1 00:00:00,040 --> 00:00:01,480 You know, you look at a map, right? 2 00:00:01,480 --> 00:00:03,400 And you just see these stark borders. 3 00:00:03,400 --> 00:00:05,240 Yeah, those jagged black lines everywhere. 4 00:00:05,320 --> 00:00:07,480 Exactly. Just separating us from them. 5 00:00:07,520 --> 00:00:10,560 But I mean, if you step into the actual global supply chain, 6 00:00:10,560 --> 00:00:13,000 those borders are, well, they're a complete illusion. 7 00:00:13,160 --> 00:00:16,480 Oh, a total illusion. So today we are doing a deep 8 00:00:16,480 --> 00:00:20,640 dive into this incredibly rare, highly candid transcript. 9 00:00:20,760 --> 00:00:22,760 It's from legendary value investor Lee Liu. 10 00:00:22,880 --> 00:00:25,080 Right, the guy who managed capital for the Munger family. 11 00:00:25,160 --> 00:00:27,480 Exactly. And it proves that the political 12 00:00:27,480 --> 00:00:30,600 map you see on the news is just entirely disconnected from the 13 00:00:30,640 --> 00:00:33,480 economic reality that's, you know, actually governing your 14 00:00:33,480 --> 00:00:36,000 money. It is staggering, honestly, the 15 00:00:36,000 --> 00:00:38,520 contrast between what politicians are saying on 16 00:00:38,520 --> 00:00:41,920 television and what is actually happening out there in the 17 00:00:41,920 --> 00:00:43,640 shipping lanes, in the data centers. 18 00:00:43,800 --> 00:00:45,320 Yeah. And Lee Lou operates at this 19 00:00:45,320 --> 00:00:48,280 very unique intersection of Eastern and Western economic 20 00:00:48,280 --> 00:00:50,800 philosophy. So we are going to unpack his 21 00:00:50,800 --> 00:00:54,320 thesis on this inescapable global market, the harsh 22 00:00:54,320 --> 00:00:57,840 financial reality of the AI wave, and a really specific 23 00:00:57,840 --> 00:01:00,480 framework for compounding your wealth and your life when the 24 00:01:00,480 --> 00:01:03,080 macro environment feels like a complete hurricane. 25 00:01:03,200 --> 00:01:05,600 Which it does. I mean, this macro environment 26 00:01:05,600 --> 00:01:08,080 is hostile right now. OK, let's unpack this. 27 00:01:08,600 --> 00:01:11,840 Because if you are trying to make decisions about your career 28 00:01:11,840 --> 00:01:14,680 or your portfolio, or you're just trying to figure out where 29 00:01:14,680 --> 00:01:18,240 the global order is heading, relying on political rhetoric is 30 00:01:18,440 --> 00:01:20,600 a total recipe for disaster. Right. 31 00:01:20,840 --> 00:01:24,040 Yeah, politicians are just drawing lines in the sand while 32 00:01:24,040 --> 00:01:27,320 the massive ocean of global capital simply washes right over 33 00:01:27,320 --> 00:01:28,240 them. Totally. 34 00:01:28,920 --> 00:01:31,640 And to understand why those borders are failing to contain 35 00:01:31,640 --> 00:01:34,760 the economy, Li Liu takes us back to a specific inflection 36 00:01:34,760 --> 00:01:37,760 point roughly 30 years ago, right around the end of the Cold 37 00:01:37,760 --> 00:01:40,080 War. Yeah, because before the 1990's, 38 00:01:40,080 --> 00:01:43,000 the glow was really fractured into these competing economic 39 00:01:43,000 --> 00:01:45,120 spheres. You had the Soviet bloc, you had 40 00:01:45,120 --> 00:01:47,920 the Western bloc, and they operated largely independently 41 00:01:47,920 --> 00:01:50,520 of each other, right. But then when the Soviet Union 42 00:01:50,520 --> 00:01:52,880 collapsed, something historically unprecedented 43 00:01:52,880 --> 00:01:54,920 happened. Virtually all countries 44 00:01:54,920 --> 00:01:58,120 representing billions of people, they merged into one single 45 00:01:58,120 --> 00:02:01,720 unified global market economy. And once that merger happened, 46 00:02:01,840 --> 00:02:05,840 it initiated this economic flywheel driven by comparative 47 00:02:05,840 --> 00:02:08,600 advantage that just fundamentally altered human 48 00:02:08,600 --> 00:02:10,600 civilization. Let's break down the actual 49 00:02:10,600 --> 00:02:13,680 mechanics of that flywheel, because, you know, comparative 50 00:02:13,680 --> 00:02:16,600 advantage is a term that gets thrown around a lot in economics 51 00:02:16,600 --> 00:02:20,480 one O 1, but the mathematical reality of it is exactly what 52 00:02:20,480 --> 00:02:21,960 binds these countries together today. 53 00:02:22,520 --> 00:02:25,480 Right, it's not just about who can build a widget the cheapest. 54 00:02:25,480 --> 00:02:28,520 No, not at all. It is entirely about opportunity 55 00:02:28,520 --> 00:02:30,400 cost. I mean, think about it like 56 00:02:30,400 --> 00:02:32,400 this. If country A is incredibly 57 00:02:32,400 --> 00:02:35,760 efficient at designing software, and country B is incredibly 58 00:02:35,760 --> 00:02:39,080 efficient at assembling electronics, it makes 0 59 00:02:39,080 --> 00:02:41,960 mathematical sense for country A to waste its highly skilled 60 00:02:41,960 --> 00:02:44,040 labor force soldering circuit boards. 61 00:02:44,800 --> 00:02:48,200 Even if country A could solder them better than country B, they 62 00:02:48,200 --> 00:02:50,800 actually lose money by not dedicating those hours to the 63 00:02:50,800 --> 00:02:53,520 higher margin software design. Oh wow. 64 00:02:54,280 --> 00:02:57,200 Yeah, because of the opportunity cost, every hour spent soldering 65 00:02:57,200 --> 00:02:59,400 is an hour not writing code. Exactly. 66 00:02:59,880 --> 00:03:02,560 And that exact mathematical reality dictates the entire 67 00:03:02,560 --> 00:03:04,240 division of Labor on a global scale. 68 00:03:04,840 --> 00:03:07,840 Once you integrate billions of people into this unified system, 69 00:03:08,240 --> 00:03:11,040 capital just naturally flows to wherever it can be deployed most 70 00:03:11,040 --> 00:03:13,000 efficiently. So you get these hyper 71 00:03:13,000 --> 00:03:16,600 specialized supply chains, you get technological compounding. 72 00:03:17,040 --> 00:03:20,200 And Lee Lou's core thesis here is that once this massive 73 00:03:20,200 --> 00:03:24,800 planetary scale flywheel gets spinning, the momentum is so 74 00:03:24,800 --> 00:03:27,320 immense. Yeah, it's practically 75 00:03:27,320 --> 00:03:28,240 unstoppable. Right. 76 00:03:28,240 --> 00:03:31,320 It becomes nearly impossible for any single nation to voluntarily 77 00:03:31,320 --> 00:03:34,200 withdraw from it without triggering just catastrophic 78 00:03:34,200 --> 00:03:36,880 domestic costs. Which brings us directly to what 79 00:03:36,880 --> 00:03:40,560 we can call the Mexico loophole. Yeah, this part is wild because 80 00:03:40,560 --> 00:03:43,560 it sounds completely absurd to the average voter that a multi 81 00:03:43,560 --> 00:03:47,160 year multi administration trade war between the United States 82 00:03:47,160 --> 00:03:50,120 and China could be bypassed by simply, you know, changing the 83 00:03:50,120 --> 00:03:53,760 routing on a shipping container. It sounds like a joke, but the 84 00:03:53,760 --> 00:03:56,400 data Lulu points to is just undeniable. 85 00:03:56,800 --> 00:03:59,040 I mean, we hear constantly about decoupling, right? 86 00:03:59,320 --> 00:04:02,280 Oh, all the time. The US slaps these massive 87 00:04:02,280 --> 00:04:06,000 tariffs on Chinese goods and on paper, direct bilateral trade 88 00:04:06,000 --> 00:04:08,200 between the US and China actually drops. 89 00:04:08,680 --> 00:04:11,240 And the politicians, well, they go on TV and take a victory lap. 90 00:04:11,760 --> 00:04:14,360 But the underlying economic physics haven't changed one bit. 91 00:04:14,560 --> 00:04:18,720 Exactly because the US consumer still demands those goods, and 92 00:04:18,720 --> 00:04:21,200 the Chinese factory still have that comparative advantage in 93 00:04:21,200 --> 00:04:24,640 actually manufacturing them. So the market just simply 94 00:04:24,640 --> 00:04:26,720 reroutes the trade around the political friction. 95 00:04:26,920 --> 00:04:30,280 So over the exact same period that direct US China trade 96 00:04:30,280 --> 00:04:35,120 declined, U.S. trade with Mexico surged by an almost identical 97 00:04:35,120 --> 00:04:37,600 offset, right? And on top of that, Chinese 98 00:04:37,600 --> 00:04:40,480 foreign direct investment into Mexico just skyrocketed. 99 00:04:41,040 --> 00:04:43,720 The mechanics of this are so fascinating when you dig into 100 00:04:43,720 --> 00:04:48,120 international trade law because to avoid a tariff a product 101 00:04:48,120 --> 00:04:51,360 basically just needs a certain percentage of its its value 102 00:04:51,360 --> 00:04:54,360 added to originate in a non tariff country. 