00:00:00
Jake out do you have intros today no I
00:00:02
don't have time for intros oh come on
00:00:04
all right fine he started as a nerd with
00:00:06
no followers on Twitter now he's a nerd
00:00:08
that gets recognized when leaving the
00:00:10
[ __ ] he turned water into wine he
00:00:12
just wants to please us now he's a
00:00:13
mixture of Kermit defrog and a science
00:00:16
nerd Jesus he's the man with the stands
00:00:18
the queen of quinoa the Sultan of
00:00:19
science the prince of Prozac the Lord of
00:00:21
Lexapro he gets stops for selfies all
00:00:24
over town my producer fee gave him a
00:00:27
mental breakdown the zultan of Zoloft Mr
00:00:29
David Friedberg it's true it did give me
00:00:31
a breakdown but you're over it now you
00:00:34
just name dropped three ssris in that
00:00:36
intro is incredible well I talked to his
00:00:38
I talked to his psychiatrist he said
00:00:40
he's working on the cocktail yeah save
00:00:41
some for me
00:00:44
oh oh you speaking of you he's got a
00:00:47
very quick wit and impeccable grammar
00:00:49
known for building beautiful products
00:00:50
that don't work oh my God like Colin and
00:00:53
Yammer he used to invest in SAS quite a
00:00:55
lot now he's fighting a brigade of
00:00:57
Ukraine Bots he's spending so much time
00:01:00
in his bunker it's starting to get
00:01:01
smelly we see him only three times a
00:01:03
week all in Tucker and Megyn Kelly he'd
00:01:06
invest in your startup if you had the
00:01:08
Knack but right now he needs that cash
00:01:10
for his GOP Super PAC the world's
00:01:12
biggest [ __ ] the Rain Man himself Mr
00:01:14
David sacks that's all
00:01:17
that's a repeat joke that's not I know
00:01:20
but it kills every time so I'm gonna
00:01:22
keep repeating it until you
00:01:24
tell you
00:01:28
it's friends with his white truffles he
00:01:30
scaled Facebook to a billy that wine
00:01:32
collection it's just [ __ ] silly he's
00:01:34
on the world tour meeting with princes
00:01:36
and kings is he talking luxury sweaters
00:01:38
or maybe bigger things the dictator
00:01:41
himself chamath polyhapatia that was
00:01:44
really nice actually wow I mean I
00:01:46
appreciate it you were obviously trying
00:01:47
to get invited to dinner tonight because
00:01:49
I'm trying to get off the alternate
00:01:50
alternative list he's trying to get off
00:01:52
the alternate that the email was harsh
00:01:54
nine was alternate all right you were
00:01:56
trolling me I know I have a seat as for
00:01:59
me I'm the world's greatest moderator
00:02:00
who can take a note compared to these
00:02:02
guys I'm just a millionaire who's broke
00:02:04
the all in Summit almost killed us but
00:02:06
we came back from Death store I knew he
00:02:08
peaked when Friedberg took over the
00:02:10
Dance Floor we love the fans but we love
00:02:12
each other more thanks for the first 100
00:02:14
fellas here's to 100 more really good
00:02:17
wow that's really really good look at
00:02:20
you touching surprisingly you came
00:02:22
prepared today
00:02:24
first time he fought after 100 he
00:02:26
finally
00:02:27
to prepare so that was the note just
00:02:30
prepare your job just do your job do
00:02:34
your job do your job do your
00:02:36
unremutirated job do your job speaking
00:02:39
of unremmediated we heard that
00:02:41
somebody's grifting off the Pod oh yeah
00:02:43
so good point what we heard sex is that
00:02:47
you got a big care package from
00:02:48
Montclair yeah that's true what what I
00:02:52
think we're all going to declare today
00:02:53
is that we all want to wet our beak and
00:02:56
if Montclair sends each of us a care
00:02:58
package we will all wear Montclair gear
00:03:00
at episode 100 of course my brand go to
00:03:03
your own brand yeah we decided to
00:03:05
jamasca Laura piano I got Montclair you
00:03:08
go get like you know Izod or something
00:03:12
I saw it actually I got eyes on too you
00:03:15
have to just uh I got Uniqlo we got Gap
00:03:19
Kids for Jay cow
00:03:20
it sucks you didn't you didn't declare
00:03:22
your Moncler gift package that was the
00:03:25
discovery we made this weekend so I want
00:03:27
to thank I want to thank the folks that
00:03:28
there's a company called
00:03:32
and they sent me this uh gift actually
00:03:35
this hoodie this Montclair hoodie which
00:03:36
I never said what is this plug
00:03:39
they send you a hoodie for 1200
00:03:45
or from Montclair yeah
00:03:50
these guys are getting hundreds of
00:03:52
thousands of dollars
00:03:54
yeah how bad is your portfolio that
00:03:57
you're grifting did you put this
00:03:58
Montclair stuff onto like eBay after you
00:04:01
got it I was already wearing it they
00:04:03
sent me more so I'm gonna wear this
00:04:05
hoodie is pretty cool what can I say I'm
00:04:07
not gonna work it's three cents and all
00:04:08
of a sudden you're grifting uh hey just
00:04:10
for everyone listening I'm looking for a
00:04:12
wardrobe too soon okay just send my
00:04:14
package to my own let me tell you
00:04:16
something there's no upgrade that's
00:04:17
gonna help Freeburg I think you're
00:04:19
[ __ ] no I'm gonna bring you guys
00:04:20
Montclair shirts to the poker game
00:04:21
tonight gee thanks sax appreciate that
00:04:24
how did how did you guys even find out
00:04:26
that he got this gift we're at his Fleet
00:04:28
Week party and there was an angel some
00:04:30
uh Blue Angels party and there's someone
00:04:32
there
00:04:33
who started telling me like did you hear
00:04:36
the sex cut this whole thing oh somebody
00:04:37
there's a rat there was a I'm not
00:04:40
telling you there's a rest but he's got
00:04:41
to leave he's got a mole we were talking
00:04:43
about the podcast we were talking about
00:04:44
100 100 it was away 100 no no it wasn't
00:04:48
what way no 100 was it Jeff I know what
00:04:51
are my one of my friends was in the man
00:04:54
cave and he saw this like care package
00:04:56
from Montclair and he really admired
00:04:58
this like jacket it was like a puffer
00:05:00
jacket but with like wool sleeves or
00:05:02
something so you gave it to him and I
00:05:04
gave it to he liked it so much I'm like
00:05:06
I'm like here you take it you're not
00:05:08
even on the Pod he's not even on the
00:05:09
podcast give it to producer Nick so he
00:05:12
was walking around with it he was really
00:05:13
appreciative so maybe he said something
00:05:15
or well
00:05:18
see let's just say there was a lot of
00:05:20
conversations going on about your care
00:05:21
package socks well and it makes us
00:05:24
Wonder sacks are there other care
00:05:25
packages that have come in and like have
00:05:28
you been promoting other stuff on here
00:05:29
so who makes the captions behind the
00:05:31
magazines that you wouldn't want how
00:05:33
much of your Laurel piano have you
00:05:34
actually paid for over the past year
00:05:36
that's 100 here 100 I would never I
00:05:39
would never accept it for free
00:05:42
it's important look wait no all joking
00:05:45
aside
00:05:46
it's hard if you're running a clothing
00:05:48
business especially if you're like a
00:05:50
small Niche provider stuff so yeah you
00:05:52
have a responsibility to pay for this
00:05:53
stuff not to grift and get it for free I
00:05:55
know when I was at the Laura piano store
00:05:57
on 57th Street in Manhattan the 18 000
00:06:00
square foot store I was thinking the
00:06:01
same thing these poor people how do they
00:06:03
survive well literally 170 square foot
00:06:09
renters Friedberg
00:06:12
exploiting poor baby goats well whatever
00:06:14
I mean the fact is the Market's down
00:06:16
there's gonna be a little grifting on
00:06:17
the margins it's understandable
00:06:19
[Music]
00:06:20
let your winners
00:06:21
[Music]
00:06:27
we open source it to the fans and
00:06:30
they've just gone crazy with them
00:06:35
Freeburg he loves to produce every 17th
00:06:39
episode he does a great job oh no I like
00:06:40
to prepare or at least know what the
00:06:42
heck we're going to talk about when we
00:06:43
get together
00:06:49
oh God all right so first up on uh
00:06:52
freeberg's curiousness this is uh free
00:06:55
bird this is how you're gonna do it
00:06:56
let's skip ahead to the next section
00:06:58
come on no no okay so
00:07:00
um go go go why do you think chamoth
00:07:03
people love the podcast why do you think
00:07:05
they listen why do you think they love
00:07:07
it what is the the phenomenon what what
00:07:09
lightning has been captured in this
00:07:10
bottle first is I think that they
00:07:13
appreciate our friendship it's kind of
00:07:15
like odd and quirky
00:07:17
and I think a lot of you know
00:07:20
it maps to like relationships that they
00:07:22
have
00:07:22
amongst their own friends so that's what
00:07:24
makes it relatable
00:07:26
but the second is that all of us
00:07:28
uniquely have a point of view
00:07:31
about stuff that matters more and more
00:07:33
in the world I think that's just the
00:07:36
basics of it like it's not like
00:07:37
technology is going away
00:07:39
and it's not like its impact in the
00:07:40
world is going away and the more it
00:07:42
becomes mainstream the more it's
00:07:43
important for a lot of folks to
00:07:45
understand what's happening and I think
00:07:48
we provide a pretty unfiltered view of
00:07:50
it and
00:07:52
we do it where and this is a lot of
00:07:54
credit to sax more than anyone else on
00:07:57
this show
00:07:58
to take a Counterpoint and steal man
00:08:01
what would otherwise be controversial
00:08:02
views and if he didn't have his three
00:08:04
friends around him that would make the
00:08:06
Pod meaningfully worse I think
00:08:08
can you evacuate for people who don't
00:08:10
know what steel Manning is what that
00:08:11
means well just it just means like to
00:08:13
have intellectual honesty around a point
00:08:15
of view and actually put your best foot
00:08:18
forward and trying to explain it even
00:08:19
when it's not Orthodox even when it's
00:08:21
not what the mainstream would say is
00:08:23
right
00:08:24
and so what it actually does is it
00:08:26
creates a contrast against every other
00:08:28
alternative that you have to learn about
00:08:30
things which you find incrementally is
00:08:34
biased and I think that's what we've
00:08:37
gotten right we are four friends that
00:08:39
have a reasonable point of view rooted
00:08:41
in some amount of success and I think
00:08:43
that that's important because it gives
00:08:44
us credibility
00:08:45
and we take all sides of issues
00:08:48
yeah and oftentimes it is not the
00:08:51
obvious simple reductive answer
00:08:54
and I think that that's where
00:08:57
um it really shines just so people know
00:08:59
about the steel man argument you want to
00:09:00
make sure people are currently I think
00:09:01
most people refer to it as the act of
00:09:03
presenting the other argument in the
00:09:06
strongest way possible to be
00:09:07
intellectually honest like the opposite
00:09:09
exactly obviously because the way the
00:09:12
way the debate happens on Twitter and so
00:09:14
forth is it's almost like the
00:09:17
intellectual debate is uh being attacked
00:09:20
uh using opposition research tactics
00:09:22
like or a political campaign so in other
00:09:24
words they go back through anything you
00:09:26
might have said or written take the the
00:09:29
thing that was most wrong or at least
00:09:31
justifiable or the thing they can even
00:09:32
just take out of context and then
00:09:34
they'll try to make it about that as
00:09:36
opposed to the argument you're actually
00:09:38
making and we just see this tactic over
00:09:41
and over again and it's not an
00:09:43
intellectually rigorous way of having a
00:09:46
debate about something you don't learn
00:09:47
anything right and deep down inside you
00:09:50
know that it's contrived and that is the
00:09:52
in a nutshell so it has it almost in
00:09:55
many ways has less to do with how good
00:09:57
we are but frankly how bad all the
00:10:00
alternatives are
00:10:01
so even if you wanted to learn about
00:10:02
tech and you go up and you sign up for
00:10:04
these
00:10:06
newsletters or if you look at some of
00:10:08
these Tech sites they're really terrible
00:10:11
and they have done an increasingly
00:10:13
terrible job over the last five years in
00:10:16
telling
00:10:17
the most important things the truth and
00:10:20
everything in between
00:10:21
and so if you can find a source
00:10:24
for an hour a week that is trying to
00:10:28
tell you how basically the world is
00:10:30
going to come together in a really
00:10:33
integrated multi-faceted way it's not
00:10:35
like we're right
00:10:37
and it's not like we know better than
00:10:39
other people in fact many times a lot of
00:10:40
the criticism I get is how dare you talk
00:10:43
about X or how dare you talk about why
00:10:45
because it makes people who are experts
00:10:47
in that field you know feel like how
00:10:49
dare you come into my realm and even
00:10:50
have an opinion on you know uh what
00:10:53
Russian politics was like in the 1980s
00:10:55
and those things really annoy these
00:10:58
folks because they feel that those
00:10:59
opinions and that knowledge
00:11:01
should be cordoned off and held tightly
00:11:03
as this secret that only they are
00:11:05
allowed to talk about into the world and
00:11:07
this is the point where with the
00:11:09
internet
00:11:10
all this knowledge is accessible so the
00:11:13
value of that knowledge in my opinion is
00:11:15
the least it's ever been it's the
00:11:17
interpretation that's valuable and it's
00:11:19
the ability to actually like think
00:11:21
narratively around how all these things
00:11:22
connect and this is where I give a lot
00:11:24
of credit I think you guys do an
00:11:25
incredible job I think the way fried
00:11:27
Brooke thinks is super unique I think
00:11:29
the way that saxis thinks is unique I
