2025-05-30 00:05:34
To investors,
We got news yesterday that a federal court has thrown a major wrench into President Trump’s economic plan. CNBC writes:
“The U.S. Court of International Trade on Wednesday blocked steep reciprocal tariffs unilaterally imposed by President Donald Trump on scores of countries in April to correct what he said were persistent trade imbalances.
The ruling deals a potentially serious blow to the Republican president’s economic agenda and ongoing efforts to negotiate trade deals with various nations.”
Bloomberg shows that not all tariffs are being struck down by this ruling, but a very large percentage of them will be negated.
The legality of the tariffs will be highly debated and I anticipate the case will eventually be heard by the Supreme Court. Regardless of the outcome over time, there are two repercussions of the court’s ruling. A large part of the market will see this decision as a removal of majority of the tariffs, which means we will see capital flood back into assets as investors gain confidence that the worst economic pain is behind us.
Another large part of the market will have a different read on the tariff court ruling. They won’t gain confidence, but rather they will see this development as a return to uncertainty because of the appeals process. This second group won’t allocate capital back into the market until there is finality in the court cases, which could take weeks if not months.
My guess is that self-directed retail investors will accelerate their investing pace, while institutional investors will continue to be cautious. This ultimately boils down to a key difference in how these two groups think about financial markets. Retail understands that the dollar is going to be debased, bear markets have been outlawed, and there will be a persistent bid for stocks for decades to come. Institutions not only question those three assumptions, but they are more focused on delivering their quarterly and annual return numbers.
Retail is investing for profits, institutions are investing to keep their AUM.
The crazy part about this situation is that both groups may be right. Stocks have become very expensive, according to Barchart, who points out the Warren Buffett Indicator has officially hit 193.5%, which surpassed November 2021 as the second most expensive time for stocks in history.
They also show that the 30-year Treasury yield has risen above 5% again, which is not what sophisticated investors want to see.
Retail investors are playing a different game though. Global Markets Investors writes “According to Bank of America, hedge funds sold ~$1.5 billion equities on net in 4 weeks, the most since the 2022 bear market. Institutional investors sold ~$2 billion. Retail investors bought nearly $2 billion, the most ever.”
So while retail and institutions battle it out in the markets, the new court ruling around tariffs will only further complicate the situation. But I don’t think anyone is going to change their mind. Retail will keep buying. Institutions will keep selling. And the world will keep spinning.
Only time will tell who is right and who is wrong. And the beauty of capitalism is that the market will be the ultimate referee.
Hope you all have a great day. I’ll talk to everyone tomorrow.
- Anthony Pompliano
Founder & CEO, Professional Capital Management
🚨 READER NOTE: We launched a new product this weekend to help investors manage their financial lives. The product uses AI models to track your net worth, analyze your portfolio, answer any questions you have about your finances, and make suggestions on how you can improve. You can add public stocks, private investments, crypto assets, cars, houses, investment properties, collectibles, and any other assets you own.
You can text, email, or call the CFO too which is really cool. The CFO, called Silvia, now has more than $1.8 billion in assets connected on the platform.
You can sign up for the product completely free here:
https://www.cfosilvia.com
John Pompliano and Anthony Pompliano discuss bitcoin, bitcoin conference in Las Vegas, bitcoin treasury companies, macro environment, inflation, timeless investing principles, and how this all impacts your portfolio.
Enjoy!
Figure Markets – Bitcoin backed loans so you can buy more Bitcoin with your Bitcoin or earn 8% lending cash to HELOC providers! Learn more about Figure Markets and their Crypto Backed Loans!
Bitwise Asset Management - Crypto specialist asset manager with more than $10 billion client assets and more than 30 crypto solutions across ETFs, index funds, alpha strategies, staking, and more. Learn more at bitwiseinvestments.com
Maple Finance - Maple enables BTC holders to earn native BTC yield. Learn more at Maple.Finance!