103 00:04:54,960 --> 00:04:58,000 So Chinese firms aren't just shipping finished laptops to 104 00:04:58,000 --> 00:05:01,200 Mexico and like slapping a new Made in Mexico sticker on them. 105 00:05:01,200 --> 00:05:04,880 No, that would be illegal. What they are doing is shipping 106 00:05:04,880 --> 00:05:08,240 the high value internal components, the motherboards, 107 00:05:08,240 --> 00:05:12,080 the batteries, the chassis to a massive new assembly plant that 108 00:05:12,080 --> 00:05:14,240 they built in Monterrey, Mexico. Oh, I see. 109 00:05:14,680 --> 00:05:17,800 Then the Mexican labor force does the final assembly, which 110 00:05:18,040 --> 00:05:21,680 perfectly satisfies that value added requirement under the law, 111 00:05:22,480 --> 00:05:24,760 and then the finished product just crosses the US border 112 00:05:24,760 --> 00:05:27,840 completely tariff free under the USMCA trade agreement. 113 00:05:28,320 --> 00:05:31,840 So the net result is that the US economy and the Chinese economy 114 00:05:31,840 --> 00:05:35,520 remain exactly as deeply intertwined as they were before 115 00:05:35,520 --> 00:05:37,320 the trade war even began. Precisely. 116 00:05:37,920 --> 00:05:41,120 The global root system just grew a new branch to bypass the 117 00:05:41,120 --> 00:05:43,280 concrete wall the politicians tried to build. 118 00:05:43,480 --> 00:05:45,440 It's like pouring water on a slanted floor. 119 00:05:45,520 --> 00:05:48,760 It's going to find the crack. Yeah, the political order is 120 00:05:48,760 --> 00:05:50,720 attempting to artificially rewrite the rules of 121 00:05:50,720 --> 00:05:54,200 globalization, mostly because the US is exhausted from the 122 00:05:54,200 --> 00:05:57,680 cost of policing this unified market, while China has risen to 123 00:05:57,680 --> 00:06:00,840 near self-sufficiency. But the economic order is like 124 00:06:00,840 --> 00:06:02,920 gravity. It just pulls capital toward 125 00:06:02,920 --> 00:06:05,680 efficiency regardless of who is sitting in the Oval. 126 00:06:05,680 --> 00:06:06,720 Office. Exactly. 127 00:06:07,680 --> 00:06:10,520 And it's a perfect illustration of how heavy and permanent this 128 00:06:10,520 --> 00:06:13,600 economic order really is. But it goes so much deeper than 129 00:06:13,600 --> 00:06:15,320 just assembling consumer electronics. 130 00:06:15,760 --> 00:06:18,520 Right, because the mutual dependence hits its absolute 131 00:06:18,520 --> 00:06:21,000 peak when we look at the single most important technological 132 00:06:21,000 --> 00:06:23,240 race of our lifetimes, which is generative AI. 133 00:06:23,400 --> 00:06:25,280 Yeah, this is where it gets incredibly serious. 134 00:06:25,760 --> 00:06:28,040 We are talking about technology that requires the most 135 00:06:28,040 --> 00:06:31,560 sophisticated manufacturing processes ever devised by human 136 00:06:31,560 --> 00:06:35,000 beings. And Li Liu uses this incredible 137 00:06:35,480 --> 00:06:38,920 folksy observation to highlight the geographic bottleneck of 138 00:06:38,920 --> 00:06:41,400 this entire industry. The chopsticks anecdote. 139 00:06:41,440 --> 00:06:44,680 Yes, the chopsticks phenomenon. He points out that if you trace 140 00:06:44,680 --> 00:06:47,320 the supply chain of the advanced semiconductors that power every 141 00:06:47,320 --> 00:06:50,720 single AI model on Earth, you hit this highly concentrated 142 00:06:50,720 --> 00:06:54,520 cultural and geographic Nexus. The absolute cutting edge 143 00:06:54,520 --> 00:06:58,280 fabrication, the actual printing of the chips, happens at TSMC in 144 00:06:58,280 --> 00:07:00,440 Taiwan. And then the companies leading 145 00:07:00,440 --> 00:07:03,960 the design of these ships in the United States, NVIDIA and AMD, 146 00:07:04,200 --> 00:07:06,600 they are led by Jensen Huang and Lisa Sue. 147 00:07:06,800 --> 00:07:08,440 Both of whom have Taiwanese heritage. 148 00:07:08,640 --> 00:07:11,280 Exactly so. Li Liu notes that almost 149 00:07:11,280 --> 00:07:14,360 everyone sitting at the absolute pinnacle of this multi trillion 150 00:07:14,360 --> 00:07:16,600 dollar bottleneck uses chopsticks. 151 00:07:16,840 --> 00:07:19,600 It's a humorous visual, but the implication is dead serious. 152 00:07:19,600 --> 00:07:23,760 It is because his point is that you cannot just sign a piece of 153 00:07:23,760 --> 00:07:27,480 paper in Washington, DC and magically decouple your entire 154 00:07:27,480 --> 00:07:30,840 economy from that deep cultural and geographic reality. 155 00:07:30,960 --> 00:07:33,120 No, of course not. You're talking about lithography 156 00:07:33,120 --> 00:07:36,920 machines, clean rooms, literally decades of highly specialized 157 00:07:36,920 --> 00:07:40,680 institutional knowledge just to etch billions of transistors 158 00:07:40,680 --> 00:07:43,360 onto a silicon wafer. You cannot replicate that in 159 00:07:43,360 --> 00:07:46,160 Ohio in a couple of years just because you passed a subsidy 160 00:07:46,160 --> 00:07:47,880 bill. It requires a hard 161 00:07:47,880 --> 00:07:50,680 acknowledgement of reality. So if a nation is betting its 162 00:07:50,680 --> 00:07:54,560 entire economic future on leading the AI revolution, it is 163 00:07:54,560 --> 00:07:57,120 physically tethered to the stability of East Asia. 164 00:07:57,160 --> 00:08:00,960 Yeah, it is mutual dependence forces, a dynamic that Lilu 165 00:08:00,960 --> 00:08:04,280 calls strategic stability. I mean, when you see the leaders 166 00:08:04,280 --> 00:08:07,080 of the US and China holding these big summits, the media 167 00:08:07,080 --> 00:08:10,160 always frames it as this search for some grand treaty or a 168 00:08:10,160 --> 00:08:13,320 massive breakthrough. But behind closed doors, simply 169 00:08:13,320 --> 00:08:16,320 putting another meeting on the calendar is considered a massive 170 00:08:16,320 --> 00:08:18,760 diplomatic victory. It sounds absurd to the average 171 00:08:18,760 --> 00:08:21,480 citizen that a calendar invite is a victory, right? 172 00:08:21,640 --> 00:08:24,280 It really does. But historically, when 2 powers 173 00:08:24,280 --> 00:08:28,160 are this economically entangled, just delaying conflict is the 174 00:08:28,200 --> 00:08:31,600 only viable strategy. Both sides are basically playing 175 00:08:31,600 --> 00:08:34,919 for time precisely because the mechanism of mutual assured 176 00:08:34,919 --> 00:08:37,640 economic destruction is so crystal clear to everyone 177 00:08:37,640 --> 00:08:40,320 involved. If the Taiwan semiconductor 178 00:08:40,320 --> 00:08:43,799 supply chain goes offline, the US tech sector instantly 179 00:08:43,799 --> 00:08:46,880 collapses and the global economy plunges into a severe 180 00:08:46,880 --> 00:08:49,680 depression. And simultaneously, China relies 181 00:08:49,680 --> 00:08:52,520 heavily on that unified global market to sustain its own 182 00:08:52,520 --> 00:08:55,160 manufacturing base and keep its people employed, right? 183 00:08:55,600 --> 00:08:57,920 Both sides actually believe the time favors them. 184 00:08:58,480 --> 00:09:01,280 China believes that with enough time, they can achieve total 185 00:09:01,280 --> 00:09:04,320 domestic self-sufficiency in cutting edge semiconductor 186 00:09:04,320 --> 00:09:06,640 fabrication. And the US believes that with 187 00:09:06,640 --> 00:09:10,520 enough time, they can push AI to a level that just guarantees 188 00:09:10,520 --> 00:09:14,320 unassailable economic supremacy. So the geopolitical strategy 189 00:09:14,320 --> 00:09:17,640 isn't to win the war tomorrow, it's to maintain the peace today 190 00:09:17,640 --> 00:09:19,560 so the internal race can continue. 191 00:09:19,840 --> 00:09:21,240 OK. But I have to push back on this 192 00:09:21,240 --> 00:09:24,520 idea of eternal stability for a second, because if you look at 193 00:09:24,520 --> 00:09:27,240 the domestic politics in both countries right now, the 194 00:09:27,240 --> 00:09:29,720 rhetoric is intensely nationalistic. 195 00:09:29,840 --> 00:09:32,800 Oh, absolutely. Protectionism is practically the 196 00:09:32,800 --> 00:09:35,160 only bipartisan consensus left in the US. 197 00:09:35,320 --> 00:09:37,600 Right. So if politicians keep pouring 198 00:09:37,600 --> 00:09:40,920 poison on the soil, trying to hack away at these roots with 199 00:09:40,920 --> 00:09:44,280 tariffs and export controls and massive sanctions, I mean, at 200 00:09:44,280 --> 00:09:47,680 what point does that economic tether finally snap? 201 00:09:47,680 --> 00:09:51,080 Can the invisible market really hold together when the visible 202 00:09:51,080 --> 00:09:53,560 political order is actively trying to tear it apart? 