AI transcript
0:00:03 Spring is here, and you can now get almost anything you need delivered with Uber Eats.
0:00:04 What do we mean by almost?
0:00:08 You can’t get a well-groomed lawn delivered, but you can get chicken parmesan delivered.
0:00:09 Sunshine? No.
0:00:10 Some wine? Yes.
0:00:12 Get almost, almost anything delivered with Uber Eats.
0:00:13 Order now.
0:00:14 Alcohol in select markets.
0:00:14 See app for details.
0:00:22 If you think talking about finances in general is hard, try talking to your parents about money.
0:00:25 What you don’t want to do is like, do you have any money?
0:00:25 What’s going on?
0:00:30 You don’t want to come at them in a more adversarial way.
0:00:33 Or, as I said, you don’t want to come out like you’re now the parent.
0:00:37 What to do about the ups and downs of your 401k?
0:00:43 If you or someone you care about plans to retire soon, that’s on the next Explain It To Me.
0:00:45 New episodes every Sunday morning.
0:00:55 Waveform Podcast, and I wanted to tell you about a special episode we just released called
0:00:58 Your Favorite Creators’ Favorite Cameras.
0:01:01 This is pretty much the biggest behind-the-scenes video on the internet.
0:01:06 We talked to Casey Neistat on why he switched cameras after shooting Canon for so many years,
0:01:11 one of the hosts of the travel game show Jetlag, The Game, whose award-winning show is entirely
0:01:16 shot on iPhones, and tons of other tech, food, and filmmaking creators.
0:01:20 So, if you want to see how your favorite creator is filming their videos, be sure to check out
0:01:22 Waveform wherever you listen to your podcasts.
0:01:27 I’m Scott Galloway, and this is No Mercy, No Malice.
0:01:30 The U.S. has had a great run.
0:01:31 Had.
0:01:35 The Great Rotation, as read by George Hahn.
0:01:47 Stay in your lane, is a person’s way of saying they disagree with you, but they’re too lazy
0:01:49 to counter your points with any evidence or argument.
0:01:52 I get this a lot when I talk about politics.
0:01:58 Separating business from politics is akin to believing that fish swim independent of the
0:01:59 water’s current.
0:02:05 America’s toxic uncertainty is urging capital to look elsewhere.
0:02:12 The world’s biggest yard sale is taking place now that brand America is sick, and the world
0:02:20 is on the front lawn, hoping to pick up $26 trillion in economic activity on the cheap.
0:02:28 Capital flows into EU index funds, and institutional interest in investing in the U.S. are at 30-year
0:02:30 highs and lows, respectively.
0:02:35 As such, I believe Europe and China represent investment opportunities.
0:02:42 Since the fourth quarter of 2024, I’ve been reallocating capital out of the U.S.
0:02:46 Note, this post isn’t investment advice.
0:02:53 The Amazon River flows eastward across South America for 6,400 kilometers before it empties
0:02:54 into the Atlantic.
0:03:02 But 65 million years ago, a blink of the eye in geological time, the Amazon flowed in the
0:03:05 opposite direction, toward the Pacific.
0:03:08 Tidal rivers reverse their flow daily.
0:03:13 Others reverse their flow annually as seasons change.
0:03:19 Three times this century, the Mississippi reversed its flow during hurricane storm surges.
0:03:27 In 1900, civil engineers reversed the flow of the Chicago River, changing its outlet from Lake
0:03:28 Michigan to the Mississippi.
0:03:34 Capital flows also shift cyclically and as a result of human intervention.
0:03:42 Unlike rivers, shifts in capital flows can be sudden and violent, as capital does not pledge
0:03:46 allegiance but moves aggressively towards safety and opportunity.
0:03:53 In the most recent Bank of America fund manager’s survey, the allocation to U.S. equities fell
0:03:56 to a net 36% underweight.
0:04:04 That represents a 53 percentage point swing in the U.S. equity weighting since February, the
0:04:07 biggest two-month decline on record.
