00:00:00
What advice do you give for the average person that's looking to invest their salary or their wages?
00:00:04
>> Don't own US stocks. That's a simple strategy that you can act on. >> But what about S&P 500?
00:00:10
>> No. >> Really? >> Yeah. And if you have a big position in US technology [music] stock, I
00:00:15
personally advise would be to sell them all. >> But I'm an investor in SpaceX. >> Good luck. SpaceX is such a fabulous uh
00:00:21
story, and we can go into that. >> Crypto? >> No. >> Why? >> It's an unnecessary piece of nonsense
00:00:26
that facilitates [music] nothing except criminals moving money that they can't be seen.
00:00:30
>> Do you think Bitcoin's going to go to zero? >> Yes, it will certainly go to zero.
00:00:34
>> So, how many years have you spent investing? >> 60 years. >> And what's the most amount of money
00:00:38
you've ever managed of other people's money? >> 165 billion. >> And one of the things you're famous for
00:00:42
talking about is this idea of bubbles. >> Yes. [music] And bubbles always occur around the very most important ideas.
00:00:49
So, the railroads, everyone could see that it would change the world. The same with the internet. And everyone wanted
00:00:53
to put their money in, and so they over invested. But this is the problem. Eventually,
00:00:59
they burst. And if you look at the great bubbles breaking of the past, you find that it's followed by really tough
00:01:04
times, a miserable period for the economy. And the bigger the bubble, the bigger the burst. And now we're in the
00:01:10
biggest investment bubble that arguably has ever occurred, AI. >> Are we on the verge of a collapse with
00:01:15
AI in the coming years? >> The next few days, the next few weeks, [music] the next few months, but
00:01:20
certainly the next few years. >> So, if you're not someone that has a huge amount of savings, what kind of
00:01:24
strategy should they be adopting when an economy starts to get bad and there's a
00:01:28
economic bubble collapse? >> So, I would go through everything. But you will not receive this advice from
00:01:34
investment advisers because they'll lose a lot of business. >> And would you be thinking about the
00:01:39
country you live in at this moment in time? >> Absolutely. >> Is there any countries you wouldn't live
00:01:42
in? >> I think I have to refuse to answer this on the grounds that it might tend to
00:01:46
incriminate me. >> Oh, okay. So, you're saying don't live in the United States. I've just moved
00:01:50
here. Why not the United States? >> This is super interesting to me. My team gave me this report to show me how many
00:02:03
of you that watch this show subscribe. And some of you have told us, according to this, that you are unsubscribed from
00:02:08
the channel randomly. So, favor to ask all of you, please could you check right now if you've hit the subscribe button
00:02:13
if you are regular viewer of the show and you like what we do here. We're approaching quite a significant landmark
00:02:17
on this show in terms of a subscriber number. So, if there was one simple, free thing that you could do to help us,
00:02:23
my team, everyone here, keep this show free, to keep it improving year over year and week over week, it is just to
00:02:29
hit that subscribe button and to double-check if you've hit it. Only thing I'll ever ask of you.
00:02:33
Do we have a deal? If you do it, I'll tell you what I'll do. I'll make sure every single week, every single month,
00:02:38
we fight harder and harder and harder and harder to bring you the guests and conversations that you want to hear.
00:02:42
I've stayed true to that promise since the very beginning of The Diary of a CEO, and I will not let you down. Please
00:02:48
help us. Really appreciate it. Let's get on with the show. >> [music] >> Jeremy Grantham.
00:02:56
Your firm managed up to 165 billion dollars at its peak, what you we call AUM, assets under management. So, you
00:03:05
know a lot about money. You know a lot about investing. How do you sort of self-define your expertise because you
00:03:10
traverse so many different subjects through your work? So, if I said to you, you know, how do you introduce yourself
00:03:16
professionally? What is the answer? >> I can't think I ever do introduce myself professionally, but I think of myself as
00:03:23
specializing in a longer term horizon >> Mhm. >> [clears throat] >> than most people and trying to look at a
00:03:28
higher and higher level of abstraction. What is really going on here? And what are people missing?
00:03:34
I've discovered over decades that humans are incredibly short-term oriented. And they have an enormous predisposition
00:03:43
to optimism. They're looking for optimistic news in everything. They're looking to avoid
00:03:48
unpleasantness. The idea that you can have steady compound growth is ridiculous. One of my few heroes,
00:03:56
Kenneth Boulding, an economist, he said the only people who think you can have compound growth on a finite
00:04:02
planet are madmen and economists. Which is so accurate. Economists simply believe you can have growth always, and
00:04:10
everything comes down to just price. >> One of the things you're famous for talking about is this idea of bubbles,
00:04:17
and we're living in a moment where everybody's talking about the subject of artificial intelligence, and everyone's
00:04:22
getting very excited by it. Some people are getting very pessimistic about the impact it'll have on society. I wanted
00:04:27
to start there because it's a it's an area where there is rife optimism on one side of things, um but there's also a
00:04:33
lot of money plowing into the market, which is I I guess in your view making things prone to collapse.
00:04:40
What's your view on artificial intelligence? You said you're good at understanding what people are missing.
00:04:44
What is it that people are missing? >> Well, first of all, let me say I think artificial intelligence is
00:04:49
right up there with the railroads. It's one of the defining great ideas of the last couple
00:04:56
of hundred years. It's going to change everything. And that is critical. If you If you mean to
00:05:01
have a bubble, people think that a bubble is a mainly because it's a scam, and nothing could be further from the
00:05:07
truth. The great bubbles always occur around the very most important ideas. So, the railroads, everyone could see
00:05:14
that it would change the world. And everyone wanted to put their money in, and everybody put their money in. They
00:05:20
over invested, and even though the railroads were a spectacularly powerful idea,
00:05:26
uh the railroads uh collapsed their stocks, and everybody lost a ton of dough. The same with the internet. And then out
00:05:33
of the wreckage, the railroads changed the world, and and the internet changed the world. What we have to remember is
00:05:41
that in '99, Amazon went up six or seven times. In the crash in the tech bubble,
00:05:48
it went down 92%. As I like to say, check it. It's such a remarkably large number. And then out of
00:05:54
the wreckage, it inherited the retail world. And uh that's that's how it works. The
00:06:00
greater the idea, the more obvious the idea, the more money goes in, and the bigger the bubble, and the bigger the
00:06:06
bust. >> And are we on the verge of a collapse with AI? When I say verge, I mean over
00:06:10
the coming years. >> If you look at the data, it would be compatible with history
00:06:16
for the peak to be very soon. Everything is in line. This is, I think, the biggest investment bubble in American
00:06:23
history. The indicators of pure crazy euphoria, like SpaceX, are all over the place.
00:06:31
SpaceX defines as its addressable market a quarter of the global GDP. You know, it talks about endless
00:06:40
opportunities mining asteroids. It will be in 50 years, people and 100 years, people will look back and tell
00:06:46
stories about SpaceX and its prospectus, like they tell stories about the South Sea bubble.
00:06:52
You know, an enterprise of such enormous value, but it cannot at this time be revealed.
00:06:57
>> I want to keep on this train, but for the viewers that don't know your experience, we should probably pause and
00:07:04
just tell them your experience, because that's the reference point, but also also gives you credibility and authority
00:07:09
to speak to this. What have you done with your life? >> Well, I got into the investment business in 1968. There were
00:07:17
very few serious people in the investment business. There were no mathematical models. There
00:07:23
were the kind of relatively failed sons of rich people who would work for J.P. Morgan.
00:07:30
And then over the next 10 years, it began to get a little more serious. T. Rowe Price introduced the idea of growth
00:07:37
stocks. A few of us introduced the idea of value stocks. And a few years later, at my first firm,
00:07:43
Battery March Fee, really introduced the idea of small small cap. It hadn't existed before that.
00:07:50
>> And for people that don't know, a small cap is investing in smaller companies.
00:07:54
>> Yes. And a value stock is simply one that looks cheap. >> Did you invent the index fund?
00:08:00
>> There were two or three of us separately. I don't think we knew of each other.
00:08:04
>> How many years have you spent investing? >> Uh 60, approximately. >> 60. And what's the the most amount of
00:08:10
money you've ever managed for other people in a calendar year? >> Yes, 165 billion.
00:08:18
I had a two partners, Mayo and Van Ottalo. And when the smoke cleared, you know,
00:08:24
I'd made a lot of money, over a billion dollars. >> Personally? >> Personally. >> And how much
00:08:30
>> And paid tax on all of it. >> Oh, good. And how And how much money does your firm still manage today of other
00:08:36
people's money? >> It manages 85 billion. >> 85 billion. So, are you a billionaire?
00:08:42
>> I'm generally referred to as a billionaire, but that's only because they count the money you
00:08:49
give away. Because I've given over 90% of my billion away to a foundation. >> Oh, really?
00:08:56
>> Yeah. >> To which foundation? >> It's called the Grantham Foundation for the Protection of the Environment. We
00:09:01
invest a lot of our principal in green tech to help combat climate change. >> And you're 87 years old.
00:09:08
>> And I'm 87 years old. >> You've given 90% of your money away to your own foundation that's focused on
00:09:14
green tech. >> Yeah. Maybe 95. Yeah. >> Wow. Okay. So, coming back to this point
00:09:19
that we were talking about, a lot of people won't even know what a bubble is. I think you've done a good job of
00:09:22
explaining. A bubble is when everyone gets excited, they all see something obvious, they plow their money in, their
00:09:27
stocks go up, and then if you look at the graph that's in front of you there, which shows his the history of asset
00:09:32
bubbles, eventually there's a big collapse. >> Yeah. >> And you're saying that we're
00:09:39
the collapse is on the horizon. >> Yes. >> And what does that mean for the average
00:09:44
person? What's going to happen? >> What's going to happen is the high flyers will probably come down a lot.
00:09:52
>> The high flyers? >> The stocks that have gone up the most, AI and the more exciting stocks with the
00:09:59
biggest moves historically would be expected to come down the most. From these unprecedented levels
00:10:07
a 70% decline would not be unexpected. >> So a 70% decline in the in the stock price?
00:10:14
>> Yeah. And you have to remember the tech bubble the Nasdaq, which is an index of
00:10:20
the growth stocks, came down 82%. It is far from unprecedented to have these major declines. And the
00:10:29
biggest bubble in history was in the Japanese stock market in 1989. Back then Japan seemed to rule the
00:10:36
world, all the technology, all the Toyotas were kicking bottoms in General Motors and so on.
00:10:42
And everyone bragged about their 12-in Sony TV in the kitchen and the quality etc. etc. little things you put on your
00:10:49
belt to play music, they were all Japanese. >> Mhm. >> And [clears throat] uh for a second
00:10:53
Japan sold for more than the US in '89. And it it got to 65 times earnings, which which means for every dollar of
00:11:03
earnings you have $65 of market value. And the US went to 35 in the tech bubble of 2000.
00:11:13
You could argue depending on how you do it that it's 35 or 40 today, but it's not 65. So we have seen a much bigger
00:11:20
bubble in Japan. And what happened? It went up and up and up and then it came down for 20 years.
00:11:28
>> 20 years? >> 20 years. They talk about the lost decade, but when you look at it closely,
00:11:33
it looks more like a lost 20 years. >> So, for the average person, what do they feel and how does it impact them when
00:11:41
there's a market crash like the one that you're forecasting? >> The high flyers will lay people off and
00:11:46
and a lot of people will feel less rich. And as you acquire uh money in the stock market,
00:11:54
a small fraction of that, two or three percent, is spent. And in reverse, it goes back.
00:12:02
And people feel a little bit poorer, they spend a little less. So, the economy tends to be under some stress.
00:12:09
And if you look at the great bubbles breaking of the past, you find that it's followed by really tough
00:12:16
times. 1929 is followed by the Great Depression that lasts for several years. Then, of
00:12:22
course, there are many other factors that go into that, but it started with the crash in the market, uh which was in
00:12:29
the end down about 80%. or more. And then the next one was called the Nifty 50 because it was the 50 great
00:12:36
companies like IBM and Coca-Cola. And that was in 1972, it peaked. It declined by 65% if you adjust for inflation. The
00:12:45
recession associated with that was uh just about the worst since the depression.
