right price and technology is evolving so quickly that what is a leader today? It's possible back then we would have thought that AOL was going to be later today no matter what for sure So that that's one thing. What is my edge? On top of that, you know, you might be doing something in the market where you're providing scarcity So the main thing if you look at like across cycles

What is the main way to make money is to provide scarcity. If everyone's on one side of the boat, and it sounds very sexy to be on that side of the boat, that's why everyone's there, usually the price reflects too much about how good or bad it is. If you can be on the other side of the boat and provide scarcity, sell when people want to buy, buy when people want to sell. In my career, that's been when I've made the most money is taking the other side in extreme, volatile, chaotic situations.

So that's actually a question I often ask at the end of the podcast is about how do people stay calm in the chaos? It sounds like chaos is actually good for you when it comes to investing, if you know what you're doing, if you understand the markets. What would you say to someone, especially going into an election year when there's going to be a lot of chaos, a lot of noise, a lot of media, the stock market is going to go up and down. How can people stay calm in the chaos? Right. So it's really hard because most of the time, first of all, the way I access it for our investors at Saba Capital is

is to do things that a retail investor can't do, to use derivatives and go short. And one of the main things we do for state pensions and endowments is provide crash protection. So I'm kind of a little bit in that sense, ambulance chasing where like I'm hoping for a big event because that will be good for that strategy, even if it's bad for the market. That's that's something very hard for for investors taxes. So what can they do to deal with chaos is to

I think is to have dry powder because people wanna keep up with the Joneses, they wanna be fully invested, things are going up, and you fall into this trap of wanting to stay fully invested and if there are times where you don't, those times often you can't stomach staying out for six months. But if you have dry powder to put to work in the market

you say i'm going to do that after a 15 drop or 20 drop it can happen you can get that drop and then and then there's a hundred reasons why not to invest and i'm not saying it's necessarily a time to invest but but buying when people are selling

and I can give you some extreme stories back from COVID of like the unbelievable bargain. So one of the main thing for me is finding a bargain and you can usually find bargains in chaos. I loved the way you frame that for the, the acai bowl company that was able to arrange this back again to that podcast two weeks ago, arrange really special leases when no one else is willing to sign leases. And I think that, that to me is the main thing because you are a doing something scarce, you should be rewarded for it. And B you don't,

You don't always have to have all your chips on the table and you can you can kind of invest in ranges and not think that you always have to be invested, which is for me, I think, a more defensive way to approach it.

so you said a couple keywords i want to explain to people that are listening first one was dry powder dry powder is essentially having extra cash sitting aside for special moments so think about your piggy bank or think about your savings not your savings to cover your life so if you have savings set aside let's say you've got 20k or 30k or 100k whatever the number is set aside to cover your overhead in case you lose your job or have a medical expense that's not dry powder for investing that's dry powder to protect your life

Over here there's dry powder. You might save 10k, 20k, 100k, a million dollars. Again, the number is all relative to your situation. That money is ready for a situation, an investment.

Something goes on the market. You're like wow Tesla's gonna do this. Maybe I want to buy more stock Amazon's gonna do this Maybe I want to buy more stock. My friend is opening their seventh pizza restaurant Maybe I want to put in 25k into their seventh pizza restaurant dry powders cash You have sitting on the side for those special moments It's outside of your normal like normal investing money or your normal overhead dry powders extra capital You also mentioned something about shorting Can you explain the main idea of what shorting a stock is or shorting a company is sure so?

Shorting was shown to be extremely dangerous during, of course, the meme stock craze with GameStop. GameStop, yeah. I'm sure you were all over that. But there are ways to be short using options where all you can lose is your premium. So you buy a put, which gives you the right to sell a stock, the right but not the obligation. And in that way...

in case the stock falls a lot, you can make multiples of what you put in just like a call if the stock goes up, but all you can lose is your premium. Now for us at Saba, we're shorting, involving products that retail cannot access. They're called credit derivatives. We're shorting credit using what's called swaps. This is like, this is not for today's conversation because it's not something we can all do. But there are things one can do

to take advantage of chaos and dislocation that don't involve shorting and what we'll get to that with closed end funds when we get there.

so on a closed-end fund side can you explain like can someone listening that has 25 grand 100 grand 500k a million whatever the minimum is can they actually invest into your world like we all watch billions right watch billions on TV or like yeah I want to be like x capital I want to I want to invest in that but oftentimes they have a minimum of like 10 million dollars or some crazy number that 99 of the world can't afford to get into is there a way for someone to be able to invest with

25k, 100k, 500k, whatever the number is to these closed end funds. Yes. So first of all, this kind of investment is not going to be a double, triple your money. And I've been more of the tortoise than the hare. And I think for all those things that go up 5x, there's a lot that go to zero. And if you can make a 10, 11% return over and over and over and over and over,