0:04:16 In the same survey, 73% of fund managers said they believed U.S. exceptionalism had peaked.
0:04:21 What began as a cyclical movement in capital akin to a river’s seasonal change in direction
0:04:28 now resembles a transformation on the scale of the Amazon’s ancient rerouting, though this
0:04:33 shift was engineered and accelerated by humans, like the redirection of the Chicago River.
0:04:41 Heading into the recent NFL draft, Shadur Sanders, the University of Chicago quarterback and son
0:04:46 of NFL Hall of Famer Deion Sanders, was considered a likely first-round pick.
0:04:53 As it turned out, he was the 144th overall pick in the fifth round, costing him an estimated
0:04:54 $40 million.
0:04:59 I don’t know what Deion told his son afterward, but here’s what I’d tell mine.
0:05:04 You’re better than your worst moments, but never as good as your best ones.
0:05:10 This regression to the mean is one of the most powerful forces in the world.
0:05:15 Also, Deion should tell his son to tell his dad to shut the fuck up.
0:05:25 Over the past decade, U.S. equities have delivered an extraordinary 14.8% annualized return, outpacing
0:05:31 global ex-U.S. equities, 7%, and Eurozone equities, 7.8%.
0:05:38 After a historic bull run, it’s tempting to believe American exceptionalism is a permanent
0:05:39 feature, like gravity.
0:05:47 Since 1975, however, the outperformance cycle for U.S. versus international equities has lasted
0:05:48 eight years on average.
0:05:56 At the end of 2024, the U.S. was 13.8 years into the most recent one.
0:06:00 U.S. equities are regressing to the mean.
0:06:07 Eleven months into the pandemic, Warren Buffett wrote in his annual shareholder letter, quote,
0:06:27 This statement was based on a set of assumptions that our checks and balances protected the U.S.
0:06:28 engines of growth.
0:06:35 Risk aggressiveness, rule of law, IP, university research, attracting premier human capital.
0:06:41 Over the past 100 days, it appears we’ve taken these things for granted, and I now believe
0:06:43 it makes sense to bet on other regions.
0:06:49 Over the long run, I’m bullish on America, as there’s no better platform for unleashing
0:06:50 human potential.
0:06:57 The question isn’t whether to bet against America, however, but at what valuation.
0:07:03 By the way, if a human was engineered to be the polar opposite of Warren Buffett, they’d
0:07:05 look strikingly similar to Peter Navarro.
0:07:13 During the Great Recession, I bought Apple and Amazon at around $10 to $12 per share.
0:07:20 After 15 years and a historic bull run, I’m up around 19x to 22x.
0:07:25 Note, I also bought Netflix at $12 and sold at $10.
0:07:28 I get it wrong all the time.
0:07:34 The chocolate and peanut butter was the combination of great companies priced at historic discounts.
0:07:40 Since then, the natural disruptions that bring valuations down and transfer value from incumbents
0:07:47 to entrants have been arrested by massive stimulus, i.e. deficits, at the behest of an older generation,
0:07:51 which is spending younger people’s money to prop up their wealth.
0:07:52 But that’s another post.
0:07:59 The Great Rotation isn’t as much a bet against U.S. equities, but simply the recognition that
0:08:04 U.S. equities are overvalued relative to those of Europe and China.
0:08:09 The S&P 500 trades at a multiple of 26x.
0:08:15 The Stocks Europe 600 Index trades at a multiple of 14x.
0:08:20 And the CSI 300 trades at a multiple of 15x.
0:08:26 When stock valuations become inflated, future returns decline.
0:08:29 I’ve done well with my Apple and Amazon investments.
0:08:37 But with both of them trading at multiples of 34x, I’ve begun taking profits and looking for returns elsewhere.
0:08:42 At the start of the year, investors were bullish on China for a few reasons.
0:08:49 Strong corporate profits, AI breakthroughs, and the apparent easing of regulatory pressure from Beijing.