Xapo Bank: Fully licensed bank that integrates traditional finance and Bitcoin. Earn up to 3.9% interest in BTC. Spend globally with a debit card that gives 1% cashback in BTC. Borrow up to $1M instantly with Bitcoin-backed loans.
Simple Mining offers a premium white-glove Bitcoin mining service. Want to grow your Bitcoin stack? Visit Simple Mining here.
Gemini - Invest as you spend with the Gemini Credit Card®. Issued by WebBank.
Core - Earn trustless Bitcoin yield. No bridging. No lending. Just HODLing. Begin Staking Your Bitcoin.
BitcoinIRA - Buy, sell, and swap 75+ cryptocurrencies in your retirement account. Pay less taxes. Earn up to $1,000 in rewards.
BitcoinOS - The operating system for bitcoin applications powered by zero-knowledge technology. Check out @BTC_OS on twitter to learn more.
Polkadot is a scalable, secure, and decentralized blockchain technology aimed at creating Web3. Innovation leader, making it a preferred choice for big names.
You are receiving The Pomp Letter because you either signed up or you attended one of the events that I spoke at. Feel free to unsubscribe if you aren't finding this valuable. Nothing in this email is intended to serve as financial advice. Do your own research.
2025-05-28 21:41:00
To investors,
The administration is making a significant pivot in their economic policy. We just watched them shift from a focus on cutting government spending to an obsession with growth at all costs.
This strategic change is coming at an interesting point in time. Creative Planning’s Charlie Bilello highlights “the US Money Supply hit an all-time high in April for the first time in three years. After a brief hiatus, money printing is back.”
Put money printing is not the only reason why timing really matters right now. Global Macro Investor’s Julien Bittel explains how there is a very high correlation to the late 1990s:
“The current equity correction is tracking almost perfectly with what we saw back in ‘98, when markets got hit by the Russian debt default and the LTCM hedge fund blow-up.
Currently, these two periods are 97% correlated...
When sentiment gets max bearish and positioning is extremely one-sided, just as liquidity conditions start to improve – which then feeds through into the economic data with a lag – the market scrambles to reprice. That’s often where V-shaped recoveries are born.
Since the April lows, the S&P 500 is up 12%, the Nasdaq 100 is up 16%, and Bitcoin is up 26%.”
While the market recovery from the late 1990s may give investors peace of mind, it is important to understand “U.S. stocks are now more expensive than nearly any time in modern history. But here’s the real problem: U.S. households are holding more stocks than ever before. This combo is rare and risky.”
The Nasdaq is trading at a P/E ratio of 26 and the S&P 500 is trading at a 21x P/E ratio. Not exactly cheap from a historical point of view. And investors are bullish to say the least. Mike Zaccardi shows that the Goldman Sachs Social Media Economic Sentiment Index is nearing the all-time high.
So if everyone is bullish and the money printer is getting turned back on, things could get very crazy from here. And that is just normal assets like the S&P or Nasdaq. Certain individual stocks are poised to accelerate higher as retail investors take larger positions, but bitcoin may be the granddaddy of them all.
We know bitcoin is the asset most sensitive to global liquidity thanks to the great analysis by Sam Callahan and Lyn Alden. But now Vivek4Real’s data is also showing us that bitcoin balances on exchanges is hitting a new all-time low.
But it is not just the exchanges. Quinten Francois sees a rapidly decreasing amount of bitcoin available on OTC desks as well.
So fewer and fewer bitcoin are available for sale at the same time that central banks are firing up their money printers. More fiat chasing fewer coins. That means we have to see bitcoin’s price rise to accommodate everyone. We have seen this a few times in bitcoin’s history but it never gets less exciting.
The next few months should be fun. Hope you all have a great day. I’ll talk to everyone tomorrow.
- Anthony Pompliano
Founder & CEO, Professional Capital Management
🚨 READER NOTE: We launched a new product this weekend to help investors manage their financial lives. The product uses AI models to track your net worth, analyze your portfolio, answer any questions you have about your finances, and make suggestions on how you can improve. You can add public stocks, private investments, crypto assets, cars, houses, investment properties, collectibles, and any other assets you own.
