Jim Mellon (02:42):
I don’t know, my own view is that you should stay very well clear of overpriced hype stocks at the moment. I think you’ll just lose your money if you do so.

Trey Lockerbie (02:50):
I’m assuming you’re saying that because we’re starting to see the interest rates rise. Do you think that we’ll finally start to see a cyclical rotation back into value stocks?

Jim Mellon (02:59):
I think we’ve already done that, we’ve already seen that rotation back to value stocks. The tech stocks have been weak to flat for quite a period now. I’m actually short Tesla, I think that’s going down by at least another 50%.

Jim Mellon (03:14):
But, what I really look at is the money supply increase in the United States, which at the beginning of the year it was phenomenal. As you probably know, it was placed at 25%, which is hyper inflationary style money increase, at a time when the economy’s probably going to bounce back quite quickly, so we’ll have all sorts of supply capacity constraints which will lead to higher inflation. But, the Fed is clearly doing something to abate that, because the money supply growth has been much, much lower in the last two or three weeks, which is one of the reason you’re seeing the rise in interest rates. I would stay away from bonds. I do think the US dollar probably has further to fall, with volatility on the way.

Jim Mellon (03:54):
But, your own market has been buoyed by massive amounts of stimulation, monetary printing and so forth and it’s got to end in tears. I’ve been doing this now for 30-something years and I would say that this is up there with 2000, and also up there with 2007. We’ve got a big problem coming.

Trey Lockerbie (04:16):
Well, one sector in particular that’s been especially beaten down lately is the financial sector, and you’ve had a lot of success investing in things like banks. So I’m curious, is now the time to load up on bank stocks?

Jim Mellon (04:29):
Well that’s a great question, Trey. My own view is that banks are something that you own cyclically, you don’t own them for longterm growth and that’s definitely been the right way to play banks. But, I think that in the US you’ve got some great community or local banks that will probably be subject to acquisition as time goes on, and are very high quality. The US banks have been recapitalized since the financial crisis, the last financial crisis, very well, they’re not going to experience the level of fines and penalties that they had in the last 10 years, and they’re probably good buys.

Jim Mellon (05:05):
In the UK, I’ve been accumulating Lloyd’s Bank, which, for your listeners, is our biggest retail bank, and mostly almost entirely exposed to the British economy, which I think will do quite well actually, in the next couple of years. They announced quite good results yesterday. I think they’re on an expected P/E of about four times, and a dividend yield of seven or eight percent, so I would load up on that. Like the US banks, Lloyd’s is very well capitalized so little danger that you’re going to lose all your money in something like that. You play it for 50% rise and then you get out of it, as you would with the US banks.

Trey Lockerbie (05:44):
I also want to get your take on Japan, because you’ve had a lot of success there as well. Buffet recently announced that he’s invested in the five largest Japanese trading houses. What are your thoughts on that move?

Jim Mellon (05:55):
Well, I think he’s a super smart individual, if you ask me. I started my career by working for an investment company that was investing in Japan a long time ago. In 1989, not too long after I’d started work, the Japanese market hit its all-time peak which has never been exceeded. Even though the market’s been going up recently, it’s still below the level it was.

Jim Mellon (06:20):
I don’t know if you know this, Trey, but after the war when all the financial institutions in Japan were reconstituted, I think I’m right, it was 1948, the Nikeii Index was called the Nikeii Dow Jones index. The reason it was called that was because it was aligned exactly with the Dow Jones Index. And, so they were both then at about 120, if my recollection of it is correct and for the early period of my career, the Japanese index was 20 or 30 times higher than the DOW Jones in the United States, they had this enormous rise and today, they are at the same level. The DOW is about the same level as the Nikkei, Japan is really interesting, it’s very good that you asked that question. So, I would say that Japan is absolutely going to have a further move upwards, partly because it’s reached those horrible levels that were reached in 1989, partly because Japanese companies are full of cash, partly because they’re really good companies in many cases and partly because Japanese savers have monumental amounts of money on which they’re earning absolutely nothing and now the Japanese companies are paying more dividends so load up on Japan. I think that’s a very good idea.