0:08:55 The trade war and fears of a global recession have dampened China’s growth forecasts.
0:09:03 The IMF cut its GDP growth forecast for 2025 from 4.6% to 4%.
0:09:10 But as I’ve written before, China is better positioned than the U.S. to weather the fallout from a trade war.
0:09:21 I also believe that, over the long run, tariffs will always trend toward zero, as consumers opt for cheaper goods over everything.
0:09:25 Anyways, the stocks I’m looking at.
0:09:31 Alibaba, China’s answer to Amazon, saw its stock hit an all-time high in 2020.
0:09:35 And since then, it’s off 62%.
0:09:40 Its co-founder, Jack Ma, disappeared from public view after criticizing financial regulators.
0:09:52 He resurfaced in 2023, but it wasn’t until this February that President Xi blessed his return in a meeting with Chinese entrepreneurs, urging them to show their talents.
0:10:02 As one China watcher told CNBC, Xi sent a clear signal that China’s policy priorities are private sector growth and AI.
0:10:16 Last quarter, Alibaba posted $38.5 billion in revenue, a 7.6% year-over-year jump and its fastest rate of increase since 2023.
0:10:24 Net profit increased 3x year-over-year, coming in at $6.7 billion.
0:10:33 Alibaba’s growth was driven by its core e-commerce businesses and the progress it’s making on its AI-powered marketing tool.
0:10:37 The stock is up 50% year-over-year.
0:10:44 I believe Alibaba is well-positioned to continue to take advantage of the U.S.-China AI race.
0:10:55 Alibaba’s challenge is expanding its consumer business units domestically and accelerating cloud growth, up 13% year-over-year this quarter.
0:11:06 China’s household spending is less than 40% of the country’s annual economic output, 20 percentage points below the global average.
0:11:10 Closing that delta offers a massive opportunity.
0:11:14 And again, China’s leaders have signaled support for Alibaba.
0:11:26 In his annual report to Parliament, Premier Li Qiang prioritized consumption over long-standing policies aimed at moving Chinese production up the value chain.
0:11:36 While there’s concern that Chinese consumers may reduce spending on non-subsidized goods, it’s worth thinking about what could go right.
0:11:43 China may finally become a consumer economy, a transformation that would benefit Alibaba.
0:11:54 Finally, Baba’s cloud revenue will likely register a surge as European firms shift their gaze east, away from the U.S., for cloud services.
0:12:07 Starting at $8,000, the BYD Seagull has a range comparable to those of other EVs and comes standard with autonomous driving technology.
0:12:12 And in the coming years, it will receive a battery upgrade with five-minute charging capabilities.
0:12:21 My pivot co-host, Kara Swisher, really wants one, but they aren’t available in the U.S., a fact that hasn’t slowed BYD’s growth.
0:12:33 Its first-quarter revenue jumped 36% year-over-year to $23.5 billion, while its net profit doubled to $1.26 billion.
0:12:42 This year, BYD is on track to sell 5.5 million vehicles, including 800,000 exports.
0:12:45 BYD is the fastest-growing brand in the U.K.
0:12:57 Meanwhile, Tesla, which registered a first-quarter sales decline of 13% year-over-year, trades at a multiple of 130x versus 20x for BYD.
0:13:06 The Chinese company’s mission is to cool the Earth by one degree Celsius, and it’s just launched its first cargo ship.
0:13:19 Even before Liberation Day, capital inflows to European equities were at a decade-long high, suggesting the Great Rotation was already underway.
0:13:26 The trade war has accelerated inflows, but it’s also contributing to a growing sense of European patriotism.
0:13:39 In the first two weeks of April, U.S.-focused funds managed by Amundi, State Street, and UBS saw a combined outflow of $4.5 billion.
0:13:53 As I previously wrote, America’s retreat from the post-war order it created could be a catalyst for the EU to harness its economic strength and finally become a true union.