You can text, email, or call the CFO too which is really cool. The CFO, called Silvia, now has more than $1.8 billion in assets connected on the platform.
You can sign up for the product completely free here: https://www.cfosilvia.com
John Pompliano and Anthony Pompliano discuss bitcoin, bitcoin conference in Las Vegas, bitcoin treasury companies, macro environment, inflation, timeless investing principles, and how this all impacts your portfolio.
Enjoy!
Figure Markets – Bitcoin backed loans so you can buy more Bitcoin with your Bitcoin or earn 8% lending cash to HELOC providers! Learn more about Figure Markets and their Crypto Backed Loans!
Bitwise Asset Management - Crypto specialist asset manager with more than $10 billion client assets and more than 30 crypto solutions across ETFs, index funds, alpha strategies, staking, and more. Learn more at bitwiseinvestments.com
Maple Finance - Maple enables BTC holders to earn native BTC yield. Learn more at Maple.Finance!
Xapo Bank: Fully licensed bank that integrates traditional finance and Bitcoin. Earn up to 3.9% interest in BTC. Spend globally with a debit card that gives 1% cashback in BTC. Borrow up to $1M instantly with Bitcoin-backed loans.
Simple Mining offers a premium white-glove Bitcoin mining service. Want to grow your Bitcoin stack? Visit Simple Mining here.
Gemini - Invest as you spend with the Gemini Credit Card®. Issued by WebBank.
Core - Earn trustless Bitcoin yield. No bridging. No lending. Just HODLing. Begin Staking Your Bitcoin.
BitcoinIRA - Buy, sell, and swap 75+ cryptocurrencies in your retirement account. Pay less taxes. Earn up to $1,000 in rewards.
BitcoinOS - The operating system for bitcoin applications powered by zero-knowledge technology. Check out @BTC_OS on twitter to learn more.
Polkadot is a scalable, secure, and decentralized blockchain technology aimed at creating Web3. Innovation leader, making it a preferred choice for big names.
You are receiving The Pomp Letter because you either signed up or you attended one of the events that I spoke at. Feel free to unsubscribe if you aren't finding this valuable. Nothing in this email is intended to serve as financial advice. Do your own research.
2025-05-27 20:53:17
To investors,
Traditional markets are full of misinformation right now. You know how stock investors always say they want to hold equities because of the cash-flow? Well Mike Zaccardi shows gold has destroyed the return of the S&P 500 by 2x since the year 2000.
Public market investors must be in shambles seeing this. But the misinformation doesn’t stop there. You know how everyone always says to diversify your portfolio across various stocks or assets? Well X account Hidden Monopolies says the data proves that concentrated portfolios with long-time horizons drastically outperform those who choose to diversify.
Of course, the misinformation doesn’t end there either. You know how everyone keeps yelling and screaming about the high mortgage rates at the moment? Well Creative Planning’s Peter Mallouk shows “the 30-Year Mortgage Rate today seems really high until you take a bigger picture view.”
And then there are the people who keep saying tariffs won’t bring in additional revenue for the United States government. Well Felix Jauvin shows that tariff revenue is starting to accelerate at a pace we have not seen in the last decade.
Moving along…maybe you have been told that we are living in a risk-on environment and capital was flying off the sidelines into risk assets? Well Barchart shows that total assets in money market funds has hit $7.2 trillion, which is a new all-time high.
Investors are trying to milk the higher interest rates to earn that “risk-free yield.” But bonds are not as safe as everyone thought they were. Take TLT as the prime example — the fund is down almost 50% over the last 5 years. Imagine being long an asset that just goes down and to the right forever, while equity markets are on a historic run. Absolutely brutal.
So this brings me to what is actually true right now — global liquidity is continuing to increase at an accelerated rate. Governments around the world are stuffing liquidity into every corner of financial markets.
