"Worse Than a Recession" - Tony Robbins Breaks Down Ray Dalio's Warning on U.S. Debt

SPEAKER_1 (0:01)

This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up require compatibility and availability varies 18 plus.

SPEAKER_2 (0:26)

He's talking about robots, 10 years more robots. Elon talked about it, there's going to be more robots. I think we're going to sell 10 to 30 million robots. And he's like, wait, what? Yeah, I think Tesla is going to sell 10 to 30 million. And the way he answered it was like, that's not a big deal, right? He talked about this last year. We all saw that clip. How do you feel about what's happening with companies like Autopilot that they're able to go get the 13F filing of what Jim Simons was doing with Renaissance Technology, who has been doing 49% and I can match their 13F filings. And I just put it in there. You know, the whole Nancy Pelosi trader, the upside down Kramer. What do you think that's going to do to the market? Do you believe in that concept? What do you think that's going to do?

Christopher Zook (1:02)

Most of that is more marketing than substance because even on the 13F filings, there's a huge delay.

SPEAKER_2 (1:07)

There is.

Christopher Zook (1:07)

Between now and the time.

SPEAKER_2 (1:09)

You don't know when they sell, right?

Christopher Zook (1:10)

You don't know. They've sold it. So it's totally gone. You know, the Nancy Pelosi or the Jim Kramer things, those are great marketing. They may work. They may not. It really doesn't drive things near as much as the just reality of indexing. Because the amount of indexing that has happened in our country and around the world, that is what's created this concentration. That's what's created all this correlation to where when things move, they move in the same direction. A very simple portfolio that was well diversified in 2005, had an average correlation, cross correlation as it's called, of 0.16. Remember, one is fully correlated, zero is not, 0.16. Today, that exact same portfolio in the exact same weights is 0.65.

Nothing's changed with those assets other than the concentration and indexing that has happened, that when people are sellers, everybody's a seller. When people are a buyer, everybody's a buyer. Because when you buy the ETF, you buy that index fund, they have to literally be a seller or they have to be a buyer. There is no in between.

So in stress environments, when the market gets stressed, correlation goes up. That exact same portfolio in stress environments, average correlation is over 85%.

Everything gets hammered at the same time except for a few assets. That's why the holy grail of investing is so important. That's why it has to be things that truly are less correlated or not correlated at all in somebody's portfolio to get them off the roller coaster, get them on the escalator.

SPEAKER_2 (2:34)

You're a big fan of Ray Dalio. Ray Dalio, I spent some time with him at his Bridgewater. He's right across an armonk, right? Right by IBM, I think, where his headquarters is at. He has been talking about many signs. We just crossed 40 trillion dollars of debt, right? And he's been talking a lot about, hey, all the signs of the Great Depression, all the signs. And I think he's got a video on YouTube that he did that's like 45 minutes. If you can go YouTube, type in Ray Dalio, software filter, go to views on his channel, maybe just go to his channel. This video's got 50 million views, and it's not like it's a short video. Go to his channel right there, Principles by Ray Dalio, if you can. Go to videos and then go to popular, please.

Where is that at? Holy shit. What does it say?

409 million views. Second one, 202 million views, right? These are not small numbers. These are ridiculous numbers to get. He believes a possible depression type moment is around the corner. Do you agree with him?

Tony Robbins (3:33)

Well, I agree with him that that's not exactly what he believes. What he believes is there is a pattern that has happened throughout human history, and he studied more than 500 years of history to see what has that pattern been. And the pattern is how countries grow, just like a kid grows. We have different stages. Look, if you're a toddler, you're going to get more trouble than if you're just an infant, right? Because you can do different things. Teenager goes like crazy. You mature, you get a little older. You get a little older, you make different types of things. You age, you behave differently in each stage. Well, so do countries. And so there is a pattern that happens that when a country gets too much debt, when a country gets where people expect too much without working very hard, and you can look all the way back to Roman times, you can look at what's happened to the British Empire, there is a period of time in which someone else becomes the challenger. And right now, China is that challenger for us by far.