0:14:01 After Germany’s recent decision to lift its constitutional debt restrictions to boost defense spending above 2% of GDP,
0:14:07 the bloc began discussions to encourage other member states to make similar fiscal reforms.
0:14:15 A defense boom across the continent keeps Ukraine in the fight, but it’s also an economic stimulus for the EU.
0:14:19 I try to avoid helicopters.
0:14:21 They’re noisy and smell of fuel.
0:14:28 To me, helicopters feel flimsy and crude, like a fan stuck on a soda can with duct tape.
0:14:32 I spend most of the journey adding up the staggering number of points of failure.
0:14:39 Statistically, helicopters are 26 times more likely to crash than commercial airplanes,
0:14:45 and helicopter crashes are 230 times more likely to result in a fatality.
0:14:47 The upside?
0:14:52 Helicopters are one of the few last-mile solutions at the premier choke point in travel.
0:15:04 I recently participated in a $50 million PIPE in a British company called Vertical Aerospace that’s developing an electric flying taxi.
0:15:13 Electric vertical takeoff and landing aircraft, EVITOL aircraft, are quieter than helicopters and emissions-free,
0:15:17 and they have lower projected operational and maintenance costs.
0:15:27 They may also turn out to be safer, as EVITOL aircraft use distributed propulsion systems with redundant motors and battery packs.
0:15:34 Built for short hops with small payloads, EVITOL aircraft aren’t meant to replace helicopters,
0:15:40 but rather create a new last-mile solution capable of delivering people, packages, and meals
0:15:44 without having to navigate through traffic jams on the ground.
0:15:49 The EVITOL sector is in the process of testing and regulatory certification.
0:15:52 The FAA is adopting new regulations,
0:15:59 while UK regulators are using an existing framework for aircraft under 5,700 kilograms
0:16:03 for interim operations and tailoring as they go.
0:16:12 Also, the EU has realized that its rich Uncle Sam has gone batshit crazy and can no longer be counted on for support.
0:16:21 If the EU, per its claims, increases defense spending from 1.9% of GDP to 3%,
0:16:28 an incremental $200 billion more will be spent on defense per annum.
0:16:33 This, in my view, could be a turning point for EU stocks and tech firms.
0:16:41 This wager is much riskier than betting on BABA or BYD, as the bankruptcy risk is real.
0:16:45 The stock is off 97% from its high,
0:16:51 and American competitors Joby and Archer trade at 10x that valuation.
0:16:54 I see this one as rocket fuel.
0:16:58 It’s got enormous thrust, upside, but it’s dangerous.
0:16:59 Downside.
0:17:07 I went to a pop-up bar last night, run by the doorwomen from the recently burned-down Chiltern Firehouse.
0:17:10 Hashtag enormous fucking bummer.
0:17:15 I believe the universe was not comfortable with me having access,
0:17:18 they liked me for some reason, to the best room in Europe.
0:17:24 The natural order has been restored, and now I’m back at members clubs with other middle-aged men
0:17:31 trying to fill the void in their chest with alcohol and clinging to the myth that David Beckham and Guy Ritchie also hang out there.
0:17:32 Too much?
0:17:37 Anyway, it wasn’t about the venue, but the people in the room.
0:17:39 And it’s the same here with Vert.
0:17:43 I co-invested with my friend Jason Mudrick, Mudrick Capital.
0:17:50 The previous investments he stitched me into returned 4x and 30x, so he had me at hello.
0:17:57 As brand America shifts from prosperity and rights to oligarchy and corruption,
0:18:03 I distract myself with the great American pastime, wondering how I make money here.
0:18:09 The greatest own goal since Brexit, Iraq, Vietnam is underway.
0:18:13 And, as in any disruption, there is an explosion in Alpha.
0:18:22 It’s fun, and, again, helps distract me from watching the pillars that provided me with a life my immigrant parents couldn’t imagine crumble.
0:18:24 It helps.
0:18:26 Sort of.
0:18:31 Life is so rich.
