Lessons from Investing Through 8 Bubbles w/ Dave Levine

**Speaker A:** Welcome back to the Strange Water podcast. Thank you for tuning in for this week's conversation. Crypto is an industry that lies at the convergence of many of the world's titanic forces. Finance, technology, sovereignty, and many more. But there's one in particular that hits very close to home for nearly every person who wakes up every morning thinking about blockchain personal investing. Whether or not you're here for the tech, the realities of using and building on the world computer require at least some financial exposure to ethics. And so in this industry, where each media cycle can print or burn fortunes, we can all get lost in dreams of striking it huge on a great investment. But these dreams are deceptive because they provide a thin mirage over a shockingly dangerous minefield of financial risk. If you aren't careful, you can easily meander into cataclysm. Today's guest is Dave Levine, an investor who has survived that minefield many times and is here to share the lessons he learned from stepping sometimes around and sometimes directly onto these mines. Dave shares the lessons he Learned investing through 8 Bubbles and his forward looking thoughts on crypto and web 3 with near daily videos on his YouTube channel, Davelovine.com Today, Dave is going to tell us his story and share with us the lessons he learned from each of these bubbles. As you'll hear us discuss. I do not believe it's possible to be taught these lessons from YouTube or from this podcast, but I do believe it's possible to hear other stories to give you the context and the tools you need to find when you find yourself in a similar situation. And so, with that in mind, please pay close attention to what Dave learned over the course of eight Bubbles and maybe you can learn it all just in one. One more thing before we begin. Please do not take financial advice from this or any podcast. Ethereum will change the world one day, but you can easily lose all of your money between now and then. And especially in an episode of this nature, I just want to overemphasize. Do not take financial advice or form an investment strategy based on what you hear in this conversation. These are just the personal stories and the self reflections of Dave and myself. All right, let's get started. Dave Levine, thank you so much for joining me on the podcast. **Speaker B:** Glad to be here. **Speaker A:** So, you know, before we get started with really anything, I would love if you could just kind of give the audience a little bit about who you are, your background, and why you believe in this space. **Speaker B:** All right. I mean, I don't know how far you want me to Go back. But I lived in Japan for a year in 1990, right after college. I was like 21. And I had been thinking at the time that there was something about religion and government and communism, you know, that I didn't love and I should say some governments. I used to think the America was great, you know, the democracy and free markets I liked. And I. And I remember trying to think what. Why are there these things that don't seem related, that I like and don't like, but somehow they are. Anyways, I had this epiphany while living in Japan, which. And long story of why I figured it out there. But it was. I had this epiphany that decentralized systems, when there's a centralized system and a decentralized system competing, the decentralized one will grow faster and become larger if they're both competing to do the same thing. I saw this in so many places. So that's why the free market would do better than the central planning, why the democracy would do better than a dictatorship, why, you know, the religion which was telling you what to do would be more constraining anyways. And that philosophy made all the difference. Now I didn't realize, I think as big how big of a deal it was for me at the time because I did many other things that wasted time. Now I learned that's my thing. I have good insight into when something is decentralized. I understand the concept better than a lot of people. So I got on the Internet when the web started in 95. I immediately was like, you know, this is before people even heard of the web. **Speaker A:** Yeah, actually. Well, that's a like. Because my mind is being blown right now to hear that your journey into crypto started in 1990, which is not only pre satoshi, it's pre Internet. And so can you talk about what was going on in Japan that like really made that click? You said it was a long story, but like, let's get into it. **Speaker B:** It was more of a political. So I was in Japan and people aren't religious there in certain. The way we think of the word religious. But they had this tea ceremony. And the tea ceremony to me was like a religion you have. Like, I don't know how familiar you are with the whole tea ceremony is like certain clothes and you sit a certain way and they pour. Someone pours a tea and then you hold it like this. And there's all these rules that you follow. And if you do this, it's great. And I was like, what's the difference? Between that and being a Hasidic Jew, you've got 613 laws, and if you follow them, it's good. And these laws are handed down and it wasn't from God. But in Japan, though, that came from whatever. And then in their government, where they came from this dictatorship and I saw they had. I just thought Japan would be just like America because they had the same legal structure and the same laws and the same freedoms, but they didn't live as free. And I was able to see more the difference. And I had been thinking about this even before Japan. So it wasn't anything to do with technology. It was just, you know, it didn't. That this was in 90. This is even before the Internet. I mean, the Internet existed. **Speaker A:** This is like PCs are starting to get relevant. **Speaker B:** Yeah, I was always, also, I was always interested in. I wanted to have my own business. You know, my, My father had his own business. His father had his own business. My other. My mother's parents, they had what. They had one of their own businesses, a band, you know, bringing music to weddings and. As well as a regular job. But anyways, and that was always growing up. So I always wanted to have my own business. I was looking for. And I believed that profits is a moral crusade. Like if you. That I believed in free markets, that if you make money, it's because you're creating something of value, you're adding to the world. Profits is just the language that tells you. And I didn't think, oh, you're trying to make money, you're bad. The only way to make money, I mean, you can make some money by being a crook. But I do believe, and we see this in reality, the people who make the most money are the people creating the greatest things. I mean, Amazon is amazing, you know, Tesla is amazing. **Speaker A:** I would much rather be Brian Arms Armstrong than sbf, let's put it that way. **Speaker B:** Right, Exactly. And, and, and again, SPF had a good, good year or two. And, and there's other reasons to, you know, we can go into the whole, you know, I believed it. And so I was like, I want to have my own business. And so then I was attracted to technology because one of my best friends, he made like a million dollars when