FULL TRANSCRIPT
Slava Rubin (00:00)
In this episode of Smart Humans, have one of my favorite guests back on again, Anthony Scaramucci, who's founder and CEO of SkyBridge Capital. He discusses what's happening in Iran, what should you be thinking about today's economy, and of course, he gives us his awesome picks. There's the public markets pick, the non-public markets picks, and he throws in even an extra bonus.
Slava Rubin (00:48)
Hello and welcome to the latest episode of Smart Humans. I am super excited for today's guest. We actually have one of my favorite guests, if not my favorite guest, Anthony Scaramucci from SkyBridge. ⁓ Very excited to have you here, Anthony, welcome back.
Anthony (01:02)
Just
because Jews and Italians love each other? that what the reason is? Possibly.
Slava Rubin (01:06)
I just think you have wonderful hair
and I just love having you on the show. Always full of opinions and always great picks as well. know, typically we go through your background, how you got into everything, but we've already heard that before. We have other podcasts. I just want to dive into, right away into the state of the economy. What's your predictions? What do you think are good picks? But before we go there, you know, you've actually already been on the show ⁓ three times, very generously.
Thank you very much for all your time going back even to 2022. So just for the listeners to know, you picked BTC back in 2022 at $30,000 and that would look very good today. You know, hovering around $70,000 and you also came in on 20 and 2024, late 2024 and also 2025. You gave us some picks in 2024, including Microsoft.
which is really interesting. You also gave us SpaceX. By the way, you predicted SpaceX might be worth two to three trillion dollars three to five years from now. I hate to say it, but that sounds kind of spot on.
Anthony (02:18)
I mean, you know, listen, I've done a lot of work on SpaceX and I was lucky enough to be an earlier investor in SpaceX and sort of the thing about life. You know, you don't know where your winners are going to come from, but that was a good one. Anthropic has been a good one. But we're talking about picks today. So let me give you one. Can I fire in a pick? Yeah, I mean, well, well, first of all, let's talk 30 seconds with the macro environment. So the macro environment has been distorted by the war. ⁓
Slava Rubin (02:37)
You want to just throw in a pick? Okay, sure.
Wait, wait, just really
quick before you give me all that real fast, just the other picks you gave. So you also had, ⁓ you had a BTC combo with a little bit of L1s, some Solana, some Polka Dot, some Avalanche. Polka Dot and Avalanche definitely didn't work out, but you did say you would hedge there. You do 50 % Solana and then the other split into those other ones. Solana hasn't done so great either since the time that you picked, but it's okay. Overall, I actually did.
you know, a basket with the Anthony basket, if you put 10K into each one of your investments and the market, the public would have done quite well following you. So just putting that out there. You'll. Well, one last thing, one last thing, one last thing is last year you also picked in the beginning of the year, a year about from now you picked X back when X was a standalone company and then it was bought by XAI. And next thing you know, it's part of SpaceX. So even got more SpaceX.
Anthony (03:23)
I mean, listen, I'm, you know, look, I've had...
Slava Rubin (03:42)
You did pick Microsoft again back then. Microsoft has not been such a strong performer since you picked it. You also picked Berkshire Hathaway several years ago. So it's been doing fine, but in
Anthony (03:53)
Well, mean, good. At
least the good news is I'm telling you stuff that's in my portfolio. So that's good, right? So I'm talking my own book or eating my own cooking. listen, I think the big message before we go to the macro, the big message is for your viewers and listeners, buy quality and hold quality. So everything that you just mentioned, I still hold. I think the weaker things like Polkadot and Avalanche, believe it or not, I still think are coming back. I just think we're in a bear market now.
Slava Rubin (04:02)
All right, talk to me macro. Talk to me macro and picks.
Anthony (04:23)
for anything that's not Bitcoin. We're in a Bitcoin bear market and then we're in an even more atrocious raging bear market for ⁓ crypto that's not Bitcoin. But the macro backdrop has been interrupted by the war and the war is causing price increases and the president will have to, again, these are my opinions, but the president will have to put ground troops in place in the area of Iran around the Strait of Hormuz.
