Should I Invest In Gold and Silver? Will Gold Hit $50,000?



Gold has been money for thousands of years in 1971 the last miniscule connection in the monetary system had with gold was cut off today central banks still purchase gold with some purchasing large amounts on an annual basis many wonder if gold should be bought because they've heard about price predictions of astronomical levels they've heard about that dollar failing and they've heard about safe haven assets so what's the deal with gold you came here for the truth so let me unveil that for you today we're going to look at everything to do with gold and silver as well I'm gonna talk about the technical indicators I'm gonna get into the history I'm gonna talk about the four asset classes I'm gonna touch on things that I haven't done in a while the reason is that I get emails I get comments I get correspondence every single day people are asking me to make a video about gold and silver make a video about precious metals tell me should I buy gold and so on so I did cover this in my books and my points haven't changed that's why I don't do an updated video every so often simply because I haven't changed my opinions about it at all so that's what I didn't get into today I'll make this video and then I can always reference people looking at this video so let's begin by taking a look at this when you search the mainstream media when you talk to investment analysts they're gonna give you the general consensus and that is the asset classes are broken down in this manner stocks as in capital markets for an exchange international markets commodities like oil and corn and different grains consumer markets the fixed income credit in debt markets like bonds and Treasuries that's what you'll see or perhaps something along these lines the for asset classes here we have stocks or equities fixed income or bonds money market or cash equivalents real estate or other tangible assets but all of these of course are referencing paper investments even the real estate is most likely referencing REITs are EITS or real estate investment trusts not the actual physical properties and this is a big mistake instead I like to look at Robert Kiyosaki's definition of the four the classes because that is actually diversified he gets into detail in his books and definitely read them if you are interested I have covered them in my books particularly the money GPS but I will cover it briefly right now so it looks something like this a balanced portfolio you have your business paper assets commodities and real estate and through this you can have a diversified portfolio for investing you wouldn't be buying all of these in one day you don't invest in all four asset classes at the same time you are to accumulate assets over the period of your lifetime and there are times in which certain assets are overvalued certain assets are undervalued and it's in the times when they're undervalued that you begin to accumulate look we only have so much money for our savings and we put it away in two different types of investments many people put it in the bank other people put it in some sort of mutual funds or maybe some stocks but a lot of people don't think of it as a balanced portfolio in this way so that's what I'm talking about briefly here today and you could see that many people are not looking at it on a realistic basis everything is paper and if you're all in paper you are not balanced you do not have diversification diversification is extremely important you have to get into what is real if you think that real estate is too expensive you probably haven't read my second book and you probably are not aware of other things that are in real estate that are not actual homes then you have commodities and yes you can buy oil on your different trading platforms and everything else you can get your paper assets and that's all fine but you need things that are real as well business is the Forgotten asset class imagine you had some sort of business that pays you passively every single month and not just that if you don't work tomorrow if you're not even alive anymore that business will still be putting paychecks into your account every single month and that's the important of these different asset classes they all have strengths they all have weaknesses but when you have them all it really provides you with a bulletproof system okay it's so important so that's the balanced portfolio and I think that it is really overlooked by so many people even those in the financial industry it's a big mistake but I'm glad that an individuals like Robert Kiyosaki who's quite prominent has talked about this before I just want to be clear about a couple things the reason why certain assets are beneficial may not be the same reasons other assets are beneficial each one has their own pros and cons that needs to be understood so you have to look at for example real estate it's generally expensive okay if you're buying a home to rent out that's gonna be expensive however you make money in four different ways with real estate with commodities for example gold is the reason you buy gold necessarily to see appreciation on the asset class I say no that is not the reason then you look at businesses businesses may take a lot of work at least initially to set up depending on the type of business but there are benefits to it there are tax advantages to it there are ways to protect yourself with it you can have liability protection and other things that are not available in other asset classes okay then you have things like paper assets as well but you know the benefits of those so let's move on to this this article essentially is talking about the benefit of gold many people in India purchase gold all of the time for weddings they have different ceremonies and they believe that gold means wealth okay it is synonymous with that and in India purchases a lot of gold every single year all right at the bottom although trading gold for money has become less common gold still holds the same high value in Indian families this is just one culture there are many out there who are always adding to their wealth and they do so by passing down the gold generation to generation does it mean that gold is priced at $1000 today tomorrow it's at 800 that that's a problem no they're not thinking about it they have this idea Gold is valuable so we pass it down to generation to generation so the family maintains wealth they don't care if it's $800 over at $600 if it's $2,000 sure they want the price to go up but they're not gonna sell it they're gonna continue to accumulate it and pass it down so if you get anything from this video that's what I want you to understand it is so important to accumulate it and keep it not to completely put everything you have into one asset and then hope that you're gonna sell it off one day because that may not be possible at the time when you believe it's the peak and when that occurs many people are probably going to be in fear they're going to be scared they're not gonna be able to sell they're not gonna know what to do with it it's so beneficial to have some no matter who you are no matter what place in the world that you live to have it and hold it and hopefully be able to pass that on to the next generation if you wanna sell there might be an opportunity to do so but you wouldn't want to get rid of all your asset classes you want to maintain all of them as long as you possibly can that's the diversification so if you think that you're gonna see the peak of a particular asset whatever that is you're gonna sell it off and you're gonna move everything into another asset well that's not really the best way to do it you accumulate during the times in which they are undervalued and you can then sell some when they are overvalued but you don't want to get rid of your entire position in anything remember each one has benefits now we talked about the price predictions I've heard so many in this example here $50,000 goal what about this one another $50,000 gold prediction and then we have another $50,000 gold prediction well let's look at this they tried to come up with the reason why gold will be priced at a