00:11:31
think jaycal your courage to basically
00:11:33
fight back is very special all of it
00:11:36
together
00:11:37
is a really unique recipe it works and
00:11:39
what I will tell you consistently
00:11:41
is the number of people
00:11:44
that listen to this
00:11:46
of import and influence I am constantly
00:11:49
shocked and if you are not sure of it
00:11:52
you need to get out of this stupid
00:11:53
little Echo chamber of Silicon Valley go
00:11:56
to New York go around the world and if
00:11:58
you're in the right meetings it's
00:11:59
incredible how folks are getting
00:12:00
educated using this pod and I think
00:12:02
that's that's really amazing yeah I
00:12:03
think I I think there's like been a
00:12:06
tendency
00:12:07
in like what we call Media today
00:12:10
historically kind of you know
00:12:12
communication amongst humans it was very
00:12:15
slow for a communication cycle to go
00:12:18
from beginning to end to close because
00:12:20
we had print and books and then
00:12:22
telegraphs and telephones and then
00:12:24
television and then and radio
00:12:26
and the internet I think has really
00:12:27
changed the cycle
00:12:29
um the loop cycle to the point that you
00:12:32
know a story iterates and proliferates
00:12:34
very quickly a lot of people talk about
00:12:37
the new cycle being very short nowadays
00:12:39
and what that means is that there is a
00:12:43
group think approach to resolving to a
00:12:46
point of view on what the news is so the
00:12:48
news comes out everyone iterates on it
00:12:51
they form their point of view and all of
00:12:52
a sudden everyone's on the same point of
00:12:54
view and so there is no room for Dissent
00:12:56
or debate or discussion because the
00:12:58
cycle closes so quickly and everyone
00:13:00
coalesces around the same point of view
00:13:02
and nowadays I think we see not just
00:13:04
that unipolar behavior but we see this
00:13:07
bipolar Behavior where everyone
00:13:09
coalesces on their point of view and how
00:13:12
their point of view is is the opposite
00:13:14
of the other side and everyone has their
00:13:16
own heuristic for what the other side is
00:13:18
there's this populism versus elitism
00:13:21
sighting there's this red versus blue
00:13:23
sighting
00:13:24
there's this Us Versus Them citing US
00:13:27
versus China citing everything is now
00:13:29
bipolar and so you very quickly coalesce
00:13:32
around what your poll says and what your
00:13:34
poll is instructing you to believe and
00:13:37
that is what is fundamentally wrong with
00:13:39
how the system is working today and I
00:13:42
think what people find refreshing about
00:13:44
a discourse that doesn't succumb to that
00:13:47
bipolarity
00:13:49
as a standard
00:13:51
is that it provides people the ability
00:13:53
to have a real rational out of sync
00:13:55
point of view that maybe changes one's
00:13:57
point of view and changes one's mind in
00:13:59
a meaningful way and I think that's
00:14:00
what's really missing today and I think
00:14:02
maybe sometimes we do a good job and we
00:14:04
touch on that
00:14:05
and so that's what I would strive to do
00:14:07
is to always try and avoid that
00:14:08
bipolarity on everything you know the um
00:14:12
Zen Buddhists call it dualistic thinking
00:14:14
you know the human brain and generally
00:14:17
the universe seems to evolve into this
00:14:19
kind of dualism on everything
00:14:21
and it's not really always the case that
00:14:23
there are Shades of Gray that there um
00:14:25
is Nuance uh that there is a complex uh
00:14:28
dimensionality to things that I think
00:14:30
people really if they take the time to
00:14:32
understand recognize that maybe it's not
00:14:33
left and right maybe it's not Elite and
00:14:35
populism maybe it's not all black and
00:14:37
white and that's an important
00:14:39
hopefully framing that maybe we can
00:14:41
bring bring to light through our
00:14:43
diagnosis of what's going on in things
00:14:45
right now yeah and I I'd like to add to
00:14:47
that I think there's there's a ton of
00:14:49
great journalism going out there we see
00:14:50
it um there's a ton of great sub Stacks
00:14:52
out there people go deep there's other
00:14:53
great podcasts out there and right now
00:14:55
it's a tumultuous time for media
00:14:57
journalism and and getting information
00:14:59
and do what trust what sources do we
00:15:02
actually trust who actually is thinking
00:15:04
in a crisp way
00:15:06
um and informing people and you know
00:15:09
having been a former journalist when we
00:15:10
were journalists we knew that we would
00:15:12
get 10 20 30 40 of a story we would
00:15:14
publish it and we would try our best uh
00:15:17
but journalism has changed dramatically
00:15:20
in the last 20 years and I can tell you
00:15:23
journalism is dead sorry okay I'm sorry
00:15:25
there's some great journalism occurring
00:15:27
it's on the margins it's irrelevant and
00:15:30
I'll tell you why because the facts are
00:15:31
known instantaneously on Twitter and
00:15:34
through the internet we don't need
00:15:35
people to relay facts we need people to
00:15:37
wrap facts in context and allow us to
00:15:39
come to our own conclusions that's why I
00:15:42
think journalism isn't what it used to
00:15:43
be that's why people who are
00:15:45
historically journalists struggle
00:15:47
because now they actually have to create
00:15:49
context and narrative and have an
00:15:50
opinion but when you publish that into
00:15:52
the Wall Street Journal or the New York
00:15:54
Times it becomes very confusing they
00:15:56
don't know that that's what they were
00:15:57
supposed to do that's not what they used
00:15:59
to do that's not how Pulitzer prizes
00:16:01
were were historically given out and
00:16:04
that's why everybody then you know Rants
00:16:05
and rails about things kind of going is
00:16:07
you know if you if you look at it as
00:16:09
journalists people don't know this but
00:16:11
journalists are being compensated
00:16:12
they're little salaries in many cases
00:16:14
are based on their follower accounts
00:16:16
they're based on what audience they're
00:16:18
bringing to the table and you see this
00:16:19
in sub stack sub Stacks just said we're
00:16:21
going to hire the top
00:16:22
journalists on who have the most
00:16:24
followers on Twitter but you have to
00:16:26
change the word so that you change how
00:16:27
people think about it these people are
00:16:28
not journalists these people are opinion
00:16:30
makers okay in some cases they're doing
00:16:32
journalism in some cases no no there are
00:16:35
some cases where they're actually doing
00:16:36
real journalism there are people doing
00:16:37
investigative reporting still it's not
00:16:39
the majority of what you see but it
00:16:41
still exists it's just a very much
00:16:43
smaller percentage but putting that
00:16:45
aside if you think about but you can't
00:16:47
wrap a virtuous blanket around every a
00:16:50
thousand people because of the acts of
00:16:51
one I'm not and I'm not I said there's a
00:16:55
range here it's a small percentage but
00:16:56
this is
00:16:58
what do you think that percentage of
00:17:00
content creation I put it at five
00:17:01
percent so that's you know one out of
00:17:03
20. yeah shocked yeah anyway I think
00:17:05
it's less than one percent but let me
00:17:06
just finish this one thought here you
00:17:08
know if you are going to be hired and
00:17:12
compensated and we we talk about systems
00:17:14
here a lot so just thinking from first
00:17:16
principles if you're a journalist if
00:17:17
you're a writer opinion writer whatever
00:17:18
you produce content for Wall Street
00:17:20
Journal for podcasts Etc
00:17:22
today let this sink in your follower
00:17:26
account is what your book Advance is
00:17:28
it's what your compensation is it's who
00:17:31
hires you now if that's the truth and
00:17:33
it's it's not all the time but I think
00:17:35
that your job is not to relay facts we
00:17:38
can get facts exactly let me finish my
00:17:40
thought here and so then what happens is
00:17:42
how is follower account on Twitter
00:17:43
actually derived how do you get that
00:17:46
follower count by being tribal and so
00:17:48
what's happened is journalists that
00:17:50
became tribal they get big followings
00:17:52
they give spicy takes they pick a side
00:17:54
and then their compensation follows it
00:17:56
and that's why New York Times said can
00:17:57
we all stop on Twitter and they
00:17:59
literally put an edict out then you look
00:18:00
at this podcast I think people look at
00:18:03
us as you know in their mixture
00:18:05
podcasting long form taking the time
00:18:07
week after week to spend 90 minutes
00:18:09
chopping these things up I think that's
00:18:12
what to the original question Freeburg
00:18:13
you had is what people find so great I I
00:18:15
when people ask me I say it's really
00:18:18
about the fact that there's a there's a
00:18:19
friendships here and it's funny but it's
00:18:21
also informative and it it's insightful
00:18:23
and at times as you're pointing out your
00:18:24
mouth you know random acts of bravery
00:18:27
and taking positions that are not
00:18:29
popular
00:18:29
and and to think that you and Friedberg
00:18:32
almost blew this up over a few hundredk
00:18:35
I didn't oh yeah no the two of you
00:18:37
equally should share I wouldn't classify
00:18:39
it that way by the way here we go now
00:18:42
the bad feelings are ready getting spicy
00:18:45
I'm more of an ethical framework but
00:18:47
yeah that's mine go ahead that's even
00:18:49
worse
00:18:51
look at Jim Bob stirring the pot just to
00:18:54
chime in on this point I mean I think
00:18:55
I'm in violent agreement with you guys
00:18:57
but I'd frame it a little differently I
00:18:58
think the reason why people seek out our
00:19:01
podcasts and other podcasts and sub
00:19:03
Stacks is and and sort of this kind of
00:19:06
independent journalism and are willing
00:19:08
to pay for it is because the mainstream
00:19:10
media has become totally
00:19:13
devoid of substance it's as partisan and
00:19:17
idiol and ideologized as it's ever been
00:19:19
reporters are extremely ideological you
00:19:22
look at the New York Times The
00:19:23
Washington Post the your major
00:19:25
television networks it's all kind of the
00:19:27
same thing and yeah there is like you
00:19:29
know a little bit of an echo chamber
00:19:31
problem in terms of the partisan
00:19:32
politics but the mainstream media is the
00:19:35
most ideologized it's ever been
00:19:37
I mean just to give you one small
00:19:38
example that we talked about in the pod
00:19:40
the you know we had two quarters of
00:19:43
negative GDP growth which the media is
00:19:45
always considered to be the definition
00:19:46
of recession and then all of a sudden
00:19:47
they said no we can't know what a
00:19:49
recession is anymore because they know
00:19:51
that'd be a horrible headline for Biden
00:19:52
right before the midterm elections
00:19:53
that's more of a partisan version I
00:19:55
think on the you know a more ideological
00:19:58
version would be just around this
00:19:59
Ukraine war I mean it's just incredible
00:20:02
how biased the coverage is they don't
00:20:04
even present the other side of the story
00:20:07
like it's called the meershimer take
00:20:09
about how we got to this point that
00:20:11
we're in so the American people just
00:20:13
aren't being informed at all I you know
00:20:15
we we love to talk about how the people
00:20:18
of all these other countries are being
00:20:20
propagandized by their governments we
00:20:21
never talk about how propagandized the
00:20:23
American people are the media does not
00:20:25
present the other side of the story at
00:20:27
all on how we got into the Ukraine war
00:20:31
and how we're now at the brink of what
00:20:33
Biden calls Armageddon
00:20:41
that we see
00:20:44
you know effectively short formed and
00:20:46
short form meaning it can be presented
00:20:48
in a sound bike or on a tick tock clip
00:20:50
or in a couple paragraphs where
00:20:53
someone's attention span before
00:20:54
someone's attention span lapses out
00:20:56
always misses the dimensionality that
00:20:59
got us to that point and so there's one
00:21:01
perspective one point of view on one
00:21:04
dimension and the dimension like tax is
00:21:06
talking about about the time and the
00:21:08
history of the Dynamics of all the
00:21:10
countries and all the people and all the
00:21:12
interactions that have happened for the
00:21:14
past couple of decades that led up to
00:21:16
this moment but then this moment is
00:21:18
taken in its context alone and
00:21:20
reclassified as being something that is
00:21:23
good versus evil it completely misses
00:21:26
the entire storyline of what happened
00:21:28
it's like going to be end of a fairy
00:21:30
tale and saying here's this moment of
00:21:31
what happened and all the build up and
00:21:33
all the things that occurred are often
00:21:35
missing and all the different sides of
00:21:36
the story are missing and I think that
00:21:38
that's really what makes it so difficult
00:21:40
today to feel like you can trust
00:21:42
Authority and that you can trust the the
00:21:45
media that's presented to you as a
00:21:47
consumer not just in the US or in the
00:21:49
west but around the world because
00:21:51
there's so much that's left out and
00:21:52
manipulated and kept away and what
00:21:54
people are waking up to is the fact as
00:21:57
kamath points out that so much of that
00:21:58
information the direct information is
00:22:02
available now and so this investigation
00:22:04
this ability to uncover the data and the
00:22:08
story lines and the perspectives that
00:22:10
are typically missing from one form of
00:22:12
media is making people realize that
00:22:14
there's so much that's being left out
00:22:16
