AI transcript
0:00:03 Support for Prop G comes from Crescent Family Office.
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0:00:41 (funky music)
0:00:45 – Hey, what you doing?
0:00:48 – Programming our thermostat to 17 degrees
0:00:50 when we’re out at work or asleep.
0:00:51 We’re taking control of our energy
0:00:54 use this winter with some easy energy saving tips
0:00:55 I got from Fortis, BC.
0:00:58 – Ooh, conserve energy and save money?
0:01:00 Maybe to buy those matching winter jackets?
0:01:02 – Uh, no, we’re also getting
0:01:04 that whole matching outfit thing under control.
0:01:07 – Discover low and no cost energy saving tips
0:01:10 at fortisbc.com/energysavingtips.
0:01:12 Matching track suits?
0:01:13 – Please no.
0:01:17 – Mike has always wondered
0:01:20 what makes some people want to play action hero.
0:01:23 – When I see people speeding or skydiving
0:01:25 or surfing on hundred foot waves,
0:01:26 I always think, are you crazy?
0:01:27 What are you doing?
0:01:28 Because I’m like risk averse.
0:01:32 I’m trying to like, you know, keep Mike in one piece.
0:01:34 – But what about people who get their thrills
0:01:36 from playing cop?
0:01:40 This week on Explain It To Me, citizens arrest.
0:01:43 Is it a real thing and should it be?
0:01:45 New episodes every Wednesday.
0:01:50 – Welcome to Office Hours with Pravji.
0:01:52 This is the part of the show where we answer your questions
0:01:54 about business, pick tech, entrepreneurship,
0:01:55 and whatever else is on your mind.
0:01:57 If you’d like to submit a question,
0:01:59 please name all a voice recording
0:02:00 to officehours@propgmedia.com.
0:02:04 Again, that’s officehours@propgmedia.com.
0:02:06 I have not seen or read these questions.
0:02:08 Question number one.
0:02:09 – Hi, Pravji.
0:02:12 I’m Anna from Mexico, currently living in Chicago, Illinois.
0:02:15 First of all, thank you for all your hard work.
0:02:18 I listen to your podcast during my commute to school
0:02:21 and it always makes the ride more enjoyable.
0:02:25 My question is about APOs in Latin America.
0:02:27 One of the predictions you did for 2025
0:02:30 was that emerging markets will become
0:02:32 more attractive to investors.
0:02:35 I had the chance to work for a unicorn in the region
0:02:38 and ever since, I have wondered,
0:02:42 why we don’t see many IPOs in Latin America?
0:02:45 I truly believe that there are amazing companies
0:02:47 led by talented entrepreneurs,
0:02:49 but not many of them go public.
0:02:50 What do you think this is the case
0:02:52 and what do you think could be improved
0:02:54 to help more companies in the region
0:02:55 to take that step?
0:02:59 Thank you so much and thank you for choosing that question.
0:03:00 – Anna from Mexico.
0:03:03 I love your accent and the IPO market.
0:03:06 Since the pandemic, the IPO market in Latin America
0:03:08 has really fluctuated.
0:03:11 In 2021, the region raised about $19 billion,
0:03:13 mostly due to Brazil,
0:03:15 which accounted for about 85% of that capital.
0:03:19 Mexico, in comparison, had only one IPO in 2021.
0:03:21 So basically the IPO market in Mexico
0:03:24 could best be described as kind of like dead.
0:03:25 Other than that, it’s fine.
0:03:26 By 2022 and 2023,
0:03:30 IPO listings came to a complete halt in Brazil.
0:03:31 In the first half of 2024,
0:03:33 the entire Latin American and Caribbean region
0:03:35 registered only four IPOs.
0:03:36 Why?
0:03:39 Essentially, the boring stuff, interest rates.
0:03:42 Rates in Brazil rose over seven points
0:03:43 to nine and a quarter points.
0:03:45 Similarly, interest rates in Mexico
0:03:48 increased from 5.5% to 10.5% in the same period.
0:03:50 At the end of 2022,
0:03:52 the average policy rate in Latin America
0:03:56 stood at 18.9%.
0:03:59 Rising interest rates usually decrease investor confidence,
0:04:01 which typically means an outflow of capital
0:04:03 from equity markets into safer fixed income investments.
0:04:06 In short, when you’re getting paid a lot of money
0:04:08 just to put your money in bonds
0:04:12 or would feel like less volatile or safer investments,
0:04:13 the bar to go public gets much higher
0:04:15 and money flows out of equities
0:04:17 and into fixed income instruments,
0:04:20 thereby creating a less hospitable market for IPOs.
0:04:23 Additionally, the rise of populist left-leaning governments
0:04:25 in Latin America has deterred private investment
0:04:29 in the region, resulting in nearly flatline GDP per capita.
0:04:31 I’m actually quite bullish on Mexico.
0:04:32 I think for a few reasons.
0:04:34 One, more political stability,
0:04:37 I would argue, than the US to proximity.
0:04:40 As we try and divest away from China,
0:04:42 one because of geopolitical tensions,
0:04:45 but also just because of supply chain diversification.
0:04:46 I was on the board of chemical turbine outfitters.
0:04:48 We woke up one day and Mila COVID
0:04:51 realized that the disproportionate 60, 70% of our tops
0:04:55 were being manufactured in a five mile radius of Shenzhen.
0:04:58 And basically all 550 of our stores couldn’t get tops in time
0:05:01 and said, okay, even if it costs us a little bit more,
0:05:03 we need some supply chain diversification.
0:05:04 Basically up until COVID,
0:05:07 supply chain was run for the lowest cost, full stop.
0:05:09 How do we eke out more and more costs?