Even the US government is giving up on the idea of cutting government spending to balance the budget. Elon Musk and Scott Bessent are now both talking about growing our way out of the national debt problem, which is a noticeable change in economic policy. We are going to run the economy hot and there is an increased risk of inflation returning because of the new growth mandate.
Bitcoin’s price is likely to follow global liquidity, so I would expect the digital currency to do very well through the rest of 2025. The money printer is returning. Digital sound money is going to be a big beneficiary. That is a new law of the universe and no one is going to change it any time soon.
Hope you all have a great start to your week. I’ll talk to you tomorrow.
- Anthony Pompliano
Founder & CEO, Professional Capital Management
Jordi Visser is a macro investor with over 30 years of Wall Street experience. He also writes a Substack called “VisserLabs” and puts out investing YouTube videos.
In this conversation we talk about bitcoin, a potential bitcoin upside collapse, global liquidity, national debt, bonds, AI, Nvidia, and is the US being quiet about bitcoin a strategic move?
Enjoy!
Figure Markets – Bitcoin backed loans so you can buy more Bitcoin with your Bitcoin or earn 8% lending cash to HELOC providers! Learn more about Figure Markets and their Crypto Backed Loans!
Maple Finance - Maple enables BTC holders to earn native BTC yield. Learn more at Maple.Finance!
Xapo Bank: Fully licensed bank that integrates traditional finance and Bitcoin. Earn up to 3.9% interest in BTC. Spend globally with a debit card that gives 1% cashback in BTC. Borrow up to $1M instantly with Bitcoin-backed loans.
Simple Mining offers a premium white-glove Bitcoin mining service. Want to grow your Bitcoin stack? Visit Simple Mining here.
Gemini - Invest as you spend with the Gemini Credit Card®. Issued by WebBank.
Core - Earn trustless Bitcoin yield. No bridging. No lending. Just HODLing. Begin Staking Your Bitcoin.
Bitwise - America’s largest crypto index fund manager and the only Bitcoin ETF issuer that publishes its wallet address plus donates 10% of profits to open source developers. Learn more at BitwisePomp.com
BitcoinIRA - Buy, sell, and swap 75+ cryptocurrencies in your retirement account. Pay less taxes. Earn up to $1,000 in rewards.
BitcoinOS - The operating system for bitcoin applications powered by zero-knowledge technology. Check out @BTC_OS on twitter to learn more.
Polkadot is a scalable, secure, and decentralized blockchain technology aimed at creating Web3. Innovation leader, making it a preferred choice for big names.
You are receiving The Pomp Letter because you either signed up or you attended one of the events that I spoke at. Feel free to unsubscribe if you aren't finding this valuable. Nothing in this email is intended to serve as financial advice. Do your own research.
2025-05-22 22:03:51
To investors,
Bitcoin hit a brand new all-time high yesterday. The digital currency has been on a tear since falling to approximately $75,000 just a few weeks ago. This means bitcoin is up over 25% in the last month, nearly 60% in the last year, and more than 1,100% over the last 5 years.
I continue to tell people — if you can’t beat it, you have to buy it. I don’t make the rules. And there are not many people who can outperform the best performing asset of the last 15 years.
Just take a look at this chart. This is what total domination of financial markets looks like.
So why is bitcoin rising so aggressively in recent weeks? Simply, the market is pricing in tough times ahead, which makes bitcoin an attractive safe haven from the chaos. Take the latest spending bill coming from Washington as one example. As the market has learned more about its impact on the national debt and annual deficit, bitcoin started climbing higher. Peter Schiff, everyone’s favorite bitcoin hater, put it perfectly:
“The bond market is sending a clear signal that the Big, Beautiful Bill may be big, but it's anything but beautiful. 10-year Treasury yields are up to 4.62% & 30-year yields are up to 5.14%. Rates are going much higher, compounding the cost of financing the soaring national debt.”