the lie about this 100 100 and I think
00:22:18
in this podcast that's what's really
00:22:20
shocking to people nowadays and I think
00:22:22
that's what makes maybe to some degree
00:22:23
hold our conversations a little more
00:22:25
appealing I'll I'll drop to you in a
00:22:27
second there sex but I did see this
00:22:29
happen in three specific topics that we
00:22:31
discussed here uh if you remember we
00:22:33
talked about abortion and we were on
00:22:35
that topic very early and no one wanted
00:22:37
to talk I remember when we started
00:22:38
talking about the number of weeks maybe
00:22:39
how Europe looks at this that wasn't
00:22:42
part of the popular conversation it was
00:22:43
always just are you against Choice are
00:22:46
you for killing babies it was like a
00:22:48
very two-dimensional look at it
00:22:50
immigration same thing nobody would talk
00:22:52
about the numbers nobody talked about
00:22:53
recruitment nobody talked about the
00:22:54
point systems used in other countries it
00:22:57
was almost like those basic things were
00:22:58
not allowed to be discussed why can't
00:23:02
the media discuss those nuances and
00:23:03
freedom of speech is I think the biggest
00:23:05
one and the search for truth you know
00:23:08
nobody wants to talk about the fact that
00:23:10
the ACLU used to actually protect
00:23:12
unpopular speech and unpopular speeches
00:23:15
you know the hardest thing in the world
00:23:16
to protect but how did that become
00:23:18
something we can't even talk about now
00:23:20
right and and just the snap uh silencing
00:23:24
of any opinion whether it's Chappelle or
00:23:26
you know pick a topic in freedom of
00:23:29
speech Trump Etc you know who gets
00:23:31
protection for freedom of speech and
00:23:33
we'll talk about it later on the news
00:23:34
with Alex Jones obviously a very uh
00:23:36
controversial topic as well go ahead sax
00:23:37
do you want to add something to it well
00:23:39
I think just to take this Ukraine
00:23:40
situation as an example I think the
00:23:42
media's biggest power is the power to
00:23:45
Define when time begins on an issue well
00:23:49
like right with Ukraine we're part of an
00:23:52
escalatory spiral that's been going on
00:23:54
for well more more than eight or nine
00:23:57
months this issue's been going on since
00:23:59
2000 decade yeah for a decade so in
00:24:02
other words if you come in in like the
00:24:05
seventh inning okay so it's a free Works
00:24:07
point you come in at the end of the
00:24:08
story and it's been an escalatory spiral
00:24:10
but the media just pretends like time
00:24:12
begins on February 24th of course you're
00:24:15
gonna have a certain kind of view on the
00:24:16
subject whereas if you know the history
00:24:19
of the situation if you know that back
00:24:22
in the 1990s you had people like George
00:24:24
Kennan who was the architect of our Cold
00:24:25
War containment policy you had uh
00:24:27
William J Perry was Bill Clinton's
00:24:29
defense secretary you had Henry
00:24:31
Kissinger you had John meersheimer all
00:24:33
warn that bringing NATO right up to
00:24:35
Russia's front porch was extremely
00:24:37
provocative to them that they would see
00:24:39
that as a provocation it would
00:24:40
eventually lead to a moment of crisis
00:24:43
when that moment of Crisis finally came
00:24:46
you know we're not told that this was
00:24:48
predicted we're told that anyone who
00:24:50
says that this war has anything to do
00:24:52
with NATO expansion is basically a Putin
00:24:55
apologist and is spouting Putin talking
00:24:57
points all right let's not let's not
00:24:58
let's save some of that for the Ukraine
00:25:00
talk we're going to talk about it
00:25:01
you could agree or disagree with that
00:25:04
take but the point is the media doesn't
00:25:05
even portray it
00:25:07
they really just pick a side and they I
00:25:09
think I like your analogy of like just
00:25:10
coming in for the last 15 minutes of the
00:25:12
game and just describing that you know
00:25:14
we you need to have a deeper discussion
00:25:16
of how did we get here how did we get
00:25:17
here on immigration why don't we have a
00:25:19
point system why do we look at people
00:25:21
suddenly coming from South of the Border
00:25:23
differently than we did just 20 years
00:25:25
ago how did that become a politicized
00:25:26
issue what's the right solution here
00:25:27
especially if we can't hire people for
00:25:31
basic jobs in the United States
00:25:32
everybody wants to know this question
00:25:34
what's your favorite you have a favorite
00:25:36
moment or a least favorite moment a a
00:25:40
great moment in the show history and
00:25:41
then I guess we'll move on maybe to some
00:25:43
audience questions here but let's let's
00:25:44
get this one because an embarrassing
00:25:46
moment your favorite moment your least
00:25:48
favorite moment a moment now you look
00:25:51
back on and you you're particularly
00:25:52
proud of tomorrow I love the cold opens
00:25:54
I I think that they are uh unbelievably
00:25:57
human and funny and normalizing
00:26:01
they are by far the best part of the pod
00:26:07
and
00:26:08
yeah that's my that's my absolute
00:26:11
favorite part by by like miles and miles
00:26:13
uh it's actually got a favorite moment
00:26:16
other than Ukraine other than Ukraine I
00:26:19
know you got Ukraine on the brain
00:26:20
probably you when you started talking
00:26:22
like Joe Pesci
00:26:24
the Joe Pesci voice
00:26:27
do it on command I'm
00:26:34
[ __ ] a [ __ ] bad idiot
00:26:37
uh no seriously you have any other
00:26:38
favorite moments
00:26:40
um or things you're particularly proud
00:26:42
of things that people tell you you know
00:26:44
hey I love what do you I love this part
00:26:45
of the show I'm also proud that we we
00:26:47
were able to air our Dirty Laundry a
00:26:49
little bit in public and still get
00:26:51
over ourselves and our own Egos and
00:26:54
we're still here I think that takes a
00:26:56
lot of courage and a little bit of a
00:26:57
little bit of maturity that's that's not
00:26:59
in uh public visibility all the time
00:27:03
in the media I like that sentiment a lot
00:27:06
I think there's a lot of people yeah
00:27:07
they were uncomfortable about it you
00:27:09
know I I think there's a lot of personal
00:27:10
growth that's going on here uh for
00:27:13
everybody involved yeah
00:27:15
a Freebird you got a favorite moment
00:27:17
other you know I don't like it when you
00:27:19
and sex fight that's just that's your
00:27:22
least favorite moment I literally turned
00:27:25
I turned my headphones off and I like do
00:27:27
some emailing it really is just it
00:27:29
really is just this political thing but
00:27:31
yeah it does come up you know I don't
00:27:33
like the fact all the moments I've been
00:27:34
interrupted by you that like that just
00:27:36
happened five seconds ago like you know
00:27:38
those are usually pretty tough go ahead
00:27:42
I don't know what I what I did enjoy I
00:27:44
did enjoy meeting people at the summit
00:27:47
who shared that this has been like a
00:27:51
really important
00:27:52
thing for them to listen to I I think I
00:27:55
I was at a Pete's Coffee in the city
00:27:58
and some guy came up to me this was when
00:28:00
early after uh early when we were doing
00:28:02
the podcast
00:28:03
and he was like listening to you guys
00:28:05
has really helped me get through covid
00:28:07
and he was like locked in his apartment
00:28:08
and he didn't have a lot of friends and
00:28:10
he didn't have a lot of people to talk
00:28:12
with and just being able to hear through
00:28:15
you know kind of a good conversation
00:28:17
around when's this going to end how's
00:28:19
covid gonna
00:28:21
you know what's going to change in the
00:28:23
city and hearing our friendship really
00:28:25
made a big difference for him and it was
00:28:27
actually really interesting that was off
00:28:28
the show but it made me realize that
00:28:30
this show actually is impactful and
00:28:32
helpful and made gave me kind of the
00:28:34
energy to keep going even though I've
00:28:35
had
00:28:36
uh frustrations um in the past so I
00:28:38
don't know I like I like those moments a
00:28:40
lot to be honest
00:28:42
that there's real value here for people
00:28:46
I also I thought the summit was a lot of
00:28:48
fun I mean I had a good time well you
00:28:51
know it's uh I I think we're steering
00:28:54
towards I think we're staring towards
00:28:55
Summit 2023. that was me starting the
00:28:57
pot a little bit
00:29:00
George 20 I'm done listen as far as I'm
00:29:03
concerned you do it you produce it or
00:29:05
you hire a producer I'll show you
00:29:08
I'm if you I don't need to make a
00:29:10
producer fit you can do it you can take
00:29:12
the producer free whatever it is all
00:29:13
right guys I got a couple of questions
00:29:14
here from the audience
00:29:16
you guys uh see this list yeah we can
00:29:19
stand out for you guys well you pick you
00:29:20
pick so here's a question
00:29:22
um we got it over email
00:29:24
from Nathan and Nathan said we know the
00:29:28
reasons uh the reason you guys started
00:29:30
the Pod what is the motivation of each
00:29:32
bestie to continue doing it every week
00:29:35
and I asked myself that every week
00:29:39
that sex is therapy hey it was that was
00:29:43
Derpy yesterday I was thinking about
00:29:45
taking a break not because I don't like
00:29:46
doing it but it is time consuming and I
00:29:48
do want time to get back to doing some
00:29:50
business writing I was on a pretty good
00:29:52
track to publish a book about SAS before
00:29:56
he started doing the Pod I had written a
00:29:57
lot of business blogs and this is kind
00:30:00
of taking a break how many weeks because
00:30:03
wait 10 weeks what are you thinking
00:30:04
maybe like a month or something yeah oh
00:30:07
four weeks ah wait you can take that's
00:30:09
not a big piece maybe I don't know 40
00:30:10
times all right there's there's a I've
00:30:12
got like a right now it's like doing
00:30:14
jumping jacks in his backyard put me in
00:30:16
the game well we could do that I mean
00:30:18
I've got like five half written business
00:30:20
blogs in my Hopper that I really want to
00:30:22
finish and um so I don't know the show
00:30:25
does take a lot of cognitive energy is
00:30:27
what you're saying it takes a lot of
00:30:28
those things a lot of your time each
00:30:30
week sex I mean as you guys know the
00:30:32
taping is only a couple hours but then
00:30:33
it's just keeping track of all the
00:30:35
issues and then you know if I'm
00:30:37
preparing takes for this pod I also turn
00:30:39
some of those takes into articles this
00:30:41
is foreign
00:30:54
because he is the most heterodox is the
00:30:57
heaviest and this is like poorly
00:30:59
understood it's easy to just basically
00:31:01
be on the side of the current
00:31:03
conventional wisdom or to not have an
00:31:05
opinion and to talk about things that
00:31:06
are orthogonal but David is consistently
00:31:08
the one that Wades into the middle of
00:31:10
the ocean and it is it I can I can
00:31:12
understand why
00:31:13
no because he he knows
00:31:16
and that he has to be more prepared than
00:31:18
the rest of us yes because he is more
00:31:20
open to the attacks from all of these
00:31:22
nitwits
00:31:24
he just did I mean
00:31:26
on Twitter I'm being told
00:31:29
these are like uninformed nitwits you
00:31:31
know they're they're the cancer the
00:31:33
cancer of people who comment on Twitter
00:31:36
is the following they suffer from the
00:31:38
worst kind of cancer which is a lack of
00:31:40
belief in themselves and so what they do
00:31:42
is they point to other people and try to
00:31:45
convince yet more people to not believe
00:31:46
in them but that has nothing to do with
00:31:48
anything it's just misdirection from
00:31:50
their core problem which is they don't
00:31:51
believe in themselves and so you know
00:31:53
David has to fight all of that stuff off
00:31:55
but he has to fight it off with logic
00:31:56
which must be exhausting you know my
00:31:58
Approach has just been to turn off
00:31:59
comments and to not start this is the
00:32:02
single biggest problem I think with
00:32:03
social media is it's at this heightened
00:32:05
point where it's this virulent strain of
00:32:09
a lack of belief in oneself that
00:32:10
manifests in this hatred that you direct
00:32:13
to anybody else that believes in
00:32:14
themselves interesting interesting
00:32:15
Theory yeah and I would just just to add
00:32:17
to that
00:32:18
you know it's not like I haven't heard
00:32:21
any of the arguments that they're making
00:32:23
no I guarantee you they have not heard
00:32:26
the arguments I'm making but but I've
00:32:28
heard all the arguments are made 100 I'm
00:32:30
totally familiar with 1938 Munich
00:32:32
Neville Chamberlain all this kind of
00:32:33
stuff I just don't think that is the
00:32:35
correct understanding of what's
00:32:36
happening right now I think the correct
00:32:38
historical analogy is either 1914 with
00:32:40
World War One and the blank check
00:32:42
guarantee or is 1962 the Cuban Missile
00:32:45
Crisis the people on the other side
00:32:47
generally don't understand that they are
00:32:50
just kind of part of this like Twitter
00:32:51
mob who's buying into the current thing
00:32:54
and whatever they're told by the media
00:32:56
so it it is it is a little bit
00:32:57
exhausting I think that that's what
00:32:59
people don't realize is you know you
00:33:01
when this thing got very popular
00:33:03
the two or three days after an episode
00:33:05
comes out becomes your text your email
00:33:09
your DMs and your replies become filled
00:33:12
especially again I would I would
00:33:13
encourage you to keep doing this thing
00:33:15
and just to turn off comments and don't
00:33:17