0:05:12 And it ended up we had absolutely no slack,
0:05:13 meaning any eruption at all.
0:05:16 And everything from your refrigerator to your garage door,
0:05:17 they couldn’t find parts
0:05:18 and the whole thing just kind of collapsed on itself.
0:05:21 So essentially the biggest threat to these companies
0:05:23 is no longer consumer demand,
0:05:26 which has been really strong for the last 16 odd years,
0:05:28 but supply chain interruptions
0:05:31 where basically consumers can’t get what they want.
0:05:33 So there’s this amazing
0:05:35 or this incredible inspired effort
0:05:37 towards supply chain heterogeneity
0:05:39 and then there’s supply chain diversification,
0:05:43 moving stuff out of China into Vietnam,
0:05:44 other Southeast Asian countries.
0:05:46 And also the big beneficiary has been Mexico,
0:05:48 which is now our largest trading partner.
0:05:50 So I’m actually quite bullish on Mexico.
0:05:53 IPOs in general seem to be in,
0:05:55 are they encyclical decline or structural decline?
0:05:57 And that is, it used to be,
0:05:59 if you wanted a company to be worth more
0:06:00 than a few hundred million dollars,
0:06:03 you had to access this deep pool of capital
0:06:04 called the public markets.
0:06:05 There just wasn’t enough capital available
0:06:06 in the private markets.
0:06:10 The biggest VC funds only had two or $300 million funds.
0:06:12 So you went public to access
0:06:14 these big pools of public capital.
0:06:16 That’s no longer the case.
0:06:17 People have gone further downstream
0:06:19 and when they see opportunities,
0:06:21 when they see the company accelerating in value,
0:06:22 they wanna squeeze more and more juice
0:06:24 in the private markets as institutional investors.
0:06:26 So they’re like, we don’t need to go public.
0:06:27 As a matter of fact,
0:06:30 if the existing shareholders or employees
0:06:32 want some liquidity, we can give it to them.
0:06:34 We can do secondary offerings.
0:06:35 We don’t want the scrutiny,
0:06:37 the regulation of the public markets.
0:06:38 So we’ll just stay private.
0:06:40 And oftentimes the private markets
0:06:43 are actually trading any premium to the public markets.
0:06:44 So what do you have?
0:06:47 The number of public companies has been reduced,
0:06:49 I think by two thirds over the last 30 or 40 years.
0:06:50 One, it’s harder to go public.
0:06:51 Two, there’s more regulation.
0:06:53 Three, it’s expensive.
0:06:56 And four, mergers and acquisitions
0:06:58 have taken a lot of public companies off of the rolls.
0:07:03 And finally, finally, being private is kind of equivalent
0:07:05 or maybe even more ideal than going public.
0:07:08 And typically, I think also what’s hurt the public markets
0:07:10 is by the time a company decides to go public,
0:07:12 it’s sort of the last stop on the full train.
0:07:16 And that is Google when they went public, enormous upside.
0:07:17 Same with Metta.
0:07:19 These companies still had enormous upside left.
0:07:20 Now most of the, again,
0:07:22 the juices being squeezed in the private markets.
0:07:24 So by the time it gets to the public markets,
0:07:26 it’s sort of like, well, we’ve run out of people
0:07:28 in the private markets who will bid us up.
0:07:30 Let’s see if we can find stupid retail investors
0:07:33 and some of the public market IPOs have underperformed
0:07:37 and it’s made a less hospitable environment.
0:07:40 But yes, the IPO market in Mexico is dead.
0:07:42 I hope it comes back for all of us.
0:07:44 Thanks for the question.
0:07:45 Question number two.
0:07:49 Hey, Scott, this is Kevin from Colorado.
0:07:50 Long time listener of the pod
0:07:53 and want to tell you how much I appreciate your insights
0:07:54 on helping young men.
0:07:57 Although I’d still like to consider myself young.
0:08:00 In 2025, I’m turning 40
0:08:02 and I’m increasingly feeling the responsibility
0:08:04 to make a positive impact
0:08:07 with the abundance of young men I interact with in my life.
0:08:10 I have three young boys, a younger brother,
0:08:14 four younger brothers-in-law and eight young nephews.
0:08:17 Outside of my family, I own two businesses,
0:08:20 each having many young male employees.
0:08:22 And I’m also active in my church
0:08:26 where I help mentor dozens of young men under 18.
0:08:28 I’m finding it hard to get involved
0:08:31 and help these boys that aren’t my sons
0:08:33 because I don’t want to overstep my bounds.
0:08:35 My question, Scott, is this.
0:08:38 With no shortage of opportunities,
0:08:41 how do you recommend I be more proactive
0:08:43 in helping mentor these young men,
0:08:46 especially those I can see are struggling,
0:08:50 without being overbearing or coming off as weird?
0:08:51 – Boss, you’re doing it.
0:08:54 You know, raising good men,
0:08:57 raising confident, loving, patriotic boys,
0:09:01 that’s kind of 90% of what you’re supposed to be doing.
0:09:02 In terms of helping other boys,
0:09:04 when I can’t stand the gestalt in our society
0:09:07 where we suspect men who want to get involved
0:09:08 in other boys’ lives,
0:09:09 I think that is one of the terrible things
0:09:12 about our society that is largely the fault
0:09:13 of the Catholic Church and Michael Jackson,
0:09:15 which I will not go into,
0:09:17 but your inclinations are the right ones.
0:09:18 One, getting involved in groups,
0:09:20 being a scout leader, you know,
0:09:22 teaching Sunday school, whatever it might be,
0:09:25 but sharing some of that confidence,
0:09:27 being a male role model in groups,
0:09:29 also recognizing, or what I think is a great trick
0:09:33 or not a trick, but I do this sometimes with my boys.
