Elon Musk Out Of Tesla, I Am Going Into Gold (Uncut) 05-03-2025

Elon Musk Out Of Tesla, I Am Going Into Gold | Ross Gerber

The problem is that Bitcoin has become more of an arbitrator of risk than being a haven for safety. And so when people feel aggressive, they buy Bitcoin and when people get scared, they sell their Bitcoin. Where gold is the opposite.

Gold is the safe haven. And it’s the only place you can hide when things get real bad. And I didn’t sell all my Bitcoin.

I think you said something like you sold his Bitcoin for gold. That’s not what I did. I lowered my holdings in Bitcoin and moved it to gold and we still own Bitcoin in my fund and for clients and we own just more gold than we did.

Hello and welcome to Soar Financially, a channel where we discuss the macro to understand the micro. My name is Kai Hoffman. I’m the Ed.J. R-Mining guy over on X and of course your host of this channel.

And I’m looking forward to welcoming a first time guest to the program. It’s Ross Gerber. He’s the president and CEO of Gerber Kawasaki.

And you might have known him. You might have seen him on mainstream TV before because he’s in the middle of some of one of the biggest story on TV or actually in the financial world right now. And it is whether Tesla will replace Elon Musk and the role of Elon Musk going forward.

We have to talk about that, of course. But of course, I’m going to quiz Ross about what’s the state of the economy. The U.S. just printed a negative GDP number for the first quarter.

Is the U.S. in recession right now? And of course, Ross sold Bitcoin to buy gold. I have to ask him about that. What prompted that move and why gold? We’ll talk about all of that in a few short seconds.

I’ll hit that like and subscribe button. It means a lot to us and we tremendously appreciate it. It’s a free way to support us as well.

So thank you so much for doing that. Now, Ross, it is a great pleasure to have you on SOAR Financially. Thank you so much for joining us.

Thanks for having me. Yeah. Really looking forward to this.

This will be quite engaging, I believe. And let’s dive right in. Lots to talk about, of course.

We’ll start with the state of the economy, Ross. What’s your assessment? How strong is the economy right now? What are we looking at? How is it feeling? You know, it’s really interesting what’s happening right now because I would say after the election in December, January, there was almost like this giddy optimism about Trump being really good for the economy and people were outspending and the economy was really doing well with lower inflation. It was almost like a perfect scenario.

And that’s why the markets were at all time highs with a very high valuation trading at, you know, a market multiple of 22 for the S&P 500, which is quite high, actually. And we also saw rapidly rising earnings with rapidly rising earnings expectations. And that was, let’s say, December, January.

And then we moved into sort of this Trump tariff approach to the economy. And the minute tariffs, you know, started being talked about, thrown around, OK, people were sort of under the assumption that this would be sort of a minor increase in costs that would help, you know, ideally level what we call the playing field. And what happened on Liberation Day, which was really like Obliteration Day, was, you know, Trump came out with some weird chart with all wrong numbers and basically showed complete incompetence in his understanding of trade and tariffs.

And it sent the markets spiraling downward when huge numbers have been batted around for tariffs. And then ultimately, you know, over 100% tariff on Chinese goods, which literally rejiggers the entire economics of so many companies and businesses throughout the United States and the world. And so, you know, I don’t think anybody really can quantify the economic response or damage caused that by these actions.

And so where we are now is in this period of time before the actual pain gets felt. But we know it’s coming. And there’s been a lot of activity around tariffs as companies have tried to get goods in before the tariffs, consumers spending money before the tariffs.

But what, you know, what we’re really concerned about is what it looks like once this kicks in in the next 30 to 60 days. And I already saw it with Microsoft announcing that the price of an Xbox is going to go up by 20%. And, you know, that’s a substantial increase in price for a consumer product.

And so all of a sudden, you start looking at this stuff going, are people just going to pay an extra $100 than what they were paying for a new Xbox? And I think not. I think there’s going to be a rapid decline in sales and economic activity with higher pricing. And yes, I think we’ve begun a recession.

And I think there’ll be some numbers in the next quarter that might sort of disprove that as these imbalances continue to ripple through the economy. But as we get into Q3 and Q4, I would be remiss to see any outcome other than recession and very possibly, you know, a very bad one. And so I’m extremely concerned about the administration and hoping that many of this is reversed as soon as possible.

Yeah, it really depends on who’s calling the hotline 1-800-NO-TARIFFS, I guess, what country is really, you know, picking up the phone here to really get a deal done. Lots of follow up on, of course, here, Ross, when it comes to that, but you haven’t touched on the inflation topic. Maybe we’ll add that as well.

