James Altucher was recently interviewed on The Creating Wealth Show and shared his views on the economy during the coronavirus crisis. He currently lives in New York City and shares his experience visiting local hospitals and how the city is being affected. He also shares his view on the stock market, oil, the stimulus, and real estate. See the full interview transcript below.

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Full Interview Transcript

Part 1

Introduction 0:02
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it. And now here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 0:54
Welcome to episode number 1453 1453. Today we’ve got part one of James all teacher coming back on the show. It’s always great to have him. He’s a, he’s just a good thinker and has a lot of interesting insights to things. And he is a New Yorker. And he will be reporting on the COVID situation in New York City. So I think you’re really going to get a lot out of this insights into a variety of things. Again, we are a multi dimensional show, just like income property is a multi dimensional asset class. And that’s why it’s so powerful and so lucrative. And yeah, so before we get to James altucher, let me share with you a couple of things that have been interesting to me today. Number one, there is an absolutely an undeniable, unequivocal Is that the right way to say that anyway, whatever. It’s a sure thing. How’s that, that when it comes to pandemics? density matters when it comes to any infectious disease issue? It’s all Well, I guess it’s not all about, but it’s largely about density, density density. And I was again on George Gammons show yesterday on his YouTube channel. And by the way, speaking of other people, happy to announce that we have Jim Rogers joining us back again. He’s been on the show three times before but it’s been many years. I emailed him the other day, and I said, Hey, Jim, I mean, he is the most approachable zillionaire I know such a such a Southern Gentleman, Jim Rogers, the famous hedge fund manager and author of so many great books including one of my favorites, entitled adventure capitalist, also investment biker. A lot of you may him from that book and or many other books. Anyway, he’s coming back on the show. So I emailed him. I said, Hey, Jim, it’s been a long time. We got to get you back on the show. And he writes back right away. Such a gentleman. He writes back, Jason, when was the last time I was on your show? And I wrote him back. And I said, 2013. So it’s been far too long. Seven years. Wow. Okay, back to this infectious disease issue, and density. So I’ve talked all about three types of real estate markets that we all need to be aware of that we need know, to know how to invest four, what are the three you’ve heard it too many times, linear, cyclical, and hybrid markets. But we need to add some layers to this onion, if you will. And a couple of the layers we need to add are high density and low density. Okay, so not just linear cyclical hybrid, but now we have high density and low density. And then let’s segment simply by one kind of price category. I’ll make it really simple. Of course, you could further segment this until the cows come home as the saying goes, you could segment it into many, many price categories. But let’s just do one segmentation lest we get too complicated. And that will be conforming loan or jumbo loan. In other words, when the typical buyer buys one of these properties in one of these markets, you know, they’ve got jumbo loan type of properties, and conforming loan type of properties, the lower priced properties in all markets in high density and low density markets and in linear, cyclical and hybrid markets. So now, we went from three categories to seven categories, linear cyclical Hybrid high density, low density jumbo loan or conforming loan needed to acquire the property. Okay, so we got seven, seven parameters Now, let’s look at density for a moment. Okay, as I’ve told you before 84% of the United States lives in what is considered to be an urban area, that’s the 84% number. The average population density of the US is only only and this is pretty low density 87 people per square mile. The average population density in the US of metropolitan areas is 283 people per square mile. So without 87 people, 283 people per square mile in either those New York City super dense, obviously 27,012 people per square mile. So my thesis is that As these lockdowns, lift, people are really going to be moving. They’re going to be thinking about moving. They’ve been thinking about moving. They’ve been thinking about why am I cooped up in this 800 square foot place in New York City? that’s costing me 40 $200 a month in rent, or it’d be a million dollars 2,000,005 to buy it probably. I don’t know. You know, it varies, obviously. But definitely a jumbo loan. By the way, why am I cooped up here, when I couldn’t be living a better life in a suburban place for a fraction of the cost and I can do all the same work I’m doing now. Because I am now and the world has come to finally, although it’s long overdue, except that telecommunication is the way to go. And I can’t socially distance in this place in New York City. And New York City’s just a proxy for any city, any densely populated area. But the question is, how does this density look around the world? Now, what’s interesting about it around the world, not in the US, we just talked about the US numbers. But let’s look around the world now. So I am looking at a graph. I’ve been doing some research on this of world urban population. And there may be some differences as to what is considered urban in the US versus urban around the world. I don’t know, frankly, but I’m going with what they’re telling me they consider urban versus rural. Now remember, the concept of sub urban, which is the in between urban and rural, right. It’s not urban. It’s sub urban, like almost urban, but not quite. So suburban is a uniquely American idea. suburbs around the world just aren’t a big deal. Okay. They do have them but not like in the US, the US A real, like, suburban place. Okay? If you listen to the song by the most talented band that has ever walked the face of the earth rush, there’s a song called subdivisions, okay, which talks about this and it’s all about suburbia. And it’s not positive by the way. But anyway, you know, it’s a great song and points out some interesting things about suburban living. And this idea of suburbia is a really an American thing. It does exist around the world, but not like it is in the US and the US. It is the thing around the world. It’s a maybe once in a while thing. So around the world, you stratify mostly into either you are in a rural area or an urban area. So in 2019, population density in the world, okay, the entire world, just averaging it out, is 134 people per square mile versus 87 people per square mile in the US. So it’s about double right or Well, almost double. Okay, what it is in the US calculated on this huge, huge land area. And of course, you’ve got to estimate what the land area is. So the urban population around the world, remember, the US is 84% is urban, around the world, it’s 55.7%. So around the world, you have a smaller urban population as a percentage of the whole population. Because Hey, think about it. A lot of people around the world, certainly still in China, even though they’ve had this massive urbanization push for a couple of decades now. But in China, still, you have a giant population that lives in a rural environment. Certainly in a continent like Africa, my gosh, you know, huge rural population. So a lot of the world is rural versus urban. Okay. 55% versus 45% you know only 45% is rural and 55% is urban around the world. Just thought you might like to know that because there is no question whatsoever that a driving huge factor in this whole PTSD that will linger that will stick with society for many years, maybe decades to come, is borne by urban living. And if you look at the death rates from Coronavirus in the United States as of May 4, that’s today okay. per state, okay, this is the death rate per 100,000 people, okay. Now the problem is this is per state. So well of course it depends, right? Because it depends how much of the state is urban city living and how much of the state is not urban, but just looking by state you can pretty much understand what’s going on New York State leading the country with 126 deaths per hundred thousand people for COVID-19 New Jersey, also high density 89 deaths per 100,000 people Connecticut 68 Massachusetts 58 remember they got Boston? Okay. Louisiana 42, Michigan 41, Washington, DC 36. Remember DC isn’t that much of a high rise place even though it is dense, it’s not the super high rise, Rhode Island 30. And a lot of this relates to also you know, treatment and state response lockdown, blah, blah, blah, you know, you get it, right. But you can just sort of when you look at the big picture, you can see that urbanization really affects this. And I say, this is going to linger this PTSD, this post traumatic stress disorder, from what has happened is going to linger for decades. gates come and you, dear investor can profit by helping people change their lives for the better by helping them move to suburban areas and renting from you. Yes, that’s how you profit from them. Okay. And we’re going to talk this week, hopefully we’ll get time to talk about the 90% economy. What do I mean by that? Well, where are we going as we recover, as we come out of this? How much of the economy will come back? One set of experts really a whole group of economists predicts 90%. They dubbed it the 90% economy. I say they’re wrong. I say they’re way too optimistic. There’s no way the economy is coming back. 90% after this, it’s gonna be a slog. Okay, don’t accuse me of being too optimistic because I’m not okay. The only thing is that I think that the forces of the de urbanization and the mass migration to suburbia, out of urban areas, and five other factors that have identified beyond this will outweigh the damage to the economy. As we restart as we reboot the economy. I don’t think the economy is going to come back at 90%. I think it’s going to be worse. We are going to come back into a smaller economy and economy where people and I just look at my own life. Okay. Listen, if you’ve been listening to my show for the past 16 years, okay, or even the last five, or even the last three, you know, I’m like, Mister traveler, I travel a lot. And you know what, I’ve really reevaluate my life coming out of this, even when everything’s okay, even when there’s a vaccine, you know, I just don’t want to do it. I’m just not that interested in getting on a plane. Now. You could say okay, well, Jason You know, you’ve been to 87 countries, and 87 is the exact number by the way, you’ve been to 87 countries. And you’ve been to those many, many times. You know, you’ve done your traveling. You don’t really have the urge you don’t have the wanderlust that I do I want to go see the world. Okay, fine. I understand I understand. But I just think there’s going to be allowance travel, there’s going to be a lot less going out to dinner. There’s going to be a lot smaller restaurant industry, there’s going to be a smaller spa industry. There are going to be so many industries that just shrink and shrivel, retail, obviously, office space, the commercial market, the commercial world, we got to talk about who’s not paying their rent in the commercial real estate world and the blacklist for that. I know I said, we talked about that before and we didn’t get time to. We’ll get into that hopefully this week. because let me tell you something, folks. Aren’t you glad you did not invest in commercial real estate? You’ve been following my plan. You’ve been all about the three biggest, most important factors in the real estate market? What are they? They’re not location, location location, because I taught you back starting in 2012. That geography is less meaningful than it’s ever been in human history. Geography is less meaningful than it’s ever been in human history. It still matters, but less than ever before. Do you know what the three primary rules are of real estate now, they’re not location, location, location. They are, according to Hartman, the Hartman rule stuff, three Hartman rules of real estate, they are housing, housing and housing. Okay, housing is where it’s at. And hopefully that’s where you’ve been at, if you’ve been listening to my show, and you didn’t get suckered in to investing in some of this crazy commercial real estate that is now just collapsing like a collapse that we haven’t even seen the beginning of yet. It’s going to get a lot worse. So So, it’s good news and bad news at the same time. It’s the tale of you know, it’s the tale of three cities. Okay? do use a well worn cliche to modify a well worn cliche, and we’ll keep investigating it for you. Lots more to come. Okay, without further ado, let’s get to James all teacher but if you need us, Jason hartman.com or call us at one 800 Hartman and here we go with James altucher.