he was 23 because he wrote some software. I had other friends who wrote software and they made money and it was clearly exciting and new. And so I was attracted to that. And then, you know, I saw the Internet and I, and I did strike me this decentralization thing. But I remember when I saw the web, I immediately saw. But we, you know, some. Many of your viewers, maybe, and certainly many of my viewers I know were too. They never had the experience of seeing the web the first time. Like, it was always there. But one of the things that happened, and it reminds me of what's going on now with chat GPT. When you saw the web, you were immediately like, oh, I see where this can go. Everybody had an idea. I could put my business card on here, which was like, wow, you know, instead of calling the 800 number, I could enter the tracking number through the webpage. Like, and those seem trivial, but at the time it was, wow, you know, the restaurant could have their menu. You know, it's like, on the thing, like, I wouldn't. I could see the menu. Like, there was no way to see a menu. Right? It was like, what? **Speaker A:** Yeah, and I think. I think, like, there's something pretty profound about, like, entering these spaces while they're so, like, primordial and changing. And. And it's so easy to look at, whether we're talking, like, early web, like, 1996 web, or, you know, like, shitcoin season, or any of these spaces, and think, like, this is a mess. Like, the only thing that's getting attention is the most outrageous, most silly, like, most stupid stuff. And, like, how can anyone think that this is serious, this is a fad, like, and you just, like, it's so easy to get stuck on what's in front of you. And, like, miss, like, that what's in front of you is a reflection of, like, how early and, like, how unexpressive these things are. And so I think, like, everyone approaches these technologies, is faced with these technologies at some point in their life. But there's, like, something different between the guys who look at this stuff and say, like, ugh, disgusting, racist. Pepe is like, I need to get out of here, versus, like, the guys like you and me who say, ugh, disgusting, racist Pepe is like, I need to get in here. **Speaker B:** Well, and I think it's also more. A lot of. There's a hundred things, and I look at the one that's like, oh, a better finance, better borrowing, lending. Right. Better car, you know, better payment systems, better privacy, like, all of these things, better security, and those are hidden within all of these other things. And then a lot of people who aren't really looking deeply, they don't see those. They only see the things that's in the, you know, the entertainment news channels, which is the stupid stuff, because that gets more clicks and on the Internet. When it started, one of my things when I. So I immediately thought this is okay. This is gonna decentralize the spread of information. Like I understood that other people did. And then I saw and I didn't even know what I could do. I was just like, I gotta figure out how to start a business on this thing. Right? And. But the thing then, it wasn't as much that it's stupid. There was a little of that, of course, you know, cats and sex are the only things that anyone will ever do. But I remember talking to my parents and you know, my father, he's a business guy and he looks at profits and he's like, okay, you know, and let me get to the punchline before I, you know, is. So I started a mall on the, on the web, which was the thing to do in 95. You know, just have a bunch of different stores and we called it a mall. We didn't think Amazon, which is one store with everything. No, you're going to have all of these stores connected and you draw a picture of a mall and you click on the store you want to go in, Right? **Speaker A:** Yeah. And for those of you that are, I was born in 91, so I have like the, the in between view of what you're talking about and where we are today. But like the, the Internet was different back then, right? Like the. We didn't have search engines, we had web portals. Like Yahoo wasn't a search engine, it was like a portal. In the same way that like we didn't really have like these mega stores, we had like, like malls or portals. **Speaker B:** Well, the mall was popular for a few years and then people started to figure out just put everything in one store, right? **Speaker A:** No, no, just point as being like this is like. Like you're saying we are seeing the same things in Ethereum and in web three that have happened in web two and in web one. And like it is like really, really important to understand that, right? **Speaker B:** It's. Yeah, there's, there's the similarities of. But anyway, so I started them. I started this. I had all these stores and some. I made some sales. Most of them I made none. No, you know, no traffic, nobody cared. But the one store that had the most consistent sales profits and tracks traffic was selling sex toys. So, you know, listen, you know, it shows me, you know, so then I started phasing out the ones that didn't do anything. And then eventually I had just a couple businesses I was setting up people as credit card merchants, which, which I met some people made a Lot more money than me with credit card merchant business, you know, whatever. But anyway, so I did the toy thing and then my other thing was people were like, oh, can you build me a toy store? You know, people would have some like porn site and they would want a toy. And I was like, if I build all these stores and I gotta maintain them all. And I thought of, you know, they used to have this 900 numbers. I thought of the fir. I created one of the first affiliate programs and I made it a white label affiliate program that was on the Internet in 96. I did that and. Cause I thought, well, I'll just make one store and let people customize it. And that took off. That was my best business for the all the whole time I actually owned the domain. Sex toy.com, which, you know, people, it's very. Everybody thinks that is a big deal. But actually it was. The affiliate program was really my business. So. **Speaker A:** So I think just to like pause you on here, I actually have a funny story with a funny run in with your industry. Like I'll bleep out the name, but are you familiar with. **Speaker B:** No. **Speaker A:** A guy that I met when I was in college and like in computer science and like in this entrepreneurial business. And I met him just like in a taxi on the way to a ski town and he was explaining to me basically a very similar story as yours where he found the Internet. He got super excited and interested and then essentially like got successful doing this, but like really was struggling with like the stigma that came along with his success. And so you know, I think while like sex toy stuff is like even particularly like stigmatic or if that's a word or whatever, but like I think that is like particular. It is relevant to like the things that we're doing, right? Because like especially during bear cycles and especially like when there's do kwons or SBFs like it, it can be pretty shameful to be in this business. And so I wonder if you have any reflections from a thing that's much more serious. Like what is. How does that work? **Speaker B:** I had this. One