00:00:00
You sound smarter when you
00:00:01
catastrophize. It sounds scarier and
00:00:03
more interesting. And you put some bar
00:00:05
charts around you talking about the
00:00:06
zombie apocalypse in a downward spiral
00:00:08
doom loop.
00:00:15
Hi everyone, this is Pivot from New York
00:00:17
Magazine and the Vox Media Podcast
00:00:19
Network. I'm Cara Swisser
00:00:20
>> and I'm Scott Galloway.
00:00:21
>> Why don't you give us an update because
00:00:23
February is coming to an end. You've had
00:00:24
over 20 million views across social
00:00:26
media and over 1.5 million site visits.
00:00:28
obviously has a lot of momentum. People
00:00:30
mention it to me all the time. Your
00:00:32
website touts $242 million loss in
00:00:34
market cap. Talk a little bit about how
00:00:37
it's gone because we have something to
00:00:39
announce. But first, give me a little
00:00:40
update and then you can do the big
00:00:42
announcement. Yeah, look, I'm the honest
00:00:45
truth is I'm struggling because it's
00:00:47
taken a lot of time and a lot of effort
00:00:49
and it feels as if it's the momentum is
00:00:52
actually cumulative and building and
00:00:54
I've had a lot of different kind of
00:00:56
smaller I don't know resistance programs
00:00:58
reach out and say what are we are going
00:00:59
to do in March should March be should we
00:01:01
met March where we focus on one company
00:01:03
or focus on open AI should it
00:01:06
>> right so and how do we keep it going
00:01:09
because it does feel like it's
00:01:11
>> it's building momentum and to just shut
00:01:13
it down at the end of the month feels
00:01:15
like a loss of effort and momentum. So,
00:01:18
>> I'm quite frankly, Cara, and I want your
00:01:20
advice. I'm trying to figure out what to
00:01:21
do with it going into March.
00:01:23
>> Well, as I said, uh first of all, let me
00:01:26
well, before I say what we're going to
00:01:28
do to in March, um is uh I think you
00:01:31
should hire someone specifically, not
00:01:33
part of your team, but hire someone to
00:01:36
really keep it going. and someone who
00:01:37
wears Birkenstocks, lives in Brooklyn,
00:01:39
>> a lesbian,
00:01:40
>> someone with rich parents putting them
00:01:41
putting them through nonprofit.
00:01:43
>> Whatever it takes, Scott, whatever it
00:01:44
takes, but I think it's important to to
00:01:46
have someone at
00:01:47
>> Do you drive a Subaru?
00:01:49
>> No, my son does. Um, so
00:01:52
>> your son would be great at this. What's
00:01:53
Louis doing?
00:01:54
>> He's in San Francisco working for
00:01:56
>> Oh, perfect.
00:01:57
>> No, you're not. No,
00:02:00
>> I don't know if you've heard, but I pay
00:02:01
really well.
00:02:02
>> I know. Well, we have a lot of dick
00:02:04
jokes, but I compensate 50 to 100% of
00:02:06
market. True story. The dick jokes and
00:02:08
the compensation.
00:02:09
>> Wants to help. You know who you want is
00:02:11
Alex, but he wouldn't do it. Alex is so
00:02:13
like he would engineer this out of
00:02:15
>> Michigan. He's taking like organic
00:02:17
chemistry and computer science. He's
00:02:19
working for
00:02:20
>> and working out and like lifting lifting
00:02:22
buildings. And
00:02:23
>> this the title that he has for this
00:02:25
summer where he's working his advanced
00:02:28
manufacturing product integration
00:02:30
engineering intern.
00:02:32
>> That rolls right off the tongue.
00:02:33
>> I know. I was like, wow.
00:02:35
>> Can he just say pole dancer?
00:02:37
>> Pole dancer. Advanced manufacturing
00:02:39
product integration engineering intern.
00:02:41
That is what my second son is doing. Did
00:02:43
I tell you when I was on uh the college
00:02:45
tour with my son Alec, the first thing
00:02:48
the literally the first thing the first
00:02:49
impression we got of Michigan was Alex's
00:02:52
fraternity and we were both like just
00:02:55
scared
00:02:56
>> scared as he's leaving the floors were
00:02:59
sticky
00:03:00
>> sticky.
00:03:01
>> It I I lived in a fraternity and I don't
00:03:04
I don't I it like brought back I'm like
00:03:06
was it this bad?
00:03:07
>> Yes. And it smells like beer. Old beer.
00:03:09
>> Oh yeah. A beer.
00:03:11
deer and seaman. Um, yeah, I know. But
00:03:15
yeah, it just uh
00:03:16
>> Yeah. Yeah. He's he's going to live in
00:03:18
an apartment for his senior year. But so
00:03:20
he's leaving the frat finally. And my
00:03:22
little boy is
00:03:23
>> Yeah. And the house was clearly built
00:03:25
like 200 years ago. He looked like
00:03:27
Guliver roaming around.
00:03:28
>> Yeah. Yeah. You want to go back? I feel
00:03:30
like you want to go back for a party.
00:03:32
But speaking of I'm in.
00:03:34
>> Okay. All right.
00:03:34
>> I'm definitely that pathetic guy that
00:03:36
shows up at the fraternity party when
00:03:38
he's invited.
00:03:38
>> Yes. No. That's so sad. um that there
00:03:41
was there was a shot there was a Seth
00:03:43
Rogan movie like that. Anyway, listen,
00:03:45
>> we are going back to the Midwest. Let me
00:03:47
just say this is not ending. I think you
00:03:49
should hire someone. I think you should
00:03:50
keep going. But we are going back to the
00:03:52
Midwest. We're not going to Ann Arbor,
00:03:54
but we um uh Scott and I are coming to
00:03:57
Minneapolis. We talked about it on the
00:03:58
show and then we made it so along with
00:04:00
our great team here. And you can see us
00:04:02
live. We're going to celebrate, resist,
00:04:05
and unsubscribe and keep the momentum
00:04:07
going. We're going to do a live show at
00:04:09
the Is it the Pantages Theater?
00:04:11
>> Pantageous. I've been
00:04:12
>> Pantageous Theater on Sunday, March 8th.
00:04:15
We will be there.
00:04:16
>> I want to meet Roa from Mary Tyler
00:04:19
Moore. That's why I'm going. That's And
00:04:22
you know what? I hope she's wearing a
00:04:24
raspberry beret. Get it? Get it, Cara.
00:04:28
Little local. Little local humor there.
00:04:31
>> Talk about the tickets. They're not
00:04:32
available yet, right?
00:04:33
>> They go on sale. I think by the time
00:04:34
this airs, they're on sale. Yeah,
00:04:36
>> we're going to be donating all proceeds
00:04:38
to the Minneapolis Immigration Center, I
00:04:40
believe it's called.
00:04:42
>> But we want to do something. Well, a
00:04:45
very supportive and we've decided I
00:04:47
won't say we wait. I've decided I want a
00:04:49
fra I want my efforts off the [ __ ]
00:04:52
keyboard and off my to be a fraction of
00:04:55
the virtue signaling and action I claim
00:04:58
I claim to, you know, want to have. And
00:05:00
so I pitched you on this idea and we
00:05:03
thought, let's go to Minneapolis. We
00:05:04
want to bring some economic activity. We
00:05:06
want to salute them. We want to
00:05:08
basically say over and over that they
00:05:10
[ __ ] with the wrong cowboy when they
00:05:12
came to Minneapolis. It's going to be a
00:05:15
nice event. You, of course, are totally
00:05:16
wellconed. We're going to have a bunch
00:05:18
of fun and famous surprise guests.
00:05:20
>> Yes.
00:05:21
>> And we're going to do we're going to do
00:05:22
a live show and basically nod to the to
00:05:25
the incredible Americans known as
00:05:27
Minneapolis.
00:05:28
>> We love the Minneapolis. and the the if
00:05:31
you jump straight to the website the the
00:05:33
you can find a link to buy them when the
00:05:35
tickets are available. We think they're
00:05:36
going to be available on Friday uh at
00:05:38
resistandunsubscribe.com.
00:05:40
We've got a thousand tickets. Uh again,
00:05:42
the money goes straight to charity. We
00:05:44
will do we're going to run this show on
00:05:46
pivot too. So we'll talk about some
00:05:48
current events, but we're going to focus
00:05:49
on what's happening here with Resistant
00:05:52
Unsubscribe. And we know we have a lot
00:05:53
of fans there and we love Minneapolis.
00:05:55
We love what the city has done and we
00:05:58
want to give back in some way. And this
00:06:00
is one of the many ways because what
00:06:02
happened to you was heinous and at the
00:06:04
same time tech companies have a lot to
00:06:06
do with this like let's be clear. Um and
00:06:09
so we really what Scott is doing here is
00:06:11
giving you guys have resisted and we are
00:06:15
going to do our little part and it's a
00:06:17
little part compared to what Minneapolis
00:06:18
has done. But tech is not not it's not
00:06:20
the only reason obviously but it's
00:06:22
played a part in where we are today. And
00:06:24
so um we're going to resist and
00:06:26
unsubscribe and everyone's going to
00:06:27
unsubscribe. Speaking of unsubscribed,
00:06:29
Scott, I unsubscribed from One Medical,
00:06:31
which is an Amazon uh product. Um,
00:06:33
>> did you have the 99 a year or 199 a
00:06:35
year?
00:06:36
>> 199 a year.
00:06:37
>> And were you using it?
00:06:38
>> I a little bit. Yeah, absolutely. And I
00:06:40
love
00:06:40
>> I love the service. I just hadn't used
00:06:42
it in several years.
00:06:42
>> Yeah, I I I use it when I get like an
00:06:44
ear in every time I get an ear infection
00:06:46
or something like that or clean out my
00:06:48
ears or a cold or a flu.
00:06:49
>> That's a little too much information.
00:06:50
Tell us about the ear cleaning.
00:06:52
>> Okay.
00:06:52
>> Tell us about the ear. wax in my ears
00:06:54
and so I've unsubscribed our entire
00:06:56
family from it could be less attractive
00:06:59
to a heterosexual.
00:07:00
>> Um
00:07:01
>> anyway I'm I'm doing just fine by the
00:07:03
way. Anyway, we've got a lot to get to
00:07:05
today but March 8th Minneapolis tickets
00:07:08
will be on sale soon. Please come. Um
00:07:10
and we're super excited to see you.
00:07:12
We've got a lot to get to today. So
00:07:14
we're going to dig in. First, President
00:07:15
Trump delivered the longest State of the
00:07:16
Union ever on Tuesday, 1 hour and 48
00:07:19
minutes, where he of course said
00:07:20
Americans were telling him, "We're
00:07:21
winning too much." Uh, did you watch
00:07:25
Scott thoughts?