Hey, it’s my pleasure to welcome a returning guests back to the show and that is James all teacher when he was on a couple of years ago, we had a great conversation about his book at the time, a concept I very much support, which is choose yourself. And since then, he’s developed a huge podcast following the torture show. He’s a former hedge fund manager knows a lot about the economy. And he’s been looking into the epidemiology of the COVID-19 situation. He also lives in New York City. You know, he’s a Author of a bunch of books. I won’t even go through all the titles, but there’s there’s so many. He’s prolific. Anyway, it’s great to have James altucher back on the show, James, how you doing?

James Altucher 17:08
Jason? Thanks so much. Thanks for having me back on and I super appreciate it. It’s, it’s too bad. It’s It’s such unfortunate circumstances that bring us back together on the show, but it is what it is.

Jason Hartman 17:20
Yeah, it is what it is, that’s for sure. But you know, there’s a lot of opportunities right now to and whenever there’s a crisis, you know, like the Chinese say, crisis and opportunity are the same thing. Their thing is literally translated crisis is opportunity writing the dangerous wind. It’s kind of interesting. I didn’t know that.

James Altucher 17:39
Yeah. Is that like the same ancient curse? May you live in interesting times, because it’s

Jason Hartman 17:43
that concept, but they used to say that a lot during the Great Recession, for sure. And so these are interesting times, you know, being in New York City, man you are, you’re just on the forefront of it. So tell us kind of the big picture of what’s going on what you’re thinking. What you’re interviewing a lot of people, just what’s the site Geist in the in the James altucher world right now?

James Altucher 18:06
Yeah, it’s interesting you bring up New York City in that between New York City and New Jersey, those two areas alone are more cases and sadly deaths than the other 48 states combined. So my view when I hear the news, and when I walk out and see what’s happening on the street, I imagine it’s probably very different from, you know, somebody from other parts of the country where maybe the shutdown is not as restrictive or maybe there’s just not as many cases are not as many deaths. Like, you know, you take Georgia, for instance, right next to Florida, which is a reopening or reopening a big portion of their economy today. And they’ve had, what 800 deaths out of a population of 10 million. Georgia itself has an economy in the 10s of billions. So, you know, it’s a different perspective. Here everyone is, I just feel this atmosphere or that anxiety and fear and stress and nobody wants to run these lockdown. And there was all these panicky headlines weeks ago. Oh, the hospitals are about to get overrun. So Trump said the, what is it the USS comfort the Javits Center got turned into a hospital, the I myself visited the 10 hospitals on Central Park, just to just to see what was going on. They were empty. All these places were empty. They never did overwhelm the hospital system.

Jason Hartman 19:29
And that’s great. So they flatten the curve in time that we didn’t overwhelm the hospitals. And interestingly, you say that James, because being in New York, certainly you know about the conspiracy theories that are starting to float like crazy. And, you know, one is where they’re getting people to crowdsource video of hospitals in their neighborhoods, right and, and you see, like these, you know, barricades set up for people to get in line and nobody’s there. Now I don’t know how real or fake this stuff is. I just know It’s interesting

James Altucher 20:01
thoughts. Yeah, I mean, before the peak, I went out to do a little bit of that crowdsourcing myself just to see what’s going on. Yeah, there was nobody anywhere. And I spoke to people who were coming in and out of the hospital, I spoke to doctors, I spoke to priests who are coming in and out. And like, thank God, I’m not I’m not even saying like, I see you’re wrong. It’s nothing. like okay, they took a worst case scenario, and they wanted to be cautious and every precaution and

Jason Hartman 20:29
that’s good.

James Altucher 20:31
But I do think though, this speaks to the larger issue of we made. And I say we the government and the population made a huge, huge trillion dollar multi trillion dollar decisions off of mathematical models, that not once were correct. They weren’t even close to correct, right. Like back in January, early February. There were newspaper articles saying around the world. 140 million people might die. That was the first article I ever saw this. And then, you know, I get a report out of either Imperial or Harvard or both that said there would be millions of deaths in the US. And, you know, up to 10 million deaths in the US was the first number I heard. And then a guy coming down, kept coming down. And every single model was wrong March 25, I, ah, me came out with a model that said, there would be 60,000 hospitalizations in New York City alone. By April 1, just six days later, well, six days later, there were 12,000 hospitalizations, they were 80% off and the model they had made just six days earlier and these were all the scientists we were relying on to make multi trillion dollars decisions about shutting down people’s livelihoods and careers and and you know, all the deaths and stress and collateral fatalities that ended up resulting you know, if you have if you’re in stage three, liver cancer, and you wanted to see if you had stage four, that was considered an elective procedure, so you couldn’t do it, so you still can’t do it. So this is creating a problem for the entire session. stuff and everyone will say, Oh, are you choosing the stock market over your grandma’s life? Right? No, that’s not it at all like people are suffering like there’s calls to the Bronx. For child abuse hotlines are six times higher. Even Indiana suicide

Jason Hartman 22:16
hotlines are 800% higher, yes to suicide hotlines.