That's awesome. And again, going back to where's the edge, buying something at a discount. If you're paying full price for something, that is not as good at buying at a 10, 15, 20% discount. So let's get to closed-end funds. They've been around for a century. They're sort of a predecessor to exchange-traded funds, ETFs, which probably most of your listeners know a decent amount about. They're on the New York Stock Exchange, 400 of them. There's another 300 in London, but let's stick to the US. And they are pools of assets. Maybe it's

equities, maybe it's energy equities or tech equities or municipal bonds or high yield bonds managed by the most famous managers in the world like BlackRock, PIMCO, right? Pick somebody out here in California, Pacific Investment Company. And it's a way for mom and pop to get one stop shopping. If you want a pool of California munis or you want a pool of energy equities, they'll manage it for you and you can trade it in and out like a stock.

And so these funds, which again, have been around forever, and I've had some nice conversations with both Ed Thorpe, who's 91 years young, with Warren Buffett. Warren Buffett did it in the 1950s. Ed Thorpe did it in the 70s and 80s. So we're not breaking new ground, but it's how we approach it and what's going on right now that makes it so exciting for me to talk about. So why closed-end funds? And how can investors listening profit from them? So

We can screen them. We meaning even mom and pop or retail investors. And we can find that some of them are actually at 20 point discounts. So what does that mean? What does a discount mean? So you have a basket of things, in this case stocks, but let's just make it easy. Let's say you had a basket and you had, you know, I'm looking at a camera and I'm looking at a cup. Okay. And the camera's a hundred bucks and the cup's $1. Together they're worth $101. That's net asset value. But that cup and camera inside of a box is,

And you can't break the box open and take the things out and sell them. You just can buy the box and sell the box. That 101 can go for 90, it can go for 80 and even some crazy cases and go for $70. So we are buying pools of California municipal bonds for 20 or 15 or 14 points below what they are objectively at, what everyone agrees they're at.

and a discount is a great start but that's not everything right so you start with a discount you buy things over and over again in a discount well discounts can sit there for 10 years and what's the benefit of getting something to discount if you can't sell it for fair right so what we do at saba

is we buy up things at minus 16 and we keep going and we keep going. And if it doesn't naturally close, eventually we have a lot of it. And these companies, these closed end funds, they have a board, they have an annual meeting, they're governed by the SEC on the New York Stock Exchange. And we get so much of it that if the manager will not press a button, because they have a button to press and turn that discount into no discount. And I'll tell you about that in a second. If they don't do the right thing, we will put people on the board

Replace their board members and do the right thing. We've done that about six dozen times Whoa, and so we're often sparring with these big managers. I manage five billion. We're sparring right now with BlackRock They manage nine trillion nine trillion with a T. Dr. Evil and so so they have nine trillion. There you go I like that so and they manage Basically a quarter of the closing funds and it's you know, it's this big

behemoth right in new york and there's a fund right now the blackstone innovation and growth trust big uh z it's called big z bigz is the ticker you can buy a dollar of things that blackstone thinks are really smart tech investments for 81 cents you buy 81 cents on the dollar you can buy um a blackrock new york muni fund bny blackrock new york

for 86 cents in the dollar. And again, that discount is only so good as if it's going to be converted. And we buy up enough shares that we're now in both of those at least in big Z at a spot where we own something like 18% of the fund.

And if we keep going, we will get to a spot where us, people that want the discount to shut, which really should be everyone, people that are aware, people that are copying us, people that are just happen to be in it before us, where we will vote for someone on the board. The board's supposed to represent the investors, not management. The board of directors is supposed to be working for you, the shareholder, and they can press a button. And what is that button? They can merge it.

with a mutual fund with an exchange traded fund you have a mutual fund you want to get your money back you call your broker he gives you back 100 cents in the dollar he or she mutual funds exchange traded funds you always get in and out at fair

And if you can turn presto a closed end fund into an open ended fund, discount goes away. And so we've been doing that left and right. We just we've had dozens of successful campaigns in the last few years. We we won activist of the year and I had the most number of campaigns live right now, which is 64 different campaigns. So we've been busy. But I think for the retail investor, this is an amazing way to pick the thing you want and get in at a discount and let us hopefully, you know, carry you to fair value.

During COVID, there was...

