Tom BilyeuWhy 3 Private Companies Are Worth 45 Years of Public Tech — And You're Locked Out
Tom Bilyeu
The Setup Being Watched 0:00
The video opens with a specific detail, the US government has drained its Strategic Petroleum Reserve for 26 straight weeks, pushing it to its lowest level since 1982, a 44 year low. This matters more because America produces more oil than any country on earth and even exports it, so draining the emergency tank makes no obvious sense. The host frames this as one of three things that landed this month that, taken together, worry him, even though each looks harmless alone. He promises to reveal what skilled investors are doing and a specific number that changed his own positioning, while warning that the average saver who just buys assets and ignores everything else is going to get hurt regardless of what regime the economy is entering.
The Debt Trap Behind Everything 4:00
Felix Preen, a former investment bank economist now teaching investing for six or seven years, explains the backdrop, the national debt is enormous and only grows more expensive as interest rates rise, with the 10 year bond now above 5 percent and the 30 year higher still. A government trapped this way has three ways out, austerity, heavy broad based taxation like Nordic countries use, or growth strong enough to outrun the debt, similar to what followed World War Two. The most likely path, though, is neither, it is pushing interest rates back down while letting inflation run higher. Argentina is offered as a cautionary example, a country that went from rivaling the US for immigrants in the 1920s to economic ruin after a century of redistributive policy. Japan is offered as the live version of the low rate path, three decades of stagnation, zombie companies kept alive by cheap borrowing, and salary workers quietly absorbing the cost.
Why The Oil Reserve Is Draining 11:02
The reserve exists as backup for disruptions like hurricanes or blocked shipping lanes, and it once held nearly three times its current volume. The president has pledged to refill it with Venezuelan oil, but Venezuela only pumps about a million barrels a day, tankers take roughly 30 days to load, and the crude is heavy and sulfur rich, meaning it does not meet the reserve's specifications. A real energy partnership with Venezuela could eventually make North America the largest energy bloc on earth, but that outcome is 10 to 20 years away, not a fix for now. The real reason for draining the reserve, the hosts argue, is to hold down the oil price so inflation numbers stay manageable, since a bad inflation reading is the one thing that would stop the government from printing more money.
Strategic Reserves Nearly Empty 14:31
Building up strategic oil reserves during a supply disruption would mean competing with ordinary buyers for the same barrels, so governments instead lean on releasing existing reserves to keep pump prices looking acceptable. That reserve is now almost empty, which becomes a trap because the only way to hold prices down is to keep draining a tank that has little left. If another shock hits, such as a hurricane or a worsening Middle East war, diesel prices spike first since diesel moves freight, and then costs ripple into everything transported by truck, including food and building materials. Much of the impact depends on how much oil can still move through the Strait of Hormuz; if disruption stays limited, the effect is smaller, but a bad crop season without enough fertilizer could hit food costs hard. The calm being shown to the public is effectively manufactured by borrowing from the future, possibly timed around the election.
How Inflation Favors Asset Owners 19:00
Inflation hits people differently depending on whether they hold assets. Someone working a salaried job for twenty years, as is common in Japan, ends up much worse off than expected, while the wealthiest in a country do well because inflation does not touch them the same way. The mechanism is that asset values rise with inflation, and when those assets are sold, the seller ends up holding post-inflation dollars, effectively hiding wealth from inflation and then cashing in at an advantage. This asset class is available to everyone but rarely used because economic literacy is not widely taught. In turmoil, people turn to things that cannot be printed, like precious metals, as a way to step outside the inflating system.
The Treasury Buying Its Own Debt 22:30
The US Treasury has doubled the amount of debt it buys back, four billion dollars at a time, labeling it liquidity support. Normally foreign governments and pension funds buy US debt, but there are now more bonds being sold than there are buyers, so the government has started buying its own debt, which is described as legalized counterfeiting. This mirrors what Japan did for nearly thirty years, keeping interest rates near zero, which caused decades of stagnant wages before COVID-driven inflation finally broke through. The process works by the Federal Reserve printing money to buy short-term government debt, which supplies cash used to buy up longer-term debt, artificially lowering interest rates. This is compared to the money printing during COVID, when the money supply grew forty percent and inflation, officially near eleven percent, was likely far higher in reality.
Three Private Giants Outweigh Decades 29:01
This month it was reported that SpaceX, Anthropic, and OpenAI, three private companies, are worth more than every US company that went public in the past 45 years combined. Companies now stay private for 10 to 15 years, letting early private investors capture most of the value before everyday investors get access, turning later public buyers into what's called exit liquidity.
Stock Market Concentration Risk 31:01
American households have never had more of their net worth tied up in stocks, about a quarter of total US net worth. Yet the top 10 percent own 93 percent of those assets, a concentration higher than the dot-com peak or 2008. The five largest S&P companies now make up 30 percent of the entire index, meaning even a safe index fund rides mostly on the same handful of tech names. The Cape Ratio, normally around 16, now sits above 40, a level historically followed by crashes.
Echoes of the Dot-Com Crash 34:00
Microsoft made 99 percent of its value after going public, but companies staying private longer make that outcome less likely now. The dot-com crash took 15 years to recover from. When everyone owns the same five stocks, there's no one left to sell to when sentiment turns, and prices become driven by narrative rather than fundamentals, causing sharp drawdowns.
Following the Smart Money 36:00
Watching what informed investors actually buy, like Donald Trump's disclosed trades, tracked through the Winston app, shows a pattern: buying Berkshire Hathaway, Visa, Mastercard, Home Depot, Tractor Supply, and Republic Services, while selling Meta, Palantir, and Netflix. The pattern favors dull, essential, inflation-resistant businesses over crowded tech names, even though most retail portfolios remain nearly all tech.
Tech's Real Strength and Risk 38:31
Unlike the cash-burning dot-com era, companies like Anthropic generate revenue at an unprecedented pace. Still, the economy shows late-stage bubble signs: heavy margin use, an energy-driven inflation crisis rate hikes can't fix, and over 40 trillion dollars in debt with interest payments as the top federal budget line.
Why Boring Businesses Survive 41:30
Cash-light, toll-like businesses such as credit card networks benefit from inflation since their take rises with prices, while waste management thrives regardless of economic conditions. AI firms show real revenue, but their debt is currently outstripping revenue growth, and valuations near 45 times revenue raise doubts about whether that growth is achievable soon.
Betting On AI Productivity Gains 44:32
It is possible AI's productivity gains, once fully spread through the economy, could be unlike anything seen before. This is part of the bet Trump, Bessent, and Warsh are making, though you should avoid over-indexing on that outcome alone.
Finding Companies Positioned To Thrive 45:00
Study what works now and historically, note past vulnerabilities, and identify companies likely to thrive ahead. Since inflation isn't disappearing, holding assets remains essential for navigating what comes next.
Urgent Call To Pay Attention 45:32
The speaker stresses genuine concern that people will suffer as the economy reorients, urging continued attention to economic content, whether from him or others, calling it individually consequential.
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