0:18:42 Life is so rich.
0:00:04 What do we mean by almost?
0:00:08 You can’t get a well-groomed lawn delivered, but you can get chicken parmesan delivered.
0:00:09 Sunshine? No.
0:00:10 Some wine? Yes.
0:00:12 Get almost, almost anything delivered with Uber Eats.
0:00:13 Order now.
0:00:14 Alcohol in select markets.
0:00:14 See app for details.
0:00:22 If you think talking about finances in general is hard, try talking to your parents about money.
0:00:25 What you don’t want to do is like, do you have any money?
0:00:25 What’s going on?
0:00:30 You don’t want to come at them in a more adversarial way.
0:00:33 Or, as I said, you don’t want to come out like you’re now the parent.
0:00:37 What to do about the ups and downs of your 401k?
0:00:43 If you or someone you care about plans to retire soon, that’s on the next Explain It To Me.
0:00:45 New episodes every Sunday morning.
0:00:55 Waveform Podcast, and I wanted to tell you about a special episode we just released called
0:00:58 Your Favorite Creators’ Favorite Cameras.
0:01:01 This is pretty much the biggest behind-the-scenes video on the internet.
0:01:06 We talked to Casey Neistat on why he switched cameras after shooting Canon for so many years,
0:01:11 one of the hosts of the travel game show Jetlag, The Game, whose award-winning show is entirely
0:01:16 shot on iPhones, and tons of other tech, food, and filmmaking creators.
0:01:20 So, if you want to see how your favorite creator is filming their videos, be sure to check out
0:01:22 Waveform wherever you listen to your podcasts.
0:01:27 I’m Scott Galloway, and this is No Mercy, No Malice.
0:01:30 The U.S. has had a great run.
0:01:31 Had.
0:01:35 The Great Rotation, as read by George Hahn.
0:01:47 Stay in your lane, is a person’s way of saying they disagree with you, but they’re too lazy
0:01:49 to counter your points with any evidence or argument.
0:01:52 I get this a lot when I talk about politics.
0:01:58 Separating business from politics is akin to believing that fish swim independent of the
0:01:59 water’s current.
0:02:05 America’s toxic uncertainty is urging capital to look elsewhere.
0:02:12 The world’s biggest yard sale is taking place now that brand America is sick, and the world
0:02:20 is on the front lawn, hoping to pick up $26 trillion in economic activity on the cheap.
0:02:28 Capital flows into EU index funds, and institutional interest in investing in the U.S. are at 30-year
0:02:30 highs and lows, respectively.
0:02:35 As such, I believe Europe and China represent investment opportunities.
0:02:42 Since the fourth quarter of 2024, I’ve been reallocating capital out of the U.S.
0:02:46 Note, this post isn’t investment advice.
0:02:53 The Amazon River flows eastward across South America for 6,400 kilometers before it empties
0:02:54 into the Atlantic.
0:03:02 But 65 million years ago, a blink of the eye in geological time, the Amazon flowed in the
0:03:05 opposite direction, toward the Pacific.
0:03:08 Tidal rivers reverse their flow daily.
0:03:13 Others reverse their flow annually as seasons change.
0:03:19 Three times this century, the Mississippi reversed its flow during hurricane storm surges.
0:03:27 In 1900, civil engineers reversed the flow of the Chicago River, changing its outlet from Lake
0:03:28 Michigan to the Mississippi.
0:03:34 Capital flows also shift cyclically and as a result of human intervention.
0:03:42 Unlike rivers, shifts in capital flows can be sudden and violent, as capital does not pledge
0:03:46 allegiance but moves aggressively towards safety and opportunity.
0:03:53 In the most recent Bank of America fund manager’s survey, the allocation to U.S. equities fell
0:03:56 to a net 36% underweight.
0:04:04 That represents a 53 percentage point swing in the U.S. equity weighting since February, the
0:04:07 biggest two-month decline on record.