What are your expectations? Powell is on the hot seat now, after you mentioned, or it wasn’t Powell, but one of his Fed presidents there said 4% is very, very likely. Right. What are your thoughts? Well, this is the point is we really just don’t know where inflation goes from here because, you know, we’re a services economy.

So fundamentally, a lot of the goods pricing on inflation won’t hurt on the services side, like getting a massage, per se, won’t cost more money or, you know, your car wash guy. But when they go to buy the goods that back a lot of services, that’s where the costs go up. But when you’re talking about the goods part of the economy, which about 30% of the US economy is buying goods, you know, I don’t see many products are actually made 100% from supply chain to completion in the United States.

And we tried to figure out how many, you know, things were actually made 100% in the United States and we couldn’t really find any, you know. So that means pretty much the price of all goods will go up. And so we’re running at 2 to 3% inflation right now because we had a good economy.

And then you throw these costs on here. So you get the offset of lower economic activity, which then lowers oil prices and energy costs, for example. So you’ve got these different factors messing with the inflation numbers.

But what, you know, really matters is what the consumer does with spending. And a lot of that is more based off confidence than actual reality. And right now, the consumers have like basically stopped spending.

Businesses have gone on hold, leases aren’t getting signed, houses aren’t being bought. People are just sitting here going, how bad is this going to be? And I don’t want to make any big financial decisions until I know. And that’s why we’re going to be in a recession.

Are we going to see that be reflected in the household savings rate at some point? I’m not sure when they come out, that number. I’m just curious because I’m trying to track that, like exactly what you’re saying, get some hard data behind it. So I’m curious where would that show up? I don’t know if we would see that because we’re going to see loss of jobs and loss of income for people, too.

So I don’t think Americans come out of this in a better financial position. They’re going to be in a worse financial position because, you know, by my math, there could be, you know, a million jobs lost just right off the top of the bat. And we went from a full employment situation.

And so really, you can see Trump already starting on Powell to lower rates and Besson, lower rates, lower rates, lower rates, because that’s the only thing that can support asset prices with this set of economics. So what they’re hoping is that the cost of money will come down enough to offset the cost of living. And unfortunately, it doesn’t really work that way because bringing down the cost of money still has to have that investor have the confidence to want to invest in building a new plant or house or building or whatever.

And with higher interest rates on the long end still and a lack of confidence, you know, this is not going to get people to invest. So so they’ve created a set of economic conditions that are all bad, basically, and how that stew works out, nobody really knows yet. And in my experience in 31 years and investing and I’m pretty good at this analysis stuff of like the economy, if it’s this confusing, it’s most likely bad.

You know what I mean? Like like so I keep telling people, tell me the best case. Like how does this work out great for America? You know, and the answer is that everybody signs a deal right away. We get great trade deals with the rest of the world.

We get American goods and services being sold in China and other places in much greater amounts. We’re getting tons of investment in real good jobs here in the United States. Right.

So the best case scenario would be all of these countries coming to terms with the United States very rapidly and only having a minor amount of damage for this process. And I think the likelihood of that is very low. And that’s the problem is when you go into the foreign press and you start reading what they’re saying in foreign countries, very few of them are saying, OK, we’re just going to do what Trump wants us to do.

So I see this as a very painful process that we’re going to go through until we realize it’s not going to work. Yeah, it definitely is a deliberate recession. I think we would call it a hundred percent.

Yeah. Maybe let’s zoom out for one second. Let’s talk about the function or the purpose of tariffs here in general.

Like it’s trying to rebalance the U.S. trade deficit, of course. But is that even the right approach, Ross? Like, are there any other options? Like I know the U.S. is stuck between a rock and a hard place when it comes to debt as well. How can tariffs actually make it fairer out there? Right, right.

So conceptually, if you go back to like 1915, this is the way you balance trade, right, because you just like change the numbers and then people would just build in the United States. But back then you didn’t have unions and work from home and health insurance and minimum wage. So when you go to other countries and you look at the wealth differential between America and Bangladesh or Vietnam or China or even Europe, we are so much wealthier than other countries that it’s almost like insane that we think that there’s something unfair to us, OK? And the statistics are simply GDP per capita, for example.

So our GDP per capita just destroys everybody else. So even poor people in America are rich in other countries. You see what I’m saying? Like if you live in a small little hundred and fifty thousand dollar house in America, you’re doing better than 95 percent of the rest of the world.