And he'll have to push the Iranians off the strait. And he'll have to set up the Navy in a way with mind sweeping activity and literally police the strait. He'll probably have to get an international community in there. The Gulf States, ⁓ maybe even the Europeans, because what you're not going to do, and Larry Fink said it better than me, you're not going to resolve the war, leave the regime in place and have them threatening the strait. You're not going to do that. You're also not going to have them hijacking people for tolls.
on the straight. And so you'll have a permanent plateau of 100, possibly even as high as $150 a barrel that'll put the whole world in recession, especially the United States. So got the war started now. We can talk about the positives or negatives of it. No sense in doing that. The war started and we got to get out of it, but we can't get out of it by leaving the straight of Hormuz threatened. It's a 21 mile straight in terms of the width of it.
and 20 % of the energy of the world is coming through the strait, and they can't get it across Saudi Arabia by pipeline or rail, so it's just not gonna work. So that strait's gotta get opened ⁓ smartly. Again, I think it's a terrible regime, and don't get me wrong, I'm not for them in any way, shape, form, but smartly, they realize they can hold us hostage by closing the strait. Remember, they can't beat the Israeli or the American military.
but they can do sort of a North Vietnam thing and potentially try to outlast us by creating economic hardship in the world. So we gotta get that cleared up. Once that is cleared up, you'll see a rebound in oil, meaning oil will drift back into the mid to low 60s, and you'll see that trajectory for interest rates return back to something that's slightly easing as opposed to potentially raising rates, which if the word
Slava Rubin (06:45)
Sorry, so
putting your prediction hat on, when are we gonna see oil in the 60s?
Anthony (06:52)
Well, I'm going to be aggressive here. I'm going to be optimistic. I think that they'll get the straight cleaned up in the next two months. And I see by midsummer, people will feel, you'll know when the insurance premiums are dropping on the tankers, but I think you'll get, I think you'll get back to the mid sixties by mid summer. And I still think you get two, three rate cuts by the end of the year. Yeah. I'm on bullish. mean, I also think that the prosecutor that's prosecuting Jerome Powell,
Slava Rubin (07:12)
Wow, that's very bullish.
Anthony (07:22)
I don't know if he did it intentionally or by accident, but he admitted that he doesn't have any evidence to prosecute Jerome Powell. So at some point that case has to get dropped and a result of which Tom Tillis will remove his blocking of Kevin Warsh going before the committee and then eventually being voted on for Senate confirmation. So you'll get Warsh in place. You'll get two or three cuts at the end of the year. And there's another thing going on in the marketplace right now, which I think is overblown.
And that is the destruction of software companies as a result of the advent of a gigantic AI and the fact that something like Claude can come in and start writing software code. So I'm going to give you one name, ⁓ SAP. So SAP has gotten its ass crushed. ⁓ I think it is ⁓ trading below or near its Morningstar fair value estimates.
to me it has very predictable cash flow and it's gotten crushed because of the war and it's gotten crushed because People are negative on software right now but I think they'll come to realize that there's a big cloud business there and there are other applications inside of SAP that I think are ⁓ consistent Steady eddy revenue generators and there's a big moat about their business if you think about all the people that are on their cloud
They're not leaving the cloud anytime soon. And so it generated $8.2 billion of euros in terms of free cashflow in 2025. It's heading for $10 billion of euros in 2026. And they just announced a $10 billion share repurchase program. Okay. So if you put all that together, the company's generating a return on capital.
Of about 8 % just in terms of munching up its shares and I think you'll still get a 10 % plus top line growth so cheap valuation You know average price target for Wall Street is about 340 the current price is you know, it's moving So I have to look it up, but it was about 205 when I put this little selling document together for you so I think
Slava Rubin (09:42)
Is this
in your own book like you were before with Microsoft and Berkshire Hathaway?
