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00:00Are you comfortable with the market at these levels . You know listen we are in a rational thinking period. So this is a bubble certainly in the tech space. I mean what Alan Greenspan's issue those words I don't think Jay Pallavi saying I'm given that he wants the market higher. But you know we're kind of unhinged from reality and a little way here. Right . The economy is grinding slow slowing down. It's where we're lurching in and out of cove. And yet the tech market makes new highs every day. Tesla is up 10 percent. That's a classic speculative bubble. Lots of liquidity is finding its way into storage stocks where it really dangerous valuations on the on the growth side. Right. On the tech side it's just you know if it's Zoom or Tesla are beyond meat or whatever stock has a story everyone's rushing into that gets me worried. So what does that mean for the retail investor here. We've been doing a lot of work on the mom and pop investor coming into this market. Are you concerned that they may get really burned here at some point . Oh I certainly this reminds me a lot of the cryptocurrency markets in 2017 when we had this crazy rally where Bitcoin went from 8000 to 10000 it was at 20000 40 days later . And lots of people bought in and then it collapsed. Listen these stocks aren't like crypto. They're real companies . They're just getting valued way ahead of kind of what I think reality will be. And I do think there'll be a moment. Usually these markets you know what ends great bubbles usually is central bank action or sometimes just exhaustion. In this case we've got a big election coming up. Right. Joe Biden. He went . Let's just assume he wins for a second cause I think he will . And all of sudden capital gains tax are raised. Corporate tax are. High end income tax is raised. That will be good for the market. And so that's not priced in yet. We're still in this euphoric stage of market going up every day fueled by just tons of liquidity. So I want to talk about that idea of Biden here for a second because just yesterday he was saying that he doesn't believe that the shareholder capitalism can continue . How is Wall Street. How are investors going to bake in that thinking . Well listen Wall Street was already moving that way and a lot of ways. And you know Paul Jones has a thing called just capital . Larry Fink is on the on the train as is you know Marc Andreessen . And tons of people have been moving that way and saying we need multi-state corporate capitalism. Right. Just shareholder only isn't working. It's the rich. Poor Gap's getting too wide . It's leaving too many people behind and sleaze bleeding the environment behind. And you know there's this rise in ESG funds . Almost every fund wants to be an ESG fund these days. And so I do think Biden is moving to where Wall Street and he's going to be trying to lead Wall Street but Wall Street was already moving there. So that's not I think the concern for the market as much as the tax code. So I want to go back for a second because you were talking about the sky high tech valuations. What does that mean in terms of how you're investing. You know a friend of mine I said this yesterday a friend of mine said in markets like this you want to be on the airplane but be on the seat closest to the exit. The reality is I've miss this tech move. I fought it all. But while I at least got smart enough not to keep fighting it. But I haven't been participating. And so I got a lot of friends that are making a lot more money than I am these days. Listen I have a whole bunch of gold. I have a whole bunch of bitcoin that's also participating in this liquidity driven bubble. I think though they'll be longer term winners in a liquidity driven bubble. We get a little liquidity go away but it's not catching. That's mania that you're seeing in these story stocks. But do you then think that some of these retail investors have it right when it compares to big money given they did get into these stocks. Yeah. Listen you know it all depends on when you grade yourself. I'm guessing on the last three months these guys are dancing. Dancing with the champagne and you know spit in place on their fingers are having so much fun. They just got to make sure they get out before it crashes . And you know they always say you know pick you know pigs get fat and hogs get slaughtered. And so that's my advice. At one point you got to take profit and say well enough is good . What are you buying and selling right now. Listen I you know like I said I've got a thesis that central banks are going to keep inflating and so I have a position in gold. We have a lot of Bitcoin. There is a lot of value stocks that you know cash flowing stocks that companies which are going to continue to to generate cash. And so we're looking at lots of of those stocks kind of the other side of the growth value space stayed away from banks. Banks just trade poorly. It looks like they'll trade poorly for a while until we really think you know we're through this current crisis . One more quick question for you here. You know we had Sheila Bair on a while ago and she was talking about digital currency . She believed that they should be used to get money into the hands of Americans . What is stopping the U.S. from adopting a strategy like that . You know it's moving in that direction. You know listen to the thawing of the iceberg around Bitcoin and other digital currencies is in process . And we have come a long long way in three years . We're just not there yet. What the government China is doing it . China's you know in experimenting right now in test case. And within a year they will have a digital crypto rather than B . And so it put a lot of pressure on the U.S. And so I do think we'll get there. There'll be Libra. You know the Facebook project is launching hopefully that by the end of this year that'll be a big stable coin. It'll be a dollar backed crypto that you know Facebook has 2.8 billion customers. And so that'll be a great experiment to see how fast that takes off .

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Novogratz Says Tech Stocks Are in Bubble, Markets Unhinged From Reality

Billionaire macro and cryptocurrency investor Michael Novogratz, founder and chief executive officer of Galaxy Investment Partners, says tech stocks are in a classic speculative bubble and says it reminds him of cryptocurrency markets in 2017. He speaks with Bloomberg's Sonali Basak on "Bloomberg Markets: The Close." (Source: Bloomberg)

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