00:07:26
>> It was on too late. I watched I did what
00:07:28
I did with almost all media broadcast on
00:07:31
traditional cable. And as I watched it
00:07:32
in bits and pieces on, you know, Tik Tok
00:07:35
and reals the next day, I felt like
00:07:38
>> for Republicans, I felt as if they were
00:07:40
attending their ex-wife's wedding when
00:07:42
you're still on her health insurance and
00:07:45
but he but she controls the military. It
00:07:48
felt like dear leader in the Duma where
00:07:51
they thought I better stand and applaud
00:07:53
or I risk execution.
00:07:54
>> Yeah, totally.
00:07:55
>> So, I found it I don't know. I I quite
00:07:59
frankly I thought it was a bit of a
00:08:00
nothing burger. He didn't he didn't say
00:08:02
a hell of a lot. I thought he came
00:08:03
across as quite robust to be fair.
00:08:05
>> He came across as robust, but he moved
00:08:07
very quickly by the end into very
00:08:10
deflated. Like it was really, if you
00:08:12
watch the whole thing, he started off
00:08:14
real like energetic and then he got
00:08:17
mean. He was normalish for him and
00:08:20
that's a that's a very low bar, but he
00:08:22
as you as the night progressed, he got
00:08:24
super mean calling the Democrats crazy.
00:08:26
And then that [ __ ] idiot in the back,
00:08:28
Jo JD Vance, was like like he looked
00:08:32
like such a dope. He has he has no right
00:08:34
being to be president. Sorry, I'm going
00:08:36
to He's just such a dope. Um the Supreme
00:08:38
Court went and stonyfaced and every time
00:08:41
Trump did something like the Democrats
00:08:43
are crazy. The Republicans, as you said,
00:08:44
jumped up like a bunch of like like
00:08:47
dancing monkeys essentially. The Supreme
00:08:49
Court sat down, the military looked
00:08:51
straight ahead, which was really
00:08:53
interesting. And of course, the
00:08:54
Democrats sat down and they wanted the
00:08:56
Democrat to have photos of the Democrats
00:08:57
not agreeing with immigrants shouldn't
00:08:59
kill American citizens. They wanted
00:09:01
photos like that. I thought it was
00:09:03
mendacious and if you look at any of the
00:09:06
lie stuff, there's a lot of it. I
00:09:08
thought it was it veered into cruel as
00:09:11
usual. And then the worst part was it
00:09:14
was dull. It was actually dull. And
00:09:16
that's to me the worst part. And of
00:09:18
course the numbers show much less people
00:09:20
watch it. 28 million versus 36. It's
00:09:22
like um doesn't have any staying power
00:09:24
and he denied Americans were suffering.
00:09:26
That's one of the things which I thought
00:09:28
was a mistake. So
00:09:29
>> I thought from a political standpoint,
00:09:31
is it Abby Spanberger? Is that her name?
00:09:33
>> Yeah, Abigail Spanberger.
00:09:35
>> Uh Abigail,
00:09:36
>> governor of Virginia.
00:09:38
>> I thought her rebuttal was outstanding.
00:09:40
And I I came up with an idea. I want to
00:09:42
pitch you and I'm serious now. And I
00:09:43
actually called one of our favorite
00:09:46
senators and I said, "I have an idea.
00:09:48
Uh, I think they should hire,
00:09:51
if you think about essentially the
00:09:54
Democratic response should turn into
00:09:56
what the halftime show is to the Super
00:09:58
Bowl. And that is a halftime show had
00:10:00
almost no relevance 40 years ago. Now
00:10:03
it's bigger than the Super Bowl.
00:10:05
>> I said, "Hire Jay-Z's Rock Nation."
00:10:07
>> Oh,
00:10:08
>> fill a stadium with 10,000 rabbid
00:10:10
Democrats.
00:10:11
>> Yeah. And then you get all excited.
00:10:12
>> Music, cool,
00:10:15
cool intro. amazing artists,
00:10:18
uh, graphics, visuals, great lighting,
00:10:20
because the problem is the followup,
00:10:22
whether it's Marco Rubio responding, the
00:10:24
response always comes across as flat
00:10:26
because it lacks the sex and the majesty
00:10:28
of the
00:10:29
>> jazzed up. I agree. The lighting wasn't
00:10:30
good.
00:10:31
>> Let's sex it the [ __ ] up because if you
00:10:33
listen to what she said, if you read her
00:10:35
response,
00:10:36
>> yeah, it was good.
00:10:37
>> It was outstanding.
00:10:38
>> The lighting was bad. This the setting
00:10:40
was bad.
00:10:40
>> It's just they can't compare. It's like
00:10:42
going from
00:10:43
>> the Greek theater to you're, you know,
00:10:45
you're watching something on laser disc.
00:10:48
>> Yeah.
00:10:48
>> It reminds me of you, I think you'll
00:10:50
appreciate this.
00:10:50
>> myself for thinking that, but I'm like,
00:10:52
the lighting's bad and the setting is
00:10:53
bad. It's
00:10:54
>> um
00:10:55
>> away and it was too close.
00:10:57
>> When I was renovating a house in the
00:10:59
Hamptons, let's bring this back to me.
00:11:02
Um, I used to go to the g the 7-Eleven
00:11:04
and a bunch of guys uh uh would roll up
00:11:07
and I'd say, "Okay, I need some guys to
00:11:09
do stunt studing or something like this
00:11:11
in my general contract. I would just sit
00:11:12
in the passenger seat with a bunch of
00:11:14
cash." And I had no less than 12 or 15
00:11:17
workers at any time at my house doing
00:11:19
[ __ ] And at night I'd roll in and
00:11:22
they'd all be in the kitchen with a VCR
00:11:24
and a big like four pizzas and like 24
00:11:29
um it was either a Medelas or something
00:11:31
else and they'd have this bad black and
00:11:33
white TV and all these guys would just
00:11:34
be sitting around watching porn.
00:11:36
>> Oh
00:11:37
>> yeah. And I remember thinking this is
00:11:39
odd. This is odd.
00:11:41
>> Story is odd. But go ahead.
00:11:42
>> This is odd. No, that's it. That's the
00:11:44
whole story.
00:11:45
>> Okay. Okay.
00:11:45
>> That's the whole story.
00:11:46
>> Don't do that. Democrats do not have
00:11:48
Medela pizzas in Pol.
00:11:49
>> I had a This is what a douchebag I was.
00:11:52
>> I had a sand beach volleyball court.
00:11:55
>> Okay. Okay. You're losing the
00:11:56
resistance.
00:11:57
>> Optimized for the ladies.
00:11:58
>> All right. Okay. Let's move. You have
00:12:01
progressed to a better person and now
00:12:03
you're a lesbian going to Minneapolis.
00:12:05
I'd like you to wear Birkenstocks, by
00:12:06
the way. I think that would be great.
00:12:08
Anyway, it was a nothing burger and he
00:12:10
looked mean and I I thought he got he
00:12:13
real got and and started doing the blah
00:12:15
at the
00:12:16
>> he didn't say anything and he didn't
00:12:17
outline he teased tax cuts which I was
00:12:20
interesting to see. Okay. He didn't talk
00:12:21
about AI much. She didn't do anything
00:12:23
forward.
00:12:23
>> He didn't really He didn't really talk
00:12:25
about Iran much. He didn't
00:12:26
>> The show is The show is winding down.
00:12:29
That's what I thought. It reminded me at
00:12:30
the end of
00:12:32
>> The Apprentice. It wound down. It
00:12:34
suddenly wasn't interesting. It was
00:12:35
macdacious and cruel, but that that's
00:12:37
sort of table stakes with him.
00:12:39
>> Dull is what I thought. Hi everyone.
00:12:41
Scott and I just recorded earlier today,
00:12:43
but I'm jumping on because a major story
00:12:45
just broke. After a long battle,
00:12:46
Paramount has won the Warner Brothers
00:12:49
Discovery Bidding War. or at least for
00:12:50
now. Netflix has released a statement
00:12:52
saying the deal is quote no longer
00:12:54
financially attractive. It never was.
00:12:56
And it was quote always nice to have at
00:12:59
the right price, not a mustave at any
00:13:01
price. Perman had upped its offer to buy
00:13:03
all of the company for $31 a share and
00:13:05
added all kinds of bells and whistles.
00:13:07
And Warner determined the offer was
00:13:09
superior to Netflix because it was
00:13:11
actually. So I'm joined now by Puck's
00:13:13
Bill Cohen to break this all down. Bill,
00:13:16
we you and I have been texting about
00:13:17
this for a long time. You thought it
00:13:19
would be quick and Paramount would get
00:13:20
away. I said this was going to go on on
00:13:23
and on and it has. It's really been like
00:13:25
since December I think we've been
00:13:27
whenever it sort of broke
00:13:29
>> but talk a little bit about your
00:13:30
overarching things and we'll talk about
00:13:31
a few other things.
00:13:33
>> Oh look, I think this uh Carol is the
00:13:35
outcome that had to happen. U you know
00:13:38
uh whereas Netflix was saying it was
00:13:40
nice to have at the right price it was
00:13:42
getting to be nosebleleed territory.
00:13:45
Paramount this is existential. I mean,
00:13:47
without this, they're just like an 11
00:13:50
billion company, which once upon a time
00:13:53
would be nothing to sneeze at. But now
00:13:54
was a pipsqueak in this landscape. If if
00:13:57
they hadn't done this, then their their
00:13:59
original premise for the Parammont deal
00:14:01
wouldn't have made much sense, and their
00:14:03
equity wouldn't do anything. So, this
00:14:07
was kind of existential for them. They
00:14:09
had to pay up. They had to win. And
00:14:11
kudos to David Zazlov for running one of
00:14:13
the best AMA processes I've seen in a
00:14:16
long time. people who forget. Um,
00:14:18
yesterday was I had tweeted that Netflix
00:14:20
had to walk away from this because it
00:14:22
was just ridiculous. It was an insane
00:14:24
price and Warner was at uh was at $10 a
00:14:27
share recently and it popped to 31. Was
00:14:30
there $21 of of excellence that had been
00:14:34
created? Not at all. From nothing,
00:14:36
right? It's like whipped cream or
00:14:37
something.
00:14:37
>> Well, it it it actually got as low as $7
00:14:39
a share. And remember,
00:14:41
>> right, I do remember um
00:14:44
>> I was recommending people, you know, buy
00:14:47
at that price, but cuz I thought they
00:14:49
would pay down the debt and make
00:14:50
something of it. But, you know, he's,
00:14:52
you know, ever since September 11th when
00:14:53
Paramount first began to hint that it
00:14:56
was interested in buying this and it
00:14:58
offered $19 a share, uh, we've gone from
00:15:02
7 to 31 and and it's, uh, and what
00:15:07
not not because the companies have, uh,
00:15:09
performed, uh, particularly that much
00:15:12
better. I mean, they've performed fine
00:15:14
and and Warner Brothers had some hit
00:15:16
movies, but it's just because of the
00:15:18
scarcity value. The fact that he ran an
00:15:21
Zaz ran an incredible auction process,
00:15:24
kept them on both sides on their toes
00:15:25
the whole way. And uh especially this
00:15:28
last bit of uh of of jiu-jitsu was just
00:15:32
beautiful to watch.