certain level they make the case for $82,000 gold as well as $14,000 gold they also make the case for 30 2015 6 thousand and so on they're basically dividing the current value of all of the supply of money either globally or within the United States with all of the gold and they come up with this price and while that could be possible it's not necessarily going to happen so the price prediction is based on a future event that may or may not occur that is called speculation so in my opinion I don't want to buy an asset for its appreciation as far as I'm concerned it's a bonus if that happens but I'm not looking at that when investing in any asset class I don't look at the future benefit I need to know today does it provide me something today and hopefully on the different types of assets maybe a monthly income if it's for example real estate if it's gold you want protection and you want to be able to have that and maintain it there isn't a reason to want it to go to a particular price if you're not gonna sell it if you're gonna accumulate who cares what a cost that's why people are foolish having their own homes and thinking that it's an investment why in the world is that an investment you don't want your personal residence that continued to go up in price every year why so that the government could put more property taxes on you so that you have to pay more insurance so that everything gets more expensive in your life it's not beneficial to you you don't want that but that's the way it is and there's a reason behind it so while I do love gold I love it as part of a portfolio it's important to hold all of the different asset classes for each of their benefits ok I hope I made myself clear on that the total gold mined ever is valued currently at about 7 trillion dollars central bank gold reserves looks like about 33,000 tons and then you can see the monetary supply and so on they give you all that information here I think it's interesting to show how little gold there actually is it's not that much when you look at it in a big pile which I'll show you in a second it becomes something very miniscule compared to the actual amount of debt to the monetary supply and even to other commodities here you can see the price of gold over the years and I think it's important to address the fact that prior to then instance right here 1971 gold was always at a fixed price okay so they decided what that would be in US dollar terms you could see throughout the 50s it's at around $35 and then they decide that we can no longer keep up this sham and they would let it go so gold became just another commodity it was no longer connected to the monetary system and it rose dramatically you can see how high it went on this chartered showing me let's say around six hundred and seventy seven but I believe it was around eight hundred dollars at its absolute peak and then it fell for the next twenty years basically it fell got down to I think it dropped to about two hundred and fifty dollars an ounce at its bottom and ever since then it rocketed higher it peaked out I think the top was approximately nineteen hundred per ounce then it fell and today it's it's around let's say twelve hundred maybe thirteen hundred and it goes down to eleven hundred it's been trading in this range for years the price though as far as I'm concerned is not very important because when you do this you're speculating on a future price that you want to sell it at and right now it is the only asset class that I'm aware of that did not see the benefit of quantitative easing basically everything rose it's crazy to see the everything bubble except precious metals so obviously we know that they are manipulated that is confirmed you could go to gotta gata2 get the details on that but it's the question will it rise in the future will it be fifty thousand dollars an ounce and that's information I can't answer because I'm not an Oracle I'm not a soothsayer I'm not one to tell you what something is gonna be but if my opinion I think that it's wise to hold some precious metals how much at depends what is your portfolio look like how much money do you have to invest what are you doing with your money currently do you have some savings that you need to unload into something real what is your personal situation and that's really what it comes down to I can't tell you what to invest in I can give you financial advice but I certainly can say that it has been known to be beneficial to hold on to gold and silver gold is incredibly rare all the gold mined since the dawn of civilization would fit into a 20 meter by 20 meter by 20 meter cube you're seeing everything ever mined in a hundred and seventy one thousand ton brick and Wow that's a lot of gold in a way if you see the size comparison here it's really not that much so essentially this is just telling us what we are encountering we are seeing an asset that has limited availability it is used for different applications and the price hasn't risen in years it's very unique in that way the gold tree where gold comes from and where it goes so you'll see at the bottom source of gold and at the top is the uses of gold so the sources whether we're looking at areas in Asia like China for example or South America chale maybe were seeing the gold come out of Russia and so on and then the applications at the top whether we have the gold mining companies a physical gold bullion the exchange-traded funds investment funds all of these different mining ETFs you have all of the different coins and so much more so that's just an idea showing you where the gold goes where it's coming from and of course this is a different situation with silver silver is often used as an industrial metal it's very important and the supply cannot be maintained because so much of it is used today now 20 years from now who knows what they'll use maybe it'll be a completely different metal they won't use silver but for the time being silver seems to be very limited and very important that doesn't mean that the price will go up that just means right now today that is the fact I can't predict what the price will be at I just think that it's interesting it didn't see the benefits of quantitative easing that's all and very quickly to finish off jewelry is so important for many countries who give it as gifts consistently traditionally in the East this happens you're gonna give gold coins you're gonna give jewelry and that happens to be a store of wealth in a way but also as part of the cultural aspects all right this just shows you different percentages and the amounts and so I'd like to finish off the video very quickly just wanted to let you know that if you wanted more videos like this if you wanted some details that I don't really cover on my daily news type videos you gotta check out my main channel you scroll down to the bottom and you will see the how-to and Solutions playlist and you will also see the eazy-e course so check these two out I think they're really important really informative and you should definitely be looking into what I have in here because these are sort of the Evergreen videos they're always good to see always informative and so definitely check them out that's all for this video if you found that informative please give me a thumbs up when you give me a thumbs up you're supporting this channel so I do appreciate that very much and last but not least if you want the financial education you were not taught in school these two books have everything you need from the foundation the asset classes making money I talked about gold and talk about all the asset classes in these books so check them out at the link in the description if you want the audio book that's available at the money GPS com

Warren Buffett On The Economy, The Annual Shareholder Meeting, And Apple | CNBC