look back yeah it's hard for the first
00:33:19
few weeks and then you realize 99 of
00:33:22
people who comment have nothing
00:33:23
important or useful or interesting to
00:33:25
say like zero like negative zero and you
00:33:28
forget that there's like 99.99 of the
00:33:31
world that just reads your content and
00:33:34
couldn't even care about their comments
00:33:44
but it would still be time consuming I
00:33:46
there is a bunch of business blogs I
00:33:47
want to get done so I mean I said you
00:33:50
take two weeks off you come back and see
00:33:51
how you feel I mean you can do it week
00:33:53
by week too I mean just take one week
00:33:54
off
00:33:55
and see it I think you'll I think
00:33:59
he'll come back he'll be back of course
00:34:01
he'll be back great great question from
00:34:03
Nathan thank you for your participation
00:34:05
that's Nathan um next question I
00:34:07
actually like this one I'm gonna pull it
00:34:09
out it's an email question from Juan T
00:34:11
oh hey wanted uh wanted uh Bill Gurley
00:34:14
recently put out a piece explaining how
00:34:16
this might be as good a time as in a
00:34:18
decade to build a company how are you
00:34:20
guys seeing your own portfolio companies
00:34:22
trying to take advantage of the
00:34:23
situation and I guess I'll add do you
00:34:25
guys agree and how do you think about
00:34:26
this as a moment for company building
00:34:29
okay I could take that one
00:34:31
I am seeing a lot of the companies that
00:34:34
were you know had done a great job
00:34:36
racing around seed round series a never
00:34:39
got product Market fit now wrap it up
00:34:41
right they're they're shutting down
00:34:42
they're doing the wind down process and
00:34:44
then we're seeing
00:34:46
lists of very talented people and I've
00:34:48
talked about this before on the show The
00:34:49
consolidation of talent behind the
00:34:51
winning ideas the the the experiments
00:34:54
that actually worked products that got
00:34:55
some traction are now having an easier
00:34:57
time hiring talent and so to Bill's
00:35:00
point he's got a lot more experience in
00:35:02
this than the four of us put together is
00:35:04
absolutely right when you build in this
00:35:05
down Market yeah it's harder to raise
00:35:07
money of course but Talent is what makes
00:35:10
great products and products that Delight
00:35:13
customers get the flywheel going and if
00:35:15
you survive through this and you have
00:35:17
that Talent you're not going to face 20
00:35:20
copycats and there's not 50 new products
00:35:23
coming out a day people have more time
00:35:25
to actually engage and try a product
00:35:27
which they've been burnt out on and the
00:35:30
peanut butter spreading you know we have
00:35:31
this thin layer of peanut butter Talent
00:35:33
now it's getting Consolidated in the
00:35:35
winter so absolutely a great time for
00:35:38
five CEOs with and Founders or you know
00:35:40
10 Founders across five companies to
00:35:42
consolidate down to two do those tuck-in
00:35:44
Acquisitions and get focused and build
00:35:47
really good teams and cut the weakest
00:35:48
people on the teams there's a lot of
00:35:49
weak talent that have been overpaid and
00:35:52
aren't actually contributing to these
00:35:53
teams and they need to get cut and then
00:35:55
you pull in the All-Stars it's a
00:35:56
fantastic time he's 100 right
00:35:58
all of the if you look back in history
00:36:00
since 2000 all of the best performing
00:36:03
funds of all times were the ones that
00:36:04
were formed right in the middle of the
00:36:06
downturns
00:36:07
030809 these are the vintages that have
00:36:09
always been the best and what that means
00:36:11
it's a proxy for investing which is it's
00:36:13
the hardest time right now it's when you
00:36:15
have the shakiest hand when you're
00:36:17
writing the check but it'll probably be
00:36:20
where all of the real money is made or
00:36:22
the real generational wealth both for
00:36:24
the entrepreneurs who have the courage
00:36:26
to start and the investors who have the
00:36:28
courage to invest
00:36:30
there was a story that I heard in New
00:36:32
York
00:36:33
I was talking to a really well-known
00:36:35
hedge fund
00:36:36
or family office
00:36:38
and they were talking about how they
00:36:40
were meeting with a CEO of a fintech
00:36:43
unicorn very well known fintech unicorn
00:36:46
and they said they left the meeting and
00:36:47
they said this person had an
00:36:50
unbelievable disrespect for money
00:36:53
and it was the most arrogant interaction
00:36:55
that they had ever heard and they said
00:36:57
under no circumstances would we invest
00:36:58
in this guy in this company at any price
00:37:01
and you know lo and behold a year later
00:37:03
that company is now visibly going
00:37:05
through a bunch of hiccups and it just
00:37:08
reminds me that Jason we've always had
00:37:11
two problems when times are good
00:37:14
problem number one is that there's never
00:37:16
been a check and balance on that kind of
00:37:18
behavior a lack of respect for Capital
00:37:20
and uh and a almost a disregard for
00:37:23
business models which is just
00:37:24
inexcusable and I think it's partly the
00:37:27
fault of a very young entrepreneur but
00:37:29
it's also partly the fault of a board
00:37:31
who doesn't know how to direct that
00:37:32
person enablement is real yeah but then
00:37:34
the second the second thing is we've
00:37:36
always had this you know this big Tech
00:37:38
put on the table where every time you
00:37:41
would try to really hone in on running a
00:37:44
lean highly efficient organization
00:37:46
the alternative would be to go work at
00:37:48
you know Google Facebook Apple Amazon
00:37:50
Microsoft where the terms were just
00:37:52
completely
00:37:53
different to what the experience was you
00:37:56
know at a startup and the bigger the Gap
00:37:58
the harder it was for you to be able to
00:38:01
hire and retain good people without just
00:38:02
copying them and now that that's also
00:38:05
coming off the table that is a key
00:38:07
moment so Gurley is a hundred percent
00:38:09
right there is no longer the big Tech
00:38:11
put those are the generals that are
00:38:13
about to get shot over the next eight to
00:38:15
twelve months in my opinion in the
00:38:16
public markets in terms of market cap
00:38:18
and employment and perks and then second
00:38:21
is that these really thoughtful
00:38:23
investors who felt pretty deeply
00:38:26
disrespected will now be able to call
00:38:28
the shots
00:38:29
and these Founders will have to come
00:38:32
back hat in hand and either apologize or
00:38:34
just completely find a different
00:38:35
religion and I think in that you'll have
00:38:37
a lot of amazing opportunities to build
00:38:40
companies I think it's well said tax
00:38:42
what are you seeing
00:38:43
yeah I think that's right I mean look
00:38:44
when times are as frothy as they were a
00:38:46
lot of bad ideas get funded and there's
00:38:48
a lot of bad behavior that occurs I
00:38:51
don't think all of it's intentional some
00:38:52
of it is just the lack of discipline
00:38:54
that when capitalist is so freely
00:38:56
available people are building their
00:38:57
businesses in ways that we're optimizing
00:39:00
solely for one variable which was Top
00:39:02
Line growth they just weren't paying
00:39:04
enough attention to gross margins or
00:39:07
burn and when you then have a downturn
00:39:10
in capital is not so available you have
00:39:12
to build your business in a much more
00:39:13
Capital efficient way and you can't
00:39:15
create fake businesses where you're
00:39:16
buying growth that's not economically
00:39:19
Justified you know where you've got
00:39:21
negative unique economics around the
00:39:22
growth so I think that this downturn is
00:39:26
going to create a ShakeOut it's going to
00:39:28
weed out bad ideas bad practices and and
00:39:33
a lack of support Focus bad boards and
00:39:36
yeah
00:39:40
one-trick ponies you know there's just a
00:39:42
lot of one-trick ponies out there who've
00:39:44
optimized growth but don't have a real
00:39:46
business and it's going to require it's
00:39:49
going to require entrepreneurs to
00:39:51
to play sort of more like multi-variable
00:39:54
calculus or math not just single
00:39:56
variable it is extremely difficult to
00:39:58
convert TDPI to DPI
00:40:01
you know the value of paper values into
00:40:04
actual distributions and that takes a
00:40:06
skilled hand
00:40:08
and I think that a lot of young
00:40:11
folks were hired into Venture that
00:40:13
fundamentally did not know what they
00:40:15
were doing
00:40:16
they've neither ever built a company or
00:40:18
helped build a company or actually
00:40:19
learned how to generate returns but they
00:40:22
became very good at buying you know free
00:40:25
call options on companies you know I
00:40:28
remember like a lot of people the way
00:40:29
that you these young people I remember I
00:40:31
heard a story that you would sell
00:40:32
against Gurley right so let's just say
00:40:34
you were trying to do a deal and Bill
00:40:36
gives you a a term sheet from Benchmark
00:40:38
and you get you know somebody else the
00:40:40
Young Folks are like oh Bill's too
00:40:41
negative and he doesn't get it and they
00:40:43
would try to convince these
00:40:44
entrepreneurs that you know these rainy
00:40:46
days don't happen my experience with
00:40:48
Gurley is he is the most sophisticated
00:40:50
investor of Our Generation
00:40:53
and what I mean by that is you know he
00:40:55
was trained as an equity analyst that
00:40:58
really understood business models and
00:41:01
cost of capital
00:41:03
and so in A Moment Like This the way
00:41:05
that Gurley would help you on a board is
00:41:07
meaningfully more important than how
00:41:08
some you know middling VP at some
00:41:11
Randall startup who's now a you know
00:41:14
a junior partner at a venture firm
00:41:16
because that person has literally no
00:41:17
clue
00:41:19
and so these companies are going to go
00:41:20
through a very difficult moment which
00:41:22
again is the reason why
00:41:24
a good Steady Hand who knows what
00:41:26
they're doing will make a ton of money
00:41:28
in this next cycle and for people who
00:41:30
don't know tvpi let me just give you a
00:41:32
quick definition this is the total value
00:41:33
divided by the paid in capital so total
00:41:36
value is distributions like hey here's
00:41:38
your Robinhood stock here's your Uber
00:41:40
stock here's Cash Plus the net asset
00:41:42
value what's that fancy word for the
00:41:44
value of the uh shares of the companies
00:41:46
that haven't had an exit and so you
00:41:48
divide those two numbers you get a ratio
00:41:50
1.5 1.2 Etc but to schmatt's point net
00:41:54
asset value is debatable in some of
00:41:57
these right and distributions are what
00:41:58
matter you can't you can't eat the uh
00:42:00
the irr you got it you got to eat the
00:42:02
stuff that's been distributed yeah all
00:42:04
right let's keep going I've I'll do one
00:42:06
more I'm going to skip over
00:42:08
well I'll just the the question on
00:42:10
Twitter that got the most votes was
00:42:12
what's the exact net worth of each
00:42:14
bestie uh I would make the case that
00:42:17
that's probably not the best way to
00:42:18
measure oneself and
00:42:21
you know I don't think we're gonna do it
00:42:22
I also would argue that we're probably
00:42:24
all exposed to a lot of Fuzzy Math With
00:42:27
Private assets that we own and in terms
00:42:29
of companies who cares like how does
00:42:31
that correlate with happiness in life it
00:42:33
doesn't right so it doesn't really
00:42:34
stupid question and I don't think it's a
00:42:35
big focus in terms of objectives
00:42:38
I'll say the next uh one that got a lot
00:42:40
of votes which I really like it's a
00:42:42
lagging indicator and a byproduct of
00:42:44
what we do there are moments when what
00:42:46
we do
00:42:49
reflects in value that frankly where we
00:42:51
are over earning and then there are
00:42:53
periods where what we do is under
00:42:54
reflected and we are under earning
00:42:57
and so the through line has to be that
00:43:00
you need to survive in both good times
00:43:01
and bad times which means you got to
00:43:02
like what you're doing
00:43:04
and if you get caught up in a numerical
00:43:06
number there's all kinds of math you can
00:43:07
do to make it look a lot bigger than it
00:43:09
is but it's all meaningless yeah I would
00:43:11
argue you're as long as you're actively
00:43:13
developing yourself over time the
00:43:15
weighing machine will do its job
00:43:17
somebody told me in my 20s
00:43:21
when I was at AOL he said you know if
00:43:24
you're because at the time I you know I
00:43:26
grew up on welfare I thought the goal
00:43:28
was to make money I didn't know any
00:43:30
better I've learned later that there's
00:43:33
a lot more leading indicators of
00:43:34
happiness and things that actually
00:43:36
cashier create happiness why truffles
00:43:39
white truffles um I was gonna say
00:43:41
friendship my family but yeah friendship
00:43:43
and family laughs I Define it as laughs
00:43:45
and friendships you know friendships but
00:43:47
uh but but he said to me you know your
00:43:49
goal should be to
00:43:50
just be in the upper few percent of your
00:43:53
age bracket
00:43:54
and just enjoy what you're doing and he
00:43:56
said let time take care of everything
00:43:58
else because as long as you find
00:43:59
something you're you know you decently
00:44:01
enjoy and are good at you'll just get
00:44:03
better and better at that thing and then
00:44:06
at some point you know you will lose
00:44:08
track of what the you know measurement
00:44:11
of that is because you're just too
00:44:13
caught up in in how much you enjoy doing
00:44:15
the thing
00:44:17
and I thought that he had no idea what