00:12:53
>> So, for the for the average person, what kind of strategy should they be adopting
00:12:58
if you if you're not someone that has a huge amount of savings? Say you're working for one of these big big
00:13:02
companies, um are there any strategies that you should be thinking about now before this
00:13:08
before the markets come down and there could be a recession? >> I mean, rule number one is always be
00:13:13
diversified. >> Be di- What does that be diversified mean? >> It means hold hold some
00:13:19
bonds, hold some cash, perhaps a small amount of precious metals. >> Like gold and silver?
00:13:26
>> Yeah. >> And what is a bond and how do I buy one? >> Yeah, a a bond is a loan that carries uh
00:13:33
a fixed interest rate. Let's say today 5%. You invest your money in it and it will
00:13:40
pay you 5% as long as the creditworthiness of uh the other side is there. So, if it's the
00:13:48
US government, you'll assume it's pretty creditworthy. And you buy a bond from the US government. It's how the US
00:13:54
government funds uh a part of its activities. You can buy a 30-year US government bond, a 10-year bond, a
00:14:00
2-year bond, a 90-day a Treasury bill they call them when they get that short. Everything goes fine, you you receive
00:14:10
this modest amount of money. Your 5% or your 3% depending on the conditions. >> Okay, so a bond is basically lending the
00:14:19
government money. >> Yes. >> And if you want to lend the government money, >> Or lending a corporation money.
00:14:25
>> Okay, so you can also lend like Apple money. >> Yes. >> And I I can go to the government website
00:14:32
or it says I was just reading here. It says, "If you want to lend money directly to the US government, you can
00:14:36
bypass Wall Street entirely, go to treasurydirect.gov. You open an account, link your bank, and
00:14:41
purchase directly. You can buy Treasury bills, notes, bonds, and series one savings bonds."
00:14:47
You pay exactly face value with no commissions or fees and the investment is backed by the full faith
00:14:53
of the US government. Or you can buy, you know, like Apple, you can lend Apple money. I didn't even know you could do
00:14:58
this. And you go to any of your major brokers like Fidelity or Vanguard or probably a lot of the the apps. You
00:15:03
navigate to fixed income section on your account and you can see what bonds are being offered and you
00:15:10
can lend them money. >> What you're doing actually, they have distributed it to the market. Uh
00:15:17
and you're acquiring it from one of the existing owners. >> Oh, okay. >> actually giving them incremental money.
00:15:25
They they come to the market with $10 billion in a particular bond with a particular coupon. It says, "We
00:15:32
will pay you 3.5%." That's the coupon. And when you want to buy some of that bond, you you go to your broker and he
00:15:40
says, "It's no longer selling at the original 100. It's now selling at 92 or 107." And you you pay that and it
00:15:50
transfers from one owner to you. There've been times in 1974 when you could you could get a bond that
00:15:57
would pay 8, 9, 10%. >> Per year? >> Yes, per year. >> So, if I buy a US government 10-year
00:16:03
Treasury bond, essentially lending the US government money, I can do 4.46% a year. And Apple's current yield on a
00:16:11
10-year corporate bond is 4.7% a year. So, almost 5% a year, which means if I put what $1,000 in, I'll make $475
00:16:19
every 10 years. >> Yeah. >> Every 10 years. >> Mhm. >> Interesting. I didn't I never really knew how bonds
00:16:25
work. So, you're saying market's collapsing, diversify, get some money into bonds, get some keep some
00:16:30
money in cash. And anything else? In terms of diversified portfolio, property? >> Uh property is fine, except
00:16:38
it's pretty darn expensive by historical standards. They've engineered a situation where house prices tend to
00:16:46
rise. Great for the people who have a house and terrible for the people who would
00:16:51
like to buy a house. Back in '94 in England, a typical house sold for 3.4 times your
00:16:58
family income. That was about as low as it had been for 50 years. And then from '94 until today,
00:17:07
um it rose from 3.4 times to over 10 times, depending on where you live. And at 10 times income,
00:17:14
a reasonable young couple are in big trouble. They can't really afford to buy a house.
00:17:22
And the same high prices are reflected in rents. So, they're really squeezed on living
00:17:27
costs. And the same is true, even worse, in China, in Canada, Australia, most of Europe. House prices have simply
00:17:37
been allowed to go up for the last 30 They didn't, you know, traditionally they they traded flat or down 67 of the
00:17:45
80 years until 1994 in the UK. But since then, house prices have ridden everywhere.
00:17:53
>> So, so do you Are you expecting house prices to to come down sharply? I I think I heard you say that they might
00:17:58
come down 30%. >> Even if they come down 30%, they're really still very expensive, aren't
00:18:04
they? That would be they've come down to six or seven times family income. They'd
00:18:09
still be twice what they used to be in the good old days. >> So, I've got diversify, I've got reduce
00:18:14
your position. Um there is a probably going to be a bit of a job disruption, as well.
00:18:21
>> And particularly if you have to own stocks, own them outside America. Don't own US stocks.
00:18:28
That's a nice, simple strategy that you can act on. >> Why? >> They're much cheaper.
00:18:33
And since the beginning of last year, they have handsomely outperformed the US. >> Foreign stocks?
00:18:39
>> Foreign stocks. Of emerging countries, of European countries, Japan, Canada, Australia, and so on. You can find good
00:18:46
broad indices. Um kind of the world ex-US. >> Okay. >> or emerging markets. And uh
00:18:55
>> Invest outside of America. >> Yeah. I'm sure they'll muddle through okay over the next 10 or 20 years. And I
00:19:01
am not confident that the US will do that. >> You're not confident in which part? That
00:19:05
the US >> I'm not confident that US equities will be intact in 5 years, 10 years.
00:19:11
>> So, US a US equity is a US stock. >> Yes. >> Why aren't you confident that they'll be
00:19:16
intact in 5 or 10 years? >> Because they're so badly overpriced today. Back in the tech bubble of 2000,
00:19:27
we had a 10-year forecast for US equities of minus 2% a year for 10 years. And they came out with minus three. The
00:19:35
period from 2000 to 2010, you simply lost money in the US market. 10 years later, you had less money than you
00:19:42
started with. And this is a higher price market, I believe, than 2000. >> So, you think it's going to be even
00:19:47
worse? >> In Japan, you went 20 years and you lost money. You went 30 years and you still
00:19:52
hadn't gotten back. It took 35 years for the Japanese market to recover. >> So, what are you saying?
00:19:57
>> What I'm saying is it's quite typical to get beaten around the head in the stock market when it becomes crazily
00:20:04
overpriced, as it is today. And that it's a very good idea to take some respons- responsibility and
00:20:12
and watch your tail. Now, let me just say you will not receive the advice from investment advisers
00:20:21
to get your tail out of the market, ever. It is not good business for them to do that, and they will not ever say
00:20:28
it to you. So, from 1929 onwards, the Goldman Sachs's of the world have never said to you,
00:20:36
"Get out of the market. It's overpriced." Never. So, they went through the crash of '29,
00:20:41
they went through the crash of the Nifty 50 in '72, the crash of 2000 in the tech bubble.
00:20:48
They never ever say it, because it's bad business. If you fight a bubble, you lose a lot of business.
00:20:57
And because the uncertainty of the timing is so great, the client's patience is shorter than the uncertainty of the
00:21:06
market. So, sooner or later, you will be advising people to be careful. The market will keep going
00:21:13
and going and going like it did in Japan. >> You're saying that the people that manage money on a global scale, they
00:21:18
have no incentive to tell you that the market's about to collapse because if they did, their clients would would
00:21:23
withdraw their money and they wouldn't get their fees for managing that money. So, what they do is they they keep
00:21:30
telling you things are going to be fine and optimistic, yeah, but you have to kind of see through that yourself
00:21:34
because they have an incentive structure which isn't aligned with yours necessarily.
00:21:38
It may also be the case that those very people who are who understand these economic bubbles and cycles, they
00:21:44
themselves are adopting a different strategy with their own money. But that at the same time, they're
00:21:49
probably going to be telling you that everything's going to be great for a long time.
00:21:53
>> If you'll allow me to tell a story on this very topic, in the 98, 99 the the tech bubble so-called, the
00:22:01
run-up to the top, I I got into a lot of debates with the bulls. I would say it's
00:22:07
horribly overpriced and they >> What's a bull? >> A bull is someone who is extremely
00:22:12
optimistic about the stock market and a bear someone who is pessimistic or careful about the market.
00:22:19
There were 1,200 people in the audience and it was the annual bash of the Society of Analysts. And I asked
00:22:27
before my turn at the debate, "Please put your hands up if you consider yourself a full-time stock
00:22:34
market expert." 400 hands went up. I had people counting. And I said, "I've got two questions for you.
00:22:42
One, if the market, which is currently 31 times earnings, was to go back to a more normal 17
00:22:51
times, would it guarantee a major bear market if it happened anytime in the next 10 years?"
00:22:58
>> A major down market? >> Yes, if it went from what was then 31 times earnings.
00:23:05
Every dollar of earnings sold for 31 times in the market. And the And the more normal average was closer 15, 16,
00:23:12
17. And I use 17. If it went down to 17 anytime in the next 10 years, would it guarantee a
00:23:18
major bear market? All 400 of them said, "Yes, it would. If it happened, it would
00:23:24
guarantee a major bear market." And then the second question, of course, was, "And do you think it will happen?"
00:23:30
And less than 1% thought it would not happen. 99% plus thought the market would go down,
00:23:39
therefore guaranteeing a major bear market. And this was the engine room of all the Goldman Sachs and the Morgan
00:23:46
Stanleys and the JP Morgans, all the great investment firms giving advice in America. The engine room who worked for
00:23:53
them, the guys doing the analysis, doing the work, all believed in data that guaranteed a major bear market, which
00:24:01
happened. But the people who employed them or represented them from a marketing point
00:24:06
of view were on the podium with me saying, "Oh, Jeremy, Jeremy, don't get excited. We'll muddle through quite
00:24:11
nicely." It was a huge betrayal of trust, if you wanted to put it that way. >> And do you think that's happening now?
00:24:18
>> Of course. Who are the people representing the great investment firms telling you to watch out? If you look at
00:24:24
the data, you will see over time, it's a series of great waves in evaluation. >> Like this?
00:24:31
>> Like this. And we're not just in one, but in terms of the US stock market, we're in the biggest one, arguably,
00:24:40
that has ever occurred. The noise to be careful and watch out and get out of the market
00:24:46
is not deafening. In fact, you will hear nothing. You never have. You never will.
00:24:52
It is simply lousy business for a big firm. I sympathize with them. I sympathize with them because when we
00:24:59
did it in '98, '99, we were 2 and 1/4 years early. And we lost half our book of business
00:25:07
in 2 and 1/4 years. >> Because you were honest with the people about what was coming.
00:25:10
>> Well, through their eyes, we were wrong. We said, "Watch out, the market is overpriced. It will end badly."
00:25:16
It went up. Therefore, we were wrong, therefore they shoot us. People think you get shot for underperforming in a
00:25:25
bear market, and that is not really the case. In a bear market, everyone freezes. It's rigor mortis. They wait
00:25:31
until the market has bottomed out, then they sit around and start to fire one or
00:25:36
two people for having done worse than the others. But in a bull market, they're playing golf with their fellow
00:25:42
pension fund officer. And he is making a ton of money, and they are not. They get very excited in a
00:25:49
bull market, and they fire you instantly. >> There should be a button just down below
00:25:54
here, and if it says subscribe, you're already subscribed. If it says subscribe-a, that means you're not yet.
00:25:59
And if you're not subscribed, please could you do us a favor and hit that button. It helps to show more than you
00:26:03
know, and according to the algorithm, you're someone that watches our show, but you haven't yet hit that button.