If you dig even deeper into what is happening in the bond market, the picture gets even less fun. Adam Kobeissi explains:
“For the first time since October 2021, the US 5-Year to 30-Year bond spread has steepened to 1.00%. What does this mean? Markets are pricing-in stronger growth, higher inflation, and "higher for longer" interest rate policy. The last time this happened, CPI inflation was at 6.2%.”
One way to think about this situation is “the bond market is talking and bitcoin is listening.” That is exactly how it should be. Add in the fact that a structural setup in the last few weeks had primed bitcoin for a strong upward movement and you get the magic we are watching play out right now. Jordi Visser, a fan favorite weekly guest on my podcast, explained this short squeeze situation perfectly:
Jordi pretty much nailed it. And Will Clemente highlights bitcoin’s rise has now put it firmly in the top five global assets in the world.
And the most insane part of this rally is that retail doesn’t even seem to notice. Jason Williams, Mr Going Parabolic, shows that Google search volumes are essentially non-existent right now.
And Willy Woo shows that institutions are not panic buying either yet — he says “I've never seen flows into BTC coming in so smooth. It's like institutions are dollar cost averaging in with their billions.”
And as a reminder, Marty Bent’s TFTC dropped this chart which opens your eyes to just how significant the US debt situation is. This is the best marketing campaign for bitcoin you could ever have.
The debt is not going to be balanced. The annual deficit seems to be getting worse and worse. And if the dollar is going to be debased, then bitcoin is going to keep going up forever. Bitcoiners have been talking about this for a long time but it seems like the rest of the world is finally realizing what the future looks like.
Hope you all have a great day. I’ll talk to everyone tomorrow.
- Anthony Pompliano
Founder & CEO, Professional Capital Management
Polina Pompliano, Author of ‘Hidden Genius’ and Founder of The Profile, and Anthony Pompliano, Author of ‘How To Live An Extraordinary Life’ and CEO of Professional Capital Management, discuss bitcoin, Jamie Dimon & JP Morgan, inflation, Genius Act, and a mind-blowing story Anthony had with a financial institution.
Enjoy!
Figure Markets – Bitcoin backed loans so you can buy more Bitcoin with your Bitcoin or earn 8% lending cash to HELOC providers! Learn more about Figure Markets and their Crypto Backed Loans!
Maple Finance - Maple enables BTC holders to earn native BTC yield. Learn more at Maple.Finance!
Xapo Bank: Fully licensed bank that integrates traditional finance and Bitcoin. Earn up to 3.9% interest in BTC. Spend globally with a debit card that gives 1% cashback in BTC. Borrow up to $1M instantly with Bitcoin-backed loans.
Simple Mining offers a premium white-glove Bitcoin mining service. Want to grow your Bitcoin stack? Visit Simple Mining here.
Gemini - Invest as you spend with the Gemini Credit Card®. Issued by WebBank.
Core - Earn trustless Bitcoin yield. No bridging. No lending. Just HODLing. Begin Staking Your Bitcoin.
Bitwise - America’s largest crypto index fund manager and the only Bitcoin ETF issuer that publishes its wallet address plus donates 10% of profits to open source developers. Learn more at BitwisePomp.com
BitcoinIRA - Buy, sell, and swap 75+ cryptocurrencies in your retirement account. Pay less taxes. Earn up to $1,000 in rewards.
BitcoinOS - The operating system for bitcoin applications powered by zero-knowledge technology. Check out @BTC_OS on twitter to learn more.
Polkadot is a scalable, secure, and decentralized blockchain technology aimed at creating Web3. Innovation leader, making it a preferred choice for big names.
You are receiving The Pomp Letter because you either signed up or you attended one of the events that I spoke at. Feel free to unsubscribe if you aren't finding this valuable. Nothing in this email is intended to serve as financial advice. Do your own research.