Morin it's great to see you here yeah you are getting ready for the invasion the invasion yeah we sent out a record number of tickets by just a couple percent but but our previous record was in the 50th anniversary of taking over Berkshire was three years ago and then it dropped after that and Yahoo started broadcasting this year we set a records that meet the 50th anniversary so we had we think we had about 42,000 people at that previous record and if the attendance is proportional to tickets will be up slightly everything I mean it's I just left the dinner that with all the managers and I loved seeing them and we talked a lot like I like I like the shareholders and it's nothing but fun we're here really to respond to them Charlie and I are you know we want to talk about what's on their mind I do I do have a little little change in the format on Saturday where I think I'm going to give them a little lesson perhaps at the start might be useful to them but we'll see what happens what you just came from a dinner with managers where you and Charlie were interviewed in front of all of them wins last time you saw charlie last time I saw Charlie was that the off-site directors meeting in October last fall I I don't get the Los Angeles much Charlie doesn't come here anymore I mean it was a time actually when his mother was alive he's spent more time here and and he but I used to spend a good bit more time in California at Southern California so we may only see each other perhaps twice a year maybe three times a year you know Jerell know this I saw him the night because we've met and I may not see him again till we walk down our separate aisles to go up on the stage now we we are unrehearsed hundreds [Laughter] always such a good gauge of what's happening in the economy not only because of the businesses you own like the utility company and because of Burlington Northern but also because of all the holdings you haven't so many other companies what would you say the economy looks like to you right now well right now I mean I'm not know what the future holds but business is pretty strong generally and that's true I think worldwide it's you look at our international metalworking companies based in Israel they sell little tools that go into big tools big machine tools and they sell them worldwide and nobody is buying them to use two years from now or one year from now they're buying them because they're they're using those machines to do punch holes or do whatever they may be doing it's very much a current consumption type operation and that is up significantly worldwide I mean after another it has been proved four or five months and if you look at electric component electronic components we have a subsidiary that's a huge distributor of those and again worldwide not just in the United States but Asia and in Europe as well that it's it's we can't fill the orders fast enough so businesses certainly it's it's better it's it's it's it's better than and I don't know what that means for six months from now but but car loadings are up in the rail industry and so on so first quarter GDP was 2.3 percent that was higher than expected but we also had a lot of economists like ian Shepherdson saying that you should add 0.9 percent of that because the first quarter has had this weird thing going on for years now it's as if you were trying to put a finger on it as 2.3 percent sound right for the US GDP should it be 3 percent what does it feel well it all existed the last seven or eight years of average to two percent roughly it's stronger than that right now there but but that's no way to calibrate it through and you know they have their own problem with seasonal adjustments as you point out in the first quarter they've got the wrong judgment but they've had years to work on it they say ok get it solved I would say that the Berkshire Hathaway index of activity business activity it's been improving year after year after the financial panic we just heard from some companies in the last couple of weeks that you're a big shareholder in that Berkshire Hathaway is a big shareholder in Apple came out with earnings this week that were better than expected iPhone sales were still a little weak the street loved what they saw what did you think I like what I saw yeah their surprises I mean it isn't it unbelievable company I mean if you look at Apple I think it earns almost twice as much as the second most profitable company yeah it states that it's a wide wide gap I mean it's it's an amazing business I mean here's a company that's you know whatever the earnings are 60 billion or whatever and you can put all their products on a dining room table I mean there were a lot of doubters on Wall Street before those numbers came out this week were you in the camp that was a little worried about what was happening well I would we don't know what for the next quarter I mean it is incredible to me I'll you be the investor conference calls after reports or you've read all the analyst reports and they definitely talk about what it's going to next year nobody buys a farm based on what they think it's gonna rain next year or not they buy it because they think it's a good investment over 10 or 20 years so the the relevant question when you're looking at buying part of the business what you're doing when you buy a stock is where's it gonna be in 10 or 20 years it may be that you don't know in which case you don't have to do anything but the idea of spending loads of time trying to guess how many I bought whatever maybe are gonna be sold and I given three month period or something it just to be it totally misses the point I mean it it was like worrying about the number of blackberries you know ten years ago what really caught was going to happen over the next ten years so the shares sold down before that heading into it does do you like the stock could be bought more of it do you think that that's another place you want to be well I don't talk about what we're gonna do but but our 10-q is coming out on Saturday mornings so they can actually figure it out I'm looking at the footnotes in there that we bought quite a bit more Apple and in the first quarter at the first calendar quarter of this year it's their second quarter this Polly more than you had reported it in February when we got the SEC filings I think it was a hundred and sixty three and a half but we had a year well that was probably that was I think that was as December 31st and I think it counts are patching the hole they just do maybe but you're right we had 100 odd million shares and wait so you bought a lot more well it'll come out Saturday morning and so it'll be reported and we're we're not gonna be active now so we you'll see it went up about 75 million jerk Wow okay you had gotten rid of most of your IBM shares as of the year end right a little bit do you still have those no you have zero IBM shares right now I I think we have zero Wow Warren let's talk a little bit about move we didn't we didn't we'd sold almost all of them we have not had massive sales I was finishing up you've got that figured out things that you've done can I ask about Wells Fargo is that a situation where you've sold any shares well we we are there's several companies like this were we're right at the 10% level so they repurchase shares we try to anticipate that just by a tenth of a percent or a two tenths of a percent because we do not want to go over 10 percent particularly yeah that's that's certainly the most dramatic example we also sold a chunk of Phillips to bring us below 10 and we announced that at the time so something like Wells we want to stay just below 10 so that involves selling minor amounts of stock but it's only the be below 10% that's all anything of a discretionary nature about us because I was surprised to see the Berkshire voted down the idea of the four directors of USG and to see the largest shareholder not going along with these four directors who were standing for re-election what happened well you're correct we owned about 30% or something like that and and we had owned it for 18 years well we had known all of that but we don't a good good sized piece and we had twice I've come to the aid of the company in financing when they needed to come out of bankruptcy in 2006 and then when that money that they raised then got hit by the housing total free fall 2008 they needed more money and we came up with it and so we've been in a very very long time and it's true that I can't think of the time there may have been one of the sketch my mind that we voted against