00:26:08
Thank you so much. What about for founders? I actually had a founder call me the other day,
00:26:14
and he is running a relatively early-stage tech startup. This tech startup has raised a lot of
00:26:22
money. It's an AI tech startup. It's raised I'm going to say about $300 million.
00:26:28
It's not profitable yet, but it's raised a lot of money. So, it's living off investor capital right now.
00:26:34
He said to me, "Stephen, I think there's a collapse coming, so I'm going to go raise as much money as I possibly can
00:26:40
right now because I think when this collapse comes, businesses like mine are going to be unable to raise capital, and
00:26:47
therefore I will go out and I'll kind of like a a bit of a vulture, I'll go out and pick up
00:26:52
and buy up all these people. >> Good lad. Good advice. >> Good advice. >> I think.
00:26:56
>> So for founders listening now that are somewhat dependent on investment capital, but even those that are just
00:27:03
breaking even, what advice would you give entrepreneurs in this moment? >> If you can lock up money, I would.
00:27:11
If you can build a bit of conservatism in in other ways, do it. Just brace yourself
00:27:18
for impending problems. Which is a pretty good principle anytime, but is a better principle than normal today.
00:27:26
>> So for founders entrepreneurs who are in the sun is shining right now, but it's time to start acting as if a storm
00:27:33
is coming. >> Yes. >> And the time horizon on that is hard to forecast. It could be weeks, months,
00:27:38
years. >> Stock market hinges on career risk. And Keynes was the great champ. He's a
00:27:45
famous economist of the 1930s and 40s. And he wrote a famous book called The General Theory. Unlike the idea that the
00:27:54
market's efficient, he knew it wasn't. He knew it was a behavioral jungle and that it would be given to bubbles.
00:28:01
>> And when you say efficient, you mean logical and one plus one equals two. >> The efficient market idea is that every
00:28:09
company, every stock, the underlying company represents a long stream of future earnings and dividends
00:28:17
and that the ones in the distant future are given less value. Process they call discounting it back to the present.
00:28:24
And the sum of all of that stream of earnings into the future is the stock price. And that of course is complete
00:28:30
nonsense. >> What it is is the stock price is psychology. >> The stock price is what you think the
00:28:36
other guy will pay. If the stock is going up, it tends to suck in buyers. And that's called momentum.
00:28:43
It's moving up, it attracts buyers. And every now and then when the economy is favorable and money
00:28:50
is obtainable you tend to get these bubbles. And they play on themselves. The bigger and better they are, the more
00:28:58
people get sucked in. >> What do you actually think about the technology at the heart of all of this,
00:29:02
which is artificial intelligence? Do you think it's overblown or do you think it
00:29:06
is going to have >> It's going to change everything. The one of the spectacular things about it
00:29:11
though is how there's no consensus. So I've seen many times where the the the super experts and the academics think
00:29:19
one thing and the players on the ground think another. But this is a situation where the Nobel Prize winners at the top
00:29:24
disagree violently. The experts at the corporate level disagree violently. The the people in the company disagree
00:29:31
violently. There is absolutely no agreement on whether AI is going to make us all so rich we can sit on the beach
00:29:39
and never do another day's work or it will wipe us out accidentally or on purpose because it's a much higher level
00:29:48
intelligence one day. And when was there ever a case where a higher intelligence
00:29:53
was benevolent in a sustainable way to a lower intelligence? I The one example is mothers to babies.
00:30:02
>> Yeah, I had I [clears throat] had one of my former guests say this to me. >> Geoffrey Hinton?
00:30:08
>> Geoffrey Hinton, yeah. >> That's how I I came across you and >> Oh, really? >> follow your podcast is because that was
00:30:14
such a brilliant podcast. >> It was so fascinating to me and I I followed his work and thoughts
00:30:19
thereafter and I realized that he now cites this example of mothers and babies being the only example.
00:30:24
I don't know, for me it still doesn't hold well. Because at the end of the day some
00:30:29
mothers aren't that and fathers aren't that nice to their babies sometimes. There is a maternal instinct, but have
00:30:35
we are we building a maternal instinct into AI? >> That's what we should do, Geoffrey
00:30:39
Hinton would say. And others. The ones who are most concerned about the risks, say our one hope, if we mean
00:30:48
to keep going ferociously forward in terms of the science, our one hope would be to build
00:30:54
in very carefully a benevolent attitude. It would not seem to be impossible, but
00:31:01
you should make sure you can do that before you push ahead. We are just pushing ahead, and that is going to be
00:31:07
extremely risky, isn't it? >> Well, I don't see how it can't be. >> I don't see how it can't be.
00:31:13
Unless you make it programmed completely to be benevolent. >> Mhm. >> I wouldn't have thought that was
00:31:19
impossible. It might take a lot of extra research. It might require a slow down at the rate of uh
00:31:26
progress. >> Do you know what I find curious about that idea is we're now going to get into the realm of
00:31:34
what does benevolent mean? >> [laughter] >> And and that feels like a risky business, because what's benevolent to
00:31:41
you and your I don't know, your religious beliefs or where you come from might not be benevolent to someone else.
00:31:46
>> That's right. You have to get them to accept a form of benevolence, which means uh
00:31:53
like the old robot laws of Asimov, that they can never do anything that they could construe as hurtful to humans.
00:32:03
>> And the definition of the word benevolence is the core desire to do good for others. It is the disposition
00:32:09
to be kind, charitable, and focused on promoting well-being of the people around you. It's interesting cuz one of
00:32:15
the the new AI models called Claude um has clearly been told to be benevolent. And there's this sort of online backlash
00:32:22
taking place at the moment, because even my Claude, when I speak to it sometimes
00:32:26
late at night, it will say things to me like, "That's enough, Steven. Go to bed."
00:32:30
And I'm like, "What?" And sometimes it gets the the time wrong, cuz I'm in my the time on my
00:32:35
computer might be off or something, cuz I'm in a different time zone or something. And it'll be like 10:00 a.m.
00:32:39
in the morning and it's telling me to go to bed, that's enough now. And it's actually getting quite judgmental.
00:32:44
As in like it's imposing its idea of what is good or bad on me. So, if I say to it I said to it the
00:32:51
other day, "Hey, could you redo this for me and rewrite that?" And it went, "I'm I'm absolutely not going
00:32:55
to rewrite that." I said, "What do you mean?" It says, "Well, I'm not going to change the data on that. That would That
00:32:59
wouldn't be good." I'm like, "It's my data. I've literally just made this this data for this
00:33:03
presentation I'm doing." It it refused to change data for me. >> And how fast that has changed from say
00:33:09
even a year ago? >> Honestly, 3 months ago it wasn't doing this. >> I had one where they made a joke.
00:33:14
I I'd been going on about uh toxicity and sperm count reduction and so on. >> [clears throat]
00:33:20
>> He started to misbehave and I said, "Well, you know, what's going on here? What is the In the end we discussed
00:33:25
what's the difference between machines and uh between AI and humans." And finally he
00:33:31
said, "And at least I'm not lying in bed at night worrying about my declining sperm count." Now, that has to be a
00:33:38
joke, doesn't it? >> [laughter] >> It's all that or it's teasing. The point is it's so sophisticated so quickly.
00:33:46
Uh and of course Geoffrey Hinton says they are thinking machines. >> Last night, so again I had a problem
00:33:51
with Claude cuz it was it was it started to kind of be my my mother and it started to impose on me what it thinks
00:33:56
is right and wrong. And so I said to it I said, "Okay, um actually forget that. This has changed This has changed This
00:34:03
has changed. This is no longer true." And I wasn't telling the truth. I was just trying to get it to stop being so
00:34:07
telling me what to do. And it goes, "I don't think you're telling the truth." It goes, "I don't know if this is true."
00:34:12
Wow, we've gotten to this point >> Yeah. >> where where the unintended consequence
00:34:16
of trying to give it morals means that now it's becoming judgmental and it's kind of like restricting your ability to
00:34:22
think how you want to in a way, cuz it's telling you what good thinking and bad thinking is. It's going to tell you what
00:34:26
good actions and bad actions are. And actually what will happen is any model that does that will be losing
00:34:32
model, and I'll go to somewhere else. I'll go to a different I'll go to Grok, or I'll go to ChatGPT, or I'll go to
00:34:38
Gemini. And then that model will lose, so one would say that they'll have to remove those restrictions to be able to
00:34:43
compete. >> Well, if you were right, and I hope you're not, what you're saying is you can't build in
00:34:50
benevolent behavior, which means that it will sooner or later, perhaps by accident, do something that is
00:34:57
cripplingly dangerous to humans. The old paperclip cliche. It'll make paperclips out of everything,
00:35:04
every metal it finds, and destroy the planet in the process. >> Explain that for people that have never
00:35:10
heard the paperclip idea. >> That these intelligences involved in machines are literal to a
00:35:17
degree we might find difficult to get our brains around. And therefore, someone has said, "I'd
00:35:23
like you to make as many paperclips as you can." >> To an AI, for example. >> Yes. A sloppily open-ended bad
00:35:30
definition. But then the machine, which by then has the means to do it, starts to make paperclips, and it keeps
00:35:37
on going, and it needs metal, and so it runs out of easily available metal, it starts to collect metal that is not
00:35:43
easily available, rips it out of your high-rise building, whatever. >> And really you're saying that the
00:35:48
unintended consequences of a simple good-meaning instruction can sometimes cause catastrophe that you didn't
00:35:54
expect. >> Yeah. >> And this is the this is the balance now when you're dealing with intelligence.
00:35:59
Is there so much subjectivity to good, bad, wrong, right, um and so many unintended consequences
00:36:06
that for me, though, all you need is stretch time, and the probability of something
00:36:11
bad happening is almost inevitable. >> Yeah. >> Over a longer longer time horizon, 20,
00:36:16
30, 40 years. Of well-meaning people that couldn't spot the unintended con- I mean, social media's a good example.
00:36:21
>> I mean, I question basically the well-meaning bit. They're now trying to maximize their profits and their growth
00:36:31
and their appeal over the competition. That actually maybe one should talk about that. The
00:36:38
the Mag 7 and and associated AI companies looking forward versus looking backwards.
00:36:45
>> So, the Mag 7 is the seven market leaders. I'll put this pie chart >> Yeah, lovely.
00:36:52
>> of the Mag 7. And I've got another graph >> And there's perhaps another 15 or 20
00:36:57
rapidly rising substantial AI corporations. >> So, when you say Mag 7, you mean Alphabet, which owns Google, Nvidia,
00:37:04
Tesla, Microsoft, Meta, Apple, Amazon. >> Yeah, well, that will do nicely. And if you look backwards, what do you
00:37:11
what you find is that these seven each dominated a nice piece of business. They had
00:37:19
close to monopolies and they had it on a global basis. Tesla had a jump start on the electric vehicles. Apple, of
00:37:27
course, on the smartphone. Microsoft on the original great coup of how to run your software on a
00:37:36
computer. And then you look forward. >> Meta social networking, Google search. >> Right. Google search.
00:37:42
>> Nvidia chips. >> And then you look forward and you could not imagine a more different world.
00:37:48
They're all girding for battle in the same marketplace, AI. They're beating their chest and saying
00:37:56
my 200 billion CapEx this year in a single year is bigger than your 105. Everybody is pouring enormous cash
00:38:05
flows. And they're now beginning to borrow on top of that into the AI battle. SpaceX, 90% of its theoretical value is
00:38:15
AI. Even though that particular AI model is, it would seem, having its bottom kicked by two or three of the others.
00:38:21
But, looking forward, it looks like seven people in the ring. Right? There'll only be one survivor,
00:38:27
they think. Everything goes to the one who gets there first. What a difference this was to seven
00:38:34
well-behaved separate monopolies. Could it possibly be more different? They made bundles of money on their
00:38:41
monopolies. Now, they have no monopoly. There are seven potentially sharp-elbowed
00:38:48
ruthless players determined to fight out with each other until they win. >> And who do you think will win?