I mean, they were obviously many years before that, but they got really famous in 2020, 2021. You saw Chamath do a bunch of them. We saw different characters getting into the space. I was getting bombarded with different deal flow. What is a special purpose acquisition company? What is a SPAC? Yeah. So SPACs are kind of cousins of closed end funds. So it's interesting you say that. There are boxes that had a certain life to them. So closed end funds go forever for the most part. And SPACs had a couple of years before

to find a flying car company or a biodegradable shopping bag company or something really cool like Fabletics or whatever it was that wanted to go public, crypto, cyber, whatever. And someone would IPO it

you'd have cash sitting in a box. And if they could find a company to buy, then that cash would be used to buy that company. Now, there were 600 of them or so two years ago. I don't know if you know this, but at some point, we went from having almost none of them to owning over 6 billion of SPACs. I owned hundreds of them. Oh, you owned several? I did. They're basically all matured and gone now. So SPACs, what I love about closed-end funds, I loved about SPACs when they started to trade at a discount. Because there was a point where, again, it was cash in a box.

like my example with the camera and the cup, and you can buy that cash for basically a 4% discount. So someone has $200 million, you can go buy it for $170, $180, or something like that. And if they find a great company to merge with, great. And if not, you just get your cash back. And so those are the kind of low risk, when I said tortoise versus the hare, that's the tortoise. The hare was in the height of the SPAC boom when it would go public at 10, it doesn't know who it's going to buy,

It goes to 13 because people are excited. It's SoftBank. It's Tramoth. It's whatever. Well, at 13, they don't even know they're going to buy. It could easily go back to 10. I got excited when they went to under 10. But so SPACs, I think back then there were almost 700. They were coming fast and furious. We would put in for every single deal. And...

I woke up one morning and unbeknownst to me, I was the largest investor in the Donald Trump Truth Social Network. I didn't ask for that. Didn't want it. Got rid of it. Got rid of it a little early. But you never know what it would turn into. But out of 700, there's now probably under 80 of them. And maybe it's a good time for someone who believes in themselves, who believes that there are some interesting private companies. You have a lot less competition. But SPACs have really shrunk and closed-end funds around that time even grew.

All right. We talked a bit about the craziness and making money and billions of dollars. Let's say that the real Tarzan, he gets an endorsement deal. Company comes to him like, you know what, Tarzan? Here's a quarter of a million dollars. And boom, all of a sudden...

Wells Fargo, Bank of America, whatever, a quarter million dollars shows up in his account and he wants to start investing into the stock market. What is someone that's a first time investor that all of a sudden has a quarter million dollars to play with? What are their options, decisions, thought process when they first want to get in? So first, there's a level of how rich or cheap the stock market is compared to how much the companies are earning. And you can think about, is this a good time? Is it not a good time?

you know that's backward looking how much it's earning how much will it earn obviously uh it's all about what's happening in the economy we had this inflation problem a year or two ago um i think someone i think your tarzan example first let's let's realize treasury bills which two years ago were giving you zero literally like 0.5 or zero are giving five percent right now five and a quarter and that is not a bad place to say okay let's let's put some in that that's our dry powder because it's not sitting

dead. It's sitting earning five and a quarter with no risk. I mean, anyone would want five and a quarter, no risk than six with risk, you know, expected six. I don't mean minimum six. So, um, cause that's where the risk comes in. So, so put some into something ultra safe, like a three month or a T bill, one month T bill, keep rolling it. And then some of it, you should look for things getting back to the kind of, uh, interesting, uh, touch points you mentioned about investing in things you understand. And, uh,

and trying to find moments where those are at reasonable valuations, you can buy things at a high valuation and it will go higher. And that's, that's actually a very much a winning strategy. Just look at Nvidia, for example. Um, and, uh, but at least my style is to find things at a discount. So it would be, let's say Tarzan said, I want some uni bonds cause I don't want to pay California taxes. I want to have something that's going to shelter me from taxes on my income. You can find, um,

you can find munis where you're getting four percent so that's four percent after tax that's pretty good tax adjusted and then you have this discount and hopefully you can make another that 85 going 100 by the way 85 going 100 is not 15. 100 going to 85 is 15. you could all do it in your calculator 85 going 100 is 15 over 85 right so that's more like 18 percent right so that's if i could achieve that as an investor in one year or even two years you add that to the four for the

tax-free and you got a very nice double-digit yield. So I would put some into closed-end funds that are investing in something I believe in, whether it's tech stocks, energy stocks. And the discounts today, you know, I happen to be in your studio today, but the discounts are basically as good as I've ever seen them. Okay, so for the last couple years, I mean, I've been doing this for 10 years, but the last couple years, I give this speech. It's called 40-40-20. I tell people, crowds around the country,

40% low risk, things that I want to make between 5% and 9% for the year. 40% medium risk, things I'm hoping to make 10% to 30% for the year. And then 20% high risk, which I call my shot at glory, where I hope something crazy happens. 200%, 500%, 1,000%. But it's called high risk for a reason that it might not work out. What is Boaz Weinstein's thoughts on the 40-40-20?