Trey Lockerbie (07:42):
I know you’ve got your sights set on a number of other sectors as well. So why don’t you give us a breakdown of say, your top three.

Jim Mellon (07:49):
Basically, I look at investment as so your big money will be made in something that you really researched, that you really understand and that you’re early into and that you have probably a diversified approach to. Then underneath that, there’s the shorter term market stuff that we all do, like you do Trey and I do. Shorter term stuff the way I look at it pays the daily bills and the salary of your employees or my employees but the longer term meta thematic stuff is the stuff that will allow you and me to be solvent when we’re much older and in your case that’s a long way of and my case, hopefully, I’ve still got a few years of productive life left in me. In terms of meta themes, I think there are three meta themes at the moment. One is climate change and the problem is that green energy and green themes are extremely highly valued in the stock market. If you look at hydrogen companies, if you look at lithium companies or you look at solar panel industries of any type or wind farms or whatever, the yields of the free cash flow multiples on these are extremely high so out of that one.

Jim Mellon (09:11):
The longevity industry is really interesting to me and we have our own company, Juvenescence which reflects that where we know that it’s going to be possible to manipulate aging so that people can live longer and healthier, we just don’t know exactly how this is going to happen. So we’ve taken multiple bets with Juvenescence which is going to go public relatively soon.

Jim Mellon (09:32):
Then the last one is the revolution in agriculture because we can’t sustain the level of intensive farming around the world when the Tndians and Chinese in particular want huge amounts of animal protein which causes massive environmental destruction, human health problems and pandemics so we need to find alternatives. So I have been meta thematically investing and starting companies in that area.

Jim Mellon (09:58):
Then underneath all that, in terms of the day to day trading am seeing we’re very high on the US market with an opportunity in Japan. As a positive feature, I think the UK market is extremely cheap for reasons I’ll be happy to explain to you and I think that overall you should be out of bonds because the yields are in some cases negative and in many cases are negligible and we’re going into a period of inflation and you should be in position for a commodities super boom which we’re not even in the middle of, we’re in the early stages of and my favorite metals, gold, silver and platinum, I’ve a very simple approach to what’s going on at the moment in the world. I think we can do very well over the next year or so. I’m super excited about the prospects of making large amounts of money in the next couple of years.

Trey Lockerbie (10:48):
Futurist Ray Kurzweil has famously said that humans will ultimately achieve immortality, do you think he’s right and is it a good idea?

Jim Mellon (10:57):
No idea. I mean, it’s like saying bitcoin can go to $300,000 or a million dollars or whatever. I think that it’s almost a headline grabbing statement and it doesn’t frankly speaking in my opinion, do the longevity industry any good because there have been multiple pronouncements over the last 5,000 years about some secret that will keep you alive forever, an elixir of youth that will rejuvenate you, nothing has worked. Even today the anti-aging industry is about 150 billion dollars around the world and none of that stuff works.

Jim Mellon (11:33):
But what is happening, since the unveiling of the human genome scientists have discovered pathways of aging that cause even you, especially me to age and those pathways can be manipulated in all mammalian species and many cases including in ours, to slow or to halt or to reverse the aging factors that those pathways cause.

Jim Mellon (12:01):
We are on the dial up phase of the internet vis a vis the longevity industry, it’s very difficult to know exactly what’s going to work but I personally know that it is going to work and it will be totally revolutionary. 1900, in your country and in my country, average life expectancy was about 47 at birth, today, if you make it to 65, you’re 90% likely to make it over 90 so the whole of our life expectancy and the way in which we conduct our lives has changed dramatically in the last 120 years.

Jim Mellon (12:35):
None of that has occurred because of any pharmaceutical or any therapeutic intervention. It’s all because of better sanitation or vaccines or antibiotics, less infant mortality et cetera. Now, we’ve got the possibility of actually changing our fundamental biology, allowing us to live to maybe 110 or 120, that’s my aspiration and more importantly to live those extra years in a robust and healthy condition not sitting in a chair dribbling away, wasting away waiting for the grim reaper to come and take us away and not being sick with cancer or heart disease or diabetes or Alzheimer or whatever. That’s the great prize that is here and now the science is catching up with the aspiration of all of us to have a robust and healthy life for a much bigger part of our lives which may even be longer lives.