00:15:34
>> Yeah.
00:15:34
>> Yeah. I I said he won the Jeff Buucas
00:15:36
award for turning chicken [ __ ] into
00:15:37
chicken salad and feeding it to a Nepo
00:15:40
billionaire. like
00:15:41
>> that's, you know, Jeff Buucis was the
00:15:43
last guy at uh Warner Brothers to, you
00:15:45
know, make a fortune selling the company
00:15:48
to AT&T and now Zaz has done it again,
00:15:51
>> been sold again. So, let's break it
00:15:53
apart a little bit because one of the
00:15:54
things that had begun to dawn on me and
00:15:56
you and I I always thought Netflix was
00:15:58
the better owner in terms of taking
00:15:59
these assets and doing something
00:16:01
significant with them. I felt like the
00:16:03
purchase the Paramount is not as good
00:16:05
going to be as good as owner. still too
00:16:07
small. Instead of a leaking lumbering
00:16:10
media ship, it's a bigger leap, you
00:16:13
know, lumbering ship. I don't see how
00:16:15
they're going to just cuz they're
00:16:17
slightly larger, be that much better
00:16:20
unless they are run by someone who's
00:16:24
more experienced. It's like I think
00:16:25
David Ellison should get out of the way
00:16:26
and you know I know they have Jeff Shell
00:16:28
very talented George Cheeks many others
00:16:30
but they really they they don't have the
00:16:33
executive
00:16:34
fortitude I think to do much with this
00:16:37
and Netflix later can come swooping in
00:16:39
and take off parts. How do you look at
00:16:41
it?
00:16:41
>> Look, I know they're very excited over
00:16:43
at Paramount about winning. I know
00:16:46
they're very excited about their
00:16:47
business plan and what they think
00:16:48
they're going to do with this. You know,
00:16:50
they're going to have to combine CBS and
00:16:52
CNN. I can only imagine what the
00:16:54
feelings are over there. Uh yeah,
00:16:57
probably not great. Uh you know, there's
00:16:59
a lot of bloat probably on the CNN side
00:17:01
that's going to once again come under
00:17:04
the come under the axe. Um you know, as
00:17:08
we've discussed many times, G, I think
00:17:10
that, you know, David Ellison has
00:17:13
blundered a few times already out of the
00:17:15
gate.
00:17:16
>> U Sheridan losing that. you know, that
00:17:18
was a big big loss, you know,
00:17:21
>> bigger than the CBS disasters,
00:17:24
>> which are not nothing either. Uh, you
00:17:27
know, overpaying for, you know, UFC or
00:17:30
whatever it is. I mean, uh, you know, so
00:17:33
I think there's, you know, they've got a
00:17:35
lot to prove is, but nevertheless, uh,
00:17:39
they've got a lot to prove, but they
00:17:41
also had, this was existential for them.
00:17:44
They had to, they had to win. And for
00:17:46
Larry Ellison, I mean, if if it weren't
00:17:48
for Larry Ellison, we wouldn't be here.
00:17:50
We wouldn't be talking about this. We
00:17:51
wouldn't have this discussion. They
00:17:52
would never have been taken seriously.
00:17:54
They never could have done the deal. So,
00:17:55
it's Larry's unbelievable amount of
00:17:58
equity that that he's willing to step
00:18:00
up. is something like $45 billion of
00:18:03
equity, 25 billion from Middle Eastern
00:18:07
private uh sovereign wealth funds and
00:18:10
the rest from Larry and and you know
00:18:13
Jerry Cardell at Redbird Capital uh with
00:18:16
most of it coming from Larry. I mean
00:18:18
this is an unbelievable amount of
00:18:19
equity, an unbelievable amount of debt.
00:18:21
It's probably going to be like the
00:18:22
largest LBO kind of in history except
00:18:24
they're not taking the company private.
00:18:26
uh there, you know, was remaining.
00:18:28
>> Let me ask you in that regard, you know,
00:18:30
would you compare it to what Elon did at
00:18:32
Twitter like that? I don't know. Someone
00:18:34
was like, well, can't they do what Elon
00:18:36
did, meaning the the bankers sort of
00:18:37
gave up and he managed to get his money
00:18:40
back cuz he squeezed it into a different
00:18:41
company. I don't think they have that
00:18:43
choice here. This is they're just have
00:18:45
the media company. Correct. Hey, well,
00:18:48
you know, if they want to create P AI
00:18:51
and create a AI company and have
00:18:53
everybody go crazy for it and then have
00:18:55
the AI company buy the media company and
00:18:58
then, you know, merge it with SpaceX.
00:19:00
Okay. I mean, you can do you want to go
00:19:02
do all those crazy things. Maybe they
00:19:04
can uh uh pass it off onto somebody
00:19:06
else. Maybe Elon will buy it. You know,
00:19:08
Elon could buy it out of petty cash.
00:19:10
>> He could. He could. Why did Larry
00:19:12
Ellison do this? because he seems to me
00:19:15
he's a smart customer about a lot of
00:19:17
things. This seems like buying a yacht
00:19:20
or something. Well, he has a yacht. What
00:19:21
am I talking about? But you know what I
00:19:22
mean? It seems so unlike him. Perhaps
00:19:25
he's old. Perhaps he wants to leave a
00:19:26
legacy for his son who likes to make
00:19:28
movies. What What is Cuz from a
00:19:30
financial point of view, this is not a
00:19:32
Larry Ellison move to me in my mind.
00:19:34
>> No, this is you know they're going to
00:19:36
have 70 plus billion of debt here. Cara,
00:19:40
it's a lot of debt. you know, maybe they
00:19:42
have 11 or 12 billion of cash flow.
00:19:46
Maybe um it's a lot of debt. Uh they're
00:19:49
going to have to make a lot of cuts. Uh
00:19:51
they, you know, they believe they're
00:19:53
going to delever quickly. You know,
00:19:55
every buyer, every buyer who puts
00:19:58
together a leverage company thinks
00:19:59
they're going to delever quickly. Uh
00:20:02
sometimes they do, sometimes they don't.
00:20:04
Maybe Netflix will get another chance at
00:20:06
this when the thing flounders. But why
00:20:08
did Larry do this? I think it's edible.
00:20:10
I mean, I think he wanted to do this for
00:20:12
his son and he started down the path to
00:20:14
do it. It, you know, it went it went
00:20:17
from 19 was their first bid to 31. Uh, I
00:20:21
think he felt like, you know, this ego
00:20:22
was involved if he didn't do it that
00:20:25
that, you know, he'd have egg on his
00:20:26
face kind of thing. And he's got now
00:20:28
Trump expecting him to, you know, change
00:20:30
the dynamic of the two companies in
00:20:33
terms of the politics. And so, I think
00:20:35
he felt like he had to do it. once he'd
00:20:37
started it and you know he basically
00:20:39
caved and gave Zaz everything he wanted
00:20:41
every little
00:20:42
>> which is so unlike Lariel I was like
00:20:44
sort of like what a chump I never called
00:20:46
Larry Ellison a chump before but I feel
00:20:48
chump that that Zazov ran circles around
00:20:50
them
00:20:51
>> completely got into deal heat and gave
00:20:54
Zazlov everything he wanted I mean
00:20:56
they're happy over there
00:20:57
>> I know cuz they're like they're like you
00:20:59
know they're pumping fists but honestly
00:21:01
I was like oh dear oh oh dear that's
00:21:04
what I there's going to be a hangover
00:21:05
for this there's definitely
00:21:07
So, two more questions. You mentioned
00:21:09
Trump. One of the things that everyone's
00:21:10
worried about, of course, is Larry
00:21:11
Ellison owning Tik Tok. He does. And
00:21:13
Oracle owns 15% of Tik Tok, which isn't
00:21:16
a huge amount. It's it's a significant
00:21:17
amount, but it's not the most amount.
00:21:19
Um, and owning CBS, which I think was a
00:21:22
falling knife. So, I'm not really clear
00:21:23
why everyone's they're obsessed with it
00:21:24
because it's a good story, but it's not
00:21:26
a I would say, you know, we just did an
00:21:28
analysis of Pivot and we have more
00:21:30
people in the demo advertising than see,
00:21:32
you know, all of these companies do, all
00:21:34
these cable companies. So, it's not that
00:21:36
it's the news organization and CNN has
00:21:39
been declining. Like, let's be clear,
00:21:40
like the numbers have been declining.
00:21:42
All of cable has, not just CNN. Um, what
00:21:46
do you think it's a political thing or
00:21:48
or what? Or or and also lastly, Trump's
00:21:51
running out of time, right? Trump is
00:21:53
absolutely running out of time. So, look
00:21:55
at address the political issue. And then
00:21:58
secondly, the regulatory issue could
00:22:00
still get very ugly with Democrats
00:22:02
attacking this if they get back in the
00:22:04
in control of the legislature. Correct.
00:22:06
Presumably.
00:22:08
>> Well, let's take the regulatory uh you
00:22:10
know, first they uh made a big deal of
00:22:14
them getting through Hart Scott Rodino
00:22:16
that which meant that there there wasn't
00:22:18
going to be a deep dive into this by the
00:22:21
DOJ. Although they could still come back
00:22:24
and take another look at this now that
00:22:26
it's a kind of a different deal, a new
00:22:27
deal. They could. They probably won't,
00:22:29
but they could. They got the EU. They
00:22:31
were definitely working the EU. You
00:22:33
know, David and Jerry Cardell were over
00:22:36
there working the EU. They think they're
00:22:37
in good shape with the EU. So they think
00:22:40
between uh the DOJ, the EU, and Trump
00:22:44
being on their side because he's going
00:22:45
to you know give them the political
00:22:48
uh you know format that he wants and be
00:22:52
supportive of him which you know
00:22:55
whatever. Uh it's ridiculous if you ask
00:22:58
me but um um you know that they they
00:23:00
think they've got the regulatory
00:23:02
situation in hand. Um, you know,
00:23:05
politicians make a lot of noise about
00:23:07
these mergers, but they have no say in
00:23:09
the approval of them. Um, so even if the
00:23:12
Democrats take the House in uh uh uh you
00:23:16
know, November, I'm not sure what what
00:23:18
this you know, this is going to be this
00:23:21
could very well be over by then. You
00:23:22
know, they put in the so-called ticking
00:23:24
fee. if it's not over by the end of
00:23:26
September, which is obviously before the
00:23:29
elections, they're going to owe uh uh
00:23:32
Warner Brothers shareholders another 50
00:23:34
cents a share or $650 million. So, um
00:23:38
they think
00:23:39
>> the impetus is to do something quick to
00:23:41
get it quickly done.