I really like that framing. I'm sure there's been other framings maybe, but I happen to really like that. And we so we happen to run two of these closed in funds.

on the New York Stock Exchange. One of them, the ticker is my initials, BRW. No accident. I wanted to make sure people knew how important it was to me. And in 2022, you can see it in our investor letter, was the number one performing closed-end fund out of 247 of them. So I really care about it. And I kind of adopt a similar 40-40-20 in that I have a little bucket for speculative startups. Yeah.

And so I think you should be investing in growth. And in some ways, though this is not my expertise, I understand people that invest in early stage artists where you're buying something for $5,000 or $10,000. If one of those hits, eventually it's a Basquiat or whatever, you could have 1,000 losers and you still have a giant win. And I think investing in tech early stage where you feel you have some...

you're not the, the, the guy getting day old bread. You're getting something cause you're connected to someone that brought you something interesting. But in that 20 of going for it, um, it really, I think should be early stage, uh, companies and, um, and,

this is actually a pretty good time to invest in them because some of the big investors like Tiger Global that was writing checks within hours of meeting a company had huge problems in the last couple of years. And so capital is much harder to come by. And so I like I like that 40, 40, 20 a lot.

We're not particularly known for the 20 in terms of our expertise, but I've been doing it with pretty good results. One thing about the 20, I'm going to give you an example of an e-cigarette company, Enjoy.

I don't know if anybody, right? Yep. So I invested in enjoy when it was, had a value of 300 million. It was number one market share. It was, I remember we were at the world series, you and I, and it was like on the, it was, they had all the, on the tables and it had Bruno Mars as a tastemaker. It had Sean Parker in the round. It,

It had former Surgeon General on the board. What could go wrong? And my friend who runs research at Morgan Stanley, who is a tobacco analyst, said, I would put a chunk of my net worth into e-cigarettes. It's going to be a huge thing. So I do it. And the company basically gets run into the ground, goes bankrupt. Now, my friend, Jason Mudrick, I didn't even know it until after. A year later, buys half the company for $100 million. Yeah.

So he buys a bankrupt company for his investors, half of it. And like five years later, sells it to Philip Morris for three and a quarter billion dollars. Okay. So you can invest. Now, now I'm so happy for him. I'm so happy for him. I played poker with this guy, like on a heads up poker machine. That's right. But his, his penthouse was like $30 million. It was like, well, I'm not, I'm not talking about that topic, but, but, uh, what it was, it was crazy. But,

But that shows you, like, you can invest in the same company. It's all about timing, right? Let's get back to, I had terrible timing. He had amazing timing. He bought it when it was bankrupt and made a huge success out of it after Philip Morris completely blew it with Juul, right? They paid $35 billion for Juul. $35 billion? Wrote it to zero. Wrote it down to zero. Oh, shit.

Well, they can afford it. It's Philip Morris. And I bought it when it was a real company. He bought it when it was a bankrupt company. I did terrible. He did great. So there's like a little bit of a lesson there. And that path dependency, which is a little bit like butterfly effect. I'm going to give you one other quick example. How you did on something.

Completely unrelated should not influence some on some new investment, but it does it does whether you're feeling poor or you're feeling rich My first boss who was just a wonderful is a wonderful man Ron Tana Mora when I was at Deutsche Bank He told me the story He's a Seattle guy and he did private investing and he was pretty rich guy back in the back in the 90s and he lost three quarters of a million dollars on some medical company and

He goes in Seattle to the bottom basement of a color tile store building. In the basement is a guy he knew because they were both in the hedge fund world, a guy that worked at a firm called D.E. Shaw, who was starting out a company, and he could have bought 10% of it for a million dollars. And that guy is? Jeff Bezos. Jeff Bezos. Jeff Bezos. And he came really close.

But he was feeling a little bit, if I recall, he wasn't feeling it because he had just lost three quarters of a million in something that was supposed to be great and went to zero. And he told Jeff Bezos, you know, you don't forget these stories, he goes,

How are you going to compete with Barnes and Nobles? How are you going to do that? Right? A little bit like Blockbuster and Netflix. And he almost pulled the trigger and he didn't. And then he would have been trapped in these private investments. You're not getting out of that. He's going to ride it to being one of the richest men in the world. And he didn't do it. And that path dependency, and I don't exactly know what the lesson is in it, but in hearing that story,

that there is a butterfly effect and for you to make a ton of money, you also have to have been in a spot to not be emotional, to not be risk averse. And it gets a little bit back to the dry powder question and also to be able to say, look, I'm in it. I'm not going to put my eggs in one basket, so I'm going to lose half as much on that last one so I can do ten and not five. Because if I only if I only give myself enough money to be right on five of these these 20% bucket things that you're talking about, you could go over for five and then you're out of the game, right? But if you have ten,

You know, the ninth could be the Basquiat. So that's the other thing I often tell people. I always tell people is I'd rather them invest a lot less and do it over and over and over and over over the course of time because you cannot make good decisions and investments with emotions. And if you put too much money in something and it goes up, you think you're a genius and you might sell it. It goes down 25 percent. You want to jump off a building and you sell it.