of my other epiphanies other than the decentralization. Decentralization was that I thought business was an art form, right? And everyone, the business, you have the guys in the suits, that's who makes money. And then the artists, they hate money and profits and they're. But they're cool and bro. And creative. It's like, why isn't a business a creative process? And I, I had this attitude going into it, like I'M an artist. And, and so, you know, when I started, I actually like bleached my hair blonde. Like it had spiky. Like I was like, I looked like. **Speaker A:** I was in the 90s. **Speaker B:** I look like I was in a band, in a bad band. And I looked terrible. But most of those pictures are hopefully destroyed. But so I, and I also believed, you know, the philosophy of business is that you need to do something different. And I knew about that. Oh, they'll say you aren't good. So I was like from an early age sort of almost attracted to or not afraid of, oh, you're doing something stupid and that's bad. I mean, I would think about it. Is it actually bad? And in hindsight, there are some negatives to the commoditization of sex. And I did some things, you know, I did get in some trouble, which is a whole nother story regarding, you know, thinking it's everything's fine when everybody says it's a bad idea. Sometimes people are right. But as regarding business, it is good to do that. And then I was proven right enough times, like you can't have a store with no inventory. I had just, I just outsourced my dried in drop shipping and I had the most products with no inverter. When are you going to get a warehouse? When are you going to get a warehouse? I'm like, I don't know, I'm looking at the numbers. I have more inventory than anybody and I'm not spending any money, you know. And so I was used to this. And honestly it was worse being in Boston in the 90s selling sex toys. Like even in Boston now it's fine. Everyone thinks sex toys are cool now. Like, but it was, it was hard. So I was used to it. And then I did well and then it became totally accepted and then I became cool, you know, and so I had a number of things. And so then when I got into crypto again, you know, I had that negative. But I'm like, that's my thing. Like, this is what I do. **Speaker A:** So before we move into like how you got into crypto, while we're still on the sex toys, I am currently confident that you had problems with payment processors because of this business. **Speaker B:** Yes. In fact, you know, I'm sure you've heard of choke point 2.0. I. It's choke point 3.0. This existed in the 90s and I used to go crazy because. So there were, there's high fraud things out there. I know. And it was with the video there were a Number of things. But my business specifically, and toys in general, it doesn't. It didn't have a high fraud rate. And then I did a good job. **Speaker A:** Yeah, you create a product, and then you sold a product. It's, like, kind of hard to do fraud in that. In the same way that the Internet allows. **Speaker B:** And with the room, there were things you could do to check and to, you know, whatever. We did our thing, and my fraud rates were always well under 1%, not to mention, look at my profit statement. Look at my. You know, and it was like, I get paid up front, shipped to the customer. I have no inventory. And then I'm working with this one credit card company for years. I've got years of statements showing I've never had a problem. Like, and I would. And then I. One of those companies. So, first of all, yes, it was hard to get it. And then I had one company, and they started overcharging on things, making mistakes. And I called up. I'm like, guys, what's going on? I mean, I didn't. **Speaker A:** This. **Speaker B:** Why are you billing me this? That. And the numbers were getting. They were screwing me. And I said, what's going on? They said, yeah, we'll call you back. I got a letter. You're gone within 30 days. You have to leave. And I had to find a new. I'm yelling at people because they'd say, sorry, you're high risk. Okay. There's no financial class. Tell me. And then I got down to it where it's not financial risk. And I would force them to say it's political risk. Okay. But the other thing I learned is the way they do it is they. At first, the salesperson or whoever you talk to is like, yeah, it's great. Fill out all the gap. Oh, we love you. Yeah, we take your business. Yeah. And then. And then you submit, and then they don't get back to you. And they don't get back to you. And on. Oh, yeah, everything's great. Don't worry about it. Just, like, listen to Caitlin Lawn talk about what happened. Oh, everything's great. Everything's great. And then finally one day, you're like, guys, am I getting the merchant account or not? And then it's this super rude. We don't do business with people like you. **Speaker A:** And I'm like, why would you ever imagine you're gonna get this account? **Speaker B:** And just like, yeah. I'm like, you could have told me this six months ago. Like, fine. And actually, it's not fine. And I used to get upset. So yeah, that was a thing. And that was the, and then There was the 1.0 where they, they just kept taking it to another level where they really took it to a, levels right after 9 11. **Speaker A:** I remember when, yeah and I, I, so I have like much closer interactions with the banking industry than most because I worked in the treasury on the corporate side but in the Treasury Department of a Fortune 100 company. And so like half of my job was literally just dealing with like kyc, like getting customer information specifically because of regulations out of 9 11. And we're talking about like this 150 year old beer company would need to go get contact information for a 75 year old distributor because of what happened on 9 11. Like, you know, it's madness. It's total madness. And I don't, that's actually, let's not even go down that rabbit hole. But I just like, I'm a huge believer that in order to be in crypto now before it's legal, like while people are still going to jail just for touching like tornado cash, right. Like you need to have like been absolutely betrayed by the financial system in some way and like realize that fairness, equality, meritocracy, all these things that you know, we've been told if, if you follow then you'll achieve like it doesn't really work out like that in the real world. And so yeah, I've had, I've had. **Speaker B:** More, you know, PayPal. In fact I remember when PayPal started and they're like, they're sending money by email and then they've taken your credit card to hold money. You can't do that, that's illegal. But they had, I don't know who they had high up and they were able to keep it going long enough. And then I had a PayPal account. And then the same thing one day, like, sorry, we don't do business with you. I never had a problem, never did anything wrong. And they just said count closed. You can get your money back. You can get, you can, we'll release your money in six months. Like six months. I've never had a charge back. And my average order, like it was insane. And then I also had a thing with the bank one time, this was taxes. But I moved and then I just, something didn't file. One day I go to my bank account and $25,000 was removed. I'm like, what the hell? And