Trey Lockerbie (13:29):
It seems like a big component of the success of human longevity lies in the evolution of artificial intelligence. Google’s DeepMind for example, recently had a breakthrough with alphafold that could have a very promising impact on the future of medicine. Does this make you inherently bullish on artificial intelligence?

Jim Mellon (13:48):
Yes, and obviously a part of Juvenescence is devoted to AI largely to accelerate the process of drug discovery so that for instance our affiliate company Insilico medicine based in Hong Kong can now theoretically at least, develop a new compound, a specific compound in 30 days as opposed to the historical 3 years and can also probably in due course develop a drug for you, personalized drug or for me, personalized drug. I think AI is going to be a very big factor in accelerating the process of science but it won’t just be obviously for longevity, it will be for also diseases but AI depends on massive data sets and those data sets are not as readily available as they should be. Funny enough, the UK has got the best data sets which are available to scientists because of the NHS, the National Health Service, which is a unified system and as a result there is a very big compendium of information available for scientists in the UK, which I highly encourage people to look at if they want to.

Trey Lockerbie (14:54):
Well, does that mean there is an inherent competitive advantage with European AI companies?

Jim Mellon (14:59):
I wouldn’t say so, I think this is free to use for any scientific advance in the world and there is no doubt, as in so many other areas that the US is far, far ahead of other countries in terms of longevity science, food science and the other areas that am interested in. The only area which maybe they’re being bettered is AI where the Chinese seem to be possibly even ahead of the United States. Generally speaking, the fount, the source of all the great technologies in the world is the US and that should be applauded really.

Trey Lockerbie (15:35):
So how do you see the timeline for the whole human longevity technology unfolding and what does it look like for big pharma along the way?

Jim Mellon (15:46):
Great question. Basically, my view is that within 20 years, life expectancy at birth will be 110 in the developed world. You’ll have the old paradigm of born, learn, earn, retire and expire will be changed. Because will be learning as a continuum through out their lives, relationships will change, work will change et cetera so we’re very, very close to that point. Years ago I got a pilot’s license and the guy who was teaching me told me that if there’s something in the distance that’s a static object when you’re looking out of the cockpit, it’s coming straight at you, it may not look like t’s moving but it’s coming straight at you and that’s the same with longevity. This is going to happen much quicker than people think or even someone like myself, I think, there’s an extremely good chance, my dad’s 92 years old but I’ll live to 100. You certainly will live to 100 so you need to take good care of your financial planning, your planning of all sorts of stuff. We’re almost there so am extremely bullish, am not bullish like Ray Kurzweil, who makes a very specific forecast by 2040, singularity will be here which means that for every year that you live, you’ll get more than a year of extra life. I think that’s a wild prediction that I wouldn’t have made.

Trey Lockerbie (17:04):
You mentioned you’re shorting Tesla and could see that going down quite a bit further, but they’ve also become the poster child for this green revolution. So, what other renewable energy companies might you be considering if you’re bullish in this space?

Jim Mellon (17:17):
Another good question. Basically, I think that almost everything to do with the green revolution, while worthy, wonderful, great and obviously impactful and necessary, is too highly priced. There’s no reason, I’ve got nothing against Tesla, I wish I was Elon Musk for the life he must live, is that even today at seven hundred and something billion dollars, it is worth more than every other car company in the world put together. The folks at BW or BMW or Jaguar or GM or Ford are not stupid, they’re catching up, if they haven’t already caught up, very very quickly. So to justify the current valuation of Tesla, you have to have a remarkable view on their prospects and I don’t have that remarkable view. I think that Tesla, as I said earlier could go down by 50% from this level quite easily. It will be very jagged on the way but it’s way over hype, way over expensive company and not withstanding all the stuff about storing energy on car batteries and solar panels on roofs and all the other stuff that Musk might dream up in Tesla. It’s an expensive company and those situations in my experience end up in tears.

