One of the great things about doing these interviews is that you get to discover things you wouldn’t otherwise know about.
The thing about financial research you see, is there are so many people pontificating about the market (us included) that it’s difficult to keep on track of them all, or even who’s actually talking sense.
So wouldn’t it be great if there was a resource you could go to where you could get trading ideas and investment strategy advice from the best investors…. In the World?
Real Vision is a sort of Netflix for trading and investing. You can access the videos you want, when you want. Amazingly, some have over 1.5 million views and around 85% of those who start to watch a video don’t get bored and switch off, instead they watch it all the way through. It has a punchy pop-art feel to it, great sets, great investors, and great content.
Gone are the days of endlessly having to listen to Bloomberg in the background, with fast-talking commentators filling time before repetitive adverts blare out. Now as with everything else you can use Real Vision to access the insights of the World’s greatest investors with trading ideas, strategy discussion and global macro analysis at your convenience.
To find out more about why Real Vision was set up and how it can benefit your investing and trading we spoke to the founder and CEO Raoul Pal. This is what we discussed:
Raoul, thanks for talking to us. Why did you set up Real Vision, and who’s it for?
So, I was living in Spain in 2008 and I was there all the way through the eurozone crisis in 2012. It’s something that I had predicted, my background being in the hedge fund business at GLG and also, working at Goldman Sachs, where I was running a large business there.
I knew what was going on within the heart of the financial system and I could see the risks growing every day. I’d been writing about it and basically predicted what was going on.
What was terrible was, friends of friends or friends of my parents would come to me and say “Well why didn’t we know?” because if you remember, 2008 was bad in the UK. 2012 in Europe was absolutely shocking. Cyprus had to bail out all of the banks. It was a really, really shocking situation.
The financial media have basically let people down.
I realised that there was something I could do about it, I didn’t know what yet but I knew I wanted to do something. Video-on-demand technology was starting to get developed as Netflix had just started.
This was a disruptive opportunity, to start a subscription-based video-on-demand channel, where we can actually offer complete access to everybody, the kind of information that was only for the elites in the past.
I think that democratisation of financial information was the key thing that we thought we could bring to the world, and I think that’s what we’ve managed to do with Real Vision.
Why do you think it’s become so popular, so quickly?
I mean our engagement levels are fantastic. Of all the programming that we produce, the average piece of content, of the people who start it and get to the end, has an engagement score of 85%.
Regardless of whether it’s ten minutes long or two and a half hours long. We’ve got the highest engagement of any video content in the world. It’s extraordinary. People are fanatical about Real Vision.
Volatility is what we all need in our business. So once you get market volatility, you get huge growth, because people stop thinking they don’t need advice to “oh my God, I desperately need advice”.
We’ve got about 45,000 subscribers now, our free channels have around 250,000 subscribers, and we get up to five million views a month on YouTube. So it’s become extraordinary. We sell written research as well, so we have two written research businesses. We have a live events business. We have a $25,000 a year membership business as well.
And how do you get access to these investment experts?
My background was at Goldman in London, running the hedge fund sales business, equities, and equity derivatives. Then I went to GLG, started and managed their global macro fund in London, when they were the largest hedge fund firm in Europe. And then I eventually opted out of the rat race, moved to Spain and started writing investment strategy and research called the Global Macro Investor, which is what all the big hedge funds, family offices, sovereign wealth funds get.
It’s a very expensive service. And from that, these guys have been my clients and friends for my entire career. So that’s where we launched it from, that’s how we can get people like Stan Druckenmiller and the other legends of the industry.
Now it’s just grown so much that Real Vision’s become the trusted media brand that everybody can appear on to long-form; from there we do three-minute soundbites and everything else. We’ve done everything, from documentaries through to incredible interviews with people that nobody else can get.
So far, what’s been the best part of running Real Vision? What are you most proud of?
Most proud of is the community we’ve built.
We never imagined the community would be so strong, but even as a business, we’ve even raised all of the capital the business has needed from our customer base alone.
So we have a very fanatical audience that are really behind our mission in democratising financial information, and that’s been really amazing. It’s also just been incredible to have managed to take on a huge industry like the TV industry and the financial media business from scratch.
I mean having that opportunity as an entrepreneur, to be able to walk into something like this and then find you’ve got no competition has been an extraordinary moment as well.
And what about the worst part? What’s been the hardest part of the journey so far?
Everybody lies to you when they say the startup entrepreneur’s journey is fantastic.
It’s like, “start business… become a billionaire”. No, no, it is the hardest thing you will ever do. It is extraordinarily difficult to scale a business fast, to run on negative cash flows for periods of time because you’re scaling fast because you’ve got a big opportunity. It’s not conducive to getting a lot of sleep. We’ve got staff in a number of different countries so it becomes a management nightmare as well. You have to have a huge appetite for risk and a huge appetite for pain to do it.