203 00:09:53,800 --> 00:09:55,840 That is the defining risk of our era. 204 00:09:56,080 --> 00:10:00,480 However, if you follow Li Li's historical analysis, it suggests 205 00:10:00,480 --> 00:10:03,360 that the economic order is ultimately more resilient 206 00:10:03,560 --> 00:10:06,840 because it's feedback loops are immediate and they are 207 00:10:06,840 --> 00:10:08,880 incredibly painful to the voting public. 208 00:10:09,120 --> 00:10:11,240 What do you mean by immediate feedback loops? 209 00:10:11,560 --> 00:10:15,480 Well, when politicians attempt to force a true decoupling, say 210 00:10:15,480 --> 00:10:18,120 by outright banning the importation of critical 211 00:10:18,120 --> 00:10:20,960 components rather than just putting a tariff on them, the 212 00:10:20,960 --> 00:10:23,360 result is instant supply chain paralysis. 213 00:10:23,960 --> 00:10:26,440 You get massive inflation and you get empty shelves. 214 00:10:26,600 --> 00:10:30,120 Oh right, like what we saw microscopic fractions of during 215 00:10:30,120 --> 00:10:32,400 the pandemic logistics crisis. Exactly. 216 00:10:32,920 --> 00:10:35,640 A deliberate decoupling would be exponentially worse than the 217 00:10:35,640 --> 00:10:39,440 pandemic shortages, and the pain of that inflation and economic 218 00:10:39,440 --> 00:10:43,560 stagnation acts as a natural hard limit on political 219 00:10:43,560 --> 00:10:46,640 ambition. So politicians can only push 220 00:10:46,640 --> 00:10:50,160 isolationism right up to the point where the average consumer 221 00:10:50,160 --> 00:10:53,120 refuses to tolerate the drop in their standard of living. 222 00:10:53,240 --> 00:10:55,000 Right. They push until the voters 223 00:10:55,000 --> 00:10:58,080 scream about the price of groceries and electronics, and 224 00:10:58,080 --> 00:11:00,560 then they quietly back off. Which brings us right down to 225 00:11:00,560 --> 00:11:02,800 the individual listener. Because if this macro 226 00:11:02,800 --> 00:11:06,400 environment is so hostile and the geopolitical landscape is 227 00:11:06,400 --> 00:11:09,840 this chaotic, the individual investors basically walking 228 00:11:09,840 --> 00:11:11,960 straight into a hurricane. They really are. 229 00:11:12,320 --> 00:11:14,240 So how do you actually survive that? 230 00:11:14,600 --> 00:11:17,400 You clearly cannot rely on the old assumptions of the 20th 231 00:11:17,400 --> 00:11:19,640 century. You need a completely different 232 00:11:19,640 --> 00:11:22,960 framework for operating within this inescapable global web. 233 00:11:23,280 --> 00:11:25,880 And that framework starts with a radical redefinition of what 234 00:11:25,880 --> 00:11:29,200 wealth actually is, because the traditional view of wealth is 235 00:11:29,200 --> 00:11:31,600 very static. We are conditioned to look at a 236 00:11:31,600 --> 00:11:35,360 bank account balance, right, or a pile of gold, and we measure 237 00:11:35,360 --> 00:11:37,200 our security by that absolute number. 238 00:11:37,680 --> 00:11:40,960 Yeah, but Lelu argues that in a modern Fiat monetary system, 239 00:11:41,200 --> 00:11:42,720 that definition is a complete trap. 240 00:11:43,400 --> 00:11:46,760 Fiat currencies are structurally designed to inflate. 241 00:11:47,240 --> 00:11:49,760 It is the core mechanism by which governments manage massive 242 00:11:49,760 --> 00:11:51,800 debt cycles. They just expand the money 243 00:11:51,800 --> 00:11:54,360 supply, which inherently devalues the currency. 244 00:11:54,360 --> 00:11:56,520 Exactly. Therefore, holding static 245 00:11:56,520 --> 00:11:59,040 currency is just a guaranteed loss of purchasing power for 246 00:11:59,040 --> 00:12:01,880 time. So he redefines wealth not as a 247 00:12:01,880 --> 00:12:05,760 dollar amount, but as your quote percentage ownership of global 248 00:12:05,760 --> 00:12:08,440 purchasing power. Which is such a massive shift in 249 00:12:08,440 --> 00:12:10,560 perspective and it's incredibly empowering. 250 00:12:10,800 --> 00:12:14,600 It really is, because $1,000,000 today obviously doesn't buy what 251 00:12:14,600 --> 00:12:17,200 it bought in 1990, and it certainly won't buy the same 252 00:12:17,200 --> 00:12:20,080 things in 2050. But if you measure your wealth 253 00:12:20,080 --> 00:12:22,800 by your percentage claim on the productive output of the human 254 00:12:22,800 --> 00:12:25,600 race, well then you are insulated from the devaluation 255 00:12:25,600 --> 00:12:28,480 of the currency itself. But to maintain and grow that 256 00:12:28,480 --> 00:12:31,400 percentage ownership, you have to attach your capital to the 257 00:12:31,400 --> 00:12:33,280 very engine that creates the value. 258 00:12:33,840 --> 00:12:36,280 You must own stakes and businesses operating within 259 00:12:36,280 --> 00:12:39,560 dynamic economies, businesses that are actually successfully 260 00:12:39,560 --> 00:12:42,280 navigating that global flywheel we just discussed. 261 00:12:42,720 --> 00:12:44,640 Right. You want to share proportionally 262 00:12:44,640 --> 00:12:47,320 in the upside of human progress and technological efficiency, 263 00:12:47,840 --> 00:12:50,240 but acquiring those stakes means you have to participate in the 264 00:12:50,240 --> 00:12:53,000 stock market. Which Lelu describes using this 265 00:12:53,080 --> 00:12:56,000 totally brilliant metaphor that he actually borrowed from Warren 266 00:12:56,000 --> 00:12:58,720 Buffett. The stock market is a church 267 00:12:58,720 --> 00:13:02,440 with a casino attached to it. It is the perfect visual for the 268 00:13:02,440 --> 00:13:05,160 completely schizophrenic nature of financial markets. 269 00:13:05,360 --> 00:13:07,840 It really is. So what does this all mean? 270 00:13:07,840 --> 00:13:09,720 How do we navigate this church and casino? 271 00:13:09,960 --> 00:13:12,720 To understand how to navigate it, Lelu categorizes the market 272 00:13:12,720 --> 00:13:15,320 into four distinct types of participants. 273 00:13:15,960 --> 00:13:17,880 First you have the value creators. 274 00:13:18,040 --> 00:13:19,840 These are the congregation in the church. 275 00:13:20,040 --> 00:13:22,960 Exactly. They are the operators and the 276 00:13:22,960 --> 00:13:25,280 fundamental investors who allocate capital to actual 277 00:13:25,280 --> 00:13:27,760 businesses. They hold them through cycles 278 00:13:28,120 --> 00:13:30,760 and they benefit from the compounding of real world value 279 00:13:30,760 --> 00:13:32,960 creation. They're the ones actually 280 00:13:32,960 --> 00:13:34,960 financing the expansion of the economy. 281 00:13:35,080 --> 00:13:37,520 OK, so that's Group One. Second, you have the 282 00:13:37,520 --> 00:13:41,000 arbitragers. Right now, these participants 283 00:13:41,000 --> 00:13:44,720 aren't necessarily holding for decades, but they provide a 284 00:13:44,720 --> 00:13:46,680 really vital stabilizing function. 285 00:13:47,040 --> 00:13:50,240 They exploit mispricings. So when the market panics and 286 00:13:50,240 --> 00:13:53,520 prices drop way below intrinsic value, they step in and buy. 287 00:13:53,680 --> 00:13:57,360 Yeah, and when the market gets euphoric and prices completely 288 00:13:57,360 --> 00:13:59,560 decouple from reality, they sell. 289 00:14:00,320 --> 00:14:03,080 They act as the shock absorbers for the whole system. 290 00:14:03,680 --> 00:14:05,360 Then third you have the speculators. 291 00:14:05,760 --> 00:14:08,760 This is the casino. The speculators are playing a 292 00:14:08,760 --> 00:14:11,480 purely psychological game. They are just trying to guess 293 00:14:11,480 --> 00:14:14,360 what the next participant will pay for an asset completely 294 00:14:14,360 --> 00:14:16,360 regardless of his underlying fundamental value. 295 00:14:16,680 --> 00:14:19,360 And the mathematics of speculation are just brutal. 296 00:14:19,960 --> 00:14:24,040 Inherently A0 sum game for every single dollar won, a dollar is 297 00:14:24,040 --> 00:14:25,920 lost. But when you factor in the 298 00:14:25,920 --> 00:14:28,880 massive amounts of time, the emotional energy and the 299 00:14:28,880 --> 00:14:32,240 friction costs involved, speculation is actually a net 300 00:14:32,240 --> 00:14:35,400 negative drain on society. And those friction costs, right? 301 00:14:35,440 --> 00:14:39,000 They are extracted by the 4th group, the market makers and 302 00:14:39,000 --> 00:14:40,680 brokers. The house. 303 00:14:40,680 --> 00:14:43,880 Yeah, the house, they don't care if the asset goes up or down. 304 00:14:44,040 --> 00:14:46,840 They simply collect a toll on every single transaction. 305 00:14:47,440 --> 00:14:50,720 They are just a structural tax on the entire financial system. 