James Altucher 22:22
It’s It’s insane. So I really just who knows what the right decision was, but, you know, everybody was scared. But I wish the media hadn’t fanned the flames of that hysteria, because hysteria now is turning into history. And, you know, hopefully we climb out of this, but But yeah, so that’s a long answer. But also in terms of the economy, I think, you know, we’re going from a period of great uncertainty to a little bit more certainty, which is that the economy will reopen the stimulus packages now to have been passed, plus the Federal Reserve’s stimulus, and the virus seems to have peaked in the US, and maybe they’ll be a segue. Maybe not that That’s part of the unknown. But we know some things now for certain that we didn’t know even like three or four weeks ago. So that’s a good thing. But now going into this new abnormal, I’ll call it is there’s a lot of uncertainty too, which is what industries will collapse, because there’s going to be a few. And, you know, we don’t know about the second wave of the virus. But now that we have a lot of data about the virus, hopefully we can say, Well, okay, we don’t have to shut down the entire economy this time. And we’ll see. But, you know, there’s been definitely been a lot of interesting data about the economy.

Jason Hartman 23:30
Yeah, no question about it. You know, I mean, going forward, first off, what type of recovery Do you think it’ll be? And before you answer, I’ll tell you what I think. So, you know, we’ve all heard is it going to be a V shaped recovery? That’s the hopeful picture, is it going to be a u with a big ugly trough? Is it going to be an L shaped recovery, I think it’s going to be kind of like a modified square root sign, meaning that the square root sign Usually, you know, it goes down, then it goes up higher. I think this one’s going to be down, it’s going to be down in the V, and then up but lower than the start. I think this is a lasting issue. You know, it’s going to have a huge hangover on the economy. And I think the economy is going to shrink. I think there’s going to be a form of PTSD. I hate to say, where travel isn’t going to resume, it’s going to be a slow slog to get back to that the new normal. I mean, there are certainly be a lot of opportunities. I’m not being like, negative. I just think there’s, you know, there’s always a lot of repositioning, right when something like this happens, but your thought, I mean,

James Altucher 24:42
look, this is a bigger disaster than and I’m not even talking about the pandemic, the economic shutdown is a bigger disaster than what happened in the economy after 911. What happened in the economy after 2008 2009, which was a pretty big disaster By the way, the financial system collapsed, and they had to bail it out. There. No cash left and they had to put cash into the system. And 911 the country feared it was under attack. And certainly things were affected permanently like like travel and and airports and our relationships with the Middle East and so on. And banking kind of changed forever after 2008 and 2009. I mean, it was just starting

Jason Hartman 25:20
to come back if you if you walk into a bank now, with a couple million bucks, instead of saying, Hey, you know, we’re glad to have you. And by the way, here’s your free toaster. It’s like, oh, we’re suspicious. You might be a terrorist or money launder, it’s just totally that the Patriot Act is, you know, but know your customers. It’s just changed everything. Yeah,

it’s like, yeah, you know,

James Altucher 25:42
yeah, and a lot of things are gonna change now. And I think some of them we can probably guess about and some of them, we can’t, but you know, it’s funny, just debate of the different shapes. I think I’m more in your camp about how I see more of a W than a V, right. So you know, we go up a little Which is what’s already happened. We’re kind of like at the peak of the W, and then we’re gonna have to go down again because as long as you keep seeing insanity happen, that those are all canaries in the coal mine. So like what happened with the oil futures contracts two days ago going negative, that’s never happened before. That’s a little bit of insanity. Like I even see experts being quoted in newspaper articles talking about, oh, the physical delivery of oil, nobody wants to take your oil. These were cash settled contracts, there was no oil involved. It was just, it was just a big, insane thing that happened. But as long as there’s insanity happening, there’s no way that we have the enough certainty in the market to just go straight up from here, no matter what the stimulus does. Second, the stimulus is hitting but there’s nothing to hit that the economy now is a is like a patient on life support. It’s this is a band aid at best, and you have to have a living patient that’s walking around before the stimulus can work. So we don’t quite know for sure. We don’t What’s gonna happen that the economy is gonna wake up, but we don’t know when and then what? How many phases?

Jason Hartman 27:04
And by the way, if I just keep your thought there, please don’t don’t forget, but what you’re kind of referring to is, and we’ve been talking a lot about this rare malady of supply demand shock, you know, which sort of was pronounced in the 70s. And so we’ve seen demand destruction, obviously, but I think we’re gonna see supply destruction too, because for example, oil is a, you know, a great example, right? You look at this prediction, and may be totally wrong, of course, but, you know, now we have demand destruction and there’s like, gluts of oil and oil is cheap. And, you know, they’re, they’re having tankers store oil, that they’re not moving the oil, they’re just storing the oil, right? It’s a totally weird situation. But now these oil companies go out of business. And when things do recover, there’s a lot less supply. So same with the airlines like I did, I did a Google flights search today and I’ve been looking at flights Just interesting. I don’t want to go anywhere. I’m just doing it as a study. Sure. And, and to go, I live in Palm Beach, Florida. So to go from Miami to LA x, which is like an easy route, you know, take a direct flight, it’s really expensive. In fact, looking at the chart on Google flights of the last 6075 days, it’s at the highest price it’s been. And if you looked, if you looked at just three weeks ago for that flight, it was dirt cheap, okay, four or five weeks ago, cheap, right? Because you have lots of supply and no demand. And now that the airplane the airlines have grounded a lot of their flights and canceled their routes, you have, you know, a small amount of demand, but a lot less supply to so it sounded like you were sort of alluding to that, and I just wanted to bring that out as a discussion point.

James Altucher 28:49
Yeah, I mean, with oil like so i i

Jason Hartman 28:52
and in particular, just generally widgets, but oil is an example. Go ahead. Yeah.

James Altucher 28:57
Yeah, I mean, I think I think because this is such a weird thing. This, this lack of demand is not based on where the economy was heading a few months ago, it’s it’s this force, lack of demand, because we’re all being told to stay at home, which I’m not questioning one way or the other. That’s not what this is about. But so I own part of a private oil company, and we just stopped producing the oil. Like, we realize there’s not going to be any demand. And there was no reason to pump more oil out. And we’ll start pumping again, when there’s demand. I think that’s what most oil companies are going to be doing. So it’s, I don’t know if the oil companies necessarily gonna go out of business someplace as well. Like, you know, the average small business like a restaurant only had 16 days of cash in the bank, they might not have gotten their small business loans. Hardly any small businesses actually got the small business loans.

Jason Hartman 29:45
A lot higher.

James Altucher 29:46
Yeah, a lot of storefront businesses are gonna go out of business. A lot of small mom and pop businesses, sadly, are gonna go out of business. I don’t know how you really avoid that, though, trying to I mean, the premise of the $2.2 trillion stimulus package and then an additional 400 50 billion as of yesterday, the premise is that two and a half trillion dollars of money is not going to be spent this quarter. So that’s what they’ve calculated, you know,

Jason Hartman 30:11
give us that number again.