00:44:19
he was talking about and now 25 years
00:44:21
later I can tell you he was totally
00:44:24
right
00:44:25
totally right yeah
00:44:27
by the way this this was a question I
00:44:29
was trying to skip over so no but it led
00:44:32
to a good Fork yeah okay what is
00:44:34
happiness yeah yeah I think after you
00:44:36
know observing outcomes for 25 years in
00:44:39
Tech what I would say is that if you're
00:44:41
a smart hard-working don't have
00:44:44
behaviors that sabotage yourself and you
00:44:46
know take intelligent risks you will be
00:44:48
successful in this business I mean
00:44:50
technology is such a wind at your backs
00:44:52
it's such an engine of wealth creation
00:44:54
how can you not do well but the exact
00:44:57
magnitude of how well you do I think is
00:44:59
ultimately it is substantially affected
00:45:01
by timing and you know like if you were
00:45:04
employee whatever number X at Google
00:45:08
you're going to do better than most
00:45:09
Founders even of the Unicorn company and
00:45:11
when you found your company and then
00:45:13
when you exit what the market is doing
00:45:15
those things have a huge impact on the
00:45:18
ACT on the magnitude so you know whether
00:45:21
you end up being you know a billionaire
00:45:23
or a centimillionaire you know a Deca
00:45:25
million or whatever you want those
00:45:27
things are very affected by timing and
00:45:29
chance but not whether you're going to
00:45:31
be successful at a substantial level and
00:45:35
so it just you know be smart be hard
00:45:37
working don't sabotage yourself you know
00:45:40
get into Tech and you will do well
00:45:43
trust the exact amount of how well you
00:45:45
do will be dependent on some
00:45:47
you know stochastic factors but not the
00:45:49
fact that you're going to do well we are
00:45:51
enormous beneficiaries of having been
00:45:53
born when we were because we are a bunch
00:45:57
of late 40 and early 50-somethings that
00:46:00
in the prime of our career in Tech
00:46:04
um the Federal Reserve took rates to
00:46:06
zero
00:46:07
and we had no idea a priori how
00:46:10
important that would be in all of our
00:46:11
outcomes but they were and even more
00:46:14
importantly
00:46:15
PCS Internet and mobile happens all of
00:46:17
that hard work was done beforehand by an
00:46:20
entire court of people that had to fight
00:46:22
much stronger headwinds than we had to
00:46:24
fight so you know David I just want to
00:46:26
build on that like we were
00:46:27
extraordinarily lucky and so
00:46:30
don't get caught up in that because
00:46:32
there's all these factors you don't you
00:46:33
cannot control I'll say one more thing
00:46:35
that I think is the most important
00:46:37
observation I've made in terms of
00:46:41
whatever it is Building Wealth over time
00:46:43
is to make sure you're building equity
00:46:46
uh in yourself if you're in a Services
00:46:49
business and every day and whether
00:46:51
that's serving the clients of the
00:46:53
company you work for or just serving
00:46:55
clients on behalf of yourself and
00:46:57
everything you do is a transaction and
00:46:59
that transaction doesn't build on itself
00:47:01
doesn't compound value in some way then
00:47:04
you're missing out on an opportunity
00:47:06
every year that goes by that you're
00:47:08
earning income where you're not building
00:47:09
Equity uh is is a non-compounding year
00:47:13
and it's compounding Equity value that I
00:47:16
think ultimately pays off for you as an
00:47:18
individual and I can give a lot of
00:47:20
examples of this but if you're in a
00:47:22
let's say a brokerage business
00:47:24
and you just do deals and you might make
00:47:27
have a good year you might have a bad
00:47:28
year the real question you need to ask
00:47:30
yourself is what is compounding are you
00:47:32
growing a client base are you growing
00:47:34
your skill set are you next year able to
00:47:37
do more things or have more options than
00:47:39
you had this year and if the number of
00:47:41
options you have is declining or static
00:47:43
every year then you're limiting your
00:47:44
Equity value and that ultimately will
00:47:46
translate into limited wealth creation
00:47:47
can I chime in on that point around
00:47:49
Equity so yeah when I discovered what
00:47:52
Equity was this was when I was in law
00:47:53
school and actually the guy who
00:47:54
explained to me was Antonio gracias
00:47:57
a light bulb really went off for me
00:47:58
because my dad is a doctor and I was on
00:48:02
a path to becoming a lawyer and in both
00:48:04
those cases you're a professional the
00:48:05
way you get paid is you more or less
00:48:08
charge an hourly rate and so the amount
00:48:11
of money you can make is capped right
00:48:13
just take the number of hours in the day
00:48:14
and in the week multiple apply it by
00:48:16
your rate and that's the most money you
00:48:18
can make in a year and the difference
00:48:21
between that and Equity is with Equity
00:48:23
you own a piece of a business and that
00:48:27
business could be ultimately worth you
00:48:30
know any amount and so your Equity could
00:48:32
therefore be worth virtually any amount
00:48:34
and so you're uncapped and so just you
00:48:37
know if you want to have outside success
00:48:39
you have to have equity in something I
00:48:42
think that is exactly right if you're
00:48:44
just basically working for wages you
00:48:48
even if you are the best at what you do
00:48:50
and you get paid an insane hourly rate
00:48:52
you again you can be successful but
00:48:54
you're not going to be uncapped
00:48:56
and so that is the beauty that's the
00:48:58
beauty of Silicon Valley is all these
00:49:00
companies offer Equity to everybody and
00:49:02
it's not just shares in something you
00:49:04
can actually get equity and create
00:49:05
leverage in your life in this era more
00:49:08
than any human has ever had in any era
00:49:10
prior because of software and Computing
00:49:14
and automation you can create a website
00:49:16
that prints cash for you every day if
00:49:18
you wanted to you can create a service
00:49:20
that you get leverage out of and there's
00:49:21
Equity value in that and I think that's
00:49:24
really key because then you can go build
00:49:25
another one another one and you're
00:49:26
building value over time
00:49:28
and that's just the most simplistic
00:49:30
example of how technology today provides
00:49:33
leverage that can really allow anyone to
00:49:35
pursue a path of equity and and I think
00:49:37
you make a good point about what what
00:49:39
are you getting leverage off of
00:49:41
yeah so there's there's a bunch of
00:49:42
different things
00:49:45
so the old way was leverage off labor
00:49:48
and I guess if you were to own like a
00:49:49
consulting firm or like some sort of
00:49:52
factory then the more people you have
00:49:54
working the more money you'd make the
00:49:57
other way would be like you can get
00:49:58
leverage off Capital like a fund manager
00:50:01
or you can get leverage off of
00:50:03
Technology because software can
00:50:04
basically create these super scaled
00:50:06
outcomes so you need to figure out like
00:50:07
what is it you're getting leverage off
00:50:08
of yeah I'll go so I'll do the last one
00:50:11
which I thought was a really good
00:50:12
question and I got a lot of votes from
00:50:15
Marcos Ortiz if you had to start from
00:50:18
scratch no money no connections only the
00:50:20
knowledge you have right now and 100
00:50:22
bucks what would you build in 2022
00:50:26
I would build something in energy
00:50:28
transition or in life sciences with a
00:50:31
hundred dollars
00:50:33
yeah I would build a startup incubator
00:50:37
Venture fund of some type
00:50:40
a way to fund entrepreneurs and just be
00:50:43
a capital allocator much earlier in my
00:50:45
career
00:50:46
I would create a B2B software company
00:50:49
that
00:50:51
actually I'm already creating it so I
00:50:53
haven't unveiled it yet but there's
00:50:54
something I'm incubating right now let's
00:50:56
go David go whoa where's the bad week
00:50:58
wait whoa whoa wait what your beak what
00:51:01
is going on here I haven't gotten the
00:51:03
subscription
00:51:04
I've not raised money yet my
00:51:08
subscription documents sir you can think
00:51:10
of this idea as Yammer 2.0 so Jake how
00:51:12
you're not in because you criticize the
00:51:13
Amber but it was a joke I gave of you
00:51:16
though I let you win TechCrunch fifth
00:51:17
yeah I put the [ __ ] fixing for you
00:51:19
David just to put my pitch in I ran
00:51:22
Eamon icq helped Facebook was an
00:51:24
investor in Yammer was the for series a
00:51:26
investor in slack so I'm ready for you
00:51:28
yeah I'm right here you were there for
00:51:30
us when we needed you back at Yammer
00:51:32
days unlike J Cal what are you talking
00:51:34
about your
00:51:35
meme
00:51:42
let me in let me leave it
00:51:45
one million
00:51:47
round round
00:51:50
thank you did you just agree on TV yes
00:51:54
well assuming hold on there's one thing
00:51:55
you have to do which is you've got to
00:51:57
rip out slack and use this instead yes
00:51:59
100 100 I will do that just so you know
00:52:02
Community well I'm gonna be very honest
00:52:03
with you the day I left Facebook I
00:52:06
stopped using it the day we sold we
00:52:09
distributed slack stopped using it so
00:52:10
don't worry about me I am right I am 100
00:52:13
alive with you I'm all in I'm all in
00:52:15
absolutely all right let's do the show
00:52:16
let's do the show
00:52:18
Freebird you didn't answer that question
00:52:19
what would you do well actually I would
00:52:21
get some water vaporizers and then I
00:52:24
would get some molecule and I would make
00:52:26
a new super protein that was made out of
00:52:29
good sorry let's keep going I like it I
00:52:32
think it would be something with the
00:52:33
protein slurry you'd make some kind of
00:52:35
steak that takes better mistakes
00:52:38
it's some type of protein I would
00:52:40
definitely build a business again I
00:52:41
think the
00:52:43
you know the challenge is uh
00:52:45
As you move past that stage in your
00:52:48
career where you know you have the
00:52:50
willingness and the time to be a hundred
00:52:52
and twenty percent
00:52:53
building one product every day
00:52:56
uh it's it's really hard to go back to
00:52:58
that and I think if I was in a position
00:53:00
again where I had no money and had no
00:53:03
I think that's the key part of the
00:53:05
question not the hundred dollar part
00:53:06
yeah I think I would go back to building
00:53:08
something I do think the intersection of
00:53:11
Life Sciences with software creates this
00:53:13
era of opportunity
00:53:15
it would probably be something in the
00:53:17
realm of AIML meets Life Sciences where
00:53:21
you can actually work in a leveraged way
00:53:23
with software to drive outcomes in these
00:53:25
important markets so I would actually
00:53:27
create right
00:53:30
yeah we could have started something
00:53:33
yeah maybe we can still oh
00:53:35
okay the co-founders sax will let you in
00:53:39
the pre-round if you let us in your
00:53:40
pre-round okay sounds good okay all
00:53:43
right Kelly you want to take us forward
00:53:44
should we go forward okay let's see
00:53:46
what's on the docket
00:53:48
we've got Russia's
00:53:51
invasion of Ukraine you had Biden last
00:53:55
week saying we're facing the risk of
00:53:56
Armageddon how is that not the top story
00:53:58
go taxi poop go take it all right here
00:54:01
we go let me just queue it up for uh sax
00:54:03
fine last week so we're facing risk
00:54:04
Armageddon that's your tia okay we go
00:54:07
and then Leon Panetta just let's teed up
00:54:10
Jayco we don't need everyone knows
00:54:11
what's going on
00:54:12
Leon Panetta just who was the former
00:54:15
Secretary of Defense and director of
00:54:17
Central Intelligence wrote an op-ed for
00:54:19
Politico saying that intelligence
00:54:22
analysts have now
00:54:24
raised the probability of a use of a
00:54:27
technical nuclear weapon in Ukraine from
00:54:29
one to five percent at the beginning of
00:54:31
the war to 20 to 25 percent now is what
00:54:34
he says
00:54:35
so and I don't think he'd be saying that
00:54:37
if this wasn't pretty much conventional
00:54:40
wisdom in Washington now I mean Panetta
00:54:42
is sort of an uh very respectable figure
00:54:45
in in the Beltway so you might have said
00:54:47
it right for the first time said that
00:54:49
we're facing the most dangerous
00:54:50
situation and the highest risk of
00:54:53
nuclear war since the Cuban Missile
00:54:54
Crisis he called the risk of Armageddon
00:54:57
the problem is that nobody is willing to
00:55:01
say what we should be doing differently
00:55:03
to avoid this situation so you know
00:55:06
people are always attacking us or having
00:55:07
a point of view on foreign policy first
00:55:09
of all this affects us I don't know why
00:55:10
we're not allowed to have a point of
00:55:12
view but you know in in our business
00:55:14
thinking where there is an existential
00:55:15
issue you have the attitude of drop
00:55:18
everything and figure this out if
00:55:20
somebody told you that there's a 25
00:55:21
chance of your company blowing up maybe
00:55:25
in the next few weeks you would drop
00:55:26
everything and focus on that problem but
00:55:29
it's like you know after the Armageddon
00:55:30
comments it's like the media just passed
00:55:33
over it it's like oh this is like crazy
00:55:35
Biden or whatever it was minimized it
00:55:37
was textualized the White House walked
00:55:39
it back nobody's really focusing on this
00:55:42
and what we should be doing differently
00:55:43
and in fact what Panetta recommends and
00:55:45
Petraeus said the same thing is that if
00:55:48
Russia uses attack nuke in Ukraine then