00:23:43
>> They some things they can't control, but
00:23:44
I mean, uh they obviously are very con
00:23:46
they're highly confident, Cara, they're
00:23:48
going to get this through the regulators
00:23:50
and uh you know, they'll give Trump what
00:23:53
he wants. And I'm not sure the
00:23:54
Democrats, even if they take the House,
00:23:56
can do anything about what CBS and CNN
00:23:59
broadcast
00:24:01
>> at all.
00:24:01
>> It's up to the FCC and that's still in
00:24:04
Trump's pocket. And, you know, Trump
00:24:06
blithering away, you know, asking for
00:24:08
them to give him favors and get rid of
00:24:11
Jake Tapper or whoever they want,
00:24:12
whoever he's mad at might be part of it.
00:24:15
When you think about where Netflix goes
00:24:17
from here, I think it was the smartest
00:24:18
move. The stock is going to soar. They
00:24:20
have plenty of money to do things.
00:24:22
They're so innovative. They're such
00:24:23
great operators, right? They're sort of
00:24:26
It's not a bad thing. They could do a
00:24:27
distribution deal for some of this
00:24:29
content and then later just wait until
00:24:31
the knife falls, right? Presumably, what
00:24:34
would you do if you were I thought this
00:24:36
is exactly what he was going to do?
00:24:38
>> Right. And this is what I wrote that
00:24:39
exactly he should do yesterday and then
00:24:41
I don't know whether he reads it or
00:24:42
listens to me or whatever, but he he did
00:24:44
exactly the right thing.
00:24:46
>> Um he he he looks smart. Stock is going
00:24:48
to move up after moving down like 30%.
00:24:51
He takes this 2.8 $.8 billion breakup
00:24:54
fee and uh builds out his new movie
00:24:57
studio in New Jersey and gets content
00:24:59
deals and you know looks smart and
00:25:02
disciplined and that's what investors
00:25:03
like.
00:25:04
>> Looks like the good guy.
00:25:05
>> He does. He looks like the He looks like
00:25:07
the good guy and he can move on from
00:25:09
this. It was going to be a headache for
00:25:11
him if he got this. Sometimes the
00:25:14
smartest thing you can do in a deal car
00:25:16
is to walk away and he did the smartest
00:25:18
thing. So he's going to get plottits all
00:25:20
around. He, you know, he could read the
00:25:22
tea leaves. He wasn't, it was going to
00:25:23
be a regulatory nightmare for him to get
00:25:25
this through. Trump was not going to
00:25:27
make it easy for him. He already
00:25:29
>> bloiated about firing Susan Rice and
00:25:32
>> Ted didn't do it. And so, you know, who
00:25:34
knows what was going to be in store for
00:25:35
Ted, but uh he he did the smart thing
00:25:37
here.
00:25:38
>> So, very last question. When you think
00:25:40
about what happens next for for
00:25:42
consolidation, this is it's obviously
00:25:44
Comcast has got to be like going what do
00:25:45
we do? Disney's got to go, what do we
00:25:47
do? Netflix now looks like it's willing
00:25:49
to play at least because it wasn't an
00:25:51
acquire very much like Apple but it is
00:25:54
they're very opportunistic now um and in
00:25:57
good now they've had this they've never
00:25:58
done this before now they know right
00:26:00
they've done they've worked on a big
00:26:02
deal what do you see next if you could
00:26:04
make a prediction
00:26:06
>> well I mean it's it's quite you know a
00:26:08
lot of people have been thinking that um
00:26:10
Comcast would you know uh spin-off NBCU
00:26:14
and maybe you know Netflix and NBCU get
00:26:17
together. Um, but you know, I don't
00:26:20
really think Netflix needs to do any of
00:26:22
that. You know, now they got a little
00:26:24
taste of it. Maybe they thought, well,
00:26:25
they walked around the, you know, the
00:26:28
Warner Brothers lot. That was kind of
00:26:30
fun. And now I guess maybe they could
00:26:31
walk around the Universal lot. They're
00:26:33
building their own lot. I'm not sure
00:26:35
they need to do it, but if they want to
00:26:36
do it, I think there would be
00:26:38
opportunities. You know, there's Amazon
00:26:40
Prime. There's uh I'm not going to do
00:26:42
anything with Disney, I don't think. But
00:26:44
NBCU, there are some smaller studios
00:26:46
they could, you know, get their hands
00:26:48
on. They, you know, AMC and things like
00:26:50
that. I I I don't really see that they
00:26:53
have to. I think Ted sort of had fun
00:26:55
here. He showed his medal. He showed he
00:26:58
can be a dealmaker. He got a merger
00:26:59
agreement. Uh and he showed himself to
00:27:01
be disciplined. And he comes out is he's
00:27:04
the big winner in all this. And him and
00:27:06
Zaz, of course,
00:27:07
>> right? Absolutely.
00:27:07
>> Zaz is the $600 million winner. I swear
00:27:10
this guy this guy Mr. Discovery.
00:27:13
>> Yeah.
00:27:14
>> Mr. Mr. Diner.
00:27:16
>> He ran the M&A deal of the century.
00:27:18
>> I I got to give it to him. I got to give
00:27:20
it to him. I always run him down when I
00:27:22
see him. I joke with him. I say he looks
00:27:24
like a lesbian. But he I have to say he
00:27:27
he did a great job here for his
00:27:29
shareholders, right? For the I mean
00:27:31
literally seven.
00:27:33
>> Amazing amazing deal. And good luck
00:27:36
Ellison's good luck on catching the car.
00:27:39
Good luck.
00:27:39
>> We'll wait for the sequel.
00:27:41
>> All right. The other winner here um is
00:27:43
you. You've done an amazing job in
00:27:45
covering this and I like debating with
00:27:47
you and uh it's really helpful because
00:27:49
it's smart and it's clear and uh and
00:27:52
you're you're non-romantic about any of
00:27:54
this. Anyway, uh I appreciate it. Go to
00:27:57
Puck to check out Bill Cohen's reporting
00:27:59
and we'll take a quick break and Scott
00:28:01
and I will be back with Nvidia's
00:28:02
earnings.
00:28:04
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00:29:07
Scott, we're back with more news. Nvidia
00:29:08
reported better than expected fourth
00:29:10
quarter earnings with a profit hitting
00:29:12
120 billion. Only a handful theirs was
00:29:15
revenue. Only a handful of other
00:29:17
companies including Alphabet, Microsoft,
00:29:18
and Apple have made over hundred billion
00:29:20
in profit in a in a year. Uh net income
00:29:22
for the company doubled to $43 billion.
00:29:26
Revenue in the data center business rose
00:29:29
75%.
00:29:30
um uh talk about that because Wall
00:29:34
Street was also rattled this week by a
00:29:35
viral memo from market an analysis firm
00:29:38
Citrini Research very good research
00:29:40
group the memo laid out a scenario where
00:29:42
the AI systems trigger mass white collar
00:29:44
layoffs push unemployment above 10% and
00:29:46
ultimately lead to a stock market crashi
00:29:48
said the post was designed to prepare
00:29:50
investors for potential uh left tailed
00:29:53
risks as AI makes the economy
00:29:54
increasingly weird stressing that it's a
00:29:57
scenario not a prediction even so the
00:29:59
S&P drops up 1% on Monday, though some
00:30:01
of it was over concerns about tariffs.
00:30:04
But companies specifically named in the
00:30:06
memo included Uber, Door Dash, American
00:30:08
Express, IBM, all saw steep declines.
00:30:10
Um, it was an interesting memo, a
00:30:12
thought, it was a thought experience,
00:30:14
and the markets were already rattled by
00:30:16
Blue Owl Capital, a major private credit
00:30:18
lender, announced its halting of
00:30:20
quarterly redemption for one of its
00:30:21
funds and selling uh $1.4 billion in
00:30:24
loan ads as the company's stock fell.
00:30:26
We'll get to that in a second. And I'll
00:30:27
talk a little bit about more but stick
00:30:28
with the first the first with with the
00:30:31
Catrini and um and the Nvidia earns.
00:30:35
>> Well, I'll talk about Nvidia before I
00:30:37
talk about Catrini. Revenue uh 68
00:30:40
billion versus 66 expected up 73%
00:30:44
yearonear up 20% quarteron quarter.
00:30:48
Non-GAAP earnings buck 62 versus A$153
00:30:51
up 82% year-on-year. Data center revenue
00:30:55
62 billion up 75% yearon year. The gross
00:30:58
margins 75%.
00:31:01
>> Yeah,
00:31:01
>> their fiscal 2026 revenues
00:31:03
>> margins were crazy.
00:31:04
>> 216 billion up 65%.
00:31:08
I think that's that may be more revenue
00:31:10
than like every streaming media company
00:31:12
and movie studio combined. Yeah. Since
00:31:14
the launch of Chat GBT, Nvidia has grown
00:31:17
its data center business roughly 13fold.
00:31:20
And this quarter marked the best revenue
00:31:22
growth rate of the entire fiscal year.
00:31:23
So, it's revenue growth on the law of
00:31:25
big numbers. It seems to be more like
00:31:27
network effects. It keeps getting better
00:31:29
at scaling. Q4 73% year-on-year growth.
00:31:33
Beat Q3 at 62, Q2 at 56, and Q1. As they
00:31:37
get bigger, they're growing faster.
00:31:39
They're literally defying,
00:31:42
you know, gravity. Uh, notably they're
00:31:45
leaving out China from its future
00:31:47
guidance. According to the CFO, while
00:31:48
small amounts of H200 products for China
00:31:50
based customers were approved by the US
00:31:52
government, we have yet to generate any
00:31:53
revenue, and we do not know whether any
00:31:55
imports will be allowed into China.
00:31:57
China was previously 20 almost a quarter
00:31:59
of Nvidia's data center revenue, but
00:32:02
that's now gone. It doesn't seem to have
00:32:03
hurt them. And the thing is, it's still
00:32:06
not expensive. It trades at roughly 24
00:32:08
times forward earnings, which is only
00:32:10
slightly higher than the S&P. So you
00:32:12
have a company that's the most do
00:32:13
arguably the most dominant company in
00:32:15
history at at that moment is trading
00:32:18
what the S&P is trading at and because
00:32:21
of the fears around AI and maybe because
00:32:24
of the stock acceleration it's only up
00:32:26
it's basically flat it's up 4% this year
00:32:28
>> that
00:32:29
>> and then you have all these companies
00:32:31
announcing they're spending 2/3 or 3/4
00:32:34
of a trillion dollars on capex this year
00:32:37
and most of it's or a lot of it is going
00:32:39
to Nvidia Alphabet is flat Amazon's down
00:32:42
7% year-to date. Meta is flat. Microsoft
00:32:45
is down 15% year to date. But big tech
00:32:48
is getting punished
00:32:50
uh for spending money and Nvidia is
00:32:53
getting punished uh for collecting it or
00:32:55
Nvidia's on the right side of that
00:32:56
capex. So, one of those one of those
00:33:01
must be wrong. Either these companies
00:33:02
are making good investments um or I
00:33:05
guess maybe the thesis is they're
00:33:06
overspending and it'll slow down.
