Like many things in our world today, Financial Media is an unmitigated fucking disaster. And while CNBC remains at the front of the circus clown parade, there's a new clown in town nipping at its heels.
Anyone paying attention knows that CNBC is a joke. The problem is that the joke comes at a high price, and at the expense of others. The network has been a tireless enemy of its naïve and unsuspecting viewers for decades now. Always bullish (and never in doubt), shameless hucksters like Jim Cramer have been peddling fentanyl-laced investing drugs and dreams to vulnerable viewers looking to grow their capital and provide for themselves and their families.
Since CNBC's inception, markets have blown up in spectacular fashion multiple times. Unfortunately, memories are short. New investors enter the market buffet every day. The network's smiling pundits are more than happy to fill their plates with financial bullshit.
And then, just when you think financial media can't get any worse... Just when you think there can't be anything possibly worse than the cast of unaccountable clowns at CNBC...
Real Vision appears.
Led by its ever-confident founder, Raoul Pal, Real Vision saw an opportunity to fill its coffers with crypto content. The only problem? Raoul Pal recommended investors plow their entire net worth into digitized assets. And the financial wreckage has been off the charts.
The recent bear market in risk assets crushed equity markets with major indices like the NASDAQ down over -24%. But as bad as equity markets have been, the crypto landscape has been torched. Case in point, the ‘blue-chip’ asset of crypto, Bitcoin, is down more than -55% from its highs. Nevermind Luna... which flew Mach 3 from $118 dollars just over a month ago, to a tiny fraction of a fraction (of another fraction) of a penny today.
It wouldn't be hyperbolic to call that a bloodbath.
For the record, we're neither pro-crypto, nor anti-crypto. We're all about process, following the math + data (not narratives) and dispassionately risk managing money.
Indeed, the rallying cry of crypto has merit. Transforming payments and the global monetary system while disintermediating Wall Street hucksters is a laudable goal. And yet, the nature of crypto communities is hyper-tribal. Look no further than "true believers" taunting non-believers with insults like “have fun staying poor!” on social media. Meanwhile, the bubbly speculation over 'the-next-big-coin!' leaves a lot to be desired.
Take so-called 'Stablecoins' like UST, which is part of the Luna ecosystem. After Raoul Pal lauded his team for "nailing Luna... really great call" in December 2021, Luna and UST soon collapsed. The 'stablecoin' lost its peg to the Dollar and fell over -99%.
Making matters worse, Real Vision's fearless leader told his community of investors he took what was a small weighting in crypto from “20% of my portfolio” to “now 100% crypto.” This was in November 2021. It was the very peak of the crypto bubble when the entire space flew like Icarus to almost $3 Trillion in market cap.
Since then, the total market cap of crypto has fallen over -55%.
WATCH THE 50-SECOND VIDEO BELOW
Reckless, all-in 'advice' like this devastated everyday investors. People like Raoul Pal should know better.
Take a minute to read the LUNA subreddit. Pinned to the top of the forum is a list of national helplines for people to call who are struggling to cope with the financial losses and considering suicide. The stories are tragic. The consequences of the unbridled shilling of sh*tcoins cannot be understated.
We want to be crystal clear: Putting 100% of your portfolio into a single speculative asset class is beyond reckless and the furthest thing from responsible investing. Most people know that. The burden of responsibility falls on the likes of Real Vision and CNBC for bringing on ‘expert after expert’ to convince you otherwise.
At this point, is there any difference between Raoul Pal pumping crypto coins and Jim Cramer’s screaming and honking about SPACs and the garbage returns of his 'Magnificent 7?'
Not really. In fact, it might even be worse. In a twist of irony, Real Vision encourages people on its website to "Sign up today and discover why Real Vision is the most respected name in financial journalism. It just may change your life."
*To be clear, Real Vision changed people's lives, just not necessarily the way they may have wanted or imagined.
Okay, let’s zoom out.
Why is present day Financial Media in shambles? Let’s quickly revisit the blossoming of an industry that has (to put it simply) screwed over so many workers and families.
In the mid-90’s, the democratization of finance began with promise. Rather than getting gouged by boiler room stock jockeys, internet-based brokerage houses brought investing to an entire generation of self-directed retail investors with ads telling Americans to “Boot your broker.”
The 'retail investor' community was born.
This was quickly followed by the Dot Com boom and the resulting bust. Retirement plans were dashed, fortunes were lost while IPO-crazed investment bankers lined their pockets.
In a fitting preamble for what was to come, an entire industry was rising around stoking investor FOMO for the next get-rich-quick stock pick. CNBC rode the retail investor wave to prominence throughout the mid-to-late 90s and early-aughts, as Jim Cramer began regular appearances on that network.
A mere 8 years later, the democratization of finance had once again gone awry. This time Wall Street peddled teaser rate mortgages to subprime borrowers and under the guise of promoting the American dream.
All of this came crashing down yet again. But not before a massive bull market run in stocks that was propped up by stock pumping media outlets that couldn’t admit the dopamine days were done.
Many readers will remember March 11, 2008. That's when Mad Money host Jim Cramer told a viewer, "Bear Stearns was fine!" at $62 per share. Shortly thereafter, the investment bank (which was heavily exposed to subprime mortgages) was mercy folded into JPMorgan Chase (read: bailed out) at $2 per share. Incidentally, Jim Cramer still has a job despite this egregious advice and hundreds more just like it.