0:09:35 One, my boys are 14 and 17,
0:09:38 so no matter how wonderful or fat the vacation is,
0:09:40 unless they’re with other boys or other people their age,
0:09:41 they’re just not gonna have a good time
0:09:42 and they’re gonna get bored and angry
0:09:44 and make our lives miserable.
0:09:45 So I bring friends.
0:09:49 And what I find is I try and find or encourage them
0:09:52 to invite boys that may not have the opportunity
0:09:56 for whatever to hang out or do the kind of things we do.
0:09:58 So I like to bring my boys friends with them.
0:10:01 And I find you don’t need to do that much.
0:10:05 I think just seeing a healthy father-son relationship,
0:10:06 seeing, you know,
0:10:08 you trying to occasionally ask a few questions,
0:10:10 them asking you a few questions,
0:10:12 it’s really powerful ’cause the reality is,
0:10:14 and this is sort of, I don’t know,
0:10:17 disappointing, hurtful as the dad,
0:10:19 what you’re gonna find is with your sons,
0:10:22 they would draw a little bit or they’re just less inclined.
0:10:25 I have young men asking me for advice every goddamn day.
0:10:26 My boys don’t ask me for advice
0:10:29 ’cause they have this very healthy instinct
0:10:33 that says I need to break away from the pride.
0:10:35 And in order to make that a little less painful,
0:10:38 I start thinking my parents are idiots.
0:10:39 And what’s interesting is there’s research
0:10:41 that shows with teen boys,
0:10:44 they’re more apt to listen to their friends’ fathers
0:10:45 than their own fathers.
0:10:46 So what I would say is,
0:10:48 in addition to just doing the good work you’re doing
0:10:52 to get involved in groups where you might have an audience
0:10:54 of more young men or young people that you can influence,
0:10:56 whether it’s a church group,
0:10:58 or as I said, the Boy Scouts or volunteer groups
0:11:00 or coaching or sports leagues,
0:11:03 if you really feel like you have that ability
0:11:05 to connect with young men.
0:11:06 But also on a very basic level,
0:11:08 when you do stuff with your boys,
0:11:12 encourage them, ask them or just invite other boys
0:11:13 their age from your friends.
0:11:15 Especially, I think it’s doing God’s work
0:11:18 to kind of do a little bit of poking around
0:11:19 and find out where there’s single mothers
0:11:21 in your universe and say,
0:11:24 hey, I’m taking my kids to the football game
0:11:27 or I’m taking my kids to whatever it might be
0:11:30 to the beach, would John like to join us?
0:11:32 And I think you’re gonna find a lot of single mothers
0:11:36 are very open to their son spending more time
0:11:38 in the company of men trying to lead a good life
0:11:41 and around other boys, but thanks for the question.
0:11:44 We have one quick break before our final question.
0:11:45 Stay with us.
0:11:53 – Support for PropG comes from Quint.
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0:13:04 This episode is brought to you by Crescent Family Office.
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0:13:56 There are no material conflicts
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0:13:59 All investing involves risk,
0:14:01 including loss of principal.
0:14:09 Support for the show comes from Nerd Wallet.
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0:15:11 – Welcome back, question number three.
0:15:15 – Hi, Scott, this is Marcela Terra from Miami.
0:15:18 I am a Colombian immigrant and just when I thought
0:15:21 I couldn’t love any of your content anymore,
0:15:25 I find out you have bought a football team,
0:15:29 not soccer football from my beloved country, Colombia.
0:15:33 I was just curious what motivated you
0:15:35 to join this group that is making the purchase.
0:15:37 And if you have any plans to ace it,
0:15:40 my country, I’m just so excited.
0:15:43 Thank you so much for all your wonderful content
0:15:46 and keep up the good work.
0:15:48 In another non-football note,
0:15:52 just wanted to thank you for showing up vulnerable
0:15:56 and emotional and loving and caring
0:15:58 and also being a baller because I think
0:16:01 that’s your very own brand of healing the world
0:16:06 and helping young men know that those two things
0:16:09 can coexist by sky.
0:16:10 Thank you.
0:16:13 – I’m gonna print this out and read it to myself very night.
0:16:17 This is one, I oftentimes think my producers hate me
0:16:19 and are just so sick of me because I know me
0:16:20 and I know how difficult I can be.
0:16:21 Actually, I’m not difficult.
0:16:23 I don’t think I’m difficult, am I difficult?
0:16:26 But I’m shocked that they let this get through.
0:16:28 So thank you for the really kind words.
0:16:33 So la equidad, the number,
0:16:35 the second best team in Bogota, Colombia.
0:16:38 This is, I don’t wanna say it’s a dream of mine,
0:16:41 but I had always toyed with the idea of I really wanted
0:16:45 to buy or to make an investment in Rangers,
0:16:48 the best team in Scotland.
0:16:49 Because my dad used to go to Rangers games,
0:16:50 I absolutely love football.
0:16:54 I love the idea of investing in a community
0:16:55 and I think it would just be a lot of fun.
0:16:59 Also, quite frankly, it’s sort of a,
0:17:01 I don’t know, a symbol of your success,
0:17:03 midlife crisis, I’m worried I’m gonna die soon,
0:17:05 arrested out of lessons.
0:17:07 I mean, all of that less admirable shit too.
0:17:11 And I met, so how did this come about?
0:17:14 I met some, I met this guy at an investor conference
0:17:16 who’s sort of the Yoda or the Svangale
0:17:19 of investing in teams and he scans the world for teams
0:17:23 and he tries to find teams that are economically viable
0:17:26 because they have a great player academy
0:17:30 and cultivate and chest eight players and then sell them
0:17:34 or they have kind of unrealized or unlocked TV rights,
0:17:36 whatever it might be, or they’re just not a well run team.