But if you think that Apple will still be here in five years, what does it matter if it goes up or down 20% this week? Yeah. And then down 8%, up 12%. Who cares? If you think Apple is going to still be here in five, 10 years and 15 years and 20 years, why would you sell Apple?

and people make emotional decisions because if they put in 100k out of the 100k they have saved up and it goes to 118 they're like oh man i'm a genius they sell it but if they put in 20k and it goes 20k to 23 they're happy but they're not going to go run to the bank you know and immediately have to go sell it and vice versa if it goes down they're not going to do the same thing either i call it a visceral reaction if it goes up too much or two or down too much you have a visceral reaction if you have too much money line you're like

It's panic and you have to sell something. And too often I hear these stories of someone that like, yeah, I invested in Amazon and I sold it and I bought back in and I sold back out. I'm like, why would I ever sell Amazon? Why would I ever just, why? Do I not think Amazon's gonna be cool tomorrow and next year and the year after? Is Jeff Bezos gonna stop? I mean, he's young. Is Mark Zuckerberg gonna stop? He's a baby compared to like these bazillion dollar companies. Like I just don't, from my investment perspective, I try to keep it as simple as possible for people like,

If you believe that Apple and Netflix and Google and Facebook or Ford or Walmart, the places that you buy from are still going to be here in five years, 10 years, 15 or 20 years. Why would you sell? And the market's going to give you opportunities. Look at Facebook. Look at Meta a year ago. A year ago. It fell like 70%. Yeah. And whatever they were blowing on VR and whatever, it's the same-ish company. And the market has a tendency to over-

overreact to two bad quarters. And that's actually a great example. I actually made the mistake. I had an analyst who called it who said, "A hundred bucks a share, it's unbelievable." And my average exit was 140 and now it's like back to whatever it is, 300 or 250. I actually don't even know because I stopped looking at it. But if you're following these companies, you're going to get a chance.

to buy in on at Amazon at some point at a big down move and again back to the dry powder you got to do it because that's when people are selling or grayscale Bitcoin right yes that's a good example like people were selling at minus 45 percent a year ago you had Bitcoin at a 45 discount now it's converging on zero discount a little bit like our closed-end fund story so fascinating do you have any questions I have no questions your eyes have been glowing the whole time just listening it's insane how much knowledge about the stock market and

Investments is just endless. It's like if we asked you about snakes, I mean, you could talk about it. Yeah, I can go all day. I love it though, man. I love to learn. And, uh,

I met some snakes where I work. I bet. I always ask him this question. Out of all the animals in the world, snakes, lions, tigers, and bears, which one, what animal are you most scared of? And he always says... Humans. That's the truth. The snakes on Wall Street, right? Those are the biggest pythons out there. Okay, so in the third segment, I'd like to talk about charity. But a little bit of a twist because I want to add some gaming into it since we met at a charity poker tournament, which I got second place in because

to Shannon Elizabeth. So frustrating. That's a good person to lose to. Well, it's good for the charity and for the brand because obviously she's very famous. So it was fun. We get down to Heads Up. There's like three, four hundred people there. And I'm so excited because it's my first time there. I get to show off and like, yeah, I'm at the final table, right? Get down to two of us. It's like one or two in the morning, which I didn't expect. And I'm Heads Up versus Shannon Elizabeth, one of my first crushes on, you know, from the movies, right?

and it's a very specific movie yes very specific role she had yes so i learned a lot about life during that movie okay so we're playing heads up and we're going back and forth and i get ace king and she has ace eight it's not that i'm bitter that she hit an eight right i mean so she wins the charity poker tournament and i actually realized like

it was great for the charity, right? The branding, the marketing for them was what we were there for. Um, but it made me addicted. I've never missed it since then. I fly in every year to see you, our friend Casey, and to play poker and like to try to get back there. I made it back one more time. I still have not won that thing yet. I got fourth. All right. So,

Why? First of all, the question is, why is charity important for people individually, for them and their families or for their businesses? Why should they be involved in charity in some fashion? Yeah. So I don't think you have to give to charity because because you feel it's an obligation if you have extra money.

because it's doing the right thing, because it's what's expected of you. I think actually it's not bad to realize that it also makes you feel good and you can do it for that, let's call it selfish reason, because it makes you feel good to help people. Of course, the earlier things I said are true as well. And the charity that you got sponsored