Jim Mellon (18:32):
From a renewable energy point of view, I don’t think there’s anything that I can see that’s worth investing in but, if you look at one of the causes of emissions around the world, transport is one of them but the biggest cause in intensive farming, the biggest cause of global warming is cows emitting methane into the atmosphere, it’s as simple as that along with pigs, chickens, duck, which by the way are a big component of food in China and they’re since the second world war increasingly intensively farmed. In the United States 99% of your agriculture is intensive which means the animals get fed inside in feed blocks and quite often kept and fed in what you and I would consider to be cruel conditions. They’re also the biggest contributor to global emissions moreso than transport. Even if Elon Musk electrifies the whole world, we know that some of the electricity that goes into producing the electricity fuel powered cars is bad electricity but if we could cut the amount of food that was produced intensively, then we make a much bigger dent in global emissions at that point.

Jim Mellon (19:42):
In the United States again, the leader in technology and so many things, you’ve got the plant based revolution that’s taken off like a rocket and so forth and actually, to be fair in Europe as well, in the UK, you’ve got Quorn, you’ve got Meatless farm, you’ve got Livekindly [and 00:19:58] which is going to go public really soon. That’s the first wave of a revolution.

Jim Mellon (20:02):
What am very interested in and what we are the biggest investors in the world in this particular area is in cellular agriculture where you grow meat material, seafood in labs and again the leading companies are generally in the United States but not entirely in the United States. In 10 years time, you and I will be eating seafood that’s made in a lab, We’ll be eating meat that’s made in a lab, we’ll be using leather that’s made in a lab, we’ll be using threads that are made in a lab and this is here and now. All these companies have a product the question is scale up.

Jim Mellon (20:38):
That’s my book, it’s Moo’s Law which has just come out, which is about this very industry and how investors can profit from it. Just as an aside, all the proceeds go to the Good Food Institute which is the largest advocacy group for this in the world. It’s necessary that we move away from eating animals that are intensively farmed because apart from the animal cruelty side which was the basic appeal for me because I don’t eat meat, the environmental destruction has the pandemic risk. Do we want to go through another pandemic that’s caused by animal to human transmission because we’ve become bacterially resistant to antibiotics because 80% of antibiotics go into farmed animals? No we don’t, so like I said, lets change the food supply. The technology is possible, it’s here and now, it’s going to be on plates in the United States and in Europe and elsewhere in the world in the very near future.

Trey Lockerbie (21:30):
I can hear how passionate you are about this topic, which I am also really excited to talk about and you mentioned Beyond Meat so I want to start there. Beyond Meat’s market value is already north of about 10 billion dollars which is about half of a another company like Tyson Foods for example but Tyson Foods is producing 3 billion dollars of profit whereas Beyond Meat is losing hundreds of millions of dollars per year for now, but it begs the question, how innovative is Beyond Meat given that incumbents like Tyson are already producing plant based products?

Jim Mellon (22:05):
I think Beyond is a great company and for my book Moo’s Law, I interviewed Ethan Brown who I think is a super nice, motivated, mission driven person and am a big fan of his. What he is involved in is an industry that doesn’t have a lot of IP protection, Intellectual Property protection [because 00:22:26] you and I could set up a plant based meat company tomorrow and there are plenty of them around and you’re right Tyson or Kellogg or Unilever or Nestle or the big food companies are doing exactly that. So he’s got a lot of potential competition on his hands. The difference between what he does and what the Cell Ag company where they’re growing food materials in laboratories is that they have special intellectual property that is robust and it makes it very hard for Trey and Jim to go off and do exactly what they’re doing because we would be litigated out of business so I prefer that.