So I think people have lost this perception. So if an American, there’s 300 million of us and we spend 50 to 60 thousand dollars a year and you add that all up like and we like foreign goods that are cheap, how could we ever have an equal deficit with other countries? Because A, some of these countries aren’t even close to the size of America. B, the people just don’t make enough money to even buy enough stuff to make this fair.

And C, the biggest issue is that we get very specific things from each country. There’s a reason why we have this deficit, because we buy very specific things from these countries. For example, in Canada, we buy a lot of lumber.

It’s one of the biggest exports from Canada to the United States. It’s lumber and energy. So when you actually think about it, like putting tariffs on Canada is just putting a stupid tax on U.S. construction and transportation.

OK, so the Canadians can sell their wood and oil to somebody else, but we’re needed. So where else are we going to get wood and oil from? Just somebody else, another country. So it’s not necessarily going to come from here because we don’t have the wood.

We just don’t have it. You know, and so global trade serves a purpose. And that’s the problem is you’re just putting a tax on global trade, but you’re not going to change any supply chains, really.

So companies, since the first Trump administration, have been scrambling around rejiggering supply chains. And I go even further and saying during COVID, they also had to rejigger and refix supply chains. And now you’re telling me after all this, I can’t do business with any of these people without higher costs.

And there’s just no way not to like people are not moving their factories from China. You know, like Tesla is not going to shut their Chinese factory. And either is my wife and either, you know, who has a beauty business and either is anybody else, because even at one hundred and twenty five percent tariff, you can’t build or make these things in the United States anywhere close to the cost.

Now, so it’s like you know what it’s like is saying, I want to run a race and I want to win and I’m the fastest and I’m the best runner of all these runners. But it’s unfair. So I’m going to tie ropes around all of our legs.

It’s like, does this help anybody? No, it just doesn’t solve anything. Just makes everybody slower. And that’s what’s going to happen.

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Now, let’s get back into the conversation. Yeah, it might help. I might win a marathon one day, you know, maybe I might have a chance here.

With a weight, you know, pulling you? No, absolutely more for the same garbage. You know, it’s basically what it is. You’re just paying more for the same garbage.

It’s a tax. And what Trump doesn’t want to say, and I don’t mean this politically, but it’s just what they’re doing is he’s working on tax cuts for the rich and they’re going to be paid for by the middle class. And that’s called tariffs.

That’s really what it is. It’s called a consumption based tax. And by moving to a consumption based tax from an income based tax, it helps the rich.

And that’s 100 percent what this is about. How do we not have bigger deficits, which we still have massive deficits? So we actually haven’t solved any problem because the government’s going to borrow 500 billion over the next three months alone. OK, so we still have two trillion a year deficits.

We haven’t cut one cost in the government. So don’t think this Doge thing did anything. It did.

We’re spending more money than ever. And so this is a set of policies that can’t work economically. And if you study econ at all, you know, these lines just don’t cross correctly.

And what you get out of all this is a mess. Now, I think that’s what we’re in right now. But people voted him, voted him in, of course, to shake things up.

Now things are being shaken up, of course. And I think we’ll have to wait and see what happens. Like if really trade deals get negotiated.

The market is quite positive when I look at it like 5600 on the S&P 500 today, roughly, you know, market is there’s some certainty back. Like it feels like a quiet week, actually, in the market. Almost.

Would you agree? Yeah, I would. And I think part of that is because I think market participants know that there are really two choices here. They have to back down, which is what they did, you know, throughout the month, which brought stocks back a little bit was just the idea that he’s not.

I mean, you know, he’s driving off off a cliff, but he does see the cliff that he’s driving over. So he’s tried to mitigate this without hurting his reputation. And he’s trying to get people to negotiate with him.

Although in a method that I would not use, he clearly doesn’t understand many of the cultures he’s dealing with, especially China, because he’s certainly not working on their positive side. You know, but that said, you know, I you know, once again, I remiss to think how this works out well. But when you add all the policies together and you look out a year and you know, you say, OK, maybe the worst is behind us.

You see what I’m saying? So we maybe we’ve seen the worst and it just gets better from here. But the part that the market isn’t factoring in yet is the part it doesn’t know, which is what’s going to happen. And I don’t know any more than you or anybody else what’s going to happen in the future because we just don’t know.

There’s wildly bullish. Things could happen like ending the Ukraine war is wildly bullish. I mean, these wars are just a huge drain on everybody.