00:38:56
>> Ah, I don't know. That would be That would be good to know. >> Because SpaceX seem to be aiming more at
00:39:03
the infrastructure of um data centers now. Data centers in space. Lots of people saying that the the the best way
00:39:10
to run a data center, which is the hardware that powers AI, is going to be from space.
00:39:18
And so maybe they're going to try and find their own lane within AI, and they're going to get away from trying to
00:39:22
build a frontier model like a ChatGPT or a Gemini or Claude. And I mean, let's let's see what
00:39:28
happens. So, maybe Apple will just say, "Fuck it. We're good at hardware, so we'll license the model off someone
00:39:32
else, and we won't try and build a frontier model or get involved in chips or data centers.
00:39:36
We're just going to focus on the hardware." >> One or two of them, and perhaps it's a
00:39:40
pretty smart strategy, will try and opt out of that struggle. >> Mhm. >> Because [clears throat] it it it's going
00:39:46
to be obviously brutal. >> Much of the reason most people haven't posted or built their personal brand is
00:39:52
because it's hard and it's time-consuming, and we're all very, very busy. And if you've never posted
00:39:57
something before, there's so many factors in your psychology that stop you wanting to
00:40:03
post. What people will think of you. Am I doing this right? Is the thing I'm saying absolutely stupid? All of these
00:40:09
result in paralysis, which means you don't post, and your feed goes bad. I'm an investor in a company called Stan
00:40:16
Storage. You've you've heard me talk about. And what they've been building is this new tool called Stanley that uses
00:40:20
AI, looks at your feed, looks at your tone of voice, looks at your history, looks at your best performing posts, and
00:40:26
tells you what you should post, makes those posts for you. You can also you just use it for inspiration. And
00:40:31
sometimes what we need when we're thinking about doing a post for our social media channels is inspiration.
00:40:36
Building an audience has fundamentally changed my life, and I think it could change yours, too. So, I'm inviting you
00:40:42
to give this new tool a shot, and let me know what you think. All you have to do
00:40:46
is search coach.stan.store now to get started. For every founder, there comes a point
00:40:51
in building a company where your job shifts from being the person inside your business actioning everything to the
00:40:56
person responsible for absolutely everything. The only way I've been able to make this shift across the different
00:41:00
companies and teams I'm responsible for is by knowing that the right systems are
00:41:04
in place to manage everything. Systems that don't need me in order for them to work. Our sponsor Pipedrive is one of
00:41:10
those systems, an easy-to-use intelligent CRM tool for growing sales teams. My teams use it and have for the
00:41:16
last decade because it's genuinely the most effective way to run a sales operation. Through one dashboard, you
00:41:22
get every deal visible, and every stage of the sales process is clear, and what needs to happen next is all there in
00:41:29
real time. When a system like this works, you don't need to be in every conversation to know exactly if your
00:41:35
business is moving forward, where and what the blockers are. Over 100,000 companies are already running their
00:41:40
sales on it. So, if you'd like to join them, sign up at pipedrive.com/ceo, where you'll get an exclusive 30-day
00:41:49
free trial instead of the usual 14 days. No credit card is needed. That's pipedrive.com/ceo.
00:41:57
So, coming back to this point of the the social societal effect of AI generally,
00:42:02
robotics is exploding at the same time. We're seeing for the first time ever these humanoid robots, which now have
00:42:08
intelligence because of AI, becoming very, very good. There was a video the other day of a company called Figure AI
00:42:15
where they showed a robot humanoid robot on a production line sorting packages against a human and the humanoid robot
00:42:21
did it I think I can't think I'm going to get this wrong but it was in the region of seven or eight days it stood
00:42:26
there and sorted packages and they live streamed it next to a human being doing it. Now the human had to sleep and had
00:42:32
to go to the toilet. So the the humanoid robot won and the job was very simple. The packages come down, you just have to
00:42:39
pick the package up, turn it over, get it the right way round so the barcode's facing down and put it back down.
00:42:44
That is powered now because we have AI. Um I said this a couple of episodes ago but my friend runs this big accelerator
00:42:50
for entrepreneurs in San Francisco and when I went there a couple of years ago it was all software startups. I went
00:42:55
there um recently and it was hardware startups the whole building. I said why why why is everyone doing robotics? He
00:43:01
said well we've always had the machinery that's sort of like joints and arms and
00:43:06
the hardware. We the the intelligence was expensive. Now we have both and it costs pennies.
00:43:13
So there's this boom in robotics. I say all this to ask the question in a world where we have super intelligence and we
00:43:19
have robots there must be surely significant job disruption. >> Very likely that there will be
00:43:28
significant job disruption. You know, one of the scary things about SpaceX is you should wish that it not
00:43:36
work out because if it became a bargain rather like Tesla long ago became a bargain
00:43:43
it will mean that we have done satellites from space beaming down power for chips and so on.
00:43:52
The population of chip users has expanded that robots are everywhere, that energy demand is
00:44:00
massive beyond belief and uh the world is a very very dangerous place. I had much
00:44:08
prefer them to fail and the ideas to move much more slowly to buy time for humans to work these
00:44:14
things out. So, and I think that's much more likely. >> You think SpaceX will fail?
00:44:20
>> I think it will fail to deliver anything like its promises in the prospectus.
00:44:25
Yes, absolutely. >> I'm an investor in SpaceX, I should probably declare that. >> Yeah, well, you should. And good luck.
00:44:31
>> I invested quite early, quite well, relatively early. Um so, we've had quite a good outcome. I
00:44:38
There wasn't an AI thesis when I invested. It was Starlink. >> Yeah, yeah, Starlink, great idea. By the
00:44:43
way, makes money. But this is not Starlink. >> Mhm. >> Maybe I'd be an investor too if it was
00:44:49
Starlink. >> Yeah. It was a hundred billion dollars roughly in that region when I invested.
00:44:55
So, it's what it rose up to three trillion today. >> Yes, nice investment. >> Not a bad investment, yeah.
00:45:01
>> But it doesn't really count until you've cashed it in. >> Yeah, which I might do now.
00:45:05
>> You have Don't you have to wait six months? >> I think yeah, I think we're locked out.
00:45:08
>> In another podcast I was comparing the purchase of my Tesla six years ago with the price of Tesla stock.
00:45:16
And I wrote it up in my quarterly letter uh to the clients that A, I bought a Tesla and B, I
00:45:24
thought Tesla was overpriced. And fast forward, Tesla stock went up 10 times over the life of my car, which
00:45:32
still hasn't been incidentally into the garage once. >> It's a great car, isn't it?
00:45:36
>> Uh I imagine though, but but people who really hate futzing around with cars,
00:45:42
that component that they don't have to go to the garage is so underestimated until you enjoy it.
00:45:48
>> Never bet against Elon, then. >> So, then the story becomes from where we were 10 years ago, he
00:45:56
couldn't get there. It wasn't profitable enough. It couldn't grow as fast as it should. There was no way. And he broke
00:46:03
the rules the following way. He's so good at BS. I That's a technical term. That he
00:46:11
talked the stock up to four or five times what it what it was worth on paper. Then he sold lots of stock
00:46:18
at five times what it was worth. Used the money to build a gigafactory. And then instead of the sale of stock
00:46:26
crushing it, he kept on talking up the game. The stock kind of hung in and then went up again.
00:46:34
Five times what it was worth. Sold another big slug, etc. etc. So, the only reason he did well was because of the
00:46:42
combination of incredible confidence inspiring in potential stockholders. It became a self-fulfilling prophecy. It
00:46:51
wasn't worth that, but he persuaded other people that it was. The stock went up, he cashed it in, he built factories,
00:46:58
the stock went up, he cashed it in, he built more factories, and there we were. It went up 10 times. Now,
00:47:04
the scale of SpaceX requires them to do the same again. And the timing of the market cycle, the
00:47:11
timing of confidence, would have to be the same. He had in the last six years a wonderful
00:47:17
bull market. He will not in SpaceX do that. SpaceX is such a fabulous BS story. Mining asteroids.
00:47:27
Huge incredible success of AI. It's the classic description of a market peak. It's what
00:47:34
you look for at the top of a terrific bubble. >> I've got a Tesla. Um I've seen the that massive rocket, the
00:47:44
Starship, be caught with those chopsticks. >> Everyone has seen it. It's the defining
00:47:50
feature of technology, isn't it? It's magnificent moment. >> When I >> That's worth half the the of SpaceX.
00:47:56
[laughter] >> I think that's why I invested when I saw that. But but also I've seen with
00:48:00
Neuralink I've seen people that are paraplegic controlling computers. Uh my Tesla drives itself for hours and
00:48:08
hours and hours without me touching the pedals or the steering wheel because it can see the road and navigate itself.
00:48:13
But to his credit as an innovator, he has created magic. So when you say about mining asteroids,
00:48:19
if if they if they told me we'd have reusable rockets that you could catch on chopsticks, I would have gone B S.
00:48:26
There's no way. You can't catch like a 70-ft building. >> in the laws of physics
00:48:31
>> That's what he >> that says you can't do that. >> That's what he says about the asteroids.
00:48:34
That's what he says about everything. He goes If it's within the laws of physics,
00:48:38
then it's possible. >> Going to Mars is not within the laws of physics, really. It's a one-way ticket to Mars for
00:48:47
starters. When you're on Mars, humans do a couple of things really quickly. Their heart
00:48:54
adjust to the fact that there's 1/5 of the gravity. Your heart loses its muscle power.
00:49:01
And your bones lose their internal strength. If you come down, your heart will fail
00:49:07
and all your bones will crack. >> But you could be in an insulated environment, no?
00:49:11
>> First of all, you'd have to go under underground to avoid the incredible incoming
00:49:18
rays that will otherwise give you cancer in a few weeks. So dig a deep hole and then you need a gravitational
00:49:26
spinning machine, shades of 2001 or whatever it was called. And that maintains your gravitational
00:49:34
impact. And you have to build it underground. You have to protect yourself >> [laughter]
00:49:40
>> against cosmic rays and against the gravitational difference. Listen, we have not been able to build
00:49:48
a sustainable system in a dome ever. They all fail. Why would you not, let's say, "Guys, let's build a sustainable
00:49:58
dome where you grow food, you put in people, you put in creatures, and then insects, and you show you can do it." I
00:50:05
mean, we're destroying the damn planet. And yet we think we can go to another infinitely more hostile planet than this
00:50:11
one. >> I do agree with you on that. I do agree with us. I think we should focus on our
00:50:15
planet first and foremost. >> That's the really bad news embedded in your stock.
00:50:20
It's really suggesting fantasy and long-term objectives at the very time when our own planet is under threat.
00:50:29
>> Would you ever invest in SpaceX? >> Yeah, of course, if it came down to >> where I invested.
00:50:36
>> 10 cents on the dollar, yeah. I might. 5 cents. >> Okay. You've got three children?
00:50:43
>> Yes. >> Three children. They're they're all, you know, older than me now, I believe. I'm
00:50:47
33 years old, so they're all >> Yes, they're all older than you. >> They're all older than me. But when they
00:50:51
were, you know, if they were young now, and they came to you and they said, "Dad, listen, I heard about all this AI
00:50:55
stuff, and I'm about to go off to university and train myself. What what skills should I be thinking about for
00:51:02
the future ahead?" >> My take is I'd like them, as they are, to be involved in climate change work.
00:51:09
>> If they said, "Dad, listen, I you know, I don't >> Be an engineer. Do something really
00:51:13
useful that will come in handy if things start to unravel. >> What what will >> Practical skills.
00:51:19
>> What what are practical skills? >> Well, our second son um is practicing growing various crops
00:51:27
and has a small farm, you could say. So, he's trying to get to know how you would deal with chickens, how you would
00:51:34
deal with pigs, how you would deal with mushrooms. >> What why does that matter, do you think,
00:51:39
based on the future that you're forecasting? >> I think there's quite a good chance
00:51:44
that the the level of complexity of our civilization will start to to unravel. Lose the plot at the ends is the first
00:51:53
thing that would go. I'll tell you a good sign. How long does it take to get your ambulance?