00:55:51
we should respond by attacking Russia
00:55:53
directly
00:55:54
now if we do that we are literally in
00:55:57
World War III and remember at the
00:55:58
beginning of the war Biden was really
00:56:00
clear that we weren't going to get
00:56:01
directly involved he vetoed the idea
00:56:04
correctly of of the no-fly zone which
00:56:06
would have required us to shoot down
00:56:08
Russian planes Biden remember he was
00:56:10
asked in the press conference at the
00:56:11
beginning of the war by Lester Holt he
00:56:12
said Holt said you know Mr President
00:56:14
what if Americans are trapped Behind
00:56:16
Enemy Lines in Ukraine would you send in
00:56:19
American troops to go get them buy and
00:56:20
said no I think very properly said no
00:56:23
because he said listen we do not want to
00:56:25
risk War III but now because of mission
00:56:28
creep and the slippery slope and we've
00:56:30
all gotten more involved in this war
00:56:32
we've gotten more emotionally committed
00:56:33
you now have Panetta and Petraeus
00:56:36
calling for us to directly attack Russia
00:56:37
and get in World War III the Russians
00:56:40
almost certainly would respond with
00:56:42
nuclear because that's all they've got
00:56:44
they don't have the conventional forces
00:56:46
to stand up to us so look at how close
00:56:48
we have now gotten to the brink of a
00:56:51
nuclear Showdown and has anybody
00:56:53
reassessed is any anyone calling for us
00:56:55
to reevaluate because that's the
00:56:57
conversation we should be having right
00:56:58
now and free break this brings up two
00:57:00
points that I think you you can comment
00:57:03
on Naval uh actually
00:57:05
the founder of angelist angel investor
00:57:08
and uh just public thinker I would say
00:57:10
public intellectual
00:57:11
he came on to call him with the two of
00:57:13
you and he you know outlined like who
00:57:16
does get to have an opinion on Ukraine
00:57:18
and other issues which has dovetail with
00:57:21
this like who gets to be an expert in
00:57:24
the world today and of course at the
00:57:26
same time not only Sachs has been
00:57:28
commenting on hey what's the off ramp
00:57:29
here Elon has been talking about hey you
00:57:32
know how do we get out of this do we
00:57:33
have some votes uh you know by these uh
00:57:36
regions that have been annexed or that
00:57:39
are in dispute
00:57:40
AOC now is getting criticized under for
00:57:42
people shouting her down at a public
00:57:44
event today or yesterday that she's a
00:57:47
war monger and she won't speak out
00:57:48
against War how do you frame the public
00:57:51
dialogue about this Freeburg and then do
00:57:53
you see a potential off-ramp here other
00:57:55
than Putin leaves Russia which is I
00:57:58
think the public stance uh by a lot of
00:58:00
folks you know Putin can end this he
00:58:02
just has to leave Ukraine in order for
00:58:04
this to end so two questions there for
00:58:06
you free bird it's very hard
00:58:09
to have good dialogue about any
00:58:13
situation
00:58:15
where an argument could be made on the
00:58:18
grounds of morality
00:58:19
in an absolute sense
00:58:22
making it really difficult to have a
00:58:24
discourse
00:58:25
around what the right thing to do is
00:58:27
because you don't agree fundamentally on
00:58:29
the objective you're shooting for one
00:58:32
side says the objective is to preserve
00:58:35
the Integrity of democracy and the
00:58:39
freedom of people
00:58:40
and the other side says the objective
00:58:43
should be to secure the interests of the
00:58:46
West and the United States and preserve
00:58:48
the world from nuclear Holocaust
00:58:51
I think that's what makes this a
00:58:52
challenging conversation
00:58:54
the objective can be reframed and then
00:58:58
from that objective each side can make
00:59:01
their own case without being forced to
00:59:03
take in the point of view of the other
00:59:05
side and it's why we're at a bit of a
00:59:08
standstill and it's also why it's so
00:59:10
easy to get swept up in a mass point of
00:59:14
view a coalesce point of view of the
00:59:16
masses
00:59:17
that makes one feel good about what may
00:59:20
end up being a very bad situation
00:59:22
it feels good to say I'm doing this for
00:59:25
freedom of the people I'm doing this to
00:59:27
save lives and the end of the day it may
00:59:30
cause a nuclear war
00:59:32
and it's okay because I feel good going
00:59:35
into this debate that this is the right
00:59:37
thing it's the morally Superior thing to
00:59:40
do
00:59:41
what's very hard is that we can't
00:59:43
actually say
00:59:45
as a group our objective should be to
00:59:48
preserve the Integrity of democracies
00:59:50
around the world to an extent and that's
00:59:52
a nuanced point of view
00:59:54
to an extent means I'm willing to
00:59:56
preserve the democracies through certain
00:59:58
actions but I'm not willing to cross a
01:00:01
certain line and absolutism doesn't need
01:00:04
to come into play
01:00:06
that's what I think is making this such
01:00:07
a very difficult conversation and it's
01:00:10
why it's so hard to actually have a
01:00:11
conversation around it and it's really I
01:00:14
would argue the most poignant and the
01:00:17
most dramatic moment in what we talked
01:00:19
about earlier which is this deep-seated
01:00:22
kind of you know bipolarity and once
01:00:24
you're sitting on your pole you don't
01:00:26
want to come off and you don't realize
01:00:27
that so much of the dialogue is in this
01:00:28
middle
01:00:29
and we have to come to some point of
01:00:31
view that maybe this isn't about an
01:00:32
absolute outcome it's not absolutely
01:00:34
going to be nuclear war and it's not
01:00:36
absolutely going to be the end of
01:00:37
democracy there's some conversation in
01:00:40
the middle that's very difficult to have
01:00:42
and people that work
01:00:44
somewhere in the world hopefully
01:00:47
ambassadors foreign policy people State
01:00:49
Department people hopefully are having
01:00:52
the more nuanced critical conversation
01:00:53
about how do we resolve to the maximal
01:00:56
outcome that doesn't necessarily take us
01:00:58
to an absolute end to that point it's
01:01:01
going to be an imperfect outcome here I
01:01:03
think this is much much simpler than all
01:01:05
of this
01:01:06
Leon Panetta is a senior counselor to
01:01:10
this defense Contracting agency called
01:01:12
Beacon Global strategies who works on
01:01:13
behalf of Raytheon I found that out
01:01:15
while Friedberg was talking in a
01:01:18
two-second Google search
01:01:20
I suspect that if you looked for
01:01:21
petraeus's conflicts of interest you
01:01:23
would find that through some Byzantine
01:01:25
set of you know strategic Consulting
01:01:28
organizations and whatnot he also works
01:01:30
on behalf of the defense industry so you
01:01:33
have these people who will generate more
01:01:35
revenue and more profit if there is a
01:01:38
massive war and those people have been
01:01:41
trying to push us into a land war in
01:01:45
Europe since this whole thing started
01:01:47
and so this is just yet another attempt
01:01:50
it's just the most final way of doing it
01:01:51
so I would just encourage people
01:01:53
whenever you see all these folks
01:01:55
clamoring for war
01:01:58
um it's just to keep in mind that they
01:02:00
are riddled with conflict and that you
01:02:02
can find it out again this information
01:02:04
is sitting in plain sight on the
01:02:05
internet and you can figure out whether
01:02:07
this person is is really advocating a
01:02:09
truth that makes sense
01:02:11
or they're getting paid to shill
01:02:14
um a revenue generating mechanism for
01:02:16
some part of the military industrial sex
01:02:17
how much of this is people talking their
01:02:19
book their book being the military
01:02:20
industrial complex in your mind
01:02:22
I think it's a big part of it I think
01:02:24
all these Washington think tanks are
01:02:25
funded by defense contractors I think
01:02:28
it's short-sighted obviously because if
01:02:30
it leads to a nuclear war there's nobody
01:02:32
with the defense industry there won't be
01:02:33
anything left so but look I think that I
01:02:36
think that Washington is wired for war
01:02:39
in part because there's a huge Lobby for
01:02:43
it for all these defense contractors and
01:02:45
what's the lobby for peace I mean
01:02:46
there's no one really arguing for peace
01:02:48
speaking of this Elon oh I I'll tell you
01:02:51
what I'll tell you what's lobbying for
01:02:52
peace
01:02:53
and I'm going to connect what may seem
01:02:55
two disparate ideas together but the
01:02:58
single biggest thing I think that will
01:02:59
prevent nuclear war
01:03:01
is the inflation that we're feeling
01:03:04
and the reason is because it allows the
01:03:06
FED in my opinion for the first time
01:03:07
really in the last 15 years to act
01:03:10
properly and if they hold the line and
01:03:14
they take interest rates to four or five
01:03:16
percent
01:03:17
I think one non-obvious outcome of all
01:03:19
of that is it becomes extremely
01:03:22
expensive next to Impossible
01:03:25
to finance military adventurism abroad
01:03:28
and that's a practical economic outcrop
01:03:31
of really you know meaningfully High
01:03:33
rates greater than zero
01:03:35
and so I actually think the reality is
01:03:37
that for a lot of these governments
01:03:40
the more that inflation sticks around
01:03:42
the stickier it is the higher rates are
01:03:45
in general the bigger the problems at
01:03:47
home are and the less prone they're
01:03:49
going to be likely I actually think that
01:03:51
explains that explains the escalation of
01:03:54
this rhetoric because people want to try
01:03:56
to make this issue and put it on the
01:03:58
table but you understand that you know
01:03:59
these folks don't say it's a 90
01:04:01
likelihood they go from one percent to
01:04:03
25 which if you understand probabilities
01:04:06
is effectively a left tail risk that's
01:04:08
effectively the same and the reason
01:04:10
they're trying to do it is they're
01:04:12
trying to get it back David as you say
01:04:13
to time stamp it to get it in front of
01:04:15
people's perspectives to make it
01:04:17
important in a moment where everybody
01:04:20
increasingly not just in the United
01:04:22
States but in the UK in Europe are
01:04:24
looking internally and trying to figure
01:04:27
out how to keep their economies in a
01:04:29
reasonably functioning way and how to
01:04:31
make sure that their financial and other
01:04:32
infrastructure keeps working so you're
01:04:34
saying and that is not necessarily a
01:04:36
priority when rates are zero but when
01:04:38
rates are four percent I mean just by
01:04:40
the way if you guys saw what happened
01:04:41
today it was the competing of two
01:04:43
narratives this week there was a
01:04:45
financial Narrative of the UK having to
01:04:49
bail out their pension system right of
01:04:51
all of a sudden the pensions being
01:04:53
forced sellers of those four sellers now
01:04:56
you know uh spilling into the United
01:04:58
States debt markets around Clo's and
01:05:01
collateralized Loan obligations and junk
01:05:03
debt which then could theoretically
01:05:05
spill as a contagion into other parts of
01:05:07
the market that was narrative one
01:05:09
and and all of that by the way is a
01:05:11
result of hiding inflation and the you
01:05:13
know fed moving up rates and you know
01:05:15
other countries being forced to to
01:05:17
attack inflation with higher rates and
01:05:19
creating all these dislocations
01:05:21
narrative one versus narrative two which
01:05:23
is hey all of a sudden we have to put
01:05:25
the nuclear risk on the table and if you
01:05:28
actually saw the print that was spilled
01:05:30
the disproportionate amount of the
01:05:32
rhetoric actually focused on the former
01:05:34
narrative and not the latter and so I
01:05:37
think that that's why the these folks
01:05:40
are escalating the rhetoric in order to
01:05:43
kind of create an equality so that they
01:05:46
get enough print they want that version
01:05:48
of the outcome what you're saying is you
01:05:50
have the world saying we can't afford to
01:05:53
have this conflict we are broke well not
01:05:56
too many chaotic issues the world is
01:05:58
saying we are increasingly under
01:06:00
enormous domestic pressure
01:06:02
and as a result we cannot spend on
01:06:05
things abroad we can't afford this and
01:06:08
then on the other side saying well we
01:06:09
need you to afford this so nuclear is
01:06:11
going to happen there's going to be a
01:06:12
nuclear and there's a small attention
01:06:15
there's a small strain of folks who
01:06:17
would economically benefit yeah who are
01:06:19
now ratcheting up their rhetoric so that
01:06:21
that second path is more and more on the
01:06:23
table what do you think of this freeberg
01:06:24
this analysis that shamoth has these two
01:06:27
polar these two uh groups
01:06:31
vying for the attention and or budget of
01:06:34
the world
01:06:36
the the military-industrial complex
01:06:39
versus yeah uh citizens saying our
01:06:42
country can't afford this we need to
01:06:43
focus inward not citizens the central
01:06:45
banks
01:06:46
but I think the central banks influenced
01:06:48
by citizens right like there's a whole
01:06:49
system here we're talking about people
01:06:51
are
01:06:52
you know watching their questions away
01:06:54
they're watching jobs get cut if I was a
01:06:57
betting man I spent that I I would guess
01:06:59
that the next half a trillion to a
01:07:00
trillion dollars that is spent in
01:07:02
Western world economies
01:07:04
will be to subsidize something that's
01:07:07
broken internally inside of one of our
01:07:09
countries whether it's the UK pension
01:07:11
system or whether it's the high-yield
01:07:14