2025-05-22 00:57:37
To investors,
I have spent the last 15 years of my career in the private markets. I started out building companies, then went to work at Facebook, and eventually became a full-time investor. I always joke that my generation watched The Social Network movie and everyone wanted to be the next Zuckerberg or they wanted to invest in him.
My generation has over-rotated to private markets. It is impossible to ignore. But I think we are about to witness a rotation back to the public market. Undisciplined monetary and fiscal policy globally is creating a structural tailwind for liquid traded assets, including public stocks, gold, and bitcoin. If your entire financial life is invested in the private market, you are not benefitting as much from the structural advantage central banks have created.
So my intention over the coming years is to expand what I do in the public markets. I won’t stop investing in the private market, nor will I stop building startups, but I am working diligently to add the public market to my purview as an entrepreneur and investor.
I have been working on my first major public market deal for the last 6 months or so. Last night we priced the ProCap Acquisition Corporation ($PCAPU) and it will begin trading today. BTIG, the exclusive book runner on the deal, told us that the $PCAPU IPO had approximately $1.79 billion in demand from investors even though it was only supposed to be a $200 million SPAC. We have chosen to upsize the fundraise to a total of $250 million.
So why did I raise $250 million? Why did I choose to do it in a publicly traded vehicle that anyone can buy the stock ticker?
Simply, I want to acquire a profitable company and help them enter the public markets. Using the SPAC structure can be an efficient way to do this, along with allowing independent investors and institutions to participate alongside our investment firm.
My big idea is to find a business that can benefit from large digital distribution. If you think of other people who have large online audiences, they have been able to build or buy companies, strip out a lot of the sales/marketing costs, and help increase revenue without increasing expenses. My goal is to do a similar thing with this vehicle.
One of the main issues with SPACs over the last 5 years or so has been a lack of discipline. Many sponsors were conducting public venture capital. They would purchase a money-losing company at a high valuation and hope the business grew into the valuation. While some successfully grew into the valuation, many did not.
Instead of doing public venture capital, I am interested in buying a cash-flow positive business at an attractive valuation. If I can successfully do that, plus leverage the digital distribution to continue building the company post-transaction, than I believe there is a chance of creating shareholder value for myself, our investment firm, and public shareholders.
This body of work is going to be difficult. We have to find a good business, negotiate a fair price, and then help that company build value over time. I wanted to make sure I had help in doing this, so I asked my friend Brent Saunders, the current CEO of Bausch & Lomb, to join as a Special Advisor to the company. Brent has done more than $300 billion in M&A and served as a public company CEO for about 17 years. I am very thankful and fortunate to have Brent helping me.
ProCap Acquisition Corp ($PCAPU) started trading publicly this morning on the Nasdaq. We are on the hunt for a good, profitable business that wants to get into the public markets at an attractive valuation. There is a lot of work ahead but I am energized and excited about this effort.
Obviously there are many regulatory considerations on what I can and can not say throughout this process, but I will do my best to keep everyone informed on progress and my thoughts as we proceed. I appreciate everyone who has already reached out with support and look forward to talking to the founders and executives of many great companies in the coming weeks.
Hope everyone has a great day. I’ll talk to everyone tomorrow.
- Anthony Pompliano
Founder & CEO, Professional Capital Management
READER NOTE: We launched a new product this weekend to help investors manage their financial lives. The product uses AI models to track your net worth, analyze your portfolio, answer any questions you have about your finances, and make suggestions on how you can improve. You can add public stocks, private investments, crypto assets, cars, houses, investment properties, collectibles, and any other assets you own.
You can text, email, or call the CFO too which is really cool. The CFO, called Silvia, now has more than $1.8 billion in assets connected on the platform.
You can sign up for the product completely free here: https://www.cfosilvia.com/
Polina Pompliano, Author of ‘Hidden Genius’ and Founder of The Profile, and Anthony Pompliano, Author of ‘How To Live An Extraordinary Life’ and CEO of Professional Capital Management, discuss bitcoin, Jamie Dimon & JP Morgan, inflation, Genius Act, and a mind-blowing story Anthony had with a financial institution.