306 00:14:51,200 --> 00:14:54,120 So when you look at this ecosystem, a small church 307 00:14:54,240 --> 00:14:57,520 surrounded by this massive, loud, highly socially 308 00:14:57,520 --> 00:15:00,760 destructive casino, you really have to ask yourself, why do we 309 00:15:00,760 --> 00:15:03,800 tolerate this? Yeah, Why is the global economy 310 00:15:03,800 --> 00:15:07,360 built on a foundation that actively encourages such rampant 311 00:15:07,520 --> 00:15:11,360 irrational speculation? That's a profound question, and 312 00:15:11,360 --> 00:15:13,880 Li Liu's answer cuts straight down to the reality of the human 313 00:15:13,880 --> 00:15:17,160 condition. The casino is tolerated because 314 00:15:17,160 --> 00:15:20,040 it is literally the only reliable mechanism we have found 315 00:15:20,040 --> 00:15:23,680 to secure the quote UN quote building permits for the church. 316 00:15:24,160 --> 00:15:26,480 The animal spirits. Exactly. 317 00:15:26,800 --> 00:15:29,880 You need human greed to get the machine running. 318 00:15:30,000 --> 00:15:33,760 Because building massive capital intensive industries, whether 319 00:15:33,760 --> 00:15:37,440 it's the railroads back in the 19th century, or the Internet 320 00:15:37,440 --> 00:15:41,840 infrastructure in the 1990s, or all the AI data centers today, 321 00:15:42,080 --> 00:15:45,600 it requires astronomical amounts of upfront capital. 322 00:15:45,760 --> 00:15:48,880 If you relied solely on purely rational long term value 323 00:15:48,880 --> 00:15:52,520 investors, you could never pool enough capital quickly enough to 324 00:15:52,520 --> 00:15:54,400 fund these massive technological leaps. 325 00:15:55,040 --> 00:15:59,040 The casino, with its flashing lights and promises of overnight 326 00:15:59,040 --> 00:16:02,560 riches, it draws in all the excess savings of the general 327 00:16:02,560 --> 00:16:05,520 public. Yes, and the speculators often 328 00:16:05,520 --> 00:16:08,080 get totally wiped out when the bubble inevitably bursts. 329 00:16:08,560 --> 00:16:12,120 But the capital they injected into the system that remains. 330 00:16:12,440 --> 00:16:15,800 The railroads are still built. The fiber optic cables are still 331 00:16:15,800 --> 00:16:18,400 on the ground, right? The speculative waste is 332 00:16:18,400 --> 00:16:22,400 basically just the price society pays to fund the frontier of 333 00:16:22,400 --> 00:16:25,800 human progress. And Lee Lou views his role and 334 00:16:25,800 --> 00:16:28,640 the legacy of firms like Berkshire Hathaway as building 335 00:16:28,640 --> 00:16:31,680 massive cathedrals within this chaotic landscape. 336 00:16:32,080 --> 00:16:35,560 A cathedral is a structurally sound institution where actual 337 00:16:35,560 --> 00:16:39,480 value is created over decades. It offers a sanctuary for 338 00:16:39,760 --> 00:16:42,880 rational capital while the casino just burns itself out 339 00:16:42,880 --> 00:16:45,840 outside. And he is actively trying to 340 00:16:45,840 --> 00:16:49,760 construct these exact same enduring cathedrals in the Asian 341 00:16:49,760 --> 00:16:52,240 markets today. This presents a stark, 342 00:16:52,240 --> 00:16:54,280 unavoidable choice for the individual listener. 343 00:16:54,600 --> 00:16:57,440 When you log into your brokerage account or when you allocate 344 00:16:57,440 --> 00:17:00,400 your 4O1K, which building are you walking into? 345 00:17:00,960 --> 00:17:04,240 Are you stepping into the casino, playing a 0 sum game 346 00:17:04,240 --> 00:17:07,079 governed by the madness of crowds, where the house is 347 00:17:07,079 --> 00:17:09,400 guaranteed to slowly drain your capital? 348 00:17:10,160 --> 00:17:13,240 Or are you stepping into the Church, aligning your capital 349 00:17:13,240 --> 00:17:16,720 with the slow, undeniable mathematics of value creation? 350 00:17:17,240 --> 00:17:19,800 It sounds like an obvious choice when you lay it out like that, 351 00:17:19,800 --> 00:17:23,720 but the casino is deliberately designed to hijack human 352 00:17:23,720 --> 00:17:25,280 psychology. Oh, absolutely. 353 00:17:25,800 --> 00:17:29,280 And there is absolutely no bigger, louder, more 354 00:17:29,280 --> 00:17:32,320 intoxicating casino right now than generative AI. 355 00:17:33,000 --> 00:17:35,600 We are shifting from timeless market philosophy straight into 356 00:17:35,600 --> 00:17:38,360 the single most urgent technological disruption of our 357 00:17:38,360 --> 00:17:40,320 era. Because if you want to see 358 00:17:40,320 --> 00:17:43,320 animal spirits at work, just look at the valuations being 359 00:17:43,320 --> 00:17:46,040 assigned to literally anything with an AI ticker symbol. 360 00:17:46,400 --> 00:17:49,840 The market is treating AI like a magic wand, but Lelu forces us 361 00:17:49,840 --> 00:17:52,840 to strip away the euphoria and actually examine the underlying 362 00:17:52,840 --> 00:17:55,360 mechanics of this wave. Because technological disruption 363 00:17:55,360 --> 00:17:57,840 is not new, right? We have navigated the steam 364 00:17:57,840 --> 00:18:01,800 engine, we did electrification, we did the digital revolution. 365 00:18:02,600 --> 00:18:07,120 But Lelu identifies 3 distinct variables that make the AI wave 366 00:18:07,120 --> 00:18:10,160 fundamentally different. The unprecedented velocity of 367 00:18:10,160 --> 00:18:12,880 the development, the sheer planetary scale of its 368 00:18:12,880 --> 00:18:15,480 application, and the hyper concentration of financial 369 00:18:15,480 --> 00:18:18,480 returns at the very top of the tech hierarchy. 370 00:18:18,600 --> 00:18:21,480 Yeah, and he tracks this disruption along a spectrum, 371 00:18:22,080 --> 00:18:26,160 describing it as a transition from a tool to a creature. 372 00:18:27,280 --> 00:18:31,240 A creature that is a terrifying but probably necessary 373 00:18:31,240 --> 00:18:34,000 distinction. It is because for the entirety 374 00:18:34,000 --> 00:18:37,240 of human history, technology has operated strictly as a tool. 375 00:18:38,040 --> 00:18:40,560 A tractor does exactly what the farmer tells it to do. 376 00:18:41,200 --> 00:18:44,360 A spreadsheet executes the exact formula you type into it. 377 00:18:44,720 --> 00:18:47,320 But AI is actively crossing the boundary of autonomy. 378 00:18:47,920 --> 00:18:50,560 The threshold was really crossed four years ago when large 379 00:18:50,560 --> 00:18:52,680 language models began passing the Turing test. 380 00:18:53,280 --> 00:18:56,520 They were generating text so contextually accurate and 381 00:18:56,520 --> 00:19:00,240 conceptually rich that the output became indistinguishable 382 00:19:00,240 --> 00:19:03,280 from human thought. But just mimicking language was 383 00:19:03,280 --> 00:19:05,920 only the entry point. Right, because from there the 384 00:19:05,920 --> 00:19:09,440 models rapidly evolved the capacity for logical reasoning, 385 00:19:09,880 --> 00:19:12,600 and from reasoning they developed the ability to 386 00:19:12,600 --> 00:19:16,200 generate functioning code. And that is the critical pivot 387 00:19:16,200 --> 00:19:18,200 point, isn't it? The moment an AI can write and 388 00:19:18,200 --> 00:19:21,440 execute its own code, it ceases to be a passive tool just 389 00:19:21,440 --> 00:19:24,000 waiting for a prompt. It becomes an autonomous agent. 390 00:19:24,280 --> 00:19:27,360 It can observe a problem, write a script to solve the problem, 391 00:19:27,880 --> 00:19:31,000 execute the script and evaluate the result all on its own. 392 00:19:31,480 --> 00:19:34,240 We are currently entering this phase of multi agent 393 00:19:34,240 --> 00:19:37,400 collaboration where specialized AI models actually organize 394 00:19:37,400 --> 00:19:40,240 themselves. They invent their own efficient 395 00:19:40,240 --> 00:19:44,280 communication protocols and they tackle complex multi step tasks 396 00:19:44,280 --> 00:19:47,200 over long durations without any human intervention. 397 00:19:47,720 --> 00:19:50,800 And this rapid capability overhang leads directly to what 398 00:19:50,800 --> 00:19:54,440 Lelu scathingly refers to as the Silicon Valley narrative. 399 00:19:55,040 --> 00:19:57,640 The dominant ideology in the major AI research labs? 400 00:19:57,720 --> 00:20:00,240 Yes. The narrative is that we are on 401 00:20:00,240 --> 00:20:04,240 the absolute precipice of RSI recursive self improvement. 402 00:20:04,800 --> 00:20:08,160 The theory is that an AI agent will become capable of analyzing 403 00:20:08,160 --> 00:20:11,160 its own foundational architecture and rewriting its 404 00:20:11,160 --> 00:20:12,960 source code to become marginally smarter. 405 00:20:13,320 --> 00:20:16,200 And then that smarter version rewrites the code again, but 406 00:20:16,200 --> 00:20:17,400 faster. Exactly. 