American Pied by Shannon Elizabeth, is for promoting charter schools, the charter school system, which has been shown very recently in some pretty robust studies to be outperforming for, at least in New York, for black and brown kids significantly over the

the public school system and it gives parents choice and all that so something that i went to public school and i really believe in and so so i think it's just it's it's like investing like tarzan was saying like it's endless the number of things you can do the ways you can approach it you could say i don't know what to do let me give it to the american red cross or to whatever because they'll know what to do with it and i have a bit of a different approach but but i think that um

There are ways to find situations where you can basically multiply your impact or you can find a situation that's very personal to you. I heard you time out a little bit and it made me think of some of my own examples where you can do something like super micro. And I think that in some ways that as a human, that brings you closer to actually the doing of it. And I don't mean giving food in a soup kitchen. That's beautiful. But I mean like finding an individual that needs help

and maybe changing their life. - Is there any stories like that? Do you have an actual scenario? - So I was reading the New York Times one day, and I was a really good chess player when I was a kid. I was a master, and I read about a boy who was not that great, but he had won the state championship in New York. I mean, it sounds like he's great, right? - He does, yes. - But he had won, like, all right, his rating was not yet that great, and the New York Times journalist wrote about how,

he was homeless. His dad was doing two Uber shifts and they were homeless from Nigeria. This boy, Tanny, T-A-N-I. And, and there was a Kickstarter and, and I just, the story just resonated that the dad is trying so hard and the boy actually is, is quite good. And it was compelling to me. And so I, I am, I put in a, I put in 10 K and they've been the Kickstarter at the end of all that they had raised like $250,000. Okay. I,

As one does, I sorted who else gave. You want to know what club you're in? And I was so shocked. There was one other donation, exactly mine. I don't think we're destined to meet, but she should meet Tani because he never met her, is Kamiya Kabayo. So she also gave him $10,000, right? So fast forward three, four years, the dad is now a real estate broker. They're not homeless.

The boy is the number one kid in America, 13 and under. Whoa. Okay. And, and like, there's a butterfly effect of that is crazy right now. I don't think my 10 K changed, change that. But you think about comparing that to like giving to like your university that sits there and it just grows and grows and grows. And then they waste it or they do whatever with it or,

you know, or they put it to good use, but it's so much, you don't feel that impact. And so that was for me something. And then, of course, you often get to meet that person. And I have a recent story from being in Israel, meeting an ex-hostage, where you can get really personal with it. And meeting Tani, and I didn't meet him for years. And then I brought him to a school in Bushwick where there's...

There's a firm on the investing side that works with this school and that I'm very impressed with. And so they asked, "Can you come?" And I said, "I can do better than me coming. I can bring Tanny." Did you actually play poker or play chess with them? So first he told his life story. They had mapped out his book onto these sheets on the wall. And then he played the kids. And then, yeah, they asked me to play him a game.

Well, he's number one kid in America under 13. He's higher rated than me. I'm kind of over the hill. But something weird happened. I kind of I brought I brought the I brought the Tarzan in me. And then I had this weird moment where I'm like, but these kids like he's their age and they kind of idolize him. They've read a book about him. What do I do? You know, and I did not throw the game. I ended up beating Tanny, which which was a weird. It was like, oh, I don't know what the right thing to do is. You can you can tell me. So playing playing full steam is the right thing to do.

Same thing. Like, when people talk about with their kids, like, you always see the videos, like, the kid trying to throw a basketball and the big brother swats it. Yeah.

The same thing with wrestling and everything in between. A lot of our society got soft on thinking we need to coddle them. I need to feel the loss so that I get better. If I don't feel the loss or feel the pain, I'm not going to go train or practice. Why would I practice and train if it's okay if I get a seventh place trophy? Anyways, a whole different subject. Okay, so I'm glad that you fought hard in that game. And obviously it's hard to beat someone that's that good at chess. Chess is one of those games that it's like... Actually, I'll tell you a fun story.

Phil Ivey, to me, is the number one poker player in history. Oftentimes in most sports, there's like, is it LeBron or Michael Jordan? Is it this person or this person? In poker, it's just Phil Ivey. He's just the number one. There's no question about it. Cash games, online tournaments, and everything in between. He's taking some money off me. I bet.

