In this episode of Smart Humans, we have one of my favorite guests back on again, Anthony Scaramucci, who's founder 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.
Welcome to Smart Humans with Slava Rubin presented by Vincent. In this alt investing podcast, Slava talks to amazing minds about their investment journey and finds out what it takes to make it in the markets. And now, here's your host and smart human, Slava Rubin.
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.
Just because Jews and Italians love each other or is that what the reason is, Slava?
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. You 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, hovering around $70,000. And you also came in on 20 in 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.
Well, I mean, you know, listen, I've done a lot of work on SpaceX and 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?
You want to just throw in a pick? Okay, sure.
Yeah. I mean, well, first of all, let's talk 30 seconds with the macro environment. So, the macro environment's been distorted by the war.
Wait, wait, just really quick before you give me all that real fast. Just the other picks you gave. So, you also 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 know, 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 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.
Well listen, I mean listen, you know...
One last thing, one last thing, one last thing is last year you also picked in the beginning of the year, a year about go 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 you even got more SpaceX. 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.
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.
All right, talk to your macro. Talk to your macro.
But 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 Polka Dot and Avalanche, believe it or not, I still think are coming back. I just think we're in a bear market now 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 mine 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. It's not going to do that. You're also not going to have them hijacking people for tolls on the strait. 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 could talk about the positives or negatives of it. No sense in doing that. The war has started and we got to get out of it. But we can't get out of it by leaving the Strait of Hormuz threatened. It's a 21 mile strait 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. It's just not going to work. So that strait's got to 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, or form, but smartly they realize they could hold us hostage by closing the strait. Remember, we 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 got to 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 is...
So, putting your prediction hat on, when are we going to see oil in the 60s?
Well, I'm going to be aggressive here. I'm going to be optimistic. I think that they'll get the strait 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 back to the mid-60s by midsummer and I still think you get two, three rate cuts by the end of the year.
Wow, that's very bullish.
Yeah, I'm bullish. I mean, I also think that the prosecutor that's prosecuting Jerome Powell, I don't know if he did it unintentionally 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 agentic AI and the fact that something like Claude can come in and start writing software code. So I'm going to just give you one name, SAP. So SAP has gotten its ass crushed. I think it's 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 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 euros in terms of free cash flow in 2025. It's heading for 10 billion 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 topline 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.
Is this in your own book like you were before with Microsoft?
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 Teradata settlement. There's some investor skepticism about the new Joule AI assistant, which I think has been clunky for them, and they would be better served just teaming up with an AI group. I 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 in 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 system. So I think it's very cheap. And 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 as uninvestable and so you just have to see forward through that that these companies are very smart. They've got a ton of free cash flow. 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.
Perfect. Before we get another pick, let's do 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 US economy in recession or not?
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 is a...
I'm going to put you on the spot. I'm going to put you on the spot. 12 months from now, yes or no? Recession or not?
So interest rates are up or down?
Down a little. Not down a lot because there'll be too much growth.
So interest rates, so Fed funds is down.
Three cuts in the next year.
Three cuts in the next year.