credit markets and it will not be the
01:07:15
finance
01:07:17
military adventurism in Russia people
01:07:19
um
01:07:20
so there's an article today in the
01:07:22
Washington post about how the U.S
01:07:24
government's Debt Service is going to be
01:07:26
around 570 billion this year which is a
01:07:28
45 increase Biden's budget for 2023 is
01:07:32
only 1.6 trillion so you're talking
01:07:34
about something like over a third now of
01:07:37
the official budget is already going to
01:07:39
Debt Service because it's not variable
01:07:41
right it's a variable right exactly
01:07:42
because so much of it is is
01:07:44
um it's not locked in long-term rates so
01:07:46
because interest rates have gone up so
01:07:48
much The Debt Service gone up and
01:07:49
interest rates are still going up and so
01:07:52
you know druckmiller had those points
01:07:54
around how the debt services within a
01:07:56
decade is going to eat up practically
01:07:58
the whole federal budget so trimath is
01:08:00
right that we've never really had to
01:08:01
choose between guns and butter before in
01:08:03
the past it was just let's just do both
01:08:05
and we'll rack up more national debt I
01:08:08
do think there will be more and more
01:08:10
pressure to question this type of
01:08:12
spending and why we've already given
01:08:14
Ukraine 80 billion dollars in handouts
01:08:17
when we can't afford to basically pay
01:08:20
for you know major entitlements at home
01:08:23
so I think there'll be more pressure now
01:08:25
I think I don't know if that pressure is
01:08:27
going to come in time though to
01:08:28
de-escalate this Ukraine it's more it's
01:08:30
not and that's what concerns me and just
01:08:32
to just to cut to the chase on this I
01:08:34
think where the rubber meets the road on
01:08:36
Ukraine is Crimea it's and why because
01:08:40
the Russians have a major Naval Base
01:08:42
there at sevastopol it's the home of the
01:08:44
Black Sea Fleet and they will never give
01:08:47
that up they are willing to use nukes I
01:08:50
believe to basically protect that asset
01:08:52
it's a vital interest of theirs hold on
01:08:54
80 of the population of Crimea they're
01:08:57
Russian and three quarters of them
01:08:59
according to polling that was done by
01:09:01
Gallup and by a German polling firm so
01:09:03
not Russian polls indicated that they
01:09:05
see themselves as Russian and only part
01:09:07
of Russia so if we supported
01:09:08
self-determination we'd be fine with
01:09:10
Crimea being part of Russia but here's
01:09:12
the rub Ukrainian nationalism demands
01:09:14
that every square inch of Crimea goes
01:09:16
back to Ukraine and it is State
01:09:18
Department policy right now that we will
01:09:21
never recognize Crimea as being Russian
01:09:23
will never recognize the annexation
01:09:25
which happened back in 2014. so
01:09:27
something's got to give here something's
01:09:29
got to give either we have to sit down
01:09:32
zielinski and say to him listen you're
01:09:34
not getting back from me yet we're going
01:09:36
to make that part of a peace deal or we
01:09:38
are going to back the ukrainians in
01:09:40
their military effort to retake Crimea
01:09:42
with the result that I think is quite
01:09:44
likely that the Russians will be willing
01:09:46
to use a tactical nuke to prevent their
01:09:49
total defeat so at some point we're
01:09:51
gonna have to choose here which of these
01:09:52
outcomes do you want do you want to
01:09:54
basically go for a negotiated settlement
01:09:55
which means telling the ukrainians they
01:09:57
cannot have everything they want or do
01:09:59
you really want to risk a nuclear war to
01:10:02
take back Crimea which is Russian and
01:10:04
the people there see themselves as
01:10:06
Russian so we need to make a choice here
01:10:08
yeah so Elon put out a tweet for and got
01:10:11
Savage for it and he outlined sort of
01:10:14
what you're saying here
01:10:15
so do you think his plan he said redo
01:10:18
elections of annex regions under U.N
01:10:20
supervision Russia leaves if that is the
01:10:23
will of the people and then he says
01:10:24
Crimea formerly part of Russia as it's
01:10:26
been since 1783 water supply to Crimea
01:10:29
assured as you're saying Ukraine remains
01:10:30
neutral should the West Force Ukraine to
01:10:34
accept these type of terms essentially
01:10:36
elections and I don't know why Crimea
01:10:38
wouldn't be part of that election
01:10:39
process do you think U.N supervised
01:10:42
elections in those regions should occur
01:10:45
and we should force Solinski to do that
01:10:47
so he who pays the pipe or calls the
01:10:50
tune of course we need to have a point
01:10:51
of view on how this war should be
01:10:53
resolved should we force him to do that
01:10:55
listen it's not about Force they can
01:10:58
fight on and do whatever they want as
01:10:59
long as they want hold on with our
01:11:01
support
01:11:02
American weapons so you think he should
01:11:04
do that weapons if he doesn't if
01:11:08
zielinski wants our weapons and support
01:11:10
which appear to be infinite we should
01:11:12
not give him a blank check guarantee the
01:11:14
blank check is how is what started World
01:11:16
War One the German Kaiser gave Austria a
01:11:19
blank check guarantee and it led to
01:11:20
World War one that is how great Powers
01:11:22
get pulled into the wars of minor powers
01:11:24
and we absolutely have to have a point
01:11:27
of view on how we do not get pulled into
01:11:29
this and I think our one of our lines
01:11:32
should be that we are not going to fund
01:11:34
the ukrainians in retaking Crimea got it
01:11:37
so just to put a to clear this so we can
01:11:39
move on to the next topic you're in
01:11:41
support of removing or not giving
01:11:44
further weapon support to the Ukraine
01:11:46
unless they negotiate this it's not
01:11:49
going to come to that we need to have a
01:11:50
point of view on how you are in support
01:11:51
of stopping our support if they don't
01:11:54
sit down and negotiate a settlement here
01:11:56
that's what you would do America needs
01:11:58
to have a point of view of what is in
01:12:00
its own interests what is in our
01:12:01
interest is for this to get resolved
01:12:03
diplomatically at some point through a
01:12:05
negotiated settlement not for it to
01:12:07
escalate into a nuclear war that we
01:12:08
could get pulled into the only way
01:12:10
that's going to happen Okay is if Crimea
01:12:13
goes back to Russia I'm telling you they
01:12:15
will be willing to pull out all the
01:12:16
stops they could even use Tech nukes
01:12:19
before Crimea but can you answer the
01:12:21
question though that I asked three times
01:12:22
would you remove American support and
01:12:24
weapons if they don't accept that if
01:12:26
Ukraine doesn't accept that would you be
01:12:27
comfortable taking away our support in
01:12:28
wealth I don't think it's going to come
01:12:29
to that but yes we should be willing to
01:12:31
threaten that okay that's it I'm just
01:12:32
trying to get you to answer that one
01:12:33
question hold on a second they are a
01:12:36
client state of the U.S they do not call
01:12:38
the shots we're America we call the
01:12:40
shots we're the big dog here all right
01:12:41
that's the bottom line and you really
01:12:43
want to get pulled into a nuclear war
01:12:44
but I do not I just wanted you to answer
01:12:46
that one question
01:12:47
if they don't let's get real okay it's
01:12:50
not about our future you know we're our
01:12:52
American nationalist at least I am I'm
01:12:54
not a Ukrainian nationalist I support
01:12:55
self-rule I think we accomplished
01:12:57
something by preventing Kiev from
01:12:58
getting toppled but I want to support
01:13:01
self-rule for the people of Korea it's
01:13:03
time for a settlement in Saxon I think
01:13:05
the most important thing that we can all
01:13:07
be thankful for which I think will
01:13:09
prevent a lot of wars in the next 10 or
01:13:12
20 years is inflation and non-zero
01:13:14
interest rates it's just going to be
01:13:16
really tough like you know the UK cannot
01:13:19
do anything right now other than make
01:13:21
sure that they have foreign currency
01:13:22
reserves to back up the pound which they
01:13:25
don't really have that much they're
01:13:27
going to need money to bail out their
01:13:28
pension system whoever thought it was a
01:13:30
good idea to allow pensions to run
01:13:32
levered risk was it's obviously insane
01:13:35
could you imagine if it turned out that
01:13:37
the teacher's pensions and the
01:13:38
firefighters pensions in America were
01:13:40
running levered long I mean
01:13:43
this has to get resolved now I mean it's
01:13:45
just another Breaking Point yeah it's
01:13:47
clear you know what a pension is I know
01:13:49
yeah it's just no no I'm saying it I I'm
01:13:53
saying don't use some fancy intellectual
01:13:55
argument I'm saying practically speaking
01:13:57
the treasurer is not allowed to call
01:13:58
Goldman Sachs and say I'm going to run
01:14:00
two turns of Leverage on this money that
01:14:02
is not allowed to happen in the United
01:14:03
States okay I get in some fancy way it
01:14:05
could be thought of as levered long with
01:14:07
you know all kinds of indirection but
01:14:09
that is not how the world works today
01:14:10
practically speaking it is how the UK
01:14:12
Works a treasure in a UK pension system
01:14:15
is allowed to call a an investment bank
01:14:18
and actually run levered that is insane
01:14:22
okay so my point is when rates are
01:14:25
non-zero all of that Jig Is Up
01:14:28
governments are forced to batten down
01:14:30
the hatches and you know husband cash
01:14:34
for God knows what will break in the
01:14:36
system
01:14:37
and I think that that is and and as
01:14:39
disruptive as that is it may actually be
01:14:42
the bulwark against War
01:14:45
The Jig Is up folks uh I mean I think
01:14:48
that's what we should take away from
01:14:50
this is we can't afford this and the
01:14:52
United States is funding it we have to
01:14:53
force a settlement here and it will be a
01:14:55
profile it may be the silver lining of
01:14:57
inflation okay Andy jassy's uh had an
01:15:00
all hands meeting Amazon is freezing
01:15:01
hiring for corporate roles in its retail
01:15:03
business almost 90 VPS or higher level
01:15:05
execs have left Amazon since 2021
01:15:08
earlier this week there was an all hands
01:15:10
presentation and the slides were leaked
01:15:11
to Business Insider some of them
01:15:14
constraints breed resourcefulness
01:15:16
self-sufficiency and Innovation there
01:15:18
are no extra points for growing
01:15:19
headcount budget size or fixed expense
01:15:21
of slide instructed employees to
01:15:22
accomplish more with less sounds
01:15:25
familiar sounds like something the U.S
01:15:26
needs to do and foreign policy needs to
01:15:28
do Amazon leadership team urged
01:15:30
employees to double down on frugality
01:15:32
chassis also spoke in the meeting just a
01:15:35
couple of quotes and then I'll get your
01:15:36
thoughts chimoff it's on a lot of
01:15:38
people's minds and of course none of us
01:15:40
know for sure what's going to happen but
01:15:42
there are a lot of signs that point to
01:15:43
this being a difficult and rough economy
01:15:45
ahead of us and I don't know how long
01:15:46
that'll last
01:15:47
but I think it's one of the things that
01:15:49
we are thinking about and we've decided
01:15:51
that
01:15:52
we're going to be more streamlined in
01:15:54
how we expand in 2023 good companies
01:15:56
that last a long period of time who are
01:15:58
thinking about the long term always have
01:16:00
this push and pull trimath what do you
01:16:03
read into this
01:16:04
I'll say uh three quick things one is
01:16:06
that today
01:16:08
Thursday October 13th we had
01:16:11
an inflation print which was worse than
01:16:13
expected and the markets are materially
01:16:15
higher right so you know strange why
01:16:17
well I you know we talked about this a
01:16:20
few weeks ago but you know my thought
01:16:22
then and same is it's the same that I
01:16:24
think now is that we've effectively seen
01:16:26
the near-term bottom and we're now
01:16:27
consolidating and so every opportunity
01:16:30
people have to justify that most of the
01:16:32
news is behind them they take and they
01:16:34
use that as a reason to buy okay so
01:16:36
that's number one which is that we are
01:16:38
sort of near the end the second however
01:16:41
is that
01:16:43
if we do see another leg down
01:16:46
there is really only one cohort of
01:16:48
company that hasn't been really whacked
01:16:51
and I'll summarize it very quickly by
01:16:52
saying it's Microsoft Amazon Apple and
01:16:55
Google that's it even Facebook has now
01:16:58
been sort of put into the bucket of
01:17:00
everybody else where you know we've been
01:17:02
crushed 60 70 80 in those companies so
01:17:05
so so what does that mean well those
01:17:08
four companies are now being identified
01:17:11
for what they may be which in capitalism
01:17:14
is called over earning okay they are
01:17:18
making more money than we think is
01:17:20
appropriate this letter from Andy jassy
01:17:22
is his way of effectively telling his
01:17:25
major shareholders that he is now moving
01:17:28
the business to become more of a cash
01:17:29
cow business Tim Cook made this
01:17:32
incredible decision in 2016 1718 that
01:17:35
effectively did the same thing that's
01:17:37
when Buffett came in that's when he
01:17:39
established a huge ownership in the
01:17:40
stock that's when the stock absolutely
01:17:42
ripped because it moved into a different
01:17:44
bucket in people's minds it became
01:17:47
growth at a pretty reasonable price and
01:17:49
I think Andy is making the case that
01:17:51
Amazon is going to become one of these
01:17:53
GARP stocks growth at a reasonable price