James Altucher 30:13
It’s well, like every quarter, yeah, the GDP of a quarter GDP of a year is about $20 trillion. Every quarter, that’s 5 trillion. And they kind of think there’s about 40 to 50%. Yeah. So then this is the government. This is what I’m getting. This was on my podcast with the I had on my podcast the other day, the deputy chairman of the St. Louis Federal Reserve, so he was telling me his reasoning is that between two and 3 trillion would be withdrawn from the economy because we’re all not spending money while in our houses. And so they created two to $3 trillion of stimulus. And so it’s supposedly going to replace what we lost in terms of money. But again, all that stimulus is going to end up just sitting in a bank. And so the velocity of money means an economy to be flourishing. Otherwise people won’t spend they just Keep the money in the bank. And the money doesn’t have the intended effect on the economy too. So to your point, you could put you’d have to put in five or 6 trillion, if the economy’s truly gonna slow down, you have to put in trillions more to make up the same amount that last year’s 2 trillion was. So the point is, is that if if we do have this PTSD, then you’re right, we’re going to see much more of a slowdown in the data in q3 and q4 than we expected, it won’t be the V shaped surge that some economists and government officials are predicting. Now. We don’t really know though. I mean, the one One theory is like you said, we’re gonna have this PTSD. We’re not we’re gonna realize we don’t need to go out as much we’re gonna enjoy staying at home. On the other hand, it’s sort of like, we’re drug addicts, and we were addicted to the economy and spending money and now we’re in drug rehab. Yeah, definitely drug rehab to put it. Typically in drug rehab. We stopped using drugs. And but then when we get out of rehab, we start hanging out with our old friends and going our old Hangouts and we start using Yeah, yeah. Right. So So theoretically, we could relapse off. So I think this is one of the uncertain things. I could say now, I’m never getting on a plane again, or I’m never going to a restaurant again. But when I can, and my wife wants to go to a restaurant, I’ll do it. I’m not and I own I actually own a bar. So I hope people returned to bars, but we’ll see dirty, disgusting petri dish of disease like a bar, right, like the bar I own at least. And but I think it’s an unknown, and we’ll see but I’m more inclined to think just the mechanics of it is more like a W. And although I do think the stimulus will be enough, not necessarily the short term stimulus that Congress is passing all that will help, but the Federal Reserve stimulus, which is cutting the interest rates, buying mortgage backed securities, buying corporate debt, that’s gonna that that’s almost going to be forced to lift the economy, but people don’t realize federal stimulus even this extreme doesn’t kick in. For a good six to 12 months at least Yeah, so we’ve got a while before that kicks in. So we’ll

Jason Hartman 33:06
say you made a great metaphor there of the patient that’s on life support. Right? And so, you know, you can pump money but pumping money, you know, it doesn’t solve every problem. Yes, it’s the usual tool that the Federal Reserve goes to, it’s there. It’s the sort of their go to thing, you know, in fact, it’s just funny 911, you know, great recession. Now, you know, whenever you have like a g7 meeting, the whole thing is like, How much money do we pump into the system? Right? That’s all. That’s always the solution. But in this case, it doesn’t totally, it’s not the panacea, it is sometimes, right,

James Altucher 33:45
right, like in 2000. Basically, we’re following the playbook of 2009 2008 2009. So the Federal Reserve over the past two, three decades has gotten a lot more sophisticated about the ways they can help the economy. So so better Back in the 90s, Alan Greenspan would just cut rates. And that would do it after 911. There were some stimulus checks. And it was mostly just cutting rates. But after 2008 2009, it wasn’t just cutting rates. It was also encouraging banks to have excess reserves by raising the interest rates that the Fed would pay banks on those excess excess reserves. It was they started buying, you know, mortgage backed securities and going out a little bit further than just treasury bills. And they’re doing more of that. Now. They’re doing the same but more now. And again, you’re right. if nobody’s buying goods, it does nothing to help the guy does zero. Yeah. So somebody has the economy has to move first. And is this stimulus enough? Are the right people getting it? Was this the right macroeconomic theory? I don’t know. This is a giant experiment. 2 trillion just like to replace spending. I don’t know if that we’ll see if it works. I mean, it’s probably better than nothing. And then you have we have massive deflation right now on some things but like you pointed out, depending on how the how efficient the industry is, there might be inflation. And then, of course, structurally, does all this increase in dollars result in inflation? It’s unclear right now the rest of the world buys our dollars and that’s a deflationary pressure. But I do think specifically, you’re going to see things like commercial real estate has to have a mini financial crisis after this. We weren’t going to go out of business.

Jason Hartman 35:24
Mr. Owens, you’re saying many, I think it’s going to be a maxi crisis.

James Altucher 35:28
I guess. I agree. I’m just afraid you’re

Jason Hartman 35:31
being the word being optimistic.

James Altucher 35:33
Yeah. It’s like, I don’t want to say to my wife, why don’t you get the maxi pads instead of the mini like, like, don’t do that. Like, but yeah, I mean, what’s gonna happen when we work goes out of business, which is 100% chance. Right? Right. Like if the average they’re the biggest real estate renter for commercial real estate in New York City and other cities. So if you’re have a building and suddenly eight floors, your renter just disappears, right? And you got to clean it out,

Jason Hartman 35:58
find another renter, and we work with Already a scam. You know before this so yeah, right sothank use this as an excuse to hold the plug and that was a smart decision. So poor Adam Newman he’s only gonna be a millionaire not a billionaire.

James Altucher 36:11
Yeah, he pulled out like 700 billion so he’ll he’ll, he’ll survive. But I don’t know if he can feed his kids in a few years. But we’ll say, but what are all these real estate commercial real estate companies going to do? They live on borrowed money, and now borrow time and they’re not going to survive. It’s the entire industry is going to change. Airlines, despite a bailout are probably going to go out of business cruise lines. I don’t know if Las Vegas is going to be able to stay in business. Are you going to Las

Jason Hartman 36:37
Vegas anytime soon after this? like would you even plan that? That’s the PTSD kind of concept that I’m talking about. Like, yeah, you know, I mean, this may sound weird, but and I don’t mean to minimize the quarantines and the depressive effect it’s having on on people psychology, but personally, for a guy who jumped on a plane two, three times a month. I love it. I just love not owning an airline ticket having no plans. Yeah, I’m enjoying this time of just being a homebody. I actually really quite like it. I know. They’re, you know what? Well, they drive to the base. Yeah, I’m in Palm Beach, Florida. So they just reopened features and I have not been yet. I don’t know why they closed them in the first place. I can see closing them down for spring break parties and stuff. Sure, but just a regular beach. That’s not part of a scene. That seems sort of silly to me, but they close Yeah.

James Altucher 37:30
And look at there’s a lot of evidence that vitamin D and then the sunshine helps you get the virus and kids need to go outside and run around and play question no questions. You know, Central Park here is is I don’t want to say it’s crowded but there’s a lot of people there even right this moment and there’s appropriate social distancing and masks and so on, as long as people are doing the thing, right.

Jason Hartman 37:51
But what I meant to say by that is that is part of the PTSD concept. I think people will get used to And maybe be okay with a little bit of a simpler life. I admit that right after this is over, it’s kind of like if you live in a place with inclement weather a lot, the first sunny day everybody’s out, right? And you know, like, your wife wants to go to a restaurant. Sure I get it. But after a while, I think the new normal will be like a lessening of a demand for that, you know, fewer trips, fewer cruises, fewer restaurants, fewer bar, you know, I mean, people still do it. I just don’t think it’ll be as often.