Anthony (09:45)
Yeah, yeah,
I just bought this. This is something I think will do very well. ⁓ You know, look, you've got the Department of Justice investigation on the Terra data settlement. There's some investor skepticism about the new Joule AI assistant, which I think has been clunky for them and they it would be better served just teaming up with an AI group. think Microsoft weirdly has had the best strategy, which is ⁓
let these other people put up all the capex and fight it out on AI. And then I'll create a licensing agreement and get them on my rail system known as the iPhone, right? And the iOS system. But you know, the one liner SAP is a toll booth on global enterprise computing. ⁓ And every company is modernizing. Every company that's modernized has to go through this toll booth. And ⁓ they're about to enhance themselves with some AI overlay.
on their systems. So I think it's very cheap and I don't buy, I don't buy that software is dead because of what's going on in AI. I believe that software looks to most of Wall Street right now is uninvestable. And so you just have to see forward through that. These companies are very smart. They've got a ton of free cashflow. They'll adapt around whatever the concerns are, the skepticism.
It's a cheap stock and it's growing. And if interest rates are getting cut, I think this is going to be a real big winner.
Slava Rubin (11:16)
Perfect. Before we get another pick, let's do a lightning round on the economy. You mentioned some of these things already, but let's just really quickly. So 12 months from today when we have you back, is the U.S. economy in recession or not?
Anthony (11:30)
Well, I mean, it's a big I'm going to take a big gamble on this. I think the economy is going to be growing at a pretty fast rate. I think the again, this a political.
Slava Rubin (11:38)
I'm gonna put you on
the spot. I'm gonna put you on the spot. 12 months from now, yes or no, recession or not? Not a recession. So interest rates are up or down.
Anthony (11:42)
not a recession, economic growth.
down a little, not down a lot because it'd be too much growth.
Slava Rubin (11:55)
So interest rates, so Fed funds is down.
Anthony (12:00)
Probably down 50 to, probably three cuts. Three cuts in the next year.
Slava Rubin (12:01)
How many pipes?
Okay,
three cuts in the next year. How about inflation?
Anthony (12:10)
So I was going to say flat, but down from the trend that we're on right now. We're heading towards 5 % inflation because of oil and gas prices, but that's going to come down. So flat on the trend that we were on prior to the war.
Slava Rubin (12:11)
Up, down, or flat?
Okay, so kind of bullish. And then with all that said, I think you already said that there's gonna be some sort of ceasefire in the war in the coming months. That's your prediction.
Anthony (12:43)
Yeah, it won't be what the Americans want. The 15 point plan that the Americans want include the Iranians getting rid of their nuclear arsenal. They're not going to do that. And they're also not going to accept Israel's right to exist. And so that's going to be a persistent problem for Israel. You you can't be the prime minister of Israel. I don't care if you're left or right. You don't have to be Netanyahu. OK, whatever you guys think of Netanyahu.
Slava Rubin (12:53)
Right, right.
Anthony (13:12)
You can't be the prime minister of Israel where there's a country 800 miles away that's saying that you don't have a right to exist, and they're gonna wipe you off the map. You have a problem. You have a national security problem. And so...
Slava Rubin (13:24)
So with all that
said, there's going to be ceasefire in the coming months, no recession, Fed funds coming down about 75 basis points, interest rates kind of flat, inflation kind of flat. So what's the economy going to be like? What's the stock market going to be like? So the stock market would be up, down, or flat from 12 months from now.
Anthony (13:45)
Yeah. mean,
you know, I mean, I think remember stock market will retrace the Dow will go back through 50,000. The S &P will retrace where it was when it was a few weeks ago at or near its all time high. I think this right now is an interim period of of a buying opportunity. Frankly, I don't see the current trajectory, which is benign growth, trending down inflation.
to be completely interrupted by this war. I don't see it.
Slava Rubin (14:18)
Okay, perfect.
You've given us your public markets pick, which is SAP. You gave us lot of homework on why it's in your book. What about the non-public markets, whether it's private markets, crypto, et cetera? What would be your pick in the non-public markets?
Anthony (14:35)
It's a little harder to access though. SpaceX was a little easier to access for people, but the name that I love right now in the non-public markets is Liquid Death. Do you know Liquid Death? Yeah.