00:33:08
>> Yeah.
00:33:08
>> Should we talk about Catrini? Yeah,
00:33:10
Catrini was interesting. I I you know,
00:33:12
there was the other one a couple weeks
00:33:13
ago that was another thing like
00:33:14
everything's going to change. That one
00:33:16
Schumer, Matt Schumer, whatever his name
00:33:18
is. Um there's been a couple of these
00:33:20
that have actually had real impact um as
00:33:23
they've been written. So because they're
00:33:24
thought experiments in many ways, um but
00:33:28
they're interesting, but go ahead,
00:33:29
Satrini.
00:33:30
>> Well, essentially, I would describe it
00:33:32
as an A+ creative writing project from a
00:33:36
super bright high school student. And it
00:33:38
is really it's written in the past
00:33:40
tense. It says, "Okay, this is how we
00:33:41
hit this massive recession and the
00:33:43
market lost a third of its value." And I
00:33:45
think it's a really interesting thought
00:33:46
experiment. What what they're
00:33:48
essentially saying is that AI is going
00:33:50
to create this negative feedback loop
00:33:52
where it makes white collar workers so
00:33:55
much more productive so quickly that
00:33:56
companies can do layoffs and hire fewer
00:33:58
workers which results in an unemployment
00:34:01
spike less consumer spending and because
00:34:04
companies fall under revenue pressure
00:34:06
they're forced to cut costs and how do
00:34:08
they cut costs more AI and it creates
00:34:10
this downward doom loop. Now you could
00:34:13
make the same argument for any
00:34:15
technology right at one point 90% of us
00:34:17
working in agriculture. Now it's less
00:34:18
than 2%. But that happened over 200
00:34:20
years. These guys are saying this is
00:34:22
going to happen over over two year uh
00:34:25
over 24 months.
00:34:26
>> Yeah.
00:34:27
>> And what's happened is it's really cut.
00:34:29
Obviously, we talked about last week
00:34:31
it's gone after the SAS companies, the
00:34:32
software companies who they believe
00:34:34
you'll be able to replace uh Adobe,
00:34:37
Figma or Salesforce just with thoughtful
00:34:39
internal prompts.
00:34:41
>> And they it's really well written and
00:34:44
it's got great branding. They coined the
00:34:45
term ghost GDP and that is economic
00:34:47
output can grow while the benefits of
00:34:49
that growth never actually reach most
00:34:51
people. And then the other the
00:34:53
surprising the other surprising victims
00:34:56
here and this will uh come back to my
00:35:00
prediction is a lot of publicly traded
00:35:02
PE or private credit companies whether
00:35:04
it's Apollo or TPG or Blackstone have
00:35:08
been their stocks are down 20 30%
00:35:11
because they own a lot of software
00:35:14
companies and there's a fear that as
00:35:16
private credit lenders basically they
00:35:17
act like banks to companies who are
00:35:20
non-traditional borrowers
00:35:22
that a lot of those companies might not
00:35:23
be able to make good on the money they
00:35:25
borrowed.
00:35:26
>> Let me just throw in some stats for the
00:35:28
this is you're talking about Blue Owl,
00:35:30
which is a major private credit lender.
00:35:32
The company stock fell 10% on the news
00:35:34
last week because of the these these
00:35:35
sell-offs. Shares are at a 52- week low.
00:35:38
The selloff did then rippled across the
00:35:40
whole private credit sector, which
00:35:41
probably wasn't fair. Apollo, Aries,
00:35:43
Blackstone, and others sliding. Blue Owl
00:35:45
said it is not halting investor
00:35:47
liquidity. It's accelerating the return
00:35:48
of capital. I love how they do that. Um,
00:35:52
Mohamad and it's uh El Aryan, former CEO
00:35:56
of Kimco, suggested this could be a
00:35:57
canary in a coal mine moment, comparing
00:35:59
it to the early warning signs for the 20
00:36:01
2008 financial crisis. Um, so there this
00:36:04
is all linked together. This this idea
00:36:07
of worries worry for all of these these
00:36:10
things, especially private credit
00:36:11
lenders. Um, some are not as concerned,
00:36:14
some are more concerned. Um it it we've
00:36:17
got a lot of letters from people saying
00:36:19
what should they be concerned of and
00:36:20
what's going on here but they are defin
00:36:22
as you're noting they're linked correct
00:36:24
all this is linked to this spending this
00:36:26
massive spending by the tech companies
00:36:29
>> the way I would try and describe the
00:36:30
dynamic here and to understand if you're
00:36:32
at risk and where you want to think
00:36:33
about investing your own human capital
00:36:35
your own financial capital is the
00:36:36
following my mom used to run the
00:36:40
secretarial poll at Southwestern
00:36:42
University uh school of law in downtown
00:36:45
Los Angeles where I actually worked in
00:36:46
the mail room in high school. And she
00:36:48
oversaw 20 secretaries who would write
00:36:50
up the exams and the the legal research
00:36:52
of all the professors.
00:36:54
That's gone. Word processing has taken
00:36:57
that away. At the same time, my mom then
00:37:00
became an executive assistant because
00:37:01
she has good EQ and she's smart and
00:37:03
reliable and can write well. If you look
00:37:06
at truckers,
00:37:09
the AI will be a substitute for
00:37:11
truckers. Truck drivers via autonomous
00:37:14
are in real trouble. At the same time,
00:37:16
accountants, you're going to see a lot
00:37:20
of their wrote accounting work go away,
00:37:22
but they there are now more accountants
00:37:24
than ever because they move upstream
00:37:27
into things like tax, wealth planning,
00:37:29
and estate planning.
00:37:30
>> So the question is,
00:37:31
>> which presumably AI eventually be able
00:37:33
to help you with that. I don't have to.
00:37:35
I call my accountant my amazing all the
00:37:37
time for little and big things, right?
00:37:39
So presumably at someday I won't be
00:37:42
talking to anybody but
00:37:44
>> yeah I don't
00:37:45
>> seem very artisal on my part. It seems
00:37:47
like a lot of work by Caros. It's like
00:37:49
pumping gas. I kind of like
00:37:50
>> that's the right example. I use a lot of
00:37:52
lawyers
00:37:53
>> right.
00:37:54
>> I used to send every agreement I did you
00:37:56
know advertising contract whatever it
00:37:59
was a employment contract I sent to our
00:38:01
lawyers. They charge me a,000$2,000
00:38:04
$3,000 to have an associate review it.
00:38:06
Now I said to now I say to our chief
00:38:08
growth officer, no use AI, review it and
00:38:10
you do it. I trust you more than with AI
00:38:13
you're smart as a as a low-level lawyer.
00:38:15
At the same time, I'm spending
00:38:18
dramatically more on a very talented
00:38:22
lawyer at a firm that's actually called
00:38:24
Citroen, uh, on this incredibly smart
00:38:28
woman named Lucy Lee who figures out
00:38:31
everything from immigration to tax
00:38:33
strategies to my estate plan because
00:38:35
that [ __ ] is complicated
00:38:36
>> because you want her to be using AI for
00:38:38
on your behalf, right? because
00:38:40
presumably she's also
00:38:42
>> Yeah. But she can call me and say,
00:38:43
"Scott, have you thought about turning
00:38:45
this company into an escore?" So you so
00:38:47
you can in 5 years qualify for 1202.
00:38:51
She's incredibly strategic and smart and
00:38:54
charges 1,500 bucks an hour. So the
00:38:57
bottom line is wherever you are in the
00:38:58
world, do you have an opportunity to use
00:39:00
AI to go upstream or is AI basically
00:39:02
going to take everything you're doing
00:39:04
and you have nowhere to go upstream? But
00:39:07
the story of technology disruption is
00:39:10
the same and I don't think it's any
00:39:12
different here in that is it will take
00:39:15
out the boring row work and you either
00:39:17
take that additional margin and go
00:39:19
upstream and invent new jobs new higher
00:39:21
paying jobs or you get outsourced. The V
00:39:24
here or the correction might be more
00:39:26
severe and America is bad at taking at
00:39:29
at taking care of those people. Again,
00:39:30
we spend 02% on retraining. Denmark
00:39:33
spends 2% of GDP on retaining.
00:39:35
>> We don't do it well when we try to do
00:39:36
it. It doesn't quite work right.
00:39:38
>> But look at what we're in the business.
00:39:40
I would have thought, so for example,
00:39:43
I've been writing books and I thought in
00:39:44
my latest book, I'm starting my newest
00:39:45
book. I thought, oh, AI is going to play
00:39:47
a huge role. It plays a role in
00:39:50
research, in improving, and in fact,
00:39:54
>> but the writing is still
00:39:55
>> Yeah, I agree. You know,
00:39:57
>> I've been trying to make it this fetch
00:39:59
is not happening for me on AI and
00:40:00
writing. It's not. It just isn't.
00:40:02
>> But even look at our business. I would
00:40:03
have thought, okay, AI can produce the
00:40:06
scripts. AI could edit
00:40:08
>> edit and it doesn't. We we're hiring I
00:40:11
know you are at Profit Media. We're
00:40:13
hiring more people.
00:40:15
>> So I don't And we use AI. What we might
00:40:18
do, we might launch two podcasts instead
00:40:21
of one because AI will help us produce
00:40:23
more produce more data sets that we can
00:40:26
talk about.
00:40:27
>> We got to we've got to figure out one of
00:40:28
the things I was talking about this
00:40:29
morning. We got to figure out how to
00:40:31
make fetch happen with it, right? And
00:40:32
that's sort of a slower process as you
00:40:34
know. One of the things someone was
00:40:36
like, oh, is it all going to be over?
00:40:37
I'm like, imagine at 2000 I went to see
00:40:40
a Hollywood executive, big name, and
00:40:44
when the thing crash happened, he goes,
00:40:45
I'm glad that's over. And I'm like,
00:40:47
what? You have no idea what's coming,
00:40:49
right? So, I think we're in the It
00:40:51
doesn't mean that all of them are going
00:40:53
to survive, but several will. And it is
00:40:56
a significant change. And the question
00:40:58
is, was it fair for Apollo to get
00:41:00
dragged down in this blue owl thing?
00:41:02
Probably not. But that's how Wall Street
00:41:04
reacts. So, you may
00:41:06
see an enormous decline in Nvidia or any
00:41:09
of these tech companies, but are they
00:41:12
really going away? Are they is this
00:41:14
really going to decimate them? What it's
00:41:16
going to do is have every company
00:41:19
refigure where this cost structure is.
00:41:21
That's what it's doing. You're going, do
00:41:22
I need all these lower level lawyers?