407 00:20:17,640 --> 00:20:21,600 This creates an exponential intelligence explosion leading 408 00:20:21,600 --> 00:20:25,680 to ASI Artificial super intelligence, an entity with 409 00:20:25,680 --> 00:20:28,880 cognitive capabilities vastly exceeding the combined 410 00:20:28,880 --> 00:20:30,840 intellectual power of the entire human race. 411 00:20:31,400 --> 00:20:34,120 It's like an automated factory that doesn't just build cars, 412 00:20:34,120 --> 00:20:37,240 but suddenly learns how to build better factory robots, which 413 00:20:37,240 --> 00:20:40,120 build even better factory robots until the factory basically 414 00:20:40,120 --> 00:20:42,680 consumes the entire town and starts launching rockets. 415 00:20:42,920 --> 00:20:46,400 Yeah, and Lee Wee describes the way Silicon Valley executives 416 00:20:46,400 --> 00:20:50,120 are pitching this concept to investors as the IPO of a 417 00:20:50,120 --> 00:20:53,080 demigod. The IPO of a demigod. 418 00:20:53,800 --> 00:20:55,400 That is the ultimate casino pitch. 419 00:20:55,440 --> 00:20:58,040 It really is. These companies are raising 10s 420 00:20:58,080 --> 00:21:00,800 of billions of dollars. They are commanding multi 421 00:21:00,800 --> 00:21:04,280 trillion dollar market caps literally to fund the creation 422 00:21:04,280 --> 00:21:07,840 of an entity that the founders themselves openly admit carries 423 00:21:07,840 --> 00:21:10,760 a non 0 probability of causing human extinction. 424 00:21:11,320 --> 00:21:14,360 They are asking the capital markets to fund a machine that 425 00:21:14,360 --> 00:21:17,440 might develop sub goals totally misaligned with human survival, 426 00:21:17,760 --> 00:21:20,600 like building a rocket ship while inside it, handing the 427 00:21:20,600 --> 00:21:23,880 controls to a highly capable toddler and just hoping it wants 428 00:21:23,880 --> 00:21:26,640 to go to the moon. But Lee Chan completely rejects 429 00:21:26,640 --> 00:21:30,520 this demigod narrative, and he does it by applying 2 massive 430 00:21:30,520 --> 00:21:34,600 reality checks, 1 biological and one economic. 431 00:21:35,120 --> 00:21:37,560 Let's look at the biology first, because the arrogance of the 432 00:21:37,560 --> 00:21:40,680 tech sector often completely blinds it to the physical 433 00:21:40,680 --> 00:21:42,960 realities of the natural world. Right. 434 00:21:43,280 --> 00:21:46,400 For all the talk of neural networks and super intelligence, 435 00:21:47,040 --> 00:21:50,240 Li Chen points out that we are nowhere near replicating the 436 00:21:50,320 --> 00:21:52,600 actual complexity of biological systems. 437 00:21:53,120 --> 00:21:56,000 The scale of biological complexity just absolutely 438 00:21:56,000 --> 00:21:58,600 dwarfs our current digital architecture. 439 00:21:59,160 --> 00:22:01,840 He points out that a single human cell contains the 440 00:22:01,840 --> 00:22:05,600 equivalent of 50 megabytes of highly structured dynamic data. 441 00:22:05,920 --> 00:22:08,440 Yeah, and the human body requires 10s of trillions of 442 00:22:08,440 --> 00:22:11,880 these cells interacting in real time, chemical and electrical 443 00:22:11,880 --> 00:22:15,200 Symphony, just to function. An AI model is essentially just 444 00:22:15,200 --> 00:22:18,720 a massive statistical pattern matching engine operating on 445 00:22:18,720 --> 00:22:21,160 flat digital data. Exactly. 446 00:22:21,640 --> 00:22:24,840 It is incredibly effective. It's synthesizing the knowledge 447 00:22:24,840 --> 00:22:29,720 layer of human civilization, text, code, images, but it does 448 00:22:29,720 --> 00:22:33,040 not possess true biological cognition and it definitely 449 00:22:33,040 --> 00:22:35,560 doesn't have the ability to instantly manipulate the 450 00:22:35,560 --> 00:22:38,320 physical world. Because the economy is not just 451 00:22:38,320 --> 00:22:41,760 a digital knowledge layer. Below the knowledge layer you 452 00:22:41,880 --> 00:22:44,200 have the physical layers. You have energy generation, 453 00:22:44,200 --> 00:22:46,920 material science, manufacturing, logistics. 454 00:22:47,080 --> 00:22:48,840 Right. An AI can write a brilliant 455 00:22:48,840 --> 00:22:52,200 white paper on nuclear fusion in five seconds, but it cannot 456 00:22:52,200 --> 00:22:54,800 magically alter the physical constraints of pouring concrete 457 00:22:54,800 --> 00:22:57,120 or mining copper or building a containment vessel. 458 00:22:57,680 --> 00:23:00,920 The physical world moves at the speed of atoms, not the speed of 459 00:23:00,920 --> 00:23:03,200 light. Which brings us to the economic 460 00:23:03,200 --> 00:23:06,040 reality check, which is perhaps the most critical insight for an 461 00:23:06,040 --> 00:23:09,000 investor right now. The market is currently pricing 462 00:23:09,120 --> 00:23:12,160 AI companies using the financial multiples of the Internet boom. 463 00:23:12,600 --> 00:23:14,080 But the mechanics are completely different. 464 00:23:14,240 --> 00:23:17,080 Completely different. The Internet was a story of high 465 00:23:17,080 --> 00:23:19,680 fixed costs and 0 marginal costs. 466 00:23:20,080 --> 00:23:22,560 Once you've laid the fiber optic cables and built the server 467 00:23:22,560 --> 00:23:25,960 architecture, distributing a piece of software to 1 user or 1 468 00:23:25,960 --> 00:23:28,240 billion users cost effectively the same amount. 469 00:23:28,760 --> 00:23:30,160 The margins were practically infinite. 470 00:23:30,600 --> 00:23:33,040 But AI does not have 0 marginal costs. 471 00:23:33,240 --> 00:23:36,000 Not even close. The mechanics of AI are dictated 472 00:23:36,000 --> 00:23:38,960 by thermal dynamics and the absolute physical limits of the 473 00:23:38,960 --> 00:23:41,720 power grid. Every single time you query an 474 00:23:41,720 --> 00:23:44,880 advanced AI model, it requires massive compute power. 475 00:23:45,040 --> 00:23:49,280 It forces thousands of GPU's to draw immense amounts of 476 00:23:49,280 --> 00:23:52,680 electricity, which generates intense heat which requires 477 00:23:52,680 --> 00:23:55,720 massive amounts of water and energy just to cool it down. 478 00:23:56,160 --> 00:23:59,880 So the incremental costs of operating AI are staggering, and 479 00:23:59,880 --> 00:24:03,240 they are continuous. You do not just build the model 480 00:24:03,240 --> 00:24:05,360 once and reap free profits forever. 481 00:24:06,000 --> 00:24:08,960 You have to continually feed it gigawatts of power and 482 00:24:08,960 --> 00:24:10,840 constantly replace degrading hardware. 483 00:24:11,120 --> 00:24:14,880 So Lelu argues that because of the structural cost, financial 484 00:24:14,880 --> 00:24:17,240 gravity will inevitably reassert itself. 485 00:24:17,520 --> 00:24:19,240 Yeah. The capital markets will 486 00:24:19,240 --> 00:24:22,720 eventually demand a return on the hundreds of billions being 487 00:24:22,720 --> 00:24:25,960 spent on this infrastructure. If the enterprise applications 488 00:24:25,960 --> 00:24:28,920 do not generate enough revenue to cover the immense electricity 489 00:24:28,920 --> 00:24:32,120 and compute bills, the current valuations will just collapse. 490 00:24:32,600 --> 00:24:35,720 So we are going to experience massive brutal boom and bust 491 00:24:35,720 --> 00:24:39,000 cycles in the AI sector as the casino collides with the power 492 00:24:39,000 --> 00:24:42,360 grid. But if AI has constant 493 00:24:42,360 --> 00:24:45,320 incremental costs, doesn't that mean the current market 494 00:24:45,320 --> 00:24:48,760 valuations for these tech giants are structurally unsustainable? 495 00:24:49,280 --> 00:24:51,800 Are we just in the casino phase right now? 496 00:24:51,840 --> 00:24:55,000 Definitely. Deep in the casino face but 497 00:24:55,200 --> 00:24:59,400 amidst this boom and bust cycle, Lelu offers a profound take away 498 00:24:59,400 --> 00:25:01,480 for the listener who is sitting there worried about being 499 00:25:01,480 --> 00:25:03,720 replaced by all this because humanity. 500 00:25:03,720 --> 00:25:08,560 Has established a firm red line. We will not tolerate a man made 501 00:25:08,560 --> 00:25:11,560 God right society. Through regulation and sheer 502 00:25:11,560 --> 00:25:15,240 self preservation will mandate that AI remains a tool. 503 00:25:15,840 --> 00:25:19,880 There must always be a human in the loop to monitor, guide and 504 00:25:19,880 --> 00:25:22,680 take legal responsibility for the AI's actions. 505 00:25:23,280 --> 00:25:25,920 This completely. Flips the panic narrative it 506 00:25:25,920 --> 00:25:28,400 does. If an autonomous AI cannot be 507 00:25:28,400 --> 00:25:31,800 legally or practically deployed without human oversight, then 508 00:25:31,800 --> 00:25:35,840 the AI itself simply becomes a commoditized tool, the ultimate 509 00:25:35,840 --> 00:25:38,120 scarce resource. The entity that actually 510 00:25:38,120 --> 00:25:41,880 captures the financial value is the highly skilled human pilot. 