01:17:55
he's going to generate a ton of cash
01:17:57
flow he's going to keep expenses nominal
01:18:00
he's going to return a ton of cash to
01:18:02
shareholders with BuyBacks that's the
01:18:04
reading in between the lines of that
01:18:07
letter I think it's a really profound
01:18:09
statement
01:18:10
and a very smart move because you
01:18:12
haven't seen that letter or a version of
01:18:15
that letter yet for Microsoft and you
01:18:17
started to see hints of that letter from
01:18:18
Sundar where he said you know it's it's
01:18:21
and he's not he's saber rattling he's
01:18:23
not there yet he's in the appetizer part
01:18:25
you know he's emus Bouche where he's
01:18:27
like oh you know guys you got to work
01:18:29
harder hey guys let's create some fancy
01:18:31
acronyms but sundar's got courage no no
01:18:34
but he's got courage he is going to rip
01:18:35
the Band-Aid off too and so I think what
01:18:38
it means is these three and maybe these
01:18:40
four companies are going to draw a hard
01:18:43
Line in the Sand and say we are not over
01:18:45
earning do not abandon this stock that
01:18:48
again will help
01:18:49
put in the bottom in the stock market
01:18:51
what do you think free Burger you worked
01:18:53
at this company and uh you know the the
01:18:55
the principals across the board the
01:18:58
saber rattling will turn into saber
01:19:00
swinging uh in Q4 q1 you think Google
01:19:04
Apple
01:19:06
Cuts coming Amazon is
01:19:10
affected in a different way because they
01:19:12
operate this physical supply chain
01:19:14
business they're delivering Goods to
01:19:16
people's homes that people are buying so
01:19:17
they're they're uh they really have to
01:19:21
uh change their trajectory very quickly
01:19:23
it was incredible you guys remember when
01:19:25
covet hit you tried to place an order on
01:19:27
Amazon it was like three weeks to
01:19:29
deliver because the infrastructure
01:19:30
wasn't there to do it so they actually
01:19:31
were seeing more orders than their
01:19:34
system had predicted and they did
01:19:36
massive build out they hired what a
01:19:38
million people or something uh in their
01:19:40
network uh to meet demand and then over
01:19:42
the next year uh earnings went through
01:19:44
the roof uh their infrastructure and
01:19:46
employee head count went through the
01:19:48
roof and now we're obviously coming back
01:19:49
down the other side of a mountain and
01:19:51
they're having to shift uh strategy and
01:19:53
and shift their operating model yet
01:19:55
again there's a a broader set and that's
01:19:59
because they're in the direct Commerce
01:20:00
business
01:20:02
Microsoft
01:20:03
Google
01:20:05
and other kind of software companies
01:20:07
some of which benefit from advertising
01:20:09
which is almost like a first derivative
01:20:10
on the consumer Market or a first
01:20:13
derivative on the spending of companies
01:20:15
that sell to Consumers have a little bit
01:20:17
of a different calculus they're a much
01:20:20
higher margin business 30 ebitda kind of
01:20:23
business with ebitda margin business
01:20:25
with a very uh distinct kind of set of
01:20:28
challenges on how advertising revenue is
01:20:30
going to be affected over the next
01:20:32
couple of quarters and balancing that
01:20:34
against their Cloud platform which is
01:20:36
sold to Enterprises and their media
01:20:39
consumption platform which is generally
01:20:41
like YouTube at Google's case which is
01:20:43
less affected so it's not as much of a
01:20:45
direct calculus I will say what's
01:20:46
happened over the past decade which
01:20:48
we're now seeing change is these
01:20:50
companies have had extraordinary growth
01:20:51
uh hiring people to no end there's
01:20:54
always been
01:20:56
you know kind of this extended expense
01:20:59
on Capital on human capital and that
01:21:01
expense on human capital has driven the
01:21:04
average cost per employee through the
01:21:06
roof and it's not just the salaries it's
01:21:08
the cost of the rsus it's the cost of
01:21:10
the facilities and the free ice cream
01:21:12
and the gyms and all the other stuff
01:21:13
that's gone on to compete that's now
01:21:16
changing and so it really is creating a
01:21:18
different model for operating that
01:21:19
hasn't existed for the last decade where
01:21:21
everything has been you know how many
01:21:22
more things can we throw in the kitchen
01:21:24
you know throw like the kitchen sink at
01:21:25
this problem to get all the human
01:21:27
capital here and I think that's really
01:21:29
you know what's what's going to kind of
01:21:31
structurally change in the valley it's
01:21:32
not as acute as what Amazon is dealing
01:21:34
with it does feel like um that is those
01:21:37
are the last
01:21:39
cities to falchum off they are the ones
01:21:42
they are the ones that take the index to
01:21:44
3200 if we're going to try to do it
01:21:46
there's only one place to look you've
01:21:48
whacked everybody else everything is
01:21:50
down you know 50 to 90 in some cases so
01:21:54
and then finally you know and by the way
01:21:57
sorry just just at the end of life of
01:21:58
last year a quarter of every s p dollar
01:22:00
was crowded in those names a quarter so
01:22:03
you got to go there yeah I mean and also
01:22:06
they're automatically bought right
01:22:07
they're automatically bought by these
01:22:08
index funds and and so who's at the
01:22:11
wheel saying we're not we're going to
01:22:12
take the money out of them right who who
01:22:14
in their right mind is taking money out
01:22:16
of apple Amazon and Microsoft where do
01:22:18
you put it I guess is everybody's
01:22:20
question right trim off like if you take
01:22:21
it out of there where do you put it well
01:22:23
no I think I think it's just that when
01:22:25
when you have patterns of selling
01:22:27
typically as I've seen it uh my
01:22:30
experience is that initially it's the
01:22:31
algorithms
01:22:33
that really start to push a market in a
01:22:35
direction then you have you know the
01:22:38
more traditional fund complexes that's
01:22:40
the hedge funds and the long onlys they
01:22:42
follow suit
01:22:43
and then the last group tends to be
01:22:46
retailed
01:22:47
and it works in reverse the other way as
01:22:49
well
01:22:50
and so you know obviously there's
01:22:52
exceptions to all of these but as a
01:22:53
general rule so if retail starts bailing
01:22:56
on Amazon well they are right now and
01:22:58
apple yeah they are sellers now but okay
01:23:00
now time to buy it right but again this
01:23:03
is this is where sort of organized
01:23:04
Capital now is finding a bottom again
01:23:07
like when you start to shake just think
01:23:09
about the psychology of like being
01:23:11
delivered bad news after bad news you go
01:23:13
through the cycles right there's denial
01:23:15
there's anger there's depression there's
01:23:17
bargaining but then at some point
01:23:18
there's acceptance and in that
01:23:21
acceptance phase you're like yeah you're
01:23:23
right things are bad
01:23:24
but when you see a market rally into a
01:23:27
print like this it's uh it's really
01:23:29
really interesting psychological Turning
01:23:31
Point as a proof point to what you're
01:23:33
saying sax uh chamoth and sax I want to
01:23:36
get your comment on this Venture Capital
01:23:38
firms
01:23:39
like Sequoia Excel and others that have
01:23:41
now uh changed their status as you know
01:23:43
just private companies but also dabbling
01:23:45
in public are buying public equities
01:23:48
which basically means they see more
01:23:51
opportunity in public underpriced tech
01:23:54
stocks growth stocks Etc then they do in
01:23:58
late stage private companies correct and
01:24:01
you saw the Wall Street Journal story
01:24:01
I'm assuming sex yeah I saw that what is
01:24:05
what do you read what you read into that
01:24:06
is it overblown or is it indicative of
01:24:08
something I think it's probably
01:24:09
overblown because Sequoia created that
01:24:11
fund that is a hedge fund and an
01:24:13
Andreessen Horowitz became a richer
01:24:15
investment advisor so they could buy
01:24:16
public security so I look I don't think
01:24:19
most Venture funds are all of a sudden
01:24:20
investing in public markets we aren't
01:24:22
even allowed to do that as far as I know
01:24:23
nor will we ever try to so I think
01:24:26
probably it's exactly you have to give
01:24:28
up socks your VC exception exemption but
01:24:31
you could do it you could do it yeah
01:24:32
yeah I mean we wouldn't want to but it's
01:24:34
kind of the point but look I can't
01:24:36
explain why the market did what it did
01:24:39
today it could have liked him I said it
01:24:41
could have been some sort of algorithmic
01:24:42
you know buying or selling
01:24:46
um but I just think that the overall
01:24:48
news today was the economic news was
01:24:51
just another really bad report I mean
01:24:53
just look at these headlines from The
01:24:54
New York Times today okay I'm going to
01:24:56
read you the headlines on a single sort
01:24:59
of scrolling page here number one
01:25:01
inflation came in much faster than
01:25:03
expected bad news for the FED takeaways
01:25:05
from another painful inflation report
01:25:08
three disappointing inflation data keeps
01:25:10
Democrats on defense out of midterm
01:25:11
elections four food prices climb again
01:25:13
Weighing on household budgets five rent
01:25:16
inflation remain tepid a troubling sign
01:25:17
six used car prices aren't declining as
01:25:20
much as economists of the host slow down
01:25:21
get give Freeburg a chance to take some
01:25:24
time take his Xanax for you gas prices
01:25:27
fall slightly but overall energy costs
01:25:28
are soon expected to rise and eight
01:25:31
retirees are getting an 8.7 Social
01:25:33
Security costs living raise the biggest
01:25:34
in decades I guess that one is sort of
01:25:36
positive but it's like literally
01:25:37
negative headline efforts in the New
01:25:40
York Times but can I reinterpret that
01:25:41
for you I think I think the way to think
01:25:43
about it is this gives the fed the
01:25:46
resolve it needs it's going to go by 75
01:25:48
it's probably going to go another 75.
01:25:50
we're going to have rates by four to
01:25:52
four fifty to five percent probably
01:25:54
within q1 which means if you're trying
01:25:56
to figure out where the bottom is it's
01:25:58
roughly now ish and so that's why you
01:26:00
see smart money David shaking this thing
01:26:02
off
01:26:03
um and starting to enter the market and
01:26:05
so again and the other version
01:26:07
interpretation is when rates are four or
01:26:09
five percent the cost of servicing
01:26:11
United States debt is so meaningful as a
01:26:14
percentage of their budget the
01:26:16
incremental spend that they would need
01:26:18
to make to enter a new war is too much I
01:26:21
think I love this point I love this
01:26:22
point where we're we're weaving all
01:26:24
these things together
01:26:25
so so right so on the economics page of
01:26:30
the New York Times disasters headline
01:26:32
after the disasters headline then you
01:26:33
turned the foreign policy page you got
01:26:34
Tom Friedman writing a column here
01:26:36
saying we are suddenly taking on China
01:26:38
and Russia at the same time and Tom
01:26:40
Freeman historically has been a huge
01:26:41
Hawk and he is even saying he's saying
01:26:44
yeah pump on the brakes never fight
01:26:47
Russia and China at the same time yeah
01:26:49
so he says we are an Uncharted water
01:26:51
Waters I just hope these are not our new
01:26:53
forever Wars It's Like Whoa so basically
01:26:56
look our economic base our economy is
01:26:58
crumbling at home at the same time that
01:27:00
we are doing unprecedented saber
01:27:02
rattling abroad this does not compute we
01:27:05
we need to take a timeout my prediction
01:27:08
but my my prediction is that we will not
01:27:11
enter a new war with rates flexing up as
01:27:14
aggressively as they are I love it I
01:27:16
love weaving these two stories together
01:27:17
I think it makes a lot of sense we
01:27:19
didn't have time for Alex Jones but
01:27:21
we'll save that for another episode
01:27:22
gentlemen I think it's our best episode
01:27:24
ever it's an honor and a privilege to
01:27:26
spend this hour or so with you every
01:27:27
week I love you like brothers
01:27:29
and it's been a great hundred episodes I
01:27:31
look forward to a hundred more sacks if
01:27:34
you need a mental health break Dr
01:27:35
friedberg's oh no he's got him doped up
01:27:38
David David will be back next Friday I
01:27:39
just want to say
01:27:40
hey David don't read your replies get
01:27:42
off of that I just want to say how much
01:27:44
I love you guys and I'm really proud of
01:27:45
what we've created
01:27:47
and I'm really excited to get to the
01:27:49
next hundred
01:27:50
and uh I'll see you guys tonight I'll
01:27:52
break out the light so we're all you
01:27:54
want to keep going that's the news today
01:27:59
I will say that Jake house moderation
01:28:01
has been a lot better since he got
01:28:04
brigaded that is his way
01:28:07
[Applause]
01:28:11
I love you I love you Freeburg let's see
01:28:13
if we can get sacks to do it it's been
01:28:15
100 episodes he hasn't said it yet but I
01:28:17
love David Zacks David's are you coming
01:28:19
tonight taxi before you coming yeah I'll
01:28:20
come I'll come you're coming oh wait
01:28:21
wait wait wait uh let me check I'll get
01:28:23
back to you offline
01:28:50
I'll see you tonight
01:28:57
Rain Man Davidson
01:28:59
I'm going home and I said we open source
01:29:03
it to the fans and they've just gone
01:29:05
crazy
01:29:05
[Music]
01:29:28
it's like this like sexual tension that
01:29:30
we just need to release somehow
01:29:37
we need to get Mercies
01:29:43
[Music]