0:17:39 This kid literally needs a kid who’s in his 30s,
0:17:41 scours the globe for opportunities.
0:17:42 And he came to me and said,
0:17:43 I’m putting together an investor group,
0:17:45 which includes people much more famous than me,
0:17:48 including Ryan Reynolds and Rob McAlhaney.
0:17:52 And I got to know Rob because of my work on “Young Man”
0:17:54 and I was in “Welcome to Rexmer,” I was in an episode
0:17:56 and I just was so impressed with this guy.
0:17:59 He’s just such a lovely, talented guy.
0:18:01 And when I saw they were part of the investor group
0:18:04 and it was also an opportunity to spend more time in Colombia,
0:18:07 which I just think is such an incredible country.
0:18:11 And also quite frankly, this is a bite size.
0:18:12 I’m not buying Chelsea.
0:18:14 Chelsea cost four or $5 billion.
0:18:15 I’m not in that weight class.
0:18:18 This is a company that went for dramatically,
0:18:21 dramatically smaller purchase amount.
0:18:23 And I’m also a small owner,
0:18:28 or I think I’m gonna own something like 5% of the team.
0:18:31 But anyways, this is one part investment.
0:18:34 I do believe, I think I’m gonna make money here.
0:18:34 Why?
0:18:35 The fastest growing demographic group
0:18:38 isn’t seniors or Latinos, it’s billionaires
0:18:40 and the super wealthy.
0:18:40 What does that mean?
0:18:42 It means the assets is super wealthy by,
0:18:46 whether it’s hotel rooms in Santropé or Gulf Streams
0:18:49 or Loro Piano or Brunella Cuccinelli
0:18:52 or sports teams are gonna go up in values.
0:18:55 Sports teams typically have sort of a natural monopoly.
0:19:00 And so kind of Columbia League One does not have only,
0:19:04 they sequester, we can’t just start a football team.
0:19:05 MLS rights in the United States
0:19:07 are going for several hundred million dollars now.
0:19:09 These are essentially regulated monopolies.
0:19:10 Is that a good thing?
0:19:13 Probably not, but I’m taking advantage of it.
0:19:14 So what do you have?
0:19:18 You have an explosion in the customer base,
0:19:20 specifically wealthy people who buy teams.
0:19:23 And two, you have limited supply.
0:19:25 I like my math here, I like my prospects.
0:19:29 Also, you have this dynamic in terms of media
0:19:32 where people can now avoid ads.
0:19:33 Advertising has become a tax
0:19:35 that the technologically illiterate
0:19:37 or the poor have to pay except for sports.
0:19:40 And that is the only time I ever see adverts,
0:19:41 is they call them here in Britain,
0:19:43 is when I’m watching Arsenal play.
0:19:45 And that is the only time I’ll endure ads
0:19:49 is when I’m watching live TV, which is almost never.
0:19:50 I never watch live news anymore.
0:19:53 I don’t watch, I watch original scripted dramas.
0:19:55 So I’m able to avoid almost every ad
0:19:56 except when I watch live sports,
0:19:59 meaning the TV contracts will go up in value
0:20:01 because advertisers still need to reach people
0:20:02 in their fewer and fewer places.
0:20:04 They can reach them, see above live sports,
0:20:06 which means the TV rights deals will go up,
0:20:09 which means the value, the teams will go up in concert
0:20:11 with the number of buyers,
0:20:14 specifically very wealthy people going up.
0:20:17 But I don’t wanna pretend this is also not consumption.
0:20:19 I just think this is gonna be just so much fun.
0:20:22 I can’t wait to take my boys.
0:20:23 I can’t wait to go with my friends.
0:20:25 I can’t wait to have an excuse
0:20:28 to spend more time in Medellin and Cartagena.
0:20:31 I just think it’s, I’m just so excited about this.
0:20:32 I love Latin American culture.
0:20:34 I love the idea of spending more time in Colombia.
0:20:37 I love the midlife crisis, midlife meat crisis.
0:20:39 I like the investor group.
0:20:40 So this was an easy one.
0:20:43 And it’s not, you know, this is a lot of money,
0:20:44 but it’s not hundreds of millions,
0:20:45 not even tens of millions.
0:20:49 It’s for someone like me who is incredibly blessed
0:20:51 and economically secure, but not a billionaire.
0:20:53 So what is this?
0:20:55 This is capitalism meets consumption.
0:20:58 I just think it’s gonna be so much fun.
0:21:01 So famous last words, but I’m really excited about this.
0:21:05 And maybe I will see you at a lot, equidad game.
0:21:08 Oh my gosh, that’s right.
0:21:10 He’s coming in, El Pato’s coming in.
0:21:13 Moyase color, Moyat.
0:21:15 – That’s all for this episode.
0:21:16 If you’d like to submit a question,
0:21:18 please email a voice recording
0:21:20 to officehours@profitmedia.com.
0:21:22 Again, that’s officehours@profitmedia.com.
0:21:25 (upbeat music)
0:21:28 (crickets chirping)
0:21:38 [BLANK_AUDIO]
0:00:05 As an entrepreneur, you spend a lot of time
0:00:06 in energy building your business.
0:00:08 And chances are, you’ve been so busy,
0:00:09 there hasn’t been a ton of time to think about preparing
0:00:13 for an exit, tax strategies, and wealth management.
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0:00:17 and families like yours streamline complexity
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0:00:19 Crescent was built by entrepreneurs,
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0:00:23 who embrace the fiduciary duty
0:00:26 to place the client’s interests first.