So he had a charity poker event at the Golden Nugget casino I'll never forget many many years ago and there was a grand master there You probably know who's I don't know the name off the top my head you probably know him and he has got one the highest ratings on the planet and The gimmick was you go to his table says chess board and he says you choose an amount to donate you pick any spot on the board and

if i don't checkmate you in that spot you win and they had this crazy prize i forgot what the prize was but it was crazy you're like wait can i just commit like commit like chest suicide and like die over here or get stuck over here and i asked him that flat out like i'm trying to like basically know i'm gonna lose but can i lose somewhere else on the board he's like sure you could try i played 11 times at a thousand dollars each

And I tried everything not to lose in those spots. And he beat me every single time. That was the biggest sucker bet. I'm embarrassed you, Dan. I don't even understand because he could he the only way you would not lose on the square that he said you were going to lose on, you'd have to beat him. No way. Yep. Yep. So that's really what those odds looked like.

And it's okay. I knew I was going to lose because I was doing it for charity, but I didn't think it was like, I thought I could commit chest suicide. No, they don't let you do that. You could resign. Actually, that would have been a really good trick because you can resign and that is a legal move. Resign move one. Actually, that would have been awesome. Okay. On the poker side of things, there's actually a strategy called Kill Phil. And Kill Phil's strategy, there's a book about this, is if you are

outwitted or out-skilled by your opponents, let's say you're playing against a guy like Phil Ivey, which is kind of the main name of the Kill Phil book, is you just go all in.

whenever you have x amount of hands and it tells you like ace king ace queen ace jack is ten pocket eights pocket nines pocket tens they give you a range of hands and your job is just to go all in no matter what they do no matter what's happening no matter what position just go all in why well for the most part it's hard for the fill in this example to have a hand right there's 169 hand combinations in poker and there's only x amount that are good enough to call and all in bet second part is if they you know muster up the curse to call they then have to beat you

And so you still have a good shot at them losing to you. In chess, there's nothing you can do. There's some interesting stuff that's been done where you say, I'm going to play two games at the same time. One of them is white, one of them is black. And you're the world champion. You're not going to beat me. So you're white. You go first. World champion moves out his king pawn, two squares. Now you're on board two. You just copy the world champion. You make his move. And then you make your move. And so whatever he does...

whatever he does, you do on the other board. Now that sounds like it works and there's been stories based on it actually doesn't work for a complicated reason involving check and whatever and won't go into it. In chess, there basically is no luck. There is bluffing a little bit because sometimes something's so foggy. Six moves ahead. Six moves ahead and it's like you can... And if a great player makes a move, the opponent might think probably it works and so you could do kind of semi-bluffs but the game basically...

one of the most appealing things about it is there is no there is no luck whereas you know i've beaten phil ivy in a hand and i've been phil helmuth in hand but over the course of time over the course of time i'm going to be the big loser yeah okay also on the charity side why do you like this charity in particular when you go to the hedge fund charity poker tournament are there other charities that you like like how do you decide what you're willing to put your time and sometimes your name on because you're actually on the advisory board for that charity like when you decide this is a charity i'm going to support

Yeah, so like it's nice to do something local so you can feel that effect even if it's something big. Maimonides talked about the highest, the different levels of charity, like giving to someone you know is not as honorable. It's all honorable. It's not as high a level as giving to somebody you don't know. Giving to somebody in your town is not as good as someone in another town because the more distant it is, the least you have to benefit from it.

it. And I've been interested in having a mix a little bit like your 40, 40, 20, some higher risk things, some things that are very specific to something I care about. And then the Gotham really struck a nerve because again, public school kids, um, I've given to other, um, uh, public schools. I'm the one I went to, uh, Stuyvesant or, um, you know, various others, but in New York, there is one charity called Robin hood that raises a nine figure amount basically every year. It's the number one

charity in New York, and it mostly gives to poverty. And they have every year special drives for different topics. But one good example, I think, for you about multiplier effect, sometimes you see a situation, it's a little bit distressed, and you can say, how can I fix that and make two parties happy? So maybe like six, seven years ago, after Hamilton, the musical had been

And the creator of Hamilton went to a Lin-Manuel Miranda went to a New York City public school. So it was already impossible to get tickets. And but a lot of people had seen it. It had been out for like six months, nine months. And Robin Hood thought, let's work with Hamilton. Let's we'll be able to raise tons of money. Let's have a Robin Robin Hood Hamilton night. And they said it like six months later.