There’s a book by Ben Horowitz, the famous VC, called The Hard Thing About Hard Things, and it’s the only actual book about running a startup that is true. And it’s how really hard it is.
What do you think is the biggest risks that private investors face, and what do you think they can do to mitigate them?
I think the biggest risk anybody is running is for baby-boomers, the slightly older population that are in their 60s now. I think generally, as a rule of thumb, they still have too much exposure to the stock markets and to risk in general or whether it’s the stock or credit markets.
Most people don’t realise that because it’s their pension plan. They think “that’s all okay, that’s my pension plan, I’m not really trading equities”. That’s what people think.
The problem is the mechanisms of retiring around the same time that you’re due a recession. In the UK you’re getting close to having a recession and it’s not necessarily about Brexit; it’s actually that the world is getting closer to a recession. It’s that kind of time.
So the problem is usually in a recession, the stock market falls 50%. Now if you’re young, in your 30s and the stock market falls 50% and you’re accumulating money for your pension, that’s fine because you just continue to accumulate and put in some of your paycheque every month. But if you’re a 65-year-old who’s just retired, you’re going to lose half of your life savings.
So there is a misunderstanding of the kind of risk people should be taking, because generally, people haven’t saved enough money to retire. So that I think is a big risk.
And overall, on a shorter-term risk, we are headed towards a recession. Things do look a little bit precarious. I think in the UK, people are more aware because Brexit has been such a complex issue for many people, but globally, people are not aware.
So the UK’s going to get caught up in this mess regardless because, particularly in the US, there’s a huge amount of risk-taking going on that people shouldn’t be doing.
The other risk for non-investors, people who are looking at the other way, is their retirement savings, is the risk that bond yields are going to go to zero as well. Which will make it very hard to generate an income.
So what do you think private investors can do to position themselves? If a recession comes, what do you think investors should be looking at as an asset class, or what to get involved in or to avoid?
If you’re trading and you don’t mind risk and you can trade futures then I would definitely be involved in the bond market, because I think interest rates are going to cut to zero and probably even negative, in the UK and around the world.
There’s the US bond market, the UK bond market, the Australian bond market. There’s a bunch of opportunities I think. You can take as much risk or as little risk as you want in that. So bonds can be a safe haven or bonds can be a risk-seeking asset if you want to trade bond futures, for example, and use leverage.
The other thing that is a great opportunity, usually in a down cycle, is the US dollar reigns supreme. I think that being long, the US dollar is a great opportunity. So trading currencies I think is a great opportunity in this.
Those are the two things I’d really look at.
And finally, Real Vision aside, what sort of would be your top three resources for investors to become more informed about the markets and trading and protecting and growing their wealth?
One piece of advice that I follow, and it’s not for everybody, is that I read as little of other people’s stuff as possible The reason being, that you end up having other people’s opinions and not your own.
The tools you need to have is the ability to build your own framework for investment and not saying “oh that’s a great idea”, I’ll do that. I would spend time working on your own framework, writing it out, like you are pitching an investment idea tp yourself. That’s something I learnt from the hedge fund business, and it’s incredibly powerful.
The other thing that I find is the greatest tool in the world is Twitter. I get thousands of research emails, of which I don’t read many. But I’m on Twitter all the time because everything is there, it’s my curated source of great information.
There are incredible people trading oil markets or equity markets or volatility or bonds. They’re all on twitter and they’re all talking and they’re all sharing information, telling you what news is important to them. It’s the best-curated news source on earth. It’s incredible.
So how do you sniff out what to look for on Twitter? Do you use a curation platform or go through it manually?
I think it’s better manually because you curate your own experience. It doesn’t take long.
At first, you’re like “oh my God, I don’t really know what to do with this”, I didn’t know. I’d never used Twitter. I only started on Twitter five years ago, and now I’ve got something like 110,000 followers.
I don’t follow that many people, I follow a few hundred and it’s extraordinary.
It takes a little bit of time. Give it a week or two, and before you know it, you become addicted and it’s the best source of news in the world.
Probably FinTwit as well, I’m part of that community, I’ve got a reasonably large number of followers on that. So just follow me. I’m not looking for followers necessarily but the point being is you can then see all the people that I speak to. There’s a whole network.
We’ve got fantastic Asian economists there, people looking at the Australian property market, UK guys, politic experts. They’re all there. It’s extraordinary, the value add of that community.
Once you get involved, you’ll see all the people replying and tweeting to each other, and that whole FinTwit community is really amazing.
Anything to avoid?
Never trade news headlines, but try and trade the knock-on effects. And that requires just a little bit of work.
Just try and build your own framework. I think a lot of people want somebody else to give them the advice but the reality is you absorb information and then create the opportunity that you’re trying to set yourself up for.
If you’re investing, what you’re doing is trying to absorb stuff.
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