Enjoy!
Figure Markets – Bitcoin backed loans so you can buy more Bitcoin with your Bitcoin or earn 8% lending cash to HELOC providers! Learn more about Figure Markets and their Crypto Backed Loans!
Maple Finance - Maple enables BTC holders to earn native BTC yield. Learn more at Maple.Finance!
Xapo Bank: Fully licensed bank that integrates traditional finance and Bitcoin. Earn up to 3.9% interest in BTC. Spend globally with a debit card that gives 1% cashback in BTC. Borrow up to $1M instantly with Bitcoin-backed loans.
Simple Mining offers a premium white-glove Bitcoin mining service. Want to grow your Bitcoin stack? Visit Simple Mining here.
Gemini - Invest as you spend with the Gemini Credit Card®. Issued by WebBank.
Core - Earn trustless Bitcoin yield. No bridging. No lending. Just HODLing. Begin Staking Your Bitcoin.
Bitwise - America’s largest crypto index fund manager and the only Bitcoin ETF issuer that publishes its wallet address plus donates 10% of profits to open source developers. Learn more at BitwisePomp.com
BitcoinIRA - Buy, sell, and swap 75+ cryptocurrencies in your retirement account. Pay less taxes. Earn up to $1,000 in rewards.
BitcoinOS - The operating system for bitcoin applications powered by zero-knowledge technology. Check out @BTC_OS on twitter to learn more.
Polkadot is a scalable, secure, and decentralized blockchain technology aimed at creating Web3. Innovation leader, making it a preferred choice for big names.
You are receiving The Pomp Letter because you either signed up or you attended one of the events that I spoke at. Feel free to unsubscribe if you aren't finding this valuable. Nothing in this email is intended to serve as financial advice. Do your own research.
2025-05-20 21:56:13
To investors,
Retail investors have long been thought of as the “dumb money” in financial markets. The hedge funds and large institutions were the sophisticated money. They had the Ivy League degrees, lots of technology at their fingertips, and they were paid millions of dollars per year to find the edge to create massive profits.
But multiple data points in recent years suggest individuals on the internet are catching up to the institutions in terms of intelligence and sophistication.
Here are some examples — individuals beat institutions to understanding and buying bitcoin, the best performing asset in the last 15 years. Individuals understood the structural imbalance in Game Stop a few years ago and exploited it, while bringing one of the largest hedge funds to their knees. Individuals bought the dip in 2020 from the pandemic and they bought the dip in April of this year thanks to the tariff uncertainty. And individuals bought Tesla and Palantir stock early when most institutions didn’t believe the companies could thrive.
Just because retail is getting smarter and driving better results doesn’t mean the institutions are dumb. In fact, the opposite is true. Wall Street is full of incredibly intelligent, hard-working people who are obsessed with finding an edge when allocating capital. But what is also true is that independent investors now have access to more information than ever before. The playing field is becoming more level, which disproportionately helps the little guy.
Due to this increased success of independent investors, it has become increasingly important to pay attention to what retail capital flows look like. Yesterday we saw this group of investors trade $4.1 billion in the first 3 hours of trading. This is the largest capital inflow from retail in history.
Amit is Investing shows JPMorgan data that reports the two biggest stocks during that time period? Palantir and Tesla. Palantir saw more than $430 million of inflows, while Tesla saw $675 million. Even more interestingly, single stocks were $2.5 billion of the purchases while ETFs comprised $1.5 billion.
Simply, retail investors are optimistic and they are deploying capital into the market like their financial lives depend on it. This coincides perfectly with social sentiment exploding higher. Mike Zaccardi shows the Goldman Sachs Social Media Sentiment Index hit its highest level since July 2019.
Mike also points out that while retail investors are going long, the P/E ratio of US stocks has returned near the highs of 21.7x. Does that spell danger? Maybe. No one actually knows yet, but the data is overwhelming that retail investors are jumping headfirst into the market.