then they're like, and then I, and they explained it, it was like, well I didn't file, so I moved. And so I Did. I wasn't in the ta. I wasn't I supposed to file something that said I owe zero. I didn't file it. So they assumed that it was something based on past numbers, so they just took 25,000. They said, oh, that's fine. We'll give you your money back in six months. I said, you just took it five minutes ago. I just proved you it's fine. It was. Also, my address had changed and they didn't update it, and so they sent the warning to another. And I was just like, these people do not give a shit about me or a business. I mean, and then in California, it started getting crazy. **Speaker A:** Yeah. No, man, I can go all day. Like, just six months ago, I had a moment where I was yelling at my financial advisor at Wells Fargo, saying, I always realized the purpose of banks was to screw poor people out of their money. I just didn't realize that you guys considered me poor as well. So, anyway, we can go all day on this. Let's move to crypto. Like, so talk to me about, like, when was your moment? When did you first, like, notice this thing? And when did you realize, like, this changes everything? **Speaker B:** So, you know, I saw Bitcoin. I was probably around when it ran to, like, it was pretty early as maybe around hit $30. It was in the news and I looked at it and I was always a very, you know, I don't chase stupid stuff or whatever. I saw it and then I thought, okay, oh, so it's a. It's for payments. I'm like, okay, are there. Is anyone using it to buy anything? No. So, okay, I'm not gonna waste my time right now. But I. I was interested. It's like, well, if it does someday. Anyways, then in 2014, it started running and I. And I thought. And then I understood the. The scarcity, the digital gold thesis. And I was like, oh, okay. Plus, people were sort of using it. It looked like it was going to be used and that. And I saw it run to a thousand, but I knew enough then to not buy it when it goes from 100 to $1,000 in months. **Speaker A:** Man, you are smarter than me on my first cycle. Good for you. **Speaker B:** Yeah, well, that wasn't my first bubble. I think that was number six. So I had the scars. I lost plenty of money. **Speaker A:** Okay, well, we'll get to the scars of the bubbles in a moment. **Speaker B:** My education. I wish I went to, you know, Harvard. I could have gone to several. Gotten several MBAs for less price than I lost in markets learning. So. **Speaker A:** So you knew better than to buy at a thousand. **Speaker B:** I waited. I said, and then, you know, I got in it, and I. But anyways, my thought was, oh, this is decentralized money competing against centralized money. My philosophy and what. You know, And I said, okay, I'll make a. I can make a little bet on this. Nothing huge, but, you know, it was. It was a position. Like, I would own any stock, and I have some of it, you know, at. I bought some at 500. It went down. Bought some at 400, went down. Bought some at 300, went down, bought some at 200. I was like, oh, great. Probably more 200. Remember when it felt like when it was probably 250, then it fell to 175. I still remember the day it felt like 20 in one day to 175 after. I'm sitting in this thing underwater for a year. I'm like, there's a chance I'm wrong here. I think I bought enough. I'm done. That was. And that was the last draw. I always seem the last drop. So anyways, and then I held it. Didn't pay attention. But then in 2017, it started running, and I've never seen anything go up like this. Like, I've been in stocks forever. I have some winners, a lot of losers, whatever this thing, you know, $250 forever for me, seemed forever for a year or more all of a sudden. And when it crossed a thousand, and it's every day with the 10, you know, 10, you know, we know what the bubbles. It's like, are you kidding me here? What. What is this? And then I was like, I. Okay, so what's going on? I start looking into it. I'm like, oh, wait a second. There's a thousand more tokens. What. What is this? And I remember, too, what I thought. One of the things I just found fascinating was, to me, it was just like a thing. And there were, like, two news sites dedicated to bitcoin. I'm like, this is not a stock. This is a. A movement. Like, they have two news sites, not just one news. I mean, it's like. I was like, so. And then, meanwhile, I had left stop working at the toy business, and I was looking for something to do. And then I said, you know what I want to do? I want to study this stuff. I'm gonna. What's. What's the number two token? I'm going to learn what it is. What's the number three token? **Speaker A:** Yeah. Before I let you get onto the number two token. And because I Want to separate this conversation into two parts. This, what I want to get into now is like, I want to. You paid dearly for the knowledge that you've gained over as you say in your show, the last seven or eight bubbles that you have experienced and is like what you're sharing with your audience now. But like the first half of this conversation, I would love to just like try to like approach that and figure out what you learned and like how you apply that to crypto today. In the second half of this conversation, I would love to kind of have the discussion of like the journey from Bitcoin to ethereum to alt L1 to L2s and like how like you are coming at this from a investor standpoint, but like you're also investing in technology. And so I'd love to like talk to you about like how you kind of think about capability versus narrative versus price and all these things. But let's start with the bubble. So you have huge kind of like liner in your show is that you have survived. I keep hearing seven. **Speaker B:** I start the show with, you know, entrepreneur and investor. Who's in. Who's survived? Who's it. Sorry, who's invested through eight bubbles. **Speaker A:** Yes, eight. I thought it was seven, but I've, I've for. Anyway, so can we start off by what are the bubbles? **Speaker B:** Okay, I'll try to do quick. I wrote these out on a sub. **Speaker A:** I'll count them out for you. **Speaker B:** Okay. I've got in the 70s delivering newspapers. The gold bubble. I learned what happens and you know, you probably don't want. Do you want just what they are or the lesson learned or how much detail here? **Speaker A:** If you have, if you have a good lesson learned for each one, let's hear it. But otherwise, like no need to talk on gold bubble. **Speaker B:** 12 year old almost literally finally convinced my parents and my father said no, but we almost bought it the day it peaked. Price Never recovered for 30 years, didn't cost me anything. Learned that lesson was like, whoa, watch out for the hype. Right? **Speaker A:** Probably the moment you want to invest is the moment it's over when you. **Speaker B:** Were a dumb kid especially, right. US Savings and loan bubble. My parents, you know, my father had a business vending, you know, soda, snacks, coffee. All of a sudden there him and his. And my, you know, my mother and their friends condos up in the. In New Hampshire made money, you know, was because of the savings alone. And then it was awesome. So they did more condos. The bank ventures took those. So these things when, you know, leave your Normal