James Altucher 38:33
Yeah, that could be like look at after 2009. I bet you if we did a Google trend search on minimalism, you know, and then and then you had the whole Marie Kondo thing and so on. I bet you minimalism really became in vogue after 2009 kind of the, not that it was the death of consumerism, but it was a sickness, and probably a similar thing will happen here. And I think what I’m seeing when I talk to people and who knows if it sticks is that The whole kind of lifestyle influencer, you see on Instagram and takes like, I feel like that’s over and people now are looking for more Mental Health Solutions, stress solutions, spiritual solutions, and how does that translate into the economy? Look, there’s definitely going to be some cheap stocks out there. Like we’re talking right now over the internet. And bandwidth has increased so much that companies like Netflix and YouTube are saying we’re going to decrease the bandwidth quality or the bandwidth needs of our videos for short term because there’s so much demand now

Jason Hartman 39:33
they did in Italy, when that first day when the quarantine first happened there Yeah,

James Altucher 39:38
yeah. And so chipset help for bandwidth or chips that help for gaming or virtual reality. Those are gonna skyrocket. Of course, Amazon’s always gonna do well, Google’s always gonna do well, you know, tech companies will do well, oil companies will bounce back because there will be demand again, for, you know, oil fuels so much of the world economy is you know, even going back to a $30 oil price or Dollar oil price, you know which will happen within a year or two easily, particularly with the stimulus oil you know, you have companies like shell Royal Dutch Shell, which have gone from 66 to 32 during this crisis pays a 10% dividend, those company and they’re not cutting their dividend anytime soon right? Those companies are going to

Jason Hartman 40:18
exist. This will be continued on the next episode. Thank you for listening and happy investing.

Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to check out the show’s specific website and our general website heart and Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional and we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.

Part 2

Introduction 0:02
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it. And now here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 0:54
Welcome to Episode 1454 1454 and this is Jason, your guide through turbulent times, through good times and bad, I’m here to guide you. And I don’t know, our times good or bad now, I’m not sure. And what do I mean by that? Well, what I mean is that every crisis is an opportunity On the flip side, and that is certainly becoming more and more apparent, with every passing day, with every investor I talked to, with every webinar, I attend, with every everything, all of the different inputs are just amazing, showing the kind of what’s the right word, the kind of resilience the American economy has. I mean, this is just an amazing time. It really is. And I don’t mean amazing in a good way. I mean, it’s like an epic time in a crazy, bad way, you know, from the first perspective, right? The tier one perspective is Oh, it’s a pandemic. It’s awful. It’s a tragedy, and the whole economy has been shut down. And how will we ever recover? Well, the first thing that has really struck me about this is how absolutely unprepared people in companies, even large companies with lots of resources are for a pause in their revenue. It’s absolutely shocking. It really is. And it just makes me keep thinking, if we didn’t have all of these dysfunctional safety nets that we have, right. Would people have been their own safety net? Would they have been their own self reliant backstop against these things? And what’s the number one way, save some money, you know, stop spending so much, you know, have an emergency fund and I don’t mean save too much. money because obviously saving too much money is counterproductive because savings is getting attacked by taxes and inflation, always, always always. But having a rational amount of savings, and an emergency fund is obviously a good proven idea. Even large companies with massive amounts of resources, literally billions and billions of dollars in revenue seem like they’ve had no contingency plan. It’s just okay. There’s a crisis. Let’s go to the government for a bailout.

James Altucher 3:36
I mean, seriously,

Jason Hartman 3:38
this is absolutely ridiculous. But I’ll tell you something. All that said. And I don’t know if you listen to the very unusual shareholders meeting with Warren Buffett that was just on, you can find videos and so forth, but I’m gonna I’m gonna play one of them for you. That’s interesting. This is actually a compilation video of clips. Because one of the things he said in the last shareholders meeting in empty arena, where well Charlie Munger wasn’t even there. But he had some colleagues there, and so forth. Like the guy that ran I think all of his businesses except insurance. And by the way, just a little mention about insurance because Buffett talks a lot about insurance. And one of the really interesting things about the insurance business, and now how we are starting to see and we’re going to see more of it. We’re going to see people use insurance to their advantage in this time of transition and crisis, right? Because many businesses have some form or another or a policy that at least alludes to business interruption insurance, the way landlords will sometimes and check your policies landlords have insurance against lost rent, lost. Rent insurance, okay, by the way, do you know you may have that insurance and not know it. So check your policy. And it may be lost rent for various reasons like, you know, if there’s a flood in the house or a fire or something like that may not apply to a pandemic, but this will be a heavily heavily litigated item. There will be just a huge number of lawsuits that come out of this insurance claim business. And there will be many enterprising attorneys, aka ambulance chasers that that will be soliciting people saying, you know, sue your insurance company, and I’ll make you some money. And so this is all going to happen. But what’s interesting about insurance, and Warren Buffett has made a large, large sum of his massive fortune in the insurance business is that it’s the only business The only business at least that I can think of on the entire planet with a negative cost of capital. What does that mean? The negative cost of capital this is just something to kind of ponder, you know, I don’t really have any action item for you here, but but just understand how it works and why a lot of money has been made in it and lost, you know, many insurance companies go under they they lose money, and they, they have to fold. But the negative cost of capital just basically means that in most in wall, every other business that I can think of at least, hey, if I can’t think of one, please go to Jason Hartman comm slash ask and help me learn Jason hartman.com slash ask and leave your comments, your questions, your thoughts, reviews, criticisms, whatever on the show. And by the way, a lot of times we read those on the air, so we’d love to hear from you at Jason Hartman comm slash app Okay, so every other business, you have to go out and spend money before you can make money. But in the insurance business, you can actually make money before you spend the money. Now, of course, you’ll have to spend money, setting up the enterprise, and maybe doing some marketing. So you’ll have some customers and so forth, right, obviously, but the basic business model is that people pay you before you have to pay for anything. And that’s the negative cost of capital because, you know, they pay to buy an insurance policy for something that may never happen, and you get the money before you have to pay any claims. Then, of course, courthouse records are riddled with claims for what is called insurance bad faith, where insurance companies don’t pay claims, they try to weasel out of it, and then people Sue their insurance company. Anyway, a lot of stuff there. But I just wanted to mention that but Buffett in his meeting, he said Have something pretty profound. And I think you’ve got to really, really listen to this. And remember, my philosophy, as I’ve taught you on this show over the past 16 years or so, is align your interests with the most powerful forces the human race has ever known. What is the most powerful country? It’s the USA? What is the most powerful central bank? It is the US as Federal Reserve Bank, its central bank, the two most powerful forces the world has ever known. Second to that are other countries as superpowers and other big powerful central banks, but none of them eclipse the United States in terms of its government or its central bank, or its economy or anything like that. Right. And so Buffett said, as everybody’s so concerned about what’s going on now, obviously and for good reason, but what did he say? He said again and he said that many times over the years and he’s been right all along. And for those doomsayers that say these crazy things like, oh, the dollar is not backed by gold. Oh, oh my gosh, it’s all backed by anything. Yeah, right. Good luck with that. That’s absolutely nonsensical. And Buffett said, he said never bet against America. never bet against America. And he’s right. And I’ll bet you that he’s going to be right, that statement is going to be right. For the next five decades. Okay. Yeah, you can talk about, hey, China had a quick rise, but, you know, now, it’s got a lot of problems on the world stage. Obviously, a lot of trust issues there. Hey, if you can’t trust your trading partner, well, you’re not going to have a very good trading economy, right. So very important. So here’s a couple clips just quickly from Warren Buffett.

James Altucher 9:59
You might say that our underlying premise, and I think it’s a pretty sound underlying premises that this country will do very well. And in particularly, it will do well, for business businesses done very well, you know, the, the Dow went from 66 to 10,000. Plus, in the hundred years of the 20th century, and we had two world wars and nuclear bombs and flu epidemics, and you name it, Cold War. There’s always problems in the future, there are always opportunities in the future. And in this country, the opportunities have won out over the problems over time. I envy the baby those being born today in the United States. I mean, I think on a probability basis, that’s the luckiest individual that’s ever been born. And I think that they will do very well in life in all kinds of ways. Probability basis, better than existed one when I was born. If I was,

James Altucher 10:54
in your letter this year, you really took aim at some of the politicians who have been going around saying that things Aren’t aren’t going well in this country, he said that things are strong here. Is that a shot of thinking we don’t need to make America great again?