directors but we did not think they'd responded properly and in terms of not sitting down and and least talking to go now who also was held their stock for 18 years and owns ten or so percent of the company and and we did not think that the directors were were essentially doing their jobs that we we said we intended the boat against we don't have any rival directory running against or anything sorry but we did go against them the company has since at USG has said that it is going to sit down and talk to them it thinks that the 42 our dollars that that Knopf is offering is not a fair bid see what happens that I was very pleased that that the directors decided to do that so I think they responded properly and have you talked to the USG CEO she she called me two days ago I can't remember exactly what but what I'm not sure what you day it was but but we had a very cordial conference it was after they announced they were going to sit down and she did call me well it's it's it's a little less but I would estimate that's a little over a hundred no we bought more stocks by a considerable margin than we sold in the first quarter which is usually truly not done necessarily by a considerable margin but we are usually a buyer of stocks and and in the first quarter the Apple along them you can figure it out that you know they were talking twelve or thirteen billion dollars or some number like that so it it brought down our cash position moderately it still leaves you with a pretty big I the answers we're not doing anything on that but I have to say I actually admire John Flannery and what he's doing he's got a very tough job but he's doing very logically and I'm very familiar with he and we've done we do a lot of business with him both on the buying and the selling time so so and it's a Turkic American company from way way way back you know in the original dow jones average so i I want the company to do well well I really appreciate your time and I don't want to take any more hey there thanks for checking out CNBC on YouTube be sure to subscribe to stay up-to-date on all of the day's biggest stories you can also click on any of the videos around me to watch the latest from CNBC thanks for watching

Billionaire Henry Kravis: The Future of Private Equity Investing



for those who don't know Henri is people talk about pioneers in different industries a lot it's the word that gets thrown around Henri definitely deserves it he co-founded KKR Kohlberg Kravis Robertson company back in 1976 still co-ceo with his cousin George Roberts and Henry let's get to the really important stuff first which is two weeks ago Donald Trump said you would make a really good Treasury secretary for him he all said Carl Icahn and Jack Welch Icahn says it's too early in the morning well string comment you want the job if there's a president Trump yeah that was scary when he said that so is that a no or that and I'll think about it in the administration will leave it that was scary fair enough fair enough Harry what I want to start you know a lot of this conference is going to talk about disruption technological disruption in established industries you know you think Airbnb in hotels or ubers and taxis industries that weren't considered tech industries originally KKR is history even though you also invest in tech there's a lot of these different industries you invest in energy you invest in retail industrial along the lines when you're looking at a prospective deal how do you kind of how do you try to look at the disruption that's coming from down below to make sure that you're saying not buying a taxi company four years ago that's going to get absolutely destroyed right well one of the things that I always like to ask the team to put in their presentation to the to our investment committee is what can go wrong what disrupter is out there they can make a make this company either obsolete or change its its operations dramatically so where we go about it is we have a number of senior advisors first of all so we've got people like Shantanu Narayen from Adobe we've got the CEO of Suzanne we have the CEO of Shutterfly we have others that are advisors to KKR number one number two we got an office and a very important office we're George Roberts and others are in our whole tech group is out Menlo Park so we're there I spend a fair amount of time out there personally because I think it's really important and so you can't go into any of these businesses any investment anywhere in the world today and assume that things are going to be the same at the Business Council a few months ago John Chambers and I were on a panel together and he said to the audience which are all these large companies CEOs he said that I'm willing to make a bet that in 10 years 40% of your companies won't be here and he went on to say that he said they no longer put together five-year plans because they're obsolete after a year or two so they moved now to two one in two year plans well we're the same way we look at a company and we say more importantly what could this company become if we were able to add technology if we were able to partner with another with another company so for example one of the things that that I like to encourage you know young companies to do is think about companies like KKR with a vast portfolio of companies that we have we've got over a hundred companies in a lot of different industries we have over two hundred and twenty billion in revenue and if you think about can you start to scale your business much faster by tying in with somebody like akki that has this let's call it for now the offline kind of business the answer is yes so an example of that would be first data a company called clover we started in the valley it's a an Android point-of-sale tablet company terrific software and we said why don't you come at the part of the first ad of which we own and that made a lot of sense of them because here overnight they had six million customers where they could start to roll this out so they just rolled out of many right many mobile ones if they started with a larger one and now they have gone to the they went to mid-size and now they've gone to a very small one as well you brought up first data let me ask the first data and I think I'm correct in saying this is the largest single equity investment KKR dot right now in terms of amount of cash que quieras put in you invested originally and then kind of double down last summer I'm wondering you know when we spoke last summer about it when you made the investment I asked about a possible IPO bringing it back to public markets you said not yet we're worrying about other things it's been a year you've gotten some other things done is that something is that on the horizon well all I'll say is stay tuned you know these things old try stay tuned you know next year should I stay tuned in two years I have there's a lot on the TV and I don't know what to just stay tuned and it you know no you might might be surprised what you're going to learn fair enough fair enough so the company's doing fine uh KKR has some you know like first day it has some big tech companies that you guys have done kind of as traditional KKR deal you know leveraged buyouts traditional private equity deals you also lately have done a bunch of growth equity investing in the tech space I'm looking at my list your Sonos Fotolia FanDuel summin summin biotech as well so I guess my first question is why are you dipping down and are you concerned at all you guys didn't but back in 99 2000 some big buyout firms started doing quasi venture deals and it didn't go well for them well let's let's first start with the fact that private equity today has changed dramatically most people think of private equity as you go in and you buy a hundred percent of the company and you lever it up and hopefully in five years you pay it off enough debt the company's growing somewhat and you make some money today private equity is a totally different business today private equity firms like us will invest up and down the capital structure we're not focused just on buying companies but we want to be a solutions provider and we are solutions to provider to lots