00:41:24
And that is a significant problem. And
00:41:27
one of the things that it creates is if
00:41:30
we throw all these people out of work,
00:41:32
they're going to be mad. And there's all
00:41:35
kinds of social issues there and
00:41:36
political issues. And the question is,
00:41:38
what do we do about it? And that's
00:41:40
that's hard because we've tried
00:41:42
retraining and it hasn't listen, it
00:41:44
hasn't always worked. Then we spent a
00:41:46
lot of money on retraining. It can get
00:41:48
sucked up into political [ __ ] which
00:41:50
is let's give everybody jobs. Then it
00:41:52
other times it works like during the
00:41:54
depression. We have wonderful things
00:41:56
that they did during um highspeed rail
00:41:59
up and down the west and eastern
00:42:01
seabboard. There's a lot of
00:42:02
infrastructure. But both Andrew Ross
00:42:05
Orin and and Josh Brown who I've had on
00:42:08
property markets a lot said something
00:42:10
that really impacted the way I I process
00:42:13
and how I approach markets and it's the
00:42:15
following and they're right. The
00:42:17
optimists have beaten the [ __ ] out of
00:42:20
the pessimists. So the key question you
00:42:23
got to ask yourself in something like
00:42:24
this with respect to the markets is ask
00:42:26
yourself
00:42:28
>> what could go right
00:42:30
>> because there's a temptation by
00:42:31
academics and thought leaders to
00:42:33
catastrophize because you sound too
00:42:35
>> well you sound smarter when you
00:42:37
catastrophize.
00:42:38
>> It sounds scarier and more interesting
00:42:40
and you put some bar charts around you
00:42:41
talking about the zombie apocalypse and
00:42:43
a downward spiral doom loop. Well okay
00:42:45
the doom loop around moving from
00:42:48
agricultural to manufacturing to
00:42:49
service. It wasn't a doom loop. who was
00:42:51
a job creator. So, let's talk about what
00:42:53
could go right here. And this is from a
00:42:55
guy named uh uh I think his name is Ze
00:42:59
Mashowitz in open quote. Actually, the
00:43:02
scenario does involve massive job
00:43:04
creation. Starting a new business,
00:43:07
creating a new product or providing a
00:43:08
service is now a turnkey thing you can
00:43:10
launch with an agent. All sorts of
00:43:12
barriers and costs involved are gone.
00:43:14
Marketing costs drop almost to zero
00:43:16
because their agent finds you. Logistic
00:43:18
costs are almost zero. Transaction costs
00:43:20
are almost zero. Wages for anyone you
00:43:22
hire are down and their productivity is
00:43:24
way up. The cost of living is weighed
00:43:26
down, which creates more margin, more
00:43:28
opportunities for new businesses. When I
00:43:30
got out of business school in 1992,
00:43:33
there were two people that started a
00:43:35
business and the other was my business
00:43:37
partner. There was only two of us. Now,
00:43:40
I would bet a third of the grads from
00:43:42
Stern are going to try and start some
00:43:45
sort of AI company.
00:43:46
>> Same with the media people. Same thing
00:43:48
with the media people. I started off
00:43:49
having to work for a big firm. I don't
00:43:51
need to. Anyway, we have to move on. But
00:43:53
it's it's a really we should keep this
00:43:55
discussion going because it's very
00:43:56
important because I I think you're
00:43:58
right. It's easy to catastrophize and
00:43:59
you should be thinking about those
00:44:01
things. It's just a question of what's
00:44:03
the other side of that? What's the where
00:44:05
are the opportunities? Just like we were
00:44:06
talking about Netflix. Um we do have to
00:44:09
go though. Um we're going to go to creek
00:44:10
break. When we come back, we have to
00:44:11
talk about Pete Heg as threatening
00:44:13
anthropic. We'll do that briefly. and
00:44:14
also of course the Epstein files.
00:44:18
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That's rubber ik.com.
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rubric.com.
00:45:20
Scott, we're back. Anthropic has
00:45:22
rejected the Pentagon's demands for
00:45:24
unfettered access to claw as we thought
00:45:27
they might. Defense Secretary Pete
00:45:28
Hegath had given the company a deadline
00:45:30
to roll back certain safeguards or risk
00:45:32
losing a $200 million Pentagon contract.
00:45:35
Anthropic CEO Daario Emodi said in a
00:45:37
blog post that the quote threats do not
00:45:39
change our position and that the company
00:45:41
quote cannot in good conscious aced to
00:45:44
the request. Good for you Daario. Not to
00:45:48
a [ __ ] On the other hand, the AI
00:45:50
company that's been all about safety is
00:45:52
dropping his core safety pledge too. It
00:45:54
announced this week that it won't stop
00:45:56
training uh potentially dangerous AI
00:45:58
models if a competitor releases
00:46:00
something terrible or more advanced.
00:46:02
They're doing other things, but they
00:46:04
they say the move reflects the speed of
00:46:05
AI progress and the lack of federal
00:46:07
regulation, not of political pressure.
00:46:09
Thoughts?
00:46:11
>> The best performing organization in
00:46:12
history is the US military at close
00:46:14
second is the US corporation. It's
00:46:16
created more wealth in the last
00:46:20
in the last 17 years, US corporations
00:46:22
have created more shareholder value than
00:46:24
all of Europe
00:46:25
um since probably the 60s. Well, one
00:46:30
company, Nvidia, is worth more than
00:46:32
every publicly traded company in Germany
00:46:33
and Spain. Now, why is that? One, we
00:46:36
have incredible research universities.
00:46:38
We have a very risk aggressive culture.
00:46:40
And we have the deepest pools of capital
00:46:42
in the world. We have $5 million per
00:46:44
startup versus 1 million per startup in
00:46:47
Europe. And why do we have such deep
00:46:50
pools of capital? Because when people
00:46:52
invest here, they know the rules that
00:46:54
that company will have to play by. And
00:46:57
when governments start interfering and
00:46:59
picking winners and losers and saying,
00:47:00
"Oh, the rules have changed, you're
00:47:02
going to have an absence or a flight of
00:47:04
capital, which by the way has happened."
00:47:05
and this [ __ ] sclerotic blood sugar
00:47:08
level socialism where the government is
00:47:11
deciding who should get to acquire
00:47:13
Warner Brothers or that we should own a
00:47:15
share a golden share in a steel company
00:47:17
or which microchip companies the
00:47:19
government's going to invest in because
00:47:21
a failed casino owner and talk show or
00:47:24
reality show host seems to believe he
00:47:26
understands business better than the
00:47:28
private sector. And we are already this
00:47:31
isn't this isn't a theoretical
00:47:34
lesson in why I hate Trump reflecting my
00:47:37
biases. This has already happened. They
00:47:39
point to year over the last year the S&P
00:47:42
is up 14%. But it's not on a dollar
00:47:45
adjusted basis. The dollar has weakened
00:47:48
so much it's more up mid single digits.
00:47:50
And by the way every single
00:47:53
>> is up more as you noted. Every single
00:47:56
major market from South Korea to Germany
00:48:00
to the Footsie to the Cosby in South
00:48:02
Korea has massively outperformed the
00:48:07
S&P. And one of the reasons is when you
00:48:10
now invest in a US company, there's
00:48:13
unnecessary risk from the government if
00:48:16
you for whatever reason the Pentagon
00:48:18
decides that we don't like you. And
00:48:21
guess what? Andel and and Palanteer are
00:48:26
working very closely with the government
00:48:28
to help them track down spies to maybe
00:48:31
even track down immigrants using social
00:48:33
media. A lot of people would say that's
00:48:34
a violation of privacy rights. A lot of
00:48:36
people don't want to work for a weapons
00:48:38
company. Well, guess what? I love your
00:48:40
saying. You don't like Chick Chick Chick
00:48:42
Chick Chick Chick Chick Chick Chick
00:48:42
Chick Chick Chick Chick Chick Chick
00:48:42
Chick Chick Chick Chick Chick Chick
00:48:42
Chick Chick-fil-A. You don't have to eat
00:48:43
at Chick-fil-A. Maybe you don't work
00:48:44
there. Maybe you don't invest there. But
00:48:46
guess what? They get to do what they
00:48:49
want. regulated competition
00:48:52
>> and and you get to decide what business
00:48:55
you're in or not in. Just as Anthropic
00:48:59
might decide that we are not comfortable
00:49:02
working and providing data and computing
00:49:05
power to help surveil US citizens. They
00:49:08
get to make that decision.
00:49:09
>> That's right. And they get to make, by
00:49:11
the way, I think they'll do better. Like
00:49:12
everyone's like, "Oh, they're going to
00:49:13
get like blacklisted." I'm like, "I
00:49:15
think this is good for them."
00:49:16
>> It might be good branding.
00:49:17
>> It might be good branding. It might be
00:49:18
good. by the way that they can do what
00:49:20
they want and decide what they want to
00:49:22
do on everything and then you the
00:49:24
consumer as we know decide what you want
00:49:26
to do and one of the things that Hicks
00:49:29
is always like he's either doing like
00:49:30
pull-ups or this nonsense another person
00:49:34
never run a successful business just so
00:49:36
you know a lot of these these people in
00:49:38
the Trump administration never run a
00:49:40
successful business including the
00:49:41
president himself really really has
00:49:44
driven so many businesses into the
00:49:45
ground let Dario Modi do what he wants
00:49:47
and if but to like threaten him.
00:49:49
>> It's called the private regulated
00:49:51
competition and everyone has to play by
00:49:53
everyone gets to and has to play by the
00:49:55
same rules.
00:49:56
>> Elon will take it for you. Just go to
00:49:58
Elon. And by the way, the reason why
00:50:00
it's a problem is because most of the
00:50:01
people in the defense department think
00:50:03
Claude is better, right? That's the
00:50:05
issue. They don't want to give their
00:50:06
better product to do what they want.
00:50:08
This to me is ridiculous. And by the
00:50:10
way, on the safety thing, you know, all
00:50:12
these people are going to do whatever it
00:50:13
takes and they may be more safe
00:50:15
anthropic, but they will do whatever it
00:50:17
takes to compete, right? Correct.
00:50:20
>> Look, I I think the reality is, and this
00:50:22
is the danger, and this has been my one
00:50:24
of my core thesis all along, is that we
00:50:26
have fallen under the assumption that
00:50:29
every breakthrough in technology results
00:50:31
in a small number of companies that are
00:50:32
able to ring fence distribution,
00:50:34
capital, or IP and create trillions of
00:50:36
dollars for their shareholders. I wonder
00:50:39
if AI is more like jet manufacturers or
00:50:43
vaccines. And that is it will be an
00:50:45
enormous innovation that'll change
00:50:47
society for the better. I'd like to
00:50:48
think, but there aren't going to be a
00:50:50
small number of companies that capture a
00:50:52
ton of value. That the real winners will
00:50:53
be stakeholders, but those stakeholders
00:50:55
will be citizens. I think we have
00:50:57
massively benefited from vaccines. Mona
00:51:00
is now 90 down 90%. There's no one
00:51:02
company that's made hundreds of billions
00:51:03
of dollars from vaccines.