511 00:25:42,520 --> 00:25:45,160 So if you. Have deep domain expertise in 512 00:25:45,160 --> 00:25:48,480 your field and you learn how to effectively communicate with, 513 00:25:48,800 --> 00:25:50,920 direct and monitor these AI models. 514 00:25:51,120 --> 00:25:54,000 Your productivity will just compound exponentially. 515 00:25:54,320 --> 00:25:56,600 The AI does the. Heavy lifting, but because you 516 00:25:56,600 --> 00:25:59,800 hold the keys and the legal accountability, you capture the 517 00:25:59,800 --> 00:26:01,600 rent. It is the difference. 518 00:26:01,600 --> 00:26:04,360 Between being the engine and being the driver. 519 00:26:04,800 --> 00:26:07,760 The engine produces the horsepower, but the driver gets 520 00:26:07,760 --> 00:26:09,280 paid to win the race. Exactly. 521 00:26:09,880 --> 00:26:11,880 But to produce. That horsepower, the engine 522 00:26:11,880 --> 00:26:14,680 needs fuel. And in the AI revolution, the 523 00:26:14,680 --> 00:26:18,400 fuel is the semiconductor chip. Which brings us all the way back 524 00:26:18,400 --> 00:26:19,640 to the global chess board, right? 525 00:26:19,800 --> 00:26:21,720 Full circle. We have to look. 526 00:26:21,720 --> 00:26:24,800 At how the two superpowers are actually positioning themselves 527 00:26:24,800 --> 00:26:28,240 in this technological arms race. And specifically, we need to 528 00:26:28,240 --> 00:26:31,160 objectively analyze what is happening inside China's economy 529 00:26:31,160 --> 00:26:32,920 right now because the Western media. 530 00:26:32,920 --> 00:26:36,240 Consensus often paints the Chinese economy as entirely 531 00:26:36,240 --> 00:26:38,840 stagnant or collapsing under the weight of its own debt. 532 00:26:39,520 --> 00:26:42,760 But Lilu provides this incredibly clinical, systemic 533 00:26:42,760 --> 00:26:45,720 analysis of China's deliberate economic gambit over the past 534 00:26:45,720 --> 00:26:48,680 decade to understand their. Current situation you have to 535 00:26:48,680 --> 00:26:51,800 understand the specific economic trap they were facing 10 years 536 00:26:51,800 --> 00:26:54,960 ago, the middle income trap. This is a. 537 00:26:55,120 --> 00:26:58,840 Brutal economic phenomenon. When a developing nation opens 538 00:26:58,840 --> 00:27:01,480 up, it usually achieves rapid growth through cheap labor and 539 00:27:01,480 --> 00:27:04,160 low end manufacturing. They pull millions out of 540 00:27:04,160 --> 00:27:07,360 poverty by making cheap plastic goods and basic textiles. 541 00:27:07,840 --> 00:27:09,560 But eventually. As the population gets 542 00:27:09,560 --> 00:27:11,960 wealthier, their labor costs rise. 543 00:27:12,240 --> 00:27:15,120 They are no longer the cheapest place to manufacture things, 544 00:27:15,480 --> 00:27:17,280 right? However, they haven't yet 545 00:27:17,280 --> 00:27:19,920 developed the intellectual property, the top tier 546 00:27:19,920 --> 00:27:22,320 universities or the high tech industries to compete with 547 00:27:22,320 --> 00:27:24,400 advanced economies like the US or Germany. 548 00:27:25,000 --> 00:27:28,400 So growth just stalls out and the country gets trapped right 549 00:27:28,400 --> 00:27:30,960 in the middle breaking. Through the middle income trap 550 00:27:30,960 --> 00:27:34,560 requires a massive coordinated leap up the value chain, so the 551 00:27:34,560 --> 00:27:36,480 Chinese state. Launched a highly structured 552 00:27:36,480 --> 00:27:40,000 industrial policy known as made in China 2025. 553 00:27:41,200 --> 00:27:45,360 The explicit objective was to force the domestic economy to 554 00:27:45,360 --> 00:27:48,880 migrate away from low margin assembly and dominate high end 555 00:27:48,880 --> 00:27:52,840 manufacturing green energy. Electric vehicles, aerospace, 556 00:27:52,840 --> 00:27:55,680 and, crucially, semiconductors. But. 557 00:27:56,040 --> 00:27:59,120 Migrating an entire economy of the value chain is incredibly 558 00:27:59,120 --> 00:28:01,840 difficult when your domestic tech companies are accustomed to 559 00:28:01,840 --> 00:28:04,080 simply buying the best components from the West. 560 00:28:04,440 --> 00:28:06,760 Yeah, why would a? Chinese smartphone maker risk 561 00:28:06,760 --> 00:28:09,840 using an inferior, untested domestic microchip when they 562 00:28:09,840 --> 00:28:11,920 could just buy a perfect one from Qualcomm. 563 00:28:12,520 --> 00:28:15,200 Exactly. The domestic innovators lacked 564 00:28:15,200 --> 00:28:19,000 the one thing they needed to survive a captive order book 565 00:28:19,880 --> 00:28:23,320 demand, and this is where. Luo presents a fascinating, 566 00:28:23,320 --> 00:28:26,840 counterintuitive insight. He argues that the geopolitical 567 00:28:26,840 --> 00:28:29,400 friction the trade wars initiated under the Trump 568 00:28:29,400 --> 00:28:32,720 administration and the severe technology export restrictions 569 00:28:32,880 --> 00:28:36,320 implemented under the Biden administration actually acted as 570 00:28:36,320 --> 00:28:40,080 a godsend for the Chinese high tech sector by sanctioning. 571 00:28:40,080 --> 00:28:42,120 China and cutting off their access to high end Western 572 00:28:42,120 --> 00:28:44,240 chips. The US effectively forced 573 00:28:44,240 --> 00:28:47,880 Chinese enterprise companies to buy domestic it instantly. 574 00:28:47,880 --> 00:28:50,240 Created a massive captive market. 575 00:28:50,240 --> 00:28:53,440 The revenue that used to flow to California was suddenly forcibly 576 00:28:53,440 --> 00:28:56,680 redirected into the R&D budgets of Chinese semiconductor firms. 577 00:28:56,840 --> 00:28:59,720 It accelerated their. Timeline by a decade because 578 00:28:59,720 --> 00:29:02,080 they were cut off from the global supply, it became a 579 00:29:02,080 --> 00:29:04,480 matter of national survival, according to Li. 580 00:29:04,480 --> 00:29:07,840 Liu This forced isolation has resulted in China becoming 581 00:29:07,880 --> 00:29:11,320 virtually self-sufficient in mature semiconductor nodes and 582 00:29:11,320 --> 00:29:13,640 while they are still. Restricted from importing the 583 00:29:13,960 --> 00:29:16,680 absolute cutting edge lithography machines needed for 584 00:29:16,680 --> 00:29:19,920 the most advanced AI chips, they are aggressively using their 585 00:29:19,920 --> 00:29:23,800 software caabilities to rewrite the bottleneck operating codes, 586 00:29:24,000 --> 00:29:26,840 just squeezing maximum efficiency out of the hardware 587 00:29:26,840 --> 00:29:28,560 they can produce. But this? 588 00:29:28,560 --> 00:29:31,560 Technological leap did not happen in a vacuum, and this is 589 00:29:31,560 --> 00:29:34,360 where Li Li's analysis becomes chillingly objective. 590 00:29:34,720 --> 00:29:36,720 What's fascinating? Here is that he states the 591 00:29:36,720 --> 00:29:39,520 Chinese state directed development model always 592 00:29:39,520 --> 00:29:43,840 operates on a specific duality. There is an objective and there 593 00:29:43,840 --> 00:29:45,880 is a cost. You cannot. 594 00:29:45,880 --> 00:29:48,480 Fund a multi trillion dollar transition into high end 595 00:29:48,480 --> 00:29:51,280 manufacturing without pulling capital from somewhere else. 596 00:29:51,640 --> 00:29:53,960 The state had to brutally redirect the flow of domestic 597 00:29:53,960 --> 00:29:55,320 wealth. And for the last. 598 00:29:55,320 --> 00:29:58,520 Two decades, the primary engine of Chinese domestic wealth was 599 00:29:58,520 --> 00:30:01,240 real estate. The property sector, driven by 600 00:30:01,240 --> 00:30:04,080 massive leverage and local government financing vehicles, 601 00:30:04,320 --> 00:30:08,000 absorbed a massive percentage of the nation's total capital, the 602 00:30:08,000 --> 00:30:09,800 Chinese government. Looked at that real estate 603 00:30:09,800 --> 00:30:12,760 bubble, realized it was unproductive capital that was 604 00:30:12,760 --> 00:30:16,080 starving the tech sector of funding, and they deliberately 605 00:30:16,080 --> 00:30:17,600 popped it. They implemented. 606 00:30:17,600 --> 00:30:21,560 Policies like the three red lines to restrict leverage and 607 00:30:21,560 --> 00:30:24,000 choke off capital to property developers like Evergrande. 