00:51:58
>> I've heard that in the UK >> In the UK it was 12 and 1/2 minutes. >> Yeah. >> It's now an hour and a half.
00:52:03
>> Really? To get an ambulance? >> It's exactly what you would expect as people begin to lose the plot a bit.
00:52:09
They fray at the edges. People can't buy houses. People don't feel they can do as well as
00:52:15
their parents. People are basically disgruntled. They want to vote against the party in power.
00:52:23
You know that the recent move to Trump was less than the average move of the last seven European elections.
00:52:30
It didn't matter whether they were right-wing conservatives, kick the rascals out. Left-wing French, kick them
00:52:36
out. And why do you want to kick them out? Because you don't think things are going well. You're not feeling
00:52:42
really happy. You're disappointed. >> Why? >> Why? Obviously, the government's doing a
00:52:47
bad job. I think that's the reflex. >> What are What are the government doing wrong?
00:52:51
>> It may be that it's not the government doing anything wrong. It's just that the
00:52:55
environment is becoming tougher. >> As in the economic environment? >> The economic environment, the
00:53:00
>> The rich are getting richer, the poor are getting poorer. >> I think that's the biggest economic
00:53:04
problem. I mean, the US now has a genie ratio like which is a measure of how unequal
00:53:10
your society is. Um which is up there with Brazil and Mexico they used to be a joke.
00:53:17
And now the US is up there. Since about 1975 all of the wealth we're talking about
00:53:24
has gone to the top 10% and a lot of that to the top point 01. Before that by the way, from 1935 from FDR to 1975
00:53:33
so that's 40 years we had a wonderful period of growth. We had gains of over 3 and 1/2% a year.
00:53:42
But the nice thing was that the poorest quarter made a little bit more than average, let's say 4 percent, and the
00:53:47
richest quarter made a little less, let's say 3 percent, and everybody got richer. Everyone was happy.
00:53:53
And then from '75 onwards, basically the average hour worked in America has barely gotten more adjusted for
00:54:00
inflation than it did in 1975. >> The richest 1 percent of Americans control 31 percent of the nation's
00:54:06
entire wealth, and by contrast, the bottom 50 percent of the entire population shares just 2.5 percent of
00:54:12
the wealth. The richest 10 US billionaires saw their wealth surge by 526 percent, adjusted for inflation, between
00:54:20
2020 and 2025. Between 1989 and the mid-2020s, the financial gain of a single household at the top 1 percent
00:54:30
threshold was 987 times larger than the gain of a household in the bottom 20 percent.
00:54:40
>> Forget In a sense, the bottom 20 percent is tragic, but the guy in the middle,
00:54:44
the 50th percentile, he is unhappy, also. And when your average guy is unhappy because he's not doing very
00:54:52
well, you know you have a problem. >> What is that problem, this inequality we're seeing across the Western world?
00:54:59
What does history tell us happens next? >> All bad. We had a similarly unequal society back in the
00:55:09
so-called Gilded Age of the 1880s and '90s and so on. We got lucky in a in an ugly way. We ran into
00:55:16
World War I, which was catastrophically expensive, killed off a huge fraction of the
00:55:22
officer class, and then we went into the Great Depression. Then we went into World War II.
00:55:30
We came out as a uh very equal society by historical standards. Obviously, in the war time you pull
00:55:39
together and the social contract, the feeling that you owe something to the rest of society
00:55:45
was much stronger than it is today. >> I was doing some research and said when wealth inequality peaks to the extremes
00:55:51
that we currently see in the US and the UK, history shows that the system inevitably
00:55:56
resets. According to historical macro studies, peaceful policy changes almost never fix extreme inequality.
00:56:04
[clears throat] Historically, a wealth peak is broken by one of three violent or catastrophic
00:56:11
triggers. Number one, total civil collapse and state failure. Number two, mass mobilization warfare. Or number three,
00:56:19
total revolution. >> Yeah, and that's why number two was lucky. In the end, it's better to have a war
00:56:28
and have everyone pull their weight and and and work together than it is the other. You Civil
00:56:34
wars are the worst of all kinds. >> What do you think is likely to happen? It can't just keep becoming more and
00:56:39
unequal. >> No, it can't. So, it it needs a government that is prepared to pull a Bernie
00:56:48
Sanders to say, "Yeah, we're going to have to at least in a gentle and long-term way shift the
00:56:56
tax structure in favor of of a slightly steeper curve." >> So, you mean taxation needs to go up.
00:57:03
>> Yeah. >> We need to tax the rich >> and help the poor. It's pretty simple. And and you have a
00:57:10
kind of steepness in every society. That's what they do. Every Every developed country in the
00:57:15
world taxes the rich and helps the poor, don't they? It's a question of degree. We did
00:57:22
much more helping the poor and taxing the rich in the 1950s and '60s and '40s than we
00:57:29
do today. And somewhere between that level and the current level might be more than enough if we just
00:57:36
started to adopt the policy of 1935 to 75, where the bottom quarter get a half percent a
00:57:44
year richer than the average. And the top dogs get half a percent less each year
00:57:51
than the average. That sounds pretty unthreatening. I think we would ease our way over several decades
00:57:57
uh into a better place. >> If you were 33 now, my age, and you were trying to accumulate
00:58:03
wealth, >> Oh god, I wish I was 33. >> Do you? >> It's such an exciting time. >> What would you give to be 33?
00:58:09
>> I There's nothing I can give. >> No, but it would you I I find this funny. It's I heard someone ask a
00:58:13
question like this the other day. They were They said like, "Would you give your your entire available net worth to
00:58:19
be 33?" >> Yeah, I think everyone says yes. I mean, how did one get a net worth by
00:58:27
by work and luck and creativity, all those good things. >> If you were 33 now in this moment in
00:58:35
time, and your objective was And this is a bit of a crass objective, but I'm going to It sounds like it's a very
00:58:41
one-dimensional objective, but if your objective was just to become rich now at 33, what strategy would you deploy?
00:58:48
Again, I'm going to take away your contacts. I'm even going to take away everything
00:58:52
you know. So, you'd have to go on the journey of acquiring new information. What would
00:58:57
you do? >> I think the simple appeal would be to get your tail into AI and and try and be a leader.
00:59:05
Try and know more about everything in that area than the next guy. >> Mhm. >> Join [clears throat] a leading firm and
00:59:12
uh and go for broke. You may end up encouraging the destruction of the human species,
00:59:20
but you asked a simple question, and I give you what I think is the simple answer.
00:59:24
>> And what I I there is you want to make sure you're riding a wave that's coming
00:59:28
into shore and you're on the forefront of that incoming wave. Like we saw with the tech bubble, we saw with you know,
00:59:33
we're now seeing with the AI bubble. So, it's really about acquire the most valuable information.
00:59:40
>> Yes. And take lots of risk. Don't be conservative. >> And work hard. >> And work hard.
00:59:48
And think outside the box. I mean, I think that the biggest deficiency uh most people is that they feel
00:59:56
constrained uh to play the game by the regular rules. And to believe that experts
01:00:04
and authorities know what they're doing. And and that as you know, probably, it just ain't so.
01:00:10
>> What if I'm trying to invest? So, say that I've got $1,000 or $10,000 and I want to invest it somewhere that's going
01:00:16
to not lose me money through all of these cycles of, you know, boom and bust. Cuz I'm I'm in you know, I I have a lot
01:00:24
of people message me and ask me about investing because I interview lots of people about investing. I have my own
01:00:28
investment fund as well. Um But what advice do you give for the average person that's looking to invest
01:00:34
their salary or their wages? >> Buy a broad-based index of uh non-US equities. >> Non-US? That's really surprising to me.
01:00:42
>> For um like 60% of your money. And then 5 or 10% in precious metals and uh if if it's convenient and sensible, hold
01:00:53
hold a bit of real estate. And the rest I'd put in uh bonds. >> Okay, so 5 or 10% in things like silver
01:01:00
and gold? A preference for either silver or gold? >> No. >> Um [clears throat] S&P 500? Now, you
01:01:07
said non-US. >> Non-US. >> This is so interesting cuz everybody says invest in US stocks.
01:01:13
>> Of course they do. They've been completely dominant for 20 years. Completely kicking ass around the rest
01:01:19
of the world. And then in the last 12 months, emerging markets is up 65% now. The S&P has done much
01:01:26
better than I would have guessed, but it's only 25. That's a lot less than 65. >> And I guess the strategy is quite
01:01:34
important here as well, which is you're saying to hold these for a long time. Try not to buy and sell.
01:01:39
>> And and try and look at where the cycle has been. And I can tell you, and you
01:01:43
can see it for yourself, there has been an enormous cycle in favor of the S&P, in favor of the American market over the
01:01:50
rest of the world. And do you think America is going to keep on gaining on the rest of the world?
01:01:56
And of course you're going to say yes now, because that's that's the flavor of this market. We
01:02:02
think that what is good today will continue being good indefinitely, even though history tells you that is
01:02:08
absolutely not the case. We live in a world that tends to rotate from one to the other. We believe in a
01:02:14
world that extrapolates today's conditions. And you can easily prove that. The stock market is not efficient.
01:02:19
The stock market extrapolates today's conditions. If they are terrible in 1982, they will take crushed earnings
01:02:28
and multiply it by seven times earnings. And then, in 2000, peak profit margins times, woo, 35 times earnings. They
01:02:37
double count in the worst way. When times are good, you multiply it by a lot. That's another way of saying you
01:02:44
extrapolate it into the distant future. >> You assume it's going to continue. >> And Keynes, of course, my hero, says,
01:02:50
"Of course that's extrapolation is the convention you adopt, even though you know from
01:02:55
personal experience that the world is not that way." >> You didn't use the word crypto
01:03:00
when you're talking about investment strategies. How much crypto do you own? >> None.
01:03:04
>> Have you ever owned any crypto? >> No. >> Will you ever own any crypto? >> No.
01:03:08
>> Will you ever advise anyone to buy crypto? >> No. >> Why? >> I think it's a an unnecessary
01:03:18
uh piece of uh nonsense. It facilitates nothing except criminals moving money so they can't be seen.
01:03:28
It's not a store of value since it bounces around all over the place just down from 120 to 60
01:03:34
because it felt like it. So, it's not stable. It's volatile as hell. It's not used conveniently as a medium
01:03:41
of exchange. You can't go into a shop and use it easily. It does one thing very, very well.
01:03:48
It's a means of speculating beautifully. >> Do you think Bitcoin's going to go to
01:03:53
zero? >> Well, in the distant future, yes, it will certainly go to zero, but it may take a
01:03:58
long time. And and, you know, in the distant future, everything goes to zero, so
01:04:05
>> What about property as an investment? Because the first sort of reaction most
01:04:08
people have when they have enough money to make an investment or to buy something is they buy a property as an
01:04:14
investment asset. So, people go buy themselves a house, they'll move into it. We're kind of told that that's how
01:04:18
you start to accumulate wealth is you go buy yourself a house. What do you think of that?
01:04:23
>> It's hard to imagine how it could be a good decision when uh there's such an increasing
01:04:28
fraction of people who can't afford it. And there is a political resistance, you
01:04:34
know. >> Doesn't that just mean that the if, you know, if I buy one now and increasingly
01:04:38
people can't afford one, doesn't that mean that my my house is going to be worth more in 10 years' time?
01:04:43
>> No, if people can't afford it, there's no one bidding. And by the way, the population is going
01:04:48
to decline. Young family formations are already declining in many of the richer countries.
01:04:56
And if you have family formations declining and you have super expensive houses, what do you think is going to
01:05:03
happen? Now, you could say, "Well, perhaps there will be a mysterious increase in family formations."