Jim Mellon (23:06):
The other reason I prefer that is that plant based meats are coming down in price and they will probably come down to the price of conventional meats. They’re not necessarily better for your health but clearly, meats grown in laboratories or seafood grown in laboratories have the capacity of coming down below the price of conventional, being better in taste, texture and better for health because they won’t have toxins, they won’t have lethal material that’s leaked into the product. Which in the United States by the way causes 1 in 6 people to be in bed every year because of food poisoning. They won’t have antibiotics in them or hormones or in the case of seafood, mercury or micro-plastics. There is absolutely no reason why you or me when we are allowed to and we can share a meal, won’t do so eating lab grown foods because they’ll be so much better for us and for the planet.

Trey Lockerbie (24:05):
What you’re referring to there is what you call in your book griddle parity and I just love that name.

Jim Mellon (24:11):
We’ll be below griddle parity in the next 10 years. Griddle parity obviously is a riff like Moo’s Law is, of an established indicator. Griddle parity is when the price of renewable energy goes below that or goes to the same level as fossil fuel derived energy. It’s the same with Cell Ag products, at some point, they’ll come down to the level or below the level of conventional meat and then the tipping point has arrived. In the US this year will be close to a quarter of your milk market will be alternative milks, it was nothing ten years ago,[inaudible 00:24:44] and Dean Foods have gone bust because they can’t sustain the production of conventional dairy products when they have such effective competition on their doorsteps. I think this is right for everyone and even the farmers can benefit for all the reasons included in Moo’s Law. Within 10 years, you’ll have at least half the meat market will be plant based or cell Ag based.

Trey Lockerbie (25:14):
Am all for that, don’t get me wrong but I want to pose the counter argument here because there’s a saying, that there’s no free lunch. While these products may be tremendously beneficial for the environment, you have any concerns about what they’re actually doing for our bodies? Some of these products are downright junk food status.

Jim Mellon (25:32):
I think that’s right. As I said earlier, I don’t think that plant based foods are necessarily better for you that conventional meats but the cell Ag is completely different because that is the best of species grown in a lab to come out without any of the contaminants, all of the other stuff that you’re referring to quite rightly.

Jim Mellon (25:52):
On the plant based stuff, I would say that the plant based manufacturers are cognizant of that and are doing something about it and we’re seeing today, for instance Beyond is re-engineering its products all the time to be healthier, to have less saturated fats, to have less stuff that isn’t necessarily good for you. Ethan Brown was telling me that he is going to keep producing better and better products that’ll be better for human health.

Jim Mellon (26:20):
So at the moment, you’re right, that stuff is not necessarily better for you than eating the conventional stuff.

Trey Lockerbie (26:28):
In your book, you feature a few companies you’re invested in, in this space. For example, BlueNalu who is producing cell based seafood and Mosa Meat, a plant based meat but those are private companies so am curious, are there any other companies publicly traded that our audience could get involved in now or that you’re keeping a close eye on?

Jim Mellon (26:48):
There aren’t. The only company is Agronomics which am the biggest shareholder of, which is an investment vehicle listed in the London Stock Exchange which invests in this industry but as yet none of these companies has gone public. There will be of coarse companies that go public over the next couple of years and in the book Moo’s Law, I suggest the ones that you might want to be looking at from a public point of view because I think there will be great investments going forward. Among them of course is BlueNalu which is going to have a product on the US market by the end of this year approved by the FDA and will be a fabulous, Mahi Mahi and they’ll now have bluefin tuna not very long after that.

Jim Mellon (27:31):
It is incredible. I wish I was [inaudible 00:27:35]]because I think we are entering a period of such remarkable change and innovation. For those who can handle change and not everyone can, this is going to be a remarkable period, not just of opportunity for investors but also just as human beings. It’s wonderful stuff that is going to happen.

Trey Lockerbie (27:53):
With companies like BlueNalu who are doing this so called cell based seafood, tell us a little bit about what that is. Is it a 3D printed food, is it grown in a petridish, what is it?