James Altucher 11:07
Well, America, America has never been greater. I mean, you can look at, you know, where we stand, I mean it, it will be greater in the future. But America has never been greater. I mean, this is the best time to be alive in the history of the world. I mean, in terms of medicine, transportation, entertainment, you name it, or just in terms of aggregate wealth. Now, the distribution has gotten more and more skewed in recent years. And it shouldn’t be skewed to quite a degree. But But I would say this skewing has been excessive. But as I mentioned in the letter, I live in a middle upper middle class neighborhood, median income might be 100,000 years.

Jason Hartman 11:41
And the most amazing thing is that Warren Buffett, at times, he’s been the richest person in the world who lives in the most modest home. It is absolutely amazing. He’s lived in the same house since what 1955 or something like that. It’s worth about $800,000 Today, I’m sure Many, many, many of you listening live in more expensive homes. Then Warren Buffett, at times the richest man in the entire world truly amazing. So he’s talking about where he lives and saying, oh, real people make like $100,000 a year where I live. So funny. Every person in that neighborhood lives better than john D. Rockefeller senior lived at the time I was born. In one man’s lifetime, upper middle class neighborhood has evolved a way of life. That’s better than the richest man then in what was the best country in the world, in 1930, was able to achieve he had power and prestige, and all of that, but in terms of medicine, entertainment, transportation, you name it. My neighbors are better off than he was so in this country works and it’s working now. And that’s what was so interesting when we when as the venture Alliance mastermind group, when when I took the venture Alliance to Newport, Rhode Island, and we saw those amazing mansions and one of our venture Alliance members If you’re you’ve heard on the show before our client, Jeff Morris, he commented, he said, You know what, we all live better than these people did. We all live better today than these people did back then the richest people in the world at the time, but it leaves, it’s leaving a lot of people behind that are very good citizens. And we can do more for them. But we don’t want to do it in terms of screwing up the golden goose. And so what he’s talking about there, and why that wealth inequality has increased, of course, is because of the financialization of the economy. Which by the way, he is personally to blame for that. Isn’t that funny?

James Altucher 13:37
We’ll have bad years in capitalism. I mean, it is it overshoots in markets it, it gets overcome by fear and greed and all of that sort of thing. But overall, we move ahead and we not only move ahead, we move ahead at a pretty damn rapid rate. When you think about it. I mean, when, in the 20th century, we had seven for one improvement and then living and we did that, you know, we had slavery for a long time. We had blacks counted as three fifths of a person. We didn’t let women vote for 130 years or there abouts. I mean, we were wasting human potential. And we still are. But we were doing a Marcel for four centuries. But we do keep moving forward and kind of fits and starts. And right now we’re sputtering, somewhat in terms of the economy. But the opportunities Well, we’ll win in the end, and you know, your kids will live better than you live and your grandchildren will live better. And we will find more and more ways to find easier and better ways to build things that we haven’t even dreamt of yet.

Jason Hartman 14:36
All right. So enough of that, anyway, never bet against America. I think Buffett has nailed that. And he’s absolutely right. And as dysfunctional as it is, align your interest with those powerful forces. How do you do that? You do that by what I’ve been guiding you to all along, which is simply buy properties. Leverage. them prudently, but as much as possible, hold them for long term rental. And by the way, I was just listening to john burns, who’s been on the show a few times over the years and spoke at our meet the Masters conference two years ago. And john Burns was talking about how there will be this migration out of high density. He must be listening to my podcast, because I’ve been saying that from the beginning, right. But he was even saying it at a more significant level than I have been saying it. He was just talking about how even people living in lower density suburban style sticks and bricks, apartment complexes where there’s, you know, maybe 300 units, and those are the typical plan there is it’s two three or four storeys, right. It’s not even a mid rise or a high rise like I’ve been talking about, and how people will be migrating out of those two single family homes. Hey, congratulations listeners, because that’s what you been doing. And that’s what we’ve been helping you do for many, many years. Okay, we’ve got to get to our guests today, James all teacher is back on the show. But before that, I’ve been remiss in getting some listener and client comments to you. And I just wanted to share a couple of those real quickly. Before we get to James. These won’t take very long, and then we’ll get back to James altucher

James Altucher 16:26
on just wanted to let you know, really enjoying the latest episodes of the podcast, like over the last couple of weeks, we’ve really stepped up your game. I mean, your game is always strong, but not only the frequency of what you’re putting out stuff, but the guests the episodes you’re using, and even your solo, like call them quantifications. But solo episodes really good. So great stuff. I think in particular, you’re doing a great job of, you know, reporting on what you’re perceiving to be true and also keeping that optimism. So it’s like, here’s where we are. Here’s the questions you should be asking. And here’s how we should be thinking, but also, you know, maintaining that we will get through this and reminding us all that optimism in the end always wins. It’s not like flying positivity. But optimism like believing that it’s still a great time to be alive, that hasn’t changed. And the future has always proven to be stronger. You know that innovation and growth and all of that still will prevail. So amazing.

James Altucher 17:27
Keep in touch

James Altucher 17:31
and find the time

James Altucher 17:35
to learn how to save Jason Hartman real estate investing in Chinese stuff is your message of the day.

James Altucher 17:42
Hey, Jason, so I’m not sure if this was a test to see if I was listening to the podcast or not. But I want to make sure our listeners know that I am not a Dodgers fan. Okay. The link I posted about the cars parked the rental cars parked in the parking lot was At angels baseball stadium, so I just needed to make that clarification. Hey, Jason just want to report and even talking a lot. And you were talking about it before, lots of other people were about the population shift from cities and more densely populated areas into less densely populated areas. And I’m seeing a lot of anecdotal evidence among my connections here in New York. And a lot of people that I’ve worked with in Philadelphia, where I’m originally from, who are indeed doing that, every day, my Facebook feed or Instagram or I get a private message from somebody that I’ve worked with not just actors, some business people as well, who during this time, you know, maybe they have a second home in the mountains, or this one person I worked with. She’s originally from North Carolina and this beautiful rural community that she grew up in and her husband decided, like, you know what, this is a good time for us to recalibrate and so they’re moving. They’ve decided, they’ve already started packing. There’s three more than saw last week, people in New York that are performing artists who realize, Hey, you know, since theatres probably going to be shut down for a while anyway, why don’t I just stay here, work on my stuff. And you know, there’s theaters in this area too. So when they do open back up, there’ll be work here. And I’ll just pick up some other stuff since I know people here. So I’m just seeing at least a few a day. And if I scale that out, I know that if I’m seeing that anecdotal evidence, I’m sure I’m not the only one. So you probably are not surprised to hear this. But I just thought I’d report since I happen to be connected to a lot of people who kind of had one foot in one foot out like New York already. I was just saying, I like the thought never even occurred to me to leave the city during this crisis. Like I consider this my home. This is the first place I’ve lived where I actually feel like I’m home. You know, and I know it’s expensive and stupid and I can get way better places but I just like it here. So for those of us that do stay, I’m excited to see what kind of deals I can get on rent when this whole thing Settle down, I would be definitely Okay, a few hundred thousand people left the city. And we didn’t see that influx of college kids that come in in May, June and July, the jack the rents on everything, where they put seven people in a two bedroom apartment and the rest of us can’t get one. So I’ll be keeping my eyes on it. And I’ll report what I see on the ground with rent prices and stuff. They’ve already come down like our neighborhood. The rents, I’d say, since the crisis began have dropped at least 10%. So that’s just been my observation. I

Jason Hartman 20:27
expect them to go down further. Anyway. So there’s a couple of show voice messages for you. You can hear it’s an amazing time to be alive. People are migrating out of New York City already and a lot more millions more are thinking about it. very significant trend that you, dear listener, investor are going to profit from that trend. So good for you. And hey, we’re going to play some more messages about self management on a future episode. here and and some more stuff so we’ll get back to the show inbox on a later episode. But now let’s get to part two of James all teacher James share your hot stock tips I almost bought Carnival cruises when it got really cheap I mean maybe it still is but that’s a real risky one but Exxon’s cheap I mean I’m not even a wall street guy I like real estate I think income property is the most historically proven asset class in the entire world. I love these. But But you know, I’m actually getting I’m getting greedy I’m getting tempted on on the stock market so so fire away with a couple of tips. So you like shelf?