of different kinds of companies so that's on on one hand on the other hand the let's look back to the period 1999-2000 that you mentioned which is a time when there was a tech bubble of is the Internet bubble that time and let me many of you were around then many of you who were probably involved with it or were investing but my own experience was I come out to the valley I'd spend time talking to these people and I said told me your business plan and their business plan was very interesting their business plan was to go public and I said that's not a business plan that's that is a means to raise some capital give me your business plan well mr. Krebs you don't you don't get it you don't understand so it's all about eyeballs and I said well I don't get it because I don't understand how you turn eyeballs into cash flow and and so forth that's what blew up fast forward 15 years we have a totally different environment today number one technology has changed for the better tremendously in the last 15 years number two the teams that are running these businesses and by the way most of these businesses today that are that are young company the real companies they're real not cash flow positive usually not not cash flow positive them are not cashflow positive real business with real business plans with a mission statement they're hiring terrific people and they're able to build a good business now if we're talking about valuations that's a different subject because I wonder does it does it consider you think and it's hard to say because I know that your deals you think they're good deals cuz they're yours and none of them have blown up yet but do you think on the whole that these deals are going for too high too high price yours TP geez everybody else is in that kind of growth equity special first of all we're were a minor player in this space TVG and other private equity firms are really minor players in the scheme of things we typically will invest in some of these technology or technology related companies in the CD round they're more growth equity that they're starting to show sales they're ramping up and what I like to say to people you know you can raise money in a way there's money everywhere today whether it's from venture capital firms from hedge funds from private equity firms all the way up the fidelities and zero price today and that is in part what has driven these valuations you've gotten you know nobody would have thought three years ago that the tea row prices and the Wellington's and fidelities of the world would be playing in that space but they are because they got plenty of capital interest rates or you know are very very low and as a result they are perpetuating this despair you Asian this question I like to ask though and this is without doing any due diligence on them but I think there's a hundred or so the so-called unicorn companies these billion dollar plus privately held tech companies if you were to put them in a bucket at the current at their current prices or where they were last round would you personally invest in it as a weird index would you buy it well you know what's what's really hard I can't tell you and I don't think anybody can tell you who the winners and the losers will be in each industry what what strikes me though as I look at these and I say well what you're pricing these on you're pricing them in large part on that one or two or three of these are going to be winners I don't buy the fact that they're necessarily will be three winners at the prices that your value in the companies there'll be one winner who knows what it is so let's assume you've got something at a billion dollars today no cash flow from it really a concept it's a great concept it can scale but you've got three of these people there's probably more downside then there is upside there but one of them will probably be a winner because the industries in which most of them operate in are scalable industries are you I'm sure they've been talked about KKR raising a specific tech kind of growth equity fund you guys are currently making most of these deals off your balance sheet is that going to happen is that fun coming we have nothing on the on the horizon right now we've got up a fairly large balance sheet which is different than most private equity firms and we have a different model our model and the way we went public is I think you know Dan was to to take KKR the partnership and merge that into a company that was already public traded on the amsterdam exchange which we had started which was an investor like a limited partner in all of the investments that we made at KKR so we knew what these companies were that were they've invested in we also managed that money at Pula capital and we had gone public at $25 a share with KKR private equity investors and it was trading down to $2 a share it was during the crisis we said let's take a cake AR and merge that into K PE and what we'll have as a balance sheet and that balance sheet what that gave us was a five billion dollar in round number balance sheet in our own companies so what we've been able to do with that balance sheet is buy some other companies by having the stock it's a way for us to put money in and raise additional capital to to put our own seed capital in and the big difference is if you have a fund you typically are going to get 20% of the profits whereas it's our own money it's our balance sheet of the shareholders money I should say we are 100% okay after a private equity nerdery question here which is if you've got your tech team your folks in Menlo Park spending some of their time sourcing deals that are going to be invested off of ka arth balance sheet as opposed to the fund the main fund if I'm a limited partner in the fund am i annoyed that I'm paying men kind of helping to pay their salaries to make investments that I'm never going to get a piece of no because it's not that's not what our funds are set up for if our phones were set up if it's large enough it goes into a fund the fund comes first way before the balance sheet any Co investments where they're actually paying is the they come ahead of the balance battle she's the last place that it will go you talked about your IPO you guys went public at this point about five years ago at this point about a half years ago five and a half there's a lot of companies today including some folks probably here in this room who have very successful private companies that don't want to take in public there well I think the word would be scared of doing it and becoming a public company CEO you've obviously had been in the markets for a while you had been on the boards lots of public companies brought companies public take in the private but I'm curious did you learn anything did anything surprise you when you went from running success a privately held company – becoming a public seat publicly traded CEO you know most people say why did you go public well we went public because it gave us permanent capital it gave us a large pool of capital that we wouldn't have otherwise and that's been really critical because it's enabled us to start a number of new business very hard to go out and raise a first-time fund I don't care who you are or what your record might be if it's the first time fun it's difficult so this way we've been able to use the balance sheet and the money we've got as a result of going public and seeding our real estate business seeding our oil and gas business using it for our growth equity that we've just been talking about so it's given us a real advantage we feel to continue to grow the business I'm not unhappy one bit that we went public there am i and I say to people look if you think that we're going to be able to tell you that take care what our earnings will be next quarter it's impossible for us because we have to mark to market every quarter we're buying different things we're selling different things we're going into different businesses etc very hard to do so we say you want to own our stock it's a pretty good investment the way to put participate in all phases of private equity and it's a way for you also to look at private equity in a long-term basis most people