Jim Mellon (28:06):
I think the easiest way of presenting this is using a conventional meat example. So let us talk about cows, seafood is exactly the same by the way. Let’s say that you have a cow and it’s living in your backyard and it’s a very good cow in every way, its very healthy, it’s type of meat, not that you would ever kill it, would be very favorable for us. What we do is we go out to the cow, we take 2.5 milliliters which is a tiny amount, it’s like a nail.The fluid from it so it doesn’t even feel anything, we then take that, we extract the stem cells, which are the b cells, the ones that make us grow from babies or fetuses and we differentiate those stem cells by bathing them in nutrients and growth factors to become the cells that we want which are the muscle cells, the connective tissue cells and the fat cells to produce meat. In a nut shell, that 2.5 milliliters sample can produce 3000 kilos or maybe 7000 pounds in meat which is the equivalent of 7 cattle, they would take 28 to 30 months to grow and fill out and we can produce that 3000 kilos or 7000 pounds of meat in 40 days. That’s the process, you take the genetic code effectively of the cow, you don’t modify it at all, there’s no genetic modification, you bathe it in the same kind of nutrients as if a cow was sitting in a feed lot or was in a field, you use growth factors which are well known and you grow it in large stainless steel containers that are known as bio-reactors, then put all the various bits back together and you have meat. That’s how it happens.

Trey Lockerbie (30:01):
Talk to us a bit about the ancillary benefits of producing food this way. For example, the lack of water that’s needed or the lack or produce or crops.

Jim Mellon (30:12):
70% of all crops grown around the world including those from the Amazon jungle which has been cut down to grow soy beans and therefore causes even more environmental destruction and climate change go to feed animals, they don’t go to feed us. Those animals are very inefficient converters of plant protein into animal protein. Basically, in the chicken, it’s about 9 to 1 and in the case of a cow its 25 to 1. So it takes 25 times more inputs for the cow to produce 1 output of meat where as in this process, the cell Ag process, it’s about 2 to 1. You can already see how the price of lab grown meat could be lower than the price of conventional meat.

Jim Mellon (30:55):
On top of that, as you rightly pointed out Trey, each kilo of beef and kilo is 2.2 pounds, takes about 15,000 liters of water to produce, that’s a huge amount of water. Farming uses more water than anything else in the world and 80% of antibiotics in the world go into intensively farmed animals to both keep them from getting diseases and also to promote their growth. A chicken today for instance, is bigger than the chicken that existed in 1950 because they’re genetically engineered to grow much faster and they have miserable and short lives. The average chicken lives 23 days, before it’s slaughtered. The average dairy cow lives 2 years, whereas in a field, it would live up to 25 years because it’s constantly pregnant, it’s back breaks because it’s udders become so big from producing milk all the time. This is a very cruel profession, a very cruel industry and it’s all around the world, it’s not just in the US or in Europe, it’s everywhere.

Jim Mellon (31:58):
The biggest risk is that you pump all these animals full of hormones and antibiotics and they become carriers of diseases that move into humans. The Swine flu, the bird flus and now the latest, COVID 19 have all come as a result of forced confinement of animals and the transmission of novel disease to humans. Do we want that or can we avoid that by doing something different? We can do something different, it’s here and now. Why wouldn’t consumers and everyone on the planet actually want that?

Trey Lockerbie (32:29):
You’re right and I think theoretically everyone does want that and it does seem inevitable because it’s basically inescapable that we need to convert to plant based or cell based food in some bigger fashion moving forward just for sustainability purposes. I want to invert my earlier question asking about disruptors coming into the space because you mentioned the incumbents in the auto industry versus Tesla, so am curious what your take is on the incumbents in the food space and how encouraging their progress has been in the food space.

Jim Mellon (33:02):
That’s another great question. You’ve got companies like Unilever or Nestle [or 00:33:07] Tyson in the US and the Brazilian company JBS, which are actually investing in or partnering with some of these cell Ag and plant based companies because they know which way the writing is on the wall for them. Frankly speaking, these are large companies that will sell any food that consumers want, that’s legal and that’s reasonably high quality. They don’t necessarily have to sell it from animals that have been slaughtered. I think you’re going to see more and more of these companies buying or partnering with some of the companies that I mentioned in Moo’s Law.