0:04:16 In the same survey, 73% of fund managers said they believed U.S. exceptionalism had peaked.
0:04:21 What began as a cyclical movement in capital akin to a river’s seasonal change in direction
0:04:28 now resembles a transformation on the scale of the Amazon’s ancient rerouting, though this
0:04:33 shift was engineered and accelerated by humans, like the redirection of the Chicago River.
0:04:41 Heading into the recent NFL draft, Shadur Sanders, the University of Chicago quarterback and son
0:04:46 of NFL Hall of Famer Deion Sanders, was considered a likely first-round pick.
0:04:53 As it turned out, he was the 144th overall pick in the fifth round, costing him an estimated
0:04:54 $40 million.
0:04:59 I don’t know what Deion told his son afterward, but here’s what I’d tell mine.
0:05:04 You’re better than your worst moments, but never as good as your best ones.
0:05:10 This regression to the mean is one of the most powerful forces in the world.
0:05:15 Also, Deion should tell his son to tell his dad to shut the fuck up.
0:05:25 Over the past decade, U.S. equities have delivered an extraordinary 14.8% annualized return, outpacing
0:05:31 global ex-U.S. equities, 7%, and Eurozone equities, 7.8%.
0:05:38 After a historic bull run, it’s tempting to believe American exceptionalism is a permanent
0:05:39 feature, like gravity.
0:05:47 Since 1975, however, the outperformance cycle for U.S. versus international equities has lasted
0:05:48 eight years on average.
0:05:56 At the end of 2024, the U.S. was 13.8 years into the most recent one.
0:06:00 U.S. equities are regressing to the mean.
0:06:07 Eleven months into the pandemic, Warren Buffett wrote in his annual shareholder letter, quote,
0:06:27 This statement was based on a set of assumptions that our checks and balances protected the U.S.
0:06:28 engines of growth.
0:06:35 Risk aggressiveness, rule of law, IP, university research, attracting premier human capital.
0:06:41 Over the past 100 days, it appears we’ve taken these things for granted, and I now believe
0:06:43 it makes sense to bet on other regions.
0:06:49 Over the long run, I’m bullish on America, as there’s no better platform for unleashing
0:06:50 human potential.
0:06:57 The question isn’t whether to bet against America, however, but at what valuation.
0:07:03 By the way, if a human was engineered to be the polar opposite of Warren Buffett, they’d
0:07:05 look strikingly similar to Peter Navarro.
0:07:13 During the Great Recession, I bought Apple and Amazon at around $10 to $12 per share.
0:07:20 After 15 years and a historic bull run, I’m up around 19x to 22x.
0:07:25 Note, I also bought Netflix at $12 and sold at $10.
0:07:28 I get it wrong all the time.
0:07:34 The chocolate and peanut butter was the combination of great companies priced at historic discounts.
0:07:40 Since then, the natural disruptions that bring valuations down and transfer value from incumbents
0:07:47 to entrants have been arrested by massive stimulus, i.e. deficits, at the behest of an older generation,
0:07:51 which is spending younger people’s money to prop up their wealth.
0:07:52 But that’s another post.
0:07:59 The Great Rotation isn’t as much a bet against U.S. equities, but simply the recognition that
0:08:04 U.S. equities are overvalued relative to those of Europe and China.
0:08:09 The S&P 500 trades at a multiple of 26x.
0:08:15 The Stocks Europe 600 Index trades at a multiple of 14x.
0:08:20 And the CSI 300 trades at a multiple of 15x.
0:08:26 When stock valuations become inflated, future returns decline.
0:08:29 I’ve done well with my Apple and Amazon investments.
0:08:37 But with both of them trading at multiples of 34x, I’ve begun taking profits and looking for returns elsewhere.
0:08:42 At the start of the year, investors were bullish on China for a few reasons.
0:08:49 Strong corporate profits, AI breakthroughs, and the apparent easing of regulatory pressure from Beijing.
0:08:55 The trade war and fears of a global recession have dampened China’s growth forecasts.