thing to chase. The new hot thing can be good, but don't, you know, stop before it's too late. **Speaker A:** Don't put all your eggs in one basket then. **Speaker B:** I lived in Japan in 1990, the year the beat the bubble peaked. What the year, the year it popped. And I remember I majored in economics. Japan's going to take over the world and everything and just the markets, it's unbelievable. Everything's amazing. But I saw when I lived there that that wasn't true. And so I thought, oh, so it's overvalued. So it's going to crash. Never crashed. Went down for 20 years, right? And so I learned that something is overvalued. It's good to, you know, know the long term, but don't. The timing and prices aren't always correct. Immediately it take. Can take time.com bubble, sort of. Same lesson in reverse. Alan Greenspan, you know, the market is irrationally exuberant. He said in 1996, okay, maybe it was priced too high. I think it was at that point too expensive. Continue to go up four more years, including more than a thousand percent for many things. Eventually crashed and went close pretty much to that price in 96 that he said it was too expensive. You know, so that taught me, you know, because. And the other lesson too was I thought only the stupid stuff. I had friends buying stuff that wasn't even real stocks and fake. And Stu, now I don't, I don't get into that, but I do do on Cisco and Intel and Microsoft. And I sold 20% of my position at the high. That 20% ended up being worth like 10 times more than my 80% a couple years later. So I, I learned how much this stuff goes down, kind of, but I didn't. So then the housing bubble, the, that, the, the leverage. So I was like, I've been through at this point, I've been through four bubbles. I know what's going on. Everyone's like, oh, housing is overvalued by 20%. 20%, that's nothing. I was in the dot com bubble a minute ago. Went down 80%. What are you guys worried about? Well, if you only have 10%, you only own 10% of the value because you got a loan on it and it goes down 20%. You're now negative. That's worse than losing 80% of something you own. Losing, you know, now you're negative. So I learned that debt can destroy you. And of course, I was taking on some debt at the time too. To be a moron. Of the stock market. That was my. That was a very expensive. **Speaker A:** Yeah, let's be clear. Every single lesson learned ever is learned with your own blood, sweat and tears. Like, that's just how humans work. You can't be taught. You need to learn. **Speaker B:** Well, I, Some of it can. And that's why I have my YouTube channel to try to help and, and you know, hopefully our show here. You too, we're trying to save, you know, trying to save one moron at a time. And I, I call people morons because I'm yelling at myself. **Speaker A:** Yeah, I'm definitely the biggest moron I know. But I mean, I think to reconcile like your viewpoint in mine is like, I really don't think that you can teach people stuff. I do think that you can help them understand what's going on and that so that they can learn much faster. And maybe what took you eight bubbles might take somebody like one fall on their face. **Speaker B:** Well, we hope so. Yeah. **Speaker A:** So anyway, continue please. **Speaker B:** Then we've got the bitcoin bubble. That one, I told you about that. Where. And I. What I learned there was what I call bubble math. Now many people believe. And I'm not sure you're familiar with this math, but so you know, okay. And I, and I knew this bitcoin, it could go down, he figures 70 to 80%. It goes down right now I'm pretty closer to 80. I would be pretty sure. At the time I thought 70%, maybe it. Whatever. So once it fell more than 50% and it can go fall to 70, it's only got 20% more to go. Right. So, you know, and you know, so maybe it won't or whatever. And I'm going to buy down. But we're close. Turns out that if you do the math, you know, so 50% is from 1,000 to 550%. You're measuring from the thousand to so to fall to 75%. From 50 goes to 250, that's another 50. Bottom line is 82% off is three 50% drops. And I didn't, I didn't, I didn't know that. **Speaker A:** I think like, even more basic than bubble math is, like, people are really bad at percentage math, right? So like here's like a little brain teaser. Don't even bother to do the math. **Speaker B:** Right. **Speaker A:** But like if you have $100 and then I give you 5% more and then take away 5%, are you gonna have more or less than $100? **Speaker B:** That's so funny. I know it's not the same. And I'm like, I literally have to like do the math in my head. **Speaker A:** Well, first of all, thanks for even helping me more with my point, but the answer is you're gonna have less than $100. Now flip it. Let me say that like I take the 5% first and then give you 5%. Are you gonna have more or less than $100? **Speaker B:** You're gonna have less. Right? **Speaker A:** And so like that's so counterintuitive to the way that we think where it's like either way you're going to end up with less. Whereas like that's. **Speaker B:** Oh, actually. Oh, I see. That's funny that it's less both ways. **Speaker A:** Yeah, and it's, it's funny. **Speaker B:** Yeah, I wish they taught that. That's a good another because yeah, to be able to, they should teach that at a young age so it becomes intuitive. One of Buffett's things was that he studied this investment stuff when he was so young and deeply that it's intuitive. Like for me, I literally have to get out pen and paper every single time with these friggin fractions and percents. **Speaker A:** No, but see you're, you're, this is like a, you know, the meme with the left curve, right curve, have the same take in the middle curve are, is like the dumb take. Like by forcing yourself, like by knowing your limitations and knowing that you don't have an innate ability to do this, you don't get stuck in the like fallacies and in like the counterintuitives, you just do the math and if it works, it works. And like again, the easiest way to understand this is like, okay, if I have a hundred dollars and I want to increase it to 200 or 500 or 10,000 or 100 million, like by a percent increase, I have the space between 100% and infinity to fit to express that if I want to go down to any number, I only have the space between 100 and zero to express that number. And so the lower numbers below 100% are going to need to express like so much more than the larger numbers. Like this isn't how we think of this at all. **Speaker B:** Right. And you know, that's interesting. So there's probably some good math. One of the things I talked a lot in my videos is, you know, everyone's always looking for how much to go up and they're not thinking about the other part of the equation is how much could it go down? And that is, it's so expensive to get killed, you know, and it's like, you're better off having several whatevers and a few winners than to have some winners and some getting killed like. And I'm thinking, but there's some math behind. There's probably a better way to express it than for me. It almost feels like a gut. **Speaker A:** Well, let me, let me respond to your gut and let me pull you back to the dot com bubble because you'll get this. All the children listening might not. But what is the number one like poster