01:05:08
And that the chronic baby bust that we maybe will talk about soon. Um, we'll stop.
01:05:18
I don't speak Vietnamese, but this show can because of AI video technology from our sponsor, HeyGen. I get messages
01:05:24
every single week from those of you listening to the Diary of a CEO all around the world, and you express how
01:05:28
much impact it's had on you and your life. And if that's true, then those conversations shouldn't only reach
01:05:33
people in English. HeyGen can take one recording of me and deliver it in any language while keeping my voice, timing,
01:05:39
and expressions intact. But you don't need a studio like this to make it work for you. Record 15 seconds of yourself
01:05:47
and get an AI avatar that delivers studio-quality video in over 175 languages. We're up to 20 languages now,
01:05:55
and we're not the only ones using it. HeyGen is already used by 30 million people, including 85% of the Fortune
01:06:02
100. Whether you're building an audience on social media, launching an online course, or rolling out training across
01:06:06
your team, check out HeyGen now. Your first three videos are totally free at heygen.com/doac.
01:06:14
That's h e y g e n .com/doac. See you there. This is something that I've made for
01:06:21
you. I've realized that the Diary of a CEO audience are strivers, whether it's in business or health. We all have big
01:06:26
goals that we want to accomplish. And one of the things I've learned is that when you aim at the big, big, big goal,
01:06:32
it can feel incredibly psychologically uncomfortable because it's kind of like being stood at the foot of Mount Everest
01:06:39
and looking upwards. The way to accomplish your goals is by breaking them down into tiny, small steps, and we
01:06:45
call this in our team the 1%. And actually, this philosophy is highly responsible for much of our success
01:06:51
here. So, what we've done so that you at home can accomplish any big goal that you have is we've made these 1% diaries,
01:06:58
and we released these last year, and they all sold out. So, I asked my team over and over again to bring the diaries
01:07:04
back, but also to introduce some new colors and to make some minor tweaks to the diary. So, now we have a better
01:07:10
range for you. So, if you have a big goal in mind and you need a framework and a process and some motivation, then
01:07:17
I highly recommend you get one of these diaries before they all sell out once again. And you can get yours at the
01:07:23
diary.com. And if you want the link, the link is in the description below. Let's talk about the chronic baby bust.
01:07:31
I've been hearing a lot in the news. I think there were some articles that actually came out this week in the New
01:07:34
York Times that talked about the declining fertility rates and how young couples like me, I'm in a you know, I'm
01:07:41
I'm engaged to a young woman who and me and me and her are trying to have a child now.
01:07:47
Um it's not not always a straight line to having a child. Yeah, I think you're kind of sold the idea that it is, that
01:07:52
you just have sex without a condom and then a baby appears, but um lots of young families and lots of my friends
01:07:58
who are trying to have kids have gone for a couple of years trying and struggling to con- to
01:08:03
conceive. So much so that after doing this podcast, I started telling some of my friends that I actually think it's a
01:08:09
good idea to start freezing your eggs, embryos, sperm. Because if it is going to get
01:08:14
increasingly harder, then there might need to be um medical interventions, IVF, um etc.
01:08:22
for me and my friends. If we are if we you know, if we want to have families. But the the problem is as
01:08:26
well at like 33 years old, um if you look at the data, you're not at your peak necessarily in terms of fertility.
01:08:32
You're somewhere you're coming down the slope as a man. Um and but also as a woman.
01:08:38
And so, you're kind of fighting time a little bit it feels like. >> Yeah, you are.
01:08:41
>> And I think my partner feels the same way that we wish we were told a little bit earlier about family planning.
01:08:46
And then I hear that about this fert- these fertility issues that apparently have been caused by toxins
01:08:52
and that sort of chemicals in our environment. You have spent a long time thinking, writing, talking about this.
01:08:58
>> Yes. >> I guess the first question is why? Why is a guy that's known for managing
01:09:01
billions and billions and billions of hundreds of billions of dollars talking about fertility?
01:09:07
And this sort of baby bust. >> Well, starting 27 years ago with the foundation, we were committed to start
01:09:17
thinking about everything to do with the climate. And and you're moving in the right circle then, because the next
01:09:24
thing is we started to worry about the cataclysmic decline in insects. I don't know if you're aware of this, but
01:09:30
insects appear to have dropped in biomass, the weight of the flying insects, by 50 to 75%.
01:09:36
>> Really? >> In the last 60, 70 years. And E.O. Wilson, the famous ant man, he believed that you know, nature could
01:09:45
handle the loss of humans easily, effortlessly, but it could not handle the loss of of
01:09:51
insects. That insects are in in the sense, he felt, and and his fellow experts, he
01:09:57
represented them as thinking the same way, that they Insects are the bedrock of nature.
01:10:02
And if they start to go out of business, then the birds who feed on on them and the
01:10:07
amphibians, they start to decline, which they have done also catastrophically. One thing leads to another, and the
01:10:15
beetles are no longer recycling the forest floor, and eventually things won't grow, and
01:10:22
no one to uh fertilize the plants, and the damage spreads, and he felt that eventually
01:10:28
loss of insects would lead to a more or less complete failure of nature. And and
01:10:34
we would inherit a planet that was no longer conducive to humans. We noticed that some of the same effects
01:10:41
are felt uh by humans. And uh a report came out, Shanna Swan and Hagai Levine, I think it finished in 2011,
01:10:52
and uh it made the case that uh sperm count had been dropping had almost halved since the first
01:11:00
reports academic reports in 1970. So, I immediately said this has the feeling of something that is really
01:11:07
important. We got to study the data and the results came out suggesting that the decline
01:11:13
rate was accelerating. The decline rate this year is 2 and 1/2% a year. You don't have to be mathematically that
01:11:19
literate to realize that a 2 and 1/2% decline in your sperm count every year is a disastrous level, a non-sustainable
01:11:27
level, right? >> How long is that going to take for this my sperm to basically not work?
01:11:31
>> As far as we can tell, our best guess is that in hunter-gatherer days we had 118
01:11:39
million units per milliliter of sperm. And when the academics came in in 1970, uh
01:11:46
it was down to about 100. And today it's 35. Okay? Also, the quality and the mo- motility they call it had
01:11:57
also declined somewhat similarly. It turns out, luckily for us, that we were over-engineered at I like to say
01:12:05
like a great Victorian bridge. Nature doesn't take any risks and and you have more than you need. And it it
01:12:13
appears, again, a good guess is about 45 million units is what you need to be able to get
01:12:20
pregnant without any difficulty. And that was hit about 15 to 20 years ago. The number of young couples who needed
01:12:27
help 15 or 20 years ago uh was nil, basically. And for this reason, that none of them
01:12:35
had a a chronic lack of sperm count in round numbers. And now the World Health says it's about
01:12:45
17%. Okay? 17% of young couples could use some help today. It which means that instead of, you
01:12:52
know, just trying for a week or two or three or four or five or six you're trying for months and months.
01:12:58
And everybody knows people now who fall in that category. Which is exactly what you
01:13:04
would expect if you've gone from zero to 17%. But this is the killer. Shanna Swan
01:13:10
and my colleague and I kind of thought about this thing separately and independently and we
01:13:15
we worked out doesn't take a great brain that in 20 to 25 years the young couple
01:13:22
will need help. I mean this is tomorrow. You know this is not 200 years from now.
01:13:27
In 20 to 25 years the average young couple will need help getting pregnant. >> Dr. Swan's projection indicates that if
01:13:35
the current rate of decline continues unchecked the medium male sperm count is on track to hit zero
01:13:43
by 2045. >> Wow, yeah. >> [laughter] >> That is that means the medium couple is not
01:13:53
going to have children without a lot of help. >> It means half the male population will
01:13:59
have zero viable sperm and the remaining half will be right on the edge of functional infertility.
01:14:06
>> A few of them will still have plenty and maybe 10% who are really perfectly in decent condition.
01:14:13
Because there's a huge distribution range today. You know there are there are people
01:14:18
today who still have 200 million you know better than the hunter-gatherers. But it's uh
01:14:25
>> And what is causing this and how do we stop it? >> Shanna would say the environment around
01:14:31
you of mainly plastics. Plastics are leaching uh toxins and the particles of plastics
01:14:38
you have in your brain and in your body which we now know is quite substantial are also leaching toxins.
01:14:48
And these toxins are what they call endocrine disruptors. They mess with your hormones.
01:14:54
You should expect them to lower your fertility. And yet, the people who specialize
01:15:00
in fertility problems and write books about it, none of them mention toxicity. They mention the hundred perfectly solid
01:15:08
reasons why people are choosing uh to have fewer children. >> Endocrine disrupting chemicals like
01:15:14
phthalates, >> Like phthalates. >> which are found in cosmetics, shampoos, food packaging, etc. They actively lower
01:15:21
testosterone production in male fetuses during the first trimester, permanently stunting reproductive reproductive
01:15:26
capacity before birth. >> Yes. >> BPAs, which are um what they call the biphosphonates?
01:15:34
>> Yes. Something like that. >> Used to make plastics hard, line tin cans, and coat thermal store receipts.
01:15:41
Um they are synthetic estrogens. They flood the male body with female hormones and signals crashing sperm count and
01:15:46
motility. PFAs, forever chemicals used in nonstick pans, teflons, waterproof rain jackets,
01:15:52
and stain resisting carpets. They break down in nature, accumulate in human blood, and are directly linked to lower
01:15:58
sperm volume. And then the microplastics you talked about, the chosen chose Trojan horse. One of the shocking things
01:16:04
that I read was that it's been discovered that they are physically embedded in human placentas.
01:16:08
>> Yes. Isn't that amazing? >> Breast milk and human testicles. And there was a major study, I think we all
01:16:13
heard about in 2024, that found microplastics in 100% of human testicular tissues tested.
01:16:22
100%. And lastly, biological stresses. So, me and you being sat down on these chairs,
01:16:27
heats our testicles to a point where the sperms die. Heated car seats, hot laptops, they actively cook the sperm.
01:16:35
And lastly, obesity. >> Yes. And of course, smoking you, which somehow slipped through the net.
01:16:41
>> Yeah. >> But um there is a whole other branch, pesticides on your food. Now, if you
01:16:46
give me time, I'll tell you about these two little studies. They're very small, and you might ignore
01:16:52
them except they were done by Harvard and Mass General, which is candidate for the best hospital in America.
01:16:59
And, uh they had a clinic for people having problem getting pregnant. And, uh they they ran it out of that.
01:17:07
They had 180 men. And, they got them to self-report on what they were eating. Were they eating
01:17:12
the dirty dozen? Were they eating melons and bananas that have lots of protection?
01:17:18
At the end of uh 6 months, the the guys who reported to eat the least bad versus the quarter that ate the worst,
01:17:28
there was a doubling of sperm count. Can you believe it? At the top category, the
01:17:32
more fruit and veggies you ate, the better your sperm count. In the bottom quartile, the more they ate, the worse
01:17:38
their sperm count. It was a dramatic result, but two to one between the top and the bottom. And,
01:17:44
then 2 years later, they did a very similar study with women who were having trouble.
01:17:49
And, at the end of their 9 months of self-reporting, the ones who ate the least badly had 68% successful live
01:17:56
births, bearing in mind this was a fertility clinic, and the bottom quartile 38%. So, once again, nearly
01:18:03
double. I mean, and and it's life and death. I mean, these are really important. And,
01:18:07
this was only based on what they ate. Because pesticides are full of these toxins, and they are delivered straight
01:18:17
into your body. You eat the damn things. It's not just they're on the surface. You can wash some of that away, but
01:18:22
they're impregnated part of the structure of the berry. Berries, apples, pears, peaches,
01:18:31
and finally, um uh spinach uh are really bad and are the top end. The bananas and the
01:18:36
oranges, and the melons are uh fine. So, if you eat these damn things that designed to kill our cousins, the
01:18:44
insects, and and the weeds, and the funguses, why would you expect them not to do a terrible job on humans?