forget then that the private equity is really a long-term game this is not a hedge fund we're not in the hedge fund business we're a lot of your rivals are in the hedge fund until we don't have a hedge fund to cater we have a fund of funds which invest in different hedge funds the KKR itself is not in the hedge fund business so our average holding period and it would be true whether it's in growth capital whether it's in private equity is seven and a half years so we just look at things totally differently than than most companies do do you think are the fear and as you said you have a different kind of company obviously had a much longer track record you know it dinner around what 30 years before you guys went public or over that yep 30 years do you think that the concerns of privately held tech CEOs about going public are those legitimate concerns who do you think those are jitters folks should just get over look I'm not going to tell any company they should go public if they have a reason to go public and they need to raise capital and it's a way for them to raise capital or they want the stock to use to be able to buy other companies if you've got a good company you can continue in the environment we're in you can raise a lot of money as all of you know so you don't have to go public I would tell most companies wait until you have to go public because then you don't have the scrutiny of the quarter two quarter earnings I think the worst thing to happen to corporate America are quarterly earnings because you end up making a lot of very short-term decisions when in reality you should be making long-term decisions I'm curious how much of a technologist do you think you are and Wayne I don't I don't mean somebody who's sitting there coding all day but in other words you know I'm trying to get a sense for you I've been told by folks who work for you that you're very even on kind of growth equity investment very hands-on do you I mean I guess the last of this way do you ever play on Twitter do you ever go on Facebook when you something like FanDuel you guys invested in do you have a FanDuel account have you been betting on games I don't have any of those but and I love all that I love the gadgets tonight and I buy them all and use them and do I have a Facebook and I do I'm not on it do I have a Twitter account yes I'm not on it but I have like a lot of thought I said I have it and and I really do care and you know I don't think the CEO of any company if they're going to be putting money to work you know can't be putting a lot of money work without least knowing the fundamentals of it I'm not a technologist by any stretch you're invested you're you invested iconic which is kind of a quasi family office they make a lot of tech investments in the valley gives tell me that relationship why are you and why do you personally have a relationship there why is that important for you well number one it gives me a very good overview of what's happening the valley there and that's really important not only in the valley in other parts of the states and diverse makaan he's a friend of mine who runs it he helps me in the number way she helps KKR in a number of ways and vice-versa we help him so I spend time with their people for example talking about culture and how important culture is at KKR and how we set our culture to a you know on day one thirty nine years ago and encouraging him to think about it they have an unbelievable Network which we can then plug into I'm on an advisory board that has which doesn't quite frankly only they meet once a year so I missed the last meeting so that's how involved that I've sort of been but I see I see divest a lot I talk to him a lot I talk to his people a lot and it's really a way it's a window on technology for us do you talked about culture when you're looking at a company and you're doing due diligence whether it's a tech company or anything else you can look at the financials and you can look at the projections you can look at the product and you can talk to customers and you can do all that you just mentioned culture so this is a kind of vague question but so take it where you will how do you get a sense of if the culture at that company is one that is going to help the company continued to grow in a positive way or if there's some serious trouble spots that you can't see when you're just looking to the books well it's going to be true at any company it doesn't matter whether it's a long-established company you know I've been doing this since 1969 first through Bear Stearns or what we started a private equity industry or what even an industry was five private actor investing became an industry and what what I've continued to do so you you can read people you get you get to read them you find out for example if you take a walk through a plant with the CEO of the company you find out whether there's a labor issue in the company just by the mere fact that there's a no one's talking to the CEO I can go through plants and everybody saying hi how are you and he's telling no one with knowing that people by name it makes a huge difference I tell her people get out of the office get out from behind the computer because the computer is not going to tell you everything you need to know the only way you're going to find out what you need to know is go out there and really walk the aisles of the so our culture is one of inclusiveness very important and the thing that when we started KKR George Roberts my cousin and my partner in this effort and Jerry Kohlberg and I sat down and said we do not want to have a culture like we had at Bear Sterns where we came from and that culture at Bear Sterns was very much a neat which you kill people were only paid on what they produced period and so literally I would lock it I was a partner at the firm I literally would lock my door at night and lock my desk and we said look what that didn't that's not us that's not what we want so we set up a culture on day one and I would tell any young company whatever it is define your culture as soon as you possibly can because otherwise your operations will define you and that will define your culture grab hold of it take what you make the culture whatever it is in our case it's very much one of inclusion everyone at the firm is paid on every single transaction that we do whether you worked on it or you didn't work on it whether you're operating out of Australia you're operating a mental package when you say that how you say investment staff or all the way down the board to every day it's it's the investment staff particularly but every single person they take care when we went public George and I because the two of us owned 100% of the firm we wanted to make sure that every single person at KKR was an owner anyone surprised you guys out laughs the best thing there was that you outlasted their sense no I mean I didn't really think about it too much I just knew what we wanted to do what was right for us it's a it's a sad day for Bear Stearns you know they should never have gotten themselves into that position but two different cultures a different kind of firm that was a trading firm our view was totally totally different in our view about culture is here's what we do and I and I would say this for any young company to think about one of the most important things we do is how do we evaluate people twice a year we evaluate them at midterm and we evaluate them at the end of the end of the year and we evaluate them in three buckets one is management and leadership two is commercials and three is culture and values and we've had people at the firm that have been great commercial success for us and yet they never became a partner because they did not fit into the firm now so we do a 360 review not we the written ones are for the birds quite honestly everybody loves everybody in those things so we do the written that we do the 360 reviews in person for the top 85 200 people and it's amazing what you'll find when you start talking to somebody and and doing the review of those people and it shouldn't be the person that is that you're the boss you know that works for you somebody else in the firm will do the review so