Right. And boy, that would be a great news to end the wars in Gaza and Ukraine. I mean, these are positive things.

Trump said that was going to happen right away. It has not happened. But if it can happen, that’s bullish.

And then the Fed is your savior here because the Fed can lower rates three percent and that will support asset prices. So that’s why I caution people about market timing. Or getting too emotional.

You know, we’re still investing in stocks and and we have a lower allocation to U.S. stocks and we’re diversified in other areas now because of the risks being much higher. But I am not a guy who’s going to tell you sell all your stocks or buy all your stocks or whatever, because that’s not the way we manage money. We manage money to your risk tolerance.

So if you’re worried about risk, this is the time to be conservative. Yeah, well, we’ll get to that at the end. I was like asking a summary question.

Like, what how would you invest a million dollars today? Like, we’ll get to that because it summarizes a bit. What we’re going to be talking about. Right.

You know, not my risk profile, but not mine either. But one thing like the uncertainty is highlighted a little bit amongst investors, the valuations. You touched on it earlier in your opening answer.

I think we have to talk about that a little bit. And you talked about Tesla, for example, and many others brutally overvalued based on historic just historic evaluation. Even Tesla’s historic evaluation.

Yeah, exactly. Right. So what do you make of that? Is the market woken up to more of a real is it more of a real stock market now? Meaning is the hype gone a little bit like where we are in that phase? Yeah.

You know, and that’s why I don’t think it was so bad that the market went down, because I’m typically a buyer of stocks in my firm because we have inflows every week. So, you know, clients come in with new cash and we have to put it to work. And and so whether I buy, you know, stocks, bonds, cash, you know, alternative investments, we have to make that choice every day.

So buying stocks like Microsoft yesterday at, let’s say, 30 times earnings is an attractive place to buy Microsoft or NVIDIA at 25 times forward. Earnings is an attractive place to buy these stocks for long term investors. For sure.

So the market getting back to a more reasonable multiple. And I would argue that the market’s still trading at 10 percent above its long term average multiple, which is 18 and a half times earnings. And we’re not really sure what earnings are going to be now.

And so a lot of people are modeling between 250 and $260 a share in earnings. And that takes you to around forty nine hundred on the S&P. So the market could go down another 10 percent just to get back to its historical valuation.

And that’s why I think there’s so much risk in the market. It’s less to do with policy and more to do that. The markets haven’t priced in these changes in growth, recession and earnings yet because there’s still a lot of hope that this will be reversed or this will work out OK.

And so the market has, let’s say, a 10 percent hope premium in it right now. But if things don’t get resolved and the economy does go into a recession over the next six months to nine months, markets can go meaningfully lower. And that’s what we’re saying to investors is, you know, give me this scenario where the market goes up 20 percent and that would mean earnings would have to go up 20 percent.

And just no companies are saying they have any visibility what earnings are going to be this year because of these policies. And so I just don’t see where the upside would come from in the stock market, other than the Fed just lowering rates. Which is not necessarily going to happen with inflation expectations higher.

And that’s right. Now, one could argue that the inflation being caused is from an external source, which is really a tax, which will actually slow the economy so the Fed could lower into this inflation because the inflation isn’t real inflation. It’s actually a tax.

And so real inflation is when you have like too many people chasing too few goods. Like if you remember post covid, you went to a restaurant and you tried to go to the restaurant. They said, we don’t have servers.

We can’t serve you. You know, and then the prices of everything just was going up because they couldn’t find workers. So they had to pay people more.

And everybody got raises. That was twenty one, twenty, twenty one. We’re trying to take some of those back now, you know.

And so in twenty one, the workers had the upper hand and they used that, you know. And so this is all just kind of reversing a lot of gains that people made in the last couple of years. And so, as I said, you know, I think it’s going to be a tougher time as businesses use this opportunity to pare back, pare back benefits, pare back employment, make less investment.

They’ve created an environment that you want to play defense, not offense. And and that makes it hard for the stock market to go higher. Yeah, well, one could argue that, you know, the stock market has been going up despite the real economy already being in recession, more or less, or maybe just, you know, trending negative, depending on who you talk to, the sector you’re in as well.

Why do you see now the stock market move alongside with the economy and not decouple like it has or being decoupled like it has been for the last couple of years? I’d say I wouldn’t. I don’t look at the stock market that way. I look at the stock market as a leading indicator.

And so the stock market is never wrong. OK, so, you know, we can be wrong. I can be wrong.