00:51:05
If you added up all of the sh all of the
00:51:07
profits and losses of all airlines and
00:51:09
Boeing and Amber and Airbus, it's barely
00:51:12
even at break even. And yet skirting
00:51:14
along the atmosphere at 710 the speed of
00:51:15
sound is in my view for my life the
00:51:17
greatest greatest breakthrough in
00:51:19
history. Now I my general impression is
00:51:22
people ask me all the time which LLM do
00:51:24
you like? I have favorites but it only
00:51:26
lasts for two weeks. I think AI is
00:51:28
putting AI out of business. And that is
00:51:30
if you look at the data,
00:51:32
>> they're all getting to technical parody.
00:51:34
It is so hard to maintain.
00:51:36
>> You know, Yan Lun said this exactly. He
00:51:37
says they're all the same. They're
00:51:39
commodities. They're commodities.
00:51:40
>> I I I use both Chad GPT and Claude. And
00:51:45
then for like 72 hours, I'll be like,
00:51:47
"Oh, Chad GBT is better. It's less
00:51:48
politically correct." And then I go,
00:51:49
"Wait, Claude is better at editing." And
00:51:53
then I go back and forth. And here's the
00:51:55
thing. I think AI is reverse engineering
00:51:56
every other LLM.
00:51:58
>> So, it's going to be about things like
00:51:59
UI. It's going to be margin compression.
00:52:01
And I wonder if we're going to be the
00:52:02
big winners.
00:52:04
>> And these companies are are these
00:52:06
companies are going to spend a massive
00:52:07
amount of time.
00:52:08
>> We're getting a lot of free. We're
00:52:09
getting a lot of free%.
00:52:10
>> All right. We do have to move on. We'll
00:52:12
see what happens here. But Pete Hegth,
00:52:13
you're a [ __ ] Um, okay. This is a
00:52:16
story I just want to say again. I knew
00:52:18
this had legs. Dozens of of FBI witness
00:52:21
interview summaries appear to be missing
00:52:23
from the DOJ's latest Epstein files
00:52:25
released. Some of those are missing
00:52:26
interviews that are tied to a woman who
00:52:27
accused Donald Trump of sexually
00:52:29
assaulting her decades ago. The DOJ said
00:52:31
in a statement that the only materials
00:52:32
we have been withheld were either
00:52:34
privileged or duplicates. This is
00:52:35
nonsense. Democrats in the House
00:52:37
Oversight Committee are now
00:52:38
investigating whether D purposely
00:52:40
withheld materials. The New York Times
00:52:42
followed this. So did NPR broke it and
00:52:45
and independent journalists broke it.
00:52:47
New York Times has followed. This is
00:52:49
really a bad cover up. What they've done
00:52:52
here is kept uh they should just put it
00:52:54
out there or investigate Donald Trump.
00:52:56
One of the others. He's certainly not
00:52:57
exonerated. By the way, other people are
00:52:59
taking a lot of fallout from Epstein
00:53:01
this week. This is not stopping folks
00:53:03
until it it's not over till it's over.
00:53:05
Bill Gates apologized to the Gates
00:53:07
Foundation for his ties to Epste and
00:53:09
also two affairs he had. He talked about
00:53:10
them publicly finally. Um he kept
00:53:13
stressing they were older. Uh just old
00:53:15
enough at least. Um, Larry Summers is
00:53:17
resigning from Harvard over his Epstein
00:53:19
connection. The World Economic Forum
00:53:20
president is also resigning. Peter
00:53:22
Mandel, former UK ambassador to the US,
00:53:25
was arrested over allegations that he
00:53:26
shared confidential government
00:53:28
information. The former Norwegian, I
00:53:30
think, prime minister was hospitalized
00:53:32
with suspicion of suicide over it.
00:53:34
There's a Colombia professor who's who's
00:53:37
who prominent um neurologist, I think.
00:53:41
Uh all these people are paying the
00:53:43
price. Let's just say either related or
00:53:46
nearby. Um Trump obviously didn't say
00:53:48
anything in the Epstein files and this
00:53:49
lengthy state of the union. I don't
00:53:51
think he can ignore this. I think this
00:53:53
is not going away. It is chasing him and
00:53:56
it will not happen until they do. As you
00:53:58
say, they have to deal with the the
00:54:01
perpetrators. And if he is one of them,
00:54:03
he he is he has the right to be
00:54:05
investigated and he should be
00:54:07
investigated. So should all of these
00:54:09
people. There's still going to be
00:54:10
repercussions for everybody in this
00:54:13
world. It's just there just is whether
00:54:14
your judgment was bad or whatever. Very
00:54:17
quick thought.
00:54:17
>> You know how I feel about this and it's
00:54:19
an unpopular take. I don't think the
00:54:21
file should have been released. I think
00:54:23
the agency that aggregated the
00:54:24
information should have reviewed it with
00:54:26
the help of outside
00:54:29
uh litigation council and they should
00:54:31
have communicated in one way to the
00:54:33
general public and that is with grand
00:54:34
jury indictments and announcements.
00:54:36
>> The administration wasn't going to do
00:54:37
that because their own president was
00:54:39
>> and so what have they done? They've
00:54:41
created weapons of mass distraction.
00:54:43
>> I don't know. I think there's
00:54:44
repercussions here. I I'm not I'm going
00:54:46
to go through
00:54:46
>> because you're focused on it there. The
00:54:49
the reality is the following. There
00:54:51
appears to be enough evidence that the
00:54:53
that warrant an investigation by and
00:54:55
again to your to to your point,
00:54:58
unfortunately, we don't have the
00:54:59
institutions to do this correctly. But
00:55:01
the way this should play out is the
00:55:03
following. The attorney general should
00:55:05
be announcing or the department of
00:55:07
justice that they are forming a special
00:55:08
counsel because there are credible
00:55:10
accusations of rape against several
00:55:14
people including the president of the
00:55:16
United States and all this other
00:55:18
[ __ ] Larry Sumner sending stupid
00:55:21
[ __ ] emails cuz he's pathetic to
00:55:23
Jeffrey Epste Epstein. I think that's a
00:55:26
distraction. Cara
00:55:28
>> again. I I know. I know you do. I don't
00:55:31
I think it shows about judgment and we
00:55:32
can decide who we want to affiliate
00:55:34
with. I think it's fine.
00:55:35
>> Okay. So, and and if if I had AI go
00:55:37
through every one of your texts and
00:55:38
emails, I couldn't reflect you as having
00:55:40
poor
00:55:40
>> judgement. Not to the extent of what
00:55:41
look Jeffrey Epstein's a unique figure
00:55:44
here. You know that. And he represents
00:55:45
something bigger, which is
00:55:46
>> did they commit crimes?
00:55:48
>> I get it. But
00:55:49
>> by going after everyone that hasn't
00:55:51
committed a crime because America loves
00:55:52
to shame people, we are losing focus on
00:55:55
the people who raped children.
00:55:57
>> Yeah. But, you know, all kinds of people
00:56:00
got in trouble because of shaming things
00:56:02
and some people got in trouble because
00:56:03
of of whatever. We've have a history of
00:56:06
this like a actors back in the 50s lost
00:56:09
their jobs. Like,
00:56:10
>> but that's fine. But that wasn't the FBI
00:56:12
investigating going on a fishing
00:56:14
expedition for real crimes and then
00:56:15
shaming. This is what's going to happen.
00:56:17
This is TMZ's wet dream. And
00:56:19
unfortunately, we're not creating the
00:56:20
incentive such that if you're a single
00:56:22
mother and your daughter ends up on an
00:56:24
island that there's le there's there's
00:56:26
less chance she'll be raped. women. That
00:56:27
is
00:56:28
>> we're not protecting children and women.
00:56:30
>> Protecting women and children. You're
00:56:31
absolutely right. I think it's hard.
00:56:34
>> Instead, every celebrity is just going
00:56:36
to start using signal now.
00:56:37
>> No. Uh I don't know. I don't know about
00:56:39
that. I don't know about that. I think
00:56:40
it it is linked to the feeling that the
00:56:42
rich are have no impunity. You talk
00:56:45
about and that's part of a trend. And
00:56:47
it's okay to have these other things,
00:56:49
but they should do I agree. I've said
00:56:51
special counsel over and over again, but
00:56:53
they were forced into it by Thomas
00:56:55
Massie and Ro Connor because they
00:56:57
wouldn't do their job and they they
00:56:59
didn't do their job because they're
00:57:00
under the thumb of Donald Trump. And so
00:57:02
if they're not going to do their job,
00:57:03
this is the only way. This is my
00:57:05
>> I get it. But this is what's happened
00:57:06
unfortunately because our institutions
00:57:08
no longer have any independence or
00:57:10
credibility. They have released nude
00:57:13
photos of underage girls. They have
00:57:16
doxed them, listed their names and their
00:57:18
addresses without their permission and
00:57:21
redacted and confused information around
00:57:23
the actual people who have evidence that
00:57:26
they're pedophiles. I mean, this just
00:57:28
couldn't be.
00:57:28
>> But they're not getting away with it. As
00:57:30
you can see, they got caught.
00:57:31
>> I think See, I disagree. I think they're
00:57:32
mostly getting away with it. I think the
00:57:34
wrong people are being prosecuted and
00:57:36
shamed in and voted off the island, and
00:57:38
the criminals are loving it because
00:57:41
there's a ton of confusion and
00:57:42
distraction.
00:57:43
>> I think they're going to get the The one
00:57:45
thing and you'll agree with this. I was
00:57:46
thinking about it the other day is if we
00:57:48
asked the general public to name five
00:57:50
billionaires.
00:57:51
>> Mhm.
00:57:52
>> I think three of them would be the first
00:57:54
one would probably be Elon Musk. The
00:57:56
second would probably be
00:57:57
>> Jeff Bezos.
00:57:59
>> See, I think it would be I think it
00:58:01
would be Bill Gates. He was sort of the
00:58:02
original billionaire and then the third
00:58:04
would be the president who calls himself
00:58:06
the billionaire president.
00:58:07
>> Yeah. So three I bet I bet those three
00:58:10
would be the three of the first five
00:58:12
that people said who are billionaires
00:58:14
they're all in the [ __ ] Epstein
00:58:16
files. So anyways the my point is you
00:58:19
can understand that the public has
00:58:21
decided that once you get to a certain
00:58:23
point of wealth you engage in a level of
00:58:27
depravity and feel that again I love
00:58:30
this saying you're you're protected by
00:58:32
the law but not bound by it versus the
00:58:35
rest of us are bound by the law but not
00:58:36
protected by it. So you can see that
00:58:39
there is a real populist uprising here.
00:58:42
But again, I I think the Department of
00:58:45
Justice is there to serve justice.