James Altucher 21:42
Yeah, I like shell. And you know, again, I think the market as a whole if you want to take a risk. Don’t buy you know, spiders spy which is this ETF that represents the s&p 500 represents the overall market. I like RVT a little bit better. It’s the Royce value trust. It also represents the entire market, but it’s a closed end fund. So trades at a significant discount to the assets it owns. So it’s like buying the market at a discount. And because of the current volatility, they’re at a larger than normal discount. So you get the upside of the discount closing. It’s a little bit in the weeds here, but RVT is a better way to buy the whole market is what I’m saying. I like there’s a drone company, AV AV, and drones are gonna do good. They’re already testing out drones for delivery now, like anything that was gonna happen in 10 years is gonna happen tomorrow.

Jason Hartman 22:32
You know, that’s, that’s interesting. You say that because, you know, one of my favorite economist is Joseph Schumpeter, right creative destruction. Yeah. And what any crisis does since Necessity is the mother of invention, is it just brings the future closer to us. We had all the online tools. We had zoom, we had Skype before, but now everybody’s been forced to use them, even people that really resisted that. You know, a bunch of the mastermind groups I’m in for example, You know, they’re doing zoom meetings. And I’m thinking, do we really after this is over? Do we really need to meet in person again, it’s so much easier to just have a zoom meeting right

James Altucher 23:09
now I agree. Like I used to do all my podcasts in person. Yeah. For years and years until this lockdown, right. And now I’m loving doing the podcast remotely, not because I don’t want to see people in person. But it allows me to prepare right up until the very last minute, I don’t have to go anywhere. I could take it’s easier for me to take notes during the podcast. podcasts are just as high quality. It’s easy for me to book guests actually, because they don’t have to be in the city. So and it shows me I don’t have to be in the city either. I can be anywhere. Yeah, so yeah, I do think things are gonna change. I do think the stimulus eventually will work. And so I’m hoping we’ll see a mini surge in q3 q4 of this year, and then in 2021, I’m hoping we see the big surge as people finally, you know, start buying real estate again or start traveling more again. But, you know, I do think there’s too much uncertainty at the moment. Although there are bargains I probably wouldn’t dive in. By the way, you know, what’s been interesting too, is law enforcement. So, in England, there’s been a surge of knife attacks against police because there’s a little bit of social unrest. I shouldn’t just say any, I should say all countries in the US to

Jason Hartman 24:18
anywhere they have gun control, you get more knife attacks, you know, so,

James Altucher 24:22
right. And then there’s a little bit more social unrest right now. And I don’t know, I think, you know, any search the right now I’m out of the markets completely I own one stock. So I’m just, I’m not recommending this stock. I’m biased. So it’s called raft technologies w RTC and they introduced a non lethal weapon. And, you know, I don’t really know anything more than anyone about it, but it’s the one stock I own because I do think the world is moving towards, you know, non lethal police forces for a solution. No, you know, police officers don’t want to wake up in the morning and say, today’s the day I shoot somebody, I really want an alternative between beating someone up and shooting Someone and this this rap technologies as a weapon or a device that wraps a cable around you at the speed of sound. And you can’t move it just like Batman. And people, states and countries and governments need need something like this. Yeah. So it’s one thing I own it, I feel economy independent. There’s always going to be a police force and security guards for stores and so on. And so that’s the only thing I want, but I am looking at drone companies like Avi Avi iRobot, IRB T, and video, the chipmaker NVDA, Palo Alto Networks, whatever their symbol is, I forget Royal Dutch Shell on the oil side, you know, and then I’m just seeing if there’s I don’t I’m curious what you think I don’t really see any deep deep value stocks yet also, which makes me nervous.

Jason Hartman 25:45
Yeah, I don’t. I’m not thinking like it’s totally time to dive into everything yet. But again, I’m not a stock expert, but I do want to ask you about this. So last week, I interviewed Dottie Herman, the CEO of Douglas, Elliman, real estate On the show, and of course, she’s a New Yorker like you. She was in the Hamptons when we did the interview. And we talked about money. She’s

James Altucher 26:06
not a New Yorker, by the way. Everybody, everybody says they’re a New Yorker and they all

James Altucher 26:13
went to the Hamptons, and I’m in I’m in New York.

James Altucher 26:17
Right? Okay. Okay.

James Altucher 26:19
Bart York City. I’m in New York. I’m right across the street from my bar. I’m here with with the gang. You’re the you’re

Jason Hartman 26:25
the real deal. Stick it out. Okay. All right. Here. Yeah, good deal. So anyway, um, oh, but she was you were saying she said, Well, I asked her about my theory that after the lockdowns lift, will there be a mass migration from high density to low density living. And, you know, again, it could be just 10% of the people that live in high density areas, and high density defined by not just New York City, but by anything where you’re typically living in a A five storey or more building where you’re forced to take an elevator, and you’re you’re very likely to be using mass transit. Okay, um, you know, even after there’s a vaccine, better treatments, whatever, I think there is going to be kind of a PTSD a sort of suspicious nature with people that hey, you know, maybe there’s gonna be another virus, you know, there’s What’s the next one? Will it be SARS again? Will it be, you know, Hey, remember, you know, now everybody’s suddenly watching and learning about the Spanish Flu back in 1918. So, will there be this mass migration like that? And interestingly, she has a self interest. She runs a big New York real estate brokerage and she says, I think people are moving. I guess on one side, you get a lot of listings, but ultimately you want people moving into your market to make money long term.

James Altucher 27:51
Well, don’t forget she sells also in I mean, Douglas, Elliman the company sells in or represents people in Westchester. The Hamptons, New Jersey. This suburbia. Yeah, got it. So she she benefits either way. But it’s interesting. She says that. I agree, though, because who’s going to come out of this day one and say, You know what, I’m gonna finally move to New York City. Like, right, I don’t care, they might have a second wave and they’ll shut down the whole economy again. And maybe there’ll be riots in the streets. I’m just gonna, I’m just gonna buy and, and furthermore, no one’s gonna say, I can’t wait to fulfill my lifelong dream of starting a pizza restaurant in the middle of enhan. Like, they’re just not gonna do that. So I agree with you and it’s gonna and that means there’s gonna be less things to enjoy in New York City and more reasons to move away and not just in the suburbs of New York, but down to Florida. I was I was just looking at real estate prices in Florida.