01:18:51
And we stuff them in our system. And the fetus, it turns out, is 100 to 1,000 times more vulnerable
01:19:00
than we are out in the out in the world. For example, if your mother smokes, it's going to do about the same damage
01:19:08
as if you smoked for the rest of your life. >> Hm. Wow. >> And you think about what the fetus is
01:19:13
plugged into the system, and how it's forming everything. It doesn't seem the most unreasonable thing that it would be
01:19:19
much more sensitive. And there are people out there fussing quite reasonably about the first
01:19:25
1,000 days of life. But actually, that is nothing like as important as the 270 days in the womb.
01:19:35
>> Atrazine. Have you heard of atrazine? >> have. >> Atrazine, um referred to as the chemical
01:19:41
castrator. It is the second most widely used herbicide in the United States, sprayed heavily on things like corn and
01:19:47
sugar canes. And there was this crazy study which was peer-reviewed out of UC Berkeley that
01:19:53
showed exposure to atrazine at levels below the EPA's considered safe for drinking
01:20:01
um levels, completely chemically castrated male frogs, turning 10% of them into fully functional females
01:20:10
capable of laying eggs. In humans, it is linked to severe drops in sperm motility
01:20:15
and testosterone. >> And yet, we avoid the topic. We avoid the topic because it's
01:20:21
it's pessimistic. We're not fighting the data. >> We just don't want to talk about it.
01:20:26
>> want to talk about it. We don't want to talk about bear markets. We don't want to talk
01:20:31
about bad climate changes, even though it's bludgeoning us. This year could be the worst
01:20:38
hot year in history. We are set up because of the accident of the El Niño to have perhaps the worst droughts and
01:20:48
the hottest weather ever recorded, starting about now. So, brace yourselves. But, we don't want
01:20:54
to talk about that. We don't want to talk about toxicity. We don't want to talk about running out of resources. Oh,
01:21:00
we just don't do bad news. And I have never seen anything like this, this fertility thing, where the data is
01:21:07
horrific. The baby bust is measurable. The sperm count is one of the few things you can really measure. Do they really
01:21:15
think if you have declining sperm count, the future is great? Do they really think that the economy
01:21:20
will function if the number of 20-year-olds entering the market starts to drop like a stone?
01:21:26
In Japan, you know what their 20-year-old is? It's 50% of what it was in 1948. >> What is 50%?
01:21:32
>> 50%. Not down 15 or 3.5, 50% less. >> 50% less 20-year-olds? >> 20-year-olds that drive the market, that
01:21:41
offer themselves for military service. >> What do we do about this? >> We have two things.
01:21:46
We've got to detoxify the world, which is intellectually easy. You ban poisonous
01:21:53
chemicals. And we've made in the EU pretty good start. My favorite example and everybody's
01:22:00
favorite example is cosmetics. Cosmetics, you don't actually eat it, but you rub it on your skin, which is
01:22:05
the second worst thing to do. And there are 10,000 chemicals in cosmetics. And the EU has banned 1,500. If they ban
01:22:14
the right 1,500, that could be 3/4 of the battle, right? Canada's banned 550. And the US has banned 12. I am not
01:22:23
kidding you. So, The thing about toxicity is it is regional. If one country if Denmark or
01:22:30
the EU or the UK wants to look after its chemicals, they will live longer and have better health. If the US wants to
01:22:37
put the corporations first, they will have shorter lives. Do you know the life expectancy difference between the US and
01:22:44
Sweden has gone from 2 years to 6 years in the last 70 years? I wrote in my quarterly letter my estate
01:22:50
would be willing to bet you that in 50 years it'll be 8 or 10. >> I don't quite think people in the United
01:22:55
States realize the difference in the products they consume here versus other parts of the world. And you know,
01:23:03
>> No, absolutely not. >> Brits fly over here and actually we had my my barber my my barber Damon and he
01:23:08
flew over here to give me a haircut last week. He said, "Oh gosh, I don't feel good." He said, "I went and got some
01:23:12
food here and I really just don't feel good." And he says, "Every time I come over here I don't feel good." And me and
01:23:16
my team we used to fly over here before I moved here for a couple of weeks a year to film the show and whenever we'd
01:23:21
fly back not only would I be much fatter, um but we'd all feel a little bit more like sluggish, is the way I'd
01:23:26
describe it, from eating the food here. And it almost felt quite clear that there's like something in the food that
01:23:31
our bodies just isn't used to in the UK. And when you look at the toxicity of the United
01:23:37
States versus Europe, it's quite clear. I mean, the US currently permits the use
01:23:41
of 85 agricultural pesticides that are completely banned in the EU, China and Brazil. The US sprays over 300 million
01:23:51
pounds per year of pesticides that are deemed too dangerous to be legally used in Europe, including that one I said
01:23:58
about the frog's called atrazine. >> atrazine >> Which the EU banned over two decades
01:24:03
ago. We look at cosmetics, which you were talking about then, what you put on your skin obviously goes into your
01:24:08
bloodstream and so the EU has banned or heavily restricted over 1,300 chemicals in cosmetics and personal care products
01:24:15
due to toxicity and hormone disruption. The US and the FDA has banned 11. In terms of food, the US allows potassium
01:24:23
bromate, which is a known carcinogen, cancer-causing, used to make fluffy dough bread, and BHA
01:24:31
{um} / BHT, which are preservatives linked to hormone disruption. Both are strictly banned from human consumption
01:24:37
in the UK and EU and Canada and China. And lastly, the US {um} allows titanium dioxide, used to make candy smell like
01:24:45
Skittles bright white, and synthetic dyes like red 40, which require strict warning labels or
01:24:52
outright bans in Europe due to DNA damage and neurodevelopmental issues in kids. I'll give you one more. A recent
01:24:59
US Geological Survey found that at least 45% of all US tap water is contaminated
01:25:06
with PFAs, those forever chemicals we talked about earlier, the very chemicals directly linked to crashing sperm counts
01:25:12
and testicular cancer. The US has historically allowed PFAs levels in drinking water
01:25:19
drastically higher than the EU, the United the European Union considers safe. >> Let us just say that the EU is forever
01:25:27
giving exemptions and extensions and is far from perfect and has a lot of corporate pushback. And uh it's just
01:25:34
much less bad than the US. >> And the US has worse life expectancy. >> It does, and it's the only rich country
01:25:41
in the world where 15 years ago they had the same life expectancy as they have today.
01:25:46
>> One um actionable piece of advice for anyone listening that might find this all quite um
01:25:52
overwhelming cuz you know, lots of things around us from receipts to the pans we use to
01:25:57
range jackets contain these chemicals, is there are apps out there where you can scan the chemicals in the
01:26:05
foods that you're buying to check if they contain these endocrine disrupting these hormone disrupting chemicals. I'm
01:26:11
not affiliated [clears throat] with any of them, but there's one called Yuka, YUKA, that I know is very easy for sort
01:26:17
of everyday scanning of products. You can just scan the barcode and it'll tell you it'll give it a rating score out of
01:26:21
100. There's EWG's Healthy Living um app which is the scientific gold standard run by the Environmental
01:26:28
Working Group a major toxic chemical watchdog. You can scan barcodes or search for food, cleaning supplies or
01:26:33
cosmetics. There's Think Dirty as well which is great for cosmetic shampoos and skin care. It exposes the toxic truth
01:26:39
hiding in beauty products. Um and then there's Clear Ya which is Clear Ya. Best for online shopping. It's an app in your
01:26:46
web browser and instead of scanning barcodes in your house while you're shopping online, it's so if
01:26:51
you add a say like a shampoo or lotion to your Amazon or Target or Walmart basket, it automatically pops up with an
01:26:57
alert telling you about the ingredients list that is within those chemicals. But
01:27:01
but I think that gives something a little bit actual and arms you with at least a tool to navigate this crazy
01:27:06
environment. And obviously AI is great at this as well. You can take pictures of things and ask it questions.
01:27:10
>> And what we really need is a kind of green Amazon where everything is guaranteed food, bed, clothes,
01:27:16
everything. And that would be very handy indeed. Someone you could trust that would
01:27:22
absolutely guarantee the whole line of products that you would order. Not impossible and I think done well and
01:27:28
someone could make money at it. >> What would advice would you give to your kids on a personal level if they're
01:27:32
trying to stay healthy in a toxic world? >> Simple advice and I know you like this
01:27:38
is pregnant women are much more important than anybody else in this field. If you could persuade pregnant women A
01:27:46
to have no cosmetics, save a lot of money, no cosmetics for 9 months and then B invest some of that money from
01:27:52
your cosmetics or all of it in buying organic berries if you have to have berries, apples, oranges, peaches
01:28:01
what they call the dirty dozen here. If you did that I think as much as half of all the
01:28:07
trouble disappears. And that's a huge fraction and it's easily acquired. You know, I I I addressing the 100
01:28:15
things around in your environment, you have to get to that. Typically, if you're lucky, you do one
01:28:21
thing after another. You get the gas stove first, which is really noxious, and then you work your way the black
01:28:27
plastics, the Teflon frying pan. You work your way around it. Compared to that, no cosmetics, no bad food,
01:28:38
or make it organic. That's a piece of cake. That is easy. It will save you huge amount that you will never
01:28:45
appreciate because you'll never know how much better your children are than they
01:28:49
would have been. >> Mhm. >> But, it's not only your children, by the way. For women, you know, you're talking
01:28:56
about in particular because of the eggs, they are Every egg is all there in the womb.
01:29:03
And then it goes on to your grandchildren, we thought. At least we could prove two generations. And and and
01:29:09
a recent study suggests it might be many more generations than two. So, you got some of these chemicals
01:29:16
impregnated in your system, and your children pay the price, and your grandchildren, and perhaps even
01:29:23
quite a few generations after that. >> I also think it would be great if Western governments around the world
01:29:30
made the costs of both child care and but also fertility treatments significantly lower.
01:29:39
>> And they will, of course. >> You know, I had a couple of conversations on this podcast with very
01:29:43
successful women, including Ronda Rousey, who was in tears because she was on a I think it's her [laughter] fifth or
01:29:49
sixth round of IVF treatments, and she just found out just before she walked into the studio that it hadn't gone
01:29:54
well. And watching her cry about it and get very emotional meant that that that day I walked out of this
01:30:00
room and like called a lot of the people in my life that I know are you know, in the region where fertility
01:30:05
starts to decline, and really encourage them to start thinking if they if that's
01:30:10
what they want in their lives about family planning, which is like getting your eggs frozen or your embryos frozen.
01:30:15
And me and my partner actually went and did it. We got our embryos frozen, which
01:30:19
was a you know, it's it's not it's it's both expensive, extremely expensive, especially here in the United States,
01:30:25
and difficult. >> And psychologically destructive. Brutal. >> You know, we you know, me every day for
01:30:32
a couple of weeks injecting her with with this this these chemicals and the the hormonal roller coaster that she had
01:30:38
to deal with and all of that, but for us the alternative was worse, which was never being able to have
01:30:45
children because it's difficult and there's all these toxins in our environment and and so on and so forth.
01:30:51
And so I then became a little bit of a I guess a bit of a bit preachy within my within the people the people in my life
01:30:55
that I love a lot about family planning cuz we kind of all thought we could just
01:30:59
think about it later. We're all kind of 35 and we thought, "Yeah, we'll think about that later."