And so, and they put tickets, let's say at $3,000 a ticket, and they were going to sell like, whatever it is, a thousand tickets and make an incredible amount of money for however many, the theater holds 800 people, incredible amount of money for the charity. The problem they ran into is by then, their really well-heeled donors had all seen Hamilton. And the cast had just changed. So it was no longer the, you know, what is his name? Lamar Odom and, not Lamar Odom. No, not the basketball player. Lamar, well, anyway, well, yeah.

you know, Otis, anyway, his beautiful voice. So that's definitely close to his name, but not his name. But Lin-Manuel was not performing. And, and so they couldn't sell the tickets. What are they going to do? They have this night coming up. They, they're like still a thousand. I'm sorry. They're only like a third sold. And so I took the number one performing charter school in America called Success Academy that have a few hundred teachers and

And my wife and I had endowed a school in Bensonhurst. I'm from Brooklyn, Bensonhurst, Brooklyn, one in Harlem. And we thought, OK, let's buy the tickets, donate them to the teachers. And you kind of get you fill the house. Right. And we got like these gigantic letters from like, you know, dozens and dozens of teachers. Basically, none of them had seen it because it was super expensive. They're on teacher salary. So it was like a way of doing something nice for

for instead of just giving the money

solving a problem and making two parties happy. And so you can look at that as a creative opportunity or you could look at sometimes where you can create a matching gift and matching. There's a thing about matching where someone says, oh, I give a dollar and I get and I get two for that impact, where sometimes doing things as matches get someone else to do something as matches and then it's three or four dollars. And and so I think there are ways to be creative with charity and feel good about it and and actually create extra value versus just kind of dumping off some money to, you know, to the, you

you know, to your university. Final question. I asked this to celebrities and athletes for years, and I've never asked someone in the hedge fund or investing category. At the end of the day, 50 years, 100 years, 200 years from now, when Boaz Weinstein passes on, do you leave your kids billions of dollars?

Well, I don't have billions of dollars. Well, you will 50, 100 years from now. I think it's fine and great to do that, but only when they reach a certain age and with maybe some direction about how it's going to be spent. There's this reminder I have of the impact for me on that question in charity of something about Warren Buffett that probably people...

younger generation don't even know which was you know greatest investor of all time according to many people he becomes a multi multi billionaire he was around the level of Bill Gates and he was giving no money away and Bill Gates was already giving billions dollars away and they and it kind of became a thing like on 60 minutes he said why are you not giving any money when he said I'm gonna only give my son a hundred million dollars if I recall and all this is gonna go to help

society poverty this and that but since i am able to earn a higher return than everyone else right why don't we make it the biggest sum possible and then it can do the most good and that kind of he kind of got away with that later he then gave dumped off a chunk of it to gates and yeah but but i listened to uh one of my investing heroes a guy named seth clarman speak about this

And he just crushed him. He did a mic drop. Well, Buffett wasn't there, but he talked about this and he did basically a mic drop and it was checkmate. He said, okay, so Warren Buffett's compounding his investments at 10% a year instead of seven. He's better than everyone else. And three compounded over 20 years, a huge chunk difference. And that's his whole argument, right? He's compounding at 10. And at the end, there's gonna be this big pile and then he's gonna do good with it. What makes him think poverty is not compounding at 14?

You know, and you're going to take that out 10 years, poverty compounding and all the pain that gets compounded. And I'm like, boom, that's it. That's it. Slow down. Buffett was wrong. Like, I mean, it's just it's just so clear. And so you should be giving throughout your life. And and so I hope not to be in that spot because I'll have given away a chunk way before near the end. Wow.

Well, thank you for flying to Los Angeles. Not for us, but 10% for us. Hopefully we can have you back out here or we'll bring the RV motor home out to see you in New York. Maybe during the hedge fund charity poker tournament next time I got them all. But as we do this here, as you guys know, the money Monday is the whole point of this and why the podcast is number one for, I think it's 41 weeks in a row now. Thanks to you guys. And we're coming up on our one year anniversary is people need to have these discussions. We all grew up thinking it's rude to talk about money.

And I think, and Tarzan thinks, and maybe Boaz thinks, that it's rude to not have these discussions and understand about credit and finance and what is a FICO score and what is taxes and what do you do with investments and loans and salaries and all the things that we have to talk about because it's real life. There's nothing rude about talking about real life situations. And I think it's really important. I'm glad you guys are sharing it. I think that...

if you can continue to help us it's liking commenting subscribing share with your friends continue to listen to the podcast you can also go to themoneymondays.com we do a weekly coaching call every monday at four o'clock where we deep dive on questions on zoom which we can actually answer questions for you guys uh check out saba capital they're obviously one of the number one i think it's not sound like it's number one depends on the year last year number one closed end fund out of 274. did i remember that right

- Close. - Close to 247, whatever. Really close. It's fascinating. Some of the things might be complicated here for you. If you heard words like derivatives or shorting or things like that, Google those words, understand the terms. Again, whether you're gonna be a stock broker or a trader one day, that part's irrelevant.

It's interesting to hear these things and hear these topics. And I'm really excited to have someone with this career to be here to answer those questions and give you those topics. But just Google those type of terms, understand them, do your research, check out things that you might be interested in investing into. And we will see you guys next Monday on Money Mondays.