So what is the “smart money” doing during this time? They are caught offsides on this recovery rally. Institutions and hedge funds have the lowest allocation to US equities since May 2023 right now. Stocks have been going up, yet the big pools of capital are not participating at the same rate that independent investors are. Why could that be?
An account on X called The Short Bear had an interesting take:
“The institutional world relies on a “never be the outlier” model. The name of the game isn’t to outperform but to never underperform the peer group. As long as you are as bad as your neighbor your AUM is safe.
As the market recovers and exposure is low, fund managers risk their AUM by not chasing. Also keep in mind they have to create the perception of “managing” so investors feel like they are paying for their management fee.”
This is ultimately one of the big differences in how institutions and retail will diverge in their allocation decisions for the coming years. Institutions are managing capital with a focus on not being fired by their clients. Retail is managing capital with a focus on making as much money as possible. Neither strategy is right or wrong — they can both work. But it is important to remember the different motivations from each group.
And if you are ignoring retail’s rise, I think that will be a mistake in hindsight. As I shared yesterday, retail investors saw their share of the market hit 36% in April. That is more than 1 out of every 3 dollars coming from independent investor already, which probably will continue to accelerate in the future as well.
You love to see the independent little guy getting a seat at the table. Let’s just hope they continue to do well in their investments over the coming years.
Have a great day. I’ll talk to everyone tomorrow.
- Anthony Pompliano
Founder & CEO, Professional Capital Management
READER NOTE: We launched a new product this weekend to help investors manage their financial lives. The product uses AI models to track your net worth, analyze your portfolio, answer any questions you have about your finances, and make suggestions on how you can improve. You can add public stocks, private investments, crypto assets, cars, houses, investment properties, collectibles, and any other assets you own.
You can text, email, or call the CFO too which is really cool. The CFO, called Silvia, now has more than $1.8 billion in assets connected on the platform.
You can sign up for the product completely free here: https://www.cfosilvia.com/
Jordi Visser is a macro investor with over 30 years of Wall Street experience. He also writes a Substack called “VisserLabs” and puts out investing YouTube videos.
In this conversation we evaluate economic data, bitcoin, stocks, inflation, acceleration of AI, and the global economy.
Enjoy!
Xapo Bank: Fully licensed bank that integrates traditional finance and Bitcoin. Earn up to 3.9% interest in BTC. Spend globally with a debit card that gives 1% cashback in BTC. Borrow up to $1M instantly with Bitcoin-backed loans.
Figure Markets – Bitcoin backed loans so you can buy more Bitcoin with your Bitcoin or earn 8% lending cash to HELOC providers! Learn more about Figure Markets and their Crypto Backed Loans!
Maple Finance - Maple enables BTC holders to earn native BTC yield. Learn more at Maple.Finance!
Core - Earn trustless Bitcoin yield. No bridging. No lending. Just HODLing. Begin Staking Your Bitcoin.
Simple Mining offers a premium white-glove Bitcoin mining service. Want to grow your Bitcoin stack? Visit Simple Mining here.
Bitwise - America’s largest crypto index fund manager and the only Bitcoin ETF issuer that publishes its wallet address plus donates 10% of profits to open source developers. Learn more at BitwisePomp.com
BitcoinIRA - Buy, sell, and swap 75+ cryptocurrencies in your retirement account. Pay less taxes. Earn up to $1,000 in rewards.
BitcoinOS - The operating system for bitcoin applications powered by zero-knowledge technology. Check out @BTC_OS on twitter to learn more.
Gemini - The future is being built today. Go Where Dollar’s Won’t. With Gemini.
Polkadot is a scalable, secure, and decentralized blockchain technology aimed at creating Web3. Innovation leader, making it a preferred choice for big names.
You are receiving The Pomp Letter because you either signed up or you attended one of the events that I spoke at. Feel free to unsubscribe if you aren't finding this valuable. Nothing in this email is intended to serve as financial advice. Do your own research.