0:09:03 The IMF cut its GDP growth forecast for 2025 from 4.6% to 4%.
0:09:10 But as I’ve written before, China is better positioned than the U.S. to weather the fallout from a trade war.
0:09:21 I also believe that, over the long run, tariffs will always trend toward zero, as consumers opt for cheaper goods over everything.
0:09:25 Anyways, the stocks I’m looking at.
0:09:31 Alibaba, China’s answer to Amazon, saw its stock hit an all-time high in 2020.
0:09:35 And since then, it’s off 62%.
0:09:40 Its co-founder, Jack Ma, disappeared from public view after criticizing financial regulators.
0:09:52 He resurfaced in 2023, but it wasn’t until this February that President Xi blessed his return in a meeting with Chinese entrepreneurs, urging them to show their talents.
0:10:02 As one China watcher told CNBC, Xi sent a clear signal that China’s policy priorities are private sector growth and AI.
0:10:16 Last quarter, Alibaba posted $38.5 billion in revenue, a 7.6% year-over-year jump and its fastest rate of increase since 2023.
0:10:24 Net profit increased 3x year-over-year, coming in at $6.7 billion.
0:10:33 Alibaba’s growth was driven by its core e-commerce businesses and the progress it’s making on its AI-powered marketing tool.
0:10:37 The stock is up 50% year-over-year.
0:10:44 I believe Alibaba is well-positioned to continue to take advantage of the U.S.-China AI race.
0:10:55 Alibaba’s challenge is expanding its consumer business units domestically and accelerating cloud growth, up 13% year-over-year this quarter.
0:11:06 China’s household spending is less than 40% of the country’s annual economic output, 20 percentage points below the global average.
0:11:10 Closing that delta offers a massive opportunity.
0:11:14 And again, China’s leaders have signaled support for Alibaba.
0:11:26 In his annual report to Parliament, Premier Li Qiang prioritized consumption over long-standing policies aimed at moving Chinese production up the value chain.
0:11:36 While there’s concern that Chinese consumers may reduce spending on non-subsidized goods, it’s worth thinking about what could go right.
0:11:43 China may finally become a consumer economy, a transformation that would benefit Alibaba.
0:11:54 Finally, Baba’s cloud revenue will likely register a surge as European firms shift their gaze east, away from the U.S., for cloud services.
0:12:07 Starting at $8,000, the BYD Seagull has a range comparable to those of other EVs and comes standard with autonomous driving technology.
0:12:12 And in the coming years, it will receive a battery upgrade with five-minute charging capabilities.
0:12:21 My pivot co-host, Kara Swisher, really wants one, but they aren’t available in the U.S., a fact that hasn’t slowed BYD’s growth.
0:12:33 Its first-quarter revenue jumped 36% year-over-year to $23.5 billion, while its net profit doubled to $1.26 billion.
0:12:42 This year, BYD is on track to sell 5.5 million vehicles, including 800,000 exports.
0:12:45 BYD is the fastest-growing brand in the U.K.
0:12:57 Meanwhile, Tesla, which registered a first-quarter sales decline of 13% year-over-year, trades at a multiple of 130x versus 20x for BYD.
0:13:06 The Chinese company’s mission is to cool the Earth by one degree Celsius, and it’s just launched its first cargo ship.
0:13:19 Even before Liberation Day, capital inflows to European equities were at a decade-long high, suggesting the Great Rotation was already underway.
0:13:26 The trade war has accelerated inflows, but it’s also contributing to a growing sense of European patriotism.
0:13:39 In the first two weeks of April, U.S.-focused funds managed by Amundi, State Street, and UBS saw a combined outflow of $4.5 billion.
0:13:53 As I previously wrote, America’s retreat from the post-war order it created could be a catalyst for the EU to harness its economic strength and finally become a true union.
0:14:01 After Germany’s recent decision to lift its constitutional debt restrictions to boost defense spending above 2% of GDP,
0:14:07 the bloc began discussions to encourage other member states to make similar fiscal reforms.