child for like the most absurd, overvalued, silly.com company? Pets.com. **Speaker B:** Okay. I mean I have so many. I didn't know. **Speaker A:** I know, I know. **Speaker B:** I had a friend in this company, I can't remember the name of it, but they were delivering door to door. You could order 75 cent piece of candy and they delivered it in an hour. **Speaker A:** Okay, that's funny. No, no, but pets.com, right. So it, it got like a, it raised hundreds of millions of dollars at billion dollar valuation. It was like, it went, it IPO'd at the peak of the bubble and then like literally within like two months it was down 80% and it was dead before the year was over. Number one investor of that company, can you guess who it is? **Speaker B:** No. **Speaker A:** Jeff Bezos. **Speaker B:** Oh, that's funny. **Speaker A:** And so like at the same time as like you need to like be very careful in bubbles and like in these exuberant moments and when you're not paying attention, like the way venture capital works is like you put out like many bets knowing that like because you're so far out on the risk curve, most are going to fail, but the ones that succeed like vastly outweigh the, the, the losses. And like now we're in very tricky territory because that's a hard right. **Speaker B:** I mean that is the risk management thing. But I, Yes, I mean I know that and I do have some stuff that could. Although, you know, another topic is how I think, I think what I'm in. And I'm not sure exactly what you're doing with your investing, but there's apparently a term for it, liquid venture. It's like venture capital, but everything's liquid. You can get in. These things were invest, these tokens are like series A, series B investments. But you can get in at any size, get out at any size. And so I don't have to wait till it goes to zero. I can get out. And so, and there are those risks. I mean any of these. Yeah, I own Frax. I love it. That thing's got that risk reward. I mean who knows what's going to happen that could moon USDC could become, you know, who knows. And I'm not, I shouldn't pick on Frax. What else do I own? Snx. I mean all of these things could, could have that catastrophic failure. But I think I'm thinking more about the math when you balance. **Speaker A:** No, yeah, that's exactly my point. I like literally I'm, I, I've only lost money in this industry I joined in 2021 so like my cost bases are okay. **Speaker B:** So your education has moved quickly. **Speaker A:** Well yeah, so don't listen to me on anything at all. Especially when we're talking about like how to build a portfolio. But I was just queuing off of kind of what you're saying is that like bubble math is weird because like you have to understand that like if you're in an industry where like you have like 10,000x gains but also like to zero like very quickly, like it risk reward becomes about like it's a very different mentality than about like, like assessing risk and you know like long term forces and these kinds of things. And so I don't have answers for any of it. But like what you learned in the bitcoin bubble like is not a trivial thing. Like bubble math is different than regular math which is different than financial math. **Speaker B:** Okay. Then the, so that was bitcoin bubble. That, that was 2014. Then the I called it crypto bubble you could say was led by Ethereum. But that was, oh that's when I finally really learned about this risk management. Because one of the tokens I liked was Stellar, which my thing I only like 3 I liked Bitcoin, Ethereum and Stellar. I, I played with other things but it really, that's what I put. And so my thing was has it launched? Is it decentralized? Because no one was using anything. Has it launched? Is it decentralized? And I feel like there was another thing. But anyways Stellar was one of the only things that actually launched. Oh, and is anyone using it? They were, that was the, those were the only three that satisfied that criteria and Sharon and so Stellar I got in at under 2 cents. Within six months it was at 90 cents. Okay. I've never, I talk about never seeing something go up so fast and it became like a big percent of my not, never mind the crypto portfolio which I started small. I don't advise people putting a lot of money in but if you put it in and you make it. So I made some in bitcoin in the last month. Then I, you know Diversified a little with some Ethereum, and then the Stellar. Now it was a decent amount of money, and it was just Stellar was like a real amount of money. And I remember talking to somebody who was just like, well, you know, sort of talking about risk management. You need to respect market cap. He's just saying, I mean, that thing you need to understand can go down a lot more, you know, than Bitcoin and obviously your stocks and your home, you know, and understanding that risk curve. And I always understood that, like what you're saying, how you learn, you can learn, but you don't really learn. I understood it's further out on the risk curve, but the numbers were so extreme that I really learned how much did it go up? How much did I make in a short amount of time? And then it started falling. Fortunately, I figured I learned that in time. And then I learned this idea, which I, you know, I talk a lot about on my videos, where you, you, when you gotta look at all the stuff you own, what percent of your portfolio is it and does it make sense? Like, I loved Stellar at the time. Now in 2018, I, you know, made my video. I've given up on this thing no longer. I wish them luck, believe me. And I love the. I hope it does great. And, and I'm not saying it's going away. We can talk about Stellar if you want. But anyways, I did get out of it, but I loved it at the time. And when I realized I need to sell some, it wasn't because I don't like it. It wasn't because something changed with the business, with the fundamentals. It was just risk management. And how big of a bet do I want to put on this thing that just went up 3,000% in six months? Right. You know, and so to look at investments like that, you know, I mean, I could go on and on about how to. I don't know if you want another exam, just. But like with, with ETH. You know, in 2019, with Ethereum, I was like, I really, I'm like, I really believe in this thing. And then, well, really, in 2020, I was just like 10% of my net worth in Ethereum was like, okay, that's a good bet. At 10% of your net worth in one thing is a big bet in general, in this hot. In this riskier thing with theorem, that's a big bet. At the peak of the bubble, if you started with 10%, what. What is your percent? So now I still love Ethereum. Nothing's changed. But if I thought 10% was big two years ago. Should 50%? What is 50%? Is that too big? And okay, it's the same thing but it just went up a thousand percent in two years. So you know, do. Is that the size of a bet I want to make? Not to mention I see the central bank pulling money out like so I'm, I need to reduce risk. I'm not selling it. I'm not theorem. And then it was, it felt at that everyone was laughing at me because I thought at 10% position in Ethereum then in 2021 everyone's telling me I'm a moron because I'm trying to sell down to 10%. And when I say trying to sell down, it's funny when the market's going up in your dollar