Slava Rubin (14:49)
water.
Yeah they're sponsoring a lot of things.
Anthony (14:53)
So Liquid Death to me is one of these stealth brands doing, you know, remember, what do you want to know about a brand? You want young demographics. You want people welded to the brand for different reasons. know, some of it's flavor, some of it's the cool looking nature of the brand, some of it's the affinities that you just mentioned as it relates to the partnerships. We just took a position in Liquid Death. It's a non-tech name.
but it's using tech guerilla-like marketing. Okay, frankly, I think this is a master class in branding. Okay, their tagline is murder your thirst. Okay, and they are now going everywhere. They're going into Whole Foods, they're going into the local supermarket, the CVS, the drug stores. It went from $3 million in revenues in 2019 to their last rep...
reported revenues in 2024 of $333 million. Okay, so they're growing, and I'm not making these numbers up, 110x growth in five years. Okay, they've introduced iced tea, they've introduced sparkling juices and sodas, okay? And they're just outpacing everybody in their industry. And I predict that they're gonna get purchased.
Slava Rubin (15:58)
Nice.
Anthony (16:19)
Okay, they're in over 133,000 stores now worldwide. They hired Goldman Sachs.
Slava Rubin (16:24)
Sorry, really quick.
you mentioned SAP was 205 entry. What's a good entry for Liquid Death on our Enterprise Value?
Anthony (16:30)
Okay.
Okay. So that's a good question. And I don't have a really good answer for that because we bought into the $2 billion valuation. It's probably at a $7 billion valuation right now. And I would say that it's probably going to go public. And I, and I think it probably goes public at a $10 billion valuation. And I would be a buyer on the public market because I think this thing is still growing like a rocket ship. And I think it will get acquired. Pepsi.
or Coke will acquire liquid death. you know, I'm a law just fully disclosed. I'm a longtime Pepsi and a longtime Coke holder. If you hold Coke and Pepsi, you're getting the market's return with a above market dividend. And so I like I like it, you know, and again, be very hard to buy right now. We we saw a round from Goldman at one point four billion. OK, was their series E round in March of 2024?
They did a subsequent round of two billion, which we participated in. ⁓ But, you know, I don't know. I think they're going to be I think they're going to be I think it's going to be a home run that that company.
Slava Rubin (17:37)
Those are great pics.
I love it. We always think of you as BTC guy So you still bullish on BTC as your last words?
Anthony (17:49)
Yeah, I still own a lot of BTC. I think that, you you're not going to get the Clarity Act deal done this year. So it'll probably put some pressure on BTC right now, but we're heading towards the second half of the halving cycle. And usually when you're in the second half of the halving cycle, which we are, by the time you get to October, right? Cause then that'll be 18 months for the next halving. You start to see a rise in
in Bitcoin. So this is cyclical downturn, very consistent with what's happened in every other four year cycle. And I think we touched our intra cycle low of 60,000 is trading pretty well here, given all the commotion in the markets. so I think this well, I mean, it's hard to predict, but I still have it's more of a
Slava Rubin (18:34)
Any prediction for what does end of year look like for BTC?
Do you think it hits ⁓
100?
Anthony (18:43)
I mean, listen, I do think it's going to get through 100. If it goes to 100, it's going to 150. It doesn't move like that. If I'm right, it's going to 150. By the end of the year, if I'm wrong, we're probably going to trade in here. I think this is an asymmetric trade right now because if I'm wrong and it'll be roughly where it is right now at the end of the year. But if I'm right,
Slava Rubin (18:50)
by the end of the year.
By the end of the year?
Anthony (19:10)
I think it's going 150. I don't think it goes from here to 100. I just don't think that happens in something like Bitcoin. All right, bro. I gotta hop. I appreciate it, brother. Great to be on with you. All right. See you soon. All right.
Slava Rubin (19:18)
Perfect. I know you have to jump to another meeting. Anthony, thank you very much for your time. Have a good one. Bye.