Jim Mellon (33:44):
In Moo’s Law, I talk about, I think a lot of these companies will be sold to the majors in the next few years for their intellectual property or they’re sold because the way of the world as we investors all know is that companies sometimes fail or there’ll be a few of them that are bold, that will go out and create their own large brands like Impossible and Beyond have done. If I had to say, my favorite in terms of creating their own large brand is BlueNalu in seafood because it’s closer to market and its got a very good management team. But like everything in the early stages, the internet in the early years or longevity in earlier period or food today, you need to have a diversified portfolio, don’t put all your eggs or all your food in one basket. It’s better to diversify.

Trey Lockerbie (34:38):
This reminds me of an old Warren Buffet quote where he was talking about the early days of the automotive industry because in the early 1900s there were literally hundreds of automobile startups and now there’s only a handful so picking a winner out of the bunch would have been very difficult at the time and in Buffet’s view, the better bet would not have been to go long haul but rather to go short horses or in this case shorting calves but in any case, do you see an analog to this here?

Jim Mellon (35:07):
Definitely. I think that makes perfect sense but its not an easy thing to do because the farms are normally owned by individual farmers, they’re not listed. That’s a good question. I haven’t thought about how you’d go short individual companies in this area. I think the nearest to it is JBS, the Brazilian company which is entirely dependent on farming cattle but it’s a Brazilian company, I wouldn’t know how to go about that. I think it’s much funner just to invest in the positivity. Those who went short Gamestop basis that it was a dinosaur that was going to go bust have lost a lot of money so it’s probably better just to be optimistic and go for the positive companies.[inaudible 00:35:51]Short Tesla even if its 715 today, I think it will go to 500 or below.

Trey Lockerbie (36:00):
Let’s touch on the bear case there because earlier you were talking about the negatives when it comes to electric vehicles and the bad electricity is actually needed to product the vehicles and am not sure enough people really understand this. What are the negatives for producing electric vehicles versus something like a hydrogen vehicle?

Jim Mellon (36:19):
Very good question. Basically, electric cars to be made, use a lot of copper, nickel and so forth that have to be extracted using a large amount of fossil fuel. When they’re on the road, they use electricity which is stored in the batteries and that electricity is in may cases generated by using fossil fuels, particularly coal so although people might think that Germany is a green country, actually nearly half of its electricity is produced by the burning of coal. When you’re producing coal to make electricity that’s used by Tesla cars is that a green movement? I don’t think so. The same in the United Stated, you use coal, gas, fossil fuels to produce a large part of your electricity. Wind power and solar panels are a small fraction of the electricity that’s produced in the United States.

Trey Lockerbie (37:17):
There’s this old saying that during a gold rush, you actually want to be selling shovels to the gold miners. So with this major revolution into electric vehicles, what’s your stance on taking a position in something like mining lithium or any of the other metals that you’ve mentioned earlier.

Jim Mellon (37:34):
Great question, lithium is the obvious thing and obviously in the United States you’ve got an issue with importing rare metals and lithium from China. You want to have a domestic and secure supply so I’ve been investing, we have a company called [inaudible 00:37:52], it’s actually named after the view from my house in the Isle of Man, and sometime in the near future, we’ll take our company public, its got a lot of concessions in the United States for lithium which am super bullish on.

Trey Lockerbie (38:06):
Jim, we’ve covered a lot of ground and ultimately am left wondering, what is your ultimate advice for someone who is just getting into these markets?

Jim Mellon (38:15):
Trey, you’ve asked some brilliant questions, am very much appreciative of you having me on the show. I would just say, closing remarks before I go as I was telling you earlier. The pup quiz that we host every Thursday night, it’s a bit early for a pub quiz where you are but it’s the right time here.

Jim Mellon (38:32):
In my experience, for what it’s worth, and I don’t think am a particularly innovative person, I’ve been a very competent plagiarist in my life but in my experience, if you want to be a successful investor, you have to be curious, you have to read a lot, you have to listen to Trey’s podcast, you have to listen to other podcasts, you have to be persistent in listening and have an open mind to all sorts of people.