cost average selling and you sell, you know, 3% and then the next day it goes up by you know, 8%. And now I, I have more than I did before I sold it, you. **Speaker A:** Know, so sorry, I think we might have just transitioned into the last bubble there, right? **Speaker B:** Yes, sorry. That was risk management. I learned in the crypto bubble. And then the last bubble was our last 2021, the everything bubble. Which honestly finally the first time I really feel like I, I just, I'll just say it, I killed it. I mean I really, I saw what was happening. I, I got in. I'm even. I like felt I knew, you know, I knew when we were in the boring low, I knew to accumulate. I saw D5 early. I lined up all my stuff when it was riding. I made a video when bitcoin cross, you know when it started running and it passed like 5,000. I made a video that said it's gonna, it's gonna go to 50 and higher. And when it crosses 50 that's when you're going to want to start selling and that's when all the morons are coming in. I said that like a year before it happened. And then I, and then In February of 2021 I said nobody listened to me when I said that what I just told you. And nobody's gonna listen to me when I say the dollar cost average eth over 3,000. And we had eight months to do that. And so. And that's, you know, accumulating stablecoins. And then again getting back in here at the boring low, you know, June of 2022 started going in and it's all looked great. It granted, you know, I understand that the next bubble, you know, something tells me I don't know it all and I will have more lessons to learn. But that one, you know, I guess the only thing I learned is that being right doesn't get you more viewers on YouTube. **Speaker A:** Yeah, let's not talk about content because that's just like, literally the route to insanity. But the. I think, I think a perfectly valid lesson to learn from a cycle is like, if you, like, stick to, like, your lessons and you stick to your plan and you, like, stay measured and, like, you execute, like, it works out, you know, and that's not to say that the next cycle is going to go as well, and it's not to say that the next cycle is not. But, like, that's a lesson that, like, shit works, right? **Speaker B:** I remember because you feel you can't. I couldn't help but feel in 2021, it's like, I love Ethereum. I think it's taking over the world. It's like selling over 3,000. Is it going to go higher? Yeah. Well, then why are you selling? Because it's probably going to be lower in two years. Why would it be lower? I don't know. All I know is I've lived through eight bubbles and it's going to be lower because that's how this works. It doesn't make sense to me. I don't know why. And now in hindsight, it's like, oh, obviously it was going to go down, you know. Well, why would it go over 10,000 next time? I don't know. All I know is I've been through 10. All these bubbles. **Speaker A:** No, so, I mean, I found your content. I. I mean, I know it was like, right around when I started tweeting, which was June of last year, and I think it's because you reached out to me and, like, that's how I found your content. And I remember at the time, like, just to be clear, I had been in crypto for less than a year at that point and I had placed my, like, the vast majority of my bet up to, like, at eth above 4k and like, put too much money in ohm and, you know, just like first cycle stuff, right? Yeah. And so I, you know, and what I was. I was seeing your videos, like, as we were watching Do Quan Tumble, right? And I remember just like everything you're saying just, like, wasn't even really registering to me. It was just like, nice to have crypto content, honestly, like, and, you know, so you. Last year you were doing a video a day, and so just like every morning I was listening to it and like, I don't know if at what point what you said or even if it was anything that you said, like changed how I think about this. But like, it's just, it's so much easier and better to just like pick your numbers, like buy below, sell above, or like pick your time frames or whatever. And then just like have a plan and go into it, you know? And so like you talk about this, the boring low, and then I for like, I forget what your term is for the top is and boom, busted. **Speaker B:** Boring love. **Speaker A:** Yeah. Yeah. And so I don't know, I mean like for me, how I've internalized that is I wasn't really buying at the bottom, unfortunately, because I wasn't listening to you. But like, I pick my number, it's 2k. Like I'm willing to buy below 2k. And then above 5k is like when I'm going to start selling out. And like, I don't worry about this stuff anymore. **Speaker B:** Well, and just someone just commented on a video and talking about that and one my thing, he was like, oh, eth under 1500. I was like, no, eth under 1500 means you've killed it in this boring low. Because I mean, we'll see when it's over. I mean the boring globe could go on for two more years and end up being. You had eight months to buy it at a thousand. We're not done here at this point. That's what I've been thinking for a while. Is under 1500. But over 1500 is still. I still, I think I like to call it when the morons come, which is when everybody wants it, everybody's getting in more. But it's going to be lower in two years and that's when Eth crosses 10,000. Now that means, and what I said to this person, I mean, honestly, you're okay to get into eth up to 5,000. I just, I wouldn't wait for 5,000. Like if you want to get it at 5, it's okay. And selling at 5, just according to the laws of bubbles. And keep in mind all of these stupid things. One thing I always say, and this used to be true for me, that as soon as you notice a pattern, the pattern stops happening. Like it doesn't have to keep following the pattern, but the pattern would say you go up about 10x from the boring low. And this boring low here, if the average costs around 1500, that means it goes to 15,000. And, but, and I don't like peaks anyways because the peak is two minutes, it hits one price and no one Sold it at that. Like, what. What price do you have eight months to sell at? **Speaker A:** Well, to be clear, I did buy ETH at $4,800. So. **Speaker B:** Yes. That you're only able to do that in your first bubble. Because I love finding. Yeah. The new I. Every once in a while I meet people and then I'm like, okay, do me a favor. When you. It's the people now who are so negative, but they. So, like, I get this feel. I'm like, oh, do me a favor. When you start buying, call me. **Speaker A:** Yeah. No, And I think, I think there's so much more just like, content and discussion to have around, like, the psychology of bubble. And look like everything goes back. Like, I really appreciate that you just shared all the lessons from each bubble, but to me, like, the most important one is the one that you shared in 2017. Or, sorry, with the bitcoin thing, which is like, you have to understand that like, bubble world is a different world, you know? And like, I think that that's very much about, like, bubble math, but that's also very much about just like bubble mentality. And you, like, there we are waiting for like, the next group of like, idiots to come in. Like, that is unfortunate. Like the. And you, when you say morons, you mean it