0:14:15 A defense boom across the continent keeps Ukraine in the fight, but it’s also an economic stimulus for the EU.
0:14:19 I try to avoid helicopters.
0:14:21 They’re noisy and smell of fuel.
0:14:28 To me, helicopters feel flimsy and crude, like a fan stuck on a soda can with duct tape.
0:14:32 I spend most of the journey adding up the staggering number of points of failure.
0:14:39 Statistically, helicopters are 26 times more likely to crash than commercial airplanes,
0:14:45 and helicopter crashes are 230 times more likely to result in a fatality.
0:14:47 The upside?
0:14:52 Helicopters are one of the few last-mile solutions at the premier choke point in travel.
0:15:04 I recently participated in a $50 million PIPE in a British company called Vertical Aerospace that’s developing an electric flying taxi.
0:15:13 Electric vertical takeoff and landing aircraft, EVITOL aircraft, are quieter than helicopters and emissions-free,
0:15:17 and they have lower projected operational and maintenance costs.
0:15:27 They may also turn out to be safer, as EVITOL aircraft use distributed propulsion systems with redundant motors and battery packs.
0:15:34 Built for short hops with small payloads, EVITOL aircraft aren’t meant to replace helicopters,
0:15:40 but rather create a new last-mile solution capable of delivering people, packages, and meals
0:15:44 without having to navigate through traffic jams on the ground.
0:15:49 The EVITOL sector is in the process of testing and regulatory certification.
0:15:52 The FAA is adopting new regulations,
0:15:59 while UK regulators are using an existing framework for aircraft under 5,700 kilograms
0:16:03 for interim operations and tailoring as they go.
0:16:12 Also, the EU has realized that its rich Uncle Sam has gone batshit crazy and can no longer be counted on for support.
0:16:21 If the EU, per its claims, increases defense spending from 1.9% of GDP to 3%,
0:16:28 an incremental $200 billion more will be spent on defense per annum.
0:16:33 This, in my view, could be a turning point for EU stocks and tech firms.
0:16:41 This wager is much riskier than betting on BABA or BYD, as the bankruptcy risk is real.
0:16:45 The stock is off 97% from its high,
0:16:51 and American competitors Joby and Archer trade at 10x that valuation.
0:16:54 I see this one as rocket fuel.
0:16:58 It’s got enormous thrust, upside, but it’s dangerous.
0:16:59 Downside.
0:17:07 I went to a pop-up bar last night, run by the doorwomen from the recently burned-down Chiltern Firehouse.
0:17:10 Hashtag enormous fucking bummer.
0:17:15 I believe the universe was not comfortable with me having access,
0:17:18 they liked me for some reason, to the best room in Europe.
0:17:24 The natural order has been restored, and now I’m back at members clubs with other middle-aged men
0:17:31 trying to fill the void in their chest with alcohol and clinging to the myth that David Beckham and Guy Ritchie also hang out there.
0:17:32 Too much?
0:17:37 Anyway, it wasn’t about the venue, but the people in the room.
0:17:39 And it’s the same here with Vert.
0:17:43 I co-invested with my friend Jason Mudrick, Mudrick Capital.
0:17:50 The previous investments he stitched me into returned 4x and 30x, so he had me at hello.
0:17:57 As brand America shifts from prosperity and rights to oligarchy and corruption,
0:18:03 I distract myself with the great American pastime, wondering how I make money here.
0:18:09 The greatest own goal since Brexit, Iraq, Vietnam is underway.
0:18:13 And, as in any disruption, there is an explosion in Alpha.
0:18:22 It’s fun, and, again, helps distract me from watching the pillars that provided me with a life my immigrant parents couldn’t imagine crumble.
0:18:24 It helps.
0:18:26 Sort of.
0:18:31 Life is so rich.
0:18:42 Life is so rich.
As read by George Hahn.
The Great Rotation
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