You know, stock market can make me look real dumb or real smart. And so I think the idea is trying to interpret what the market’s telling you, not trying to tell it what it should do or what it should be doing. So the real economy has been fairly strong for years, you know, since twenty two.

So, you know, we’ve had a nice recovery in the United States. Unfortunately, it included a lot of inflation. So the Fed had to jack rates to a ridiculous level, which I thought would cause a recession.

But the truth of the matter was the economy was so strong that even in the face of much higher rates, people just absorbed it. So it hit, you know, certain sectors tough like real estate has been crappy for a long time, you know, and we don’t see that getting better anytime soon. But, you know, the economy kept going and, you know, there’s so much innovation and technology and there’s so much opportunity to improve operations and profits at companies that we just saw rapidly rising earnings post, you know, COVID.

And and so as we came into twenty five, it was really an opportunity for the Trump administration to double down on the good policies and maybe make some changes with bad policies, because Biden had a lot of bad policies, too. You know, so Trump really like had the golden goose in his hand. He just crushed it, you know.

And and part of that, I think, is just bad strategy, like maybe tariffs should have been down the line, not the first thing he did. And then secondly, I think extremism in markets and so markets like certainty and they don’t like uncertainty. So when you’re extremist like Trump is, you create more uncertainties which create lower valuations and less investment.

Ross, I’ve got a zillion more topics to discuss, and I’m not even sure where to go next, because you’re an expert also, of course, on Tesla and innovation, just, you know, you just mentioned maybe a side track here real quick, a little rabbit hole to jump into. Innovation and growth, I think, is really important to the economy, of course. Yeah.

What what or what’s the real realistic assumption that innovation like AI will deliver growth to the US? Like, what can we make of that? Because if you look at the debt to GDP number, the only way really to get out of the debt trouble is really by outgrowing it. Of course. Do you see there’s even a chance for it? Those are sort of two things here.

When you talk about debt in the United States, it’s not we’re never going to pay off the debt. The idea is not to add to the debt. So, you know, we want to cut our deficits and cutting our deficits involve higher revenues and lower spending from the government.

It’s simple as that. And and our deficit shouldn’t be more than two to three percent of GDP, which would then create an inflation rate of two to three percent because that’s how much more money you’re essentially printing. So a lot of this stuff seems complicated, but it’s not that complicated if you look at it like a family.

Right. And so a family that’s hemorrhaging money and wants to be in a better financial position needs to like stop spending so much money and figure out a way to make more money. That’s the United States government.

No, absolutely. But just just real quick circle back to the original question, debt versus growth or is growth possible with the new technology? Can we really? Oh, I mean, with new technology. Yeah, with the news, like in the advancements.

My point is debt versus GDP. Can the GDP, meaning growth, sort of outpace the debt at some point? Is that what I’m getting at? Well, yeah. And so if GDP grows at two to three percent and our debt stays at lower than two to three percent of, you know, GDP of what we take in, you know, you can create an environment that’s quite virtuous where you have low inflation, you have growth and you’re making tons of profits in that world, which was a world we were kind of getting to before all this stuff, which is why I’m so pissed off, because like we had to kill the inflation that was created by Biden.

And so that happened in, you know, 2024. And that’s why markets were so strong. And so we were really setting up for a strong 25 if Trump did nothing.

You know, if he did nothing, the markets would have been up 10, 15 percent this year just based off earnings with no increase in multiple. You see what I’m saying? And so. So that was like, you know, it’s like you hit your drive and it’s right up the middle and you hit your second shot and it’s four feet from the hole and then you six putt.

You know, it’s like, what? Yeah. Gotcha. Gotcha.

Ross, I didn’t expect to ask you that, but humanoids. I listened to a podcast the other day, which I found hugely interesting. And I know you’re big on Tesla as well.

So I’m curious how much of the humans, too. Yeah. How much of valuation like of Tesla is based on humanoids as well? Like, are we paying attention to that and how interesting? No, I think that’s half the value of Tesla is based off the future, you know, belief system in robotic cars and humanoid robots, you know.

So I think that there’s I think there’s real future for robotics. I don’t want to poo poo it, but I just don’t see them in my house. You know, like I don’t want a HomePod in my house, let alone some robot, you know, and I always go back to Star Wars because I love Star Wars.

And and like C3PO is like super annoying. And it was like, you know, Luke, you’re not going to achieve this. The chances of survival are point one percent.