0:00:28 You can learn how to optimize your life
0:00:29 by scheduling a call with a Crescent founder
0:00:32 at CrescentCapital.com.
0:00:33 We are not clients of Crescent.
0:00:34 There are no material conflicts
0:00:36 other than this paid endorsement.
0:00:39 All investing involves risk, including loss of principle.
0:00:41 (funky music)
0:00:45 – Hey, what you doing?
0:00:48 – Programming our thermostat to 17 degrees
0:00:50 when we’re out at work or asleep.
0:00:51 We’re taking control of our energy
0:00:54 use this winter with some easy energy saving tips
0:00:55 I got from Fortis, BC.
0:00:58 – Ooh, conserve energy and save money?
0:01:00 Maybe to buy those matching winter jackets?
0:01:02 – Uh, no, we’re also getting
0:01:04 that whole matching outfit thing under control.
0:01:07 – Discover low and no cost energy saving tips
0:01:10 at fortisbc.com/energysavingtips.
0:01:12 Matching track suits?
0:01:13 – Please no.
0:01:17 – Mike has always wondered
0:01:20 what makes some people want to play action hero.
0:01:23 – When I see people speeding or skydiving
0:01:25 or surfing on hundred foot waves,
0:01:26 I always think, are you crazy?
0:01:27 What are you doing?
0:01:28 Because I’m like risk averse.
0:01:32 I’m trying to like, you know, keep Mike in one piece.
0:01:34 – But what about people who get their thrills
0:01:36 from playing cop?
0:01:40 This week on Explain It To Me, citizens arrest.
0:01:43 Is it a real thing and should it be?
0:01:45 New episodes every Wednesday.
0:01:50 – Welcome to Office Hours with Pravji.
0:01:52 This is the part of the show where we answer your questions
0:01:54 about business, pick tech, entrepreneurship,
0:01:55 and whatever else is on your mind.
0:01:57 If you’d like to submit a question,
0:01:59 please name all a voice recording
0:02:00 to officehours@propgmedia.com.
0:02:04 Again, that’s officehours@propgmedia.com.
0:02:06 I have not seen or read these questions.
0:02:08 Question number one.
0:02:09 – Hi, Pravji.
0:02:12 I’m Anna from Mexico, currently living in Chicago, Illinois.
0:02:15 First of all, thank you for all your hard work.
0:02:18 I listen to your podcast during my commute to school
0:02:21 and it always makes the ride more enjoyable.
0:02:25 My question is about APOs in Latin America.
0:02:27 One of the predictions you did for 2025
0:02:30 was that emerging markets will become
0:02:32 more attractive to investors.
0:02:35 I had the chance to work for a unicorn in the region
0:02:38 and ever since, I have wondered,
0:02:42 why we don’t see many IPOs in Latin America?
0:02:45 I truly believe that there are amazing companies
0:02:47 led by talented entrepreneurs,
0:02:49 but not many of them go public.
0:02:50 What do you think this is the case
0:02:52 and what do you think could be improved
0:02:54 to help more companies in the region
0:02:55 to take that step?
0:02:59 Thank you so much and thank you for choosing that question.
0:03:00 – Anna from Mexico.
0:03:03 I love your accent and the IPO market.
0:03:06 Since the pandemic, the IPO market in Latin America
0:03:08 has really fluctuated.
0:03:11 In 2021, the region raised about $19 billion,
0:03:13 mostly due to Brazil,
0:03:15 which accounted for about 85% of that capital.
0:03:19 Mexico, in comparison, had only one IPO in 2021.
0:03:21 So basically the IPO market in Mexico
0:03:24 could best be described as kind of like dead.
0:03:25 Other than that, it’s fine.
0:03:26 By 2022 and 2023,
0:03:30 IPO listings came to a complete halt in Brazil.
0:03:31 In the first half of 2024,
0:03:33 the entire Latin American and Caribbean region
0:03:35 registered only four IPOs.
0:03:36 Why?
0:03:39 Essentially, the boring stuff, interest rates.
0:03:42 Rates in Brazil rose over seven points
0:03:43 to nine and a quarter points.
0:03:45 Similarly, interest rates in Mexico
0:03:48 increased from 5.5% to 10.5% in the same period.
0:03:50 At the end of 2022,
0:03:52 the average policy rate in Latin America
0:03:56 stood at 18.9%.
0:03:59 Rising interest rates usually decrease investor confidence,
0:04:01 which typically means an outflow of capital
0:04:03 from equity markets into safer fixed income investments.
0:04:06 In short, when you’re getting paid a lot of money
0:04:08 just to put your money in bonds
0:04:12 or would feel like less volatile or safer investments,
0:04:13 the bar to go public gets much higher
0:04:15 and money flows out of equities
0:04:17 and into fixed income instruments,
0:04:20 thereby creating a less hospitable market for IPOs.
0:04:23 Additionally, the rise of populist left-leaning governments
0:04:25 in Latin America has deterred private investment
0:04:29 in the region, resulting in nearly flatline GDP per capita.
0:04:31 I’m actually quite bullish on Mexico.
0:04:32 I think for a few reasons.
0:04:34 One, more political stability,
0:04:37 I would argue, than the US to proximity.
0:04:40 As we try and divest away from China,
0:04:42 one because of geopolitical tensions,
0:04:45 but also just because of supply chain diversification.
0:04:46 I was on the board of chemical turbine outfitters.
0:04:48 We woke up one day and Mila COVID
0:04:51 realized that the disproportionate 60, 70% of our tops
0:04:55 were being manufactured in a five mile radius of Shenzhen.