we evaluate people in those three buckets that I just talked about and and then what we do is we get together as the management committee we go through the report of the person that did the report plus the boss and then we vote and we vote by by compared closed you know those and held things and and we rate people and that's how people are evaluated at the firm and I I can't urge you enough to think about something like this it works it helps you with your culture it helps you evaluate your people because as fast as the technology firms are growing you're going to be making mistakes so as you're hiring people we've got time for a couple questions and while if you have one raise your hand a person with a michael come but Henry I'll ask it quick yes no two years ago at this conference the Dell buyout basically began and then last year this conference is essentially closed we haven't seen a ten billion dollar plus tech buyout since just yes-no in the next 12 months will we I think you might and the only reason they say you might is there certainly opportunities out there there's plenty of capital what has changed since the Dell deal was done is that the regulators have clamped down on the banks and basically said we don't want you lending more than six times debt to Eva da and that and that really does start to to crimp what the banks will do so that's the that will be the limiting factor how much equity is there out there fair enough do we have any questions do we not have any question if not I've got more suddenly I'm never mind oh yeah we did right over there yep as you were saying mr. Kravitz you've been around for a very long time you pay scrupulous attention to the fundamentals but you've moved into a tech market there's a lot of volatility you've had companies go from five-year plans to one-year plans over the past 25 years what's the one fundamental insight you've had to abandon when you began your career that makes you successful today what have you had to give up believing to be more successful today when you have invested I tell you the one thing that we made mistakes on for a long time is we waited too long to change the CEO out when you know earlier days for take care we always believed that you could change a CEO that a CEO would become materially better than what you saw I can say almost categorically that what you see is what you get if you've got reasonable judgment you're asking the right questions very hard to change the CEO materially you can help them around the edges however what we found when you do change a CEO a lot of the people below them just blossom and they're fantastic and and yet they were they were smothered because you had the wrong CEO and they never blossom or though or you lose them they eventually move on they want to go somewhere else so I'd say the one thing that I learned mostly is move much more quickly if you you know in your gut and after doing some real thought and research on the on the person running the business you don't think that person is the right person move quickly and make a change i Henry I really want to thank you all for doing this today appreciate it thanks a lot very much like thank you

LSBF ACCA P2: Corporate Reporting, Key Facts on SMEs



hello folks welcome to a little mini presentation on SMEs small and medium entities the international financial reporting standard for small and medium entities now this little presentation is within the remit of p2p to is corporate reporting and it's the second of the professional papers at the ACCA and has the examiner and Graham halt the ACCA do a little bit of outreach in the context of the examiners and one of the feedbacks that the practitioners gave to the ACCA in the context of p2 corporate reporting was they advised that they wanted Graham to examine SMEs more now he hasn't done much examination of SMEs over the years he's in frequently referred to it so I guess he's going to refer to it more and more and more as the months go by as the sittings go by should I say so I'm going to give you a little mini presentation on SMEs but of course they're going to refer you to an article by Graham halt this time I'm going to refer you to an article by Graham Holt but first of all I just want to give you a bit of flavor for SME accounting I don't want to give you too much because it's just a mini presentation and I don't want to overwhelm you but and we're doing we're going to do a little bit of economics first are there is a widely held economic philosophy that it's good for the economy as a whole if we reduce the burden of bureaucracy on small and medium entities might sound slightly perverse but the idea goes something like this not only is it good for the entrepreneurs if the entrepreneur get rich but it's also good for everybody I'll say that again not only is it good for the entrepreneurs if entrepreneurs get rich it's good for everybody if entrepreneurs get rich why is that well the people that believe in this philosophy which frankly seems to be everybody at the moment and argued that the SMEs the small and medium entities with their entrepreneurial ideas like this little entity London School of Business and Finance these entrepreneurial businesses are the drivers of the economy seems a bit extreme to me that I mean Tesco's and Microsoft also drive the economy but the people who are into this philosophy they argue that the SMEs provide a disproportionate Drive to the economy so the more that we can encourage the SMEs the better for the SMEs but the better for everybody because the economy you know keeps keeps moving smoothly along hopefully it doesn't over boil anyway that's the philosophy so how can we encourage SMEs to continue to perform what we can do is reduce the burden of bureaucracy and one of the things that we can do to reduce the burden of bureaucracy is we can make tax forms simpler we can make tax legislation simpler we can allow audit exemption and we can make accounting for small and medium entities simpler and that's the idea of the IFRS for SMEs it creates an idea called big gap little gap big gap little gap it's a nickname right gap generally acceptable accounting principles and big gap is you know the full life RS a little gap is the IFRS for SMEs now the IFRS for SMEs is a separate IFRS it's actually very very similar to big so little gap and big gap are not that dissimilar but what the IFRS for SMEs does is it simplifies this and it simplifies that and it simplifies the other now when the examiner comes to examine an SME accounting he will be looking for some of the detail now to get the detail you need to look at the examiners article it's a pretty good article actually and it's in the ACCA global website you go to the p2 section you click into technical articles and you'll see Graham Holt's article on SMEs now that article on SMEs has got a lots of detail on in what way SME accounting is smaller than full life are asses but it's also got the most important thing of all really you know the most important thing of all about SME accounting is to understand the economic driver the examiner is not only going to examine the detail he's going to ask you why do you need a knife RS for SMEs and the answer is to reduce the burden of bureaucracy on entrepreneurs because entrepreneurial businesses are the drivers of the economy so this little background stuff that I'm giving you I'm not just giving you for background and giving you because I'm expecting it in the exam okay so the most important thing about SME accounting is the background the reason for SME accounting but also important is the content of the IFRS for SMEs Graham Graham Holt has told you what he wants to you to know in his article on SME accounting and it's on the p2 website on ACCA global comm within the technical articles section good luck with that and very good luck with your p2 studies and I think I'll give you a bit of very specific advice on the day when you're doing the exam be aggressive keep going it's such an important part of p2 be aggressive good luck guys

The Monkey On Wall Street – Watch BEFORE You Invest