Jim Mellon (38:56):
The second thing is you have to be adaptable, you and I know that things change on a dime so you have to be very bullish on lets say electrification today but tomorrow hydrogen becomes the big thing and we should look at hydrogen which is coming up on the rails against electrification. I think they’re all expensive but that’s the way the [inaudible 00:39:15]think.

Jim Mellon (39:16):
The last thing, probably the most important thing is what I call application which is basically hard work. If you don’t put in the hours, you’re not going to be a successful investor. You’ve got to actually really work at it. There are a few people who luck out but not many. I really want investors to succeed because our capital markets are the things that keep our societies together in a positive way but if it just becomes a casino.

Jim Mellon (39:47):
The three things I just want to emphasize, number one, curiosity, adaptability and application, if anyone can do that then we’re going to have some very successful listeners.

Trey Lockerbie (39:59):
I think that is wonderful advice and a great note to end on. So Jim before you go, I want to make sure that I give you an opportunity to hand off to our audience where they can read your books, where they can find your companies and any other en devours you’re involved in.

Jim Mellon (40:15):
There’s a Moo’s Law book, that’s all together, one word website, I would go on to that, you can get the book on amazon or any other bookseller. That’s a good place to start.

Jim Mellon (40:29):
I really enjoyed talking to you Trey and I appreciate you asking me and from one Scotsman to another, fare thee well.

Trey Lockerbie (40:37):
I had a lot of fun Jim and I really hope we get to do this again soon, Thanks for coming on the show.

Jim Mellon (40:41):
Anytime. I loved it, thank you very much indeed.

Trey Lockerbie (40:45):
All right everybody, for the next part of our show, we’re going to take a question from our audience.

Trey Lockerbie (40:50):
This question comes from Jeff McAllister,

Speaker 4 (40:54):
Specifically, how do you all think about these two issues greed and fear and any insights or perspectives that you could provide in terms of how valuing those two should be thinking about managing these two. Thanks for all you do, for your community and look forward to hearing from all of you.

Trey Lockerbie (41:15):
So Jeff, I really love this question because you are right, you are getting to the root of it which is greed and fear and the best advice that I can give you is the same advice that I received from Warren Buffet one time and that was to go back and read chapters 8 and 20 of The Intelligent Investor because those chapters are all about the human psychology factor when it comes to investing and I know that from the outside looking in, especially for new investors, investing looks like just numbers, spreadsheets, formulas but the revelation a lot of us investors have over time is that this is a very emotional rollercoaster to put yourself through.

Trey Lockerbie (41:52):
It’s no surprise that the best investors are also probably the most rational people you’ve ever met but there’s some other tricks you can do as well. For example a lot of investing platforms allow you to change the colors so on a down day when it’s all red, you can actually make it a green day to say, “hey, this is a good time to buy” and beyond that, I would just say it’s important to go back to basics and focus on the fact that you’re owning a piece of a real business and if you believe in the competitive advantages of that real business, to endure the tests of time then it should be something that you can hold on to for the rest of your life, it’s not always the case but in the instance where things are going way up, sometimes, I like to reflect on a Charlie Merger quote that says, “Don’t just do nothing, stand there” because if you believe in the core business involved, we are big believers on this show that theoretically, you can hold them as long as possible.

Trey Lockerbie (42:48):
Jeff, I hope that’s helpful for you for asking such a great question, we are going to give you free access to our intrinsic Value course on theinvestorspodcast.com as well as our TIP finance tool and trust me when I tell you that these two things are going to help answer your question even further and the tool itself is incredibly powerful.

Trey Lockerbie (43:09):
All right everybody, that’s all we had for you on this week’s episode, be sure to tune in next week when I sit down with Ted and talk about how to invest like the best and if you haven’t done so already, go ahead and subscribe to the feed, follow me on twitter @treylockerbie, check out theinvestorspodcast.com and especially if you haven’t already done so, check out the dream tool we’ve built for you at TIP finance. With that we’ll see you again, next week.

Outro (43:35):
Thank you for listening to TIP. Make sure to subscribe to Millennial Investing by The Investor’s Podcast Network and learn how to achieve financial independence. To access our show notes, transcripts, or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only, before making any decision, consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.