because, like, you call yourself a moron and I'm a moron and like that. But I, I mean this in this kind of like, disappointing and like, pessimistic ways. Like, we really are waiting for like, the next group of retail who doesn't understand what's going on to come in. **Speaker B:** And it's not all negative because it's also just the optimism. We're optimistic because you see that future and then especially if you're younger, you don't have a good time frame. And you're also, again, optimistic. Like, I don't care if it takes. I used to be like, I don't care if it's 10 years. I'll hold for 10 years. Because I just, I'm a long term thinker. And then like, after four years, you're like, we had 10 years yet, like, what? You know? **Speaker A:** No, you're right. And look, at the end of the day, like, I am the guy who bought ETH at 4800, but also like, I'm here, you know? And like, you, you need, you need people to come. And unfortunately, a lot of that is like, grandma's money, who's going to put into this stupid app that's going to directly take your money and put it into Anchor Protocol and like, give it to Do Kwon's Yacht company. Yeah. And look, I think ultimately this is like a reflection of how desperate our, like, society and world has become. And like, the reason people are willing to like, just throw money at things that have, like, are very sketch but think they might make them rich is because, like, they're desperate and they need resources. **Speaker B:** But I don't know if that's new that I, I. Yeah, that's always been the case. And the only thing that the difference with crypto is that everything is priced. And you can see it. AI right now is 100. If, if there were tokens for every AI idea, they would all be ridiculous and will be priced lower in two years. Like, totally agree. **Speaker A:** And like, this is not a crypto problem. Like, we can go back to the Dutch tulip thing that, you know, we all learned about at some point where like tulip bubble in the, like 1600s. Literally, you know, like, it can happen for anything. It's just what happens when people are desperate. **Speaker B:** And I think also with the pricing, I think, you know, there's a bubble coming to a theater near you soon in that, you know, we used to think, people used to say, you know, crypto is very volatile, but when it becomes more accepted, the volatility, volatility will calm down, you know, like fiat markets. But I'm starting to think, no, I think fiat markets are going to become more like crypto. Like, this volatility just seems to be, I think it's going to increase. I mean, look at what's gone on with Treasuries. And we've seen it with stocks were more volatile than crypto last year. And I'm not sure that's going away. So get, you know, strap on your seatbelts and learn how to multiply with percentages. **Speaker A:** Yeah, no, look, this all goes like, I mean, you have the best story, right, to really understand what's happening now because, like, so much of the transformation that you saw going on in the 90s, which began your journey, was like the breaking of like the multipolar world and into this like one market system. And like the one market system in this, like, massive globalization. And like, what we had before was like tailor built to like, as things mature and grow, they become more stable. And like, say what you will about that system, but we have left it like, we have fully, fully left it beginning in 2008 and then fully in 2020. And it is like, I totally agree with you. I think the world is going to look more like crypto and not the other way around. **Speaker B:** And maybe someday we get to a new low volume world. But you know, but the next bubble I'm not seeing things. Calm down. **Speaker A:** Yeah. Well again, great callback to bubble math. So with that, Dave, thank you so much for just spending the time and sharing so much of the wisdom that again you very dearly paid for. Before I send you off, can you just share where the audience can find you? **Speaker B:** So I've got the old man domain davelvine.com that links to. It's got a link tree where I have my Twitter which is day at Dave Levine 0 the number 0 comp. I've got my YouTube which is Dave Levine and I can't put a dot so I spelled D O T C O M. I'm slowly writing a little bit and I've got this bubble essay on my sub stack which davelvine substack.com oh and then you know, in my YouTube description there's always a link to Discord. It must be on my link tree too. I hope you've got a discord where people make suggestions for videos. I'm just doing this literally. I mean it's fun. I literally, I literally spend time too with people I do zoom calls with like help people with their career. Like I don't charge money. I enjoy it. It gives me something to do. I'm in mostly retired now hold my job is HODL is not selling ETH until it crosses 10,000. Then I gotta you spend 20 minutes selling some. So I enjoy trying to help people. I love the feedback. I like getting questions and also people believe it or not have helped me and I remember spotting. I can't remember exactly what article you wrote that that when I hit you up I was like this guy's smart, I want to get him on my show. And then you were too busy for me. But I came on your show. So you know now please you hit. **Speaker A:** Me up while we were. Well I was too busy just getting punched in the face Do Kwon. And now you came on my show when we're also bored we like are thinking about like what real touch grass activities we can do. So it's. I would love to come on your show. Completely different era. **Speaker B:** Okay, great. I don't even remember what it was that you you talked about that I love anyways. But I'm. Yeah, I'm watching your stuff. What is your website? I'm not trying to just plug you, but you mentioned I didn't know you had a website. **Speaker A:** Oh no, honestly, I just When Elon bought Twitter and things became just so, like, volatile on that platform, I was afraid I would lose my content. So I just went and got all my threads and then put it on a website that's called Inevitable eth.com. and it's basically just like a Wikipedia of Ethereum research. So, yeah, that. It's like. Like deep dives into dank sharding, into, like, stateless clients, into all that kind of stuff. So if you're interested in that, you're pretty. **Speaker B:** Well, you're more wonky than me. **Speaker A:** Yeah, no, I mean, I'm a big believer in, like, the Ethereum core protocol in the world computer. And, like, I've almost, like, on an intellectual level, like, I've almost lost interest entirely in, like, defi and in NFTs, because, like, there's no space left after Ethereum. **Speaker B:** Right. That's fine. I've never got the NFTs. Don't. I think that's for the cool kids. That's. **Speaker A:** Yeah, yeah, yeah. For the zoomers. All right, Dave, thank you again so much. And, yeah, look forward to. Hopefully. I know you're not doing daily anymore, but I look forward to seeing you on YouTube. **Speaker B:** I do. I do a fair amount. I'm going for three week. I've been doing more than that, so stay tuned and I hope you get back into watching every day. **Speaker A:** Yeah, no, I mean, you post them, I'll watch them. **Speaker B:** Thank you. **Speaker A:** All right, have a good one. Thank you so much. **Speaker B:** See you.