Jason Hartman 28:43
Now one thing on down the weather is beautiful. In fact, James I coined a new term just yesterday to describe Florida. Now note that I’m from California, almost all of my life, the Socialist Republic was super high taxes worse than New York. By the way. worse. Yeah. And I moved here two years ago and I’ve coined a new phrase I call it Florida has luxury whether luxury whether it’s a new kind of weather, like

James Altucher 29:12
Yeah, I love Florida weather I love right where you are Palm Beach, that whole area of Palm Beach, Boca Raton, Fort Lauderdale del Rey, Miami. I like that whole quadrant. But coming

Jason Hartman 29:22
down during your Missile Command game is that Missile Command behind you

James Altucher 29:26
know, Missile Command is a horizontal box that is defender just Stargate

Jason Hartman 29:32
robotron, the more vertical game, you’re reminding me of being a teenager when I used to play video games all the time? Yeah,

James Altucher 29:37
yeah, that’s why I got this is $300 for that box you should get it’s got 50 games on it. But I’m, what I’m hearing from real estate brokers is that the listing prices have not yet changed to put the offers are coming in 20 to 50% lower right now, maybe people think they’re gonna get a bargain. And maybe that is going to be over once the economy reopens. But some of those offers have been accepted as well and we’re just Just not seeing the change in listing prices but but apparently they’re seeing and I don’t know if she had any insight into this, but apparently they see they are seeing the change in in offers out there. But we’ll see if that holds again. It’s one of the unknown unknowns. Yeah,

Jason Hartman 30:13
right. Yes. Yes. Rumsfeld. Yes.

James Altucher 30:16
It is in the room style known unknown matrix. I love it.

Jason Hartman 30:19
Well, he is there anything else you want to share with our audience? You know, just anything I haven’t asked you. I know. Yeah. I mean, you’ve got so many books, I wouldn’t even know where to go with your book said there’s just so many but I loved choose yourself. That concept that there’s no gatekeeper. And in about a year from now, you’ve got another great book about skipping the line, which I can’t wait to read that one.

James Altucher 30:39
Well, I think I just want to remind people that that even if there is this PTSD, even if your job seems insecure, or or it’s over or you’re furloughed a little too easily and you get nervous or this time alone has made you think you don’t really want to go back to your job or career. Just I think there are a lot of opportunities out there. I think the stimulus there is going to be money in the economy. So the stimulus is a very real trillions and trillions of dollars between Congress and the Federal Reserve. We’re talking like six $7 trillion. That’s real money and and the dollar is not going to inflate. So quickly. There will be opportunities when everyone else is scared to kind of step up and change your life if you want or start a business or invest in yourself, maybe don’t buy stocks, maybe start taking a photography class and, you know, change careers or or come up with an idea for, you know, any kind of business but,

Jason Hartman 31:37
you know, you wrote 40 alternatives to college. Right? Yeah. And you know, what’s interesting about this, too, is that for the smart and ambitious people, they’re using this time as a huge self improvement program. You know, they’re either improving their mind they’re taking courses online, they’re exercising. And interestingly, you know, the schools, the colleges and the universities and just school school has a Sent everybody home to learn. And I think this is going to cause a collapse in ridiculously high student tuition for colleges because nobody’s going to pay 50 grand a year to learn online without getting a college experience and all of that college real estate, because almost every university now is basically a hedge fund real estate investing company. Right and a branding agency. It’s ridiculous how far they’ve gotten away from their mission. I can’t blame them. I mean, I would do it too if I was there, but you know, all of that college real estate is gonna it’s gonna be reused it’s gonna come up for sale those dorms that can be sold as condos are turned into apartments or I don’t know what’s gonna become ghost towns like will become ghost towns. Yeah,

James Altucher 32:46
I agree college is clearly the tide has come in and the colleges were left standing naked on the beach.

Jason Hartman 32:52
Yeah. The emperor has no clothes. It’s a ripoff. Yeah,

James Altucher 32:56
the college is clearly a scam because they still Like you said, they sent everyone home. Yeah. And they were like, oh, we’re kidding. You don’t really need to be on campus to get the college experience. Yes. Do it all online. Don’t look, but don’t look at Coursera where you have really great teachers teaching up to date stuff, or Code Academy or Khan Academy or master class or LinkedIn learning. Yeah, don’t don’t get those which have really great teachers and stuff. Just keep going to our old out of date textbooks that we charge you $1,000 a book for and by the way, get the hell out of the dorm rooms, because we got to take those over, but we’re not

Jason Hartman 33:32
giving your money back. They won’t even refund the money. It’s unbelievable. What is this? 101 possessions

James Altucher 33:37
nine tenths of the law? We got your money See you later. So I don’t know why people will be excited about going to college. But you know, we’ll see.

Jason Hartman 33:44
Well, we’ll see. I agree with you though. I think again, it’s one of those things that what would have been a conversation five to 10 years from now is going to become a conversation tomorrow much sooner which is which is creative destruction. It’s great. And you know, the the bottleneck in the college. I call it the the university Debt enslavement complex. Okay, like the military industrial complex, the bottleneck seems to be the accreditation concept, right? You know, like the Khan Academy, or Coursera is not accredited, you can’t get that document, you can’t get that degree. And as soon as they somehow figure out the roundabout to the accreditation thing, I mean, certainly some companies like Google will hire people without a degree now, and that’s awesome. Because there are tons of smart people walking around without degrees. Then when you get around the accreditation bottleneck, then I think things really work.

James Altucher 34:36
I’ve thought a lot about this. So one thing is you and I know that that accreditation aspect, it doesn’t really make any sense. Like you say, you know, Google’s actually hiring people without degrees, and many people would be willing to take a chance if they see you have the skills they’d rather have that than an MIT degree. Sure. But, you know, kids are influenced by their guidance school counselors and their other friends and their peers. They think you need college. It’s really the kids now they think you need college to get a job. Yeah. And it’s not true. But, you know, maybe there’s a business opportunity. Maybe you could you get a panel of experts or whatever educators and you say, these online courses across these different platforms are what we’re going to credit. We’re gonna say this is a worthwhile computer science degree and we’ll

Jason Hartman 35:24
verify if if there’s a, a financial course that James altucher and Ray Dalio endorse, and you have to pass it. A Wall Street firm should hire that person. Right. Yeah. And I think I think that

James Altucher 35:37
is a reasonable business plan, there’s probably gonna be some business models, we’re not even aware of now that that are going to be in that category, because remote learning is definitely a thing that’s gonna ramp up. Big time. Yeah. And, you know, I think also, you know, maybe just people won’t care about accreditation at some point, maybe you know, which is the other extreme and the opportunity Now is creating more and more online courses. So, you know, an online course is fairly easy to set up. It’s a good way to make a living. It’s one of those make money while you sleep things. And we all have the capabilities to be expert enough to teach non experts something right. And so if you just start now, within two years or less, you could have a great online course that you’re teaching and make a lot of money.

Jason Hartman 36:22
Yeah, and just for the record, I want to say that I don’t think College is a scam in and of itself. I just think it’s massively overpriced. You know, that’s all you know, I think if you could work your way through school with a part time job and pay for it, it’d be okay. I have no objection to that. I just think when it increases in price it three or four times the rate of real inflation that’s a complete scam. It’s

James Altucher 36:45
it is increased. tuitions have increased faster than inflation every single year for 50 years in a row. Well,

Jason Hartman 36:52
so it doesn’t ensures the loans and floods into the system. You get inflation what a concept right? Yeah. Absolutely. James, give out your website

James Altucher 37:00
it’s James altucher calm or you could find me on Twitter at jL stitcher or find me on Instagram at Al Dutcher or find me on tik tok at James altucher just started doing my Tick Tock videos during this break.

Jason Hartman 37:13
That just proves beyond the shadow of a doubt. You are hip and cool. You do Tick Tock. I hope

James Altucher 37:21
my kids Listen to this. And you could tell them that

Jason Hartman 37:24
Yeah, well have them listen. Definitely that their their dad is hip and cool. That’s for sure. James altucher. Thanks so much for joining us,

James Altucher 37:31
Jason. Thanks so much. Thanks again for having me on the show. I really enjoyed it.

Jason Hartman 37:39
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