Luke’s like, shut up, get in the back. We’re going to make it. And then he makes it, you know, and that’s humans, you know.

So where I see these robotics, which is already transforming manufacturing today, just continuing. Like, I don’t I don’t see this as a new trend in the sense of robotics have been I’ve been going to Tesla factories for a while and they’ve had robots, you know, whether they’re humanoid figures or not, you know. And I don’t know if the humanoid figure is the best figure for robots, because I’m kind of a believer that the robots should be built based off what tasks they’re actually doing, not just trying to get a human to do tasks.

But that’s just my opinion, because I have a robot for my cats litter, and it’s really just a thing that spins. But it’s specific for cleaning up cat poop. And it’s a wonderful tool, you know, like, you know, dog owners don’t have this pleasure of having a robot clean up poop.

And that’s why I like cats, because I don’t clean poop. And so, no, I don’t. I’m not walking around after a dog cleaning up.

But it’s just so gross. And like, I don’t get it. And humans do this all day.

They like follow around dogs cleaning up crap. Like, what happened that this switched around? You know, like, that’s sad. Alex, my producer guy here is like probably doing following his dog around cleaning up poop, too.

Oh, you don’t have a dog. That’s right. Smart Alex.

He’s got golf clubs. He knows about fore-putting, but he… Ross, I’m loving the conversation. I need to get you back on to just have an innovation talk, actually, on humanoids.

But I got to jump in because I got like three big topics we still need to touch on. Yeah, so I’m a big believer in this. But I think that investors have to think really long term.

And there won’t be profits involved with this for at least five years. Yeah, no, it makes sense. Ross, quickly, bond market.

What do you make of it? How much is it in the driver’s seat right now? How much is it dictating what’s going on on the policy side here? Well, part of me loves the bond market right now because, you know, I always talk about the importance of cash flow in a portfolio. You know, if you own just a bunch of growth stocks that don’t pay dividends and you don’t have any bonds, you don’t generate any cash from your portfolio. And essentially you’re 100 percent fluctuating based off like valuations.

But when you develop cash flow in a portfolio, it creates a margin of safety because that cash flow comes in every month or every quarter, depending on your portfolio’s assets. And so bonds, whether you use a bond fund or ETF, which pay monthly or individual issue bonds, which pay semi-annually, are a wonderful addition to portfolios. And this idea that it’s somehow hurting your returns is not correct.

In fact, if you’re good at buying bonds, you can earn very good returns in the bond market as well. But you’re also creating a ballast for your portfolio to lower volatility. And so bonds have a place in our portfolio, even for a younger person, what might be more aggressive in the bond side.

And it might be a smaller allocation. But you want to have a diversified portfolio. So the way bonds work is you have government securities and you have corporate securities.

Corporate securities, in my mind, are better than government securities because I don’t trust the government, you know. And so, you know, I can borrow at and have, you know, a 10 year bond at, you know, let’s say 4.15 today, or I can give Apple or Microsoft or any of the other major companies in America the same 10 year bond and get like five or six percent. You see what I’m saying? And so you can get six and a half percent from like JP Morgan preferred stock right now, which in my mind is a pretty safe investment.

OK, it’s, you know, the bank is considered, you know, like systemically important in the United States financial system. So it can’t go bankrupt. But yet they borrow at six and a half percent.

And so you could just take down these preferred stocks and earn good income. A lot of short term corporate bonds are now yielding seven, you know, or higher. And so, you know, you can earn seven percent in a corporate security from a pretty safe corporation on the short term loan.

And then you have high risk loans that we’re looking at that are paying 14 percent right now. And so you get paid this money every month or quarter or whatever. And so if the economy goes into a recession, you know, corporate bonds don’t perform as well as government securities typically.

But if the economy doesn’t go into a recession, you know, you can collect some pretty good income and maybe some capital gains as the economy, you know, sort of maybe skates a light recession and comes out of it. We don’t see a lot of bankruptcies. You know, you know, you can get a very nice yield.

So we’re staying on the conservative side, on the bond side. So governments and investment grade corporates and some risk on the bond side. But it’s a great time to just be collecting income.

No, absolutely. Makes sense. What’s that in your four point two percent right now? And, you know, once again, if we go into a recession, that tenure should rally, you know, and so it might not be on the short term because of the inflation numbers, but in six months, that tenure might be three and a half.

So so that’s the the case that we’re looking at, where the economy goes into a recession, the Fed starts lowering rates at some point in the middle of the year and they get down to three in the long bonds at three and a half. Well, you could make a substantial capital gain owning a 10 year treasury bond in that scenario. So the bonds offset the risk in the stocks, you know, and that’s really the idea of a balanced portfolio.