00:58:47
>> It's not this Department of Justice. If
00:58:49
there was any other Department of
00:58:50
Justice, you might expect a little bit.
00:58:53
This is not This is the only
00:58:55
>> You know what we should have, and I was
00:58:57
going to do this, but maybe we do it on
00:58:58
pivot. I wanted to get P bar on to talk
00:59:00
about the process of document
00:59:03
collection, investigation, collection,
00:59:05
and then how that information is
00:59:07
properly disseminated to the public and
00:59:09
in what format
00:59:11
>> because that's what we're talking about
00:59:12
here.
00:59:12
>> You're right. You're right. You're
00:59:13
right. It's it gets pur but at the same
00:59:15
time it's the only way given Pam Bondi
00:59:18
is the most another [ __ ] is
00:59:20
>> but Cara the Dow is at $50,000.
00:59:22
>> $50,000. She'll never live that one
00:59:24
down. Anyway, let's get take a quick
00:59:26
break and we'll be back for predictions.
00:59:28
We're going to make it tight. Okay,
00:59:30
Scott, let's hear a prediction. I I wrap
00:59:32
my predictions in what I'm doing
00:59:34
personally in terms of my own finances
00:59:36
and this is not financial ad advice. I'm
00:59:38
just telling what I'm doing. I think
00:59:40
that just as SAS companies have been
00:59:42
oversold
00:59:43
uh some of these PE or what they call
00:59:45
business development or private credit
00:59:47
companies have been oversold. So just
00:59:49
some of the ones again I'm going to
00:59:50
create a basket because I'm about
00:59:51
diversification at this at this point
00:59:54
but for example Apollo which has taken a
00:59:56
huge hit is trading at 14 to 17 times
00:59:59
earnings. So, a company with
01:00:00
double-digit earnings growth and
01:00:02
double-digit uh assets under management
01:00:04
growth, which is the capital they deploy
01:00:06
and how they make money. Uh the S&P is
01:00:09
trading at a P of 20 and Apollo's
01:00:11
trading at 14 to 17 times. TPG is
01:00:14
trading at about a one-/ird discount,
01:00:16
but u to fair value estimates, it's got
01:00:20
unbelievable fundraising, and it's
01:00:22
expanding their fee earnings. And again,
01:00:24
the price reflects pessimism
01:00:27
uh more than growth trajectory. And by
01:00:28
the way, there's absolutely no evidence
01:00:30
other than creative writing that any of
01:00:32
these companies are experienc I work or
01:00:34
co-invest with some of these companies.
01:00:37
They're [ __ ] juggernauts. They're
01:00:39
raising more money than ever.
01:00:40
>> But it's public feeling about it.
01:00:41
Investor nervous sentiment. Yeah.
01:00:43
>> But I there's narrative in their numbers
01:00:46
and I believe over the medium and long
01:00:47
term the numbers
01:00:48
>> opportunity. It's an opportunity is what
01:00:50
it is. These companies have shed between
01:00:53
20 and 40% of their value in the last 12
01:00:55
months while continuing to grow their
01:00:57
AUM and their fees. Blue Owl
01:01:00
>> um it's got a 7 to8% dividend yield and
01:01:04
you know this because of market
01:01:06
discounting private credit fears. So
01:01:08
there's a growth versus valuation in my
01:01:10
view mismatch in that all of these
01:01:12
companies are growing their assets under
01:01:14
management and their fees which is what
01:01:16
essentially is their revenues and the
01:01:18
sector has had multiple contraction or
01:01:20
compression due to private credit
01:01:22
liquidity fears because of some of these
01:01:24
creative writing projects and the in my
01:01:27
view the market pricing risks are more
01:01:29
the market is pricing risk more
01:01:31
aggressively than current earnings
01:01:32
trends justify. That's my
01:01:34
>> that's my thesis. So, let me
01:01:36
>> I'll just wrap it up. My oneline thesis
01:01:39
is the following.
01:01:41
>> Compressed multiples and and durable fee
01:01:44
growth plus strong fundraising. And I
01:01:47
know these companies, they're they're
01:01:48
really wellrun.
01:01:50
>> Yeah.
01:01:50
>> In my view, all adds up to potential
01:01:52
relative undervaluation versus the
01:01:54
broader market.
01:01:55
>> All right. I like it. That's a it's the
01:01:56
same thing you were talking about last
01:01:57
week. Okay. Look for opportunities. Just
01:01:59
so you know, next week we'll we'll be
01:02:01
talking about Hillary Clinton's
01:02:02
testifying for about Epste. By the way,
01:02:04
Bill Clinton will testify on Friday.
01:02:05
Anyway, we'll we'll be talking about
01:02:06
that, but I want to actually get our our
01:02:08
listeners to write us in. Jeff Bezos and
01:02:11
Lauren San give their own prediction.
01:02:12
Jeff Bezos and Lauren Sanchez have been
01:02:14
named honorary chairs of the year's
01:02:16
MetGal. They essentially are paying for
01:02:17
it and that's how that happened. The
01:02:19
dress code is fashion is art. Uh I want
01:02:22
to know what you think Lauren and Jeff
01:02:24
will dress up as. What art thing will
01:02:27
they dress up as? There's only two
01:02:30
things I'm certain about their wardrobe.
01:02:33
>> Boobs.
01:02:35
>> 100%. Whatever she's wearing. Both of
01:02:37
them.
01:02:38
>> She's not wearing an outfit. Her breasts
01:02:40
are and I'm here for it. I think she's I
01:02:42
think she's a beautiful woman.
01:02:44
>> Yeah.
01:02:44
>> And uh how about it? But let me be
01:02:47
clear.
01:02:48
>> Let's be fair. He's he's been improving
01:02:49
his boobs, too. But go ahead.
01:02:51
>> Let's Let's be clear. There is
01:02:54
Look, Vogue and Condast, they're smart
01:02:57
people. They invested in cable
01:02:58
companies.
01:02:59
>> Those assets, the magazines have
01:03:01
literally been just like a slow burn to
01:03:03
irrelevance.
01:03:05
>> Hurst has invested in all these
01:03:06
incredible data companies like Fitch and
01:03:08
this airline data company. They've
01:03:10
actually grown their revenues. Condast
01:03:12
has not.
01:03:13
>> But the reporting I want to see
01:03:16
>> Mhm.
01:03:16
>> The only thing I know is that is that
01:03:19
Lauren's going to have her girls in the
01:03:21
window and I'm here for it. And two,
01:03:23
somehow indirectly, there is an exchange
01:03:26
of money here.
01:03:27
>> There is. They're paying for it. Oh,
01:03:30
yeah. No, they're pay they they're
01:03:31
they're like backing. They're paying for
01:03:33
it.
01:03:33
>> Yeah. Anna Winter chucked them down.
01:03:35
They turned them upside down, got their
01:03:36
wallet, put them on the cover. They're
01:03:38
paying for the whole thing.
01:03:40
>> Put them upside down and certain things
01:03:41
moved and certain things didn't. Um,
01:03:43
>> that's correct. The money moved out of
01:03:44
their pockets and now they get the king
01:03:47
and queen. Good for them. We would like,
01:03:48
you know, I feel good about this.
01:03:50
>> I'm here for his midlife prices. I like
01:03:52
I can't help it. I like what they dress
01:03:54
I want listeners right in and we'll read
01:03:55
them. What what what art will they dress
01:03:58
up as? We need specifics. Sexy moment.
01:04:00
>> I hope we get invited. I'd like to go to
01:04:02
that. Do you think they'll invite us?
01:04:03
>> No, I don't think they will. All right.
01:04:05
We want to hear from you. Uh send us
01:04:07
your questions about business tech or
01:04:08
whatever's on your mind and whatever you
01:04:10
think Lauren and Jeff are going to wear.
01:04:11
Go to nymag.com/pivot
01:04:13
to submit a question for the show or
01:04:14
call 85551 pivot. Before we go, uh, as
01:04:19
we said, Scott and I also, besides
01:04:21
Minneapolis, uh, were both returning to
01:04:24
South by Southwest in Austin for three
01:04:26
shows on the Vox uh, media podcast
01:04:28
stage. It's a total South by Southwest
01:04:31
takeover because we are the king and
01:04:32
queen. Speaking of which, we Scott will
01:04:35
have his boobs out, just so you know, on
01:04:37
a platter in the windows. Um, uh, Scott,
01:04:41
tell them what you're doing. First, I'll
01:04:42
be doing a live taping of PropG Markets
01:04:44
with Edson on March 14th where every
01:04:46
person over the age of 40 will come up
01:04:48
and go, "I love your pocket." Is Ed
01:04:49
single? I have a daughter. Literally,
01:04:51
I'm so sick of people trying to set Ed
01:04:53
up.
01:04:53
>> Well, he's more handsome than you are.
01:04:55
>> He's very handsome. He's a nice kid,
01:04:56
too.
01:04:56
>> I mean, it's a low bar, but um and then
01:04:58
on March 15th at 10:00 a.m., I'll be
01:05:01
doing a live taping of On with two
01:05:02
special guests I'm really excited about.
01:05:04
Finally, we'll take the stage together
01:05:06
on March 15th at 11:30 for a live taping
01:05:09
of Pivot. You can touch Scott's You can
01:05:13
touch Scott's body parts. Scott Bear.
01:05:15
>> Scott Bear. Yeah. Anyway, last year's
01:05:16
pivot taping at South by Southwest
01:05:18
featured whiskey shots, partial nudity,
01:05:20
IPO predictions, and some smart
01:05:22
questions from our audience. So, we will
01:05:25
we're going to double the [ __ ] down on
01:05:27
it on that. And and you don't want to
01:05:29
miss it. Um uh Scott read.
01:05:31
>> I love Southwest. Aren't you excited?
01:05:33
>> Yeah, I'm excited. I'm excited to hang
01:05:34
out with you. I'm I'm excited. We're
01:05:35
doing a lot of traveling together this
01:05:37
year.
01:05:37
>> We are. Scott, please read who is
01:05:39
presenting it.
01:05:40
>> Part of the Vox Media podcast stage
01:05:42
presented by ODU.
01:05:43
>> The stage also features sessions from
01:05:45
Bnee Brown and Adam Grant. Everyone's
01:05:47
going to be there. We've got like a gang
01:05:49
of fantastic people. Marcus,
01:05:50
>> as long as there is there to tell me
01:05:52
that I'm okay.
01:05:53
>> I don't know if she's going to be there,
01:05:54
but nonetheless, learn more and get a
01:05:56
special discount on your innovation
01:05:58
badge at voxmedia.comsxsw.
01:06:01
That's voxmedia.comsxsw.
01:06:05
We will see you there. Okay, that's the
01:06:08
show. Thanks for listening to Pivot and
01:06:10
be sure to like and subscribe to our
01:06:12
YouTube channel. We'll be back next
01:06:13
week.