0:04:58 And basically all 550 of our stores couldn’t get tops in time
0:05:01 and said, okay, even if it costs us a little bit more,
0:05:03 we need some supply chain diversification.
0:05:04 Basically up until COVID,
0:05:07 supply chain was run for the lowest cost, full stop.
0:05:09 How do we eke out more and more costs?
0:05:12 And it ended up we had absolutely no slack,
0:05:13 meaning any eruption at all.
0:05:16 And everything from your refrigerator to your garage door,
0:05:17 they couldn’t find parts
0:05:18 and the whole thing just kind of collapsed on itself.
0:05:21 So essentially the biggest threat to these companies
0:05:23 is no longer consumer demand,
0:05:26 which has been really strong for the last 16 odd years,
0:05:28 but supply chain interruptions
0:05:31 where basically consumers can’t get what they want.
0:05:33 So there’s this amazing
0:05:35 or this incredible inspired effort
0:05:37 towards supply chain heterogeneity
0:05:39 and then there’s supply chain diversification,
0:05:43 moving stuff out of China into Vietnam,
0:05:44 other Southeast Asian countries.
0:05:46 And also the big beneficiary has been Mexico,
0:05:48 which is now our largest trading partner.
0:05:50 So I’m actually quite bullish on Mexico.
0:05:53 IPOs in general seem to be in,
0:05:55 are they encyclical decline or structural decline?
0:05:57 And that is, it used to be,
0:05:59 if you wanted a company to be worth more
0:06:00 than a few hundred million dollars,
0:06:03 you had to access this deep pool of capital
0:06:04 called the public markets.
0:06:05 There just wasn’t enough capital available
0:06:06 in the private markets.
0:06:10 The biggest VC funds only had two or $300 million funds.
0:06:12 So you went public to access
0:06:14 these big pools of public capital.
0:06:16 That’s no longer the case.
0:06:17 People have gone further downstream
0:06:19 and when they see opportunities,
0:06:21 when they see the company accelerating in value,
0:06:22 they wanna squeeze more and more juice
0:06:24 in the private markets as institutional investors.
0:06:26 So they’re like, we don’t need to go public.
0:06:27 As a matter of fact,
0:06:30 if the existing shareholders or employees
0:06:32 want some liquidity, we can give it to them.
0:06:34 We can do secondary offerings.
0:06:35 We don’t want the scrutiny,
0:06:37 the regulation of the public markets.
0:06:38 So we’ll just stay private.
0:06:40 And oftentimes the private markets
0:06:43 are actually trading any premium to the public markets.
0:06:44 So what do you have?
0:06:47 The number of public companies has been reduced,
0:06:49 I think by two thirds over the last 30 or 40 years.
0:06:50 One, it’s harder to go public.
0:06:51 Two, there’s more regulation.
0:06:53 Three, it’s expensive.
0:06:56 And four, mergers and acquisitions
0:06:58 have taken a lot of public companies off of the rolls.
0:07:03 And finally, finally, being private is kind of equivalent
0:07:05 or maybe even more ideal than going public.
0:07:08 And typically, I think also what’s hurt the public markets
0:07:10 is by the time a company decides to go public,
0:07:12 it’s sort of the last stop on the full train.
0:07:16 And that is Google when they went public, enormous upside.
0:07:17 Same with Metta.
0:07:19 These companies still had enormous upside left.
0:07:20 Now most of the, again,
0:07:22 the juices being squeezed in the private markets.
0:07:24 So by the time it gets to the public markets,
0:07:26 it’s sort of like, well, we’ve run out of people
0:07:28 in the private markets who will bid us up.
0:07:30 Let’s see if we can find stupid retail investors
0:07:33 and some of the public market IPOs have underperformed
0:07:37 and it’s made a less hospitable environment.
0:07:40 But yes, the IPO market in Mexico is dead.
0:07:42 I hope it comes back for all of us.
0:07:44 Thanks for the question.
0:07:45 Question number two.
0:07:49 Hey, Scott, this is Kevin from Colorado.
0:07:50 Long time listener of the pod
0:07:53 and want to tell you how much I appreciate your insights
0:07:54 on helping young men.
0:07:57 Although I’d still like to consider myself young.
0:08:00 In 2025, I’m turning 40
0:08:02 and I’m increasingly feeling the responsibility
0:08:04 to make a positive impact
0:08:07 with the abundance of young men I interact with in my life.
0:08:10 I have three young boys, a younger brother,
0:08:14 four younger brothers-in-law and eight young nephews.
0:08:17 Outside of my family, I own two businesses,
0:08:20 each having many young male employees.
0:08:22 And I’m also active in my church
0:08:26 where I help mentor dozens of young men under 18.
0:08:28 I’m finding it hard to get involved
0:08:31 and help these boys that aren’t my sons
0:08:33 because I don’t want to overstep my bounds.
0:08:35 My question, Scott, is this.
0:08:38 With no shortage of opportunities,
0:08:41 how do you recommend I be more proactive
0:08:43 in helping mentor these young men,
0:08:46 especially those I can see are struggling,
0:08:50 without being overbearing or coming off as weird?
0:08:51 – Boss, you’re doing it.
0:08:54 You know, raising good men,
0:08:57 raising confident, loving, patriotic boys,
0:09:01 that’s kind of 90% of what you’re supposed to be doing.
0:09:02 In terms of helping other boys,
0:09:04 when I can’t stand the gestalt in our society
0:09:07 where we suspect men who want to get involved
0:09:08 in other boys’ lives,
0:09:09 I think that is one of the terrible things
0:09:12 about our society that is largely the fault
0:09:13 of the Catholic Church and Michael Jackson,
0:09:15 which I will not go into,
0:09:17 but your inclinations are the right ones.