And what we try to build here at Gerber Kawasaki is like this balance of how do we make more consistent returns, you know, with less volatility, but still make good money. And that’s what we try to do. Absolutely.

You touched on oil earlier. And I want to ask you about U.S. dollar, because I see a similar role for for the U.S. dollar here in terms of the policies out of the White House. Like they want to lower the U.S. dollar versus other currencies, of course, to make it cheaper for the consumer overall.

What is your impression of the role of the U.S. dollar here? Like how should we look at it? Well, we’ve already seen the dollar decline like 10 percent against foreign currencies because of these policies. So you can see what’s happening already is the value of the United States has gone down in in foreign terms. And so as much as that does make our goods cheaper in foreign markets, it also makes everything more expensive.

It’s inflationary for us. OK. And, you know, so you got to say, is this good? Well, if we’re trying to fix the trade deficit, in theory, that’s good.

But it’s not if everybody doesn’t buy our stuff because they’re mad at us. You know, so it doesn’t matter. But what we’re seeing is a bigger issue, which is capital flight out of the United States into foreign markets.

And that’s why the dollar is weakening. And I don’t see that trend reversing itself right now. So until there’s consistent, strong policy in the United States, investors, including myself, are looking all around the world and at alternative assets to invest versus, you know, dollar safe assets.

Absolutely. We got to move through here quickly. That’s why we need to talk gold now.

I know I saw headlines that you’ve been buying gold. You’ve been selling Bitcoin, for example, a safe asset. Like what’s what does gold mean to you and why gold for you in particular? Well, I have a long history with gold, so it’s not like some whim.

I’ve owned gold for 20 years and it’s always been a small part or a small allocation. And I’ve never been in love with gold. I’m not like a gold bug because it has a limit.

It can only go up as much as inflation basically over time. But when the government prints five and 10 percent more money every year, gold seems like a great place to keep your money. And then Bitcoin came around, you know, like 15 years ago.

And it was like the same idea, but it was like a digital idea. And we can’t inflate the Bitcoin. And and I started buying Bitcoin at 400 bucks is now at ninety five thousand.

And the problem is that Bitcoin has become more of an arbitrator of risk than being a haven for safety. And so when people feel aggressive, they buy Bitcoin and when people get scared, they sell their Bitcoin. And so Bitcoin is really more an arbitrator about risk where gold is the opposite.

Gold is the safe haven and it’s the only place you can hide when things get real bad. And so because gold also has similar qualities to Bitcoin, which is there’s only so much gold in the world and there’s only so much mind and a lot of it’s used. There isn’t really an increase in supply of gold on any consistent basis.

And so it creates the same kind of effect of Bitcoin. You just have different people who own it. And the difference being it’s sovereign countries own gold, but they don’t own Bitcoin.

And because of that, you have a stable base of owners which create this supply and demand balance, which favors higher prices over time. If you’re an investor looking for high rates of return, gold is not the investment. But if you’re an investor looking for something extremely safe, gold is a safe haven.

And that’s why we had a lot of exposure to Bitcoin in my ETF, GK and in the firm over the last couple of years. And it’s been incredibly profitable because we play the having. You know, we we know how that works.

If you cut supply in half, the price should double. And it doesn’t happen right away, but it happens like the year after. And I’ve been around long enough.

It’s like if you cut supply in half, price has to go up, you know. And so so Bitcoin has that advantage. And we do recommend it.

And I didn’t sell all my Bitcoin. I think you said something like you sold his Bitcoin for gold. That’s not what I did.

I lowered my holdings in Bitcoin and moved it to gold. And we still own Bitcoin in my fund and for clients. And we we own just more gold than we did.

But it’s really a cash alternative. So when I own cash today, I look at cash is like my money market fund, my Bitcoin and my gold. Because you just don’t want to own only dollars.

That’s just kind of the way I look at it. And they’re liquid assets as well. So you can move in and out as gold and Bitcoin’s real easy to you know, Bitcoin wasn’t so easy in the old days.

But now it’s an ETF. So you can just buy and sell Bitcoin just like anything else. Absolutely.

Ross, very last question. If I came to you with a million dollars today, how would you allocate my money? Well, financial advice or anything? Yeah, I would say is I’d have to figure out what your goal is with the money. You know, so it’s like, do you need the money in a year? Do you want this year? Let’s assume 10 years.