Moral of the story? From tulips to subprime mortgages, Wall Street always knows how to make a buck off unsuspecting retail investors.
If only the story ended there…
Real Vison Enters, Stage Right
The original idea behind Real Vision was wonderful; it began with such promise. Real Vision was a welcome dose of Adderall to cure the ADHD of financial media. No more short sound bites and empty, stock pick-based financial media; simply allow smart investors to talk about their investing style and outlook in a thoughtful, long-form style interview.
Over the years, a number of our analysts appeared on their platform, as well as our Founder and CEO Keith McCullough. It was a breath of relief and a thousand miles away from the CNBC bullshit.
Alas, all good things come to pass.
Flying high on Federal Reserve cocaine, the crypto market tripled in market cap between 2020 to 2021. Real Vision saw dollar signs and made a big pivot which ultimately led to its undoing. It wanted to capture eyeballs from the insane amount of capital pouring into crypto. In November 2020, Real Vision launched “Real Vision Crypto.”
It was excellent timing on Real Vision’s part. The retail investor community got a massive boost during the pandemic. New, would-be investors, locked in their homes with nothing better to do, opened up roughly 25 million new brokerage accounts between 2020 to 2021.
As the pursuit of the next big 10-bagger cryptocurrency took off, Real Vision rode the wave...
The platform then proceeded to devolve into shilling all manner of crypto nonsense. The company which once championed itself as the ‘antithesis to CNBC’, became an absolute wasteland full of financial garbage. Its sole purpose seemed to become pumping crypto on behalf of its lack-of-vision leader, Raoul Pal.
Raoul & Co. lead investors blindly off the macroeconomic cliff.
In September 2021, Raoul Pal made his call: Bitcoin will trade between $250,000 and $400,000, and Ethereum will hit $20,000 by March 2022.
The result? Raoul was off by a mere 500%.
The Hedgeye Process vs. The Real Vision Pump
Using quantitative modeling rather than qualitative quacking, Hedgeye’s Bitcoin Trend Tracker signaled BEARISH TREND on Bitcoin and Ethereum to subscribers, getting them OUT before the impending #Quad4 (economic recession) macro turbulence. Since?
- Bitcoin is down -38% to $30,112
- Ethereum is down -49% to $2,056
Nowhere near $300,000 or $20,000.
In fact, what it looks like is a lack of care and respect from Real Vision for their subscribers, trading in transparency, trust, and accountability for clicks.
It wasn't as if Raoul wasn't warned. In a tweet exchange with Hedgeye CEO Keith McCullough on January 14, Keith wrote:
"And we ain’t in Quad 4."
The rest is history.
We actually hosted Raoul on HedgeyeTV for a Real Conversation with Keith in November 2021, before realizing he either a) went batsh*t crazy, or b) became a sellout (or quite possibly both). Here’s a taste of the prison-food-quality financial advice he’s giving:
“I started a buying a bunch of other coins, tokens, stuff that I really didn’t know a lot about. So, I just took a small weighting, like 20% of my portfolio, which is now 100% crypto, and has been for quite a while now, since maybe May of last year. So, I bought a basket saying, ‘I’m an idiot, I don’t really understand any of this stuff, but I want to see how it trades.’”
Holy lack of risk management, that may be the worst investing process on the planet. Moreover, we DO NOT recommend subscribers plough 100% of their portfolio into ‘stuff they don’t really understand.’ (p.s., 20% is not a small weighting, especially for something you ‘don’t really know a lot about.’)
Lo and behold, that was basically the top for crypto. Since Raoul’s interview on HedgeyeTV, crypto has gone nowhere but DOWN.
We don’t lambast just to lambast, we call out bullshit because our business model/entire reason for being is to help investors protect and grow their money. Full stop. Risk management is core to everything we do; that’s why we created a repeatable risk management process which proactively prepares our subscribers for the next big market move.
We believe we offer people a better way.
When Bitcoin was BULLISH TREND in our Risk Range™ Signals from October 2020 to November 2021, Bitcoin jumped +466%...
But it’s not about who gets you IN, it’s about who gets you OUT.
Hedgeye is no one-way permabear shop, banging the drums on ‘The Crash!’ until it finally comes. Hedgeye CEO Keith McCullough specifically developed his quantitative Risk Range™ Signaling process to identify Bullish and Bearish trends across all asset classes in Global Macro, pivoting at particular points in time… because timing matters. So when the data changes, so does our positioning.
During his final conversation on HedgeyeTV, Raoul Pal told our audience that, "If you're a 30 year old Millennial, you're pretty f&#%@d right now... Your only chance is crypto."
We obviously disagree.
There's a much better way to invest than the "I'm all-in" crap seen on CNBC or Real Vision. Bitcoin and crypto is just another asset class to be risk managed. We don't subscribe to the philosophy of buy and hold (read: HODL). The Raouls and Cramers of the world need to stop honking horns and shilling coins.
The livelihoods of hard-working Americans are at stake. That simple fact should've been taken more seriously.
Shame on you, Raoul.