0:09:18 One, getting involved in groups,
0:09:20 being a scout leader, you know,
0:09:22 teaching Sunday school, whatever it might be,
0:09:25 but sharing some of that confidence,
0:09:27 being a male role model in groups,
0:09:29 also recognizing, or what I think is a great trick
0:09:33 or not a trick, but I do this sometimes with my boys.
0:09:35 One, my boys are 14 and 17,
0:09:38 so no matter how wonderful or fat the vacation is,
0:09:40 unless they’re with other boys or other people their age,
0:09:41 they’re just not gonna have a good time
0:09:42 and they’re gonna get bored and angry
0:09:44 and make our lives miserable.
0:09:45 So I bring friends.
0:09:49 And what I find is I try and find or encourage them
0:09:52 to invite boys that may not have the opportunity
0:09:56 for whatever to hang out or do the kind of things we do.
0:09:58 So I like to bring my boys friends with them.
0:10:01 And I find you don’t need to do that much.
0:10:05 I think just seeing a healthy father-son relationship,
0:10:06 seeing, you know,
0:10:08 you trying to occasionally ask a few questions,
0:10:10 them asking you a few questions,
0:10:12 it’s really powerful ’cause the reality is,
0:10:14 and this is sort of, I don’t know,
0:10:17 disappointing, hurtful as the dad,
0:10:19 what you’re gonna find is with your sons,
0:10:22 they would draw a little bit or they’re just less inclined.
0:10:25 I have young men asking me for advice every goddamn day.
0:10:26 My boys don’t ask me for advice
0:10:29 ’cause they have this very healthy instinct
0:10:33 that says I need to break away from the pride.
0:10:35 And in order to make that a little less painful,
0:10:38 I start thinking my parents are idiots.
0:10:39 And what’s interesting is there’s research
0:10:41 that shows with teen boys,
0:10:44 they’re more apt to listen to their friends’ fathers
0:10:45 than their own fathers.
0:10:46 So what I would say is,
0:10:48 in addition to just doing the good work you’re doing
0:10:52 to get involved in groups where you might have an audience
0:10:54 of more young men or young people that you can influence,
0:10:56 whether it’s a church group,
0:10:58 or as I said, the Boy Scouts or volunteer groups
0:11:00 or coaching or sports leagues,
0:11:03 if you really feel like you have that ability
0:11:05 to connect with young men.
0:11:06 But also on a very basic level,
0:11:08 when you do stuff with your boys,
0:11:12 encourage them, ask them or just invite other boys
0:11:13 their age from your friends.
0:11:15 Especially, I think it’s doing God’s work
0:11:18 to kind of do a little bit of poking around
0:11:19 and find out where there’s single mothers
0:11:21 in your universe and say,
0:11:24 hey, I’m taking my kids to the football game
0:11:27 or I’m taking my kids to whatever it might be
0:11:30 to the beach, would John like to join us?
0:11:32 And I think you’re gonna find a lot of single mothers
0:11:36 are very open to their son spending more time
0:11:38 in the company of men trying to lead a good life
0:11:41 and around other boys, but thanks for the question.
0:11:44 We have one quick break before our final question.
0:11:45 Stay with us.
0:11:53 – Support for PropG comes from Quint.
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0:14:11 Listener, a new year is finally here.
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0:15:11 – Welcome back, question number three.
0:15:15 – Hi, Scott, this is Marcela Terra from Miami.
0:15:18 I am a Colombian immigrant and just when I thought
0:15:21 I couldn’t love any of your content anymore,
0:15:25 I find out you have bought a football team,
0:15:29 not soccer football from my beloved country, Colombia.
0:15:33 I was just curious what motivated you
0:15:35 to join this group that is making the purchase.
0:15:37 And if you have any plans to ace it,
0:15:40 my country, I’m just so excited.
0:15:43 Thank you so much for all your wonderful content
0:15:46 and keep up the good work.
0:15:48 In another non-football note,
0:15:52 just wanted to thank you for showing up vulnerable
0:15:56 and emotional and loving and caring
0:15:58 and also being a baller because I think
0:16:01 that’s your very own brand of healing the world
0:16:06 and helping young men know that those two things
0:16:09 can coexist by sky.
0:16:10 Thank you.
0:16:13 – I’m gonna print this out and read it to myself very night.
0:16:17 This is one, I oftentimes think my producers hate me
0:16:19 and are just so sick of me because I know me
0:16:20 and I know how difficult I can be.
0:16:21 Actually, I’m not difficult.
0:16:23 I don’t think I’m difficult, am I difficult?
0:16:26 But I’m shocked that they let this get through.
0:16:28 So thank you for the really kind words.
0:16:33 So la equidad, the number,
0:16:35 the second best team in Bogota, Colombia.
0:16:38 This is, I don’t wanna say it’s a dream of mine,
0:16:41 but I had always toyed with the idea of I really wanted
0:16:45 to buy or to make an investment in Rangers,
0:16:48 the best team in Scotland.
0:16:49 Because my dad used to go to Rangers games,
0:16:50 I absolutely love football.
0:16:54 I love the idea of investing in a community
0:16:55 and I think it would just be a lot of fun.
0:16:59 Also, quite frankly, it’s sort of a,
0:17:01 I don’t know, a symbol of your success,
0:17:03 midlife crisis, I’m worried I’m gonna die soon,
0:17:05 arrested out of lessons.
0:17:07 I mean, all of that less admirable shit too.
0:17:11 And I met, so how did this come about?