608 00:30:24,560 --> 00:30:27,840 They intentionally triggered a massive deflationary event in 609 00:30:27,840 --> 00:30:30,000 their own housing market. The cost? 610 00:30:30,000 --> 00:30:33,240 Of achieving the technological objective was the systematic 611 00:30:33,240 --> 00:30:36,160 destruction of the real estate sector, and the collateral 612 00:30:36,160 --> 00:30:39,320 damage of that destruction was the balance sheet of the Chinese 613 00:30:39,320 --> 00:30:43,800 middle class, Li Li notes. That historically, a typical 614 00:30:43,800 --> 00:30:47,440 Chinese family held upwards of 70% of their net worth in their 615 00:30:47,440 --> 00:30:50,840 home, often highly leveraged so when the state. 616 00:30:50,840 --> 00:30:54,760 Engineered a 40% drop in real estate prices, it wiped out an 617 00:30:54,760 --> 00:30:58,680 estimated 60 to 70% of the average family's wealth. 618 00:30:58,920 --> 00:31:00,880 Let's pause and just. Think about the psychological 619 00:31:00,880 --> 00:31:04,040 impact of that. If you are a middle class worker 620 00:31:04,480 --> 00:31:07,680 and 70% of everything you have spent your life working for 621 00:31:07,680 --> 00:31:10,320 evaporates over a couple of years, what do you do? 622 00:31:10,920 --> 00:31:12,800 You exhibit. The classic symptoms of a 623 00:31:12,800 --> 00:31:15,520 balance sheet recession. You immediately stop all 624 00:31:15,520 --> 00:31:17,640 discretionary consumption. You stop buying. 625 00:31:17,640 --> 00:31:20,720 Cars you stop going out to eat and you funnel every available 626 00:31:20,720 --> 00:31:24,400 dollar into paying down debt and hoarding cash as a result. 627 00:31:24,400 --> 00:31:27,240 Domestic consumer confidence in China has been utterly crushed 628 00:31:27,280 --> 00:31:29,880 and aggregate savings have skyrocketed to an astonishing 629 00:31:29,880 --> 00:31:32,920 120% of GDP. The economy is flush. 630 00:31:32,920 --> 00:31:36,200 With Capital, but it is completely paralyzed by fear. 631 00:31:36,640 --> 00:31:39,440 This creates a. Bizarre bifurcated reality in 632 00:31:39,440 --> 00:31:42,280 the Chinese markets today because consumer sentiment is at 633 00:31:42,280 --> 00:31:45,440 rock bottom, the domestic stock market is incredibly depressed, 634 00:31:45,800 --> 00:31:48,120 but. Simultaneously, because the 635 00:31:48,120 --> 00:31:51,560 state successfully redirected capital to its objectives, you 636 00:31:51,560 --> 00:31:54,160 have Chinese companies dominating global supply chains 637 00:31:54,160 --> 00:31:57,160 in electric vehicles, solar infrastructure and battery 638 00:31:57,160 --> 00:31:58,840 technology. You have world. 639 00:31:58,840 --> 00:32:02,200 Beating highly profitable tech monopolies trading at dirt cheap 640 00:32:02,200 --> 00:32:05,440 single digit valuation multiples because the domestic investors 641 00:32:05,440 --> 00:32:07,320 are just too terrified to buy equities. 642 00:32:07,720 --> 00:32:09,640 Furthermore, this. Dynamic radically alters how 643 00:32:09,640 --> 00:32:12,720 China approaches AI development. Because of the US sanctions on 644 00:32:12,720 --> 00:32:15,680 advanced hardware and the pressing need to improve 645 00:32:15,680 --> 00:32:18,960 industrial efficiency, the Chinese AI philosophy has 646 00:32:18,960 --> 00:32:22,360 diverged wildly from Silicon Valley in the US. 647 00:32:22,360 --> 00:32:25,680 The immense capital raised is chasing the frontier, trying to 648 00:32:25,680 --> 00:32:28,800 build the AGI demigod, but in China. 649 00:32:28,800 --> 00:32:32,640 The focus is hyper pragmatic. They're asking how can we deploy 650 00:32:32,640 --> 00:32:36,160 smaller, highly specialized AI models directly into enterprise 651 00:32:36,160 --> 00:32:40,360 software and manufacturing floors today to reduce costs and 652 00:32:40,360 --> 00:32:42,240 increase yield. It is the difference. 653 00:32:42,240 --> 00:32:45,880 Between a research lab trying to invent a completely new color 654 00:32:46,280 --> 00:32:48,960 and an engineering firm trying to invent a machine that paints 655 00:32:48,960 --> 00:32:53,160 a house twice as fast and again. As we analyze this, we have to 656 00:32:53,160 --> 00:32:56,320 make it explicitly clear Lizar is not offering a moral 657 00:32:56,320 --> 00:33:00,160 endorsement of this system. He is acting purely as an 658 00:33:00,240 --> 00:33:03,320 economic diagnostician. He is laying bare. 659 00:33:03,320 --> 00:33:06,240 The brutal efficiency and the devastating human collateral 660 00:33:06,240 --> 00:33:08,000 damage of a state planned economy. 661 00:33:08,200 --> 00:33:10,440 But as an investor? Or simply as an observer of 662 00:33:10,440 --> 00:33:13,080 global forces, you have to understand these mechanics. 663 00:33:13,400 --> 00:33:16,120 You cannot navigate the Chinese market or understand global 664 00:33:16,120 --> 00:33:18,840 supply chains without understanding the deliberate 665 00:33:18,960 --> 00:33:22,520 state engineer destruction of the property sector and the 666 00:33:22,520 --> 00:33:24,640 forced migration to high tech manufacturing. 667 00:33:25,160 --> 00:33:27,600 Here's where it gets. Really interesting because if 668 00:33:27,600 --> 00:33:29,880 you are sitting there listening to this, working in mid level 669 00:33:29,880 --> 00:33:32,880 management or running a small business, you have to look at 670 00:33:32,880 --> 00:33:35,480 the sheer scale of these macro forces and ask yourself a 671 00:33:35,480 --> 00:33:37,840 terrifying question in the context of. 672 00:33:37,840 --> 00:33:41,080 Your company, your industry or your national economy? 673 00:33:41,800 --> 00:33:46,880 Are you positioned as the objective of the future or are 674 00:33:46,880 --> 00:33:50,240 you the expendable cost in a transition because the? 675 00:33:50,240 --> 00:33:53,160 Macroeconomic flywheel does not care about your feelings. 676 00:33:53,440 --> 00:33:55,320 You have to navigate it rationally. 677 00:33:55,880 --> 00:33:58,600 Which brings us to the. Final and most vital layer of 678 00:33:58,600 --> 00:34:02,560 Lilu's framework, we have covered the inescapable global 679 00:34:02,560 --> 00:34:06,800 supply chains, the casino of financial markets, the physical 680 00:34:06,800 --> 00:34:11,080 realities of AI and the brutal mechanics of state planned 681 00:34:11,080 --> 00:34:13,400 economic transitions. But the question. 682 00:34:13,400 --> 00:34:17,320 Remains how does an individual build a successful compounding 683 00:34:17,320 --> 00:34:20,679 life amidst this level of chaos to build that foundation? 684 00:34:21,199 --> 00:34:23,800 Lilu first clears the deck of false solutions. 685 00:34:24,159 --> 00:34:27,040 When asked about cryptocurrency as a potential safe haven from 686 00:34:27,480 --> 00:34:31,400 Fiat inflation or state control, he dismisses it with absolute, 687 00:34:31,560 --> 00:34:34,159 unvarnished bluntness. He literally calls it 688 00:34:34,159 --> 00:34:38,400 fundamentally bogus. His reasoning is rooted in a 689 00:34:38,400 --> 00:34:40,760 deep understanding of monetary history. 690 00:34:41,199 --> 00:34:44,080 A currency only functions as a reliable store of wealth and 691 00:34:44,080 --> 00:34:47,239 medium of exchange if it is backed by a state entity with 692 00:34:47,239 --> 00:34:50,800 the monopoly on violence and the power of taxation to enforce its 693 00:34:50,800 --> 00:34:53,760 value right. Crypto lacks this fundamental 694 00:34:53,760 --> 00:34:58,120 enforcement mechanism, therefore it is not a true currency, nor 695 00:34:58,120 --> 00:35:00,800 is it a productive asset like a business that generates actual 696 00:35:00,800 --> 00:35:04,600 cash flow in his view. Its primary utility is just 697 00:35:04,600 --> 00:35:08,040 facilitating illicit activity and society would be better off 698 00:35:08,040 --> 00:35:11,280 banning it completely. It is a pure manifestation of 699 00:35:11,280 --> 00:35:14,200 the casino we discussed earlier. So if crypto is. 700 00:35:14,200 --> 00:35:16,800 Out and the broader macro environment is treacherous. 701 00:35:17,600 --> 00:35:19,120 Where do you actually put your faith? 702 00:35:20,000 --> 00:35:22,680 You put it in the. Oldest, most reliable tenets of 703 00:35:22,680 --> 00:35:26,880 value investing expanded into a complete philosophy of life Lee 704 00:35:26,880 --> 00:35:30,920 Lou leans heavily on the concept of the margin of safety and the 705 00:35:30,920 --> 00:35:33,080 circle of competence the circle of. 706 00:35:33,080 --> 00:35:35,680 Competence is widely misunderstood. 707 00:35:36,400 --> 00:35:38,360 People think it means knowing a lot of things. 708 00:35:38,960 --> 00:35:42,120 In reality, the size of your circle is completely irrelevant. 709 00:35:42,760 --> 00:35:45,120 The only thing that matters is knowing exactly where the 710 00:35:45,120 --> 00:35:47,000 perimeter is. If you have a massive. 