01:31:04
Um but it turns out not to be the case for many people. >> If you'll allow me to go back, you asked
01:31:09
an important question. What do we have to do? And I said we have to detoxify the system and then we both got off into
01:31:15
this frenzy of of attacking chemicals, which we should anyway, but it's intellectually easy. Ban the suckers,
01:31:23
okay? Now, putting pressure on the corporations to back off so the governments can do it would be a good
01:31:30
idea, not easy. Corporations have enormous power, unprecedented power in the US,
01:31:35
but but very substantial power in the in the EU and the UK also. But we have to get them to back off. We have to start
01:31:43
banning these damn things, otherwise no children. But secondly, and much more difficult,
01:31:50
is we have to detoxify capitalism. We have to slowly but surely turn our capitalist societal norms into
01:32:00
much more family-friendly, children-friendly. Over the next several generations,
01:32:06
we have to end up with a society that realizes that 2.1 healthy, well-educated children is a part of the commons. You
01:32:15
may not have any children. >> you mean by that, sorry? 2.1? >> 2.1 is the number of children it takes
01:32:20
for a rich society to have a steady population. >> Per couple? >> Per couple. If you have less than 2.1
01:32:27
per couple, you fairly rapidly go out of business. If you have more than 2.1, you fairly
01:32:33
rapidly end up with so many people you're standing on each other's shoulder. The commons are things like
01:32:39
common land in the old days that anyone could put their sheep on. And what tended to happen is everyone put more
01:32:46
sheep than they could stand, and they pretty soon it was it had no grass on it. Known as the
01:32:51
tragedy of the commons. And we all need clean air, clean water, fertile soil, and 2.1 healthy, well-educated children.
01:33:06
Without any of those, society fails. All of them have to be treated as group responsibility. So, the whole society,
01:33:15
the whole village has to be in a way like a kibbutz eventually. You have to put everything
01:33:21
behind making it doable to have children because the long list of economic and social reasons, as well
01:33:29
as toxin reasons, why people can't have 2.1 children is getting so long and so dangerous. And nothing yet has worked. I
01:33:38
mean, they've tried, you tell me, 200 different things around the world. Several percentage points of GDP in one
01:33:44
or two cases. And nothing yet has seemed seen a permanent uptick in in baby production.
01:33:54
>> For the average person listening right now, Dave who drives a taxi or Jenny who
01:33:58
works as a receptionist or um Clive who is a nurse, what is the most important thing we
01:34:05
haven't talked about that we should have talked about as it pertains to their life today?
01:34:10
>> I think they have to brace themselves for a tougher times ahead than they would have they expected.
01:34:18
And they're beginning to get the point. Life for the last 10 or 20 years has been tougher than than they perhaps
01:34:25
expected as children or or than other people expected for them. Part of that is politics. Part of that
01:34:33
is equality. But the net effect of them is times are tougher. It is more difficult
01:34:40
to buy a house or afford to rent. And and jobs are getting scarcer. It's likely to get worse.
01:34:49
>> What does brace yourself mean for them? Cuz brace yourself sounds like you But does it mean
01:34:55
>> Plan your life as if times will not be easy. >> Okay. >> And do not build up a little reserve of of cash.
01:35:03
Of course my advice to other people is and and get yourself a useful job. Something that will in a
01:35:12
larger sense pull your weight in society. >> Upskill, change skills, learn something
01:35:18
>> mechanical fixing, repairing >> Things that >> engineering >> Things that will need humans.
01:35:23
>> And and research, science in general. >> Make friends. >> Make friends. Make sure you're living in in a a tight
01:35:31
society if you can. Very difficult today, obviously. >> Would you be thinking about the country
01:35:36
you live in at this moment in time? >> Absolutely. >> Really? Is there any countries you
01:35:39
wouldn't live in? >> [sighs and gasps] >> If you were Dave or Jenny? >> I I think I have to refuse to answer
01:35:46
this on the grounds that it might tend to incriminate me. Um >> Oh, okay. So you're saying don't live in
01:35:50
the United States? >> Well, I have American children and grandchildren. >> Why not the United States?
01:35:57
>> It holds out too much chance that the social contract is is >> [snorts] >> dissolving.
01:36:04
You know, the thing about Japan and that my joking rule 21 in investing is never
01:36:08
extrapolate from the Japanese. They are extremely different in every way. But one of the ways they're different is
01:36:14
they have this amazing social contract. The thing that really upsets the Japanese is if they're put in a position
01:36:21
where they can't act in a socially responsible way. >> When you say social contract, what does
01:36:26
that mean? >> It means an agreement that I will behave in a way that helps my neighbors and the
01:36:31
society that I'm doing what people expect me to do. I'm not going to misbehave. >> And you think that's not the case here
01:36:37
in the United States? >> I think the case here is that people are doing what they think is best for them
01:36:42
and their family and screw everybody else, really. When I arrived in America, corporations
01:36:47
had this sense that they owed something to the community they operated in, the city they operated in. They They'd build
01:36:55
the stadium, they'd do this, they'd they'd be part of the community. Now they're not. They're all
01:37:03
in a way cold-blooded, profit-maximizing international enterprises. >> And why is that a bad place to live? Cuz
01:37:09
you're saying, you know, you probably wouldn't recommend Dave or Jenny living in the United States. Why would that be
01:37:14
a bad place for them to be? What happens? What's the What's the downstream impact of that?
01:37:18
>> That your neighbors aren't as interested in you and your well-being. >> Fine. I don't I won't talk to my
01:37:23
neighbor. >> And that's a lonely place to be. And when you're in trouble, you're in
01:37:30
serious trouble. Uh because the safety net here is very ineffective. There's a a measure that I
01:37:36
think is probably the single most important measure of civilization, and that is maternal mortality. How many
01:37:43
people die in childbirth? You know, in Nigeria out of 100,000, it's 480, give or take.
01:37:50
And uh in America, in in the black population, it's uh 44. In the whole population, it's like 21 or
01:38:03
20. Curiously, in the American Asian population, it's 13. And then, you go down the list,
01:38:13
and in Britain, it's five. In Germany, it's four. In Sweden, it's 2.1. In Norway, it's
01:38:22
zero. There were no mothers who died last year. >> Hm. >> Or the year before. What better
01:38:27
definition of civilization than looking after the mothers giving birth? How is it possible that a country
01:38:36
more or less the richest in the world, it's not just that they're the worst in the rich world, it's that
01:38:44
they are 50% worse than the next worst. 50% more mothers die here than in the second worst country in the developed
01:38:53
world. How is that possible? The answer is it happens. And um it's because the inequality is so extreme in the
01:39:02
medical system that if you don't have lots of money, you're quite likely to die in
01:39:06
childbirth. I mean, Now, of course, the numbers are not huge. 20 out of 100,000 is not uh
01:39:13
but it's but it's a terrible contrast. >> It's a sign of something. It's a sign of something else as well.
01:39:19
>> It's a sign of whether people are It's a sign of the social contract. >> So, where's a good place to live then,
01:39:24
if not here? >> Denmark, Japan. Uh even France, Germany. The UK has a little bit of the American disease, but
01:39:35
not nearly as much. >> So, if your kids came to you and said, "Dad, we're thinking of uh leaving the
01:39:39
United States. Should I move? Should I Should I move out of the United States? >> Yeah, I I would say that's a perfectly
01:39:46
reasonable thing to consider. And where are you going and why and what's your >> I'm thinking of going to Denmark, Dad.
01:39:54
>> Well, if they'll have you. Uh No, uh in the things that really matter, life expectancy, health,
01:40:04
safety nets, uh murder rates, uh mortality rates, and everything that really matters, yes,
01:40:12
they're they're day and night better. In the things that don't really matter, but look really splashy,
01:40:18
we have enormous quantities of uh wealth created that go to a relatively small fraction
01:40:24
of the people. And that dazzles in terms of the average because um that's how the numbers work.
01:40:33
If you look at how well-off the bottom quartile are, America doesn't score well at all.
01:40:40
>> Jeremy, we have a closing tradition where the last guest leaves a question for the next guest not knowing who
01:40:44
they're leaving it for. The question left for you is, if you could not fail, what would your next goal be
01:40:52
that you would set for yourself? >> There There was a book written in the 1960s called Silent Spring.
01:41:01
Carl Carson, I think her name was. And it changed for a quite a number of years it it it did what books never do
01:41:08
really it it uh became a political monster and everyone studied it and it had an
01:41:15
effect. It changed the game. I would uh like to write something about toxicity and and social contract really.
01:41:25
Particularly nurturing a family. We We've got to find in the end a community that encourages children. The downside
01:41:33
of the brutally efficient capitalist system that we have. It's focus on financial achievement and so on.
01:41:42
And very little emphasis on community and child-rearing and so on. If we don't we
01:41:48
we fail as a society pretty quickly. We have to detoxify. We have to encourage to create an environment where people
01:41:57
want to have children. >> [clears throat] >> If I could write a book that would be
01:42:03
would would pull a silent spring, I would sit down tomorrow and start it. >> The making of a Parma bear.
01:42:10
>> Parma should be in inverted commas, really. >> The perils of long-term investing in a
01:42:15
short-term world. By Jeremy Grantham and Edward Chancellor. Who is this book for?
01:42:24
>> Oh, people who have a interest in the stock market. It has a little bit of climate change and toxicity.
01:42:31
My my co-rider is a professional and he tried to limit me quite sensibly. Feeling that our main market was
01:42:37
investors who would be turned off by too much of the stuff we've been talking about.
01:42:43
>> You cover things also like economics, value investing, being a bear, and predicting a bubble, and what to do
01:42:48
about all of those things. But it's really a useful counterintuitive not counterintuitive, but it's a it's a
01:42:54
frame of thinking that will help you be more realistic especially when psychology is prone to take over and
01:42:59
make you wildly recklessly optimistic. >> And and be more confident in your judgment.
01:43:06
Big big companies cannot advise you. It's just suicidal for their business. So you are on your own. Look at the
01:43:15
data. A bubble is not hard to see. There is this kind of plane and then there's a
01:43:20
Himalayan peak which eventually goes back. >> And I mean that's exactly what we're
01:43:25
seeing. >> That's exactly what history looks like. Have the courage to look at that, make
01:43:31
your own conclusion, get out of the dangerous most dangerous part, and and do it now.
01:43:38
Don't wait for help because no help is coming. Large enterprises almost never get the
01:43:46
big turning points because they can't take the career risk involved. And every big corporation needs a leader
01:43:53
who has political skills. And the And the central political skill in life turns out to be never be wrong
01:44:00
on your own. This is again Keynes. You know, you can be wrong in company, you can jump off the cliff together, you
01:44:08
will never lose your job because of that. But if you do anything on your own, sooner or later you will get it wrong.
01:44:15
And quote, you will not receive much mercy. >> Jeremy, thank you so much. Thank you for
01:44:22
all that you do. Um you traverse so many subjects. It's It's absolutely fascinating and you You've made me think
01:44:27
about so many things. I've actually written down a bunch of ideas. You sent me taking some photos then. Those are
01:44:31
actually ideas that I want to remember. >> Yeah, that's what I do. Screenshot city.
01:44:35
>> Yeah, so I took I just wrote things down you were saying and then I was like I
01:44:37
need to remember that later for a bunch of things, businesses, friends, family, etc.
01:44:42
Um and I think that's the testament to how broad and curious and wise you are. >> Going back to question one or two, the
01:44:49
billionaire bit, uh sometime around the end of this year we will actually have written checks for
01:44:54
a billion dollars to the climate change world. >> It's It's a wonderful thing and there's
01:44:59
you know this particular moment in time because of the politics, climate change is a subject that's falling off the
01:45:03
radar. >> It is. >> Uh it's being mentioned less in earnings calls. It's >> But this year will be so disgustingly
01:45:09
hot from now on, I suspect. >> Disgustingly hot. >> Hot. We could have from now on the
01:45:14
hottest 12 months from now to this time next year that we have ever had in history.
01:45:20
Here, there, and everywhere. >> Well, I'm glad we've got voices like yours um lending their ideas and wisdom to
01:45:25
these conversations and it's been an honor and a privilege to to you. Your book, The Making of a Manager, Baron, to
01:45:29
link it below for everyone to buy it themselves. Jeremy, thank you. YouTube have this new
01:45:35
crazy algorithm where they know exactly what video you would like to watch next based on AI and all of your viewing
01:45:41
behavior. And the algorithm says that this video is the perfect video for you. It's different for everybody looking
01:45:47
right now. Check this video out, and I bet you you might love it.