00:00 Speaker A
You talk about Gold’s long history. Obviously, the history of something like Bitcoin is much shorter, but does it have the potential to have that same staying power?
00:10 Speaker B
I think it does. You know, Gold has this bid from global central banks today. Um, and you know, I don’t think you have the same bid from Bitcoin or digital currencies yet. So you’re going to see a lot more volatility uh in in that. But I think personally, I think that the Bitcoin trade is too large to ignore. Um, everybody that’s been calling bunk on Bitcoin the last decade has been proven wrong. So I you know, I wouldn’t own it in the same degree that you own gold, but I do think Bitcoin has a place in a diversified portfolio.
00:46 Speaker A
Okay, gotcha. So you got your 5% gold, you have something less than that, a Bitcoin. That leaves a lot of white space for other stuff. Um, so how are you thinking about what that mix should look like right now?
01:00 Speaker B
It’s a great question. You know, one of one of the issues today in global markets is people are, you know, people are doubting the the viability of the 6040 model. Uh I think you need to own the 60 in equities. You know, absolutely you’re going to have volatility there, but over the longer term you want to be leveraged to global growth. So you need to own that that 60%. The question is around what do you own in place of this 40? And with all of this currency printing, government bonds, corporate, we don’t think you’re being paid a risk premium to own corporate bonds today. So it’s about diversifying that 40% that you would normally own in fixed income. We think, if you can find it, some high quality real estate makes sense. Um, you know, we do own some fixed income. We do own shorter dated fixed income, municipal bonds, cash uh for liquidity. You know, we we manage ultra high net worth portfolios at twin focus. We’re really focused on managing client’s risk and liquidity. Uh so we do own, you know, fixed income in that capacity. But we think gold, digital assets, commodities, broader-based commodities. I think you can’t ignore this AI trade and you look at the ancillary trades on AI such as uh copper, you know, other infrastructure plays. I think, you know, I think you should be looking at a broader commodity basket in addition to just gold.
02:22 Speaker A
And what about private assets because there has been such a push over the past few years to people like your clients to get into private equity, private credit. Do you think it is worth the fees and the relative liquidity that you’re giving up to get into those assets?
02:44 Speaker B
I think it’s got to be buyer beware. Um, it it kind of scares me to think about retail being able to buy private equity. A private equity has had a phenomenal run over the last 20 years. Uh, venture has had a phenomenal run over the last 15 years. You know, is it too late? You know, as you suggest, the fees are very significant. Uh, you have limited to no liquidity. You know, you have maybe liquidity in a secondary market, but you’re going to pay for that. So I think it’s buyer beware. I I do think and we own billions of dollars worth of private assets, but they were put on in a different environment and we’re very selective of how we’re looking at private equity, certainly private credit. I’m very concerned about private credit. I know it’s been a hot dot trade the last couple of years, but I think it’s very very much buyer beware there as well.
03:41 Speaker A
Well, just let’s just linger on that private credit concern for a little bit. There have been some alarm bells raised about it. Um, what is your specific concern and and what could sort of trigger problems there?
03:57 Speaker B
You know, as mentioned, I don’t think you’re being paid a risk premium to be in credit. and at twin focus, we try to avoid long lines. You know, we don’t want to be in very crowded trades. We take a more of a contrarian view. Uh the risk premium is just not there and you know, after you pay, you know, two and 20 to a manager, I I really have a tough time justifying that trade.