711 00:35:47,000 --> 00:35:50,360 Intellect, but you consistently operate just outside the edge of 712 00:35:50,360 --> 00:35:52,720 your knowledge. You will eventually be destroyed 713 00:35:52,720 --> 00:35:55,600 by someone who understands that specific niche better than you. 714 00:35:55,840 --> 00:35:57,880 But if your circle of. Competence is tiny. 715 00:35:57,960 --> 00:36:01,800 Say you only deeply understand the logistics of regional waste 716 00:36:01,800 --> 00:36:06,040 management, but you strictly refuse to ever invest or operate 717 00:36:06,040 --> 00:36:09,120 outside of that tiny circle. You will compound wealth 718 00:36:09,120 --> 00:36:12,720 steadily and safely as Charlie. Munger always said fish where 719 00:36:12,720 --> 00:36:16,200 the fishers are, Find the games where the competition is weak 720 00:36:16,200 --> 00:36:19,000 and your specific knowledge gives you an undeniable edge. 721 00:36:19,600 --> 00:36:22,160 But Lelu. Takes this financial concept and 722 00:36:22,200 --> 00:36:25,400 elevates it to human relationships, the ultimate edge 723 00:36:25,400 --> 00:36:27,760 in life. The true secret to navigating a 724 00:36:27,760 --> 00:36:31,920 chaotic world is building what he calls a seamless web of 725 00:36:31,920 --> 00:36:34,040 deserved trust. A seamless. 726 00:36:34,040 --> 00:36:37,280 Web of deserved trust. It is the most powerful 727 00:36:37,280 --> 00:36:39,480 compounding mechanism in human existence. 728 00:36:40,120 --> 00:36:42,800 But building it? Requires overcoming our own 729 00:36:42,800 --> 00:36:45,200 biology. The human brain is 730 00:36:45,240 --> 00:36:49,800 evolutionarily wired for short term 0 sum thinking right in a 731 00:36:49,800 --> 00:36:51,360 hunter. Gatherer environment. 732 00:36:51,360 --> 00:36:54,680 If I take your food, I win and you lose. 733 00:36:54,840 --> 00:36:58,400 That 0 sum instinct is exactly what drives the casino behavior. 734 00:36:58,800 --> 00:37:01,360 We want the quick hit. We want to extract value today, 735 00:37:01,360 --> 00:37:04,120 even if it completely compromises our reputation 736 00:37:04,120 --> 00:37:07,560 tomorrow, Lulu jokes. That actively choosing the win 737 00:37:07,560 --> 00:37:11,320 win path over the course of a lifetime requires a mutant 738 00:37:11,320 --> 00:37:12,880 genome. A mutant genome. 739 00:37:13,360 --> 00:37:15,240 Yeah, it. Requires a mutant level of 740 00:37:15,240 --> 00:37:19,360 patience to be continually contrarian, to base your 741 00:37:19,360 --> 00:37:23,000 decisions purely on logic rather than the hysteria of the crowd, 742 00:37:23,640 --> 00:37:26,480 and to commit to playing long term games with long term 743 00:37:26,480 --> 00:37:28,400 people. The mathematics. 744 00:37:28,400 --> 00:37:32,080 Of compounding, whether it is compounding money and knowledge 745 00:37:32,080 --> 00:37:35,560 or relationships, they rely on one fundamental rule. 746 00:37:36,040 --> 00:37:38,720 Do not suffer massive losses. Do not interrupt. 747 00:37:38,720 --> 00:37:41,440 The compounding process if you lose 50. 748 00:37:41,440 --> 00:37:45,600 Percent of your capital. You need a 100% gain just to get 749 00:37:45,600 --> 00:37:47,760 back to where you started and the exact same. 750 00:37:47,760 --> 00:37:51,160 Mathematics apply to your life. Do not lose the knowledge you 751 00:37:51,160 --> 00:37:53,680 have acquired by becoming arrogant and rigid. 752 00:37:53,960 --> 00:37:56,720 Do not burn your trusting relationships for a short term 753 00:37:56,720 --> 00:37:59,440 advantage. Do not squander your physical 754 00:37:59,440 --> 00:38:00,720 health. Think of a. 755 00:38:00,720 --> 00:38:04,480 Transactional 0 sum life like keeping cash under a mattress in 756 00:38:04,480 --> 00:38:08,120 a high inflation environment, it constantly depreciates. 757 00:38:08,480 --> 00:38:11,800 You have to wake up every single day and hustle, manipulate and 758 00:38:11,800 --> 00:38:14,240 fight just to stay in the exact same place. 759 00:38:14,440 --> 00:38:18,800 But a life built on a seamless web of deserved trust that acts 760 00:38:18,800 --> 00:38:21,640 like compound interest. When you are known as someone 761 00:38:21,640 --> 00:38:24,880 who operates strictly within their competence, who creates 762 00:38:24,880 --> 00:38:28,760 value for others and who never extracts an unfair share, the 763 00:38:28,760 --> 00:38:31,680 world just starts bringing opportunities directly to you, 764 00:38:32,320 --> 00:38:34,640 your reputation. Compounds while you sleep. 765 00:38:35,080 --> 00:38:36,720 Your network protects your blind spots. 766 00:38:37,400 --> 00:38:39,520 You don't have to fight the hurricane alone because you have 767 00:38:39,520 --> 00:38:42,440 built a structurally sound cathedral true value. 768 00:38:42,440 --> 00:38:46,200 Investing in Li Li's framework transcends the stock market. 769 00:38:46,800 --> 00:38:50,360 It is an overarching approach to living a rational, productive, 770 00:38:50,360 --> 00:38:54,040 and ethical life that adds net value to human civilization. 771 00:38:54,400 --> 00:38:56,880 It is the. Daily discipline choice to walk 772 00:38:56,880 --> 00:39:00,480 past the flashing lights of the casino and put another brick in 773 00:39:00,480 --> 00:39:02,520 the wall of the church we have covered. 774 00:39:02,520 --> 00:39:06,400 Immense difficult ground. Today we trace the invisible, 775 00:39:06,400 --> 00:39:09,520 inescapable roots of the post Cold War global market. 776 00:39:09,880 --> 00:39:13,440 We examine the exact mechanics of the Mexico loophole and the 777 00:39:13,440 --> 00:39:16,000 cultural bottleneck of the semiconductor supply chain. 778 00:39:16,360 --> 00:39:19,280 We redefined wealth. As a percentage claim on global 779 00:39:19,280 --> 00:39:23,040 purchasing power, we applied the physical laws of thermodynamics 780 00:39:23,040 --> 00:39:26,120 and biology to shatter the AI demigod narrative. 781 00:39:26,520 --> 00:39:28,600 We unpacked the. Brutal state engineered 782 00:39:28,600 --> 00:39:31,600 destruction of China's property sector to fund a technological 783 00:39:31,600 --> 00:39:34,960 leap, and we anchored all of this chaos and the mathematical 784 00:39:34,960 --> 00:39:38,080 certainty of deserved trust. It is a master. 785 00:39:38,080 --> 00:39:41,160 Class in separating the visible noise from the invisible 786 00:39:41,160 --> 00:39:44,880 reality, and to leave you with one final thought to Mull over, 787 00:39:45,320 --> 00:39:48,360 Li Liu noted A fundamental dichotomy in how people interact 788 00:39:48,360 --> 00:39:50,720 with the world around them. You have to decide if the 789 00:39:50,720 --> 00:39:54,440 market, and by extension of the world, is there to instruct you 790 00:39:55,120 --> 00:39:58,120 or if it is there to serve you. Are you letting the? 791 00:39:58,120 --> 00:40:01,040 World, instruct your anxieties exactly. 792 00:40:01,320 --> 00:40:04,400 When the stock market drops, or when the geopolitical news is 793 00:40:04,400 --> 00:40:08,440 terrifying, do you allow that external noise to instruct your 794 00:40:08,720 --> 00:40:11,640 internal emotional state? Do you change your behavior 795 00:40:11,640 --> 00:40:15,760 based on the panic of the crowd, or do you cultivate enough 796 00:40:15,760 --> 00:40:18,440 internal discipline and knowledge that you can use the 797 00:40:18,440 --> 00:40:22,200 market's irrationality to serve your own long term compounding? 798 00:40:22,960 --> 00:40:25,000 It is. The ultimate diagnostic test for 799 00:40:25,000 --> 00:40:27,680 the modern era. We started this deep dive by 800 00:40:27,680 --> 00:40:30,640 talking about how illusory the map of the world truly is. 801 00:40:31,080 --> 00:40:34,120 The geopolitical lines are fake, the economic landscape is 802 00:40:34,120 --> 00:40:38,240 incredibly complex, but the map of your own character and the 803 00:40:38,240 --> 00:40:41,720 perimeter of your own competence is entirely under your control. 804 00:40:42,200 --> 00:40:44,200 So take a. Hard look at the boundaries of 805 00:40:44,200 --> 00:40:47,360 your knowledge today. Figure out exactly where your 806 00:40:47,360 --> 00:40:50,200 edge is and refuse to step past it. 807 00:40:50,680 --> 00:40:53,480 Determine whether your daily actions are securing building 808 00:40:53,480 --> 00:40:56,680 permits for a cathedral or just pulling another lever in the 809 00:40:56,680 --> 00:40:58,440 casino. Thank you for joining. 810 00:40:58,440 --> 00:41:01,240 Us on the steep dive, keep analyzing the mechanics beneath 811 00:41:01,240 --> 00:41:04,480 the headlines, keep building that web of trust, and keep 812 00:41:04,480 --> 00:41:06,040 compounding. We'll see you next time.