0:17:14 I met some, I met this guy at an investor conference
0:17:16 who’s sort of the Yoda or the Svangale
0:17:19 of investing in teams and he scans the world for teams
0:17:23 and he tries to find teams that are economically viable
0:17:26 because they have a great player academy
0:17:30 and cultivate and chest eight players and then sell them
0:17:34 or they have kind of unrealized or unlocked TV rights,
0:17:36 whatever it might be, or they’re just not a well run team.
0:17:39 This kid literally needs a kid who’s in his 30s,
0:17:41 scours the globe for opportunities.
0:17:42 And he came to me and said,
0:17:43 I’m putting together an investor group,
0:17:45 which includes people much more famous than me,
0:17:48 including Ryan Reynolds and Rob McAlhaney.
0:17:52 And I got to know Rob because of my work on “Young Man”
0:17:54 and I was in “Welcome to Rexmer,” I was in an episode
0:17:56 and I just was so impressed with this guy.
0:17:59 He’s just such a lovely, talented guy.
0:18:01 And when I saw they were part of the investor group
0:18:04 and it was also an opportunity to spend more time in Colombia,
0:18:07 which I just think is such an incredible country.
0:18:11 And also quite frankly, this is a bite size.
0:18:12 I’m not buying Chelsea.
0:18:14 Chelsea cost four or $5 billion.
0:18:15 I’m not in that weight class.
0:18:18 This is a company that went for dramatically,
0:18:21 dramatically smaller purchase amount.
0:18:23 And I’m also a small owner,
0:18:28 or I think I’m gonna own something like 5% of the team.
0:18:31 But anyways, this is one part investment.
0:18:34 I do believe, I think I’m gonna make money here.
0:18:34 Why?
0:18:35 The fastest growing demographic group
0:18:38 isn’t seniors or Latinos, it’s billionaires
0:18:40 and the super wealthy.
0:18:40 What does that mean?
0:18:42 It means the assets is super wealthy by,
0:18:46 whether it’s hotel rooms in Santropé or Gulf Streams
0:18:49 or Loro Piano or Brunella Cuccinelli
0:18:52 or sports teams are gonna go up in values.
0:18:55 Sports teams typically have sort of a natural monopoly.
0:19:00 And so kind of Columbia League One does not have only,
0:19:04 they sequester, we can’t just start a football team.
0:19:05 MLS rights in the United States
0:19:07 are going for several hundred million dollars now.
0:19:09 These are essentially regulated monopolies.
0:19:10 Is that a good thing?
0:19:13 Probably not, but I’m taking advantage of it.
0:19:14 So what do you have?
0:19:18 You have an explosion in the customer base,
0:19:20 specifically wealthy people who buy teams.
0:19:23 And two, you have limited supply.
0:19:25 I like my math here, I like my prospects.
0:19:29 Also, you have this dynamic in terms of media
0:19:32 where people can now avoid ads.
0:19:33 Advertising has become a tax
0:19:35 that the technologically illiterate
0:19:37 or the poor have to pay except for sports.
0:19:40 And that is the only time I ever see adverts,
0:19:41 is they call them here in Britain,
0:19:43 is when I’m watching Arsenal play.
0:19:45 And that is the only time I’ll endure ads
0:19:49 is when I’m watching live TV, which is almost never.
0:19:50 I never watch live news anymore.
0:19:53 I don’t watch, I watch original scripted dramas.
0:19:55 So I’m able to avoid almost every ad
0:19:56 except when I watch live sports,
0:19:59 meaning the TV contracts will go up in value
0:20:01 because advertisers still need to reach people
0:20:02 in their fewer and fewer places.
0:20:04 They can reach them, see above live sports,
0:20:06 which means the TV rights deals will go up,
0:20:09 which means the value, the teams will go up in concert
0:20:11 with the number of buyers,
0:20:14 specifically very wealthy people going up.
0:20:17 But I don’t wanna pretend this is also not consumption.
0:20:19 I just think this is gonna be just so much fun.
0:20:22 I can’t wait to take my boys.
0:20:23 I can’t wait to go with my friends.
0:20:25 I can’t wait to have an excuse
0:20:28 to spend more time in Medellin and Cartagena.
0:20:31 I just think it’s, I’m just so excited about this.
0:20:32 I love Latin American culture.
0:20:34 I love the idea of spending more time in Colombia.
0:20:37 I love the midlife crisis, midlife meat crisis.
0:20:39 I like the investor group.
0:20:40 So this was an easy one.
0:20:43 And it’s not, you know, this is a lot of money,
0:20:44 but it’s not hundreds of millions,
0:20:45 not even tens of millions.
0:20:49 It’s for someone like me who is incredibly blessed
0:20:51 and economically secure, but not a billionaire.
0:20:53 So what is this?
0:20:55 This is capitalism meets consumption.
0:20:58 I just think it’s gonna be so much fun.
0:21:01 So famous last words, but I’m really excited about this.
0:21:05 And maybe I will see you at a lot, equidad game.
0:21:08 Oh my gosh, that’s right.
0:21:10 He’s coming in, El Pato’s coming in.
0:21:13 Moyase color, Moyat.
0:21:15 – That’s all for this episode.
0:21:16 If you’d like to submit a question,
0:21:18 please email a voice recording
0:21:20 to officehours@profitmedia.com.
0:21:22 Again, that’s officehours@profitmedia.com.
0:21:25 (upbeat music)
0:21:28 (crickets chirping)
0:21:38 [BLANK_AUDIO]
Scott discusses the lack of IPOs in Latin America, specifically the difference between cyclical and structural decline. He then gives advice on mentoring young men and wraps up by discussing his stake in a Colombian soccer team, La Equidad Football Club.
Music: https://www.davidcuttermusic.com / @dcuttermusic
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