Wall Street is Las Vegas for smart people it's where you take your money if you want to have the odds on your side and like Las Vegas it's full of people who think they have the winning system to get even further ahead hedge funds value investors your uncle who is sure that they connect is the next big thing and especially Jim Cramer they are all trying to outsmart everyone else and this makes sense the legend and mystique around Wall Street is that if you're clever enough you can be like Midas ensuring everything you touch will become gold and there's a clip from the movie limitless that perfectly encapsulates this allure of Wall Street super intelligent guy gets on Wall Street and from nothing makes millions because he just sees things the others don't he outsmarts them my new friend Kevin Doyle showed me how you could leverage two and a half times your cash at the day trading fraud the why you buying that the CEO was just indicted but not for the big fat defense contract he bribed his way into that still on should be announced next week at the end of the week my brokerage account contained over two million dollars now of course you have to take out the exaggerated Hollywood elements but for many people this is the sexy side of Wall Street bring me your four masses and if you're smart will make you rich and many people believe that story and chase its promise but there was an idea that challenged that narrative that radically suggested that it may be impossible to improve your odds beyond the average even brilliant money managers hedge funds and the best investors may be no better than monkeys at picking stocks number one rule of Wall Street nobody okay if you're Warren Buffett or if you Jimmy Buffett nobody knows if the stock is gonna go up down sideways or in circles least of all stockbrokers but before we get to monkeys let's first talk about the big question the question some of the greatest minds in the world have spent their lives trying to answer the one that would make you rich what will the price of a stock be tomorrow and the answers to this question are as numerous as you might expect for an alchemy recipe there is fundamental analysis technical analysis buy and hold value investing growth investing it can go on pretty much forever and the point is at this time it was thought that if you had money you needed to find a genius on Wall Street to invest that money for you someone who through some secret strategy managed your wealth in exchange for a fee the idea was that their expertise would get you returns and your money that would more than pay for their secret formula and this is how you made the big bucks if you're on Wall Street managing people's money and charging a fee for it and amidst these competing views of the stock market and wealthy wealth managers along comes an American economist Burton Malkiel who looks at the market and essentially throws a monkey wrench at the traditional theories in his book a random walk down Wall Street he says no you're all wrong the stock market can't be consistently predicted by any theory the only predictable thing we have about the market is that the whole thing tends to increase over time no one is able to consistently pick winners over anyone else and boldest of all he predicted a blindfolded monkey throwing darts at newspapers financial pages could select a portfolio that would do just as well as one carefully selected by experts if this is true Mauao goes on to say instead of paying big bucks to Wall Street to let experts manage your wealth the best thing to do is to find a minimum fee fund that buys up hundreds of stocks without discrimination for winners and losers and just holds them passively because the future of a stock is fundamentally unknowable anyways because if your average return is the same for both strategies expert management and monkey management why would anyone pay for the experts enter the index fund of the early 70s exactly the kind of low fee fund that now Gail proposes you buy it pay a tiny maintenance fee and it just plies and holds hundreds of stocks now if you're one of those expert investors an index fund seems both silly and insulting random stocks no technical analysis no psychological analysis no chart analysis this was a challenge to the very echo space dollar age Don and after almost 50 years of data the results are in and it's overwhelming you can find hundreds of studies on this because this is one of the most surprising and overanalyze things in finance but here are the headlines over the last 15 years index funds outperformed 90% of actively managed funds when you account for their fees let me repeat that 90 percent not 50 percent 90 percent of the smartest people on Wall Street made less money than monkeys and the 10 percent while given the averages it starts looking a lot like luck rather than skill after all given enough investors it's self-evident that someone will gain above average returns just by sheer luck and we also have a study that even the funds that do beat the index fund one three five years struggle to continue that positive performance and the number that do continue that positive performance year over year is about the number that we'd expect from blind chance just because you won 15 coin flips in a row doesn't mean you're any more likely to win the next one let's talk about why the future of the stock market can't be predicted this is a long theorized idea called the efficient market hypothesis and even for the people who don't subscribe to that idea there's another confounding problem at work here it's a game theory problem it's a situation where there are so many rational actors in the system that the market can't be reasonably predicted because each time someone gets a winning method of valuing stocks the next person will find a way to incorporate that strategy into a new strategy to beat the first strategy in other words every one strategy must take into account other dominant investing strategies into their formula for how the market will swing but it's self referential because the other rational actors will feasibly be trying to incorporate your strategy into their investing strategy and this is kind of where it all breaks down it's an ever-evolving game that you'll never win it long enough to beat the market average so while occasionally there are exploits in the market they rarely last for long and they almost always found by different people even Warren Buffett who is on the very short list of people you might argue has consistently beaten the stock market when asked what to invest in doesn't bother naming his own or any other instead he has a simple answer that would make Malkiel smile he recommends you go get some index funds it turns out that predicting winners and losers is impractical over long periods of time there's no such thing as a consistently winning strategy over the long haul it's much more like gambling where the house odds are on your side you're gonna win some and you're gonna lose some and you can't predict which but if you stay around long enough you'll win more than you lose really the only thing you shouldn't do is pay someone to come up with fancy models and strategies for something that ultimately comes it's chance just go and get some monkeys hey thanks for watching that video this is a huge topic so there are things that I didn't get to automatic tax loss harvesting Robo investors which have brought down the cost of active management significantly smart beta ETFs which Malkiel himself is a fan of tons of stuff that was a little bit outside the scope of this video for you know time sake but I left links below so if you're interested in sinking your teeth a little more into this topic you can do so go so go check that out also we're gonna be having a discussion on the reddit so if you want to talk about this a little more in detail and interact with me go there artist to the music as always are linked and I will see you guys next time we got it we got a fun one coming up next time so keep your eye out for that should be about a week or two out in other news got a little bit of an announcement to make pretty excited about that I'll link some pictures or something I hope you have as wonderful of a month as I'm having and I will see you guys next time