Yeah. So if it’s retirement money and it’s and you’re your age and judging by your lack of gray hair in your beard, you’re not that old. So let’s say you have an even longer time horizon for retirement.

But let’s say your goal is 10 years. Well, we know that AI is amazingly transformative. So we have to have investments in the stock market.

We don’t want to miss on technology, along with some of the other themes we’re invested in, which we think you just don’t want to miss. Right. So I would say if you’re under 40 or 45, our standard allocation is typically 60 40.

So 60 percent stocks, 40 percent bonds, alts and cash. Right. So in this market, because we’re conservative, I’d say maybe you start there.

You know, 60 percent in tech stocks and growth stocks and some dividend stocks and 40 percent in income. But what we would be doing is taking advantage of any declines in the market to reallocate more into stocks as time goes on. OK, and so we’re not market timers, but we’re a big believer in this concept of dollar cost averaging.

And because the markets are so volatile, we would start you out with maybe less stocks than we would end up in, let’s say, a year. But we would take that 40 percent and maybe move 10 to 15 percent of that into the stock market monthly, depending on the fluctuations of the market or whatever. And so your eventual allocation might be closer to 70 30 or 75 25 because you’re a younger person.

But in this market, you want to start more conservative. So that’s probably what I would do. And then, of course, you know, we like to do an investment concept called index plus alpha.

We believe in passive investing, like owning the S&P 500 or the Nasdaq. But then we put, in our case, about 30 stocks that we individually pick. And that’s what my fund GK does, is it adds these more focused investments on things like AI.

So you have a higher weighting in what we consider growth. But then you also have this passive index so that you’re participating in the overall market, which has been a great way to get good returns over the long term. So you’re not you don’t have to make a choice.

We have an active side of your portfolio and we have a passive side of your portfolio. And so that’s really the way we manage money. It’s not all stocks.

It’s not, you know, all funds. It’s a combination of usually ETFs that are broader index within more focused positions around where we see opportunities. Fantastic.

Ross, I have one last question. I couldn’t fit it anywhere else. But should Elon Musk step down from Tesla? Well, I would argue he should go back to working full time at Tesla.

You know, that’s what I’ve been advocating for the whole time. But I can’t tell you what Elon’s thinking every day. But what I know he’s working on is XAI.

And so what I keep trying to explain to people who are big Tesla fans, it’s not what I’m saying or what or what other people are saying or or that Elon this or that. It’s what Elon wants to be doing. Elon controls the board of Tesla.

Nobody’s going to replace him without him being involved with that. OK, we all know this. So if there’s any discussion about Elon being replaced, it’s because of him wanting to be replaced so he can focus on something else.

And he’s been criticized by me and many others for focusing on other things than Tesla. And the results at Tesla have clearly shown the cost of all these other things and his behavior. And so, you know, I think Elon is looking for somebody to replace him at Tesla so he can focus on XAI and we’ll see what happens.

But, you know, obviously, the situation isn’t sustainable at Tesla because the company needs help. Fantastic. Ross, thank you so much for joining us here.

Where can we send our audience? Where can we follow more follow your work? How can we get in touch with you? Well, you know, obviously you can follow us on Twitter at GerberKawasaki.com. You can reach us at, I’m sorry, at GerberKawasaki. And then GerberKawasaki.com is our website. And we do a free initial consultation for individuals.

And it doesn’t matter what your wealth level is or your age. You know, we’re one of the firms that really doesn’t care how much money or how old you are. We want to help you get started.

We have a program for people called Get Invested or Wealth Building. And we have a program for wealth management and high net worth clients. So everybody has a different financial situation.

Reach out. But I would argue in this environment, there couldn’t be a better time to get some financial advice and build a solid financial plan so that you can kind of get through the bumps in the road over this short term period of time. Because I think over the long term, we’re at the beginning of an incredible stage of potential growth for technology.

And investors need to take advantage of that if they want to reach their financial goals. So it’s helpful to have a financial advisor. And that’s what we do at Gerber Kawasaki.

Fantastic. Ross, really, really appreciate your time. Thank you so much for coming on.

It was a great pleasure to chat with you. We we might have to do an innovation podcast at some point, really. Yeah, you know, I love talking about this stuff and we can talk about robo taxes all day and things like that.

Yeah, absolutely. Really enjoyed it. Ross, thank you so much.

Everybody else. Thank you so much for tuning in. Tremendously appreciate your support here on the channel.

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